David G. Eisenstein

avid has pivoted his focus to attorney-mediator in a unique niche he has long occupied for which he enjoyed a national reputation for excellence as a complex litigation attorney within the direct sales industry. From 1989 through January, 2017, David has distinguished himself in federal and state courts around the country in cases establishing important legal precedents in the area of network marketing.
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How to Get the Right MLM Mediator

Posted by David G. Eisenstein on Jul 18, 2017 5:05:02 PM


     In a major complex direct selling legal dispute, whether it be involving the interpretation of one of the network marketing company's Policies and Procedures or a term of the MLM distributor agreement with the company, or the makeup, positioning, and/or volume of sales, numbers and performance of the consultants in a downline organization of a key distributor, when it comes time to select the right Mediator there are three basic factors to consider:

  • Factor 1---Since it is an MLM legal dispute or direct sales case which we're talking about, make sure your mediator is an Attorney-Mediator with significant experience in direct sales or network marketing law.  It is more than a little bit painful for an attorney to face the necessity of educating a Judge in an mlm trial or arbitrator who has not been schooled in the intracacies of our industry or the legal issues and principles that commonly apply to the complex commercial litigation arising between network marketing industry players, but that should not be necessary when it comes to a mediation where both sides have the opportunity to jointly select a mediator--your Lawyer-Mediator must be very familiar with, if not an expert in MLM law in order to be mediate successfully as a network marketing mediator in mediating your network marketing mediation case or direct sales litigation as a lawsuit mediator to a mutually agreeable resolution of the dispute.
  • Factor 2---You do not want to choose as your mediator a lawyer who is known to be particularly flamboyant or fiery, or considered by his peers as over-bearing or highly opinionated.  The mediator of a network marketing case is at her best when she is acting in a neutral, facilitative capacity for both sides, getting out of the way of the parties to the mediation crafting their own mutually satisfactory "deal."  Remember, ego is best left at the door to the mediation conference room, and respect for all concerned should be given by all who participate, particularly the Attorney-Mediator entrusted with facilitating a settlement by and between the parties to the mediation.
  • Factor 3---The mediator must be committed to "hanging in there" with the parties to a network marketing lawsuit even when there is an impasse, meaning an apparent deadlock in the mediation which looks to one or both sides like an unsuccessful end to the mlm mediation---one without an agreed upon settlement.  Make sure the Lawyer-Mediator is willing to "go the extra mile" in keeping the process alive even in its darkest hour of despair felt by one or both sides.  In order for mediation to work the mediator must be committed to work through enough "nos" and hold on until both sides say "yes."  The mlm mediator cannot be a "quitter" and should be the last person in the room to give up--so the mediator should be intelligently optimisic about the chances of reaching settlement, and should push through adversity--she should be an example of the tenacity which is necessary for all participants in the alternative dispute resolution (adr) to fight through the mental and  physical fatigue of a long day (as opposed to the weeks, months or years of network marketing litigation in court or mlm arbitration to obtain a decision by a third party only after six figures have likely been spent by both sides in getting there) in order to reach "home plate" and work out a resolution of the dispute.      Suggestion--select as your mediator an attorney who will commit to being available to the parties and without hesitation reach out to them by arranging a conference call involving at least the counsel for the parties in the days and weeks that follow a day of mediation of an mlm case that has reached a less than successful conclusion.  Often, it is that extra effort post-mediation that clinches a deal to settle mlm litigation after a day of mediation has sapped everyone's energy and will to continue mediating until a settlement has been reached.



     "With crowded court dockets, mediation offers the opportunity for speedier resolution. As David suggests, mediation, by its nature, is far more likely than traditional litigation to be therapeutic for the parties and others affected by the underlying dispute. Just two reasons among many for seriously considering mediation."
     "I have known David for nearly 50 years. We were classmates and close friends in law school. There are many terrific lawyers who would not make successful mediators."

"David has the skill set and personality to be a superb mediator."

--Judge Dave Cole (Ret.), Phoenix, AZ, Former Judge of the Maricopa County Arizona Superior Court and Former Solicitor General of the State of Arizona




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10 Myths of MLM Legal Dispute Mediation

Posted by David G. Eisenstein on Jul 10, 2017 1:17:00 PM

  •      Myth #1--That an MLM (network marketing) distributor will be able to find a lawyer who will take her case on a contingency fee basis.  This is because generally speaking MLM legal issues in a network marketing case revolve around the complicated process of deciphering how one or more of the direct selling company's policies and procedures is interpreted and applied to the legal dispute--this factor alone sets the stage for complex commercial litigation and bears little  similarity  to a "rear-end collision PI case" which is the category of cases which have traditionally been handled by PI (personal injury) attorneys working on a contingency fee, i.e. a percentage of the money recovered for the damages suffered by the victim of another driver's negligence.  
  •     Myth #2--A distributor's success in the mediation of an MLM dispute does not require the distributor to have a lawyer present at a mediation.  The network marketing company will have legal representation (usually a team of litigation attorneys and support staff) and the mlm mediator or any other lawsuit mediator is by definition a neutral facilitator of alternative dispute resolution (adr) hired by both sides to assist the parties in the process of reaching a resolution of their dispute within the confines of their direct sales mediation.  
  •      Myth #3--The company and the distributor who mediate in a direct selling legal dispute need not do any "homework" in preparation for the mediation.  Not so, since the success of the mediation, particularly when it includes an expectation of a recovery of lost commissions by the distributor due to the company separating her from her downline organization by suspension and/or termination, depends on a fairly complicated analysis of the distributor's lost income due to wrongful suspension and/or termination.  Not only does this require a significant expenditure by both sides to furnish an analysis prepared by compensation plan expert(s) based on their opinions on the amount of the loss, if any, together with persuasive documentary support for that conclusion gleaned by the expert from the company's MLM software (either getting access to those records directly from the company or on the distrbutor side, from their back office) and provide persuasive documentary support for that conclusion.
  •     Myth #4--The mlm mediator will ultimately decide which side wins the Mediation.  Not true.  The attorney-mediator never decides the case for the parties but serves as a neutral facilitator to provide the parties with the time, place, and setting for making their own deal so that they won't have to continue their dispute in court, with or without a jury, or arbitration where, in those situations, third parties make a decision which is legally binding on both sides.  Usually, in the court and/or arbitration setting, the parties have little or no "ownership" in the ultimate decision and limited direct input into the decision making process leading up to that ruling. 
  •     Myth #5--Mediation will result in a decisive win by one side or the other.  No, the process of mediation is designed to allow both sides a better understanding of each other's point of view and the risks involved in pursuing the dispute through the courts or arbitration, to vent their emotions that surely accompany the dispute, and then, to COMPROMISE their differences with the assistance of the lawyer-mediator in facilitating their resolution of their legal dispute.  Remember, and keep this in mind, the reason we read about large awards for network marketing lawsuits is that they are so unusual, infrequent, and out of the ordinary, which makes them NEWS!.  Commonly, decisions by courts, sitting with or without a jury, and arbitrators also involve compromises (you've heard the old adage, "cut the baby in half" dating all the way back to ancient scripture, but those are imposed on both sides by third parties, 
  •     Myth #6--Settlements and mediations are only for the faint of heart, and demonstrate weakness on the part of one or both sides.  To the contrary, I have found in my 40+ years of law practice that it is the best businessman or businesswoman who has the courage to compromise in the face of the risks, uncertainties, and downright injustices of American jurisprudence.
  •     Myth #7--Stubbornness is a virtue in settlement discussions. Wrong, both sides should listed carefully to what the other side is saying to them  then accordingly, recalibrate their expectations for the outcome of the dispute.  The uncompromising people in mediations almost invariably find themselves disappointed in the end result of the dispute.  Don't look at settlement negotiations and mlm mediations as involving mainly "the principle of the  thing" but see them as business decisions in the overall context of your MLM/network marketing/direct selling business, whether you are the owner or executive of a company or the key distributor who finds herself at odds with the company's management.  Think in terms of business opportunities you will lose from wasting your time and money on the anguish of prolonged mlm litigation of your mlm case, direct sales litigation, or mlm arbitration.
  •     Myth #8--An expectation that a settlement will make you feel vindicated.  Wrong again.  Attorneys have long said that "a good settlement makes both sides unhappy."  Expect a bit of an emotional letdown after a "successful" network marketing mediation with the aid of the network marketing mediator.  But again, keep your mind on what you have gained by freeing yourself from the tethers of litigation for years--giving you the opportunity to go on to enhanced achievements in business, something you know much more about than litigation, courts, and arbitrations.
  •     Myth #9--The biggest ego will prevail in the mediation of your direct sales case.  This is not so, as the very process of mediation requires an openness on the part of both sides to the wide range of opportunities which are available to build a viable settlement between the parties.  If you let your ego get in the way, you are just blocking yourself from perceiving what the situation will lend itself to in the way of mutual agreement and reasonable compromise.
  •     Myth #10--You will crush the other side at trial so why bother with mediation.  No the chances are that nothing of the sort will happen, invariably you will realize after you have spent more money than imagined or budgeted for the network marketing litigation. Truthfully, in my many years of litigation experience, mlm trial and arbitration outcomes are nearly as unpredictable as what would happen if you simply "rolled the dice" to decide the dispute.  That is why litigation of legal disputes should always be considered as a huge gamble by both sides to the dispute.


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7 Steps to Mediation of an MLM Legal Dispute

Posted by David G. Eisenstein on Jun 27, 2017 5:38:32 PM


     This mediation blog explores the highly specialized field of direct sales, also known as MLM and network marketing, in which a complex commercial litigation dispute focuses on the mlm legal and factual issues raised in the network marketing litigation, and which often takes the form of a network marketing lawsuit presided over by a Judge (sitting with or without a jury) or arbitration (also known as alternative dispute resolution, adr) presided over by an attorney arbitrator--which are two very expensive means of resolution by third parties.  

     However there is another much less expensive means of  compromise and settlement of mlm litigation which can be accomplished by the parties  themselves facilitated by a dispute or lawsuit mediator.  With an attorney-mediator experienced in mlm mediation, that mlm mediator and the parties can accomplish a mediation agreement in one day at less than 10% of the costs incurred by the parties for weeks and months of expensive discovery and lengthy trials or arbitrations--just one of many reasons to mediate toward the goal of receiving an acceptable offer of settlement, and making a compromise deal, threeby enabling the parties to avoid a full-blown mlm trial in their direct sales case.

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Five Reasons to Mediate MLM Legal Disputes

Posted by David G. Eisenstein on Jun 21, 2017 9:02:47 AM

     Reason #1--If you are a company owner or executive, when you get challenged by a distributor you have confronted for not following the company's policies and procedures, your first inclination usually is to use the company's superior cash flow to throw the biggest law firm in town at the distributor and her lawyer.  You think, "Let the David v. Goliath" battle begin."  We'll make an example out of the errant distributor.  

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