Consumer Advocate Legal Update : Class Action Lawyers & Attorneys : Khorrami Pollard & Abir Law Firm : Mass Torts, Products Liability

The Education Trust, a nonprofit research and advocacy group, published a recent report on the for-profit education system in the United States, entitled, "Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities" and some of its findings are quite staggering.  

First is the student financial aid problem.  Low income students enrolling in for-profit universities are receiving less financial aid to cover the costs of tuition and as a result are left with greater debt. Consider the report's general data for Four Year institutions from 2007 on the unmet need of low income students:

Second is the graduation problem.  The report further includes alarming statistics on the graduation rates of for-profit universities.  Most troubling is the six-year graduation rate of the nation largest for-profit education provider, the University of Phoenix.  There, within six year of enrollment, only 9% of student graduated.  Even worse, their online students graduated at an even lower rate of 5%.  

Last is the default problem.  Students from for-profit universities are twice as likely to default on their student loans and make up 43% of all student loan defaults, a problem previously discussed in greater detail here.  

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Patients and consumers in Massachusetts now have the ability to know whether their doctors are receiving incentives to prescribe them certain drugs.   Recently, and as a result of a 2008 state law regulating industry conduct, Massachusetts became the first state to post an online database of payments from drug and medical device companies to its state’s health care providers. Since it is fully searchable by provider name, company name or payment category, this database is fairly user-friendly and comprehensive. It is a great tool for proactive consumers who wish to protect their rights and stay informed.  As a quick overview, over a six-month period, the drug and device companies reported made $35.7 million in payments, with almost half that sum going directly to physicians.  

Although Massachusetts has made important strides in this realm, consumers outside the state also have resources to turn to. Earlier this month, Andrew Brown of our firm commented on Propublica’s Dollars for Docs database, which compiles nationwide data about payments pharmaceutical companies have made to doctors for promoting their drugs. Propublica has published a series of articles discussing its database, and importantly has an instructional guide for patients explaining the best way in which Dollars for Docs can be used.

Massachusetts’ online database represents an important and empowering trend that consumers should be aware of. It is important to note that these payments are not illegal, but may be a cause for concern. Consumers are urged to use this data wisely to foster discussion with their health care providers when being prescribed new medications.  

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CNN reports that Johnson and Johnson has issued yet another recall.  Instead of making a public statement, as it did with its previous recalls earlier this year, the company quietly issued a statement on its website.  As a result of this latest recall, almost 5 million packages of Benadryl, Motrin, and Rolaids are being pulled off the shelves.  Specifically, the affected products include 4 million packages of Children's Benadryl Allergy Fastmelt Tablets in cherry and grape flavors, nearly 800,000 packages of Junior Strength Motrin caplets, and 71,000 packages of Rolaid antacids in cherry flavor soft chew.

Unlike the recalls earlier this year, the Company claims that the products do not fail to meet consumer standards, but are only being pulled because of manufacturing “insufficiencies.” J & J fails to identify the specific manufacturing issue. As for the Rolaids, the company issued the recall only after several consumer complaints of an “uncharacteristic consistency or texture traced to crystallized sugar in the product.”  

Although the company states that this is only a wholesale and retail recall and that consumers can continue to use the products, use your best judgment and proceed with caution.

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If you are a current or past recipient of healthcare provided by a government program with statutory recovery rights the law as well as the terms of most settlement agreements require the satisfaction and discharge of those programs’ interest in any settlement award you may be eligible to receive. In other words if a governmental healthcare program treated you for the injuries that you are being compensated for in a settlement you are required to pay back a portion of that amount that was paid on your behalf.

The following questions and answers will provide a brief overview of government liens and the lien resolution process.

Q: How will I know if I have a government lien?

A: In most cases a Lien Resolution Administrator (“LRA”) is either court appointed or hired by your law firm to investigate whether or not you have a government lien pending.

Q: Do they check just my state or all states?

A: The LRA will check the state where you resided during the time of your injury.

Q: I have never been on any of these programs, so what does that mean for me?

A: The LRA investigation will show that you do not have any have any such obligations and as such will notify your law firm as well as the defense attorneys not to hold back any of your settlement award.

Q: How much do I owe?

A: While liens are negotiated and resolved on a case-by-case basis, the LRA will be requesting that the states agree that the final amounts not exceed a certain percentage of any individual claimant’s gross recovery. 

Q: Should I contact the Medicare or Medicaid office to expedite the process?

A: No. You do not need to contact anyone. Any agency contacted by someone outside the LRA will result in duplicate files being created at the respective agency and may delay resolution of the Claimants liens.

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                Better Way 2 Move, one of many DBAs (“doing business as,” i.e., a fictitious business name) of CHS Transportation Inc., quoted $252 to Mike Applegate to move him from Folsom to Rancho Cordova, a move just over 10 miles down the US 50. Once the movers had loaded his possessions into their truck, they ratcheted up the price by nearly eight times to $1900. This included $1500 for packing material, even though mostly everything had already been packed. The movers demanded to be paid in full in cash. When Mr. Applegate said that he did not have that much in cash on him, the movers took off with all of his possessions. Only after paying in cash sometime later did he have his possessions delivered.

                Mr. Applegate, like others, had been conned by a disreputable mover. Despite having their license revoked and suffering other administrative actions, including being fined and shutting off their phone line, CHS changed their DBA to Stevens Moving and Storage and continued scamming consumers. Those who have taken CHS to small claims court to recoup their losses have found that collecting on judgments against them is nearly impossible.

How can you avoid moving scams like this? It takes a bit of time to prepare yourself, but it can save thousands of dollars and the theft of your precious belongings. There are four main steps, which are explored in more detail in the below sections. First, do some research on potential moving companies. Second, make sure that the moving company doesn’t try to pull a fast one with its estimates or paperwork. Third, supervise the movers to prevent wasteful use of moving supplies or damage to your valuables. Fourth, if the moving company attempts to scam you, be prepared to fight back against them. 

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Today, Bassett Furniture Industries, Inc. of Bassett Virginia (“Bassett”) voluntarily recalled about 90,000 drop-side cribs after reports of 154 incidents of failed hardware.  The U.S. Consumer Product Safety Commission (“CPSC”) reported that “the cribs’ drop-side rail can malfunction, detach or otherwise fail, causing part of the drop-side to detach from the crib.”  When this happens, a space between the drop-side and crib mattress is created and an “infant or toddler’s body can become entrapped in the space, which can lead to strangulation and/or suffocation.”   

According to the CPSC, a child can also fall out of the crib.  Also due to incorrect or confusing directions,  consumers may unknowingly assemble or install the drop-side or drop-side hardware incorrectly.  Drop-side incidents also occur due to age-related wear and tear.  In fact, in May of this year, the CPSC reported 32 infant and toddler suffocation and strangulation deaths caused by or related to drop-side detachments in cribs made by various manufacturers.  Thus far, there are 18 reported incidents  in which Bassett drop-side cribs malfunctioned or detached from the crib.  In one of the incidents, a child became entrapped between the mattress and the drop-side.  In three of the incidents, children fell out of the cribs.  No injuries were reported.

Below are a few illustrative pictures of drop-side cribs from other manufacturers.  

A baby can strangle in the “V” shape when the top portion of the drop side detaches

When the drop side detaches at the bottom, a baby can fall into the
resulting gap and suffocate between the mattress and the side rail
 

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This past weekend the KPA attorneys attended the Consumer Attorneys of California (CAOC) Annual Convention in San Francisco, where they learned about the latest developments in consumer litigation.

The next CAOC event is The Hawaii Travel Seminar in Maui, Hawaii!

There will be a great line up of panels - Shawn Khorrami presents on Wednesday, Dec.1st:  "Creating a Paperless Office" 

For more information , visit the CAOC website.

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KPA attorneys and support staff came together to collect food for the Ocean Park Community Center (OPCC) this year.  We provided all the essentials to make a home-cooked Thanksgiving Dinner for 5 less fortunate families.

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Prescription painkillers Darvon and Darvocet were pulled from the market Friday by their manufacturer, Xanodyne Pharmaceuticals, Inc. According to a report from CNN, Xanodyne reportedly pulled the drugs at the request of the Food and Drug Administration. Darvon is the brand name for the drug propoxyphene, and Darvocet is a brand name for propoxyphene mixed with acetaminophen.  Darvon and Darvocet have been approved for use since 1957, but officials at the FDA now believe the risks of using the drugs outweigh the benefits. The medications, which have been prescribed for 10 million people since 2009, can cause serious heart rhythm abnormalities that could potentially be fatal. Generic forms of the drugs are still available, but the FDA has asked manufacturers to stop selling them and recommended that physicians stop prescribing them.  

Controversy has surrounded propoxyphene for some time. According to an article in the Washington Post, Britain pulled the drug off the market six years ago, and Europe pulled it more than a year ago. Public Citizen’s Health Research Group has been calling for the U.S. to remove the drug for some time. In a statement issued on Friday, the group said that 1,000 to 2,000 people in the United States have died because of the drug since the United Kingdom banned it.

Patients have been advised not to stop taking it, but instead contact their doctors. Some have pointed out that stopping abruptly can cause withdrawal symptoms. For those that need to take painkillers, there are still plenty of other options out there. Consult your doctor on which one is right for you.

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For anyone whose life has been ruined by alcoholism, the chance to turn everything around with a shot in the arm must be appealing. Get an injection from your doctor and instantly repair every personal relationship that was destroyed by the disease. The appeal of such easy redemption is obvious, but it is also obviously a fantasy. The FDA has told one drug company that it cannot advertise that fantasy. Earlier this month, the Food and Drug Administration sent a warning letter to Alkermes, Inc., the makers of the alcohol-dependency drug Vivitrol. The drug is designed to decrease cravings for alcohol, but Alkermes has been advertising that it can do much more. The letter advised Alkermes that it had to stop distributing a DVD shown to potential Vivitrol users and a patient brochure because of exaggerated claims of efficacy. The DVD featured testimonials in which Vivitrol users said things such as this, from “Tina S.”:

“The money was going towards alcohol and not the kids. . . .  With the drinking, DSS got involved. . . . Julie at the clinic, she suggested Vivitrol. . . .  Since I’ve been on the shot. . . .  I feel better about myself now that I’m sober.  I’ve got a little bit more respect from the kids and that I feel like a mother now. Physically I’m in better shape than I was. . . . Couldn’t even crawl out of bed and now I’m back to work. . . .  My life has changed so much in the past year.  I’ve gotten remarried.  We’re working on the house and everything’s going pretty good.”

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In a previous article for the KPA newsletter, I wrote about the Third District’s decision in Kirby v. Immoos Fire Protection, Inc., 186 Cal. App. 4th 1361 (2010) and its implications on plaintiffs including meal and rest break claims in misclassification cases.  Today, the California Supreme Court granted review of the Kirby decision.

In Kirby, the court upheld a fee award in favor of an employer who successfully defended a rest period claim, concluding that meal and rest period claims were governed by Labor Code section 218.5’s two-way fee shifting provisions, rather than the one-way fee shifting of Section 1194.

As Matt Bailey discussed in a post today on the Bailey Dailey, this holding poses a significant issue, as two-way fee shifting would severely chill private enforcement of an employee’s statutory right to recover meal and rest period premium wages. The thrust of the argument in opposition to the court’s ruling in Kirby is that Section 226.7 premium wages should be governed by Section 1194, not only because Section 226.7 proscribes a statutorily mandated wage, but also because the California Supreme Court concluded in Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094 (2007) that meal and rest break premium pay is itself a form of overtime compensation.

According to the California Supreme Court’s website, the issues on review are as follows:

(1) Does Labor Code section 1194 apply to a cause of action alleging meal and rest period violations (Lab. Code, 226.7) or may attorney's fees be awarded under Labor Code section 218.5, (2) Is our analysis affected by whether the claims for meal and rest periods are brought alone or are accompanied by claims for minimum wage and overtime?
 

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On November 17, 2010, the U.S. Food and Drug Administration issued Warning Letters to four makers of caffeinated alcoholic beverages advising them that, following a scientific review by the Agency, the FDA concludes that there is no support for the claim that the addition of caffeine to the identified alcoholic beverages is “generally recognized as safe”. To the contrary, the FDA found that the combination of alcohol and caffeine in these drinks poses a public health concern because the beverages can mask the effects of alcohol leaving the drinker unaware of how intoxicated they are. CNN Reports that critics of the drinks, nicknamed “blackout in a can”, note that the drink producers target young drinkers who may not be aware of the high alcohol volume with a single 23.5 ounce can of Four Loko containing a potent mix of caffeine equal to three cups of coffee and alcohol equal to three cans of beer.  The caffeine makes “wide awake drunks” but wears off quicker than the alcohol leading to blackouts.

According to the FDA’s press release, the drinks affected are: “Four Loko”, “Joose”, “Max” “Core High Gravity HG”, “Core High Gravity HG Orange”, “Lemon Lime Core Spiked”, and “Moonshot”. The FDA views the November 16 announcement of Fusion Projects, LLC, the maker of Four Loko, of its intent to remove caffeine and other stimulants from its drink as a “positive step”. The Warning Letters request that the recipients inform the FDA, in writing, within 15 days of the specific steps that will be taken to remedy the violation and prevent a recurrence. If the FDA is not appeased, it could seize the products or seek an injunction preventing the firms from continuing to produce the products in their current forms. The FDA has also prepared “Questions and Answers” that provides greater information about its findings and actions.

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Hot on the heels of an earlier blog which reported that postmenopausal women who take a combination of estrogen and progestin therapy face a greater risk for developing a more advanced form of breast cancer and an increased risk of death comes news that a new European study reports that women on post-menopausal hormone therapy had a 29 per cent greater risk of ovarian cancer, compared with those that did not use hormones. 

Investigators led by Konstantinos Tsilidis, a cancer epidemiologist at the University of Oxford in England, and funded by The International Agency for Research on Cancer (IARC), tracked data on 126,920 postmenopausal women who did not have a history of cancer and did not have their ovaries removed. After nine years of follow-up, 424 ovarian cancers had been diagnosed. 

Hormone therapy in the form of estrogen alone or in combination with progestin has been linked with many forms of cancer. It is important to note that when deciding whether to use hormone therapy, the American Cancer Society advises women to consider the following factors:  (1) The risk of breast, endometrial, ovarian and lung cancer; (2) The risk of other serious conditions affected by HRT . . . . like heart disease, stroke, and serious blood clots (DVT or deep vein thrombosis); and (3) Other medicines that may be used to treat menopausal symptoms or osteoporosis. 

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This answer seems obvious, right?  Well for many, believe it or not, it is not so obvious. Whenever there are people desperate to make an honest buck there are an equivalent ratio of people desperate to make a dishonest buck off the people desperate to make an honest buck. And if you cannot follow that logic, well than follow this.  

Picture yourself unemployed in a downturn economy.  The California unemployment rate is around 12%.  You have applied for numerous jobs and you cannot even seem to get an interview.  By this time you have been unemployed for three months, you're frustrated, and bill collectors are coming after you left and right.  

One day while perusing some on-line help wanted ads you notice a news article with a story about a mom making $6,705/month or even better, $379/day working at home.  Wow, what a dream come true that would be!  Though, since it seems too good to be true, you're skeptical.  Lucky for you, this  "news" source already investigated and says it works!!  

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The CAOC 49th Annual Convention is being held this week, November 18-21, at the Fairmont Hotel in San Francisco.  This is a great event to meet other CAOC members, hear presentations from top attorneys in the industry and attend spectacular events.

Shawn Khorrami will be presenting during the Building your practice by Building Ethical Relationships session. KPA will also be sponsoring the Presiden'ts Club Legislative Reception on Friday.

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The latest trial dealing with the drug Fosamax is highlighting some of the risks of medications designed to treat osteoporosis. The New York Times reported on November 10, that the latest trial involving a plaintiff allegedly injured by the pharmaceutical drug Fosamax is underway in New York City. The plaintiff in the latest case is Judith Graves, a 67-year-old retired investigator for the United States Army. After taking Fosamax, Graves suffered jawbone death, a condition that involves debilitating jawbone deterioration. She had to have five operations, eventually having her jaw replaced with bone from her left arm.

Graves says Fosamax is to blame for her jaw troubles. Fosamax is an oral bisphosphonate manufactured by Merck. The drug is designed to prevent bone mass deterioration caused by aging. Graves’s case is one of several test cases against Merck that is being tried. There are roughly 1,400 other cases against Merck alleging injuries caused by Fosamax. Two test cases have already been tried, with Merck winning one and the plaintiff winning a multimillion dollar judgment in the other. We have filed cases on behalf of people injured by the drug. 

It is unclear how the Graves case will turn out, but as the New York Times reports, the case is serving as a backdrop for a larger debate about the proper use of oral bisphosphonates. Although the drugs have been shown to be effective in reducing bone fractures in postmenopausal women with osteoporosis, many doctors are concerned about the risks of prescribing them for too long. The Food and Drug Administration now requires the labels on Fosamax, Actonel, Boniva, Reclast, Atelvia, and generic versions, to state that the optimal period of use of these drugs is unknown. The fear is that long-term use of the drugs could cause not only jawbone deterioration but also thigh fractures. And for many these risks outweigh the benefits of prescribing the drug to women who have not yet developed osteoporosis. Others have commented on the dilemma this poses for doctors.

This trial underscores how important it is for patients on oral bisphosphonates to discuss the risks of these drugs with their doctors. Although they have saved people from the aggravation of broken bones, they carry considerable risks as well.

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How far would you go for beauty? Would you inject yourself with a botulism toxin (botox) or how about slathering your head with formaldehyde? On October 29^th the Oregon OSHA confirmed that the formaldehyde levels in the Brazilian Blowout product are below OSHA’s action level, Permissible Exposure Level, and Short Term Exposure Level .  This is despite the company having claimed and still claiming on their website that their product CONTAINS NO FORMALDEHYDE!! .

Personally, I am completely torn. I have actually used the Brazilian Blowout treatment and love it.   What I don’t love is the fact that the company marketed it as safe and formaldehyde free when it is not.  Even as recently as September, the president of the company gave an interview to California Watch where he stated that he provided samples to OSHA and expected that there be no formaldehyde and even suggested that the products sold on EBAY or by others are tampered with.  

Apparently, Attorney General Jerry Brown did not love that either.  His office filed a suit yesterday for the unfair advantage the Brazilian Blowout company received by selling their product on false claims of safety and for violations of Proposition 65.   Claims have also been filed on behalf of consumers and hair stylists who claim they would not have purchased the product had they known it was not as safe as the company claimed and want to be reimbursed. In the meantime, the company is vehemently backing the safety of their product, although I don’t really see how they can continue to claim that it is formaldehyde free.   Putting aside the misleading marketing of the product, is it safe? For my own personal reasons, I really hope so.

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FDA Failing to Monitor Safety of Medical Devices - The U.S. Food and Drug Administration (FDA) is not doing its job of properly monitoring the safety of medical devices, the authors of a new report charges. HealthDay News, Nov.2nd.

Genentech Offers Secret Rebates to Promote Lucentis - Genentech has begun offering secret rebates to eye doctors as an apparent inducement to get them to use more of the company’s expensive drug Lucentis rather than a less costly alternative. - New York Times, Nov 3rd.

Watchdog Says FDA Risked Integrity - Congress's watchdog arm has criticized the Food and Drug Administration for creating the appearance of favoritism toward a Boston company that won lucrative first rights to sell a generic drug after providing free consulting work to the agency. Wall Street Journal, Nov. 8th.

Stage Set for Showdown on Online Privacy - Privacy advocates are pushing for a “do not track” feature that would let Internet users tell Web sites to stop surreptitiously tracking their online habits and collecting clues about age, salary, health, location and leisure activities. New York Times, Nov. 9th.

Club Car Recalls Golf Cars and Hospitality, Utility and Transport Vehicles - The brake pedal can crack and separate, resulting in a loss of braking ability. Kansas City Info Zine, Nov. 9th.

J&J in Talks to Resolve US Probe of Risperdal Marketing - Johnson & Johnson said it's in discussions with the government to resolve a long-running investigation of whether it improperly marketed the antipsychotic Risperdal. Fox Business News, Nov.10th

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Why would a seemingly innocuous 1994 lawsuit involving a 79 year-old woman who sued the defendant manufacturer for third-degree burns incurred as a result of a defective product have more Google hits than Marbury v. Madison, the landmark decision from the United States Supreme Court establishing the principle of judicial review?  Perhaps if I told you a New Mexico jury awarded Stella Liebeck $2.86 million and the case is better known as the McDonald’s Coffee Lawsuit it will become clear.  Even though the trial court reduced the award to $640,000.00 and the case was resolved through a confidential settlement, Stella Liebeck became the poster-child for frivolous litigation and spawned the tort reform movement.   The case has become the subject of much debate and numerous blogs, both pro and anti tort-reform. 

Fast forward to 1998 when a 76 year-old Manhattan, New York, lady suffers burns to her left leg and foot requiring skin grafts and reconstructive surgery.   Rachel Moltner sued Starbucks because the tea was too hot and Starbucks practice of serving the tea in a double cup – one cup inside the other – was a defective design.  Ms. Moltner alleged she should have been warned the tea could spill and injure her.  The trial court ruled in favor of Starbucks and this past week the 2^nd United States Circuit Court of Appeals upheld the lower court’s dismissal of the lawsuit.  What can we determine from these verdicts?   Does Starbucks hire better lawyers than McDonalds?   Are New Mexico jurors more sympathetic than New York jurors?  Or, has the tort reform debate created an environment where jurors are more skeptical of plaintiff claims?

The answers to the first two questions are of no great importance because the “McDonald’s Coffee Case” was a true anomaly.  The vast majority of these type of lawsuits result in defense verdicts like Starbucks, or are dismissed prior to trial.  What should be of more concern is that many years ago the hysteria over a spilled cup of coffee grew into a movement that impacts the rights today of every citizen that has a legitimate claim.  Large corporations that continue to produce defective products can rest easy knowing that their public relations departments  just received a windfall.  The Starbucks case will be used as an example of how the ‘system’ works and how tort reform is successful.   Your choice of beverage may not impact your life to any great extent, but the type of car you drive, the medical device implanted in your body, and the drugs your doctors prescribe all can have dire consequences.   Access to the courts for every citizen that has a legitimate claim is vital to our society and must be preserved in the face of hysteria.                

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A recent New York Times article profiling Kaplan University adds insight into the growing scrutiny facing for-profit universities.  Last year a Government Accountability Office report on for-profit universities found two Kaplan University campuses were engaging in fraudulent recruiting and marketing practices.

Now, as the article sets forth, several whistle blowers are coming out and shedding further light on the University's practices.  What is portrayed is an example of a education provider that cares more about dollars and less about making good sense.  As troubles for their students grow, CEOs of these multi-billionaire corporations are breaking the bank.  In fact, as bloomberg.com recently reported, CEOs from the top 15 for-profit universities have collected a combined $2 billion over the last seven years from selling their stock alone. 

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On November 9^th the business-friendly Roberts Court heard oral argument on the pivotal issue of whether the Federal Arbitration Act of 1925 preempts a state court’s ability to strike down a contractual class action ban. If the Court ultimately rules in AT&T’s favor, corporations will have the right to contractually prohibit consumers from pursuing class action relief. Meaning that, as confounding as it may sound, the next time you are presented with pages of endless fine print in connection with a purchase or service agreement, you could be unwittingly signing away certain legal rights, and be doing so as part of a perfectly legal transaction.

The case at issue, Concepcion v. AT&T Mobility, LLC was initially brought as a straightforward class action claim by a husband and wife who signed a contract with AT&T for wireless service under the guise that the contract would include two “free” cell phones, which in reality came with a litany of undisclosed service charges amounting to roughly $30. However, the seemingly simple case took on new and far more significant meaning when the U.S. District Court for the Southern District of California declined to dismiss the case on the grounds proffered by AT&T- that the Concepcions, in signing a fine print laden contract for their wireless service, had agreed to pursue arbitration and forego class action litigation in the event of a legal dispute.

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On Christmas Day 2009, Umar Farouk Abdulmutallab boarded Northwest Airlines Flight 253 bound for Detroit from Amsterdam. He planned to detonate plastic explosives hidden in his underwear, but the explosives failed to detonate, and Abdulmutallab was subdued by other passengers and the crew. Numerous red flags should have prevented Abdulmutallab from boarding a commercial airplane, but he was nearly able to kill the 289 people aboard that flight. The lasting legacy of the Underwear Bomber is not a total revamp of Transportation Security Administration (TSA) procedures or the disciplining of numerous people who allowed this situation to occur—it is the widespread adoption of the full-body scanner at airports. Due to the possible health concerns and serious privacy invasion by these scanners, many people have objected to their use.

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On November 9, 2010, the United States Supreme Court will hear arguments in AT&T Mobility v Conception. The court will decide whether The Federal Arbitration Act preempts state courts from striking down class action bans in arbitration agreements. Large corporations, such as AT&T, frequently insert in their boilerplate customer agreements, often in fine print, provisions requiring that any dispute arising from the agreement be arbitrated and brought on behalf the individual consumer alone and not as a class action on behalf of other similarly impacted consumers. These big companies know that the amount of a single consumer’s dispute is often less than a couple hundred dollars, that consumers have little time and incentive to litigate their single small claim and no attorney would represent them with such a small amount in dispute. For example, the Concepcions sued AT&T claiming that AT&T represented that that their wireless service included free cellphones but the phones actually came with charges.

The only effective way to recoup small amounts of money owed to many consumers by a corporate wrongdoer is by grouping the claims as a class action. Class actions are the only “big stick” consumers have to fight large corporations and the threat of them deters corporate wrongdoing. Not surprisingly, corporations desperately want to halt class actions. California’s Supreme Court has ruled that class action bans in consumer agreements are unconscionable and unenforceable and the trial court and United States Ninth Circuit Court of Appeals in the Conception’s federal court case ruled similarly. Now the issue is before the United States Supreme Court, known to be conservative and pro-business.

An article by David Lazarus in the November 5, 2010 Los Angeles Times summarizes the issues raise by the case in plain English. SCOTUSblog has a link to all of the briefs. Look for future blogs here on this important case affecting consumer rights. 

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Have you ever wondered if your doctor has ulterior motives in prescribing you a certain medication? Now you have a way of finding out if your doctor is being paid to promote certain drugs. 

Last month ProPublica launched its Dollars for Docs database, which compiles data about payments pharmaceutical companies have made to doctors for promoting their drugs. According to ProPublica, pharmaceutical companies routinely pay doctors to give presentations designed to teach other doctors about the benefits and risks of their drugs. In 2009, seven drug companies began disclosing information about these payments. ProPublica compiled this data, which totals $258 million in payments, into a searchable database. 

The website has also launched a series of articles analyzing the information in the database. They have already posted stories on paid presenters that have blemished records and limited credentials, and a breakdown of which doctors have received the most money from the pharmaceutical companies in the last couple of years. Although the database only covers payments made by a fraction of the total number of pharmaceutical companies, it still sheds some light on the process by which doctors learn about drugs and decide which ones to prescribe. It is also a way for patients to find out if their doctor may have a conflict of interest when it comes to writing certain prescriptions. As the ProPublica site points out, there is not necessarily anything wrong with doctors being paid to promote certain drugs, but it does raise ethical questions. The website has also posted a guide for patients on how to use the database, and what it means if their doctor has received money.

The database already has some calling for increased transparency in the world of pharmaceutical drug promotion.

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Increasingly, defense lawyers seeking information about plaintiffs are looking at information on social networking sites such as Facebook and MySpace as part of their investigation.  Sometimes, these lawyers are able to obtain information about plaintiffs through information which is available for public viewing.  However, a plaintiff adjusting her privacy settings to prevent public access may not be enough.

In a number of cases, defendants have sought, and the courts have permitted, discovery of information on social networking sites.  Most recently, in Romano v. Steelcase Inc., et al., a New York state trial court granted defendant access to plaintiff’s current and historical Facebook and MySpace pages (including deleted pages). 

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We've all seen the advertising - lose weight in a manner of weeks by just taking pills or supplements.  Weight loss pills and supplements are multi-million dollar industries, so many of us have gotten sucked into these campaigns in the hope they may work.  But, as the addage goes, if it's too good to be true, it probably is.  Most over the counter diet pills do not work, and the Federal Trade Commission even launched a campaign to stop these manufacturers from making "bogus claims." 

Leptopril is an example of a diet product that promises weight loss within a manner of weeks. In its advertising, Leptopril claims that it will cause weight loss by keeping excess sugar out of the blood and preventing fat formation.  Many bloggers have denounced these claims.  See here, here, and here.  Khorrami, Pollard & Abir, LLP filed suit against the makers of Leptopril on behalf of a consumer who took the product but did not experience any weight loss. 

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Most of us could not get through the day without our favorite caffeine-laden drink. The long history and widespread use of caffeine make us trust both its safety and effectiveness. For one British man, however, an overdose of pure caffeine was fatal. Pure caffeine, available in a wide range of forms, is widely available online and lightly regulated. The most common use of pure caffeine is as a beverage additive. Energy drinks have been found to contain up to 141mg of caffeine per serving, although the naturally occurring caffeine in a large coffee can be more than double that.  Sodas fall in the range of 20-55mg of caffeine. None of these products warn of the possible side effects of consuming excessive amounts of caffeine. This is not much of a problem for products with relatively low doses of caffeine, such as soft drinks, but the lack of warnings on containers of pure caffeine is disturbing.

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 Earlier this week a class action lawsuit was filed on behalf of Iphone users.  The complaint alleges that Apple purposefully put a firmware upgrade on the market, version iOS4, that was intended to decrease the functionality of the older model Iphones, the 3G and the 3GS.   Further supporting the Iphone owners’ claims is that Apple allegedly refuses to allow users to downgrade back to their old software and reinstall the outdated, but faster running, iOS 3.x firmware.  

 The lawsuit is interesting for the fact that with the new Iphone 4 on the market, owners of the old 3G/3GS models may be being swindled into purchasing a new, faster Iphone that would otherwise not seem worth it.  This notion, when coupled with the new deals being offered on the market providing store credit to purchase new Iphone 4s in exchange for old iphones, seems to present the framework for some sort of Iphone conspiracy. 

As an Iphone 3G owner myself, I have all along just figured that as my Iphone got older, naturally it would run more slowly.  But maybe, as this lawsuit alleges, it should run just like new if it were not for Apple’s firmware “upgrades”.  

What do you think?  Does your Iphone not run like it used to?  Is the latest firmware upgrade to blame?

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The other day I found a few articles discussing a number of lawsuits brought against doctors who prescribe deadly drug cocktails to treat Fibromyalgia (a little understood disorder characterized by pain, stiffness, fatigue and depression).  What has become known as an aggressive and “erratic, experimental and heavy drug cocktail treatment,” including prescriptions for oxymorphone, oxycodone, and notriptyline, has caused patients to near states of sedation for years. Marriages have collapsed under such treatment and patient employment has suffered. Some patients have even lost their lives to overdose.

The cases generally claim negligence, poor record keeping, and lack of oversight.  Doctors are simply failing to give proper instructions for use of prescriptions—often advising patients to manage their own medications and to adjust dosages to see what drug combinations work best. Doctors are failing to adequately monitor their patients. They overmedicate and mismanage patients’ prescriptions and medical records. But worst of all, doctors ignore overmedicated and addicted patient behavior leaving their patients vulnerable and without hope.

Deadly drug cocktails are not specific to patients suffering from Fibromyalgia. There are many other articles discussing deadly drug cocktails. Our soldiers, for example, die upon their return from war after being treated with drugs like Paxil and Seroquel for post-traumatic stress disorder. Deadly prescription combinations are triggered by the desire for weight loss as well. Celebrities are at risk too. Recall, Michael Jackson, who may have died from a combination of painkillers, including Demerol, Dilaudid, Vicodin, Soma, Xanax, Paxil and/or Prilosec and Anna Nicole Smith who died while taking numerous overlapping medications.  

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Is there a conflict of interest when a doctor testing a medical device manufacturer's products before they are approved by the FDA has received compensation from the manufacturer? Does it depend on the type of payment involved? Senator Charles Grassley wants the FDA to explore this issue. On November 1, Propublica reported that Senator Grassley, R-Iowa, has asked the Food and Drug Administration to outline the circumstances in which such payments could present “too significant a conflict” for a physician to be involved in clinical studies of a medical device. 

Just like drugs, medical devices have to be tested in clinical trials before they are approved by the FDA for use. These studies may be carried out by doctors who have been paid by the company that developed the product for speaking, consulting, or conducting research.  According to a letter he wrote to the FDA, Senator Grassley is concerned that such payments create a conflict of interest for the doctor. His concerns apparently stem from disclosures by medical device manufacturer Medtronic about compensation paid to its consultants and clinical investigators. 

According to the Propublica report, Medtronic reported that it had paid individual physicians consulting payments ranging from $40,000 to $2 million. Other physicians received royalties, while one received Medtronic stock. Medtronic also disclosed information about more than 50 clinical investigators. Nearly all of these investigators received payments from Medtronic, while two of them reported having a “proprietary interest in the product tested and a financial arrangement where the value of compensation could be influenced by the outcome of the study.“ Medtronic insists that it is paying physicians fair market value for their work and that the company is committed to transparency. 

Increased guidance on what exactly constitutes a conflict of interest would seem to be welcome. It certainly seems like it would be hard for a doctor to impartially conduct a study when he knows that the company paying him wants a certain result. And even harder to be impartial when the physician himself benefits from a certain result.

In related Medtronic news, the company’s recall of a tissue stabilizing device has been classified as a Class I recall by the FDA. A recall is classified as Class I when there is a “reasonable probability” that use of the product will “cause serious adverse consequences or death.” 

The company initially recalled the Octopus Nuvo Tissue Stabilizer on September 14, 2010. The device is used to stabilize the heart during cardiac procedures. The recall was due to the potential that a component of the device could fracture during use, causing fragments to fall into the patient’s chest cavity and damage the heart tissue. Prior to the recall, the company received two reports that the device had fractured during use, but neither event resulted in permanent injury or death. Medtronic is working on retrieving the 571 devices that have been distributed to medical facilities worldwide. 

Although it is lucky no one was injured by these malfunctions, some have pointed out that this kind of problem only makes a heart surgeon’s job harder. The last thing a doctor needs during a complex procedure is to worry about his equipment malfunctioning. 

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Ever wonder how to get rid of that pesky crying and laughing that was wearing out your facial muscles? Well you don’t need to wonder anymore, Avanir Pharmaceuticals has  developed a drug that was approved by the FDA on October 29, 2010 that will treat that condition.   Hopefully the sarcasm is obvious.

The drug is called Nuedexta and it will be used to treat patients who develop symptoms known as the pseudobulbar effect, which can usually be found in patients with neurological disorders and brain injuries.  The pseudobulbar effect has been called emotional incontinence where one has no control over laughter or tears. Sounds like a fake problem , well Avanir thought so and they unsuccessfully tried to change the name of the condition to involuntary emotional expression disorder.  

Not to take anything away from patients who suffer from something like this but when did it become the norm to treat “conditions” that are essentially harmless and out of one’s control. I mean, this drug is going to be marketed to people with serious underlying medical conditions to treat an uncontrollable action that poses no serious health risks.  Besides being driven by the profits that could be made from targeting this population, what other incentive would the pharmaceutical company have? I understand that uncontrollable crying or laughter may have an impact on ones social life or lead to embarrassment but is that outweighed by the known cardiac and hepatitis risks associated with taking the drug?

I previously wrote about the “condition”  that women go through and how pharmaceutical companies have found a way to help cure us. This too reminds me of how big pharma will find a way to help us deal with all of the “conditions” we may go through or “suffer” from in life. Is uncontrollable laughing a serious health risk, not really, but how about if there is a medication out there to treat it? Then people start looking at it as more than just an inconvenience, and now it is a condition that can be treated.  Perhaps one day prescriptions will only be used to treat serious ailments or at least provide measurable health benefits to the users……but I wouldn’t hold my breath.

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The Today Show recently launched an investigation of the popular product “Your Baby Can Read”, a system of flashcards, DVDs and pop-up books which boasts that it can teach children as young as two or three to read. The product, which retails for $100-$200, is available everywhere from the manufacturer’s own website to retail chains such as Best Buy and Bed, Bath & Beyond.

As part of its investigation, Today Show staff enlisted the help of child development experts from some of the nation’s most prestigious universities to assist in determining whether children who had used the product were actually able to read. The experts unanimously found that the babies or toddlers touted as being able to read had merely memorized the cue cards repetitively presented to them through the “program”. One expert, Dr. Maryanne Wolf, Direction of Neuroscience at Tufts University went so far as to call the product’s marketing “an extraordinary manipulation of facts”. The findings of Dr. Wolf and her fellow child development experts are premised on the scientific truth that while young children can recognize or memorize certain words with repetitive exposure, the brains of infants and toddlers are just not developed enough to “read” at the level that enticing television ads might suggest.

Dr. Robert Titzer, the product’s creator, maintains that the 10 experts enlisted by the Today Show are all simply “wrong” and insists that his product and its claims are backed up by scientific research. However, when asked by Today Show investigators to produce the scientific data, he provided only customer satisfaction surveys and general studies related to child learning.

While Dr. Titzer, whose PhD is in the unrelated field of human performance (motor skills), won't disclose specific details as to how much profit the product has generated, the company claims to have sold more than a million kits. Though the popularity of “Your Baby Can Read” is undisputed, the same cannot be said for its efficacy and we invite you to share with us your personal experiences with the product.
 

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According to an article in the New York Times, a recent study indicates the not only has the rate of click fraud risen dramatically over the last year, it is taking on new forms which make it more difficult to detect.

Click fraud is a type if Internet crime that occurs in pay per click online advertising when a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target of the ad's link.  As a result, advertisers end up paying for fraudulent clicks on their ads.

According to summary findings recently released by on-line ad-tracking firm Click Forensics, over the last year, the level of fraudulent clicks on legitimate advertisements reached the highest rate since 2006.  Additionally, according to the firm's chief executive, the firm is starting to see fraudulent clicks routed through mobile devices, like wireless Internet cards.  Such clicks are harder to detect than those coming from wired computers because the wireless card case effectively disguises the origin, lumping them in with legitimate mobile users under a single originating address.

KPA was previously involved in class actions against Google and Yahoo related to click fraud alleging Google and Yahoo did not do enough to prevent click fraud.  These class actions resulted in settlements benefitting advertisers who paid for fraudulent clicks.

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 In a recent class action suit filed in California, Skechers, a shoe company headquartered in nearby Manhattan Beach, California, is facing allegations of misleading consumers with its Skechers Shape-Ups brand shoe and attached marketing campaign.   Skechers touts clinical trials and testimonials in supporting its claims that wearing Shapes-Ups can improve posture, tone and firm muscles, and burn more calories than normal tennis shoes.  Are these allegations true?  Depends who you ask.  

Naturally, Skechers has adamantly denied the allegations in the complaint, calling the lawsuit inasmuch as frivolous, while pointing to its own studies and numerous customer testimonials. However, recently, the American Council on Exercise (“ACE”) released a study testing the effectiveness of Shape-Ups and similar training shoes on the markets.  The results were unanimous.  The report concludes, “[A]cross the board…  There is simply no evidence to support the claims that these shoes will help wearers exercise more intensely, burn more calories or improve muscle strength and tone.”  However, that doesn’t mean Shape-ups wearers aren’t losing additional weight, as the ACE’s Chief Science Officers points out, “These shoes may be encouraging a fair number of people who probably wouldn’t put on a normal pair of walking shoes and go out for a walk, to do so because they think they’re getting some super toning effect.” 

The opinions (see comments) of Shape-Ups wearers varies.  While some consumers swear the shoes work as advertised, others are claiming sore calves, knees, or hips without the desired results.  Is the former group merely showing the reactions of a placebo effect in reliance on Skechers marketing campaign?  Or perhaps is the latter group simply not using the shoes as advertised?  With Skechers public vigilance thus far in defending the suit it appears eventually we will find out.  Until then, “shape up” at your own risk. 

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Debt collectors in a bad economy sink to new lows and adopt new strategies to secure payment from cash-strapped debtors.  In a recent lawsuit filed in Erie Pennsylvania, the Attorney General’s Office accused Unicredit America, Inc. (also known as the Unicredit Debt Resolution Center) of using “deceptive tactics to mislead, confuse or coerce consumers,” including holding hearings for debtors in a mock courtroom located at their Erie office. According to the state, the “courtroom” was convincingly realistic, complete with a raised area where a judge would sit, attorneys tables, a simulated witness stand and legal books on bookshelves. A person dressed in all black would sometimes even sit in the position of judge. These pseudo-official proceedings often intimidated unknowing consumers into signing payment agreements, making on the spot payments and in some circumstances surrendering other assets in resolution of their debt.

In a recent statement, Attorney General Tom Corbett said, “This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection.” “Consumers also allegedly received dubious ‘hearing notices’ and letters – often hand delivered by individuals who appear to be Sherriff Deputies – which implied they would be taken into custody by the Sherriff if they failed to appear at the phony court for ‘hearings’ or ‘depositions’.”

Given the unlawful intimidation tactics debt collectors are now resorting to, it is important for consumers to know that there are strict rules in place controlling the parameters of debt collection. The Federal Trade Commission provides a FAQ outlining consumer rights in these circumstances.   

Attorney General Tom Corbett has petitioned Eerie County for a preliminary injunction halting these phony hearings and depositions and seeking to freeze Unicredit’s assets. The Court is expected to hold a hearing related to the preliminary injunction this Tuesday.

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18 lots of Fentanyl Transdermal System 25-mcg/hour C-II patches are being recalled from store and pharmacy shelves because lab tests showed the active ingredient in one batch of patches was releasing medication into the bloodstream faster than the approved specifications permit. 

Fentanyl patches are a popular type of treatment for the management of moderate to severe chronic pain. The patches release a steady and controlled stream of opiod fentanyl through the skin. Release of this ingredient at an increased speed can lead to a variety of problems including breathing and respiratory issues, increased sedation, hypoventilation and apnea. Actavis Inc., the manufacturer of the drug, however, says it is not aware of any injuries linked to this issue. 

The recalled patches were manufactured in Grand Rapids, Michigan by Corium International, the same company that manufactured fentanyl patches for Actavis that were recalled in 2008 because of a leakage problem which had the dangerous potential of leading to an overdose.

The patches included in the recall have expiration dates varying from December 2011 to April 2012. While the safety alerts by the Food and Drug Administration and Actavis are targeting retailers and wholesalers, they are not telling consumers themselves to dispose of the patches they already have in their medicine cabinet.

The American Pain Foundation does not agree with this message and is taking measures into its own hands. The company has sent out email alerts to all its members and is willing to help consumers obtain replacement patches.   

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Pfizer, Inc. has issued the third of a string of recalls for Lipitor. As with the first and second recalls of the common cholesterol reducing drug, the instant recall is due to reports of an unpleasant odor related to the bottles in which the drug is packaged.  The company has identified the chemical 2,4,6-tribromoanisole, commonly used to treat wood pallets used to store and ship bottles, as the cause of the odor.   It is the same chemical which Pfizer’s competitor, Johnson & Johnson, attributed its recalls to earlier this year.

The instant recall affects 38,000 bottles containing 40mg tablets, bringing the total of recalled bottles of Lipitor to an estimated 360,000. 

Although the company claims that the chemical is not likely to cause adverse health consequences, the astounding number of recalls, including those related to household names, Tylenol and Benadryl, should make consumers  more aware of the potential harms of these commonly prescribed and over the counter drugs.  It is unclear if additional recalls will be issued, but in the meantime, be cautious of any foul odors or unusual qualities in any drug you take.

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