Bad Apple! The god of tech gadgets got slapped this week—with a potential defective products class action lawsuit (yes, another one), alleging its iPhone 4 has a defective power button, effectively preventing the operator from being able to use the phone. This power button failure allegedly occurs shortly after the phone’s one year warranty expires. And doesn’t that just figure…
The Apple iPhone 4 class action lawsuit, filed by plaintiff Debra Hilton, Debra Hilton v. Apple Inc., Case No. 13-cv-2167, U.S. District Court for the Northern District of California, claims “The failure of the power button that has plagued the iPhone 4 is more than an inconvenience… As a method by which the phone is toggled on and off, the failure of the button precludes general use of the phone and thereby effectively prevents iPhone 4 owners from being able to use the phone.” Yup.
According to the lawsuit, Hilton alleges the iPhone 4 power button defect is caused by the premature deterioration of a flex cable that connects the power button to the phone. When this cable deteriorates, the power button becomes harder and harder to depress, and eventually fails to work. Yup.
The iPhone 4 lawsuit contends that thousands of consumers who purchased the iPhone 4 have experienced this failure forcing them to throw away their phone or pay Apple $149.99 plus shipping for a replacement. Yikes! Better get on it boys.
Two Better than One for Wells Fargo. Wells Fargo made headlines twice this week, two settlements to report—both biggies. The first was a judicial order to reinstate a $203 million judgment against the bank in settlement of an overdraft fees class action lawsuit.
In a nutshell, the judgment, based upon the court’s findings, as affirmed on appeal by the Ninth Circuit, states that Wells Fargo violated California’s unfair competition law by deceiving its customers that debit card purchases would be posted chronologically to their accounts when in fact Wells Fargo posted them in a high-to-low order for the sole purpose of generating overdraft fees.
The case was brought on behalf of California Wells Fargo customers who, from November 15, 2004 to June 30, 2008, incurred overdraft fees on debit card transactions as a result of the bank’s practice of sequencing transactions from highest to lowest.
The second settlement with Wells Fargo’s name on it involves a force-placed insurance class action lawsuit brought by homeowners in Florida. (Force-placed insurance, btw, is sometimes referred to as “lender placed insurance”.) The lawsuit alleged that the homeowners were overcharged for the insurance, and that Wells Fargo unfairly took commission on the insurance, which it assigned to the homeowners through QBE.
The class was certified in 2012, and more than 24,000 homeowners were notified. During the class period, from April 2006 to February 2013, the class members were charged $77 million for force-placed insurance, according to the settlement documents, the South Florida Business Journal reports.
But wouldn’t you know it, just two months before they were due to go to court, the parties reached a $19.5 million settlement.
The settlement will provide a refund of the amount charged for force-placed insurance to the members of the class. Borrowers who were charged and paid the premium will be refunded 25 percent in cash. Those who were charged the premium but didn’t pay will get a credit of 25 percent off their bill.
Bet those homeowners are breathing a huge sigh of relief this weekend.
Largest Generic Drug Safety Fine. Ever. We’d be completely remiss if we didn’t mention this one… Ranbaxy has pled guilty to federal drug safety violations and will pay $500 million in fines to resolve the claims. The generic drug manufacturer is alleged to have sold subpar drugs and made false statements to the Food and Drug Administration (FDA) about its manufacturing practices at two factories in India.
According to the Justice Department, the settlement is reportedly the largest in history involving a generic drug maker. Part of the settlement involves Ranbaxy pleading guilty to three felony counts of violating the federal drug safety law and four of making false statements to the FDA.
According to a report by the New York Times, Ranbaxy acknowledged it had failed to conduct proper safety and quality tests of several drugs manufactured at its Indian plants, known as Paonta Sahib and Dewas, including generic versions of many common medicines, such as the epilepsy drug gabapentin, and the antibiotic ciprofloxacin.
In the case of gabapentin, also known as Neurontin, Ranbaxy reportedly admitted that between June and August in 2007, it was aware that certain batches had tested positive for “unknown impurities” and had unreliable shelf lives. Nevertheless, the company didn’t report this to the FDA and announce a recall until October of that year. The recall ultimately involved more than 73 million pills.
Further, testing of certain batches of drugs to ensure their effectiveness was reportedly not done for weeks or months after the company had told the FDA the testing had been carried out.
Ranbaxy has set aside $500 million in anticipation of the penalties, which will break down as a $150 million in a criminal fine and forfeiture, and the remainder going to settle civil claims brought by the federal government and all 50 states. A former Ranbaxy executive who alerted the federal government to the problems will receive close to $49 million in compensation for his role as a whistleblower, the Times reports.
That’s a wrap. It’s cocktail hour—somewhere in the world—see you at the bar!
So after a few Budweiser class action lawsuits were filed last week over allegations that the King of Beers was selling ‘watered down’ beer, Budweiser took the opportunity to strike back. But rather than just defend itself or call the watered-down beer allegations pure bunk, it tried to get clever. How so? Anheuser Busch ran a full-page ad featuring a picture of Budweiser Water—actual canned water—that the brewer produces for disaster relief efforts.
Here’s the full-page ad:
If at first you don’t succeed, try, try, try again…Good advice, we hope, for the women who have just filed a regional gender discrimination class action lawsuit against Wal-Mart.
Now, to be clear, Wal-Mart is not unfamiliar with the allegations, as a national gender discrimination and employment class action was filed against the world’s largest retailer only to be dismissed in 2011 by the US Supreme Court. Had that class action gone through, the class of plaintiffs would likely have been in the hundreds of thousands. But it didn’t. So—now, acting on the advice from the Supreme Court, women are filing discrimination class actions by state. The one filed this week is the fifth such regional lawsuit.
Filed in Wisconsin by one current and four former employees, the class action, entitled Ladik et al. v. Wal-Mart Stores Inc., Case No. 13-cv-00123, U.S. District Court for the Western District of Wisconsin, alleges that female employees are discriminated against when it comes to receiving compensation and promotions. The Wisconsin gender discrimination class action lawsuit is seeking to represent female workers employed by Wal-Mart since December 1998.
I’ll show my gender bias and wish them every success!
Hey Bud—this one’s for you! Oh heck yes. This week saw Anheuser Busch, the brewer of the self-proclaimed King of Beers—Budweiser —get hit with several consumer fraud class action lawsuits alleging that it waters down its Budweiser, Michelob and other top-selling beers. Tsk,Tsk. Do not go messing with people’s alcohol content gentlemen.
Filed in Pennsylvania, California and other states, the Budweiser lawsuits allege that consumers have been sold beer that contains less alcohol than advertised on the labels.
Specifically, the complaints allege that Anheuser Busch employs some of the most sophisticated process control technology in the world to precisely monitor the alcohol content at the final stages of production, and then adds additional water to produce beers with significantly lower alcohol content than is represented on the product labels, and depriving consumers of the value they paid for.
The lawsuits are based on information provided by former employees at the company’s 13 US breweries, some in high-level plant positions, according to lead lawyer Josh Boxer (MSN.com). “Our information comes from former employees at Anheuser-Busch, who have informed us that as a matter of corporate practice, all of their products mentioned (in the lawsuit) are watered down,” Boxer told MSN.com “It’s a simple cost-saving measure, and it’s very significant.”
The complaint alleges: “There are no impediments—economic, practical or legal—to AB accurately labeling its products to reflect their true alcohol content. Nevertheless, AB uniformly misrepresents and overstates that content.”
Nina Giampaoli who filed the California-based lawsuit, said “I think it’s wrong for huge corporations to lie to their loyal customers—I really feel cheated. No matter what the product is, people should be able to rely on the information companies put on their labels.”
I’ll drink to that!
Nothin’ like a kid in an Apple—er, candy—store. This one is for all you parents out there who woke up on morning to find your credit card balance had magically grown—seemingly on its own. But wait—is that the patter of little feet I hear? Could it be the kids buying in-game extras from the Apple mobile apps store that’s the root of the mystery? You betcha!
And this week, Apple magnanimously agreed to pony up some gift cards, no total value given, by the way, in settlement of the consumer fraud class action it’s facing over what could only be described as unfair business practices.
If the Apple apps settlement is approved, parents would receive $5 iTunes gift cards. Wow—pack up the kids, you’re going on vacation!
Ok—here’s the skinny. The lawsuit is brought by parents who allege their children downloaded free games from the Apple mobile app store and then went on to buy in-game extras—effectively charging the cost of the games to their parents—without their parents’ knowledge. In some cases these charges ran into the hundreds of dollars. Yup.
If approved, Apple would build a website for people who wish to make a claim. As well the tech-giant would send e-mail notifications to some 23 million customers. OK, that ain’t chump change.
According to a report by CNN.com parents whose children incurred larger costs and who want more than $5 gift card, must provide proof that a larger amount was spent by their children during any 45-day period. Those who can show more than $30 in purchases may choose a cash refund instead of an Apple credit. Purchases made until the date of the settlement would be eligible for refunds, CNN.com reported.
Bad Apple! What kind of example does that set?
Ok—See you at the bar and Happy Friday!
A recent report by the Federal Elections Commission has come out putting the cost of the recent election cycle at more than $7 billion. That’s a lot of money. Enough that the folks over at Newsy put together the little video clip (above) about it.
But $7 billion ironically pops up in another tally for 2012—the top 10 whistleblower settlements for the year add up to more than $7.5 billion. It’s a staggering amount—not only for an election, but also for whistleblower cases as, think about it, it only represents the tip of the iceberg.
If you’re wondering what those whistleblower settlements were, here’s the list:
1. GlaxoSmithKine – $3 billion
Reason: Illegally marketing some of its prescription drugs such as Paxil, Avandia, Advair, Wellbutrin, Zofran, Imitrex, Lamictal, Lotronex, Floven and Valtrex.
2. Abbott Laboratories – $1.5 billion
Reason: Abbott’s off-label marketing of Depakote.
3. Bank of America – $1 billion
Reason: Mortgage and bank fraud.
4. Merck – $950 million
Reason: Marketing Vioxx illegally
5. Pfizer – $491 million
Reason: Kickbacks and using off-label marketing for organ transplant rejection drug, Rapamune
6. Senior Care Action Network – $323 million
Reason: California Medicaid and HMO cost reporting fraud.
7. Actavis – $202 million
Reason: to settle numerous claims that the company reported inflated prices of its drugs, causing the US and four state governments to overpay.
8. Deutsche Bank – $202 million
Reason: False certification for HUD/FHA loans
9. Oracle – $199 million
Reason: Failure to provide discount pricing
10. McKesson – $190 million
Reason: Accusations that the company inflated prices of numerous prescription drugs, resulting in Medicaid overpaying for those drugs.
Not long ago the diabetes drug Avandia had all the media focus. Patients who were on the drug were hit with a barrage of information—sometimes confusing, sometimes scary—about Avandia’s link to heart attack. And thus began the mad dash to switch over to Actos. After all, while there were also some studies linking Actos to heart attack (along with the infamous TIDE trial), they were reported to be “inconclusive”. Not concrete enough to stop a flurry of prescriptions.
And the black box warning that Actos received (along with Avandia) back in 2007 was only regarding heart failure risk in the form of congestive heart failure—not heart attack or myocardial infarction.
But some Actos patients had already suffered heart attack. And many had submitted complaints in hopes of an Actos lawsuit v. Takeda, the drug’s manufacturer. But their complaints, for all intents and purposes, seemed to fall on deaf ears—at least where lawyers were concerned.
How could it be? As lawsuits about Actos bladder cancer were sprouting up, Actos heart attack complaints fell by the wayside. And yet, given they share a drug class, thiazolidinediones, there seemed to be such similarity between Avandia and Actos—why, it would be almost intuitive that they could perhaps have similar side effect or adverse event profiles, right? And what about some of those studies—was there anything to them?
Then, something unforeseen happened in the form of former Takeda consultant, Dr. Helen Ge—the Actos whistleblower.
And suddenly, everything—sadly—made sense for those Actos patients who had tried to file Actos heart attack complaints. Only now, was it too late? They had already tried to contact lawyers who had rejected them or not taken up their cause simply because there wasn’t much the lawyers could do with them.
Now, however, there might be.
The Actos whistleblower lawsuit (U.S. ex rel. Helen Ge v. Takeda Pharmaceutical Co., 10-cv-11043, U.S. District Court, District of Massachusetts (Boston)) has shone light on Dr. Ge’s assertion that Takeda knew about instances of Actos heart attack but downplayed them—for the sake of increasing their profits.
Dr. Ge claims she was let go from Takeda after she raised concerns over the company’s handling of the Actos safety data—and that officials at Takeda tried to direct medical reviewers, including Dr. Ge, to “change their professional opinion” regarding the potential dangers of Actos heart problems—specifically Actos myocardial infarction.
The whistleblower lawsuit is, in effect, a game-changer for Actos litigation. And former Actos victims might find that where there once was no direct path to an Actos lawsuit, there now might be.
Welcome to Round #2.