Week Adjourned: 1.22.16 – Chevy, MLB.TV, It’s Just Lunch

chevyTop Class Action Lawsuits

Gee Whiz GM… Another one? Yes indeed. General Motors (GM) got hit with yet another proposed defective automotive class action lawsuit this week, over allegations its Chevy Cruz, Chevy Malibu and Buick Veranos suffer from a steering defect that could make the cars veer dangerously as well as lower their resale value. Should we be surprised?

Filed by Briani Mendoza, the lawsuit asserts that the steering wheel in her Chevy Cruz locks and requires turning the wheel with extra force, which could make the car turn sharply when the wheel comes unstuck. The Chevrolet lawsuit further asserts that GM knew of the problem in three models from years 2011-2014. However, despite this knowledge, the automaker has so far refused to fix the issue in violation of warranty and consumer protection laws.

“The steering system is one of the most important components for vehicle control and safe driving,” the complaint states. “A defective steering system has serious consequences for the handling, maneuvering and stability of the class vehicles while in operation and can contribute to car accidents and potential injury or death.”

In her complaint, Mendoza claims the vehicle’s electronic power steering system locks in the straight position after the car has been traveling a long distance on a straight highway. After that happens, the driver has to exert more pressure to the wheel to free it and is in danger of exerting too much force, causing the wheel to turn too far and the car to suddenly veer, the lawsuit states.

In November 2014, GM issued a service bulletin via the National Highway Traffic Safety Administration, offering to repair the alleged defect at free of charge. The letter asked drivers who had experienced the issue to bring their cars to dealerships.

However, the complaint alleges GM used the same defective parts to fix the problem, and therefore the problem would likely manifest again after the car’s limited warranty expired. Further, the suit notes, the automaker should have issued a full recall to fix the steering systems in all of the potentially affected vehicles.

The lawsuit claims GM should have known about the defect via its testing process and customer complaints. Therefore, GM’s handling of the issue together with its probable prior knowledge violated California’s Consumer Legal Remedies Act, Unfair Competition Law and Song-Beverly Consumer Warranty Act, the lawsuit claims. Additionally, the automaker breached its express and implied warranties in violation of the Magnuson-Moss Warranty Act.

Mendoza seeks to represent a California and national class of Cruze, Malibu and Verano owners whose cars dropped in value because of the defect, and aims to recover damages or secure an injunction requiring the automaker to fix the steering flaw, along with punitive damages. Time to lawyer up.

FYI—the case is Mendoza v. General Motors LLC, case number 2:16-cv-00404, in U.S. District Court for the Central District of California. 

Top Settlements

Couple of nice wins this week…

A Win for Baseball Fans…A possible home run for major league baseball (MLB) fans and broadcasters. They reached a proposed settlement agreement this week, staving off further antitrust litigation over how out-of-market game broadcasts are sold.

Here’s the skinny—under the agreement, MLB will offer an unbundled MLB.TV Internet package for the next five years, allowing for the purchase of single-team packages for $84.99 next season. It represents a 23% reduction from the cheapest version of MLB.TV previously available and a 35% reduction from the most commonly purchased version. The agreement also requires the MLB.TV league-wide package cost to fall to $109.99.

In addition to the single-team package offering and lower prices, the MLB.TV agreement provides new options to consumers. It requires MLB to implement by the All-Star Break, a “Follow Your Team” variant of MLB.TV, which, for the first time in any major professional sports league, will allow consumers to watch a chosen away team’s telecast even when that club is playing an “in-market” team. This new product, which will cost only $10 more than the MLB.TV package, will enable authenticated subscribers, individuals who are pay television subscribers of the Regional Sports Network (RSN) that carries the in-market club, to watch what, up until now, would have been “blacked out” telecasts.

MLB has further agreed that it will endeavor to provide live local team broadcasts over the Internet (so called “In-Market Streaming”) for authenticated subscribers to the 25 RSNs carrying MLB games owned by DIRECTV, Comcast and 21st Century Fox by the start of the 2017 season. If In-Market Streaming is not in place for each and every one of these clubs by the 2017 season, MLB will be prohibited from increasing any of its MLB.TV package prices.

The case is Garber, et al. v. Office of the Commissioner of Baseball, et al., 12-cv-3704 (SAS), in the U.S. District Court for the Southern District of New York.

Cheaper Date? It’s just lunch—one very expensive lunch as it turns out. This week saw a preliminary $64.75 million settlement agreement reached a consumer fraud class action filed by plaintiffs against the dating site It’s Just Lunch International Inc.

According to the lawsuit, the site’s customers claimed they were overcharged for allegedly personalized matchmaking services while disregarding daters’ stated preferences such as age, employment and marital status, and criminal background. That could get ugly.

Filed in 2007 and then amended in 2008, the complaint states: “In fact, despite promises to the contrary, It’s almost completely ignores the client’s stated preferences. Rather, the company makes matches which are driven entirely by monthly quota requirements, and which wholly and categorically disregard the client’s stated “desires, goals [and] motivations.”

In addition to misrepresenting its services, the lawsuit further claims that It’s Just Lunch violated New York state that prohibits dating services from using contracts that require payment in excess of $1,000.

Under the terms of the proposed It’s Just Lunch settlement, It’s Just Lunch would provide $60 million in vouchers for dates and $4.75 million in cash. Specifically, plaintiffs who opt in to the settlement would receive a voucher for one free date, users in some cities would receive two, which have an estimated value of $450 each.

Further, It’s Just Lunch agreed to post a customer pledge to its website and change its contracts to include a commitment honoring its customers’ specified preferences for dating matches, according to the motion for preliminary approval of the deal.

The $4.75 million non-reversionary cash fund would pay for $100 awards to members of a class of New York daters, the costs of administering the settlement, as well as any court-approved service payments and attorneys’ fees, according to the motion. The plaintiffs have also requested $3.6 million in attorney’s fees and $10,000 in payment for each of the nine names plaintiffs.

The case is Rodriguez et al. v. It’s Just Lunch International et al., case number 1:07-cv-09227, in the U.S. District Court for the Southern District of New York. 

Ok – So – that’s a wrap folks… Happy Friday…See you at the Bar!