Chicago Business Litigation Lawyer Blog

A New Article On Mandatory Arbitration: The Struggle to Shape American Arbitration

February 13, 2011 | Peter S. Lubin and James V. DiTommaso

As Chicago business attorneys and Chicago consumer lawyers we were very interested to read the new law review article on the projected impact that mandatory consumer arbritration agreements could have in harming business arbitrations. Agreed upon arbitration of business disputes is a great way to resolve suhc disputes in a cost effective manner. On the other hand take or leave it clauses requiring consumers to arbitrate small disputes and banning class actions usually has the effect of barring acess to justice and redress for mass consumer frauds or unfair practices.

Click here to read the entire article: Revelation and Reaction: The Struggle to Shape American Arbitration in CONTEMPORARY ISSUES INTERNATIONAL ARBITRATION AND MEDIATION: THE FORDHAM PAPERS 2010, Martin Nijhoff, 2011.

Below is an abstract of the article:

Illinois District Court Holds that Termination is Not a Wage Reduction under FMLA

February 9, 2011 | Peter S. Lubin and James V. DiTommaso

We here at DiTommaso Lubin have extensive experience as Joliet overtime class-action lawyers and are constantly scouring the federal court dockets in Illinois for cases that may help our practice. One particularly instructive opinion was issued by the Northern District of Illinois, Eastern Division earlier this year in Ottaviano v. Home Depot Inc.

In Ottaviano v. Home Depot Inc., the Plaintiff employees worked for Home Depot as assistant store managers, and allege that they and their fellow class members were misclassified as exempt employees. Plaintiff’s claimed that Defendant’s misclassification was intentional for the purpose of circumventing the Illinois Minimum Wage Law (IMWL). Defendant Home Depot denied the claims and filed to dismiss the action through a motion for summary judgment.

The named Plaintiffs had worked for Defendant between approximately two to six years, and had worked well in excess of forty hours per week during the entirety of their employment. During the time that the Plaintiffs worked for Home Depot, they were paid a salary and were required to work fifty-five hours a week. Home Depot requires that all assistant store managers (ASM), including Plaintiffs, go through a training stage for two to eight weeks before they are deemed to be a qualified and capable ASM able to fulfill the responsibilities required for the position. The trainee ASM’s are classified as exempt by Defendants and are paid a salary during this period. Defendant has a universal policy of scheduling its ASM’s for fifty-five hours per week, and Home Depot terminates assistant store managers who fail to work the hours they are scheduled.

Plaintiffs filed their class action alleging that they were owed overtime for the training period and for every other week of their employment with Home Depot. Plaintiffs contended that Defendant’s policy of terminating ASM’s who do not work fifty-five hours a week is effectively a wage reduction under the Federal Labor Standards Act (FMLA). Plaintiffs also argued that under the salary-basis test, any employee whose wages can be reduced by their employer is non-exempt. The Court did not find Plaintiffs’ arguments persuasive, and in dismissing the claims Judge Dow cited a U.S. Supreme Court ruling that true exempt employees are disciplined by terminations, demotions, or restricted work assignments, as the Plaintiffs were, instead of wage deductions. The District Court went on to say that employers are permitted to set requirements for the overall number of hours worked by their exempt employees. Finally, the Court granted summary judgment to dismiss the overtime claims for the training period because they were barred by the applicable statute of limitations.

Appellate Court Certifies Class-Action in Title Insurance and Consumer Fraud Act Case

February 7, 2011 | Peter S. Lubin and James V. DiTommaso

The purchase of land is a complex and multi-layered process that presents many opportunities for not only misunderstandings and mistakes, but also fraud and misrepresentations. DiTommaso Lubin has many attorneys who focus on handling consumer fraud cases, so we are always tracking developments in that field of the law. Chultem v. Ticor Title Insurance is a recent Illinois appellate decision concerning title insurance agent kickbacks in the sale of real properties here in Illinois.

Chultem v. Ticor Title Insurance began as two separate class-actions that were consolidated into one case. In both cases, however, Plaintiffs purchased a parcel of land that also included the purchase of a title insurance policy from Defendants. Plaintiffs were sold the title insurance by an attorney agent who also represented one or more of the parties in the real estate transactions in question. Defendants, as title insurance companies, paid these lawyer agents an additional sum “over and above the attorney fees” paid to them by their clients (who were parties to the transaction).

Plaintiffs filed suit because Defendants paid the attorney agents based upon “the amount of insurance premiums generated from the referred clients” instead of for the services that the lawyers actually performed in their role as title insurance agents. In doing so, Plaintiffs alleged that in doing so, Defendants violated the Title Insurance Act and the Consumer Fraud and Deceptive Business Practices Act. Plaintiffs sought to certify a class, but the lower court denied certification because it would not be possible to determine across the board liability. Plaintiffs then filed an appeal.

On appeal, the Court addressed Defendants’ argument that a transaction-by-transaction analysis would be required in order to determine liability, and as such common issues could not predominate as required for class certification. The Court did not find Defendants’ arguments persuasive, however, because the agreement between the attorney agents and Defendants provided for a pro forma commitment. The Court went on to reason that if Plaintiffs are able to show that the agreements were pro forma and that the agents received full compensation as insurance agents, then liability for all claims could be established. Therefore the Court reversed the lower court ruling and remanded the case consistent with the finding that the Plaintiffs had satisfied the predominance requirement for class-certification.

Reuter’s Reports: “Kraft Loses Bid to Keep Distributing Starbucks”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

It is very difficult to obtain an injunction when monetary damages can compensate for a business’s losses. A recent article in Reuter’s regarding Kraft Food’s bid to require Starbucks to allow it to continue to distribute Star Buck’s coffee illustrates the point. Reuter’s reports:

A federal judge rejected Kraft Foods’ bid to force Starbucks Corp to keep using Kraft to distribute packaged coffee to supermarkets in North America and Europe, a decision that allows Starbucks to move ahead with a new partner.

In a ruling from the bench, U.S. District Judge Cathy Seibel in White Plains, New York, on Friday also noted that Starbucks could end up owing Kraft “a boatload of money” if an arbitrator decided the coffee chain breached a 1998 agreement with Kraft.

Consumer Law and Policy Blog Reports on New California Supreme Court Opinion Affirming Consumer’s Right to Sue for False Advertising Claims

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

Consumer Law and Policy Blog reports:

In a closely watched case, the California Supreme Court on Thursday issued a decision preserving the broad availability of the state’s principal consumer protection laws in cases involving mislabeled goods.The question at issue in Kwikset v. Superior Court (Benson) was whether a consumer who has bought a product that was mislabeled — a “union-made” shirt that was in fact manufactured in a sweatshop, “organic” produce that was grown with pesticides, or (as in this case) a “Made in the USA” lockset that had actually been partly manufactured in Taiwan and Mexico — may bring suit under the Unfair Competition Law (UCL) and the False Advertising Law (FAL). Proposition 64, passed by referendum in 2004, inserted in both laws a requirement that a private plaintiff have “lost money or property.” But what if the product the customer received was perfectly functional even if it wasn’t what the customer had ordered? Was there still a loss of money or property? The Court of Appeal thought not: since the item received was of equal value, plaintiffs had not “lost money” and therefore could not bring a claim under the UCL or FAL.

The California Supreme Court, however, disagreed. The Supreme Court held that neither the language nor the logic of Prop 64 precluded suits by consumers who did not get what they paid for. “Plaintiffs who can truthfully allege they were deceived by a product’s label into spending money to purchase the product, and would not have purchased it otherwise, have ‘lost money or property’ within the meaning of Proposition 64 and have standing to sue.” It doesn’t matter that to some other people, or by some objective measure, the mislabeled product is worth as much as the one the consumer expected. What matters is the consumer’s subjective valuation.

A New Article in the Illinois Bar Journal: “Officers and Directors Can Require Their Corporation to Pay Their Legal Fees”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

A new article in the Illinois Bar Journal explains officers and directors rights to the corporation paying for their legal fees and costs when they face litigation for corporate related activities.

The article focuses on corporations’ contractual obligations to advance litigation expenses to its directors and officers–even where the corporation has sued the director or officer. As explained in the article, most states allow companies to provide their officers and directors a right to advancement of litigation expenses in suits filed by reason of their corporate poistion.

The article states:

Courthouse News Reports: “Class Claims AT&T Rigs Bills for iPhones”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

Courthouse News Reports:

AT&T Mobility faces another federal class action involving its iPhone and iPad services. This one claims that “AT&T’s bills systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account,” and bills customers for data transactions even if they disable their phones and leave them untouched – as the plaintiff’s experts did.

The class says AT&T’s billing system “is like a rigged gas tank that charges pump that charges for a full gallon when it pumps only nine-tenths of a gallon into your car’s tank.”

NPR Reports: “New York Tackles Wage Theft”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

DiTommaso Lubin is a firm of dedicated attorneys who focus on nationwide class action lawsuits. Our firm has successfully prosecuted wage and hour class actions for years and we pride ourselves on getting results. Our Chicagoland area lawyers know the overtime laws and have dealt with the issues that arise from wage claims. Many employers misclassify employees as being exempt from overtime laws and pay salary wages instead of hourly wages to avoid paying overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and filing a lawsuit can help to recover their wages. DiTommaso Lubin serves many clients in Chicago, Lincolnshire, and Libertyville, but also represents clients across the nation who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago wage and hour attorneys by phone at 1 630-333-0333, or through our online form.

The Times Herald Record Reports: “Orange County Man Leads National Class-Action Suit Against Wristband-Maker”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

Snake oil salesman have been around our country for well over a hundred years. With low cost cable and internet advertising readily available the art of selling products that promise the moon but don’t deliver has reached new heights. Add some celebrity endorsements and a clever informercial and the money flows in.

Class-actions alleging that Power Balance wristbanks which are endorsed by NBA stars Shaquille O’Neal and Lamar Odom don’t turn the wearers into super star athletes and don’t provide any of the promised benefits have been filed all around the country, including a new alleged class-action suit in Orange County California according to an article in the Times Herald Record. To read the full article click here.

Our Nationwide class action lawyers have filed class-actions regarding alleged informercial scams and to recover monies consumers have lost due to false advertising. We also help consumers and workers who have been ripped off by all kinds of frauds whether they be mass frauds, failure to pay minimum wages or overtime pay or an indvidual car sale. We have resolved class action claims for hundreds of millions of dollars in benefits to the class and also work just as hard to represent individual consumers who have been ripped on in a single transaction. For instance, we just settled an indivual car fraud case for a $100,000. The victim spent all of her savings of $9,000 to purchase a used car from a major Chicago Automobile dealer. The Autodealer misrepresented that the car was in good condiction and concealed that it was in reality 3 cars welded together with 3 different VIN numbers. The dealer paid all of our attorneys fees and costs and the remainder of the money in excess of $45,000 went to the victim who didn’t have to pay any fees or costs other than the $250 fee of the expert appraiser to pursue the case.

DiTommaso Lubin attorney Peter Lubin has been selected by Super Lawyers as one of the top class-action attorneys in Illinois as rated by their peers.

Reuter’s Reports: “B of A to Pay $410 million to Settle Over Draft Lawsuit”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

A number of national banks have been facing class-action lawsuits for allegedly misusing over draft fees on checking accounts to generate hundreds of millions of dollars in extra revenues. The way the Banks have achieved this is by reorganizing debits from debit cards by the size of the transaction as opposed to in date order and also denying customers the option of turning the transaction down and then charging large fees for the overdrafts.

Reuters reports that Bank of America has agreed to pay $410 million to settle a class-action lawsuit that has been pending for a number of years which makes these very allegations. To read the full article click here.

Our Woodstock, Illinois consumer rights private law firm handles individual and class action predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. The Chicago consumer rights attorneys at DiTommaso Lubin are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.