Update: Consumer fraud class action against Career Education Corp and Western Culinary

This is a longer update on our case against Career Education Corp. and Western Culinary Institute/Le Cordon Bleu Portland. It’s an update for those following the case, including members of the class.

Brian Campf and I were back in court Friday. Judge Baldwin issued a number of rulings from the bench.  As well, Career Education Corp. defendants are trying to appeal Judge Baldwin’s previous decision denying their motion to compel arbitration of the claims of roughly half of the class. Let’s take these dense things one at a time.

1) The Friday motions and rulings: Judge Baldwin heard and decided three motions on Friday. First, he granted in part our motion to compel production of discovery from an investigation report of Career Education Corp placement practices that had been disclosed earlier. This is a win for the class. We’re looking forward to reviewing this information.

The class lost two motions filed by Career Education Corp. Judge Baldwin granted in part a motion to allow the Career Education to do a survey of class members by mailing a questionnaire to members of the class. We opposed only because we believe that the form of the survey was confusing and potentially misleading. Judge Baldwin limited the questionnaire but has allowed them to go forward. While we disagree with Judge Baldwin’s ruling, we respect his authority and will cooperate with the process so that we can move forward to trial.

Judge Baldwin also granted a motion that removes approximately 300 people from the class. The 300 or so stopped attending and did not withdraw and thus were dismissed for attendance or academic reasons. The Court concluded that they should not be part of the class. We argued against the motion. While we disagree with this ruling, we recognize that Judge Baldwin has authority to make the choices that he made. As part of the process, those who are no longer part of the class will be sent notice informing them that they are out.

2) The new appeal: We learned on Friday that the Career Education defendants are appealing Judge Baldwin’s prior ruling denying their motion to move approximately half of the class into individual one-case-at-a-time arbitration. We won that argument and believe that Judge Baldwin correctly denied their motion. At the same time, the Career Education defendants sought to stay proceedings in the trial court while the appeal goes on. Appeals can take years, so it’s pretty apparent that they are simply trying to avoid our January trial date.

We’re in the process of moving to dismiss the appeal. We believe that they are not allowed to appeal the order in question. This is a technical, dry area of the law involving concepts of procedure and jurisdiction. We remain optimistic that the appeal will be dismissed and that we will stay on schedule. But even if the appeal goes forward, we will fight there too. So the bottom line on this is know that we are continuing forward, that we remain confident, and that Career Education Corp. can hire more lawyers, file more motions, and try to delay more. But they will not shake us off this case.

3) Parting thoughts: One of the things about the cases that we handle is that I have the luxury of choice. I will not take on a case unless I believe that it is right, and I will not pursue a case unless I believe it is important. But once we commit, we dig in. Stonewalling only makes us more determined. And so we dig deeper. And so we go on.

I’ll update when we have more news. By the way, we do more frequent and shorter updates on our major cases on Facebook. You can get that news if you are a Facebook user by liking us here. When I post on this blog, I generally leave a note on the FB page, so it’s also an easy way to keep up with this blog. As well, you can always follow me on Twitter @DavidSug, though that’s more of a personal account. I don’t always self-censor, so it’s definitely not for everyone.

Thanks for your continuing interest in this case and our work. We’ll let you know when we know more.

David

From the trenches of the justice system: Thoughts on Oregon elections

It happens every election cycle that non-law friends and others may be casting about on races on which they may not be familiar. Sometimes I weigh in–especially when bad ballot measures or obvious choices make me speak.

I wear my biases on my sleeve. I represent consumers in hard, complicated cases in the civil justice system. I am the guy who jumps in to represent Oregon veterans’ on their toxic injury claims against KBR. Ditto when Comcast illegally bills late fees or when trade schools sell students a bill of goods and a sack of debts.

There are a few races that affect Oregon that may not be evident to a lot of voters. I’m leaving out the races on which I have no expertise. Portland mayor, for example, is a toss up to me, but I don’t claim any particular insight, so no one should care what I think.

Judicial races, the Attorney General race and Secretary of State are areas that impact the justice system in ways that may not be apparent. So for readers, friends, and web surfers, here is my thinking.

Oregon Supreme Court: Position 3 is a contested race between three highly-qualified people. Judge Sercombe sits on the Court of Appeals. Nena Cook is an attorney in private practice. Judge Richard Baldwin sits as a trial judge in Multnomah County. A disclaimer. All are qualified. All bring integrity and excellent skills to the race.

That said, Dick Baldwin is the clear pick for those of us concerned about individual access to justice, consumer protection and straight out common sense.

I have appeared in front of Judge Baldwin as an attorney for years. I have won issues in front of him, and I have lost them as well. That is beside the point. His demeanor and commitment to the justice system never seem to waiver. I’ve watched him sentence criminal offenders. I’ve seen him give measured and careful consideration to the plight of real people. That’s about all you can ask for in a judge.

Before he went on the bench, Judge Baldwin worked as a legal aid lawyer, representing people of modest means needing access to the justice system. That seems to color his work on the trial court bench. What he brings to the Supreme Court is a lot of experience in the trenches as a trial judge and legal aid lawyer. The Supreme Court needs former trial judges to balance those from other backgrounds.

The other contested judicial race is Court of Appeals Position 6. I know both Tim Volpert and Jim Egan. I do not know Allan Arlow, the third candidate. Of Tim and Jim, I can say both are capable, honest and good people. But here again, I think the obvious choice is my old friend Jim Egan, a trial judge from Linn County. The trial judge experience is important here again. So is a non-Portland perspective, as he comes from Linn County. Jim is another common sense guy. Before he went on the bench he represented injured people and did so with clarity and compassion. Like Dick Baldwin, he has great real-life experience that translates well on the bench.

Attorney General The other heavy race is Attorney General. Both Ellen Rosenblum and Dwight Holton are highly qualified. Both have strengths, and I think we will be fine no matter who wins. I like Dwight’s energy a lot. That said, I am voting for Ellen Rosenblum.

The biggest is that Dwight’s commitment to Measure 11 (mandatory minimum sentences) is a huge deal breaker for me.

The advocates of mandatory sentences mean well. They truly believe that locking up criminals for long periods of time make us safer. For complicated reasons, I do not believe that. The short version: addiction, domestic violence, criminal system dysfunction cloud the penal model. The advocates of mandatory minimum sentences work on an oversimplified version of the problems.

I can’t sit silently while we sacrifice the State treasury for prison building at the expense of schools, roads and healthcare. It’s taken me a while to make up my mind on this race. To his credit Dwight Holton will do great things if he gets the nod, so I’m not worrying on this one. Ellen’s comments about mandatory sentencing (vaguely: need to rethink), medical marijuana (enforcement not a priority) or the death penalty (opposed personally, but as a judge handed it down) reflect views that I share, but I’m not sure whether she will push and, even if she does, how much room there is for reform. So worst case is that we remain at status quo with either of them.

The other question and priority is straightening out the Oregon Department of Justice. I’m not sure who is better suited for an overdue housecleaning, but it seems like we need a real adult to lead DOJ from its current problems to the pro-justice entity it should be.This may well be a toss-up. I can’t tell.

Secretary of State. This is a no-brainer. Kate Brown. Okay, I’ll admit that I’ve been a Kate fan since we were in law school together. Still, she’s the real deal, and we’re lucky to have her overseeing elections, ballot measures and the like. We need her. Enough said.

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.