Week Adjourned: 5.15.09

Top Class Actions: The Week of the Biggies

Hotel Costco: You can clock in, but you can never leave? It appears to have been another busy week in law firms and courthouses across North America. Let’s start with Costco—last week Costco was in the news for having settled an unfair business practices class action and this week they’re in the news for “falsely imprisoning” employees in its California warehouses. Whaaat?

When I first read this my mind reeled, “what new business venture is this?”

Turns out it’s yet another unpaid overtime and wages class action centered in California. What is it about California?  (I’m referring to the endless labor law violations).

The class action centers on employees who were and are forced to remain in the warehouses after closing while store managers make goods secure and lock up. This has been going on for years, apparently. But now there is a lawsuit, of course, and the lawyers are seeking US $50 million in damages.

O Canada!—who was standing on guard at Guidant? Across the border in Canada, not a land well-known for class action lawsuits—something large is taking place. Earlier this month a national class action was certified against Guidant Corp, alleging that the company knowingly sold defective pacemakers. The class so far represents more than 28,000 people, and the lawyers are seeking CD$525 million in damages.

Highway Robbery? And a class action that’s been getting a lot of media this week is the Massachusetts Turnpike lawsuit, whose plaintiffs are being represented by a lawyer made famous in the 1998 film “A Civil Action“, Jan R. Schlichtmann.

How many of us have paid tolls to use highways, turnpikes, bridges—whatever—and wondered where the money actually goes? Well Schlichtmann appears to have determined that 58 cents of every dollar paid by people using the Massachusetts state highways is not going to fund turnpike projects as the they are supposed to do, but rather to try and pay down debt on something state residents hatefully refer to as “the Big Dig.” And this is, apparently, an illegal use of the funds. Within days of announcing the suit over 1,000 people had signed up! If the plaintiffs win their case the Turnpike Authority could be on the hook for up to $300 million.


Top Settlements

In Insurance…A lot of insurance companies settling this week—Jackson National for $22 million and Nationwide in Arkansas —with an as yet undetermined amount.

In Cell Phone Contracts…For those of us who got stuck paying early termination fees (ETF)  on cell phone contracts, you may be happy to hear that T-mobile coughed-up $11.5 million as concession for its violation of state and federal laws regarding flat fee ETFs.

In Subprime Mortgages…And some good news for mortgage holders in Massachusetts this week, as Goldman Sachs Corp has agreed a $60 million settlement with the state over its bundling of subprime mortgages with securities—otherwise known as the “subprime mortgage fiasco”. Under the terms of the agreement, GSG will pay $50 million to compensate homeowners and $10 million to the state of Massachusetts. The agreement also allows for some loan principal reductions.

In Asbestos Exposure…Finally, the jury in WR Grace Lawsuit—famously billed as the largest environmental criminal lawsuit in US history—found the company and 3 of its top executives not guilty in connection with knowingly exposing workers and townspeople in Libby Montana to lethal amounts of asbestos between 1963 and 1990. We’ll be covering that story in detail on this site shortly.

What to Watch:

Heparin was in the news again this week, unfortunately, as a result of 2 patient deaths in Delaware. So far there is no established connection between the heparin and the deaths, however, it appears, for the moment at least, to be the only common link between the patients affected—several patients also became sick. So watch for more breaking news on that story.

See you next week…we’re off to the bar (yeah, that one)

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