Small Claims, Big Cases

Did you know that Blockbuster was sued in a calss-action suit in early 2000 for overcharging on late fees? One wonders if their latest marketing tactic - “NO MORE LATE FEES” was just a coincidence!

Here’s a refresher from Ultimate AV Mag:

August 27, 2000 — The world’s largest video rental chain has been slapped with a class-action lawsuit over what plaintiffs’ attorneys are calling “excessive late fees.” Asserting that late fees are punitive and exceed any real costs incurred, Santa Monica law firm O’Neill, Lysaght & Sunn, LLP filed suit against Blockbuster Inc. Wednesday, August 23, in Los Angeles. The plaintiff: one Monica Rocha of Hollywood, and a “class” of other Blockbuster customers.

Late fees are a substantial source of income for video rental stores, and a constant problem for less-than-vigilant movie fans, who often pay double the rental price on a tape or disc because they fail to return it in time. With more than 7000 outlets, Blockbuster reported taking in $203.2 million in late fees during the fiscal quarter ending June 30. That’s approximately $9700 per month per store in late fees alone.

Blockbuster overhauled its late-fee policy in February, initiating a “convenience program” that calculates the late fee based on the rental period rather than on the amount of time an item was actually overdue. Under the new policy, a customer with a three-day rental who comes in a day late will be charged for an additional three-day rental. Blockbuster executives have defended the policy, saying it benefits customers who wish to extend their rentals.

The plan has also helped the corporate bottom line. During the same quarter in 1999, Blockbuster took in $164.7 million in late fees, according to records filed with the Securities and Exchange Commission. Revenue from late fees leaped 23% for the quarter this year, attributable both to the new policy and to an increase in general business.

The number of Blockbuster customers who will see any money from a possible settlement can’t be determined, but it isn’t likely to include anyone but Ms. Rocha. When settled, class-action suits typically preclude any member of the class from subsequently suing the defendants. The real winners may be her attorneys, who could collect millions if they succeed.

Do You Have A Class-Action Case?

What factors must be present to start a class action lawsuit?

LawyersAndSettlements.com’s FAQ says:

There are several requirements to consider when attempting to form a new class action case. Simplified, these are:

• Numerosity - adequate number of plaintiffs
• Commonality - common damages and legal issues
• Typicality - each class member’s claim must come from the same event, and must make the same legal argument
• Adequacy of Representation - the representative plaintiff will adequately protect and represent the interest of the class
• Viability of Defendant - although it is not a requirement of the court, it is reasonable to assume that if the accused does not have the means to compensate for the alleged damages and legal costs, it would be difficult to entice a law firm to represent the class.

AP reports on Business Week Online today -

AUG. 31 1:49 P.M. ET A federal court granted class-action status to a suit filed against trucking company Landstar System Inc. by a truck drivers’ association, creating a plaintiff group of about 7,000 people, according to a court filing.

The U.S. District Court in Jacksonville, Fla., issued the ruling on Tuesday and Landstar said Wednesday that it plans to appeal the class certification.

“This class-action ruling is based on perceived efficiencies in resolving liability on a class-wide basis, rather than through a series of separate trials,” said Michael Kneller, Landstar’s vice president, general counsel and secretary, in a statement. “Landstar continues to believe, however, that individual contractor-specific issues predominate over common issues, and will therefore ask the U.S. Court of Appeals in Atlanta to overturn this ruling.”

Mannatech Shares Down On Class-Action Suit

AP reported in Business Week Online today -

AUG. 31 2:50 P.M. ET Shares of network-marketing company Mannatech Inc. tumbled Wednesday after the company was hit with a class-action lawsuit by Lerach Coughlin Stoia Geller Rudman & Robbins LLP, one of the nation’s most high-profile and controversial law firms which has won billions of dollars representing investors.

Mannatech shares plunged $2.33, or 16 percent, to $12.26 in afternoon trading on Nasdaq, putting it among Nasdaq’s top price losers. The company’s shares are off 53 percent from their 52-week high of $26.10, set back in March, and are hovering 8 percent above a low of $11.48.

Shares of the Coppell, Texas-based company have largely treaded water since suffering a big blow in May, when an article in Barron’s raised questions about the effectiveness of Mannatech’s dietary supplements.

Mannatech develops and sells nutritional supplements and weight-management products through a network of independent salespeople. The suit filed by Lerach Coughlin claims Mannatech helped inflate the price of its stock by issuing false and misleading statements about its business. A spokesperson for Mannatech couldn’t immediately be reached for comment.

One of the suit’s lead attorneys is controversial litigator William Lerach, who is also representing Enron Corp. investors and has so far won more than $7 billion from Enron bankers including J.P. Morgan Chase and Citibank. Federal prosecutors are reportedly scrutinizing Lerach’s former role as a senior partner at the nation’s largest class-action law firm, Milberg Weiss, in an inquiry focused on whether the firm illegally paid plaintiffs whose names repeatedly appeared on securities class-action suits brought by the firm, the Wall Street Journal reported earlier this month.

Class action suit against Landstar will proceed

A Jacksonville judge has ruled that a lawsuit against Landstar System Inc. “can proceed as a class action suit”:

The suit alleges that Landstar, a Jacksonville-based trucking company that leases its capacity from independent owner-operators, violated truth-in-leasing regulations that resulted in truckers being denied compensation due to them.

Prior to Judge Henry Adams certifying the class, the plaintiffs consisted of four named parties and the Owner-Operator Independent Drivers Association Inc. Now the class consists of all owner operators in the United States who had or have leases with Landstar Inway Inc., Landstar Ranger Inc. or Landstar Ligon Inc. since Nov. 1, 1998. The number of members in the class must be determined, although the plaintiffs estimate more than 7,000 people will be included.

Landstar attorneys had argued not everyone who met the class definition had similar complaints against the company, but Adams concluded there are “common questions of law and fact in this matter such that the commonality element has been satisfied.”

Plaintiffs’ attorney Michael Freed said the class certification also means the amount of potential damages is likely to increase to “tens if not hundreds of millions of dollars.” Landstar said it will appeal the class action ruling and believes it has meritorious defenses to the claims asserted in the suit.

Freed said the lawsuit would have gone to trial in October, but that more discovery will be required by both parties in light of the class certification. A trial may not take place until April 2006.

Bennett Environmental will settle

Bennett Environmental (a soil treatment company) has decided to settle a securities class action lawsuit:

The firm said the suit will be settled for $9.75 million, which will be paid primarily by its insurers, with a contribution of $750,000 from the company.

The Oakville, Ontario-based company said the claims in the suit, which was pending in the United States District Court for the Southern District of New York, will be dismissed with no admission of wrongdoing.

The proposed settlement is still subject to negotiating definitive settlement documents and final court approval.

The case dates back to 2004 when a number of class action suits were filed over Bennett’s disclosure of an unfavorably revised contract for a key U.S. cleanup site in New Jersey.

The revised contract slashed soil shipments and reduced the company’s contract backlog, sending its stock tumbling.

OxyContin cases rejected for class-action status

WKYT.com is reporting that 1,000 individual lawsuits have been filed in NYC against the maker of OxyContin because “a New York state judge refused to accept a class-action suit.”

The reason that the cases have to be tried individually is that the hearing judge decided that too many of them had different injury claims and different evidence requirements. Oxycontin, which was approved by the U.S. Food and Drug Administration in 1995, is a powerful painkiller, often used in cancer cases.

But it is also powerfully addictive, something the plaintiffs claim the drug’s manufacturer, Purdue Pharma, of Stamford, Conn., failed to point out to patients and doctors when it marketed the drug.

These lawsuits are the latest in a series of thousands that have been filed against Purdue Pharma in the United States. According to AP, the company has never lost an OxyContin lawsuit, but there was a settlement with the West Virginia attorney general’s office in November 2004.

Are you a former BankBoston customer? Do you want $25?

If you once banked with BankBoston, you could be eligible for part of a recently reached settlement:

QUINCY, Mass. — Former BankBoston customers may be eligible for payments of $25 apiece under the settlement of a class-action lawsuit alleging customers were notified too late about merger-related changes involving fees and minimum balance requirements.

BankBoston was absorbed five years ago by the former Fleet National Bank, which in turn was acquired by Charlotte, N.C.-based Bank of America Corp. last year.

Under a settlement reached earlier this year, Bank of America has agreed to pay up to $12.5 million to settle with former BankBoston customers in 68 communities, mostly in the Boston area, the South Shore and Cape Cod, The Patriot Ledger reported Monday.

The lawsuit filed in 2001 alleged that BankBoston customers were told too late about new fees and minimum balance requirements after the purchase by Fleet. Federal law requires that bank customers receive at least 30 days’ notice about “adverse” changes to their accounts.

Bank of America is notifying former BankBoston customers who may be eligible via newspaper ads and mailings to many former BankBoston customers. If too many come forward to seek payment, they will receive less than $25 apiece from the settlement fund.

Motion to postpone Vioxx trial rejected

Yahoo! News is reporting that:

Beleaguered drug maker Merck & Co.’s request to postpone the next trial over its withdrawn painkiller Vioxx was turned down Monday by the New Jersey judge presiding over the case.

Superior Court Judge Carol E. Higbee, who is overseeing nearly 2,500 Vioxx product liability cases that have been filed in New Jersey, also rejected several other Merck motions related to the upcoming trial.

Whitehouse Station, N.J.-based Merck, in a motion filed last week, had urged Higbee to postpone the trial’s start for 45 days, citing a “media blitz” after the first Vioxx trial. That ended Aug. 19 with an Angleton, Texas, jury awarding $253.4 million to the widow of Bob Ernst. He died in 2001 after taking Vioxx for eight months. The award is expected to be reduced to about $26 million due to Texas caps on punitive damages.

Set to start Sept. 12 in Atlantic City, the second trial over the drug involves a 60-year-old postal worker and former Marine from Boise, Idaho. Frederick “Mike” Humeston suffered a heart attack, but survived, four years ago shortly after he began taking Vioxx for pain from old war wounds.

Merck is facing about 5,000 lawsuits in all. “The total includes about 150 potential class-action suits, which could include many plaintiffs.”

Class Action Lawsuit Filed Against Symbol Technologies

LawFuel reports that a class action lawsuit has been filed against Symbol Technologies by the law firm of Schiffrin & Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Eastern District of New York on behalf of all securities purchasers of Symbol Technologies, Inc. (NYSE: SBL - News; “Symbol” or the “Company”) between May 10, 2004 and August 1, 2005 inclusive (the “Class Period”).
[…]
The complaint charges Symbol, William R. Nuti and Mark T. Greenquist with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the demand for the Company’s products was weak; (2) that the Company’s operations were inefficient due to high operating costs exacerbated by excess workforce, unnecessary capacity and obsolete assets; (3) that the Company had inadequate internal controls; and (4) that as a result of the foregoing, the Company’s earnings projections lacked in all reasonable basis when made.

The whole press release can be read here.

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