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News

Law school gets lawsuit windfall

'Unique effort' allows Law Center to create new Texas Consumer Complaint Center

by MATT COOPER
The Daily Cougar

The Consumer Law Center at UH was awarded $360,000 by State Attorney General Greg Abbott as the result of a false advertising lawsuit. 

The suit was filed against San Antonio-based company Mark Nutritionals Inc. arguing that the company used misleading information in its advertisements to encourage consumers to buy its weight-loss formula. The company filed for bankruptcy as part of its final court settlement. The money was awarded to UH because there wasn't enough to compensate those who had bought the company's product. 

"This is a very unique effort on the part of the attorney general of Texas," Richard Alderman, director of the Consumer Law Center, said. "I hope that other entities and other judges will take similar steps." 

Alderman said that in situations where enough money is lacking to compensate everyone involved in a lawsuit, the court can opt for a cy pres award. Such awards allocate the money in the spirit of prevention.

"The Attorney General's office tried to find some way they could use the money to benefit the consumers and prevent similar things from happening," Alderman said. "The Center for Consumer Law applied for the cy pres award and the court approved."

The Consumer Law Center has been operating for 25 years. It provides services to the community such as "The People's Law School," a consumer law clinic geared toward helping the public become better consumers. 

Alderman said that the center typically runs on a tight budget and that he is happy that he won't have to worry about funding. 

"To have a sum like this and be set for the next few years is really great." 

The money will be used to help establish the Texas Consumer Complaint Center, which will include a Web site providing information to consumers about current scams to watch for and a place to leave consumer complaints. 

"We may not get the money right back to the people who were ripped off by buying this fraudulent diet drug," Alderman said, "But hopefully those people will benefit by some of what the CCC does." 

Alderman said they would also look for ways to provide direct assistance to more individual consumers. Currently they can provide information but are limited in how much hands-on work they can do with the community.

Robert Johnson, a law student who works in the Consumer Law Center, said he is looking forward to helping people on a one-on-one basis.

"Now we're able to actually give them a place to go for their dispute resolutions," Johnson said.

Alderman said that although the center's primary focus is the Houston community, plans are being made to take the center national. 

"We hope to be able to set up a network so that we can communicate and refer things to people throughout the country."
 

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