January, 2013 | Class Action News Blog

Week Adjourned: 1.25.13 – Lance Armstrong, Subway, Southwest Airlines

Top class action lawsuits and settlements of the week, for the week ending January 25, 2013.

Top Class Action Lawsuits

File Under “Fiction”. You would pretty much have to be living on the dark side of the moon not to have heard of the consumer fraud class action lawsuit filed against the publishers of Lance Armstrong’s book “It’s Not About the Bike.” Indeed it’s not.

Filed following the interview/confession with Oprah Winfrey earlier this week, the lawsuit alleges the publishers sold Lance Armstrong’s latest book as fact, when it was fiction. Quelle Surprise!

And, the lawsuit, filed this week in federal court in California, also mentions Armstrong’s other book, “Every Second Counts,” and accuses the cyclist and his publishers of fraud and false advertising.

The lawsuit, filed by Rob Stutzman in federal court in California, also mentions Armstrong’s other book “Every Second Counts, and alleges Armstrong and his publishers are guilty of consumer fraud. Specifically, the lawsuit states “At that time, Stutzman thanked Defandant Armstrong for writing his book and told him it was very inspiring and that he recommended it to friends who were fighting cancer.” Stutzman contends that had he and others similarly situated known Armstrong’s accounts were lies, they would not have purchased the book, or have enjoyed it less.

“Throughout the book, Defendant Armstrong repeatedly denies that he ever used banned substances before or during his professional cycling career,” the lawsuit states. The lawsuit also states that the plaintiffs purchased the book “based upon the false belief that they were true and honest works of nonfiction when, in fact, Defendants knew or should have known that these books were works of fiction.” Well, everyone likes a good story, and this is certainly no exception.

Is Subway selling a Whopper? …instead of a Footlong? We’ll have to wait and see… A consumer fraud class action lawsuit was filed this week against the sandwich chain Subway, alleging it advertises the $5 Footlong sandwiches when they are not a foot long.

The Subway Footlong lawsuit, Pendrak & Farley v. Subway Sandwich Shops Inc., et al., Superior Court for the State of New Jersey, claims the famous sandwiches actually measure between 11-11.5 inches, instead of 12 inches as advertised. (no comment).

The lawsuit further claims that Subway is aware its Footlong sub sandwich is not 12 inches, because sandwich prices are set at the corporate level then sent down the line to the individual franchises. Consequently, Subway is purposefully defrauding its customers by selling so-called “$5 Footlongs,” according to the lawsuit.

Top Settlements

This round’s on Southwest! Yes, indeed—Southwest Airlines reached a tentative settlement of a pending class action lawsuit over drink vouchers. Included in this Settlement are Southwest customers who received a drink coupon with the purchase of a Business Select ticket prior to August 1, 2010, and did not redeem the drink coupon.

Filed in 2011, Southwest Airlines class action lawsuit plaintiffs, Adam Levitt (an attorney himself) and Herbert Malone, alleged the airline’s policy changes around its drink vouchers, which became effective after August 1, 2010, amounted to a breach of contract and made the coupons worthless. The policy change stipulated that while the drink vouchers had no expiration date, they could only be used on the dates voucher holders were traveling. The vouchers were issued to passengers for alcoholic drinks.

Southwest Airlines drinks vouchers changes were brought in because, the airline claimed, passengers were photocopying them to get free drinks.

The settlement includes Business Select passengers who were issued vouchers before August 1, 2010. Based on Southwest’s charges of $5 per alcoholic drink, the settlement may cost the airline as much as $29 million, with some 5.8 million vouchers up for redemption. The final fairness hearing is set for May, 2013.

The proposed settlement includes damages for Class Members who received Southwest drink coupons through the purchase of a Business Select ticket prior to August 1, 2010, but did not redeem those drink coupons for a free drink. Eligible class members must file a claim before September 2, 2013.

So—see you at the bar—and don’t forget your voucher!

Week Adjourned: 1.18.13 – Clinique, Dell, Morgan Stanley, Goldman Sachs

The week’s top class action news–lawsuits and settlements that made the buzz this week. Top stories include Estee Lauder’s Clinique line, Dell computers, Morgan Stanley and Goldman Sachs.

Top Class Action Lawsuits

Speaking of wrinkles—it appears that Estée Lauder has hit one. The maker of Clinique cosmetic and skin care products is the latest to face a consumer fraud class action lawsuit over allegations of false and deceptive marketing practices.

In the Clinique false advertising lawsuit, entitled Margaret Ohayon et al. v. Estee Lauder Inc. et al., Case No. 2:33-av-00001, U.S. District Court for the District of New Jersey, plaintiff Margaret Ohayon alleges Estee Lauder uses deceptive advertising tactics to promote its Clinique Repairwear, Youth Surge and Turnaround collection as having the ability to make wrinkles “disappear,” rebuild firming collagen, and produce other anti-aging benefits.

The lawsuit alleges that if, in fact, the Clinique products could “rebuild stores of natural collagen” or “deliver 63% of the visible wrinkle-reducing power of a laser procedure,” the products would be regulated by the Food and Drug Administration. Not to mention your girlfriends would be all over it—like you could keep the effects a secret—I don’t think so.

The Clinique consumer fraud class action lawsuit is brought on behalf of a proposed class of all consumers who have purchased at least one Clinique product from the Repairwear, Youth Surge or Turnaround collection in the US.

The lawsuit seeks compensatory, treble and punitive damages; restitution; injunctive relief and more for alleged breach of express warranty, unjust enrichment, and violations of the New Jersey Consumer Fraud Act and consumer fraud laws of various states.

Top Settlements

Heads up: Taxing Situation at Dell… An unfair business practices class action lawsuit filed in California against Dell Computer Corp, has reached a tentative settlement totaling $275 million in potential refunds.

The class action lawsuit revolves around the payment of California sales tax on Dell service contracts…read on…

The lawsuit, entitled Mohan, et al. v. Dell, Inc. et al. alleged the Defendants (Dell Inc. f/k/a/ Dell Computer Corp.; Dell Marketing LP (“DMLP”), on its own behalf and as successor by merger to Dell Catalog Sales LP (“DCSLP”); BancTec, Inc.; and Worldwide Tech Services, LLC f/k/a/ QualxServ LLC) improperly charged California use tax on purchases of certain Optional Service Contracts and remitted these taxes to the California State Board of Equalization (“SBE”).

The parties have reached two distinct settlement agreements to resolve the legal action: the Dell Settlement and the SBE Settlement. Under the terms of the respective settlements, which cover purchases made between April 8, 1999 and June 30, 2008, funding for the settlements will be provided by Dell and the California State Board of Equalization. The settlements followed a 2006 trial court’s decision, later affirmed on appeal by the California Court of Appeals in 2008, ruling that optional service contracts sold by Dell were not subject to California sales or use tax, as they did not constitute tangible personal property and were readily separable from the computer hardware with which they were sold.

Further, the terms of the two settlements stipulate that customers of Dell who purchased and paid tax on service contracts covering computer hardware during the class action period will be entitled to a full refund of all such taxes that they paid.

The settlement consists of more than $275 million in refunds. Notices will be mailed to customers informing them of the amounts of refunds available to them and instructions for the timely filing of claims. The Court will review the settlement agreements at the Final Hearing to be held in April, 2013.

Class members who are eligible to receive a refund under one or both of these settlement agreements must file a claim or claims to receive any refund(s). Each settlement agreement has different criteria for eligibility. For more information on eligibility and how to file a claim for the separate settlements, visit sctaxsett.com.

Welcome Home[Owner] News. This one’s a whopper…and some welcome news for home owners who suffered dodgy loan servicing and/or foreclosure at the hands of Morgan Stanley or Goldman Sachs. This week the Federal Reserve announced it has reached a settlement with the two financial institutions over alleged loan servicing and foreclosure abuses.

Under the terms of the settlement, reported by CNNMoney.com, Morgan Stanley will provide $97 million in direct cash payments to borrowers and $130 million worth of other relief, including loan modifications and the forgiveness of deficiency judgments. Goldman will pay $135 million to borrowers with a further $195 million provided as relief.

Here’s the skinny. The settlement provides for over 220,000 homeowners who held mortgages with the two banks’ former subsidiaries: Goldman’s Litton Loan Servicing and Morgan’s Saxon Mortgage Services, and subsequently faced foreclosure in 2009 and 2010. According to CNNMoney.com “over four million borrowers will split a total of $3.5 billion in cash compensation, with payments ranging from a few hundred dollars to potentially as much as $125,000 in a small percentage of cases. Those eligible are expected to be contacted by the end of March, regulators said.”

This settlement follows the $8.5 billion agreement announced last week by the Federal Reserve and the Office of the Comptroller of the Currency with 10 other banks over foreclosure issues.

Goldman Sachs was ordered to review its subsidiary’s foreclosure practices in September 2011, as was Morgan Stanley in April 2012. Those reviews were not initiated and will now be scrapped as a result of this settlement deal.

Well this news is worth a minor celebration—on top of the fact that it’s Friday. So—see you at the bar!

Week Adjourned: 1.11.13 – Kia, AT&T Mobility, Chase Bank

This week, our wrap of top class action lawsuits and settlements is a consumer fraud hat trick! Read on for what’s been hot this week in class action news: Kia Sorento, AT&T Mobility, Chase Bank Overdraft Fees. All for the week ending January 11, 2013.

FYI…we’re going for a Consumer Fraud hat trick this week…

Top Class Action Lawsuits

Kia Sorento #EpicFail? Heads up anyone out there who owns a Kia Sorento 2002-2009 model…Kia Motors is facing a consumer fraud class action lawsuit over allegations that these Sorento models are prone to catastrophic engine failure. That sounds rather alarming.

The Kia Sorento lawsuit, entitled Robinson et al v. Kia Motors America Inc. et al., Case No. 13-cv-00006 U.S. district Court for the District of New Jersey, claims that Kia Motors knowingly concealed a manufacturing defect in the crank sprocket of its 2002-2009 Sorento models. This alleged engine defect can lead to a catastrophic chain of events beginning with severe heat buildup, the release of debris, and subsequent loss of steering control, engine failure and the potential for a hazardous accident, the plaintiffs allege. (And you thought sprockets were just something George Jetson worried about…)

“Not only did Kia actively conceal the material fact that this particular component is defectively designed (and requires costly repairs to fix), but it also did not reveal that the existence of this defect would diminish the intrinsic resale value of the vehicle,” the Kia lawsuit states.

Other allegations include Kia having knowledge of the engine defect for several years, as evidenced by numerous online complaints. However, it allegedly chose to withhold this information from consumers while making numerous statements about the quality and reliability of the Sorento. As a result of Kia’s “scheme of false and misleading advertising and marketing” thousands of people have purchased a Sorento, without knowledge of the defect, in preference to another vehicle without the alleged defect. Getting the picture?

The lawsuit also alleges that Kia Sorento owners who sought repairs for their vehicles while under warranty received only temporary repair of damaged parts, which may have included using similarly defective parts. Not good.

Additionally, the plaintiffs claim that Kia profits from the alleged Sorento engine defect by performing unnecessary parts replacements, computer reprogramming and software updates, despite knowing the true cause of the problem.

This lawsuit seeks to represent a nationwide class of consumers that purchased or leased the first generation Sorento. Ok.

Top Settlements

AT&T Mobility Customers May Get Relief From 7-Year Itch. A settlement has been reached in the consumer fraud class action lawsuit pending against AT&T Mobility LLC. The lawsuit claims that AT&T improperly charged fees to certain wireless customers—over a seven-year class period. That’s alotta fees—and sadly, seems to be a trend these days.

So—if you were assessed Universal Service Charges or similar charges under state or other laws (collectively “USC”) on data pay-per-use plans, visual voicemail services, customer custom packaging plans, international calls outside the United States or voicemail services only (“Covered Services”) by AT&T Mobility LLC (“AT&T Mobility”) on bills issued from January 1, 2004 up to and including December 31, 2010, you might be eligible to receive benefits from a class action settlement.

We must stress, that the AT&T Mobility settlement has to receive final approval. If approved, it will resolve the lawsuit entitled, MBA Surety Agency, Inc. v. AT&T Mobility LLC, Case No. 1222-CC09746, concerning AT&T Mobility assessment of USC on the Covered Services. AT&T Mobility will contribute $152,634,430.00 (“Settlement Proceeds”) which will be payable in the form of credits and cash payments to the eligible Settlement Class members after deductions for attorneys’ fees etc. The final Fairness Hearing is scheduled for February 20, 2013. Watch this space—we’ll keep you posted.

And for the Hat Trick…after all, three’s a charm! A $110 million settlement that just received final court approval, ending an overdraft fees class action lawsuit against Chase Bank. Yes—this is a form of consumer fraud, because “it ain’t on the level.”

The Chase Bank overdraft fee settlement is the latest to be reached in the massive class action lawsuit involving over 30 banks who are alleged to have manipulated customers’ transactions in such a way as to maximize overdraft fees. What’s on the level about those business practices?

The allegations also state that rather than declining transactions on an account that has insufficient funds to cover a purchase, Chase Bank authorized the transactions and then processed them in highest to lowest dollar order, which effectively increased the number of overdraft fees charged. Oh—don’t get me started!

As part of the settlement agreement, Chase will, for a period of at least two years, cease charging overdraft fees on individual debit card transactions of $5.00 or less. No comment.

Class members include anyone who (A) held a Chase, Bank One, or Bank of New York consumer deposit account accessible with a Chase debit card anytime between January 1, 2003 and March 29, 2010; and (B) were charged one or more overdraft fees as a result of Chase’s practice of posting debit card transactions from highest to lower dollar amount.

That’s it for this week. Off to you know where—see you there!

Week Adjourned: 1.4.13 – Dole Food, Google, Viacom, Chase Bank Fees

The weekly wrap of top class action lawsuits and settlements. Top stories for the week ending January 4, 2013 include Dole Food, Google Privacy, Viacom Privacy, and Chase Bank Overdraft Fees.

Top Class Action Lawsuits

Dole Delivering Nutrition But Not Compensation? New year, old tricks…This time it’s Dole Food Company—they’re facing a wage and hour class action lawsuit over allegations it fails to pay its employees for the time they spend dressing and undressing in sanitary clothing, which they must wear during work. According to the Dole class action lawsuit, “The time that Dole requires its employees to work without compensation on a daily basis is substantial.”

The Dole lawsuit alleges specifically that dressing in protective gear and sanitizing hands and shoe soles are food safety practices that workers are required to use to comply with Dole’s policies. “All of these activities are performed for the benefit of Dole,” the lawsuit states.

Lead plaintiff, Jose Luis Hernandez, who worked in Dole’s Soledad plant, alleges Dole also routinely violated lunch and rest break requirements because employees were required to “don and doff” their gear, and that time shouldn’t be considered part of the employees’ break time. “Dole knew or should have known that its policies and practices were expressly contrary to California law and unfair,” the lawsuit states. Go get’em!

Heads Up! Got Kids On The Internet? Ok. Stupid question. Six internet privacy class action lawsuits have been filed against Google Inc. and Viacom Inc. over allegations the companies illegally track the online activities of children under 13. These actions, according to the Google and Viacom privacy lawsuits, violate both the federal Video Privacy Protection Act (VPPA) and the federal Wiretap Act.

Specifically, the lawsuits claim that Viacom and Google placed cookies on users’ computers enabling the companies to unlawfully track the Internet and video-viewing activities of minors who visited Viacom-owned sites like Nick.com and NickJr.com. The information was used to target advertising, the lawsuits allege.

The cookies allegedly remained on computers even after the children had informed Viacom through the sign-up process that they were under 13.

“The plaintiffs, and others similarly situated, suffered invasions of privacy in direct violation of federal law when Viacom and Google developed, implemented and profited from cookies designed to track the Internet communications and video viewing habits of minor children under the age of 13,” the lawsuits state.

The plaintiffs in all six class action lawsuits are seeking to certify a nationwide class of children under 13 who had cookies placed their computers by Google and Viacom for the purposes of tracking their viewing habits, without the plaintiffs’ knowledge. Plaintiffs are also proposing a subclass of children who engaged with video materials that Viacom knowingly allowed Google to track through a specialized cookie.

Top Settlements

Chase Maxed Out Its Good Credit…or so it seems, and will have to pony up a $110 million—the amount that recently received final court approval—as settlement of a Chase overdraft fees class action lawsuit.

The settlement is the latest settlement to be reached in the massive class action lawsuit involving over 30 banks who are alleged to have manipulated customers transactions in such a way as to maximize overdraft fees.

As part of the settlement agreement, Chase will, for a period of at least two years, cease charging overdraft fees on individual debit card transactions of $5.00 or less.

Ho Ho Ho, It’s to the Bar I go. See you there!