Tag Archive for class action

John Hopkins Hospital Settles A Class Action Lawsuit for $190 Million

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The world famous John Hopkins Hospital settled a class action lawsuit for $190 million from about 8,000 women and girls who claim they were violated by a gynecologist employed by the hospital. Dr. Nikita Levy, the doctor who conducted the examinations, committed suicide before he could be questioned by the authorities. According to news reports, there were over 1,000 videos taken and over 100 images taken of the women during their examinations. Gynecological exams are very intimate and knowing someone has violated that privacy can cause irreparable harm to the women affected. Many of the women claim they have since been traumatized because of the actions of the doctor.

The hospital will not have to pay the settlement because the hospital’s insurance policy will pay. Although 8,000 women and girls were part of the class action lawsuit, the Press-Herald reported Levy saw close to 13,000 patients. This is a huge blemish on the hospital’s record. Hospitals are prone to litigation because of the sensitive information they deal with and the medical procedures they conduct. Like any business, they are responsible for their employees actions. None more so than the doctors and nurses who work for them. Many tort reform advocates claim the litigation drives up the medical malpractice insurance which in turns drives the cost for doctors, surgeons, and hospitals. Incidents like the one at John Hopkins Hospital are why its important for people to push for litigation and assert their rights in court. While the price of justice is high, its important for any and all victims of any crime to seek compensation from those entities that are liable.

Australian Attorney Seeks Litigation Funding Within a Legal Grey Area

koala bear in australiaMaurice Blackburn is an Australian plaintiff’s law firm that is currently leading an equine influenza class action against the Commonwealth Government. As with many class action cases, this one requires an extraordinary amount of capital to call in experts, cover discovery costs, and accommodate witnesses. As many class action attorneys are wont to do, Maurice Blackburn decided to turn to a litigation funding company to ask for assistance. There is only one issue: Maurice Blackburn seems to be very cozy with Claims Funding Australia Pty Limited (CFA), the litigation funding company from which he is seeking funding. The chairman of Maurice Blackburn is a Director of CFA; the CEO, head of employment, and head of industrial law practice at Maurice Blackburn are CFA shareholders; and, significantly, all of the principals at Maurice Blackburn are beneficiaries of the trust that was formed to create CFA.

The litigation funding industry has raised many ethical questions, among them the roles of champerty and barratry. While many areas with established legal funding firms have adopted legislation to accommodate for any potential legal or ethical complications, the nebulous nature of the field does occasionally create new challenges that pre-existing legal ordinances may not account for. This is one of those challenges, and it appears to be two-fold.

The first part of this challenge is of a legal nature. The Federal Court that is involved with this case questions whether or not Maurice Blackburn and CFA are breaching rule 10.1.2 of the Legal Profession Act of 2004, which reads:

“A practitioner must not, in any dealings with a client exercise any undue influence intended to dispose the client to benefit the practitioner in excess of the practitioner’s fair remuneration for the legal services provided to the client.”

Maurice Blackburn argues that the law firm is not being influenced in any manner by the CFA; however, this matter is now left to the discretion of the court.

The other issue at hand is whether or not the potential arrangement between CFA and Maurice Blackburn will create a conflict of interest. New regulations took effect July 12, 2013 regarding conflicts of interest in the legal funding industry, and it is now considered an offence not to avoid such conflicts. If the courts do allow CFA to fund Maurice Blackburn, CFA will have to ensure that it can maintain a professional separation from its contacts at the law firm.

The publicity that this case has garnered in Australia has gained Federal attention. The incoming Coalition government is being presented with a proposal to effectively limit the interactions between law firms and any litigation funding firm with which they are associated. The implications and breadth of this proposal are as yet unknown. However, the decisions made by both the Coalition government and the Federal Court will be sure to have a significant impact on the future of litigation funding in Australia, if not elsewhere.

Written by Shayna Keyles

Class Actions Come to France

Eiffel TowerAfter nearly 30 years of discussions, debates and lobbying and several attempts to pass legislation without success, the government of Mr. François Hollande finally decided to introduce a class action regime in the French legal system. The proposed bill was passed in the Parliament on July 3rd, and while the proposal is expected to generate much debate before the French Senate, it is clear at this point that the main contours appear to be set.

France’s move takes place concomitantly with the release by the European Commission of a non-binding recommendation indicating that within two years all EU Member States should adopt mechanisms for “collective redress” which allow multiple claimants to seek damages or injunctive relief on a collective basis or through a representative claimant. This first EU’s pan-European, cross-sector initiative is aimed at creating a common framework for collective claims for breaches of rights granted under EU law. The features of the collective redress mechanisms that the Commission wants the member states to adopt include notably the following: (i) opt-in, (ii) prohibition of punitive damages, (ii) standing limited to non-profit making entities, (iii) certification test, (iv) information on collective redress actions that balances freedom of expression with the right to protection of the good name of the defendant, (v) loser-pays principle and (vi) restriction of third-party litigation funding.

Today, most European countries have already granted their national consumers the right to act in a collective action. This is notably meant to apprehend the immense harm done to society by infringement of competition law, i.e. approximately 20 billion of illicit profits annually made by professional, according to EU statistics.

In France, the proposed bill has been thought to avoid the alleged US adverse effects and to comply with several principles of French law (including the constitutional principle of “nul ne plaide par procureur” and the attorney solicitation prohibition).

1. Opt-in / Opt-out

The majority of French scholars and politicians have long been opposed to the idea of an opt-out class action (purportedly because the constitutional principle of “nul ne plaide par procureur” would require that all parties to a lawsuit be identified whereas some exceptions already exist in the French legal landscape). In the same way that they want to keep lawyers away from the litigation process.

Accordingly, the bill is based on an opt-in mechanism and does not allow lawyers to collect plaintiff claims and initiate class actions proceedings on their behalf. Instead, the 16 government-approved consumer associations are granted an exclusive right to introduce legal action on behalf of a minimum of two consumers.

The current bill provides that the group would not be constituted until after the court has ruled on liability. The decision as to who is “in” and who is “out” is therefore ultimately left to the court, leaving the defendant in a rather unsecure position where he will not be able to identify the group of claimants from the outset. The question as to whether or not such bill would be in breach with some constitutional principle, and more generally the right to a fair trial is an open question.

2. How will a class action be introduced?

The proceedings would comprise two phases, the first being the court ruling on the defendant’s liability and the second being the indemnification of the losses suffered.

a. Phase 1 – Liability

The class action will have to be brought by an approved national consumer association representing at least 2 consumers. The consumer association will take action against the professional seeking a judgment finding the professional liable.

b. Phase 2 – Group definition & damages

Assuming the defendant is and only if he is found liable at the first stage, the court will (i) define the group of affected consumers for which the liability is incurred and (ii) the amount of damages to be awarded for each consumer or each type of consumer (or the criteria enabling such calculation).

The decision would be published, at the defendant’s expense, after the time period within which an appeal can be made has lapsed and the court will enjoin the professional to inform the consumers who will then be able to join (specifying the time limit and the conditions).

The decision will also set whether the consumers may obtain damages either directly from the defendant or through the leading consumer association.

The bill further provides that starting a group action shall suspend the limitation period for individual claims.

This second phase is aimed at ensuring that the recovery of the damages and effective payment will occur.

Among the critics related to the exclusivity conferred upon national approved consumer associations to start any group action, one of the most convincing may well be the inconsistency with the principle of free and equal access to justice under the European Convention on Human Rights.

3. Scope: daily life disputes only

The scope of the bill is rather narrow. In particular, albeit not expressly, it excludes issues related to health and the environment.

Although it is clear that investors are sometimes consumers (see article L121-20-8 of the French Consumer Code), it remains unclear whether broad investors’ claims would fall within the ambit of the bill.

Accordingly, if individual investors acquiring shares and receiving misleading information may well be covered, it remains to be seen whether securities litigation are eligible to the class action scheme.

4. Follow-on antitrust class actions: consumers only.

The bill strictly limits the scope of antitrust class action litigation related to violations of EU and French antitrust rules, to follow-on class actions, i.e. until after the EU Commission and/or the French national competition authority has actually found an antitrust violation. Additionally, Antitrust class action litigation may only be filed on the basis of a final infringement decision, i.e. that either (i) the time-limit for challenging the decision has expired or (ii) the decision has been unsuccessfully challenged and can no longer be subject to appeal.

The victims will therefore be able to rely on a final decision to seek compensation, but like in any other civil case, they will have to demonstrate a causal link between the antitrust violation and their injury and to quantify the harm suffered.

Surprisingly, businesses have been left out from the class action scheme. Accordingly, the various participants in the supply chain, e.g., retailers, intermediaries and undertakings, will therefore have to continue to bring their damage claims under the standard rules of civil procedure.

5. Damages: only for the injury actually suffered

The French government believes that the threat of a class action would be sufficiently deterrent to hinder undertakings from engaging in illicit behaviour. It remains to be seen whether the awarded damages will be sufficiently dissuasive since no punitive damages will be available.

Under French law, the amount of damages that may be awarded cannot be greater than the actual injury.

The bill further specifies that only material losses (i.e. financial losses) could be compensated.

6. Third-party funding

The current bill raises many practical questions that will have to be addressed in the implementing legislation. In particular, it is clear that the approved consumer associations do not have the financial means to conduct detailed economic analyses to provide the courts with evidence on how much the class should be awarded. Even though the court may request that the professional pays an advance on cost to the consumer association, it is very likely that litigation finance will be needed to bridge the gap and/or fund the lawsuit from the outset.

Interestingly, on the European level, the EU recommendation requires claimant to declare the source of their funding, and third-party funders should be prohibited from influencing procedural decisions, including on settlement. Further, third-party funders should not be compensated on a contingency fee basis (i.e., paid a percentage of any settlement or damage award) unless third-party funding arrangements are subject to regulation by a public authority. It remains to be seen what this exactly means in terms of funding opportunities.

Alter Litigation FundingThis guest blog post was written by Frederic Pelouze of Alter Litigation, a French third-party litigation finance company. They fund a wide spectrum of claims throughout France and Europe, including commercial disputes, cartel damage claims, and international arbitration.

Black Farmers Attorneys Awarded $90.8 Million in Legal Fees

attorney fee fundingUnited States District Court Judge Paul Friedman has awarded the Black Farmers Class Action attorneys over $90 million in attorney fees using the maximum criterion of 7.4 percent of the settlement. The range was between 4.1 and 7.4 percent of the settlement. The case took a long time to settle given the amount of back and forth in court and the hesitation and somewhat reluctance by many in Congress to provide the funding that would compensate the black farmer plaintiffs and attorneys.

Advocates for the community like John Boyd and other sympathetic Congressional representatives were beating down the doors of government to get their just compensation while the small group of attorneys involved in the litigation won their battles in court. The judge applauded the attorneys on facing the challenge of this litigation and their dedication to seeing to a successful finish.

Even though attorneys were finally awarded their hard earned legal fees, it can still be many more months before they actually receive payment. This is where RD Legal’s post-settlement attorney fee funding program is a solution. RD Legal can purchase any settled legal fee with a payment delay at a discount and provide immediate capital. For more information, please call Joseph Genovesi, Senior Vice President of Business Development and Origination, at 201-568-9007, ext. 140.

$153 Million KPMG & Fannie Mae Settlement

153 million fannie mae settlementPlaintiffs from a 2004 class action lawsuit filed against KPMG LLP and Fannie Mae have finally settled against both companies for a reported $153 million. The settlement which has been reported by several media outlets will compensate shareholders who held common stock between April 2001 and December 2004. Fannie Mae and its sister organization Freddie Mac are government sponsored entities created by Congress. Several of the plaintiffs in the class action lawsuit were pension funds.

General Electric received a losing verdict in March of 2013 over what the jury determined to be their failure to warn patients and doctors about the dangers of its medical imaging dye. The jury awarded the plaintiff Paul Decker and his wife $5 million to compensate for their suffering. The dye which is manufactured by GE and marketed as Omniscan was used to highlight MRI scans but apparently caused a disease where the skin becomes thick and hard. According to news reports, the dye caused some side effects like severe kidney disease. It is reported there are some cases that deal with Omniscan still in litigation.

An investor settlement has received preliminary approval for an estimated $55 million. The lawsuit involved one group of investors suing another group of investors because of the tax treatment they would receive if an IPO were allowed to go through. The public offering of the REIT would have included the Empire State Building.

Written by Lulaine Compere.

Bank of America Settles Investor Class Action for $500 Million

mortgage backed securitiesBank of America has settled another class action lawsuit with another set of investors over the issue of mortgage backed investments that it assumed after it acquired Countrywide Financial. According to news reports, Bank of America has agreed to pay $500 million to the plaintiffs, mostly pension funds, to settle lawsuits over the quality of the mortgages.

The world economy entered a recession in late 2007 mainly because the housing market froze. Lenders who borrowed money at teaser interest rates faced new steeper rates. Lending standards increased and investors stopped buying mortgage backed securities because news about the quality of the mortgages became public. Once investors found out, numerous class action lawsuits were filed against the huge banks, and many of them are still being litigated in court. This settlement is another in what seems to be an endless amount of lawsuits concerning mortgage backed securities.

RD Legal Funding, LLC (“RD Legal”) can provide interim post-settlement financing to plaintiff’s attorneys with Bank of America-Countrywide Financial settlements, which provides immediate capital on slow-paying settled legal fees. Lawsuit funding does not require any kind of payments until the fee is paid; there are no monthly interest or principal payments, no upfront points or fees. Once the necessary documentation is received, RD Legal can wire funds within several days. RD Legal provides personalized service and quick turnaround.

To find out more about RD Legal’s law firm funding solutions, please call Joseph Genovesi toll-free at 1-800-565-5177. For more details about RD Legal’s Fee Acceleration program, please visit our attorney fee funding page.

Written by Lulaine Compere

RD Legal Offers Funding to Plaintiff’s Attorneys with General Electric Settlements

stock-market-fluctuationsGeneral Electric has agreed to settle a class action lawsuit by its shareholders over allegations it hid its exposure to subprime loans from them. The company is expected to pay $40 million to compensate the shareholders, most of them pension funds, for losses they suffered beginning 2008.

General Electric is one of the most successful companies in the world. Mostly known as a builder of items like air conditioners and light bulbs, its subsidiary, GE Capital, is a huge force in the world of finance. News stories about the settlement detail the plaintiffs’ accusations against GE Capital and their involvement in a 2008 stock offering which threatened the company’s financial position. That move caused them to lose their “AAA” credit rating, resulting in a dividend cut of almost 70%. GE is one of many companies who faced lawsuits because of their exposure to subprime loans.

Plaintiff’s attorneys with General Electric settlements are eligible for post-settlement attorney fee financing from RD Legal Funding, LLC (“RD Legal”) which provides immediate capital on settlements. Lawsuit financing does not require any kind of payments until the fee is paid; there are no monthly interest or principal payments, nor are there any upfront points or fees. Once the necessary documentation is received, RD Legal can wire funds within several days. RD Legal provides personalized service and quick turnaround.

For more information about RD Legal and their cash flow management solutions, please call Joseph Genovesi, Senior Vice President of Business Development and Origination, at 1-800-565-5177, ext. 140. To begin the application process, please fill out our brief online application.

Written by Lulaine Compere

Xerox Subsidiary Pays $4.5 Million to Settle Class Action

According to news sources, a Xerox subsidiary Affiliated Computer Services Inc. has to pay $4.5 million to settle a class action lawsuit from employees who claim they weren’t paid for their work. The estimated 20,000 employees, former and current, are expected to receive between $50 and $260.

The plaintiffs alleged ACS did not pay proper wages and overtime at their call centers. They also claimed the company failed to pay bonuses and failed to count bonuses when adding overtime.

Written by Lulaine Compere.

Price Fixing Class Action Lawsuit against Online Travel Sites

There seems to be a price fixing epidemic going on with different industries: the banks, technological developers, retailers, and now travel deal companies.

A class action lawsuit against Expedia, Travelocity, and big hotel chains like the Hilton and the Sheraton is accusing them of being in concert with each other to fix prices for hotel rooms. According to some news reports, booking agencies were pressured to raise rates to be at the same level as their competitors, who charged higher prices for the rooms.

Read the article in its entirety at marketplace.org.

Written by Lulaine Compere.

Human Rights Abuses in China

The International Commission of Jurists published a paper about human rights abuses in China involving corporations. The report talks about the dynamics of how power works in the country between private companies and the state. The pursuit of human rights abuses would put that relationship in jeopardy.

Incidents like the Sichuan earthquake or the coal mine accidents would lead to lawsuits in most developed countries. This report comes out even as others report a growth of litigation funding in parts of the country like Hong Kong and a growing number of class actions arising in China.

While China still has a long way to go in regards to civil law and litigation, the country is taking steps that may one day lead to it being a full part of their legal system rather than an occurrence. The authors give some ideas on what kind of reforms would help China along the way, including more freedom and wider role for civil society and trade unions, as well as creating a victim-friendly litigation environment.

Written by Lulaine Compere.