OpTree

This was an unusually active week in the MLM world given the surprising news of Weekenders going out of business and filing for bankruptcy without any notice to its Distributors. Some of the more clever burned distributors have started taking to eBay to hock their wares and recoup some money.

We also started seeing that Mannatech appears to be getting out from its own legal troubles by settling a case which has plagued the company for some time now.

In other legal news, Herbalife continues to be harassed by the lead suit that a woman has filed over claims that she has suffered liver damage from using their products. This latest fiasco stemmed from the infamous Barry Minkow who has Herbalife on his radar and just wont let go. This also comes at a time when the FDA has started cracking down on false claims made both from and against the industry.

Tupperware is the lasted MLM company to be affected by the US economy woes being hit with higher prices from Dow Chemical Co due to the rising costs of resin - one of the main components in Tupperware’s products.

In more positive news, the Stevie Awards were handed out and both Shaklee and USANA each won an award presented by the American Business Association.

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The Herbalife lawsuit just keeps getting worse…..In an unprecedented legal action, the attorney for the woman suing Herbalife over health problems she says was caused by the company’s Dietary Supplements, Christopher Grell, has expanded the scope of his lawsuit by adding a new group of defendants- the plaintiff’s “up-line distributors.”

The current suit against the company is seeking damages for fraud and product negligence.
Grell says that they will go after multiple “defendants” who were in the up-line of his client and will keep adding new defendants as the discovery portion of the case moves along.

Herbalife announced over a week ago that independent lab tests showed that the company’s products were in compliance with Proposition 65 which maintains safety as far as lead levels in dietary and nutritional supplements. Although the company claimed they had tests to prove this, no documents were ever released. Grell has since won a motion to get those test results. In the last week and a half, we have heard nothing from Herbalife, and now this case is expanding getting a lot worse for Herbalife.

While I think its important to maintain the quality and safety of the products, it seems a bit unfair to sue the distributors in the up-line. Those distributors only go by the information provided by their company. Distributors cannot be expected to run their own experiments to determine the efficacy or safety of products provided to them by the company. Hopefully Herbalife will find a way to settle this lawsuit quickly and can also provide results from scientific tests that back up their claim that their products are safe. Distributors from the company should not be held responsible for the company’s mistakes.

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We told you last week of the latest Herbalife lawsuit in which a California woman is suing the company over claims that their products led her to be hospitalized for liver problems. The lawsuit is moving forward, and it looks like it will cause major problems for the company.

The woman’s attorney, Christopher Grell has just won a motion to subpoena two labs that have tested the products and will issue 60 day notices to government agencies, the Attorney General and district attorneys in California to begin the process of forcing Herbalife to put warning labels on their products. Grell filed the most recent motion in order to obtain information from the two labs, Covance and Eurofins, that tested Herbalife products and reported that they were safe and met safety standards set forth in Propositions 65 which sets limits for lead levels in nutritional products for the state of California

“Based on our recently filed law suit, it appears that multiple sources from Switzerland to Jerusalem to the United States are all arriving at the same conclusion; there is something terribly wrong with Herbalife products and our just filed law suit is further corroboration of that fact,” said Christopher Grell. “Lab tests do not lie and Proposition 65 is a law to protect people from consuming excess lead from, of all things, their nutritional products,” added Grell.

Mr. Grell will also attempt to show that Herbalife products are weight loss remedies and that the company urges consumers to take a combination of products as part of a health and weight loss “program” for optimal benefits, thus increasing their lead intake significantly.

Grell lost his wife seventeen years ago after she had an adverse reaction to an “herbal” tea. Since then, he has been on a mission to improve safety standards in the herbal and dietary supplement industry. In addition to practicing law, Grell is the co-founder of the Dietary Supplement Safety Committee. This looks like it will be a tough battle for Herbalife. It seems that the law is siding with Grell and Herbalife will have to hand over previous tests as well as submit products for further testing. If new tests find high levels of lead, Herbalife will have to make some big changes. We will keep you up to date as the case moves forward.

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The problems for Herbalife keep coming. They are now being sued by a California woman who claims that she had to be hospitalized for lead related problems after taking Herbalife products.

The suit was announced earlier this week by San Francisco attorney Christopher Gell, who is a critic of Herbalife and…..this will come as no surprise…..she is a friend of Barry Minkow, the Fraud Discovery Institute, who just two weeks ago released “findings” that Herbalife products had excessive levels of lead. Herbalife has since rebuked those findings, saying that their own independent lab results showed that lead levels in their products are well within acceptable and legal levels.

The woman, Philis Chen, is suing Herbalife for Breach of Express Warranty, Breach of Implied Warranty, Strict Liability, Negligence and Fraud. The suit also names other companies that manufacture Herbalife products. Chen says that she began taking a combination of Herbalife products over a year ago and after a few months began feeling ill. She stopped taking the products and when her health improved, resumed taking the combination of Herbalife supplements, until recently when she noticed blood in her urine. Doctors in the hospital admitted her for testing and said that the liver problems were possibly connected to the Herbalife products.

I’m not sure why or how the doctors would assume or make that kind of claim without testing the products, but according to Ms. Chen’s attorney, Christopher Gell, this is the claim made by the doctors.
The suit was filed in Los Angeles County Superior court and apparently does not yet state a dollar amount of damages sought by the plaintiff.

Minkow is still on his rampage against Herbalife and now it seems he has another ally in attorney Christopher Gell. Hopefully this suit will force the company to do several more studies and once and for all put lead rumors to rest. But, for Minkow, I’m sure he sees this as a victory because even if Herbalife is vindicated, this is a legal and financial headache as well as continued bad press that will probably scare more than a few people away from using the products. We will keep you up-to-date on the lawsuit and its outcome.

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