Week Adjourned: 10.26.12 – Avon, Nurses & Aides, LoJack, Morgan Keegan

The weekly wrap on top class action lawsuits and settlements for the week of October 26, 2012. Highlights include Avon’s Anew line, Maxim Healthcare worker unpaid overtime, LoJack wage and hour settlement and Morgan Keegan proposed securities fraud settlement.

Top Class Action Lawsuits

Company for Women? Not for this woman—and many others sure to be in her ‘class’. Avon Inc., the cosmetics company of door-to-door fame, is facing a potential consumer fraud class action lawsuit over anti-aging claims of its Anew skin care line. The Avon Anew class action includes such would-be miracle creams as Anew Clinical Advanced Wrinkle Corrector, Anew Reversalist Night Renewal Cream, Anew Reversalist Renewal Serum and Anew Clinical Thermafirm Face Lifting Cream products.

And the woman who’s at the lead of all this? That would be Lorena Trujillo, the lead plaintiff in the lawsuit, who alleges Avon earned “handsome profits” by misleading consumers into believing Anew anti-aging products can boost collagen production, recreate fresh skin and fortify damaged tissue, offering “at-home answers” to “procedures found in a dermatologist’s office.” Tall order, for sure, but hey—who wouldn’t want to believe it?

Earlier this month, the Food and Drug Administration (FDA) issued a warning to Avon regarding these anti-aging products, indicating that they have been misrepresented to consumers. In the warning, the FDA demanded that Avon revise certain advertising claims about the products, including the suggestion that they can change the structure or function of the body (hello, collagen production?) which would classify them as drugs under FDA regulations and require FDA approval. Therefore, Avon’s Anew anti-aging products “are not generally recognized among qualified experts as safe and effective,” the FDA said.

The Avon Anew class action lawsuit seeks to represent all U.S. consumers who purchased Anew Clinical Advanced Wrinkle Corrector, Anew Reversalist Night Renewal Cream, Anew Reversalist Renewal Serum and Anew Clinical Thermafirm Face Lifting Cream products based on Avon’s allegedly misleading advertising claims about these products.

The Lawsuit is Lorena Trujillo v. Avon Products, Inc., Case No. 12-9084, California Central District Court. Trujillo is represented by the law firm Baron & Budd.

Unpaid Overtime in Overtime Already! An overtime class action lawsuit has been filed against Maxim Healthcare Services Inc, by Jasmine Lawrence, who was employed as a Home Health Aide by the defendant until October 2012.

In the Maxim Healthcare class action lawsuit, Lawrence alleges that Maxim Healthcare Services Inc, violated, and continues to violate, the Ohio Minimum Fair Wage Standards Act (OMFWSA) because of its willful failure to compensate her and the class members at a rate not less than one and one-half times the regular rate of pay for work performed in excess of 40 hours in a workweek. Lawrence claims she regularly worked over 70 hours per week while employed by Maxim Healthcare and the majority of her time was spent performing general housekeeping duties as opposed to patient care.

Lawrence also alleges that she and the members of the putative class who are employed by the Defendant in Ohio are “employees” within the meaning of the OMFWSA.

Lawrence, the lead plaintiff in the employment class action, seeks to bring her claim for violation of the Fair labor Standards Act (FLSA) as a nation-wide collective action, and as a statewide class action based for violation of the OMFWSA.

Maxim Healthcare Services, Inc, is a Maryland corporation which, through hundreds of office locations nationwide, provides in-home personal care, management and/or treatment of a variety of conditions by nurses, therapists, medical social workers, and home health aides. Lawrence and the class are represented by Ben Stewart of Stewart Law PLLC.

Top Settlements

Time to Pay Up–Finally. LoJack agreed a class action settlement agreement this week, ending, hopefully, two California wage-and-hour class action lawsuits. The LoJack settlement, which is subject to final approval, stipulates that LoJack will pay up to $8.1 million, including plaintiffs’ attorneys’ potential fees and costs, to resolve all remaining California state class action claims.

As previously disclosed, in the related California federal wage-and-hour case,  the Company paid the class action plaintiffs $115,000 in 2011 to settle the federal claims. During 2011, the Company also recorded a $1.1 million accrual with respect to plaintiffs’ attorneys’ fee application in the federal case. In early August 2012, the federal court awarded plaintiffs’ attorneys’ fees and costs of $900,518 related to those claims. Although the Company filed a notice of appeal with respect to the attorneys’ fee award in the federal case, the Company has agreed to waive that appeal as part of this settlement.

The LoJack settlement agreement involves no admission of wrongdoing, liability or violation of the law by the Company. In addition, the agreement bars the named plaintiffs in the California state class action from pursuing further claims against the Company.

The Company expects the Court to issue a decision shortly regarding preliminary approval of the proposed settlement. Should the Court grant preliminary approval, California class members would be sent a notice of the settlement and given the opportunity to decide whether to participate. LoJack could pay less than $8.1 million in settlement of the state court case depending on the level of participation by class members in the settlement. Following the notice period, the parties may move for final approval of the settlement. LoJack anticipates that the Court would be in a position to rule on final approval of the proposed settlement by the first or second quarter of 2013. LoJack does not anticipate paying any portion of the settlement of the California state case until the Court has granted final approval.

And this Round’s on Them! Morgan Keegan & Co. Inc. has agreed to pay $62 million as part of a preliminary settlement of a securities class action involving more than 10,000 nationwide clients. The Commercial Appeal has reported the terms of the settlement won’t force the investment firm to admit any wrongdoing resulting from the 2008 meltdown of its mutual funds. Of course. Accidents happen…we all know that.

The lead plaintiff in this class action lawsuit is a Texas hedge fund which claimed a $2.1 million investment in Morgan Keegan’s closed-end mutual funds.

The Morgan Keegan settlement remains to be approved by a federal judge, and if approved, will leave one more class action outstanding against the investment firm, this one related to conventional mutual funds.

And on that note—I’ll see you at the bar. Have a great weekend!

Week Adjourned: 3.2.12 (DePuy Hip Impant, Skechers Toners, OC Register)

A weekly wrap of top class action lawsuits and lawsuit settlements for the week ending March 2, 2012.

Top Class Actions

Do you have—or know someone who has—a DePuy metal-on-metal hip replacement? You may be interested in this—a class action lawsuit—filed against DePuy Orthopaedics, Inc., the manufacturer of metal-on-metal hip replacement implants. The lawsuit claims the devices cause “irreparable harm from undiagnosed metal disease.” And the purpose of the DePuy class action lawsuit is to get DePuy to pay for patients’ ongoing medical monitoring, which involves yearly orthopedic examinations, MRIs and blood and urine tests, according to the lawsuit.

Medical monitoring, you ask? Well, the science isn’t pretty, but the facts speak for themselves. According to an investigative report published in BMJ, formerly known as British Medical Journal, thousands of hip implants made by DePuy Orthopaedics have leaked high levels of toxic cobalt and chromium ions. These toxic metals have destroyed patients’ muscle and bone, and will potentially leave some patients with long-term disability, the study says.

Metal-on-metal hip prostheses like the DePuy ASR XL can and do create three to five-fold increases in blood levels of the heavy metals chromium and cobalt,” the lawsuit states. “Toxicity from these metals causes metallosis, a disease that destroys the tissues surrounding the artificial joint. Left unresolved, metallosis creates irreparable harm to the patient from the progressive destruction of the joint tissues.”According to the court document, other health issues related to failure of the ASR XL hip implant include “immediate irreparable harm from undiagnosed metal disease and the effect it has on the joint, even after revision and on other targeted organs, such as the brain, heart, liver, and kidneys.”

Sadly, there’s more. In addition to risk of infection and blood clots in a second implant surgery, revisions will not last as long as the 20 to 30 years the original hip implants were expected to last.

The BMJ report cites longstanding “evidence of risk from metal-on-metal hips, the manufacturers’ inadequate response, and how regulatory bodies failed to give doctors and patients the information they need to make informed decisions.”

The US Food and Drug Administration (FDA) warned in 2011 about metal ions that shed minute particles of the metal implant that migrate into the bloodstream and damage bone or tissue surrounding the implant and joint.

BMJ quotes an internal DePuy memo from July 2005 that says, “In addition to inducing potential changes in immune function, there has been concern for some time that wear debris may be carcinogenic… One study suggested threefold risk of lymphoma and leukemia 10 years after joint replacement.”

“So-called ‘Silent Metal Disease,’ is found in upwards of 30% of patients with no symptoms. Cobalt and chromium poisoning can only be diagnosed promptly through a program of universal and comprehensive monitoring of the entire population of ASR XL patients,” according to the lawsuit.

BMJ says it’s likely there are more than 500,000 “at risk large diameter” metal-on-metal hips implanted in American patients since 2003 which require monitoring.

The lawsuit is asking that a class be certified and that DePuy be ordered to establish a fund to pay the costs of medical monitoring over the lifetime of all ASR XL Acetabular System hip implant patients. Those costs include annual blood and urine tests and medical imaging such as ultrasound and MRI examinations.

These shoes were made for walking–or not–according to this class action. This isn’t the first time we’ve seen complaints from consumers over reportedly false claims made by toning shoes manufacturers. This week, a consumer fraud class-action lawsuit was filed on behalf of consumers bought Skechers, alleging misleading advertising influenced people’s decision to buy the company’s “Shape-Ups” toning shoes.

The Skechers “Shape-Ups” toning sneaker class action lawsuit seeks money damages for consumers who paid a “premium price” for Skechers “Shape-Ups” based on TV, print and Internet ads that touted the toning shoes’ health benefits.

In reality, the complaint alleges, the shoes provide no additional health benefits. Instead, they pose a risk of injury due to their pronounced rocker bottom sole, according to the complaint.

The lawsuit seeks money damages and an order that would stop Skechers from “deceptive and unlawful advertising.”

According to the lawsuit, the shoes are marketed, sold and promoted by Skechers, U.S.A., Inc., and its subsidiaries.

The complaint states that Skechers is currently being investigated for its toning shoes marketing claims by the Federal Trade Commission. In September, the FTC reached a $25 million settlement with Reebok for making similar fitness claims about its own brand of toning shoes, the lawsuit states. Footwear News estimates that Skechers will face a fine of $75 million.

In particular, the lawsuit alleges that Skechers promoted that its “Shape-Ups” would provide health benefits “without setting foot in a gym.”

However, the plaintiffs claim, the company has produced no valid scientific proof that the toning shoes provide any greater benefit than regular athletic shoes.

The complaint cites an American Council on Exercise study that concluded, “There is simply no evidence to support the claims that these shoes will help wearers exercise more intensely, burn more calories or improve muscle strength and tone.”

However, the lawsuit alleges, the shoes do pose health risks. Because the rocker bottom soles create instability and change gait mechanics, they can trigger chronic injuries and cause wearers to fall and suffer injuries, the plaintiffs claim.

An attorney representing the plaintiffs notes a May 2011 Consumer Reports article stating that toning shoes had produced more injury reports than any other product in its database. The reported injuries included tendinitis and foot, leg and hip pain. The more severe reported injuries included broken bones. Looks like it’s back to the gym after all…

Top Settlements

Remember Mayberry RFD? “America’s Happiest Hamlet,” according to the trailer. Well, there’s something of that sentiment about this settlement. Maybe because the good guys won after all. Finally, after almost 10 years of litigation, a settlement in the Orange County Register unpaid wages class action lawsuit (Gonzalez, et al. v. Freedom Communications, Inc., et al., Orange County Superior Court, Case No. 03CC08756) has been reached.

In the settlement, the directors and officers of Freedom Communications, the parent of the OC Register, agreed to pay $15.5 million—in addition to an earlier $14.5 million paid in 2010—to resolve the paper carriers’ class action against the OC Register. The final $30 million settlement brings closure to litigation that had been ongoing for nearly a decade.

The California labor class action case was initially filed in the Orange County Superior Court in 2003 and then proceeded through the litigation process, culminating in seven weeks of jury trial before it was settled in January of 2009 for $38 million. While the plaintiff newspaper carriers won the battle, Freedom filed bankruptcy on September 1, 2009 and sought to eliminate this obligation through bankruptcy one week before the agreed payment date.

OK—Happy Friday everyone—See you at the bar!

Week Adjourned: 10.30.09

Bit of irony, no?The Age of the Overtime Class Action…

Top Class Actions

Wells, It’s Official… Wells Fargo is now facing a wages and overtime class action filed by technical support staff who allege that they were not paid for time worked in excess of 40 hours per week.

The suit covers all network engineers, operating systems engineers, information security analysts, technical service specialists, systems support analysts, web engineers, web support engineers, web systems engineers, operating systems analysts (level 2), systems QA analysts (levels 2 or 3), computer operations analysts (levels 3 or 4), database administrators (levels 2 or 3), and applications systems engineers (level 3) who worked for Wells Fargo as exempt employees at any time during the past three years anywhere in the United States. It is estimated that about 3,000 employees are eligible to participate in the unpaid overtime class action.

Eligible employees have 75 days to join the lawsuit.

BOA Constricting Overtime Pay? And then there’s Bank of America: A lawsuit was filed this week on behalf of telephone-dedicated employees for unpaid wages and overtime worked at company call centers across the country. The lawsuit was filed as a collective action, which Continue reading “Week Adjourned: 10.30.09”

Week Adjourned: 7.31.09

 

 

orwells-paperback-1984Another busy week…

 

Top Class Actions

“A startling view of life in…2009?” If only the Amazon Kindle had been around when I went to school! A 17-year old has filed a lawsuit against Amazon claiming the company rendered his homework useless when it went into this Kindle and deleted the digital version of George Orwell’s 1984 (gotta love the irony there).

 

Justin D. Gawronski , the 17-year old, alleges that Amazon never indicated to its customers that it had the ability to remotely delete content from Kindles and iPhones. The suit further alleges that this information is relevant to customers when making a decision about whether or not to purchase a Kindle. If this all sounds very familiar—well, that’s because it is. Amazon was hit with a similar class action 2 weeks ago when it originally deleted Orwell’s classics, alleging trespass.

 

Apparently Gawronski’s notes for his homework assignment on 1984 were not only stored in the Kindle, they were linked to specific passages in the book. When the book was deleted his notes became worthless. Uhmm. I wonder if this precedent could be applied to income tax documents…

 

“Wiiilllllmmmaa…!!!!” No, it wasn’t Fred Flintstone calling, but regardless, seems Hartford Insurance may not have heeded the call when policy holders’ filed claims after Hurricane Wilma. Hartford is being sued for not reimbursing its policy holders who made claims as a result of damage caused by the hurricane—unless those customers actually replaced the damaged item(s).  Continue reading “Week Adjourned: 7.31.09”

Week Adjourned: 6.26.09

Top Class Actions

Quiet Company…loud ex-employees? Seems some former Northwestern Mutual (NML) employees missed the “Shhhh!” memo when they worked there. The Milwaukee-based life insurance giant has been slapped with a $200 million class action lawsuit by former employees who allege NML violated the federal Fair Labor Standards Act and California’s overtime and minimum wage laws. Their complaint also states that NML “intentionally and repeatedly” misclassified sales employees as independent contractors: independent contractors are exempt from federal and state wage and hour laws, while full-time employees are not.

Any of this sound familiar? It should. NML was sued on similar allegations in Pennsylvania in 2008. That time around NML won the lawsuit, which resulted in their being able to maintain their financial representatives as ‘independent contractors.’ According to media reports, NML has about 7,000 “financial representatives nationwide.” Be interesting to see if history does repeat itself here.

Fill ‘er kinda up? If you’ve been running out of gas sooner than expected—and I’m referring to propane here, check your cylinder. If it’s from Blue Rhino and AmeriGas, you might be interested to know that they are facing a class action lawsuit over allegations that they reduced the amount of propane provided in tanks sold as ‘full’ without telling their customers. Continue reading “Week Adjourned: 6.26.09”