Case 2:13-cv-02488-BRO-SH Document 125-1 Filed 04/13/15 Page 1 of 6 Page ID #:3628

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Philip D. Dracht (SBN 219044)
pdracht@fabianlaw.com
Scott M. Petersen (pro hac vice)
spetersen@fabianlaw.com
Jason W. Hardin (pro hac vice)
jhardin@fabianlaw.com
Fabian & Clendenin
215 South State Street, Suite 1200
Salt Lake City, UT 84151-0210
Telephone: (801) 531-8900

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Thomas G. Foley, Jr., SBN 65812
tfoley@foleybezek.com
Justin P, Karczag, SBN 223764
jkarczag@foleybezek.com
Foley Bezek Behle & Curtis, LLP
15 West Carrillo Street
Santa Barbara, CA 93101
Telephone: (805) 962-9495
Attorneys for Plaintiffs Dana Bostick,
Anita Vasko, Judi Trotter, Beverly
Molnar, and Chester Cote
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

15 DANA BOSTICK, et al.,
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PLAINTIFF,
17
18 vs.
19 HERBALIFE INTERNATIONAL
20 OF AMERICA, INC., a Nevada
Corporation, HERBALIFE
21 INTERNATIONAL, INC., a Nevada
22 Corporation, HERBALIFE, LTD a
Cayman Island Corporation,
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Case No.: 2:13-cv-02488-BRO (RZx)
PLAINTIFFS’ MEMORANDUM
IN SUPPORT OF MOTION TO
INCREASE AWARDS TO
BUSINESS OPPORTUNITY
CLAIMANTS
Hon. Beverly Reid O’Connell
Date: May 11, 2015
Time: 1:30 p.m.
Place: Courtroom 14-Spring St. Floor

DEFENDANTS.

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Complaint filed: April 8, 2013

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Case No. 2:13‐cv‐02488‐BRO (RZx)

MEMORANDUM IN SUPPORT OF MOT. TO INCREASE PAYMENTS TO BUSINESS OPPORTUNITY
CLAIMANTS

Case 2:13-cv-02488-BRO-SH Document 125-1 Filed 04/13/15 Page 2 of 6 Page ID #:3629


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I.

INTRODUCTION

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Pursuant to Section 4.4.5 of the Stipulation of Settlement (“Settlement

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Agreement”), Plaintiffs ask the Court to increase the limit on Pro Rata Awards for

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business opportunity claimants from 50% of their total purchases to 75% of their

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total purchases. This change, which was contemplated in the Settlement

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Agreement, will benefit all class members receiving such awards and will not

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diminish the cash benefits received by any other class member. Defendants do not

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oppose the change.

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II.

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BACKGROUND
On October 31, 2014, Plaintiffs and Defendants entered into the Settlement

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Agreement. The Settlement Agreement provides (1) economic relief for the

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Settlement Class through cash awards and refunds for returned product and (2) 13

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specific agreed to corporate reforms. Under the terms of the Settlement

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Agreement, Class Members who qualify and submit claims for a cash award are

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referred to as “Business Opportunity Claimants” and are entitled to either a “Pro

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Rata” or a “Flat Rate” cash award.

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Those entitled to a Pro Rata award are Business Opportunity Claimants who

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purchased at least $750 of Qualified (“Pro Rata Claimant”). The Settlement

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Agreement currently provides that Pro Rata Claimants receive a Pro Rata award

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that is equal to the lesser of (1) 100% of their estimated total loss from the sale of

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“Qualified Products” or (2) 50% of the aggregate price they paid for the

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“Qualified Products” during the class period. Claimants who do not meet the $750

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Pro Rata award threshold but who otherwise qualify as a Business Opportunity

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Claimant are entitled to a $20 Flat Rate award (“Flat Rate Claimants”).

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Section 4.4.5(a) of the Settlement Agreement provides that “[i]f the

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aggregate payment for Pro Rata Awards is less than 75% of the Net Settlement

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Fund less the aggregate Flat Rate Awards . . . either party may move the Court to

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Case No. 2:13‐cv‐02488‐BRO (RZx)

MEMORANDUM IN SUPPORT OF JOINT MOT. FOR PRELIM. APPROVAL OF SETTLEMENT

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increase payment to Business Opportunity Claimants receiving a Pro Rata Award

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up to the lesser of (i) 75% of the price paid by that claimant for the claimant’s

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aggregate Qualified Products; or (ii) the total Net Settlement Fund.”

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On December 2, 2014, this Court entered an order granting preliminary

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approval of the Settlement Agreement and directed that notice of the settlement be

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disseminated to the Class (the “Preliminary Approval Order”).1 Pursuant to the

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Preliminary Approval Order, KCC, LLC, the Court-appointed Claims

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Administrator, mailed and emailed direct notices to 1,533,339 potential class

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members.2 The deadline for Class Members to submit a claim form was February

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3, 2015 (“Claims Deadline”).3 Despite this deadline, through negotiations with

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Defendants, Plaintiffs have secured continued acceptance of otherwise properly

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completed claim forms through the date of filing this motion, with all parties

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reserving their rights pending review of such claims. The deadline for Class

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Members to object to the Settlement Agreement was March 28, 2015 (“Objection

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Deadline”).4

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To date, approximately 7,238 Class Members have submitted Claim Forms.

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The most recent report from the claims administrator revealed that as of April 6,

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2015 the aggregate amount of Pro Rata and Flat Rate awards due under the

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Settlement Agreement is $5,738,761.49. Of this amount, $76,520.00 is

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attributable to Flat Rate awards and $5,662,241.49 to Pro Rata awards.

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Section 4.1 of the Settlement Agreement defines the Net Settlement Fund as

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the $15,000,000 Settlement Fund less the costs of notice to the class and

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administration of the settlement (approximately $600,000), attorney fees

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Dkt. No. 105.
Dkt. No. 105 ¶ 19.
3
Dkt. No. 105 ¶ 44.
4
Id.

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MEMORANDUM IN SUPPORT OF JOINT MOT. FOR PRELIM. APPROVAL OF SETTLEMENT

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($5,250,000), and litigation costs ($210,000).5 That amount totals $8,940,000.

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Thus, the aggregate payment for Pro Rata awards (less the aggregate Flat Rate

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awards) is approximately 63% of the Net Settlement Fund.

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Plaintiffs file this motion to seek approval of the Court to increase the

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percentage payout to Business Opportunity Claimants from 50% to 75% pursuant

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to Section 4.4.5 of the Settlement Agreement. Plaintiffs have been advised that

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Defendants do not to object to Plaintiffs’ motion. Moreover, none of the Class

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Members have objected to Section 4.4.5(a) of the Settlement Agreement or the

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language providing for the increase in payments to claimants that Plaintiffs are

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now seeking.

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III.

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ARGUMENT
After a class action settlement agreement has been preliminarily approved,

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the court is responsible for ensuring that the terms of the settlement agreement are

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followed.6

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Here, Section 4.4.5(a) of the Settlement Agreement provides for a

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conditional increase in the amount a Business Opportunity Claimant may receive

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as a Pro Rata award. If, after the claims have been submitted, the aggregate

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payment to Pro Rata Claimants is less than 75% of the Net Settlement, then the

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Pro Rata award can be increased from 50% to 75% of the total price paid by the

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Pro Rata Claimant for his or her Qualified Products.

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As of April 6, 2015, the aggregate settlement payments to the Pro Rata

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Claimants total 63% of the currently estimated Net Settlement Fund. As this

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amount is well below the 75% threshold contemplated by Section 4.4.5(a) of the

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Section 4.1 also subtracts from the Settlement Fund any product return payments that, in
the aggregate, exceed the $2,500,000 Product Return Fund. However, to date, such
aggregate product return payments do not exceed $1,000,000, and therefore do not exceed
the Product Return Fund.
6
See Sandpiper Vill. Condo. Ass'n., Inc. v. Louisiana-Pac. Corp., 428 F.3d 831, 846 (9th Cir.
2005); Jeff D. v. Andrus, 899 F.2d 753, 758 (9th Cir. 1989) (“The court’s power to approve or
reject settlements does not permit it to modify the terms of a negotiated settlement.”).

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Case No. 2:13‐cv‐02488‐BRO (RZx)
5

MEMORANDUM IN SUPPORT OF JOINT MOT. FOR PRELIM. APPROVAL OF SETTLEMENT

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Settlement Agreement, an increase of the payment percentage to Pro Rata

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Claimants is appropriate.

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While Plaintiffs continue to advocate for acceptance of late claims, it is

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highly unlikely that late claims, accepted after the date of this Motion, will

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increase the aggregate Pro Rata amount to greater than 75% of the total Net

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Settlement Funds less the Flat Rate awards. In addition, no objector has presented

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an objection that would prevent this Court from allowing this requested increase.

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Based on current figures, Plaintiffs estimate that an increase of the

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aggregate sales percentage to 75% will result in an additional payout to the Pro

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Rata Claimants of $1,556,298.25 from the Settlement Fund. This is money that,

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based on the Settlement Agreement, would otherwise go to cy pres. Increasing

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payments to claimants is clearly preferable to paying those funds to cy pres.

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IV.

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CONCLUSION
Based on the plain language of the Settlement Agreement and the current

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accounting of all claims made, the Court should enforce the terms of the

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Settlement Agreement and allow Pro Rata claims to be paid out at “the lesser of

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100% of the estimated total loss from Qualified Product sales or [75%] of the

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price paid by that claimant for the claimant’s aggregate Qualified Products.”7

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DATED: April 13, 2015

FABIAN & CLENDENIN, P.C.

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FOLEY BEZEK BEHLE & CURTIS LLP

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/s/ Scott M. Petersen
Phillip D. Dracht
Scott M. Petersen
Jason W. Hardin

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Settlement Agreement, Sec. 4.4.5.

Thomas G. Foley, Jr.
Robert A. Curtis
Justin P. Karczag
Attorneys for Plaintiff

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Case No. 2:13‐cv‐02488‐BRO (RZx)

MEMORANDUM IN SUPPORT OF JOINT MOT. FOR PRELIM. APPROVAL OF SETTLEMENT

Case 2:13-cv-02488-BRO-SH Document 125-1 Filed 04/13/15 Page 6 of 6 Page ID #:3633


CERTIFICATE OF SERVICE

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I hereby certify that on this 13th day of April, 2015, the foregoing has been

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served via the CM/ECF system on counsel for Plaintiffs and Defendants at the

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following addresses:
A Howard Matz ahm@birdmarella.com, dh@birdmarella.com
Aaron Lee Arndt aarndt@foleybezek.com
David L Zifkin dzifkin@bsfllp.com, dmcknight@bsfllp.com,
ecolle@BSFLLP.com, Lcajigas@bsfllp.com, tsparks@bsfllp.com
Gopi K Panchapakesan gkp@birdmarella.com, kmm@birdmarella.com,
mlw@birdmarella.com
Jason W Hardin jhardin@fabianlaw.com
Jonathan Sherman jsherman@bsfllp.com
Jonathan David Schiller jschiller@bsfllp.com
Joseph F Kroetsch jkroetsch@bsfllp.com
Justin P Karczag jkarczag@foleybezek.com, cwalker@foleybezek.com,
ehuffman@foleybezek.com
Kevin D Gamarnik kgamarnik@foleybezek.com
Mark T Drooks mtd@birdmarella.com, lak@birdmarella.com
Mitchell A Kamin mak@birdmarella.com, km@birdmarella.com,
krw@birdmarella.com, lak@birdmarella.com
Philip D Dracht pdracht@fabianlaw.com, aclark@fabianlaw.com,
smcnett@fabianlaw.com
Robert Allen Curtis rcurtis@foleybezek.com,
cconnors@foleybezek.com, jkassity@foleybezek.com
Scott M Petersen spetersen@fabianlaw.com, smcnett@fabianlaw.com
Thomas Foley tfoley@foleybezek.com, aarndt@foleybezek.com,
cconnors@foleybezek.com
William S Ohlemeyer wohlemeyer@bsfllp.com
Andrea L Petray apetray@marksfinch.com, nhorn@marksfinch.com
James C Sturdevant jsturdevant@sturdevantlaw.com,
bnuss@sturdevantlaw.com, ydrevon@sturdevantlaw.com

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April 13, 2015

/s/ Scott M. Petersen

4830‐0996‐6115, v. 1

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Case No. 2:13‐cv‐02488‐BRO (RZx)

MEMORANDUM IN SUPPORT OF JOINT MOT. FOR PRELIM. APPROVAL OF SETTLEMENT

Case 2:13-cv-02488-BRO-SH Document 130-1 Filed 04/13/15 Page 1 of 7 Page ID #:3715

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Philip D. Dracht (SBN 219044)
pdracht@fabianlaw.com
Scott M. Petersen (pro hac vice)
spetersen@fabianlaw.com
Jason W. Hardin (pro hac vice)
jhardin@fabianlaw.com
Fabian & Clendenin
215 South State Street, Suite 1200
Salt Lake City, UT 84151-0210
Telephone: (801) 531-8900
Thomas G. Foley, Jr., SBN 65812
tfoley@foleybezek.com
Justin P, Karczag, SBN 223764
jkarczag@foleybezek.com
Foley Bezek Behle & Curtis, LLP
15 West Carrillo Street
Santa Barbara, CA 93101
Telephone: (805) 962-9495
Attorneys for Plaintiffs Dana Bostick,
Anita Vasko, Judi Trotter, Beverly
Molnar, and Chester Cote

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IN THE UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

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DANA BOSTICK, a California
citizen, et al.,

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Case No.: 2:13-cv-02488-BRO-RZ
DECLARATION OF PHILIP D.
DRACHT

PLAINTIFF,

Hon. Beverly Reid O’Connell

vs.

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22
23
24
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HERBALIFE INTERNATIONAL
OF AMERICA, INC., a Nevada
Corporation, et al.,

Hearing Date: May 11, 2015
Time: 1:30 p.m.
Courtroom: 14

DEFENDANTS.
Complaint filed: April 8, 2013

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Case No. 2:13-cv-02488-BRO-RZ
DECLARATION OF PHILIP D. DRACHT

Case 2:13-cv-02488-BRO-SH Document 130-1 Filed 04/13/15 Page 2 of 7 Page ID #:3716

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I, Philip D. Dracht, hereby declare as follows:

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1.

I am a member in good standing of the bar of this Court, an active

3 member of the State Bar of California and the State Bar of Utah and one of the
4 attorneys of record for the Plaintiffs and Class Counsel in the above-captioned
5 action.
6

2.

I respectfully submit this declaration in support of Plaintiffs’ Motion

7 for Final Approval of the Settlement against Defendants Herbalife, LTD, Herbalife
8 International of America, Inc., and Herbalife International, Inc. (“Herbalife”).
9

3.

Following the filing of the Joint Motion for Preliminary Approval of

10 Settlement and the Court’s granting preliminary approval, there were numerous
11 stories, blogs, and other online descriptions of the settlement, including stories
12 published in
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a. LaOpiniõn: http://www.laopinion.com/ganancias-perdidaherbalife-ponzi-piramide (Spanish)
b. Reuters: http://www.reuters.com/article/2014/11/05/herbalifelawsuit-idUSL4N0SR00520141105
c. Bloomberg Business:

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http://www.bloomberg.com/news/articles/2014-11-01/herbalife-to-

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pay-15-million-to-end-pyramid-scheme-suit

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d. Slate:

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http://www.slate.com/blogs/the_slatest/2014/11/03/herbalife_pyra

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mid_scheme_lawsuit_15_million_settlement_in_class_action.html

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e. Yahoo! News https://news.yahoo.com/herbalife-wins-court-

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approval-class-action-settlement-230953489--sector.html

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f. National Law Journal:

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http://www.nationallawjournal.com/id=1202678301481/Herbalife-

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to-Settle-Case-Claiming-Pyramid-

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Scheme?slreturn=20150312142841
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g. Law360: http://www.law360.com/articles/592656/herbalife-pays-

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15m-to-end-pyramid-scheme-class-action

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h. DailyMail.com: http://www.dailymail.co.uk/news/article-

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2816636/Herbalife-settle-class-action-lawsuit-alleged-pyramid-

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scheme-15M-denies-liability.html

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i. mynewsla.com http://mynewsla.com/business/2014/12/05/15-

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million-herbalife-settlement-alleged-pyramid-scheme-finalized/
4.

Notably, days after the Settlement was announced, the NYPost

9 predicted that
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some critics, including Hispanic activists, hope to stop the $15

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million settlement reached Friday in a class-action lawsuit by several

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distributors.
“We plan to object to the settlement because it won’t begin to

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pay for the true damages that Herbalife has caused this class,” said

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Brent Wilkes, executive director of the League of United Latin

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American Citizens.

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http://nypost.com/2014/11/02/herbalife-plot-thickens-with-third-quarter-

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report/

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5.

Prior to any settlement and before the Court ruled on Herbalife’s

20 Motion to Dismiss, in July of 2013, I reached out to Mr. Wilkes, the national
21 executive director of the Washington-based League of United Latin American
22 Citizens, or LULAC to introduce myself as counsel for Dana Bostick because Mr.
23 Wilkes had publically criticized Herbalife. See
24 http://articles.latimes.com/2013/jul/19/business/la-fi-herbalife-latino-20130719. I
25 left a message with Mr. Wilkes’ office to contact me because I thought that Mr.
26 Wilkes might have information that would assist the class in the prosecution of this
27 action. Neither Mr. Wilkes nor anyone from his office returned my phone call. The
28 New York Times later revealed that LULAC had accepted a $10,000 contribution
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DECLARATION OF PHILIP D. DRACHT

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1 from the Pershing Square hedge fund that has taken a purported $1,000,000,000.00
2 short position against Herbalife’s stock in 2013.
3 http://www.nytimes.com/2014/03/10/business/staking-1-billion-that-herbalife-will4 fail-then-ackman-lobbying-to-bring-it-down.html
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6.

In September 2014 I was contacted by Anthony Fata, an attorney in

6 Chicago who told me that he was contacted by a group of former Herbalife
7 distributors associated with a Hispanic advocacy group who wanted to discuss
8 bringing a class action against Herbalife. I never heard anything further from that
9 lawyer.
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7.

Days before the settlement was announced, an attorney by the name of

11 Jay Reyes from Riverside Law Group from the greater Chicago area contacted me
12 by telephone. He indicated that he was in contact with the Chicago area LULAC
13 group and that, according to news of a potential settlement related to filings with the
14 Court, they were concerned that they would “get a check for $15 bucks” when they
15 had claimed to have damages that ranged from $1500 to $30,000. I explained that
16 our door was always open and that we were happy to talk with them. I never heard
17 anything further from that lawyer or from any representative of the Chicago area
18 LULAC.
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8.

The New York Post later reported that Julie Contreras, of the Lake

20 County (Chicago) LULAC chapter, invited William Ackman, the founder of the
21 Pershing Square hedge fund, to speak at an anti-Herbalife event in Chicago.
22 http://nypost.com/2015/01/13/ackman-leads-hispanics-in-rally-against-herbalife/.
23 An attendee reported that Sally Greenberg of the “National Consumers League,” the
24 entity that filed an amicus brief in opposition to the Settlement, Dkt No. 117, also
25 spoke at the event. http://www.trustincapitalblog.com/blog-1/2015/1/13/a-different26 kind-of-herbalife-extravaganza. Class Counsel was not invited to attend or speak at
27 that event.
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Class Notice and Administration
9.

The notice and FAQs—published in English and Spanish—informed

3 Class Members that they could “ask for free help” and provided phone numbers for
4 both English and Spanish speaking Class Members to call Class Counsel. Class
5 members were instructed to leave their name and phone number and a brief
6 description of their question. Both I and Class Counsel Scott Petersen, who speaks
7 fluent Spanish, oversaw the responses to these inquiries. We responded to over 300
8 phone calls. While most questions were not legal questions, when Claimants had
9 legal questions, such as what to do if the Class Member was deceased, either I or
10 Scott Petersen would provide answers to those questions. It was reported to me by
11 staff members supervised by myself and Scott Peterson who were responding to
12 phone calls from Spanish-speaking Class Members that a handful of Spanish13 speaking claimants had concerns about getting into “trouble” for filing a claim. We
14 informed those concerned claimants that there would be no adverse action taken
15 against them for participating in the settlement.
16

10.

Following the claims period cutoff, we received phone calls and

17 emails from Class Members saying that they had only recently received their
18 postcard notice from KCC. KCC informed me that the reason for late postcard
19 notices was that for certain Class Members, both their emails addresses and mailing
20 addresses had changed since they last provided Herbalife with contact information.
21 Because KCC would receive either an email bounce back or a returned postcard
22 notice when that happened, KCC would attempt to locate a more recent address and
23 re-mail the postcard. I immediately reached out to KCC and to Herbalife and
24 Herbalife agreed that those Claimants who stated that they had not received Notice
25 prior to the deadline for filing a claim could file a claim, which we facilitated by
26 providing those individuals with claim forms. These claims will be evaluated after
27 all late claims are received.
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11.

Following the claims period cutoff and continuing to the present,

2 Class Counsel continues to respond to inquiries from English and Spanish-speaking
3 Claimants and has worked with KCC to provide those late Claimants with claim
4 forms to fill out and submit. The parties have agreed to continue operation of the
5 settlement website until at least April 30, 2015 to allow late Claimants to make
6 claims online to expedite the process. The purpose of this was to expedite the
7 claims process. These claims will be evaluated after all late claims are received.
8

12.

In addition to the Brooks Objectors, Class Counsel has received only

9 three objections, from: Kandace Armstrong, Wymon Jong, and Jeff Lokken. Copies
10 of those objections are attached hereto collectively as Exhibit A.
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13.

Upon receipt of the Armstrong and Jong objections on the basis that

12 they received a late claim form notice, consistent with our course of conduct for all
13 Class Members, I obtained a claim form from KCC and provided it to them. Both
14 Armstrong and Jong subsequently submitted a claim. Subject to Court approval,
15 both Armstrong and Jong have withdrawn their objections. Copies of the
16 withdrawal of their objection are attached hereto collectively as Exhibit B.
17

14.

Five of the Brooks Objectors, Calderon, Colon, Leon, Sanchez, and

18 Vallecillo, objected to the settlement on the basis that they did not receive timely
19 notice. Upon receipt of their objection, and consistent with our course of conduct
20 for all Class Members, I obtained claim forms for those individuals from KCC and
21 provided individualized claim forms to their counsel. A copy of the cover email
22 transmitting those claim forms is attached as Exhibit C. Those five objectors all
23 submitted claims, which I forwarded with Herbalife’s consent to KCC for
24 processing. A copy of the cover email from Douglas Brooks to me transmitting
25 those completed claim forms is attached as Exhibit D.
26

15.

There are ten Brooks Objectors who claimed that “I received the Class

27 Notice but … I did not understand that I could file a claim and also object to the
28 Settlement”: Elvia Acosta, Sabas Avila, Elizabeth Correa, Maria Cutzal, Juana
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1 Estala, Jose G. Garcia, Rossina Martinez, Yader Pastran, Jose Tafoya and Olivia
2 Torres. I am informed and believe that to the best of all Class Counsels’ knowledge,
3 no other Class Members ever raised this issue with class counsel or the Settlement
4 Administrator. Class Counsel obtained Herbalife’s agreement that these allegedly
5 “confused” individuals be allowed to file claims, although neither Class Counsel
6 nor Herbalife agrees that there was any reasonable basis for the Brooks Objectors’
7 supposed confusion. A copy of the cover email to Objectors’ attorney Douglas
8 Brooks attaching their claim forms is attached as Exhibit E.
9

During the course of administering the settlement, and before the filing of

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any objections, the parties agreed to the substantive terms of the Second

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Amendment to Stipulation of Settlement. That amendment has been filed with the

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Court.I declare under penalty of perjury under the laws of the United States of

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America that the foregoing is true and correct.

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Executed on April 13, 2015 at Santa Barbara, California:

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/s/ Philip D. Dracht*
*/s/ Thomas G. Foley, Jr., attests that all other signatories listed, and on whose
behalf the filing is submitted, concur in the filing’s content and have authorized the
filing

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Case No. 2:13-cv-02488-BRO-RZ

DECLARATION OF PHILIP D. DRACHT

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 1 of 21 Page ID
#:3722

EXHIBIT A

EXHIBIT A

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 2 of 21 Page ID
#:3723

Exhibit A
Page 1 of 6

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 3 of 21 Page ID
#:3724

Exhibit A
Page 2 of 6

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 4 of 21 Page ID
#:3725

Exhibit A
Page 3 of 6

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 5 of 21 Page ID
#:3726

Exhibit A
Page 4 of 6

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 6 of 21 Page ID
#:3727

Exhibit A
Page 5 of 6

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 7 of 21 Page ID
#:3728

Exhibit A
Page 6 of 6

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 8 of 21 Page ID
#:3729

EXHIBIT B

EXHIBIT B

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 9 of 21 Page ID
#:3730

Exhibit B
Page 1 of 2

Mar 24 15 l2:bYp

Wyman Jong

954-734-9342

p.1

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 10 of 21 Page ID
#:3731

United States District Court
Central District of CaLifornia
312 No. Spring Street
Los Angeles, CA90012

March 23, 2015
RE: Written Objection
Case: Dana Bostick. eta!. v. Herbalife International of America, mc, et al.,
Case No: 2:13-cv-02488-BRO-RZ
[would like to withdraw the objection that I submitted to this settlement on the basis that I dId
not timely receive ray notice. Upon receipt of my objection arid explanation as to why I was
unable to submit a timely claim form, on March 23, 2015. counsel for the Plaintiffs arranged for
me 10 submit a claim form, which I dii

954-683-6408

Exhibit B
Page 2 of 2

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 11 of 21 Page ID
#:3732

EXHIBIT C

EXHIBIT C

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 12 of 21 Page ID
#:3733
Philip D. Dracht
From:
Sent:
To:
Cc:
Subject:
Attachments:

Philip D. Dracht
Friday, March 27, 2015 2:40 PM
Douglas Brooks (dmbrooks@brooks-law.net); 'mckeon@cohenmckeon.com'
Scott M. Petersen; 'jhardin@fabianlaw.com'; tfoley@foleybezek.com;
rcurtis@foleybezek.com; Colleen Connors; Samantha McNett
Herbalife: Claim Forms
HIB_Claim Form_Miguel Calderon.pdf; HIB_Claim Form_Felipe Colon.pdf; HIB_Claim
Form_Valentina Leon.pdf; HIB_Claim Form_Gilberto Melchor.pdf; HIB_Claim Form_Martil
Palma.pdf

Doug and Heather: 
 
We received your objection and the declarations of the objectors and wanted to reach out to you.  Five of your objectors 
have certified under penalty of perjury that they did not receive notice of the class action settlement.   
 
Miguel Calderon 
Felipe Colon 
Valentina Leon 
Gilberto Melchor Sanchez 
Martil Palma Vallecillo 
 
It has been our practice pursuant to paragraph 43 of the Order Granting Preliminary Approval, that where Class 
Members have not received notice or received notice without sufficient time to file a claim before the claim deadline, 
that we are permitting such Class Members to file claims after the deadline.  Herbalife has not opposed this, provided 
there was a good faith explanation for the lateness.  So attached are claim forms for each of your clients who claim that 
they never received notice.  If your clients wish to make a claim, please have them do so by April 10, 2015 so that the 
settlement administrator can include their claims in any report submitted to the Court in conjunction with the Motion 
for Final Approval of the settlement. 
 
We are still analyzing the other objectors who claimed that they received notice but did not fill out a claim form because 
they did not know that they could object and fill out a claim.  Obviously this is a small minority as no other objectors 
have raised this issue and it seems to be limited to your 10 clients.  A critical component though is whether the objectors 
were represented by counsel at the claim submission deadline.  
 
We are willing to discuss this further with you.   
 
Sincerely, 
 
Philip D. Dracht  
Office (801) 531‐8900 
Direct (801) 323‐2251 
Fax (801) 531‐1716  

215 South State Street, Suite 1200 
Salt Lake City, UT 84111‐2323 
www.fabianlaw.com 

 

Exhibit C
1

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 13 of 21 Page ID
#:3734

EXHIBIT D

EXHIBIT D

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 14 of 21 Page ID
#:3735
Philip D. Dracht
From:
Sent:
To:
Cc:

Subject:
Attachments:

Douglas M. Brooks <dmbrooks@brooks-law.net>
Friday, April 10, 2015 7:51 PM
Philip D. Dracht
mckeon@cohenmckeon.com; Scott M. Petersen; Jason W. Hardin;
tfoley@foleybezek.com; rcurtis@foleybezek.com; cconnors@foleybezek.com;
Samantha McNett
Emailing - IMG_0002.pdf
IMG_0002.pdf

Phil
I am attaching claim forms for Miguel Calderon, Felipe Colon, Valentina Leon, Gilberto Melchor Sanchez and
Martil Palma Vallecillo.
I received your email regarding the other objectors today and I shall respond in due course.
My clients are not requesting or expecting special treatment and their filing of these claims is not a waiver of
any of their objections. None of them were represented at the claim submission deadline.
Douglas M. Brooks
Attorney at Law
60 Thoreau Street, No. 219
Concord, MA 01742
(781) 424-6737
dmbrooks@brooks-law.net

Exhibit D
1

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 15 of 21 Page ID
#:3736

EXHIBIT E

EXHIBIT E

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 16 of 21 Page ID
#:3737

EXHIBIT E

EXHIBIT E

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 17 of 21 Page ID
#:3738
Philip D. Dracht
From:
Sent:
To:
Cc:
Subject:
Attachments:

Philip D. Dracht
Friday, April 10, 2015 1:22 PM
Douglas Brooks (dmbrooks@brooks-law.net); 'mckeon@cohenmckeon.com'
Scott M. Petersen; 'jhardin@fabianlaw.com'; tfoley@foleybezek.com
Herbalife
HIB_Claim Form_Yader Pastran.pdf; HIB_Claim Form_Elizabeth Correa.pdf; HIB_Claim
Form_Elvia Acosta.pdf; HIB_Claim Form_Jose Garcia.pdf; HIB_Claim Form_Juana
Estala.pdf; HIB_Claim Form_Maria Cutza.pdf; HIB_Claim Form_Rossina Martinez.pdf;
HIB_Claim Form_Sabas Avila.pdf; HIB_POC_141210.pdf; HIB_POC_sp_141210.pdf

Doug:
Attached are claim forms for the objectors you represent who have claimed that they were
confused by the ability to file a claim and also object. As no other objectors have raised this
issue, it appears to be limited to the 10 objectors represented by you. Despite passage of the
applicable deadlines, we have obtained Herbalife’s agreement that your clients be allowed to
file a claim.
The claim forms for the following objectors are attached:
Elvia Acosta
Sabas Avila
Elizabeth Correa
Maria Cutzal
Juana Estala
Jose G. Garcia
Rossina Martinez
Yader Pastran
Personalized forms for Jose Tafoya’s and Olivia Torres’s are not attached because we were
unable to determine their Herbalife ID and did not want to confuse them with other similarly
named class members. Accordingly, two blank claims forms are attached (in both English and
Spanish) for Mr. Tafoya and Ms. Torres to complete and submit. In doing so, please ensure that
they include their Herbalife ID numbers in their application so that they are linked to the correct
purchase data.
You can scan all the completed forms (including the forms of those objectors who claim they
did not receive notice) and forward them to me to submit to KCC, the court-approved
settlement administrator. This will expedite the processing of their paper claims. If your clients
prefer, we have arranged for them to file their claims online through the claims website,
www.herbalifeclassaction.com, which will be available to file claims until April 30, 2015. The
link to file a claim is in the upper right hand menu. As I’ve indicated, Mr. Tafoya and Ms.
1

Exhibit E
Page 1 of 2

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 18 of 21 Page ID
#:3739

Torres will need their HIB claim numbers from their notice to file their claims online, which
should be on the claim notice that they received.
Please let me know if you have any questions. We are always willing to discuss these and other
issues with you.
 

Philip D. Dracht  
Office (801) 531‐8900 
Direct (801) 323‐2251 
Fax (801) 531‐1716  

215 South State Street, Suite 1200 
Salt Lake City, UT 84111‐2323 
www.fabianlaw.com 

 

 

2

Exhibit E
Page 2 of 2

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 19 of 21 Page ID
#:3740

EXHIBIT F

EXHIBIT F

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 20 of 21 Page ID
#:3741
U.S. Court of Appeals Summary ­­ 12 ­Month Period Ending December 31, 2014
DC

1ST

2ND

3RD

4TH

5TH

6TH

7TH

8TH

1,092

1,413

4,988

3,962

4,727

7,765

4,605

2,917

2,968 11,311

Prisoner

86

201

947

1,025

1,735

2,274

1,414

1,000

984

Other

512

592

2,399

2,182

1,601

2,609

2,012

1,241

Criminal

66

463

781

459

1,145

2,433

899

533

Administrative

428

157

861

296

246

449

280

7.1

­10.3

­0.2

1.3

­4.9

4.2

­7.3

­7.6

­7.1

0.3

­2.6

Total

A
p
p
e
a
l
s

F
i
l
e
d

Percent
Change
in Total
Filings
Current
Year

Over Last Year

A
p
p
e
a
l
s

T
e
r
m
i
n
a
t
e
d

11TH

1,964

6,087

2,601

555

1,966

1,158

3,979

888

2,552

678

1,380

394

1,245

143

148

3,351

127

324

­7.5

­2.5

4.6

­11.4

­5.2

­2.7

4.1

­7.0

­6.6

3.1

­5.6

­13.5

­5.5

3,000 11,378

2,058

6,239

43

215

1,034

1,297

5,181

3,262

4,843

7,996

5,141

3,023

Consolidations
& Cross Appeals ²

168

66

366

100

177

1,000

264

189

Procedural

124

321

402

407

1,915

1,030

1,099

2,814

1,384

1,125

568

4,651

600

2,228

Total

464

824

2,900

2,132

3,567

4,182

3,493

1,709

2,308

6,406

1,415

3,796

Prisoner

42

123

498

532

1,241

950

1,026

521

754

2,157

365

1,280

Other

273

336

1,306

1,032

1,159

1,458

1,470

732

914

1,921

590

1,448

Criminal

47

283

529

395

1,020

1,591

758

376

556

1,016

353

914

Administrative

102

82

567

173

147

183

239

80

84

1,312

107

154

Percent by
Active Judges

79.3

70.5

70.6

78.5

87.7

80.1

67.0

77.9

86.7

70.1

70.6

80.8

1,503

1,469

3,522

2,809

2,224

4,638

3,249

1,812

1,500 14,200

1,171

3,511

Termination on the Merits

138

420

524

427

698

807

448

422

295

936

Procedural Terminations

On
The
Merits

Pending Appeals

Actions
per
Active
Judge ¹

10TH

Over 2010
Total

Overall
Caseload
Statistics

9TH

Written
Decisions

578

486

28

50

68

51

55

156

55

47

51

70

51

220

Total

35

123

201

147

231

225

161

134

181

154

101

356

Signed

15

36

196

102

41

22

48

48

44

13

84

22

Unsigned

20

84

4

35

191

202

113

86

46

72

17

320

Without
Comment

­

3

­

10

­

1

­

1

92

68

­

15

¹ Includes only judges active during the entire 12­month period.
² Prior to December 2011, cases disposed of by consolidation and cross appeals were counted separately.  
   From December 2011 forward, they are counted as a subset of procedural and merit terminations to reflect 
   the manner in which the appeal was disposed.

Exhibit F
Page 1 of 2

Case 2:13-cv-02488-BRO-SH Document 130-2 Filed 04/13/15 Page 21 of 21 Page ID
#:3742
U.S. Court of Appeals Summary ­­ 12 ­Month Period Ending December 31, 2014
DC
Number of Judgeships/
Number of Panels
Number of Sitting
Senior Judges
Number of Vacant 
Judgeship Months ²
A
p
p
e
a
l
s

Actions 
per 
Panel ¹

A
p
p
e
a
l
s

F
i
l
e
d

T
e
r
m
i
n
a
t
e
d

Other
Caseload
per
Judgeship

2ND

3RD

4TH

5TH

6TH

7TH

8TH

9TH

10TH

11TH

11 / 3.7 6 / 2.0 13 / 4.3 14 / 4.7 15 / 5.0 17 / 5.7 16 / 5.3 11 / 3.7 11 / 3.7 29 / 9.7 12 / 4.0 12 / 4.0
6

4

9

11

2

8

8

4

4

16

10

8

0.4

4.6

0.0

6.1

4.9

28.6

12.0

12.0

0.0

6.8

6.4

31.1

Total

298

707

1,151

849

945

1,370

863

796

809

1,170

491

1,522

Prisoner

23

101

219

220

347

401

265

273

268

269

139

492

All Other Civil

140

296

554

468

320

460

377

338

316

412

222

638

232

180

98

229

429

169

145

185

143

99

311

Criminal

18

Administrative

117

79

199

63

49

79

53

39

40

347

32

81

Total

282

649

1,196

699

969

1,411

964

824

818

1,177

515

1,560

Consolidations
& Cross Appeals ³

46

33

84

21

35

176

50

52

34

33

11

54

Procedural

110

204

442

221

220

497

260

307

155

481

150

557

412

669

457

713

738

655

466

629

663

354

949

On
The
Merits

Total

127

Prisoner

11

62

115

114

248

168

192

142

206

223

91

320

Other

74

168

301

221

232

257

276

200

249

199

148

362

Criminal

13

142

122

85

204

281

142

103

152

105

88

229

Administrative

28

41

131

37

29

32

45

22

23

136

27

39

410

735

813

602

445

818

609

494

409

1,469

293

878

  13.7   12.1   10.5

   7.1

   5.2

   8.9

   9.0

   7.0

   6.1   12.4

   8.4

   7.2

Pending Appeals
Median
Time

1ST

Median Time From
Filing Notice of Appeal
to Disposition
Applications for
Interlocutory Appeals
Petitions for Rehearing

­

2

4

3

1

11

2

3

3

4

1

2

26

41

38

80

66

29

68

35

96

50

41

70

¹ See "Explanation of the Judicial Caseload Profiles."
² See "Explanation of Selected Terms."
³ Prior to December 2011, cases disposed of by consolidation and cross appeals were counted separately.  
   From December 2011 forward, they are counted as a subset of procedural and merit terminations to reflect 
   the manner in which the appeal was disposed.

Exhibit F
Page 2 of 2

Case 2:13-cv-02488-BRO-SH Document 130-3 Filed 04/13/15 Page 1 of 6 Page ID #:3743

1
2
3
4
5
6
7
8
9
10
11
12
13

Thomas G. Foley, Jr., SBN 65812
tfoley@foleybezek.com
Justin P, Karczag, SBN 223764
jkarczag@foleybezek.com
Kevin Gamarnik, SBN 273445
kgamarnik@foleybezek.com
Foley Bezek Behle & Curtis, LLP
15 West Carrillo Street
Santa Barbara, CA 93101
Telephone: (805) 962-9495
Philip D. Dracht, SBN 219044
pdracht@fabianlaw.com
Scott M. Petersen (pro hac vice)
spetersen@fabianlaw.com
Jason W. Hardin (pro hac vice)
jhardin@fabianlaw.com
Fabian & Clendenin
215 South State Street, Suite 1200
Salt Lake City, UT 84151-0210
Telephone: (801) 531-8900
Attorneys for Plaintiffs Dana Bostick,
Anita Vasko, Judi Trotter, Beverly Molnar, and Chester Cote

14
15
16
17

IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
CASE NO. 2:13-cv-02488-BRO-RZx
DANA BOSTICK, et al.,

18
Plaintiffs,

19
20
21
22
23
24
25
26
27
28

vs.
HERBALIFE INTERNATIONAL OF
AMERICA, INC., et al.,
Defendants.

DECLARATION OF THOMAS G.
FOLEY, JR. IN SUPPORT OF
JOINT MOTION FOR FINAL
APPROVAL OF CLASS ACTION
SETTLEMENT CLASS
Hon. Beverly Reid O’Connell
Hearing Date:
Time:
Courtroom: 14

May 11, 2015
1:30 p.m.

Complaint filed: April 8, 2013

Case 2:13-cv-02488-BRO-SH Document 130-3 Filed 04/13/15 Page 2 of 6 Page ID #:3744

1
2

Thomas G. Foley, Jr., states and declares as follows:
1.

I, Thomas G. Foley, Jr., am an attorney licensed to practice law in the

3

State of California and am co-lead counsel for Plaintiffs and the Class. I am a

4

founding partner of FOLEY BEZEK BEHLE & CURTIS, LLC (“FBBC”). I make

5

this declaration upon my own personal knowledge, except those matters stated

6

upon information and belief, and as to those matters, I believe them to be true. If

7

called upon to testify to the matters set forth herein, I could and would, testify

8

thereto competently under oath.

9

2.

I have personal knowledge of all of the facts set forth below.

10

3.

I submit this Supplemental Declaration in support of Plaintiffs’

11
12

motion for final approval of the Settlement.
4.

Attached hereto as Exhibit G is a true and correct copy of an article

13

published by the Wall Street Journal (“Journal”) on April 1, 2015. My purchased

14

subscription to the Journal provides me with the Journal on a daily basis and I can

15

confirm that the copy of the article attached hereto as Exhibit G is a true and

16

correct copy of the exact article related to William Ackman, Pershing Square and

17

Herbalife that was published in the Journal on April 1, 2015.

18

5.

In the Herbalife litigation, Herbalife produced, subject to the

19

Protective Order, copies of surveys prepared by Lieberman Research Worldwide

20

(“Lieberman”), the Direct Selling Association (“DSA survey”) and by Actionable

21

Research (the “Actionable survey”). All three surveys were considered by Class

22

Counsel.

23

6.

On its website Lieberman states that it has been commissioned to

24

conduct surveys by Coca-Cola, Walt Disney corporation, McDonalds,

25

ExxonMobil, General Electric, Intel, Microsoft and Toyota. I am informed and

26

believe that Herbalife commissioned the Lieberman survey to independently

27

validate the size and composition of Herbalife’s end users. The authors of the

28

Lieberman survey state that two independent studies took place between July 2012
1

Case No. 2:13-cv-02488-BRO-RZ

SUPPLEMENTAL DECLARATION ISO MEMORANDUM IN SUPPORT OF JOINT MOT. FOR
PRELIM. APPROVAL OF SETTLEMENT

Case 2:13-cv-02488-BRO-SH Document 130-3 Filed 04/13/15 Page 3 of 6 Page ID #:3745

1

and October of 2012. The authors of the Lieberman survey state that the sample

2

size of respondents to the survey were 2,000 individuals over the age of 18, of

3

which the authors selected to match U. S. census data on age, gender, income,

4

region and ethnicity. The Lieberman survey concluded that over 70% of the

5

respondents purchased Herbalife products for self-consumption and approximately

6

half joined Herbalife with no expectation of making any money selling Herbalife

7

products.

8
9

7.

The DSA survey referenced by Objectors was obtained and reviewed

by Class Counsel prior to negotiating the Settlement. The DSA survey is an

10

industry-wide survey of the multi-level-marketing industry, and not specific to

11

Herbalife.

12

8.

While the Actionable survey is specific to Herbalife, it had only had

13

48 respondents, who were all supervisors. To become a supervisor in the Herbalife

14

distribution network, it required a distributor to regularly purchase specified levels

15

of product. Because supervisors had to purchase a specified level of product to

16

attain and maintain that status, it would be expected a high percentage of those

17

respondents would be pursuing a business opportunity as opposed to self-

18

consuming Herbalife product.

19

9.

Based on Class Counsels’ review of the Actionable survey, the DSA

20

survey and the Lieberman survey, we gave more weight to the Lieberman survey

21

because it was specific to Herbalife and it had a much larger number of

22

respondents, and those respondents included distributors who were not supervisors

23

10.

I am informed and believe that attorney Douglas Brooks, who

24

represents 18 of the objectors to the Settlement, previously filed two separate class

25

action complaints against Herbalife alleging that it was a pyramid scheme. The

26

first case was in the U.S. District Court for the Central District of California,

27

entitled Jacobs, et al., v. Herbalife, et al., 2:02-cv-01431-SJO-RC (C.D. Cal). In

28

Jacobs, Mr. Brooks named as defendants both Herbalife and a third party that sold
2

Case No. 2:13-cv-02488-BRO-RZ

SUPPLEMENTAL DECLARATION ISO MEMORANDUM IN SUPPORT OF JOINT MOT. FOR
PRELIM. APPROVAL OF SETTLEMENT

Case 2:13-cv-02488-BRO-SH Document 130-3 Filed 04/13/15 Page 4 of 6 Page ID #:3746

1

marketing tools and sales leads to other distributors, commonly referred to in the

2

parlance of multi-level-marketing as a “third party lead generator.” See Declaration

3

of Douglas Brooks filed in support of motion for approval of settlement in Jacobs,

4

¶12, dated September 2, 2004, herein after Brooks’ Jacobs Decl.,” a true and

5

correct copy of which is attached hereto as Exhibit H.

6

11.

Based on my review of the pleadings in Jacobs, the District Court

7

declined to accept supplemental jurisdiction over the California state law claims

8

(Endless Chain) in the complaint and dismissed those claims as to all defendants,

9

including Herbalife. (Brooks’ Jacobs Decl. ¶30.) The plaintiffs represented by Mr.

10

Brooks in Jacobs then settled the case, using confirmatory discovery in support of

11

the settlement. (Brooks’ Jacobs Decl. ¶35; Exh. H attached hereto.) The Jacobs

12

settlement allowed for a reversionary $4 million cash component and a “product

13

rebate” component of $2 million. (Brooks’ Jacobs Decl. ¶38; Exh. H attached

14

hereto.) Attorney Brooks, sought $1.4 million in fees in Jacobs. (Brooks’ Jacobs

15

Decl. ¶53.) In justifying the settlement in Jacobs against one of the eleven

16

objectors who objected because Mr. Brooks had not named other third party lead

17

generators as defendants, Mr. Brooks stated: “Moreover, the Settlement does not

18

release Financial Success Systems or any other Herbalife promotional system, and

19

distributors are free to pursue claims against such entitles if they so choose.”

20

(Brooks’ Jacobs Decl. ¶51.)

21

12.

Just as in Jacobs, the 18 objectors represented by Mr. Brooks in this

22

Bostick litigation may participate in the Bostick Settlement and also pursue either

23

class or individual claims against third party lead generators for their alleged

24

consequential damages based on payments made to those third parties.

25

13.

Following the Jacobs settlement, attorney Brooks filed another

26

putative class case against Herbalife, Minton v. Herbalife, et. al., BC338305 (Los

27

Angeles County Sup.Ct.). Minton was a putative class action “leads” case against

28

Herbalife and various third party lead generators who sold the leads to class
3

Case No. 2:13-cv-02488-BRO-RZ

SUPPLEMENTAL DECLARATION ISO MEMORANDUM IN SUPPORT OF JOINT MOT. FOR
PRELIM. APPROVAL OF SETTLEMENT

Case 2:13-cv-02488-BRO-SH Document 130-3 Filed 04/13/15 Page 5 of 6 Page ID #:3747

1

members. See Declaration of Douglas Brooks filed in support of settlement in

2

Minton, ¶7 (herein after “Brooks Minton Decl.”), a true and correct copy of which

3

is attached hereto as Exhibit I. Even prior to Dukes, Comcast, and Mazza, the

4

California Superior Court in Mr. Brooks’ Minton case declined to certify a

5

nationwide class against the third party lead generators, and, instead conditionally

6

certified two California classes of plaintiffs. Attorney Brooks settled the Minton

7

case against Herbalife for $1.75 million. (Brooks Minton Decl. ¶17; Exhibit I

8

attached hereto, seeking attorneys’ fees not to exceed 35% of the $1.75 million

9

settlement fund in Minton (¶21).)

10

14.

I don’t disparage Mr. Brooks’ experience as a plaintiffs’ class action

11

attorney based on the results that he obtained in Jacobs and Minton. Prior to the

12

filing of the original Bostick Complaint, my co-counsel Philip Dracht diligently

13

reviewed available pleadings in all prior class action filed against Herbalife,

14

including the pleadings in both Jacobs and Minton. We considered many

15

alternative potential causes of action prior to settling on the causes of action in the

16

original Complaint and First Amended Complaint. In my prior declaration filed in

17

support of Plaintiffs’ motion for preliminary approval, I recount my experience in

18

prosecuting and defending complex business litigation matters for forty years. In

19

my professional judgment, had my co-counsel and my firm attempted to prosecute

20

a putative class action against Herbalife and third party lead generators in an effort

21

to recover restitutionary damages, including compensatory damages, we would

22

have had no more success in doing so than Mr. Brooks had in Jacobs and Minton.

23

15.

Herbalife is an experienced and tenacious opponent whose officers

24

firmly believe that it is a legitimate multi-level-marketing business, and who have

25

repeatedly demonstrated that they will fight fiercely any allegations that Herbalife

26

is a pyramid scheme. As noted in my prior declaration filed in support of Class

27

Counsels’ motion for attorneys’ fees, Herbalife was for a period of time

28

simultaneously represented in Bostick by Boies, Schiller & Flexner, Morrison &
4

Case No. 2:13-cv-02488-BRO-RZ

SUPPLEMENTAL DECLARATION ISO MEMORANDUM IN SUPPORT OF JOINT MOT. FOR
PRELIM. APPROVAL OF SETTLEMENT

Case 2:13-cv-02488-BRO-SH Document 130-3 Filed 04/13/15 Page 6 of 6 Page ID #:3748

1

Forrester, and Bird Marella. Given the tenacious defense put up by Herbalife to

2

the manner in which the company conducts its business operations, it is my belief

3

that while the causes of action alleged in the original Complaint and First

4

Amended Complaint were limited to a recession theory of damages, we were able

5

to settle with Herbalife for a significantly higher monetary amount than Mr.

6

Brooks obtained in Jacobs and Minton, as the Bostick settlement is $15 million in

7

cash and $2.5 million in product return, than if we had attempted to litigate

8

alternative causes of action, which if successful might have permitted a recovery

9

of compensatory damages.

10

16.

It is also my professional judgment that the corporate reforms

11

included in the preliminarily-approved Bostick settlement are of significant value

12

to both the members of the Class who are still Herbalife distributors and future

13

distributors and members.

14
15
16
17
18

I declare under penalty of perjury under the laws of the United States of
America that the foregoing is true and correct.
Executed this 13th day of April, 2015 at Santa Barbara, California:
/s/Thomas G. Foley, Jr.
Thomas G. Foley, Jr.

19
20
21
22
23
24
25
26
27
28
5

Case No. 2:13-cv-02488-BRO-RZ

SUPPLEMENTAL DECLARATION ISO MEMORANDUM IN SUPPORT OF JOINT MOT. FOR
PRELIM. APPROVAL OF SETTLEMENT

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 1 of 106 Page ID
#:3749

EXHIBIT G

EXHIBIT G

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 2 of 106 Page ID
#:3750

Exhibit G
Page 1 of 6

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 3 of 106 Page ID
#:3751

Exhibit G
Page 2 of 6

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 4 of 106 Page ID
#:3752

Exhibit G
Page 3 of 6

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 5 of 106 Page ID
#:3753

Exhibit G
Page 4 of 6

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 6 of 106 Page ID
#:3754

Exhibit G
Page 5 of 6

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 7 of 106 Page ID
#:3755

Exhibit G
Page 6 of 6

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 8 of 106 Page ID
#:3756

EXHIBIT H

EXHIBIT H

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 9 of 106 Page ID
#:3757

Exhibit H
Page 1 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 10 of 106 Page ID
#:3758

Exhibit H
Page 2 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 11 of 106 Page ID
#:3759

Exhibit H
Page 3 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 12 of 106 Page ID
#:3760

Exhibit H
Page 4 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 13 of 106 Page ID
#:3761

Exhibit H
Page 5 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 14 of 106 Page ID
#:3762

Exhibit H
Page 6 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 15 of 106 Page ID
#:3763

Exhibit H
Page 7 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 16 of 106 Page ID
#:3764

Exhibit H
Page 8 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 17 of 106 Page ID
#:3765

Exhibit H
Page 9 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 18 of 106 Page ID
#:3766

Exhibit H
Page 10 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 19 of 106 Page ID
#:3767

Exhibit H
Page 11 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 20 of 106 Page ID
#:3768

Exhibit H
Page 12 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 21 of 106 Page ID
#:3769

Exhibit H
Page 13 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 22 of 106 Page ID
#:3770

Exhibit H
Page 14 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 23 of 106 Page ID
#:3771

Exhibit H
Page 15 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 24 of 106 Page ID
#:3772

Exhibit H
Page 16 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 25 of 106 Page ID
#:3773

Exhibit H
Page 17 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 26 of 106 Page ID
#:3774

Exhibit H
Page 18 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 27 of 106 Page ID
#:3775

Exhibit H
Page 19 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 28 of 106 Page ID
#:3776

Exhibit H
Page 20 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 29 of 106 Page ID
#:3777

Exhibit H
Page 21 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 30 of 106 Page ID
#:3778

Exhibit H
Page 22 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 31 of 106 Page ID
#:3779

Exhibit H
Page 23 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 32 of 106 Page ID
#:3780

Exhibit H
Page 24 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 33 of 106 Page ID
#:3781

Exhibit H
Page 25 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 34 of 106 Page ID
#:3782

Exhibit H
Page 26 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 35 of 106 Page ID
#:3783

Exhibit H
Page 27 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 36 of 106 Page ID
#:3784

Exhibit H
Page 28 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 37 of 106 Page ID
#:3785

Exhibit H
Page 29 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 38 of 106 Page ID
#:3786

Exhibit H
Page 30 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 39 of 106 Page ID
#:3787

Exhibit H
Page 31 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 40 of 106 Page ID
#:3788

Exhibit H
Page 32 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 41 of 106 Page ID
#:3789

Exhibit H
Page 33 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 42 of 106 Page ID
#:3790

Exhibit H
Page 34 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 43 of 106 Page ID
#:3791

Exhibit H
Page 35 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 44 of 106 Page ID
#:3792

Exhibit H
Page 36 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 45 of 106 Page ID
#:3793

Exhibit H
Page 37 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 46 of 106 Page ID
#:3794

Exhibit H
Page 38 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 47 of 106 Page ID
#:3795

Exhibit H
Page 39 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 48 of 106 Page ID
#:3796

Exhibit H
Page 40 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 49 of 106 Page ID
#:3797

Exhibit H
Page 41 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 50 of 106 Page ID
#:3798

Exhibit H
Page 42 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 51 of 106 Page ID
#:3799

Exhibit H
Page 43 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 52 of 106 Page ID
#:3800

Exhibit H
Page 44 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 53 of 106 Page ID
#:3801

Exhibit H
Page 45 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 54 of 106 Page ID
#:3802

Exhibit H
Page 46 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 55 of 106 Page ID
#:3803

Exhibit H
Page 47 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 56 of 106 Page ID
#:3804

Exhibit H
Page 48 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 57 of 106 Page ID
#:3805

Exhibit H
Page 49 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 58 of 106 Page ID
#:3806

Exhibit H
Page 50 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 59 of 106 Page ID
#:3807

Exhibit H
Page 51 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 60 of 106 Page ID
#:3808

Exhibit H
Page 52 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 61 of 106 Page ID
#:3809

Exhibit H
Page 53 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 62 of 106 Page ID
#:3810

Exhibit H
Page 54 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 63 of 106 Page ID
#:3811

Exhibit H
Page 55 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 64 of 106 Page ID
#:3812

Exhibit H
Page 56 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 65 of 106 Page ID
#:3813

Exhibit H
Page 57 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 66 of 106 Page ID
#:3814

Exhibit H
Page 58 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 67 of 106 Page ID
#:3815

Exhibit H
Page 59 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 68 of 106 Page ID
#:3816

Exhibit H
Page 60 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 69 of 106 Page ID
#:3817

Exhibit H
Page 61 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 70 of 106 Page ID
#:3818

Exhibit H
Page 62 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 71 of 106 Page ID
#:3819

Exhibit H
Page 63 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 72 of 106 Page ID
#:3820

Exhibit H
Page 64 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 73 of 106 Page ID
#:3821

Exhibit H
Page 65 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 74 of 106 Page ID
#:3822

Exhibit H
Page 66 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 75 of 106 Page ID
#:3823

Exhibit H
Page 67 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 76 of 106 Page ID
#:3824

Exhibit H
Page 68 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 77 of 106 Page ID
#:3825

Exhibit H
Page 69 of 69

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 78 of 106 Page ID
#:3826

EXHIBIT I

EXHIBIT I

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 79 of 106 Page ID
#:3827
27383669

1
2
3
4
5
6
7

11
12

Attorneys for Plaintiffs and the Class

10

13

Oct 2 2009
1:36PM

DOUGLAS M. BROOKS
GILMAN AND PASTOR, LLP
63 Atlantic Avenue, 3rd Floor
Boston, MA 02110
Telephone: (617) 742-9700
Facsimile: (617) 742-9701
EDWARD L. MANCHUR
WHITTENBERG KNUDSEN, LLP
401 Edgewater Place, Suite 140
Wakefield, MA 01880
Telephone: (781) 246-3030
Facsimile: (781) 246-3050

9

Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

8

ROBERT C. SCHUBERT S.B.N. 62684
KIMBERLY A. KRALOWEC 163158
SCHUBERT JONCKHEER KOLBE & KRALOWEC LLP
Three Embarcadero Center, Suite 1650
San Francisco, California 94111
Telephone: (415) 788-4220
Facsimile: (415) 788-0161

SUPERIOR COURT OF THE STATE OF CALIFORNIA

14

COUNTY OF LOS ANGELES

15
16
17

DAWN MINTON and J. STEVE QUINNE,
Individually and on Behalf of Themselves and
All Others Similarly Situated,

18

Plaintiffs,

19

v.

20
21
22
23
24
25

HERBALIFE INTERNATIONAL, INC.,
HERBALIFE INTERNATIONAL OF
AMERICA, INC., FREEDOM LIFESTYLES,
INC.,d/b/a/ THE FREEDOM GROUP,
FREEDOM LIFESTYLES GROUP, INC,
FREEDOM LIFESTYLES,LLC, KURT and
CINDY O’CONNELL, and DOES 1 through
50, inclusive

Case No. BC338305 (Lead Case)
Consolidated with Case No. BC338306
DECLARATION OF DOUGLAS M.
BROOKS IN SUPPORT OF (1) MOTION
FOR FINAL APPROVAL OF CLASS
ACTION SETTLEMENT AND (2) MOTION
FOR AWARD OF ATTORNEYS’ FEES,
EXPENSES AND INCENTIVE AWARDS
Date:
Time:
Judge:
Dept.:

October 15, 2009
1:30 p.m.
Hon. Carl J. West
311- CCW

Defendants.

26
27
28
{00020372.DOC ; 1}

Exhibit I
Page 1 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 80 of 106 Page ID
#:3828
1

I, Douglas M. Brooks, declare as follows:

2

1.

3

I am an attorney duly admitted to practice in the Commonwealth of Massachusetts,

Board of Bar Overseers No. 058850, and admitted in this Court pro hac vice. I am a member of the

4
5
6
7

9
10

the plaintiff class in the above-captioned action.
2.

I have participated actively in all material aspects of this litigation. Unless otherwise

indicated, I have personal knowledge of the facts set forth herein and if called upon to testify I could
and would testify competently thereto. The purpose of this affidavit, which summarizes our work
on the case, is to support both:

11
Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

8

law firm of Gilman and Pastor, LLP (“G&P”), one of the firms appointed by the Court to represent

A.

12

Plaintiffs’ Motion for Order Granting Final Approval of Class Action
Settlement, which provides a Settlement Fund of $1.75 million; and

13
B.

14
15

Plaintiffs’ Counsels’ Motion for an award of attorneys’ fees in the amount of
$612,500 (35% of the Settlement Fund), reimbursement of expenses in the

16

amount of $62,048.18, and incentive awards to the four named plaintiffs in the

17
amount of $5,000 each.
18
19

3.

As appears from the Declaration of Markham Sherwood of Gilardi & Co., LLC, the

20

Court-appointed notice and claims administrator, over 93.5% of the class received direct notice of

21

the settlement by first class mail. No class member has objected to the settlement, or to the request

22

for fees, expenses and incentive awards. Only one class member opted out of the class. The notice

23

and claims administrator has received 121 claims, with an aggregate value of $1,412,899.76. The

24
25
26
27
28

absence of objections, the single opt out (1/10 of 1% of the class), and the relatively large number of
claims, constitute a ringing endorsement of the Settlement.
4.

Speaking on behalf of all Plaintiffs’ Counsel, we believe that this is an excellent

settlement, and constitutes a fair and reasonable compromise of hotly disputed claims. Assuming
{00020372.DOC ; 1}

Exhibit I
Page 2 of 28

1.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 81 of 106 Page ID
#:3829
1

that this Court grants our request for an award of attorneys’ fees and reimbursement of costs,

2

claimants will receive over 72% of their economic losses from the Settlement Fund. This is a better

3

recovery than they would have obtained had they retained their own counsel on a one third

4
contingency fee agreement, filed individual lawsuits and been awarded 100% of their economic

6

losses.1 For this reason, and for all of the reasons discussed below and in Plaintiffs’ Motion for

7

Final Approval of Settlement, we believe that the Settlement is in the best interest of the class and

8

should be approved.

9
10

5.

We also believe that the proposed award of attorneys fees and reimbursement of

expenses is appropriate given the results obtained and the work involved. The investigation and

11
Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

5

12

prosecution of this case has consumed a substantial portion of our time over the past four and a half

13

years, as well as substantial unreimbursed expenses. Our efforts and investment of time and money

14

have produced an excellent recovery in the face of significant obstacles. We collectively devoted

15

more than 3,600 hours in attorney time and over 370 hours in paralegal time to this case and

16

undertook significant risk in pursuing this litigation on an entirely contingent basis.

17
6.

We also seek approval of award incentive payments of $5,000 to each of the named

18
19

plaintiffs. The requested incentive awards are reasonable given the named plaintiffs’ substantial

20

services on behalf of the Class and the policy of encouraging people to come forward to litigate

21

meritorious claims on behalf of their fellow consumers

22

Prior Proceedings

23

7.

In or about January of 2005, we were retained by Plaintiffs Dawn Minton and

24
25
26

Rebecca Adams to investigate and prosecute claims on behalf of Herbalife distributors involved in
the Freedom Group and Vertical Skip Marketing lead generation systems. These consolidated

27
28

1

Of course, it is unlikely that any claimant would have been able to retain counsel to bring
individual lawsuits, given the relatively small claims at stake here.
{00020372.DOC ; 1}

Exhibit I
Page 3 of 28

2.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 82 of 106 Page ID
#:3830
1

actions were both filed in February of 2005. Following jurisdictional discovery, the Freedom Group

2

Defendants’ Motion to Quash or Dismiss for Lack of Jurisdiction or Forum Non Conveniens was

3

denied by this Court on August 1, 2006.2

4
8.

In January of 2007, following a period of class discovery and limited merits

6

discovery, Plaintiffs filed motions to certify nationwide classes in both cases. Class discovery

7

continued, including production of thousands of documents, electronic data and depositions of the

8

proposed class representatives, Dawn Minton and Rebecca Adams. The issue of class certification

9
10

was the subject of extensive briefing by all parties and a hearing was held by this Court on
November 28, 2007.

11
Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

5

9.

12

On January 24, 2008, this Court issued an order certifying California-only classes in

13

both cases but denying nationwide certification. The Order conditionally certified two California

14

classes—a Freedom Group class commencing February 1, 1999 and a VSM class commencing

15

February 1, 2004--with respect to Plaintiffs’ Endless Chain Scheme claim, and also conditionally

16

certified a California class on Ms. Adams’ “UCL claim to the extent it is premised on violation of

17
the Endless Chain Scheme Law… .” Certification of both classes was conditional upon substitution
18
19

of new class representatives, since neither Ms. Minton nor Ms. Adams were California residents.
10.

20

We notified a number of putative class members of the need for new class

21

representatives, and interviewed a number of candidates, ultimately identifying new representatives

22

for both classes: Steve Quinne for the Freedom Group class and Dianna Duniven for the Vertical

23

Skip Marketing class. Both Mr. Quinne and Ms. Duniven produced their relevant documents,

24
25
26
27

answered written interrogatories and appeared for day-long depositions. Defendants did not contest
the adequacy of either representative, and on January 8, 2009 the Court issued an order certifying
California classes in both cases.

28
2

The Court granted the motion to quash as to one defendant, Freedom Lifestyles, LLC.
{00020372.DOC ; 1}

Exhibit I
Page 4 of 28

3.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 83 of 106 Page ID
#:3831
1
2
3

11.

The core claim in these consolidated actions is that the combination of the Herbalife

“multi-level marketing” plan and both the Freedom Group and Vertical Skip Marketing “lead
generation systems” result in endless chain schemes in violation of California Penal Code section

4
5

12.

From the outset of the case it was clear that the parties sharply disagreed with each

7

others’ factual and legal contentions, that the action would be vigorously contested, that the ultimate

8

outcome of the litigation was uncertain and that any substantial delay could make it difficult to

9

provide meaningful relief to the Class.

10
Settlement Negotiations
11
Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

6

327.

12

13.

On several occasions prior to December of 2008 the parties briefly explored the

13

possibility of settlement. These discussions never progressed beyond the preliminary stages, and it

14

became clear that the parties were far apart in their respective evaluations of the merits of the case

15

and the potential damages.

16

14.

On December 15, 2008, the Court ordered the parties to appear for a Mandatory

17
Settlement Conference on January 22, 2009. Prior to the conference, all parties submitted separate,
18
19
20
21
22
23

confidential settlement memoranda to the Court, setting forth their views as to the merits and
damages.
15.

During the conference, the parties outlined the specifics of their claims and defenses

to the Court, advocated their positions, and exchanged a number of proposals and counterproposals.
While this day-long conference did not result in a settlement, and the parties remained far apart, the

24
25
26
27

Court continued the conference to February 23, 2009.
16.

After further discussions the parties reached an agreement in principle to settle all

claims. The Settlement Agreement reflects the agreement reached at the settlement conference.

28
{00020372.DOC ; 1}

Exhibit I
Page 5 of 28

4.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 84 of 106 Page ID
#:3832
1

Terms of the Proposed Settlement

2

17.

3

Pursuant to the Settlement, the Herbalife Defendants have paid $1.75 million into a

non-reversionary fund. After payment of any counsel fees, expenses and incentive payments

4
awarded by the Court, as well as the expense of class notice and claims administration, the net fund

6

will be distributed to class members who submit valid claims pursuant to a plan of distribution

7

developed by Plaintiffs’ counsel. Any funds not paid to class members or for fees, litigation

8

expenses, incentive awards or costs of administration will be distributed cy pres to non-profit

9

entities selected by the parties and approved by the Court.

10
Distribution of the Class Notice
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Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

5

12

18.

Following this Court’s preliminary approval of the Settlement, the Notice and Claims

13

Administrator mailed the Class Notice by first-class mail to the 1,026 putative Settlement Class

14

Members who were identified in Defendants’ records. Sherwood Decl., ¶ 3. Of the 242 mailings

15

that were returned undeliverable, the Notice and Claims Administrator was able to obtain updated

16

addresses for 176, which were remailed. Sherwod Decl., ¶ 5. Accordingly, approximately 93.5% of

17
the putative class members received the Class Notice by first class mail.
18
19

19.

The reaction of the class to the settlement has been overwhelmingly positive. Only

20

one class member opted out and not a single class member has objected. Sherwood Decl., ¶¶ 8-9.

21

As of the claims deadline, September 17, 2009, a total of 121 class members had filed claims

22

(including one late claim), with aggregate losses of $1,412,899.76 (including claims which the

23

claims administrator is still reviewing). Sherwood Decl., ¶¶ 13-15. One class member, Ms. Denise

24
25
26
27

Terry, has served notice that she intends to appear at the final approval hearing “to speak to the court
on the impact of the Herbalife Freedom Group ‘business opportunity’ on my life.” A copy of Ms.
Terry’s notice is attached hereto as Exhibit A. We are advised by the Notice and Claims

28
{00020372.DOC ; 1}

Exhibit I
Page 6 of 28

5.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 85 of 106 Page ID
#:3833
1

Administrator that Ms. Terry has submitted a substantial claim. Ms. Terry had not indicated that she

2

has any objection to the settlement.

3

Qualifications of Plaintiffs’ Counsel

4
20.

Throughout this litigation Plaintiffs have been represented by three firms, all of

6

which have expertise in consumer class actions in general, and in pyramid marketing schemes in

7

particular. The firm resume of Gilman and Pastor LLP is attached as Exhibit B hereto. The firm

8

resume of Schubert Jonckheer Kolbe and Kralowec LLP is attached as Exhibit C to the Kralowec

9
10

Declaration and the firm resume of Whittenberg Knudsen LLP is attached as Exhibit C to the
Manchur Declaration, both of which are submitted herewith. From the inception of the case we

11
Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

5

12

worked together to avoid any duplication of effort.

13

Fees and Expenses

14

21.

15
16

The Class Notice explained that Plaintiffs’ counsel intended to apply for

reimbursement of their reasonable fees (not to exceed 35% of the Settlement Fund) and expenses
(not to exceed $70,000), plus incentive awards to the four named plaintiffs in the amount of $5,000

17
each, to be paid from the Settlement Fund. Accordingly, Plaintiffs’ counsel have filed a motion for
18
19

an award of fees in the amount $612,500 (35% of the Settlement Fund), expenses in the amount of

20

$62,048.18 and incentive awards in the amount of $5,000 for each of the four named plaintiffs.

21

These requests are unopposed by any party, and no class member has objected to them.

22
23

22.

This litigation was undertaken by Plaintiffs’ Counsel on a wholly contingent basis.

The litigation was extremely complex from a technical and legal perspective and was undertaken

24
25
26

with high risk, including but not limited to the following: (1) it was uncertain as to whether the
Court would grant certification of the Class (in fact the class ultimately certified by the Court was

27

both smaller (limited to California residents as opposed to a nationwide class) and narrower in scope

28

(limited to Plaintiffs’ endless chain scheme claims and excluding Plaintiffs’ claims for common law
{00020372.DOC ; 1}

Exhibit I
Page 7 of 28

6.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 86 of 106 Page ID
#:3834
1

fraud and the California Seller Assisted Marketing Plan law); (2) substantial risks existed both with

2

respect to establishing liability and proving damages, especially in light of the difficulty of proving

3

that a publicly held, multinational corporation with over two billion dollars in annual sales was

4
engaged in an illegal endless chain scheme; (3) key elements of Plaintiffs’ claims would be the

6

subject of expert testimony, leading to an expensive “battle of the experts”; (4) substantial risks

7

existed as to the collectability of any judgment against the non-Herbalife defendants, and Herbalife

8

would (and did) argue that the non-Herbalife defendants were the primary malefactors, and

9
10

vigorously dispute that it was in any way responsible or liable for the conduct of the non-Herbalife
defendants.

11
Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

5

12

23.

We accepted these and other risks, diligently and vigorously prosecuted the litigation

13

and obtained this Settlement because of our effort, skill and reputations. This Settlement is entirely

14

the result of Plaintiffs’ and Plaintiffs’ Counsel’s hard work and diligence: no other Class Members

15

or attorneys were both willing and able to accept the risk of this litigation. This is not a case where

16

the outcome was so certain and the potential recovery so high that the Court was faced with a

17
number of Plaintiffs’ law firms vying to be appointed “lead counsel.”
18
19

24.

Gilman and Pastor LLP maintained contemporaneous records of the time spent on

20

this litigation and I am advised that the other Plaintiffs’ Counsel did as well. The detailed time

21

records, which contain references to matters which are privileged or subject to the work product

22

doctrine, are available for submission to the Court in camera if the Court deems it appropriate. A

23

summary of the time spent and hourly rates of each attorney or paralegal who worked on the case in

24
25
26
27

Gilman and Pastor LLP through September 24, 2009 is submitted herewith as Exhibit C. Similar
summaries are being submitted for the other Plaintiffs’ Counsel. Kralowec Decl., Exhibit A;
Manchur Decl., Exhibit A. The aggregate lodestar of the three firms is $1,795,365.50. This amount

28
{00020372.DOC ; 1}

Exhibit I
Page 8 of 28

7.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 87 of 106 Page ID
#:3835
1

does not include time spent preparing for and appearing at the final approval hearing, nor does it

2

include time that we anticipate will be spent in connection with claims administration.

3

25.

The net fee requested of $612,500 represents a fractional multiplier of 0.34 —

4
5
6

and the absence of any objections by the class, a fee award equivalent to one third of counsel’s

7

lodestar is prima facie reasonable and should be approved.

8
9
10

26.

A summary of the expenses incurred by Gilman and Pastor LLP is submitted

herewith as Exhibit D. Similar summaries are being submitted for the other Plaintiffs’ Counsel.
Kralowec Decl., Exhibit B; Manchur Decl., Exhibit B. These expenses include: (1) photocopying;

11
Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

approximately one third — of Plaintiffs’ counsel’s lodestar. Given the excellent results achieved

12

(2) overnight delivery and postage; (3) expert fees; (4) travel related expenses; (5) telephone and

13

facsimile charges; (6) filing fees; (7) deposition fees; (8) online research expenses; and (9)

14

messenger/courier expenses. These costs are of the type we typically bill to paying clients. As

15

appears from the referenced exhibits, Plaintiffs’ Counsel have incurred an aggregate of $62,048.18

16

in expenses to date. These expenses were reasonably and necessarily incurred in the prosecution of

17
this action, and should be approved. As with the time records, detailed records of these expenses are
18
19

available for submission to the Court in camera if necessary.

20

Incentive Awards

21

27.

22
23

We also seek approval of award incentive payments of $5,000 to each of the named

plaintiffs, to reflect their crucial roles in representing the class and providing invaluable assistance to
Plaintiffs’ Counsel in prosecuting this action. The requested incentive awards are reasonable given

24
25
26
27
28

the named plaintiffs’ substantial services on behalf of the Class and the policy of encouraging
people to come forward to litigate meritorious claims on behalf of their fellow consumers.
28.

Plaintiffs Minton and Adams served as putative representatives of the proposed

nationwide class from February of 2005 until this Court’s order of January 24, 2008, which
{00020372.DOC ; 1}

Exhibit I
Page 9 of 28

8.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 88 of 106 Page ID
#:3836
1

conditionally certified California-only classes. They continued to actively consult with Plaintiffs’

2

Counsel concerning the prosecution and settlement of this case following that order. Following this

3

Court’s January 24, 2008 Order, Plaintiffs Duniven and Quinne served as representatives of the

4
certified California classes. All of the named plaintiffs performed substantial services as class

6

representatives, including responding to voluminous document requests and interrogatories and

7

testifying at their respective depositions, each of which lasted a day or more.3 All of them have

8

remained in regular communication with Plaintiffs’ Counsel to keep themselves apprised of the

9
10

status of the case and they have provided information and comments to Plaintiffs’ Counsel about the
defendants, potential witnesses and the operation of the Herbalife system. In particular, Plaintffs

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Three Embarcadero Center, Suite 1650
San Francisco, CA 94111
(415) 788-4220

S CHUBERT J ONCKHEER K OLBE & K RALOWEC LLP

5

12

Minton and Adams spent many hours consulting with Plaintiffs’ Counsel both before these cases

13

were filed and during the pendency of the litigation concerning many factual and operational aspects

14

of the Herbalife marketing plan and the Vertical Skip Marketing and Freedom Group lead

15

generation systems. Plaintiffs Duniven and Quinne stepped forward to serve as California class

16

representatives at a time when the defendants were aggressively defending the case, and spent many

17
hours communicating with Plaintiffs’ Counsel, providing a great deal of input into our continued
18
19
20

prosecution of the case and ultimate settlement. This is not a case where the class representatives
were mere figureheads, lending their names to the litigation. All four named plaintiffs took active

21
22
3

23
24
25
26
27
28

It should be noted that due to the nature of this case, which involved small business
“distributorships”, the scope and volume of documents which the named Plaintiffs were required to
produce were much great than typically called for in class actions. Among other things Plaintiffs
had to produce marketing materials, substantial quantities of correspondence, receipts and invoices
for business expenses and transactions of Herbalife products and sales aids, as well as tax forms and
records. Plaintiff Minton produced 7,362 pages of documents, Adams produced 683 pages, Quinne
produced 7,550 pages and Duniven produced 450 pages. All of the Plaintiffs had to undergo
detailed searches for relevant documents and emails on their personal computers. In addition to the
time actually spent testifying at their depositions, each of the Plaintiffs spent many hours with
Plaintiffs’ counsel preparing for what was expected to be, and which actually was, very grueling
questioning by Defendants’ counsel.
{00020372.DOC ; 1}

Exhibit I
Page 10 of 28

9.

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 89 of 106 Page ID
#:3837

Exhibit I
Page 11 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 90 of 106 Page ID
#:3838

EXHIBIT A
Exhibit I
Page 12 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 91 of 106 Page ID
#:3839

Exhibit I
Page 13 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 92 of 106 Page ID
#:3840

EXHIBIT B
Exhibit I
Page 14 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 93 of 106 Page ID
#:3841

EXHIBIT B

GILMAN AND PASTOR, LLP
FIRM RESUME
GILMAN AND PASTOR, LLP is a law firm which concentrates in class action litigation on
behalf of investors, consumers and small businesses. The firm has broad experience in the areas
of securities, consumer protection, products liability, antitrust and other types of complex
litigation. The firm litigates cases throughout the country, including both federal and state
courts. Many of the firm's cases have involved complex multi-district litigation, including
appearances before the Judicial Panel on Multi District Litigation. The attorneys in the firm are
experienced in, and thoroughly familiar with, all aspects of class action litigation, including the
underlying substantive law, the procedures recommended in the Manual for Complex Litigation,
and the substance and procedure of class certification. The firm has recovered hundreds of
millions of dollars for the clients it has represented.
REPRESENTATIVE CASES BY AREA OF PRACTICE
Consumer Protection and Antitrust
The firm is actively involved in litigation involving price-fixing and other anti-competitive
conduct, deceptive sales practices, and unfair and deceptive trade practices.
In In re Carbon Fibers Antitrust Litigation, No. 02-2385A (Middlesex Superior Court, Mass.)
Gilman and Pastor served as Lead Class Counsel in the antitrust suit alleging a price-fixing
conspiracy by the manufacturers of carbon fiber. After extensive litigation, the firm reached
settlements totaling in excess of $2.7 million on behalf of a class of Massachusetts end-users of
carbon fiber products.
Gilman and Pastor, LLP has been appointed by the Trial Court in the consolidated Massachusetts
Indirect Purchaser Actions. The firm was also appointed by the District Court to the Indirect
Purchaser Plaintiffs’ Executive Committee in In re Dynamic Random Access Memory (DRAM)
Antitrust Litigation, No. M 02-1486 (N.D. Cal.) and is currently litigating the case on behalf of
indirect purchasers nationwide.
In In re Microsoft Massachusetts Consumer Protection Litigation, No. 00-2456 (Middlesex
Superior Court), Gilman and Pastor, LLP was co-lead counsel and obtained a settlement valued
at $34 million, which was approved by the Court.
Gilman and Pastor, LLP served as sole Class Counsel in Fortin v. Ajinomoto, et al, (Civil Action
No. 02-2345C, Middlesex Superior Court, Mass.), and obtained class settlements totaling $8.2
million.

{00020285.DOC ; 1}

Exhibit I
Page 15 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 94 of 106 Page ID
#:3842

Gilman and Pastor, LLP served as a member of the Plaintiffs Steering Committee in Ciardi v. F.
Hoffman-LaRoche, Ltd., et al., (Civil Action No. 99-03244, Middlesex Superior Court, Mass.), a
case that created new law in Massachusetts conferring standing upon indirect purchasers for
claims arising from price-fixing or other anti-competitive conduct. Settlement funds valued at
over $22.5 million were obtained and distributed to over 300 charitable organizations providing
food and nutrition programs in Massachusetts.
Gilman and Pastor, LLP served as sole counsel in Boos v. Abbott Laboratories, No. 95-10091
(D.Mass.), which was the first case in which indirect purchasers in Massachusetts ever recovered
damages arising from a price-fixing conspiracy. The case was settled in 1997 for $2.5 million.
Gilman and Pastor, LLP served as lead counsel in Muccioli v. Sony Computer Entertainment
America, Inc., No. 413148 (San Mateo Cty. California Superior Court) and obtained a substantial
nationwide class settlement that provided free service and repairs during an extended warranty
period and partial refunds of past repair costs to purchasers of Sony Playstation Models 1001 and
5501 in an action arising out of alleged product defects, breaches of warranty, and deceptive
trade practices.
The firm was lead counsel in Hardy v. Sears Roebuck & Co., Civil Action No. 98-CH-06305
(Cook County, Illinois) obtaining a nationwide class settlement which provided warranty repairs
to consumers who purchased home improvement services from Sears and its authorized
contractors.
The firm was a member of the Plaintiffs' Counsels' Steering Committee in In re High Fructose
Corn Syrup Antitrust Litigation, MDL No. 1083, (C.D. Ill.), an antitrust suit alleging a price
fixing conspiracy on the part of manufacturers of high fructose corn syrup. As a member of the
Steering Committee, the firm litigated the case for over five years. That case has now resulted in
settlements totaling approximately $500 million.
Gilman and Pastor, LLP served as sole counsel for the class in Anslono v. Thorn Americas, Inc.
(Civil Action No. 98-0049, Suffolk Superior Court Department, Mass.), and obtained a class
settlement of claims for false advertising of “rent to own” contracts.
In In re Packard Bell Consumer Class Action Litigation, No. BC 125671 (California Superior
Court), Gilman and Pastor, LLP served as counsel and obtained a substantial settlement for
purchasers of “reconditioned” personal computer systems which were falsely advertised as
“new.”
In In re Miracle Ear Consumer Litigation, No. 94-1696 (Dist. Ct. Minn.), Gilman and Pastor,
LLP served as counsel and obtained a substantial settlement for purchasers of hearing aids which
had been falsely advertised.

{00020285.DOC ; 1}

Exhibit I
Page 16 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 95 of 106 Page ID
#:3843

Gilman and Pastor, LLP has been actively involved in litigation arising from life insurance sales
practices, including Michaels v. Phoenix Home Life Mutual Insurance Company, Index No.
5318-95 (NY.Sup.Ct., Albany County), 1997 N.Y.Misc. LEXIS 171 (1996) (approving class
settlement); Natal v. Transamerica Occidental Life Insurance Company, Index No. 694829
(CA.Sup.Ct., San Diego County, 1997) (approving class settlement); In re: Manufacturers Life
Insurance Company Premium Litigation, MDL No. 1109 (S.D.Cal.) (substantial settlement for
class); In re: Sun Life Assurance Company of Canada Insurance Litigation, MDL No. 1102
(D.N.J.) (substantial settlement for class); In re: New England Mutual Life Insurance Company
Sales Practices Litigation, MDL No. 1105 (D.Mass.) (court appointed Gilman and Pastor, LLP as
liaison counsel in MDL proceeding; court subsequently approved substantial class settlement);
Duhaine v. John Hancock Mutual Life Insurance Company (Civil Action No. 96-10706-GAO,
D.Mass.) (substantial class settlement).
Gilman and Pastor, LLP has developed unique expertise in litigation involving pyramid
marketing schemes, including obtaining significant decisions in Webster v. Omnitrition, 79 F.3d
776, 782 (9th Cir. 1996) (holding that multi-level marketing firm could be found to be a pyramid
scheme and an investment security where there was no evidence that it actually enforced “antipyramid” requirements; class settlement approved following successful appeal by Gilman and
Pastor); Capone v. Nu Skin Canada, Inc. (Case No. 93-C-2855, D.Utah) (Gilman and Pastor
obtained court approval of settlement of class claims against multi-level marketing firm after
successfully opposing multiple motions to dismiss and for summary judgment and after
extensive discovery); Rhodes v. Consumers' Buyline, Inc., 868 F.Supp. 368 (D.Mass. 1993)
(case settled after Gilman and Pastor obtained court ruling that contractual arbitration clause was
unenforceable because distributorship agreement violated public policies against pyramid
marketing schemes); Jacobs v. Herbalife International, Inc. (Case No. CV 02-1431, C.D.Cal.)
(Gilman and Pastor served as co-lead counsel in class action involving “Newest Way to Wealth,”
a purported lead generation system for Herbalife distributors; court approved $6 million
nationwide class settlement).
Defective Products
Gilman and Pastor, LLP is actively involved in litigation involving defective products, including
defective building products, pharmaceutical products, motor vehicles, electronics and other
products.
In In re Shake Roof Cases, Judicial Council Coordination Proceeding No. 4208, (Contra Costa
Cty, California Superior Court), the Court granted final approval to a $61,420,000 partial
settlement fund for owner’s of properties on which certain manufactured cement composite
roofing products were installed. Gilman and Pastor, LLP was one of four firms that represented
the class members. After extensive litigation on all fronts, the case was partially settled during
trial against certain defendants for over $61 million dollars.

{00020285.DOC ; 1}

Exhibit I
Page 17 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 96 of 106 Page ID
#:3844

In Sebago, Inc., et al. v. Beazer East, Inc., et al., No. 96-10069 (D. Mass.), Gilman and Pastor,
LLP served as lead class counsel in a suit on behalf of owners of buildings with corrosive
phenolic foam roof insulation. The litigation was extremely contentious, involved numerous
potentially dispositive motions, discovery motions and extensive class certification proceedings.
The defendants ultimately produced hundreds of thousands of documents as well as hundreds of
depositions. To prepare for hearings on class certification, summary judgment and trial, Gilman
and Pastor marshaled testimony from experts in a variety of disciplines, including roof
engineering, structural engineering, materials science and corrosion, and financial analysis. The
firm obtained a significant decision upholding RICO claims against the manufacturers. See
Sebago, Inc. v. Beazer East, Inc., 18 F. Supp. 2d 70 (D.Mass. 1998). The Court recently
approved nationwide class settlements with the two manufacturers of the phenolic foam
insulation, worth a combined estimated present value of more than $240 million.
In Coleman, et al. v. GAF Building Materials Corporation, No. CV-96-0954-GALANOS (Circuit
Court of Mobile County, Alabama), Gilman and Pastor, LLP served as lead counsel for a
nationwide class of persons who owned properties with defective roofing shingles. The firm
recently obtained a settlement with benefits estimated at a present value in excess of $75 million.
In Paradis v. Bird Incorporated, No. 00-C-0235 (Merrimack, N.H. Superior Court), Gilman and
Pastor, LLP served as lead counsel on behalf of purchasers of Bird defective roofing shingles.
The settlement obtained was valued at approximately $9.6 million.
Other cases handled by the firm involving defective building products include Foster v. ABTco,
Inc. (Civil Action No. CV95-151-M, Choctaw County, Alabama) (defective hardboard siding;
nationwide class certified and class settlement approved); In re Louisiana-Pacific Corporation
Inner-Seal OSB Trade Practices Litigation, (Master File No. C-95-3178-VRW, N.D.Cal.)
(defective oriented strand board (OSB); nationwide class certified and settlement approved).
Securities
The firm is actively involved in litigation on behalf of defrauded individual and institutional
investors in both class action and shareholder derivative litigation.
In In re Transkaryotic Therapies, Inc. Securities Litigation, No. 03-10165-RWZ (D. Mass.),
Gilman and Pastor is one of the firms representing the lead plaintiff in a securities fraud case
involving the company’s misrepresentations about correspondence from the FDA with respect to
prospects for approval of one of the company’s key products. The court has denied the
defendants’ motion to dismiss, and the case is now in the discovery phase.
In Brumbaugh v. Wave Systems Corporation, No. 04-30022-MAP (D. Mass.), the firm
represents the court-appointed lead plaintiffs. This is a securities case arising out of the
company’s misrepresentations and omissions concerning two purported license agreements with
major corporations for the company’s digital security products.
The firm served as Co-Lead Counsel in In re Blech Securities Litigation, 94-CIV-7696-RWS
(S.D. N.Y.) asserting market manipulation claims against the brokerage firm of D. Blech & Co.,
{00020285.DOC ; 1}

Exhibit I
Page 18 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 97 of 106 Page ID
#:3845

its principals, its clearing broker, and several other alleged participants in connection with an
alleged scheme to inflate the prices of various biotechnology securities. In a vigorously litigated
case, the firm and its co-counsel obtained certification of a class of purchasers of 22 separate
securities, successfully opposed various motions to dismiss, and, subsequently, motions for
summary judgment, and after extensive discovery and trial preparation, negotiated over $15
million in cash settlements on behalf of the class. This case resulted in several reported opinions,
including one that has been frequently cited and referred to by commentators on the issue of
clearing broker liability. In re Blech Securities Litigation, 961 F. Supp. 569 (S.D. N.Y. 1997).
Gilman and Pastor, LLP served as Co-Lead Counsel in Hynes v. The Enstar Group, Inc., et al.
90-C-1204-N (M.D. Alabama). In the face of substantial risks of an unsuccessful outcome due
to the bankruptcy (and consequent immunity from suit) of Enstar and the bankruptcy of Enstar's
chairman who was the chief architect of the fraud, Gilman and Pastor, LLP aggressively litigated
the case on behalf of the Class and obtained settlements totaling in excess of $19 million from
several defendants, including a major accounting firm, a major law firm, and former outside
directors after the conclusion of extensive discovery and immediately prior to the scheduled trial.
Subsequently, Gilman and Pastor, LLP won an additional $4.1 million for the class in collateral
litigation against Michael Milken and related entities.
The firm was Co-Lead Counsel in Cooper v. Kana, et al. Civil Action No. 3:98-CV-2804-M
(N.D. Texas) on behalf of purchasers of CPS Systems, Inc. (“CPS”) stock in connection with its
$8.74 million initial public offering (“IPO”) and trading on the American Stock Exchange
thereafter, against CPS, its officers and directors, the underwriters for its IPO, and CPS’s
independent auditors, alleging misstatements in the IPO Prospectus and subsequent press
releases and SEC filings concerning CPS’s revenue recognition methods and reported revenues
and earnings. After CPS restated its earnings and filed bankruptcy, the firm and its co-counsel
obtained class certification, defeated various motions to dismiss, conducted discovery, engaged
in two separate mediations, and ultimately recovered $3.44 million in cash settlements on behalf
of the class against the remaining defendants.
The firm served as Co-Lead Counsel in Lynn v. Infinity Investors Limited, et al. 3:97-CV-226
(E.D. Tenn.), a case asserting claims for open market securities fraud and for breach of contract
arising out of an alleged complex scheme to evade the requirements of Regulation S of the
Securities Act of 1933 and to manipulate the market prices of United Petroleum Corporation
(“UPET”) stock. The firm obtained class certification, successfully objected to UPET’s
bankruptcy plan in another jurisdiction that would have otherwise dismissed the action with
prejudice, and overcame other significant obstacles in a vigorously litigated case to ultimately
obtain a $4 million cash settlement, recovering a very substantial portion of actual losses claimed
by class members.

{00020285.DOC ; 1}

Exhibit I
Page 19 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 98 of 106 Page ID
#:3846

Gilman and Pastor, LLP served as Co-Lead Counsel in In re Hallwood Energy Partners L.P.
Securities Litigation, 90-Civ-1555-JFK (S.D.N.Y.) in which a $9.1 million settlement was
obtained after five years of intensive litigation. This class action arose out of a complex merger
and exchange offer transaction involving several publicly traded oil and gas limited partnership
entities. The litigation challenged the fairness of the exchange and involved highly complex oil
and gas valuations and methodologies. Gilman and Pastor, LLP effectively managed the
litigation and diligently prosecuted the case on behalf of a Class of approximately forty thousand
unitholders.
Gilman and Pastor, LLP served as Co-Lead Counsel in Caven v. Miller, et al. No. H-96-CV3464 (EW) (S.D. Tex.), a shareholder derivative action arising out of the merger of a publicly
held hospital company with and into a firm in the same industry that had been privately held.
After the merger, the successor firm downwardly restated its financial results due to its own
previously undisclosed accounting irregularities and losses. After defeating motions to dismiss
on various grounds, conducting discovery, and engaging in mediations, Plaintiffs recovered over
$18 million in benefits on behalf of the successor company from various insiders of both
companies involved.
The firm served as one of four co-lead counsel representing a class of securities purchasers in In
re Immunex Securities Litigation, No. C92-548 (W.D. Wash.), and obtained a settlement of $14
million.
The firm served as one of three co-lead counsel representing a class of limited partners in In re
Oxford Tax Exempt Fund Securities Litigation, No. 95-3643 (D. Md.), a case asserting federal
securities and related common law claims arising out of a complex partnership restructuring
transaction, and obtained a settlement valued in excess of $11 million.
Gilman and Pastor, LLP served as lead counsel in Sullivan, et al. v. Shearson California
Radisson Plaza Partners, Limited Partnership, et al., No. 89-5472-JMI (C.D. Cal.), a case arising
out of a publicly offered limited partnership wherein claims under the 1934 Exchange Act and
the 1933 Securities Act were asserted on behalf of the investors. The case involved complex
issues of hotel appraisal and valuation, and resulted in a settlement valued in excess of $11
million on behalf of the class.
In Hartley v. Stamford Towers Limited Partnership, et al., No. C-90-2146-JPV (N.D. Cal.),
another action arising out of a public limited partnership offering, the firm served as co-lead
counsel for the investor class and obtained a settlement of $6.5 million. In that litigation the
plaintiffs engaged in extensive discovery and negotiations and consultation with real estate
valuation experts, in the face of several challenging obstacles.
The firm served as co-lead counsel representing a class of more than 4,000 investors in a series
of oil and gas drilling programs in the Woodlands Energy and Development Corporation/
Intercomex Financial Corp. Litigation (encompassing several related civil actions in various
federal and state courts in Texas and California). That litigation involved complicated securities
issues, as well as certain novel insurance liability questions, and was also contested vigorously
by the defendants with respect to every aspect of the case. In that case, plaintiffs' counsel
overcame several rounds of briefing on motions to dismiss the pleadings and a vigorous
opposition to class certification. Counsel then engaged in a long series of merits discovery, and
Exhibit I
{00020285.DOC ; 1}
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#:3847

eventually took part in intense negotiations that led to several partial settlements. Ultimately,
Gilman and Pastor, LLP, together with their co-counsel, recovered in excess of $11 million for
investors.
The firm was one of four firms actively involved in Alert Income Partners Securities Litigation,
No. 92-2-9150 (D. Colo.) a securities class action brought against promoters of a series of
limited partnerships, their auditors and other parties. After extensive discovery, a settlement was
reached valued at $60 million.
Gilman and Pastor, LLP, as lead class counsel, achieved a successful settlement in the case of
Hutson, et al. v. Merrill Lynch, Pierce, Fenner & Smith, et al., No. 89 Civ. 8358 (L.M.M.)
(S.D.N.Y.). That case, which arose out of the offering of limited partnership interests, involved
mortgage revenue bonds issued by many state and local government agencies which were
secured by participating non-recourse mortgage loans on fourteen apartment projects and
retirement communities. As lead counsel, Gilman and Pastor, LLP was responsible for and
managed all aspects of the complex litigation which also involved the subject areas of real estate
financing and valuation, secured lending and foreclosure. In addition, because the case involved
a 1985 offering, there were serious statute of limitations questions facing plaintiffs and plaintiffs’
counsel. Despite these momentous problems, the firm obtained a settlement valued at $14
million for the class. Judge McKenna, in approving the settlement, praised plaintiffs' counsel for
their efficient work.
Gilman and Pastor, LLP was one of five firms actively involved in the In re Granada Partnership
Securities Litigation, MDL No. 837 (S.D. Tex.), in which a partial settlement in excess of $14
million was reached with certain of the defendants. This was an extremely contentious lawsuit in
which every procedural step was a pitched battle. After protracted litigation with extensive
motion practice, the partial settlement was reached, which accounted for virtually all of the
available financial resources of the settling defendants.
Other examples of the firm's litigation ability are the dual settlements achieved in the related
cases styled In re Permian Partners, L.P. Securities Litigation, No. 11373 (Del. Ch. Ct.) and
Rodgers v. National Intergroup, Inc., et al. No. 90-11653-Z (D. Mass.). Gilman and Pastor, LLP
was designated as lead counsel and directed and participated in every aspect of the cases. The
first settlement, valued at $6.1 million, plus non-monetary benefits, arose out of an action in the
Delaware Chancery Court challenging a merger of limited partnership interests. Gilman and
Pastor, LLP conducted extensive discovery in that litigation, most of which was done on an
expedited basis, and consulted with experts, including authorities on oil and gas. The litigation
involved many complex issues, including issues relating to the valuation of interstate and
intrastate pipeline assets. The settlement was reached after the conclusion of expedited
discovery and prior to a hearing on our motion for preliminary injunction. The second settlement
successfully concluded litigation in the U.S District Court in Massachusetts arising out of the
1987 public offering of the partnership interests which later became the subject of the merger
proposal.

{00020285.DOC ; 1}

Exhibit I
Page 21 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 100 of 106 Page ID
#:3848

Gilman and Pastor, LLP has also played a major role in significant litigation challenging limited
partnership roll-ups, restructurings, exchanges and mergers, including the Hallwood Energy,
Oxford and Permian cases described above, Adam et al. v. Berkshire Realty Corporation, No.
90-12864 WF (D. Mass), where the firm served as co-lead counsel and achieved a settlement
consisting of cash and warrants valued at $7.5 million, In re Equitec Rollup Litigation, Master
File No. C-90-2064 (N.D. Cal); Laurence v. Brewer, No. 97-15464 (Del. Ch. Ct.), where the firm
served as co-lead counsel (challenging a tender offer by general partners for publicly traded
master limited partnership, and obtaining settlement with establishment of dividend payments to
limited partners); LLOV Partners v. INCO Limited, No. 00-4999 (NHP) (D.N.J.) (challenging
tender offer by parent company for tracking stock of subsidiary); and Rosenblum v. Equis
Financial Group, No. 98-8030 (S.D. Fla.) (class and derivative settlements on behalf of three
subclasses).
Gilman and Pastor, LLP has also been actively involved in numerous other class actions arising
under the federal securities laws, including In re Painewebber Inc. Limited Partnership
Litigation, No. 94-CV-8547 (S.D.N.Y.); In re The One Bancorp Securities Litigation, No. 890315-P (D. Me.); In re VMS Securities Litigation, No. 89C 9448 (N.D. Ill.); In re Shearson
Union Square Associates Securities Litigation, (Del. Ch. Ct.); In re Software Publishing
Securities Litigation, C-93-20246 (N.D. Cal.); In re Prudential-Bache Energy Income
Partnerships Litigation, MDL No. 888 (E.D. LA); In Re: T2 Medical Inc. Shareholder Litigation,
92-CIV-1564 (N.D. Ga.); In re Interneuron Pharmaceuticals Securities Litigation; 97-12254 (D.
Mass.); In re UDC Homes Securities Litigation, 95-08941 (Maricopa County, AZ Superior Ct.);
and In re Towers Financial Securities Litigation, 93-0810 (S.D.N.Y.).
ATTORNEYS
KENNETH GILMAN is a graduate of Suffolk University Law School (J.D., 1979) and Boston
University (B.A.,1976). Mr. Gilman is a member of the bars of the Commonwealth of
Massachusetts, the State of Florida, the U.S. District Court for the District of Massachusetts and
the U.S. District Court for the Southern District of Florida. He is a member of the Massachusetts
Bar Association, the Florida Bar and the American Bar Association. Mr. Gilman has served, and
currently serves as lead or co-counsel in various types of complex litigation, including cases in
the areas of antitrust, consumer protection, insurance, dangerous and defective products,
environmental law, personal injury and securities fraud.
Representative cases which have produced significant legal developments, include: Sebago, Inc.,
et. al. v. Beazer East, Inc., et. al., No. 96-10069- Wolf (D. Mass.) (Nationwide Class Settlements
with two manufacturers of phenolic insulation with a value in excess of $240 million; 18
F.Supp.2d 70 (D.Mass. 1998); Coleman, et. al. v. GAF Building Materials Corporation, No. CV96-0954-Galanos (Circuit Court of Mobile County, Alabama) (Nationwide class of persons who
owned properties with GAF defective roofing shingles with settlement value in excess of $75
million); In re: Louisiana-Pacific Corporation Inner-Seal OSB Trade Practices Litigation; Ciardi
v. F. Hoffman-LaRoche Ltd, et. al.,(Civil Action No. 99-03244, Middlesex Superior Court
Department Mass.), (a case that created new law in Massachusetts conferring standing upon
indirect purchasers for claims of price-fixing or other anti-competitive conduct. Settlement funds
obtained of over $22.5 million); Michaels v. Phoenix Home Life Mutual Insurance Company,
Index No. 5318-95 (N.Y.Sup.Ct. Albany County) 1997 N.Y. misc. LEXIS 171 (1996); Agnes v.
Exhibit I
{00020285.DOC ; 1}
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Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 101 of 106 Page ID
#:3849

The Enstar Group, Inc., et. al., 90-C-1204-N (M.D. Alabama)(Settlement obtained of over $23
million); In re Hallwod Energy Partners L.P. Securities Litigation, 90-Civ-1555-JFK
(S.D.N.Y.)(In which a $9.1 million settlement was obtained after five years of intensive litigation
arising out of a complex oil and gas merger; Sullivan, et. al. v. Shearson California Radison
Plaza Partners Limited Partnership, et. al., No. 89-5472 (C.D.Cal.)(Securities fraud action
resulting in settlement in excess of $11 million); and Alert Income Partners Securities Litigation,
No. 92-2-9150(D.Colo.)(Securities fraud action resulting in settlement valued at $60 million).
Mr. Gilman was previously associated with Gilman, McLaughlin and Hanrahan in Boston,
Massachusetts and with the firm of Blackwell, Walker, Gray, Powers, Flick and Hoehl in Miami,
Florida. In 1985, Mr. Gilman was appointed by the United States District Court for the Southern
District of Florida as the Equity Receiver in the Intercontinental Commodities litigation. During
the period from 1980 through 1984, he participated as counsel to the Equity Receiver in the
Lloyd Carr and Company commodities fraud litigation. In that capacity, he prosecuted complex
litigation in Federal and state courts in Massachusetts and Florida, resulting in significant
recoveries for defrauded investors. Also as part of this litigation, Mr. Gilman acted as special
counsel for the Department of Justice.
DAVID PASTOR is a 1979 graduate of Boston University School of Law and a 1976 graduate of
Haverford College. During law school, Mr. Pastor clerked for two Wisconsin state court judges.
Mr. Pastor is a member of the bar of the Commonwealth of Massachusetts, the U.S. District
Court for the District of Massachusetts and the U.S. Court of Appeals for the First Circuit. He is
a member of the Massachusetts Bar Association, the American Bar Association and the
Association of Trial Lawyers of America. Mr. Pastor has served, and currently serves as class
counsel in numerous class actions in various state and federal courts and has substantial
experience in various types of complex class action litigation, including cases involving
securities fraud and market manipulation, privacy rights, antitrust misconduct, consumer
protection claims and defective products. Certain of Mr. Pastor's cases have produced significant
legal developments, including In re Blech Securities Litigation, 961 F. Supp. 569 (S.D.N.Y.
1997) and 2002 WL 31356498 (S.D.N.Y. Oct. 17, 2002)(liability of a clearing broker as a
primary violator for a scheme initiated by one of the clearing broker's correspondent brokerdealers) and Weld v. Glaxo Wellcome, Inc., 434 Mass. 81, 746 N.E.2d 522 (2001)(certification
of class action against several defendants engaged in parallel conduct where certain defendants
had no contact with the plaintiff and engaged in no conduct which directly affected the plaintiff).
JOHN C. MARTLAND is a 1978 graduate of Suffolk University Law School (J.D.) and received
a Bachelor of Arts degree from Colby College in 1972. Mr. Martland was previously associated
with the Law Offices of Harold Brown in Boston, Massachusetts, where he was the senior trial
attorney and with the firm of Ring and Rudnick, also located in Boston. Mr. Martland has had
experience in a wide variety of complex civil litigation and been trial counsel in complex civil
actions in state and federal courts throughout the United States. He has served as counsel in
complex business litigation in state courts in Massachusetts, New Hampshire and Maine. He has
represented franchisees in arbitration proceedings before the American Arbitration Association
in Massachusetts, North Carolina, Illinois and New Jersey. He is a member of the bar of the
Supreme Judicial Court of Massachusetts, the U.S. District Court for the District of
Massachusetts, the U.S. Court of Appeals for the First Circuit, and the Supreme Court of the
United States of America. He is a member of the Massachusetts Bar Association and theExhibit I
{00020285.DOC ; 1}

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#:3850

American Bar Association and is a member of the ABA Antitrust Section. Mr. Martland was a
speaker at the 1998 Annual Forum on Franchising of the American Bar Association, where he
delivered a paper entitled "Mediation: An In-Depth Analysis of the Process and the Techniques the Franchisee Perspective" and has been a frequent speaker at the annual conventions of the
American Franchisee Association and the American Association of Franchisees and Dealers on
franchise law topics.
DOUGLAS M. BROOKS is a 1982 graduate of Suffolk University Law School (J.D.) and
received a Bachelor of Arts degree from Northwestern University in 1979. He was a Note Editor
for the Suffolk University Transnational Law Journal in 1981-1982. Mr. Brooks was previously
associated with the Law Offices of Harold Brown in Boston, Massachusetts. Mr. Brooks has
litigated a wide variety of civil cases, including matters involving franchising, dealer and
distribution, as well as securities actions. He is a member of the bar of the Commonwealth of
Massachusetts, the U.S. District Court for the District of Massachusetts, and the U.S. Court of
Appeals for the First Circuit. He is a member of the Massachusetts Bar Association and a
member of the Forum on Franchising and Litigation Section of the American Bar Association.
Mr. Brooks was a speaker at the 1995 Annual Forum on Franchising of the American Bar
Association, where he delivered a paper entitled "Survey Evidence - Use of Collected Data in
Encroachment Cases" and has been a frequent speaker at the annual conventions of the American
Association of Franchisees and Dealers and the American Franchisee Association. Significant
trials and appeals handled by Mr. Brooks include NXIVM Corp. v. Ross Institute, 364 F.3d 471
(2nd Cir.), cert. den. 543 U.S. 1000 (2004) (affirming denial of preliminary injunction against
non-profit anti-cult organization in lawsuit alleging Copyright and Lanham Act violations; Mr.
Brooks is representing the defendant pro bono); Wolinetz v. Berkshire Life Insurance Co., 361
F.3d 44 (1st Cir. 2004) (reversing summary judgment in “vanishing premium” case based on
statute of limitations); In re: America Online, Inc., 168 F.Supp.2d 1359 (S.D.Fla. 2001) (denying
summary judgment); Scheck v. Burger King Corp., 756 F.Supp. 543 (S.D.Fla. 1991) (denying
summary judgment in franchise encroachment litigation), further opinion, 798 F.Supp. 692
(S.D.Fla. 1992); Rhodes v. Consumers’ Buyline, Inc., 668 F.Supp. 368 (D.Mass. 1993) (denying
motion to compel arbitration in pyramid scheme case); Szymanski v. Boston Mutual Life Ins.
Co., 56 Mass.App. 367 (2002), rev. den., 438 Mass. 1106 (2003) (reversing summary judgment
in vanishing premium litigation); Oganesov v. GNC Franchising Inc., Bus. Franchise Guide
(CCH) ¶11,808 (Pa. Ct. Cmn. Pl., March 3, 2000) (awarding $700,000 judgment for franchisee
in encroachment litigation), aff’d, Bus. Franchise Guide (CCH) ¶12,163 (Pa.Super. 2001);
Richards v. Arteva Specialities S.A.R.L., 66 Mass.App. 726 (2006) (upholding adequacy of
statutory demand letter in antitrust indirect purchaser class action); Gentle Wind Project v.
Garvey, 2005 WL 40064 (D.Me., January 10, 2005) (Mr. Brooks obtained dismissal of
defamation claims against web site operator); Deimler v. Scheibeler (Pa.Ct.Comm.Pleas,
Dauphin Cty., Case No. 2003 CV 1405 CV (Mr. Brooks defended web site operator in
defamation case; case was settled on fourth day of jury trial with no money paid by Mr. Brooks’
client).

{00020285.DOC ; 1}

Exhibit I
Page 24 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 103 of 106 Page ID
#:3851

EXHIBIT C
Exhibit I
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#:3852

EXHIBIT C
Minton, et al. v.Herbalife International, Inc., et al
Gilman and Pastor LLP - Current Lodestar
Inception through September 24, 2009

Timekeepers

Total Hours

Current Rates

Current Lodestar

Partners
Brooks, D.M..

1280.50

$500.00

$640,250.00

35.75

$100.00

$3,575.00

Paralegals
Potkay, R

TOTALS

{00020278.DOC ; 1}

643,825.00

Exhibit I
Page 26 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 105 of 106 Page ID
#:3853

EXHIBIT D
Exhibit I
Page 27 of 28

Case 2:13-cv-02488-BRO-SH Document 130-4 Filed 04/13/15 Page 106 of 106 Page ID
#:3854

EXHIBIT D
Minton, et al. v. Herbalife International, Inc., et al
Gilman and Pastor, LLP – Expenses
Inception through September 24, 2009

Category

Amount

Computer Research and Electronic Document Retrieval
(Westlaw, Lexis File and Serve, Online Research)

$ 1,481.92

Court Reporter

$ 1,474.00

Expert/Consultants

$ 5,700.00

Photocopying

$

48.25

Telephone and Facsimile

$

234.49

Messengers/Service of Process

$

28.35

Postage, Overnight Delivery (FedEx, UPS)

$

135.47

Travel/Lodging and Travel Related Expenses

$ 5,993.31__

TOTAL:

{00020277.DOC ; 1}

$15,095.79

Exhibit I
Page 28 of 28

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 1 of 56 Page ID
#:3855

1
2
3
4
5
6
7
8

IN THE UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

10
11
12
13

DANA BOSTICK, a California
citizen, et al.,
PLAINTIFF,

14
15
16
17
18

Case No.: 2:13-cv-02488-BRO-RZ
DECLARATION OF ERIC ROBIN
RE: NOTICE PROCEDURES
Hon. Beverly Reid O’Connell

vs.
HERBALIFE INTERNATIONAL OF
AMERICA, INC., a Nevada
Corporation, et al.,

Hearing Date: May 11, 2015
Time: 1:30 p.m.
Courtroom: 14

19

DEFENDANTS.

20
21
22

I, ERIC ROBIN, declare:
1.

23

I am a Consultant at Kurtzman Carson Consultants LLC ("KCC"), located at

24

75 Rowland Way, Suite 250, Novato, California. I am over 21 years of age and am not a

25

party to this action. I have personal knowledge of the facts set forth herein and, if called

26

as a witness, could and would testify competently thereto.
2.

27
28

The purpose of this declaration is to provide the Parties and the Court with a

summary and the results of the work performed by KCC related to the Notice Procedures

3151448.1

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Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 2 of 56 Page ID
#:3856

1

for the Bostick v. Herbalife International of America, Inc. et al. settlement following the

2

Preliminary Approval.
3.

3

KCC was retained by the parties to serve as the Settlement Administrator to,

4

among other tasks, email the Notice of Class Action Settlement (the “Email Notice”) in

5

English and Spanish; mail the Postcard Notice in English and Spanish; make the Full

6

Notice and Claim Form available to Settlement Class Members (as defined in section

7

1.14 of the Stipulation of Settlement) in English and Spanish; receive and process Claim

8

Forms, Exclusions and Objections, and other Settlement Class Member inquiries; and

9

establish and maintain a settlement website and perform other duties as specified in the

10

Settlement Agreement preliminarily approved by this Court on December 2, 2014.

11

Copies of the Email Notice, Postcard Notice, Full Notice, and Claim Form are attached

12

hereto as Exhibits A through D, respectively.
4.

13

Mailed Notice and Emailed Notice. On December 12, 2014, KCC received

14

from Defendant Herbalife International of America, Inc. a computerized list of 1,533,339

15

names, postal addresses, and 1,051,342 associated valid email addresses, characterized as

16

the list of Settlement Class Members known to Defendants. The Settlement Class

17

Member List included the known contact information for persons who, during the period

18

from April 1, 2009 through September 30, 2013, had a valid agreement of distributorship

19

or membership with Herbalife.
5.

20

On or before December 19, 2014, KCC caused the addresses in the

21

Settlement Class Member List to be updated using the National Change of Address

22

system, which updates addresses for all people who had moved during the previous four

23

years and filed a change of address with the U.S. Postal Service. New addresses were

24

found for 188,158 Settlement Class Members. The Settlement Class Member List was

25

updated with these new addresses.
6.

26

Of the 1,533,339 records on the Settlement Class Member List, 1,051,342

27

had an e-mail address, 481,883 had only postal mailing addresses, and 114 had

28

incomplete or missing mailing or emailing addresses.

3151448.1

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7.

1

On December 30, 2014, KCC mailed 481,883 Postcard Notices by First

2

Class postage at the U.S. Post Office in Hackensack, New Jersey to the Settlement Class

3

Members for whom only postal mailing addresses were known.
8.

4

On December 30, 2014, KCC emailed the Email Notice to each of the

5

1,051,342 email addresses on the Settlement Class Member List. This e-mail notice

6

provided information regarding the settlement, including a link to the Settlement

7

Website, located at www.HerbalifeClassActionSettlement.com, where Settlement Class

8

Members could submit an online Claim Form. Three attempts were made to deliver the

9

Email Notice if it was initially undeliverable. As of January 8, 2015, KCC’s e-mail

10

server registered 736,556 emails (70.06%) as having been successfully delivered and

11

314,786 (29.94%) as undeliverable.
9.

12
13

On January 9, 2015, KCC mailed the Postcard Notice to the 314,711 people

whose Email Notice was undeliverable and for whom KCC had a valid physical address.
10.

14

As of April 8, 2015, KCC has received a total of 1,396 Postcard Notices

15

returned by the U.S. Postal Service with forwarding addresses. KCC caused the

16

Settlement Class Member List to be updated with the new addresses and Notice Packages

17

to be re-mailed to the Settlement Class Members at each of these new addresses. As of

18

April 8, 2015, KCC has received a 121,963 Postcard Notices returned by the U.S. Postal

19

Service without forwarding addresses. To date, KCC has conducted address searches

20

using credit and other public source databases to attempt to locate new addresses for each

21

of these Settlement Class Members. As of April 8, 2015, these searches have resulted in

22

71,294 updated addresses. KCC promptly re-mailed Postcard Notices to the updated

23

addresses.

24

11.

25

The combined email and postcard individual notice efforts are estimated to

have reached approximately 92.91% of Settlement Class Members.
12.

26

Interactive Voice Response. On December 29, 2014, KCC caused an

27

Interactive Voice Response (the “IVR”) system to be established (877-651-4185) to

28

provide information about the Settlement and to record requests for Notice Packets. As

3151448.1

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#:3858

1

of April 8, 2015, 21,291 calls have been received by the IVR. Of these callers, 3,793

2

requested either an English or Spanish Notice Packet. All Notice Packet requests have

3

been fulfilled.
13.

4

Website. On December 29, 2014, KCC also established a website

5

(www.HerbalifeClassActionSettlement.com) dedicated to this Settlement to provide

6

additional information to the Settlement Class Members and to answer frequently asked

7

questions. Visitors to the website can download the (1) English or Spanish Notice; (2)

8

English or Spanish Claim Form; (3) Settlement Agreement; and (4) Order Preliminarily

9

Approving Settlement. Visitors can also submit claims online. The web address was set

10

forth in the Email Notice, Postcard Notice, Full Notice and Claim Form. As of April 8,

11

2015, the website has received 42,728 visits.
14.

12

Requests for Exclusion. As of the date of this declaration, KCC has

13

received 687 Requests for Exclusion. A list of the individuals requesting exclusion is

14

attached hereto as Exhibit E.
15.

15

Objections to the Settlement. As of the date of this declaration, KCC has

16

received two substantive Objections to the Settlement that were both withdrawn by the

17

objecting party. On April 8, 2015, Defense Counsel informed KCC of an additional 18

18

substantive Objections to the Settlement. A list of the individuals objecting is attached

19

hereto as Exhibit F. Of the 18 objectors, the following three also filed a claim.
16.

20

Susana Perez filed a Business Opportunity claim. She claimed that her

21

Estimated Total Loss was $30,000.00. Herbalife’s records show that Ms. Perez paid

22

$103,853.39 to Herbalife for products, and, as a result, she will receive an award of

23

$30,000.
17.

24

Eric Rodensky filed a Business Opportunity claim. He claimed that his

25

Estimated Total Loss was $3,000.00. Herbalife’s records show that Mr. Rodensky paid

26

$3,977.73 to Herbalife for products, and, assuming a payout of 75%, he will receive an

27

award of $2,983.30.

28

3151448.1

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18.

1

Julio Ulloa filed a Business Opportunity claim. He claimed that his

2

Estimated Total Loss was $20,000.00. Herbalife’s records show that Mr. Ulloa paid

3

$18,792.37 to Herbalife for products, and, assuming a payout of 75%, he will receive an

4

award of $14,094.29.
19.

5
6

Claim Forms. As of the date of this declaration, 7,238 Claim Forms have

been filed by Settlement Class Members.
20.

7

Late Filed Claim Forms. On April 9, 2014, the parties agreed to reactivate

8

the website until April 30, 2015 to allow the late claimants to file a claim. The website

9

will require claimants to enter their ClaimID in order to file a claim. The following

10

language was added to the end of the claim filing component: “Because this claim has

11

been filed after the claims period, the Parties and the Settlement Administrator reserve

12

the right to audit and reject any claim that has been submitted after the claim submission

13

deadline.” As of April 9, 2014, only claims filed via the website will be considered. The

14

IVR has also been modified to include the following language: “Since the claim

15

submission deadline was February 3rd and has now passed, we are no longer mailing

16

paper copies of the Notice and Claim form to claimants. However, you can still make a

17

claim on the website at www.HerbalifeClassActionSettlement.com. If you do not have

18

access to the internet, so that your claim is processed timely, we recommend using either

19

public access to the internet at a public library or the internet of a friend or relative. If

20

you are still unable to access the internet, please contact Plaintiffs’ Counsel at (385) 202-

21

4913 for further guidance.”
21.

22

Business Opportunity Claims. There are 114 claimants who will be

23

receiving payments greater than $10,000.00. There are 324 claims who will be receiving

24

payments greater than $5,000.00. There are 1,629 claims who will be receiving

25

payments greater than $1,000.00. The average business opportunity award, assuming a

26

payout of 75%, is $1,120.09. The largest business opportunity award, assuming a payout

27

of 75%, is $98,588.36. Every claimant who could not demonstrate a loss and every

28

claimant who purchased less than $750 of products from Herbalife during the Class

3151448.1

5

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 6 of 56 Page ID
#:3860

1

Period will receive $20.00. Every claimant who purchased more than $750 in products

2

from Herbalife will receive the lesser of the full amount of the Estimated Total Loss

3

claimed or 75% of the amount paid to Herbalife for products. As of the date of this

4

declaration, assuming a payout of 75%, the aggregate amount of business opportunity

5

awards is $7,299,619.74.
22.

6

Product Return Payments. Class Members who filed Product Return

7

claims were asked to provide the Actual Purchase Price of the product being claimed if

8

known or, alternatively, the Estimated Purchase Price of the product being claimed.

9

Some Class Members provided both amounts with their claim. In such instances, KCC

10

took the lesser of these two values. As of the date of the declaration, the aggregate

11

amount claimed is $902,311.92.
23.

12

Notice to Claimants of Business Opportunity Claim Award and/or

13

Product Return Payment. On March 3, 2015 KCC provided notice to all claimants of

14

their business opportunity claim award and/or product return payments and directed any

15

Claimant who disputed the reduction of his or her claim to provide e-mail or fax copies of

16

purchase orders, invoices, copies of cancelled checks or credit card statements evidencing

17

these purchases directly from Herbalife to counsel for Plaintiffs.

18
19

I declare under penalty of perjury under the laws of the United States of America that the

20

foregoing is true and correct to the best of my knowledge and that this declaration was

21

executed this 13th day of April 2015 at Novato, California.

22
23
24

____________________________________

25

Eric Robin

26
27
28

3151448.1

6

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 7 of 56 Page ID
#:3861

Exhibit A

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 8 of 56 Page ID
#:3862
Claim #: «ClaimID»
To:
«First1» «Last1»
From: Bostick v. Herbalife Claims Administrator
Subject: Herbalife Settlement
If you were an Herbalife Distributor or Member at Any Time Between April 1, 2009
and December 2, 2014, You Could Get Benefits from a Class Action Settlement.
Records show that you are a current or former Herbalife distributor. A lawsuit was filed against
Herbalife International of America, Inc.; Herbalife International, Inc.; and Herbalife, Ltd.
(collectively, “Herbalife”) over its business model, alleging the Herbalife operates a pyramid
scheme. Herbalife denies that it did anything wrong. The Settlement includes $15 million for
cash awards, $2.5 million for product returns, and a legal commitment from Herbalife that it
will change or preserve recent changes to certain business practices. Go to
www.HerbalifeClassActionSettlement.com for more information and to file a claim online.
Who’s Included? You are in included in the Settlement if at any time between April 1, 2009,
and December 2, 2014 you had a valid agreement of distributorship or membership
with Herbalife.
What Can You Get? You may be eligible to return unused and unopened Herbalife products
(excluding International Business Packs and Mini-International Business Packs) purchased more
than one year prior to the deadline for submitting Claim Forms and may receive in exchange, the
actual amount you paid for each returned product. Even if you are unable to return products,
you may be eligible to receive a cash payment for losses on Herbalife product purchases incurred
in pursuing the Herbalife business opportunity.
How to Get Benefits? You must submit a Claim Form to get benefits. The Claim Form is
available at www.HerbalifeClassActionSettlement.com or by calling 1-877-651-4185. You can
submit a Claim Form online or by mail. The deadline to submit a Claim Form is
February 3, 2015.
Your Other Rights. If you do nothing, your rights will be affected. If you do not want to be
legally bound by the Settlement, you must exclude yourself from the Settlement. The deadline to
exclude yourself is March 24, 2015. If you do not exclude yourself you will be unable to sue
Herbalife for any claim relating to the lawsuit. If you stay in the Settlement, you may object to it
by March 24, 2015. The Court will hold a hearing on May 11, 2015, to consider whether to
approve the Settlement and award attorneys’ fees. The Plaintiffs’ attorneys anticipate seeking
attorneys’ fees of 30% of the total Settlement value in an amount not to exceed $5,250,000 and
costs of approximately $200,000 for pursuing this case. Any awarded attorneys’ fees and costs
will be paid from the Cash Settlement Fund. You can appear at the hearing, but you don’t have
to. You can hire your own attorney at your own expenses to appear or speak for you at
the hearing.
For more information or a Claim Form:
1-877-651-4185
www.HerbalifeClassActionSettlement.com

HIBNTE1

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 9 of 56 Page ID
#:3863
Reclamación #: «ClaimID»
Para:
«First1» «Last1»
De:
Administrador de reclamaciones de Bostick v. Herbalife
Asunto:
Conciliación de Herbalife
Si usted fue distribuidor o miembro de Herbalife en cualquier
momento comprendido entre el 1 de abril de 2009, y 2 de diciembre de 2014,
puede obtener beneficios de una Conciliación de demanda colectiva.
Los registros muestran que usted es o fue distribuidor de Herbalife. Se interpuso una demanda
contra Herbalife International of America, Inc.; Herbalife International, Inc.; y Herbalife, Ltd.
(en conjunto, “Herbalife”) sobre su modelo comercial, en la que se alega que Herbalife opera con
base en un esquema piramidal. Herbalife niega que haya obrado de mala forma. La Conciliación
incluye 15 millones USD por concepto de indemnizaciones en efectivo, 2,5 millones USD por
devoluciones de productos y un compromiso legal asumido por Herbalife de que cambiará o
mantendrá
los
cambios
recientes
a
ciertas
prácticas
comerciales.
Visite
www.HerbalifeClassActionSettlement.com para obtener más información y registrar una
reclamación en línea.
¿Quién está incluido? Usted está incluido en la Conciliación si en algún momento comprendido
entre el 1 de abril de 2009 y el 2 de diciembre de 2014 usted tuvo un acuerdo válido de
distribución o membrecía con Herbalife.
¿Qué puede obtener? Usted puede ser elegible para devolver productos Herbalife no usados ni
abiertos (excluidos los Paquetes Comerciales Internacionales [International Business Packs] y los
Minipaquetes Comerciales Internacionales [Mini-International Business Packs]) comprados con
más de un año de antelación a la fecha límite de presentación de formularios de reclamación y
recibir en intercambio, el monto real que usted pagó para cada producto devuelto. Incluso si
usted no está en capacidad de devolver los productos, puede ser elegible para recibir un pago en
efectivo por las pérdidas sobre las compras de productos Herbalife asumidas en la dedicación a
la oportunidad de negocio de Herbalife.
¿Cómo obtener beneficios? Debe enviar un formulario de reclamación para obtener beneficios.
Los formularios de reclamación están disponibles en www.HerbalifeClassActionSettlement.com
o puede obtenerlos llamando al 1-877-651-4185. Puede enviar su formulario de reclamación por
Internet o por correo postal. La fecha límite para presentar su formulario de reclamación es el
3 de febrero 2015.
Sus otros derechos. Incluso si elige no hacer nada, sus derechos legales se verán alterados. Si no
desea quedar vinculado legalmente por esta Conciliación, debe excluirse de la misma. La fecha
límite para excluirse es el 24 de marzo de 2015. Si no se excluye, no podrá demandar a
Herbalife por cualquier reclamación relacionada con el litigio. Si permanece en la Conciliación,
podrá presentar objeciones a la misma a más tardar el 24 de marzo de 2015. El Tribunal llevará
a cabo una audiencia el 11 de mayo de 2015, para considerar si aprueba la Conciliación y
adjudica honorarios de abogados. Los abogados de los Demandantes prevén solicitar honorarios
de abogados equivalentes a un 30 % del valor de conciliación total por un monto que no exceda
los 5.250.000 USD y costas de aproximadamente 200.000 USD por hacerse cargo de este caso.
Todos los honorarios y costos de abogados que sean aprobados serán pagados a partir del Fondo
de conciliación en efectivo. Usted puede comparecer en la audiencia, pero no está obligado a
hacerlo. También puede contratar su propio abogado, por su cuenta, para comparecer o hablar en
su nombre en la audiencia.
Si desea más información o un formulario de reclamación:
1-877-651-4185
www.HerbalifeClassActionSettlement.com
HIBNES1

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 10 of 56 Page ID
#:3864

Exhibit B

Case 2:13-cv-02488-BRO-SH
130-5 Filed 04/13/15 Page 11 of 56 Page ID
Bostick v. Herbalife ClaimsDocument
Administrator
#:3865
P.O. Box 43323
Providence, RI 02940-3323

«Barcode»
Postal Service: Please do not mark barcode

Claim#: HIB-«ClaimID» - «MailRec»

«First1» «Last1»
«CO»
«Addr2»
«Addr1»
«City», «St» «Zip»
«Country»

HIB

COURT-ORDERED
LEGAL
NOTICE
Case 2:13-cv-02488-BRO-SH Document
130-5
Filed
04/13/15 Page 12 of 56 Page ID
If you were an Herbalife Distributor #:3866
or Member at Any Time Between April 1, 2009
and December 2, 2014, You Could Get Benefits from a Class Action Settlement.
Records show that you are a current or former Herbalife distributor. A lawsuit was filed against Herbalife International of America,
Inc.; Herbalife International, Inc.; and Herbalife, Ltd. (collectively, “Herbalife”) over its business model, alleging the Herbalife
operates a pyramid scheme. Herbalife denies that it did anything wrong. The Settlement includes $15 million for cash awards,
$2.5 million for product returns, and a legal commitment from Herbalife that it will change or preserve recent changes to certain
business practices. Go to www.HerbalifeClassActionSettlement.com for more information and to file a claim online.
WHO’S INCLUDED?
You are in included in the Settlement if at any time between April 1, 2009, and December 2, 2014 you had a valid agreement of
distributorship or membership with Herbalife.
WHAT CAN YOU GET?
You may be eligible to return unused and unopened Herbalife products (excluding International Business Packs and MiniInternational Business Packs) purchased one year prior to February 3, 2015 and may receive in exchange, the actual amount you
paid for each returned product. Even if you are unable to return products, you may be eligible to receive a cash payment for losses
on Herbalife product purchases incurred in pursuing the Herbalife business opportunity.
HOW TO GET BENEFITS?
You must submit a Claim Form to get benefits. The Claim Form is available at www.HerbalifeClassActionSettlement.com or by
calling 1-877-651-4185. You can submit a Claim Form online or by mail. The deadline to submit a Claim Form is February 3, 2015.
YOUR OTHER RIGHTS
If you do nothing, your rights will be affected. If you do not want to be legally bound by the Settlement, you must exclude yourself
from the Settlement. The deadline to exclude yourself is March 24, 2015. If you do not exclude yourself you will be unable to sue
Herbalife for any claim relating to the lawsuit. If you stay in the Settlement, you may object to it by March 24, 2015. The Court
will hold a hearing on May 11, 2015, to consider whether to approve the Settlement and award attorneys’ fees. The Plaintiffs’
attorneys anticipate seeking attorneys’ fees of 30% of the total Settlement value in an amount not to exceed $5,250,000 and costs of
approximately $200,000 for pursuing this case. Any awarded attorneys’ fees and costs will be paid from the Cash Settlement Fund.
You can appear at the hearing, but you don’t have to. You can hire your own attorney at your own expenses to appear or speak for
you at the hearing.
FOR MORE INFORMATION OR A CLAIM FORM: 1-877-651-4185 WWW.HERBALIFECLASSACTIONSETTLEMENT.COM

LEGAL130-5
ORDENADA Filed
POR UN TRIBUNAL
Case 2:13-cv-02488-BRO-SHNOTIFICACIÓN
Document
04/13/15 Page 13 of 56 Page ID
Si usted fue distribuidor o miembro de Herbalife
en cualquier momento comprendido entre el
#:3867
1 de abril de 2009 y el 2 de diciembre de 2014, puede obtener beneficios de una Conciliación de demanda colectiva.
Los registros muestran que usted es o fue distribuidor de Herbalife. Se interpuso una demanda contra Herbalife International of America, Inc.;
Herbalife International, Inc.; y Herbalife, Ltd. (en conjunto, “Herbalife”) sobre su modelo comercial, en la que se alega que Herbalife opera con base en un
esquema piramidal. Herbalife niega que haya obrado de mala forma. La conciliación incluye 15 millones USD por concepto de indemnizaciones en efectivo,
2,5 millones USD por devoluciones de productos y un compromiso legal asumido por Herbalife de que cambiará o mantendrá los cambios recientes a ciertas
prácticas comerciales. Visite www.HerbalifeClassActionSettlement.com para obtener más información y registrar una reclamación en línea.
¿QUIÉN ESTÁ INCLUIDO?
Usted está incluido en la conciliación si en cualquier momento comprendido entre el 1 de abril de 2009 y el 2 de diciembre de 2014 usted tuvo un
acuerdo de distribución válido o membrecía válida con Herbalife.
¿QUÉ PUEDE OBTENER?
Usted puede ser elegible para devolver productos Herbalife no usados ni abiertos (excluidos los Paquetes Comerciales Internacionales [International
Business Packs] y los Minipaquetes Comerciales Internacionales [Mini-International Business Packs]) comprados con más de un año de antelación a la
fecha límite de presentación de formularios de reclamación y recibir en intercambio, el monto real que usted pagó para cada producto devuelto. Incluso
si usted no está en capacidad de devolver los productos, puede ser elegible para recibir un pago en efectivo por las pérdidas sobre las compras de
productos Herbalife asumidas en la dedicación a la oportunidad de negocio de Herbalife.
¿CÓMO OBTENER BENEFICIOS?
Debe enviar un formulario de reclamación para obtener beneficios. Los formularios de reclamación están disponibles en
www.HerbalifeClassActionSettlement.com o puede obtenerlos llamando al 1-877-651-4185. Puede enviar su formulario de reclamación por Internet
o por correo postal. La fecha límite para presentar su formulario de reclamación es el 3 de febrero 2015.
SUS OTROS DERECHOS
Incluso si no hace nada, sus derechos legales se verán alterados. Si no desea quedar vinculado legalmente por esta conciliación, debe excluirse de la
misma. La fecha límite para excluirse es el 24 de marzo 2015. Si no se excluye, no podrá demandar a Herbalife por cualquier reclamación relacionada
con el litigio. Si permanece en la conciliación, podrá presentar objeciones a la misma a más tardar el 24 de marzo 2015. El Tribunal llevará a cabo una
audiencia el 11 de mayo 2015, para considerar si aprueba la conciliación y adjudica los honorarios de los abogados. Los abogados de los Demandantes
prevén solicitar honorarios de abogados equivalentes a un 30 % del valor de conciliación total por un monto que no exceda los 5.250.000 USD y costas
de aproximadamente 200.000 USD por hacerse cargo de este caso. Todos los honorarios y costos de abogados que sean aprobados serán pagados a
partir del Fondo de conciliación en efectivo. Usted puede comparecer en la audiencia, pero no está obligado a hacerlo. También puede contratar su
propio abogado, por su cuenta, para comparecer o hablar en su nombre en la audiencia.
SI DESEA MÁS INFORMACIÓN O UN FORMULARIO DE RECLAMACIÓN: 1-877-651-4185

WWW.HERBALIFECLASSACTIONSETTLEMENT.COM

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 14 of 56 Page ID
#:3868

Exhibit C

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 15 of 56 Page ID
#:3869

UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA

If you were an Herbalife Distributor or Member at Any Time Between April 1, 2009,
and December 2, 2014, You Could Get Benefits from a Class Action Settlement.
Para una Notificatión en Español, llamar 1-877-651-4185 o visitar www.HerbalifeClassActionSettlement.com.
A federal court authorized this Notice. This is not a solicitation from a lawyer.

A Settlement has been reached with Herbalife International of America, Inc.; Herbalife International, Inc.;
and Herbalife Ltd. (collectively, “Herbalife”) regarding its business practices.

Those included in the Settlement may be eligible to receive a payment. Herbalife has also agreed to change
or preserve recent changes to its business practices.
Your legal rights are affected even if you do nothing. Please read this Notice carefully.

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT

SUBMIT A CLAIM FORM

EXCLUDE YOURSELF

OBJECT
GO TO A HEARING

DO NOTHING

This is the only way to get a payment. This option will result in you giving
up your rights to sue Herbalife about the legal claims in this lawsuit.
Get no payment. This is the only option that allows you to ever be part of
any other lawsuit against Herbalife about the legal claims in this case.
Write to the Court about why you do not like the Settlement.
Ask to speak in Court about the fairness of the Settlement.
Get no payment. Give up your rights to sue Herbalife about the claims
in this lawsuit.

QUESTIONS? CALL 1-877-651-4185 TOLL FREE, OR VISIT WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
PARA UNA NOTIFICACIÓN EN ESPAÑOL, LLAME O VISITE NUESTRO WEBSITE
HIBNTW1

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 16 of 56 Page ID
#:3870

WHAT THIS NOTICE CONTAINS
Page
BASIC INFORMATION...................................................................................................................................................... 3
1. Why did I get this Notice package? ................................................................................................................................... 3
2. What is this lawsuit about? ................................................................................................................................................ 3
3. Why is this a class action? ................................................................................................................................................. 3
4. Why is there a settlement? ................................................................................................................................................. 3
WHO IS IN THE SETTLEMENT? .................................................................................................................................... 3
5. How do I know if I am part of the settlement? .................................................................................................................. 3
6. Are there exceptions to being included? ............................................................................................................................ 3
7. I’m still not sure if I am included....................................................................................................................................... 4
THE SETTLEMENT BENEFITS—WHAT YOU GET ................................................................................................... 4
8. What does the settlement provide? .................................................................................................................................... 4
9. How much will my payment be? ....................................................................................................................................... 5
HOW YOU GET A PAYMENT—SUBMITTING A CLAIM FORM ............................................................................ 5
10. How can I get a payment?................................................................................................................................................ 5
11. When would I get my payment? ...................................................................................................................................... 6
12. What am I giving up to get a payment and stay in the Settlement Class? ....................................................................... 7
EXCLUDING YOURSELF FROM THE SETTLEMENT .............................................................................................. 7
13. How do I get out of the settlement? ................................................................................................................................. 7
14. If I do not exclude myself, can I sue Herbalife for the same thing later? ........................................................................ 7
15. If I exclude myself, can I get money from this settlement? ............................................................................................. 7
THE LAWYERS REPRESENTING YOU......................................................................................................................... 7
16. Do I have a lawyer in this case?....................................................................................................................................... 7
17. How will the lawyers be paid? ......................................................................................................................................... 7
OBJECTING TO THE SETTLEMENT ............................................................................................................................ 7
18. How do I tell the Court that I don’t like the settlement?.................................................................................................. 7
19. What is the difference between objecting and excluding?............................................................................................... 8
THE COURT’S FAIRNESS HEARING ............................................................................................................................ 8
20. When and where will the Court decide whether to approve the settlement? ................................................................... 8
21. Do I have to come to the hearing? ................................................................................................................................... 8
22. May I speak at the hearing? ............................................................................................................................................. 8
IF YOU DO NOTHING ....................................................................................................................................................... 8
23. What happens if I do nothing at all? ................................................................................................................................ 8
GETTING MORE INFORMATION.................................................................................................................................. 8
24. Are there more details about the settlement? ................................................................................................................... 8
25. How do I get more information?...................................................................................................................................... 8
QUESTIONS? CALL 1-877-651-4185 TOLL FREE, OR VISIT WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
PARA UNA NOTIFICACIÓN EN ESPAÑOL, LLAME O VISITE NUESTRO WEBSITE
-2-

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 17 of 56 Page ID
#:3871

BASIC INFORMATION

1. Why did I get this notice package?
This Notice is being sent to those individuals who may have had a valid agreement of distributorship or membership with
Herbalife between April 1, 2009 and December 2, 2014.
The Court sent you this Notice because you have a right to know about a proposed settlement of a class action lawsuit,
and about all of your options, before the Court decides whether to approve the settlement. If the Court approves it, and
after objections and appeals are resolved, an administrator appointed by the Court (the “Claims Administrator”) will make
the payments that the settlement allows. You will be informed of the progress of the settlement.
This package explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them,
and how to get them.
The Court in charge of the case is the United States District Court for the Central District of California, and the case is
known as Dana Bostick, et al. v. Herbalife International of America, Inc., et al., Case No. 2:13-cv-02488-BRO-RZ.
Judge Beverly Reid O’Connell is overseeing this class action. The people who sued are called “Plaintiffs.” The people
who were sued, Herbalife International of America, Inc.; Herbalife International, Inc.; and Herbalife Ltd. (collectively,
“Herbalife”), are the “Defendants.”
2. What is this lawsuit about?
The lawsuit claimed that Herbalife operated a pyramid scheme contrary to California state law. The lawsuit also claims
that Herbalife’s promotional materials made misleading claims regarding certain business opportunities. Herbalife denies
that it did anything wrong and vigorously defended the litigation.
3. Why is this a class action?
In a class action, one or more people called Class Representatives (in this case Dana Bostick, Anita Vasko, Judi Trotter,
Beverly Molnar, and Chester Cote), sue on behalf of people who have similar claims. All these people are a “Class” or “Class
Members.” One court resolves the issues for all Class Members, except for those who exclude themselves from the Class.
4. Why is there a settlement?
The Court did not decide in favor of Plaintiffs or Herbalife. Instead, both sides agreed to a settlement. That way, both
sides avoid the cost of a trial, and the people affected will get compensation. Herbalife denies all legal claims in this case.
The Class Representatives and their attorneys think that the settlement is best for all Class Members.

WHO IS IN THE SETTLEMENT?
To see if you will get money from this settlement, you must first be a Class Member.
5. How do I know if I am part of the settlement?
The Class Members are described in the Stipulation of Settlement. In general, all persons who, during the period from
April 1, 2009 through December 2, 2014, had a valid agreement of distributorship or membership with Herbalife are
included in the class.
6. Are there exceptions to being included?
You are not a Class Member if you were or are either an employee of Herbalife or a family member of an employee of
Herbalife. You are not a Class Member if you were or are a member of the Herbalife President’s Team, Founder’s Circle,
Chairman’s Club, Millionaire Team, or GET Team.
You are not a Class Member entitled to receive any payment if you agreed to be subject to the arbitration provisions found
in the Arbitration Agreement for Disputes Between Members and Herbalife contained in the Member Application
Agreement effective as of September 2013. You may still, however, be a Class Member affected by the non-monetary
elements of the settlement even if you signed an Arbitration Agreement.
7. I’m still not sure if I am included.
If you are still not sure whether you are included, you can ask for free help by contacting Plaintiffs’ Counsel at:
(385) 202-4913. You can also call 1-877-651-4185 or visit www.HerbalifeClassActionSettlement.com for more
information. Or you can fill out and return the Claim Form described on page 5, in question 10, to see if you qualify.
QUESTIONS? CALL 1-877-651-4185 TOLL FREE, OR VISIT WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
PARA UNA NOTIFICACIÓN EN ESPAÑOL, LLAME O VISITE NUESTRO WEBSITE
-3-

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 18 of 56 Page ID
#:3872

THE SETTLEMENT BENEFITS—WHAT YOU GET

8. What does the settlement provide?
Herbalife has agreed to establish two Settlement Funds for current and former members and distributors:

Cash Settlement Fund: $15 million in cash will be used to pay Herbalife members or distributors who file valid
claims. The fund will also be used to pay attorneys’ fees and costs (See Question 17) as well as the costs to
administer the settlement.

Product Return Fund: Up to $2.5 million will be available to pay members or distributors who file valid claims
for the return of unused and unopened products (excluding International Business Packs and Mini-International
Business Packs). An additional $2.5 million from the Cash Settlement Fund described above may be used to pay
for additional product returns if valid claims exceed the amount of the Product Return Fund.

Herbalife has also agreed to make or continue several changes to its corporate policies and procedures for no less than
three years from the date the Court gives final approval of this settlement. Those corporate policies are listed below:
1.

Herbalife shall not simultaneously and separately charge its members a “Packaging & Handling” fee
(or similar fee) and an “Order Shipping Charge” (or similar fee).

2.

Herbalife shall not define “Distributor” in its Glossary of Terms as “Everyone who purchases an
Official Herbalife Member Pack (HMP) and submits to Herbalife a valid and complete Membership
Application and whose Application has been accepted by Herbalife.”

3.

Herbalife shall continue to discourage members from incurring debt to pursue the Herbalife business opportunity.

4.

Herbalife shall continue to pay shipping charges for the return of products to Herbalife in connection with
its inventory repurchase policies.

5.

Herbalife shall continue enforcement of its rules and maintain a member compliance department. Herbalife
shall also continue to revise and supplement its policies, procedures and member rules as deemed necessary
by Herbalife in the exercise of reasonable business judgment.

6.

Herbalife shall continue prohibiting members from selling leads to other members or purchasing leads from any source.

7.

Herbalife shall continue to prohibit members from requiring a person to buy product (other than a Mini or
Full Member Pack) as a condition to becoming an Herbalife member or distributor.

8.

Herbalife shall continue to require that before opening a Nutrition Club in a non-residential location, the Herbalife
member must have been a member for at least 90 days and receive mandatory Nutrition Club operator training.

9.

Herbalife shall include its Statement of Average Gross Compensation (“SAGC”) as part of its
member application.

10.

Herbalife shall require that new members acknowledge reviewing the SAGC when signing a new Herbalife
Membership Application and Agreement and shall continue to include and/or link to the SAGC with that Agreement.

11.

Herbalife shall continue disclosing in its SAGC the total number and percentage of all members who do not
receive any compensation payment directly from Herbalife.

12.

Herbalife shall clarify in its Sales & Marketing Plan that upon qualifying as a Supervisor, a member shall have
at least 12 months during which to requalify as a Supervisor.

13.

Herbalife shall amend the hardcopy Membership Agreement to define “Compensation Statement” as “Statement
of Average Gross Compensation Paid by Herbalife,” and include the following statement: “I hereby represent,
warrant and agree that I am not relying upon and that I will not rely upon any other written or oral information or
representations about the financial results I might achieve.” Herbalife may modify the Membership Agreement
provided that such modifications are not materially inconsistent with these amendments.

Notes: The attorneys’ fees and costs, settlement administration costs, and other relevant costs will be paid from the Cash
Settlement Fund. The remainder of the Cash Settlement Fund will be used to pay valid claims submitted by Class Members.
More details on the settlement are available in the Stipulation of Settlement, which is available at:
www.HerbalifeClassActionSettlement.com

QUESTIONS? CALL 1-877-651-4185 TOLL FREE, OR VISIT WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
PARA UNA NOTIFICACIÓN EN ESPAÑOL, LLAME O VISITE NUESTRO WEBSITE
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9. How much will my payment be?

Your share of the settlement will depend on the number of valid Claim Forms that Class Members send in, the nature of
your claim, and the amount of attorneys’ fees and costs awarded by the Court.
Three types of monetary benefits will be available from the two Settlement Funds. Class Members could receive benefits
in the following ways:
Type 1: Product Return Award (Product Return Fund)
Class Members may submit claims to return unused and unopened products (excluding International Business Packs and
Mini-International Business Packs) purchased more than one year prior to February 3, 2015, the deadline for submitting
claims forms. Following this deadline, the Claims Administrator will post on the class action settlement website
www.HerbalifeClassActionSettlement.com a notice of the return payment and at that point, you will have the ability to
return the products identified in your Claim Forms.
Notes: If the total product return amount exceeds the amount in the Product Return Fund, payments to the Class Members
will be reduced on a proportional basis so that all valid claims can be paid. Any shipping costs will be paid out of the
Product Return Fund. If you purchased Herbalife products within one year prior to February 3, 2015, you may be entitled
to a refund under Herbalife’s Gold Standard Guarantees, which are administered directly by Herbalife and not part of
this Settlement.
Type 2: Business Opportunity Award (Cash Settlement Fund)
If you (a) joined Herbalife primarily to pursue a business opportunity and not primarily for personal and/or family
consumption of Herbalife products; (b) in total, lost money on Herbalife products pursuing the Herbalife business
opportunity; and (c) have never been a GET Team or higher-level member, then you may qualify for an award from the
Cash Settlement Fund based on your purchases of “Qualified Products.”
An Herbalife product is a “Qualified Product,” if it was (i) purchased for resale purposes; (ii) purchased from within the
U.S. and shipped to you at a location in the U.S.; (iii) not sold for at least the cost of purchase; (iv) not returned through
Herbalife’s buyback program or Herbalife’s satisfaction guarantee; and (v) not the subject of a claim for recovery from the
Product Fund that has been filed pursuant to this Settlement.
Pro Rata Award
If you paid Herbalife at least $750 to purchase Qualified Products during any Claims Year, you may qualify for a pro rata
award from the Cash Settlement Fund equal to the lesser of 100% of the estimated total loss from your sales of “Qualified
Products” or 50% of the price you paid for your aggregate “Qualified Product.” A Claims Year is a twelve month period
beginning and ending on the first day of the month in which you became an Herbalife member.
Notes: If claims exceed the amount available for Pro Rata Awards, payments to the Class Members will be reduced on a
proportional basis so that all valid claims can be paid.
Flat Rate Award
If you did not pay Herbalife at least $750 to purchase Qualified Products during a Claims Year (as defined above), you
may be entitled to a payment of $20 to be paid from the Cash Settlement Fund.
Notes: If claims exceed the amount available for Flat Rate Awards, payments to the Class Members will be reduced on a
proportional basis so that all valid claims can be paid.
Any amounts remaining in the Cash Settlement Fund after the payments specified in the Business Opportunity Award
shall be paid pursuant to the cy pres doctrine to the following charity, or such charity as the parties may agree upon and
the Court approves:
Consumer Federation of America
To the extent interest is earned on amounts held by the Claims Administrator prior to distribution as set forth in the
Stipulation of Settlement, it shall accrue and be payable to Herbalife.

HOW YOU GET A PAYMENT— SUBMITTING A CLAIM FORM
10. How can I get a payment?
To qualify for payment from the either the Cash Settlement Fund or Product Return Fund, you must send in a Claim Form. A
Claim Form may be obtained from the Claims Administrator from its website at www.HerbalifeClassActionSettlement.com or by
telephone request by calling 1-877-651-4185. Read the instructions carefully, fill out the form(s) and sign and (if not filled out
online) mail the form(s) postmarked no later than February 3, 2015.
QUESTIONS? CALL 1-877-651-4185 TOLL FREE, OR VISIT WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
PARA UNA NOTIFICACIÓN EN ESPAÑOL, LLAME O VISITE NUESTRO WEBSITE
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Product Return Payments

To receive a payment under the Product Return Fund, in your Claim Form, you must identify the following:

Product Stock-Keeping Unit number (“SKU”).

Estimated purchase date of the products to be returned.

The actual amount paid for each product you intend to return.

If you are unable to provide the actual amount paid for the products you intend to return, you must certify
under penalty of perjury that you are unable to provide that information and then provide an estimated
purchase amount. Assuming all other information you provide is proper, the Claims Administrator will
then calculate the amount paid as the lesser of your estimated purchase amount or 50% of Herbalife’s
Suggested Retail Price for the product on the purchase date.

To qualify for a payment from the Product Return Fund, after the Claims Administrator posts a notice of the return
payment on the Internet at www.HerbalifeClassActionSettlement.com, you must return the product identified in your
Claim Form by following the directions on the website.
Cash Settlement Payments
To receive a payment under the Cash Settlement Fund, in your Claim Form, you must certify under penalty of perjury
the following:

You joined Herbalife primarily to pursue a business opportunity and not primarily to personally (or as a family)
consume Herbalife’s product.

In total, you lost money on Herbalife products pursuing the Herbalife business opportunity.

You have never been a GET Team or higher-level member.

The amount of your best, good faith estimate of your total loss from product sales.

Payments under the Cash Settlement Fund will be made only for purchases of Qualified Products. Qualified Products are
products that were:

Purchased for resale purposes.

Purchased from within the U.S. and shipped to you at a location in the U.S.

Not sold by you for at least the cost of purchase.

Not returned through Herbalife’s buyback program or Herbalife’s satisfaction guarantee.

Not the subject of a claim for recovery from the Product Fund that has been filed pursuant to this settlement.

You must certify the aforementioned information under penalty of perjury.
11. When would I get my payment?
The Court will hold a hearing on May 11, 2015, to decide whether to approve the settlement. If Judge O’Connell
approves the settlement, there may be appeals. It is always uncertain whether these appeals can be resolved, and resolving
them can take time. Everyone who sends in a form will be informed of the progress of the settlement. Please be patient.
12. What am I giving up to get a payment and stay in the Class?
Unless you exclude yourself, you will remain in the Class, and that means that you cannot sue, continue to sue, or be part
of any other lawsuit against Herbalife about the legal issues in this case, except as permitted in the Stipulation of
Settlement. It also means that all of the Court’s orders, including a release of claims alleged or that could have been
alleged in the lawsuit, will apply to you and legally bind you.

EXCLUDING YOURSELF FROM THE SETTLEMENT
If you don’t want a payment from this settlement, but you want to keep the right to sue or continue to sue Herbalife on
your own about the legal claims in this case for monetary relief, then you must take steps to get out of the Class. This is
called excluding yourself, or “opting out” of the Class.
QUESTIONS? CALL 1-877-651-4185 TOLL FREE, OR VISIT WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
PARA UNA NOTIFICACIÓN EN ESPAÑOL, LLAME O VISITE NUESTRO WEBSITE
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13. How do I get out of the settlement?

To exclude yourself from the monetary portion of the settlement, you must send an Opt-Out Form (available on the
Claims Administrator’s website) or letter by mail or by email saying that you want to be excluded from Bostick v.
Herbalife. Be sure to include your name, address, telephone number, and your signature. You must mail or email your
exclusion request postmarked no later than March 24, 2015 to:
Bostick v. Herbalife Claims Administrator
P.O. Box 43323, Providence, RI 02940-3323
Herbalife@kccllc.com
You cannot exclude yourself on the phone, but you can request an Opt-Out Form by calling the Claims Administrator at
the phone number listed in this Notice. If you ask to be excluded, you will not get any settlement payment, and you
cannot object to the settlement. You will not be legally bound by anything that happens in this lawsuit. You may be able
to sue (or continue to sue) Herbalife in the future about the legal issues in this case.
14. If I do not exclude myself, can I sue Herbalife for the same thing later?
No. Unless you exclude yourself, you give up any right to sue Herbalife for the claims that this settlement resolves. You must
exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is March 24, 2015.
15. If I exclude myself, can I get money from this settlement?
No. If you take the steps to exclude yourself, do not send in a Claim Form. But, you may sue, continue to sue, or be part
of a different lawsuit against Herbalife, subject to the law applicable to your case.

THE LAWYERS REPRESENTING YOU
16. Do I have a lawyer in this case?
The Court approved the law firms of Fabian & Clendenin, P.C. of Salt Lake City, Utah and Foley Bezek Behle & Curtis,
LLP of Santa Barbara, CA to represent you and other Class Members. These lawyers are called Class Counsel. You will not
be charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.
17. How will the lawyers be paid?
Class Counsel will ask the Court for attorneys’ fees of 30% of the total settlement value in an amount not to exceed
$5,250,000 and costs of approximately $200,000 for pursuing this case. The Court may award less than the amounts
requested. These amounts and the costs to administer the settlement will come out of the Cash Settlement Fund, which
will reduce the amount of money available to each member of the Class.

OBJECTING TO THE SETTLEMENT
You can tell the Court that you do not agree with the settlement or some part of it.
18. How do I tell the Court that I don’t like the settlement?
If you are a Class Member and you have not excluded yourself, you can object to the settlement if you do not like some or
all of it. You can give reasons why you think the Court should not approve it. The Court will consider your views. To do
so, you must mail in a written objection in the case, Dana Bostick, et al. v. Herbalife International of America, Inc., et al.,
Case No. 2:13-cv-02488-BRO-RZ, to:
United States District Court
Central District of California
312 North Spring Street
Los Angeles, CA 90012
Herbalife Objections
Fabian & Clendenin, P.C.
215 South State Street, Suite 1200
Salt Lake City, UT 84151-0210

Herbalife Objections
Boies, Schiller & Flexner LLP
333 Main Street
Armonk, NY 10504

Herbalife Objections
Foley Bezek Behle & Curtis, LLP
15 West Carrillo Street
Santa Barbara, CA 93101

Herbalife Objections
Bird Marella P.C.
1875 Century Park East, 23rd Floor
Los Angeles, CA 90067-2561

QUESTIONS? CALL 1-877-651-4185 TOLL FREE, OR VISIT WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
PARA UNA NOTIFICACIÓN EN ESPAÑOL, LLAME O VISITE NUESTRO WEBSITE
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Be sure to include your name, address, telephone number, your signature, and the reasons you object to the settlement.
Your objection must be postmarked no later than March 24, 2015.
19. What is the difference between objecting and excluding?
Objecting is simply telling the Court that you don’t like something about the settlement. You can object only if you stay
in the Class. Excluding yourself is telling the Court that you don’t want to be part of the Class. If you exclude yourself,
you have no basis to object because the case no longer affects you.

THE COURT’S FAIRNESS HEARING
The Court will hold a hearing to decide whether to approve the settlement. You may attend and you may ask to speak, but
you don’t have to.
20. When and where will the Court decide whether to approve the settlement?
Judge O’Connell will hold a Fairness Hearing at 1:30 p.m. on May 11, 2015 at the United States District Court for the
Central District of California, 312 North Spring Street, Los Angeles, California 90012, Department 14, Spring St. Floor.
At this hearing Judge O’Connell will consider whether the settlement is fair, reasonable, and adequate. If there are
objections, Judge O’Connell will consider them. Judge O’Connell will listen to people who have asked to speak at the
hearing. Judge O’Connell may also decide how much to pay to Class Counsel. After the hearing, Judge O’Connell will
decide whether to approve the settlement. We do not know how long these decisions will take.
21. Do I have to come to the hearing?
No. Class Counsel will answer questions Judge O’Connell may have. However, you or your own lawyer are welcome to
come at your own expense. If you send in a written objection, you do not have to come to Court to talk about it. As long
as you submitted your written objection on time and in accordance with this Notice, the Court will consider it.
22. May I speak at the hearing?
You may ask Judge O’Connell for permission to speak at the Fairness Hearing. To do so, you must send a letter to the
addresses listed in Question 18 saying that it is your “Notice of Intention to Appear in Dana Bostick, et al. v. Herbalife
International of America, Inc., et al., Case No. 2:13-cv-02488-BRO-RZ.” Be sure to include your name, address,
telephone number, and your signature. Your Notice of Intention to Appear must be postmarked no later than
March 24, 2015. You cannot speak at the hearing if you excluded yourself.

IF YOU DO NOTHING
23. What happens if I do nothing at all?
If you do nothing, you will get no money from this settlement. And unless you exclude yourself, you will not be able to
start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Herbalife about the legal issues in this case,
ever again, except as permitted in the Stipulation of Settlement.

GETTING MORE INFORMATION
24. Are there more details about the settlement?
This Notice summarizes the proposed settlement. More details are in a Stipulation of Settlement. You can get a copy of
the Stipulation of Settlement at www.HerbalifeClassActionSettlement.com.
25. How do I get more information?
You can visit the website at www.HerbalifeClassActionSettlement.com, where you will find answers to common
questions about the settlement, a Claim Form, and other information to help you determine whether you are a Class
Member and whether you are eligible for a payment; or you can call 1-877-651-4185 toll free; or write to
Bostick v. Herbalife Claims Administrator, P.O. Box 43323, Providence, RI 02940-3323.

QUESTIONS? CALL 1-877-651-4185 TOLL FREE, OR VISIT WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
PARA UNA NOTIFICACIÓN EN ESPAÑOL, LLAME O VISITE NUESTRO WEBSITE
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TRIBUNAL DE DISTRITO DE LOS ESTADOS UNIDOS
PARA EL DISTRITO CENTRAL DE CALIFORNIA

Si usted fue distribuidor o miembro de Herbalife en cualquier momento
entre el 1 de abril de 2009, y el 2 de diciembre de 2014,
podría obtener beneficios de una Conciliación de demanda colectiva.
To obtain a Notification in English, call 1-877-651-4185 or visit www.HerbalifeClassActionSettlement.com.
Un tribunal federal autorizó esta notificación. La presente no se trata de un ofrecimiento de servicios por parte de un abogado.

Se ha llegado a una conciliación con Herbalife International of America, Inc.; Herbalife International, Inc.; y Herbalife Ltd.
(en conjunto, “Herbalife”) respecto a sus prácticas comerciales.

Los individuos que sean incluidos en la conciliación pueden ser elegibles para recibir un pago. Herbalife también ha
acordado cambiar o preservar los recientes cambios a sus prácticas comerciales.
Sus derechos legales podrían verse alterados aun cuando no actúe. Lea esta Notificación detenidamente.

SUS DERECHOS LEGALES Y OPCIONES EN ESTA CONCILIACIÓN
PRESENTAR UN FORMULARIO
DE RECLAMACIÓN
Y/O FORMULARIO DE
RECLAMACIÓN DE REEMBOLSO

EXCLUÍRSE

OBJETAR

ASISTIR A UNA AUDIENCIA

NO HACER NADA

Esta es la única forma de obtener un pago. Esta opción tendrá como consecuencia
que usted renuncia a sus derechos de demandar a Herbalife sobre las reclamaciones
legales en este litigio.

No obtiene pago alguno. Esta es la única opción que le permite a usted formar parte
de cualquier otra demanda en contra de Herbalife sobre las reclamaciones legales en
este caso.
Escribir al Tribunal sobre el motivo por el cual le agrada o no, la conciliación.
Puede pedir la palabra ante el Tribunal con respecto a la imparcialidad de
la conciliación.
No obtiene pago alguno. Renuncia a sus derechos de demandar a Herbalife sobre las
reclamaciones en este litigio.

TO OBTAIN A NOTIFICATION IN ENGLISH, CALL OR VISIT OUR WEBSITE WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
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QUÉ CONTIENE ESTA NOTIFICACIÓN
Página
INFORMACIÓN BÁSICA ..................................................................................................................................................................... 3
1. ¿Por qué recibí este paquete de notificación? ........................................................................................................................................ 3
2. ¿De qué trata esta demanda?.................................................................................................................................................................. 3
3. ¿Por qué esta es una demanda colectiva?............................................................................................................................................... 3
4. ¿Por qué existe una conciliación? .......................................................................................................................................................... 3
¿QUIÉNES ESTÁN INCLUIDOS EN LA CONCILIACIÓN? ........................................................................................................... 3
5. ¿Cómo sé si formo parte de la conciliación?.......................................................................................................................................... 3
6. ¿Hay excepciones para poder ser incluido? ........................................................................................................................................... 3
7. Todavía no estoy seguro de si estoy incluido......................................................................................................................................... 3
LOS BENEFICIOS DE LA CONCILIACIÓN - LO QUE USTED OBTIENE ................................................................................. 4
8. ¿Qué es lo que se ofrece en la conciliación?.......................................................................................................................................... 4
9. ¿De cuánto será mi pago? ...................................................................................................................................................................... 5
CÓMO OBTENER UN PAGO O DESCUENTO — PRESENTACIÓN DE UN FORMULARIO DE RECLAMACIÓN ........... 5
10. ¿Cómo puedo obtener un pago?........................................................................................................................................................... 5
11. ¿Cuándo obtendría mi pago?................................................................................................................................................................ 6
12. ¿A qué estoy renunciando para recibir un pago y seguir formando parte del Grupo de demandantes? ............................................... 6
EXCLUIRSE DE LA CONCILIACIÓN ............................................................................................................................................... 7
13. ¿Cómo puedo salirme de la conciliación?............................................................................................................................................ 7
14. Si no me excluyo, ¿puedo demandar más adelante a Herbalife por este mismo asunto?..................................................................... 7
15. Si me excluyo, ¿puedo obtener dinero de esta conciliación? ............................................................................................................... 7
LOS ABOGADOS QUE LO REPRESENTAN A USTED................................................................................................................... 7
16. ¿Tengo un abogado en este caso? ........................................................................................................................................................ 7
17. ¿Cómo se les pagará a los abogados? .................................................................................................................................................. 7
OBJETAR LA CONCILIACIÓN .......................................................................................................................................................... 7
18. ¿Cómo puedo informar al Tribunal que no me agrada la conciliación?............................................................................................... 7
19. ¿Cuál es la diferencia entre presentar una objeción y excluirse? ......................................................................................................... 8
LA AUDIENCIA DE IMPARCIALIDAD DEL TRIBUNAL.............................................................................................................. 8
20. ¿Cuándo y dónde decidirá el Tribunal si aprueba o no la conciliación? .............................................................................................. 8
21. ¿Debo asistir a la audiencia?................................................................................................................................................................ 8
22. ¿Podré hablar en la audiencia?............................................................................................................................................................. 8
SI OPTA POR NO HACER NADA ....................................................................................................................................................... 8
23. ¿Qué sucede si no hago nada en absoluto? .......................................................................................................................................... 8
OBTENER MÁS INFORMACIÓN ....................................................................................................................................................... 8
24. ¿Hay mayor información detallada sobre la conciliación? .................................................................................................................. 8
25. ¿Cómo puedo obtener más información?............................................................................................................................................. 8

TO OBTAIN A NOTIFICATION IN ENGLISH, CALL OR VISIT OUR WEBSITE WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
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INFORMACIÓN BÁSICA

1. ¿Por qué recibí este paquete de notificación?
Esta Notificación se envía a aquellos individuos que posiblemente hayan tenido un acuerdo de distribución válido o membrecía válida
con Herbalife entre el 1 de abril de 2009 y el 2 de diciembre de 2014.
El Tribunal le envió esta Notificación porque usted tiene el derecho de saber acerca de la propuesta de conciliación de un litigio de
demanda colectiva, y todas las opciones que tiene a su disposición antes de que el Tribunal decida si aprueba o no la conciliación. Si el
Tribunal la aprueba, y una vez resueltas las objeciones y apelaciones, un administrador nombrado por el Tribunal (el “Administrador
de reclamaciones”) distribuirá los pagos dispuestos en la conciliación. Usted recibirá información sobre el progreso de la conciliación.
Este paquete explica la demanda, la conciliación, sus derechos legales, lo beneficios de los que dispone, quiénes son elegibles para
recibirlos y cómo obtenerlos.
El Tribunal a cargo del caso es el Tribunal de Distrito de los Estados Unidos para el Distrito Central de California, y el caso se conoce
como Dana Bostick, et al. v. Herbalife International of America, Inc., et al., Caso n.° 2:13-cv-02488-BRO-RZ. El juez Beverly Reid
O’Connell supervisa esta demanda colectiva. Las personas que presentaron la demanda se denominan “Demandantes”. La personas
que fueron demandadas, Herbalife International of America, Inc.; Herbalife International, Inc.; y Herbalife Ltd. (en conjunto,
“Herbalife”), son los “Demandados”.
2. ¿De qué trata esta demanda?
La demanda reclamaba que Herbalife operaba bajo un esquema piramidal contrario a la legislación estatal de California. La demanda
también reclama que los materiales promocionales de Herbalife hacían afirmaciones engañosas respecto a ciertas oportunidades de
negocio. Herbalife niega que haya obrado de mala forma y se defendió de forma enérgica en la demanda.
3. ¿Por qué esta es una demanda colectiva?
En una demanda colectiva, una o más personas llamadas Representantes del Grupo de demandantes (en este caso Dana Bostick, Anita
Vasko, Judi Trotter, Beverly Molnar y Chester Cote), presentan una demanda en nombre de personas que se encuentran en una situación
similar. Todas estas personas son el “Grupo de demandantes” o los “Miembros del Grupo de demandantes”. Un tribunal resuelve los
problemas de todos los Miembros del Grupo de demandantes, excepto los de las personas que se excluyan del Grupo de demandantes.
4. ¿Por qué existe una conciliación?
El Tribunal no falló a favor de los Demandantes ni de Herbalife. En su lugar, ambas partes aceptaron llegar a una conciliación. De esta
forma, ambas partes evitan el costo de un juicio, y las personas afectadas recibirán compensación. Herbalife niega todas las
reclamaciones legales en este caso. Los Representantes del Grupo de demandantes y sus abogados consideran que la conciliación es lo
mejor para todos los Miembros del Grupo de demandantes.

¿QUIÉNES ESTÁN INCLUIDOS EN LA CONCILIACIÓN?
Para ver si usted obtendrá dinero de esta conciliación, primero debe convertirse en Miembro del Grupo de demandantes.
5. ¿Cómo sé si formo parte de la conciliación?
Los Miembros del Grupo de demandantes son detallados en la Estipulación de la Conciliación. En general, todas las personas que,
durante el periodo comprendido entre el 1 de abril de 2009 hasta el 2 de diciembre de 2014, hayan tenido un acuerdo de distribución
válido o membrecía válida con Herbalife se incluyen en el grupo de demandantes.
6. ¿Hay excepciones para poder ser incluido?
Usted no es Miembro del Grupo de demandantes si fue o es empleado de Herbalife o miembro familiar de un empleado de Herbalife.
Usted no es Miembro del Grupo de demandantes si fue o es miembro del President’s Team (Equipo de Presidencia), Founder’s Circle
(Círculo del Fundador), Chairman’s Club (Club de Presidencia), Millionaire Team (Equipo Millonario), o GET Team (Equipo GET).
Usted no es Miembro del Grupo de demandantes con derecho a recibir algún pago si usted aceptó someterse a las disposiciones de
arbitraje que se encuentran en el Acuerdo de arbitraje para disputas entre miembros y Herbalife contenidas en el Acuerdo de solicitud
de membrecía vigente a septiembre de 2013. Sin embargo, aún puede ser Miembro del Grupo de demandantes afectado por los
elementos no monetarios de la conciliación incluso si usted firmó un Acuerdo de arbitraje.
7. Todavía no estoy seguro de si estoy incluido.
Si usted aún no está seguro de si está incluido, puede solicitar ayuda gratuita poniéndose en contacto con los Abogados de los
Demandantes a: (385) 202-5061. También puede llamar al 1-877-651-4185 o visite www.HerbalifeClassActionSettlement.com para
obtener mayor información. O puede diligenciar y regresar el formulario de reclamación descrito en la página 5, en la pregunta 10,
para ver si usted reúne los requisitos necesarios.
TO OBTAIN A NOTIFICATION IN ENGLISH, CALL OR VISIT OUR WEBSITE WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
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LOS BENEFICIOS DE LA CONCILIACIÓN - LO QUE USTED OBTIENE

8. ¿Qué es lo que se ofrece en la conciliación?
Herbalife ha acordado establecer dos Fondos de conciliación para miembros y distribuidores actuales y pasados.

Fondo de conciliación en efectivo: Se usarán 15 millones USD en efectivo para pagar a miembros o distribuidores de
Herbalife que hayan presentado reclamaciones válidas. El fondo también se usará para pagar honorarios y costos de
abogados (véase Pregunta 17) así como los costos de administración de la conciliación.

Fondo de devolución de productos: Se pondrán a disposición hasta 2,5 millones USD para pagar a miembros o
distribuidores que presenten reclamaciones válidas para la devolución de productos no usados ni abiertos (lo que excluye los
Paquetes Comerciales Internacionales [International Business Packs] y los Minipaquetes Comerciales Internacionales [MiniInternational Business Packs]). Se pueden usar 2,5 millones USD adicionales del Fondo de conciliación en efectivo descrito
anteriormente para pagar por devoluciones de productos adicionales si las reclamaciones válidas exceden el monto del Fondo
de devolución de productos.

Herbalife también ha acordado hacer o continuar varios cambios a sus políticas y procedimientos corporativos durante mínimo tres años a
partir de la fecha en que el Tribunal dé su aprobación final de esta conciliación. A continuación se detallan dichas políticas corporativas:
1.

Herbalife no podrá cobrar simultáneamente y por separado a sus miembros un honorario de “Empaque y manejo”
(o un honorario similar) y un “Cargo de transporte de pedido” (o un honorario similar).

2.

Herbalife no definirá “Distribuidor” en su Glosario de términos como “Toda persona que compre un Paquete de
miembro Herbalife oficial (Official Herbalife Member Pack) y presente a Herbalife una Solicitud de membrecía válida
y completa y cuya Solicitud haya sido aceptada por Herbalife”.

3.

Herbalife continuará disuadiendo a sus miembros de incurrir en deudas para dedicarse a la oportunidad de negocio
de Herbalife.

4.

Herbalife continuará pagando los cargos de transporte para la devolución de productos a Herbalife en relación con sus
políticas de recompra de inventario.

5.

Herbalife continuará ejecutando sus normas y manteniendo un departamento de cumplimiento normativo de
miembros. Herbalife también deberá continuar revisando y complementando sus políticas, procedimientos y
reglamentos de miembros según Herbalife considere necesario en el ejercicio de su juicio comercial razonable.

6.

Herbalife continuará prohibiendo a sus miembros vender listas de clientes potenciales a otros miembros o comprar
listas de clientes potenciales de cualquier otra fuente.

7.

Herbalife continuará prohibiendo a sus miembros que soliciten a una persona que compre un producto (salvo un
Paquete de Miembro Mini o Completo) como condición para convertirse en miembro o distribuidor de Herbalife.

8.

Herbalife continuará solicitando que antes de abrir un Club de Nutrición (Nutrition Club) en una sede no residencial, el
miembro de Herbalife debe haber sido miembro durante mínimo 90 días y recibir capacitación obligatoria de operador
de Club de Nutrición.

9.

Herbalife incluirá su Declaración de compensación bruta promedia (Statement of Average Gross Compensation, “SAGC”)
como parte de su solicitud de membrecía.

10.

Herbalife deberá exigir que los nuevos miembros reconozcan haber revisado la SAGC cuando firmen una nueva
Solicitud y Acuerdo de membrecía Herbalife y continuará incluyendo o vinculando a la SAGC con ese Acuerdo.

11.

Herbalife deberá continuar divulgando en su SAGC el número total y porcentaje de todos los miembros que no reciban
ningún pago compensatorio directamente de Herbalife.

12.

Herbalife deberá aclarar en su Plan de ventas y mercadeo que tras cumplir los requisitos necesarios para ser Supervisor,
un miembro tendrá como mínimo 12 meses durante los cuales podrá ser reevaluado como Supervisor.

13.

Herbalife deberá enmendar el Acuerdo de membrecía en versión física para definir “Declaración de compensación”
como “Declaración de compensación bruta promedio pagada por Herbalife”, e incluir la siguiente declaración: “Por
medio del presente asevero, garantizo y acuerdo que no me estoy basando y que no me basaré en ninguna otra información
o afirmación verbal o escrita sobre los resultados financieros que yo pueda lograr”. Herbalife puede modificar el Acuerdo
de membrecía siempre que dichas modificaciones no sean considerablemente incongruentes con estas enmiendas.

Notas: Los honorarios y costos de abogados, los costos de administración de la conciliación y otros costos correspondientes, serán
pagados a partir del Fondo de conciliación en efectivo. El saldo del Fondo de conciliación en efectivo será usado para pagar
reclamaciones válidas presentadas por Miembros del Grupo de demandantes.
Podrá conocer más detalles sobre la conciliación, consulte la Estipulación de conciliación, que se encuentra disponible en:
www.HerbalifeClassActionSettlement.com.
TO OBTAIN A NOTIFICATION IN ENGLISH, CALL OR VISIT OUR WEBSITE WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
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9. ¿De cuánto será mi pago?

Su cuota de la conciliación dependerá del número de formularios de reclamación válidos que envíen los Miembros del Grupo de
demandantes, la naturaleza de su reclamación y el monto de honorarios y cotos de abogados adoptados por el Tribunal.
Habrá disponibles tres tipos de beneficios monetarios a partir de los dos Fondos de Conciliación. Los Miembros del Grupo de
demandantes podrían recibir beneficios de las siguientes formas:
Tipo 1: Indemnización de devolución de producto (fondo de devolución de productos)
Los Miembros del Grupo de demandantes pueden presentar reclamaciones para regresar productos no usados ni abiertos (excluidos los
Paquetes Comerciales Internacionales y Minipaquetes Comerciales Internacionales) comprados con más de un año de antelación al
3 de febrero de 2015, la fecha límite para presentar formularios de reclamación. Después de este plazo, el Administrador de
reclamaciones publicará en el sitio web de la conciliación de demanda colectiva www.HerbalifeClassActionSettlement.com una
notificación del pago de devolución y en ese momento, usted tendrá la posibilidad de devolver los productos identificados en sus
formularios de reclamación.
Notas: Si el monto de devolución de productos excede el monto en el Fondo de devolución de productos, los pagos a los Miembros del
Grupo de demandantes se reducirán de forma proporcional para que se puedan pagar todas las reclamaciones válidas. Todo costo de
envío será pagado a partir del Fondo de devolución de productos. Si usted compró productos Herbalife dentro de un año antes del
3 de febrero de 2015, usted puede tener derecho a un reembolso en virtud de las Garantías estándares Gold de Herbalife (Gold
Standard Guarantees), que son administradas directamente por Herbalife y no forman parte de esta conciliación.
Tipo 2: Indemnización de oportunidad de negocio (Fondo de conciliación en efectivo)
Si usted (a) se adhirió a Herbalife principalmente para dedicarse a una oportunidad de negocio y su razón principal para adherirse no
fue el consumo personal y/o familiar de productos Herbalife; (b) en total, perdió dinero en productos de Herbalife en la dedicación a la
oportunidad de negocio de Herbalife; y (c) nunca ha sido miembro del GET Team o un equipo de nivel más alto, entonces es posible
que usted reúna los requisitos para una indemnización del Fondo de conciliación en efectivo con base en sus compras de
“Productos aceptables”.
Un producto Herbalife es un “Producto aceptable” si este (i) fue comprado con propósito de reventa; (ii) fue comprado dentro de los
EE. UU. y enviado a usted en un lugar de los EE. UU.; (iii) no fue vendido por mínimo el costo de compra; (iv) no fue devuelto a
través del programa de recompra de Herbalife o garantía de satisfacción de Herbalife; (v) no fue objeto de una reclamación para
compensación del Fondo de productos que haya sido registrada conforme a esta conciliación.
Indemnización prorrateada
Si usted pagó a Herbalife como mínimo 750 USD para comprar Productos aceptables durante cualquier Año de reclamación, puede ser
elegible para una indemnización prorrateada obtenida del Fondo de conciliación en efectivo igual a un 100 % de la pérdida total
estimada de sus ventas de “Productos aceptables” o un 50 % del precio que usted pago para su total de “Producto aceptable”, el monto
que sea menor. Un Año de reclamación es un periodo de doce meses que inicia y finaliza el primer día del mes en que usted se
convirtió en miembro de Herbalife.
Notas: Si las reclamaciones exceden el monto disponible para Indemnizaciones prorrateadas, se reducirán los pagos a los Miembros
del Grupo de demandantes en forma proporcional para que puedan pagarse todas las reclamaciones válidas.
Indemnización de tarifa plana
Si usted no pagó a Herbalife como mínimo 750 USD para comprar Productos aceptables durante un Año de reclamación (como se
define arriba), usted puede tener derecho a un pago de 20 USD que serán pagados a partir del Fondo de conciliación en efectivo.
Notas: Si las reclamaciones exceden el monto disponible para Indemnizaciones de tarifa plana, se reducirán los pagos a los Miembros
del Grupo de demandantes en forma proporcional para que puedan pagarse todas las reclamaciones válidas.
Todo monto restante en el Fondo de conciliación en efectivo después de los pagos especificados en la Indemnización de oportunidad
de negocio será pagado conforme a la doctrina cy pres a la siguiente organización de beneficencia o a la organización de beneficencia
que acuerden mutuamente las parten y cuente con la aprobación del Tribunal:
Consumer Federation of America (Federación de Consumidores de América)
En la medida en que se acumulen intereses sobre los montos mantenidos por el Administrador de reclamaciones antes de la
distribución conforme a lo establecido en la Estipulación de conciliación, estos le corresponderán y serán pagaderos a Herbalife.

CÓMO OBTENER UN PAGO—PRESENTACIÓN DE UN FORMULARIO DE RECLAMACIÓN
10. ¿Cómo puedo obtener un pago?
Para poder obtener un pago del Fondo de conciliación en efectivo y un Fondo de devolución de productos, debe enviar un formulario
de reclamación. Puede obtener el formulario de reclamación con el Administrador de reclamaciones en su sitio web
www.HerbalifeClassActionSettlement.com o solicitándolo por teléfono llamando a la línea 1-877-651-4185. Lea las instrucciones con
detenimiento, llene el(los) formulario(s) y firme y (si no lo llena en Internet) envíe por correo postal el(los) formulario(s) con fecha de
sello postal de a más tardar el 3 de febrero de 2015.
TO OBTAIN A NOTIFICATION IN ENGLISH, CALL OR VISIT OUR WEBSITE WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
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Pagos de devolución de productos

Para recibir un pago en virtud del Fondo de devolución de productos, debe identificar lo siguiente en su formulario de reclamación:

Número de referencia de producto (Stock-Keeping Unit, “SKU”).

Fecha estimada de compra de los productos que se van a devolver.

El monto real pagado para cada producto que usted pretende devolver.

Si no puede proveer el monto real pagado por los productos que usted pretender devolver, debe certificar bajo pena
de perjurio que usted no está en capacidad de brindar dicha información y luego indicar un monto de compra estimado.
Asumiendo que toda la otra información que usted brindó es adecuada, el Administrador de reclamaciones entonces
calculará el monto pagado como su monto de compra estimado o un 50 % del Precio sugerido de venta al público de
Herbalife para el producto en la fecha de compra, el monto que sea menor.

Para poder obtener un pago del Fondo de devolución de productos, después de que el Administrador de reclamaciones publique una
notificación del pago de devolución en Internet en www.HerbalifeClassActionSettlement.com, debe regresar el producto identificado
en su formulario de reclamación siguiendo las indicaciones detalladas en el sitio web.
Pagos de conciliación en efectivo
Para recibir un pago en virtud del Fondo de conciliación en efectivo, debe certificar, en su formulario de reclamación, bajo pena de
perjurio lo siguiente:

Usted se adhirió a Herbalife principalmente para dedicarse a una oportunidad de negocio y no por el motivo principal
de consumir personalmente (o como familia) productos Herbalife.

En total, usted perdió dinero en productos Herbalife al dedicarse a la oportunidad de negocio de Herbalife.

Usted nunca ha sido miembro del GET Team o un nivel superior.

El monto de su estimado más cercano y de buena fe de su pérdida total derivada de las ventas de productos.

Los pagos en virtud del Fondo de conciliación en efectivo serán hechos solamente para compras de Productos aprobados. Los
Productos aceptables son productos que:

Fueron comprados con propósitos de reventa.

Fueron comprados dentro de los Estados Unidos y enviados a usted en un lugar de los EE. UU.

No fueron vendidos por usted como mínimo al costo de compra.

No fueron devueltos a través del programa de recompra de Herbalife o la garantía de satisfacción de Herbalife.

No fueron objeto de un reclamo de indemnización a partir del Fondo de productos que haya sido registrado conforme a
esta conciliación.

Usted debe certificar la anterior información bajo pena de perjurio.
11. ¿Cuándo obtendría mi pago?
El Tribunal llevará a cabo una audiencia el 11 de mayo de 2015, para decidir si aprueba la conciliación. Si el juez O’Connell aprueba
la conciliación, puede haber apelaciones. Es imposible determinar con certeza si estas apelaciones pueden resolverse, y el hecho de
resolverlas puede tardar cierto tiempo. Todas las personas que envíen un formulario serán informadas del progreso de la conciliación.
Tenga paciencia.
12. ¿A qué estoy renunciando para recibir un pago y seguir formando parte del Grupo de demandantes?
A menos que se excluya usted mismo, seguirá formando parte del Grupo de demandantes, y eso significa que usted no puede
demandar, seguir demandando ni ser parte de cualquier otra demanda en contra de Herbalife sobre los asuntos legales en este caso,
salvo en la medida permitida por la Estipulación de conciliación. También significa que todas las órdenes del Tribunal, incluida una
exoneración de reclamaciones alegadas o que pudieran haber sido alegadas en la demanda, se aplicarán a usted y serán legalmente
vinculantes para usted.

EXCLUIRSE DE LA CONCILIACIÓN
Si no desea obtener un pago de esta conciliación, pero desea conservar su derecho a demandar o proseguir una demanda en contra de
Herbalife mediante sus propios medios sobre las reclamaciones legales en este caso por compensación monetaria, entonces usted debe tomar
medidas para salir del Grupo de demandantes. Esto se conoce como el nombre de exclusión, o “excluirse” del Grupo de demandantes.

TO OBTAIN A NOTIFICATION IN ENGLISH, CALL OR VISIT OUR WEBSITE WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
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13. ¿Cómo puedo salirme de la conciliación?

Para excluirse de la conciliación, usted debe enviar un Formulario de exclusión (que es está disponible en el sitio web del
Administrador de reclamaciones) o una carta por correo postal o por correo electrónico en la que indique que usted desea ser excluido
de Bostick v. Herbalife. Asegúrese de incluir su nombre, dirección, número de teléfono y firma. Debe enviar por correo postal o
electrónico su solicitud de exclusión con fecha de franqueo postal de a más tardar el 24 de marzo de 2015 a:
Bostick v. Herbalife Claims Administrator
P.O. Box 43323, Providence, RI 02940-3323
Herbalife@kccllc.com
No puede excluirse por teléfono, pero puede solicitar un Formulario de exclusión llamando al Administrador de reclamaciones al
número telefónico que se indica en esta Notificación. Si solicita ser excluido, no obtendrá ningún pago de conciliación, y no podrá
objetar la conciliación. No quedará vinculado legalmente por cualquier hecho que suceda en esta demanda. Usted puede demandar (o
proseguir su demanda contra) Herbalife en el futuro respecto a los asuntos legales de este caso.
14. Si no me excluyo, ¿puedo demandar más adelante a Herbalife por este mismo asunto?
No. A menos que se excluya, usted renuncia a cualquier derecho de demandar a Herbalife por las reclamaciones que resuelve esta
Conciliación. Debe excluirse de este Grupo de demandantes para proseguir su propia demanda. Recuerde que la fecha límite para la
exclusión es el 24 de marzo de 2015.
15. Si me excluyo, ¿puedo obtener dinero de esta conciliación?
No. Si toma las medidas para excluirse, no envíe un formulario de reclamación. Pero, puede demandar, proseguir su demanda, o
formar parte de una demanda diferente en contra de Herbalife, a reserva de la legislación aplicable a su caso.

LOS ABOGADOS QUE LO REPRESENTAN A USTED
16. ¿Tengo un abogado en este caso?
El Tribunal aprobó los bufetes de abogados de Fabian & Clendenin, P.C. de Salt Lake City, Utah, y Foley Bezek Behle & Curtis, LLP
de Santa Barbara, CA, para que lo representen a usted y a otros Miembros del Grupo de demandantes. Estos abogados se denominan
Abogados del Grupo de demandantes. A usted no se le cobrará por estos abogados. Si desea ser representado por su propio abogado en
este caso, puede contratar a uno y responsabilizarse por los gastos pertinentes.
17. ¿Cómo se les pagará a los abogados?
Los Abogados del Grupo de demandantes solicitarán al Tribunal honorarios de abogados equivalentes a un 30 % del valor de conciliación
total por un monto que no exceda los 5.250.000 USD y costas por aproximadamente 200.000 USD por hacerse cargo de este caso.
El Tribunal puede adjudicar un monto menor al solicitado. Estos montos y los costos de administrar la conciliación serán extraídos del
Fondo de conciliación en efectivo, que reducirá el monto de dinero disponible para cada miembro del Grupo de demandantes.

OBJETAR LA CONCILIACIÓN
Usted puede indicarle al Tribunal que no acepta la conciliación o alguna parte de la misma.
18. ¿Cómo puedo informar al Tribunal que no me agrada la conciliación?
Si usted es Miembro del Grupo de demandantes y no se ha excluido, puede objetar la conciliación si no le gusta alguna parte o la
totalidad de la misma. Podrá manifestar los motivos por los que cree que el Tribunal no debe aprobarla. El Tribunal considerará su
opinión. Para hacerlo, debe enviar por correo postal una objeción escrita en el caso, Dana Bostick, et al. v. Herbalife International of
America, Inc., et al., Case No. 2:13-cv-02488-BRO-RZ, a:
United States District Court
Central District of California
312 North Spring Street
Los Angeles, CA 90012
Herbalife Objections
Fabian & Clendenin, P.C.
215 South State Street, Suite 1200
Salt Lake City, UT 84151-0210

Herbalife Objections
Boies, Schiller & Flexner LLP
333 Main Street
Armonk, NY 10504

Herbalife Objections
Foley Bezek Behle & Curtis, LLP
15 West Carrillo Street
Santa Barbara, CA 93101

Herbalife Objections
Bird Marella P.C.
1875 Century Park East, 23rd Floor
Los Angeles, CA 90067-2561

TO OBTAIN A NOTIFICATION IN ENGLISH, CALL OR VISIT OUR WEBSITE WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
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Asegúrese de incluir su nombre, dirección, número de teléfono y firma junto con los motivos por los que objeta la conciliación. Su
objeción debe tener fecha de franqueo postal de a más tardar el 24 de marzo de 2015.
19. ¿Cuál es la diferencia entre presentar una objeción y excluirse?
Presentar una objeción simplemente significa decirle al Tribunal que a usted no le agrada algo acerca de la conciliación. Solo puede
presentar una objeción si usted permanece en el Grupo de demandantes. Excluirse es decirle al Tribunal que usted no quiere formar
parte del Grupo de demandantes. Si se excluye, no tendrá motivos para presentar objeciones dado que usted ya no está vinculado con
el caso.

LA AUDIENCIA DE IMPARCIALIDAD DEL TRIBUNAL
El Tribunal llevará a cabo una audiencia para decidir si aprueba la conciliación. Usted puede asistir y pedir la palabra, aunque no es
necesario que lo haga.
20. ¿Cuándo y dónde decidirá el Tribunal si aprueba o no la conciliación?
El juez O’Connell llevará a cabo una Audiencia de imparcialidad a las 1:30 p.m. en 11 de mayo del 2015 en el Tribunal de Distrito de
los Estados Unidos para el Distrito Central de California (United States District Court for the Central District of California), 312 North
Spring Street, Los Angeles, California 90012, Department 14, Spring St. Floor. En esta audiencia, el juez O’Connell considerará si la
conciliación es justa, razonable y adecuada. Si hay objeciones, el juez O’Connell las considerará. El juez O’Connell escuchará a las
personas que hayan pedido la palabra en la audiencia. El juez O’Connell también puede decidir cuánto pagar a los Abogados del
Grupo de demandantes. Después de esta audiencia, el juez O’Connell decidirá si aprueba o no la conciliación. No sabemos cuánto
tiempo tardará tomar estas decisiones.
21. ¿Debo asistir a la audiencia?
No. Los Abogados del Grupo de demandantes responderán las preguntas que pueda tener el juez O’Connell. Sin embargo, usted o su
propio abogado están bienvenidos a asistir a sus propias expensas. Si envía una objeción por escrito, no es necesario que se presente
ante el Tribunal para hablar sobre ella. Siempre y cuando haya enviado su objeción por escrito oportunamente y de conformidad con
esta Notificación, el Tribunal la tendrá en cuenta.
22. ¿Podré hablar en la audiencia?
Usted puede pedirle permiso al juez O’Connell para tomar la palabra en la Audiencia de imparcialidad. Para hacerlo, debe enviar una
carta a la direcciónes que aparece en la pregunta 18 indicando que esta es su “Notice of Intention to Appear in (Notificación de
intención de comparecer en) Dana Bostick, et al. v. Herbalife International of America, Inc., et al., Caso n.° 2:13-cv-02488-BRO-RZ.”
Asegúrese de incluir su nombre, dirección, número de teléfono y firma. Su notificación de intención de Comparecer debe tener fecha
de franqueo postal de a más tardar el 24 de marzo de 2015. No puede tomar la palabra en la audiencia si se excluyó.

SI OPTA POR NO HACER NADA
23. ¿Qué sucede si no hago nada en absoluto?
Si no hace nada, no obtendrá dinero de esta conciliación. Y a menos que se excluya, no podrá en ningún momento en el futuro
entablar una demanda, continuar una demanda, ni ser parte de ninguna otra demanda contra Herbalife sobre los asuntos legales en este
caso, salvo lo dispuesto en la Estipulación de conciliación.

OBTENER MÁS INFORMACIÓN
24. ¿Hay mayor información detallada sobre la conciliación?
La presente Notificación es un resumen de la conciliación propuesta. En la Estipulación de conciliación podrá encontrar más detalles.
Usted puede obtener una copia de la Estipulación de conciliación en www.HerbalifeClassActionSettlement.com.
25. ¿Cómo puedo obtener más información?
Puede visitar el sitio web en www.HerbalifeClassActionSettlement.com, donde encontrará respuestas a preguntas frecuentes sobre la
conciliación, un formulario de reclamación y otra información que le ayudará a determinar si usted es un Miembro del Grupo de
demandantes y si usted es elegible para obtener un pago; o puede llamar a la línea gratuita 1-877-651-4185; o escribir a Bostick v.
Herbalife Settlement Administrator, P.O. Box 43323, Providence, RI 02940-3323.

TO OBTAIN A NOTIFICATION IN ENGLISH, CALL OR VISIT OUR WEBSITE WWW.HERBALIFECLASSACTIONSETTLEMENT.COM
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Exhibit D

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 32 of 56 Page ID
#:3886
Bostick v. Herbalife Claims Administrator
P.O. Box 43323
Providence, RI 02940-3323

HIB

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Claim #: HIB-«ClaimID»
«First1» «Last1»
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
Dana Bostick, et al. v. Herbalife International of America Inc. et al.
Case No. 13-CV-02488-BRO
CLAIM FORM
Deadline for Submission: February 3, 2015 (the “Filing Deadline”)
SECTION I: GENERAL INSTRUCTIONS
If you were a Herbalife Distributor or Member in the United States from April 1, 2009 to December 2, 2014, you may be
eligible to receive the following benefits under the Settlement Agreement (the “Settlement”):
y

Product Return Award: up to a 100% refund in exchange for return of unused and unopened
products (except International Business Packs (“IBPs”) or Mini-IBPs) purchased more than
one year prior to the Filing Deadline (see SECTION IV); and

y

Business Opportunity Award: up to: (i) 100% of your estimated total loss from product sales;
(ii) 50% of the price you paid for Qualified Products (see SECTION V); or (iii) $20.

To determine your eligibility for these benefits, complete the applicable section(s) of this Claim Form, sign and date it,
and mail it, postmarked no later than the Filing Deadline, to:
Bostick v. Herbalife Claims Administrator
P.O. Box 43323
Providence, RI 02940-3323
It is important that all of the information you provide in this Claim Form is true, accurate, and complete. You may be
required to provide documentation supporting the answers you have provided. Persons who submit false or fraudulent
claims will not be eligible for compensation.
Note: You may elect to be excluded from the monetary portion of the Settlement by submitting an Opt-Out Form
(available on the Claims Administrator’s website) or sending a letter asking to be excluded on or before
March 24, 2015. See the Class Notice for more details. If you elect to be excluded from the Settlement, you will not be
eligible to receive any monetary benefits under the Settlement.

*HIB«ClaimID»*

«ClaimID»

HIBPOC1

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 33 of 56 Page ID
#:3887
SECTION II: DISTRIBUTOR/MEMBER INFORMATION
All Claimants must provide the following identifying information:
Name:
Address:
City:
State:
Zip Code:
Phone Number:
Email:
Herbalife ID Number:
SECTION III: CLAIM ELIGIBILITY
To be eligible for any Claim, you must certify that you meet the following eligibility requirements. If you do not meet
all of the following requirements, you are not eligible to make a Claim.
_______

By initialing here, I certify under penalty of perjury that I was an Herbalife Distributor or Member in
the United States for some period of time during the period from April 2009 to December 2, 2014.

_______

By initialing here, I certify under penalty of perjury that I am not an employee or immediate family
member of an employee of Herbalife.

_______

By initialing here, I certify under penalty of perjury that I was never a member of the Herbalife
President’s Team, Founder’s Circle, Chairman’s Club, Millionaire Team, or the GET Team.

_______

By initialing here, I certify under penalty of perjury that I did not sign an Arbitration Agreement for
Disputes Between Members and Herbalife contained in the Member Application Agreement dated on
or after September 2013.

SECTION IV: PRODUCT RETURN CLAIMS
You may use this section to submit a Claim for a Product Return Payment in exchange for return of unused and
unopened Herbalife products, excluding International Business Packs (IBPs) and mini-IBPs, purchased more than
one year prior to the Filing Deadline.
To determine your Product Return Payment amount, provide the following information in the table below for each unused
and unopened Herbalife product that you wish to return: (i) Herbalife Product Stock Keeping Unit (“Product SKU”)
number; (ii) the approximate date on which you purchased the product (“Purchase Date”); and (iii) the actual purchase
price paid for the product (“Actual Purchase Price). If you require additional space, please attach an addendum to this
Claim Form providing the requested information for the additional Herbalife products that you wish to return.
If you are unable to provide the actual purchase price for a particular product, please provide an Estimated Purchase Price
for that product. Assuming all other information is provided for that item, the Claims Administrator will determine the
amount paid to be the lesser of the estimated purchase price or 50% of Herbalife’s Suggested Retail Price for the product
on the Purchase Date.
-2-

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«ClaimID»

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 34 of 56 Page ID
#:3888
Product SKU

Purchase Date

Actual Purchase Price

Estimated Purchase Price

1.

$

$

2.

$

$

3.

$

$

4.

$

$

5.

$

$

6.

$

$

7.

$

$

8.

$

$

_______

By initialing here, I certify under penalty of perjury that the products listed above are unopened
and unused, and that they were purchased more than one year prior to the Filing Deadline.

_______

By initialing here, I certify under penalty of perjury that for each Estimated Purchase Price
provided above, I am unable to determine the Actual Purchase Price for that item.

The Claims Administrator will determine the amount of the Product Return Payment for which you may be eligible based
on the information you provide in the table above and the available settlement funds. Your Product Return Payment may
be reduced based on the amount of funds available to satisfy all claims (see the Class Notice for more details). By
March 2, 2015, you may view the amount of the Product Return Payment for which you are eligible (subject to proper
return
of
all
identified
products)
by
visiting
the
Claims
Administrator
Website
at
www.HerbalifeClassActionSettlement.com and providing your email address and Herbalife Identification Number.
If the Settlement is approved by the Court, you will receive notice of the approval and will be provided with instructions
on how to complete your Product Return Claim. At that time, you will be instructed to return within a specified time
period the above-listed Herbalife products that you wish to return. Once Herbalife has processed your return, a Product
Return Payment will be issued.
SECTION V: BUSINESS OPPORTUNITY CLAIMS

You may use this section to submit claims for a cash award based on losses you claim to have incurred by purchasing
Qualified Products while pursuing the Herbalife Business Opportunity. You will receive a larger payment if you return
a product by making a Product Return Claim than if you make a claim based on that purchase under this section.
To be eligible for a Business Opportunity Claim, you must certify that you meet the following eligibility requirements.
If you do not meet one or more of the following requirements, you are not eligible to make a Business Opportunity Claim.

_______

By initialing here, I certify under penalty of perjury that I joined Herbalife primarily to pursue a business
opportunity and not primarily for personal and/or family consumption.

_______

By initialing here, I certify under penalty of perjury that, in pursuing the Herbalife business opportunity,
I did not recover/earn back the amount of money I spent purchasing product directly from Herbalife
for resale.

-3-

*HIB«ClaimID»*

«ClaimID»

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 35 of 56 Page ID
#:3889 Opportunity Claim. A Qualified Product is a Herbalife
Only purchases of Qualified Products are eligible for a Business
Product that:
y

You purchased directly from Herbalife on or after April 1, 2009;

y

Was purchased for resale purposes;

y

Was purchased within the United States and shipped directly to you at a location in the United States;

y

You did not resell for at least a break-even price;

y

Was not returned through Herbalife’s buyback program, Herbalife’s satisfaction guarantee, or for which you
have made or will make a Product Return Claim under the terms of this Settlement.

Please provide the Estimated Total Loss you incurred in selling Qualified Products in the space provided below. Your
Estimated Total Loss is the difference between the total amount you paid to purchase Qualified Products and the total
revenues that you received selling those products. Your estimate must be based on the best information available to you
with which you can be reasonably certain of your claimed losses.
Estimated Total Loss:
_______

By initialing here, I certify under penalty of perjury that the Total Estimated Loss I have provided
is a good faith estimate of the losses that I incurred in selling Qualified Products.

Your Estimated Total Loss will be reviewed by the Claims Administrator using purchase history data provided by
Herbalife to ensure that your Business Opportunity Claim Award does not exceed the limits provided under the Settlement
Agreement. For an explanation of how your Business Opportunity Claim Award is determined, please refer to [Section 9
of the Class Notice]. Your Business Opportunity Claim Award may be reduced based on the amount of funds available
to satisfy all claims (see the Class Notice for more details). By March 2, 2015, you may view your Business Opportunity
Claim Award by visiting the Claims Administrator Website at www.HerbalifeClassActionSettlement.com and providing
your email address and Herbalife Identification Number.
If the Settlement is approved by the Court, you will receive notice of the approval and your Business Opportunity Award
will be issued unless you request to be excluded from the Settlement on or before March 24, 2015.

SECTION VI: CERTIFICATION AND SIGNATURE

By signing this Claim Form, you acknowledge that the Claims Administrator may ask Herbalife to provide certain
information related to your Herbalife Distributorship, including tax forms and other financial data, to verify your Claim.
I certify under penalty of perjury that the information contained in this Claim Form is true and correct to the best of my
knowledge and belief.
Signature:

Date (mm/dd/yyyy):

Print Name:

-4-

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«ClaimID»

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 36 of 56 Page ID
#:3890
Bostick v. Herbalife Claims Administrator
P.O. Box 43323
Providence, RI 02940-3323

HIB

«Barcode»
Claim #: HIB-«ClaimID»
«First1» «Last1»
«co»
«Addr1» «Addr2»
«City», «ST» «Zip»
«Country»

«MailRec»

TRIBUNAL DE DISTRITO DE LOS ESTADOS UNIDOS
DISTRITO CENTRAL DE CALIFORNIA
Dana Bostick, et al. v. Herbalife International of America Inc. et al.
Caso n.° 13-CV-02488-BRO
FORMULARIO DE RECLAMACIÓN
Fecha límite de entrega: 3 de febrero de 2015 (la “Fecha límite de entrega”)
SECCIÓN I: INSTRUCCIONES GENERALES
Si usted fue distribuidor o miembro de Herbalife en los Estados Unidos en cualquier momento después de abril de 2009,
puede ser elegible para recibir los siguientes beneficios en virtud del Acuerdo de conciliación (la “Conciliación”):
y

Indemnización de devolución de productos: hasta un 100 % de reembolso en intercambio por la devolución de
productos no usados ni abiertos (excepto Paquetes Comerciales Internacionales (International Business Packs) o
Minipaquetes Comerciales Internacionales (Mini-International Business Packs) (consulte la SECCIÓN IV); y

y

Indemnización de oportunidad de negocio: de hasta: (i) 100 % de su pérdida total estimada de las ventas de
productos; (ii) 50 % del precio que usted pagó por Productos aceptables (véase SECCIÓN V); o (iii) 20 USD.

Para determinar su elegibilidad para estos beneficios, complete la(s) sección(es) correspondiente(s) de este Formulario de
reclamación, fírmelo, féchelo y envíelo por correo postal con fecha de franqueo de a más tardar la Fecha límite de entrega, a:
Bostick v. Herbalife Claims Administrator
P.O. Box 43323
Providence, RI 02940-3323
Es importante que toda la información que usted suministre en este Formulario de reclamación sea veraz, precisa y
completa. Es posible que se le solicite proveer documentación que respalde las respuestas que usted haya suministrado.
Las personas que presenten reclamaciones falsas o fraudulentas no serán elegibles para compensación.
Nota: Puede optar por ser excluido de la porción monetaria de la Conciliación enviando un Formulario de exclusión
(que está disponible en el sitio web del Administrador de reclamaciones) o una carta en la que solicite ser excluido a
más tardar el 24 de marzo de 2015. Véase la Notificación del Grupo de demandantes para conocer más detalles.
Si usted opta por ser excluido de la Conciliación, no será elegible para recibir ningún beneficio monetario en virtud de
la Conciliación.

*HIB«ClaimID»*

«ClaimID»

HIBPCS1

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 37 of 56 Page ID
#:3891
SECCIÓN II: INFORMACIÓN DEL DISTRIBUIDOR/MIEMBRO
Todos los reclamantes deben presentar la siguiente información de identificación:
Nombre:
Dirección:
Ciudad:
Estado:
Código postal:
Número de teléfono:
Correo electrónico:
Número de ID de Herbalife:
SECCIÓN III: ELEGIBILIDAD DE RECLAMACIONES
Para ser elegible para cualquier Reclamación, debe certificar que usted cumple los siguientes requerimientos de
elegibilidad. Si no cumple todos los siguientes requerimientos, no es elegible para hacer una Reclamación.
Al poner mis iniciales aquí, certifico bajo pena de perjurio que fui distribuidor o miembro de Herbalife
_______ en los Estados Unidos por algún periodo de tiempo durante el periodo comprendido entre abril de 2009 hasta
el presente.
Al poner mis iniciales aquí, certifico bajo pena de perjurio que no soy empleado ni miembro familiar
_______ inmediato de un empleado de Herbalife.
Al poner mis iniciales aquí, certifico bajo pena de perjurio que nunca fui miembro del President’s Team
_______ (Equipo de Presidente), Founder’s Circle (Círculo del Fundador), Chairman’s Club (Club del Presidente),
Millionaire Team (Equipo Millonario), o el GET Team (Equipo GET) de Herbalife.
Al poner mis iniciales aquí, certifico bajo pena de perjurio que no firmé un Acuerdo de arbitraje para
_______ disputas entre miembros y Herbalife contenido en el Acuerdo de solicitud de membrecía fechado en
o después de septiembre de 2013.
SECCIÓN IV: RECLAMACIONES DE DEVOLUCIÓN DE PRODUCTOS
Puede usar esta sección para presentar una Reclamación para un Pago de devolución de productos en intercambio por
devolución de productos no usados ni abiertos, excluidos los Paquetes Comerciales Internacionales (International
Business Packs) o Minipaquetes Comerciales Internacionales (Mini-International Business Packs) comprados con
más de un año de antelación a la Fecha límite de entrega.
Para determinar su monto de Pago de devolución de productos, provea la siguiente información en el cuadro a
continuación para cada producto Herbalife no usado ni abierto que usted desee devolver: (i) número de referencia
(Stock Keeping Unit, SKU) del producto Herbalife (“SKU del producto”); (ii) la fecha aproximada en que compró el
producto (“Fecha de compra”); y (iii) el precio de compra real pagado por el producto (“Precio de compra real”). Si usted
necesita espacio adicional, sírvase adjuntar una adenda a este Formulario de reclamación en la que indique la información
solicitada para los productos Herbalife adicionales que usted desee regresar.
Si no está en capacidad de proveer el precio de compra real para un producto particular, sírvase proveer un Precio de
compra estimado para ese producto. Asumiendo que se suministra toda la otra información para ese artículo, el
Administrador de reclamaciones determinará que el monto pagado será el precio de compra estimado o un 50 % del
Precio sugerido de venta al público de Herbalife para el producto en la Fecha de compra, el monto que sea menor.
-2-

*HIB«ClaimID»*

«ClaimID»

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 38 of 56 Page ID
#:3892
N.° de referencia
del producto
(SKU)

Fecha de compra

Precio real de compra

Precio estimado de compra

1.

$

$

2.

$

$

3.

$

$

4.

$

$

5.

$

$

6.

$

$

7.

$

$

8.

$

$

_______

Al poner mis iniciales aquí, certifico bajo pena de perjurio que los productos antes indicados no han sido
abiertos ni usados, y que fueron comprados con más de un año de antelación a la Fecha límite de entrega.

_______

Al poner mis iniciales aquí, certifico bajo pena de perjurio que para cada Precio de compra estimado indicado
anteriormente, no estoy en capacidad de determinar el Precio de compra real para ese artículo.

El Administrador de reclamaciones determinará el monto del pago de devolución del producto para el que usted pueda ser
elegible con base en la información que usted provea en el cuadro anterior y los fondos de conciliación disponibles. Su
Pago de devolución de producto puede reducirse con base en la cantidad de fondos disponibles para atender todas las
reclamaciones (consulte la Notificación del Grupo de demandantes para obtener más detalles). Para el 2 de marzo
de 2015, usted puede visualizar el monto del Pago de devolución de producto para el que usted sea elegible (a reserva de
una devolución adecuada de todos los productos identificados) visitando el Sitio web del Administrador de reclamaciones
en www.HerbalifeClassActionSettlement.com y suministrando su dirección de correo electrónico y el Número de
identificación de Herbalife.
Si la Conciliación es aprobada por el Tribunal, usted recibirá notificación de la aprobación y recibirá instrucciones sobre
cómo completar su Reclamación de devolución de productos. En ese momento, se le ordenará devolver dentro de un
periodo de tiempo determinado los productos Herbalife antes indicados que desee devolver. Luego de que Herbalife haya
procesado su devolución, se emitirá un Pago de devolución de producto.
SECCIÓN V: RECLAMACIONES DE OPORTUNIDAD DE NEGOCIO
Usted puede usar esta sección para presentar reclamaciones para una indemnización en efectivo con base en las
pérdidas que usted reclame haber sufrido por la compra de Productos aceptables mientras se dedicaba a la
Oportunidad de negocio de Herbalife. Recibirá un pago más alto si devuelve un producto haciendo una Reclamación
de devolución de producto que si hace una reclamación con base en esa compra en virtud de esta sección.
Para poder presentar una Reclamación de oportunidad de negocio y que esta sea aceptada, debe certificar que cumple los
siguientes requerimientos de elegibilidad. Si no cumple uno o más de los siguientes requerimientos, no es elegible para
hacer una Reclamación de oportunidad de negocio.
_______

Al poner mis iniciales aquí, certifico bajo pena de perjurio que me adherí a Herbalife principalmente para
dedicarme a una oportunidad de negocio y no con el motivo principal de consumo personal y/o familiar.

_______

Al poner mis iniciales aquí, certifico bajo pena de perjurio que, al dedicarme a la oportunidad de
negocio de Herbalife, no recuperé/gané de vuelta el monto de dinero que gasté al comprar el
producto directamente de Herbalife para reventa.
-3-

*HIB«ClaimID»*

«ClaimID»

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 39 of 56 Page ID
#:3893
Solo las compras de Productos aceptables son elegibles para una Reclamación de oportunidad de negocio. Un Producto
aceptable es un Producto de Herbalife que:
y

usted compró directamente de Herbalife en o después del 1 abril de 2009;

y

haya sido comprado con propósito de reventa;

y

haya sido comprado dentro de los Estados Unidos y haya sido enviado directamente a usted en un lugar en los
Estados Unidos;

y

usted no haya vendido por mínimo el precio de compra;

y

no haya sido devuelto a través del programa de recompra de Herbalife, garantía de satisfacción de Herbalife, o para el que
usted haya hecho o hará una Reclamación de devolución de producto en virtud de los términos de esta Conciliación.

Sírvase indicar la Pérdida total estimada que usted haya asumido al vender los Productos aceptables en el espacio que se
provee a continuación. Su Pérdida total estimada es la diferencia entre el monto total que usted pagó para Productos
aceptables y los ingresos totales que usted recibió de la venta de dichos productos. Su estimado debe basarse en la mejor
información de la que usted disponga con la que usted pueda estar razonablemente seguro de sus pérdidas reclamadas.
Pérdida total estimada:
_______

Al poner mis iniciales aquí, certifico bajo pena de perjurio que la Pérdida estimada total que he indicado es
un estimado de buena fe de las pérdidas en que he incurrido al vender los Productos aceptables.

Su Pérdida total estimada será revisada por el Administrador de reclamaciones usando los datos de historial de compras
suministrado por Herbalife para asegurar que su Indemnización de reclamaciones de oportunidad de negocio no excede
los límites establecidos en virtud del Acuerdo de conciliación. Para obtener una explicación de cómo se determina su
Indemnización de reclamación de oportunidad de negocio, sírvase consultar [Sección 9 de la Notificación del Grupo de
demandantes]. Su Indemnización por Reclamación de oportunidad de negocio puede reducirse con base en la cantidad de
fondos disponibles para atender todas las reclamaciones (consulte la Notificación del Grupo de demandantes para obtener
más detalles). Para el 2 de marzo de 2015, puede consultar su Indemnización de reclamación de oportunidad de negocio
visitando el Sitio web del Administrador de reclamaciones en la dirección www.HerbalifeClassActionSettlement.com y
suministrando su dirección de correo electrónico y el Número de identificación de Herbalife.
Si la Conciliación es aprobada por el Tribunal, recibirá la notificación de la aprobación y se emitirá su Indemnización de
oportunidad de negocio a menos que usted solicite ser excluido de la Conciliación a más tardar el 24 de marzo de 2015.
SECCIÓN VI: CERTIFICACIÓN Y FIRMA
Al firmar este Formulario de reclamación, usted reconoce que el Administrador de reclamaciones puede solicitar a
Herbalife que provea cierta información relacionada con su Distribución de Herbalife, lo que incluye formularios de
impuestos y otros datos financieros, para verificar su Reclamación.
Certifico bajo pena de perjurio que la información contenida en este Formulario de reclamación es veraz y correcta a mi
leal saber y entender.
Fecha (mm/dd/aaaa):

Firma:
Nombre en letra de imprenta:

-4-

*HIB«ClaimID»*

«ClaimID»

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 40 of 56 Page ID
#:3894

Exhibit E

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 41 of 56 Page ID
#:3895

KCC Class Action Services
Bostick v. Herbalife International of America Inc et al.
Exclusion Report

Count
687
ClaimID
10001892001
60003162001
60001543101
10008656101
10010368601
10023295401
10026059701
10026204101
60000147001
60002325801
10033031901
10038939901
10041053401
10050334201
60000346501
10052982301
10054898201
10058211401
10058482201
10059061501
10060775501
60001483601
10072615001
10073502201
10074110101
60003142701
10084337201
60001651401
10094568501
10095585001
10096468001
10097223801
10097684001
10098352201
10098471001
10098702301
60003028601
60003065001
10100515501
10100778401
10104192501
10107561301
60002034001

Last Name
ABRAHAM
ABREU
ACOSTA
ADAMS
AGOVINO
ALBA
ALCAZAR
ALCOCER
ALEXANDER
ALLGEYER
ALMANY
ALVARADO
ALVAREZ
AMMU
ANDERSEN
ANDERSON
ANDRADE
ANGUIANO
ANGULO
ANNETTE
AOCHI-BORDON
ARAYA
ARIZA
ARMENTA
ARMSTRONG
ATCHISON
AVALOS
AVILA
BADILLO
BAEZA
BAILEY
BAIONE
BAKER
BAKER
BAKKEM
BALBANEDA
BALDRIDGE
BALL
BALLARE
BALLEW
BARAJAS
BARKEY
BARNUM

First Name
TIFFANY
ALLAN
YADIRA
SHAWNDA
KATHLEEN
GUILLERMINA
MARTA E
JOSEFINA
ALICIA
EILEEN
DAVID
MANUELA
ALEXANDRA
RAMA SUNDARI
GLORIA
KALEENA R
LUCINDA
LUIS A
DELFINO
HUNTER
SHINOBU
JOSE M
PABLO
CARLOS
DEBBI S
LISA
AARON
ROSA MARIA
MARIA DE LOS ANGELES
MARIA C
ANGEL D
DAVID
BRIAN L
SUSAN M
KELLY M
MARIA
HAZEL
MYA
KAREN E
TAMMY
CLAUDIA
ERICA N
EVERETT

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 42 of 56 Page ID
#:3896

ClaimID
60000661201
60003167501
10125345001
10125594901
10126621201
10129762201
60003062801
10134060601
10138949801
10139446901
10139613201
10141090601
10141316601
10141785801
60000059101
10142707401
60003036601
10142918601
60003147101
10147389801
60002759801
10150675201
60000532501
10152955701
10153962901
60001513601
10155945801
60001314101
10168915901
10166586601
60003153001
10169638301
10169904901
10173826201
10175281701
10176121101
10176744401
60002556001
10177970701
10180880001
10181440901
10182537701
60001852001
10188797801
10191581001
10196261701
60000726201
10198267701
10200245901
10201969101
10205079001

Last Name
BARTOSH
BASS
BEHN
BEJAR
BELL
BENAVIDEZ
BERGESON
BERGMAN
BETANCUR
BEVER
BEYER
BILLS
BINION
BISCH
BISHOP
BLACK
BLACK
BLACKMAN
BLOCK
BOFF
BOLER
BONILLA
BONO
BOROK
BOTELLO
BOWLIN
BOYD
BRANDENBURG
BROWN
BROWN
BROWN
BROWNELL
BRUCE
BUITRAGO
BURGEN
BURKE
BURNETT
BURY
BURZOTTA
BYRD
CABALLERO
CABRAL
CABRERA
CALDERON
CALVILLO
CAMPER
CAMPOS
CAMPOS
CANCINO
CANO
CARBAJAL

First Name
JAMES
TAMICA
JAIME B
MARIA
PATRICIA A
SOPHIA R
RICHARD B
ERIC D
ARELYS
DEBRA K
JULIE
KATHLEEN S
KASEY
KATIE L
ANNETTE
MICHELLE D
CAROLYN
AINKA A
WAYNE
LEON C
JAMES
MARTHA
VINCENT
ADAM
MARIA C
JAMES
ANGELA D
DONALD
RONALD L
AKEMI M
ALICIA
DEBORAH W
ALICE F
HEYSOL I
SHERRY
DONALD F
JEROME
DAVID
ANTONINO
ELLIOT
ANCELMA
ALICIA A
ARISDELCI
NATALIA
GERARDO
MARLA H
JUDY
ROSA E
OSCAR
MARIA E
DANIEL R

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 43 of 56 Page ID
#:3897

ClaimID
10205956101
10207136601
60003144901
10209523101
10209695801
10210483901
60000348701
60003165301
70000332001
10231147001
10229672801
60000490101
10233755001
60001445001
10236114901
60001794701
10238353401
60000439901
10241157801
10245022501
70003475401
10249189601
10250466001
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10253548601
10259740601
10263682501
60001300601
70000500601
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10270479001
10271543901
10272029001
10273375201
10279360801
10281534301
10282387001
10285685001
10291083201
10293063601
10296172401
10296971101
60000170001
10312389101
10315476001
10317529501
10320765001
10321820801
10321998501
10322954101
10323547401

Last Name
CARCAMO ORTIZ
CARDENAS
CARDOZA
CARE
CAREY
CARLOS
CARPENTER
CARTER
CASTILLO
CASTILLO
CASTILLO
CASTLLO
CASTRO
CASTRO
CASTRO
CAVASOS
CAVINESS
CEBRERO
CELEDON
CERVANTES
CHAINAY
CHANDARLIS
CHAPMAN
CHAVEZ
CHAVEZ
CHERIYAN
CHRISTENSEN
CHRISTENSEN
CIBRIAN
CISNEROS
CLAYTON
CLINESMITH
COATES
COFFIN
CONDON
CONTRERAS
CONTRERAS
COPELAND
CORONEL
CORTAZAR
CORTEZ
CORTINO
CRANE
CRUZ BARCENAS
CUEVAS
CUNNINGHAM
DALE
DAN
DANFORTH
DANIELSON
DARIUS-RICHARDS

First Name
ELDYN
LUIS A
SARAH
ANITA S
SAMANTHA M
CRIZAM C
ANDREA
DANIEL
JOSE
VERONICA
MARIA DEL ROSARIO
ERAN
GISELA
DANIELA
TERESA
ANGELITA
BRUCE H
YESENIA
ALICIA
MARLEN
RITA
MICHAEL A
MARYLAN M
DORA C
CRISTINA
SUJA
JERRY R
JENNIFER
SOCORO
JESUS T
SANDRA
JONNA M
KAMIE D
SARA A
CARA
FELIPE
MARIA
PATSY A
ESTELA M
WENDY
MONICA E
MITCHEL L
SHANNON
MAGALY
ANA
KENYA D
CECILE D
RYAN
PORTIA ELAINE
SUSAN
DEBROAH L

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 44 of 56 Page ID
#:3898

ClaimID
10323735501
60002395001
10329336001
10331046001
60001643401
60000208701
10347013001
70003558801
10351620701
10351679701
60003092301
60000920201
60002758701
10366231501
60002391701
60001195101
60003171101
10374975501
10378054301
60000144801
10380130301
10380455901
10381372001
10382529001
10382528901
60002393901
60002183101
60003025301
10383923901
60000088601
60003071901
10386350301
60001624101
60003154001
10390845601
10394229401
10396894501
60003044601
60000345401
60003116501
60002705501
60001077701
10419866701
10421535501
60002869201
60003043501
60001430401
60002717901
10426273401
10426720301
60000875301

Last Name
DAROTITHY
DAVILA
DE ARMAS
DE LA CRUZ
DEASE
DEMARCUS
DENNIS
DIAL
DIAZ
DIAZ
DIETZ
DLUGOPOLSKI
DOMINGUEZ
DOMINGUEZ
DORSEY
DRESSLER
DUNAGAN
DUNCANSON
DURHAM
EAKMAN
EATON
EBRAHIM
ECKMAN
EDWARDS
EDWARDS
EISCHEID
EISENBERG
EISENHARD
EKSUZIAN
ELDRIDGE
ELKINS
ELLIS
ENGLISH
EPPARD
ERICKSON
ESCOBAR
ESPARZA
ESPINAL
ESPINOZA
ESTIGARRIBIA
ESTRADA
EUBANK
FERNANDEZ
FERRANDO
FERREIRA
FIALLOS
FIERRO
FIGUEROA
FILSON
FINLEY
FLICK-NARMORE

First Name
SANDRA P
ROSARIO
RHODERICK G
FRANCY J
SHELLEY
BRIAN
MICHELLE S
JOHN
CHARLOTTE AURORA
CLAUDIA
ANNA
PAMELA
JESUS
RUTH
SUSAN
JAMES
MAUREEN
LAN
HARLEY N
JANET
BARBARA J
EZZAT
MONICA B
KIMBERLY L
KIMBERLY L
CAROL
ELI
JOANNE
CYNTHIE E
CATHERINE
ROSALIND H
L KAREN
JANET
BILLIE
BRANDI L
MARIA
LETICIA
EVA GRACIELA
PALMIRA
HUGO
HAYDE
KAYE
LEONOR
KARLA M
DANIEL
MARIO
GRICELDA
MARIA
RICHELLE A
DONNA R
SUSAN

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 45 of 56 Page ID
#:3899

ClaimID
60002620101
60003130301
60001124801
10441398001
10442371701
10448403201
10449042101
10449119001
10449518201
10450021901
10450509601
10450780901
10450939901
10452146601
10452494701
60003077401
10460452901
10462605701
10463080201
60001821401
10467553601
60001466501
60003170001
10469645001
10489513501
10490181001
10487621901
10482668001
10470890601
10491637001
10495099701
60003030001
10497281601
60000843601
10501475801
10502472701
10504532901
60003072001
10507445701
60002212001
60003117601
10513709101
60003040201
60002881901
60003169701
10532566101
60002905001
10525463001
60003115401
10544781001
60003164201

Last Name
FLIETH
FLORES
FOATE
FOLEY
FONTANEZ
FRANK
FRASER
FRAUSTO
FRAZIER
FREEMAN
FREISINGER
FRESCAS
FREY
FROST
FRYE
GALLAEDO
GALLAGHER
GALLEGOS ZACARIAS
GALOPE
GAMEZ
GARBER
GARCIA
GARCIA
GARCIA
GARCIA
GARCIA
GARCIA
GARCIA
GARCIA
GARCIA DOMINGUEZ
GARMON
GARRISON
GARZA
GAUDENCIO
GEESMAN
GEORGE
GIBBS
GILLESPIE
GILMOUR
GLENN
GOMEZ
GOMEZ
GOMEZ
GONZALES
GONZALES
GONZALEZ
GONZALEZ
GONZALEZ
GORDAN
GORDON
GORTON

First Name
MICHAEL
MARLENY
LISA
CHRIS M
TERESA
SONIA J
PHYLLIS M
ALICIA
TERRELL D
INGRID H
JOYCE A
ERIN
PEGGY L
AFONZA C
WILLIAM C
ANTONIO
JANICE
ROSA MARIA
AUDREY A
MARÍA ISABEL
JOANN C
GUADALUPE
DEYSI
ANGELITA
TATYANA
VICTOR
ROSA
MARIA ESTHER
BRENDA A
ESTELA
PAIGE
LEE
JUANITA E
CELIA
ISAAC
JEROME
AUDIE J
JILL
JANET L
SAMUEL B
PAVEL
ANA L
MARIA
CORINA
SALLY
JORGE
STEPHANIE
AGUSTINA
ARMANNI
CYNTHIA S
MICHAEL

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 46 of 56 Page ID
#:3900

ClaimID
60000166301
60003026401
10547821001
10552709901
60001261501
10553557601
10554120501
10558496401
10568106401
10572039201
60003107401
10579325501
60000098801
60001704001
10582627301
60000074001
10588388801
10591456301
10591779501
10592394101
60001076601
10593406901
60001289601
10593558001
60000146001
60002260801
10598631801
10600570401
10622361601
10612212501
60002479301
10626835101
10627934801
10627829001
10627905101
10631554701
10633828601
10635556901
60003101901
10640031901
60002959301
60003168601
60003149301
60000042301
60001580601
10646525901
60000405001
10650519101
10650540301
60003143801
60000730901

Last Name
GOTTLIEB
GRAHAM
GRAMOWSKI
GREMS
GRIECO
GRIFFIN
GRIMALDI
GUDENKAUF
GUTIERREZ
GUTIERREZ
GUZMAN
HACKMAN
HALE
HALL
HAMEL
HANSEN
HARRIS
HASTINGS
HATFIELD
HAVLICEK
HAWKINS
HAYES
HAYES
HAYHURST
HEIMAN
HENDERSON
HENRY
HERNADEZ
HERNANDEZ
HERNANDEZ
HERNANDEZ
HERNESMAN
HERRERA
HERRERA
HERRERA
HERRERA VASQUEZ
HIDROGO
HILL
HO
HOKANSON
HOLLIDAY
HOLMES
HOLMQUIST
HOOVER
HORN
HOWLETT
HUAMANI
HUGHES
HUGHES
HUME
HURTADO PEREZ

First Name
MICHAEL
DEBORA
BRUCE M
VALERIE R
KATHLEEN
WYNNETTE C
LEEANN J
KELLY
ANA I
MAYELA
ISABEL
LUZ F
CYNTHIA
SHARON
BETTY
JOAN
DOREEN D
AMANDA G
VERONICA
MYRA
KRISTEN
MARIA B
SCOTT
SANDRA
RHONDA
DARYL
JORDAN E
JANET
SANTOS RAFAEL
JUAN J
LIBRADA
RAYMOND J
DEYSI
CRISTINA A
DEBBIE C
SAMUEL ALEJANDRO
MARIA E
NANCY A
MARY
MEGHAN C
MONICA
TERESA
LINDA
CAROLYN
TAMARA
TERRI
JIM
PEGGY J
ROBYNE L
LINDA
ESTHER

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 47 of 56 Page ID
#:3901

ClaimID
60003118701
10655117601
10663641801
10663992401
60003161001
60000462801
10667506001
10669036001
10669292601
60003033301
10672275001
10674673001
60000838901
10676252701
10682291301
10686258301
60000916601
60001735701
60003166401
10693326701
10700625001
10702735501
10703245401
60000502001
10703703801
60003104101
10706085101
10706746801
10707888001
60003135801
10712498101
60001477801
60003079601
10716191601
60001709501
60002784901
60000237101
10719130101
60003091201
10720658401
10721085001
10721150601
60000986901
60003150701
10723705201
60003152901
60001629601
60000627001
10733415001
60001535101
10736109701

Last Name
HYRE
HYTCHE
JABLONSKY
JACKOLA
JACKSON
JAIME
JAIMES
JANE
JANKOVIC
JARRELL
JAUREGUI-VARGAS
JENSEN
JEWELL, II
JILL
JIMISON
JOHNSON
JONES
JORDAN
JORDAN
JOYCE
KARCZEWSKI
KEAN
KEENE
KEGERREIS
KEIVER-HEWETT
KELEMEN
KENSIL
KERSTEN
KIBBLE
KING
KLEIN
KLEIN
KNOLLHOFF
KOPETS
KORBER
KROPF
KRUG
KRULL
KULLMAN
KURTZ
KWOCK
KWONG
KYLE
LAGUNAS PALACIOS
LAHTI
LANGE
LARA
LARSON
LAUER
LAVERTY
LAZO

First Name
MELISSA
KATHRYN
HEATHER
ROBERT E
BOBBI JO
YANET
LORENA
MORGAN
ANDJELKA
MARY
REBECCA
LESLEE RAE
PORTER
GOLDEN N
JERMY L
MICHAEL
LEIGH
LEON
JOSEPH
PATRICK M
SARAID A
SAMUEL NATHAN
JO R
LEIGH
GWENDOLYN J
LISA
LISA A
MARY B
BETTY L
PAUL
AMY L
DAVID
DANIEL
LILIYA
DENNIS
ELMA
TIMOTHY
TAMMIE L
MICHELENE
BETH A
DOUGLAS
MAN-FAI
NANCY
BEATRIZ
STEPHANIE D
JENNA
MARIA L
LYN
JOHN D
JAMES
MAGALI D

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 48 of 56 Page ID
#:3902

ClaimID
60001607001
60003155101
10740171001
60001620801
10743044701
60000086401
60001633201
60001378601
60003112101
60000364701
60003055901
10754880001
60002118301
10755985701
60003133601
60002215301
60002639101
10764218901
10778654001
10764367401
10781532101
10778165701
10773897101
10785838101
60002877201
10790857801
10791169301
10791718001
60001940001
10794855201
10795714001
10799740001
10803202401
60001036901
10805190001
10809429701
10814232201
60000607701
10820532001
60002537701
10821748601
10823386801
60002533301
10825887701
60001399001
10850894801
10839768301
60000038701
10858189501
60003067201
10859147501

Last Name
LEBLANC
LEDEZMA
LEE
LEGG
LEMONS
LEPINE GARCIA
LESSOW
LEVANDER
LEWIS
LEWIS
LINDBERG
LINDELL
LIPKA
LIPPI
LIZARRAGA
LLIVIZACA (CESPEDES)
LOAYES
LOPEZ
LOPEZ
LOPEZ
LOPEZ
LOPEZ
LOPEZ
LORENZ
LORENZO
LUCARI
LUCAS
LUCERO
LUCIANI
LUMBRERAS
LUNA
LYTLE
MACINTOSH
MACLUKIEWICZ
MADRIGAL
MALAGON
MANDRAS
MANJI
MARICHE
MARIN
MARIN
MARMOL-MARTINEZ
MARQUEZ
MARRERO
MARTIN
MARTINEZ
MARTINEZ
MAST
MATOS
MATTHEWS
MATURINO

First Name
LYNN
MARIA
KAREN R
DENISE
DOYLE R
PIERRE CARLOS
CINDY
JENELL
KRISTEL
LINDA
WANDA
JOY M
DENISE
EDNA M
BLANCA
ROSA
LUCIA
ADONIS F
OFELIA
AIDA N
TERESA
NANCY
LETICIA Y
JOYCE J
DORKA
JESSICA
MICHAEL F
GUILLERMINA
ROBERTA
RICARDO
HELEN U
FREDERICK N
GARY R
KATARZYNA
MARIA
MARIA
MARIA L
RYHANA
MAYRA
CARMEN
YOLANDA
IRWIN M
MARIA
BREGMA J
GLEN
VICTOR M
JORGE
DENNIS
MARISOL
CANDACE
MARIA D

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 49 of 56 Page ID
#:3903

ClaimID
10861230201
60003080001
10861963101
60003041301
60001582801
10863889301
10864664601
60000614601
10869487201
10870636901
60003140501
10871844001
10874121701
60001470101
60003056001
10873223001
60003127801
10884892901
10902864801
10904368601
10905532901
10906912201
10906939001
10908104301
10908314301
60001039101
10911775001
10911864901
60001326501
10914521501
60001032501
10920769501
10922203901
60000427501
10931726901
10930761601
10932417101
10934107701
60001722201
60000817401
60002181001
60000317001
60000360301
10951515801
60000240701
60003084301
60000216701
60003123401
10966058401
60000700301
10967612901

Last Name
MAYES
MAYNE
MAYORGA
MAZO
MCCALL
MCCALLUM
MCCLEERY
MCCLENNY
MCKENNEY
MCLEOD
MCNEIL
MCQUEEN
MEDINA
MEDINA
MEDINA
MEDINA
MEJORADO
MELLEN
MEYERS
MEZESKI
MIDDLEBROOKS
MILES
MILES
MILLER
MILLER
MINNS
MIOT
MIRABELLA
MIRAKIAN
MIRICH
MOLINA-AGUILA
MONARREZ
MONIZ
MONTERROSO
MOORE
MOORE
MORA
MORALES
MORENO
MORGAN
MORRISON
MORRISON
MORYN
MOSCOSO HERRERA
MRACZEK
MURIEL
MYLES
NAJARRO
NAJERA
NAQUIN
NARVAEZ

First Name
LYNN M
DEBORAH
ROGER
JOHANA
CONSTANCE
BEVERLY J
KAREN N
KATRINA
JUDITH C
JENNIFER L
JUDY
CHRIS
EVA
MARIA
FEDERICO
ALICIA
JENNIFER
DARLENE
KIMBERLY A
ANNA
CHRIS J
AMY R
DEANNA
COLETTE
DONOVAN D
LARS
MARIE
ISENIJA J
MELISA
ROCK
LIZET
MANUELA
MARIA AS
MIREYA
REBECCA P
ANTHONY D
CLAUDIA
ANA
FRANCISCO
PATRICIA
DORA
HEATH
DIANE
WILMER OMAR
THOMAS
ANA
JANCEY
BRENDA
RODOLFO
CRAIG
GRISELDA

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 50 of 56 Page ID
#:3904

ClaimID
10974874801
60003049001
10976873501
60003160901
10978555101
60000063801
10982507001
10985200001
60002140101
10986850001
10991431401
10992481201
10995691601
10997350101
10998152201
60002824001
60003125601
11007573001
70000877901
11010494801
11016340001
11025721201
11026683301
60003052601
60003035501
11037909301
11039236001
11040918801
11040959001
11044751701
11048469101
11048924001
60003081001
60003086501
11051278901
60003137001
11056330001
60000963201
60001843001
11077032801
60000072901
11080728501
60003095601
60003100801
11091434001
11091949001
11092558001
60003139101
11102619201
11104607501
60003105201

Last Name
NELSON
NELSON
NEULS
NEWELL
NGUYEN
NIEDER
NIEVES
NOLASCO JR
NORBERG
NORWARD
NYDEREK
O'BRIEN
O'CONNELL
OJEDA
OLAIS
OLIVARES
ONEY
ORELLANA
OROZCO
OROZCO
ORTIZ
OWSLEY
PACE
PACHECO
PADILLA
PANUCO JIMENEZ
PAREDES
PARKER
PARKER
PATEL
PAXTOR
PAYNE
PEARSON
PECINA
PEDERSON
PENA DE LA TORRE
PENALOZA DELEBRA
PEREZ
PEREZ
PERRY
PETSCH
PHELPS
PINEDA
PLAISTED
PLEASANT
PLUTZKER
POLACH
POLANCO
PRICE
PRUNEAU
PULIDO

First Name
AMY J
MELISSA
KERRI A
DEBORAH
AN H
ANGELA
JIMY
FEDERICO
JEFFREY
JAIME M
MARY LOU
SHIRLEY A
RENEE J
JOAQUIN
YAMEL
DEYANIRA
SUSAN
LUIS A
GUSTAVO
LUISA
ELSA
CYNTHIA A
DONNA
DENNIS
VILMA
BRENDA VERENICE
GERONIMA
LISA G
MEGAN E
BHAGVATI
PAULA
MICHAEL S
ROSIE
MARIBEL
LORELEI R
JOSE
CLAUDIA
VICTOR H
MARINA
HOLLIE R
NANCY
PHYLLIS
MARIBEL
ERIN
CHARLIE H
PAUL
MEGAN M
YSABEL
RUTH C
THOMAS
MARINA

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 51 of 56 Page ID
#:3905

ClaimID
11107370401
60001233101
11116467901
60000795401
11128346201
60001825801
60000551801
11126594001
60002984401
11139330901
11145187501
11146861901
60000884401
11148222701
60002594501
11154890101
11156494301
60001817801
11159551401
60003054801
60002835301
11178033001
60000804001
11182222101
11185367901
11186957201
11189535201
60001479001
60000933701
11207239201
11199481001
11200861601
11190769001
11198395201
60002853501
60001332301
60000047801
60000328301
60002166001
60003073001
11230728001
11232756401
11235940101
60001981801
60001306101
11254216501
60003106301
60003064001
11280677601
60001960301
60003024201

Last Name
PURVES
QUINONES
RAFAEL
RAMIREZ
RAMIREZ
RAMIREZ
RAMIREZ
RAMIREZ
RAMOS
RANGEL
REDUS
REHAUME
REISINGER
REMACHE
RESENDEZ
REYES
REYES
REYES
REYES DE CONTRERAS
RIVAS
RIVERA
RIVERA
ROBERTS
ROBERTS
ROBLES
ROCHA
RODRIGUES
RODRIGUEZ
RODRIGUEZ
RODRIGUEZ
RODRIGUEZ
RODRIGUEZ
RODRIGUEZ
RODRIGUEZ
RODRIGUEZ GARCIA
ROETHKE
ROGERS
ROGERS
ROMERO
ROQUE PANTON
ROSER
ROWLAND
RUELAS
RUIZ
SALAZAR
SALDIVAR
SAMFORD
SANCHEZ
SANTA CRUZ
SANTAFERRARA
SANTIAGO

First Name
PATRICIA L
YESENIA
VERONICA
MARTIN
PATRICIA
ANGEL P
JUANA
MARIA NATIVIDAD
CECILIA
IDALIA
MARSHA L
GEORGE H
DAN
ADREANA J
CIDALIA
INES ANDINA
MARIA
NOEMI
ERIKA DEL CARMEN
OSCAR
ROBERTO
NANCY L
AMY
NACI
JOSUE
IRMA C
CHRISTINA A
MARIA
MELINDA
RUBI
JULISSA
LUZ ELBA
AMY M
JORGE
ANAIS
JENNIFER
REED
ANGELA
TERESA
RAISA
JAMIE L
ROBERT
TERESA
ROCIO
ANGELA
AURELIA
JAMES
MYRNA
MARIA ESMERALDA
TERI
GISSEL

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 52 of 56 Page ID
#:3906

ClaimID
11283194101
11293140601
11293709301
11295149101
11295602601
60003151801
60000199101
11297995601
11299013701
11301054001
60000553001
60003156201
60002080601
11309188601
11312683901
11316709001
11317067101
11318912601
11320790601
11321482001
11322514301
60000101801
11324051001
60001697701
11324939101
11330082701
11329040801
60000096601
60001764101
60001763001
11337182201
11338152901
11345913001
11346973101
11347433701
60001673001
11349490701
11349780501
60002130001
11354616601
11355141101
11355894601
11355986001
11357506301
60003039901
60000760401
60000189001
11366955001
60000217801
60000107301
11373407401

Last Name
SANTIAGO
SCARBROUGH
SCHAR
SCHMIDT
SCHNEIDER
SCHROEDER
SCHULTZ
SCHWERTEL
SCOTT
SEGOVIA
SENNE
SERNA
SETU
SHARER
SHIRLEY
SILLERUD
SILVA
SILVA
SIMMONS ARZU
SIMPSON
SINGH
SIRIGNANO
SKALA
SLAGOSKI
SLAUGHTER
SMITH
SMITH
SMITH
SMITH
SOLONOSKI
SOMERS
SORIA
SPEEDE
SPOFFORD
SPROULL
STAMM
STANTON
STARKS
STEFFES
STOKER
STONE
STRADER
STRAMA
STUBER
STYRON
SUBBIONDO
SUMRALL
TALLMAN
TANG
TAYLOR
TAYLOR

First Name
GIOVANNI
GLORIA A
STEPHANIE D
KAREN
ANNE C
JOYCE
DEBRA
RONALD T
ROBERT A
MARISELA
SUSAN
SONIA
IOSEFA SETU
MARY CHARLENE
DOYLE S
LINDSEY R
BLANCA BARBARA
RUDY S
TASHA
BRENDA C
DELIA R
JESSICA
JARED J
SALLY
ANGELA R
SKIPPER
MARK A
JO ANN
BRIANA
MICHAEL
SUSAN F
MARIA M
JOSE M
TOM
CHRIS
GREGORY
THARSILLA C
KESHANA N
CONNIE S
ROD
ROD J
JENNIFER S
MARIA
CYNTHIA
DIANE
DENNIS
BOB
KATHY S
QI
SONJA
TAVARES L

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 53 of 56 Page ID
#:3907

ClaimID
60002370201
60003053701
60002106001
11374683001
11374763901
11376213601
60003090101
60000930401
60002205101
60000065001
11384587001
60003124501
11386563601
60003148201
60003069401
11393449001
60003070801
60000085301
60003134701
11410989801
60003075201
11412840601
11413789401
60003034401
60002335001
60000562001
11434315901
11437362001
60000521201
60003027501
11444311701
11449894501
11451101901
11455433001
11457163601
11456609401
11461807001
60003126701
60003146001
60001949801
11467277501
60002152501
60002129601
11476072001
60000678001
60000266601
60000417301
11483645001
11485770201
11486609001
11486621101

Last Name
TAYLOR
TAYLOR
TEALE
TEJEDA
TEJEDA
TELLO
TERRY
THEIS
THOMAS
THOMAS
THUECKS
TIETYEN
TINO
TONDREAU
TORRES
TORRES
TOVAR-TORRES
TRUMAN
TUCKER
TUCKER
TURNER
TURNER
TYLER
UMEH
UPCHURCH
VALENZUELA
VARGAS
VARGAS
VARGAS
VAUGHN
VAZQUEZ
VEGA
VELA
VELAZQUEZ
VELEZ
VELEZ
VERNESS
VIERA
VIKE
VILLA
VILLAFANA
VILLALVAZO
VILLANUEVA
VITAL
VLLE
WALLACE
WALTH
WARD
WATERS
WATT
WATTERS

First Name
LAURA
MARIA
LINDA
ALONDRA
FLORA
PERLA
DEBORAH
BONNIE
ADAM
RAYE
TOM J
NOREEN
DIANE V
MILDRED
PAULA
BLANCA
JONICE
KIM
MEREDITH
CHRISTINE
CRYS
LAWRENCE E
LA'KESHIA L
VIVIAN
BRIANNE
YOCELYN
ALEXANDRA
RICHARD
KARLA
JANET
BARBARA LIZ
OSCAR W
VALENTIN V
LILIA E
ROLANDO
CARMEN
KAY L
JUAN
KELSEY/SHERRY
ENRIQUE
ALMA Y
MAGDALENA
OLGA
MARIA GUADALUPE
ELVA
TARA
CHERIE K
EDNA M
TAMMY
VIOLET
DANA C

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 54 of 56 Page ID
#:3908

ClaimID
60001525001
60000111001
60003088701
11489816901
11493655901
60000850501
11493427701
60003098901
60000078401
60000841401
60003083201
60000121101
900007001
11502489001
11502780401
11504878901
11505241001
11506559301
11508758801
11508760601
11510196201
11513902301
60003122301
60002243701
11518061801
11518659101
900005201
11524852301
11527167301
60001134001
60002516201
11532973001

Last Name
WAYMAN
WEATROWSKI
WEIR
WELLIVER
WHITE
WHITE
WHITE
WHITMER
WIEGAND
WILLIAMS
WILLIAMS
WILLIAMS
WILLIAMS
WILSON
WILSON
WISE
WITMAN
WONG
WORM
WORM
WROBLESKI
YATES
YEPES
YODER
YURIVILCA
ZACCARELLO
ZARATE-GOMEZ
ZAVALA
ZELKO
ZHUNGUR
ZUNIGA
ZUNUN

First Name
BILL
JEAN
CARLYE
JEROME A
LAUETA M
MELODY
JEFF
LEUMA
GLEN
LARRY
WALTER
VALERI
FRANKIE
GABRIEL
KELLY A
MATT
KATRINA P
ELDON
MARY ANN
PAUL C
CHRISTINA M
EMILY A
GLORIA
IVA
MAYOK
CAROLE
AVELINA
ERIKA
SANDRA C
DINORAH
MATILDE
SILVINO

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 55 of 56 Page ID
#:3909

Exhibit F

Case 2:13-cv-02488-BRO-SH Document 130-5 Filed 04/13/15 Page 56 of 56 Page ID
#:3910

KCC Class Action Services
Bostick v. Herbalife International of America Inc et al.
Objection Report

Count
18
ClaimID
10005277001
10088205501
10188753001
10277344001
10292167201
10319136701
10403534101
10478274201
10737763901
10849046401
10882558901
11034853901
11044411501
11073076801
11188709401
11365850301
900008301
60001554401

Last Name
ACOSTA
AVILA
CALDERON
COLON
CORREA
CUTZAL
ESTALA
GARCIA
LEON
MARTINEZ
MELCHOR
PALMA
PASTRAN
PEREZ
RODENSKY
TAFOYA
TORRES
ULLOA

First Name
ELVIA
SABAS
MIGUEL A
FELIPE
ELIZABETH
MARIA CONSUELO
JUANA
JOSE G
VALENTINA
ROSSINA I
GILBERTO
MARTIL A
YADER A
SUSANA
ERIC J
JOSE
OLIVIA
JULIO

Case 2:13-cv-02488-BRO-SH Document 130 Filed 04/13/15 Page 1 of 56 Page ID #:3659

1
2
3
4
5

Philip D. Dracht (SBN 219044)
pdracht@fabianlaw.com
Scott M. Petersen (pro hac vice)
spetersen@fabianlaw.com
Jason W. Hardin (pro hac vice)
jhardin@fabianlaw.com
Fabian & Clendenin
215 South State Street, Suite 1200
Salt Lake City, UT 84151-0210
Telephone: (801) 531-8900

6
7
8
9
10
11
12

Thomas G. Foley, Jr., SBN 65812
tfoley@foleybezek.com
Justin P, Karczag, SBN 223764
jkarczag@foleybezek.com
Foley Bezek Behle & Curtis, LLP
15 West Carrillo Street
Santa Barbara, CA 93101
Telephone: (805) 962-9495
Attorneys for Plaintiffs Dana Bostick,
Anita Vasko, Judi Trotter, Beverly
Molnar, and Chester Cote

13
IN THE UNITED STATES DISTRICT COURT

14
15

CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

16
17
18

DANA BOSTICK, a California
citizen, et al.,

19
20

PLAINTIFF,
vs.

Case No.: 2:13-cv-02488-BRO-RZ
PLAINTIFFS’ MEMORANDUM
IN SUPPORT OF FINAL
APPROVAL OF CLASS ACTION
SETTLEMENT

21
22
23
24

HERBALIFE INTERNATIONAL
OF AMERICA, INC., a Nevada
Corporation, et al.,
DEFENDANTS.

Hon. Beverly Reid O’Connell
Hearing Date: May 11, 2015
Time: 1:30 p.m.
Courtroom: 14

25
26

Complaint filed: April 8, 2013

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28
Case No. 2:13-cv-02488-BRO-RZ
MEMORANDUM IN SUPPORT OF JOINT MOT. FOR PRELIM. APPROVAL OF SETTLEMENT

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1
2

TABLE OF CONTENTS
TABLE OF AUTHORITIES ................................................................................... iii

3
4
5

I. INTRODUCTION ............................................................................................... 1
II. CLASS NOTICE COMPLIED WITH THE COURT’S ORDER, RULE 23(c),
AND DUE PROCESS ............................................................................................... 4

6

A. Direct Notice ................................................................................................. 5

7

B. Notice Available at the Settlement Website ................................................. 6

8

C. Class Counsel Responded to and Advised Claimants .................................. 7

9

D. Late Claimants .............................................................................................. 7

10

E. Claim Amounts ............................................................................................. 8

11

F. Notice Satisfied the Requirements of Rule 23(c) and (e) ............................. 8

12
13

III. FOR PURPOSES OF SETTLEMENT, THE SETTLEMENT CLASS
MEETS THE REQUIREMENTS OF RULE 23 ....................................................... 9

14

IV. THE SETTLEMENT IS FAIR, REASONABLE, AND ADEQUATE ........... 9

15

A. Strength of Plaintiffs’ Case ......................................................................... 12
B. The Expense and Likely Duration Absent a Settlement ............................. 14
C. The Risk of Certifying and Maintaining Class Action Status Throughout
the Trial Warrants Approval .................................................................... 14
D. The Amount Offered in Settlement ............................................................ 16
F. Recommendation and Views of Experienced Class Counsel ..................... 20
G. Governmental Input into the Settlement Agreement .................................. 20

16
17
18
19

H.The Positive Reaction of the Class to the Settlement .................................. 21
1.Few Class Members Objected to the Settlement .......................................... 21
2.The Settlement Response Rate Was In Line with Other Class Actions Given
the Challenges of this Litigation .............................................................. 22

20
21
22
23
24
25

V.

THE OBJECTIONS TO THE SETTLEMENT LACK MERIT .................... 24
A. The Business Opportunity Fund Compensates for Legally Cognizable
Losses ............................................................................................................... 24

26

B. The Brooks Objectors Misunderstand the Law, the Facts and the Risks
Related to the Packaging & Handling and FedEx Freight Charge Claims ...... 28

27

C. All Class Members Who Did Not Agree to Arbitrate Can Make Claims. . 32

28
i

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1
2
3
4
5
6
7
8

D. Consequential Damages Are Not Recoverable Under the Court’s Prior
Ruling or Any Theory of Restitution ............................................................... 33
F. The Corporate Reforms Provides Substantial Benefit to the Class to the
Detriment of Herbalife ..................................................................................... 39
1. The Changes to Herbalife’s Corporate Policies Address Allegations in the
Amended Complaint and are Valuable to the Settlement Class. ............. 40
2. The Timing or Duration of the Corporate Reforms does not Diminish Their
Value. ....................................................................................................... 44
G. The Release Is Appropriate......................................................................... 46
H. Class Notice and Claims Process Satisfies Due Process ............................ 47
I. Cy Pres Recipient........................................................................................ 47

9
10

VI. CONCLUSION ............................................................................................... 48

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24
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26
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ii

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MEMORANDUM IN SUPPORT OF JOINT MOT. FOR PRELIM. APPROVAL OF SETTLEMENT

Case 2:13-cv-02488-BRO-SH Document 130 Filed 04/13/15 Page 4 of 56 Page ID #:3662

TABLE OF AUTHORITIES

1
2

CASES

3

Arnold v. Fitflop USA, LLC, No. 11-CV-0973 W KSC, 2014 WL
1670133, at *6 (S.D. Cal. Apr. 28, 2014) ........................................................... 46

4

Astiana v. Kashi Co., 2014 U.S. Dist. LEXIS 127624 (S.D. Cal. 2014) .................. 7

5

Baghdasarian v. Amazon.com, Inc., 2009 WL 4823368 (C.D. Cal.
Dec. 9, 2009)................................................................................................. 28, 29

6
7
8
9
10
11
12
13
14
15
16
17
18

Boyd v. Bechtel Corp., 485 F. Supp. 610 (N.D. Cal. 1979) .................................... 20
Brazil v. Dole Packaged Foods, LLC, No. 12-CV-01831-LHK, 2014
WL 5794873, at *14 (N.D. Cal. Nov. 6, 2014) .................................................. 30
Bruno v. Quten Research Inst., LLC, No. SACV 11-00173 DOC EX,
2013 WL 990495, at *1 (C.D. Cal. Mar. 13, 2013) ........................................... 46
Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566 (9th Cir. 2004) ............ 11, 20, 22
Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (9th Cir. 1992) ..................... 10, 20
Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) .................................... 15, 21, 30
Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977) ...................................................... 9
Day v. AT&T Corp., 63 Cal. App. 4th 325 (1998) .................................................. 30
Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012)........................................ 17, 18
Dennis v. Kellogg Co., No. 09-CV-1786-L WMC, 2013 WL 6055326,
at *2 (S.D. Cal. Nov. 14, 2013) .......................................................................... 39

19

Dremak v. Iovate Health Scis. Group, Inc. (In re Hydroxycut Mktg. &
Sales Practices Litig.), 2014 U.S. Dist. LEXIS 162106 (S.D. Cal.
2014) ..................................................................................................................... 7

20

Ellis v. Naval Air Rework Facility, 87 F.R.D. 15 (N.D. Cal. 1980) ........................ 20

21

F.T.C. v. BurnLounge, Inc., 753 F.3d 878 (9th Cir. 2014) ................................ 12, 15

22

Fisher v. A.G. Becker Paribas, Inc., 791 F.2d 691 (9th Cir. 1986) ........................ 32

23

Fulford v. Logitech, Inc., 2010 U.S. Dist. LEXIS 29042 (N.D. Cal.
2010) ..................................................................................................................... 7

24
25
26
27
28

Guerrero v. Wells Fargo Bank, N.A., No. C 12-04026 WHA, 2014
WL 4351113 (N.D. Cal. Sept. 2, 2014) ........................................................ 45, 46
Harris v. Vector Mktg. Corp., 2011 U.S. Dist. LEXIS 117927 (N.D.
Cal. 2011) ............................................................................................................. 7
Henderson v. Gruma Corp., No. CV 10-04173 AHM AJWX, 2011
WL 1362188 (C.D. Cal. Apr. 11, 2011) ............................................................. 38
iii

Case No. 2:13-cv-02488-BRO-RZ

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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

In re Amway Corp., 93 F.T.C. 618 (1979)............................................................... 43
In re Apple iPhone/iPod Warranty Litig., 2014 U.S. Dist. LEXIS
64573, 40 (N.D. Cal. 2014) ................................................................................ 48
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th
Cir.2011) ............................................................................................................. 10
In re Dry Max Pampers Litig., 724 F.3d 713 (6th Cir. 2013) ................................. 45
In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454 (9th Cir.2000) ................. 10, 12, 19
In re NASDAQ Market–Makers Antitrust Litig., 187 F.R.D. 465
(S.D.N.Y. 1998) .................................................................................................. 22
In re Packaged Ice Antitrust Litig., No. 08-MDL-01952, 2011 WL
6209188 (E.D. Mich. Dec. 13, 2011) ................................................................. 24
In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009)................................................ 29
Jermyn v. Best Buy Stores, L.P., No. 08 Civ. 214 CM, 2012 WL
2505644, at *6 (S.D.N.Y. 2012) ......................................................................... 24
LaGarde v. Support.com, Inc., 2013 WL 1283325 (N. D.Cal. March
26, 2013) ............................................................................................................. 12
Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012). ............................... 17, 39, 48
Lanovaz v. Twinings North America, Inc., 2014 WL 1652338, Case
No. C-12-02646-RMW (N.D. Cal. April 24, 2014) ........................................... 30
Larsen v. Trader Joe’s Co., No. C 11-05188 SI, 2012 WL 5458396
(N.D. Cal. June 14, 2012) ................................................................................... 38

18

Li v. EFT Holdings, Inc., 2:13-cv-08832-DSF-CW, Dkt No. 121; 2015
U.S. Lexis 1065 at *4, (C.D.Cal. 2015) ............................................................. 33

19

Linney v. Cellular Alaska P’ship, 151 F.3d 1234 (9th Cir. 1998)..................... 16, 19

20

Marshall v. Holiday Magic, Inc., 550 F.2d 1173 (9th Cir. 1977) ........................... 21

21

Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir.Cal.2012) ........................ 12

22

Miller v. Ghiradelli Chocolate Co., No. 12-CV-04936, 2015 WL
758094 (N.D. Cal. Feb. 20, 2015) ................................................................ 45, 46

23
24

Molski v. Gleich, 318 F.3d 937 (9th Cir. 2003) ....................................................... 11

25

Moore v. Verizon Commc'ns Inc., No. C09-1823 SBA, 2013 WL
4610764 (N.D. Cal. Aug. 28, 2013) ............................................................. 39, 45

26

Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) ........................ 10, 14, 17, 47

27

Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523
(C.D. Cal.2004) ................................................................................ 10, 20, 21, 38

28

iv

Case No. 2:13-cv-02488-BRO-RZ

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Case 2:13-cv-02488-BRO-SH Document 130 Filed 04/13/15 Page 6 of 56 Page ID #:3664

1

Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615 (9th Cir.
1982) ............................................................................................................... 9, 11

2

Parks v. Portnoff Law Assoc., 243 F. Supp. 2d 244 (E.D. Pa. 2003) ...................... 24

3

Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir. 2014) ............................................. 45

4

Rodriguez v. W. Publ'g Corp., 563 F.3d 948 (9th Cir. 2009) .............................. 8, 10

5

Searle v. Wyndham International, Inc., 102 Cal. App. 4th 1327 (Cal.
Ct. App. 2002) .................................................................................................... 28

6
7
8
9
10
11
12
13
14
15

Siber v. Mabon, 18 F.3d 1449 (9th Cir. 1994)........................................................... 8
Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301 (9th Cir.
1990) ................................................................................................................... 17
Speigler v. Home Depot, U.S.A., Inc., 552 F.Supp.2d 1036 (C.D. Cal.
2008) ................................................................................................................... 29
Staton v. Boeing Co.,327 F.3d 938 (9th Cir. 2003). .......................................... 44, 45
Stoetzner v. U.S. Steel Corp., 897 F.2d 115 (3d Cir. 1990) .................................... 22
Torres v. Pet Extreme, No. 1:13-CV-01778-LJO, 2015 WL 224752
(E.D. Cal. Jan. 15, 2015) .................................................................................... 45
Touhey v. United States, No. EDCV 08-01418-VAP (RCx), 2011 WL
3179036 (C.D. Cal. July 25, 2011) ..................................................................... 24

16

Utility Reform Project v. Bonneville Power Admin., 869 F.2d 437 (9th
Cir. 1989) ........................................................................................................ 9, 10

17

Van Bronkhorst v. Safeco Corp., 529 F.2d 943 (9th Cir. 1976) .......................... 9, 10

18

Vassalle v. Midland Funding, LLC, 708 F.3d 747 (6th Cir. 2013) ......................... 45

19

Wal-Mart Stores Inc. v. Dukes, 131 S. Ct. 2541 (2011) .................................... 14, 38

20

Werdebaugh v. Blue Diamond Growers, No. 12–CV–2724–LHK,
2014 WL 2191901 (N.D. Cal. May 23, 2014) ................................................... 30

21
22

White v. Experian Info. Solutions, Inc., 803 F. Supp. 2d 1086 (C.D.
Cal. 2011) ..................................................................................................... 21, 24

23

STATUTES

24

9 U.S.C.
§ 3 ....................................................................................................................... 37

25
26
27

28 U.S.C.
§ 1715 (Class Action Fairness Act) ...................................................................... 6

28
v

Case No. 2:13-cv-02488-BRO-RZ

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1
2
3
4
5

Fed. R. Civ. P.
§ 23(c) ................................................................................................................... 9
§ 23 (e) .................................................................................................................. 9
Cal. Bus. & Prof. Codes
§17200 .............................................................................................. 28, 29, 30, 38
§17203 ................................................................................................................ 30
§17500 ................................................................................................................ 38

6
7

California Civil Code
§1689.2 ............................................................................................. 18, 25, 33, 34

8
9

TREATISES

10

Manual for Complex Litigation, 4th, §21.62 ............................................................. 3

11

Newberg on Class Actions § 12:17 (5th ed.) ........................................................... 24

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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1 I.
2

INTRODUCTION
The settlement meets and exceeds the standards for final approval under Rule

3 23(e). After careful consideration, the Court granted preliminary approval to the
4 proposed class settlement (the “Settlement”) on December 2, 2014. [Dkt. No. 105.]
5 The Settlement is substantial and delivers significant value to directly compensate
6 Class Members who purchased product from Herbalife and lost money in pursuing
7 their Herbalife distributorship, and to Class Members who want to return any
8 Herbalife product for a full refund. After this Court granted preliminary approval,
9 direct notice was sent to all Class Members; direct notice was mailed and emailed
10 to 92.91% of the Class; there were 484 opt-outs to the Settlement; and there were
11 only 21 objections, of which 18 were represented by the same counsel.
12

The Settlement was reached after extensive formal and informal fact and

13 class discovery had been conducted, class discovery had closed, and after Plaintiffs
14 had become fully informed about the strengths and weaknesses of their case.
15 Herbalife had strong defenses regarding both the merits of the claims and regarding
16 class certification, defenses that Plaintiffs have acknowledged in their Settlement
17 approval briefs and supporting papers. The intense and protracted negotiations
18 lasted for over eight months and were supervised by the Hon. Daniel Weinstein
19 (Ret.) and his co-mediator, Cathy Yanni, Esq. Those negotiations culminated in a
20 Settlement providing significant benefits to Class Members:
21

The Defendants deposited $15 million in cash into an escrow account for,

22 pending final approval by this Court, the benefit of the Class to create a “Cash
23 Settlement Fund” to be distributed to eligible Class members. The Cash Settlement
24 Fund compensates Class Members who joined Herbalife primarily to pursue a
25 business opportunity (and not primarily for personal and/or family consumption of
26 Herbalife products) and who lost money on the sale of Herbalife products pursuing
27 that business opportunity. There will be no reversion of any unclaimed settlement
28 funds to the Defendants.
1

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1

Defendants agreed to pay up to an additional $2.5 million in cash for,

2 pending final approval of the Court, the benefit of Class Members who had unused
3 and unopened product they wished to return for a full refund from a “Product
4 Return Fund.”
5

Defendants have agreed, pending final approval of the Court, to institute or

6 maintain for three years, thirteen specific corporate policies that benefit Class
7 Members who continue as distributors and new members who join Herbalife
8 relating to terminology used by Herbalife to describe its business practices,
9 transparency regarding success and failure of Herbalife members, and clarifications
10 to the membership agreement and marketing plan to make them less confusing.
11

The parties agree that for any leftover funds from the Cash Settlement Fund,

12 the Court may oversee the distribution of those funds under the cy pres doctrine to
13 Consumer Federation of America.
14

If the Court awards less than the fees and costs requested by Plaintiffs’

15 Counsel, the difference will remain in the Cash Settlement Fund to be distributed to
16 the Class or the cy pres recipient. Under no circumstance will there be any reversion
17 of the Cash Settlement Fund to the Defendants assuming the Settlement becomes
18 effective under its terms.
19

The value of the Settlement also is increased by the efforts that the parties

20 have taken to reach Class Members, to encourage them to file claims, and to
21 maximize the payout from the two settlement funds. Under the Preliminary
22 Approval Order, the Settlement has been communicated to each Class Member
23 individually through a robust and intensive direct email and mail Notice Plan
24 coordinated by Kurtzman Carson Consultants, LLC (“KCC”) including the mailing
25 of Short Form Notices to 796,594 Class Members and email to 736,556 Class
26 Members for whom current email addresses were available.
27

The Settlement terms ensure that Class Members can claim benefits with

28 minimum effort. To take advantage of the product return component and obtain a
2

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1 full refund, class members only had to identify the SKU number of the product
2 (contained on the label of the product they wanted to return) that they purchased
3 either from Herbalife or from a Class Member’s up-line.
4

To take advantage of the Cash Settlement Fund, Class Members needed only

5 to list the amounts lost in reselling Herbalife products purchased directly from
6 Herbalife, subject to a common-sense fraud protection, such that a claim could not
7 be for over 50% of what a Class Member paid Herbalife for Herbalife product. As
8 foreseen in and allowed by the Settlement Agreement and in light of the number
9 and amount of claims made, the parties have agreed (as set forth in
10 contemporaneous filings) to increase that ceiling to allow claims up to 75% of what
11 a claimant Class Member paid Herbalife for Herbalife products.
12

For those Class Members that purchased less than $750 worth of product

13 from Herbalife, who presumably purchased product for self-consumption, they had
14 only to certify that in their business efforts they lost money on reselling product,
15 which entitled them to a $20 refund check. Finally, all Class Members still
16 Herbalife distributors benefit from the agreement to institute or maintain certain
17 corporate reforms that benefit Class Members doing nothing.
18

As to the 18 objectors represented by attorney Douglas Brooks [] (“Brooks

19 Objectors”), there appears to have been an organized effort to band together
20 distributors to object to this settlement as reported in the New York Post on
21 November 2, 2014, days after the settlement was announced. (Dracht Decl. ¶4.) It is
22 noteworthy that in spite of hosting an anti-Herbalife event (attended by William
23 Ackman and a representative of the “National Consumer’s League”) (Dracht Decl.
24 ¶8) they could only find 18 distributors to object.1 The attorney for the Objectors
25 discloses in his declaration in opposition to the settlement that:
26
27
1

Manual for Complex Litigation, 4th, §21.62 (in evaluating proposed settlements an

28 “organized campaign,” does not necessarily reflect the sentiments of the class at-large).
3

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1

Over the course of the past several years I have met, spoken with and

2

corresponded with representatives of Pershing Square Capital

3

Management, L.P. (“Pershing”) concerning Herbalife, the MLM

4

industry and, more recently, my intention to file this objection.”

5

[(italics added).]

6

There has been extensive publicity that William Ackman of Pershing Square

7 has made a $1 Billion short wager that Herbalife’s stock price will decrease. (Foley
8 Decl. ¶4, Exhibit G.) It has recently been disclosed that the U. S. Attorney for
9 Manhattan and the FBI are investigating whether individuals hired by Ackman have
10 made false statements about Herbalife’s business model to regulators to spur
11 investigations into the company and lower its stock price. (Foley Decl. ¶4, Exhibit
12 G.) Apart from the relationship, whether actual or perceived, between the Brooks
13 Objectors and William Ackman and Pershing Square, the Court should overrule the
14 objections based on their merits as discussed below.
15

The proposed Settlement is fair, reasonable, and adequate. It has been

16 reached after years of litigation and discovery, and after extensive arm’s-length,
17 intensely fought negotiations conducted by respected mediators. Plaintiffs seek final
18 approval of the Settlement and certification of the Class for settlement.
19 II.

CLASS NOTICE COMPLIED WITH THE COURT’S ORDER, RULE

20

23(c), AND DUE PROCESS

21

The notice program complied with the Court’s Preliminary Approval Order.

22 That program had six components: (i) direct emailed notice in either English or
23 Spanish; (ii) direct, mailed postcard notice in either English or Spanish for those
24 Class Members that had no email address on file or whose email addresses resulted
25 in a “bounce back” upon initial email notice; (iii) a long-form notice (in English and
26 Spanish) available for viewing or download on the Internet; (iv) a settlement
27 website (in English and Spanish), where claims were filed and, once all claims had
28 been submitted, where participating Class Members could check prior to the date
4

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1 for objecting or filing claims to determine the minimum amount they could expect
2 to receive if the Settlement is approved; (v) a settlement website where Frequently
3 Asked Questions were posed and answered regarding the Settlement, and (vi)
4 telephone help lines (for English and Spanish-speaking Class Members) for which
5 to contact Class Counsel to answer any questions that a Class Member had
6 regarding the settlement or filing a claim. All materials related to the Settlement
7 that were made available to Class Members were made available both in English
8 and Spanish. When distributors originally signed up with Herbalife to become
9 distributors they could check a box requesting that materials be sent to them in
10 English or Spanish. KCC was provided that data, and sent all Settlement related
11 materials in Spanish to those individuals who had checked the box on their original
12 Herbalife application that they wanted materials sent to them in Spanish.
13
14

A.

Direct Notice

On December 30, 2014, KCC, a nationally renowned claims administrator,

15 emailed the Short Form notice via email to 1,051,342 potential Class Members and
16 mailed the Short Form notice via direct mail to 481,883 Class Members, as
17 approved by the Court. (Declaration of Eric Robin Re: Notice Procedure dated
18 April 13, 2015 (“Robin Decl.”), ¶¶4, 5.) These potential Class Members were
19 identified in data that Herbalife provided to KCC from its distributor records, which
20 contained contact information (email or mail) for those eligible Class Members. For
21 the mailed notices, KCC processed the records through the National Change of
22 Address database to update any addresses on file with the United States Postal
23 Service. (Robin Decl. ¶4.) Following the email notice, on January 9, 2015, KCC
24 mailed additional notices to 314,711 people whose email notice was undeliverable,
25 and KCC has followed up with mail notice to those class members whose postcards
26 have been returned where KCC has located new addresses. (Robin Decl. ¶¶9, 10.)
27
28

Class members could request (by mail, phone, or by email) that a paper
version of the Long Form Notice and/or claim form be mailed to them and KCC
5

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1

has fulfilled 3,793 such requests. (Robin Decl. ¶12.) Herbalife provided Notice of

2

the Settlement, in accord with the Class Action Fairness Act (28 U.S.C. §1715),

3

via Certified Mail, to all States’ Attorneys General, the U.S. Attorney General, and

4

the Attorneys’ General for U.S. possessions and territories. [Dkt No. 101.]

5
6

B.

Notice Available at the Settlement Website

The Long Form Notice and other case information are available at the

7 Settlement Website, www.hebalifeclassactionsettlement.com, which was launched
8 on December 29, 2014. (Robin Decl. ¶13.) This website is interactive and includes
9 the following information and features: (i) a description of the Settlement; (ii) a list
10 of important dates, including the date set for the Final Fairness hearing and
11 deadlines for Class Members to object, opt-out, and file claims; (iii) Long Form
12 Notice, Settlement Agreement, and Preliminary Approval Order; (iv) an online
13 claims filing feature, which allowed Class Members with an Herbalife ID number to
14 file a claim online with or without having received an email or mail postcard
15 Notice; (v) answers to frequently-asked questions, including instructions on how to
16 submit a claim for those Class Members who wished to print, complete, and file
17 with KCC a paper Claim Form instead of filing a Claim Form online; (vi) contact
18 information for KCC, including the case-dedicated mailing address, toll-free
19 telephone number, and e-mail address; and (vii) telephone numbers for both English
20 and Spanish-speaking Class Members to contact Plaintiffs’ counsel for questions
21 regarding the settlement. See www.herbalifeclassactionsettlement.com. Hundreds of
22 Class Members, including Spanish speakers, contacted Class Counsel (including
23 counsel fluent in Spanish) for advice on the Settlement. (Declaration of Philip
24 Dracht (“Dracht Decl.”), ¶9.)
25

The interactive claim-filing feature of the website became available to Class

26

Members on December 30, 2014. Claims could be filed as follows: (i) Class

27

Members to whom the Notice was emailed or mailed with a Claim ID, could enter

28
6

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1

the assigned Claim ID; (ii) Class Members who did not have their Claim ID but

2

who knew their Herbalife ID could enter the Herbalife ID.

3

Based on the foregoing Notice Program, KCC estimates that the combined

4 email and postcard individual notice efforts were to approximately 92.91% of Class
5 Members. (Robin Decl. ¶11.)2 And the Settlement has received significant press
6 attention, including stories published in LaOpiniõn (Los Angeles), El Dario La
7 Prensa (New York), La Raza (Chicago), El Mensajero (San Francisco), Rumba
8 (Houston), Reuters, Bloomberg Business, Slate, AP, New York Post, National Law
9 Journal, news.yahoo.com and many other publications. (Dracht Decl. ¶3.)
10
11

C.

Class Counsel Responded to and Advised Claimants

The website and long form notice directed Claimants with questions

12 regarding the Settlement to call Class Counsel at two telephone numbers, one for
13 English speaking claimants and one for Spanish speaking claimants. Class Counsel
14 responded to over 300 calls from claimants that had questions. (Dracht Decl. ¶9.)
15
16

D.

Late Claimants

Because those claimants that did not have an initially valid email or mailing

17 address may have received their postcard notice after the deadline to file a claim
18 had run, Class Counsel secured Herbalife’s agreement to allow for those claimants
19 to submit late claims. (Dracht Decl. ¶10.) Class Counsel continued responding to
20 inquiries from English and Spanish speaking claimants and worked with KCC to
21 provide those late claimants with claim forms to fill out and submit. (Dracht Decl.
22
23
24
25
26
27
28

2

Astiana v. Kashi Co., 2014 U.S. Dist. LEXIS 127624, 18-19, 32 (S.D. Cal.
2014) (granting final settlement approval when the notice reached 83% of the class
members); Dremak v. Iovate Health Scis. Group, Inc. (In re Hydroxycut Mktg. & Sales Practices
Litig.), 2014 U.S. Dist. LEXIS 162106, 175, 190 (S.D. Cal. 2014) (granting final settlement
approval when notice reached approximately 81.1% of class members); Fulford v. Logitech, Inc.,
2010 U.S. Dist. LEXIS 29042, 3-4 (N.D. Cal. 2010) (granting final settlement approval—and
finding that the settlement was “duly noticed”—when notice reached 85% of the class
members); Harris v. Vector Mktg. Corp., 2011 U.S. Dist. LEXIS 117927, 5, n. 1 (N.D. Cal.
2011) (finding that when 10% of the notices were not deliverable, this constituted a “small”
amount).
7
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1 ¶11.) Class Counsel has since secured the agreement of Herbalife to reopen the
2 website until at least April 30, 2015 to allow late claimants to make claims online to
3 expedite the process. (Dracht Decl. ¶11.) On the five objectors who claimed never
4 to have received timely notice, Class Counsel secured the agreement of Herbalife to
5 allow submission of their claims, sent their counsel claim forms, and received and
6 are processing their claims with those of other late claimants. (Dracht Decl. ¶14,
7 Exhs. C and D.) The two pro se objectors who filed objections with the Court
8 stating that they had not received timely notice, Armstrong and Jong, submitted
9 claim forms and have now withdrawn their objections. (Dracht Decl. Ex. B.)
10
11

E.

Claim Amounts

On March 3, 2015, KCC provided notice of each claimant’s Business

12 Opportunity Claim award and/or Product Return Payment on the settlement
13 website, with the opportunity for claimants to provide substantiating information if
14 they disputed the award amount. (Robin Decl. ¶23.)
15
16

F.

Notice Satisfied the Requirements of Rule 23(c) and (e)

The notice to the Class was adequate and satisfied both Rule 23 and due

17 process. Under Rule 23(e)(1), the court must direct notice in a reasonable manner to
18 all class members bound by the proposal. Rule 23 requires only that the best notice
19 practicable rather than actual notice is provided.3 “Notice is satisfactory if it
20 generally describes the terms of the settlement in sufficient detail to alert those with
21 adverse viewpoints to investigate and to come forward and be heard,”4 particularly
22 where there is a robust direct mail and email notice – here direct notice to over 1.55
23 million potential Class Members. In approving the Notice Program, the Court found
24 that the content of the notices and the methods of dissemination “(a) meet the
25 requirements of due process and Fed. R. Civ. P. 23(c) and (e); (b) constitutes the
26
27

3
4

28

Siber v. Mabon, 18 F.3d 1449, 1453 (9th Cir. 1994).
Rodriguez v. W. Publ'g Corp., 563 F.3d 948, 962 (9th Cir. 2009)
8

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1 best notice practicable under the circumstances to all persons entitled to notice; and
2 (c) satisfies the Constitutional requirements regarding notice.” [Dkt. No. 105.] KCC
3 reports that all of the elements of the preliminary notice requirements in the
4 Preliminary Approval Order were completed. (Robin Decl. ¶¶4-13.)
5

III.

FOR PURPOSES OF SETTLEMENT, THE SETTLEMENT CLASS

6

MEETS THE REQUIREMENTS OF RULE 23

7

The Court already has provisionally certified the Settlement Class, appointed

8 the Class Representatives and appointed Co-Lead Counsel to represent the
9 Settlement Class Members, and made findings under Rule 23. [Dkt. No. 105.] As
10 set forth in Plaintiffs’ Memorandum Supporting the Motion for Preliminary
11 Approval, [Dkt No. 94], the Joint Declaration of Thomas G. Foley and Scott M.
12 Petersen, [Dkt No. 96], and the Court’s Preliminary Approval Order, [Dkt. No.
13 105], which pleadings are incorporated here by this reference, the Settlement Class
14 satisfies the class certification requirements set forth in Rule 23(a) and Rule
15 23(b)(3). So as not to add to an already lengthy brief, Plaintiffs will not repeat those
16 points again here.
17
18

IV.

THE SETTLEMENT IS FAIR, REASONABLE, AND ADEQUATE
It is well established in the Ninth Circuit that “voluntary conciliation and

19 settlement are the preferred means of dispute resolution.”5 “Of course, the very
20 essence of a settlement is compromise, a yielding of absolutes and an abandoning of
21 highest hopes.”6 Class action suits readily lend themselves to compromise because
22 of the difficulties of proof, the uncertainties of the outcome, and the typical length.
23 Beyond question “there is an overriding public interest in settling and quieting
24 litigation,” and this is “particularly true in class action suits.”7 Approval of a class
25
26

Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615, 625 (9th Cir. 1982).
Officers for Justice, 688 F.2d 615, 624 quoting Cotton v. Hinton, 559 F.2d 1326, 1330
(5th Cir. 1977).
7
Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 950 (9th Cir. 1976); see also Utility
Reform Project v. Bonneville Power Admin., 869 F.2d 437, 443 (9th Cir. 1989).
9
Case No. 2:13-cv-02488-BRO-RZ
5
6

27
28

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1 action settlement is a matter within the sound discretion of the court, reviewable
2 “for clear abuse of discretion.”8 Rule 23(e) “requires court approval of all class
3 action settlements, which may be granted only after a fairness hearing and a
4 determination that the settlement taken as a whole is fair, reasonable, and
5 adequate.”9 To make this determination, “the Court must balance against the risks
6 of continued litigation (including the strengths and weaknesses of Plaintiffs’ case),
7 the benefits afforded to members of the Class, and the immediacy and certainty of a
8 substantial recovery.”10
9

[t]he Court shall consider the vagaries of litigation and compare the

10

significance of immediate recovery by way of the compromise to the

11

mere possibility of relief in the future, after protracted and expensive

12

litigation. In this respect, “It has been held proper to take the bird in

13

hand instead of a prospective flock in the bush.”11

14

The Ninth Circuit has set forth several factors which may be considered and

15 balanced in evaluating the fairness of a class action settlement:
16

[1] [T]he strength of plaintiffs’ case; [2] the risk, expense, complexity,

17

and likely duration of further litigation; [3] the risk of maintaining class

18

action status throughout the trial; [4] the amount offered in settlement;

19

[5] the extent of discovery completed, and the stage of the proceedings;

20

[6] the experience and views of counsel; [7] the presence of a

21
22
23
8

In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 940 (9th Cir.2011) (reversing

24 approval where settlement provided for no recovery for economic injury for class members but
25 allowed for $100,000 in cy pres award, $800,000 in fees, and $12,000 in incentives)
26
27
28

citing Rodriguez, 563 F.3d 948, 963.; See, also, Class Plaintiffs v. City of Seattle, 955 F.2d 1268,
1276 (9th Cir. 1992).
9
In Re. Bluetooth, 654, F.3d at 946; City of Seattle, 955 F.2d at 1276.
10
In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir.2000).
11
Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 526 (C.D.Cal.2004)
(citations omitted).
10
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1

governmental participant; [9] and the reaction of the class members to

2

the proposed settlement.12

3

The importance of any of these factors “will depend upon and be dictated by

4 the nature of the claims advanced, the types of relief sought, and the unique facts and
5 circumstances presented by each individual case.”13 In exercising its discretion, “the
6 court’s intrusion upon what is otherwise a private consensual agreement negotiated
7 between the parties to a lawsuit must be limited to the extent necessary to reach a
8 reasoned judgment that the agreement is not the product of fraud or overreaching by,
9 or collusion between, the negotiating parties, and that the settlement, taken as a
10 whole, is fair, reasonable and adequate to all concerned.”14
11

The Ninth Circuit defines the limits of the inquiry to be made:

12

[T]he settlement or fairness hearing is not to be turned into a trial or

13

rehearsal for trial on the merits. Neither the trial court nor this court is

14

to reach any ultimate conclusions on the contested issues of fact and

15

law which underlie the merits of the dispute, for it is the uncertainty of

16

outcome in litigation and avoidance of wasteful and expensive

17

litigation that induce consensual settlements. The proposed settlement

18

is not to be judged against a hypothetical or speculative measure of

19

what might have been achieved by the negotiators.15

20 Evaluation of these factors supports final approval of the proposed Settlement.
21
22
23
24
25
26
27
28

12

Officers for Justice, 688 F.2d at 625; accord Molski v. Gleich, 318 F.3d 937, 953 (9th
Cir. 2003); see also Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004) (the
“Churchill factors”).
13
Officers for Justice, 688 F.2d at 625.
14
Id.
15
Id.
11
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1
2

A.

Strength of Plaintiffs’ Case

In determining the settlement’s fairness, the Court balances risks of

3 continued litigation, including the strengths and weaknesses of a Plaintiff’s case,
4 against the benefits, immediacy, and certainty of a recovery.16
5

Plaintiffs are confident of many aspects of their case, even though this action

6 presents several novel and complex issues of fact and law (including class
7 certification) that must be overcome before Plaintiffs could prevail. As examples,
8 Plaintiffs believe that they could prove that the Statement of Average Gross
9 Compensation used from April 2009 through February 2013 was deceptive and
10 misleading. Plaintiffs also are confident that retail profits advertised to Class
11 Members bore no relationship to actual retail profits obtained in the field.
12

Notwithstanding these strengths, there are also many risks that Class Counsel

13 weighed against the strengths in determining what is in the best interest of the
14 Class. Plaintiffs’ claim that Herbalife was operating an “endless chain” was a claim
15 that, while Plaintiffs believed had merit, had substantial risk. And the law on
16 endless chains/pyramid schemes is far from clear on the intersection of personal
17 consumption and recruiting rewards.17 Procedurally, the Ninth Circuit’s decision in
18 Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir.Cal.2012), could drastically
19 reduce the size of the class and the economics if the Class were just limited to
20 California residents.
21

Too often, uninformed observers believe that, just because a proposed

22 settlement of a class action is pending, victory at trial must have been assured.
23 While rarely true, that is especially untrue here. This case has been fraught with risk
24
25
26
27
28

16

LaGarde v. Support.com, Inc., 2013 WL 1283325, at * 4 (N. D.Cal. March 26,
2013) citing In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir.2000).
17
F.T.C. v. BurnLounge, Inc., 753 F.3d 878, 885 (9th Cir. 2014) (“BurnLounge is correct
that when participants bought packages in part for internal consumption (to obtain the ability to
sell music through BurnPages and to use the package merchandise), the participants were the
“ultimate users” of the merchandise and that this internal sale alone does not make BurnLounge a
pyramid scheme.”).
12
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1 and remained so as class certification approached. The Settlement was achieved in
2 the face of difficult defenses raised by Herbalife. Herbalife said Plaintiffs could
3 never prove that it was operating an endless chain/pyramid scheme and produced in
4 discovery various surveys and expert analyses to support their position. Herbalife
5 had a response to each of the foregoing points put forth by Plaintiffs as strengths.
6 Herbalife asserted that many of its members joined for personal consumption and
7 not to pursue the business opportunity and had survey data to back-up that up.
8 Herbalife also had objective evidence that its current one-year, no-questions-asked
9 return policies were infrequently utilized by members.
10

Significantly, on the Statement of Average Gross Compensation, Herbalife

11 had evidence that—after it adopted a fuller disclosure of Average Gross
12 Compensation in its marketing materials in February of 2013 that showed the
13 number of members/distributors each year who earned no income—the number of
14 new members/distributors actually increased. Based on this, Herbalife forcefully
15 argued that claimed misrepresentations and omissions in earlier Statements of
16 Average Gross Compensation were not material, otherwise the number of
17 members/distributors should have decreased following the changes.
18

And there was ample evidence (including evidence from Class

19 Representatives’ own deposition testimony) that members/distributors joined for
20 consumption and enjoyed the product for personal consumption, received
21 substantial health benefits from the products, and were sometimes reselling the
22 product for Herbalife’s full suggested retail price, including all shipping and
23 handling costs.
24

Overall, the settlement avoids the risks that Plaintiffs could not prove that

25 Herbalife violated the Endless Chain laws and the Unfair and Deceptive Business
26 Practices Acts.
27
28
13

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1
2

B.

The Expense and Likely Duration Absent a Settlement

“[U]nless the settlement is clearly inadequate, its acceptance and approval are

3 preferable to lengthy and expensive litigation with uncertain results.”18 The risk,
4 expense, complexity, and likely duration of further litigation here was monumental.
5 The litigation road has been arduous and promises to be even more difficult absent
6 settlement. Settlement will conserve the resources of the parties and the Court and
7 will guarantee a substantial recovery for the Class now while obviating the need for
8 a lengthy, complex, and uncertain trial. If this matter were certified, a lengthy
9 appeal period would result. If this matter went to verdict, a lengthy appeal period
10 would result. The Ninth Circuit ranks at the bottom of the circuit courts for median
11 time to resolve an appeal, requiring on average over 12.4 months from filing the
12 notice of appeal to disposition.19
13

C.

14
15

The Risk of Certifying and Maintaining Class Action Status
Throughout the Trial Warrants Approval

Herbalife has agreed to certification of the proposed class for settlement only,

16 and has reserved the right to challenge class certification if the settlement is not
17 approved. While Plaintiffs believed that they could have certified the case, they
18 listened to the counsel of two experienced retired judges that it would be an uphill
19 battle. (See Declarations of Judge Weinstein ¶11, [Dkt No. 98] and Judge Larson,
20 ¶7, [Dkt No. 96-1].)
21

Herbalife informed Plaintiffs that, based on multiple surveys prepared by

22 recognized third parties of both current and former members, it would argue that
23 there were not common issues. Plaintiffs obtained and reviewed those surveys. In
24 the wake of U.S. Supreme Court decision on commonality standard for all class
25 actions in Wal-Mart Stores Inc. v. Dukes, 131 S. Ct. 2541 (2011), these third party
26 surveys indicating individual issues presented serious challenges to obtaining
27
18

28

19

Nat’l Rural Telecomms. Coop., 221 F.R.D. at 526 (citation omitted).
Dracht Decl., Ex. F (reprint from the Federal Judicial Center judicial-caseload profiles.).
14
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1 certification. Herbalife had an argument that “73% of Herbalife distributors joined
2 Herbalife for personal consumption,” and therefore lacked commonality with the
3 other purported 27% who joined for other reasons. The surveys provided by
4 Herbalife confirmed that the vast majority of members surveyed joined Herbalife to
5 obtain a discount on product they purchased for their own consumption, and not for
6 resale. And as the Ninth Circuit just confirmed in BurnLounge, participants
7 purchasing product for their own use could be considered “ultimate users” and that
8 internal sale alone would not make Herbalife a pyramid scheme.20 Had every Class
9 Member joined Herbalife and purchased products to pursue the business
10 opportunity, Plaintiffs’ case for certification (on the Section 327 claim) would be
11 straightforward; but based on Class Counsel’s investigation, including speaking
12 with putative class members and reviewing the surveys provided by Herbalife, that
13 was not the case.21
14

Damages also presented complexities on certification. Following the

15 Supreme Court’s decision on the certification of damages class actions in Comcast
16 Corp. v. Behrend, 133 S. Ct. 1426 (2013), Plaintiffs anticipated this issue being
17 hard fought. On damages, under the causes of action alleged, based on this Court’s
18 ruling on the 12(b)(6) motion, class members’ recovery on the endless chain claim
19 would have been limited to recission. [Dkt. No. 40 at 10-11.] The Court held that to
20 be entitled to rescission, class members must return product purchased. A primary
21 focus of the Objectors’ objection is that the settlement does not provide for recovery
22 for consequential damages incurred by members. But given the Court’s ruling on
23
24
25
26
27
28

20

F.T.C. v. BurnLounge, Inc., 753 F.3d 878, 885 (9th Cir. 2014).
For instance, the Lieberman survey produced by Herbalife concluded that over 70% of
the respondents purchased Herbalife product for self-consumption and that approximately half
joined Herbalife with no expectations of making any money. Declaration of Thomas G. Foley, Jr.,
dated April 13, 2015 (“Foley Decl.),” ¶¶ 5, 6. The survey touted by Objectors was considered by
Class Counsel prior to negotiating the Settlement. That survey only had 48 supervisors, and a high
percentage of those few respondents from a selected subset of all class members (Supervisors)
were pursuing a business opportunity as opposed to self-consuming. Foley Decl., ¶¶ 5, 8.
15
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1 the 12(b)(6) motion, those consequential damages would not have been recoverable
2 under the causes of action in the First Amended Complaint (“FAC”).
3
4

D.

The Amount Offered in Settlement

The proposed Settlement has objective monetary value and provides

5 substantial economic and non-monetary benefits to the Class compared to what
6 Plaintiffs could achieve through a successful trial. The total cash value of the
7 Settlement, considering all of its benefits, is $17.5 million. The corporate reforms
8 that Herbalife agreed to implement and maintain are valuable. Although the
9 proposed settlement should not be measured in terms of what class members could
10 have recovered had they prevailed,22 the settlement constitutes a substantial
11 percentage of the relief which could have been obtained given this Court’s ruling
12 that Plaintiffs’ sole remedy was rescission, and that remedy required the return of
13 product.
14

1.

15
16

The Cash Value of the Settlement ($15 Million)
a.

Business Opportunity Claims

Under the Settlement, Class Members were given the opportunity to make a

17 claim for their entire business opportunity losses associated with the purchase of
18 Herbalife product for which they could not recoup their costs. Out of the 7,238
19 claims, 114 claimants will receive payments greater than $10,000.00. 324 claims
20 will receive payments greater than $5,000.00. 1,629 claimants will receive
21 payments greater than $1,000.00. The average business opportunity award,
22 assuming a payout of 75%, is $1,120.09. The largest business opportunity award,
23 assuming a payout of 75%, is $98,588.36. (Robin Decl. ¶21.) Every claimant who
24 could not demonstrate a loss, and every claimant who purchased less than $750 of
25 products from Herbalife during the Class Period, will receive $20.00. Every
26
27
28

See Linney v. Cellular Alaska P’ship, 151 F.3d 1234, 1242 (9th Cir. 1998) (“The
proposed settlement is not to be judged against a hypothetical or speculative measure of what
might have been achieved by the negotiators”).
16
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1 claimant who purchased more than $750 in products from Herbalife will not receive
2 less than the full Estimated Total Loss claimed or 75% of the amount paid. (Robin
3 Decl. ¶21.)
4

As Class Counsel secured Herbalife’s agreement to allow late claimants to

5 continue to make claims on the settlement fund through at least April 30, 2015
6 pending availability of funds, the amount claimed by Class Members should only
7 increase.
8

b.

9

Be Contributed to the Consumer Federation of

10
11

Unclaimed Monies from the Settlement Funds Will

America
Additional funds remaining in the Cash Settlement Fund may be available for

12 further contribution to consumer advocacy, research, and education as provided in
13 the Agreement. This portion of the Settlement, to the extent it may be a cy pres
14 distribution, has been specifically designed to benefit all Class Members and
15 conforms to Ninth Circuit standards for distributing unclaimed class action funds.
16 There must be “a driving nexus between the plaintiff class and the cy pres
17 beneficiaries.”23 This means that the award must be guided by the objectives of, and
18 issues invoked by, the underlying statute or lawsuit and the interests of the class.24
19 The award must not benefit a group “too remote from the plaintiff class,”25 and
20 must “target the class” by accounting for the geographic dispersion of the class (that
21 is, if the class is national, the cy pres distribution must have a national scope).26
22 Further, the cy pres recipients must be identified to the court when settlement
23
24
25
26
27
28

23

Dennis v. Kellogg Co., 697 F.3d 858, 865 (9th Cir. 2012) (quoting Six Mexican Workers
v. Ariz. Citrus Growers, 904 F.2d 1301, 1308 (9th Cir. 1990)); see also Lane v. Facebook, Inc.,
696 F.3d 811, 834 (9th Cir. 2012) (“the district court must ensure that a cy pres award targets the
plaintiff class”).
24
Kellogg, 697 F.3d at 858 (quoting Nachshin v. AOL, LLC, 663 F.3d 1034, 1039 (9th Cir.
2011)).
25
Id. (quoting Six Mexican Workers, 904 F.2d at 1308).
26
Nachshin, 663 F.3d at 1040.
17
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1 approval is sought so the court can “undertake the searching inquiry” that precedent
2 requires.27
3

The Consumer Federation of America fits this description. It is a nonprofit

4 comprising over 250 nonprofit member groups, including national consumer
5 organizations, over 100 local consumer groups, state and local protection agencies
6 and other consumer cooperatives. (Declaration of Stephen Brobeck, ¶3, [Dkt No.
7 97].)
8

The Settlement drives participation from the cash funds so any monies

9 ultimately contributed in cy pres represent money left over after all Class Members
10 have made a claim. The comprehensive notice campaign and easy claims process
11 serve this goal, as does the proposed increase of payments to up to 75% of qualified
12 purchases. Class Counsel will continue to closely monitor the late claims approved
13 and ensure that distributions to qualifying Class Members is maximized under the
14 spirit of the Settlement before any remaining funds spill-over to the Consumer
15 Federation of America Fund.
16
17

2.

The Value of the Product Return Component ($2.5 Million)

Critical to this settlement was the creation of a Product Return Fund. This

18

was because, in the investigation and prosecution, there were reports of Herbalife

19

distributors becoming “garage qualified,” which meant that they front-loaded

20

purchases of Herbalife product to become a Supervisor to obtain higher discounts,

21

with no means to resell those products (storing them in their garage). Throughout

22

the litigation and mediation, Herbalife maintained that it already had established a

23

one year no-questions-asked return policy since mid-2013 and that it had objective

24

data there were low actual returns throughout the Class Period. That data on the

25

rate of product return was produced by Herbalife and reviewed by Plaintiffs.

26

Because of the clear remedy of rescission under California Civil Code

27
28

§1689.2 Class Counsel negotiated to include in the settlement to create a fund to
27

Kellogg, 697 F.3d at 867.
18

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1

allow Class Members to return, for a full refund, any leftover, unopened product. It

2

is significant that, to date, only $902,311.92 is claimed in Product Return

3

Payments. (Robin Decl. ¶22.) This indicates that reports of front-loading and

4

stockpiling product purchases were anecdotal.

5

As confirmed by Herbalife’s Joinder, Class Members can return unused

6

product for a full refund whether the product was purchased from Herbalife or a

7

third party up-line independent distributor. This means that the rescission remedy

8

is available even for product purchased from third parties.

9

If there really were tens of thousands of members who had Herbalife product

10

stored in their garages they could not sell, why were there so few claims submitted

11

to the Claims Administrator for product return? A logical answer is that the

12

anecdotal evidence was just that.

13
14

3.

Valuable Corporate Reforms

The Settlement Agreement’s thirteen required corporate policy reforms

15

provide a substantial benefit to the Settlement Class. These reforms and the

16

objections to them are addressed in section V.F below.

17
18

E.

Discovery and Investigation Included Class and Merits Issues

In analyzing the extent of discovery completed and the stage of the

19 proceedings, the court evaluates whether “the parties have sufficient information to
20 make an informed decision about settlement.”28 The court may consider the extent
21 of both formal and informal discovery, and information obtained about the case
22 through other means.29
23

This matter has been intensely investigated, litigated, and mediated. The Joint

24 Declaration details all of the formal and informal discovery taken. [Dkt. No. 96,
25 ¶¶15-24.] We will not repeat that narrative here and instead incorporate it by
26
28

27
28

Linney, 151 F.3d at 1239.
See In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000) (class counsel’s
significant investigation, research, and work with experts throughout the litigation supported
approval of the settlement, even absent extensive formal discovery).
19
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1 reference. Given the investigation and discovery, and the counsel of Judge
2 Weinstein and Judge Larson, Class Counsel have a clear view of the strengths and
3 weaknesses of the Class’s claims and damage approaches. Sufficient discovery has
4 been conducted in this matter to allow counsel to fairly investigate the pertinent
5 legal and factual issues and fully recommend the Settlement.
6
7

F.

Recommendation and Views of Experienced Class Counsel

The support of experienced counsel favors approving a class action

8 settlement.30 “The recommendations of plaintiffs’ counsel should be given a
9 presumption of reasonableness,” especially where, as here, the recommendations
10 follow lengthy arm’s-length and intensely fought negotiations overseen by a Court
11 appointed neutral settlement master.31
12

The extensive experience of Class Counsel in litigating complex class actions

13 is summarized in the Joint Declaration. [Dkt. No. 96.] In recommending the
14 Settlement, Plaintiffs’ Class Counsel exercised their professional judgment after
15 thoroughly investigating Plaintiffs’ claims, considering the case’s strength,
16 evaluating the complex risks of litigation knowing the facts and the legal issues
17 facing the Class. After this thorough analysis, Class Counsel concluded that the
18 settlement was fair and would provide substantial benefits to the class. [Dkt. No.
19 96; see also [Dkt No. 98 (Weinstein) ¶¶12-15 and Dkt No. 96-1 (Larson) ¶11.]
20
21

G.

Governmental Input into the Settlement Agreement

Another factor that the Court may consider in evaluating the fairness of a

22 settlement is a governmental participant, which “serves to protect the interest of the
23
24
25
26
27
28

30

See City of Seattle, 955 F.2d at 1291; Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566,
576-77 (9th Cir. 2004).
31
Boyd v. Bechtel Corp., 485 F. Supp. 610, 622 (N.D. Cal. 1979); Ellis v. Naval Air
Rework Facility, 87 F.R.D. 15, 18 (N.D. Cal. 1980) (“the fact that experienced counsel involved
in the case approved the settlement after hard-fought negotiations is entitled to considerable
weight”), aff’d, 661 F.2d 939 (9th Cir. 1981); DIRECTV, Inc., 221 F.R.D. 523, 528 (“Great
weight is accorded to the recommendation of counsel, who are most closely acquainted with the
facts of the underlying litigation.”) (internal quotation marks and citations omitted).
20
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1 class members.”32 In response to the notice, Class Counsel and Counsel for
2 Herbalife met and conferred with representatives of several Attorney General’s
3 offices. These discussions led to several clarifications in the Settlement Agreement
4 relating to the release in response to their comments.33 [Dkt. No. 108.]
5
6

H.

The Positive Reaction of the Class to the Settlement

A court may appropriately infer that a class action settlement is fair,

7 adequate, and reasonable when few class members object to it.34 “It is established
8 that the absence of a large number of objections to a proposed class action
9 settlement raises a strong presumption that the terms of a proposed class settlement
10 action are favorable to the class members.”35 Notice of the Settlement was sent to
11 over 1.5 million class members, and only 21 class members filed an objection (the
12 “Objectors”). Two withdrew their objection (Dracht Decl. Ex. B) and the other did
13 not think Herbalife should have settled (Dracht Decl. Ex. A (Lokken).)
14
15

1. Few Class Members Objected to the Settlement
Here 7,238 class members have filed claims. (Robin Decl. ¶19.) Yet, only

16 485 putative class members have elected to opt out of the settlement, and only 21
17 have filed objections. In a class action settlement of this size, some objections are to
18 be expected.36 The objection and exclusion rates relative to the number of class
19 members who responded favorably weigh strongly in favor of approval.37
20
21
22
23
24
25
26
27
28

32

See Marshall v. Holiday Magic, Inc., 550 F.2d 1173, 1178 (9th Cir. 1977).
It is the policy of the Attorneys General with whom the parties discussed the Settlement
that that their decision not to act against a class action settlement does not constitute, and should
not be construed as, approval of the settlement.
34
Marshall, 550 F.2d at 1178; see also White v. Experian Info. Solutions, Inc., 803 F.
Supp. 2d 1086, 1099 (C.D. Cal. 2011) (“Although several groups have pursued their objections
with notable vigor, the total number of objectors and/or opt-outs is small when compared with the
number of class members who responded favorably.”).
35
DIRECTV, Inc., 221 F.R.D. at 528-29.
36
See In re NASDAQ Market–Makers Antitrust Litig., 187 F.R.D. 465, 478 (S.D.N.Y.
1998) (“In litigation involving a large class, it would be extremely unusual not to encounter
objections.”).
37
See Stoetzner v. U.S. Steel Corp., 897 F.2d 115, 118-19 (3d Cir. 1990) (approving
settlement where “only” 29 objections were made in a 281-member class).
21
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1

Collectively, the number of opt outs and objections amounts to just 0.033%

2

of the total number of Class Members to whom notice was sent. Courts have

3

approved settlements where the percentage of objectors was much higher than this

4

amount.38

5

2. The Settlement Response Rate Was In Line with Other Class

6
7

Actions Given the Challenges of this Litigation
Viewed against the aggregate number of 1,533,339 Class Members, 7,238

8 individual claims as of the date of the filing of this motion might appear low;
9 however, under the circumstances and the nature of the allegations, it is not.39 This
10 is because the lawsuit arises out of the allegations that the Herbalife Business
11 Opportunity was a pyramid scheme. This action and any corresponding recovery
12 would be geared towards compensating those participants pursuing the business
13 opportunity and not just joining to purchase product at a discount for their own
14 consumption. A critical pillar of Herbalife’s defense, both to certification and on the
15 merits, was that an independent survey with many respondents confirmed that 73%
16 of potential Class Members were not primarily joining for business opportunities
17 but, instead, were joining for personal or family consumption of the products and
18 that approximately half had no expectation of making any money.
19

Because there was no easy way for Class Counsel to differentiate a Class

20 Member who joined for self-consumption and one that joined to pursue the business
21 opportunity (and lost money), the claims process required the Class Members who
22 sought a payment under the Cash Settlement Fund to certify, under penalty of
23 perjury, that “they joined Herbalife primarily to pursue a business opportunity and
24 not primarily to personally (or as a family) consume Herbalife’s product.” [Dkt No.
25
26
38

See, e.g., Churchill Village., 361 F.3d at 577 (approving settlement where 545 people

27 out of an initial notice pool of 90,000 objected to the settlement or excluded themselves).
39
Class Counsel anticipates that the number of claimants will increase through April 30,
28 2015 as late claimants may be submitting claims.
22

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1 95-4, pg. 5.]40 This certification allowed for Class Members to exercise a high
2 amount of discretion in determining whether they could participate. Class members
3 who joined Herbalife primarily to obtain discounts on products which they and their
4 families intended to self-consume were not eligible to participate in the cash
5 component of the Settlement.
6

Based on the independent surveys produced by Herbalife, an explanation

7 why only 7,238 claims were filed is that a significant majority of the individuals in
8 the class definition joined Herbalife to consume its product or for a reason other
9 than to make money, such as joining because a family member or friend asked him
10 or her to join.
11

Finally, consistent with the goal of rescission, to make a claim on the

12 Business Opportunity Fund Class Members had to certify that, “in pursuing the
13 Herbalife business opportunity, I did not recover/earn back the amount of money I
14 spent purchasing product directly from Herbalife for resale.” [Dkt No. 95-4, pg. 5.]
15 This required Class Member to have an economic injury arising from the purchase
16 of Herbalife products.
17

These two straightforward and simple requirements affected the members of

18 the Class who could make a Business Opportunity Claim to those Class Members
19 who joined Herbalife in reliance on the representations made by Herbalife regarding
20 the alleged business opportunity and who suffered a loss trying to resell Herbalife
21 product.
22
23
24
25
26
27
40

All Class Members could make a Product Return Claim provided they had unopened,

28 unused products purchased more than one year prior to February 3, 2015. [Dkt No. 95-4, pg. 3-4.]
23

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1

Under these circumstances the response rate is in line with other class action

2 settlements.41 In several cases studied, the response rate was less than 1%.42 Courts
3 have found that the class reacted positively and approved class action settlements in
4 cases involving low response rates.43
5 V.
6

THE OBJECTIONS TO THE SETTLEMENT LACK MERIT
Below, we address the objections of Elvia Acosta, Sabas Avila, Miguel

7 Calderon, Felipe Colon, Elizabeth Correa, Maria Cutzal, Juana Estala, Jose G.
8 Garcia, Valentina, Leon, Rossina Martinez, Gilberto Melcho Sanchez, Martil Palma
9 Vallecillo, Yader A. Pastron, Susana Perez, Eric Rodensky, Jose Tafoya, Olivia
10 Torres, and Julia Ulloa, all of whom are represented by same counsel (collectively
11 the “Brooks Objectors”), and Konstance Armstrong, Wyman Jong, and Jeff
12 Lokken,44 who objected pro se.
13

A.

14
15

The Business Opportunity Fund Compensates for Legally
Cognizable Losses

The Brooks Objectors claim, using a back-of-the-envelope calculation that

16 the Settlement Fund “represents somewhere between 1% and 2% of the potential
17 recovery after trial, maybe less.” [Dkt No. 121, 21:20-22.] To get there, they
18 extrapolate several variables and then apply their own figures regarding
19
41

20
21
22
23
24
25
26
27
28

Newberg on Class Actions § 12:17 (5th ed.)
Id.; see also Jermyn v. Best Buy Stores, L.P., No. 08 Civ. 214 CM, 2012 WL 2505644,
at *6 (S.D.N.Y. 2012) (settlements that require class members to file a claim “regularly yield
response rates of 10 percent or less”); In re Packaged Ice Antitrust Litig., No. 08-MDL-01952,
2011 WL 6209188 (E.D. Mich. Dec. 13, 2011) (recognizing that the percentage of claims filed “is
not dispositive and is frequently less than 5%” and approving settlement and finding favorable
class reaction with a 1% response rate)
43
Touhey v. United States, No. EDCV 08-01418-VAP (RCx), 2011 WL 3179036 (C.D.
Cal. July 25, 2011) (approving settlement and finding positive reaction where response rate was
2%); Parks v. Portnoff Law Assoc., 243 F. Supp. 2d 244, 251 (E.D. Pa. 2003) (approving
settlement and finding favorable class reaction where the response rate was 2%); accord White v.
Experian Info. Solutions, Inc., 803 F.Supp.2d 1086, 1100 (C.D.Cal.2011) ( “[T]his
underwhelming [5%] response rate does not mean that the Settlement, on the whole, is not fair,
reasonable and adequate.”).
44
As Mr. Lokken’s objection is that Herbalife should not have settled with Plaintiffs, the
Court can overrule this objection.
24
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1 compensable losses to get an aggregate class-wide damages estimate of $1.12
2 billion. [Dkt No. 121, 21:9-12.]
3

But the Court need not entertain abstractions on final approval. The claims

4 process was open to all Class Members and was based on (but broader than)
5 rescission of purchases of product from Herbalife. To make a Business Opportunity
6 Claim, a claimant only needed to certify that they were primarily pursuing the
7 business opportunity and that they lost money on reselling Herbalife products. The
8 percentage of the class directly notified is high and the bar to claim was low, yet
9 only 7,238 of the eligible 1,533,339 Class Members stepped forward. As described
10 in paragraph 21 of the Robin Declaration, there were significant claims made and
11 significant claims will be paid if the Court grants final approval.
12

These are real numbers, not back-of-the-envelope calculations. And these

13 real numbers reflect the rescission goals of Section 1869.2, which provides:
14

A participant in an endless chain scheme … may rescind the contract

15

upon which the scheme is based, and may recover all consideration

16

paid under the scheme, less any amounts paid or consideration

17

provided to the participant under the scheme.45

18

As the Court will recall, a central argument of Herbalife on its Motion to

19 Dismiss was that Plaintiff Bostick was not entitled to rescission or restitution as a
20 matter of fact and law. The Court found that because “Plaintiff sold or otherwise
21 gave away his Herbalife products” … “even if this suit satisfied rescission’s notice
22 requirement, Plaintiff cannot return the Herbalife products that he purchased
23 …However, Plaintiff can still return the International Business Pack that he
24 purchased,” if that was still in Bostick ‘s possession. [Dkt No. 40.]
25

This is an important backdrop to this Settlement that shaped its terms. First,

26 Class Counsel wanted to provide an opportunity for all Class Members to return
27 product they still possessed – rescission. Under the Settlement, all claimants
28

45

California Civil Code §1689.2.
25

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1 returning product, regardless of whether they purchased it from Herbalife or from
2 third parties, will receive 100% of their money back. (Robin Decl. ¶22.) Second,
3 Class Counsel wanted to provide a remedy for those Class Members who purchased
4 product in pursuit of a business opportunity, but who could not recoup their
5 investment in the product. And the Settlement is effective in compensating those
6 individuals. Claimants will receive significant payments under the Settlement.
7

Finally, the Court can look at the payouts under the Settlement to the Brooks

8 Objectors that filed a claim to assist in concluding that the Business Opportunity
9 Fund compensates legally cognizable claims. First, Susana Perez, who estimates her
10 “total losses” at over $100,000 will receive $30,000 under the Settlement if it is
11 approved, nearly 30% of her total losses. [Dkt No. 121-1 at 55; Robin Decl. ¶16.]
12 An examination of Perez’s estimated losses demonstrates the tenuousness of her
13 claim for the $100,000. Perez includes $86,400 worth of Herbalife products, and
14 expenses for her to run a Nutrition club, such as rent of $61,240, supplies of $3,000,
15 licenses of $500, and other expenses paid to third parties in her damages estimate.
16 [Dkt No. 121-1 at 55.] First, based on the causes of action, the Court has already
17 ruled that class members are only entitled to rescission under the endless chain
18 claim, and to be entitled to rescission, Ms. Perez must return all product she
19 purchased (which she apparently sold at a $30,000 loss). Second, Perez goes far
20 beyond rescission in her estimates of damages and attempts to include
21 consequential damages for payments allegedly made by her to third parties (rent,
22 licenses, and office supplies) in her estimates. Herbalife could not be held
23 responsible under a rescission theory for much of Perez’s alleged expenses, such as
24 rent and supplies, which were paid to third parties not associated with Herbalife.
25 Ms. Perez may participate in the Settlement, and she can still pursue recovery of the
26 remainder of her alleged individual damages claims against third parties who
27 induced her to invest in a nutrition club. Again, those claims are not being released
28 here.
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Second, Objector Eric Rodensky estimates his total losses of “approximately

1

2 $6,000” arising out of purchases of business leads from a third party lead generator,
3 and expenses to run his Nutrition Club. [Dkt No. 121-1 at 59.] The disparity in
4 losses between Rodensky ($6,000) and Perez ($100,000) to operate a nutrition club
5 demonstrates the difficulty the Court may have had assigning liability and damages
6 to Herbalife for the varying degrees of losses that a distributor may have had: What
7 was attributable to Herbalife, what was attributable to third parties, and what was
8 attributable to individual business decisions? Again, based on the Court’s ruling
9 that only rescission was permitted, Mr. Rodensky cannot recover for payments to a
10 third party for sales leads. Yet under the Settlement, Rodensky will receive
11 $2,983.30, nearly 50% of his total losses. (Robin Decl. ¶17.) Again, Mr. Rodensky
12 can participate in the Settlement and still pursue recovery of the remainder of his
13 alleged damages from the third party lead generator from whom he purchased sales
14 leads.
15

And third, Objector Julio Ulloa estimates his losses of $50,000 for the

16 operation of his Nutrition Club. [Dkt No. 121-1 at 71.] Under the Settlement
17 Agreement Ulloa will receive $14,094.20, a 28% recovery of his losses. (Robin
18 Decl. ¶18.) Mr. Ulloa can join with Ms. Perez, Mr. Rodensky and the other
19 objectors represented by attorney Brooks in pursuing the third party lead generators
20 to recover their alleged losses paid to third parties.
21

These three objectors who made claims demonstrate that the method of

22 allocation of the $15 million cash component of the Settlement is a fair way of
23 compensating Class Members for losses associated with pursuing their business
24 opportunity.
25

///

26

///

27

///

28

///
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1

B.

The Brooks Objectors Misunderstand the Law, the Facts and the

2

Risks Related to the Packaging & Handling and FedEx Freight

3

Charge Claims

4

Objectors next attack the reasonableness of the settlement by claiming that

5

“a potential $260 million claim [related to Herbalife’s Packaging and Handling and

6

FedEx freight charges] gets traded for a change in terminology” and that “[t]here is

7

no explanation for why class members should be settling this very strong claim for

8

less than six cents on the dollar.” (Objection [Doc 121at 26, 28].) Plaintiffs brought

9

separate claims against Herbalife’s “Packaging and Handling” and “FedEx

10

Freight” charges under California Business and Professions Code Sections 17200

11

and 17500. Plaintiffs alleged that Herbalife deceived the Class by using the fees to

12

generate additional profits instead of passing through or recouping the actual

13

expenses related to its packaging and handling or FedEx freight delivery. Objectors

14

assume that Plaintiffs would easily prevail on these claims as pled and cannot

15

understand why the settlement is not much larger. Objectors, however,

16

misunderstand the law, the facts and the risks related to the claims involving these

17

two charges.

18

First, separately stated, “un-bundled” charges (like Herbalife’s Packaging

19

and Handling and shipping charges) are ubiquitous in today’s economy.

20

Unsurprisingly, successfully attacking the legality and reasonableness of such

21

charges under California law is difficult. For instance, in Searle v. Wyndham

22

International, Inc., 102 Cal. App. 4th 1327 (Cal. Ct. App. 2002), a California

23

appellate court affirmed the dismissal of Section 17200 and 17500 claims regarding

24

a 17% service charge for hotel room service because the charge was plainly

25

disclosed and because a hotel “patron has no legitimate interest in what the hotel

26

does with the service charge. The hotel is free to retain for itself . . . the service

27

charge, or to remit all or some of the revenue to its employees.”46 And in

28

46

Id. at 1334.
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1

Baghdasarian v. Amazon.com, Inc., the court granted summary judgment

2

dismissing Section 17200 claims against Amazon.com for retaining undisclosed

3

profits from a “holdback fee” because the plaintiffs failed to establish actual

4

reliance as required by In re Tobacco II Cases, 46 Cal.4th 298, 306 (Cal. 2009).47

5

Here, discovery indicated to Plaintiffs’ counsel that the Section 17200 and

6

17500 claims regarding Herbalife’s Packaging and Handling charges had several

7

weaknesses. The 7% charges had been plainly disclosed and explained as relating

8

to “administrative time and labor go[ing] into processing, handling and

9

marketing.” (IPB, Book 4, Exhibit C to First Amended Complaint, at 31 [Dkt. No.

10

70-7].) Based Class Counsels’ review of purchase data along with other financial

11

data, Class Counsel calculated that Herbalife had significant revenues from

12

packaging and handling charges. But in discovery, Class Counsel learned that

13

Herbalife intended to offer documents and data substantiating costs arguably

14

related to these charges that greatly exceeded this amount. (Dracht Decl. ¶17.)

15

Discovery indicated that the vagueness, broad phraseology and disclosed

16

explanation of the charge made it difficult to prove (on a class-wide basis) that

17

there had been an “overcharge.”48

18

Plaintiffs believed the stronger attack, on the merits, related to Herbalife’s

19

FedEx Freight charges. Discovery indicated that the revenues from these shipping

20

charges exceeded Herbalife’s actual freight expenses during the Class Period.

21

Plaintiffs’ counsel repeatedly used this overcharge to its advantage during

22

settlement discussions. (Dracht Decl. ¶17.) But, in candor, Plaintiffs faced

23

considerable challenges on the merits of these claims, such as having to prove that

24

a misrepresentation existed (i.e., would a reasonable person have believed that a

25

47

Baghdasarian v. Amazon.com, Inc.,2009 WL 4823368, at *5-*6 (C.D. Cal. Dec. 9,

26 2009).
48

27
28

See e.g., Speigler v. Home Depot, U.S.A., Inc., 552 F.Supp.2d 1036, 1046-1047 (C.D.
Cal. 2008) (Dismissing claim that fee improperly included undisclosed profit, holding that
“plaintiffs agreed to pay the contract price irrespective of the components included in that
price.”).
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1

%-based shipping fee was exactly the amount being paid to Federal Express) and

2

that the named Plaintiffs could prove actual reliance on the misrepresentation in

3

deciding to have Herbalife ship products to them using Federal Express. Further,

4

the FedEx Freight charges had been plainly disclosed, and Class Members did not

5

have to use Federal Express but could have picked up the products locally (if

6

possible) or used an alternative shipping method of their own choice, which

7

Herbalife encouraged them to do. (IPB, Book 4, Exhibit C to First Amended

8

Complaint, at 25, 31 [Dkt. No. 70-7] (encouraging distributors to “call the various

9

freight carriers in your area for rates and service details” and plainly noting that its

10

Federal Express home delivery “may be one of your best options for shipping”)

11

(emphasis added).)

12

Apart from the merits, Plaintiffs also would have faced substantial

13

difficulties in certifying any class or sub-class concerning their claims relating to

14

the FedEx Freight charges. When determining the existence and extent of any

15

award of restitution for Sections 17200 and 17500 claims, a strong argument exists

16

that a court should compare the actual amounts received by a defendant when

17

using the offending practice against the amounts the defendant would have

18

received absent the offending practice (i.e., the “but for” prices).49 Following the

19

Supreme Court’s decision in Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432

20

(2013), a line of cases failing to certify Sections 17200 and 17500 claims because

21

of the failure of restitutionary models on classwide damages could have presented

22

formidable hurdles for Plaintiffs on certification.50

23
49

See, e.g., Day v. AT&T Corp., 63 Cal. App. 4th 325, 339 (1998) (Section 17203

24 “operates only to return to a person those measurable amounts which are wrongfully taken by
25 means of an unfair business practice,” and “the amount being restored is objectively measurable
26
27
28

as that amount which the defendant would not have received but for the unfairly competitive
practice” (italics in original)).
50
See, e.g., Lanovaz v. Twinings North America, Inc., 2014 WL 1652338, Case No. C-1202646-RMW (N.D. Cal. April 24, 2014) (declining to certify false advertising claims because
plaintiffs did not present a legally correct restitution award); Werdebaugh v. Blue Diamond
Growers,No. 12–CV–2724–LHK, 2014 WL 2191901, at *22 (N.D. Cal. May 23, 2014) (same);
30
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1

The measure of restitution, as Herbalife repeatedly argued, would create

2

numerous individuals issues that could have predominated over the common

3

questions. A separate analysis would be conducted for each product purchase by a

4

Class Member during the Class Period to determine what shipping cost would have

5

applied to that purchase “but for” the deceptive FedEx Freight charge. And

6

inarguably, the “but for” shipping costs would vary by time (assuming historical

7

shipping prices could even be identified), by geographic location (both the “to” and

8

“from” locations would matter), and by the size and shape of the products being

9

delivered. In light of this, it would be difficult to ascertain the “but for” shipping

10
11

expense for one product purchase, let alone millions.
With just these few points in mind, the Brooks Objectors completely

12

misunderstand and have grossly oversimplified the law, the facts and the risks

13

associated with the claims involving the Packaging and Handling and FedEx

14

Freight charges. Plaintiffs’ counsel, by contrast, have carefully analyzed the

15

massive discovery materials received, have carefully researched the codes and

16

guiding case law, and have carefully weighed the pros and cons of moving forward

17

versus settling these claims. Plaintiffs’ counsel strongly believe that the settlement

18

of these claims is in the best interest of the Class and provides substantial value to

19

the class, in helping obtain a larger cash award and also in preventing Herbalife

20

from utilizing separate Packaging and Handling and FedEx Freight charges in the

21

future. Finally, to dispose of this objection, any Class Member that could not pass

22

along these packaging and handling and shipping costs to a purchaser on resale

23

may make a claim for their loss under the Settlement.

24
25
26
27
Brazil v. Dole Packaged Foods, LLC, No. 12-CV-01831-LHK, 2014 WL 5794873, at *14 (N.D.

28 Cal. Nov. 6, 2014) (same).

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1
2
3

C.

All Class Members Who Did Not Agree to Arbitrate Can Make
Claims.

The Brooks Objectors attack the propriety of including those individuals

4

subject to Herbalife’s arbitration clause in the Rule 23(b)(2) class governing the

5

corporate reforms, but excluding them from the monetary damages class under

6

Rule 23 (b)(3).

7

First, Plaintiffs and Herbalife have agreed to amend the Stipulation for

8

Settlement to exclude all individuals whose contract with Herbalife containing an

9

arbitration clause from the provision of the release. This disposes the objection.

10

Second, the Brooks Objectors make a variety of arguments that Herbalife has

11

somehow waived application of its arbitration agreement. In Fisher v. A.G. Becker

12

Paribas, Inc., 791 F.2d 691, 694 (9th Cir. 1986), the Ninth Circuit held that a party

13

seeking to prove waiver of a right to arbitration must show: “(1) knowledge of an

14

existing right to compel arbitration; (2) acts inconsistent with that existing right;

15

and (3) prejudice to the party opposing arbitration resulting from such inconsistent

16

acts.” Fisher v. A.G. Becker Paribas, Inc., 791 F.2d 691, 694 (9th Cir. 1986).

17

Because waiver of a contractual right to arbitration is not favored, “any party

18

arguing waiver of arbitration bears a heavy burden of proof.” Id. The Brooks

19

Objectors have not even attempted to perform a waiver analysis required by

20

Fisher, and their objections must fail.

21

The Brooks Objectors also contend that because Herbalife filed an answer

22

and did not raise arbitration as a defense, there must have been a waiver; but, they

23

do not cite to any cases supporting such proposition and the case law is to the

24

contrary. This objection evidences a complete lack of familiarity with the case.

25

Because plaintiff Dana Bostick’s distributor agreement contained no arbitration

26

clause, Herbalife never would have or could have raised arbitration as an

27

affirmative defense in its Answer.

28
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1

D.

2
3

Consequential Damages Are Not Recoverable Under the Court’s
Prior Ruling or Any Theory of Restitution

The Brooks Objectors claim that failing to permit Class Members to recover

4 consequential damages is unfair and unreasonable. [Dkt. No. 121 p. 34-38.] They
5 claim this arbitrarily excludes a substantial portion of the economic losses suffered
6 by distributors, such as expenses in the operation of nutrition clubs and the purchase
7 of sales leads and other tools from third parties. [Dkt No. 121 p. 35-36.] In their
8 Declarations, the Objectors detail expenses from operating a nutrition club at home,
9 (Acosta, ¶551, Correa ¶5), “investments” or losses (undescribed), (Avila ¶5, Torres,
10 ¶5, Sanchez ¶5), rent and “other operating costs of running the Nutrition Club,”
11 (Calderon ¶7, Colon ¶5, Estala ¶5, Garcia ¶5, , Leon ¶5, Vallecillo ¶5, Pastran ¶5,
12 Perez ¶5, Tafoya ¶5, Ulloa ¶5), including labor, (Cutzal ¶5, Martinez ¶5), to
13 purchasing business leads from third parties and advertising expenses paid to third
14 parties, (Rodensky ¶5).
15

But Bostick argued that he was entitled to “complete relief, including any

16 restitution of damages … and any consequential damages to which he is entitled” in
17 his Opposition to Herbalife’s Motion to Dismiss. [Dkt No. 27 at 24:14-9.] The
18 Court in its Order denying the motion took a narrow view of the relief available
19 under California Civil Code §1689.2. [Dkt No. 40 p.10-11.]
20

While Plaintiffs maintained throughout litigation and mediation that relief

21 extended beyond just rescission – to include restitution at the least – this was
22 heavily disputed by Herbalife and would have been contested at the certification
23 and merits stages of the litigation.
24

Nothing in California Civil Code §1689.2 suggests that its plain language is

25 modified by other provisions in the Civil Code. And there is no controlling case law
26 indicating that consequential damages flow from a violation of section 1689.2. The
27
51

All declaration cites are to Dkt No. 121-2, hyperlinked to the corresponding page

28 containing the referenced paragraph.

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1 case cited by the Brooks Objectors, Li v. EFT Holdings, Inc., to support their
2 proposition is tepid: “The Court is not convinced that rescission is the only remedy
3 under the endless chain statute.”52
4

Here, the settlement gives relief to Class Members’ losses based on

5 rescission—the Product Return Component—and in addition allows Claimants to
6 be compensated for the losses they incurred in reselling Herbalife product. The
7 latter form of recovery is restitution that might not be available if Plaintiffs
8 prevailed and were limited to restitution with a concomitant requirement to return
9 product. Had the Class been limited to rescission only, Class Members may have
10 been limited to returning any leftover product and perhaps returning their IBP’s.
11

While seemingly straightforward, even this recovery would have presented

12 problems. First, Class Members would have had to return their IBP’s; it seems
13 unlikely that many disaffected former Herbalife distributors would have retained
14 these through trial and any anticipated appeals. Even if they had, the IBP’s
15 contained product and the mini-IBP’s contained product samples, which Class
16 Members likely already consumed and which their failure to “return” could affect
17 their ability to recover on rescission. Extending the Class Members’ recovery in
18 settlement to also include restitution for losses associated with the purchase and
19 resale of product follows Class Counsels’ reading of California Civil Code §1689.2
20 and the goals of restitution under Sections 17200 and 17500. This additional
21 restitution is strong evidence that the proposed Settlement is in the best interests of
22 the Class.
23

And pursuing consequential damages on a class-wide basis would have made

24 the class difficult, if not impossible, to certify because it would have raised
25 innumerable individual issues and difficulties of administration. For class members
26 that operated nutrition club multiple variables likely would have been at play that
27
52

28

Li v. EFT Holdings, Inc., 2:13-cv-08832-DSF-CW, Dkt No. 121; 2015 U.S. Lexis 1065
at *4, (C.D.Cal. 2015)
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1 determined the success or failure of the club. Anita Vasko, a representative Plaintiff
2 that operated a nutrition club in a prime real estate location at a loss sold other
3 products and nutrition coaching services from her nutrition club, raising the
4 question for Class Counsel whether the Court would allow damages to be recovered
5 by Vasko and other nutrition club operators when the damages were based in part
6 on their own independent business decisions, e.g. the rent they agreed to pay for the
7 space in which they operated their club.
8

Even in a settlement context, consequential damages would have been nearly

9 impossible to administer. The Brooks Objectors’ own descriptions of their alleged
10 damages highlight the difficulty of drawing the line in the sand on what would be
11 an appropriate consequential damage: Should Herbalife pay the rent or mortgage for
12 someone operating a Nutrition Club out of their home? Should Herbalife pay for all
13 expenses incurred in the operation of a nutrition club? How much corroborating
14 information would be required for claimants to recoup “investments,” or other
15 losses? And if they purchased equipment such as a blender or a computer for the
16 operation of their business (and are still using it) is that a consequential damage that
17 the Court would require Herbalife to pay?
18

For the Class Members who purchased sales leads or tools from third parties,

19 the Brooks Objectors’ legal counsel’s prior class actions against Herbalife provided
20 a cautionary tale to Plaintiffs what happens when Class Counsel overloads a case
21 with facts and theories. (Declaration of Douglas Brooks dated March 23, 2015, [Dkt
22 No. 121-2, ¶4] (“I obtained substantial class settlements for Herbalife distributors in
23 cases involving ‘lead generation systems’ operated by high level Herbalife
24 distributors.”). The Brooks Objectors’ legal counsel brought a nationwide class
25 action, Jacobs v. Herbalife et al., 2:02-cv-01431-SJO-RC (C.D. Cal), against
26 Herbalife and a third party tool and lead sales company. (Foley Decl. ¶10, Exhibit
27 X, Declaration of Douglas Brooks ¶12 (Jacobs) dated September 2, 2004 (“Decl.
28 Brooks Jacobs”).) But in Jacobs, the court declined to accept supplemental
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1 jurisdiction over the California state law claims (Endless Chain) and dismissed
2 those claims for all defendants, including Herbalife. (Decl. Brooks Jacobs ¶30.) The
3 plaintiffs then settled the case, using confirmatory discovery to justify the
4 settlement. (Decl. Brooks Jacobs ¶35.) That settlement allowed for a reversionary
5 $4 million cash component and a “product rebate” component of $2 million. (Decl.
6 Brooks Jacobs ¶38.) Attorney Brooks, sought $1.4 million in fees. (Decl. Brooks
7 Jacobs ¶53.) In justifying the settlement in Jacobs against one of the eleven
8 objectors complaining about not naming other third parties as defendants, Mr.
9 Brooks stated: “Moreover, the Settlement does not release Financial Success
10 Systems or any other Herbalife promotional system, and distributors are free to
11 pursue claims against such entitles if they so choose.” (Decl. Brooks Jacobs
12 ¶51.)The same goes for the objectors here. All of the objectors represented by Mr.
13 Brooks can both participate in the Bostick settlement and also pursue claims against
14 third parties for their consequential damages based on payments made to those third
15 parties.
16

Following the Jacobs settlement (which apparently secured no corporate

17 reform), the Brooks Objectors’ legal counsel filed another case, Minton v. Herbalife
18 et al.BC338305 (Sup.Ct. L.A.). This was a putative class action concerning
19 Herbalife “leads” against Herbalife and various third parties who actually sold the
20 leads to class members. (Foley Decl. ¶13, Exhibit I, Declaration of Douglass
21 Brooks ¶7 (Minton) (“Decl. Brooks Minton”).) Even prior to Dukes, Comcast, and
22 Mazza, the California Superior Court in Mr. Brooks’ Minton case declined to certify
23 a nationwide class, and instead conditionally certified two California classes of
24 plaintiffs. The Brooks Objectors’ counsel settled that case for $1.75 million. (Decl.
25 Brooks Minton ¶17 (seeking attorneys’ fees not to exceed 35% of the Settlement
26 Fund (¶21)).
27

The Brooks Objectors’ legal counsel’s litigation strategies against Herbalife,

28 his mixed successes and failures, and his settlements informed Class Counsel on the
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1 pitfalls of seeking attenuated derivative liability and consequential damages theories
2 against multiple actors in prosecuting the Bostick case against Herbalife. Based on
3 Class Counsel’s investigations, there were multiple lead generators and tool
4 companies that sold leads and tools to class members. (Dracht Decl. ¶18.) Class
5 Counsel analyzed these claims and concluded they presented difficulties in
6 management and, more importantly, in class certification. (Dracht Decl. ¶18.)
7

First, there would need to be a class representative for each company that

8 sold tools or leads or coaching or the claims would not be certified. Class Counsel
9 estimated there were over a dozen such companies. Second, Plaintiffs must name
10 these companies and not just find liability as against these companies but also find
11 derivative liability of Herbalife for the acts and omissions of these separate
12 independent companies. Each tool and lead company would present its own
13 defenses and claims and, in Class Counsel’s experience, would have sufficiently
14 paralyzed the litigation with appeals and bankruptcies such that the hydra would
15 have prevented Plaintiffs from ever litigating their claims against Herbalife. Third,
16 Class Counsel expected, in light of publicly known fights between Herbalife and
17 some of these lead generators, that inclusion of some or all of them in the suit likely
18 would have spawned cross claims and potential third party claims, further
19 complicating the case and making class certification less likely and more difficult to
20 obtain. An arbitration agreement between any named plaintiff and a third party
21 would threaten to stay the entire Bostick litigation pending an arbitration under 9
22 U.S.C. §3 . Dana Bostick had an agreement with one such tool provider that
23 referenced an arbitration agreement. (Dracht Decl. ¶18.) And finally, the more
24 complex the theory and facts, the more impossible the case would be to certify, as
25 individual issues would predominate.
26

Class Counsel carefully considered all of these issues and streamlined this

27 case against Herbalife only, which has resulted in a fairly quick and very substantial
28 settlement for the Class while maintaining the ability of Class members harmed by
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1 third party lead generators to sue them if warranted. The Court should reject the
2 objection that the Settlement does not allow for a claim of consequential damages
3 because it is contrary to the Court’s earlier ruling, contradicts restitution principles,
4 and is a classic “bird in hand instead of a prospective flock in the bush [or sky in
5 this case]”53 argument.
6
7

E.

Plaintiffs Are Adequate to Seek Corporate Reform

The Brooks Objectors argue that the Class representatives lack standing to

8 represent the class in having Herbalife institute corporate reforms because none of
9 the named Plaintiffs are still Herbalife distributors. The point is that Plaintiffs are
10 getting corporate reform without having to battle at class certification whether the
11 Class Representatives were adequate. Moreover, objectors’ argument does not
12 distinguish controlling law in the Ninth Circuit,54 including cases from this district:
13

If the Court were to construe Article III standing for FAL and UCL

14

claims as narrowly as the Defendant advocates, federal courts would

15

be precluded from enjoining false advertising under California

16

consumer protection laws because a plaintiff who had been injured

17

would always be deemed to avoid the cause of the injury thereafter

18

(“once bitten, twice shy”) and would never have Article III standing.

19 [Collecting cases.]55 “Construing Article III standing as narrowly as
20 defendant suggests in consumer protection statutes . . . would effectively bar
21 any consumer who avoids the offending product from injunctive relief.”56
22

As to any “judicial imprimatur” from the corporate reform, the Brooks

23
53

Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 526 (C.D. Cal.2004)

24 (citations omitted).
54
Objectors cite to Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2559-60 (2011), but,
25
26
27
28

Dukes involved employment based claims, not Cal. Bus. & Prof. Codes §§ 17200 et seq. and
17500 et seq.
55
Henderson v. Gruma Corp., No. CV 10-04173 AHM AJWX, 2011 WL 1362188, at *7
(C.D. Cal. Apr. 11, 2011) (Hon. Matz).
56
Larsen v. Trader Joe’s Co., No. C 11-05188 SI, 2012 WL 5458396, at *4 (N.D. Cal.
June 14, 2012).
38
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1 Objectors acknowledge that “[t]he new release language in the Amendment
2 cures this defect and ensures that government agencies and prosecutors will
3 not be prejudiced in their enforcement actions against Herbalife.” [Dkt No.
4 121, 43:5-9.]
5

F.

6
7

The Corporate Reforms Provides Substantial Benefit to the Class
to the Detriment of Herbalife

Objectors and proposed amici oppose the approval of the Settlement

8 Agreement because the corporate reform component fails to live up to their ideal
9 agreement. But the Settlement Agreement provides substantial relief (fair and
10 adequate relief) by precluding Herbalife from certain allegedly unfair, unlawful,
11 fraudulent, and or deceptive business practices. The Settlement Agreement is
12 reasonable, fair and adequate. Objectors and amici fail to demonstrate a proper
13 basis to deny final approval due to any alleged inadequate corporate reform.
14

“[W]hether a settlement is fundamentally fair within the meaning of Rule

15 23(e) is different from the question whether the settlement is perfect in the
16 estimation of the reviewing court.”57 “It is neither for the court to reach any ultimate
17 conclusions regarding the merits of the dispute, nor to second guess the settlement
18 terms.”58 Settlement is the product of compromise, and is not “to be judged against
19 a hypothetical or speculative measure of what might have been achieved by the
20 negotiators.”59
21

With these principles in mind, the reasonableness, fairness and adequacy of the

22 negotiated corporate reforms are apparent; and Objector’s protests are opinion23 based arguments about what policy changes would best address the issues raised in
24 the First Amended Complaint. This is not a basis for disapproving the Settlement
25
26
27
28

57

Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012).
Moore v. Verizon Commc’ns Inc., 2013 WL 4610764, at *5 (N.D. Cal. Aug. 28,
2013) (citations omitted).
59
Dennis v. Kellogg Co., No. 09-CV-1786-L WMC, 2013 WL 6055326, at *2 (S.D. Cal.
Nov. 14, 2013), appeal dismissed (May 15, 2014).
58

39

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1 Agreement reached after substantial investigation and arms-length negotiation. That
2 these reforms are not all that Objectors would desire does not, as a matter of law,
3 render the Settlement Agreement unreasonable, unfair or inadequate, and the Parties
4 respectfully request that the Court overrule Objectors opposition and grant final
5 approval of the Settlement Agreement.
6

1.

The Changes to Herbalife’s Corporate Policies Address

7

Allegations in the Amended Complaint and are Valuable to

8

the Settlement Class.

9

The Settlement Agreement requires Herbalife to institute and maintain for

10 three years thirteen specific corporate policies. Objectors claim there will be no
11 oversight or enforcement of the corporate policies. This is a curious claim as the
12 policy changes form a material part of the Settlement Agreement (Sec. 5) and every
13 class member, as a beneficiary of the Settlement Agreement, may seek enforcement
14 of its terms should she believe Herbalife is failing to comply. [Dkt No. 95]. That
15 Plaintiffs’ counsel specifically stated they were not seeking fees for overseeing
16 compliance with the corporate reforms does not mean such oversight will not be
17 performed. Plaintiffs’ counsel will perform such oversight. The Court retains
18 jurisdiction over the Settlement Agreement (something Objectors concede,
19 Objection [Doc. 121], 45: 20-23), and Plaintiffs’ counsel can easily to seek
20 enforcement of the corporate reforms by the Court should Herbalife fail to fulfill its
21 commitment as contemplated by the Settlement Agreement.
22

Objectors claim the thirteen policy changes “provide illusory relief to the

23 class, and fail to address the allegations of the Complaint.” Objection [Doc. 121],
24 45: 6-8. This conclusion is meritless. Even a cursory review of the negotiated
25 corporate policy reforms shows they relate back to First Amended Complaint,
26 providing substantial benefit to the Settling Class and a detriment to Herbalife.
27

First, Plaintiffs alleged violations of California consumer protection laws by

28 charging both a “Packaging and Handling” fee simultaneous with an “Order
40

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1 Shipping Charge.” Plaintiffs claimed the separate charges suggested the “Order
2 Shipping Charge” was a pass through, when it contained an element of profit for
3 Herbalife. Herbalife adamantly disputes these allegations or that the charges were
4 unfair or misleading. The Settlement Agreement precludes Herbalife from charging
5 members two separate fees, removing any confusion that one is a pass through
6 charge with no profit element. This reform benefits all those who are or may
7 become Herbalife distributors and relate to allegations of the FAC.
8

Second, Plaintiffs claimed that Herbalife violated Penal Code Section 327 as

9 an endless chain scheme. Herbalife denied the allegation in part because its
10 products were largely used by self-consuming members. The Settlement Agreement
11 addresses this claim by requiring Herbalife to acknowledge this position by
12 prohibiting it from defining members as “distributors.” Objector’s claim that the
13 change is done purely to shield Herbalife from regulatory violations is meritless.
14 The change in language substantially clarifies the difference between a self15 consuming member and a distributor of Herbalife’s products pursuing Herbalife as
16 a business opportunity.
17

Third, Herbalife must maintain a policy of discouraging members from

18 incurring debt in pursuit of Herbalife business opportunities. Objectors do not
19 disagree with this reform, but claim Herbalife should be compelled to go further, by
20 including debt counseling at training events and monitoring Herbalife customers’
21 credit card purchases. Objectors attempt to cast doubt on the adequacy of the
22 Settlement Agreement because more or stronger steps could, in an imagined
23 instance, address the Objectors’ concerns.
24

Objectors state: “A better term would be for Herbalife to discourage

25 participants from spending their hard earned savings on the pursuit of the Herbalife
26 business opportunity.” This contention is not a realistic expectation of negotiations,
27 however, and demonstrates Objectors’ unfounded conclusion that the reforms are
28
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1 inadequate. It is both impractical and unrealistic to expect that Herbalife would
2 discourage its customer base from buying its products.
3

Fourth, Objectors do not dispute that requiring Herbalife to pay shipping

4 charges for shipping returned products benefits the class. Instead, they complain
5 that the policy change is not enough because it fails to address that current
6 Herbalife policy requires the member to terminate her membership as a condition to
7 receiving a full refund for the return of products. However, this reform was not
8 intended to save members from their own decision to invest in Herbalife’s products
9 or business, but to provide them a means of recouping both the cost of product and
10 the return shipping cost should they decide that their investment decision was one
11 they regret making. It removes from the member and shifts to Herbalife the burden
12 of paying for returned product.
13

Fifth, Objectors cannot dispute that requiring Herbalife to maintain a

14 compliance department to enforce its policies will benefit its members. Rather, they
15 criticize this reform on the unsubstantiated basis that Herbalife made the change
16 “out of self defense, not out of any concern for its distributors.” This conjecture is
17 no basis for an objection. It is true, as the Settlement Agreement itself points out,
18 this litigation was at least in part the inspiration for Herbalife’s agreement to adopt
19 and maintain the corporate reforms, but Objectors have no basis for knowing, much
20 less objecting to, Herbalife’s motivations. (Settlement Agreement, Sec. 5.1.2 “At
21 least in part as a result of the filing of the lawsuit, Herbalife implemented . . . the
22 following corporate policies . . . .”).
23

Sixth, the Settlement Agreement requires Herbalife to prohibit the selling of

24 leads. Coupled with the compliance department reform, this reform is great for
25 Herbalife members. Objectors do not disagree. Rather, they predict that without
26 additional monitoring, “Herbalife’s high level distributors will find ways to evade
27 the rule, and Herbalife will look the other way for as long as possible.” There are
28 several problems with this baseless assumption. Plaintiffs’ counsel will be
42

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1 monitoring Herbalife’s compliance. So the assumption is faulty from its inception.
2 Any class member, as a beneficiary of the settlement, can monitor and ensure
3 compliance. Finally, the release provision of the Settlement Agreement does not
4 release lead generators for lead generating. If Objectors believe they have claims
5 against such lead generators, they may bring them.
6

Seventh, Objectors complain that prohibiting Herbalife from requiring new

7 members to purchase product as a condition of becoming an Herbalife member is
8 not a helpful reform. Objection [Doc. 121], 51: 1-12. This objection misses the
9 point. One of the classic Amway rules that companies implement to establish that
10 they are not an endless chain is the “initial investment” rule. This rule prohibits the
11 company from requiring the purchase of investment inventory by a new distributor
12 as a prerequisite for the right to sell products and receive rewards.60 This reform
13 requires Herbalife to maintain this rule and is good for members.
14

Eighth, Herbalife must require its members, prior to signing a lease or opening

15 a Nutrition Club in a non-residential location, to have been a member for at least 90
16 days and to have received Nutrition Club operator training. This prevents new
17 members, without the proper knowledge and experience with Herbalife, from
18 investing too heavily before they have the proper training, instruction, and
19 understanding of the benefits and risks of such investments. Objectors criticize this
20 reform by reference to declarations of members who apparently were unsuccessful
21 with a nutrition club. This reform, however, provides members time to make
22 informed decisions about how or whether to invest their money, not as a guarantee
23 of success to any member.
24

Ninth, the Settlement Agreement ensures transparency of Herbalife member

25 success and failure rates by requiring Herbalife to include its Statement of Average
26 Gross Compensation (SAGC) of members with any membership application and a
27 requirement that any applicant acknowledge having reviewed the SAGC. The
28

60

In re Amway Corp., 93 F.T.C. 618, 716 (1979).
43

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1 SAGC must contain the total number and percentage of all members who receive no
2 compensation payment directly from Herbalife. Herbalife can no longer disclose
3 only those who made money with the Herbalife business opportunity in the
4 preceding year (as it did for multiple years of the Class Period), but also must
5 disclose those who made no money pursuing the business opportunity. This change
6 does not accept the Lieberman 73% survey. Rather, it provides prospective
7 members critical pieces of information regarding the fact that the vast majority of
8 Herbalife members do not receive checks from Herbalife. This transparency is a
9 critical reform for members and potential members, to the detriment of Herbalife.
10

The Objectors do not claim these are unhelpful changes. Rather, as with other

11 complaints, they claim the changes do not go far enough. Objectors would require
12 Herbalife to disclose its members “business expenses” and “additional expenses
13 incurred by Herbalife Nutrition Club operators.” The problem is that Herbalife
14 members are independent contractors. So the amount each member might spend on
15 marketing or a nutrition club is entirely up to the member.
16

That Herbalife implemented some of those practices prior to final approval of

17 the Settlement Agreement does not render them valueless to the Settlement Class or
18 unrelated to Plaintiffs’ allegations. And the Settlement Class may enforce them as
19 material terms of the Settlement Agreement should Herbalife violate any of these
20 required reforms.
21
22
23

2.

The Timing or Duration of the Corporate Reforms does not
Diminish Their Value.

Objectors and amicus curiae TINA and NCL claim the corporate reforms

24 lack any value because many predate settlement and because they are limited to
25 three years. Both claims lack merit.
26

First, they cite no authority suggesting that policy changes implemented prior

27 to settlement renders them valueless, particularly where class members can enforce
28 them. In Staton v. Boeing Co., cited by TINA, the court of appeals reversed the
44

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1 district courts approval of a consent decree because of “considerations relating to
2 the award of attorneys’ fees and because of the structure of the damages payments
3 established by the decree,” noting “[d]espite all of the foregoing concerns, we
4 would not overturn the district court’s determination to approve the settlement as
5 fair were the release and injunctive provisions the only aspects of the decree that are
6 troublesome.” 61 And In re Dry Max Pampers Litig., which disapproved a settlement
7 providing a large attorneys’ fees award, had no cash for the unnamed class
8 members and only the temporary reinstatement of a refund policy that already had
9 been in place, does not apply here.62 Courts can and do approve settlement
10 agreements in which defendants implement policy changes prior to settlement.63
11 The cases cited by TINA all have the same thing in common: little to no economic
12 relief to the proposed class, which is not the case here.64 TINA and NCL fail to
13 articulate why the class would benefit from a delay in implementation of reforms
14 they concede are beneficial.
15

Second, the Ninth Circuit has recognized that even temporary injunctive

16 relief may provide significant value to plaintiffs and constitute a valid and valuable
17 part of approved final class action settlements.65
18
19
20
21
22
23
24
25
26
27
28

61

327 F.3d 938, 945, 962 (9th Cir. 2003).
724 F.3d 713, 715, 722 (6th Cir. 2013).
63
See, e.g., Miller v. Ghiradelli Chocolate Co., No. 12-CV-04936, 2015 WL 758094, at
*1 (N.D. Cal. Feb. 20, 2015) (approving settlement that required defendant to maintain for three
years, “certain labeling changes to all the products at issue, changes that it implemented during
th[e] lawsuit.”) appeal filed Miller v. Ghirardelli Chocolate Co., (9th Cir. March 20, 2015); Torres
v. Pet Extreme, No. 1:13-CV-01778-LJO, 2015 WL 224752, at *7 (E.D. Cal. Jan. 15, 2015)
amended, No. 1:13-CV-01778-LJO, 2015 WL 648241 (E.D. Cal. Feb. 5, 2015); Moore v. Verizon
Commc'ns Inc., No. C09-1823 SBA, 2013 WL 4610764, at *7 (N.D. Cal. Aug. 28, 2013);
64
See e.g., Vassalle v. Midland Funding, LLC, 708 F.3d 747, 755-56 (6th Cir. 2013),
(“disparity in the relief afforded under the settlement to the named plaintiffs [$2,000 each], on the
one hand, and the unnamed class members, on the other hand [only $17.38 each]” while noting
that the single year of injunctive relief was of little value.); Pearson v. NBTY, Inc., 772 F.3d 778,
785 (7th Cir. 2014) (¼ of the unnamed victims would be modestly compensated [approximately
$29 each] versus the $5,000 awards to each of the six named plaintiffs and because labels were
changed in trivial respects for only twenty-four months)
65
. See, e.g., Miller v. Ghiradelli Chocolate Co., No. 12-CV-04936, 2015 WL 758094, at
*11 (N.D. Cal. Feb. 20, 2015) (finding that defendant’s agreement in settlement to maintain for
45
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1
2

G.

The Release Is Appropriate

Objectors and amici criticize the alleged scope of release, claiming the

3 Settlement Class is forever precluded from suing Herbalife and instead, releases
4 Herbalife from all claims that were or could have been raised in this action
5 (Settlement Agreement §8.) This is not true.
6

First, the release does not extend to any future claims, which were not and

7 could not have been raised in the FAC. Second, the Settlement Agreement does not
8 prevent the Settlement Class from participating in any government investigations
9 involving Herbalife. And if in three years, Herbalife subjects itself to potential
10 liability by reverting to the challenged and changed corporate policies, future
11 plaintiffs, including members in the Settlement Class, could seek to hold Herbalife
12 liable again. Third, the release does not include claims against any of the lead
13 generation companies. (Joint Decl. ¶63 [Dkt. No. 96].) These types of companies
14 have been publicly criticized for inducing new members/distributors to spend large
15 sums of money on lists of potential leads and materials to attract potential leads
16 that, in reality, had little value. (Joint Decl. ¶63 [Dkt. No. 96].) Plaintiffs and the
17 Settlement Class remain free to bring viable claims on either a class-wide or
18 individual basis against such companies if actionable conduct occurred and resulted
19 in economic loss. (Joint Decl. ¶63 [Dkt. No. 96].) Objectors cite no legal basis for
20 their stated concern that lead generation claims against Herbalife directors would be
21 released given that such persons are covered by the Release only as directors, and
22 not as individuals.
23
24
25
26
27
28

three years certain labeling changes implemented during lawsuit had significant value to class
members and giving the settlement final approval), appeal filed Miller v. Ghirardelli Chocolate
Co., (9th Cir. March 20, 2015); Guerrero v. Wells Fargo Bank, N.A., No. C 12-04026 WHA,
2014 WL 4351113, at *2 (N.D. Cal. Sept. 2, 2014); Arnold v. Fitflop USA, LLC, No. 11-CV0973 W KSC, 2014 WL 1670133, at *6 (S.D. Cal. Apr. 28, 2014), appeal dismissed (Oct. 20,
2014); Bruno v. Quten Research Inst., LLC, No. SACV 11-00173 DOC EX, 2013 WL 990495, at
*1 (C.D. Cal. Mar. 13, 2013).
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1

H.

Class Notice and Claims Process Satisfies Due Process

2 Five Brooks Objectors, Calderon, Colon, Leon, Sanchez, and Vallecillo,
3 complained that they did not receive timely notice. Two other objectors, Konstance
4 Armstrong and Wyman Jong also objected because they too did not receive timely
5 notice. (Dracht Decl. Exh. A.) As explained above, Class Counsel had previously
6 secured the agreement of Herbalife to allow late claims where late notice was an
7 issue. Upon receipt of these objections, Class Counsel arranged for the Brooks
8 Objectors and Armstrong and Jong to make late claims, which they did. (Dracht
9 Decl. Exs. B and C.) Armstrong and Jong withdrew their objections. (Dracht Decl.
10 Ex. B.) As explained above, Class Members who may have received late notice are
11 being permitted to make a claim on the cash fund component of the Settlement up
12 to April 30, 2015 or upon exhaustion of funds, whichever is first. Given these
13 accommodations the Court should overrule this objection.
14
15

I.

Cy Pres Recipient

Plaintiffs and Herbalife have agreed that the business opportunity awards to

16 be paid from the $15 million cash component can be increased from 50% to 75% of
17 the claimant’s losses, and Class Counsel reserves the right to request even a higher
18 amount once all late claims are processed.
19

TINA’s entire argument as to the cy pres award centers on its contention that

20 “the use of a cy pres award in this case, where the majority of class members will
21 receive a maximum of $20 is inappropriate and unfair.” This argument finds no
22 support in the Ninth Circuit. In this circuit, the “cy pres doctrine allows a court to
23 distribute unclaimed or non-distributable portions of a class action settlement fund
24 to the ‘next best’ class of beneficiaries.”66 TINA has raised no objection to the
25 reasonableness factors, and it is presumed that TINA agrees that each of these has
26 been met.
27

Here, the cy pres remedy will account for the nature of the plaintiffs’ lawsuit

28

66

Nachshin v. AOL, LLC, 663 F.3d 1034, 1036 (9th Cir. 2011).
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1 because the lawsuit concerns misleading marketing to consumers in a multi-level
2 marketing scheme, and the goal of the proposed cy pres recipient, Consumer
3 Federation of America (“CFA”), is to aid consumers. The interests of the silent
4 class members will be met because the money that will go to the CFA will benefit
5 these consumers. The CFA and Consumers Union have been invited to give
6 congressional testimony far more frequently than any other consumer groups.
7 (Brobeck Decl., ¶5 [Dkt No. 97].) And it has been a leader in consumer and
8 financial education, utilizing coalitions, networks, social media and the press to
9 disseminate messages through both hard copy and online materials. (Brobeck Decl.,
10 ¶5 [Dkt No. 97].) And, if enough money goes to the CFA through the cy pres
11 award, it may develop a new education initiative that could more disseminate
12 consumer messages regarding multi-level marketing developed by the Federal
13 Trade Commission. (Brobeck Decl., ¶¶7-8 [Dkt No. 97].) 67
14

The analysis within the Ninth Circuit ends there. The Ninth Circuit authority

15 relied on by TINA does not stand for the proposition that the cy pres award is
16 inappropriate based on the amount recovery obtained by the individual class
17 members. And each one of the Ninth Circuit cases relied upon by TINA is
18 distinguishable, each finding that the cy pres remedy was improper because (unlike
19 here) it did not account for the nature of the plaintiffs’ lawsuit, the objectives of the
20 underlying statutes, and the interests of the silent class members.
21
22

VI.

CONCLUSION
The settlement is fair, adequate, and reasonable and Plaintiffs respectfully

23 request this Court grant final approval to the Settlement Agreement and enter the
24 proposed order.
25
26
27
67

28

See e. In re Apple iPhone/iPod Warranty Litig., 2014 U.S. Dist. LEXIS 64573, 40 (N.D.
Cal. 2014)
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1 DATED: April 13, 2015
2

FABIAN & CLENDENIN, P.C.
FOLEY BEZEK BEHLE & CURTIS, LLP

3
4
5
6

/s/Thomas G. Foley, Jr.
Philip D. Dracht
Scott M. Petersen
Jason W. Hardin

7
8

Thomas G. Foley, Jr.
Justin P. Karczag

9
10

Attorneys for Plaintiffs

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
49

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1
2
3
4
5

Philip D. Dracht (SBN 219044)
pdracht@fabianlaw.com
Scott M. Petersen (pro hac vice)
spetersen@fabianlaw.com
Jason W. Hardin (pro hac vice)
jhardin@fabianlaw.com
Fabian & Clendenin
215 South State Street, Suite 1200
Salt Lake City, UT 84151-0210
Telephone: (801) 531-8900

6
7
8
9
10
11
12
13
14

Thomas G. Foley, Jr., SBN 65812
tfoley@foleybezek.com
Justin P, Karczag, SBN 223764
jkarczag@foleybezek.com
Foley Bezek Behle & Curtis, LLP
15 West Carrillo Street
Santa Barbara, CA 93101
Telephone: (805) 962-9495
Attorneys for Plaintiffs Dana Bostick,
Anita Vasko, Judi Trotter, Beverly
Molnar, and Chester Cote
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

15 DANA BOSTICK, et al.,
16
PLAINTIFF,
17
18 vs.
19 HERBALIFE INTERNATIONAL
20 OF AMERICA, INC., a Nevada
Corporation, HERBALIFE
21 INTERNATIONAL, INC., a Nevada
22 Corporation, HERBALIFE, LTD a
Cayman Island Corporation,
23
24

DEFENDANTS.

25

Case No.: 2:13-cv-02488-BRO (RZx)
PLAINTIFFS’ MEMORANDUM
IN OPPOSITION TO (1) TINA’S
MOTION FOR LEAVE TO FILE
AN AMICUS CURIAE BRIEF [DKT
NO. 114] AND (2) NCL’S MOTION
FOR LEAVE TO FILE AN
AMICUS CURIAE BRIEF [DKT No.
117]
Hon. Beverly Reid O’Connell
Date: May 11, 2015
Time: 1:30 p.m.
Place: Courtroom 14-Spring St. Floor

26
Complaint filed: April 8, 2013

27
28

Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF

Case 2:13-cv-02488-BRO-SH Document 126 Filed 04/13/15 Page 2 of 9 Page ID #:3635


1

I.

BACKGROUND AND INTRODUCTION
On April 8, 2013, Dana Bostick, on behalf of himself and others similarly

2
3

situated, filed a complaint against Herbalife International of America, Inc.,

4

Herbalife International, Inc., and Herbalife Ltd.
On October 31, 2014, Plaintiffs and Defendants entered into a Stipulation of

5
6

Settlement (“Settlement Agreement”). The Settlement Agreement provides (1)

7

economic relief for the Settlement Class through cash awards and refunds for

8

returned product and (2) thirteen specific agreed-to corporate reforms. After

9

careful consideration, this Court entered an order granting preliminary approval of

10

the Settlement Agreement and directed that notice of the settlement be

11

disseminated to the Class (the “Preliminary Approval Order”). Dkt. No. 105.

12

On March 16, 2015, two corporations who are not class members but who

13

call themselves “Truth In Advertising, Inc.” (“TINA”) and “National Consumers

14

League Inc.” (“NCL”) filed motions for leave to file amicus curiae briefs in

15

opposition to the settlement. Dkt. No. 114 (TINA’s brief); Dkt. No. 117 (NCL’s

16

brief). Both claim their purpose and accompanying brief is to object to the

17

Settlement Agreement as “fundamentally unfair to the class members.” Dkt. No.

18

114 at 1; Dkt. No. 117 at 1. Their motions are essentially identical. Even the

19

summaries of what they claim their proposed amicus briefs provide are identical.

20

The Court should deny both motions. Neither TINA nor NCL offer the

21

Court helpful information or a unique perspective; TINA and NCL do not

22

represent Class Members’ interests; and neither TINA nor NCL have provided

23

important disclosures required of amici to disclose any possible bias or motives

24

they may have.

25

II.

26
27

ARGUMENT
Whether to consider an amicus brief is solely within the discretion of the

court, however, amicus briefing is seldom appropriate at the trial court level where

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2
Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF

Case 2:13-cv-02488-BRO-SH Document 126 Filed 04/13/15 Page 3 of 9 Page ID #:3636


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the parties are adequately represented by experienced counsel.1 The extensive

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discretion of district courts is such that the denial of permission to appear as

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amicus curiae is not subject to appeal.2 In order to guide district courts faced with

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the request of a proposed amicus curiae the First Circuit has instructed:

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we believe a district court lacking joint consent of the parties should

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go slow in accepting, and even slower in inviting, an amicus brief

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unless, as a party, although short of a right to intervene, the amicus

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has a special interest that justifies his having a say, or unless the court

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feels that existing counsel may need supplementing assistance.3

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A.

The “Perspective” TINA and NCL Seek to Provide Is Unhelpful.

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The role of amicus curiae is to assist “in a case of general public interest,

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supplementing the efforts of counsel, and drawing the court’s attention to law that

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escaped consideration.”4 They should assist the Court, and “give[] information of

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some matter of law in regard to which the court is doubtful or mistaken,’ rather

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than one who gives a highly partisan, . . . account of the facts.”5 To be true amicus

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curiae, TINA and NCL have the burden of “showing that [their] participation is

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useful to or otherwise desirable to the court.”6 Their motions and proposed briefs,

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1

See Ryan v. CFTC, 125 F.3d 1062, 1063 (7th Cir. 1997); Sonoma Falls Developers,
LLC v. Nevada Gold & Casinos, Inc., 272 F. Supp. 2d 919, 925 (N.D. Cal. 2003) (District courts
welcome amicus briefs “if the amicus has ‘unique information or perspective that can help the
court beyond the help that the lawyers for the parties are able to provide.’”) (quoting Cobell v.
Norton, 246 F Supp 2d 59, 62 (D.D.C.2003).
2

Palladino v. Governor of Pennsylvania, 589 F. App'x 61, 64 n. 2 (3d Cir. 2014) (noting
that its “jurisdiction would not extend to the District Court’s decision denying Schneller leave to
act as amicus curiae”); S.E.C. v. Better Life Club of Am., Inc., No. 98-5006, 1998 WL 389102, at
*1 (D.C. Cir. June 1, 1998) (“the denial of a motion to participate as amicus curiae is not
appealable.”); Boston & Providence R. R. Stockholders Dev. Grp. v. Smith, 333 F.2d 651, 652
(2d Cir. 1964) ( “A denial of a motion to intervene as amicus curiae is not appealable”).
3
Strasser v. Doorley, 432 F.2d 567, 569 (1st Cir. 1970).
4
Miller-Wohl Co., 694 F.2d 203, 204.
5
New England Patriots Football Club, Inc. v. Univ. of Colorado, 592 F.2d 1196, 1198
(1st Cir. 1979) (quoting 1 Bouvier's Law Dictionary 188 (3d ed. 1914)) (internal citations
omitted).
6
In re Roxford Foods Litig., 790 F. Supp. 987, 997 (E.D. Cal. 1991) (quoting United
States v. Louisiana, 751 F.Supp. 608, 620 (E.D.La.1990)).
3
Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF

Case 2:13-cv-02488-BRO-SH Document 126 Filed 04/13/15 Page 4 of 9 Page ID #:3637


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however, provide no such assistance and, therefore, fail to meet their burden of

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showing helpfulness.

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TINA and NCL’s amicus briefs offer nothing more to the court than a

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cursory comparison of the allegations of Plaintiffs’ latest complaint with the

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Settlement Agreement. Their analysis lacks any substance, and ignores the

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extensive discovery between the parties, which included: (1) preparing and

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overseeing massive written discovery to Herbalife and discovery responses by the

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named Plaintiffs; (2) analyzing over 148,000 pages of internal Herbalife

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documents that were produced, including several gigabytes of confidential

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Herbalife data, numerous documents provided by former Herbalife members or

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distributors and other persons, and large amounts of Herbalife’s public materials

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and other publicly available documents; (3) participating in several depositions; (4)

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participating in interviews with former Herbalife members or distributors; (5)

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participating in site inspections of Herbalife’s quality control facilities, research

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and development facilities, Los Angeles distribution center and a Los Angeles area

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nutrition club; and (6) selecting and consulting with experts (including an

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economist for class certification). TINA and NCL seek to advocate their position

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with no idea who or how many class members have made claims, what those

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claims currently look like, or whether the settlement fairly and adequately

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addresses them.

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Amicus curiae are traditionally non-partisan providers of a legal perspective

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or information to the court,7 but TINA and NCL offer only unhelpful and

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unnecessary conclusions. As one court explained: “A district court must keep in

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mind the differences between the trial and appellate court forums in determining

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whether it is appropriate to allow an amicus curiae to participate. Chief among

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those differences is that a district court resolves fact issues. ‘An amicus who argues

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7

Funbus Systems, Inc. v. California Public Utilities Com., 801 F.2d 1120, 1124–25 (9th
Cir.1986).
4
Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF

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facts should rarely be welcomed.’”8 Yet that is precisely what TINA and NCL’s

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briefs do: argue in an unsupported and conclusory matter that the allegations in

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Plaintiffs’ Amended Complaint are factually correct and that the settlement should

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therefore not be approved. See, e.g., Dkt. No. 117 at 2 (noting NCL’s conclusion

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“that Herbalife is in fact a sophisticated pyramid scheme.”); Dkt. No. 114 at 3

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(“TINA.org opposes the proposed settlement”). This type of cursory analysis does

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not aid the Court with anything, let alone “unique information or perspective that

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can help the court beyond the help that the lawyers for the parties are able to

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provide.”9

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In truth, TINA and NCL are objectors without standing masquerading as

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amici. Contrary to the purpose of an amicus filing, both TINA and NCL claim to

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represent “consumers” in some capacity, Dkt. No. 117 at 1 & Dkt. No. 114 at 1,

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but they both ultimately concede their real purpose is to object to the settlement.

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See, e.g., Dkt. No. 117 at 2 (noting NCL’s conclusion “that Herbalife is in fact a

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sophisticated pyramid scheme.”); Dkt. No. 114 at 3 (“TINA.org opposes the

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proposed settlement”). Amicus curiae are not parties to the litigation,10 and

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therefore “amicus has been consistently precluded from . . . participating and

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assuming control of the controversy in a totally adversarial fashion.”11 The true

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purpose of an amicus curiae should not be abused or twisted into a means for non-

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Club v. Fed. Emergency Mgmt. Agency, No. CIV.A. H-07-0608, 2007 WL 3472851, at
*1 (S.D. Tex. Nov. 14, 2007) (quoting Strasser v. Doorley, 432 F.2d 567, 569 (1st Cir. 1970));
see also Acra Turf Club, LLC v. Zanzuccki, No. CIV.A. 12-2775 MAS, 2014 WL 5465870, at *5
(D.N.J. Oct. 28, 2014) (noting that an amicus are less likely to be helpful at the district court
level) (italics added).
9

Merritt v. McKenney, No. C 13-01491 JSW, 2013 WL 4552672 at *4 (N.D. Cal. Aug.
27, 2013) (citing Miller-Wohl Co., 694 F.2d 203).
10
Miller-Wohl Co. v. Comm'r of Labor & Indus. State of Mont., 694 F.2d 203, 204 (9th
Cir. 1982).
11
U.S. v. State of Mich., 940 F.2d 143, 165 (6th Cir. 1991); Singleton v. Wulff, 428 U.S.
106, 113‐14 (1976) (“[T]he courts should not adjudicate such rights unnecessarily, and it
may be that in fact the holders of those rights either do not wish to assert them, or will be
able to enjoy them regardless of whether the in‐court litigant is successful or not.”)
5
Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF

Case 2:13-cv-02488-BRO-SH Document 126 Filed 04/13/15 Page 6 of 9 Page ID #:3639


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parties to circumvent the more stringent requirements of intervention and standing

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in order to control the litigation.

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B.

TINA and NCL Do Not Represent the Class Members’ Interests.

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As non-parties who have suffered no actual or prospective injury, TINA and

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NCL appear, unarmed with any details save those from the press and the docket,

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and ask the Court to let them second-guess the favorable settlement reached

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following arms-length negotiations. If TINA and NCL have their way, Class

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Members who are owed money under the Settlement Agreement would not be

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permitted to settle their grievances and, instead, must litigate based on two non-

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party entities’ desire to move forward with litigation that presumably benefits

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TINA and NCL’s interests—not the interests of Class Members. TINA itself has

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acknowledged what this would mean for the Class Members:

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[P]yramid schemes cannot be fixed. The bad parts cannot

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be excised from the rest of the organization. The only

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remedy for an illegal pyramid scheme is the complete

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and irreversible destruction of the company. As a result,

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in those cases where the company does not immediately

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lie down and die, such accusations of wrongdoing

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inevitably lead to a long, protracted legal battle that

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consumes an obscene amount of money and a multitude

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of man hours.12

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In its Preliminary Approval Order, the Court preliminarily concluded that

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Plaintiffs are adequately represented and that a preliminary assessment of the

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Settlement Agreement shows it to be fair, reasonable and adequate. Dkt. No. 104

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schemes/.

12

https://www.truthinadvertising.org/not-your-grandmas-tupperware-mlms-vs-pyramid-

6
Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF

Case 2:13-cv-02488-BRO-SH Document 126 Filed 04/13/15 Page 7 of 9 Page ID #:3640


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¶¶ 7 & 9.13 Objections have been filed in this case and the objectors have legal

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counsel. Thus, the Court does not need non-parties who do not act in the interest

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of Class Members objecting to a proposed settlement when some Class Members

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have already done so. This is especially true where the proposed amici add

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nothing new to the assertions already made by objectors.

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C.

Appellate Rule 29 Supports Denial of the Motions.

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While Rule 29 of the Federal Rules of Appellate Procedure does not

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specifically apply to district courts, many district courts look to the rule for

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guidance in determining whether an amicus brief should be considered.14 Rule 29

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requires amicus curiae corporations to include “a disclosure statement like that

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required of parties by Rule 26.1.” Rule 26.1 requires a statement that “identifies

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any parent corporation and any publicly held corporation that owns 10% or more

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of its stock or states that there is no such corporation.”15 In addition, Rule 29(5)(c)

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requires an amicus curiae to state whether “a person--other than the amicus curiae,

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its members, or its counsel--contributed money that was intended to fund preparing

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or submitting the brief and, if so, identifies each such person.”16

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TINA and NCL have failed to comply with any of the disclosure

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requirements of Rule 29, leaving the Court unable to assess whether any financial

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Contrary to the assertions of both TINA and NCL, the fact of settlement itself does not
remove, and has not removed, the adversarial nature of the settling parties. Plaintiffs continue to
negotiate with Herbalife to allow for late filing of claims and additional clarifications to the
Settlement Agreement that provide additional benefits to the class. In addition, Plaintiffs intend
to move the Court to increase the payout percentage under section 4.4.5 of the Settlement
Agreement to maximize the settlement benefits for those class members who qualify as Business
Opportunity Claimants.
14
See Monarch Beverage Co. v. Johnson, No. 1:13-CV-01674-WTL, 2014 WL 7063019,
at *1 (S.D. Ind. Dec. 11, 2014) (“Upon the rare occasion of such desire to participate as amicus
curiae on the district court level, courts look to the principles used in implementing Rule 29 of
the Federal Rules of Appellate Procedure.”); Ctr. For Biological Diversity v. U.S. E.P.A., No.
C13-1866JLR, 2015 WL 918686, at *31 n. 9 (W.D. Wash. Mar. 2, 2015); Acra Turf Club, LLC
v. Zanzuccki, No. CIV.A. 12-2775 MAS, 2014 WL 5465870, at *5 (D.N.J. Oct. 28, 2014); Am.
Humanist Ass'n v. Maryland-Nat'l Capital Park & Planning Comm'n, 303 F.R.D. 266, 269 (D.
Md. 2014).
15
Fed. R. App. P. 26.1.
16
Fed. R. App. P. 29(5)(c)
7
Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF

Case 2:13-cv-02488-BRO-SH Document 126 Filed 04/13/15 Page 8 of 9 Page ID #:3641


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incentives exist for filing their motions and, if so, what person or entity is behind

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them. Lack of financial and corporate disclosures provide the Court yet another

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basis for denying the motions, particularly given the widely publicized third party

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hedge fund investors who have substantial economic self-interest in the success or

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failure of Herbalife’s business model.

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III.

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CONCLUSION
The Court should deny both TINA’s and NCL’s motion for leave file to file

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objections to the Settlement Agreement shrouded in the cloak of amicus curiae

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briefs.

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DATED: April 13, 2015

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FABIAN & CLENDENIN, P.C.
FOLEY BEZEK BEHLE & CURTIS LLP

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/s/ Scott M. Petersen
Philip D. Dracht
Scott M. Petersen
Jason W. Hardin

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Thomas G. Foley, Jr.
Robert A. Curtis
Justin P. Karczag

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Attorneys for Plaintiffs

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Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF

Case 2:13-cv-02488-BRO-SH Document 126 Filed 04/13/15 Page 9 of 9 Page ID #:3642


CERTIFICATE OF SERVICE

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I hereby certify that on this 13th day of April, 2015, the foregoing has been

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served via the CM/ECF system on counsel for Plaintiffs and Defendants at the

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following addresses:
A Howard Matz ahm@birdmarella.com, dh@birdmarella.com
Aaron Lee Arndt aarndt@foleybezek.com
David L Zifkin dzifkin@bsfllp.com, dmcknight@bsfllp.com,
ecolle@BSFLLP.com, Lcajigas@bsfllp.com, tsparks@bsfllp.com
Gopi K Panchapakesan gkp@birdmarella.com, kmm@birdmarella.com,
mlw@birdmarella.com
Jason W Hardin jhardin@fabianlaw.com
Jonathan Sherman jsherman@bsfllp.com
Jonathan David Schiller jschiller@bsfllp.com
Joseph F Kroetsch jkroetsch@bsfllp.com
Justin P Karczag jkarczag@foleybezek.com, cwalker@foleybezek.com,
ehuffman@foleybezek.com
Kevin D Gamarnik kgamarnik@foleybezek.com
Mark T Drooks mtd@birdmarella.com, lak@birdmarella.com
Mitchell A Kamin mak@birdmarella.com, km@birdmarella.com,
krw@birdmarella.com, lak@birdmarella.com
Philip D Dracht pdracht@fabianlaw.com, aclark@fabianlaw.com,
smcnett@fabianlaw.com
Robert Allen Curtis rcurtis@foleybezek.com,
cconnors@foleybezek.com, jkassity@foleybezek.com
Scott M Petersen spetersen@fabianlaw.com, smcnett@fabianlaw.com
Thomas Foley tfoley@foleybezek.com, aarndt@foleybezek.com,
cconnors@foleybezek.com
William S Ohlemeyer wohlemeyer@bsfllp.com
Andrea L Petray apetray@marksfinch.com, nhorn@marksfinch.com
James C Sturdevant jsturdevant@sturdevantlaw.com,
bnuss@sturdevantlaw.com, ydrevon@sturdevantlaw.com

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April 13, 2015

/s/ Scott M. Petersen

4830‐2156‐5475, v. 2

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Case No. 2:13-cv-02488-BRO (RZx)
OPPOSITION TO (1) TINA’S MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF AND (2) NCL’S
MOTION FOR LEAVE TO FILE AN AMICUS CURIAE BRIEF