Zofran Multidistrict Litigation Allowed to Proceed Despite Motion to Dismiss

belly of pregnant woman and vitamin pills in the hand

Amid increased warnings that the anti-nausea drug Zofran may be linked to serious birth defects when used during pregnancy, a federal panel last year created a special multidistrict litigation docket for victims to use as an avenue for compensation from the drug’s maker, GlaxoSmithKline (GSK).

With hundreds of lawsuits already filed, GSK filed a request last month to have the lawsuits against it thrown out of court before families even had a chance to prove their case. The federal judge overseeing the Zofran birth defect lawsuits denied GSK’s attempts to keep the cases out of court as premature at best.

Loath to Dismiss

GSK had argued the families’ state law claims were preempted by federal law under the U.S. Supreme Court decision in Wyeth v. Levine, which held that federal regulatory clearance of a medication does not shield the manufacturer from liability under state law. U.S. District Judge F. Dennis Saylor IV said that he was “loath to dismiss” the claims without giving the families the chance to develop the facts of their respective cases through discovery.

Zofran, manufactured by GlaxoSmithKline and first approved by the FDA in 1991, is intended for extreme cases of nausea, such as with cancer medications or following surgery. It was not FDA-approved for use during pregnancy. However, it has increasingly been prescribed to expectant mothers for morning sickness since its initial approval. GSK was fined a record $3 billion in 2012 by the federal government for illegally promoting Zofran for such unapproved purposes. GSK earned more than $1.5 billion per year in sales, and it is evident the $3 billion fine had little overall impact on the pharmaceutical giant.

The families affected by Zofran usage argued on January 6 that because the FDA hasn’t approved Zofran to treat morning sickness, only GSK has control over the relevant evidence of the foreseeable risks of using Zofran while pregnant.

  • Even though parties have not yet initiated discovery, the families said they have reason to believe GSK has evidence about the link between Zofran and alleged birth defects.
  • This includes several animal studies conducted by the pharmaceutical company in Japan after the company launched sales of the drug in the U.S. One of those studies, the families said, revealed the same cardiac birth defect alleged by many of the complaints.

Proceeding With Discovery

In its January motion to dismiss, GSK argued that the FDA’s negative response to a citizen petition requesting that the agency reclassify the pregnancy risk for Zofran demonstrates the FDA had already made a decision about the validity of the Zofran warnings. Judge Saylor disagreed, stating,

“In effect, GSK argues that the court need not consider evidence of how the FDA might have answered a change request, because the petition response itself contains the actual answer. GSK’s position, however, is problematic . . .”

In short, the standard of “clear evidence” involves a fact-based evaluation, so Judge Saylor felt the court should not rule on a motion to dismiss “without giving the plaintiffs some opportunity to develop the facts, whatever those facts may be.”

“If — as plaintiffs allege — GSK was in exclusive possession of information not previously submitted to the FDA indicating the need for a new or strengthened warning, that information would presumably be included in a [change being effected] request,” Judge Saylor said. “That information could not, however, have been submitted by a citizen petition, as no citizen (according to plaintiffs) had access to it.”

Hundreds of families have joined the multidistrict litigation against GSK, and now they all will have the opportunity to proceed with their claims.

The case is In Re: Zofran (Ondansetron) Products Liability Litigation, Case Number 1:15-md-02657, in the U.S. District Court for the District of Massachusetts.

Potential Damage from Data Breach Sufficient for Suit Against Medical Facility

BMC wrote patients saying medical records were "inadvertently made accessible"

BMC wrote that patients medical records were “inadvertently made accessible to the public.”

A Massachusetts Superior Court judge denied Boston Medical Center’s request to dismiss the data breach case, ruling that the risk of potential injury was sufficient to move the case forward.

Former Boston Medical Center (BMC) patients filed suit against BMC, MDF Transcriptions, and its owner Richard J. Fagan, after a letter from the facility described a leak of medical records.

Members of the class alleged seven violations of law including an invasion of privacy, breach of fiduciary duty, and breach of confidentiality. Plaintiffs complaint stated, “what goes on the internet, stays on the internet.”

The former patients requested refunds for paid medical services from BMS as well as damages for the injury the exposure caused.

Was patient information misused?

BMC notified the plaintiff their medical records had been “inadvertently made accessible to the public through an independent medical record transcription service.” BMC also noted in the letter that they had “no reason to believe that [the release] led to misuse of any patient information.”

The court noted that the plaintiffs were still unsure whether their information had been misused or if there was any further disclosure. However, the plaintiffs asked the court to issue an injunction to protect their information from any further exposure.

BMC requested the court to dismiss the claims mainly because the facility believed the plaintiff suffered no injuries, because the records were not accessed or misused by any unauthorized persons, and thus they lacked standing to bring their claim.

Quoting a recent state supreme court decision, Pugsley v. Police Department, “real and immediate” risk of injury can be enough to have standing to bring the claim. 472 Mass. 367 (2015).

Judge Edward Leibensperger in Boston believed at the early stages of case, the plaintiffs had presented enough facts to allow reasonable inferences that their information has been or could have been accessed during the time the data was breached. Additionally, the letter informing of the breach itself is sufficient to state a claim for relief.

This case is Walker and O’Rourke v. Boston Medical Center Corp, Case No. 2015-1733-BLS-1, Massachusetts Superior Court Business Litigation Session.

Thank you to Mintz Levin PC of Boston, MA for providing the opinion for accurate reporting of this story.

NLRB Says Whole Foods Can’t Prevent Employees’ Workplace Recordings

Whole Foods

The National Labor Relations Board (NLRB) ruled that Whole Foods, a nationwide upscale grocery store chain, cannot forbid its employees from recording workplace conversations or taking photos at work without management’s permission. The Whole Foods decision follows another 2015 Board decision [Rio All-Suites Hotel and Casino (Aug. 2015)] in which the Board struck down rules prohibiting employees from using any audio visual recording devices at work.

Read the Handbook

At the center of the case were two stipulations in Whole Foods’ “General Information Guide,” an employee manual that provides work rules. The “Guide” prohibited workers from taking photos or recording conversations inside a store “unless prior approval is received” from a manager or executive, or “unless all parties to the conversation give their consent.”

Whole Foods argued it barred recordings of employee conversations in the workplace to promote “open communication, spontaneous and honest dialogue, and an atmosphere of trust.” Whole Foods argued that recording employee “town-hall,” in-store and other meetings would create a lack of employee candor and prevent overall team harmony. Rather than attempting to inhibit employee rights, Whole Foods reasoned, its rules are meant protect Whole Foods employees and promote a cohesive workplace.

“The purpose of this policy is to eliminate a chilling effect on the expression of views that may exist when one person is concerned that his or her conversation with another is being secretly recorded,” the manual states.

Concerted Actitivy

Whole Foods’ “fostering communication” argument did not interest the NLRB in what all boils down to two words: concerted activity. The Board majority found that recordings and broad rules could hinder workers’ ability to gather evidence, “such as photographing picketing, or recording evidence to be presented in administrative or judicial forums in employment-related matters.”

The Board reasoned that the broad language of the grocery giant’s two handbook rules could reasonably prohibit employees’ use of cameras or recording devices in the workplace for various concerted, protected activities.

The National Labor Relations Board protects the rights of employees to engage in “concerted activity,” which is defined as when two or more employees take action for their mutual aid or protection regarding terms and conditions of employment.

“Our case law supports the proposition that photography and audio and video recording at the workplace are protected under certain circumstances,” the Board said. The fact that employees would, overall, see the prohibitions as a ban on their protected, concerted rights under the NLRA, made the Board’s decision that much easier.

The NLRB’s decision means employers should triple check all work rules restricting audio or visual recordings by employees. If employers continue to maintain these rules, they must clearly state the employer’s legitimate objective. Workplace recordings should be banned only to the extent reasonably necessary to accomplish the employer’s objectives for disallowing workplace recordings.

Identifying specific times or places to which the ban applies instead of promulgating an all-around ban is a best practice. It’s likely the NLRB will look more favorably on rules specifying what cannot be photographed or video or audio recorded.

The case is Whole Foods Market Inc. and United Food and Commercial Workers Local, case number 01-CA-096965, before the National Labor Relations Board.

Consumers Seek Class Action Status for iPhones Disabled by Error 53

Faulty security software on iPhone 6 models led consumers to file a class action complaint against Apple, Inc. The issue left consumers without a phone or any data stored on the device.

Four named plaintiffs allege Apple was negligent in the way their concerns were handled after installing a software update on their new iPhone 6 in 2015.iphone-error-53

The complaint names the issue “Error 53.” Error 53 is the message customers received after their phones crashed.

This message was connected to the Touch ID security sensor on iPhone 6, iPhone 6s, iPhone 6 Plus, and iPhone 6s Plus smartphones.

Apple sends customers unavoidable notifications of device software updates. Once consumers completed the update, and the device began to reload, the phones crashed and displayed the error 53 message.

No Warranty to the Rescue

Once the message appeared the device went into a Recovery Mode similar to a home computer; However, this did not work.  Each time the recovery was complete the message popped up. The complaint refers to this process as an “endless loop. . . that rendered the device useless or “bricked.“

Consumers contacted representatives to have the phones repaired to no avail. Consumers were told by Apple representatives that their disabled phones were not covered under warranty and was a user created problem for having hardware issues fixed at unauthorized repair services.

Some consumers explained that this issue was not with hardware, the issue was with the device’s software codes. Others explained their phones had either not been repaired by a third party service or not repaired at all and the software disabled the phone anyway.

The only option offered by Apple representatives was buy a new phone. Consumers filed several state law claims including negligence, false advertising, and unfair competition.

Although the number of users affected by this issue is unknown, the named plaintiffs are seeking class action status.

This case is Lusson et al. v. Apple, Inc Case No 3:16-cv-00705, California Northern District.

The plaintiffs are respresented by Darrell L. Cochran, Jason P. Amala, Loren A. Cochran, Kevin M. Hastings and Christopher E. Love of Pfau Cochran Vertetis Amala PLLC and Timothy A. Scott of the Law Offices of Timothy A. Scott APC.

NLRB Orders Samsung to Stop Use of Employment Agreement Waiving Right to Sue

DontSignArbitrationAgreementThe National Labor Relations Board has ordered Samsung refrain from coercively interrogating employees and to cease the use of an agreement to arbitrate claims.

The mutual agreement required employees to waive their rights to pursue class or collective actions as a condition of employment.

The ruling comes after an employee started speaking with other employees about her plans to file a lawsuit against Samsung for unpaid wages.

Employee Jorgie Franks asked other employees if they would be interested in joining a lawsuit with her because they worked “too many hours compared to what they were being paid.”  Franks determined that based on the hours she was working and her income, she was being paid minimum wage.

Agreement condition of employment

Frank’s attempt to join other employees in a lawsuit against Samsung went against Samsung’s Mutual Agreement to Arbitrate Claims that required employees, as a condition of their employment, to waive their right to pursue any class or collective actions against Samsung, even through arbitration.

The agreement stated that neither Samsung nor the employee could litigate any action against the other except through individual arbitration.

The NLRB panel affirmed an administrative judge’s finding that Samsung’s practice of having new employees sign a Mutual Agreement to Arbitrate Claims as a condition of employment violated the National Labor Relations Act.

The NLRB ordered Samsung to rescind all mutual agreements and give notice to all employees that it will no longer maintain or enforce the Mutual agreements to Arbitrate claims.

Coercive interrogation

The NLRB also ordered that Samsung stop the practice of coercively interrogating employees about any protected concerted activities after finding that a human resources administrator unlawfully interrogated Franks on two occasion regarding her plans to file a lawsuit against Samsung and her discussion about it with other employees.

The human resource manager called Franks and informed her that other employees “felt very uncomfortable” with her conversation and told her not to talk to other employees about her concerns, and instead contact the human resource manager directly.

After Franks discussed the potential lawsuit with another employee, the human resource manager contacted her again by email asking if anything changed after their prior conversation and asking why she did not follow her request that she not discuss the lawsuit with other employees.

Franks testified that she was “nervous and tried to be vague in her response” and informed the manager that she was uncomfortable further discussing the situation.

Coerced interrogation

The NLRB determined that the human resource manager had interrogated Franks on both occasions, finding that the manager’s interrogation “coerce[d] the employee…so that he or she would feel restrained from exercising rights protected” by the National Labor Relations Act.

The NLRB panel determined that the manager’s conversation and email to Franks were “calculated to elicit a response from Franks” to gain information about her brining a collective action lawsuit.

The NLRB ordered Samsung to cease and desist from interrogating employees or interfering with or restraining employees from exercising their guaranteed right to act with other employees in protected concerted activities.  The Board further ordered Samsung reimburse plaintiff’s attorneys fees and litigation expenses.

The case is Samsung Electronics America Inc. f/k/a Samsung Telecommunications America LLC and Jorgie Franks, case number 12-CA-145083, before the National Labor Relations

CA Consumers File Suit Against Manufacturer for Chewed Car Wires

A recent consumer lawsuit claims an environmentally-friendly substitute used by Honda attracts unwanted rodents and animals that chew through the vehicles wiring.

Plaintiffs Daniel Dobbs, Greg Delaney, and Sean Rickard filed breach of express warranty, violations of federal Magnuson-Moss Warranty Act, and declaratory relief claims against the auto manufacturer, Honda.rodent chewing wire

The plaintiffs allege their 2012-2015 model vehicles used electrical wiring covered in a soy-based insulation instead of traditional copper wire with plastic coatings. One plaintiff claimed rodents chewed through his wires on two occasions, which left his vehicle unusable.

When he attempted to have it repaired, Honda refused to cover it under his standard 3-year/36,000 mile warranty even though the warranty stated it would “repair and replace any part that is defective in material or workmanship under use.” The complaint states the plaintiff had to pay for the expenses out-of-pocket.

Rabbit in the Engine

Plaintiff Delaney owned a 2014 Honda CrossTour, he also experienced shredded wiring after owning his vehicle for a short time. During a repair– paid for out-of-pocket–the dealership found a rabbit in the engine compartment and “was still chewing through the wire while the car was at the dealership.”

According to the complaint, Plaintiff Rickard also found a rabbit nestled in his 2013 Honda Accord.

Through an online search, one plaintiff learned about rodent repellant tape sold by Honda. The plaintiff alleges the Honda dealership nor did Honda themselves offer the product.

Costly Repairs

The complaint highlights multiple charges paid by each plaintiff to repair their vehicles on multiple occasions. Although, the vehicles were still under warranty, the warranty was not applied to the repairs. One plaintiff paid $1,400 for repairs on at least two occasions.

As electrical wiring is an essential component of the vehicle plaintiffs allege the soy-based wire is insufficient to perform its intended function.

According to the complaint, many automotive blogs have discussed brands that use soy-based insulation. The wiring is said to be biodegradable and does not remain in the landfills. However, this environmentally conscious product remains a problem for the named plaintiffs and others who may join the suit.

This case is Dobbs, Delaney, and Rickard et al. v. American Honda Motor Company, Inc., case number 2:16-cv-00456, United States District Court for the Central District of California,

California High Court Revives Organic Labeling Suit

organic2Seven California justices ruled a consumer’s false labeling suit is not pre-empted by the federal Organic Foods Production Act.

Because the statute doesn’t provide a mechanism for consumer complaints, barring consumers from suing over the organic label under consumer protection statutes would not advance the purposes of the federal law, the high court found.

This federal law regulates the methods organic produce farmers may use in order to market their products as organic. The law does not prevent consumers from questioning the truthfulness of an organic label. To buyers and sellers alike, “labels matters”

Michelle Quesada, a California resident who alleged the grower sold conventionally grown herbs as oppose to organic, sued Herb Thyme Farms for false advertising and unfair competition.

The opinion states Herb Thyme processed its organic and conventionally grown herbs in the same packing and labeling facility. During processing, the herbs were mixed and shipped out under the “Fresh Organic” label.

At the trial level Herb Thyme urged the court to grant a judgment on the grounds of federal preemption or in the alternative delay the case until the consumers filed an administrative complaint with the USDA. Herb Thyme was successful with the trial court and the state appeals court.

The appeals court stated while the claim was not expressly preempted, the suits would interfere with federal organic certification scheme and were preempted by implication.

What Does “Organic” Really Mean

The state high court engaged in a further analysis of the purpose, application, and enforcement of the federal act in deciding if the case may proceed.

“Organic” described the process a farmer endured for developing natural soil conditions without the use of chemical additives. As the market for organic produce expanded, it developed a concern for uniform regulation on produce for which consumers were willing to pay a premium price.

The court stated the act prevents states from creating unapproved certification programs, certifying agents, and certifying organic farms. States are free to set more stringent standards than the federal minimum but all programs must meet federal guidelines and be approved by the USDA.

The justices observed that consumer protection from deceptive labeling has by and large been governed by state law, a factor that weighs against the presumption of federal preemption.

In granting immunity to growers, if consumers became aware that state law claims were preempted, they would not pay for organic produce and may believe growers had a “de facto license to violate state fraud, consumer protection, and false advertising laws.”

The case is Quesada v. Herb Thyme Farms Inc., case number S216305, in the Supreme Court of the State of California.

 

 

NLRB Declares Walmart Retaliated Against Striking Workers

Walmart

The National Labor Relations Board (NLRB) determined that Walmart Stores Inc. unlawfully retaliated against and threatened workers who took part in strikes and protests in more than a dozen states during the last two years. The NLRB ruled that Walmart must fully reinstate the 16 wrongfully terminated employees with back pay. In total, however, Walmart illegally fired, disciplined or threatened more than 60 employees in 14 states for participating in legally protected activities to complain about wages and working conditions.

The complaint from the NLRB follows unsuccessful settlement discussions. The labor board’s general counsel originally laid out the charges last November, but held off on filing a complaint while trying to work out a settlement with Walmart Stores.

Change is Coming For Walmart

“[The NLRB’s] decision proves beyond doubt that Walmart unlawfully fired, threatened, and disciplined hard-working employees simply for speaking out,” said Jess Levin, communications director for Making Change At Walmart (MCAW), a national campaign to change Walmart’s business practices. “Not only is this a huge victory for those workers and Walmart workers everywhere who continue to stand up for better working conditions, but it sends a message to Walmart that its workers cannot be silenced. We will continue to fight to change Walmart for the better.”

According to its website, “Making Change at Walmart is a campaign challenging Walmart to help rebuild our economy and strengthen working families. Anchored by the United Food & Commercial Workers (UFCW), we are a coalition of Walmart associates, union members, small business owners, religious leaders, community organizations, women’s advocacy groups, multi-ethnic coalitions, elected officials and ordinary citizens who believe that changing Walmart is vital for the future of our country.”

As the largest private employer in the United States (and the entire world), Walmart is setting the standard for jobs, and organizations such as MCAW and the NLRB are starting to take notice.

Retaliation for Protected Activity

Walmart experienced employee strikes in October and November of 2012. The following February, Walmart decided that it would not technically discipline any associates for participating in those strikes, but would instead apply its progressive attendance policy to any future strike participation.

To communicate its decision, Walmart had its store managers contact each striker individually during one of their shifts and explain Walmart’s stance on the strikes:

“The Company believes that those union-orchestrated hit-and-run work stoppages are not protected by federal labor law. It is very important for you to understand that the Company does not agree that these hit-and-run work stoppages are protected, and now that it has done the legal 45 thinking on the subject, it will not excuse them in the future. Should you participate in further union-orchestrated intermittent work stoppages that are part of a common plan or design to disrupt and confuse the Company’s business operations, you should expect that the Company will treat any such absence as it would any other unexcused absence. Having said that, let me emphasize that the Company respects your right to support a union and to engage in other protected, concerted activity. It also respects your right to not engage in such activity. But the Company does not believe that these union-orchestrated hit-and-run work stoppages are protected activity.”

How can the company both respect its employees’ rights to engage in protected activity while simultaneously deeming that the employees are not actually engaging in protected activity? It can’t, according to Geoffrey Carter, Administrative Law Judge for the NLRB:

“By, in or about February 2013, in eleven stores, reading talking points to associates that could be reasonably construed as prohibiting protected strike activity, Walmart announced an unlawful work rule in violation of federal law.”

Walmart disagrees, standing firm in its belief that its actions were legal and justified. “We continue to believe that we acted respectfully and, more importantly, acted lawfully in these incident,” said Brooke Buchanan, a spokeswoman for Walmart, in responding to the NLRB’s complaint.

Walmart workers will no longer stay silent about their grievances in light of this NLRB finding. “Walmart thinks it can scare us with attacks to keep us from having a real conversation about the poverty wages we’re paid,” said Barbara Collins, former Walmart worker from California. Collins is one of the nearly 70 workers named in the NLRB complaint. “But too much is at stake — the strength of our economy and the security of our families — to stay silent about why Walmart needs to improve jobs.”

View the 137-page decision here.

200 Women File Class Action Law Suit Against Celebrity Hair Care Product WEN

WEN

Tracie Hashton, former WEN customer, posts her complaint of extreme hair loss on the WEN Facebook page.

More than 200 women in 40 states who used WEN Hair Care have filed a class action law suit against the conditioning hair care system and its creator, celebrity stylist Chaz Dean. The women who joined the class action suit in November 2015 experienced rashes, irritation, hair breakage, and extreme hair loss after using the infomercial-driven product.

Mediation between the parties began just before Christmas 2015, with both sides sitting down in an effort to resolve the claims.

Severe and permanent damage to hair

Chaz Dean gained notoriety due to his high-profile clientele (including model Brooke Shields, singer Alyssa Milano and model Nicollette Sheridan), and built a massive empire around the hair care line he developed: WEN. The women 200 who filed against infomercial giant Guthy-Renker and the brand claim, “Wen products can cause severe and possibly permanent damage to hair, including significant hair loss to the point of visible bald spots, hair breakage, scalp irritation, and rash.”

Chaz Dean

Chaz Dean’s late-night infomercial for WEN products.

Left with anything but red carpet-ready hair, the plaintiffs also claim the brand failed to warn consumers of the risks and dangers associated with the products quickly enough once consumers began complaining of the hazards. The plaintiffs further alleged that the brand was more concerned with protecting itself, removing negative reviews on social media instead of addressing them.

The lawsuit is charging WEN (which is based in California) with violating the California false advertising law, violating the Florida Unfair and Deceptive trade Practices Act, negligence and failure to warn among other things. The lawsuit also claims that Guthy-Renker had “knowledge of a material design defect [and did not] disclose and/or warn plaintiff and other consumers that Wen Cleansing Conditioner can and does cause substantial hair loss [and that] Guthy-Renker concealed customers’ comments concerning hair loss, by blocking and/or erasing such comments from the WEN Facebook page.”

Years of Complaints

This is not the first year the hair care system has received serious complaints. Wen-related hair loss complaints on consumer websites date back at least five years. The lawsuit provides online reviews, however, showing that user complaints dated back to 2012. One claimed her hair “was healthy, now it’s like straw and brittle.” Another said, “Almost immediately after using the product I noticed huge amounts of hair caught in the drain.” Yet another said, “I can’t leave my house. I’m depressed. WEN hair products is [sic] responsible for my hair loss.”

More recently, complaints have been taken to Facebook and Twitter, and they also pop up in product reviews on sites like Sephora.com and Amazon. Smaller suits with similar claims have also been filed against WEN dating back to 2014.

Despite the allegations, some consumers continue to rave about the WEN product line, which is said to be natural and formulated to improve both the health and appearance of hair. Dean’s high-profile celebrity endorsers have not commented on the subject. Dermatologists agree that the causes of hair loss are hard to pin down specifically and will be difficult to prove in court.

WEN continues to stand by their products and has issued the following statement:

“With well over 10 million WEN products shipped since 2008, our customers’ overwhelmingly positive response to WEN is a testament to the benefits it can deliver for its users. These benefits are reflected in consistently high rankings from independent consumer product sites as well. There is no scientific evidence to support any claim that out hair care products caused anyone to lose their hair. There are many reasons why individuals may lose their hair, all unrelated to WEN. We intend to vigorously contest the allegations made.”

Amy Friedman, a nurse practitioner who lives in Florida and the lead plaintiff in the WEN class action, bought the Sweet Almond Mint WEN Cleansing Conditioner basic kit in January 2015. We have probably all seen the same infomercial Friedman happened upon while late-night channel surfing. Friedman and her team allege that “within two weeks of beginning use of her WEN Cleansing Conditioner, [she] began losing substantial and abnormal amounts of hair [and] the hair loss continued for approximately three more weeks [and she] lost one quarter to one third of the hair on her head.”

The class action suit also points out that the WEN website clearly states “that these results are not typical,” referencing the cleansing conditioner. Friedman and her fellow plaintiffs, then, are asking a relevant question in their filing: “If the results are not typical, what purpose does this information serve, other than to mislead potential consumers into purchasing defendant’s defective product?”

The WEN Cleansing Conditioner Class Action Lawsuit is Amy Friedman v. Guthy-Renker LLC, Case No. 2:14-cv-MRP-AGR, in the U.S. District Court for the Central District of California.

After $8.9M Fraud Verdict Against Star Academy, Students Seek $6 Million Grant Disgorgement

star career academyCamden, NJ — In the wake of an $8.9 million New Jersey Consumer Fraud Act (CFA) verdict in favor of more than 1,000 students against a for-profit school, the plaintiffs have filed a motion for disgorgement of an additional $5.5 million that Star Career Academy received from the United States in the form of education grants — plus $500,000 in interest on the grant money.

Class Action lawyer Thomas More Marrone of MoreMarrone LLC in Philadelphia has also filed a motion to assess an additional several hundred thousand dollars on the verdict under the CFA and a motion for CFA attorney’s fees. The court is expected to consider these motions in the next several weeks.

Last year a Superior Court jury in Camden, NJ, returned a class action verdict against Star Career Academy, a New Jersey for-profit school, under the New Jersey Consumer Fraud Act. (Polanco v. Star Career Academy, et al., Docket No: 415-13, October 29, 2015).

The disgorgement filing continues the Polanco v Star Career Academy case. The verdict in favor of more than 1,000 current and former Surgical Technology Students totaled $8.9 million including treble damages, and came after a five-week class action jury trial.

No program accreditation

Thomas More Marrone of MoreMarrone LLC served as Court-appointed Class Counsel and with co-Class Counsel tried the case to verdict. Under cross-examination at trial, according to court documents, Star’s CEO agreed with Marrone that Star’s Surgical Technology Program did not, in fact, have “program accreditation,” and that it would be “a lie” to say that it did. This testimony contradicted Star’s written statements to New Jersey’s Department of Health and Star’s student body that Star’s Surgical Technology “program” was “accredited.”

After the verdict, Marrone said, “The New Jersey Consumer Fraud Act law places ethical responsibilities on the shoulders of corporations like Star Career Academy and its owners. The jury found that Star violated those responsibilities. It took three years of litigation and five weeks of trial to bring Star to justice, but it was worth it. The Class Members deserve it.”

Based on the court documents, Star Career Academy obtained the Federal Grant money during the years that the jury determined Star Career Academy was engaging in Consumer Fraud.

The case is Polanco v. Star Career Academy, et al. Superior Court of New Jersey, Camden County, Law Division. Docket No: 415-13.