And So Shines a Good Deed on A Cruel Turd

On December 2nd, 2013, in Brussels, a panel of three judges in the 8th Chamber of the Belgian Court of Appeals was determining the fate of Herbalife's appeal (2012/AR/736) in the Test-Aankoop vs Herbalife case (AR 2004/7787). Sounds like the beginning of a Wu-Tang album. Test-Aankoop originally sued Herbalife in 2004 claiming that Herbalife violated Belgian Consumer protection laws (as described in the Belgian Commercial Practices Act, a.k.a the WMPC). Herbalife lost this case in 2011 when the court found that Herbalife had violated the WMPC because it had established, managed and promoted a pyramid scheme under which compensation was derived primarily from the introduction of other consumers or businesses, rather than from the sale or consumption of products. Herbalife was ordered to stop operating a pyramid and to pay €5,000 for each infraction that occurred after two months from the ruling(€250,000 max penalty). Herbalife maintained that the ruling was based on factual errors and that they believed an appeal would exonerate them of the pyramid accusations. They filed that appeal in March 2012.

Every dog has his day and Ackman used his to let his dogs run all over Herbalife's lawn. He cited the Test-Aankoop ruling in his work as primary evidence that Herbalife would be found to be a pyramid and would get shut down. As mentioned in an earlier post, he's still hosting the OLD Test-Aankoop ruling although on December 2nd, 2013, the Belgian Appeals court overturned the decision and found that Herbalife was not an illegal pyramid. There were numerous news reports on December 3rd that the ruling had been overturned, but nothing in the way of substantive evidence as to the full determination of the appeal. After reviewing an authenticated translation of the actual ruling I offered some choice interpretation in a previous post, but I did so without posting the ruling in full.

That brings me back to Ackman's dogs. You ever wonder why turds on the lawn turn white?

The answer is simple: SUNLIGHT.

*(click on the Sun to see the Belgian Court's ruling in favor of  Herbalife's appeal, also embedded below.)

When it's 23°F outside, the 8 1/2 minutes those photons took to hurl themselves from the sun to my skin feel like nothing more than an inconvenience. I'd wait a lot longer than 8 1/2 minutes in weather like this.

The tiny little bit of interpretation I'll provide here is that this ruling is effectively a point by point refutation of the Ackman thesis. Although it is unclear what affect this may have on US regulators, it is worth noting that the WPMC is a direct conversion of the codes set by the European Commission. The sunlight has taken 51 weeks to reach Ackman's lawn grenade. I'm sorry you had to wait.

The last paragraph of the ruling pretty much sums it all up:

"From all previous determinations and considerations, it follows that it has not been shown that the sales system employed by the appellant can be considered as a system whereby the consumer/an enterprise, by means of a payment, receives a chance to a compensation which mainly flows from the establishment of new consumers/new enterprises in the system, than from the sale or consumption of products.
In conclusion, no infringement is shown to article 91, 14°, nor to article 99 of the WMPC."

So, without further ado, presented both above and below, without editing** is the full translation of the Belgian Court of Appeals ruling.

**Please note that in full disclosure I have redacted a single page in it's entirety from the very beginning of the document (page 1). The redacted page is simply the notarized certification of the translation. I have done this solely to protect the identity of the translator as well as the notary public that notarized the document. If someone else wants to give you their names, fine, but it's not going to be me.

That disclaimer aside, feel free to verify the authenticity of my document. I almost didn't post this, but I have to admit, I kind of enjoy scooping the NY Post. Then again most of their documents come from the shadows. Walk around in the dark and you're practically guaranteed to step in something.

Herbalife Belgian Appellate Judgment