Herbalife Close to Settling Pyramid Scheme Class Action Lawsuit

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According to court documents filed last week, both parties in the Herbalife pyramid scheme class action lawsuit have tentatively reached a settlement, meaning Class Members may soon be receiving a notice about the pending deal.

The parties have filed a motion to push back certain pre-trial dates as they continue to work out the details of the proposed Herbalife class action settlement. Last month, U.S. District Judge Beverly Reid O’Connell approved the motion. The deadline to schedule a hearing for certification of the Herbalife class action lawsuit is now Dec. 8, 2014.

The Herbalife class action lawsuit was initially filed in April 2013 by Dana Bostick, a former Herbalife distributor. Bostick alleged he spent thousands of dollars on Herbalife products, websites, coaching and incidental expenses. Despite his efforts, he says he was only able to recruit one new Herbalife representative. He alleges Herbalife operates as an illegal pyramid scheme and claims the vast majority of the company’s U.S. distributors fail to make money.

Four more plaintiffs were added as plaintiffs in the Herbalife class action lawsuit earlier this summer. Some of the plaintiffs allege they lost more than $10,000 as Herbalife distributors.

Last fall, Herbalife tried unsuccessfully to dismiss the pyramid scheme class action lawsuit. Judge O’Connell found that Bostick’s claims met the legal requirements to classify Herbalife as a pyramid scheme under California law.

Class Members of the Herbalife pyramid scheme class action lawsuit include anyone who joined Herbalife from 2009 through the present. However, those who signed up after the company implemented an arbitration clause in their distributor contracts last year are not included. Approximately 1.5 million people are estimated to be Class Members of the Herbalife class action lawsuit.

Herbalife is currently under investigation by the Federal Trade Commission and the Federal Bureau of Investigation for allegedly operating as a pyramid scheme. Herbalife maintains its business model is intended solely to sell health products while providing distributors with a potentially lucrative business opportunity.

Herbalife has also recently been criticized by Hispanic activists who claim the multilevel marketing company takes advantage of minorities and poor people.

Further details about the proposed Herbalife class action settlement were not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated. We will report on how to file a claim for the class action settlement as soon as information is posted.

Plaintiffs are represented by Dracht and Thomas Foley with Santa Barbara, CA-based Foley Bezek Behle & Curtis, LLP. Herbalife’s counsel includes Jonathan David Schiller, Jonathan Sherman and Karen Paik of New York-based Boies Schiller & Flexner LLP

The Herbalife Pyramid Scheme Class Action Lawsuit is Dana Bostick v. Herbalife International of America Inc., Case No. 2:13-cv-02488, in the U.S. District Court for the Central District of California.

UPDATE: On Oct. 17, 2014, Herbalife asked a federal judge to push back pre-trial deadlines again as the parties finalize the terms of a class action settlement.

UPDATE 2: A California federal judge preliminarily approved the Herbalife class action settlement on Dec. 2, 2014.

UPDATE 3: Former Herbalife distributors who believe the pyramid scheme class action settlement is inadequate are reportedly planning to object to the deal. The deadline to file a claim for the Herbalife settlement passed on Feb. 3, 2015, according to the settlement website. However, some Class Members are concerned they were not adequately informed of the claim process. Class Members who wish to exclude themselves from or object to the Herbalife class action settlement must do so by March 24, 2015.

UPDATE 4: The Herbalife class action settlement received final approval on May 14, 2015.