Western Culinary Inst./Le Cordon Bleu Portland–Settlement Approved

I’m pleased to report that settlement of our longest running class action received final approval. The case, Surrett v. Western Culinary was filed in March of 2008. (No that’s not a typo.) Under the settlement. people who made claims will receive refunds of 44 percent. In addition, any debts owed directly to the school have been written off. And the defendants have to pay fees and costs, so the full refund amount goes to the former student.

We’re pleased with the settlement and happy to report that the court approved it in full.

The judgment was entered today (one of the last big hurdles), and we now know that payments will be mailed out on August 10, 2018.

We’re still moving forward with individual arbitrations for those former class members who have to go to arbitration first. We expect to file hundreds of arbitration cases. We will see those through to the end, no matter how long it takes.

Thanks for your patience-

David

Settlement: Le Cordon Bleu/Western Culinary and Career Education Corp.

It only took 10 years. Late yesterday, we agreed to settle our consumer fraud class action against Western Culinary Institute, Le Cordon Bleu-Portland, and Career Education Corp.

Under the settlement, class members will get refunds of 44 percent of the amounts that they paid for tuition, books, and fees. The 44 percent is reduced for class members who owe money directly to the school. (That reduction does NOT apply to student loans; it’s only if you owed money directly to the school.) The settlement must be approved by the court, so it is not a done deal, and we still have far to go.

There are some other features to the settlement. About $1 million in debts owed by students back to the school will be wiped clean. The defendants will pay attorney fees on top of the refund amounts. The Court will decide how much in attorney fees we will receive.

There is one other feature that is kind of a big deal. In the world of student loans, a borrower can defend against a collection action by raising the fraud of the school. Under the settlement, class members can still litigate the fraud of the school as a defense to loans. Also, they can use the information that we gathered over the last 10 years to help defend against collection actions. It is possible that former students could have their loan balances wiped away.

The student loan wipe-away is something that class members will have to undertake on their own–Sallie Mae and Navient were not parties to this case. Class members who want to pursue that option will need to hire their own student-loan defense lawyers. If you’re in Oregon, Washington, or Idaho, we can provide a reference.

So if you’ve read this far, you probably want to know how much and when. If all goes well, payment would be sometime this summer. But it could be delayed. As far as how much, it’s simply math. If you paid $40,000 toward an associates degree–many paid more–and you don’t owe money back to the school, your 44 percent refund would pay back $17,600.

To get the money, you will need to file a claim. Claim forms should be going out in March. Once the claim period starts, you will have 90 days to file your claim. If you don’t file it by then, you lose your right to make a claim, and Career Education Corp. gets to keep the money. We don’t want that to happen! So we’ll be working with you to make sure that you get your claim filed.

Also, this settlement doesn’t apply to those who have to go to arbitration. If you’re in the arbitration group, we can continue to help you, but you have to help us help you. We are pursuing refunds for the arbitration group and will do whatever is necessary to achieve a recovery. If you’re a member of the arbitration group and haven’t done so, please sign up through our portal. There are deadlines for filing for arbitration. If you don’t take action, your rights will be lost.

So that’s the story. We’re pleased with our progress and this development. And of course, we will continue forward.

-David

VW “Clean” Diesel Fraud: A new approach

The many, many federal class action cases against Volkswagen have been consolidated in Northern California, and it looks like consumers are in for a slow slog. My co-counsel, Tim Quenelle, and I put our heads together and have developed a new strategy option.

We believe that we can efficiently handle individual cases for people who bought or leased the vehicles in Oregon. We are now accepting select individual cases for Oregon consumers.

Our goal is to move these cases quickly. The beauty is that if we win VW must pay our fees, so we are able to offer affordable representation to consumers who have been wronged here.

Let us know if you have more information. You can call me at 503.228.6474 or email me at david@davidsugerman.com or 503.228.6474.

VW Clean Diesel Fraud and the “Goodwill” Package

I spent most of last week at the National Consumer Rights Litigation Conference in San Antonio. Among the many benefits is the chance to visit with colleagues who are the best consumer-side advocates in the country. I caught up with my colleague, Elizabeth Cabarser, one of the most talented consumer lawyers I know, and we had a chance to visit about the VW customer goodwill package. Elizabeth pointed out this order StipOrdReGoodwillProgram USDC MI from the U.S. District Court in Michigan, in which Volkswagen stipulated that participation in the program would not impact claims in the fraud case against it.

This is an important development for those who are concerned about the fine-print in the loyalty cards. Elizabeth and her team in Michigan have done a great job in getting this order entered. It’s stronger because Volkswagen stipulated to the order. That means that the issue is completed, and there is no effective means of appealing. This is a good development.

Let’s not lose sight of a few things. These benefits are mixed, and they are tiny. There is still a problem that it looks to me like VW is trying to establish a direct link with customers. Also, it’s possible that part of this is being done so that VW lawyers can point to all the good things they did, in order to argue that VW should not be punished for their misconduct.

That said, for those consumers who wish to take advantage of these benefits, the order provides protection.

David

VW Customer Care Diesel Fraud: Hello South Dakota

Volkswagen announced its customer care program for consumers cheated by the clean diesel fraud. The program gives consumers who register a $500 Visa gift card, a $500 dealer coupon, and three years of free roadside assistance.

The last two benefits are nothing more than slick marketing, designed to drive sales. The first–that Visa card–comes with some wicked fine print.

You have to root around in the shiny website to find the cardholder agreement, and then you have to page through that to get to this gem:

“10. WAIVER OF RIGHT TO TRIAL BY JURY
YOU AND WE ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL RIGHT BUT MAY BE WAIVED IN CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, YOU AND WE KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT. THIS JURY TRIAL WAIVER SHALL NOT AFFECT OR BE INTERPRETED AS MODIFYING IN ANY FASHION THE DISPUTE CLAUSE SET FORTH IN THE FOLLOWING SECTION, IF APPLICABLE, WHICH CONTAINS ITS OWN SEPARATE JURY TRIAL WAIVER.

IN THE EVENT OF ANY DISPUTE OR CLAIM RELATING IN ANY WAY TO THIS AGREEMENT, CUSTOMER AGREES THAT SUCH DISPUTE SHALL BE RESOLVED BY BINDING ARBITRATION WITH THE AMERICAN ARBITRATION ASSOCIATION, UTILIZING THE RULES OF PROCEDURE OF SUCH ARBITRATION SERVICE, FURTHER, ANY SUCH ARBITRATION SHALL TAKE PLACE IN SIOUX FALLS, SOUTH DAKOTA AND THE LAWS OF THE STATE OF SOUTH DAKOTA SHALL APPLY. THE DECISION OF AN ARBITRATOR WILL BE FINAL….”

Show of hands: So who wants to go to Sioux Falls to have their case decided by a professional, corporate arbitrator?

It is unclear whether VW is trying to capture the Diesel Fraud claims in this arbitration clause, but the language is broad enough to raise serious questions.

And of course, VW is trying to buy consumers’ loyalty for $1,000. Seems kind of cheap, given the scope of this multi-billion dollar fraud.

At bottom, this is risky business.

-David

VW Diesel Fraud–New filing: Bricker v. Volkswagen Group of America, Inc.

Catching up. Last week, we filed Bricker v. Volkswagen Group of America, Inc., U.S. District Court Case No. 3:15-cv-01785-PK (D. Or.) Along with my frequent collaborator, Oregon attorney Tim Quenelle, I joined forces with my friends at colleagues at Cohen & Malad from Indianapolis.

For those who like such things, here is a copy of the complaint: 1 – Complaint. The case is filed as a national class action. It protects the interests of anyone who purchased or leased one of the affected VW Group vehicles.

The case arises out of the well-publicized diesel engine fraud for Volkswagen “clean diesel” vehicles. In selling various VW and Audi diesel vehicles, the Volkswagen Group represented that these vehicles were high mileage and way low on emissions. As has been widely noted in the press, the high-dollar fraud rested upon sophisticated cheat code or defeat device that switched the vehicles’ operating modes when they were being operated in a parked condition for emissions testing.

The “clean” low-emissions mode did not and could not operate while actual consumers drove the vehicles. Instead of driving green, clean diesel cars, class members were driving dirty diesel vehicles that violated pollution standards.

People paid premium prices for these clean vehicles. In Oregon and Washington, especially, green consumers pay extra for earth-friendly products. VW hyped that clean, green technology in its sales and marketing efforts, and they made a mint. The clean diesel products pushed VW to the number one position in worldwide car sales.

No surprise that we’re hearing from a lot of people. We’ve developed an initial information email for those who have questions. Feel free to email me at david@davidsugerman.com if you need more information, and we’ll mail out the initial information. (I have not posted it here because doing so destroys confidentiality. And we really, really don’t want to do that.)

The case is almost certainly going to be treated as a multi-district litigation (“MDL”) case. When cases are assigned to the MDL, the rules and processes are different. Once it is assigned–probably not for a few months–I’ll update with more information.

In addition to our email packet, I would recommend connecting with us on Facebook if you are concerned about these issues. We tend to post there more frequently.  And of course, if our information and FB posts don’t answer your questions, feel free to call or email.

-David

Bixby v. KBR–Oregon Congressional Delegation members push back on KBR and Department of Defense

The Oregon Qarmat Ali Vets’ case, Bixby v. KBR, continues. A group of 12 of these veterans won a stunning $85 million verdict against KBR for toxic harms suffered in Iraq at a KBR- contaminated site. After the verdict, and while the case was on KBR’s slow-track appeal, the U.S. Supreme Court issued, Walden v. Fiorean opinion in an unrelated case that changed the rules of jurisdiction. When the case came before the Ninth Circuit, it remanded the case because jurisdiction was improper.

And then KBR filed a claim for costs against these veterans, seeking approximately $850,000 from 12 sick vets who provided KBR with security. KBR got paid handsomely for its war-time work on a no-bid contract. KBR is seeking to have the United States indemnify it for all costs in these lawsuits. And even so–after winning on a technicality–KBR is now seeking to bankrupt these vets.

There are countless horror stories involving our vets. And this is one more. They served. They were sent. They did their jobs. They sacrificed. And now this.

It is perhaps too much to hope that anyone will care. And that is the point of this post. Thanks are due to members of the Oregon Congressional Delegation: Senator Wyden, Senator Merkley, Rep. Blumanauer, Rep. Schrader, Rep. Bonamici, and Rep. DeFazio did Oregon proud when they wrote this  Ltr Or Cong to DOD 15 July 2015 letter to the Department of Defense, blasting KBR and calling on the Department of Defense to take over these cases and resolve them equitably.

“These veterans deserve better***.”  I couldn’t agree more.

-David

Update: Scharfstein v. BP West Coast Products (Oregon ARCO gas debit card fees)

There have been two important developments in our win over BP. The case involves illegal debit card charges for gas purchases at Oregon ARCO stations. Details on the history are here with a few additional posts here.

A bit of a summary first. Our claim process was a smashing success. Over 1.7 million people, roughly 83 percent of the class, made claims. That’s an awesome result in any class action.

So two things happened this month. First, the Oregon Legislature passed and Gov. Kate Brown signed HB 2700, a bill that changes how unclaimed money is handled in class actions. BP opposed the bill. Here is an awesome insider’s view of some of the many gyrations and personalities that BP hired to kill the bill. (Love the comments, especially!)

Anyway, the bill appears to apply to this case. BP disputes that, of course. So what does it mean? Well, it means that Judge LaBarre must sort out whether it applies and–if it does–how to go forward to finish what needs to be done before entry of judgment. As a lawyer who practices in these areas, I am fairly certain that the bill applies to our case. So that’s the easy part. Then comes the “Now what?” portion, and my guess is that that will slow entry of judgment.

The good news is that BP must pay 100 percent of the value of the verdict. They don’t get to keep the money. Better yet, the money goes to legal aid and other worthy related purposes to benefit consumers. Best of all, we are talking about roughly $60 million dollars.

The only downside is that it slows down our case somewhat, and it gives BP a big issue to argue on appeal. We don’t really get to choose here, so we’ll take the bitter with the sweet and move on toward wrapping everything up in the trial court. Not sure when that will be by the way. But after we get it wrapped up, BP has indicated that it will appeal. As we’ve said many times over, the appeal could take years. And of course, there is always a risk that BP will overturn the verdict on appeal.

But let’s be very clear about something: They want more fight? We got more fight. David is not intimidated by Goliath.

I mentioned two things happened. The second happened earlier this week. Judge LaBarre ruled on the fee petition. As we explained in the class notice, we were going to ask the court for no more than 20 percent, or $40 per class member.  Judge LaBarre granted part but not all of our requested fees.

Each class member’s share of fees is $35.15 or 17.57 percent. (If you want a comparison to an individual case, we usually charge individual consumers 33-40 percent, depending on whether the case settles before trial.) So when and if final payday comes around, each class member should receive $164.85, plus interest, if the case goes all way to the bitter end.

So that’s the news from the trenches. Thanks for your continuing patience. Keep in mind that we do updates on our Facebook page, so if you’re a user, you can find news there about this case and other pending major cases against KBR and Career Education Corp. If you’re a Twitter user, I am @DavidSug, though that’s not really a work account. Note that I do not offer legal advice in response to comments on our blog or on Facebook or Twitter. It’s not that I’m unwilling to answer questions. It’s more that we are required ot protect your confidentiality. And we take that seriously. So feel free to call (503.228.6474) or email me davidATdavidsugerman.com if you have questions.

-David

BP class action update: Claim time!

The claim process has started in our consumer fraud class action against BP for illegal debit card fees at Oregon ARCO stations. We’re getting a lot of calls, emails, and questions on our Facebook page.

And on top of it all, ice and snow have moved into Portland. So it looks like I may not be able to get to my office to answer calls today.

A few details and updates.

1) One common question is “How do I make a claim?

There are two ways. If we recover your name and address, you’ll get a notice that says you’re in. If you get a letter, you don’t have to do anything more to make your claim.

The notices are starting to go out this week and will continue as we get more names and addresses. We have about 500,000 letters going out this week. I’m hoping that we’ll get another million names and addresses.

To keep your data secure, I do not have direct access to it, so I can’t look up whether we’ve recovered your data.

For those people whose records we do not recover, you will need to file a claim form. Very important: We can’t file for you because you need to fill out the form.

Here is the link to the claim form

2) More information

The official court-approved website is here

FAQ’s on the official website are here.

If you want more of a flavor of the history of this fight, you can read blog posts collected here.

3) What will consumers who make claims get?

The jury verdict means a maximum of $200 for each consumer who paid the illegal debit card fee between January 1, 2011 and August 30, 2013. The court may deduct up to $40 from each claim to contribute to fees and expenses. We’re asking the court to order BP to pay all the fees–we don’t know how the court will rule. Bottom line: Depending on the court’s ruling, each person who makes a valid claim will get $160-200.

4) When do I get my money?

Great question. Don’t go spending it yet. BP tells us they will appeal. That may well take years. If BP wins on appeal, we may not collect a dime. (And by “we,” I mean you and me!) But if we keep winning, you also get interest at 9 percent on your claim.

5) What’s next?

We hope to finish the claim process by December 31. There is an attorney fee hearing in February. (Sorry, I don’t have the date at fingertips but will make sure it gets posted on the official site.)

We’re pleased with our progress, but there is far to go. My promise to you: Our legal team will keep fighting until we see this thing through.  We’ll also do our best to answer questions and get back to you, but we’re buried in this, so please be patient.

Best contact for me is david@davidsugerman.com or by phone 503.228.6474. Thanks for you patience and your support.

David Sugerman