Class Action Litigation Settlements
There have been a number of significant settlements in class action litigation around the country. We will discuss several of them below.
Monsanto To Pay $39 Million In Roundup False Ad Class Settlement
Monsanto has settled claims in a proposed class action alleging that the company falsely advertised that the active ingredient in Roundup Weed & Grass Killer only affects plants. A $39.5 million settlement was agreed to that includes changing the labels on its products. The proposed class is led by named Plaintiff Lisa Jones.
It was alleged in the February 2019 suit that Monsanto falsely claimed through its labeling that glyphosate, the active ingredient in Roundup, targets an enzyme that is only found in plants and would therefore not affect people or pets. That enzyme is found in people and pets and is critical to maintaining the immune system, digestion and brain function.
According to the motion for approval, the litigation in other cases against Monsanto over Roundup – including Blitz v. Monsanto in a Wisconsin federal court – contributed to the settlement. Discovery conducted in Blitz was applied to this case.
The Plaintiffs in Blitz made similar claims against Monsanto in June 2017. After their class certification was denied in January 2019, named Plaintiff Thomas Blitz elected to continue his action individually. Blitz has now filed a stipulation of voluntary dismissal in his case.
The proposed class in the Jones case seeks to represent all people in the U.S. who bought Roundup that included the claim that glyphosate targets only plants within the applicable statutes of limitations for false advertising or breach of warranty in their states. Of the $39.5 million settlement fund, up to $1.3 million will go to administrating the settlement.
Each class member will be able to make a claim with proof of purchase or a statement under penalty of perjury, and will receive a payment of 10% of the weighted average purchase price of the products they bought. Any funding left over after the claims are paid out will go to charitable organizations to be picked later by the parties.
In addition, Monsanto has agreed to phase out the labeling claiming glyphosate targets an enzyme found only in plants, to be replaced by a statement saying glyphosate works by targeting an enzyme that is “essential for plant growth.” Consumers who purchase Roundup with the old labeling will be eligible to make a claim under the settlement.
In a statement sent to Law360, Bayer, which owns Monsanto, confirmed the settlement, adding this settlement is not related to the product liability multidistrict litigation (MDL) against Roundup in the Northern District of California, which is currently involved in mediation with Kenneth Feinberg. Beasley Allen lawyers, led by John Tomlinson, are involved in that litigation.
In the liability MDL, as we have reported, Roundup has lost its first three trials, with juries returning multimillion-dollar verdicts against the company. The company was ordered to pay out a $78 million verdict in the first trial in San Francisco state court, $80 million in San Francisco federal litigation and $2 billion in an Oakland, California, state court case involving a married couple both diagnosed with cancer.
A fourth case involving the claim that Roundup causes cancer was getting ready to begin in January on Monsanto’s home turf in St. Louis. Settlement talks put that trial on hold. The company said publicly at the time that it wants to resolve all claims.
The proposed class is represented by Kim E. Richman and Clark A. Binkley of Richman Law Group, Bryce B. Bell and Mark W. Schmitz of Bell Law LLC and Michael L. Baum and R. Brent Wisner of Baum Hedlund Aristei & Goldman PC.
The case is Jones et al. v. Monsanto Co., (case number 4:19-cv-00102) in the U.S. District Court for the Western District of Missouri.
Online Lender Settles Tribal Lending Suit For $141 Million
Online lender American Web Loan has agreed to a settlement worth $141 million to resolve a proposed class action accusing it and others of an illegal predatory lending scheme that exploited tribal immunity.
The settlement, which must still be approved by the court, calls for AWL Inc. to cancel tens of thousands of loans totaling $76 million and pay $65 million in cash to its U.S. borrowers going back as early as 2010. Entrepreneur Mark Curry is also required to exit as the lender’s CEO, among other provisions. The settlement would end a 2017 lawsuit filed by borrowers who have described AWL as “high-tech loan sharking designed for the digital age.”
According to the suit, this was accomplished by setting up AWL as an entity under the laws of the Otoe-Missouria Tribe of Oklahoma so the lender could claim exemption from state interest rate caps using the tribe’s sovereign immunity. But while loans were issued in AWL’s name, the borrowers alleged the company was just a front for Curry, entities he controlled and other outside investors that actually ran the operations, provided the funding for the loans and took on the associated risk but weren’t affiliated with the tribe. The borrowers said in their most recent complaint:
American Web Loan is not a legitimate arm of the tribe and tribal sovereign immunity does not shield American Web Loan or any other defendants from liability in connection with the unlawful online payday lending scheme.
The borrowers are represented by Kathleen M. Donovan-Maher, Norman Berman, Steven J. Buttacavoli and Steven L. Groopman of Berman Tabacco, Matthew B. Byrne of Gravel & Shea PC and David W. Thomas and E. Kyle McNew of MichieHamlett PLLC.
The case is Solomon et al. v. American Web Loan Inc. et al., (case number 4:17-cv-00145) in the U.S. District Court for the Eastern District of Virginia.
JPMorgan Settles Massive 401(k) Class Action
JPMorgan Chase & Co. has settled a massive Employee Retirement Income Security Act (ERISA) class action. Approximately 250,000 current and former employees had accused the bank of profiting from its 401(k) plan at workers’ expense. The bank notified U.S. District Judge Jesse M. Furman that the case was settled. The bank is to submit settlement papers by late May.
The lawsuit, filed in 2017, accused JPMorgan, dozens of company executives and several committees that oversaw the company’s 401(k) plan of violating ERISA. The suit accused the Defendants of including expensive investment options managed by JPMorgan’s affiliates in its 401(k) plan instead of cheaper alternatives, costing the plan participants millions of dollars.
U.S. District Judge Jesse M. Furman certified the case as a class action in June. The class contained about a quarter million current and former JPMorgan workers who kept money in the company 401(k) plan.
The class is represented by Joseph H. Meltzer, Lisa M. Port and Donna Siegel Moffa of Kessler Topaz Meltzer & Check LLP, Kai Richter, Carl F. Engstrom, Jacob Schutz and Mark E. Thomson of Nichols Kaster PLL, Samuel H. Rudman and Evan J. Kaufman of Robbins Geller Rudman & Dowd LLP, David S. Preminger, Tanya Korkhov, Lynn Lincoln Sarko, Derek W. Loeser, Erin M. Riley and Gretchen S. Obrist of Keller Rohrback LLP and Shannon L. Hopkins and Stephanie Bartone of Levi & Korsinsky LLP.
The case is Beach v. JPMorgan Chase Bank et al., case number 1:17-cv-00563, in the U.S. District Court for the Southern District of New York.
M&T Bank Workers Get Initial Approval Of $21 Million ERISA Settlement
A New York federal magistrate judge has given his initial approval to a nearly $20.9 million settlement to resolve an Employee Retirement Income Security Act (ERISA) suit claiming M&T Bank Corp. stuffed its workers’ 401(k) plan with the company’s own costly investment products.
U.S. Magistrate Judge Jeremiah J. McCarthy granted preliminary approval of the $20.85 million settlement. The judge also granted preliminary approval – for settlement purposes only – to a class consisting of people who participated in or were beneficiaries of the plan between May 11, 2010, and Sept. 30, 2019.
The workers claimed that the Defendants didn’t properly inspect the plan’s investment lineup to make sure every investment was cost-efficient, and that they kept proprietary funds in the investment lineup even though better-performing and lower-cost options were available. Additionally, the workers said the Defendants didn’t make sure the plan’s record-keeping expenses were kept low.
Beyond the monetary relief outlined in the settlement, the agreement also calls for other relief, like having an independent consultant review all M&T-affiliated funds in the plan.
The workers are represented by Paul J. Lukas, Kai Richter, Carl F. Engstrom, Jacob Schutz and Chloe A. Raimey of Nichols Kaster PLLP, Donna Siegel Moffa and Joseph H. Meltzer of Kessler Topaz Meltzer & Check LLP, Mark K. Gyandoh of Capozzi Adler PC and Lucinda Lapoff of Trevett Cristo. The case is In re M&T Bank Corp. ERISA Litigation, (case number 1:16-cv-00375) in the U.S. District Court for the Western District of New York.
Wilmington Trust Reaches $19.5 Million Settlement To End ERISA Class Action
Delaware-based money management firm Wilmington Trust has agreed to pay $19.5 million to settle an Employee Retirement Income Security Act (ERISA) class action accusing it of letting an energy company’s employee stock ownership plan pay millions more than it needed to in a $375.5 million stock purchase. The litigation claims Wilmington Trust breached its fiduciary duty under ERISA by bungling its oversight of a two-part stock sale that transferred ownership of Martin Resource Management Corp. to the Texas oil company’s employees by 2013.
The class action, filed in 2017 and certified in December, accuses Wilmington Trust of approving an employee stock ownership plan (ESOP) transaction that benefited Martin Resource Management Corp. and its executives much more than the company’s workers. The $375.5 million transaction transferred ownership of Martin Resource to workers by placing roughly 85% of the company’s stock in a new ESOP, which served as a benefit plan for workers. Workers already owned the rest of the company through an old ESOP. But the stock the ESOP bought from Martin Resource and its executives wasn’t worth $375.5 million, workers say. They accused Wilmington Trust – the money manager Martin Resource hired in 2012 to oversee the ESOP transaction – of allowing the ESOP to pay a significantly inflated price for the stock because it was getting paid by Martin Resource and thus had an incentive to act in the best interest of executives rather than workers.
ERISA forbids plan fiduciaries from acting in the interest of “a party whose interests are adverse to the interests of the plan.” By acting in Martin Resource executives’ interest, Wilmington Trust breached the fiduciary duty it signed up for when it agreed to oversee the transaction, the workers alleged.
The class is represented by Gregory Y. Porter, Ryan T. Jenny, Patrick O. Muench and David A. Felice of Bailey & Glasser LLP and Daniel Feinberg and Todd Jackson of Feinberg Jackson Worthman & Wasow LLP. The case is Choate v. Wilmington Trust NA, (case number 1:17-cv-00250) in the U.S. District Court for the District of Delaware.
Signet To Pay $240 Million To Settle Harassment-Linked Investor Suit
Signet Jewelers Ltd. Has reached a $240 million settlement with investors in a securities class action lawsuit. There have been mixed answers from courts last year as to whether statements in corporate codes of conduct can qualify as “material misrepresentations” under securities law.
The investors provided U.S. District Judge Colleen McMahon with a motion for preliminary approval of the settlement agreement resolving claims that Signet’s code of conduct and code of ethics falsely stated it was “committed to a workplace free from sexual harassment” and that it made employment decisions based on merit alone.
The investors claimed those statements were part of the company’s efforts to minimize fallout from a 2008 class action arbitration case filed by a group of female employees alleging discrimination by Signet’s subsidiary Sterling Jewelers Inc. based on their gender. When the accounts of those employees’ experiences became public in 2017, Signet’s share price dropped 13%.
Pursuant to the settlement agreement, the remainder of the settlement fund, after attorney’s fees and expenses, will be distributed to investors who acquired Signet stock between Aug. 29, 2013, and May 25, 2017. If approved after a fairness hearing tentatively planned for July, the settlement would be among the top 75 securities class action settlements ever reached, according to the investors.
The investors are represented by John Rizio-Hamilton and Rebecca Boon of Bernstein Litowitz Berger & Grossmann LLP and Jason Kirschberg of Gadow Tyler PLLC. The case is In re: Signet Jewelers Limited Securities Litigation, (case number 1:16-cv-06728) in the U.S. District Court for the Southern District of New York.
Wells Fargo Agrees To Pay $18.5 Million To Resolve Mortgage Claims
Wells Fargo has agreed to pay $18.5 million to settle claims that it denied loan modifications to eligible mortgage borrowers. A preliminary settlement agreement, filed in a California federal court, seeks approval of the proposed class action settlement. U.S. District Judge William H. Alsup was asked to sign off on the settlement amount, certify the proposed settlement class of roughly 500 Wells Fargo borrowers, appoint Plaintiffs Debora Granja and Sandra Campos as representatives for the settlement class, and appoint a pair of lawyers, one from Gibbs Law Group LLP and one from Paul LLP, as class counsel for the settlement class.
Pursuant to the proposed settlement terms, the fund would be distributed to class members based on the estimated value of what they lost when Wells Fargo denied their request for a loan modification due to an error in the bank’s algorithm. Each class member would get between $14,000 and $120,000, and the total sums they received would be determined by factors including their unpaid principal balance, the period of delinquency on their mortgage and how much the bank had already paid them over the error.
Additionally, $1 million was allocated to compensate class members “who suffered severe emotional distress as a result of the foreclosure of their homes,” which the class’ proposed administrator for that claim estimated would be sought by approximately 50 members of a 500-member class.
The borrowers are represented by Michael L. Schrag, Joshua J. Bloomfield and Linda P. Lam of Gibbs Law Group LLP and Richard M. Paul III, Ashlea G. Schwarz and Laura C. Fellows of Paul LLP. The case is Hernandez et al. v. Wells Fargo Bank NA et al., (case number 3:18-cv-0735), in the U.S. District Court for the Northern District of California.
Bank Of America, JPMorgan and RBS Agree To $25 Million Settlement In Libor Suit
JPMorgan Chase, Bank of America and RBS have agreed to pay out a combined $25.5 million to settle bondholders’ claims that they rigged the London Interbank Offered Rate (Libor). A request for initial approval of the settlement was filed in New York federal court.
The settlements totaling $25.5 million bring the total bondholder settlements to date to $68.625 million. The bondholder Plaintiffs previously reached settlements with other Defendants, including Barclays, HSBC, UBS and Citibank.
The court was also asked to certify two bondholder classes for settlement purposes: a combined Bank of America Corp. and JPMorgan Chase & Co. class, and a Royal Bank of Scotland Group PLC class. Both would be defined as any person or entity that owned U.S. dollar Libor-based debt securities between Aug. 1, 2007, and May 31, 2010. The bondholders said the proposed settlement classes are “functionally identical,” both to each other and to classes that the court has certified in previous settlements in this case.
The bondholders’ suit is one of many filed in the wake of Barclays Bank PLC’s admittance in 2012 that it had been one of a number of banks lying about the interest rates it actually expected to pay in order to artificially influence Libor. The investors contend the major financial institutions deliberately lowballed their submissions in the Libor rate-setting process to manipulate the benchmark. As a result, the banks took in hundreds of millions, and perhaps even billions, of dollars in ill-gotten gains, according to case filings.
The bondholders are represented by Karen L. Morris and Patrick F. Morris of Morris and Morris LLC, David H. Weinstein and Robert S. Kitchenoff of Weinstein Kitchenoff & Asher LLC and Thomas C. Goldstein and Eric F. Citron of Goldstein & Russell PC.
The immediate case is Gelboim et al. v. Credit Suisse Group AG et al., (case number 1:12-cv-01025) in the U.S. District Court for the Southern District of New York. The multidistrict litigation (MDL) is In re: Libor-Based Financial Instruments Antitrust Litigation, (case number 1:11-md-02262) in the U.S. District Court for the Southern District of New York.
Zimmer Biomet Agrees To $50 Million Investor Settlement
Medical device company Zimmer Biomet Holdings Inc. has agreed to pay $50 million to end investor claims it intentionally hid compliance problems at a critical manufacturing facility, thereby hurting its shareholders.
If approved, the settlement will resolve claims that date back to December 2016, when the investors accused the company of hiding compliance issues at a key Warsaw, Indiana, factory dubbed “North Campus.”
Zimmer had touted strong growth projections following a $13.4 billion merger between Legacy Zimmer and Legacy Biomet in 2015, the investors alleged. But investors claimed that the company soon realized that quality issues at its North Campus factory threatened to derail them. But when the U.S. Food and Drug Administration (FDA) began inspecting North Campus in September 2016, the agency immediately found deficiencies that led it to shut the factory down, devastating third-quarter revenue results, the investors claimed.
The Plaintiffs and the settlement class are represented by Kara M. Wolke, Robert V. Prongay, Jason L. Krajcer and Leanne H. Solish of Glancy Prongay & Murray LLP.
The case is Shah et al. v. Zimmer Biomet Holdings Inc. et al., (case number 3:16-cv-00815) in the U.S. District Court for the Northern District of Indiana.
Investors Seek Approval Of $44 Million Settlement With ER Operator
Investors in Adeptus Health have reached a $44 million cash settlement with the emergency room operator that could resolve claims that the company and its executives misled investors in securities offerings. A class of investors led by two pension funds asked the court to grant final approval of the settlement.
Adeptus Health Inc. went bankrupt in 2017. Lead Plaintiffs are Alameda County Employees’ Retirement Association(ACERA) and Arkansas Teacher Retirement System (ATRS). The Miami Fire Fighters’ Relief and Pension Fund is also a named Plaintiff in the suit. The investors accused Adeptus, its executives and Sterling Partners, its private equity backer, of misleading shareholders about the company’s business practices and its financial health. Company insiders allegedly misled shareholders on earnings calls as well as in the run-up to a pair of securities offerings in 2015 and 2016 that raised a combined $586 million, according to the complaint. The offerings’ underwriters are also named in the complaint.
The judge overseeing the case, U.S. District Judge Amos L. Mazzant III, preliminarily approved the settlement in January, saying the court would “likely” be able to grant final approval.
ACERA, ATRS and the settlement class are represented by lead counsel Jeremy P. Robinson and Abe Alexander of Bernstein Litowitz Berger & Grossman LLP. The lead Plaintiffs and settlement class, as well as Miami Fire Fighters’ Relief and Pension Fund, are also represented by lead counsel Gregory M. Castaldo, Richard A. Russo, Jr., Justin O. Reliford, Michelle M. Newcomer and Evan R. Hoey of Kessler Topaz Meltzer & Check LLP.
Matt Keil of Keil & Goodson PA is serving as additional counsel. Acting as liaison counsel for the Plaintiffs and settlement class are Clyde M. Siebman and Elizabeth S. Forrest of Siebman Forrest Burg & Smith LLP and George L. McWilliams of the Law Offices of George L. McWilliams PC.
The case is Oklahoma Law Enforcement Retirement System et al. v. Adeptus Health Inc., (case number 4:17-cv-00449) in the U.S. District Court for the Eastern District of Texas, Sherman Division.