News today is that HB 2585 is pending in the Oregon legislature. It’s a technical bill that would have a big impact on consumers in class actions.

By way of full disclosure, I have been pushing for passage of the bill. Robert Stoll and his partner Scott Shorr and their firm have been doing the real heavy lifting. They get the credit here for trying to re-write an anti-consumer provision. More disclosure: as I represent consumers, a pro-consumer bill would be good for the people I represent.

The bill would make a simple change to the Oregon Rules of Civil Procedure. Right now, those rules prevent consumers who sue under the Unlawful Trade Practices Act from recovering statutory minimum damages in a class action in state court. If you sue for violation of the Unlawful Trade Practices Act as an individual, you can recover either $200 or your actual damages. The current rule bars members of a consumer class from recovering the $200.

The current law favors banks, Wall Street, and other large groups that chip away small amounts of money from many, many consumers. If a bank overcharges every consumer $10 and makes millions in the process, consumers who sue in a class action can only get the amount back that they lost, not the $200 per consumer.  HB 2585 would eliminate that and treat all consumers the same–whether they are pursuing claims individually or as part of a class action.

The Chamber of Commerce hates class actions. But they exist to stop large institutions from nickeling and diming consumers to death. A $10 late fee isn’t going to put any consumer into bankruptcy. But an illegal $10 late fee levied a million times makes the wrongdoer a lot of money.  Consumers win with this one because re-balancing the scales will put a stop to illegal fees and other forms of fraud.

David Sugerman

News today is that the U.S. Veterans’ Administration has agreed to settle a data theft class action case for $20 million.  The case is of interest in Oregon because it provides something of a mirror for the Providence medical record data loss theft case pending here in Oregon.

Full disclosure: I represent patients whose data went missing in the Providence case.

The Veterans’ case settlement is particularly interesting in two ways. First, it includes compensation for emotional distress claims, where Providence refuses to include that in Oregon. Second, the laptop that went missing was recovered, and according to reports, the government believed that no one accessed the data. In the Providence theft, the data has never been recovered.

As for the Providence case, it’s been fully briefed, and we’re awaiting an argument date in the Oregon Court of Appeals.

David Sugerman

Christmas came early for current and former Wal-Mart employees with this good news. Wal-Mart has agreed to settle 63 wage and hour claims pending in various courts. Wal-Mart will pay between $350 million and $640 million to settle the pending cases. No word yet on how much any employee will receive. The settlements must still be approved by judges overseeing the various cases. Critics of Wal-Mart have long questioned whether it achieves its low prices at by chipping employees. Still, it’s a good day when a company steps up to do what is right–no one who works for wages should have to endure the death by a thousand paper cuts of small illegal wage deductions for work performed. The case illustrates the importance of wage and hour class actions. Employees who face illegal employment practices often can’t afford to pursue their small claims. But when those small claims are bundled into a class action, a company that makes money by chipping its employees can be forced to face up to a huge day of reckoning. That’s apparently what happened here. David Sugerman

I would be remiss if I didn’t note this New York Times report on prison sentences for former insiders at Milberg Weiss for their roles in the former high-flying class action law firm’s kickback scheme. Interestingly, both former partners, Steven Schulman and David Bershad, reportedly cooperated with federal investigators to provide critical detail on the law firm’s misconduct.

There’s a certain level of sad irony in this. I won’t defend Milberg Weiss. They did wrong, and the take down is the right result. But the sad thing is that their securities work was one of the few thin forms of protection when Wall Street engaged in misconduct.  So I’m hoping that these take downs are just a prelude for the next round. Because I have to imagine that there are some people at AIG, at Bear Stearns, at some of the investment firms and credit rating agencies who did similar or worse.

David Sugerman

For those interested in the Comcast late fee litigation here in Oregon, a quick update. After winning the preliminary battle in the trial court and Court of Appeals, we returned to the trial court for discovery on class action certification. (I’m compressing several years into a few lines here.)

Backstory: In the case, plaintiffs–Comcast customers–claim that Comcast illegally billed late fees. They want to pursue the case as a class action and obtain refunds of illegally billed late fees, plus interest and attorney fees. For what it’s worth, Comcast denies that it did anything wrong and is arguing that the case is not appropriate for class action treatment.

The parties briefed the question of whether the court should certify a class action and recently, I appeared in court to argue plaintiffs’ motion to certify the class action. Multnomah County Circuit Court Judge Baldwin heard argument for an hour and a half. He had a number of questions. After the hearing, he sent a letter to the attorneys asking for additional briefing and scheduling further argument. We’ll be back in front of Judge Baldwin for more argument in early December after we complete the next round of briefing.

For those who keep score, Tim Quenelle, my co-counsel, and I filed the case in 2004. The fight over the arbitration clause took two-plus years, and it looks like the class certification proceedings will run about the same length.  No one said it would be easy. But of course, we’re not giving up.

David Sugerman

For years, Airborne Health touted Airborne as a cold prevention remedy. This Washington Post article reports on the Federal Trade Commission’s settlement of false advertising claims against the manufacturer. According to the story, the company agreed to refunds of up to $30 million dollars settlement to dispose of the false advertising claims.

Bad enough that Airborne was raking in money by the tanker-load on false claims. But if that wasn’t enough, the CEO blames consumer lawyers for the company’s woes.  From the article: “A class-action lawsuit sparked this matter. We’re just one of many major consumer brands across America that are under assault by class-action lawyers.”

The Post article quotes Stephen Gardner, director of Center for Science in the Public Interest.  Steve is one of the country’s top consumer lawyers, and CSPI has done its usual top-notch job here. Curious that Steve and the FTC and other consumer lawyers would get the blame. Steve Gardner didn’t choose to make false claims in advertising the product. Neither did the FTC.  But let’s not let facts get in the way.

Seems to me that consumers have the right to know that they’re buying something real when they spend money on a product.  If the manufacturer chooses to falsely advertise its products, it’s only fair and proper that they pay the price.

David Sugerman

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