This news article seems so appropriate for an Earth Day item. The U.S. Attorney in Oregon announced a major victory in a case against a tenant of our own local port. That’s right. The port, a public body, leases a portion of the Port of Portland to a company called Kinder Morgan.

Kinder Morgan imports and exports stuff. Tons of stuff.  Stuff that gets in the river but should go to toxic waste dumps. Stuff that accumlates in piles. Stuff like potassium chloride or potash.

Ships hold a lot of this fluffy stuff. Rail car loads full of stuff disappear into these ships. As the ships go down the river, and out to sea, there is a problem if the stuff is spilled into the ocean. There is also a bigger problem if it is intentionally piled on deck and washed overboard.

Well, it ends up one heroic long shoreman in town got tired of seeing the stuff mishandled. In at least one case (that we know of at this time) Kinder Morgan personnel allegedly piled stuff on the deck, not in the holds. Then, when the ship got down the river, the crew simply washed the potash off as the ship entered the sea.  At least that is what the U.S. Attorney felt it could prove.

There were witnesses. There was proof.  The charges accused the company of violating laws prohibiting ocean dumping.   So much proof that the company actually pled guilty!
Now they must pay a little bit. The total fine… $240,000.

Oh and in the interest of full disclosure, I previously filed and settled a federal case on behalf of the Oregon Center for Environmental Health that accused the same folks, Kinder Morgan, of violations of the Clean Water Act. To settle that case we required that Kinder Morgan achieve dramatic reductions of the emissions of soda ash from the facility at Terminal 4 here in Portland. That made my clients feel that we accomplished something for the environmental protection of our neighbors in North Portland and elsewhere.

Here is a link to the little story in the paper.  link

Next time you think no one is looking, remember folks like longshoreworkers have eyes. And they know whom to call.
Earth day is just a little sweeter this year. Hope you enjoy it.

David Paul

PAUL & SUGERMAN, PC.

Hi Friends:

Just because I run a full-time law practice, does’nt mean I should forget a [free] special event that all of you may be interested in seeing this weekend. The Better Living Show link is taking place at the Expo Center starting right now at noon today (3/28) and going through sunday (3/30) at the Expo Center. The reason this comes to mind is that this exposition will include green transportation, food, fashion, kid events, government efforts on sustainability and more. I like green. So here I go, off to staff a booth.

The Oregon Center for Environmental Health link2, of which I am a founding board member, will be there. We will be introducing our kewel new latex-free rubber ducks!

So, if your plans for organic gardening are taking a spring break until the snow stops, come on by and we can hook you up with a non-toxic rubber ducky. That sounds like a little light fun and some very interesting information on sustainable and healthy living, right here in river city…or is that snowy city? or rainy city?

Regards and see you at the expo center this weekend. Take MAX!

David Paul

I awoke sadly to the news in today’s paper about a[nother] death involving a child associated with Oregon Department of Human Services (DHS). Here is the link to the story, but why read it? link Our state’s track record may be worse news.

The death of this precious little child is tragic. Too tragic for words. But what is the lesson here? Oregon was one of 15 states to undergo a second round of the federal Child and Family Services Reviews (CFSR). The 2007 CFSR process focused on improving safety, permanency and well-being of children in the state’s child welfare system.

The review had three components:

1. a statewide assessment;
2. an on-site review of case files; and
3. Program Improvement Plan (PIP) to address any areas found to need improvement.

Unfortunately, Oregon’s grade fell [far] below national standards. In issues dealing with protecting children from abuse and neglect, the state’s grade was a dismal 62.5%. In other words, there was approximately 37% where the state failed to achieve “substantial compliance” with federal standards for protecting youth from abuse or neglect. We all would like to see a number that is far higher, especially where the measurement is simple compliance with minimal standards.

When a state is not able to successfully complete its Program Improvement Plan, federal penalties may be imposed. But, people, what penalty is worse than a[nother] death of an innocent child?

I am ready to demand success here. Isn’t it time we wonder how many failing grades our largest state agency must suffer through before more accountability is required? Oregon’s dismal track record is explored here: link

I am handling cases involving severe injuries to at least four children who were permanently injured while in the care of DHS foster parents or licensed group homes. I wonder if our state agency can appreciate that as citizens we all demand better than a failing grade. The state laws explicitly say that children are our highest priority. I am ready to make that promise stick; I hope you are too.

David Paul

The front page of today’s Oregonian gives good reason to comment on two issues of importance to me, public health and children. Today’s story reports that U.S. EPA has urged certain improvements in our Clean Air Act concerning ozone (smog) regulations.  link

This is good. It is especially good when you remember that the Portland area was considered below the healthy thresholds set by federal requirements until the 1990’s.

What causes concern is that our state DEQ and U.S. EPA regulators have data that would support a more stringent improvement in clean air laws. The goal: Protect more children from serious and permanent respiratory disease. The result: We will protect fewer children. The reason: While EPA’s own scientific panel suggested setting the new standard at a level that would allow ozone at between 60 to 70 parts per million (ppm), the EPA decided on a standard of 84 parts per million. Translation: Instead of protecting (or at least trying to protect) 80% of children from “moderate” health problems, we will now seek to protect far fewer than 50% of our children.

So, I guess if you have two kids, you should wish one of them well in the morning when she goes off to school. The other one, well…we must now wait and see what happens when children breathe our air.

In sum, the EPA gets a D grade on protecting our children’s  health.  Next up, let’s take a look at how the state is doing for foster kids.

David Paul

The Supreme Court recently announced that it will hear two cases that may impact consumers. Two cases address a troubling area–federal preemption. Both threaten to further restrict consumers’ abilities to obtain compensation when wrongdoers cause harms and losses.

In Wyeth v. Levine, the Supreme Court will decide whether state law claims for injuries that seek payment for harms and losses caused by a dangerous drug are preempted, when federal law requires a warning on the drug. In the Levine case, Ms. Levine lost her arm as a result of complications from defendant’s drug. The jury awarded money to make up for Ms. Levine’s harms and losses. Now Wyeth argues that federal law protects it from answering for harms and losses caused by its misconduct.

In Altria v. Good, the Supreme Court will decide whether requirements that relate to the labels on cigarettes preempt consumers claims that they were deceived when Philip Morris sold Marlboro Lights. In the case–arising in Maine–consumers claim that Philip Morris failed to disclose that Marlboro “Lights” that were “lowered tar and nicotine” are only “light” when smoked by a machine. (Full disclosure: The author of this blog has been pursuing a similar claim on behalf of Oregon purchasers of Marlboro Lights.) In Altria, Philip Morris wants the Court to put a stop to these consumer cases because–Philip Morris claims–its labels were regulated by federal rules.

Nice try. Actually, nothing in any federal rule or law required Philip Morris to claim that its cigarettes were light or lowered tar and nicotine. They made that choice. And they also chose not to disclose that the “light” and “lowered tar and nicotine” labels apply to machines, not to people.

Still, this court seems to tilt in favor heavily in favor of corporate interests. As well, this court seems to distrust the jury’s ability to hear and weigh the evidence and decide whether a consumer’s harms and losses were caused by misconduct.

I long ago stopped making predictions about what any court will do. It’s a waste of energy and time, and I imagine that I’m about as good at predicting as I am at calling heads or tails. Still, if these cases go the wrong way, consumers could find themselves with nowhere to turn when corporate misconduct causes serious harms and losses.

David F. Sugerman

In today’s Oregonian, there’s a thoughtful letter to the editor under the heading, “Sizemore should be banned” from Mark Sturbois of Southeast Portland. Mr. Sturbois points out that Mr. Sizemore has been convicted of improprieties relating to the initiative process. But even so he’s back again with more bad ballot measures.

Coincidentally, the back page of the same Metro section (Oregonian Jan. 10, 2008) reports on an important ruling by Marion County Circuit Judge Dennis Graves. In that case, a number of professional petitioners challenged new laws that regulate how signatures are gathered for initiative petitions.

The regulations allow the State to enforce existing rules that ban paying signature gatherers by the signature. The professional petitioners–the Sizemores of our lives–challenged the rules and asked the judge to enjoin enforcement. Judge Graves refused to do so.

I’m not privy to the particulars, and you always have to be a little careful about news reports of cases. Still, it seems reasonable to me that the State can enforce rules that regulate signature gathering for initiatives. After all, we want a transparent process that Oregonians can trust, not one that encourages or promotes signature fraud. It seems like Judge Graves’ ruling goes the right way on this important issue.

So back to Mr. Sturbois. Seems like he’s got a well-founded and well-articulated beef with the Sizemore efforts. Let’s hope that the latest round of rules helps cure us of this ill. While the right to petition is an important one, we’re all entitled to have the petitioning process remain open and honest. So maybe some fraud-proofing will stop the cascade of lousy ideas?

David F. Sugerman

Here’s a fun one. According to a report in today’s New York Times, Countrywide admitted that it fabricated–or in its lawyers words, “recreated”–documents in a bankruptcy case. Countrywide used three letters that it claimed to have sent to the borrower and used them as the basis for claiming that the borrower owed Countrywide $4,700.

Here’s the link: www.nytimes.com/2008/01/08/business/08lend.html?_r=1&ref=business&oref=slogin

Countrywide’s claim that the borrower owed money is particularly problematic. According to the news report, the borrower had successfully completed her bankruptcy plan, a plan that Countrywide passed on without objection. After completion of the bankruptcy plan, Countrywide sent the borrower a notice of intention to foreclose based on the fabricated documents.

Countrywide sent the borrower’s lawyer “copies” of three letters sent previously. Or so Countrywide claimed. Interestingly, the oldest of the three letters was addressed to an office address that the lawyer would move into well after the date of the first letter. Nice work at the documents department.

In the predatory lending crisis, there are those who want to put all of the blame on borrowers for failing to take responsibility. While there will be plenty of blame to go around before the whole story comes out, this story doesn’t exactly bathe Countrywide in a righteous light. It will be interesting to see whether this type of conduct was widespread, or whether it was a rare instance of misconduct.

David F. Sugerman

One of the better class notices I’ve seen appeared in Parade Magazine on Sunday, January 6, 2008. It announced a $295 million settlement of a diamond market price fixing class action lawsuit against De Beers diamonds.

The notice provides a nice summary of the class settlement with plenty of information on how class members can learn more about the case. The settlement fund totals some $295 million. It covers diamond purchases from Januay 1, 1994 through March 31, 2006. Additional information can be found at www.diamondclassaction.com.

Paul & Sugerman did not participate in this case and has no connection to the claim.

The size of the settlement fund suggests that class counsel did a great job in putting together what must have been a tough case. But more important, it’s an impressive job of providing notice.

David F. Sugerman

In a decision released yesterday, the Seventh Circuit Court of Appeals affirmed a multi-million dollar judgment against QT, Inc., the seller of the Q-Ray Ionized Bracelet.

QT made millions selling the product to desperate consumers, claiming its “Q rays” were a miracle cure that relieved all sorts of chronic pain. Independent medical research found that it was about as effective as a placebo.

A federal judge heard the evidence and stuck the company with fines and ordered refunds, as well. The numbers run into the tens of millions.

News reports scattered around the internet today point out that the company filed bankruptcy, and yet it continues to sell the product using product testimonials.

The opinion–written by Judge Easterbrook–makes for amusing reading. He labels the company’s claims about biofeedback, Q Waves and energy balancing as “blather.” In affirming the trial court, the appeals court concluded that the judge hearing the case was in the best position to weigh the evidence.

I’m reminded of a film I saw quite by accident a few months ago. It was a Spanish film called Ladrones Robben Ladrones (Thieves Rob Thieves) in which the bogus marketing of a miracle cure is at the heart of a terrific heist film. It’s one of those good guys win in the end films. Sort of like this case.

David F. Sugerman

My goodness, to read the coverage in today’s Oregonian, one would think that the towns, cities and universities in the state face near-certain bankruptcy because of yesterday’s Oregon Supreme Court opinion. (See yesterday’s entry for summary and citation on Clarke v. OHSU.)

In today’s Oregonian, Ashbel Green relates that the sky is falling. Here is the link:  www.oregonlive.com/news/oregonian/index.ssf?/base/news/1198900517209320.xml&coll=7

The problem with the report is that it misses a key legal concept. The Court ruled that the cap was unconstitutional as applied to Jordaan Clarke’s case. That “as applied” detail is very important. The cap remains the law, except in very rare cases, like Jordaan Clarke’s, when the harms and losses caused by profound injuries dwarf the maximum amount recoverable.

Jordaan Clarke suffered profound brain damage caused by the negligence of OHSU medical providers. The profound injuries confined him to a wheel chair, left him in need of round-the-clock care, and triggered future medical expenses in excess of $11 million. These facts are admitted by everyone.

In the case decided by the Supreme Court, Jordaan Clarke could recover no more than $200,000, even though his harms and losses exceeded $10 million. Jordaan’s case is exceptional by any measure.

The problem with the cap is that it applies one size-fits-all justice to all cases. In the case of Jordaan Clarke, the limits were so severe that they violated the Oregon constitution’s guarantee on the right to a remedy. If the Court had gone the other way, it would have said to OHSU, “Don’t worry; no need to be careful. We won’t hold you for whatever harms and losses you cause to your patients.” Anyone who has ever raised a child knows that this is a horrible message to send. Fortunately, the Oregon Supreme Court got it right.

This isn’t the stuff of falling skies, and the Oregonian is doing a disservice to all by the alarmist report.

David F. Sugerman