Tag: PepsiCo

Week Adjourned: 9.15.17 – PepsiCo, LensCrafters, BofA

Top Class Action Lawsuits

PepsiCo losing credit on this one… A subsidiary of PepsiCo is facing a employment class action lawsuit filed by a job applicant who alleges violations of the Fair Credit Reporting Act.

Specifically, plaintiff Altareek Grice alleges that during the job application process he was engaged in with Bottling Group LLC in August 2016, the company accessed his consumer credit report via Carco Group Inc., without making the necessary disclosures required by the FCRA.

According to the PepsiCo lawsuit, employers must provide a disclosure “in a document that consists solely of the disclosure,” if they wish to access a potential employee’s consumer report.

“Pepsi either knew or recklessly failed to know the disclosure requirements of [the FCRA] and that its acts in procuring or causing to be procured a consumer report regarding plaintiff and other class members without providing the required disclosure to them was facially contrary to the express language of [the act] and all administrative guidance available and violated the law,” the complaint states.

Grice seeks to represent a nationwide class of all individuals whose consumer reports were procured by Bottling Group LLC for employment purposes in the last two years and to whom the company did not provide a clear disclosure. The estimated size of the class could exceed 1,000 people, according to the complaint.

The case is Grice v. Pepsi Beverages Co. et al., case number 3:17-cv-01842, in the U.S. District Court for the Southern District of California.

Not exactly crystal clear… LensCrafters got hit with a proposed consumer fraud class action lawsuit alleging it falsely claimed that its prescription eyeglasses are made with pupillary distance measurements that are five times more precise than traditional measurements.

According to the LensCrafters complaint, filed by Kathleen Infante, LensCrafters, advertises its Accufit Digital Measurement System measures the distance between pupils to the tenth of a millimeter. Infante states that the defendant claims this system allows it to produce prescription glasses with more accurate lenses that put “the prescription exactly where you need it to see your best.” However, she asserts that this technology doesn’t, in fact, result in more accurate eye wear products.

“Because LensCrafters’ manufacturing process uses the same decades-old traditional methods, the end-product sold to customers cannot and does not have PD measurements that are ‘five times’ more accurate than traditional methods,” the complaint states.

According to the proposed lawsuit, the manufacturing equipment that LensCrafters uses doesn’t measure more precisely than 1 millimeter, which is the same precision as a standard ruler. Even if the Accufit system measures within a tenth of a millimeter, the manufacturing technology is incapable of actually producing glasses with that much accuracy, the complaint states.

“Even assuming the Accufit technology is, as advertised, five times more accurate than manual measurements, LensCrafters cannot and does not translate the measurements taken from the Accufit system into its manufacturing process,” the lawsuit asserts.

According to the complaint, while LensCrafters employees allegedly were aware of the equipment’s shortcomings, they were discouraged from discussing the manufacturing process with customers.

Infante seeks to represent a class of California residents who purchased prescription glasses from LensCrafters since September 5, 2011. The complaint states that LensCrafters introduced the Accufit system around 2011.

The case is Kathleen Infante v. Luxottica Retail North America, case number 3:17-cv-05145 in the U.S. District Court for the Northern District of California.Top Settlements

Top Settlements

BofA Interest & Fees for Military Servicemembers… No stranger to lawsuits, Bank of America (BoFA) has had a $41.9 million class action settlement preliminarily approval – without admitting any wrongdoing – (surprised?) potentially ending a consumer banking class action brought by military families who alleged that BoFA overcharged them on interest and fees related largely to mortgage and credit card accounts and then tried to conceal those violations. Seriously.

If final approval is granted, restitution will be made to more than 125,000 military members who alleged BoFA’s actions are in violation of the Servicemembers Civil Relief Act.

Under the terms of the settlement BoFA would, for a five year period, refrain from using a method for calculating interest subsidy that the service members contend could lead to higher costs for class members.

According to the deal, Class members will be divided into four groups, depending on the types of accounts they held. They will receive payments accordingly, with the first $15.4 million going to class members who did not previously receive or deposit payouts from Bank of America.

“After the class wide distribution, the value of any uncashed distribution checks will be redistributed further to the class, if the value is sufficient to make it economically feasible, or else such residual funds will be distributed as cy pres to a non-profit organization providing services to military service members and veterans,” court documents state.

The case is Childress et al. v. Bank of America Corporation et al., case number 5:15-cv-00231, in the U.S. District Court for the Eastern District of North Carolina.

Ok – That’s a wrap for this week. See you at the bar!

Week Adjourned: 4.6.12 – Lay’s Potato Chips, Groupon, Medtronic

Weekly wrap-up of top class action lawsuits and class action settlements, for the week ending April 6, 2012.

Top Class Actions

Potato Chips are Healthy! Seriously–it’s time for the shovel on this one folks. A federal consumer fraud class action lawsuit filed against PepsiCo and its subsidiary Frito-Lay this week, claims they mislead customers by “misbranding” their potato chips as healthy because they contain “0 grams of Trans Fat.” Call me old-fashioned, but I think that’s a bit of leap. Like—what exactly happened in the potato-chip-making process that suddenly makes the king of junk food healthy?

Not much, it seems. The Frito-Lay lawsuit contends the advertising does not point out that every 50 chips contains more than 13g of fat. Well, hello!

Specifically, the class action lawsuit accuses Frito-Lay of violating federal and California laws that require companies to provide truthful, accurate information on the labels of packaged foods.

“As consumer preferences have begun to favor healthier options, Defendants have chosen to implement a health and wellness strategy to reposition their products as a healthy option,” the Frito-Lay fraud class action lawsuit states. “Defendants recognize that health claims drive food sales and actively promote the purported health benefits of their Misbranded Food Products, notwithstanding the fact that such promotion violates California and federal law.”

Among the deceptive health claims included in the Lay’s potato chips advertising are that the chips are “prepared with healthier oils,” that Frito-Lay’s snack chips “contain 0 grams of Trans Fat, are low in saturated fat and cholesterol-free,” and that the chips contain “good stuff like potatoes, which naturally contain vitamin C and essential minerals.”

Ok. Nothing short of an Easter miracle is going to make potato chips healthy. Come on.

The consumer fraud class action also notes that Frito-Lay tells consumers that “Snacking is an important part of a healthy diet” and that “Snacks may benefit special populations including people with diabetes, children and adolescents, older adults, and pregnant women.” At a loss for words at this point.

According to the lawsuit, “If a manufacturer is going to make a claim on a food label, the label must meet certain legal requirements that help consumers make informed choices and ensure that they are not misled.” However, PepsiCo and Frito-Lay “have made, and continue to make, false and deceptive claims” in violation of state and federal law. Furthermore, lawyers for the plaintiffs contend, “Misbranded food is worthless as a matter of law, and purchasers of misbranded food are entitled to a refund of their purchase price.”

The Frito-Lay consumer fraud class action lawsuit is brought on behalf of all California consumers who, have purchased Frito-Lay potato chips labeled “0 grams Trans Fat” but which contained more than 13 grams of fat per 50 grams and purchased those chips within the past four years.

The lawsuit is seeking damages, restitution or disgorgement, as well as a cease and desist order banning the companies from selling their allegedly misbranded food products. (Just in case the collective consumer wisdom accumulated over the past 50 years fails to kick in?)

Raw Deal of the Day? Somewhere in Groupon’s tagline, the word beleaguered should appear. To say this company is beset with lawsuits would be an understatement. This week, it’s a securities class action alleging it released “materially false and misleading statements” regarding its financial results. The Groupon lawsuit seeks class-action status on behalf of shareholders who acquired Groupon shares between November 4, 2011 and March 30, 2012.

The lawsuit also claims Groupon’s revenue and growth were overstated, and the company “was not nearly resistant to competition as suggested by defendants.”

The fellow who filed the suit, Fan Zhang, claims that Groupon “failed to disclose negative trends” that would have affected its IPO pricing of 35 million shares of common stock at $20 per share.

Short version—Fan Zhang reportedly bought 3,000 shares of Groupon at an estimated $61,800 in February, then sold those shares in March at a $9,000 loss. Ouch! The lawsuit goes on to state “Groupon’s internal controls were so poor and inadequate that Groupon’s reported results were not reliable.”

The defendants include Groupon Chief Executive Andrew Mason and several banks that helped take the company public, including the lead IPO underwriters Credit Suisse, Goldman Sachs and Morgan Stanley. Um. None of those banks are strangers to lawsuits. Oh well, if you’re heading into a lawsuit like this, best to have some experienced people with you…

Top Settlements

And While we’re on the Subject of Groupon… they agreed to settle a consumer fraud class action this week to the tune of $85.million. The Groupon lawsuit, filed by disgruntled customers, (who else?) alleges that the expiration dates on Groupon coupons are illegal.

The proposed settlement applies to anyone who purchased Groupon vouchers before December 1, 2011. Under the terms of the settlement, the class members can either redeem the coupons beyond their expiration date or, if they are unable to do so, obtain a refund from the $8.5 million fund. Residents in some states can seek refunds only for vouchers sold after Aug. 22, 2010.

And, for the next three years, also as part of the settlement, Groupon has agreed not to sell more than 10 percent of its daily deals with an expiration date of less than 30 days after their issue date.

According to Bloomberg.com, the settlement pertains to no less than 17 lawsuits filed against the daily deals dealer, which were subsequently consolidated. The plaintiffs claimed Groupon and various retailers violate federal and state consumer protection laws with improper expiration dates and other provisions for the vouchers, such as the requirement that they be used in a single transaction.

“Groupon effectively creates a sense of urgency among consumers to quickly purchase ‘groupon’ gift certificates by offering ‘daily deals’ for a short amount of time,” according to the first lawsuit which was filed in 2011. “Consumers therefore feel pressured and are rushed into buying the gift certificates and unwittingly become subject to the onerous sales conditions.”

New Meaning to Graft? And then there’s Medtronic. What can we say about these guys—that’s good? Not much really. Although this news is good—for investors. The medical equipment company has agreed to pony up $85 million to settle investors’ claims regarding stock fraud.

The securities class action lawsuit claims that the investors were misled by company leaders on the off-label uses of the company’s highly controversial Medtronic Infuse bone graft. This product is troubling from a number of angles.

The Medtronic stock fraud settlement still awaits final documentation and court approval.

The lawsuit, filed in 2008 by the Minneapolis Firefighters Relief Association, claims that Medtronic’s officers and directors misled investors through a nearly decade-long campaign to illegally promote Infuse for uses not approved by the Food & Drug Administration.

Sales and future growth of the graft were “driven by misconduct that invited, and ultimately brought about, the scrutiny of federal regulators and an abrupt decline in sales,” according to a case brief by attorneys for the investors. As a result, revenues declined, so did the value of shares, which fell to $31.60 from $57.86.

And on that happy note—that’s a wrap. Happy Good Friday everyone.

Wait—is that a bunny on my lawn?