Amazon Prime Now Workers Are Done Paying the Price for Fast Delivery

Amazon

Amazon Prime Now packages arrive to consumers’ doors within one or two hours of ordering because delivery workers ultimately pay the price.

Failing to pay overtime and failing to provide breaks are just two of the claims – among a host of other violations – Amazon Prime Now delivery workers are alleging against the Internet giant and its new instant delivery service.

Amazon shoppers are now able to request one- to two-hour delivery of thousands of items across its inventory, but the workers delivering the products allege they are making less than minimum wage.

Misclassification Suits Abound

The legal action arises from the new Gig Economy, in which major companies rely on low-paid workers who get no fringe benefits to keep operating costs down.

In another delivery driver misclassification class action filed in the state of California – hot off the heels of the likes of FedEx – the workers allege they have been wrongfully classified as independent contractors.  “Amazon’s mission to deliver ‘Now’ at no additional cost is being funded by its delivery drivers,’ said Beth Ross, the attorney representing the drivers.

The lawsuit was filed in California state court by four drivers who allege they were hired by a separate courier contractor, Scoobeez, to work exclusively for Amazon. The drivers wear Amazon Prime Now uniforms, work regular shifts, and receive work assignments directly from Amazon. That level of control exercised by Amazon, the plaintiffs allege, makes the drivers employees entitled to overtime, meal breaks and other benefits and expenses of employment.

Same State, Same Attorney

FedEx agreed to pay $227 million in early 2015 to resolve a similar lawsuit in which California drivers alleged they had been misclassified as independent contractors. Beth Ross, the attorney who litigated that case on behalf of FedEx drivers also represents the class of plaintiffs in the Amazon Prime Now. “The facts in this case are much stronger than in the FedEx case, and we won,” said Ross. “The equities are much more compelling. These are low-wage workers who have no other options; otherwise they wouldn’t be doing this.”

Taree Truong, lead plaintiff in the law suit, said in a press release: “I was told that I would be paid $11 per hour plus tips and $2.50 per delivery. In September, I had to sign a new contract that eliminated the delivery fee. But I never see an accounting of what tips I receive, because everything is paid through an app.” Amazon Prime Now workers also must buy their own gas, insurance, and auto maintenance service. Drivers who cover 120 miles in a day without being reimbursed at the standard per-mile rate “make $88 in pay for eight hours with $69 in expenses, and are left with $19 per day,” Ross explained.

The Rise of the Gig Economy

Companies get immediate savings to by misclassifying workers as contractors. Having an independent contractor on a payroll ends up costing around $4,000 less per year than an employee. For employees, companies must pay payroll taxes that fund Social Security, Medicare, unemployment insurance and other safety nets. Contractors entail no such cost. Delivery employees would also be entitled to a wide variety of protections, including reimbursement for the expense of fueling and maintaining the personal vehicles they use for deliveries.

Many modern companies that attract vast public attention and huge sums of investor capital derive their success from relentlessly chiseling away at the per-unit cost of everything they do, which has created the rise of the gig economy. This “gig economy” is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. A study by Intuit predicted that by 2020, 40 percent of American workers will be independent contractors. Of course, an economy full of on-demand gig workers sounds great—if an employer and does not want the financial commitment of paying an employee.

It remains to be seen how the Amazon Prime Now class action will play out in California court. The last time Amazon itself faced a core challenge to its labor practices, the Internet giant eventually won. The Supreme Court ruled last winter that Amazon does not need to pay its warehouse workers for the time they are forced to spend going through security checks at the end of their shifts to prevent warehouse theft.

The lawsuit filed in Superior Court for the State of California, County of Los Angeles is Taree Truong et al. vs. Amazon.com Inc et al.

SCOTUS Refuses to Hear Johnson & Johnson Appeal of $140M Children’s Motrin Verdict

Samantha Reckis and her parents a total of $109 million, including interest, a Plymouth Superior Court jury decided on Wednesday. Samantha was 7 when she was given Motrin brand ibuprofen, family attorney Brad Henry said. She suffered a rare side effect known as toxic epidermal necrolysis and lost 90 percent of her skin and was blinded.

Samantha Reckis was 7 when she was given Motrin brand ibuprofen. She suffered a rare side effect known as toxic epidermal necrolysis and lost 90 percent of her skin and was blinded.

The U.S. Supreme Court said on Jan 19 that it will not hear Johnson & Johnson’s appeal of a $140 million judgment in a lawsuit alleging it failed to warn that Children’s Motrin pain and fever medication could cause a devastating skin condition.

The decision leaves intact one of the largest verdicts ever awarded by a Massachusetts jury.

Johnson & Johnson had urged the US Supreme Court to weigh in on its challenge to a $140 million verdict that the pharmaceutical company must pay because of its Children’s Motrin product.

The kids’ anti-inflammatory drug has allegedly caused a potentially deadly skin condition, and Johnson & Johnson is arguing courts should look to a third party for liability: the U.S. Food and Drug Administration, for rejecting the warning labels proposed by the pharma giant.

Deadly Skin Condition

Plaintiffs Samantha Reckis and her parents brought suit against Johnson & Johnson after the Children’s Motrin product caused Samantha to develop toxic epidermal necrolysis, a terrible skin condition that damages the body’s mucous membranes. Reckis lost 80% lung capacity and 90% of her skin. She is also now blind. Reckis experienced these unbelievable side effects in 2003 at the young age of seven.

Reckis’s parents argued the medication should have come with warnings that specifically mentioned toxic epidermal necrolysis, the related skin condition Stevens Johnson Syndrome, and a general warning that rashes or blisters that develop after taking the drug could lead to a “life-threatening” condition. However, the FDA had rejected warnings similar to those urged by Reckis’s parents.

Stevens-Johnson syndrome, a form of toxic epidermal necrolysis, is a life-threatening skin condition in which cell death causes the epidermis to separate from the dermis. The syndrome is thought to be a hypersensitivity complex that affects the skin and the mucous membranes. The most well-known causes are certain medications, but it can also be due to infections, or more rarely, cancers. Toxic epidermal necrolysis and Stevens-Johnson syndrome essentially cause one’s skin to melt off the body.

Petitioning for Certiorari

Johnson & Johnson had sought in a brief filed December 30, 2015 for the U.S. high court to review the Massachusetts Supreme Judicial Court’s decision affirming the multi-million dollar February 2013 verdict. Johnson and Johnson said in its filing,

“It is beyond dispute that the specific warning language the [Massachusetts Supreme Judicial Court] said Massachusetts law required was proposed to the FDA, rejected by the FDA, and then proposed again at trial by respondents . . . The FDA acts intentionally and purposely when it includes particular language in one label (for patients under a physician’s care) but rejects its inclusion on another label (for over-the-counter consumers) – especially given that this same language was proposed for both products.”

The warnings rejected by the FDA were proposed by a citizens’ petition and not Johnson & Johnson. The Massachusetts high court used these facts to reason that the FDA may not necessarily have rejected such warnings if Johnson & Johnson itself had proposed them.

Johnson & Johnson believes this holding to be based on speculation and has also argued that the FDA specifically requires similar warnings for prescription ibuprofen products, not over-the-counter products (including Children’s Motrin). Johnson & Johnson believes this shows the FDA’s intent not to apply such warning labels to over-the-counter medication, regardless of the entity proposing the warnings.

The case is Johnson & Johnson et al. v. Lisa Reckis et al., case number 15-449, in the Supreme Court of the United States.

Their Duty Alone

Meanwhile, a Philadelphia jury returned a $10 million verdict against Johnson & Johnson in 2010, after siding with a family who said their 3-year-old daughter was struck with Stevens-Johnson syndrome after taking Children’s Motrin in 2000. The Pennsylvania Supreme Court declined to hear an appeal of the case in March after the state’s Superior Court upheld the verdict in July 2014.

Another ongoing case against the pharmaceutical company is Brown et al. v. Johnson & Johnson et al., case number 2:12-cv-04929, in U.S. District Court for the Eastern District of Pennsylvania. Riley Brown (age 3 at the time) was hospitalized for nearly a month after taking Children’s Motrin and saw more than 30 percent of her body affected by the painful skin condition. She was left blind in one eye and now has a severe sensitivity to light in the other. Brown has undergone multiple eye surgeries since she was stricken with SJS/TEN, including a failed cornea transplant.

Brown’s attorney told the eight-member Pennsylvania jury in September, “The law is that the drug manufacturer, the one who is making the profit by selling the drug, has a duty. Our country, our government, has decided that the duty is going to fall on the drug manufacturer to make their product safe. It is not a delegable duty. They can’t push it off on the FDA. They can’t push it off on a doctor. They can’t push it off on mom. It is their duty and their duty alone.”

Concussion Litigation Sparks Advocacy, Increases Nationwide Awareness

TBI Football

NFL players rely on government programs to provide healthcare instead of the National Football League covering their traumatic brain injury healthcare.

Professional and amateur sports leagues have finally begun making key changes to protect football and other close-contact sports players against traumatic brain injuries.

These protections are largely a result of the increased awareness surrounding traumatic brain injuries nationwide. Due to recent high-profile litigation, including suits against the National Football League, more understanding of the long-term impacts of concussions now exists.

The National Trial Lawyers recently discussed a new report by the American Association for Justice (AAJ) with several traumatic brain injury advocates currently revolutionizing the health care approach to both student and professional athletes.

Recent Widespread Awareness

According to the David Ratcliffe, a researcher with the AAJ, it is only recently that a widespread change in attitude surrounding concussions and traumatic brain injuries has occurred. Ratcliffe, the of the new AAJ concussion report said, “More players, parents, coaches, and schools are aware today more than ever before of the risks associated with head trauma. This dramatic change in culture is largely due to high-profile litigation against colleges and the NFL that has continued to push for accelerated changes, as opposed to the incremental change the AAJ has seen over years past.”

As maConcussions and the Courthouseny as 3.8 million sports-related injuries occur each year and concussion management overall is still inadequate. The AAJ issued a report to raise further awareness titled Concussions and the Courthouse, which can be found here. The AAJ will continue to advocate for better risk-management and better concussion care.

Jason Luckasevic, a Pittsburgh attorney, brought concussions in sports to international attention when he filed the first two lawsuits against the NFL in 2011 on behalf of more than 200 NFL players. Luckasevic’s neuropathologist friend, Dr. Bennett Omalu, discovered a specific form of brain disease common in NFL players.

Luckasevic hopes to protect all athletes – including millions of children – to avoid repeated head trauma. “There is a need to make sure athletes are not at risk of chronic brain damage due to chronic carelessness of leagues,” Luckasevic told NTL.

“Today, we continue this conversation to not only protect those former NFL players, but also all athletes – including millions of children – involved in contact sports, so that they can avoid this public health concern involving repeated head trauma,” said Luckasevic.

Leonard Marshall, a former NFL player for teams including the New York Giants, believes it’s his “duty, honor, and privilege to eradicate TBIs (traumatic brain injuries).” Marshall played in the NFL for twelve years and was a two-time Super Bowl champion.

Once a former All-Pro defensive lineman for the Giants, Marshall was diagnosed with signs of Chronic Traumatic Encephalopathy (CTE) and became a sports safety spokesman to raise head trauma awareness. For more than eight years, he has been committed to trying to make a difference with the goal of making it safer for kids to play tackle football.

Marshall formulated a platform to reach America’s youth and parents called the Brain Unity Trust, a non-profit organization combined of medical experts, attorneys and player. Brain Unity Trust is the “first of its kind” and advocates awareness for all sports and athletes, including cheerleaders, who Marshall says “may also suffer from TBIs while participating in sports.” Find out more info at Brain Unity Trust and PracticeLikePros.com.

Marshall told the NTL, “There’s all this education out there about the risk of drinking, drugs, and sexual contact . . . these are all things that should be understood. However, TBIs should be understood, studied and talked about with the same compassion.”

Zachary Lystedt Law

Victor Lystedt experienced every football parent’s worst nightmare when his son Zachary suffered a concussion during a football game one Friday night. Zachary Lystedt went down hard during a game and was directed to sit out for two plays before being thrown back into the game. Several minutes later, Zachary became unconscious while playing and was airlifted to the nearest hospital. Lystedt’s son began rigorous physical therapy, and the Lystedt family was devastated when Zachary could not even talk for the first nine months.

“People must understand youth athlete’s brains are totally different than adult brains, and heal totally different . . . they need time. Understanding concussion management is key to keeping your kid safe,” Lystedt told the NTL. “Once we were able to use all the lawyers and the experts to identify why our son was hurt, I now feel it’s my duty to call upon parents to understand this nationwide. This is an important education piece in regards to football and all sports.”

The NTL also spoke with Richard Adler, the attorney for the Lystedt family and the drafter of the “Zachary Lystedt Law,” the first of its kind. Adler, who is based in Washington, told NTL,

“Education is the primary focus to start. An education campaign in the state of Washington still resulted in many soccer, lacrosse, and football injuries statewide. We realized education was only going so far and didn’t have the stickiness we were hoping would stay with the school administrators and parents.”

When in Doubt Sit Them Out

That’s when Adler drafted Washington’s When in Doubt Sit Them Out law. Adler’s legislation campaign garnered a lot of support from doctors and Seahawks players and fans. The law passed on May 14, 2009 and since then, all states have adopted similar principles.

Adler told NTL,

“When a player is suspected – not diagnosed – they must be removed and cannot return to play until a release by a medical professional is given. Then, there must be a graduated return to full play. We are still finding that many youth athletes across the country have died. Ages of eighteen and under are when athletes see issues of Second Effects Syndrome. A TBIs are truly traumatic. The CDC in 2002 called them a ‘silent killer’ before Congress.”

Adler also said, “Mandatory parent-meetings is an idea I’m still working with. We need to change the culture of sports. Coaches need to know parents are involved and parents need to attend school meetings and hear presentations.”

According to Adler, “Another next step is a call for national legislation. All states have concussion laws. Bicycle helmets, motorcycle helmets, and seatbelt laws are not even in all 50 states!”

Adler believes sanctions to hold coaches accountable are also invaluable tools for raising concussion awareness and protecting our country’s athletes. “Coaches all too often look the other way because of the culture of the sport,” Adler pointed out.

“The discussion is not just about returning to practice and getting to compete, but also returning to the classroom,” Adler told NTL. “We need to make education and accommodations there the focus because education should be first . . . returning to the field or arena should be second.”

Strengthen parental notification

AAJ’s David Ratcliffe stated,

“We want to strengthen parental notification, which is already in place in six states and is a very simple thing to do. Parents nationwide should push states to add this to state laws where it is not already in place. These laws generally only cover high school, but a lot of these head trauma problems expand to middle school and even elementary school. We need a push for state laws instead of a nationwide practice of avoiding them.”

Leonard Marshall

Leonard Marshall

Leonard Marshall has a message for those who believe concussion and TBI advocates are merely trying to kill football:

“Grow up. This is a contact sport and you’re in the air often with the potential to fall on your head and then contract a traumatic brain injury. I’ve come across a number of different people in my field – Hall of Famers and accountable football players – who have legitimately experienced this stuff and have seen the lack of responsibility and accountability firsthand. This stuff is going to happen. In fact, it’s going to happen to more kids between ages 8-18 because of the fact that the brain is not fully developed. When you smash into each other at a high rate of speed with improper equipment or improper coaching, the risks get greater. It’s only inevitable that over time, if we don’t make changes now, it’s only going to get worse.”

Marshall pointed out the example of Buddy Teevens, head football coach for Dartmouth University. Marshall believes Teevans has a genuine understanding of head injuries and a great approach to protecting his players. “The least amount of time spent practicing on the field actually leads to the most results and better games. It’s all about playing the game in a manner that you don’t go out on the field with the goal to maim or personally injure someone else. Athletes need to play with physicality but also with safety concerns. I’m very proud of Teevens’ football program,” Marshall told NTL.

We just had a boy die…

As a parent who has experienced firsthand the heartbreak of a traumatic brain injury suffered by his child, Lystedt often receives the question, “Would you ever let your son play football again?” His answer is a resounding, “Yes. Why wouldn’t I? It’s the safest the game has ever been. It’s more talked about now, and it’s looked at with an objective eye so much more than it ever has been.”

Lystedt continued,

“We’re not all the way done, though. We just had a boy die here in Washington State which is a very sad thing. I know we need to do a whole lot more when it comes to the educational aspect. My son battled for his life . . . battled really hard, for a long time. I think the reason he survived is the warrior attitude that sports gave him. He’s been doing sports all his life, and now his sport is to recover and get better. He’s motivated internally to get better every day. I think with the proper coaching and management of any sport, we can keep it a lot safer. I don’t think there’s any piece of equipment that can stop a concussion if it’s going to happen. I think what we can do is manage it thereafter and give our child the full time needed to recover and monitor this recovery by the proper people in the medical field, while educating parents, coaches and teachers. The opportunity to play a sport is a very great thing to give a kid and I wouldn’t want to take that away from any one of them.”

To view a copy of the AAJ’s full report, visit Concussion.Justice.org.

Wage and Hour Claims Increase to an All-Time High

Gavel and old clock

New fiscal year, same soaring wage and hour statistics, as the top labor and employment law claim continues to be filed at a record high. Wage and hour claims were filed at an all-time high in Fiscal Year 2014, totaling 8,160 lawsuits initiated. This year, the top claim in employment litigation has jumped another 7.6% overall, totaling 8,781 wage and hour suits in FY15.

Wage & Hour Claims Remain #1

One of the primary reasons for the steady growth in wage and hour litigation filings is the overall increase in wage and hour awareness nationwide. The Obama Administration proposed new overtime rules this summer, with plans to amend the “white collar” exemption by Fall 2016.

Wage & Hour GraphThere has also been an undeniable increase in independent contractor suits in recent years, with major businesses like FedEx and Uber making headlines. This summer, the Department of Labor issued guidance on independent contractor classification that interpreting the Fair Labor Standards Act broadly, covering most workers under the classification of “employees.” Additionally, the National Labor Relations Board issued a decision earlier this year that expanded joint employer status under the National Labor Relations Act.

Year after year, wage and hour case filings have exponentially increased, starting with 1,960 filings in 2001. The following year, wage and hour case filings increased by a whopping 99.2% with 3,904 law suits filed in 2002. While the past five years have not seen such a dramatic overall jump in wage and hour filings, the employment law world is still seeing a steady 8% increase on average each year.

Overall incidences of wage and hour federal court filings have exploded by 450% in the past fifteen years. According to Seyfarth Shaw LLP, this year’s filing number of 8,781 wage and hour cases totals more than any two pre-2005 years combined.

A Topic of Discussion and Litigation

Nationwide discussions have taken place regarding the potential of increasing federal minimum wage in the private sector, and many major employers have contemplated increasing minimum wage within their own companies to stay competitive. State and local authorities throughout the United States have proposed minimum wage increases, as well.

In addition to the changes in wage and hour laws leading to more claim filings of late, employees have become more aware of their ability to sue for perceived management missteps. Plaintiffs’ lawyers have been successful influencing large settlements and jury awards due to the increase in wage and hour case filings.

As Forbes put it earlier this year, “Another Fortune 500 titan, another misclassification suit.” Lowe’s kicked off 2015 by joining the likes of Google, FedEx and Uber when the retail giant paid its misclassified home improvement contractors $10 million to settle misclassification claims. Like all independent contractor misclassification suits in the past year, Lowe’s downfall was exerting too much control over the business practices of its employee “contractors.”

Now is the time for employers to take a close look within their businesses at the practices and policies in place. Employers – now more than ever – should speak with experienced employment law attorneys to ascertain whether they may be at risk for potential wage and hour issues such as pay practices (including overtime and minimum wage policies), timekeeping practices, independent contractor classifications, exempt status classifications, pay deductions, and recordkeeping.

The above-referenced statistical data is based on a fiscal year that ends September 30.

Jacoby & Meyers Continues Second Circuit Push for Non-Lawyer Equity Investors

Law Firm Needs Money

Jacoby & Meyers LLP – one of the nation’s largest personal injury firms – is asking the Second Circuit to reconsider the constitutionality of a New York regulation prohibiting law firms from selling stakes to non-lawyers. Both the U.S. District Court for the Southern District of New York and the Second Circuit previously agreed that Jacoby & Meyers’ constitutional challenges were “entirely without merit.”

In Need of Funds

Originally filed in May 2011, Jacoby & Meyers’s suit claimed that Rule 5.4 of the New York Rules of Professional Conduct was unconstitutional. The personal injury firm claimed the ethical rule unconstitutionally blocked firms from accepting non-lawyer investments, including equity ownership.

Under First and 14rh Amendment, as well as Dormant Commerce Clause grounds, Jacoby & Meyers argued its “pioneering efforts . . . require a substantial infusion of new capital.”

Jacoby & Meyers continued by admitting in some circumstances, the infusion of new capital can be found in the obvious places: partner contributions, retention of earnings on fees, or bank loans. However, the firm opined these routes are now becoming “too expensive” to promulgate its “pioneering efforts to provide quality legal services at a reasonable cost to economically challenged individuals who would otherwise have no access to the legal system.”

The Second Circuit opinion sarcastically responded:

“But fear not. Jacoby & Meyers says it has received ‘numerous offers from prospective non-lawyer investors who are prepared to invest capital in exchange for owning an interest in the firm. Indeed, there allegedly are ‘several high net-worth individuals’ and institutional investors who ‘have expressed their commitment to invest significant sums of money’ in [the firm] in exchange for equity in the firm. It is only the ban on non-lawyer equity ownership of law firms . . . that has prevented J&M from entertaining these offers.”

Overhaul of regulation of legal services

The UK (a nation that shares our language and legal history) has a striking revolutionary approach to non-lawyer equity investors compared to that of the United States. The U.K. Legal Services Act—adopted in 2007, three years after the blockbuster Clementi report —radically overhauled the regulation of legal services in England and Wales. The 400-page act instigated hundreds if not thousands of changes, including allowing non-lawyers to hold ownership and management positions in law firms.

“The U.K. reforms are about putting the customer at the heart of the relationship, and about prioritizing the needs of the customer. The reforms allow for people who have different skills and expertise to be brought together—people who typically aren’t brought together—in order to meet customer needs, and in order to improve access to justice and to legal services,” said Alex Roy, the then-head of the Legal Services Board of England and Wales.

Under UK’s Legal Services Act, the creation of new ways of providing legal services—including through alternative business structures—is more than simply permitted; it is actively encouraged.

Serving the Under-Served

The firm said in its complaint that it “has become synonymous” with providing legal services for under-served populations and that without being allowed to receive non-lawyer investments, it would not be able to provide “low-cost legal services to the poor.”

The lawsuit experienced many incarnations, including three amended complaints that named the presiding judges of the state Appellate Division’s four departments as defendants. The first amended complaint was dismissed because the court said the firm did not show Rule 5.4 caused Jacoby & Meyers any actual injuries.

On appeal, the firm argued before the Second Circuit that it had not challenged any other provisions of state law in the suit out of concern and caution that the circuit might abstain from deciding the case.

The Second Circuit appellate panel vacated the earlier judgment and remanded the suit so that the plaintiff firm could file another amended complaint in June 2013. This amended complaint allowed Jacoby & Meyers to tack on more than a dozen state statutes that purportedly blocked the investments too.

The latest amended complaint was filed in March 2015. In dismissing the suit again, U.S. District Judge Lewis A. Kaplan issued a strongly-worded, blunt opinion rejecting the personal injury firm’s arguments.

Judge Kaplan wholly rejected the firm’s arguments, calling some “frivolous” and others a misstatement of the law that reflected “a fundamental misunderstanding” of constitutional law that rests on a “woefully misguided premise.”

Todd S. Garber, one of the lawyers for Jacoby & Meyers said in a response to the district court opinion, “While we are disappointed with the decision, we look forward to the Second Circuit’s review of the District Court’s ruling.”

The case is Jacoby & Meyers, LLP, and Jacoby & Meyers USA II, PLLC v. The Presiding Judges of the First, Second, Third and Fourth Departments, Appellate Division of the Supreme Court of the United States, New York. Case No. 11 Civ. 3387 (LAK). The opinion can be found here.

Invokana’s Deadly Side Effects Create the Opportunity for Major Recovery

Invokana

Invokana, made by Johnson & Johnson subsidiary Janssen Pharmaceuticals, is a “blockbuster” drug that has been prescribed to millions of Americans with type 2 diabetes in the two short years it’s been on the market. Johnson & Johnson promoted Invokana as a “much-needed” breakthrough in diabetes research.

Invokana was designed to help control blood sugar by forcing the kidneys to purge glucose from the bloodstream through urination, but when Janssen began promoting it off-label for weight loss, deadly side effects occurred, according to a letter from Public Citizen to the FDA (see page 6 of the letter).

Blockbuster Drug With Deadly Side Effects

The host of alarming side-effects Invokana has been linked to include:

  • hypotension
  • urinary tract infections
  • yeast infections
  • ketoacidosis (a potentially-fatal rise in blood acidity)
  • decreased bone strength
  • increased risk of broken bones
  • heart attack
  • stroke
  • kidney failure

“Blockbuster drugs” like Invokana are extremely popular drugs that generate annual sales of at least $1 billion for the company that creates it. Examples of blockbuster drugs include Vioxx, Lipitor and Zoloft. Janssen heavily promoted Invokana for both the on-label and off-label use.

The FDA described Invokana as creating “an imbalance in early cardiovascular events” observed in the CANVAS trial. This trial involved a 4,300-subject study assessing the cardiovascular effects of Invokana. In the first 30 days of use, Invokana had a cardiovascular events “Hazard Ratio” of 6.9, which means that patients who were taking Invokana at the time had a 690% higher likelihood of suffering a cardiovascular event than the patients who were taking a placebo.

Janssen has opened itself up to failure-to-warn suits because the Invokana label does not warn of dangerous side effects, including: heart attack, stroke, kidney failure, and diabetic ketoacidosis.

While most personal injury attorneys are not currently pursuing bone fracture side effects Invokana cases because cases with hospitalization and prolonged injuries are generally preferred. Generally, Invokana clients must have taken an SGLT2-inhibitor, such as Invokana, Jardiance, or Farxiga (or one of the combination products Invokamet, Glyxambi or Xigduo). Additionally, the most commonly pursued injuries include:

  • Heart attack (must be within 15 days of last use).
  • Stroke (must be within 15 days of last use).
  • DKA (must be within 15 day of last use).
  • Kidney Failure (must be within 45 days of last use).

Current Invokana Lawsuits and Potential MDL

Rosalba Joudry, a resident of Ontario, Canada, filed an Invokana class action on September 10, 2015—the first Invokana lawsuit ever filed. Joudry and her lawyers filed her case with the Ontario Superior Court. The lawsuit contains accusations that the manufacturer:

  • Failed to perform “proper design, development and testing of its drug” before proceeding to advertise and sell it on the Canadian market.
  • Failed or refused to ensure that doctors and patients had access to a “clear, complete, and current” list of side effect warnings.
  • Ignored, either on purpose or through neglect, vital information on the risks of Invokana, which it should have been aware of “based on Invokana’s [kidney-facilitated] mechanism of action, the class of drugs Invokana belongs to, and numerous studies, trials, and medical journal articles”.
  • Persists in portraying Invokana as a safe product while “downplaying the seriousness of [its] potential side effects”.
  • Chose to value profits over consumer health and safety, exercising “unfair business practices” by concealing any information that might hinder sales.

Joudry requested more than $1 billion in damages from Janssen, Inc. for herself and for other claimants who may later join the suit.

Due to its widely-prescribed status, the number of lawsuits that could arise due to Invokana’s side effects may reach staggering numbers. Similar plaintiffs may elect to consolidate their cases with group litigation methods such as Joudry’s class action or multi-district litigation (MDL), which expedites the legal process. Because of differences between U.S. and Canadian law,individual lawsuits consolidated in multi-district litigation will likely offer more compensation and flexibility for similarly situated Invokana plaintiffs.

To compare the potential compensation that could arise from Invokana MDL, consider Takeda Pharmaceuticals, the manufacturer of the diabetes drug Actos. Takeda recently agreed to pay $2.37 billion in settlements to plaintiffs alleging the drug causes bladder cancer (much like the kidney failure caused by Invokana). This settlement agreement was drawn up to resolve an estimated 9,000 individual lawsuits that demanded compensation for significant damages to health, quality of life, and financial well-being. Mass torts attorneys should contemplate the benefits of marketing geared toward those injured by Invokana.

Ford Focus “Tire Eater” Class Action Regains Traction from Ninth Circuit

546b5585a9359_-_2005-ford-focus-st-lgA Ninth Circuit judge reinstated a class action suit against Ford for consumers who purchased a 2005-2011 Focus.

The plaintiffs alleged the models had a rear-suspension “alignment/geometry” defect that caused the rear tires to wear prematurely. The order states that plaintiffs had rear tires replaced for the first time between 12,086 and 20,723 miles.

Ford was charged with knowing or should have known about the defects and failed to disclose to consumers at the time of sale.

The California plaintiffs claimed a breach of implied and express warranties, as well as fraud in the sale of Ford Focus models sold between 2005 and 2011.

For a de novo review on appeal, the Ninth Circuit addressed whether the district court’s summary judgment on the implied warranty under the Song-Beverly Consumer Warranty Act (“Act”) and express warranty claims was improper.

Implied Warranties under the Act

The Act addressed the duration of time an implied warranty of merchantability and fitness would last following the sale of a consumer good. It specifically stated that “each consumer good sold at retail in the state shall be accompanied by the manufacturer’s and the retail seller’s implied warranty that goods are merchantable.”

The deadline prescribed was no more than one year after purchase. However, previous court decisions ruled that there was “no requirement that a consumer report discover and report a latent product defect within [one year] unless there is convincing evidence to decide differently.” Mexia v. Rinker Boat Co. 95 Cal. Rptr. 3d 285, 295 (Ct. App. 2009).

Based on a lack of evidence that the state’s highest court would change its decision from Mexia, the court reversed summary judgment on the implied and express warranty claims.

Express Warranty Claims

Ford created express warranties through the distribution of the New Vehicle Limited Warranty. The information served as an affirmation of fact or promise that the vehicle would operate properly.

Both parties argued that the warranty was ambiguous. Ford argued the warranty only applied to manufacturing defects and the plaintiffs argued it guaranteed against any design defects.  Ford’s warranty expressly referenced defects that are a part of the “design.” The court concluded that the warranty could apply to both manufacturing and design defects and reversed the district courts summary judgment.

Fraud Claims

To be successful in a claim of fraudulent omission the court stated there must be actual reliance. A plaintiff is required to show that:

  • The defendant’s non-disclosure was an immediate cause of the plaintiff’s injury-producing conduct.
  • It was a substantial factor in his decision, and
  • The omission was material causing one to behave differently.

 

The worn tires created  safety hazards such as decreased stability, handling, steering, and braking. Safety hazards are considered a material omission, the court stated.

Additionally, the plaintiff would need to show there would have been aware of a disclosure had one been made.

Had Ford made the disclosures through authorized dealerships, the plaintiffs would have been aware of the defect and made any changes. All warranty repairs had to be performed by authorized dealerships.

A sufficient inference could be made that a reasonable consumer would have depended on the information communicated to dealerships on issues with their cars, had they been told. The lower court was instructed to reconsider the plaintiff’s motion for class action.

This case is Margie Daniel et al. v. Ford Motor Co., case number 13-16476, in the U.S. Court of Appeals for the Ninth Circuit.

Kentucky Residents Allowed to Proceed in Toxic Emissions Dust Class Action

coal emissions2The Sixth Circuit Court of Appeals has affirmed a district court’s ruling to allow Kentucky residents to proceed in a class action lawsuit against a Louisville Gas and electric company for the homeowner’s claims of nuisance, trespass, and negligence for toxic dust and ash released from a power plant.

The homeowners alleged that beginning in 2008, a film of dust and coal has had been emitted from coal burning emission stacks onto their properties by the Cane Run Power Plant owned by the Louisville Gas & Electric Company (LGE).  They also alleged that ash, dust and coal combustion by-products containing arsenic, silica, lead, and chromium from an insufficiently covered landfill blew onto their properties, causing lung and skin irrigation.

Clean Air Act and state claims

The homeowners filed a lawsuit, alleging violations of the Clean Air Act and the Resource Conservation and Recovery Act in addition to state law claims of nuisance, trespass and negligence. LGE sought to have the homeowner’s case dismissed arguing that the federal Clean Air Act preempted the state claims.

The district court dismissed the homeowner’s federal claims for lack of standing and failing to provide requisite notice for their Clean Air Act claims, but ruled that they were allowed to proceed on their state common law claims of nuisance, trespass and negligence, which were not preempted by federal law.

The Louisville Gas & Electric company appealed the decision to the court of appeals, contesting the district court’s denial of their motion to dismiss the state claims on preemption grounds.  The homeowners also contested the district court’s dismissal of their federal law claims.

Appeals court affirms lower court ruling

Relying on a previously decided case, Merrick v. Diageo Americas Supply, the court concluded that the Clean Air Act does not preempt state law claims because “states retain the right to ‘adopt or enforce’ common law standards that apply to emissions.”  In the Merrick case, landowners brought a lawsuit against a Kentucky whiskey distiller for ethanol emissions.

The court found that the state claims brought against LGE by the homeowners were not “materially distinguishable from state common law claims raised in Merrick” and that the “Clean Air Act does not preempt plaintiffs’ state common law claims.”

The court refused to consider the homeowner’s challenge to the district court’s dismissal of their federal claims, citing that the district court only allowed an appeal of issues related to the portion of the order that “denied Defendant’s motion to dismiss Plaintiffs’ state common law claims on preemption grounds under the Clean Air Act.”  The court also noted that the homeowners never filed a cross-petition to appeal the district court’s order dismissing their federal law claims.

The homeowner’s attorney stated that the homeowners were pleased with the ruling that recognized the “continual rains of ash and dust from the Cane Run plant” provide homeowners with “claims they can bring before the court.”

 

The case is Kathy Little et al v. Louisville Gas & Electric Company, case number 14-6499 in the U.S. Court of Appeals for the 6th Circuit.

 

Mass Tort Suits Proceed Against Syngenta for Genetically Modified Corn

SyngentaSyngenta is prohibited from appealing a federal judge’s ruling that allowed corn industry plaintiffs to continue multidistrict litigation, claiming the company tainted large shipments of U.S. grain with genetically modified seeds. The court recently issued the coordination order for the MDL proceeding.

Cargill filed its suit against Syngenta Seeds in 2014, claiming the company commercialized the genetically modified seed prior to receiving import approval from a key market player, China.

The plaintiffs asserted the Syngenta has a duty of reasonable care and specifically address the time, manner, and scope of Syngenta’s efforts to commercialize the product.

Billions of dollars were lost

Cargill was joined by thousands of farmers, distributors, and supply companies in Minnesota and Louisiana. The parties claimed billions of dollars were lost due to China’s rejection of all U.S. corn produced by American farmers. The variant used in the corn seed reportedly repels certain insects.

A Cargill executive commented that Syngenta had failed to accept its share of risk associated with the genetically modified seed. Syngenta’s original response to the lawsuit was the company followed all regulatory and legal requirements associated with the product.

The Kansas federal judge stated Syngenta owed the corn industry members a duty to restrict the timing and manner of the products release to avoid the level of economic harm.

Syngenta has argued it is being held liable for the economic harm to industry players simply because they are interconnected by the industry itself. However, the plaintiffs argued Syngenta was aware of the potential harm from releasing the product.

Parties to the suit claim the product release cost the industry up to $3 billion dollars because of the rejection and seizure of shipping containers carrying the genetically modified corn.

This case is In Re Syngenta AG MIR 162 Corn Litigation, case number 2:14-md-02591, U.S. District Court for the District of Kansas

 

1,077 Mass Tort Cases Filed Over Hypertension Drug Benicar

SKO0104ZAs of mid-October, there were 1,077 mass tort cases filed over hypertension drug Benicar within a Benicar MDL 2606 docket in New Jersey, where discovery has begun. The medication causes severe gastrointestinal symptoms among consumers.

The litigation not only involves Benicar, but also Benicar HCT, Azor, and Tribenzor, which have severe side effects. Daiichi Sankyo manufactures all four drugs. Benicar, also called Olmestaran received FDA approval in 2002, for treating high blood pressure. FDA approval for the remaining drugs followed.

Olmestaran is the active ingredient in the four medications marketed by Daiichi. 

Benicar Side Effects

 The controversial medication causes users to experience severe side effects. Consumers experienced massive diarrhea, nausea, vomiting, dehydration, malnutrition, and excessive weight loss.

These side effects are associated with a condition called Olmesartan Induced Enteropathy, which causes the gastrointestinal issues listed above. Enteropathy is a disease of the small intestine.

The medication essentially prevents the small intestines from absorbing nutrients from food. Some patients began experiencing these symptoms within 4-6 months after starting the new regimen. The symptoms last for as long as the patient continues taking the medication. Continued use causes long-term intestinal issues.

According to a Mayo Clinic article –joined by several physicians—after completing a small study of 22 patients, the patients experienced chronic diarrhea and weight loss, and 63 percent or 14 patients were hospitalized. Some patients were misdiagnosed with celiac disease or some other intestinal ailment. Most physicians did not consider medication as the cause of the ailments.

Benicar & FDA Label Changes

Two years ago, the FDA issued a safety announcement advising the effects of taking Benicar.

Specifically, the communication stated “the enteropathy may develop months to years after starting olmestran and sometimes causes hospitalization . . . the sprue-like enteropathy has not been detected with ARB drugs other than Olmesartan.”

The FDA simultaneously approved warning labels for the medications to be changed, to include adequate warnings for medical providers and consumers.

This announcement prompted additional research on the issue within the medical community.

DOJ Action over Bribes

In addition to the pending cases, the Department Of Justice recently reached a $39 million settlement with Daiichi Sankyo, to settle charges that it illegally committed Medicare fraud and violated the False Claims Act for giving kickbacks to doctors who prescribed Benicar and similar medications.

Generally, when new pharmaceuticals are approved, a sales representative’s task is to educate medical providers on the changes in medical science. However, the reality is to persuade doctors to administer their drugs. In the DOJ case, doctors were taken to expensive dinners, paid for speaking engagements, and tickets.

Other lawsuits claim that Daiichi knew or should have known about the risk associated with the drugs for years and withheld the information from consumers and the medical community.