Week Adjourned: 7.17.10

Top Class Actions

Recall on a Rolling Basis. This week’s pharmaceutical lawsuit is against Johnson &Johnson (J&J) alleging fraud and racketeering and demanding compensation for recalled children’s allergy and cold medicines—you remember—the recall that kept going and going—first on April 30th concerning over 40 different types of kiddies cold meds, and then again in June—’oops—we maybe should have recalled these also…’ and once more for good measure in July.

But it’s not the recall that’s the problem apparently, it’s the fact that J&J’s McNeil Consumer Healthcare and McNeil-PPC had offered consumers coupons for refunds of the recalled products, which consumers have rejected, according to the suit.

According to a report on Bloomberg’s Businessweek, the complaint states the coupons are worthless because McNeil has stopped making the medicines and “wrongly assumes that all consumers will want to purchase the company’s children’s products at some uncertain future date.”

So, the suits seek to proceed on behalf of plaintiffs’ groups for residents of Illinois, Texas and Florida, as well as consumers in the U.S. and Canada, who have bought the drugs since December 2008.

Sweating the Glass Ceiling? 24-hour Fitness also got hit with a class action this week brought by its employees over allegations of discrimination on the basis of race, color, national origin and gender.

Apparently this very large chain of fitness facilities—as in 400 fitness centers, 200 of which are reportedly located in California (Really? No way!) and employ roughly 10,000 people….has “systematically subjected minority and female employees to discrimination regarding promotions to management positions and equal compensation in violation of the California Fair Employment and Housing Act and the California Business and Profession Code.”

Obviously, it remains to see how much traction this suit gets but it could be big… so stay tuned…the plaintiffs are asking for the court to order 24 Hour Fitness to end its discriminatory employment practices and to provide back pay and damages to the employees who have been treated unfairly. Burn baby burn!

Top Settlements

And for the record… A new record was set this week, courtesy of Goldman Sachs—who has agreed to pay a $550 million fine to end a civil suit alleging fraud. How novel. The fraud charges I mean. The allegations were that GS misled purchases of mortgage-related investments (not to mention the mortgage holders themselves, more on that in a minute).

According to a report by AP and CBS News, the agreement calls for Goldman to pay the Securities and Exchange Commission (SEC) fines of $300 million, with the remainder of the funds going to compensate people who lost money on their investments.

Maybe I’m being naive here but how is it that the people who bought bad stocks—as it turns out—get compensated when they were planning on making money off the backs of people who were duped into buying bad mortgages? What about the people who lost their homes? How does that work?

The settlement is reportedly the largest brought against a financial company since the beginning of the SEC. No comment.

Ok. That’s it for this week. I hear the bar calling my name…(fingers crossed and more—that the BP Oil Spill Fix holds…)

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