Mark and Tammy Smith granted Neora arbitration injunction
A California court has temporarily blocked a Texas arbitration that Neora pushed to move a fraud lawsuit out of state.
The Smiths filed their case in California against the multilevel marketing company, then called Nerium. Neora immediately fought back, demanding arbitration in Texas in July 2018. The Smiths saw it as retaliation and filed for a restraining order to stop the Texas proceedings.
A California judge initially rejected their request, figuring Neora would file motions to challenge jurisdiction anyway. But Neora moved faster, filing a motion to compel arbitration before those jurisdictional fights could happen. In November 2018, a Texas court sided with Neora and forced the Smiths into Texas arbitration.
That created an absurd legal standoff: the Smiths would have to arbitrate in Texas whether the arbitration clause was even valid in the first place. Meanwhile, the California court still hadn't ruled on whether they were bound by arbitration at all.
Facing this Catch-22, the Smiths filed a new restraining order motion scheduled for June 3rd. But on May 15th, the Texas arbitrator appointed to hear the case announced she had the authority to decide whether the arbitration agreement was legitimate. She set a briefing schedule to resolve it before the California hearing.
This move prompted the Smiths to file an emergency request with the California court to stop the Texas proceedings immediately. They argued that letting Texas arbitration continue was a power grab that violated the California court's authority and their right to a jury trial.
Neora opposed the request on May 21st. But on May 22nd, the California court issued a ruling: the Texas arbitration was stayed. The June 3rd hearing would go forward as planned.
The stakes are clear. Texas arbitration favors Neora. California litigation favors the Smiths. The June 3rd hearing would determine which jurisdiction gets the case.
On June 3rd, the hearing proceeded as scheduled. The judge took the matter under submission, meaning a ruling would follow.
🤖 Quick Answer
What legal dispute arose between Mark and Tammy Smith and Neora?The Smiths filed a fraud lawsuit against Neora, formerly Nerium, in California. Neora demanded arbitration in Texas, which the Smiths opposed through a restraining order request, viewing the action as retaliatory. A Texas court subsequently compelled arbitration, forcing the case out of California jurisdiction despite the Smiths' legal challenges.
Why did the Smiths seek a restraining order against Neora's arbitration demand?
The Smiths perceived Neora's immediate demand for Texas arbitration as retaliatory retaliation following their California lawsuit filing. They filed for a restraining order to halt Texas proceedings, arguing the arbitration clause was being weaponized to circumvent California courts and their fraud allegations against the multilevel marketing company.
**How did the courts initially respond to the Smiths' restra
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