Mind the Gap—the Credibility Gap that is. This week, two separate consumer fraud class action lawsuits were filed against The Gap Inc., Banana Republic LLC and Saks Fifth Avenue LLC in a California court alleging they deceived customers as to the quality and supposed savings of outlet store items.
According to the lawsuit against The Gap and Banana Republic, which The Gap owns, the company hides a “Factory Store” label with three squares on it, on clothing it sells at its outlets. The lawsuit claims that the label indicates the clothes were made specifically for the outlet and are of inferior quality to those sold in the traditional Gap and Banana Republic retail outlets.
In the Saks Fifth Avenue lawsuit, plaintiffs allege the retailer uses a manufactured “Market Price” inducing the consumer to believe that they would pay a higher price for the price at a traditional Saks Fifth Avenue store, in addition to putting the lower outlet price on the items, creating the impression that consumers are getting a discount.
However, the lawsuit contends that items sold at Saks Off 5th clearance stores were made specifically for the outlet. Named plaintiff Tova Malik says it was this perceived price savings that led her to purchase items from a Saks Off Fifth store at an outlet mall in Camarillo, California.
“Defendant labels its Saks Off 5th clothing with a tag that shows a markedly lower price from the “Market Price,” which corresponds to the price that appears to be used in traditional Saks Fifth Avenue retail stores,” the lawsuit states. “Plaintiff was lured in by this large price difference and as a result purchased items of clothing and accessories from defendant’s Saks Off 5th in July of 2014.”
The plaintiffs for the Gap and Saks Fifth Avenue lawsuits are represented by Michael Louis Kelly, Behram V. Parekh and Heather M. Baker of Kirtland & Packard LLP.
The cases are Malik v. Saks Fifth Avenue LLC, case number BC555134; and Rubenstein v. The Gap Inc., case number BC555010, in the Superior Court of the State of California, County of Los Angeles.
A Prescription for Walgreens: Pay the overtime. Yup. This week the national pharmacy chain got hit with an unpaid overtime class action lawsuit filed in California federal court by pharmacists alleging the company violated California labor law and the Fair Labor Standards Act (FLSA) by failing to pay them minimum wage and overtime for training hours and time spent maintaining their uniforms.
According to the Walgreens lawsuit, lead plaintiff Debra Short was a nonexempt pharmacist with the company from September 1997 to April 2012. During that period, Walgreens denied its pharmacists overtime hours for training and failing to pay them all of their owed wages upon termination.
“As a result of defendants’ unlawful conduct, plaintiff and the other class members have suffered damages in an amount, subject to proof, to the extent they were not paid the full amount of wages earned during each pay period during the applicable limitations period, including overtime wages,” the complaint states.
Under the California Labor Code, if an employer does not maintain its own employee uniforms, then it is obligated to pay employees who must wear uniforms for one hour per week of uniform maintenance. According to the lawsuit, Walgreens failed to pay its pharmacists minimum wage for uniform maintenance time each week.
Further, the lawsuit claims that Walgreens failed to pay its pharmacists for class training time, which required at-home work and other training, all of which was necessary so the pharmacists would become certified in immunization and CPR administration.
Short also alleges that Walgreen’s pharmacists are required to work more than seven days in a row without rest days and that the company fails to compensate them for all of their wages earned upon termination of their employment, in violation of California Labor Code.
Heads up folks—the lawsuit is seeking certification of five subclasses, including one in California comprising pharmacists who were employed over the past four years and one comprising pharmacists across the country over the past three years. Short is seeking payment of all unpaid wages and damages.
The case is Short v. Walgreen Co. , case number 3:14-cv-03747, in the U.S. District Court for the Northern District of California.
So LinkedIn may be about to settle a data breach class action lawsuit for $1.25 million.
Plaintiffs in a federal class action lawsuit are seeking approval of the settlement, potentially ending the action which stems from a 2012 data breach of LinkedIn Corp. The lawsuit claims the social media site misled customers about its data protection policies in connection with the data breach.
In the lawsuit, lead plaintiff Khalilah Gilmore-Wright claimed she and other class members purchased premium LinkedIn accounts believing that the company provided industry-standard security. However, LinkedIn’s security was in fac outdated and insufficient, resulting in a massive data breach in June 2012 in which a hacker posted 6.5 million user passwords onto the Internet.
According to the terms of the proposed LinkedIn settlement, if approved, LinkedIn would set up a $1.25 million fund from which class members could receive as much as $50. The class would include everyone who paid a fee to LinkedIn for a premium subscription between March 2006 and June 2012. Gilmore-Wright would receive $7,500. There are approximately 800,000 premium subscribers.
The case is In re: LinkedIn User Privacy Litigation, case number 5:12-cv-03088, in the U.S. District Court for the Northern District of California.
Ok Folks—time to adjourn for the week. Have a fab weekend–see you at the bar!
Hey Bud–this one’s for you! The maker of Budweiser—Anheuser-Busch—is facing an unpaid overtime class action lawsuit filed in California federal court alleging the company failed to pay its drivers overtime. The lawsuit was filed by Charles Hill and Joe Correa, each of whom drove delivery trucks for Anheuser-Busch in California, allege “Anheuser-Busch’s violations … were willful and intentional.” They are also claiming that the beverage giant implemented pay structure that discouraged workers from taking required meal breaks and rest periods, in violation of the Fair Labor Standards Act (FLSA) and California labor law. Nice! But we know this song…you work the hours, you don’t get paid, you can’t take your meal and rest breaks…. Why do so many big corporations have such a hard time paying their people? What is that about? Try it and see if you can get away with it? Then so much the better?
Well, not in this case…According to the Anheuser-Busch lawsuit, Hill has worked for Anheuser-Busch from about June 1999 through to the present, and Correa from 1985. During this time, a typical day work day for them involved picking up alcoholic beverages from a storage facility and delivering them to retail locations throughout the state of California. Drivers are allegedly paid a flat rate per day plus about 10 cents per case for every case delivered. Hill and Correa claim that the drivers can often work between eight to ten hours per day, which results in more than 40 hours per week, yet they are not compensated for the overtime.
Further, the lawsuit claims that despite there being a written policy in place regarding employees being able to take meal and rest breaks, Anheuser-Busch refused to allow the drivers to take them. The company further established a payment structure discouraging its drivers from taking meal and rest breaks because it would be impossible to be paid for the time.
The plaintiffs also allege the company does not pay its drivers for all hours worked including regular hours, because the company locates its clock out location in a remote area “to encourage drivers to clock out prior to finishing all their work.”
“The drivers routinely would clock out first and then proceed to the warehouse to finish their work duties [saving] them a trip back to the clock-out location,” the lawsuit states. “Anheuser-Busch knew about this practice but continued to allow the drivers to perform the work.”
The nitty gritty—the class action lawsuit seeks to represent all Anheuser-Busch truck drivers who drove routes exclusively in California during a four-year period prior to the filing of the instant case.
Additionally, the plaintiffs seek to represent a second “rest break” class comprised of all Anheuser-Busch’s California drivers who were paid a flat daily rate plus a piece rate for each case delivered over the course of the same four year period.
The FLSA claims are being brought as a collective action for Anheuser-Busch drivers during a three-year period preceding the complaint. The case is Charles Hill et al v. Anheuser-Busch InBev Worldwide Inc., case number 2:14-cv-06289, in the U.S. District Court for the Central District of California.
Failure to WARN? Some 400 employees—sorry—ex-employees at Space Exploration Technologies Corporation (SpaceX) allege they were just laid off in violation of the Worker Adjustment and Retraining Notification Law (WARN ACT) act, according to a wrongful termination lawsuit just filed. The plaintiffs are alleging the company has also violated California labor law when it laid off those factory workers—which incidentally total about 11% of the company workforce—without proper notice.
FYI—The WARN ACT requires that every industrial or commercial establishment in California that employed 75 or more people in the last 12 months “may not order a mass layoff [defined as 50 or more employees in a 30 day period], relocation, or termination at a covered establishment unless, 60 days before the order takes effect” the employer gives written notice of the order to the employees, California “Employment Development Department, the local workforce investment board, and the chief elected official of each city and county government within which the termination, relocation, or mass layoff occurs.”
Filed by employees at company headquarters in Hawthorne, CA, the lawsuit is seeking class action status and damages for back pay, wages, injunctive relief, restitution, and civil penalties for illegal mass layoffs of 200 to 400 factory workers on or about July 21st.
Go get ‘em!
FedEx Ground will be delivering $2.1 million in funds as settlement of a California labor law class action lawsuit brought. Filed by a group of current and former package handlers, the lawsuit alleged the company failed to provide proper meal and rest breaks.
Lead plaintiff Aaron Rangel alleged in the class action filed in September 2013, that FedEx Ground Package System Inc., was in violation of the California Labor Code and the state’s Unfair Competition Law.
As part of the settlement motion, about $7,500 will be set aside as an award for Rangel. Additionally, FedEx will be required to clarify its meal and rest period policies, which the agreement says could itself be worth $100,000.
Rangel, a former FedEx employee, said FedEx was required, but failed to provide, class members who worked two shifts in a workday a meal period, as well as a second rest period. He also said FedEx failed to provide pay employees for time spent in security checks.
If approved, the settlement will provisionally certify a class of current and former nonexempt FedEx package handlers in California who worked for the shipping company at any time from Sept. 24, 2009, through either Sept. 1, 2014, or the date of preliminary settlement approval, whichever is earlier.
The settlement agreement weighs a worker’s share based on whether he or she was a part-time or full-time employee, with more money going toward those who were full-time or who worked more than one four-hour shift in a workday. It also gives more money to former employees who were entitled to waiting time compensation.
If there is any unclaimed money, it will not revert back to FedEx, but instead be allocated toward those who did claim a share of the settlement fund, according to the terms of the agreement.
The case is Aaron Rangel v. FedEx Ground Package System Inc et al, case number 8:13-cv-01718, in the U.S. District Court for the Central District of California.
Ok – Folks –time to adjourn for the week. Have a fab weekend –see you at the bar!
Gap giving a whole new meaning to Loss Leaders …so much so they got slapped with a consumer fraud class action this week. The issue is Gap’s alleged misleading advertising over sale items…you know—it’s for sale—but the one next to it isn’t—that kind of thing… Essentially, the Gap class action lawsuit claims the clothing retailer uses advertisements for sale items that do not clearly indicate sale exclusions both in its stores and online.
The Gap lawsuit, entitled Misbah Etman, et al. v. The Gap Inc., et al., Case No. BC547161, in the Superior Court of the State of California, County of Los Angeles, alleges that lead plaintiff, Misbah Etman, was misled regarding which items were included in a sale display, which resulted in her paying full price for an item when she purchased it.
The backstory, in legal speak: “Because of the advertisement, Plaintiff believed that all the clothing on the rack bearing the advertisement was on sale at the price displayed on the advertisement and/or subject to the discount stated on the advertisement,” the lawsuit states. “Plaintiff looked through the clothing, selected three items she liked, waited in line for an open register, [Etman] found out at the register that Defendant would not sell her one of the items at the price displayed on the advertisement or would not discount one of the items in accordance with the advertisement.” Consequently, “[a]lthough she had been misled, Plaintiff purchased the non-discounted item and paid the higher price Defendant demanded.”
An example of an alleged advertisement Gap emailed “with a hyperlink to Defendant’s website stating clearly in dark letters against a white background ‘Hours to Shop!; Happy Monday; 40% Off Your Purchase; Ends Tonight.’” However, continues the complaint, “the email also states in barely noticeable lettering against a colored background ‘EXCLUSIONS APPLY.”
Further, “[o]nce a consumer clicks the hyperlink…the consumer is taken to Defendant’s website to shop [and], [w]hile shopping, Defendant’s website does not identify for consumers the items that are included in the sale, nor does it identify that items that are excluded from the sale,” alleges the Gap class action lawsuit.” And, “Defendant’s website does not even disclose whether an item is included in or excluded from the sale when a consumer selects an item to place in the consumer’s ‘shopping cart,’” the lawsuit states.
The consumer fraud lawsuit further claims that Gap also misleads consumers through its online stores by “enticing consumers to shop for, and to purchase, products from Defendant through Defendant’s website by means of false and misleading advertisements Defendant emails to consumers.”
The lawsuit seeks certification for a proposed Class of all other consumers who purchased products at Gap stores in California, or purchased products on the Gap website while in California, on days when Gap displayed the advertising described in the class action lawsuit.
So—heads up all you California Gap shoppers…
Not caring a Hoot for Hooters Text Messages.…What are you supposed to do when tits and ass just ain’t enough to get bums in seats in anymore (bad pun, I know). Send text messages to advertise your booty. Umm, maybe not. Hooters is facing class action lawsuit alleging the restaurant chain violated the Telephone Consumer Protection Act (TCPA)—just the TCPA? Filed by lead plaintiff Peyman Zandifaez, the lawsuit alleges that on June 14, Zandifaez received an unsolicited text message on his cell phone from Hooters and a second unsolicited text message on July 5.
“The… SPAM text messages were form texts that were sent consumers on mass and just solely to the plaintiff, which is indicative of the use of an automatic telephone dialing system,” the complaint states. “[The] defendant used telephone number 368-32 to send this unsolicited SPAM text message to plaintiff’s cellular telephone.”
The Hooters lawsuit alleges that at no time did the plaintiff provide Hooters with his cellular phone number, through any medium, nor did he consent to receive such an unsolicited text message. Further, the plaintiff alleges that at no time did he sign up for nor use the defendant’s services or products, nor has he ever had any form of business relationship with Hooters.
“Through the unsolicited SPAM text message, defendant contacted plaintiff on plaintiff’s cellular telephone regarding an unsolicited service via an ‘automatic telephone dialing system,’” the lawsuit states. The ATDS has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator, according to the suit.
According to the lawsuit, Zandifaez is charged for incoming calls and text messages and the text message constituted a call that was not for emergency purposes. “Plaintiff did not provide defendant or its agent prior express consent to receive text messages, including unsolicited text messages, to her cellular telephone,” the complaint states. Nice…Go get’em!!
And as one TCPA lawsuit is filed, so another is settled… This week, in Los Angeles, a settlement agreement was reached in a class action lawsuit against Metlife which alleges a former agent faxed millions of advertisements for life insurance to consumers and businesses in violation of the federal Telephone Consumer protection Act (TCPA).
According to the terms of the MetLife settlement, the company, one of the largest life insurance companies in the US, will pay $23 million to resolve two related lawsuits, one in state court in Illinois and the other in federal court in Florida.
Incredibly, an estimated 1 to 2.8 million recipients of the faxes across the country will be covered by the settlement. The settlement will cover faxes sent between 2008 to 2014, even though the lawsuits focus on faxes sent by the agent between 2010 and 2012.
According to the lawsuits, the former MetLife agent Scott Storkick paid a fax-blasting specialty firm run out of offices in Fort Lauderdale, to help generate leads so that he could maintain his standing as one of the company’s top-performing agents. Ultimately, Storick said that the fax blasting campaign generated between 30 and 50 of the approximately 200 MetLife life-insurance policies he sold annually between 2010 and 2012.
Ok – Folks –time to adjourn for the week. Have a fab weekend –see you at the bar!
Michael Kors Creative Merchandising? Michael Kors LLC may be getting more than it bargained for—the retailer got hit with a consumer fraud class action lawsuit alleging the discount prices it offers at its outlet stores and which are marketed as providing deep discounts over the suggested retail prices, are based on fabricated original prices. Surprised?
Specifically, the Michael Kors outlet store lawsuit claims that Michael Kors represents on the price tags of its Kors Outlet Products artificial “suggested retail prices” that do not represent a bona fide price at which the designer formerly sold the products. The tags also offer a price termed “our price,” which represents a steep discount off the false original price.
“But the [prices] used by Michael Kors…were a sham. In fact, Michael Kors manufactures certain goods for exclusive sale at its Kors Outlets, which means that such items were never sold, or even intended to be sold at the…price listed on their labels,” the complaint states.
Filed by lead plaintiff Tressa Gattinella, the lawsuit claims that Gattinella purchased a pair of jeans at a Kors Outlet in California earlier in the month for $79.00, believing she was paying significantly less than the original price of $120 listed on the tag, the suit states. That would be a reasonable assumption. But … of course there’s a but…
But… the Kors lawsuit contends that despite the Gattinella’s belief that she purchased the goods at a 33 percent discount, Michael Kors never intended to sell the jeans at the artificial $120 price listed on the tag, the suit says. By listing the false price comparison, Michael Kors deceived the plaintiff into making a full retail purchase with no discount, the complaint alleges.
“Plaintiff would not have made such purchase, or would not have paid the amount she did, but for Michael Kors’ false represented of the former price … of the items she purchased, as compared with the supposedly discounted ‘our price’ at which Michael Kors offered the items for sale,” the lawsuit states.
The lawsuit is seeking certification for a class of all California residents who purchased apparel from a Kors Outlet store and urges the court to issue an injunction ordering the company to comply with California’s comparative price advertising laws and prohibiting Michael Kors from using deceptive practices moving forward.
The lawsuit is Gattinella v. Michael Kors (USA), Inc. et al., case number 1:14-cv-05731, in the U.S. District Court for the Southern District of New York.
Canada following suit….a class action testosterone lawsuit has been filed by plaintiffs in Canada who allege that they were never warned about the increased risk of cardiovascular events with the low testosterone injection Delatestryl. The case was filed on July 22, 2014 in the Ontario Superior Court of Justice.
FYI—a multidistrict litigation involving over 150 testosterone lawsuits is also pending in the U.S. District Court for the Northern District of Illinois. The case is In Re: Testosterone Replacement Therapy Product Liability Litigation (MDL No. 2545).
Testosterone products, used to treat so-called “Low T,” have been linked to serious cardiovascular problems such as pulmonary embolism, deep vein thrombosis (DVT), stroke, heart attack, and death. The U.S. Food and Drug Administration(FDA) began investigating the cardiovascular risks associated with testosterone products in late January; the agency reminded consumers that testosterone products are only approved for men who do not produce enough of the hormone due to specific medical conditions. Testosterone replacement therapy is not approved for Low T or other non-medical conditions.
Testosterone safety reviews were also launched by the European Medicines Agency (EMA) and Health Canada. Recently, the FDA warned the public that there is a growing body of evidence suggesting that testosterone therapy may increase the risk of cardiovascular events in men.
The reviews were prompted by two research studies linking testosterone products to a higher risk of blood clot, stroke and heart attack. One study, published in last November in the Journal of the American Medical Association, found that older men were more likely to suffer cardiac death if they took testosterone. Older men and younger men with pre-existing heart problems were more likely to suffer a heart attack, according to another study published January in the journal, PloS.
Unsolicited Phone Calls Elicit Settlement…Well, it’s not the largest settlement in class action history—but it’s a victory none-the-less. After all, one less unsolicited phone call has got to be a good thing!!! This week, a settlement has been reached in a Telephone Consumer protection Actclass action lawsuit that alleges the polling and public opinion research company Mountain West Research Center LC violated the Act by contacting consumers by phone without their permission.
The preliminary $1.5 million settlement will resolve the class action which was filed by Plaintiff Paul Mankin in September 2013 alleging Mountain West called people’s cellphones without prior express consent, using an automatic telephone dialing system and using an artificial or prerecorded voice.
Under the terms of the proposed settlement, Mountain West will create a $1.5 million fund to for a settlement administrator, a website, preparing an opt-out list, preparing a list of persons submitting objections to the settlement, and disbursing payments to all class members who do not opt-out.
Settlement members who do not opt out will receive a direct payment via check in the amount of approximately $65, according to court documents.
FYI—the case is Paul Mankin v. Mountain West Research Center LC, number 2:13-cv-06447 in the U.S. District Court for the Central District of California.
No info on a fairness hearing date yet—so stay tuned…
Ok – Folks –time to adjourn for the week. Have a fab weekend –see you at the bar!
So, who’s lost count of how many defective auto recalls we’re up to now? Here’s a couple more…this time it’s Kia and Lexus…
Surprise! Kia Motors America Inc. got hit with a defective products class action lawsuit this week, filed in California federal court over allegations the car maker failed to disclose a defective brake switch in certain models. The defect can cause the brake light to fail to illuminate and cruise control to remain on, increasing the risk for accidents. Ok—that could be dangerous.
The Kia lawsuit, filed by lead plaintiff William Precht, claims that Kia was aware of the brake switch defect for years, and went as far as to initiate recalls for a number of different models in 2009. The company also initiated recalls in May 2013 which did not include its 2011 Sportage, 2008-2010 Optima and 2008-2011 Sedona vehicles, despite the fact that those models were also affected. Kia allegedly expanded the recall to include the vehicles in November 2013 but did not notify consumers, the complaint states.
According to the lawsuit, “Defendant does not dispute the safety risk caused by the brake switch defect, yet it has not effectuated any purported recall of the class vehicles and has left class members with an acknowledged safety risk and unreimbursed repair bills.”
The backstory—Precht alleges he purchased a new Sportage vehicle in 2011, but began having difficulty engaging the car’s automatic transmission during the winter of 2013. Precht alleges he was repeatedly unable to put the car in gear even after depressing the brake pedal, causing the anti-lock brake and front-wheel drive slippage icons to illuminate on the dash. He claims he was forced to manually access an override in order to place the vehicle into drive again.
According to the complaint, Precht took the car to an authorized Kia repair facility for assistance, only to be told that such repairs were not covered under the warranty, causing him to pay $140 to have the defect repaired.
The lawsuit alleges Kia knowingly hid from consumers that the vehicles’ brake switch contained a defect that leads to brake light failure, cruise control not cancelling with depression of the brake pedal, the push button start not functioning and the shift interlock remaining stuck in park so the vehicle cannot be moved.
The complaint states that once the defect occurs in the cars, it poses a safety risk to both driver and passengers, with the brake light failure increasing the risk of rear-end collision, and the failure of cruise control failure increasing the risk for a front-end collision. Further, if the push button start doesn’t function, the car cannot be shifted into drive or reverse from park, leaving individuals stranded, the lawsuit states.
The defect typically manifests itself shortly after the vehicles’ warranties expire, the suit claims, resulting in the automaker refusing to cover repair costs of an issue it hid from consumers.
The lawsuit is seeking certification of a nationwide class of owners and lessees of the affected models, as well as a Florida subclass, and includes claims for state law violations, breach of warranty and negligence.
The suit is Precht v. Kia Motors America, Inc., case number 8:14-cv-01148, in the U.S. District Court for the Central District of California.
Lexus—what’s their tagline—something about the relentless pursuit of perfection? They are also facing a defective products class action lawsuit filed by two independent Lexus owners who allege the luxury vehicle company, and its parent, Toyota Motor Corp, sold defective vehicles with interiors that are unable to withstand the Florida heat. Are you kidding?
Nope. The Lexus lawsuit, contends that the dashboards and other, similar interior components of their Lexus vehicles grew sticky, oily, shiny, cracked and otherwise degraded in appearance when exposed to the natural heat and humidity in Florida. Yuk.
The skinny—Daniela Perez and Jesus del Rio allege that Lexus was aware of the problem with the dashboards but refused to make repairs in the affected vehicles once the warranties expired. While Toyota sent out a service bulletin to its dealerships in 2011, alerting dealers to the defect and instructing them to make repairs on the burned dashboards, the dealerships refused to repair damages in vehicles that are no longer covered by the Lexus comprehensive warranty.
Further, Perez and del Rio allege that the vehicles were marketed as being suitable for the climate in Florida yet the product disintegrated in the heat under normal conditions in the vehicles, “These vehicles are marketed as luxury vehicles and as the product of Lexus’ never-ending ‘pursuit of perfection,’” the plaintiffs alleged in the suit, and they state that the dealerships refused to do anything about it. The complaint names two Lexus dealerships, Lexus of Kendall, which serves Miami, Coral Gables and South Florida, and Scanlon Lexus of Fort Myers. It also names Toyota Motor Sales USA Inc.
The case is Daniela Perez et al. v. GFB Enterprises LLC d/b/a/ Lexus of Kendall et al., in the Circuit Court of the 11th Judicial Circuit In and For Miami-Dade County.
This is just bad all round. A $190 million settlement has been awarded against Johns Hopkins Hospital in Baltimore in settlement of a medical malpractice class action lawsuit that alleges a gynecologist secretly photographed his patients. I don’t know—I’m thinking malpractice doesn’t quite get to the heart of this one.
The Johns Hopkins lawsuit, with more than 9,000 plaintiffs, claims that Dr. Nikita Levy used hidden surveillance cameras on his patients, including one hidden in a camera pen.
Levy, an obstetrician-gynecologist, was employed at Johns Hopkins from 1988 to 2013. The lawsuit claimed that the hospital should have been award of what Levy was doing, and that they failed to supervise him properly or investigate him.
In February 2013 Levy was fired from the hospital and just 10 days later he committed suicide.
Ok – Folks –time to adjourn for the week. Have a fab weekend –see you at the bar!