Class Action Roundup – July 7, 2017

We have a lot to cover from the end of June and the long July Fourth weekend. Let’s get to it.

U.S. Supreme Court Ruling Signals the End of “Litigation Tourism”

The Chicago Tribune reported on June 22 that the U.S. Supreme Court handed down an 8-1 ruling that could usher in the end of the “litigation tourism” that makes Illinois’s Madison and Cook County courts, among some others nationwide, attractive destinations for out-of-state class action litigation. The ruling overturned a California court decision affirming out-of-state plaintiffs could sue big pharma outfit Bristol-Myers Squibb in the state even though the company’s headquarters are in New York. At its core, the pro-corporation outcome means consumers can no longer sue major companies anywhere they do business, and restricts mass litigation to companies’ home states.

The effects of the decision were felt almost immediately, the Tribune wrote, noting the decision directly skewed a lawsuit in Missouri over the alleged cancer-causing effects of Johnson & Johnson’s talcum powder.

On what this decision may mean for the wider scope of class action litigation, Justice Sonia Sotomayor, the decision’s lone dissenter, said it will “eliminate nationwide mass actions in any state other than those in which a defendant is essentially at home.” Though the ground-level ramifications have yet to be fleshed out by plaintiffs’ and corporate attorneys, it’s likely that the Supreme Court’s ruling will make it more difficult to consolidate mass litigation into one jurisdiction, the Tribune said.

Read up on this far-reaching decision with Robert Channick and Becky Yerak’s report for the Chicago Tribune.

Citing Navient Abuses, Four Senators Say IRS-Contracted Pioneer Credit Recovery Pressures Taxpayers, Violates FDCPA

Reacting to complaints of how Internal Revenue Service-contracted agency Pioneer Credit Recovery may be handling its debt collection responsibilities, four senators sent the company a letter expressing concerns that it was “pressuring taxpayers into risky financial transactions” and violating the Fair Debt Collection Practices Act (FDCPA), among other alleged abuses.

Senators Sherrod Brown (D-OH), Benjamin Cardin (D-MD), Jeff Merkley (D-OR) and Elizabeth Warren (D-MA) explained in their letter that they were troubled by Pioneer’s agreement with the IRS “because of abuses of federal student loan borrowers by [Pioneer’s] parent company, Navient, through its Education Department student loan servicing contracts.” More specifically, the senators raised issues ostensibly present in Pioneer’s call scripts, which are also used by other debt collectors in contract with the IRS, Forbes wrote in a June 26 report. While every script raised some eyebrows, Forbes continued, the senators found Pioneer’s call dialogues “particularly troubling,” citing potential opportunities for scammers and pressure on taxpayers that could lead to even heavier financial hardship.

Forbes staff writer Kelly Phillips Erb has the details, including Pioneer’s statement on the senators’ concerns.

TD Bank Penny Arcade Customers Must Wait at Least Six Months to See $7.5M Settlement

The good news is TD Bank will shell out a preliminarily approved $7.5 million settlement to end a class action over allegations its Penny Arcade machines swindled customers looking to cash in loose change. The bad news, Biz Journals writes, is it will take at least six months for class members to see payments from the deal.

U.S. District Judge Jerome Simandle granted preliminary approval to the settlement in Camden, New Jersey on June 27, at which time he scheduled a hearing for January 11, 2018 to finalize the agreement.

TD Bank pulled its once-popular Penny Arcades from all branches in 2016 following an NBC Today show investigation during which $300 in coins were put into five randomly chosen machines. The tests showed TD was keeping up to 15 percent of customers’ change in addition to the standard eight percent fee charged to non-TD customers just to use the Penny Arcades.

Philadelphia Business Journal writer Jeff Blumenthal has been covering this story since the 2016 Today show investigation and has the latest on the settlement at BizJournals.com.

California Judge Dismisses NFL, DirecTV ‘Sunday Ticket’ Class Action

Consumers were forced to punt when U.S. District Judge Beverly Reid O’Connell on June 30 dismissed with prejudice a class action against the NFL and DirecTV over “blacked out” games and the anticompetitive prices the parties allegedly charged for out-of-market games.

While plaintiffs argued fans should be able to watch whatever game they want—no matter where they live—without being forced to pay for the defendants’ Sunday Ticket package, the NFL and DirecTV said, according to Hollywood Reporter, the games technically are available somewhere every week, with multiple games available for free everywhere. Overall, Judge O’Connell decided the plaintiffs lacked standing to fight a horizontal agreement in place between the NFL and its 32 teams to pool television rights.

Ashely Cullins has a breakdown of the NFL and DirecTV’s victory the Hollywood Reporter’s website.

SoulCycle to Pay Up to $9.2M to End Expiring Gift Card Class Action

A settlement pegged at between $6.9 million and $9.2 million has been reached in a class action alleging indoor cycling club SoulCycle sold customers expiring gift cards in violation of California consumer protection laws. According to a wrap up of the settlement published on fitness industry trade outlet ClubIndustry.com, SoulCycle will reinstate up to two expired classes or pay $50 to each affected customer, while also updating its company policy to ensure customers better understand that buying a class or crop of classes is not the same as purchasing a gift card.

The two plaintiffs behind the February 2016 lawsuit claimed SoulCycle defrauded customers by forcing them to buy gift cards with rapidly expiring enrollment windows and keeping the balances from unused or expired gift cards. The individuals alleged SoulCycle’s business practices were a “relentless effort to maximize its profits,” which reportedly yielded the company $25 million from expired gift certificates sold in 2014.

ClubIndustry.com writer Anthony Dominic has everything you need to know over at the publication’s website. 

TINA Report Says DealDash’s “Penny Auctions” Are No More than “Perverse Lotteries”

NBC News this week shared a report from Truth In Advertising (TINA) saying the ad industry watchdog has filed a formal complaint against “penny auction” site Deal Dash claiming the company operates an “illegal gambling site” and uses deceptive tactics to lure in consumers. TINA.org’s complaint, which was filed with attorneys general from six states, NBC News writes, piggybacks on a lawsuit filed against DealDash in California April alleging the company’s “perverse lotteries” have cost American consumers tens of millions of dollars in pursuit of “sham merchandise.”

Dissimilar to eBay and other auction platforms, all DealDash participants pay money in the end, regardless of if they win the item they bid on. That excess money, one can easily guess, is kept by DealDash. According to TINA.org, very few bidders truly get deals with DealDash, a far cry from claims made in the company’s television ads.

Learn more about the case against DealDash, as well as how its complicated bidding system actually works,  with Herb Weisbaum’s piece for NBC News. TINA.org’s investigation on DealDash can be read here.