Posts Tagged ‘ Consumer Fraud ’
Week Adjourned: 1.13.12
January 13th, 2012. By LucyC
Top Class Actions
Diagnosis: Discrimination? Following in the footsteps of the Novartis and Merck suits, one has to wonder if discrimination is standard practice in this industry…
A $100 million gender discrimination employment class action lawsuit has been filed against Quest Diagnostics Inc., and AmeriPath, Inc., (collectively known as “Quest”) in U.S. District Court for the District of New Jersey.
The complaint details the systemic discriminatory treatment of female sales representatives company-wide by the self-proclaimed “world leader in diagnostic testing, information and services.”
Indiana resident Erin Beery and Florida resident Heather Traeger, both of them current Quest employees in the AmeriPath division, filed the lawsuit on behalf of themselves and a class of similarly-situated sales reps employed from February 17, 2010 to the present. Beery is an Executive Territory Manager in Quest’s Anatomical Pathology Sales Division in Indianapolis; Traeger is Senior Executive Territory Manager in the Anatomical Pathology Sales Division in Bradenton.
The complaint details a wide range of discriminatory practices in the selection, promotion and advancement of sales reps at Quest Diagnostics and AmeriPath, including discrimination on the basis of pregnancy and caretaking responsibilities in violation of Title VII of the Civil Rights Act of 1964 and other federal statutes.
In addition, both of the named plaintiffs in the case have individual claims of disparate pay, differential treatment, gender hostility, the creation of a hostile work environment and retaliation in the workplace affecting them in violation of Title VII of the Civil Rights Act of 1964 and other federal statutes.
According to Beery and Traeger, high ranking company officials within Quest’s predominately-male management team foster an environment detrimental to the success and advancement of female employees. They describe “old boys’ club” attitudes that pervade the enterprise, including forcing women to work under less favorable circumstances than their male counterparts and denying them the educational and job advancement opportunities afforded men in similar positions.
The complaint asserts that Quest’s policies do not provide sufficient oversight or safety measures to protect women from intentional and overt discrimination of even facially-neutral policies, so that female employees discriminated against have no recourse within the company. It cites an absence of internal incentives or disciplinary measures to ensure company executives and managers comply with company discrimination policies and equal employment laws.
The lawsuit also asserts that a significant number of the women who work for Quest have been and are affected by the same discriminatory employment policies, practices and procedures to which Beery and Traeger were subjected, justifying the certification of the class.
Scanning Scam? And now for our weekly consumer fraud lawsuit. This one was filed against Symantec Corp alleging the software manufacturer attempts to convince consumers to buy its products by providing misleading information about the functionality of their computers.
Filed by James Gross, of Washington state, the lawsuit claims that Symantec distributes trial versions of its products that scan a consumer’s system, then report that harmful errors, privacy risks and other problems exists on the PC, regardless of the actual operating status of the computer.
The lawsuit also claims that Symantec uses that scanning software to market Norton Utilities, PC Tools Registry Mechanic and PC Tools Performance Toolkit software. Norton Utilities and PC Tools are products that Symantec claims help improve the performance of personal computers and keep online activities private. The lawsuit claims that Norton Utilities and PC Tools are forms of “scareware,” a common type of malicious software that causes pop-up messages to appear on computers telling users that they are infected with a virus.
“The truth, however, is that the scareware does not actually perform any meaningful evaluation of the user’s computer system, or of the supposed ‘errors’ detected by the software,” the complaint claims. What scareware does do, in my experience, is suck up your time and send your stress levels through the roof—like you’ve got nothing better to do!
“The scareware does not, and cannot, actually perform the valuable tasks represented by Symantec through its websites, advertising, and in-software display screens.” No comment.
Lawyers representing the plaintiffs state that the software is falsely informing the consumer that errors are high priority and in addition it is falsely informing the consumer that their overall system health and privacy health is low. Symantec makes Norton 360, Norton Internet Security and Norton AntiVirus software.
Top Settlement
Nationwide Insurance Settlement. Well, it’s a start. This week, a federal court preliminarily approved a settlement with Nationwide Insurance that resolves allegations brought in a federal class action lawsuit, that the insurer improperly reduced or denied insurance benefits to residents in Delaware. Nice.
What’s the beef? The lawsuit claims that Nationwide improperly reduced or denied insurance benefits for medical services after submitting medical bills to a computer-based bill review audit. Specifically, the lawsuit challenges reductions in payment for those services based upon a reasonableness or usual and customary charge bill review administered by Mitchell Medical. Among other things, the lawsuit challenges Nationwide’s right to conduct such bill review under the applicable policies, the disclosure that such bill review would be conducted, and the manner in which the bill review was conducted. Nationwide denies any wrongdoing, and contends that review of medical bill pricing protects against excessive charges and helps to preserve insurance benefits.
Here’s the skinny on qualifying: “You are a member of the “Settlement Class” and a “Settlement Class Member” covered by the settlement if you fall within the following class definition adopted by the Court:
All persons, and their medical providers or other assignees, who (a) submitted first-party medical expense claims to Nationwide pursuant to Nationwide’s Delaware automobile insurance policy No-Fault coverage; (b) had their claim submitted by Nationwide to computer pricing review during the period from September 1, 2004 through December 31, 2007; (c) received or were tendered payment but in an amount less than the submitted medical charges based upon the pricing review of the charges; and (d) received or were tendered an amount less than the stated policy limits.”
You can find out more about the Nationwide insurance settlement here.
Ok – That’s a wrap for this week. See you at the bar!
Gambling for Justice: Class Action Lawsuit v. Small Claims Court, Place Your Bets
January 13th, 2012. By AbiK
It’s a well-chronicled sentiment: class action lawsuit lawyers get rich on attorneys’ fees and the little guy gets stiffed. Whether true or not—and there are arguments on both sides—it’s easy to see how a settlement check for $1.13 can make a plaintiff feel like ‘thanks, but no thanks’. And that brings us to the case of Heather Peters, who is suing Honda in small claims court over her claim that Honda engaged in false advertising when it stated her 2006 Honda Civic Hybrid had a 50 MPG rating.
Small claims court? Isn’t that only for some kind of ‘my boyfriend split with my smart phone and $800 I had under the mattress” type of reality tv show crap?
Well, no—and that’s the point—or calculated bet—Peters is trying to make. See, according to the Honda Civic Hybrid Class Action lawsuit proposed settlement FAQ, each class member would receive $100 as settlement. Peters, who is a former attorney herself, deems that a bit of a paltry sum and so she took the route that most of us do not and she chose to opt out of the proposed settlement. And, in turn, she took her complaint to small claims court.
What’s intriguing about her choice is that, not only can she seek up to $10,000—the new 2012 limit set for small claims in California where the complaint is being heard—but, if she can persuade enough 2003-2009 Honda Civic Hybrid owners to follow suit (no pun) and head to small claims court, she estimates that Honda would be liable for nearly $2 billion—vs the current liability they face coming out of the class action lawsuit in which each class member would receive $100.
Talk about power to the people—if only the people took to the power—by February 11, 2012—the date by which class members’ opt out requests to the Settlement Administrator need to be postmarked.
At issue in the Honda Civic Hybrid Class Action lawsuit is not just that advertised miles per gallon (MPG) ratings for the car were misrepresented, but also—and here’s where a subclass of class members enters into the picture, to which Peters also belongs—that for model years 2006-2008, Honda Civic Hybrid (HCH) owners were told their cars needed a software update to the Integrated Motor Assist (“IMA”) battery system.
What HCH owners didn’t know—and American Honda Motor Co. apparently did not disclose—was that allegedly, in order to install the update, the result would be a negative impact on fuel economy. Not ideal when the primary reason you purchased the car was for its fuel economy.
You can start to see where $100 per claimant—worth what? a couple of tank fills?—isn’t sounding like much.
So Peters is placing her bets on small claims court. But as stated earlier, it’s a bit of a calculated bet for her–she’s done, and doing her homework. Just see her website. And she says that anyone can do the same.
But would you?
Prepping for small claims court, sans an attorney of course as that’s part of the charm of small claims court—no lawyers allowed—takes time. And, you do have to have the ability to put together a pretty darn good case, particularly if you’re taking on a major corporation. Given that, it comes down to whether you think it’s worth it, or not. And that’s probably why so many of us sit back and await whatever settlement check we receive.
You have to admire Peters though. She’s up for a fight, and she’s got a pretty good one from the looks of it—perhaps even a new profession in behind-the-scenes small claims coaching. And, at least she is not just sitting back and complaining about attorneys’ fees—she’s trying to take a stand, both literally and figuratively.
Peters’ next hearing date is January 25.
Channeling Picasso for Oscillo Flu Relief Fraud?
January 11th, 2012. By AbiK
Picasso must be rolling in his grave at Château de Vauvenargues. That is, if he’s seen the latest round of homeopathic ‘remedy’, Oscillo, flu symptom relief ads. Yes, the same Oscillo that found itself on the receiving end of a class action lawsuit last August for fraudulent marketing—something about its being “nothing more than a sugar pill.”
Well, those Oscillo (or Oscillococcinum) marketers over at Boiron, which has its US headquarters not far out of Philly, must’ve taken a field trip when the Picasso exhibit was at the Philadelphia Museum of Art—and in a flash of creative genius someone said, “that Picasso right there…it’s the embodiment of the being…completely ensnared by flu…just feel the incoherence begging for clarity!” Ah yes, the germ of an ad campaign, right then and there. Just add water.
That’s the ad at left. You can see it has an illustration of a woman, clearly a bit discombobulated a’la Picasso, that’s meant to show how she’s suffering from flu symptoms. Woe is she, indeed.
But then, she takes homeopathic Oscillo and before you know it, everything is clear, a gentle breeze flows through her hair and she smiles as she takes in the great outdoors around her, lake and all.
There’s this little splotch of text, however, under the “after” picture. It reads,
“Time-accelerated dramatization.”
Hmm.
Are they for real? I hope someone (namely the art and copy team on this) had a good laugh. Sure it’s there as a legal disclaimer, but it’s a cartoon folks. I’m thinking we, as readers of the ad, would first have to believe that some parallel cartoon reality actually existed—like in Mary Poppins when they all hop into the sidewalk drawing—in order to expect cartoon-like results in our normal reality. Tracking with me?
But the American public is not that stupid.
Nor is it foolish when it comes to reading package labels. Here’s what the Oscillococcinum one has on its back (forgive the resolution):
Active Ingredient: Anas Barbariae Hepatis et Cordis Extractum 200CK HPUS; Inactive ingredients: sucrose, lactose.
Now, if you whip out your Cassell’s Latin Dictionary, you’ll find that the active ingredient is extract of duck liver and heart. The 200CK means that its gone through a series of 200 dilutions—with each one equating a 1:100 dilution. If you do the math, the level of “active ingredient” would seem to get rather miniscule, leaving almost…nothing. (In fact, the court filing for the Oscillo class action states that, given the dilution, “At this purported ratio, the probability of getting 1 molecule of the active ingredient of Oscillo in a regular dosage is approximately equal to winning the Powerball every week for nearly an entire year.” Someone has a sense of humor!)
For those who missed basic nutrition class, the inactive ingredients, sucrose and lactose are sugars.
Nothing—or almost nothing—and sugar is, well, sugar. Which is the basis for the Oscillo false marketing class action lawsuit.
I suppose Boiron deserves some kudos for creativity—on both fronts, product development and advertising. But that’ll only go so far to “reduce the duration and severity of flu symptoms” including body aches, headache, fever, chills and fatigue. And exactly how far is what the class action will determine now.
Week Adjourned: 12.30.11
December 30th, 2011. By LucyC
Top Class Actions
Neiman-Marcus Class Action Filed Over $1.50. That’s one dollar fifty cents, folks. This is interesting–and I have to admit I’d never thought about ATM fees in department stores. But this woman has–Marilyn Frey, from Sherman, Texas. She has filed a consumer fraud class action against Neiman-Marcus claiming unfair business practices over its charging $1.50 ATM fees at ATM terminals in their stores, without posting the fees. Umm. Ok.
The lawsuit, brought individually and on behalf of others similarly situated, claims that Frey made a withdrawal at an ATM on October 11, 2011, which is operated by Neiman-Marcus in their store, and was charged a “terminal fee” of $1.50 in connection with the transaction. The lawsuit claims that the fee is in violation of the Electronic Fund Transfer Act, which requires a notice posted on or at the ATM regarding the fee that would be charged for use. Well, this could certainly open up a can of worms…all this for $1.50.
Top Settlements
A couple of biggies this week…
AIG Low-balling Workers’ Comp Claims. First up—American International Group Inc (AIG)—they received final approval from a federal judge to pay $450 million as settlement of the AIG class-action lawsuit brought by a group of other insurers alleging underreporting of workers compensation premiums.
The settlement is supported by AIG and Ace Ina Holdings Inc., Auto-Owners Insurance Co., Companion Property & Casualty Insurance Co., Firstcomp Insurance Co., Hartford Financial Services Group Inc., Technology Insurance Co. and Travelers Indemnity Co. Liberty Mutual Group’s two subsidiaries, Ohio Casualty and Safeco, had opposed the settlement. In August, the U.S. Court of Appeals for the Seventh Circuit denied Liberty Mutual’s request to appeal the proposed $450 million settlement while the case is still ongoing. Liberty Mutual could still file an appeal down the road, and can still drop out of the settlement class to pursue a case against AIG on its own.
The lawsuit stems from allegations that AIG intentionally underestimated its workers’ comp premiums to avoid premium taxes and substantial residual market charges before 1996. In some states, from the mid-1980s to the mid-1990s, the residual market losses were greater than the residual market and voluntary market premium combined, so the more voluntary premium a company wrote, the more it had to pay out to cover its share of the residual market losses. That, allegedly, gave companies an incentive to under-report workers’ comp claims. Got it? Hey—fraud is fraud…
Look Sharp? Next up…A $538.6 million settlement has been agreed between Sharp Corp., Samsung Electronics Co. (005930) and five other makers of liquid crystal display panels which, if approved, would end claims that the companies fixed prices on the panels used in computers and televisions. The attorney generals of eight states, including California, Florida and New York are part of the settlement agreements with the manufacturers.
In a nutshell—the antitrust lawsuit alleged that the companies fixed prices of thin-film liquid crystal display panels, between 1999 and 2006, which effectively increased the prices for purchasers of devices such as televisions, notebook computers and monitors.
How is a consumer supposed to know this stuff? Oh right, we’re not. All things considered maybe the term “trust” should be stricken from terminology relating to the free market… just a thought…
Apparently, this settlement will see about $501 million made available for partial refunds to consumers and about $37 million made available for compensation to governments and other public entities for damages.
Ok—That’s a wrap for this year. Happy New Year and all that jazz. See you in 2012!
Week Adjourned: 12.23.11
December 23rd, 2011. By LucyC
Top Class Actions
Another Corny Lawsuit? Ummm—you decide. A consumer fraud lawsuit was filed this week—testing the boundaries of food labeling vis-a-vis PepsiCo’s snacks business, Frito-Lay. The issue? Frito-lay is misleading consumers by making claims that its products, which contain genetically modified corn and vegetable oils, are all-natural, according to the lawsuit. (All natural corn=all natural chips? Really?)
Specifically, the lawsuit claims that by labeling some of its Tostitos and SunChips products as “made with all-natural ingredients” Frito-Lay is misleading consumers because genetically modified corn and vegetable oils are also present in the product. “The reasonable consumer assumes that seeds created by swapping genetic material across species to exhibit traits not naturally theirs are not ‘all natural’,” the claim states.
The claimant is pursuing the case on the basis of a violation of California and federal laws relating to unfair and fraudulent claims. I’m still struggling with the thought of any of this type of “food” being ok on any level—never mind whether or not it’s genetically modified. Bah humbug!
Top Settlements
Diamonds are Forever. So’s the De Beers Price Fixing Settlement now. The U.S. Court of Appeals for the Third Circuit has issued an opinion today upholding the settlement in the antitrust class action litigation against the South African company De Beers, the world’s largest diamond supplier, for allegedly conspiring to monopolize the sale of rough diamonds.
The appellate court affirmed an order by U.S. District Judge Stanley R. Chesler of the District of New Jersey that approved a settlement under which De Beers agreed to pay $295 million to U.S. jewelry makers, retailers, and consumers who purchased diamonds and diamond jewelry beginning in 1994.
The settlement also prevents De Beers from continuing its illegal business practices and requires De Beers to submit to the jurisdiction of the Court to enforce the settlement. Ouch! That’s a wee bit more than a wrist slap —but hey—that tennis bracelet sure looks good…
Talk about Soaring Gas Prices… More price fixing—this time in the stock market (now there’s a surprise)—and this time the guilty party is Amaranth Advisors LLC. They got hit with a $77.1 million settlement in a securities lawsuit brought by traders who allege the hedge fund manipulated the natural gas market. Whoa Nelly!
According to Businessweek, Amaranth collapsed in 2006 after losing $6.6 billion on natural gas trades. In August 2009, the Commodity Futures Trading Commission announced that Amaranth paid $7.5 million to settle market manipulation allegations however, in their lawsuit, the traders presented an expert who estimated damages at $3.5 billion.
Then, in April of this year, the Federal Energy Regulatory Commission issued a $30 million civil penalty against Brian Hunter, an Amaranth trader accused of manipulating the natural gas market in 2006.
FYI—the settlement isn’t final yet—a hearing on final approval of the class-action, or group, accord is reportedly scheduled for March 27 and, if approved, could pave the way for investor reimbursement.
Ok—That’s a wrap for this week. Merry Christmas—Happy Hanukkah—and Season’s Greetings—have a wonderful holiday everyone…
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