Estee Lauder

Week Adjourned: 5.2.14 – Baby Powder, Aveda, Apple, Google, Intel, Adobe

The week’s top class action lawsuits and settlements. Top stories include Baby Powder cancer risk, Aveda interns, and the tech worker salary collusion settlement

Top Class Action Lawsuits

Talc Troubles? It’s one thing to file a consumer fraud class action lawsuit alleging mislabelling infractions regarding “all natural” and “ no preservatives”—for example, but a consumer fraud class action filed this week against Johnson & Johnson alleging its classic baby powder products are associated with a significant increase in the risk of ovarian cancer, well that’s just a whole different level of muckery. Why do I continue to be surprised by these things…

According to the baby powder lawsuit, filed by plaintiff Mona Estrada (Mona Estrada v. Johnson & Johnson et al., case number 2:14-cv-01051, in the U.S. District Court for the Eastern District of California) studies have shown a 33% increased risk for ovarian cancer associated with talcum powder among women who use it on their genitals. Yet the only warnings on the product labels tell users to keep the powder away from their eyes, avoid inhalation and to use externally. Estrada, who has used the product since 1950, claims she expected Johnson’s Baby Powder, made of scented talc, to be safe. Further, the lawsuit claims J&J has failed to disclose the information regarding ovarian cancer risk on its product labels.
“As a result of the defendants’ misrepresentations and omissions, plaintiff and the proposed class have purchased a product which is potentially lethal,” the complaint states. Estrada alleges she would not have purchased the powder had she been aware of the risk. You think? Thankfully, Estrada is not claiming any personal injury.

Estrada further alleges she has bought J&J’s powder since 1950 and believed all this time that the product was safe to use on any external part of her body, and that J&J encouraged women to use the product daily.

“Although the label has changed over time, the message is the same: that the product is safe for use on women as well as babies,” the lawsuit states. The lawsuit also states that J&J has known of studies showing that women who used talcum powder on their genital area had a higher risk of ovarian cancer, since at least 1982. Further, the author of a 1982 study was contacted by a J&J doctor who was told the company it should add a warning label to the bottle.

The talc lawsuit goes on to state that the American Cancer Society (ACS) allegedly said that a 2008 study, linking higher usage of talcum powder to increased risk of cancer, showed the powder “probably” increased the risk for cancer. The ACS compared talcum powder to asbestos, postmenopausal hormone therapy and radiation. Oh great.

The lawsuit claims J&J violated the California Consumer Legal Remedies Act and Unfair Competition Law, negligently misrepresented its powder and breached its implied warranty. This is going to be interesting.

Beauty Blunder? Aveda Corp, and its parent company, Estee Lauder Inc, and are facing an employment lawsuit filed by a former beauty school student who alleges the beauty companies treat their trainees as unpaid employees in violation of state and federal labor law. There must be some law of physics that works something like—the larger the company the less they pay—or try to pay…

Filed by lead plaintiff Jazlyn Jennings, the lawsuit claims that Aveda uses students at its California cosmetology schools as unpaid workers, requiring them to provide full hair and beauty services to paying clients, while at the same time claiming to provide educational experience to those trainees. Yes—it’s an educational experience alright—just not the kind the students signed up for.

The nitty gritty—“The California defendants led plaintiff and others…to believe that they were paying tuition to learn the skills necessary to succeed in the glamorous profession of beauty and cosmetology. Instead, they converted students into student employees to profit from their free labor.”

According to Jennings, she trained at the Aveda Institute Los Angeles from April 2011 to June 2012, where she provided haircuts, makeup removal, manicures and other services to customers without being compensated for her labor.

Jennings alleges that the institute’s staff did not properly supervise students who shelled out “thousands or tens of thousands” to participate in its yearlong training program, providing just four supervisors for the 40 students working on the salon floor, in violation of state regulations.

In addition to the Aveda institute in Los Angeles, Jennings also names its San Francisco-based school, the Cinta Aveda Institute Inc., and its Southeast institute operator, Beauty Basics Inc., as co-defendants in the employment lawsuit. “[Defendants] could have hired employees who they would have had to have paid at least minimum wage but instead chose to displace such employees with the free labor they demanded of their student employees,” the lawsuit states.

Additionally, according to the allegations, students were compelled to sell Aveda products to the public, effectively transforming students into “non-commissioned salespeople.” And the litany of bad deeds goes on to include handing over of tips and insufficient or completely absent supervision—if that’s not a contradiction in terms… but you get the picture.

So—bottom line—by failing to pay its “student employees,” the complaint claims that Aveda violated the minimum wage requirements of both California labor law and the federal Fair Labor Standards Act (FLSA). Additionally, Jennings claims Aveda failed to pay overtime, did not provide proper meal and rest breaks, did not provide accurate wage statements and engaged in unfair business practices.

Heads up—Jennings is seeking to represent a class of individuals who provided beauty services or sold products to paying customers in the named Aveda institutes from April 22, 2010, to the present. The class may also include student employees who cleaned or provided support services to Aveda’s beauty institutes in California.

Top Settlements

This settlement almost slipped under the radar this week—surprising given that the named defendants are Apple Inc, Google Inc, Intel Inc and Adobe Systems Inc. The tech worker settlement is, not surprisingly, pre-trial in the amount of $324 million—and it’s meant to end an antitrust class action lawsuit brought by by Silicon Valley tech engineers.

The lawsuit was filed in 2011, alleging that the four tech giants conspired to hold down salaries in Silicon Valley. You may remember some finger pointing at Steve Jobs over this one. In any event, the class action, filed in 2011 by Silicon Valley engineers, alleged that Apple Inc, Google Inc, Intel Inc and Adobe Systems conspired to refrain from soliciting one another’s employees in order to avert a salary war.

The trial, which will not be going ahead, surprise,surprise—was scheduled to begin at the end of May on behalf of roughly 64,000 workers who were seeking $3 billion in damages. Whoa Nelly—now that would have had an impact.
Ok—Folks—we’re done here—have a great weekend and we’ll see you at the bar!

Week Adjourned: 8.30.13 – Estee Lauder, HP, NFL

Top class action lawsuits for the week; top stories include Estee Lauder false advertising, HP defective products, and the NFL concussion settlement.

Top Class Action Lawsuits

Legal Wrinkle for Estee Lauder? Estee Lauder has come under fire this week, for claiming it’s Advanced Night Repair skin care products can make you look younger… Bottom line, Donna Tomasino of New York has filed a consumer fraud class action lawsuit against the cosmetics company, alleging Lauder practices misleading advertising regarding its Advanced Night Repair skin care products suggesting that the products promote DNA repair and other anti-aging effects.

The Estee Lauder class action, entitled Donna Tomasino v. The Estee Lauder Cos. Inc., et al., Case No. 1:13-cv-04692, in the U.S. District Court for the Eastern District of New York, claims that Tomasino purchased Estee Lauder’s Advanced Night Repair Synchronized Recovery Complex and Advanced Night Repair Eye Synchronized Complex because of claims made by the company’s advertisements. However, Tomasino claims, there is no product testing to back up the alleged anti-aging claims.

“The clinical studies and other data that Estee Lauder represents as supportive of the claimed efficacy results are nothing more than a continuation of defendants’ misleading practices—each of the studies is designed to be used in the marketing materials to support the claimed efficacy and defendants know that consumers will not see the results these studies purportedly represent,” the lawsuit states.

Tomasino also alleges Estee Lauder created the claims in its advertising campaign for the Advanced Night Repair products even though the company knows the advertising claims are false. And, because EL is allegedly motivated by profit, it deliberately misleads its customers into believing that the products have anti-aging effects so that they will spend a higher price for the Advanced Night Repair line of products.

“In sum, Estee Lauder dupes consumers with false and misleading promises of product results based on purported scientific discoveries that it knows it cannot deliver. Estee Lauder does so with one goal in mind, reaping enormous profits at the expense of consumers,” the Estee Lauder skin cream class action lawsuit states.

If your wrinkles haven’t disappeared with the use of these products, you may be interested in signing up.

HP Communication Breakdown? Also in consumer fraud spotlight this week—Hewlett Packard. Apparently their wireless printers are not good at communicating with computers. Filed in California federal court by plaintiff Vincent Ferranti, the HP defective products lawsuit, entitled Vincent Ferranti v. Hewlett Packard Co., Case No. 5:13-cv-03847, alleges that Ferranti purchased two HP wireless printers, both of which were found to contain faulty receivers, which negatively affected the printers in that they were unable to maintain consistent connections with the computers.

Ferranti further alleges users of HP wireless printers are forced to plug the printer into a computer in order to print something. “The HP printers’ wireless connectivity intermittently stops working for no reason,” the class action lawsuit states.

The HP printer lawsuit names HP’s Officejet Pro 8500 and 8600 Wireless All-in-One printers as defective, and states that HP either knew or should have been aware of the connectivity issue on or before April 2009. Ferranti further alleges HP “actively concealed” the defect from consumers and continues to sell these printers without warning consumers “that the printer’s wireless function was defective and would fail with normal use.”

The lawsuit seeks to represent a class of thousands of consumers who purchased or leased the HP Officejet Pro 8500 or 8600 Wireless All-in-One printers.

Top Settlements

Heads up NFL! (pardon the pun). A landmark settlement has been reached between 4,500 former football players, their families and the National Football League (NFL) this week, ending a deceptive business practices class action focusing on the impact of concussions on the brain.

“It’s been a struggle to get to this point, but today I will say I’m very proud that the NFL has decided to stand up for all the former players who are suffering from brain injuries,” Kevin Turner, a former NFL running back who has been diagnosed with ALS, said during a teleconference. “Today is so important for those who are…hurting. This will bring help for them today.”

The NFL concussion settlement, according to reports from CNN.com requires the NFL to pay $765 million to fund medical exams, concussion-related compensation, medical research for retired NFL players and their families, and litigation expenses.

The settlement, filed in US District Court in Philadelphia, is pending final court approval.

Former U.S. District Judge Layn Phillips, the mediator in the lawsuit, called the settlement “a historic agreement, one that will make sure that former NFL players who need and deserve compensation will receive it, and that will promote safety for players at all levels of football.”

“My hope is that any players or ex-players that are suffering, or begin to suffer, from symptoms of dementia, will be taken care of in a respectable manner through this settlement,” said Chris Dronett, one of the plaintiffs, whose husband Shane Dronett committed suicide in 2009 at age 38. Scientists found evidence of chronic traumatic encephalopathy, or CTE, in Shane’s brain after his death, CNN.com reported.

The lawsuit alleged that the NFL led a deliberate misinformation campaign—primarily through its Mild Traumatic Brain Injury Committee—to deny scientific data being presented in the medical community about health risks associated with concussion. And, the lawsuit claimed, that misinformation, trickled down to players so that they were unaware of the real nature of the risks they were taking while playing football.

Included in the settlement is the establishment of a $675 million fund to compensate players who have suffered brain injury, or their families; a maximum of $75 million for retired players’ medical exams, which could be used to diagnose future neurodegenerative disease; and $10 million devoted to research and education. The funds will be dispersed over the next 20 years.

Well done, and not a moment too soon.

Ok Folks, That’s all for this week. Enjoy that 3-day weekend and we’ll see you at the bar!

Week Adjourned: 1.18.13 – Clinique, Dell, Morgan Stanley, Goldman Sachs

The week’s top class action news–lawsuits and settlements that made the buzz this week. Top stories include Estee Lauder’s Clinique line, Dell computers, Morgan Stanley and Goldman Sachs.

Top Class Action Lawsuits

Speaking of wrinkles—it appears that Estée Lauder has hit one. The maker of Clinique cosmetic and skin care products is the latest to face a consumer fraud class action lawsuit over allegations of false and deceptive marketing practices.

In the Clinique false advertising lawsuit, entitled Margaret Ohayon et al. v. Estee Lauder Inc. et al., Case No. 2:33-av-00001, U.S. District Court for the District of New Jersey, plaintiff Margaret Ohayon alleges Estee Lauder uses deceptive advertising tactics to promote its Clinique Repairwear, Youth Surge and Turnaround collection as having the ability to make wrinkles “disappear,” rebuild firming collagen, and produce other anti-aging benefits.

The lawsuit alleges that if, in fact, the Clinique products could “rebuild stores of natural collagen” or “deliver 63% of the visible wrinkle-reducing power of a laser procedure,” the products would be regulated by the Food and Drug Administration. Not to mention your girlfriends would be all over it—like you could keep the effects a secret—I don’t think so.

The Clinique consumer fraud class action lawsuit is brought on behalf of a proposed class of all consumers who have purchased at least one Clinique product from the Repairwear, Youth Surge or Turnaround collection in the US.

The lawsuit seeks compensatory, treble and punitive damages; restitution; injunctive relief and more for alleged breach of express warranty, unjust enrichment, and violations of the New Jersey Consumer Fraud Act and consumer fraud laws of various states.

Top Settlements

Heads up: Taxing Situation at Dell… An unfair business practices class action lawsuit filed in California against Dell Computer Corp, has reached a tentative settlement totaling $275 million in potential refunds.

The class action lawsuit revolves around the payment of California sales tax on Dell service contracts…read on…

The lawsuit, entitled Mohan, et al. v. Dell, Inc. et al. alleged the Defendants (Dell Inc. f/k/a/ Dell Computer Corp.; Dell Marketing LP (“DMLP”), on its own behalf and as successor by merger to Dell Catalog Sales LP (“DCSLP”); BancTec, Inc.; and Worldwide Tech Services, LLC f/k/a/ QualxServ LLC) improperly charged California use tax on purchases of certain Optional Service Contracts and remitted these taxes to the California State Board of Equalization (“SBE”).

The parties have reached two distinct settlement agreements to resolve the legal action: the Dell Settlement and the SBE Settlement. Under the terms of the respective settlements, which cover purchases made between April 8, 1999 and June 30, 2008, funding for the settlements will be provided by Dell and the California State Board of Equalization. The settlements followed a 2006 trial court’s decision, later affirmed on appeal by the California Court of Appeals in 2008, ruling that optional service contracts sold by Dell were not subject to California sales or use tax, as they did not constitute tangible personal property and were readily separable from the computer hardware with which they were sold.

Further, the terms of the two settlements stipulate that customers of Dell who purchased and paid tax on service contracts covering computer hardware during the class action period will be entitled to a full refund of all such taxes that they paid.

The settlement consists of more than $275 million in refunds. Notices will be mailed to customers informing them of the amounts of refunds available to them and instructions for the timely filing of claims. The Court will review the settlement agreements at the Final Hearing to be held in April, 2013.

Class members who are eligible to receive a refund under one or both of these settlement agreements must file a claim or claims to receive any refund(s). Each settlement agreement has different criteria for eligibility. For more information on eligibility and how to file a claim for the separate settlements, visit sctaxsett.com.

Welcome Home[Owner] News. This one’s a whopper…and some welcome news for home owners who suffered dodgy loan servicing and/or foreclosure at the hands of Morgan Stanley or Goldman Sachs. This week the Federal Reserve announced it has reached a settlement with the two financial institutions over alleged loan servicing and foreclosure abuses.

Under the terms of the settlement, reported by CNNMoney.com, Morgan Stanley will provide $97 million in direct cash payments to borrowers and $130 million worth of other relief, including loan modifications and the forgiveness of deficiency judgments. Goldman will pay $135 million to borrowers with a further $195 million provided as relief.

Here’s the skinny. The settlement provides for over 220,000 homeowners who held mortgages with the two banks’ former subsidiaries: Goldman’s Litton Loan Servicing and Morgan’s Saxon Mortgage Services, and subsequently faced foreclosure in 2009 and 2010. According to CNNMoney.com “over four million borrowers will split a total of $3.5 billion in cash compensation, with payments ranging from a few hundred dollars to potentially as much as $125,000 in a small percentage of cases. Those eligible are expected to be contacted by the end of March, regulators said.”

This settlement follows the $8.5 billion agreement announced last week by the Federal Reserve and the Office of the Comptroller of the Currency with 10 other banks over foreclosure issues.

Goldman Sachs was ordered to review its subsidiary’s foreclosure practices in September 2011, as was Morgan Stanley in April 2012. Those reviews were not initiated and will now be scrapped as a result of this settlement deal.

Well this news is worth a minor celebration—on top of the fact that it’s Friday. So—see you at the bar!