Troubled company loses appeal, could face flood of suits

By John O'Brien | Sep 13, 2007

RICHMOND - BlueHippo Funding, a company that has garnered attention from several state attorneys generals, lost its appeal in an appellate federal court Monday in a case brought on by a class of unhappy customers.

The U.S. Court of Appeals in Richmond granted the class' motion to dismiss the appeal, which came after a federal court ruling in March that said consumers who had not signed into an arbitration process did not have to in order to resolve their claim. BlueHippo was attempting to reverse that.

The decision opens the door for more lawsuits brought by consumers who did not sign into the arbitration agreement.

Consumers are claiming they paid for computer equipment that they never received, or did receive but that did not work. Also, some consumers paid prices much higher than they would have paid at a store, they say.

It's the subject of at least two current state-powered lawsuits brought on by Florida Attorney General Bill McCollum and West Virginia Attorney General Darrell McGraw.

While the company is fighting back against McGraw, having filed a countersuit, it settled with Maryland Attorney General Doug Gansler in May. According to the Baltimore Sun, BlueHippo will pay $1.4 in restitution and cancel $1.5 in debt.

BlueHippo admitting to no wrongdoing in the settlement. Gansler said the company was jacking up the prices of its merchandise and, in some cases, not delivering ordered products.

According to the report, attorney David Marshall said he hopes the next wave of suits against BlueHippo puts the company out of business, while a company spokesman did not admit to a plan for appeal.

"The company will continue to vigorously pursue the matter," Peter Holran said. "This is just one step in a continuing and complicated litigation matter."

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