The Price Armstrong LLC Class Action Blog
Covering News And Developments In Class Actions, Consumer Protection, Qui Tam Actions, And Other Complex Litigation
An excellent word from our good friend Mike Ermert.
Two local news stations, one our of Cincinnati, Ohio and one out of Springfield, Missouri, recently did reports on fuel surcharges which are still assessed by many delivery and trash companies. As these reporters noted, while fuel prices have continued to fall precipitously over recent months and years, some companies continue to charge fees which they claim are intended to offset their increased fuel costs. Often, these fees--usually called "fuel surcharges" or "energy recovery fees"--have no relationship to such costs but rather are simply hidden, misrepresented price increases.
If you have any experience paying fuel surcharges or energy recovery fees as discussed in these stories, contact us today and we're happy to discuss your legal options. Cases have been filed across the country challenging similar conduct.
In a landmark decision, the United States District Court for the Southern District of New York recently ruled that even where a healthcare provider's over billing of Medicaid or Medicare for patient services was accidental, the healthcare provider's failure to fully refund any Government overpayment within 60 days of the identification of the overpayment gives rise to a Reverse False Claims Act claim under 31 U.S.C. 3729(a)(1)(G).
In United States ex rel. Kane v. HealthFirst (S.D.N.Y. Aug. 3, 2015), a hospital chain employee notified management of a billing mistake that lead to overpayments by Medicaid. The hospitals investigated the mistake for a full two years before ultimately refunding the overpayment to the Government. U.S. District Judge Edgardo Ramos held that the hospitals could be liable under the False Claims Act for failing to promptly refund Medicaid after learning of the potential over billing.
If you work for a healthcare provider and are aware of Medicare or Medicaid over billings that are not being promptly repaid, you may be entitled to an award under the False Claims Act.
Contact Price Armstrong for a free evaluation.
Price Armstrong has recently filed a class action in the Northern District of Alabama against PPG Industries, Inc. and related companies. PPG manufacture, markets, and sells Olympic brand "Rescue It" deck and concrete resurfacers. It claims that the Olympic Rescue It products provide an "idea" protective coating that is resistant to flaking and peeling. The Olympic Rescue It products are purported to protect decks for years and to provide an alternative to replacing worn or weathered decking.
Our complaint alleges that this is false; that, in fact, the Olympic Rescue It deck products fail long before they are represented to do so, flaking and peeling of decks soon after application. As alleged, this is a violation of the Alabama Deceptive Trade Practices Act and a breach of express warranties. Price Armstrong believes that the deceptively marketed Olympic Rescue It products may have affected thousands of customers across the nation. If you have purchased Olympic Rescue It products, and found that the Rescue It deck resurfacers did not do what they were represented to do--flaking and peeling off your deck before they should have done so--you may have a lawsuit. Please contact us today for a free consultation to discuss your legal options.
Price Armstrong is investigating potential class action claims that rack adjusters for many Whirlpool, Kenmore, and KitchenAid dishwashers contain a critical design flaw that renders the rack adjuster, and thus the dishwasher, unfit for the purpose for which it was manufactured.
Specifically, the wheels on the rack adjusters are held in place by plastic prongs become brittle and break when exposed to hot water for extended periods. When the prongs break, the top rack falls, and the dishwasher will not function until the rack adjuster is replaced.
Some consumers report plastic prongs breaking within a year of purchase.
If you purchased a Whirlpool, Kenmore, or KitchenAid dishwasher and had to replace the rack adjuster, you may have a case. Contact Price Armstrong for a free evaluation.
Earlier this week, the Business Travel Coalition asked the Department of Transportation to investigate domestic airlines' continued practice of charging excessive fuel surcharges. The letter from BTC, which can be found here, discusses how "widespread imposition of substantial, add-on fuel surcharges in the face of plummeting jet fuel prices cannot be justified." In contrast to some international airlines, domestic airlines have used falling fuel prices to create a windfall that reaches into the billions of dollars rather than reducing fuel surcharges. Notably, this practice likely runs afoul of the DOT's 2012 guidance which requires that fuel surcharges be directly linked to, and reflective of, actual fuel costs. Fuel charges which are unrelated to fuel costs are deceptive and unfair. The BTC's letter is part of a growing outcry as falling fuel prices reveal the unlawful nature of fuel surcharges in many industries. If you have been charged a fuel surcharge which you believe to be unrelated to actual fuel costs, please contact us today for a free case evaluation.
NPR news ran a story this morning discussing how, while fuel prices have plummeted, the fuel surcharges many companies are still charging the fuel surcharges they implemented years ago. As NPR recognizes, often fuel surcharges are used to "pay for more than fuel." And, notably, the drop in gas price is revealing how many companies' fuel surcharges are not related to fuel, and are not used to pay for fuel. "Many economists predict that worries about aggravated customers will force" business to drop their fuel surcharges.
Our lawyers have litigated cases against companies in a variety of industries based upon unlawful or misrepresented fuel surcharges. If you have been charged a fuel surcharge which seems excessive or not related to fuel prices, contact us today for a free case evaluation.
Office Depot agrees to pay $68.5 million qui tam settlement after overcharging public schools for supplies
Office Depot agreed this week to pay $68.5 million to the State of California after it spent years fraudulently overcharging California school districts for office and school supplies. Pursuant to Office Depot's contract with the various California school districts and other government agencies, Office Depot was required to sell supplies at its best available prices. However, knowing that the school districts would have little way of knowing if Office Depot was, in fact, honoring that commitment, Office Depot elected to often charge school districts a higher rate than Office Depot's best available price.
Thanks to the insider knowledge of a whistleblower, the State of California was able to recover much of the money out of which it was defrauded.
A recent article in Money Magazine discusses how, despite recent plummeting gas prices, many companies still charge high fuel surcharges. While gas prices have reached less than $2.00 per gallon in some parts of the country--fed by a crude prices which are less than half of what they were a year ago--these savings haven't necessarily been passed on to customers. Money Magazine identifies five specific industries in which it says "it sure looks like the fuel surcharge is a blatant money grab": taxis, airlines, express delivery services moving companies, and food delivery. As this article recognizes, most fuel surcharges are not actually tied to the cost of fuel. Rather, they are often a profit making device that bears no relation to fuel costs. Thus, unsurprisingly, when fuel costs drop companies are reluctant to reduce their fuel surcharges--which were never related to such costs in the first place--because it would hurt their profit margin.
The attorneys at Price Armstrong have litigated cases involving fuel surcharges against companies in a variety of industries. If you or your company has been charged a fuel surcharge which you believe to be excessive, unlawful, or not related to fuel costs, please contact us today for a free case evaluation.
To the Editor:
Re “Online, It’s Easy to Lose Your Right to Sue” (The Upshot, Oct. 23):
As more and more shopping takes place online, the safety of consumers’ data is increasingly in the hands of online retailers and websites. While these corporations profit from the data we entrust to them, they are increasingly taking steps to shield themselves in confusing, hard-to-find legalese that gives consumers little or no recourse if their information is leaked or misused, or even if consumers are cheated by online merchants.
Through these emerging “forced arbitration” and class-action ban clauses, retailers and corporations can take away consumer access to the civil justice system and the fundamental right to a jury of one’s peers, without most shoppers even realizing what they have agreed to give away. As your article found, this includes popular sites many people use on a regular, if not daily, basis.
States like California have passed provisions that protect some consumer rights online, like the ability to leave negative reviews. But much more is needed. State lawmakers and Congress must ensure that consumers do not lose their basic rights and protections simply because they choose to shop online.
MICHAEL S. LEVINE
President, New York State
Trial Lawyers Association
New York, Oct. 23, 2014
To the Editor:
Your article is a welcome examination of one of the greatest threats to consumer rights I have seen in my more than 30-year career as a consumer advocate — forced arbitration. As you explain, forced arbitration allows corporations to eliminate consumers’ rights to seek accountability and justice in the courts.
But on one point, your article actually understates how badly this system is rigged against consumers. You say that, in forced arbitration, the case is decided by “a private lawyer.” In fact, nothing in the law requires the arbitrator to have any legal training at all, nor are arbitrators even required to apply the law when deciding cases.
I have seen forced arbitration clauses in consumer and employment contracts that required the dispute to be decided by a religious official, a Native American tribal council, and in the case of the National Football League cheerleaders suing for wage and hour violations, the commissioner of the N.F.L.
Emerging issues like online consumer privacy must be carefully considered in a court of law, not a rigged system designed by corporations that don’t take the necessary steps to protect their customers.
American Association for Justice
Washington, Oct. 23, 2014
A new documentary, narrated by former Labor Secretary Robert Reich, discusses how forced arbitration has been abused for years in arenas that most consumers never know about. The arbitration system is largely designed by large corporations to be biased against individuals with less bargaining power. Arbitration has appeared in class actions as well, often through attempts by defendants to prevent claims from being brought in court as class actions which may mean that they cannot be brought at all. The film can be seen here: http://www.afj.org/multimedia/first-monday-films/films/lost-in-the-fine-print.
Samsung settles False Claims Act case after misleading the United States about the country of origin of some Samsung products
The American division of Korean electronics company Samsung has recently agreed to pay the United States $2.3 million after misleading the government as to the country of origin of products Samsung sold to federal government agencies.
Federal government contracting rules require all federal agencies to purchase products that are manufactured in either the United States or a country with which the United States has a trade agreement. A former Samsung employee alerted the government to Samsung's practice of deliberately misrepresenting the country of origin of some products it sells to government agencies and then selling those agencies products that are actually manufactured in unauthorized countries. Under the False Claims Act, the former Samsung employee is entitled to a portion of the government's recovery.
“The Department of Justice is committed to protecting public funds and guarding against abuse of federal procurement programs,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division. “This settlement upholds important trade priorities by ensuring that the United States only uses its buying power to purchase from countries that trade fairly with us.”
“It is unacceptable to sell unauthorized foreign electronics to the United States,” said GSA Acting Inspector General Robert C. Erickson. “We expect all companies doing business with the federal government to comply with contracting laws.”
In a victory for consumers, the 9th Circuit Court of Appeals ruled yesterday that arbitration clauses in "browse-wrap" agreements are unenforceable. The Court permitted a class action to proceed notwithstanding the existence of a "browse-wrap" arbitration agreement.
In short, where a consumer lacks actual knowledge of the existence of an arbitration agreement, a link to an arbitration agreement on the website is insufficient to force the consumer's claims into arbitration.
A Canadian court has ruled that class actions against Bell Mobility and Virgin Mobile may proceed. The case arises out of the common practice of seizing remaining balances on prepaid phone cards after the cards expire. The Plaintiff argues that prepaid phone cards are subject to certain consumer protection laws which prohibit gift card expiration dates. While consumer protection laws may protect Canadian consumers, U.S. consumers are not so lucky.
In the U.S., most consumers think that they are using a prepaid phone card in lieu of entering into a contract with a cell phone provider. However, U.S. cellular service providers typically include a statement on the packaging that purports to contractually bind the consumer to the cell provider's unfair and deceptive terms. For example, AT&T typically includes the following language on its prepaid phone cards:
BY USING THE PIN PROVIDED WITH THIS PREPAID PHONE CARD YOU CONSENT TO THE TERMS, CONDITIONS, RATES AND CHARGES BELOW AND IN THE SERVICE GUIDE AT www.att.com/prepaidguide; ALSO AVAILABLE FROM CUSTOMER CARE AT 1-800-811-4763.
The "hidden" terms referenced in the disclosure on the card not only bind the consumer to arbitration, but also permit ATT&T to levy surcharges and so called "discretionary fees."
For years, some unscrupulous large corporations have used fees they call "fuel surcharges" or "fuel recovery fees" to unlawfully pad their profits at their customers' expense. Often, these fees appear to be legitimate. Companies will loudly proclaim that through the fuel surcharges they "offset" or "adjust for" their fuel costs. Taking advantage of the increase in gas and diesel prices (which affected us all beginning around 2005) they claim that they've incurred unbearable fuel costs which put their existence in question; that they are forced to pass through these costs to their small business and consumer customers.
Such companies attempt to justify the fuel surcharges by creating a superficial facade designed to deceive their customers into believing that the fees are legitimate. They often tie their fuel surcharge to a government index of fuel prices which is published by the Energy Information Administration (a department of the Department of Energy) and vary the amount of the fuel surcharge when that index rises or falls. But what they don't disclose is that the index price, the amount of variation between the index price and the fuel surcharge, and the baseline fuel surcharge itself have absolutely no relationship to their fuel costs. In truth, few companies which charge fuel surcharges actually pay the government tracked prices as they have the ability to leverage their purchasing power to buy fuel at lower prices or to hedge against fuel price increases. And, in fact, many of them even use vehicles that run on something other than diesel or gas. By creating a table which incorporates government tracked fuel prices, companies create a false appearance of legitimacy for their fuel surcharges which they rely upon to deceive their customers into paying what is ultimately an extra profit fee.
The attorneys at Price Armstrong have pursued cases against companies charging fuel surcharges, fuel recovery fees, and similarly named fees for years. We have a wealth of experience in this arena and have discovered concerning similarities and trends. Many extremely large companies, who have weathered the recession well, simply use fuel surcharges to extract more profit on the behalf of people and small companies who can afford it least. They do so relying on misrepresentations and omissions, and often while enforcing long contracts which give their customers no way out, even if they knew what was happening. Sometimes these fees will just appear on an invoice after never having been agreed upon. Fuel surcharges have gone from being "temporary" and "unavoidable" to part of the bottom line. Notably, as shown by the chart below from the EIA for diesel fuel, while fuel prices have stabilized significantly, companies still charge these sham fees.
Fuel surcharges and fuel recovery fees are common in a number of industries, including the waste disposal industry, the equipment rental industry, the uniform delivery industry, the propane industry, and the food delivery industry. If you have been charged a fuel surcharge, by a company in one of these industries or any other industry, please look at your invoices or bills and ask yourself some questions:
- How long have you been charged a "fuel surcharge"?
- Why have the "fuel surcharges" you've been charged gone up while fuel prices have not?
- Are you charged a "fuel surcharge" that is a percentage of your invoice? If so, how can this be related to the actual cost of fuel to provide service to you?
- How much is the "fuel surcharge" you're charged compared to how much it actually costs the delivery or service vehicle to travel the extra mile or two to your house or business?
Fuel surcharges are not a license for companies to increase profits at the expense of consumers and small businesses. The law imposes on all companies certain obligations, including the obligation to live up to their promises in good faith and to treat their customers fairly. Unfortunately, as Slate reported, the "fuel surcharge scam" has become "the latest corporate trick to hide price increases." Please contact our attorneys today to discuss your potential lawsuit if you have been charged a fuel surcharge, fuel recovery fee, or similarly named fee.
President Obama expected to restore the right to a Trial by Jury to employees of Federal government contractors
In a huge step towards restoring the Constitutional right to a Trial by Jury to American laborers, the Federal government will now require that Federal contractors allow their employees to use the American court system to resolve lawsuits against the company. According to reports, sometime tomorrow, the President will sign an order declaring that any company hoping to do business with the Federal government may not require their employees to sign binding arbitration agreements, thereby allowing employees of any potential government contractor their day in court.
The United States Department of Justice recently intervened in a False Claims Act lawsuit against software giant Symantec. According to the amended complaint, filed July 20, 2014, Symantec defrauded the United States General Services Administration by misrepresenting the discounts Symantec was providing to its larger commercial customers. Because the contracts between Symantec and the GSO stated that the federal government was entitled to discounts equivalent to those received by Symantec's larger commercial customers, by defrauding the government as to those discounts, Symantec was able to overcharge for its services.
“This lawsuit demonstrates the government’s commitment to ensuring that the companies it does business with act with integrity,” said Assistant Attorney General Stuart Delery for the Department of Justice’s Civil Division. “When the United States spends taxpayer dollars based on contractors’ representations about their business practices, we expect to be given complete and accurate information.”
“When doing business with the government, honesty and transparency are essential,” said U.S. Attorney Ronald C. Machen Jr. for the District of Columbia. “We are committed to ensuring that contractors who do business with the federal government provide honest services, prices and products. We will continue to work with relators and federal investigators to protect federal taxpayer money.”
If you have non-public knowledge of a government contractor that may be defrauding the government with its billing practices, rate schedules, or in the services it provides, contact Price Armstrong for a free consultation regarding a potential False Claims Act case.
After defrauding customers regarding energy efficiency, Whirlpool asks Congress for protection from consumer lawsuits.
The Energy Star label is designed to assist consumers and provide them reliable information regarding the efficiency of consumer products like refrigerators, washing machines, televisions and light bulbs. Due to weak oversight, manufacturers from LG to Samsung spent years brazenly defrauding consumers by misrepresenting the energy efficiency of their products. LG, for example, disconnected the ice maker on refrigerators before performing energy efficiency tests.
After government testing revealed that many manufacturers were deliberately cheating the system, consumers and their lawyers have begun to take manufacturers to task.
Whirlpool apparently objects to consumers making use of the judicial system to hold Whirlpool accountable for its misrepresentations. Although Whirlpool does not deny that it defrauded customers, it nonetheless asks Congress to ban lawsuits arising from fraudulent Energy Star labeling. The bill, which was introduced today by Ohio Republican Robert Latta, would eliminate all class actions arising from Energy Star frauds.
Atlanta Fox 5 investigative reporter Randy Travis has uncovered a troubling example of Medicare fraud by a Georgia hospice company.
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