Foreclosure

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!

Week Adjourned: 4.22.11

Top Class Actions

Copping out on COBRA? Brunel Energy Inc and Brunel Energy Group Health Plan got hit with a class action this week. It was filed on behalf of current and former participants in the Brunel Energy Group Health Plan (“the Plan”) who allege Brunel failed to provide health care coverage continuing health care coverage (commonly called COBRA coverage) to employees and their beneficiaries who were covered under the Plan through an insurance policy with BUPA International.

According to the complaint Brunel did not notify employees of their entitlement to COBRA coverage or of their right to obtain coverage at a reduced rate as authorized by Congress in its recent economic stimulus package.

According to the Complaint, when asked for a COBRA package by a terminated employee, Brunel advised the former employee that COBRA coverage was not available. Even after being notified by the U.S. Department of Labor that the former employee was entitled to elect COBRA coverage at the statutorily reduced rate, the Complaint alleges that Brunel did not offer the coverage. Would this come under the heading of ‘cost savings’?

The Complaint seeks an injunction requiring Brunel to bring its health care plan into compliance with the law and an order requiring Brunel to reimburse former employees and their beneficiaries for certain health care costs they would not have incurred had they been allowed to elect COBRA coverage. Wait—there’s more—the complaint also seeks civil money penalties of up to $110 dollars a day for Brunel’s failure to provide statutory notices describing the Plan and apprising employees and their beneficiaries of their COBRA rights as required by law.

Top Settlements

Don’t Mess with our Vets. JP Morgan Chase was all apologies this week, on the back of a settlement reached with its customers who are or were military personnel, who had filed a class action against the bank alleging that it was wrongly foreclosing on families of service personnel and overcharging them on their mortgages to boot. Does that come under the definition of ‘free market economy’? (don’t get me started on that one)

Well, it obviously did in JP Morgan’s version. But, in February, a J.P. Morgan executive apologized at a U.S. House hearing on its behavior. Then they rolled out a series of programs to help active members and veterans—programs including educational initiatives. And, they said that the bank would no longer foreclose on any currently deployed military personnel. How generous of them.

The financial protections that the suit sought to have reinstated are in fact afforded US military personnel under the Service members Civil Relief Act (SCRA). So, maybe it wasn’t just an attack of conscience on JP Morgan’s part.

In any event, Reuters reported that under the terms of the settlement “J.P. Morgan said it will pay $12 million to the class-action suit and set aside $15 million for additional damages on a case-by-case basis. Any unused funds will be used to benefit a charity selected by the U.S. military.” (Reuters.com)

Baby Brain Food? Guess Not. If you got duped into buying an expensive brand of infant formula—Enfamil, made by Mead Johnson & Co—you may be pleased to know they’ve reached a preliminary settlement in the class action they were facing concerning allegations of false advertising.

The suit claimed that Mead falsely represented that Enfamil LIPIL is the only infant formula that contains DHA and ARA—fatty acids it claims are “clinically proved to improve brain and eye function in infants.” Are you kidding? If that really were the case they’d be putting that stuff in the tap water.

If the settlement is approved, people who purchased Enfamil LIPIL formula for six months or less between October 13, 2005 and March 31, 2010, can file a claim to receive either one 12.5 oz container of Infant Formula or $6 in cash.

For those folks who purchased Enfamil LIPIL formula for more than six months between October 13, 2005 and March 31, 2010, you can file a claim to receive either two 12.5 oz containers of Infant Formula or $12 in cash. You can find out if you’re eligible to be a class member here.

Ok. That’s it for this week. See you at the bar.

Week Adjourned: 10.29.10

Top Class Actions

What’s the word de jour? Foreclosure—actually—make that Foreclosure Class Actions. This week saw several foreclosure lawsuits filed against big banks. Possibly the most recent, was filed against BAC Home Loans Servicing, which is a subsidiary of Bank of America Corporation, and successor in interest to Countrywide Home Loans Servicing; Deutsche Bank National Trust Company; and U.S. Bank National Association. The suit was filed on behalf of all those property owners who lost title to their property in foreclosure proceedings based on false and perjurious affidavits filed by the banks and their servicing companies.

Perjurious affidavits? What the heck are those, you ask? Well like everything, foreclosure is a business—a business that seemingly works on volume. Apparently, the banks have been hiring so-called “robo signers” or “affidavit slaves”—employees who literally sign hundreds of foreclosure documents a day, according to the Wall Street Journal, without carefully reviewing their contents. The Washington Post recently ran a story on a man who has signed as many as 10,000 foreclosure documents in one month.

Back to the lawsuit. The BAC suit alleges that the defendant banks obtained wrongful foreclosures by abusing the court process and submitting affidavits that were false, even though sworn to under penalty of perjury, as the basis for obtaining foreclosure judgments. They seek to restore title to the property owners.

Another foreclosure class action filed this week also named the omnipresent Bank of America (BoFA) as a defendant, not surprising since BoFA reportedly holds one in five mortgages in the Continue reading “Week Adjourned: 10.29.10”

Week Adjourned: 3.26.10

Top Class Actions

One Percent Solution? Wasn’t it about this time last year when the big bank bailouts were front page news? You know, billions of tax payers’ dollars forked over to some of the biggest lending institutions in the country to help stave off complete economic obliteration stemming from bad lending practices and resulting mortgage foreclosures?

Well, sadly, and the cynic in me says predictably, it seems the bailout bucks may not be reaching their intended destination. Washington homeowners are suing Bank of America claiming the lending giant is intentionally withholding government funds intended to save homeowners from foreclosure.

The lawsuit claims that Bank of America systematically slows or thwarts Washington homeowners’ access to Troubled Asset Relief Program (TARP) funds by ignoring homeowners’ requests to make reasonable mortgage adjustments or other alternative solutions that would prevent homes from being foreclosed.

FYI—Bank of America accepted more than $25 billion in government bailout money financed by taxpayer dollars purposely to help struggling homeowners avoid foreclosure. Apparently, one in eight Continue reading “Week Adjourned: 3.26.10”