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.

KBR gets slapped down by National Arbitration Forum over domain name dispute

I always enjoy a good smack down. Especially when it is well-deserved. Today, the National Arbitration Forum issued its decision in KBR, Inc. v. Jeffery L. Raizner, Claim Number FA1110001413439.  For those playing along at home, here is a pdf copy National Arbitration Forum Decision on kbrlitigation (2)

Backstory and full disclosure: Jeff Raizner is a partner in the Doyle Raizner firm. Jeff and his partner Mike Doyle are pursuing claims for sick veterans who claim to have been exposed to sodium dichromate at the Qarmat Ali Water Treatment Plant in Iraq in 2003. I am co-counsel for the Oregon vets in Bixby v. KBR, a case pending here in Portland. In connection with the litigation, Jeff registered an active web page, kbrlitigation.com.

The dispute: KBR rattled sabers and ultimately disputed the registration through NAF. KBR sought to take the domain name from Jeff, claiming that kbrlitigation.com infringed on its mark. The panel ultimately found that the site represented a nominative fair use of KBR’s mark. Putting it into English, this translates to roughly: “No, KBR. No. You do  not get to use the legal system to censor those who dare to criticize your misconduct. Go away and darken our doors no more.” (Note: This is a rough translation. I am, after all, not fluent in the odd language of intellectual property.)

I can’t help but wonder how much KBR spent on this little escapade. I am a simple in-the-trenches trial lawyer–the world of intellectual property is fairly alien to me. To use a technical legal term, this seemed like a no-brainer. Guess KBR has extra money to spend and wants to do whatever it can to stop trial lawyers from communicating with sick vets. Total failure. But worse, a public one.

So congrats to Jeff and Mike and their IP legal team. It’s a nice and well-deserved win.

Honda civic hybrid class action settlement faces social media backlash

It sounds like a lousy class action settlement, though it is possible that it is not as bad as it sounds. This report in the LA Times, about a pending class action settlement on behalf of consumers who bought the Honda Civic Hybrid, raises some eyebrows.

I don’t know anything about the case or the settlement, but a class action for car buyers that gives class members a coupon for purchases on future cars is almost always a problem. If the problem isn’t apparent, here is a stupid question: How often do you buy a new car? Consumers also get cash, but it’s apparently as low as $100 per purchaser.

Lest anyone accuse me of being totally one-sided, it’s worth noting that there are times when cases don’t work for one reason or another, and a modest settlement is appropriate. I doubt this is how the case went because the attorneys for the consumers are getting a large fee, according to the same report. Even so, I am not licensed in California, and I have no information on the case. I haven’t seen the notice or the settlement agreement, so I’m not very informed.

So all this background leads me to Heather Peters, one of the consumers who is not happy with the settlement. Through her website, Ms. Peters is campaigning to get the word out to consumers who are affected by the settlement. She’s also on Twitter here.

Props to Ms. Peters for a few reasons. First, bad class action settlements are a problem. While I still don’t know enough to know about this one, it smells bad from here. More important, Ms. Peters is apparently providing consumers with information about alternatives, including opting out and small claims.

I’m intrigued by Ms. Peters’ campaign. I hope to learn more about the merits of the settlement and whether it’s as bad as it sounds. My guess is that her pioneering use of social media may become a model for future problem class action settlements.

Update: My Twitter pal, George Wallace, aka @foolintheforest, provides helpful California law context here at his Declarations and Exclusions blog. Besides being endlessly amusing on Twitter, George brings his A-game to the world of California insurance law and civil law issues beyond. In the linked post, George asks some compelling questions about things lurking in the shadows of the LA Times report.

 

 

For-profit colleges apparently prefer lawsuits to increased regulation

When the Obama administration announced stricter regulations on for-profit trade schools, the lucrative industry went on the offensive, hiring the best lobbyists money could buy. “Best,” of course, means most effective and should not be confused with doing what is right.

The heavy investment paid off, as this report in The New York Times explains. The for-profit trade school industry succeeded in diluting the regulations that would have set real standards for these programs.

Consumer advocates should be outraged. But of course, the U.S. Supreme Court believes that corporations are people, too, at least when it comes to spending gobs of money on political advocacy. So outrage is probably wasted. Instead, I’m going with cynicism.

See, there is a certain level of irony here. Strong consumer protection regulations set standards. When businesses follow strong rules, consumers can purchase what businesses sell. Businesses make money. The market economy works.

But when there are thin rules or no rules at all, temptation and greed lead businesses down the wrong path. This era of deregulation has created a consumer fraud monster. Banking practices, mortgage scams, and trade school fraud are not coincidence. They are the result of the triumph of deregulation.

When corporate actors go too far and rip off too many for too much, those of us who dare to represent consumers can fight back. But that seems like a lousy way for our system to run. I hear a lot of carping from certain politicians about lawsuits. But isn’t that what corporations choose when they fight meaningful regulations?

They don’t, really, as many members of the plutocracy believe they are entitled to both no regulation and no exposure to lawsuits for misconduct. I only hope there is a special place in Hell for those miscreants.

I’m spending my Sunday preparing for more depositions in our ongoing trade school fraud case against Western Culinary Institute/Le Cordon Bleu Portland and its parent, Career Education Corp. My guess is that no real rules means many more of these cases in the future. I suppose I should not complain about regulatory failure because it means more business for me. In reality, I would be just as happy if I never saw another for-profit trade school fraud problem again. That’s clearly not in the cards. So be it.

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

This is a short update for all following our consumer fraud class action against Career Education Corporation and its Portland culinary school, Western Culinary Institute/Le Cordon Bleu Portland.

We’ve been waiting for a ruling from Judge Baldwin on Career Education Corp’s motion to compel arbitration and to dismiss this long-running class action. Judge Baldwin denied the motion, which is another battle won for consumers and members of the class. I am pleased with the ruling, but there is still far to go.

We’re moving now to complete discovery on the merits of the class’s claims. More news as it happens.

 

On Veterans’ Day, let’s hold KBR accountable

So here is what is happening in my law office today, Veteran’s Day, 2011: Kevin Stanger is giving a deposition in Bixby v. KBR, the case in U.S. District Court here in Oregon where veterans dare to call corporate giant KBR to account.

Mr. Stanger is one of the vets sickened by exposure to sodium dichromate at the Qarmat Ali Water Treatment Plant. The Vets dare to demand an accounting and justice from KBR.

In 2003, Mr. Stanger was in the command unit of the Oregon Army National Guard. He was one of the many soldiers who relied on KBR to be straight about the dangers at Qarmat Ali. KBR failed to do its job, and now Mr. Stanger and many of his brothers in arms are sick.

The vets’ depositions are grueling. Each vet sits in our conference room for a day. answering KBR lawyers’ questions under oath. I’ve had to apologize to the guys–it’s a lousy process.

Even so, there is some beauty and irony in Mr. Stanger’s deposition today. Our soldiers swear to defend and protect the United State Constitution when they take their enlistment oaths. When they enlisted, I doubt any of the Qarmat Ali vets thought for a moment that they might be the ones who needed their constitutional rights to trial by jury. Thankfully, that right endures because of each veteran’s commitment to the constitution.

While Mr. Stanger is giving his deposition, I am head-down working on our opposition to KBR’s latest motion to have the case thrown out of court. The Vets’ legal team’s hard work on this Veterans’ Day is all that we can give toward repayment of the vast debt owed to our veterans. It is not enough, of course, but I hope that it is a modest start.

 

Career Education Corporation and the terrible, horrible, no good, very bad day

Last week, Career Education Corporation’s stock took a breathtaking fall. It started with the resignation of Gary McCullough, the CEO. That happened so quickly, he did not even have time to offer the usual walk-the-plank rap that he was leaving to spend more time with his family.

The next day, November 2, the company provided earnings information to investors in their earnings call. The earnings call reportedly included revelations that about an internal  investigation by outside counsel.

It seems that independent counsel reviewed the calculation of placement rates at some of CEC’s schools. CEC revealed that placement rates at some of its schools were improperly calculated. That is when CEC’s stock took its breathtaking fall.

The upshot is that Career Education Corporation is facing serious problems. Or, in the words of a favorite kid’s book, CEC had a terrible, horrible, no good, very bad day. Against this backdrop, we continue to pursue our consumer fraud class action against Career Education Corp. and the Western Culinary Institute/Le Cordon Bleu Portland for former culinary students at the Portland campus. The calculation of placement rates is one of the major issues in our case.

I’ll be interested to see what else comes out from these investigations. Regardless of what else comes out, we’re getting ready to complete depositions and get ready for trial.

Update: NPR did a story two days ago. Access it here

Updated: 9 Nov 2011

Fighting the robber barons: Illegal debt card charges for overdrafts

News today that West Coast Bank reached an agreement with the FDIC relating to its “courtesy coverage” overdraft protection. According to Brent Hunsberger’s report in The Oregonian, the issue was ineffective opt outs. But there is a bigger problem with Oregon banks ordering transactions in a way that triggers a cascade of overdraft charges.

I’m particularly interested in this area and looking at various cases. If you have had multiple overdraft charges assessed by Umpqua Bank, I’m interested in talking to you about the problems.

While it’s good that the FDIC stepped in, I am concerned that they did not fully take care of consumers who were affected by West Coast Bank’s overdraft charges. Still, enforcement is essential. Failing that, those of us who dare to fight the robber barons provide the next best thing.

Feel free to contact me if you have a story about Umpqua or any other Oregon bank that is overcharging on overdraft fees.

David Sugerman