Securities Fraud

Week Adjourned: 2.21.14 – Minor League Baseball, Jimmy John’s, Royal Bank of Scotland

The week’s top class action lawsuits and settlements, including actions against Minor League Baseball, Jimmy John’s gourmet sandwich shops and Royal Bank of Scotland.

Top Class Action Lawsuits

Minor League Baseball Players Hoping for Home Run? A federal class action lawsuit was filed this week on behalf of minor league baseball players who allege they are paid less than the Fair Labor Standards Act (FLSA) federal minimum wage. Aaron Senne, former Marlins player and lead plaintiff in class action, together with Co-plaintiffs Michael Liberto and San Jose Giants pitcher Oliver Odle filed the lawsuit, which claims: “Most minor leaguers earn between $3,000 and $7,500 for the entire year despite routinely working over 50 hours per week (and sometimes 70 hours per week) during the roughly five-month championship season. They receive no overtime pay, and instead routinely receive less than minimum wage during the championship season.” Who knew?

Here’s the skinny—according to the minor league class action—“Since minor leaguers do not belong to a union, nothing has prevented the defendants from artificially and illegally depressing minor league wages. Indeed, MLB’s exemption from antitrust laws has only made it easier. Given that MLB carefully controls the entryway into the highest levels of baseball, and given the young minor leaguer’s strong desire to enter the industry, MLB and the defendants have exploited minor leaguers by paying salaries below minimum wage, by not paying overtime wages, and by often paying no wages at all.” The lawsuit is seeking class certification and damages for FLSA minimum wage and overtime violations, recordkeeping requirements, state wage and hour violations, payday requirements, waiting time penalties, itemized wage statement violations, unfair business practices and quantum meruit.

The plaintiffs are also seeking an injunction preventing the defendants from implementing their unlawful practices and requiring them to pay all wages pursuant to state and federal law.

The named plaintiffs all wish to represent to Minor League Collective class, and classes that play in Florida, North Carolina and New York (Senne), Arizona (Liberto), and California (Odle). This should be interesting.

Is Jimmy Johns Under-Delivering on Wages? The delivery drivers think so. They filed a federal unpaid wage and hour class action lawsuit against Jimmy John’s Gourmet Sandwich shop this week. In fact, it was filed by Scott Lewis of Witchita, a delivery driver from Witchita, Kansas. The Jimmy John’s lawsuit alleges that Bushwood Investments LLC, which owns and operates more than 30 Jimmy John’s restaurants throughout the country, failed to properly compensate its 300 delivery drivers for the use of their own vehicles, and numerous other allegations. Read on.

According to the lawsuit (Lewis v. Bushwood Investments LLC, Case No. 2:13-cv-02610, in the U.S. District Court for the District of Kansas), Bushwood, which operates more than 30 Jimmy John’s restaurants across the country, makes its delivery drivers “use their own automobiles to deliver sandwiches and other food items to customers…Instead of compensating delivery drivers for the reasonably approximate costs of the business use of their vehicles, defendant used a flawed method to determine reimbursement rates.”

“[Jimmy John’s] delivery drivers incur costs for gasoline, vehicle parts and fluids, automobile repair and maintenance services, automobile insurance, depreciation, and cell phone use while delivering sandwiches for the primary benefit of the defendant,” the lawsuit states.

AND—the lawsuit states that Jimmy John’s delivery drivers are allegedly required to cover the costs of maintaining their vehicles in safe and in good working condition as well as paying for insurance coverage for the automobiles.

AND the lawsuit claims that Jimmy John’s does not reimburse its delivery drivers for insurance costs nor does it provide its drivers with GPS systems to use while driving but rather leaves drivers to rely on GPS systems the driver’s cell phones, for which they are also not reimbursed. Additionally, the lawsuit claims the defendant pays its employees through direct deposit or a payroll card from inTrust Bank, and so do not receive a paycheck stub which details how deductions and reimbursements are made. In order to get this information, the drivers must make special requests from the defendant.

Top Settlements

RBS Pays Up on Mortgage-Backed Securities Fraud….A consumer financial fraud class action lawsuit pending against Royal Bank of Scotland Group, PLC has reached preliminary settlement,with the bank agreeing to pay $275 million.

The lawsuit was brought by New Jersey Carpenters Vacation Fund et al against the financial institution alleging it misled investors regarding mortgage-backed securities.

Specifically, the lawsuit relates to over $15 billion of the issued mortgage-backed securities which the plaintiffs claimed were sold despite not meeting underwriting guidelines. No comment.

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

Week Adjourned: 12.6.13 – Fisher-Price, Starbucks, FalconStor Software

The week’s top class action lawsuits and settlements for the week ending December 6, 2013. Top class actions include Fisher Price, Starbucks and FalconStor Software.

Top Class Action Lawsuits

Rock ‘N Mold? Heads-Up anyone who purchased a Fisher-Price Rock ‘N Play Bassinet or baby seat prior to January 2010:

Fisher Price and Mattel are facing a defective products class action lawsuit over allegations the Rock N Play baby seat has design flaws which results in it growing mold. Nice.

The Fisher-Price Rock ‘N Play Mold Growth Class Action Lawsuit, entitled is Butler v. Mattel Inc., et al., Case No. 2:13-cv-00306, in the U.S. District Court for the Central District of California, alleges Mattel and Fisher-Price were aware of the Rock ‘N Play design flaw since 2010. Specifically, the lawsuit claims that the baby seat design does not allow for adequate ventilation around the seat, making the product conducive to dangerous mold growth. The lawsuit, states that mold “is linked with serious respiratory illnesses and inflammatory problems in infants and recent long-term studies have suggested that infants exposed to environmental mold are nearly three times as likely to develop asthma by age seven.”

The Consumer Product Safety Commission has received in excess of 600 consumer complaints alleging mold growth between the Rock ‘N Play’s removable cushion and plastic frame, prior to the device recall in January 2013. At the time, 16 complaints included reports of infants becoming sick from the mold. Fisher-Price faced at least on lawsuit filed by a couple who alleged their son was hospitalized for respiratory problems after being exposed to mold that they claim developed on his Rock ‘N Play seat.

The Mattel and Fisher-Price marketed the Rock ‘N Play class action lawsuit claims the defendants failed to warn consumers that the sleeper was prone to mold growth. The plaintiffs further claim the defendants failed to test the product for mold growth or humidity resistance prior to releasing it on the market, even though they were aware that the seat would be regularly exposed to moisture and warmth—conditions conducive to mold growth.

According to the lawsuit, “Within seven months of the Rock ‘N Play’s release, concerned consumers began to call Defendants to complain that their Rock ‘N Plays were ‘moldy’ and, in many instances, that their infants were having respiratory problems they attributed to the mold.”

The lawsuit goes on to claim that tests for mold were only conducted on the product after hundreds of consumer complaints had been made detailing babies becoming ill from mold exposure. And, the lawsuit states that Mattel and Fisher-Price did not take timely action to either fix the defect or warn consumers about the risks, even though they were aware of the design defect.

While the defendants issued a recall of the Rock ‘N Play on January 8, 2013, the lawsuit claims that it was inadequate because it “consists solely of a 16 page booklet of cleaning instructions downloadable from the Internet, instructing owners to inspect the product for visible mold and, if mold is seen, undertake an onerous cleaning process that will cause damage to the product.”

The plaintiffs are seeking certification of a nationwide class of people who acquired a Fisher-Price Rock ‘N Play Sleeper that was sold prior to the January 8, 2013 recall. The plaintiffs also seek to certify three subclasses of California, Pennsylvania and Maryland residents who purchased the Rock ‘N Play prior to January 8, 2013.

Phantom of the Paycheck. Well, here’s a new take on an old theme….taxable phantom wages…? Yup. Three ex-Starbucks employees have filed a wage and hour class action lawsuit alleging the coffee company adds a taxable “phantom wage” of 50 cents an hour in tips to paychecks, which results in some employees receiving less than the minimum wage. The lawsuit claims that Starbucks in is violation of the Fair Labor Standards Act (FLSA), which prohibits employers making deductions in employees pay that would result in those employees making less than minimum wage.

Entitled, Fredrickson, et al. v. Starbucks Corp., Case No. 13-cv-02041, U.S. District Court Oregon, Portland Office, the lawsuit, filed by Hannah Fredrickson, lead plaintiff, states that Starbucks discourages employees from reporting their tips. Further, the lawsuit claims, “Starbucks just makes up that phantom number out of thin air.” Therefore, the lawsuit contends that Starbucks “willfully filed fraudulent information,” in violation of federal tax law, by reporting the made-up tips in W-2 returns.

According to the Starbucks class action, “Starbucks deducts amounts from its employees’ pay that reduce their paychecks below the minimum wage and/or overtime requirements. Its stated reason for the deduction is that the employees owe taxes on their tips, but that is false. Neither Oregon nor federal law require Starbucks to withhold taxes from unreported tips. The employees do not owe taxes on the tips, because their income is low enough that the withholdings from their regular wages are more than enough to meet their annual tax burden. Even if this were not the case, however, the employees would not have to pay any taxes on those unreported tips until the following April 15 (tax day). The FLSA requires employers to pay the minimum wage and overtime on payday, so the fact that the employees might receive a refund of these wrongfully deducted amounts (in many cases over a year later) does not eliminate the violation.”

Fredrickson is seeking class certification, an injunction, and damages for wage and hour violations and $5,000 or the sum of actual damages incurred, whichever is greater, for providing false information on tax returns.

Top Settlements

Securities Settlement News… FalconStor Software is going to pony up some cash, it looks like. A proposed $5 million settlement has been reached in the securities class action lawsuit its facing, which was filed by purchasers of FalconStor Software, Inc. (Nasdaq:FALC) common stock.

The FalconStor Software settlement would affect all persons who purchased the common stock of Falconstor Software Inc during the class period March 12, 2008 to September 29, 2010, inclusive.

Here’s the skinny: If you purchased FalconStor common stock during the period of March 12, 2008 through September 29, 2010, inclusive, you may be a member of the Class described above, and your rights may be affected by the Settlement of this Litigation.

If you have not received a detailed Notice of Pendency and Proposed Settlement of Class Action and a copy of the Proof of Claim and Release, you may obtain copies of these documents by contacting the Claims Administrator at: www.strategicclaims.net.

If you are a Class Member, in order to share in the distribution of the Net Settlement Fund, you must submit a Proof of Claim and Release postmarked no later than January 20, 2014, establishing that you are entitled to recovery, in the manner and form explained in the Notice. If you are a Class Member and do not submit a proper Proof of Claim Form, you will not be eligible to share in the distribution of the net proceeds of the Settlement, but you will be bound by any judgment or orders entered by the Court in the Litigation, whether or not you submit a claim.

If you desire to be excluded from the Settlement Class, you must submit a request for exclusion received no later than January 20, 2014, in the manner and form explained in the Notice. All members of the Settlement Class who do not request exclusion will be bound by any judgment entered in the Litigation.

For complete information on the proposed settlement and class action lawsuit, and to download forms, visit: www.strategicclaims.net.

Ok Folks, That’s all for this week. See you at the Bar!

Week Adjourned: 4.19.13 – Kashi, Bankers Life, Bank of America

Hot Class Action Lawsuit News Update: Week Adjourned: 4.19.13 – Kashi, Bankers Life, Bank of America

Top Class Action Lawsuits

What’s in your cereal? Kashi Co, and parent company Kellogg are facing a class action lawsuit over allegations their cereal is mislabelled, effectively hiding the amount of sugar in the products.

And it’s not just cereal, apparently. According to the Kashi class action lawsuit, dozens of Kashi products are allegedly mislabeled, including cereal, chips, crackers and bars, pasta and frozen entrees.

The lawsuit, entitled Nadine Saubers v. Kashi Co., Case No. 13-cv-00899, U.S. District Court for the Southern District of California, states “Nearly all of Kashi’s products’ labels list ‘evaporated cane juice’ as an ingredient despite the fact that the FDA has specifically warned companies not to use the term because it is ‘false and misleading,’ is not ‘the common or usual name of any type of sweetener,’ and the ingredient is not, in fact, juice.”

Lead plaintiff Nadine Saubers, alleges Kellogg and Kashi are in violation of consumer protection laws which regulate food labeling, specifically by their use of the term “evaporated cane juice” instead of sugar, and by failing to disclose that the ingredient is still considered to be processed sugar. Yes, you have heard this one before …

The Kashi class action lawsuit seeks to represent a proposed class of all US residents who purchased Kashi mislabeled products since October 1, 2009, including a subclass of California purchasers.

Long Term Care Falls Short. Heads up to anyone with elderly parents who have paid into Chicago-based insurance company Bankers Life and Casualty long-term health benefits plans. The insurer is facing a bad faith insurance class action lawsuit alleging the company is denying benefits to those who paid for long term health care insurance so they would have security in their old age.

The Bankers Life class action, alleging elder abuse, was filed on behalf of four individuals (two harmed families) who have made claims as representatives of the class. Hundreds, possibly thousands of elderly customers are estimated to be affected by this action. The Oregon action is similar to other lawsuits against Bankers Life in other states.

Grants Pass resident Dennis Fallow, a plaintiff if the lawsuit, claims his mother has paid their premiums for years, counting on having support if she became ill. “That time came and all she got from Bankers Life was a cold shoulder, rejection and red tape. It was a total rip off,” he said in a statement to the press.

Fallow’s 79-year-old mother, Katherine Fallow, needed an in-home caregiver when she came home in 2009 following multiple hospitalizations. The family hired a caregiver certified as a home health aide by the State of Washington and an Oregon certified home health aide to care for Mrs. Fallow. Dennis Fallow began submitting the bills for that care to Bankers Life, anticipating payment under terms of his mother’s policy. What followed were several months of wrangling over aides’ qualifications, long delays in communications and denials of payments. Bankers Life eventually made payments in the amount of $11,388, far short of the $51,667 the family paid for Mrs. Fallow’s care. Mrs. Fallow died on July 6, 2011.

In 2011, Grants Pass attorney Christopher Cauble filed a lawsuit against Bankers Life on behalf of the Fallows. He soon learned the Grants Pass family wasn’t alone. “Bankers Life has likely refused long term health care benefits to many, many Oregonians,” Cauble told reporters. “I began hearing about other families with experiences similar to that of the Fallows. What we have in Bankers Life is a company with a history of raising premiums, delaying payments and denying legitimate claims.” Cauble’s findings prompted him to join with Portland attorney Mike Williams and his firm to file the federal class action against Bankers Life on behalf of all Oregon consumers.

FYI—in 2011, Bankers Life ranked worst (19th out of 19 companies) in the Oregon Department of Consumer and Business Services’ (DCBS) consumer complaint index. In fact, DCBS figures show Bankers Life ranked worst for consumer complaints every year from 2005 to 2011. Now there’s something to aspire to.

Top Settlements

News in the never-ending saga of mortgage-backed securities—this one was all over the wires this week—Bank of America reached a tentative settlement in the pending securities fraud class action lawsuit brought by investors who purchased mortgage investments from Countrywide Financial. BofA acquired Countrywide in 2008.

The proposed settlement would see BofA pay $500 million to settle the lawsuit, which would be paid out to plaintiffs that include Dubai’s Mashreq Bank and public and union pension funds in California, Maine, Nevada, Vermont and Washington states. The plaintiffs claimed they were misled about the risks of securities they bought from California-based Countrywide between 2005 and 2007.

The settlement surpasses the $315 million accord reached with Merrill Lynch in May 2012, making it the largest to resolve federal class-action litigation over mortgage-backed securities since the financial crisis began. The accord requires court approval.

Ok—that’s a wrap. See you at that bar…

Week Adjourned: 2.15.13 – Gender Discrimination, Motrin, Zetia & Vytorin

Motrin, Zetia, Vytorin and gender discrimination are top stories in this week’s Weed Adjorned wrap on top class action lawsuits and settlements for the week ending February 15, 2013.

Top Class Action Lawsuits

Gender discrimination? Sorry—what year is this? Maybe the year Daiichi Sankyo gets nailed for the unlawful practice, if the allegations are true…Allegations made by six current and former female pharmaceutical sales professionals who filed a $100 million class and collective action gender discrimination lawsuit against the Japanese Pharmaceutical company.

Filed in the US District Court for the Northern District of California, these women seek to end pervasive gender discrimination in their workplace on behalf of themselves and a class of several hundred female Daiichi Sankyo sales professionals who have worked for the company in the United States.

The short version, like we don’t know it chapter and verse by now, is that Daiichi Sankyo pays female sales employees less than male employees for doing the same work; promotes or advances female sales employees at a slower rate than male sales employees; treats pregnant employees and working mothers of young children adversely compared to non-pregnant employees, male employees, or non-caregivers; and subjects women to other discriminatory terms and conditions of employment.

According to the Daiichi Sankyo lawsuit, a discrete group of predominantly male Daiichi executives and senior sales managers keep a tight rein on employment decisions, including decisions regarding sales employees’ compensation, advancement, and other terms and conditions of employment. Through this male dominated leadership structure, the Company has approved and implemented policies, practices and decisions that have systemically discriminated against female employees. No, this is not a Mad Men script. This, sadly, is real life.

Just in case there are any doubts as the validity of the allegations, the Plaintiffs cite Daiichi Sankyo’s violations of Title VII of the Civil Rights Act of 1964 and the federal Equal Pay Act of 1963, as well as the California Fair Employment and Housing Act, the California Equal Pay Act and the California Unfair Business Practices Act in today’s Complaint. Umm… 1963—1964 the laws changed and yet we’re still fighting for gender equality in 2013. No comment.

Top Settlements

Major Motrin Award. A landmark award this week—but brace yourself for the backstory. Boston, MA was the scene of a personal injury lawsuit against Johnson & Johnson (J&J) and its subsidiary, McNeil-PPC Inc, that ended this week with the jury awarding $63 million in damages to the Reckis family who brought the lawsuit involving Motrin.

The two pharmaceutical companies were ordered to pay 16-year old Samantha Reckis $50 million in compensatory damages, and her parents $6.5 million each.

What happened? Samantha suffered toxic epidermal necrolysis (TEN), a late stage of Stevens Johnson Syndrome (SJS), as a result of taking Motrin brand ibuprofen. Just seven-years old at the time, Samantha was given Motrin brand ibuprofen by her parents, and shortly thereafter began presenting with symptoms of TEN, which resulted in her losing 90 percent of her skin and her eyesight.

Samantha also suffered brain damage involving her short-term memory, and surgeons had to drill through her skull to relieve some pressure on the brain, the Reckis’ attorney noted. Additionally, Samantha suffered damage to her respiratory system, in which her lungs were burnt, leaving her with only 20 percent lung capacity.

Samantha had taken Motrin previously with no side effects. However, in 2003, the day after Thanksgiving, her parents began giving her the medication to reduce fever. The resulting toxic epidermal necrolysis, which can be fatal, causing inflammation of the mucus membranes and eyes and is marked by a rash that burns off the outer layer of skin, had her physicians puzzled. Samantha suffered inflammation of her throat, mouth, eyes, esophagus, intestinal tract, respiratory system and reproductive system. Her doctors were forced to put her in a medically induced coma.

The family filed the lawsuit in 2007. The trial took five weeks. The Reckis’ claimed that Samantha was blinded by Motrin and alleged that Johnson & Johnson failed to warn consumers that the drug could cause life-threatening reactions. Another positive, in addition to the award, is that while Samantha has to work twice as hard as her fellow classmates, she is in school and is an honor student, demonstrating a remarkable spirit.

Zetia & Vytorin False Statements Settlement. Here’s another record-breaking settlement from the world of pharmaceuticals—this time it’s a securities class action settlement. Actually, make that two securities settlements totaling $688 million. Whoppa! The securities class actions are pending against Merck & Co. Inc. (“Merck”), Schering-Plough Corporation (“Schering”), Merck/Schering-Plough Pharmaceuticals, certain of the Companies’ directors and officers, and the underwriters of a 2007 Schering stock offering over allegations the companies made false and misleading statements about results from a clinical trial called “ENHANCE” involving the anti-cholesterol drugs Zetia and Vytorin.

The actions, currently pending in the US District Court for the District of New Jersey before Judge Dennis M. Cavanaugh, are In re Schering-Plough Corporation/ENHANCE Securities Litigation, Master File No. 08-397, which settled for $473 million; and In re Merck & Co., Inc. Vytorin/Zetia Securities Litigation, Master File No. 08-2177, which settled for $215 million.

The two class actions stem from claims that Merck and Schering (which merged in November 2009) artificially inflated their securities by concealing material information and making false and misleading statements regarding the blockbuster anti-cholesterol drugs Zetia and Vytorin.

Namely, the lead plaintiffs alleged that even though the Defendants knew that a clinical trial of Vytorin, called “ENHANCE,” demonstrated that Vytorin (a combination of Zetia and a generic statin medication) was no more effective than the cheaper, generic statin drug at reducing artery thickness, the Companies nonetheless championed the “benefits” of the drugs, attracting billions of dollars of capital in the process. Yielding to public pressure to release the results of the ENHANCE trial, Lead Plaintiffs allege that the companies reluctantly announced that the cholesterol drugs showed “no statistically significant difference” in plaque buildup, and that news of these negative results and their related consequences caused sharp declines in the value of the companies’ securities, resulting in significant losses to investors.

The combined $688 million in settlements is the second largest securities class action settlement in the Third Circuit, among the top 25 securities class action settlements of all time, and among the ten largest recoveries in a securities class action not involving a restatement.

So—the moral of the story? You tell a Whoppa, you pay a Whoppa—quid pro quo baby!

See you at the bar—I know who’s buying…

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: 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.

Week Adjourned: 7.20.12 – Yoplait Greek, MC/Visa, Goldman Sachs

The weekly wrap of top class action lawsuits and settlements, for the week ending July 20, 2012; top stories this week include Yoplait Greek yogurt, Mastercard, Visa, and Goldman Sachs.

Top Class Action Lawsuits

How Greek is your Yogurt? In fact, is your yogurt even yogurt? If you’ve been buying Yoplait Greek yogurt from General Mills, there’s a consumer fraud class action lawsuit that alleges the giant food processor has been misrepresenting the product as being Greek and yogurt.

“Yoplait Greek does not comply with the standard of identity of yogurt,” the lawsuit states. “Indeed, Yoplait Greek contains Milk Protein Concentrate (“MPC”) which is not among the permissible ingredients of yogurt, non-fat yogurt, and low-fat yogurt (collectively “yogurt”) as set forth under the Food, Drug, and Cosmetic Act.”

The Yoplait Greek yogurt class action lawsuit also states “The use of MPC is financially advantageous to defendants.” It allows General Mills to manufacture more product at lower cost, and that’s why they use it in the production of the yogurt.”

If this leaves you stuck for breakfast options—may I recommend last night’s leftovers…

Top Settlements

Card Sharks Caught. This is one for all you conspiracy theorists out there—it’s pay day! A preliminary $7.2 billion settlement has been agreed by credit card giants MasterCard Inc, and Visa Inc, making it the largest antitrust settlement in US history.

The MasterCard Visa settlement, if approved, would resolve lawsuits brought as far back as 2005 by retailers who allege the credit card companies fixed debit and credit card swipe fees. Swipe fees are a small percentage of the purchase price and are taken by the credit card companies on every transaction made using their cards.

According to the terms of the settlement, filed in federal court in New York, Visa will pay $4.03 billion and MasterCard will pay $2.02 billion to a class of merchants, including small businesses and stores.

Additionally, both Visa and MasterCard will also agree to cut swipe fees by 10 basis points (0.1 percent) for eight months, which amounts to an additional $1.2 billion in relief for merchants.

The settlement also allows merchants and stores to impose a “checkout fee” to pass onto consumers, which is limited by a cap. It’s your lucky day!

Also included in the proposed settlement are credit card issuers such as JPMorgan Chase, Capital One, and Bank of America. Time to switch to the dark side…

Sachs Sacked. Remember 2008—(how could you forget, right?) The collapse of the financial world as we knew it—and the institutions such as Goldman Sachs who were in part responsible? Well, in 2009 The Public Employees’ Retirement System of Mississippi filed a securities class action against the financial institution, alleging New Century Financial Corp, which originated a Goldman Sachs $698 million mortgage-backed securities offering, failed to adhere to its underwriting standards and overstated the value of the collateral backing the loans.

The fund claimed Goldman Sachs didn’t conduct proper due diligence when it bought the loans in 2005. If I’m not mistaken, that was the crux of the entire meltdown—lack of due diligence—on everyone’s part.

This week, a preliminary Goldman Sachs securities class action settlement was announced.

The lawyer representing the retirement fund told U.S. District Judge Harold Baer in a letter made public that both sides had accepted a settlement proposed by a mediator. Details of the agreement weren’t disclosed, according to a report by Bloomberg Businessweek.

The case is Public Employees Retirement System of Mississippi v. Goldman Sachs Group Inc., 09-cv-01110, U.S. District Court, Southern District of New York (Manhattan).

Ok—That’s a wrap. Happy Friday! See you at the bar!

Week Adjourned: 5.25.12 – Facebook IPO, AllianceOne Calls, Asbestos

Weekly wrap of class action lawsuits and settlements for the week ending May 25, 2012. This week’s highlights include Facebook IPO, AllianceOne Cell Phone Calls, and Asbestos Lawsuit Settlement.

Top Class Action Lawsuits

With Friends Like These…So who hasn’t heard about the Facebook IPO lawsuit feeding frenzy set off this week by allegations that Mark Zuckerberg’s social media platform may not have as rosy a future as originally perceived?

In a nutshell, the allegations boil down to claims that Facebook, CEO Mark Zuckerberg and the underwriters—Morgan Stanely—misled thousands of shareholders in the $16 billion IPO when they “selectively disclosed” information about an analyst’s downgraded revenue forecast only to “a handful of preferred customers.”

The securities class action lawsuit has been filed on behalf of all persons who purchased the common stock of Facebook, Inc, pursuant and/or traceable to the Company’s May 18, 2012 initial public offering (the “IPO” or the “Offering”), against the Company and certain individual defendants and the lead underwriters of the IPO for violations of the Securities Act of 1933.

The specific Facebook IPO lawsuit allegations are that on or about May 16, 2012 Facebook filed with the SEC a Registration Statement for the IPO. On May 18, 2012, the Prospectus with respect to the IPO became effective and 421 million shares of Facebook common stock were sold to the public at $38/share, thereby valuing the total size of the IPO at more than $16 billion.

The Complaint alleges that the Registration Statement and Prospectus contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Specifically, defendants failed to disclose that Facebook was experiencing a severe reduction in revenue growth due to an increase of users of its Facebook app or website through mobile devices rather than a traditional PC such that the Company told the Underwriters to materially lower their revenue forecasts for 2012.

And, defendants failed to disclose that during the roadshow conducted in connection with the IPO, certain of the Underwriter reduced their second quarter and full year 2012 performance estimates for Facebook, which revisions were material information which was not shared with all Facebook investors, but rather, selectively disclosed by defendants to certain preferred investors and omitted from the Registration Statement and/or Prospectus.

As of May 22, Facebook common stock was trading at approximately $31/share, or $7/share below the price of the IPO. Plaintiffs and the Class have suffered losses of more than $2.5 billion since the IPO.

This is going to be interesting…

Top Settlements

Hanging Up on AllianceOne. This is AllianceOne has agreed to a preliminary $9 million settlement this week, of a consumer fraud class action pending against the company. Preliminary court approval was recently given.

The AllianceOne lawsuit alleges that the company violated the Telephone Consumer Protection Act by calling cell phones using an automated dialer or with a pre-recorded voice message without the recipients’ prior express consent.

Under the terms of the settlement, AllianceOne denies any liability (of course…does anyone ever accept liability?).

Here’s the facts as you need to know them: the agreement is subject to final court approval. The recovery, less attorneys’ fees and expenses to be paid to Class Counsel, will be distributed to class members who received an autodialed call from the company or their affiliates and agents on a cell phone without their prior consent between February 8, 2004 and November 30, 2010, under procedures to be implemented by the court overseeing the settlement. After paying administrative expenses, attorneys’ fees and costs, a donation to a charitable organization, and awards to class members, the remaining amount in the settlement fund, if any, will be returned to AllianceOne.

For more information about the settlement, go to www.AllianceOneSettlement.com.

Asbestos Lawsuit Settlement. The family of the recently deceased Hannibal “Scottie” Saldibar will hopefully have some closure now, as they have just been awarded a $2.4 million settlement in an asbestos mesothelioma lawsuit they brought.

Saldibar, a tile setter from New Haven, died after contracting the asbestos-related cancer. He was 84 when he died, and had worked as a tile setter for 30 years. He passed away in January 2010, just nine months after being diagnosed with asbestos mesothelioma.

According to a report by the CT Post, it took a Superior Court jury only 3 hours of deliberation before finding the Tile Council of North America liable in Saldibar’s death, and awarding his family $1.6 million. An additional $800,000 was then awarded by the judge, in punitive damages. Tile Council of North America developed the asbestos-containing mortar used by tile setters for many years.

That’s a wrap folks—you at the bar—and have a safe and enjoyable Memorial Day weekend as we remember our Vets!

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?

Week Adjourned: 12.23.11

A weekly wrap of the latest class action lawsuits and settlements, December 23, 2011

Top Class Actions

Another Corny Lawsuit? Ummm—you decide. A consumer fraud lawsuit was filed this week—testing the boundaries of food labeling vis-a-vis PepsiCo’s snacks business, Frito-Lay. The issue? Frito-lay is misleading consumers by making claims that its products, which contain genetically modified corn and vegetable oils, are all-natural, according to the lawsuit. (All natural corn=all natural chips? Really?)

Specifically, the lawsuit claims that by labeling some of its Tostitos and SunChips products as “made with all-natural ingredients” Frito-Lay is misleading consumers because genetically modified corn and vegetable oils are also present in the product. “The reasonable consumer assumes that seeds created by swapping genetic material across species to exhibit traits not naturally theirs are not ‘all natural’,” the claim states.

The claimant is pursuing the case on the basis of a violation of California and federal laws relating to unfair and fraudulent claims. I’m still struggling with the thought of any of this type of “food” being ok on any level—never mind whether or not it’s genetically modified. Bah humbug!

Top Settlements

Diamonds are Forever. So’s the De Beers Price Fixing Settlement now. The U.S. Court of Appeals for the Third Circuit has issued an opinion today upholding the settlement in the antitrust class action litigation against the South African company De Beers, the world’s largest diamond supplier, for allegedly conspiring to monopolize the sale of rough diamonds.

The appellate court affirmed an order by U.S. District Judge Stanley R. Chesler of the District of New Jersey that approved a settlement under which De Beers agreed to pay $295 million to U.S. jewelry makers, retailers, and consumers who purchased diamonds and diamond jewelry beginning in 1994.

The settlement also prevents De Beers from continuing its illegal business practices and requires De Beers to submit to the jurisdiction of the Court to enforce the settlement. Ouch! That’s a wee bit more than a wrist slap —but hey—that tennis bracelet sure looks good…

Talk about Soaring Gas Prices… More price fixing—this time in the stock market (now there’s a surprise)—and this time the guilty party is Amaranth Advisors LLC. They got hit with a $77.1 million settlement in a securities lawsuit brought by traders who allege the hedge fund manipulated the natural gas market. Whoa Nelly!

According to Businessweek, Amaranth collapsed in 2006 after losing $6.6 billion on natural gas trades. In August 2009, the Commodity Futures Trading Commission announced that Amaranth paid $7.5 million to settle market manipulation allegations however, in their lawsuit, the traders presented an expert who estimated damages at $3.5 billion.

Then, in April of this year, the Federal Energy Regulatory Commission issued a $30 million civil penalty against Brian Hunter, an Amaranth trader accused of manipulating the natural gas market in 2006.

FYI—the settlement isn’t final yet—a hearing on final approval of the class-action, or group, accord is reportedly scheduled for March 27 and, if approved, could pave the way for investor reimbursement.

Ok—That’s a wrap for this week. Merry Christmas—Happy Hanukkah—and Season’s Greetings—have a wonderful holiday everyone…