Articles Posted in Class-Action

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It was only a matter of time that a backlash would occur against one of the largest social media networks.  This time, it was because of breach of trust issues.  It was the Presidential campaign of Donald Trump that saw the retention of private data of 50 million Facebook users, despite their attempts at claiming to have deleted it. The most recent case has been filed in Cook County, Illinois.  That claim included allegations similar to the other pending lawsuits against Facebook that will be tried in the federal court.  In the complaint, an argument is made that Facebook, Cambridge Analytica, and its corporate parent, SCL Group, violated users’ privacy when they violated Illinois laws against fraud.  In their response, Mark Zuckerburg and other Facebook executives called their actions a “breach of trust.”

The public at large was concerned about the mass data collection encouraged by Facebook, which assisted developers to build on the platform and provide greater insight into market manipulation and user behavior.  It was clearly written in the complaint that, “Facebook is not a social media company; it is the largest data-mining operation in existence.”  On top of that, Cook County is the second-largest county in the USA, behind Los Angeles County.  For that reason, from an international perspective, the case also has the ability to garner a high level of interest. It must be noted that this suit is not the first of technology-based lawsuits when it comes to privacy.

The fact of the matter is simply this: knowledge of your data can make millions, and this is exactly what Facebook did.  Users of Facebook feel violated enough to go ahead and file suit.  Members whose information was collected by Cambridge Analytica, the same firm that worked closely with the Trump campaign.  Facebook had known about the security breaches and did nothing to protect its users is what is alleged in the complaint.  Users also have a higher risk of identity theft as a result.  At the very least, Facebook acted negligently. Moreover, it is not just members of Facebook that are filing.  Investors have also come on board, in the making of “misleading statements” and they failed to disclose details about party access to data which is the reason why Facebook stocks have fallen. The officers of Facebook owed a fiduciary duty to investors to deal truthfully and honestly with them.   Because of the global reach, it is likely that more venues and jurisdictions will be involved.  Out of all, the most direct liability is against Cambridge Analytica.  They have violated city, state and Federal laws. The reputation of both companies is at stake as well. Continue reading ›

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Would you buy makeup that had been opened and used by someone else?

According to a recent class action consumer lawsuit, that’s allegedly what Ulta Beauty, a multi-million-dollar cosmetics company, has been doing. When people return cosmetics to the company for a refund, for any reason, store employees were allegedly instructed by managers to repackage and re-seal the returned items, then put them back on the shelves to be resold.

The allegations started with a Twitter user who claims to be a former employee of Ulta. According to a series of tweets she posted, the alleged practice of repackaging and re-sealing used products extended to all the company’s products, from makeup to fragrance to haircare tools. After she posted these accusations, other Twitter users, also claiming to have worked for Ulta, jumped to back up her claims, while others rejected them.

While the social media storm was no doubt a PR nightmare for Ulta, the Bolingbrook-based company now has a bigger problem on its hands: a consumer class action lawsuit seeking to represent anyone who has ever purchased products from Ulta. The lawsuit was filed in federal court in Chicago by Kimberley Laura Smith-Brown, who lives in Los Angeles and says she has bought dozens of Ulta products over the past six months, including eyeliner and lip balm.

While the complaint acknowledges that using cosmetics that have been opened and used by someone else is unsanitary, the lawsuit is more concerned with Ulta’s unjust enrichment as a result of this business practice. Aside from allegedly gaining the additional funds from selling the same products twice, the lawsuit also wants to sue Ulta for allegedly deceiving customers about the quality of the cosmetics they were buying. If Ulta’s products really were second hand, then they shouldn’t be charging full price for them, according to the lawsuit. Continue reading ›

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The constitutional basis on which pharmaceutical legislation has been enacted is being challenged.  Many Pharmaceutical Manufacturing companies are afraid that this new law has the capability of dictating health care policies when it comes to the governing of prices at which drugs can be sold. The complaint as filed has indicated that the sole determinant of price fixing should be manufacturers only, the inclusion of other entities reduces competition.  To them, it is believed that prices can be thwarted as a result.

Other core belief systems are challenged including what lies in the public interest of the health forum and increases the scope for debate on the matter.  Should having affordable access to medicine matter or does competition and profit for companies that gain matter? Whether public policy overrides or the victimization of the pharmaceutical companies will be seen.

The pharmaceutical company believed it was in its best interest to sue so that the legislationn is not enacted in other states. California is considered a state that is of high influence and for such reasons, a national trade group that represents 37 drug companies tried to defeat the bill.This same trade group for drugmakers cited concerns within its lawsuit that California’s law illegally tries to dictate national health policy. It further went to indicate that because the law is tied to a national measure of drug prices, advance notification requirement could restrict drugmakers’ ability to raise prices in other states. In what seems an otherwise futile attempt to sue, the main rationale behind the suit is also to ensure that the implementation does not become as at the national level, thereby reducing profit margin for such companies.  The law requires pharmaceutical companies to notify insurers and government health plans at least 60 days before a planned price increase of more than 16 percent during a two-year period and to explain the rationale for the increase. The information would be available on a government website. Continue reading ›

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The war for data rages on as companies continue to mine their customers’ data and their customers continue to sue them for it.

The latest data-related lawsuit was filed last month against Casper, a direct-to-consumer startup that makes and delivers mattresses, on behalf of visitors to its website. According to the class action lawsuit, Casper used a software company called NaviStone (which is also listed as a defendant in the lawsuit) to collect personal information from visitors to the Casper website, including the visitor’s name, address, IP address, and their online shopping habits, including keystrokes and mouse clicks.

The lawsuit alleges NaviStone’s code (which Casper uses on its website) begins transmitting information about the individual as soon as they load the Casper website onto their browser, without the individual’s knowledge or consent. That meant information that visitors put into forms on Casper’s website went directly to the company, regardless of whether the person ever finished filling out the form or hit the “Submit” button.

The lawsuit alleges the violation amounts to wiretapping and is suing both companies under the federal Wiretap Act and the Electronic Communications Privacy Act. Continue reading ›

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Although most board members of publicly traded companies are paid an annual salary, plus a bonus based on performance (usually in the form of company stock), being on the board of a company or organization tends to be a part-time job and most members have day jobs in addition to their position on the board.

But because board members bear a fiduciary responsibility to look after the financial interests of the company’s investors, they have to be very careful where they get the rest of their income. Accept some money or do a favor for someone from the wrong company, and you raise suspicions that you might have a conflict of interests.

Alan Kahn, an investor in United Flexible, Inc., an aerospace parts manufacturer and an affiliate of Arlington Capital Partners, filed a lawsuit in Delaware against two of Kreisler Manufacturing Corp.’s board members for allegedly conducting a merger in bad faith. According to the lawsuit, the two board members, Edward Stern and his brother Michael, received side deals from Arlington just before the board decided to drop its asking price for the company.

The lawsuit further alleges board members deliberately failed to disclose important information from shareholders regarding the merger. As evidence, Kahn’s complaint points to the fact that the board members refused to make copies of the merger agreement, requiring instead that all shareholders who wanted any information about the details about the agreement needed to be willing to fly to Philadelphia to see a physical copy of the contract. Continue reading ›

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Bitcoin has been all the talk by way of investors and the question arose this week when prices dropped as to the legality of a Bitcoin exchange shutting down when prices were falling. It is alleged that trade halts were made for a period of two hours.  The price drop was rather substantial from $20,000 to $11,000.  It is said that the outage was for reason of technical difficulties and not intended to rescue the currency from free-falling, as the legality of doing that would be questionable. In fact,  it is illegal for trading to be put to halt without following the Securities and Exchange Commission’s guidelines. Foreign currency exchanges are less regulated, and the for such reasons there are increased risks for loss, malfunctioning trading systems, and fraud.

Some even speculate that Bitcoin exchanges may stop completely if much fraud, technical difficulty, glitches or hackers and/or malware become common.  Legal precedent set in this area of law is rare, though civil litigation in this area has started.  The stoppage has certainly started lawsuits claiming damages. Mt. Gox, a bitcoin exchange in Tokyo, collapsed after it halted withdrawals and eventually conceded that its holdings, worth approximately $65 million at the time, had been stolen by hackers.

The site also came under great scrutiny for possible “insider trading” among its employees before the site started to support Bitcoin Cash, a fork of the Bitcoin project. CEO Brian Armstrong pledged that the company will investigate those allegations internally.

In a previous decision in around late August, a federal judge ordered the return of 11,000 bitcoins worth about $30 million in a decision considered the first of its kind. The ruling stemmed from a class action in which plaintiffs alleged that the defendant had stolen their money and fled to China.  The judgment highlights the decentralized nature of bitcoin, with no person or authority in charge.  It makes it difficult for winning plaintiffs to get their bitcoins that they are entitled to back. Continue reading ›

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The argument between The Trump National Golf Club Jupiter and a class of 65 former members continues as the golf club has asked the Eleventh Circuit Court to overturn a ruling by the lower court that requires the golf club to pay approximately $5.7 million in refunded deposits to the former members.

The argument appears to hinge on when the members actually resigned their golf club membership. Prior to Trump’s purchase of the golf club, members paid a deposit, which was to be refunded to them upon the resignation of their membership. But the golf club was having financial troubles and was unable to pay all the resigning members their deposits.

So the club formed a resignation wait list, in which members who wanted to resign could continue using the golf club’s facilities as long as they continued paying their dues. When they reached the top of the list and enough new members had joined (generally five new members for each member on the resignation waitlist), the resignation could be made complete and their deposit refunded to them. Continue reading ›

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Although the Telephone Consumer Protection Act (TCPA) gives consumers the right to claim thousands of dollars in punitive damages for each illegal phone call made to their cell phones, there are valid reasons for plaintiffs to seek a settlement that pays only a fraction of their eligible damages.

In a recent proposed class action consumer lawsuit against Ocwen Loan Servicing, LLC, the parties have agreed to a financial settlement of $17.5 million to cover the claims of more than 1.6 million customers. Attorneys representing the class of plaintiffs have said they will request reimbursement for up to $100,000 of their actual expenses, fees of no more than one third of the total settlement fund ($5.8 million), and an incentive award of $25,000 for each of the three named plaintiffs who came forward to file the TCPA lawsuit.

After all that, each plaintiff will receive anywhere from $55 to $90, depending on their individual claims. Any funds that are left over after all payments have been made will go to the National Consumer Law Center and the Public Justice Foundation. None of the funds will revert back to Ocwen, as is sometimes the case in class action settlements. Continue reading ›

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It may be a first when class-action consumer litigation requires a Seventh Circuit panel to describe the step-by-step process of creating a Subway sandwich in a published opinion.

But that’s indeed what the court did in its recent ruling dismissing a class-action suit against the Subway fast-food chain; ham, provolone, pepper jack and all.

It all started in 2013 when an Australian teenager posted a photograph of his Subway “Footlong” sandwich next to a tape measure on his Facebook page. The sandwich measured only 11 inches. The post went viral and Subway customers in the U.S. began measuring their own sandwiches, and it was only a matter of time before the plaintiffs’ bar got in on the action.

Plaintiffs’ lawyers sued Subway, seeking damages and injunctive relief under state consumer-protection laws. The different cases were consolidated in the Eastern District of Wisconsin.

Subway’s defense was that because of deviations in the baking process, some rolls would inevitably shrink to under 12 inches, but all customers still received the same quantity of ingredients and most customers still got to enjoy a foot-long sandwich. Continue reading ›

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Even those of us who have come to terms with the fact that companies and advertisers track everything we do online aren’t ready to compromise their children’s privacy. In fact, the Children’s Online Privacy Protection Act (COPPA) is a federal law that was put in place specifically to do exactly what it sounds like: protect the privacy of children when they’re online.

But Disney, along with some of its software partners, allegedly violated this law by embedding trackers in some of the entertainment company’s most popular apps that tracked users’ information and allegedly distributed it to other companies and advertisers. As an entertainment company that primarily targets children, many of the users whose information is being tracked and disseminated are children aged 13 and younger.

The lawsuit lists dozens of popular Disney apps, including Cars Lightening League and Maleficent Free Fall, that, once downloaded, allowed the trackers embedded in the apps to collect the information and then extract it from the smart devices so it could be disseminated for commercial purposes – all without the knowledge or consent of the children’s parents, the lawsuit claims.

According to Jeffrey Chester, the executive director of the Center for Digital Democracy, Disney should not be using the software companies listed in the complaint. He says they involve heavy-duty technologies designed to track and monetize information on people, and as such, should not be working with a company that targets young children. Continue reading ›

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