02.22.2017// Actos Reversal in Second Circuit Boosts Plaintiff Antitrust Claims
The Second Circuit Court of Appeals has revived claims by purchasers of the diabetes drug Actos.
The case, In re: Actos End Payor (15-3364) accuses Actos manufacturer Takeda Pharmaceutical Co. Ltd. of acting to delay generic competition for Actos, forcing consumers and third-party payors to pay higher prices for this needed medication.
The revival by the appeals court partially overturned a dismissal of claims from September 2015. The Second Circuit determined that it was not the buyer’s burden to disprove the litany of alternative reasons Takeda offered to explain why Teva Pharmaceuticals Industries Ltd. was allegedly prevented from earlier selling a generic version of Actos. This is a significant result.
The purchasers in this case are represented by Kenneth A. Wexler of Wexler Wallace, Steve D. Shadowen of Hilliard & Shadowen LLP, Michael M. Buchman of Motley Rice LLC, and Jayne A. Goldstein of Pomerantz LLP.
02.08.2017// Court Revives Actos Antitrust Suit
On Wednesday, February 8, 2017 the U.S. Court of Appeals for the Second Circuit partially vacated the dismissal of the pay-for-delay class action claim by purchasers of the diabetes drug Actos. The case, In Re: Actos End Payor Antitrust Litigation, alleges that the brand drug’s manufacturer Takeda Pharmaceuticals is responsible for delaying generic competition by misrepresenting and mischaracterizing the nature of two of its patents to the U.S. Food and Drug Administration.
The appeals court said that the Plaintiffs plausibly alleged that Takeda delayed generic rival Teva’s entry to the market, but not that of other generic manufacturers. The three-judge panel ruled that Plaintiffs had adequately alleged facts supporting their theory of causation against Teva, but found that Plaintiffs had not pled facts that supported their theory of causation against the other generic manufacturers.
“Unlike plaintiffs’ first theory of causation, this second theory does not depend on Teva’s knowledge of Takeda’s description of its patents as drug product patents,” U.S. District Judge Jed S. Rakoff, sitting by designation, wrote in the court’s opinion. “This theory of causation is highly plausible.”
Plaintiffs in this case are represented by Kenneth A. Wexler, Justin N. Boley, and Kara A. Elgersma of Wexler Wallace LLP, Jayne Arnold Goldstein of Shepherd, Finkelman, Miller & Shah, LLP, and Steve D. Shadowen of Hilliard & Shadowen LLP.
02.07.2017// Associate Amy Keller to Speak at WBAI panel on Emerging Issues in Privacy
Wexler Wallace associate attorney Amy Keller will be speaking at the Women’s Bar Association of Illinois’ Emerging Issues in Privacy and Technology Law panel. Along with colleagues from Edelson PC, Greenberg Traurig, and Aon Hewitt, Amy will be discussing how the legal system is adapting to the exponential growth of technology, and how these dramatic shifts affect personal privacy.
Emerging Issues in Privacy and Technology Law is presented by the WBAI’s Privacy Law and In-House Counsel Committees, and will be held on Wednesday, February 15th from 12-1:30 P.M. at the ISBA Mutual Insurance Company. For more information, including registration and directions, please visit the WBAI events page.
02.06.2017// Wexler Wallace Attorney to Co-Chair University of Michigan Club of Greater Chicago’s Go Blue Gala
Associate Tania Yusaf is co-chairing the University of Michigan Club of Greater Chicago’s (UMCGC) Go Blue Gala on Saturday, February 25, 2017.
The event, which will be held at the Ivy Room at 12 E. Ohio St. in Chicago, IL, is a celebration of all things that make it great to be a Michigan Wolverine, with all net proceeds going to benefit the UMCGC’s scholarship endowment.
Each April, the UMCGC awards several scholarships to eligible students from the Chicagoland area. Since 2009, the UMCGC has awarded over $225,000 in scholarship funds to 55 students.
The Gala will feature food selections from a variety of Chicago restaurants, a premium open bar, silent auction items, and special Michigan alumni VIP guests, including 1991 Heisman Trophy winner, Desmond Howard.
For more information on the Go Blue Gala, including ticket sales and sponsorship opportunities , please visit gobluegala.org
01.27.2017// Fourth Circuit Court of Appeals Affirms $3.27 Million Judgement Against Ethicon
The U.S. Court of Appeals for the Fourth Circuit has affirmed the $3.27 million jury verdict against Johnson & Johnson subsidiary Ethicon, denying the company’s appeal asking for either judgement as a matter of law or a new trial.
The suit, Huskey v. Ethicon, Inc., (No. 2:12-cv-05201) was the first case to go to verdict in the Ethicon MDL pending in Charleston, West Virginia, over Ethicon’s allegedly defective transvaginal sling mesh implants. Plaintiffs Jo and Allen Huskey, represented by Edward Wallace and Mark Miller of Wexler Wallace, Fidelma L. Fitzpatrick of Motley Rice LLC and Jeffery M. Kuntz of Wagstaff & Cartmell LLP., alleged that the mesh device used to treat urinary incontinence and pelvic organ prolapse caused permanent and severe complications including chronic pelvic pain, sexual dysfunction, and loss of consortium.
On September 5, 2014, after a nine day trial, the jury returned a unanimous general verdict for the Plaintiff on all five claims, including failure to warn and design defect.
Following the unanimous jury verdict, Ethicon appealed the decision and moved for judgement as a matter of law—or, in the alternative, a new trial—on all five of the Plaintiff’s claims. In its 23 page opinion and order decided on January 26, 2017, the United States Court of Appeals for the Fourth Circuit affirmed that district court committed no reversible error and the Plaintiffs offered sufficient evidence to sustain the jury’s verdict.
In addition to determining that a reasonable jury could conclude the Defendant’s use of a heavyweight polypropylene mesh in their devices constituted a design defect, the court also stated that the jury could reasonably infer from expert testimony that using a lightweight mesh would have reduced the risk of an adverse foreign body response without a loss of effectiveness.
“We’re all very pleased with the ruling and excited for Jo Huskey and the team that worked on the case,” Edward A. Wallace of Wexler Wallace LLP said on Thursday. “Given the length that the court went to explain its reasoning, we hope it can be used to demonstrate to Ethicon that it needs to go ahead and resolve all of these cases for all of these women.”
Wexler Wallace continues to pursue this litigation on behalf of hundreds of other plaintiffs who were harmed by Ethicon’s transvaginal mesh products.
01.27.2017// Of Counsel Thomas A. Doyle to Speak at ABA Midwinter Meeting of the Alternative Dispute Resolution Committee
Wexler Wallace Of Counsel Thomas A. Doyle will be a panelist at the Midwinter Meeting of the Alternative Dispute Resolution Committee in Puerto Vallarta, Mexico.
Tom’s panel, “Employment Arbitration After the Revolution,” will be held on Saturday, January 28th. Tom and fellow panelists will be discussing a recent study that examines if the Supreme Court’s arbitration decisions in recent years have led to more (or fewer) cases filed as employment arbitration.
The event, presented by the American Bar Association’s Section of Labor & Employment Law, is expected to be a modest gathering of legal minds that will draw a wide cross-section of the practice from across the U.S., including employee lawyers, management lawyers, academics and arbitrators.
The Midwinter Meeting of the Alternative Dispute Resolution Committee runs from Thursday, January 26 through Sunday, January 29. For more information on the event, please visit http://www.americanbar.org/groups/labor_law/committees/adrcom/midwinter.html
01.17.2017// Partner Ed Wallace Appointed to Executive Committee in Essure® Product Cases in California JCCP
Wexler Wallace partner Ed Wallace has been appointed to the Plaintiffs’ Executive Committee for the Coordinated Essure® litigation in California against Bayer Corp. The appointment was made by Judge Winifred Y. Smith in the Superior Court of California, County of Alameda as part of a Judicial Council Coordinated Proceeding (JCCP) assigned to Judge Smith. As a member of the Executive Committee, Ed joined fellow Committee members Erin Copeland of Fibich Leebron Copeland Briggs & Josephson; Kim Dougherty of Janet, Jenner & Suggs, LLC; M. Elizabeth Graham of Grant & Eisenhofer P.A.; and Fidelma Fitzpatrick of Motley Rice LLC, who has been named Lead Counsel of the Executive Committee. They are responsible for coordinating the activities of Plaintiffs during all pretrial proceedings.
Essure® is marketed as the only permanent birth control device with a non-surgical procedure. The device consists of coils that are made from nickel and titanium which are implanted into a woman’s fallopian tubes to block sperm from reaching the egg, thus preventing pregnancy.
The Food and Drug Administration (FDA) have announced that over 9,000 women from across the U.S. have voluntarily reported serious and permanent injuries that they believe stem from their Essure® implant. Reported Essure® complications include migration of the device which can cause perforation or tears to the pelvic organs, severe pain, life-threatening ectopic pregnancies, fetal death, and additional surgeries (including total hysterectomies to remove the device and repair internal organs)In October 2016, the FDA required Bayer Corp. to add a black box warning (the FDA’s highest warning level) to Essure® indicating that the product may cause serious injuries or death.
To read the appointment order in full, click here.
01.13.2017// Judge Denies Defendant’s Motion to Decertify, American Family Insurance Lawsuit will Proceed to Trial
An Ohio judge denied the Defendants’ motion to decertify all previously certified classes on Thursday, January 12, 2017 in the case of Jammal, et al. v. American Family Insurance Group, et al. (case no 1:13 CV 437). Judge Donald C. Nugent of Ohio’s Northern District ruled that nothing in the Defendants request to decertify challenges any of the findings made, or any of the circumstances relied on by the court in its initial determination that certification was warranted.
The trial, which alleges that American Family misclassified its agents as independent contractors rather than employees, has been continued until April 3rd, 2017 at 8:30 a.m.
01.05.2017// Whirlpool Sued Over Defective Dishwasher Adjusting Rack
Together with McCallum Hoaglund & Irby, Wexler Wallace LLP filed suit against Whirlpool Corporation related to hundreds of customer complaints concerning certain models of Whirlpool-manufactured dishwashers. According to the Complaint, the upper rack of these dishwashers contain plastic component parts that become brittle and break during regular use of the dishwashers. Whirlpool has allegedly denied thousands of warranty claims related to the part, so consumers have had to pay for repairs and replacements out of their own pockets. Whirlpool has since developed a replacement part made out of metal that many consumers have found to be stronger than the original part; however, Whirlpool has not initiated a recall of its dishwashers, nor has it offered to replace the part for everyone who owns one of these dishwashers.
12.12.2016// Wexler Wallace Appointed to Plaintiffs’ Executive Committee in Case Against General Mills
Wexler Wallace associate Amy E. Keller was recently appointed to the Plaintiffs’ Executive Committee by the U.S. District Court District of Minnesota in a case against General Mills Inc.
The Case (0:16-CV-02869-MJD-BRT Wolosyzn v. General Mills Inc.) alleges that the General Mills Nature Valley granola products are deceptively labeled as “100% natural whole grain oats” while they actually contain the potent chemical herbicide glyphosate. The suit seeks to recover damages for the purchasing class of consumers, including refunds for the alleged falsely advertised products and a court-ordered corrective advertising campaign to make the public aware of the glyphosate-contaminated products.
11.14.2016// Wexler Wallace Attorney Speaks at ABA Conference
On November 12th, Wexler Wallace attorney Tom Doyle served as a panelist in a program entitled “Careers in Labor & Employment Law” at the 10th Annual Labor and Employment Law Conference hosted by the American Bar Association. The ABA event is the leading annual event for Labor & Employment lawyers in the US. This year, the Conference drew 1,400 attendees from all areas of the practice (including lawyers representing employees, unions and management, along with Judges, Arbitrators and Mediators).
10.18.2016// Wexler Wallace Appointed Liaison Counsel in Broiler Chicken Antitrust Lawsuit
Wexler Wallace LLP was recently appointed Liaison Counsel for the Indirect Purchaser Plaintiff Class in an antitrust lawsuit against Koch Foods Inc., Tyson Foods Inc., Perdue Farms, and others. Gustafason Gluek PLLC and Cotchett Pitre & McCarthy LLP will serve as Interim Co-Lead Counsel for the Indirect Purchaser Plaintiff Class. The case is pending in Chicago.
The case involves allegations that the Defendants’ violated antitrust laws by colluding to increase the price of “Broilers,” chickens raised for meat consumption to be slaughtered before the age of 13 weeks, by limiting production and exchanging information regarding pricing, capacity and sales volume. The lawsuit involves two purchaser classes, Direct Purchasers (who purchased the Broilers directly from the Defendants) and Indirect Purchasers (who purchased the Broilers through a distributer for resale or personal consumption). The lawsuit seeks financial relief for the parties damaged by the alleged collusion.
10.06.2016// Electrolux Must Face The Heat In Defective Dishwasher Row
Law360, New York (October 5, 2016, 2:49 PM EDT) — An Illinois federal judge on Tuesday said Electrolux Home Products Inc. cannot escape a proposed class action alleging its dishwashers spontaneously ignite and cause flooding, concluding the facts are strong enough to bring to court.
U.S. District John Z. Lee said plaintiff Teresa Elward has sufficiently addressed the “who, what, when, where and how” of her breach of warranty and fraud allegations against the dishwasher manufacturer, providing specific examples that show the devices lasted between nine months to two years — instead of nine to 11 years — before they unexpectedly overheated and caught fire.
Electrolux, the world’s second-largest appliance maker, had moved to dismiss suit in July, saying Elward and her proposed class failed to state a claim or offer specific fraud allegations.
But the court disagreed, saying “the well-pleaded complaint describes the who, what, when, where and how of the fraud in painstaking detail.”
That complaint was filed in November and alleges Electrolux’s practice of selling defective dishwashers, which catch fire and cause property damage even when the dishwasher is not running, violates the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Uniform Deceptive Trade Practices Act.
Elward claims Electrolux, which sells dishwashers under its own name as well as other brand names including Frigidaire, received complaints about its dishwashers catching fire as early as 2007 and even recalled several models in the U.K. and Australia, but not the U.S.
Despite these complaints, Elward says, Electrolux hid its dishwashers’ safety risks and continued to sell the products, giving no warnings to customers about replacing their units.
Elward, who says the company knew customers’ expected that their dishwashers function without overheating and causing damage, is seeking compensation for “catastrophic” property loss other than the defective washer.
On Tuesday, Judge Lee allowed most of the suit to go forward, but did drop two allegations from the suit. Responding to Electrolux’s argument that there was no threat of future harm, the judge held that she was not entitled to injunctive and declaratory relief. He also tossed Elward’s unjust enrichment claim, after the company argued the claim could not stand without showing improper conduct.
An attorney for Electrolux did not immediately respond to a request for comment Wednesday.
Elward is represented by Edward A. Wallace, Amy E. Keller and Adam M. Prom of WexlerWallace LLP, Arthur Stock and Shannon Carson of Berger & Montague PC, and Gregory F. Coleman and Lisa A. White of Greg Coleman Law PC.
Electrolux is represented by David S. Osterman, Thomas J. O’Grady, Daniel Ian Mee, James W. Ozog and Jennifer L. Rediehs of Goldberg Segalla LLP.
The case is Elward et al. v. Electrolux Home Products Inc., case number 1:15-cv-09882, in U.S. District Court for the Northern District of Illinois.
–Editing by Edrienne Su.
This article originally appeared on Law360
10.06.2016// Case Against Flushable Wipe Manufacturers Will Proceed
Wexler Wallace LLP is one of several firms representing municipalities that operate water treatment facilities against corporations that manufacture and sell wipes that are labeled as “flushable.” The municipalities claim that Defendants’ wipes are not actually “flushable” because they cause clogs and back-ups in the municipalities’ sewer systems. The municipalities seek, among other relief, recovery for the expenses they have incurred due to the clogs, back-ups and other damages to the sewer systems. Defendants sought to dismiss the municipalities’ claims; however, Chief Judge John R. Tunheim in the United States District Court for the District of Minnesota largely denied defendants’ motions on September 28, 2016. The municipalities may proceed with, among other claims, breach of express warranty, unlawful trade practices, false advertising, and consumer fraud.
09.29.2016// Wexler Wallace Appointed to Plantiffs’ Executive Committee in 3M Class Action Suit
Wexler Wallace partner, Edward Wallace, was recently appointed by the United States District Court for the District of Minnesota as a member of the Plaintiffs’ Executive Committee in a class action lawsuit against 3M Company. Plaintiffs allege that 3M Company knowingly marketed a product that failed at an alarming rate. The product, Lava Ultimate Restorative, was marketed as a means to provide dentists with the ability to perform chairside dental restorations that had previously been reserved for the operating room. However, it debonds up to 50% of the time. Wexler Wallace is one of several firms prosecuting this litigation.
09.23.2016// Wexler Wallace Appointed Liaison Counsel in DeVry Securities Class Action
Wexler Wallace LLP was recently appointed Liaison Counsel in a securities class action against DeVry Education Group, Inc. and others. Spector Roseman Kodroff & Willis, P.C. will be Lead Counsel. The case involves allegations that DeVry, one of the largest degree-granting higher education systems in the United States, deceptively claimed, among other things, that 90% of its graduates actively seeking employment landed jobs in their field of study within six months of graduation. The lawsuit seeks monetary relief for investors who suffered losses due to the decline in market value of DeVry’s securities following disclosures that DeVry could not substantiate its employment-related claims.
09.21.2016// Wexler Wallace Appointed Interim Co-lead Class Counsel in Consumer Class Action Against Motorola
Wexler Wallace partner, Mark Miller, was recently appointed by the United States District Court for the Northern District of Illinois as interim co-lead class counsel in a consumer class action lawsuit against Motorola Mobility and Lenovo, Motorola’s parent company, alleging that Motorola breached its express warranty to repair, replace, or refund the purchase price of Motorola devices that fail due to defects within 12 months of purchase. Wexler Wallace is prosecuting this litigation along with co-lead counsel, Daniel Girard of Girard Gibbs LLP.
09.21.2016// Wexler Wallace Attorneys Recognized by Super Lawyers
Three Wexler Wallace LLP partners and one of its associates have been recognized as 2016 Illinois Super Lawyers. Founder and managing partner Kenneth A. Wexler makes his ninth appearance on the list, having been named every year since 2008. Named partner Edward A. Wallace was recognized as a Super Lawyer for the fourth year in a row. Illinois Super Lawyers also recognized partner Mark R. Miller and associate Amy E. Keller as Rising Stars.
Super Lawyers is a rating service of outstanding lawyers who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations. Wexler Wallace is proud to have four of its attorneys recognized in such an elite group of attorneys.
08.25.2016// Wexler Wallace LLP Files Lawsuit Against General Mills for Use of Synthetic Biocides in “All Natural” Products
Together with co-counsel The Richman Law Group, Zimmerman Reed, LLP, Terrell Marshall Law Group PLLC, and Levi & Korsinsky LLP, Wexler Wallace filed a lawsuit in the District of Minnesota against General Mills, Inc. for labeling certain products as “all natural” when, in fact, the products contain glyphosate, a potent biocide and probable human carcinogen and endocrine disruptor with detrimental health effects that are still becoming known.
The lawsuit alleges that glyphosate makes its way into General Mills’ products (including granola bars, biscuits, and oatmeal cups) when oat crops are sprayed with glyphosate in order to dry them out and produce an earlier, more uniform harvest—a practice with no health benefits, meant only to increase yield, and therefore, profit.
Bloomberg reported on the lawsuit earlier today.
For more information, or to see a copy of the complaint, click here. If you would like to speak with one of our attorneys regarding food safety concerns for products that are labeled as “all natural,” click here.
08.05.2016// Thomas A. Doyle Published in The Antitrust Lawyer
A recent article written by Wexler Wallace attorney Thomas Doyle was published in The Antitrust Lawyer, a newsletter published by the Federal Bar Association, Section of Antitrust and Trade Regulation. The article examines the significance of the last section of the Supreme Court’s opinion on a high-profile class action case involving Tyson Foods Inc. The Supreme Court ruled that questions regarding uninjured class members “should be deferred until the disbursement stage, because then the record will show which class members can share in a class-wide award.” Tom’s article discusses how the Supreme Court’s decision will help guide Antitrust practitioners going forward.
To read the article in its entirety, click here.
08.03.2016// Amy E. Keller Elected to Board of Public Justice
Wexler Wallace LLP is pleased to announce that Amy E. Keller was recently elected to the Board of Directors of the Public Justice Foundation, a nationwide 501(c)(3) charitable organization supporting the pursuit of high impact lawsuits to combat social and economic injustice, protect the Earth’s sustainability, and challenge predatory corporate conduct and government abuses. The Foundation’s membership includes leading trial lawyers, appellate lawyers, consumer advocates, environmental attorneys, employment lawyers, civil rights attorneys, class action specialists, law professors, law students, and public interest advocates. Wexler Wallace congratulates Amy on this well-earned achievement and is looking forward to a productive forthcoming term.
07.29.2016// Defective Dishwashers Case Against Electrolux Will Proceed
Purchasers of dishwashers sold under the Frigidaire or Electrolux brand names can proceed on nearly all of their claims against Electrolux Home Products, Inc. after Judge Milton I. Shadur of the U.S. District Court for the Northern District of Illinois largely denied Electrolux’s Motion to Dismiss last week. Plaintiff alleges that the dishwashers are dangerously defective in that their electrical systems overheat and catch fire, burning holes through the dishwasher, causing flooding, and/or causing the entire dishwasher and surrounding area to ignite and burn. More specifically, many consumers, including Plaintiff, have reported that the heating element in their dishwashers burned a crack or hole in the bottom of the dishwasher, causing significant flooding when the dishwasher is operating along with smoke and fire damage.
Electrolux filed a motion to dismiss Plaintiff’s complaint, but Judge Shadur held that the follow claims can all move forward: implied warranty, strict liability design defect, strict liability failure to warn, negligence, negligent failure to warn, violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, and fraudulent concealment. In doing so, Judge Shadur highlighted Plaintiff’s allegations that “expressly describe Electrolux’s extensive knowledge of the hazard of its dishwashers catching on fire, knowledge that caused it to recall its dishwashers outside of the United States but not in this country.”
Plaintiffs are represented by Wexler Wallace, along with Berger & Montague, P.C. and Greg Coleman Law PC.
If you purchased a dishwasher sold under the Frigidaire or Electrolux brand names that has overheated, causing fire and/or flooding, or would like more information about this action, please contact us at 312-346-2222 or fill out our online form.
07.21.2016// Asacol Plaintiffs’ Monopolization Claims Proceed
End-Payor Purchasers of Asacol (400mg), Asacol HD, and Delzicol can proceed on nearly all their monopolization claims against Allergan plc, Allergan, Inc., Allergan USA, Inc., Allergan Sales, LLC, and Warner Chilcott Limited after Judge Denise Casper of the U.S District Court of the District of Massachusetts largely denied Defendants’ motion to dismiss. The District Court held that Plaintiffs adequately alleged an unlawful anticompetitive “product hop” by the Allergan Defendants but it dismissed Plaintiffs’ second claim against Allergan and alleged co-conspirators Zydus Pharmaceuticals USA Inc. and Cadila Healthcare Limited for allegedly entering into a reverse payment “pay-for-delay” scheme.
Judge Casper’s decision adds to a growing number of decisions that have recognized the adequacy of pleadings alleging anticompetitive effects deriving from pharmaceutical manufacturers’ “product hopping” business practices. As the District Court noted: “Other district courts that have considered product hopping allegations at this stage concur, concluding that well-pled allegations about consumer coercion in light of the distinct nature of the pharmaceutical drug market may establish plausible antitrust liability.” Opinion, No. 15-cv-12730, ECF No. 110, at 20 (D. Mass. July 20, 2016). To read the opinion in its entirety, click here.
Plaintiffs are represented by Wexler Wallace, Wagstaff & Cartmell, Gustafson Gluek, Spector Roseman Kodroff & Willis, and others.
06.22.2016// BMW Again Denied Bid To Shake Leaky Trunk Suit
Law360, New York (June 17, 2016, 2:35 PM ET) By Dani Meyer — A New York federal judge on Thursday blocked BMW’s bid to shut down a proposed class action alleging a design defect that leads to electrical damage through leaky trunks, while also finding that the lead driver can obtain some discovery once he narrows the scope of his request.
U.S. District Judge Katherine B. Forrest said that to the extent BMW AG sought to dismiss named plaintiff George Catalano’s New York deceptive business practice claim, the automaker is effectively asking the court to revisit its March ruling upholding the claim.
“Even if the court construes defendants’ arguments relating to the [deceptive practice] claim as a motion for reconsideration, defendants here fail to meet the requisite standard,” Judge Forrest ruled.
As for Catalano’s New York fraudulent concealment claim, which the court dismissed in March with leave to replead, Judge Forrest said the revised allegations are enough to beat BMW’s attempt to get the claim dismissed.
“Although perhaps still not the strongest allegations of fraudulent concealment, the court concludes that the [second amended complaint] does enough to meet the requirements of Rule 9(b) and plead a plausible claim,” Judge Forrest said.
In the same order, Judge Forrest agreed to grant in part Catalano’s motion to compel BMW to hand over documents and information that are located in Germany, saying he can use the Federal Rules of Civil Procedure to pursue the discovery rather than the Hague Convention process as BMW had requested.
“However, Catalano’s fifty-five document requests and twenty-four interrogatories are excessive and overbroad, especially in light of the particular concerns raised by the fact that the documents and information that Catalano seeks are located in Germany,” Judge Forrest said. “The court will not grant Catalano discovery as broad as if he were seeking documents and information located in the United States from a domestic party.”
She ordered the parties to meet and confer to try and narrow the scope of Catalano’s discovery request.
Amy Keller, an attorney for Catalano, told Law360 in a Friday email that “we look forward to litigating this case and obtaining the discovery necessary for our underlying claims, including from BMW AG as the designer of these vehicles.”
Catalano sued BMW in June on behalf of all New York owners and lessors of X3 and X5 models, claiming his pre-owned 2007 BMW wagon purchased in 2010 unexpectedly shut down two years later while he was driving with his wife on a four-lane highway.
When the car was brought to a dealership for inspection, it found about two inches of standing water had accumulated underneath the trunk as a result of clogged sunroof drains, which caused electrical components located around the rear cargo area to corrode and fail.
Despite knowing of the issue due to numerous customer complaints, including those made with the National Highway Traffic and Safety Administration since 2008, Catalano said BMW did not recall the vehicles or notify many current owners of the potential problem. Instead BMW issued a technical service bulletin, which Catalano said he never received.
If he had been made aware of the potential defect, Catalano said he would never have purchased his BMW.
Catalano’s allegations are similar to those in another suit filed against BMW in California in which named plaintiffs Monita Sharma and Eric Anderson allege that a design defect can lead to electrical damage through leaky trunks.
Representatives for BMW didn’t immediately respond Friday to a request for comment.
Catalano and the proposed class are represented by Edward A. Wallace and Amy E. Keller of Wexler Wallace LLP, William A. Kershaw, Stuart C. Talley and Ian J. Barlow of Kershaw Cutter & Ratinoff LLP, Stephen M. Harris of The Law Offices of Stephen M. Harris PC, Robert L. Starr of The Law Offices of Robert L. Starr and Joseph R. Santoli of The Offices of Joseph R. Santoli.
BMW is represented by Rosemary J. Bruno, Christopher J. Dalton and Lauren A. Woods of Buchanan Ingersoll & Rooney PC.
The case is Catalano v. BMW of North America LLC et al., number 1:15-cv-04889, in the U.S. District Court for the Southern District of New York.
–Additional reporting by Kali Hays. Editing by Kelly Duncan.
This article first appeared on Law 360.
06.07.2016// Wexler Wallace Welcomes New Law Clerk Brian M. Micic
Brian M. Micic recently joined Wexler Wallace LLP as a law clerk, and provides legal assistance to the associates and partners at the firm. He currently attends Indiana University Maurer School of Law, where his focus has been on business and corporate litigation. During his time at Wexler Wallace, Brian hopes to learn more about the firm’s diverse practice areas and discover new facets of the law.
When asked about why he decided to intern at Wexler Wallace, Brian replied:
“When I researched Wexler Wallace, what initially stood out to me was their office environment and dedication to working closely with their clientele, especially in class action lawsuits. On a more personal level, they do a lot of work right here in my hometown of Chicago, so it’s nice to be with a company that gives back to the community.”
Before joining Wexler Wallace, Brian worked for Microsoft’s legal department in China and previously interned for Indiana Court of Appeals Judge Edward W. Najam, Jr. During that time, Brian learned a great deal about the legal field and gained valuable experience behind the bench. Now, working for Wexler Wallace, he is looking forward to gaining experience in front of the bench.
Brian developed an interest in law from an early age. He strongly believes that practicing law provides an opportunity to influence society in a positive way, allowing him to give back to the community while doing something he sincerely enjoys. In his spare time, Brian likes to play sports and participate in outdoor activities such as camping, mountain climbing and hiking.
01.06.2016// Wexler Wallace Files Suit on Behalf of Well-Known Detroit Artist in Fight to Protect The Illuminated Mural
Yesterday, Wexler Wallace LLP filed a lawsuit with Gupta Wessler PLLC seeking to protect the creative and intellectual property rights of Katherine Ann Persicone, a well-known artist in Detroit, Michigan, whose work, “The Illuminated Mural” is being threatened by new development. The lawsuit is being covered by several news outlets, including Deadline Detroit, Fox 2 News, Curbed, The Atlantic’s City Lab, and Detroit Free Press.
12.28.2015// Sears’ Motion to Dismiss Largely Denied
Purchasers of Craftsman riding lawnmowers can proceed on nearly all of their claims against Sears after Judge Manish S. Shah of the U.S. District Court for the Northern District of Illinois largely denied Defendants’ Motion to Dismiss last week. Plaintiffs allege that Sears sold certain models of Craftsman riding lawnmowers with a dangerous defect that makes them prone to catching on fire. Plaintiffs allege that the lawnmowers’ fuel lines are inadequately secured and have a propensity to dislodge or become worn from friction, which causes fuel to leak onto the mowing bed.
Sears filed a motion to dismiss the complaint and a separate motion to strike the class allegations from Plaintiffs’ complaint. Sears argued, in part, that the lawnmowers were merchantable, because they were capable of performing their essential function of cutting grass. The Court rejected this argument by saying it is reasonable to infer that the lawnmowers’ predisposition to having dislodged fuel lines that can leak and cause a fire is “a condition [that] would not pass without objection in the trade of riding lawnmowers.”
Judge Shah held that Plaintiffs’ express warranty, implied warranty of merchantability, negligence, strict liability, and injunctive and declaratory relief claims can all move forward. The Judge also denied Sears’ motion to strike Plaintiffs’ class allegations. To read the complaint in its entirety click here. Judge Shah’s order is available here.
Plaintiffs are represented by Wexler Wallace, along with Berger & Montague, P.C. and Greg Coleman Law PC.
If you purchased a Craftsman lawnmower from Sears that has inadequately secured fuel lines and/or has caught on fire, or would like more information about this action, please contact us at 312-346-2222 or fill out our online form.
09.04.2015// Wexler Wallace Associate Named “Top 40 Under 40” Lawyer by National Trial Lawyers
Corey G. Lorenz has been selected to the National Trial Lawyers: Top 40 Under 40. The Top 40 Under 40 List is comprised of lawyers “who exemplify superior qualifications, trial results, and leadership.” Corey has been recognized specifically for her work as a Civil Plaintiff trial lawyer.
Corey began working at Wexler Wallace in early 2012 shortly after graduating from the DePaul University College of Law. She has devoted her practice to mass tort litigation working with plaintiffs who have been injured by a variety of different medical devices and pharmaceutical products, including vaginal mesh, metal-on-metal hips, Yaz/Yasmin, Granuflo and Zofran, amongst others. In August 2014, Corey was a member of the Huskey trial team, which achieved the first verdict in federal court involving a transvaginal mesh sling. This bellwether trial resulted in a verdict of $3.27 million on behalf of the plaintiff and advanced the litigation on behalf of thousands of women. Corey played an integral role in all areas of trial preparation and performed the trial examinations of several key witnesses. She is currently involved in upcoming transvaginal mesh trials pending around the country. In addition, Corey served as a panelist at the 2015 HarrisMartin’s MDL Conference on Zofran and has written for the ABA’s Section of Litigation Product Liability News and Development blog. We congratulate Corey on this honor and are proud to have her as a member of the Wexler Wallace team.
09.02.2015// 7th Circuit Affirms Class Certification in Overtime Case
On Monday, the United States Court of Appeals for the Seventh Circuit affirmed the Order certifying a class in Mariseli Gomez Bell v. PNC Bank. Wexler Wallace, along with our co-counsel, represents the Plaintiff, a former employee at PNC Bank who is seeking compensation under Illinois law and federal law for unpaid overtime hours. We also represent the certified class, which includes PNC Bank’s non-exempt employees at certain branches in Illinois. The Plaintiff alleges PNC Bank had an unofficial policy or practice to deny proper overtime compensation and seeks an award for damages in the form of unpaid overtime. To read the Court’s full opinion, click here. To read more about the case, click here.
08.24.2015// Electrolux’s Limited Interpretation of Its Own Warranty Rejected; Motion to Dismiss Denied
A case against Electrolux alleging the company manufactured and sold defective washing machines will proceed after Judge Robert N. Scola, Jr. of the U.S. District Court for the Southern District of Florida denied Defendant’s Motion to Dismiss today. The complaint alleges that Electrolux sold certain models of front-loading washing machines that contain serious design defects, allowing mold, mildew, and “biofilms” to accumulate within the washing machine. The mold and mildew can produce an odor which adheres to clothes and permeates the owner’s home. The defendant sold these washing machines under the Frigidaire, Electrolux, and Kenmore brands.
Electrolux filed a motion to dismiss the complaint, and argued that the washing machines’ ten-year warranty for non-cosmetic defects applied to “non-cosmetic defects in the wash tub drive motor.” Because of that, Electrolux argued, the machines’ limited one-year warranty really applied to the Plaintiffs’ claims. The Court rejected Electrolux’s narrow interpretation:
“Another problem with Electrolux’s proposed interpretation is that, presumably, the wash tub drive motor is mounted inside the washing machine’s outer frame, not visible to the consumer during normal use. Why would a consumer have occasion to ever see, much less complain about, a cosmetic defect to a non-visible component? This case is about a washing machine, not a Ferrari 458 Spider with a glass hood—a situation where a cosmetic defect to the motor would be noticed.”
The judge denied the rest of Electrolux’s arguments to dismiss the express and implied warranty claims, and Plaintiffs’ declaratory relief claim. To read the complaint in its entirety, click here.
Wexler Wallace has similar cases pending in Georgia (for consumers in California and Texas) and West Virginia that are in various stages of litigation. If you own a front-loading washing machine and are finding mold or mildew deposits on your clothes or inside your machine, or would like more information about this action, please contact us at 312-346-2222 or fill out our online form.
08.19.2015// Judge Goodwin Denies Ethicon’s Post-trial Motions, Huskey Verdict Stands
Today Judge Joseph R. Goodwin of the Southern District of West Virginia denied Defendant Ethicon, Inc.’s Renewed Motion for Judgment as a Matter of Law or, in the Alternative, for a New Trial in Huskey v. Ethicon (Case No. 12-cv-05201, S.D. W.V.). This case was tried on behalf of Jo Huskey and her husband Allan Huskey to a jury over nine days in August 2014. Ed Wallace of Wexler Wallace, Fidelma Fitzpatrick of Motley Rice LLC and Jeff Kuntz of Wagstaff & Cartmell, led this case on behalf of the Huskey family.
A unanimous eight-person jury found in favor of the Plaintiffs on September 5, 2014, and awarded them $3.27M in damages. At issue was Ethicon’s TVT-O product, a pelvic mesh device used to treat stress urinary incontinence. The jury found against the defendant on all claims, including failure to warn, design defect, negligence, and loss of consortium.
This was the first trial to go to verdict in the Ethicon MDL pending in Charleston, West Virginia, and was the first verdict involving a transvaginal sling mesh in federal court. Presently, the Ethicon MDL is the largest in the country with more than 26,000 cases.
“We look forward to upholding the jury’s verdict through Ethicon’s inevitable appeal. We hope at some point, however, Ethicon actually listens to the jury and their resounding verdict in favor of Jo Huskey and women everywhere who were injured by Ethicon’s transvaginal mesh,” said Wexler Wallace partner Edward Wallace.
Ethicon Inc., a subsidiary of Johnson & Johnson, asked the court for a directed verdict, or in the alternative, a new trial on the grounds that: the jury’s findings were against the clear weight of the evidence; the court should have given the jury an instruction based on comment K; and the court’s evidentiary rulings prejudiced Ethicon. Judge Goodwin rejected all arguments—holding that Ethicon had not demonstrated that the jury’s unanimous verdict was unreasonable or that any grievous error had occurred. To the contrary, Judge Goodwin commented on the particular strength of plaintiffs’ design defect claim; stating: “The evidence on the defective design claim is particularly strong and is capable of upholding the verdict on its own.”
Wexler Wallace continues to pursue this litigation on behalf of hundreds of other plaintiffs who were harmed by Ethicon’s transvaginal mesh products.
06.22.2015// Amy Keller Discusses Adaptive Re-Use of Landmarked Buildings to Sold-Out Crowd at the Chicago Motor Club
On June 18, 2015, associate Amy Keller discussed her efforts with the Chicago Art Deco Society to obtain Chicago landmark status for the 1928 Art Deco Chicago Motor Club in front of a sold-out crowd of 150 attendees. The Holabird & Root building previously served as the headquarters for the Chicago chapter of the American Automobile Association, but sat vacant since 1996. Recognized as the “linchpin” in the Society’s preservation efforts by CADS President Mark Allen G. Garzon, Ms. Keller described prior attempts to redevelop the building, and the suggestion for landmark status she drafted in 2010 which led to the building’s eventual landmarking. Extensive restoration efforts since the building’s landmarking led to its redevelopment as a Hampton Inn. Ms. Keller, who recently gave an interview about the project for The Architect’s Newspaper, recognized the impact of the building’s restoration when she said, “Here we are, in a building which demonstrates: yes, adaptive re-use is not only possible, but it’s exciting,” before recognizing the developer, architects, and artisans for their phenomenal restoration work via the presentment of the Joseph Loundy Preservation Award.
For more information on the Chicago Art Deco Society and Amy Keller’s preservation work, you can visit www.chicagodeco.org.
05.12.2015// Amy Keller to Moderate Panel on Challenges to Class Certification
Wexler Wallace associate Amy Keller will moderate the Chicago Bar Association’s 2015 Annual Spring Seminar on Thursday, May 14. The Seminar, titled “Challenges to Class Membership: Ascertainability, Standing, and Injury,” will feature commentary from noted plaintiff and defense attorneys. The topic areas, concerning challenges to “ascertainability” as well as absent class member injury and Article III standing, are particularly timely given the Supreme Court’s recent decision to grant certiorari in Spokeo, Inc. v. Robins, and proposed House bill 1927. Keller is active within the CBA’s Class Action Committee and was the Committee’s Reporter last year, where she tracked class cases in the Seventh Circuit and circulated a monthly newsletter, and is serving as the Seminar Director this year. For more information on the event (including information on how to register and receive CLE credit for attendance), you can visit the Chicago Bar Association’s website here.
04.24.2015// Judge Denies Summary Judgment, Litigation Continues in American Family Case
On Wednesday, Judge Donald C. Nugent of the United States District Court for the Northern District of Ohio rejected American Family’s second attempt to prevent a proposed class action from proceeding. Wexler Wallace, along with co-counsel, represents current and former agents employed by American Family who allege they were denied benefits under the Employment Retirement Income Security Act. The complaint alleges that the agents were misclassified as independent contractors by American Family when the Company treated them as employees – a misclassification that the complaint alleges not only cost plaintiffs’ retirement and health benefits, but also unjustly enriched the company.
Judge Nugent declined to grant summary judgment to American Family on its argument that the named Plaintiffs’ claims were time-barred. The Court explicitly rejected American Family’s argument that the claims asserted by the Plaintiffs accrued upon execution of the Agency Agreement. The Court also denied American Family’s request for summary judgment on its affirmative defense that Plaintiffs had failed to exhaust their administrative remedies, holding, “Defendants have provided no evidence or reason to convince the Court that any attempt by these agents to pursue a claim for benefits under ERISA administrative procedures would have been any thing other than futile.” The Court then considered American Family’s motion for summary judgment on whether agents are employees or independent contractors, considering many of the factors that relate to American Family’s right to control its agents. The Court concluded that the ultimate answer to the question of which way the scale tips requires a fact-intensive analysis better left for trial, and denied American Family’s motion.
This is the second win for plaintiffs provided by Judge Nugent in this case. He also denied America Family’s motion to dismiss in its entirety in August 2013.
04.15.2015// Wexler Wallace Appointed Co-Lead Counsel in Celebrex
Wexler Wallace LLP, along with co-counsel from Spector Roseman Kodroff & Willis PC, has been named co-lead counsel for a proposed class of end-payors in the case In re Celebrex Antitrust Litigation. Judge Arenda L. Wright Allen entered the order on April 13. The complaint, which was filed in the Eastern District of Virginia, alleges that defendant Pfizer, Inc. and its subsidiaries implemented an unlawful scheme to suppress generic competition for the drug Celebrex. Click here for more information about the Celebrex antitrust litigation. You can read more about Wexler Wallace’s antitrust litigation practice here.
02.19.2015// Wexler Wallace LLP in the News: CBS Interviews Partner Ed Wallace About Moldy Washer Case
Ginger Allen, a reporter with CBS’s Dallas-Fort Worth station, recently aired an investigative news piece regarding consumer complaints about moldy front loading washing machines and the class action litigation that has sprung from them. Allen interviewed Michael Vogler, who claimed he discovered mold inside his Frigidaire front-loading washing machine after his allergies worsened and he found a streak of mold on one of his clean shirts. In 2008, Wexler Wallace, along with co-counsel, filed a class action lawsuit on behalf of Mr. Vogler and others regarding this defect. Plaintiffs allege in their complaint that certain models of Frigidaire-branded front-loading washing machines contain a defect which cause mold or biofilm to grow inside the machines. The film causes a noxious odor, permeating consumers’ clothing and homes.
Companies that make these machines, including Electrolux, Whirlpool, Bosch, and LG Electronics, claim this isn’t a widespread problem and can be easily solved with routine maintenance. However, the maintenance requires consumers to clean in difficult-to-reach areas of their machines, and—in the case of the lawsuit against Electrolux concerning its Frigidaire machines—wasn’t available to consumers when they first purchased their machines. When Mr. Vogler contacted Electrolux about the problem, he was told by a company representative that he needed to purchase a $200 part to fix the issue.
Ed Wallace, who was interviewed by Allen for the piece, said, “Companies rip people off, $200 to $300 at a time. It’s just not fair. . . . The company knew there was a problem as early as April 2007. And rather than recall the machines and let consumers know, they continued to sell the machines.”
A federal court granted Wexler Wallace’s Motion for Class Certification in October 2013, which would allow the case to move forward on behalf of all individuals in California and Texas who purchased these machines. Electrolux, the Defendant in this case, has since filed a petition to appeal the ruling, which is currently pending in the United States Court of Appeals for the Eleventh Circuit.
For more information about the case, please click here. If you have purchased a front loading washing machine and would like to speak with an attorney, please fill out our contact form. To watch Ms. Allen’s investigative report, click here.
02.17.2015// Tom Doyle is Panelist at ABA Midwinter Meeting
Tom Doyle, of Wexler Wallace, was a Panelist at the Midwinter Meeting of the ABA’s Alternative Dispute Resolution Committee, which is part of the Section on Labor & Employment Law. Tom spoke as part of a Panel on developments in the law regarding arbitration and mediation, with an emphasis on recent decisions from the various Courts of Appeals. The meeting was in Palm Springs, CA from February 12-15, 2015.
02.16.2015// Kenneth Wexler to Speak About Reverse Payment Antitrust Litigation
Wexler Wallace partner Kenneth Wexler will speak on Tuesday, Feb. 17 at the DePaul University College of Law about reverse payment antitrust litigation in the wake of the Supreme Court’s landmark Actavis decision. Ken’s lecture, which is being presented by DePaul’s College of Law Health Law Institute, will begin at 4:45 p.m. For more information about Ken’s background and antitrust experience, please visit his bio page. For more information or to register for the event, please visit the event page.
01.21.2015// First Circuit Denies Nexium Defendants’ Motion to Voluntarily Dismiss Their Appeal and Affirms Certification of the End-Payor Class
In two decisions entered today, the First Circuit Court of Appeals denied defendants’ request to voluntarily dismiss their appeal concerning the class certification decision entered in the In re Nexium Antitrust Litigation while affirming the district court’s certification of the End-Payor Class. Judge Young, the district judge overseeing the Nexium litigation, certified the End-Payor Class—comprised of Nexium consumers and third-party payors, such as insurers and health and welfare funds—in late 2013. On June 5, 2014, defendants filed their appellate brief with the First Circuit, asking the court to overturn Judge Young’s certification decision. Managing Partner of Wexler Wallace, Kenneth A. Wexler, argued the appeal before the First Circuit on July 31, 2014.
The Nexium case went to trial before Judge Young in October 2014. After a six-week trial, the jury returned a verdict on December 5, 2014. The jury made key findings in favor of the plaintiffs, including that: 1) AstraZeneca exercised market power within the relevant market; 2) the settlement of the AstraZeneca-Ranbaxy patent litigation included a large and unjustified payment by AstraZeneca to Ranbaxy; and 3) AstraZeneca’s Nexium settlement with Ranbaxy was unreasonably anticompetitive (i.e., the anticompetitive effects of that settlement outweighed any procompetitive justifications). The jury ultimately returned a verdict in favor of AstraZeneca and Ranbaxy, however, finding that had it not been for the unreasonably anticompetitive settlement, AstraZeneca would not have agreed with Ranbaxy that Ranbaxy might launch a generic version of Nexium before May 27, 2014. Plaintiffs have since moved for a new trial, and End-Payor Plaintiffs have moved for injunctive relief related to the jury’s findings on the first three questions of the verdict form.
On December 10, 2014, defendants asked the First Circuit to dismiss their appeal of the district court’s decision certifying the End-Payor Class. The First Circuit denied defendants’ request, stating in its January 21, 2015 Order:
“Defendants here should not be able to circumvent this panel by dismissing an interlocutory appeal on an issue they can later press again before a different panel in an appeal after final judgment. A party should not be able to ‘manipulate the formation of precedent by dismissing [an appeal].’”
In a separate Opinion, the First Circuit affirmed Judge Young’s certification of the End-Payor Class, holding that “class certification is permissible even if the class includes a de minimis number of uninjured parties.” Opinion, 14-1521, at 6 (Jan. 21, 2015).
To read the First Circuit’s Order in its entirety, please click here. To read the First Circuit’s Opinion in its entirety, please click here. To learn more about the case generally, please visit the Nexium Antitrust case page.
01.14.2015// Wexler Wallace Partners Recognized by Super Lawyers
Three Wexler Wallace partners have been recognized as 2015 Illinois Super Lawyers. Founder and managing Partner Kenneth Wexler makes his eighth appearance on this list, having been named every year since 2008. Named partner Edward Wallace was recognized as a Super Lawyer for the second year in a row. Partner Mark Miller is recognized as a 2015 Rising Star. He also received this distinction in 2012, 2013 and 2014.
Super Lawyers is a rating service of outstanding lawyers who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations. Wexler Wallace is proud to have three of its partners recognized in such an elite group of attorneys.
Wexler Wallace’s Super Lawyers profile can be see in the February 2015 issue of Chicago Magazine or here.
01.12.2015// Judge Rules Class Action Lawsuit Against BMW for Faulty Electronics and Flooding Can Continue
Last week, Judge Maxine M. Chesney ruled against BMW in two motions filed in the U.S. District Court for Northern District of California and will let a class action against BMW alleging concealed design defects causing trunk leaks and electrical problems in certain vehicles proceed. Plaintiffs allege that BMW’s X5, X3 and 5-series vehicles were designed with a defect that leaves certain electrical components prone to water damage. According to the complaint, some vital electrical components are located in the lowest part of the cars’ trunks. Their location makes them prone to damage, and damages to those components can cause the car to lose power while in operation. In the case of one of the named plaintiffs, she alleges that her car became inoperable while she was driving on the highway.
The Court found that Plaintiffs had adequately alleged BMW knew of the defect due to a service bulletin issued by BMW.
The bulletin pertains to the “E60 (5 Series)” model, describes its “Subject” as “Various Electrical Problems Caused by Water Ingress,” and, in the portion of the bulletin titled “Situation,” states that “[w]ater ingress into the luggage compartment may cause various electrical problems or faults associated with [various specified components],” including SDARS, RDC, and PDC Modules. The bulletin also identifies fifteen locations for a technician to check for water leaks, including checking “[s]unroof drains for being loose on the rear of the sunroof or clogged.” . . .
The Court finds the above-referenced bulletin sufficient at the pleading stage to show BMW’s awareness of the existence of the asserted defect prior to the dates on which plaintiffs purchased their respective vehicles.
11.25.2014// Judge Young Denies Directed Verdict, Nexium Trial Continues
On Monday, U.S. District Judge William G. Young denied Defendants AstraZeneca PLC and Ranbaxy Inc.’s Motions for Directed Verdict, saying the Nexium pay-for-delay case should be decided by the jury. Later that day, Defendant Teva Pharmaceuticals settled with Plaintiffs.
Defendants had filed several directed verdict motions last week seeking judgment on all Plaintiffs’ claims. In Judge Young’s ruling, he said there are several “prudential reasons” why the case should go to a jury. Last week, he also denied Defendants’ motions for a mistrial.
Plaintiffs are in their sixth week of trial centering on Defendants’ alleged efforts to delay generic Nexium from entering the market. This is the first pay-for-delay suit to go to trial since the U.S. Supreme Court’s landmark Actavis decision. The case is expected to be submitted to the jury late next week.
For more about the Nexium case and Wexler Wallace’s role in the litigation, read the case summary here.
11.21.2014// Wexler Wallace Earns Top Recognition from Benchmark Plaintiff
Wexler Wallace LLP is once again listed among the top Illinois plaintiff’s firms in the 2015 edition of Benchmark Plaintiff. The firm, for the fourth year in a row, has been named a Highly Recommended Illinois plaintiffs firm. In addition, both named partners, Kenneth Wexler and Edward Wallace, were recognized as local litigation stars. Each has been named a local litigation stars since the inaugural Benchmark Plaintiff publication in 2011. They were noted for their work in antitrust, securities, mass tort and general commercial litigation.
Benchmark Plaintiff nominees are recognized as being firms that “are consistently recommended within the US business and legal communities for the quality of their litigation professionals and trial work within their respective jurisdictions.” Wexler Wallace is proud to receive this recognition and hopes to continue earning the reputation it has as a hard-working, respected Plaintiffs firm.
10.23.2014// Tom Doyle Published in DCBA Brief
Wexler Wallace lawyer Tom Doyle wrote an article that appears in the November issue of the DCBA Brief, the Journal of the DuPage County Bar Association. Tom’s article, “Inadvertent Misstatements Regarding Citizenship: Immigration Law Sets Traps for the Unwary,” considers how non-citizens can face serious consequences if they unintentionally misstate their citizenship status. Tom’s article, beginning on page 32, can be found here.
10.20.2014// Nexium Trial Begins
Wexler Wallace attorneys, along with co-counsel, will begin a six-week trial today in the District of Massachusetts over anticompetitive actions surrounding AstraZeneca’s blockbuster drug Nexium. The case, which is being tried in front of a jury and before the Honorable Judge William C. Young, was filed in 2012. At issue, plaintiffs allege AstraZeneca entered into non-competition agreements with a number of generic pharmaceutical manufacturers in order to delay market entry of generic versions of the drug. For more information about the case, please click here.
10.20.2014// J&J’s Ethicon Fights $3M Verdict In Pelvic Mesh Trial
Law360, New York (October 16, 2014, 5:36 PM ET) By Sindhu Sundar -- Johnson & Johnson subsidiary Ethicon Inc. fought Tuesday for a judgment as a matter of law or a new trial after a West Virginia federal jury's recent $3.27 million verdict against it in a pelvic mesh injury suit, arguing that the plaintiff hadn't offered enough evidence to support her claims. Ethicon argued that Jo Huskey hadn't provided enough evidence to support her claims for strict-liability failure to warn, strict-liability design defect, negligence, or loss of consortium, claiming that she hadn't shown that her doctor was unaware of the risks of the TVT-O sling at issue. Huskey had claimed that the polypropylene mesh in her TVT-O sling eroded, causing her severe, ongoing pain as the mesh could not be entirely removed through surgery.
Ethicon pointed to testimony by Huskey’s surgeon that she would still prescribe the sling to another patient with the same symptoms, which the device maker argued shows that additional or different warnings would not necessarily have led her surgeon to make a different decision about prescribing the device. It argued also that alternatively, they should get a new trial because the verdict was “against the weight of the evidence,” according to their motion.
“The clear weight of the evidence also establishes that TVT-O is a useful and desirable but unavoidably unsafe product that is properly prepared and contains adequate warnings and whose risks are accepted,” Ethicon said in its filing Tuesday. “For the same reasons, the great weight of the evidence demonstrates that no property of TVT-O renders the device defective or unreasonably dangerous.”
The trial concluded in early September, with the jury deliberating for about three hours before returning its compensatory damages verdict. Huskey had filed her suit in 2012, according to court records.
In February, the first case against Ethicon to go to trial in West Virginia federal court involving another TVT mesh product resulted in a directed verdict from U.S. District Judge Joseph R. Goodwin in the company’s favor, according to court records. Thousands of other pelvic mesh cases are consolidated in multidistrict litigation in West Virginia and in state courts across the country.
Huskey is represented by Edward A. Wallace and Mark R. Miller of Wexler Wallace LLP; Fidelma L. Fitzpatrick of Motley Rice LLC; and Thomas P. Cartmell and Jeffrey M. Kuntz of Wagstaff & Cartmell LLP.
Ethicon and J&J are represented by Christy D. Jones of Butler Snow O’Mara Stevens & Cannada PLLC and David B. Thomas of Thomas Combs & Spann PLLC.
The case is Huskey et al. v. Ethicon Inc. et al., case number 2:12-cv-05201, in the U.S. District Court for the Southern District of West Virginia.
–Additional reporting by David Siegel. Editing by Edrienne Su.
09.11.2014// Court Approves Nationwide Class Settlement Against Electrolux Home Products, Inc.
On September 11, 2014, the United States District Court for the Central District of California entered an order granting final approval to a nationwide class action settlement against Electrolux Home Products, Inc., related to allegedly defective dryers. The Settlement has a value of at least $35.5 million.
Along with co-counsel Hansen Reynolds Dickinson Crueger LLC, and Greg Coleman Law PC, the Court appointed Wexler Wallace LLP attorneys Edward A. Wallace, Amy E. Keller, and Dawn M. Goulet to represent the interests of the nationwide Settlement Class members.
Individuals who purchased or currently own dryers with a serial number beginning with “XD,” which includes Frigidaire, Kenmore, White Westinghouse, Kelvinator, Gibson, Tappan, and Crosley brands, are eligible for a number of benefits under the Settlement—none of which will be capped by Electrolux, and none of which will require the class members to release any personal injury or property damage claims. These benefits include, but are not limited to, cash rebates, reimbursement for out-of-pocket expenses, and a free safety cleaning service.
Wexler Wallace partner Edward A. Wallace spoke in favor of final approval on August 18, 2014, and Judge Christina A. Snyder recognized that the Settlement “confers significant benefits to Class members,” “totaling a minimum of $35.5 million in projected-utilization values.”
To view a copy of the Court’s order, you can click here.
If you believe you are a class member and would like more information or want to submit a claim form to receive benefits under this Settlement, visit www.dryersettlement.com.
If you believe you own a defective consumer product, or would like to speak with one of our attorneys about our other ongoing defective product cases, please contact us or complete our online form.
09.10.2014// W.V. Jury Awards $3.27M in Pelvic Mesh Suit Against Ethicon
National Law Journal (September 5, 2014), by Amanda Bronstad -- West Virginia jury has awarded $3.27 million to a woman who underwent surgery to remove a pelvic mesh device made by Johnson & Johnson subsidiary Ethicon Inc. The closely watched case, brought by Jo Huskey and her husband, Allen Huskey, is the first federal trial over Ethicon’s TVT-O pelvic mesh sling.
“As the first federal trial over TVT-O device, we expect it will have a significant impact on the litigation and hope that it will lead to the resolution of the claims that have been brought on behalf of women,” Edward Wallace, partner at Chicago’s Wexler Wallace, said about the verdict.
The jury, which awarded exclusively compensatory damages, found against Ethicon on claims of failure to warn, design defect, pain and suffering and past medical expenses. The jury’s award also included $200,000 to Huskey’s husband for loss of consortium.
In a statement, Johnson & Johnson said Ethicon would challenge the verdict through post-trial motions.
“The verdict is disappointing and we believe we have strong grounds for appeal,” Ethicon spokesman Matthew Johnson said. “Ethicon’s TVT-O mid-urethral sling was properly designed, and Ethicon acted appropriately and responsibly in the research, development and marketing of the product. We have always made patient safety a top priority and will continue to do so.”
Ethicon faces 33,000 lawsuits worldwide claiming its mesh devices, used to treat urinary incontinence and pelvic organ prolapse, have caused women pain and forced them to undergo subsequent surgeries to remove them.
On April 3, a jury in Dallas, hearing a case in Texas state court, awarded $1.2 million in the first trial over the TVT-O sling.
U.S. District Judge Joseph Goodwin of the Southern District of West Virginia, overseeing most of the cases in Charleston, threw out the first pelvic mesh trial in federal court against Ethicon on Feb. 19 involving another device, the TVT.
Johnson & Johnson also lost an $11 million verdict in New Jersey state court last year in a case over a different device.
In West Virginia, Ethicon was represented at trial by Christy Jones of Butler Snow in Ridgeland, Miss., and David Thomas, founding member of Thomas Combs & Spann in Charleston.
09.05.2014// Jury Decides For Wexler Wallace LLP Client Against J&J Subsidiary: $3.27 Million
September 5, 2014, Charleston, WV -- After a two-week trial in Huskey v. Ethicon pending in the United States District Court for the Southern District of West Virginia, an eight-member jury returned a verdict just before noon today for Wexler Wallace LLP client Jo Huskey, who was also represented by Jeffrey M. Kuntz of Wagstaff & Cartmell LLP and Fidelma L. Fitzpatrick of Motley Rice LLC. The jury found that Huskey had proven, by a preponderance of the evidence, her claims for defective design, failure to warn, and negligence related to the implantation of transvaginal tape manufactured by Ethicon, Inc., a subsidiary of Johnson & Johnson. Ms. Huskey was awarded $3.27 million for her injuries.
Edward Wallace’s closing argument highlighted the evidence the plaintiffs presented during the trial, and noted that “Ethicon was not careful,” and while there is “nothing wrong with competing and getting to the market quickly,” Ethicon did not put patient safety first. “Ethicon cut corners. . . . They launched first and worried about problems later. [Are those] the actions of a reasonable person or company? Again, I have to live by the rules and so does Ethicon.”
09.04.2014// Wexler Wallace LLP Represents Plaintiff in Pelvic Mesh Trial
Along with co-counsel, Wexler Wallace LLP is representing Jo and Allen Huskey in their case against Ethicon, Inc. and Johnson & Johnson concerning injuries Ms. Huskey alleges she sustained after she was implanted with a transvaginal tape manufactured by the defendants. The case is one of hundreds brought against various manufacturers by women claiming that they were harmed in some way by pelvic mesh, implanted to treat conditions such as pelvic organ prolapse and stress urinary incontinence. The trial has received attention from a number of media outlets, including the Charleston Daily Mail and The National Law Journal. The Mesh Medical Device News Desk noted that Wexler Wallace LLP Partner Edward Wallace “carefully explained complex scientific concepts” in his opening remarks to the jury. For more information on Wexler Wallace LLP’s transvaginal surgical mesh investigations and cases, click here.
07.03.2014// Wexler Wallace Lawyer Appointed to State Committee
Wexler Wallace lawyer Thomas Doyle has been appointed to the Forms Committee for the Illinois Supreme Court Commission on Access to Justice. The Access to Justice Commission is charged with facilitating equal access to justice for “all people, particularly the poor and vulnerable”, with an emphasis on access to civil courts and state agencies. The Forms Committee helps develop standardized, legally-sufficient forms for self-represented litigants to use when making filings, to enhance their access to justice.
07.01.2014// Litigation Alleging Merck’s Co-Pay Coupons and Savings Cards are Unlawful May Proceed
On June 30, 2014, Judge Michael A. Shipp of the United States District Court for the District of New Jersey denied in part a motion to dismiss in litigation against Merck & Co., manufacturer of the blockbuster drugs Nasonex, Vytorin, Zetia, Janumet/Janumet XR, and Januvia. The case—one of several pending against brand name drug manufacturers in Illinois, Pennsylvania, and New Jersey—alleges that Merck uses co-pay coupons and savings cards to subsidize the prescription drug co-payment (“co-pay”) obligations of privately-insured individuals, inducing them to choose Merck’s more expensive brand name drugs where less expensive therapeutic alternatives are available.
Judge Shipp held that the plaintiff health benefit funds sufficiently alleged standing where they contend their injuries occur at the point-of-sale, when co-pay subsidies persuade their members to fill prescriptions for Merck’s expensive drugs, and where the number of claims their members submitted for those drugs increased considerably after the co-pay subsidy programs were implemented.
He went on to find that the plaintiffs properly stated a claim for tortious interference with contract where they alleged that Pharmacy Benefit Managers retained by them enter into valid and enforceable contracts with retail pharmacies requiring those pharmacies to collect co-pays directly from patients, that Merck knew of these contracts and nevertheless induced the pharmacies to participate in its co-pay subsidy programs to plaintiffs’ financial detriment.
Judge Shipp concluded by stating that he was “unprepared to accept Merck’s characterization of the subsidy programs ‘as legitimate business activities that enabled patients to better afford their Merck medicines.’” The case will now proceed to discovery.
05.07.2014// Court Denies MB Financial’s Motion to Dismiss Based on Federal Preemption
On May 6, Judge Jean Prendergast Rooney of the Circuit Court of Cook County, Illinois, denied MB Financial Bank NA’s motion to dismiss plaintiff’s class action complaint on the basis of federal preemption. Together with Squitieri & Fearon, LLP, Wexler Wallace filed a class action complaint against MB Financial on behalf of Illinois residents based upon the Bank’s representations concerning the re-ordering of debits to trigger overdraft fees. The plaintiff alleges that the Bank’s representations misled consumers about its overdraft processing practices and that, because of this, plaintiffs and the putative class members incurred more overdraft charges than they would have. The plaintiff will be filing a Second Amended Class Action Complaint pursuant to the Court’s ruling to provide additional factual support to the plaintiff’s own allegations. To see a copy of the First Amended Complaint, click here.
04.29.2014// Wexler Wallace LLP Partner Edward A. Wallace One of Chicago’s Top-Rated Lawyers of 2014
On Friday, Legal Leaders recognized Wexler Wallace LLP Partner Edward A. Wallace as one of 2014’s top-rated lawyers in Chicago. From the article:
“Wexler Wallace LLP partner Edward A. Wallace joined the firm soon after its founding in 2000 and has helped lead it to national prominence. Ed focuses his practice on complex, multi-party litigation, including class actions and mass tort cases. His reputation for integrity, efficiency, strategic planning, understanding the relevant science, and achieving success has led to his appointment to many prominent leadership positions in high-stakes litigation across the country. Ed has been recognized multiple times as an Illinois “Local Litigation Star” by Benchmark Plaintiff and as a “Rising Star” and “Super Lawyer” by Super Lawyers in the class action and mass torts practices areas. He is the recipient of an “AV Preeminent®” Martindale-Hubbell peer rating, indicating he is ranked “at the highest level of professional excellence by his peers.”
03.27.2014// J&J Said to Trash Records in Product Injury Suits
USA Today, Linda A. Johnson, AP Business Writer, TRENTON, N.J. (AP) — Lawyers and advocates for women alleging Johnson & Johnson products injured them urged the Justice Department on Wednesday to investigate their claims the health care giant deliberately destroyed many documents critical to their lawsuits. Corporate Action Network, a nonprofit group seeking to hold businesses accountable for their actions, said that it's written to Attorney General Eric Holder to look into whether J&J, based in New Brunswick, N.J., and CEO Alex Gorsky committed the crimes of obstructing justice and destroying records in a federal probe. "Hundreds of thousands of women continue to suffer ongoing, severe harm," from J&J's pelvic mesh implants, network spokeswoman Levana Layendecker said during a call with reporters. "I hope Johnson & Johnson is held accountable for their failure to warn."
The implants are widely used to hike up sagging pelvic organs, common in older women and those who’ve had children — and often the cause of embarrassing bladder leaks when they laugh, sneeze or lift something heavy. More than 22,000 women suing J&J blame its implants for crippling pain, infections and bleeding.
Last month, U.S. District Court Judge Cheryl Eifert in southern West Virginia, who is handling most of the implant lawsuits, concluded J&J destroyed thousands of documents regarding development of its pelvic mesh implants, but said there was no proof that was done intentionally. The documents would include reports on patient testing of the mesh implants and could show whether participants suffered serious complications.
Jane Akre, founder of an online network for pelvic mesh implant “survivors,” said Johnson & Johnson was aware of possible harm and didn’t warn the public.
“Evidence we’ve presented at trial showed they knew these implants would cause complications and they just didn’t care. Many women are now disabled and they can’t leave their beds, they’re in so much pain,” she said during the conference call.
“Women have killed themselves because the pain eclipses childbirth pain, it’s that bad,” Akre said in an interview.
Matthew Johnson, a spokesman for Johnson & Johnson’s Ethicon unit, which makes the implants, said in a statement that the company “acted appropriately and responsibly in the research, development and marketing of our pelvic mesh products,” which he said are considered a “gold standard” treatment.
“Ethicon has engaged in extensive efforts to preserve and produce evidence in the pelvic mesh (federal litigation) which has led to the production of millions of pages of documents to date. In the context of Ethicon’s substantial document production, the inadvertent loss of certain, limited documents has not prejudiced plaintiffs in their ability to pursue their claims,” he added.
Sagging pelvic organs were fixed with traditional surgery until the late 1990s, when J&J launched the first pelvic mesh implants, a twist on a similar product long used to repair hernias. The pelvic implants, which function like a sling attached to bones to lift fallen organs back up, were billed as more effective than just stitching organs into place. Six other companies then launched rival products.
Women soon began complaining of complications so severe they can’t work, need strong painkillers around the clock and now find intercourse unbearably painful. That’s because the mesh, similar to a window screen, over time can dig into the exterior tissue of the vagina or bladder, causing a sensation some have likened to having barbed wire twisting inside your body.
Attorneys have been advertising heavily for potential plaintiffs in recent years, and the litigation has grown into possibly the largest mass medical injury case in the country.
Plaintiff Linda Dotson of Loudon, Tenn., told reporters that after having mesh implanted in two areas of her pelvis in 2006, she quickly developed a dangerous blood clot and then suffered hemorrhaging, severe pain, unexplained fevers, fatigue and other flu-like symptoms. She had to have a couple of surgeries to remove much of the mesh, took antibiotics for months and still suffers.
The Justice Department did not immediately comment on the case.
Corporate Action Network also alleged that J&J has harmed other patients, particularly women, with faulty hip implants — which the company has since taken off the market amid a crush of lawsuits — and with baby and beauty products containing undisclosed toxic ingredients. Under pressure from multiple consumer and environmental groups for the past several years, J&J has begun reformulating those shampoos, skin care and other personal care products with safer ingredients.
03.19.2014// Court Grants Final Approval to $22 Million Hypodermic Needle Class Action Settlement
On March 17, 2014, the Honorable Jose L. Linares of the United States District Court for the District of New Jersey granted final approval to a $22 million indirect purchaser class action settlement for individuals and entities who purchased Becton Dickinson disposable hypodermic products through a distributer or wholesaler. Wexler Wallace LLP serves as co-lead class counsel on behalf of hospital, pharmacies, and other purchasers Becton Dickinson’s hypodermic products. To visit the settlement website and view court documents, visit www.hypodermicproductsantitrustlitigation.com. To learn more about the case, please click here.
02.25.2014// Supreme Court Won’t Review Properly-Certified Front-Loading Washing Machine Cases
Yesterday, the Supreme Court denied certiorari to three cases involving front-loading washing machines that were certified to proceed as class actions against major laundry appliance manufacturers. Consumers claimed that the washing machines have major design defects that led to the development of mold, mildew, and “biofilm”—all of which stain clothes and cause noxious odors. Because the Supreme Court denied review, lawsuits against Sears, Whirlpool, and BSH will proceed in federal court. For more information, and to read commentary on the pending cases, you can visit articles published by Slate and Public Citizen. (more…)
02.24.2014// Tom Doyle Speaks at ABA’s Midwinter Meeting
Tom Doyle of Wexler Wallace LLP spoke as part of two programs in Fort Lauderdale at the American Bar Association’s Midwinter Meeting of the Committee on Alternative Dispute Resolution (part of the Section of Labor & Employment Law). On Friday, February 21st, Tom participated on a Panel on Workplace Bullying, moderated by Professor Lamont Stallworth of Loyola University. On Saturday, February 22nd, Tom appeared as part of a Circuit Court Update panel, which covered recent cases involving arbitration of Labor & Employment law claims. The meeting drew attendees from around the United States and Canada, including arbitrators, mediators, union lawyers, and defense lawyers.
02.03.2014// Flushmate Settlement Announced
Wexler Wallace LLP assisted Audet & Partners, LLP in bringing a class action lawsuit against Sloan Valve Company concerning manufacturing defects associated with its Series 503 Flushmate III Pressure-Assist Flushing Systems. On Friday, January 31, the parties announced an $18 million settlement in conjunction with another pending case. The settlement would provide a free repair kit to anyone who owns one of the Flushmate Systems, plus cash for costs incurred for installing the repair kit, and full reimbursement for repairs related to property damage. A preliminary fairness hearing has been proposed for February 10, 2014. For more information about the case, please click here. For more information about the settlement, please click here.
01.14.2014// Four Wexler Wallace Partners Recognized by Super Lawyers
The 2014 list of Super Lawyers has been announced and, for the seventh consecutive year, Wexler Wallace attorneys are among this elite group. Named partners Kenneth Wexler and Edward Wallace are each recognized as an Illinois Super Lawyer and new partners Amber Nesbitt and Mark Miller are recognized as Rising Stars for the third consecutive year. Super Lawyers rates outstanding attorneys from more than 70 practice areas and recognizes attorneys who have attained a high-degree of peer recognition and professional achievement. Wexler Wallace is proud to have so many of its partners named among this exclusive group of attorneys.
12.13.2013// Corey Raines Quoted in Product Liability Law Reporter
The American Association for Justice published an article in its Product Liability Law Reporter on Dec. 10, 2013 titled “Battle Brewing over FDA Generic Drug Labeling Ruling.” The article, written by Courtney L. Davenport, is about the FDA’s proposed changes to generic drug labeling and features quotes from Wexler Wallace associate Corey Raines.
The FDA’s proposed rule would allow generic drugmakers to submit label changes once they learn of safety concerns – not once the brand-name manufacturer has initiated changes. Corey has written a number of posts for the Wexler Wallace blog regarding this topic; In particular the Supreme Court’s ruling in PLIVA, Inc. v. Mensing in 2011 and how the FDA’s subsequent proposed rulemaking would effectively overturn the Mensing decision. In the AAJ article, she is quoted as saying:
“The FDA’s proposed rule is an acknowledgement of the inherent, significant problems that result from the inability of generic drug manufacturers to initiate changes to their labeling. Currently, consumers have no legal remedy should they be injured by a generic drug. In essence, this rule will make all drug manufacturers responsible for their products and protect the legal rights of consumers.”
To read the full article as it appeared in the Product Liability Reporter, click here. To read any of Corey’s articles regarding the Mensing decision, visit the Wexler Wallace Blog here, here and here.
11.14.2013// Class Certification Granted in Nexium Antitrust Case
Today, Judge William G. Young of the District of Massachusetts certified a class of end-payors in the In re Nexium (Esomeprazole) Antitrust Litigation case. In this case, plaintiffs seek damages for injuries suffered due to anticompetitive conduct by AstraZeneca, Ranbaxy, Teva, and Dr. Reddy’s Laboratories.
Plaintiffs allege that Defendants conspired to unlawfully delay generic competition for the blockbuster proton pump inhibitor, Nexium. The certified class includes third party payors and certain consumers which purchased Nexium and its generic (once available) from April 14, 2008 through and until the anticompetitive effects of Defendants’ unlawful conduct cease in: Arizona, California, Florida, Iowa, Kansas, Massachusetts, Maine, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Tennessee, Utah, Vermont, West Virginia, Wisconsin, and the District of Columbia. To read the full class certification opinion, click here.
The Court appointed Kenneth A. Wexler co-lead counsel for the end-payor class; he is joined by Steve Shadowen of Hilliard Shadowen LLC, J. Douglas Richards of Cohen Milstein Sellers & Toll, PLLC, and Jayne Goldstein of Pomerantz Grossman Hufford Dahlstrom & Gross LLP.
10.25.2013// AndroGel Judge Says It’s Time To Revive Class Fight
Law360, New York (October 24, 2013, 6:34 PM ET), by Melissa Lipman -- A Georgia federal judge said Wednesday that he would overturn his dismissal of so-called pay-for-delay claims against Actavis Inc. and others in a putative class action over AndroGel in light of a recent U.S. Supreme Court ruling — if the Eleventh Circuit agrees to remand the case. U.S. District Judge Thomas W. Thrash Jr. said that the justices' ruling in the Federal Trade Commission's related case over the testosterone replacement gel — which overturned his decision and held that Hatch-Waxman Act patent settlements could be challenged under federal antitrust law — was a big enough development to merit granting the plaintiffs' request for relief from judgment in the case.
The suit is similar to the FTC’s claim that Solvay Pharmaceuticals Inc. paid several generics makers to delay the market entry of cheaper generic versions of AndroGel. Like the FTC’s claims, the private plaintiffs’ claims were eventually dismissed but the private suit is still pending appeal to the Eleventh Circuit.
The plaintiffs want the judgment vacated and the entire matter sent back to the district court for further proceedings in light of the Supreme Court’s ruling, but the defendants have argued that the Eleventh Circuit should first consider a separate issue not involved in the FTC case on appeal.
But Judge Thrash ruled Wednesday that denying the plaintiffs’ request would only delay the inevitable district court review of the case, saying that “everyone knows who profits from that.”
“The defendants say that a post-judgment change in the law is not sufficiently extraordinary to justify Rule 60(b) relief,” Judge Thrash wrote. “Well, it seems pretty extraordinary to me because the change in the law resulted from reversal of a judgment I entered in this case. That does not happen every day.”
Both the claims brought by the FTC and those brought by direct purchasers such as the Louisiana Wholesale Drug Co. Inc., Walgreen Co. and others claim that Solvay — now known as AbbVie Products LLC — anti-competitively paid off Actavis, Paddock Laboratories Inc. and Par Pharmaceutical Cos. to drop their challenges to the AndroGel patents and delay the market entry of their generic versions of the drug.
The FTC’s case argued simply that the settlements should be presumed anti-competitive and worked its way up to the Eleventh Circuit and eventually the Supreme Court. The private case, however, also claimed that settlements stemmed from sham litigation, which was one of the exceptions to the scope of the patent test.
That test had been endorsed by the Eleventh Circuit and several other appeals courts before the Supreme Court took up the matter, and held that Hatch-Waxman settlements were generally legal as long as they did not exceed the scope of the patent or stem from sham litigation or fraudulently obtained patents.
Because that claim was not at issue in the FTC’s case, the Eleventh Circuit has yet to address the argument. As a result, the defendants argued that the appeals court should resolve the issue before sending it back to the district court.
The drugmakers also pointed out that the Eleventh Circuit had already denied the plaintiffs’ request to vacate and remand in light of the Supreme Court decision. But the appeals court did explicitly note in its ruling that the plaintiffs were free to seek Rule 60(b) relief from the judgment from the district court.
And Judge Thrash said he would grant that relief if the appeals court remanded, pointing out that the Eleventh Circuit would inevitably have to reverse the dismissal of the plaintiffs’ pay-for-delay claims regardless of the fate of the sham litigation claims.
He also voiced skepticism that allowing the case to proceed on appeal would result in further guidance from the Eleventh Circuit about how the Supreme Court’s decision should be applied to the private plaintiffs claims.
“As much as I would love some guidance from the Eleventh Circuit on how in the heck a trial judge (and a jury) is supposed to apply the Actavis decision to an actual case, I doubt that the Eleventh Circuit is going to jump into that briar patch until it has to,” the judge wrote. “The Court of Appeals has the luxury of saying to me ‘You do it.'”
Moreover, Judge Thrash pointed out that if the Eleventh Circuit “really wants to jump in the briar patch, [it] can refuse to remand the case now.”
An attorney for Par and Paddock declined to comment on the matter.
Representatives for the plaintiffs and the other defendants were not immediately available for comment Thursday.
The plaintiffs are represented by Doffermyre Shields Canfield & Knowles LLC, Berger & Montague PC and Garwin Gerstein & Fisher LLP, among others. Actavis is represented by Skadden Arps Slate Meagher & Flom LLP and Morris Manning & Martin LLP. Solvay is represented by Munger Tolles & Olson LLP and Alston & Bird LLP.Par and Paddock are represented by White & Case LLP and Greenberg Traurig LLP.
To read more about the case and Wexler Wallace’s representation, please click here.
10.23.2013// Edward Wallace Named Among Leading Illinois Plaintiff Attorneys
Wexler Wallace LLP partner Edward Wallace was recognized for his commitment to plaintiffs work by Benchmark Plaintiff. He has been named multiple times by Benchmark Plaintiff as a Illinois Local Litigation Star and will be included in the 2014 edition of the publication. Benchmark Plaintiff bills itself as the definitive guide to America’s leading plaintiff litigation firms and attorneys. Ed and the firm have been included in this publication since its inception. His profile on Benchmark’s website can be found here. To learn more about Edward and his practice at Wexler Wallace please click here.
10.15.2013// Class Certification Granted in Frigidare Washing Machines Case
Law360, Los Angeles (October 11, 2013, 8:11 PM ET) -- A Georgia federal judge on Friday granted class certification to consumers in California and Texas who bought allegedly faulty Frigidaire washing machines that collect standing water, holding that class treatment is superior to other available methods for a fair and efficient resolution. The decision comes after named plaintiffs Robert Brown and Michael Vogler moved for class certification in 2011, arguing their suit met the criteria necessary to warrant the status. Brown and Vogler say they purchased front-loading Frigidaire washing machines from Electrolux Home Products Inc. that had a design flaw that resulted in water accumulating in the convoluted surface of a gasket after the wash cycle, causing mold and mildew to fester in the machine.
U.S. District Judge Lisa Godbey Wood on Friday granted the plaintiffs’ motion for class certification, citing common issues among class members, including whether the machines possessed a common defect in their bellows design; whether the defect would cause biofilm, mold or mildew to grow; and whether Frigidaire knew about it and adequately warned consumers.
“Importantly, these issues are central to the validity of each class member’s legal claims,” Judge Wood wrote in the decision. “Thus, they will generate common answers that are likely to advance the litigation and drive the resolution of the lawsuit.”
The two classes include all persons and entities who purchased, other than for resale, any Frigidaire front load washing machine in California or Texas after March 5, 2004, according to court records.
The first class, led by Brown, brings claims under the Magnuson-Moss Warranty Act and California’s unfair competition law. The second class is led by Vogler and alleges violations of Magnuson-Moss and the Texas Deceptive Trade Practices-Consumer Protection Act, according to court documents.
According to the suit, filed in March 2008, the mold and mildew that grew in the faulty machines caused damage and foul odors in clothing. The plaintiffs contend that although Frigidaire knew about the defects, it failed to inform customers, issue a recall of the machines, or pay to repair or replace the machines under the manufacturer’s warranty.
Not only did Frigidaire advertise its products as making clothes “feel fresher and last longer,” the company advised consumers to leave the door ajar when the machine was not in use and wipe down the inside after each use, the suit asserts.
Frigidaire sold 1.3 million units of the defective washing machines, according to the plaintiffs.
Representatives for the parties didn’t immediately return requests for comment on Friday.
Plaintiffs are represented by Kenneth A. Wexler, Edward A. Wallace and Amy E. of Wexler Wallace LLP; R. Brent Irby and Charles M. McCallum of McCallum Hoaglund Cook & Irby LLP; and Lee W. Brigham and John C. Bell Jr. of Bell & Brigham.
Electrolux is represented by John H. Beisner and Jessica Davidson Miller of Skadden Arps Slate Meagher & Flom LLP and Benjamin Brewton of Tucker Everitt Long Brewton & Lanier.
The case is Michael Terrill et al. v. Electrolux Home Products Inc., case number 1:08-cv-00030, in the United States District Court for the Southern District of Georgia, Augusta Division.
10.07.2013// Consumer Alert: Washing Machines Linked to Mold
www.nbc-2.com, By Nick Ciletti, Anchor/Reporter - At least half a dozen top manufacturers are facing lawsuits from customers outraged over what's growing inside their washing machines. In some cases, it's ruining their clothes. To make matters worse, lawyers accuse some of these companies of knowing about the mold and trying to cover it up. Melanie Kurtoglu's full-time job is chasing after twin toddlers inside her Lehigh Acres home. "It's non-stop cleaning around here. I'm always picking up after somebody, wiping something up or cleaning up," said Kurtoglu. That cleaning includes load after load of laundry.
Overall, she was really happy with the way her front-loading washing machine was making her clothes look and smell, but little did she know there was something growing inside her machine that would make her regret buying one in the first place.
“I didn’t realize what it was at first, so I’d just wipe it off and very quickly. It seemed that it just grew and grew,” she explained.
The mother of two said she tried bleach, special washing machine cleaners and extensive cleaning—but the mold sprouting from her washer wasn’t going away.
She isn’t the only one experiencing a problem. There are now at least half a dozen lawsuits—against manufacturers like Whirpool, Sears, LG, Kenmore, Bosch and Frigidaire—complaining about the same issue.
A 2009 lawsuit against Frigidaire says: Frigidaire has knowingly concealed material facts regarding the washing machine, including a serious design defect with the stainless steel drum and gasket that causes the washing machines to accumulate mold and mildew.”
“Any manufacturer has the responsibility to the consumer to, no pun-intended, come clean about the problem. In this case, a key allegation is that the manufacturer didn’t,” said attorney Wexler Wallace.
Mike Olsen from Good Deals in Fort Myers says the solution is simple for most customers.
“Leave the door open a crack to let air in,” he said.
Olsen says front loading washing machines are “sealed off” and trap air and moisture inside.
Leaving the door open will cut down your chances of growing mold. So will wiping out any excess water, including around the gasket area by the door.
Also, run a bleach cycle on your machine; or, use the self cleaning option if you have one.
Kurtoglu said she has tried all of that but it has not helped.
She can’t afford to replace her machine; so for now, she’s forced to “make nice” with her front loader.
“If I had to do it over, I would not buy a front-loading washer. It will be a top-loading washing machine for sure,” she laments.
We reached out to Electrolux, the parent company of Frigidaire, who said:
“Electrolux takes the safety of its products very seriously. To help prevent odors, mildew or mold, consumers should leave the door open for a few hours after use or if more convenient, when the washer is not in use. Additionally, consumers can refresh or clean the inside of the washer by running the Clean Washer cycle. Some models have an automated reminder mode or consumers may prefer to manually select the cycle. If a consumer believes that their product is not working as expected, we urge them to call our consumer services group to discuss whether service is necessary.”
09.23.2013// Amber Nesbitt Named Among Top Women Attorneys in Illinois
Partner Amber M. Nesbitt is named in this month’s Chicago Magazine’s October 2013 issue, which spotlights The Top Women Attorneys in Illinois. Amber, who focuses her practice on antitrust and consumer protection class action litigation, is listed as part of a select group of “rising star” attorneys noted for their class action and mass tort work. Candidates appearing in this special section have been named to a 2013 Illinois Super Lawyers or Rising Stars list. Amber was named a Rising Star in 2012 and 2013. We congratulate her on this recognition.
09.18.2013// Wexler Wallace Firm, Partners Recognized by Benchmark Plaintiff
Since the inaugural edition of Benchmark Plaintiff, Wexler Wallace LLP and its attorneys have been recognized as leaders in their field. This year is no exception. The firm and partners Kenneth A. Wexler and Edward A. Wallace have been honored for their outstanding plaintiffs work the 2014 edition of Benchmark Plaintiff: The Definitive Guide to America’s Leading Plaintiff Firms and Attorneys.
For the third year in a row, Wexler Wallace LLP has been recognized as a Highly Recommend Local Litigation Firm in the state of Illinois. Partners Kenneth A. Wexler and Edward A. Wallace also were singled out as Local Litigation Stars for their work in the fields of antitrust, mass tort, general commercial and securities litigation. This is the third such nomination and recognition for both partners.
Benchmark Plaintiff said of the firm, “Chicago-based Wexler Wallace is a highly regarded litigation boutique known for taking on high-stakes cases around the country involving antitrust, business and commercial litigation, securities and corporate governance, mass tort ligation and more. Founding Partner Kenneth Wexler has more than 30 years of legal experience, focusing his practice on complex class actions and commercial ligation. Edward Wallace focuses his litigation on complex multi-party cases, often serving in leadership roles in high-profile matters. He played an instrumental role developing the firm’s mass tort practice group.”
Benchmark Plaintiff’s selections are consistently recommended within the US business and legal communities for the quality of their litigation professionals and trial work within their respective jurisdictions. For more about Benchmark Litigation’s Illinois Plaintiff awards, please click here. For more about Wexler Wallace and its practice, please click here.
09.11.2013// Nexium Defendants’ Motion to Dismiss Denied
Federal Judge William G. Young today denied the defendants’ motions to dismiss the In re Nexium Antitrust Litigation, pending in the United States District Court in Boston. Rejecting multiple grounds asserted by the defendants, Judge Young found that the named plaintiffs have standing to bring their claims under the laws of 23 states. And although the Court trimmed the class period slightly, most of it was left intact. Judge Young did dismiss claims brought under the laws of Illinois, Utah and Puerto Rico, but it gave plaintiffs the right to amend by adding a Utah plaintiff with appropriate standing. The balance of the case remains, however, with oral argument on plaintiffs’ motion for class certification scheduled to take place on September 17, 2013. To view a copy of Judge Young’s memorandum and order, click here.
The Nexium litigation was first filed in August, 2012, and Kenneth A. Wexler has been appointed interim co-lead counsel for the putative class. For more information on the case, click here.
08.09.2013// Court Denies Defendant’s Attempt to Dismiss Nationwide Class Action Alleging Insurance Agents were Wrongfully Denied Benefits
On August 9, 2013, Wexler Wallace LLP and its co-counsel—Hansen Reynolds Dickinson Crueger, the Law Office of Greg Coleman, and Landskroner Grieco Merriman—achieved a victory for Plaintiffs in a nationwide class action against American Family Insurance when Judge Donald C. Nugent of the United States District Court for the Northern District of Ohio denied Defendant American Family Insurance’s motion to dismiss in its entirety, allowing Plaintiffs to pursue their claims under the Employment Retirement Income Security Act (ERISA). The Complaint alleges that American Family improperly classifies its agents as independent contractors but treats them as employees, maintaining ownership over their books of business, requiring them to sell only American Family insurance and follow American Family’s policies and procedures, and controlling important aspects of their businesses, from the hours they keep to the staff they hire.
Noting a trend in which “insurance companies have been continuously tightening their control over their agents while continuing to disavow them as employees,” Judge Nugent concluded that, “[i]f this trend continues, there will come a point when simply labeling the agents as ‘independent contractors’ and refusing to provide the benefits employees are entitled to will no longer outweigh the degree of control exercised by the insurance companies.” Today’s decision paves the way for the Court to decide if this is “the case that tips the scales on that front.”
If you are a current or former agent of American Family who would like more information about this case, you may contact us by completing the online form or by calling 312-346-2222. To read more about this case, please click here.
08.09.2013// Thomas A. Doyle Published in ABA Journal
An article written by Wexler Wallace attorney Tom Doyle appears in a recent issue of the ABA Journal of Labor & Employment Law, which is published by the American Bar Associations’ Section of Labor & Employment Law. The article examines how Courts are deciding disputes over whether a plaintiff in an employment lawsuit must answer questions about his immigration status.
The article discusses the development of the law in the wake of the landmark Ninth Circuit decision in Rivera v. NIBCO, Inc., 364 F.3d 1057 (9th Cir. 2004). Rivera was a Title VII case, and the Court prohibited the employer from asking whether the plaintiff was an undocumented worker. The article discusses how Courts are addressing this issue in recent disputes. Even today, Courts worry that employers might abuse the discovery process to intimidate workers seeking to enforce their workplace rights.
The article calls for Courts to adopt a bright-line rule that immigration status is not discoverable in employment litigation, absent unusual circumstances. And in those rare situations when the topic is permitted for discovery, the Court should carefully manage the timing of and use of any discovery into a worker’s immigration status. By adopting this approach,
“Courts might curtail the number of discovery motions on this issue. Employers could still raise an immigration status question when there was a basis for it in a particular case, but workers would know that a lawsuit would likely not involve intimidating questions about their immigration status (especially when those questions have little chance of leading to admissible evidence). And by deferring the issue until the very end of the case — that is, after everything else had been decided — courts would discourage unscrupulous employers from using the issue to intimidate or otherwise exploit immigrant workers.”
A full copy of the article appears in the publication’s Spring 2013 edition.
07.09.2013// Wexler Wallace Names Three Partners
Wexler Wallace is pleased to announce that Amber M. Nesbitt, Mark R. Miller and Kara A. Elgersma have become partners at the firm, effective July 1, 2013.
Amber began her legal career in 2003, working at the firm as a law clerk and summer associate. Upon her graduation from Loyola University School of Law, she joined Wexler Wallace as an associate. Since that time, Amber has gone on to become a key leader in several of the firm’s antitrust cases, playing a significant role in obtaining class certification in the In re Wellbutrin XL Antitrust Litigation.
Mark, a Loyola graduate as well, joined Wexler Wallace as an associate in 2006. Over the years, Mark has taken a prominent role in the firm’s mass tort practice, playing pivotal roles in the discovery and bellwether trials in ongoing litigation. In addition to the mass tort practice, Mark has continued to litigate several of the firm’s securities, business and commercial litigation cases.
Both Amber and Mark were named Rising Stars by Illinois SuperLawyers in 2012 and 2013.
Kara, a graduate of Georgetown University Law Center, joined the firm as Of Counsel in 2010. Prior to Wexler Wallace, Kara was a partner at K&L Gates, working in the Antitrust and Trade Regulation Department. Since joining Wexler Wallace, Kara has been fully engaged in litigating several of the firm’s business, antitrust and securities cases. In addition, she is active in false claims litigation.
Announcing these exciting events to the firm, Ken Wexler, managing partner of Wexler Wallace, noted that the elevation of these lawyers “is a testament to perseverance, hard work, and the respect [Amber, Mark and Kara] have earned for the firm and for themselves.” We congratulate them and are proud of their accomplishments.
05.21.2013// Motion to Dismiss Denied in Skelaxin Antitrust Litigation
Wexler Wallace is pleased to announce that, on May 20, 2013, Judge Curtis L. Collier of the United States District Court for the Eastern District of Tennessee denied Defendants’ motion to dismiss Plaintiffs’ claims the Skelaxin Antitrust Litigation. In the case, Plaintiffs allege that Defendants King Pharmaceuticals, Inc. and Mutual Pharmaceutical Company, Inc. (“Defendants”) entered into an anticompetitive conspiracy to keep generic versions of Skelaxin, a muscle relaxant, out of the market. According to Plaintiffs, Defendants used sham litigation, baseless citizen petitions, and unlawful “settlement agreements” to allocate the metaxalone market and fix prices. Judge Collier ruled that Plaintiffs’ case—seeking damages and injunctive relief for injured end-payors (i.e., consumers and third-party payors such as insurers and health benefit funds)—may proceed in its entirety. To read more about this case, please click here.
04.03.2013// Ed Wallace, Debbie Pritts to Speak at AALNC Annual Forum
On April 5, 2013, Ed Wallace and Debbie Pritts will be speaking at the American Association of Legal Nurse Consultants (AALNC) annual forum. The AALNC is a not for profit organization designed for the professional development of legal nurse consultants. This year’s gathering is taking place in Chicago.
Ed and Debbie will be presenting at a conference session titled: Litigation Strategy and Case Analysis in Product Liability from an Attorney and LNC (Legal Nurse Consultant) Perspective. Both Ed and Debbie have the requisite expertise to speak on this subject. Ed has been named to Plaintiffs’ steering committees and held other leadership positions nationwide in several of the firm’s mass tort cases. Debbie likewise has more than 25 years of clinical experience as a legal nurse consultant.
Click here for more information on the forum.
04.02.2013// Wexler Wallace Files Case Against the Makers of Suboxone
On March 26, 2013, Wexler Wallace LLP and its co-counsel filed an antitrust suit on behalf of a class of consumers and third-party payors against drug maker Reckitt Benckiser for allegedly engaging in an anticompetitive scheme to exclude competition for its opiate addiction drug, Suboxone. The complaint alleges, inter alia, that Reckitt unlawfully maintained and extended its monopoly of Suboxone by developing a different formulation of the drug-- an oral film –attempting to subvert generic competition in the market that had previously existed for the medication in its original tablet form.
The complaint also alleges that to further delay generic entry and buy time to convert consumers from the tablet to the film, Reckitt filed sham citizen petitions with the Food and Drug Administration (“FDA”) and sabotaged the FDA’s Abbreviated New Drug Application process for approving generic alternatives. According to the complaint, Reckitt’s conduct enabled it to reap over a billion dollars in revenue while preventing consumers from obtaining much cheaper generic versions of Suboxone that would have been available almost four years ago.
For more about the case, please click here.
03.11.2013// Edward A. Wallace of Wexler Wallace LLP Appointed Interim Co-Lead Counsel in Nationwide Product Liability Class Action Against Electrolux
Edward A. Wallace of Wexler Wallace LLP, along with co-counsel Hansen Reynolds Dickinson Crueger LLC and Greg Coleman Law PC, was appointed interim co-lead counsel in a nationwide product liability class action against Electrolux Home Products, Inc. Judge Christina Snyder of the United States District Court for the Central District of California also appointed co-counsel Kreindler & Kreindler, LLP as interim liaison counsel. The lawsuit, filed on September 27, 2012, seeks relief on behalf of a nationwide class of consumers who purchased allegedly dangerous and defective clothes dryers from Electrolux. Plaintiffs allege that the design of the dryers allows lint to accumulate next to the heat source, and that this design has caused thousands of dryer fires throughout the United States.
03.11.2013// Court Denies Defendant’s Attempt to Dismiss Nationwide Class Action Alleging Dangerous and Defective Clothes Dryers
On March 8, 2013, co-lead counsel Wexler Wallace LLP, Hansen Reynolds Dickinson Crueger LLC, and Greg Coleman Law PC, and liaison counsel Kreindler & Kreindler, LLP achieved a victory for Plaintiffs in a nationwide class action against Electrolux Home Products, Inc., when Judge Christina Snyder of the United States District Court for the Central District of California denied Electrolux’s motion to dismiss with respect to the majority of the Plaintiffs' claims. Plaintiffs Shawn Roberts and Nicole Horton allege that Electrolux designed dryers that are inherently unsafe because they accumulate lint behind the drum and next to the heat source. Judge Snyder ruled that Plaintiffs’ nationwide class action—seeking a declaration that the dryers are defective, a nationwide recall, and payment to the class members of all damages associated with the defective dryers—could proceed.
If you or someone you know owns a dryer that recently caught fire, you may contact us by completing our confidential online form or by calling 312-346-2222.
02.26.2013// Court Allows Plaintiffs’ Claims Against Bally Total Fitness and LA Fitness to Proceed
On February 25, 2013, Wexler Wallace and its co-counsel, Berger & Montague, achieved a victory for Plaintiffs in their class action against Bally Total Fitness and LA Fitness when Judge Elaine Bucklo of the United States District Court for the Northern District of Illinois ruled on the Defendants’ motions to dismiss. The Complaint alleges that Bally and LA Fitness breached their Premier and Premier Plus membership plans when Bally sold its clubs to LA Fitness, and their memberships were not honored after the sale. Many of the Premier and Premier Plus members incurred additional fees as a result of their contracts not being honored, and had to pay for new memberships at the clubs they had visited for years. In her order and opinion, Judge Bucklo ruled that Plaintiffs can proceed on their breach of contract claims, and the case will now move into the discovery stage.
02.08.2013// Wexler Wallace Attorneys Speak at ABA’s Midwinter Meeting
Thomas Doyle and Amy Keller are speaking at this weekend’s American Bar Association’s Midwinter Meeting in Coronado, California concerning alternative dispute resolution in labor and employment law. Amy will be speaking on recent legal developments concerning arbitration clauses in labor and employment cases, and Tom will be addressing potential collateral consequences in employment cases, specifically, when an employee’s immigration status is called into question.
01.28.2013// Court Denies Mentor’s Motion for Summary Judgment
On January 24, 2013 Judge Land of the U.S. District Court for the Middle District of Georgia denied defendant’s Motion for Summary Judgment, finding that Minnesota substantive law applies to plaintiff’s bellwether case filed against Mentor Corp. This product liability lawsuit, originally filed by Wexler Wallace LLP on behalf of plaintiff in the U.S. District Court for the District of Minnesota, was subsequently transferred by the Judicial Panel on Multidistrict Litigation to the Middle District of Georgia to be consolidated in In Re: Mentor Corp. ObTape Transobturator Sling Products Liability Litigation.
Defendant, Mentor Corp., is the manufacturer of the ObTape Transobturator Tape, a sling product used to treat stress urinary incontinence that was surgically implanted into plaintiff. Defendant sought summary judgment on the grounds that Ohio substantive law, the law of the state of plaintiff’s residency, applied, and that the application of Ohio law warranted dismissal. The Court disagreed, finding that Mentor Corp. has sufficient contacts with the state of Minnesota, the forum state, to require application of Minnesota law. Bellwether trials are set to begin in In Re: Mentor Corp. ObTape Transobturator Sling Products Liability Litigation this summer.
01.21.2013// Preliminary Approval Granted for Wellbutrin SR Settlement
Judge Lawrence F. Stengel of the Eastern District of Pennsylvania granted preliminary approval on Jan. 14 to a $21.5 million settlement between GlaxoSmithKline PLC and a class of indirect purchaser plaintiffs. Plaintiffs allege the pharmaceutical giant filed sham patent lawsuits to unlawfully keep generic alternatives of the blockbuster antidepressant Wellbutrin SR off the market, causing end payors to pay more for Wellbutrin SR than they would have if less expensive generic versions of the drug had entered the market earlier. In the case, filed in 2004, Wexler Wallace represents the United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund, one of several third-party payor plaintiffs.
The settlement defines the class as all third-party payors that paid or reimbursed for Wellbutrin SR and its generic equivalents between March 1, 2002, and Dec. 31, 2006, for members and beneficiaries in Arizona, Arkansas, California, Iowa, Florida, Massachusetts, Michigan, Minnesota, Missouri, Nevada, North Carolina, Pennsylvania, West Virginia and Wisconsin. Class members will be receiving notice of the settlement and instructions for filing claims in the near future.
01.18.2013// FDA Forces Metal-On-Metal Hip Makers to Make a Choice
Metal-on-Metal hip manufacturers like Johnson& Johnson, Zimmer Holdings Inc., Wright Medical Technology Inc. and Biomet Inc. will likely soon have a choice to make. Yesterday, the U.S. Food and Drug Administration (“FDA”) proposed that the manufacturers of these metal-on-metal implants must prove they are safe in order to continue selling them or before they begin to sell any new metal-on-metal designs. Johnson & Johnson and others are currently facing a massive multidistrict litigations stemming from injuries suffered by implantees who claim these implants generate debris from wear, increase metal ions to toxic levels in the body, and cause tissue damage as well as inflammation causing permanent damage and necessitating revisionary surgery.
This recent proposal by the FDA would mean that manufacturers must pursue approval and risk disclosing deficiencies or exit the market. The prospect of poor study results could cause manufacturers to pull their implants from the market. Under the proposal, the implant makers would have to file either a premarket approval application (known as a “PMA”) or a product development protocol. Most of these implants that are currently on the market have been approved through a much less rigorous FDA approval process.
For more on the FDA’s proposal, see this article.
The DePuy unit of New Brunswick, New Jersey-based Johnson & Johnson (JNJ) recalled 93,000 metal-on-metal hip devices in 2010 after more than 12 percent failed within five years. Wexler Wallace currently represents many individuals affected by defective hip implant systems. If you believe that you or a loved one may be affected by these implants, please contact us here.
01.03.2013// Wexler Wallace Attorneys Named Illinois Super Lawyers
For an impressive sixth year in a row, Wexler Wallace attorneys have been recognized as leading lawyers in their state. Manager and founding partner Kenneth Wexler has been named an Illinois Super Lawyer every year since 2008 and has made the 2013 list as well. Also recognized this year by Super Lawyers are associates Amber Nesbitt and Mark Miller. Both have been named Rising Stars by the publication for the second year in a row. Super Lawyers rates outstanding lawyers from more than 70 practice areas and recognizes attorneys who have attained a high-degree of peer recognition and professional achievement. Wexler Wallace is proud to have been named among this elite group of attorneys.
12.21.2012// Wexler Wallace Files Case Against the Makers of Flushmate
Together with co-counsel, Wexler Wallace LLP recently filed a class action complaint in the Northern District of Illinois against Sloan Valve Company (“Sloan”) for design and manufacturing defects associated with its Series 503 Flushmate III Pressure-Assist Flushing Systems (“Flushmate System”). Plaintiffs bring the action on behalf of all Illinois, Missouri, and Connecticut owners of the Flushmate System, and allege that the system contains defective vessels prone to weld separation and leaks. The leaks cause the Flushmate System to burst at or near the vessel welds, releasing stored pressure. In the worst cases, Plaintiffs allege, the pressure can lift the toilet lid and shatter the tank, posing impact or laceration hazards to consumers.
Plaintiffs allege that although Sloan offered a repair kit for the Flushmate System, the repair kit is inadequate, and Sloan failed to inform consumers of the risk that the Flushmate System would leak, separate at the weld joints, or release pressure and cause the toilet tank to shatter.
If you or someone you know owns a Flushmate System or a toilet with a Flushmate System installed, you may contact us by completing our confidential online form or by calling 312-346-2222.
To view a copy of the complaint, please click here.
12.20.2012// Dawn Goulet, Mark Miller Published in ITLA Magazine
An article written by Wexler Wallace attorneys Dawn Goulet and Mark Miller was recently published in Trial Journal, a publication of the Illinois Trial Lawyers Association (ITLA). The article examines the Seventh Circuit’s decision in Show v. Ford, 659 F.3d 584 (7th Cir. 2011) as it relates to established Illinois product liability law. The article focuses on how Illinois courts have adopted an integrated test for design defect based in part on the Restatement of Tort. Under this test, parties seeking to litigate a design defect can choose to employ either the consumer expectation test or the risk-utility test.
The article criticizes the Seventh Circuit’s use of dicta to undercut the consumer-expectation test as a viable, alternative test, concluding that there is still an important role for the lay judgment of jurors in product defect cases:
We ask juries to make tough decisions every day, knowing that jurors are not perfect. We do so because we still believe that there is value in having a group of real human beings, as representatives of our society, tell us what they consider to be reasonable or unreasonable. The Seventh Circuit’s decision in Show v. Ford is a disappointing rejection of this basic principal.
12.06.2012// Wexler Wallace Files Against the Makers of Nexium
Wexler Wallace LLP, along with its co-counsel, filed a case on behalf of a class of end-payors (i.e., consumers and third-party payors, such as employee benefit funds and insurers) against AstraZeneca for allegedly entering into non-competition agreements with a number of generic pharmaceutical manufacturers to keep generic versions of its blockbuster drug Nexium off the market.
According to the complaint, filed Nov. 28, AstraZeneca agreed to pay generic defendants, Ranbaxy Pharmaceuticals, Teva Pharmaceuticals and Dr. Reddy’s Laboratories, substantial sums in exchange for their agreement to delay marketing of generic Nexium for six years or more. The complaint alleges that without these delays, much cheaper generic versions of the drug would have entered the market as early as April 14, 2008. AstraZeneca made $3 billion annually from sale of the drug Nexium.
For a copy of the complaint, click here.
12.04.2012// Wexler Wallace LLP Files Class Action Complaint Against Electrolux for Defective Dishwashers
Along with co-counsel, Wexler Wallace LLP recently filed a nationwide class action complaint against Electrolux Home Products, Inc. in the Western District of North Carolina for design and manufacturing defects contained in its dishwashers. Specifically, plaintiffs allege that certain models of Electrolux’s dishwashers contain a design defect that allows the heating element to come into contact with or in dangerous proximity to the dishwasher’s polymer tub floor. The defect can result in flooding and, in some instances, house fires.
If you or someone you know owns a dishwasher with a similar defect, you may contact us by completing our confidential online form or by calling 312-346-2222.
To view a copy of the complaint, please click here.
11.01.2012// Judge Orders Foreign Documents to be produced in AMS Case
On Oct. 30, Judge Mary E. Stanley of the Southern District of West Virginia ordered American Medical Systems, Inc. (“AMS”) in In Re: American Medical Systems, Inc. Pelvic Repair Systems Product Liability Litigation to produce documents from foreign countries. This ruling came after Plaintiffs filed a motion to compel documents in the care, custody and control of American Medical Systems which are outside the United States.
For a full copy of the order, please click here.
Wexler Wallace, along with co-counsel, represents a number of women who have suffered complications from implanted surgical mesh. If you or a loved one suffered complications after use of Transvaginal Surgical Mesh to treat Pelvic Organ Prolapse or Stress Urinary Incontinence, please contact us or fill out our online form.
09.19.2012// Ken Wexler Speaks to State Treasurers
On September 11, 2012, Ken Wexler participated as a panelist at the 2012 Annual Conference of the National Association of State Treasurers (“NAST”). The topic was the Dodd-Frank Act and the impact of its financial reforms in the two years after its passage into law. On a panel moderated by Delaware State Treasurer Chip Flowers, Jr., Ken addressed the Volker Rule and how its exceptions may swallow the rule altogether. Ken also discussed his views of the new consumer protection agency and how the study and consequent delay built into Dodd-Frank generally will frustrate the stated purposes of the statute. Other panelists included Lynette Kelly, Executive Director of the MSRB; Rick Riccobono from the Washington State Department of Financial Institutions; and Chris Karlin, Division Manager, Government Banking Division, U.S. Bank.
09.17.2012// Wexler Wallace, Ken Wexler and Ed Wallace Receive Highest State Honors from Benchmark Plaintiff
Once again Wexler Wallace has been named a Highly Recommend Local Litigation Firm in the current edition of Benchmark Plaintiff: The Definitive Guide to America’s Leading Plaintiff Firms and Attorneys. In addition to the firm-wide recognition, partners Kenneth A. Wexler and Edward A. Wallace have been named local litigation stars. The Highly Recommended and Local Litigation Star designations are the highest awards given by Benchmark Plaintiff at the State level for plaintiffs’ attorneys.
Benchmark Plaintiff said of Wexler Wallace, “Despite a small roster of attorneys, the firm routinely goes toe-to-toe with some of the largest companies and corporations in the nation.” In the previous year, the firm has filed several cases against large corporations like Johnson & Johnson and Abbott, while pursing cases on behalf of consumers for antitrust and securities actions as well as mass torts. This past year, Wexler Wallace also saw the closure of a number of very successful cases, including Contaminated Pet Food and the Average Wholesale Price litigation, which when combined had settlements of more than $500 million.
Benchmark Plaintiff recognizes firms and litigators who have been consistently recommended as reputable and effective by clients and peers. Firms and attorneys selected were identified for inclusion based on their ability to consistently handle complex, high-stakes cases in multiple jurisdictions.
08.10.2012// Kenneth Wexler Appointed Co-Lead Counsel in Lipitor Antitrust Litigation
On August 10, 2012, the Honorable Peter G. Sheridan, United States District Judge for the District of New Jersey, appointed Kenneth A. Wexler as interim co-lead counsel for the end-payor putative class in In re Lipitor Antitrust Litigation, MDL 2332, an antitrust and consumer fraud class action filed against Pfizer, Inc. and Ranbaxy Pharmaceuticals, Inc., among others.
Wexler Wallace, with co-counsel, filed the case on March 27, 2012 on behalf of a class of end purchasers alleging that defendants committed a number of antitrust and consumer fraud violations starting with the fraudulent procurement of the patent covering the blockbuster brand name drug, Lipitor.
According to the complaint, Pfizer and Ranbaxy also entered into sham litigation and anticompetitive settlement in an effort to protect the Lipitor monopoly and allocate the post-generic entry market. As a result of these actions, generic Lipitor competition was delayed for a number of years, forcing the proposed class of end purchasers to pay more for Lipitor and its generics than they should have but for defendants’ conduct.
08.10.2012// Motion to Dismiss Denied in Nationwide Class Action Lawsuit Against Electrolux Alleging Defective Clothes Dryers
On August 9, 2012, U.S. District Judge D.P. Marshall Jr. of the Eastern District of Arkansas denied Electrolux’s motion to dismiss all but one of the class action claims against it alleging that Electrolux’s gas and electric clothes dryers are defective and prone to fires. Plaintiff Tammie Humphrey alleges that Electrolux dryers represent a known and unreasonable fire hazard because lint accumulates behind the drum and in the dryer’s combustible plastic air duct and blower housing, where consumers are unable to adequately detect or remove it, and where the dryer’s heat source can ignite the lint during normal use.
The lawsuit seeks certification of a nationwide class action, a declaration that the dryers are defective, a nationwide recall, and payment to class members of all damages associated with the defective dryers. To view a copy of the Class Action Complaint, click here. To view the Court’s Order denying the motion to dismiss, click here.
08.07.2012// Summary Judgment Denied in WXL
Today, Judge Mary A. McLaughlin of the Eastern District of Pennsylvania denied Defendants’ motions for summary judgment with respect to alleged anti-competitive agreements among the defendants. The court also approved a scheduling order for additional discovery and renewed motions for summary judgment following the K-Dur decision in the Third Circuit.
Plaintiffs allege that GSK and Biovail conspired to unlawfully delay generic competition for the blockbuster antidepressant, Wellbutrin XL. The certified class includes certain third-party payors and consumers which purchased Wellbutrin XL and/or its generic (once available) from November 14, 2005 to April 29, 2011 in six states: California, Florida, Nevada, New York, Tennessee, and Wisconsin. For more information about the Wellbutrin XL case, click here.
07.26.2012// Bard, Doctor Ordered to Pay $5.5 Million Over Implant
Bloomberg News, by Jef Feeley (July 25, 2012) -- C.R. Bard Inc. and a doctor must pay a total of $5.5 million in damages over a vaginal-mesh implant that left a woman incontinent and in chronic pain, a jury ruled in the first case over the devices to go to trial.
Jurors in state court in Bakersfield, California, concluded July 20 that Christine Scott and her husband deserved the damage award because of injuries caused by Bard’s Avaulta Plus vaginal implant, Elaine Houghton, one of the couple’s lawyers, said in a phone interview yesterday.
The panel found Bard officials were negligent in their handling of the devices, used to treat pelvic organs that bulge, or prolapse, or to deal with incontinence, she said.
“They seemed to focus on evidence we produced showing that Bard didn’t properly test the product before putting it on the market,” Houghton said. The lawyer said she asked jurors to consider awarding as much as $11 million in damages to the couple over the implant.
The case is the first to go to trial among hundreds of lawsuits alleging that implants made by Murray Hill, New Jersey- based Bard, Boston Scientific Corp. (BSX) (BSX) and other companies caused organ damage. The decision comes more than a month after Johnson & Johnson (JNJ) (JNJ)’s Ethicon unit announced it would stop selling four lines of vaginal mesh devices.
In its verdict, the California jury found Bard was 60 percent at fault for Scott’s injuries while Dr. Tillakarasi Kannappan, who surgically implanted the device in 2008, was responsible for the other 40 percent of the liability, according a copy of the verdict sheet filed with the court.
For the remainder of this article, please visit Bloomberg News.
Wexler Wallace represents a number of women who have suffered complications from implanted surgical mesh. If you or a loved one suffered complications after use of Transvaginal Surgical Mesh to treat Pelvic Organ Prolapse or Stress Urinary Incontinence, please contact us or fill out our online form.
06.20.2012// Flonase Class Certified
Judge Anita Brody of the Eastern District of Pennsylvania certified a class of indirect purchasers of Flonase – a name brand drug manufactured by GlaxoSmithKline PLC (“GSK”). Plaintiffs allege GSK filed improper citizen petitions with the United States Food and Drug Administration in an effort to keep generic versions of Flonase off the market. The certified indirect purchaser class seeks damages for purchases of Flonase by end-payors (consumers and third party payors) from August 2004 to March 2009.
The class, certified in IBEW – NECA Local 505 Health & Welfare Plan v. Smithkline Beecham Corp., consists of end-payors in Arizona, Florida, Massachusetts, and Wisconsin. Plaintiffs sought a nationwide class, but in her June 19 ruling Judge Brody stated, “Although indirect purchasers are correct that named plaintiffs may generally represent other plaintiffs with common but not identical claims, indirect purchasers cannot attempt to expand their class to include states in which no named plaintiff has demonstrated injury.” To read the full class certification opinion, click here. For more information about In re Flonase Antitrust Litigation, click here.
06.06.2012// Ethicon to Discontinue Sales of Four Vaginal Mesh Implants
Attorneys for Johnson & Johnson’s Ethicon unit informed a West Virginia Federal Judge this week that the company will stop selling four of its vaginal mesh implant products. The company currently is facing hundreds of lawsuits stemming from the implantation of these products to treat pelvic organ prolapse and stress urinary incontinence. Wexler Wallace LLP represents a number of women who have suffered injuries as a result of the mesh and is seeking damages on their behalf.
Johnson & Johnson has asked the Food and Drug Administration (“FDA”) for 120 days to end sales of Prolift, Prolift+ M, TVT Secur and Prosima vaginal mesh systems. A fifth product, Gynecare Gynemesh, may continue to be sold with changes to the labeling, provided the FDA grants Johnson & Johnson’s request. The 120 days will allow time for Johnson & Johnson to “notify its customers and provide those hospitals and surgeons with sufficient time to select alternative treatment options for their patients,” according to the letter sent to Judge Joseph Goodwin on June 4. In addition, during this time Ethicon will discontinue or revise as appropriate all marking materials.
The FDA first issued warnings to healthcare practitioners regarding serious complications associated with the mesh more than 3 years ago. Earlier this year, the FDA ordered Johnson & Johnson and C.R. Bard to study the rates of organ damage and infection linked to vaginal implants. In addition to Johnson & Johnson, mesh makers C.R. Bard and Endo Pharmaceutical Holdings, American Medical Systems, Boston Scientific and others have also been sued.
Wexler Wallace partner, Ed Wallace, who has litigated these cases for the past several years, said of the market withdrawal by Johnson & Johnson, “This decision reinforces why the litigation was started in the first place. It’s unfortunate this decision was not made years ago.”
Complications associated with the mesh include pain, recurrence, infection, mesh erosion through bodily tissue, permanent nerve damage, painful sexual intercourse and other serious losses to the implantee’s quality of life. If you or a loved one has suffered complications after use of Transvaginal Surgical Mesh to treat Pelvic Organ Prolapse or Stress Urinary Incontinence, please contact us or complete our Online Form.
05.30.2012// Thomas A. Doyle Joins Wexler Wallace LLP
Wexler Wallace recently welcomed Thomas A. Doyle, as of counsel, to the firm. Tom brings a wealth of experience in antitrust and employment litigation. He has served on both appointed and representative positions in several nationwide, high profile cases, including TFT-LCD (Falt Panel) Antitrust Litigation and In Re TransUnion Corp. Privacy Litigation. This June, he will lecture at the 29th Annual Labor & Employment Law Institute at the Brandeis School of Law. Tom is a graduate of the Illinois College of Law and is licensed to practice in Illinois, the Seventh Circuit and U.S. Supreme Court.
05.23.2012// Associate Dawn Goulet Published in Spring 2012 CADS Report
Wexler Wallace associate Dawn Goulet’s article on the growing number of class action cases filed in relation to advertising claiming that foods are “All Natural” was recently featured in the Spring 2012 edition of the CADS Report, the quarterly newsletter published by the ABA Section of Litigation’s Class Action and Derivative Suits Committee. Excerpted below, the article discusses recent efforts by class action plaintiffs to have courts interpret the phrase “All Natural”—something the federal Food and Drug Administration has declined to do for decades.
The article also compares the advertising claims in these cases to ones currently being litigated by the big players in the sugar and artificial sweeteners industry.
The American consumer faces a dilemma in the grocery aisle. On the one hand, we’ve been taught that foods high in sugar, fat, and cholesterol are bad for us. In the past few decades, a whole new industry was developed to market reduced-fat and artificially sweetened diet foods. Consumers could literally have their cake and eat it too. In recent years, however, processed foods, including many popular diet foods, have been criticized for containing chemicals, artificial colors, preservatives, flavor enhancers, and other indescribable, unpronounceable, and sometimes unimaginable ingredients. In a growing trend, consumers have begun to seriously question whether processed foods are good for them.
The result? Anyone walking the aisles of a grocery store today can see that “all natural” products are big business. Advertisers steer consumers away from processed foods and toward foods advertised as natural, organic, and simple, feeding on consumers’ growing fear that they do not really know what they are eating or feeding to their families. But are these products really better? In the 2002 bestseller Fast Food Nation, Eric Schlosser, author and investigative journalist, admonished readers, saying “If they have to put the word ‘natural’ on a box to convince you, it probably isn’t.” Fuel has recently been added to the controversy by the latest war between big sugar and the artificial-sweetener industry and a slew of recent class-action lawsuits.
Ms. Goulet’s article and the full publication are available to Section of Litigation members on the ABA’s website. (What Cases About “All Natural” Labels Mean for Marketing, CADS Report, Vol. 22, Spring 2012).
For more information about the consumer protection practice at Wexler Wallace, click here.
05.09.2012// Wexler Wallace Files Case Against Accretive Health
On May 4, 2012, Wexler Wallace LLP and Carney Williams Bates Pulliam & Bowman, PLLC, filed a shareholder derivative complaint in the United States District Court for the Northern District of Illinois against officers and directors Accretive Health, Inc. The plaintiff alleges that Accretive Health, Inc.’s board members consciously disregarded their fiduciary duty of loyalty to the company by making several decisions for which there was no valid business justification including systematically and pervasively violating healthy privacy laws, state debt collection laws, and state consumer protection laws. Plaintiffs allege that, due to these violations, the company is now subject to numerous investigations and potential lawsuits by the Department of Justice and its shareholders, all of which have and will continue to cause damage to the company. To view a copy of the complaint, click here.
04.30.2012// Consumer Reports Investigates: Dangerous Medical Devices
Consumer Reports Magazine (May 2012) -- Tens of millions of Americans live with medical devices implanted in their bodies—artificial joints, heart defibrillators, surgical mesh. And it’s a safe bet that most of them assume that someone, somewhere, tested the devices for safety and effectiveness. But that is rarely the case. For most implants and other high-risk devices brought to market, manufacturers do nothing more than file some paperwork and pay the Food and Drug Administration a user fee of roughly $4,000 to start selling a product that can rack up many millions of dollars in revenue. Often, the only safety “testing” that occurs is in the bodies of unsuspecting patients—including two of the three people whose stories are told in this report.
As for the smaller number of high-risk products for which advance safety studies are required, government rules allow them to be sold based on studies that are smaller and less rigorous than those required for prescription drugs.
“Standards for devices exist, they just don’t make sense,” says Diana Zuckerman, Ph.D., a vocal critic of the current system and president of the National Research Center for Women & Families, a nonprofit advocacy organization.
In 2011, a panel from the prestigious Institute of Medicine said the FDA should overhaul its device regulatory system because it fails to ensure patient safety before and after products go on the market. Instead, Congress is now debating a new law that would keep the present system virtually intact and ratify an agreement between the FDA and industry to get devices on the market even faster.
The FDA believes “the program has served American patients well,” says Jeffrey Shuren, M.D., director of the agency’s Center for Devices and Radiological Health. “As a responsible guardian of public health, the FDA believes it’s a challenge to eliminate a program without having a better alternative.”
But an investigation by Consumer Reports, which included interviews with doctors and patients and an analysis of medical research and a device-safety database maintained by the FDA, shows the following areas of concern:
- Medical devices often aren’t tested before they come on the market. “What they’re doing is conducting clinical trials on the American public,” says Dan Walter, a political consultant from Maryland. His wife was left with heart and cognitive damage from a specialty catheter, cleared without testing, that malfunctioned during a procedure to treat an abnormal heartbeat.
- There’s no systematic way for the government, researchers, or patients to spot or learn about problems with devices. “A coffeemaker or toaster oven has a unique serial number so if a problem is found, the company can contact you to warn you. Your artificial hip or heart valve doesn’t,” Zuckerman says. “Your doctor is supposed to notify you of a problem but may not be able to if he has retired or passed away.”
- Without major changes in the system, there’s not much that patients can do to protect themselves.
Surgical Mesh: No Testing
In 2007, Janet Holt of Floresville, Texas, felt swelling in her pelvic area. She went to her gynecologist, who told her that her bladder and uterus had prolapsed—dropped out of their normal position within her pelvis. The doctor recommended a hysterectomy and bladder lift.
“He talked about building a little bird’s nest to hold my bladder up,” Holt recalls. “He said I’d be back at work in two weeks.” She has yet to return to work full-time on the cattle ranch and small chain of restaurants she runs with her husband.
The “bird’s nest” turned out to be a sheet of synthetic mesh that was implanted by instruments inserted through the walls of her vagina. In the weeks and months after surgery, she says, “I was in such pain I couldn’t sit, I couldn’t stand, and I could hardly walk.” Over time, the mesh shrank and shifted, eventually working its way back out of the vaginal wall, an experience Holt likens to “open cigarette burns with each step you take. It’s complete torture.”
Today, after eight surgeries to adjust and remove the mesh, Holt, who is suing the device manufacturer, says she has been left with painful nerve damage in one leg. “I’m 54 years old and it has totally ruined my life,” she says.
Holt is one of hundreds of thousands of women implanted with transvaginal mesh for prolapse repair and bladder support since the first such products came on the market in the early 2000s. Manufacturers marketed the mesh packaged in a “kit” with tools for insertion and marketed them to doctors as an easier way to do a surgery that had traditionally required special additional training.
“The companies were saying, ‘The salesman will show you how to do it,’ ” said Lewis Wall, M.D., professor of obstetrics and gynecology at Washington University in St. Louis. Despite thousands of reports of adverse events, repeated alarms by women’s-health and consumer-health advocates, and multiple lawsuits, these products are still being sold—and are still classified as “moderate risk” devices.
In an August 2011 petition asking the FDA to take transvaginal mesh off the market, the consumer advocacy group Public Citizen called it “a ‘poster-child’ example of the fundamental failure … to protect the public’s health and welfare.”
To read the remainder of this article, please click here. A version of this article appeared in the May 2012 issue of Consumer Reports magazine with the headline “Dangerous Devices.”
04.25.2012// Edward Wallace Appointed to Plaintiffs’ Steering Committee in MDL Nos. 2187, 2325, 2326 and 2327
In an April 17, 2012 order issued by Chief Judge Joseph R. Goodwin, Edward A. Wallace was appointed to the plaintiffs’ steering committee for a number of cases related to the implantation of transvaginal surgical mesh. They include the following matters: In re C.R. Bard, Inc. Pelvic Repair Systems Products Liability Litigation (MDL No. 2187);In re American Medical Systems, Inc. Pelvic Repair Systems Products Liability Litigation (MDL No. 2325); In re Boston Scientific Corp. Pelvic Repair Systems Products Liability Litigation (MDL No. 2326); and In re Ethicon, Inc. Pelvic Repair Systems Products Liability Litigation (MDL No. 2327).
The FDA issued an alert to health care practitioners in October 2011 warning them to only use transvaginal mesh as a last resort for treating pelvic organ prolaspe or stress urinary incontinence. Wexler Wallace represents hundreds of claimants that have suffered serious physical and mental injuries as a result of implanted transvaginal surgical mesh. If you or a loved one has suffered complications after the use of a transvaginal surgical mesh to treat pelvic organ prolapse or stress urinary incontinence, please contact Wexler Wallace or complete our online form.
04.13.2012// Wexler Wallace Files Securities Case against Groupon
Wexler Wallace is local counsel in a class action lawsuit against Groupon, Inc. (NASDAQ: GRPN) on behalf of investors who purchased Groupon common stock between November 4, 2011 and March 30, 2012. The lawsuit alleges that Groupon, and certain of its officers and directors, and the underwriters of Groupon’s initial public offering, violated federal securities laws through false and misleading statements related to Groupon’s financial results and internal controls.
More specifically, the complaint alleges that defendants violated the Securities Act of 1933 and the Securities Exchange Act of 1934 by issuing a series of misrepresentations and omissions related to Groupon’s internal controls, financial results and business.
In November 2011, Groupon went public with an offering of 35 million shares priced at $20 per share, netting Groupon $658 million and its underwriters $42 million. In a March 30, 2012, press release and its first annual report filed with the Securities and Exchange Commission, Groupon announced that it was revising its fourth quarter 2011 financial results, resulting in a $14.3 million reduction to its fourth quarter revenues. Groupon also disclosed that its auditors found a material weakness in its internal controls, and that it could not assure the accuracy of its financial statements. On April 2, 2012, the first trading day following Groupon’s announcement, the company’s stock price dropped by nearly 17% to $15.27, well below its $20 IPO price and the class period high of $26.19.
The lawsuit is pending in the United States District Court for the Northern District of Illinois. To view a copy of the complaint, click here.
04.03.2012// Wexler Wallace Files Case Against Makers of Lipitor
Wexler Wallace LLP, along with its co-counsel, filed a case on March 27 on behalf of a class of end purchasers against Pfizer, Inc. and Ranbaxy Pharmaceuticals, Inc., alleging that defendants committed a number of antitrust violations starting with the fraudulent procurement of the patent covering the blockbuster brand name drug, Lipitor.
According to the complaint, Pfizer and Ranbaxy also entered into sham litigation and anticompetitive settlement in an effort to protect the Lipitor monopoly and allocate the post-generic entry market. As a result of these actions, generic Lipitor competition was delayed for a number of years, forcing the proposed class of end purchasers to pay more for Lipitor and its generics than they should have but for defendants’ conduct.
Cases for both direct and indirect purchasers of Lipitor have been filed in New Jersey, Pennsylvania, New York and Massachusetts. On March 29, 2012, the Judicial Panel for Multi-District Litigation heard argument on consolidation and transfer of the pending cases to one forum. The parties are awaiting the Panel’s decision on these issues.
For a copy of the complaint, click here.
03.12.2012// Benchmark Plaintiff Honors Wexler Wallace
In the inaugural issue of Benchmark Plaintiff, Wexler Wallace LLP was recognized as a highly recommended Illinois plaintiffs' litigation firm. Wexler Wallace LLP was one of only seven firms in the state to receive this recognition. Partners Kenneth A. Wexler and Edward A. Wallace were selected as "Local Litigation Stars" by the publication as well.
Benchmark Plaintiff, The Definitive Guide to America’s Leading Plaintiff Firms & Attorneys, was spawned by Benchmark Litigation in 2011. It is the only publication on the market to focus exclusively on litigation in the United States. According to its Website, the guide’s results are the culmination of a six-month research period that allows researchers to conduct extensive interviews with litigators and their clients. During these interviews Benchmark examines recent casework handled by the firms and asks sources to offer their professional opinions on litigators practicing within their state or national practice areas.
For a complete list of Illinois rankings, click here.
03.12.2012// Wexler Wallace Files Antitrust Case Against the Makers of Skelaxin
Wexler Wallace LLP, along with its co-counsel, filed a case on behalf of a class of end purchasers against King Pharmaceuticals, Inc. and Mutual Pharmaceuticals, Inc., alleging that King engaged in sham litigation against a number of potential generic manufacturers of the muscle relaxant, brand name Skelaxin.
According to the complaint, filed March 8, King and Mutual also conspired to flood the FDA with baseless Citizen Petitions in an effort to protect the Skelaxin monopoly. In addition, the complaint alleges that King and Mutual entered into an anticompetitive settlement in which Mutual received cash payments, among other things, for helping King keep generics out of the market. As a result of these actions, generic Skelaxin competition was delayed for more than 3 years, forcing the proposed class of end purchasers to pay more for Skelaxin and its generics than they should have but for defendants’ conduct.
For a copy of the complaint, click here.
03.08.2012// Wexler Wallace LLP Files Class Actions against Major Drug Manufacturers
On March 7, 2012, Wexler Wallace, with co-counsel Hagens Berman Sobol Shapiro and Spector Roseman Kodroff & Willis, filed seven class actions against major drug manufacturers. These actions, which were brought on behalf of four health benefit funds and are pending in federal courts in Illinois, New York, New Jersey, and Pennsylvania, allege that major drug manufacturers have paid, and continue to pay, undisclosed kickbacks to privately-insured individuals so that those health plan members choose the drug manufacturers’ expensive branded drugs instead of less expensive therapeutic alternatives. Each plaintiff health plan seeks to represent a class of third-party payors that were overcharged for prescription drugs taken by their members as a result of these illegal kickbacks.
The Complaints allege that 10 major drug manufacturers (Merck & Co., Inc., Pfizer, Inc., Amgen Inc., AstraZeneca, Inc., GlaxoSmithKline, Novartis Pharmaceuticals Corp., Bristol-Meyers Squibb Co., Otsuka America Pharmaceutical, Inc., Gilead Sciences, Inc., and Abbott Laboratories) designed and implemented unlawful prescription co-payment (“co-pay”) subsidy programs that subsidize privately-insured individuals’ co-pays for the manufacturers’ key brand name drugs. They include the blockbuster drugs Nexium (AstraZeneca), Lipitor (Pfizer), and Crestor (AstraZeneca). Requiring health plan members to pay a small portion of the high cost of a branded prescription drug — either a co-pay or co-insurance — provides a reasonable, personal incentive for privately-insured individuals to choose less-costly, usually generic, medications, and drives down the cost of the much larger residual portion paid by the health benefit providers. Each of the co-pay subsidy programs implemented by defendant drug manufacturers alters the carefully calibrated co-payment system negotiated by health benefit providers and their members, and each is intended to steer unsuspecting members toward more expensive brand name drugs when less expensive therapeutic alternatives are available in generic form. The complaints allege that these co-pay subsidy programs, which are estimated to increase health benefit providers’ prescription drug costs by $32 billion over the next 10 years, violate federal racketeering and federal antitrust laws.
For a Washington Post Article on these class actions, click here.
02.08.2012// John Marshall Law School Team Advances to Semi-Finals and Teska wins Best Oralist in Environmental Moot Court Competition
Wexler Wallace congratulates law clerk Bethany Teska, a third-year student, on her outstanding performance at the Stetson International Environmental Moot Court Competition Atlantic Regional this past weekend, February 4 and 5, at American University in Washington D.C.
The Stetson International Environmental Moot Court Competition began in 1996 to raise awareness about international environmental challenges. The event has grown to include regional competitions in Australia, Latin America, North America, North India, South India, and Southeast Asia, with more than 80 teams competing from law schools around the world. The Stetson competition provides an opportunity for law students to explore issues of international environmental law in the context of a dispute before the International Court of Justice. The competitors’ memorials (briefs) and oral presentations are evaluated by international environmental legal experts.
Teska and teammate Molly Schmiege argued issues relating to a nuclear accident and sovereign debt. The John Marshall Law School Moot Court Honors Program is proud to announce the team’s Semi-Finalist placement at the competition. Teska was also named Best Oralist for the preliminary rounds.
01.13.2012// Walgreen Sued for Overcharging for Generics
Jan. 13, Chicago Tribune -- A union benefits fund filed a class action suit Wednesday, accusing Walgreen Co and generic drug maker Par Pharmaceutical Cos Inc of overcharging for various generic drugs in a bid to boost profits. The complaint, filed by the United Food and Commercial Workers Unions and Employers Midwest Health and Pension Fund, alleges that Walgreen, the largest U.S. drugstore chain, violated federal racketeering laws.
“Starting April 1999 through December, 2006, Par and Walgreen conspired to increase their profit through at least two schemes to illegally fill prescriptions with Par’s higher-priced products rather than the specific drugs prescribed by physicians,” the complaint alleged.
The drugs involved included generic versions of antidepressant drug Prozac and anti-heartburn drug Zantac, the complaint said.
Neither company could immediately be reached for comment outside U.S. business hours.
The case is In re: United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund vs. Walgreen Co., U.S. District Court for Northern District of Illinois, No. 12-CV-00204.
01.11.2012// Wexler Wallace LLP Files Class Action against Walgreens and Par Pharmaceutical
On January 11, 2012, Wexler Wallace, with co-counsel Cafferty Faucher LLP and the Karmel Law Firm, filed a class action in the United States District Court for the Northern District of Illinois on behalf of the United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund (“UFCW”). UFCW seeks to represent a class of third party payors that were overcharged for prescription drugs taken by their members as a result of a scheme to illegally switch patients’ prescriptions.
Walgreens operates more than 7,000 pharmacies in forty-nine states, the District of Columbia and Puerto Rico. Defendant Par Pharmaceutical markets and sells generic drugs, including generic versions of the highly prescribed brand name drugs Zantac (known generically as ranitidine HCl or “ranitidine”), a medication used to treat heartburn, ulcers and other digestive disorders, and Prozac (known generically as fluoxetine hydrochloride or “fluoxetine”), an antidepressant. The complaint alleges that, from July 1, 2001 through 2006, Walgreens and Par engaged in a widespread scheme to overcharge self-insured employers, union health and welfare funds and other private insurers by systematically switching patients prescriptions from a less expensive dosage form to a much more expensive one (i.e., from tablets to capsules or vice versa).
In addition to the extensive research UFCW and its counsel compiled through their investigation, the Complaint references testimony and insider documents that were unsealed at the end of last year in related whistleblower litigation brought on behalf of the federal government and a number of state governments.
If you are a third party payor that may have been overcharged for ranitidine capsules or fluoxetine tablets and would like more information about this case, you may contact us by completing our online form or by calling 312-346-2222.
To view a copy of the Complaint, please click here.
01.04.2012// FDA Orders Safety Studies for J&J and C.R. Bard Vaginal Mesh
Jan. 4 (Bloomberg Businessweek) -- The Food and Drug Administration ordered Johnson & Johnson and C.R. Bard Inc. to study rates of organ damage, infection and painful sex linked to vaginal implants, reacting to doctors and patients who say the devices have harmed women.
The regulator wrote to J&J, C.R. Bard and 31 other manufacturers yesterday, asking them to collect as much as three years of data on the safety and effectiveness of the implants, the FDA’s William Maisel said in a telephone interview. That followed an agency report in July that found a fivefold jump in deaths, injuries or malfunctions.
Almost 300,000 synthetic meshes were implanted in U.S. women in 2010 to treat incontinence or weakened pelvic muscles, the agency estimates. The devices’ alleged failures have spurred more than 650 lawsuits against manufacturers, as well as heightened scrutiny of the FDA program that cleared meshes for sale without human testing.
“We believe there are certain uses of mesh where we need additional data to help guide the clinical community,” said Maisel, deputy director of science for the FDA’s device-approval center. “Our goal is to make sure the right women use it at the right time.”
J&J, the biggest maker of vaginal mesh, fell less than 1 percent to $65.33 at 3:19 p.m. New York time. C.R. Bard declined less than 1 percent to $86.10. J&J is based in New Brunswick, New Jersey, and Bard in Murray Hill, New Jersey.
The letters ask each manufacturer to collect data on the transvaginal procedures, in which the meshes are threaded in place through an incision in the vagina. The FDA said in July that it wasn’t clear from available studies whether the devices provided any benefit over older methods in many cases.
The requests also went to Endo Pharmaceuticals Holding Inc. of Chadds Ford, Pennsylvania; and Boston Scientific Corp., based in Natick, Massachusetts. The companies have 30 days to respond.
Kevin Wiggins from Endo Pharmaceuticals and Eric Olson from Boston Scientific didn’t immediately return phone calls seeking comment. Messages also weren’t immediately returned by Matthew Johnson, a spokesman for J&J’s Ethicon unit, which makes the devices.
In September, an advisory panel recommended the FDA reclassify mesh used for pelvic organ prolapse, a condition in which weakened muscles fail to support internal organs, as “high-risk” devices that require human testing before they can reach the market. The FDA hasn’t made a decision on that yet, Maisel said today. He said the agency also isn’t likely to heed the call of some patient advocates for a complete recall.
“There’s strong support in the clinical community that mesh serves a role for certain patients,” he said. “Our goal is not to completely remove these products from the market.”
Manufacturers sell about $175 million worth of prolapse mesh worldwide, Bard estimated on a conference call in 2010.
–With assistance by Michelle Fay Cortez in Minneapolis. Editors: Bruce Rule, Reg Gale
To contact the reporter on this story: Alex Nussbaum in New York at email@example.com
To contact the editor responsible for this story: Reg Gale at firstname.lastname@example.org; Michael Hytha at email@example.com
01.03.2012// Wexler Wallace Welcomes Associate Bethany Turke
Wexler Wallace LLP is pleased to announce that Bethany R. Turke has joined the firm. Bethany graduated from Harvard Law School in 2006 and clerked for Magistrate Judge Cheryl L. Pollak of the United States District Court for the Eastern District of New York from 2006 to 2007. After completing her clerkship, Bethany worked as a litigation associate in the New York and Chicago offices of Latham & Watkins LLP. Bethany is admitted to practice law in Illinois, New York, and the Eastern District of New York.
12.22.2011// Wexler Wallace Files Case Against Wyeth for Effexor XR
Wexler Wallace LLP, with co-counsel Branstetter Stranch & Jennings, PLLC, and Trujillo Rodriguez and Richards, LLC, filed a case against Wyeth, Inc. on behalf of Indirect Purchasers of the antidepressant Effexor XR. The plaintiffs allege that Wyeth fraudulently obtained a number of method of use patents for Effexor XR and engaged in sham litigation against 16 potential generic competitors in an effort to protect the Effexor XR monopoly.
As part of the scheme, plaintiffs also allege that Wyeth entered into an anticompetitive settlement with the first generic ANDA filer, Teva. As a result of these actions, generic Effexor XR competition was delayed for more than 2 years. For a copy of the consolidated complaint, click here.
On December 14, 2011, Kenneth A. Wexler was appointed interim class counsel for the End-Payor class, along with Jeffrey L. Kodroff of Spector Roseman Kodroff & Willis P.C., James E. Cecchi of Carella Byrene Cecchi Olstein Brody & Agnello, P.C., Michael M. Buchman of Pomerantz Haudek Grossman & Gross LLP, Richard J. Burke of Freed & Weiss LLC, and James R. Dugan, II, of The Dugan Law Firm. Lisa J. Rodriguez of Trujillo Rodriguez & Richards, LLC, was appointed Liaison Counsel for the putative class. For a copy of the Court’s Order appointing Wexler Wallace LLP as interim class counsel, click here.
12.07.2011// Bayer Covered Up Yasmin Blood Clot Risk: Ex-FDA Head
Law360, New York (December 05, 2011, 10:54 PM ET) -- Bayer AG hid the significance of potentially serious side effects of its Yasmin contraceptives despite knowing they were more likely to cause blood clots than other oral contraceptives, according to a former U.S. Food and Drug Administration chief's report unsealed Monday in multidistrict litigation in Illinois.
In a 121-page expert report, former FDA Commissioner David Kessler said the drugmaker had documented in the draft of an August 2004 white paper that Yasmin was 10 times more likely to cause serious side effects including deep vein thrombosis, the formation of a clot in a deep vein.
But in the white paper it finally submitted to the FDA that month, it took out its statement alerting regulators about the increased risk of venous thromboembolisms, or clots, linked to Yasmin, according to the report.
“Bayer presented a selective view of the data, and that presentation obscured the potential risks associated with Yasmin,” Kessler said in the report. “In my opinion, Bayer had a duty to present a full and balanced view of all the data and analysis concerning Yasmin to the FDA and health care professionals and failed to do so.”
The FDA refused to accept Kessler’s report, filed in July, for its Dec. 8 advisory committee meeting on the contraceptives, saying it had missed their Nov. 23 deadline for written submissions, according to an email it sent to Ned McWilliams, an attorney for one of the plaintiffs in the multidistrict litigation over Yasmin and Yaz who emailed the report to the FDA.
“I think the American public would want to know why the FDA has refused to consider important safety information that Bayer did not consent to be released to the public or the FDA until after the submission deadline,” McWilliams said he had written in response to the FDA. “Surely there must be special circumstances like these, where confidential safety information was not available until after the submission deadline.”
Kessler also said Bayer had marketed its Yasmin and Yaz contraceptives for the treatment of premenstrual syndrome even though neither drug had the FDA’s approval for that purpose.
In addition, Kessler’s report emphasized that the FDA could not anticipate all the potential safety risks of a drug, saying it was the drug manufacturer’s responsibility to make sure its drugs adhered to consumer protection laws.
In its October motion to exclude Kessler’s testimony, Bayer argued Kessler had overstepped his boundaries as a medical expert in advancing such legal opinions as expert testimony.
“We have nothing further to add as these are matters of litigation,” Bayer spokeswoman Rose Talarico said in a statement Monday. “We expect them to be addressed further at trial.”
Representatives for the FDA could not immediately be reached for comment Monday.
The MDL is In re: Yasmin and Yaz (Drospirenone) Marketing, Sales Practices and Products Liability Litigation, case number 3:09-md-02100, in the U.S. District Court for the Southern District of Illinois.
— Article by Sindhu Sundar
–Editing by Elizabeth Bowen.
12.06.2011// Mark J. Tamblyn Entering Public Service
Wexler Wallace LLP is proud to announce that Mark J. Tamblyn is entering public service and, effective January 3, 2012, will be serving as a Deputy Attorney General within the State of California’s Department of Justice. While the firm will miss him, Mark’s acceptance of a position in public service is a continuation of his career of helping others. Anyone that has worked with Mark knows that he has been a dedicated partner to our firm and that he will bring that same dedication, skill and good judgment to serving the People of the State of California.
11.22.2011// Wexler Wallace LLP Files Class Action on Behalf of Hospira, Inc. Investors
On November 21, 2011, Wexler Wallace, with co-counsel Robbins Geller Rudman & Dowd LLP, filed a class action in the United States District Court for the Northern District of Illinois on behalf of purchasers of common stock in Hospira, Inc., (“Hospira”) (NYSE: HSP) between March 24, 2009, and October 17, 2011 (“Class Period”).
If you purchased common stock in Hospira between March 24, 2009, and October 17, 2011, or would like more information about this case, you may contact us by completing our online form or by calling 312-346-2222.
To view a copy of the Complaint, please click here.
10.25.2011// Amber Nesbitt, Mark Miller Selected as Rising Stars
Wexler Wallace is pleased to announce that Amber Nesbitt and Mark Miller have been selected as Rising Stars for inclusion in Super Lawyers magazine’s Illinois 2012 edition. Super Lawyers magazine names attorneys in each state who received the highest point totals, as chosen by their peers and through independent research. The Rising Stars designation is limited to the state’s top up-and-coming attorneys who are 40 or under, or have been practicing for 10 years or less. No more than 2.5 percent of the lawyers in the state are named to the Rising Stars list.
10.20.2011// Wexler Wallace LLP Files Class Action on Behalf of Ace Hardware Franchise Investors
On October 18, Wexler Wallace LLP, along with co-counsel Patrick R. Burns and Zimmerman Reed PLLP, filed a nationwide class action against Ace Hardware Corporation for providing misleading information to potential franchise investors.
The complaint alleges that Ace’s “Vision 21” concept, purportedly designed to help new or converted franchises achieve retail success by providing them with the tools necessary to compete with big box hardware or home improvement stores, resulted in failed franchises. Plaintiffs allege that Ace provided potential Vision 21 franchisees with false and misleading financial information relating to the success of new or converted stores.
If you or someone you know invested in a Vision 21 franchise, you may contact us by completing our confidential online form or by calling 312-346-2222.
To view a copy of the complaint, please click here.
10.04.2011// Class Action Lawsuits are a Strong Deterrent to Accounting Wrongdoing, Groundbreaking Study Finds
By Jeffrey R. McCord of The Investor Advocate (August 15, 2011) - New research by finance and accounting professors at Rutgers and Emory universities’ business schools finds that both class action lawsuits and SEC enforcement actions are strong deterrents to accounting gamesmanship. And, in many instances class actions are the stronger deterrent.
“Our research found statistically and economically significant deterrence associated with both SEC enforcement and class action lawsuits,” said Simi Kedia, Ph.D, MBA, associate professor of finance at Rutgers University School of Business in an interview with The Investor Advocate. “We looked at firms in the same industry as the enforcement target and found that the average peer firm subject to SEC action and/or litigation reduces discretionary accruals (i.e., reporting as sales transactions for which payment has not been received) equivalent to 14 percent to 22 percent of the media return on assets in the aftermath of such enforcement.”
The study measured the effectiveness of the two primary methods of federal securities regulatory and law enforcement: “public” enforcement by the Securities and Exchange Commission; and, “private” enforcement through securities class action lawsuits.
Regulatory Failures Enhance Importance of Class Actions
A recent story by the New York Times’ Gretchen Morgenson, A.I.G. Sues Bank of America Over Mortgage Bonds, reported on why private lawsuits are particularly important at a time when federal failure to enforce the law is considered one cause of our on-going financial-economic crisis and of public discontent with government:
“When federal authorities don’t fulfill their obligation to enforce the law, they essentially give an imprimatur to the financial entities to do whatever they want and disregard the law,” said Kathleen C. Engel, a professor at Suffolk University Law School in Boston. “To the extent there are places where shareholders and borrowers can pursue claims, they are really serving the function of the government. They are our private attorneys general.”
Lawsuits have long been a crucial method for shareholders to recover losses. A February letter to the Securities and Exchange Commission from the general counsel of the California Public Employees’ Retirement System noted that private litigants in the 100 largest securities class action settlements had recovered $46.7 billion for defrauded shareholders.
“I am not surprised at all that rigorous unbiased research now proves class action law suits are a robust deterrent to financial fraud and wrongdoing,” explained Salvatore J. Graziano, Esq., president of the National Association of Shareholder and Consumer Attorneys. “On behalf of defrauded institutional investor clients, securities plaintiffs’ attorneys routinely conduct thorough and ground breaking investigations of corporate defendants including securing information from knowledgeable former employees in our civil prosecutions. In fact, private investor lawsuits at times also help further investigations by the SEC and other federal agencies.”
Indeed, the new study found that in cases where both the SEC and class action lawsuits take action, on average private lawsuits precede SEC action by 297 days.
Not surprisingly, the strongest deterrence effect was found when both SEC proceedings and class actions are launched.
Class Actions Recover More Money & Can be Stronger Deterrent than SEC
“Class action lawsuits, although often maligned as frivolous and socially wasteful, can have positive externalities by curbing aggressive reporting behavior of peer firms,” the paper by Dr. Kedia and her colleagues states. Indeed, class action lawsuits recover far more money – twice as much or more — from wrongdoers than SEC actions, according to sources cited by the professors. And, in most situations, the deterrence value of class actions (in the absence of SEC enforcement) is actually stronger than that of the SEC when acting without a corresponding class action.
This first study to validate the enforcement value of class actions through empirical research was conducted by Dr. Kedia and Shivaram Rajgopal, Ph.D., Chartered Accountant and Schaefer Chaired Professor of Accounting at Emory University’s Goizueta Business School, with Jared Jennings, a doctoral student at the University of Washington’s school of business. Their paper, entitled The Deterrence Effects of SEC Enforcement and Class Action Litigation, reports their analysis of 474 SEC actions alleging financial statement misrepresentation and 1,111 class action lawsuits alleging violations of Generally Accepted Accounting Procedures during 1996 through 2006. The paper was first circulated for comment in June.
Among other findings, the professors reported:
- “The SEC publicly targets a very small fraction of firms – in our sample only 0.74% of firms were subject to SEC enforcement. At these low levels of enforcement, a substantial fraction of misreporting is likely to go undetected. Therefore, if potential miscreants consider the probability of detection to be too low, they are unlikely to change their behavior.”
- “Securities class action litigation for alleged reporting irregularities is more likely against an average firm – in our sample 1.28% of firms are subject to class action litigation. The greater likelihood of class action litigation, combined with higher monetary sanctions, likely renders lawsuits as a potentially effective way to deter reporting irregularities at peer firms.”
The purpose of the research was to empirically measure the value of SEC enforcement actions at a time when the Commission has been criticized as ineffective. It also sought to assess the value of securities class action lawsuits, a legal remedy for investors and private enforcement mechanism that has been attacked for many years within corporate and political arenas.
Source: The Investor-Advocate
09.27.2011// FDA Warns Of the Possible Increased Risk of Blood Clots for Women Taking Yaz/Yazmin, Among Others
On September 26, 2011, the U.S. Food and Drug Administration(FDA) released the following information: The FDA is informing the public that it has not yet reached a conclusion, but remains concerned, about the potential increased risk of blood clots with the use of drospirenone-containing birth control pills. FDA has completed its review of the two 2011 studies that evaluated the risk of blood clots for women who use drospirenone-containing birth control pills, previously mentioned in FDA's Drug Safety Communication issued on May 31, 2011.
FDA is continuing its review of a separate FDA-funded study that evaluated the risk of blood clots in users of several different hormonal birth control products (contraceptives). Preliminary results of the FDA-funded study suggest an approximately 1.5-fold increase in the risk of blood clots for women who use drospirenone-containing birth control pills compared to users of other hormonal contraceptives.
Given the conflicting nature of the findings from six published studies evaluating this risk, as well as the preliminary data from the FDA-funded study (See Data Summary), FDA has scheduled a joint meeting of the Reproductive Health Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee on December 8, 2011 to discuss the risks and benefits and specifically the risk of blood clots of drospirenone-containing birth control pills.
A list of drospirenone-containing birth control pills is available here.
Patients should talk to their healthcare professional about their risk for blood clots before deciding which birth control pill to use. Known risk factors that increase the risk of a blood clot include smoking, being overweight (obesity), and family history of blood clots, in addition to other factors that contraindicate use of birth control pills.
Women currently taking a drospirenone-containing birth control pill should be informed of the potential risk for blood clots. FDA previously communicated preliminary information about these concerns to the public on May 31, 2011 .
FDA has prepared a list of questions and answers to provide an overview of this potential safety issue. FDA will continue to communicate any new information to the public as it becomes available.
For the complete FDA release, click here.
09.19.2011// Metal Hip Implants Fail Faster Over Time: UK Report
Law360, New York (September 16, 2011, 5:21 PM ET) -- Metal-on-metal hip implants are failing faster as they age, with one DePuy Orthopaedics Inc. device requiring additional surgery at a rate of almost 30 percent after six years, according to a Thursday report by the National Joint Registry for England and Wales.
Metal-on-metal hip devices, including the “resurfacing” variants, are by far the implants that have the highest rates of revision, or eventual surgical removal or replacement, according to NJR. After five years, metal-on-metal devices have a revision rate as high as 13.6 percent and resurfacing devices have revision rates of 11.8 percent, while other hip implants typically have revision rates between 3.3 percent and 4.9 percent, according to the report.
Making matters worse, metal-on-metal implants didn’t age as well as other devices, experiencing “dramatic” increases in revision rates as the years passed, NJR said. While most hip prostheses reported a less than 1% increase in revision rates, resurfacing devices increased by about 2 percent, and the metal-on-metal devices climbed more than 4 percent over time.
The results were worse for women than men, NJR found. After five years, women aged 60 to 69 had revision rates of 12 percent for resurfacing hip implants and 7.34 percent for metal-on-metal devices overall. For men the same age, the rate was 7 percent for resurfacing implants and 5.5 percent overall.
Johnson & Johnson unit DePuy Orthopaedics Inc. announced last August that it would recall two hip replacement devices — ASR XL Acetabular and ASR Hip Resurfacing — two devices that NJR said performed particularly poorly.
The recall helped accelerate a decline in sales of metal-on-metal implants, NJR said. While metal-on-metal devices accounted for 15 percent of hip replacements tracked by NJR in 2006 and 2007, that number fell to 10 percent in 2009 and again to 5 percent in 2010.
In the latest report, the five-year revision rate for the recalled ASR XL Acetabular System was 17%, up from the 13% rate reported in 2010. While the NJR reported an alarming six-year revision rate of 29%, a DePuy spokeswoman said that that number shouldn’t necessarily be taken as gospel.
“The six-year revision rate should be interpreted with caution because it is based on a small number of cases,” spokeswoman Lorie Gawreluk said. “The five-year data is more statistically robust given the much larger patient population from which it is drawn.”
The NJR data is one factor that led to the recall, Gawreluk said. When DePuy voluntarily recalled the ASR device in August 2010, the latest NJR report showed higher revision rates around 12%, which differed from data previously reported to DePuy, according to Gawreluk.
DePuy said it continued to support ASR patients and their surgeons, reimbursing patients for recall expenses and conducting educational outreach for surgeons.
In May, the U.S. Food and Drug Administration ordered 21 manufacturers of metal-on-metal hip replacement systems, including DePuy, to conduct post-market surveillance studies to determine whether their devices were associated with a dangerous increase in levels of metals in patients’ bloodstreams.
The FDA instituted the monitoring program to find out more about safety issues associated with the devices, including concerns that the implant’s metal ball and socket bearings that make up the hip joint generate chromium and cobalt debris that spread to a patient’s surrounding bone and tissue.
A number of medical device giants — including DePuy and Stryker Corp. — have faced thousands of suits arising from problems with the artificial hips, including allegations that metal debris from the implants had damaged bone and tissue surrounding the implant and joint, damaging the implant and causing pain.
The NJR report also found that patients with knee and hip replacements tended to gain weight and have poorer health, while mortality rates within 90 days of hip replacements remained at historic lows, at 0.6 percent overall.
Source: Law 360
– By Dietrich Knauth
– Additional reporting by Roxanne Palmer. Editing by Kat Laskowski.
09.09.2011// FDA May Classify Surgical Mesh Devices for Failing Organs as High Risk
Bloomberg News, By Anna Edney (Aug 31, 2011) -- Johnson & Johnson, Boston Scientific Corp. (BSX) and other makers of surgical mesh may have to submit added safety data to regulators to keep their products on the market under a Food and Drug Administration staff recommendation.
The transvaginally implanted products fail to lead to better outcomes than non-mesh repair and should be reclassified as posing a high risk to patients, according to a report released today. Patient advocates are demanding a recall of the devices, now classified as moderate risk, and the FDA’s outside advisers will examine the issue next week.
The devices were approved through a streamlined process called 510(k) that is used to evaluate products similar to those already cleared and itself is under an agency review. The U.S. Institute of Medicine cited flaws with surgical mesh in July when it urged the FDA to abandon the process and require makers to prove each product is safe and effective on its own merits. The FDA is soliciting comment on the recommendation.
Mesh products “may expose patients to greater risk” than traditional repairs without mesh, FDA staff said in the documents, adding they have “not seen conclusive evidence” of improved clinical outcomes with the devices.
The agency received 1,503 reports of complications associated with the material from January 2008 to December 2010 when used for pelvic organ prolapse, the FDA said in a safety warning July 13. The devices were used in 75,000 transvaginal surgeries last year, according to the FDA.
The agency advised patients to be aware of risks including mesh erosion, pain and urinary incontinence, and to have annual check-ups after surgery. The FDA said it has cleared 85 surgical mesh devices to treat pelvic organ prolapse from 1992 and 2010.
Johnson & Johnson (JNJ), based in New Brunswick, New Jersey, and Boston Scientific of Natick, Massachusetts, didn’t immediately respond to requests for comment.
Consumer advocacy group Public Citizen, based in Washington, said Aug. 25 that the mesh devices should be recalled and reclassified.
A change in risk classification may take several years to complete and the agency said it could consider a grace period for makers of products on the market to submit data to comply with a more stringent review. The agency may require companies to conduct post market studies that could be designed to support future submissions to comply with the new process.
The devices are used in surgeries to address prolapsed organs and incontinence. About 300,000 women underwent surgical procedures last year to repair prolapsed organs, FDA data show.
Source: Bloomberg News
08.15.2011// Wellbutrin XL Class Certified
Today, Judge May A. McLaughlin of the Eastern District of Pennsylvania certified a class of indirect purchasers in the In re Wellbutrin XL Antitrust Litigation case. In this case, plaintiffs seek damages for injuries suffered due to anticompetitive conduct by GlaxoSmithKline and Biovail.
Plaintiffs allege that GSK and Biovail conspired to unlawfully delay generic competition for the blockbuster antidepressant, Wellbutrin XL. The certified class includes third party payors and certain consumers which purchased Wellbutrin XL and its generic (once available) from November 14, 2005 to April 29, 2011 in six states: California, Florida, Nevada, New York, Tennessee, and Wisconsin. To read the full class certification opinion, click here.
In a separate but related action, Judge McLaughlin also certified a class of direct purchasers. Kenneth A. Wexler, along with co-counsel Peter St. Philip and Richard W. Cohen from Lowey Dannenberg Cohen & Hart, argued the class certification motion for the indirect purchasers. The Court appointed Wexler and Amber M. Nesbitt co-lead counsel for the indirect purchaser class; they are joined by Cohen and St. Philip, as well as Jim G. Stranch and Joe P. Leniski , Jr. of Branstetter, Stranch, & Jennings. For more information about the Wellbutrin XL case, click here.
07.14.2011// FDA Warns Surgeons To Avoid Mesh Devices
Law360, New York (July 13, 2011) -- The U.S. Food and Drug Administration on Wednesday warned against using surgical mesh in vaginal surgeries to treat a condition in which pelvic organs sag from their normal position, urging surgeons to consider less risky methods.
The agency issued a similar warning in October 2008, but concluded that serious complications arising from the use of surgical mesh were not rare after being flooded with 1,500 more reports of problems associated with the device from 2008 to 2010.
The surgical mesh is permanently implanted in women to correct pelvic organ prolapse, which occurs when structures that support the bladder, uterus and bowel grow weak or stretched — typically after childbirth — causing the organs to drop.
Implanting the mesh through the vagina can fix the problem, but it can also lead to infections, bleeding, pain during sexual intercourse and urinary problems, the FDA said. Moreover, the agency has received reports that surgical tools used to implant the mesh pierced holes in organs.
“The FDA is asking surgeons to carefully consider all other treatment options and to make sure that their patients are fully informed of potential complications from surgical mesh,” said William Maisel, deputy director of the agency’s Center for Devices and Radiological Health. “Mesh is a permanent implant — complete removal may not be possible and may not result in complete resolution of complications.”
The agency has called on an outside panel of experts in obstetrics and gynecology to meet in September to discuss the safety and effectiveness of surgical mesh in treating pelvic organ prolapse and stress urinary incontinence, a condition involving leakage of urine during physical activity.
In 2010, there were at least 100,000 surgeries to treat pelvic organ prolapse with surgical mesh, with about 75,000 of them involving vaginal, rather than abdominal, surgeries. The FDA said abdominal surgeries pose fewer risks, as do procedures involving stitches alone.
According to the agency, there is no evidence that surgeries involving mesh are more beneficial than nonmesh procedures.
The FDA added that complications associated with using surgical mesh have not been linked to a single brand of mesh.
Representatives for Boston Scientific Corp., a surgical mesh manufacturer, did not immediately respond to a request for comment Wednesday.
American Medical Systems Inc., another surgical mesh maker, is facing a lawsuit from a woman who claims she developed severe vaginal deformities and suffered other serious medical problems after undergoing surgery to implant the company’s Apogee mesh system.
The suit, filed in California federal court in March 2008, alleges that Ellen Ambroff required mesh revision surgery and an operation to remove the device after allegedly suffering a litany of medical problems, including rectal bleeding, chronic hip problems, bowel and bladder incontinence, nerve damage, a blood clot in her rectum, chronic fatigue and heart problems.
–Article By Bibeka Shrestha
–Editing by Chris Giganti.
07.11.2011// Merrill Lynch’s Efforts to Dismiss Pre-Need Trust Litigation Thwarted
Two recent decisions in the Southern District of Illinois have denied Merrill Lynch an easy exit from litigation relating to the mishandling of pre-need funeral funds in Illinois.
On June 21, 2011, Judge Murphy denied in its entirety a motion to dismiss made by Merrill Lynch Bank & Trust Co. FSB (“MLTC”), the one-time trustee of the Pre-Need Trust. Judge Murphy determined that the funeral home plaintiffs have standing to pursue their claims and, importantly, recognized that they properly allege they were unfairly forced into signing a Trust Agreement with MLTC that purports to relieve MLTC – not only of any liability – but of any responsibility as a trustee to pursue claims against those who harmed the Trust. To view the decision, click here.
More recently, on July 1, 2011, Judge Murphy went on to deny a motion to dismiss made by the financial advisors to the Pre-Need Trust, Ed Schainker and Merrill Lynch, Pierce, Fenner & Smith, Inc., in a related case brought by pre-need consumers. To view that decision, click here.
07.06.2011// Bard Offers $184M To Settle Hernia Patch Suits
Law360, New York (July 1, 2011) -- C.R. Bard Inc. said Thursday it had tentatively agreed to pay $184 million to settle the majority of claims in a Rhode Island multidistrict litigation over allegedly defective hernia patches.
In a U.S. Securities and Exchange Commission filing, the medical equipment manufacturer said it had reached agreements in principle with scores of plaintiffs who claim they suffered significant injuries because of faulty Composix Kugel surgical mesh patches manufactured by Bard subsidiary Davol Inc.
“It’s been a hard, long fight for four years by both sides,” Jon Conlin, a Cory Watson Crowder & DeGaris PC attorney representing plaintiffs in the MDL, said Friday. “This is a good, fair settlement for the plaintiffs that are involved.”
Bard, which faces more than 3,000 suits in state and federal courts over Kugel and other hernia repair products, did not admit liability as part of the proposed settlement, Conlin said.
The tentative settlement also does not affect a number of pending putative class actions, Bard said in the SEC filing.
Bard’s agreements with the various plaintiffs’ law firms are subject to requirements that a minimum number of their respective clients participate in the proposed settlement, the filing said.
Representatives for the company did not immediately respond to a request for comment on Friday.
The Kugel patches, used to fix abdominal hernias, contain memory recoil rings that allow them to be folded during insertion and then spring open and lay flat once in their desired location. Plaintiffs claimed that Bard failed to validate the Kugel patch’s design before placing the product on the market.
According to Conlin, the rings could break or buckle, causing abscesses, fistulas and other medical complications.
Bard had argued that such complications were known risks involved with the use of any hernia repair device and claimed in some of the cases that injuries stemmed from doctors’ errors, Conlin said.
The tentative settlement comes after a federal judge overseeing the MDL refused in February to grant Bard a chance at a new trial following a jury’s August decision to award $1.5 million to a couple in the second of four bellwether trials.
U.S. District Judge Mary Lisi ruled that the jury’s verdict in favor of Christopher and Laure Thorpe was fair considering the evidence and testimony given at trial.
The Thorpes initially filed suit in November 2008, claiming Christopher Thorpe developed an abscess and fistula as a result of a defective memory ring after the patch was used to repair his ventral hernia.
One of Bard’s main arguments had been that there was no peer-reviewed literature to support the link between the faulty hernia patch and Christopher Thorpe’s injuries, but the judge ruled that science supported the plaintiffs’ allegations, according to the plaintiffs’ attorney, Donald Migliori of Motley Rice LLC.
The verdict in the Thorpes’ case came about four months after a jury found for the defendants in the first bellwether case in the MDL. In that suit, the jury decided Bard’s patches were neither defectively designed nor inadequately labeled.
The plaintiffs are represented by Donald Migliori of Motley Rice LLC, Ernest Cory and Jon Conlin of Cory Watson Crowder & DeGaris PC, and Edward Wallace of Wexler Wallace LLP, among others.
Bard is represented by John Hooper and Michael Brown of Reed Smith LLP and Mark Nugent and Thomas Robinson of Morrison Mahoney LLP.
The MDL is In re: Kugel Mesh Hernia Patch Products Liability Litigation, case number 07-md-01842, in the U.S. District Court for the District of Rhode Island.
06.24.2011// Illinois-Based Actos Linked to Increased Risk of Bladder Cancer
Actos, also known as pioglitazone, is a Type 2 Diabetes drug that first came under Food and Drug Administration (FDA) scrutiny for being linked to higher risks of heart attack, heart failure, stroke, and other cardiovascular issues. And although the Agency issued a Black Box warning for these risks in June of 2007, the FDA has yet to recall or further limit this drug's usage in the U.S. This lack of FDA action may soon change, however, as recent studies linking Actos to risks of bladder cancer have prompted all prescriptions for the drug to be suspended in both France and Germany.
FDA action limiting or eliminating the use of the drug in the U.S. has been a possibility since September 2010 when the FDA announced that it was studying the drug’s link to bladder cancer. A response by the federal government is much more likely to happen now that a French study has linked an increased risk of bladder cancer to the drug. There, a study of 155,000 Actos patients found a 22 percent increase in bladder cancer when compared to individuals taking other diabetic drug regimens. Additionally, this French study looked at the dosage level of each patient and found that there was roughly a 50 percent increase in bladder cancer for those who took higher dosages of the drug.
Acting in response to these findings, Illinois-based Actos manufacturer Takeda is defending the drug by pointing to the results of a two-year long clinical study (published in the Journal of Diabetes Care) that seem to downplay any risk of cancer with Actos. This study’s authors conclude that: “[s]hort-term use of [Actos] was not associated with an increased incidence of bladder cancer”, but that “use for more than 2 years was weakly associated with increased risk.”
The Boston Globe, however, made the argument that this Actos-friendly article misinterprets the study’s findings. The newspaper reported that the study’s data actually showed a 40 percent increased occurrence of bladder cancer for patients who took the drug for at least 2 years. Additionally, this increased risk is not a recent revelation. According to the Los Angeles Times, Takeda knew that male rats exposed to the drug showed an increase number of bladder tumors before Actos was even marketed.
Wexler Wallace attorneys are investigating all claims against the manufacturers of Actos, which is also sold in combination with Actoplus Met, Actoplus Met XR, and Duetract. While the ultimate conclusion on the risks associated with Actos has not been made final, we believe any risk of a potentially terminal cancer should outweigh any benefit of being prescribed the drug. If you would like us to investigate your potential claim for injuries related to Actos, please click here.
06.20.2011// Wexler Wallace LLP Files Class Action Against Wal-Mart Over Gift Receipt Scam
On June 1, 2011, Wexler Wallace LLP, with co-counsel Kershaw Cutter & Ratinoff LLP and Schneider, Wallace, Cottrell, Brayton, Konecky, filed a national class action lawsuit against retailer behemoth Wal-Mart Stores over its gift receipt redemption policy.
The complaint alleges that when its stores are presented with a gift receipt, Wal-Mart fails to honor the product purchase price, and instead redeems the receipt for the later discounted or sale price. According to Wexler Wallace partner Mark J. Tamblyn, “consumers reasonably assume that providing a gift receipt with their gift will entitle the recipient to credit for the full purchase price. Unfortunately, recent investigations have shown consumers are deceived.”
Wal-Mart’s scheme relies on the fact that people generally do not ask how much their gift giver paid for their gift. And rarely does the recipient tell the person who gave them the gift that they returned it. These common behaviors combine to create a perfect scam.
The case is pending the United States District Court for the Eastern District of California (Case No 2:11-cv-01487-LKK –DAD.)
To view a copy of the complaint, please click here.
If you feel that you or someone you know has been affected by Wal-Mart’s gift receipt redemption practice, please complete our confidential online form or call 916-492-1100.
06.07.2011// FDA Launches Investigation into Yaz and Other Birth Control Drugs Containing Drosperinone
The Food and Drug Administration has issued a warning to all users of Yaz, Yasmin, Ocella, Beyaz, and Safyral: if you develop shortness of breath, leg pain and/or chest pain, you could be suffering from blood clots or other complications linked to these drugs, and you should seek immediate medical attention.
This warning is on the heels of the FDA’s announcement that it is investigating the unusually high risk of blood clots that has been associated with these drugs. Promising to communicate any new safety information that is uncovered in its investigation, the FDA also recommended that women currently taking these drugs continue to do so and that they take all questions to their prescribing physician.
Wexler Wallace represents women from across the United States that have been injured by Yaz, Yasmin, Ocella, Beyaz, and Safyral. These plaintiffs are pursuing lawsuits for injuries that include: gall bladder failure and removal, strokes, heart attacks, blood clots, DVTs, pulmonary embolisms and even death. To contact the firm about investigating your claim, please click here.
06.07.2011// AWP Litigation Heading Toward Closure
A hearing on final approval of the Track II settlement ($125 million) is scheduled to take place on June 13, 2011, followed by a fairness hearing on July 7, 2011 with respect to the Class 1 portion of the settlement with Bristol-Myers Squibb ($24 million). If the settlements are approved and become final, this ground – breaking litigation will be one step closer to completion, almost 11 years after the first cases were filed.
06.06.2011// DePuy ASR Explant Preservation Order Issued
On April 6, 2011, Judge David Katz issued an order in U.S. District Court regarding the preservation of explanted DePuy ASR hip devices. It is imperative that these devices be preserved so that they can be used as evidence in potential lawsuits. The Explant Preservation Order describes the protocol that explanting hospitals and surgeons must follow when retaining these devices in laboratories and storage facilities. Both Plaintiffs and Defendants must provide notice to opposing counsel about hip devices that were retained prior to this order. Although non-destructive inspection and analysis are allowed, Plaintiffs’ counsel and Defendants’ counsel must coordinate the testing and exchange of test results.
Prior to this Order, DePuy requested that all explanted hip devices be returned directly to them so they could conduct their own testing on the defective product. DePuy has since sent letters to hospital representatives and surgeons to inform them of their responsibilities in compliance with the new protocol. The order entered by Judge Katz ensures that DePuy does not have unilateral control over the devices, and helps maintain the integrity of evidence that will no doubt be used at trial.
Wexler Wallace LLP currently represents over 175 clients who have been harmed by defective hip implant devices. When DePuy first announced the recall, our firm recognized the importance of retaining removed hip prosthetics. We have worked closely with our clients and their providers to make sure that the removed devices have been properly preserved.
If you believe that you or a loved one may be affected by this recall, please contact us at (312) 346-2222 or complete our Online Form.
06.06.2011// Pet Food Litigation Finally Over
After a lengthy evidentiary hearing in February, Judge Noel Hillman issued an order and opinion again giving final approval to the settlement initially reached in May, 2008. Objectors had appealed that portion of Judge Hillman’s initial decision approving an allocation of $250,000 of the $24 million settlement to claimants’ food purchases. The Third Circuit Court of Appeals approved the settlements in all other respects, but remanded the matter to Judge Hillman for a further hearing on the factual basis for the $250,000 allocation. The parties submitted evidence and otherwise demonstrated full compliance with the standards governing class-action settlement approval, and Judge Hillman agreed, issuing judgment on April 11, 2011. With no appeals this time, the judgment has become final. The settlement administrator is completing its work adjusting the various claims and hopes to be issuing checks to aggrieved pet owners in the near future.
06.03.2011// Class Certification Argued in Wellbutrin XL
On April 29, 2011, Judge Mary McLaughlin heard expert testimony and arguments by counsel on Plaintiffs’ motion for class certification. Most of the battle centered on the issue of demonstrating proof of antitrust impact on a class-wide basis in light of the standards espoused by the Third Circuit in In Re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305 (2008). Judge McLaughlin requested post-hearing briefs and the parties engaged in further oral argument on May 27, 2011. The court has requested additional briefing on choice of law questions. A decision on class certification is still expected this summer.
06.03.2011// Wexler Wallace LLP Files Class Action Against Wal-Mart Over Gift Receipt Scam
On June 1, 2011, Wexler Wallace LLP, with co-counsel Kershaw Cutter & Ratinoff LLP and Schneider, Wallace, Cottrell, Brayton, Konecky, filed a national class action lawsuit against retailer behemoth Wal-Mart Stores over its gift receipt redemption policy.
The complaint alleges that when its stores are presented with a gift receipt, Wal-Mart fails to honor the product purchase price and instead redeems the receipt for the later discounted or sale price. According to Wexler Wallace partner Mark J. Tamblyn, “consumers reasonably assume that providing a gift receipt with their gift will entitle the recipient to credit for the full purchase price. Unfortunately, recent investigations have shown consumers are deceived.”
Wal-Mart’s scheme relies on the fact that people generally do not ask how much their gift giver paid for their gift. And rarely does the recipient tell the person who gave them the gift that they returned it. These common behaviors combine to create a perfect scam.
The case is pending the United States District Court for the Eastern District of California (Case No 2:11-cv-01487-LKK –DAD.) To view a copy of the complaint, please click here.
If you feel that you or someone you know has been affected by Wal-Mart’s gift receipt redemption practice, please complete our confidential online form or call 916-492-1100.
05.12.2011// Wexler Wallace Associate Drafts Successful Submission for Preliminary Landmark Status
The City of Chicago Commission on Landmarks recently voted unanimously in support of preliminarily approving the Chicago Motor Club to receive Chicago “landmark” status. The Commission based its decision, in large part, on the “Suggestion for Landmark Status” drafted by Wexler Wallace LLP associate Amy Keller, as Chair of Preservation and board member of the Chicago Art Deco Society.
Wexler Wallace recognizes the importance of civic involvement and supports efforts undertaken by its associates to achieve lasting and positive change in our communities.
Click here to see the press release.
Click here for additional news coverage.
05.03.2011// DePuy ASR Explant Preservation Order Issued
On April 6, 2011, Judge David Katz issued an order in U.S. District Court regarding the preservation of explanted DePuy ASR hip devices. It is imperative that these devices be preserved so that they can be used as evidence in potential lawsuits. The Explant Preservation Order describes the protocol that explanting hospitals and surgeons must follow when retaining these devices in laboratories and storage facilities.
Both Plaintiffs and Defendants must provide notice to opposing counsel about hip devices that were retained prior to this order. Although non-destructive inspection and analysis are allowed, Plaintiffs’ counsel and Defendants’ counsel must coordinate the testing and exchange of test results.
Prior to this Order, DePuy requested that all explanted hip devices be returned directly to them so they could conduct their own testing on the defective product. DePuy has since sent letters to hospital representatives and surgeons to inform them of their responsibilities in compliance with the new protocol.
Wexler Wallace LLP currently represents over 175 clients who have been harmed by defective hip implant devices. When DePuy first announced the recall, our firm recognized the importance of retaining removed hip prosthetics. We have worked closely with our clients and their providers to make sure that the removed devices have been properly preserved.
04.29.2011// Studies Confirm Link Use of Birth Control Pills Like Yaz and Yasmin to Increased Risk of Injury
Medical researchers from the British Medical Journal have published two more studies confirming the unusually high risks associated with "fourth generation" birth control pills like Yaz and Yasmin that contain the progestin drospirenone.
In the first study, researchers from the Boston University School of Medicine examined two groups of women: one taking Yaz or Yasmin (which both contain drospirenone) and one taking second generation birth control pills (which contain the progestin levonorgestrel). What the authors found is that women who used Yasmin and Yaz were two times as likely to suffer from deep vein thromboses or pulmonary embolisms (blood clots) when compared to users of second generation birth control pills. The authors concluded “[t]hese findings support more recent studies that suggest that drospirenone oral contraceptives are not as safe,” and even recommended that Yasmin and Yaz “should not be the first choice in oral contraception.”
The second study also performed a comparative review of second and third generation birth control users, but this one was based on the information available in the UK General Practice Research Database. Here, the authors found that women who used Yaz and Yasmin were up to three times more likely to suffer from pulmonary embolisms or deep vein thromboses than women who took second generation birth control pills. These results are not only consistent with previous research, but the study excluded individuals with major risk factors for developing blood clots were excluded from the study. Indeed, the authors not only called for more research into the side-effects of drosperinone but they also concluded that third generation birth control pills like Yaz and Yasmin should be avoided since there is no clear evidence that drugs like Yaz and Yasmin provide any benefit when compared to second generation birth control pills.
For more information about the Yazmin case, please click here.
04.29.2011// Kenneth A. Wexler Argues Class Certification in the Eastern District of Pennsylvania
Kenneth A. Wexler of Wexler Wallace LLP argued the indirect purchaser plaintiffs' motion for class certification today in In re Wellbutrin Antitrust XL, No. 08-02433, presided over by Judge McLaughlin of the Eastern District of Pennsylvania . Wexler, along with co-counsel Peter St. Phillip and Richard W. Cohen from Lowey Dannenberg Cohen & Hart, urged the Court to certify a class of end-payors in six states: California, Florida, Nevada, New York, Tennessee, and Wisconsin.
Both sides presented the Court with expert testimony in addition to extensive legal argument. The suit alleges that GlaxoSmithKline and Biovail conspired to delay generic competition for the blockbuster pharmeceutical drug, Wellbutrin XL.
For more information about the case, please click here.
04.28.2011// Wexler Wallace LLP Files Class Action Against CertainTeed Corporation
On April 25, 2011, Wexler Wallace, LLP, with co-counsel Shepherd Finkelman Miller & Shah, LLP, filed a class action against CertainTeed Corporation alleging violations of the Magnuson-Moss Act, breach of warranty, consumer fraud, and negligence on behalf of a nation-wide class and a Wisconsin subclass of consumers.
The complaint alleges that, contrary to guaranteed long-lasting protection and superior freeze/thaw durability, CertainTeed’s WeatherBoards FiberCement exterior siding products are defective and prone to water absorption problems, splitting, cracking, warping and overall failure.
The case is pending in the U.S. District Court for the Eastern District of Wisconsin.
For a copy of the complaint, please click here.
For more information, please contact us at 312-346-2222.
04.15.2011// Debbie Pritts Named Chair of the 2012 Legal Nurse Consulting Education and Networking Forum
The American Association of Legal Nurse Consultants (“AALNC”) has named Debbie Pritts RN, LNCC of Wexler Wallace as the chair of the 2012 Legal Nurse Consulting Education and Networking Forum to be held March 30 -31, 2012 in San Antonio TX. The Forum is the primary opportunity for legal nurse consultants to earn Continuing Education Hours through education sessions, to network with LNCs from across the country and to interact with vendors within the medical-legal community each year.
“Selecting Debbie as the Forum chair was the logical choice for our association” stated Sharon K. McQuown RN, MSN, LNCC, President of AALNC. “Debbie worked tirelessly as a committee member for our recently held, sold out forum and has already started working on our 2012 event.”
In her role, Debbie will be responsible for leading the conference committee in managing the content of the annual conference and working closely with the Board of Directors to ensure the success of the conference.
Headquartered in Chicago with almost 3,000 members nationwide, the AALNC is a not-for-profit organization dedicated to the professional enhancement and growth of registered nurses practicing in the specialty of legal nurse consulting, and advancing the legal nurse consulting profession.
Wexler Wallace is proud of Debbie’s selection as chair of the conference. “It is an honor to be selected as chair of the 2012 Conference” said Debbie. “A key component of the AALNC mission is to provide a forum for networking opportunities, educational advancement and professional development. I am excited to assist in this aspect and in promoting the value of legal nurse consultants succeeding in diverse roles and settings.”
Debbie is also a member of the WV Upper Ohio Valley Chapter of the AALNC and has served in all board capacities. She is currently the past president, serving two terms as president. Additionally she is a founding member of the WV Bar Association, Legal Nurse Consultant Section.
04.06.2011// Pet Food Settlement Approved, No Appeals Foreseen
On April 5, 2011, Judge Hillman entered an order and opinion, as directed by the Third Circuit Court of Appeals, making specific findings concerning the allocation of $250,000 to food purchase claims and granting final approval to the settlement. As no objections were filed with respect to the parties’ submissions on the food purchase issue, no appeals are anticipated and the judgment should become final for purposes of distributing proceeds 30 days after entry of a final judgment. The claims administrator has been directed to advise class members of their proposed distributions so that they have the opportunity to correct inaccuracies or supply missing information before checks are issued. The bottom line is that this case is finally on track to closure.
03.30.2011// Wexler Wallace LLP Appointed Co-Lead Counsel in Massive Case Against American Psychological Association
On January 31, 2011, the Honorable John D. Bates, United States District Judge for the District of Columbia, appointed Wexler Wallace LLP as interim co-lead counsel in this nationwide consumer class action filed against the American Psychological Association ("APA").
Wexler Wallace, with co-counsel, filed the case on November 4, 2010 on behalf of thousands of current and former APA members who were negligently or intentionally deceived into paying special assessment fees along with their annual dues. The fees were simply “bundled” with the APA membership dues statement, and presented as mandatory. Members were not meaningfully informed, however, that payment of the special or “practice” assessment was voluntary and was actually funneled to the lobbying arm of the APA – the APA Practice Organization. Based on these core allegations, Plaintiffs assert violations of California consumer protections laws and claims for unjust enrichment.
Wexler Wallace’s team is led by Mark J. Tamblyn. The case is known as In re APA Assessment Fee Litigation. For a copy of the Court’s Order appointing Wexler Wallace LLP as Co-Lead Counsel, click here.
03.01.2011// Edward A. Wallace Argues For A Second Time Before Florida Court Of Appeals
Edward A. Wallace of Wexler Wallace LLP argued yesterday in front of the Third District Court of Appeal of Florida in Browning v. Angelfish Swim School, et al., No. 03-13413 CA 21. Wallace and his co-counsel, Andrew T. Trailor and former Florida Supreme Court Chief Judge Gerald Kogan, represent two small Florida businesses and a class of all persons and entities who paid late or reinstatement fees to the Florida Secretary of State pursuant to Florida law. The suit alleges that the late and reinstatement fees are excessive and unconstitutional fines pursuant to Florida and Federal law.
The present appeal concerned whether or not a class was properly certified by the trial court where Plaintiffs’ counsel had agreed to fund the cost of litigation consistent with the rules regulating the Florida Bar. The State argued that, unless the Plaintiffs themselves agreed to pay all litigation costs, no class should be certified. In certifying the class, the trial court stated:
The Court also finds the Plaintiffs will thoroughly and adequately prosecute this action. As their resumes demonstrate, Plaintiffs’ counsels are qualified, experienced, and generally able to conduct the proposed litigation. The Court notes that Plaintiffs’ counsels have extensive experience in the prosecution and successful resolution of complex class actions throughout the United States. Browning v. Angelfish Swim School, et al., No. 03-13413 CA 21 (Fla. Cir. Ct. June 10, 2010).
The Secretary of State of Florida appealed that decision and argued that the Plaintiffs themselves had to show they had the financial capacity to fund the litigation. As explained in Plaintiffs’ brief, “[a]ccess to the Courts in the United States of America has never been, nor should it ever be, a function of one’s wealth. The constitutional ramifications of a ‘wealthy litigant’ requirement would be monumental and strike at the heart of our judicial system.”
Wexler Wallace was not alone in their interpretation of the law: the National Association for Consumer Advocates, Public Justice, Public Interest Law Section of the Florida Bar, Florida’s Children First, Inc., Jacksonville Area Legal Aid, Inc., and the Florida Justice Association all filed as amici curiae in support of Plaintiffs’ position.
For information with respect to this matter, please contact Edward A. Wallace at 312-346-2222, or co-counsel Andrew T. Trailor at 305-668-6090.
02.23.2011// Judge Enters Formal Order on AstraZeneca
The federal district court in Boston entered a formal order on February 22, 2011 giving final approval to the $103 million settlement between two of the classes in the AWP litigation and pharmaceutical manufacturer AstraZeneca. Judge Saris' order reaffirmed the comments she made in open Court on February 8, 2011.
Two more settlements are now left for consideration to wind up 10 years of hard-fought litigation. One of the settlements is with Bristol Meyers Squibb and the other with the Track Two defendants. To read more about the AWP litigation, in which Wexler Wallace is co-lead counsel, click here.
02.15.2011// Wexler Wallace Files Class Action Against Facebook For Violating Minors’ Privacy
On February 9, 2011, Wexler Wallace LLP, with co-counsel Squitieri & Fearon LLP, filed a class action on behalf of their client and a potential class of minor Facebook users in California whose names and/or likenesses were used by Facebook for commercial purposes without the prior consent of their parents or legal guardians, in violation of guaranteed privacy protections.
The Complaint alleges that Facebook uses minors’ names and profile pictures without the appropriate consent for its endorsement-advertisements, or “social ads,” and to generate “click” revenue, which is paid to Facebook by advertisers every time a user clicks through an ad to the advertiser’s landing page. Facebook places minors’ names and likenesses on advertisers’ Facebook pages whenever the minor clicks on a button indicating that they “Like” the advertiser’s brand, good or service or responds to the advertiser’s event. In addition, Facebook transmits the names and pictures of these underage users to their Facebook Friends’ Home page feeds announcing their endorsement of the particular advertisement. Once an underage user endorses the advertisement, the user cannot prevent their name and likeness from appearing on a Facebook page and cannot remove their name or likeness while continuing to “Like” the advertisement. The case is pending in Los Angeles Superior Court.
For more information, please contact us at 916-492-1100 or complete our online form.
02.09.2011// Wexler Wallace LLP Defeats Extended Stay’s Motion to Dismiss
On February 8, 2011, the Hon. William B. Shubb of the United States District Court for the Eastern District of the California denied the defendants’ motion to dismiss Plaintiff’s First Amended Class Action Complaint. To view a copy of the opinion, click here.
Representing a significant victory for Plaintiff and the proposed class, the Court held that the Plaintiff alleged a plausible violation of Cal. Civ. Code § 1940.1 where Extended Stay’s “Long-Term Lodging Agreement” requires its occupants to check out and re-register after a 29 day and 20 hour term to deny them status as tenants, which arises after 30 days of occupancy. Section 1940.1 prohibits a person from requiring occupants to move or check out and re-register before the expiration of 30 days occupancy for purposes of preventing those occupants from accessing tenant rights and protections.
The Court also held that Plaintiff properly plead a claim under California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq., alleged “sufficient facts from which to plausibly infer that the parties objectively intended that the [Long-Term Lodging Agreement] constitute a lease” (Order at 14), and that Extended Stay engaged in improper self-help by locking tenants out of their rooms by electronically disabling their door locks after failing to timely pay rent or re-enter into the Long-Term Lodging Agreement.
02.08.2011// Judge Grants Final Approval of AstraZeneca Settlement
Judge Patti B. Saris, on February 8, 2011, gave final approval orally to the class action settlement reached between defendant AstraZeneca and Classes II and III (including third party payors and certain consumers) in the AWP litigation where Wexler Wallace is co-lead counsel.
Final approval had been given to a settlement for Class I (consumers only). Today’s settlement created a fund of $103 million in connection with an alleged scheme by AstraZeneca to market the cancer drug Zoladex through the use of an artificially high benchmark price (AWP) for the drug.
Wexler Wallace has been pursuing the AWP litigation against multiple pharmaceutical companies for 10 years. Two settlements continue to wend their way through the approval process, one with Bristol Meyers Squibb ($24 million) and the other with a number of Track II defendants ($125 million). If all goes well, the litigation will finally be concluded in the summer of 2011.
02.08.2011// No New Trial For Bard In Hernia Patch Bellwether
Law360, New York (February 7, 2011) -- A federal judge overseeing multidistrict litigation against C.R. Bard Inc. has denied the medical equipment manufacturer's bid for a new trial, ruling that a jury was reasonable in awarding $1.5 million to a couple injured by allegedly defective hernia patches.
Judge Mary M. Lisi ruled Friday in the U.S. District Court for the District of Rhode Island that the jury’s verdict against Bard and subsidiary Davol Inc., the manufacturer of the disputed patches, was a fair one considering the evidence and testimony given at trial.
The August trial — the second of four bellwether trials in the multidistrict litigation — resulted in a $1.5 million verdict for Christopher and Laure Thorpe, who had claimed that Bard’s Composix Kugel surgical mesh patches were unreasonably designed and carried inadequate warning of risk.
Judge Lisi also shot down Davol’s motion to exclude the Thorpes’ medical expert testimony, saying the two doctors who testified had considerable expertise, experience and education; gave conclusions that were sufficiently grounded in scientific knowledge; and “were undoubtedly helpful in assisting the jury to understand or determine the facts at issue.”
In addition, the judge on Friday denied Davol’s motion for judgment as a matter of law with respect to the inadequate design claim, saying the evidence offered at the trial could lead a reasonable jury to find that the manufacturer acted unreasonably in designing the hernia patch and failed to adopt a safer alternative design.
The judge did grant Davol’s motion on the plaintiffs’ claim that the company did not adequately warn consumers about problems with the patch. Even assuming Davol knew or should have known that the patches were susceptible to failure when they were first marketed, the Thorpes did not sufficiently show this was the proximate cause of their injury, according to the ruling.
“We actually felt pretty confident, because these issues were raised during the trial, and the court similarly ruled this way,” Thorpe’s attorney Donald Migliori said. “We’re relieved that this was the outcome. It’s time to get this over with.”
The judge’s reasoning in the ruling could affect the other cases in the MDL, Migliori said. One of the defendants’ main arguments was that there was no peer-reviewed literature to support the link between the faulty hernia patch and Thorpe’s injury, he said. But the judge ruled that the science supports the plaintiffs’ allegations.
The Thorpes initially filed suit in November 2008, claiming Christopher Thorpe developed an abscess and fistula as a result of a defective memory ring after the patch was used to repair his ventral hernia.
The defect, which Bard and Davol knew about but concealed, led to significant medical expenses along with pain and suffering, the Thorpes alleged.
The verdict in the Thorpes’ case came about four months after a jury found for the defendants in the first bellwether case in the MDL. In that suit, Whitfield v. Davol Inc. et al., the jury decided Bard’s patches were neither defectively designed nor inadequately labeled.
Cranston, R.I.-based Davol manufactures products used in surgery. The Kugel patches, used to fix abdominal hernias, contain memory recoil rings that allow them to be folded during insertion and then spring open and lay flat once in their desired location.
Attorneys for both parties did not immediately respond to requests for comment Monday.
The matter was consolidated within the MDL in December 2008.
The plaintiffs are represented by Motley Rice LLC, Wexler Wallace LLP and Cory Watson Crowder & DeGaris PC.
Bard and Davol are represented by Reed Smith LLP and Morrison Mahoney LLP.
The MDL is In re: Kugel Mesh Hernia Patch Products Liability Litigation, case number 07-md-01842, in the U.S. District Court for the District of Rhode Island.
Thorpe’s case is Thorpe et al. v. Davol Inc. et al., case number 1:08-cv-00463, in the U.S. District Court for the District of Rhode Island.
–Additional reporting by Nick Brown and Jocelyn Allison. Editing by Greg Ryan.
Source: Law 360
02.07.2011// Illinois Department of Insurance Releases Funds to Illinois Funeral Directors
Edward A. Wallace of Wexler Wallace LLP and Steven J. Roeder of Williams, Montgomery & John, Ltd. are pleased to announce that the Illinois Department of Insurance (“DOI”) has finally released funds to Illinois Funeral Directors without conditions.
Funeral Directors brought a lawsuit, Dames, et al. v. Daniel W. Hynes, et al., Case No. 09 CH 21989 (Ill. Cir. Ct. Cook County), against the DOI and then Comptroller Daniel W. Hynes (“Hynes”) following the execution of a consent order between the DOI and Merrill Lynch Life Agency, which resulted in the payment by Merrill Lynch Life Agency of an 18 million dollar fine connected to an alleged scheme that depleted the Illinois Tax-Exempt Pre-Need Trust. According to the original consent order, the $18 million dollars would be distributed to Funeral Directors damaged by the scheme, but only if they executed a Discharge and Satisfaction, which included a release of any claims against Merrill Lynch Life Agency and other Merrill Lynch entities and execute a commitment letter with Hynes that guaranteed a rate of return that isn’t required in existing pre-need funeral contracts.
The Funeral Directors in Dames alleged that the DOI, through its Director Michael T. McRaith, and Hynes acted without statutory authority to enter into a consent order that affected the rights of funeral directors and the families they serve. They specifically claimed that the DOI lacked authority to administer the fine as a settlement fund and demand that the Funeral Directors release Merrill Lynch of liability in order to obtain access to the $18 million dollar fund. Significantly, civil litigation was and still is pending against Merrill Lynch seeking more than $100 million dollars in damages on behalf of the Funeral Directors. The releases would have extinguished the Funeral Directors’ claims in the litigation.
Judge Mary Ann Mason of the Circuit Court of Cook County granted summary judgment in favor of the Funeral Directors. Among other things, Judge Mason found that the DOI did not have the legal authority to enter into the consent order and require the releases. In addition, the Judge ruled that Hynes acted inappropriately, finding that there was nothing that “cloaks him with authority” to change pre-existing contracts. As a result, the DOI has released the funds to the Funeral Directors without the previous conditions.
Edward Wallace of Wexler Wallace LLP commented that, “The DOI should have known better or at least known that the law applies to its actions too.” His co-counsel, Steven J. Roeder, of Williams, Montgomery & John, Ltd., likewise stated, “It is unfortunate we had to resort to litigation, to obtain a judgment striking down restrictions that the Court ruled could not have been imposed in the first place.”
Funeral Directors around the state of Illinois continue to pursue Merrill Lynch for its alleged misconduct in regard to the Tax-Exempt Pre-Need Trust, which allows consumers to, in essence, pre-pay for their funerals. Despite shortfalls in the Trust that they attribute to Merrill Lynch, Funeral Directors continue to provide pre-need funeral services on behalf of their customers and are thankful that the funds have finally been released. As Jeff Dames, a funeral director from Joliet Illinois and one of the named plaintiffs in the case said, “Illinois Funeral Directors have been meeting all of their obligations despite the financial catastrophe that has been suffered by the Trust. I can assure you we will continue to serve our customers with dignity and compassion. In the meantime, we are very grateful to the Court for its ruling in our favor.”
Source: PR Web
01.03.2011// Judge Approves Addition of NY Claims to Wellbutrin XL Indirect Purchaser Class
In a December 22, 2010 Memorandum Opinion, Judge McLaughlin of the United States District Court for the Eastern District of Pennsylvania granted and denied in part the indirect purchaser Plaintiffs' Motion for Leave to File an Amendment to their Complaint in the In re Wellbutrin XL Antitrust Litigation.
In the motion, Wexler Wallace (as one of the Interim Co-lead counsel for the indirect purchasers), together with their co-lead counsel, asked the Court for leave to add state antitrust claims on behalf of indirect purchasers of Wellbutrin XL in New York and Illinois, claims which had previously been prohibited by statutory class action prohibitions in each state. Wellbutrin XL is a very common antidepressant, and Plaintiffs allege that defendants Biovail and GlaxoSmithKline conspired to unlawfully keep generic versions of the drug off of the market through sham patent litigation and other illegal means.
The requested amendment was based on the recent United States Supreme Court decision, Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 130 S. Ct. 1431 (2010), which addressed the applicability of state law class action restrictions in federal court. After a thorough analysis of the majority, concurring, and dissenting opinions in Shady Grove, Judge McLaughlin followed Justice Stevens’ concurring opinion, which she summarized as being the most narrow grounds announced by the Court and which instructs federal courts faced with conflicting state and federal statutes to consider whether the federal rule would displace a state law that “is so intertwined” with the right or remedy that it defines the scope of the right. (“A federal rule . . .cannot govern a particular case in which the rule would displace a state law that is procedural in the ordinary use of the term but is so intertwined with a state right or remedy that it functions to define the scope of the state-created right.”). In Shady Grove, a New York statute prohibiting class actions for cases seeking certain types of damages to be procedural and thus displaced by Rule 23.
Judge McLaughlin held that the same New York statute analyzed in Shady Grove, and which had previously been interpreted as prohibiting class antitrust claims under the Donnelly Act, was trumped by Federal Rule 23. The Court thus allowed Plaintiffs to amend their complaint to include New York among the states for which they are seeking damages on behalf of a proposed class of indirect purchasers of branded and generic Wellbutrin XL.
With respect to the request for leave to add an Illinois Antitrust Act (“IAA”) claim, Judge McLaughlin found the statutory indirect purchaser class action restrictions to be distinguishable from the provisions addressed Shady Grove. Namely, she found the Illinois restrictions to be intertwined with Illinois substantive rights and remedies because (1) the restrictions apply only to the IAA, (2) they are incorporated in the same statutory provision as the underlying right, not a separate procedural rule, and (3) the restrictions appear to reflect a policy judgment about managing the danger of duplicative recoveries. Thus because the indirect purchaser restrictions of the IAA are “intertwined” with the underlying substantive right, Judge McLaughlin held that Illinois’ restrictions on indirect purchaser actions must be applied in federal court.
12.31.2010// Wexler Wallace Representing Homeowners in Case Against Florida Power & Light
Wexler Wallace LLP and Florida attorney Andrew Trailor are representing a putative class of homeowners whose roofs were damaged after electric company Florida Power & Light offered to coat their roofs with a special paint. The Sun Sentinel reports that Florida Power & Light reimbursed contractors to paint thousands of homeowners' asphalt shingle roofs white to reflect sunlight – against the advice of the federal government and major roofing manufacturers.
For the past few years, the utility has provided the rebates as one of its programs to lower customers’ electricity use and bills. FPL customers paid roughly $180 million annually in recent years for the programs with proceeds from conservation charges on their electricity bills, and of that, millions went to coating more than 4,000 asphalt shingle roofs.
About a dozen FPL customers have complained to state regulators that their roofs started to deteriorate or leak after they were coated. Five others in South Florida filed a lawsuit against FPL and a contractor who painted their roofs. Others have complained directly to the utility or contractor, according to court records.
FPL spokeswoman Jackie Anderson said the utility is not responsible for its contractors’ work. Customers hire the contractors and the utility pays a rebate to the contractor, who then takes the rebate off the homeowners’ bill.
“FPL has been conducting a thorough investigation of these claims. However, as a matter of policy, we cannot comment further on ongoing litigation,” Anderson wrote in an email.
The state’s largest utility, like all Florida utilities, is under pressure from state regulators to encourage homeowners to conserve energy. Each year, FPL is allowed to charge customers to pay for conservation measures, one of which has been roof painting.
Yet, painting shingle roofs has never been recommended or approved by the federal Department of Energy. A spokeswoman for the department said it promotes painting metal and tile roofs to save energy, but not asphalt shingles. The Asphalt Roofing Manufacturers Association, which represents 95 percent of U.S. manufacturers of asphalt-based roofing products, warns against applying a stretchy, reflective paint called elastomeric to asphalt shingles.
“Problems reported after asphalt shingle roofs have been field coated include unsightly curling and/or cupping of the shingles, which may lead to premature failure and leaks,” the group wrote in a techinical bulletin. The paint can trap moisture and make the shingles rot, the association said.
Elastomeric paint is on FPL’s list of approved products, according to a deposition in the Hialeah homeowners’ lawsuit.
State building codes bar contractors from using elastometric on asphalt shingle roofs in Broward and Miami-Dade counties, said Andrew Trailor, an attorney representing the Hialeah homeowners.
FPL promoted the program to customers online, and some of the contractors distributed handouts about the program. It’s one of more than eight FPL programs designed to lower homeowners’ electricity use and bills.
FPL reported in court documents that its partnering contractors coated 4,711 asphalt shingle roofs, including 1,358 in Broward County, 2,354 in Miami-Dade County and 12 in Palm Beach County, from 2007 to 2009. An FPL spokeswoman said she does not know how much the utility spent to coat the roofs over the past few years.
In 2009, the utility went from paying the full cost of coating to rebating 50 cents per square foot of roof over air-conditioned rooms. Based on that figure, FPL would have spent $2.4 million on the 4,700 roofs if they were 1,000 square feet on average.
FPL paid the full cost of coating the roofs of the five Hialeah homes. The contractor was Douglass Roofing in Hollywood, which folded this year.
Guy Giberson, an attorney for Douglass Roofing, said complaints about leaks make up a small fraction of the thousands of roofs that have been painted, and there is no evidence that the paint was responsible for the roof damage.
Giberson said the building code applies to elastomeric coating “systems,” which includes other layers of material as well as paint. He said the code applies to new roofs, not existing roofs.
The five homeowners learned of FPL’s “reflective roof” program from a Douglass sales representative who came to their homes. Their roofs were coated in 2007 and started leaking within eight months, Trailor said. All but one of the roofs were replaced after Hurricane Wilma in October 2005, making them a few years old when painted.
Argentino Serrano said the roof paint trapped water in the shingles, causing the nails to rust and water to seep in. Brown and yellow water marks stretch across the ceiling in his family room, with ridges of peeling popcorn paint over cracked drywall. Coffee-colored blotches stain the ceiling in another room.
Serrano, a retired airline mechanic, was surprised by the leaks because his roof was about 2 years old when the shingles were painted. The roof was supposed to last at least 20 years.
A can of tar sits in his backyard, ready in case he needs to make quick fixes after a storm. “All the time people say, ‘Your house is beautiful.’ One day it started leaking. and it’s [ruined]. You feel so bad,” Serrano said.
The contractor who installed Serrano’s roof helped fix parts of it the first few times it leaked. ” ‘The problem is the paint. It’s not my fault,’ ” Serrano recalled the contractor saying.
One of his neighbors, Maria Elena Rivera, has a 5-foot crater in her ceiling where the plaster fell after a leak. Another neighbor, Rosa Perez, has a 2-foot hole by the entrance of her home where the insulation became wet and fell through the ceiling. She has yellow water marks in her kitchen, foyer, bedroom closet and bathroom.
Perez, a retired clothing factory worker who lives with her mother, said when it rains she has to move furniture to keep it from getting wet. “I can’t do anything” about it, she said. “It’s very difficult.”
One of the five homeowners is no longer fully involved in the suit because of an illness, and another has replaced his roof.
Michael Douglass, of Douglass Roofing, said in a deposition in September that FPL knew early on that his company was coating shingle roofs with elastomeric paint because his company said so on forms submitted to the company for the rebates. He said he also sent the utility photos of the completed roofs early on and weekly logs of complaints from some homeowners with shingle roofs who said their roofs started leaking after the job. FPL also has a program to inspect some of the roofs after they’re done.
About a dozen homeowners, mostly in Volusia County, complained to the state’s Public Service Commission about roof damage they say was caused by the reflective paint from the FPL program. Regulators called the complaints “a civil matter.”
“The PSC has no jurisdiction and no position,” the agency said in a statement.
Source: Sun Sentinel
12.22.2010// Investor Demands $3M lost in May 6 Crash
A Cayman Island-based investment firm demands $3.1 million from three Chicago-based derivatives trading firms for money lost during the May 6 "flash crash" that set markets reeling and triggered widespread emergency buying and selling of shares at erroneous prices.
GovPlus Master Fund demands $3.1 million from Citadel Investment Group, Wolverine Trading and Chicago Trading Co. The Chicago Board Options Exchange refused to rescind the trades made during the computer disaster, so the fund seeks restitution for unjust enrichment, in Cook County Court.
GovPlus claims that when the brief crash hit, its fund managers “recognized that [the shock] was extreme and were compelled to adhere to their risk-management policies and buy or sell into the crash to manage risk in their portfolios.”
Later, in acknowledgment that these and similar trades were made based on erroneous information, the U.S. Securities and Exchange Commission and several major U.S. Stock Exchanges decided to “break” or rescind trades that took place during the crisis, if the price of the securities moved more than 60 percent from the last trade before the fiasco began.
In total, U.S. exchanges broke approximately 20,761 trades in connection with 326 different equities and equity derivatives, the complaint states.
But the Chicago Board of Exchange refused to apply the “60 percent rule” and broke only 138 trades, GovPlus says, allowing the three defendants to profit unjustly at its expense.
During the flash crash, the S&P 500 suddenly and inexplicably fell 49 points, lost nearly $1 trillion in market capitalization in just 7 minutes, and then, almost immediately, and for equally mysterious reasons, regained 49 points in the next seven minutes. The Dow Jones, already down 300 for the day, suddenly lost more than 600 points, then recovered.
Investigators concluded that the financial roller coaster was set off a single large trade in a mutual fund – about $4.1 billion – which set off panic selling, and combined with electronic, high-frequency trading, the markets nosedived.
Investigators identified numerous examples of erroneously reported price declines, including Procter & Gamble, which the New York Stock Exchange reported dropping by 26.1 percent, from $61.65 per share to $39.37 per share during the crash; and 3M, which declined about 18.45 percent, dropping from $83.30 per share to $67.98 per share.
“During the flash crash, investors had no explanation for the cause of the crash and, therefore, no reasonable basis upon which to conclude that it was all some form of liquidity crisis caused by a computer glitch,” the complaint states. “If armed with such data, they could have watched from the sidelines as the US equities market crashed and recovered, Instead, however, many investors watched in horror and were compelled by their risk-management policies to manage risk in their portfolios by hedging into the crash.”
The complaint states that during the crisis, “U.S. equities markets failed investors”.
“They gave the appearance that an historic fire was burning somewhere in the world causing the intrinsic value of U.S. bellwether equities to plummet,” it adds. “In reality, there was no fire anywhere, only a false alarm propagated without contemporaneous explanation across markets in minutes.”
The plaintiff funds say they tried but failed to negotiate a settlement before turning to the court.
They are represented by Edward Wallace and Chad Bell with Wexler Wallace in Chicago, Roger Mandel and Blake Beckham with Beckham & Mandel in Dallas, and John Cracken, also of Dallas.
Source: Court House News
12.22.2010// Appeals Court Upholds Most of Pet Food Settlement
A federal appeals court has upheld all but one of the terms in the $24 million class action lawsuit settlement over melamine-contaminated pet food.
The term at issue involves a $250,000 cap for product reimbursements claims. The four individuals who filed the appeal argued that the figure is “inadequate.” The settling parties argued that the money was primarily for pet owners who had bought the recalled pet food back in 2007 but couldn’t return the product because they didn’t have a sales receipt.
The U.S. Court of Appeals for the Third Circuit, in a judgment issued Dec. 16, 2010, found that the lower court lacked the information necessary to evaluate the value and allocation of the purchase claims. The appellate court has ordered the case back to the U.S. District Court in New Jersey for the settling parties to provide more information related to the $250,000 cap on reimbursements.
Lisa Rodriquez, one of the attorneys representing the class of pet owners, said the appellate court ruling is not a major setback.
“It basically says for us to expand the record with some of the information that we had when we were before the Third Circuit that we didn’t have when we were before the district court,” she said.
All in all, Kenneth Wexler, another attorney representing the class, said the appellate court had issued a positive decision.
“The fairness, reasonability and adequateness of the settlement in its totality, in our view, was affirmed by the court,” he said.
“My only regret is that it didn’t come sooner, because so many people have suffered delay in getting compensation,” he added.
More than 24,000 claims were submitted by the Nov. 24, 2008, deadline, according to the appellate court decision, but the appeals case has delayed the disbursement of compensation. The case may finally come to an end once it returns to district court in New Jersey, but no court date has been set at this point.
“There’s not a lot that has to be done in the way of briefing, so we’re hopeful that we’ll get a date early in the New Year so that we can finally put this thing to bed,” Rodriquez said.
The case began in March 2007 when Menu Foods, of Ontario, Canada, recalled more than 50 brands of dog food and more than 40 brands of cat food after a number of pets became sick. Several other companies soon followed suit. The recall eventually covered approximately 180 brands of pet food and treats produced by 12 different manufacturers and distributed, marketed and sold to dozens of retailers.
Wheat gluten and rice protein concentrate imported from China was found to have been contaminated with melamine, an industrial chemical used to make plastic, and cyanuric acid—the combination of which can lead to acute renal failure in small animals.
In 2008, U.S. and Canadian courts approved the $24 million settlement to cover claims and legal costs in both countries.
Attorneys representing the individuals who appealed the settlement could not be immediately reached for comment.
Source: Pet Product News
12.16.2010// Third Circuit Issues Decision in Pet Food Litigation, End Appears in Sight
This morning, the United States Court of Appeals for the Third Circuit issued an opinion affirming in virtually respects the settlement Wexler Wallace achieved with its co-counsel on behalf of pet owners in the United States and Canada whose pets were injured or died as a result of the manufacture and sale of contaminated pet food. The case, which has been pending since March, 2007, settled for $24 Million in a little over a year. The appeals process, initiated by four out of some 24,000 class members, has held up distribution of the settlement funds to injured pet owners.
The decision of the Third Circuit affirmed the lower court’s approval of the settlement, but sent the case back to the district with instructions to make factual findings related to a particular $250,000 set aside to compensate victims for food purchases. “This is a significant development for the class,” according to Ken Wexler, co-lead counsel for the class. “We still have some work to do, but we are confident we can do what is required. The end finally appears in sight and, hopefully, the people we represent will receive their money soon.”
12.09.2010// Nationwide Class Action Filed Against American Psychological Association Over Special Fees
Wexler Wallace LLP files nationwide class action on behalf of APA members who paid non-mandatory “special” or “practice” assessment fees.
Sacramento, CA (PRWEB) December 8, 2010
The law firm of Wexler Wallace LLP, with co-counsel, recently filed a class action lawsuit against the American Psychological Association and the American Psychological Association Practice Organization (collectively, “APA”), alleging that the APA deceptively billed its members by the millions during the last decade. The lawsuit challenges the APA’s collection of “special” or “practice” assessment fees that were presented, according to the suit, as a mandatory part of APA annual dues. The fee billed to members is generally more than half of the annual dues. According to the suit, the APA has collected reportedly between $4.5 to 5 million per year over the last ten years. The case, entitled Engum v. American Psychological Association, Inc., et al., Case No. 10-cv-01898 is pending in the United States District Court for the District of Columbia.
The complaint alleges that most APA members believed that the special fee was a mandatory part of their annual dues, by the manner it appeared on a pre-printed annual membership dues statement. It further alleges that the APA had typically referred to the fee as mandatory and had explicitly described it on the APA website as a fee that licensed or certified members “must” pay. The lawsuit seeks to recover tens of millions of dollars on behalf of all APA members nationwide who paid a special or practice assessment fees as part of their annual dues.
According to Wexler Wallace LLP partner, Mark J. Tamblyn, “these fees were never required for American Psychological Association membership. But for nearly a decade the APA received tens of millions of dollars it would not have otherwise collected.” Mr. Tamblyn also observed as significant the lawsuit’s contention that the “APA Board has now admitted to the deceptive nature of the fee,” quoting an APA newsletter stating “the manner in which the APA, APAPO, and Division dues have been combined on past dues statements does not make clear that the mandatory practice assessment payment is required for APAPO membership but not for APA membership” and that the “2011 dues statement instructions will be modified to clarify this point.” Division 44 Newsletter, Society for the Psychological Study of Lesbian, Gay, Bisexual, and Transgender Issues, A Division of the American Psychological Association, volume 26, Number 2 (Summer 2010).
Wexler Wallace LLP (http://www.wexlerwallace.com) is a national leader in prosecuting class actions and other complex litigation on behalf of individual and business clients in state and federal courts throughout the United States. The firm is based in Chicago, Illinois, and maintains its west coast office in Sacramento, California. Contact: Mark J. Tamblyn (916) 492-1106.
Source: Yahoo News
11.04.2010// Wexler Wallace Files APA Assessment Fee Litigation
Wexler Wallace has filed a complaint in the United States District Court for the District of Columbia on behalf of current and former members of the American Psychological Association. The complaint alleges that the class was deceived into paying additional assessment fees which were improperly diverted to the political arm of the Association.
11.01.2010// Wexler Wallace Files Securities Fraud Lawsuit
Wexler Wallace has announced the filing of a securities fraud lawsuit alleging that DeVry, a global provider of educational services for profit, issued a series of materially false and misleading statements regarding the company’s business and financial results, artificially inflating the price of DeVry common stock during the period between October 25, 2007 and August 13, 2010. The complaint, which was filed with co-counsel, is pending in the United States District Court for the Northern District of Illinois.
10.26.2010// Extended Stay Hotels Sued for Avoiding California Landlord-Tenant Laws
Wexler Wallace announced today that it has filed a complaint alleging that Extended Stay Hotels attempts to avoid the landlord-tenant laws of California by requiring long-term residents to sign “new” leases 29 days and 20 hours into their tenancy. By doing this, Extended Stay Hotels prevents its long-term residents from obtaining the rights of tenants which California affords after a 30 day tenancy. The case is pending in the United States District Court for the Eastern District of California.
10.04.2010// District Court Lifts Stay on Funeral Director Litigation
Wexler Wallace is pleased to announce that the Honorable G. Patrick Murphy lifted the stay of class action litigation in which Illinois funeral directors are seeking to recover losses incurred due to a fraudulent scheme perpetrated by various Merrill Lynch entities involving monies deposited in the Illinois preneed trust. That scheme has damaged the trust by more than $150 million, causing funeral directors to pay for any shortfalls experienced by the failure of the trust to fully pay the costs of pre-purchased funeral merchandise and services.
06.10.2010// Class Certified in Angelfish Litigation
Wexler Wallace has announced that the 11th Judicial Circuit Court sitting in Miami-Dade Florida has again certified the class in Angelfish Swim School, Inc. v. Glenda Hood, Secretary of State of the State of Florida. In this case, the plaintiffs seek a declaration that two sections of Florida’s Business Corporations Act are unconstitutional because they impose excessive penalties on corporations which filed their annual reports late. Edward A. Wallace argued the motion for class certification.
02.24.2010// Wexler Wallace Announces Partial Summary Judgment Against Illinois Department of Insurance
Judge Mary Ann Mason of the Circuit Court of Cook County, Illinois, has entered partial summary judgment against the Illinois Department of Insurance, finding that it was without authority to enter into a settlement agreement with Merrill Lynch that required funeral directors to release their rights in order to participate in an $18 million settlement fund. The court also found that the Illinois Comptroller’s Office was without authority to require the funeral directors to treat non-guaranteed pre-need funeral contracts as if they were guaranteed. According to Edward A. Wallace, one of the funeral directors’ co-lead counsel, “This is a very significant result. The money should be distributed to the funeral directors without any preconditions.”
01.18.2010// Wexler Wallace LLP Obtains Class Certification Against Direct Shopping Network
Wexler Wallace LLP is pleased to announce that it has obtained class certification against the national jewelry retailer Direct Shopping Network ("DSN"), in a consumer fraud action challenging DSN's sale of andesine gemstones to consumers that have been artificially treated.
On December 18, 2009, the Honorable Carl J. West of the Los Angeles Superior Court entered an order certifying the following class:
All persons and entities in the State of California who purchased Gemstones from Defendant from November 1, 2004 to the present.
Wexler Wallace filed the action on November 11, 2008, based on DSN’s aggressive marketing and sale of its gemstones as natural and rare collectibles when, in fact, they were nothing more than common stones artificially treated to possess its advertised coloring.
To obtain a copy of the class certification order, click here.
We expect notice to the class to be issued shortly. Please check this website for future updates on this case.
08.03.2009// District Court Gives Final Approval to $350 Million RICO Settlement with McKesson Corporation
WW announces that Judge Patti B. Saris of the United States District Court for the District of Massachusetts has granted final approval of a $350 million settlement with McKesson Corporation, one of the "Big 3" pharmaceutical wholesalers and a Fortune 20 company. WW is co-lead counsel in the action.
In approving the settlement, the Court rejected the objections filed to the settlement outright and noted the “near-unanimous, eye-popping” support for the settlement. The Court found that the allocation, which gave $288,675,000 to third-party payors, $20,900,000 to co-pay consumers and $40,425,000 to cash payors, was reasonable. She likewise found that the notice plan devised by Plaintiffs was “innovative, expansive and reasonable.”
The Court also awarded Class Counsel $70 million in attorneys’ fees, or 20% of the $350 fund created by the settlement. It found that “Plaintiffs’ counsel have been excellent in this complex, hard-fought litigation and innovative in its notice program and efforts to find class members.”
The lawsuit alleged that, beginning in August 2001, McKesson conspired with First DataBank Corporation (“FDB”) to increase the spread between Average Wholesale Price (“AWP”) and Wholesale Acquisition Cost (“WAC”) for over 400 brand name drugs, including blockbuster drugs like Lipitor.
For a copy of the order granting final approval, please click here.
03.17.2009// District Court Grants Final Approval of Plaintiffs’ Settlements with First DataBank and Medi-Span – Rollback of Over 1,400 NDCs To Go Into Effect 180 Days After Final Judgment
Today Judge Patti B. Saris of the United States District Court for the District of Massachusetts granted final approval to Plaintiffs' settlement with defendant pharmaceutical pricing databases First DataBank ("FDB") and Medi-Span. The settlements collectively provide for Defendants to (1) rollback the WAC-to-AWP spreads for 1,442 NDCs from 25% to 20% and (2) pay $2.7 million into a settlement fund for the benefit of the Classes.
The rollbacks will mean that insurance companies and other third-party payors will pay less for the drugs that are rolled back. The $2.7 million will be added to the $350 million settlement fund created by virtue of Plaintiffs’ settlement with co-defendant McKesson Corporation (“McKesson”). For information about the McKesson settlement, click here. WW is co-lead counsel in the cases against FDB, Medi-Span and McKesson.
In approving the settlements, the Court found that “[t]he quality of counsel on both sides and their conduct during the initial phases of litigation have been top-notch.” It noted that the documentary evidence in the case “strongly supports a finding of liability with respect to both defendants.” However, noting the Defendants’ weak financial conditions and lack of availability of insurance coverage, the Court explained that “you can’t get blood from a stone.” The Court therefore approved of the largely injunctive relief settlements, which the Court held would “have the added advantage of righting a wrong and providing greater transparency in drug pricing, a notoriously opaque business.”
Finally, the Court rejected the two objections filed by class members as well as the objections filed by “[a] veritable alphabet soup of non-class members,” namely pharmacies and PBMs. The Court held that, even if Defendants planned to roll back more than the 1,442 NDCs provided for in the Settlements of their own accord, “[n]ot only do FDB and Medi-Span have the right to make these changes, but in my view, after eight years of this MDL, rolling back AWPs or phasing them out as a pricing benchmark is in the public interest and to the benefit of the class.” It further held that, though many pharmacy groups claimed that their members would be injured by the settlements these pharmacies “were unjustly enriched when drug prices were fraudulently inflated during the scheme, yet they have not been asked to disgorge their profits.” Further, the Court said it would mitigate the effects of any claimed harm by delaying the implementation of the settlements until 180 days after the entry of final judgment. The Court has asked the parties to file a proposed judgment within one week.
For a copy of the Court’s order, please click here.
02.05.2009// WW Files Case on Behalf of Funeral Directors Against Illinois Funeral Directors Association
On January 29, 2009, WW filed a derivative complaint in Cook County (Case No. 09 CH 03624) on behalf of six funeral directors, alleging that a trust fund run by the Illinois Funeral Directors Association ("IFDA") has been mismanaged and improperly invested, resulting in a huge deficit. The lawsuit is brought derivatively on behalf of the IFDA, and names as defendants several current and former IFDA presidents, executive directors, Officers, board members, and officers, along with the IFDA's financial advisor Merrill Lynch and its agent.
The trust fund is paid into by Illinois residents who chose to enter into a “Preneed Contract” with the funeral home of their choice. These contracts are a common practice in the industry, and enable people to plan and pay for their funerals in advance of their death, thus eliminating many of the difficult decisions and financial burdens facing family and friends when a loved one passes away.
A vast majority of funeral directors in Illinois are members of the IFDA, and many of them use the IFDA’s Tax-Exempt Pre-Need Trust (“the trust” or “Preneed Trust”), which allows consumers to invest their money and have it grow on a tax-free basis. This option was and remains the preferred choice for approximately 75% of preneed funeral planning customers.
Funeral directors who had invested their clients’ money into this trust were told repeatedly by IFDA Services (the branch of the IFDA that manages the trust) that the funds invested in the Preneed Trust were invested in safe and tax-exempt investment vehicles such as municipal bonds. However, instead of investing money to preserve principal and provide a safe return, IFDA Services invested over $190 million, constituting a substantial majority of the total Preneed Trust funds, recommended and sold to the trust by Merrill Lynch, in complex life insurance products issued by at least seven insurance companies.
These insurance polices do not comport with the IFDA Services’ promises of using safe, high-grade, and tax-exempt investment vehicles. Among other problems, some of these policies are modified endowment contracts (“MECs”), which are not liquid investments because of the substantial adverse tax consequences incurred if a MEC policy’s proceeds are borrowed or withdrawn prematurely. Moreover, there is no connection between the expected life spans of the insureds and the need for funds with which to pay the funeral expenses of preneed funeral planning customers.
Not only were the investment practices contrary to what had been promised, but IFDA Services engaged in a pattern and practice of deceit which involved periodically sending IFDA Members statements reflecting the prospective rates of return for taxable and tax-exempt Preneed Trust funds for an anticipated period of time. The interest rates reflected in these statements, however, were systematically inflated and had absolutely no relationship to the actual Preneed Trust earnings or performance. Consequently, participants in the Preneed Trust program were led to believe, falsely, that the Preneed Trust was performing well and as expected, when it was not.
Eventually, as the true financial condition of the Tax-Exempt Preneed Trust came to light, an investigation believed to have begun with the Illinois Office of the Comptroller in 2006 revealed that, as of May 31, 2005, the tax exempt portion of the Preneed Trust had a deficit in excess of $38.0 million. The situation has only become worse since then, with the current deficit being approximately $ 59.0 million. Additionally, after a review of IFDA Services’ trustee license was revoked by the state comptroller’s office, who said that the license never should have been issued in the first place. A state audit further found that the IFDA had take $8.5 million in excessive management fees over a five-year period.
Because of the deficit, funerals directors are now paying funeral costs out of their own pockets for pre-need customers, because there is not enough money in the trust. Ed Wallace, who was quoted in the Chicago Tribune, sums it up by saying “Funeral directors are still honoring the contracts at a significant loss to them because they want to do right by these customers.”
For a copy of the complaint, please click here.
To view news articles about the case and current situation, please see below: