A judge has granted class action certification to a lawsuit involving 39 plaintiffs across 26 states — including Michigan — that accuses General Motors of knowingly selling cars with faulty transmissions.
On Monday, David Lawson, U.S. District judge for the Eastern District of Michigan, granted class certification in the case of Speerly vs. GM, which represents the owners of various GM vehicles who have one of two models of eight-speed automatic transmissions — the GM 8L90 or 8L45 — made between 2015 and March 1, 2019.
The transmissions lurch and shutter when driving, creating a safety hazard, the lawsuit said.
The Renaissance Center, headquarters of General Motors, on the Detroit River in downtown Detroit.
“General Motors knowingly sold over 800,000 eight-speed transmission vehicles, which they knew to be defective for years, and yet made the business decision not to tell its customers before purchase,” said Ted Leopold, partner at Cohen Milstein and court-appointed lead counsel for the class action case. “Dealers were directed to tell the customers that harsh shifts were ‘normal’ or ‘characteristic.’ Such decision making is both highly irresponsible and emblematic of what GM believes it can get away with.”
Read on Detroit Free Press.
A New York federal judge certified one of three proposed investor classes in a suit alleging Credit Suisse tricked investors into buying a series of short-term notes inversely tied to stock market volatility in 2018, finding two of the proposed classes can’t be certified because they conflict with one another.
U.S. District Judge Analisa Torres issued an order on Thursday granting certification to the investors’ proposed Securities Act class, which includes all individuals and entities that purchased or acquired Inverse VIX exchange-traded notes, also known as XIV notes, pursuant or traceable to the bank’s offering documents, and were subsequently damaged.
The judge denied certification to proposed classes identified as the misrepresentation and manipulation classes. The manipulation class would have included all individuals and entities that purchased or acquired XIV notes between Jan. 29 and Feb. 5, 2018, and the manipulation class was proposed to include those who sold or redeemed the notes on or after Feb. 5, 2018.
Judge Torres said in her order that the Securities Act class satisfies all the requirements of Rule 23(a), such as numerosity, typicality and commonality, to warrant certification, and she rejected Credit Suisse’s argument that the plaintiffs “suffer from various infirmities” that preclude them from serving as class representatives.
The four plaintiffs, Set Capital LLC, Apollo Asset Ltd., Aleksandr Gamburg and Stefan Jager, intended to represent all three classes.
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In addition to ruling on certification in her order, Judge Torres approved Cohen Milstein Sellers & Toll PLLC and Levi & Korsinsky LLP as class counsel.
“Plaintiffs’ counsel diligently investigated the claims in this case, drafted a detailed complaint, survived a motion to dismiss on appeal, and have further investigated the claims in discovery. Plaintiffs’ counsel also has extensive experience in class action litigation, including securities class actions,” she said.
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The investors are represented by Michael B. Eisenkraft, Laura H. Posner, Steven J. Toll, Brendan Schneiderman and Carol V. Gilden of Cohen Milstein Sellers & Toll PLLC, and Eduard Korsinsky, Nicholas I. Porritt, Adam M. Apton and Alexander Krot of Levi Korsinsky LLP.
- Signature Bank, Silicon Valley audited by KPMG
- Auditors responsible for raising red flags about viability
Silicon Valley Bank and Signature Bank collapsed days apart within two weeks of their auditor KPMG LLP signing off on their books.
The Big Four audit firm’s responsibility included assessing the odds of whether the banks could survive the next 12 months. Regulators shuttered Silicon Valley and placed it into Federal Deposit Insurance Co. receivership two weeks after KPMG signed off on the bank’s financials. Signature Bank made it 11 days.
Auditors aren’t fortune tellers, but they are responsible for making sure corporate financials give a fair and up-to-date portrayal of the company’s financial health. With two clients collapsing within days of each other—Silicon Valley fell Friday, and regulators raced to shut down Signature Bank on Sunday night—KPMG’s work will come under scrutiny.
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‘A Lot of Smoke’
But the close proximity between the clean audit reports and the crashes indicates important information was either missing or ignored, said Laura Posner, who represents institutional investors in securities fraud class actions and has sued Big Four audit firms previously.
Auditors should have considered whether liquidity challenges and threats from still-rising interest rates posed substantial risks to the company going forward, said Posner, a partner with Cohen Milstein Sellers & Toll PLLC.
“I certainly would argue that there are a lot of red flags, a lot of smoke,” she said. “The timing is really problematic.”
Read the complete article on Bloomberg Tax.
- Workers sufficiently alleged they were employees
- Challenge to willfulness allegations also fails
The Salvation Army lost its bid to throw out allegations it owes vulnerable people who live and work in its adult rehabilitation centers minimum and overtime wages.
The workers—who say they receive $7 to $25 per week in cash, along with room and board and rehabilitation services—argue that the total value of what they receive doesn’t meet state and federal minimum wage requirements. Their allegations, including as to their status as employees, are sufficient to move forward, the US District Court for the Northern District of Georgia said.
The four named plaintiffs, who seek to represent a Fair Labor Standards Act collective and a state-law class, worked at the religious nonprofit’s ARCs in Texas, Tennessee, Alabama, and Florida. All four say they worked at least 40 hours per week, and two allegedly worked more than that every week. They’re suing the entity responsible for Salvation Army’s southern region, which comprises 15 states and Washington, DC.
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Cohen Milstein Sellers & Toll PLLC, Rosen Bien Galvan & Grunfeld LLP, Rukin Hyland & Riggin LLP, and Radford & Keebaugh LLC represent the workers. Crowell & Moring LLP and Alpharetta, Ga.-based Evan R. Mermelstein represent Salvation Army.
Read the complete story on Bloomberg Law (subscription required).
Janssen Biotech Inc. must hand over its communications with federal agencies regarding a former employee’s claims filed on behalf of the government that the company paid doctors kickbacks to boost its drug sales, a Boston federal judge ordered.
Chief U.S. Magistrate Judge M. Page Kelley settled a crossfire of discovery motions in an order Thursday that found Janssen’s communications with the federal government about the claims were “undeniably relevant and not privileged” and should be handed over to relator Julie Long.
The ruling gives Janssen two weeks to provide Long its communications with the U.S. Department of Justice, the inspector general of the U.S. Department of Health and Human Services, and the Centers for Medicare & Medicaid Services.
The biotech was also ordered to produce contracts it had with Akin Gump Strauss Hauer & Feld LLP which disclose how much Janssen paid the firm to run free phone seminars for physicians about changes in Medicare rates.
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The discovery orders issued Thursday followed Long’s insistence that Janssen was “stonewalling” her on the case by delaying court-ordered production plans. But Janssen had countered that Long was the one causing “unnecessary delays” with her burdensome demands.
Long’s attorney Theodore Leopold of Cohen Milstein Sellers & Toll PLLC said in a statement Friday that his client is cleared with the ruling.
“We look forward to getting the long-delayed document production and relevant names of those individuals involved with the decision-making that has led to this litigation,” Leopold said.
Representatives for Janssen were not immediately available for comment on Friday.
Julie Long is represented by Jonathan Shapiro and Lynn G. Weissberg of Stern Shapiro Weissberg & Garin and Casey M. Preston, Gary L. Azorsky, Jeanne A. Markey, Leslie Kroeger, Theodore Jon Leopold, Diana L. Martin and Poorad Razavi of Cohen Milstein Sellers & Toll PLLC.
Read the article on Law360.
An Illinois federal judge refused to free two Casino Queen founders and a former president from a lawsuit by workers alleging the executives siphoned millions from the workers’ retirement savings to buy stock in the company’s holding firm, saying he needs more information before making any decisions.
On Monday, U.S. District Judge David W. Dugan denied founders Charles Bidwell III and Timothy J. Rand’s motion to dismiss the proposed class action by employee stock ownership plan participants Tom Hensiek, Jason Gill and Lillian Wrobel. The judge also rejected former president James G. Koman’s motion for judgment on the pleadings in the Employee Retirement Income Security Act lawsuit.
The Casino Queen workers said they didn’t learn of the executives’ 2012 transaction, in which the workers say the ESOP overpaid for the newly formed casino holding company’s stock in a $170 million purchase, until 2019 because they were provided false information regarding the deal and the holding company’s stock prices.
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”We are very pleased that the court has denied — yet again — dispositive motions filed by defendants,” Michelle C. Yau, who represents the ESOP participants, told Law360 in a statement. “My clients look forward to trial where they get a chance to prove their claims after years of delay by defendants.”
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The casino employees are represented by Colleen R. Smith, John Stokes, Peter K. Stris, Rachana Pathak, Shaun Martin and Victor O’Connell of Stris & Maher LLP and Ryan Wheeler and Michelle C. Yau of Cohen Milstein Sellers & Toll PLLC.
Read on Law360.
A class action lawsuit alleging a suburban beauty supply distributor and staffing agencies enforced discriminatory practices against Black workers is moving forward.
Named plaintiffs Joe Eagle, Michael Keys, James Zollicoffer and Evan Franklin filed suit alleging that Vee Pak, located in Countryside and Hodgkins, had a policy that favored hiring Latino workers over Black applicants, and instructed several staffing agencies to implement that policy when filling temporary positions in its warehouse. The manufacturing facilities had workers fill and cap bottles and tubes for personal-care and drug companies.
The legal action dates back to 2012, when Eagle, Keys, Zollicoffer and Franklin, who are Black, first brought the putative class action individually and on behalf of other Black temp workers allegedly similarly denied work, against Vee Pak and three staffing agencies, Alternative Staffing, Personnel Staffing Group and Staffing Network, that allegedly implemented Vee Pak’s alleged discriminatory policy. Alternative Staffing and Personnel Staffing Group, which does business as Most Valuable Personnel, or MVP, have settled the claims against them; Vee Pak and the third staffing agency, Staffing Network, remain in the case.
Plaintiffs moved to certify a class of Black workers who sought, but were denied, work assignments at the three staffing agencies from which they could have been referred to Vee Pak between 2011 and 2015.
The plaintiffs’ motion for class certification was granted Feb. 23 by U.S. District Judge John Tharp in U.S. District Court for the Northern District of Illinois in Chicago. Eagle and Keys were appointed as staffing network subclass representatives, Zollicoffer as MVP subclass representative, and Franklin as ASI subclass representative.
The court appointed attorneys Joseph M. Sellers and Harini Srinivasan, of Cohen Milstein Sellers & Toll, of Washington, D.C.; Christopher J. Williams, of National Legal Advocacy Network, of Chicago; and Christopher J. Wilmes and Caryn C. Lederer, of Hughes Socol Piers Resnick & Dym, of Chicago, as class counsel.
Merck Sharp & Dohme Corp. has been hit with another proposed class action over its allegedly anti-competitive practice of bundling several of its vaccines for children to maintain its monopoly power in the rotavirus vaccine market, this time brought by third-party payors who indirectly paid for or reimbursed rotavirus vaccines.
In the suit filed Friday, Baltimore’s mayor and City Council claim that Merck had already bundled several of its pediatric vaccines before GlaxoSmithKline PLC released its Rotarix vaccine. However, as it prepared for GSK’s introduction of the competing rotavirus vaccine, Merck added a condition to its contracts requiring customers to buy all or nearly all of their pediatric rotavirus vaccines from Merck. If they didn’t, customers would face substantial price penalties on all other bundled Merck vaccines, according to the complaint.
That allowed Merck to charge supracompetitive prices to purchasers of its vaccines, Baltimore said. And those prices are passed along to patients and third-party payors, such as the city and other putative class members, it said.
“Due to the Merck bundle, instead of significantly decreasing the price of RotaTeq when GSK entered the market, as would normally be expected to result from competitive entry into a monopoly market, Merck has maintained the price of RotaTeq at supracompetitive levels, actually increasing its list price despite facing competition from GSK,” the city said.
And as a result, the city and others have paid — and continue to pay — artificially inflated prices for the rotavirus vaccines, Baltimore added.
Baltimore said it’s suing on behalf of hundreds of thousands of third-party payors in so-called “repealer jurisdictions,” or states or districts that have repealed the bar on indirect purchaser plaintiffs seeking recovery. Those jurisdictions include California, Michigan, Nebraska, Oregon, New York and the District of Columbia, among others.
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Baltimore is represented by Eric L. Cramer, Russell D. Paul, David Langer and Daniel J. Walker of Berger Montague PC, Daniel H. Silverman, Leonardo Chingcuanco and Sharon K. Robertson of Cohen Milstein Sellers & Toll PLLC and Ebony Thompson and Jane Lewis of the City of Baltimore’s Department of Law.
Read the complete article on Law360.
The U.S. Department of Justice told the D.C. Circuit on Thursday that former President Donald Trump is not immune from a trio of lawsuits filed by lawmakers and U.S. Capitol Police officers accusing him of inciting the deadly insurrection at the U.S. Capitol in January 2021.
In an amicus brief, the department told the appellate court that while presidents enjoy absolute immunity related to official acts, the same absolute immunity doesn’t extend to their every action. The department, however, declined to expressly say whether it believed the incitement claims lodged against Trump had any merit.
Eleven members of the U.S. House of Representatives and two Capitol Police officers are seeking to hold the former president liable for emotional distress and other damages caused by the riots on Jan. 6, 2021, following his speech at the Ellipse near the White House. A D.C. federal judge in February 2022 rejected Trump’s immunity argument, and a D.C. Circuit panel seems to be leaning toward affirming that decision.
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The plaintiffs are represented by Joseph M. Sellers, Brian Corman and Alison S. Deich of Cohen Milstein Sellers & Toll PLLC; Janette McCarthy-Wallace, Anthony P. Ashton and Anna Kathryn Barnes of the NAACP; Robert B. McDuff of Mississippi Center for Justice; Patrick A. Malone, Daniel Scialpi and Heather J. Kelly of Patrick Malone & Associates PC; Phillip Andonian and Joseph Caleb of Caleb Andonian PLLC; Matthew Kaiser and Sarah R. Fink of Kaiser Dillon PLLC; and Cameron Kistler, Erica Newland, Kristy L. Parker, Jacek Pruski, Anne Tindall, John Paredes, Genevieve C. Nadeau, Benjamin L. Berwick and Helen E. White of United To Protect Democracy.
“Pharmacy Benefit Managers’ anticompetitive tactics are driving up health care costs for Americans and harming patient care. Federal agencies administering health care programs for seniors, active-duty military, and federal employees rely on PBMs as middlemen to set drug prices, which opens the door to government waste at the expense of American taxpayers. Greater transparency in the PBM industry is vital to determine the impact that their tactics are having on patients, the pharmaceutical market, and health care programs administered by the federal government. The House Oversight and Accountability Committee is shining a light on this issue in the healthcare system and will continue to examine solutions to make prescription drugs more affordable for all Americans,” said Chairman Comer.
CVS Health’s CVS Caremark, Cigna’s Express Scripts, and United Health Group’s Optum Rx control an estimated 80 percent of the PBM marketplace. In Committee Republicans’ December 2021 report, initial findings revealed that large PBM consolidation has negatively impacted patient health, increased costs for consumers, forced manufacturers to raise their prices, and created conflicts of interest which distort the market and limit high quality care for patients.
Below are the letters Chairman Comer sent today: