|
Consumer
Law Newsletter:
Issue No. 12 |
|
July
18, 2003 |
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| Top
News |
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|
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| Introduction |
| The
Consumer Law Newsletter is published quarterly by the national
law firm of Lieff Cabraser Heimann & Bernstein, LLP.
We hope you find the newsletter of interest. The newsletter
is sent to all persons that have contacted our law firm
via the internet and signed up for the newsletter. We do
not sell to third parties or transfer in any way your
personal information, including email addresses. If you
do not wish to receive any future editions of this newsletter,
there are instructions at the bottom on how to remove yourself
from our recipient list. |
| |
| Top
News |
|
- Proposed
Federal Legislation Would Undermine Civil Rights and
Allow Consumer Fraud and Employment Discrimination to
Flourish
|
| A
class action is a type of lawsuit in which one or several
persons, called class representatives, sue on behalf of
a similarly affected larger group of persons. The government
can only do so much in policing corporate wrongdoing. Class
action lawsuits provide the means for consumers, employees
and persons whose civil rights are violated to effectively
band together and protect their rights. |
| Major
businesses are trying to limit the ability of ordinary people
to challenge widespread fraud, discrimination, and defective
products. Both business and the White House have said that
passing a law to limit class actions is their number-one
priority. |
| National
consumer rights organizations, national civil rights organizations,
the Federal courts under the leadership of Chief Justice
Rehnquist, and the state courts are all against the bill,
entitled the Class Action "Fairness" Act or S.
274. But business has already won in the U.S. House of Representatives,
and the bill will come up before the Senate in September. |
| S.
274 allows corporations to shift most class actions from
state to federal court, even though the cases involve violations
of state law, and then bars federal courts from awarding
any additional compensation, called "incentive awards,"
to class representatives. |
| Business
thinks that federal courts award less relief than state
courts. Whether or not that belief is correct, it is clear
that this bill will take away the right of state courts
to interpret and apply their own state consumer, antitrust,
and civil rights laws. It is also clear that this bill will
result in a huge increase in the backlog in federal courts,
delaying relief for everyone. |
| While
many corporations are pushing very hard to take away your
rights by passing S. 274, you have the ability to help defeat
the bill by lobbying your senators. A nonprofit organization,
Public Citizen, has set up a system that will let you send
a free fax to your Senators asking them to vote against
the bill. |
| Please
do this TODAY, and ask your friends and relatives to do
the same. If enough of us band together, we can stop this
bill. Go to the free web site fax system by clicking
here. |
| We
also encourage you to visit Public
Citizen's website to learn more about S. 274. For the
specific page concerning the bill, click
here. |
| |
- Abercrombie
& Fitch Charged with Employment Discrimination
|
| On
June 17, 2003, Lieff Cabraser, joined with leading civil
rights organizations, filed a class action lawsuit in federal
court alleging that the hiring and employment practices
of Abercrombie & Fitch Co., one of the nation’s
largest clothing retailers, discriminate against Latino,
Asian-American and African-American applicants and employees. |
| Lieff
Cabraser attorneys commented, "For many of
the plaintiffs this is their first foray into the job market.
It is tragic that Abercrombie taught these young adults
that workplace discrimination is not just something in their
history books." |
| The
class representatives are young adults who allege that
they were qualified for employment at Abercrombie and
were not hired or were terminated because of their race,
color, and/or national origin. The complaint charges that
Abercrombie enforces a nationwide corporate policy of
preferring white people for sales positions, desirable
job assignments, and favorable work schedules. |
| Among
the specific charges against Abercrombie are that it: |
-
recruits, hires, and maintains a disproportionately
white workforce of salespeople (called Brand Representatives)
who act as salespeople and recruiters of other employees;
and
- systematically
discourages applications from minority applicants
and refuses to hire qualified minority applicants
as Brand Representatives.
|
| To
read more about the lawsuit, please visit afjustice.com. |
| |
- Lehman
Brothers Held Liable for Aiding and Abetting Fraudulent
Lending Practices
|
| On June 16, 2003, a federal jury held Lehman Brothers
, Inc. accountable for knowingly providing substantial assistance
to Irvine, California-based First Alliance Mortgage Corporation's
systematic fraudulent lending practices during the period of December 30 1998
to March 23, 2000. The jury found that First Alliance systematically committed
fraud on the class of First Alliance borrowers during the class period using
a standardized sales presentation, and that Lehman Brothers
aided and abetted the fraudulent scheme. First Alliance was accused of misrepresenting
the true cost of the loans and of charging borrowers as much as 24% in loan origination
and other fees. The verdict marked the first time a financial backer of an abusive
lender has been held liable, carving out a new area of vulnerability for Wall
Street. |
| Lieff
Cabraser, along with co-counsel, served as court- appointed
class counsel and also served as co-counsel in the trial
for the plaintiffs. At the present, the court has not established
any procedure for class members to submit claims. Lehman
Brothers has publicly stated that it intends to file an
appeal of the verdict. |
| First
Alliance previously settled a lawsuit brought by the Federal
Trade Commission and others. Lehman Brothers was not a party
to the FTC lawsuit. First Alliance borrowers may obtain
information about the FTC case by clicking
here. |
| |
- EPA
Warns Millions of Property Owners Concerning Cancer-Causing
Asbestos in Attic Insulation
|
| On May 21, 2003, the Environmental Protection Agency
issued a warning to millions of home and business owners nationwide
whose attics and walls may have vermiculite insulation
manufactured by W.R. Grace & Co., and sold under the brand name Zonolite
Attic Insulation, that could cause dangerous and/or lethal
exposure to asbestos. |
| The warning comes after two years of the agency's being
pressured by Congress, public interest groups and through lawsuits in which Lieff
Cabraser served as co-counsel seeking to require W.R. Grace to inform the public
of the dangers of vermiculite insulation. |
| For more details on this litigation, product identification
information and links to the EPA's warning, please click
here. |
| |
- Government
Settlement With Securities Industry Offers Little For
Individual Investors; Individual Claims May Still Be
Pursued
|
| In the late 1990's, the American stock exchanges reached
levels never seen before in the history of Wall Street.
Simultaneously, a surge in initial public offerings ("IPOs")
for new companies resulted in unprecedented financial gains
for Wall Street investment firms that served as underwriters
of IPOs. |
| Many
Wall Street firms served as both investment banks for the
companies that participated in the IPO boom as well as brokers
for individual investors who purchased stock in these companies.
This dual role created a conflict of interest. |
| Research analysts for the major Wall Street firms allegedly
recommended the stocks of IPO companies, even though they did not believe these
companies to be sound, long term investments, so that their firms would be able
to retain the IPO companies as clients for investment banking purposes. As a
result of this conflict of interest, tens of thousands of individual
investors incurred huge financial losses. |
| On
April 28, 2003, after a lengthy investigation by state and
federal authorities, the Securities and Exchange Commission
and other regulators announced a $1.4 billion settlement
of government charges that the leading Wall Street brokerage
firms manipulated stock recommendations to win investment
banking deals. These Wall Street firms included Salomon
Smith Barney, CSFB (Credit Suisse First Boston), Morgan
Stanley, Goldman Sachs, Bear Stearns, J.P. Morgan, Lehman
Brothers, UBS Warburg and U.S. Bancorp Piper Jaffray. |
| Less
than 30% of the $1.4 billion settlement fund, however, will
be used to repay investors. As noted by The Wall Street
Journal on April 29, 2003, "The huge settlement
announced on Wall Street does much to upend the way investment-banking
firms operate. But few investors will see much of the cash." |
| Investors
who suffered losses after purchasing stocks in IPO companies
and other heavily touted stocks during the stock market
boom may still pursue their own claims. To learn more please
click
here. |