Blog relocation

Please note that I’ve relocated this blog to our new website, www.davidsugerman.com Please look for updates there.

Wikipedia entry on Western Culinary Institute flags consumer case

I was a bit surprised to learn that Wikipedia picked up on our proposed class action case against Western Culinary Institute. I have no idea how long the Wiki entry on WCI has included information on the case.  The entry cites The Oregonian reporter Brent Hunsberger’s initial report on the the filing of the case. Much has changed since that time. Still, it’s interesting to see that the Wiki report includes information.

Wiki’s reach is limited, of course.  Its entry on Career Education Corp. summarizes the federal compliance issues and some of the litigation that CEC faces, including the California Culinary Academy Case. But it doesn’t list the Western Culinary Case in which Career Education Corp., the parent of WCI, is a co-defendant.

Interesting view of the world of litigation from Wikipedia. In any event, it provides consumers with at least one more tool to do background research.

Update: Proposed class action against Western Culinary Institute and Career Education Corp.

We filed our opening brief today in the proposed consumer class action against Western Culinary Institute and Career Education Corp. In support of the brief, we submitted confidential documents, so at least for the present, I can’t post the brief on line. We’re going to seek to remove the confidential designation from the exhibits that we used. If the court agrees, we’ll be able to post it and will do so.

I’m working on the case with Portland attorney Brian Campf. We filed in March 2008. Under our current schedule, Judge Baldwin will hear oral argument on the motion to certify the class action on October 29, 2009.  Interestingly, the case generated a rather heated reaction.  We’ve since updated the complaint, but owing to some sort of software issues, I can’t seem to upload the new complaint. Working on it.

Meanwhile, if you were a student at Western Culinary Institute and you have questions about this matter, please feel free to find my contact info above and drop me a line.

Critic of civil just system files class action after his ox gets gored

You’ve probably heard various explanations of the difference between comedy and tragedy. My favorite is that comedy is when you slip on a banana peel and fall, but when I slip on a banana peel and fall, that’s a tragedy. I’m reminded of that explanation by this report that a critic of the civil justice system has filed his very own class action.

It seems that Fred Hiestand, the General Counsel of the California Civil Justice Association, recently filed a class action against the City of Sacramento because they City illegally towed his car. The oddly named California Civil Justice Association is one of those slick corporate funded organizations that advocates for closing the courts to ordinary consumers.  Sure, they talk a good game. They claim to be about reducing costs of frivolous lawsuits and the like. But it doesn’t take too much digging to see that they simply want to take away the right to trial by jury.

The facts of Mr. Hiestand’s case make for interesting reading. According to the linked report, Mr. Hiestand parked his car in a spot marked by a “No Parking” sign so that he and his family could eat at a fast food restaurant. He figured it was okay because they wouldn’t be gone for an hour.

He returned to find his car towed, and Mr. Hiestand reportedly became upset. He seeks damages because the City failed to follow the law when it towed the car.

So good luck with that, Mr. Hiestand. Those of us who actually try cases know that you’re going to have a tough time convincing a jury that your decision to park in a no-parking zone entitles you to a free pass.  But I’ll be curious to know how the California Civil Justice Association is dealing with this one.  See, when a consumer files a case that offends you or your association, it’s “frivolous.” But of course, when you get upset and decide to file a case to remedy a wrong, your case isn’t frivolous.

One of my favorite Yiddish words is “chutzpah.” I’m not a scholar of the language and only know a few words and phrases of that dead language spoken by my ancestors. But the word is commonly translated as “nerve,” though scholars tell us that it’s not a great translation. The example commonly given is that when a man kills his parents and throws himself at the mercy of the court as an orphan, that’s chutzpah. I think I now have a new and updated example. Thanks for that Mr. Hiestand and best of luck to you.

Tips for Consumers-Is that culinary school program worth the money?

I saw another ad on TV last night for culinary schools. It had the flash and the glitz. There was the woman dressed as a chef talking about training chefs for exciting careers. And then today, I got another email from somewhere out there asking whether culinary school programs are worthwhile. So I’ve decided to take this one on.

Before going forward, I have to admit to biases and a point of view. I represent a group of students here in Oregon who are pursuing claims against Western Culinary Institute and Career Education Corp.  Through the case, I’ve learned generally about for profit culinary schools. My take on all of this is colored by that experience, but it’s also driven by my private life as a dad who is putting kids through school. So none of this is legal advice. Think of it as one dad’s take on the cost of a private for-profit trade school education.

When you’re thinking about for-profit culinary school or any trade school, you’re already in a defined area of education. This isn’t about learning for the sake of learning. Instead, it’s getting skills that help you qualify for a job. That’s kind of obvious. Still, don’t ever lose sight of that because what you really want to know is whether the cost is worth it.

Costs at for-profit culinary schools can be very high. It’s not unusual for students to borrow $40,000 for a program that grants an associates degree in a period of one to two years.

The first question is what that buys you. Many trade schools provide potential students with placement information. Get it in writing. But you need more than just the numbers of students who are placed in the trade. You need to know what kinds of jobs they got, and you need to know what those jobs pay.

Here is what I mean.

There are plenty of jobs available in the culinary field. Think about all the baristas, line cooks, and dish washers out there. But those jobs usually pay very low wages, and they rarely require any formal training. So if a culinary school says that 95 percent of its graduates are placed in the field, you’ll want to know what kind of jobs those graduates are doing.

Here are some questions. How many of those 95 percent are chefs? Or restaurant managers? If 95 percent are placed in high-level jobs, then that’s one thing. But if those placement statistics include fast food workers, that’s a huge problem.

The other piece is that you need salary information, and it needs to be more than just an average salary figure.  To say that graduates earn an “average” of $36,000 per year could mean that a lot of the students who graduate earn at that level, or it could mean that some earn $18,000 and some earn $54,000. You would want to know–wouldn’t you–if you were taking on debt of $40,000. So you would  want to know how many earn $X, how many earn $Y, and how many earn $Z to put that average salary in context.

Some schools won’t give you that information. I would suggest that if a school will not provide that information, you might be getting into a really bad deal. You wouldn’t want to borrow $40,000 to go to school if the jobs that you get pay wages that won’t allow you to repay your loans. You also wouldn’t want to go to a program that doesn’t improve your job prospects.

Bottom line: Ask questions. If you don’t get answers, think about alternatives. There are a lot of great lower cost programs at our community colleges. They don’t straddle students with debt. The other way to get into the trade is to start at the bottom and work your way up. True, it takes time, but so does culinary school.  The big difference is that working your way up the ladder doesn’t put you in debt.

Death by a Thousand Paper Cuts-Denver Post takes on Late Fees

When I first heard about the case five years ago, I was somewhat annoyed. Over the years, the trifling annoyance has bloomed into a cool white heat of studied anger.

The issue is late fees charged to consumers. The Denver Post did this nice brief story on consumer late fees.

The white-heat case is Martin v. Comcast, an Oregon consumer class action that seeks damages for Comcast’s illegal cable late fee charges in Oregon. Due to the magic of the internet, the reporter writing the story found our Comcast late fee class action and called to talk about the problem.

One of the untold stories with late fees is that they are a revenue source for companies that charge them. When you look at the accounting, you can see that those small paper-cut late fees of a few dollars add up into millions in revenue.

The $6 late fee problem provides the best illustration of the need for consumer class actions. No consumer can fight a $6 charge, and no one in their right mind would. But when the company charging an illegal late fee takes millions per year in illegal revenue, consumer class actions provide the best means of re-balancing the scales.

So Martin v. Comcast continues. We’ve come this far, and of course we’ll be seeing it through to the end.  The ink in the Denver Post is nice, of course. But the nicer day will be the day we prevail.

Court rejects veterans’ data breach case (via Spam Notes)

Good post at the always interesting blog, Spam Notes here on a disappointing ruling by the 11th Circuit Court of Appeals rejecting veterans’ claims under the Privacy Act. I had missed the original opinion–here is a link to the slip opinion in Perkins v. Department of Veterans’ Affairs

The facts of the case echo our pending class action against the Providence System here in Oregon over the loss of unencrypted patient records. But there’s an important legal difference.  In Perkins, the veterans sought relief under the federal Privacy Act. The Court decided the case under that statute and federal law.

The proposed class action in the Providence case arises under Oregon’s Unlawful Trade Practices Act and on a negligence theory based on Oregon common law rules.  Oregon law provides that disclosures of medical records give rise to a claim because of the special relationship between physician and patient.  The ruling in Perkins didn’t address these different theories.

We’re still awaiting a ruling from the Oregon Court of Appeals on whether the Oregon case can go forward. I argued the Providence appeal back in April. No telling when we’ll get a ruling.

Trade school class action settlement-Academy of Court Reporting

Here is a report in the Detroit Free Press about a class action settlement for court reporting trade school students at the Academy of Court Reporting, which is owned Delta Career Education Corp. The report is a bit sketchy. I’m assuming that the school is in Michigan, though that’s by no means clear. The settlement for more than 3200 students is valued at $32 million. The report indicates that the case was filed in 2007.

The settlement caught my eye because I continue to represent trade schools students pursuing claims against Western Culinary Institute, which is owned by Career Education Corp. I hope to do a brief update on the progress of that case later this week.

Massachusetts court nixes Wal-Mart’s bargain hunting efforts in class action settlement

Via Bloomberg comes this story of how Wal-Mart tried an end-around strategy to settle an unpaid wage class action in Massachusetts.  Apparently, Wal-Mart was unhappy with the high settlement demand received from lawyers representing the workers. According to the news report, Wal-Mart simply located other lawyers who were not actively involved in the case and engineered a settlement that was far below the demand provided by the named plaintiffs.

The Superior Court Judge Murtagh apparently described the settlement as “tainted.” Judge Murtagh refused to approve the settlement.

So this raises interesting questions.  Class actions on behalf of consumers and employees are widely condemned for all sorts of reasons. Charges of abuse are almost always heaped upon those of us who represent consumers. But here, it’s clear that Wal-Mart tried to pull a fast one by failing to make settlement offers to the named plaintiffs–the people responsible for prosecuting the lawsuit. Wal-Mart acted inapprorpiately in trying to settle the case.

So maybe we should all to expect to hear criticism from the talking heads who are awfully quick to criticize consumers and trial lawyers.  That would be the right thing because Wal-Mart engaged in lawsuit abuse here. But I’m not holding my breath.

Bombshell: State of Minnesota sues National Arbitration Forum

This major development in the fight against arbitration abuse has potential to to cause some serious carnage. The State of Minnesota filed a lawsuit against National Arbitration Forum, a leading arbitration provider, claiming that NAF is a front for debt collectors and their law firms and not an independent arbitration service.  Here’s a copy of the complaint–it’s long–for anyone who is interested.

Those of us who represent consumers have long claimed that mandatory arbitration is akin to a funhouse filled with mirrors, where consumers are going to lose. But I never suspected that there might be an actual conspiracy between NAF, debt collectors, and law firms representing the collectors. If it proves out, NAF and a few of its secret friends are going to have some serious ’splainin’ to do, as Ricky Ricardo would say.

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