Judge Wants to Know Exactly ‘Who Did What’ in Alleged Herbalife Racketeering Scheme

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A Florida judge wants to know more about a group of Herbalife leaders accused of conspiring to get their distributors to attend expensive-but-worthless company seminars.

In an order made Tuesday, June 29, US District Judge Marcia G. Cooke said she wanted to see more information from plaintiffs who filed the $1 billion class action lawsuit against 20 individual Herbalife members, alleging racketeering and fraud, Law360 reported.

The plaintiffs in the class action, all Herbalife distributors, allege the 20 named defendants took part in organizing the ‘Circle of Success’ — a series of nationwide seminars meant to build motivation among Herbalife’s hundreds of thousands of members. 

They say they were told success in the business depended on them attending as many seminars as possible, with tickets ranging from $30 to $200 and often requiring travel. 

Once there, the plaintiffs say they were encouraged to make thousands of dollars in product purchases to achieve a higher status in the company. They allege Herbalife then got other top distributors to use their influence to encourage others to attend the seminars, saying it was necessary for their success. 

The named defendants in the class action are those who were on the committees that set agendas, locations, and speakers for the seminars.

However, on Tuesday, Cooke ruled it wasn’t enough to simply name the individuals on the committees. 

She wanted to know who did or said what, and how it affected the plaintiffs, in order to look at federal Racketeer Influenced and Corrupt Organizations Act (RICO) claims.

Counsel for the plaintiff Etan Mark reportedly argued it was irrelevant who said what, as long as they were on the decision-making committee.

“We don’t need to go after only the person that pulled the trigger,” he said. “We can go after the people who planned the robbery. Here we have the 20 or so folks who were the orchestrators of the robbery.” 

The plaintiffs have asked for more discovery to get the information, which will require further cooperation from Herbalife. 

The plaintiffs are suing for violations of the RICO Act, Florida’s Deceptive and Unfair Trade Practices Act, unjust enrichment, and negligent misrepresentation. 

In 2015, a California federal judge granted approval to a $15 million class action settlement over allegations Herbalife International of America Inc. operates as an illegal pyramid scheme.

The plaintiff in that case — which was brought on behalf of Herbalife distributors — had alleged the company systematically rewards recruitment of new distributors over actual retail sales of its products.

Have you worked for Herbalife? Let us know your experience in the comments! 

The plaintiffs are represented by Etan Mark, Donald J. Hayden, and Lara O’Donnell Grillo of Mark.The Herbalife Success Seminar Class Action Lawsuit is Rodgers et al. v. HerbaLife Ltd. et al., Case No. 1:17-cv-23429, in the U.S. District Court for the Southern District of Florida.

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