December, 2016 | Class Action News Blog

Week Adjourned: 12.23.16 – McDonalds, DuPont Dumping, IKEA

Top Class Action Lawsuits

What are They up to Under Those Golden Arches? A Chicago McDonald’s franchisee is facing a consumer fraud class action lawsuit filed by a customer who alleges the restaurant is charging 41 cents more for the two cheeseburger “Extra Value Meal” than what it would cost if customers ordered all the items in the meal separately.

McDonald’s Extra Value Meal consists of two burgers, fries and a drink, and cost the plaintiff, James Gertie, $5.90 per meal, in Des Plaines and Niles, Illinois. These two McDonald’s restaurants are part of a chain of more than 10 such restaurants owned and operated by the Karis Group, according to the complaint.

According to Gertie, he purchased a Two Cheeseburger Meal from at least five of Karis’ McDonald’s restaurants in Des Plaines and Niles from Oct. 14 to Nov. 13. Each time Gertie was charged $5.90 for the meal, the complaint states.

Gertie alleges in his McDonald’s lawsuit that posted menu prices indicated the restaurants would have sold Gertie and other customers two cheeseburgers for $2.50, a medium order of French fries for $1.99 and a medium soft drink for $1, for a total of $5.49. That’s a difference of 41 cents less than the posted price for the Extra Value Meal, according to the lawsuit. That 41 cents could really add up…

“Defendant, the operator of several McDonald’s restaurants, advertised for sale a food combination designated as an ‘Extra Value Meal’ but the combination actually costs more than if each item were bought separately, thus making it no ‘value’ at all, let alone an ‘extra value,’” the lawsuit states

They say it’s the pennies that count.

Top Settlements

Some Good News from Some Bad News. A jury in Ohio has awarded $2 million in compensation against DuPont in the first of some 40 environmental toxin cases pending against the chemical company over allegations it dumped toxins into the air and drinking water of the Ohio River, causing illness to people in the surrounding area.

This settlement resolves allegations brought by plaintiff Kenneth Vigneron that DuPont de Nemours & Co, through its actions, caused his testicular cancer. Vigneron’s lawsuit is part of multidistrict litigation involving some 3,500 people who allege that over a period of decades, DuPont released perfluorooctanoic acid, also known as PFOA or C8, into the environment of the Ohio River at the Washington Works site.

According to the plaintiffs, internal studies done by DuPont, which date back for years, strongly indicate that C8 was dangerous. For decades, C8 was used as an essential component in the manufacture of well-known nonstick cookware and coatings. Today, it has been phased out in most US manufacturing.

Six bell weather cases were completed earlier this year, two of which resulted in jury verdicts of $1.6 million and $5.6 million, the latter including punitive damages. DuPont is appealing both verdicts.

While DuPont has been fighting allegations of toxic dumping causing illness, residents of both Ohio and West Virginia claim they have suffered a variety of health problems as a result of their exposure to the chemicals. Further, a Dutch investigation makes similar claims alleging the drinking water near DuPonts’ Dordrecht plant in the Netherlands was contaminated with C8, and that DuPont had been exposing people living near the plant to the toxin for as much as 25 years.

Earlier this year, the judge hearing the cases ordered DuPont to turn over documents related to the Dutch investigation to the American plaintiffs, saying the information about the company’s conduct in a similar situation could be helpful for arguing punitive damages or refuting arguments that the chemical giant has taken a proactive stance on safety concerning C8.

The punitive phase of Vigneron’s trial will be heard in 2017. The case is In re: E.I. du Pont de Nemours and Co. C-8 Personal Injury Litigation, case number 2:13-md-02433, in the U.S. District Court for the Southern District of Ohio.

IKEA Dresser Settlement. Here’s a positive, yet disturbing settlement. Ikea agreed this week, to pay $50 million to the three families of toddlers who were killed when defective Ikea dressers toppled onto the children. This is the positive bit.

The children’s deaths prompted an unprecedented recall of 29 million dressers, at which time Ikea acknowledged the dressers were at serious risk of tipping onto and killing children. And this is the disturbing bit.

The first death from an unstable Ikea dresser occurred in 1989, with a further six deaths to follow. According to the lawsuits, the Ikea dressers were “defective and dangerous” and that the Sweden-based retailing giant continued to sell them despite the risk, while not properly warning consumers.

Reportedly, the IKEA dresser settlement came shortly after Ikea gave the parents’ attorneys internal documents it had long fought to keep confidential. Under the settlement, the contents of those documents will remain private and will be returned to Ikea, with the stipulation that the company not destroy them.

The plaintiffs include Janet McGee, whose 22-month-old son Theodore died last February when a Malm dresser fell on him, and the parents of 2-year olds Curren Collas and Camden Ellis, both of whom died in 2014.

Each of the three families who filed wrongful death lawsuits will receive an equal share of the $50 million with an undisclosed share going to the attorneys.

As well, Ikea has agreed to make $50,000 donations to three children’s hospitals in the name of the boys, one of which will go to the Children’s Hospital of Philadelphia in memory of Curren Collas.

That’s a wrap folks! Happy Holidays to you and yours. See you at the bar.

Week Adjourned: 12.16.16 – Yahoo, DeVry, Gold Trading

Top Class Action Lawsuits

Yoohoo! Yahoo Breach…Again! Just in case you missed this—Yahoo got hit with a data breach class action lawsuit filed by a user who claims the internet company was negligent in protecting its customers data. Earlier this week, Yahoo revealed it had been the target of a data breach which affected 1 billion users. Yup—that’s ONE BILLION users.

Filed by New York resident Amy Vail, the suit alleges negligence, breach of express and implied contract, and violation of California’s unfair competition law.

In a statement issued Wednesday, December 14, 2016, Yahoo stated it believes that in 2013 hackers stole personal information related to 1 billion of its users by hacking their email accounts. This incident is separate from a similar one which Yahoo made public in September. However, the lawsuit contends that Yahoo has said some of the activity from both data breaches may be connected to a single state-sponsored actor.

According to the lawsuit, Yahoo does not know who took the information, and has been unable to identify the intrusion in which it was taken.

“As a result of defendant’s failure to maintain adequate security measures and timely security breach notifications, Yahoo users’ personal and private information has been repeatedly compromised and remains vulnerable. Further, Yahoo users have suffered an ascertainable loss in that they have had to undertake additional security measures, at their own expense, to minimize the risk of future data breaches,” the lawsuit states.

Yahoo revealed earlier this year that “state-sponsored actors” had hacked similar types of data from 500 million of its users in late 2014.

In a recent press release, Yahoo also noted that an investigation into the 2014 breach revealed the hackers’ ability, in some cases, to fake online “cookies”, enabling them to access users’ accounts without a password.

Vail is represented by Lee Cirsch, Robert Friedl, and Trisha Monesi of Capstone Law APC. The suit is Vail v. Yahoo, case number 3:16-cv-07154, in the U.S. District Court for the Northern District of California.

Top Settlements

Teaching by Example? (Or Not…) A $100 million settlement has been reached between DeVry University and the Federal Trade Commission (FTC) over allegations of for-profit education fraud, specifically, that the for-profit university used false statistics about its graduates’ job placement rates in order to lure students and increase enrollment.

According to the terms of the DeVry Settlement, DeVry will pay $49.4 million, which will be distributed by the FTC, and forgive $30.4 million in student loans and $20.2 million owed by former students. DeVry also said it had agreed to change its practices to “maintain specific substantiation” about graduates’ outcomes.

The FTC filed the lawsuit against DeVry in January, claiming the for-profit school deliberately misled customers through advertising claims it made in print, radio, online and TV that 90 percent of its graduates landed jobs within six months of initiating a job search.

Additionally, the suit claimed DeVry misled students when it claimed that its bachelor’s degree graduates had 15 percent higher incomes a year after their studies ended than graduates of all other colleges and universities, the FTC stated.

The terms of the settlement now “prohibits DeVry from including jobs students obtained more than six months before graduating whenever DeVry advertises its graduates’ successes in finding jobs near graduation.”

Further, the settlement stipulates that DeVry must notify students who are receiving debt relief, as well as credit bureaus and collections agencies. DeVry has also agreed to release transcripts and diplomas that they had been withholding from students who had outstanding debt.

The case is Federal Trade Commission v. DeVry Education Group Inc. et al., case number 2:16-cv-00579, in the U.S. District Court for the Central District of California.

All is Not Gold…? And the final biggie to report this week: a $60 million settlement has been granted preliminary approval, potentially ending an antitrust class action lawsuit against Deutsche Bank AG which claims the bank engaged in illegal price-fixing of the gold market.

The lawsuit was brought by investors and traders in March 2014, alleging UBS Deutsche, HSBC, Societe Generale SA, The Bank of Nova Scotia and Barclays conspired to manipulate the London gold fix, which is used as a benchmark to determine the price of gold and gold derivatives.

Under the terms of the preliminary agreement, the class would include anyone who sold physical gold or derivatives based on gold or bought gold put options on COMEX or other exchanges from January 1, 2004, through June 30, 2013.

The MDL is In Re: Commodity Exchange Inc., Gold Futures and Options Trading Litigation, case number 1:14-md-02548, in the U.S. District Court for the Southern District of New York.

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

Week Adjourned: 12.9.16 – Staples, Walmart, FloodSafe

Top Class Action Lawsuits

It’s Easy!! Let’s Hope So. Staples will be wanting that “it’s easy!” button as it responds to the consumer fraud class action lawsuit it’s facing this week over allegations it cheats consumers on its reward program. Naughty, naughty…

Filed by Staples customer Neil Torczyner, the lawsuit asserts the company spreads discounts for coupons across a customer’s total collected points in a purchase rather than applying them against the item the coupon was used for, allegedly shorting the total number of rewards points the customer racks up.

The Staples lawsuit states that the points are valuable to consumers because they can be credited against purchases at Staples stores and online. Therefore, the points should be added up in the way the company advertises.

“By employing this deceptive method of calculating rewards points, Staples shorted its members’ account credit which could have been used towards the purchase of most merchandise in Staples’ stores, online at staples.com, or by phone,” the lawsuit states.

Here’s the skinny: Torczyner claims he noticed the problem when he used a coupon for a package of bottled water. The coupon took $1.50 off the cost of the water itself, making it a non-qualifying purchase for rewards points purposes, according to the suit. He claims that when he looked at his rewards points it seemed that Staples had spread out the value of the coupon over the whole transaction, limiting the number of points he could collect for items that were qualifying and that weren’t impacted by the coupon. He should have received $7.98 in points, but received $7.02 instead, according to the complaint.

Torczyner is looking to represent a class of customers who were allegedly cheated out of rewards points when they used coupons. The case is Neil Torczyner v. Staples Inc., case number 3:16-cv-02965, in the U.S. District Court for the Southern District of California.

Top Settlements

Rainbow Effect at Walmart? Here’s a happy ending…a $7.5 million settlement has been reached in a discrimination class action against Walmart. The lawsuit was brought by several thousand workers who claimed they were denied healthcare coverage for their same sex spouses.

Initially brought on behalf of gay workers at Walmart, the lawsuit was filed in July 2015, a month after the U.S. Supreme Court ruled that there is a constitutional right to same-sex marriage under the 14th Amendment. Former Walmart employee Jacqueline Cote brought the lawsuit, claiming she was denied spousal health insurance for her wife, Dee Smithson. The couple had married in 2004. In 2012, Smithson was diagnosed with ovarian cancer. The couple subsequently incurred $150,000 in debt from uninsured medical expenses.

The Walmart settlement effectively ends the class action that alleged, specifically, the big box retailer had violated Title VII of the Civil Rights Act, the Equal Pay Act and state employment law by not offering health insurance benefits to same-sex spouses before January 1, 2014.

Under the terms of the agreement, the $7.5 million will be divided among the few thousand employees who were unable to obtain coverage for their spouses from January 1, 2011, through December 31, 2013.

According to the settlement motion, nearly 1,000 class members have already been identified, and there could be hundreds more. Approximately 1,200 workers had enrolled their same-sex spouses in health insurance and around 1,100 of them would be covered by the class period.

The claim terms are such that class members can file a long-form claim to be reimbursed for out-of-pocket health care expenses of more than $60,000, at a rate of 2.5 times the qualifying costs, or at a rate at 100 percent of the cost for amounts of less than $60,000. Class members can also file a short-form claim without documentation for a pro rata payment of up to $5,000 per year or $15,000 for the three-year class period. For her role as class representative, Cote will receive a $25,000 service payment.

The case is Cote v. Wal-Mart Stores Inc., case number 1:15-cv-12945, in the U.S. District Court for the District of Massachusetts.

FloodSafe Auto-Shutoff Settlement…to the tune of $14 million. This settlement received final approval this week, ending two defective products class action lawsuits brought against Watts Regulator Co., and its insurer.

The two lawsuits represent two classes of homeowners who claimed that Watt’s defective water shut off devices and water heater supply lines caused massive plumbing damage to people’s homes.

The two lawsuits were filed separately, by Curtis Klug and Durwin Sharp who both claimed a defective line of water supply and heater connectors caused extensive property damage. Specifically, Klug’s complaint stated that Watts’ FloodSafe Auto-Shutoff Connectors, which are used to supply water to faucets, toilets, washing machines, dishwashers, icemakers and other common household appliances, have defective shut-off devices, allegedly let water leak, resulting in property damage. Similarly, Sharp’s suit claimed Watts manufactured and marketed certain water heater supply lines that malfunctioned, when the inner-tubing in certain water heater connectors failed, causing leaks and eventually major property damage.

According to the settlement terms Watts will pay $14 million into a common settlement fund, $10 million for Sharp’s action and $4 million for Klug’s settlement class. Sharp and Klug will each receive $5,000 as class representatives.

The settlement class in Klug’s case includes everyone in the United States who owns, leases or resides in a built structure with a FloodSafe connector since November 2008.

Sharp’s settlement class covers all people, also after 2008, who own, lease or live in a house or building containing a water heater connector.

The cases are Klug v. Watts Regulator Company, case number 8:15-cv-00061 and Sharp v. Watts Regulator Company, case number 8:16CV200 in United States District Court for the District of Nebraska.

So that’s it for this week. See you at the Bar!!

Week Adjourned: 12.2.16 – Oil Workers, DePuy Hip Implant, AMEX

Top Class Action Lawsuits

Overworked Oilers? Another week, another several employment lawsuits. This one, an unpaid overtime class action lawsuit, has been filed against oilfield services company Schlumberger Tech Corp, by workers who allege the company is in violation of the Fair Labor Standards Act (FLSA).

According to the lawsuit, the defendant schedules workers for long shifts but pays them salaries plus a day rate, instead of overtime rates as required by both state and federal labor law. The laborers are not exempt from overtime as they perform manual duties that fit within a checklist set by their superiors, the lawsuit states.

“All these workers are regularly scheduled to work 84 hours per workweek, but often worked more,” attorneys for the plaintiff Andrew Fritchman state. “Instead of paying them overtime, SLB paid its [measurement while drilling] employees a base salary plus a day rate.”

According to the complaint, Fritchman worked as a “measurement while drilling” employee, a largely manual job that didn’t leave room to deviate from the company’s outlined plan for how each day was to be conducted. Measurement while drilling workers are tasked with recording data gathered during drilling operations. A college education is not required to do this work, the plaintiff asserts.

Fritchman is claiming that he and other workers performing the same job worked grueling schedules, working and living in the field sometimes for weeks. Typically, a schedule would require one worker on the “day” shift and the other on the “night” shift. Those shifts were 12 hours, and the employees worked seven days a week. Ah, yeah, that doesn’t sound good…

The plaintiffs assert that instead of paying its workers overtime as required by FLSA, the Ohio Prompt Pay Act, the Ohio Minimum Fair Wage Standards Act, and the Pennsylvania Minimum Wage Act, the company paid them a salary plus a day rate.

The lawsuit is seeking back pay, liquidated damages, attorneys’ fees and costs under FLSA for the company’s misclassifying its workers as exempt from overtime rules.

The case is Fritchman v. Schlumberger Tech Corp., case number 2:16-cv-01752, in the U.S. District Court for the Western District of Pennsylvania.

Top Settlements

$1B Hip Award. I’m willing to bet Johnson and Johnson is not celebrating this weekend. A jury in Dallas this week awarded $1 billion to six plaintiffs who are suing Johnson & Johnson (J&J) alleging the DePuy Pinnacle hip implant made by the company’s subsidiary, DePuy Orthopaedics Inc., was defective and has caused them adverse health effects and subsequent surgeries to remove the device.

The DePuy Pinnacle metal-on-metal hip implant has an unreasonably high failure rate. The lawsuits filed against DePuy, claim the metal-on-metal design allows metal debris to come loose from the device, ultimately being absorbed by the patient’s surrounding tissue.

Although J&J won the first case in 2014, in March of this year another federal jury in Dallas awarded $502 million to five plaintiffs whose suits were combined. The DePuy Pinnacle hip award was later reduced to $150 million under Texas law. However, because this latest set of lawsuits was tried under California law, the award won’t be subject to a punitive damages cap.

J&J is currently facing 8,500 similar lawsuits brought together in an MDL in federal court in Dallas. All the plaintiffs allege the company failed to adequately warn of the side effects associated with the hip implant.

According to media reports, evidence presented in court showed J&J paid kickbacks to surgeons to promote the device, even though the company was aware that the implant was associated with greater risks than other similar devices.

DePuy stopped selling the metal-on-metal Pinnacle devices in 2013 after the U.S. Food and Drug Administration strengthened its artificial hip regulations.

It would be interesting to know how many hours J&J spends in court each year, defending itself against defective products litigation…

AMEX Calling? A $9.25 million settlement has received final approval this week, ending a class action lawsuit against American Express. The lawsuit claimed the company made numerous unsolicited telemarketing calls, in violation of the Telephone Consumer protection Act (TCPA). You think?

According to the terms of the AMEX settlement, the funds will be distributed between two plaintiff classes, specifically, those who received debt collection calls on AmEx accounts and those who received telemarketing calls on behalf of the credit card company.

$1 million will be distributed among the debt collection class, defined as those who received calls from third-party vendor West Asset Management Inc. between 2009 and 2013 hoping to collect on AmEx debt. Attorneys for the plaintiffs state that as only 135 members of that class filed claims, each plaintiff will receive over $4,400 from the fund. That’s a nice little pay day.

The class of plaintiffs who received telemarketing calls from vendor Alorica Inc. between 2009 and 2016 will share up to $8.25 million after attorneys’ fees have been paid. There are a reported 55,000 members of that class who filed claims, so the payment per class member will be $88.

The case is Ossola et al. v. American Express Co. et al., case number 1:13-cv-04836, in the U.S. District Court for the Northern District of Illinois.

Well, that’s a wrap for this week. See you at the bar.