Nielson v. Myers
Oregon Court of Appeals
90 P.3d 628, 193 Or. App. 388 (2004)
- Written by Heather Whittemore, JD
Facts
The Northwest Family Reunion (the club) was a gifting club that operated in Oregon. Members of the club participated by paying $2,000 in order to be placed on a board. If the members recruited other participants, they would move up the board. If a member was able to move to the top of the board, he could earn over $13,000. The Oregon attorney general (defendant) issued a press release stating that the club was an illegal pyramid scheme in violation of the Oregon Unlawful Trade Practices Act, which was the state unfair or deceptive acts or practices statute. The press release also warned members of the club that they would be fined if they attempted to recruit new participants. A group of members (the plaintiff members) (plaintiffs) filed a declaratory-judgment lawsuit in Oregon state court, seeking a declaration that the club was lawful and an injunction stopping the attorney general from interfering with the club. The plaintiff members argued that the club was not an illegal pyramid scheme because anyone could discuss or encourage participation in the club, and because there was no deception required to recruit participants. The plaintiff members and the attorney general filed cross-motions for summary judgment. The trial court granted summary judgment for the attorney general, holding that the club was an illegal pyramid scheme under Oregon Unlawful Trade Practices Act. The plaintiff members moved for a new trial, which the trial court denied. The plaintiff members appealed.
Rule of Law
Issue
Holding and Reasoning (Linder, J.)
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