Consumer Fraud

Distinguished clients from a wide variety of industry and service sectors turn to Sonnenschein for defense in consumer fraud class actions. We advance our clients’ causes by defeating motions for class certification, successfully arguing for removals and dismissals, enforcing class releases and negotiating innovative settlements. When companies need to resolve situations with regulators and other stakeholders, we can help to reduce the adverse impact on operations, reputation and shareholder value. 

We further strive to help you implement “best practices” to prevent, deter and detect consumer fraud. We have successfully defended many of the country’s largest and fastest-growing companies in our rapidly expanding consumer fraud class action practice. Following is a small sampling of that experience.

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Burberry Limited

Sonnenschein successfully represented Burberry Limited in a class action lawsuit in the Central District of California. The suit alleged that Burberry failed to comply with a provision of the Fair and Accurate Credit Transactions Act (FACTA) by printing credit card expiration dates on customer receipts, and sought statutory damages of $100–1000 per violation. More than 200 such lawsuits have been filed against retailers nationwide. Because of the statutory damages provision at issue, these class actions posed a threat of annihilating damages against defendants. In July 2007, the district court denied class certification, agreeing that class treatment was not a superior method of addressing the alleged wrong because of the lack of injury to the plaintiff and the immensity of the potential damages against Burberry. A settlement with the plaintiff was reached soon thereafter. The individual’s case has been settled and the matter has been dismissed.

Wal-Mart Stores, Inc.

Sonnenschein successfully defended Wal-Mart Stores, Inc., and Wal-Mart.com USA, LLC, against putative class action litigations recently filed in California and Florida, charging that these companies misrepresented the “thread count” in bed linens sold. The California suit charged “false advertising” in violation of the California Business and Professions Code Section 17500, violations of Business and Professions Code Section 17200 et seq., and violations of the California Consumer Legal Remedies Act, all purportedly on behalf of a nationwide class. The Florida suit attempted national certification of a consumer class, first under the various consumer trade practices statutes of the 50 states, and then on a theory that Arkansas law applied everywhere. The California claims were dismissed upon Wal-Mart’s dispositive motion; dismissal of the Florida action followed swiftly thereafter.

McDonald’s Corporation

Sonnenschein has represented this longstanding client in wideranging disputes, including:

A nationwide class litigation regarding McDonald’s marketing of its french fries and hash browns. Sonnenschein served as co-counsel in this matter, in which vegetarians, Hindus and kosher consumers alleged that McDonald’s failed to disclose that its french fries contained a small amount of beef flavoring. Following the hearing of claims from scores of objectors and commentators, this highpublicity case received final settlement approval from the trial court. The innovative settlement included a $10 million cy-pres fund for distribution to charitable organizations, the establishment of a vegetarian nutrition advisory board and enhanced disclosures. Although the settlement was challenged on appeal by a number of objectors, Sonnenschein successfully defended the innovative settlement.

A nationwide class action regarding the marketing of McDonald’s “Happy Meals” in which Sonnenschein scored a swift and total victory. The underlying complaint was filed on behalf of a nationwide class that included all parents of children under four years of age who purchased McDonald’s “Happy Meals” and raised consumer fraud claims based on McDonald’s alleged failure to comply with regulations promulgated by the Food and Drug Administration under the federal Nutrition Labeling and Education Act. The complaint sought nationwide class certification and compensatory and punitive damages. The trial court dismissed the case on three separate and independent grounds, the appellate court affirmed, finding the claims to be preempted, and the Illinois Supreme Court refused to take the case.

Experian

Sonnenschein represents Experian in a federal court case in Pennsylvania. The putative class consisted of opt-outs from the settlement of prior class actions in federal court in South Carolina, alleging violations of the Fair Credit Reporting Act. In December 2006, the court denied class certification, holding that individualized proof as to causation and injury undercut the class action. The court also held that class adjudication of the claims was not a superior method of resolving them, given the decision of the putative class members to opt out of the previous class actions and the incentives to bring individual actions under the Act. The Third Circuit granted the plaintiff’s petition for interlocutory review and the appeal is pending.

Vonage

Sonnenschein represents Vonage America Inc. and Vonage Holdings Corp. in a putative nationwide class action challenge regarding alleged misrepresentations as to the reliability of Vonage Fax Services. Pending in the District of New Jersey, the suit was brought under the New Jersey Consumer Fraud Act and raises common law and unjust enrichment claims, as well as claims for monies had and received.

Logitech, Inc.

Sonnenschein represented Logitech, Inc., a California company that produces interface devices for personal computers, in a class action alleging that the company misrepresented and concealed a defect in a cordless mouse product. Plaintiffs brought this putative nationwide class action under California’s consumer protection statute. Sonnenschein’s litigation team was able to quickly settle this matter on a class basis for a nominal amount.

The Home Shopping Network

Sonnenschein represented the Home Shopping Network (HSN) in multiple class action litigations pending in California, Florida and Illinois involving HSN’s sale of Proteva brand personal computers, spanning a period of several years. Proteva, the manufacturer of the computers, declared bankruptcy, leaving HSN as the major litigation target. The complaints alleged consumer fraud, breach of warranty and other claims on behalf of tens of thousands of Proteva purchasers, and sought millions of dollars in compensatory and punitive damages. Through our successful opposition to plaintiffs’ motion for nationwide class certification and a creative settlement reached following a multi-day mediation, we structured a nationwide settlement that received no objection and was swiftly approved.

Tribune Company

In a major class action victory, a Cook County (Ill.) Circuit Court judge ruled that Wrigley Field Premium Ticket Services— a ticket broker set up by the Chicago Cubs baseball team and its parent, Tribune Company—is not in violation of the Illinois Ticket Scalping Act, which prohibits teams from selling tickets at prices above face value. Although the broker sells tickets set aside by the ball club at prices above face value, Circuit Judge Sophia Hall agreed with Sonnenschein’s argument that there was no violation of the scalping law because the club and brokerage are separate subsidiaries of Tribune Company.

Monsanto Company

As co-defense counsel to Monsanto, Sonnenschein first successfully transferred a putative national class out of the Southern District of Illinois to the Eastern District of Missouri (St. Louis) by invoking a forum selection clause, then defeated certification of a nationwide class alleging antitrust violations and deceptive statements about the safety of Monsanto products. Judge Sippel’s lengthy decision denying class certification followed a year of discovery on class certification issues and a two-day evidentiary hearing.

BASF Corporation and Knoll Pharmaceutical Company

Sonnenschein was co-lead counsel in the coordinated defense of nearly 50 class actions, filed in state and federal courts, relating to the pricing, marketing and sale of a leading pharmaceutical product. The litigation involved competing claims for billions of dollars in damages brought by the leading plaintiffs’ class action bar. Following a number of procedural and other victories, the litigation ultimately was resolved through an innovative and effective settlement structure.