Folks, we’ve got class action news for you. This edition of the Roundup includes an investor class action against AT&T, possible gender-based pay disparities at Disney, a big ol’ Fiat Chrysler settlement, a decision that allows a dozen Central American families to be reunited with their children, and a few other need-to-know items.
Spring is here. It’s nice that it stays light outside longer, isn’t it?
AT&T Lied to Investors About DirecTV Now Streaming Service Health, Class Action Says
AT&T and its top brass were hit with a proposed class action lawsuit on April 1 after allegedly lying to investors to conceal the failure of its DirecTV Now streaming service.
The lawsuit, which looks to represent those who bought or otherwise acquired AT&T securities between October 22, 2016 and October 24, 2018, centers on a registration statement submitted by AT&T to the Securities and Exchange Commission (SEC) in connection with the telecommunication giant’s June 2018 merger with Time Warner. According to the suit, the registration statement touted “false and misleading results, trends, and metrics” while omitting material facts related in particular to growth trends in AT&T’s Entertainment Group.
At the heart of the case is DirecTV Now, AT&T’s television streaming service that allowed subscribers to stream cable channel programming with no long-term commitment. In the registration statement, AT&T, the lawsuit says, touted quarterly subscriber gains for DirecTV Now that were apparently sufficient to offset any dip in traditional satellite television subscribers. AT&T also warned, however, of a number of risks that could potentially adversely affect the company—without disclosing that such risks had already materialized at the time it merged with Time Warner.
The one-two punch of AT&T increasing DirecTV Now prices while at the same time discontinuing promotional discounts for the service caused subscribers to leave as soon as their initial promotional discount periods were up, the lawsuit says. Moreover, this was coupled with the unwillingness of others to pay higher prices and therefore not subscribe at all, per the complaint.
AT&T and its officers were required to disclose that, at the time of the Time Warner merger, the company’s supposed “net additions” growth trend had actually already reversed into a “net loss” trend. When AT&T eventually announced its 3Q2018 results—stating, among other items, that its DirecTV satellite subscriber losses jumped to 359,000 quarterly— on October 24, 2018, share prices took the brunt of the fallout, according to the lawsuit:
“On these revelations, AT&T’s stock price fell $3.93 per share, or nearly 12%, from a close of $33.02 per share on October 23, 2018 to a close of $29.09 per share on October 26, 2018, on unusually high trading volume.”
The full lawsuit can be read here. Writer Jon Brodkin has more coverage over at Ars Technica.
Picture Perfect? Class Action Charges Getty Made Money from Public Domain Images
A Dallas-based digital marketing company is behind a proposed RICO class action lawsuit over allegations that Getty Images has fraudulently claimed ownership of copyrights in the public domain and has sold fictitious copyright licenses for public domain images—which cannot be sold by anyone—for profit.
The 32-page case states that while it’s not illegal to charge money for a copy of a public domain image, Getty and co-defendants Getty Images (US), Inc. and License Compliance Services have misled customers into believing that Getty or one of its third-party contributors actually owns the copyright to every image on Getty.com. Customers then come to believe a license is needed from Getty and/or Getty US in order to use every image on its website.
The lawsuit outright alleges that the aim of Getty’s conduct is “to restrict the use of the public domain images to a limited time, place, and/or purpose” while purportedly guaranteeing exclusivity in the use of public domain images. Of course, public domain images, the suit notes, are free to be used by anyone, without restriction and free of charge.
But the lawsuit goes a step further in alleging Getty is at the top of an enterprise that includes third-party companies, licensing arms, and “enforcement” clients that altogether create “a fraudulent and hostile environment for lawful users of public domain images.” All told, Getty’s conduct, the suit says, is knowing and intentional at minimum and malicious at worst, and violates the Racketeer Influenced and Corrupt Organizations Act and state consumer protection law.
This is not the first time Getty has been challenged in court over image copyrights. As DIYPhotography.com points out, a photographer sued Getty in 2016 after the company tried to charge her for her own photo. That same year, Getty faced a lawsuit from Zuma Press, which alleged the company licensed more than 47,000 images without authorization.
Read the complaint filed in Washington federal court here.
Google and Huawei Agree to Settle Nexus 6P Class Action
Google and Huawei have reached a preliminary settlement agreement in a class action filed over dysfunctional Nexus 6P devices. The lawsuit took issue with a boot-looping issue that apparently caused the phones to randomly shut down, no matter what the battery had to say on the matter. According to the lawsuit, the companies were aware of the issue, failed to respond to the bug, and continued to sell the devices anyway.
The next hearing is set to take place on May 9th, so we should have more information around then. If the settlement proposal gets approved by the court, the companies will shell out $9.75 million – which means that class members may be able to claim as much as $400 each.
The Verge has the rest of the story.
Motel 6 to Pay $12 Million for Sharing Guest Lists with U.S. Immigration Agents
Motel 6 has agreed to pay $12 million to settle claims that it regularly sent its guest lists to U.S. Immigration and Customs Enforcement (ICE) agents. According to the lawsuit, close to 80,000 people who stayed at one of the seven affected Motel 6 locations in Washington state between 2015 and 2017 had their information sent to ICE – resulting in at least nine people being detained.
As a part of the settlement, the hotel chain agreed to no longer share its guest information without a proper warrant or legal order. Motel 6 recently agreed to settle a similar case filed in Arizona – but that settlement has yet to be approved.
Head over to Reuters for more information.
Fiat Chrysler Reaches $110 Million Settlement with Investors
Reuters reported last week that Fiat Chrysler Automobiles agreed to settle a lawsuit filed by U.S. investors who, according to the suit, were misled by the automaker and lost money as a result.
The case, filed in 2015, argued that Fiat Chrysler was far from honest with investors about its compliance with safety regulations, how it handled recalls, and the fact that it may have installed secret “defeat devices” in its diesel-powered vehicles that allowed the cars to cheat emissions tests.
In the fourth amended complaint, the plaintiffs alleged that investors eventually came to find out “in a series of corrective disclosures” that Fiat Chrysler had dragged its feet in alerting customers and regulators to “serious safety defects and recalls” while reassuring shareholders that the company was in compliance with vehicle safety regulations. According to the Reuters article, the truth was revealed when the National Highway Traffic Safety Administration slapped the company with a $105 million penalty in 2015.
As for the defeat device allegations, the lawsuit claims Fiat Chrysler repeatedly told investors that the company was compliant with emissions standards despite knowing full well that some of its vehicles contained at least eight software devices that allowed the cars to emit unlawfully high levels of toxins.
The suit claims investors were blind-sided when all of this came to light and lost a lot of money in the resulting stock drop.
The settlement, once approved, will cover investors who purchased Fiat Chrysler stock on a U.S. exchange between October 13, 2014 and May 23, 2017. According to Reuters, the plaintiffs’ attorneys have estimated that the settlement is equal to 13.8 percent of the maximum damages, which they’ve praised as “an objectively excellent result when compared to historical statistics in class action settlements.”
As for Fiat Chrysler, the automaker reportedly “continues to vigorously deny the allegations of wrongdoing made in the lawsuit” and has noted that the settlement is fully covered by insurance.
Head over to Reuters for more.
Class Action Challenges 700 Percent Increase in Bankruptcy Fees for All but Two States
A Louisiana hospital chain is behind a proposed class action filed earlier this month over the more than 700 percent increase in bankruptcy fees that the U.S. government implemented in 2017 for Chapter 11 filings.
The problem with the increase, according to Bloomberg, is that a “quirk” in federal law has allowed debtors in Alabama and North Carolina to escape the new fees and continue to pay the older, lower amounts. This meant that it was effectively cheaper to go bankrupt in those two states than it was in any other part of the country, the case says. The hospital chain argues that this discrepancy is unconstitutional and that the government has been overcharging debtors in the other 48 states for quarterly bankruptcy fees.
What was the reason for the apparent discrepancy, you ask? The fees, Bloomberg explains, are used to help fund the U.S. Trustee Program, which is an arm of the U.S. Department of Justice that oversees bankruptcies. The Trustee apparently has jurisdiction over every state except Alabama and North Carolina, which never implemented the program and instead have bankruptcy administrators who are responsible for overseeing cases. The organization that supervises these administrators decided not to increase quarterly bankruptcy fees until last October, according to Bloomberg, and has only applied the increased fees to new cases since then.
The lawsuit estimates that the plaintiff business would have paid $216,784.69 less during its 2017 to 2018 bankruptcy proceedings if its case had been handled in Alabama or North Carolina – a reality that, according to the plaintiff’s attorney, “makes no sense.”
Bloomberg has the rest of the story.
U.S. Government to Settle Class Action by Processing Central American Children’s Immigration Bids
The Trump administration has agreed to settle a class action lawsuit filed over its “highly erratic and unexplained termination” of the Central American Minors (CAM) parole program designed to provide children fleeing danger in El Salvador, Guatemala and Honduras safe passage to reunite with their parents in the United States.
Created in 2014, the CAM parole program abruptly ended when Trump took office in January 2017; however, the decision to end the program was not publicly announced for another seven months, the complaint says. During this time, U.S. Citizenship and Immigration Services apparently continued accepting thousands of dollars from applicants for DNA tests, medical exams and plane tickets while secretly shutting down operations. When the program was publicly terminated, the case says, over 2,700 applicants had their conditional approvals for entry into the U.S. withdrawn, leaving children stuck in dangerous environments and separated from their parents.
The case argued that the program’s cancelation is yet “another one of this Administration’s cruel and xenophobic policies” that violate immigrants’ constitutional rights. The defendants agreed to finish processing the 2,714 individuals who were approved for parole or in the final stages of the application process before the program was terminated.
Visit NPR for more.
Disney Discriminates Against Female Employees, Class Action Charges
A proposed class action lawsuit out of California claims that working for Disney is no fairytale for women, who are allegedly discriminated against and “treated as cheap labor” by the entertainment giant. Filed against The Walt Disney Co., Walt Disney Pictures, and Hollywood Records, the case charges that female employees are underpaid, denied promotions, and assigned extra work without additional compensation.
According to the suit, the defendants fail to maintain “appropriate standards, guidelines, or transparency necessary to ensure an equitable workplace.” For example, the complaint says workers’ starting pay is determined based on prior salaries, which perpetuates the gender pay gap.
The complaint goes on to detail the two plaintiffs’ alleged experiences with inequality at Disney. One plaintiff, a product development manager, claims that the lowest-paid male in her position was paid over $16,000 more than she was paid. After complaining to HR, the suit continues, the woman was apparently advised that her lower pay had nothing to do with gender. Still, Disney went on to give her a raise purportedly based on an updated evaluation of market forces. Even with the raise, however, the plaintiff earns less than her male coworkers, the case points out.
Another plaintiff, who works as a senior copyright administrator, says she performs the same duties as a male manager for considerably less money, and was discouraged from applying for a managerial position herself.
Variety has more on the story.