News in Brief September 27 – Wells Fargo, Costco, Ford and More

Shareholders Take Aim at Wells Fargo with Securities Class Action

The hits keep coming for Wells Fargo. A day after being sued by current and former employees who claim they were penalized for staying out of the bank’s fraudulent sales practices, Wells Fargo now faces a putative securities class action filed by shareholders alleging they were misled with regard to the company’s “cross-selling” business methods. The suit claims Wells Fargo intentionally hid its cross-selling, sales quota-centric business culture from shareholders and investors, which allegedly led to the artificial inflation of the bank’s stock prices, a violation of the Securities Exchange Act of 1934. Specifically, the suit notes, Wells Fargo filed documents with the Securities Exchange Commission that highlighted its cross-selling practices as a primary contributor to the company’s growth, a statement shareholders allege grossly overlaid the fraudulent nature of the bank’s sales activities.

Toilet Paper Tax at Issue in Putative Class Action Against Costco

A putative class action has been filed by New Jersey consumers against Costco claiming the buy-in-bulk wholesaler overcharged shoppers for toilet paper with an additional tax that is illegal under state law. The plaintiffs allege Costco adds a seven percent tax to Charmin brand toilet paper—a product that, along with napkins, towels and other household paper goods, is exempt from sales tax under New Jersey law. The proposed class may swell to include more than 100,000 consumers in New Jersey who were charged the extra seven percent tax on toilet paper, or on any other tax-exempt product, court documents add, within the last six years.

Judge Certifies Class of Ford Focus Owners in Rear Suspension Defect Suit

A proposed class of Ford Focus owners suing the car maker over dangerous tire wear allegedly caused by a rear suspension alignment defect has been certified by a judge in California. The class includes individuals in California that purchased or leased a 2005 through 2011 Ford Focus. According to court documents, the defect can lead to premature rear tire wear, which could result in vehicle control problems and the “threat of catastrophic tire failure,” especially in less-than-ideal driving conditions.

Class Certification Granted to Corn Growers in MDL Against Syngenta

A nationwide class and eight state-level subclasses have been certified by a federal judge in an MDL alleging Swiss agricultural biotech outfit Syngenta cost the corn industry at least $1 billion by “commercializing” genetically modified corn seed products Viptera and Duracade. Both classes allege the GMO corn products contain a genetic trait not approved by China, one of the US’s main corn export markets. Syngenta’s alleged commercialization of these products caused them to be mixed in with the corn supply throughout the US. As a result, China rejected all imports of corn from the US, thereby significantly impacting the American corn producers’ source of revenue, the classes allege. Both the national and state classes can include any corn producer who sold corn after November 18, 2013, excluding those who bought Syngenta’s GMO seed strains.