Consumer Fraud/Consumer Protection

Amicus Brief Filed by Illinois Trial Lawyers Association and National Association of Consumer Advocates in Illinois Class Action Appeal Regarding Government Required Processing Fee That is Not in Fact a Government Charge

February 14, 2011 | Peter S. Lubin and James V. DiTommaso

The Illinois Trial Lawyers Association and the National Association of Consumer Advocates filed an amicus or friend of the Court brief before Illinois’s First District Appellate Court in an appeal in a consumer fraud and breach of contract class action DiTommaso Lubin is prosecuting. The brief explains why the right to pursue class actions is so important to consumers who cannot afford an attorney to correct small frauds or unfair practices which can result in Defendants reaping large gains. The brief states:

Another significant statement that appears in the defendant’s brief is the following:
“If the Circuit Court ruling is reversed, it is highly likely this case will be settled, given the low dollar value of Plaintiff’s individual claim for damages and the fact that the Plaintiff has no evidence that any other Advance customer allegedly also misunderstood the Governement Required Processing Fee. …

As to the statement that if the class certification decision is reversed, it is highly likely the case will be settled, given the low dollar value of the plaintiff’s individual claim. This is precisely why this claim needs to proceed as a class action.

As pointed out by Judge Posner, a defendant who resists a class action by stating that there are a multitude of class members makes no argument at all. “The more claimants there are, the more likely a class action is to yield substantial economies in litigation. It would hardly be an improvement to have in lieu of this single class action, 17 million suits, each seeking damages of $15 to $30 . . . The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30. But a class action has to be unwieldy indeed before it can be pronounced an inferior alternative – no matter how massive the fraud or other wrongdoing that will go unpunished if class treatment is denied – to no litigation at all.” Carnegie v. Household International Inc., 376 F.3d 656, 661 (7th Cir. 2004) (emphasis in original).

The courts developed the class action device to handle cases like this one. “The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997).

The Defendant has tipped its hand in its statement that the case will settle if the court reverses class certification. This is because if the court reverses class certification the defendant will pay off the Plaintiff by refunding the small sum of money it managed to take from it …

To review the full brief click here

Appellate Court Certifies Class-Action in Title Insurance and Consumer Fraud Act Case

February 7, 2011 | Peter S. Lubin and James V. DiTommaso

The purchase of land is a complex and multi-layered process that presents many opportunities for not only misunderstandings and mistakes, but also fraud and misrepresentations. DiTommaso Lubin has many attorneys who focus on handling consumer fraud cases, so we are always tracking developments in that field of the law. Chultem v. Ticor Title Insurance is a recent Illinois appellate decision concerning title insurance agent kickbacks in the sale of real properties here in Illinois.

Chultem v. Ticor Title Insurance began as two separate class-actions that were consolidated into one case. In both cases, however, Plaintiffs purchased a parcel of land that also included the purchase of a title insurance policy from Defendants. Plaintiffs were sold the title insurance by an attorney agent who also represented one or more of the parties in the real estate transactions in question. Defendants, as title insurance companies, paid these lawyer agents an additional sum “over and above the attorney fees” paid to them by their clients (who were parties to the transaction).

Plaintiffs filed suit because Defendants paid the attorney agents based upon “the amount of insurance premiums generated from the referred clients” instead of for the services that the lawyers actually performed in their role as title insurance agents. In doing so, Plaintiffs alleged that in doing so, Defendants violated the Title Insurance Act and the Consumer Fraud and Deceptive Business Practices Act. Plaintiffs sought to certify a class, but the lower court denied certification because it would not be possible to determine across the board liability. Plaintiffs then filed an appeal.

On appeal, the Court addressed Defendants’ argument that a transaction-by-transaction analysis would be required in order to determine liability, and as such common issues could not predominate as required for class certification. The Court did not find Defendants’ arguments persuasive, however, because the agreement between the attorney agents and Defendants provided for a pro forma commitment. The Court went on to reason that if Plaintiffs are able to show that the agreements were pro forma and that the agents received full compensation as insurance agents, then liability for all claims could be established. Therefore the Court reversed the lower court ruling and remanded the case consistent with the finding that the Plaintiffs had satisfied the predominance requirement for class-certification.

Consumer Law and Policy Blog Reports on New California Supreme Court Opinion Affirming Consumer’s Right to Sue for False Advertising Claims

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

Consumer Law and Policy Blog reports:

In a closely watched case, the California Supreme Court on Thursday issued a decision preserving the broad availability of the state’s principal consumer protection laws in cases involving mislabeled goods.The question at issue in Kwikset v. Superior Court (Benson) was whether a consumer who has bought a product that was mislabeled — a “union-made” shirt that was in fact manufactured in a sweatshop, “organic” produce that was grown with pesticides, or (as in this case) a “Made in the USA” lockset that had actually been partly manufactured in Taiwan and Mexico — may bring suit under the Unfair Competition Law (UCL) and the False Advertising Law (FAL). Proposition 64, passed by referendum in 2004, inserted in both laws a requirement that a private plaintiff have “lost money or property.” But what if the product the customer received was perfectly functional even if it wasn’t what the customer had ordered? Was there still a loss of money or property? The Court of Appeal thought not: since the item received was of equal value, plaintiffs had not “lost money” and therefore could not bring a claim under the UCL or FAL.

The California Supreme Court, however, disagreed. The Supreme Court held that neither the language nor the logic of Prop 64 precluded suits by consumers who did not get what they paid for. “Plaintiffs who can truthfully allege they were deceived by a product’s label into spending money to purchase the product, and would not have purchased it otherwise, have ‘lost money or property’ within the meaning of Proposition 64 and have standing to sue.” It doesn’t matter that to some other people, or by some objective measure, the mislabeled product is worth as much as the one the consumer expected. What matters is the consumer’s subjective valuation.

Courthouse News Reports: “Class Claims AT&T Rigs Bills for iPhones”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

Courthouse News Reports:

AT&T Mobility faces another federal class action involving its iPhone and iPad services. This one claims that “AT&T’s bills systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account,” and bills customers for data transactions even if they disable their phones and leave them untouched – as the plaintiff’s experts did.

The class says AT&T’s billing system “is like a rigged gas tank that charges pump that charges for a full gallon when it pumps only nine-tenths of a gallon into your car’s tank.”

The Times Herald Record Reports: “Orange County Man Leads National Class-Action Suit Against Wristband-Maker”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

Snake oil salesman have been around our country for well over a hundred years. With low cost cable and internet advertising readily available the art of selling products that promise the moon but don’t deliver has reached new heights. Add some celebrity endorsements and a clever informercial and the money flows in.

Class-actions alleging that Power Balance wristbanks which are endorsed by NBA stars Shaquille O’Neal and Lamar Odom don’t turn the wearers into super star athletes and don’t provide any of the promised benefits have been filed all around the country, including a new alleged class-action suit in Orange County California according to an article in the Times Herald Record. To read the full article click here.

Our Nationwide class action lawyers have filed class-actions regarding alleged informercial scams and to recover monies consumers have lost due to false advertising. We also help consumers and workers who have been ripped off by all kinds of frauds whether they be mass frauds, failure to pay minimum wages or overtime pay or an indvidual car sale. We have resolved class action claims for hundreds of millions of dollars in benefits to the class and also work just as hard to represent individual consumers who have been ripped on in a single transaction. For instance, we just settled an indivual car fraud case for a $100,000. The victim spent all of her savings of $9,000 to purchase a used car from a major Chicago Automobile dealer. The Autodealer misrepresented that the car was in good condiction and concealed that it was in reality 3 cars welded together with 3 different VIN numbers. The dealer paid all of our attorneys fees and costs and the remainder of the money in excess of $45,000 went to the victim who didn’t have to pay any fees or costs other than the $250 fee of the expert appraiser to pursue the case.

DiTommaso Lubin attorney Peter Lubin has been selected by Super Lawyers as one of the top class-action attorneys in Illinois as rated by their peers.

Reuter’s Reports: “B of A to Pay $410 million to Settle Over Draft Lawsuit”

February 6, 2011 | Peter S. Lubin and James V. DiTommaso

A number of national banks have been facing class-action lawsuits for allegedly misusing over draft fees on checking accounts to generate hundreds of millions of dollars in extra revenues. The way the Banks have achieved this is by reorganizing debits from debit cards by the size of the transaction as opposed to in date order and also denying customers the option of turning the transaction down and then charging large fees for the overdrafts.

Reuters reports that Bank of America has agreed to pay $410 million to settle a class-action lawsuit that has been pending for a number of years which makes these very allegations. To read the full article click here.

Our Woodstock, Illinois consumer rights private law firm handles individual and class action predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. The Chicago consumer rights attorneys at DiTommaso Lubin are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

NPR Reports: “For-Profit Colleges Encouraged Fraud, Used Deceptive Marketing, GAO Reports”

January 4, 2011 | Peter S. Lubin and James V. DiTommaso

Our Chicago consumer rights attorneys are pursuing and investigating class-action lawsuits against for profit trade schools that have allegedly duped students into taking classes even though there is little or no prospect of the students obtaining work in the field after taking the course. We have obtained class certification in one such case and seeking to file other cases under the correct factual circumstances.

If you have been duped into paying a subtantial sum to a for profit trade school only to find that it is impossible to find a job in the field, please contact one of our Chicago consumer rights lawyers online by clicking here. DiTommaso Lubin’s Oak Brook and Chicago consumer class action attorneys have been handling consumer rights and class action cases for over a quarter century. You can view the the types of cases we have handled at our website.

NPR Reports: “Holes in Monitoring System Let Lemons Get Resold”

January 4, 2011 | Peter S. Lubin and James V. DiTommaso

Our Chicago auto-fraud lawyers focus on bringing suit for auto-fraud claims. We recently settled a suit involving purchase of $9,000 used car that was in reality 3 different cars welded together for $100,000. Our fees come from the recovery and we only get paid if we win or settle your case. We have has similar large six figure or near six figure settlements for clients who purchased certified used cars that in fact were rebuilt wrecks.

If you believe you purchased a motorcycle, car, rv or other product that is a lemon, have been a victim of auto fraud, auto dealer fraud, auto repair fraud or have been deceived into buying a flood car, rebuilt wreck or salvage vechicle DiTommaso Lubin may be able to help rectify the problem. We or experienced co-counsel are prepared to file suit in the right case in the Chicago area or anywhere in the country. For a free consultation on your rights as an employee, contact us today.

Our Auto Dealer Fraud, Auto Repair Fraud Auto Fraud, RV Fraud, Motorcycle Fraud and Boat Fraud private law firm and our affliated co-counsel handle individual and class action consumer rights, lemon law, and autofraud lawsuits that government agencies and public interest law firms may decide not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. DiTommaso Lubin is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to employee and consumer fraud and rip-offs, and in the right case filing employee or consumer protection lawsuits and class-actions you too can help ensure that consumers’ rights are protected from unscrupulous, illegal or dishonest practices.

Kentucky Supreme Court Affirms that Consumer Class Action Can Proceed as Class Actions

December 21, 2010 | Peter S. Lubin and James V. DiTommaso

The Kentucky Supreme Court rejected a contractual ban on class actions by Insignt in a case regarding a mass shut down of consumer internet services

The Court held a class action “is often the only economically viable legal procedure” to address a large volume of very small claims, the court said in an opinion issued Thursday. For that reason, it said, a ban on class actions like the one in Insight’s contract “may effectively shield a company from liability for unlawful activity.” In the Insight case, consumers were seeking refunds on $40 bills and absent a class action that would not able to retain a lawyer to act as a private Attorney General to vindicate their rights and those of the other victims.

The Court provided this example:

Fifth District Reverses Decision to Deny Arbitration Clause in Fiduciary Duty Case

December 21, 2010 | Peter S. Lubin and James V. DiTommaso

Our Illinois alternative dispute resolution lawyers noted an opinion from the Fifth District Court of Appeal reversing a trial court that declined to compel arbitration. In Hollingshead v. A. G. Edwards & Sons, Inc., No. 1-09-0067 (Ill. 5th Jan. 22, 2009), the court ruled there simply was not enough evidence to support the trial court’s decision to deny to compel arbitration. The case pits Carol Hollingshead, independent administrator of the estate of Selma Elliott, against Elliott’s investment company and Leonard Suess, an investment advisor there and Elliott’s son-in-law. Hollingshead sued the defendants for various causes of action related to financial mismanagement, but defendants moved to compel arbitration under several contracts related to the investment accounts. The trial court denied this motion without an explanation or an evidentiary hearing.

Elliott passed away in 2003 at the age of 101. During her lifetime, she had an account at A.G. Edwards, managed by Suess. Her power of attorney was granted to her daughter, Judy Suess, at the time of her death, so that Judy Suess could manage Elliott’s affairs. Those affairs included 11,000 shares of stock in the pharmaceutical company Merck, which had a value of $985,000 in 2001. Around 1994, defendants used that value to open up a margin account and buy other stock. Unfortunately, the value of her portfolio dropped significantly and the defendants began selling off the Merck stock to cover margin calls. Plaintiff claims this triggered tax liabilities that could easily have been avoided if the sale had happened after Elliott’s death. She sued them for breach of fiduciary duty, breach of contract and negligence.

However, Elliott had signed three contracts with Edwards before her death and Judy Suess as power of attorney had signed another, and all of them had an arbitration agreement. Defendants moved to dismiss the case and compel arbitration on this basis. The trial court heard arguments that did not get into the record on appeal, then denied the motion without comment. Defendants filed an interlocutory appeal. They argued that the contracts are the only evidence in the record and clearly apply to the lawsuit. The plaintiff argued in response that the arbitration agreements are substantively and procedurally unconscionable and the product of undue influence, all of which make them unenforceable. Defendants responded that this is a question for an arbitrator to decide.

The Fifth started with this last issue. It did not agree. Under caselaw, arbitrability is an issue for the courts unless the parties have specifically agreed otherwise, it wrote. The plaintiff is not challenging the validity of the contracts as a whole — indeed, she is relying on them in the breach of contract count.

Next, the court examined the plaintiffs’ arguments to invalidate the arbitration agreements. Under the Federal Arbitration Act, arbitration agreements are enforceable except “on such grounds that exist at law or in equity for the revocation of any contract.” This includes the plaintiff’s claims of unconscionability and undue influence. However, the court found that generally, there was no support in the record for the plaintiff’s arguments. To support the claims of unconscionability, the plaintiff made allegations in her complaint about Elliott’s age and the relationship between her and the Suesses, but did not provide any evidence, the court said. Nor do the allegations in the complaint, even if taken as true, support those defenses, it added. Under caselaw, advanced age is not enough in itself to show that a person is incapable of signing contracts, the court noted, and there is nothing per se procedurally unconscionable about having a relative for a broker.

Similarly, the Fifth found no evidence in the record to support the undue influence claim, aside from unsubstantiated claims about the familial relationship between Elliott and the Suesses. The plaintiff also made claims for substantive unconscionability, saying the $1,575 cost of arbitration is too high and the forum is biased. Again, the Fifth found, these claims are not supported by sufficient evidence in the record. It also dismissed a claim that waiving judicial review is inherently unconscionable, noting that this is directly contradicted by the FAA. For those reasons, the Fifth found that the trial court should not have declined to compel arbitration without an evidentiary hearing. It reversed that decision and remanded it to the trial court for further proceedings — including an evidentiary hearing, the Fifth said, if the plaintiff requests one.