Week Adjourned - Part 25

Week Adjourned: 6.15.12 – Gamestop, Novartis, Krossland Calling Cards

The weekly wrap of top class action lawsuits and settlements for the week ending June 15, 2012. Top stories include Gamestop, Novartis Pharma Sales Reps and Krossland Calling Cards.

It’s been a week for wage and hour lawsuits and settlements…

Top Lawsuits

Paycheck Games? Gamestop got hit with a wage and hour class action lawsuit this week, alleging the company committed several California Labor Code violations including systematically neglecting to pay their employees for all hours worked. Really?

In the Gamestop wage and hour class action, employees alleged in their lawsuit that they were required to clock out of Gamestop’s timekeeping system and continue working off the clock to fulfill their daily tasks. Additionally, the lawsuit alleges that Gamestop “consistently does not allocate enough labor hours such that there is not enough time for the employees to complete their required duties within the allocated labor hours.” As a result, the Complaint claims that these employees were systematically denied compensation for the actual number of hours worked. Sound familiar?

Wait—there’s more. The lawsuit also asserts that the Gamestop employees were regularly denied meal and rest breaks, and there was no policy in place to compensate employees for missed meal or rest breaks. Specifically, the lawsuit claims that, “Plaintiff and California Class Members are required by [Gamestop] to work alone, or with an employee that cannot be left alone in [a Gamestop] store, for the first five (5) hours of their scheduled shift.”

The case, filed June 5, is pending in San Diego, CA, in case you know anyone…

Top Settlements

Continuing with our theme of wage & hour lawsuits…

Pharma Sales Reps Get Their Due. This time a settlement—a final approval, in fact,—of a $99 million settlement in the nationwide wage and hour class action brought by Novartis Pharmaceuticals Corp. sales representatives. http://www.lawyersandsettlements.com/settlements/16682/99-million-settlement-approved-in-novartis-sales.html

On May 31, Judge Paul A. Crotty of U.S. District Court for the Southern District of New York approved the settlement following a fairness hearing held the same day. This follows the preliminary approval of the settlement granted by Crotty in January. The settlements are the result of two lawsuits filed in 2006 citing violations of the Fair Labor Standards Act and California and New York laws (30 HRR 91, 1/30/12).

The final order and judgment allocated $70,758,500 to settlement awards for class members; $27,608,000 to attorneys’ fees; $400,000 to reimbursement of litigation fees; and $233,500 to class representatives and others involved in the case.

The $233,500 included compensatory damages and service awards ranging from $20,000 to $40,000 for each of five named plaintiffs.

And now for something completely different—how about a little consumer fraud? (Served with a healthy portion of “Oh no you don’t”.)

Kross To Bear? Krossland Communications—Krossland calling cards?? Ringing any bells? Well, a settlement has been reached. Here’s the summary notice, “issued in accordance with the Court order dated May 21, 2012 preliminarily approving the settlement of a consumer fraud class action entitled Carol Galvan, et al. v. Krossland Communications, Inc., United States District Court, Central District of California, Case No. 8:08-CV-00999-JVS (ANx).”

Lolis Tackwood represents a class of pre-paid calling card customers who purchased certain calling cards distributed by Krossland between August 26, 2004 and May 21, 2012, other than for purposes of re-sale, and other than calling cards distributed by Locus, AT&T, T-Mobile, Boost, Total Call and IDT. A list of those cards affected by this settlement can be reviewed by accessing http://www.KrosslandSettlement.com .

If consumers who purchased these calling cards submit a Claim Form, they can receive a Refund PIN that can be used to make telephone calls to any location in North, Central or South America, at the rate of 20 cents/minute to any telephone number within the United States and any landline telephone number in North, Central or South America, and 50 cents/minute to any cellular telephone number outside the United States in those locations.

There is a total cap of $250,000 on the dollar amount of Refund PINs, less certain fees and costs. Individual claims are capped at $16.00 in Refund PINs, rounded up to the nearest 50 cent increment, based on 30% of the face value of consumers’ eligible Krossland Calling Card purchases during the Class Period, subject to possible proration as described in the full class settlement notice. The Refund PIN may be used within 1 year of activation, and a deadline for using this PIN shall be provided with the PIN. Settlement Class members can submit a Proof of Claim Form online at http://www.KrosslandSettlement.com or by requesting a Proof of Claim Form from the Settlement Administrator and submitting it to the address below.

To be excluded from this settlement, or to object to the settlement, Settlement Class Members must follow the instructions in the Notice described below. The deadline to opt out of the settlement is August 6, 2012. The deadline to submit any objection is July 27, 2012.

This is only a summary of the settlement. For additional information regarding this settlement, the full Notice of Class Action Settlement (“Notice”) is available at http://www.KrosslandSettlement.com.”

Ok—Happy Friday Folks. See you at the bar! Oh yes!

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: 10.21.11

The weekly wrap up of class action lawsuits and lawsuit settlements for October 21, 2011

Top Class Actions

Sex discrimination—still? Really? Yup—and this time the company doing the dirty was owned by a woman—Ruth U. Fertel. However, she passed away in 2002, and it looks like things have regressed since then. And the company is….Ruth’s Chris Steak House. Four former and current employees filed a sex discrimination class action alleging they were discriminated against for pay and promotions.

The women’s jobs ranged from national sales manager to bartender, and they brought the suit in October 2010. The United States District Court for the District of Columbia has now granted the Ruth’s Chris Steak House discrimination suit plaintiffs the right to add class action claims to the lawsuit.

The women also allege that they suffered sexual advances in the work environment at the steak house chain, including physical groping, sexual innuendo and retaliation against those who complained or reported sexual harassment. Hey—the meat’s on the plate boys…

Top Settlements

Who says the little guy can’t win? A $160k settlement has been awarded to a former employee of retail giant Target, ending his discrimination lawsuit against the company. Jeremy Schott, who filed the lawsuit, took medical leave in 2004 due to his experiencing a seizure. He was 29 years old at the time. In his lawsuit, he alleged that when he returned to work his weekly hours had been reduced from 17 to eight. The U.S. Equal Employment Opportunity Commission sued Target on Schott’s behalf, alleging a violation of the Americans with Disabilities Act (ADA).

Target’s counsel contended that Schott’s work hours were decreased because of poor performance and a lack of motivation. The parties agreed to settle for $160,000. As part of the settlement Target has agreed to designate an ADA coordinator and implement a policy regarding reasonable accommodations.

Defective Pool Slide Settlement. This is very sad… The widower and child of a young woman who died as a result of a defective inflatable pool slide purchased from Toys “R” Us have been awarded a $20.6 million settlement this week by the judge hearing the personal injury lawsuit.

The accident that took Robin Aleo’s life happened five years ago, when she was just 29 years old. She had an 18-month old daughter at the time. Aleo was at a pool party at a relative’s home when she decided to go down the six foot Banzai Falls slide head first. When she neared the bottom the slide suddenly bottomed out and Aleo hit her head on the edge of the pool, breaking her neck and sending her to hospital unable to breathe on her own and paralyzed. She died at the hospital the following day.

According to a report in the EagleTribune, Aleo is the second person to have allegedly been paralyzed by an incident involving the Banzai Falls slide. According to court records, more than 4,000 of the slides were sold nationwide, without having been tested to see if it met federal safety standards.

Ok – That’s it for this week. See you at the bar.

Week Adjourned: 10.15.11

Top Class Actions

Well, Hello…Something fruity is going on here—or not as the case may be… A proposed consumer fraud class action lawsuit has been filed against General Mills alleging the company misled consumers about the nutritional and health qualities of its fruit snacks, specifically Fruit Roll Ups, Fruit by the Foot, Fruit Gushers, as well as other similar products.

The lawsuit claims that between October 15, 2005 to the present (the “class period”) General Mills engaged in a widespread marketing campaign to mislead consumers about the nutritional and health qualities of its Fruit Snacks. Specifically, the suit states, “Defendant made misleading statements that its Products were nutritious, healthful to consume, and better than similar fruit snacks.”

The suit further states “In fact, Defendant’s Fruit Snacks contained trans fat, added sugars, and artificial food dyes; lacked significant amounts of real, natural fruit; and had no dietary fiber. Thus, although the Products were marketed as being healthful and nutritious for children and adults alike, selling these Fruit Snacks was little better than giving candy to children.” Umm…Maybe suitable for Halloween treats?

Top Settlements

Did your internal capacitor prematurely fail? No—I mean the one in your TV! On October 3, 2011, preliminary approval was granted to a proposed defective product class action settlement with Philips Electronics North America Corporation (“Philips”).

The settlement proposes to resolve lawsuits that allege certain Philips and Magnavox televisions suffer from a defect that causes internal components (called capacitors) to prematurely fail, resulting in the televisions becoming inoperable. The proposed settlement would entitle qualifying settlement class members, who purchased new or received as a gift new one of the Philips or Magnavox plasma televisions with the model numbers listed below, to monetary benefits or vouchers.

The model numbers of the Philips and Magnavox plasma televisions included in the proposed class action settlement are:

50PF9830A/37 42PF9630A/37

50PF9731D/37 42PF7321D/37

50PF9631D/37 42PF7320A/37

50PF9630A/37 42PF7220A/37

50PF9431D/37 42PF5321D/37

50PF7321D/37 50MF231D/37

50PF7320A/37 50PF7220A/37

In addition, only those television sets with a serial number reflecting a manufacturing date between November 1, 2005 through December 31, 2006 qualify for participation in this settlement.

The Court has scheduled a hearing in December to determine whether to grant final approval to the settlement.

To be eligible to receive the benefits made available pursuant to this settlement, class members must submit to the claims administrator a claim form that is postmarked by February 28, 2012.

To obtain additional information about the settlement, to determine whether your television qualifies, or to obtain a claim form, you can visit the settlement website at PhilipsPlasmaTVsettlement.com. You can also contact the settlement administrator by calling (855) 477-4407, or by writing to Philips Plasma TV Settlement, c/o Dahl, Inc., P.O. Box 2061, Faribault, MN 55021.

Service gratuity not quite included? This one’s for anyone who ever worked in the service industry and had their tips withheld—and I’m sure there’s no shortage of you out there… A $7 million settlement has been reached by current and past employees of the Cranwell Resort, Spa, & Golf Club in Lenox, ending an employee class-action lawsuit that alleged the resort’s management illegally withheld the workers tips.

If the settlement receives final court approval, approximately 700 food, beverage, and spa employees who worked at the upmarket Berkshire resort between 2001 and 2011 will share in the money. A final settlement hearing is scheduled for November 2011. This is the second of two lawsuits, filed over four years ago, claimed that the employees were not paid the full service charges that were added to hotel bills, which is against state law.

Ok—That’s it for this week. See you at the bar—where I will be repairing my personal, internal capacitor.

Week Adjourned: 8.12.11

Top Class Actions

Latest Book Club? Apple, and some the publishing industry’s biggest names got hit with a nationwide antitrust class-action lawsuit this week, over allegations that they conspired to fix prices in electronic books (e-books)–at least that’s the short version.

According to published info, Apple Inc., HarperCollins Publishers, a subsidiary of News Corporation, Hachette Book Group, Macmillan Publishers, Penguin Group Inc., a subsidiary of Pearson PLC, and Simon & Schuster Inc., a subsidiary of CBS, colluded to increase prices for popular e-book titles to boost profits and force e-book rival Amazon to abandon its pro-consumer discount pricing. Nice!

Here’s the skinny: the publishers believed that Amazon’s enormously popular Kindle e-reader device and the company’s discounted pricing for e-books would increase the adoption of e-books, and feared Amazon’s discounted pricing structure would permanently set consumer expectations for lower prices, even for other e-reader devices.

So, according to the lawsuit, the five publishing houses forced Amazon to abandon its discount pricing and adhere to a new agency model, in which publishers set prices and extinguished competition so that retailers such as Amazon could no longer offer lower prices for e-books. That’s anti-free market for sure!

If Amazon attempted to sell e-books below the publisher-set levels, the publishers would simply deny Amazon access to the title, the lawsuit states. The defendant publishers control 85 percent of the most popular fiction and non-fiction titles. Lawyers for the plaintiffs note that while Amazon derived profit from the sale of its Kindle and related accessories, likely allowing the company to discount e-books, Apple was steadfast in maintaining the 70/30 revenue split it demanded with its App Store.

Still with me? Read on…

While free market forces would dictate that e-books would be cheaper than the hard-copy counterparts, considering lower production and distribution costs, the complaint shows that as a result of the agency model and alleged collusion, many e-books are more expensive than their hard-copy counterparts.

As a result of the pricing conspiracy, prices of e-books have exploded, jumping as much as 50 percent. When an e-book version of a best-seller costs close to—or even more than—its hard-copy counterpart, it doesn’t take a forensic economist to see that this is evidence of market manipulation, lawyers for the plaintiffs note. For example, “The Kite Runner” costs $12.99 as an e-book and only $8.82 as a paperback.

The lawsuit goes on to claim that because no publisher could unilaterally raise prices without losing sales, they coordinated their activities, with the help of Apple, in an effort to slow the growth of Amazon’s e-book market and to increase their profit margin on each e-book sold.

The lawsuit claims Apple and the publishers are in violation of a variety of federal and state antitrust laws, the Sherman Act, the Cartwright Act, and the Unfair Competition Act.

Once approved, the lawsuit would represent any purchaser of an e-book published by a major publisher after the adoption of the agency model by that publisher.

Does this affect you?

Top Settlements

Pharma Sales Reps Score One—in Overtime. Well now—here’s a great big slice of sunshine for all those hardworking pharmaceutical representatives. Schering Plough’s reps have won a complete victory in Federal Court in a nationwide collective lawsuit alleging unpaid overtime pay at the mandatory rate of time and one half. The federal class action was filed on behalf of all pharma reps who worked for SP during the last three years, anywhere in the United States.

No numbers have been made public as yet—but the press release states “The amount to be distributed to the class will be determined by the Court, but will likely include double damages for the violation.”

Apparently, the US Department of Labor recognizes that pharmaceutical reps are not exempt from overtime pay, and that the precedent for the class claim was set in the U.S. Court of Appeals for the Second Circuit, which found earlier this year that Novartis pharma reps were entitled to overtime compensation on the same grounds alleged against Schering Plough.

The US Supreme Court refused to hear the drug companies’ appeals. Saving tax payer dollars—always a good thing. The Second Circuit issued a similar ruling in a case brought by pharma reps against Schering Plough, as have district courts in Connecticut, Illinois, Florida and Texas in cases against Boehringer Ingelheim, Abbott, and Auxilum Pharmaceuticals. However, this ruling is the first of its kind as it found that pharma sales reps are not exempt under any of the parts of the exemption. Schering had to prove all the parts of the exemption, but it lost on all points.

Congratulations!

$5 Million Drunk Driving Accident Judgment. I wonder how many people are affected by drunk drivers? This guy certainly was. Twenty-two year old Dwight Grant—he was 22 in 2007 at the time of the incident—sustained brain damage as a result of an accident caused by a drunk driver. He was recently awarded $5 million in settlement of his personal injury lawsuit.

Apparently, he was a passenger in stopped vehicle when the vehicle was struck by Mathew Lyons who was being chased by the police. After hitting the car Grant was in, Lyons fled the scene.

Grant suffered fractures to his face and skull, which resulted in his sustaining brain damage, specifically, damage to his frontal lobe. This damage, Grant alleged, caused him a seizure disorder that now requires constant care.

The parties ultimately agreed to a $5 million final judgment.

OK. That’s it for this week. See you at the Bar—I’m taking a taxi.

Week Adjourned: 7.1.11

Top Class Actions

Best Buy BOLO a NO-GO. Best Buy got hit this week with another potential class action—another discrimination lawsuit—but this time it’s all about you —the customer…

The nation’s largest electronics retailer is facing alleged discrimination in in the form of customer racial and ethnic profiling. Ah, make that widespread racial and ethnic customer profiling in the District of Columbia and Virginia. The lawsuit was brought by an Arab American Muslim manager, Todd Abed, who was fired for protesting the practice, known internally as “BOLO”. Abed accuses Best Buy of terminating his 13-year career with the company because he objected to his district office’s “Be On the Look Out” policy (BOLO).

So, the allegations go that under BOLO, Best Buy employees circulated e-mails among all managers in the region containing images and descriptions of customers suspected of theft, intended to be posted in their respective stores. According to the lawsuit, the images and descriptions circulated under BOLO consistently involved racial and ethnic minorities who had done nothing to merit suspicion, accompanied by racially-tinged descriptions such as “bearded Middle Eastern guy who looked shady” or “black ghetto guy.” Really?

Abed, a supervisor in charge of loss prevention (read ” theft”), claims he refused to post the discriminatory emails. When this refusal became known to the district staff, they twice denied Abed promotions to General Manager—despite his being the most qualified applicant—and directed Abed’s new General Manager to trump up a reason to terminate him, according to the complaint.

The new General Manager, in turn, allegedly told Abed he would create a “paper trail” to have him fired, taunted his religion, sabotaged performance evaluations, placed him under a pretextual disciplinary “Action Plan,” and ultimately terminated him for allegedly poor performance.

The lawsuit seeks $1 million in damages and attorneys’ fees and costs. Most importantly, Abed seeks a court order permanently ending Best Buy’s customer profiling practices, which he believes continue to this day.

Top Settlements

Pond Drowning Case Settled. This is very sad. The family of a small boy who drowned in a pond while trying to save his younger brother who had also fallen in the pond, has been awarded a $30.7M settlement. The family had filed a premises liability lawsuit.

The story is devastating. Apparently, in 2001, Andrew Kennedy, who was just 11 years old at the time, tried to save his 10-year old brother James who had fallen through an ice-covered pond. Andrew drowned and James suffered severe brain damage. Andrew’s twin brother, Christopher Kennedy, claimed emotional and psychological trauma from witnessing the incident. And the parents alleged that the property owner, Lakes of the Four Seasons Property Owners Association Inc., did not have warning signs in place notifying the public of the dangers, nor did they try to restrict access to the pond. The family also claimed that Four Seasons failed to provide safety devices nearby. A cautionary tale…but at what price?

AON Account Specialists Settlement. And for all those ‘misclassified’ AON employees—justice at last. Los Angeles Superior Court judge gave final approval this week to a $10.5 million settlement of the employees overtime class action.

The story here is that California Account Specialists, whose work involves assisting Account Managers in providing insurance brokerage services to Aon’s clients, were misclassified by the defendant as exempt administrative employees. So the California Account Specialists filed a lawsuit—way back in 2007. And wouldn’t you know it, as the case was preparing for trial, the parties were able to reach a settlement. The settlement covers 534 class members, and best guess is they could have their money within 60 days.

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

Week Adjourned: 6.17.11

Top Class Actions

Logistical Error? Nothing like a lawsuit to improve your company’s standing—or attract quality employees—as FTDI West is about to find out. The company, located in California and Florida, got hit with an unpaid overtime class action lawsuit this week.

The gist of the lawsuit is labor code violations, well, that’s a no-brainer. Specifically, the lawsuit states that FTDI West Inc, violated: Sections 226.7 and 512 of the California Labor Code by failing to provide adequate meal breaks to employees involved, section 226.7 of the California Labor Code by failing to provide adequate rest breaks to employees involved, Section 510 of the California Labor Code by failing to pay proper overtime wages, Sections 203 and 226 (a) of the California Labor code by providing involved employees paystubs not in compliance with California law and not paying “waiting time” penalties, as well as two other causes of action as related to Business and Professions Code Section 17200 and the common law tort of unjust enrichment.

The overtime claims asserted deal with non-payment of “double time” wages. Double time wages are due for any work over 12 hours in a workday or any work beyond eight hours on any seventh consecutive day of a workweek.

The lawsuit defines its class members as “All current and former employees of Defendants who were employed as non-exempt employees at any of Defendants’ locations anywhere in California, at any time from four years prior to the initiation of this action until the present.”

Top Settlements

Drywall Might Settle but the Dust Surely Hasn’t… Remember all the defective Chinese drywall lawsuits of not so very long ago? Well, they are slowly making their way through the courts to settlement land. Case in point—Banner Supply has agreed a $54.4 million settlement of a class action lawsuit brought by homeowners in the Orlando, FL area. In fact, the agreement covers 2,000 to 3,000 homes south of Orlando.

According to Builderonline something like 95 companies have been implicated as distributors of the sulfur-tainted drywall and named in subsequent lawsuits filed against the Chinese manufacturers. The defendants are accused of being the source of tainted drywall. While Banner Supply tops the list, others suppliers reportedly include ProSales L&W Supply, ProBuild, Stock Building Supply, and 84 Lumber.

While $54.5 million might seem a large settlement, it may only work out to between $18,000 and $24,000 per home, and estimates suggest the cost of repairing the affected properties could reach $100,000.

Defective Boat Injury leads to $31M Award. Ok. There’s bad design, and BAD DESIGN. In this case, I’m not talking about an infraction of the Home & Garden variety, but rather something that warranted a $31 million award. Two women brought a defective product and personal liability lawsuit against MasterCraft, after suffering some pretty horrendous injuries that good design likely would have prevented.

Short version, in 2006 Nichollette Bell and Bethany Wallenburg were among 12 passengers riding in a MasterCraft X-45 wakeboarding craft. They were sitting on the bow of the boat when it was suddenly submerged as the driver of the boat went to retrieve a fallen wakeboarder. As a result the women were swept off the boat by the force of water and into the lake. The boat’s propeller struck Bell on the head, ripping out an eye and leaving her with brain damage. The propeller also slashed Wallenburg’s left elbow and lower back, resulting in muscle and nerve damage. In their lawsuit, the women alleged the boat was defectively designed. They also alleged the driver handled the boat negligently. Not surprisingly, the jury found MasterCraft 80 percent at fault and the driver 20 percent at fault.

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

Week Adjourned: 6.11.11

Top Class Actions

Never mind what’s in your wallet…Capital One could be more concerned with what’s left in theirs soon, as it seems they may have been doing a little corporate pick pocketing… it’s very popular these days. A lawsuit seeking class action status was just filed alleging Capital One (NYSE:COF) misrepresented its “Transfer Balance Program” program, resulting in higher-than-expected interest rates for consumers.

The case, filed June 9, 2011, in the United States District Court for the Eastern District of Michigan, alleges that Capital One deceived cardholders by claiming that a cash advance obtained through the company’s transfer balance program would include a 0 percent Annual Percentage Rate (“APR”) for one year. The company also allegedly promised that credit balances on regular monthly purchases (“purchase balances”) would incur no interest as long as the balance was paid within 25 days.

However, according to the complaint, cardholders who took advantage of the transfer balance program were charged interest rates exceeding 13 percent on their purchase balances, even if the balance was paid on time, because payments were applied to the transfer balance rather than to the purchase balance.

The lawsuit alleges that Capital One’s actions constitute a breach of contract and the duty of good faith and fair dealing, in addition to violations of the Virginia Consumer Protection Act and the Michigan Consumer Protection Act. The case also argues that Capital One received unjust enrichment through the alleged scheme.

Ah yes, unjust enrichment…that old chestnut. Seems it never grows old.

Top Settlements

One for the Madoff Meter… While we’re on the subject of things financial—a settlement was recently reached between a group of investors and HSBC Holdings PLC, with Europe’s largest bank agreeing to pay $62.5 million to the investors, who allegedly lost money in association with a Madoff securities fraud.

It seems that the investors had placed funds with Ireland-based Thema International Fund Plc, the assets of which were held with Bernard L. Madoff LLC, according to a statement by HSBC. Bloomberg reports “Thema Fund, a so-called Madoff feeder fund, was controlled by Bank Medici AG. Bank Medici with its founder Sonja Kohn is part of a $59 billion suit by the trustee liquidating Madoff’s firm.” This has to be one of the worst trustee jobs in history, I would think.

Reportedly, Thema was one of several funds placed in the custodianship of HSBC units, which subsequently funnelled monies to Madoff. The settlement is pending court approval.

A statement issued by HSBC stated that the settlement “shall in no way be construed” as an admission of fault. HSBC still faces other Madoff-related lawsuits in other countries including Germany, and Luxembourg. It’s the never ending story. 

And it’s a victory for the Ladies. A federal judge in Washington has approved a $32 million settlement of a class action brought against Wells Fargo Advisors by a group of women who alleged gender discrimination.

Reportedly, some 3000 female financial advisors make up the class. The suit was filed in 2009 by three female financial advisors who worked at Wachovia Securities. According to a report in the Wall Street Journal the women claimed that compared with their male counterparts, female advisors were provided fewer business opportunities by the company. The women also claimed that female advisors were at a disadvantage in other ways, specifically with respect to career advancement, work assignments and distribution of accounts.

The class covers all women who were employed as financial advisors by Wachovia or Wells Fargo at any time between March 17, 2003, and January 25, 2011, which is the date a preliminary approval was reached. The class also covers women who were employed by Wells Fargo Investments LLC and women who were employed as advisors by Prudential Securities Inc. or A.G. Edwards & Sons Inc. as of the dates those companies merged with Wachovia. I wonder who’s next?

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

Week Adjourned: 4.1.11

Top Class Actions

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

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

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

Top Settlements

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

Week Adjourned: 2.4.11

Top Class Actions

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

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

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