Week Adjourned: 3.11.16 – J Crew, Swedish Med Center, Wheelchair Scam

J CrewTop Class Action Lawsuits

It’s on Sale—or—Maaaybe Not? J Crew got hit with a consumer fraud class action lawsuit this week, alleging the clothing retailer set an arbitrary “valued at” price for every item offered for sale on the J. Crew Factory store website. BUT—of course there’s a “but” —prices depicted as “original” or “regular” are allegedly misleading because no items are ever sold at the “valued at” price, but rather always sold at a price lower than the “valued at” price. So that would make those prices the regular prices, no?

Filed by Joseph A. D’Aversa, individually and for all others similarly situated, the J Crew sale pricing lawsuit further claims the defendants state their advertised sale prices are only available for a limited time. However each sale is immediately followed by another, similar sale. Consequently, the prices on J. Crew’s factory website are not discounts at all, but in fact the regular prices of the items, the complaints states, in violation of federal regulations prohibiting the advertising of “phantom” price reductions.

The lawsuit claims violations of consumer protection statutes in several states, violations of the New York General Business Law, violations of the New Jersey Consumer Fraud Act, breach of contract, breach of good faith and fair dealing, breach of express warranty, unjust enrichment and negligent misrepresentation.

Nasty, Negligent, and Not the First Time, Apparently. The Swedish Medical Center, in Denver, is facing a class action lawsuit alleging negligence regarding the hiring of an employee who, the three named plaintiffs Angelica Porras, Catherine Pecha and Gary Wolter, claim exposed themselves and other patients at the center to HIV, hepatitis B or hepatitis C.

Specifically, the Swedish Medical Center lawsuit claims the hospital negligently hired Rocky Allen, who has been indicted on two federal counts alleging he was caught stealing a syringe filled with fentanyl from an operating room. According to court documents, by the time the hospital hired Allen, he had been fired from four other hospitals. Further, he was court-martialed in 2011, when he was serving with the Navy in Afghanistan, for the theft of fentanyl. Court testimony revealed that he is carrying an undisclosed blood borne pathogen.

“By the time Allen appeared on the doorstep of SMC in August 2015 looking for a job as a surgical technician, all the warning signs of what would later occur at SMC were present,” the lawsuit states. “Allen already had been terminated by numerous other hospitals for the exact conduct that has now exposed thousands of SMC patients at an increased risk of blood borne pathogens.”

According to the complaint, despite having received negative test results for the three viruses, the three named plaintiffs were told that they remain at risk and should pursue continued blood testing.

The lawsuit claims the hospital negligently inflicted emotional distress and failed to properly supervise Allen after hiring him. The plaintiffs are seeking class-action status for anyone who had surgery at Swedish between August 17 and January 22. The hospital has offered free blood tests to 2,900 patients.

The named defendants are Swedish and its parent companies, Hospital Corp. of America and HealthONE of Denver Inc. The lawsuit also notes that another HealthONE hospital, Rose Medical Center, has experienced a drug-theft scandal. Yes, seem to remember that one.

Top Settlements

Wheelin’ & Dealin’ in the Worst Way? This is seriously uncool—Michael Mann, owner of Seattle-based Wheelchairs Plus, Inc., has been ordered to pony up $2.7 million to the Washington State Attorney General Bob Ferguson, who brought charges of consumer fraud against the company for overbilling Medicaid for some dodgy wheelchairs.

The facts, as reported, are that Mann billed the Medicaid program for 119 new wheelchairs, when in fact used wheelchairs were delivered to the disabled and poor across the state of Washington.

According to the allegations, between 2009 and 2012 Mann purchased used wheelchair parts from places including Craigslist and nursing home “graveyards.” He then assembled the mismatched parts into wheelchairs, painted them and sold them as new.

Ferguson’s office claims that Mann billed Medicaid as if these wheelchairs were new, unlawfully receiving $550,000 from the Medicaid program.

Wonder if there will be any new wheelchairs to replace the “recycled” ones?

Ok…That’s a wrap folks! See you at the Bar!

Week Adjourned: 7.4.14 – Adobe, Fluidmaster, J. Crew

The week’s top class action lawsuit and settlement stories–4th of July edition! Top stories include Adobe Creative Cloud, Fluidmaster and J. Crew.

Adobe Creative CloudTop Class Action Lawsuits

Heads up all you Designers and Creatives out there…Adobe Creative Suite billing may just be a little too creative. Adobe got his with a consumer fraud class action lawsuit this week alleging the software maker charges an illegal termination penalty for cloud subscription access to its blockbuster applications such as Photoshop and Illustrator.

Filed by Scotty Mahlum, in California Federal Court, the Adobe lawsuit alleges that Adobe’s early termination fee, which can add up to hundreds of dollars, violates California’s Unfair Competition Law and Consumers Legal Remedies Act. It sure seems to be a blatant cash grab—opinion here…

“[The fee] is designed to maintain recurring revenue by preventing subscribers from cancelling, rather than to compensate for any damages sustained by [Adobe],” Mahlum said. [If Adobe] “has suffered any damage upon early cancellation, the ETFs are not a reasonable measure or approximation of such damages.”

According to the complaint, a monthly subscription for access to Adobe’s complete cloud suite is $49.99 or $9.99 per month for access to individual programs. But if consumers end their contracts early, Adobe charges them 50 percent of the remaining value of the contract. “Because Adobe has no expenses after a subscriber downloads Creative Cloud Software to a computer, 50% of the remaining contract obligation is a windfall for Adobe,” the lawsuit states.

The Creative Cloud programs include Photoshop, Illustrator, InDesign, Premiere, After Effects, Audition, Dreamweaver and other programs.

The subscription contract is a take-it-or-leave-it proposition and gives consumers no opportunity for term negotiation, the Adobe lawsuit contends. Mahlum alleges Adobe phased out the option to buy copies of the software outright in the spring of 2013 and that he signed up for a complete plan in October but canceled it in March.

Mahlum seeks a permanent injunction against collection of the ETFs and wants the company to pay back all ETFs it has collected from the class, which he says should include all current or former subscribers in the U.S. who were charged the fee.

In a December earnings report, Adobe revealed it had ended the 2013 fiscal year with 1.4 million Creative Cloud paid subscriptions, an increase of 1.1 million over the course of the year. The lawsuit contends that Adobe’s revenue from the cloud model jumped from $160 million in the second quarter of 2012 to $255 million in the second quarter of 2013.

The case is Mahlum v. Adobe Systems Inc., case number 5:14-cv-02988, in the U.S. District Court for the Northern District of California.

It would appear there’s Nothing Fluid about this Crap… at least according to some very pissed off consumers who filed consumer fraud class-action lawsuit against Fluidmaster Inc., this week. The lawsuit claims that the plumbing product and toilet repair company knowingly sold defective toilet connectors that spontaneously broke, causing millions of dollars in property damage at homeowners’ expense. Nice!!!

The Fluidmaster complaint, filed April 24, 2014, in the US District Court for the Central District of California, states that Fluidmaster elected to sell faulty plastic toilet connectors even when it was mechanically and financially feasible for the company to sell an existing, safer alternative design. According to the lawsuit, more than a million defective toilet connectors were sold in the US. Ok—that’s a lot of folks. That’s a lot of damage.

Apparently, upon realizing that its plastic toilet connectors were routinely cracking, leaking and causing significant damage, Fluidmaster responded by lowering its 10-year warranty to five years, according to the lawsuit. The complaint’s two named plaintiffs experienced massive property damage after their Fluidmaster toilet connectors spontaneously failed. One of the plaintiffs, Brian Kirsch, received a call while on vacation from his garbage collector informing Kirsch that water was spilling from an upstairs window of his home and raining into his garage. Kirsch’s home had to be gutted and completely renovated while he and his family were displaced.

Due to the material and design of the toilet connector, the plastic was susceptible to bending with weight and pressure over time, according to the suit. The complaint also cites the company’s poor instructions and warnings that failed to provide the customer with sufficient information to safely and properly install the connectors.

After reducing the product’s warranty, Fluidmaster began to redesign the toilet connector in mid-2011, marketing and selling a new, reinforced connector. According to the complaint, the company never publicized that the product was redesigned and did not recall the defective products from its distribution networks. It also did not notify property owners that the defective products could spontaneously fail and should be replaced, keeping the defective products in use, according to the complaint. That’s just plain shitty (couldn’t resist!)

Top Settlements

J. Crew to pony up for Illegal Zip Code Collection….Yup—a preliminary settlement has been approved in a zip code collection class action lawsuit pending against J. Crew Group Inc. The lawsuit alleged the retailer unlawfully collected customers’ ZIP codes during credit card purchases and used the information to send unsolicited marketing materials to those customers.

According to the terms of the J. Crew settlement, J Crew will provide $20 vouchers to eligible class and a $3,000 award to the class representative, lead plaintiff Lauren Miller, who alleged the company began sending her unsolicited junk mail after she made two credit card purchases in 2011 and 2012. Prior to providing her ZIP code during those transactions, she hadn’t received any promotional materials, according to the complaint.

Miller had urged the judge to approve the settlement earlier in the month, telling the judge that the settlement sufficiently covered the damages stemming from J. Crew’s allegedly improper ZIP code collection.

“The action seeks to redress J. Crew’s alleged unlawful invasion of its customers’ privacy and its alleged violation of the laws of the commonwealth of Massachusetts designed to protect consumers’ rights to be free from intrusive corporate data collection and marketing. The settlement substantially achieves this goal,” Miller said in a memorandum.

The settlement will put to bed claims of the proposed class of Massachusetts customers who used a credit card at the retailer’s stores after June 20, 2009, and whose ZIP code was subsequently recorded. J. Crew denies any wrongdoing.

The class action is Miller et al v J. Crew Group, case number 1:13-cv-11487, in the U.S. District Court for the District of Massachusetts.

Ok FolksHappy Fourth of JulyHave a wonderful weekendand we’ll see you at the bar!