Judge denies defense motions in Career Education Corp Western Culinary Institute class action

Happy to report that Judge Baldwin denied defendants’ motions for summary judgment and to decertify the class in Surrett v. Western Culinary Institute, our consumer fraud class action for former Western Culinary Institute/Le Cordon Bleu Portland students. We’re very pleased.

The gist of Judge Baldwin’s ruling is that there is sufficient evidence for a jury to decide whether the school and its parent corporation, Career Education Corp., defrauded students by failing to disclose important information. We’re very pleased. Now a bit more discovery and then full-on trial preparation.

It does look like we will be moving into mediation later this month. We had an early attempt at mediation long ago, and it failed miserably. Much  has happened since. Watch this space for updates or–for quicker information–like us at on Facebook here. We tend to post quicker updates there.

KBR’s concealment of discovery

Yesterday in our Qarmat Ali Vets case against KBR, we filed a motion for sanctions. The filing is here (pdf). The Memorandum (toward the bottom) lays it out in detail. Turns out that KBR concealed critically-important information about the Qarmat Ali Water Treatment Plant and its extreme level of contamination. They knew about that in 2002 or early 2003, long before Oregon Army National Guard veterans went into the site.

Today’s Oregonian reports the story here, including rather colorful big words (“histrionic” and “hyperbolic”) bandied about by lead counsel for KBR. One wonders why KBR hurls big words and accusations when they simply could have avoided this problem by coming clean.

I suppose we could respond in kind. Not going to happen because not much is served by doing so. For readers who might wonder about the lack of response, let me just say that this is neither the time nor the place. We are scheduled for our first trial in Oregon in October. Fair to say I am looking forward to it. I hope that’s not too histrionic or hyperbolic.

Update: Consumer fraud class action Career Ed Corp and Western Culinary Institute

In blog comments, we have been asked for updates on this case, which is below. A few things. First. A better source of quick update is our firm Facebook page. Assuming you are an FB user, simply go here and like the page, and you’ll get more timely information. Second. We have to be mindful of  what we post here. It’s a public page. No doubt that counsel for Career Education Corp and Western Culinary/Le Cordon Bleu Portland read this blog–greetings, Mr. Nylen–so we act accordingly.

And now to the specifics. Last Friday we appeared in front of Judge Baldwin for a long hearing on defendants’ motions to decertify the class and for summary judgment. For people keeping track at home, if granted, the first motion would end the class action and require everyone to go forward individually. If granted, the second motion would end the case, with a victory for the defendants.

Judge Baldwin did not rule from the bench and instead took the motions under advisement. This was not a surprise–there were many pages of pleadings and exhibits to review. It’s a big job digesting all of it.

I handled oral argument for the class, which went approximately two hours. While it’s not a particularly good predictor of outcomes, I felt good about how oral argument went. The defendants have since filed another motion, asking the Court to take into account a recent decision in New York dismissing a law school fraud class action. We’re not particularly impressed with the new argument–New York law is different. So are law schools.

While there is no fixed deadline, I would expect to hear back from Judge Baldwin by early or mid-April. He instructed the sides to come up with a proposed schedule for the rest of the case as well.

Meanwhile, we are preparing for trial of this large and complicated case. It’s been an interesting ride over the last four years. The legal team for the class has put in thousands of hours of work. (Yes, you read that correctly.)  The case continues to present many challenges. Our task remains to overcome each obstacle and get the case to trial.  No one said this case would be easy, but I remain pleased with our progress. And while it may look like nothing is happening, behind the scenes we continue to push forward to our day in court.

 

Memo to the Oregon Legislature: Healthcare Transformation Starts with Patient Safety

The Oregon Legislature is back in session and grappling with proposed health care transformation. Yesterday, we learned that some legislators are more concerned about “defensive medicine” and putting an arbitrary limit on access to justice for Oregonians who are on the Oregon Health Plan or Medicaid rather than they are about keeping patients safe.

Did you know that more than 98,000 Americans die every year from medical errors?  Here is some context: That number is equivalent to a 747 jet liner crashing every day of the year killing all on board. So when we talk about healthcare transformation, shouldn’t we really be talking about patient safety?

We need to focus on the real problem with health care delivery and that is keeping patients safe and informed.  Recently, Legacy Emanuel participated in a national study where they implemented simple procedures and check lists for all hospital staff to follow.  You know, things like washing your hands between each patient, making certain all medical equipment is accounted for before finishing a surgery, that the patient is the same person as the chart on the end of their bed.  According to the Oregonian’s report on that study, Legacy saved over $13 million in one year, cut down on medical errors and significantly lowered their infection and injury rates.  Imagine the cost savings if these check lists and procedures were implemented in every Oregon health facility. Imagine the health improvement and lives saved from real health care transformation that starts with patient safety.

Instead of focusing on patient safety, we have legislators holding forth about something they call “defensive medicine,” They are using that label as a tool to put arbitrary monetary limits on patients’ rights. Here is a modest proposal: If we’re going to talk about things like this, let’s resolve to get the facts straight.

The label “defensive medicine” presumably refers to tests ordered by a provider for purposes of preventing or defending against a lawsuit. A provider who orders testing with no therapeutic value commits insurance fraud, violates Oregon law, and ignores the first rule of medical ethics to do no harm. The doctor who orders unnecessary tests puts the patient at risk by subjecting the patient to an unnecessary medical procedure.  And legislators think that Oregon doctors routinely order unnecessary tests, committing Medicare or insurance fraud and putting patients at risk because what? To keep insurance premiums lower? Really?

In the same opinion piece there was a second solution to “the problem.” There is a reason for the quotes: No one has ever identified the problem. Even for lack of a problem, some Oregon legislators seek to impose a two-tier justice system.  Under the plan that is a solution in search of a problem, the two-tier system would mean two levels of justice. The first tier is reserved for individuals with private insurance. The second tier is for patients on the Oregon Health Plan (OHP).

The new legislation would strip OHP patients a basic constitutional right to trial by jury and instead and would limit or cap how much OHP patients can sue for when they are injured due to negligent, substandard medical care. That’s right, under the solution to the non-problem OHP patients claims would be limited even when a provider gives care that is proven to be negligent.

The legislators pushing this agenda presumably are doing it in the name of lower doctor malpractice premiums. What they are not saying is that this solution to non-problem has been tried in other states. The result: No noticeable effect on doctor liability insurance premiums.

Under this emerging plan, if you have the good fortune to have your own insurance, you would be able to hold a negligent care provider accountable for substandard or negligent care. If a surgeon mistakenly amputates the wrong leg and you are on OHP, the two-tier system of justice would limit your access to justice, no matter how egregious the negligence, no matter how high your lifetime medical costs, no matter your life situation.  And this limit would take the form of a fixed limitation set by the Oregon Legislature. Because those who believe that their solution is necessary are also dead certain that the Oregon Legislature is better able to set damages in all cases than a jury that decides each case on the evidence.

It’s time that the political agenda of the few take a back seat to patient safety. It is time to make certain that health care transformation puts patient safety first.

Twitter from the jury box in Brooklyn

My sleepy Monday started with full-on Twitter commentary emanating from a courtroom in Brooklyn. It seems that Ryan J. Davis (@RyanNewYork), a Brooklyn social media-active guy had gotten pulled into court for jury duty.

Mr. Davis was live-tweeting voir dire–AKA jury selection–from the court room. That’s to say, he was broadcasting his observations on Twitter while sitting on a case. He explained:

Ryan J. Davis

@RyanNewYork Ryan J. Davis

“Nobody had told me not to tweet, everyone can see me clearly on my phone.”

Some of his tweets were amusing and harmless, but at least a few crossed the line, including one regarding the merits:

Ryan J. Davis

@RyanNewYork Ryan J. Davis
“Apparently the woman suing the nursing home has been in like 6 accidents and is always suing. Raises some flags.”

And then there was this somewhat ominous appraisal of one party’s attorney:

Ryan J. Davis

@RyanNewYork Ryan J. Davis

“Plaintiff’s attorney said “you won’t see me on any late night tv ads'” I don’t believe him.”

Ryan, being a skilled social media user, quickly saw that a small group of trial lawyers were talking about what he was doing. He was eventually told by the judge that he should not be posting on Twitter, and he wondered whether one of us had complained to the judge.

Through the limited space of Twitter posts, I explained that I had not and promised to elaborate on the complicated problems of jurors and social media.

So now we’re caught up, and Ryan this is for you.

Our civil justice system stands and falls on the jury and the integrity of the process. The injured woman sought access to justice because she believed that the nursing home should be held accountable for maintaining its facility in a way that was safe for those entering the business. Whether she is right or wrong, injured or not, it is up to the jury selected to hear the evidence and render a verdict. My worry is that Twitter and social media disrupt that process.

You engaged in the very human process of forming impressions on things that mattered (the woman’s credibility based upon someone’s claim that she had made prior claims) the credibility of her counsel (based upon his appearance and conduct). You did that without the benefit of actual evidence.

I imagine that happens to many potential jurors, so you’re still in an unremarkable position. But then those are broadcast to tens of thousands of people who follow you and beyond. Until earlier today, I did not follow you; I only picked up on the stream because someone flagged it for me.

So we’ve taken the initial impressions that aren’t based on evidence and broadcast them outward from the courtroom. I imagine some of your 30,000+ followers responded, retweeted, etc. and next thing you know the merits of a case in Brooklyn are grist for the social media mill.

Now if it seems like I’m picking on Ryan, that’s not my intention. Assuming Ryan accurately heard all and correctly tweeted the lack of instructions regarding use of Twitter, the problem is upstream with the court and counsel. But it is a problem.

It goes back to the foundation of the civil justice system–the jury. The parties need to know that their case will be tried on evidence in the courtroom. Put another way, if I am trying that case, I know how to put on a case, challenge through cross-examination witnesses who are adverse, and analyze and argue the evidence. But I can’t argue with information and influence that enters the jury room through Twitter and other social media.

Some in the social media world may say, “Tough luck, pal. This is the new world; get used to it.” To which I say, “Not without a fight.” Because the civil justice system is what levels the playing field between oligarchs, corporations and consumers. Do you have any doubt about a large, institutional corporate nursing home’s chain ability to influence via social media jurors who are willing to listen during trial? Do we doubt for a moment the power of protected corporate interests to exploit these channels?

So at the risk of sounding pompous (or worse), we need to figure out how to divorce social media from the jury box. To do otherwise is a loss for consumers who count on the integrity of the civil justice system as a uniquely American means of leveling the playing field between the oligarchs and the rest of us.

Ryan, if you catch this, thanks for the teachable moment. Hope that I’ve explained my concerns and the stakes adequately. Happy to discuss in detail if this is of further interest.

David

 

 

A modest proposal: Close your Umpqua Bank account

Great coverage here in today’s Oregonian by Brent Hunsberger regarding Umpqua Bank’s decision to cram mandatory arbitration down the throats of Umpqua customers. If you’re an Umpqua Bank customer, you might want to seriously consider moving your funds to a credit union.

By way of background, the U.S. Supreme Court decision last year in AT&T Mobility v. Concepcion touched off a race to the bottom. The Court gave corporations great power to require customers to take any disputes to arbitration, while banning class actions.

The Court fell for the old Lucy, Charlie Brown and the football argument that arbitration is cheaper, easier and better for consumers. Arbitration is none of those things to consumers–especially in small consumer cases. In those cases in which the amount at stake might be $20-200, arbitration filing fees, hearing fees and arbitrator payment fees effectively bar individual consumers from pursuing their claims.

When the likes of Umpqua Bank and ATT Mobility engage in small-dollar rip offs of many consumers, they earn large amounts of money. To put it concretely, if a bank illegally charges five dollars each year to a million customers, it earns $5 million per year in illegal profits. In the past, consumer lawyers have stopped that nickel and diming by pursuing class actions. If a class of a million consumers collects $5 per consumer plus attorney fees and costs, does anyone think the bank will continue the illegal practice?

Banks–and those who represent them–dislike class actions. They settled on a simple strategy. Ban class actions and require consumers to go to arbitration. Ending consumer class actions is a bit like filling the slop pit for a bunch of hungry swine. They’ll be all over that deal.

Once the Supreme Court decided ATT Mobility v. Concepcion, banks, cell phone providers, credit card companies–hell, almost any big business that sells things or services under a written contract–all rushed in for the feeding frenzy. So I guess it is no surprise that Umpqua wants to get in on the action.

So where are consumers in this? If you care about this issue and you are an Umpqua customer, the best response is to vote with your feet. Move it to a consumer-friendly credit union. Because if enough Umpqua customers move, I’m guessing they will get a little nervous. And if a lot of Umpqua customers move, I’m thinking they might get a lot of nervous.

So do it if you can. If they can’t treat us better than slops in a trough, seems to me they don’t deserve our business.

Sen. Santorum and the hyporcisy of damage caps

I’ve heard so much about the Santorum surge and how he is a man of principle–a values candidate, a different kind of politician.

Senator Santorum has been part of the echo chamber for caps on damages in medical injury lawsuits. He hits all the rhetoric about how caps are necessary because of frivolous lawsuits, rising health care costs, etc. According to Senator Santorum, Congress knows better than a jury the value of all patient injury cases, and no patient should ever recover more than $250,000 in non-economic harms when the defendant is a doctor or a hospital.

Yes, that includes the drunken doctor botching a surgery, sex abusers in the exam room, and hospitals that dump patients on the streets. Never more than $250,000 because Senator Santorum and Congress know better than a jury.

So imagine my surprise when a colleague in New York, Andy Barovick (@AndyBarovick), posted a link on Twitter to a news report about Senator Santorum’s wife’s malpractice claim against her chiropractor in which she sought $500,000 in non-economic harms. For those playing at home, that’s twice the amount of the cap Senator Santorum and Congress want to impose on the rest of us.

Here’s the corrected link to the news report (second video)Well worth watching.

Senator, On the off chance that you or your staff are reading this: Shame on you.

Update 7 Jan 2012: Law blogger, Eric Turkewitz, New York Personal Injury Law Blog, takes a different approach in defense of Senator Santorum here. While he makes a good point that Senator Santorum is not responsible for his wife’s choices, he misses the mark. Senator Santorum participated in the case, testifying as a damages witness. In the linked interview (above), Senator Santorum claims that the verdict included a substantial amount of economic damages that would not be subject to the cap. The news report debunks that excuse and lie. At bottom, Senator Santorum knows from personal experience that the proposed cap is wrong because one size justice does not fit all. We need to trust juries to do what is right and not put in Congress’s hands the ability to determine damages in all cases.

Oregonian on BP consumer fraud class action

The Oregonian picked up the filing of the BP class action. Their report is here on OregonLive. More on the case–including a copy of the initial complaint (pdf)–is here. A few clarifications:

1. The case covers only debit card purchases of gasoline at Oregon ARCO and AM/PM minimarket stations.

2. Under Oregon law, we must give defendants 30 days’ notice and allow them the opportunity to fix the harm that they have caused. If they do not do so within the time, we may seek money damages for the class. We will amend to seek damages for the proposed class, unless BP wants to make things right quickly.

3. If you have questions or stories you would like to share, please use this contact information to give us a shout. (We’re a small outfit,  so it may take us a while to get back to you.)

BP faces Oregon consumer fraud class action

You pull into one of BP’s Oregon ARCO or AM?PM stations, and fill up with gas. The street signs tells you that gas costs a specific amount; maybe $3.50 per gallon. BP’s ARCO and AM-PM advertise some of the lowest gas prices in Oregon. At the pump, the price per gallon matches the sign you saw from the road.

So maybe you buy five gallons. But when you pay with your debit card, you’re assessed a debit card charge of $.35 or .45. So the price per gallon just went up seven to nine cents per gallon over the amount advertised.

BP markets ARCO gas as lower cost. The debit card fee does more than just hurt consumers. It also puts honest competitors at a disadvantage.

Oregon law is clear. Street signs advertising gas prices are supposed to be truthful. The prices charged at the pump are supposed to be the prices that Oregon consumers actually pay. Gas stations have to disclose add-on charges or conditions on their prices.

Oregon BP ARCO and AM PM mini-markets are not doing it. They’re violating Oregon law with every debit card charge.

Yes, it’s only a small charge. But lots of small charges add up to a lot of money. And BP is a master at collecting a lot of money.

Somewhere along the way, things went wrong. And somehow BP and its ilk decided that they were entitled to ignore state law and charge illegal add-on charges. For consumers, this nickel and diming amounts to a series of bites out of us and our bank accounts. It’s dishonest.  To my way of thinking, the undisclosed add-on is a form of corporate corruption.

Fortunately, Oregon’s Unlawful Trade Practices Act provides a means of stopping this type of behavior. And yes, we filed the consumer fraud class action this week against BP because Oregon consumers deserve better. For those interested here is a pdf version of the complaint: Complaint Scharfstein v BP

One of the things about our commitment to handling consumer fraud class actions is that there never seems to be shortage of work for me and my law firm. Consumer fraud class actions are challenging cases, but there is something satisfying about being part of a small group of consumer lawyers willing to stand up against predation by the likes of BP. That’s why we are working late into the waning hours of 2011.

I am pleased to be joined on the case by my friend and frequent collaborator, Oregon consumer attorney Tim Quenelle. Tim and I handled the Comcast late fee class action together. We make a good team.

As with all of our major impact and consumer fraud class actions, I imagine this will be a long and hard-fought case. So this is how we close out 2011 and roll into 2012. We’ll report on it from time-to-time here. Feel free to check back for updates.

Also, if you have been bitten by the BP debit card charge in Oregon, please feel free to let us know via comment or through contact. We would love to hear your story.