Week Adjourned

Week Adjourned: 9.9.16 – EpiPen, Nature Valley, Amgen

Top Class Action Lawsuits

Mylan Pharmaceuticals may need it’s own EpiPen if this gets to court. The maker of the EpiPen device, is facing a price gouging class action lawsuit. Filed by a resident of Ohio, the lawsuit asserts that the sharp increase in price the company has put in place violates Ohio state consumer protection laws.

Mylan has reportedly raised the US price of the device, which is used to for emergency treatment of life-threatening allergic reactions, from less than $100, when it acquired the device in 2007, to over $600. EpiPen works by injecting a dose of the drug epinephrine into the thigh to counter dangerous allergic reactions to things like bee stings, shellfish and peanuts. It has a 94 percent share of the market for such auto-injector devices.

The EpiPen lawsuit has been filed in the Court of Common Pleas for Hamilton County, Ohio, by Cincinnati resident Linda Bates, whose son requires an EpiPen. According to the complaint, “The outrageous, unconscionable and immoral high prices set by Defendant is nothing more than price gouging.”

The complaint further claims that the price increases violated the Ohio Consumer Sales Practices Act, which prohibits “unconscionable” acts in connection with consumer transactions, including taking advantage of a consumer’s “physical infirmities.”

What can one say?

Some Granola To Crunch On… Here’s another one—General Mills got hit with a consumer fraud class action lawsuit this week over allegations its Nature Valley products contain a chemical that could be carcinogenic. Hey—maybe it adds flavor. Or not. But somehow the descriptive “carcinogenic” doesn’t sound like its quintessentially from an idyllic fantasyland called “Nature Valley”.

Filed by Yesenia Nuez, a resident of New York, the Nature Valley lawsuit asserts that General Mills promoted its Nature Valley bars as “Made with 100% Natural Whole-Grain Oats.” According to Nuez, these claims are false, because the bars contain oats that are not 100 per cent naturally made. Rather, they contain the chemical glysophate. Glysophate is a potent biocide, a probable carcinogen and a human endocrine disrupter, according to the suit. Nuez claims that as a result, the Nature Valley bars could be causing harm to consumers.

Yesenia Nuez filed the class-action lawsuit, individually and on behalf of all others similarly situated, alleging false, deceptive and misleading advertising practices regarding its Nature Valley products. The case is U.S. District Court for the Eastern District of New York Case number 1:16-cv-04731-FB-VMS

Top Settlements

Amgen Securities Settlement. A $95 million settlement has been reached in a securities class action lawsuit pending against pharmaceutical company Amgen Inc.

Brought by investors, the lawsuit claims that Amgen failed to disclose the results of a study known as DAHANCA 10, which tested Aranesp in head and neck cancer patients in Denmark. When Amgen’s failure to disclose was discovered and reported, the company’s stock crashed.

The period in which class members were affected is between April 22, 2004 and May 10, 2007. Under the agreement, Amgen will pay $95 million into a settlement fund to be distributed to class members. The settlement is subject to court approval.

The lawsuit is In re Amgen Inc. Securities Litigation, CV-07-2536 PSG, pending in the United States District Court for the Central District of California.

Ka-Ching! That’s a wrap folks—see you at the Bar.

Week Adjourned: 9.2.16 – iPhone 6, Tropical Smoothie, Avon

Top Class Action Lawsuits

Do you have Touch Disease? Or, more to the point—does your iPhone 6 or 6 plus? Here are the symptoms loss of functionality by reduced responsiveness or no responsiveness at all, when interacting with the touch screen. The defect is typically preceded by a flickering grey bar across the top of the display. According to the lawsuit, the loss of functionality results from a defective logic board.

Yes—touch disease is an alleged defect in the iPhone 6 generation. It’s referred to as “touch disease”, because the alleged defect, the lawsuit asserts, manifests as reduced touch screen functionality.

An iPhone 6 defective products class action lawsuit was filed against Apple this week. One to watch.

Heads up Tropical Smoothie Fans…a food poisoning class action lawsuit was filed this week against Virginia-based Tropical Smoothie cafes. The strawberry smoothies have been linked to an outbreak of Hepatitis A. The infected strawberries reportedly come from Egypt.

According to Virginia State health officials, at least 28 cases of Hepatitis A have so far been linked to the tainted strawberries. Last week, 35 cases of Hepatitis A had been recorded, with a majority connected to stores in Northern Virginia, according to state health officials. Tropical Smoothie has locations in Hampton, James City and York counties and roughly 300 stores nationwide.

The Tropical Smoothie lawsuit is filed against by a plaintiff claiming damages and recovery of costs associated with vaccination shots she got to guard against hepatitis A.

According to court documents, the plaintiff had smoothies at a Yorktown store in the last month or so. After finding out she’d possibly been exposed to hepatitis A, she followed health official recommendations and had a series of vaccination shots.

According to Virginia State health officials, customers of Tropical Smoothie outlets could have been infected even if they didn’t order smoothies with strawberries, because the cafes use the same blender to make smoothies.

FYI—Hepatitis A is a disease often transmitted by contaminated food or drinks that can cause liver infections with fever, jaundice and malaise.

Top Settlements

Avon Ladies to get Compensated…Avon has reached a proposed $1.8 million settlement in an unpaid overtime class action brought by Avon’s district managers, who alleged the company misclassified them as exempt employees and therefore did not pay them time and half wages they were due.

According to the terms of the proposed Avon overtime settlement, anyone who worked as a district manager at one of Avon’s California locations between April 2009 and March 31, 2016 will be able to claim compensation for their unpaid wages.

The settlement must receive final approval.

So folks, on that happy note, this week’s a wrap. Happy Labor Day long weekend—we’ll see you at the bar!!

Week Adjourned: 8.26.16 – Nike, Hertz, Nesbitt Burns

Top Class Action Lawsuits

Unpaid Overtime? So File a Lawsuit – Just Do It. If indeed that proves to be the case. This week, a California overtime and labor law class action lawsuit was certified against Nike. The complaint is brought by employees who worked at Nike’s Gilroy store in California, who alleged the company failed to pay employees for the time they spent going through security inspection or bag checks at the end of every work shift.

According to the Nike lawsuit, Isaac Rodriguez is suing for himself and on behalf of a putative class of all current and former non-exempt retail store employees of defendant Nike Retail Services, Inc. (Nike) who worked in California during the period from February 25, 2010 to the present.

It is estimated that the class may consist of as many as 6,000 people who worked in 31 stores over the requested five-year period from February 25, 2010 to the present.

No Car Rental Returns? Here’s a crafty one. According to a couple of folks who rented cars from Regency Car Rentals and Hertz, they are owed their security deposits. Neither car rental agency has returned them, claiming charges against those deposits, so a consumer fraud class action has been filed.

Here’s the back story: filed by Nishil Patel and Gurraj Singh, the Hertz lawsuit asserts that in November 2015, Mr. Patel rented a vehicle from Regency for a two-day period. His Visa card was charged for the full amount of $3,254.25, while his American Express Card was charged $3,299.40 as a deposit, the lawsuit states. He alleges he was told it would be refunded upon return of the vehicle. He alleges that Regency assessed two unauthorized charges after the rental.

Similarly, Mr. Singh asserts that he also was assessed unauthorized charges against his security deposit, such that his security deposit was not refunded to his credit card. As a direct result, the plaintiffs and other class members allegedly have suffered injury, and have lost money or property.

The plaintiffs hold Regency Car Rentals LLC, Hertz Global Holdings Inc. and The Hertz Corp. responsible because the defendants allegedly deceived consumers by making false statements, misrepresented the cost of the rental of vehicles, double-billed and assessed unauthorized fees to consumers. Whoa!
The case is US District Court for the Central District of California case number 2:16-cv-05967.

Top Settlements

Meanwhile, in Canada…a $12 million settlement has been finalized in an unpaid overtime class action lawsuit pending against BMO Nesbitt Burns Inc, a Canadian finance company.

Filed in 2010, the lawsuit was certified as a class action in 2013. The settlement ends six years of litigation involving some 1,800 investment advisers who worked for Nesbitt between 2002 and 2016.

As part of the Nesbitt Burns settlement, Nesbitt will pay lead plaintiff Yegal Rosen, who worked as a Nesbitt investment adviser from 2002 to 2006, a $10,000 honorarium. As part of the settlement, $6.5 million is allocated for 705 trainee investment advisers and $1.3 million will go to 1,136 senior advisers.

Nesbitt cannot contest any class member’s entitlement to payment, and the amount each member will receive depends on the take-up rate.

Bet there’s gonna be some celebrating this weekend.

So folks, on that happy note, this week’s a wrap – see you at the bar!!

Week Adjourned: 8.19.16 – Wen Haircare, Bluegreen Vacations, Columbia U

Top Class Action Lawsuits

Your Dream Holiday? Or not. According to two women in California—it’s “or not.”. They filed a consumer fraud class action lawsuit against Bluegreen Vacations Unlimited Inc, alleging they sustained financial damages due to misleading information the defendant provided them on purchasing a time-share.

According to Kyle Miles and Jasmine Miles, Bluegreen Vacations made several false representations regarding a timeshare contract, including the total cost of the contract. Further, they assert the company promised that they would buy back the contract from the consumers if they were unhappy with the timeshare. I’m guessing that didn’t happen.

Kyle and Jasmine Miles seek a trial by jury, restitution, enhanced damages, legal fees and all relief the court deems just. They are represented by attorneys Todd M. Friedman and Adrian R. Bacon of the Law Offices of Todd M. Friedman in Beverly Hills, California.

The case is US District Court for the Eastern District of California Case number 1:16-cv-00937-LJO-JLT.

Here’s something we’re seeing a lot more of these days, an ERISA (Employee Retirement Income Security Act) class action lawsuit. This one has been filed against Columbia University alleging it breached its obligation under ERISA to prudently invest its employees’ retirement savings.

In the Columbia University class complaint alleging one hundred million dollars in damages, Plaintiff Jane Doe, a faculty member at Columbia University and a participant of the University’s retirement plans, sued on behalf of herself and a class of 27,000 current and former Columbia University employees who participated in Columbia University’s retirement plans. The complaint alleges that the University breached its fiduciary duties under ERISA. Columbia University, as well as University Vice President of Human Resources Dianne Kenney, who administers the deficient plans, are named as Defendants.

According to the complaint, Columbia University retained expensive and poor-performing investment options that consistently underperformed their benchmarks. This caused its 401(k) plans and their participants to suffer hundreds of millions of dollars in losses of retirement savings. As a result, the University’s 401(k) plan included $4.6 billion of investment options that were primarily poor to mediocre performers. Among the plans’ poor-performers, the complaint points to the plans’ retention of the TIAA-CREF Stock Account R3, which, it alleges, has historically underperformed its benchmarks and other lower-cost investments that were available for inclusion in its retirement plans.

In addition to retaining poorly performing funds, the lawsuit charges that the University’s plans offer excessively duplicative investments to beneficiaries. According to the complaint, this selection of funds violates the industry principle that too many choices harm participants, and can lead plan participants to “decision paralysis” and selection of inferior investments. In addition, the plans charge excessive fees for recordkeeping, administrative, and investment services, and retain excessively expensive retail share class options despite the lower-cost options available to their plans.

Top Settlements

WEN is there a Settlement? Big news for people who suffered damages from WEN Hair Care Products.

A proposed $26,250,000 settlement has finally been reached in the class action lawsuit pending against them.

Cast your mind back to December, 2015, when the class action lawsuit was actually filed, naming defendants Wen Hair Products and the manufacturer Guthy-Renker. The lawsuit resulted from thousands of complaints from women alleged severe and possibly permanent hair loss after using the products. Other Wen side effects include rash and burning eyes.

So here’s the skinny on the proposed WEN settlement: The settlement class is defined as All purchasers or users of WEN Hair Care Products in the United States or its territories between November 1, 2007 and August 1, 2016, excluding (a) any such person who purchased for resale and not for personal or household use, (b) any such person who signed a release of any Defendant in exchange for consideration, (c) any officers, directors or employees, or immediate family members of the officers, directors or employees, of any Defendant or any entity in which a Defendant has a controlling interest, (d) any legal counsel or employee of legal counsel for any Defendant, and (e) the presiding Judge in the Lawsuit, as well as the Judge’s staff and their immediate family members.

The settlement consideration consists of the $26,250,000 (the “Fund”) settlement fund which shall be used to pay for administration and court costs, legal fees, and other related costs, and to pay Class Member claims and provide Incentive Awards to the named plaintiffs.

There are two Settlement Classes, namely, Tier 1 and Tier 2.

Tier 1 Class-Wide Flat Rate Claims consists of any member of the Settlement Class who purchased Wen Hair Care products and does not timely request to opt-out of the settlement class. They shall be entitled to submit a claim against the Fund for a one-time flat payment of $25 per person as compensation for claims of misrepresentation regarding the qualities and attributes of WEN Hair Care Products, or undocumented claims of bodily injury, including but not limited to hair loss, hair damage, scalp pain or irritation, after using WEN Hair Care Products. Five Million Dollars ($5,000,000) of the Fund shall be set aside to pay Class Members making Tier 1 claims.

Tier 2 Documented Adverse Reaction Claims shall consist of any member of the Settlement Class who alleges to have suffered bodily injury, including but not limited to hair loss, hair damage, scalp pain or irritation,as a result of using WEN Hair Care Products, and does not timely request to opt out from the Settlement Class, may make a claim against the Fund for reimbursement of amounts spent to redress such alleged injuries, as well as an injury award designed to compensate the Class Member for any alleged injuries sustained, up to a maximum of $20,000 per Class Member, as set forth below. To make a claim under Tier 2, the Class Member must submit a valid Tier 2 Claim Form and supporting documentation, as set required by the Settlement Agreement.

The Defendant also agrees that all labels for WEN Cleansing Conditioner created after the Effective Date shall bear a common sense caution materially consistent with the following: “If you experience any adverse reaction after using this product, immediately cease use and consult a physician.”

The settlement remains to be approved – but watch this space for updates.

So folks, on that happy note—this week’s a wrap. See you at the bar!!

Week Adjourned: 8.5.16 – Pokemon Go, Honda, Shell

Top Class Action Lawsuits

Pokemon Go Hotspot (of sorts)? Here we go—it’s time to play hunt the Pokemon Go class action lawsuit. This one, filed this week, was among the first to get filed, and alleges the maker of the hugely popular game, Niantic, has some rather troubling data requirements that would-be game players must agree to, before being allowed to download the game.

To be clear, the proposed unfair business practices class action lawsuit alleges that Niantic’s terms of service contract forces players to provide their personal and private information to the company in order to use the app.

Filed by a plaintiff in Florida, the lawsuit asserts that the plaintiff unwittingly granted Niantic, the Pokemon Go Developer, “perpetual” and “irrevocable” expansive rights to, amongst other things, collect his user data, when he began downloading the game.

In order to use Pokémon Go, players must agree to the Terms of Service and Niantic creates a user’s Pokémon Go account by allegedly extracting data from the gamer’s Google, Facebook, or other pre-existing third-party account certain personal information.

According to the plaintiff, he downloaded Pokémon Go onto his phone and in so doing, unwittingly provided Niantic with his private information under an irrevocable license.

The license allegedly gives Niantic the right to retain and share users’ data, including players’ location, recent web history, search terms and user messages, in perpetuity.

Consequently, “unsuspecting individuals, including [plaintiff], have downloaded and used ‘Pokémon Go’ … and [have] and will provide Niantic with information,” the lawsuit states.

According to the complaint, “The terms of service provide that [plaintiff] has granted to Niantic a perpetual and irrevocable license, which will survive cancelation, discontinuation or termination of [plaintiff’s] access to or use of Niantic’s services,” the plaintiff states, adding “such cancelation, discontinuation or termination may occur upon Niantic’s option, at its sole discretion, and at any time and without notice to plaintiff.”

Further, the suit asserts that Niantic reserves the right to unilaterally alter or terminate any or all of the separate parts of the Terms of Service and Privacy Policy. Because of this, the suit claims Niantic “is not bound by the Pokémon GO Terms of Service or the Pokémon GO Privacy Policy, and may perform if it wants to.” The plaintiff claims Niantic unfairly asserts the right to terminate a player’s account at the company’s sole discretion and refuses to refund virtual goods which the player uses in the game.

The lawsuit is seeking relief under the Florida Deceptive and Unfair Trade Practices Act and a declaratory judgment that the Niantic Pokémon Go Terms of Service and the Pokémon Go Privacy Policy are illusory and therefore the contract is unenforceable.

The Pokémon Go Terms of Service Lawsuit is Case No. 50-2016-CA-008330, in the Fifteenth Judicial Circuit for Palm Beach County, Florida.

Wow.

Honda Gets Hit…. with a defective automotive class action lawsuit this week, filed by owners of Acura vehicles. The lawsuit states that the automaker sold vehicles with a battery-draining defect that since at least 2005. According to the allegations, Honda knew all about the issue. No!

Here’s the skinny—according to the Honda complaint—the HandsFreeLink™ unit will get stuck in the “on” position, even if the feature is not in use and even after the car’s ignition switch is turned off. Once stuck, the HandsFreeLink™ unit creates a constant drain on the electric system, leading to drained and dead batteries, recurring battery replacement and premature failure of other essential electric components such as alternators.

As a result, Acura owners are faced with the choice of disabling the HandsFreeLink™ unit or replacing it at a cost in excess of $1,000, with no guarantee that the replacement will function properly, according to the complaint. Since 2005, Honda has issued internal Technical Service Bulletins, notifying only the dealers about the problem, but offering no meaningful solution, warranty coverage or recall for consumers.

The lawsuit also states that Acura owners are not only out the cost of potential replacement. According to the lawsuit filed in the US District Court for the Northern District of California, owners find themselves with cars that are less valuable than comparable cars with properly functioning hands-free systems. The lawsuit seeks reimbursement for vehicle owners related to the defect and an injunctive order to end Honda’s concealment of the defect and denial of warranty coverage for repairs related to the HandsFreeLink™ defect.

Go get ‘em!

Top Settlements

Shell Gift Cards not so Giving? Shell got nailed for some hanky panky with its gift and fuel rewards cards this week.

Santa Cruz District Attorney Jeffrey S. Rosell settled a consumer fraud and false advertising class action lawsuit brought by his office against Equilon Enterprises LLC, dba Shell Oil Products US (“Shell”).

The specific allegations were that Shell: (1) failed to adequately disclose that certain advertised discounts for using gift cards and fuel rewards cards could not be combined; (2) advertised discounts on gasoline when purchased by a gift card that Shell knew or should have known were not being honored by all stations; (3) failed to redeem gift cards with balances of less than $10 for cash as required by California law; (4) failed to adequately disclose limitations to Shell’s rewards programs; and (5) falsely advertised that certain gift cards could “be used like cash,” when Shell knew or should have known some stations were charging customers the credit price for gasoline when purchasing with a gift card.

The Shell gift card judgment includes an injunction that requires Shell to: implement new technology at stations to address technical limitations that prevented advertised discounts from being combined; more adequately disclose any limitations on advertised discounts; provide increased training materials to help Shell stations address the issues in the complaint; and more prominently notify consumers about their gift card redemption rights and where to call with questions or complaints about Shell gift cards or fuel rewards cards.

Under the terms of the stipulated judgment, Shell has agreed to pay $762,500 in civil penalties, costs, and restitution, and to injunctive provisions to ensure future compliance. A task force composed of the Santa Cruz County District Attorney’s Office, along with District Attorneys from Alameda, Monterey, Napa, Sonoma, Santa Clara and Solano counties conducted the investigation and filed the action in Alameda County.

Ok, that’s a wrap folks… See you at the Bar!

Week Adjourned: 7.29.16 – Kroger, T-Mobile, Enbridge Energy

Top Class Action Lawsuits

Good Food Gone Bad…it’s the subject of a food poisoning class action lawsuit filed against the Kroger Co., The Pictsweet Co. and CRF Frozen Foods LLC and frozen vegetable manufacturers over allegations that the family of Roger Coffelt Jr., was made sick from Listeria contaminated foods. That’s not funny.

Coffelt Jr. filed the complaint alleging the peas his family ate caused illness to and Listeria infection of Coffelt Jr.s’ family members. He claims The Kroger Co., The Pictsweet Co., CRF Frozen Foods LLC are responsible because the defendants allegedly had grown, processed and sold the adulterated subject frozen peas and maintained their food production and packing facilities in an unsanitary and unhygienic condition.

Coffelt, and all those in the class, are seeking damages for not more than $30,000,000 plus penalties, attorneys’ fees and costs and for such other and further relief as the court deems proper. The case is US District Court for the Central District of California Case number 5:16-cv-01471.

Orwellian Credit Checks by T-Mobile? According to an unfair business practices class action lawsuit filed by a consumer, yes.

Filed by Erik Shapiro on behalf of all others similarly situated, the T-Mobile complaint states that in February 2014, Shapiro contacted the defendant to inquire about its phone plans and the possibility of switching his provider to T-Mobile. He alleges that the defendant performed a hard credit check on him, rather than a soft credit check as they stated they would do. As a result of the defendant’s action, the plaintiff sustained damages.

The plaintiff holds T-Mobile USA Inc. responsible because the defendant allegedly misrepresented to plaintiff that they would only do a soft credit check but did a hard credit check without plaintiff’s permission and consent. If true—really not good.

Heads up—the case is US District Court for the Central District of California Case number 2:16-cv-04698-RGK-MRW.

Top Settlements

Oil Spill Settlement…A long time in coming—but at least it’s here—a $177 million settlement agreement has been reached between Canadian pipeline operator Enbridge Energy Limited Partnership and the US federal government regarding the 2010 oil spills in Michigan and Illinois.

The US Environmental Protection Agency and the Department of Justice announced a settlement with Enbridge Energy Limited Partnership and several related Enbridge companies to resolve claims stemming from its 2010 oil spills in Marshall, MI and Romeoville, IL.

Enbridge has agreed to spend at least $110 million on a series of measures to prevent spills and improve operations across nearly 2,000 miles of its pipeline system in the Great Lakes region. Enbridge will also pay civil penalties totaling $62 million for Clean Water Act violations—$61 million for discharging at least 20,082 barrels of oil in Marshall and $1 million for discharging at least 6,427 barrels of oil in Romeoville.

In addition, the proposed settlement will resolve Enbridge’s liability under the Oil Pollution Act, based on Enbridge’s commitment to pay over $5.4 million in unreimbursed costs incurred by the government in connection with cleanup of the Marshall spill, as well as all future removal costs incurred by the government in connection with that spill. The settlement includes an extensive set of specific requirements to prevent spills and enhance leak detection capabilities throughout Enbridge’s Lakehead pipeline system – a network of 14 pipelines spanning nearly 2,000 miles across seven states. Enbridge must also take major actions to improve its spill preparedness and emergency response programs. Under the settlement, Enbridge is also required to replace close to 300 miles of one of its pipelines, after obtaining all necessary approvals.

Ok, that’s a wrap folks… See you at the Bar!

Week Adjourned: 7.22.16 – Apple, Blue Shield, Herbalife

Top Class Action Lawsuits

Bad Apple, Again? Yet another lawsuit against Apple, this one set to take a bite over allegations of consumer fraud surrounding devices that are replaced via AppleCare+ warranty with refurbished replacements that don’t meet a specific clause in the contract.

Filed in California, on behalf of plaintiff Vicky Maldonado and others similarly situated, the proposed class action alleges the clause claiming refurbished devices are “equivalent to new in performance and reliability” is false.

According to the Apple lawsuit allegations, a refurbished device is a “secondhand unit that has been modified to appear to be new” and therefore can’t be equivalent in durability and functionality as a new unit. Maldonado filed the suit after she purchased a third generation iPad and then cracked the screen after owning it for six months.

As the damage to Maldonado’s iPad was accidental in nature, she was forced to replace her tablet at an out of pocket cost of $250, according to the suit. However, she was told that for another $100 the AppleCare+ program would replace the tablet if similarly damaged in the future. Allegedly, the replacement iPad Maldonado was given under the warranty did not function properly and since it had impaired functionality, the tablet wasn’t equivalent to new, the suit asserts.

Following this, in 2013 Maldonado bought another iPad, a fourth generation model. She claims that she wasn’t informed that she would get a refurbished device if she damaged the tablet. When she tried to get a repair for the device in May 2015, she was given a refurbished device instead. According to court filings, she claims the device she received wasn’t equivalent to that of a new device either in performance or reliability.

Policy Policing Needed? Blue Shield got slapped with a consumer fraud class action lawsuit this week, filed by enrollees who allege the insurer owes its members another $35 million in rebates due to errors in its medical-loss ratio calculation of 2014. That’s some accounting error, if true…

Brought by plaintiffs Becky Ebenkamp and Rebecca Morris, the Blue Shield class action lawsuit seeks to represent more than 446,000 individual policy holders from that year.

According to federal law, insurers are required to issue refunds if they don’t spend at least 80 percent of premium dollars on medical care or on improving the quality of care. The complaint alleges Blue Shield improperly counted certain payments as medical expenses it had made erroneously in 2014 to providers who were not in its network and patients whose coverage had lapsed. By counting those mistaken payments as legitimate medical expenses, Blue Shield pushed itself closer to the 80 percent threshold, thus reducing the size of the refunds it owed, according to the complaint.

The lawsuit states that under the consumer refund rule, those payments should have been logged as administrative expenses, and Blue Shield customers are therefore entitled to a bigger refund.

The rebate rule, part of the Affordable Care Act, is intended to contain the cost of health coverage by limiting the share of premiums insurers can spend on administrative functions, executive salaries, overhead and profits. If an insurer spends only 75 percent of premium dollars on care, for example, it must send refund checks to enrollees equal to 5 percent of the premiums they paid.

Who knew? Ah, precisely.

Top Settlements

Herbalife to Pay Up…Remember that old adage, if it sounds too good to be true? Well, Herbalife International of America, Inc., Herbalife International, Inc., and Herbalife, Ltd. have agreed to fully restructure their US business operations and pay $200 million to compensate consumers to settle Federal Trade Commission (FTC) consumer fraud charges that the companies deceived consumers into believing they could earn substantial money selling diet, nutritional supplement, and personal care products.

In its complaint against Herbalife, the FTC also charged that the multi-level marketing company’s compensation structure was unfair because it rewards distributors for recruiting others to join and purchase products in order to advance in the marketing program, rather than in response to actual retail demand for the product, causing substantial economic injury to many of its distributors.

According to the FTC’s complaint, Herbalife claims that people who participate can expect to quit their jobs, earn thousands of dollars a month, make a career-level income, or even get rich. But the truth, as alleged in the FTC complaint, is that the overwhelming majority of distributors who pursue the business opportunity earn little or no money.

For example, as stated in the complaint, the average amount that more than half the distributors known as “sales leaders” received as reward payments from Herbalife was under $300 for 2014. According to a survey Herbalife itself conducted, which is described in the complaint, Nutrition Club owners spent an average of about $8,500 to open a club, and 57 percent of club owners reported making no profit or losing money.

The small minority of distributors who do make a lot of money, according to the complaint, are compensated for recruiting new distributors, regardless of whether those recruits can sell the products they are encouraged to buy from Herbalife.

Finding themselves unable to make money, the FTC’s complaint alleges, Herbalife distributors abandon Herbalife in large numbers. The majority of them stop ordering products within their first year, and nearly half of the entire Herbalife distributor base quits in any given year.

The Herbalife settlement requires Herbalife to revamp its compensation system so that it rewards retail sales to customers and eliminates the incentives in its current system that reward distributors primarily for recruiting. It mandates a new compensation structure in which success depends on whether participants sell Herbalife products, not on whether they buy products.

The settlement also prohibits Herbalife from misrepresenting distributors’ potential or likely earnings. The order specifically prohibits Herbalife from claiming that members can “quit their job” or otherwise enjoy a lavish lifestyle.

In addition, the order imposes a $200 million judgment against Herbalife to provide consumer redress, including money for consumers who purchased large quantities of Herbalife products (such as many Nutrition Club owners, among others) and lost money. Information on the FTC’s redress program will be announced at a later date.

Ok, that’s a wrap folks… See you at the Bar!

Week Adjourned: 7.15.16 – Snapchat, Caterpillar, 21st Century Fox

Top Class Action Lawsuits

Snapchat got Slapped…with a potential consumer fraud and unfair business practices class action lawsuit this week—over allegedly exposing minors to “harmful, offensive, prurient, and sexually offensive” content without warning.

Here’s the skinny: the Snapchat lawsuit was filed by the mother of a 14 year old boy (John Doe), who alleges publishers are sharing content that parents would likely prohibit if they knew their children were being given unrestricted access. The complaint highlights stories like Buzzfeed’s “23 Pictures That Are Too Real If You’ve Ever had Sex With A Penis,” (illustrated with scenes from Disney animated movies) and Vice’s “Everything You Ever Wanted To Know About Penis Tattoos.” Who knew there was such a thing—?

According to the proposed suit, “Innocent pictures from John’s favorite Disney movies were perverted into obscene sexual images and text.” Nice.

Additionally, the offensive content is mixed with messages from Snapchat stating things like, “If They Don’t Snap You On A Daily Basis It Isn’t Real,” according to the complaint.

Snapchat allows users to send photos and videos that disappear. According to the suit, while the app is frequently accused of promoting sexting among teens, parents may not be aware of the explicit content being shared on Discover by media outlets, without any warning or age verification.

“Although Snapchat claims to have pivoted away from its founding roots which included promoting surreptitious ‘sexting’ with disappearing text and images, the content Snapchat develops and curates on Snapchat Discover paints a different and dangerous picture,” the lawsuit states.

Created in 2015, Snapchat Discover was designed as a place where handpicked media outlets could share content. According to the complaint, “Snapchat exercises direct control over its editorial content and what is published.”

The suit alleges that while Snapchat’s terms of service does say that its app is restricted to users older than 13 years old, it does not warn against potential offensive content found on Snapchat Discover.

Top Settlements

Caterpillar Exhaust(ed)…Here’s a beauty. Caterpillar Inc, has reached a preliminary $60 million settlement agreement in a defective products class action lawsuit alleging its engines equipped with exhaust emission control systems failed to work reliably, costing owners thousands.

The lawsuit claimed Caterpillar engines with the CAT Regeneration System (CRS), failed, causing the company’s ACERT C13 and C15 on-highway diesel engines to lose horsepower and shut down. The alleged defect resulted in Caterpillar-authorized dealer technicians having to repair the engines, they allegedly could not effectively do.

The Defendant denies the allegations in the lawsuit, and the Court has not decided who is right.

The Settlement offers payments to current and former owners and lessees of vehicles with EPA 2007 Compliant Caterpillar On Highway C13 and C15 engines (manufactured in 2006, 2007, 2008, and 2009) (“Subject Engines”).

Caterpillar introduced its ACERT engines as their alternative to exhaust-gas recirculation, or EGR, to meet 2004 emissions standards.

Class members who experienced no CRS-related repairs are eligible to receive, but not guaranteed, $500 for each subject engine.

Class members who experienced one to five qualified CRS-related repairs are eligible to receive, but not guaranteed, $5,000 per subject engine.

Those class members who experienced six or more qualified CRS-related repairs are eligible to receive, but not guaranteed, $10,000 per subject engine.

Each eligible class member also has the option—instead of seeking a payment as set forth above—to seek to claim losses up to a maximum of $15,000, experienced as a consequence of qualified CRS-related repairs. These losses can include but will not be limited to towing charges, rental charges and hotel charges. Proofs can include receipts, invoices, bills, etc.

All class members must file a claim in order to receive a payment.

The deadline to exclude yourself from the settlement is August 6, and the deadline to object to the settlement is August 21. The final fairness hearing is scheduled fro September 20, 2016.

Film Studio Interns Win One…Bit of a landmark this week—the employment class action lawsuit filed by interns who worked at 21st Century Fox Inc, and who alleged they should have been paid for their work at the company, but were not, reached a preliminary settlement this week.

According to court papers, Fox Searchlight Pictures and Fox Entertainment Group will pay $495 to each claimant who interned without pay for at least two weeks at various times between 2005 and 2010. Estimates suggest several dozen people are eligible to receive a share of the film studio intern settlement.

The ground breaking lawsuit sparked other, similar suits involving students and recent college graduates who alleged they worked free during their internships when, given their duties, they should have been paid. The lawsuits claim violations of state and federal minimum wage laws.

The two named plaintiffs in the 21st Century Fox class action, Eric Glatt and Alexander Footman, who interned on the 2010 movie “Black Swan,” would be paid a respective $7,500 and $6,000, provided the settlement agreement receives final court approval.

Ok, that’s a wrap folks… See you at the Bar!

Week Adjourned: 7.8.16 – UPS, Home Depot, Cash Store

Top Class Action Lawsuits

UPS not Delivering… on reporting pay, allegedly. The global courier service got hit with a UPS employment class action lawsuit this week, alleging the company cheated employees out of their rightful wages by failing to pay “Reporting Pay,” as required by Massachusetts law.

Cort Szafarz, the named plaintiff in the lawsuit, worked as a part-time package handler at UPS from September 2014 to May 2015 in their Chelmsford, Massachusetts facility. He was scheduled to work Monday through Friday from 6pm to 11pm. Although he planned to work for the full shift every weekday, and showed up at the Chelmsford facility every weekday ready to do so, his shift was often cancelled or shortened due to a lack of work. On such days, Mr. Szafarz and others were not paid for at least three hours of work. When Mr. Szafarz complained to Human Resources, he was told, “That’s just the way we do it here.”

Massachusetts, like many other states, requires employers to pay employees who show up for their scheduled shift, but are sent home due to a lack of work. This “Reporting Pay” law, as it is known, requires employers in Massachusetts to pay an employee for at least three hours of work, at the minimum wage, for every shift cancelled or shortened after an employee’s arrival at the job site.

Mr. Szafarz seeks to represent a class of other UPS hourly employees in Massachusetts who, like him, were not paid appropriately when their shifts were cancelled or shortened.

Giddy up!

They can Help? Maybe not at Home Depot… Consumer fraud class action against Home Depot hoping for a home run. This week the DIY giant found itself on the end of a consumer fraud class action lawsuit over allegations it failed to provide services and products as agreed.

To narrow that down just a bit, the Home Depot lawsuit, filed by plaintiff Ellen Coffen of California, claims that Coffen purchased new cabinets from the defendant for $12,000 with a $3,000 installation fee and additional $50 fee.

But… the cabinets Coffen purchased didn’t fit in the space designated for the kitchen installation, despite the fact that Home Depot installers had measured the space prior to their installation. Coffen claims that as a result, she had to return the cabinets to the defendant. Further, she had to pay for the second round of installation and the second set of new cabinets. Coffen asserts that the defendant allegedly failed to perform its duties and offer resolution when this issue arose.

Coffen states in the suit that Home Depot is in fact responsible as the DIY store allegedly assured her that they obtained the right measurement of the space to accommodate the cabinets that she purchased and that the cabinets were to be installed as part of their agreement.

The lawsuit cites alleged fraud and deceit, negligent infliction of emotional distress, breach of the implied covenant of good faith and fair dealing, breach of express and implied warranties, false advertising, violation of the Magnuson-Moss Warranty Act and unfair business practices.

The case is US District Court for the Northern District of California, San Francisco Division Case number 3:16-cv-03302-MEJ.

Top Settlements

Meanwhile—back in Canada…Cash Store and Instaloans may need to borrow some dough. They have to pony up $10 million in settlement of a consumer fraud class action pending against the now defunct business. Class members in Ontario who took out loans, also called lines of credit, will now be able to collect their share of the settlement.

The lawsuit, which represents some 100,000 customers, alleged that Cash Store Financial Services Inc., broke the Payday Loans Act by exceeding the maximum cost of borrowing allowed. According to Ontario law, it is illegal for payday lenders to charge more than $21 on every $100 lent. The plaintiffs claims that the defendant skirted the rules around maximum interest rates by adding additional fees for setting up debit cards, bank accounts, and other products.

At its peak, the Cash Store Financial Services Inc, had 500 outlets at its peak.

Ontarians who took out payday loans, or so-called lines of credit from either Cash Store or Instaloans after September 1, 2011 are being asked to file claims to recover some of the illegal fees and interest they were charged.

Eligible class members with approved claims could receive at least $50, with some, including those who took out multiple loans, possibly receiving more. The final amounts will depend on how many claims are submitted. Timothy Yeoman filed the lawsuit was filed in 2012 alleging he borrowed $400 for nine days and was charged $68.60 in fees and service charges as well as $78.72 in interest, bringing his total borrowing cost to $147.32.

Cha Ching!!

Ok, that’s a wrap folks… See you at the Bar!

Week Adjourned: 7.1.16 – Pampers, Volkswagen, Wells Fargo SPAM

Top Class Action Lawsuits

Pampers Not So Pampering? The makers of Pampers Natural Clean baby wipes, Procter and Gamble (P&G), got hit with a consumer fraud class action complaint this week, over allegations its advertising ain’t clean.

Filed by Veronica Brenner, on behalf of all others similarly situated, the proposed Pampers wipes class action lawsuit claims that due to the false claims made by P&G, Brenner was misled into buying Pampers Natural Clean baby wipes.

Specifically, she alleges that testing of the wipes revealed they contain unnatural and harmful ingredients such as phenoxyethanol, which allegedly could cause harm to consumers, especially infants.

Brenner is seeking a jury trial and is seeking compensatory, statutory, and punitive damages, injunctive relief enjoining the defendant, interest, restitution and any other forms of monetary relief, court costs and any further relief the court grants.

The case is US District Court for the Central District of California Case number 8:16-cv-01093-CJC-JCG.

Top Settlements

VW To Pay…So, by now almost everyone must be aware that Volkswagen (VW) has reached agreements with the United States and the State of California, and the U.S. Federal Trade Commission (FTC), that will see it stump up $14.7 billion—the largest such payout of its type in US history—to end consumer fraud allegations over the now infamous VW emissions scandal.

Now, just to be clear, the settlements do not resolve pending claims for civil penalties or any claims concerning 3.0 liter diesel vehicles. Nor do they address any potential criminal liability. So stay tuned on that front.

The information on the settlements is provided more comprehensively on our dedicated Volkswagen emissions settlements page—BUT the super short versions are that VW will offer consumers a buyback and lease termination for nearly 500,000 model year 2009-2015 2.0 liter diesel vehicles sold or leased in the US, and spend up to $10.03 billion to compensate consumers under the program. In addition, the companies will spend $4.7 billion to mitigate the pollution from these cars and invest in green vehicle technology.

Additionally, the settlements partially resolve allegations by the Environmental Protection Agency (EPA), as well as the California Attorney General’s Office and the California Air Resources Board (CARB) under the Clean Air Act, California Health and Safety Code, and California’s Unfair Competition Laws, relating to the vehicles’ use of “defeat devices” to cheat emissions tests. The settlements also resolve claims by the FTC that Volkswagen violated the FTC Act through the deceptive and unfair advertising and sale of its “clean diesel” vehicles.

The affected vehicles include 2009 through 2015 Volkswagen TDI diesel models of Jettas, Passats, Golfs and Beetles as well as the TDI Audi A3.

The Buyback option: Volkswagen must offer to buy back any affected 2.0 liter vehicle at their retail value as of September 2015 — just prior to the public disclosure of the emissions issue. Consumers who choose the buyback option will receive between $12,500 and $44,000, depending on their car’s model, year, mileage, and trim of the car, as well as the region of the country where it was purchased. In addition, because a straight buyback will not fully compensate consumers who owe more than their car is worth due to rapid depreciation, the FTC order provides these consumers with an option to have their loans forgiven by Volkswagen. Consumers who have third party loans have the option of having Volkswagen pay off those loans, up to 130 percent of the amount a consumer would be entitled to under the buyback (e.g., if the consumer is entitled to a $20,000 buyback, VW would pay off his/her loans up to a cap of $26,000).

The EPA-approved modification to vehicle emissions system: The settlements also allow Volkswagen to apply to EPA and CARB for approval of an emissions modification on the affected vehicles, and, if approved, to offer consumers the option of keeping their cars and having them modified to comply with emissions standards. Under this option in accordance with the FTC order, consumers would also receive money from Volkswagen to redress the harm caused by VW’s deceptive advertising.

Consumers who leased the affected cars will have the option of terminating their leases (with no termination fee) or having their vehicles modified if a modification becomes available. In either case, under the FTC order, these consumers also will receive additional compensation from Volkswagen for the harm caused by VW’s deceptive advertising. Consumers who sold their TDI vehicles after the VW defeat device issue became public may be eligible for partial compensation, which will be split between them and the consumers who purchased the cars from them as set forth in the FTC order.

Wells Fargo SPAM Settlement… Another settlement to report this week—on the spam text messaging front. Wells Fargo Bank, N.A. (Wells) has agreed to a preliminary $16.3 million settlement to end claims it made unauthorized calls to customers’ cell phones using an Automatic Telephone Dialing System (ATDS), in violation of the Telephone Consumer protection Act (TCPA).

The lawsuit, originally filed on April 14, 2015, alleged that the calls at issue were, without exception, non-emergency, debt-collection calls and texts made in connection with Home Equity Loans and Residential Mortgage Loans.

Under the terms of the proposed settlement, Wells would pay a non-reversionary cash sum of approximately $16,319,000, which, after deductions for costs and attorney’s fees, would be distributed on a pro rata basis to the Class Members who file qualified claims. The expected per-class-member cash award, while dependent upon the number of claims, may be in the range of $25 to $75.

The proposed Settlement Class is defined as: All users or subscribers to a wireless or cellular service within the United States who used or subscribed to a phone number to which Wells made or initiated one or more Calls during the Class Period using any automated dialing technology or artificial or prerecorded voice technology, according to Wells available records, and who are within Subclass One and/or Two.

Subclass One consists of “persons who used or subscribed to a cellular phone number to which Wells Fargo made or initiated a Call or Calls in connection with a Residential Mortgage Loan.”

Subclass Two consists of “persons who used or subscribed to a cellular phone number to which Wells Fargo made or initiated a Call or Calls in connection with a Home Equity Loan.”

Heads Up—a person who is a member of both Subclasses is eligible to make two claims on the Settlement Fund. The three Class Representatives are seeking awards for their time and effort on behalf of the Class, and Wells has agreed not to object to such incentive payments to be paid to Davis, Markos, and Page from the Settlement Fund provided that the payments do not exceed $60,000 in the aggregate or $20,000 for each Class Representative, subject to Court approval.

The case is Markos v. Well Fargo Bank, N.A. (United States District Court for the Northern District of Georgia, Case No. 1:15-CV-01156).

Ok, that’s a wrap folks… Happy Canada Day and Fourth of July…. See you at the Bar!