Comcast late fee class action update–reflections of a consumer class action lawyer

For those interested, here is an update on the Oregon late fee class action against Comcast. The short version is that with my co-counsel, Tim Quenelle, I filed a class action against Comcast for its illegal assessment of cable TV late fees in Oregon.

We filed this case in July 2004. No, that’s not a typo. The case will turn six this summer. More background on the history of the case  here and here.

While Comcast disputes this, the class claims that Comcast illegally billed cable TV late fees in Oregon for years. Comcast claims that it’s done nothing wrong, or if it did, these were simply technical violations. Comcast has many other defenses. That’s their choice, of course.

So the latest–the update–is that Comcast is asking the court to allow it another appeal. This time Comcast wants to appeal the court’s decision to allow the class to seek statutory damages of $200 per person.  Comcast already lost an earlier appeal on whether it could require mandatory arbitration of these claims.

While no one has said this directly to me, it’s pretty apparent that the defense is really to drag this out as long as possible. In that respect, the litigation strategy is ironically the opposite of the speedy internet service that Comcast advertises.  But of course, Comcast makes those choices. I suppose it makes sense if the alternative is facing the prospect of payment of millions to Oregon subscribers.

To hear some self-appointed experts talk, consumer class actions are nothing more than stick-’em-up get-rich opportunities. The damages at issue in this case are calculated in the millions. Comcast billed late fees in six dollar increments. While few consumers lost large sums of money, when you total the numbers you come to realize that billing six bucks a pop from many people is a great way to make money.

Meantime, of course, the lawyers pushing the case soldier on. We get paid if and when we bring the case to a successful conclusion, based on a fee that the court must approve as reasonable and fair. And in the six years we’ve been pushing the case, we’ve invested time and money to move it forward.

If you doubt the wisdom of that, let’s consider the alternatives. We deregulated our economy beginning in the 1980s.  So regulation isn’t an option. Even so, I imagine we can all agree that allowing businesses to illegally collect money is unacceptable.  So what’s left, other than the courthouse, when corporations rip off consumers?

For Comcast Oregon cable TV subscribers who paid late fees, all I can say is that we’ll see this through to the end. That may be another 10 years, but so be it.  My son and I were talking the other day, and he related that he’s been accused of being stubborn. “You come by it honestly,” I replied. The reality of our world is that obstinate consumer class action lawyers are one of consumers’ best weapons against corporate greed running amok.

Oh Yes he did: President Obama calls out Supreme Court

Much is being written about President Obama’s first State of the Union address. I didn’t hear the whole thing, but thanks to the miracle of the interwebs, video clips are up. One has already caught my eye.

First some background. Here is an overview of the Court’s stunningly activist decision in Citizens United, which struck down key components of campaign finance reform. As a result of the decision, corporations may directly give to campaigns from their treasuries because corporations have expansive First Amendment rights. It’s a bizarre ruling that attributes to fictional entities rights that were never intended.  The holding of Citizens United appears to give all corporations these overbroad First Amendment rights, even those controlled by foreign interests that might be hostile to our national interests.

So in the State of the Union, President Obama questioned the Court’s Citizens United ruling. Here is what he said:

“With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests, including foreign corporations, to spend without limit in our elections.”

This video clip gives a much better feel than the text.  The video cuts to the Court members sitting somberly as members of Congress give a standing ovation. Better, it shows Justice Alito shaking his head and quietly mouthing what looks like, “It’s not true.” To Justice Alito’s credit, he’s no Joe Wilson, as he didn’t shout or interrupt.

So what are we to make of this? Keep in mind that Obama was a law professor before he entered politics. He showed as much with his reference to separation of powers that acknowledges the fundamental constitutional roles of the three branches.  Take note, as well, that the State of the Union is a power and prerogative of the President. U.S. Constitution, Art. II, Sec. 3.

While I’m no pundit or close watcher of presidential pageantry, it seemed remarkable to me that he was using the State of the Union to call out the Court.  The words may look light and bland, but insitutionally, this is closer to the old Saturday Night Live Point-Counterpoint routine with Dan Ackroyd and Jane Curtin:

Nice to see that the President calling the Court out on this. It’s a dreadful decision by an activist majority hell bent on allowing corporations to run amok.

David Sugerman

Oregon tax policy: It’s time to repeal the kicker

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

Halliburton/KBR continue fight against rape victim Jaimie Leigh Jones

Sometimes the best legal advice to a recalcitrant client about their case is, “Stick a fork in it; it’s done.” And so it goes with KBR and the horrifying case of Jamie Leigh Jones.

When Ms. Jones claimed that she was drugged and raped while working in Iraq, KBR and Halliburton worked hard to keep her sexual assault case quiet by forcing it into mandatory arbitration. Fortunately, judicial wisdom prevailed, and KBR eventually lost the Jones case in the Fifth Circuit Court of Appeals.  And those who trail behind her have the benefit of Senator Franken’s great work in limiting mandatory arbitration for defense contractors.

But KBR is both angry and undeterred. As this this report explains, KBR now disputes Ms. Jones’ allegations that she was drugged and gang raped by co-workers. KBR reportedly made those points in its brief seeking U.S. Supreme Court review.

While Ms. Jones blew the whistle five years ago, KBR now says Ms. Jones fabricated her story. Odd if you think about it.  If KBR actually doubted Ms. Jones, wouldn’t they have taken that position years ago? And more to the point, given all the publicity over the rapes in Iraq, isn’t it fair to assume that they would want to fight this thing publicly and loudly?

I’ll admit to biases and a point of view. They come from two sources. First, I’m a father, a husband, a son and a brother. Every woman in my family has worked. When my wife and daughter go to work, I think it’s a modest demand that they not be subjected to sexual violence. Apart from that, I represent Oregon National Guard soldiers in unrelated litigation involving toxic exposures at Qarmat Ali. I am not intending to comment on that case–we’ll leave it to our proof.  Still, the KBR litigation posture is telling.

I suppose it’s just too much to demand that KBR simply accept that it lost and go to trial.  Owing to the genius of our founders, we have jury trials to allow impartial fact finders to decide cases. That right exists so that the Jaimie Leigh Jones’s of the world can force KBR to prove its defense or shut up.

David Sugerman

This free speech case brought to you by….

This isn’t my usual gig. After all, to paraphrase one of my heroes, Senator Sam Ervin, I’m just a simple trial lawyer. I am no federal constitutional scholar. Nor am I ever likely to argue in the U.S. Supreme Court. I’m not even an expert on the First Amendment, though I’ve handled my share of speech-related cases.

Still, the stunning decision last week by the U.S. Supreme Court is mind-boggling. Now corporations are free to fund election campaigns out of their treasuries. You can expect this in the next electoral cycle: This seat brought to you by your friends at…. This Senate seat paid for by the Philip Morris…  Another Governor for KBR.

The Roberts Court showed its true colors last week when it issued its opinion in Citizen United v. Federal Election Commission, Case No. 08-205 (Jan. 21, 2010). Apologies for the slow-loading pdf format, but I wanted this tribute to intellectual dishonesty to come from the original source.

There are many reasons to be profoundly troubled by this decision.  Let’s start from the beginning with the Court’s overreaching. The case that came to the court involved a simple question about the limits on broadcast of a DVD critical of then-presidential candidate Hillary Clinton. But the conservative wing of the court–the one that espouses judicial restraint, loyalty to stare decisis and precedent–decided that this was the case to consider a corporation’s free speech rights and the continuing vitality of campaign finance reform.  As Justice Stevens–God bless him–explained in his dissent, the majority flatly ignored the posture of the case to reach the questions it wanted to answer.  That is not the stuff of conservatives.

I can imagine that the historic intellectuals of the Court’s conservative wing–giants like Justices Harlan and Frankfurter–are turning in their graves over this one. I suspect they would fairly spit at the notion that the majority of the Roberts Court is conservative as they understood that word.

It’s a comic moment in faux intellectualism. The majority consists of judges who purport to criticize activist judges. And here they are taking a case far outside of what was presented and using it as a vehicle to actively push the free speech rights of corporations.

And then there’s the underlying premise of a corporation’s first amendment rights. Last I checked, a corporation was a fictitious identity created for the protection of shareholders and preservation of capital.  The common law always viewed corporations as inert entities. I can recite the instructions given to juries in my sleep, “A corporation may act only through its officers and agents.”  But now we’re told that they have expansive free speech rights.

They are not people. They cannot act. Justice Stevens points out in his dissent that they can neither vote nor run for office, and they can be controlled by foreign entities whose interests may be hostile to our democracy. I would add that they can’t be imprisoned or executed, though on rare occasions, some deserve both.

I am reminded of this statement about the role of the Chief Justice of the United States Supreme Court:  “And I will remember that it’s my job to call balls and strikes and not to pitch or bat.” U.S. Senate Judiciary Committee, Opening Statement of Judge John Roberts (Sept. 12, 2005) (confirmation hearing for nomination to serve as Chief Justice), reprinted by CNN here.

Seasoned trial lawyers know that sometimes the court rules with you, and sometimes you lose. Those of us who believe in the rule of law acknowledge the authority of the court and do so with grace whether we have won or lost on any particular day. That professional grace is necessary. Still, this ruling marks a sad day for those of us who believe in the rule of law and who want to believe in the moral authority of the U.S. Supreme Court.

For those interested in a more pointy-headed discussion of the ideological demise of our current Supreme Court, here’s the link to a relatively short law review article by a law professor, David Strauss, that provides some thoughtful analysis on how far off the tracks the so-called conservative wing of the court has wandered.

For my part, I can only shake my head at the triumph of corporations running amok.

David Sugerman

Revised: 26 Jan 2010. See comment

Health club waivers gone wild–why I won’t do business with Westside Athletic Club

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

Honda Civic class action coupon settlement smells of abuse

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

Update on Western Culinary Institute/Career Education Corp. class action

This is an update on the Oregon consumer fraud class action against Western Culinary Institute and Career Education Corp. that I am handling with co-counsel, Brian Campf.  Lots of background here and here.  I know many people have questions about where we are on this.

We’re in the process of getting an order signed that’s the next step forward. It’s a bit of a slow process. My hope is that we’ll have the formal order entered in the next week or two and will start the process of providing notice to the class.

If you attended Western Culinary Institute/Le Cordon Bleu Portland after March 2006, you may be eligible to particpate in the case. If you haven’t contacted us, it would be helpful to hear from you. Feel free to use the contact button to find us.

I’ll continue to post updates on this site.

David Sugerman

Scam Alert: Oregon vote by mail scam using fake look-alike ballot

Imagine my surprise when I got home Friday night and looked at the mail. I received a “Secret Straw Ballot” from the “Nelson Report” as a “representative of the average voter.”  The enclosure looks like the exact ballot that is not coincidentally being sent to Oregon voters for a special tax election happening right now.

Turns out the “secret straw ballot” was mailed to approximately 50,000 Oregon voters. It was mailed by the leader of the opposition to Ballot Measures 66 and 67, Mark Nelson, as the linked article notes. While Mark Nelson won’t face a fine for sending out fake ballots, Secretary of State Kate Brown admonished him and indicated that her office will tighten regulations in the future.

Most of the focus has been on the ballot itself, but it’s the accompanying card that’s arguably worse. It contains this misleading statement, “The Nelson Report does not advocate the support of any candidate, nor does it advance the affirmative or negative side of any measure.” Mark Nelson leads the ballot measure opposition I’m supposed to believe that the Nelson Report doesn’t advance his objectives? Please.

It’s fabrication to represent the fake ballot as a poll. No pollster worth his or her salt would use a method like this to gather opinion. None would send it to 50,000 Oregon voters for a state wide ballot measure poll. The results would be garbage because of a selected, non-representative sample, a method that may or may not garner a response, a lack of any control over who responds, and an over-large sample size. These inconsistencies provide strong evidence of Nelson’s true intent.

It’s a hotly contested election. A vocal minority of Oregonians rabidly oppose increased taxes of any kind, for any reason. My own take is that our state is falling apart for lack of revenue. I see it everyday in the number of homeless on the street. I feel it with every tuition increase for my son who attends an “affordable” state university. I hear it with each ever-more depressing report of increased foreclosures and food scarcity. So my own take is clear–we need this.

To be fair, I understand the opposition arguments and don’t presume that anyone opposed to the tax increase is “stupid” or “heartless.”  There are people of good will on the other side of this issue. I strongly believe they’re wrong and that they don’t understand the costs and requirements of citizenship, but that doesn’t make the opposition evil.

Still, the opponents–and specifically Mark Nelson–owe us better. So here is a modest plea: How about you run a race on the merits and leave the voter fraud tricks out of it? If only a small percentage of those of us who received the fake ballot confuse it for the real one, a close election is decided on deceit. That’s intolerable.

David Sugerman

Iraq-era veterans losing a champion in the Senate

Senator Byron Dorgan (D.  N.D.) announced yesterday that he will not seek re-election.  I’ve never been to North Dakota, and I had only passing awareness of Senator Dorgan until this summer.  That changed as a result of my work on behalf of Oregon National Guard soldiers exposed to sodium dichromate in Iraq.

Senator Dorgan has chaired the Democratic Policy Committee. In that role, he has held hearings on Army and Army National Guard soldiers’  exposures to sodium dichromate at the Qarmat Ali facility.  Those hearings have been instrumental in exposing wrongdoing by KBR and others.

Senator Dorgan has proved himself a friend of our soldiers and their families.  This is not simple bumper sticker “support our troops,” stuff.  In comments made at the hearing in August 2009, Senator Dorgan made it clear that he is motivated by the simple proposition that we owe our vets more than pats on the back.

So I read this news with a heavy heart.  Those of us who dare to challenge KBR for their misconduct have taken on a big and powerful foe. As every guy knows, when you’re in a barroom brawl, there’s nothing more welcome than a friend by your side.  Thanks Senator Dorgan for your great work. We’ll miss you as we push forward.