General Motors Co. Better Buckle Up because they are facing the mother of defective automotive class actions… two consumer fraud class action lawsuits to be precise, which combined, seek to represent drivers of 27 million vehicles in the US.
Thought to be the largest lawsuits brought against GM to date, they stem from GM’s series of recalls prompted by 60 serious defects in 27 million vehicles, according to legal documents. The plaintiffs are seeking $10 billion in compensation for reduced values of their vehicles.
The proposed GM lawsuits seek to represent owners who bought or leased a GM recalled vehicle between July 2009 and July 2014 and either still have it, sold it after mid-February, when the recalls started, or had an accident that destroyed it after that date. More than 20 million customers could join the lawsuit, according to the attorneys representing the plaintiffs.
According to the complaints filed on Tuesday in federal court in Manhattan, “New GM repeatedly proclaimed that it was a company committed to innovation, safety and maintaining a strong brand.” “New GM” is the re-branded name for automaker after its 2009 bankruptcy and government bailout. “The value of all GM-branded vehicles has diminished as a result of the widespread publication of those defects and New GM’s corporate culture of ignoring and concealing safety defects.”
Hundreds of individual complaints against GM about vehicle values were combined in two class actions, with the larger suit involving vehicles made after the bankruptcy. The smaller suite focused on ignition-switch faults in vehicles made before the bailout. Both complaints say the vehicles at issue started losing value in February 2014, a situation that continues, affecting Chevy Camaros with model years 2010 and 2011 that lost $2,000 in value, and the 2009 Pontiac Solstice, which has lost almost $3,000 in value, according to the suits.
More than 27 deaths have been attributed to the defects, according to the latest claims report released earlier this week by the attorney overseeing the compensation fund for victims of crashes stemming from the defects.
The cases are In re: General Motors LLC Ignition Switch Litigation, case number 1:14-md-02543, in the U.S. District Court for the Southern District of New York.
On LinkedIn? Heads Up—the social networking site is facing a proposed class action alleging that the “trusted reference” reports offered through the 300 million-member professional social network don’t comply with the Fair Credit Reporting Act (FCRA) certification and disclosure requirements. Oops.
All kidding aside, the alleged breach could have far reaching effects, not surprisingly. The LinkedIn lawsuit, filed in California federal court, claims LinkedIn must comply with the same standards mandated by the FCRA for credit reporting agencies who furnish consumer reports for employment purposes. The lawsuit contends that the company has filed to do so, by not maintaining reasonable procedures to limit the furnishing of consumer reports containing inaccurate information to potential employers. This could, in turn, potentially harm job applicants who are evaluated based on that information. Got it?
Here’s the skinny: filed on behalf of plaintiff Tracee Sweet and others, the complaint states that LinkedIn offers a premium service allowing users to click on a member’s profile and select a “search for references” link. The site then generates a reference report containing the names, locations, employment areas, current employers and current positions of all persons in the user’s network who may have worked with that individual.
According to the lawsuit, any potential employer using these reports can anonymously dig into the employment history of any LinkedIn member, and make hiring and firing decisions without the knowledge of the member, without any safeguards in place to ensure the potential employer received accurate information.
“Such secrecy in dealing in consumer information directly contradicts the express purposes of the FCRA, which was enacted to promote accuracy, fairness and the privacy of personal information assembled by credit reporting agencies,” the lawsuit states.
Further, the lawsuit states that the information regarding employment history, including job titles is supplied by each individual member, and LinkedIn therefore relies solely on each of its members to accurately input and update their own employment history. If a LinkedIn member misrepresented his or her job title from a past employer or included other fabricated employment information in their profile, that information would appear on a reference report for any other LinkedIn member who may have worked at the same employer with that individual.
“Such inaccurate information could lead to negative consequences for any job applicant whose potential employer contacts that reference,” the complaint states.
The lawsuit seeks to represent all LinkedIn users in the United States who had a reference report generated on from their profile within the last two years, and a subclass of anyone who also applied for employment through a LinkedIn job posting.
The case is Tracee Sweet et al. v. LinkedIn Corp., case number 3:14-cv-04531, in the U.S. District Court for the Northern District of California.
Extendicare Didn’t Care? This settlement hits a number of buttons—for all the wrong reasons. Extendicare Health Services Inc. and its subsidiary Progressive Step Corporation (ProStep) have agreed to pay $38 million to the United States and eight states to resolve allegations that Extendicare billed Medicare and Medicaid for materially substandard elder care nursing services that were so deficient that they were effectively worthless and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services, the Justice Department and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) jointly announced today. This resolution is the largest failure of care settlement with a chain-wide skilled nursing facility in the department’s history. Investigators were tipped off by whistleblowers at Extendicare.
As part of this settlement, Extendicare has also been required to enter into a five year chain-wide Corporate Integrity Agreement with HHS-OIG. Extendicare is a Delaware corporation that, through its subsidiaries, operates 146 skilled nursing facilities in 11 states. No small operation. ProStep provides physical, speech, and occupational rehabilitation services.
This settlement resolves allegations that between 2007 and 2013, in 33 of its skilled nursing homes in eight states, Extendicare billed Medicare and Medicaid for materially substandard skilled nursing services and failed to provide care to its residents that met federal and state standards of care and regulatory requirements. The government alleges, for example, that Extendicare failed to have a sufficient number of skilled nurses to adequately care for its skilled nursing residents; failed to provide adequate catheter care to some of the residents and failed to follow the appropriate protocols to prevent pressure ulcers or falls. The eight states involved in this component of the settlement are Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin.
Additionally, this settlement resolves allegations that between 2007 and 2013, in 33 of its skilled nursing homes, Extendicare provided medically unreasonable and unnecessary rehabilitation therapy services to its Medicare Part A beneficiaries, particularly during the patients’ assessment reference periods, so that it could bill Medicare for those patients at the highest per diem rate possible.
As a result of the settlement, the federal government will receive $32.3 million and the eight state Medicaid programs will receive $5.7 million. The Medicaid program is funded jointly by the federal and state governments.
Hokee Dokee—Time to adjourn for the week. Have a fab weekend—See you at the bar!
When Winning Your Lawsuit Just Isn’t Enough…
Talk about Caveat Emptor. A couple who purchased an upscale home next to golf course in a suburb of St. Louise, MO, got more than the nest of their dreams—turns out it was also the dream home for some 6,000 brown recluse spiders—which, incidentally, are venomous.
The couple bought the house in 2007 for $450,000. Shortly after moving in they discovered the spider problem. After unsuccessfully trying to evict their unwanted tenants, through various strategies including interior and exterior pesticides, Brian and Susan Trost filed a claim with their insurer—State Farm, only to have it denied. So they sued the former owners for failure to disclose. They stated in their lawsuit that the spiders and their telltale webs were absent during the couple’s final walk-through. However, shortly after moving in—ie the first day, the spider problem became apparent. In fact, Susan Trost stated that once when showering a spider fell from the ceiling and washed down the drain, narrowly missing her. Time to find a hotel!!!
In 2012, Mrs. Trost told St. Louis television station KMOV-TV the spiders “started bleeding out of the walls,” and at least two pest control companies were unable to eradicate the infestation. I see a movie script here…
In 2011, during a civil trial in St. Charles County, one of the county’s leading experts on brown recluse spiders, Jamel Sandidge, a professor of biology at University of Kansas, estimated there were between 4,500 and 6,000 spiders in the home. Making matters worse, he said, those calculations were made in the winter when the spiders are least active. Really, really not what you want to hear.
The Trosts, not surprisingly, won their lawsuit against the previous home owners, but were unable to collect the judgement of $472,000, because, State Farm, the previous home owners’ insurers, claimed that the former owners’ policy lacked coverage and refused to pay. Then, the previous owners filed bankruptcy. Nice.
Although the Trosts have filed suit against State Farm for denying their original claim, they moved out of the house and allowed it to go into foreclosure. Because the previous owners filed bankruptcy—the Trosts, may never see their money.
According to the St. Louis Dispatch, the home, now owned by the Federal National Mortgage Association, was covered with nine tarps this week and workers filled it with a gas that permeated the walls to kill the spiders and their eggs. “There’ll be nothing alive in there after this,” said Tim McCarthy, president of the company hired to fix the problem once and for all.
I can’t help wondering about the neighbors—if I lived next door, I’d be really worried…
A roundup of recent asbestos-related news and information that you should be aware of. An ongoing list of reported asbestos hot spots in the US from the Asbestos News Roundup archive appears on our asbestos map.
Researchers at the Center of Excellence in Environmental Toxicology (CEET), Perelman School of Medicine at the University of Pennsylvania, have been awarded a $10 million grant from the National Institute for Environmental Health Sciences (NIEHS) over the next four years to study asbestos exposure pathways that lead to mesothelioma, the bioremediation of this hazardous material and mechanisms that lead to asbestos-related diseases. One of these, mesothelioma, a rare cancer diagnosed in about 3,000 patients each year, is caused almost exclusively by exposure to asbestos. The disease is usually fatal with very poor prognosis once diagnosed.
The Penn Superfund Research and Training Program (SRP) Center, which was established by this grant, evolved as a direct consequence of concerns from the community living near the BioRit Asbestos Superfund site in Ambler, PA, about 20 miles north of Philadelphia.
This award is the first NIEHS Superfund grant driven by problems identified in a community-academic partnership. CEET’s Community Outreach and Engagement Core (COEC) has facilitated bi-directional communication with the Ambler community for the last five years. The communities of West and South Ambler have long been active in studying the ramifications of their town’s long-closed asbestos factory.
Residents in these communities remain at risk for environmental exposure and a potentially increased risk of developing mesothelioma.
From the late 1880s through the present day, Ambler residents have had either occupational or environmental exposure to asbestos. As a result, both current and former residents of the area face potentially serious long-term health consequences. The Pennsylvania Department of Health, with the aid of the COEC, determined that there has been an increase in the rate of mesothelioma in the area compared to the adjacent zip codes, with women having a greater risk than men. The researchers are hopeful that continued investigation and education will yield more information about exposure pathways that led to these health risks.
The new Center will tackle two inter-related environmental science studies and four biomedical science studies. The six projects were designed to address a community-based question or concern that had been previously identified by the COEC:
• Can we remediate asbestos without moving it from the original disposal site?
• What do we know about the fate and transport of asbestos in the environment by water and air?
• What do we know about the exposure pathways that were responsible for the mesothelioma cluster in Ambler? And why is the incidence higher in women?
• Is susceptibility to mesothelioma genetic?
• Can asbestos-related disease be prevented?
• Is there a blood test to determine whether a person will get asbestos-related disease?
Jefferson County, WV: The family of a man who recently died after exposure to asbestos have filed an asbestos lawsuit against his former employer Gulf Oil/Chevron in Jefferson County.
In their complaint, Dolores Belton, Carla Mahan and Myra Mitchell allege their husband and father, Jack Belton, during the course of his employment with the defendant was exposed to toxic materials, including asbestos dust and fibers. “As a result of such exposure, Jack Belton, developed an asbestos-related disease, asbestosis, from which he died a painful and terrible death on March 6, 2014,” the lawsuit states.
The plaintiffs allege Chevron is responsible for their loved one’s injuries, saying the company knew that the products could case asbestosis and other related cancers but still allowed their employees to work around the products. In their complaint, the plaintiffs seek unspecified exemplary and punitive damages plus costs. (wvrecord.com)
Jefferson County, WV: Rosemary Philmon, surviving spouse of Jesse Philmon, and Terry and Ryan Philmon, his surviving children, have filed an asbestos lawsuit against Chevron USA Inc. alleging the company exposed Jess Philmon to asbestos during the course of his employment at Chevron. This exposure resulted in his developing lung cancer and subsequently dying from it.
According to the complaint, Jesse Philmon was was allegedly “exposed to toxic materials including asbestos dust and fibers,” while employed by Gulf Oil/Chevron in Jefferson County.
Philmon developed lung cancer “from which he died a painful and terrible death March 6, 2013,” the lawsuit states.
Philmon’s family alleges Chevron has known for decades that asbestos-containing products could cause asbestos-related cancers but still allowed employees to be exposed to it on the job. They accuse the company of gross negligence for allegedly failing to take the necessary precautions or provide adequate training for Jesse Philmon.
Rosemary Philmon and her sons seek an unspecified amount in exemplary and punitive damages. (wvrecord.com)
It’s getting hard to stay on top of the number of defective automotive lawsuits, and math was never my strong suit…but suffice to say there are many. Added to the list this week is a putative class action filed against Mazda Motor Company, alleging the automaker hid knowledge that Mazda 3 and Mazda 6 vehicle models have defective dashboards that melt when exposed to sunlight and subsequently give off a chemical odor and become reflective, posing a risk of temporary blindness in drivers. Talk about a one-two punch. Like I said, math is not my forte but even the most basic understanding indicates that selling a product that can injure or kill your customers can’t add up to good business.
According to the lawsuit: “Mazda’s conduct violates multiple state consumer protection statutes. On behalf of themselves and the proposed classes, plaintiffs seek to compel Mazda to warn drivers about the known defect and to bear the expense of replacing dashboards that Mazda should never have placed in the stream of commerce in the first place.”
Filed in California federal court by lead plaintiffs Danielle Stedman, Jody Soto and Gary Soto, the lawsuit claims Mazda refuses to cover repair costs for the melting dashboards in their vehicles because their cars were no longer under warranty. However, the allege that had they known about the defect prior to purchasing their vehicles, they would not have bought those cars in the first place. The consumers say the automaker failed to properly inform them about the defect.
The plaintiffs claim Mazda knew or should have known when it sold the defective vehicles that the dashboards would deteriorate when exposed to sunlight and “predictably high” summertime temperatures, presenting unsafe condition for drivers.
Like all other automobile manufacturers, Mazda has known “for decades” that dashboard reflections can impair drivers’ visions and make it difficult for them to see pedestrians or objects on the road, according to the suit. The information has been even been readily available through research published by the University of Michigan in 1996, the lawsuit states.
The complaint further claims that Mazda has had “extensive experience” working with the materials used in the dashboards and has personnel who specifically evaluate the durability of new vehicle parts, the company knew or should have known about the defect.
“Mazda thus had exclusive and superior knowledge of the dashboard defect and actively concealed the defect and corresponding danger from consumers who had no way to reasonably discover the problem before buying and driving their vehicles,” the complaint states.
The lawsuit seeks certification of a nationwide class of all people who owned or leased one of the defective vehicles, in addition to a separate Florida class of vehicle owners and lessors.
The suit is Stedman et al v. Mazda Motor Corporation et al, case number 8:14-cv-01608, in the U.S. District Court for the Central District of California.
And here’s a little more light reading…Toyota also got hit with a defective automotive class action lawsuit this week, filed by an Arkansas man, alleging its 2005-2009 Tacoma trucks are prone to experiencing excessive rust corrosion. Specifically, the lawsuit claims that the trucks were made with frames that are inadequately protected from rust corrosion, consequently, the frames corrode from rust, rendering the vehicles unstable and unsafe to drive. Refer to Math 101 at the top of the article.
The vehicles that experience excessive rust corrosion are essentially worthless, according to the complaint (U.S. District Court for the Western District of Arkansas case number: 1:14-cv-02208.) Lead plaintiff, Ryan Burns, alleges Toyota has, for quite some time, been aware of the alleged defect in the Tacoma vehicles’ frames, and despite this knowledge, has failed to disclose the existence of the defect to him and other class members at the time of sale, has not issued a recall to inspect and repair the vehicles and has not offered to reimburse owners for costs incurred to identify and repair the defect.
The lawsuit contends that earlier this year, Burns took his Tacoma in for service because the fan on the vehicle was coming into contact with the fan shroud. “Shortly thereafter, plaintiff was informed that the frame on his Tacoma vehicle was rusted out and that the vehicle was unsafe to drive,” the complaint states.
Burns alleges he was advised that the frame on his 2005 Tacoma had severely rusted and that it would cost approximately $10,000 to repair. “In… March 2008, after receiving numerous complaints that frames on approximately 813,000 model year 1995 to 2000 Tacoma vehicles had exhibited excessive rust corrosion, Toyota USA initiated a customer support program extending warranty coverage on the vehicles’ frames for frame perforation caused by rust corrosion,” the complaint states. “The program extended warranty coverage on concerned vehicles to 15 years with no mileage limitations.”
Allegedly, the terms of the program are that once confirmation of perforation of the frame due to rust corrosion has been determined, Toyota would either repair or repurchase the vehicle. Burns claims Toyota subsequently altered the customer support program to include 2001-2004 Tacoma models, with the exception that there was no buy-back option.
“In November 2012, Toyota USA recalled approximately 150,000 Tacoma vehicles to inspect and replace the spare-tire carrier on vehicles sold in 20 cold weather states,” the complaint states. “The recall was issued to prevent the spare-tire carrier from rusting through and resulting in the spare tire dropping to the ground.”
The lawsuit contends Toyota violated the Arkansas Deceptive Trade Practices Act and breached its express and implied warranty under Magnuson-Moss Warranty Act. “Toyota USA knew, or should have known, that the frames on…Toyota vehicles were not coated with adequate rust corrosion treatment,” the complaint states. Consequently, Toyota has been unjustly enriched at the cost of class members whose vehicles were damaged, according to the lawsuit. You think?
Burns is seeking class certification, compensatory damages, an order requiring Toyota to repair or replace the frames on the Tacoma vehicles and pre- and post-judgment interest.
I’m not a fully paid up member of the Cycling Taliban, but seriously, these recalls are almost enough to get me back in the saddle.
Ah—One Ringy-Dingy…that will be $45 million please. Oh yes—AT&T is busted. They have agreed to a settlement in a Telephone Consumer Protection Act (TCPA) class action alleging the company violated the TCPA by placing calls using an automatic telephone dialing system and/or an artificial or prerecorded voice message to cellular telephone numbers without the prior express consent of the call recipients. Phew..that was a mouthful. Like the automated telephone calls themselves…
The lawsuit is led by plaintiff Joel Hagerman. Hagerman brought the suit in April 2013, (U.S. District Court for the District of Montana case number: 1:13-cv-00050). According to the terms of the settlement, the size of the per-call payment shall be determined on a pro rata basis of up to $500 per call, after the attorneys fees and costs, any incentive award to named plaintiff and any settlement administration costs are deducted from the settlement fund and the settlement administrator reviews all claim forms to determine a final number of claimants.
Specifically, the settlement states: “A class member shall receive payment for each call he or she received from [AT&T] or from an OCA acting on behalf of [AT&T] during the class period by submitting a short claim form.”
No more info than that at the moment—so stay tuned.
In the meantime…Time to adjourn for the week. Have a fab weekend–and HappyThanksgiving to all you Canucks out there. See you at the bar!
In addition to being very creepy—the allegations made in a lawsuit brought by a woman whose identity was used by federal agents to create a bogus Facebook page, really brings home the question—does the end justify the means?
The story goes, according to the lawsuit, that DEA Agent Timothy Sinnigen used information and personal photos stored on Sondra Arquiett’s cell phone, which had been confiscated in a drug bust in 2010. At that time, Sondra Arquiett, then 28, went under her married name of Sondra Price. She was charged, found guilty and given probation for her minor role in a cocaine ring.
Sinnigen used the data on Arquiett’s phone to make a remarkably accurate “Sondra Price” Facebook page, according to her federal lawsuit. In fact, the page had accurate information on where she went to high school, what car she drove and her nickname—“Sosa”. Information taken from her confiscated cell phone and posted as part of the bogus identity also included the fact that she had at least one child, according to Buzzfeed, which originally reported the story. First question on this—what gives the feds the right to do this? Second question—are they putting her and her children at risk?
Arquiett’s lawyer, Donald Kinsella, told The New York Post “Agents of the government should not should not be doing this. The ‘capital-G government’ did this.” He said his client is no longer on probation and has led a crime-free life since that 2010 bust. Arquiett is suing Sinnigen and the US government for punitive and compensatory damages totaling a half-million dollars. I should think so.
According to Arquiett’s lawsuit, she was arrested on July 15, 2010, and the Facebook page was created the next month. It was operated for at least three months by Agent Sinnigen, who accepted “Sondra Price’s” friend requests. “Sinnigen then utilized the Facebook page to initiate contact with dangerous individuals he was investigating with regard to an alleged narcotics distribution ring,” according to the lawsuit
“She suffered fear and great emotional distress because, by posing as her on Facebook, Sinnigen had created the appearance that [Arquiett] was willfully cooperating in his investigation of the narcotics trafficking ring, thereby placing her in danger,” the lawsuit contends. Her lawyer wouldn’t say whether or not Arquiettt had faced any threats or had to deal with dodgy characters as a result of the FB page. And, it isn’t clear whether or not the page actually led to any arrests.
Kinsella declined to say whether his client ever met any shady characters or faced a threat because of it.
According to The Post, the DEA isn’t disputing the facts in the lawsuit, but insists Arquiett lost all rights to her cellphone data when her phone was confiscated. She “implicitly consented by granting access to the information stored in her cellphone’’ and lost all control of how it was used, according to the feds’ legal papers. This sounds like identity hijacking—if you’ve got someone by the short and curlies—what choice do they have about surrendering their rights?
Apparently both sides have agreed on a mediator and hope to resolve the dispute instead of going to trial, Kinsella said.
In a way it would be good if this suit did go to court—it raises so many questions around the use of personal data in the digital age. Bottom line, not only is big brother watching—he’s using.