May, 2014 | Class Action News Blog

Week Adjourned: 5.30.14 – Listerine, Daiichi Sankyo, Pradaxa

The week’s top class action lawsuits and settlements including Listerine, Daiichi Sankyo and Pradaxa.

Top Class Action Lawsuits

Listerine Total Care Missing Something? Johnson & Johnson (J&J) and subsidiaries may have to rebuild their advertising campaign if the allegations in this latest consumer fraud class action lawsuit prove true. The lawsuit claims J&J et al falsely label Listerine Total Care products as being capable of restoring tooth enamel despite the “overwhelming consensus” of experts that tooth enamel loss is permanent.

Specifically, the Listerine lawsuit, entitled Suzanna Bowling v. Johnson & Johnson et al., case number 1:14-cv-03727, in the U.S. District Court for the Southern District of New York, claims that J&J, McNeil-PPC Inc., and Johnson & Johnson Healthcare Products label various Listerine products as capable of enamel restoration. Bowling, who filed the lawsuit, states that the misleading claims are “highly material” to consumers and served to differentiate Listerine’s Total Care line from other mouthwash products. Oh yes.

The lawsuit further claims that the Listerine Total Care labeling enabled the defendants to charge a 35.8 percent price premium for Total Care products. “In fact, Listerine Total Care is essentially identical to Listerine Fluoride Defense Anti-cavity Mouthwash,” the complaint, states. “Both products have the same active ingredient, in the same amount, the same indicated uses, the same warnings, the same directions, and the same inactive ingredients. There are only three differences between Listerine Total Care and Listerine Fluoride Defense: the packaging, the color, and the price.” Terrific.

Bowling seeks an order certifying the nationwide class and the New York subclass, an order finding in favor of the plaintiff and an order of restitution, as well as compensatory, statutory and punitive damages, prejudgment interest and injunctive relief.

Pharmasexist? Well…it’s been a while since we’ve heard about this one—a nationwide sex discrimination class action lawsuit against of Daiichi Sankyo Inc. It was certified this week. The collective action is brought by about 1,500 female employees of the pharmaceutical company, who claim they were paid less than their male counterparts for the same work.

The sex discrimination lawsuit was brought in February 2013, by current and former sales workers and are seeking more than $100 million in damages. Named plaintiff Sara Wellens and several other current or former Daiichi sales employees sought collective action certification in March under the Equal Pay Act.

FYI—the case is Sara Wellens et al. v. Daiichi Sankyo Inc., case number 4:13-cv-00581, in the U.S. District Court for the Northern District of California.

Top Settlements

Pradaxa Settlement…Boehringer Ingelheim International GmbH looks set to pony up $650 million, after news a settlement deal has been struck—potentially ending claims in multidistrict litigation that its blood thinner Praxada (dabigatran) caused serious injuries including severe bleeding.

If approved, the Pradaxa settlement will resolve both state and federal personal injury lawsuits. Boehringer said in its statement that it expects the settlement will resolve roughly 4,000 claims over the drug, and noted that the US Food and Drug Administration has reaffirmed the drug’s positive benefit-risk profile.

During the past several years the number of Pradaxa lawsuits has increased, with users alleging they experienced bleeding events and other injuries associated with Pradaxa use. Lawsuits began to be filed in March 2012, according to court records, following the publication of a study in the Archives of Internal Medicine which linked Pradaxa with an increased risk of heart attack compared with other anticoagulants.

Boehringer received FDA approval in October 2010 for Pradaxa, to reduce clotting risks in patients with atrial fibrillation, an irregular heartbeat that causes problems with blood flow, that is not caused by a heart valve problem.

The case is In re: Pradaxa (Dabigatran Etexilate) Products Liability Litigation, case number 3:12-md-02385, in the U.S. District Court for the Southern District of Illinois.

Ok – Folks – we’re done here – have a great weekend and we’ll see you at the bar!

Week Adjourned: 5.24.14 – Google, US Foodservice, Citigroup

The week’s top class action lawsuits and settlements for the week ending May 24, 2014. Top stories include Google, US Foodservice and Citigroup.

Top Class Action Lawsuits

Heads Up Google AdWords Users…Google’s been hit with a national unfair business practices class action lawsuit alleging the god of all things Internet unlawfully denies payments to thousands of website owners and operators who place ads on their sites sold through Google AdWords.

The Google AdWords lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that Google abruptly cancels website owners’ AdSense accounts often without explanation shortly before payments are due, and refuses to pay for the ads that ran prior to the cancelation.

According to the lawsuit, Google’s popular AdSense program translates annually to billions of dollars payable to website operators that host its ads via AdSense. Google’s AdSense advertising program induces website operators to host space for ads on their websites. Each time a visitor to the website interacts with the ad, the ad publisher who hosts the ad earns payment.

The complaint claims that the contracts and terms of service Google requires web publishers to sign are unconscionably one-sided, giving Google free reign to embark on what the lawsuit claims are actions devoid of good faith or fair dealing.

The complaint states, “Given Google’s contractual terms purportedly permitting it to withhold payment to publishers with disabled accounts, and in light of the experience of the plaintiff in seeing this policy actually effected, the total of earned funds that Google has refused to pay its AdSense publishers could be enormous.”

The lawsuit claims Google is in violation of contracts with users and in violation of the implied covenant of good faith and fair dealing, unjust enrichment, and violation of the California Unfair Competition Law.

The named plaintiff, Free Range Content, Inc., is a California corporation that owns and operates Repost.us. Free Range Content first noticed a spike in AdSense earnings in Feb. 2014. At the end of Feb. 2014, Google issued a report stating that the plaintiff’s estimated earnings for the covered period were over $40,000–a number that seemed far too high. Then on March 4, 2014, two days before a scheduled March 6, 2014 call with an AdSense representative was slated to occur, the plaintiff received word from the AdSense program that Google had disabled its account.

The lawsuit seeks damages for all U.S. Google AdSense publishers whose AdSense account was disabled or terminated, and whose last AdSense program payment was withheld permanently by Google.

Top Settlements

Major RICO settlement this week…thought to be among the largest civil Racketeer Influenced and Corrupt Organization Law (RICO) class action settlements in recent history: We’re talking $297 million—a preliminary agreement between plaintiffs in a multidistrict unfair business practices class action against U.S. Foodservice, Inc. and its former parent company, Koninklijke Ahold, N.V. The settlement agreement is pending approval by the United States District Court for the District of Connecticut.

This US Foodservice agreement was reached on behalf of a class of customers, primarily hospitals and restaurants, who purchased products from U.S. Foodservice under cost-plus arrangements between 1998 and 2005.

The class claimed that it was defrauded by U.S. Foodservice when it created six companies that it controlled to inflate the “cost component” of the products that were subject to the arrangement.

Citigroup Employee Shareholder Settlement…Bank employees got screwed too—and this week they got some justice, with the agreement of a $8.5 million settlement ending a securities class action lawsuit pending against Citigroup. The lawsuit, brought by Citigroup employee shareholders, alleged the company concealed its exposure to subprime mortgages prior to its stock price dropping.

The settlement class includes over 7,000 Citigroup employees who acquired securities between November 2006 and June 2009. Yikes! The damage seems endless. Probably is.

Under the terms of the agreement a $2.3 million settlement fund will be established, to include six payments of approximately $50,000 each to the six lead plaintiffs, as an incentive award for their service to the case. The Erisa lawsuit was brought in 2009 by former Citigroup employees who alleged the company prevented employees who had purchased the bank’s stock from obtaining information about subprime losses by means of a series of materially misleading statements and omissions concerning its subprime exposure, overall business outlook and financial results.

The lawsuit was originally filed in California, but was later consolidated into a multidistrict securities litigation against Citigroup through New York.

Ok—Folks—we’re done here—have a great weekend and we’ll see you at the bar!

Week Adjourned: 5.16.14 – Goodman AC, GM, Kashi Cereal

The week’s top class action lawsuits and settlements. Top stories include Goodman air conditioning, GM Financial and Kashi Cereal.

Top Class Action Lawsuits

Is your air conditioning unit blowing a little defective hot air? Well, according to a class action lawsuit filed against Goodman Global, Inc., and certain affiliated companies, their central air conditioning units and heat pumps sold under the Goodman® and Amana® brands since 2007 are—defective that is. The bit that’s causing the alleged problems is the evaporator coil(s).

For those of us not intimately acquainted with the working innards of an air conditioning unit (most of us, I’m guessing) evaporator coils are generally located inside a consumer’s home and are essential to the proper functioning of any central air conditioning system or heat pump.

So–according to the lawsuit, Goodman and Amana central air conditioning and heat pump systems contain defective evaporator coils that improperly and prematurely leak refrigerant (a.k.a. Freon®). Oh that’s good. Not. The defect allegedly renders the systems inoperable because the cooling cycle will not work without refrigerant.

Although Goodman sells these units with a warranty, that warranty is limited in a way that provides insignificant protection to owners of the units. In particular, the Goodman warranty, by its terms, covers replacement parts, but not the labor costs associated with the replacement. According to the lawsuit, the result is that, when a defective evaporator coil fails, Goodman provides the owner with a replacement coil, but does not pay to have the old coil removed or the replacement coil installed. As alleged in the lawsuit, those labor costs typically run in the hundreds of dollars, and in some cases, thousands of dollars. Thus, in at least some instances, the owner is forced to spend as much or more to replace the defective evaporator coil as the cost to purchase a new Goodman unit.

The complaint also alleges that Goodman has known that its units sold since 2007 contained defective evaporator coils, but the company failed to inform consumers about the problem or issue a recall. Indeed, according to the lawsuit, Goodman continued to tout the quality of its air conditioning systems, claiming they were durable, dependable, and long lasting, even though it was aware that the defective evaporator coils would cause the units to fail prematurely and at rates far above the industry average.

The lead plaintiff in the case acquired his Goodman unit when he purchased his new house in September 2011. According to the lawsuit, in or about July 2013, after only one summer of use, the unit stopped cooling the plaintiff’s home. A service technician allegedly found that the unit was low on refrigerant and added four pounds of refrigerant, which immediately leaked out of the system. After observing this, the technician determined that the evaporator coil was leaking and needed to be replaced. According to the complaint, the service technician returned the old defective evaporator and replaced it with a new one, charging plaintiff approximately $650 for this service.

The civil action was filed on behalf of all consumers in North Carolina that purchased a central air conditioning unit or heat pump bearing the trade names Goodman® and Amana® from 2007 to the present.

GM—AGAIN! GM just cannot seem to get it right these days. No, this time it’s not the auto recalls…this week their loan re-financing subsidiary got hit with a class action lawsuit alleging violations of the Telephone Consumer Protection Act (TCPA).

Brought by Monique Perez of California, the GM lawsuit claims that beginning in late 2013, General Motors Financial Co. Inc. made “virtually daily incessant calls” to Perez’s cellphone regarding a debt allegedly owed by another person named “Melanie.”

Perez claims that by calling from an automatic telephone dialing system (ATDS), which can store or produce telephone numbers to be called using a random or sequential number generator, GM Financial violated the TCPA. Don’t you love technology?

According to the lawsuit, “Plaintiff has never provided any personal information, including her cellular telephone number, to defendant for any purpose. As such, neither defendant nor its agents were provided with prior express consent to place calls via its ATDS to plaintiff’s cellular telephone.”

The plaintiff alleges members of the class not only suffered privacy violations but also suffered cellular telephone charges or saw a reduction in cellular telephone time that had already been paid for.

Perez is seeking to represent a putative class, made up of all US residents who received any telephone call from the company to a cellphone through the use of an ATDS within the past four years. She is seeking $500 per negligent violation and $1,500 per knowing or willful violation of the TCPA for each class member.

Top Settlements

So it was all corn after all… Kellogg’s, the maker of Kashi products, has agreed to a $5 million settlement, potentially ending a consumer fraud class action lawsuit that claimed Kashi’s labeling was misleading and fraudulent. Wait—don’t tell me—this stuff is so natural it makes Mother Nature look fraudulent—right?

Right. The Kashi lawsuit alleged that labeling on certain products used labels stating “All Natural” or “Nothing Artificial,” when in fact the products contain a variety of synthetic and artificial ingredients, such as pyridoxine hydrochloride, calcium pantothenate, hexane-processed soy ingredients, ascorbic acid, glycerin and sodium phosphate.

Under the terms of the settlement, Kellogg’s has also agreed to stop using the labels “All Natural” and “Nothing Artificial”. In a statement, Kellogg Co. said it stood by its advertising and labeling practices but that it would change its formulas or labels on Kashi products, nationally by the end of the year.

The settlement was filed May 2 in U.S. District Court in California and is subject to court approval.

Ok Folks—we’re done here—have a great weekend and we’ll see you at the bar!

Week Adjourned: 5.9.14 – CVS, Google, FiveFingers, Medtronic

The week’s top class action lawsuits and settlements. Top stories include CVS, Google, FiveFingersand Medtronic

Top Class Action Lawsuits

Caremark to get healthy over vitamin E advertising claims? That’s right folks, the pharmacy chain is facing a consumer fraud class action lawsuit filed by a customer who alleges the labeling on the pharmacy chain’s vitamin E pills state that they have heart health benefits.

Filed by plaintiff Ronda Kauffman, on behalf a proposed nationwide class of consumers who purchased vitamin E pills from the major pharmacy chain, and subclasses for customers in Rhode Island and New York, the CVS/Caremark complaint alleges that the CVS labels are misleading to customers, making them think the vitamins could reduce the risk of heart disease.

“The overwhelming majority of scientific studies find no ‘heart health’ benefit to taking vitamin E supplements,” the lawsuit states. Hey – what about the placebo effect?

7,600 CVS pharmacies nationwide carried the vitamins, which retail for approximately $8 to $20 per bottle, the lawsuit states. Kaufman alleges she bought vitamin E tablets from a CVS store in New York after reading the label and lost money on the purchase, which she wouldn’t have made if not for the heart health claims.

The CVS lawsuit mentions several studies that allegedly show vitamin E provides no heart health benefits. Further, it cites data from the US Centers for Disease Control and Prevention which show heart disease to be the leading cause of death in the US.

“Defendants have preyed upon these legitimate health concerns by misrepresenting to consumers that its vitamin E products have a ‘heart health’ benefit when they do not,” the complaint states.

The lawsuit claims CVS has violated deceptive business practice laws in New York and Rhode Island.

So, it’s back to eating your veggies.

Do no evil? Isn’t that it? Well, Google Inc. is facing a proposed antitrust class action lawsuit alleging the company is trying to monopolize the search engine feature on Android smartphones and tablets in violation of state and federal antitrust laws.

The Google lawsuit, Feitelson et al v. Google Inc., case number 5:14-cv-02007, in the U.S. District Court for the Northern District of California, claims that Google engages is anticompetitive behavior by allowing Android device manufacturers to preload its popular applications, such as Youtube and Google Maps, only if the companies agree to make Google’s search application the default search engine on their devices. Is that evil—or convenient?

The lawsuit states: “By way of Google’s coercive and exclusionary practice with Android OS device manufacturers … Google restrains and quashes competition for default search engine status before it even can begin. Google’s practice is a pure power play designed to maintain and extend its monopoly in handheld general search.”

Further, the plaintiffs claim that Google’s alleged conduct results in consumers overpaying for certain Android phones and tablets, as the price for the devices may have been lowered if rivals had been given a chance to compete for default search engine status, potentially by paying manufacturers.

“Such payments … would lower the bottom-line cost associated with production of the covered devices, which in turn would lead to lower consumer prices for smartphones and tablets,” the lawsuit states.

The class action seeks to represent all U.S. purchasers of Android phones and tablets made by manufacturers who have entered into an alleged agreements with Google requiring its search engine to be the default search tool on their devices. The suit seeks an injunction on these alleged practices, as well as monetary damages.

Could this end up like Microsoft?

Top Settlements

Can you sue for ugliness, too? Vibram’s set to fork over for false health claims about FiveFingers..Turns out reinventing the wheel may be costly afterall. Vibram, the maker of a glovelike running shoe that purported to have health benefits such as reducing foot injuries and strengthening foot muscles—has agreed to settle a consumer fraud class action lawsuit.

The FiveFingers lawsuit alleges the company’s health claims regarding its FiveFingers running shoes were false and misleading. Specifically, the lawsuit alleged that the claims were“deceptive” and stated “that FiveFingers may increase injury risk as compared to running in conventional running shoes, and even when compared to running barefoot.” The complaint also stated that the company misrepresented research on barefoot running, claiming “there are no well-designed scientific studies that support FiveFingers’ claims.”

Under the terms of the proposed settlement agreement, Vibram would pay $94 per pair of shoes bought. More than two dozen models of Vibram shoes will qualify for refund.

Further, Vibram has agreed to discontinue some aspects of its advertising and marketing campaigns and, in the absence of verifiable scientific evidence, will make no other statements about the health benefits of FiveFingers.

Medtronic, the maker of a spinal bone graft product called Infuse Bone Graft, has said it will pay $22 million to settle about 1,000 lawsuits stemming from claims of adverse health outcomes related to the product and claims that the manufacturer illegally promoted the Medtronic bone product for off-label uses. Medtronic is also reportedly preparing a further $140 million to settle an even larger number of anticipated claims.

Medtronic allegedly encouraged physicians to use its Infuse bone stimulator off-label in the cervical spine, which helped generate sales of more than $3 billion for the manufacturer. As of September of 2008, about 680,000 units of Infuse Bone Grafts had been used in the US, according to Medtronic. According to a report by the Senate committee investigating the product, the company’s undisclosed manipulation of information through the medical literature included overstating its benefits and downplaying concerns about serious complications. According to MedPage Today, during the past 15 years, Medtronic has paid $210 million in royalties and other payments to a group of 13 doctors and two corporations linked to doctors. Many of the lawsuits claim that it was by paying spinal surgeons the company was able to promote the off-label use of Infuse.

According to a press release Medtronic issued Tuesday, the $22 million will resolve the claims of some 950 people. A further 750 cases brought by 1,200 people are pending across the use, and there could be another 2,600 claims yet to be brought.

Ok—Folks—we’re done here—have a great weekend and we’ll see you at the bar!

Week Adjourned: 5.2.14 – Baby Powder, Aveda, Apple, Google, Intel, Adobe

The week’s top class action lawsuits and settlements. Top stories include Baby Powder cancer risk, Aveda interns, and the tech worker salary collusion settlement

Top Class Action Lawsuits

Talc Troubles? It’s one thing to file a consumer fraud class action lawsuit alleging mislabelling infractions regarding “all natural” and “ no preservatives”—for example, but a consumer fraud class action filed this week against Johnson & Johnson alleging its classic baby powder products are associated with a significant increase in the risk of ovarian cancer, well that’s just a whole different level of muckery. Why do I continue to be surprised by these things…

According to the baby powder lawsuit, filed by plaintiff Mona Estrada (Mona Estrada v. Johnson & Johnson et al., case number 2:14-cv-01051, in the U.S. District Court for the Eastern District of California) studies have shown a 33% increased risk for ovarian cancer associated with talcum powder among women who use it on their genitals. Yet the only warnings on the product labels tell users to keep the powder away from their eyes, avoid inhalation and to use externally. Estrada, who has used the product since 1950, claims she expected Johnson’s Baby Powder, made of scented talc, to be safe. Further, the lawsuit claims J&J has failed to disclose the information regarding ovarian cancer risk on its product labels.
“As a result of the defendants’ misrepresentations and omissions, plaintiff and the proposed class have purchased a product which is potentially lethal,” the complaint states. Estrada alleges she would not have purchased the powder had she been aware of the risk. You think? Thankfully, Estrada is not claiming any personal injury.

Estrada further alleges she has bought J&J’s powder since 1950 and believed all this time that the product was safe to use on any external part of her body, and that J&J encouraged women to use the product daily.

“Although the label has changed over time, the message is the same: that the product is safe for use on women as well as babies,” the lawsuit states. The lawsuit also states that J&J has known of studies showing that women who used talcum powder on their genital area had a higher risk of ovarian cancer, since at least 1982. Further, the author of a 1982 study was contacted by a J&J doctor who was told the company it should add a warning label to the bottle.

The talc lawsuit goes on to state that the American Cancer Society (ACS) allegedly said that a 2008 study, linking higher usage of talcum powder to increased risk of cancer, showed the powder “probably” increased the risk for cancer. The ACS compared talcum powder to asbestos, postmenopausal hormone therapy and radiation. Oh great.

The lawsuit claims J&J violated the California Consumer Legal Remedies Act and Unfair Competition Law, negligently misrepresented its powder and breached its implied warranty. This is going to be interesting.

Beauty Blunder? Aveda Corp, and its parent company, Estee Lauder Inc, and are facing an employment lawsuit filed by a former beauty school student who alleges the beauty companies treat their trainees as unpaid employees in violation of state and federal labor law. There must be some law of physics that works something like—the larger the company the less they pay—or try to pay…

Filed by lead plaintiff Jazlyn Jennings, the lawsuit claims that Aveda uses students at its California cosmetology schools as unpaid workers, requiring them to provide full hair and beauty services to paying clients, while at the same time claiming to provide educational experience to those trainees. Yes—it’s an educational experience alright—just not the kind the students signed up for.

The nitty gritty—“The California defendants led plaintiff and others…to believe that they were paying tuition to learn the skills necessary to succeed in the glamorous profession of beauty and cosmetology. Instead, they converted students into student employees to profit from their free labor.”

According to Jennings, she trained at the Aveda Institute Los Angeles from April 2011 to June 2012, where she provided haircuts, makeup removal, manicures and other services to customers without being compensated for her labor.

Jennings alleges that the institute’s staff did not properly supervise students who shelled out “thousands or tens of thousands” to participate in its yearlong training program, providing just four supervisors for the 40 students working on the salon floor, in violation of state regulations.

In addition to the Aveda institute in Los Angeles, Jennings also names its San Francisco-based school, the Cinta Aveda Institute Inc., and its Southeast institute operator, Beauty Basics Inc., as co-defendants in the employment lawsuit. “[Defendants] could have hired employees who they would have had to have paid at least minimum wage but instead chose to displace such employees with the free labor they demanded of their student employees,” the lawsuit states.

Additionally, according to the allegations, students were compelled to sell Aveda products to the public, effectively transforming students into “non-commissioned salespeople.” And the litany of bad deeds goes on to include handing over of tips and insufficient or completely absent supervision—if that’s not a contradiction in terms… but you get the picture.

So—bottom line—by failing to pay its “student employees,” the complaint claims that Aveda violated the minimum wage requirements of both California labor law and the federal Fair Labor Standards Act (FLSA). Additionally, Jennings claims Aveda failed to pay overtime, did not provide proper meal and rest breaks, did not provide accurate wage statements and engaged in unfair business practices.

Heads up—Jennings is seeking to represent a class of individuals who provided beauty services or sold products to paying customers in the named Aveda institutes from April 22, 2010, to the present. The class may also include student employees who cleaned or provided support services to Aveda’s beauty institutes in California.

Top Settlements

This settlement almost slipped under the radar this week—surprising given that the named defendants are Apple Inc, Google Inc, Intel Inc and Adobe Systems Inc. The tech worker settlement is, not surprisingly, pre-trial in the amount of $324 million—and it’s meant to end an antitrust class action lawsuit brought by by Silicon Valley tech engineers.

The lawsuit was filed in 2011, alleging that the four tech giants conspired to hold down salaries in Silicon Valley. You may remember some finger pointing at Steve Jobs over this one. In any event, the class action, filed in 2011 by Silicon Valley engineers, alleged that Apple Inc, Google Inc, Intel Inc and Adobe Systems conspired to refrain from soliciting one another’s employees in order to avert a salary war.

The trial, which will not be going ahead, surprise,surprise—was scheduled to begin at the end of May on behalf of roughly 64,000 workers who were seeking $3 billion in damages. Whoa Nelly—now that would have had an impact.
Ok—Folks—we’re done here—have a great weekend and we’ll see you at the bar!