Volkswagen

Week Adjourned: 5.12.17 – Burger King, IHG Hotels, Volkswagen

Top Class Action Lawsuits

BK BOGO NOGO? Two for one costs more, according to the latest lawsuit to hit Burger King. This week, a consumer fraud class action lawsuit was filed by Koleta Anderson, who alleges the restaurant chain’s offer of Buy One Get One Free (BOGO) is misleading. She alleges that more than once she has paid more using a BOGO coupon to buy two Croissan’wiches than she paid for one. Maybe BK just can’t add? Yeah? No.

Anderson asserts in the proposed class action that the BOGO price was higher than the regular price. According to the lawsuit, at one Washington, D.C., Burger King Anderson paid $4.19 for two Croissan’wiches, using a BOGO coupon, but buying a single Croissan’wich at the same restaurant was just $1. She says she found similar discrepancies between the single price and the BOGO price at different Burger Kings in Maryland, Virginia, and Washington, D.C.

Typically, “Buy one, get one free” offers, which are not uncommon in the restaurant business, would imply that if a person buys one item for the regular price, they could normally expect to receive two of the items for the price of buying one. However, that is not the case, Anderson asserts.

“Burger King’s nationwide BOGO scheme is deceptive to reasonable consumers who expect that, when using a BOGO coupon at any retail store or restaurant, absent any exclusions or other terms and conditions, they will pay the same regular price for two identical Croissan’wiches as they would pay to purchase a single Croissan’wich,” the lawsuit states.

The Burger King class action lawsuit seeks to represent anybody who bought two Croissan’wiches using a BOGO coupon in Maryland, the District of Columbia, and Virginia.

The Burger King BOGO Class Action Lawsuit is Koleta Anderson v. Burger King Corp., Case No. 1:17-cv-01204, in the U.S. District Court for the District of Maryland.

Staying at an Intercontinental Hotel Costing you more than the Room Charge? The international hotel chain got hit with a data breach class action lawsuit this week, alleging it failed to protect customer data resulting in a credit and debit card hack in 2016. The hackers allegedly stole private and valuable customer information over several months in 2016.

Filed in federal court in Georgia, by lead plaintiff David Orr, the lawsuit alleges breach of implied contract, negligence and unjust enrichment. Orr claims the U.K.-based hotel chain, which has in excess of 5,000 hotels worldwide, failed to take adequate steps to prevent the installation of malware on its payment system and failed to detect the security breach.

“IHG’s security failures enabled the hackers to steal plaintiff’s and class members’ private Information from within IHG’s hotels and subsequently make unauthorized purchases on their credit and debit cards,” the IHG lawsuit states. “The failures also put plaintiff’s and class members’ financial information and interests at serious, immediate and ongoing risk and, additionally, caused costs and expenses to plaintiff and class members attributable to responding, identifying and correcting damages that were reasonably foreseeable as a result of IHG’s willful and negligent conduct.”

According to the complaint, Orr stayed at an IHG Holiday Inn in Biloxi, Mississippi in October, 2016. During his stay he used his debit card to pay for his hotel room. His debit card contained private information, which was exposed due to IHG’s inadequate security.

On February 3, IHG announced that 12 of its locations had been affected by the data hack. Then, in April the company expanded the number of affected locations to over 1,000 and sent a data breach notification letter to affected customers, the lawsuit states.

The lawsuit seeks to represent a class of all consumers who used their credit or debit cards and were affected by the security breach at a hotel and time identified by IHG between September 29 and December 29, 2016.

The case is Orr v. InterContinental Hotels Group PLC et al., case number 1:17-cv-01622, in the U.S. District Court for the Northern District of Georgia.

Top Settlements

Do the VW Emissions Lawsuits ever end? For owners of VW 3.0 liter engines—they did this week. A US district judge hearing the Volkswagen AG emissions scandal lawsuits has said he will grant approval of a $1.2 billion settlement deal, effectively ending claims affecting VW’s 3.0-liter-engine vehicles.

The VW settlement is the latest in a series that total in excess of $17 billion. All the cases stem from the emission-cheating software installed in certain VW and Audi vehicles.

The settlement will involve 88,500 owners of VW 3.0-liter cars. Under the terms of a related consent decree with the US Department of Justice, the German automaker will pay $225 million to mitigate environmental effects of nitrogen oxide pollution.

This latest settlement follows the earlier $14.7 billion deal with owners of 2.0-liter vehicles reached in October 2016. That deal includes $2.7 billion for environmental remediation.

According to a statement issued by Department of Justice attorney Josh Van Eaton, who represented the US Environmental Protection Agency in the lawsuits, the consumer settlements of the VW emissions scandal is “the largest civil penalty ever under the Clean Air Act.”

The case is In re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Product Liability Litigation, case number 3:15-md-02672, in the US District Court for the Northern District of California.

Ok – That’s a wrap for this week. See you at the bar!

Week Adjourned: 4.7.17 – Volkswagen, Audi, iOS, Halliburton

Top Class Action Lawsuits

Heads Up Volkswagen and Audi Owners! The automakers got hit with a proposed defective automotive class action lawsuit this week, over allegations they were aware of an engine defect in certain models, which they concealed and which resulted in thousands of dollars in damages to vehicles owners. Know this playbook?

Filed in federal court, the proposed lawsuit states that VW and Audi concealed a defect with the timing chain in certain vehicles built between 2008 and 2013. According to the complaint, the timing chain system is meant to operate normally for at least 120,000 miles, however, the alleged defect caused the timing chain to fail at any time prior to that, causing the vehicles to lose engine power and the ability to accelerate, maintain speed, control steering or fully engage the brakes, putting them at risk of rear-end crashes.

The VW and Audi complaint states that repairing the defect costs $1,200 at a minimum, but can reach $10,000 and involve replacing the entire engine.

The four named plaintiffs, Lloyd Artola, Angel Esquijarosa, Demetrie Hylick and Michael Spencer, are seeking to represent anyone who owned or leased certain Volkswagen or Audi vehicles with the alleged defect. They seek to establish two classes of plaintiffs, a nationwide class and a Florida subclass. The vehicles named in the complaint include various models of Volkswagen Beetles, Golfs, Jettas, Passats, Rabbits, Routans, Tiguans and Touaregs, as well as Audi A3s, A4s, A5s, A6s, A7s, Q3s, Q5s and Q7s.

Named plaintiff Artola claims he paid $6,700 to have his 2011 Audi Q5 repaired when the defect caused severe engine damage at 75,000 miles. Audi agreed to waive the cost of the repair after “much effort,” the complaint states.

Esquijarosa experienced similar trouble after the 2010 Volkswagen CC Sport, which he bought in 2013 from his daughter, suffered catastrophic engine failure at 38,000 miles. It cost him about $4,000 to repair. According to the complaint, “after much effort,” Volkswagen agreed to split the cost.

Hylick bought a used 2010 Volkswagen CC. The defect caused severe engine damage when the vehicles reached about 89,000 miles, costing the plaintiff $8,800 to repair. Spencer bought a used 2009 Volkswagen Passat, which failed to start when the vehicle reached 59,300. He spent $3,300 to have it fixed. Volkswagen refused to reimburse him, the complaint states.

The case is Artola et al. v. Aktiengesellschaft et al., case number 1:17-cv-21296, in the U.S. District Court for the Southern District of Florida.

Top Settlements

iOS Privacy Settlings…? More spooky stuff. This week, several major tech companies agreed to a $5.3 million settlement deal that, if approved, would end a privacy class action lawsuit accusing the companies of accessing the address book of iOS users without permission. Not surprised by these types of allegations anymore… sadly.

If court approval is granted, Foodspotting, Foursquare, Gowalla, Instagram, Kik, Path, Twitter and Yelp will share in creating the settlement fund which will pay out an estimated 0.53 cents per user, to more than 7 million users.

The lawsuit was filed in 2012 and alleges the tech and social media companies, through their services, used “unconscionable, illegal practices” in accessing contacts belonging to users without the users’ consent. The plaintiffs assert that this is equivalent to the contacts being “accessed and stolen.”

The lawsuit was brought following publicity around reported breaches of privacy. The Federal Trade Commission also investigated the charges, which resulted in an $800,000 settlement with the social network app Path over its practices. A settlement hearing will be held on May 25. If approved, the settlement would apply primarily to iOS users whose address books were accessed and contacts were viewed by the defendants, without permission, between 2010 and February 2012.

Settlement payments will be made to class members via the Amazon accounts of those affected, unless they request payment in the form of a check. Any unclaimed funds from the settlement will be given to the Electronic Frontier Foundation.

Ten Years After… Here’s one for the books. Already record-setting, this week a decade of litigation may have reached its end, with a $100 million settlement receiving preliminarily approval. The defendant is Haliburton, and the securities class action lawsuit centered around the company’s liability in its disclosure of asbestos use.

Not only has litigation of this lawsuit taken a decade but it has also included two trips to the US Supreme Court. If granted final approval, the $100 million settlement will effectively end one of the longest running securities fraud class actions in US courts, according to a copy of the settlement papers.

The lawsuit was filed in 2002, by a Milwaukee charitable organization that held Halliburton stock under its Erica P. John Fund as well as other plaintiffs. The lawsuit alleged Halliburton’s disclosure of a $30 million verdict stemming from asbestos liabilities sent the company’s stock price plummeting by 40 percent. The company’s stock prices were artificially inflated, the lawsuit claimed, resulting from misstatements issued about its financial liability for asbestos claims.

Chief US District Judge Barbara M.G. Lynn scheduled a settlement fairness hearing to take place at the end of July. Additionally, a deadline of August 12 has been set for any class members who want to participate in the settlement to submit a claim form.

The case is Erica P. John Fund Inc. v. Halliburton Co., case number 3:02-cv-01152, in the U.S. District Court for the Northern District of Texas.

Ok…That’s a wrap for this week. See you at the bar!

Week Adjourned: 12.31.16 – Wells Fargo, Behr Paint, Volkswagen

Top Class Action Lawsuits

All is not Well at Wells Fargo? Not by a long shot. Employees from Wells Fargo Bank have filed an employment class action lawsuit alleging they were pressured into unethical sales conduct under threat of retaliation if they failed to cooperate.

Specifically, the Wells Fargo employees claim they were forced to inflate sales figures by opening new customer accounts that customers had not agreed to and to open accounts for non-existent customers. Further, the lawsuit claims that employees who did not engage in this alleged behavior were threatened with discipline or termination. Employees who did participate were rewarded, the lawsuit claims. Read on…

The alleged misconduct involved Wells Fargo employees having to set up a target of eight accounts, or “solutions,” per customer, which is far greater than the industry standard of three accounts per customer. The employees allege that these sales goals were impossible to meet without engaging in underhanded behavior.

The Wells Fargo lawsuit asserts that Wells Fargo’s motive was to increase its stock price by setting unrealistically high sales goals for its employees.

Wells Fargo allegedly aggressively and unlawfully encouraged sales misconduct among its employees by threatening retaliation against workers who refused to engage in the sales misconduct. Those employees were allegedly “routinely counseled, warned, written up, demoted, placed on performance improvement plans, forced to quit, denied promotions, or fired as a result of not meeting sales goals, even though they could have easily met such goals by engaging in Sales Misconduct,” according to the complaint.

The plaintiffs seek to represent a Class encompassing all current and former U.S. employees of Wells Fargo who were subject to the sales goals described in the lawsuit and who were not terminated for engaging in sales misconduct.

Several subclasses have also been proposed in this action, which would represent employees who suffered adverse employment actions for failing to reach sales goals, who reported their concerns about the alleged unlawful sales conduct, or who had their employment terminated or who were let go for reporting or refusing to engage in the alleged misconduct.

The plaintiffs are seeking an award of damages, including two times the amount of back pay for alleged violations of the Dodd-Frank Act and treble damages as applicable under the Racketeer Influenced and Corrupt Organizations Act, or RICO. They also seek reinstatement for eligible Class Members under the Dodd-Frank Act.

Not Painting a Pretty Picture…And another employment suit filed this week—this one by employees of Behr Paint, alleging violations of the Fair Labor Standards Act and California labor law. The defendants are Behr Process Corp., Behr Paint Corp. and Masco Corp.

According to plaintiff Ryan McBain alleges he was employed as a field representative by the defendants and assigned to different Home Depot stores. He claims his responsibilities were answering customer inquiries, replenishing stocks and maintaining store displays. He alleges he was required to prepare time-consuming reports and shuttle between stores and was misclassified as exempt from overtime pay and was not provided with proper meal and rest periods.

In the Behr lawsuit, McBain claims the defendants failed to adequately compensate him for his work as a field representative. The lawsuit also claims that the defendants allegedly failed to keep accurate payroll records of hours worked, meal periods taken, and overtime worked by their employees, refused to pay any overtime compensation to employees for hours worked in excess of 40 hours per week and refused to provide adequate meal and rest periods.

The plaintiff is seeking a trial by jury and seek judgment in his favor, designate collective action, declare misclassification of class members, unpaid wages, liquidated damages, civil penalties, unpaid wages from meal/rest periods not taken, reimburse business expenses, interest, costs and expenses of action, attorneys’ fees and other relief as the court deems just.

FYI – The case is U.S. District Court for the Northern District of California Case number 3:16-cv-07036.

Top Settlements

Meanwhile, North of the 49^th…VW managed to reach a $2.1 billion settlement in the Canadian class action pending over the so-called Volkswagen and Audi defeat devices that temporarily reduced vehicle emissions enabling the diesel engines to pass regulatory emissions tests.

Additionally, the settlement terms stipulate that Canadian owners of diesel-equipped vehicles made by Volkswagen AG will be able to sell their cars back to the auto maker.

The settlement will cover approximately 105,000 Canadians who bought Volkswagen or Audi vehicles equipped with 2.0-liter diesel engines between 2009 and 2015. Each class member will receive $5,100 to $8,000 in compensation. Class members who decide to sell their vehicles back to Volkswagen Canada will receive a payment in addition to the value of their car.

The settlement is expected to receive final approval from Ontario Superior Court and the Superior Court of Quebec pen in March, 2017, after which class members will receive payouts.

The settlement is valued at $2.1-billion if all eligible owners apply and receive the full amount they are entitled to and all eligible vehicles are traded in. It will be among the largest amounts paid out in a class-action suit in Canada.

That’s a wrap for 2016!!! Happy New Year – to you and yours. See you at the bar.

Week Adjourned: 10.28.16 – Farmers, VW, J&J Talc Powder

Top Class Action Lawsuits

Getting Burned on Fire Damage Claims? Los Angeles resident, Ismael Frias, believes so. He filed a bad faith insurance class action lawsuit against a Farmers Insurance Co., unit alleging it illegally limited coverage of wildfire smoke damage by not providing adequate notice that it had changed its policies and stating that the damage was “not actual fire damage.”

Frias, who lives in the suburb of Sylmar, states in his Farmers lawsuit complaint that Mid-Century Insurance Co., applied a “Wildfire Smoke Sublimit” of $5,000 to his claim under his homeowner’s insurance policy, without clearly notifying him. Mid-Century allegedly added the sublimit to the policy when Frias renewed in March, but failed to clearly notify him of the change. Additionally, the suit states that the sublimit is in violation of California insurance law which standardizes fire damage policies.

“The purported $5,000.00 Wildfire Smoke Sublimit violates Insurance Code section 2071, is not reflected on the declarations Page, is not plain, clear and conspicuous, and is unenforceable,” the lawsuit states. According to the complaint, Frias claimed for damages he experienced as a result of a wildfire on July 23, 2016. On that date, the massive Sand Canyon Fire was raging through the mountains north of Sylmar. Ultimately, the fire scorched almost 65 square miles before fire crews were able to contain it in August, according to the National Wildfire Coordinating Group.

Frias received a letter from Mid-Century in September, stating the damage to his home wasn’t “actual fire damage” and thus was subject to the $5,000 sublimit, according to the lawsuit.

Frias is claiming breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of California’s Unfair Competition Act.

The lawsuit seeks to establish a class of California homeowners who had policies containing the wildfire smoke sublimit and who had submitted claims for wildfire odor, soot, smoke, char or ash damage. He also seeks compensatory and punitive damages, along with attorney’s fees, according to the complaint.

“As a result of defendants’ conduct, plaintiff and members of the class and subclass have been damaged, including but not limited to, paying insurance premiums for coverage rendered illusory by the unlawful Wildfire Smoke Sublimit,” the complaint states.

Top Settlements

It’s VW Pay Up Time. It’s been a week of whoppers. Starting with a rather speedy settlement on the consumer end of the Volkswagen emissions scandal. Short version, a $14.75 billion settlement between consumers, the federal government and Volkswagen has been granted final approval. The deal includes an aggressive timeline for VW to begin buying back cars that have the infamous emissions cheating software, known as “defeat devices”.

Under the terms of the deal, VW will set aside $10 million to buy back its vehicles with the defeat devices from consumers.

Additionally, VW must spend $2.7 billion to mitigate the effects of the emissions from cars equipped the so-called defeat devices, and $2 billion over the next 10 years in projects that support the increased use of zero emission vehicles.

Starting in mid-November, Some 475,000 owners of affected VW and Audi 2.0L diesel vehicles will be able to seek buybacks of their cars or have them fixed. Additionally, most plaintiffs who bought their cars before last September, will receive payments of $5,100 to $10,000. About 336,000 car owners have registered for benefits under the settlement and only 3,300 have opted out, according to court papers signed by the judge.

Of note, 3.0 liter six-cylinder diesel vehicles equipped with the defeat devices are not included in this settlement. VW said it is still working toward a resolution with owners of those vehicles.

The multidistrict litigation is In re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, case number 3:15-md-02672, in the U.S. District Court for the Northern District of California.

Big Talc Powder Settlement. A $70 million award has been granted court approval for a woman in California who sued Johnson & Johnson (J&J) alleging J&J Talc Powder caused her cancer. The suit alleged “negligent conduct” in making and marketing its baby powder.

The case was brought by Deborah Giannecchini of Modesto, California, who was diagnosed with ovarian cancer in 2012. She is one of nearly 2,000 women who have filed similar lawsuits, and thousands more are under review by lawyers.

Giannecchini’s win follows earlier awards against J&J for $72 million and $55 million. The $72 million award was granted in February to relatives of a woman who died of ovarian cancer, and the $55 million award to an ovarian cancer survivor.

Talc is a mineral often used to absorb moisture in cosmetic products. Since the 1970s, studies have suggested that talc could be linked to ovarian cancer, according to the lawsuit. Lawyers argued that Johnson & Johnson knew of those studies but put profits ahead of human life by continuing to market their talc products for feminine hygiene use.

Well, that’s a wrap for this week. See you at the Bar!

Week Adjourned: 10.7.16 – American Airlines, iPhone, VW

Top Class Action Lawsuits

Travel Insurance Woes…A consumer fraud complaint against American Airlines took off this week, alleging the airline markets travel insurance as a pass-through charge paid to a third party but doesn’t disclose its profits.

Filed by Kristian Zamber, the multi-million dollar complaint asserts American Airlines misled its customers about its interests in selling the insurance policies and that it aggressively marketed travel insurance sold through its website.

The American Airlines lawsuit is seeking class certification, a jury trial and injunctive and equitable relief for alleged unjust enrichment and violations of Florida’s consumer protection statutes prohibiting companies from posing as revenue conduits.

According to the complaint, Zamber paid roughly $24 to purchase travel insurance in April for a domestic flight from Tampa to Pennsylvania. American Airlines stated the policy had no affiliation with the airline, but instead came from Allianz Global Assistance, with plans underwritten by Jefferson Insurance Co. or BCS Insurance Co. But in reality, the policy sales contributed to a “hidden profit center” for the Fort Worth, Texas-based airline, the complaint states.

The complaint also claims the airline forces customers to choose whether or not to purchase trip insurance policies before allowing them to complete online ticket purchases. Yup—been to that destination….

Touch Disease has Spread North of the border. Apple is facing a defective products class action lawsuit in Canada over allegations that it’s iPhone 6 and 6 Plus models have a defect which effectively results in the smartphone freezing or not responding to touch commands.

Following on from a similar defective products lawsuit filed in the US, the Canadian lawsuit claims Apple was aware of the problem but failed to take action to remedy it.

Filed at the Court of Queen’s Bench for Saskatchewan, the Canadian iPhone complaint would include all Canadian iPhone 6 and 6 Plus customers. It alleges that Apple was negligent because it supplied a defective phone, “knowingly and intentionally concealed” from customers the defect and failed to provide a proper remedy.

According to attorneys who filed the Canadian complaint, Apple has so far only offered its customers around $300 as compensation.

Shortly after the product was launched in 2014, one of the plaintiffs in the class action alleges she bought the iPhone 6 for around $200, hundreds of dollars less than the regular price because she locked into a two-year phone plan contract. Then, a few months after the warranty had expired on her phone, it began to intermittently freeze up and failed to respond to touch commands.

The lawsuit alleges that that the underlying problem is the touchscreen controller chips in the phone’s motherboard, which are not properly secured and can malfunction with regular use.

Top Settlements

Here’s a whopper—but then the size of the Volkswagen defeat device scandal is, likely, unprecedented. A $1.2 billion settlement has been reached between Volkswagen AG and 650 US VW franchise dealerships, ending litigation brought by the dealerships over the VW emissions scandal. Specifically, the dealerships alleged that the value of their businesses had decreased as a result of Volkswagen’s attempts to cheat on vehicle emissions tests through its so called “defeat devices.” According to documents filed Friday in California federal court, the deal will provide an average payout of $.185 million to each Volkswagen-branded franchise dealer in the US.

Additionally, the VW settlement provides for VW buying back from its franchisees, affected vehicles that can’t be put into emissions compliance, using the same terms granted to car owners as part of the tentative consumer settlement.

“This recovery to the franchise dealer class is outstanding, particularly given the immediate need for cooperation among Volkswagen and its franchise dealers to effectuate the terms of the $10 billion-plus consumer class action settlement that is presently pending approval before this court,” the motion states. “Without any obvious deficiencies, the settlement agreement readily meets the standards for preliminary approval.”

Further, there will be no claims process, as dealerships that don’t opt out of the settlement will automatically receive a cash payment based on a formula of 71 times the monthly support payment VW made to dealers in November 2015. Take it or leave it? Almost.

The MDL is In re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, case number 3:15-md-02672, in the U.S. District Court for the Northern District of California.

Well, that’s a wrap for this week. See you at the Bar!

Week Adjourned: 7.1.16 – Pampers, Volkswagen, Wells Fargo SPAM

Top Class Action Lawsuits

Pampers Not So Pampering? The makers of Pampers Natural Clean baby wipes, Procter and Gamble (P&G), got hit with a consumer fraud class action complaint this week, over allegations its advertising ain’t clean.

Filed by Veronica Brenner, on behalf of all others similarly situated, the proposed Pampers wipes class action lawsuit claims that due to the false claims made by P&G, Brenner was misled into buying Pampers Natural Clean baby wipes.

Specifically, she alleges that testing of the wipes revealed they contain unnatural and harmful ingredients such as phenoxyethanol, which allegedly could cause harm to consumers, especially infants.

Brenner is seeking a jury trial and is seeking compensatory, statutory, and punitive damages, injunctive relief enjoining the defendant, interest, restitution and any other forms of monetary relief, court costs and any further relief the court grants.

The case is US District Court for the Central District of California Case number 8:16-cv-01093-CJC-JCG.

Top Settlements

VW To Pay…So, by now almost everyone must be aware that Volkswagen (VW) has reached agreements with the United States and the State of California, and the U.S. Federal Trade Commission (FTC), that will see it stump up $14.7 billion—the largest such payout of its type in US history—to end consumer fraud allegations over the now infamous VW emissions scandal.

Now, just to be clear, the settlements do not resolve pending claims for civil penalties or any claims concerning 3.0 liter diesel vehicles. Nor do they address any potential criminal liability. So stay tuned on that front.

The information on the settlements is provided more comprehensively on our dedicated Volkswagen emissions settlements page—BUT the super short versions are that VW will offer consumers a buyback and lease termination for nearly 500,000 model year 2009-2015 2.0 liter diesel vehicles sold or leased in the US, and spend up to $10.03 billion to compensate consumers under the program. In addition, the companies will spend $4.7 billion to mitigate the pollution from these cars and invest in green vehicle technology.

Additionally, the settlements partially resolve allegations by the Environmental Protection Agency (EPA), as well as the California Attorney General’s Office and the California Air Resources Board (CARB) under the Clean Air Act, California Health and Safety Code, and California’s Unfair Competition Laws, relating to the vehicles’ use of “defeat devices” to cheat emissions tests. The settlements also resolve claims by the FTC that Volkswagen violated the FTC Act through the deceptive and unfair advertising and sale of its “clean diesel” vehicles.

The affected vehicles include 2009 through 2015 Volkswagen TDI diesel models of Jettas, Passats, Golfs and Beetles as well as the TDI Audi A3.

The Buyback option: Volkswagen must offer to buy back any affected 2.0 liter vehicle at their retail value as of September 2015 — just prior to the public disclosure of the emissions issue. Consumers who choose the buyback option will receive between $12,500 and $44,000, depending on their car’s model, year, mileage, and trim of the car, as well as the region of the country where it was purchased. In addition, because a straight buyback will not fully compensate consumers who owe more than their car is worth due to rapid depreciation, the FTC order provides these consumers with an option to have their loans forgiven by Volkswagen. Consumers who have third party loans have the option of having Volkswagen pay off those loans, up to 130 percent of the amount a consumer would be entitled to under the buyback (e.g., if the consumer is entitled to a $20,000 buyback, VW would pay off his/her loans up to a cap of $26,000).

The EPA-approved modification to vehicle emissions system: The settlements also allow Volkswagen to apply to EPA and CARB for approval of an emissions modification on the affected vehicles, and, if approved, to offer consumers the option of keeping their cars and having them modified to comply with emissions standards. Under this option in accordance with the FTC order, consumers would also receive money from Volkswagen to redress the harm caused by VW’s deceptive advertising.

Consumers who leased the affected cars will have the option of terminating their leases (with no termination fee) or having their vehicles modified if a modification becomes available. In either case, under the FTC order, these consumers also will receive additional compensation from Volkswagen for the harm caused by VW’s deceptive advertising. Consumers who sold their TDI vehicles after the VW defeat device issue became public may be eligible for partial compensation, which will be split between them and the consumers who purchased the cars from them as set forth in the FTC order.

Wells Fargo SPAM Settlement… Another settlement to report this week—on the spam text messaging front. Wells Fargo Bank, N.A. (Wells) has agreed to a preliminary $16.3 million settlement to end claims it made unauthorized calls to customers’ cell phones using an Automatic Telephone Dialing System (ATDS), in violation of the Telephone Consumer protection Act (TCPA).

The lawsuit, originally filed on April 14, 2015, alleged that the calls at issue were, without exception, non-emergency, debt-collection calls and texts made in connection with Home Equity Loans and Residential Mortgage Loans.

Under the terms of the proposed settlement, Wells would pay a non-reversionary cash sum of approximately $16,319,000, which, after deductions for costs and attorney’s fees, would be distributed on a pro rata basis to the Class Members who file qualified claims. The expected per-class-member cash award, while dependent upon the number of claims, may be in the range of $25 to $75.

The proposed Settlement Class is defined as: All users or subscribers to a wireless or cellular service within the United States who used or subscribed to a phone number to which Wells made or initiated one or more Calls during the Class Period using any automated dialing technology or artificial or prerecorded voice technology, according to Wells available records, and who are within Subclass One and/or Two.

Subclass One consists of “persons who used or subscribed to a cellular phone number to which Wells Fargo made or initiated a Call or Calls in connection with a Residential Mortgage Loan.”

Subclass Two consists of “persons who used or subscribed to a cellular phone number to which Wells Fargo made or initiated a Call or Calls in connection with a Home Equity Loan.”

Heads Up—a person who is a member of both Subclasses is eligible to make two claims on the Settlement Fund. The three Class Representatives are seeking awards for their time and effort on behalf of the Class, and Wells has agreed not to object to such incentive payments to be paid to Davis, Markos, and Page from the Settlement Fund provided that the payments do not exceed $60,000 in the aggregate or $20,000 for each Class Representative, subject to Court approval.

The case is Markos v. Well Fargo Bank, N.A. (United States District Court for the Northern District of Georgia, Case No. 1:15-CV-01156).

Ok, that’s a wrap folks… Happy Canada Day and Fourth of July…. See you at the Bar!

Week Adjourned: 9.25.15 – Volkswagen, Chipotle, Hain Celestial

Top Class Action Lawsuits

Car of the People? Uhh…Mmaybe Not. This time a few weeks ago, the general public had not even heard of a defeat device—but this week? Volkswagen got hit with multiple lawsuits this week, including a $1-billion consumer fraud class action lawsuit in Edmonton, Canada, stemming from the admission by the automaker that it sold vehicles that were designed to skirt emissions laws. How? A little something called a Defeat Device.

Volkswagen has revealed that it had installed defeat devices in 11 million vehicles worldwide. So, likely this wasn’t an accidental memo misread… The devices are designed to ensure the autos pass emissions tests, but revert to producing emissions vastly in excess of emission standards once the tests are over.

The VW lawsuit states that “by manufacturing, testing, distributing and selling affected vehicles with defeat devices that allowed for improper levels of emission, Volkswagen violated the common law and legislative standards, was negligent, defrauded its customers, and engaged in unfair competition.”

Furthermore, the lawsuit claims that had the plaintiffs known of the defeat device, “they would not have purchased or leased those vehicles, or would have paid substantially less for the vehicles than they did.”

The Volkswagen complaint criticizes the alleged fraudulent behavior as “high-handed and reckless, intentional, fraudulent or grossly negligent,” worthy of a penalty that “recognizes the purposes of class actions” while protecting consumers and punishing or deterring “wrongful corporate conduct.”

There is also concern regarding loss of value to the vehicles on resale, the trouble consumers will be put through in order to get their vehicles repaired so they meet Canadian emission standards (ditto for US volks—hello California??), and whether in fact the vehicles can even be repaired without significant loss to power and performance.

And that’s just the people who bought these cars. True, an institutional investor has already filed a Volkswagen securities lawsuit—but can you imagine what’s going on with Volkswagen dealers? Nothing like a lot full of VW’s that are basically unsalable. If I had to wager a bet, it’s on VW dealership lawsuits next…

The following Volkswagen models re named in the action:

2009-2015 Jetta
2009-2015 Beetle
2009-2015 VW Golf
2014-2015 Passat
2009-2015 Audi A3

Did Chipotle have your Back(ground)? Chipotle Mexican Grill Inc, has been given food for thought this week, after being served with a class action lawsuit alleging the restaurant chain violated the Fair Credit Reporting Act (FCRA) by obtaining employment background checks after burying the required disclosure in its application materials. Filed by a job applicant, named plaintiff Lorena Mejia, the nationwide lawsuit asserts Mejia filled out a standard Chipotle application that contained a provision allowing the company to conduct a background check. However, the forms failed to make clear that the application contained authorization for Chipotle to perform background checks, in violation of the FCRA’s standard.

Specifically, the complaint states that the background-check disclosure was surrounded by potentially distracting language such as a provision for at-will employment. Who decided this was necessary?

“Under the FCRA, it is unlawful to procure or cause to be procured, a consumer report or investigative consumer report for employment purposes, unless the disclosure is made in a document that consists solely of the disclosure and the consumer has authorized in writing the procurement of the report,” the complaint states. I should hope so.

Further, the lawsuit contends that employers have been warned by the Federal Trade Commission stating that applicants are entitled to receive the disclosure as a separate document, not embedded into an employment application.

Mejia asserts that Chipotle failed to provide her a written summary of her FCRA rights, despite a provision of the statute requiring Chipotle to do so. Additionally, the company violated California privacy laws because it didn’t offer applicants a box to check as an indication that they wanted to receive copies of their reports, the complaint states.

The plaintiff is seeking to represent a nationwide class of Chipotle applicants seeking damages under the FCRA, as well as a subclass of California applicants bringing state-law claims. The case is Mejia v. Chipotle Mexican Grill Inc. et al., case number 5:15-cv-01911, in the U.S. District Court for the Central District of California.

Go get’em!

Top Settlements

Even the Crunchy Granolas have been at it… Hain Celestial Group Inc agreed a $7.5 million settlement this week, potentially ending a consumer fraud class action lawsuit alleging it falsely labeled products as organic. In addition to the cash payout, the company has agreed to provide up to $1.85 million in coupons.

So -who can you trust these days?

The lawsuit, filed by lead plaintiffs Rosminah Brown and Eric Lohela, claimed that the products failed to meet even minimum state requirements for being “organic.” Specifically, the organic components comprised less than 70 percent of the products’ ingredients, as required by the California Organic Products Act.

Hain Celestial, btw, is huge–their brands include many faves among all-natural and organic food shoppers. For example, they’ve got Arrowhead Mills, Casbah, Earth’s Best, Health Valley, MaraNatha, Rice Dream, Soy Dream, Mountain Sun, Boston’s, Garden of Eatin’, Bearitos, Sensible Portions, Terra Chips and Celestial Seasonings.

“The settlement provides substantial monetary relief for many thousands of purchasers of the challenged products who allegedly paid a premium over comparable personal care products that did not purport to be organic … [and] compensates class members for a significant portion of their alleged damages,” the plaintiffs stated. “The settlement accomplishes this while avoiding both the uncertainty and the delay that would be associated with further litigation.”

According to the reported terms of the Hain Celestial settlement, any class member who submits a valid claims form but does not have a receipt will be entitled to receive a cash refund equal to 50 percent of their Hain purchase up to $50 or a combination of cash and coupons for their claims. Those with a receipt for their purchases will receive a full refund.

The settlement needs final court approval and, if approved, all claims except one will be resolved. The remaining claim is concerns the water used in certain products – which Hain asserts is organic and which the plaintiffs state is not.

The settlement hearing is scheduled for October 8, 2015. The case is Rosminah Brown et al. v. Hain Celestial Group Inc., case number 3:11-cv-03082, in the U.S. District Court for the Northern District of California.

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