Ruling • Decision could force Basic Research to refund millions to consumers.
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A federal judge in Utah has refused to let Basic Research back out of a settlement of a class-action lawsuit that claims consumers were defrauded by a weight-loss product advertised as "eat all you want & still lose weight."
U.S. District Judge Ted Stewart last week said Basic Research had agreed to a settlement during mediation and that it could not now say it had changed its mind. All key terms of the settlement had been signed by Dennis Gay, president and CEO of Basic Research, the judge wrote. In addition, the company had informed the court that a settlement had been reached.
Stewart wrote that because Basic Research had reversed itself and ended talks on final details of the settlement, "the primary question before the court is whether defendants had a change of heart after an enforceable agreement had been reached."
He ruled that because all major provisions for a settlement and been agreed to by both sides, Basic Research was required to settle final details.
An attorney for consumers called on the company to work toward getting payments to those who bought the disputed product, Akävar 20/50.
"We are pleased with the court's ruling and hope that Basic Research and the other defendants will work with us to complete the process so that members of the class can be compensated and this long-pending lawsuit finally resolved," said attorney Jon Harper, local counsel for the plaintiffs.
Basic Research attorney Christopher Sullivan said only that the company and its attorneys were reviewing Stewart's ruling and were "considering all of the legal options."
In 2007, Basic Research was sued for allegedly defrauding consumers with advertisements that falsely claimed Akävar was a "New! European Weight-Loss Breakthrough" product guaranteed to work, even as users could "eat all you want & still lose weight."
The settlement requires Basic Research to make a refund to any consumer who submits a sworn statement that they had purchased Akävar 20/50. The company also was to pay $3.5 million in costs and attorney fees.
Akävar was sold in many of the largest U.S. retail outlets, including GNC, Walgreens, Target, Rite-Aid, Costco and Kmart, court documents say. A 2009 court filing says sales were "well into the tens of millions of dollars" in the three years the product was offered.
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