LITIGATION UPDATES – JANUARY 2015

Expanding Whistleblower Protection Under The Sarbanes-Oxley Act

With the Sarbanes-Oxley Act of 2002, Congress sought to protect employee whistleblowers.  The scope of this protection, however, was unclear.  Did it apply only to employees of publicly-traded companies, or also to employees of the contractors and subcontractors with whom those companies work?  The Supreme Court resolved this question with its decision in Lawson v. FMR, LLC et al.  To the delight of workplace advocates, the Court interpreted Sarbanes-Oxley broadly, holding that it shelters employees of private contractors and subcontractors, just as it shelters public company employees. Representatives of the business community have expressed concern that this expansive reading will lead to a rash of unintended and frivolous lawsuits.  Nevertheless, the Lawson decision is a clear signal to private sector contractors that they are bound by the same anti-retaliation rules as public companies.

Safeway to Pay Grocery Loads for Waste Dumping

Safeway Inc. will pay nearly $9.9 million to settle a lawsuit alleging the grocery chain improperly disposed of environmental waste and consumer medical forms.  The company has adopted new policies and procedures to deal with the disposal of products the state calls retail hazardous waste, including over-the-counter medication, aerosol products, batteries, electronic devices and other ignitable and corrosive materials.  The civil penalty and policy changes end a lawsuit that stemmed from an investigation first launched in 2012 in which inspectors spotted the hazardous waste products in dumpsters that were carried to local landfills.

Gerber Fends Off Tantrum Over Baby Food Labeling

A California federal judge granted Gerber’s summary judgment motion and threw out a proposed class action accusing Gerber Products Co. of misbranding baby food, citing a lack of evidence that sugar and nutrition claims on the products’ labels actually deceived consumers.  “The court concludes there is insufficient evidence that the nutrient content and sugar-related claims on the challenged Gerber products were likely to mislead reasonable consumers and that the label statements were therefore unlawful on that basis,” the judge wrote in the order.

NFL Blocks Players' Painkiller Class Action

A California federal judge threw out ex-NFL players' class action claiming that the league encouraged them to abuse painkillers, ruling that a collective bargaining agreement preempted the claims.  The lawsuit alleged the NFL and its teams, physicians and trainers acted without regard for players’ health, withholding information about injuries. At the same time they were handing out prescription painkillers and anti-inflammatories to mask pain and minimize lost playing time. Among other claims, the players contended prescriptions were filled out in their names without their knowledge.  The judge granted the NFL’s motion to dismiss the suit under Section 301 of the Labor Management Relations Act, saying that it wouldn’t be possible to apply new state common law duties on the league without taking into account the parties’ collective bargaining agreement.  Nine players were named as plaintiffs, including Hall of Fame defensive end Richard Dent.  The judge gave them until Dec. 30 to file an amended complaint.

Faulty Car Seat Suit Moves Forward

A California federal judge refused to throw out a proposed class action over car-seat maker Graco Children's Products Inc.’s allegedly defective belt buckles, ruling that a refund offer and recall effort don’t prevent plaintiffs from pursuing their claims.  A suit was brought against Graco in March 2013.  Graco issued a recall in February this year, pulling back at the time 3.7 million forward-facing toddler seats over the buckles, which could become so gunked up with food, juice, formula or vomit that they won't open, according to Long's complaint.  The seat maker added 1.9 million car seats to the recall in July.  The judge denied a motion to dismiss filed by Graco, finding that claims under the California Consumers Legal Remedies Act and Unfair Competition Law, and for breach of implied warranty under the Song-Beverly Consumer Warranty Act and the federal Magnuson-Moss Warranty Act, could move forward.  The judge rejected Graco’s argument that subject matter jurisdiction cannot exist in this case because plaintiff was offered full monetary compensation for his claims on two occasions.  Graco argued that the refund offers prevent Long from alleging a redressable injury that is essential for Article III standing.  However, the judge ruled that Graco failed to establish the factual predicate to its jurisdiction attack by demonstrating that it actually offered a full refund to Long at any time for the defective car seats.

 

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