July, 2015 | Class Action News Blog

Week Adjourned: 7.31.15 – CVS, Hip Implants, Fiat Chrysler

Top Class Action Lawsuits

How much did you Pay for Generic Drugs at CVS? There’s a potentially $65 million dollar question, which pharmacy customers of CVS Health Corporation (CVS) are looking to get answered. They filed a class action lawsuit in the United States District Court for the Northern District of California alleging that CVS employed a fraudulent scheme to overcharge millions of customers across the country for generic prescription drugs.

CVS is alleged to have implemented and maintained a false and deceptive pricing scheme affecting more than 400 generic drugs, forcing customers with health insurance to pay CVS copayments far higher than the usual and customary price CVS charged its cash-paying customers.

CVS generates approximately $67 billion in annual revenues from its retail pharmacy business, and plaintiffs allege that CVS’ wrongful overcharging is a significant percentage of those revenues.

According to the complaint, for seven years CVS has systematically been overcharging their insured consumers for prescriptions. The alleged scheme is especially harmful to those people with low or fixed incomes who use medications on a regular basis. Plaintiffs assert that the drug chain wrongfully has charged insured consumers inflated copayments on more than 400 generic medications, including some of the most commonly used drugs on the market today. According to the complaint, millions of people have been affected by this misconduct.

The plaintiffs seek to represent all consumers who were participants in third-party healthcare plans and who filled their prescriptions for certain generic drugs at CVS between November 2008 and the present, and paid more than prices available under the CVS Health Savings Pass program.

Top Settlements

Hip Implant Defect Award for Plaintiff. A first this week—with a jury in Los Angeles awarding $9.1 million to man who received a Durum Cup hip implant made by Zimmer. The defective products lawsuit alleged that Zimmer was aware of the design defect in its hip implant and was therefore negligent in designing it. The Durum cup implant allegedly causes bone and tissue damage that may lead to pain and replacement surgeries. This is the first such lawsuit to go against Zimmer, reportedly.

The Zimmer Durom Cup was implanted in some 13,000 patients before it was removed from the US market in 2008. Fifty-nine year old Gary Kline, from California, received the defective product in 2007 only to have it removed 15 months later. According to his lawsuit, he endured two “traumatic surgeries” in 15 months that caused scar tissue and muscle damage.

Finding in the plaintiff’s favor, the jury hearing Kline’s case found Zimmer negligent in the design of the Durom Cup and that the company failed to warn about the product’s defect.

The verdict includes about $153,000 in medical bills and $9 million in past and future non-economic damages such as pain and suffering and emotional distress. Although Los Angeles County Superior Court Judge Amy Hogue had denied a request for punitive damages, Kline’s lawyer said the jury awarded $3 million more than his client had asked.

Big Automotive News this Week… Fiat Chrysler is looking at ponying up a record $105 million in fines to the US government for violating laws in a series of vehicle safety recalls. Additionally, Fiat Chrysler will have to buy back 500,000 Ram pickup trucks and other vehicles in order to take them off the roads, the National Highway Traffic Safety Administration said.

The fines were prompted by Fiat Chrysler’s failure to act quickly enough on safety recalls. The fines are the biggest of their kind in US history.

According to media reports, owners of 1.54 million recalled older model jeeps with receive payments from the automaker. The jeeps have gas tanks behind the rear axle and are vulnerable and leak gasoline if damaged during a collision. Customers can bring them to dealers to install trailer hitches to help protect the tanks. FC is not buying back the Jeeps because it maintains those vehicles are as safe as comparable vehicles built at the time.

The NHSTA’s actions come less than a month after it held a public hearing into problems with 23 Fiat Chrysler recalls which affect over 11 million cars and trucks. At the hearing, NHTSA cited a long list of serious shortfalls, specifically, failure to notify customers of recalls; delays in making and distributing repair parts; and, in some cases, failing to come up with repairs that fix the problems. Some of the recalls date to 2013.

Ok – That’s a wrap folks…See you at the Bar folks!

Week Adjourned: 7.24.15 – Priceline, JP Morgan Chase, Foot Locker

Top Class Action Lawsuits

Priceline’s “Name Your Own Price” …may be rebranded as “Name Your Own Settlement” if this goes to court. The internet-based hotel booking company is facing a proposed consumer fraud class action lawsuit alleging it conceals known, mandatory resort fees from “Name Your Own Price” bidders, misleading thousands of customers about the actual price of their bookings. Something to do with hidden resort fees—ringing any bells folks?

Filed in in Connecticut federal court by lead plaintiff Adam Singer, the Priceline lawsuit contends that travelers who use Priceline’s “Name Your Own Price” feature to bid on hotel rooms, end up paying undisclosed fees to Hilton and other hotels on top of what they offered.

“This conduct renders the ‘Name Your Own Price’ option illegal and deceptive,” the complaint states. “Due to defendant’s conduct, a consumer is not ‘naming his own price’ for a hotel stay at all.”

In the complaint, Singer states he used the “Name Your Own Price” option to find a hotel in Puerto Rico within his budget. Priceline matched him with a Hilton property and presented with a contract, which quoted his offer price plus $60.68 in taxes and fees, which he accepted.

However, the Priceline lawsuit contends that when Singer went to check out of the property, the hotel had added $66 in mandatory resort fees in addition to the price he had agreed to pay through Priceline, prior to his stay. The lawsuit alleges that Singer was not informed in advance of those fees as Priceline didn’t adequately inform him that any resort fees would be included in the total price for his accommodation.

“Priceline could easily have programmed its Name Your Own Price bidding system to account for resort fees which it knew full well would be charged and thus match consumers only with hotels truly willing to accept their bid amounts,” the lawsuit states. “Instead, it affirmatively chose to delete resort fees from ‘total’ ‘taxes and service fees,’ in order to make it appear to consumers that they were getting a better deal than they truly were.”

The lawsuit further claims that Hilton benefits from Priceline’s deception because it charge guests, after the fact, more than they would knowingly consent to pay.

“By the plain terms of the Priceline.com booking contract, Hilton had no right to charge mandatory resort fees on that booking,” the complaint states. “By recovering an additional, baseless fee in the form of the resort fee, defendants are able to reduce its advertised room rates by the amount of the resort fee without any negative impact when price-conscious consumers compare rates across hotels.”

Singer is seeking to represent a class of Priceline “Name Your Own Price” customers allegedly misled by the booking site’s silence on resort fees and a subclass of consumers who booked Hilton stays that cost more than expected for that reason.

The case is Singer v. The Priceline Group Inc. et al., case number 3:15-cv-1090, in the U.S. District Court for the District of Connecticut.

Top Settlements

They’re Baaaack...Here’s one for the record books, apparently, and likely in more ways than one.

A $388 million settlement has been agreed between JPMorgan Chase and a group of investors who alleged the bank misled them regarding the level of risk associated with certain investments. Specifically, the securities lawsuit refers to $10 billion worth of residential mortgage-backed securities (MBS) sold by JP Morgan Chase before the financial crisis of 2008. Remember those?

The lawsuit was brought on behalf of investors and two pension funds, namely Laborers Pension Trust Fund for Northern California and Construction Laborers Pension Trust for Southern California. In the lawsuit, they alleged the values of their investments were severely impacted by the losses incurred on the mortgage bonds during the financial crisis. (Whose investments weren’t impacted by MBS fraud?)

According to a statement issued by JP Morgan Chase, this settlement represents, on a percentage basis, “the largest recovery ever achieved in an MBS purchaser class action.” And that’s something they’re proud of?

Foot Locker Gets Clocked. Here’s a long-deserved bit of good news for Foot Locker employees. Final approval of a $7.1 million settlement has been granted, ending a long-running wage and hour class action against Foot Locker Inc. The lawsuit, brought by Foot Locker workers, alleged the retail shoe chain violated the Fair Labor Standards Act (FLSA).

Specifically, the plaintiffs alleged that Foot Locker workers were not compensated for maintenance work and time spent working before opening and after closing. Further, the lawsuit claimed that company employees were forced to do work off-the-clock or have their paid time cut in order to complete their tasks.

According to the allegations, Foot Locker directly tied the compensation of its store managers to its labor budget set by the corporate office, in order to enforce the compensation policy. If the managers exceeded the budget, they were punished, according to the original complaint filed in 2007 by named plaintiff Francisco Pereira.

The nationwide FLSA class includes all current and former Foot Locker employees who worked at least one hour from March 2007 to March 2010 in the US as a retail employee but not as an assistant store manager or higher. A separate Illinois class includes any retail employee excluding assistant store managers and above who worked in the state from October 2005 to May 2011.

The case is In Re: Foot Locker Inc. Fair Labor Standards Act (FLSA) and Wage and Hour Litigation, case number 2:11-md-02235, in the U.S. District Court for the Eastern District of Pennsylvania.

Ok – That’s a wrap folks…See you at the Bar!

Week Adjourned: 7.17.15 – Walmart, Gerber, Hotel Wrongful Death

Top Class Action Lawsuits

Save Money. Live Better…? Words to live by…except for…Walmart got hit with a discrimination class action lawsuit this week, filed by an employee alleging the company denies its staff benefits for same-sex spouses. Filed by Jacqueline Cote, the lawsuit claims that Walmart repeatedly denied medical insurance for her wife before 2014, when the retail giant started offering benefits for same-sex spouses.

The back story…Cote and Simpson met in 1992, while they were both working at Walmart in Augusta, Maine. They subsequently moved to Massachusetts and remained employees of Walmart. They were married in May 2004, days prior to the legalization of same-sex marriage in that state.

In 2007, Smithson quit her job at Walmart to take care of Cote’s elderly mother. As a result Cote attempted to have Smithson added to her employee health plan the following year.

In 2012, Cote’s wife was diagnosed with ovarian cancer, which resulted in the couple incurring $150,000 in medical bills.

According to the proposed Walmart class action, Cote tried to enroll her spouse online, but the system wouldn’t let her proceed when she indicated her spouse was a woman. When she sought an official explanation, she was told that same-sex spouses were not covered. Cote continued to try and have Smithson enrolled in her Walmart employee health plan every year thereafter including the year Smithson was diagnosed with cancer.

The lawsuit seeks damages for the couple and any other Walmart employees who weren’t offered insurance for their same-sex spouses. A federal commission concluded that Walmart’s denial amounted to discrimination and said in May that Cote could sue.

Although no other Walmart employees are named in the suit, it seeks damages for those who come forward. Further, the suit seeks damages for Cote and her wife, Diana Smithson, and it asks Walmart to acknowledge a legal responsibility to continue offering benefits for same-sex spouses.

What’s Gerber been Puffing On? Gerber, famous maker of healthy baby foods and an instantly recognizable household brand, got slapped with a consumer fraud class action lawsuit alleging the company is misleading parents into buying a product that is far from nutritious. The product? Graduates Puffs food for toddlers. Puffs? Really?

According to the Gerber Graduates lawsuit, the packaging for Puffs is dominated by pictures of fruit or vegetables: juicy peaches, slices of ripe banana, nutritious sweet potatoes. But the ingredients list belies these pictures. Banana-flavored Puffs contain no bananas, only a trace amount of banana flavoring. Sweet potato-flavored Puffs don’t contain actual sweet potatoes, or any other vegetable, only miniscule amounts of sweet potato “flavor.” The closest thing to a fruit or vegetable in Puffs is a very tiny amount of dried apple puree, powder, in other words.

The suit alleges that parents trying to buy healthy and nutritious snacks for their toddlers have trusted Gerber’s reputation and package presentations, paid Gerber’s premium prices based on that reputation, and, in exchange, unwittingly provided their toddlers with empty calories. Far from the healthy treat the labels and Gerber’s reputation suggest, Puffs are little more than flour and sugar. Doesn’t sound like brain food to me…

The lawsuit was filed in the Superior Court of California, San Francisco County, and is titled Gyorke-Takatri, et al., v. Nestle USA, Inc. and Gerber Products Company.

Top Settlements

Huge Settlement for a Huge Loss…and a cautionary tale in more ways than one…a Florida jury awarded a $24,057,83.00 verdict in a wrongful death lawsuit involving The Riverside Hotel in Fort Lauderdale. In 2012, a newlywed couple were visiting the hotel on their honeymoon. They were killed by a speeding car. The lawsuit alleged that the Riverside Hotel had actual or constructive knowledge that motor vehicles regularly and routinely exceeded the posted speed limit in proximity to the hotel property.

Michael and Alanna DeMella, who were seven months pregnant, checked into the hotel and went to the pool. According to media reports they had stepped into the cabana restroom moments before the incident. Mrs. DeMella was killed on hotel property while in an on-site pool cabana, by Rosa Kim, who drove into a structure on hotel property utilized by hotel guests in the pool area as she used excessive speed on the adjacent road.

In hearing the evidence, the civil jury entered a verdict that found the Riverside was 15% responsible for the tragedy and that they should pay that portion of the verdict.

That’s a wrap folks…See you at the Bar!

Week Adjourned: 7.10.15 – Ford, Capital One, Transvaginal Mesh

Top Class Action Lawsuits

Ford is not in the driver’s seat on this one…They got hit with a defective design class action this week, alleging certain Ford Explorer, Ford Edge and Lincoln MKX models allow carbon monoxide to enter the passenger compartment. Yeah, not so good guys. The suit covers 2011-2015 Ford Explorers as well as Edge and MKX models from 2011-2013 with 3.5L and 3.7L TIVCT engines.

The proposed Ford class action was filed on behalf of New Jersey owners or lessors of the vehicles in question. The complaint also proposes a subclass of consumers with claims under New Jersey’s Lemon Law for claimants who reported the defect to Ford in the first two years or 24 months of ownership.

According to the legal documents, Ford has known of the defect since 2012 but has not warned owners to get it fixed. Surprised? Apparently Ford has issued two technical safety bulletins to dealers about the problem but to date, has not notified owners, despite the related safety hazard. Ford has attempted to fix the problem on customers’ vehicles with a variety of remedies but none have proved effective, according to the complaint.

“Given that the defect renders driving the subject vehicles a health hazard that is potentially deadly, the vehicles are valueless,” the lawsuit states.

The lawsuit alleges breach of implied and express warranty, violation of the New Jersey Consumer Fraud Act, of the Magnuson-Moss Warranty Act, and of the New Jersey Motor Vehicle Warrant Act, also known as the Lemon Law. Love that Lemon Law!!!

Capital One should change its tag line…from “What’s in your Wallet” to “If at first you don’t succeed.” These guys are frankly, incorrigible—nay—unrepentant. They are facing yet another robocalls class action lawsuit—this one against Capital One Financial Group. Filed by plaintiff Nakia Pitr, this latest lawsuit alleges Capital One is in violation of the Telephone Consumer Protection Act by calling consumers through robodialing without their consent. Yeah, know this one off by heart.

Pitre claims in the Capital One lawsuit that within the space of two months, she received 37 calls on her cellphone from the bank, despite not being a customer. Capital One ignored her requests to stop calling, she claims.

According to the lawsuit, the calls were from the company’s credit card division. During each of the calls she received and answered, she told the bank they had the wrong number and asked them to stop calling. However, she continued to receive calls. According to the suit, the frequency and nature of the calls indicates they were made from an automatic telephone dialing system.

Pitre further alleges she has never been a Capital One customer, has never given the bank her number or given her consent for them to call her.

If approved, the class would include anyone contacted by Capital One using a robodialing system from July 1, 2014, through July 2, 2015, without prior consent and who received calls after asking not to be contacted.

FYI—the case is Pitre v. Capital One Financial Corporation, case number 1:15-cv-00869, in the U.S. District Court for the Eastern District of Virginia.

Top Settlements

Not a class action settlement—but a significant settlement none the less. Sadly, at great personal expense. Boston Scientific has been ordered to pay a $100 million settlement by a jury hearing the case of a women who suffered injury from the company’s Pinnacle and Advantage Fit vaginal mesh. Fifty-one year old Deborah Barba was awarded $25 million in compensatory damages with an additional $75 million in punitive damages.

In her personal injury lawsuit, Barba alleged she received a Boston Scientific’s Pinnacle mesh product in 2009 for pelvic organ prolapse (POP) and stress urinary incontinence (SUI). However, following the implant she began experiencing serious medical complications and despite two subsequent surgeries to rectify the problems, parts of the vaginal mesh implant remain in her body and continue to cause her pain.

The trial took just two weeks, after which the jury reached a decision within seven hours. They found Boston Scientific was negligent in designing and making the devices and that it had failed to warn patients and doctors about potential risks.

To date, this verdict is the largest regarding litigation over transvaginal mesh devices against Boston Scientific or any other mesh manufacturer. The company announced last month it had reached agreements to pay about $119 million to resolve 2,970 cases about transvaginal mesh. There are more than 25,000 defective product lawsuits pending against Boston Scientific concerning injuries resulting resulting from the Pinnacle mesh implant.

Reuters reports that this latest verdict is the sixth so far against the company by women who say that the devices are poorly designed and use subpar materials, resulting in painful physical injuries such as bleeding, infection and pain during sex.

That’s a wrap folks…See you at the Bar!

Week Adjourned: 7.4.15 – Kenneth Cole, Pure Leaf Iced Tea, Toyota

Top Class Action Lawsuits

Kenneth Cole bagging profits at customers’ expense? At least those are the allegations in a consumer fraud class action lawsuit filed against Kenneth Cole Productions Inc.

Specifically, the Kenneth Cole Outlet lawsuit alleges that the retailer misleads customers into believing they are purchasing items at a savings at its exclusive outlet stores by listing artificially high “suggested retail prices” on its product tags next to the term “our price” which is significantly lower. The lawsuit claims that because these products were never for sale in any other store, Kenneth Cole is in violation of California and federal laws.

“The plaintiff, in short, believed the truth of the price tags attached to the products she purchased at a Kenneth Cole outlet, which expressly told her that she was getting a terrific bargain on her purchase,” the complaint said. “In fact, she was not getting a bargain at all.” Filed by lead plaintiff Peggy Cabrera, the lawsuit asserts that Cabrera was induced to purchase a sweater and shirt top from a Kenneth Cole Outlet store in California after noticing significant differences in price between the “MSRP” and “our price” label, particularly after observing that not all product price tags made this distinction.

“In reality, Kenneth Cole never intended, nor did it ever, sell the item at the represented ‘MSRP,’” the complaint states. “Thus, plaintiff was deceived by the false price comparison into making a full retail purchase with no discount.”

In the lawsuit, Cabrera contends that Kenneth Cole is taking advantage of the term “outlet store” because the idea of shopping there conveys to reasonable consumers that at least some products comprise merchandise formerly offered for sale at full-price retail locations, which is not the case at exclusive Kenneth Cole outlets.

Further, the complaint states that the Federal Trade Commission explicitly describes the fictitious pricing scheme employed by Kenneth Cole as deceptive, making it a violation of the FTC Act, as well as the California Business and Professions Code.

Pure Leaf Iced Tea = Pure B.S.? While we’re on the subject of consumer fraud…Unilever United States Inc. and PepsiCo. Inc. are facing a putative class action alleging false advertising regarding their jointly produced Pure Leaf iced tea products. Specifically, the lawsuit claims the teas are falsely branded as “All Natural” and free from preservatives when in fact they contain a non-naturally produced citric acid as a preservative.

Named plaintiff Momo Ren alleges that the defendants engaged in an aggressive marketing campaign that claimed the teas are “nothing but all natural, freshly brewed tea from tea leaves,” which was designed to attract consumers seeking those types of products.

According to the Pure Leaf lawsuit, citric acid is no longer made from fruit but rather manufactured through citric acid bacteria fermentation. It is classified by the USDA as a “synthetic allowed” substance. Therefore, PepsiCo. and Unilever, through a partnership with Unilever-owned Lipton Tea conspired to produce Pure Leaf, the advertising for which is in violation of federal and state consumer protection laws against misbranding.

“By marketing the products as being ‘All Natural’ and free of preservatives, defendants wrongfully capitalized on and reaped enormous profits from consumers’ strong preference for food products made entirely of natural ingredients and free of preservatives,” the suit states.

The plaintiff has filed claims of deceptive trade practices, negligent misrepresentation, breach of express warranty and unjust enrichment and seeks unspecified compensatory and punitive damages.

Top Settlements

Toyota Power Steering… Don’t have a dollar figure for this one BUT 800,000 Toyota customers are going to sleep easier as a result of a settlement reached with the car maker in a pending defective automotive class action lawsuit. The suit, filed in California federal court, claims that the power steering systems of some Corollas caused the vehicles to drift out control.

According to court documents, lead plaintiffs Irene Corson and Susan M Yacks, and Toyota, sought preliminary approval of the deal in March, the terms of which state that Toyota denies any defect with the electronic power steering system in the 2009 and 2010 model year Corollas at issue.

Under the terms of the settlement, class members who have complained about the on-center steering feel of their vehicle will have their retuned electronic control units installed at no cost. For those who haven’t previously complained, the retuned electronic control unit will be available at a 50 percent discount. Class members who paid out-of-pocket to have the returned electronic control unit installed may be reimbursed up to $695, according to the settlement memorandum.

Court documents show that The National Highway Traffic and Safety Administration opened an investigation in February 2010 of the electric power steering system in the Corolla and Matrix models. The investigation revealed related consumer complaints dealing with operational issues, not failure of steering elements. The investigation was closed by May 2011.

Under the terms of the deal, class counsel can ask for attorneys’ fees and expenses, and class representative incentive awards up to $750,000. The case is Irene Corson et al. v. Toyota Motor Sales USA Inc. et al., case number 2:12-cv-08499, in the U.S. District Court for the Central District of California.

Ok—that’s it for this week folks—see you at the bar! And Happy 4^th of July!