Class Action Defense Strategy Blog

Up-to-date Information on Class Action Litigation

In 23-3 Coinbase, Inc. v. Suski (05/23/2024) (supremecourt.gov) (May 23, 2024), the U.S. Supreme Court once again delved into the frequently litigated arena of arbitration agreements. Specifically, the Court considered whether the Federal Arbitration Act (“FAA”) empowers courts or arbitrators to decide which contract controls when (1) parties have executed multiple contracts, and (2) at least one contract contains an arbitration agreement delegating the threshold issue of arbitrability to an arbitrator while another sends arbitrability disputes to the courts. Guided by “basic principles of contract” law, the Court unanimously held that courts—not arbitrators—must decide which contract governs the parties’ dispute.
Continue Reading Supreme Court Rules That Judges – Not Arbitrators – Must Resolve Disputes Where Various Agreements May Govern a Particular Dispute and Those Agreements Conflict on the Forum for Deciding Arbitrability

On May 16, 2024, the United States Supreme Court unanimously held that, when enforcing an arbitration clause subject to the Federal Arbitration Act (FAA), if any party requests a stay, the district court lacks discretion to dismiss the underlying lawsuit. The high court’s ruling reverses the decision of the Ninth Circuit upholding dismissal, and resolves a long-simmering circuit split. Notwithstanding the FAA’s language appearing to mandate a stay, in which several circuits held that district courts have discretion to dismiss cases (without prejudice) pending arbitration. 
Continue Reading Supreme Court Holds that District Courts Must Stay – Not Dismiss – Actions Brought by Parties Subject to Binding Arbitration Agreements

Several recent cases arising under the federal Food, Drug, and Cosmetic Act (“FDCA” or the “Act”), 21 U.S.C. § 301 et seq., highlight the usefulness of preemption as a defense against putative class actions concerning drugs, cosmetics, dietary supplements, medical devices, and other consumer products subject to the Act. The FDCA provides for exclusive enforcement by the FDA and has no private right of action. Implied preemption also extends to state law claims based on allegations that the defendant violated FDA regulations. Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 349 n.4 (2001) (citing 21 U.S.C. §337(a)) (“The FDCA leaves no
Continue Reading FDCA Preemption: A Powerful Tool for Defending Class Actions

False advertising and labeling consumer class actions filed against consumer packaged goods companies have surged in the last few years, with more than 300 new cases filed each year since 2021. More than a quarter of these have been filed in California federal courts. A key question in many of these cases is what information the reasonable consumer would read and rely on from the product packaging. In June 2023, the Ninth Circuit weighed in on this topic, providing helpful guidance to companies.
Continue Reading The Ninth Circuit Declares that Ambiguity can be Cured with Back Label

The Ninth Circuit recently struck a blow against plaintiffs’ attorneys’ ability to recover handsome attorney’s fee awards in class action settlements when there is little actual benefit to the class. In Lowery v Rhapsody International, Inc., No. 22-15162 (9th Cir. June 7, 2023), a Ninth Circuit panel reversed the U.S. District Court for the Northern District of California’s award of $1.7 million in attorney’s fees to plaintiffs’ counsel in a copyright class action, finding that the fee award was not reasonable when compared to the class’ actual recovery of $52,841, without any injunctive relief.
Continue Reading Ninth Circuit Slashes Exorbitant Attorney’s Fee Award That Would “Make the Average Person Shake Her Head in Disbelief”

Blockbuster Video may be extinct, but an obscure law designed to protect the privacy of video-tape renters is very much alive—the Video Privacy Protection Act (“VPPA”), 18 U.S.C. § 2710, et seq. Enacted in 1988 after The Washington Post published a profile of Supreme Court nominee Robert Bork’s video-rental history, VPPA prohibits any “video tape service provider” from knowingly disclosing a consumer’s personally identifiable information (“PII”) to a third party without the consumer’s express consent. The VPPA entitles prevailing plaintiffs to liquidated damages of $2,500 per violation.
Continue Reading Cutting the Cord on Video Privacy Protection Act Claims – The Emerging Non-Consumer Defense

In recent years, website operators have increasingly used chatbots to improve customer engagement and provide customer support. In the past several months, however, the plaintiffs’ bar has expressed concerns about the privacy implications of these chatbots, and has brought a wave of litigation challenging their use under the California Invasion of Privacy Act (CIPA).
Continue Reading The Tides are Turning on a Wave of California Privacy Litigation

In Oberstein v. Live Nation Ent. Inc. No. 21-56200 (9th Cir. Feb. 13, 2023), the Ninth Circuit addressed the question of whether the arbitration and class action waiver clauses on Ticketmaster’s and Live Nation’s websites effectively prevented plaintiffs from bringing suit. Plaintiffs in the case sought to bring a class action lawsuit against Ticketmaster and Live Nation alleging as the basis for antitrust claims that the companies used their market power to charge above-market prices for concert tickets. Ticketmaster and Live Nation sought to compel the named plaintiffs to individual arbitration under the binding arbitration and class action waiver clauses
Continue Reading Ninth Circuit Decision in Live Nation and Ticketmaster’s Favor Highlights Subtleties of Drafting Enforceable Arbitration Provisions

Among other things, the federal TCPA imposes liability for calling/texting cell phone numbers using an Automatic Telephone Dialing System (“ATDS”) without sufficient prior express consent. As defined by the TCPA, ATDS is “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” The TCPA grants a private right of action and allows a plaintiff to recover statutory penalties of $500 per call/text in violation, or up to $1,500 for a knowing or willful violation. These statutory penalties have made the TCPA a favorite among
Continue Reading The Ninth Circuit Further Narrows The Meaning Of ATDS Under The Telephone Consumer Protection Act

Since 2019, a staggering number of “flavor” lawsuits have been filed, with dozens of putative class actions filed in a single month and more than 100 in 2021 alone.  While some lawyers appear to have an insatiable appetite for filing these suits, courts appear to find them mostly unpalatable.  The complaints  allege that packaging on food and beverage items is false and misleading because the challenged products do not contain certain ingredients or because the flavor is achieved by using ingredients other than or in addition to what consumers “expect” to be the source of the flavor.  Manufacturers of plant
Continue Reading Are Flavor Cases Fizzling? Two More Courts Grant Motions to Dismiss

In Brice v. Haynes Investments LLC, No. 19-15707 (9th Cir. Sept. 16, 2021), the Ninth Circuit considered an appeal by shareholders in Native American tribe-linked online lenders of a district court order denying the shareholders’ motion to compel arbitration. The Ninth Circuit reversed the order because, under the terms of the parties’ agreement, the enforceability of the arbitration agreement was a question for the arbitrator, not the judge, to decide.
Continue Reading Class Action Waivers Redux: Ninth Circuit Upholds Arbitration Provision Delegating Enforceability Determination to Arbitrator

Continuing the trend of recognizing Illinois’ Biometric Information Privacy Act (“BIPA”) as a muscular privacy-protective statute, the Illinois Appellate Court for the First District has ruled that the most common statutory violations of BIPA are subject to a five-year statute of limitations. BIPA imposes several duties on companies that collect, store or use biometric data—e.g., fingerprints, facial geometry scans—from Illinois residents. Prevailing plaintiffs may recover liquidated damages ranging from $1,000 to $5,000 for each BIPA violation (plus attorneys’ fees), and these provisions incentivize plaintiffs’ lawyers to bring BIPA claims as class actions.
Continue Reading Illinois Appellate Court Affirms 5-Year Statute of Limitations Period for Certain BIPA Claims

The Supreme Court further limited consumer lawsuits in TransUnion, LLC v. Ramirez, siding with credit reporting agency TransUnion in a 5-4 decision holding that thousands of consumers improperly flagged as potential terrorists do not have standing to sue the company for damages. TransUnion expands upon Spokeo, Inc. v. Robins, 2578 U.S. 330, 340 (2016) in limiting standing under the Fair Credit Reporting Act (FCRA) and Article III to plaintiffs who have suffered a concrete harm, not just the violation of a statutory right. As a practical matter, TransUnion significantly narrows plaintiffs’ ability to assert claims in federal court on behalf
Continue Reading Supreme Court Addresses Class Action Standing in Ramirez Case: Requires “Concrete” Injury for Article III Standing for Class Members

In Ford v. TD Ameritrade Holding Corp., 2021 U.S. App. LEXIS 12008 (8th Cir. Apr. 23, 2021), the United States Court of Appeals for the Eighth Circuit reversed a district court’s order certifying a class of customers who had used the defendant’s brokerage services to trade securities and were allegedly injured by defendant’s undisclosed “order routing practices.”  The Eighth Circuit determined that plaintiff’s expert’s proposed algorithm could not overcome the complex, trade-by-trade inquiry needed to adjudicate each class member’s economic loss, and so failed to satisfy Federal Rule of Civil Procedure 23(b)(3)’s requirement that common issues of law
Continue Reading Eighth Circuit Holds Rule 23(b)(3)’s Predominance Requirement Not Met in Securities Fraud Action Against Brokerage Firm

On April 1, 2021, the U.S. Supreme Court in the class action case of Facebook, Inc. v. Duguid, No. 19-511, resolved a circuit court split on the meaning of automatic telephone dialing system (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”) by unanimously reversing the Ninth Circuit’s broad definition and narrowly interpreting ATDS.  Bringing much needed clarity the Federal Communications Commission has not been able to provide to date, the Supreme Court held that to qualify as ATDS “a device must have the capacity to store a telephone number using a random or sequential number generator, or to produce a
Continue Reading The U.S. Supreme Court Limits TCPA Liability By Narrowly Interpreting ATDS