As published in Legal NewsLine:
Calling Herbalife a “corrupt organization of individuals,” several plaintiffs have filed a class action lawsuit over allegations that the multi-level marketing company’s Circle of Success events are “valueless.”
Jeff Rodgers, Patricia Rodgers, Michael Lavigne, Jennifer Lavigne, et al., individually and on behalf of all others similarly situated, filed a complaint on Sept. 18 in the U.S. District Court for the Southern District of Florida against Herbalife LTD.;
Herbalife International Inc.; Herbalife International of America Inc., et al. alleging that the defendants violated the Florida Deceptive and Unfair Trade Practices Act, unjust enrichment and other counts.
According to the complaint, the plaintiffs allege that defendants’ Circle of Success events are held each month in dozens of locations across the country and range in size from 200 to 20,000 attendees.
Plaintiffs claim that they have spent thousands of dollars attending these events but received no benefit from doing so despite defendants’ continued guarantee of significant income, a better lifestyle and even happiness by attending.
They allege the defendants use “misrepresentation and deceit” to sell the “emotionally manipulative” events, the suit states.
The suit states
“the events are pitched as a guaranteed pathway to attaining life-changing financial success” and that participants are told to attend every
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Very Few Herbalife Distributors Stake Claim In Herbalife Lawsuit
by Tina Williams • • 0 Comments
In a recent pyramid scheme lawsuit that Herbalife Ltd. agreed to settle, few distributors who received notice of the US $17.5 million agreement filed claims to recuperate their losses and obtain product refunds.
Although notices were sent to more than 1.5 million individuals, fewer than 7,300 claims were filed, court records showed. The average claimant who meets certain criteria will receive roughly $1,100 from a $15-million cash settlement fund, according to court documents filed this month.
The claims rate of 0.47 percent “is a clear red flag that the class notice program was inadequate and unfair,” Douglas Brooks, a Massachusetts-based lawyer who represented 18 distributors objecting to the settlement, wrote in April 20 court papers.
Herbalife’s outside legal team on Monday countered that the majority of class members who declined to file a claim “confirmed the integrity of
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Class Action Lawsuit Filed Against Ambit Energy
by Tina Williams • • 0 Comments
Ambit Energy customers represented by national consumer-rights law firm, Hagens Berman, today filed a class-action lawsuit against Ambit alleging that the provider of electricity and natural gas services illegally operates a massive pyramid scheme, in which Ambit uses customers as consultants to market to friends and family, lures consumers to switch energy providers with the promise of lower rates, and causes the rates to increase, according to the complaint.
“Our investigation has shown that not only does Ambit use deceptive tactics to reel in its customers, but it then exploits them for its own gains – calling them ‘consultants’ and developing more pawns in its twisted scheme for higher profits.”
Attorneys representing the class of Ambit customers state that the energy company has defrauded its 13 million customers, growing its revenue from $1 million in 2006
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Ambit Energy Hit With Class Action Lawsuit
by Tina Williams • • 0 Comments
Ambit Energy Holdings LLC was hit with a putative class action in New Jersey federal court, claiming the energy company lured customers into switching providers with promises of lowered gas and electric bills, then slammed them with exorbitant rates.
Michael Urbino, a New Jersey resident, and Brian Whitney, who hails from New York, filed suit against the Dallas-based utility, claiming the company has taken advantage of its customers in their states and others by shifting the risk of the volatile gas and electricity markets with variable rates that can spike quickly and leave customers promised lower rates holding the bag.
“Like the risky adjustable-rate mortgages that contributed to the financial crisis, Ambit’s variable energy rates can fluctuate rapidly and have no ceiling,” the complaint said. “Yet Ambit conceals this financial risk with an extensive marketing campaign that bombards consumers with promises of consistency and savings while failing to warn consumers of the factors affecting Ambit’s variable energy rates and that those factors can drastically turn.”
According to the complaint, Whitney was wooed into switching his gas and electric accounts to Ambit in January 2011, while Urbino switched carriers in early 2012. Both had been convinced they would see savings, the documents said, but Whitney
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Herbalife Wins Court Approval For Class-Action Lawsuit
by Tina Williams • • 0 Comments
Herbalife Ltd won preliminary court approval of its $15 million settlement of class-action litigation accusing the maker of weight loss and nutritional products of being a “pyramid scheme” that misleads distributors about how much money they can make.
In a decision dated Tuesday, U.S. District Judge Beverly Reid O’Connell in Los Angeles called the accord “fair, reasonable, and adequate,” a standard often used to assess class-action settlements.
The accord also requires Herbalife to provide up to $2.5 million to distributors who return unused products.
In addition, Herbalife agreed to change some corporate policies, including over how it defines distributors and handles shipping charges on returned products, for at least three years.
The Los Angeles-based company did not admit wrongdoing. O’Connell scheduled a May 11, 2015 hearing to consider final approval of the accord. About $5.25 million of the settlement funds could go toward attorney’s fees.
Herbalife has long been under attack by short-sellers like billionaire hedge fund manager William Ackman, who has accused it of inflating results that depend more on its ability to recruit new distributors than its ability to sell products.
Authorities such as the FBI, the U.S. Federal Trade Commission, and some state attorneys general have also been probing Herbalife’s activities.
Herbalife has denied being
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Herbalife To Settle Class Action Lawsuit, Denies Any Liability
by Ted Nuyten • • 0 Comments
On October 31, 2014, global nutrition company, Herbalife Ltd. (NYSE:HLF) entered into a settlement agreement that, if approved by the court, will resolve a class action lawsuit against the company.
The company has been aggressively defending itself against the plaintiffs’ allegations set forth in Bostick v. Herbalife ever since the lawsuit was filed in 2013. Yet, the potential cost, as well as the distraction, disruption and burden of prolonged litigation on the company and its management team, led the company to decide that the terms set forth in the settlement agreement provided the best path for moving forward.
The company notes that the settlement does not contain an admission of liability or wrongdoing and still asserts that the suit has no merit. Additionally, the company notes that the plaintiffs’ counsel acknowledge that a finder of fact could reasonably conclude there is substantial demand for Herbalife product and Herbalife is not in violation of the law.
Mark Friedman, general counsel of Herbalife, stated:
“We are fully confident that we would have prevailed. Settling this matter, however, is in the company’s best interest as it allows us to put it behind us and focus on the future growth of the company.”
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Herbalife About To Settle Class-Action Lawsuit
by Tina Williams • • 0 Comments
Herbalife is close to reaching a settlement with five former distributors who claim the controversial nutritional products company is running a pyramid scheme that has victimized thousands.
Lawyers for both sides told California federal judge Beverly O’Connell last month that “the parties have tentatively agreed on the principal terms of a settlement,” according to court papers.
The parties asked for an extension of several pretrial filing dates, saying they needed more time to finalize a deal.
The suit was brought by California resident Dana Bostick in April 2013, less than four months after hedge fund activist Bill Ackman called Herbalife a fraud and placed a $1 billion short bet on the shares.
In June, four new plaintiffs joined the proposed class-action suit against the Los Angeles company.
Both sides declined to comment on the talks or the amount of the potential settlement under discussion.
Herbalife, which is under investigation by the Federal Trade Commission and other regulators, has denied the allegations and earlier said the suit had no merit.
But it now appears willing to accept a class-wide settlement to put a cap on its liability, sources told The Post.
The class would cover about 1.5 million people — those who joined in the US after 2009 to the present, excluding