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Stewart, Schmitz and Hart Businesses Sue Amway and Alticor

August 20, 2003

Businesses owned by Amway Diamonds Schmitz and Hart, and Crown Ken Stewart, have filed a new lawsuit, this time naming Alticor, Inc., Quixtar, and Amway as defendants. Businesses owned by the three had previously filed suit against other high-level distributors and their businesses, but had not named Amway itself.

In papers filed in the US District Court, Western District of Missouri, St. Joseph Division, the companies Nitro Distributing, Inc.; West Palm Convention Services, Inc.; Netco, Inc.; Schmitz & Associates, Inc.; and U-Can-II, Inc. have accused Amway, Inc., Quixtar, Inc., and Alticor, Inc. of antitrust violations, including:

  • Group Boycott
  • Allocation of Customers
  • Illegal Tying
  • Conspiracy to Monopolize
  • Tortious Interference
  • Civil Conspiracy

They are seeking undisclosed financial damages.

The suit accuses Amway, Quixtar and Alticor of conspiring with "kingpin" diamonds in the Yager, Britt, and Puryear lines of sponsorship to violate antitrust laws.

Complicating the suit are the changes in corporate identity since 1999 of what used to be Amway. According to the pleading:

"Quixtar is a successor in interest to Amway in regard to Amway's agreements with Amway's former distributors. As used herein, from the incorporation of Quixtar in 1999 and thereafter, reference to Quixtar is reference to Amway as well and vice versa.

"11. Alticor is and/or was the parent company of Amway and Quixtar, and Alticor since sometime in 2001, assumed the name "Amway Corporation" as a fictitious name for the purpose of conducting business. Alticor is also a successor in interest of Amway. On knowledge and belief, Alticor is Amway, and as used herein, reference to Amway is reference to Alticor.

"12. Amway moved all of its distributors to Quixtar effective January 1, 2003. Prior to that time, beginning in late 1999 or early 2000, distributors could elect to be in either Amway or Quixtar. On knowledge and belief, this move was prompted by the adverse publicity and increasing negatives experienced by Amway in the 1990s as abuses within the tool and function business (hereinafter described) spread.

"13. On knowledge and belief, the business operated by Quixtar today is essentially the Amway business. Use of the word "Amway" is discouraged in the Quixtar business. On knowledge and belief, Alticor has simply repackaged Amway's business into Quixtar. On knowledge and belief, Quixtar is Amway. The former Amway distributors are now Quixtar distributors. A former Amway distributor's respective position within the Amway pyramid is the same relative position within the Quixtar pyramid."

Throughout the suit, the names "Amway," "Quixtar," and "Alticor" are used interchangeably.

The suit describes the motivational tools business, and charges that Amway:

  • assisted the diamond "kingpins" to exercise illegal amounts of control over the so-called "independent" distributors in their downlines,
  • conspired with them to restrain trade, and
  • benefited financially from the illegal acts of the "kingpins."

If the plaintiffs prevail, it is likely to open a Pandora's box of litigation against Amway and its owners.

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Read complete text of lawsuit,
with links to other documents, and sound clips.

Amway/Quixtar Lawsuits

Amway v Scheibeler
Stewart v Gooch, Childers et al, Third Amended Complaint, January 2003
Hart v Gooch, Childers et al, First Amended Complaint, January, 2003
Netco v Dunn, Gooch, Childers et al, First Amended Complaint, January, 2003
Hart v Gooch, Childers et al, April 19, 2002
Stewart v Gooch, Childers et al, January 2002
Scheibeler v Harteis, November, 2001
$16 Million in Damages Sought in AMO "Tools" Squabble, August 3, 2000
Canadian Tax Authorities v Distributors, July 14, 2000
IRS v Distributors, June 2, 2000
Fish Deposition
Team Resources v Fish and Andrews
Morrison et al v. Wilson et al, June 22, 2000
Woods v Britt, August 1998
Musgrove v Amway, June 1998
Griffith v Amway, May 1998
Taylor v Duncan, March 1998
Hayden v DiSalvatore
Touchton v Amway, Gooch et al
Lavoie v Yager, January, 1998
Hart v Gooch et al, April 1997
Setzer v Amway, 1985

Lawsuit Accuses Amway and "Kingpin" Distributors Of Fostering Two Myths:

  1. You can achieve the riches portrayed by the "kingpins" by working hard in Amway.
  2. Distributors will be treated fairly under the rules as regards the motivational tool business.

The truth, according to the suit, is that

  1. Amway cannot provide the wealth portrayed. Instead, that comes from the motivational tool business.
  2. "Amway kingpins control the destiny of those below them, and they control and manipulate the tool and function business in such a way, with Amway's assistance, that a tool and function distributor cannot attain these riches unless the Amway kingpins so elect. And few do attain these riches, regardless of the size of their downline distributor network."


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