Q & A: Martin Cohen of the Citizens Utility Board

Martin Cohen Sep. 9, 2004, 11:55am

On September 8, Madison County Judge Nicholas Byron approved a $12.4 million class action settlement on behalf of Ameritech customers who allegedly lost money on one of the company's calling plans.

The lawsuit was originally brought by the Citizens Utility Board (CUB), a state-financed consumer rights group created to monitor residential utilities in Illinois, like phone and power companies.

Per the settlement, each Ameritech customer is entitled to $25 and St. Louis-based class action law firm Korein Tillery gets $1.9 million. CUB itself will get nothing.

CUB originally had sought $250,000 in fees but its request was opposed successfully by Stephen Tillery, who argued that the group had no legal standing to do so.

The Record talked with longtime CUB Executive Director Martin Cohen about the lawsuit and the settlement.

Q. How do you feel about the settlement?

A. Overall we consider it a victory. There was an original settlement that we thought was a poor one, then we intervened and it became substantially better.

Q. How so?

A. The initial settlement was designed to maximize the fees to the private attorneys, minimize the costs to SBC, and was likely to result in very little benefit to the customers who were harmed.

It required them to sign a claim form stating they believed they’d lost money under penalty of perjury. Most people had no way of knowing whether they lost money, so the claim form itself was a strong deterrent to anybody filing it.

The ultimate settlement is much improved. There's no threat of a perjury charge and there’s information to help customers understand whether or not they lost money under the plan. We think there’ll be many more customers who sign the claim form and send it in than there would’ve been if they thought were under threat of indictment. So we have no regrets or complaints.

Q. But the court also cut CUB out of the settlement, ruling you had no standing in the case, so you were unable to collect any attorney fees even though you originally brought and won the case with the Illinois Commerce Commission. Do you feel you got a fair hearing?

A. We don't agree with Judge Byron's reasoning in barring us from participating in the settlement.

We think the facts could have been viewed a different way, and obviously we're disappointed because attorney's fees awarded to CUB would’ve significantly benefited SBC’s customers instead of fattening the bank accounts of the private lawyers.

Q. In what way?

A. We would've used that money exclusively to represent consumers’ interests in future cases. We’re the only consumer group in Illinois that represents the interests of the little guy in these matters and we have quite limited resources, so there would've been a great leveraging of any fees we would've won.

Q. So has this experience soured you on class actions?

A. No. It became very convoluted and confusing, and Tillery and SBC came after us with both barrels, but we fought the case as we found it and in the end consumers are better off because of it.

It was confusing because Judge Byron changed his mind several times about our standing in the case, and the other side gave contradictory information to the court about the facts in the case.

But class actions can be an important remedy available to telecommunications consumers; many of the traditional regulations have been removed and the jurisdiction of state regulators is far less than it used to be.

Q. This was your first experience with the notorious Madison County courts. What were your impressions?

A. We're glad we came to Madison County and made our case here. We don't feel we were treated unfairly because we were in Madison County. It would've been tough anywhere against this bunch.

That said, we’re looking at our options. It’s not over.

Q. Can we expect an appeal?

A. We're not sure, but we certainly have that right.

We're also interested in seeing the court instruct SBC to track the compensation and outcome [of the settlement] for consumers, so we can at least measure the value of this against the company’s and plaintiff’s lawyers claims.

Our understanding is they don’t intend to do that, so at this point nobody would ever know how many people were compensated.

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