A number of former affiliates filed a third version of their complaint against YTB in the U.S. District Court for Southern Illinois earlier this month.
In mid-2008, the affiliates launched a nationwide class action against the multilevel marketing travel company.
The former YTB referring travel agents (RTAs) have charged they were induced to join an illegal pyramid scheme. They claim current and former affiliates have suffered damages of more than $100 million.
The RTAs originally brought two cases — later combined into one suit — and relied on the Illinois Consumer Fraud and Deceptive Business Practices Act, asserting they had been victims of deceptive business practices.
However, they have not convinced Judge Patrick Murphy that the charges can be based on a consumer protection law because the case involves business-to-business dealings. Nor has Murphy agreed that plaintiffs who live outside Illinois can be part of a nationwide class action relying on Illinois law.
He has twice ruled against the plaintiffs, but they are permitted to refile.
In the newest filing, the plaintiffs have reiterated key points, attempting to demonstrate that crucial decision-making that led to RTA losses occurred in Illinois.
Their attorneys trimmed the document, previously characterized by the judge as "flabby" and "sprawling."
The former RTAs are more focused on an accusation of conspiracy between YTB and some of its suppliers to perpetrate the alleged illegal pyramid scheme.
"While the median travel commission of YTB [affiliates] was $0, the directors of YTB International each paid themselves multimillion-dollar salaries while also siphoning tens of millions of dollars from their publicly traded corporation to privately owned corporations that they owned and controlled," the plaintiffs charged.
The lawsuit names as defendants YTB, its operating divisions and several officers: Lloyd Tomer, Scott Tomer, Kim Sorensen, Andrew Cauthen and Robert Van Patten.
Other defendants are former board members Timothy Kaiser and Clay Winfield and companies they control: Meridian Land Co. and Winfield Development.
BerylMartin, a printing company in Griffith, Ind., owned by the Tomers and Sorensen, also is a defendant.
YTB has transacted millions of dollars’ worth of business with those firms over the year. However, Sorensen advised early this year that YTB has greatly reduced its dealings with BerylMartin because of accusations of impropriety.
As to what happens next, Christian Montroy, one of the plaintiffs’ attorneys, said he expects the defendants will again seek dismissal of the lawsuit.