Nu Skin Enterprises v. Raab

Court of Appeals for the Tenth Circuit·Decided November 14, 2025·No. 24-4098·Unpublished

Opinion

FILED

United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit

FOR THE TENTH CIRCUIT November 14, 2025

Christopher M. Wolpert

Clerk of Court

NU SKIN ENTERPRISES, INC., a Delaware corporation; PHARMANEX, LLC, a Delaware limited liability company,

Petitioners - Appellants,

v. No. 24-4098 (D.C. No. 2:21-CV-00709-RJS-CMR)

EARNEST L. RAAB, D.C., d/b/a Success (D. Utah) to Significance LLC, a Washington LLC; MICHAEL ULRICK; LARRY C. WIEBER, d/b/a Test for Nutrition of Washington, LLC, a Washington LLC; ROSE WIEBER, d/b/a Test for Nutrition of Washington, LLC, a Washington LLC; MAX ROBBINS; DEBRA ROBBINS; TONI RAGSDALE, d/b/a Ragsdale and Company LLC, an Oklahoma LLC; WAYNE MATECKI, LAC, d/b/a Dr. Amy’s Integrative Medicine, Inc., a California corporation; AMY L. MATECKI, M.D., d/b/a Dr. Amy’s Integrative Medicine, Inc., a California corporation,

Respondents - Appellees.

ORDER AND JUDGMENT *

After examining the briefs and appellate record, this panel has determined

*

unanimously to honor the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted without oral argument. This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.

Before HARTZ, MORITZ, and ROSSMAN, Circuit Judges.

Petitioners-Appellants Nu Skin Enterprises, Inc., and its affiliate, Pharmanex, LLC (together, “Nu Skin”), appeal the district court’s order staying their petition to compel arbitration in Utah and to enjoin Respondents-Appellees (“Respondents”) from prosecuting an action Respondents filed in Washington state court. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

I. Background

Nu Skin is a Utah-based company that markets beauty and nutritional products in the United States and worldwide through a direct-sales, multi-level marketing network of more than 500,000 independent-contractor distributors. Respondents are lower-level distributors who entered into distributor agreements (“Contracts”) with Nu Skin. These standard form Contracts, along with written Policies and Procedures that are specifically incorporated into the Contracts, contain an arbitration agreement requiring Respondents to resolve any “Disputes,” as defined in the Contracts, by arbitration in Salt Lake County, Utah, applying Utah law. See, e.g., App. vol. I at 193, 264. Thus, the arbitration agreement consists of a mandatory arbitration provision, a forum-selection clause, and a choice-of-law clause.

In 2021, Respondents filed an action against Nu Skin and a number of its distributors in the Superior Court of the State of Washington in the County of Spokane (“Superior Court”). According to the complaint, Nu Skin and other

defendants misrepresented the financial potential of distributorships and the legitimacy of the Nu Skin business enterprises, and they conducted business in ways that advantaged higher-level distributors to the disadvantage of lower-level distributors. Respondents asserted claims under Washington’s Consumer Protection Act, see Wash. Rev. Code §§ 19.86.010 to 19.86.920; Washington’s Antipyramid Promotional Scheme Act, see Wash. Rev. Code. §§ 19.275.010 to 19.275.900; and the federal Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961–1968. Respondents also asserted claims of tortious interference with business expectancy and negligent misrepresentation. They sought injunctive relief and damages.

In addition, Respondents alleged the arbitration agreement contained in the Contracts is unenforceable because Nu Skin imposed it unilaterally and, in some cases, retrospectively, in what were contracts of adhesion. Respondents also alleged they did not agree to arbitrate in Utah, there was no consideration for the arbitration agreement, and the arbitration agreement is unconscionable. They asked for an order that the arbitration agreement is unlawful or otherwise not binding on them and that they were not required to bring their claims in Salt Lake County, Utah.

In response to the Washington action, Nu Skin filed in the United States District Court for the District of Utah (“Utah district court” or “district court”) a petition to compel arbitration, invoking Section 4 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 4, along with a motion to compel arbitration in Utah and to enjoin Respondents from pursuing the Washington action. Respondents opposed the

petition on numerous grounds, including that the arbitration agreement was unconscionable and therefore unenforceable. Respondents also filed a motion to dismiss the petition.

While Nu Skin’s petition and the related motions were pending before the district court, Nu Skin filed a motion to dismiss the Washington action for improper venue based on the Contracts’ designation of Utah as the agreed forum. The Superior Court denied that motion, ruling that “[t]he arbitration agreement is inapplicable to the present matter because this is not a ‘Dispute’ within the meaning of the Contract[s].” Raab v. Nu Skin Enters. Inc. (Nu Skin I), No. 21-2-3272-32, 2022 WL 21816495, at *1 (Wash. Super. Ct. Mar. 8, 2022). The Superior Court also ruled that “venue” in Washington was “proper . . . based on Washington’s strong public policy interests in deciding cases brought under its own consumer protection laws.” Id. Accordingly, the Superior Court denied Nu Skin’s motion to dismiss and also denied its alternative request for a stay pending resolution of the petition to compel arbitration it had filed in the Utah district court.

In the wake of Nu Skin I, the Utah district court denied Nu Skin’s petition to compel arbitration and dismissed the action. The court concluded that under principles of issue preclusion, Nu Skin I’s holding that the arbitration agreement was inapplicable foreclosed Nu Skin’s success on the petition. See Nu Skin Enters., Inc. v. Raab (Nu Skin II), No. 2:21-cv-709, 2022 WL 2118223, at *6–10 (D. Utah June 13, 2022). Nu Skin appealed Nu Skin II to this court. We granted the parties’

joint motion to abate that appeal pending the outcome of Nu Skin’s appeal of Nu Skin I in the Washington Court of Appeals.

In October 2023, the Washington Court of Appeals concluded that Respondents’ “complaint falls within the definition” of “Disputes,” as defined in the Contracts’ arbitration agreement. Raab v. Nu Skin Enters., Inc. (Nu Skin III), 536 P.3d 695, 711 (Wash. Ct. App. 2023). Accordingly, the appeals court reversed Nu Skin I’s “determination that the arbitration agreement does not apply because the complaint is not a ‘Dispute’ within the meaning of the Contract[s].” Id. at 719. The Washington Court of Appeals also concluded that a motion to dismiss for improper venue was not the proper procedural device to seek dismissal based on a forum selection clause. See id. at 704–05. The court “remand[ed] the issue of whether to enforce the forum selection clause to be addressed anew by the [S]uperior [C]ourt,” id. at 711, and provided extensive guidance for the Superior Court’s analysis of that issue, including what role, if any, the alleged unconscionability of the Contracts’ dispute-resolution terms might play in determining whether to enforce the forum-selection clause. 1 Thereafter, we ordered the parties to file supplemental status reports addressing whether we should lift the abatement of the appeal from Nu Skin II. Nu Skin asked us to lift the abatement. Respondents argued that the abatement

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