Judge OKs class settlement for pandemic program faxes

In a case handled by a Kansas City-area plaintiff’s firm, a federal judge in Kansas awarded $2.5 million in damages in a class-action claim involving junk faxes targeting potential recipients of post-pandemic, federal financial assistance.

The 2022 complaint in the U.S. District Court of Kansas alleged that Jorns & Associates and its principals violated the federal Telephone Consumer Protection Act by sending more than 400,000 unsolicited faxes to recipients including Prairie Point Orthodontics of Lenexa, the lead plaintiff, without compliant opt-out provisions.

The solicitations looked to capitalize on a pair of emergency business assistance programs that emerged after the COVID-19 outbreak: the Paycheck Protection Program, which offered forgivable business loans; and Employee Retention Tax Credits (ERTC) — a program so rife with fraud that the Internal Revenue Service froze payments pending further scrutiny.

A sample fax included with the complaint as Exhibit A suggested claims of “up to $26K per W-2 employee before time runs out!” Interested businesses were offered bonuses to refer others who might also sign up, with entreaties to “consider how $100,000+ could help your business.”

With claims from more than 10,000 eligible class members, each claimant will receive a gross recovery of roughly $250, said lead plaintiffs’ attorney Richard Fisk of Beam-Ward, Kruse, Wilson & Fletes in Overland Park, Kansas.

Fisk noted that the defendants, whose Missouri- and Kansas-based attorneys did not respond to requests for comment, agreed to an injunction against sending future unsolicited marketing faxes.

He further emphasized, as the settlement notes, that the agreement does not constitute an admission of liability or acknowledge wrongdoing by the defendants.

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$2.5 million settlement

Consumer protection

Venue: US. District Court for the District of Kansas

Case Number/Date: 2:22-cv-02451/Feb. 12, 2024

Judge: Julie Robinson

Mediator: Tom Bender

Caption: Prairie Pointe Orthodontics PA v. Jorns & Associates LLC, Zen Life Holdings Inc., Ben Wood, Malcom Menezes, Jason Charles Guck

Plaintiffs’ Attorneys: Richard Fisk, Beam-Ward, Kruse, Wilson & Fletes, Overland Park, Kansas; Tony Orlandi and Joey Leniski, Herzfeld, Suetholz, Gastel, Leniski and Wall, Nashville, Tennessee

Defendants’ Attorneys: Patrick Edwards and Andrew Scavotto, Stinson, Wichita, Kansas and St. Louis; Sean Walsh, Hinkle Law Firm, Wichita; Brian Whiteley, Barclay Damon, Boston; Kyra Ganswith, Albany, New York