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According to LOS ANGELES TIMES (By Andrea Chang, Sunday, October 11, 2009)

There is a Los Angeles federal court battle between Herbalife International of America Inc. and a group of its former distributors.

Herbalife sued Robert Ford of Georgia and seven other distributors that they allegedly stole the company's trade secrets and solicited Herbalife's distributors after they left Herbalife for a rival direct-sales outfit, Melaleuca Inc.

In a countersuit, the group contended that Herbalife operates an illegal pyramid scheme, in which earnings are based on the amount of products distributors buy from Herbalife, not on what distributors sell to consumers.

According to John Stephens, lawyer, The payments by Herbalife to distributors are not related to the sale of products on a retail basis

In August, the judge denied Herbalife's request to throw out the pyramid scheme allegation. The case is awaiting trial.