Week Adjourned: 9.8.17 – Ford, Victoza, Honda Airbags

Top Class Action Lawsuits 

Got a Ford? How are your lug nuts? The automaker got hit with a defective automotive class action lawsuit this week, alleging it sold vehicles with defective lug nuts that swell and delaminate to such an extent that drivers cannot remove them with a lug wrench provided by Ford. This results in drivers being forced to pay a professional to replace the parts.

The Ford vehicles involved include the Ford Fusion, Escape, Flex, Focus, F-150 and F-350. According to the complaint, while the drivers might reasonably expect to be able to replace a flat tire using the wrench that is supplied by Ford with these vehicles, in practice, they cannot because the wrench no longer fits over the lug nuts if they swell or delaminate.

Here’s the skinny: according to the Ford lug nut complaint, filed by Ford drivers from seven states, the lug nuts that secure the wheels to Ford’s Fusion, Escape, Flex, Focus, F-150 and F-350 vehicles are made with a steel core and a chrome, aluminum or stainless steel cap that improves the product’s appearance but swells and delaminates. This purported defect renders the Ford-provided wrench useless, making drivers pay more than $30 per wheel, plus labor, to replace the parts and often stranding the drivers on the side of the road with a flat tire.

Consequently, drivers who have a flat tire can become stuck on the side of the road they are unable to fix themselves, putting them in a “precarious and dangerous place,” the lawsuit states. When drivers do make it to a repair facility, they typically have to pay for the labor of removing the defective lug nuts as well as new parts, the complaint states.

Further, the drivers claim that Ford doesn’t replace the faulty lug nuts, even if the parts fail within the new vehicle warranty period. This forces the affected vehicles owners to “spend hundreds of dollars for new lug nuts and the labor to install them,” the lawsuit states.

Ford customers have submitted “numerous complaints” to the National Highway Traffic Safety Administration, which Ford monitors, the complaint states. Therefore, the automaker is aware of the problem, according to the lawsuit.

The drivers seek to represent a nationwide class of consumers who purchased or leased an affected vehicle as well as classes of drivers in each of the 50 states. It is estimated that millions of vehicles have been affected.

The drivers are represented by Steve W. Berman and Thomas E. Loeser of Hagens Berman Sobol Shapiro LLP and E. Powell Miller and Sharon S. Almonrode of The Miller Law Firm PC.

The case is Josh Wozniak et al. vs. Ford Motor Company, case number 2:17-cv-12794 in the U.S. District Court for the Eastern District of Michigan. 

Top Settlements 

Victoza Settlement… Sitting down? Good, now strap yourselves in. A $60 million deal has been agreed between Novo Nordisk Inc., and federal agencies who alleged the pharmaceutical company engaged in misleading marketing practices concerning its best selling type 2 diabetes drug Victoza.

The US Department of Justice (DOJ) charged that the company misled physicians and insurers about the associated risk of cancer associated with Victoza, specifically that the drug has been linked to a rare cancer called medullary thyroid carcinoma. 

According to the DOJ, the allegations go back to 2010, when the US Food and Drug Administration (FDA) initially approved the drug. The FDA had required Novo Nordisk to modify its FDA-mandated risk evaluation and mitigation strategies, or REMS, after a 2011 survey revealed that half of primary care doctors polled were unaware of the potential cancer risks associated with the drug, according to the DOJ. The drug has been linked to a rare cancer called medullary thyroid carcinoma, the DOJ said.

According to the terms of the deal, Novo Nordisk will pay over $43 million to the federal government and about $3.3 million to state Medicaid programs. The deal will resolve claims made the by agencies under the False Claims Act. Additionally, Novo Nordisk has agreed to turn over $12.15 million in profits to resolve claims made that it knowingly violated the federal Food, Drug and Cosmetic Act from 2010 to 2012.

The deal also resolved seven whistleblower lawsuits filed between 2010 and 2016. Eleven whistleblowers were involved in bringing the lawsuits, and at least one, made by Peter Dastous, a Novo Nordisk sales representative who was responsible for selling Victoza to endocrinologists in South Carolina and northern Georgia, alleged Medicaid fraud against private commercial health insurers, and the deal brings the aggregate settlement amount the company will pay to $60 million.

You couldn’t make this stuff up – even if you wanted to.

The federal lawsuit is United States et al. v. Novo Nordisk Inc., case number 1:17-cv-01820, in the U.S. District Court for the District of Columbia. The whistleblower suit filed by Dastous is United States et al. ex rel. Dastous v. Novo Nordisk Inc., case number 1:11-cv-01662, in the U.S. District Court for the District of Columbia.

More About Airbags… Here’s another whopper. Honda has agreed to pay $603 million to exit the defective Takata air bag multidistrict litigation. This will hasten the removal of the exploding airbags from about 16.5 million Honda vehicles.

According to Honda, a $200 million fund will be established to expand the Takata air bag inflator recall in an effort to reach owners of affected Honda vehicles who have not been located or have not responded to recall notices.

If approved, the preliminary Honda airbag settlement would make Honda the sixth automaker to be exit the litigation, following Toyota, Subaru, Mazda and BMW who agreed to pay a combined $553.6 million. Nissan has also settled for $98 million. If Honda’s deal is approved, Ford would be the only remaining automaker in the lawsuit.

According to the terms of the deal, class members will be provided with rental or loaner vehicles while they deal with fixing their cars. Remaining funds will be distributed to class members in amounts up to $250.

The lawsuit was originally filed in 2014, claiming that Takata air bags contained volatile ammonium nitrate that when inflated, can misfire, especially in humid conditions, blasting chemicals and shrapnel at passengers and drivers. Takata’s air bag inflators have been linked to at least 11 deaths in the US and the company has faced massive global recalls.

Prior to filing for bankruptcy in June of this year, Takata pled guilty to wire fraud, agreed to pay $1 billion in fines and restitution, and acknowledged that it ran a scheme to use false reports and other misrepresentations to convince automakers to buy air bag systems that contained faulty, inferior or otherwise defective inflators.

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

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

Week Adjourned: 5.19.17 – Walmart, Airbags, Pelvic Mesh Lawsuits

Top Class Action Lawsuits

Walmart Not on Board with Babies? Well actually moms-to-be. Yes, Walmart is back in the news again…this time, Walmart is facing a potential discrimination class action lawsuit alleging the world’s largest retailer discriminates against pregnant women.

Filed by Talisa Borders and Otisha Woolbright, the complaint claims Wal-Mart forced pregnant workers to perform tasks that employees with similar limitations were excused from.

Specifically, the Walmart pregnancy discrimination lawsuit states: “Under its constellation of policies and practices, Walmart accommodated a large percentage of non-pregnant employees with physical limitations but failed to accommodate a large percentage of pregnant employees with physical limitations arising out of pregnancy.”

The named plaintiffs seek to represent a class consisting of all pregnant women who worked as Wal-Mart employees and were denied accommodations between March 2013 and March 2014, the period during which the defendant issued a revision to its disability accommodation policy that changed how pregnancy was classified.

The lawsuit states that managers at Wal-Mart’s O’Fallon, Illinois, store where Borders worked, refused her request to follow her doctor’s advice and avoid climbing ladders and heavy lifting. Rather, Walmart placed her on unpaid leave, according to the lawsuit. When Borders returned to work, she was not reinstated to her old position in the store pharmacy but was instead assigned to a number of lower-paying positions, the complaint asserts.

Further, according to plaintiff Woolbright, who worked as an associate at a Jacksonville, Florida, location, she was denied permission to follow medical advice and avoid heavy lifting or a transfer to another position until she sustained an on-the-job back injury. Woolbright states she was terminated just three days after requesting information on the company’s childbirth leave policies.

According to the proposed class action, Walmart had a three-tier disability policy, up until March 2014, with employees who sustained on-the-job injuries, pregnant employees and employees with all other disabilities receiving different treatment.

“Wal-Mart’s policies and practices provided that the only modifications or adjustments available to pregnant employees were those that would be both ‘easily achievable’ and ‘which will have no negative impact on the business,’” the complaint states. “Non-pregnant employees with disabilities, on the other hand, were entitled to ‘reasonable accommodations’ so long as the change would not create an ‘undue hardship’ for the company.”

Consequently, Borders was denied ladder and lifting accommodations that were granted to employees with similar medical limitations from on-the-job injuries, and Woolbright’s accommodation was denied until she sustained her on-the-job injury, the lawsuit asserts.

The lawsuit states that while the potential class size is unknown, based on statistics, about 48,000 Wal-Mart employees would have become pregnant during the relevant period, meaning the number of denied accommodations is likely “several thousand.”

The case is Talisa Borders et al. v. Wal-Mart Stores Inc., case number 3:17-cv-00506, in the U.S. District Court for the Southern District of Illinois.

Top Settlements

Airbag Settlements… And so it begins—this week—$553.6 million in settlements were agreed in multi-district litigation (MDL) involving Toyota, Subaru, Mazda and BMW, which will see the automakers pay the sum to end claims brought by plaintiffs over alleged defective Takata airbags. To date, the airbags, which can explode, have been linked with 11 deaths in the US.

According to the terms of the airbag settlements, BMW of North America LLC will pay $131 million, Mazda North American Operations will pay $75,805,050, Subaru of America Inc. will pay $68,262,257 and Toyota Motor Corp., $278,500,000.

Some 15.8 million vehicles currently have the defective airbag inflators installed, and the settlement is meant to expedite their removal. Additionally, compensation will be provided to class members who suffered economic losses as a result from the Takata air bag recall, such as car rentals. Additionally, a customer support program will be initiated that includes an extended warranty.

More than nine million Toyota vehicles, 2.6 million Subaru vehicles, 2.3 million BMW vehicles and 1.7 million Mazda vehicles, are covered by the settlement, according to the plaintiffs.

The airbag settlements also provide compensation to class members for their economic losses resulting from the recall in the form of reimbursement for reasonable out-of-pocket expenses; a possible residual distribution payment of up to $500; requirements to provide rental cars to the most at-risk class members while they wait for their recall remedies; and the provision of a customer support program for repairs and adjustments on the replacement inflators, including an extended warranty.

Further, a new independent outreach program that seeks to dramatically increase recall remedy completion rates will be established. The program will regularly contact class members through direct mail, phone calls, email, internet ads and social media to educate them about the settlement and incentivize them to receive the recall remedy and exercise their rights under this agreement.

Toyota, Subaru, Mazda and BMW are the first automakers to exit the massive MDL, which covers the largest auto recall in US history.

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. 

J&J to Pay after Mesh Verdict… What’s that expression—three strikes and you’re out? This week, a $20 million verdict was awarded against Johnson & Johnson (J&J) in punitive damages, in the third bellwether Ethicon pelvic mesh injury lawsuit, part of the pelvic mesh mass tort.

The 12-member jury hearing the case in Philadelphia returned the verdict after testimony was given by Plaintiff Margaret “Peggy” Engleman, demonstrating she suffered life-altering injuries when the mesh eroded inside of her. The mesh lawsuit verdict also includes a $2.5 million award for compensatory damages.

According to court documents, Engleman alleged she had underwent surgery to implant Ethicon’s TVT-Secur mesh to help with her stress urinary incontinence. However, just two months later, her doctor discovered erosions in the material. She claimed that the eroding mesh began causing her pain and she was eventually forced to undergo three additional surgeries, under anesthesia, to remove the material. However, portions of the mesh remain in her body and she has developed chronic pain and urinary dysfunction, according to court papers.

Engleman alleged that Ethicon’s TVT-Secur mesh was “defective in design, warnings and instructions” and that J&J released the product to market in full knowledge of the significant risk associated with the mesh implants, specifically, that the mesh would erode inside patients. 

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

Week Adjourned: 3.3.17 – Paypal, AT&T, Airbags

Top Class Action Lawsuits

PayPal no pal of small charities? Maybe… The online payment processor got hit with a consumer fraud class action lawsuit this week, claiming the company’s charitable arm takes funds from donors for various causes but fails to make the donations unless the charity had set up several accounts. Nice.

The complaint was filed by Friends For Health, a nonprofit supporting the North Shore Health Center in Highland Park, Illinois, and one of 10 charities that plaintiff Terry Kass attempted to donate.

The Paypal lawsuit claims that the funds donated were never received by the charities as the PayPal Giving Fund took control of the money and donated it to organizations of its choosing. The lawsuit asserts that PayPal did this because the charities chosen by Kass hadn’t set up the requisite PayPal accounts.

Specifically, the lawsuit states “On its face, PayPal Giving Fund is an admirable endeavor; however, in practice, it falls woefully short of that mission on numerous fronts.” And: “PayPal Giving Fund is currently listing charities on its website that are not registered to receive donations, failing to inform donors that unregistered charities will not receive their donations, failing to notify unregistered charities that donations have been made to them and redirecting unclaimed donations from the intended unregistered recipient charities to organizations of their own choosing without notice to the donor or intended recipient.”

According to the complaint, while many large charities have established PayPal Giving Fund accounts, hundreds of thousands of smaller charities have not. PayPal Giving Fund platform was established by PayPal in 2013 to make it easier for their customers to donate money to their favorite charities.

If a PayPal customer’s chosen charities don’t establish accounts and fail to claim the donations within six months, PayPal doesn’t inform them that an attempted donation has been made, according to the complaint. Rather, PayPal’s charitable platform “surreptitiously” donates the money without regard to the customer’s donation wishes, the complaint states.

The case is Friends for Health: Supporting the North Shore Health Center et al. v. PayPal Inc. et al., case number 1:17-cv-01542, in the U.S. District Court for the Northern District of Illinois. 

Text in any language… This week’s  Telephone Consumer Protection Act (TCPA) class action was filed against AT&T alleging the company has violated the TCPA by sending unsolicited spam text messages in Spanish, to people’s cellphones. No!

Filed by plaintiff Ali Gadelhak, who is not an AT&T customer, the AT&T text lawsuit claims that AT&T used an automated dialing service to deliver text messages to Gadelhak’s cellphone, knowing they were doing so and without his prior consent, which is in direct violation of the TCPA.

Gadelhak alleges the messages caused harm in numerous ways, including by diminishing the battery life of his cellular phone and wasting its data storage capacity.

“Defendant has caused plaintiff and members of the putative class actual harm, not only because consumers were subjected to the aggravation, waste of time and invasion of privacy that necessarily accompanies mobile spam, but also because consumers frequently have to pay their cellphone service providers for the receipt of such spam,” the complaint states. According to the suit, Gadelhak received a text message from AT&T on July 15 that was in Spanish and which asked him to participate in a customer satisfaction survey. Gadelhak isn’t an AT&T customer and doesn’t speak Spanish.

Gadelhak claims he responded to the text message twice, asking the sender to identify himself or herself. However, he then received more survey questions in Spanish that appeared to be automated. According to the complaint, Gadelhak’s cellphone number has been registered on the National Do Not Call Registry since May 23, 2014.

Gadelhak is seeking actual damages of up to $500 and treble* damages up to $1,500 per class member for every call that violated the TCPA. Further, Gadelhak is asking for certification of a subclass of individuals who received the text message specifically asking recipients to complete the customer satisfaction survey.

The case is Ali Gadelhak v. AT&T Corp., case number 1:17-cv-01559, in the U.S. District Court for the Northern District of Illinois.

*What the heck is ‘treble damages’, you ask? Good Q. It’s when a statute permits a court to triple the amount of the compensatory damages to be awarded; treble damages are a multiple of, and not an addition to, actual damages.

Top Settlements

Airbag settlement in the works… Here’s the blockbuster this week—this year and possibly this century—at least so far. But, not everyone is happy.

Takata Corporation agreed to pay $1 billion to settle multi-district litigation this week. In case missed this—the allegations are that the airbag manufacturer was aware of the fatal defect with its airbags but sold them anyway. At least 11 deaths have been linked to the airbags, which can explode due to a design defect.

According to the proposed airbag settlement terms Takata will plead guilty to wire fraud. However, Plaintiffs have objected to the proposed deal on the grounds that it doesn’t address the culpability of TK Holdings Inc., Takata’s US, subsidiary, and that the Department of Justice had been misled in its investigation.

Additionally, Takata has agreed to pay a $25 million criminal fine and will establish a $125 million restitution fund for people who were injured or will be injured by a malfunctioning Takata air bag inflator.

Automobile manufacturers will also benefit from the deal, with the creation of an $850 million fund to benefit for automakers who received the falsified data and reports or who purchased the potentially dangerous inflators.

The cases are United States of America v. Takata Corp., case number 2:16-cr-20810, in the U.S. District Court for the Eastern District of Michigan, and 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.

Good thing Takata may be putting this one behind them as they’ll need to focus on the latest airbag recall: Ford just issued a recall for about 32,000 2016-2017 Ford Edge, 2016-2017 Lincoln MKX and 2017 Lincoln Continental vehicles. The affected models have built dates between November 11, 2014 and February 15, 2017. Why? If the front driver airbag deploys, the airbag might only partially fill—or its cushion might also separate from the airbag module. Not the best situation in an accident…

According to reports, Ford will notify owners of the issue and have them return to dealerships for installation of a replacement part to correct things.


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