Week Adjourned: 6.9.17 – Subaru, Five Guys, Honest Company

Top Class Action Lawsuits

Can Subaru see their way to fixing this? They got hit with a consumer fraud class action lawsuit this week, over allegations they knowingly sold vehicles with defective windshields that are prone to spontaneous shattering. Yes, that would certainly help your driving. Not.

Filed by Lucia Luong, who purchased a new 2015 Subaru Outback, the complaint asserts that the vehicle’s windshield spontaneously cracked in March. Subsequently, Subaru has denied valid warranty claims in an effort to minimize its own costs, Luong alleges.

“Subaru knew of and concealed the windshield defect that is contained in every class vehicle, along with the attendant dangerous safety problems and associated repair costs, from plaintiff and the other class members both at the time of sale and repair and thereafter,” the lawsuit states.

Luong alleges that hers is not an isolated incident, but rather “hundreds, if not thousands,” of drivers who bought or leased 2015-2016 Subaru Outback or Legacy vehicles in the US have also experienced a defective windshield. This is clearly evident by the number of customer complaints filed with the National Highway Traffic Safety Administration, the lawsuit asserts.

The complaint goes on to state that although Subaru was aware of the defect, the company did not notify the drivers or grant them any relief, and the value of the vehicles has consequently diminished.

“Defendant has deprived class members of the benefit of their bargain, exposed them all to a dangerous safety defect, and caused them to expend money at its dealerships or other third-party repair facilities and/or take other remedial measures related to the windshield defect contained in the class vehicles,” the lawsuit states.

The complaint notes that while Subaru claims it extended its new car warranty by two years for front windshield failure, the extension only applied to certain members of the proposed class. Further, when Subaru dealers have repaired the windshields, they often replaced them with other faulty units, according to the complaint. Oh yea, that makes sense.

According to the Subaru lawsuit, Subaru is in violation of California’s Consumers Legal Remedies Act and Unfair Competition Law, and is in breach of implied and express warranties, and fraudulent omission.

Luong is seeking replacement windshields—you think?—an extended windshield warranty; the reimbursement of costs related to the faulty windshields; a halt to sales of the faulty vehicles without first notifying consumers of the defect; compensatory, exemplary and statutory damages; disgorgement of profits from the sale of the defective vehicles; and fees and costs.

Five Guys got served this week. Yup—the popular burger chain is facing a potential class action lawsuit brought by a former employee who claims the company violated the Fair Credit Reporting Act (FCRA) and California labor law by conducting background checks on employees without properly notifying them and committing a number of wage and hour violations. Further, the lawsuit contends that Five Guys failed to provide employees with legally required rest and meal breaks.

Filed by plaintiff Jeremy R. Lusk, the complaint claims that Lusk was periodically required to perform off-the-clock tasks and denied meal and rest breaks, along with other employment law infractions.

“Plaintiff is informed and believes and thereon alleges that defendants have a policy or practice of failing to comply with the labor code and the business and professions code as alleged herein,” the Five Guys lawsuit states.

Additionally, the complaint asserts that the defendant regularly secured credit and background reports on employees, conducted background checks on potential, current and former employees and used this information to make hiring decisions without providing clear disclosures.

This practice violates the FCRA, as well as California’s Consumer Credit Reporting Agencies Act and Investigative Consumer Reporting Agencies Act, the complaint states.

Lusk seeks to represent several classes and subclasses, including an FCRA class of all current, former and prospective employees in the United States over the last five years and ICRAA and CCRAA classes of California workers and applicants within the last five and seven years, respectively.

The lawsuit alleges violations of the FCRA, ICRAA, CCRAA, California’s Unfair Competition Law and the state labor code. The complaint seeks unpaid wages, actual and liquidated damages, restitution, declaratory relief, pre-judgment interest, statutory and civil penalties, as well as fees and costs.

The case is Jeremy R. Lusk v. Five Guys Enterprises LLC et al., case number 1:17-cv-00762, in the U.S. District Court for the Eastern District of California, Fresno Division. 

Top Settlements

It’s nearly over, Honest! That is for Jessica Alba’s home products company, Honest, which has  agreed to pay $1.55 million to settle consumer fraud allegations brought in a lawsuit filed in 2016. Think back.

The Honest class action lawsuit claimed that the company misled consumers with claims that its products such as its laundry and dish soaps, as well as its surface cleaner were free of harsh chemicals, when in fact they contained the chemical sodium lauryl sulfate, or SLS, a known skin irritant. Under the terms of the settlement agreement, Honest will change its product formula in addition to the financial compensation to consumers.

“This non-monetary relief is significant because it directly addresses and remedies the central allegation in plaintiffs’ action for future purchasers, that Honest made misleading representations in connection with sale of the SCS-containing products based on its promise that they were SLS-free,” the settlement motion states.

According to independent lab tests conducted by lawyers representing lead plaintiff Staci Seed, Honest Laundry Detergent, Honest Dish Soap and Honest Multi-Surface Cleaner products contain significant percentages of SLS. In her complaint, Seed contended SLS can cause scalp, gum and skin irritation at concentrations of just 1 percent, while testing on the Honest products showed concentrations of as much as 14 percent.

Under the terms of the proposed deal, the Honest settlement class would include all persons who purchased Honest laundry detergent, dish soap and multi-surface cleaner from January 17, 2012, through to and including the date of preliminary approval.

Class members without a proof of purchase could claims up to $50. Class members with proof of purchase can request more per claim. Claims will be paid in cash or as a credit for products at Honest.com worth 1.5 times the cash payout.

The 10 named plaintiffs may receive settlement awards of up to $1,000 per plaintiff. The settlement requires court approval.

The case is In Re: The Honest Company Inc. Sodium Lauryl Sulfate SLS Marketing and Sales Practice Litigation, case number 2:16-ml-027919-AB-RAO 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!