Week Adjourned: 8.18.17 – Lyft, Carnival, Mylan EpiPen

Top Class Action Lawsuits

Lyft may need to raise their game. They got with an employment class action lawsuit this week, alleging the ride-hailing service uses a calculation method for wages that results in drivers making less than the amount they are actually owed. How novel.

Filed in federal court in New Jersey, the lawsuit alleges that Lyft contracts state that its drivers will receive a portion of the fare charged to riders, which is based on an estimation of the time and distance it will take to complete the ride. However, according to the complaint, drivers’ pay is actually based on a separate fare calculation reflecting actual miles and minutes driven. Therefore, the drivers are receiving less than they are contracted to receive.

The proposed nationwide Lyft class action lawsuit consists of drivers who entered into contracts with Lyft to provide transportation services to customers in exchange for a portion of the fare Lyft charges riders, plus tips if applicable and minus service fees, cancellation fees, damage fees, tolls, surcharges and taxes. The class would include drivers who opted out of Lyft’s arbitration agreement.

Named plaintiff Keara Nieves, a Long Branch, New Jersey, resident, has worked as a Lyft driver since 2016. Nieves alleges that the Lyft driver’s contract sets forth, in part, that “all fare payments are subject to a Lyft commission …You will also receive any tips provided by riders to you, and the tips will not be subject to any Lyft commission.” Lyft also reserves the right to set and change prices for services and commission, the complaint states.

Nieves claims that she understood she would be paid an amount equal to the fare charged to the rider plus applicable tips and minus Lyft’s commission of 20 percent to 25 percent, depending on the time of day, and service fees, cancellation fees, damage fees, tolls and other surcharges for rides she successfully completed, the complaint states.

However, in practice, Lyft pays its drivers based on a calculation of distance and time actually driven, according to the complaint. This results in a discrepancy between the fare charged and the “improper” basis Lyft uses to pay its drivers is concealed from drivers, the plaintiffs assert. “Specifically, defendant Lyft has retained a larger portion of the passenger fare than they promised they would retain in the [driver agreement],” the complaint states.

The case is Nieves v. Lyft Inc., case number 3:17-cv-06146, in U.S. District Court for the District of New Jersey. 

Top Settlements

Hey—you might be taking that cruise after all! Well, sort of. Did you get a call? If so, you could be in the money, honey. This week Carnival, Norwegian, and Royal Caribbean Resort cruise lines, in conjunction with Resort Marketing Group (RMG), agreed to settle a Telephone Consumer protection Act (TCPA) class action lawsuit alleging they made illegal telemarketing calls to consumers offering promotions with those cruise lines.

The Carnival lawsuit was filed by plaintiff Philip Charvat who claims he received the pre-recorded cruise line telemarketing calls which allegedly offered promotions from Carnival, Norwegian, and Royal Caribbean cruise lines. He further claims that he never provided prior express written consent to receive these calls. Without his consent, the lawsuit alleges, the defendant’s cruise line telemarketing violated the TCPA.

According to the Carnival cruise settlement deal, a settlement fund worth between $7 million and $12.5 million will be created depending on the number of claims filed. This fund will cover payments to qualifying Class Members, an incentive award for Charvat, and other related costs.

Eligible class members include people who received pre-recorded telephone calls between July of 2009 and March of 2014 on their residential or cellular telephone lines initiated by RMG during which RMG offered a free cruise with Carnival, Royal Caribbean, or Norwegian cruise lines as a promotion.

The settlement agreement specifically limits Class Members to those persons whose phone numbers are listed in Resort Marketing Group’s database.

Eligible class members may receive a potential award of up to $900 per telephone number.

A final hearing is set for April 2018.

The case is Philip Charvat v. Resort Marketing Group Inc., et al., Case No. 1:12-cv-05746, in the U.S. District Court for the Northern District of Illinois.

Mylan may need a life-saving injection after this is over. The drug maker has agreed to pay $465 million to settle fraud claims that it underpaid rebates for the EpiPen, which amounts to stealing from the government federal authorities claimed. The EpiPen lawsuit, alleging violations of the False Claims Act, was possible due to Sanofi acting as a whistleblower by alerting the federal government to the scam.

According to the terms of the now finalized agreement, Sanofi will receive $38.7 million for its role in alerting the government, together with a share of monies the states will receive as part of the financial recovery by state and federal health programs.

The lawsuit stemmed from Mylan’s deliberate misclassification of the EpiPen as being generic, which meant it paid lower rebates to the government than it should have. According to government regulations, drug makers must pay Medicaid in the form of rebates to avoid price gouging. Further, drug makers must pay a higher rebate to the government for drugs that are only available through a single source, which would be the difference between the current price and the price the drug would have cost if it had only increased by the rate of inflation. In 2009, an EpiPen two pack, which contains live saving medication used to treat people who are going into anaphylactic shock, a potentially fatal allergic reaction, rose in price by $500, from $100 to $600.

Sanofi became aware of Mylan’s alleged The False Claims Act rebate violations when it was allegedly developing its own version of an epinephrine injector, Auvi-Q. Sanofi claimed Mylan tried to block its Auvi-Q by forcing insurance companies to not cover it or to put it at a disadvantage on drug formularies. Mylan did not admit liability in the settlement.

The case is United States ex rel Sanofi-Aventis US v. Mylan Inc. et al, case number 16-cv-11572, in the U.S. District Court for the District of Massachusetts.

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

One thought on “Week Adjourned: 8.18.17 – Lyft, Carnival, Mylan EpiPen”

Leave a Reply

Your email address will not be published. Required fields are marked *