Access To Justice

The Wall Street Journal (subscription required) reports that a dispute over a $15 million life-insurance policy taken out on an Indianapolis woman who drowned in her bathtub took a new twist after her family alleged in a suit filed against American International Group (AIG) that the insurer ran a “scheme” to let investors buy big policies on older people as speculative bets, a practice known as “stranger-originated” insurance. The Journal reports the lawsuit is among hundreds pending nationwide following the collapse in the market for life-insurance policies purchased by investors.

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Consumers are fighting back against aggressive tactics by debt collectors.

McClatchy Newspapers reports that federal lawsuits alleging violations of the Fair Debt Collection Practices Act have more than doubled since 2007, the year the nation plunged into recession. In 2007, around 4,400 lawsuits were filed under this law, a figure that skyrocketed to nearly 9,300 last year, according to McClatchy.

At the same time, complaints about overly aggressive collectors have also shot up. The Federal Trade Commission logged more than 119,000 debt collections complaints last year – second only to identity theft. McClatchy reports that debt collection didn’t crack the FTC’s top 20 consumer complaint list until 2008.

Under the law, debt collectors cannot contact you at work, threaten violence, harass someone by phone, lie or misrepresent who they are and the amount owed, among other consumer protections.

Got a credit card? Then you’ll want to keep tabs on a class-action lawsuit scheduled to go before the U.S. Supreme Court this fall.

Reuters reports that the court will hear an appeal by JP Morgan Chase & Co. over whether the bank’s failure to notify its credit card holders before pushing up interest rates for defaults or late payments violated the Truth in Lending Act. The plaintiff in the suit alleges the bank violated the federal law when it retroactively raised the interest rate on his credit card to the start of a payment cycle after his account was closed due to a late payment, according to Reuters. Chase claims its card agreement discloses that it could raise rates under certain conditions.

The suit was initially dismissed by a federal judge in California but was reinstated by a federal appeals court last year, Reuters reports.

News developments that we’ll be watching at Sokolove Law:

The Boy Scouts of America – in what may be a record award against the youth organization – must pay $18.5 million in punitive damages to a man sexually abused by a former assistant scoutmaster more than 20 years ago, according to the Associated Press. The AP writes that the verdict marks the second time the Oregon jury found for plaintiff Kerry Lewis in the case; on April 13 the jury awarded him $1.4 million in compensatory damages in the trial’s first phase after determining the Scouts were negligent in allowing the scoutmaster to have contact with scouts, including Lewis, after he told a Scouting official he had molested other boys. The case is the first of a string of six sexual abuse lawsuits filed against the Scouts in the same Oregon court.

Millions of credit card holders remain vulnerable to the threat of  “forced arbitration,” according to a new report from the non-profit National Consumer Law Center.  The report says creditors and debt collectors use mandatory predispute arbitration clauses to deny consumers their rights, win nine out of 10 arbitration cases, and take shortcuts to garnishment of wages and attachment of bank accounts. The practice, common in the credit card industry and others, has come under scrutiny after the exposure of secret financial ties between National Arbitration Forum, a leading “impartial” arbitrator, and Mann Bracken, a major debt collector, according the report.

Covidien is voluntarily recalling some of its tracheostomy tubes, which are used to help patients on ventilators keep breathing. The company says it is recalling certain cuffed ShileyTM tracheostomy tubes and Custom/Specialty tracheostomy tubes because their cuffs were not holding air as a result of leaks in the pilot balloon inflation assembly. This could result in a sudden decrease in the amount of oxygen in the blood or a sudden increase in the amount of carbon dioxide.

Keep those you love protected from harm.  At Sokolove Law, we’re here to help.

Propylthiouracil, a drug to treat hyperthyroidism due to Graves’ disease, will now carry a black box warning on its label that will include information about reports of severe liver injury and acute liver failure in adult and pediatric patients using this medication.

In its safety announcement, the Food and Drug Administration (FDA) identified 34 cases of serious liver injury linked to the use of propylthiouracil, or PTU, between 1969 and 2009, including 15 fatalities.  The FDA is requiring that a Medication Guide be given to every patient filling a prescription for propylthiouracil. The agency also advised patients using the drug to report changes such as fever, loss of appetite, nausea, vomiting, tiredness, itchiness, dark colored urine, or yellowing of your skin or eyes to their healthcare professional.

As always, do not make a change to your medication without first consulting with your doctor.

If you have taken Propylthiouracil and believe you were injured as a result, contact us.

In a win for consumers, the U.S. Supreme Court has ruled that debt collectors and their attorneys cannot hide behind legal error in interpreting the Fair Debt Collections Practices Act (FDCPA).

In a 7-2 opinion, the Court said that “bona fide error defense …does not apply to a violation resulting from a debt collector’s mistaken interpretation of the legal requirements of the FDCPA.”  The decision arose from a case that alleged an Ohio law firm made a mistake during a foreclosure action for Countrywide Home Loans,  reports the Cleveland Plain-Dealer.

The U.S. Census Bureau faces a class-action lawsuit alleging it engaged in discriminatory practices when hiring census takers to help with the 2010 head count.  The suit alleges that the bureau unlawfully turned down applicants with arrest records regardless of whether or not the arrest led to a criminal conviction. This policy discriminates against African-American and Latinos in violation of Title VII of the Civil Rights Act, according to the suit, since they are more likely to have arrest records and convictions.

News developments that we’ll be watching at Sokolove Law:

Parents should be aware that more than a million SlingRider Baby Slings are under recall due to reports claiming that three infant deaths occurred in the slings last year.

Infantino is recalling 1 million of its SlingRider and Wendy Bellissimo products in the US and 15,000 in Canada, according to the US Consumer Product Safety Commission (CPSC) and Health Canada. The CPSC says consumers should stop using the slings immediately for infants four months or younger due to a potential suffocation hazard.

The CPSC is aware of three reports of deaths that occurred in these slings in 2009; a 7-week-old infant in Philadelphia, Pa.; a 6-day-old infant in Salem, Ore.; and a 3-month-old infant in Cincinnati, Ohio.

The Infantino recall follows a general warning about sling carriers for babies issued by the CSPC on March 12. That warning said slings can pose a risk of suffocation to very young infants. Sometimes a sling’s fabric can press against the nose and mouth, blocking breathing; some slings keep the baby in curled position in which the chin bends toward the chest, restricting a child’s airway and limiting its oxygen supply.

CPSC has determined that a mandatory standard is needed for infant sling carriers. No safety standards now exist for these products.

Contact us if you or someone you know has been injured by this product.

Consumers got a present from the Federal Reserve recently in the form of new rules that take aim at gift card fees and restrictions, according to an Associated Press report. Under the rules, which take effect Aug. 22, consumers have up to five years to use the cards and service or inactivity fees can only be triggered by certain conditions.  Last year Congress enacted legislation ordering the Fed to protect gift-card holders.

Chalk up a big loss for big banks. The Miami Herald reports that a lawsuit challenging how banks calculate overdraft fees charged to debit card users will move forward despite efforts by the banks to have it dismissed. The suit alleges that banks engaged in practices such as not processing charges until days after a purchase was made and the customer’s checking account would be depleted. Banks named in the suit include Bank of America, Citibank, Wachovia and Wells Fargo, among others, writes the Herald. The lawsuit consolidates a series of similar suits from around the country.

News developments that we’ll be watching at Sokolove Law:

The U.S Food and Drug Administration (FDA) plans to study how medications taken in pregnancy affect mothers and their unborn children, according to a report from Reuters. The new study will be called the Medication Exposure in Pregnancy Risk Evaluation Program. Two-thirds of mothers-to-be have used at least one prescription drug during pregnancy, according to the FDA. There are few clinical trials that test the safety of medications in pregnancy due to concerns about the health of the mother and child.

A class-action lawsuit filed in Manhattan’s Federal District Court last week alleges that some New York debt collectors are using “fraudulent documents to surreptitiously win court judgments – all without the debtors’ knowledge,” writes The New York Times. The paper reports that use of the practice has been spurred by the recession and the rise in consumer debt actions.

Recent Recalls

General Motors announced a January recall of 22,000 Chevrolet Corvettes after finding problems with their removable roof system, writes The Burlington County Times. The recall applies to 2005-07 model year Corvettes and Corvette Z06 models. According to the article, GM told the National Highway Traffic Safety Administration (NHTSA) that the adhesive between the roof panel and the frame may separate, allowing the roof to come off while driving and posing an accident risk. GM will install a redesigned roof panel as a result. The automaker issued a similar recall in 2006.

Make personal safety one of your resolutions in the New Year. As always, Sokolove Law is here to help.

News developments that we’ll be watching at Sokolove Law:

Relief is in sight for some homeowners whose units were constructed with defective Chinese drywall. Lenders have been asked by the U.S. Department of Housing and Urban Development (HUD) to suspend or reduce mortgage payments temporarily for affected homeowners whose mortgages are insured by the Federal Housing Administration, according to an article in The South Florida Sun Sentinel. The HUD guidelines also urge lenders not to charge late fees and to let homeowners make up past-due payments.

The Associated Press reports that hundreds of people have sued the Tennessee Valley Authority in the aftermath of last year’s huge coal ash spill at its coal-fired power plant in Kingston. The AP says the December 2008 spill occurred when toxic muck breached a holding pond at the plant.

A class-action RICO settlement believed worth at least $184 million was granted final approval by a federal judge in a victory for its class of mostly elderly investors, writes Law.com. The investors, according to the article, claimed they were enticed by deceptive marketing used by sales agents and others to purchase long-term annuities from American Investors Life Insurance Co. that had maturity dates exceeding their own life expectancies.

We’ll be watching how these events play out.  Sokolove Law is here to help.

Think of it as a little holiday gift:  JP Morgan Chase & Co. announced that it was dropping mandatory arbitration clauses from its credit card contracts.  The move clears the way for credit card customers to file class-action and other lawsuits against the bank.  The Associated Press has the story here.

As I’ve written before, mandatory arbitration takes all of the fairness out of the system.  Essentially, customers are forced to bring their complaint before an allegedly unbiased arbitrator who will render an impartial ruling.  Of course, the problem is that the arbitrators are usually not impartial, and their rulings are rarely unbiased.

Thankfully, the credit card companies, under enormous pressure from lawmakers and consumer advocates, are removing these clauses from their contracts.  A Chase spokesman is quoted in the A.P. story as saying that removing these clauses and allowing consumers to sue: “is the right thing for our customers and our business, and reflects our commitment to clearer and simpler communication with our customers.”

But let’s be clear, it’s not exactly like the credit card companies have seen the light.  Instead, as the AP report makes clear, Chase’s decision comes just as the credit card giant settled a New York case over the issue.  Proving once again that the civil justice system is the safety net of last resort to make these companies do the right thing.

Last Thursday, a group of women’s rights advocates took their fight against the insurance industry to Capitol Hill.  Their mission: to end unfair insurance practices that discriminate against women.  Marcia Greenberger, co-president of the National Women’s Law Center testified before the Senate Health Education and Labor Committee on Thursday, outlining for the committee the unfair practices of health insurance companies.

Here is some of the information that Greenberger provided to Congress, as reported in the National Law Journal (subscription required):

•    Women are charged as much as 48% more for men than health insurance
•    Of the more than 3500 plans studied (by a 2008 study) 60 percent did not cover maternity
•    Women are regularly denied coverage for “pre-existing conditions” such as pregnancy, or c-section.
•    In eight states, insurance companies are allowed to use a women’s status as a survivor of domestic violence to deny coverage.

California Governor Schwarzenegger recently signed a law that bans so-called gender rating by insurance companies which results in higher premiums being charged to women than men.  It’s an important first step, one that the feds should follow.

That said, there’s much more to be done to curb the discriminatory practices of insurance companies.  I’ll have more on that in the future.