Frequently Asked Questions
1. Why did I get this notice package?
You were sent this notice because, based on MXI’s records, you appear to be a Class Member. Class Members have a right to know about the proposed settlement of this class action lawsuit, and about all of your options, before the Court decides whether to approve the settlement. If the Court approves it, and after objections and appeals are resolved, the benefits provided by the Settlement Agreement will be distributed to the Class Members.
This package explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them.
The Court in charge of the case is the United States District Court for the District of Nevada and the case is known as Martinez, et al. v. MXI Corp., et al., Case No. 3:15-cv-00243. Judge Miranda Du is overseeing this class action. The people who sued are called “Plaintiffs.” The people who were sued are the “Defendants”: MXI Corp., Jeanette Brooks, Martin Brooks, Andrew Brooks, Paula Pritchard, Kathleen Robbins, Ian Murray, Judy Murray, Kerry Dean, Sandy Chambers, Jeremy Reynolds, Gordon Pedersen, Connie Hollstein, Sherman Smith, William “Butch” Swaby, Glen Overton, Adam Paul Green, Derrick Winkel, Paul Engemann, and Felix Gudino.
2. What is this lawsuit about?
3. What is a class action and who is involved?
4. Why is this lawsuit a class action?
5. Has the Court decided who is right?
6. Is there any money available now?
7. How do I know if I am part of the settlement?
You are not a Class Member if you are a Defendant, a Defendant’s affiliate, manager, employee, or spouse, provided that the foregoing exclusions shall not cover MXI Associates.
If you are still not sure whether you are included, you can ask for free help by contacting Plaintiffs’ counsel at: (512) 647-6126. You can also call 1/844-890-9182 or visit www.mxisettlement.com for more information. Or you can fill out and return the Claims Form, to see if you qualify.
8. What does the Settlement Agreement Provide?
The proposed Settlement Agreement provides that the Defendants will establish two funds to provide two different types of compensation for Class Members:
• Cash Settlement Fund: $4,332,000 in cash will be used to pay Income Members. This fund will also be used to pay service awards, attorneys’ fees and costs, costs to administer the settlement and any cy pres payment.
• Product Fund: Up to $1,750,000 in MXI credits or gift certificates will be used to compensate Consumer Members.
MXI has also agreed to make or continue several changes:
Within 150 days of the Effective Date, MXI will provide to Class Counsel: (a) copies of any policies, procedures, rules, regulations, and agreements that then govern or apply to its contractual relationships with its members and its preferred customers; (b) evidence that MXI is no longer encouraging or incentivizing its members to purchase goods or services to maintain eligibility for bonuses, rewards, or commissions; (c) evidence that MXI is no longer inducing others to encourage or incentivize members to purchase goods or services to maintain an eligibility for bonuses, rewards, or commissions; (d) evidence that MXI is encouraging its members to purchase goods or services for resale or personal use; and (e) evidence that MXI requires a member to have at least 51% of his or her group qualifying sales volume of goods or services from preferred customers in order to earn compensation.
Within 30 days of the Effective Date, MXI will be enjoined from paying any compensation to its members unless at least 10% of the member’s group qualifying sales volume of goods or services are from preferred customer sales.
Within 60 days of the Effective Date, MXI will be enjoined from paying any compensation to its members unless at least 20% of the member’s group qualifying sales volume of goods or services are from preferred customer sales.
Within 90 days of the Effective Date, MXI will be enjoined from paying any compensation to its members unless at least 30% of the member’s group qualifying sales volume of goods or services are from preferred customer sales.
Within 120 days of the Effective Date, MXI will be enjoined from paying any compensation to its members unless at least 40% of the member’s group qualifying sales volume of goods or services are from preferred customer sales.
Within 150 days of the Effective Date, MXI will be enjoined from paying any compensation to its members unless at least 51% of the member’s group qualifying sales volume of goods or services are from preferred customer sales.
Note: The attorneys’ fees and costs, settlement administration costs, and other relevant costs will be paid from the cash Settlement Fund. The remainder of the cash Settlement Fund will be used to pay valid claims submitted by Income Members.
9. How do I get a cash payment from the Settlement Fund?
To receive a cash payment from the Settlement Fund, in your Claims Form, you must certify under penalty of perjury that you principally participated in the MXI program to earn income.
The base amount of your cash award will be the difference between the money you paid MXI and the money you received from MXI. This amount will be based on MXI’s records. The amount of money you paid MXI is not restricted to money paid for your own MXI account, and may include money paid for other MXI Associates’ or Distributors’ accounts. To receive payment based on money paid for other MXI Associates’ or Distributors’ accounts, you must provide information regarding these other payments.
Your share of the cash Settlement Fund will depend on the base amounts of other Class Members’ cash awards, the amount of attorneys’ fees and costs awarded by the Court, the amount of any service awards to the Plaintiffs, and the amount of costs incurred by the Settlement Administrator in administering the Settlement. All Income Members’ base cash awards will be reduced on a pro rata basis so that the total of the awards is no more than the net amount of the Settlement Fund.
10. How do I get compensated from the Product Fund?
The Product Fund will be equal to $1,750,000 in MXI products at their current wholesale prices. A Product Award to a Consumer Member will be equal to $1,750,000 divided by the total number of Consumer Members submitting a valid Claims Form, up to a $50 per Consumer Member cap. You may use this Product Award to purchase MXI products. MXI will offer products with a cost below $50 (including shipping).
11. Can I get access to both the cash Settlement Fund and the Product Fund?
12. When do I get my payment?
13. What are you giving up to get a payment and stay in the Class?
Claims arising out of breach of any written agreement between Class Members and the Defendants regarding the payment of bonuses or commissions earned but unpaid as of November 3, 2016 are specifically not released.
14. Why would I object?
15. How do I object?
16. Attending the Court’s Fairness Hearing
If you want to appear at the Fairness Hearing regarding an objection that you made, you must deliver to Class Counsel and Defense Counsel and file with the Court by February 13, 2017, a notice of intention to appear and a statement identifying any documents that the Class Member will seek to introduce or witnesses the Class Member will seek to call at the Fairness Hearing.
17. How do I exclude myself from the Class?
To exclude yourself, you must provide in writing to the Settlement Administrator your name, address, telephone number, and a statement that you wish to be excluded from the Class. The Settlement Administrator’s contact information is MXI Settlement Fund, 400 N. St. Paul Street, Suite 600, Dallas, TX 75201. Your exclusion must be postmarked no later than February 6 2017.
18. What happens if I do nothing at all?
19. Do I have a lawyer in this case?
Class Counsel has worked on this case since early 2015 to the present and have not been paid for their work to date. Class Counsel will ask the Court to approve payment of fees not to exceed $1.6 million and costs. Class Counsel will also ask the Court to award to each of the Class Representatives a service award not to exceed $10,000. The service award is to compensate the Class Representatives for their respective commitment and effort on behalf of the Class Members in this case.
20. How do I get more information?