Consumer Fraud

Week Adjourned: 3.1.13 – Walmart, Budweiser, Apple

The week’s top class action lawsuits and settlements. This week’s highlights include Wal-Mart, Budweiser and Apple.

Top Class Action Lawsuits

If at first you don’t succeed, try, try, try again…Good advice, we hope, for the women who have just filed a regional gender discrimination class action lawsuit against Wal-Mart.

Now, to be clear, Wal-Mart is not unfamiliar with the allegations, as a national gender discrimination and employment class action was filed against the world’s largest retailer only to be dismissed in 2011 by the US Supreme Court. Had that class action gone through, the class of plaintiffs would likely have been in the hundreds of thousands. But it didn’t. So—now, acting on the advice from the Supreme Court, women are filing discrimination class actions by state. The one filed this week is the fifth such regional lawsuit.

Filed in Wisconsin by one current and four former employees, the class action, entitled Ladik et al. v. Wal-Mart Stores Inc., Case No. 13-cv-00123, U.S. District Court for the Western District of Wisconsin, alleges that female employees are discriminated against when it comes to receiving compensation and promotions. The Wisconsin gender discrimination class action lawsuit is seeking to represent female workers employed by Wal-Mart since December 1998.

I’ll show my gender bias and wish them every success!

Hey Bud—this one’s for you! Oh heck yes. This week saw Anheuser Busch, the brewer of the self-proclaimed King of Beers—Budweiser —get hit with several consumer fraud class action lawsuits alleging that it waters down its Budweiser, Michelob and other top-selling beers. Tsk,Tsk. Do not go messing with people’s alcohol content gentlemen.

Filed in Pennsylvania, California and other states, the Budweiser lawsuits allege that consumers have been sold beer that contains less alcohol than advertised on the labels.

Specifically, the complaints allege that Anheuser Busch employs some of the most sophisticated process control technology in the world to precisely monitor the alcohol content at the final stages of production, and then adds additional water to produce beers with significantly lower alcohol content than is represented on the product labels, and depriving consumers of the value they paid for.

The lawsuits are based on information provided by former employees at the company’s 13 US breweries, some in high-level plant positions, according to lead lawyer Josh Boxer (MSN.com). “Our information comes from former employees at Anheuser-Busch, who have informed us that as a matter of corporate practice, all of their products mentioned (in the lawsuit) are watered down,” Boxer told MSN.com “It’s a simple cost-saving measure, and it’s very significant.”

The complaint alleges: “There are no impediments—economic, practical or legal—to AB accurately labeling its products to reflect their true alcohol content. Nevertheless, AB uniformly misrepresents and overstates that content.”

Nina Giampaoli who filed the California-based lawsuit, said “I think it’s wrong for huge corporations to lie to their loyal customers—I really feel cheated. No matter what the product is, people should be able to rely on the information companies put on their labels.”

I’ll drink to that!

Top Settlements

Nothin’ like a kid in an Apple—er, candy—store. This one is for all you parents out there who woke up on morning to find your credit card balance had magically grown—seemingly on its own. But wait—is that the patter of little feet I hear? Could it be the kids buying in-game extras from the Apple mobile apps store that’s the root of the mystery? You betcha!

And this week, Apple magnanimously agreed to pony up some gift cards, no total value given, by the way, in settlement of the consumer fraud class action it’s facing over what could only be described as unfair business practices.

If the Apple apps settlement is approved, parents would receive $5 iTunes gift cards. Wow—pack up the kids, you’re going on vacation!

Ok—here’s the skinny. The lawsuit is brought by parents who allege their children downloaded free games from the Apple mobile app store and then went on to buy in-game extras—effectively charging the cost of the games to their parents—without their parents’ knowledge. In some cases these charges ran into the hundreds of dollars. Yup.

If approved, Apple would build a website for people who wish to make a claim. As well the tech-giant would send e-mail notifications to some 23 million customers. OK, that ain’t chump change.

According to a report by CNN.com parents whose children incurred larger costs and who want more than $5 gift card, must provide proof that a larger amount was spent by their children during any 45-day period. Those who can show more than $30 in purchases may choose a cash refund instead of an Apple credit. Purchases made until the date of the settlement would be eligible for refunds, CNN.com reported.

Bad Apple! What kind of example does that set?

Ok—See you at the bar and Happy Friday!

Week Adjourned: 2.8.13 – Hipster, YoPlus, Ritz-Carlton

Nemo’s coming and your top class action lawsuit & settlement wrap for the week is now live! Latest class action lawsuits for the week ending February 8, 2013 include Hipster, YoPlus and the Ritz-Carlton

Top Class Action Lawsuits

Hipster ain’t so hip after all…at least according to the plaintiffs who have filed an in Internet privacy class action lawsuit against the photo-sharing App. The Hipster lawsuit alleges the company illegally obtained iPhone users’ personal information and contact lists without their permission.

The internet privacy lawsuit, entitled Francisco Espitia v. Hipster Inc., Case No. 13-cv-00432 in the U.S. District Court for the Northern District of California, alleges that a function of the Hipster App found and retrieved subscribers’ personal contacts and other highly sensitive information, including passwords and geo-location, and then transferred the data over unencrypted, publicly accessible data channels to Hipster’s third-party servers. (Maybe they should rename the App “Fetch”).

Specifically, the lawsuit states: “These actions involved the deliberate and intentional circumvention of technical measures within the mobile computing device in order to bypass the technical and code based barriers, including the plaintiffs’ and class members’ privacy settings which were intended to limit access by anyone other than the owner of the device.” Having transferred the users’ contact address data to its remote computing service, Hipster then allegedly proceeded to access and use such data without authorization or consent, according to the lawsuit.

The laundry list? Violations of the Electronic Communications Privacy Act, the Stored Communications Act, the California Computer Crime Law, and the California Invasion of Privacy Act, among other things.

The Hipster lawsuit seeks to represent all US residents that downloaded the Hipster App to their mobile phones from January 1, 2011 to the present.

Very uncool.

Top Settlements

Yo Dude! You may be eligible to share in the YoPlus $8.5 million settlement agreed this week by General Mills. If approved, the settlement would end a consumer fraud class action lawsuit alleging the food manufacturer misrepresented the digestive health benefits of its YoPlus probiotic yogurt. Well, they certainly wouldn’t be the first, and likely, they won’t be the last.

Filed in 2010, the consumer fraud class action lawsuit, entitled J Johnson v. General Mills Inc. et al., Case No. 10-cv-00061, U.S. District Court for the Central District of California, claims that consumers who purchased the YoPlus yogurt products were deceived into paying more for them as a result of General Mills misleading advertising.

In their motion to accept the settlement, the plaintiffs noted “Considering the strengths and weakness of this case, including the amount of potential damages available to the class after trial here and in other jurisdictions around the United States, the settlement represents an excellent result and includes relief for purchasers of YoPlus on a nationwide basis.”

Under the terms of the settlement, consumers who purchased YoPlus will be entitled to $4 per person for each unit they purchased. Not bad, really.

Putting on the Ritz? Em, maybe not. More like this one’s on the Ritz…The Ritz-Carlton that is. This week, the famous hotel chain agreed to pay $2 million in settlement of the Ritz-Carlton overtime class action lawsuit filed by 1,500 (yup—that’s the right number of zeros) current and former employees in California who allege they were not paid overtime wages.

Bottom line—eligible plaintiffs in the California overtime employment class action are for those who either work or worked at Ritz-Carlton hotels in San Francisco, Half Moon Bay and Lake Tahoe at any time from November 2007 on.

And just in case you need the details—the settlement, when approved, will resolve Lambson v. Marriott International, Inc. et al, Case No. 11-cv-06669, U.S. District Court for the Northern District of California, and allegations the Ritz Carlton, a subsidiary of Marriott International, violated California state wage and hour laws.

So—see you at the bar—who’s buying?

Week Adjourned: 1.25.13 – Lance Armstrong, Subway, Southwest Airlines

Top class action lawsuits and settlements of the week, for the week ending January 25, 2013.

Top Class Action Lawsuits

File Under “Fiction”. You would pretty much have to be living on the dark side of the moon not to have heard of the consumer fraud class action lawsuit filed against the publishers of Lance Armstrong’s book “It’s Not About the Bike.” Indeed it’s not.

Filed following the interview/confession with Oprah Winfrey earlier this week, the lawsuit alleges the publishers sold Lance Armstrong’s latest book as fact, when it was fiction. Quelle Surprise!

And, the lawsuit, filed this week in federal court in California, also mentions Armstrong’s other book, “Every Second Counts,” and accuses the cyclist and his publishers of fraud and false advertising.

The lawsuit, filed by Rob Stutzman in federal court in California, also mentions Armstrong’s other book “Every Second Counts, and alleges Armstrong and his publishers are guilty of consumer fraud. Specifically, the lawsuit states “At that time, Stutzman thanked Defandant Armstrong for writing his book and told him it was very inspiring and that he recommended it to friends who were fighting cancer.” Stutzman contends that had he and others similarly situated known Armstrong’s accounts were lies, they would not have purchased the book, or have enjoyed it less.

“Throughout the book, Defendant Armstrong repeatedly denies that he ever used banned substances before or during his professional cycling career,” the lawsuit states. The lawsuit also states that the plaintiffs purchased the book “based upon the false belief that they were true and honest works of nonfiction when, in fact, Defendants knew or should have known that these books were works of fiction.” Well, everyone likes a good story, and this is certainly no exception.

Is Subway selling a Whopper? …instead of a Footlong? We’ll have to wait and see… A consumer fraud class action lawsuit was filed this week against the sandwich chain Subway, alleging it advertises the $5 Footlong sandwiches when they are not a foot long.

The Subway Footlong lawsuit, Pendrak & Farley v. Subway Sandwich Shops Inc., et al., Superior Court for the State of New Jersey, claims the famous sandwiches actually measure between 11-11.5 inches, instead of 12 inches as advertised. (no comment).

The lawsuit further claims that Subway is aware its Footlong sub sandwich is not 12 inches, because sandwich prices are set at the corporate level then sent down the line to the individual franchises. Consequently, Subway is purposefully defrauding its customers by selling so-called “$5 Footlongs,” according to the lawsuit.

Top Settlements

This round’s on Southwest! Yes, indeed—Southwest Airlines reached a tentative settlement of a pending class action lawsuit over drink vouchers. Included in this Settlement are Southwest customers who received a drink coupon with the purchase of a Business Select ticket prior to August 1, 2010, and did not redeem the drink coupon.

Filed in 2011, Southwest Airlines class action lawsuit plaintiffs, Adam Levitt (an attorney himself) and Herbert Malone, alleged the airline’s policy changes around its drink vouchers, which became effective after August 1, 2010, amounted to a breach of contract and made the coupons worthless. The policy change stipulated that while the drink vouchers had no expiration date, they could only be used on the dates voucher holders were traveling. The vouchers were issued to passengers for alcoholic drinks.

Southwest Airlines drinks vouchers changes were brought in because, the airline claimed, passengers were photocopying them to get free drinks.

The settlement includes Business Select passengers who were issued vouchers before August 1, 2010. Based on Southwest’s charges of $5 per alcoholic drink, the settlement may cost the airline as much as $29 million, with some 5.8 million vouchers up for redemption. The final fairness hearing is set for May, 2013.

The proposed settlement includes damages for Class Members who received Southwest drink coupons through the purchase of a Business Select ticket prior to August 1, 2010, but did not redeem those drink coupons for a free drink. Eligible class members must file a claim before September 2, 2013.

So—see you at the bar—and don’t forget your voucher!

Week Adjourned: 1.18.13 – Clinique, Dell, Morgan Stanley, Goldman Sachs

The week’s top class action news–lawsuits and settlements that made the buzz this week. Top stories include Estee Lauder’s Clinique line, Dell computers, Morgan Stanley and Goldman Sachs.

Top Class Action Lawsuits

Speaking of wrinkles—it appears that Estée Lauder has hit one. The maker of Clinique cosmetic and skin care products is the latest to face a consumer fraud class action lawsuit over allegations of false and deceptive marketing practices.

In the Clinique false advertising lawsuit, entitled Margaret Ohayon et al. v. Estee Lauder Inc. et al., Case No. 2:33-av-00001, U.S. District Court for the District of New Jersey, plaintiff Margaret Ohayon alleges Estee Lauder uses deceptive advertising tactics to promote its Clinique Repairwear, Youth Surge and Turnaround collection as having the ability to make wrinkles “disappear,” rebuild firming collagen, and produce other anti-aging benefits.

The lawsuit alleges that if, in fact, the Clinique products could “rebuild stores of natural collagen” or “deliver 63% of the visible wrinkle-reducing power of a laser procedure,” the products would be regulated by the Food and Drug Administration. Not to mention your girlfriends would be all over it—like you could keep the effects a secret—I don’t think so.

The Clinique consumer fraud class action lawsuit is brought on behalf of a proposed class of all consumers who have purchased at least one Clinique product from the Repairwear, Youth Surge or Turnaround collection in the US.

The lawsuit seeks compensatory, treble and punitive damages; restitution; injunctive relief and more for alleged breach of express warranty, unjust enrichment, and violations of the New Jersey Consumer Fraud Act and consumer fraud laws of various states.

Top Settlements

Heads up: Taxing Situation at Dell… An unfair business practices class action lawsuit filed in California against Dell Computer Corp, has reached a tentative settlement totaling $275 million in potential refunds.

The class action lawsuit revolves around the payment of California sales tax on Dell service contracts…read on…

The lawsuit, entitled Mohan, et al. v. Dell, Inc. et al. alleged the Defendants (Dell Inc. f/k/a/ Dell Computer Corp.; Dell Marketing LP (“DMLP”), on its own behalf and as successor by merger to Dell Catalog Sales LP (“DCSLP”); BancTec, Inc.; and Worldwide Tech Services, LLC f/k/a/ QualxServ LLC) improperly charged California use tax on purchases of certain Optional Service Contracts and remitted these taxes to the California State Board of Equalization (“SBE”).

The parties have reached two distinct settlement agreements to resolve the legal action: the Dell Settlement and the SBE Settlement. Under the terms of the respective settlements, which cover purchases made between April 8, 1999 and June 30, 2008, funding for the settlements will be provided by Dell and the California State Board of Equalization. The settlements followed a 2006 trial court’s decision, later affirmed on appeal by the California Court of Appeals in 2008, ruling that optional service contracts sold by Dell were not subject to California sales or use tax, as they did not constitute tangible personal property and were readily separable from the computer hardware with which they were sold.

Further, the terms of the two settlements stipulate that customers of Dell who purchased and paid tax on service contracts covering computer hardware during the class action period will be entitled to a full refund of all such taxes that they paid.

The settlement consists of more than $275 million in refunds. Notices will be mailed to customers informing them of the amounts of refunds available to them and instructions for the timely filing of claims. The Court will review the settlement agreements at the Final Hearing to be held in April, 2013.

Class members who are eligible to receive a refund under one or both of these settlement agreements must file a claim or claims to receive any refund(s). Each settlement agreement has different criteria for eligibility. For more information on eligibility and how to file a claim for the separate settlements, visit sctaxsett.com.

Welcome Home[Owner] News. This one’s a whopper…and some welcome news for home owners who suffered dodgy loan servicing and/or foreclosure at the hands of Morgan Stanley or Goldman Sachs. This week the Federal Reserve announced it has reached a settlement with the two financial institutions over alleged loan servicing and foreclosure abuses.

Under the terms of the settlement, reported by CNNMoney.com, Morgan Stanley will provide $97 million in direct cash payments to borrowers and $130 million worth of other relief, including loan modifications and the forgiveness of deficiency judgments. Goldman will pay $135 million to borrowers with a further $195 million provided as relief.

Here’s the skinny. The settlement provides for over 220,000 homeowners who held mortgages with the two banks’ former subsidiaries: Goldman’s Litton Loan Servicing and Morgan’s Saxon Mortgage Services, and subsequently faced foreclosure in 2009 and 2010. According to CNNMoney.com “over four million borrowers will split a total of $3.5 billion in cash compensation, with payments ranging from a few hundred dollars to potentially as much as $125,000 in a small percentage of cases. Those eligible are expected to be contacted by the end of March, regulators said.”

This settlement follows the $8.5 billion agreement announced last week by the Federal Reserve and the Office of the Comptroller of the Currency with 10 other banks over foreclosure issues.

Goldman Sachs was ordered to review its subsidiary’s foreclosure practices in September 2011, as was Morgan Stanley in April 2012. Those reviews were not initiated and will now be scrapped as a result of this settlement deal.

Well this news is worth a minor celebration—on top of the fact that it’s Friday. So—see you at the bar!

Week Adjourned: 1.11.13 – Kia, AT&T Mobility, Chase Bank

This week, our wrap of top class action lawsuits and settlements is a consumer fraud hat trick! Read on for what’s been hot this week in class action news: Kia Sorento, AT&T Mobility, Chase Bank Overdraft Fees. All for the week ending January 11, 2013.

FYI…we’re going for a Consumer Fraud hat trick this week…

Top Class Action Lawsuits

Kia Sorento #EpicFail? Heads up anyone out there who owns a Kia Sorento 2002-2009 model…Kia Motors is facing a consumer fraud class action lawsuit over allegations that these Sorento models are prone to catastrophic engine failure. That sounds rather alarming.

The Kia Sorento lawsuit, entitled Robinson et al v. Kia Motors America Inc. et al., Case No. 13-cv-00006 U.S. district Court for the District of New Jersey, claims that Kia Motors knowingly concealed a manufacturing defect in the crank sprocket of its 2002-2009 Sorento models. This alleged engine defect can lead to a catastrophic chain of events beginning with severe heat buildup, the release of debris, and subsequent loss of steering control, engine failure and the potential for a hazardous accident, the plaintiffs allege. (And you thought sprockets were just something George Jetson worried about…)

“Not only did Kia actively conceal the material fact that this particular component is defectively designed (and requires costly repairs to fix), but it also did not reveal that the existence of this defect would diminish the intrinsic resale value of the vehicle,” the Kia lawsuit states.

Other allegations include Kia having knowledge of the engine defect for several years, as evidenced by numerous online complaints. However, it allegedly chose to withhold this information from consumers while making numerous statements about the quality and reliability of the Sorento. As a result of Kia’s “scheme of false and misleading advertising and marketing” thousands of people have purchased a Sorento, without knowledge of the defect, in preference to another vehicle without the alleged defect. Getting the picture?

The lawsuit also alleges that Kia Sorento owners who sought repairs for their vehicles while under warranty received only temporary repair of damaged parts, which may have included using similarly defective parts. Not good.

Additionally, the plaintiffs claim that Kia profits from the alleged Sorento engine defect by performing unnecessary parts replacements, computer reprogramming and software updates, despite knowing the true cause of the problem.

This lawsuit seeks to represent a nationwide class of consumers that purchased or leased the first generation Sorento. Ok.

Top Settlements

AT&T Mobility Customers May Get Relief From 7-Year Itch. A settlement has been reached in the consumer fraud class action lawsuit pending against AT&T Mobility LLC. The lawsuit claims that AT&T improperly charged fees to certain wireless customers—over a seven-year class period. That’s alotta fees—and sadly, seems to be a trend these days.

So—if you were assessed Universal Service Charges or similar charges under state or other laws (collectively “USC”) on data pay-per-use plans, visual voicemail services, customer custom packaging plans, international calls outside the United States or voicemail services only (“Covered Services”) by AT&T Mobility LLC (“AT&T Mobility”) on bills issued from January 1, 2004 up to and including December 31, 2010, you might be eligible to receive benefits from a class action settlement.

We must stress, that the AT&T Mobility settlement has to receive final approval. If approved, it will resolve the lawsuit entitled, MBA Surety Agency, Inc. v. AT&T Mobility LLC, Case No. 1222-CC09746, concerning AT&T Mobility assessment of USC on the Covered Services. AT&T Mobility will contribute $152,634,430.00 (“Settlement Proceeds”) which will be payable in the form of credits and cash payments to the eligible Settlement Class members after deductions for attorneys’ fees etc. The final Fairness Hearing is scheduled for February 20, 2013. Watch this space—we’ll keep you posted.

And for the Hat Trick…after all, three’s a charm! A $110 million settlement that just received final court approval, ending an overdraft fees class action lawsuit against Chase Bank. Yes—this is a form of consumer fraud, because “it ain’t on the level.”

The Chase Bank overdraft fee settlement is the latest to be reached in the massive class action lawsuit involving over 30 banks who are alleged to have manipulated customers’ transactions in such a way as to maximize overdraft fees. What’s on the level about those business practices?

The allegations also state that rather than declining transactions on an account that has insufficient funds to cover a purchase, Chase Bank authorized the transactions and then processed them in highest to lowest dollar order, which effectively increased the number of overdraft fees charged. Oh—don’t get me started!

As part of the settlement agreement, Chase will, for a period of at least two years, cease charging overdraft fees on individual debit card transactions of $5.00 or less. No comment.

Class members include anyone who (A) held a Chase, Bank One, or Bank of New York consumer deposit account accessible with a Chase debit card anytime between January 1, 2003 and March 29, 2010; and (B) were charged one or more overdraft fees as a result of Chase’s practice of posting debit card transactions from highest to lower dollar amount.

That’s it for this week. Off to you know where—see you there!

Week Adjourned: 12.18.12 – Instagram, Toyota, BP Oil Spill

The weekly wrap of top class action lawsuits and settlements for the week ending December 28, 2012. Top class action stories include Instagram, Toyota and BP Oil Spill.

Top Class Action Lawsuits

Insta-cha-ching? You share your photos for free—and Instagram sells them for a profit? What? You have a problem with that? This week, Instagram got hit with a proposed unfair business practices class action lawsuit related to its recently updated terms of service. Specifically, the lawsuit, filed by California Instagram user Lucy Funes, alleges the company is in breach of contract: “[Instagram’s] unreasonable change of Terms accordingly violated the implied covenant of good faith and fair dealing inherent in Instagram’s current Terms,” the Instagram class action lawsuit states.

Instagram, now owned by Facebook, announced updates to its privacy policy and terms of service the week before Christmas, and one provision stood out: The right apparently reserved by Instagram to sell users’ photos without notice or compensation. Very crafty. Why is it no surprise that Facebook is somehow involved in this?

As a result of rapid and large user backlash, the photo-sharing site denied that it had plans to sell user photos, referring to the upset as a misunderstanding. The new terms of service will go into effect January 16, 2013.

According to the Instagram lawsuit, “On behalf of a class of Instagram’s California customers, Plaintiff is acting to preserve valuable and important property, statutory, and legal rights, through injunctive, declaratory, and equitable relief issued by this Court before such claims are forever barred by adoption of Instagram’s New Terms,” the filing said. “For this reason, even though the New Terms are not yet effective, this case is ‘ripe’ for adjudication.”

Top Settlements

Step On It Already! It’s about time—Toyota Motor Corp has agreed to a $1.1 billion settlement of a pending defective products class action lawsuit.

The Toyota class action lawsuit stemmed from complaints that a flaw in Toyota’s electronic throttle-control system, and not ill-fitting floor mats and sticky accelerator pedals, were to blame for unwanted acceleration of Toyota vehicles, which caused drivers to lose control and crash.

According to the terms of the settlement, as reported by the Wall Street Journal, Toyota will pay $1.1 billion to install new safety equipment and reimburse as many as 16 million customers.

BP’s cost of doing business? A $7.8 billion settlement against BP PLC has been approved by a federal judge, resolving economic and medical claims brought by more than 100,000 businesses and individuals who suffered from the massive BP oil spill in the Gulf of Mexico in April, 2010.

According to the terms of the settlement, approved by US District Judge Carl Barbier, there is no cap on the financial compensation—so the amount could be more or less than the estimated $7.8 billion, with the exception of $2.3 billion put aside to cover seafood-related claims by commercial fishing vessel owners, captains and deckhands.

The explosion of BP’s Macondo well that resulted in the worst oil spill in the history of the US, killed 11 rig workers and released over 200 million gallons of oil, closing much of the Gulf for months to commercial and recreational fishing and shrimping. While much litigation remains, this agreement provides for people and businesses in Louisiana, Mississippi, Alabama and some coastal counties in eastern Texas and western Florida, and in adjacent Gulf waters and bays.

According to a report in the Kansas City Star Judge Barbier said the settlement averts worries that litigation could continue for 15 to 20 years, as it did after the Exxon Valdez and Amoco Cadiz oil spills, creating a secondary disaster for those affected. The Star also notes that no ruling has been made on a medical settlement for cleanup workers and others who say exposure to oil or dispersants made them sick.

Still unresolved are environmental damage claims brought by the federal government and Gulf Coast states against BP and its partners on the Deepwater Horizon drilling rig, and claims against Switzerland-based rig owner Transocean Ltd., and Houston-based cement contractor Halliburton.

A trial is scheduled for next year, to identify the causes of BP’s blowout and assign percentages of fault to the companies involved.

Judge Barbier wrote that lawyers’ fees will not be taken from the settlements: BP has agreed to pay them separately.

I’ll drink to that! And on that note—Happy New Year—here’s to a peaceful and prosperous 2013!

Week Adjourned: 12.14.12 – NHL & MBL, Norcold, Asbestos

The weekly wrap of class action lawsuits and settlements for the week ending December 14, 2012. Top stories include NHL, MBL, Norcold and asbestos litigation.

Top Class Action Lawsuits

It’s face-off time! …for the NHL, MBL and broadcasters Comcast and DirecTV. This week, an antitrust class action lawsuit against the National Hockey League and company, got the green light to move forward.

What’s the beef? Well, the plaintiffs allege the defendants have created a monopoly over sports broadcasts that forces consumers to pay high prices to watch games. Brought on behalf of telecast subscribers, the NHL & MBL lawsuit claims the defendants used anti-competitive practices in order to control the broadcasting market, enabling them to charge inflated prices for sports telecasts. Doesn’t sound improbable.

Specifically, the lawsuit, entitled, Laumann et al. v. National Hockey League et al., Case No. 12-cv-01817 states “The defendants have accomplished this elimination of competition by agreeing to divide the live-game video presentation market into exclusive territories, which are protected by anti-competitive blackouts [that don’t allow certain games in certain markets to air].” Be interesting to see who scores in this one!

Own a Norcold refrigerator for your boat or RV? You might be interested to know that some very frustrated brethren in California and Florida have filed a defective products class action lawsuit against the company. The Norcold lawsuit alleges the manufacturers of Norcold brand gas absorption refrigerators, used in RVs and boats, knowingly sold defective refrigerators that posed a serious fire risk but hid that information from the public and federal regulators.

Eligibility? The class action lawsuit seeks relief on behalf of all persons who purchased or owned RVs or boats in California and Florida equipped with three models of Norcold-brand gas absorption refrigerators. The complaint names Norcold, Inc., Thetford Corporation and Dyson-Kissner-Moran Corporation (DKM) as defendants.

The lawsuit alleges that since 1999, Norcold’s refrigerators have caused at least 2,000 fires (2000!) resulting in millions of dollars in property damage, personal injury and death. The refrigerators contain flammable gases under high pressure, including hydrogen. The gases are heated by electricity or propane to circulate and provide the refrigeration effect. Fires are caused when defects in the refrigerator design release the flammable gases, which can then explosively ignite and spread quickly through the refrigerator compartment and into the passenger area of the RV.

The Norcold lawsuit alleges that the companies knew of the potential fire hazard associated with its refrigerators, but rather than eliminate the design and manufacturing defects or provide an adequate warning of the potential safety risks to users of the product they tried to conceal and minimize these dangers through a series of limited manufacturer-initiated product safety recalls through the National Highway Traffic Safety Administration (NHTSA), beginning in 2000.

In each product safety recall, Norcold represented that there was a single failure modality in a limited portion of their product population. They provided a retrofit that would fix that defect, rendering the refrigerators safe to use. But in truth, the lawsuit alleges, the refrigerators had a number of different failures that were common to all of the product lines, information that was never adequately disclosed to NHTSA or users of the product, nor remedied by the retrofit campaigns. Further it’s alleged that the devices provided by the companies to “fix” the defects were not only ineffective to remedy the propensity of the refrigerators to cause fires, but were designed, when triggered, to render the refrigerators inoperable and unrepairable, requiring users to purchase new refrigerators that contained the same design and manufacturing defects as the originals, and which had the same propensity to cause fires.

Top Settlements

Two asbestos settlements …to report this week. The first, involves a 68-year old man who worked as a painter and handyman from the early 1960s until his diagnosis of asbestos mesothelioma. He was been awarded $8,465,738 in settlement of his asbestos lawsuit.

In the lawsuit, the plaintiff alleged his exposure to asbestos resulted from working with asbestos-containing products manufactured and supplied by the defendants, Union Carbide and CalPortland. Specifically, the lawsuit claimed that the joint compound and the plastic cement the plaintiff worked with contained asbestos.

Recently diagnosed with pleural malignant asbestos mesothelioma, the plaintiff subsequently underwent an extrapleural pneumonectomy. He and his wife brought suit against the various defendants alleging that the defendants were negligent in failing to warn of the dangers of asbestos contained in their products or sold to others to place in their products.

At the conclusion of the 37-day trial the jury returned its verdict in favor of the plaintiffs and against the defendants. The jury determined that defendants CalPortland and Union Carbide were responsible.

The second asbestos lawsuit settlement involves the family of a former employee at the GM Powertrain facility in the town of Tonawanda. The husband and father died of asbestos disease, and his family, who brought the GM asbestos lawsuit, were awarded $3 million by the jury hearing the case.

Gerald Suttner, formerly of Tonawanda, worked at the GM facility repairing valves manufactured by Crane Co. The job involved removing asbestos gaskets, which created asbestos dust Suttner would have inhaled. He did this from 1964 to 1979, when he retired.

Diagnosed in October 2010, Mr. Suttner died just one year later, from pleural mesothelioma, a form of cancer that is caused by asbestos. He was 77.

During the trial, lawyers for the Suttner family called expert witnesses who testified that there is no such thing as safe asbestos exposure and assured the jury that Suttner’s exposure is what led to his diagnosis. The dangers of asbestos have been known since the early 1900s, and the lawyers made the case that Crane was aware of these dangers since the 1930s. “But the company continued to use asbestos well into the late 1980s without placing warnings on its products,” the law firm’s statement reads.

And on that note, I’ll see you at the bar.

Week Adjourned: 11.30.12 – Toys R Us, Generic Lipitor, Lucky Brand Jeans

Ploys R Us? Toy retail giant Toys R Us, Inc, got hit with a potential consumer fraud class action lawsuit by an angry customer who feels he was duped over the Thanksgiving weekend. Essentially, the lawsuit alleges engaged in a Toys R Us bait-and-switch scheme that lured in online shoppers with offers of valuable free gifts that turned out be small or non-existent.

Top Class Action Lawsuits

Ploys R Us? Toy retail giant Toys R Us, Inc, got hit with a potential consumer fraud class action lawsuit by an angry customer who feels he was duped over the Thanksgiving weekend. Essentially, the lawsuit alleges engaged in a Toys R Us bait-and-switch scheme that lured in online shoppers with offers of valuable free gifts that turned out be small or non-existent.

Naughty, naughty!

The backstory: William Probert, (who filed the lawsuit), claims he was lured to the Toys R Us website to purchase four Lego building sets, worth $62 and $112 each, based on an ad promising he would receive $15 Lego building set as a free gift with purchase. Instead, Probert was offered a $5 Christmas tree figurine and a $5 magnet.

The short version on the allegations: that Toys R Us used misleading sales tactics which included promising customers free gifts like a $15 Barbie clothing outfit when they purchased a $75 Barbie Doll. However, most shoppers received much cheaper incentive gifts because the company either stocked an “exceedingly limited” number of the advertised free gifts or had no intention of giving expensive gifts.

Specifically, the Toys R Us lawsuit states, “Under this business model, consumers almost always receive a ‘free gift’ of substantially lesser value than what was advertised and which served as the basis of the bargain, or no ‘free gift’ whatsoever.” And, “This business practice, thus, constitutes a modern ‘bait and switch’ scheme. Toys R Us does not honor its promises to provide the promised free gift, and indeed never intended to honor its promises.”

Statin Trouble. Heads up anyone taking Atorvastatin (generic Lipitor) manufactured and sold by Ranbaxy Pharmaceuticals. A consumer fraud class action lawsuit has been filed in the United States District Court, District of New Jersey on behalf of a class of all purchasers of certain bottles of Atorvastatin (generic Lipitor) that were manufactured and sold by Ranbaxy Pharmaceuticals, Inc. (Read more on the generic Lipitor class action lawsuit here.)

In case you missed it—which was easily done by the way—the pharmaceutical company recently conducted a limited, voluntary recall of Atorvastatin calcium tablets, (generic Lipitor). The retail-only recall concerns its 10mg, 20mg and 40mg dosage strengths, packaged in 90’s and 500 count bottles and only with respect to certain select lot numbers. Ranbaxy admitted that the product contained glass particles.

The lawsuit alleges that the defendants manufactured and sold a dangerous and defective product, violated consumer fraud laws, and otherwise acted improperly with respect to the tainted Atorvastatin. For example, when Ranbaxy learned that their product was tainted, Ranbaxy conducted a recall but it was only at the retail level. The recall by Ranbaxy did not include a notice to consumers who purchased the tainted product as to what they should do with the tainted product or what they should do if they ingested it. The limited recall also did not include a notice to consumers or retail pharmacies about how the consumers could obtain a refund of the money paid for the product. In fact, Ranbaxy has not offered a refund to consumers.

The class action seeks a total product recall, with notice to consumers about the tainted product. The lawsuit also seeks a refund of the money paid for the product. Hey Ho!

Top Settlements

Lucky Brand Jeans—Not So Lucky? Possibly not. A federal judge has preliminarily approved a $9.9 million settlement of a class action lawsuit filed against Lucky Brand Dungarees, Inc. and its marketing subcontractors. The Lucky Brand lawsuit alleged the clothing company was in violation of the Telephone Consumer Protection Act (TCPA) because it sent unsolicited text spam as part of a 2008 back-to-school promotion.

The lawsuit, entitled Robles v. Lucky Brand Dungarees, Inc., Case No. 10-cv-4846, was filed by Juvenal Robles in October 2010, who represents an estimated 216,000 class members, all of whom may be eligible to receive up to $100 per claimant if the settlement receives final court approval.

The lawsuit claimed that Lucky Brand sent unsolicited spam texts to thousands of customers’ cellphones. Those messages offered $25 off Lucky jeans or offering store location services to consumers that responded with their ZIP codes.

According to the lawsuit, the Federal Telephone Consumer Protection Act (TCPA) prohibits companies from contacting people on their mobile phones by using an “automatic telephone dialing system” or using “an artificial or prerecorded voice” without their prior express consent. Some courts have even applied the TCPA to unsolicited text messages, or “text spam.”

Eligible class members include consumers that received the Lucky Brand text spam between August 24 and September 15, 2008. Further details on the preliminary settlement have not been made public.

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

Week Adjourned: 11.23.12 – Pepperidge Farms, Bear Stearns, Medifast Diet

Here’s the weekly wrap of top class action lawsuits and settlements for the week ending November 23, 2012. Top lawsuits include Pepperidge Farms, Bear Stearns and Medifast diet claims.

Top Lawsuits

Something’s Fishy with those Fishy Crackers. Is nothing sacred? Pepperidge Farm is facing a potential consumer fraud class action lawsuit over the use of the word “natural” on the product label for its Cheddar Goldfish crackers.

Filed by Colorado resident Sonya Bolerjack, the fish cracker class action lawsuit alleges the company “mistakenly or misleadingly represented that its Cheddar Goldfish crackers are ‘Natural,’ when in fact, they are not, because they contain Genetically Modified Organisms (GMOs) in the form of soy and/or soy derivatives.” Specifically, Bolerjack claims that the product is not natural due because it contains soybean oil. Really?

The lawsuit contends that Pepperidge Farm violated Colorado’s Consumer Protection Act by engaging in deceptive trade practices; breached express warranties including that the product is natural even though it contains GMOs; and negligently misrepresented to the public through its packaging and labeling that the product is natural even though it contains GMOs. That laundry list ought to tie things up nicely for a while.

The plaintiff is seeking certification of a class of “all United States persons who have purchased Pepperidge Farm Cheddar Goldfish crackers containing Soybean Oil, for personal use, during the period extending from November 6, 2008, through and to the filing date of this Complaint.” FYI—that was roughly, approximately, don’t quote me, around the 19th of November.

Top Settlements

Remember Bear Stearns? Not fondly, I’ll bet. They were one of the first investment houses to fall in the 2008 financial crisis. Well, a while back they agreed to pony up $294 million to settle securities and ERISA lawsuits and this week a federal judge approved those settlements. The lawsuits were filed against The Bears Stearns Cos. Inc, certain of its former officers and directors, and the company’s former outside auditor, over allegations they misrepresented Bear Stearns’ exposure to the subprime mortgage lending crisis. No comment.

This week, a federal judge ruled that the settlements are procedurally and substantively fair (In re Bear Stearns Companies Inc. Securities, Derivative, and ERISA Litigation, MDL No. 08-md-1963, No. 08-2793, S.D. N.Y.).

So, according to the terms of the Bear Stearns settlements, US$ 275 million will be paid by current owner of The Bear Stearns Cos. JPMorgan Chase & Co. Inc., while another $ 20 million will be paid by former outside auditor Deloitte & Touche LLP. The judge also certified a class of all purchasers of Bear Stearns common stock from December 14, 2006, to March 14, 2008. I’ll bet there are a more than a few former employees who will be happy about this news.

Medifast Told to Reduce the Hyperbole—after being put on a diet of honest advertising (?), which they didn’t stick to. And, they’ve been told to avoid all unsupported claims (otherwise known as consumer fraud) about the benefits of their weight loss products for the good of their future health. Yep—this week, Jason Pharmaceuticals, a subsidiary of Medifast Inc, and the Federal Trade Commission (FTC), agreed to a $3.7 million Medifast settlement resolving charges about the claims the company made about their weight loss products and programs.

Medifast-brand low-calories meal substitutes, including its most popular plan called the Medifast “5 and 1” plan that consists of 800-1,000 calories per day, are sold by Jason Pharmaceuticals. The FTC alleges the company made false and misleading claims about the success people have had with the programs, in achieving or maintaining weight loss or weight control. Notably, these claims were in direct violation of a ban imposed on the company in 1992, by the FTC. Each day the company violated the ban, it could be fined up to $16,000. And they were thinking maybe they wouldn’t get caught? Seriously?

In their case, United States of America (for the Federal Trade Commission), Plaintiff, v. Jason Pharmaceuticals, Inc., Defendant (United States District Court for the District of Columbia), Case No. 1:12-cv-01476, FTC Docket No. C-3392, the FTC claims Jason Pharmaceuticals made unsupported representations since at least November 2009. These claims implied or stated that using Medifast programs and products would allow consumers to lose 2-5 pounds per week. The company also represented that the experiences of consumer endorsers featured in the advertisements were typical, and that consumers would lose more than 30 pounds. So, we’re back to exercise and sensible eating? Not good timing, given the season.

And on that note—I’ll see you at the bar—the Turkey is calling! Have a great Thanksgiving weekend!

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!