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Diamond Foods Deceptive Advertising of “All Natural” Tortilla Chips Class Action

The plaintiff, a California resident, alleges that defendant knowingly promoted and marketed its product as being all natural to encourage consumers to purchase its products and deceiving the reasonable purchaser into believing the products were all natural.  Products which are deemed mislabeled cannot be legally advertised or distributed.  Diamond Foods’s claims that the tortilla chips were all natural induced the reasonable consumer to choose Kettle Brand TIAS Tortilla Chips over any other comparable product and pay a price premium for the “All Natural” chips.

According to Consumers Union, 86% of consumers expect a “natural” label to mean no processed foods or artificial ingredients are present.  Both maltodextrin and dextrose (GMOs) are synthesized through severe processes which use synthetic chemicals to extract the enzymes used to produce these GMOs.  Because of how severe the processes used to synthesize the GMOs are and the synthetic nature of the enzymes used throughout these processes, the resulting ingredient are no longer “natural.”

Diamond Foods, recognizing that health-conscious consumers will choose and pay extra for the natural products, took advantage of its marketing and advertising strategies and sold its synthetic-ingredients products to consumers who wished to maintain a healthy diet.  The complaint alleges that defendant knew and relied on the fact that an “all natural” ingredients list is of importance to a reasonable consumer and that such information would be material to the public when it made purchasing decisions.

The lawsuit alleges violations of the California Business and Professions Code by disseminating deceptive products’ labeling and advertising representations and by engaging in unfair competition.

On Deck Capital (ONDK) Class Action Lawsuit

A class action lawsuit has been filed against On Deck Capital by plaintiff, Carl Stitt, on behalf of himself and others similarly situated. Specifically, the class includes all persons besides the defendants who purchased or otherwise acquired On Deck securities pursuant and/or traceable to On Deck’s false and misleading Registration Statement. The statement was issued in connection with On Deck’s initial public offering, which was released on December 16, 2014.

On Deck Capital, based in New York City, offers financing products to small businesses in the United States. The company offers fixed term loans and revolving lines of credit, processing and servicing its loans through its online platform. Its common stock began trading on the New York Stock Exchange on December 17, 2014 under the symbol ONDK.

Procedural Status. The lawsuit was filed on August 4, 2015 and is captioned Carl Stitt v. On Deck Capital, Inc., et al. It was filed in the United States District Court Southern District of New York. Its civil docket number is 1:15-cv-06126. The lead plaintiff decline is October 5, 2015.

The lawsuit alleges that On Deck Capital made false and/or misleading statements and/or failed to disclose that its true rate of default for its loan portfolio was steadily increasing, and the true value of its loan portfolio was in material decline. Consequently, On Deck’s public statements were materially false and misleading at all relevant times.

Less than two months after On Deck’s initial public offering, SeekingAlpha.com published an article that described how the company’s Registration Statement significantly understated the default rate for its loan portfolio. Five weeks later, Compass Point Research & Trading published a report detailing On Deck Capital’s unsustainable business model, including inherent risks with its untested credit model, growing competition, uncertainty in regard to interest rates, and anticipated regulatory threats.

On July 1, 2015, On Deck common stock dropped to a low of $11.15 per share, a decline of over 40% from the initial public offering price. On Deck is now reportedly losing tens of millions of dollars through defaults on its loans.

The class action suit alleges that, as a result of On Deck’s false and/or misleading statements, the company suffered a precipitous decline in the market value, resulting in significant losses and damages to the plaintiff and his fellow class members.

IVC Blood Clot Filter Lawsuits

This mass tort alleges that some IVC blood clot filters are migrating or fracturing within the body, causing damage or even death. (NBC News carried on a yearlong investigation of this problem.)

A blood clot that develops inside the arms, legs, or pelvis is known as a DVT or deep vein thrombosis. It is usually not life-threatening, unless it travels to the heart or to the lungs, where it is known as a PE or pulmonary embolism. Pulmonary embolisms can cut off the flow of blood to the lungs, and they are the third most common cause of death in hospitals. While blood clots are most easily treated with blood thinners, some patients are unable to take them because of other conditions. In those cases, an IVC blood clot filter may be used.

IVC blood clot filters are small devices made of wire- or rod-like metal in the shape of cages or cones that are implanted in the interior vena cava, the large blood vessel running from the lower half of the body to the heart and then to the lungs. The filter is intended to catch clots as they travel through the blood and prevent them from reaching the heart or the lungs. Blood clots caught in the filters are eventually dissolved by the anticoagulants in the blood.

Some filters are permanently implanted, but others are put in temporarily, for use when a patient runs a particularly high risk of blood clots, such as after an accident. These retrievable filters are the subject of this mass tort lawsuit, since they are alleged to have caused problems in patients.

The FDA has received more than 900 complaints about IVC blood clot filters since 2005.  The most common problem is migration, where the filter travels within the body instead of staying where it was placed. Other problems include fracture (where the filter breaks), puncture (where the filter or a part of it punctures the blood vessel, nearby blood vessels, or even the lungs or the heart), and detached device components (where broken pieces of the device may travel in the body or create embolisms).

The FDA believes that these problems might be related to the IVC blood clot filters remaining in the body for longer than they need to. It suggests that retrievable filters be removed from patients as soon as risks of clot have subsided.

However, in one study, researchers discovered that only 58 out of 679 retrievable IVC filters were removed after use. Unfortunately, even when attempt were made to remove the device, sometimes they failed; and in some cases, broken parts had moved farther into the body and could not be retrieved.

The filters under investigation in this mass tort include the Recovery, G2, G2 X, Eclipse, Meridian, and Denali (all by Bard) and the Gunther Tulip and Celect (both by Cook).

Who is affected? Patients who have had problems such as migration and puncturing with one of the models of retrievable IVC blood clot filters above.

What is the status of the mass tort? The lawsuits are now in the investigation stage and will be handled as a mass tort. In a mass tort, multiple cases are combined into a single “group” lawsuit. Unlike class action suits, they are not tried together in a single trial represented by a single plaintiff or group of plaintiffs; each is tried individually, but will still benefit from lower expenses and reduced legal procedures.

Investment Technology (ITG) Securities Fraud Class Action Lawsuit

On August 5, 2015, a class action lawsuit was filed against Investment Technology Group, Inc., on behalf of all persons and entities, other than the defendants, that purchased the company’s securities between February 28, 2011 and July 29, 2015. The suit alleges that Investment Technology Group made false and/or misleading statements to investors throughout the class period, resulting in significant losses and damages to these class plaintiffs.

 

Investment Technology Group, Inc. is an international independent execution and research broker, offering its clients trade execution services and solutions for portfolio management, investment research, pre-trade analytics, and post-trade analytics and processing. It’s common stock trades under the symbol ITG.

 

Procedural Status. The lawsuit was filed on August 5, 2015 and is captioned Rajesh Shah v. Investment Technology Group, Inc., Robert C. Gasser and Steven R. Vigliotti. It was filed in the United States District Court Central District of California. Its civil docket number is 2:15-cv-05921. The lead plaintiff deadline is October 5, 2015.

 

The class action complaint includes several allegations. Specifically, that Investment Technology made false and/or misleading statements, and failed to disclose information to its investors. For example, AlterNet Securities, one of Investment Technology’s subsidiaries, operated a proprietary trading operation from 2010 through mid-2011 inside of the company’s POSIT dark pool, a private stock trading platform, against some of its broker clients. This proprietary trading platform used information from customer stock orders within the company’s dark pool, along with information from the company’s clients that used the firm’s algorithms to execute trades on other platforms, which should not have been available. Consequently, Investment Technology’s public statements were materially false and misleading at all relevant times.

 

On August 4, 2015, the company announced that it was setting aside $20.3 million for a probable settlement with the SEC. After this announcement, its shares fell over 23% from its previous closing price.

OtisMed Knee Replacement Lawsuits

This mass tort lawsuit alleges that knee replacements pateients may have suffered harm through the use during surgery of the OtisKnee cutting guide, medical device that was not approved by the FDA.

The OtisKnee, designed and made by the OtisMed company, used MRI imaging of individual patient knees to make patient-specific guides that they claimed increased the accuracy of bone cuts made during knee replacement surgery. It was intended to reduce both the time the surgery took and the patient’s recovery time afterwards.

OtisMed marketed and sold the OtisKnee at meetings of the American Academy of Orthopedic Surgeons. They told surgeons that the device did not need FDA approval because it was a Class 1 medical device.

The FDA divides medical devices into three classes. Class I devices are items like bandages, dental floss, and forceps. These items need to be registered but do not require FDA approval because they represent a low risk to patients. Class II devices include items such as pregnancy tests and powered wheelchairs, which the FDA may approve if companies attest that they are similar to other products on the market. Class III devices are items like joint implants and pacemakers, which require greater regulation because they represent the greatest risk to patients.

Companies are given some freedom to classify their own medical devices. OtisMed classified its OtisKnee cutting guide as a Class I device, even though it should have been classified as a Class III.

From May 2006 to September 2009, OtisMed sold more than 18,000 OtisKnee cutting guides, earning more than $27 million from the sales. When Stryker, a company that made knee implants, became interested in buying OtisMed, it requested that the company obtain FDA clearance for the OtisKnee. OtisMed applied to the FDA in 2008. In 2009, the FDA notified the company that its application had been rejected because  it had failed to prove that the OtisKnee was safe and effective. It noted that the OtisKnee was a Class III device and specifically warned OtisMed against selling it without approval.

At that point, the OtisMed board voted to cease selling the guides. However, its chief executive, Charlie Chi, told employees to ship out another 218 of the devices.

In the meantime, fifty-eight reports were received of malfunctions or other problems in surgeries that used the OtisKnee cutting guide. The Journal of Arthroplasty published a study of four surgeries using the devices and said, “The potential for malalignment with this system places implants at high risk of early failure.”

Criminal and civil charges were filed by the US Justice Department. The company agreed to pay $80,000,000 to settle the charges and was banned from participating in Medicare or Medicaid for twenty years. OtisMed’s Charlie Chi was sentenced to twenty-four months in prison and a year of supervised release. He was also ordered to pay $75,000 in fines. Stryker, which acquired OtisMed in 2009, agreed to cooperate with the government’s investigation, maintain a compliance program, and review whether its other medical devices have been properly approved.

However, these cases have not taken into consideration any liability to individual patients for specific problems they have had because of the use of the OtisKnee during surgery. This mass tort will now attempt to address these problems.

Unlike a class action lawsuit, where one plaintiff or group of plaintiffs stands in for all those harmed, in mass tort lawsuits, each case is tried individually, but all of them benefit from reduced expenses and legal proceedings.   

Volvo Defective Sunroof Class Action Lawsuit

     Plaintiffs allege that Volvo, despite longstanding knowledge of a material design defect, failed to disclose to consumers that certain vehicle models were predisposed to a sunroof drainage system defect.  The defect leads to the accumulation of dirt, debris, and other naturally occurring particles within the sunroof water drainage system.  The defect would manifest shortly after the limited warranty on the vehicle expired and caused extensive damage to the model vehicles due to the ingress of water, which accumulates within the passenger compartment of the vehicles.

     The complaint alleges that the sunroof drainage defect poses a serious safety risk to the operator of the vehicle because the accumulating water can damage important electrical systems/sensors.  For examples, all vehicle models predisposed to the defect come equipped with an Electronic Stability Control (“ESC”), which is a safety feature which constantly monitors driver and road conditions while automatically applying the brakes to individual wheels and reducing engine power as needed to improve handling and steering control under all conditions, without the need for driver input.  The ESC is made up of many sensors, one of which, in the Volvo vehicles, is located on the passenger side floorboard, under the front passenger seat.  The sensor often becomes water damaged as a result of the defect and cease to function properly thereby disabling the ESC system.  This poses a serious safety risk to the driver, occupants of the car and the public.

     In addition, the model cars often have the audio system components and related wiring located under the front passenger seat, where the water accumulates due to the defect, thus damaging the system.

     The Plaintiffs allege that Volvo knew of the defect through their own records of customer complaints, repair records from Volvo dealerships, records from the National Highway Traffic Safety Administration, and many warranty claims.  Nevertheless, Volvo failed to notify its customers of the existence and extent of the sunroof drainage system and failed to provide an adequate remedy.

     Plaintiff Collopy experienced damage to her vehicle when she noticed water accumulation and mold within the interior compartment of her car.  When she brought the car for repair, she was charged approximately $1,200 for de-clogging the draining tubes of the sunroof drainage system, replace all carpeting in the car and fixing of the padding of the car due to the water damage.  Despite all evidence to the defect, Volvo refused to at least investigate the cause of the damage or address Plaintiff Collopy’s concerns stating that it was not covered by the car’s warranty.

 

Whole Foods Securities Fraud Class Action Lawsuit

This lawsuit alleges that Whole Foods misrepresented to shareholders that its operational controls were strong yet the company routinely overstated the weight of its pre-packaged products and overcharged customers. This caused Whole Foods' stock to be artificially inflated.

What investors are part of this class action? The class period is currently defined as all those who purchased or otherwise acquired Whole Foods securities between August 9, 2013 and July 30, 2015 inclusive (the "Class Period"). Whole Foods' shares trade on the NASDAQ under the ticker symbol "WFM."

Procedural Status. This lawsuit was filed on August 6, 2015 and is captioned Markman v. Whole Foods Market, Inc., et al. It was filed in the United States District Court for the Western District of Texas. Its civil docket number is 1:15cv00681. The lead plaintiff deadline is October 5, 2015.

Whole Foods operates as a retailer of natural and organic foods. The Company's stores offer produce and floral, grocery, meat, seafood, bakery, prepared foods and catering, coffee, tea, beer, wine, cheese, nutritional supplements, vitamins and body care products, as well as lifestyle products. As of May 7, 2015, the company had approximately 417 stores worldwide.

The complaint alleges that throughout the class period, Whole Foods made false and/or misleading statements and failed to disclose material, negative facts about the Company's operations and future prospects. Specifically, it is argued that:

  • Whole Foods routinely overstated the weight of its own pre-packaged products,
  • overcharged customers as a result of the overstated product weights
  • made statements regarding the Company's internal and operational quality controls and future prospects that lacked reasonable basis in fact.

On June 25, 2015, the New York City Department of Consumer Affairs announced that it had found "systematic overcharging for pre-packaged foods" at eight New York City Whole Foods locations. Thousands of instances of overcharging were said to have been discovered, though Whole Foods officials denied the existence of any evidence of such violations and pledge to defend itself against the claims.

Subsequently on July 29, 2015, the Company issued a press release and filed a Form 8-K with the SEC, mentioning the national media attention garnered by the weights and measures audit. In a post-market earnings call hosted by the Company that same day, Whole Foods officials directly attributed lower-than-expected quarterly results to the overcharging controversy. As a result of the negative news, Whole Foods' common stock fell $4.74 per share, or 11.61%, closing at $36.08 on July 30, 2015. The plaintiff alleges that the wrongful acts and omissions of the defendants and the consequential drop in market value of Whole Foods securities have caused class members to sustain significant financial losses and damages.

http://www.wholefoodsmarket.com/

http://www1.nyc.gov/site/dca/media/pr062415.page

Pier 1 Imports (PIR) Securities Fraud Class Action Lawsuit

This securities fraud lawsuit alleges that executives at Pier 1 Imports systemically understated the cost to move into online retail channels and systemically overstated forecasted future revenues.

What investors are part of this class action? This case covers all persons or entities who purchased or otherwise acquired shares of Pier 1 from December 19, 2013 through February 10, 2015 inclusive (the "Class Period"). Pier 1 Imports, Inc. common stock trades on the NYSE under the symbol PIR.

Procedural Status: The lawsuit was filed on August 27, 2015 and is captioned Kenney v. Pier 1 Imports, Inc. et al. It was filed in the United States District Court for the Northern District of Texas. Its civil docket number os 3:15cv02798. The lead plaintiff deadline is October 26, 2015.

Pier 1 Imports is a retailer of decorative home furnishings and gifts imported from locations around the globe. The company maintains over 1,000 physical stores in the U.S. and Cananda. In December of 2013, the company announced improvements in its financial condition and its plans to launch a new business initiative aimed at blending e-commerce functions and in-store purchasing to build a unified experience for customers and boost overall sales figures. In subsequent months, however, it is alleged that Pier 1 engaged in the making of false and misleading statements and failed to provide investors and the public with the truth about its true business prospects and financial condition. Specifically, it is alleged that:

  • on December 19, 2013, the company announced improvements in it financial condition, touting "solid third quarter fiancial results" and the "resounding success" and strong future prospects of its e-commerce initiatives,
  • in April of 2014, the company promoted additional success of its "1 Pier 1" strategy, citing increased website traffic and sales;
  • on July 19, 2014, the company issued a press release heralding further sales growth and projecting e-commerce sales of at least $200 million in fiscal year 2015 and $400 million in fiscal year 2016, respectively, and
  • the company made a series of Form 10-Q filings with the SEC in which it repeated the claims previously made to the public.

However, roughly two weeks before the company's year end, Pier 1 shocked investors iwth the news of reduced financial guidance for the 2015 fiscal year, cited softer than anticipated sales in the prior two months, discussed unplanned supply chain costs and the unexpected "retirement" of veteran Chief Financial Officer Charles H. Turner. These revelations caused shares of Pier 1 to drop to $12.84, a decrease of nearly 25% on trading of over 36 million shares.

The plaintiff in this case alleges that as a result of Pier 1's violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, company stock traded at artificially inflated prices during the Class Period, causing herself and other Class Members significant losses and damages.

 

http://www.pier1.com/

http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=PIR

Biogen (BIIB) TECFIDERA Securities Fraud Class Action Lawsuit

Biogen is a global biopharmaceutical company that creates and manufactures drugs for diseases such as multiple sclerosis and hemophilia. Its revenues are largely dependent on the sales of TECFIDERA, a drug intended to treat multiple sclerosis.

This class action alleges that, in the first half of 2015, Biogen and some of its officers and directors misrepresented the amount of future revenue growth they expect, based largely on expected revenue growth for TECFIDERA. On January 29, 2015, in a press release and an earnings call with financial analysts, Biogen said it expected revenue growth of between 14% and 16% in 2015. In April, it held another conference call but did not change those figures.

However, in July, Biogen issued another press release revising this estimate. In fact, it reduced its expectations for growth by half, to approximately 6% to 8%. The company said that this revision was based largely on revised expectations for TECFIDERA.

At this news, the price of Biogen common stock plunged by approximately $85, a loss of more than 22%.

The class action alleges that, during the first half of 2015, officers and directors of the company had access to information that was not available to the public, and that they should therefore have known that their growth estimates were too high. It claims that they should have corrected the January statements much earlier than they did, but that the company deliberately maintained the false expectations in order to inflate the value of its stock.

What investors are part of this class action? The class period is currently defined as all persons who purchased Biogen, Inc. common stock between January 29, 2015 and July 23, 2015, inclusive (the “Class Period”).  Biogen common stock trades on NASDAQ under the symbol “BIIB”

 Procedural Status.  The lawsuit was filed on August 18, 2015 and is captioned Tehrani v. Biogen, Inc. et al. It was filed in the Massachusetts District Court. Its civil docket number is 1:15cv13189.  The lead plaintiff deadline is October 19, 2015.      

Plains All American Pipeline (PAA) Securities Fraud Class Action

This securities fraud class action alleges that Plains All American Pipeline (Plains) issued false and misleading statements concerning its pipeline monitoring, maintenance and spill response measures, as well as its compliance with federal regulations governing its pipeline operations.

Plains, a publicly traded master limited partnership, is one of the largest crude oil and other liquid energy pipeline operators in the United States.

What investors are part of this class action ? The class period is currently defined as all persons who purchased Plains All American Pipeline common stock between February 27, 2013 and August 4, 2015, inclusive (the “Class Period”).  Plains All American Pipeline common stock trades under the symbol “PAA, PAGP”.

Procedural Status.  The lawsuit was filed on August 20, 2015 and is captioned City of Birmingham Firemens and Policemens Supplemental Pension System v. Plains All American Pipeline, L.P. et al. It was filed in the Texas Southern District Court. Its civil docket number is 4:15cv02404.  The lead plaintiff deadline is October 16, 2015.  

The complaint alleges Plains and its senior executives misled investors throughout the Class Period by concealing pervasive and systemic oil pipeline monitoring and maintenance failures, inadequate spill response measures, repeated failures to comply with federal regulations and other misconduct that led to the May 19, 2015 oil spill in Santa Barbara, described as the largest oil spill in California in 25 years; including allegations that Plains represented that:

  • pipeline maintenance was its “primary operational emphasis,” and that it had undertaken significant measures to prevent oil spills, ensure the integrity of its pipelines, and minimize the damage any such incidents may cause;
  • it had “implemented programs intended to maintain the integrity of our assets, with a focus on risk reduction through testing, enhanced corrosion control, leak detection, and damage prevention;” and
  • its pipelines were “in substantial compliance” with federal regulations governing the design, installation, testing, construction, operation, replacement and management of pipeline, but also that the Company’s “integrity management program” included measures that went well beyond those legal requirements.

On May 19, 2015, Plains Line 901 ruptured, triggering a spill that impacted several miles of coastline.

Following the disclosure of the spill and subsequent investigation by the Pipeline and Hazardous Materials Safety Administration, Plains common units have lost over nearly one-third of their value in response to disclosures revealing the true extent of the spill.