Class Action Roundup – More Equifax News, Plus U.S. Supreme Court, CFPB, Yahoo

The Equifax saga has not lost any steam since we posted our last roundup of developments. If anything, the Equifax data breach—and the resulting deluge of class action lawsuits—somehow continues to spill into the national news cycle.   

Here’s what you might have missed if you, like me, find yourself more often gravitating toward taking quiet walks outside or the tranquility of a good book rather than facing the increasingly crippling bombardment of unfortunate real-world news.

The Latest on Equifax…

Before the dust settled on the September 7 data breach—even though one could argue it still has not settled and has, in fact, gotten worse—Equifax CEO Richard Smith abruptly retired, forgoing his hefty 2017 bonus despite reportedly still being eligible for $18.4 million in retirement benefits no matter the outcome of the federal probe into the company’s cybersecurity failures. “At this critical juncture, I believe it is in the best interests of the company to have new leadership to move the company forward,” Smith said on his way out. Must be nice.
Despite exiting Equifax stage left, Smith has been forced to face the music in front of Congressional lawmakers, who’ve demanded he explain to the American public exactly what went wrong—“both human error and technology failures,” Smith said—why Equifax is deserving of a reported $7 million IRS—wait for it—fraud prevention contract, and what the company plans to do about it.
Per Smith’s testimony, members of the House Digital Commerce and Consumer Protection subcommittee offered some choice words to express their overall disgust with Equifax’s handling of the data breach.
A certain board game icon also made an appearance in Washington.
While the lawsuits show no sign of slowing down, five federal cases have already been consolidated in U.S. District Court in White Plains, New York.
Lastly, remember the initial count of 143 million people being affected by the data breach? The official total is now 145.5 million people, after Equifax announced an additional 2.5 million consumers were believed to have been affected.

 Now, on to a much lighter topic.

The U.S. Supreme Court is Back in Session. Here’s What’s in Store for This Term.

Workplace Class Action Waivers 

Did I say lighter? I meant to say “serious to the extent that almost all American citizens may be affected by the decisions the nine individuals who serve for life on the Supreme Court must make this term.”

Chief among the docket items the Supreme Court is set to argue in the coming weeks are arbitration agreements that bar workers from suing their employers through class action litigation. According to Bloomberg’s preview of the new term, which began on Monday, October 2, employers hope the justices expand upon previous Supreme Court decisions from 2011 and 2013 wherein a conservative majority sided with companies and allowed employers to forgo class action lawsuits and instead send employee disputes straight to arbitration. While President Trump’s administration sides with employers, Bloomberg notes the National Labor Relations Board, the independent agency tasked with enforcing America’s labor laws, appears set to side with workers.

Oral arguments over the workplace class action waiver issue were heard on October 2, the first day the justices were back in Washington. To the surprise of no one, given the justices’ already somewhat known views on the subject, the Supreme Court is essentially split down the middle on employer-employee disputes, with all eyes on Trump-era appointee Justice Neil Gorsch as the potential deciding opinion.

To read more on this particular Supreme Court debate, we recommend the National Law Review’s thorough write up of October 2’s oral arguments here.

Everything Else

The “everything else” heading here is not to say the rest of the matters on the Supreme Court’s plate aren’t also of paramount importance.

The justices this week also argued the issue of partisan gerrymandering, with the Supreme Court giving opponents of the practice of rearranging political maps for the benefit of a certain parties reason for optimism. This issue, the Washington Post points out, could reshape how elections are conducted in the United States.

In November, the Supreme Court is expected to hear arguments regarding “voter purging,” with the issue stemming from Ohio removing voters from the rolls if they fail to vote during a six-year period and do not respond to requests to confirm their addresses. Not yet scheduled are, among other items, arguments about whether a Colorado bakery has the constitutional right not to create a wedding cake for a gay couple; whether a warrant is necessary for prosecutors to get cell phone tower records, including location data; sports gambling, with New Jersey as the primary battleground; and President Trump’s travel ban.

Bloomberg writer Greg Stohr’s entire roundup of the itinerary for the Supreme Court’s new term is well worth a read.

Business Groups Sue Consumer Financial Protection Bureau to Try to Block Arbitration-Killing Rule

Last Friday, the Consumer Financial Protection Bureau (CFPB) was hit with a lawsuit brought by banks and business groups attempting to block the agency’s pro-consumer rule that permits class action lawsuits to be filed against credit card companies and other financial institutions. Filed in Texas on behalf of the U.S. Chamber of Commerce, the nation’s largest lobbying organization, the American Bankers Association and other financial groups, the lawsuit, which the Los Angeles Times describes as a “last-ditch effort,” alleges the structure of the CFPB is unconstitutional and claims its rule will do nothing good for consumers.

In response to the lawsuit’s claims that class action litigation is “significantly less effective than arbitration in addressing consumer claims,” CFPB director Richard Cordray shot back.

“It is the height of hypocrisy for companies to say they’re helping consumers by closing off the very same legal option they use when they’ve been wronged,” Cordray wrote in an August New York Times opinion piece.

Los Angeles Times reported Renae Merle has complete coverage of the proceedings over at the publication’s website.

Flint, Michigan Water Lawsuits Consolidated into One Class Action

MichiganRadio.org reports that “nearly a dozen” proposed class actions and even more individually filed cases have been consolidated into a single class action lawsuit. The consolidated case alleges government officials, including Michigan Governor Rick Snyder, and private contractors are responsible for the contamination of the city of Flint’s tap water, which flows from the Flint River, and the resulting health problems experienced by area residents. The lawsuit’s co-lead attorney estimates more than 100,000 Flint residents may be included in the class covered by the litigation.

Head over to MichiganRadio.org to read more from writer Steve Carmody.

It Turns Out That All 3B Yahoo Accounts Were Affected by that 2013 Data Breach

Contrary to what many think, other data breaches have found a way to squirm into the recent news cycle. There’s drive-in fast food chain Sonic, for instance, as ClassAction.org has covered here, here and here in the past few days. But the recent Sonic hack, dear reader, is mere pittance compared to a deeper cut you may remember from a few years back.

Yahoo announced this week that all three billion of its accounts were compromised in that 2013 data breach, a number that Reuters notes is triple what the company previously reported last December. “Recently obtained new intelligence” informed the now Verizon-owned company that each and every user account had been exposed to data thieves, who reportedly had access to sensitive data thanks to outdated encryption.

Reuters reports Jonathan Stempel and Jim Finkle have all you need to know.

Wells Fargo Mortgage Borrowers to Get “Rate-Lock” Fee Refunds for Delayed Mortgage Loan Applications

As an ostensible act of contrition in the wake of the scandal surrounding the company’s unconscionable sales tactics, Wells Fargo announced this week it will refund fees paid out by mortgage loan borrowers who incurred delays in completing their applications that were the bank’s fault. The Los Angeles Times reports that the fees in question were only supposed to be levied by Wells Fargo should a borrower fail to complete paperwork on time with the goal of retaining their initially quoted interest rate. Wells Fargo said it will soon reach out to customers who were charged “rate-lock extension” fees, with refunds expected to begin going out sometime this quarter.

Head over to LATimes.com to read Lauren Raab’s piece and to learn how these improperly charged mortgage application extension fees came to light.

TGI Fridays Escapes One Class Action, Settles Another

September saw TGI Friday’s settle a proposed class action lawsuit, while October saw the chain eatery wriggle out of a separate lawsuit claiming it price-gauged customers.

In what some call the largest wage and hour settlement ever, TGI Fridays agreed last month to pay $19.1 million to end a 2014 case alleging it for years underpaid tipped servers, bussers, food runners and bartenders. A New York Post report from writer Lisa Fickensher says roughly 28,000 former employees are eligible for part of the settlement, which is to be paid by the company that owned TGI Fridays when the alleged Fair Labor Standards Act violations occurred, Carlson Restaurants, Inc. The alleged FLSA abuses, the Post continues, included unpaid overtime, illegal tip pooling and failure to maintain accurate wage records.

This month, the New Jersey Supreme Court tossed a lawsuit alleging TGI Fridays price-gauged customers when it came to beverages, with the case alleging the restaurant unlawfully failed to post drink prices and often charged one amount for a customer’s first drink, and a different price for the second. The reason the lawsuit was thrown out, NJ.com’s Samantha Marcus writes, is because the state’s justices disagreed with a lower court’s class certification of the suit, ruling the parameters for inclusion coverage by the suit were too broad, and that the plaintiff’s counsel failed to show common issues existed between class members.