Chicago Business Litigation Lawyer Blog

Many people are on the look-out for a quick fix to lose weight and get in shape. It is therefore no surprise that hundreds of thousands of people took advantage of Skechers's offer when they introduced shoes that claimed to help people lose weight and tone up.

Skechers's ads featured celebrity endorsers such as Kim Kardashian and Brooke Burke. The shoe company claimed that its Shape-Ups were designed to promote weight loss and tone butt, leg, and stomach muscles with the shoe's curved "rocker" or rolling bottom. Skechers said that this caused instability which would cause the wearer of the shoes to "use more energy with every step." Shape-ups cost about $100 and are sold across the country.

The Resistance Runner shoes were advertised as a fitness tool that could help people who wore them increase "muscle activation" by up to 85% for posture-related muscles and 71% for muscles in the buttocks.

The current lawsuit against Skechers consolidates more than 70 lawsuits from across the country into one lawsuit in federal court in Louisville, Kentucky. U.S. District Judge Thomas B. Russell recently approved the settlement reached between Skechers and the plaintiffs for $40 million. The judge also ordered Skechers to pay an additional $5 million for the attorneys in the case to share. Russell ordered that the money cannot come out of the $40 million settlement.
The two lead plaintiffs in the case will receive payments of $2,500 each.

Those with approved claims will be able to collect repayment for their purchase - up to $80 per pair of Shape-Ups; $84 per pair of Resistance Runners; up to $54 per pair of Podded Sole Shoes; and $40 per pair of Tone-Ups. The settlement covers more than 520,000 claims. About 1,000 people who are eligible for coverage by the settlement opted out.

Eleven objections to the settlement were filed, including people seeking the full purchase price of their shoes and one person saying the settlement would prevent him from seeking damages on his own. The judge rejected all of these arguments.

The settlement comes just one year after Skechers reached a deal with the Federal Trade Commission regarding the ads. A settlement with the Federal Trade Commission bars Skechers from ever again running the ads. If there is any money left over from the $40 million after all of the claims have been processed, the judge has ordered that the remainder of the money is to go to the Federal Trade Commission.

Skechers denies the allegations but said that it is settling in order to avoid a long and costly litigation.

Continue reading "Sketchers Settles Class Actions Alleging That its Shape-Ups Don't Really Help Consumers Get in Shape" »

The government sometimes imposes sanctions on certain imports for the sake of fair competition on behalf of domestic producers, among other reasons. When companies choose to ignore those sanctions, they could find themselves held accountable, not only by the government, but also by the domestic producers who were harmed by the illegal imports.

The "Honeygate" investigation, led by the U.S. Immigration and Customs Enforcement investigative arm of the U.S. Department of Homeland Security is one such case. The investigation resulted in a series of seizures of illegally imported honey, criminal charges, and massive fines. The United States District of Illinois filed criminal charges against two of the country's largest industrial honey suppliers, Groeb Farms, Inc. and Honey Solutions. The two companies entered into Deferred Prosecution Agreements with the government and confessed to knowingly facilitating the importation, purchase, and sale of the mislabeled Chinese honey in order to avoid the U.S.-imposed antidumping duties.

The United States government had imposed antidumping duties on Chinese honey because they found that the honey was sold at such a low price as to interfere with the sale of domestically-produced honey.

To avoid the United States's antidumping duties, the honey distributors engaged in a massive conspiracy involving transshipping Chinese honey through other countries, disguising the honey's origin, and then illegally importing the Chinese honey into the United States in order to avoid paying the U.S. dumping duties.

Three domestic honey producers, Adee Honey Farms, Bill Rhodes Honey Company, LLC, and Hackenberg Apiaries, have now filed a class action complaint in the U.S. District Court for the Northern District of Illinois. In addition to the three named plaintiffs, the class action asserts claims on behalf of a nationwide class consisting of all individuals and entities "with commercial beekeeping operations (300 or more hives) that produced and sold honey in the United States during the period from 2001 to the present."

The lawsuit is building on the Honeygate investigation in its attempt to obtain compensation for the financial losses suffered by the domestic honey producers as a result of Groeb's and Honey Solutions's conduct. The class-action alleges that, by intentionally participating in the purchase, packaging, distributing, and sale of the Chinese honey, the two companies deceived consumers and purchasers.

The lawsuit alleges that consumers were deceived because the Chinese honey has allegedly been found to be "heavily adulterated, containing inexpensive sweeteners and sometimes blended with high fructose corn syrup and other additives, despite the fact that importers, in league with [Groeb and Honey Solutions], represent that it is pure honey."
James J. Pizzirusso one of the attorneys representing the domestic honey producers, states that the domestic honey industry, which is "critically important to agriculture, has suffered losses at the hands of these fraudulent suppliers."

Adam J. Levitt, another attorney for the plaintiffs, said "It is important that American beekeepers and honey producers get to play on a level playing field".

Continue reading "Honeygate Leads to Civil Anti-Dumping Suit Relating Chinese Honey Being Dumped into the U.S. Market" »

With the economy firmly stuck in a "jobless recovery", many students feel more pressure than ever to further their education in the hopes that it will make them more employable. Colleges likewise release and advertise the employment rate of their graduates to entice new students to enroll.

However, many students are finding that they are unable to get the jobs that they felt the colleges promised them. There are currently more than a dozen law schools facing class action lawsuits from students who were unable to attain employment in their field after graduation. Recently, six of those lawsuits have been dismissed by the courts, six have had their motions to dismiss rejected, and three have motions to dismiss which are still under review.
Included among the cases which have been allowed to move forward, is Harnish v. Widener University School of Law. The lawsuit alleges that the school publicized misleading and incomplete graduate employment rates in violation of New Jersey and Delaware consumer fraud acts.

Judge William H. Walls of the U.S. District Court for the District of New Jersey pointed to the broad nature of the New Jersey statute when he denied the defendants' motion to dismiss. The statute, he says, extends to purchases made for business purposes and does not require proof of reliance in order to be enforced.

Eight Widener University law school alumni who graduated between 2008 and 2011 comprise the plaintiffs in the class-action lawsuit. Initially, the court determined that the plaintiffs failed to assert any common law fraud causes of action. The plaintiffs then voluntarily dismissed their cause of action which alleged violation of Delaware's Deceptive Trade Practices Act.

The two remaining causes of action allege that Widener violated the New Jersey and Delaware consumer fraud acts. According to the lawsuit, Widener violated these laws by allegedly:
1) stating that approximately 90-95% of their graduates secured employment within nine months of graduation;
2) manipulating the employment data to make it seem as though the overwhelming majority of recent graduates secure full-time, permanent employment for which a J.D. is required or preferred;
3) distributing false post-graduate employment data and salary information to various third parties (such as the ABA and U.S. News and World Report);
4) making deceptive and misleading statements and omissions about Widener's reputation with potential employers, the value of a Widener degree, and the pace at which recent graduates can expect to obtain gainful employment in their field; and
5) making students pay inflated tuition based on these misleading statements and omissions.
The court agreed that, taking these allegations at face value, the plaintiffs have plausible claims under the consumer fraud acts.

The court concluded that the 90-95% employment rate posted on Widener's website was indeed allegedly misleading. Although the statement may have been technically true, Walls agreed that it was plausible for a law student to believe that the figures referred to law-related employment. In making this decision, Walls pointed out that the figures were posted in a class profile which was sandwiched between "judicial clerkships" and "full time legal employers".
Walls further stated that Widener's website aims to persuade students to obtain a law degree through their program and that the figures were sent to third-party evaluators to establish Widener's standing.

Without much further discussion, the court agreed that the plaintiffs had also pleaded enough information to withstand the motion to dismiss their cause of action under the Delaware consumer Fraud Act.

Continue reading "Motion to Dismiss Denied in Lawsuit Alleging Law Schools Deceive Applicants to Enroll" »

Amidst the many legal and financial troubles it has been facing lately, Apple can scratch one class-action lawsuit off the list. The class-action combined a number of lawsuits that had been filed in San Francisco against the company and dealt with Apple's warranty policy for its iPhone and iPod touch.

According to the lawsuit, Apple allegedly refused to repair or replace merchandise still under one- or two-year warranty if a piece of white tape inside the device had changed color. The tape was supposed to turn pink or red when it came into contact with water. Since said water contact is known to damage electronic devices, Apple customer service personnel were instructed not to repair devices with tape that had changed color.

However, the tape manufacturer, 3M, allegedly said that humidity could potentially turn the tape at least pink. The customer service manual also states that "If a customer disputes whether an iPod with an activated [Liquid Contact Indicator] has been damaged by liquid contact and there are no external signs of damage from corrosion, then the iPod may still be eligible for warranty service."

Although the tech giant admits no wrongdoing, it has agreed to settle the case for $53 million. This has the potential to affect hundreds of thousands of iPhone, iPhone 3G, and iPhone 3GS owners as well as customers who bought the first three generations of the iPod touch media player. Each member of the claim could get as much as $400 although, if there are enough people with claims, it could end up being less than half that much.

This is not the first time Apple has had to contend with complaints regarding its warranty policies. Recently, the CEO, Tim Cook, apologized to China after the state-run CCTV network and Chinese celebrities chastised the company on its replacement and repair policies in the more than 1 billion customer market.

The EU has also repeatedly castigated the firm over its warranty policies and Italy even threatened to close Apple's offices if a warranty concern wasn't addressed.

Continue reading "Apple Settles Breach of Warranty Class Action Over Alleged Misuse of Water Damage Claims" »

While Toyota's problems with unintended acceleration in their vehicles have garnered much media attention, Toyota is hardly the only car company to experience these problems. Audi experienced similar issues in the 1980's from which it took them a decade to recover in the American market. Honda, Jeep, Mercedez-Benz, Hyundai and Kia have all had reported issues over the years.

Most recently brought before the court with alleged unintended acceleration issues is Ford. In fact, according to the Transportation Department's inspector general, a 2011 report revealed that Ford actually had the same number of deaths and injuries from these acceleration issues as Toyota: 374 from 2003 through 2009. Ford alone received 22% of all of the complaints regarding unintended acceleration during that period. That's more than any other single car manufacturer.
The National Highway Traffic Safety Administration's (NHTSA's) data shows that complaints regarding Ford vehicles increased dramatically from 2005 to 2007. Injuries from acceleration issues peaked between 2004 and 2006.

A spokesperson for Ford though, has released a statement that the NHTSA has investigated many cases of alleged unintended acceleration over the years and has found that driver error is more commonly the cause of these accidents. They also stated that the NHTSA is much more "scientific and trustworthy than work done by personal injury lawyers and their paid experts".
The NHTSA also could not find evidence of electronic malfunctions in Toyota vehicles in a 2011 report it did with the National Aeronautics and Space Administration. Nevertheless, Toyota recently settled a class action lawsuit for $1.1 billion to put the matter to rest. Toyota, as well as BMW, Mercedez-Benz, Audi and Volkswagen, have all begun installing brake override systems into every vehicle they make. These brake override systems will stop the car when the brake and the gas petal are activated at the same time. Ford also began installing these "brake override accelerators" into its vehicles in 2010.

Despite the fact that the NHTSA concluded that most of the Toyota alleged acceleration issues in Toyota vehicles were due to driver error, the recall of nearly 10 million vehicles and the publicity as well as the congressional hearings, have prompted the NHTSA to propose a rule which would require all vehicles to have a brake override system.

The case recently filed against Ford was filed in the U.S. District Court for the Southern District of West Virginia and includes 20 Ford owners in 14 states. The case covers Ford vehicles made between 2002 and 2010 and alleges a "design defect" in the electronic control of the gas pedals which made the vehicles susceptible to sudden, unintended acceleration. The lawsuit alleges that the vehicles should have had a brake override system and is seeking damages for the reduced value of the vehicles.

Continue reading "Ford Sued in Class Action Claiming Unintended Acceleration" »

Amidst the many legal and financial troubles it has been facing lately, Apple can scratch one class-action lawsuit off the list. The class-action combined a number of lawsuits that had been filed in San Francisco against the company and dealt with Apple's warranty policy for its iPhone and iPod touch.

According to the lawsuit, Apple allegedly refused to repair or replace merchandise still under one- or two-year warranty if a piece of white tape inside the device had changed color. The tape was supposed to turn pink or red when it came into contact with water. Since said water contact is known to damage electronic devices, Apple customer service personnel were instructed not to repair devices with tape that had changed color.

However, the tape manufacturer, 3M, said that humidity could potentially turn the tape at least pink. The customer service manual also states that "If a customer disputes whether an iPod with an activated [Liquid Contact Indicator] has been damaged by liquid contact and there are no external signs of damage from corrosion, then the iPod may still be eligible for warranty service."

Although the tech giant admits no wrongdoing, it has agreed to settle the case for $53 million. This has the potential to affect hundreds of thousands of iPhone, iPhone 3G, and iPhone 3GS owners as well as customers who bought the first three generations of the iPod touch media player. Each member of the claim could get as much as $400 although, if there are enough people with claims, it could end up being less than half that much.
This is not the first time Apple has had to contend with complaints regarding its warranty policies. Recently, the CEO, Tim Cook, apologized to China after the state-run CCTV network and Chinese celebrities chastised the company on its replacement and repair policies in the more than 1 billion customer market.

The EU has also repeatedly castigated the firm over its warranty policies and Italy even threatened to close Apple's offices if a warranty concern wasn't addressed.

Continue reading "Apple Settles Breach of Warranty Class Action Over Allegedly False Claims that IPhones Weren't Covered by Warranty due to Water Damage" »

Many food and beverage companies are labeling their products "Natural", "100% Natural" or "All Natural" in order to attract more health-conscious consumers. Two such consumers are Lauren Ries and Serena Algozer. Ms. Ries claims she bought an "All Natural Green Tea" at a gas station because she was thirsty and looking for a healthy alternative to soda. Ms. Algozer claims she purchased several AriZona ice teas over the years, but neither plaintiff has a receipt for any of these purchases, nor can they remember the prices.

They filed a class-action lawsuit against AriZona Ice Tea in the U.S. District Court for the Northern District of California, alleging that the drinks contained ingredients such as high fructose corn syrup and citric acid. According to the lawsuit, these ingredients are man-made products rather than the natural flavorings they claim to be, thereby making the "natural" labels misleading.

AriZona Ice Tea though, was able to provide testimony from expert witnesses that said otherwise. Dr. Thomas Montville, for example, a Rutgers University food scientist, maintained that both these ingredients are natural substances. The beverage company was also able to provide declarations from their suppliers that both citric acid and high fructose corn syrup are natural ingredients.

The plaintiffs' attorneys on the other hand, were unable to produce a single expert witness in the three years of the case, which had been scheduled to go to trial on May 13, 2013. They also failed to respond to contentions that the plaintiffs failed to support their claims for restitution or disgorgement. They pointed to the fact that patents existed for the production of high fructose corn syrup, but the judge refused to take "judicial notice" of the fact. The judge was also unconvinced by the deposition of Don Vultaggio, the owner of Hornell Brewing Company, which supported the plaintiffs' claim that consumers are likely to be confused and misled by the "natural" labels on the ice tea containers.

The lawsuit sought restitution, disgorgement of profits, injunctive relief, and attorneys' fees. They claimed these under California laws such as the False Advertising Law, the Unfair Competition Law, and the Consumer Legal Remedies Act.

Judge Richard Seeborg had partially certified the class for the injunction against the "natural" label, but had refused to certify a class for restitution. Recently, Judge Seeborg found in favor of the defendants and granted summary judgment against the plaintiffs. According to his 13-page order, the plaintiffs "offer not a scintilla of evidence from which a finder of fact could determine the amount of restitution or disgorgement to which plaintiffs might be entitled if this case were to proceed to trial".

The judge also determined that the plaintiffs' counsel could not adequately represent the class and, on those grounds, granted the request to decertify the class.

Continue reading "Court Decertifies AriZona Ice Class Action Which Alleged All Natural Claims Were False" »

Although banks have not generally been looked upon favorably lately, U.S. District Judge Naomi Reice Buchwald decided to look favorably upon 16 banks seeking dismissal of antitrust allegations, racketeering, and state-law claims. The allegations come from leading suits which had been seeking class action certification and claimed that the banks broke federal antitrust laws by allegedly suppressing the London Interbank Offered Rate (otherwise known as Libor).
Libor is calculated on a daily basis for different currencies on estimated borrowing rates submitted by banks on panels. The lawsuits are targeting banks who sat on the panels used to work out US-dollar rates. Executives and traders at certain banks allegedly tried to manipulate Libor in order to increase trading profits or improve the banks' image.

However, Judge Buchwald says in her 161-page ruling that, because the Libor-setting process is a "cooperative endeavor" and was "never intended to be competitive" the banks would have had no motivation to intentionally put in false numbers. Therefore, any losses suffered by investors and other plaintiffs would have resulted from the banks' "misrepresentation, not harm from competition". With this being the case, the banks can not be charged with breaking federal antitrust laws.

Banks have already been hit hard by federal regulators. So far, Royal Bank of Scotland Group PLC (RBS) has agreed to pay $612 million to U.S. and British authorities. UBS AG agreed to pay $1.5 billion, and Barclays agreed to pay $453 million. About a dozen firms still remain under scrutiny, including Citigroup, Inc., Credit Suisse Group AG, Duetsche Bank AG, HSBC Holdings PLC, WestLB AG, and Royal Bank of Canada, among others.

Judge Buchwald acknowledged that, because of these settlements to federal agencies, her ruling may be "unexpected". She pointed out though that, unlike government agencies, private plaintiffs have many requirements to meet under the statutes to bring a case.
"Therefore, although we are fully cognizant of the settlements that several defendants here have entered into with government regulators, we find that only some of the claims that plaintiffs have asserted may properly proceed." Among the claims that she did not dismiss are the allegations of breaching commodities laws.

Michael Hausfeld, chairman of Hausfeld LLP, which is representing the city of Baltimore as a plaintiff in one of the largest Libor class-action suits, says that his clients will now have to decide if they want to file an amended suit or appeal the judge's ruling. Unless the plaintiffs successfully appeal the ruling, it will mean a significant reduction in the potential costs to the banks. The ruling is also likely to diminish the financial incentive for new plaintiffs to join the investors, cities, lenders, and other parties that have already filed suits.

Continue reading "Court Dismisses Libor Price Fixing Claims" »

Many people these days take for granted that nothing we do on the internet is private. However, most of us still expect our personal computers and smartphones to remain free from internet stalkers. A recent lawsuit against comScore however, has revealed that this is not always the case.

ComScore is a publicly traded company based in Reston, Virginia that collects internet user data. It monitors and measures what people do on the internet and turns that information into actionable data for its clients, which includes some of the largest e-commerce sites, online retailers, advertising agencies, and publishers. The company says that its more than 2,000 clients use the data for online marketing and targeted advertising.

ComScore uses the OSSProxy software. It is typically bundled with free software products such as screen savers and music sharing software and gets downloaded to the systems of end users that install them. It constantly collects and sends a wide range of data to comScore servers, including the names of every file on the computer, information entered into a web browser, and the contents of PDF files, among other things. ComScore insists that all of its data is stripped of all identifying information and personal data before it gets sold to clients.

However, a lawsuit filed in 2011 by two internet users, one from Illinois and the other from California, alleges that comScore violated the federal Stored Communication Act (SCA), the Electronic Privacy Communication Act (EPCA), and the Computer Fraud and Abuse Act (CFAA). The lawsuit alleges that comScore changed security settings and opened back doors on end-user systems, stole information from word processing documents, emails, and PDFs, redirected user traffic, and injected data collection code into browsers and instant messaging applications.

The lawsuit also alleges that the company secretly tracked and sold Social Security numbers, credit card numbers and passwords, along with other personal information.
In order to collect this data, comScore's software allegedly modifies computer firewall settings, redirects internet traffic, and can be upgraded and modified remotely. The lawsuit also alleges that, contrary to comScore's assertions, the company does not separate the personal information from the data it sells. The suit also alleges that comScore intercepts data that it has no business accessing.

Recently, District Judge James Holderman of the United States District Court for the Northern District of Illinois granted the two plaintiffs class action status. Any individual who downloaded and installed comScore's tracking software on their systems after 2005 now has a claim against the company. The judge also certified a subclass, consisting of members of the primary class who downloaded comScore's software during a specific time frame but were never provided a functional hyperlink to the user agreement, which describes how the software works.
Under the SCA and ECPA, each class member would be entitled to a maximum of $1,000 in statutory damages.

The judge denied certification of a third claim against comScore regarding unjust enrichment.

Continue reading "Chicago Federal Court Certifies Class Action Against comScore For Alleged Data Misappropriation" »

A highly anticipated Supreme Court ruling regarding class certification recently fell a little flat of expectations. While defense attorneys feared the Court's decision would make it easier for class-actions to attain certification using any evidence at the certification stage, plaintiffs attorneys feared the opposite. They were afraid of the Court going in the other direction and making it more difficult to use expert testimony to justify class certification. In the end the Court's ruling was so narrow as to justify none of the fears of the two sides.

The matter before the Court involved Comcast and a class action of Comcast table television subscribers who allege that Comcast "clustered" its operations in certain regions (including the Philadelphia area) by acquiring competitors' cable systems in those areas and then selling the competitors its own cable systems in other regions. This led to Comcast allegedly participating in four different means of stifling competition in its operating regions. One of these practices was using its dominant marketing position to deter others (called "overbuilders") from opening competing networks in its regions.

At the class certification stage, the plaintiffs presented evidence from an expert witness who used an econometrics model to show how much lower Comcast's prices would have been without its anticompetitive practices. However, this model showed only the effect of all four anticompetitive practices taken as a whole. The district court, on the other hand, said it would only certify a class of Comcast subscribers pursuing the overbuilder-deterrent theory of antitrust liability. While the district court recognized that the expert's model did not calculate the damages (if any) from that particular antitrust practices, it nonetheless decided that such an amount could be calculated on a class-wide basis and so decided to certify the class. It ruled that to delve further into the specifics of the plaintiffs' evidence would be to prematurely determine the merits of the case, a matter the court said is for the trial after the class has been certified. The Third Circuit Court agreed.

When the Supreme Court agreed to review the Third Circuit Court's ruling, it deviated from the normal proceedings and formulated the question it wanted the parties to address: "Whether a district court may certify a class action without resolving whether the plaintiff has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis." The parties then debated whether the opinions of the plaintiffs' expert witness were sufficient and whether they were even necessary to grant class certification.

The Supreme Court reversed the Third Circuit Court's ruling in a 5-4 decision. According to the Supreme Court, Rule 23 (on class certification) must be satisfied. Rule 23 requires sufficient evidence that the class can prove a claim of damages in order to acquire certification. The Supreme Court ruled that this requirement must be met, even if it involves delving into the merits of the case. According to the Supreme Court's decision, the district court's ruling to refuse to consider any of the merit's of the case "flatly contradicts" previous rulings on the matter by the Supreme Court, as well as Rule 23.

Despite the highly anticipated status of this ruling, it turned out to be rather disappointing as a narrow ruling, which applies to the unique context of this particular case. It is unlikely to affect most class action litigation.

Continue reading "Supreme Court Doesn't Require Expert's Opinion to Meet Daubert Standard in Determining Class Certification" »

With cancer being one of the biggest health scares in our country, it is frightening to think that something as seemingly innocent as a local park might be the cause of it. Whirlpool Park in Clyde, Ohio, so named because it was built by Whirlpool Corp. for its employees and their families, has been accused of being the cause of the numerous recent cancer cases which have led the Centers for Disease Control and Prevention to designate the eastern Sandusky County as a cancer cluster.

Tim Lagrou's wife was diagnosed with non-Hodgkin's lymphoma in 2005 and died in October 2006 at the age of 23, leaving Tim and their one-year-old son. Lagrou and two other families have now filed a $750 million class action lawsuit in Sandusky County Common Pleas Court against Whirlpool Corp., the original owner of the park, and Grist Mill Creek, the company which has owned the park since 2008. The lawsuit alleges negligence on the part of the two companies which allegedly handled, disposed, and concealed toxic waste.

The U.S. Environmental Protection Agency (EPA) tested soil in Whirlpool Park and found PCBs, carcinogenic toxins, buried under the basketball court and what used to be the tennis court.

The park closed in 2006 (the same year Lagrou's wife died) as interest in the park waned. It was bought by Jonathan and Robert Abdoo of Grist Mills Creek in 2008 with the intention of building on the site.

Thomas Bowlus, an attorney for Grist Mills Creek, said the Abdoos were first made aware of toxic materials on the site after the EPA launched its investigation in 2012. According to the lawsuit though, Grist Mills Creek either already knew, or should have known about the toxic chemicals. The lawsuit alleges that the company breached its duty of ordinary care to neighbors by permitting the toxic materials to remain in the park.

The class action includes people who visited or used the park between 1953 and 2008 and anyone who owns property within 4,000 feet of the park. Information from Whirlpool is needed to determine the exact number of potential class members but the plaintiffs believe there could be as many as 1,000.

The lawsuit is seeking $25,000 for the named plaintiffs (the Ohio state maximum for compensatory damages) and $750 million in punitive damages for the entire class. Joseph Albrechta, who represents the plaintiffs in the suit, said that the $750 million number "was thought about very carefully". According to Whirlpool's website, they make $19 billion annually in sales, meaning the $750 million would comprise just two weeks of sales for them. For the families however, that amount would go a long way in helping them restore the financial losses incurred by the park's toxicity.

The lawsuit is also seeking the instigation of a medical monitoring fund and a park cleanup fund.
Whirlpool has announced that it will further test the land in the spring.
At least 35 children within a 6.7 mile radius in eastern Sandusky County have been affected by cancer since 1996. Four of those children have died, although the Ohio EPA has been unable to determine a cause.

Continue reading "Whirlpool Sued in Class-Action Over Cancer Cluster -- Our Chicago Class Action Lawyers File Class Actions for Clients Throughout Illinois" »

Car manufacturers provide warranties for their vehicles, promising to pay for most repairs and replacements that the vehicle requires within a certain number of years of purchase of the car or up to a certain mileage. However, if enough cars experience failures of a particular variety after the warranty expires, the manufacturer could still find themselves in trouble.

Audi has found itself in that situation when a class-action lawsuit was filed against it on behalf of U.S.A. consumers who leased or bought a 2002-6 A4 or A6 model with a continuously variable transmission (CVT). The lawsuit, which was filed in January 2011, alleges that the CVTs had manufacturing and design flaws that caused them to fail and left owners with thousands of dollars in repair bills. The lawsuit also alleges that Audi knew about these flaws and intentionally concealed them from consumers.

In the preliminarily approved settlement, Audi denied the allegation that the CVTs were defective and insisted that it had "acted properly and in compliance with applicable laws and rules." However, they also said that the expense of extended litigation "may not be in the best interests of their consumers." Hence Audi's settlement offer.

The settlement includes reimbursement "for certain C.V.T. transmission repairs" that occurred or will occur within 10 years or 100,000 miles of the original sale or lease of the vehicle. The original warranty covered only four years or 50,000 miles. The owners will be reimbursed for the replacement of various parts, depending on which model year they had.
The transmission control module is covered for 2003, 2004, 2005 and 2006 model year A4s and A6s. The valve body is covered for 2003-4 model A4 and A6. Replacement of the transmission without the valve body and transmission control module "is covered for the 2002, 2003, or 2004 model year Audi A4 or A6." The settlement does not say whether it includes reimbursement of another transmission part or replacement of the entire transmission.

Some of the 2002 and 2003 models are probably beyond even the extended warranty by now, but the settlement will still reimburse the owners if the specified repair occurred within 100,000 miles or 10 years. The settlement further provides a "trade-in reimbursement cost" to make up for lost value of a 2002, 2003, or 2004 A4 or A6 that needed "a complete replacement of a C.V.T. transmission" after the normal warranty expired but the vehicle was sold or traded without repair.

The settlement does not specify whether owners in that group who had a major component fail, but did not need to replace the entire transmission, are eligible for reimbursement. It also did not indicate why the 2005-6 model year was not included in this part of the settlement.
The settlement, which covers about 64,000 Audi vehicles, was preliminarily approved on March 11 by Judge A. Howard Matz of the United States District Court for the Central District of California. The hearing for final approval has been scheduled for September.

Continue reading "Audi Settles Class Action Claims for Allegedly Defective Transmission" »

In class actions, the plaintiffs have long had the power to determine whether the case gets tried in state or federal court and they have most often chose to keep the cases in state courts. In 2005, Congress adopted the Class Action Fairness Act (CAFA) in order to limit the plaintiff's power in that decision. CAFA imposed restrictions on the kinds of cases which the plaintiff would be able to prevent from getting moved to the federal courts. Among those restrictions are if the proposed class consists of at least 100 members, minimal diversities exist between the parties, and the aggregate amount involved in the dispute is at least $5 million.
In Standard Fire Insurance Co. v. Knowles, the lead plaintiff promised not to ask for more than $5 million in damages on behalf of the absent class in order to prevent the case being moved to federal court. The issue reached the U.S. Supreme Court, which then rendered its first decision on CAFA.

In the case of Standard Fire Insurance Co. v. Knowles, it is universally acknowledged that the claims of the putative class add up to more than $5 million. However, the lead plaintiff promised that the class will not ask for more than $5 million, in order to get around CAFA's restrictions.

Although CAFA does not specifically prohibit artificially lowering the damages sought by a class action lawsuit in order to keep the case in the state courts, the Supreme Court still sided with the defendants. In its unanimous opinion, the Supreme Court reasons that, because the class had not yet been certified, the lead plaintiff was unable to make any promises regarding the value of the claims of the entire class. Until the class attains certification, the lead plaintiff can only make promises regarding the level of claims he, as an individual, seeks.
The Supreme Court pointed out that CAFA specifies that "to determine whether the matter in controversy exceeds the sum or value of $5,000,000," the "claims of the individual class members shall be aggregated."

The Supreme Court made sure to point out that it believed that this decision was in line with CAFA's primary objective of ensuring "Federal court consideration of interstate cases of national importance."

Continue reading "Supreme Court Interprets Class Action Fairness Act to Prevent Class Representative to Limit Damages for the Class to Below $5 Million to Keep Case Out of Federal Court" »

It is widely accepted that the Internet is not a safe place for private or confidential information. Yet, when sensitive information gets leaked, people look for someone to blame. In some instances, they are correct and can bring a privacy claim especially when they can show direct injury due to the privacy breach. In other instances where they suffer no injury they have no claim.

In June of 2012, LinkedIn experienced a security breach and the passwords of 6.5 million users were posted online. A few days later, two premium LinkedIn users, Katie Szpyrka and Khalilah Wright, filed a class-action lawsuit against LinkedIn on behalf of all users.

The lawsuit alleged that LinkedIn had failed to store passwords in salted SHA1 hashed format. According to the lawsuit, this is basic industry standard security practice and, by failing to adhere to them, LinkedIn had failed to abide by its Privacy Policy.

What the Privacy Policy actually states is:
"In order to help secure your personal information, access to your data on LinkedIn is password-protected, and sensitive data (such as credit card information) is protected by SSL encryption when it is exchanged between your web browser and the LinkedIn website. To protect any data you store on our servers, LinkedIn also regularly audits its system for possible vulnerabilities and attacks, and we use a tierone secured-access data center.

"However, since the internet is not a 100% secure environment, we cannot ensure or warrant the security of any information you transmit to LinkedIn. There is no guarantee that information may not be accessed, disclosed, altered, or destroyed by breach of any of our physical, technical, or managerial safeguards.

"It is your responsibility to protect the security of your login information. Please note that emails, instant messaging, and similar means of communication with other Users of LinkedIn are not encrypted, and we strongly advise you not to communicate any confidential information through these means."

LinkedIn's Privacy Policy does not promise industry standard security practices and, in fact, warns the user that, despite their efforts, breaches can occur. In court, the plaintiffs admitted that they had not even read the Privacy Policy, which no doubt weakened their argument.
The lawsuit also filed for damages based on the allegation that the premium users had paid LinkedIn in order to access the premium membership status of the social networking site. The plaintiffs expected this to include enhanced security measures but the premium membership offers no such thing. Rather, it merely offered more advanced tools and usage of LinkedIn's services. Heightened security measures were never offered as part of the premium membership and, as such, the plaintiffs could not prove that they received any financial harm or injury.
The plaintiffs also failed to prove that the injuries they suffered as a result of the breach were "concrete and particularized" or "actual and imminent". No one stole their identities or got into their accounts and, on these grounds, the judge dismissed the lawsuit.

Continue reading "Class Action Lawsuit Against LinkedIn for Privacy Breach Dismissed" »

Facebook has long been an issue in the domain of free speech. People post whatever they want in view of the whole world. This time, an attorney was ordered by a judge to stop posting information about a case on his Facebook page even though he was addressing important public concerns regarding what he perceived to be an unfair class action settlement. This type of issue of public concern should receive the highest First Amendment Protection. Judges like any other public official should not be free to squelch criticism just because they don’t like it and believe it is inaccurate. Vigorous debate on issues of public concern in a community should be encouraged.

The case involves two McDonald's locations in Detroit which serve McChicken sandwiches and Chicken McNuggets which are advertised as being halal. Halal is a form of preparing food in order to meet Islamic requirements. It includes invoking God's name before slaughtering an animal which is to provide meat for consumption.

Two McDonald's locations (13158 Ford Road and 14860 Michigan Ave.) are believed to be the only two McDonald's locations to serve halal chicken. According to the suit, McDonald's served non-halal chicken when it ran out of halal and failed to tell this to their customers. The class-action lawsuit, filed by Ahmed Ahmed of Dearborn Heights, includes anyone who ate non-halal chicken at one of the two McDonald's locations since September 2005. The defendants are McDonald's and franchise owner Finley's Management Co.

On January 18, Wayne County Circuit Court Judge Kathleen Macdonald approved a settlement where McDonald's and Finley must pay $700,000 to settle the suit. Ahmed was to receive about $20,000; the Health Unit on Davison Ave. in Detroit, also known as HUDA, was to get around $274,000; the Arab National Museum in Dearborn was to get about $150,000; and the attorneys were to get around $230,000.

Majed Moughni, an attorney who was not involved in the case before the settlement, posted on the Dearborn Area Community members Facebook page, which he runs, that he believed it was unfair that most of the money would go to those who ate the non-halal chicken. He asked for page members who had eaten the haram (or forbidden) chicken to leave contact information for themselves as well as for others who had eaten the meat
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Kassem Dakhlallah, Ahmed's lead attorney, filed a motion for injunctive relief against Moughni. Judge Macdonald ruled in Dakhlallah's favor and order Moughni to remove information about the case from the Facebook page and to put her original class settlement and order against him on the page, which he did. She also forbade him to discuss the case with class members or the media without written permission from her and Jaafar & Mahdi Law Group, the firm representing Ahmed.

Moughni filed a motion to overturn the judge's ruling against him, which she dismissed.
Paul Alan Levy of the Public Citizen's Litigation Group of Washington D.C. filed a motion on behalf of Moughni to lift the order against him. They claimed that he was not acting as an attorney, but merely soliciting feedback and that his First Amendment rights had been violated.
Although the allegation that Moughni was soliciting clients through his Facebook page was never an issue when initially seeking the injunction, McDonald's used it as a reason for the injunction to remain, as well as allegations that the comments about the case which he posted on the Facebook page were misleading.

Levy argued that Moughni was not soliciting clients, but merely speaking as a concerned member of the community. He pointed out that there was no evidence that Moughni looked to be paid for gathering the feedback, but was merely rallying the community against what he perceived to be an injustice.

Judge Macdonald said that Moughni can't separate the fact that he's an attorney but she did agree to dissolve the injunction and extend the settlement period. She said that Moughni can continue to identify himself as a class member, but not an attorney in the case.
While McDonald's agreed to the removal of the injunction (having been satisfied that Moughni was not, in fact, soliciting new clients) they claimed that his misleading statements about the settlement were cause for reopening negotiations.

Levy is concerned however, that the fight may not yet be over. McDonald's has been complaining about the added cost of reopening the settlement period. They estimate that around $30,000 will be lost from the Arab National Museum's portion of the settlement, money which could finance ten scholarships through the charity. Levy worries that McDonald's may be leveraging to sue Moughni for damages after the current case has settled.
This may not be the smartest move for McDonald's, though. While Moughni's comments might have gone largely unnoticed if left alone, McDonald's has given the issue light by filing for the injunction. In the end, the company's image may be damaged by flaunting their dirty laundry and airing the fact that they are trying to preclude a member of the community from someone speaking out against a settlement that gives money to charity but not to the damaged class members. Judges should not be shutting down valuable speech rights. There has been a long tradition in this country that the First Amendment precludes public officials including judges from silencing criticism they don’t like. It is particularly troublesome that the Court attempted to shut off criticism on a matter of public interest. Moughni should have been permitted to freely voice his criticism of the settlement. That could never have interfered with the Court rendering a fair decision to approve or disapprove the settlement. Having already preliminarily approved the settlement, the Court appears to have had an interest in having its ruling upheld and let that concern over ride the public’s right to vigorously debate the settlement and even make material errors in that debate. The remedy to cure any false or erroneous statements in the debate is more rather than less speech.

The settlement period has been extended for another 28 days, which all sides agree with.

Continue reading "Prior Restraint on Lawyer's Free Speech Right to Criticize Class Action Settlement Lifted But For the Wrong Reasons" »

After the U.S. Supreme Court's controversial decision in Concepcion, there has been much debate over the rising tendency of companies to forbid their customers from bringing class actions against them. Another company has recently won another round. Charles Schwab Corp. modified their account agreements last year, prohibiting class-action lawsuits and restricting the ability of consumers to consolidate arbitration cases. This decision came after settlements of class-action lawsuits in which Schwab agreed to pay $235 million for misleading marketing of its high-interest YieldPlus money market fund between May 2006 and March 2008.
The Financial Industry Regulatory Authority's (FINRA's) enforcement department charged Schwab with violating its rules by restricting consumers' class-action and arbitration rights. The FINRA hearing panel agreed that it was against the rules of the private group, which regulates broker-dealers and administers arbitration panels. However, due to the Supreme Court's recent interpretation of the Federal Arbitration Act, the panel found that those rules are unenforceable.
While FINRA does not actually make or enforce the law, it can tell broker-dealers that, if they want to remain members, they have to abide by its "fair-play" rules. The Securities and Exchange Commission requires all broker-dealers to be members and all brokers who sell securities to be licensed by FINRA.

Of the three actions FINRA brought against Schwab, it did win won. The hearing panel decided that Schwab had violated FINRA's rules by limiting the powers of arbitrators to consolidate individual client claims in hearings and fined Schwab $500,000 for the violation. It also ordered the company to remove that condition from its customer agreements. A spokesman for Schwab said the language has already been removed.

A FINRA spokeswoman said it is currently reviewing the decision and cannot yet comment on whether they will appeal to the National Adjudicatory Council. Plaintiffs lawyers though, have speculated that an appeal is almost certain.

Schwab has said in a statement that it is pleased with the decision. "The company believes that customers are better served through the existing FINRA arbitration process and that class-action lawsuits are a cumbersome and less effective means of resolving disputes - for both parties."

Officials in the securities industry anticipate that more firms will try to revise their customer agreements after this decision.

While some have called this a significant step backwards for customers, others are not so sure. While the ruling does threaten most securities class-actions, the panel does not make the law and so this decision is unlikely to affect far-reaching law.

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Video News Report: Class Action Lawsuits Filed Against Johns Hopkins Hospital Due to Doctor Secretly Video Taping Examinations

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Since the United States Supreme Court's ruling on AT&T Mobility v. Concepcion, many consumers across the nation have found it difficult to enforce their right to litigation. The Supreme Court maintained that, since arbitration is a superior means of solving disputes, the arbitration clauses many companies are adding to their consumer contracts are enforceable.
Many consumers disagree. The arbitration clauses which more and more companies are adding to their consumer contracts require consumers to give up their right to litigation. Instead, any dispute must be handled in arbitration. This is unfair to consumers as it prevents class actions, thereby severely decreasing the damages that can be awarded and making it less likely that many consumers who suffered only a small financial loss will pursue their grievance at all. Arbitrations are also handled by a company hired by the defendant, often making it more difficult for prosecuting consumers to get a fair hearing. We stongly advise consumers not sign arbitration agreements when making large purchases for items such as for cars or RVs. In those types of cases consumers have the leverage to say no to arbitration.

Many judges have found their hands tied by this Supreme Court decision and forced consumers into arbitration with the companies with which they signed a contract. The Washington State Supreme Court, on the other hand, has recently ruled in favor of the consumer in Gandee v. LDL Freedom Enterprises Inc. In the first such case to reach the Washington Supreme Court since the Concepcion decision, the Court affirmed the Pierce County Superior Court's ruling which denied the Defendant's motion to compel arbitration.

In this case, the defendant, a debt adjusters company, had provided a contract with an arbitration clause which went further than merely requiring arbitration. It also required said arbitration to be handled in Orange County, California, rather than the consumers' home state of Washington; drastically shortened the consumers' statute of limitations from the normal 4 years to a mere 30 days; and threatened that, if the consumers sued and lost, they would be responsible for all of the Defendant's attorneys fees and legal costs.

The Gandees challenged the arbitration clause, saying that it is unconscionable and unenforceable under Washington contract law. The trial court agreed and the Defendants appealed the decision, putting the case before the Washington Supreme Court, which agreed with the trial court.

The Court held that the terms of the arbitration clause were grossly one-sided and existed to discourage potential claimants from accessing their rights due to the heavy cost burden imposed by the clause. While this may seem to fly in the face of the United States Supreme Court Concepcion decision, the Washington Supreme Court does not seem to think so. The opinion reads, "Concepcion provides no basis for preempting our relevant case law nor does it require the enforcement of Freedom's arbitration clause."

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