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.

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.

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.)

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.

 

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

ARCO debit card fees–Again?

Oregon readers know about our gasoline rules. In Oregon, there is no self-service. So when you pull up to the pump and ask the attendant to gas it up, you commit to the purchase the minute the gas starts flowing into your tank.

ARCO does not take credit cards. Consumers can pay cash or with debit cards.

Over a decade ago, I did my first consumer class action against ARCO in Oregon. They were charging an undisclosed debit card fee for consumers who paid with debit cards.

After a hard-fought battle, we settled that class action case many years ago. Part of the settlement required ARCO to post debit card fee disclosure signs at the pump. We demanded the fee notices so that consumers would know before committing to the purchase that they were paying an extra charge.

That extra charge is now 45 cents per purchase. So when you buy five gallons worth of gas, it is nine cents per gallon more than the posted price if you pay with a debit card.

That’s right. It appears that ARCO, which is now a subsidiary of Gulf oil spill British Petroleum, is back to nickel and diming consumers. My annoyance knows no bounds…I really dislike nickel and diming consumers.

If you have had a problem with ARCO debit card charges in Oregon, I would appreciate a call or an email so that we can properly analyze and address this problem.

Update: Western Culinary Institute/Le Cordon Bleu Portland and CEC consumer fraud class action

For those tracking this case, two updates worth noting.

1. As noted recently, Western Culinary/LCB Portland and Career Education Corp filed a motion to compel arbitration and to dismiss this case. More info on that motion here. The hearing date on the motion has been changed to October 7, 2011.

2. There have been many media reports on the settlement of California Culinary Academy (CCA) class action. Some have erroneously reported that the settlement includes this case against Western Culinary Institute. Not correct. I am not connected with the CCA case, so I don’t pretend to know what is going on there. But our case has not settled. That is why we are pushing forward toward trial.

Thanks for checking back and for your continuing patience and interest in the case. If you’re a class member, know that our team continues the long fight. Call or email if you have questions.

David

Western Culinary Institute class action update: Defendants seek another dismissal

This is an update on our culinary school consumer fraud class action against Western Culinary Institute, now known as Le Cordon Bleu Portland, and its parent corporation, Career Education Corporation.

A few weeks ago, defendants filed a motion to compel arbitration of Nathan Surrett and Jennifer Adams’ claims and to stay or dismiss the case.

Some background: Nate is the current class representative. The case is being pursued in his name and through his efforts. Before Nate, Jennifer Adams served as the class representative. She had to step down after the Court narrowed the scope of the class in a way that excluded Jennifer. (If that’s not confusing enough, Adams is Jennifer’s married name. She was previously Jennifer Schuster, which is why that name appears on some of the pleadings.)

Anyhow, back in April, the U.S. Supreme Court issued a really significant anti-consumer decision in the case of AT&T Mobility v. Concepcion. The case is bad for consumers because it strengthens big businesses’ ability to take away consumers’ rights to trial by jury through mandatory arbitration.

So four months after that decision, the lawyers for WCI/Le Cordon Bleu Portland/CEC decided to ask the trial court to dismiss our case because Nate and Jennifer were required to arbitrate their claims. Their motion is long and legally complex. It was filed under seal because it uses student records of the two named plaintiffs. That’s a long way of saying I can’t provide a copy.

While their arguments were complicated, there were a number of glaring problems. We filed our response on Friday. Here is a pdf copy: Response to Def Motion to Compel Arb and Dismiss

Fair warning: it’s a technical brief that may not make much sense if you don’t have a law degree and an interest in this very narrow area. The issues are important for this case and for other consumer cases. I’m posting it here for those following this case and, also, for consumer attorneys out there facing post-AT&T Mobility motions to compel arbitration.

I’m pleased with our opposition. Oral argument is scheduled for Friday, September 23 in front of Judge Baldwin. I don’t know whether Judge Baldwin will rule from the bench. We will update you when we know more.

 

Consumer fraud class action update: Western Culinary Institute, Le Cordon Bleu, Career Education Corp.

Late yesterday, Career Education Corp and Western Culinary Institute/Le Cordon Bleu Portland filed a motion to compel arbitration in our consumer fraud class action. More on the case here.

Short version is that three years after we filed the case, after the trial court certified a class action, after class notice went out, and after the opt out period ran, the defendants filed a motion to compel arbitration. The motion will require a lot of work from the class legal team, but of course, that is why we are here.

It’s a bit hard to fathom why the Career Education Corp and its school waited so long to file their motion. Their story is that they could not have won their motion until the U.S. Supreme Court decided AT&T Mobility v. Concepcion. For reasons best left to the briefing, they are so very wrong in a number of ways.

In many places in their brief, they make arguments that remind me of this video:

Inconceivable!

I suppose in the end we are talking about delay. But of course that’s a problem that bites them as hard as it bites the class. They are on the hook for prejudgment interest if we prevail. That means that every day of delay is more interest on the amounts at issue. With approximately 2500 in the class, we are talking about a lot of money.

Career Education Corp and Western Culinary Institute consumer fraud class action: Notice out

We finally moved to the next phase in our Oregon consumer fraud class action against Western Culinary Institute/Le Cordon Bleu Portland and its parent, Career Education Corporation. Class notice went out last week. It took longer than expected because of a few unanticipated changes in the class brought about by the trial court’s rulings.

Here is a link to the class notice website if you have questions about the case. As class counsel, I represent all members of the class. Feel free to call or email us if you have questions about the case–it is part of my job as class counsel to respond.

My co-counsel, Portland attorney Brian Campf, and I have been working on this case since 2008. We are now engaging in merits discovery. That means reviewing thousands of pages of documents and taking depositions of defendants’ employees.

Trial lawyers often dream about trial. This is one of those dream-inducing cases. While we don’t yet have a trial date, I am eager to move us forward. It’s been a long road, and there is far to go. The good news is that last week represents major progress.