Wells Fargo - Part 2

Week Adjourned: 1.3.15 – Apple, GM, Wells Fargo

The Week’s Top Class Action Lawsuits and Settlements. Top stories include Apple, GM and Wells Fargo.

Top Class Action Lawsuits

Another year, another Apple Lawsuit. Yup. This week, iPhone users in Miami filed a consumer fraud class action lawsuit against Apple Inc, alleging the Cupertino-based tech giant greatly overstated the storage capacity of devices that run its latest mobile operating system, iOS 8.

Lead plaintiffs filed the complaint in U.S. District Court in Northern California claiming operating system itself requires a significant percentage of the storage capacity on the iPhones, iPads and iPods that run it, thereby making a large portion of the advertised space unavailable to device owners.

According to the lawsuit, in some cases, the space used is 23.1 percent. Further, the complaint alleges, Apple entices customers in need of more space to pay for extra storage on iCloud.

“Using these sharp business tactics, [Apple] gives less storage capacity than advertised, only to offer to sell that capacity in a desperate moment, e.g., when a consumer is trying to record or take photos at a child or grandchild’s recital, basketball game or wedding,” the lawsuit states. “To put this in context, each gigabyte of storage Apple shortchanges its customers amounts to approximately 400-500 high resolution photographs.”

The plaintiffs allege Apple is violating California laws prohibiting unfair competition and false advertising. They claim that reasonable consumers do not expect the “marked discrepancy” between the advertised level of storage capacity and the available level of capacity on Apple devices running the OS.

GM’s Record Year? GM must be facing some kind of record for the number of defective automotive class action lawsuits filed against it in 2014. The latest GM lawsuit, filed in December, alleges a defect in the steering system of its Chevrolet Volts which causes the steering wheel to freeze intermittently while driving. Yes—that could certainly cause a few problems.

Filed in New Jersey federal court, by plaintiffs Christopher Johnson and Tara Follari-Johnson, the GM lawsuit claims that GM knew, or should have known, about the alleged defect, but continued to sell the cars. The lawsuit further claims that the alleged defect poses a hazardous safety risk to drivers and that even when GM agrees to fix the steering system, it only replaces the allegedly defective steering rack with the same or similarly defective components.

“When class members present to GM’s authorized dealerships complaining of the steering defect, the dealerships recommend repairs such as replacing the steering rack or steering gear assembly,” the plaintiffs said. “However, these repairs only temporarily mask the problem.”

The lawsuit alleges GM is in violation of the New Jersey Consumer Fraud Act and the Magnuson-Moss Warranty Act, and in breach of implied warranty of merchantability and express warranty and common law fraud.

The plaintiffs propose to represent a nationwide class of owners and lessees of 2011-2014 Chevrolet Volt bought or leased new in New Jersey and a subclass of national class members who live in New Jersey. There are at least 100 members of the proposed class, according to the plaintiffs, and their claims are more than $5 million.

“Complaints that consumers filed with National Highway Traffic Safety Administration and posted in discussion forums demonstrate that the defect is widespread and dangerous and that it manifests without warning,” the complaint states. “The complaints further indicate defendants’ knowledge of the defect and its danger.”

Top Settlements

Wells Fargo Agreed to Pony Up $14.5 million as part of a preliminary settlement agreement reached in a Telephone Consumer Protection Act (TCPA) class action lawsuit. The lawsuit was brought on behalf of millions of customers who alleged Wells Fargo Bank NA called them on their cellphones to collect credit card debt.

Brought by lead plaintiff Lillian Franklin, the Wells Fargo settlement motion, if approved, will resolve her suit claiming the bank violated the Telephone Consumer Protection Act by making automated calls to alleged debtors without their consent. She filed suit in August, claiming the financial institution called her multiple times on her cellphone in 2010, to collect an alleged debt on her credit card. The calls featured a pre-recorded message and were made without Franklin’s consent, according to the lawsuit.

According to the settlement terms, a settlement fund will be shared evenly between class members who submit claims. Currently, the class consists of 4 million members. The fund will established after consideration of attorneys’ fees and administration costs, according to the motion.

The case is Franklin v. Wells Fargo Bank NA, case number 3:14-cv-02349, in the U.S. District Court for the Southern District of California.

Hokee Dokee—That’s a wrap folks…Time to adjourn for the week. Happy New Year!

Week Adjourned: 4.18.14 – Prime Healthcare, Wells Fargo, Compass Health

The week’s top class action lawsuits and settlements. Top stories from Prime Healthcare, Wells Fargo and Compass Health.

Top Class Action Lawsuits

Not Paid for Prime Time? What would the week be without an employment class action? This week, among several employment class actions filed, is one against Prime Healthcare Centinela LLC alleging California labor law violations, specifically underpayment of overtime and failure to provide meal and rest breaks to 400 employees at its 12 California hospitals.

In the Prime Healthcare class action, a social worker for Prime Healthcare’s subsidiary since March 2011, alleges “In violation of state law, defendants have knowingly and willfully refused to perform their obligations to compensate plaintiffs for all wages earned and all hours worked.” And “As a direct result, plaintiffs have suffered, and continue to suffer, substantial losses related to the use and enjoyment of such wages.”

The lawsuit, Beauchamp et al. v. Prime Healthcare Centinela LLC et al., case number BC542351, in the Superior Court of the State of California, County of Los Angeles, claims that Prime Healthcare established policies under which hourly employees would be “taken off the clock” for a variety of reasons, including the indicating the end of a worker’s official shift or falsely accounting that a meal break was taken when the employee was actually forced to continue working.

According to the allegations, while Prime Healthcare frequently required its employees to work in excess of eight hours per day and over 40 hours per week, it failed to pay them one and a half times the regular hourly rate as required under California law.

Further, the lawsuit claims Prime Healthcare failed to provide its employees with accurate wage statements and failed to pay separated employees the amounts they were owed in a timely manner.

Beauchamp filed the lawsuit on behalf of all hourly, nonunionized social workers and others in similar positions, claiming the company established policies for employees to clock out when they were still working and did not compensate them for overtime hours worked.

The class action seeks to represent all hourly nonexempt social workers, discharge planners, case managers and others who worked for Prime Healthcare since April 2010, a class she estimates to include 400 people at 12 hospitals.

De-Fault of the Bank? Maybe…If the allegations in this new consumer banking and lending violations class action lawsuit prove true, then yes. Wells Fargo Bank NA is facing a potential lawsuit alleging it violated California consumer laws by billing late fees to, or foreclosing on, state homeowners who had loan modification applications pending with the bank. Something referred to as Dual Tracking. Read on.

The Wells Fargo lawsuit, Garcia et al. v. Wells Fargo Bank NA et al., case number 8:14-cv-00558, in U.S. District Court for the Central District of California, alleges Wells Fargo practices “dual tracking”, which is when a bank pursues a foreclosure while simultaneously processing loan modifications. On January 1, 2013, the California Homeowner Bill of Rights was enacted, forbidding this behavior.

“Because the dual-tracking system prevents homeowners from being evaluated for appropriate loan modifications before foreclosure, it has resulted in many unnecessary foreclosures,” the lawsuit states.

Lead plaintiffs, Orange County residents Henry and Renee Garcia, allege they applied for a loan modification with Wells Fargo but that the bank charged them $840 in late fees and prepared to foreclose on the property before the application process was complete. The bank later rejected the application, verbally denied their appeal, and scheduled the home for trustee sale.

According to the lawsuit, the Garcias defaulted on the mortgage for their San Juan Capistrano, CA, home on March 6, 2013. The following month they submitted a loan modification application to Wells Fargo and over the next several months they stayed in frequent communication with bank officials.

However, simultaneous to the processing of the Garcias’ application Wells Fargo recorded a notice of trustee sale on their home, moving forward with the foreclosure process in violation of the state’s consumer protection law, according to the lawsuit. It wasn’t until the following January that the Garcias loan application was denied, according to the complaint. Garcias appealed, but the bank denied the appeal in February and scheduled a trustee sale of the property for March 5, 2014.

In their lawsuit, the Garcias seek to establish two classes: one for alleged victims of dual tracking and another for homeowners who were illegally charged late fees.

The complaint alleges violations of the California Homeowner Bill of Rights’ restrictions on dual tracking and late fees and the California Unfair Competition Law. The plaintiffs are seeking class certification, unspecified damages and restitution, and injunctive relief forbidding the bank from engaging in the alleged activity.

Top Settlements

Next Time Ask for Directions? With a name like Compass, you’d think they’d already know how not to go astray… At any rate, here’s proof that employment class actions are worth the effort—a proposed $1.1 million settlement has been reached in a class action accusing Compass Health Inc. of California labor law violations, specifically of underpayment of overtime. Heard that one before?

Under the terms of the settlement, Compass would pay a net settlement amount of up to $700,500 to all members of the settlement class, which is approximately 2,500 current and former hourly nonexempt employees in California who worked for Compass Health between March 29, 2009 and January 6 2014.

According to the lawsuit, the workers alleged Compass miscalculated the regular rate of pay because it didn’t properly include the value of annual safety bonuses. They also claimed meal and rest period violations on the part of the defendant, as well as derivative penalty claims.

Court documents indicated that based on the number of valid claims filed, the average settlement payment would be about $425, with the highest payment being roughly $1,050, which is “an excellent result for the settlement class, particularly when compared to other, similar wage and hour class action settlements involving similar-wage workers.”

Ok—Let’s celebrate that news—Happy Easter—and we’ll see you at the bar!

Week Adjourned: 5.17.13 – iPhone 4, Wells Fargo, Generic Drugs

The weekly wrap on top class action lawsuits and settlements for the week ending May 17, 2013. Top stories this week include iPhone 4, Wells Fargo and generic drugmaker Ranbaxy.

Top Class Action Lawsuits

Bad Apple! The god of tech gadgets got slapped this week—with a potential defective products class action lawsuit (yes, another one), alleging its iPhone 4 has a defective power button, effectively preventing the operator from being able to use the phone. This power button failure allegedly occurs shortly after the phone’s one year warranty expires. And doesn’t that just figure…

The Apple iPhone 4 class action lawsuit, filed by plaintiff Debra Hilton, Debra Hilton v. Apple Inc., Case No. 13-cv-2167, U.S. District Court for the Northern District of California, claims “The failure of the power button that has plagued the iPhone 4 is more than an inconvenience… As a method by which the phone is toggled on and off, the failure of the button precludes general use of the phone and thereby effectively prevents iPhone 4 owners from being able to use the phone.” Yup.

According to the lawsuit, Hilton alleges the iPhone 4 power button defect is caused by the premature deterioration of a flex cable that connects the power button to the phone. When this cable deteriorates, the power button becomes harder and harder to depress, and eventually fails to work. Yup.

The iPhone 4 lawsuit contends that thousands of consumers who purchased the iPhone 4 have experienced this failure forcing them to throw away their phone or pay Apple $149.99 plus shipping for a replacement. Yikes! Better get on it boys.

Top Settlements

Two Better than One for Wells Fargo. Wells Fargo made headlines twice this week, two settlements to report—both biggies. The first was a judicial order to reinstate a $203 million judgment against the bank in settlement of an overdraft fees class action lawsuit.

In a nutshell, the judgment, based upon the court’s findings, as affirmed on appeal by the Ninth Circuit, states that Wells Fargo violated California’s unfair competition law by deceiving its customers that debit card purchases would be posted chronologically to their accounts when in fact Wells Fargo posted them in a high-to-low order for the sole purpose of generating overdraft fees.

The case was brought on behalf of California Wells Fargo customers who, from November 15, 2004 to June 30, 2008, incurred overdraft fees on debit card transactions as a result of the bank’s practice of sequencing transactions from highest to lowest.

The second settlement with Wells Fargo’s name on it involves a force-placed insurance class action lawsuit brought by homeowners in Florida. (Force-placed insurance, btw, is sometimes referred to as “lender placed insurance”.) The lawsuit alleged that the homeowners were overcharged for the insurance, and that Wells Fargo unfairly took commission on the insurance, which it assigned to the homeowners through QBE.

The class was certified in 2012, and more than 24,000 homeowners were notified. During the class period, from April 2006 to February 2013, the class members were charged $77 million for force-placed insurance, according to the settlement documents, the South Florida Business Journal reports.

But wouldn’t you know it, just two months before they were due to go to court, the parties reached a $19.5 million settlement.

The settlement will provide a refund of the amount charged for force-placed insurance to the members of the class. Borrowers who were charged and paid the premium will be refunded 25 percent in cash. Those who were charged the premium but didn’t pay will get a credit of 25 percent off their bill.

Bet those homeowners are breathing a huge sigh of relief this weekend.

Largest Generic Drug Safety Fine. Ever. We’d be completely remiss if we didn’t mention this one… Ranbaxy has pled guilty to federal drug safety violations and will pay $500 million in fines to resolve the claims. The generic drug manufacturer is alleged to have sold subpar drugs and made false statements to the Food and Drug Administration (FDA) about its manufacturing practices at two factories in India.

According to the Justice Department, the settlement is reportedly the largest in history involving a generic drug maker. Part of the settlement involves Ranbaxy pleading guilty to three felony counts of violating the federal drug safety law and four of making false statements to the FDA.

According to a report by the New York Times, Ranbaxy acknowledged it had failed to conduct proper safety and quality tests of several drugs manufactured at its Indian plants, known as Paonta Sahib and Dewas, including generic versions of many common medicines, such as the epilepsy drug gabapentin, and the antibiotic ciprofloxacin.

In the case of gabapentin, also known as Neurontin, Ranbaxy reportedly admitted that between June and August in 2007, it was aware that certain batches had tested positive for “unknown impurities” and had unreliable shelf lives. Nevertheless, the company didn’t report this to the FDA and announce a recall until October of that year. The recall ultimately involved more than 73 million pills.

Further, testing of certain batches of drugs to ensure their effectiveness was reportedly not done for weeks or months after the company had told the FDA the testing had been carried out.

Ranbaxy has set aside $500 million in anticipation of the penalties, which will break down as a $150 million in a criminal fine and forfeiture, and the remainder going to settle civil claims brought by the federal government and all 50 states. A former Ranbaxy executive who alerted the federal government to the problems will receive close to $49 million in compensation for his role as a whistleblower, the Times reports.

That’s a wrap. It’s cocktail hour—somewhere in the world—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: 10.30.09

Bit of irony, no? The Age of the Overtime Class Action…

Top Class Actions

Wells, It’s Official… Wells Fargo is now facing a wages and overtime class action filed by technical support staff who allege that they were not paid for time worked in excess of 40 hours per week.

The suit covers all network engineers, operating systems engineers, information security analysts, technical service specialists, systems support analysts, web engineers, web support engineers, web systems engineers, operating systems analysts (level 2), systems QA analysts (levels 2 or 3), computer operations analysts (levels 3 or 4), database administrators (levels 2 or 3), and applications systems engineers (level 3) who worked for Wells Fargo as exempt employees at any time during the past three years anywhere in the United States. It is estimated that about 3,000 employees are eligible to participate in the unpaid overtime class action.

Eligible employees have 75 days to join the lawsuit.

BOA Constricting Overtime Pay? And then there’s Bank of America: A lawsuit was filed this week on behalf of telephone-dedicated employees for unpaid wages and overtime worked at company call centers across the country. The lawsuit was filed as a collective action, which Continue reading “Week Adjourned: 10.30.09”

Week Adjourned: 9.4.09

Some SunTrust HELOC customers found themselves minus a line of credit It was a big class action week on the home front…

Top Class Actions

Sun Trust HELOC: Now you see it, now you don’t? A potential class action suit was filed this week against Sun Trust Bank over allegations that the financial company decreased, froze or terminated thousands of Home Equity Lines of Credit (HELOC) in ways that may have violated its contractual obligations to its clients.

In a nutshell, HELOC loans provides credit up to a stated maximum amount within a certain term, the loan collateral being the borrower’s equity in his or her home.

One 82-year old lady had secured a HELOC of $500,000 against her home, only to have it Continue reading “Week Adjourned: 9.4.09”

Week Adjourned: 8.21.09

So much for the dog days of summer…it was a busy week.

Top Class Actions

[Pay]check is not in the mail? It seems every week a major brand is in the news for some alleged type of labor or wages violation. This week it’s UPS. The global courier company is facing a potential class action lawsuit over all ups-legal-env egations that it withheld as much as $100 million in overtime wages from its account managers.

The suit alleges that UPS is in violation of the Federal Fair Labor Standards Act and California’s wage and hour laws. The suit also alleges that UPS does not provide employees with mandatory meal periods and rest breaks and fails to keep adequate records of the hours the employees work. Who said management had it good? I would think that unpaid management overtime is a silent epidemic.

Vanishing home equity? Have you checked your home equity line of credit lately? Maybe you should. Michael Hickman of Illinois did, and got quite a nasty shock. Hickman alleges that he had Continue reading “Week Adjourned: 8.21.09”