Have you been skipping past items about California’s abuse-ridden s. 17200 business practices act (see Jun. 30, Apr. 22, Mar. 12, Feb. 16 and links from there) just because you don’t happen to live or do business in California? Then read on. Under a case currently on appeal to the state’s supreme court, a business located anywhere else in the country, perhaps even the world, can be sued under s. 17200 if it advertises for customers in California — and such advertising may take the form of maintaining a website accessible to California customers. In the case at issue, a Los Angeles appeals court ruled this March that several Nevada casino hotels “could be sued by a man seeking class action status on behalf of all California residents hit with a $3-per-night energy surcharge while staying in Las Vegas, Reno or other gambling towns.” The court held “that hotel advertisements, toll-free numbers and interactive Web sites provided sufficient contact to give Los Angeles-area resident Frank Snowney jurisdiction to sue in California” under the ultra-liberal state law. According to a Fulbright & Jaworski lawyer who is representing the casinos on appeal, the ruling “may affect any hotel, cruise ship, club, theater, museum, sporting venue, rental car company, restaurant, etc., operating exclusively outside of California, but accepting online reservations.” (Mike McKee, “Businesses Quake Over California Case”, The Recorder, Jul. 2). More: There turns out to be a whole blog dedicated to s. 17200, and it takes exception to the Recorder article’s slant, interpreting the pending case as primarily about the scope of state jurisdiction generally and only incidentally about s. 17200 (via Legal Reader).
Posts Tagged ‘class actions’
Wal-Mart sex-bias class action
…discussed today on PointOfLaw.com, including a mention of how some of the allegations in the case hark back to the EEOC’s great crusade against Sears in the 1970s and 1980s.
“Can these settlements be redeemed?”
A 2002 class-action settlement against cable purveyor MediaOne (now Comcast) over alleged overcharges resulted in a payout to consumers ballyhooed at $17 million, with $3 million going to fees for class counsel. Boston Globe columnist Alex Beam tries to find out how much of that $17 million was actually paid to consumers, and — imagine! — gets blown off by both the company and the lawyers. He also tries to check out how much consumers actually received from a settlement against the Poland Spring water company (see Feb. 2, Sept. 10) that was billed as being worth $8 million, with $1.35 million to the lawyers. The lawyer he reaches tells Beam he has no idea, and the company never gets back to him. All’s well with the system (Jun. 17).
Nutritious, fattening or both?
Also via the Colorado Civil Justice League May 21 newsletter: class members will receive $240,000 and a law firm representing the class will get $350,000 in fees following the settlement of an action against Chemins Company Inc. of Colorado Springs over mislabeled powdered protein supplements. The supplements allegedly contained twice as many carbohydrates and half as much protein as specified on their label. The settlement was billed as being worth $3 million but only 117 certified claimants stepped forward instead of the projected 10,000. Hill & Robbins had originally requested $600,000 in fees but the judge said $825 an hour was too much so he cut it to $481 an hour, which still leaves the lawyers with a bigger share of the booty than their clients. (Rocky Mountain News coverage: John Accola, “Class-action morass”, May 7; “Two lead plaintiffs won’t get bonuses”, May 7; “The class-action game and how to slow it”, (editorial), May 14; letter to the editor from attorney Ronald L. Wilcox of Hill & Robbins, May 14).
A 7 percent chance of winning
The New York Sun, on a roll recently, digs deeper into that controversial cosmetics-giveaway class action settlement being aired before an Oakland federal judge (see Apr. 14 of this year and Jul. 21, 2003). According to a declaration filed last week by San Francisco attorney Francis Scarpulla, “Plaintiffs’ counsel consulted with a litigation-risk expert, who, after carefully reviewing all aspects of this case, opined that if plaintiffs’ counsel tried the case 100 times, they would win only seven times”. Harvard law prof David Rosenberg describes the case as having “little merit”. (Josh Gerstein, “The Case of the Cosmetics Giveaway”, New York Sun, May 17). Update Dec. 3: settlement OK’d; Mar. 14, 2005: judge approves settlement.
Shareholder lawyers in Hevesi heaven
Citigroup announced the other day that it was paying an unexpectedly munificent $2.65 billion to settle lawsuits filed on behalf of investors in WorldCom, the telecom stock which collapsed after being hyped by Citigroup analyst Jack Grubman. (Mark Hamblett, “Citigroup Settles WorldCom Litigation”, New York Law Journal, May 11). According to a New York Sun editorial, two law firms noted for their work in shareholder class actions — Barrack, Rodos & Bacine and Bernstein Litowitz Berger & Grossman LLP — “stand to share a legal fee of up to $144.5 million for representing the lead plaintiff, the New York State comptroller, Alan Hevesi, in the case against Citigroup.” As it happens, both law firms donated generously to the political campaigns of Hevesi and his predecessor, Carl McCall. And while a chunk of the settlement will indeed flow into the coffers of New York state and city pension funds to compensate them for their losses in WorldCom stock — holdings worth around $306 million at their peak — it turns out that the same public entities own $1.6 billion in stock in Citigroup itself, which was hurt by the litigation (and which of course is also a major New York employer). In fact, the Sun notes in its detailed analysis of the affair, that “stock is worth about $45 million less now than it was before Mr. Hevesi’s heroics,” a sum that may or may not exceed what the city and state wind up gaining by recouping some of their WorldCom losses. (“Citigroup wake-up call” (editorial), New York Sun, May 11).
Calif. Microsoft payday, cont’d
More scrutiny of that request for a bodacious $258 million in fees for lawyers who sued Microsoft on behalf of California consumers (see Mar. 31) in what the company says was a piggyback action restating allegations from its federal antitrust case. In defending their request, the lawyers — prepare to shed a tear — say they had to work on the case over “the entire Thanksgiving holiday weekend” in 2001, among other things. Although Microsoft says it has allocated $1.1 billion to compensate California consumers, it “could end up spending much less. The deal enables anyone who bought a computer in California to get vouchers worth $5 to $29 per Microsoft product, but only a small fraction of the millions eligible have applied for the money.” (David Kravets, “California lawyers say they deserve $258 million for suing Microsoft”, AP/San Francisco Chronicle, May 12). Update Sept. 23: judge slashes fee to $112 million.
Diet Coke formula: variation = unfairness
As has been reported here and there for years, Diet Coke as it is served at soda fountains is sweetened in part with saccharin, whereas the version sold in cans and bottles is sweetened with more expensive aspartame. We always assumed that the reason must be that competition between brands is more intense in the supermarket aisle than in restaurants, but the Coca-Cola company cites another reason for the formula variation, saying aspartame is not as stable in fountain use. At any rate, class-action lawyers have now filed lawsuits in Florida, Illinois and California on behalf of beverage drinkers supposedly victimized by this practice. The company says the allegations in the various lawsuits are identical and that it expects to prevail. (Lawrence Viele, Bloomberg/Oakland Tribune, Mar. 26)
Verizon coupon deal: this earbud’s for you
Last week a San Diego judge considered objections to a proposed settlement between Verizon Wireless and class action lawyers who’ve been suing over its billing practices. Consumers would receive two coupons: the first “could be redeemed for a choice of immediate bill credit of $15 on a new or renewed one-year service contract, $30 off of a two-year contract, $24 off an existing contract over a two-year period, $15 off a purchase of Verizon merchandise, a free 120-minute long distance calling card, or 1,500 free text messages over a six-month period. The second coupon would entitle consumers to an ‘earbud’ for handsfree use of their phone or $15 off of a similar accessory.” Consumers Union, which objected to an earlier settlement, says it likes this one, but an objecting lawyer says that “the ear accessory described as having a ‘retail value of $15’ can be bought for $3 or $4 at discount stores. The wholesale cost to Verizon must be even lower, Mr. Tusa said.” (Josh Gerstein, “Settlement Looms for Verizon Wireless”, New York Sun, Apr. 30).
Madison County: Ms. Howell’s two hats
In an article about the controversial Lucent class action settlement ($84 million for the lawyers, $8 million for the class; see Apr. 5) the St. Louis Post-Dispatch talks with Joy Howell, spokeswoman for lead class counsel Stephen Tillery, who’s among Madison County’s most prominent class-action lawyers. Later in the piece it emerges that Ms. Howell “also serves as a spokeswoman for the Coalition to Preserve Access to Justice”, a group that vehemently opposes the reform-minded Class Action Fairness Act on behalf of “more than 80 national consumer, environmental and civil rights groups”. Hmmm. (Trisha L. Howard, “Nixon backs state role in class action suits”, St. Louis Post-Dispatch, Apr. 3). And the local press is casting a skeptical eye on what the Post-Dispatch calls “the strange little courthouse in Edwardsville” (Illinois) and the doings of Judge Nicholas C. Byron in particular (see “It’s a Mad, Mad, Mad Madison County”, Apr. 22) (“Madison County: What’s the judge hiding?” (editorial), St. Louis Post-Dispatch, May 1; Brian Brueggemann, “Judge Byron endures hot seat”, Belleville News-Democrat, May 3; “‘Judicial hellhole’ deepens with law firm’s banishment” (editorial), Bloomington Pantagraph, Apr. 27). Last month “Byron ordered a newspaper reporter to leave the courtroom Monday when [attorney Rex] Carr and Tillery began arguing about the apparently sensitive issue of how much money the firm has earned.” (Brian Brueggemann, “Class-action lawyers fight over money”, Belleville News-Democrat, Apr. 11, and how’s that for a quotidian headline?). Finally, visions of sugar plums seem to have gone a-glimmering for class action attorney Judy Cates, of columnist-suing fame, when a Belleville jury rejected her lawsuit demanding $300 million from Allstate because it does not reimburse its auto policyholders after crashes for the decline in the resale value of their fully repaired cars. According to defense attorney H. Sinclair “Rod” Kerr, the lead plaintiffs, Michael and Tiffany Sims of East St. Louis, Ill., “decided to sue only after a relative called their attention to a newspaper ad placed by Cates’ law firm seeking plaintiffs against Allstate.” (Robert Goodrich, “Jury rejects class-action suit over car repairs”, St. Louis Post-Dispatch, Apr. 29).