Case & Results
Big Win In Bock Evans Investment Advisor Fraud Case–Motion to Compel Denied
By Bonnie Eslinger
Law360, New York (July 7, 2015, 8:23 PM ET) — A California federal judge refused to nix a securities class action against a financial firm accused of making high-risk investments that allegedly lost more than $55 million, saying Monday that the plaintiffs’ couldn’t be forced into an arduous and unfair arbitration.
In May, the investors sued Bock Evans Financial Counsel claiming the firm placed all or nearly all of their assets in high risk and highly speculative foreign mining stocks, “resulting in the decimation of its clients’ portfolios.” The company saw $60 million in assets under its management drop to $4.7 million from 2010 to 2015, the plaintiffs said.
U.S. District Judge Thelton E. Henderson on Monday denied Bock Evans’ motion to dismiss, rejecting the firm’s arguments that the statute of limitations had run out, the plaintiffs failed to state a claim, and the venue was improper because client contracts included an arbitration provision.
The judge also rebuffed the firm’s attempt to enforce arbitration agreements included within the contracts their clients had signed, saying the provision was buried within the document, used language that was “confusing and conflicting,” and did not clearly state waiver of a jury trial, which “might lead a reasonable person to believe that arbitration was optional,” he wrote.
Judge Henderson also found the arbitration provision itself substantively unconscionable, because it required the California plaintiffs to travel to Denver for arbitration, forced them produce voluminous financial documents, and allowed Bock Evans to provide the list of arbitrators from which the plaintiffs could choose.
“It is cold comfort that plaintiffs may ‘choose’ from the three arbitrators handpicked by the defendant,” he wrote.
Chuck Marshall, one of the plaintiffs’ attorneys, called the judge’s order the “right result.”
“Vague and one-sided arbitration provisions should not result in the waiver of basic and fundamental rights, such as the right to trial by jury,” Marshall said.
The company’s statute of limitations defense — that the investments began outside of the three years mandated for breach of fiduciary and fraud claims or two for negligence — was also spurned by the judge.
“Various breaches could have occurred at any period,” within the investment time frame, he said.
And while Bock Evans argued that the plaintiffs failed to plead enough facts to state a plausible claim to relief, Judge Henderson was unconvinced.
Those claims include accusations that the firm selected securities that had a “continuous downward trend, year after year,” resulting in the loss of tens of millions of dollars, “in the midst of a powerful bull market,” according to the complaint.
Plaintiffs Charlotte B. Milliner and Joanne Brem are seeking class certification for all people who were or currently are clients of Bock Evans. Their complaint accuses the company of violating the Securities Exchange Act of 1934 through breach of fiduciary duty, gross negligence, fraud by misrepresentation and omission, and constructive fraud. Their request for relief includes compensatory damages, lost opportunity costs and punitive damages.
A representative for Bock Evans declined to comment on Tuesday.
Charlotte B. Milliner and Joanne Brem are represented by David Sturgeon-Garcia of the Law Offices of David Sturgeon-Garcia and Chuck Marshall of the Marshall Law Firm.
The defendants are represented by Erwin J. Shustak.
The case is Milliner et al. v. Bock Evans Financial Counsel Ltd., case number 3:15-cv-01763, in the U.S. District Court for the Northern District of California.
–Editing by Jeremy Barker. From Law360.
A1 Solar Power, Inc. / Nation Renewable Energy Center Do-Not-Call List TCPA Violations
The Marshall Law Firm filed a class action lawsuit against A1 Solar Power, Inc. and the National Renewable Energy Center (“NREC”) alleging violations of the Telephone Consumer Protection Act (“TCPA”). Specifically, the lawsuit alleges that A1 Solar Power, Inc. and the NREC violate the TCPA’s prohibition on unsolicited calls to people who registered either their land line telephone or cell phone number on the FTC’s National Do Not Call registry. If you, or anyone you know, are listed on the Do Not Call registry and have received unsolicited telephone calls from either A1 Solar Power, Inc. or the National Renewable Energy Center, contact Chuck Marshall of the Marshall Law Firm at 925-575-7105 or submit your complaint online.
Proposed Settlement in Davis v. VISA Inc.
A proposed settlement has been reached in the Davis v. VISA Inc. class action lawsuit. The lawsuit concerns whether VISA’s Auto Rental Collision Damage Waiver – Personal benefit (the “Benefit”) applies to Zipcar vehicles. The plaintiff in Davis v. VISA Inc. asserts that VISA improperly rejected claims made under the Benefit by credit card holders who were involved in accidents while driving Zipcars. VISA, on the other hand, contends that Zipcars were never covered under the Benefit and maintains it handled all claims properly. The parties have agree to settle the lawsuit to avoid the burden and costs associated with litigation. You can read more about the lawsuit and proposed settlement relief here: Davis v. VISA Inc. Settlement.
Visa Excludes ZipCar Rentals From Rental Car Damage Coverage
On November 4, 2013, the Marshall Law Firm filed a class action lawsuit against Visa, Inc. alleging that Visa’s policy to exclude Zipcar rentals from its Auto Rental Collision Damage Waiver benefit (“Auto Rental CDW”) is a breach of Visa’s contract with cardholders, a breach of its duty of good faith and fair dealing, as well as an unfair and deceptive business practice.
Auto Rental CDW is offered by Visa to all Visa standard, premium and premium reward cardholders, and is a promise to reimburse cardholders for money owed for damage or theft related to a car rental if the consumer pays with an eligible Visa card and declines the rental company’s collision damage waiver. The complaint alleges that Visa has a secret policy to decline the benefit to those who rent through Zipcar. While Visa does disclaim certain types of rentals or transactions in its Auto Rental CDW agreement to consumer, Visa fails to make any disclaimer or exclusion for rentals made through Zipcar.
Visa asserts that Zipcar rentals may be excluded from the CDW benefit based on Vias’s internal policy concluding Zipcar is a “car share” company instead of a renatl company. Clever marketing by Zipcar aside, Zipcar rents cars just likle any other company. Zipcar customers do not share any owenrship rights in the vehicles, but merely pay a fee to use them for a period of time. For the purposes of the Visa Auto Rental CDW benefit, there is no meaningful distinction between a rental through Zipcar and rentals made through other companies which are covered by the benefit.
Chuck Marshall of the Marshall Law Firm said the language of Visa’s Auto Rental Collision Damage Waiver benefit is very broad, but that Visa is attempting to narrow it through an internal policy to exclude Zipcar rentals without informing its customers and without changing the language of its agreement. “Visa makes a lot of money by enticing cardholders to use to its cards and thus the Visa payment network — the damage collision waiver benefit is one of the ways VISA gets people to do that,” Marshall told Law360 on Monday. “Our client and the proposed class members held up their end of the bargain; now we want Visa to hold up theirs and provide the benefit promised without limiting it through a secret, internal policy. Visa’s policy decision to exclude Zipcar rentals from CDW coverage is simply out of step with its promise.”
Chase Blank Check / Balance Transfer Loan Litigation
Chuck Marshall participated as a member of the executive committee in a nationwide class action against Chase Bank USA, N.A. (“Chase”), the nation’s largest credit card issuer. The suit alleged that Chase promised borrowers low interest rates that were to remain fixed for the “life of loan.” But, in late 2008 and early 2009, the bank unilaterally raised the minimum payment for over 1 million of these borrowers to 5 percent of the balance. The only way credit card customers could avoid the higher payments was to agree to a higher interest rate.
In November 2012, U.S. District Judge Maxine M. Chesney of San Francisco approved a $100 million nationwide class settlement of the lawsuit. This lawsuit addressed the scope of discretion credit card companies have in altering the terms of their customers’ agreements, and attacked whether credit card companies may use their discretion to undermine previous promises made to consumers.
HP Pavilion Power Plug and Graphics Card Litigation
Chuck Marshall was appointed co-lead counsel in In re HP Power Plug and Graphics Card Litigation in by U.S. District Court Judge Ronald M. Whyte, Northern District of California. The case was a nationwide class action which sought to address defective power plugs and misrepresentations relating to the graphic cards in certain HP Pavilion notebooks.
In May 2008, the Court approved a settlement of the matter which provided notebook owners with repairs, cash reimbursement for out of pocket repair expenses, and/or discount coupons for new notebooks.
Audi TT Instrument Cluster Litigation
Chuck Marshall was appointed as lead counsel in Maher v. Volkswagen of America, Inc. by U.S. District Court Judge Jeffrey S. White, Northern District of California. This was a nationwide class action seeking relief for owners and lessees of Audi TTs, model years 2000 – 2004, and certain 2005 models for defective instrument clusters. The lawsuit alleged, among other things, that certain dashboard instruments, such as the speedometer and gas gauge gave inaccurate readings, and eventually stopped working altogether. Chuck Marshall was able to reach a settlement in this matter which provided Audi TT owners repairs, replacement and/or cash reimbursement for out of pocket expenses. Further, all TT owners covered by the suit will received a 2 year extension of their existing 4 year warranty (limited to the instrument cluster).
2003 Hyundai GT Clutch / Flywheel Litigation
Chuck Marshall represented consumers in a federal class action in 2006 involving the 2003 Hyundai Tiburon. The complaint alleged that though Hyundai knew the vehicles’ flywheel and clutch parts failed prematurely, it sold the vehicles without telling customers and later refused to cover repairs under warranty. On June 28, 2010, Judge Alicemarie H. Stotler approved a nationwide settlement that provided cash reimbursements to eligible Class Members.
Webloyalty.com: Unauthorized Credit Card Charges
Chuck Marshall prosecuted actions regarding the business practices of Webloyalty.com in relation to its Reservation Rewards program. Many consumers were charged by Webloyalty.com for membership in a program known as Reservation Rewards that they did not join.
The lawsuit alleged that against Web loyalty.com and its affiliates enrolled consumers in its subscription based program while consumers completed online retail transactions, but that Webloyalty.com did not obtain sufficient authorization or consent, and thereafter wrongly charged fees for membership benefits. The Programs are known as Reservation Rewards, Shoppers Discounts & Rewards, Members Specials, Buyer Assurance, Classmates Rewards, Distinctive Privileges, PC Protection Plus, Travel Values, Travel Values Plus, and/or Wallet Shield.
A settlement was achieved that provides substantial benefits to the class, including cash payments of up to $10 million dollars for eligible consumers. The payment would be equal to one month’s membership or many months depending on what the class member was charged and whether one accessed the Program website. The settlement also provides remedial relief in the form of comprehensive changes to the enrollment page used for these programs and other changes to the programs themselves.