Parents Sue Educational Publisher Scholastic Alleging Misleading Billing, Marketing Scheme

Plaintiffs Say the Company Illegally Traps Consumers Into a System of

Receiving and Being Billed for Unwanted Items

Jan 30, 2006, 00:00 ET from Firmani + Associates

    SEATTLE, Jan. 30 /PRNewswire/ -- Consumers filed a proposed nationwide
 class-action lawsuit today against Scholastic, Inc. (Nasdaq:   SCHL), claiming
 the country's largest publisher of children's books dupes unsuspecting
 consumers into a scheme to purchase unsolicited books and educational items.
     According to the complaint, Scholastic uses its marketing presence within
 elementary schools to convince parents to purchase educational products, and
 then bombards parents with unsolicited goods, demanding payment in violation
 of state and federal law.
     Scholastic settled a charge brought by the FTC for similar actions in
     Under Washington state law, as well as in 14 other states, unsolicited
 goods are deemed to be gifts with no obligation to pay for or return them.
     Nick Styant-Browne, lead attorney for the proposed class, believes that
 there may be as many as 50,000 potential class members who have fallen victim
 to what he calls "one of the most cynical marketing ploys I've witnessed."
     "Scholastic plays on parents' desire to help their children academically,"
 said Styant-Browne. "Hiding behind this guise, we intend to show that
 Scholastic hits parents with an unsolicited barrage of books and products
 while holding out their hand demanding payment."
     According to the Federal Trade Commission (FTC) Web site, Scholastic is
 required to fully disclose the terms of its book clubs to consumers following
 suits filed by the FTC and the Missouri attorney general over its negative
 option billing procedures.
     While negative option billing is not illegal, plaintiffs in this case
 claim that when they tried to cancel their membership they were harassed,
 deceived, intimidated, and threatened, the complaint states.
     Negative option billing requires the recipient to cancel an ongoing order
 or they will continue to be sent and charged for new items.
     A news release issued by the Better Business Bureau states that the
 consumer-rights organization has received more than 250 complaints about
 Scholastic's tactics in one regional office alone.
     According to the complaint, named plaintiff Carly Alcombrack Hart
 responded to an advertisement in a magazine offering free "Barbie and Friends"
 books from Scholastic.  According to Hart, after receiving the free books,
 Scholastic then sent unsolicited encyclopedias, which her husband and
 co-plaintiff, Johnnie Hart, returned in a pre-paid company envelope.
     After sending back the encyclopedias, the Harts received a bill for the
 returned items even though they no longer had them in their possession.  Soon
 after the encyclopedia bill a multitude of other items began to arrive from
 Scholastic -- each one unsolicited and each one with a bill.
     "We began receiving intimidating letters and calls from Scholastic for
 items we never ordered," said Hart.  "It has gotten to the point in which we
 are afraid to answer the phone since they call to browbeat us almost daily."
     According to Hart, the company has sent her account to a collection agency
 and has threatened to provide a negative report to the National Credit
 Reporting Agency, which may stay on her file for seven years.
     According to Hart, Scholastic continues to harass her family to this day
 with constant telephone calls and statements demanding immediate payment.
     "We plan to show that Scholastic's policy of trapping consumers between
 paying for unwanted items or having their credit negatively affected is
 patently illegal," said Styant-Browne.  "We intend to stop the company from
 engaging in this practice and compensate those already harmed by its illegal
     The lawsuit, filed in the U.S. District Court in Seattle by
 Nick Styant-Browne of Hagens Berman Sobol Shapiro and Sim Osborn, managing
 partner of Osborn Machler, seeks to represent and to recover money lost for
 all those who received and were charged for unsolicited goods from Scholastic
 in the United States.
     For more information and to view the complaint, please visit .
     About Hagens Berman Sobol Shapiro
     Hagens Berman Sobol Shapiro is a law firm with offices in Seattle,
 Cambridge, Los Angeles, and Phoenix. The firm has developed a nationally
 recognized practice in class-action litigation.  The firm is co-lead counsel
 in litigation to recover losses from Enron employees' retirement funds and
 represented Washington and 12 other states in lawsuits against the tobacco
 industry that resulted in the largest settlement in the history of litigation.
 The firm also served as counsel in several other high-profile cases including
 the Washington Public Power Supply litigation, which resulted in a settlement
 of more than $850 million, and the $92.5 million settlement of The Boeing
 Company litigation.  Other notable cases include litigation involving the
 Exxon Valdez oil spill; Louisiana Pacific Siding; Morrison Knudsen; Piper
 Jaffray; Nordstrom; Boston Chicken; Noah's Bagels; TAP Pharmaceutical's Lupron
 litigation; and SmithKline Beecham's Paxil Litigation.
     About Sim Osborn
     Simeon Osborn is the managing partner in the law firm of Osborn Machler,
 which specializes in personal injury, products liability, aircraft litigation
 and civil litigation. Osborn has 20 years of experience in litigation. Osborn
 has successfully represented clients against governmental agencies,
 multinational corporations and banks. He was the lead lawyer in Motamed v.
 The Port of Seattle which held the Port liable for a recent shooting in the
 SeaTac Airport parking garage and caused the Port to modify the lighting and
 design of the parking garage. Osborn was selected for inclusion in the
 biannual Best Lawyers in America list, given the highest rating by his peers
 in the Martindale-Hubbell survey, included in the Washington Law & Politics'
 Super Lawyers list, voted into the American Board of Trial Advocates, listed
 in the Bar Registry of Preeminent Lawyers, and has been inducted into the
 Outstanding Lawyers in America. Osborn has argued cases to the Washington
 State Supreme Court and the Washington State Court of Appeals and serves on
 the Board of Governors for Seattle University Law School. Osborn received his
 law degree from University of Puget Sound in 1984.
     Mark Firmani
     Firmani + Associates

SOURCE Firmani + Associates