Articles Posted in Class-Action

While the government was quick to hand out Business Interruption Grants to businesses across the country struggling from the effects of the pandemic-induced shutdown, company’s applying for the grant did have to meet certain criteria. The companies needed to be able to prove they had been financially impacted by COVID-19, and that they would use the money from the grants for necessary business expenses, such as payroll. What was less widely discussed was the fact that recipients of grants also needed to abide by all city, state, and federal labor laws applicable to their business, something Tank Noodle allegedly failed to do.

The Vietnamese restaurant was asked to return the grant money it received after federal investigators found they were in violation of several labor laws, including allegedly withholding wages from their employees. Tank Noodle also received two loans from the Payment Protection Program totaling almost $400,000, although it is not yet clear whether they will be made to pay back that money in addition to the grant money they received.

Poor working conditions for very little pay is a systemic and long-standing problem throughout the restaurant industry, and it’s not limited to fast-food restaurants. High-end restaurants are equally likely to ignore labor laws, and white employees are just as often subject to very low pay as their minority coworkers (although white servers do tend to receive larger tips).

In the summer of 2020, amidst the nationwide social unrest and calls for racial justice, several Chicago restaurants were accused of abusing their staff, including allegations of racism. Some of those restaurants were forced to permanently shut down as a result of the accusations, but Tank Noodle managed to keep its kitchen open.

Tank Noodle, a Vietnamese restaurant located in the Uptown neighborhood of Chicago, hired a Vietnamese server in 2018, explaining the server could start right away, but that the only pay they would receive would be in tips. The server took the job because they needed the money, not realizing how low the pay would be or the lack of transparency at the restaurant when it came to tips. Continue reading ›

A truck manufacturer was agreed to a settlement after it was sued for selling trucks with defective engines. Two members of the litigation class had filed separate suits against the company in state court. After the settlement was finalized, the manufacturer sought to have those suits dismissed. The plaintiffs attempted to intervene in the court where the settlement was approved, seeking to opt-out of the terms of the settlement. The district court refused and the plaintiffs appealed. The appellate panel affirmed the decision of the district court. The panel found that the plaintiffs had not shown that their decision to refrain from timely objecting to the settlement was an excusable one. The panel determined that the plaintiffs were attempting to obtain the benefit of both the settlement and their separate litigation, as a way of receiving whichever of the judgments was larger. The panel found that the district court did not abuse its discretion in binding the plaintiffs to the terms of the settlement.

A class of owners accused Navistar of selling trucks with defective engines. The suit was settled for $135 million. In June 2019, the district court gave the settlement its preliminary approval. Before the approval could become final, the court had to notify class members of their right to opt out, and it needed to consider any substantive objections by class members who elected to be bound by the settlement. In August 2019 such a notice was sent to all class members. The court held a fairness hearing in November 2019 and rejected some objections to the settlement. In January 2020 the court entered a final judgment implementing the settlement. Continue reading ›

Fleas and ticks can carry Lyme disease, making them dangerous, and even potentially fatal, to us all, but especially to dogs who spend a lot of time outside and in whose fur fleas and ticks like to burrow. But when it comes to a certain flea and tick collar, could the protection against fleas and ticks be worse than the dangers posed by the bugs themselves?

Elanco Animal Health is an Indiana-based pharmaceutical company that makes medications and vaccines for animals, including Seresto flea and tick collars. After almost 1,700 incidents of pet deaths and about 900 humans harmed, all of which were reported as having been linked to the Seresto flea and tick collars, Elanco is now facing a class action lawsuit filed by consumers who allege their dogs were either harmed or killed by the collars, as well as a congressional investigation. Continue reading ›

Insurance company State Farm is breathing a little easier after a Cook County judge recently dismissed a putative class action lawsuit filed against the insurer by the owner of an Evanston restaurant over the insurer’s denial of loss of income claims. In the complaint, the restaurant alleged that it and other restaurants suffered hundreds of thousands of dollars in lost income, resulting from state-ordered closures in response to COVID-19. The restaurant alleges that it filed a business interruption claim with State Farm who denied coverage.

Following denial of the claim, the restaurant filed suit against the insurer. In response, State Farm asked the court to dismiss the claims against it. In arguing for dismissal, State Farm asserted two arguments. First, it argued that an “accidental direct physical loss” to the covered property, required for coverage, had not occurred. Second, it argued that coverage was excluded by the “Fungi, Virus or Bacteria” Exclusion to the plaintiff’s policy, which excluded from coverage losses due to “[v]irus, bacteria or other microorganism that induces or is capable of inducing physical distress, illness or disease.”

In arguing that the physical loss trigger to coverage had not been met, State Farm relied on the 2001 Illinois Supreme Court’s opinion in Travelers Insurance Co. v. Eljer Manufacturing Inc. that a “physical” loss must include alterations in “appearance, shape, color or in other material dimension.” As a result, State Farm contended, economic losses from COVID-19 are legally distinct from physical losses and not covered by the plaintiff’s policy. In other words, simply being deprived of physical access to a restaurant building is insufficient to trigger coverage, even if the closure was by order of the Governor. Continue reading ›

As we have previously written about here, here, and here, the Illinois Biometric Information Privacy Act (BIPA) has generated some high profile litigation in recent years. The Illinois Supreme Court’s last opportunity to consider one of the country’s most protective laws concerning biometric data came in 2019 in its decision in Rosenbach v. Six Flags Entertainment Corporation, which we wrote about here. Recently, the Illinois Supreme Court has granted permission to appeal another potentially impactful decision interpreting BIPA.

BIPA was enacted in 2008 to help regulate the collection, use, safeguarding, handling, storage, retention, and destruction of biometric identifiers and information. The BIPA defines “biometric identifier” as “a retina or iris scan, fingerprint, voiceprint, or scan of hand or face geometry.” It defines “biometric information” as “any information, regardless of how it is captured, converted, stored, or shared, based on an individual’s biometric identifier used to identify an individual.” The BIPA provides for fines of $1,000 to $5,000 for each violation.

On January 27, 2021, the Illinois Supreme Court granted leave to appeal the Illinois Court of Appeals for the First District’s recent decision in McDonald v. Symphony Bronzeville Park LLC, 2020 IL App (1st) 192398. The McDonald case considered the very specific, yet important, issue of whether the exclusivity provisions of the Illinois Workers’ Compensation Act preempted claims statutory damages under BIPA. In its decision, the First District ruled that the Illinois Workers’ Compensation Act, and specifically its exclusive remedy provisions do not bar claims for statutory damages under BIPA. Continue reading ›

An AI company harvested publicly available photographs from social media sites across the internet and then used those photographs to derive a biometric facial scan of each individual in the photograph. The company sold this database to law enforcement agencies to use in identifying persons of interest or unknown individuals. A woman sued in a class action, arguing that the harvesting of biometric data violated Illinois’ Biometric Information Privacy Act. The company removed the case to federal court, and the federal court ruled that the plaintiffs’ claims lacked standing under Article III. The appellate court agreed with the district court and affirmed, ordering that the case be remanded to state court.

Clearview AI is in the business of facial recognition tools. Users may download an application that gives them access to Clearview’s database. The database is built from a proprietary algorithm that scrapes pictures from social media sites such as Facebook, Twitter, Instagram, LinkedIn, and Venmo. The materials that it uses are all publicly available. Clearview’s software harvests from each scraped photograph the biometric facial scan and associated metadata, which it stores in its database. The database currently contains billions of entries.

Many of Clearview’s clients are law enforcement agencies. The clients primarily use the database to find out more about a person in a photograph, such as to identify an unknown person or confirm the identity of a person of interest. Users upload photographs to Clearview’s app, and Clearview creates a digital facial scan of the person in the photograph and then compares the new facial scan to those in its database. If the program finds a match, it returns a geotagged photograph to the user and informs the user of the source social-media site for the photograph.

In the wake of a New York Times article profiling Clearview, Melissa Thornley filed suit in Illinois state court under the Illinois Biometric Information Privacy Act (BIPA). BIPA provides robust protections for the biometric information of Illinois residents. Thornley’s complaint, filed on behalf of herself and a class, asserted violations of three subsections of BIPA. Clearview removed the case to federal court. Shortly after removal, Thornley voluntarily dismissed the action. Thornley then returned to the Circuit Court of Cook County in May 2020 with a new, significantly narrowed, action against Clearview. The new action alleged only a single violation of BIPA and defined a more modest class. Continue reading ›

Many people have become wary of online forms asking for personal information since many of them prove to be opportunities for dishonest people and institutions to use and share that information for their own purposes. But there are institutions most of us assume to be trustworthy, and for most people, that would include the College Board, the same institution that develops and administers the SAT and ACT exams. According to a new lawsuit, the College Board allegedly collected and sold students’ personal information, including their names, addresses, gender, ethnicity, grades, and citizenship status.

According to a new lawsuit, which has been filed on behalf of the parent of a student of Chicago Public Schools, the College Board allegedly collected this information using a Student Search Survey. The College Board denies having done anything wrong, saying that the survey was optional and free for students to fill out. Legislators say the College Board did ask for students’ consent to distribute their information to colleges, universities, and scholarship providers, but did not mention that the information would be sold to those third parties – that the College Board was profiting off students’ personal information.

The lawsuit alleges that the College Board collected between 42¢ and 47¢ for each student name they sold to other organizations.

The lawsuit further alleges that, after obtaining students’ personal information, the College Board offered the students’ identifying information (including their names and addresses) for sale to third parties in order to promote Student Search Service, the survey they used to collect students’ information. Continue reading ›

MG_6325_1-300x200The FTC sued a student loan debt relief company that promised consumers that it would reduce their monthly student loan payments, or arrange for their student debts to be forgiven in whole or part by their student loan servicers. Instead, the company kept most of the money sent to them by the consumers and failed to negotiate with the servicers or remit the payments in a timely fashion. The district court granted summary judgment to the FTC and issued a permanent injunction against the defendants, as well as a monetary judgment for more than $27 million in restitution.

The United States District Court for the Central District of California granted summary judgment to the Federal Trade Commission in a suit filed against Elegant Solutions, Inc. The FTC filed a complaint against Elegant Solutions for a permanent injunction and other equitable relief pursuant to § 13(b) and 19 of the Federal Trade Commission Act and 57(b) of the Telemarketing and Consumer Fraud and Abuse Prevention Act.

The FTC’s complaint charged that the defendants participated in acts or practices that violated § 5(a) of the FTC Act by representing in advertising that consumers who purchased the defendants’ debt relief services would be enrolled in a repayment plan that would reduce their monthly payments on their student loans to a lower, specific amount, or have their student loan balances forgiven in whole or part; that most or all of the consumers’ monthly payments to the defendants would be applied toward consumers’ student loans; and that the defendants would assume responsibility for the servicing of consumers’ student loans. The district court found that, in numerous instances in which the defendants made such representations, they were false or not substantiated. The panel determined that these representations constituted a deceptive act or practice in violation of § 5(a) of the FTC Act. Continue reading ›

Hudson’s Bay (HBC), the Canadian retail company that owns Saks, among other high-end stores, has been sued by lenders who claim the reorganization of the company that happened earlier this year was conducted in an attempt to set up a secret corporate shell game that has robbed the credit that exists as insurance on the $850 million loan the plaintiffs have invested in the company.

The lawsuit centers around the fact that, as the owner of stores like Saks and Lord & Taylor, HBC was responsible for guaranteeing payment on all loans for the stores, including making sure the rent was paid if the stores themselves were in financial distress or unable to make rent for any other reason.

Earlier this year, HBC formed a new Bermuda corporation, which is owned by shareholders with a controlling interest in HBC, as well as executives at the highest levels of HBC’s corporate hierarchy. According to the plaintiff, Situs Holdings, this transfer of assets is not only improper but also violates the loan agreement and puts at risk the company’s ability to repay the loan.

HBC denies all the allegations, claiming the restructuring amounted to little more than a change in name and some paper shuffling. It also alleges that Situs never had any claim on the assets of HBC that were reassigned in the course of the restructuring process. The Canadian retail company insists that Situs’s reaction to the restructuring is far beyond what the restructuring actually accomplishes and that the plaintiff’s claims that HBC allegedly conducted this restructuring in secret, deliberately keeping it concealed from Situs, are likewise false. Continue reading ›

Last year we witnessed the filing of a first of its kind putative class-action lawsuit claiming that gift cards that did not contain Braille violated the Americans with Disabilities Act (ADA) along with similar state and local laws. Within weeks, more than 240 nearly identical complaints had been filed against a multitude of retailers and restaurant chains in New York. Recently, a federal judge issued the first opinions in these gift card cases dismissing the plaintiffs’ claims. While the court granted the plaintiffs the ability to amend their complaints, it is unclear how they will be able to successfully retool the complaints given that the opinions soundly rejected the plaintiffs’ theories of liability.

The court’s first opinion came in a case captioned Dominguez v. Banana Republic LLC. In the following days, the same judge released similar opinions dismissing six additional Braille gift card lawsuits before him on the same grounds. The factual circumstances in the seven cases are similar. In each case, the plaintiffs alleged that they called the defendant and asked whether the defendant’s gift cards contained the information printed on the cards in Braille. After the defendant responded that the gift cards did not contain Braille, the plaintiffs filed suit alleging violations of the ADA and various state and local laws. Each case was filed as a putative class action on behalf of the named plaintiff and a nationwide class of similarly situated blind individuals. Continue reading ›

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