Court Reporters Claim|Big Firm Defrauded Them

DETROIT (CN) - Twenty-six court reporters claim Bienenstock & Associates, Michigan's largest court reporting firm, "stole" more than $1 million from them by lying about how much it charged clients, and "bullied their employees with temper tantrums and threats of termination" to keep "their unethical and unlawful business practices" hidden.

Susan Lowry and 25 other court reporters sued Lauren Bienenstock & Associates Inc., Lauren Bienenstock, and Samuel Bienenstock in Macomb County.

Twenty-three of the 26 plaintiffs are women. All the plaintiffs are all licensed court reporters who worked as independent contractors for Bienenstock & Associates.

"This case is about greed, deception and betrayal, the 27-page complaint beings. "Twenty-six licensed court reporters are suing Michigan's largest and best-known court reporting firm to recover over $1 million they believe has been stolen from them by Lauren and Samuel Bienenstock and their court reporting firm. Many more potential plaintiffs are waiting in the wings, so terrorized by the Bienenstocks' promises of retribution that they fear public identification. All of these court reporters, many of who have provided services to the largest law firms and most prominent lawyers practicing in Michigan and throughout the United States, have one thing in common: the Bienenstocks have misled them, lied to them, and stolen huge sums of money from them for almost 20 years, all while pretending to act on their behalf and in their best interests.

"The Bienenstocks' scheme was simple: use every possible tactic to convert payments from attorneys and law firms for plaintiffs' court reporting services to their own use, despite their agreement with plaintiffs that at least 70 percent of those payments belonged to them. The Bienenstocks sold plaintiffs' deposition transcripts without telling them, secretly charged higher rates for plaintiffs' services, and charged for myriad additional services, all the while keeping every penny of the additional income for themselves.

"Like most such schemes, this one also involved a cover up: the Bienenstocks employed elaborate internal processes and office protocols to conceal their unethical and unlawful business practices. The Bienenstocks bullied their employees with temper tantrums and threats of termination should they reveal the truth to plaintiffs, and they consistently denied their dishonest practices when questions arose. The Bienenstocks used plaintiffs' money to fund an outlandish lifestyle replete with luxury homes, exotic cars, and extravagant vacations for themselves and generous gifts for the attorneys and law firms who unwittingly facilitated the Bienenstocks' corrupt business.

"Although startling enough on its face, the Bienenstocks' outrageous behavior is particularly execrable in light of the integral role licensed court reporters and court reporting firms play in our legal system. They provide the certified transcripts of sworn deposition testimony relied upon in nearly every case and nearly every court here and across the country, their activities are strictly regulated by Michigan statute and the Michigan Court Rules, and they are regulated by the State Court Administrative Office, the administrative agency of the Michigan Supreme Court. The Bienenstocks' longstanding scheme to pocket the plaintiffs' income thus undermines the integrity of the vital process by which certified deposition transcripts are produced for the use of this and other courts."

The reporters add: "The customers generally ordered transcripts directly from the court reporters on the same day as the depositions. When this occurred, plaintiffs were aware that a transcript had been ordered and they expected to receive and, on information and belief, usually did receive what they believed was their agreed-upon share of the payment received by Bienenstock & Associates."

But when customers ordered transcripts after the day of the deposition, "defendants took calculated steps to conceal the existence of back orders and payments received for back orders from plaintiffs so that they could keep all of the customers' payments for themselves, including plaintiffs' share of those payments," the complaint states.

The Bienenstocks also charged customers a higher hourly rate than it paid plaintiffs and sometimes negotiated higher per page rates than the rates it disclosed to the reporters, according to the complaint.

The court reporters seek damages for conversion, breach of contract, fraud, fraudulent concealment, and unjust enrichment.

They also ask the court for a declaratory judgment as to which claims are subject to arbitration agreements, because the Bienenstocks did not provide the reporters with a copy of their executed employment contracts.

They are represented by Kevin O'Shea with the Miller Law Firm in Rochester, Mich.

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