King County Superior Court Approves Medical Consumer Debt Settlement

Friday, August 17, 2018

Today, King County Superior Court Judge Janet Helson approved a negotiated settlement that provides relief to approximately 1,216 people for medical debt arising from pre-judgment interest charged on their accounts. The class action lawsuit, Roberson v. Ray Klein, Inc., et al., filed in 2016, alleged that the defendants – collection agency Ray Klein, Inc. and its affiliate Hawes Klein, LLC – illegally charged prejudgment interest on a portfolio of accounts purchased in 2012 from Highline Medical Center.

The defendants had been charging 12% in pre-judgment interest dating back to the date of medical service, even though Highline had waived its ability to collect interest prior to selling the accounts. The lawsuit alleged violations of the Washington Collection Agency Act, the Washington Consumer Protection Act, and claims based on unjust enrichment and injunctive relief. Under the terms of the settlement approved today by the court, the defendants have agreed to set aside over $1,000,000, which will be used in part to either reimburse patients or to pay down the principal on existing debt.    

“Now that this debt is gone, I can focus on taking care of my family,” said plaintiff and class representative Tanesha Roberson, an uninsured single mother, who had been charged significant pre-judgment interest dating back to a brief hospital stay in 2010. “I don’t want this to happen to anybody else,” she added.

“This settlement is a great victory for consumer rights,” said Adam Berger, attorney for the plaintiff class. Berger and Lindsay Halm of Schroeter Goldmark & Bender served as class counsel for plaintiffs along with attorneys from Columbia Legal Services. “Too many low-income families in Washington State face insurmountable debt after receiving necessary medical care. Interest on these accounts that never should have been charged was building up on those accounts for years. That’s unconscionable,” Berger added.

Legislators in Olympia have begun to look at creating protections for people facing medical debt and proposed protections include eliminating pre-judgment interest. “Washington families thrive when they receive the necessary medical services they need without facing staggering medical debt,” said Antonio Ginatta, Policy Director at Columbia Legal Services. “The legislature should help families protect both their health and their bank accounts by helping shield them from medical debt,” said Ginatta.      

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