Allegations Against Dish Network

In this class action lawsuit, Plaintiff alleged on behalf of the putative class that Dish Network violated the FCRA in the following ways:

• Reporting outdated consumer information that was more than seven years old;
• Obtaining consumer reports without the valid authorization of prospective and current employees;
• Failing to inform prospective employees how consumer reports would be obtained; and
• Using information obtained in consumer reports to make hiring decisions without providing applicants with a copy of the report and an opportunity to correct any inaccurate information contained in the report.

The background check system used by Dish Network rated prospective employees, and current employees considered for promotions as: “high risk,” “low risk,” or “review”.  However, these ratings were developed through acquiring background information from prospective and current employees without obtaining their consent, or providing appropriate notice, as required under the FCRA.  In other words, the rating system of Dish Network was a clear violation of the law.

Dish Network Settles Lawsuit

Dish Network settled all claims associated with this class action lawsuit for $1.75 million.  This settlement leaves the one class of plaintiffs (contractor technicians) with approximately $480 each, with another class of individuals receiving approximately $80 each for the Defendants FCRA violations. 

Contact a Consumer Protection Attorney Today

If a prospective or current employer has conducted a background check without your written consent, or failed to notify you of your rights following the background check, it is crucial to act quickly to determine if your rights have been violated under the FCRA.  To learn more about what options may be available to you, contact The Kim Law Firm, LLC by calling 855-996-6342 to schedule an initial consultation with one of our Consumer Protection and FCRA Attorneys.

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Why file a class action instead of an individual lawsuit?

The primary benefit to class actions is their efficiency.  In circumstances where there could be numerous plaintiffs, so that it is impractical to litigate all their claims separately, a class action consolidates all the elements of the case in one court – attorneys, defendants, witnesses, evidence, and a judge who is familiar with all the details.  The class action device also makes it possible to hold wrongdoers accountable where each person’s injury is too small to make an individual lawsuit economically feasible.  The value of the case increases significantly when all claims are pooled together, lowering the usually high cost of litigation.

How does a class action get started?

A class action begins when an individual or small group of individuals files a lawsuit and requests that the court certify a class, with them as class representatives.  Before allowing the case to proceed as a class action, the court must decide, among other things, that:

• the class is so numerous that joining all members to the lawsuit is impracticable;
• there are questions of law or fact common to the class;
• the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
• the representative parties will fairly and adequately represent the interests of the class.  (See Federal Rule of Civil Procedure 23 and Pennsylvania Code Rule 1702.)

Once the court certifies a class, all members of the class are entitled to notice of the lawsuit.  The class representatives are responsible for notifying potential class members.  Depending on the circumstances, this notice can take a variety of forms:

• television ads;
• newspaper ads;
• posted flyers;
• individual mailings; and
• email.

Once an individual receives notice, she may be required to notify the court that she wishes to “opt in” – that is, join the class.  More likely, however, is that the class will include all individuals who do not specifically “opt out” – that is, notify the court that they wish to pursue their own individual lawsuits.

What happens when a class action ends?

When a class action concludes, the results bind all members of the class, even if they have not directly participated in the lawsuit.  If there is a judgment against the defendant, the court will work with the lawyers and parties to develop a plan to distribute any recovery to the class members.  If the parties decide to settle, the court must approve any settlement. If the defendant wins, none of the class members can sue on their own in the future. 

Consult a Philadelphia class action attorney

The Philadelphia lawyers of The Kim Law Firm, LLC, have experience identifying and pursuing commercial and consumer based class actions that may impact and enhance consumer protection.  If you have questions about your case, contact The Kim Law Firm for a consultation today.

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Big Data’s Benefits

The FTC’s report describes several benefits that big data usage can provide to consumers and to society at large.  Some of these benefits include:

• More effectively matching products and services to consumers;

• Targeting educational opportunities to low income and underserved populations;

• Providing access to credit through nontraditional methods, e.g., by using newly-developed alternative credit scoring methods; and

• Providing healthcare tailored to individual patients’ characteristics.

Big Data’s Risks

Along with its potential benefits, big data carries big risks for consumers.  According to the FTC, some of these risks include:

• More individuals mistakenly being denied credit based on the actions of others.  The Commission gives the example of credit card companies lowering a consumer’s credit limit based not on that consumer’s repayment history but on an analysis of other consumers with a poor repayment history who shopped at the same places that consumer shopped.

• Creating or reinforcing existing inequalities.  For instance, low income consumers who might be eligible for certain credit offers may not receive them because those offers are targeted elsewhere.

• Assisting unscrupulous companies to target vulnerable consumers for fraud.

• Creating new justifications for excluding certain consumers.

As the National Law Review explains, the FTC’s report further expresses concerns that certain uses of big data might violate federal statutes designed to protect consumers and others. 

The Fair Credit Reporting Act

As this blog has discussed, the Fair Credit Reporting Act (FCRA) regulates how consumer reporting agencies (CRAs) collect, distribute and manage your information.  According to the FTC, companies using big data might in certain circumstances be considered CRAs and therefore subject to the FCRA’s requirements. 

The Equal Credit Opportunity Act and other Equal Opportunity Statutes

The Equal Credit Opportunity Act (ECOA), along with other federal equal opportunity and civil rights laws, prohibits discrimination on the basis of “protected characteristics,” which include gender, race, color, religion, age, disability, and others.  Using a big data model to treat consumers differently on the basis of these protected characteristics would be illegal.  Additionally, using big data analytics in a way that disproportionately impacts individuals who share a protected characteristic would violate some of these laws.

The Federal Trade Commission Act

The Federal Trade Commission Act prohibits unfair and deceptive practices in or affecting commerce.  One way this law could be violated, according to the National Law Review’s article, is if an organization breaks a promise to consumers not to share data, or fails to disclose material information related to that data’s use.

Consult a Philadelphia consumer protection attorney

The Kim Law Firm, LLC, stands up for the rights of consumers in a variety of matters, including violations of the FCRA and the improper release of personal or sensitive information through a data breach.  Contact The Kim Law Firm today for a consultation on your case.

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Arbitration is a legal way to resolve disputes

Arbitration has been a legal method for resolving disputes outside the court system since Congress passed the FAA in 1925. The idea behind arbitration, as with other methods of alternative dispute resolution, is to resolve disputes between parties more quickly and cheaply than litigation can. In recent decades, business use of mandatory arbitration clauses has skyrocketed. According to another Consumer Reports.org story, such clauses are now hidden in hundreds of millions of consumer contracts. Businesses using them include Netflix, Amazon, Groupon, and Verizon, as well as banks, financial services, insurance policies and even employment agreements. These clauses force consumers to arbitrate disputes with companies instead of suing them in court. Generally, they are included in the fine print of lengthy contract documents and consumers are not even aware of them.

This situation would not be bad if arbitration were not so detrimental to consumers. Certainly, if consumers were able to recover damages to the same extent in arbitration as they could in litigation, businesses would not be so quick to include arbitration clauses in their documents. The American Bar Journal, citing a report in the New York Times, reports that statistically, arbitration is less likely than litigation to result in any award to consumers. An arbitration critic quoted in the Bar Journal notes that the excessive use of arbitration clauses represents the privatization of our country’s justice system.

Why has the push for arbitration turned out so badly for ordinary consumers?

Consider the following facts:

• arbitration clauses are often hidden in the fine print of lengthy form contracts so that consumers may not even be aware of them, let alone have the opportunity to negotiate their terms;
• arbitration decisions are binding and typically there is no right to appeal;
• arbitration results are sealed, so anyone not a party to the proceeding cannot access them;
• businesses generally choose the arbitrator; and
• arbitration clauses may prohibit class actions.

Class actions are important

Class actions provide a vehicle for many consumers to band together to sue a company for business practices that injure a wide group of people. For example, in the recent Supreme Court case, Consumer Reports explains that the DirecTV customers attempting to sue the company alleged they had been charged illegal cancellation fees of up to $480. That amount of money, while significant to an individual, does not offer enough recovery to fund an individual lawsuit against the company – but if enough consumers join together in a class action suit, the consequences to DirecTV could be significant. Without the threat of a class action, companies may have little incentive to change practices that cause small damage to a lot of customers. Following the Supreme Court case, state laws cannot protect consumers from being forced into arbitration and giving up their rights to join a class action.

Consult a Philadelphia consumer protection attorney

If a company has treated you unfairly or deceived you, it is in your interest to consult a skilled consumer protection attorney as soon as possible. The experienced consumer protection lawyers of The Kim Law Firm, LLC, are committed to standing up for consumers’ rights and best interests and can represent you in a wide variety of matters. Contact The Kim Law Firm for a consultation today.

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Enacted in 2005, CAFA essentially redefines class action lawsuits in three specific ways. First, it significantly alters the U.S. Federal Court’s jurisdiction over class actions, specifically expanding the ability of plaintiffs and making it substantially easier for them to bring class action lawsuits. For instance, although increasing the amount in controversy requirement from $75,000 to $5 million, CAFA greatly relaxes the threshold requirement for bringing such suits, allowing class action plaintiffs to aggregate the sum of each individual plaintiff’s claims. See 28 U.S.C. § 1332(d)(2) & (6).   This essentially allows individuals to pool their alleged claims and damages, for purposes of filing a class action lawsuit. Additionally, the Courts in aggregating such claims and damages, will generally apply a very flexible analysis, and will allow prospective plaintiffs to include compensatory damages, statutory damages, and punitive damages. See e.g. Cappuccitti v. DirecTV, Inc., 623 F.3d 1118, 1122 (11th Cir. 2010); and Blockbuster, Inc. v. Galeno, 472 F.3d 53, 59 (2d Cir. 2006).

Second, similar to relaxing the amount in controversy requirements, CAFA also implements flexible jurisdictional rules pertaining to plaintiff’s geographic locations. Prior to the implementation of CAFA, federal courts would only allow class actions to proceed if complete jurisdictional diversity existed between the plaintiff parties and the defendant – i.e., all class members had to be from a different state than the defendant party. Such requirement has essentially become null and void since the implementation of CAFA, where “minimal diversity” is met under CAFA if “any member of a class of plaintiffs is: (a) a citizen of a state different from any defendant; (b) a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a state; or (c) a citizen of a state and any defendant is a foreign state or a citizen or subject of a foreign state. See U.S.C. § 1332(d)(2)(A)-(C).   As such, courts now evaluate the citizenship of the entire putative class, and only require that a single member of the class to reside in a different state than the defendant, for purposes of establishing diversity jurisdiction.

Third, in terms of settlements, CAFA now requires significant disclosures, which greatly benefits prospective class action members in obtaining all relevant and necessary information to assist them in making informed and competent choices about the settlement. For instance, CAFA now requires that defendants provide formal settlement disclosures and notices to U.S. Attorney General and relevant state officials of each state where a class member may reside. See 28 U.S.C. § 1715(a)(1). Such notice and disclosure provisions, including enforcement by federal and state officials, are for the benefit of the class members, and insures that class members obtain the requisite notice, disclosures, and other important information regarding any class action settlements.

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Pennsylvania courts have employed a two-prong test in determining whether arbitration should be compelled. A court must determine (1) “that a valid agreement to arbitrate exists between the parties” and (2) “that the specific dispute comes within the substantive scope of the agreement.” Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 1110, 1114 (3d Cir. 1993) (citation and internal quotation marks omitted).

In evaluating the first prong, a court looks to determine if a valid contract exists. If the contract is valid, then the court will likely find the arbitration clause to be valid absent any fraud, duress, or unconscionablility.

The second determination for a court is whether the dispute is within the scope of the arbitration clause. This query is highly fact sensitive. For example, in Smay v. E.R. Stuebner, Inc., 864 A.2d 1266 (Pa. Super. Ct. 2004), the Superior Court dealt with a broad arbitration clause within a construction contract between two co-defendants that stated, “Any controversy or Claim arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration….” Based on this language, the court determined that the indemnification issue between the parties was subject to arbitration, and directed that resolution be sought in that forum rather than the Court of Common Pleas.

On the other hand, in Setlock v. Pinebrook Pers. Care & Ret. Ctr., 56 A.3d 904 (Pa. Super. Ct. 2012), Plaintiff’s estate instituted a wrongful death claim related to the deceased’s care at Defendant’s nursing home. At the time of the deceased’s admission, a nursing home admission contract was signed that included an arbitration clause providing that, “Any Dispute controversy arising out of or in connection with under or pursuant to this Agreement shall be determined by arbitration.” Despite the apparent expanse of the language constituting the arbitration agreement, the court held that the tort claim was not within the scope of the arbitration clause, and specifically reasoned that the “contract in no way discusses liability for a cause of action, the arbitration clause in the unrelated contract between the parties cannot be read so broadly as to encompass any and all disputes that arise between the parties.”

As with all contracts, a court’s interpretation of enforceability (or lack thereof), can never be certain. However, as it relates to arbitration clauses, preparation with the broadest language possible is recommended.

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A recent 60 Minutes report brought this issue to life. The report concentrated on the Chinese manufacturer and supplier to Lumber Liquidators, who labeled the toxic laminate flooring as being compliant with California Air Resources Board (“CARB”) emission standards. CARB promulgates federal safety standards, including formaldehyde limits. However, as the report highlighted, independent tests found that the formaldehyde levels exceeded the toxicity limits by six, seven, or even 20 times. In fact, out of the 31 tested samples of Chinese-made laminate flooring produced for Lumber Liquidators, only one sample was compliant with CARB standards. Shockingly, as reported by 60 Minutes, Chinese managers at the factory told the undercover crew that they knew the products were not compliant with CARB emission standards.

On March 10, 2015, a class action suit was filed on behalf of Pennsylvania consumers in the U.S. District Court for the Eastern District of Pennsylvania. That action, like the others instituted in other jurisdictions, alleges that Lumber Liquidators sold composite flooring manufactured in China tainted with hazardous levels of formaldehyde, and in doing so falsely labeled their products as meeting or exceeding CARB emissions standards. The complaint alleges claims of negligence, breach of express warranty, breach of implied warranties, violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, fraudulent misrepresentation, negligent misrepresentation, fraudulent omission or concealment, unjust enrichment, and violation of the Magnuson-Moss Warranty Act.

In the suit, the class seeks the following relief: compensatory damages, equitable and/or injunctive relief, payment for the cost of the suit, pre-judgment and post-judgment interest on any amounts awarded, punitive damages, and payment of reasonable attorneys fees’ and expert fees. Further, the suit seeks damages in excess of $5 million. The case is being presided over by the Honorable C. Darnell Jones.

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