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Consumer Fraud Archives

Class actions continue to mount against Uber

The app-based transportation network Uber continues to face legal troubles, as three lawsuits have been brought in the last month on behalf of Uber passengers. The San Francisco-based company is also facing a class action lawsuit in which a class of drivers says the company failed to pay them as employees. Jillian Boyce, of Shepherd, Finkelman, Miller & Shah, discussed the drivers' lawsuit in a previous post.

DOJ Continues to Pursue Medicare and Medicaid Fraud

The United States Department of Justice ("DOJ") has brought another claim of Medicare fraud under the U.S. False Claims Acts. The DOJ has accused Creekside Hospice II, LLC in Las Vegas, Nevada, and Skilled Healthcare in Foothill Ranch, California, of treating non-terminally ill patients in order to gain excessive reimbursements from Medicare and Medicaid. Creekside and Skilled Healthcare are subsidiaries of Delaware corporation, SKG.1 Acting Assistant Attorney General Joyce Branda said companies often abuse Medicare's hospice system and that "[t]he department will take swift action to protect taxpayer dollars and make sure that Medicare benefits are available to those who truly need them."2

Consumer fraud suit says deodorants mislabeled as 'unscented'

In October we discussed a New Jersey bill that, if passed into law, would reduce penalties for some companies that commit technical violations of the state's Consumer Fraud Act. One aspect of the bill, which you can read more about in our previous post, allows companies to avoid having to pay plaintiffs' legal fees and other costs if the violation in question did not result in loss to the consumer.

District Court Judge Okays Statistical Sampling in FCA Case; Life Care Centers Appeals

In United States ex rel. Glenda Martin and ex rel. Tammie Taylor v. Life Care Centers of America (2014 U.S. Dist. LEXIS 142660), Federal Judge Harry Mattice of the Eastern District of Tennessee found that the Government is permitted to extrapolate from a sample of fraudulent claims to attempt to show larger liability under the False Claims Act ("FCA"). The United States argued that the history and purpose of the FCA support the use of statistical sampling in attempting to prove that an entity is defrauding the Government. Life Care Centers of America ("LCCA"), based in Cleveland, Tennessee, is now appealing to the Sixth Circuit, arguing that statistical sampling cannot satisfy the Government's burden of proof and that its due process rights are negatively affected by such statistical extrapolation.1

NLRB Finds Retail Chain's Arbitration Clause Violates NLRA Section 7

In Ross Stores, Inc. and Rachel Goss (Case 31-CA-109296 (October 2014)), Administrative Law Judge ("ALJ") Jay R. Pollack found that clothing retail chain Ross Stores violated the National Labor Relations Act ("NLRA") when it required employees to sign an agreement that barred them from pursuing collective actions.  Pollack said that the agreement violated Section 7 of the NLRA, which protects employees' rights to engage in concerted activity when acting in a manner intended to improve their working conditions.  In making his decision, ALJ Pollack followed the precedent of the National Labor Relations Board ("NLRB") in D.R. Horton, 357 NLRB No. 184 (2012), which holds that arbitration agreements cannot prevent employees from engaging in concerted activity.1

NJ bill would reduce penalties for violating Consumer Fraud Act

New Jersey's Assembly Consumer Affairs Committee recently approved a bill meant to reduce penalties for companies that are found by a court to have committed only a technical violation of the state Consumer Fraud Act. Currently, an individual who wins a consumer fraud lawsuit against a New Jersey company is entitled to compensation for the costs of litigation, including attorney fees, even if no damages were suffered by the plaintiff.

PA Supreme Court Narrows Applicability of Habitability Warranty

In Conway v. Cutler Group, Inc., (2014 Pa. LEXIS 2084) the Pennsylvania Supreme Court recently issued a decision holding that an implied habitability warranty from developers does not extend to secondary purchasers of a property. The Court reasoned that because the secondary purchasers were not a party to a contract with the homebuilders, the homebuilders could not be liable to them for breach of implied warranty.1 Despite the plaintiffs' contention that the implied warranty of habitability was a judicial creation from a 1972 Pennsylvania Supreme Court decision, the Court held that if the warranty is to be expanded to secondary purchasers, it must be the Pennsylvania State Legislature that makes that decision. 2

False advertising at issue in class action against juice maker

When an investor or consumer decides to sue a business, the case may have merits as a class action, but not every case does. After the lawsuit has been filed, the court will consider the case and determine whether it meets the requirements of a class action. If the issues common to members of the class outweigh the issues specific to each member, then a class action can be certified as such.