From the category archives:

Consumer Law

Here are some brief points to keep in mind if you’re ever faced with litigating a Fair Labor Standards Act case and you think it might be appropriate to bring it as a class action.

  1. Technically, there is no class action mechanism in a Fair Labor Standards Act (“FLSA”) case. Per the FLSA, class actions are called “collective actions.”
  2. In a FLSA collective action, class members have to opt in. In Rule 23 class actions, generally speaking, absent class members are automatically in the class, but may opt out.
  3. The filing of a class action complaint tolls the statute of limitations for absent class members. The filing of a FLSA collective action does not toll the statute of limitations for other class members. Their statutes of limitations continue to run until they formally consent to be included in the collective action.
  4. In Rule 23 class actions, the court engages in a comprehensive review of the rule to ensure that the prerequisites are met. In FLSA collective actions, the threshold inquiry is rather cursory.

The full text of the FLSA’s Section 216(b) can be found here and Rule 23 of the Federal Rules of Civil Procedure is located here.

Herrington Law, PA is a consumer/personal injury litigation firm located in Jackson, Mississippi.

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Recently, Herrington Law settled a Fair Labor Standards Act case against Mt. Fuji, Inc. d/b/a Stix Restaurant. The case involved allegations of forcing servers to (1) work off the clock and (2) engage in an unlawful tip pool. The case was settled on an individual basis.

The settlement terms are confidential.

If you think you have a wage and hour or Fair Labor Standards Act case, please give me a call at 601.376.9331. Or, fill out the form below for a free review of your case within 24 hours.

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Everyone is familiar with the term “lemon law.” However, not every car purchase is covered by Mississippi’s lemon law statute.

This article will help you tell whether you have a lemon law case or not. This article is not meant to guide you through a lemon law case. That’s what the lawyers and court system are for. This article is designed to simply lay out the general requirements for a lemon law case.

Mississippi’s lemon law statute is entitled the Motor Vehicle Warranty Enforcement Act. A complete copy of the statute can be found by clicking here.

The first thing to keep in mind is that Mississippi’s lemon law is not limited to new vehicles. The statute is about warranties, not whether a car is new or not. So, if your car is used, but there’s a warranty remaining on it, you may have a case.

Thus, first answer the question, Does my car have a warranty remaining on it?

If the answer is “yes,” you can proceed with reviewing the statute.

  • The defect or malfunction in your vehicle must affect the (1) use (2) market value or (3) safety of your vehicle. The defect in your vehicle must fall into one of these three categories.
  • The defect cannot be the result of something you did.
  • The dealership gets a chance to fix the defect.
  • But the statute kicks in once a dealership has had the vehicle in its possession for (a) 15 or more business days (doesn’t matter whether these days were in a row; can be 15 or more days total) or (b) you’ve taken the vehicle to the dealership 3 or more times to fix the same problem.
  • Generally, a lemon law case needs to be brought within the earliest of (a) 1 year following the expiration of the warranty or (b) 18 months from delivery of the vehicle to you.
  • The statute provides for an informal mediation process that you should use to work things out with the dealership. If the mediation isn’t successful, you should hire a lawyer to take the case if you’ve not already consulted one.
  • Attorney’s fees and costs are provided by the statute should you win your case.

I hope this helps you understand Mississippi’s lemon law statute a little better. I welcome feedback via comments.

**This article is informative in nature and not meant as legal advice for your particular situation.**

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R. Allen Stanford’s businesses have been shut down by the Securities and Exchange Commission pending an investigation of charges that they engaged in fraudulent investment practices such as:

  • lying about historical data related to their investment products and
  • promising unrealistic rates of return.

Stanford Financial has offices in Texas and Mississippi, namely Jackson, Columbus, and Tupelo.

The Mississippi Secretary of State has subpoenaed Stanford’s records in what could be a $9 billion fraud.

If you have investments with any of the Stanford Financial businesses, please contact us to protect your legal rights. Our number is 601.376.9331. Or, you can fill out the short submission form below, and we’ll get back to you immediately.

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In a 9-0 opinion, which can be found here, the Mississippi Supreme Court upheld a trial court’s denial of a motion to compel arbitration.

In Trinity Mission Health and Rehab, LLC v. Ruth Lawrence, Mrs. Lawrence sued Trinity over the death of her husband. Trinity moved to compel arbitration claiming that Mr. Lawrence had signed an arbitration agreement. Further, Trinity argued that Mrs. Lawrence had signed the arbitration agreement and had authority to bind Mr. Lawrence.

The Court rejected both arguments and found that Mrs. Lawrence’s claims can proceed to a trial on the merits in circuit court, not arbitration. The opinion is good news for those of us fighting against the continual erosion of our jury system and the emergence of arbitration.

Good job to the lawyers representing Mrs. Lawrence and who briefed the case to the Court — Trae Sims and Ben White.

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On January 20, 2009, Heartland Payment Systems, which provides payment and payroll solutions to some 250,000 businesses nationwide, announced a security breach in which private consumer information was potentially stolen. The Better Business Bureau states that Heartland processes more than 100,000,000 transactions a month.

The story is developing and Herrington Law, PA is staying current on those developments.

If you have reason to believe that your private debit/credit card and/or bank account information has been affected, please give us a call at 601.949.9456 or please fill out the short form below.

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UPDATED: January 28, 2009: CNN cites the FDA in reporting that the Peanut Corporation of America knew in 2007 and 2008 that it had a problem with salmonella at its Blakely, Georgia plant. If you have questions about the peanut butter salmonella outbreak, please give us a call at 601.949.9456 or submit a case review form here.

January 23, 2009: The information below is quoted directly from the Federal Food & Drug Administration’s website.

A combination of epidemiological analysis and laboratory testing by state officials in Minnesota and Connecticut, the Food and Drug Administration (FDA), and the Centers for Disease Control and Prevention (CDC) have enabled FDA to confirm that the sources of the outbreak of illnesses caused by Salmonella Typhimurium are peanut butter and peanut paste produced by the Peanut Corporation of America (PCA) at its Blakely, Georgia processing plant.

Peanut butter is sold by PCA in bulk containers ranging in size from five (5) to 1,700 pounds. The peanut paste is sold in sizes ranging from 35-pound containers to product sold by the tanker container. Neither of these products is sold directly to consumers.

However, through its investigation, FDA has determined that PCA distributed potentially contaminated product to more than 70 consignee firms, for use as an ingredient in hundreds of different products, such as cookies, crackers, cereal, candy and ice cream. FDA’s report on its inspection of the PCA facility is available at this link: http://www.fda.gov/ora/frequent/default.htm. Companies all over the country that received product from PCA have issued voluntary recalls of their products. FDA has created a searchable database for these products, which can be found at http://www.accessdata.fda.gov/scripts/peanutbutterrecall/index.cfm, Identification of products subject to recall is continuing and this list is updated frequently.

Product recalls now include some pet food products that contain peanut paste that was made by PCA. While the risk of animals contracting salmonellosis is minimal, there is risk to humans from handling these products. It is important for people to wash their hands–and make sure children wash their hands–before and, especially, after feeding treats to pets. Further information for consumers is located in the Frequently Asked Questions section located on this web site. The pet food products are also included in the searchable data base of recalled products.

Major national brands of jarred peanut butter found in grocery stores are not affected by the PCA recall.

FDA and CDC recommendations for consumers include:

* Do not eat products that have been recalled and throw them away in a manner that prevents others from eating them.
* To determine if commercially-prepared or manufactured peanut butter/peanut paste-containing products (such as cookies, crackers, cereal, candy and ice cream) are subject to recall, consumers are urged first to visit FDA’s website and check the searchable database of recalled products.
* For information on products containing peanut butter from companies not reporting recalls, consumers may wish to consult the company’s website or call the toll-free number listed on most packaging. Information consumers may receive from the companies has not been verified by the FDA.
* If consumers cannot determine if their peanut butter, peanut butter/peanut paste-containing products or institutionally-served peanut butter contains PCA peanut butter/peanut paste, FDA recommends that they do not consume those products.
* Persons who think they may have become ill from eating peanut butter are advised to consult their health care providers.

For Retailers

* Stop selling recalled products.

For Directors of Institutions and Food Service Establishments

* Ensure that they are not serving recalled products.

For Manufacturers

* Inform consumers about whether their products could contain peanut butter or peanut paste from Peanut Corporation of America (PCA). If a manufacturer knows their products do not contain peanut butter or peanut paste from PCA, they should inform consumers of that. For specific guidance: Guidance for Industry: Product Recalls, Including Removals and Corrections

The FDA will closely monitor these events by continuing to work with the firms on the details of their actions, conducting follow-up audits and inspections, monitoring the progress of the firms’ actions, working with state and local regulatory authorities, and notifying our foreign regulatory counterparts of products that have now been confirmed as having been distributed internationally.

Ongoing Investigation

FDA has collaborated with the Centers for Disease Control and Prevention (CDC) and public health officials in various states to investigate the multi-state outbreak of human infections due to Salmonella Typhimurium. An epidemiological investigation by the Minnesota Department of Health isolated and tested subsamples from an open five-pound container of King Nut peanut butter obtained at a nursing home where three patients were sickened by the outbreak strain of Salmonella Typhimurium. The Minnesota Health officials found the peanut butter contained the same strain of Salmonella Typhimurium associated with the illnesses linked to the outbreak.

Because it is always possible that the open container was contaminated by someone or something else in the environment, the FDA and the states began testing unopened containers of the same brand of peanut butter. King Nut distributes peanut butter manufactured by the PCA to institutional facilities, food service industries, and private label food companies in several states.

On January 19, 2009, testing by the Connecticut Department of Health of an unopened container of King Nut peanut butter showed that it too contained the same strain of Salmonella Typhimurium associated with illnesses linked to the outbreak. The fact that the Salmonella Typhimurium was confirmed in an unopened container of peanut butter indicates that peanut butter originating from the processing plant was contaminated.

FDA has initiated inspections at the direct consignees of PCA and King Nut and continues to follow the distribution points for products.

The FDA has no evidence to suggest that the Salmonella Typhimurium contamination originated with any other major manufacturing facility other than PCA. The PCA facility in Blakely, Georgia is not operating at this time and the company has recalled peanut butter and peanut paste produced from July 1, 2008 to the present.

The FDA and food manufacturers are working to identify products that may be affected, and to track the ingredient supply chain of those products to facilitate their removal from the marketplace.

For the latest information on the outbreak and the epidemiological investigation, including number of illnesses and a list of states reporting illnesses, go to the CDC web page at http://www.cdc.gov/salmonella/typhimurium/.

Source

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Score another one for consumers. In Missouri, the state “Court of Appeals in St. Louis found that part of a mandatory arbitration clause in QC Financial Services Inc.’s loan contracts was both ‘procedurally’ and ’substantively’ unconscionable.”

QC Financial Service’s Inc. operates as Quick Cash, a payday lender, in Missouri. The court correctly noted that class action bans in cases involving what amounts to small claims serve to “immunize a defendant” and “paralyze consumers,” which is unconscionable.

The full story can be found here.

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In a welcomed move, the 2nd Circuit Court of Appeals has ruled that a party (American Express) that did not sign an arbitration agreement can not compel consumers to arbitrate their claims against that party.

Hopefully, this will help end the trend of sending consumer claims into arbitration when those claims do not arise from any contractual relationship between the parties. An article detailing the ruling is reprinted below.

2nd Circuit: Plaintiffs in Credit Card Antitrust Case Cannot Be Compelled to Arbitrate

Mark Hamblett
New York Law Journal
November 11, 2008
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Plaintiffs who claim a conspiracy by American Express to cover up an antitrust plot with other major credit card companies on foreign currency transactions won a victory as a federal appeals court said they cannot be compelled to arbitrate.

The 2nd U.S. Circuit Court of Appeals ruled the plaintiffs could not be forced into arbitration because American Express was not a signatory to the MasterCard, Visa and Diners Club credit card agreements that included the arbitration clauses.

The court’s decision came in Ross v. American Express Co., 06-4598-cv, a related case to the multidistrict class action litigation, In Re Currency Conversion Fee Antitrust Litigation, 01-md-01409, now pending before Southern District of New York Judge William Pauley.

In the multidistrict currency conversion case, cardholders are claiming that card companies and major issuing banks have engaged in a Sherman Act conspiracy to fix higher fees for transactions involving foreign currency.

In Ross, the plaintiffs are the same cardholders in the multidistrict litigation, but they are not American Express (Amex) cardholders. The Ross plaintiffs charged in their complaint that American Express plotted with the other major card companies “to fix, maintain, and conceal the artificially inflated” foreign currency fees at issue in the multidistrict litigation. They alleged that American Express was part of the “collusive arrangement between and among the MDL defendants” — in part by holding a series of meetings on including compulsory arbitration agreements “in an effort to impede consumer litigation.”

In the Ross case, Pauley held in 2005 that the plaintiffs could be compelled to arbitrate their claims, but only after a trial to determine the validity of the arbitration clauses.

The judge said “a non-signatory to an arbitration agreement may compel a signatory to that agreement to arbitrate a dispute where careful review … discloses that the issues the non-signatory is seeking to resolve in arbitration are intertwined with the agreement that the estopped party has signed.”

The 2nd Circuit reversed in a decision by Judges Rosemary Pooler and Peter Hall and, sitting by designation, Eastern District of New York Judge David Trager. Pooler wrote for the panel.

“Arbitration is a matter of contract, but the plaintiffs have not entered into any contract whatever with Amex, let alone any contract containing an arbitration clause,” Pooler said.

So the question for the court was whether it would employ any one of a number of common law principles that would allow a nonsignatory to enforce an arbitration agreement, including equitable estoppel. The answer was no.

“The district court’s opinion improperly extends the principle of compelling arbitration through equitable estoppel to a situation where the requisite contractual basis for arbitration does not exist,” Pooler said.

Second Circuit cases applying estoppel against a party trying to avoid arbitration, she noted, have in common that nonsignatories have some kind of “corporate relationship” to a signatory, such as cases involving subsidiaries, affiliates and agents.

And the court has extended that concept beyond affiliated corporate entities to other situations, including where a nonsignatory to a construction contract could compel arbitration because it was explicitly required by the contract to perform certain tasks. That case was Choctaw Generation Ltd. P’ship v. American Home Assurance Co., 271 F. 3d 403 (2d Cir. 2001).

But there are limits, Pooler said, and those limits were exceeded here, because the case “utterly” lacked the “further necessary circumstance of some relation between Amex and the plaintiffs sufficient to demonstrate plaintiffs intended to arbitrate this dispute with Amex.”

Merrill G. Davidoff of Berger & Montague in Philadelphia represented the plaintiffs.

“We think some of the lower courts, including the lower court in this case were misapplying and ‘overapplying’ the doctrine of equitable estoppel to throw cases into arbitration that shouldn’t have been there and we think the court of appeals has appropriately reined in the application of that doctrine,” he said.

American Express spokesperson Joanna Lambert said the company was disappointed in the decision and was reviewing its options. Jonathan Jacobson of Wilson Sonsini Goodrich & Rosati argued for American Express.

Source

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UPDATE: If you are a Northwestern Mutual Life Insurance Company policyholder who has questions or concerns about class actions in general, feel free to contact us to see if we can help. Call us at 601.366.1297 or submit your question/comment here. IF YOU HAVE QUESTIONS SPECIFIC TO THE NORTHWESTERN MUTUAL SETTLEMENT, PLEASE CLICK HERE.

Northwestern Mutual Life Insurance Company announced that it has settled a class action involving its marketing and sales of term life insurance. An article detailing the announcement is reprinted below.

Northwestern Mutual settles lawsuit

Associated Press
7:06 AM CST, November 13, 2008

MILWAUKEE – Northwestern Mutual Life Insurance Co. has agreed to settle a class action lawsuit for up to $92 million.

The lawsuit accused Northwestern Mutual of failing to pay dividends on certain term life policies and using improper sales and marketing practices.

The lawsuit was filed four years ago by a customer in California who said the insurer’s sales materials misled him about whether dividends would be paid on term life and disability insurance.

Northwestern Mutual denies the lawsuit’s allegations. Company spokeswoman Jean Towell says they decided to settle to avoid “the uncertainty and expense of litigation.”

The proposed settlement covers about 1.3 million current and 1.6 million former policy owners who purchased term life or disability coverage since 1981.

Source

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