Online Administrative Management Team (Herbalife) | |
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| Quote: | HERBALIFE INT'L: Facing Calif. Unfair Trade Practices Lawsuit
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Herbalife International, Inc. and certain of its independent distributors continue to face a class action in the Los Angeles County Superior Court in California.
On Feb. 17, 2005, a suit, "Minton v. Herbalife International, et al.," was filed in the Superior Court of California, County of San Francisco. The suit was served on the company on Mar. 14, 2005. The company moved to transfer the case to the Los Angeles County Superior Court.
The suit is challenging the marketing practices of certain Herbalife International independent distributors and the company under various state laws prohibiting "endless chain schemes," insufficient disclosure in assisted marketing plans, unfair and deceptive business practices, and fraud and deceit.
Plaintiff alleges that the Freedom Group system operated by certain independent distributors of Herbalife International products places too much emphasis on recruiting and encourages excessively large purchases of product and promotional materials by distributors.
Plaintiff also alleges that Freedom Group pressured distributors to disseminate misleading promotional materials. Plaintiff seeks to hold the company vicariously liable for the actions of its independent distributors and is seeking damages and injunctive relief.
Source: SEC | |