Sales techniques used by Herbalife are under scrutiny in a class action alleging civil racketeering, fraud and conspiracy.
By Catherine Wilson, Daily Business Review | December 7, 2020
Etan Mark, Don Hayden, Josh Migdal, Yaniv Adar and Lara O’Donnell Grillo – Mark Migdal & Hayden
The sales network operated by Herbalife International of America Inc., a Los Angeles-based dietary supplements company, have been questioned by the Federal Trade Commission and in class action litigation.
U.S. District Judge Marcia Cooke in Miami refused to order arbitration in a class action against distributors, former board members and other company leaders, and the U.S. Court of Appeals for the Eleventh Circuit rejected the same defense arguments in July.
The multi-level marketing company promises “life-changing financial success” through hard work including paid attendance at monthly events, but the class of more than 100,000 member sellers claims civil racketeering, fraud and conspiracy in a case potentially valued at $140 million.
The company added an arbitration clause to its Rules of Conduct in 2013 and revised it in 2014 and 2016. Some individual cases have been moved to arbitration.
Mark Migdal’s work coordinating the litigation is honored with a 2020 Most Effective Lawyers award.
Describe a pivotal moment in the case.
Etan Mark: After the district court denied certain defendants’ motion to compel arbitration, those defendants appealed. After a telephonic oral argument in June, the Eleventh Circuit affirmed the district court’s denial of the defendants’ motion to compel arbitration.
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