Herbalife Asks for More Time to Finalize Class Action Settlement Terms

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According to court documents filed last week, Herbalife has asked for yet another deadline extension in the pyramid scheme class action lawsuit, claiming it needs a bit more time to work with the plaintiffs to finalize the terms of a settlement agreement.

Although the parties have reportedly agreed to the principal terms of the class action settlement, they have not yet reached an agreement on several terms. According to the court filing, “the parties have continued to work cooperatively to resolve the remaining material issues.” However, Herbalife claims the parties “need a limited amount of additional time to complete the mediation and settlement process, and, if appropriate, file a joint motion for preliminary approval of a settlement.”

Last month, U.S. District Judge Beverly Reid O’Connell agreed to push back certain pre-trial dates as the parties continue to hammer out the terms of a class action settlement. Last week, Herbalife asked for its deadline to respond to an amended pyramid scheme class action lawsuit to be extended until Nov. 10. It has also asked for the hearing regarding Class certification to be pushed back to Dec. 22.

Herbalife is a company that develops, markets and sells health, weight management and skin care products around the world. Sales are made by independent distributors whose earnings are based on product sales and commission from a multi-level marketing compensation structure.

The Herbalife class action lawsuit was filed in April 2013 by a former Herbalife distributor named Dana Bostick. He accused the company of operating an illegal pyramid scheme. He alleges the vast majority of Herbalife’s U.S. distributors fail to make money.

Last year, Herbalife was unsuccessful in its bid to dismiss the pyramid scheme class action lawsuit after the judge found Bostick’s claims were sufficient to meet the legal requirements to classify Herbalife as a pyramid scheme according to California law.

Four more plaintiffs were added to the Herbalife class action lawsuit this summer after Herbalife raised concerns about Bostick’s adequacy as a representative of the putative Class. Some of the plaintiffs allege they lost more than $10,000 as Herbalife distributors.

Although a Class has not yet been certified, potential Class Members of the Herbalife class action lawsuit include anyone who joined Herbalife since 2009. Distributors who signed up after Herbalife implemented an arbitration clause in the distributor contracts last year are not included. Approximately 1.5 million people are estimated to be Class Members of the Herbalife pyramid scheme lawsuit.

The Federal Trade Commission as well as other state and federal agencies are currently investigating Herbalife over allegations it operates as a pyramid scheme. Herbalife has denied the allegations.

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

UPDATE 2: 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 3: The Herbalife class action settlement received final approval on May 14, 2015.