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Consumer Fraud Archives

Ferrara Candy Co. Agrees to $2.5M Settlement

Ferrara Candy Co. ("Ferrara"), maker of Jujyfruits, Now and Later, Lemonheads, and other candies, has agreed to a $2.5 million settlement to end a proposed class action suit filed in the United States District Court for the Northern District of California. In the complaint, plaintiff, Thomas Iglesias ("Plaintiff"), alleged that 41% of Ferrara's candy boxes are slack-filled i.e. filled with empty space. As part of the settlement, Ferrara must ensure that, going forward, all of its boxes are composed of at least 75% candy.

Volkswagen Agrees to $8.5 Million Settlement to End False Advertising Suit

On June 6, 2018, Oklahoma Attorney General Mike Hunter ("Hunter") announced an $8.5 million settlement has been reached with Volkswagen AG, Volkswagen Group of America Inc., Audi AG, and Audi of America LLC ("Volkswagen"). The payment will end the lawsuit Oklahoma brought against Volkswagen after an investigation revealed the company purposely installed deceptive software to its diesel vehicles in order to allow them to score better on emissions tests.

Majority of Heart Rate Tracking Lawsuit against Fitbit to Proceed

Northern District of California Judge James Donato maintained the majority of a false advertising lawsuit against Fitbit Inc. ("Fitbit") on June 5, 2018, dismissing only plaintiffs' claim for unjust enrichment, finding that it could not be asserted as a standalone claim.

Lawsuit Over Skyrocketing Health Insurance Costs Due to Opioid Crisis

On May 2, 2018, class action suits were filed in five federal courts (California, Illinois, Massachusetts, New Jersey, and New York) against opioid makers and distributors, including Purdue Pharma and McKesson Corp., Cephalon Inc., Johnson & Johnson, Janssen Pharmaceuticals Inc., Cardinal Health Inc. and AmerisourceBergen Corp. ("Defendants"). The complaints allege that health insurance premiums are ballooning due to the national opioid epidemic which has been fueled by Defendants' aggressive marketing and promotion of opioids. The New Jersey complaint was filed by, Lou Sardella ("Plaintiff"), on behalf of individuals and businesses in the state who have bought private health insurance and have seen their premiums skyrocket due to the cost of the opioid crisis. The complaint alleges that private insurance claims related to opioid dependence in New Jersey grew over 3,200% between 2007 and 2014, and that health insurers have paid for opioid prescriptions that should never have been written and for the cost of treating addiction and other related costs. Sardella's complaint asserts that health insurers (who were not named in the complaint) have transferred the rising costs resulting from the Defendants' conduct to their customers in the form of higher premiums, deductibles, and co-pays. "These higher insurance costs are the result of the companies' allegedly deceptive marketing of the risks of opioids, and distributors turning a blind eye to the amount of opioid pills flooding the supply chain. Each year, opioid abuse imposes approximately $55 billion in health and social costs across the country, and it also imposes approximately $20 billion in costs for emergency and inpatient care," the Plaintiff alleged. Since 2015, Sardella's monthly premium with Horizon Blue Cross Blue Shield of New Jersey has risen from under $400 to almost $500.

Proposed Class Action against Dr. Pepper alleging Canada Dry Ginger Ale Does Not Contain Real Ginger

A class action was filed on July 27, 2017 alleging Canada Dry Ginger Ale ("Canada Dry"), owned by Pepper Snapple Group, Inc. ("Dr. Pepper"), does not contain a detectable amount of actual ginger and that the company falsely labels and markets its beverage. U.S. District Judge Roseann Ketchmark, a Missouri federal judge, ruled on April 25, 2018 that the suit presents enough facts to make a case and denied Dr. Pepper's motion to dismiss Missouri resident Arnold E. Webb Jr.'s ("Webb") consumer fraud suit.

Bai Drink Company Sued Over Allegedly Misleading Labeling

On April 19, 2018, California resident Kevin Branca ("Plaintiff"), on behalf of himself and all others similarly situated, filed a putative class action against drink maker, Bai Brands LLC ("Defendant"), accusing the company of using misleading packaging that suggests its products are made with "all-natural" ingredients even though they are artificially flavored.

Facebook Users Granted Class Certification in Facial Recognition Suit

On April 16, 2018, the Honorable James Donato, of the U.S. District Court for the Northern District of California, granted class certification to a group of Illinois Facebook users ("Plaintiffs") who claim that the social media company, Facebook, Inc. ("Facebook" or "Defendant"), scanned images of their faces as part of its "Tag Suggestions" feature without first obtaining their consent, in violation of Illinois' Biometric Information Privacy Act ("BIPA").

Fifth Third Bank Allegedly Charges Double Fees for ATM Usage

A proposed class action was filed in the U.S. District Court for the Middle District of Florida on March 29, 2018 against Fifth Third Bank ("Bank") by a consumer, Carnell Smith ("Smith"), who claims the Bank fails to properly disclose that it charges consumers out-of-network ATM fees for checking their account balances, among other charges that are not disclosed openly.

Allergan, Senju, & Kyorin To Pay $9 Million to Settle Product Hopping Suit

On February 16, 2018, Allergan Inc. ("Allergan"), Senju Pharmaceutical Co. Ltd., and Kyorin Pharmaceutical Co. Ltd. (collectively, "Defendants") announced a proposed settlement in which they will pay Hartig Drug Co. Inc. ("Plaintiff") $9 million to end a class action over alleged "product hopping" related to eye care products, Zymar and Zymaxid. Product hopping is a term used to describe the practice of pharmaceutical companies making modest drug reformulations that offer little or no therapeutic advantages in an effort to obstruct generic competitors and preserve monopoly profits on a patented drug. In 2012, the Federal Trade Commission filed an amicus brief stating that product hopping undermines state and federal laws that encourage generic competition and explained that the conduct can be the basis for an antitrust lawsuit.[1]

Whistleblower could score big in health care false billing case

We stressed a few fundamental points regarding qui tam whistleblower lawsuits that individuals file on behalf of the federal government under the U.S. False Claims Act in a recent post. We noted in our January 31 entry that such filings seem to be spiking these days. Moreover, "they feature in stories involving federal agencies and entities of virtually every type and dimension."