Remember Those Lawsuits Against MK Liquidators I Mentioned in December?

You surely remember my post on December 6, 2008 regarding the fact that Mary Kay Inc was targeting online resellers of Mary Kay products with lawsuits.

As you know, I take seriously the privacy of the sources of my information. Unless they give me permission to name them, I don’t and don’t want to.

Unfortunately, one of the impending lawsuits I was informed of personally became public with its official filing in late November 2008.

The lawsuit against Mary Kay Inventory Liquidators Sharon & Dennis Lilly is similar to the lawsuit against Touch of Pink.

Sharon Lilly became a Mary Kay consultant in January of 2006. Mary Kay Inc alleges that Ms. Lilly was advertising and selling Mary Kay products online and sent her a letter demanding she stop. When she didn’t, MK terminated her consultant agreement on May 17, 2006. Apparently that’s when Sharon Lilly opened her online store, www.sharonscosmeticshoppe.com

However, according the the complaint filed, Sharon’s husband Dennis signed up to be a Mary Kay consultant on May 26, 2006, allegedly so Sharon could continue buying MK products at a discount. It took Mary Kay Inc nearly two years to figure this out: they didn’t terminate Mr. Lilly’s consultant agreement until April 30, 2008. Now, Mary Kay Inc calls Mr. Lilly’s act of signing up as a consultant “fraud” which is pretty strong language.

The main accusation in the lawsuit against the Lillys is that they interfere with Mary Kay Inc’s business model by soliciting consultants to sell their product to them, the Lillys, rather than an actual “end user,” as they claim Touch of Pink does as well.

Mary Kay Inc also claims unlawful use of their trademarks and that the defendants confuse consumers into thinking that they are purchasing guaranteed Mary Kay products from an “authorize” Mary Kay consultant. But how confused do you need to be to think you’re buy from a Mary Kay consultant when the Lillys’ site clearly displays a disclaimer that they aren’t affiliated with Mary Kay cosmetics?  (Hint: pretty darn confused. Step away from the TimeWise.)

So far, the Lilly’s have been subpoened and we await their depositions and the continuing proceedings in this case.

Like I told you in December, Mary Kay Inc is apparently going after the Inventory Liquidators online, whether they’re selling on eBay or from the own site. No doubt other lawsuits will be formally filed in the future.

Here’s the entire lawsuit filed against the Lillys for your reading enjoyment:

Mary Kay Inc., Plaintiff  v. Sharon K. Lilly and Dennis C. Lilly, Defendants 

Please note that the lawsuit document is over 2 MB — it’s large, so it will take a few extra moments to download and appear on your computer.

Touch of Pink Cosmetics Files Summary Judgment

On November 26th, 2008, defendants Amy and Scott Weber of Touch of Pink Cosmetics filed a Summary Judgment in their continuing proceedings of the lawsuit broungt against them by Mary Kay Inc.

A Summary Judgment is a motion made by one of the parties of a lawsuit before the case goes to trial. In it, the party filing the Summary Judgment puts forth the evidence in their favor and argues that this evidence is so clear that a jury faced with the case could only reach a decision in favor of the party filing the Summary Judgment.

In other words, Touch of Pink is saying that there isn’t a case against them, and the charges Mary Kay Inc. has alleged aren’t valid.

It’s very interesting reading, I think, and makes some interesting points. Now the judge will have to review the document and see whether he agrees. If he does, he will enter a judgment in Touch of Pink’s favor. Case closed.

The information outlined and points made in this summary judgment are critical to other similar Mary Kay inventory liquidators. If Mary Kay’s assertions are dismissed by the judge, Mary Kay Inc. will have to go back to the drawing board. And resellers doing business in a similar fashion as Touch of Pink could potentially be assured that they couldn’t be sued for the types of allegations contained in this lawsuit.

Here’s the entire document for your reading pleasure:

Defendants’ Motion for Summary Judgment