Complete List of LuLaRoe Lawsuits – Defective Leggings & Pyramid Schemes

By | 2018-05-09T17:40:54+00:00 May 8th, 2018|Categories: LuLaRoe, MLM Lawsuits, MLM News|

Last year, we wrote a review of LuLaRoe that examined its products and distributors’ ability to make money. Since then, both customers and other companies that LuLaRoe (a multi-level marketing company) does business with have filed lawsuits against the leggings brand, alleging that their products are defective and that the company is structured as a pyramid scheme.

Timeline of LuLaRoe Lawsuits

Webster vs. LuLaRoe Inc.

  • Date: 2/17/17
  • Plaintiffs: Rachael Webster
  • Defendant: LuLaRoe, Inc.
  • Lawsuit Amount: Not set.
  • Download PDF

In early 2017, LuLaRoe customer Rachael Webster brought a class action lawsuit against LuLaRoe alleging that it knowingly overcharged sales tax for customers in states that either don’t have a sales tax, or exempt clothing from sales taxes. LuLaRoe CEO Mark Stidham appears to implicate himself in the matter with a message to distributors in 2016 saying:

Your customers will be charged the sales tax from your state, city and/or county, not theirs. If you live in a state where sales tax does not apply, then your customer will not be charged any sales tax. State laws require us to collect this and in order to comply with the reporting they have instructed us to provide them relative to your sales and we have found this method to be the most efficient for now.

Because consultants were forced to use LuLaRoe’s proprietary POS system called “Audrey”, they were forced to comply with the company’s incorrect sales tax approach and overtax many of their customers. The company announced that the vendor responsible for this error was terminated, but the lawsuit has moved forward regardless.

Lemberg, Laurence, Bluder, and Stuckart vs. LuLaRoe Inc.

  • Date: 10/13/17
  • Plaintiffs: Stella Lemberg, Jeni Laurence, Amandra Bluder, and Carissa Stuckart
  • Defendant: LuLaRoe, Inc.
  • Lawsuit Amount: Not set.
  • Download PDF

In October 2017, four former LuLaRoe consultants filed a lawsuit alleging misrepresentation on the part of the company regarding its “100% Buyback Policy”. From the lawsuit:

Instead of honoring its 100% buyback and free shipping agreement, LuLaRoe is not providing free shipping and is honoring at most a 90% refund and even then it comes with numerous exceptions, thereby cheating Plaintiffs and the Class out of thousands of dollars.

The plaintiffs argue that LuLaRoe encourages consultants to keep around $20,000 worth of inventory at all times and promises that there is little to no risk of doing so because of their buyback policy. However, once the consultants realized that the market was over-saturated and that they were not going to be able to sell their inventory, they initiated buybacks with LuLaRoe headquarters. LuLaRoe realized it had a significant problem on its hands and initiated multiple “policy changes” which made it harder for consultants to get a refund for their excess inventory. As a result, each of the consultants were stuck with tens of thousands of dollars worth of inventory, and believe there are many more consultants who were left in the same situation.

Berry, Hayton, and Scheffer vs. LuLaRoe Inc.

  • Date: 10/27/17
  • Plaintiffs: Aki Berry, Cheryl Hayton, and Tiffany Scheffer
  • Defendant: LuLaRoe, Inc.
  • Lawsuit Amount: $1 Billion (USD)
  • Download PDF

Also in October 2017, 3 former LuLaRoe distributors filed one of the largest MLM class action lawsuits ever, alleging that the leggings company misrepresented income potential. The lawsuit claims that the market quickly became over-saturated with LuLaRoe distributors, making it impossible for distributors to make a profit on their initial $5,000 investments (the requirement for getting started). Here’s an excerpt from the introduction:

Plaintiffs were unknowingly recruited into Defendants’ pyramid scheme through manipulation and misinformation. Recruits were told that the opportunity entailed “part-time work for full time pay.” This was not the case. Once consultants signed up, they were pressured to invest and reinvest by purchasing Defendants’ clothing products – regardless of whether they were able to sell their inventory. Plaintiffs were inundated with the slogan “buy more sell more” and were told they would recoup their investments through retail sales and recruitment. Plaintiffs and tens of thousands of other consultants never even made a profit – they were duped by Defendants’ endless chain scheme that only profited a few and only made payments to consultants based on how much product those consultants and their recruits purchased on a regular basis.


If you are anyone you know would like to learn more about these class action lawsuits, please email us at info@mlmnewsreport.com

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