Editor’s Note: This article was written by Kim Gale at Top Class Actions and is reprinted here with the permission of the publisher. Scott Hardy, the company’s President & CEO, is one of the speakers featured at HB’s Class Action Mastery conference May 9-11, 2018 in New York. Top Class Actions is sponsoring that event and its companion program, Mass Tort Med School, the same week.
As we come close to rounding out the first quarter of 2018, it is clear that several class action lawsuit trends from 2017 will continue to ripple through the court system this year.
Class Action Lawsuit Stats
Did you know three areas are responsible for a third of all class action lawsuits filed in the U.S.? The federal courts in California, Southern District (Miami) of Florida, and the Eastern District (Brooklyn) of New York keep lawyers and judges the busiest.
These statistics are apt to change because new Supreme Court decisions (Bristol-Myers Squibb v. Superior Court of California and BNSF Railway Co. v. Tyrrell) rein in a court’s jurisdiction and ability to litigate matters when residents from outside the court’s state make claims.
These new decisions mean a defendant will need to be sued in the state where the business is incorporated. Another option could be for individual states to file class action lawsuits and then seek to have them consolidated through multidistrict litigation (MDL).
Marketing Tactics Under Fire
Makers of everything from washing machines to mascara faced allegations of product misrepresentation. Advertising claims such as “organic,” “preservative free” and “virgin” can land a company in hot water with multiple class action lawsuits if these claims can be proven false.
In 2017, class action lawsuits started challenging the way some products are made because consumers possibly paid more for such proclamations.
For example, extra virgin olive oil is the highest quality available, which consumers often pay a premium to receive.
To earn the title extra virgin, the oil must be free of defects, taste like fresh olives, and be produced using no solvents. Extra virgin olive oil has to be manufactured by a mechanical process and in temperatures that will not allow the oil to degrade. Finally, the oil must be sold in darkly tinted bottles to keep the product from degrading on the shelf.
In one olive oil case that led to a class action settlement (Kumar v. Safeway Inc.), olive oil labeled extra virgin was allegedly mixed with refined oil and packaged in clear bottles, ruining any chance at truly being “extra virgin.” To add further insult, the olive oil was labeled as imported from Italy, but contained olive oil from a variety of other countries not particularly known for their brilliantly tasty olives.
Consumers do not take kindly to paying a premium for false enhancements, which has led to multiple class action lawsuits against companies that tout their product as better than the rest due to refinements that don’t exist.
Class Action Settlements Under Scrutiny
In 2013, Subway was hit with a class action lawsuit after a foot-long sandwich that fell short at 11 inches was posted on social media. Subway explained away the one-inch discrepancy by saying the dough is a foot long, but after the bread is baked, the natural action of the dough rising can cause impact on the length.
A class action settlement was reached in 2015 in which Subway agreed to make sure all locations adopted a uniform practice to guarantee each unbaked loaf measured 12 inches.
In the settlement, Subway also agreed to pay the class counsel’s $520,000 fees but offered no monetary compensation to consumers.
In September 2017, the 7th Circuit Court in Chicago reversed the Subway settlement on appeal because consumers would see the settlement as “utterly worthless.” The court expressed disgust over the settlement terms, indicating that any settlement that pays the class counsel, but provides no relief to the Class Members, “is no better than a racket.”
The court’s reversal of the settlement will force future defendants to make sure any settlement offer they consider includes a true benefit to Class Members and not just to their counsel.
Opioid Manufacturer Litigation
In 2017, more than 100 cases were filed against opioid manufacturers by individuals, health insurance companies, state governments, county governments and city governments. These opioid lawsuits seek to hold manufacturers accountable for the epidemic of opioids in the country that have led to overworked and under-financed ambulance services, hospital services, EMTs, police officers, rehabilitation facilities and other providers of care to people who overdose on opioids and need life-saving intervention.
The judicial panel on multidistrict legislation is considering motions to centralize these pending lawsuits. Whether or not the cases are processed separately or as an MDL, outcomes from these opioid epidemic cases will set new precedents, affecting the medical community and the law.
“Small” Data Breach Litigation
Even though high-profile data breach cases make the news, many smaller data breach class action lawsuits are filed every day. Large and small businesses collect data on customers and employees. Disgruntled current or former employees can cause big headaches by allowing a small data breach.
Employees who aren’t particularly computer savvy can accidentally save sensitive information where hackers could access it. As technology to enhance computer security has advanced, so have the skills of potential hackers who constantly look for weaknesses in firewalls.
A Look Forward
In 2018, class action lawsuits will continue to address claims regarding baby powder cancer, Roundup cancer, medication dangers, airbag recalls, whistleblower cases and other consumer-related issues.
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