Professional Documents
Culture Documents
Plaintiffs, Patrick Kirlin and Daniel Pilgrim, by their attorneys, Hermann, Cahn
& Schneider, LLP and Meiselman, Denlea, Packman, Carton & Eberz P.C., as and
for their class action complaint, allege, with personal knowledge as to their own
business practice that Defendants Universal Health Card LLC (“UHC”) and
have established one of the largest consumer health benefits scams in the United
program – the Universal Health Card – that purportedly provides discounts for
various medical services. Because the medical providers that Defendants claim
accept the Universal Health Card (hereinafter “Card”) do not in fact accept it – and
most have not even heard of the Card – Defendants’ advertisements serve as a
pretext for gaining access to consumers’ credit and debit card information in order
enroll in the Card membership program, charging Plaintiffs and other vulnerable
that neither provides health care, nor can be used to gain discounts at various
membership program with the knowledge that the medical providers that Defendants
claim accept the Card, in fact, do not accept it. Nor would Plaintiffs and consumers
authorize Defendants to charge their credit cards or debit from their bank accounts
any monies if they knew the truth. Moreover, when consumers contact Defendants
to request that they remove and refund the fees charged to their credit or debit
cards, they are given the runaround, and are unable to obtain refunds of the
charges.
consumers, such as Plaintiffs, have been charged “registration” fees and monthly
5. This suit is brought pursuant to the Ohio Consumer Sales Practices Act,
Ohio R.C. 1345.01, et seq. (“OCSPA”), and the common law of this State as well as
all persons who were charged fees by Defendants, or any one of their subsidiaries,
for the Card maintained and/or administered and promoted by Defendants during
the period from January 1, 2006, to the present. It seeks, inter alia, compensatory
damages, including, but not limited to, a refund of all fees charged to consumers for
the Card; reimbursement of expenses, interest and fees incurred by Class members
as a result of Defendants’ scheme; attorneys’ fees; and the costs of this suit.
3
6. Jurisdiction in this civil action is authorized pursuant to 28 U.S.C.
§ 1332(d), as each Plaintiff’s citizenship is diverse from both Defendants, there are
more than 100 class members, and the amount in controversy is in excess of $5
million.
common law causes of action, including claims based on violations of Ohio R.C.
1345.01, et seq., and the common law of this State, pursuant to 28 U.S.C. § 1367(a).
substantial part of the events or omissions giving rise to Plaintiffs’ claims occurred in
grounds that a substantial part of the events relating to Plaintiffs’ claims occurred in
Parties
Pennsylvania, County of Delaware. Mr. Kirlin was deceived into paying for the Card,
and UHC charged Mr. Kirlin’s credit card for the Card.
Mississippi, County of Noxubee. Mr. Pilgrim was deceived into paying for the Card,
and UHC debited Mr. Pilgrim’s checking account for the Card.
4
12. Defendant Universal Health Card, LLC is a limited liability company
established under the laws of the State of Ohio, with its principal place of business in
Massillon, Ohio.
under the laws of the State of Georgia, with its principal place of business located in
14. Defendants UHC and Coverdell do actual business throughout the State
Operative Facts
15. According to the National Coalition on Health Care, total national health
care expenditures rose at approximately two times the rate of inflation in 2008.
These skyrocketing costs significantly affect the availability of affordable health care
16. The United States Census Bureau reported that, in 2005, more than 15
inadequate health insurance are dramatic. Studies have shown that 50% of all
personal bankruptcy filings were partly the result of medical expenses. And, studies
have documented that more than 25% of housing problems have resulted from
5
medical debt, including the inability to make rent or mortgage payments and the
development of bad credit ratings. Indeed, the National Coalition on Health Care
reports that approximately 1.5 million families lose their homes to foreclosure every
17. Since the early 1990s, the availability of affordable health care has
been the subject of national political debate. The United States is one of the few
industrialized nations in the world without universal health care. “Universal health
all eligible residents of a governmental region and often covers medical, dental, and
mental health care. Although many countries have implemented the concept of
universal health care in different ways, the common denominator for all such
18. Support for health care reform appears overwhelming with recent polls
indicating that 66% of Americans support universal health care. Not surprisingly,
news of health care reform and universal health care for Americans has dominated
6
consumers sign up for the Card, they speak to customer service representatives
based in Canton, Ohio and are charged by UHC from its headquarters in Ohio.
discount medical plan organization (“DMPO”). When consumers register for the Card
similar to “universal health care” – Defendants prey upon the uninsured and
underinsured. For example, UHC’s website states: “The Universal Health Card
reduces the financial barriers everywhere within the healthcare system. This enables
our members to get the most out of their healthcare spending and while accessing
the health solutions they need and deserve.” Thus, UHC assures consumers that:
22. For those without health insurance facing soaring health care costs,
7
false. Few, if any, health care providers provide discounts for Card members and the
In addition, a sidebar to the purported news item states in large, bold typeface:
24. Defendants make every effort to imbue their false news story with
indicia of legitimacy. For example, in addition to the headline and sidebar, there is a by-
line with an author’s name and an apparent news agency, “Universal Media Syndicate.”
However, “Universal Media Syndicate” is not an actual news bureau like the similarly
advertising company. The length of the advertisement, four columns of newspaper text,
25. Thus, the advertisement at first glance seems like a legitimate news
item, when in fact it is a paid advertisement touting the Card, which the advertisement
states gives you free “affordable care provided by 561,000 doctors, dentists,
pharmacists and hospitals.” By prominently touting the “free” Card, Defendants lead
8
consumers to believe that such consumers will not, in fact, be charged for obtaining the
Universal Health Card. But the Card is not free; consumers must pay an $18.00
“registration fee” to get a 30-day “free” trial. Thereafter, consumers must pay $49.00
per month to continue using the Card. However, the $49.00 monthly fee is obscured in
26. Defendants’ use of the word “free” to promote a card that is subject to a
fee runs afoul of Federal Trade Commission (“FTC”) regulations. As the FTC has made
clear:
9
27. Similarly, the Ohio Attorney General has promulgated rules that specify
how the word “free” can be used in advertising, which rules Defendants have
violated. For example, the Ohio Attorney General prohibits using the word “free” in
consumer transactions unless “all the terms, conditions, and obligations upon which
receipt and retention of the ‘free’ goods or services are contingent [are] set forth
clearly and conspicuously at the outset of the offer.” Ohio Admin Code § 109:4-3-04.
urgency among consumers desperate for affordable health care. As such, Defendants’
advertisement states “For the next 48 hours, the new Universal Health Card is available
to individuals and entire families and you don’t have to be over 65 or have low income
to get the new card.” (emphasis added). Attributing a statement to Kenneth J. Geis, the
“Director of the National Hotline,” Defendants’ fake news story further provides: “Our
reason for the 48-hour deadline is simple; we want to make sure that everyone gets to
speak to a real person who can instantly register and then issue the free card.”
Accordingly, consumers feel pressured to act quickly in order to obtain a “free card” for
affordable health care. In reality, however, the Card is not free and is available without
29. Defendants also assure those in need of health care that, “All health
care needs are being provided at affordable rates by over 561,000 health care
professionals, including Doctors and Hospitals locally and across the nation.” However,
Defendants’ claim that more than 561,000 medical providers accept the Card is false.
10
Plaintiffs and other Class members that have contacted the medical providers listed on
the Card’s website have found that most – if not all – of the doctors, dentists,
pharmacists and hospitals that the Defendants claim accept the Card do not in fact
accept it, nor have most even heard of, the Card. Thus, consumers are deceived into
paying for a Card which is worthless as it cannot be used as promised: for discounts at
advertisements are enrolled in the bogus Universal Health Card program without
their knowledge or consent that the Card does not, in fact, give consumers discounts
on health care. Defendants also promise consumers that certain doctors participate
in the program, only to have Plaintiffs later find out that their medical providers do not
accept the Card. Some consumers have even dropped their regular health insurance
policies for the Card thinking it was cheaper, not realizing that the Card is not a
substitute for health insurance, and that most doctors and hospitals do not accept it
anyway.
31. Moreover, many consumers may not even realize that they are paying
for the “free” Card as Defendants do not even send bills to consumers requesting
payment or authorization for payment. Instead, Defendants collect fees for the Card by
directly charging consumers’ credit cards, bank accounts, and debit cards.
11
advocates have roundly condemned Defendants’ deceptive practices. For example,
deceptive claims. The reporter contacted a number of the medical providers listed
on the Universal Health Card website, and found that they did not accept the Card.
The broadcast also noted that the Alabama Better Business Bureau contacted some
of the Card’s listed medical providers and found that most did not accept the Card.
report, and the Massachusetts North Adams Transcript published a story on insurance
34. In addition, the ombudsman of the North Carolina News & Observer
even took his newspaper to task for accepting the Card’s advertisement, as he found
the claims made in the advertisement were either deceptive or outright false.
35. The Rhode Island Office of the Health Insurance Commission issued a
consumer alert after the Card’s advertisements appeared in the Providence Journal.
John Cogan, the Executive Counsel/Executive Assistant for Policy and Program
Review for the Rhode Island Office of the Health Insurance Commission, identified
several reasons for the consumer alert, including: (a) Defendants’ advertisement is
advertisement suggests the Card is “free,” but the Card is subject to a fee; (c) the
monthly charge is obscured and the amount $49 is never printed numerically – it is
spelled out and difficult to find in the lengthy advertisement; (d) the advertisement
12
does not explain what the discounts are; and (e) the advertisement claims that
thousands of health care providers accept the Card, which is not true.
36. The Better Business Bureau (“BBB”) serving the Canton, Ohio region
has assigned a grade of “F” to UHC. According to the BBB, it assigns grades from A to
F with pluses and minuses. A+ is the BBB’s highest grade and F is the lowest. The
trustworthy manner and will make a good faith effort to resolve any customer concerns.”
Thus, UHC’s failing grade from the BBB confirms that it is not operating in a trustworthy
2009, Plaintiff saw a full page advertisement in the Philadelphia Inquirer for the Card.
Plaintiff believed that a significant number of healthcare providers accepted the Card
and that it would provide him and his family with affordable health care, which they
38. Plaintiff called the phone number listed on the Card’s advertisement,
and provided his personal information including his name, address and credit card
number. Thereafter, on or about February 11, 2009, Plaintiff’s credit card was charged
13
an $18.00 “free” registration fee as payment for enrolling in the Universal Health Card
membership program.
39. After paying the registration fee, Plaintiff discovered that there were no
medical providers who accepted the Card within reasonable driving distance from his
home. Plaintiff called several medical providers listed on the Card’s website and was
shocked to learn that they did not in fact accept the Card. Plaintiff then uncovered
many complaints on the internet about the Card, most of which complained that the
40. It was at this time that Plaintiff realized that the Card was worthless, and
that the advertisement for the Card was deceptive and untrue. He therefore attempted
to cancel his Card membership. He was told he would not be charged the $49.00
monthly membership charge, but that the $18.00 “registration” fee was non-refundable.
41. Plaintiff was enrolled in membership for the Card without his knowledge
or consent that in fact the Card was worthless, and could not be used at any medical
providers within reasonable driving distance from his home. He has derived no benefit
independent truck driver without health insurance and is thus responsible for his own
health care costs. On or about March 15, 2009, Plaintiff saw a full page
advertisement for the Card in his local newspaper, the Clarion Ledger based in
14
“affordable care provided by 561,000 doctors, dentists, pharmacists and hospitals.”
Reading the advertisement, Plaintiff did not know that the Card was not free; that he
would have to pay an $18 “registration fee” to get a 30-day “free” trial, and that he
would have to pay $49 per month to continue using the Card.
43. Plaintiff was unaware that the Card cannot be used as a replacement
for traditional health insurance, but can be used only to obtain purportedly a small
providers, rather than purchasing actual health insurance coverage for himself.
44. Plaintiff called the phone number listed on the Card’s advertisement,
and provided his personal information including his name, address and checking
account number. Thereafter, Plaintiff’s checking account was debited the $18.00
registration fee as payment for enrolling in the “free” Card membership program.
45. After paying the registration fee, Plaintiff uncovered many complaints on
the internet about the Card, most of which complained that the Card was a scam. At
that point, Plaintiff decided to call approximately a dozen medical providers in his
geographic area that the Card’s website claimed accepted the Card. None of the
medical providers with whom Plaintiff spoke had ever heard of the Card, and therefore
would not accept it. Plaintiff was also shocked to find out that some of the phone
numbers provided for the medical providers listed on the Card’s website were
disconnected.
15
46. It was at this time that Plaintiff realized that the Card was worthless, and
that the advertisement for the Card was deceptive and untrue. He, therefore, on or
about March 16, 2009, attempted to cancel his Card membership. He was told he
would not be charged the $49.00 monthly membership charge, but that the $18.00
47. Plaintiff was enrolled in membership for the Card without his knowledge
or consent that in fact the Card was worthless, and could not be used at any of the
medical providers in his area as listed on the Card’s website. Thus, he has derived no
and State authorities about the Card, web sites are full of consumers who have
complained about Defendants’ unfair and deceptive practices, and newspaper articles
other consumers who purchased the Card. Nor do Defendants provide any notice,
adequate notice or full disclosure of their unfair and deceptive scheme of charging
16
Plaintiffs and other members of the Class fees for a worthless membership in the Card
program.
51. Plaintiffs bring this action on their own behalf and additionally, pursuant
to Rule 23 of the Federal Rules of Civil Procedure, on behalf of a nationwide class (the
“Class”) of all persons in the United States who were charged fees by Defendants, or
any one of their subsidiaries, for the Card marketed, promoted, maintained and/or
administered by Defendants, during the period from January 1, 2006, to the present.
52. Excluded from the Class are Defendants; any parent, subsidiary, or
affiliate of Defendants; any entity in which Defendants have or had a controlling interest,
or which Defendants otherwise control or controlled; and any officer, director, employee,
53. This action is brought as a class action for the following reasons:
impracticable;
Sales Practices Act, Ohio R.C. 1345.01, et seq. or similar consumer protection laws
of other states;
17
ii. whether Defendants are being unjustly enriched by,
among other things, charging Plaintiffs and the Class fees for the Card; and
Class, and Plaintiffs have retained attorneys experienced in class and complex
and efficient adjudication of the controversy, for at least the following reasons:
obligations will continue without remedy, additional consumers and purchasers will
adjudicated, the Court will be able to determine the claims of all members of the
Class;
18
iv. A class action will permit an orderly and expeditious
administration of Class claims, foster economies of time, effort, and expense and
Class would create a risk of incompatible standards of conduct for Defendants and of
deceptive acts and practices in violation of the Ohio Consumer Sales Practices Act,
Ohio R.C. 1345.01, et seq. (“OCSPA”), the purpose of which is to prohibit deceptive and
OCSPA because they are persons “engaged in the business of effecting or soliciting
consumer transactions, whether or not the person deals directly with the consumer” as
19
defined in Ohio R.C. § 1345.01(c). Specifically, Defendants each have engaged in
unfair and deceptive conduct by falsely promoting, marketing and/or administering the
“free” Universal Health Card which is not in fact “free” and cannot be used to obtain
administering the Universal Healthcare Card program emanate from the State of Ohio.
the Ohio Attorney General, including but not limited to Ohio Admin Code § 109:4-3-04,
and Federal Trade Commission regulations, including but not limited to 16 C.F.R. Part
251.1(a)(2). These rules prohibit the use of the word “free” in advertising in the manner
used by Defendants because the advertisements do not clearly state the conditions to
59. Defendants’ advertising and marketing also violate Ohio Admin Code §
109-4-3-02 in that Defendants’ print advertising and other promotional materials do not
clearly and conspicuously disclose all the exclusions, reservations, limitations and
conditions associated with membership in the Card. For example, the monthly charge
is obscured and the amount $49.00is never printed numerically. In addition, the
1345.03 because Defendants know that consumers will not receive a substantial benefit
from the Card and that the terms upon which consumers agree to obtain the Card are
20
misleading statements in their advertising and marketing materials on which consumers
61. Plaintiffs and the Class have suffered an ascertainable loss of money or
62. By reason of the foregoing, Defendants have violated the OCSPA and
are liable to Plaintiffs and the Class, pursuant to Ohio R.C. §1345.09 and similar laws of
other states, for the damages that they have suffered as a result of Defendants’ actions,
enriched themselves at the expense of Plaintiffs and the Class and are required, in
equity and good conscience, to compensate Plaintiffs and the Class for damages
65. By reason of the foregoing, Defendants are liable to Plaintiffs and the
Class for damages incurred as a result of Defendants’ actions, the amount of such
21
2. On Plaintiffs’ First Cause of Action, awarding against Defendants the
damages that Plaintiffs and the other members of the Class have suffered as a result
damages that Plaintiffs and the other members of the Class have suffered as a result
4. Awarding Plaintiffs and the Class interest, costs and attorneys’ fees;
and
5. Awarding Plaintiffs and the Class such other and further relief as this
s/Hugh D. Berkson
Anthony J. Hartman 0021226)
Hugh D. Berkson (0063997)
Jay H. Salamon (0029192)
HERMANN CAHN & SCHNEIDER LLP
1301 East Ninth Street, Suite 500
Cleveland, OH 44114
Tel: 216.781.5515
Fax: 216.781.1030
ahartman@hcsattys.com
hberkson@hcsattys.com
jsalamon@hcsattys.com
22
Jeffrey I. Carton
Jerome Noll
Christine M. Ford
MEISELMAN, DENLEA, PACKMAN,
CARTON & EBERZ P.C.
1311 Mamaroneck Avenue
White Plains, New York 10605
(914) 517-5000
jcarton@mdpcelaw.com
jnoll@mdpcelaw.com
cford@mdpcelaw.com
JURY DEMAND
A jury of the maximum number allowed by law is hereby demanded at the trial
of the within matter.
s/Hugh D. Berkson
Anthony J. Hartman (0021226)
Hugh D. Berkson (0063997)
Jay H. Salamon (0029192)
Attorneys for Plaintiffs
23