Md. legal clinics saved by $2.4 million class-action award
Thursday, May 6, 2010
A legal aid clinic in Oxon Hill will reopen and one in Baltimore that serves consumers across the state will avoid a scheduled closing as a result of a $2.4 million award stemming from a decade-old lawsuit over excessive late fees on cellphone bills.
Thirteen legal programs in Maryland that help clients facing evictions, wage disputes and other civil cases will share the money, helping buoy programs battered by ongoing public funding cuts and drops in foundation donations.
"This really helps us breathe easier," said Neal Conway, executive director of Community Legal Services of Prince George's County, which had shuttered its office in Oxon Hill last year. The nearly $62,000 coming his way, said Conway, should allow him to restore services in the southern part of the county.
In Montgomery County, the bar association foundation will use its $15,000 to improve "our really ugly and not very usable Web site," said Julie Petersen, executive director.
The protracted legal case that generated the fresh money has gone on so long, said Petersen, that she tracked it in a file she labeled "miracle money."
The $2.4 million had gone unclaimed by Cellular One customers after a Montgomery County court found that the company had violated what was then state law limiting late fees on bills. A judgment totaling $7.6 million was awarded in a verdict in a class-action suit originally filed in 1999. Most of the award money was claimed by customers, who got back an average of about $30 each, said Montgomery Circuit Judge Durke G. Thompson, who oversaw the case.
But because so many of the individual awards for customers were small, and tracking affected customers was a challenge after a decade, there were leftover funds in a pool. Lawyers who had brought the case asked that the kitty go to groups that would use it for a purpose similar to the aim of the original lawsuit, "and that was consumer protection," said one of those lawyers, Paul D. Gleiberman of Chevy Chase.
Recipients applied to a committee set up by Thompson, and 13 groups across the state were selected and announced Wednesday.
Maryland Legal Aid in Baltimore received the largest amount -- $911,000 -- which its head, Wilhelm Joseph Jr., said will plug a funding hole linked to the current low interest rates on accounts that historically generate payments for legal aid programs. As rates dropped, so did the interest income on which Wilhelm's groups and others heavily rely. "The great pain for me was watching our money decline just as more people needed our services," said Wilhelm.
A consumer law clinic run by the University of Maryland School of Law had told one faculty member that his job would be gone in June because of financial cuts, but part of the $395,000 it will receive will keep the clinic open, said Michael Millemann, a professor. "We had already taken steps to close it down," Millemann said. "This has been a long time coming, but from our perspective, it's a terrific result."
The lengthy litigation, at one point, drew in the Maryland General Assembly, which passed legislation that retroactively made the fees legal -- a move that later was overturned in court but created a political firestorm among lobbyists and lawyers.
Though the case took years to wrap up, Thompson said, "it is exciting to see this come through at such a crucial time for groups that work with the public and were under financial pressures."