Luis Ventura was a Crown Diamond Distributor at Organo Gold, a multi-level marketing company offering products made with Ganoderma extract. According to reports, his monthly distributorship income exceeded $251,000.

The parties appear to agree that Washington law governs Distributor Applications and Policies and Procedures as well as any non-compete clauses that exist.

What is Organo Gold?

Organo Gold is a multi-level marketing company that sells coffee and other products infused with Ganoderma fungi – used traditionally in some Eastern medical practices – at multi-level marketing companies across North America. According to court evidence, however, these sales account for only a minor portion of Organo’s overall business; distributors play an instrumental role in its sales operations and must first complete nonbinding mediation before any lawsuit may be brought forward.

Policy and Procedures contain a noncompetition clause which prohibits terminated distributors from engaging in any business offering ganoderma-based products.

Who is Luis Ventura?

Luis Ventura is a lawyer who practices in the areas of real estate, business formation and general civil litigation. A graduate of California Western School of Law since 1994, Luis currently represents several homeowner associations on matters such as governance, litigation, monthly assessment collection and transactional work.

Ventura has over fifteen years of experience as a networker, having taught his wife Fernanda how to earn in Total Life Changes MLM company which distributes health and wellness products such as teas, oils, cleansing products and weight loss aids as well as coffee that contains Ganoderma. He mentored Fernanda through this endeavor until she reached a high earning level within this MLM company.

Ventura utilizes his networking efforts as part of his efforts in MLM by speaking and conducting workshops across the United States. Additionally, he published The Entrepreneur’s Guide to MLM as a book.

According to the complaint, Ventura joined “Total Life Changes,” or TLC for short. TLC sells various health and wellness products including coffees containing Ganoderma.

No doubt exists regarding Ventura’s efforts in soliciting Organo distributors to join TLC on multiple occasions, be they personal meetings such as at its Project 50K event in Las Vegas or via telephone and social media. He even joined other TLC distributors at events held in Mexico and Costa Rica where they introduced other individuals to TLC as an opportunity.

L&A asserted that challenging Organo’s distributor numbers by relying on hearsay statements and an unverified third-party research report was unreasonable and that evidence points towards significant losses of low and mid-level distributors from Organo immediately post-February 2016 that cannot be explained away with simple explanations. The Court disagreed and determined there is sufficient evidence of serious attrition of low and mid-level distributors from Organo over that time, whose numbers cannot easily be explained away with simple arguments.

Luis Ventura completed his BA in Filmmaking at London Film School before working on various commercials and music videos before securing enough budget to produce his directorial debut feature A Confident Man (2012), which became both critical and commercial success, leading him to make Tetro Rouge in 2015 before producing The Espadrillo Fortune which went on to find distribution at Cannes’ 2017 Marche du Film market.

Why is Luis Ventura suing Organo Gold?

L&A Ventura asserts that Organo’s Distributor Application and Policies and Procedures signed in 2013 contain invalid non-compete clauses as a matter of law, while further contending that no injunction could be granted as the alternative dispute resolution provisions require pre-litigation mediation as an essential step prior to litigation.

The Court disagrees. While the language of Organo Gold’s Distributor Agreement may not have been clear and its policy might have been better written, its prohibition against soliciting distributors encompasses any opportunity that competes directly with Organo Gold for selling ganoderma-based products through network marketing channels.

L&A Ventura’s objections to the admissibility of evidence regarding distributors leaving Organo Gold are misplaced; as discussed further below, facts support issuing an injunction order in its favor.

Organo is a multi-level marketing (“MLM”) company that sells coffee containing ganoderma-based extract. Organo has operations in the US, Mexico and more than 30 other countries (Dkts 1-2 (Compl):PP 1-9); Dkt # 11 (Perrett Decl.) PP 1-28). Luis and Luz Angela Ventura reside in Texas together and own sole ownership in L&A Ventura Management as sole shareholders.

Ventura joined Organo in July 2009 after being recruited by fellow distributor John Sachtouras. He served until February 2016 when his distribution agreement was terminated due to violations.

Right after being fired from Organo, Ventura began marketing a competing business offering food and beverage products made with ganoderma – inviting many of his distributors from Organo to join his new endeavor.

L&A Ventura casts doubt on Organo’s claim that many low and high level distributors left its company in February 2016, citing what are likely hearsay statements. A review of Organo’s business records, however, reveals significant attrition during this period; furthermore, numerous Organo representatives testified to its occurrence both during hearing on TRO and proceeding for preliminary injunction proceedings.

What is the Court’s decision in this case?

Due to the reasons stated above, Organo’s non-compete clause has not been violated by the defendants. According to its terms, former distributors cannot solicit customers of Organo and engage in any activity that “directly competes” with its sale of Ganoderma-based products; nor do the courts find its terms impermissibly broad.

However, it is unclear from these clauses whether they prevent defendants from associating with TLC at all; rather, their language prohibits engaging in any activities that relate or sponsor Organo’s organ donations and that promote Organo. Even if such activity includes TLC’s relationship with Mr. Ventura, there is not sufficient evidence in this case that such association constitutes unlawfulness.

Organo has not established that their tortious interference claim stands a chance of success before this Court. Organo claims that Mr. Ventura encouraged other former distributors to leave Organo business by telling them about TLC as an alternative solution – however, their evidence shows this as hearsay and thus not enough proof against these individuals for unlawful behavior.

As stated by the Defendants, TLC appears to be a direct competitor of Organo. While TLC may not offer as many ganoderma-based products as Organo, its product category remains identical. Furthermore, many former Organo Distributors have already affiliated themselves with TLC.

The Court does not agree with the Defendants that this action falls outside the purview of nonbinding mediation, since Policies and Procedures mandate its resolution for disputes related to policies or procedures. Furthermore, it does not appear from its facts that this case falls within any statute of limitations for filing late claims.

Finally, the Defendants assert that an injunction will impede them from earning a living and providing for their families. Although sympathetic to this argument, the Court finds in favor of the Plaintiff – especially because no proof has been shown that proposed restrictions would be unreasonably burdensome or harmful to public interests.