At any rate, CJAC was agitated because the attorneys who brought the case against Classmates.com have requested a fee commensurate with the work they performed, while each individual member of the class will receive no more than $3.  (The headline on the CJAC blog post actually referred to a $2 coupon, but heck, the difference is only a buck, and using $2 makes a better headline.)  Full disclosure:  one of the firms involved is Kabateck Brown Kellner of Los Angeles, and managing partner Brian Kabateck is a vice president of Consumer Attorneys of California; some members of CAOC are on the board of the Civil Justice Research and Education Project, which funds this site.

The case started after a San Diego man who was registered with Classmates.com (but with limited access to the site because he was not paying a fee) received an e-mail telling him old classmates were trying to contact him.  Of course, finding out who these old classmates were, and why they wanted to contact him, would cost money…specifically, he would have to upgrade to a “Gold Membership.”

And he did.  That’s when he found out there wasn’t anybody trying to reach him through the website.  Classmates.com had just flat lied about it to get him to fork over the membership fee…for a membership he wasn’t going to buy otherwise.

The fellow in San Diego thought that was wrong.  And because Classmates.com made the same fraudulent pitch to millions of other people, and more than three million of them plunged for the membership fee, his false advertising claim grew into a class action.

Most class actions involve consumers who have been wronged but whose resulting losses are quite small…far too small to justify paying what it takes to battle a corporate legal department.  But rather than just say, “Oh, well,” and let the company get away with its behavior because it doesn’t pay to sue them, class actions allow consumers in the same boat to band together with shared legal representation.  It’s more efficient for the legal system—and for the accused company—to deal with just one case with many class members rather than many individual cases.

Sometimes these cases go to trial.  Sometimes, as in this case, the parties involved reach a mutually satisfactory agreement that requires approval of the court.

No one who signed up for a “Gold Membership” was out a great deal of money; the cost was typically $9.95 or less.  But whatever the amount, it was taken under false pretenses.  And with more than three million paid memberships resulting, that made it a pretty profitable lie for Classmates.com.  (CJAC’s blog post made a sarcastic reference to filing a class action suit “to fix this monumental problem.”  No reference to how much Classmates.com was raking in as a result.)

Classmates.com has agreed to reimburse each of those duped members $3, for a total of roughly $9.5 million.  Notice the company still comes out way ahead here, which is why you don’t hear them whining about it.  The $2 coupon CJAC’s blog post referred to in its headline?  That’s a discount on future Gold Memberships for some 100 million people who now have free (limited-access) memberships.  That group of class members is not getting cash because they didn’t pay anything themselves.  The coupons were negotiated as an additional benefit and have nothing to do with the plaintiffs attorneys’ fee request.

Meanwhile, the class action settlement ensured there will be no more victims of such a scheme.  Would this have happened if consumer attorneys weren’t involved to bring the matter into the legal system?  Would this have happened if that outraged member in San Diego had just called Classmates.com and said, “Hey, this is wrong, cut it out”?  We’re guessing that if the company didn’t have the conscience to avoid this come-on in the first place, it wouldn’t have backed away just because somebody said please stop…not after the tactic had brought in millions of dollars.

Oh, and one thing CJAC’s blog post didn’t mention, while complaining about the proposed fee for the consumer attorneys?  Nowhere do we see how much the lawyers who represented Classmates.com were paid.  But since they’re working for a company that profited from fibbing to its potential customers, we suppose money is not really an issue.

–J.G. Preston

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People who have been seriously wronged deserve their day in court, even a guy like Fred Hiestand who has spent his career trying to restrict the rights of people like Jim Van Buren.

Van Buren and Hiestand are very different. Hiestand is a lawyer with a long pedigree at high levels of Sacramento politics. Van Buren is a working man from Merced. They are on opposite sides in the war over the civil justice system, except that Van Buren never wanted any part of this fight.

Hiestand, on the other hand, is a willing combatant in the decades-long movement to limit civil justice, although as it turns out, he seeks to limit that right primarily for people other than himself. More about that in a minute.

First, here’s a little about Jim Van Buren. He’s a lot like many folks we consumer attorneys represent. He is a 48-year-old Central Valley man who works as a cable splicer for a phone company and tends to his family. He got an abscess and went to a doctor for what should have been a simple procedure. The scalpel sliced a muscle and now he faces a lifetime of incontinence.

Consumer attorney David M. Jamieson of Modesto took up Van Buren’s cause, filing a suit that named the surgeon and the clinic where he underwent the outpatient procedure, Yosemite Surgery Associates.

Given the injury and the aftermath, jurors awarded Van Buren $2.5 million in noneconomic damages. However, Superior Court Judge Ronald Hansen cut the award to $250,000, the maximum permitted under the unfair Medical Injury Compensation Reform Act, signed into law in 1975 by then Gov. Jerry Brown.

Jamieson filed an appeal on Van Buren’s behalf with the California District Court of Appeal, 5th District. Attorney Robert S. Peck of Washington D.C. entered the case in what was the first step of a renewed campaign by the American Association for Justice and Consumer Attorneys of California to attack MICRA caps in the courts.

This is where Hiestand and Van Buren became entwined.

Hiestand signed a 37-page brief urging that the court reject Van Buren’s appeal and affirm MICRA’s caps. The court did so. On Aug. 12, the California Supreme Court upheld the appellate court, and declined Van Buren’s petition for review, effectively ending his case, though not our efforts to attack MICRA.

Hiestand’s role in the malpractice issue dates to the mid-1970s when he was one of Gov. Brown’s main advisors on the issue.  In the grand tradition of government aides who use taxpayer-funded expertise to make money on the outside, Hiestand has been steeped in the issue ever since, defending MICRA numerous times over the years as counsel to the Civil Justice Assn. of California, and Californians Allied for Patient Protection.

We know both groups well. CJAC strives to limit access to the courts on behalf of its wealthy patrons–the tobacco industry, the oil industry, insurance companies, pharmaceutical giants, and other corporate interests.

Californians Allied for Patient Protection’s sole goal is to defend MICRA, largely on behalf of its main benefactor, the insurance industry.

To that end, the group has raised $1.5 million in recent years. The insurance industry accounted for more than half of that sum, $768,000.

Hiestand sees the need to limit access to the courts for people like Van Buren, but not for himself. For that, he received some rather unflattering press lately.

It all began on Aug. 10, 2008, when he parked his Toyota 4Runner in a red zone on 18th and Capital in Sacramento. No matter that there is a parking lot a half block away where he could have paid $5 and parked for two hours. He was in a rush. One of his kids was hungry, he told one of the reporters who quizzed him on the matter, and there are a bunch of eateries on the block—a high end wine bar, a fancy Mexican restaurant, an Asian fusion place and a pizza parlor.

Hiestand knew he risked a parking ticket. But when he emerged from the restaurant, he found that his SUV had been towed. He had to wait until the following morning to get the 4Runner out of impound and pay $205, plus the $67 parking ticket. Many of us would kicked ourselves for being so stupid to park in a red zone, and sheepishly paid the fines, especially given that there is a paid parking lot around the corner.

Not Hiestand.

Hiestand researched at the law, and found what some tort “reformers” might view as a loophole. The law, he concluded, says the city can order a tow only if it posts a sign warning that violators could be towed. Hiestand’s suit was dated Aug. 11, 2009, a day before the Supreme Court  rejected Van Buren’s appeal.

It wasn’t just any suit. Hiestand filed a class action complaint, the very sort that CJAC has railed against.  Hiestand names the city of Sacramento, Police Chief Rick Braziel, and the cop who wrote him the ticket. For good measure, Hiestand named as a defendant Central Valley Towing, the tow truck company that hauled off his 4Rrunner–no matter that the tow company is a small business that tort reformers are forever claiming to defend.

As if that weren’t enough, Hiestand sought damages against Central Valley Towing under Business and Professions Code Section 17200, the Unfair Competition Law that the Civil Justice Association of California campaigned against when it pushed Proposition 64, the 2004 initiative to limit such suits.

Hiestand is not alone.

Numerous tort “reformers” have become plaintiffs when it suits their interests. Karl Rove has railed against trial lawyers but sued a former business partner. Former Sen. Rick Santorum of Pennsylvania pushed for medical malpractice caps, though his wife filed a malpractice suit against a chiropractor. Maurice (Hank) Greenberg used his foundation to funnel almost $25 million into a U.S. Chamber of Commerce arm that pushes tort reform, and sued his former company, American International Group, for securities fraud earlier this year.

As Hiestand told the Recorder, “We’ve never said that all class actions are meritless.”

At root, the tort “reform” movement is classist. Rich and powerful people and corporations simply do not like being held accountable by guys like Jim Van Buren, or questioned by the likes of you and me.

Eric Foster, owner of Central Valley Towing, summed Hiestand’s lawsuit up well when he spoke to CAOC. “We were called out by the Police Department,” Foster told us. “We were instructed to do this under their direction. Bottom line is this: the man broke the law knowingly and intentionally, and now is trying to profit.”

Foster said nothing like this has ever happened to him. He would have no choice but to hire an attorney to defend his company. Foster wondered what message Hiestand was sending to his son. That it is OK to flout the law? “I think he should be embarrassed,” Foster said of Hiestand.

(Spagnoli is president of Consumer Attorneys of California and a partner at the Santa Monica law firm, Greene Broillet & Wheeler. A version of her article appeared in September-October edition of Forum magazine.)

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