So-called class action "reform" is intended to weaken and discourage class actions and substantially lessen their value as a weapon for consumers victimized by negligence, fraud and reckless misconduct. The business proponents of this type of "reform" know the true benefits that class actions provide consumers.
Following are several state class action cases that are beneficial to the public's safety. These cases are clear examples of the importance of preserving state class actions. Each state deserves the opportunity to protect its citizens in its own courts by interpreting its own state law.
New Hampshire Claims Companies Polluted Its Waterways
A class action, brought by the state of New Hampshire, against 22 oil and chemical companies responsible for polluting the state's waterways with methyl tertiary butyl ether (MTBE) is pending in New Hampshire state court. The named defendant, Amerada Hess, from whom much of the relief is sought, is incorporated in New York. The 22 companies are accused of having produced a defective product, created a public nuisance, engaged in negligence, and violated both a state consumer protection statute and a state environmental law governing oil spills. New Hampshire is seeking compensation for the cost of cleanup as well as civil penalties and punitive damages.
Pesticide Blamed for Depletion of Local Crawfish Population
In Louisiana, the use of the pesticide Fipronil led to a wide-spread crawfish kill, wiping out the livelihood of many Louisiana fishermen, and causing Louisiana's crawfish production to fall from 41 million pounds in 1999 to 16 million pounds in 2000. Crawfish farmers filed a class action against Bayer CropScience LP, an out-of-state corporation and manufacturer of the pesticide. They also named as defendants smaller, in-state seed companies who used the pesticide. The plaintiff class members consisted of individual farmers and Louisiana-based farming businesses. A Louisiana state court judge recently granted final approval of a settlement agreement. The class of plaintiffs was comprised entirely of current or former Louisiana residents and all of the crawfish infection occurred in Louisiana.
Chemical Plant Leak Allegedly Causes Dangerous Cloud to Form Over Town
On July 26, 1993, the chemical Oleum, a sulfuric acid compound, leaked from a railroad tank car at General Chemical's Richmond, California plant. General Chemical, based in New Jersey, is one of the largest manufacturers of sulfuric acid in the country. The leak caused a cloud to spread directly over North Richmond, California, a heavily populated community. Over 24,000 people sought medical treatment in the days immediately following the leak. General Chemical entered into a $180 million class action settlement with 60,000 northern California residents who were injured or sought treatment for the effects of the cloud.
- Missouri Patients Claim Pharmacist Knowingly Diluted Prescription Medications
On November 24, 2003, a Missouri judge gave preliminary approval to a settlement agreement in a class action brought by Missouri plaintiffs against the insurer of a Kansas City pharmacist. The pharmacist previously admitted to diluting the prescription medications of thousands of patients, including chemotherapy patients, over a ten-year period. The defendant, Pharmacists Mutual, is an Iowa-based corporation, but it sells policies in Missouri.
State Farm Insurance Said to Limit and Deny Valid Claims
Individuals insured by State Farm Insurance Company recently brought a class action against them for bad faith insurance practices. Plaintiffs claim that after being injured in various accidents and submitting claims for medical treatment, State Farm implemented a "medical utilization review policy" to systematically limit or deny valid claims covered under their insurance policies. Plaintiffs further claim that this system was part of a secret "cost containment" policy implemented by State Farm. The class action suit alleges bad faith, a violation of Washington's Consumer Protection Act, and unjust enrichment. It seeks compensation for breach of contract and breach of fiduciary duty.
Equitable Life Insurance Accused of Misleading and Cheating Customers
Class action lawsuits were filed in Pennsylvania and Arizona state courts alleging that Equitable Life Insurance misled consumers by selling "vanishing premium" policies in the 1980s. Equitable, based in Des Moines, Iowa sold the policies when interest rates were high, telling customers that after a few years, once the interest generated was high enough to pay the premium, they would not have to make additional payments. However, once interest rates dropped, customers still ended up paying the premium in full. Equitable settled the actions for $20 million. Class members consisted of 130,000 policyholders who bought policies between 1984 and 1996.
- Employees Accuse Wal-Mart of Denying Overtime Pay
In California, employees of Wal-Mart filed a class action alleging they were forced to work "off-the-clock," and that Wal-Mart intentionally understaffed their stores to make off-the-clock work mandatory. They also allege they missed meals and rest periods, and were not compensated for actual time worked. A California state judge approved certification after limiting the class of plaintiffs only to employees of Wal-mart stores in the state of California.
Workers Claim Hewlett Packard Illegally Withheld Pay and Benefits
Hewlett Packard (HP) employees in California have filed a state class action against the California-based company. They claim they worked thousands of hours but were denied overtime pay and benefits. According to their allegations, HP falsely identifies workers as independent contractors and requires workers to falsify timesheets, so that they fall under a 40-hour work week. Workers who refuse are told they will be fired, and many of these workers are legal immigrants holding H1B visas - meaning if they lose their job, they face deportation. H1B visas are given to professionals with specialized skills and knowledge such as scientists, engineers, and programmers. These employees were also required to be on 24-hour telephone standby, and to receive permission several months in advance before leaving the vicinity of Cupertino, California, and work 12-hour days and 80-hour weeks.
Roto-Rooter Allegedly Overcharged Customers
In Ohio, Roto-Rooter is charged with violating state consumer protection laws by adding a miscellaneous supply charge to pre-printed invoices that are used by company-owned stores. The supply fee, ranging from $9.95 to $12.95, was being charged regardless of the supplies used. Obviously, a $10 loss would not send an individual person to court, but imagine the profits Roto-Rooter made, collectively, off of this overcharge. The class has approximately 2 million members, many of them from Ohio.
California Consumers Say AOL Charged for Cancelled Service
This class action alleges that AOL, a Virginia-based company, continued to charge the credit cards of their customers for monthly services even after those customers ended their AOL subscriptions. The lead plaintiff, Al Mendoza, a California citizen, insisted that he had to cancel his credit card because AOL would not stop charging it on a monthly basis. After the case was filed, AOL appealed the Superior Court's decision to keep the case in California state court. AOL had a contract with all of its subscribers requiring that all disputes would be litigated under Virginia law. The California Court of Appeals held that the proper venue for the consumer class action was in state court (America Online Inc. v. Superior Court). The unanimous court held, "…Virginia law does not allow consumer lawsuits to be brought as class actions and the available remedies are more limited than those afforded by California law…Accordingly, the rights of Mendoza and (all the other) California consumer class members would be substantially diminished if they are required to litigate their dispute in Virginia, thereby violating an important public policy underlying California's consumer protection law." Virginia is one of three states that do not recognize class actions. Accordingly, the court held the contractual clause unenforceable and the case will be tried in California state court.
Plaintiffs Allege Funeral Company Oversold Cemetery Plots and Desecrated Graves
On December 12, 2003, a state judge in Florida granted preliminary approval to a $100 million settlement in a class action against one of largest funeral and cemetery companies in the country. The defendants are Funeral Services of Florida, Inc., and its parent company, Service Corporation International, a Texas-based corporation. The defendants are accused of over-selling cemetery plots and desecrating many graves in order to make room for additional plots. This allegedly resulted in bodies being mixed together, coffins being destroyed, and bodies being thrown in the woods.
Consumers Accuse Behr of Selling Defective Products
Consumers filed suit against Behr, a California-based company, alleging that Behr's products, sold for use on outside wood surfaces, caused extreeme mildew damage to their homes. Behr sells its products through 90 retail outlets in western Washington state. The plaintiff class consists entirely of residents of 19 Washington counties who had used specific Behr products. The class action also alleges breach of contract, breach of good faith and fair dealing, breach of implied warranty, breach of express warranty, and specific violations of Washington's Consumer Protection Act. the State court has already granted partial summary judgment against Behr on the breach of warranty and merchantability issues.
Homeowners Claim a Mortage Company Charged Excess Fees
A class of 590,000 mortgage holders brought suit against GMACM of Pennsylvania, a mortgage corporation. The class members alleged that GMACM collected escrow money that exceeded the permissible amounts under contracts that class members had signed; they charged breach of contract and statutory consumer fraud under Illinois state law. In 1991, the plaintiffs and GMACM entered into a settlement agreement. The settlement provided that GMACM would not collect any excess fees for its 388,000 current mortgages, it would refund to current mortgagees any surplus escrow amounts they had paid, and it would refund a lump sum, using a standard formula, to those whose mortgages they had closed. This settlement was approved by the Illinois state court for Cook County and affirmed by the Illinois appeals court.
Letter Carriers Sue Bayer Over Drug's Allegedly Undisclosed Side Effects
Postal workers given Cipro after the Anthrax attacks of 2001, many of them from New Jersey, have filed a class action in New Jersey state court for damages for harm arising from the drug's undisclosed side effects (Lewis v. Bayer AG). The suit was filed against Bayer AG, the German manufacturer of the drug, and its US subsidiary, based in Pennsylvania, as well as against several New Jersey Hospitals which distributed the drug. The side-effects listed in the suit include joint and tendon injuries; neurologic, cardiologic, or central nervous system disorders; and gastrointestinal disorders.
Rhode Island Claims Lead Paint Poisoned 35,000 Children Since 1993
The state of Rhode Island has filed a class action against eight manufacturers of lead paint. The state alleges violations of Rhode Island's Uniform Trade Practice Act and its Consumer Protection Act, as well as civil conspiracy and unjust enrichment. The state claims that lead paint has poisoned 35,000 children in Rhode Island since 1993. The Attorney General is seeking to hold the lead paint industry accountable for the injuries to these children. The trial date is set for April 2005.
Ford Sells Police Cruisers that Plaintiffs Allege Are Prone to Fire
A state court judge in St. Clair County, Illinois certified a class consisting of Illinois counties in an action filed in July 2003 against Ford Motor Company. The suit focuses on Ford's Crown Victoria vehicles, which were purchased by these counties for use as police cruisers. The suit alleges that these vehicles are prone to fire because of the faulty placement of the fuel tank, which sits behind the rear axle of the car. Earlier this year, the Illinois judge over-seeing this ongoing action ordered Ford to perform extensive new crash tests on the Crown Victoria police car as a sanction against Ford for sending misleading information about the car to plaintiff class members. The plaintiff class is made up of cities and counties across the state of Illinois.
Plaintiffs Allege Jack-in-the-Box Restaurants Responsible for Food Poisonings
A successful state class action was brought against Foodmaker Inc., the parent company of Jack-in-the-Box restaurants. The company agreed to pay $14 million in a class action settlement in Washington state. The class included 500 people, mostly children, who became sick in early 1993 after eating undercooked hamburgers tainted with E. coli 0157:H7 bacteria. The victims suffered from a wide range of illnesses, from more benign sicknesses to those that required kidney dialysis. Three children died. The settlement was approved on September 25, 1996, in King County, Washington Superior Court.
Alabama Residents Sue Monsato for Knowingly Dumped Dangerous Chemicals
For 40 years, Monsanto, a Missouri-based corporation, hid the fact that they had been dumping PCBs, lead, and mustard gas in Anniston, Alabama. Even after the dangers associated with dumping these products became known to Monsanto, they continued polluting the Anniston environment. The chemicals poisoned livestock and food sources consumed by residents of Anniston. When Monsanto, now known as Solutia, was confronted with evidence of its actions, they resisted efforts to clean up landfills and homeowners' property. The residents of Anniston joined in a class action to hold the company accountable. Solutia Inc., has now agreed to pay $600 million in cash to settle claims (Washington Post, 8/21/03)
Nestle Subsidiary Said to Have Sold Sugar-Water as Pure Apple Juice
A class action in California halted deceptive business practices by Beech-Nut Nutrition Corp. and its parent company Nestle. Beech-Nut, based out of New York, was accused of selling sugar-water labeled as pure apple juice for infants. After passing the blame back and forth between companies and suppliers, defendants agreed to a settlement of $3.5 million to reimburse consumers who unknowingly fed their babies sugar-water instead of pure apple juice.
Republished with permission of the Association of Trial Lawyers of America. Updated June 2004