Week Adjourned: 7.31.10

Top Class Actions

Another Bite out of Apple. So, Apple is in the news this week, as it was last week, this time over allegations that its iPad is not up to scratch. Essentially, the proposed class action alleges that the smash hit techno gizmo “overheats and fails to operate properly in warm conditions.”

The complaint reportedly states that the iPad “does not live up to the reasonable consumer’s expectations created by Apple” because it “overheats so quickly under common weather conditions.” And, “that in direct sunlight, the iPad turns itself off after just a few minutes of use.” 

FYI—Apple said that customers bought 3.27 million iPads last quarter. It was only introduced at the beginning of April. So, no surprise it has outsold the iPod outsold revenue-wise: $2.17 billion in the quarter ended June 10 compared with $1.54 billion for the iPod. Well, if there is a problem, at least we know they can afford the fix. 

C’mon, Smile and Say “Fleeced!” What would the week be without a wages class action? This one pertains to back wages reportedly owed to thousands of employees of Consumer Programs Incorporated (CPI) who work at Sears Portrait Studios and Wal-Mart Picture Me Portrait Studios. 

BTW—CPI states it is the largest portrait studio operator in North America, with photography services in over 3,000 locations nationally. Umm. That’s a lot of overhead…

The specific allegations include failure to pay employees for all the time they work, including time spent preparing the studios for upcoming photography sessions and cleaning studios at the end of the day. And, alleged adjustment of employees’ time records if they clock in more than 10 minutes before the studios open; does not compensate them for participating in mandatory conference calls; attending mandatory meetings; and distributing CPI marketing materials to businesses, hospitals, daycare centers, nursing homes, and churches. 

Photographers are also required to use their own money to buy props and toys to use in photography sessions, and are not reimbursed for these purchases. The employees assert these pay practices violate federal and state wage laws, including the Fair Labor Standards Act.

Heads-up—the class action seeks to recover back wages for all current and former photographic-customer service agents, assistant managers and managers nationwide who worked at any time since 2007. 

Top Settlements

Should’ve had a Prix Fixe Dinner Instead. Price fixing was a popular theme this week, with two settlements to report. The first involved Sea Star and about $18.5 million.  This class action was brought by plaintiffs who alleged that Sea Star was involved in price-fixing for shipping cargo in the Puerto Rico trade lane. FYI—this suit/settlement is separate from the U.S. Department of Justice antitrust investigation that resulted in convictions of some former executives at Sea Star and Horizon Lines. 

And the second involves American Airlines. Well, it’s a proposed settlement that would see AA pay $5 million and provide evidence of other airlines who engaged in price fixing. 

The suit, brought by freight shippers, alleged they were victims of a price-fixing cartel. According to a report by the Associated Press, American Airlines is the first to agree to help the shippers conduct other lawsuits outside the US. Apparently, Air France KLM also implicated in the price-fixing cartel and involved in the same case, agreed to pay an $87 million settlement but stopped short of offering any help in terms of information.

Ok. That’s it for this week. I hear the bar calling my name…

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