S P R I N G / S U M M E R 2 0 0 4 PUBLIC JUSTICE
S U P P O R T I N G T H E W O R K O F T R I A L L A W Y E R S F O R P U B L I C J U S T I C E TLPJ Sues Nation's Largest Electric Utility Over Sulfuric Acid Air Pollution That Destroyed Town
Company Bought Entire Ohio Village to Continue Toxic Emissions T rial Lawyers for Public Justice filed a major air pollution lawsuit on May 12, 2004 against American Electric Power Company (AEP) ­ the nation's largest electric utility ­ for spewing up to 32 tons per day of sulfuric acid mist from the 830-foothigh smokestacks at its largest coal-fired power plant, the Gen. James A. Gavin Power Plant in Cheshire, Ohio. Sulfuric acid is a highly corrosive and toxic chemical that is a byproduct of burning coal. The Gavin Plant burns 10 billion pounds of high-sulfur coal per year. AEP has been aware of this toxic pollution and its harmful effects for 3 years. After AEP installed new equipment in May 2001 intended to reduce pollution at the Gavin Plant, sulfuric acid emissions skyrocketed. Blue acid aerosol plumes from the Plant intermittently touched down in the surrounding Village of Cheshire. After an investigation, the federal Agency for Toxic Substances and Disease Registry concluded
See Toxic Pollution, page 10. American Electric Power Company's coal-fired power plant in Cheshire, Ohio releases up to 32 tons per day of sulfuric acid mist, a toxic pollutant. INSIDE:
TLPJ Urges Supreme Court to Protect Constitution During War on Terrorism Military Families Challenge Army Contractor's Discrimination
Families at Fort Lewis File Federal Class Action Over Disability Discrimination in Housing 4-5 Key HMO and Title IX Litigation Settled 6-9 Mandatory Arbitration Battle Grows Nationwide 11 Asbestos Experiment Exposed 17 2004 Trial Lawyer of the Year Finalists Announced 19 Hon. Barney Frank to Keynote Annual Meeting 22 National Access to Justice Campaign To Be Launched 23 Foundation Acknowledges Major Donors and Special Gifts T rial Lawyers for Public Justice and Disability Rights Advocates filed a landmark class action on May 10, 2004 to stop disability discrimination by a private contractor that provides housing for military families ­ including families that have sent soldiers to fight in Iraq. The case was filed in federal court in Tacoma, Washington on behalf of all military families at Fort Lewis, the U.S. Army's West Coast headquarters, who have at least one disabled family member. The lawsuit is the first disability discrimination case against a private housing provider on a military base since the Army began privatizing on-base housing in 1998. About 13% of the families living at Fort Lewis have at least one family member with a disability, the second highest reported population of disabled individuals of any base in the Army.
See Military Housing, page 12. PRESIDENT'S REPORT TLPJ Deserves Your Support Now More Than Ever T his is my last column as President of The TLPJ Foundation and, before my term comes to a close, I want to say what an honor and a privilege it has been to serve at the helm of this unique national public interest law firm. Here are five reasons why I firmly believe TLPJ deserves your support now more than ever. First, this extraordinary organization is winning key Gary Gwilliam victories to protect the rights of consumers and victims, defend our Constitution, preserve our environment, and secure ordinary Americans' access to justice. As President, I've come to know TLPJ intimately, and could not be more impressed with its value and impact. Second, TLPJ is needed now more than ever because virtually all that we value in America's civil justice system ­ including respect for the rule of law itself ­ is under attack. We must all join together to fight back, and TLPJ is well positioned as the conscience of the trial bar, bringing together the cream of the trial bar to fight for public justice in cases that otherwise could not be brought. Third, the Bush administration and corporate wrongdoers are seeking unbounded and unprincipled powers that trample the poor and the powerless, and are now attempting to barricade the courthouse doors to many ordinary Americans. We must preserve all Americans' right to their day in court. That's why the Access to Justice Campaign that we are planning to launch (see page 22) is so crucial. Please join me and my good friend Jeff Goldberg, to whom I will soon have the honor of passing the gavel, in planning to support this campaign generously. Fourth, TLPJ needs your active participation and financial commitment because what makes our success possible more than anything else is members like you. I want to thank you personally for your contributions. And I challenge you to renew and increase your support, and to recruit and encourage others to do the same. Fifth, the other invaluable resource that TLPJ can call upon is its exceptional staff. I'm truly grateful that Arthur Bryant has returned to lead this fine organization and I appreciate all that he and this incredible staff have accomplished to make this such a critically important organization. We need your help to continue to support them. Finally, I want to especially thank everyone on our Executive Committee and our Board for all the support they have given me this year. The organization is in fine hands for strong and effective leadership for the foreseeable future. s
2 P U B L I C J U S T I C E EXECUTIVE DIRECTOR'S REPORT What We Stand For I n two weeks, the Supreme Court will rule in four cases that will determine what we, as a nation, stand for. The central issue in Hamdi, Padilla, Rasul, and Al Odah is whether the United States is truly a nation of laws ­ or whether we'll cast the law aside when we're in danger. Trial Lawyers for Public Justice is committed to ­ and stands for ­ the rule of law. We believe that America is ­ and must ­ too. Arthur H. Bryant This is not the first time our nation has faced this question. In 1866, in Ex Parte Milligan, the Supreme Court said, "The proposition is this: that in a time of war the commander... has the power... to suspend all civil rights and their remedies, and subject citizens... to the rule of his will." It rejected the proposition, holding that the Constitution barred the suspension of habeas corpus even during the Civil War. That, unfortunately, has not always been the Court's answer. In 1944, in Korematsu v. United States, the Court sacrificed the Constitution to national security and upheld the forced internment of U.S. citizens of Japanese heritage during World War II. In 1998, the U.S. formally apologized, paid symbolic reparations, and awarded Fred Korematsu the Medal of Freedom, America's highest civilian honor. Now 84-yearold Korematsu, we, and many others, are urging the Supreme Court not to make the same mistake again. That's not what we stand for. In the climactic exchange in A Man for All Seasons, William Roper says to St. Sir Thomas More, "You'd give the Devil the benefit of law!" More replies, "Yes, what would you do? Cut a great road through the law to get after the Devil?" Roper: "I'd cut down every law in England to do that!" More: "Oh? And when the last law was down, and the Devil turned round on you ­ where would you hide, Roper, the laws all being flat? This country's planted thick with laws from coast to coast ­ man's laws, not God's ­ and if you cut them down ­ and you're just the man to do it ­ d'you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil the benefit of law, for my own safety's sake." So would we ­ for our own nation's sake. Note: I cannot end this column without thanking outgoing President Gary Gwilliam for his exceptional leadership and friendship. He has helped me and TLPJ tremendously. s
S P R I N G / S U M M E R 2 0 0 4 TLPJ Battles for Constitution in War on Terrorism
Briefs Challenge Bush Administration's Authority to Hold U.S. Citizens Indefinitely Without Criminal Charges, Meaningful Access to Counsel, and Trial T LPJ, the American Civil Liberties Union (ACLU), and other public interest organizations have filed amici briefs in two crucial cases urging the U.S. Supreme Court to reject the federal government's claim that the war on terrorism gives President Bush unlimited authority to deprive American citizens of their constitutional rights. In Hamdi v. Rumsfeld and Padilla v. Rumsfeld, the Bush Administration asserts that U.S. citizens can be held indefinitely without charges, counsel, or trial if the President unilaterally designates them "enemy combatants" without any hearing at all. TLPJ and the public interest coalition urge the Supreme Court to reject that assertion ­ and to protect all Americans' rights during the war on terrorism. "We cannot protect our country by violating the Constitution and the principles on which it is based," said TLPJ Executive Director Arthur Bryant. "The Supreme Court must reject the Bush Administration's claim that it has unlimited and unreviewable power to deprive Americans of their constitutional rights." The amici briefs argue that the government's detention of Yaser Hamdi and Jose Padilla violates the U.S. Constitution, the AntiDetention Act, the protections of the writ of habeas corpus, and the Geneva Conventions. The briefs demonstrate that these laws and treaties destroy the Executive Branch's claim of unbridled authority to detain U.S. citizens indefinitely while depriving them of their basic constitutional rights. "Our system of checks and balances was designed to ensure that individual liberty does not rest on the good faith of government officials and to place limits on the exercise of government authority," said Steven R. Shapiro, the National Legal Director
S P R I N G / S U M M E R 2 0 0 4 The U.S. Supreme Court building proclaims "Equal Justice Under Law." of the ACLU and principal author of the amici briefs. "By contrast, the government's claim that it can indefinitely detain both U.S. citizens and non-citizens without any meaningful review rests on an assertion of executive power that is virtually boundless." Yaser Esam Hamdi is an American citizen who was captured in Afghanistan in November 2001. He is currently in custody at a U.S. Naval base in Norfolk. He has been detained for more than two years without being charged with any crime, given any meaningful access to counsel, or receiving a hearing. Jose Padilla, also an American citizen, was arrested on a material witness warrant in Chicago after he returned to the U.S. from Pakistan in May 2002. For nearly two years, he has been detained by the federal government in a Navy brig in Charleston, South Carolina. He, too, has never been charged with any crime. The government has, among other things, deprived Padilla of meaningful access to a lawyer, forbidden him from contacting his family, and refused to allow him to challenge anywhere the President's unilateral declaration that he is an "enemy combatant." The principles at stake in Hamdi and Padilla ­ and the extraordinary nature of the Bush Administration's claim of unrestricted Presidential power ­ are difficult to overstate. Despite the threats to national security our nation has suffered throughout its history, no President has ever claimed to have the unlimited power, exempt from control by both the legislative and judicial branches, that the Bush Administration asserts today. In addition to the legal authorities referred to above, a 1971 statute ­ also discussed in the amici briefs ­ specifically provides that "[no] citizen shall be imprisoned or otherwise detained by the United States except pursuant to an Act of Congress." The Executive Branch has neither sought nor received from Congress the authority it seeks to exercise over Hamdi and Padilla. The Supreme Court heard oral argument in Hamdi and Padilla on April 28, 2004. TLPJ's participation in these cases comes on the heels of the amici brief it joined in the consolidated cases of Rasul v. Bush and AlOdah v. United States, which urged the Supreme Court to rule that the federal government cannot hold more than 600 people indefinitely at Guantanamo Bay Naval Base in Cuba while depriving them of any court review of their detention. The briefs filed in all of these cases are posted online at www.tlpj.org. The Supreme Court is expected to rule in the cases by July 4, 2004. s
P U B L I C J U S T I C E 3 TLPJ Wins Settlement Victories in Two Key Cases Charging HMOs with Double-Billing Members
Maryland HMOs Agree to Pay Consumers Vast Majority of Alleged Damages T LPJ has successfully resolved the first two cases in its long-running challenge to Maryland HMOs that unlawfully double-billed their members. In both Riemer v. Columbia Medical Plan and Balthrop v. Kaiser Foundation Health Plan of the MidAtlantic States, Inc., the HMO defendants have agreed to settle for the vast majority of the maximum damages alleged in the cases. The settlements require Columbia Medical Plan to pay $3 million and Kaiser to pay $800,000. "Under Maryland law, injury victims have a right not to be charged twice by HMOs for the same medical care. Kaiser and Columbia Medical Plan are the first two Maryland HMOs to step forward and do the right thing. We are very pleased that they will return most of the money they took from their members," said co-counsel Martin Wolf of Baltimore's Quinn, Gordon & Wolf, Chtd., who argued key motions in both cases. The substantial recoveries for the HMO members were the end result of extensive litigation in which the plaintiffs had won four separate appeals in both federal and state courts on different issues. In 1996, TLPJ and a team of consumer rights lawyers filed the first of five lawsuits on behalf of consumers challenging several Maryland HMOs' double-billing practices, also known as "subrogation." The cases charged that HMOs may only be paid through premiums, co-payments, or deductibles under Maryland law, and do not have a right to collect additional money from a patient who has received payment from the person who injured him. Federal district courts dismissed two of these cases ­ Riemer and Singh v. Prudential ­ on the grounds that a federal statute, the Employee Income Retirement Security Act (ERISA), preempted and eliminated the rights of all
4 P U B L I C J U S T I C E plaintiffs who got their insurance with the HMO through an ERISA plan, meaning the rights of most plaintiffs who received their insurance Martin Wolf from a private employer. TLPJ successfully appealed both decisions to the U.S. Court of Appeals for the Fourth Circuit. In Singh, that Court held that the plaintiffs' claims were not preempted by ERISA, but that the claims had to be brought in federal court. During the long pendency of the Riemer case in the Fourth Circuit, the state courts proceeded on a parallel track. On March 10, 2000, the Maryland Court of Appeals unanimously ruled in Riemer that HMOs throughout Maryland had been illegally billing their members ­ in direct violation of the Maryland HMO Act ­ by charging them a second time for medical care whenever the members recovered damage awards from third parties. In response to TLPJ's victory in Riemer, HMO lobbyists convinced the Maryland legislature to pass a law that both allowed HMOs to pursue subrogation claims against their members within certain limits and applied retroactively to the HMOs' conduct over the previous 24 years. TLPJ and its legal team then filed Harvey v. Kaiser Foundation to challenge the constitutionality of this law. On August 30, 2002, the Maryland Court of Appeals unanimously ruled in Harvey that the new law's retroactive application was unconstitutional. The settlements by Columbia Medical Plan and Kaiser resolve two of TLPJ's five cases against Maryland HMOs. The remaining three cases in Kieron F. Quinn F. Paul Bland, Jr. the series ­ Singh, McKandes v. Blue Cross Blue Shield, and Popoola v. MDIPA ­ are still pending in the U.S. District Court in Maryland. Although the appellate decisions in Riemer, Singh, and Harvey have stripped the three HMOs litigating those cases of their principal defenses, each of them has continued to file a host of motions and press other defenses in the district courts. "Prudential, MD-IPA, and Blue Cross Blue Shield are still refusing to return the money that they illegally took from their members," said TLPJ Staff Attorney F. Paul Bland, Jr., who argued all four appeals in these cases. "We hope that these hold-outs will follow the lead of Kaiser and Columbia Medical Plan, face reality, and do what is right. These HMOs have long resisted justice, but the courts have repeatedly and unanimously rejected each of their defenses. It's time for the consumers to get their money back." In addition to Bland and Wolf, TLPJ's legal team in Riemer includes Bruce Plaxen of Plaxen and Adler in Columbia, Maryland; TLPJ Foundation Board Member and lead counsel Kieron Quinn of Quinn, Gordon & Wolf, Chtd.; Rob Jenner and Steve Adelman of Janet, Willoughby, Gershon & Jenner; and TLPJ Goldberg-Deitzler Fellow Richard Frankel. TLPJ's briefs in Riemer v. Columbia Medical Plan are posted at www.tlpj.org. s
S P R I N G / S U M M E R 2 0 0 4 West Chester University Settles Title IX Lawsuit
University Agrees to Reinstate Women's Gymnastics Team Permanently W est Chester University a university has provided "equal oppor"This extraordinarily favorable settle(WCU) has agreed to settle tunities" for members of both sexes to ment reflects the strength of our claims a federal sex discrimination participate in sports. Judge Surrick against WCU," said co-counsel William lawsuit filed by TLPJ and the ordered WCU to reinstate the women's T. Hangley of HAS&P "The school . Philadelphia law firm of Hangley gymnastics team immediately and to finally realized the error of its ways and Aronchick Segal & Pudlin (HAS&P) provide the team with full funding, has given these wonderful athletes the charging that the state university's coaching, facilities, and equipment. In opportunity to compete that they were decision to eliminate its women's gymthe wake of that decision, the school originally promised. Our only regret is nastics team violated Title IX of the reinstated the team in time for the that it took a lawsuit to force WCU to Education Amendments of 1972, the 2004 competitive season. comply with the law." federal law that prohibits sex discrimiIn addition to agreeing to reinstate Despite a severely curtailed training nation by all educational institutions the team permanently, as part of the season and the other problems these athreceiving federal funds. On November settlement, WCU has agreed to (1) proletes had to overcome just to compete, 12, 2003, a federal court in the WCU women's gymPhiladelphia granted a prenastics team tied its record liminary injunction ordering high score at two separate WCU to reinstate its meets during the season. In women's gymnastics team addition, two exceptional immediately. WCU did so, athletes ­ WCU gymnasts but appealed that ruling to Stephanie Herrmann and the U.S. Court of Appeals for Ashley Gillman ­ particithe Third Circuit. After pated in the United States intensive settlement discusAssociation of Gymnasts sions, WCU has agreed to a (USAG) national competipermanent injunction that tion, which took place in requires it to keep the team April. In the past two years, and has dropped its appeal. WCU had refused to send "This is a thrilling victory qualifying women to the for women's rights," said lead national competition, citing WCU gymnasts Stephanie Herrmann and Ashley Gillman counsel Sharon McKee of the expense. This year, rece a special the USAG nationals after TLPJ HAS&P. "We are very pleased won ivedstatementaward atteam. Herrmann and Gillman rein of their that WCU has agreed to drop went, competed well, and its appeal and to give these dedicated vide at least one part-time head coach received the USAG's Mari-Rae Soper and inspiring women athletes the supand one part-time assistant coach; (2) Award, given to the athlete who has port that they need and deserve." use its best efforts to maintain a team of unparalleled passion, dedication, and The lawsuit, filed on September 4, at least 14 members; (3) raise the numdevotion to the sport of gymnastics. 2003, sought reinstatement of the ber of team members who may travel to "We are proud to represent the dediWCU women's gymnastics team. The compete in away meets; (4) permit the cated athletes on the WCU women's principal claim was that the school vioteam to keep all the scholarship money gymnastics team," said TLPJ Staff lated Title IX by cutting women's gymraised by it or on its behalf (subject to Attorney Leslie A. Brueckner, co-counnastics at a time when WCU's male applicable NCAA and WCU restricsel. "The settlement reached in this case athletes were already getting more than tions); and (5) send the gymnastics team will stop WCU from treating these aththeir fair share of participation opportuand/or individual qualifying team memletes as second-class citizens." nities. After hearing testimony on the bers to one post-season national gymIn addition to McKee, Hangley, plaintiffs' motion for a preliminary nastics competition every year. The setand Brueckner, the plaintiffs' legal team injunction, the Honorable R. Barclay tlement leaves WCU open to possible includes TLPJ's Rebecca Epstein, Adele Surrick of the Eastern District of future lawsuits challenging the school's Kimmel, and Arthur Bryant. The comPennsylvania held that WCU's decision treatment of women athletes, including plaint and other key legal documents in to cut the gymnastics team in response the funding of coaching and recruitthe sex discrimination case, Barrett v. to a budget crunch violated Title IX's ment and the number of athletic West Chester University, are posted on three-part test for determining whether opportunities afforded to women. TLPJ's web site, www.tlpj.org. s
S P R I N G / S U M M E R 2 0 0 4 P U B L I C J U S T I C E 5 Mandatory Arbitration Abuse Prevention News
Here are the latest updates on TLPJ's Mandatory Arbitration Abuse Prevention Project cases: Arbitrator Bias (CT) Hottle v. BDO Seidman The Connecticut Supreme Court granted review in this case on February 19, 2003 to determine if the court of appeals properly enforced an arbitration clause in an employment dispute involving an accounting firm, even though the clause provided that the panel of arbitrators to hear the dispute would all be partners in the accounting firm. On May 12, 2003, TLPJ filed an amicus brief urging the Connecticut Supreme Court to hold that any arbitration clause providing that the arbitrator will be a person or persons with strong financial ties to one party to the dispute is unenforceable. TLPJ's Paul Bland drafted the amicus brief, along with co-counsel Daniel Blinn of Danbury, Connecticut. On May 4, 2004, the Connecticut Supreme Court held that the clause was enforceable. Bad Faith Insurance (CA) Boghos v. Lloyd's of London Tony Boghos managed his own plumbing business until he was injured and disabled, losing his business and sole income. Boghos had a long-term disability insurance policy with Lloyd's of London, but Lloyd's denied him coverage after he was injured. Boghos sued Lloyd's in California state court for bad faith denial of insurance and breach of contract. Lloyd's moved to compel arbitration. The trial court denied the motion and Lloyd's appealed. TLPJ joined the case to represent Boghos on the appeal of the arbitration motion. On May 29, 2003, the California Court of Appeal, Sixth Division, held that Lloyd's could not compel arbitration because its policy allowed Boghos to litigate claims for amounts due and because the policy's arbitration clause illegally required Boghos to pay excessive arbitration
6 P U B L I C J U S T I C E costs. Lloyd's petitioned the California Supreme Court for review of this decision. The California Supreme Court granted review on September 24, 2003. Lloyd's filed its opening brief on the merits on November 24, 2003. TLPJ's brief on the merits for the plaintiff was filed on January 22, 2004. Amici curiae briefs in support of the plaintiff were filed by Consumer Attorneys of California, Public Citizen, AARP and the National Association of Consumer Advocates. TLPJ's Michael Quirk is briefing and arguing the appeal on the arbitration issue, with assistance from Kate Gordon and Paul Bland. Plaintiff's lead counsel is Robert H. Bohn of Bohn & Bohn in San Jose, California. Class Actions (CA) Discover Bank v. Superior Court of Los Angeles County A California court of appeal held that a contract containing an arbitration clause banning class actions, either in arbitration or in court, could not be found unconscionable under state contract law because such a finding was preempted by the Federal Arbitration Act (FAA). TLPJ's Paul Bland and Kate Gordon, with assistance from Michael Quirk, filed a petition for review with the California Supreme Court on February 21, 2003, arguing that the appeals court's decision goes against the weight of California law and basic principles of conflict preemption. The Court granted review on April 9, 2003. Briefing is complete and we await the scheduling of oral argument. Meanwhile, California Attorney General Bill Lockyer has requested depublication of the court of appeal's decision. TLPJ's co-counsel are Los Angeles attorneys Brian Strange, Gretchen Carpenter, and Barry Kramer. Class Actions (CA) Tamayo v. Brainstorm In this consumer deception case against a company that sells computers to low income and mostly Spanish speaking persons, and the company's lender, a federal district court refused to enforce the lender's arbitration clause. TLPJ, along with co-counsel Bryan Kemnitzer and Christopher Jennings of San Francisco and Eric Wayne Wright of Los Gatos, California, represents the consumers on appeal. The plaintiffs argue that they are not subject to binding arbitration because (1) there was no agreement to submit the plaintiffs' claims to binding arbitration under the language of the contract; (2) the arbitration clause is unconscionable because it prohibits class actions; and (3) the arbitration clause is unconscionable because it imposes prohibitive expenses upon the consumers. Briefing has been completed. TLPJ's Michael Quirk argued the appeal for the plaintiffs in the Ninth Circuit on August 13, 2003. On March 10, 2004, the Ninth Circuit held that the arbitration clause was unenforceable against defendant Brainstorm USA because it was not a signatory to nor a third-party beneficiary of the lender's arbitration clause. With regard to the lender, the Ninth Circuit stayed the appeal pending a decision by the California Supreme Court in Discover Bank v. Superior Court of Los Angeles County on whether clauses barring class-wide relief for consumers are unconscionable as a matter of California law. Class Actions (NY) Hayes v. County Bank This is a putative class action by borrowers alleging that a payday lending company violated New York civil rights and usury laws by targeting lowincome and predominantly AfricanAmerican communities for the marketing and issuance of short-term loans with annual interest rates in excess of 900%. A New York state trial court held that the payday lender's mandatory
Arbitration Updates, continued to page 8.
S P R I N G / S U M M E R 2 0 0 4 TLPJ Charges the National Arbitration Forum with Violating California Consumer Protection Law
California Legislator and Consumer Group File Lawsuit to Force Company to Disclose Information on Outcome and Cost of Arbitrations T LPJ filed a lawsuit in Superior Court in San Francisco against the National Arbitration Forum (NAF), charging that the private arbitration company is violating a California consumer protection law by refusing to disclose information about how it handles cases when consumer rights are at stake. That law requires private arbitration companies to disclose data about how many consumer cases they handle, which corporate defendants are involved, who wins, and how much consumers had to pay the arbitration company. Although the suit alleges that the NAF has handled numerous arbitrations subject to the law, it has not released any of the required information. For example, the NAF has failed to meet requirements to post such information online and to file reports in California on the outcome of consumer and employment arbitrations. The complaint in Corbett v. National Arbitration Forum was filed on May 17, 2004 as a representative lawsuit on behalf of all California consumers. The named plaintiffs in the case are Assemblymember Ellen M. Corbett (D-San Leandro) ­ who chairs the Assembly Judiciary Committee and authored the arbitration disclosure law ­ and Consumer Action, a San Francisco-based, national public interest organization that has successfully challenged abuses of mandatory, pre-dispute arbitration clauses. The plaintiffs seek a court order declaring that the NAF's refusal to disclose information about the arbitrations it handles violates California law, and requiring the company to disclose this information on its web site immediately. Although the California Code of Civil Procedure requires that arbitration companies disclose information about their consumer arbitrations by generating quarterly reports and posting this
2 0 0 4 Ellen Corbett Cliff Palefsky F. Paul Bland, Jr. Kate Gordon information on their web sites, the NAF has not posted any such information. On its web site, the NAF states that it has had no arbitrations in the period between January and December of 2003. However, the TLPJ lawsuit alleges that the NAF has presided over many California arbitrations in this period, and simply refuses to post information about these arbitrations on its web site. "California consumers may be surprised to know that if they drive a car, own a phone, or use a credit card, they're almost certainly subject to binding arbitration. That's why they need to know basic information about who is deciding their cases, and how much they may have to pay an arbitrator," said Corbett. "I am proud to have authored California's arbitration disclosure law, which ensures that consumers can make informed decisions about how to choose between private judging companies. The NAF ­ like every other private arbitration firm that does business in California ­ must give consumers the basic information required by California law." The NAF is one of the country's three largest arbitration companies. Consumer contracts often specify which one of these companies will hear any dispute between the consumer and the corporation supplying the consumer with goods or services. When the contract specifies a particular arbitration firm, that firm provides an arbitrator or panel of arbitrators to hear the dispute and sets out the rules that will govern that dispute. The other two major arbitration companies, the American Arbitration Association and J*A*M*S, comply with California's disclosure law. "By refusing to follow California's consumer protection laws, the NAF is deliberately denying consumers the ability to learn about the fairness and expense of its services," said Cliff Palefsky of San Francisco's McGuinn, Hillsman & Palefsky, co-lead counsel in the case. "The NAF is not above the law. How can consumers expect the NAF's arbitrators to follow the law when the company itself refuses to do so?" "It is particularly important that consumers be able to access information about the NAF because of allegations that it has engaged in a pattern of bias in favor of corporations and against injured consumers," said TLPJ Staff Attorney F. Paul Bland, Jr., co-lead counsel. "Several courts across the country have refused to enforce arbitration agreements that required consumers to arbitrate their claims before the NAF. The complaint in this case should give many consumers particularly strong reasons to want to know about the NAF's track record." In addition to Bland and Palefsky, the plaintiffs' legal team includes TLPJ's Executive Director Arthur Bryant and TLPJ Baron-Brayton Fellow Kate Gordon. The complaint in Corbett v. National Arbitration Forum is posted on TLPJ's web site, www.tlpj.org. s
P U B L I C J U S T I C E 7 S P R I N G / S U M M E R Arbitration Updates, continued from page 6. arbitration clause barring claims for class-wide relief was enforceable, and ordered the plaintiffs to arbitrate their claims. The plaintiffs appealed. On April 27, 2004, TLPJ filed an amicus brief on behalf of a coalition of public interest groups that include the New York Public Interest Research Group, the Greater Upstate Law Project, the Neighborhood Economic Development Advocacy Project, Consumer Federation of America, and AARP. The public interest groups' brief argues that: (1) the court has jurisdiction to hear the plaintiffs' appeal because the Federal Arbitration Act does not preempt New York's rule allowing direct appeals from orders compelling arbitration; (2) the arbitration clause is unconscionable under New York contract law because it bars claims for class-wide relief; and (3) the Federal Arbitration Act does not preempt this application of New York contract law. TLPJ's Michael Quirk and Richard Frankel wrote the amicus brief with input from Paul Bland and co-counsel Deborah Zuckerman of AARP, Russ Hayes of NYPIRG, and Rachel Weintraub of CFA. Costs of Arbitration (AL) Leeman v. Cook's Pest Control A public school teacher and principal in Alabama brought suit against a termite control company alleging that the company had not adequately inspected and maintained their home. The company moved to compel arbitration under the American Arbitration Association (AAA) Commercial Rules. Plaintiffs objected to arbitration on the basis that it would cost thousands of dollars. Plaintiffs based this objection on the fact that their trial counsel had previously arbitrated five cases against pest control companies under the AAA Commercial Rules and had faced initial costs of about $4000, plus arbitrator costs of $10,000 or more. An Alabama court of appeals rejected plaintiffs' argument; plaintiffs appealed to the Alabama Supreme Court. TLPJ's
8 P U B L I C J U S T I C E Paul Bland and Kate Gordon wrote the opening and reply brief, arguing that these costs are prohibitive and will prevent plaintiffs from vindicating their rights. Co-counsel is Tom Campbell of Campbell & Baker in Birmingham, Alabama. We await the scheduling of oral argument. Employment Discrimination (AL) Luke v. Baptist Medical CenterPrinceton Fonza Luke, a 59-year-old AfricanAmerican nurse, repeatedly refused to sign her employer's arbitration clause in November 1997, stating "I refuse to sign my rights away." The hospital terminated her employment in March 2001. Luke filed federal race and age discrimination claims, and the hospital moved to compel arbitration. A federal district court in Alabama held that Luke's continuing employment signified her implicit agreement to arbitration, despite her explicit refusal. TLPJ represented Luke on her appeal of the district court's order to the U.S. Court of Appeals for the Eleventh Circuit. We filed the primary appellate brief on October 7, 2003. On March 9, 2004, the Eleventh Circuit affirmed the district court and held that Ms. Luke agreed to arbitrate her federal employment discrimination claims by continuing to work after her employer showed her its arbitration clause and that her repeated refusals to agree to be bound by the arbitration clause were irrelevant to the question of whether she gave her assent. TLPJ's Michael Quirk wrote the appellate briefs for Ms. Luke, with assistance from Paul Bland and Kerry-Ann Powell. Plaintiff's lead counsel is Mark Elovitz of Birmingham, Alabama. Forum Selection and Costs (CA) Nagrampa v. MailCoups, Inc. A district court in California held that an arbitration clause in a contract between a one-woman franchisee and a national franchisor was not unconscionable, even though the clause required arbitration in Massachusetts and the arbitral forum required the franchisee to pay over $7,000 simply to defend herself against an action by the franchisor. TLPJ is lead counsel on the appeal to the U.S. Court of Appeals for the Ninth Circuit, where we argue that the forum selection and cost provisions are unconscionable, and that the arbitral panel ­ the American Arbitration Association (AAA) ­ is biased because it depends on repeat contracts with the franchisor. The case was fully briefed as of September 29, 2003, and we await the scheduling of oral argument. Meanwhile, MailCoups has gone to the federal district court in Northern California to attempt to enforce an arbitration award it secured against the franchisee, and TLPJ is handling the franchisee's defense in that court. TLPJ obtained a stay of the district court action until the Ninth Circuit reaches a decision. TLPJ's Kate Gordon is taking the lead in briefing and arguing this case, with assistance from Paul Bland and Michael Quirk. TLPJ's co-counsel in the appeal is the Law Firm of Sanford M. Cipinko in San Francisco. Illegal Contracts (FL) Cardegna v. Buckeye Check Cashing Consumers allege that a payday lender charging interest rates of 350% has violated Florida's usury laws. The trial court denied the payday lender's motion to compel arbitration, in part because it ruled that the entire contract is illegal under Florida law. On July 24, 2002, the Fourth District Court of Appeals reversed, compelling arbitration. On April 25, 2003, the Florida Supreme Court accepted the case. The plaintiffs filed their opening brief on June 6, 2003. TLPJ's Paul Bland and co-counsel Clayton Yates of Fort Pierce, Florida, Christopher Casper of Tampa, Florida, and Richard Fisher of Cleveland, Tennessee wrote the opening brief, with input from TLPJ's Michael Quirk and Kate Gordon. Paul Bland and Clayton Yates co-argued the case on October 7, 2003.
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S P R I N G / S U M M E R 2 0 0 4 Continued from previous page. Magnuson-Moss Warranty Act (MI) Abela v. General Motors Corp. A Michigan GM employee and consumer sued for a declaration that GM's arbitration clause violates the Magnuson-Moss Warranty Act and the Michigan Lemon Law. The trial court granted partial summary judgment for the plaintiff, finding that GM's arbitration clause violated both statutes. On July 17, 2003, the Michigan Court of Appeals reversed the trial court and held that claims under under the Magnuson-Moss Warranty Act and the Michigan Lemon Law may be compelled into arbitration. Plaintiffs filed a petition for certiorari to the Michigan Supreme Court on August 4, 2003. Without permitting full briefing or argument, on April 7, 2004, the Michigan Supreme Court affirmed the Court of Appeals' ruling. Two justices filed a separate statement, saying that they would have permitted full briefing. Plaintiffs intend to file a petition for certiorari with the U.S. Supreme Court. TLPJ's Paul Bland and Mike Quirk have taken the lead on the appeal, and our co-counsel are E. Powell Miller of Troy, Michigan, and Christopher M. Lovasz and Mark Romano of Consumer Legal Services in Garden City, Michigan. Non-Mutual and Remedy-Limiting Arbitration Requirement (WI) Eastman v. Conseco Finance Servicing Corp. Borrowers filed a putative class action against a sub-prime mortgage lender challenging some of its fees as unlawful under the Wisconsin Consumer Act. The lender moved to compel arbitration. The Wisconsin state trial court refused to compel arbitration, holding that the lender's arbitration clause was unconscionable because it required borrowers to take their claims to arbitration but imposed no such requirement on the lender. TLPJ represents the plaintiffs on the lender's appeal of this order. On May 29, 2002, the Wisconsin Court of
S P R I N G / S U M M E R 2 0 0 4 Appeals certified the appeal to the Wisconsin Supreme Court to determine whether the one-sided consumer arbitration clause is unconscionable and whether the plaintiffs would be able to maintain a class action and obtain punitive damages and injunctive relief in arbitration. The Wisconsin Supreme Court accepted the certification on September 27, 2002. The week before the case was scheduled for oral argument, the court stayed the case due to the defendant's bankruptcy filing. Subsequent to the close of bankruptcy proceedings, the Wisconsin Supreme Court has requested supplemental briefing on whether the bankruptcy compels dismissal of the case. TLPJ's Michael Quirk wrote the plaintiffs' brief to the Wisconsin Supreme Court with assistance from Kate Gordon, Paul Bland, and Leslie Brueckner. The Wisconsin Attorney General's Office, the Legal Aid Society of Milwaukee, the Center for Public Representation, and groups of professors from the University of Wisconsin and Marquette University Law Schools have filed amicus briefs in support of the plaintiffs. Statutory Rights (FL) Bautista v. Star Cruises On October 14, 2003, the U.S. District Court for the Southern District of Florida held that Filipino seamen working on cruise ships, who have certain labor rights granted to them under the Jones Act, may be compelled to arbitrate claims for wrongful death and personal injury before labor arbitrators in the Philippines. The plaintiffs in the case are the widows of six seamen who were killed when a cruise ship's boiler exploded; plaintiffs also include several seamen injured in the explosion. The U.S. Court of Appeals for the Eleventh Circuit granted review of this case in November 2003 to determine whether the district court was correct in holding that the Convention on the Enforcement of Foreign Arbitral Awards (the international companion to the Federal Arbitration Act) does not exempt sea- men, and whether the arbitration clause in this case is valid. On March 25, 2004, TLPJ and ATLA submitted an amicus brief in the case. The brief focused on the historical protection of seamen under the Jones Act. It also focused on the fact that, under this arbitration clause, plaintiffs will effectively lose all their substantive rights under the Act because the Philippine Supreme Court recently held that labor arbitrators in that country have no jurisdiction to grant Jones Act remedies, such as lost future wages. Kate Gordon authored TLPJ's section of the amicus brief, with assistance from Paul Bland. Plaintiffs' lead counsel is William Huggett from the Huggett Law Firm in Miami, Florida. Briefing in the case was completed on May 21, 2004. Waiver (FL) Saldukas v. Raymond James The plaintiffs allege that their broker's handling of their account violated the state's securities laws. They initiated arbitration, but Raymond James responded that it did not recognize any agreement to arbitrate or obligation to arbitrate, and that if the arbitrator found that there was such an agreement it would go to court to seek an injunction against arbitration. The plaintiffs then sued in court, where the defendants moved to dismiss the case. After the trial court denied the defendants' motion to dismiss, they moved to compel arbitration. The trial court held that the defendants had waived their right to arbitrate, and the court of appeals affirmed that decision. The defendants pointed out a conflict among the federal courts of appeal and the Florida district courts of appeal on the appropriate legal standard to be applied, and the Florida Supreme Court took jurisdiction over the case. Paul Bland, along with co-counsel Ben Isenberg and Christopher Vernon of Naples, Florida, filed the plaintiffs' brief in the Florida Supreme Court on December 18, 2003. Oral argument took place on June 9, 2004. s
P U B L I C J U S T I C E 9 Toxic Pollution
continued from page 1. that the plumes were a public health hazard to Cheshire residents. In 2002, AEP bought out almost the entire Village of Cheshire for $20 million so that residents would move away. Nearly all of them did, then AEP demolished most of the houses there. But AEP did not stop polluting, and the few people left in the village ­ and all those nearby ­ are suffering terribly. They have a host of health problems, such as sore throats, mouth sores, eye irritation, difficulty breathing, and headaches from exposure to the Plant's fumes. TLPJ represents 82 of these residents who have joined together in a group called Citizens Against Pollution (CAP) to fight for clean air in their community. "Although the Gavin Plant's toxic pollution is harming us and our children, the regulatory agencies have failed to protect us," said Paul Stinson, CAP's President. "We filed this citizen suit to protect our families' health and to hold American Electric Power Company responsible for polluting the air we breathe with sulfuric acid." CAP's lawsuit, filed in U.S. District Court for the Southern District of Ohio in Columbus, alleges that AEP has violated the federal Resource Conservation and Recovery Act (RCRA) by releasing amounts of sulfuric acid mist that are a "substantial and imminent endangerment" to public health. A recent internal Ohio Environmental Protection Agency modeling analysis estimates that concentrations of sulfuric acid near the Gavin Plant exceed the state's health standards. CAP is seeking an injunction requiring AEP to stop CAP President Paul Stinson with plaintiffs' attorneys Jim Hecker, endangering Brian Glasser, and Ross Johnston. public health. The suit also alleges that AEP has that they are breathing. CAP is seeking violated two other federal statutes, the injunctive relief and civil penalties Comprehensive Environmental payable to the government on these Response, Compensation and Liability claims. CAP is not seeking damages for Act (CERCLA or Superfund), and the personal injuries on any of its claims. Emergency Planning and Community "AEP is trying to evade accountabiliRight-to-Know Act (EPCRA). If a ty by shirking its duty to file a report facility releases more than 1,000 for each day that it emits more than pounds per day of sulfuric acid, it has 1,000 pounds of sulfuric acid," said to report those releases promptly to fedco-counsel Jim Hecker, TLPJ's Envieral and local agencies so that the govronmental Enforcement Director. ernment can respond and the public "Coal-fired power plants are the nation's knows of the potential hazard. The lawlargest air polluters, and the Gavin suit alleges that AEP has failed to report Plant is Ohio's biggest and one of its its releases and has improperly claimed dirtiest polluters." it is eligible for a reporting exemption TLPJ's co-counsel in the case are for "continuous" releases that are "stable Jim Ferraro and Ross M. Johnston of in quantity and rate." While claiming Ferraro & Associates in Miami, Florida stability, AEP says that it emits between and Brian Glasser of Bailey & Glasser zero and 64,000 pounds per day of sulin Charleston, West Virginia. A copy furic acid. CAP contends that AEP's of the complaint in Citizens Against releases are unstable and must be Pollution v. American Electric Power reported on a daily basis so residents Company is posted on TLPJ's web site can promptly know what is in the air at www.tlpj.org. s OUR MISSION
Trial Lawyers for Public Justice is the only national public interest law firm that marshals the skills and resources of trial lawyers to create a more just society. Through creative litigation, public education, and innovative work with the broader public interest community, we:
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1 0 s s hold accountable those who abuse power; challenge governmental, corporate and individual wrongdoing; increase access to the courts; combat threats to our justice system; and inspire lawyers and others to serve the public interest. s
S P R I N G / S U M M E R 2 0 0 4 s s s protect people and the environment;
P U B L I C J U S T I C E Leaked Documents Reveal EP Employees' Outrage A Over Asbestos Removal Experiment in Texas
Public Health Experts and Environmental Advocates Decry City of Fort Worth's Building Demolition Proposal as Serious Public Health Threat I nternal documents evaluating an experimental asbestos removal plan leaked by U.S. Environmental Protection Agency (EPA) employees to two national public interest law firms ­ TLPJ and Natural Resources Defense Council (NRDC) ­ reveal EPA employees' outrage over a proposal by the City of Fort Worth, Texas to demolish a motel complex using a new building demolition method that is far weaker than the one currently required by federal regulations. The eight leaked documents ­ made public on May 25, 2004 on TLPJ's web site, www.tlpj.org ­ describe this method as a potentially dangerous human health experiment that should be, but has not yet been, reviewed by an ethics panel. Public health experts, union leaders, and environmental advocates decry the new "Fort Worth Experiment" as a public health threat that could expose asbestos removal workers and people living near the test site ­ the Cowtown Inn, a s