Rock ‘N Mold? Heads-Up anyone who purchased a Fisher-Price Rock ‘N Play Bassinet or baby seat prior to January 2010:
Fisher Price and Mattel are facing a defective products class action lawsuit over allegations the Rock N Play baby seat has design flaws which results in it growing mold. Nice.
The Fisher-Price Rock ‘N Play Mold Growth Class Action Lawsuit, entitled is Butler v. Mattel Inc., et al., Case No. 2:13-cv-00306, in the U.S. District Court for the Central District of California, alleges Mattel and Fisher-Price were aware of the Rock ‘N Play design flaw since 2010. Specifically, the lawsuit claims that the baby seat design does not allow for adequate ventilation around the seat, making the product conducive to dangerous mold growth. The lawsuit, states that mold “is linked with serious respiratory illnesses and inflammatory problems in infants and recent long-term studies have suggested that infants exposed to environmental mold are nearly three times as likely to develop asthma by age seven.”
The Consumer Product Safety Commission has received in excess of 600 consumer complaints alleging mold growth between the Rock ‘N Play’s removable cushion and plastic frame, prior to the device recall in January 2013. At the time, 16 complaints included reports of infants becoming sick from the mold. Fisher-Price faced at least on lawsuit filed by a couple who alleged their son was hospitalized for respiratory problems after being exposed to mold that they claim developed on his Rock ‘N Play seat.
The Mattel and Fisher-Price marketed the Rock ‘N Play class action lawsuit claims the defendants failed to warn consumers that the sleeper was prone to mold growth. The plaintiffs further claim the defendants failed to test the product for mold growth or humidity resistance prior to releasing it on the market, even though they were aware that the seat would be regularly exposed to moisture and warmth—conditions conducive to mold growth.
According to the lawsuit, “Within seven months of the Rock ‘N Play’s release, concerned consumers began to call Defendants to complain that their Rock ‘N Plays were ‘moldy’ and, in many instances, that their infants were having respiratory problems they attributed to the mold.”
The lawsuit goes on to claim that tests for mold were only conducted on the product after hundreds of consumer complaints had been made detailing babies becoming ill from mold exposure. And, the lawsuit states that Mattel and Fisher-Price did not take timely action to either fix the defect or warn consumers about the risks, even though they were aware of the design defect.
While the defendants issued a recall of the Rock ‘N Play on January 8, 2013, the lawsuit claims that it was inadequate because it “consists solely of a 16 page booklet of cleaning instructions downloadable from the Internet, instructing owners to inspect the product for visible mold and, if mold is seen, undertake an onerous cleaning process that will cause damage to the product.”
The plaintiffs are seeking certification of a nationwide class of people who acquired a Fisher-Price Rock ‘N Play Sleeper that was sold prior to the January 8, 2013 recall. The plaintiffs also seek to certify three subclasses of California, Pennsylvania and Maryland residents who purchased the Rock ‘N Play prior to January 8, 2013.
Phantom of the Paycheck. Well, here’s a new take on an old theme….taxable phantom wages…? Yup. Three ex-Starbucks employees have filed a wage and hour class action lawsuit alleging the coffee company adds a taxable “phantom wage” of 50 cents an hour in tips to paychecks, which results in some employees receiving less than the minimum wage. The lawsuit claims that Starbucks in is violation of the Fair Labor Standards Act (FLSA), which prohibits employers making deductions in employees pay that would result in those employees making less than minimum wage.
Entitled, Fredrickson, et al. v. Starbucks Corp., Case No. 13-cv-02041, U.S. District Court Oregon, Portland Office, the lawsuit, filed by Hannah Fredrickson, lead plaintiff, states that Starbucks discourages employees from reporting their tips. Further, the lawsuit claims, “Starbucks just makes up that phantom number out of thin air.” Therefore, the lawsuit contends that Starbucks “willfully filed fraudulent information,” in violation of federal tax law, by reporting the made-up tips in W-2 returns.
According to the Starbucks class action, “Starbucks deducts amounts from its employees’ pay that reduce their paychecks below the minimum wage and/or overtime requirements. Its stated reason for the deduction is that the employees owe taxes on their tips, but that is false. Neither Oregon nor federal law require Starbucks to withhold taxes from unreported tips. The employees do not owe taxes on the tips, because their income is low enough that the withholdings from their regular wages are more than enough to meet their annual tax burden. Even if this were not the case, however, the employees would not have to pay any taxes on those unreported tips until the following April 15 (tax day). The FLSA requires employers to pay the minimum wage and overtime on payday, so the fact that the employees might receive a refund of these wrongfully deducted amounts (in many cases over a year later) does not eliminate the violation.”
Fredrickson is seeking class certification, an injunction, and damages for wage and hour violations and $5,000 or the sum of actual damages incurred, whichever is greater, for providing false information on tax returns.
Securities Settlement News… FalconStor Software is going to pony up some cash, it looks like. A proposed $5 million settlement has been reached in the securities class action lawsuit its facing, which was filed by purchasers of FalconStor Software, Inc. (Nasdaq:FALC) common stock.
The FalconStor Software settlement would affect all persons who purchased the common stock of Falconstor Software Inc during the class period March 12, 2008 to September 29, 2010, inclusive.
Here’s the skinny: If you purchased FalconStor common stock during the period of March 12, 2008 through September 29, 2010, inclusive, you may be a member of the Class described above, and your rights may be affected by the Settlement of this Litigation.
If you have not received a detailed Notice of Pendency and Proposed Settlement of Class Action and a copy of the Proof of Claim and Release, you may obtain copies of these documents by contacting the Claims Administrator at: www.strategicclaims.net.
If you are a Class Member, in order to share in the distribution of the Net Settlement Fund, you must submit a Proof of Claim and Release postmarked no later than January 20, 2014, establishing that you are entitled to recovery, in the manner and form explained in the Notice. If you are a Class Member and do not submit a proper Proof of Claim Form, you will not be eligible to share in the distribution of the net proceeds of the Settlement, but you will be bound by any judgment or orders entered by the Court in the Litigation, whether or not you submit a claim.
If you desire to be excluded from the Settlement Class, you must submit a request for exclusion received no later than January 20, 2014, in the manner and form explained in the Notice. All members of the Settlement Class who do not request exclusion will be bound by any judgment entered in the Litigation.
For complete information on the proposed settlement and class action lawsuit, and to download forms, visit: www.strategicclaims.net.
Ok Folks, That’s all for this week. See you at the Bar!
Were you out Shopping for Appliances on Black Friday? If so, a federal class action lawsuit has been filed against Electrolux Home Products Inc, over allegations the company marketed and sold defective washing machines.
Filed by plaintiffs Gloria Waters and William Hall, on behalf of themselves and others similarly situated, the lawsuit claims that Electrolux sold front-loading washing machines that are prone to accumulate mold.
The Electrolux lawsuit alleges the manufacturer sold the defective washing machines under brand names including Frigidaire and Kenmore, and that Electrolux knowingly concealed the fact that the washing machines were prone to accumulate mold and mildew which can permeate throughout the consumer’s home and ruin clothes.
The plaintiffs are accusing Electrolux of breaching implied warranties by selling products they allegedly knew were defective, and are seeking an undisclosed amount in damages.
Thinking of Annuities InvestING? If you’re a senior or know a senior—you may be interested to learn that an annuities class action lawsuit has been filed against ING. Filed by Ernest Abbit of California, the lawsuit alleges the financial services firm indexed financial instruments that failed to meet the advertised goals and that company officials failed to properly advise seniors of the risks associated with investing in the annuities.
According to the ING lawsuit, the stated goal of ING indexed annuities, is to provide seniors in various age groups with “protection of principal”, which means reducing the risks of investment while using various investments products aimed at “fueling the value of our annuity” “to build up your retirement savings.” Abbit claims ING failed to back up their claims. Sound familiar?
Abbit alleges in the class action, that he, and others similarly situated, have lost as much as 20 percent of their savings, “on the first day” of investment, due to the lack of information regarding what the product provided. His returns are allegedly a fraction of those an investor would have received by investing in the S&P 500 as a whole, the index his annuity was allegedly designed to mirror. Umm.
Specifically, the lawsuit, The ING Annuity Class Action Lawsuit, entitled Ernest O. Abbit, et al. v. ING USA Annuity and Life Insurance Company, Case No. 13-cv-2310, U.S. District Court, Southern District of California, claims that ING’s the financial instruments are “wolves-in-sheep’s clothing” and that their statements are “opaque.” The lawsuit claims that not only did the instruments fail to return as advertised, but that those investments contained “embedded derivatives” similar to those that led to the financial collapse in 2008. ING indexed annuities were structured, the lawsuit claims, so that the company would benefit from any derivatives income while at the same time putting it senior investors at risk for losses.
According to the class action, in 2005 the Financial Industry Regulatory Authority (FINRA), which is the financial services industry’s self-governing body operating as a private monitor, warned that the products Abbit and others were invested in were accompanied by sales material that “do not fully describe the features and risks of the products.” insurance companies allegedly changing their annuity obligations or not being able to meet those obligations are Aviva, Transamerica, The Principal Financial Group, MetLife, Prudential, Guggenheim and Genworth. Variable annuity holders who purchased their annuities in the past three years from those companies may be eligible to file a claim against those companies.
FedEx to deliver $21.5 million in cash and billing practice changes, ending a consumer fraud class action lawsuit brought against it by business and government agencies.
Granted final approval this week, the FedEx settlement ends the lawsuit brought in 2011 by two law firms, which alleged the world’s largest cargo delivery company overcharged by as much as $3 per package for tens of thousands of packages. Ouch! That could add up.
The plaintiffs, made up of government and business customers, claimed FedEx charged residential rates to destinations including the US Citizenship and Immigration Office in Chicago, a Bank of America Corp. facility in Tampa, Florida, and the Safariland Group body armor company in Jacksonville, Florida.
FedEx has denied the allegations but has agreed to settle. No news there.
The settlement was preliminarily settled in July. FYI—the class period is from August 28, 2008, to July 13, 2011, and involves FedEx customers who used the carrier’s services and didn’t get a full refund for claimed overcharges on residential deliveries.
The case is Manjunath A. Gokare PC v. Federal Express Corp., 11-cv-02131, U.S. District Court, Western District of Tennessee (Memphis).
Ok Folks, That’s all for this week. Happy Shopping till you’re Dropping!
Bad Beneficial! Heads up Beneficial West Virginia Insurance Policy Holders—yup—it’s a bad faith insurance class action lawsuit. This one filed against Beneficial West Virginia Inc, and Household Insurance Co, by two policy holders. Denzil and Cathy Shaw allege they are owed payments under the terms of their credit-disability insurance policy.
The Shaws state in their Beneficial West class action complaint that they submitted a claim to their insurer in October 2009, when Denzil Shaw became permanently disabled. They ha
d purchased the disability policy through Beneficial, and it was issued by Household Insurance. The lawsuit contends that the Shaw’s policy states that if either of the plaintiffs become disabled during the mortgage term, their mortgage would be paid for a period up to 180 months. The lawsuit states that the Shaw’s mor
tgage payments were paid through the policy until they received a letter stating the payments would stop in December 2012, which is in violation of the policy-stipulated 180 months.
The lawsuit claims that the defendants are in breach of contract, consumer credit and protection act, unfair claims settlement practices act, failure to disclose and first-party insurance bad faith.
The Settlement Fund will be divided equally among all Class Members (after fees and costs are deducted), who timely submit a valid Claim Form and do not exclude themselves from the settlement. It is estimated that approximately $1,132,053 will be available to be divided among Class Members who timely submit a valid Claim Form. Based on claims rates in other cases, the range of expected recovery per Class Member who submits a valid Claim Form is estimated at between $25 and $200. This is only an estimate. The actual amount paid out will depend on the number of Class Members who submit valid Claim Forms. Printing Error? SouthWest has agreed to pay $1.8 million in settlement of a class action lawsuit concerning allegations it “willfully” violated the Fair and Accurate Credit Reporting Act (FACTA) by printing the expiration date on customers’ credit or debit card receipts at airport ticket counters between October 17, 2007 and October 30, 2012 or at cargo counters between October 17, 2007 and January 25, 2013. Got all that? Did you even know SouthWest was doing this?
If you made a non-business related credit or debit card purchase or transaction at a Southwest Airlines Co. airport ticket counter between October 17, 2007 and October 30, 2012 or a cargo counter between October 17, 2007 and January 25, 2013 and received a printed receipt, you may be entitled to benefits as part of a class action settlement.
Wait—there’s more—a settlement has been proposed in two related class action lawsuits alleging that Southwest Airlines Co. willfully printed credit card and debit card expiration dates on certain customer receipts. The settlement will provide benefits to any Class member who used a credit or debit card to make an individual, non-business related purchase or transaction at a Southwest airport ticket counter between October 17, 2007 and October 30, 2012 or a cargo counter between October 17, 2007 and January 25, 2013 and received a printed receipt.
To get the whole picture and for information on downloading and submitting claim forms, visit: www.SouthwestFACTASettlement.com, or write to Southwest Airlines Co. Settlement Administrator, P.O. Box 3059, Faribault, MN 55021-2659.
Google to pay for Oogles —sorry that’s Ogles… to the tune of $17 million. A settlement has reportedly been reached in an Internet privacy class action lawsuit pending against Google Inc. The lawsuit concerns allegations that Google and another three online companies circumvented default privacy settings on Apple’s Safari web browser, for the purposes of placing tracking cookies without consumers’ knowledge. Oh that my Internet practices were that interesting!
Nevertheless, “Consumers should be able to know whether there are other eyes surfing the web with them,” New York Attorney General Eric Schneiderman said. Well, preferably, no other eyes.
As part of the Google settlement, Google has not admitted to any wrongdoing and stressed that they had “taken steps to remove the ad cookies, which collected no personal information from Apple’s browsers.” Other terms of the settlement reportedly stipulate that Google honor default privacy settings on web browsers. Google will also “provide a separate stand-alone page or pages on the Google.com domain designed to give information to users about Cookies (the “Cookie Page).”
“Google shall maintain systems configured to instruct Safari brand web browsers to expire any Cookie placed from the doubleclick.net domain by Google through February 15, 2012 if those systems encounter such a Cookie, with the exception of the DoubleClick opt-out Cookie. Such systems shall remain in place until Feb. 15, 2014, at which time all Cookies placed from the doubleclick.net domain by Google on Safari brand web Browsers through Feb. 15, 2012 should have expired by design,” the settlement states.
The $17 million settlement fund is set to be split among each of the Attorneys General who filed against Google, in amount yet to be designated. The states are listed as beneficiaries of the settlement are: Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington and Wisconsin, and District of Columbia. Umm.
Ok Folks, That’s all for this week. Happy Thanksgiving!
An Explosive Situation… Heads up to Kia Soul owners and anyone leasing the 2010-2013 models. Kia Motors is facing a defective automotive class action lawsuit alleging that some of its vehicles have fuel tank placements that place vehicle occupants at risk for fire in the event of collision. The specific models cited in the consumer fraud class action lawsuit are the 2010-2013 Kia Soul.
The Kia Soul class action lawsuit contends that there was a scenario in Texas, in which a Kia Soul exploded in a collision, and as a result of the defective gas tank design all three passengers in the rear compartment of the car burned to death.
Filed in California federal court, the lawsuit, entitled Constance Sims, et al. v. Kia Motors America Inc. et al., Case No. 13-01791, in the United States District Court for the Central District of California, alleges that Kia Motors America Inc, falsely misrepresented some of its vehicles as being constructed with “world-class quality.”
The design of certain Kia vehicles has the gas tank located directly under the rear seat. Further, the lawsuit alleges there are no means of protecting or reinforcing the fuel tank with reinforcing straps or a whole-tank shield, which is a practice commonly used by other automakers.
Therefore, the lawsuit contends, Kia passengers are unknowingly put at risk in certain types of collisions. Plaintiffs allege that placing the fuel tanks under the rear seat “increases the risk that the gas tank will dislodge and ignite in a major collision.”
The Kia defective automotive lawsuit also alleges the fuel pump cover is placed directly under the rear seat cushion, in order to allow mechanics easier access in the event of problem: mechanics would not necessarily have to remove the entire gas tank. However, should the gas tank become dislodged, the covering is plastic, “increasing the likelihood of a ‘blow torch’ [sic] fire in the rear compartment,” the lawsuit states.
The plaintiffs are seeking to represent anyone who purchased, leased and/or currently own or lease a Kia vehicle model that has a gas tank that is not properly secured or is covered by a plastic fuel pump service cover. They are also seeking damages for violations of the state Consumer Legal Remedies Act, Unfair Competition Law, false advertising, breach of implied warranty and fraudulent concealment.
Having a Bad Hair Day? Wait till you read this… L’Oréal is facing a defective product class action lawsuit over claims that it failed to warn customers that Garnier Fructis Sleek and Shine Anti-Frizz Serum has, as its main ingredients, cyclopentasiloxane and dimethiconol, which are flammable. According to the class action, the anti-frizz serum can catch fire at temperatures above 171 degrees and can cause substantial risk of burns to face, head and neck. One teenager has suffered significant burns to her face and scalp.
The Garnier Fructis lawsuit has received certification by strict Court Judge Christina A. Snyder of the Central District of California. The class action alleges that L’Oréal USA Inc, and L’Oréal USA Products Inc., failed to label the frizz-reducing product as combustible or flammable near flame, ignition or high-heat-producing styling appliances, and misrepresented the product as safe to use with such implements, according to court documents.
Filed by plaintiffs Jill Guido and Catherine Altamura of California; Natalie Lefebvre of Texas; and Lisa Pearly of New York, the lawsuit seeks to represent any person who purchased the Serum during the period from February 4, 2008, to the present. According to court documents, during the class period, L’Oréal sold some 9.9 million units of Garnier Fructis Sleek and Shine Anti-Frizz Serum in the US. So—heads up ladies… and gents.
All that Glitters is not Gold…and now there’s a settlement as a result. That’s right folks. A settlement has been reached in the consumer fraud class action lawsuit alleging that Miley Cyrus-branded jewelry manufactured by BCBG Max Azria Group Inc., and sold through Wal-Mart stores, contained cadmium.
The lawsuit, entitled Canamore v. Wal-Mart Stores, Inc., Case No. CV-2010-534, claims that had the plaintiffs known the Miley Cyrus jewelry contained cadmium, they would not have purchased it.
The Miley Cyrus jewelry lawsuit was filed on July 2, 2010. Defendants have denied and continue to deny any and all allegations of wrongdoing and liability. The Court has not decided which side is right.
FYI—you are a Settlement Class Member if you purchased Miley Cyrus-branded jewelry from a Wal-Mart retail store after July 1, 2005. A Final Approval Hearing will be held on December 30, 2013. There’s a little light reading with this one, so to find out your options, download forms, etc., visit: http://www.canamoresettlement.com.
Were you Scooped by Starbucks? If so, you may be entitled to some dosh. A proposed settlement has been reached in a consumer fraud class action lawsuit pending against Starbucks. The global coffee company has agreed to reimburse consumers who purchased less than one pound of scooped (not pre-packaged) Starbucks coffee beans between December 9, 2007 and November 7, 2011. The beans may have been purchased from any company-owned Starbucks store in the United States, other than half-pound purchases during January to March 2008 of coffee that had half-pound prices posted on menu boards during that time.
Among the allegations in the Starbucks consumer fraud class action, is that Starbucks (“Starbucks” or “Starbucks Coffee Company” or “Defendant”) failed to disclose to certain Starbucks customers who bought Starbucks scooped coffee beans in amounts less than 1 pound that the price was greater per pound than the amount charged for purchases of 1 pound of Starbucks coffee beans, according to the Starbucks settlement website.
According to the terms of the proposed settlement, Starbucks would provide a common settlement fund of $1,733,025.71, inclusive of settled claims, administrative expenses, attorneys’ fees, and costs. Starbucks would credit the My Starbucks Rewards accounts of Class Members who are My Starbucks Rewards Members in an amount calculated by multiplying $0.45 (an estimate of the weighted average Upcharge of all transactions by Class Members in the Class Period) by the number of Covered Purchases on each My Starbucks Rewards Member’s account identified in Starbucks’ business records or $5.00, whichever is more.
For consumers who are Starbucks Class Members but who are not My Starbucks Rewards Members, claims forms can be accessed online at: https://scoopedcoffeesettlement.simpluris.com/pages/ClaimForm.aspx or by downloading a claim form from the settlement website at www.starbucks.com/scoopedcoffeesettlement that can be printed out and mailed to Simpluris, Inc. P.O. Box 26170, Santa Ana, CA 92799.
Again, if you think you’re affected by this settlement there’s a little light reading involved, which you can access at www.starbucks.com/scoopedcoffeesettlement.
Ok Folks, That’s all for this week. And have a good weekend.
Fat-Busting Shapewear…Busted? All I can say is DAMN! A federal consumer fraud class action lawsuit has been filed against Wacoal America Inc. and Maidenform Brands, Inc. over allegedly deceptive marketing claims the Defendants made regarding the purported slimming benefits of the Novarel Slim Fabric used in “Novarel Slim iPant” and “Flexees” brand shapewear. Hope on a hanger it’s allegedly not! Damn, damn, damn!
The Novarel and Flexees class action lawsuit, which was filed in US District Court for the Eastern District of New York on November 5, 2013, seeks class action status for all persons who paid, in whole or in part, for shapewear constructed with Novarel Slim fabric and manufactured, marketed or sold by Wacoal or Maidenform for personal, family or household uses. (Case No. 2:13-cv-06122).
According to the class action lawsuit, the Defendants claim that Novarel Slim Fabric, manufactured by Nurel SA, contains ingredients that can be absorbed by the body and permanently change the wearer’s skin tone and body shape. These ingredients include embedded microcapsules containing caffeine to promote fat destruction, vitamin E to prevent the effects of aging, ceramides to restore and maintain the skin’s smoothness, and retinol and aloe vera to moisturize and increase the firmness of the skin. Specifically, Wacoal American and Maidenform promise that use of Novarel Slim iPant and Flexees products will result in fat destruction and reduce the appearance of cellulite (see video below…). According to the complaint, the companies charge up to 50 percent more for shapewear products that contain the Noveral fabric compared to the cost of comparable shapewear that does not purport to contain these ingredients.
The Novarel and Flexees class action lawsuit alleges that the claims used by Wacoal and Maidenform to market Novarel Slim iPant and Flexees shapewear are deceptive and misleading. Among other things, Plaintiffs point to research from the Mayo Clinic, which found that cellulite cannot be “cured” with topical applications.
Bottom line—(pardon the pun)—I still have to diet… Damn!!
The lawsuit claims violations of the New Jersey Consumer Fraud Act, breach of express warranties and unjust enrichment. It seeks, among other things, restitution for the amount of money Class Members spent to purchase Novarel Slim iPant and Flexees garments.
What’s in your Air Conditioner? If it’s a Lennox Air Conditioning unit—you may not be surprised to learn there’s something defective in it. The company is facing a defective products class action lawsuit alleging its air conditioning units are susceptible to formicary corrosion as a result of the deficient materials used in the manufacture of its coils. The Lennox air conditioner lawsuit further alleges that Lennox has not informed its customers of the defect, even when it is called to replace failed coils in existing units. This conduct, the lawsuit claims, means that customers are unable to make informed decisions regarding the purchase of a Lennox Air Conditioner.
Formicary corrosion—in case you were wondering—is a particularly insidious defect in an evaporator coil because the resultant leakage is difficult to detect, and usually results in consumers being forced to repeatedly refill their air conditioners with Freon, often at significant cost, which only works to mask the defect for a period of time, until the leak is detected and the coil needs to be replaced.
Lennox Coils are allegedly defective because they are manufactured with materials that, within the industry, are well known to be prone to formicary corrosion, which makes the Lennox Coils unreasonably susceptible to premature rupture and refrigerant leaks under normal use and conditions.
The federal class action, filed by Plaintiff Robert Thomas, of Illinois, is brought on behalf of the following nationwide consumer classes (the “Classes”):
All persons residing in the United States who purchased a Lennox AC containing a Lennox Coil, primarily for personal, family, or household purposes.
All persons residing in the United States who purchased a Lennox AC containing a Lennox Coil, primarily for personal, family, or household purposes, and who paid to replace a Lennox AC evaporator coil. The lawsuit also seeks to represent a subclass defined as all members of the Classes who reside in Illinois.
It’s a Blockbuster Drug! (of sorts…) Fitting though, considering the players. Global health care giant Johnson & Johnson (J&J) and its subsidiaries will pay more than $2.2 billion in a Qui Tam (whistleblower) investigation. The settlement will resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation’s largest long-term care pharmacy provider. Got all that?
Officially—the Risperdal settlement whose “…global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.” (source: US Dept of Justice).
The resolution includes criminal fines and forfeiture for violations of the law and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.
Here’s the skinny from the DOJ:
J&J Subsidiary Janssen Pleads Guilty to Misbranding Antipsychotic Drug.
In a criminal information filed today in the Eastern District of Pennsylvania, the government charged that, from March 3, 2002, through December 31, 2003, Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal into interstate commerce for an unapproved use, rendering the product misbranded. For most of this time period, Risperdal was approved only to treat schizophrenia. The information alleges that Janssen’s sales representatives promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion.
The information alleges that the company created written sales aids for use by Janssen’s ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia. The company also provided incentives for off-label promotion and intended use by basing sales representatives’ bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.
In a plea agreement resolving these charges, Janssen admitted that it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients. Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen’s guilty plea will not be final until accepted by the U.S. District Court.
So, enquiring minds want to know how many people were prescribed this drug when they didn’t actually need it…
Ok Folks, That’s all for this week. In advance of Monday—Here’s to our Veterans – THANK YOU. And have a good weekend!