Bank Of America Settles Overdraft Fee Class Action

Bank of America has won tentative approval of a $410 million settlement of lawsuits accusing it of charging excessive overdraft fees to roughly 1 million customers. The Bank is reported to be putting this money in escrow while they await the Court’s final approval. U.S. District Judge James Lawrence King in Miami granted preliminary approval for the agreement earlier this week and scheduled a hearing in November to consider final approval. The law firm that brought the class-action lawsuit says that about 1 million customers will be eligible for payments.

Bank of America, the largest U.S. bank by assets, is among more than two dozen U.S., Canadian and European lenders that had been named as defendants in the class-action litigation, which in 2009 consolidated lawsuits filed across the country. The other defendants include such banking giants as JPMorgan Chase, Citigroup and Wells Fargo.

Overdraft fees, which are typically $25 or $35, disproportionately burden customers with lower incomes or low account balances. In their November 2009 complaint, customers accused Bank of America of routinely processing debit transactions from largest to smallest rather than in chronological order. The term for this is “Resequencing” and it can cause the customer's balance to dwindle faster than it might have otherwise. When accounts fall fast, overdraft fees can start to rack up in the hundreds of dollars, even if the account had been overdrawn by just a few dollars.

Bank of America spokeswoman Anne Pace said in an email the Charlotte, North Carolina-based bank has eliminated overdraft fees for debit card transactions and significantly lowered fees for customers who overdraw excessively. Last year, the Federal Reserve prohibited banks from charging overdraft fees on electronic and debit card transactions without advance customer approval. Some banks have been aggressively urging customers to opt-in to overdraft protection but Bank of America no longer covers overdrafts on debit cards-it simply rejects the transaction at the point of purchase.

The case is In re: Checking Account Overdraft Litigation, U.S. District Court, Southern District of Florida, No. 09-md-02036.

Meanwhile, Wells Fargo has appealed an August 2010 court order that it pay $203 million to California customers in an overdraft case.

DePuy Pinnacle MDL Venue Set

On May 16, the Multi-District Litigation Panel heard oral arguments regarding venue placement for the DePuy Pinnacle MDL in Louisville, KY. All claims filed in federal court against DePuy and its parent company, Johnson & Johnson, are going to be consolidated under one Judge in one venue for purposes of discovery and pre-trial motions.

Both Plaintiffs’ and Defendants’ attorneys were present at the DePuy Pinnacle MDL venue hearing. Although Defense counsel in their filing argued for venue to be placed in the Northern District of Texas (Dallas), they orally argued for the Southern District of Texas (Houston). Of the nine Plaintiffs’ counsel arguing, eight either outright argued for or deferred for the MDL to be placed in Houston. Chris Hellums, of Pittman, Dutton & Hellums, P.C., argued for placement in the Northern District of Alabama (Birmingham). Mr. Hellums cited the District Judiciary’s expertise and familiarity with complex products liability cases and the convenience of the location to all parties as reasons to award the MDL to Birmingham.

Interestingly, the MDL Panel did not send the MDL to either of the two Districts that were orally argued for, but instead sent the DePuy Pinnacle MDL to the Northern District of Texas. The MDL venue Order was filed yesterday.

U.S. Supreme Court Rules Against Consumers

The U.S. Supreme Court, in a recent ruling, handed businesses such as AT&T a major victory by upholding the use of arbitration for customer disputes rather than allowing claims to be brought together as a group.

By a 5-4 vote, the Supremes ruled that the corporation could enforce a provision in its customer contracts requiring individual arbitration and preventing the pooling together of claims into a class-action lawsuit or class-wide arbitration. The plaintiffs, Vincent and Liza Concepcion, filed their class-action lawsuit in 2006, claiming they were improperly charged about $30 in sales taxes on cell phones that the AT&T Mobility wireless unit had advertised as free.

Companies and large corporations love arbitration because it is a less expensive way of settling consumer disputes, as opposed to costly class actions, which allow customers to band together and protect their interests as consumers. Customer arbitration agreements are widely used by cell phone carriers, cable providers, credit card companies, stock brokerage firms and other businesses. These arbitration agreements are so common now, they appear in almost every contract between a corporation and a consumer. They usually appear buried in the fine print of a lengthy contract agreement and consumers typically do not understand what they are signing away when signing the contract.

This may be the most important class action case ever decided by the Supreme Court because it has the potential to permit companies to escape class action liability in almost all of their activities. Not surprisingly, shares of AT&T closed up 1.55 percent at $31.42 on the New York Stock Exchange after the recent Court announcement.

AT&T praised the ruling, saying the Supreme Court recognized that arbitration often benefits consumers. "We value our customers, and AT&T's arbitration program is free, fair, fast, easy to use, and consumer-friendly," the company said. Most consumer advocates denounced the decision because class actions have been an essential tool to achieve justice in our society.

AT&T had argued that a federal law that encourages the use of arbitration, the Federal Arbitration Act, trumped a California consumer protection law at issue in the case.

In its ruling, the Supreme Court's conservative majority agreed."The California law in question stands as an obstacle to the accomplishment of the purposes and the objectives of the FAA. It is accordingly preempted," Justice Antonin Scalia said for the majority in reading his opinion from the bench. Scalia cited a federal judge's conclusion in the case that the couple was better off under the AT&T arbitration agreement than under a class action, which could take months or years and could result in their winning just a small amount of money.

The ruling, which reversed a decision by a U.S. appeals court in California, was the latest in a series by the Supreme Court in recent years that generally favored arbitration.

The court's four liberal justices dissented. "The Court is wrong to hold that the federal act preempts the rule of state law," Justice Stephen Breyer wrote in dissent. It is somewhat ironic that the majority, who claim to be advocates of States’ Rights, decided in favor or preemption.

The Supreme Court case is AT&T Mobility v. Concepcion, No. 09-893.

Another Headache for Zimmer

More than 200,000 potentially defective Zimmer NexGen knee components may have been implanted throughout the United States, which could have caused thousands of people to experience problems or require additional knee revision surgery due to early failure of their Zimmer knee replacement.

The majority, 85%-90%, of total knee replacements last for up to 10 years or even longer. However, some recipients of the Zimmer NexGen CR-Flex implant are experiencing loosening and other failures, sometimes within the first two years of surgery. In September 2010, the tibial portion of the Zimmer CR-Flex implant was recalled.

One reason for knee implant failure is the implant loosens from the femur bone where it is affixed. Loosening, for reasons other than infection or rejection, can occur because the cement holding it in place crumbles or the bone reabsorbs the cement used. In a standard knee implant, loosening is thought to occur in 1% of patients per year. Loosening will occur with knee implants 25% of the time after 10 years and require a second, revision surgery.

Loosening can be very serious to your health because movement between the implant and femur can impede blood supply to the bone tissue. When this occurs, only soft tissue can grow between the implant and the bone, which results in an unstable implant. The symptoms of loosening are often unusual stiffness, persistent pain, difficulty performing any weight bearing activity and diminished range of motion in the knee.

If you suspect that your implant may have loosened, it is important to see your physician. Your doctor will likely perform bone scans and X-rays to determine the viability of your implant. Our firm is currently investigating claims for those people who have Zimmer knee implants and have been injured. If you would like a free case evaluation, please contact Booth Samuels toll free at 1-866-515-8880 or at booths@pittmandutton.com.

Topamax: Another Headache For J&J

Topamax was first approved in 1998 by the FDA for the treatment of seizures due to epilepsy. The drug is also referred to by the generic name Topiramate.  In 2004, it was also approved for treating migraine headaches.  It has been increasingly reported that Topamax has been linked to serious birth defects such as cleft palate/cleft lip.  On March 4 of this year, the FDA required the manufacturers of Topamax to significantly strengthen warnings for the drug because of increasing data linking the product to certain types of birth defects including cleft lip/cleft palate and genital malformations including Hypospadias.

It appears that the greatest risk to the unborn baby comes from exposure to the drug during the first trimester of the pregnancy. During this extremely important developmental period, the mother may or may not know that she is pregnant. Therefore, it is not just women that know they are pregnant that are risk, but any woman of childbearing age taking Topamax could get unexpectedly pregnant and have a child with a cleft lip/cleft palate. One study shows that expecting mothers on Topamax are 21.3 times more likely to give birth to infants with oral birth defects (most notably, cleft lips or cleft palates) compared to the risk in a background population of untreated women.

Topamax is manufactured by Ortho-McNeil Pharmaceutical LLC, a subsidiary of Johnson & Johnson. From January 2007 through December 2010, approximately 32.3 million Topamax prescriptions were filled for over 4 million people in the United States.  Ortho-McNeil has made a fortune off of Topamax. 

J&J has had a large amount of recalled products in the last year and a half, notably the DePuy ASR Hip device recalled in the fall of 2010. In fact in April of 2011, J&J recalled close to 57,000 bottles of Topamax because of complaints of an odor. This odor is believed to be caused by trace amounts of a chemical used to preserve the wooden pallets the medicine sits on in storage -- that's the same cause that prompted gigantic recalls of Tylenol and other over-the-counter medications at McNeil Consumer Healthcare. The two companies are both part of Johnson & Johnson. Generic versions of the drug have been available since 2006.

In March of 2010, Ortho-McNeil pled guilty and paid $6.14 million in criminal fines for the misbranding of Topamax. Ortho-McNeil also paid an additional $75.37 million to resolve civil allegations (mostly reimbursement for fraudulent Medicare claims).   The U.S. government said that Ortho-McNeil promoted Topamax by hiring doctors to join sales representatives in promoting Topamax for unapproved uses in unapproved doses for medical indications not covered by those programs. Reports indicate they promoted the drug as a way to help with weight loss and pain. The federal share of the civil settlement is $50,688,483.52, and the state Medicaid share of the civil settlement is $24,681,516.48.

Our firm is currently investigating claims for those people who have been injured by Topamax. If you would like a free case evaluation, please contact Booth Samuels toll free at 1-866-515-8880 or at booths@pittmandutton.com.

Zimmer Durom Hip Problems

Zimmer hip replacement has been making the news ever since Dr. Lawrence Dorr, renowned orthopedic surgeon and director of the Dorr Institute for Arthritis Research and Education, alerted doctors and the medical community in 2008 with regard to a high failure rate of the Durom Acetabular Component, otherwise known as the Zimmer Durom Cup.

In his warning to doctors, Dorr referenced 10 revisions out of 165 hip surgeries involving the Durom Cup, with four additional surgeries then in the pipeline to replace failed Zimmer defective hip replacements.

"This failure rate has occurred within the first two years," Dorr writes. "In the first year the x-rays looked perfect. We have revised four that did not have any radiolucent lines or migration. These early cups fooled us, but the symptoms were so classic for a loose implant that we operated on the patients. When we hit on the edge of the cup it would just pop free. As time goes by the cups begin developing radiolucent lines.

"We now have one cup at two years that has actually migrated a short distance. It has tilted into varus. We do not believe the fixation surface is good on these cups. Also there is a circular cutting surface on the periphery of the cup that we believe prevents the cup from fully seating. We stopped using the cup after the first revisions."

Zimmer has refused to admit that there is a product defect with the Durom components and, instead, has argued that surgeons lack the required skill or finesse to be able to implant the Durom components. However, Zimmer stopped selling their hip replacement device in July 2008. The corporation went ahead and funded a study and found that 8 percent of the people that received the initial hip replacement required a revision surgery within a two year period. This has led many in the medical and legal communities to believe that the issue is with the replacement device and not with the surgeons.

Our firm is currently investigating claims for those people who have been implanted with Zimmer Durom hip replacement devices. If you would like a free case evaluation, please contact Booth Samuels at toll free 1-866-515-8880 or at booths@pittmandutton.com.