Kenneth Cole bagging profits at customers’ expense? At least those are the allegations in a consumer fraud class action lawsuit filed against Kenneth Cole Productions Inc.
Specifically, the Kenneth Cole Outlet lawsuit alleges that the retailer misleads customers into believing they are purchasing items at a savings at its exclusive outlet stores by listing artificially high “suggested retail prices” on its product tags next to the term “our price” which is significantly lower. The lawsuit claims that because these products were never for sale in any other store, Kenneth Cole is in violation of California and federal laws.
“The plaintiff, in short, believed the truth of the price tags attached to the products she purchased at a Kenneth Cole outlet, which expressly told her that she was getting a terrific bargain on her purchase,” the complaint said. “In fact, she was not getting a bargain at all.” Filed by lead plaintiff Peggy Cabrera, the lawsuit asserts that Cabrera was induced to purchase a sweater and shirt top from a Kenneth Cole Outlet store in California after noticing significant differences in price between the “MSRP” and “our price” label, particularly after observing that not all product price tags made this distinction.
“In reality, Kenneth Cole never intended, nor did it ever, sell the item at the represented ‘MSRP,’” the complaint states. “Thus, plaintiff was deceived by the false price comparison into making a full retail purchase with no discount.”
In the lawsuit, Cabrera contends that Kenneth Cole is taking advantage of the term “outlet store” because the idea of shopping there conveys to reasonable consumers that at least some products comprise merchandise formerly offered for sale at full-price retail locations, which is not the case at exclusive Kenneth Cole outlets.
Further, the complaint states that the Federal Trade Commission explicitly describes the fictitious pricing scheme employed by Kenneth Cole as deceptive, making it a violation of the FTC Act, as well as the California Business and Professions Code.
Pure Leaf Iced Tea = Pure B.S.? While we’re on the subject of consumer fraud…Unilever United States Inc. and PepsiCo. Inc. are facing a putative class action alleging false advertising regarding their jointly produced Pure Leaf iced tea products. Specifically, the lawsuit claims the teas are falsely branded as “All Natural” and free from preservatives when in fact they contain a non-naturally produced citric acid as a preservative.
Named plaintiff Momo Ren alleges that the defendants engaged in an aggressive marketing campaign that claimed the teas are “nothing but all natural, freshly brewed tea from tea leaves,” which was designed to attract consumers seeking those types of products.
According to the Pure Leaf lawsuit, citric acid is no longer made from fruit but rather manufactured through citric acid bacteria fermentation. It is classified by the USDA as a “synthetic allowed” substance. Therefore, PepsiCo. and Unilever, through a partnership with Unilever-owned Lipton Tea conspired to produce Pure Leaf, the advertising for which is in violation of federal and state consumer protection laws against misbranding.
“By marketing the products as being ‘All Natural’ and free of preservatives, defendants wrongfully capitalized on and reaped enormous profits from consumers’ strong preference for food products made entirely of natural ingredients and free of preservatives,” the suit states.
The plaintiff has filed claims of deceptive trade practices, negligent misrepresentation, breach of express warranty and unjust enrichment and seeks unspecified compensatory and punitive damages.
Toyota Power Steering… Don’t have a dollar figure for this one BUT 800,000 Toyota customers are going to sleep easier as a result of a settlement reached with the car maker in a pending defective automotive class action lawsuit. The suit, filed in California federal court, claims that the power steering systems of some Corollas caused the vehicles to drift out control.
According to court documents, lead plaintiffs Irene Corson and Susan M Yacks, and Toyota, sought preliminary approval of the deal in March, the terms of which state that Toyota denies any defect with the electronic power steering system in the 2009 and 2010 model year Corollas at issue.
Under the terms of the settlement, class members who have complained about the on-center steering feel of their vehicle will have their retuned electronic control units installed at no cost. For those who haven’t previously complained, the retuned electronic control unit will be available at a 50 percent discount. Class members who paid out-of-pocket to have the returned electronic control unit installed may be reimbursed up to $695, according to the settlement memorandum.
Court documents show that The National Highway Traffic and Safety Administration opened an investigation in February 2010 of the electric power steering system in the Corolla and Matrix models. The investigation revealed related consumer complaints dealing with operational issues, not failure of steering elements. The investigation was closed by May 2011.
Under the terms of the deal, class counsel can ask for attorneys’ fees and expenses, and class representative incentive awards up to $750,000. The case is Irene Corson et al. v. Toyota Motor Sales USA Inc. et al., case number 2:12-cv-08499, in the U.S. District Court for the Central District of California.
Ok—that’s it for this week folks—see you at the bar! And Happy 4th of July!
Fans of Sunday Night Football are making an end run at the NFL and DirecTV, having filed an antitrust class action lawsuit, over the bundling of games in the NFL Sunday Ticket package. Specifically, the lawsuit claims that Sunday Ticket subscribers should not be forced to pay several hundred dollars for the NFL’s entire spectrum of out-of-market games just so they can follow one team or see an individual game.
Filed in California by Thomas Abrahamian, the NFL Sunday lawsuit states: “The league and DirecTV offer NFL Sunday Ticket only as all-or-nothing….Purchasers of NFL Sunday Ticket must buy all out-of-market games for all teams even if they are only interested in watching the games of a particular team. Likewise, consumers must buy the complete season of games and may not purchase individual games.”
“A Cleveland Browns fan living in California cannot watch the Browns play, except occasional games on network television, unless he purchases the entire package of League games from NFL Sunday Ticket,” according to the complaint. The lawsuit is Case 2:15-cv-04606-BRO-JEM.
I’ll Drink to That! A settlement has been reached in a consumer fraud class action lawsuit pending against Beck’s Beer. The lawsuit alleges that the beer is produced in St. Louis and brewed with water from Missouri, not imported from Germany, as customers may have been led to believe.
Anheuser-Busch, the makers of Beck’s, ‘tricked’ consumers into thinking Beck’s was a German beer, according to the lawsuit. The beer used to be brewed in Germany by its German owners until 2002 when it was sold to Belgium’s Interbrew, which then merged with Brazil’s AmBev, to become InBev, which in turn acquired Anheuser-Busch. Production of Beck’s moved to St. Louis in 2012, according to the lawsuit.
According to the Beck’s settlement terms, eligible class members are entitled to a refund of up to $50. Settlement class members include customers who purchased Beck’s beer, including Beck’s Dark and Beck’s Light, since May 2011. The settlement has yet to receive final approval but if approved, class members can fill out an online form to claim a refund. Beck’s drinkers can get 10 cents back for every individual bottle purchased; 50 cents for a six-pack or $1.75 per 20-pack.
Refunds will be capped at $50 for claims backed by a valid proof of purchase. Consumers who didn’t keep receipts are entitled to no more than $12. Full terms will be made public upon final approval of the settlement.
Additionally, under the settlement terms, Anheuser-Busch agreed to make labeling adjustments. A statement on the bottle saying it’s made in the USA will become more visible. The green boxes in which the bottles are packaged will also say the beer is made in the USA. So much for “who reads the packaging anyway?”
Patient Privates Undergo “Review” During Colonoscopy… You can’t make this stuff up! An unidentified patient in Virginia has been awarded $500,000 by a jury hearing his medical malpractice lawsuit which claims his anesthesiologist made defamatory comments while he was under sedation for a colonoscopy. The award includes $200,000 in punitive damages.
The unidentified plaintiff, referred to as DB, had left his smart phone on record so he could ensure he got his doctor’s post-surgical instructions, according to the Washington Post. (What ever happened to the patient consult?) However, during the procedure his trousers were placed under him, (Why?) which resulted in the inadvertent recording, court papers indicate.
When DB listened to the recording on his way home from the surgery, he discovered Dr. Tiffany Ingham mocking and disparaging him. Among the comments was a referral to a rash on the plaintiff’s penis, which Ingham incorrectly suggested indicated syphilis and tuberculosis. Nice.
The jury awarded $50,000 in compensatory damages for defamation for the doctor’s remarks about each of these diseases, and another $200,000 for overall medical malpractice. Ingham also allegedly said she was going to note in the man’s chart that he had hemorrhoids, which he didn’t.
DB also sued a gastroenterologist, Soloman Shah, who, while present for the procedure, did not directly participate in most of the commentary by Ingham. Smart…That portion of the case was dismissed.
And it’s off to the rodeo!
That’s a wrap folks…See you at the Bar!
Shutterfly may have its wings clipped. The company that developed the facial recognition software has been hit with a putative class action lawsuit over alleged privacy violations—actually—violations of Illinois state’s Biometric Information Privacy Act.
Filed by Illinois resident Brian Norberg, the Shutterfly complaint asserts that online image publisher Shutterfly and its subsidiary ThisLife LLC collect facial recognition data from user-uploaded photos without first notifying individuals and receiving their written consent, and by failing to inform them how long the information will be stored and how it will be used.
“Specifically, defendants have created, collected and stored millions of ‘face templates’ (or ‘face prints’)—” highly detailed geometric maps of the face—” from millions of individuals, many thousands of whom are non-Shutterfly users residing in the state of Illinois,” the complaint states.
“Defendants in this case made no effort whatsoever to obtain consent from unwitting third parties when they introduced their facial recognition technology,” the complaint state. “Not only do defendants’ actions fly in the face of FCC guidelines, they also violate the privacy rights of Illinois residents.”
Notably, Illinois law also prohibits companies that collect biometric data from selling it to third parties.
Heads up—Norberg is seeking $5,000 for each intentional and reckless violation, and $1,000 for each violation resulting from defendants’ negligence. Go get’em!
The case is Brian Norberg v. Shutterfly Inc. et al., case number 1:15-cv-05351, in the U.S. District Court for the Northern District of Illinois.
Settlement in the bag…to the tune of $4.88 million. That’s the number reached in a preliminary settlement between Michael Kors Holdings Ltd and plaintiffs in a class action lawsuit alleging the company engages in consumer fraud.
Ok—you’ve read this song sheet before. The specific allegations are 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.
Under the terms of the preliminary Kors settlement Michael Kors will replace “MSRP” with “Value” on its price tags and display signage explaining that term, or stop using reference prices for products made exclusively for its outlets.
If approved, the settlement will include shoppers who bought products from Michael Kors outlets in the four years ending July 25, 2014.
The case is Gattinella v. Michael Kors (USA) Inc et al, U.S. District Court, Southern District of New York, No. 14-05731.
Here’s one for the record books… A jury hearing the first product liability lawsuit against Wright Profemur hip replacement systems has awarded the plaintiff $4.5 million in damages. Brought by Alan Warner, the lawsuit is the first of several hundred to go to trial with allegations that the hip replacement Warner received failed after just three years: the average life span of the system is between 15 and 20 years.
There are over 1,200 similar defect product lawsuits pending against Wright Profemur hip replacement alleging the plaintiffs suffered health problems when the modular femoral neck stem broke.
Warner’s trial lasted two weeks and is the first case to go to court. It is not part of the federal MDL.
Hokee Dokee—That’s a wrap folks…See you at the Bar!
How ill is ill enough? And why should the insurer get to decide instead of the physician? These are the issues at the heart of a denied insurance claim lawsuit filed against Blue Cross. The lawsuit alleges the insurer denies its policy holders access to a newly approved and expensive new hepatitis C drug made by Gilead Sciences.
According to the hepatitis C drug lawsuit, the medical insurer has refused its contractual duty to provide coverage for medically necessary treatments for a client who has had hepatitis C for 10 year, and others similarly situated. According to the lawsuit, lead plaintiff Janie Kondell was denied coverage because her “liver had not sufficiently deteriorated.”
“In other words, defendant decided that Ms. Kondell hadn’t suffered enough, and her liver hadn’t been damaged enough, by a disease that causes irreparable harm and death, for which a cure is finally available,” the lawsuit states.
The US Food and Drug Administration approved the treatment, Harvoni, in October 2014. According to the complaint, the drug has a 95-99 percent cure rate. The once-daily pill can cost from $64,000 for an eight-week treatment to $99,000 for a 12-week treatment, and has few side effects.
According to the complaint, prior to approval of Harvoni, the existing treatment for Hep C, a contagious, chronic, potentially fatal condition resulting in liver damage, cirrhosis, infections, cancer, heart attacks and death, was only 70 percent effective and came with significant side effects.
“Hepatitis C is only the second disease or condition for which a cure has been discovered within a single lifespan of the disease or condition discovery,” the complaint states. “Hepatitis C was discovered in 1990 and the cure was approved in 2014. Hepatitis C could be completely eradicated in a few years as a result of Harvoni, assuming patients, such as Kondell, have access to this incredible cure.”
According to the complaint, Kondell has been a policyholder at Florida Blue for over 20 years. She was diagnosed with Hep C, and in February 2015 her physician prescribed Harvoni. Florida Blue immediately denied coverage, the complaint states. Although her doctor appealed the insurer’s decision twice Florida Blue continued to deny coverage, claiming Kondell’s liver wasn’t severely damaged.
“No known medical study supports this denial, and nothing in Kondell’s policy (or any of the class members’ policies) grants defendant the right to withhold a potentially life-saving cure, particularly on the perverse and pretextual ‘basis’ that it is not ‘medically necessary,’” the complaint states.
The complaint claims that Blue Cross is in violation of Florida’s Deceptive and Unfair Trade Practices Act and breached the contract of all policyholders diagnosed with hepatitis C who were denied coverage. The suit is asking the court to demand Florida Blue cover the treatment and seeks unspecified damages in excess of $5 million.
The case is Kondell v. Blue Cross and Blue Shield of Florida Inc., case number 0:15-cv-61118, in the U.S. District Court for the Southern District of Florida.
Oil Spill Launches Legal Clean-Up…The people of Santa Barbara have filed an environmental class action lawsuit against Plains All American Pipeline (NYSE:PAA) stemming from the Refugio State Beach oil spill in Santa Barbara. The class action complaint alleges the Texas-based company negligently operated the pipeline, Line 901, causing a rupture that discharged over 100,000 gallons of crude oil onto beaches and into the Pacific Ocean, damaging ecologically and economically significant natural resources. The complaint claims violations of state and federal laws.
“In Santa Barbara, those environmental impacts translate to profound economic impacts. In the short term, the oil from Plains All American’s ruptured pipeline has closed fishing grounds and shellfish areas, and caused canceled reservations from tourists who otherwise would be spending their money on hotels, restaurants, kayaking or surf trips, and fishing charters,” the complaint states.
The complaint was filed on behalf of Stace Cheverez, a sea urchin diver and nearshore fisherman. Plains All American’s oil spill has led to the closure of areas where Cheverez customarily fishes for commercially valuable nearshore species like Grass Rockfish.
Sadly, Plains All American Pipeline is no stranger to oil spills. The company has accumulated 175 safety and maintenance infractions since 2006. The Pipeline and Hazardous Materials Safety Administration shows Plains’ rate of incidents per mile of pipe is more than three times the national average. “In short, Defendant has an ugly tradition of operating pipelines that fail. The communities through which it transports oil suffer the consequences,” the complaint alleges. Not the neighbor any of us would desire, never mind being a good corporate citizen. What ever happened to that?
The spill, which triggered California Governor Jerry Brown to declare a state of emergency, may have extreme effects on both the environment and economy. Two beaches have been closed and nearby hotels have been fielding calls from concerned visitors who planned on visiting Santa Barbara, one of Southern California’s top tourist destinations, over Memorial Day weekend.
Phoenix to pony up $42M in bad faith insurance settlement …the bad faith insurance class action lawsuit alleged the insurer unfairly raised rates on premium-adjustable universal life insurance policies. Additionally, the company has also agreed to freeze its rates for five years. Nice.
The Phoenix Life settlement also prevents Phoenix from challenging the validity of any class member’s PAUL policy as an unlawful “life wager,” which the insurer has frequently done in order to avoid paying death benefits, according to the lawsuit.
The class action lawsuit was filed following an announcement by Phoenix Life that it was raising COI rates on PAUL policies in 2010 and again in 2011. The lawsuit alleged the insurer was treating life settlement investors unfairly. Unlike whole life insurance policies that require fixed monthly premium payments, PAUL policies only require premiums to cover COI charges and other expenses, allowing policyholders to minimize their investments, according to the plaintiffs.
The PAUL policyholders claimed Phoenix discriminated against life settlement investors who pay their premiums on time by hiking the COI rates and did so because the company comes out ahead when policies lapse, and it’s able to avoid paying death benefits.
The more than 1,000 class members will be sent checks in the mail, unless they opt out of the settlement. A $25,000 incentive award has been granted for named plaintiff Martin Fleisher.
The case is Fleisher v. Phoenix Life Insurance Co., case number 1:11-cv-08405, in the U.S. District Court for the Southern District of New York.
Hokee Dokee—That’s a wrap folks…See you at the Bar!
Heads Up New Parents…Organic Similac not so organic—according to a consumer fraud class action filed against Abbott Laboratories, the maker of Similac infant formula food. The lawsuit alleges the label stating the food is organic is false and misleading because the formula isn’t actually organic.
Filed by Sara Margentette, Matthew O’Neil Nighswander and Ellen Steinlien in U.S. District Court in New York, the Similac lawsuit alleges Abbott’s Similac Advance Organic Infant Formulas contained ingredients that are prohibited in organic foods.
According to the complaint some 26 of the 49 listed ingredients are not allowed in organic food. The suit states the ingredients were “irradiated substances, synthetic compounds, or produced from hazardous substances.”
The plaintiffs claim Abbot described the Similac Infant formula as organic in order to persuade consumers to purchase it, thereby increasing its sales and profits.
“As a result of its false and misleading labeling, Abbott was able to sell its ‘Organic’ Infant Formula to hundreds of thousands of consumers throughout the United States and to realize sizeable profits,” the lawsuit states. Plaintiffs are seeking class certification and more than $5 million in damages plus court costs.
The case is United States District Court for the Eastern District of New York case number 1:15-cv-2837.
JC Penny Nailed re: its Sales? It’s another consumer fraud class action lawsuit for JC Penney over its alleged practice of artificially inflating merchandise prices only to mark them down to create the appearance of a “sale” price. According to the lawsuit, the retail chain’s pricing practices are equivalent to deceptive and fraudulent advertising.
The JC Penney class action was certified last week, and accuses the national retail chain of operating a “massive, years-long, pervasive campaign” to deceive shoppers about its pricing for private-label brands, and for outside brands such as Liz Claiborne, sold exclusively by JC Penny.
The lawsuit states that Cynthia Spann, lead plaintiff in the class action, discovered the deceptive advertising practices after buying three blouses for $17.99 each, a 40 percent discount from the “original” $30 price, only to learn the price was never above $17.99 at any point during the prior three months.
The case is Spann v. J.C. Penney Corp et al, U.S. District Court, Central District of California, No. 12-00215.
Another Overdraft Fee Class Action is…Over! You gotta love this! Capital One Bank NA has to pony up $31.8 million as settlement of a lawsuit that alleged the bank manipulated its overdraft fees. Approved by US District Judge James Lawrence King, the settlement fund of $31.76 million represents 35 percent of the most damages plaintiffs could expect to recover at trial.
The Capital One overdraft fee lawsuit has taken nearly five years and the class consists of roughly 611,000 members. Capital One tried three times to have the lawsuit thrown out. It alleged that the bank deducted money from customers’ accounts based on the size of their transactions, not in chronological order, thereby maximizing the amount of overdraft fees it charged.
For settlement class members who do not opt out, prorated shares from the settlement fund will automatically be sent to them. Capital One’s data was used to determine which account holders were harmed by the high-to-low posting practice.
The case is In re: Checking Account Overdraft Litigation, case number 1:09-md-02036, in the U.S. District Court for the Southern District of Florida.
Hokee Dokee—That’s a wrap folks…See you at the Bar!