Rep. Earl Blumenauer (D. Or.) has done his part to get to the bottom of the sad story of Oregon National Guard soldiers exposed to toxic chemicals at the KBR Qarmat Ali facility. Rep. Blumenauer previously asked the Secretary of Defense to provide information about the agreements–both for KBR and other contractors.

In today’s Oregonian, Julie Sullivan reports here that the Army has refused to produce the information because it remains confidential. The response from the Army is a bit perplexing. The Project RIO contract, which was declassified, contains an indemnification provision. So I can’t help but wonder what is classified. Maybe there are other documents the Army is withholding?

It’s all a bit curious.

The soldiers appreciate Rep.  Blumenauer’s efforts. He is helping to get to the bottom of things.  He’s raising important questions about government contracts, and contractors and oversight.

For my part, I remain focused on KBR.  That’s my job.  Lots of work ahead to prepare for trial. But we’re on it.

The Government Accounting Office released its report today,  GAO Report For Profit Colleges (pdf), highlighting a number of abuses by for-profit trade schools.  The GAO engaged in undercover testing to ferret out the fraud and abuse in for-profit admissions and lending.  Pretty scary stuff.

The GAO Report notes that approximately 2,000 for-profit colleges received federal funds of $24 billion in the 2008-2009 school year. At all 15 of the for-profit schools surveyed by GAO, admissions representatives made deceptive and questionable statements about graduation, employment and financial aid.

I’ve been laboring in a trade school class action against Career Education Corp. and Western Culinary Institute, which is now known as Le Cordon Bleu College of Culinary Arts in Portland.  I’m not particularly surprised by the GAO findings. Maybe the GAO report will spur Congress to take a hard look at these issues. That would be a good thing because we have sentenced a generation of kids to a lifetime of debt.

My view is that the current crisis stems from a nasty mix of deregulation and privatization. Give for-profit schools nearly boundless access to federal money. At the same time, do not regulate their conduct. Those were the first steps to sentencing a generation to a lifetime of debt.

Question: Will we be able to fix this thing, or are we just content to continue fiddling while Rome burns?

Kind of excited to see that the Oregon Consumer web page has gotten its sea legs and is publishing.  Here is the link for some interesting information on a wide range of consumer issues. I’ll be monitoring and noting some of their published reports. My hope is that the web page realizes its potential,  as we consumer advocates need all the help we can get.

I’m at home this evening with two computers going side by side. On the desktop, I have a  several thousand page PDF of Army FOIA documents open, as I wade through KBR discovery. My laptop is up with a running digest of the interesting tidbits.  It’s my own odd-duck style of learning the case.

The phone rings, and I answer it absentmindedly.

“David Sugerman?,” asks the woman on the other side brightly.

“Yes?”

She runs on without a pause about how she’s calling to thank me for my great work and wondering whether she can help. Can she send money, or bake cookies, or weed my yard?

I stammer, “Who is this?” I have the presence of mind to not ask her how she got my number or why she’s calling a stranger out of the blue.

She chuckles lightly, “I’m just a Mom.”

“And why are you calling?”

“Because your work makes Portland great. And besides those guys are killers.”

Might be the exhaustion, or maybe it’s that I’ve lately been reflecting on my mother and wondering what she would have said about her son’s latest work. But for whatever reason, I was practically moved to tears.

Turns out that she had collapsed two people into one. She thought that Stu Sugarman, a Portland civil rights and criminal defense attorney, and I were the same person. It happens now and then…. I corrected her. And she STILL wanted to help and to send money. She wondered what she could do.

So this is what I said. “Do something great that you think matters and then drop me a line to tell me what you did.” She liked that.

A few thoughts before I go back to the mind-numbing document review.  There are some days when I know that I am blessed or–if you prefer–profoundly fortunate.  This is one.

So Mom, your call was a boost. Hope you don’t mind that I’m putting it down here. I imagine doing so will help me remember this moment as we trudge on toward trial.

Thanks and love-Just a son

Yes, I’m going to name names here. That’s how we do things. But before I start throwing the dirt, I want to be clear about what they’ve done.

Last week, a case I’ve been working on–Bixby v. KBR–got a lot of press. This is the Oregon National Guard soldiers’ toxic exposure injury case against KBR, Inc. (New motto: “We’re no longer Halliburton.”) [Brief note to KBR/Halliburton: That was a joke. -ed.]

Anyhow, I received a number of comments from friends and colleagues. Invariably, some included gentle ribbing about the picture of the middle-aged attorney who seems way more serious and sober than usual. Some included the kind of “Attaboy” comments from colleagues with whom I’ve shared foxholes.

Those are good. But there were a few that were better.

Over the course of the years, I’ve been up against talented and tough opposing counsel in all manner of cases. Two former (and future) adversaries took time to send notes and emails lauding my efforts and wishing me well on these cases. And these are the two Oregon lawyers who I want to call out by name.

Carol Bernick, Partner-in-Charge at Davis Wright Tremaine, and W.A. Jerry North, a shareholder at Schwabe Williamson Wyatt, have both been opposite me in hard-fought cases.  We’ve each had our wins and our losses in big cases.

Each of them wrote notes about the Oregon National Guard cases. The recognition is nice, but what’s better is what it says about the legal profession in Oregon. Both are top-notch opponents. Neither gives an inch in their cases. Still, they can recognize the work of a colleague.

This is why I treasure practicing law in Oregon.  Despite our differences and our courtroom fights, we still have the sense and wisdom to recognize the good works of our colleagues and opponents. When I talk to colleagues in other states, they can’t believe that we generally get along with opposing counsel, work toward stipulations on things on which we can agree, and then bring it full force to fight when we cannot agree. Our clients are well-served by all of this, and we who fight for a living gain a measure of comfort by knowing that the places and times we battle are simply what we do.

So Jerry and Carol show by quiet act what professionalism means to Oregon attorneys. I am deeply appreciative of their kind private messages. But more, it speaks to a vision of how Oregon attorneys carry themselves.  Thank you, friends, for your grace.

It’s official. Justice Stevens announced his retirement from the U.S. Supreme Court effective the end of this term. Court watchers have been speculating for a while that this would happen.

Here is one of many news reports. I’m taken by this quote from the linked MSNBC report by Senator Mitch McConnell (R Ky):

“Americans can expect Senate Republicans to make a sustained and vigorous case for judicial restraint and the fundamental importance of an evenhanded reading of the law.”

This is great news, as the Senate Republicans are now ready to reign in the activist Roberts Court. This is the activist Court that brought us Citizens United.  And that’s only the most recent overreach.  Senator McConnell’s talking-point quote seems oddly ironic, given that he supported Justices Alito and Roberts and the rest of the activist wing of the Court. But then I suppose one could pointedly say that it’s all about whose ox is getting gored.

Here are a few thin suggestions from a simple consumer attorney toiling in the hinterland:

1. How about we jettison the labels? The reality is that Justice Stevens was hardly liberal by comparison to many of his predecessors. Labeling him as a leader of the “liberal wing” of the Court is media hype and talking-point noise. There is no liberal wing to the Court. And those who claim to be the conservative wing are pretenders. I can imagine Justices Frankfurter and Harlan turning over in their graves.

2. Let’s not forget history: Justice Stevens is one of many Supreme Court justices who proved to be different than presumed. Justice Stevens voted differently than expected on major issues.  Same was true of Justice Brennan.

3.  I suppose the posturing is inevitable. Still, is it too much to ask that you deal truthfully? If Sen. McConnell truly supports judicial restraint, where was he during the Roberts confirmation hearing? Meantime, maybe he can take steps to make it up to us by truly working for a non-activist majority on the Court.

Yesterday, the Oregon Senate passed legislation that provides Oregon consumers with a powerful tool to fight bank fraud.  HB 3706 amends the Oregon Unlawful Trade Practices Act so that banking and credit practices are now included in Oregon’s signature anti-fraud law.

The bill previously passed the Oregon House. But there were a few amendments along the way, so I believe that there will need to be a reconciliation process before the governor can consider it.

Rep. Nick Kahl pushed the bill on the house side. He’s proving himself a tireless advocate for working Oregonians. On the senate side, Sen. Suzanne Bonamici (D. Beaverton) championed the bill, continuing her great work for Oregon consumers. News report here. Our Oregon stood up for consumers on this bill. They deserve our appreciation.

The bill is important for consumers because it ends special rights for banks. The Unlawful Trade Practices Act sets modest standards that protects Oregon consumers from fraud. For years, banks and insurance companies have been exempted from it.  Why shouldn’t they be held to the same standards as car dealers and cable TV companies? If a bank engages in fraud, it should have to answer to consumers. This is not particularly difficult.

I’m especially taken by some of the grumbling from those who opposed this legislation. I guess its easy to forget bank bail-outs, CEO salaries, and the lack of meaningful banking reform.  The legislature provides consumers with modest protections against nickel and diming and fraud, and banking industry cheerleaders complain that it will simply cost banks more? Amazing. Maybe they were asleep or comatose when the economy melted down.

So at bottom, it’s a good day for consumers because Salem showed leadership.

I have to admit to surprise over yesterday’s vote that passed income tax increases. Oregonians don’t generally like to raise taxes and historically vote against increases in income tax.  That one is past, and now it’s time to get real about Oregon’s tax policy.

It is often said of families that all are unique and strange. I suppose the same is true for the various states and how they fund their operations. Oregon is its own place. We don’t have a sales tax and won’t anytime soon. We rely heavily on income tax to fund our state’s services, and we have capped taxes on real property so that property owners’ tax levels are limited.

There is one other unique feature of Oregon tax law, and that is the kicker. The kicker is a provision in the Oregon constitution that requires return of income tax revenues collected that exceed the revenue forecast by more than two percent.  Oregon Constitution, Art IX, Sec. 14(3).  So in the years in which the Oregon economy hums along, many people work, and we all earn well, Oregon’s is adequately funded by tax revenues.

But what’s missing is any planning for the lean times.  They are inevitable, as anyone who is cash strapped or unemployed  in this recession can tell you.  Under the Oregon kicker, we empty the treasury in the good years and don’t set aside money for the bad ones.

It’s a policy that ignores every wisdom teaching in Western civilization. Through Aesop’s fable of the Ant and the Grasshopper, we teach our children to plan for the lean times. The same message is found in the Bible’s narrative of Joseph (Genesis:41), who advised the Pharoh to collect and save excess grain to prepare for the lean times.

I imagine that the same teachings exist in virtually ever wisdom tradition, regardless of religion, culture, or location. And if you doubt that these are lean times, come wander the streets of downtown Portland, or talk to the people who work on food scarcity in Lane County, or look at this snapshot homeless Oregonians from a day in May.  Those basics of food and shelter don’t even get us to class sizes for K-12, protection of kids in foster care, or the staggering cost of college education at Oregon’s public universities.

Fortunatley, I’m not alone in my thinking.  In this op-ed piece in today’s Oregonian, two prominent Oregon republicans, Lane Shetterly and Tony VanVliet, share their take on the need for a rainy day fund.  Interestingly, they wrote the piece before the historic vote on Measures 66 and 67.  They call for a constitutional amendment that would take excess revenue collected above the forecasted amount and put it in a rainy day fund. They point out that the concept of a rainy day fund has broad support among republicans and democrats.

It’s a breath of fresh air because it takes fiscal responsibility seriously and writes it into the constitution. They are spot on.

There are those who will say, “But it’s my money,” or “But I don’t trust the government and don’t want to give them more money to waste.” Those concerns are real, but they miss the mark. We have to plan for the days when income falls because we all know that the thin days will return.  As long as we’re committed to an income tax as the means through which we fund our state, we would do well to follow the wisdom of Aesop and Joseph and plan for the lean days.

Without changes, our seniors, kids, and those who have fallen on hard times will always be at risk in these lean days come.  We are better than all that, aren’t we?

David Sugerman

After settling into my current schedule, I realized that I would probably work out more frequently if I joined a health club near my office. Westside Athletic Club has a location near my office in Big Pink, Portland’ s US Bank building. So I headed over to check it out. At the front desk, the peppy staff member enthusiastically endorsed my plan. And then she handed me a form that I needed to fill out and sign.

The form included a waiver of claims that appeared to immunize the health club from harms and losses caused by its fault. I told her I wouldn’t sign, and for her part she told me that she couldn’t allow me to look at the club. I asked her to tell management that they had just lost a sale. She was very polite and apologetic and promised to pass along my refusal.

So what’s the problem here, and why am I so snippy about such things?

Some legal background, first. Oregon generally enforces waivers and releases. In other words, if I sign a waiver, it will generally be enforced. There are a few exceptions, but you’re not reading this for details or even advice, so we won’t get too geeky about all this. Also, in the proper situation, I don’t have much of a problem with a waiver. For those of us who choose high risk activities like skydiving, skiing off the groomed portion of the mountain, scuba diving, and white water rafting, we have to accept that hazards exist and grievous injuries are possible. A properly balanced waiver isn’t particularly offensive in those settings.

But Westside wanted way more than that. While it wants people as customers, it refuses to take responsibility for something as simple as the safety of its club. If, for example, a Westside employee spilled oil all over a floor and didn’t clean it up, and the waiver-signing patron slipped and shattered her knee-cap, Westside would be off the hook for all harms and losses.

That’s a line that it should not cross and why I won’t do business with them. As a customer, I think I should be able to expect that the health club will keep the place properly maintained. Failing that, I won’t join a club that hides from its responsibility.

Now let’s be clear, injuries don’t happen often. As well, I’m going to guess that Westside was simply following legal advice. I wouldn’t be surprised if other athletic clubs foist the same provisions on their visitors. Still, those are excuses, and they don’t overcome the basic problem of taking responsibility for our actions. So Westside, if you want me to visit or join your health club, please offer me a deal we can both live with. I know business is tough, but that’s true for both businesses and consumers. I’m not interested in paying dues if you’re not willing to take responsibility for the safety of your club.

David Sugerman

Here is a report of what looks to be an abusive coupon settlement in a class action in California. It prompts me to do some explaining, as I’m a consumer class action lawyer.

As the linked report explains, the case involves a California false advertising class action in which two consumers filed a class action against Honda for overstating the mileage on its Civic Hybrid. I’m going to assume that Herb Weisbaum, the MSNBC Consumerman columnist, got the story right. He usually does a good job on consumer issues. I don’t know anything about the case or have access to the court file. I’m relying on his report for this analysis.

The story goes that Honda and the class reached a settlement that provided for coupons and an informational DVD for the class, incentive payments for the class representatives, and a seven-figure attorney fee award for class counsel.

The coupons are the problem. According to the linked report, the coupons are worth $500-$1,000 but only redeemable on the purchase of a qualifying model of a Honda or Acura. That stinks. And it stinks in both directions. If Honda did wrong, then it should provide real relief to the class and shouldn’t be rewarded with a marketing campaign for consumer ripoffs. If, on the other hand, Honda did not violate California law then it shouldn’t be paying millions to attorneys who pursue class actions.

And as for the lawyers for the class it stinks because coupon settlements are acceptable under a rare set of circumstances. Here are some things that should be in place to make for a fair coupon settlement. They make sense when the coupons are for widely-purchased consumer goods, like gasoline or toothpaste. To be a fair settlement, coupons should almost always be transferable and/or redeemable for cash. Consumers who receive coupons to settle a class action should be able to get real benefit from them. The reported Honda coupon settlement fails on all fronts.

It’s possible that I’m missing something, and if so, as is my general practice, I will update this post. But save me the defamation threat letters that don’t include a thorough and documented explanation of how I’m missing the mark.

I imagine that much criticism will be heaped on the class lawyers for this settlement. Let’s be clear. Based upon the reported facts in the MSNBC column, that criticism is well-deserved. It looks like Honda chose to pay millions to class counsel to snuff out a liability and promote future sales of various products. Settlements take two sides. Honda deserves some of the darts on this deal as well.

The other piece is that it seems to me that class members may want to strongly consider objecting to this settlement. Class action settlements must be reviewed and approved by the court, so if you’re a class member and you get a notice, you might want to consider whether to object. A rejection of this settlement might send a message to both sides that consumers deserve better.

David Sugerman