Category: Week Adjourned

Week Adjourned: 4.1.11

Top Class Actions

Rosetta Stone getting a lesson in securities litigation? The manufacturer of learning software—and apparent sure-fire way to win the girl (see ad above), got hit with a securities lawsuit this week, over allegations that they’re not playing straight, so to speak. The suit, which has not yet been certified, was filed on behalf of purchasers of the common stock of Rosetta Stone, Inc. (“Rosetta Stone” or the “Company”) (NYSE: RST) between February 25, 2010 and March 1, 2011, inclusive (the “Class Period”).

The specific allegations? Violations of federal securities laws—such as the free and lower-priced competitive product offerings, not a temporary reduction in advertising, was having a material adverse effect on the Company’s Class Period revenues, particularly U.S. consumer revenues; and that the favorable sales booking numbers Rosetta Stone reported during the Class Period was the result of key retail partners maintaining inventory of the Company’s products well above historic levels; and—oh yes—there’s more—that Rosetta Stone’s reported sales bookings and revenues during the Class Period were the product of manipulation.

However, on February 28, Rosetta Stone announced fourth quarter revenue of $74.3 million, a 5% decrease from the prior year, net income on a GAAP basis of $5.0 million, a decrease of 60% from the 2009 fourth quarter. On this news, RS’s shares fell $1.77 to $13.19 per share. Let’s hope it’s not just the shareholders who get an education from this. 

Top Settlements

$17 million for workplace asbestos exposure. Sounds nice—but maybe not so much. As big Continue reading “Week Adjourned: 4.1.11”

Week Adjourned: 3.25.11

Top Class Actions

Faulty Wiring? There were some interesting suits this week. Among them—this one against AT&T, filed by an 82-year old woman who alleges that the $9.99 she pays every month for an “Inside Wire Protection Plan” is a service she doesn’t need and can’t use because she lives in an apartment building in which she doesn’t own the interior telephone wires. Therefore, she has no legal responsibility for maintaining them and therefore she should not have to pay the $9.99 demanded by AT&T. Who knew? 

But that seemingly small monthly charge adds up to about $120 a year, and it’s being paid by thousands of AT&T customers across the US, who are in similar situations to Gloria Girton.

Consequently, Ms. Girton has filed a class action in the US District Court for the Eastern District of North Carolina to end AT&T’s unlawful practice of wrongfully billing for such plans nationwide. Outside of North Carolina, they are known by such names as “Wire Pro,” “Inside Wire Maintenance,” and “Home Wire Protection.”

AT&T is illegally charging many of its land line customers who live in multi-tenant facilities for unnecessary wire insurance, the plaintiff’s lawyers state. “The company knows from prior litigation and its own internal investigations that this charge is improper, yet it continues to charge building tenants like Gloria for these worthless plans through deceptive sales actions that defraud and rob them of their hard-earned financial resources. We believe she and the class have sustained damages of at least $10 million and very likely much more,” says plaintiff’s counsel.

The complaint asks for the certification of two classes, a North Carolina class and a nationwide class, each comprised of all residents of residential or commercial property who had an AT&T account at any time in the past four years and were not responsible for the maintenance of their residence’s interior wire, but were charged a fee for an Inside Wire plan. You go Gloria! 

Top Settlements

Press Brake Operator Verdict. A laborer in Florida has won his personal injury case with the jury awarding him a $3.3 million verdict. What happened? Sadly, he who suffered amputation of all the fingers on his right hand—which is the hand he wrote with. It was a workplace accident, involving a mechanical press in 2005.

Phiteau Dalien had his hand caught in a vintage 50-ton mechanical press brake he was operating for List Industries Inc. As a result his hand was crushed and he and he had to have his fingers amputated. He was 33 years old at the time. He underwent a subsequent surgery to build a partial thumb, and he may need another operation to try and rebuild his other fingers.

In his suit, Dalien alleged that the outdated machine he was operating for List Industries lacked safety features and that a language barrier prevented him from being properly trained. List Industries claimed the accident was caused by operator error. Of course they did. But the jury wasn’t buying. 

Getting Royally Stiffed? Not any more for about 25,000 landowners in Pennsylvania. They brought a class action brought against Texas-based Range Resources in 2008 over allegations that the company was miscalculating their royalty payments associated with the company’s current drilling in the Marcellus Shale region of the state. Land which these people presumably own. The suit also alleged that Range Resources improperly withheld management fees from royalties and failed to account to landowners for money it had collected from selling oil and residual by products of gas processing. 

A  settlement has now been approved by a federal judge and the terms dictate that Range Resources, will pay the landowners roughly $1.3 million now and subsequently increase the royalty payment to a maximum of $16.6 million over the next five years, according to court documents. Well Done.

Okee dokee—that’s it for this week. See you at the bar.

Week Adjourned: 3.19.11

Top Class Actions

Who’s watching you while you’re watching video? This week in California, a class action was filed in federal court against Netflix alleging the movie rental company is violating the federal Video Privacy Protection Act (VPPA), the California Customer Records Act, and Unfair Competition Law, as well as charging the company with unjust enrichment, and breach of fiduciary duty. Hmm. No shortage of charges there.

What’s it all about—Alfie? (sorry, couldn’t resist). Well, according to Virginia resident Peter Comstock, who filed the proposed class action, the specific allegations are that Netflix keeps digital records of each subscriber’s choices of streaming video and video rental and then uses that data to make recommendations for other movies that customers might be interested in viewing. The lawsuit states that this kind of tracking is “hardly surprising,” but adds that “subscribers do not realize (is) that Netflix maintains this video-viewing information, along with confidential subscriber payment information…in its databases long after subscribers cancel their Netflix subscription.”

The suit is seeking $2,500 per violation of the VPPA, $3,000 per violation of the Consumer Records Act, and further punitive damages. This could end up being  a very costly exercise in record-keeping. 

Top Settlements

Large Asbestos Verdict in Virginia. This is one of those verdicts that, while good, stems from deeply unfortunate and avoidable circumstances. A Newport Circuit Court jury delivered a $25 million verdict to a former shipyard employee as settlement of his asbestos case. The verdict, against Exxon Mobil, represents one of the largest jury verdicts ever handed down in Virginia for a personal injury case.

The jury awarded 72-year old Bert Minton $12 million in compensatory damages, $12.5 million in punitive damages, and $430,961 in medical bills. The jury awarded interest on the medical bills, bringing the total verdict to $25 million.

Minton’s story is not uncommon. He had worked as a repair supervisor on commercial vessels at the Newport News Shipbuilding facility between 1966 and 1977, and worked as a ship fitter prior to his time at Newport. He reportedly worked on 17 Exxon commercial oil tankers while employed at the ship yard.

And that work exposed him to asbestos fibers, which he inhaled. So now, decades later, he has been diagnosed with mesothelioma. According to Minton’s lawyer, Minton now has a life expectancy of roughly two years and faces a painful death. 

First Group gets Lesson in Fair Credit. This is a good news story for the working guy—always nice to have one of those on a Friday. A tentative $4.3 million settlement has been approved in the class action against First Group America. The national suit, brought by employees of sister companies First Student, which employees school bus drivers, and First Transit, which employs mass transit drivers, claimed the companies obtained criminal background checks on drivers and job applicants without the job applicants and employees written permission, which is a violation of federal law.

Makes you wonder how many other companies are doing the same thing…

In any event, the settlement is reportedly the largest ever regarding employment-related Fair Credit Reporting Act claims. Ex-employees of First Transit or First Student, who were terminated as a result of the unauthorized background checks, and who decide to participate in the proposed settlement, could receive potential payment of between $2,000 and $4,000 per unauthorized background check.

The terms of the settlement also stipulate a payment of $750 for each worker who was terminated by First Transit or First Student based on a criminal background check report without first receiving a copy of that report.

For workers who continued to work for either of the companies but who were the subject of unauthorized background checks, a payment of between $150 and $300 may apply.

Okee dokee—that’s it for this week. See you at the bar…

Week Adjourned: 3.11.2011

Top Class Actions

Oh those Groupon coupons—you know—the notice you find in your email every morning offering amazing deals on everything from restaurant meals to hotel stays to my personal favorite—half price pedicures… but are they too good to be true? Some people seem to think so, in fact they believe Groupon Inc. is violating Illinois state and federal laws that prohibit companies from selling gift certificates with expiration dates.   So, they have filed a federal class action lawsuit against the Chicago-based business this week.  

The suit was filed in the state of Minnesota on behalf of a Washington man who claims he bought a $20 Groupon for a one-month gym membership worth $305, only to have it expire before he could redeem it two months later. Umm…sound familiar?

Not surprisingly, the suit alleges that Groupon and its retail partners reap a substantial windfall from the sale of gift certificates that are not redeemed before expiration. The suit claims that Groupon “preys on unsuspecting consumers” by requiring users to agree to “boilerplate” terms and conditions that include a class action waiver. A class action waiver? Well, that certainly was effective.

Top Settlements

Credit Suisse Ponies Up for Subprime Mortgage Exposure…Credit Suisse Group AG agreed to pony-up $70 million this week, to end securities litigation over allegations that it ‘mislead investors about its subprime exposure and ability to limit losses.’ (My question, is there any financial institution out there that didn’t mislead the public over subprime mortgage exposure?) 

The settlement requires court approval, but if approved it will allow recovery for investors who bought Credit Suisse’s American depositary shares, and U.S. investors who bought Credit Suisse securities in Switzerland, between February 15, 2007 and April 14, 2008.

According to reports by Reuters, on February 19, 2008, Credit Suisse took a $2.85 billion write down and suspended some traders who overstated the value of some assets. Company shares fell 6.6 percent that day. Then on March 20, Credit Suisse said write downs would contribute to a surprise first-quarter loss, and its shares fell 6.4 percent. Surprise? I think the real surprise was getting caught.

This is an extraordinary happy Friday story! This week, Midland Funding LLS agreed to drop over 10,000 debt collection cases, totally some $10.2 million in debt that it currently holds against consumers in the state of Maryland. The agreement was approved by a judge this week. The suit was filed against Midland in 2009 by consumers in Maryland.

Bit of back story—Midland is a subsidiary of the publicly traded Encore Capital Group, which buys and collects consumer debt. The case alleges that Midland “prolonged, illegal, and systematic abuse of thousands of Maryland residents.” Plaintiffs further alleged that Midland was operating as a debt collector without a state license, in violation of state and federal law. Oops. That may explain the sudden bout of corporate good will.

As part of the settlement Midland also agreed not to refile lawsuits or to sell the accounts in which there are outstanding debts. However, Midland will be allowed to contact debtors for payment as long as it follows debt-collection laws. Oh yes—Midland is now licensed to collect debts. Convenient. 

Okee dokee—that’s it for this week. See you at the bar.

Week Adjourned: 3.4.11

Top Class Actions

Glass Ceiling with a $100M Price Tag at CIGNA? Well, this has certainly been a time for discrimination class actions. Filed, that is. Topping the list—Cigna Health Care—based on the number of potential plaintiffs—dollars. This one’s all about gender discrimination—in the form of a hostile work environment and differential treatment of males and females occurs company-wide the suit alleges. 

The complaint, filed by Ms. Bretta Karp, a long-time contracting manager with Cigna, claims that Ms. Karp and other female employees were disriminated against by treating them less favorably than male employees in similar positions and by subjecting all females to intentional, deliberate and wilful discriminatory denials of promotions and pay raises, discriminatory evaluations, disparate terms and conditions of work, harassment, hostile work environments, and other forms of discrimination in callous disregard of their rights.

The complaint further details that CIGNA has created a hostile work environment where male supervisors harass and intimidate female employees, where management has made clear that it favors male employees over women, and where company investigations into complaints made by female employees are either nonexistent or superficial and inadequate.

And the amount sought in damages? $100 million baby—along with litigation costs and Continue reading “Week Adjourned: 3.4.11”

Week Adjourned: 2.25.11

Top Class Actions

Can you pay me now? Verizon Wireless has been hit with a wages and overtime class action this week. Ah—so that’s how they save you money…

Filed by a FiOS field manager, Ulysses Aburto, the suit alleges that Verizon told him and other FiOS field managers that they were salaried employees and therefore exempt from the overtime requirements of California wage and hour laws.

Ah, wait—maybe not… According to the complaint, Aburto and others did jobs that lacked the characteristics of exempt employment and were managers “in name only.” The plaintiffs “do not have managerial duties or authority and should therefore have been properly classified as non-exempt employees,” Aburto claims. This misclassification by Verizon is part of a corporate policy and practice that is “affirmative, willful and deceitful,” Aburto alleges.

And Aburto claims that the company cut costs by refusing to pay and forcing employees to work through mandated meal and rest breaks. Class members work between 20 and 40 hours of overtime per workweek but are not paid for that time, the suit says.

The complaint alleges unlawful business practices, failure to pay overtime or provide accurate Continue reading “Week Adjourned: 2.25.11”

Week Adjourned: 2.18.11

Top Class Actions

Now here’s a hairy situation—(or not…) Merck Frost and its affiliated companies are facing a Canadian class action over allegations that men who used Propecia or Proscar suffered continuing sexual dysfunction as a side effect of treatment.  

FYI—Propecia and Proscar are prescribed as a cosmetic treatment for male pattern hair loss also known as androgenic alopecia. The product monograph discloses that some men may experience sexual dysfunction but states that the symptoms disappear after cessation of the drug.

That, apparently, is not what happened in Michael Miller’s case—he’s the brave man who filed the suit. 

Mr. Miller, who is in his early 20s, was concerned when his hair started to thin in some areas. Completely understandable. So he went to his doctor who presumably prescribed Proscar in the hope that it would stop his hair from thinning. After about a month of use he noticed a drastic change in his behavior, “I lost my interest in sex and I felt anxious in social situations for no particular reason,” he says. While on the drug, his symptoms of sexual dysfunction increased as the Continue reading “Week Adjourned: 2.18.11”

Week Adjourned: 2.11.11

Top Class Actions

Proctor & Gamble in a fix over Fixodent—they got hit with a class action lawsuit this week over allegations that their product caused the plaintiffs neurological illness. 

According to an investigative report by ABC News, the two lead plaintiffs, Mark Jacoby of New York and Anne Coffman of Maine, are both wheelchair bound as a result of being exposed to high levels of the mineral zinc—also known as zinc poisoning. Zinc poisoning interferes with the ability of the body to absorb copper. Both Jacoby and Coffman, and their respective physicians reportedly believe that their health problems are a result of the zinc found in Fixodent.

Just in case zinc poisoning is news to you—a paper published in Neurology in 2008 showed that “Denture cream contains zinc, and chronic excessive use may result in hypocupremia and serious neurologic disease.” In 2009, Proctor & Gamble updated the warning label on Fixodent stating that “prolonged zinc intake may be linked to adverse health effects.” 

Just as an fyi—products linked to the denture cream poisoning also include PoliGrip, and Super PoliGrip. 

Top Settlements

Bet Pfizer had some hot flashes this week. The maker of the hormone replacement therapy (HRT) Prempro, agreed to pay $330 million this week, to resolve claims that the menopause drug caused breast cancer. The settlement brings to an end eight years of litigation including some 2,200 related Prempro lawsuits that alleged Wyeth, the company that developed Prempro and was subsequently bought out by Pfizer, knew of the cancer risk but was not forthcoming about it.

According to Bloomberg, over 6 million women used Prempro and other related menopause medications to treat symptoms such as mood swings and hot flashes. Then, in 2002, results from a large cohort study, The Women’s Health Initiative, showed a link to cancer.

Pfizer reportedly faced over 10,000 lawsuits alleging that Prempro caused breast cancer in its users. The company has settled many of them in the past five months, Bloomberg reports. Those settlements include “8,000 cases consolidated in federal court in Arkansas and other cases in state courts in Pennsylvania, Nevada and Minnesota.”

BofA over its limit on overdraft fees. A federal lawsuit alleging that America’s largest bank charged excessive overdraft fees looks likely to be settled. BofA reportedly states in a recent court filing that it has reached a memorandum of understanding to settle the claims in the suit by paying $410 million. Isn’t that really just giving the money back to the people it was gouged from in the first place? That is, if the settlement is approved in court.

The suit is one of several filed against several banks from plaintiffs in 14 states, which were consolidated in a federal court in Florida. Other banks named in related suits include Wells Fargo and Citibank.

Be interesting to see how this plays out.

In the meantime—I’ll see you at the bar—coz that’s it for this week.

Week Adjourned: 2.4.11

Top Class Actions

Phantom of the iPhone. Do you have a phantom AT&T account? It seems for every new technological gadget that requires connectivity—there’s an opportunity to take advantage. Most recently, AT&T Mobility got hit with a potential class action lawsuit over allegations associated with iPhone and iPad accounts. The suit claims that “AT&T’s bills systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account.” And, the suit alleges that AT&T bills customers on data transactions even when customers have disabled their phones. Doesn’t a transaction require more than one party?—one party in the know?

The named plaintiff, Patrick Hendricks, claims that AT&T’s overbilling “was discovered by an independent consulting firm retained by plaintiff’s counsel, which conducted a two-month study of AT&T’s billion practices for data usage, and found that AT&T systematically overstated web server traffic by 7 percent to 14 percent, and in some instances by over 300 percent. So, for example, if an iPhone user downloads a 50 KB website, AT&T’s bill would typically overstated the traffic as 53.5 KB (a 7 percent overcharge) to as high as 150 KB (a 300 percent overcharge),” the complaint states.

Here’s the kicker—Hendricks also alleges that “Not only does AT&T systematically overbill for every data transaction, it also bills for phantom data traffic when there is no actual data usage initiated by the customer. This was discovered by the same independent consulting firm, which purchased an iPhone from an AT&T store, immediately disabled all push notifications and location services, confirmed that no email account was configured on the phone, closed all applications, and let the phone sit untouched for 10 days. During this 10-day period, AT&T billed the test account for 35 Continue reading “Week Adjourned: 2.4.11”

Week Adjourned: 1.28.11

Top Lawsuits

You Can Ring My Bell-ell-ell…Not. Unsolicited calls—you know the ones—your phone rings—you answer—silence on the other end then a click and some automated message comes on. And now these people are targeting folks through their cell phones. Well, one company at least may be getting its come-up-ance.

A class action lawsuit has been filed against Chase Auto Finance Corp and its parent company, J.P. Morgan Chase, NA on behalf of all persons in the United States who, since 2007, received non-emergency, autodialed calls from Chase Auto Finance on their cell phones, despite the lack of their prior consent. 

Now that’s ringing my bell!

According to the complaint Chase Auto Finance and JP Morgan Chase violated the Telephone Consumer Protection Act (“TCPA”) by using automatic dialing systems to contact cell phone users about vehicle debts without their prior consent.

Ms. Eichner, the woman who filed the suit, alleges that she was repeatedly contacted in the last 12 months on her cell phone about a relative’s car loan for which she had no responsibility. The plaintiff never consented to those calls, nor did she provide the companies with her telephone number. Go get ’em! 

Top Settlements

A Bittersweet ‘Conclusion’.  A $2.5 million settlement has been reached between the estate of Rebecca Riley, and Tufts Medical Center psychiatrist Dr. Kayok Kifuji. Rebecca Riley died at the age of 4 from an overdose of clonidine prescribed by Dr. Kifuji. Her parents, Michael and Carolyn Riley were convicted of first-degree murder and second-degree murder respectively. Kifuji ‘s prescribing of the medications caused widespread outrage for her role with the family and the case revived a nationwide controversy over whether such drugs should be prescribed for children as young as Rebecca.

Rebecca Riley, who died on December 13, 2006, was prescribed clonidine—a high blood pressure medication that can be used as a sedative in children—for ADHD, and Depakote for bipolar disorder.

The settlement will reportedly go into trusts for Rebecca’s older brother and sister, for education and other expenses.

Popular, Inc Ain’t so Popular After All. A settlement was announced this week stating that Popular and other named defendants have entered into two memoranda of understanding in connection with the settlement of five putative securities class actions.

The five class actions were previously consolidated into two separate actions: a securities class action captioned Hoff v. Popular, Inc., et al. and an Employee Retirement Income Security Act (ERISA) class action entitled In re Popular, Inc. ERISA Litigation.

Under the terms of the first memorandum of understanding, which related to the consolidated securities class action, subject to certain customary conditions, including court approval of a final settlement agreement, in consideration for the full settlement and release of all defendants, the amount of $37.5 million will be paid by or on behalf of the defendants (of which management expects approximately $30 million will be covered by insurance). The parties intend to file a stipulation of settlement and joint motion for preliminary approval within 45 days of the execution of the memorandum of understanding.

Under the terms of the second memorandum of understanding, which related to the ERISA class action, subject to certain customary conditions, including court approval of a final settlement agreement, in consideration for the full settlement and release of all defendants, the amount of $8.2 million will be paid by or on behalf of the defendants (all of which management expects will be covered by insurance). The parties intend to file a joint request to approve the settlement.

At this point, the settlement agreements are not final and are subject to a number of future events, including approval of the settlements by the relevant courts. There can be no assurances that the settlements will be finalized or as to the timing of the payments described above.

Ok—That’s it for this week. See you at the Bar.