Appeals Court Returns Diet Pill Class Action to Trial Court

Appeals Court Returns Diet Pill Class Action to Trial Court

A federal appellate court has dismissed an appeal of a class action settlement by the maker of the diet pill Akavar, ruling May 6 the court has no jurisdiction until a final judgment is rendered in the underlying case.

In an appeal to the U.S. Court of Appeals for the Tenth Circuit, defendant Basic Research challenged the merits of the district court’s conclusion that the parties had reached a binding settlement during mediation in Miller v. Basic Research. Plaintiffs contested the appellate court’s interlocutory jurisdiction.

In February 2006, Basic Research, through Dynakor, began marketing, distributing and selling a weight-loss dietary supplement called Akavar 20/50.

In November 2007, plaintiffs Pamela Miller, Randy Howard and Donna Patterson filed their class action against the manufacturer for false advertising. The suit claimed there was no scientific evidence that users of Akavar can “Eat all you want and still lose weight.”

The parties entered into mediation and told the district court that the mediation had been successful. But the drafting of the settlement hit a snag and the defendants told the district court it no longer intended to settle. The plaintiff class then filed a motion to enforce the settlement, which the district court granted because it concluded the parties had entered into an enforceable agreement, according to court documents.

Writing for the appellate court, Circuit Judge Timothy Tymkovich said that generally “the courts of appeal have jurisdiction only to review the “final decisions” of district courts.”

The judge said the parties here agree that the U.S. District Court for the District of Utah hasn’t reached its final decision since it has not approved the proposed settlement as is required in class actions under federal civil procedure rules.

The court said it disagreed with the defendant’s arguments for exceptions to the final judgment rule.

“We are not persuaded that delaying appellate jurisdiction imposes serious consequences or that the district court’s decision finding a binding settlement will effectively evade appellate review,” Tymkovich wrote. “Finally, we do not see the proposed settlement as an admission of liability.”

Laura Castro contributes to law.com.

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