Month: November 2011

Week Adjourned: 11.26.11

A wrap up of the week’s leading class action lawsuits and settlements – November 26, 2011

Top Class Actions

Do you know who’s got your personal information? An unfair business practices class action lawsuit has been filed in the Southern District Court of Florida against Best Buy Corporation for violating the Drivers’ Privacy Protection Act or “DPPA”, a federal statute that protects the privacy of personal information assembled by State Department of Motor Vehicles (DMVs).

The lawsuit alleges Best Buy has established a business practice of taking, storing, using and/or sharing customers’ personal or highly restricted personal information, without consent, when customers make a normal return of Best Buy merchandise. Their receipt indicates that Best Buy “tracks exchanges and returns … and some of the information from your ID may be stored in a secure, encrypted database of customer activity that Best Buy and its affiliates use to track exchanges and returns.”

The DPPA specifically prohibits Best Buy’s conduct and was instituted to protect consumers from abuses such as identify theft and stalking, which often result when information is unsecured and improperly stored. The class action alleges that Best Buy’s retention of data accessed on a driver’s license is not “use in the normal course of business” as described by the DPPA.

Top Settlements

What’s that old adage—if it sounds too good to be true… Power Balance LLC, the company that made Power Balance bracelets, has reportedly settled a consumer fraud class action lawsuit this week for $57.4 million and filed for federal bankruptcy protection. The details and amount of the Power Balance settlement remain to be confirmed, although it’s all over the Internet.

The company was sued over allegations of misleading advertising, advertising that allegedly claimed the hologram-embedded rubber bracelets enabled the wearers to “achieve their best,” a statement that begs the question—best what? Best outlandish claim? Possibly. Although the company claims there’s science to back up the statement. I have one word—and it’s “placebo.”

About time: Merck Vioxx settlement. There’s not much that’s funny about this. Merck, Sharp & Dohme has agreed to pay $950 million to resolve criminal charges and civil claims related to its promotion and marketing of the painkiller Vioxx (rofecoxib), the Justice Department announced. The FDA approved Vioxx for three indications in May 1999, but did not approve its use against rheumatoid arthritis until April 2002. In the interim, for nearly three years, Merck promoted Vioxx for rheumatoid arthritis, conduct for which it was admonished in an FDA warning letter issued in September 2001.

Merck is also entering into a civil settlement agreement under which it will pay $628,364,000 to resolve additional allegations regarding off-label marketing of Vioxx and false statements about the drug’s cardiovascular safety. Of the total civil settlement, $426,389,000 will be recovered by the United States, and the remaining share of $201,975,000 will be distributed to the participating Medicaid states. The settlement and plea conclude a long-running investigation of Merck’s promotion of Vioxx, which was withdrawn from the marketplace in September 2004.

The parallel civil settlement covers a broader range of allegedly illegal conduct by Merck. The settlement resolves allegations that Merck representatives made inaccurate, unsupported, or misleading statements about Vioxx’s cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government. It also resolves allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug. Finally, like the criminal plea, the civil settlement also recovers damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.

Ok—That’s the week that was. Hope everyone had a wonderful Thanksgiving!

Week Adjourned: 11.19.11

Weekly wrap up of class action lawsuits and settlements for the week ending November 19, 2011

Top Class Actions

Under-performing, under investigation and in trouble–that could be the new tag line for Olympus, who got served with a securities lawsuit this week. And, to make matters worse for the Japanese manufacturer of imaging equipment–they are now under investigation by the SEC and FBI. Nice. That ought to keep them up at night…

The securities class action lawsuit was filed against Olympus Corporation (“Olympus”), on behalf of purchasers of Olympus American Depository Receipts (pinksheets: OCPNY, OCPNF) between November 7, 2006 and November 7, 2011, inclusive (the “Class Period”).

According to the lawsuit, Olympus falsely represented its finances for over five years and hid large losses by characterizing them in its financials as “fees” paid to investment advisers for work on corporate acquisitions.

Olympus’ false statements and material omissions, according to the lawsuit, artificially inflated its stock price and investors suffered heavy losses after Olympus disclosed the truth about its financial statements on November 7, 2011. Investors’ American Depository Receipts dropped dramatically from $13.72 on November 7, 2011, the last day of the Class Period, to $9.05 on November 8, 2011, or 34%. Olympus’ top executives resigned in what has become a financial scandal in Japan.

Recently, on its webpage, Olympus admitted discovering that it had been wrongfully “engaging in activities such as deferring the posting of losses on investment securities.” Olympus offered its “deepest apologies” to shareholders for the “inconvenience” caused by the fall of its share price. Uh–I don’t think an apology is going to cut it in this instance…

Top Settlements

Wal-Mart Netflix Antitrust Lawsuit News…A potential settlement agreement looks possible in an antitrust class action lawsuit brought by current and former Netflix customers against Wal-Mart and Netflix. Emails were recently sent out announcing that Wal-Mart wants to settle. Netflix has decided to continue its fight. Really?

The potential settlement would see Wal-Mart pay $27.25 million in cash and gift cards. The Wal-Mart settlement class includes anyone in the U.S. or Puerto Rico who paid a Netflix subscription fee for DVD rentals from May 19, 2005, through September 2, 2011. More details on the lawsuit are available at OnlineDVDclass.com.

FYI–in case the details of the Wal-Mart – Netflix lawsuit don’t immediately come flooding back to mind…(because it was filed in 2009 maybe) the allegations are basically: “This antitrust class action arises out of a conspiracy among defendants Netflix, Wal-Mart stores, and Walmart.com to divide the markets for the sales and online rentals of DVDs in the United States in order to avoid competition, monopolize, and illegally restrain trade in at least the online DVD rental market.”

Oracle Overtime Lawsuit Preliminary Settlement…Ah–this old chestnut, again. A California unpaid overtime class action lawsuit brought against Oracle reached preliminary settlement through a court in California last week, to the tune of $35 million.

The plaintiff class includes some 1,725 Oracle employees who alleged that they were not paid overtime and meal allowances. The suit was filed by quality software assurance engineers, customer support engineers and project managers who worked for Oracle and Peoplesoft in Redwood City and Pleasanton from 2003 to 2006.

According to California County law, staff working more than eight hours a day or 40 hours in a week are eligible for time-and-a-half. However, Oracle incorrectly classified the three groups of workers as administrative roles, making them exempt from the payments.

Oracle did not change its overtime policy for customer support engineers and project managers until 2007, though quality assurance engineers still do not qualify for overtime and the settlement for them extends to November 2010. A final hearing is set for March and will allow any workers to raise objections or go after individual claims against the software giant.

Ok–That’s enough for this week. See you at the bar. Bottoms Up!

Week Adjourned: 11.11.11

The weekly wrap up of Class Action Lawsuits and Settlements for the week ending November 11, 2011.

Top Class Actions

We’re Mad about Madoff! Still. Again. No kidding. Only this time someone’s naming a bank. Two former Bernard L. Madoff investors have filed a proposed consumer fraud class-action lawsuit against JP Morgan Chase & Co, claiming the banking giant was complicit in aiding Madoff in orchestrating the Ponzi scheme that robbed investors of more than $65 billion.

The lawsuit comes after a similar suit filed by the trustee appointed to represent Madoff’s victims was dismissed. The court ruled that the case filed by Irving Picard lacked standing, holding those claims belonged exclusively by the victims of Madoff’s fraud.

Among the allegations leveled in the lawsuit, investors charge that JP Morgan operated as Bernard L. Madoff Investment Securities LLC’s (BLMIS) primary banker for more than 20 years, and were faced with many indications that the fund was nothing more than a Ponzi scheme.

The lawsuit details that since 1986, all the money BLMIS collected from unwitting investors passed through JP Morgan in an account known as the 703 Account, where BLMIS co-mingled funds from investors.

The lawsuit contends that JP Morgan should have known that BLMIS’s activities were grossly inconsistent with those of an investment firm through a number of signs of impropriety.

JP Morgan, for example, was required to review a filing submitted by BLMIS to the SEC known as the Financial and Operational Combined Uniform Single Reports or FOCUS. That report, the lawsuit states, contained glaring irregularities that JP Morgan should have reported to the SEC, including factual omissions and errors, such as failing to report any commission revenue.

Beginning in 2006 JP Morgan sold structured investment products related to BLMIS feeder funds to its clients, profiting on those transactions as well. In the course of structuring those products, JP Morgan performed due-diligence on BLMIS and became suspicious that the BLMIS was a fraud but did not report its findings, the lawsuit alleges, but did redeem $145 million from BLMIS and $276 million from BLMIS feeder funds in 2008.

The lawsuit has been filed on behalf of Stephen and Leyla Hill, investors who incurred losses in BLMIS. It claims JP Morgan had knowing participation in a breach of trust, aided and abetted fraud, aided and abetted a breach of fiduciary duty, aided and abetted conversion and received unjust enrichment. The suit seeks damages for the plaintiffs.

Top Settlements

Big Banks paying Big Bucks: But are the bucks big enough? A $410 million settlement was approved this week—you may have seen it splashed all over the news—by a federal judge in Miami, ending an overdraft fees class action lawsuit against Bank of America (BoFA) that claimed the bank charged excessive overdraft fees.

Only thing is there are reportedly more than 13 million current and former customers who will be affected by the decision, customers who used debit cards over the past 10 years. Some reports suggest that most of the plaintiffs will likely only receive a fraction of the overdraft fees they paid. Ummm.

The lawsuit alleged that BoFA processed its debit card and check payments in such a way as to incur more customer overdrafts and consequently more fees. BoFA insists that its system was proper, despite the settlement. The settlement includes an estimated $123 million in legal fees for plaintiff’s lawyers…

Another bittersweet asbestos settlement this week. The widow of a man who died from peritoneal mesothelioma cancer has been awarded a settlement—a “substantial” sum—amount not publicly disclosed as compensation for loss of her husband, to put it bluntly. The settlement, negotiated on behalf of Mrs. Veraldo, was obtained midway through trial.

Mrs. Veraldo sued as executrix of the estate of her late husband, Randy Veraldo. He was 52 when he died in 2009, seven months after being diagnosed with peritoneal mesothelioma cancer, court records show.

Mr. Veraldo was a parts handler at a Teterboro, N.J., warehouse from 1978-85. The job required him to unpack clutch plates delivered on a near-daily basis from various suppliers. The clutch plates were said to contain asbestos, a mineral once widely used in the U.S. as a cheap insulating material until it was found to cause mesothelioma cancer.

Ok—That’s enough for this week. See you at the bar. And on this Veterans Day, a toast to all veterans, living and gone, the world over.

Week Adjourned: 11.4.11

Week Adjourned: the weekly wrap of class action lawsuits and settlements, November 4, 2011

Top Class Actions

Could this mean resolution for thalidomide victims?…New research suggests that thalidomide—a drug that caused thousands of horrific cases of deformities in children—caused far more deformities in the U.S. than were reported during the height of the pharmaceutical crisis of the early 1960s.

Invented by German drug company Grunenthal, thalidomide was widely used throughout Europe during the late 1950s and early 1960s, resulting in thousands of deaths and extreme, disfiguring birth defects when used by women during pregnancy. The drug was never approved in the United States, but the new lawsuit filed late October 2011 alleges that as many as 2.5 million doses of the drug were distributed by more than 1,200 doctors to more than 20,000 people, including pregnant women.

Newly discovered and translated documents reveal that Smith, Kline and French (SKF), now owned by GlaxoSmithKline (GSK)conducted a trial of the drug in 1956 and 1957, but buried the evidence, allegedly resulting in a missed opportunity to save thousands of lives.

Instead, according to the filed lawsuit, brought on behalf of 13 men and women with severe birth defects, SKF concealed the results of its trial from the public, allowing another company, Richardson-Merrell, now owned by Sanofi-Aventis to move ahead with large-scale “clinical trials” that involved more than 20,000 people, including pregnant women.

The lawsuit also claims that conclusions made in the early 1960s about the types of birth defects caused by the thalidomide were incorrect.

According to legal counsel, researchers concluded that thalidomide causes bilateral birth defects, such as two missing or shortened arms or hearing loss in both ears. As a result, babies born with unilateral defects, such as one deformed limb, or hearing loss in only one ear were not deemed thalidomide victims, even when their mothers were given the drug while pregnant.

However, new research involving thalidomide as part of a treatment regimen in cancer patients show that many of the assumptions used in the 1960s are incorrect. The thalidomide lawsuit alleges that this new understanding of the drug means that many individuals who experienced unilateral defects may have been misdiagnosed when their doctors told them thalidomide could not have been the cause.

“Among other things we intend to show in court that thalidomide does not work through a neural mechanism as previously thought, but affects the vascular system,” a lawyer for the plaintiffs said.

The complaint claims that the defendants are either guilty of or liable for a civil conspiracy, failing to report and covering up evidence that thalidomide was harmful, especially when taken during the early stages of pregnancy. The lawsuit also says that the defendants were negligent in continuing to manufacture, test and distribute the drug.

Top Settlements

Motrin SJS Verdict. This is one for the books. Let’s hope it makes a difference. On October 3, 2011, a Los Angeles jury returned a record-setting verdict against Johnson & Johnson and their fully owned subsidiary McNeil Consumer Healthcare for $48.2 million—with pre-interest and cost of judgment it’s expected to reach $60 million. The lawsuit alleged that Motrin caused SJS/TENS or Stevens Johnson Syndrome (SJS), also known as Erythema Multiforme, Leyll’s Syndrome, and in its later stages, Toxic Epidermal Necrolysis (TEN). SJS/TEN is a serious and potentially life-threatening disease that causes large areas of the skin to become detached and lesions to develop in the mucous membranes.

The verdict was based on findings of malice towards the consumers of the over-the-counter drug Motrin, specifically for not putting a warning label on the product that could have spared Trejo’s and others’ health. This is believed to be the first verdict of its kind involving punitive damages associated with this over-the-counter temporary pain reliever.

At age 16, Christopher Trejo, who is now 22 years old, took some Motrin as directed on the label for less than one week, but contracted TEN. It caused a severe inside-out exfoliating reaction affecting all of his mucosal membranes, which is equivalent to second- and third-degree burns over 100% of his body. The TEN reaction also caused severe pulmonary damage, near-blindness, infertility, whole-body scarring and a hypoxic brain injury. Trejo’s abilities to see, hear, smell, taste and touch have been severely diminished.

After hearing the evidence, the jury found that the labeling on Motrin was inadequate and should have been changed years earlier to properly educate and alert consumers to the developing signs of severe reactions, which include skin reddening, rash and blisters. Early detection and treatment of these symptoms can prevent TEN or SJS.

Apple Playing the Same Old tune? Apple, Inc., has agreed to settle a consumer fraud class action lawsuit that could amount to over $50 million dollars in payouts—but before you get all excited know this “Apple has agreed to provide an iTunes® Store credit in the amount of $3.25 to all settlement class members who qualify and submit a valid claim form. ” That’s the skinny.

The lawsuit claimed that Apple advertised and sold gift cards which stated that if one purchased and used the gift card, all songs purchased at Apple’s online iTunes® Store would cost 99¢ per song. The lawsuit further claimed that in April, 2009, Apple raised the price of certain songs at the iTunes® store, yet refused to honor the promised 99¢ price when the gift cards were redeemed. In addition, the company continued to sell iTunes® gift cards with the phrase, “Songs are 99¢” printed on them.

Consumers who were overcharged for iTunes songs while using iTunes® 99¢ gift cards are now eligible to receive an iTunes® Store credit in the amount of $3.25 after completing the simple iTunes® class action lawsuit online claim form. Millions of e-mails are currently being sent to persons who may have used affected gift cards to purchase songs from the iTunes® Store.

You can find out how to make an Apple iTunes lawsuit claim here.

Ok—That’s enough for this week. See you at the bar—don’t forget your iPod.