Professional Documents
Culture Documents
DALLAS COUNTY
10/4/2016 7:56:52 PM
2 CT-NOT-TRO-E-SERVE FELICIA PITRE
DISTRICT CLERK
2 SOS-NOT-TRO-E-SERVE Freeney Anita
DC-16-13033
Cause No. __________
Plaintiff Nerium International, LLC (Nerium) files this Original Petition, Application
for Temporary Restraining Order and Temporary and Permanent Injunction, and Emergency
Application for Expedited Discovery against Defendants World Global Network Corporation
(WGN), Toan and Van Nguyen (Toan, Van, or collectively, the Nguyens), and Nguyen-
I. SUMMARY
salespeople from raiding Neriums salesforce and customers, in direct violation of their non-
solicitation agreements, for a competing company called World Global Network. With
increasing intensity, the Nguyens have aggressively recruited Neriums salespeople for WGN.
2. The Nguyens know this commercial ambush violates their agreement with
Neriums leadership team, insisted we are sorry we were stupid, claimed they were staying
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 1
with Nerium, and assured the company that they had not signed up as a distributor to any
3. But the Nguyens were lying. They were still actively working a business with
WGN, and had coaxed numerous other Nerium salespeople to sign up to join the company as
well. They had no intention of legitimately working their Nerium businessthe plan was to lay
low until the legal storm passed and Nerium stopped paying attention, while still continuing to
secretly recruit Neriums salespeople and quietly setting up their WGN business.
4. Even that scheme was too slow or too subtle for WGN. So to induce the Nguyens
to resume their full-court press following receipt of Neriums cease-and-desist letter, the
companys Chief Executive Officer promised to indemnify the Nguyens and other departing
Nerium salespeople if they were sued for breaching their agreements with Nerium. With those
marching orders to breach their agreement with impunity, the Nguyens have redoubled their
efforts. This weekend, WGN has scheduled an all-expense-paid trip to its Miami headquarters
for thirty or so of Neriums salespeople in an attempt to seal the deal. Nerium therefore seeks
emergency relief to preserve the status quo and prevent the Defendants from further damaging
5. Pursuant to Texas Rule of Civil Procedure 47, and without waiving its right to
arbitrate, Nerium seeks immediate and permanent injunctive relief to prevent irreparable injury,
and seeks recovery of its attorneys fees, which at this time equal $100,000 or less. For its
claims against World Global Network, Nerium seeks between $200,000 and $1,000,000.
6. Nerium intends to conduct discovery under a Level 3 Discovery Control Plan and
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 2
III. PARTIES
7. Nerium is a limited liability company organized under Texas law, with its
600 Brickell World Plaza, Suite 1775, Miami, Florida 33132. Its Florida registered agent is
Registered Agent Legal Services, LLC, at 155 Office Plaza Drive, Suite A, Tallahassee Florida
32301. Because it has failed to maintain a registered agent in Texas, it may be served through
the Texas Secretary of State as its agent, or wherever else it may be found.
9. Defendant Toan Nguyen is an individual who can be served with process at his
10. Defendant Van Nguyen is an individual who can be served with process at her
residence, 2161 Ventia, Tustin, CA 92782, or wherever else she may be found.
11. Nguyen-ers, LLC is a California entity. Its California registered agent is Tom
Bass, at 3151 Airway Ave, Ste. F109, Costa Mesa California, 92626. Because it has failed to SOS
maintain a registered agent in Texas, it may be served through the Texas Secretary of State as its
12. The Court has jurisdiction because the damages sought are within the Courts
jurisdictional limits, and further because the Nguyens and Nguyen-ers, LLC consented to
jurisdiction in Texas. Likewise, the Court has jurisdiction over WGN because it has purposefully
availed itself of the privileges and benefits of conducting business in Texas. Neriums claims
relate to and arise out of WGNs forum contacts, specifically its attempt to raid Neriums
with traditional notions of fair play and substantial justice. Jurisdiction is also proper under the
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 3
Texas long-arm statute because WGN has, on information and belief, have committed torts in
whole or in part in Texas. TEX. CIV. PRAC. & REM. CODE 17.042(1).
13. Venue is proper because the Nguyens contractually agreed to venue in Dallas
County, Texas. In addition, a substantial part of the acts or omissions giving rise to Neriums
claims occurred in Dallas County, Texas. Because Neriums claims against WGN arise out of
the same transaction, occurrence, or series of transactions or occurrences as those against the
Nguyens, venue is also proper as to WGN. TEX. CIV. PRAC. & REM. CODE 15.005.
V. FACTUAL BACKGROUND1
marketing) that sells anti-aging products through an independent sales force called Brand
Partners. (Branch Dec. at 3) Within the United States, Nerium currently sells four skin-care
products (Nerium Firm, Nerium AD Day and Night, and an eye serum) and an anti-aging
15. Neriums Brand Partners earn money by selling Neriums products, often through
social media and personal contacts, and by recruiting new Brand Partners to do the same. (Id. at
5) A Brand Partners personal recruits, and those peoples recruits, and so on, are called the
Brand Partners downline. (Id.) Brand Partners receive commissions both on their own sales
and on sales in their downline. (Id.) The upline is the person who recruited the Brand Partner,
and the people who recruited that person, and so on. (Id.) Nerium supports its Brand Partners by
1
The Petition and Application are verified by the sworn declarations of Adam Alavi, Sandra Davis, and Jeff Branch,
as set forth below, who swear to the statements of fact contained therein.
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 4
back-office support, confidential information about customers and sales data, access to a highly
16. Brand Partners establish relationships with customers and other Brand Partners,
which drive Neriums sales and growth in the marketplace. (Id. at 6) Not surprisingly,
recruiting and retaining salespeople is the key to any direct-sales company. (Id.) Because the
industry is fiercely competitive, other direct-sales companies will attempt to coax away
salespeople to work on their behalf. (Id.) When the recruitment activities of those salespeople
because Neriums business is essentially a network of people, any such violations harm not only
Nerium, but also the network of other Brand Partners who generate income from their downlines.
17. The Nguyens applied for a Brand Partner position by completing an online
enrollment application through Neriums website in December 2011. (Davis Dec. at 3, Ex. 1)
As part of their electronic enrollment process, a Brand Partner must enter an electronic signature
agreement, which includes Neriums policies and procedures and terms of agreement. (Branch
Dec. at 4). In addition, in May 2015, the Nguyens submitted a Business Entity Registration
Form to Nerium, in which they enrolled their entity Nguyen-ers, LLC, and once again agreed
that:
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 5
18. The Nguyens agreed that by virtue of their Brand Partner position (and the many
related benefits), they would be granted access to Neriums confidential information and trade
secrets, and be provided with the opportunity to develop goodwill through customer and Brand
Partner relationships. (Id. at 3, Ex. 2, 11.06) They also agreed to important non-solicitation
For the term of this Agreement and for two (2) years after termination hereof, for
any reason, Brand Partner agrees not to sell any product that is the same or similar
to or competes with the products of Company within the United States of America
or any other country where Company sells its products.
19. These provisions do not unreasonably restrict the ability of Brand Partners to earn
a living or generate income through other sales efforts. The recruiting restrictions are limited to
C. The Nguyens Exploit Neriums Sales Structure and Breaches the Agreement by Cross-
Selling and Cross-Recruiting for a Competitor.
20. Despite these plainly reasonable prohibitions against Brand Partners selling or
promoting competing products and services, the Nguyens are doing exactly that. In late
September 2016, Nerium began receiving reports that the Nguyens were cross-marketing and
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 6
cross-recruiting for a company called the World Global Network. (Davis Dec. at 4) According
to WGNs website, it is a direct-sales company that distributes (among other things) wearable
technology and products meant to improve the customers health and lifestyle. (Id.) While the
full extent of WGNs product line and activities is not yet known to Nerium, WGN clearly
21. The Nguyens can hardly dispute their prohibited activities because they are
Adam Alavi, a one-star National Marketing Director and one of the people the Nguyens
attempted to recruit. On September 23, 2016, Toan Nguyen called Alavi to discuss a new
business opportunity. (Alavi Dec. at 4). Before he would discuss any details, Toan insisted that
Alavi send him an email effectively saying I am the one initiating this request for information
about this business. (Id.). Alavi found that completely bizarre, and immediately knew Toan
was pitching him on a competing direct-sales business while attempting to cover his tracks.
22. Over the next few days, Toan started sharing information about the new company
he and his wife Van had joined called the World Global Network. (Alavi Dec. at 5). The crux
of the Nguyens recruitment pitch was alarmingly blunt: Toan told Alavi, essentially, Im just
contacting you and offering you a position because two of your National Marketing Directors, a
one-star and a two-star, have already filled out applications with WGN, and I dont want you to
lose your Nerium business. (Alavi Dec. at 5). Coupled with those scare tactics, the Nguyens
claimed they had already poached twelve Nerium National Marketing directors. (Alavi Dec. at
6). The Nguyens specifically said that some of them were leveraging information from Neriums
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 7
Back Office (the online portal through which Neriums Brand Partners access detailed
information about salespeople, customers, and training) for WGN. (Alavi Dec. at 4).
23. As these violations were ongoing, Neriums corporate office began receiving
numerous reports from throughout its sales network about the Nguyens cross-recruiting for
WGN. (Davis Dec. at 4). On Friday, September 29, 2016, Neriums outside counsel sent the
Nguyens a cease-and-desist letter requesting immediate assurances that they would abide by their
non-competition and non-solicitation covenants with Nerium. (Davis Dec. at 5, Ex. 3). The
Nguyens sent Neriums top leadership an email early the next morning:
After speaking with Steve Lee for over 2 hours, we decided to stay with Nerium,
build it part time, while focusing on our Airbnb businesses to increase our
income.
May I also say, most people during winter seasons in their lives, tend to look
around and even meet amongst peers to talk about many ways to make money
while supporting the pressure of growing our Nerium business. We have done
Uber, Airbnb, and even sold streaming boxes that Dale introduced us to. This
subject seems to be very popular during winter times in most people's businesses.
We wasn't sure if we would get in trouble so we emailed you our feelings of
leaving due to our fear without m realizing we probably didn't do anything wrong.
Let's face it we all tend to look at other things when we lose a little faith in our
business or relationships. But luckily we had Steve help us refocus and we are
sorry we were stupid. -Toan Nguyen
24. Just a few hours later, Toan called Alavi again. (Alavi Dec. at 9). He
mentioned receiving the cease-and-desist letter, said he was scared of litigation with Nerium, and
so he had just sent an apology email to the company hoping it would smooth things over. (Alavi
Dec. at 9). But Toan admitted the email was a ruse. (Alavi Dec. at 9). He said its real
purpose was to discourage Nerium from filing a lawsuit by pretending the Nguyens were
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 8
returning to the company and complying with their agreements. (Alavi Dec. at 9). In reality,
the Nguyens would secretly set up the WGN business under one of their names or a relative, and
25. The next day, Toan called Alavi and seemed especially excited. (Alavi Dec. at
10). According to Toan, they no longer needed to cover their tracks or smooth things over with
Nerium because WGNs Chief Executive Officer had personally promised that WGN would pay
for their bills and expenses in any lawsuit with Nerium. (Alavi Dec. at 11). With that
assurance, their new plan was for full-bore recruitment of Neriums salespeople, which centers
around an all-expense-paid trip hosted by WGN for thirty people at its Miami headquarters this
weekend. (Alavi Dec. at 10). When Alavi asked whether he knew any of the people going,
Van Nguyen responded you know all of themfrom Nerium. (Alavi Dec. at 11).
26. Nerium incorporates herein by reference all of the allegations set forth in the
preceding paragraphs.
27. Nerium entered an enforceable contract with the Nguyens and Nguyen-ers, LLC
that contains covenants relating to their competitive activities. The Nguyens and Nguyen-ers,
LLC received valuable consideration for the execution of the contract, and the contract is valid
and enforceable.
28. Nerium has fully performed its obligations under the contract.
29. The Nguyens and Nguyen-ers, LLC have breached one or more of the covenants
in the contract by marketing and selling another direct-sales companys products, WGN,
(including selling to other Nerium Brand Partners) and recruiting Neriums Brand Partners to
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 9
30. As a result, Nerium has been damaged in an amount within this Courts
jurisdictional limits and will be imminently and irreparably harmed if the Nguyens and Nguyen-
ers, LLC are not enjoined from further breaches of the contract.
31. Nerium incorporates herein by reference all of the allegations set forth in the
preceding paragraphs.
32. There is a valid, enforceable, contract between Nerium and the Nguyens, and
Nerium and its other Brand Partners. WGN was aware of these contractual obligations, yet
intentionally, maliciously, and willfully chose to induce breaches of these contractual obligations
for its own pecuniary benefit. Indeed, WGN has agreed to indemnify Nerium Brand Partners for
33. As a result of WGNs actions, Nerium has been damaged in an amount in excess
34. Nerium incorporates herein by reference all of the allegations set forth in the
preceding paragraphs.
35. Neriums request for injunctive relief is verified by the attached Declarations of
Jeff Branch and Adam Alavi, which are attached hereto as Exhibits A and B incorporated herein
by reference.
36. As set forth in more detail above, there is no question the Nguyensdirectly
aided, encouraged, and induced by WGNbreached their obligation to refrain from competing
with Nerium by using Neriums confidential and proprietary information, trade secrets, and
goodwill to solicit Brand Partners to become sales representatives of WGN and by marketing and
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 10
selling WGN products. Nerium has therefore established, at the very least, a probable right to
37. If Defendants are not immediately restrained from continuing to violate, and from
assisting and encouraging other Nerium Brand Partners in violating, their contractual obligations
by marketing and selling the WGN product and recruiting Neriums Brand Partners to become
sales representatives for that company, Nerium will suffer immediate and irreparable injury as a
result of Defendants continued wrongdoing because Neriums goodwill and confidential and
proprietary information will be compromised. Worse, this information is being used to Neriums
detriment and to directly benefit a competitor. The impact of Defendants wrongful use would
38. Without the Courts intervention, Nerium will suffer imminent, irreparable harm
for which there is no adequate remedy at law. Maintaining a motivated and dedicated salesforce
network of Brand Partners, Nerium may be unable to recover those critical relationships. And
given the structure of Neriums business, the harm Defendants are causing has a ripple-effect and
infects not only individual Brand Partners, but also their respective networks of associated Brand
39. The full extent of Neriums damages, which will continue to occur if Defendants
conduct is unabated, including lost profits, loss of reputation, and loss of goodwill, are
difficultif not impossibleto assess fully. It is vitally important that this wrongful conduct be
stopped and Defendants be prohibited from further wrongdoing. In particular, this harm comes
as no surprise to the Nguyens, who expressly agreed in the Policies and Procedures that violating
the non-solicitation provision would cause Nerium irreparable injury for which there is no
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 11
adequate remedy at law and hereby agrees to the entry of an ex[]parte temporary restraining
order . . . (Branch Dec. at 5, Ex. 1, 11.09) The only adequate, effective, and complete relief
for Nerium is to restrain Defendants from further engaging in certain proscribed activities, as set
forth below.
40. No bond should be necessary for the issuance of the requested restraining order
because Nerium is merely seeking to enjoin the Defendants from actions that are clearly
prohibited under the Nguyens contract with Nerium and under statutory and common law.
Nerium is, however, willing to post a bond if the Court deems it necessary and appropriate.
41. For all these reasons, pursuant to Texas Rule of Civil Procedure 680 et seq. and
Texas Civil Practice and Remedies Code 65.001 et seq., and to preserve the status quo during
the pendency of this action, Nerium respectfully requests a temporary restraining order, and on
Defendants, including their agents, representatives, and all other persons in active concert or
participation with them who receive actual notice of the order by personal service or otherwise
PLAINTIFFS ORIGINAL PETITION, APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY
AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 12
5. Defendants are prohibited from enrolling any Nerium Brand Partners who
the Nguyens have, directly or indirectly, recruiting or sponsored.
42. To establish the full extent of Defendants wrongful conduct and to help ensure
Nerium may seek a temporary injunction that fully addresses such conduct, it will be necessary
for Nerium to obtain discovery before the hearing on Neriums request for a temporary
injunction. Because the temporary injunction hearing will be set, at least as an initial matter,
within fourteen (14) days from the Courts entry of any temporary restraining order, an
43. Therefore, Nerium requests, for good cause shown, that the Court require: (i) that
responsive documents, within five calendar days of service or actual notice (including weekends)
in such a manner that they are received by Neriums counsel on the same day; and (ii) that
depositions may be scheduled within five calendar days notice to the deponent and opposing
party.
44. The agreement between the Nguyens and Nguyen-ers, LLC and Nerium includes
an arbitration provision. The arbitration provision expressly provides [n]othing in this rule shall
prevent the Company from applying to and obtaining from any court any injunctive relief to
protect the companys rights. (Branch Dec. at 6, Ex. 1, 11.09) Nerium fully reserves and
does not waive herein the terms of its arbitration agreement or its right to proceed with
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AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 13
XI. ATTORNEYS FEES
45. Pursuant to Chapter 38 of the Texas Civil Practice and Remedies Code and the
relevant agreements, Nerium is entitled to and hereby requests its attorneys fees.
For these reasons, Nerium respectfully requests that Defendants be cited to appear and
answer herein, and that: (i) without waiving its right to arbitrate, Nerium be awarded temporary
and permanent injunctive relief to prevent irreparable injury and its attorneys fees; (ii) that
Nerium be granted expedited discovery; (iii) actual and punitive damages and pre- and post-
judgment interest against World Global Network; and (iv) for such other and further relief to
Respectfully submitted,
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AND PERMANENT INJUNCTION, AND EMERGENCY APPLICATION FOR EXPEDITED DISCOVERY PAGE 14