Two individuals filed suit against Apple Inc. on May 11, 2018, in federal court in California.  The plaintiffs allege that Apple’s “butterfly” laptop keyboards are defective and prone to fail.  Specifically, the plaintiffs allege that certain laptop keyboards are produced and assembled in a way that when minimal amounts of dust or debris accumulate under or around a key, keystrokes fail to register.  When the keys fail the keyboard becomes inoperable and unsuitable for its ordinary and intended use, according to the suit.  Models listed in the complaint are 2015 or later MacBook laptops and 2016 or later MacBook Pro laptops.

The plaintiffs seek class action status and allege eight different causes of action: breach of express warranty, breach of covenant of good faith and fair dealing, breach of implied warranty of merchantability, violation of the Magnuson-Moss Warranty Act, violation of the Song-Beverly Consumer Warranty Act, violation of California’s Unfair Competition Law, violation of California’s Consumer Legal Remedies Act, and fraudulent concealment.

For more information see Zixuan Rao and Kyle Barbaro v. Apple Inc., 5:18-cv-02813 (U.S. District, N.C. Ca. 2018).  If you have questions regarding a possible class action, please don't hesitate to call our office at (314) 725-4400 or send us a message.

Keeping a Cryptocurrency Class Action in State Court

Cryptocurrency class actions are on the rise.  The Wall Street Journal reported today that in a review of 1,450 digital coin offerings the authors identified "red flags" associated with 271.  The article cites as red flags "plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams."  See Hundreds of Cryptocurrencies Show Hallmarks of Fraud, WSJ, by Shifflett and Jones, May 18, 2018.  Plaintiffs filing class actions will want to consider filing these cases in state court.

Can plaintiffs keep their cases in state courts (defeat removal or obtain remand)?

In any large nationwide class action plaintiffs face a gauntlet of federal law challenges that allow defendants to remove their cases to federal court.  This gauntlet includes The Class Action Fairness Act (CAFA) and, in the securities context, The 1998 Securities Litigation Uniform Standards Act (SLUSA).

The gauntlet is surmountable according to the U.S. Supreme Court.  The Court recently held that a class representative bringing a class action in state court, and alleging a violation The Securities Act of 1933 (1933 Act), has a right to proceed in state court.  See Cyan, Inc. et al. v. Beaver County Employees Retirement Fund, et al., No. 15-1439 (U.S. 2018).  In that case the plaintiffs filed suit under the 1933 Act, and did not allege violations of either The Securities Exchange Act of 1934 (1934 Act) or any state law.  Had the plaintiffs alleged violations of the 1934 Act, or likely any other federal or state law, the defendants would have been able to remove the case.    

If you are considering bringing a cryptocurrency class action, you should consider limiting your petition or complaint to allegations relating to the 1933 Act only.  This may allow you to keep your case in state court and obtain a more favorable outcome for the class.

If you have questions regarding a digital coin case, or any other class action, please don’t hesitate to call our office at (314) 725-4400 or send us a message here.

New Federal Class Action Filed Against Mt. Gox Founder and Partner Bank (Mizuho)

A California citizen and former customer of the Bitcoin exchange, Mt. Gox, filed a federal class action on Wednesday in relation to the approximate $400 million in customer currency that was lost by Mt. Gox.  Named defendants include Mark Karpeles, who is the former CEO of Mt. Gox KK, and sole owner of its parent company, Tibanne KK.  Also named as a defendant is Muzuho Bank.

By way of background, Mt. Gox was founded in 2009 and touted itself as a secure location to store and exchange Bitcoin.  In order to fund their accounts customers were permitted to wire money to Mizuho Bank, which operated as the banking partner of Mt. Gox.  After charging a transaction fee, Mizuho would then transfer funds to Mt. Gox, where an account would be funded in the name of the customer.  Customers could buy and sell Bitcoin and use Mt. Gox’s online wallet to store their cryptocurrency.  On February 24, 2014, the Mt. Gox website abruptly went offline.  The company claimed that it had been a victim of a malicious attack and theft, and that roughly $400m of customer funds had disappeared. 

The suit alleges that Karpeles controlled all aspects of Mt. Gox’s business, and that he knew as early as 2011 the security bugs existed and could be exploited.  The allegations against Mizuho are nuanced, but basically suggest that the bank knew of risks and regulatory scrutiny relating to Karpeles and Mt. Gox, but hid these concerns from customers in order to continue generating fees.  The suit indicates that Karpeles was arrested in Tokyo in September of 2015, charged with fraud and embezzlement, and that those charges remain pending.

The class action suit, Joseph Lack, v. Mizuho Bank, Ltd., 2:18-cv-00617-RGK-GJS, was filed in the U.S. District Court for the Central District of California.  It includes counts involving negligence, fraud and unjust enrichment.  Lack is represented by Rafey S. Balabanian and J. Aaron Lawson of Edelson PC in San Franciso.

The Smith Law Firm, LLC, is not representing any party in this case.  If you have any questions relating to your rights involving a class action or other matter, please don’t hesitate to call us at (314) 725-4400 or send us a message.

Smith Law Firm pursues large TCPA text message class action against 3 Day Blinds, LLC

The Smith Law Firm, LLC, continues to pursue damages and class certification in a federal class action against California-based 3 Day Blinds, LLC.  We filed the class action on October 27, 2017, on behalf of all individuals throughout the United States who received unwanted and unauthorized text messages from the company.  The messages advertised in-home design consultations, customized window treatments, and touted the 40-year business experience of 3 Day Blinds. 

Our complaint alleges that these advertisements violate the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. 227 et seq., which makes it unlawful to use an automatic telephone dialing system to deliver commercial text messages to individual cell phone numbers without prior express written consent.  Violations of the TCPA are not only annoying, but can lead to unwanted cellular usage charges and limit the ability of individuals to freely use their own cell phones.  In addition, illegal marketing of this nature can allow a company to gain an unfair competitive advantage over companies that elect to follow the law.

The complaint, pending in the United States District Court for the Eastern District of Missouri in Case No. 4:17-cv-02836, seeks class certification and statutory damages of up to $1,500 per message. 

If you received an unwanted text message from 3 Day Blinds, LLC, or any other company, please send us a message or call us at (314) 725-4400.

Smith Law Firm Obtains Directed Verdict in Favor of Defendant Homeowner

On October 23, 2017, we obtained a directed verdict in favor of a grandmother in a suit filed by her grandson in the St. Louis County Circuit Court, Associate Division.  The grandson claimed that he entered into a verbal agreement with his grandmother to pay taxes on her residential property, perform renovations, and pay others to perform renovations.  He claimed that he paid these amounts and was therefore entitled to a lien.  After plaintiff's evidence we moved for a directed verdict, which was granted by the court.  The plaintiff's/grandson's claims were denied and our client was able to keep ownership of her house, free of any liens.  For more information please see Goodwin v. Spangler, Case No. 17SL-AC16624.