Judge Skeptical of Quixtar Settlement; Proposed Attorneys’ Fees May Be Too High

A federal judge in California questioned a proposed settlement between Amway’s successor-in-interest, Quixtar, and its present and former distributors July 20 because the plaintiffs’ attorneys planned to request $20 million in fees to come out of a $34 million cash fund (Pokorny v. Quixtar Inc.).

In their underlying claims, the distributors, called independent business owners or IBOs, contended that Quixtar misled them about potential profits in selling Quixtar products, and sold them business tools that were not helpful in selling the products, but instead instructed them on how to recruit other sellers.

This motion for settlement was the ...