Month: July 2017

Top Class Action Lawsuits

Heads Up Ford Transit Van Owners – a consumer fraud class action lawsuit has been filed against Ford Motor Co, alleging Ford knew of the Transit van flex disc defect long before it issued the recall of some 402,000 Ford Transit vans.

The recall affects 2015, 2016 and 2017 models of Ford Transit vans that have a defect in the flex disc, which is a type of rubber joint connecting the transmission to the driveshaft. The defect can allegedly cause vehicle damage in addition to being a safety hazard, the complaint asserts.

All Care Transport is a family-owned business that provides non-emergency medical transport. It owns several of the Transit vehicles. The plaintiff states in the complaint that two of his Transit vans’ flex discs failed in November 2016. In one case, the driver lost control of the steering and breaks while driving on a freeway. “Had another vehicle been near the van at the time, a crash would have been likely,” the complaint states. The repair cost in excess of $3,200.

According to Ford’s recall announcement, the flex disc cracks after about 30,000 miles, possibly causing the driveshaft to separate from the transmission. The cracking can result in a loss of power while driving or the unintended movement of parked vehicles not anchored by a parking brake. Such separation can also damage surrounding components, including brakes and fuel lines.

The Ford Transit lawsuit claims that Ford’s recall notice doesn’t indicate that the automaker has a permanent fix for the defect, as it recommends vehicle owners repair the disc every 30,000 miles. Further, the notice does not indicate any plans by Ford to reimburse customers such as All Care for lost business opportunities from disc-related repairs.

“In short,“ the complaint states, “as the safety recall notice makes clear, Ford’s recall fails to fix the underlying problem and falls well short of fully compensating plaintiffs and class members for the harm caused by the defective class vehicles.”

The plaintiff and All Care assert that Ford had knowledge of the defect as early as 2014, based on vehicle evaluations and testing, field data, replacement part sales data and consumer complaints made directly to Ford and collected by federal regulators at the National Highway Transportation Safety Administration.

The plaintiffs state in the proposed class action: “Yet despite this knowledge, Ford failed to disclose and actively concealed the defect from class members and the public, and continued to market and advertise the class vehicles as ‘tough,’ ‘safe,’ ‘durable’ vehicles ‘designed to do its job all day, every day and for many years to come,’ which they are not.”

“All Care Transport expected the class vehicles to be of good and merchantable quality and not defective,” the complaint states. “It had no reason to know of, or expect, that the vehicles were equipped with a defective flex disc that would catastrophically and dangerously fail, nor was it aware from any source prior to purchase of the unexpected, extraordinary and costly repairs the defect would cause them to incur.”

The proposed class includes anyone who leased or purchased a 2015-2017 Transit in California for purposes other than personal or household use.

The case is All Care Transport LLC et al. v. Ford Motor Company, case number 5:17-cv-01390, in the U.S. District Court for the Central District of California.

Bad Blue Shield? Once again, Blue Shield of California and its claims administrator Magellan Health Services, are in the news—this time facing a bad faith insurance class action lawsuit alleging it wrongly restricted patients’ access to outpatient and residential mental health treatment.

The complaint was filed in Northern California by two parents who allege their teenage children were denied coverage, repeatedly, under the parents’ employer-based health insurance plans. The children required medical assistance for serious mental and substance abuse problems, according to the lawsuit.

The Blue Shield lawsuit received class-action status in June, enabling patients whose claims were rejected under similar circumstances to join as plaintiffs.

According to the complaint, Blue Shield and Magellan Health Services of California, which handles the insurer’s mental health claims, developed criteria that violate accepted professional standards and the terms of the health plan itself. Further, the plaintiffs claim the defendants are in violation of the Employee Retirement Income Security Act, a federal law that regulates employee benefit plans. (Californiahealthline.org)

The class action alleges specifically, that the insurers authorized residential patients care only if less intensive treatment in the previous three months was unsuccessful. This “fail-first” approach is inconsistent with standards established by professional groups such as the American Psychiatric Association or the American Society of Addiction Medicine, the complaint states.

The plaintiffs seek to change Blue Shield’s and Magellan’s policies to be consistent with the law, generally accepted professional standards and the terms of its own plans, according to the lawsuit. Further, they seek to have the thousands of mental health and substance-use benefit denials reprocessed by the defendants.

The lawsuit is Charles Des Roches, et al. v. California Physicians’ Service, et al. 

Top Settlements

If First You Don’t Succeed, Wells… do as the judge tells you and revise that settlement deal! And guess what—it worked. A revised $142 million settlement has received preliminary approval potentially ending the Wells Fargo consumer bank account fraud class action lawsuit.

The back story is that Wells Fargo employees were involved in a fake bank account scam that saw them set up unauthorized accounts and transfer customers’ funds from legitimate accounts to the newly-created ones without customer knowledge or consent. And the point? Additional bank fees of course—and it enabled the employees to hit their sales targets. Wells Fargo customers were then charged fees for insufficient funds or overdrafts, because they didn’t have enough money in their legitimate accounts. How do you spell illegal?

In March, Wells Fargo announced it had reached a preliminary $110 million settlement resolving 12 putative class actions making similar allegations of fraud. According to the Consumer Financial Protection Bureau (CFPB), which shared in a $185 million fine brought against Wells Fargo for the fraud, bank employees set up more than two million deposit and credit card accounts without customer authorization between January 2011 and September 8, 2015. Some 14,000 of those accounts earned over $400,000 in fees for the bank, including annual fees, interest charges and overdraft-protection fees, CNN Money reported.

US District Judge Vince Chhabria has now given the revised settlement deal the go-ahead after the plaintiffs and defendants resubmitted the agreement with several revisions, as requested by the judge. Those revisions include a simplified opt-out process, a more comprehensive class notification procedure and an expanded anticipated scope of credit-impact damages.

Under the original settlement proposal, the class consisted of Wells Fargo bank customers that had unauthorized accounts opened in their names, were enrolled in a product or service or had an application submitted for a product or service in their name without consent between January 1, 2009, and the execution of the settlement. Wells Fargo subsequently agreed to extend the claims to 2002, adding an additional $30 million to the settlement fund in April.

“[T]he parties negotiated a revised settlement that guarantees classwide compensation for actual damages, supplements compensation for noncompensatory damages and provides a better process for claimant input and court oversight prior to final approval,” Judge Chhabria wrote. 

The case is Jabbari et al. v. Wells Fargo & Co. et al., case number 3:15-cv-02159, in the U.S. District Court for the Northern District of California. 

Ok – That’s a wrap for this week. See you at the bar!