Class Action Lawsuit

Week Adjourned: 11.9.12 – Hyundai, Kia, 7Up, MoneyGram

The weekly wrap of top class action lawsuits and settlements for the week ending November 9, 2012. Top lawsuits include Hyundai/Kia Motors, Snapple’s 7Up soft drink and MoneyGram scams.

Top Class Action Lawsuits

Less is More: Less truth + Less miles per gallon than advertised = More fraud. At least that’s the math on the consumer fraud class-action lawsuit filed against Hyundai Motor America, Kia Motors America and Kia Motor Company of Korea. The class action was filed after regulators announced the companies overstated the fuel economy for many vehicles they sold in the United States. Now there’s a surprise.

Hyundai Motor Corporation admitted it overstated the fuel-economy estimates after independent tests by the Environmental Protection Agency (EPA) showed a discrepancy. Busted!

The Hyundai/Kia fuel economy class action lawsuit, filed in the U.S. District Court for the District of Central California, seeks to represent all consumers who own or lease Hyundai and Kia vehicles whose EPA fuel economy ratings were less than the fuel economy rating produced by the applicable federal test in that model’s year.

According to published reports, Hyundai will lower fuel-consumption estimates on most Hyundai and Kia models produced in 2012 and 2013. It will reportedly lower estimates by as much as five miles-per-gallon for its Kia Soul Eco, and by one or two miles-per-gallon for most other models.

The automaker apologized to consumers, according to published reports, and blamed the issue on what the South Korean company called “procedural errors” in its testing, which was done by a Korean lab.

The lawsuit was filed for a Seattle woman who purchased a 2012 Hyundai Accent; an Arizona man who purchased a Hyundai Genesis sedan; an Arizona woman who purchased a Hyundai Genesis sedan; and an Illinois man who purchased a 2012 Kia Sorento, all relying on the fuel-economy numbers provided by the car manufacturer.

The lawsuit contends that Hyundai, owned by Hyundai Motor Company of Korea (KSE:005380.KS), and Kia Motors America, owned jointly by Hyundai Motor Company and Kia Motor Company of Korea (KSE:000270.KS), violated California’s Unfair Competition Law, its false advertising law and its consumer legal remedy act. The lawsuit also claims that Hyundai committed a breach of express warranty, and committed fraud and negligent misrepresentation under California Common Law, among other violations.

What’s Up 7UP? A consumer fraud class action lawsuit was filed against Dr Pepper Snapple Group Inc., the maker of 7UP, over allegations the company misleads consumers about the health benefits of an antioxidant used in some varieties of some of the 7UP soft drinks. Antioxidants in soft drinks? What time did you say the tooth fairy was coming?

According to report by the Center for Science in the Public Interest, an advocacy group for food safety and nutrition, Dr Pepper Snapple Group’s advertising and packaging suggest that the 7Up beverages contain antioxidants from blackberries, cherries, cranberries, pomegranates and raspberries, rather than added Vitamin E.

According to the National Cancer Institute, antioxidants help protect cells from damage caused by free radicals, which are unstable molecules associated with cancer.

Thursday’s lawsuit, entitled Green v. Dr Pepper Snapple Group Inc., was filed US District Court, Central District of California, No.12-09567. It seeks class-action status on behalf of purchasers nationwide of the products, a variety of financial damages, and a halt to the alleged misleading advertising.

David Green, a resident of Sherman Oaks, California, and the named plaintiff in the class action lawsuit, alleges he would not have bought the soft drinks had he known their antioxidants did not come from fruit.

7UP Cherry Antioxidant was launched in 2009, and is also available as a diet drink. Other products include 7UP Mixed Berry Antioxidant and Diet 7UP Mixed Berry Antioxidant.

Top Settlements

MoneyGram Scam Busted. This is quite incredible. The money transfer company MoneyGram has agreed to forfeit $100 million and has admitted to wire fraud settling one of the biggest money laundering cases ever brought by the Justice Department.

According to documents filed on Friday, November 9, 2012, MoneyGram admitted that it failed to maintain an effective anti-money laundering program. The scams involved MoneyGram agents tricking customers into wiring money to the agents, who posed as relatives promising large cash prizes. MoneyGram reportedly knew about this, and the victims of the fraud–numbering in the thousands–complained to MoneyGram. However, the company took no action to stop it, instead they processed the transactions for those agents.

Customers reported fraud that added up to at least $100 million, the Justice Department said, and the money from the settlement will be used to compensate the victims. I should hope so.

And on that note- I’ll see you at the bar—time for some real antioxidants! Have a great weekend!

Week Adjourned: 11.2.12 – OTC Medicine, Bayer Aspirin, Burger King

This week’s wrap of top class action lawsuit news includes OTC Medicine expiration dates, Bayer Aspirin, and Burger King discrimination–the top class actions for the week ending November 2, 2012.

Top Class Action Lawsuits

What’s in an Expiration Date? According to three separate consumer fraud class action lawsuits filed this week, a whole lot of questionable motivation.

Filed against Pfizer (which makes Advil), Bayer (which makes Bayer aspirin) and Johnson & Johnson (which makes Tylenol Cold Multi-Symptom medications), the drug expiration date lawsuits allege the drug makers use “unconscionable, unfair, deceptive, unethical and illegal” means to promote the sales of their products. Specifically, the lawsuits claim that the these means involve the utilization of expiration dates to get consumers to throw away products that have passed their expiration dates, even though the companies know “that if stored properly these medications can and do remain chemically stable, safe and effective long after those dates.”

According to the consumer fraud lawsuits, studies by the Food and Drug Administration, Harvard Medical School, and Johns Hopkins University have found 90% of more than 100 prescription and over-the-counter drugs were fine and could be used for as much as 15 years after their expiration dates: this excludes certain drugs like tetracycline, nitroglycerin, insulin, and liquid antibiotics.

The lawsuit claims that the purpose of the expiration dates is “[T]o increase defendants’ sales and profits because consumers have to purchase replacement medications for those they have thrown out.” The class is seeking actual and punitive damages for consumers that purchased products from Pfizer, Bayer and Johnson & Johnson.

Top Settlements

And Speaking of Drug Marketing… A $15 million settlement has been reached in the consumer fraud class action against Bayer regarding allegations of false advertising around certain combination aspirin products that were sold without FDA approval.

The lawsuit, entitled In re: Bayer Corp. Combination Aspirin Products Marketing & Sales Practices Litigation, alleges Bayer violated state consumer fraud and deceptive business practices acts, express and implied warranty statutes, and unjust enrichment laws in connection with the sale and marketing of Bayer Women’s Low-Dose Aspirin plus Calcium and Bayer Aspirin with Heart Advantage.

If you purchased Bayer® Women’s Low Dose Aspirin + Calcium or Bayer® Aspirin with Heart Advantage, you may be a member of the Bayer Heart Advantage Class or the Bayer Women’s Class (collectively referred to as the “Settlement Classes”) – and thus eligible to receive money from the settlement – depending on (1) which Combination Aspirin Product you purchased, (2) whether you purchased it for personal, family or household uses, and (3) when it was purchased. Each Settlement Class only includes purchases of specific Combination Aspirin Products during specific periods of time.

If you purchased one or more of the Combination Aspirin Products for personal, family or household uses then you are eligible to participate in one or both of the Settlement Classes described in this Notice, provided that your purchase occurred during the time periods specified for each Settlement Class.

Class Members of the Bayer combination aspirin class action settlement include US consumers who purchased one or more of the following combination aspirin products for personal, family or household use during the following time period:

Bayer Aspirin with Heart Advantage Settlement Class: Purchase Date: January 1, 2008 to July 20, 2012

Bayer Women’s Low-Dose Aspirin plus Calcium Settlement Class: Purchase Date: January 1, 2000 to July 20, 2012

To learn more about making a claim and to download forms go to the Bayer Combination Aspirin Class Action Lawsuit Settlement at BayerCombinationAspirinSettlement.com.

Convenience Food not so Convenient… A proposed settlement has been reached in a discrimination class action lawsuit pending against Burger King. The lawsuit, brought by individuals who use wheelchairs and scooters for mobility, allege that they encountered access problems at certain California Burger King leased restaurants.

Specifically, the Burger King class action lawsuit alleges individuals who use wheelchairs and scooters for mobility have been subjected to discrimination at the restaurants that allegedly contain unlawful architectural barriers to access. The Burger King ADA lawsuit sought to remove the alleged barriers, and monetary damages for Class Members denied access to restaurants on or after October 16, 2006.

The proposed settlement terms includes a total of $19 million for monetary relief, which will provide an estimated average recovery per class member of over $8,200, after deductions for attorney’s fees and costs.

Burger King Corporation and the restaurant operators deny they did anything wrong. The parties have reached a settlement of this case. It is now up to the Court approve the proposed settlement.

To find out more and to obtain claim forms for the Burger King wheelchair class action, call 1-888-569-9477.

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

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: 10.19.12 – Healthcare Workers, Madden NFL, Chantix

The weekly wrap on top class action lawsuits and settlements for the week ending October 19, 2012. This week’s top stories include Healthcare workers at Maxim Healthcare, Electronic Arts and NFL Madden games and the first Chantix settlement.

Top Class Action Lawsuits

Overworked and Underpaid on Overtime. An overtime class action lawsuit has been filed against Maxim Healthcare Services Inc, by Jas

mine Lawrence, who was employed as a Home Health Aide by the defendant until October 2012.

In the unpaid overtime 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.

Top Settlements

And it’s a Touchdown! The Plaintiffs score a proposed $27 million settlement that’s been reached in a class action lawsuit pending against Electronic Arts. The Electronic Arts settlement, if approved, will apply to anyone who purchased a new copy of an EA Madden NFL, NCAA Football or Arena Football video game between 2005 and 2012 and is an eligible class member.

The backstory—in case you missed it—The Electronic Arts video game antitrust lawsuit was filed in 2008 entitled Pecover v. Electronic Arts, Inc., and alleged that EA violated antitrust and consumer protection lawsuits by holding exclusive license agreements with the NFL, NCAA and AFL to market branded football software. The lawsuit further alleged that the arrangement shut out competitors, enabling EA to charge 70 percent more for “Madden NFL.”

And the skinny on the proposed deal: Class Members of the EA football game class action settlement include all U.S. consumers who bought a new copy of an Electronic Arts’ Madden NFL, NCAA Football, or Arena Football video game for Xbox, Xbox 360, PlayStation 2, PlayStation 3, GameCube, PC, or Wii, with a release date of January 1, 2005 to June 21, 2012.

If approved by the court at the February 7, 2013 Final Fairness Hearing, Settlement Class Members who submit timely and valid claim forms will receive the following CASH benefits:

If you are an eligible Settlement Class Member, your share of the net proceeds of the Settlement will be based upon the number of video game titles you purchased new, as well as the number of Settlement Class Members who submit valid claims.

Valid claims for the purchase of Madden NFL, NCAA Football, or Arena Football video games for the Xbox, PlayStation 2, PC, or GameCube platforms (“Sixth Generation Purchasers”) will be valued at $6.79 per new game purchased, up to a total of eight units ($54.32).

Valid claims for the purchase of Madden NFL, NCAA Football, or Arena Football video games for the Xbox 360, PlayStation 3, or Wii platforms (“Seventh Generation Purchasers”) will be valued at $1.95 per new game purchased, up to a total of eight units ($15.60).

The only way to receive cash benefits from the EA antitrust settlement is to submit a Claim Form either online at EASportsLitigation.com or postmarked no later than March 5, 2013.

Let’s hope this settlement levels the playing field…

Here’s a Bittersweet Ending… A settlement has been reached in a lawsuit against Pfizer and its anti-smoking drug Chantix. The Pfizer Chantix settlement, the details of which remain confidential, was reached just prior to the case going to trial.

The lawsuit was brought by the widow of Mark Alan Whitely, from Minnesota, who allegedly killed himself in November 2007 as a result of taking the controversial drug. The lawsuit alleged that Pfizer failed to sufficiently warn that Chantix could increase the risk of suicide.

FYI—in July 2009, the FDA announced an update to Chantix (known generically as varenicline) warnings, alerting patients to the risk of serious mental health events linked to use of the smoking cessation drug. Pfizer, maker of Chantix, was required to put a Boxed Warning on the Chantix label, highlighting the risk of depressed mood, hostility and suicidal thoughts when using the medication. When the FDA made its announcement in 2009, it had received 98 crude reports of completed suicide associated with Chantix (a crude report means the FDA had not examined each report in depth to ensure there were no duplicates). It had a further 188 crude reports of suicide attempts.

The Whitely lawsuit is reportedly the first of some 2,500 Chantix cases that have been combined in a multidistrict litigation (MDL) in Alabama for pretrial evidence-gathering and the first trials.

The consolidated cases are In re Chantix (Varenicline) Products Liability Litigation MDL 2092, 09-cv-2039 U.S. District Court, Northern District of Alabama (Florence). The consolidated cases are In re Chantix (Varenicline) Products Liability Litigation MDL 2092, 09-cv-2039 U.S. District Court, Northern District of Alabama (Florence).

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

Week Adjourned: 10.5.12 – Suave Haircare, Discover Card, Bank of America

The weekly wrap of top class action lawsuits and settlements for the week ending October 5, 2012. Top stories include Suave haircare, Discover credit card and Bank of America.

Top Class Action Lawsuits

Will Sauve/Unilever Smooth their Way out of This? Unilever, the parent company of Suave, got hit with a defective product class action lawsuit this week over allegations its now defunct Suave Professionals Keratin Infusion 30-Day Smoothing Kit actually ruins your hair. I guess you can’t smooth what you don’t have!

The Suave class action lawsuit was filed by 14 women who all allege they suffered permanent hair damage as a result of using the product. Tonja Millet, one of the plaintiffs in the class action lawsuit, claims the product melted her hair, made it sticky and impossible to comb. Now, that doesn’t really jive with the product advertising, which one Suave Professionals Keratin Infusion 30-Day Smoothing Kit commercial reportedly claimed “…transforms frizzy, unmanageable hair into hair that’s sleeker and easier to style.”

After using the product, Millet said it kinked her hair instead of straightening it. When she called the product’s consumer hotline to complain, she was told that she had likely used the Suave Professionals Keratin Infusion 30-Day Smoothing Kit incorrectly. (Ummm. Should it be on the market in that case?) When she went to her salon a few days later, Millet’s stylist told her that her hair had been chemically melted. As a result, Millet had 10 inches cut off her hair. Talk about a “bad hair day.”

Unilever pulled the Suave Professionals Keratin Infusion 30-Day Smoothing Kit from stores after receiving a greater than expected number of complaints. (What was the expected number?) The kit has since been discontinued. But apparently the story ain’t over.

Top Settlements

Were you “Discovered?” Did you buy into what you thought were free credit card services promoted by Discover Bank between December 1, 2007 and August 31, 2011? If so, you may be interested to learn that the bank has agreed to pay $200 million to settle consumer fraud allegations brought by federal investigators concerning credit card add-ons that consumers were led to believe were free.

After a one year investigation into the telemarketing and sales tactics used by Discover agents, federal investigators found that consumers were misled credit (otherwise known as consumer fraud) into paying for credit card services including credit score tracking, payment protection, identity theft protection and wallet protection.

The $200 million Discover credit card settlement is in addition to a class action lawsuit settlement of $10.5 million agreed last year by Discover, and a $2 million settlement agreed this year with the Minnesota Attorney General, both of which alleged deceptive marketing practices.

Eligibility for refund would include customers who were charged for one or more of these products between December 1, 2007 and August 31, 2011, and based on the products they purchased and how long they held them. Customers will reportedly be notified directly by Discover Bank.

Additionally, all consumers will receive at least 90 days’ worth of fees paid, minus any refunds they have already received. As many as two million customers will receive full refunds of all of the fees they paid.

In addition to the $200 million refund to consumers, Discover will pay a $14 million civil penalty.

To find out more about the settlement, visit the Discover Card Product Settlement at consumerfinance.gov/pressreleases/discover-consent-order/

Boffo BoFA Settlement. And the big story this week—Bank of America Corp (BoFA) has reached a preliminary settlement in a securities class action lawsuit, which will see BoFA shelling out $2.43 billion to end claims it was not forthcoming with financial information about Merrill Lynch & Co to the banks shareholders, prior to BoFA buying the securities house. (Just what does compel banks to tell the truth—or does that responsibility fall solely to the people who bring lawsuits against them? I digress.)

The BoFA settlement backstory, short version: BoFA agreed to buy Merrill Lynch in 2008, at the height of the financial crisis, however it tried to scrap the deal just weeks after signing but was unsuccessful. Merrill Lynch generated more than US$15 billion of losses and its executives agreed to award employees up to US$5.8 billion of bonuses, according to a report by Reuters.

In December 2008, BoFA’s shareholders approved the Merrill Lynch deal, but once the merger was complete, there was a dramatic drop in BoFA share value, and investors subsequently sued, alleging Merrill’s losses and bonuses should have been disclosed before the vote.

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

Week Adjourned: 9.28.12 – Maybelline, Coppertone, Sallie Mae Student Loans

The class action lawsuit and settlement wrap for the week ending September 28, 2012. Top stories include Maybelline, Coppertone and Sallie Mae.

Top Class Action Lawsuits

A Sticky Situation? (ok— that’s bad—I know). Maybelline is the latest company to face a consumer fraud class action lawsuit. This one alleges the company’s “Super Stay” lipstick and lip gloss don’t last as long as promised. The Maybelline lawsuit accuses L’Oreal SA, the parent company of Maybelline, of falsely advertising the staying power of both products, which sell for about $9 each.

The lawsuit, filed by Carol Leebove, Wanda Santa and Denise Santiago, claims L’Oreal and Maybelline make “misleading, inaccurate and deceptive” advertising claims regarding its “Super Stay 14HR Lipstick” and “Super Stay 10HR Stain Gloss.”

The women claim that while the products are advertised as having “super staying power” that “won’t fade,” that’s not been their experience with the products. According to the lawsuit, “the Super Stay products do not remain on the wearer’s lips for the extended periods as advertised” and “wear off and fade after only a few hours of wear.” One of the Plaintiffs claims the so-called long-lasting lipstick wears off as soon as she eats a meal or has a drink. So, we’ll see if this lawsuit has staying power… as the class has yet to be certified.

Top Settlements

The Proof wasn’t in the Lotion? Merck’s in the news again this week, this time with a settlement of a consumer fraud class action lawsuit over advertising claims made by its Coppertone franchise. The preliminary Coppertone settlement involves Merck ponying up between $3 million and $10 million in damages to the class.

The lawsuit, which was filed in 2003, alleges Merck made false claims about the benefits of its Coppertone sunscreen products. To be fair, Merck inherited the lawsuit in 2009 when it bought Schering-Plough Corp, which owned the popular Coppertone franchise.

As part of the settlement, Merck has agreed that all Coppertone sunscreen products manufactured on or after June 22, 2012 for sale in the United States, its territories and possessions, will not use the terms “sunblock,” “waterproof,” “sweatproof,” “all day” and/or “all day protection” in the label, advertising, marketing or promotion of the products.

When the settlement receives final approval, class members who purchased the Coppertone products at issue will be able to submit a claim worth up to $1.50 for each eligible sunscreen product purchased. Well, that ought to help!

Student Loan Relief? Finally, this week, a class action lawsuit settlement has been agreed between student loan borrowers and a subsidiary of SLM Corp. The lawsuit (Mark A. Arthur, et al. v. Sallie Mae Inc., No. 10-0198, W.D. Wash.), claimed the subsidiary violated the Telephone Consumer Protection Act (TCPA) by making a number of non-emergency autodialed calls and/or automated text messages to the borrowers’ cellular telephones in an attempt to collect on outstanding student loan debt. Nice!

The Sallie Mae settlement terms, which must first receive final approval, include Sallie Mae paying out $24.15 million to the borrowers that received the autodialed calls or automated text messages to their cellular phones by Sallie Mae Inc.

And on that note—I’m going to the bar. Have a great weekend!

Week Adjourned: 9.14.12 – Chipotle Receipts, Family Dollar, Katrina Victims

The weekly wrap of top class action lawsuits and settlements for the week of September 14, 2012.

Top Lawsuits

Rounding Error? Here’s a new twist on an old theme—can you guess? (yup—consumer fraud). But then necessity is the mother of invention—as they say. A federal consumer fraud class action lawsuit was just filed against the restaurant chain Chipotle, alleging their recently introduced practice of rounding up and down on total amounts on customer receipts not only nickel and dimes customers, but also violates various contract, unfair competition and state consumer protection laws.

Apparently the powers-that-be decided that rounding out the totals on customer receipts would alleviate the need for counting out pennies and small change, thereby reducing line-ups. Now that’s creative! I wonder if that would work with the IRS?

The Chipotle receipt rounding lawsuit is filed on behalf of anyone in California who purchased a gargantuan burrito or other item from any of the chain’s state locations between August 30, 2008 and the present.

The lawsuit seeks a court order to stop Chipotle from engaging in its allegedly “deceptive practices” and requests that damages to be paid to all affected class members.

Top Settlements

Family Dollar to Pay its Family of Employees—unpaid overtime, that is. A preliminary settlement has been reached in the unpaid overtime class action pending against the retailer Family Dollar. The lawsuit is brought by over 1,700 New York store managers who allege they are owed overtime wages.

I find it amazing that nearly every week we report on at least one unpaid overtime class action lawsuit—either in this blog or on our site and our Facebook page. Just so we’re crystal clear on what unpaid overtime is—legally—if you work more than 40 hours per week, you are entitled to overtime pay. Overtime laws contained in the United States Fair Labor Standards Act (FLSA) provide minimum wage, overtime, and child labor standards. Overtime rules ensure that employees who are denied overtime pay can file an overtime lawsuit.

The Family Dollar settlement has yet to be finalized and approved in court, but the existing agreement involves the discount retailer making a maximum payment it of $14 million. Get this—Family Dollar has over 7,400 stores throughout the U.S.

Here’s one a long time in coming. This week, Louisiana Citizens Property Insurance Corp agreed to pay $61 million to settle long-running insurance lawsuits stemming from insurance claims made after hurricanes Katrina and Rita.

For all of us whose short-term memories have gone south—way south—Katrina hit New Orleans and surrounding areas on August 29, 2005. As for Rita? She struck in September 2005, and caused $12 billion in damage on the US Gulf Coast.

The settlement will include caps of $4,500 per claim, $150,000 for court costs and $750,000 for administrative expenses.

This settlement follows a $104 million judgment paid by Citizens and will benefit over 18,500 policyholders who sued over slow adjustment claims stemming from hurricane damage. This settlement is meant to cover plaintiffs who weren’t initially covered in July’s settlement.

According to the Associated Press, Citizens CEO Richard Robertson said one lawsuit involves 7,800 claimants and up to 12,000 in the other.

That’s it for this week—See you at the bar, perhaps?

Week Adjourned: 8.31.12 – Enfamil, Dollar Rent A Car, Citigroup

The weekly wrap of top class action lawsuits and settlements for the week ending August 31, 2012. Top stories include an Enfamil lawsuit, Dollar Rent A Car Fraud Allegations and a Citigroup settlement.

Top Class Actions

Sounds too good to be true? You better believe it baby—and pardon the pun. This week, the makers of Enfamil infant formula got hit with a federal consumer fraud class action lawsuit over allegations they falsely advertise that Enfamil and other formulas contain prebiotics that provide immunity-related health benefits for babies and young children.

The Enfamil class action lawsuit, Shenique Route v. Mead Johnson Nutrition Company d/b/a Mead Johnson & Company, LLC, Case No. 12-cv-7350, U.S. District Court, Central District of California, claims that Mead Johnson & Co. mislabel the products and that they do not support a baby’s developing immune system as advertised.

The Enfamil lawsuit targets misleading statements made on the product labels for Enfamil Premium Newborn formula, Enfamil Premium Infant formula, Enfamil A.R. for Spit-Up Infant formula, and Enfagrow Premium Older Toddler Vanilla Milk Drink products. In particular, the lawsuit takes issue with the claims they contain “Natural Defense Dual Prebiotics” and that they “act like breast milk.”

Specifically, the class action lawsuit states: “Enfamil’s ‘Natural Defense Dual Prebiotics’ do not provide health benefits as represented and certainly are not ‘proven’ to do so. Moreover, there is not competent and reliable scientific evidence supporting the Misrepresentation, and any purported link between immune response and prebiotics in the Mislabeled Products is entirely speculative.”

The lawsuit claims, “experts agree that breast milk is immeasurably superior to baby formula in terms of infant nutrition and other health benefits. Therefore, it is misleading for Defendant to advertise the Mislabeled Products as similar to breast milk when formula cannot provide anywhere near the level of benefits provided by breast milk.”

The Enfamil class action lawsuit is brought on behalf of all U.S. consumers who purchased the mislabeled Enfamil products listed above for personal or household use. It is seeking damages, restitution and more for several alleged violations, including violation of California’s False Advertising Law, Unfair Competition Law, and breach of express and implied warranties.

Being taken for a ride?…Dollar Rent A Car is facing a federal consumer fraud class action lawsuit over allegations that the car rental company cheated customers out of millions of dollars by signing them up for insurance and other services they declined. Oh, the insurance—you know—that endless fine print that needs to be signed in less than 3 seconds—i.e. without reading.

The Dollar Rent A Car lawsuit, entitled Sandra McKinnon v. Dollar Thrifty Automotive Group, Inc. d/b/a Dollar Rent a Car, et al., Case No. 12-cv-4457, claims: “Over the last four years Dollar has implemented a systematic program nationwide through which its employees and agents illegally dupe customers into signing up for collision damage waiver (‘CDW’), car insurance and other added services that consumers have specifically declined. This is not an isolated incident with one consumer, but rather a systematic pattern of conduct that has occurred at a number of Dollar locations located throughout the United States.”

“Dollar has received multiple complaints about these issues but incentivizes its employees to make such sales, even by illegal means. If employees fail to obtain an average 30 per day upsales of additional options for three months they may be terminated and not eligible for unemployment,” the lawsuit claims. “Employees are thus incentivized to take advantage of the customers’ irritation, long lines, and misleading or high pressure sales tactics, by just telling them to tap certain lines to decline coverage when it may have the opposite result, or simply forge their signature.”

The class action lawsuit is brought on behalf of Dollar customers who paid for CDW, insurance and other products from Dollar that they specifically declined or did not authorize during the past four years. It is seeking actual, compensatory, statutory and exemplary damages and an injunction barring Dollar from continuing this alleged scheme.

Top Settlements

And the subprime saga continues. This week Citigroup agreed to a securities class action settlement involving a $590 million payout to shareholders who alleged they had been misled about the bank’s exposure to subprime mortgage debt before the financial crisis.

Filed in November 2007, the lawsuit contends that Citigroup together with some of its former senior executives and directors failed to disclose the bank’s huge holdings in securities known as collateralized debt obligations (CDOs) that were tied to mortgage securities until November 2007, when it took a multibillion-dollar write-down on the CDOs. Citigroup later wrote down the CDOs by tens of billions of dollars more.

According to the lawsuit, Citigroup had previously tried to hide the deteriorating value of its holdings through improper accounting practices. “Citigroup used inflated, unreliable and unsupportable marks to keep its CDO-related quasi-Ponzi scheme alive and to give the appearance of a healthy asset base,” the lawsuit states.

The plaintiffs included pension funds in Colorado, Ohio and Illinois. The lawsuit was led by former employees and directors of Automated Trading Desk who received Citigroup shares when they sold the electronic trading firm to the bank in July 2007. The proposed settlement, which was given preliminary approval by Judge Sidney Stein of the U.S. District Court in New York, covers investors who bought Citi shares from Feb. 26, 2007, through April 18, 2008. Shares of Citigroup traded as high as $55 in the summer of 2007. By spring of 2008, its stock price had tumbled by half.

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

Week Adjourned: 8.24.12 – Hotel Deals, Parkay, ACS

The weekly wrap of top class action lawsuits and settlements for the week ending August 24, 2012. Top stories include online hotel reservations, Parkay margarine and ACS overtime.

Top Class Actions

And you thought you were getting a hotel deal? Consumers (that would be you and me) have filed an antitrust class action lawsuit against several online travel sites including Expedia, Inc, Travelocity, Booking.com, a subsidiary of Priceline.com, and the nation’s largest hotel operators including Hilton Hotel, Sheraton Hotels and Resorts, a subsidiary of Starwood Hotels and Resorts Worldwide, and Marriott International, Inc, claiming the two groups conspired to use their market dominance to fix prices on hotel rooms across the country.

The hotel price fixing class action lawsuit, filed on behalf of hotel room purchasers nationally, alleges that the online hotel retailers conspired with major hotel defendants to secretly create and enforce Resale Price Maintenance (RPM) agreements to thwart competition on hotel room prices, especially from price-cutting online retailers.

The complaint contends that the defendants’ unlawful conduct caused plaintiffs and other class members to overpay for their purchases of room reservations and seeks to represent all consumers who have purchased hotel rooms from the online retailer defendants.

According to the complaint, online travel sites account for as much as 50 percent of hotel bookings in the United States and traditionally operate under one of two models. Under the agency model, online retailers charge a service fee to a hotel operator on a transaction basis for booking customers, and that customer pays the hotel directly at a rate set by the hotel.

Under the merchant model, online retailers purchase rooms outright at a negotiated rate from the hotel, and then resell the rooms to consumers at a higher price, increasing or decreasing margins depending on competitive influences.

More recently, a new model has emerged that has cut into the traditional online retailers’ profits, the complaint contends, and has led to the creation of the RPM agreements. In this model, known as the Wholesale Model, third-party companies buy up unsold blocks of rooms at the last-minute and resell them to smaller price-cutting online retailers, eroding the profits of the traditional online retailers.

Knowing hotels cannot afford to lose access to online distribution networks, online retailers allegedly devised an illegal scheme, extracting agreements from the hotels that online retailers may not sell rooms below the RPM rates—even through the wholesale model—on penalty of termination and as a condition of doing business through the online retailers, the lawsuit contends.

The complaint states that the online retailer defendants often use terms like “best price guarantee” to create the impression of a competitive market, but in truth these are nothing more than a cover for the price-fixing conspiracy. The suit alleges that the defendants’ activities violate both the federal antitrust laws, as well as California’s Cartwright Act.

What’s the fat content in Parkay Spray Butter advertising? Higher than indicated, apparently…ConAgra Foods got hit with a consumer fraud class action lawsuit over allegations they intentionally misrepresenting the contents of Parkay Spray butter substitute.

Nebraska resident Pamela Trewhitt filed the Parkay lawsuit claiming that ConAgra falsely marketed the butter substitute as “fat-free” and “calorie-free,” even though it contains 832 calories and 93 grams of fat per 8-oz bottle. The lawsuit also claims that the nutrition information on the label underestimates the amount of fat and calories in the products by using artificially small serving sizes of one to five sprays.

“Defendant knew or should have known that its product was mislabeled and engendered confusion among consumers,” the lawsuit states. It cites numerous Internet complaints about the spray by consumers who couldn’t figure out why they weren’t losing weight until they discovered that Parkay Spray was the culprit. “I was literally taking the top of the ‘fat and calorie free butter’ spray and pouring it on my carefully steamed veggies when I found out that a bottle of that stuff is 90 fat grams. I was going through two bottles a week, and working out and getting fat and unhealthy,” one plaintiff alleges.

The Parkay lawsuit accuses ConAgra Foods of violating the Nebraska Consumer Protection Act, intentional and negligent misrepresentation, reaping ill-gotten profits, and fraud. Plaintiffs are seeking more than $5 million in damages as well as an injunction barring ConAgra from labeling Parkay Spray as fat-free and calorie-free.

Top Settlements

Now here’s a happy ending…Workers employed at an Oregon call center by Affiliated Computer Services Inc, have won a $4.5 million settlement in a wage and hour class action lawsuit. The lawsuit alleged the employees were not properly paid all minimum and overtime wages for all the hours they worked.

Filed in 2009, the lawsuit, entitled Bell, et al. v. Affiliated Computer Services, claims that ACS violated federal and state wage and overtime laws by failing to pay employees for all hours worked, all overtime hours and failing to timely pay final wages to employees at the end of employment.

Eligible class members of the ACS settlement include all employees of ACS who worked as a phone agent or representative in an Oregon call center for the “Retail, Travel, and Insurance,” “BPS,” or “Telecommunication and technology” business groups from April 2, 2005 through April 25, 2012.

The settlement has three classes, under which members may make a claim. They are:

Subclass A: Class Members who were employed by ACS in Oregon as of April 25, 2012 will receive a Settlement Award in the maximum amount of $125, not to exceed 2,000 individuals.

Subclass B: Class Members who were employed by ACS in Oregon and whose employment ended at any time between November 6, 2006 and April 24, 2012 will receive a Settlement Award in the maximum amount of $260, not to exceed 13,000 individuals.

Subclass C: Class Members who were employed by ACS and whose employment ended at any time between April 2, 2005 and November 5, 2006 will receive a Settlement Award in the maximum amount of $50, not to exceed 5,000 individuals.

In order to receive a Settlement Award from the ACS settlement class members must submit a valid Claim Form to the Settlement Administrator postmarked or faxed on or before September 1, 2012. Claim Forms have been mailed to Class Members.

A Final Approval Hearing for the Affiliated Computer Services Class Action Lawsuit Settlement will be held October 22, 2012.

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

Week Adjourned: 8.3.12 – Zynga, JPMorgan, Netflix

The weekly wrap on top class action lawsuits and settlements for the week ending August 3, 2012. Top class action lawsuits include Zynga, JPMorgan and Netflix.

Top Class Action Lawsuits

Ladies and Gentlemen…Check your Portfolios! A lot of securities litigation this week—and at the top of the list is the Zynga securities class action. Not familiar with Zynga? Well, either you’ve been under a rock or you simply haven’t gotten sucked up into their addiction-creating game: FarmVille. Ask your kids…

The Zynga class action lawsuit was filed in the U.S. District Court for the Northern District of California (Case No. 12-cv-124007) on behalf of purchasers of the common stock of Zynga, Inc. (“Zynga” or the “Company”) between February 28, 2012 and July 25, 2012, inclusive (the “Class Period”) and includes those investors who acquired Zynga stock pursuant to and/or traceable to Zynga’s secondary stock offering on April 3, 2012. No class has yet been certified in the above action.

According to the Complaint, Zynga completed a secondary stock offering on April 3, 2012 which enabled Zynga insiders to sell over 43 million shares of their Zynga stock at a price of $12.00 per share for proceeds of approximately $516 million. On July 25, 2012, Zynga announced its financial results for the second quarter of 2012, reporting substantially lower than expected earnings and lowering its 2012 guidance. Following this announcement, the Company’s common stock plummeted 40% in value down to $2.97 per share.

The Complaint asserts violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10(b)(5) promulgated thereunder, against Zynga, certain of its officers and directors, and those who served as underwriters in connection with Zynga’s secondary stock offering. The Complaint alleges that the defendants issued false and misleading statements and omissions, including a false and misleading Registration Statement and Prospectus in connection with Zynga’s secondary offering, about Zynga’s business, operations, and growth prospects.

Top Settlements

More from the Inflated Credit Card Rates Story (the one that never ends…) This week JPMorgan Chase & Co. reached a $100 million settlement of a credit card rate class action lawsuit in which JPMorgan was accused of improperly increasing its credit card minimum payments as a means to generate higher fees. (Could you recite these charges by heart… ya think?)

Filed in 2009, the Chase credit card lawsuit ( re: Chase Bank USA NA “Check Loan” Contract Litigation, Case No. 9-md-2032, U.S. District Court, Northern District of California) alleged the bank decided in late 2008 and 2009 to boost minimum monthly payments for thousands of cardholders from 2 percent to 5 percent of account balances. Cardholders alleged that JPMorgan induced them to transfer credit card balances from other lenders to Chase card accounts, where the bank promised to consolidate their debt into loans with “fixed” interest rates until the balance were paid off.

However, the lawsuit claims JPMorgan increased minimum payments to force credit card holders to either accept higher rates in order to keep the lower payment, to make more late payments and trigger more fees or a 29.99% penalty interest rate, or to close underperforming accounts. This manipulation resulted in millions of dollars in additional fee income from thousands of new cardholders.

According to court documents, lawyers for the cardholders claim that the $100 million class action settlement is 45% of the $220 million in up-front transaction fees that their clients paid for the promotional loans. They called the class action lawsuit settlement an “excellent result” for cardholders, who would recover “a substantial portion of the transaction fees they paid.” The Chase credit card class action lawsuit settlement awaits final court approval.

Netflix Privacy Fix. Netflix made headlines this week due to a proposed settlement in a privacy class action lawsuit that claims the movie rental company unlawfully kept and disclosed customer information, including records on the movies and TV shows its customers viewed. Netflix denies that it has done anything wrong. Of course.

Here are the straight goods: Any current or former Netflix subscriber as of July 5, 2012 and lives in the U.S. or its territories is included in the Settlement.

The Settlement has been preliminarily approved by the United States District Court for the Northern District of California. Netflix has agreed to change its data retention practices so that it separates (known as “decoupling”) Entertainment Content Viewing History (that is, movies and TV shows that someone watched) from identification information for those subscribers who have not been a Netflix for at least 365 days, with some exceptions.

In addition, Netflix will pay $9 million into a Settlement Fund, from which it will make donations to Court-approved not-for-profit organizations, institutions, or programs that educate users, regulators, and enterprises regarding issues relating to protection of privacy, identity, and personal information through user control, pay notice and settlement administration expenses, attorneys’ fees of up to $2.25 million plus up to $25,000 in expenses, and a total incentive award of $30,000 to the Named Plaintiffs (a total of six individuals).

Proposals from potential donation recipients will be sought, and, after consideration, recommendations will be made to the Court. A list of the proposed donation recipients will be posted on the website. Class Members who do nothing will remain in the Settlement and their rights will be affected. If they do not want to be included, they must exclude themselves by November 14, 2012. If they exclude themselves they keep the right to sue Netflix about the claims in this lawsuit.

Class Members who remain in the Settlement can object to it by November 14, 2012.

The Court will hold a hearing on December 5, 2012 to consider any objections, whether to approve the Settlement, award attorneys’ fees, and incentive award. Any Class Member can appear at the hearing, but they don’t have to. They can hire an attorney at their own expense to appear or speak for them at the hearing.

Ok folks –it’s time for poolside libations! See you—well, you know where.