Jeff Smith noon, March 8
UCAN files cross-complaint against Shames
Ailing watchdog asks for punitive damages
The financially-strapped watchdog Utility Consumers' Action Network (UCAN) filed suit this week against its former executive director, Michael Shames, who had earlier sued UCAN for libel, wrongful termination, privacy invasion, and other alleged offenses. In a suit that was filed three times, Shames claimed he suffered "shame, mortification and injury to his feelings" because of UCAN's actions against him. In its counter-complaint, UCAN sues Shames for breach of fiduciary duty.
UCAN's counter-complaint says Shames as executive director breached his duty "by, among other things, receiving and collecting unreported, unauthorized, and/or illegal bonus compensation and income derived from intervenor compensation through advocacy by UCAN before regulatory bodies, including before the Public Utilities Commission on prior and present general rate cases." The cross-complaint charges that Shames and possibly others were guilty of fraud and/or malice and UCAN is "entitled to recover punitive and/or exemplary damages."
In one of his filings, Shames sued attorney Michael Aguirre, who represents UCAN whistleblowers David Peffer and Charles Langley. Shames's suit names Peffer, but not Langley. The cross-complaint "is a step in the right direction," says Aguirre. The fact that such a suit has been filed "confirms what Charles and David have been saying all along" about wrongdoing under Shames. Now, says Aguirre, UCAN should move to have Shames's lawyer, Hallen Rosner, removed because of an obvious conflict of interest. Rosner had set up a way to gather complaints from UCAN subscribers, and then raked in thousands of dollars filing suits against companies about whom consumers had complained through UCAN. Rosner is a former student of, and partner with, Robert Fellmeth, UCAN's co-founder, who returned to the board briefly after his former student, Shames, was let go. Fellmeth recently said he would not be a voting member in the next few months, but might reconsider his status in the summer.