- Global Settlement on airline ticket price fixing – $200 million
British Airways and Virgin Atlantic have agreed to a more than $200 million settlement of a class action lawsuit accusing the airlines of price fixing on long-haul passenger flights by inflating fuel surcharges. "Unfortunately, millions of air passengers were over charged because of the price fixing activity of the airlines," said Joseph W. Cotchett of CP&M, co-lead counsel in the case. "However, this settlement will serve as a wake up call to all members of the worldwide transportation industry that they cannot use inflated fuel or other surcharges to illegally overcharge consumers and enhance their profits." The February 2008 settlement calls for British Airways to pay $136 million, of which $47 million will go to resolve the claims of United States consumers and $89 million to resolve analogous claims of United Kingdom consumers. Virgin Atlantic will pay $67 million, of which $12 million will go to resolve the claims of U.S. consumers and $55 million to resolve U.K. consumer claims. The complaint alleged the airlines "acted in concert and conspired to artificially inflate the prices of passenger air transportation by fixing the prices of surcharges" during the period from August 11, 2004 to March 23, 2006. The airlines were sued by CP&M in U.S. District Court in San Francisco in June 2006. The total sum of the settlement goes to the airlines passengers. No attorney fees or other costs will be deducted as they will be paid separately by the defendant airlines. CP&M served as co-lead counsel in the case along with Cohen Milstein Hausfeld & Toll of Washington, D.C. For information on the settlement, see www.passengerrefund.com
- Jury Verdict Against Credit Card Collection Agency
In a rare trial against a credit card collection agency, a San Francisco jury ruled in favor of a young woman who was the victim of a highly abusive campaign to force her to repay a debt she never incurred. Anne Marie Murphy and Justin T. Berger of Cotchett, Pitre & McCarthy represented Anastasiya Komarova, who was awarded $340,081 in damages from National Credit Acceptance following a two-week trial that ended in January 2008. Komarova had been subjected to nearly a year of hostile telephone calls to her work place and a spurious arbitration proceeding, all over a bogus $7,000 credit card debt and despite the fact that she repeatedly told the agency she never had an account with the credit card company in question. “Unfortunately, it is rare that a case like this finally goes to trial because of the barriers, including arbitration, erected by the credit card collection industry to protect itself from public scrutiny,” said Murphy. “It is unfortunate in that this case is only the tip of the iceberg when it comes to collection practice abuses.” The San Francisco Superior Court jury awarded Komarova $265,810 in compensatory damages and $75,000 in punitive damages. In issuing its verdict, the jury described National Credit Acceptance’s conduct as “outrageous.” The verdict is believed to be one of the largest verdicts in the country by a sole plaintiff alleging credit abuse.
- Apple Option Cases Consolidated
Cotchett, Pitre & McCarthy has been appointed by the federal court to be the liaison and one of four law firms to handle the nationwide derivative lawsuit against Apple Computer for the backdating of options. CP&M filed the derivative suit in U.S. District Court in San Jose against Apple executives and directors. In a derivative action, a shareholder or shareholders assert claims on behalf of the company alleging the company sustained injury at the hands of its officers or directors. The suit, filed by CP&M partner and lead counsel Mark Molumphy, was consolidated with 10 other shareholder suits against the Cupertino, California company. The suit alleges Apple improperly granted options worth millions of dollars between 1997 and 2002. According to the suit, Apple engaged in widespread manipulation of option grants to allow executives to buy shares at low prices. The options were “spring-loaded” in advance of good news and “backdated” to days when the stock traded at low prices to create an automatic paper profit, the suit said. Following the filing of the suit, Apple said a three-month internal investigation of its option practices absolved CEO Steve Jobs of wrongdoing. However, the company later acknowledged 6,428 instances of improperly dating option grants over a six-year period and that Jobs approved or recommended some of the dates.
- "Bait and Switch" Lawsuit Against Ameriquest Settled
Orange County-based Ameriquest Mortgage Co. will pay up to $50 million as part of a settlement of a class action lawsuit accusing the mortgage lender of inflating annual percentage rates after initially promising lower rates to borrowers. The suit was filed in San Mateo County Superior Court in Redwood City, California by Niall P. McCarthy of CP&M. "This was a straight-up case of bait and switch," McCarthy said. The settlement covers thousands of Ameriquest customers in California, Texas, Alabama and Alaska. Ameriquest and its affiliates are the nation's largest mortgage lenders in the so-called sub-prime market which serves homeowners who have heavy debts or bad credit. The settlement was approved by the San Mateo County Superior Court.
- Intellectual Property
Intellectual property law is designed to protect the property created by intellect, or the mind. These creations include designs used in commerce, such as inventions, images, patents, copyright, and trade dress. They also include artistic works and literary works. The intellect that is the possession of a group or individual is considered intellectual property. In recent years, with the development of new electronic technology, advanced and specialized computer programs and Internet commerce, the definition of intellectual property and how to protect the rights of such property has created very complicated and complex business issues. CP&M has handled a number of intellectual property cases and its continuous investigations into various aspects of this emerging field of law has kept it on the cutting edge. Over the years, CP&M has successfully prosecuted and defended individuals and corporations in the area of intellectual property. Its cases range from one of the first lawsuits ever filed for Internet copyright infringement in 1998, to its successful defense in trial of mp3.com, to the successful prosecution of a complex business case involving WaveWare Communications of San Diego and its groundbreaking Code Division Multiple Access (CDMA) digital wireless technology.
- Bank Agrees to Credit Card Processing Settlement
Wells Fargo & Co. has agreed to pay up to $34 million to settle a lawsuit alleging it imposed improper credit card processing charges on California businesses from 1999 to 2005. The lawsuit, filed in Los Angeles County Superior Court, named four small businesses as plaintiffs but was certified as a class action that applied to about 96,000 California business customers of Wells Fargo. Co-lead counsel Niall P. McCarthy of Cotchett, Pitre & McCarthy, alleged in the complaint that the improper charges were "junk fees" that were never properly disclosed beforehand nor when merchants questioned them. The settlement was approved by Judge Anthony Mohr.
- Settlement in Trust Account Fees Case
Northern Trust Bank of California has agreed to pay the beneficiaries of trust accounts about $15,000 each on average as part of a $21 million settlement of a class action lawsuit alleging that it charged excessive management fees to individuals, charities and others with trust accounts. The suit, filed in Los Angeles County Superior Court, said that Northern Trust held and managed investments on behalf of beneficiaries, collecting fees based on a percentage of the assets. The trusts should have been charged annual fees of less than 1%, but were illegally ratcheted up to about 1.4% a year, the suit said. Co-lead counsel Niall P. McCarthy of CP&M said the overcharges began in 1981 and continued until 2003. The settlement was approved in Los Angeles Superior Court.
- Predatory Lending National Class Settlements
CP&M, acting as co-lead counsel, has won major settlements in four predatory lending class action lawsuits. In the latest case, Wells Fargo Financial Inc., the consumer finance subsidiary of Wells Fargo & Company, agreed in April, 2007 to a $10 million settlement over its subprime mortgage lending practices in California. The firm also agreed to continue for three years improvements it had already put into practice to benefit its customers and implement other such practices. In another case, Fairbanks Capital Corp. was accused of engaging in a variety of unfair, deceptive and illegal practices in the servicing of subprime mortgage loans. The lawsuit resulted in a $55 million settlement in U.S. District Court in Boston. "We worked jointly with the Federal Trade Commission to obtain significant monetary relief for the victims of Fairbanks' predatory loan tactics and to set up new business practices to prevent future abuses," said Niall P. McCarthy, who handled the case for CP&M as national co-lead counsel. McCarthy also served as national co-lead counsel in a predatory lending suit against Household International, Inc. that resulted in a $150 million settlement. CP&M prosecuted the class action suit against Household in U.S. District Court in Oakland, California. McCarthy and Joseph W. Cotchett served as national co-lead counsel in fourth predatory lending lawsuit against Citigroup and its affiliates that resulted in a $240 million settlement. CP&M filed a class action suit against Citigroup in Los Angeles County Superior Court. Citigroup agreed to settle the suit as part of an agreement with the Federal Trade Commission. The FTC had accused Citigroup of manipulating consumers into buying overpriced mortgages and credit insurance.
- CalSTRS Securities Fraud Settlements
The California State Teachers' Retirement System (CalSTRS) reached securities fraud settlements totaling $151.5 million with AOL Time Warner and Qwest Communications
The settlement with AOL was $105 million and with Qwest $46.5 million. Cotchett, Pitre & McCarthy had filed separate suits on behalf of CalSTRS against AOL and Qwest in California state court after opting out of federal class action suits. The suits charged that AOL and Qwest artificially inflated their stock prices in 2000 and 2001 resulting in billions of dollars of shareholder losses. "By opting out of the federal actions, CalSTRS was able to pursue California state law claims in Superior Court, resulting in timely and much bigger recoveries," said Steven N. Williams of CP&M, lead counsel in the case.
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