Class Action - Part 13

Week Adjourned: 11.27.15 – Fantasy Sports, Urban Outfitters, Defective Hip Implant

Top Class Action Lawsuits

The fantasy is over…the game is up. Well, maybe. JP Morgan Chase and a host of others financial companies, including Visa, MasterCard and American Express got hit with a consumer fraud class action lawsuit this week for processing payments for DraftKings and FanDuel. The fantasy sports lawsuit, filed in federal court, also names Capital One Bank and two other payment processors as defendants. The lawsuit claims the banks and credit companies should have known that DraftKings and FanDuel were running illegal internet gambling rings in violation of state and federal laws. “Significantly, the burden is on the payment provider to prohibit restricted transactions or risk civil or criminal punishment,” the complaint states.

raftKings and FanDuel are the two largest players in the daily “fantasy sports industry.” The game allows players to pick a roster of professional athletes from all of the major sports and win cash prizes if their team wins that night’s, or week’s, games, depending on the sport.

Earlier this month, New York Attorney General Eric Schneiderman sent DraftKings and FanDuel cease-and-desist letters The stating daily fantasy sports companies are misleading New York consumers into thinking their services are like traditional fantasy sports and are causing the same kinds of social and economic harms as other forms of illegal gambling.

“Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” Schneiderman said in a statement.

The case is Guttman et al v. Visa Inc. et al, case number 1:15-cv-09084, in the U.S. District Court for the Southern District of New York.

Meanwhile, back on the employment front…Urban Outfitters Inc. and subsidiaries Anthropologie Inc. and Free People Inc. are facing a wage and hour class action lawsuit filed in California state court, alleging they use a call-in scheduling policy in violation of California labor law. Seen a few of these now…am reminded of that tune…”how long has this been going on?”

Filed by former Urban Outfitters retail sales clerk Mariah Charles, the Urban Outfitters lawsuit asserts the defendants requires some of their employees to call their managers two hours before they are tentatively scheduled for a shift in order to find out whether or not they will work that day. The company policy states that if the employees don’t work, they aren’t paid for making the phone call or for clearing their schedule for the day, according to the complaint.

“Defendants frequently do not allow employees to work a scheduled call-in shift, thereby depriving the employee of the opportunity to earn wages for the time they have made available to defendants,” the lawsuit states. “Regardless of how many days and hours employees are in fact permitted to work, employees are required to mold their lives around the possibility that they will work each and every call-in shift.”

According to the complaint, the call in policy also makes it impossible for employees to navigate eligibility requirements for government benefits like housing assistance, food stamps and child care subsidies, which are typically based on income or hours worked per week.

“Because employees are not permitted to effectively use their time for their own purposes when making the call-in inquiry, under California law, they are entitled to wages,” the lawsuit states.

The lawsuit claims the defendants’ policy violates Section 5 of California’s Industrial Welfare Commission Wage Order 7-2001, which dictates that if an employee is required to show up for work and does, they are entitled to half a day’s pay. Additionally, the company fails to pay minimum wage for the time the workers spend on the phone with their managers checking to see if they’ll work that day.

The complaint alleges failure to pay minimum wage, failure to pay reporting time pay, failure to provide accurate wage statements, failure to keep accurate records, failure to pay earned wages upon separation of employment, unlawful business practices, unfair business practices, and asks for civil penalties under the Private Attorneys General Act.

Charles is represented by Marcus J. Bradley, Kiley L. Grombacher and David C. Leimbach of Marlin & Saltzman LLP. The case is Mariah Charles v. Urban Outfitters Inc. et al., case number BC6-1952, in the Superior Court of California, County of Los Angeles.

Top Settlements

Here’s one for the books. In what is considered a bellwether defective hip implant lawsuit, a jury has just handed down an $11 million verdict against the makers of allegedly defective implants. In this trial, part of a multidistrict litigation (MDL) against Wright, the Atlanta jury found the plaintiff did have a defective hip implant, and that Wright had misrepresented the safety of the device.

According to court documents, the Wright hip verdict includes $1 million in compensatory damages and $10 million in punitive damages. Robyn Christiansen, the plaintiff, is one of about 2,000 people who filed a complaint or entered a tolling agreement after receiving allegedly defective Wright Conserve Hip Implant Systems. She filed her lawsuit in 2013, seven years after receiving her implant.

According to the complaint, Christiansen underwent surgery to receive the implant in 2006, based on information provided by Wright that the metal-on-metal design was better compared with those made a polyethylene lining.

Christiansen began experiencing severe pain in her right hip in 2012, during exercise. She underwent surgery to correct what her doctor thought to be a loose component. However, during the surgery her doctor discovered the surrounding soft tissue had been damaged by metal debris that was causing the hip to fail, according to the complaint.

“A former ski instructor for over 47 years, Ms. Christiansen is now limited in her ability to enjoy the things she has always loved to do, such as water-skiing and hiking,” according to a written statement provided on behalf of the plaintiff’s counsel.

The case is In re: Wright Medical Technology Inc., Conserve Hip Implant Products Liability Litigation, case number 1:12-md-02329, in the U.S. District Court for the Northern District of Georgia.

Ok – that’s it for this week folks –Happy Thanksgiving Weekend!

Week Adjourned: 11.20.15 – MoPub, McDonald’s, Regis Salons

Top Class Action Lawsuits

Wonder if the Bird will Sing? Twitter unit MoPub is facing a proposed Internet privacy violations class action lawsuit alleging the mobile ad management platform installs a “supercookie” in Verizon subscribers’ Internet browsers, which tracks customers online activity.

Plaintiff Shamma Singh, a California-based Verizon subscriber, states in the MoPub complaint that the tracking IDs created by MoPub Inc. for her and other Verizon Wireless users to track their behavior for targeted advertising, are very hard to identify and that computer experts have struggled to detect them. The lawsuit claims that the marketing company offers only a bogus opt-out mechanism that raises a logical catch-22.

“Although MoPub Inc. appears to have an opt out mechanism, Verizon users have no knowledge that MoPub Inc. exists or is tracking them, rendering the opt out idea wholly ineffective,” the complaint states. “There is no reason why consumers would know to visit MoPub Inc.’s page to attempt to avoid tracking if they have no knowledge of its practices.” Of course not—who would think, right?

But wait—there’s more…the opt-out option doesn’t even require MoPub to stop the tracking. Rather, it’s simply a request that MoPub can choose to ignore, according to the complaint. Consequently, the lawsuit states, MoPub has compiled “deeply personal and private information” on users without their knowledge or consent and designed its supercookies to be practically “indestructible,” according to the plaintiff. Further, deleting cookies from a browser won’t remove MoPub’s code, the lawsuit states. Of course not. So really, should we be surprised?

Singh seeks to establish a class of the “thousands or millions” of Californians who used Verizon to access the Internet or use applications on their phones or computers, stating the statute of limitations doesn’t apply because MoPub concealed its tracking.

The lawsuit is Case No. BC601072, in the California Superior Court, County of Los Angeles.

McDonald’s Customers not Hep to That? Ok—didn’t see this one coming. Nor did Mickey D’s, I’m betting. A personal injury class action lawsuit has been filed against the operator of a McDonald’s restaurant in Waterloo, New York, by a customer who alleges he and others who ate at the restaurant were exposed to food and drinks prepared by a worker with the hepatitis A virus, which causes contagious liver infections.

Filed in New York state, against Jascor Inc, the lawsuit seeks class status for potentially affected customers, who may number more than 1,000.

The McDonald’s lawsuit stems from a Seneca County Health Department confirmed a case of hepatitis A in a food service worker at the Waterloo McDonald’s, on November 13.

Public health officials said diners had a low risk of contracting hepatitis A. However, they urged customers who had consumed food and/or beverages from the Waterloo restaurant on November 2, 3, 5, 6 and 8 to consider treatments if they were not previously vaccinated against hepatitis A.

According to the complaint, plaintiff Christopher Welch purchased and consumed products from the restaurant on at least one day when the infected worker was on duty.

The complaint alleges McDonald’s is liable because it sold food and drink that may have been contaminated with hepatitis A, exposing customers to possible illness and forcing them to receive a vaccine or take a blood test. Further the restaurant failed to exercise due care in assuring that its employees obtained hepatitis A immunization and for allowing one or more employee to work while infected with the virus, the lawsuit states.

Although plaintiffs are not seeking damages, the complaint states the losses could be for lost wages; medical and medical-related expenses; travel and travel-related expenses; emotional distress; fear of harm and humiliation; physical pain; physical injury; and other incidental and consequential damages that could arise.

The case is Welch et al v. Jascor Inc d/b/a McDonald’s Restaurant, No. 49796.

Top Settlements

Here’s a Styln’ Settlement for the Folks who Do your Do… To the tune of $5.75 million.That’s right rolks. The settlement, if approved, will end an unpaid wages and overtime class action lawsuit pending against Regis Corp, filed by workers in the company’s hair salons who allege they were shorted on overtime and minimum wage pay.

The preliminary Regis stylist deal would end claims that Regis violated California labor law and the Fair Labor Standards Act as well as address claims that they violated the state labor laws by failing to provide rest and meal periods, failing to pay wages due upon termination, making illegal payroll deductions, and failing to reimburse business expenses, among other claims, according to a third amended complaint included in the court filings.

The latest complaint in the case would consolidate a similar suit that was ongoing in California state court into the instant action. The new case would include three potential sets of classes: stylists employed by Regis in California from May 2010 through the date when the court enters a preliminary approval order, other Regis employees in California during the same period, and members of either of the first two groups who stopped working for the company during the period, according to the proposed settlement.

Under the deal, the three named plaintiffs would share $15,000 in service awards; each putative class member who separated from the company would get $150; and Regis would pay $20,000 in penalties to various state funds. The overall putative class of approximately 5,573 would share the remaining funds, less legal and administrative costs, on a prorated basis, with two-thirds going to the stylists and one-third going to the other workers.

The case is Fong et al. v. Regis Corp. et al., case number 3:13-cv-04497, in the U.S. District Court for the Northern District of California.

Ok – that’s it for this week folks – see you at the bar! And Happy Columbus Day!

Week Adjourned: 11.13.15 – Cheerios, GNC, JCPenney

Top Class Action Lawsuits

Cheery-oh-ho-ho-NOT! General Mills—accused of going a heavy on the hot air and light on substance. Cheerios is the subject of a false advertising class action filed alleging that General Mills misleads customers about the amount of protein in its popular cereal Cheerios Protein. Filed in federal court, the lawsuit asserts that a side by side comparison of Original Cheerios and Cheerios Protein shows that Cheerios Protein does not contain as much protein as the original version. Say wha…?

The Cheerios lawsuit asserts that General Mills is marketing Cheerios Protein as a “high protein, healthful alternative to Cheerios” when it does not contain much more protein than Original Cheerios. “Rather than protein, the principal ingredient that distinguishes Cheerios Protein from Cheerios is sugar,” the suit states.

According to the complaint, the Nutrition Facts Panel on the boxes cite a 4 gram difference in protein (7 for Cheerios Protein versus 3 grams for the original), a “smidgen”. However, the lawsuit attributes that to a larger serving size (55 grams as opposed to 27 respectively). The complaint goes on to state that for the same 200 calories, there is only a 0.7 gram difference between Cheerios Protein Oats and Honey (6.7 grams) and Original Cheerios (6 grams).

Further, the lawsuit alleges that Cheerios Protein contains significantly more sugar than Original Cheerios cereal. By way of example, a 1 1/4-cup serving of Cheerios Protein Oats and Honey has 17 grams of sugar, whereas Original Cheerios has 1 gram for a 1 cup serving. Similarly, a 1 1/4 cup serving of the Cinnamon Almond variety has 16 grams, according to the documents.

The Cheerios lawsuit states that the advertising for Cheerios Protein says it’s a “great start to your day” along with pictures of “appealing photographic images depicting healthy and successful kids and parents.” Further, “These claims and images are part of a sophisticated marketing campaign to encourage parents to purchase Cheerios Protein for their children; and the sweet taste of the product helps ensure that children will eat the product,” the lawsuit states.

In a report by ABC News, the agency stated it also found Cheerios Protein Oats and Honey to have more sugar than every other variety of Cheerios on the market: with 10.2 grams for a 3/4 cup serving. Apple Cinnamon Cheerios has the second most with 10 grams and third is Cheerios Protein Cinnamon Almond at 9.6 grams. Frosted Cheerios, Fruity Cheerios and Chocolate Cheerios have 9 grams each, the calculations found.

Heads Up for GNC Supplement Users…there’s more to those supplements than you thought… No stranger to lawsuits, GNC is facing a dangerous drugs class action alleging the company includes dangerous ingredients, such as picamilon, a synthetic neurotransmitter, and amphetamine-like BMPEA in its products. Filed by lead plaintiff, Chris Lynch, the lawsuit asserts that the company knew or should have known the products were actually “spiked” with BMPEA.

Picamilon is a prescription drug legal in some countries, but not the United States. It is used to treat a variety of neurological conditions. BMPEA is a synthetic chemical similar to amphetamine that is banned by the World Anti-Doping Organization, according to the complaint.

“This action arises from defendant’s failure, despite its knowledge (read consumer fraud) that the products are dangerous and not fit for dietary purposes, to disclose and/or warn plaintiff and other consumers,” Lynch states in the lawsuit. “Indeed, defendant has undertaken to conceal vital information concerning the risks of the product.”

The proposed GNC class action cites Oregon attorney general Ellen Rosenblum’s October 22 suit alleging that the company sold dietary supplements that contained picamilon and BMPEA.

“Despite this … notice to GNC that Picamilon is an unlawful ingredient and that products that contain Picamilon are adulterated, GNC continued to sell products that contain Picamilon nationally and in Pennsylvania,” the suit states. “GNC did not cease selling such products until after Oregon’s Attorney General issued a document ‘Notice of Unlawful Trace Practices and Proposed Resolution’ on September 21, 2015.”

Further, Lynch alleges that as early as 2007, GNC was aware that picamilon is a synthetic drug created by Soviet researchers, and not a lawful dietary ingredient, pointing to documents reviewed by GNC’s technical research senior project manager.

Despite widespread knowledge that the Acacia rigidula products were at high risk of having been adulterated with BMPEA, GNC continued to sell these products without testing them to see if they were spiked with BMPEA, or telling consumers about the risk, according to the complaint.

The case is Lynch v. GNC, case number 2:15-cv-01466 in the U.S. District Court for the Western District of Pennsylvania.

Top Settlements

JCPenney’s Pricing Has Preliminary Settlement… JCPenney has reached a preliminary settlement agreement in a consumer fraud class action lawsuit brought on behalf of California customers who purchased certain JCPenney private or exclusive branded products.

The lawsuit, filed in 2012, arises from the price comparison advertising of private and exclusive branded products JCPenney used in California between November 2010 and January 2012. Plaintiff claims, among other things, that JCPenney’s practices did not comply with California law. JCPenney denies the allegations and is entering into this settlement to eliminate the uncertainties, burden and expense of further protracted litigation.

If approved, according to the terms of the settlement, JCPenney will make available $50 million to settle class members’ claims. Class members will have the option of selecting a cash payment or store credit. The amount of the payment or credit will depend on the total amount purchased by each class member during the class period.

The settlement agreement also states that JCPenney will implement and/or continue certain improvements to its price comparison advertising policies and practices, including periodic monitoring and training programs designed to ensure compliance with California’s advertising laws.

The lawsuit, Cynthia E. Spann v. J.C. Penney Corporation, Inc., is pending in the United States District Court for the Central District of California.

Ok—That’s a wrap folks… Happy Friday…See you at the Bar!

Week Adjourned: 11.6.15 – Jack in the Box, Airbags, Optical Disc Drives

Top Class Action Lawsuits

Another Week, Another Employment Lawsuit…in fact, this is just one of several employment lawsuits filed this week. But let’s look at this one alleging Jack in the Box (JB) Jacks its employees. The fast food chain is facing an employment class action lawsuit filed by a former store manager who alleges the fast food chain failed to pay him overtime wages despite his regularly working in excess of 72 hours per week.

According to lead plaintiff Joseph Rico in the Jack in the Box lawsuit, the company allegedly misclassified Rico and other store managers as exempt employees under California labor law, enabling the company to pay them a fixed amount of wages. Rico alleges that he worked at the burger chain between February 2014 and July 2015, during which time he was often asked to fill in for non-exempt hourly employees who had worked 40 hours in a given week, allowing JB to minimize overtime pay.

“Jack In The Box has a policy and practice of misclassifying store managers as salaried exempt employees,” Rico states in his complaint. “… Jack In The Box had and continues to have a corporate aversion to paying its employees overtime wages.”

The complaint asserts that Rico was told by that he would be earning $45,000 a year and working about 47.5 hours per week on average. However, Rico claims he regularly worked over 72 hours, and occasionally as much as 80 hours per week, rarely had time to take breaks and was not compensated for breaks that were missed or interrupted.

According to Rico, on Mondays he started work at 4 a.m., spending the early hours doing inventory, and then performing non-exempt tasks like filling orders, working the grill, deep fryer and drive through, stocking the restaurant and providing janitorial, custodial, security and repair services.

Rico states he did not receive a break from work until at least 2 p.m., and even then the break would only be a few minutes long, if customer flow allowed for it. On most days, Rico claims he worked until 7 p.m. or later, according to the lawsuit. He cites additional examples of excessive hours worked, throughout a work week, without breaks, performing non-exempt tasks.

Further, the Jack in the Box lawsuit claims that Rico and other store managers did not receive wage statements, as required by California Labor Code, that they were not paid the wages they were due if they were terminated or resigned, and that they had to pay out of pocket for any restaurant repairs, but were not reimbursed.

Rico is looking for compensation, damages, penalties and interest under the California Labor Code, as well as penalties for violation of the Unfair Business Act, California Business and Professions Code, and compensation and penalties under the California Private Attorneys General Act, among other things.

The case is Joseph Rico, on behalf of himself and all others similarly situated, v. Jack in the Box Inc. and DOES 1-50, inclusive, case number BC599920, in the Superior Court of the State of California County of Los Angeles.

Top Settlements

Defective Air Bags get a Settlement of Sorts… This one, between Takata and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA). The price tag for Takata is a whopping $200 million. The offense? Defective air bags, which caused 7 deaths and nearly 100 air bag injuries in the United States and now involves the recall of 23 million inflators, and 19 million vehicles by 12 automakers. Read on.

The NHTSA issued two orders this week, both of which impose the largest civil penalty in NHTSA’s history for Takata’s violations of the Motor Vehicle Safety Act, and for the first time use NHTSA’s authority to accelerate recall repairs to millions of affected vehicles. Additionally, the actions prioritize recalls so the greatest safety risks are addressed first, and set deadlines for future recalls of other Takata inflators that use a suspect propellant unless they are proved to be safe.

Here’s the skinny—short-ish version: the Consent Order issued to Takata imposes a record civil penalty of $200 million and requires the company to phase out the manufacture and sale of inflators that use phase-stabilized ammonium nitrate propellant, which is believed to be a factor in explosive ruptures that have caused 7 deaths and nearly 100 air bag injuries in the United States.

Of that $200 million fine, $70 million is payable in cash. An additional $130 million would become due if Takata fails to meet its commitments or if additional violations of the Safety Act are discovered.

The Consent Order also lays out a schedule for recalling all Takata ammonium nitrate inflators now on the roads, unless the company can prove they are safe or can show it has determined why its inflators are prone to rupture.

And there’s a confession…as part of NHTSA’s Consent Order to Takata, the company has admitted that it was aware of a defect but failed to issue a timely recall, which is consumer fraud and a violation of the Motor Vehicle Safety Act. In connection with the Consent Order, NHTSA also issued findings that Takata provided NHTSA with selective, incomplete or inaccurate data dating back to at least 2009, and continuing through the agency’s current investigation, and that Takata also provided its customers with selective, incomplete or inaccurate data. Nice.

The order also imposes unprecedented oversight on Takata for the next five years, including an independent monitor selected by NHTSA to assess, track and report the company’s compliance with the phase-out schedule and other requirements of the Consent Order, and to oversee the Coordinated Remedy Program.

Separately, the Coordinated Remedy Order issued to Takata and the 12 vehicle manufacturers involved in the existing Takata recalls directs them to prioritize their remedy programs based on risk, and establishes a schedule by which they must have sufficient parts on hand to remedy the defect for all affected vehicles. The order also establishes a Coordinated Remedy Program under which the agency will oversee the supply of remedy parts and manage future recalls with the assistance of an independent third-party monitor.

In the Coordinated Remedy Order NHTSA is using for the first time legal authority which was established in the 2000 TREAD Act to allow the agency to accelerate safety defect repairs if manufacturers’ remedy plans are likely to put Americans at risk. NHTSA announced in June that it was considering use of that authority, and has since gathered information and comment from vehicle manufacturers, parts suppliers and the public as part of a proceeding to determine whether and how to best address recalls involving more than 23 million inflators, 19 million vehicles and 12 automakers.

Under the Coordinated Remedy Order, vehicle manufacturers must ensure they have sufficient replacements on hand to meet consumer demand for the highest-risk inflators by June 2016, and to provide final remedies for all vehicles—including those that will receive interim receive interim remedies because of supply and design issues—by the end of 2019.

And What about the Price of Optical Disc Drives, you ask? Well, a proposed $37 million settlement has been filed in an antitrust class action alleging multiple electronics makers, colluded to fix prices of optical disc drives, which read or write data on CDs, DVDs and Blu-rays and are found in computers, video game consoles and other devices.

The optical disc drive settlement, if approved, would end the claims of a class of direct purchasers claims against seven defendant corporations, which includes Sony Corp., Samsung Electronics Co. Ltd. and Koninklijke Philips Electronics NV, BenQ Corp., Pioneer Electronics Inc., Quanta Storage Inc., and TEAC Corp.

According to court documents, the direct purchasers have asked California’s Northern District to preliminarily approve each settlement, provisionally certify settlement classes, approve the form and manner of notice to the class, appoint class counsel, approve a plan of allocation, and establish a schedule for final approval and for class counsel’s motion for attorneys’ fees and costs.

The fairness of the settlement must be established in a court hearing. If approved, QSI will pay $400,000, BenQ $875,000, TEAC $1.325 million, Pioneer $4.2 million, and Sony, Toshiba and Philips will pay $6 million, $9.2 million and $15 million, respectively.

The proposed settlement class includes all individuals and entities who purchased one or more optical disk drives in the US directly from the defendants or any of their subsidiaries or affiliates between January 1, 2004 and January 1, 2010.

Court documents reveal that the court previously approved a $26 million settlement with the direct class of purchased and defendants Hitachi-LG Data Storage Inc. and related entities, a $5.75 million settlement they reached with Panasonic Corp. and a $6.15 million settlement with NEC Corp.

The case is In re: Optical Disk Drive Products Antitrust Litigation, case number 3:10-md-02143, in the U.S. District Court for the Northern District of California.

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

Week Adjourned 10.30.15 – Amazon, Anthem Blue Cross, CVS

Top Class Action Lawsuits

Amazon not Ready for Prime Time? Amazon’s Prime Now “Instant gratification market” is great for everyone but the delivery guys, according to a lawsuit filed against the online retailer this week. Amazon got hit with a proposed employment class action lawsuit filed by drivers delivering its products, specifically, drivers delivering goods within two hours of being ordered through Amazon’s “Prime Now” app.

According to the lawsuit, the drivers have been classified by Amazon and the companies providing services to Amazon as independent contractors. Ok—who doesn’t know this one by chapter and verse….Predictably, the drivers allege that have been misclassified.

According to their lawsuit, they deliver tens of thousands of items to Amazon’s Prime Now customers based on orders placed on Amazon’s Prime Now mobile app, which is aimed at what is referred to as the “instant gratification market.” But everything has its price.

So, to cut to the chase, the Amazon Prime driver complaint, filed October 27, 2015, in Los Angeles County Superior Court names Amazon.com, Inc., Scoobeez Inc., and ABT Holdings, Inc. as defendants. The four named plaintiffs asserts that they and others similarly situated to them were hired by Scoobeez, a courier company operated by ABT Holdings, to work exclusively for Amazon.com’s Prime Now two-hour delivery service in Orange County, California.

The specific allegations are that the app suggests a $5.00 tip for drivers (which they claim they have not received in whole or in part); that the drivers receive multiple days of training in making Amazon Prime Now deliveries; that they are scheduled to work fixed shifts, arrive at a designated warehouse ahead of the shift time and check in with a dispatcher; that they are sent home if there is not enough work for them; that they cannot reject work assignments or request particular geographical areas; that they must follow specific rules or instructions and are subject to discipline or termination if they do not; that they are required to deliver packages in a set sequence determined by the defendants; that the Prime Now app generates routes and directions; that they cannot deliver packages either two minutes too early or too late; that they are required to ask customers to fill out customer surveys; that the rates are unilaterally determined by the defendants, who reserve the right to change the compensation terms at any time; and that the delivery drivers are required to use their own vehicles and pay for their own vehicle and transportation expenses.

The plaintiffs claim violation of an array of state laws governing employees, including those requiring the payment of minimum wages, overtime, reporting pay, expense reimbursement, and meal periods, all of which they claim entitlement to because they are allegedly employees and not actually independent contractors.

The case is Truong v. Amazon.com, Inc., No. BC598993 (Cal. Sup. Ct. Los Angeles County, Oct. 27, 2015).

Top Settlements

Anthem Blue Cross caught with their pants down… has agreed to an $8.3 million settlement ending a bad faith insurance class action. The settlement could affect some 50,000 California customers.

The Anthem Blue Cross settlement will resolve two lawsuits that were filed by Anthem policy holders in 2011, alleging the state’s largest for-profit health insurer increased annual deductibles and other yearly out-of-pocket costs on individual policies in the middle of the year, which was a breach of contract and represented unfair business practices.

The lawsuit states that, in the case of plaintiff Dave Jacobson, the rate hikes amounted to a yearly out-of-pocket maximum increase from $5,000 to $5,850. His annual prescription drug deductible increased to $275 from $250.

According to the terms of the settlement, Anthem Blue Cross will mail notices to affected customers and to post information about the agreement on a public website. Only consumers affected by the midyear policy changes will receive settlement checks, but all Californians enrolled in individual Anthem health plans will be subject to the agreement that prevents such cost increases in the future.

Checks will be mailed in December to 50,000 consumers. The average amount will be $167. The four named plaintiffs in the court case will receive an additional $10,000, subject to court approval. So, watch the mail folks.

A fair shake for Pharmacists… in the guise of a $7.46 million settlement recently agreed in an unpaid overtime lawsuit pending against CVS Pharmacy. The settlement will end claims made in three separate but related class action lawsuits that CVS failed to pay overtime wages; failed to provide timely, accurate, itemized wage statements; failed to pay earned wages upon discharge; conversion; and unlawful and/or unfair business practices in violation of California labor law.

The CVS lawsuit asserts that pharmacists who work more than six days in a row are entitled to overtime pay for work beyond the sixth day, regardless of how CVS defines its work week.

The CVS settlement effects all persons who are or were employed by CVS as non-exempt pharmacists in Regions 54, 65 and/or 74 in the State of California, and who worked more than six consecutive days of work without overtime pay from October 2, 2009 through April 30, 2015 (Connell, Region 65), October 4, 2009 through April 30, 2015 (Paksy, Region 54), and October 29, 2009 through April 30, 2015 (Bystrom, Region 75).

A separate settlement was reached in a similar class action lawsuit (Rimanpreet Uppal v. CVS Pharmacy Inc.) involving California’s Region 73.

Class Members will be paid based on the number of “Compensable Workweeks” in which they worked more than six consecutive days without overtime pay.

Despite denying the allegations, CVS agreed to settle the class action lawsuits to avoid the risk and expense of proceeding to trial. KA-Ching… better to pay your staff… right? Now that’s money well spent.

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

Week Adjourned: 10.23.15 – Forever 21, Publix, Duke Energy

Top Class Action Lawsuits

Don’t make any plans! We might need you to work…or not. Forever 21 Retail Inc. is the latest retailer to get hit with an employment class action lawsuit over the practice of using on-call shifts. This practice results in failure to compensate workers who report for work but ultimately aren’t put to work. Nice one.

Former Forever 21 sales clerk, Raalon Kennedy, claims in the lawsuit, that the clothing retailer doesn’t pay its employees reporting time pay, which they are entitled to if they report to work but aren’t put to work or work less than half a scheduled day’s work. In the complaint, Kennedy calls this practice the latest form of wage theft.

“On-call shifts, like regular shifts, also have a designated beginning time and quitting time. Forever 21 informs its employees to consider an on-call shift a definite thing until they are actually told they do not need to come in,” the lawsuit states. “In reality, these on-call shifts are no different than regular shifts, and Forever 21 has misclassified them in order to avoid paying reporting time in accordance with applicable law.”

According to the Forever 21 lawsuit, Kennedy worked as a sales clerk at a Southern California Forever 21 store, where he was frequently scheduled to work on-call shifts, both after his regularly scheduled shift and on days when he otherwise wasn’t required to work.

Under California labor law, nonexempt employees must be paid reporting time pay when they are required to report to work but aren’t put to work or are only paid less than half of their scheduled day’s work. Kennedy states that Forever 21 never compensated him with reporting time pay.

The complaint asserts that these on-call shifts take a toll on employees, especially those in low-wage sectors, making it difficult for employees to obtain other employment or plan activities on days they’re scheduled for on-call shifts.

The complaint alleges failure to pay reporting time pay, failure to pay all wages earned at termination, failure to provide accurate wage statements and unfair business practices and asks for the payment of unpaid wages as well as compensatory and economic damages and attorneys’ fees and costs, among other claims for relief.

The case is Kennedy v. Forever 21 Retail Inc. et al., case number BC597806, in the Superior Court of the State of California, County of Los Angeles. Go get ‘em!!

Publix Supermarkets outed for making robocalls… Yup—‘fraid so. They got hit with a Telephone Consumer protection Act (TCPA) lawsuit this week that claims the company made numerous auto-dialed phone calls to lead plaintiff Eric Snover, telling him to pick up a prescription when he had never used Publix’s pharmacy services.

In the Publix robocall lawsuit, Snover contends he received 13 calls made my robodialers, all of which had a recorded voice telling him that his prescription was ready for pick up at a Destin, Florida, Publix store. However, Snover claims that he doesn’t live in that town, that he has never used a Publix pharmacy, and he has never given the grocery chain his cellphone number.

Additionally, the lawsuit claims that the recording provides no opportunity to opt out of the robocalls or to ask Publix to stop calling them.

Wishing to end the unsolicited calls, Snover contacted Publix three times, according to the lawsuit, each time an employee assured him that the calls would stop. However, the calls continued until November 2014, the complaint states.

In-store pharmacies are present in nearly 80 percent of Publix’s 1,100 stores in the South and comprise a principal part of its business, the complaint states. “In an effort to increase their bottom line and garner market share in the pharmacy services industry, defendant engaged in a systemic marketing campaign involving artificial or prerecorded voice calls … to consumers’ cellular telephones to inform them that prescriptions were ready for pickup,” the lawsuit states.

“However, defendant didn’t obtain written express consent for those prescription service-related calls.” Instead, Publix queried its database of cellphone numbers for consumers who may have previously filled prescriptions at its pharmacies and used an autodialer to call them, the lawsuit states.

Many of these consumers don’t use Publix’s prescription services and did not have any prescriptions to pick up a Publix pharmacy, Snover contends. “As a result, many consumers were automatically opted in to Publix’s autodial program, resulting in an obligation to affirmatively opt out in order to avoid repeated, unsolicited autodialed calls.” Snover claims that Publix ignored requests by consumers to stop the allegedly illicit calls.

Snover seeks to represent a national class of consumers whom Publix used an autodialer to call their cellphones about a pharmacy service since October 2011, according to the complaint.

Each member of the proposed class would be entitled to $500 for every negligently placed call or $1,500 for each call placed in knowing violation of the TCPA, Snover said. His suit also seeks injunctive relief.

Snover is represented by Jonathan Betten Cohen of Morgan & Morgan PA. The case is Snover v. Publix Super Markets Inc., case number 8:15-cv-02434, in the U.S. District Court for the Middle District of Florida.

Top Settlements

Duke Energy Outduked? Ok—here’s a biggy. Albeit preliminary—the settlement on the table is a suggested $80.9 million. If approved, it will end an antitrust class action lawsuit pending against Duke Energy Corp.

Short version on the lawsuit: filed on Ohio federal court, the suit claimed Duke gave corporate customers a competitive advantage via illegal rebates in exchange for their support of a rate stabilization plan the company was trying to pass through the Public Utilities Commission of Ohio.

According to information issued by Duke, the terms of the settlement provide for residential and non-residential customers, from January 2005 to December 2008, to share in $25 million, while $8 million will be used to fund energy-related programs to benefit Duke Energy Ohio customers. The remaining $23 million is pay legal fees and other expenses.

If approved, the Duke Energy settlement would end 8 years of litigation. The lawsuit was brought by Duke Energy residential customer Anthony Williams, non-residential customer BGR Inc. and others accusing the company of using various unlawful schemes to funnel tens of millions of dollars in rebates to its largest corporate customers.

The case is Anthony Williams et al. v. Duke Energy Corp. et al., case number 1:08-cv-00046, in the U.S. District Court for the Southern District of Ohio.

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

Week Adjourned: 10.16.15 – Gerber, CRTs, Equal Pay

Top Class Action Lawsuits

This lawsuit’s off to a good start! Gerber Good Start Gentle infant Formula got hit with a consumer fraud class action this week, filed by Plaintiff, Oula Zakaria who alleges that Gerber engaged in unfair business practices regarding the marketing of the baby food. Specifically, the lawsuit claims a pattern of “deceit and unfair business practices by Gerber Products Co. (“Defendant”) in the marketing and sale of Good Start Gentle, a prominent line of infant formula produced, distributed, marketed, and sold by Defendant made from partially hydrolyzed whey protein”.

In the Gerber lawsuit, Zakaria alleges that Gerber claimed (a) Good Start Gentle was the “first and only” formula whose consumption reduced the risk of infants developing allergies; (b) that consumption of Good Start Gentle reduced the risk of developing infant atopic dermatitis, an inflammatory skin disorder; (c) that Good Start Gentle was the “first and only” formula endorsed by the Food and Drug Administration (“FDA”) to reduce the risk of developing allergies; and (d) using the FDA term of art “Qualified Health Claim” to convey that Good Start Gentle received FDA approval for the health claims advertised and was fit for a particular purpose when, in actuality, the term “Qualified Health Claim” means that the FDA did not grant approval for the use of a non-qualified health claim and that the scientific support for the claim is limited or lacking (at best).

In October 2014, the FDA issued Defendant a warning letter listing a litany of misrepresentations and falsehoods in the promotion of Good Start Gentle that violated federal law and related regulations. Defendant was instructed by the FDA to cease its deceitful practices or face potential legal action by the FDA.

Further, in October 2014, the Federal Trade Commission (“FTC”) brought the lawsuit against Defendant seeking to enjoin its deceptive practices in relation to the marketing and sale of Good Start Gentle, specifically citing Defendant’s false or misleading claim “that feeding Gerber Good Start Gentle formula to infants with a family history of allergies prevents or reduces the risk that they will develop allergies” and the false or misleading claim “that Gerber Good Start Gentle formula qualified for or received approval for a health claim from the Food and Drug Administration.”

Zakaria estimates that she purchased one container of Good Start Gentle per week from October 2013 to November 2014, from stores in Porter Ranch, California. Some of the containers of Good Start Gentle purchased by Plaintiff had a label that read, “1st & Only Routine Formula to Reduce Risk of Developing Allergies, see label inside.” But for Defendant’s allegedly false and misleading representations, Plaintiff alleges that she would not have made these purchases.

Plaintiff, on behalf of herself and other similarly situated consumers, brings this consumer protection action against Defendant based on its course of unlawful conduct. Plaintiff alleges violations of California’s Unfair Competition Law, California False Advertising Law, the Consumer Legal Remedies Act, as well as Breach of Express Warranty, Breach of the Implied Warranty of Merchantability, and other claims.

Top Settlements

Cathode Ray Tubes—ever heard of them? Well if you own one—bought one sometime between 1999 and 2007—you may be interested to learn about a staggering $576.75 million settlement in a price-fixing class action lawsuit pending against the makers of Cathode Ray Tubes, (CRTs). These devices were sold separately or as the main component in TVs and computer monitors.

The CRT settlement includes CRTs and CRT Products purchased for private use and not for resale. Purchases made directly from a defendant or alleged co-conspirator are not included.

The lawsuit claims that the Defendants fixed the prices of CRTs causing consumers to pay more for CRTs and products containing CRTs, such as TVs and computer monitors (collectively “CRT Products”). The Defendants deny Plaintiffs’ allegations. The court granted preliminary approval of the new Settlements on July 9, 2015.

Here’s the need to know: Individuals and businesses qualify for money from this settlement if they purchased a CRT or product containing a CRT, such as a TV or computer monitor, in the following states for their own use and not resale:

Arizona, California, Florida, Iowa, Kansas, Maine, Michigan, Minnesota, Mississippi, New Mexico, New York, North Carolina, North Dakota, South Dakota, Tennessee, Vermont, West Virginia, Wisconsin or the District of Columbia between March 1, 1995 and November 25, 2007
Hawaii between June 25, 2002 and November 25, 2007
Nebraska between July 20, 2002 and November 25, 2007
Nevada between February 4, 1999 and November 25, 2007

To be eligible to make a claim, you must have purchased the CRT televisions, monitors or other CRT Products “indirectly”, meaning that you purchased the products from someone other than the defendant manufacturers or alleged co-conspirators. Purchases made directly from a defendant or alleged co-conspirator are not included. Persons or businesses who purchased directly from a defendant manufacturer or alleged co-conspirator should visit http://www.crtdirectpurchaserantitrustsettlement.com/ for additional information.

Purchases of Sony® branded televisions and monitors are NOT eligible to be included in the CRT indirect purchaser case. All other brands of CRT televisions and monitors are eligible.

Hey, hey, hooray for Equal Pay! A victory for the female employees at Publicis Groupe’s MSL Group? Well, they reached a $3 million settlement in a gender discrimination class action lawsuit this week. The lawsuit, filed in February 2011, had originally asked for $100 million in damages. You do the math.

According to the equal pay lawsuit, lead plaintiff Ms. Monique da Silva Moore and other female public relations employees in the U.S. claimed they were denied equal pay, promotion and other employment opportunities by Publicis and its PR group, MSLGroup. Ms. da Silva Moore, a former global healthcare director for MSLGroup, had worked for the PR agency for 13 years.

Jim Tsokanos, MSLGroup’s U.S. president at the time, stepped down over a year after the claims were made. The lawsuit described his behavior, specifically, the suit stated that despite ongoing inappropriate conduct and complaints, Tsokanos was promoted to Executive Vice President and Managing Director of the Company’s largest office in New York and ultimately to President of the Americas. In his new role, Tsokanos continues to make comments about the appearance of female employees often discussing their “looks” in front of other employees and during meetings. He is also known to take young female employees out for drinks frequently. Human Resources has never taken any action to end President Tsokanos’ ongoing inappropriate conduct. So the next logical step was a lawsuit, and I’m guessing this win has to feel pretty good.

Ok—that’s it for this week folks—see you at the bar!

Week Adjourned: 10.9.15 – Subaru, Scottrade, LinkedIn

Top Class Action Lawsuits

Subaru Flipping You One? Just when you though it might be safe to get back into your car…guess what? Not if you own a 2006 Subaru B9 Tribeca, apparently. A defective automobile class action lawsuit has been filed against Subaru of America Inc, alleging certain of its vehicles have a design defect that causes the hood to fly open when the affected vehicles are traveling at high speed. This can result in cracked windshields and danger to the drivers, in addition to diminishing the value of the vehicles.

Filed by Sharion Hadley, the Subaru complaint asserts that the National Highway Traffic Safety Administration (NHTSA) has 17 complaints about the hood of the 2006 Subaru B9 Tribeca unlocking and smashing the windshield while being driven. However, Hadley claims Subaru won’t do anything to fix the alleged defect.

“Despite longstanding knowledge of the defect through public complaints and internal testing, Subaru has failed to take responsibility for the problem, refusing to issue a recall and denying consumer requests to pay for necessary repairs occasioned by the defect,” the complaint states.

In the complaint, Hadley states that the hood of her vehicle flew open in May while she was driving at approximately 65 miles per hour, cracking her windshield and dislodging the rear view mirror. She goes on to state that she was unable to see the road because of the broken hood. She did manage to navigate the car to the side of the road, where she was helped by passing drivers.

According to the lawsuit, Hadley contacted Subaru about the accident, but the automaker refused to take responsibility for the alleged defect, wouldn’t compensate her for the cost of repairs and refused to even look at the vehicle.

The lawsuit contends that this incident is not isolated. While numerous consumers have complained online about the same alleged defect, the NHTSA has 17 complaints about the 2006 B9 Tribeca describing a similar experience to that which Hadley experienced.

“It is well known that car manufacturers, in general, and Subaru in particular, closely monitor NHTSA complaints, so there can be no doubt that Subaru has long known of this issue from the NHTSA website,” the lawsuit states.

The lawsuit accuses Subaru of actively concealing the alleged defect, and of failing to disclose that the alleged defect would diminish the value of the vehicle.

The lawsuit seeks certification of a national and Pennsylvania class of drivers who bought or leased the 2006 Subaru B9 Tribeca. She said at least 18,000 of the class vehicles were sold by Subaru.

The complaint asserts claims for violation of the New Jersey Consumer Fraud Act, breach of the Magnuson-Moss Warranty Act, breach of express warranty and common law fraud, among others.

The case is Hadley v. Subaru of America Inc., case number 1:15-cv-07210, in the U.S. District Court for the District of New Jersey.

It Really is Groundhog Day! Another data breach class action lawsuit has been filed this week—who’s counting anymore? This one, against the discount brokerage house Scottrade Inc, alleging the company failed to take adequate action to protect its customer’s data. Scottrade announced last week that between late 2013 and early 2014 approximately 4.6 million users had their personal information, possibly including their Social Security numbers, targeted in a data breach.

Filed by plaintiff Stephen Hine, the lawsuit states that Scottrade was negligent in failing to exercise reasonable security precautions and failing to comply with industry standards for storing confidential and private personal information. Further, the lawsuit alleges Scottrade’s email notification to customers affected by the breach was “woefully inadequate and vague,” given that their information might be sold on the black market or used in stock scams and other financial frauds.

Specifically, the lawsuit states, “Scottrade’s actions and/or omissions occurred despite prior warnings, including prior incursions of their network by third parties, who conducted fraudulent stock trades using Scottrade’s customer’s accounts, and even fines from government agencies concerning its system’s security procedures and oversight.” Seriously, how can anyone still be caught with their digital trouser down anymore?

The plaintiff contends that had Scottrade heeded warnings and taken necessary precautions, the data breach could have been prevented or, at a minimum, predicted it much sooner and reduced the harm to its customers.

In its announcement, Scottrade stated that those responsible for the attack appeared to have targeted names and mailing addresses, but it couldn’t rule out the possibility that email addresses and other “sensitive data” had been stolen.

The lawsuit goes on to allege that many of the customers affected won’t receive email notifications from Scottrade as they have changed email addresses or used a different email address. Furthermore, the emails sent are materially misleading and don’t fully disclose the scope of the threat to Scottrade’s customers, the lawsuit states.

“The database accessed, however, contains, among other things, Social Security numbers, email addresses and other ‘sensitive data’ (which is not defined in the email),” the complaint states. “It is highly unlikely that the hackers, having access to the above information, would only take the affected customer’s name and email address.”

According to the complaint, as a financial institution and U.S. Securities and Exchange Commission registered broker dealer, Scottrade had a “special duty” to exercise reasonable care to protect and secure the personal and financial information of its customers.

“Scottrade should have known to take precaution to secure its customers’ data, given its special duty, especially in light of the recent data breaches affecting numerous retailers and financial institutions, as well as from prior direct breaches of its secured networks,” the complaint states. You think ?

The case is Hine v. Scottrade Inc., case number 3:15-cv-02213, in the U.S. District Court for the Southern District of California.

Top Settlements

LinkedIn will pay to play… The social media platform has agreed to pony up $13 million in a settlement, that could end a Telephone Consumer protection Act (TCPA) class action lawsuit they’re facing over spamming its members.

Specifically, the LinkedIn lawsuit targeted LinkedIn’s ‘Add Connections’, a service that allowed members to import contacts from their email accounts. LinkedIn then sent those contacts an email, according to court documents.

While the court found in favor of the plaintiffs, stating that members did not consent to LinkedIn sending reminder emails to recipients of pending invitations, the company denies any wrongdoing.

Under the terms of the proposed settlement, people who signed up for LinkedIn between September 17, 2011, and October 31, 2014, can submit a claim, this includes people who are no longer members.

The payment amount for members of approved claims will depend upon how many claims are submitted but could range from $10 to $1,500. To learn more about the settlement, visit: http://www.addconnectionssettlement.com. Check it out!!

Ok—that’s it for this week folks—see you at the bar! And Happy Columbus Day!

Week Adjourned: 10.2.15 – VRBO, Hyatt Hotels, Vitaminwater

Top Class Action Lawsuits

Another week…another data breach lawsuit. This one is filed against payment processor Yapstone, the company that handles the money for Vacation Rental By Owner (VRBO). Most seriously disturbing.

The class action was filed by a customer in New Jersey who claims the company is negligent and in breach of contract because it failed to protect customer data from a possible breach. In the VRBO complaint, Plaintiff, Jonathan Koles alleges that he was notified by letter by YapStone on September 11 that his “[e]mail and [b]ank [a]ccount were potentially exposed” in a possible breach that happened sometime between July 2014 and August 2015. According to the letter, Yapstone had first learned of the potential hack on August 4th.

Koles claims that YapStone Inc, failed to take reasonable measures to protect its customers’ personal information, promptly notify them of the possible breach and specify exactly what information may have been compromised.

According to the lawsuit, “As a result of Defendant’s ongoing failure to notify consumers regarding what type of [personally identifiable information] has been compromised, consumers are unable to take the necessary precautions to mitigate their damages by preventing future fraud.”

As a result of the data breach, Koles now pays $29.99 a month for identity protection services, has had to cancel credit cards and faces “imminent danger” that his personal information could be used for fraudulent purposes, the lawsuit states.

Because VRBO customers were required to accept payments online and provide their bank account information, YapStone breached an implied contract with customers in failing to safeguard their financial information, the complaint adds. In addition to his claims of negligence, breach of contract and unjust enrichment, Koles filed claims for violations of California’s Unfair Competition Law and the state’s Data Breach Law on behalf of a nationwide class. The suit also raises claims for violations of the New Jersey Consumer Fraud Act and the New Jersey Data Breach Act on behalf of Garden State consumers.

Koles asked the court to order YapStone to adopt “appropriate methods and policies” for consumer data collection and disclosure of personal information, pay for three years of credit card monitoring services and notify customers of the breach. He also seeks to recover damages, including actual, compensatory and statutory damages, as well as equitable relief, restitution, disgorgement, costs and attorneys’ fees.

The case is Jonathan Koles v. YapStone Inc., case number 3:15-cv-04429, in the U.S. District Court for the Northern District of California.

Hyatt feasting on ill-gotten gains? Maybe…Hyatt Hotels was hit with an unpaid wages and overtime class action lawsuit this week, alleging the global hotel chain fails to properly pay its banquet servers their tips and withholds overtime pay.

Filed by Nancy Livi, the Hyatt lawsuit is brought on behalf of current and former employees of Hyatt-branded hotels in Pennsylvania. Specifically, the complaint alleges Hyatt Hotels Corp. and its affiliates illegally diverts servers tips and refuses to pay overtime when certain employees have worked in excess of 40 hours per work week.

These actions, the lawsuit asserts, violate various laws including the Fair Labor Standards Act. The plaintiffs claims they have been seriously harmed by the company’s actions.

According to the lawsuit, customers who use the hotel for the special events at which banquet servers work are charged a set fee in addition to the charges for their events. These fees are regularly used to pay banquet servers a tip, forming part of their compensation. That fee, which is referred to as both a gratuity fee and service charge in the complaint, is divided amongst the banquet servers, with a portion of the fee being kept by the hotel, for the hotel.

The complaint alleges that Hyatt has refused to divulge information related to how much of the fee it keeps, despite requests by employees for information regarding the pay practices and lack of transparency.

According to the lawsuit, the negligible amount of gratuity banquet servers receive is not enough to be considered a tip for purposes of complying with the FLSA’s minimum wage provisions. In addition, the suit alleges that Hyatt, in its Pennsylvania hotels at least, has refused to pay overtime, even when banquet servers have worked over 40 hours in a week. “Defendants have been aware of the hours worked by the class members but have failed to pay the class members the full amount of wages to which they are entitled for this work time,” the complaint states.

The Hyatt lawsuit seeks class certification, as well as to recover unpaid tips and overtime wages, plus all available relief. According to the complaint, the class likely contains at least 40 members. Nancy Livi, et al v. Hyatt Hotels Corp., et al, case number 2:15-cv-05371 in the U.S. District Court for the Eastern District of Pennsylvania.

Top Settlements

Ok—if it sounds too good to be true….remember Vitaminwater? (yes—it’s a new noun apparently.) Well, Coke just reached a $2.7 million settlement to settle the Vitaminwater consumer fraud class action. The lawsuit alleges the company falsely marketed the sugar content of the drink. Ya think?

FYI—the lawsuit was filed six years ago. Now that’s dragging it through the courts…

Under the terms of the Vitaminwater settlement, Coca-Cola Co, and Energy Brands Inc. will advertise on the labels that the products contain sweeteners. Further, they will place the words “with sweeteners” on two panels of the product’s labeling. Additionally, the beverage makers must state the amount of calories per bottle of the product on the product’s main display panel and include the statement, “excellent source [of certain nutrients,]” on the product’s labeling.

If approved, the settlement also cites a number of statements the defendants can no longer use to market Vitaminwater, including “vitamins + water = all you need” and “made for the center for responsible hydration,” according to the motion.

The parties are also seeking to certify two settlement subclasses which are all New York residents who purchased Vitaminwater in New York at any time from Janauary 20, 2003 to the notice date and all California residents who purchased Vitaminwater in California at any time from Jan. 15, 2015 to the notice date.

According to the terms of the agreement, each of the class representatives (aka, lead plaintiffs) will be awarded $5,000.

The cases are Batsheva Ackerman et al. v. Coca-Cola Co. et al., case number 1:11-md-02215, and Juliana Ford v. The Coca-Cola Co. et al., case number 1:09-cv-00395, in the U.S. District Court for the Eastern District of New York.

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

Week Adjourned: 9.25.15 – Volkswagen, Chipotle, Hain Celestial

Top Class Action Lawsuits

Car of the People? Uhh…Mmaybe Not. This time a few weeks ago, the general public had not even heard of a defeat device—but this week? Volkswagen got hit with multiple lawsuits this week, including a $1-billion consumer fraud class action lawsuit in Edmonton, Canada, stemming from the admission by the automaker that it sold vehicles that were designed to skirt emissions laws. How? A little something called a Defeat Device.

Volkswagen has revealed that it had installed defeat devices in 11 million vehicles worldwide. So, likely this wasn’t an accidental memo misread… The devices are designed to ensure the autos pass emissions tests, but revert to producing emissions vastly in excess of emission standards once the tests are over.

The VW lawsuit states that “by manufacturing, testing, distributing and selling affected vehicles with defeat devices that allowed for improper levels of emission, Volkswagen violated the common law and legislative standards, was negligent, defrauded its customers, and engaged in unfair competition.”

Furthermore, the lawsuit claims that had the plaintiffs known of the defeat device, “they would not have purchased or leased those vehicles, or would have paid substantially less for the vehicles than they did.”

The Volkswagen complaint criticizes the alleged fraudulent behavior as “high-handed and reckless, intentional, fraudulent or grossly negligent,” worthy of a penalty that “recognizes the purposes of class actions” while protecting consumers and punishing or deterring “wrongful corporate conduct.”

There is also concern regarding loss of value to the vehicles on resale, the trouble consumers will be put through in order to get their vehicles repaired so they meet Canadian emission standards (ditto for US volks—hello California??), and whether in fact the vehicles can even be repaired without significant loss to power and performance.

And that’s just the people who bought these cars. True, an institutional investor has already filed a Volkswagen securities lawsuit—but can you imagine what’s going on with Volkswagen dealers? Nothing like a lot full of VW’s that are basically unsalable. If I had to wager a bet, it’s on VW dealership lawsuits next…

The following Volkswagen models re named in the action:

2009-2015 Jetta
2009-2015 Beetle
2009-2015 VW Golf
2014-2015 Passat
2009-2015 Audi A3

Did Chipotle have your Back(ground)? Chipotle Mexican Grill Inc, has been given food for thought this week, after being served with a class action lawsuit alleging the restaurant chain violated the Fair Credit Reporting Act (FCRA) by obtaining employment background checks after burying the required disclosure in its application materials. Filed by a job applicant, named plaintiff Lorena Mejia, the nationwide lawsuit asserts Mejia filled out a standard Chipotle application that contained a provision allowing the company to conduct a background check. However, the forms failed to make clear that the application contained authorization for Chipotle to perform background checks, in violation of the FCRA’s standard.

Specifically, the complaint states that the background-check disclosure was surrounded by potentially distracting language such as a provision for at-will employment. Who decided this was necessary?

“Under the FCRA, it is unlawful to procure or cause to be procured, a consumer report or investigative consumer report for employment purposes, unless the disclosure is made in a document that consists solely of the disclosure and the consumer has authorized in writing the procurement of the report,” the complaint states. I should hope so.

Further, the lawsuit contends that employers have been warned by the Federal Trade Commission stating that applicants are entitled to receive the disclosure as a separate document, not embedded into an employment application.

Mejia asserts that Chipotle failed to provide her a written summary of her FCRA rights, despite a provision of the statute requiring Chipotle to do so. Additionally, the company violated California privacy laws because it didn’t offer applicants a box to check as an indication that they wanted to receive copies of their reports, the complaint states.

The plaintiff is seeking to represent a nationwide class of Chipotle applicants seeking damages under the FCRA, as well as a subclass of California applicants bringing state-law claims. The case is Mejia v. Chipotle Mexican Grill Inc. et al., case number 5:15-cv-01911, in the U.S. District Court for the Central District of California.

Go get’em!

Top Settlements

Even the Crunchy Granolas have been at it… Hain Celestial Group Inc agreed a $7.5 million settlement this week, potentially ending a consumer fraud class action lawsuit alleging it falsely labeled products as organic. In addition to the cash payout, the company has agreed to provide up to $1.85 million in coupons.

So -who can you trust these days?

The lawsuit, filed by lead plaintiffs Rosminah Brown and Eric Lohela, claimed that the products failed to meet even minimum state requirements for being “organic.” Specifically, the organic components comprised less than 70 percent of the products’ ingredients, as required by the California Organic Products Act.

Hain Celestial, btw, is huge–their brands include many faves among all-natural and organic food shoppers. For example, they’ve got Arrowhead Mills, Casbah, Earth’s Best, Health Valley, MaraNatha, Rice Dream, Soy Dream, Mountain Sun, Boston’s, Garden of Eatin’, Bearitos, Sensible Portions, Terra Chips and Celestial Seasonings.

“The settlement provides substantial monetary relief for many thousands of purchasers of the challenged products who allegedly paid a premium over comparable personal care products that did not purport to be organic … [and] compensates class members for a significant portion of their alleged damages,” the plaintiffs stated. “The settlement accomplishes this while avoiding both the uncertainty and the delay that would be associated with further litigation.”

According to the reported terms of the Hain Celestial settlement, any class member who submits a valid claims form but does not have a receipt will be entitled to receive a cash refund equal to 50 percent of their Hain purchase up to $50 or a combination of cash and coupons for their claims. Those with a receipt for their purchases will receive a full refund.

The settlement needs final court approval and, if approved, all claims except one will be resolved. The remaining claim is concerns the water used in certain products – which Hain asserts is organic and which the plaintiffs state is not.

The settlement hearing is scheduled for October 8, 2015. The case is Rosminah Brown et al. v. Hain Celestial Group Inc., case number 3:11-cv-03082, in the U.S. District Court for the Northern District of California.

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