This month’s Ridiculous Lawsuits of the month, as provided by the US Chamber Institute for Legal Reform offers more reasons to be concerned with asset protection.


    1 – Unemployed Graduate Sues Law School over Lack of Job Offers

        A 2008 graduate of San Diego based Thomas Jefferson School of Law has field a class action lawsuit in California state court, alleging that the school committed fraud by misrepresenting the employment statistics for its recent graduates.  The complain alleges that the lawyer graduated from the school in 2008, with honors, and passed the California bar exam, but she has been unable to find full time employment as a lawyer since graduating.  She claims she was “lured to the school by statistics reported by U.S. News & World Report in 2003 indicating that 80% of [the school’s] graduates were employed after nine months [and that she] reasonably intyerpreted those figures to mean that the vast majority of TJLS graduates would find employment as full time attorneys.”  She then claims the statistics were “false, misleading, and intentionally designed to deceive all who read them.”

        The graduate lawyer claims to have mailed out more than 150 resumes to law firms in California and received only one offer that was “less favorable than non-law related jobs that were available to her.”  Her law degree left her with $150,000 of student loan debt.  The complaint estimates there are as many as 2,300 potential members of the class and seeks compensatory damages in excess of $50 Million.

    2 – “Defective” Toilet Paper Caused Plumbing Damages

        This one got my vote.  The University of Colorado claims defective toilet paper, distributed by Waxie Enterprises, Inc. and manufactured by Royal Paper Converting, Inc. was to blame for overflowing toilets in 27 academic buildings on campust that cost more than $40,000 to repair.

        Waxie Enterprises is a San Diego, California based company, founded in 1945 by a husband and wife immigrant team and the husband’s brother, now employs 800 perople, and is still a family owned business.

    3 – Mother Sues Chuck E. Cheese Claiming Games Encourage Gambling in Children

        In this Federal Court case, a San Diego woman sued the company that owns the Chuck E. Cheese family restaurant chain, claiming the games intended for children at Chuck E. Cheese locations are actually “illegal gambling devices – like slot machines.”  She is the mother of two daughters, ages 3 and 5.  She also seeks to have the case treated as a class action. She is asking for a jury trial and damages of at least $5 million.  The games that she is complaining about are operated by inserting tokens, which are purchased for 25 cents each.  At the conclusion of the game, it dispenses tickets that can be redeemed for prizes.  She claims the “games are based mostly on chance, and that they could foster addictive behavior in children by enticing them to play repeatedly for tickets.”  The lawsuit claims the games “create the same highs and lows experienced by adults who gamble their paychecks or the mortgage payment.”

        CEC Entertainment, the owner of the Chuck E. Cheese units have argued that the games are not illegal, and even if they were illegal, then the plaintiff is an “admitted participant in the illegal gambling, . . . and should be barred from seeking any damages or restitution.  The attorneys for the company have asked the federal judge to dismiss the case.  That request is pending.

    4 – School Sued by Alleged Cyber Bullies After it Kicks Them Off Cheerleading Squad

        This case, also filed in Federal Court in the western district of Missouri, was a claim by two former students who were members of the cheerleading squad for Seneca High School.  The plaintiffs sought a jury trial and unspecified damages based on allegations that the local school board and high school principal violated their rights to publice education, due process and free speech when they were removed from the cheerleading squad for alleged acts of cyber-bullying.  The case has been dismissed.

These cases are more examples of why asset protection planning is a necessary evil in today’s sue happy world.  The closely held family business being sued by the University of Colorado doesn’t appear to be at risk of losing the company in this particular lawsuit, but the attorney’s fees alone will be a significant burden.  The owners and operators of Chuck E. Cheese locations around the country have to be concerned with a potential class action that can sap tremendous resources from an ongoing business, and subjects the company to potential economic injuries that may be insurmountable if the corporate structure is not set up to protect the operating assets of the company.

As long as law schools like the Thomas Jefferson School of Law continue to churn out law grads who can pass the bar exam, but not find suitable employment as a lawyer, there will be more and more lawyers looking for opportunities to sue more and more businesses.  They have to find some way to generate fees to pay off their outrageous student loans that accrued during their law school career.

That very issue is a serious concern in the northeast Florida community where the Florida Coastal School of Law unleashes up to 600 new lawyers a year in the Jacksonville area – almost all of whom are unable to find employment as a lawyer and end up opening their own law practice.  Because of the high cost of tuition at Florida Coastal (which is the only private for profit law school in the U.S.), almost all of those graduates owe over $100,000 in student loans upon graduation.

A word to the wise in North Florida – asset protection planning is more important than ever before.

And by the way, if you want more information about outrageous lawsuits in Florida, you can go to this website to do so:  U.S. Chamber Institute for Legal Reform

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