Federal Judge In Florida Rules For Herbalife In Civil RICO Lawsuit
According to a report from the Winston-Salem Journal, a Florida federal judge has ruled in favor of Herbalife in a civil RICO lawsuit. The dieting and nutrition company, which is based in Los Angeles and employs nearly 10,000 people worldwide, has been fighting a civil RICO claim for nearly four years. While Judge Marcia Cooke did not eliminate Herbalife’s potential liability, she did substantially scale back the plaintiff’s remaining claims. Here, our Miami RICO claims attorneys provide an overview of the Herbalife lawsuit and pleading standards in a civil racketeering case.
Allegations: Herbalife and its Distributors Violated Federal RICO Laws
In September of 2017, Herbalife and several dozen of its top earning distributors were sued for federal civil RICO violations in the United States District Court of the Southern District of Florida. The lawsuit alleges that, among other things, Herbalife misleads actual and potential customers and operates in much the same manner as a classic pyramid scheme.
Previously, Herbalife reached a $200 million settlement with the Federal Trade Commission (FTC) to revamp its compensation practices and marketing claims. However, the civil RICO lawsuit filed against the company alleges that the FTC settlement did not nearly go far enough. It contends that Herbalife and its top distributors are acting in violation of federal RICO laws.
Florida Federal Judge Substantially Reduced the Scope of the Claim Against Herbalife
On September 30th, 2021, Judge Marcia Cooke of the U.S. District Court for the Southern District of Florida dismissed several of the claims against Herbalife. Though, she did give the plaintiffs in the case 30 days to submit an amended complaint to address underlying issues with the claim. That being said, the plaintiffs’ civil RICO claim appears to be in bad shape. In a 14 page decision, Judge Cooke emphasized that the civil lawsuit as filed simply “fails to meet the higher pleading standards required for civil RICO cases.”
The reality is that this is often an issue in civil RICO claims. Although a civil RICO lawsuit offers a very powerful potential tool for justice to plaintiffs victimized by racketeering activity, it is also a narrow remedy. It is difficult to meet civil RICO pleading standards. Asserting fraud, material misrepresentations, and/or other improper conduct is not enough. A plaintiff must assert that the defendants engaged in a pattern of racketeering activity as part of an enterprise. Many civil RICO claims are dismissed for failure to satisfy this pleading requirement.
Call Our Miami, FL Civil Rico Lawyer for Immediate Help
At Pike & Lustig, LLP, our Florida civil RICO lawyers have the professional skills and legal expertise to handle both federal and state claims. If you have questions about your case, please contact us now for a confidential consultation. From our law offices in Miami and West Palm Beach, our law firm handles civil RICO claims throughout the surrounding area, including in Miami-Dade County, Broward County, Palm Beach County, and Martin County.