Category: Week Adjourned

Week Adjourned: 12.9.11

A wrap-up of the week’s top class action lawsuits and lawsuit settlements, for the week ending December 9, 2011.

Top Class Actions

Seems Green Mountain may have been Roasting More Than Coffee. The company got hit with a securities class action lawsuit this week alleging it has been cooking the books.

The class action is brought against GMCR, certain of its officers and directors, and the underwriters of the Offering for violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. GMCR, based in Waterbury, Vermont, is a leader in the specialty coffee and coffee maker businesses.

FYI—GMCR produces coffee, tea and hot cocoa from its family of brands, including Tully’s Coffee(R), and manufactures the popular Keurig single-cup brewing systems that use “K-Cup” portion packs.

The lawsuit alleges that, during the Class Period, certain defendants systematically and strategically manipulated GMCR’s revenues. To do so, defendants used one of GMCR’s key fulfillment vendors, M. Block & Sons (“MBlock”), as a captive warehouse to harbor expired, excessively manufactured, or otherwise unsold product. Pursuant to the fraudulent scheme, GMCR improperly booked revenues associated with falsified sales orders for hundreds of millions of dollars in K-Cup and Keurig Brewer products, which resulted in the material overstatement of the Company’s profits, inventory, and product demand levels. GMCR also fraudulently overstated its assets in proportion to its fictitious revenues by carrying the proceeds of phantom sales as assets on its balance sheet throughout the Class Period.

On October 17, 2011, David Einhorn, a prominent activist investor, released a comprehensive report, including witness testimonials by former GMCR and MBlock employees, disclosing GMCR’s misconduct and questionable relationship with MBlock. Following the release of the report, the price of GMCR shares fell approximately 10% from its closing price of $92.09 on October 14, 2011 to close at $82.50 on October 17, 2011, the next trading day, on unusually heavy trading volume.

On October 19, 2011, after Einhorn’s presentation was more widely distributed, the price of GMCR common stock fell another 15% to close at $69.80 on October 19, 2011, on unusually heavy trading volume.

Finally, on November 9, 2011, GMCR announced disappointing earnings results and skyrocketing inventory. On this news, GMCR shares dropped 40%, from a close of $67.02 on November 9 to a close of $40.89 on November 10, 2011, on extremely heavy trading volume.

The securities lawsuit has been brought on behalf of purchasers of the common stock of Green Mountain Coffee Roasters, Inc. (“GMCR” or the “Company”) between February 2, 2011 and November 9, 2011, inclusive (the “Class Period”), including purchasers of GMCR’s common stock pursuant and/or traceable to the Company’s public offering on or around May 5, 2011 (the “Offering”).

Top Settlements

HRT Breast Cancer Settlement. This one was all over the news this week. Three women who filed lawsuits against Wyeth Pharmaceuticals and Pharmacia Upjohn alleging that their diagnoses of breast cancer were directly attributable to their use of Hormone Replacement Therapy (HRT) drugs, were awarded $72.6 million by a jury in Philadelphia hearing their consolidated lawsuit. The jury awarded $20 million to Ms. Elfont, $27.85 million to Ms. Kalenkoski and $24.75 million to Ms. Mulderig, according to the plaintiffs’ attorneys.

The three women filed individual lawsuits in July 2004 against Wyeth Pharmaceuticals and Pharmacia Upjohn, both of which have since been acquired by Pfizer.

The back story, in brief, is that Elfont, 66, had taken hormone therapy drugs for over two years before being diagnosed with breast cancer in 1997. Sixty-eight year old Kalenkoski was diagnosed with breast cancer in 2002, having taken Prempro for over four years, while Mulderig, also 68, took Premarin and Provera for 11 years before she received her breast cancer diagnosis, the PennRecord reported. It’s tragic and shocking.

According to a Bloomberg News report, Pfizer’s Wyeth and Upjohn units have lost 10 out of the 18 hormone therapy cases against them in civil court trials since 2006. Earlier this year Pfizer announced it had settled a third of the pending Prempro cases, it had set aside $772 for related claims, Bloomberg reported.

Another Bank Biggie this Week… Bank of America (BofA) agreed a $315 million settlement in a securities fraud class action lawsuit that alleged the bank was misled about mortgage-backed investments sold by its Merrill Lynch unit. The settlement needs court approval in order to fly–and guess who’s making that decision? US District Judge Jed Rakoff–so all bets are off that this one get’s approved…

The Public Employees’ Retirement System of Mississippi pension fund led the lawsuit, alleging that the investments contained questionable subprime mortgages written by lenders Countrywide Financial Corp., First Franklin Financial, and IndyMac Bancorp – IndyMac went under in 2008.

Ok – That’s enough for this week. See you at the bar.

Week Adjourned: 12.2.11

A wrap-up of the latest class action lawsuits and settlements for the week ending December 2, 2011

Top Class Actions

Are your text messages being traced–by your own hand, so to speak? Ten years ago this would have been the stuff of a James Bond film. Today, sadly, it seems to be business as usual–or more accurately—if you can get away with it…

A group of consumers filed a nationwide class-action lawsuit this week, alleging that smartphone manufacturers HTC Corporation, HTC America, Inc. and Samsung Electronics Co., Ltd use software developed by Carrier IQ, Inc. (“CIQ”) that illegally intercepts incoming text messages and captures users’ key strokes—including those used to compose email and text messages or to dial numbers—without consumers’ knowledge or permission. The lawsuit asks the court to award damages under the Federal Wiretap Act, and prevent companies from including similar software in future smartphones.

The back story—in mid-November, software developer Trevor Eckhart published a video blog illustrating the operation of the CIQ software recording keystrokes, including information sent to secure websites using HTTPS security protocols used in e-commerce and other security-sensitive sites.

After Eckhart published his discovery and documents he found on CIQ’s website, CIQ accused him of copyright violations and threatened legal actions unless he capitulated to the company’s demands. The Electronic Frontier Foundation, a public-interest digital rights watchdog stepped in to defend Eckhart and CIQ later apologized to Eckhart and rescinded its demands.

According to CIQ, its software is embedded on smartphones to allow the company to collect data for the benefit of cellular carriers and device manufacturers, which is important to improving customer experience, such as logging information related to dropped calls. CIQ says its program does not log keystrokes or intercept messages and it does not store or resell the information.

The lawsuit alleges that, in reality, the program does record keystrokes and the content of messages, and could transmit the information to third parties, possibly including information sent to secure websites using HTTPS security protocols used in e-commerce and other security-sensitive sites such as banking.

The complaint was filed on behalf of four smartphone users and names smartphone manufacturers HTC and Samsung as defendants along with CIQ. The lawsuit could be amended to include other smartphone manufacturers that embed the CIQ software on their devices.

The suit, filed in the U.S. District Court for the Northern District of California, accuses the companies of violating the Federal Wiretap Act and California’s Unfair Business Practice Act. The Federal Wiretap Act prohibits the unauthorized interception or illegal use of electronic communications.

Very creepy.

Top Settlements

Could this be a Christmas Bonus? Borders Group Inc has agreed to settle an employment class action lawsuit brought by 198 former employees over Borders’ alleged violations of the Worker Adjustment Retraining and Notification (WARN) Act.

Borders, unfortunately, is in the last stages of liquidation, but has agreed to pay $240,000 as settlement to the former employees who claim they were laid off without sufficient notice, violating federal regulations. After legal fees are deducted, reports indicate that each plaintiff could receive $797. The lawsuit was filed by former employees of Borders’ Ann Arbor headquarters, led by an employee named Jared Pinsker. According to the settlement filing, the parties agreed to settle their dispute to avoid a protracted and costly legal battle.

Borders, which finished closing its stores and liquidating its inventory in September, filed for Chapter 11 bankruptcy protection in February. The company converted its case into a Chapter 11 bankruptcy liquidation in July. A U.S. bankruptcy judge in Manhattan must approve the settlement. Fingers crossed on this one.

Citigroup Settlement Update. Here’s an update on a proposed settlement we wrote about in late October, involving Citigroup and allegations of investor fraud. Judge Jed Rakoff, of the infamous New York Southern District, has rejected a proposed $285M settlement offered by Citigroup to end an civil complaint brought by the Securities & Exchange Commission (SEC) over allegations that they defrauded investors through highly risky mortgage-backed investments. The specific transaction referred by the SEC involved a $1 billion portfolio of mortgage-related investments. (Anyone seen “Margin Call”?)

According to a report by Forbes, “Rakoff is a critic of the custom that allows firms to use their pocketbook to settle charges rather than admitting guilt, and said there is a public interest in finding out the truth.” Consequently, Rakoff has scheduled a trial, for July 16, 2012. However, the SEC and Citi could bring a settlement to the table prior to that, again pending judge’s approval, which, if approved would keep the case out of court. Me thinks an example may be made here.

Ok–That’s enough for this week. See you at the bar.

Week Adjourned: 11.26.11

A wrap up of the week’s leading class action lawsuits and settlements – November 26, 2011

Top Class Actions

Do you know who’s got your personal information? An unfair business practices class action lawsuit has been filed in the Southern District Court of Florida against Best Buy Corporation for violating the Drivers’ Privacy Protection Act or “DPPA”, a federal statute that protects the privacy of personal information assembled by State Department of Motor Vehicles (DMVs).

The lawsuit alleges Best Buy has established a business practice of taking, storing, using and/or sharing customers’ personal or highly restricted personal information, without consent, when customers make a normal return of Best Buy merchandise. Their receipt indicates that Best Buy “tracks exchanges and returns … and some of the information from your ID may be stored in a secure, encrypted database of customer activity that Best Buy and its affiliates use to track exchanges and returns.”

The DPPA specifically prohibits Best Buy’s conduct and was instituted to protect consumers from abuses such as identify theft and stalking, which often result when information is unsecured and improperly stored. The class action alleges that Best Buy’s retention of data accessed on a driver’s license is not “use in the normal course of business” as described by the DPPA.

Top Settlements

What’s that old adage—if it sounds too good to be true… Power Balance LLC, the company that made Power Balance bracelets, has reportedly settled a consumer fraud class action lawsuit this week for $57.4 million and filed for federal bankruptcy protection. The details and amount of the Power Balance settlement remain to be confirmed, although it’s all over the Internet.

The company was sued over allegations of misleading advertising, advertising that allegedly claimed the hologram-embedded rubber bracelets enabled the wearers to “achieve their best,” a statement that begs the question—best what? Best outlandish claim? Possibly. Although the company claims there’s science to back up the statement. I have one word—and it’s “placebo.”

About time: Merck Vioxx settlement. There’s not much that’s funny about this. Merck, Sharp & Dohme has agreed to pay $950 million to resolve criminal charges and civil claims related to its promotion and marketing of the painkiller Vioxx (rofecoxib), the Justice Department announced. The FDA approved Vioxx for three indications in May 1999, but did not approve its use against rheumatoid arthritis until April 2002. In the interim, for nearly three years, Merck promoted Vioxx for rheumatoid arthritis, conduct for which it was admonished in an FDA warning letter issued in September 2001.

Merck is also entering into a civil settlement agreement under which it will pay $628,364,000 to resolve additional allegations regarding off-label marketing of Vioxx and false statements about the drug’s cardiovascular safety. Of the total civil settlement, $426,389,000 will be recovered by the United States, and the remaining share of $201,975,000 will be distributed to the participating Medicaid states. The settlement and plea conclude a long-running investigation of Merck’s promotion of Vioxx, which was withdrawn from the marketplace in September 2004.

The parallel civil settlement covers a broader range of allegedly illegal conduct by Merck. The settlement resolves allegations that Merck representatives made inaccurate, unsupported, or misleading statements about Vioxx’s cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government. It also resolves allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug. Finally, like the criminal plea, the civil settlement also recovers damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.

Ok—That’s the week that was. Hope everyone had a wonderful Thanksgiving!

Week Adjourned: 11.19.11

Weekly wrap up of class action lawsuits and settlements for the week ending November 19, 2011

Top Class Actions

Under-performing, under investigation and in trouble–that could be the new tag line for Olympus, who got served with a securities lawsuit this week. And, to make matters worse for the Japanese manufacturer of imaging equipment–they are now under investigation by the SEC and FBI. Nice. That ought to keep them up at night…

The securities class action lawsuit was filed against Olympus Corporation (“Olympus”), on behalf of purchasers of Olympus American Depository Receipts (pinksheets: OCPNY, OCPNF) between November 7, 2006 and November 7, 2011, inclusive (the “Class Period”).

According to the lawsuit, Olympus falsely represented its finances for over five years and hid large losses by characterizing them in its financials as “fees” paid to investment advisers for work on corporate acquisitions.

Olympus’ false statements and material omissions, according to the lawsuit, artificially inflated its stock price and investors suffered heavy losses after Olympus disclosed the truth about its financial statements on November 7, 2011. Investors’ American Depository Receipts dropped dramatically from $13.72 on November 7, 2011, the last day of the Class Period, to $9.05 on November 8, 2011, or 34%. Olympus’ top executives resigned in what has become a financial scandal in Japan.

Recently, on its webpage, Olympus admitted discovering that it had been wrongfully “engaging in activities such as deferring the posting of losses on investment securities.” Olympus offered its “deepest apologies” to shareholders for the “inconvenience” caused by the fall of its share price. Uh–I don’t think an apology is going to cut it in this instance…

Top Settlements

Wal-Mart Netflix Antitrust Lawsuit News…A potential settlement agreement looks possible in an antitrust class action lawsuit brought by current and former Netflix customers against Wal-Mart and Netflix. Emails were recently sent out announcing that Wal-Mart wants to settle. Netflix has decided to continue its fight. Really?

The potential settlement would see Wal-Mart pay $27.25 million in cash and gift cards. The Wal-Mart settlement class includes anyone in the U.S. or Puerto Rico who paid a Netflix subscription fee for DVD rentals from May 19, 2005, through September 2, 2011. More details on the lawsuit are available at OnlineDVDclass.com.

FYI–in case the details of the Wal-Mart – Netflix lawsuit don’t immediately come flooding back to mind…(because it was filed in 2009 maybe) the allegations are basically: “This antitrust class action arises out of a conspiracy among defendants Netflix, Wal-Mart stores, and Walmart.com to divide the markets for the sales and online rentals of DVDs in the United States in order to avoid competition, monopolize, and illegally restrain trade in at least the online DVD rental market.”

Oracle Overtime Lawsuit Preliminary Settlement…Ah–this old chestnut, again. A California unpaid overtime class action lawsuit brought against Oracle reached preliminary settlement through a court in California last week, to the tune of $35 million.

The plaintiff class includes some 1,725 Oracle employees who alleged that they were not paid overtime and meal allowances. The suit was filed by quality software assurance engineers, customer support engineers and project managers who worked for Oracle and Peoplesoft in Redwood City and Pleasanton from 2003 to 2006.

According to California County law, staff working more than eight hours a day or 40 hours in a week are eligible for time-and-a-half. However, Oracle incorrectly classified the three groups of workers as administrative roles, making them exempt from the payments.

Oracle did not change its overtime policy for customer support engineers and project managers until 2007, though quality assurance engineers still do not qualify for overtime and the settlement for them extends to November 2010. A final hearing is set for March and will allow any workers to raise objections or go after individual claims against the software giant.

Ok–That’s enough for this week. See you at the bar. Bottoms Up!

Week Adjourned: 11.11.11

The weekly wrap up of Class Action Lawsuits and Settlements for the week ending November 11, 2011.

Top Class Actions

We’re Mad about Madoff! Still. Again. No kidding. Only this time someone’s naming a bank. Two former Bernard L. Madoff investors have filed a proposed consumer fraud class-action lawsuit against JP Morgan Chase & Co, claiming the banking giant was complicit in aiding Madoff in orchestrating the Ponzi scheme that robbed investors of more than $65 billion.

The lawsuit comes after a similar suit filed by the trustee appointed to represent Madoff’s victims was dismissed. The court ruled that the case filed by Irving Picard lacked standing, holding those claims belonged exclusively by the victims of Madoff’s fraud.

Among the allegations leveled in the lawsuit, investors charge that JP Morgan operated as Bernard L. Madoff Investment Securities LLC’s (BLMIS) primary banker for more than 20 years, and were faced with many indications that the fund was nothing more than a Ponzi scheme.

The lawsuit details that since 1986, all the money BLMIS collected from unwitting investors passed through JP Morgan in an account known as the 703 Account, where BLMIS co-mingled funds from investors.

The lawsuit contends that JP Morgan should have known that BLMIS’s activities were grossly inconsistent with those of an investment firm through a number of signs of impropriety.

JP Morgan, for example, was required to review a filing submitted by BLMIS to the SEC known as the Financial and Operational Combined Uniform Single Reports or FOCUS. That report, the lawsuit states, contained glaring irregularities that JP Morgan should have reported to the SEC, including factual omissions and errors, such as failing to report any commission revenue.

Beginning in 2006 JP Morgan sold structured investment products related to BLMIS feeder funds to its clients, profiting on those transactions as well. In the course of structuring those products, JP Morgan performed due-diligence on BLMIS and became suspicious that the BLMIS was a fraud but did not report its findings, the lawsuit alleges, but did redeem $145 million from BLMIS and $276 million from BLMIS feeder funds in 2008.

The lawsuit has been filed on behalf of Stephen and Leyla Hill, investors who incurred losses in BLMIS. It claims JP Morgan had knowing participation in a breach of trust, aided and abetted fraud, aided and abetted a breach of fiduciary duty, aided and abetted conversion and received unjust enrichment. The suit seeks damages for the plaintiffs.

Top Settlements

Big Banks paying Big Bucks: But are the bucks big enough? A $410 million settlement was approved this week—you may have seen it splashed all over the news—by a federal judge in Miami, ending an overdraft fees class action lawsuit against Bank of America (BoFA) that claimed the bank charged excessive overdraft fees.

Only thing is there are reportedly more than 13 million current and former customers who will be affected by the decision, customers who used debit cards over the past 10 years. Some reports suggest that most of the plaintiffs will likely only receive a fraction of the overdraft fees they paid. Ummm.

The lawsuit alleged that BoFA processed its debit card and check payments in such a way as to incur more customer overdrafts and consequently more fees. BoFA insists that its system was proper, despite the settlement. The settlement includes an estimated $123 million in legal fees for plaintiff’s lawyers…

Another bittersweet asbestos settlement this week. The widow of a man who died from peritoneal mesothelioma cancer has been awarded a settlement—a “substantial” sum—amount not publicly disclosed as compensation for loss of her husband, to put it bluntly. The settlement, negotiated on behalf of Mrs. Veraldo, was obtained midway through trial.

Mrs. Veraldo sued as executrix of the estate of her late husband, Randy Veraldo. He was 52 when he died in 2009, seven months after being diagnosed with peritoneal mesothelioma cancer, court records show.

Mr. Veraldo was a parts handler at a Teterboro, N.J., warehouse from 1978-85. The job required him to unpack clutch plates delivered on a near-daily basis from various suppliers. The clutch plates were said to contain asbestos, a mineral once widely used in the U.S. as a cheap insulating material until it was found to cause mesothelioma cancer.

Ok—That’s enough for this week. See you at the bar. And on this Veterans Day, a toast to all veterans, living and gone, the world over.

Week Adjourned: 11.4.11

Week Adjourned: the weekly wrap of class action lawsuits and settlements, November 4, 2011

Top Class Actions

Could this mean resolution for thalidomide victims?…New research suggests that thalidomide—a drug that caused thousands of horrific cases of deformities in children—caused far more deformities in the U.S. than were reported during the height of the pharmaceutical crisis of the early 1960s.

Invented by German drug company Grunenthal, thalidomide was widely used throughout Europe during the late 1950s and early 1960s, resulting in thousands of deaths and extreme, disfiguring birth defects when used by women during pregnancy. The drug was never approved in the United States, but the new lawsuit filed late October 2011 alleges that as many as 2.5 million doses of the drug were distributed by more than 1,200 doctors to more than 20,000 people, including pregnant women.

Newly discovered and translated documents reveal that Smith, Kline and French (SKF), now owned by GlaxoSmithKline (GSK)conducted a trial of the drug in 1956 and 1957, but buried the evidence, allegedly resulting in a missed opportunity to save thousands of lives.

Instead, according to the filed lawsuit, brought on behalf of 13 men and women with severe birth defects, SKF concealed the results of its trial from the public, allowing another company, Richardson-Merrell, now owned by Sanofi-Aventis to move ahead with large-scale “clinical trials” that involved more than 20,000 people, including pregnant women.

The lawsuit also claims that conclusions made in the early 1960s about the types of birth defects caused by the thalidomide were incorrect.

According to legal counsel, researchers concluded that thalidomide causes bilateral birth defects, such as two missing or shortened arms or hearing loss in both ears. As a result, babies born with unilateral defects, such as one deformed limb, or hearing loss in only one ear were not deemed thalidomide victims, even when their mothers were given the drug while pregnant.

However, new research involving thalidomide as part of a treatment regimen in cancer patients show that many of the assumptions used in the 1960s are incorrect. The thalidomide lawsuit alleges that this new understanding of the drug means that many individuals who experienced unilateral defects may have been misdiagnosed when their doctors told them thalidomide could not have been the cause.

“Among other things we intend to show in court that thalidomide does not work through a neural mechanism as previously thought, but affects the vascular system,” a lawyer for the plaintiffs said.

The complaint claims that the defendants are either guilty of or liable for a civil conspiracy, failing to report and covering up evidence that thalidomide was harmful, especially when taken during the early stages of pregnancy. The lawsuit also says that the defendants were negligent in continuing to manufacture, test and distribute the drug.

Top Settlements

Motrin SJS Verdict. This is one for the books. Let’s hope it makes a difference. On October 3, 2011, a Los Angeles jury returned a record-setting verdict against Johnson & Johnson and their fully owned subsidiary McNeil Consumer Healthcare for $48.2 million—with pre-interest and cost of judgment it’s expected to reach $60 million. The lawsuit alleged that Motrin caused SJS/TENS or Stevens Johnson Syndrome (SJS), also known as Erythema Multiforme, Leyll’s Syndrome, and in its later stages, Toxic Epidermal Necrolysis (TEN). SJS/TEN is a serious and potentially life-threatening disease that causes large areas of the skin to become detached and lesions to develop in the mucous membranes.

The verdict was based on findings of malice towards the consumers of the over-the-counter drug Motrin, specifically for not putting a warning label on the product that could have spared Trejo’s and others’ health. This is believed to be the first verdict of its kind involving punitive damages associated with this over-the-counter temporary pain reliever.

At age 16, Christopher Trejo, who is now 22 years old, took some Motrin as directed on the label for less than one week, but contracted TEN. It caused a severe inside-out exfoliating reaction affecting all of his mucosal membranes, which is equivalent to second- and third-degree burns over 100% of his body. The TEN reaction also caused severe pulmonary damage, near-blindness, infertility, whole-body scarring and a hypoxic brain injury. Trejo’s abilities to see, hear, smell, taste and touch have been severely diminished.

After hearing the evidence, the jury found that the labeling on Motrin was inadequate and should have been changed years earlier to properly educate and alert consumers to the developing signs of severe reactions, which include skin reddening, rash and blisters. Early detection and treatment of these symptoms can prevent TEN or SJS.

Apple Playing the Same Old tune? Apple, Inc., has agreed to settle a consumer fraud class action lawsuit that could amount to over $50 million dollars in payouts—but before you get all excited know this “Apple has agreed to provide an iTunes® Store credit in the amount of $3.25 to all settlement class members who qualify and submit a valid claim form. ” That’s the skinny.

The lawsuit claimed that Apple advertised and sold gift cards which stated that if one purchased and used the gift card, all songs purchased at Apple’s online iTunes® Store would cost 99¢ per song. The lawsuit further claimed that in April, 2009, Apple raised the price of certain songs at the iTunes® store, yet refused to honor the promised 99¢ price when the gift cards were redeemed. In addition, the company continued to sell iTunes® gift cards with the phrase, “Songs are 99¢” printed on them.

Consumers who were overcharged for iTunes songs while using iTunes® 99¢ gift cards are now eligible to receive an iTunes® Store credit in the amount of $3.25 after completing the simple iTunes® class action lawsuit online claim form. Millions of e-mails are currently being sent to persons who may have used affected gift cards to purchase songs from the iTunes® Store.

You can find out how to make an Apple iTunes lawsuit claim here.

Ok—That’s enough for this week. See you at the bar—don’t forget your iPod.

Week Adjourned: 10.28.11

Weekly wrap of class action lawsuits and settlements for the week of October 28, 2011.

Top Class Actions

Blackout at BlackBerry. Well—it took a while—but it’s finally here—BlackBerry maker Research In Motion (RIM) is facing a potential class action lawsuit over the major service interruption which occurred on October 11, 2011. The consumer fraud lawsuit was filed on behalf of all US consumers who are currently under an agreement and using a BlackBerry device.

According to the legal counsel, although the users’ contracts are through Sprint and not RIM, they pay the company fees through the carrier. The lawsuit estimates that RIM takes in  roughly $3.4 million in revenue per day from the services paid through the wireless carriers. Better SMS this one.

Hey Oreck, when the Light is on the Germs are…where? If all I need to get rid of the common cold or flu viruses is a vacuum—I wonder what untapped potential lurks within my food processor? Oh, hold on a minute…Oreck is facing a class action lawsuit alleging that claims the company makes about its “flu-fighting” vacuum cleaners and air purifiers are false and misleading. Really?

The federal consumer fraud suit claims that Oreck, in its advertising, states its Halo vacuum and air purifier can “eliminate common viruses, germs and allergens, thereby helping to prevent the illnesses they cause.” The lawsuit claims that Oreck “represented to consumers that the products used scientifically proven technology to eliminate common viruses, germs and allergens, thereby helping to prevent the illnesses they cause.” And, Oreck claims its products can prevent colds, diarrhea, stomach upsets, asthma and allergies. “Unfortunately for plaintiffs and the class, defendants’ claims are not adequately supported by credible, scientific testing or other substantiation, and are not true.”

Thelaw suit goes on to state that “… these representations were false, deceptive and inaccurate. As such, Oreck’s actions violated the Magnum Moss Warranty Act (‘MMWA’), breached express warranties made by defendants, breached implied contractual warranties imposed by law, violated numerous California consumer protection statutes, and violated New York consumer protection statutes and common laws.

Top Settlements

Unpaid overtime to be paid – at last. A $4 million settlement has been reached in an unpaid overtime class action against Sutherland Global Servies Ltd.

The lawsuit, brought by call center telemarketers in 2005, (yes – 6 years ago – not kidding) alleged that Sutherland didn’t pay its call center employees the overtime owed.

The lawsuit was originally brought by two Rochester employees of the Perinton-based process outsourcing company, and grew to 10 named employees and hundreds of unnamed workers, all of whom claimed they regularly worked more than 40 hours a week but were not paid overtime.

Although Sutherland denied the allegations, it agreed to a $4 million settlement to be divided among members of the class and U.S. District Judge David G. Larimer gave final approval to the settlement last week, ending the litigation.

Ok—That’s enough for this week. See you at the bar.

Week Adjourned: 10.21.11

The weekly wrap up of class action lawsuits and lawsuit settlements for October 21, 2011

Top Class Actions

Sex discrimination—still? Really? Yup—and this time the company doing the dirty was owned by a woman—Ruth U. Fertel. However, she passed away in 2002, and it looks like things have regressed since then. And the company is….Ruth’s Chris Steak House. Four former and current employees filed a sex discrimination class action alleging they were discriminated against for pay and promotions.

The women’s jobs ranged from national sales manager to bartender, and they brought the suit in October 2010. The United States District Court for the District of Columbia has now granted the Ruth’s Chris Steak House discrimination suit plaintiffs the right to add class action claims to the lawsuit.

The women also allege that they suffered sexual advances in the work environment at the steak house chain, including physical groping, sexual innuendo and retaliation against those who complained or reported sexual harassment. Hey—the meat’s on the plate boys…

Top Settlements

Who says the little guy can’t win? A $160k settlement has been awarded to a former employee of retail giant Target, ending his discrimination lawsuit against the company. Jeremy Schott, who filed the lawsuit, took medical leave in 2004 due to his experiencing a seizure. He was 29 years old at the time. In his lawsuit, he alleged that when he returned to work his weekly hours had been reduced from 17 to eight. The U.S. Equal Employment Opportunity Commission sued Target on Schott’s behalf, alleging a violation of the Americans with Disabilities Act (ADA).

Target’s counsel contended that Schott’s work hours were decreased because of poor performance and a lack of motivation. The parties agreed to settle for $160,000. As part of the settlement Target has agreed to designate an ADA coordinator and implement a policy regarding reasonable accommodations.

Defective Pool Slide Settlement. This is very sad… The widower and child of a young woman who died as a result of a defective inflatable pool slide purchased from Toys “R” Us have been awarded a $20.6 million settlement this week by the judge hearing the personal injury lawsuit.

The accident that took Robin Aleo’s life happened five years ago, when she was just 29 years old. She had an 18-month old daughter at the time. Aleo was at a pool party at a relative’s home when she decided to go down the six foot Banzai Falls slide head first. When she neared the bottom the slide suddenly bottomed out and Aleo hit her head on the edge of the pool, breaking her neck and sending her to hospital unable to breathe on her own and paralyzed. She died at the hospital the following day.

According to a report in the EagleTribune, Aleo is the second person to have allegedly been paralyzed by an incident involving the Banzai Falls slide. According to court records, more than 4,000 of the slides were sold nationwide, without having been tested to see if it met federal safety standards.

Ok – That’s it for this week. See you at the bar.

 

Week Adjourned: 10.15.11

Top Class Actions

Well, Hello…Something fruity is going on here—or not as the case may be… A proposed consumer fraud class action lawsuit has been filed against General Mills alleging the company misled consumers about the nutritional and health qualities of its fruit snacks, specifically Fruit Roll Ups, Fruit by the Foot, Fruit Gushers, as well as other similar products.

The lawsuit claims that between October 15, 2005 to the present (the “class period”) General Mills engaged in a widespread marketing campaign to mislead consumers about the nutritional and health qualities of its Fruit Snacks. Specifically, the suit states, “Defendant made misleading statements that its Products were nutritious, healthful to consume, and better than similar fruit snacks.”

The suit further states “In fact, Defendant’s Fruit Snacks contained trans fat, added sugars, and artificial food dyes; lacked significant amounts of real, natural fruit; and had no dietary fiber. Thus, although the Products were marketed as being healthful and nutritious for children and adults alike, selling these Fruit Snacks was little better than giving candy to children.” Umm…Maybe suitable for Halloween treats?

Top Settlements

Did your internal capacitor prematurely fail? No—I mean the one in your TV! On October 3, 2011, preliminary approval was granted to a proposed defective product class action settlement with Philips Electronics North America Corporation (“Philips”).

The settlement proposes to resolve lawsuits that allege certain Philips and Magnavox televisions suffer from a defect that causes internal components (called capacitors) to prematurely fail, resulting in the televisions becoming inoperable. The proposed settlement would entitle qualifying settlement class members, who purchased new or received as a gift new one of the Philips or Magnavox plasma televisions with the model numbers listed below, to monetary benefits or vouchers.

The model numbers of the Philips and Magnavox plasma televisions included in the proposed class action settlement are:

50PF9830A/37 42PF9630A/37

50PF9731D/37 42PF7321D/37

50PF9631D/37 42PF7320A/37

50PF9630A/37 42PF7220A/37

50PF9431D/37 42PF5321D/37

50PF7321D/37 50MF231D/37

50PF7320A/37 50PF7220A/37

In addition, only those television sets with a serial number reflecting a manufacturing date between November 1, 2005 through December 31, 2006 qualify for participation in this settlement.

The Court has scheduled a hearing in December to determine whether to grant final approval to the settlement.

To be eligible to receive the benefits made available pursuant to this settlement, class members must submit to the claims administrator a claim form that is postmarked by February 28, 2012.

To obtain additional information about the settlement, to determine whether your television qualifies, or to obtain a claim form, you can visit the settlement website at PhilipsPlasmaTVsettlement.com. You can also contact the settlement administrator by calling (855) 477-4407, or by writing to Philips Plasma TV Settlement, c/o Dahl, Inc., P.O. Box 2061, Faribault, MN 55021.

Service gratuity not quite included? This one’s for anyone who ever worked in the service industry and had their tips withheld—and I’m sure there’s no shortage of you out there… A $7 million settlement has been reached by current and past employees of the Cranwell Resort, Spa, & Golf Club in Lenox, ending an employee class-action lawsuit that alleged the resort’s management illegally withheld the workers tips. 

If the settlement receives final court approval, approximately 700 food, beverage, and spa employees who worked at the upmarket Berkshire resort between 2001 and 2011 will share in the money. A final settlement hearing is scheduled for November 2011. This is the second of two lawsuits, filed over four years ago, claimed that the employees were not paid the full service charges that were added to hotel bills, which is against state law.

Ok—That’s it for this week. See you at the bar—where I will be repairing my personal, internal capacitor.

Week Adjourned: 10.7.11

Weekly wrap-up of new lawsuits and settlements as of October 7, 2011

Top Class Actions

Ok, this one’s not a Class Action, but it’s news you should know about…Actos (pioglitazone) made the news this week with the launch of a nationwide Actos lawsuit filed by people who have taken the diabetes medication and allege it is associated with the development of bladder cancer. Although the risk for bladder cancer isn’t exactly news, the filing of the lawsuit is—it is not a class action, rather each qualifying individual will seek damages consistent with the merits of his or her individual case.

If you have or are taking Actos and are interested in this suit, you must meet basic criteria including that you have actually taken the drug and developed bladder cancer, sadly.

Actos is one of the most popular diabetes drugs in the world. Recently, however, studies have shown that Actos use is linked to serious side effects, particularly bladder cancer. These studies show that the longer one takes Actos, the greater the risk of developing bladder cancer. As a result of this mounting scientific evidence, the FDA has issued warnings regarding Actos and bladder cancer. In France, the French Agency for Safety of Health Products recalled Actos from the market on June 9, 2011. Regulators in Germany recommended that physicians not prescribe it.

FYI—time limits exist that limit the amount of time you have to join the lawsuit, so if you think you may have a claim check it out now.

Top Settlements

Oh Happy Honda—or not—as the case may be. A federal court has approved a settlement of a defective product class action filed against American Honda Motor Co. Inc. The lawsuit alleges that Honda failed to fix or warn customers that the sun visors in its hugely popular Honda Civics were defective.

Specifically, the Honda Civic sun visor lawsuit claims that defects on the sun visors on some Honda Civics caused the visors to split apart, possibly impairing their function. The class action lawsuit also alleges that Honda should have corrected the defective sun visors or should have disclosed the defect at the time of sale. Yes, but that would have been the right thing to do.

You are eligible as a class members of the “Honda Civic sun visor class action” if you are a U.S. resident who are current or former owners or lessees of one of many Civic models, including but not limited to all 2006-08 Civic. There are MANY more models which you can check out here. 

Here’s another relevant detail, as part of the settlement, Honda has agreed to extend the warranty on sun visors on Class Vehicles to seven years or 100,000 miles, whichever first occurs. Wait—there’s more—Honda has also agreed to reimburse Class Members for out-of-pocket expenses incurred prior to the Effective Date of the settlement for the repair or replacement of a sun visor or sun visors on Class Vehicles. If you are a class member, you are eligible for a cash reimbursement if:

  • The Class Member has paid out-of-pocket to repair or replace the sun visor or sun visors in his or her Class Vehicle prior to the Effective Date of the settlement;
  • The cost of repair or replacement was not previously reimbursed by insurance, warranty, or goodwill; and
  • The Class Member mails a claim form within two years from the date of the sun visor repair or replacement, or within 90 days of the Effective Date of the settlement, whichever period of time is longer.

Another one for the books—the real estate trust Dynex Capital Inc, has agreed to pay $7.5 million to settle a New York class action lawsuit over securities in the sale of bonds backed by thousands of loans on manufactured homes.

In March 2011, U.S. District Judge Harold Baer issued one of the few decisions to ever have certified a class of investors pursuing federal fraud claims in connection with the sale of asset-backed bonds. The case is an important one for investors because it provides a road map for prosecuting fraud claims involving other asset backed bonds on a class-wide basis.

The lawsuit was filed in 2005 by Teamsters Local 445 Freight Division Pension Fund and Dynex lost multiple attempts to have the case thrown out of Court. The settlement still must be approved by Judge Baer of the U.S. District Court, Southern District of New York.

The Plaintiff charged that Dynex, its subsidiary Merit Securities Corp., and senior executives at both companies lied about the quality of mobile home loans that were collateral for bonds sold as Merit Series 12-1 and Merit Series 13 from Feb. 7, 2000 to May 13, 2004.

According to the lawsuit, Dynex and its representatives made misleading statements that artificially inflated the value of the bonds, understated the amount of delinquencies and repossessions affecting the bonds and violated its own publicly stated underwriting guidelines in making poor-quality loans. Defendants also made false statements about the deteriorating performance of the downgraded bonds because the company was scrambling to protect itself in the midst of a dramatic financial collapse, the lawsuit charged.

Ok—That’s it for this week. See you at the bar—that’s poolside baby.