Week Adjourned: 11.29.14 – Uber, Dollar General, Apple

The week’s top class action lawsuits and settlements. Top stories include Uber, Dollar General, Apple

UberTop Class Action Lawsuits

Uber Drivers being taken for a ride? Maybe… Uber Technologies got slapped with a class action filed by a Boston cabdriver who alleges the mobile app-based car service routinely violates the Fair Credit Reporting Act (FCRA) by using background checks without applicants’ knowledge or authorization to make hiring decisions.

Filed on behalf of lead plaintiff Abdul Mohamed, the Uber class action claims that by failing to obtain his authorization for a background check and not disclosing that the company would check his background when he applied for a job as an “Uber X” driver, Uber, its wholly-owned subsidiary Rasier LLC and their employment screening agency Hirease LLC knowingly violated fair credit reporting laws in Massachusetts and California in addition to the FCRA.

The lawsuit also claims that Uber violates the FCRA and state credit reporting laws by using background checks in hiring decisions without providing applicants with copies of their reports.

“In direct violation of the FCRA [and state laws], whenever adverse action is taken against an applicant on the basis of information disclosed on a consumer report, the defendants fail to afford the applicants the procedural safeguards mandated by law… including by failing to provide pre-adverse action notices and a reasonable opportunity to dispute information in such reports before taking adverse action,” the complaint states.

According to the Uber lawsuit, Mohamed applied to be an Uber X driver in September, after having previously worked for Uber as an “Uber Black” driver using his own car. Uber told him he must purchase a new car for the position, which he did at a cost of $25,000. Mohamed then began working as an Uber X driver in early October. However, on October 28, Mohamed received an email from Hirease stating that his contract with Rasier was terminated because of information obtained through a consumer reporting agency, the complaint states.

“[Uber and Rasier] terminated Plaintiff because Hirease’s consumer report concerning Plaintiff indicated he had a minor criminal record that, in fact, stems from his seven children receiving much-needed Medicaid benefits,” the lawsuit alleges. “[Uber] termination of Plaintiff deprived him of his livelihood and left him without an alternative means of providing for his family, including his seven children.” Mohamed alleges that despite an email stating he had received a copy of his consumer reports and rights under the FRCA, he did not receive the described materials.

Further, the lawsuit states that Mohamed did not have an opportunity to review the information on his consumer report and discuss it with Uber and Rasier.

As part of its employment screening services, Hirease provides a package that automatically generates pre-adverse action and adverse action notices to an applicant, along with a copy of the consumer report, whenever Hirease makes an adverse hiring decision based on pre-determined criteria.

“Consumer reporting agencies routinely provide a similar service and many employers purchase it,” the lawsuit states. “Uber and Rasier could have easily and cost-effectively complied with the mandates of the FCRA, CCRAA, and MCRA by purchasing such services, but failed to do so.”

The case is Mohamed v. Uber Technologies Inc et al., case number 3:14-cv-05200, in the U.S. District Court in the Northern District of California. 

Top Settlements

Dollar General Can’t Cheap Out on Its Staff. An $8.3 million settlement agreement has been approved by a federal judge in Alabama, potentially ending an unpaid overtime class action lawsuit pending against Dollar General. The Dollar General lawsuit alleged the discount retailer failed to properly pay store managers for overtime, in violation of the Fair Labor Standards Act (FLSA). The lawsuit dates back to 2006.

Specific allegations against Dollar General and its subsidiaries and sister companies, are that they required the store managers to work as much as 90 hours per week and misclassified them a exempt from overtime, even though they generally spent less than 10 hours weekly performing managerial duties. The settlement will cover some 2,722 individual claims.

According to the complaint, most of the store managers’ work hours involved non-managerial tasks such as operating cash registers. As a result, Dollar General allegedly short-changed the employees on overtime pay, according to the suit. Dollar General denied that it had misclassified the workers.

U.S. District Judge L. Scott Coogler granted approval of the settlement stating “The court finds that: the amended settlement agreement is fair; it reflects reasonable compromises of issues actually in dispute; the settlement was reached in an adversarial context in which the plaintiffs were represented by competent and experienced counsel; and the totality of the proposed settlement is fair and reasonable.”

The case is Richter v. Dolgencorp Inc. et al., case number 7:06-cv-01537, in the U.S. District Court for the Northern District of Alabama.

Settlement Takes a Bite out of Apple…Final approval of a $450 settlement has been granted ending an antitrust class action lawsuit against Apple Inc. The lawsuit alleged that Apple conspired publishers to raise e-book prices. While all the publishers settled their claims, only Apple went to trial.

The lawsuit was brought by the US Department of Justice and 33 states and claimed that in 2010 Apple signed distribution deals with five top publishers, namely Simon & Schuster Inc., Penguin Group USA, Macmillan Publishers USA, Hachette Book Group Inc. and HarperCollins Publishers LLC, that raised the prices for digital books from $9.99 to as much as $14.99. This resulted in consumers paying hundreds of millions of dollars. In July 2013, Judge Denise Cote ruled that Apple had “played a central role in facilitating and executing” the conspiracy. The company has since appealed that decision to the Second Circuit.

Under the terms of the settlement, consumers will receive $400 million. According to court documents, a claims administrator and e-book retailers have sent emails or postcards to almost 23 million addresses of people eligible to receive compensation.

The settlement contains a provision allowing Apple to pay $50 million to consumers and $10 million each to the states and class counsel if Judge Cote’s 2013 decision finding Apple liable is vacated and remanded on appeal or reversed and remanded with instructions for reconsideration or a new trial. If the decision is simply reversed, Apply will pay nothing.

The cases are In re: Electronic Books Antitrust Litigation, case number 1:11-md-02293, and State of Texas et al. v. Penguin Group (USA) Inc. et al., case number 1:12-cv-03394, both in the U.S. District Court for the Southern District of New York. 

Hokee Dokee—Time to adjourn for the week. Happy Thanksgiving!! Gobble Gobble!



Week Adjourned: 11.21.14 – Chrysler, Sephora, Boston Scientific

The top class action lawsuits and settlements for the week. Top stories include Chrysler, Sephora and Boston Scientific Mesh.

Chrysler LogoTop Class Action Lawsuits

Tipsy TIPMs? Topping the list this week? Another defective automotive class action lawsuit—surprise, surprise. Never would have guessed, right?

This one was filed in federal court against Chrysler Group LLC. The lawsuit seeks to hold the Big Three automobile maker accountable for economic losses suffered by owners and passengers of Chrysler cars and trucks that stalled, caught fire or sustained other potentially life-endangering malfunctions due to a faulty onboard computer.

The Chrysler lawsuit alleges that Chrysler knew about and fraudulently concealed the defectiveness of its Totally Integrated Power Module—TIPM, for short. Chrysler sought as far back as 2005 to hide the magnitude of the TIPM defect from consumers and initiated only limited vehicle recalls, the complaint alleges.

Despite knowing about the defect, Chrysler continued installing faulty TIPMs in vehicles until the 2014 model year, according to the complaint filed in the U.S. District Court for the Southern District of New York.

The TIPM is an integral component of many Chrysler, Dodge and Jeep models on the road today, the device controls and distributes power to all of a vehicle’s electrical functions. Prone to sudden failure, a vehicle’s TIPM poses a serious safety issue, placing the driver and passengers at risk of harm, the complaint indicates.

A failed TIPM causes malfunctioning of airbags, headlights, brakes, horns, wipers, windows, door locks and other components that rely on electrical functions.Worse, a failed TIPM can cause a vehicle’s engine to shut down unexpectedly while driving at high speeds.

“Millions of consumers who have bought into this brand have suffered harm because of Chrysler and its faulty Totally Integrated Power Module,” the complaint alleges.

Owners of defective TIPM-equipped Chrysler vehicles suffer economic losses in part because the device is expensive to replace, costing upward of $1,000. Also, because of the sheer number of vehicles requiring a new TIPM, consumers are forced to make do without their vehicles for many days and even weeks while their vehicles sit in the shop and wait for a replacement TIPM to be shipped. Adding insult to injury, the defect caused many motorists to incur unnecessary costs to replace non-defective parts that malfunctioned because of the faulty TIPM. 

Ugly Side of Beauty Biz? Sephora USA Inc. is facing a proposed discrimination class action lawsuit. Filed in New York federal court, the discrimination lawsuit claims the company deactivated thousands of Asian customers’ accounts, allegedly motivated by a racist belief that they were buying discounted beauty products in bulk and reselling them for profit.

Brought by four women of Chinese descent, the discrimination class action claims Sephora shut down Asian users’ accounts after its site crashed on November 6, due to a surge in web traffic resulting from a 20 percent-off sale promotion. According to Sephora, reselling of its products is pervasive. The company said it blocked some North American and international customer accounts for this reason.

According to the plaintiffs, the only accounts that were deactivated were those that used Chinese web domains or had names that Sephora perceived as being of Asian origin. A plaintiffs’ attorney said an investigation revealed that only users who fell into those two categories had their accounts blocked.

According to the lawsuit, the four named plaintiffs live in New York, Philadelphia, and Columbus, Ohio, and were all members of Sephora’s ‘Beauty Insider’ program. The program gives customers who spend certain amounts on the company’s products access to discounts and other promotions. The points the women accumulated by buying Sephora products, and which give access to additional discounts and special gifts, have been lost, according to the plaintiffs’ attorneys. Sephora alleges it only went ahead with the deactivations after it “identified certain entities who take advantage of promotional opportunities to purchase products in large volume on our website and resell them through other channels.”

Attorneys for the plaintiffs said that instead of deactivating accounts, Sephora could have addressed the resale issue by limiting the number of products a single customer could purchase or capping the amount of money they could spend. Sounds sensible.

The named plaintiffs seek to represent a class of Sephora customers who were part of the Beauty Insider program who either are or are perceived as being of Chinese or Asian ethnicity and had their accounts blocked or deactivated following the website crash. The potential class is expected to be in the thousands.

The case is Xiao Xiao et al., v. Sephora USA Inc. et al., case number 14-cv-9181, in the U.S. District Court for the Southern District of New York.  

Top Settlements

Boston Scientific Bellwether Results… A jury has awarded $18.5 million against Boston Scientific Corp in settlement of transvaginal mesh litigation brought by four women who alleged the implanted medical device left them with nerve damage, infections and pain during sex.

The trial was heard by a federal jury in West Virginia and is the second verdict against the company over defective vaginal slings. Last week a federal jury in Florida issued a $26.7 million verdict against Boston Scientific for providing insufficient warnings about the risks of its Pinnacle mesh device.

The four women in the West Virginia case sued Boston Scientific over the defective Obtryx transvaginal sling. “In these cases, the jurors clearly understood that Boston Scientific moved too quickly in bringing its product to market, and that it used inappropriate materials while at the same time failing to warn doctors and patients about the risks involved,” said on the of the lawyers representing the plaintiffs. Each of the women will receive $1 million in punitive damages under the terms of the settlement.

The multidistrict litigation being heard in Miami, also involved four women who alleged suffering and injury after having the sling implanted. It was the first federal bellwether trial against Boston Scientific, one of seven manufacturers of pelvic mesh that face about 60,000 lawsuits across the country.

Transvaginal Mesh and Transvaginal Slings are medical devices that are surgically implanted to treat Pelvic Organ Prolapse (POP) and/or Stress Urinary Incontinence(SUI). 

Hokee Dokee—Time to adjourn for the week.  Have a fab weekend–See you at the bar!

Week Adjourned: 11.15.14 – Honda, Barnes & Noble, Lean Spa

The week’s top class action lawsuits and settlements. Top stories include Honda, Barnes & Noble, Lean Spa

HondaTop Class Action Lawsuits

Airbag Alert. Heads up—thought the avalanche of defective automotive class action lawsuits was over? Think again!

This week Japanese parts supplier Takata Corporation and automaker Honda Motor Co., got hit with a lawsuit over recent rash of recalls due to faulty airbag inflators installed in millions of vehicles in the United States. Yup—millions of vehicles. Bet that makes you happy.

Bottom line, according to the lawsuit, Takata embarked on a concealment campaign, designed to cover-up evidence of airbag defects. The complaint, filed in the U.S. District Court for the Central District of California on November 7, 2014, claims that Takata withheld knowledge of the airbag defects from federal regulators and ordered its technicians to destroy data evidencing any housing defects, including video and computer backups.

Instead of safely deploying airbags to protect vehicle occupants, the defective Takata inflators, installed in millions of Honda vehicles, explode, sending metal and plastic shrapnel into the vehicle cabin, according to the complaint. The defective Takata inflators have caused multiple injuries and fatalities.

According to legal representatives for the class, in 2004, Takata and Honda were made aware of a dangerous propensity for airbag inflator explosion in vehicles equipped with Takata airbags—a driver in Alabama was severely injured from metal shrapnel during an accident.

The suit seeks to represent anyone in the United States who purchased or leased a Honda vehicle with a defective Takata airbag and that has been subject to an airbag-related warning or recall.

The complaint has eight named plaintiffs from California, Florida, New Jersey, New York, Ohio, Virginia and Washington.

The suit accuses Takata of manufacturing cheap airbags that “blew up like hand-grenades, sending lethal metal and plastic shrapnel into the vehicle cockpit and into the bodies of the drivers and passengers.”

Pass it on…

Could you recite these complaints chapter and verse? Barnes and Noble behaving badly…and the bookseller is facing an unpaid overtime lawsuit to prove it. The potential class action is seeking nationwide certification. The lawsuit was filed by the company’s assistant store managers who allege they were misclassified as exempt from overtime and that their primary role was not to supervise other employees but rather to provide customer service. The lawsuit alleges violations of the federal Fair Labor Standards Act (FLSA) for a nationwide class.

According to the plaintiffs, B&N assistant store manager positions are misclassified as exempt under state and federal law. Specifically, while some managerial work is required, assistant store managers have been “primarily engaged in the same routine tasks as hourly employees.” Those tasks include helping customers find merchandise, working cash registers, stocking shelves and helping out in the store’s cafe area, the class certification motion states.

According to the complaint, B&N assistant store managers spent between 75 percent to 90 percent of their time completing the same types of “hourly duties” that other employees were required to perform. Further, the plaintiffs claim that the work required of assistant store managers was governed by B&N’s nationwide policy, making the case ripe for class certification. “At B&N, all ASMs are required to follow closely circumscribed corporate policies and rules established by their store manager,” the motion said. “These policies are implemented across the B&N brand and ASMs are prohibited from deviating from these guidelines.”

The motion is seeking class certification of New York assistant managers who worked at B&N between January 25, 2007, and July 2010 and conditional certification under the federal Fair Labor Standards Act for a nationwide class. B&N reclassified the assistant store manager position in June 2010.

The case Steven Trimmer et al. v. Barnes & Noble Inc. et al., case number 1:13-cv-00579, in the U.S. District Court for the Southern District of New York. 

Top Settlements

Lean Spa getting off Lite? The Federal Trade Commission (FTC) and the State of Connecticut have reached a settlement with LeanSpa for allegedly engaging in consumer fraud by using fake news websites to promote acai berry and “colon cleanse” weight-loss products, making deceptive weight-loss claims, and telling consumers they could receive free trial products by paying a nominal fee for shipping and handling.

In addition to allegations of creating fake new websites, the deceptive marketing class action also claimed that the marketers of the weight loss supplement LeanSpa falsely informed consumers that they could receive a free trial of the weight loss products if they paid a small shipping and handling fee.

However, the lawsuit contends that consumers in fact paid nearly $80 for the “free” trial and were signed up for monthly subscriptions that were difficult to cancel. Consumers reportedly paid more than $25 million to the defendants.

The FTC and the state of Connecticut shut down the alleged LeanSpa scam operation and charged the defendants with violating portions of the FTC Act, the Electronic Funds Transfer Act and the Connecticut Unfair Trade Practices Act, in 2011. Then, in January, 2014 an agreement was reached between the parties in which the marketers of LeanSpa supplements have agreed to pay up to $7 million in consumer refunds.

Eligible consumers include people who bought LeanSpa weight loss or other LeanSpa health supplements such as LeanSpa; LeanSpa with Acai; LeanSpa with HCA; LeanSpa Cleanse; NutraSlim; NutraSlim with HCA; QuickDetox; and SlimFuel.  

Hokee Dokee…time to adjourn for the week. Have a fab weekend–See you at the bar!

Week Adjourned: 11.7.14 – Apple, Charles Schwab, Hertz

The week’s top class action lawsuits and settlements. Top stories include Apple, Charles Schwab and Hertz.

Apple logoTop Class Action Lawsuits

Sour Apples? Apple found itself on the end of yet another defective products class action lawsuit this week over allegations that the MacBook Pro series of laptop computers are defectively designed, causing the computers to malfunction.

Filed by Los Angeles resident Armen Soudijan, the Apple MacBook lawsuit claims that Soudijan purchased a MacBook Pro laptop in 2013, which came “with a defective graphics processing unit and/or defective graphics card implementation.” Specifically, the lawsuit claims that the defect “breaks the computer screen, causes computer freezes, crashes, and ultimately renders the laptop computers unusable.”

In the complaint Soudijan alleges “he was subjecting the laptop to normal use, including use of video processing, when he experienced a range of screen malfunctions, freezes, and ultimately crashes….The frequency and severity of the problem continued and increased. ”

According to the lawsuit, Soudijan’s MacBook Pro belongs to a line of Apple laptops released in 2011, which includes the 13 inch, 15 inch, and 17 inch screens. “Each of these products is designed, manufactured, marketed, sold, and built with a similar graphic processing unit and graphics processing card implementation and design, which is flawed and defective and causes the machine to unreasonably fail,” the lawsuit claims.

“Symptoms of failure include, but are not limited to, lines on the screen, garbled text, colored lines, rendering of the screen useless, freezes, shutdowns, and crashes, including data loss and full hardware malfunction,” the lawsuit states.

The lawsuit goes on to claim that the problems associated with the MacBook Pro have been reported by numerous customers through online and print forums, and that people experience these problems shortly after purchasing their Apple computers. The lawsuit further claims that “Apple is aware of the issue and had not take[n] adequate steps to remedy the situation either through warranty claims, recalls, or otherwise.”

The lawsuit against Apple in this MacBook Pro lawsuit cites violations of California’s Unfair Competition Law, breach of implied warranty, breach of express warranty, and unjust enrichment, and is seeking damages and injunctive relief, and prevention ofApple from selling defective products.

The Defective MacBook Pro Class Action Lawsuit is Soudjian v. Apple Inc., Case No. BC562621, in the Superior Court of the State of California, County of Los Angeles. 

Top Settlements

What was that about Accountability? At Charles Schwab & Co., they say it exists. But…yet another unpaid overtime class action was settled this week—this one filed by financial consultants who allege they were misclassified and subsequently denied overtime by Charles Schwab & Co.

A $3.8 million settlement has been approved, potentially ending claims that Charles Schwab & Co violated the Fair Labor Standards Act (FLSA) by classifying its international CDT financial consultants and associate financial consultants as exempt from overtime pay. They are responsible for cross-selling financial products to existing brokerage and banking customers.

According to the complaint, the consultants alleged that they did not fall under any federal or California exemptions to overtime laws. They allege that they were encouraged by the defendant “to work beyond their scheduled shifts without compensation, failing to allow them to record overtime hours they worked and failing to compensate them for overtime hours they worked,” according to the complaint.

Charles Schwab agreed to settle the complaint just days after it was filed. According to the terms of the settlement two thirds of the funds will be distributed among hundreds of employees working as financial consultants in Charles Schwab call centers around the country. The settlement covers work performed between November 2009 and February 2014, or in the case of the international consultants, between November 2010 and February 2014.

Named plaintiffs Dana Aboud, William Hicks, Michael Porowski and Albert Schweizer will each receive $7,500 as compensation for their part in the unpaid overtime class action.

The case is Aboud et al. v. Charles Schwab & Co. Inc., case number 1:14-cv-02712, in the U.S. District Court for the Southern District of New York.

Driving checks to the banks. A $53 million settlement has been reached in a consumer fraud class action lawsuit pending against Hertz Corp, and two Nevada airports brought by plaintiffs who alleged they were unlawfully charged undisclosed fees.

The Hertz settlement received final approval on October 30th, and contains $43.2 million restitution for Hertz customers who were billed for “airport concession recovery fees” at airports in Reno or Las Vegas between October 2003 and September 2009. Way to go!

The back story—the lawsuit was filed by plaintiffs Janet Sobel and Daniel Dugan, alleging Hertz violated a Nevada Revised Statute that requires car rental firms to include all charges in the rates they advertise in order to make rate comparisons reliable for those looking for the best deal. Specifically, Hertz allegedly tacked on a recovery fee separately from the rate it quoted its customers. The complaint stated that Hertz used that extra fee to pass along to consumers an assessment imposed on the company by the airports, which charge Hertz and other rental car firms a percentage of their gross revenues for the right to operate on site. 

Hokee Dokee- Time to adjourn for the week.  Have a fab weekend–See you at the bar!