Week Adjourned: 7.9.10

Top Class Actions

And the Winner is… It’s nice to know that in these tumultuous times wracked with financial uncertainty that some things remain constant. That we can rely on our institutions to proudly defend their position as looking out for our best interests, when in fact they are looking out for their own. Business as usual. As usual.

This week, the Business as Usual unofficial award goes to City National Bank of Charleston WV. They are facing a class action lawsuit based on allegations that they manipulate debit card transactions so as to maximize overdraft fees.

Now, I realize that this practice is hardly original practice, but it’s reassuring to see that smaller institutions are taking up the larger banks business strategies, following their lead so-to-speak. After all, shareholders may benefit.

So, I’m going to assume that the fellow who filed the lawsuit is not a shareholder. Correct me if I’m wrong. Here’s his beef:

“The plaintiff alleges, among other things, that City National: (a) engages in a systematic policy of re-ordering debit card transactions from highest dollar amount to lowest dollar amount so as to deplete the customer’s available funds as quickly as possible while maximizing the number of overdraft fees; (b) charges overdraft fees even in situations where in fact a customer has not overdrawn his checking account; (c) charges overdraft fees even in situations where City National in fact did not pay out more funds than were in the customer’s checking account; and (d) fails to provide accurate account balance information on the bank’s website or at the point of sale.”

Any of this sound familiar?

My advice? If you’re not predisposed to filing a lawsuit, buy shares.

Top Settlements

Time to put the Assisted in Assisted Living. And the biggie of the week is—a $671 million award in damages against California-based Skilled Healthcare Group. FYI—The settlement represents the maximum amount of damages that can be imposed for violating the state’s statutes—$613 million, plus $58 million in restitution. Nice. Needless to say the company’s stock price plummeted 75% on the news. It just seems nothing is safe these days.

The California statute, by the way, states that nursing homes must provide 3.2 nursing hours per day per patient. Even that doesn’t seem very much.

In any event, the suit alleges that the company understaffed its 22 assisted living facilities in California.  According to one attorney representing the plaintiffs, the lack of staffing put patients at risk, and as he told the LA Times, “Call lights don’t get answered, persons don’t get proper hygiene, persons don’t get their medications on time or the care they need.”

Filed in 2006, the class action represented a whopping 32,000 residents, and family members of deceased residents of Skilled Health Care Group’s facilities. The jury verdict was handed down Tuesday in Humboldt County Superior Court.

And, the jury ain’t finished yet. Apparently they’re planning to discuss whether or not the company should also pay punitive damages. Needless to say the folks at Skilled Healthcare plan to appeal. I’m willing to bet it would have cost less in the long run to hire the necessary staff.

Halitosis Cure it Ain’t. On a lighter note—all you Wrigley’s Eclipse gum chewers out there—heads up—a settlement was reached in the class action brought against the chewing gum manufacturer, for $6 million, with a possible additional $1 million to reimburse “eligible consumers up to $10 for qualified purchases of Eclipse chewing gum and mint products with a “natural germ killing” message, and to cover the other costs associated with the settlement.”

The lawsuit was filed in 2009, claiming that Wm. Wrigley Jr. Company, maker of Eclipse chewing gum and mints had engaged in misleading advertising about the germ-killing properties of Wrigley’s Eclipse products.

Well! Who knew? Not to be cynical, but on what planet is chewing gum capable of killing bacteria that cause bad breath? Remember Listerine? Bacteria are tough little buggers.  Let’s not even get into antibiotics…Don’t get me wrong—it’s a great idea—just a little fantastic.

Anyway, Wrigley has also agreed to make certain changes to its marketing and labeling of this product. Umm.  Looking forward to that. In the meantime I think I’ll spend my ten bucks on some Altoids.

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

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