Week Adjourned: 8.25.17 – Goldman Sachs, Talc Powder, Sony

Top Class Action Lawsuits

Did they not get the memo? Goldman Sachs Group (GSG) Inc, got hit with a discrimination class action lawsuit filed by a black female banker working in GSG’s personal wealth management unit. Specifically, plaintiff Rebecca Allen alleges GSG steered top clients to her Caucasian colleagues and denied her promotions because of her race. Seriously?

Allen states in the Goldman Sachs discrimination lawsuit that Goldman’s senior leadership team is virtually all-white and favors white bankers for promotions and lucrative accounts, resulting in their earning more than their black colleagues.

“Simply put, Goldman Sachs does virtually nothing to hire, promote or develop black talent, instead focusing its efforts on retaining and promoting white employees to positions of leadership,” the complaint states.

Allen was hired by GSG in 2012. According to the complaint, in 2016 she was removed from an account she had worked on for three years by a Goldman partner, Christina Minnis, who is also named as a defendant in the lawsuit. Allen says her supervisor met with Minnis about the decision and said she made racist and anti-Semitic comments about Allen, who is also Jewish.

Well, that about covers all the bases. See you in court!

The case is Allen v. Goldman Sachs Group Inc, U.S. District Court for the Southern District of New York, No. 1:17-cv-06195. 

Top Settlements

Big award for talcum powder cancer lawsuit … California just handed down a $417 million verdict to the plaintiff who claimed she developed terminal ovarian cancer after using the company’s talc-based products such as Johnson’s Baby Powder. The talc cancer case is the first to be heard in California against Johnson & Johnson (J&J). It is brought by California resident Eva Echeverria who alleges the company failed to provide adequate warning about the risk for cancer linked to the use of its talc-based products.

The Los Angeles Superior Court jury found in favor of Echeverria, awarding $70 million in compensatory damages and $347 million in punitive damages. This is the sixth trial against J&J to go to court, following five previously heard in Missouri state court which resulted in more than $307 million in damages against J&J. Prior to the Echeverria verdict, the largest single award was $110 million.

During the trial, Echeverria’s attorney’s alleged that despite J&J’s knowledge of years of studies that show a link between ovarian cancer and death and the use of genital talcum powder products, the company continued to encourage women to use those products.

Talcum powders are made of talc, a mineral comprised of bits of magnesium, silicon and oxygen that absorbs moisture. Some talc contains asbestos, a known carcinogen, in its natural form. While J&J is likely using in court information that commercial products sold in the US have been asbestos-free since the 1970s, some women used talc before the 1970s. Echeverria is 63 years old, and claims she used J&J products all her life. Feasibly, she used talc containing asbestos for more than a decade.

The case, which J&J said it plans to appeals, is Echeverria et al v. Johnson & Johnson, Los Angeles Superior Court, No. BC628228.

A bit water-logged over at Sony? Sony has agreed a preliminary settlement potentially ending a class action lawsuit alleging the company designed, manufactured, distributed, advertised and sold certain Mobile Devices that were alleged to be misrepresented as “waterproof.” The consumer fraud lawsuit asserts that the phones are, in fact, “not waterproof and are not designed for or capable of ordinary underwater use.”

The class action also claimed that “Sony exploited certain international water resistance ratings in order to launch a deceptive marketing campaign promoting the Devices.”

The Plaintiffs seek certification of a nationwide class of all persons who purchased the devices as well as Illinois and California subclasses, excluding certain persons and entities who/which, by way of example, purchased the devices for resale.

The proposed Sony settlement has received preliminary approval and would settle class claims in the United States of US customers only. The final Fairness Hearing is scheduled for December, 2017.

Those included in the class purchased, own(ed), received as a gift or received as a customer service exchange the Mobile Devices manufactured, marketed, sold and/or distributed by Sony Mobile Communications (USA), Inc. in any of the 50 States, the District of Columbia and Puerto Rico.

The settlement provides for: (1) a warranty extension; (2) changes to packaging, labeling and advertising; and (3) a claim process relating to prior water-related warranty claim rejections.

Eligible class members may submit claims for prior water-related warranty claim rejections by Sony for their in-warranty Mobile Devices. This is the only way to be reimbursed for 50% of the at-issue Manufacturer’s Suggested Retail Price (“MSRP”) for the applicable Mobile Device. 

Ok – That’s a wrap for this week. See you at the bar!

Week Adjourned: 8.18.17 – Lyft, Carnival, Mylan EpiPen

Top Class Action Lawsuits

Lyft may need to raise their game. They got with an employment class action lawsuit this week, alleging the ride-hailing service uses a calculation method for wages that results in drivers making less than the amount they are actually owed. How novel.

Filed in federal court in New Jersey, the lawsuit alleges that Lyft contracts state that its drivers will receive a portion of the fare charged to riders, which is based on an estimation of the time and distance it will take to complete the ride. However, according to the complaint, drivers’ pay is actually based on a separate fare calculation reflecting actual miles and minutes driven. Therefore, the drivers are receiving less than they are contracted to receive.

The proposed nationwide Lyft class action lawsuit consists of drivers who entered into contracts with Lyft to provide transportation services to customers in exchange for a portion of the fare Lyft charges riders, plus tips if applicable and minus service fees, cancellation fees, damage fees, tolls, surcharges and taxes. The class would include drivers who opted out of Lyft’s arbitration agreement.

Named plaintiff Keara Nieves, a Long Branch, New Jersey, resident, has worked as a Lyft driver since 2016. Nieves alleges that the Lyft driver’s contract sets forth, in part, that “all fare payments are subject to a Lyft commission …You will also receive any tips provided by riders to you, and the tips will not be subject to any Lyft commission.” Lyft also reserves the right to set and change prices for services and commission, the complaint states.

Nieves claims that she understood she would be paid an amount equal to the fare charged to the rider plus applicable tips and minus Lyft’s commission of 20 percent to 25 percent, depending on the time of day, and service fees, cancellation fees, damage fees, tolls and other surcharges for rides she successfully completed, the complaint states.

However, in practice, Lyft pays its drivers based on a calculation of distance and time actually driven, according to the complaint. This results in a discrepancy between the fare charged and the “improper” basis Lyft uses to pay its drivers is concealed from drivers, the plaintiffs assert. “Specifically, defendant Lyft has retained a larger portion of the passenger fare than they promised they would retain in the [driver agreement],” the complaint states.

The case is Nieves v. Lyft Inc., case number 3:17-cv-06146, in U.S. District Court for the District of New Jersey. 

Top Settlements

Hey—you might be taking that cruise after all! Well, sort of. Did you get a call? If so, you could be in the money, honey. This week Carnival, Norwegian, and Royal Caribbean Resort cruise lines, in conjunction with Resort Marketing Group (RMG), agreed to settle a Telephone Consumer protection Act (TCPA) class action lawsuit alleging they made illegal telemarketing calls to consumers offering promotions with those cruise lines.

The Carnival lawsuit was filed by plaintiff Philip Charvat who claims he received the pre-recorded cruise line telemarketing calls which allegedly offered promotions from Carnival, Norwegian, and Royal Caribbean cruise lines. He further claims that he never provided prior express written consent to receive these calls. Without his consent, the lawsuit alleges, the defendant’s cruise line telemarketing violated the TCPA.

According to the Carnival cruise settlement deal, a settlement fund worth between $7 million and $12.5 million will be created depending on the number of claims filed. This fund will cover payments to qualifying Class Members, an incentive award for Charvat, and other related costs.

Eligible class members include people who received pre-recorded telephone calls between July of 2009 and March of 2014 on their residential or cellular telephone lines initiated by RMG during which RMG offered a free cruise with Carnival, Royal Caribbean, or Norwegian cruise lines as a promotion.

The settlement agreement specifically limits Class Members to those persons whose phone numbers are listed in Resort Marketing Group’s database.

Eligible class members may receive a potential award of up to $900 per telephone number.

A final hearing is set for April 2018.

The case is Philip Charvat v. Resort Marketing Group Inc., et al., Case No. 1:12-cv-05746, in the U.S. District Court for the Northern District of Illinois.

Mylan may need a life-saving injection after this is over. The drug maker has agreed to pay $465 million to settle fraud claims that it underpaid rebates for the EpiPen, which amounts to stealing from the government federal authorities claimed. The EpiPen lawsuit, alleging violations of the False Claims Act, was possible due to Sanofi acting as a whistleblower by alerting the federal government to the scam.

According to the terms of the now finalized agreement, Sanofi will receive $38.7 million for its role in alerting the government, together with a share of monies the states will receive as part of the financial recovery by state and federal health programs.

The lawsuit stemmed from Mylan’s deliberate misclassification of the EpiPen as being generic, which meant it paid lower rebates to the government than it should have. According to government regulations, drug makers must pay Medicaid in the form of rebates to avoid price gouging. Further, drug makers must pay a higher rebate to the government for drugs that are only available through a single source, which would be the difference between the current price and the price the drug would have cost if it had only increased by the rate of inflation. In 2009, an EpiPen two pack, which contains live saving medication used to treat people who are going into anaphylactic shock, a potentially fatal allergic reaction, rose in price by $500, from $100 to $600.

Sanofi became aware of Mylan’s alleged The False Claims Act rebate violations when it was allegedly developing its own version of an epinephrine injector, Auvi-Q. Sanofi claimed Mylan tried to block its Auvi-Q by forcing insurance companies to not cover it or to put it at a disadvantage on drug formularies. Mylan did not admit liability in the settlement.

The case is United States ex rel Sanofi-Aventis US v. Mylan Inc. et al, case number 16-cv-11572, in the U.S. District Court for the District of Massachusetts.

Ok – That’s a wrap for this week. See you at the bar!

Week Adjourned: 8.11.17 – CVS, Nissan, Mesh Implants

Top Class Action Lawsuits

Drug Co-Pays too much? CVS got hit with a proposed consumer fraud class action lawsuit this week, alleging it has engaged in a massive fraudulent scheme with third parties to increase generic prescription drug costs for consumers who buy them using their insurance. The goal of the scheme is allegedly to increase profits. Of course.

According to the lawsuit, filed in the U.S. District Court for the District of Rhode Island, CVS knowingly colludes with third-party pharmacy benefit managers (PBMs) to raise the prices of generic drugs, charging consumers what it calls a “co-pay.” However, a significant portion of this amount in fact goes back to PBMs. CVS also earns more money from the transaction compared to customers who don’t use insurance.

Using their leverage with pharmacies, the PBMs negotiate lower prices that the insurance companies have to pay to pharmacies, the complaint asserts. In turn, pharmacies, benefit from having enrollees in the insurance plan come to their stores to have their prescriptions filled.

According to attorneys for the plaintiffs, “when customers go to CVS to fill their prescription, they assume they should use insurance to buy their drugs. In fact, pharmacists often insist on getting customers’ insurance information, even if the customers don’t want to use it. Now we know why – pharmacies are making more money from insurance purchases than cash purchases because of the secret deals they reached with PBMs.”

The CVS pharmacy lawsuit alleges CVS engages in is a two-pronged drug pricing scheme and has done since at least 2010. This scheme allegedly violates the Racketeer Influenced and Corrupt Organizations (RICO) Act and federal ERISA laws.

In the first part of the scheme, customers who use their insurance to fill prescriptions at CVS are actually charged a higher price for the same medication than those who pay with cash or don’t use their insurance, according to the suit. CVS does not informs customers that they can save money by not using insurance, the complaint claims.

Megan Schultz, named plaintiff in the lawsuit, alleges she used her insurance to purchase a certain generic drug at her local CVS. Under her plan she paid $165.68, but if she had paid cash, without using her insurance, she would have paid only $92, a 45 percent difference that CVS never told her about. Seriously?

Further, the second part of the scheme involves CVS overcharging customers by collecting “co-pays” that exceed the pharmacists’ price and profit, again unbeknownst to the customer, according to the complaint. CVS gives this extra cash back to PBMs, again part of an undisclosed agreement between the PBMs and CVS, the complaint alleges.

These contracts between CVS and the PBMs are sealed from public view under strict confidentiality agreements, barring consumers from ever learning the true source of their drug cost.

Customers who used their insurance at CVS or another pharmacy to buy one of the following generic prescriptions may be affected, this list includes some but not all of the affected prescriptions: Acyclovir, Albuterol, Alprazolam, Amoxicillin, Amphetamine, Azithromycin, Cephalexin, Benzoyl Peroxide, Clindamycin, Clonazepam, Clonidine, Diazepam, Flonase, Hydrocodone, Ibuprofen, Lantus, Levocetirizi, Levofloxacin, Levothyroxine, Lexapro, Lorazepam, Oxycodone, Penicillin, Percocet, Prednisone, Restasis, Sertraline, Simvastatin, Singulair, SMZ/TMP, Tamiflu, Viagra, Vitamin D.

The lawsuit states that this hidden fraud violates federal racketing laws. The suit also brings claims of fraudulent concealment, fiduciary conflicts of interest, lack of adequate care and violations of state consumer rights laws.

Under ERISA, CVS has an obligation as a fiduciary to act “solely in the interest of the participants and beneficiaries,” according to the suit. Plaintiffs believe that by engaging in this alleged fraudulent scheme, CVS has failed to uphold this duty. Further, by basing its profits in this collusion with a third party, it has created a blatant conflict of interest that harmed its customers.

Top Settlements

And then there were two… It’s the scandal that keeps on giving. Nissan stepped up this week, agreeing to pay $97.7 million to settle allegations of consumer fraud regarding defective Takata Corp air bags. If this goes through, Nissan will be the fifth automaker to exit the multidistrict litigation (MDL), joining Toyota, Subaru, Mazda and BMW who have jointly ponied up $553.6 million to end their liability in the litigation.

Under the terms of the Nissan airbag deal, $87M would be set aside for the consumers’ settlement fund for reimbursement of all costs, ranging from child care payments and towing fees to lost wages. Nissan would also create a free rental vehicle program.

If the settlement does receive court approval, the only two remaining automakers named as defendants in the MDL would be Honda and Ford. Lawyers for the plaintiffs said they would continue to pursue their case against them.

The first consumer lawsuit was filed in 2014, alleging the Takata airbags, which contained volatile ammonium nitrate inflator, can misfire, especially in humid conditions. This sends shrapnel and fumes into the vehicle cabin at high velocity. Nissan recalled more than 52,000 vehicles as a result of the airbags. At least 11 deaths in the US are linked to the defective airbags, and Takata has faced enormous global recalls.

Under the terms of the agreement, an estimated 4.4 million Nissan vehicles will be covered. Nissan will inform the owners about the dangers of the Takata air bags and provide class members with coverage for repairs, including parts and labor. The plan also opens the possibility of a residual distribution payment of up to $500 per class member. The settlement does not involve claims of personal injury or property damage.

The case is In re: Takata Airbag Products Liability Litigation, case number 1:15-md-02599, in the U.S. District Court for the Southern District of Florida.

Endo seeing the end of AMS litigation… Finally, and end is in sight—at least for the litigation. This week, Endo International PLC announced that it will settle “virtually all known” AMS transvaginal mesh product liability lawsuits. This includes lawsuits in the US and internationally.

In a statement issued by the Irish-based maker of transvaginal surgical mesh, Endo stated it will end the known US claims at “reasonable values” and will make installment payments starting in the fourth quarter of 2017 and continue making payments until the end of 2019. It will set aside $775 million to cover roughly US 22,000 mesh implant claims as well as all known international mesh product liability claims and other related matters.

The company stated that it at this time it isn’t aware of any claims that won’t be covered by the $775 million.

In April 2014, Endo said that it had reached settlements with several of the remaining plaintiffs suing American Medical Systems (AMS) Inc. over allegedly harmful vaginal mesh products, resolving “substantially all” of the claims in the case without admitting any liability or fault.

Then, in March 2016, Endo said it was winding down its Astora Women’s Health unit, formerly AMS Women’s Health, to reduce the potential for product liability claims related to future mesh implants. At that time it was facing numerous lawsuits alleging health complications caused by a number of vaginal mesh devices. AMS, based in Minnesota, was a major manufacturer of transvaginal mesh medical devices, which are support systems designed to correct pelvic organ prolapse, (POP) and stress urinary incontinence (SUI).

Ok – That’s a wrap for this week. See you at the bar!

Week Adjourned: 8.4.17 – Wells Fargo, Benicar, California Overtime

Top Class Action Lawsuits

Not all well at Wells? These folks just cannot stay away from the court room. This week, Wells Fargo & Co got hit with a consumer fraud class action lawsuit brought by customers who allege the bank forced them into paying for unnecessary auto insurance, which, in some cases, drove customers so far into a financial difficulty their vehicles were repossessed. Nice

Here’s the back story: According to the proposed nationwide class action, the bank fraudulently collected millions of dollars from “unsuspecting customers who were forced to pay for auto insurance they did not need or want,’’ pushing almost 250,000 of them into delinquency and resulting in almost 25,000 vehicle repossessions.

Filed by Indianapolis consumer, Paul Hancock, the Wells Fargo lawsuit claims Wells Fargo received kickbacks from National General Holdings Corp., through shared commissions on the policies. According to The New York Times, Wells Fargo stopped sharing in commissions from the insurance sales in February 2013.

The lawsuit alleges that when customers took out Wells Fargo loans to purchase vehicles, the bank and the insurance company either didn’t check whether clients already had coverage or ignored the information. The bank then created collateral protection insurance policies for customers, and Wells Fargo then added premium charges to customers’ auto loan bills, often without notifying them, according to the lawsuit.

According to Bloomberg, Wells Fargo has said it may have pushed thousands of car buyers into loan defaults and repossessions by charging them for the unwanted insurance. The bank said an internal review of its auto lending found more than 500,000 clients may have unwittingly paid for protection against vehicle loss or damage while making monthly loan payments, even though many drivers already had their own policies.”

Wells Fargo discontinued the insurance program in September 2016 after finding errors. Hancock alleges Wells Fargo placed a CPI loan on a vehicle he bought in February 2016, charging him $598. Hancock “repeatedly contacted Wells Fargo to inform them that he had the required insurance through an auto insurance policy from Allstate,’’ according to the complaint.

Not only did Wells Fargo fail to credit Hancock’s account for the improper charge, they also failed to refund the money. In fact, Wells Fargo kept charging him for the policy and he was charged a late fee, Hancock claims.

The lawsuit is Hancock v. Wells Fargo & Co., 17-cv-04324, U.S. District Court, Northern District of California (San Francisco).The lawsuit is Hancock v. Wells Fargo & Co., 17-cv-04324, U.S. District Court, Northern District of California (San Francisco).

Top Settlements

Benicar Settlement. This should lower the collective blood pressure a wee bit. This week a $300 million settlement was agreed potentially ending multi-district litigation (MDL) against the makers of the Benicar, Forest Laboratories Inc., and Daiichi Sankyo Inc., and about 2,300 plaintiffs. The lawsuits alleged the blood pressure drug caused gastrointestinal injuries.

The settlement addresses claims filed collectively in state and federal court. The plaintiffs alleged personal injury stemming from defective design of Benicar (known generically as olmesartan), which is also in blood pressure products Benicar HCT, Azor and Tribenzor. 

The hypertension drug is used to lower high blood pressure. It is in a class of drugs known as angiotensin II receptor blockers (ARB). In 2013, the US Food and Drug Administration (FDA) issued a warning for patients stating that Benicar could cause sprue-like enteropathy, a condition that includes severe and chronic diarrhea. The agency mandated that Benicar warning labels be changed to include the condition. According to the FDA, sprue-like enteropathy has not been linked with other ARB medications.

The FDA’s action was based on adverse event reports of serious cases of late-onset diarrhea associated with Benicar use. Court documents state that an estimated 1.9 million patients received a prescription for Benicar or a similar drug in 2012 alone.

The litigation had been underway for more than two years. The plaintiffs alleged that not only did Daiichi design the drug in a defective manner but also that it failed to warn users that it could cause chronic diarrhea, nausea, malnutrition, dehydration and weight loss. Daiichi and Forest were jointly accused of promoting Benicar.

According to the terms of the Benicar agreement, the funds will be triggered when 95 percent of all eligible litigants and claimants opt in to the settlement under certain conditions. Patients who have not yet filed a claim and wish to be eligible to receive settlement funds, must have a retainer agreement in place with an attorney by August 23, lawyers told the court.

The case is In Re: Benicar (Olmesartan) Products Liability Litigation, case number 2606, in the U.S. Judicial Panel on Multidistrict Litigation.

Here’s a nice little payday… to the tune of 3.75 million. Yup, this week, Kellogg Brown & Root LLC agreed to settle a California overtime and labor law class action lawsuit brought by construction workers who allege the company shorted them on meal periods as well as wages. 

The 137 plaintiffs had worked on the Molycorp Mountain Pass rare earth facility in Mountain Pass, California. Under the terms of the proposed settlement, each class member will receive roughly $138 per qualifying work week of they worked during the class period of June 16, 2010, to Friday July 27, 2017. If all potential class members participate in the settlement, the average payout will be $3,100. The proposed settlement requires KBR to pay at least 50 percent of a $3.75 million settlement to participating claimants.

Named plaintiff David L. Totten will receive an award of $20,000. According to the construction worker overtime settlement, another $25,000 will be distributed to plaintiffs.

In the complaint Totten alleged that he and other nonexempt workers at the Molycorp facility who worked on a project to build a salt recovery plant were required to park their vehicles in a designated lot and take company vehicles to and from the work site without being paid for that travel time. Further, the suit alleged the workers were not paid overtime or for second meal periods for workers’ scheduled on 10-hour shifts. The project wrapped up in January 2014.

A final settlement hearing is scheduled for December. The case is David L. Totten v. Kellogg Brown & Root LLC et al., case number 5:14-cv-01766 in the U.S. District Court for the Central District of California.



Ok – That’s a wrap for this week. See you at the bar!