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Man says he was told wrong Powerball cutoff time, files $700 million lawsuit

By: Chris Dickerson

A Charleston man has filed a lawsuit seeking $700 million over allegations he was told the incorrect cutoff time to play the Powerball lottery in 2017 at a Texas convenience store.

Eric Vondrake filed his complaint in U.S. District Court for the Southern District of West Virginia against 7-Eleven Inc., Multi-State Lottery Association, Mavis L. Wanczyk, the Massachusetts State Lottery Commission, Southwest Convenience Stores, Rahkee P. Sharma, Pawan R. Sharma and the Texas Lottery Commission alleging negligence, negligent misrepresentation and other counts.

According to the complaint, on Aug. 23, 2017, Vondrake visited a 7-Eleven convenience store in Carrollton, Texas, owned by the Sharmas. He asked a clerk what the cutoff time was to play the Powerball lottery game. He alleges he was told the incorrect time and was unable to play. Wanczyk, a Massachusetts resident, won the $700 million jackpot for that drawing.

Vondrake says he was told the cutoff time to play Powerball was 9:30 p.m. Central time, and he bought his ticket at 9:15 p.m. Central time. The cutoff time actually is 9 p.m. Central time.

“This case is not about picking winning numbers but the focus of this case is about the fact that the plaintiff as a citizen has the right to play the Powerball like any other citizen, but those rights were taken away from him by the defendants’ negligence, customs and policies,” Vondrake says in his complaint. “Moreover, the majority of the lawyers that the plaintiff conferred with were only interested in how many numbers that the plaintiff successfully picked.

“This two dimensional thinking was a problem for the plaintiff. When faced with the jury, the plaintiff plans to argue that if he failed to pick any of the correct numbers that it would not matter in this case, because the focus is not numbers but restriction of rights. Rosa Parks’ case wasn’t about a seat on a bus, but her right as a citizen of the United States.”

The next day, Vondrake, who says he lived in Texas at the time of the incident, says he went back to the 7-Eleven and spoke to store manager, who he believes was Rakhee Sharma, about the incident.

“I am sorry about that, the employee gave you the wrong time,” Rakhee Sharma told him, according to the complaint. Sharma also said the employee was new and didn’t know lottery rules before offering Vondrake a free cup of coffee “after her employee caused the plaintiff to lose millions.”

Vondrake says he wrote letters to Sharma, 7-Eleven and the Texas Lottery Commission about the incident, and he all claims the unknown 7-Eleven worker was an illegal alien.

“Immigration and Customs Enforcement (ICE) agents targeted dozens of 7-Eleven stores in 2017, arresting 21 people in a nationwide immigration sweep,” the complaint states. “The state of Texas was part of the ICE round-up and raids. There is little doubt in the plaintiff’s mind that the employee of the 7-Eleven store in question would have been also a target of this federal raid. And after my complaint to 7-Eleven the unknown employee vanished.”

Vondrake also notes that the Powerball game playslips do not include a cutoff time to play for consumers.

“Consumers are baited by the amount of money offered to play these lottery games, just as the plaintiff was baited,” the complaint states. “But the plaintiff was not provided that critical information of knowing the Powerball lottery cutoff time to play the game or when the Powerball closes.”

Vondrake requests a trial by jury and seeks special damages in the amount of $700 million, general damages, punitive damages, court costs, attorney fees, incidental damages, trebled damages, pre-judgment interest, injunctive and declaratory relief. He says if his alternative for compensation is not acceptable as pled, he will sue the defendants for $2.8 billion, which is four times the amount of the Powerball prize won by Wanczyk.

Vondrake is representing himself. However, four days after filing his complaint, he filed a motion to dismiss without prejudice because he was involved in a collision with a semi-truck.

“The emergency room doctor and two medical specialists have concluded that the plaintiff sustained a concussion and or traumatic brain injury,” Vondrake says in his motion, which was granted two days after being filed.

Vondrake did not respond to messages seeking further information about the case.

Changing suits: Mass tort-focused law firms adapt with times, even as TV commercials remain ubiquitous

By: Brett Johnson

Anyone who has sat within several feet of a television set between the hours of 9 a.m. and 3 p.m. is bound to have heard the line, soundtracked sometimes by foreboding music, prefaced always with an ominous “Attention.”

“If you or a loved one has been diagnosed with mesothelioma …”

It’s more than a stretch, but, in some minor way, you can blame Mark Eveland for that daytime pleasure.

The co-founder and CEO of Verus LLC was among the pioneers of what’s referred to as the original mass tort, asbestos personal injury claims. He’s associated with a group of legal experts that engineered some of the first-ever mass tort settlements in this area and disbursed more than $6 billion in settlement funds and expenses in the process.

The area of mass tort, which is a large number of lawsuits consolidated into one legal action rather than separate lawsuits due to the amount of plaintiffs and defendants involved, has been big in New Jersey. The state has one of the most active legal dockets for these cases, and it houses a significant portion of the firms specializing in it.

It’s an area of law that’s changing, but those involved in it don’t think it’s losing relevance.

Nevertheless, those changes are being experienced firsthand by Verus, a Princeton firm that can’t be blamed for the TV commercials, which also aren’t going away.

Things were changing even back when the firm launched in 2003. Asbestos companies were filing for bankruptcy protection left and right, shielding them from future lawsuits. So, Verus looked to manage the different caches that were being created in the wake of those bankruptcies. Those settlement trust funds, which the firm now manages close to half of, pay current and future asbestos claims.

The issue today is simple: Asbestos fell out of use in the late ’70s and early ’80s. So, although the reported delay between exposure and the development of cancer has kept mesothelioma cases steady over time, the number of asbestos-related injuries isn’t on its way up.

“We’ve had a stable amount of asbestos cases from malignancies that are arising now,” Eveland said. “But the number of cases is nowhere near what it was 10 years ago, because the amount of nonmalignant claims — such as someone with impaired breathing — has fallen off.”

Starting about three years ago, Verus has had to start considering how its team’s skillset could be applied to some work outside asbestos-related mass tort. Late last summer, it launched a new technology product specifically designed with other types of mass tort in mind.

It’s looking to medical devices and pharmaceuticals as the future of wide-sweeping lawsuits. So, the firm’s proprietary platform helps streamline the review of medical records and other data that once was available only as stacks of paperwork.

“Data can be gathered quickly electronically these days, but that doesn’t mean it’s accurate,” he said. “So, what we do is also make sure the data — something like proof of usage of a medical product — is right, so that the litigating parties can trust it and make decisions based on it.”

So far, none of the current examples of mass tort involving medical devices or pharmaceuticals, such as litigation involving the alleged health effects of talcum powder or hip and knee implants, have matched the scope of asbestos-involved injury claims.

But Eveland has his eye on one phenomenon that could grow to that scale: the use of opioids.

“That’s the one that could eventually get to the size and scale of what we saw with asbestos,” he said. “The addiction rates among people taking them have been so significant, and the amount of individuals taking them and suffering significant damage or death as a result of overdoses is enormous.”

Another emerging area of mass tort might be human trafficking, Eveland said, citing the signing of the Allow States and Victims to Fight Online Sex Trafficking Act earlier this year.

“That law made the tools the government and lawyers have to pursue litigation of this much stronger,” he said. “If I were to read from the tea leaves, I’d say that companies with online platforms that host or somehow enable people advertising prostitution could have a significant number of lawsuits brought against them.”

Just as Eveland speculates about how mass tort might be expanded, he’s aware that there are some political winds moving in the other direction.

There are two sides to every story, as he says himself. And there’s a lot of lobbying being done to clamp down on mass tort on the legislative level.

“So, there could be some mass tort reform initiatives signed into law that make it more difficult to pursue these cases,” he said. “For mass tort lawyers, that just means finding new ways in helping the injured achieve justice. This area of law will never disappear, but it might look different.”

Do the ads work?

So, are those seemingly low-budget television commercials urging anyone with mesothelioma to call without delay actually effective today?

The answer is: surprisingly, yes.

Law firms running these advertisements — betrayed as they might be by production values that won’t win any awards — are identifying affected people and targeting them through modern data science in increasingly sophisticated ways, according to Mark Eveland of Verus LLC.

“The granular level of detail and the rapidity at which these advertisers can make decisions on where and when to run ads has really amped up,” he said. “So, if you see an ad on CNN at a certain time, chances are they’ve got data that makes them certain they’ll get a higher response rate than if they ran it on a TV Land rerun of ‘Gunsmoke.’”

But law firms aren’t limiting themselves to television when looking for potential clients.

“These days, it has become common for law firms to find people who have been injured by leveraging social media platforms and online advertisements — instead of just billboards, newspapers and television advertisements,” Eveland said.

Growing list of tort reform proponents should speak volumes, Louisiana Mid-Continent Oil and Gas Association says

By: Carrie Bradon

With Louisiana’s legal climate having been dubbed a “judicial hellhole” by the American Tort Reform Association, groups and individuals alike are calling for reform of the judicial system that has cost the state $1.1 billion a year.

Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, is one of those speaking out about the state of Louisiana.

“The broad coalition of interested parties involved in this discussion should speak volumes.  As is evident, this isn’t an isolated issue,” John told the Louisiana Record. “This spans everything from the coastal lawsuits, insurance rates, jury-trial thresholds, among others.”

According to a piece written by Stephanie Riegel in BusinessReport.com, the business community is already working hard to bring about much-needed reform, specifically in the area of tort litigations.

Families and businesses in Louisiana are being forced to seek out work in other states, as the current climate at home is such that the costs of having a company in Louisiana is simply not practical when compared to neighboring states, such as Texas.

Indeed, John said the number of groups that are working together to bring the reform that is so needed in Louisiana should be a red flag in and of itself, as it indicates how much the state could lose without the right action.

“Seeing this many disparate interests aligned on a topic should raise the alarm on what is at stake, namely Louisiana’s long-term viability as a place to do business,” John said.

Groups including the Louisiana Lawsuit Abuse Watch and the Louisiana Coalition for Common Sense and energy industry companies are taking up the fight for more reform.

Currently, Louisiana is ranked the eighth worst state in the nation when it comes to tort-related lawsuits and the toll on the workforce is costing 15,500 jobs a year.

McDonald’s customers’ $5M lawsuit over unwanted Quarter Pounder cheese dismissed by judge

By: Alexandra Deabler

A $5 million lawsuit brought about by two McDonald’s customers in Florida was thrown out last week by U.S. District Judge William Dimitrouleas, granting a motion filed by McDonald’s.

Judge Dimitrouleas dismissed the lawsuit last Friday “with prejudice,” Miami Herald reported, meaning the plaintiffs are not allowed to file the lawsuit again at a later date.

In May, the South Florida couple, Cynthia Kissner and Leonard Werner, filed the suit complaining they had been charged the full price of a Quarter Pounder with Cheese, even though they requested the burger not have cheese.

Kissner and Werner argued that hamburgers and cheeseburgers are different prices on the McDonald’s menu, but when they order a Quarter Pounder without the extra dairy, they’re still forced to pay the same amount.

According to the lawsuit, McDonald’s used to sell four different Quarter Pounder options, two of which came without cheese and cost between 30 to 90 cents less, the Miami Herald reported. However, “at some point,” the fast food chain stopped selling the different variations and currently only lists the one Quarter Pounder with Cheese on the menu.

“McDonald’s is being unjustly enriched by these practices because it receives payment for cheese it does not deliver to its customers,” the lawsuit states.

Though, despite the couple’s claims of having “suffered injury as a result of their purchases because they were overcharged,” the judge did not feel the plaintiffs proved being harmed by having to pay more.

The judge also said that the Quarter Pounder and Quarter Pounder with Cheese are separate products and each can be purchased at McDonald’s, and called Kissner and Werner’s attempt to say the hamburger is only available with cheese is “absurd and fails.”

According to the Miami Herald, the judge’s dismissal went on to say, “Under any common sense analysis, there is no market for a customer to come into a McDonald’s restaurant and order a slice or two of ‘cheese’ as a product that is separate, distinct, and independent from any other product or menu item. Nor is there a separate product market for a customer to order a slice of tomato, or a slice of lettuce, or a slice of pickle, etc.”

The county clerk has closed the case.

You’re paying for it whether you know it or not

By: The Record

Two more months and this year is done, 2018 is over, and 2019 begins. It’s time to start making resolutions for the new year.

If you’re like most people, your resolutions will include spending less money. You’ll tally up your expenses for the year ending and look for places to cut in the one to come. You’ve got mortgage payments or rent, car notes and repair costs, various insurance policies, tuition for the kids, utility payments, grocery bills, etc. To get your total annual budget, you just add up the costs of all those things and then add $3,300.

$3,300? Whoa! Hang on a minute! $3,300 for what? Where’d that $3,300 come from?

That’s the average yearly cost of litigation for every household in America – the cost per household whether the inhabitants are engaged in litigation or not. You may have left that figure out of your calculations, but you shouldn’t have, because you and everybody else in America are paying that price per household for living in a hyper-litigious society.

According to a new study released by the U.S. Chamber of Commerce’s Institute for Legal Reform, the cost of tort litigation nationwide in 2016 was $429 billion, or 2.3 percent of U.S. gross domestic product. That’s about three-quarters the size of the U.S. defense budget and $100 billion more than Americans spent on retail drugs in 2016. A little over half of that lucre went to compensate plaintiffs. The rest got eaten up by lawyers’ fees and insurance and administrative costs.

What does any of this have to do with you? How do you wind up on the hook? The costs incurred by the targets of lawsuits and by all businesses paying for insurance to protect against lawsuits are passed on, to some extent, in the prices consumers pay for products and services.

So, actually, when you calculate your annual budget, you don’t need to add $3,300 to the total. It’s already in there. But it’s too high, and it has to be cut.

How much do lawsuits cost you? $3,300 per household, $429B nationwide, study says

By: Jonathan Bilyk

Across the U.S., Americans pay hefty costs for lawsuits, with the price tag stretching from the courthouses to the most basic levels of American life, adding thousands of dollars each year to Americans’ household budget costs, according to a new study of tort litigation costs.

The study, released by the U.S. Chamber of Commerce’s Institute for Legal Reform, indicates, nationwide, the cost of litigation hit $429 billion, or 2.3 percent of U.S. gross domestic product in 2016.

And, study report authors said, only about 57 cents of every dollar in those costs actually went to compensate plaintiffs, with the rest going to pay lawyers, insurance and administrative costs.

These bills have broad societal and economic effects, said ILR president Lisa Rickard, as they “drive costs, chill innovation and kill jobs.”

The ILR unveiled the litigation cost report at the organization’s annual conference, known as SummitXX, at the U.S. Chamber’s headquarters in Washington, D.C.

The report was prepared for the ILR by authors Paul Hinton and David McKnight, of The Brattle Group, and Lawrence Powell, director of the Alabama Center for Insurance Information and Research at the Culverhouse College of Business.

Rickard noted the nation’s total estimated litigation costs stand at about three-quarters of U.S. defense spending, six times the budget for the U.S. Department of Education and $100 billion more than Americans spent on retail drugs in 2016.

“We have the most expensive civil litigation system in the world,” Rickard said.

The study report authors said they calculated their litigation costs and compensation estimates from an analysis of data on commercial and personal liability insurance premiums, and estimates of the liability exposure of businesses and individuals who are self-insured.

The report noted its authors used data derived from commercial general liability policies, medical malpractice liability insurance, auto liability policies, and personal liability policies, such as homeowners and renters’ insurance.

It further noted the litigation cost burden can vary widely among the states, based on a variety of factors, including the size and nature of a state’s economy, and a state’s specific regulatory and legal environment. For instance, the report noted doctors and other medical practitioners in states with higher health care costs and legal environments skewed toward plaintiffs would likely be required to pay more for medical malpractice insurance, while states that limit the amount plaintiffs can win at trial “would be expected to affect the cost of commercial liability insurance, as well as medical malpractice insurance.”

In California, raw litigation costs as measured in the report stood at nearly $56 billion in 2016. New York’s litigation costs were next largest at $43.7 billion, followed by Texas and Florida at about $33.7 billion each.

Pennsylvania and Illinois then rounded out the list of the six top states with highest litigation costs at about $18 billion each.

The report also compared litigation costs as a share of each state’s GDP.

Florida’s litigation costs topped the list among U.S. states when expressed in that way, checking in at 3.6 percent of the Sunshine State’s economic output. Other states weren’t far behind, however, as litigation costs equated to 3.1 percent of New Jersey’s GDP; 3 percent in Nevada; 2.9 percent in Louisiana, New York, Montana and Rhode Island; and 2.8 percent in West Virginia.

Larger states generally fared better, simply because of the size of their economies, the report’s authors noted, as California – the country’s most populous state and largest state economy – logged litigation cost estimates equal to about 2.1 percent of GDP. In Texas, the country’s second most populous state, litigation costs also equaled about 2.1 percent.

Pennsylvania’s litigation cost burden equated to 2.5 percent of state GDP, while in Illinois the cost share stood at 2.3 percent.

The costs, however, are not solely borne by so-called “big business,” or even the targets of the lawsuits, the study authors said, noting the added costs baked into the U.S. economy from the effect on more expensive insurance policies.

Across the country, that additional cost translated to a burden of about $3,300 per household in 2016.

But those costs also varied widely from state to state, the study said.

In New York, for instance, the per household burden stood at $6,000 in 2016, the study said. Meanwhile, in half the states, the burden stood at less than $3,000 per household.

Other states with high per household litigation cost burdens included New Jersey at $5,550; Delaware, $5,383; Connecticut, $4,574; Florida, $4,442; California, $4,324; Nevada, $4,272; Louisiana, $4,015; Rhode Island, $4,066; Massachusetts, $3,869; and Illinois, $3,738.

In Texas, the burden per household came in at $3,535, the report said.

The added burdens are having real-world impacts, speakers at the ILR conference noted.

Stephen Waguespack, president and CEO of the Louisiana Association of Business and Industry, said, in his home state, litigation costs have contributed to making Louisiana’s insurance rates the second highest in the nation. And that, he said, has translated into pushing trucking firms and manufacturers, among others, to explore opportunities to transfer their facilities and production to other nearby states.

Waguespack said he hoped the report and similar reports to follow, which could delve more deeply into the questions, can shed more light on the issue, and help voters and consumers better understand how such litigation costs stand as an unofficial “tax” on employers and households.

“Most people think a tort is a pastry, not an issue,” said Waguespack. “This helps break the issue down into understandable, bite-sized chunks.

“It shows how this makes a difference in your life.”

‘Swipe right to sue’: Now you can file lawsuits the same way you find hookups on Tinder

By: Peter Holley

Exorbitant legal fees, seemingly endless bureaucracy and an uncertain time investment mean that the decision to pursue legal action against a company or an individual is often fraught with hesitation.

But the founder of a legal-services app says his product now allows users to sue someone with their smartphones and claim awards from class-action lawsuits the same way they’d select a match on Tinder — with a quick “swipe right to sue.”

Since those new services launched Wednesday, the app, known as DoNotPay, has been downloaded more than 10,000 times, according to its founder, Joshua Browder, a 21-year-old senior at Stanford University who has been labeled the “Robin Hood of the Internet.” As an 18-year-old, Browder created a bot that helped people fight parking tickets in New York, London and Seattle, and he later created another bot to help people sue Equifax after a data breach left 143 million American consumers vulnerable to identity theft last year.

Browder is the son of businessman Bill Browder, a well-known critic of Russian President Vladimir Putin. Joshua Browder said the idea for his latest project — which works in all 50 states — came about after numerous people used DoNotPay to recoup as much as $11,000 from Equifax, even after the credit reporting agency appealed.

The updates allow users to sue a defendant for up to $25,000.

“I think people are really upset with how the legal system works,” Browder said. “Lawyers say this app isn’t necessary, but if your issue is below $10,000, no lawyer is going to help, and if they do they’re going to take 50 percent of what you make.”

“The most popular claims so far involve a merchant breaching a contract, such as United Airlines kicking someone off a flight,” Browder added. “There’s a large number of negligence suits, which is very interesting.”

How does it work?

Once opened, the app tells users they can sue anyone by pressing a button. The app then asks several questions about the nature of the filing, as well as users’ name and location, before asking them to fill in the amount they want to sue for.

After directing the claim to one of 15 separate legal lanes — such as an automobile accident or recovering personal property — the app provides users with the documents necessary for their suit, including a demand letter, county filing documents and even a strategic script to read in court. Users print out the documents and mail them to the relevant courthouse, setting the lawsuit in motion.

The app can also analyze a user’s receipts and email, and display all the class-action lawsuit settlements they’re eligible for, Browder said.

“In true millennial fashion, the user can then swipe right on lawsuits that interest them (or left if not) and DoNotPay will instantly claim the funds,” he added.

The service has provoked skepticism from lawyers in recent days, as well as a detailed defense.

The class-action service applies to cases in which there has been a ruling and appeals have been exhausted, Browder said, noting that settlement claims are often subject to deadlines.

The app is free, and users are allowed to keep any money they recoup using the service. If the app offers more specialized services in the future, Browder said, they could come with a price tag.

Browder said the app has already helped users claim $16 million in disputed parking tickets. About half the app’s users who have sued Equifax have been successful, he said, taking home an average of about $7,000.

Terry Park, a college student from California, told Motherboard that he used Do Not Pay to appeal more than $130 in overdraft and wire transfer fees from his bank, leaving him feeling empowered.

“As a consumer, just a regular college student that uses bank accounts [with] the major banks, I thought the banks had the upper hand and they could just charge whatever they want,” he said. “I didn’t know these fees could reverse, and I think this app really helped to open my eyes in terms of what could be done and what I could get out of it.”

Browder said his goal is to make the law more accessible for ordinary people like Park who may be intimidated by the legal system or unaware of their rights.

“It seems like the only people who are benefiting from human misery are a handful of lawyers,” he said. “I hope to replace all of them by making the law free.”

Man who faked being wheelchair-bound drops two lawsuits after Post exposé

By: Julia Marsh

Take a hike!

The Queens man who The Post revealed could walk without a wheelchair — after he sued Big Apple businesses for millions over their lack of handicapped access — is facing fraud allegations by the companies and has already agreed to drop two cases.

Serial litigant Arik Matatov’s lawyer dropped two $5 million suits against luxury Soho retailers Christian Dior and Herno in the past few weeks.

And six other businesses are asking judges to toss their suits, citing The Post’s expose.

The Pino wine bar on East 33rd Street also wants Matatov and his lawyer, Jeffrey Neiman, fined up to $10,000 for making false representation to the court about the plaintiff’s disability.

“Documentary evidence shows that the plaintiff is not wheelchair bound as he claims, but is able to ambulate on his own and has submitted false and misleading statements about his alleged disability for monetary gain,” Pino’s lawyer, Ryan Brownyard, writes in court papers.

“See Exhibit ‘B’ herein and news articles from The New York Post concerning the plaintiff,” Brownyard adds.

Pomodoro Ristorante & Pizzeria on Spring Street is seeking the same punitive fine against the pair.

A lawyer for another business, the shirt company UNTUCKit on Prince Street, says Neiman insisted that his client had an unspecified “legal disability” but that he “can walk short distances.”

That admission “renders patently false the allegations in the complaint that plaintiff’s disability ‘requires him to use a wheelchair,’ and that he ‘was unable to enter’ UNTUCKit’s store up a single step,” says company lawyer Jared Kagan in court papers.

Over the past year, Matatov, 24, has been making $50,000 demands of dozens of Manhattan businesses that aren’t wheelchair accessible and pocketing the cash — or suing them for millions if they don’t cough it up.

He filed 50 disability discrimination claims in Manhattan Supreme Court this year.

His lawyer did not return messages.

Tom Stebbins, director of the Lawsuit Reform Alliance of New York, called Matatov’s lawsuits a “waste of already scare court resources” and urged government officials to “work to protect businesses from serial plaintiffs and their attorneys who are more interested in dollars than access.”

Class action lawsuits hit innovative companies the hardest

By: Alex Verkhivker

Corporate America has long complained that many class action suits are frivolous and an unfair tax on business. Lawyers have a financial incentive to file meritless suits because companies are often willing to settle—even when allegations are false—to save time, money, and public image. Lawmakers in Congress have wrestled with this issue for years without resolution.

But research suggests more reason to address it: the costs of such litigation weigh disproportionately on the most innovative US corporations, according to Chicago Booth’s Elisabeth Kempf and Tilburg University’s Oliver Spalt. Using data on more than 40,000 lawsuits filed between 1996 and 2011 against 6,111 companies, the researchers find that frivolous lawsuits tended to focus on highly innovative businesses, which represented juicy targets—and cost the average company in this group $1.1 million a year, or about 4 percent of annual profit gains.

To sort companies by innovation level, the researchers used a scale developed by MIT’s Leonid Kogan, Northwestern University’s Dimitris Papanikolaou, Stanford’s Amit Seru, and Indiana University’s Noah Stoffman. It measures how a company’s stock responds in the days following a patent grant, a gauge of how valuable the innovation of the company is.

Kempf and Spalt counted a lawsuit as meritless if it was dismissed by a federal court and wasn’t settled. Their study finds that when such a lawsuit was filed, the targeted company experienced a 2 percent drop in market value from three trading days before to three trading days after the filing. While this is a significant drop, Kempf and Spalt argue that it understates the true cost of a frivolous suit because a company’s stock often started to fall in advance of a lawsuit filing. Expanding the window to 30 days before and 30 days after a suit was filed, the researchers find an even greater average share-price drop: 18 percent.

These results are for the average company in the study’s sample. When the researchers broke out businesses that ranked in the top third of their industry peer group based on the corporate-innovativeness gauge, the results were even more dramatic. “The corresponding dollar losses in the seven days around a meritless lawsuit filing are $148 million for the average successful innovator, but only $12 million for the average nonsuccessful innovator,” the researchers write.

And as frivolous suits target the most advanced companies, the resulting costs may affect corporate decisions about whether to innovate and list their shares. The current US securities class action system, they argue, poses a threat to economic growth and competitiveness.

It’s Possible Woman Suing Over Sugar In ONE Protein Bars Never Actually Ate One

By: Mary Ann Magnell

ONE Brands, sued over the amount of sugar in its line of nutrition bars, says it has been targeted by a professional plaintiff who has never actually eaten one of its products and a law firm that failed in its first try to pursue these allegations.

The company’s motion to dismiss was filed in the U.S. District Court for the District of Columbia on Sept. 14 in response to a July lawsuit filed by plaintiff Gloria Hackman, a registered nurse who is referred to her in complaint as a “consumer, and a public health and consumer watchdog in the District.”

“Although captioned as a consumer protection case, this case is nothing of the sort,” said the defendant in its motion to dismiss. “Plaintiff is not a consumer. She did not take a single bite of the ONE Bars that form the basis of her complaint. Instead, she purchased the bars solely to file this suit.”

Hackman, dubbed a “professional plaintiff” by ONE, filed suit against the North Carolina-based company claiming that the bars that she tested, which included ONE Brands Birthday Cake Protein Bar and ONE Brands Almond Bliss Protein Bar, were “laden with sugar despite being marketed as a low-sugar, healthy product.”

According to the complaint, the bars contain “approximately 900 percent to 1,600 percent more sugar than the ‘1 gram of sugar’ represented” on their labels.

In the past, Hackman has sued companies like ALDI, Bayer, Save-A-Lot and Kraft.

“Plaintiff purchased ONE bars as a member of the consumer public,” her complaint says.

“This purchase included the purpose of testing and evaluating whether ONE bars have been unlawfully and deceptively sold…”

Hackman’s lawyers – the D.C. firm Migliaccio and Rathod – filed a similar suit in February, in which ONE Brands alleged that because the case was based on sugar testing that did not comply with federal law, the claims were preempted.

Hackman’s lawyers dropped the suit rather than respond to that claim and two months later filed Hackman’s case.

“Counsel for Plaintiff Ms. Hackman venture once more unto the breach,” the motion says.

In the filing to dismiss Hackman’s suit, ONE Brands claims that the plaintiff has “refused to turn over her testing and does not disclose which laboratory did the test, which methodology it followed, or what type of sugar she tested for.”

The defendant also notes that the complaint “makes clear” that she did not comply with the Federal Drug Administration’s testing protocol.”

In its motion, the defendant claims that the plaintiff’s sugar-content claims are preempted by federal law. Further, it claims she lacks standing and that she has not stated a claim under the D.C. Consumer Protection Procedures Act.

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All rights reserved.
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