We are featuring ongoing activity this month in our firm’s Consumer Fraud and Commercial Litigation Section, which is managed by Section Head Dee Miles. Michelle Fulmer is the Section Administrator and she helps coordinate the work of the Section. Currently, there are 11 lawyers and 19 support staff in the Section. They have all been very busy during the first half of 2016. The Section is currently investigating and/or litigating the cases in the areas set out below.

Class Actions

Our firm’s class action practice is rapidly growing. We have cases filed all over the country ranging from consumer fraud, Antitrust, employment abuses, ERISA (Employee Retirement Income Security Act) to product liability and nuisance cases. This area of the law continues to grow due to the corporate abuses occurring in the business world. Oftentimes the class action is the most efficient legal vehicle to rectify a large scale “wrong” because while corporate abuse may have caused someone or a business harm, the harm is small, yet widespread. Some say a class is appropriate when “nobody gets ‘hit’ for much, but everybody does get ‘hit.’” Well, the “hits” keep coming and the class action cases continue to be filed.

While arbitration clauses have had some limited impact on class action filing, it has not proved to be the effective deterrent corporate America had hoped for. This is mainly due to the courts finally recognizing that arbitration was never intended to be utilized in consumer contracts. It was designed for complex business transactions involving sophisticated parties in specialized areas of business. However, corporations have abused the use of arbitration clauses to frustrate consumer resistance to their fraudulent practices; thus, it has resulted in a profit-making measure for corporate America.

Just because a consumer contract has an arbitration clause, that doesn’t mean a class action on the abusive corporate conduct is barred. There may be ways around the arbitration clause and a lawyer familiar with the ever-changing law on this issue can make that determination. Archie Grubb and Andrew Brashier, lawyers in the section, are well versed in the area of the law surrounding both class actions and arbitration clauses. We review many potential class actions daily and welcome the opportunity to review more.

Volkswagen/Audi/Porsche Emissions Defect

Lawyers from Beasley Allen joined with other firms to file a nationwide class action lawsuit on behalf of consumers that own Volkswagen, Audi and Porsche vehicles who were deceived by the automaker’s deliberate end run around Environmental Protection Agency (EPA) pollution controls. We were most fortunate to have been selected by Judge Charles R. Breyer, United States District Judge in California, located in San Francisco, Calif., to serve on the Plaintiff’s Steering Committee (PSC) of this most important case. Dee Miles was selected by the court and his been quite busy on this case so far this year. The EPA has filed notices of violation (NOV) against VW, accusing the automaker of selling diesel vehicles equipped with software that disguises vehicles’ true nitrogen oxide (NOx) emissions, and covering up violations of the Clean Air Act.

The EPA cited Volkswagen and its affiliates Audi AG and Volkswagen Group of America. The NOV alleges VW and Audi diesel cars from model years 2009-2015 include a so-called “defeat device.” The device allows deliberate deception, turning on pollution controls only during official tests, while actually allowing the vehicles to run “dirty” during normal operation. Tests reveal NOx emissions up to 40 times higher than the federal standard.

The emissions cheat affects the following vehicles:

• VW Jetta (2009-2014)
• VW Beetle (2013-2015)
• VW Golf (2010-2015)
• VW Passat (212-2015)
• VW Toureg (2009-2016)
• Audi A3 (2010-2015)
• Audi A6 Quattro (2014-2016)
• Audi A7 Quattro (2014-2016)
• Audi A8/A8L (2014-2016)
• Audi Q5 (2014-2016)
• Audi Q7 (2009-2016)
• Porsche Cayenne (2014-2016)

Our firm is also representing the Environmental Protection Commission of Hillsborough County, Fla., in a case against Volkswagen, Audi, and Porsche to recover statutory penalties for violations of a local clean air ordinance for these allegations. The illegal defeat devices installed in the Defendants’ diesels affect more than 1,000 vehicles in the greater Tampa area. If you own one of the affected vehicles, you may have a claim. You can contact one of our class action lawyers for more details.

Lawyers: Dee Miles, Archie Grubb, and Clay Barnett
Primary Staff Contacts: Michelle Fulmer and Whitney Gagnon

Life Insurance

Our firm has recently filed a class action complaint against Banner Life, alleging that the cost of insurance increases Banner has implemented on certain policies are unfounded. Policyholders are seeing increases of more than 500 percent in some cases, and the cash value of their policies are being stripped down to nothing in a matter of months. It appears that these increases have been executed ultimately to benefit shareholders and rid the company of near-term liabilities it has accrued due to its wrongful use of captive reinsurance companies. Beasley Allen represents the policyholders in an effort to recover the excess insurance costs paid out-of-pocket or stripped from the value of the policy. Additionally, we are looking into many other life insurance companies with similar unfair practices and welcome the opportunity to review additional policies that have seen sudden increases in costs or premiums.

Lawyers: Dee Miles, Andrew Brashier, and Rachel Boyd
Primary Staff Contacts: Michelle Fulmer, Ashley Pugh, and Ashley Burgin

Takata Air Bags

Lawyers in the Section have filed a class action lawsuit for economic losses related to the potentially defective air bags manufactured by Takata Corporation. We were fortunate to have been selected by the MDL Leadership to conduct discovery in this case and are working furiously to move this case along to trial and class certifications. While vehicle owners and drivers could not have known about the potential danger posed by the air bags, the Defendants knew about the defect and failed to disclose it to consumers and actively concealed that defect from the public and federal regulators. It was not until December 2011, when the fifth recall related to the same defect was issued, that Honda finally reported the injuries and deaths related to the Takata air bags to federal regulators. To date, more than 14 million vehicles with Takata-manufactured air bags have been recalled due to the defects.

Lawyers: Dee Miles, Archie Grubb, Clay Barnett, and Andrew Brashier
Primary Staff Contacts: Michelle Fulmer, Ashley Pugh, and Whitney Gagnon

General Motors

The consumer fraud section is also involved in the class action lawsuits against General Motors for its conduct relating to the faulty ignition switch. Unlike claims for personal injury and death, which the firm is also handling in a different section, the fraud claims are seeking compensation for economic losses incurred by owners of the defective vehicles.

Lawyer: Dee Miles
Primary Staff Contacts: Michelle Fulmer and Ashley Pugh

Talc

The firm is representing a class of California citizens who were deceived into believing that Johnson and Johnson’s talc-based products were safe and purchased those products for genital hygiene use. Some recent studies have demonstrated a significantly increased risk of ovarian cancer for women who use talc-containing products on their genitals. Johnson and Johnson has been aware of the risk, or should have been, for years, yet the company continues to market its products as safe for daily use. These citizens would not have purchased the baby powder and other talc products had they known of the increased risk of ovarian cancer, but thanks to Johnson and Johnson’s marketing, believed they were purchasing and using a safe product. Beasley Allen represents these citizens in an effort to recover the money they spent on these cancer-causing products that they would not have spent absent Johnson and Johnson’s marketing.

Lawyers: Dee Miles, Lance Gould, and Ali Hawthorne
Primary Staff Contacts: Holly Busler and Jessica Stapp

Oil and Gas

The firm also filed a class-action complaint against XTO Energy, Inc. in Arkansas. The case involves royalties owed to landowners for the sale of natural gas. The landowners signed leases with XTO granting it the right to drill and produce natural gas and constituents. In exchange, XTO was to pay the landowners royalties as a share of the production income. Instead of selling the gas in arms-length transactions on the open market, XTO sells to affiliates at grossly inadequate prices. Landowners’ royalty payments are calculated off that first sale. The XTO affiliate or related entity that first purchased the gas then sells the products at market price. XTO keeps the difference between what it would have paid in royalties to the landowners had those first sales been made at market price and the fraudulently low royalties it actually did pay the landowners. Beasley Allen is representing the class of landowners and is seeking to recover the money those landowners would have received had XTO properly sold the natural gas on the market.

We are pursuing a similar case in Monroe, La.

Lawyers: Lance Gould, Larry Golston and Leslie Pescia
Primary Staff Contacts: Holly Busler and Whitney Gagnon

Target Data Security Breach

Target Corporation, which is headquartered in Minnesota, suffered a massive data breach that is believed to have taken place primarily between Nov. 27 and Dec. 15, 2013. It was originally believed to have affected about 40 million Target shopper accounts including credit and debit card information. However, after further investigation, Target officials revealed that hackers stole not only information from cards used by shoppers at Point of Sale (POS) machines, but that other information was compromised, including names, phone numbers, email and mailing addresses from more than 100 million other customers. Beasley Allen filed two class action lawsuits in the wake of the Target data breach, one on behalf of consumers whose information was compromised, and another on behalf of Alabama State Credit Union as lead Plaintiff representing credit unions, banks and other financial institutions. Both cases have settled and are in the final stages of approvals and appeals. We were fortunate to have been selected by the court to serve on the Plaintiffs Steering Committee for the financial institutions in this important MDL.

Lawyers: Dee Miles, Larry Golston, Andrew Brashier, and Leslie Pescia
Primary Staff Contacts: Michelle Fulmer, Ashley Pugh, and Ashley Burgin

Home Depot Data Breach

Dee Miles was appointed to the Plaintiffs Steering Committee (PSC) representing financial institutions in the Multidistrict litigation (MDL) over a massive Home Depot data breach. The litigation involves consumer and financial institution Plaintiffs who were affected by the incident, which compromised up to 56 million credit and debit card numbers. The cyberattack is believed to have occurred at Home Depot stores between April and September of 2014. The MDL Court recently denied Home Depot’s Motion to Dismiss and will allow the claims to move forward and our firm will be leading the charge on the discovery, trial and possible settlement of this important consumer litigation.

Lawyers: Dee Miles, Larry Golston, Andrew Brashier, and Leslie Pescia
Primary Staff Contacts: Michelle Fulmer, Ashley Pugh, and Ashley Burgin

Community Health Systems

Community Health Systems, a Tennessee-based hospital system, said it is contacting patients whose personal information may have been compromised last year in a data breach apparently originating from China. The cyberattack may have exposed as many as 4.5 million patients who were referred to the hospital or received services in CHS-affiliated hospitals over the past five years. The CHS data breach came just weeks after the company agreed to pay the U.S. government more than $98 million to resolve lawsuits filed by several whistleblowers who alleged the company cheated Medicare, Medicaid, and other taxpayer-funded health care programs through fraudulent billing practices. Lawyers in our Fraud Section are talking to patients whose data has been compromised in the CHS data breach. Once again, we are fortunate to have been selected by United States District Judge, Karen Bowdre, to serve on the Plaintiffs Steering Committee. Gibson Vance is serving on that committee assisted by Andrew Brashier. The case is proceeding swiftly and we look forward to a good result for consumers.

Lawyers: Dee Miles, Archie Grubb, Larry Golston, and Andrew Brashier
Primary Staff Contacts: Michelle Fulmer, Ashley Pugh, Heidi Bowers, and Whitney Gagnon

Anthem Health Insurance

Anthem is the second-largest health insurance company in the U.S. Anthem representatives say they believe the cyberattack successfully compromised customer names, birthdays, medical IDs, social security numbers, street addresses, e-mail addresses and employment records. Employee records also were compromised. More than 80 million personal Anthem customer records are now at the mercy of unidentified hackers due to a data breach reported by Anthem Inc. Many Anthem brands were affected by the data breach, including Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia, Empire Blue Cross and Blue Shield, Amerigroup, Caremore, Unicare, Healthlink, and DeCare. Lawyers in Beasley Allen’s Consumer Fraud section are handling claims for losses on behalf of consumers and financial institutions related to data breaches.

Lawyers: Dee Miles, Larry Golston, and Andrew Brashier
Primary Staff Contacts: Heidi Bowers and Whitney Gagnon

Armstrong Chinese Laminate Flooring

Our firm recently filed a class action against Armstrong Flooring, Inc. and Lowe’s for manufacturing and selling formaldehyde tainted laminate flooring manufactured in China. Like other Plaintiffs suing Lumber Liquidators over imported toxic flooring, our Plaintiffs accuse Armstrong of outsourcing manufacturing to untrustworthy Chinese mills that utilize excessive amounts of formaldehyde to save time and money. Formaldehyde use in product manufacturing is regulated by the EPA and by a powerful California state law. Testing of Defendants’ laminate flooring showed formaldehyde levels far exceeding the federal and state limits. Formaldehyde exposure increases the risk of cancer and leukemia and can cause burning eyes, nose and throat irritation, coughing, headaches, dizziness, and nausea. Toxic flooring may be especially dangerous to toddlers and young children who play and crawl on the floor and have underdeveloped immune systems. The Plaintiffs’ particular Armstrong laminate floor model is Woodland Walnut, although Armstrong likely imported numerous models featuring similar levels of contamination from 2012 forward.

Lawyers: Dee Miles, Clay Barnett, Archie Grubb, Andrew Brashier, and Rachel Boyd
Primary Staff Contacts: Michelle Fulmer, Brenda Russell, and Whitney Gagnon

Silent Recalls

Lawyers in the Section are investigating numerous safety defects involving multiple auto manufacturers and varying models. Although there are more active recalls now than ever before, every potential defect has not necessarily been placed under a mandatory recall. Auto manufacturers commonly conduct “silent recalls” – where the dealer only repairs a defect once a consumer complains about the specific defect even though the manufacturer is aware of the defect. This practice leaves thousands of American motorists unaware of the defective components in their vehicles. Alternatively, auto manufacturers are able to conduct regional recalls that are only disseminated to a particular region, leaving consumers outside the specified region unaware of the recall. Under this process, the same make and model under recall in one state may not be under recall just over the state line. If you have a vehicle with a safety defect and the manufacturer has refused to repair your vehicle under the warranty, then you may have a case. Contact one of our class action attorneys for more details.

Lawyers: Dee Miles, Archie Grubb, Clay Barnett, and Andrew Brashier
Primary Staff Contacts: Whitney Gagnon and Ashley Burgin

ERISA litigation

The Employee Retirement Income Security Act of 1974 (ERISA) dictates certain minimum standards for voluntarily established health and benefit plans. Employers sometimes violate the requirements of ERISA, to the detriment of their employees. If these violations are plan-wide, or affect a large number of employees, it is possible to form a class to seek recompense and/or to force compliance. Please contact us with information regarding any instances where ERISA’s requirements have been violated; we are particularly interested in self-funded employee health benefit plans.

Lawyers: Dee Miles and Rebecca Gilliland
Primary Staff Contacts: Michelle Fulmer, Ashley Pugh, and Amanda Richards

Qui Tam Cases

A qui tam action involves a private party, called a relator, who asserts claims on behalf of the government. Although the government is considered the real (named) Plaintiff, if the action is successful, the relator receives a share of the award. Most qui tam actions are brought under the federal False Claims Act (FCA), 31 U.S.C. § 3729, et seq., although many States have adopted their own false claims acts. The successful results speak for themselves – more than $34 billion in recoveries since 1986 – and that tells us a powerful story. Our firm is currently involved in a number of these qui tam cases throughout the country.

Qui tam actions typically begin with an employee witnessing his/her employer defrauding the government. The employee may later consult with an attorney on another matter, but convey their knowledge of false information being given to the government. Attorneys need to be on the lookout for such information and recognize potential claims.

It takes vigilance and courage for these private individuals, commonly referred to as “whistleblowers,” to report fraudulent activity; but without them, the vast majority of fraud against our government would go undetected. Recognizing the perils faced by whistleblowers, legislators have passed laws protecting individuals who take a stand against fraud. 31 U.S.C. § 3730 prohibits discrimination and retaliation against whistleblowers and imposes strict penalties, including double back pay with interest, on violators.

Additionally, if a qui tam action is successful, the whistleblower receives between 10- 30 percent of the Government’s recovery. Damages under the FCA include penalties and “three times the amount of damages which the Government sustains” due to the fraud. 31 U.S.C. § 3729(a)(1)(G). In short, the law protects and rewards whistleblowers for their instrumental role in exposing and prosecuting fraud. Lawyers in our firm have waged war against corporate fraud for more than 30 years and would welcome the opportunity to assist with any qui tam actions that any of our readers may have.

One such case recently settled by our section involved the failure of United States Investigations Services LLC (USIS) to perform quality-control reviews when investigating backgrounds of potential U.S. Office of Personnel Management employees. For examples, USIS vetted former CIA employee and NSA contractor Edward Snowden before he famously leaked documents. It also vetted Aaron Alexis, who shot 12 people to death at the Washington Navy Yard recently. The complaint alleges that the company used an internal program to automatically release background checks prior to their completion to increase profits; USIS was paid monthly for completed background checks, so those incomplete checks were non-billable. Instead of completing the work, the whistleblower alleges, USIS automatically cleared the background checks in order to submit claims for payment. We will include a number of important developments relating to whistleblower claims in another Section of this issue.

Lawyers: Dee Miles, Larry Golston, Archie Grubb, Clay Barnett, Andrew Brashier, and Rebecca Gilliland
Primary Staff Contact: Holly Busler

Antitrust Cases

Lawyers in the Section continue to investigate and litigate antitrust cases. Antitrust law is the law of competition. Society is better off if buyers and sellers act independently, not in concert. Antitrust law focuses on the promotion of competition through restraints on monopoly and cartel behavior. Typical cases involve attempts to monopolize, price fixing, exclusive distributorships, refusals to deal, tying arrangements, and mergers and acquisitions. We believe that antitrust is a growing area, as corporations increasingly tend to “cross the line” as they seek to gain advantage in this tough economy. The firm is currently involved in antitrust litigation involving several pharmaceutical companies, Blue Cross Blue Shield, and manufacturers of capacitors.

Lawyers: Archie Grubb and Clay Barnett
Primary Staff Contact: Michelle Fulmer

Pay for Delay

Lawyers in the Section have been researching a developing area of law related to pay for delay schemes. As a result of the illegal agreements between brand and generic pharmaceutical manufacturers, citizens, pharmacies, wholesalers, the states, and other insurers all paid grossly inflated prices for brand drugs when they otherwise would have paid reduced prices for generics. The firm has been working with several states to develop a case to recover the damages suffered as a result of those fraudulently and illegally increased pharmaceutical prices.

Lawyers: Dee Miles, Roman Shaul, Ali Hawthorne, Rebecca Gilliland, and Leslie Pescia
Primary Staff Contacts: Jessica Stapp and Brenda Russell

Blue Cross Blue Shield

Beasley Allen is currently involved in an antitrust cases dealing with Blue Cross Blue Shield’s illegal actions. The BCBS case involves the Blues’ agreements not to compete with each other. BCBS has separate companies that cover different geographical regions of the country. Those individual companies agreed amongst themselves to stay out of other geographic regions. For example, BCBS of Alabama and BCBS of Mississippi agreed to not compete with each other for providers (hospitals and physicians) or subscribers (individual and group policyholders). Normally, competition in a certain area drives costs down with each company trying to be the lowest available. Absent competition, the companies were able to set prices for both reimbursement and premiums at any price they chose.

Fortunately, we are honored to be serving on the leadership of this multidistrict litigation (MDL) case and are diligently pursing discovery in the case as the Alabama portion of this MDL is headed for trial in 2017.

Lawyers: Dee Miles, Archie Grubb, and Rebeca Gilliland
Primary Staff Contacts: Michelle Fulmer, Ashley Pugh, Whitney Gagnon, and Amanda Richards

Capacitors

The capacitor litigation involves a price-fixing scheme. Capacitors are, generally, tiny but are in nearly every electronic device on the market. The manufacturers agreed amongst themselves to only sell their products at a certain price, one that is above what normal market conditions would dictate. Their actions caught the attention of several United States and foreign agencies, including the Department of Justice, who are investigating the illegal agreements. Beasley Allen and other national firms we are working with moved quickly to recover damages for those directly injured by the price-fixing scheme.

Lawyers: Roman Shaul, Archie Grubb, Ali Hawthorne, Andrew Brashier, and Rebecca Gilliland
Primary Staff Contacts: Jessica Stapp, Holly Busler, Whitney Gagnon, Brenda Russell, and Amanda Richards

Pharmaceutical Litigation
The firm handles a wide array of cases dealing with the pharmaceutical industry. These cases include AWP, unapproved drugs, Actos, Granuflo and many others.

State Attorney General Representation

AWP

Our firm has represented the States of Alabama, Alaska, Hawaii, Kansas, Louisiana, Mississippi, South Carolina and Utah in a series of cases against pharmaceutical companies, known as the Average Wholesale Price (AWP) litigation. These states allege that pharmaceutical companies’ falsified pricing information, causing state Medicaid agencies to grossly overpay for prescription drugs. The manufacturers’ false and inflated AWPs (average wholesale prices) caused pharmacies to shop for drugs that offered the highest reimbursement from the State. The inflated AWPs in turn provided higher sales revenue, volume and market share for the drug companies, and created dramatically steeper costs for the states.

Juries have returned more than $600 million in verdicts for the States of Alabama, Mississippi, Kentucky, Wisconsin, Missouri and Massachusetts. We recently won the appeal of a $30 million verdict in Mississippi Supreme Court regarding Sandoz, Inc. Meanwhile, our firm has settled with many companies in all eight states for more than $1 billion and completed the litigation in all states, with the exception of a few trials remaining in Utah.

Lawyers: Dee Miles, Roman Shaul, Clay Barnett, and Ali Hawthorne
Primary Staff Contacts: Jessica Stapp and Brenda Russell

Molina/Unisys

At the conclusion of the AWP cases in Louisiana, the state discovered that its’ data-processing firm, Molina, appears to not have been utilizing the correct reimbursement rate in processing payments to pharmacies. Instead of the computer system automatically calculating reimbursements with the state-approved formulary, Molina programmers apparently input the wrong data points, resulting in overpayments. Beasley Allen represents the State in seeking to recoup those overpayments from the party that caused them, which appears to be Molina.

Lawyers: Dee Miles, Roman Shaul, and Ali Hawthorne
Primary Staff Contacts: Jessica Stapp and Brenda Russell

Unapproved Drugs

In order for a state to reimburse pharmacies for dispensing drugs to state Medicaid beneficiaries, those drugs must be FDA approved. By manipulating the system, some pharmaceutical manufacturers have been able to sneak certain drugs that have not been FDA approved onto the state Medicaid reimbursement without alerting anyone. States have reimbursed pharmacies for dispensing these drugs, unaware that they were not FDA approved, and, therefore, ineligible for reimbursement. Beasley Allen represents the State of Louisiana in seeking to recover Medicaid reimbursements for these ineligible drugs and we are consulting with other state attorneys general.

Lawyers: Dee Miles, Lance Gould, and Ali Hawthorne
Primary Staff Contacts: Holly Busler and Jessica Stapp

GranuFlo

GranuFlo is a dialysate product used in the hemodialysis process. Several years ago Fresenius, the manufacturer of GranuFlo, realized that through a natural biological process, its product created a significantly increased risk of cardiac distress and death when not administered in a different dosage than every other dialysate product on the market. It appears that instead of warning clinics, physicians, consumers, and the states, Fresenius remained silent about the risk. Once the risk came to the attention of the FDA, Fresenius notified its own clinics to adjust their dosage, but it appears it did not notify those owned and operated by non-Fresenius companies. Eventually, the true risk information became public. There are several cases filed against Fresenius alleging that the Defendants actions caused injuries to individual users. Beasley Allen represents the State of Louisiana in seeking to recover for the reimbursements it made and damages it suffered because of the claims submitted to the state’s Medicaid office for this substandard product and Fresenius’ failure, through its marketing to physicians, clinics, and citizens, to inform its customers of the proper dosage requirements.

Lawyers: Dee Miles, Lance Gould, Ali Hawthorne, and Rebecca Gilliland
Primary Staff Contacts: Holly Busler and Jessica Stapp

Pay For Delay

As mentioned previously, Beasley Allen has been researching a developing area of law for a little more than a year that deals with the intersection of Antitrust law and Patent law. The cases have gained attention in the last two years because of the United States Supreme Court’s reversal last year of an Eleventh Circuit decision. The FDA regulates and approves drugs for marketing and sale for human use. When a generic drug manufacturer seeks FDA approval for a new generic version of an already approved brand drug, the generic manufacturer has to certify that the generic either will not infringe on any patents for the brand, or that those patents are invalid. Inevitably, the brand manufacturer objects to the certification and sues the generic for patent infringement. The two manufacturers almost always settle. As part of that settlement, the generic manufacturer agrees not to enter the market for that drug for a certain time period. That agreement, as an agreement not to compete and to extend a monopoly to the brand manufacturer, is in violation of federal and state antitrust laws. Without competition, the prices for the brand drug remain high – well above what the market would dictate absent the agreement between the two manufacturers. As a result, citizens, pharmacies, state Medicaid agencies, and insurance companies have all been paying grossly inflated prices for brand pharmaceuticals when they could and would have purchased generic drugs at much lower prices. The firm has been working with several states to develop a case to recover the damages suffered as a result of those fraudulently and illegally increased pharmaceutical prices. These cases have experienced challenges in the trial courts and so far have had limited success However, as the case law continues to develop, we will pursue appropriate avenues of recovery for our clients.

Lawyers: Dee Miles, Roman Shaul, Ali Hawthorne, Rebecca Gilliland, and Leslie Pescia
Primary Staff Contacts: Jessica Stapp, Brenda Russell, and Amanda Richards

Actos

Actos is a commonly prescribed drug used in treating Type 2 Diabetes Mellitus. Diabetes affects more than 26 million people nationwide. Approximately 90 to 95 percent of those 26 million Americans with diabetes suffer from Type 2 Diabetes. Actos received FDA approval in 1999, but, prior to that, an unreported clinical study was conducted, whereby the Defendants discovered an association between Actos and an increased risk of bladder cancer. Subsequent studies over the years have demonstrated that there is in fact a statistically significant increase in the risk of bladder cancer for individuals that have been prescribed and consumed Actos. The Defendants, manufacturers of Actos, were aware of the increased risk of bladder cancer, but downplayed and tried to discredit the numerous studies that demonstrated that risk. Beasley Allen represents the State of Louisiana in seeking to recover for the reimbursements it made and damages it suffered because of the claims submitted to the state’s Medicaid office for this substandard product and the manufacturers’ failure, through their marketing to physicians and citizens, to inform its customers of the proper dosage requirements.

Lawyers: Dee Miles, Lance Gould, and Ali Hawthorne
Primary Staff Contact: Jessica Stapp

Usual and Customary

State Medicaid agencies reimburse pharmacies for the drugs they dispense to Medicaid beneficiaries within their States. The amount that a pharmacy receives is determined by a reimbursement formulary that is set by the State and approved by the Federal government. Most States will reimburse using a “lesser of” or “lower of” formula where four to five factors are considered and the pharmacy is paid whichever amount is the lowest. These factors usually include: Wholesale Acquisition Cost (WAC), Average Wholesale Price (AWP), the Federal Upper Limit (FUL), a State-set Maximum Allowable Cost (SMAC), or the pharmacies’ Usual and Customary price (U&C) as reported by the pharmacy seeking reimbursement.

U&C is generally understood to be the price charged to a cash-paying customer. Historically, the AWP, WAC, FUL, or SMAC were lower than a pharmacy’s reported U&C, so U&C was very rarely utilized in reimbursement. However, around May of 2006, the historical U&C pricing model underwent a drastic change when Walmart and Kmart introduced their nationwide discount generic drug programs. Walmart’s discount program offered hundreds of generic drugs at $4 for a 30-day supply and $9 for a 90-day supply.

Similarly, Kmart’s discount drug program offered hundreds of generic drugs at $5 for a 30-day supply and $10 to $25 for a 90-day supply. Those low, flat-rate prices became the pharmacy’s U&C price and should have been reported to State Medicaid agencies as the U&C.

Lawyers in the Section uncovered evidence that many pharmacies with discount drug programs are not, however, reporting their flat-rate prices as their U&C, causing State Medicaid agencies to overpay large, chain pharmacies by millions of dollars. We are working closely with state attorneys general to hold these pharmacies accountable.

Lawyers: Dee Miles, Roman Shaul, Ali Hawthorne, Rebecca Gilliland, and Clay Barnett
Primary Staff Contacts: Michelle Fulmer, Ashely Pugh, Jessica Stapp, Brenda Russell, and Amanda Richards

FLSA Litigation

We have been handling FLSA (Fair Labor Standards Act) cases for many years. FLSA cases range from mischaracterizing an employee as a “manager” to avoid having to pay overtime wages, to employers having employees “work off the clock” to save on labor cost, but both are violations of the law under the FLSA.

Lawyers: Lance Gould and Roman Shaul
Primary Staff Contact: Holly Busler and Brenda Russell

Equal Pay/Race Discrimination/Age Discrimination

Several Lawyers in the Section also handle other employment cases involving discrimination due to gender, race, age, culture and other factors. We recently settled several cases involving these issues and hopefully bettered the work environment for many others.

Lawyers: Larry Golston and Lance Gould
Primary Staff Contact: Holly Busler

Wills and Estates

Creating a will to plan for what happens to your estate after you pass is critical. Without a will, all of a person’s possessions pass through their state’s intestate succession laws – meaning that heirloom you want your cousin to have probably will not get into your cousin’s hands without a will; it will pass to whomever the law dictates receives your estate. For some people, those with a lot of assets, even a trust is necessary to protect the estate assets for years to come. This is particularly important for people who own their own business. A trust can dictate who controls the business, what happens to business assets, and how the company profits are handled. Though the decedent would hope it does not create a dispute, sometimes the heirs of an estate dispute the validity of the will/trust or dispute the meaning of the language in the will/trust. Lawyers in the Section are looking into these disputed wills and trusts involving large estates.

Kessler Litigation

Beasley Allen has teamed up with The CBC Law Group in Nashville to litigate a dispute involving the estate of the late Gerald A. Kessler. Mr. Kessler passed away in March of this year at the age of 80, leaving an estate believed to be valued at more than $800 million. In dispute is an Amendment created in 2013 to the Gerald A. Kessler Revocable Trust that gives Melanie Kay Williams (an actress also known by the stage name Meadow Williams) control over almost all of his assets as Trustee. It further established her as, essentially, the sole and exclusive beneficiary of the estate. The Petition filed on behalf of the Kessler family alleges Ms. Williams, who is 31 years younger than Mr. Kessler, manipulated and unduly influenced him to execute new estate planning documents through actions including bigamy, undue influence and elder abuse.

Lawyers: Dee Miles, Lance Gould, and Leslie Pescia
Primary Staff Contact: Holly Busler

Conclusion

These are just some of the highlights for the Consumer Fraud/Commercial Litigation Section’s work. Our lawyers continue to dedicate their practice to all issues involving corporate misconduct and do an excellent job in this area of the law.

As you can see from the above, all of the lawyers and support staff in this Section have been very busy. If you are unsure which lawyer to contact on a specific project, Michelle Fulmer, the Section Administrator, will be glad to put you in touch with a lawyer who deals with the subject matter of your inquiry. Michelle can be reached at 800-898-2034.

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