Meet MLM Attorneys Nehra & Waak VITA, GERALD P. NEHRA

Mr. Nehra is an Attorney in private practice in Muskegon, Michigan. He is one of a very few attorneys nationwide whose practice is devoted exclusively to direct selling and multi-level marketing issues. His 34 years of legal experience includes 9 years at Amway Corporation where he was Director of the Legal Division.

ADMITTED IN:

• Michigan, 1970; New York, 1972; and Colorado, 1992.
• Federal Courts in Michigan, 1970; and New York, 1972.
• Sixth Circuit Court of Appeals, 1976.

CAREER EXPERIENCE:

• Private practice attorney, specifically focused on direct sales and multi-level marketing issues, August 1992 to date. Representative clients include Amsoil, Ardyss, Bing Han, Dove Chocolate, Eniva, Essentially Yours, Financial Destination, Gano Excel, Isagenix, Life Plus, Orovo, Pinnacle Communications, Wachters’ Organic Sea Products, and ViSalus Sciences.
• Vice President – Legal and Human Resources, The Fuller Brush Company, November 1991 to August 1992 when, at my request, I became independent outside counsel for the company.
• Director – Legal Division, Amway Corporation. Began in September of 1982 as Deputy Chief Attorney and became head of the Legal Division in 1984, continuing through October 1991. Added responsibilities included Assistant Secretary in 1984, Profit Sharing Trustee in 1986, and Corporate Secretary in 1991.
• Vice President, General Counsel, Church & Dwight Co. Inc. (The Arm & Hammer Company), 1979-1982.
• Attorney, Staff Attorney, Senior Attorney, and Regional Counsel, International Business Machines (IBM) Corporation, 1971-1979, at locations in Armonk, New York, Owego, New York, and Franklin Lakes, New Jersey.
• Sales Representative and Systems Engineer, IBM, Dearborn, Michigan, assigned to the Ford Motor Company account, May 1967 to June 1971.

EXPERT WITNESS CREDENTIALS:

Have counseled and testified on many legal issues of direct selling, including comprehensive evaluations of business plans, and whether they meet the legal standards established in the landmark FTC v. Amway case and cases which followed. Have analyzed in detail the differences and legal significance of plan design, controlled by the company, and plan implementation, where distributor conduct is often the challenge. Gave testimony on direct selling legal issues in Herbalife v. McCormack, Dunda v. Mary Kay, Florida v. P.R.S.I., FTC v. Trek Alliance, and International Galleries Inc. v. LaRaza.

MULTI-LEVEL SPECIFICS:

• Handled the legal and personnel issues for conversion of the single-level direct sales organization to a multi-level system at Fuller Brush. Issues included marketing plan legal review and necessary modification, sales force transition and conversion, literature review, sales training rules and ethics enforcement, advertising guidelines, product line selection and pricing, and creation of a distributor advisory board.
• Negotiated multi-level compliance issues, including Consent Orders and Assurances of Voluntary Compliance, with the Attorney General Offices in numerous states, including Arizona, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, Missouri, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, and Wisconsin.
• Took immediate corrective action with a high ranking distributor for practices that put an entire program in jeopardy in the state of Florida.
• Meet and speak regularly with corporate officers and top distributors to evaluate progress of programs, listen to recommendations for adjustments and discuss and advise on future plans.
• Processed through to completion more than 350 trademark applications for numerous clients.

WHILE AT AMWAY:

• Directed the corporate legal function, including counsel to senior management and subsidiaries. Hired and managed outside counsel, and advised on legal issues associated with corporate operating and corporate planning decisions.
• As Corporate Secretary, attended to all matters of corporate governance and corporate structure for the parent corporation and over 70 subsidiaries.
• Negotiated with the FTC, FDA, CPSC, and other agencies regarding Amway’s products and services and Sales Plan positioning. Reviewed and modified labels and literature to comply with regulatory requirements.
• Managed the patent function and over 4000 trademark registrations in over 31 countries.
• Built an in-house litigation capability by hiring and supervising two litigators and three paralegals, significantly reducing outside counsel expenses. Actively managed counsel outside Michigan and second-chaired two distributor related litigations, a two week trial to a successful jury verdict and a three day non-jury trial to favorable disposition.
• Advised Amway’s Nutrilite Products Inc. subsidiary on food supplement product positioning, claims platforms, literature, and avoidance of drug claims.
• Resolved a serious challenge with Dominican Republic Customs regarding duty valuation on imports through personal negotiation and the creation of a sales and warehousing subsidiary in-country.
• Managed the government affairs function, including monitoring legislation and lobbying pending bills at the state and federal level.
• Implemented and administered the Conciliation and Enforcement Procedures for distributor to distributor and distributor to corporation disputes.
• Resolved favorably civil and criminal charges brought against the company and a distributor by the Canadian Government for claims made in sales literature.

TEACHING/LECTURES:

• Presented the Legal Issues segment at each New Amway Direct Distributor Seminar.
• Frequent guest speaker on direct selling legal issues at seminars and forums, averaging over 10 per year for the last 10 years, at events hosted by clients and industry associations.

PUBLICATIONS:

Antitrust Law Developments, ABA Press, 1975, (Contributor)

Legal Issues of Side-Line Businesses, Amway, 1985

“Give Your MLM ‘The Test’” Emerald Coast News, 1992

“Amway Case from the Price Fixing Prospective,” www.mlmatty.com website

“Pyramid or Ponzi” MLM Insider Newsletter, 1995

“Trademark Use Guidelines,” Mlmatty.com, Newsletter Volume 8

“The Intrinsic Value Position Paper” MLM Insider Newsletter, February, 1998

“Don’t-Even Think About It,” Mlmatty.com, Newsletter Volume 18

“Who are the PARTICIPANTS,” www.mlmatty.com website

“What is Direct Selling PRIMARILY About?” Direct Selling Today, October, 1998

“RAMBLINGS OF A TIRED LAWYER,” Mlmatty.com, Newsletter Volume 19

“How Confidential are Names and Addresses?” Direct Sales Journal, October, 2000

“Prohibited Activity,” www.mlmatty.com website

“Business Opportunity – What do the Words Mean?” www.mlmatty.com website

“Are Two-Tier Affiliate Programs Multi-level Marketing,” www.mlmatty.com website

“The ABC’s of MLM 2000,” www.mlmatty.com website

“Looking Past the Paper,” www.mlmatty.com website

“Paperless Signup,” www.mlmatty.com website

“The Thinkin’ Needs Fixin’” Network Marketing Business Journal, October 2003

“Are They Worth It?” Network Marketing Business Journal, October 2004

“Coupons, Vouchers, Gift Certificates, and Down Payments,” My NetBrief, October 2004

“PONZI, THE PERSON,” Network Marketing Business Journal, December 2004

BUILD IT BIG – 101 INSIDER TIPS from TOP DIRECT SELLING EXPERTS, Dearborn Trade Press, 2004 (Contributor)

“THE MICHIGAN SINGLE BUSINESS TAX – MLMs BEWARE,” Network Marketing Business Journal, February 2005

“Another Look at Commissions on Sales Aids” Network Marketing Business Journal, July 2005

“About AGENTS” Network Marketing Business Journal, August 2005

“Database Confidentiality” Network Marketing News, September 2005.

“What is M/L/M? – My Biased View” Network Marketing Business Journal, January 2006

“Gifting Programs – - Stay Away!” Network Marketing Business Journal, March 2006

“Business Volume – Its Critical Importance” Network Marketing Business Journal, April 2006

“FTC – What Were You Thinking?” Network Marketing Business Journal, August 2006, and filed with the Federal Trade Commission

“Company Names as Trademarks” Network Marketing Business Journal, October 2006

“Where to Incorporate’” Network Marketing Business Journal, July 2007

“The Michigan Business Tax ‘Super-Sized’” Network Marketing Business Journal, February 2008

“Louisiana – It’s Different Down There” Network Marketing Business Journal, June 2008

EDUCATION:

• J.D. 1970, Michigan State University College of Law, (formerly Detroit College of Law) top 15 percent.
• B.I.E. 1962, Kettering University, Flint Michigan (formerly General Motors Institute)PROFESSIONAL AFFILIATIONS:
• A.B.A., and State and Federal Bars in Michigan, New York, and Colorado.
• Professional Association for Network Marketing.
• Direct Selling Association (DSA-US), Supplier Member.
• DSA, Lawyers Council and Government Relations Committee.
• Direct Sellers Association Canada, Supplier Member.
• Multi-Level Marketing International Association, Board Member.
• Direct Selling Women’s Alliance, Support Member.
• Distributor Rights Association, Support Member.

VITA, RICHARD W. WAAK

Richard W. (“Rick”) Waak has been working as a lawyer in the field of network marketing and direct selling for more than 30 years, including more than 20 years as in-house counsel to some of the most prominent companies in the industry, with much of that time serving as chief legal officer. In 2001 he began his private practice, and soon renewed a collaboration with Gerry Nehra first developed in the 1980s while at Amway. In 2006 he began serving as Of Counsel to the Nehra Law Firm, and he is now committed to supporting this firm’s clients as a Member of the renamed firm.

EDUCATION AND PROFESSIONAL MEMBERSHIPS

Juris Doctor, University of Detroit School of Law, Detroit, MI
Admitted Michigan Courts 1976
Bachelor of Science, Michigan State University, East Lansing, MI
The American Bar Association, Section on Antitrust Law – Franchising Forum
State Bar of Michigan – Antitrust, Franchising & Trade Regulation Section
Direct Selling Association – Lawyers Council and Government Relations Committee

SELECTED ACCOMPLISHMENTS

• Served as top legal executive, General Counsel, or house counsel for a variety of network marketing companies.
• Managed responses to numerous civil investigative demands and related actions by various state departments of justice; avoided findings of violation, civil or criminal penalties or significant negative publicity on virtually all files.
• Managed responses to Federal Trade Commission (FTC) investigative demands attacking advertising claims made for company’s product lines, and marketing/sales practices – files all closed with no adverse findings or publicity.
• Hired and managed outside counsel in coordinating simultaneous defense of separate class action lawsuits in two state courts and in federal court seeking compensatory and punitive damages for pyramiding, securities fraud, false advertising and civil RICO. Obtained very favorable settlements in all cases.
• Principal preparer of 20-page client document commenting to Federal Trade Commission’s 2006 Notice of Proposed Rulemaking for its Business Opportunity Rule.
• Averted and resolved major regulatory challenges – assisted in establishing financial controls and modern employment practices including adjustments to compensation plan.
• Established legal and government-relations functions for employer companies. Developed key contacts with regulatory agencies.
• Consulted with corporate marketer of health services on its acquisition and development of a multilevel internet-based travel services venture – client avoided potential significant legal liability.
• Revised, rewrote and organized supplier contracts for large multi-million dollar companies.
• Significantly reduced frequency of adverse claims – substantially revised and rewrote operating procedures and rules of conduct applicable to distributor sales practices.
• Grew assets from $2million to $10 million as VP of the employees’ credit union.

CAREER EXPERIENCE

CORPORATE CONSULTING AND PRIVATE LAW PRACTICE 2000 – Present

THE PEOPLES NETWORK (TPN), INC. 1998 – 1999

Vice President, Legal Affairs and General Counsel

NATIONAL SAFETY ASSOCIATES (NSA), INC. 1988 – 1998

General Counsel

AMWAY CORPORATION 1978 – 1988

Attorney (1978 – 1988)

Secretary to Trustees of Corporate Profit-Sharing Plan Vice President, Employees Credit Union (1982 – 1988)

ARTICLES AND PUBLICATIONS

“Is Your MLM Opportunity Legal?,” Extra Income News, March,2003. Republished in Network Marketing Business Journal, April 2007.

“The FTC gets it right (almost)!,” Network Marketing Business Journal, May 2008.

“Data Security Compliance 101,” Nehra Law Firm Business Associate Advisory newsletter, August 2008.

“Never a “Free” Lunch?” Nehra Law Firm Business Associate Advisory newsletter, November 2008.