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Stream, Ignite Class Action Lawsuit Certified by the Fifth Circuit

On September 30, 2016, the United States Fifth Circuit Court of Appeals affirmed the United States District Court for the Southern District of Texas (Judge Kenneth M. Hoyt) decision certifying a plaintiffs’ class against Steam Energy, Ignite, it’s executives and top salespersons. The Fifth Circuit’s decision vacated a prior ruling by a three-judge panel and entered it’s decision in a rare en banc decision. Eleven of the judges favored the decision, while only five opposed. So, the class action against Stream, Ignite and the others continues.

Scott M. Clearman and The Clearman Law Firm sued Stream and the others back in 2009.

The class certification now affirmed is for:

all [Ignite Independent Associates or IAs] who joined Ignite on or after January 1, 2005, through April 2, 2011, excluding the IAs subject to the Eleventh Circuit opinion in Betts.  

The Fifth Circuit correctly identified that the class includes only those IAs who “lost money.”

The Texas district court’s exclusion of those IAs in the Eleventh Circuit deserves mention. It stated that “[in] Betts v. SGE Management, the Eleventh Circuit found Ignite’s original arbitration agreement (the one the Fifth Circuit found illusory and void) to be valid and enforceable.”  As a result, the one plaintiff, Betts, had to pursue arbitration.

The Texas District Court also found that the Georgia IAs are bound by the decision in Betts, and therefore could not include them in it’s certified class.  Scott Clearman disagrees and will seek to bring those IAs excluded by the Eleventh Circuit decision (Georgia, Alabama and Florida) into a class.

Download a copy of the ruling (PDF)