I’m not a flag waver. Never have been. Like the vast majority of Americans, I have treated Veterans Day as one of those days in the fall that I might have off from work. No thought to the meaning; no thought to the sacrifices that lie beneath.
That changed in a profound way last year when I agreed to help sick soldiers and vets from the Oregon Army National Guard’s 1/162. These men were poisoned by exposures to sodium dichromate while providing security to KBR and Halliburton employees. They came back hurt and sick.
In working on their legal team, I’ve come to learn about the soldiers and vets and their families. Their sacrifices are so great. They served for all the right reasons. And now they are wounded and hurting.
Seems to me that every vet deserves our appreciation today. For those who have come back from service broken and hurt, we the people owe them. And for those who are broken and hurt because a greedy contractor violated safety rules in pursuit of profits, well, let’s just say that I’m doing my best to make sure your day of reckoning comes.
The New York Times reports here on the Kaplan schools woes. The Times goes to great lengths to note that its competitor, The Washington Post, owns Kaplan. I suppose some might see it as a dig and turn of the knife, but it strikes me as appropriate because it helps explain how the owners of the Post lobby against trade school regulation.
The article focused on the Kaplan criminal justice degree program. I was struck by this quote from a former Kaplan insider:
“In reality *** , graduates would often get the same $8 to $9-an-hour security guard jobs they could have had without Kaplan training.”
It sounds awfully familiar, as it is the same thing we’ve seen repeatedly in our consumer class action against Western Culinary Institute/Le Cordon Bleu College of Culinary Arts-Portland. There is so much more about it that is insidious, including absorbing federal dollars that would otherwise go to student aid.
The for-profits spend a boatload of money on marketing and advertising. That money comes from tuition, and tuition dollars come straight out of the treasury.
It’s a lousy deal.
We’re still pushing forward on the culinary school case. Nice to see that responsible journalists are reporting on abusive trade schools. As for the Washington Post, you have to wonder.
Remember the terms and conditions or subscriber agreement or other agreement you signed or accepted when you signed up for cell service, cable TV, a bank account, a credit card or just about any of the other transactions consumers enter everyday? If you’re like 99.9 percent of all consumers, you don’t remember it all. Chances are you didn’t read the long and technical terms that appear as part of the transaction. You wanted to buy the goods, so you signed.
It’s very likely that the terms included a mandatory arbitration clause. The case focuses on whether that mandatory arbitration can prohibit class actions for consumers.
Some consumer problems involve big businesses engaging in small rip offs. We all know that a $10 rip off simply isn’t worth pursuing when doing so is expensive, timely and risky. But what if that small rip off of $10 applies to all customers, say a million people? The business pockets $10 million illegally.
When you’re dealing with the nickel and dime consumer rip off, an individual consumer simply can’t obtain relief. One way consumers can fight back is through the consumer class action. The individual can’t bring a $10 case, but a class action allows consumers to chase the $10 million in illegally pocketed money, when a million consumers lose $10 each.
AT&T Mobility and their friends, Comcast and U.S. Chamber of Commerce, want that to change. They want a rule that allows companies to ban class actions and require you to take your case to arbitration as an individual. So that $10 rip off will never be remedied. And AT&T Mobility and its friends will be able to pocket and keep millions by only taking a small amount from each consumer.
The stakes only went up with the changes in Congress last week. If the Supreme Court incorrectly interprets a statute, like the Federal Arbitration Act, Congress can amend the statute to correct the error. Sadly, consumers lost some of their best friends in Congress in the last election. So we should not count on Congress to bail out consumers if the Supreme Court sides with big business.
One of my favorite movies, The Life of Brian, ends with a great song, “Always Look on the Bright Side of Life.”
For now, I’m simply whistling that tune and hoping that things go okay. Guess we’ll deal with the carnage if the Court gives the Chamber of Commerce the victory it so badly wants.
Yesterday, we filed an updated complaint in Bixby v. KBR. Here’s a copy Bixby Fourth amended complaint. The new complaint adds Halliburton defendants.
For those interested, here’s what happened. The legal team representing the sick veterans made Freedom of Information Act requests to the U.S. Army. It took a long time to get the requested documents, but we did. Once we reviewed them, we learned that Halliburton had been at the site pumping water at Qarmat Ali.
Additional documents produced at the same time suggest that Halliburton and KBR were actually bringing sodium dichromate to Qarmat Ali and using it for water pumping. That would be a big additional problem for them.
There is much more to the update, but I wanted to post this for those who are interested.
Today’s Oregonian includes this thoughtful editorial about what is at stake in our on-going case against KBR for Oregon National Guard Soldiers. I have to agree with the editorial board that what is at issue is more than whether and how KBR will be required to repair the damage done. In the case, we can only recover money. That money can only be used to fix what can be fixed, to help where money can provide help, and to make up for all the losses that cannot be fixed or solved with help.
Still the case is wider and deeper and raises questions about war and contracting and profits.
The latest round of revelations indicate that the government agreed to indemnify KBR for financial losses it might incur as a result of its misconduct in performing work under the Project RIO contract. If that sounds like gobbledygook, maybe it’s easier to explain this way. In addition to the multi-billion dollar payday, KBR wanted and got a taxpayer bailout for whatever harms might be caused by its misconduct.
The legal team representing the soldiers focuses on their needs. We have a court room and a trial. We are traveling around the world to find evidence and get our witnesses. We are digging through tens of thousands of pages of documents. We hold the line and fight KBR when it seeks immunity or special treatment. At trial we will put on the evidence, make our arguments and then leave it to the jury to deliberate and decide.
Meanwhile, it is good that Oregonians are asking these questions. Better still, our journalists and thinkers and our Congressional delegation have their teeth into their respective parts of this tragedy. That is good as well, as no one wants our vets to go quietly into the night.
Addendum (2 Sept 2010): Here is a video report on KGW8 News that ran yesterday. Nice to see that Rep. Blumenauer is on this. For those who say Congress does nothing, you better believe that the Oregon vets appreciate the efforts made by Sen. Wyden, Sen. Merkley, Rep. Blumenauer, and Rep. Schrader.
Rep. Earl Blumenauer (D. Or.) has done his part to get to the bottom of the sad story of Oregon National Guard soldiers exposed to toxic chemicals at the KBR Qarmat Ali facility. Rep. Blumenauer previously asked the Secretary of Defense to provide information about the agreements–both for KBR and other contractors.
In today’s Oregonian, Julie Sullivan reports here that the Army has refused to produce the information because it remains confidential. The response from the Army is a bit perplexing. The Project RIO contract, which was declassified, contains an indemnification provision. So I can’t help but wonder what is classified. Maybe there are other documents the Army is withholding?
It’s all a bit curious.
The soldiers appreciate Rep. Blumenauer’s efforts. He is helping to get to the bottom of things. He’s raising important questions about government contracts, and contractors and oversight.
For my part, I remain focused on KBR. That’s my job. Lots of work ahead to prepare for trial. But we’re on it.
The Government Accounting Office released its report today, GAO Report For Profit Colleges (pdf), highlighting a number of abuses by for-profit trade schools. The GAO engaged in undercover testing to ferret out the fraud and abuse in for-profit admissions and lending. Pretty scary stuff.
The GAO Report notes that approximately 2,000 for-profit colleges received federal funds of $24 billion in the 2008-2009 school year. At all 15 of the for-profit schools surveyed by GAO, admissions representatives made deceptive and questionable statements about graduation, employment and financial aid.
I’ve been laboring in a trade school class action against Career Education Corp. and Western Culinary Institute, which is now known as Le Cordon Bleu College of Culinary Arts in Portland. I’m not particularly surprised by the GAO findings. Maybe the GAO report will spur Congress to take a hard look at these issues. That would be a good thing because we have sentenced a generation of kids to a lifetime of debt.
My view is that the current crisis stems from a nasty mix of deregulation and privatization. Give for-profit schools nearly boundless access to federal money. At the same time, do not regulate their conduct. Those were the first steps to sentencing a generation to a lifetime of debt.
Question: Will we be able to fix this thing, or are we just content to continue fiddling while Rome burns?
Mike Doyle and I were in court this morning fighting off more KBR motions. The KBR defendants asked Judge Papak to prohibit us from taking discovery because–according to KBR–their motion to dismiss for lack of subject matter jurisdiction required no discovery. They also asked Judge Papak to prohibit discovery until the soldiers proved their levels of exposure–a so-called “Lone Pine” order. Judge Papak ruled that we can get our discovery to respond to the next KBR motion to dismiss. He is allowing us full discovery from U.S. Army witnesses–subject, of course, to Army regulations. He denied the KBR motion for an order requiring us to prove the cause and existence of soldiers’ injuries before we could get discovery. It’s a win for the Oregon soldiers.
Also from today, here’s a link to a story in today’s Oregonian. I think I can speak for all the soldiers when I express my admiration for The Oregonian‘s Julie Sullivan. Her tenacity in refusing to let this story die inspires me. Telling their story is a powerful thing.
Our next hearing is scheduled for July 12 at 10:00 a.m. At that time, Judge Papak will hear KBR’s next motion to dismiss. Meantime, we’ll be doing discovery and filing our opposition.
My good friend and frequent collaborator, Oregon trial lawyer extraordinaire Robert Neuberger, tells me that every big case needs a theme song. I’ve got ours for this case, courtesy of Tom Petty: “Stand My Ground.”
This is an update on our case, Bixby v. KBR, U.S. District Court Case No. CV 09-632-PK (D. Or.). In the case, soldiers serving in the Oregon National Guard claim that KBR defendants are responsible for their exposures to hexavalent chromium, a cancer-causing toxic chemical. The soldiers claim that KBR knew or should have known that the Qarmat Ali site was contaminated. They claim that KBR officials knowingly sent the soldiers into harm’s way when KBR repeatedly requested security at the site.
The KBR defendants moved to dismiss the case, arguing that the Oregon court lacked jurisdiction over them. Today, Judge Papak denied the motions. For those interested, I’ve uploaded (pdf) his opinion: 44 – Opinion and Order re def’s motion to dismiss. It’s fairly technical. I wouldn’t recommend it unless you’re interested in the nuances of personal jurisdiction.
Judge Papak did not pass on the merits of the case. That is for the jury. Rather, he simply decided that the Oregon soldiers will have their day in court in Oregon. Judge Papak ruled based upon case law (precedent) from the Ninth Circuit setting out and applying the effects test.
It’s a particularly important ruling because there was a major risk that if he dismissed the case, no court would have the authority to hear the case against all of the defendants. I am pleased with the ruling, though of course there is far to go.
For those of us in the trenches representing consumers in class actions, it’s always nice to find good information resources in the law blog world. I’ve stopped by the Complex Litigator a few times. I only caught this post on a consumer class against Wells Fargo because of a Twitter post alerting me to it.
The case, Gutierrez v. Wells Fargo Co., 2010 WL 1233810, 2010 U.S. Dist. Lexis 29082 (N.D. Cal. Mar. 26, 2010), arises out of allegedly illegal banking practices that led to improper assessment of overdraft fees. The federal court certified a class, and Wells Fargo filed a motion to decertify the class.
Digression: In representing consumers in class action cases, I privately think of motions to decertify as “Waah! motions,” as they often stand on the same arguments that didn’t succeed, and they frequently employ heated prose to attempt to change the Court’s mind on a decision previously rendered. In my experience, they are often an expensive waste of time.
Complex Litigator points out that the court found the small amounts at stake to be important in finding a class action would be superior. This was true when the court certified the class and remained true in the decertification motion. The small-stake problem is an important concept that sometimes gets lost in the heated U.S. Chamber of Commerce talking-point criticisms of class actions.
The nickel and diming effect is one that I’ve written about before, but the short version is that consumer class actions provide a means of stopping illegal practices that take small amounts from a large number of people. A corporation that illegally takes a few bucks from a million people makes a few million. Handsome profit if it’s not stopped.
The more interesting part of the CL blog post quotes the court. As a side note, I’m a bit confused, as it appears to be a quote from an earlier opinion in the case, or maybe I’m missing something. I don’t see the quoted language in the cited Lexis opinion. Likely, it’s my confusion due to insufficient coffee. Nevertheless, I’ll take as a given that CL correctly quotes the court.
Wells Fargo sought decertification because–it argued–the class did a poor job of modeling class-wide damages. As CL explains,
“It is interesting that the weaknesses in defendant’s transaction data was used by the court to nullify challenges to the methodology used by plaintiffs’ expert to assess damages for the class. The court found that the same flaws in data would impact an individual’s attempt to prove damages. The opinion contains a detailed discussion, with an example, of the allged (sic) practices and the damage extrapolation methodology used by plaintiffs’ expert.”
The underlying data problem is one that I see from time-to-time in consumer class actions. Defendants often resist production of class membership and damage data in large consumer class actions. And once they produce it , they sometimes go so far as to attack the class’s damages model because of the insufficient underlying data. That’s one of those ironic arguments that I love to see defendants make.
Anyway, kudos to Complex Litigator for pointing out the opinion. Interesting reading for class action practitioners, especially those who handle consumer class actions.