DENVER — The timing between the filing of a class action lawsuit against a Denver rental property owner and a new law allowing for greater leeway over who can file such lawsuits is being scrutinized.
At the center of the controversy is whether one of the attorneys for the plaintiffs, State Rep. Steven Woodrow, used his power and position as a state legislator to ensure himself, along with other trial lawyers, big payouts for successful suits that otherwise would likely not advance. A Denver judge said as much in his ruling to allow the class action to move forward.
Because “the claims are small, tenants likely wouldn’t have the motivation to take on the expense of individual lawsuits, so class action is the best path forward,” said Denver District Court Judge Martin Egelhoff in his ruling from Feb. 22.
According to the Colorado Sun, in October of 2021, residents of the Mint Urban Infinity Complex in Denver filed a request for a class action lawsuit against the property’s management company, Cardinal Group Management & Advisory, and the complex’s owners, Glendale Properties I and Glendale Properties II, for “allowing unsafe and unsanitary living conditions to go unaddressed.”
The problems included cockroach infestations, sewage problems, no hot water, broken air conditioning systems during the summer months when many people were working from home after the government forced a shutdown of most all “non-essential” businesses during COVID-19, and broken elevators.
Woodrow sets the stage
Just three months later, after 9to5 Colorado, a left-wing Denver nonprofit that is covering the tenants’ legal expenses and helping organize Mint Urban Infinity tenants, retained Rep. Woodrow, a Denver Democrat, as its legal counsel, Woodrow introduced a bill that changed the way class action lawsuits can be brought to trial, a change that leads to monetary windfalls for private attorneys who can now bring cases on their own.
Prior to the passage of House Bill 22-1071, “Damages in Class Actions Consumer Protection Act,” it was up to the Colorado Attorney General to initiate claims on behalf of injured consumers for violations of Colorado’s consumer protection laws.
After the passage of HB 1071, lawyers can now bring such claims as a class action case. This then allows trial lawyers, such as Woodrow, to collect their attorneys’ fees from the defendant. No additional damages are awarded to the actual wronged consumer, only the trial attorneys who filed the case. Nor would a small business that successfully defended against the action be allowed to recover its own attorney’s fees.
According to Westword, Woodrow’s clients are seeking damages and refunds for overpayment during months that residents lived in uninhabitable conditions, as well as certain fees charged by property management, and other costs incurred over the course of the lawsuit. If the now former Mint residents’ case is successful, a jury will determine the specific amount in damages owed.
Shayne Madsen, director of the Political Law Center at the Independence Institute, criticized the bill when it was first introduced, saying it would do nothing but bog down the court system and pad the pockets of class action attorneys, specifically calling out Woodrow.
“The bill is sponsored by Rep. Steven Woodrow of Denver, who is himself a class action plaintiff’s attorney,” Madsen wrote in a Complete Colorado opinion piece. “It goes without saying that Rep Woodrow’s business will reap the benefits of passage, but the individual consumers in his district will see no benefit for themselves.”
The bill did eventually pass and was signed into law by Governor Polis on March 21, 2022.
Woodrow now stands to benefit
Although it took nearly three years for a decision to come down, Egelhoff said the suit could move forward as a class action case, guaranteeing Woodrow a large percentage of the monetary damages if tenants prevail. In other words, Woodrow now stands to benefit financially from his own lawmaking.
Egelhoff said there are two sets of people who qualify for relief under a class action suit: Anyone who lived at Mint Urban from September 2018 to June 30, 2022, and anyone who lived there during that period and was charged an administrative fee on or after August 2, 2019. That fee was assessed to all tenants and was meant to cover the costs of addressing maintenance during the lease period.
Although what Woodrow did is not illegal, nor is it new, the optics are not pretty considering there could be thousands of tenants from the 561-unit complex over the four years being called into question that jump on board, leading to a very large settlement in the end.
According to Madsen, this kind of legislation will only hurt Colorado in the long run.
“This same kind of law is in effect in California where businesses and their attorneys report that such consumer claims are routinely added to all litigation against businesses, resulting in a dramatically increased caseload to the courts and in costs to businesses,” Madsen said.
