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A California federal judge has preliminarily approved a class action settlement over allegations Herbalife Ltd operates as an illegal pyramid scheme and misleads distributors about their earning potential.
On Tuesday, U.S. District Judge Beverly Reid O’Connell approved the Herbalife class action settlement after determining its terms were “fair, reasonable, and adequate.” The final fairness hearing for the deal has been scheduled for May 11, 2015.
The $15 million Herbalife settlement will resolve a pyramid scheme class action lawsuit that alleged a large number of Herbalife distributors were unable to make money from selling the nutritional products and recruiting new distributors.
The Herbalife class action lawsuit was initially filed by plaintiff Dana Bostick in April 2013. Bostick, a former Herbalife distributor, alleged he spent $3,000 on Herbalife products, set up multiple websites and spent money on coaching sessions to learn how to recruit new Herbalife distributors. However, his efforts were allegedly ineffective. According to the pyramid scheme class action lawsuit, the vast majority of U.S. Herbalife distributors fail to make any money.
Herbalife has denied the allegations and maintains that it does not operate as an illegal pyramid scheme. The company fought unsuccessfully to dismiss the pyramid scheme class action lawsuit and eventually agreed to a class action settlement to avoid the “distraction, disruption and burden” of ongoing litigation.
Class Members of the Herbalife class action settlement include all persons who were Herbalife members or distributors in the United States between April 1, 2009 and Dec. 2, 2014. The pyramid scheme settlement is designed to provide compensation to those who joined Herbalife with the primary goal of pursuing a business opportunity.
Under the terms of the pyramid scheme class action settlement, Herbalife will offer up to $2.5 million in compensation to distributors who return unused products. The company has also agreed to change some of its corporate policies, including how it defines distributors and how it handles shipping charges on returned products.
Herbalife has been under investigation by some state attorneys general as well as the Federal Bureau of Investigation and the Federal Trade Commission.
Further information about the Herbalife class action settlement was 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.
Bostick is represented by Philip D. Dracht of Fabian & Clendenin and Thomas G. Foley Jr., Robert A. Curtis and Justin P. Karczag of Foley Bezek Behle & Curtis LLP.
The Herbalife ‘Pyramid Scheme’ Class Action Lawsuit is Bostick, et al. v. Herbalife International of America Inc., et al., Case No. 2:13-cv-02488, in the U.S. District Court for the Central District of California.
UPDATE 1: 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 2: The Herbalife class action settlement received final approval on May 14, 2015.
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14 thoughts onHerbalife ‘Pyramid Scheme’ Settlement Gets Initial OK
UPDATE 1: 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.
Class Members who wish to exclude themselves from or object to the Herbalife class action settlement must do so by March 24, 2015
OK how can I do this? Have not been able to find any guidance on line.
I lost about %1600 to them for being a representative – how do I file a claim against them to get compensation from the Class Action lawsuit filed against Herbalife? thank you
I invested several thousand dollars in Herbalife – only was able to sell 2 shakes. This was after my own paid for advertising, giving out a multitude of samples, and spending hundreds of hours on this. I feel I should be compensated. After several years, I eventually took all the products (they had expired) to the dumps (felt this was not illegal as nothing was toxic) & gave up. Unfortunately, the phone # provided is simply a recorded message & does not tell you how to get a claim form, nor can I find one on any web -site. Continued frustration as time is running out.
Does anyone know how I sign up to be included for this? I spent thousands on their products, leads, advertising, etc. and only made a few hundred dollars.
I spent over $10,000 myself. What I question is what makes Herbalife believe that everyone who joins the class-action suit even kept all that product that didn’t sell in there house to mail back! Unrealistic and probably a way of them not paying out to those affected.
i also spent over $1,000! what the hey!!!!
I spent over 1100 on there weight loss products
I really believed in this company I’ve spent over $1000 on the weight loss system and vitamins.
Customer of their products
The date is so not fair, I was mislead and lied to by Herbal Life in 2007 they got me for over $600.