Press Release

PUBLIC CITIZEN MEDIA ADVISORY

May 19, 2009

Contact: Joe Newman (202) 454-5188 Rick Claypool (202) 588-7742

Housing Industry Evades Accountability Through Use of Forced Arbitration, Possibly in Violation of States Laws, Public Citizen Report to Show

WHAT:Telephone press conference to issue a report detailing the housing industrys use of forced arbitration, possibly in violation of certain states laws.

New home buyers are usually promised a warranty, which is often characterized as a gift, bonus or extra coverage. But these warranties, which buyers often do not receive until after moving into their house, typically exempt the builder from liability for whole classes of problems, such as mold and building code violations. The warranties also strip buyers of their legal right to go to court, instead relegating them to seeking justice from an arbitration firm hand-picked by the warranty company. These warranties also appear to violate certain states prohibitions on the use of binding mandatory arbitration in insurance contracts. Public Citizen will be calling on attorneys general of these states to investigate.

Public Citizens report chronicles several cases in which home buyers received patently unjust rulings in arbitration and were left with no recourse. The report also reveals myriad conflicts of interest among the building, warranty and arbitration industries. For example, the trade association for the building industry actually formed the first home warranty company, which in turn formed an arbitration firm to handle construction disputes. Construction Arbitration Services, the arbitration firm most associated with the home building industry, evolved from that arbitration firm.

NOTE: Embargoed copies of the report are available. Call one of the numbers listed above.

WHO:David Arkush, director of Public Citizens Congress Watch division Taylor Lincoln, research director of Public Citizens Congress Watch division Michelle Rechtien, of Savannah, Ga., home buyer Jordan Fogal, of Houston, Texas, home buyer

WHEN:1 p.m. EDT, Wednesday, May 20

WHERE:Call 1-800-377-8846 and enter passcode: 36707396#

MORE: For more information about forced arbitration, go to: www.fairarbitrationnow.org

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Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C.

For more information, please visit www.citizen.org .

My name is David William Kurth. My father was William F. Kurth. He loved our country and served many years as an officer in both the United States Army and Wisconsin National Guard. My father was an Eagle Scout and a Boy Scout Leader. He served as a volunteer fireman for our community for more than 25 years. He taught his children and many others to love and serve this country as well. He taught us to obey its laws, respect its traditions and to uphold the rights of others.

He was an honest man. He was a mentor to many people. He was a good man. He was my hero.

My father entered Mount Carmel Nursing Home in Burlington, Wisconsin in October 2004. In February 2005, while left unattended, Dad fell. He complained about the pain in his hip throughout that day. It took another 12 hours before they found that he had broken his left hip. He spent several days in the Burlington Hospital having his hip repaired. Little did my family or I know that this was to be the last time we would ever have any meaningful conversation with my father.

Shortly after returning to Mount Carmel Nursing Home his left leg was broken again during physical therapy that was improperly applied. My mother said that during this session of therapy the therapist insisted that my father’s leg must be fully straightened. My father was screaming in pain and trying his best to resist their efforts. Yet they didn’t listen and broke his leg halfway between the hip and knee.

It was at about this time he contracted MRSA infection.

During this same time his healthcare coverage was changed from Medicare to Medicaid. The very day his coverage changed he was moved from his private room in the Medicare wing to a shared room in the Medicaid wing of the nursing facility.

The staff did not clean his new room prior to his arrival. Dad’s new room was filthy and smelled of feces. The bed he was placed in was coated with dirt. My wife and I personally had to clean his room and bed the following Sunday after he transferred to the Medicaid wing. His room never was properly cleaned throughout the duration of his stay in the Medicaid wing. The bathroom he shared with three other men had not been properly cleaned for a long time.

We didn’t know then that management of the Nursing Home had made a cost-cutting move and disbanded a multi-member wound care team. What this meant was that a facility of 150 aged and infirm patients that had been cared for by a committee of five people overseeing their wound care was now to be attended by only one person.

The court records and testimony show that this sole Wound Care Nurse never attended my father’s wounds for weeks, if not months, even after it was brought to her attention by the visiting Doctor in late April. None of us had any idea that he was in such poor condition. During this time the only staff member that discussed my father’s situation with us was the nurse that administered my father’s medications.

The Doctor, upon seeing the progression of my father’s illness, had my father rushed by ambulance to the Emergency Room at Burlington Hospital. My father was admitted to the hospital that very morning. The Doctor told us of how shocked he was at the poor care my father had received at the nursing facility. His words were that of neglect and disappointment that a nursing staff could let someone deteriorate to such a condition. At this time the Doctor told us that my father was terminally ill and that my father did not have much chance to survive his infections. My father was admitted to the Hospice Section of the Hospital. A few days later he was transferred to a special Hospice in Wauwatosa, Wisconsin. Here he was finally provided very fine care during his last days with us.

My father died on June 25th, 2005 from sepsis of the blood due to infections caused by more than 10 bedsores. Some of these bedsores ran deep into the bones of his backside, hips and pelvis. The infection was caused by the excrement and urine that was not cleansed from the wounds for days at a time. The bedsores were caused by neglect. The wound care nurse that was responsible for caring for my father has been charged and found guilty of criminal neglect by the State of Wisconsin for these actions.

As revolting as all of these ordeals for my father and mother sound, this is not the most shocking part of my Father’s story. My father’s ordeal was hidden from the light of day by a document called an “arbitration agreement” which he himself never signed. My mother was instructed to sign them by the Admission Clerk at the Nursing Home while no one else was present.

Ladies and Gentlemen, my father’s story is not an isolated case. Nursing home corporations are using arbitration clauses as liability shields to insulate them from their own wrongful conduct.

In my father’s case it was economically more profitable to let people like my father suffer then to provide proper care. And if by chance a surviving family member is moved enough to hold the corporation to account, the whole ordeal gets buried in a secret arbitration committee, which is also hired by the nursing home. The public is none the wiser. All the while the surrounding community keeps sending their elderly in to these places, totally unaware of their continued abuse because the corporation has it all locked away, nice and tidy.

How ironic is it that my father, a Captain in the United States Army, who had prepared to serve his country to the death, died of infections due to neglect caused by the unscrupulous cost cutting measures of a large nursing home corporation that has been cited for neglect many times in several states over the last several years?

How disgusting is it that the very system of justice and laws my father fought to protect prevents him from pleading his case in a court of law?

Ladies and Gentlemen, my mother and sister and I plead with you to help right a great wrong that is being perpetrated on the elderly and infirm of America. If you, in your wisdom, can see fit to ban the use and practice of these Arbitration Agreements upon the elderly entering nursing homes you will be correcting the management of their care. Without these Arbitration Agreements to hide behind all the Nursing Homes in America will have to improve the care they provide to the level that is necessary and expected of them.

Washington is a very busy place. You are all very busy people. Yet you have found it in your hearts that this cause is worthy of your time and commitment. It is by God Almighty’s Hand that you have come to your position this day for such a time as this. You are a light on a hill. Please let that light shine on those who must be protected. Please don’t let my father’s story be allowed to happen to another innocent American.

This country was built upon the infirm that now reside in these nursing homes. The Veterans who fought for us, the teachers that provided us knowledge, the carpenters that built our homes and businesses, the little old ladies that taught us Sunday school, live in these Nursing Homes. They took care of us. These are our heroes. Now it is time we took care of them in a manner which is worthy of the sacrifices they made for us.

Thank you,

David William Kurth

Good afternoon. I am standing before you to share with you a personal tragedy. I do this to bring awareness to legislation which is designed to ensure that no American will be deprived of their constitutionally guaranteed right to the fair administration of justice before a jury of their peers and judge, skilled in the law.

I was sent to Camp Hope in the “Green Zone” in Baghdad, Iraq, in July of 2005 to support Operation Iraqi Freedom. Before my deployment, my employer, Halliburton, showed me photographs of the trailer that I would live in with one other woman and a shared bathroom.

When I moved into my predominantly male barracks upon arrival at Camp Hope, I complained about the living conditions and asked to move into the quarters I had been promised. My requests were not only ignored – they were mocked.

On the fourth day in Iraq, I was socializing outside the barracks with several of the other contractors Halliburton had sent to the Green Zone. The men, identified only as Halliburton firefighters, provided me with an alcoholic drink and one joked that he had “saved all his roofies for Dubai.”

The antics of these men (and so many others in this lawless environment), I would later learn, were well known to the Human Resource personnel and upper management at Halliburton. Those facts were not (at least then) well known to me – or to the general public.

Assuming that the firefighter was only joking, and that we were all on the “same side,” I naively took the drink. Two to three sips later, I remember nothing.

When I awoke in my room, I was naked, I was sore, I was bruised and I was bleeding. As the grogginess wore off and I returned from the bathroom (where evidence that I had been raped was made abundantly clear to me), I found a naked firefighter still lying in the bunk bed. I was shocked. How could he have raped me like that and not even bother to leave? I now know that this is because he knew (though I did not) that there would not likely be punishment for this crime – there had not been before.

After reporting the rape to a KBR Operations Coordinator, I was taken to the Army CASH where a rape kit made it apparent that I had been assaulted both vaginally and anally by multiple perpetrators.

The Army doctor then handed my rape kit to KBR security personnel.

I was then taken to a container where I was held captive by two armed guards – called Ghurkas. I was placed inside – not allowed to leave. I had requested a phone from KBR officials, who denied me this request.

Eventually, one of the guards gave in to my begging and allowed me to use his phone. I called my father, who then contacted Congressman Ted Poe. Congressman Poe then dispatched State Department officials to ensure my release and safe return to the U.S.

Prior to my return to the U.S., Halliburton management told me that I could either “stay and get over it” or go home with no guarantee of a job – either in Houston or in Iraq. The severity of my physical injuries necessitated my decision and I went home in the face of the threats of termination –- which later proved to be true.

When I returned home, the pains in my chest continued and I sought medical help. It was confirmed that my breasts were disfigured and that my pectoral muscles had been torn. Reconstructive surgery was required.

I turned to the civil court system for justice when the criminal system had been slow to respond. I also knew that I had been harmed – not only by the rapists but by the huge corporation that ratified their actions for so long.

The lawless environment that exists in the Green Zone is not only tolerated but promoted by Halliburton’s practices there.

When my lawyers filed suit, they were met with Halliburton’s response that ALL of my claims were to be decided in arbitration – because I had signed away my right to a jury trial at the age of 20, and without the advice of counsel, or any choice other than to be terminated.

Their argument, when boiled down, is this:

• Rape is a claim that should not see a jury;
• False imprisonment is a claim that should not see a jury;
• Corporate ratification of criminal behavior is a claim that should not see a jury;
• Intentional tortuous activity is a claim that should not see a jury; and
• Halliburton is a company that should not see a jury.

Arbitration is naturally stacked in favor of business and against the individual:

• Which party is more likely to need the arbitrator more than once? (Several arbitrators have been “black balled” for ruling in favor of individuals, forcing them out of work in the future. Arbitrators know this, and the fact of it weighs heavily upon them.);
• Which party is more likely to use a law firm that the arbitrator may eventually wish to work for?

Arbitration has a place – but that place is when two parties with EQUAL bargaining power, agree to arbitrate a dispute AFTER it arises, and with the advice of counsel:

• Arbitration of corporate disagreements between companies;
• Arbitration of family disputes where both parties agree after consultation with their lawyers; and,
• NOT where a large multibillion-dollar corporation shoves it down the throat of a 20-year-old girl who needs the job to survive.

Unfortunately, my case is not an isolated incident. If arbitration of these claims is forced, then there will be justice for none of the victims of these military contractors’ misdeeds. I have set up the Jamie Leigh Foundation to help women to learn what they can do and where they can turn when they are victimized by military contractors. For those victims out there who have been even further victimized by the hidden arbitration clauses in these contracts, you can contact us for help at jamiesfoundation.org.

Thomas Jefferson said that “no man is above the law and no man below it, nor do we ask any man’s permission when we require him to obey it.” Here, with the misuse of arbitration, we have made corporate entities in this country – ABOVE THE LAW.

Congress, you have the power to change that law, and hold corporate America accountable to the people. “The People” – whom you are sworn to serve.

Thank you,

Jamie Leigh Jones

Rep. Johnson pleased to take part in Arbitration Fairness Day

April 28, 2009

WASHINGTON – When Jamie Leigh Jones of Houston was allegedly raped by co-workers while working for a Halliburton subsidiary in Iraq, her company said she couldn’t take her assailants court because the employment agreement she signed required her claims to be settled through arbitration.

David Kurth of Burlington, Wis., was also denied the ability to sue after his father died as a result of alleged poor care he received in a nursing home. The nursing home claimed the paperwork a family member had signed when the father was admitted required the matter to go to binding arbitration.

It is cases such as these and thousands of others that prompted Rep. Hank Johnson (GA-04) to introduce H.R. 1020, the Arbitration Fairness Act of 2009 in February.

And it is also the reason he is pleased to announce he will participate in Arbitration Fairness Day on Wednesday, April 29 at the Dirksen Senate Office Building.

Johnson’s bill, which he first introduced in the 110th Congress, has set the standard in its attempt to protect consumers from business practices that require them to cede their rights to a jury trial as a condition of service.

Johnson will join Sen. Russ Feingold (D-WI) in Dirksen Senate Office Building for a 12:15 p.m. press conference on April 29 to bring public awareness to the issue. The event is being sponsored by a consortium of advocacy groups, including Public Citizen and the American Association of Justice.

Today, many businesses rely on mandatory and binding pre-dispute arbitration agreements that force consumers, employees and franchisees to settle any dispute with a company providing products or services without the benefit of a jury trial.

“This is not an anti-business bill, but a pro-consumer bill,” said Johnson.

“One of our indelible rights is the right of a jury trial. Guaranteed by the Constitution, this right has been gradually ceded by citizens every day as they purchase a new cell phone, buy a home, place a loved one in a nursing home, or accept a new job. Once used as a tool for businesses to solve their disputes, arbitration agreements have found their way into employment, consumer, franchise and medical contracts.”

The Judiciary Committee, on which Johnson serves, held hearings on the bill in 2007 and 2008. Sen. Feingold introduced similar legislation in the Senate in 2007.

Press Conference with Bill Sponsors, Pollster, Consumers, Employees and Advocates Will Show Support for Bill to Ban Forced Arbitration

WHAT: Press conference to release the results of a major national poll conducted by Lake Research Partners detailing how likely voters view mandatory binding arbitration and revealing support for the passage of the Arbitration Fairness Act. Lawmakers, consumers and employees will outline the consequences of forced arbitration clauses, which are hidden in the fine print of employment, cell phone, credit card, retirement account, home building and nursing home contracts, to name a few. Just by taking a job or buying a product or service, individuals are forced to give up their right to go to court if they are harmed by a company. Because the private system of forced arbitration benefits companies and disadvantages consumers and employees, more and more industries are using forced arbitration to evade accountability.

The bill to ban forced arbitration is supported by a coalition of dozens of organizations ranging from Public Citizen, the National Association of Consumer Advocates, the National Employment Lawyers Association and the American Association for Justice to the National Consumer Voice for Long-Term Care, Home Owners Against Deficient Dwellings and the Leadership Conference on Civil Rights.

Consumers and employees from Alabama, California, Georgia, Iowa, Louisiana, Maryland, Michigan, Minnesota, New Hampshire, Ohio, Pennsylvania, Tennessee, Texas and Virginia will be on hand to discuss their battles with forced arbitration. After the press conference, they will visit their lawmakers to urge passage of the Arbitration Fairness Act (H.R. 1020), which would make arbitration voluntary instead of forced.

WHEN: 12:15 p.m. EDT, April 29

WHERE: Room 608, Dirksen Senate Office Building (bounded byConstitution Avenue, C Street, First Street, and Second Street N.E.), Washington, D.C.

WHO:

• U.S. Sen. Russ Feingold (D-Wis.)
• U.S. Rep. Hank Johnson (D-Ga.)
• Daniel Gotoff, partner, Lake Research Partners
• Jamie Leigh Jones, of Houston, Texas, who was raped by co-workers while working for a Halliburton subsidiary in Iraq. Her company said she couldn’t go to court because the employment agreement she signed required her claims to be settled through arbitration.
• David Kurth, of Burlington, Wis., whose father died as a result of poor care he received in a nursing home. When the family tried to sue, the nursing home claimed the paperwork a family member had signed when the father was admitted required the matter to go to binding arbitration.

Several other consumers and employees harmed by forced arbitration, and advocates from the Fair Arbitration Now Coalition member organizations will be available for interviews immediately following the press conference.

CALL-IN: Available upon request. Call the numbers above.

EMBARGO:  Embargoed copies of the poll results and release are available upon request beginning Tuesday, April 28.

MORE: For information, visit www.FairArbitrationNow.org.

WASHINGTON, D.C. – A newly formed coalition is calling on Congress to stand up for employees and consumers and ensure companies are held accountable for misdeeds by passing legislation to end forced arbitration.

The Fair Arbitration Now Coalition’s goal is to pass the Arbitration Fairness Act (H.R. 1020). Participants represent consumers, employees, homeowners, franchise holders and more. They range from Public Citizen, the National Association of Consumer Advocates, the National Employment Lawyers Association and the American Association of Justice to the National Consumer Voice for Long-Term Care, Home Owners for Better Building and the Leadership Conference on Civil Rights.

The creation of the Fair Arbitration Now Coalition comes as the big business versus citizen battle heats up on Capitol Hill. Many industry groups are actively lobbying lawmakers, pressing them to allow businesses to continue what many consider a predatory practice.

Forced arbitration clauses are hidden in the fine print of employment, cell phone, credit card, retirement account, home building, nursing home and assisted living contracts, to name a few. Just by taking a job or buying a product or service, individuals are forced to give up their right to go to court if they are harmed by a company. Because the private system of forced arbitration benefits companies and disadvantages consumers and employees, more and more industries are using the tactic of forced arbitration to evade accountability.

"The Arbitration Fairness Act does not seek to eliminate arbitration and other forms of alternative dispute resolution agreed to voluntarily after a dispute arises," the groups wrote last month in a letter to lawmakers. "Its sole aim is to end the unscrupulous business practice of forcing consumers and employees into biased arbitrations by binding them long before any disputes arise."

The coalition is also supporting the Fairness in Nursing Home Arbitration Act (H.R. 1237 and S. 512), which would eliminate mandatory binding arbitration clauses from nursing home contracts.

The Fair Arbitration Now Coalition will hold a press conference and lobby day on Wednesday, April 29, with more than 50 consumers, employees and their representatives, who can speak about the injuries people suffer when they are forced into arbitration in an attempt to hold companies accountable for wrongdoing.

The coalition also has launched a Web site, www.FairArbitrationNow.org, explaining what forced arbitration is, outlining the kinds of contracts in which forced arbitration clauses appear, providing links to news articles and telling stories of arbitration horrors. In addition, a blog keeps readers up-to-date on the latest arbitration news.

To read the letter sent by the groups, go to https://fairarbitrationnow.org/content/letter-support-arbitration-fairness-act-hr-1020.