This one slipped under my radar. Only the heads up from a colleague alerted me that Providence healthcare system has agreed to a fine for HIPPA violations arising out of the data loss of 2005.

FYI, along with several other lawyers, I represent patients whose unencrypted computerized data was lost when a car burgler stole data from a parked car. The case for money damages is currently pending in the Oregon Court of Appeals.  We filed our opening brief on behalf of the patients, and Providence is due to file its response shortly. After they file their response, we’ll have one more brief, and the Court of Appeals will hear oral argument. I doubt very seriously that we’ll get a decision before 2009.

As for the HIPPA fine, $100,000 seems like a lot on its face, except when you realize that hundreds of thousands of patients were affected by the data loss.  Providence has now settled with both the State of Oregon and the U.S. government. Even so, they are still fighting damage claims brought by patients who seek compensation for their harms and losses.

In the life of the case on behalf of the patients, this is a non-event. We will continue forward.

David Sugerman

The story is coming out that Melvin Weiss, former class action securities lawyer, was sentenced to 30 months and fined $10 million under a plea deal with the U.S. Department of Justice. The Milberg Weiss law firm has been a national presence for years, handling some of the largest securities class actions in U.S. history.

I would be a hypocrite if I failed to write about this and say the obvious. As I’ve noted before, getting rid of the cheaters is critical to a healthy civil justice system. That’s true regardless of which side the cheater operates from. Melvin Weiss did a grave disservice to consumers and investors. I have my doubts that 30 months + $10 million is sufficient, if you think about the harm inflicted. Even so, it’s done.

I imagine that there will be quite the feeeding frenzy on the corruption at the Milberg Weiss firm in the blogosphere,  at the Chamber of Commerce, from the tort reform advocates, and over at FOX news. But let’s remember that the corruption that nurtured Milberg Weiss operated heavily on the investment firms, as well. If that’s not readily apparent, here’s a quick list for the consideration: Bear Stearns, mortgage lending, Enron.

All of that is beside the point. As one who handles class actions, I’m strongly in favor of getting rid of the corrupt. Good news in the end.

David Sugerman

Today’s Sunday Oregonian, addresses this complaint about misrepresentations regarding gas prices. The problem is the hidden credit card or ATM charge. What happens when a gas station posts its prices but fails to tell you–until after you make the purchase–that the price is higher if you pay with a credit card? Or when a gas station adds a courtesy charge or ATM charge without disclosing it at the pump?

Oregon’s Unlawful Trade Practices Act provides a means of addressing this death by a thousand paper cuts rip off. Individuals who succeed in proving an Unlawful Trade Practices Act claim can recover their or $200–whichever is higher–plus attorney fees.  There is even the possibility of seeking additional punitive damages if the practice is really bad. If the practice is wide-spread, consumers can actually pursue the matter as a class action to recover the monies illegally collected.

I’ve actually handled one of these cases before. It arose when Oregon ARCO stations charged an ATM fee. But they didn’t tell you until after you pumped the gas and then went inside to pay. The case, which was a class action, eventually settled.

They’re not big cases, but they’re important because they add up.  For consumers, gas price increases are a a huge economic issue. Another dollar or two as a surcharge is maybe only a little bit, or the equivalent of a paper cut. But consumers are being squeezed from all sides. That single little surcharge is just one more example of the fee-based ripoffs that make consumers poorer.  The charges add up in another way. When illegal charges are collected from many consumers, they add up as additional profits for the company that is violating the law. Not good.

Back to the article. It notes: “What’s unclear is whether gas stations are required to note on their marquee signs that there are two prices — one for cash, one for plastic. That once was a more common practice, but many gas station operators say they haven’t done so for years.”

I disagree. The Unlawful Trade Practices Act specifically prohibits misrepresentations about prices of goods. And a misrepresentation includes a failure to disclose information. So if a seller posts a gas price as $3.99 per gallon, and that price is a “cash only” price, it must say “cash only” or something like that, or it is risks violating the act.
David Sugerman

Probably just coincidence, but it caused me to snicker.

Last night I was channel surfing in a vain attempt to find Oregon primary election results.  I happened upon an earnest woman who confided in me and all my fellow viewers that we really need to be concerned about global warming and foreign oil. With a knowing but concerned smile–and with chirping birds in the background–she faced the camera and explained that we need nuclear power now more than ever.

Like I say, it’s probably just coincidence. Today’s news reveals that a federal judge court upheld a $350 million dollar verdict in a class action brought on behalf of some 15,000 landowners against the nuclear industry.  They claimed that their lands were contaminated from the operations of the Rocky Flats nuclear weapons plant.  The jury agreed, awarding the aforementioned damages. The judge also added interest, increasing the $350 million verdict to about $900 million. Guess we’re going to see an appeal….

This is one of those staggering cases, in terms of size and duration. I don’t know anything about it other than what I read in the paper.

Even so, it’s easy to fill in the blanks. A nuclear waste contamination case would be profoundly expensive to pursue because of legal fees and the costs of experts. The nuclear industry would surely defend such a claim in a tough and hard-nosed fashion. For those reasons, a case like this probably could not go forward without the class action device.

I’m sure that the team representing the landowners has done an unimaginable amount of work to get to this point.  It takes an amazing level of commitment to take on a case like this and to see it through to the end. Let’s hope that the landowners see justice soon, and the legal team representing them is properly rewarded for taking on a very tough case.

And as for the brightly lit woman and her soothing dulcet tones who talks so earnestly about our nuclear power needs….Can’t help but wonder what the Rocky Flats people would say about that.

David Sugerman

Back in late 2005, a car prowler stole unencrypted computerized medical records of 365,000 Providence Health System patients from an employee’s car. We filed a case here in Portland on behalf of the 365,000 patients, and the trial judge granted Providence’s motion to dismiss the claim. We appealed and recently filed our opening brief with the Oregon Court of Appeals.

I co-authored the brief with my friend and colleague, Brian Campf. Here is a pdf version:

Providence Class Action: Patients’ Opening Brief Oregon Court of Appeals

Appeals move at their own pace. I don’t expect a decision from the Court of Appeals until 2009.

David Sugerman

Those of us who handle wage and hour cases learned yesterday that the Oregon Supreme Court issued a major decision denying employees the right to collect wages. In the case, Gafur v. Legacy Good Sam Hospital, workers who did not get mandatory rest breaks sued to collect unpaid wages.

Oregon law provides that employees get 10 minutes of rest for every four hours worked, and no pay may be deducted for the rest break. The employees argued that Oregon’s rest break rules means that they should have been paid 10 minutes’ wages when they were denied rest breaks. The logic to the argument is sound, in that for employees time is money. So if you’re not allowed to take the time provided to you, you should at least get the money.

But logic and law don’t always mesh. The Court got there by finding that the regulations are for health and safety and don’t create an entitlement to pay.

The other interesting thing is that the State Bureau of Labor and Industries–”BOLI”–filed an amicus, or friend of the court, brief that supported the employees. So the employees had both logic and BOLI on their side. Neither swung it with the Court.

The last interesting point is that the Court–as is common–was unanimous in its decision. At least two of the Oregon Supreme Court justices had significant background representing employees before they became judges. And most of the rest of the court had substantial experience representing the State–here BOLI. But as is common with our court, the judges’ pre-appointment backgrounds proved to be poor predictors of the outcome. This is one of those other measures of judicial integrity and judicial independence–two critically important features of our courts.

I can say as much, even though I believe the Court got it wrong. No doubt this is because I represent employees in wage claims and see these issues through a partisan filter.

David Sugerman

Today, the Oregon Supreme Court held that Oregon smokers could not compel tobacco companies to fund medical tests that would help with early detection of smoking-related diseases. The case–Lowe v. Philip Morris–is important in a few ways.

First, by way of full disclosure, I was one of the lawyers representing Patricia Lowe, the smoker who sought to create a medical monitoring fund. While we did not win the case, I had the distinct pleasure and privilege of working on the case with my friends and colleagues, Bill Gaylord, Jim Coon, Chuck Tauman and Ray Thomas.

On a political level, the case is important because the Oregon Supreme Court demonstrated that sometimes–like in this case–Philip Morris wins in Oregon, and sometimes Philip Morris loses. That provides a powerful rebuttal to those who claim that Oregon courts are unfair to Philip Morris.

But the other thing is that the lawyers who pursued this case dared to advance the radical proposition that Oregon courts should provide a means of limiting harm and protecting those who are wrongfully endangered by dangerous products. For reasons that it articulated with clarity, the Oregon court declined to do adopt that proposition in this case. So be it. (That’s not a knock on the Court; rather, it’s an acknowledgment of its role, power and authority in our beloved state.)

Update 2 May 2008: Here’s the story reported in The Oregonian and on Oregonlive.com. Jim Coon, lead for smokers on the appeal, did his usual great job of explaining the case.

In the end, it comes to this–at least to my way of thinking:  Patricia Lowe, the smoker who bravely pursued this case, tried to do something that would make a difference by creating a program for medical screening that would limit the harm. Next time Philip Morris or its friends at the Chamber of Commerce complain about injury lawsuits, please remember this case. And then ask the complainers about their vision of alternatives, as they apparently don’t want to fund injury prevention.

David Sugerman

One of the criticisms of class actions is that often they lead to little real benefit for consumers. Often, that criticism isn’t very accurate because consumers who suffer small economic injuries aren’t going to see much benefit individually. But taking money from the wrongdoer penalizes them for misconduct and restores the money lost–even small amounts–to consumers.

But one of the problem areas is coupon settlements. In a coupon settlement, consumers who are part of a class receive a discount on future goods or services as part of a settlement. Sometimes that’s an okay outcome when, for example, the rip off is done on low-cost commonly used goods, like–say–gasoline. Or if the coupon can be redeemed for cash, then that’s fine, too.

But when the coupon gives a discount on a high cost item, that’s generally bad. And that takes us to the recently announced Ford Explorer settlement in California. In that class action, consumers who bought Ford Explorers can receive a coupon for $500 for future purchases of Ford Explorers.

While I don’t have all the details on the settlement and have no first-hand knowlege of the case, that seems like a lousy outcome. If the coupons are redeemable for cash or if they can be sold, that’s not so bad. But if they can only be used by buying a new Ford Explorer, that’s one of those class settlements that doesn’t do consumers a lot of good.

There are times when coupon settlements make sense. And maybe more information would lead me to think differently about this. Still, it’s got a kind of smell to it.

David Sugerman

ps-I’ll be out of town next week, so things may slow on Davids’ blog for the week. Though I guess they have an internet in that town, too.

Great piece on the recent closing of a trade school for profit that left students holding the bag. New America Foundation’s Higher Ed Watch chronicles the closing of the Silver State Helicopters school in California. Higher Ed Watch makes it clear that this is simply one example of a much bigger problem. Looks like the California Culinary Academy case and our own Western Culinary/CEC case fit into the same framework.

Good to know that Higher Ed Watch is taking a broader view of the problems.

David Sugerman

If you read fiction about trial lawyers, you know there are some pretty inventive plot lines out there. John Grisham thrillers and Phil Margolin crime novels always have neat plot twists.  But I don’t think any lawyer/author working in fiction could conjure up a story this bizzare.

The angels at Public Justice filed a class action lawsuit today to stop the marketing of a kids toy set based on CBS TV’s popular CSI series. The toy contains asbestos.  According to Public Justice, the toy’s fingerprinting powder is laced with a deadly form of asbestos, and kids’ normal use of the product will lead to inhalation of this toxic compound.

Hard to imagine that this kind of thing can happen. Worse than that, it apparently takes a lawsuit to get this irresponsible manufacturer’s attention.

David Sugerman