CLASS ACTION BLOG

Contributions for Cases

2010-02-05T22:57:00Z

Attorneys giving political donations to drive business with government officials the new qui pro quo?

We often look to government officials to resolve problems that plague our society - from developing Swine Flu vaccinations to providing legal council in the Bernie Madoff case. But who helps state officials when they are tasked with a growing list of responsibilities and fewer resources to tackle them than ever before?

Budget cuts overshadow a sea of necessary government projects. To ignore many of these projects means we ignore the rights and needs of the public. Without the help of private companies, government officials can’t effectively provide public programs and services that benefit us all.

Private law firms provide a tremendous value to the state (not to mention the public) when hired to represent government in pending litigations. State officials typically leverage private firms for legal services requiring specialized council with little or no impact to state spending. In other words, legal services provided by private firms typically don’t cost taxpayers a dime.

Hagens Berman, for instance, was chosen, after competitive bidding, to serve as legal counsel for 13 states in the landmark tobacco litigation. In addition to excellent trial skills and complex litigation experience, the firm understood the delicate needs of elected state officials. Washington and Minnesota were the only two states to take their cases to trial, which resulted in a final settlement of $206 billion for all states.

The best part – taxpayers didn’t have to foot the bill. Legal services, like Hagens Berman provided in the tobacco case, are usually paid on a contingency fee. Contingency fees are based solely on the outcome of a case. The attorneys get a percentage of the settlement so if the lawyer can’t win the case, he or she doesn’t get compensated.

State officials see a huge incentive to work with private law firms. But before, they selected law firms based on trial records and the ability to win government litigations. The old days of fair play, however, are increasingly the now days of pay-to-play. Wall Street Journal recently featured a story appropriately titled, “Trial Lawyers Contribute, Shareholder Suits Follow” which hits on this exact issue.

Several firms donate millions to out-of-state candidates in an attempt to tip the scales in their favor. And it works. In 15 of 25 large class-action settlements, one or more firms representing the state in the case donated to a politician in that state, The Journal reported.

These demands from state officials cause the practice of bribery to now become a standard practice in the legal sector. Many attorneys feel their hand being forced to contribute to political campaigns, several law firms tell The Journal. It seems offering bribes is the only way to even be considered for government assignments.

State officials accept millions of dollars each year from law firms knowing there are strings attached. But its government officials that are the puppet masters here, pulling strings for their own gain and coercing trial lawyers to practice bribery.

Why is the legal sector tolerating such a practice? Have attorneys become indolent to use bribes rather than good merit to secure government projects? Do they longer honor the pledge made to the American Bar Association, which clearly states that political contributions in exchange for government assignments are unethical?

There are plenty of legitimate ways for lawyers to support and fund their political views. Those rights need to be exercised and respect. But there is a clear difference between buttering the bread and buying the butter - and the butter is beginning to spoil.

The truth is lining pockets of politicians for legal favors dirty everyone’s pockets. Contributions for cases will cause the public to question whether or not there are underlining political motives in class-action lawsuits and ultimately taint the relationships between government and legal firms.

Deception doesn’t pay but transparency does. State officials need to clearly disclose whether or not attorneys have made political contributions in exchange for legal representation. States need to disclose which officials have accepted bribes and from which firms. The public should be aware how much was contributed and which firms are currently handling projects for the state.

By opening to kimono, trial lawyers can bring healthy competition back to government bids, which will only strengthen areas of expertise between firms. Attorneys shouldn’t be expected to contribute to political campaigns in exchange for government assignments. Bribes for business need to be frowned upon across all sectors – especially law.

Recognition needs to be given to government litigations secured by a private law firm based on their merit. The state, the public and the justice system will only benefit from the best firm representing the case - not the best and biggest campaign contributor.

Is Your Grandma Safe With Caregivers? What You Should Watch For.

2010-02-02T16:56:00Z

The demand for adult-care homes is on the rise as several Americans entering their golden years are in need of living assistance. The Department of Social and Health Services (DSHS) pushed for private adult-care homes but unfortunately, too many seniors have faced neglect and abuse from their caregivers at these facilities. Hagens Berman’s Tony Shapiro speaks with Seattle Times about the real cost of senior care in an investigative series called "Seniors for Sale."

The story examines “private residences — called adult family homes — were marketed as opportunities for seniors to live in cozy settings and familiar neighborhoods, close to family and friends, with more freedom and superior care.” However, abuse against seniors at these homes is a growing problem throughout Washington State as well as the nation, says Shapiro to Seattle Times.

There are too many stories about someone’s mother, father, grandparent grossly neglected at nursing homes and assisted-living facilities. It’s important to regularly monitor the care of your loved-one and write down your observations during each visit. Here are several warning signs to watch for that could potential save your elderly family member from pain, suffering and even death.

1. Unexplained marks, bruises or injuries
2. Untreated sores, injuries or illnesses
3. Develops poor hygiene
4. Experiences dramatic weight-loss
5. Shows a dramatic decline in overall well being
6. Demonstrates erratic behavior with strong signs of depression, anger or rage
7. Appears to be heavily medicated or lethargic for no legitimate reason
8. Seems afraid of caregivers and staff
9. Facilities seem unclean and poorly managed
10. Caregivers seem uncooperative with patients as well as families

Hagens Berman seeks to protect the legal rights of seniors and disabled adults. The firm is interested to speak with anyone that has experienced or witnessed substandard care, neglect or abuse at adult-care homes. If you know someone that has been neglected or abused while staying at an adult-care home, please share your story with us or contact Tony Shapiro at tony@hbsslaw.com. We’d like to help.

NCAA Fumbles over Video Games

2009-12-29T19:36:00Z

Incorporating physical characteristics of NCAA players helps make video gaming more realistic, but at what cost? Rob Carey, Hagens Berman attorney, spoke with ESPN recently about a class-action lawsuit we filed against NCAA and Electronic Arts, Inc. (EA).

NCAA bylaws clearly state that the commercial licensing of an NCAA athlete's "name, picture or likeness" is prohibited and rightfully so. These athletes already face overwhelming pressure to perform on and off the field.

In the segment, Carey argued that the NCAA failed to honor its promise to protect its athletes from exploitation by allowing EA to monetize on college players without permission. In many of EA's popular college sports video games NCAA athletes are subject to having their likeness plastered across thousands of television screens while EA, and likely the NCAA, reap the financial benefits.

Take the July-launch of NCAA Football 10, which featured thousands of players from 300 NCAA schools in terms of name, build, physical characteristics, jersey number, stats, and so forth. NPD, a research firm, reported that the video game sold nearly 700,000 copies in the U.S. alone and was the best-selling video game for July 2009.

With the video game selling at retail for about $40, Electronic Arts generated an estimated $28 million just two weeks after the game hit the market.

NCAA is aware that EA uses its college program and athletes in its video games. We believe NCAA received royalties from EA given that almost 90 percent of NCAA's total revenue is generated by television and marketing rights.

We argue the rights of NCAA athletes, should not be dismissed for profit. The NCAA needs to abide by their own bylaws or they should be required to secure permission and provide compensation to all players for use their name or image in any video game franchise.

This plays true for pro-football players. EA paid the NFL Players Union nearly $35 million last year for the use of players' names and likenesses in NFL games.

A story in USA Today read, "NCAA insists college players not be used as sales tools, though the task force further recommends guidelines governing the use of their names and likenesses be loosened as long as it ‘does not portray the student-athlete in a manner as promoting or endorsing the sale or use of a commercial product or service.' But exactly where is that line?"

If student-athletes cannot be used to promote or endorse a product, they certainly cannot be the product, at least not without their permission.

Hagens Berman seeks to find justice for college athletes exploited by acts not authorized by their NCAA contract. For more information about this case, visit http://www.hbsslaw.com/ncaavideogames.

Big Pharma Layoffs Could Mean Big Pharma Whistleblower Lawsuits

2009-11-12T23:24:00Z

Whether you're an employee at Pfizer, Johnson & Johnson, Abbot Laboratories, Schering-Plough, AstraZeneca or any other Big Pharma company, you've seen and may know all too well that layoffs during the last two years have cost the industry tens of thousands of jobs.

Last year, layoffs from just five pharmaceutical companies alone totaled more than 25,000. Job losses include those from sales and laboratories across the U.S. and Europe.

An interesting sidelight, though, is that off-label promotion and improper marketing of pharmaceutical drugs in America make Big Pharma big bucks. Even with billions of dollars in payouts and penalties attached to these deadly marketing tactics, the profit margins still outweigh the penalties.

Pfizer and Lilly, the largest U.S. psychiatric drug maker, are currently leading the pack, having paid $7 billion in penalties after promoting drugs for uses not approved by the U.S. Food and Drug Administration (FDA). This past September, Pharmacia & Upjohn, a Pfizer subsidiary, agreed to plead guilty to off-label marketing practices of its drug Bextra and paid the largest criminal fine in U.S. history - $1.19 billion.

According to a special in-depth report into Big Pharma's crime spree by David Evans of Bloomberg, Pfizer instructed its 100-plus sales team to promote Bextra, a drug approved only for the relief of arthritis and menstrual pain, for treatment of all acute pains.

The same day it settled for $1.19 billion, Pfizer’s Pharmacia & Upjohn also paid $1 billion to settle civil cases for off-label promotion of Bextra and three other drugs with the U.S. and 49 states.

The list goes on. Lilly pled guilty and paid $1.42 billion in fines and penalties to settle charges that for the past four years it illegally marketed Zyprexa. The drug was approved for treatment of schizophrenia, but Lilly pushed it to physicians as a remedy for dementia in elderly patients. Nevertheless, according to Evans’ report, in five company-sponsored clinical trials, 31 out of 1,184 participants died after taking the drug for dementia.

But these billion-dollar payouts and fines are the cost of doing business for Big Pharma companies. The $2 billion in fines paid by Pfizer amount to only 14 percent of its $16.8 billion revenue from selling those same drugs. Many argue that bankruptcy and felony convictions may be the only prescription for protecting patients.

With mounting fines, lawsuits and especially layoffs, legal experts predict that former employees will come forward to highlight wrongdoing within these companies.

Qui Tam lawsuits, or whistleblower suits, help the government identify illegal practices within pharmaceutical companies. They rely on insider industry information from current or former employees. By unmasking the wrongdoing tactics of Big Pharma, whistleblowers are compensated for their knowledge and efforts to protect patient safety. Under U.S. federal and state law, when a company deceives the government, whistleblowers can retain as much as 30 percent of the amount of fraud uncovered.

For example, in the late 90s, a former Pfizer employee came forward to blow the whistle against the company for its off-label promotion of the drug Neurontin. Over the course of its efforts, Pfizer raked in $12 billion in profits from drug sales. The whistleblower recouped $24.6 million under the False Claims Act for coming forward with evidence of Pfizer's wrongdoing.

As more and more Big Pharma employees are laid off despite record profits, so too does the incentive to blow the whistle on Big Pharma's fraudulent tactics.

The role of a whistleblower is critical to patient safety and a role we hold with the highest regard at Hagens Berman Sobol Shapiro, a premier law firm in the country with a track record of taking on Big Pharma. We represent current and former employees in whistleblower and consumer fraud cases.

The steps are simple for those wanting to come forward - contact HBSS, share what you know, what you've seen and heard and we'll walk you through the steps of litigation.

As a firm with national reach, offices in six cities and a successful track record of recovery in the Big Pharma industry, we have the process streamlined and simplified to make it easy on whistleblowers.

We encourage any current or former Big Pharma employees reading this to read a recent in-depth report into Big Pharma's Crime Spree. The report details the corrupt marketing efforts designed to put Big Pharma profit margins ahead of patient safety.

Pulte Homes: The “One-Stop Shop” of Home Buying Horrors

2009-10-27T23:57:00Z

In light of scandal-ridden Wall Street and an escalating unemployment rate, it’s no surprise that consumer confidence continues to fall. Americans certainly don’t feel comfortable opening up their wallets when we’re bombarded with news of corporate schemes and scandals that mock the intellect of consumers and negate their trust in corporations.

Consumers rights strike a cord within our firm and we recently filed a case in California against Pulte Homes (NYSE: PHM) claiming that the “one-stop shop” for homes engaged in a sophisticated scheme to control the entire home buying process. We allege in our lawsuit that Pulte used an integrated business model to create a self-sustaining microcosm with high prices and high sales to boost profits while trying to avoid the housing meltdown.

One-stop shopping sounds good in some circumstances because it makes life easier. We see the success of this model in Fred Meyer, Target and other national all-in-one retailers.

Yet, for a California homebuyer that sentiment could not be farther from the truth. In fact, in our suit against Pulte, we claim that the company cost California homeowners as it pushed them into dangerous loans that they would never qualify for with another lender, resulting in damaged credit, foreclosures and more.

We contend Pulte used gimmicks and discounts to entice homeowners to sign quickly. For the named plaintiff, they touted a $75,000 discount and threatened to take it away when she asked for more time to think about the commitment. She felt rushed to accept their offer and expressed concerns about affording the mortgage and using other mortgage companies, but those worries fell on deaf ears.

During the loan process, our plaintiff received no explanation of the terms, no lender representative was present at the signing to answer questions and to top it all off, English is her second language - leaving room for confusion and misunderstanding during an already stressful transaction.

High pressure, empty promises, risky loans and inflated pricing – that sums up the home buying experience you can expect with Pulte, we allege.

In our suit we claim Pulte attempted to disguise that loans were going to unqualified, high foreclosure risk borrowers by encouraging buyers to provide inflated stated and unverified income, not requiring a substantial down payment, underwriting sub-prime loans for buyers with bad credit, providing cash incentives to buyers and more.

Since Pulte controlled those looking at the applications, there were no questions asked and no red flags raised when the company knew these people wouldn’t be able to repay.

Pulte did itself and homeowners a huge disservice when it tried to boost profits and now the builder’s neighborhoods are full of foreclosures and abandoned properties creating little curb appeal to potential buyers.

Ironically, 60 percent of Pulte’s sales occurred in Arizona, Florida, California and Nevada – states with the highest foreclosure activity in the nation. Does anyone smell predatory lending practices here?

We allege that the company set these homebuyers up for failure – convincing them they could own homes realistically valued at prices far above their means. The resulting foreclosures that took place in Pulte neighborhoods brought a steep decline in home values – more than 50 percent, crash landing around $230,000.

At HBSS, we believe this is a perfect example of predatory lending and behavior that causes consumer distrust in the first place.

Though we only have one case filed in California, we’re investigating the possibility of similar cases in Nevada and Arizona. We’re interested in hearing from Pulte homeowners in California, Nevada and Arizona.

If you would like to share your experience with us, please e-mail pulte@hbsslaw.com or visit our Web site at www.hbsslaw.com/pulte or www.hbsslaw.com/pultehomes. We also encourage your thoughts and comments on the blogs. Start the discussion – I think you’ll be surprised at how many other homeowners are in the same sinking boat.

Electronic Arts: Monopolizing the market to drive profits with Madden NFL?

2009-08-14T15:51:00Z

Exclusive agreements. Inflated pricing. Strong-arming competition. It reads like a scene out of the 1920s mob-era.

Unfortunately, it’s the reality of a recent lawsuit that involves Electronic Arts and its alleged manipulation of the market while relying on the purchasing power of the extremely loyal customer base of gamers. Specifically, Madden NFL gamers.

We’re in the process of moving a case through court that represents anyone who has purchased Madden NFL, NCAA or Arena Football branded videogames from EA from August 2005 until present. Our claim? That EA pushed competitors out of the market by signing exclusive agreements with the NFL, the NFL players union, NCAA and others.

So they signed agreements – what’s the big deal?

The big deal is this market is driven by how realistically game companies portray players and teams in sports games. By signing exclusive agreements with these huge sports groups, EA is the only developer that can use likenesses, making the game much more enticing to customers.

This also means EA can charge as much as they’d like because they are the only ones offering the realistic representations that consumers expect.

A monopolization of the market stifles the creativity and quality that naturally results from healthy competition among game makers. Many argue that Two Interactive had a better game with NFL 2K5 – which received rave reviews and editorial awards -- but EA’s exclusivity agreements pushed them out of the market.

A reviewer at IGN called NFL 2K5 “one of the finest sports experiences I’ve had the pleasure of enjoying.”

Competition drives innovation – we all know that’s the foundation of a free market – and dedicated gamers want that innovation and new features - that’s why they loyally purchase these games every year.

Unfortunately, that’s not what they’re getting. EA is sitting pretty in its agreements and knows it doesn’t need to pump more money into enhancing the game because there isn’t any competition.

Recently we received the green light from the court after it ruled against EA’s motion to dismiss the case meaning Madden purchasers will soon get their day in court.

We’ll continue to update our Web site and blog on this case as we recognize there are loyal Madden followers interested in how this will end.

In the meantime, we want to hear from those who’ve purchased the game or several versions since 2005.

If you have questions about the suit or want to participate, you can e-mail our attorneys at maddenNFL@hbsslaw.com.

We also want to hear your thoughts. Leave a comment or send us a note and share your thoughts on how EA may be stifling competition and why you think it’s hurting the gaming experience.

Proposed Settlement Reached with Expedia Regarding Hotel Fees

2009-07-30T23:32:00Z

Today there is good news for Expedia customers. Hagens Berman Sobol Shapiro reached a proposed settlement with Expedia in a case we filed in 2005 on behalf of consumers, claiming the travel-booking giant defrauded consumers by repeatedly breaching its contractual obligations and by charging service fees under false pretenses in millions of hotel transactions as well as allegations it violated the Consumer Protection Act.

The settlement is a good one – it will provide consumers with a total of $123.4 million in cash or Expedia credits for those covered by the settlement. The settlement covers anyone who purchased a hotel stay from Expedia between January 10, 2001 to June 11, 2008, and anyone who purchased travel packages from Expedia between Feb. 18, 2003 to Dec. 11, 2006 that includes a hotel stay as part of the package.

If the court preliminarily approves the settlement, all parties will notify potential class members about the settlement and give everyone instructions on how to object to opt out of the settlement or object to the settlement. The parties will seek preliminary approval on Aug. 10, 2009.

While this is great news for consumers, we need to urge patience. The wheels of justice turn slowly. Even if everything works perfectly, consumers won’t see any form of reimbursement until sometime next year.

Check back here for details as they become available, or visit www.hbsslaw.com for more information.

Blowing the Whistle on the Pharmaceutical Industry

2009-07-30T18:23:00Z

Healthcare reform – depending on your point of view -- or perhaps your political affiliation -- is either a long-overdue step to insure our nation’s health, or the first step on a slippery slope of socialized healthcare.

Regardless of your view, we spend about $8,000 for every man, woman and child in our country, gobbling up nearly 18 percent of our gross national product. By contrast, we spend twice as much as many western nations, but still have higher rates of infant mortality and lower life expectancies.

One thing we can agree on is the idea that waste, greed, and corruption hamper our current healthcare system. High on that list of bad actors is the pharmaceutical industry. It seems there isn’t a week that passes without a story of a drug company stacking the deck with bogus studies, pushing products for off-label uses, or attempting to rig the pricing systems to boost the bottom line.

Today I want to talk about an odd named legal principle that, in many respects, is one of our biggest tools in reigning in these abuses. The principle is called Qui tam, which is short for the Latin phrase, "qui tam pro domino rege quam pro se ipso in hac parte sequitur," which translates to "he who brings a case on behalf of our lord the King, as well as for himself."

Most people know the concept by its more common term – whistleblower. While some might think the term has some negative baggage associated with it, I can say that in my years of practicing law, whistleblowers have been one of the most potent, positive forces in bringing positive change. More on that later.

First, though, what is the role of a whistleblower? It’s no secret the government is short-handed. There are never enough people to police every business, every transaction and every industry in this country. Private litigators help fulfill that role to some degree, investigating bad practices and pursuing legal action when needed.

Both private litigators and the government also rely on one more source – you, the people inside these companies. Employees serve as the eyes and ears in identifying corrupt practices, and over the years have helped taxpayers and the government recoup significant amounts of money wrongfully obtained by pharmaceutical companies.

The role of a whistleblower is pretty simple – if you are aware of corrupt practices within an organization, step forward and help the government investigate if an issue is worth litigation. If a case develops and reaches a settlement or verdict, as a reward for your help, whistleblowers can keep as much as 30 percent of the amount of the fraud uncovered.

Here are a few examples to help paint a broader picture of what this means.

Medicis Pharmaceutical - $9.8 million settlement
From Nov. 2001 through April 2004, Medicis sales reps targeted pediatricians in an effort to sell a topical skin ointment, Loprox, as a treatment for diaper rash. The problem: the Food & Drug Administration (FDA) did not approve Loprox for use on children under the age of 10. This was an instance of off-label marketing.

Employees stepped forward and helped the government pursue legal action against Medicis for off-label marketing.

The company settled at $9.8 million. Through Medicaid, the government paid millions of dollars for Loprox prescriptions that would not have been reimbursed if government authorities had known that prescriptions resulted from the company’s off-labeling marketing campaign.

The employees in this case recouped a percentage of the millions lost by the government and helped stopped the wrongful use of a prescription ointment on young children.

Jazz Pharmaceuticals - $20 million settlement
In another case involving off-label marketing, Jazz Pharmaceuticals agreed to a $20 million settlement after a sales representative for the company filed a lawsuit on behalf of the U.S.

The lawsuit claimed the company wrongly marketed and sold the drug, Xyrem, for unapproved uses. The company promoted the drug for fatigue, insomnia, chronic pain, depression, bipolar disorder and weight loss when the FDA approved it for narcolepsy.

The drug’s active ingredient, GHB, also known as a “date rape” drug, was sold as safe to use on children and the elderly and a compensated psychiatrist advised doctors how to conceal the off-label prescriptions to ensure insurers would pay them.

The company also admitted that it relied on a psychiatrist to give talks around the country promoting the unapproved uses, while paying him tens of thousands of dollars for speaking engagements.

In both cases, off-label marketing was the issue and foundation for litigation. Drug companies desperate to make sales and increase market share succumbed to marketing unapproved uses of drugs to do so.

These are instances where sales representatives and insiders at these companies had everything at their fingertips and knew what they were doing was not only morally wrong, but illegal and hurting patients and federal programs.

Employees have the power to speak up when they know there is corruption within their company. Blowing the whistle on fraud in the pharmaceutical industry is necessary to instigate change and hold big corporations accountable to the public.

If you’re interested in learning more you can visit our Web site, www.pharmawhistleblowers.com.

If you’re looking to speak to someone about questionable practices you’ve seen or experienced you can contact our attorneys for advice on next steps and involvement at (206) 623-7292 or fill out our report a fraud form.

Is KB Home (NYSE: KBH) Illegally Inflating Florida Home Prices?

2009-07-21T23:48:00Z

Did Florida residents who purchased homes from housing giant KB Home (NYSE: KBH) fall victim to the same scheme home purchasers claim the housing giant used in California, Arizona and Nevada?

Earlier this year, we filed cases in Arizona and California against KB Home claiming the homebuilder conspired with mortgage giant Countrywide and its appraisal subsidiary, LandSafe, to artificially inflate home appraisal values in an effort to push up home values. According to the complaints, homeowners unknowingly overpaid for their homes and purchased overly expensive mortgages.

Now we are actively investigating similar claims of wrongdoing in Florida, another state crippled by a crumbling housing-market collapse.

Since we began our actions in California, we’ve heard from purchasers that KB may be using similar practices in Florida, where the homebuilder has 76 communities.

KB Home operates in California, Nevada, Arizona, Colorado, Texas, Louisiana, Florida, North Carolina and North Carolina.

We’re interested in hearing from Florida KB homeowners. If you would like to share your experience with us, please e-mail kbhomes@hbsslaw.com or visit our Web site at www.hbsslaw.com/kbhomeflorida.

TARP Fund Abuse – Who’s Blowing the Whistle?

2009-07-21T21:10:00Z

An AP story I read yesterday cites that the potential cost for every American in aiding the financial rescue of our economy is about $80,000.

With such a high investment in our economy, government and taxpayers have a well-vested interest in seeing these funds appropriately spent and monitored. This means those of us working in bailout recipient companies have the opportunity to raise alarm when spending goes astray – in other words, blow the whistle.

A Washington Post article from Monday highlights findings from the inspector general regarding banks’ misuse of TARP Funds.

According to the story, the inspector general surveyed 360 banks that received money through the end of January and roughly 80 percent reported it used some of the money to support new lending.

The report, compiled by special inspector general Neil Barofsky, is clear in its request that the Treasury Department be accurate and transparent in its reporting to the American people, the individuals helping fund these relief programs.

The kicker is that though the report calls on the Treasury Department to require regular and detailed information from banks about the use of taxpayers’ money, the Treasury has refused to collect it.

We believe TARP guidelines were created in an effort to increase transparency, and to us, the Treasury’s refusal to follow through should raise alarm for taxpayers.

Many of the banks that received TARP funds got help to make investments, repay debts or buy other banks – not increase lending.

My point in all this: Those in the banking industry who see this abuse and know it’s happening owe it to fellow taxpayers and the government to report TARP fund abuse.

“Whistleblower” can be a touchy word -- it can be viewed as an ally to the taxpayer, or as the elementary “tattletale.” However, whistleblowers play an increasingly important role in helping private litigation assist the federal government in monitoring and correcting corrupt practices.

As we’ve mentioned before, some take advantage of these federal programs, and with more than $3 trillion pledged to help our nation’s institutions, wayward practices are bound to come to the surface. Without the eyes and ears of employees identifying questionable practices, large institutions and corporations could continue undermining customers, employees, and in this instance, taxpayers and the government.

To learn more about the role of whistleblowers in TARP fund abuse we invite you to visit our Web site – www.stoptarpfraud.com.

Leading Propane Tank Providers Feeling the Heat through Class-Action Lawsuit

2009-07-06T21:15:00Z

Grilling in the outdoors is one of the highlights of summertime.

Maybe it is because we’ve become a little lazy, or spoiled by immediate gratification, but more and more Americans have given up charcoal and lighter fluid, instead turning to propane-fired grills.

Part of this is making sure we have enough propane to fuel those late night gatherings – and many of us flock to local grocery stores and mega-stores to stock up on tanks.

Unfortunately for millions of consumers, propane companies such as Blue Rhino and AmeriGas stopped ‘filling’ the tanks when fuel prices rose. Instead of passing along the price hike to customers, companies kept pricing the same but reduced the tank volume.

The change in volume make sense to keep pricing the same, the problem is these companies didn’t do enough to warn consumers of the volume change. The bottom line is that we believe they violated their promise to customers.

Seattle’s KOMO-TV did a story on the lawsuit our firm filed against Blue Rhino and AmeriGas claiming the two conspired to reduce the amount of propane while failing to inform customers.

To us, it’s a pretty clear rip off to consumers. They tell you that you’re purchasing a full tank when you’re actually receiving less.

Since the story ran, we’ve had many customers join the suit through our Web site and we encourage anyone who purchased a tank from Blue Rhino or AmeriGas from Jan. 1, 2008 until present to join here.

To view the story on KOMO News you can watch the video link here.

Other common uses for these tanks include gas grills, outdoor heaters and fireplaces, mosquito traps and more. Thousands of retailers across the country sell these particular tanks including Home Depot, Wal-Mart, Safeway and other local grocery stores, convenience stores and gas stations.

Rigged Home Values? – KB Home Lawsuits Expand

2009-06-18T16:52:00Z

Home appraisals are an essential part of the home buying process. An independent appraisal is a safeguard for both the purchaser and the lender – it is an unbiased look at the value of a property.

What happens, though, when you corrupt the process? What if a builder works in cahoots with a mortgage company who, by the way, owns an appraisal service?

If you read our lawsuits against home-building giant KB Home, Countrywide Mortgage and its appraisal subsidiary LandSafe, you will see that consumers – homebuyers – suffer.

For the past several months our firm’s kept a close eye on KB Home, specifically its lending and sales practices, and uncovered what we believe to be widespread fraud in Arizona, Nevada and California. Our suit contends the trio conspired to inflate appraisals, rig home values and allowed their partner, Countrywide to place homeowners in loans they didn’t qualify for and can’t afford.

The suit includes a list of tactics the group used to deliver predetermined appraisal values, including blatantly falsifying sale prices for comparable properties, using comparable properties that were as much as 10 miles away, and citing comparable properties that were in other planned communities.

When homeowners unknowingly overpay for their home they are under water from day one and the ramifications are long lasting and extremely damaging. Many don’t find out the extent of the damage until loan payments become too burdensome or they try to sell and realize they won’t be able to repay the loan through a sale based on an accurate and lower appraisal.

Since the announcement of our cases, we’ve heard from homeowners in these areas – all who are rightfully concerned about their homes and their loans – and the overwhelming response is a feeling of despondency that KB Home and Countrywide, companies they trusted, would so blatantly manipulate them for the sake of a sale.

Recently our firm’s taken on a large number of real estate focused lawsuits as the housing market started to collapse in 2006. This is the second lawsuit involving KB Home and the fourth naming Countrywide and LandSafe.

In the past two years, we’ve all learned a great deal about the distance both individuals and corporations are willing to go for the sake of profits. In our eyes, it’s appalling. These practices hinge on lies, corruption and collusion and ultimately end up hurting many.

KB Home rigged home values and as a result, lawsuits are now expanding into other areas. We believe we’ve just hit the tip of the iceberg with KB and will continue to investigate operations in other markets.

For now, we encourage any KB homeowners out there to share information about these lawsuits with friends and neighbors. We welcome your thoughts and comments here on the blog and encourage you all to visit the case page at www.hbsslaw.com/KBHomes.

As the cases progress and we begin new investigations, we’ll keep you updated.

Division One Ticket Lottery Participants Chalk a W in the Win Column

2009-05-14T18:10:00Z

This year the University of Washington men’s basketball team brought a renewed sense of hope and excitement to the dismal Seattle sports scene. The PAC-10 champs made it into the March Madness dance seeded fourth in the country and traveled to Portland to play. As you can imagine, tickets sold like hot cakes to UW fans throughout the region.

To get those tickets, fans had to go through Ticketmaster and anyone who’s purchased a ticket through the ticket sales giant knows the process can be frustrating. Either tickets sell out in five minutes, the site crashes or you have to enter a lottery and pay for the chance to win tickets.

About a year ago, we started hearing from upset Division One basketball fans who paid to enter ticket lotteries, didn’t win tickets, and never saw a refund for the fee. At a quick glance, it seems like the typical frustrating process to get tickets. Dig a little deeper and you see a double-team effort by Ticketmaster and the NCAA to boost profits and for a while, both organizations got away with it.

Yesterday, Ticketmaster agreed to settle a lawsuit our firm filed last May and handed back application fees to those who didn’t win the chance to get tickets to the NCAA 2009 men’s basketball tournament.

Our original suit claimed both organizations ran the scheme for several years. Only after further discovery in the case, we learned Ticketmaster participated in part of the lottery and only for one year.

The NCAA on the other hand has a much larger issue to face. The organization has not settled and our case continues to move forward.

In the lawsuit, we contend the NCAA allows fans to pay several application fees to increase their chance at winning tickets. Unfortunately, Ticketmaster and the NCAA operate in states in which lotteries are illegal unless run by the state or licensed charities. These organizations don’t fall into either of these categories.

In what we see as a foul play, NCAA appears to have changed its ticketing policies listed on its Web site. The site now indicates that the NCAA reversed course and doesn’t allow multiple entries for ticketing lotteries. If a fan doesn’t win, they receive a full reimbursement of their application fee. There’s been no official announcement from the NCAA and our guess is the organization hopes the change goes unnoticed.

We believe both organizations know the scheme harmed fans and this first settlement against Ticketmaster bodes well for those fans.

We’ll keep you posted on this case and invite you to check out the case page where you can review court documents and press releases.

We’d also love your thoughts on the Ticketmaster settlement and case against the NCAA – what do you think of the practice? Is a ticket lottery fair in some circumstances?

The Privilege of Pressure in the Real Estate World

2009-04-28T22:02:00Z

Billie Jean King, a pioneer in women’s tennis once said ‘pressure is a privilege.’ Although she was speaking to her first match in the U.S. Open, the idea is transferable across many industries, including our real estate market.

Those in the real estate world are certainly feeling the pressure and I bet most don't consider it a privilege. Take the recent tragic news from Virginia, where the CFO of Freddie Mac decided to take matters into his own hands. It's a somber and tragic reminder of how burdensome our current financial crisis has become.

But those at the top aren't the only ones feeling the weight, the pressure trickles down to lenders, appraisers, real estate agents and homeowners. For the past year and a half, we've been hearing from these people - our friends and neighbors. Many forced to make gut-wrenching decisions about their homes and livelihoods while under unimaginable pressures.

The home appraisal industry is one where we've seen a lot of ill behavior lately. Big lending companies like Countrywide, Wells Fargo and Bank of America use market share and power to strong-arm appraisers into inflating home values. Then if these independent appraisers refuse, many find themselves on a blacklist and lose a significant portion of their income.

Homeowners have suffered from this scheme as well. If the appraiser inflates the value of the home per the request of the lending arm, the unsuspecting homeowner finds themselves attached to a 30-year loan and paying a mortgage on inflated numbers.

Has anyone's homeownership dream ever included paying inflated fees or trapping themselves into a mortgage they can't afford?

Of course not, but the motivation of the lending giants has nothing to do with helping to fulfill a dream. We think their world is all about profits, profits, profits.

There are many pressures at the top of this world - satisfying board members, shareholders and CEOs by driving in profits and at any cost. We've all seen the effects of this pressure - whether it's a large financial institution filing bankruptcy, significant layoffs, or suspending 401(k) matches, the pressure of sustaining inflated profits has finally collapsed in on itself and now many are left out to dry.

Pressure is a privilege and frankly the more responsibility we have, the more problems we have to deal with - that's no secret. What is so distasteful is how we got ourselves into this mess in the first place.

Kerry Killinger at WaMu knew the loans customers received weren't good, as did Angelo Mozilo at Countrywide - these are former CEOs of major companies, responsible for billions of dollars in profits. I hope they knew right from wrong. But from their actions, I can't be sure. It seems like these folks simply chose to ignore customers for the sake of their mantra "profits, profits, profits."

Sure, the current economic crisis erupted for many reasons. However, the few at the top had the power to guide the market. Unfortunately, they chose to place self-interests ahead of the interests of millions and here we are - feeling trapped beneath the pressure of a failing economy, guising our fear with hope, hope that soon this will all come to an end.

In the meantime, private litigation is a route for homeowners and appraisers seeking recovery and assistance. Our firm has several active cases and investigations, listed below, and we invite you to review and contact us if you have questions or want to join a case.

Homeowner Cases:

Countrywide - claims homeowners unknowingly pay inflated fees for appraisal work through Countrywide and appraisal partner Landsafe.
Wells Fargo - claims homeowners unknowingly pay inflated fees for appraisal work through Wells Fargo and appraisal company Rels Valuation.

Appraiser Cases:

Countrywide - claims the company forces appraisers to inflate appraisal values, if they refuse appraisers find themselves on a blacklist, denied future work. This suit includes work appraisers have done for Landsafe.
Wells Fargo - claims the company forces appraisers to inflate home values, if they refuse they find themselves denied future work and on a blacklist. This suit includes work appraisers have done for Rels Valuation.

Active Investigations:

Bank of America - We're investigating claims Bank of America conspired with Lender Processing Services to overcharge homeowners for appraisals. The scheme, if proven true, places big profits in the companies' pockets and increases fees to homeowners.
Countrywide Predatory Lending - We're investigating several claims against Countrywide and how the company steered customers into bad loans or penalty fees.
KB Home and Countrywide - We're investigating claims that KB Home had agreements with Countrywide Mortgage and its appraiser, Landsafe, to inflate the appraised value of KB homes to meet contract prices. We believe some homeowners may have paid as much as $50,000 above the actual value of their home.

Too experienced, overqualified or expensive? The plight of Older Americans in Today’s Job Market

2009-04-14T21:21:00Z

In harsh economic times, meeting the bottom line often means letting employees go despite years of loyalty. It's not intentional. It's business - and these days it's harder and harder for managers to make ends meet without handing out pink slips.

However, often times these layoffs are intentional. From a business standpoint, older workers tend to cost employers more money - in terms of salary and benefits. That's why older employees find themselves on the chopping block when employers start giving the ax to meet operating goals.

Older employees are not taking too kindly to the layoffs as these days replacement positions are harder to find. A story in the Wall Street Journal shows that according to the federal Equal Employment Opportunity Commission (EEOC), age discrimination claims are at a record high, reaching about 95,000 in 2008. That is a 15 percent increase from 2007.

Fortunately for older workers, these age-based practices go against the Age Discrimination Employment Act of 1967, which protects individuals who are 40 years old and above from any kind of employment discrimination based on age.

There is also a 2005 Supreme Court decision that broadened the interpretation of age discrimination to include cases where there was no evidence of intentional discrimination. This set of laws protects employees who are 40 years old or older and often prevents companies from widespread age bias - but not enough.

A recent article in Business Management Daily shares the plight of George, a man in his 60s who worked as CFO of a shoe import company. When management tried to terminate George, he proactively volunteered to take a steep pay cut. Unfortunately, the company still terminated his employment. It was not until later he learned that his replacement was younger and given a higher salary than his counter offer.

This is an instance where George can turn to private litigation. For businesses, it's increasingly important to be careful with HR practices and watch for older employees offering to take pay cuts. This can be an alarm for an impending suit, and nowadays private litigators are watching.

Here's the typical process for someone filing an age discrimination claim. Let's say our friend Bob losses his job and files a claim against his employer. Once filed, the EEOC has 180 days to investigate. If the agency finds merit in the claim, officials usually try to reach a voluntary settlement with the employer. If no settlement is reached, the EEOC or Bob can file a separate suit - in comes private litigation.

In fiscal 2008, the EEOC filed 290 lawsuits, resolved 339 lawsuits and resolved 81,081 private sector charges.

This past Sunday the New York Times broadened the discussion in its Room for Debate column. What about those older Americans who don't have jobs or have been struggling to find something for years? Unfortunately, there aren't any laws that protect the older, wiser bunch from not being hired for a position.

According to the Bureau of Labor and Statistics, those 45 or older, who are already unemployed, were out of work for more than 22 weeks in 2008. In comparison, younger workers faced 16.2 weeks of unemployment.

What are your thoughts? What are you seeing in your workplace or amongst your friends that raises alarm?