Huron Law Group: California Court Reinstates Class Action Allegations Against Avon for Unfair Business Practices, Fraud and Breach of Contract

LOS ANGELES--(BUSINESS WIRE)--May 10, 2005--In a published decision released on Friday, May 6, the California Court of Appeal reinstated class action allegations by women who sell or sold beauty products for Avon Products, Inc. as independent sales representatives. The Court also ruled that the trial court erred in dismissing the Avon Ladies' claims against Avon for unfair business practices, fraud and breach of contract and ordered them reinstated as well.

The suit charges that Avon engages in channel stuffing, in which Avon forces products on its sales representatives by deliberately shipping them products they did not order, or products far in excess of the quantities they ordered. When the sales representatives return the unordered products for credit, Avon refuses to grant the credit, in violation of its own return policy.

“The Court of Appeal's decision is a tremendous victory for Avon Ladies”

The suit, filed January 23, 2004, also alleges that Avon falsely denies receiving the returned products from its sales representatives, coerces the representatives to accept and pay for unordered products rather than return them for credit; unfairly requires the representatives to pay the return shipping costs; revokes its policy of "instant credit" and requires the representatives to pay for unordered products until Avon completes its lengthy return process; refuses to ship any further products until the representatives pay for their entire orders in advance, which most cannot afford to do; threatens to terminate the representatives' businesses if they persist in returning unordered products for credit; and, when representatives quit or are terminated, submits claims to collection agencies based on unordered products that were returned to Avon in order to harass the representatives into paying monies they do not owe.

In restating the class action allegations, the Court of Appeal ruled that "if the class representatives prove Avon engaged in the practices alleged ... The class members need only show they are members of the class -- representatives who paid for unordered products they returned -- and the amount of their damages." The fact that each sales representative may have to independently establish her damages does not prohibit the class from being certified.

The Court of Appeal also reinstated plaintiffs Raven Blakemore, Lupe Lane and Robin Smith, who the trial court dismissed after finding that they had contradicted their allegations. The Court of Appeal disagreed stating: "the Blakemore plaintiffs neither omit nor contradict any of the allegations in their earlier complaints."

"The Court of Appeal's decision is a tremendous victory for Avon Ladies," said Jeffrey Huron, lead counsel for the plaintiffs. "Without the possibility of a class action, Avon Ladies, who are ordinary women trying to make ends meet, would be defenseless against Avon's illegal channel stuffing practices. This decision not only reinstates the class allegations but also will make it difficult for Avon to defeat class certification. We have identified sales representatives in more than thirty states who have been victims of Avon's unfair business practices and estimate that the size of the nationwide class numbers in the thousands."

About Huron law group LLP -- Based in Los Angeles, California, Huron law group specializes in business litigation and successfully represented plaintiffs in a class action against First USA for unfair business practices. Most recently, the firm led a community bank to an undisclosed settlement in a fraud case against a top ten accounting firm.

Huron law group can be located online at www.huronlaw.com.