Class Action Defense Strategy Blog

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In a prior post (here), we highlighted some questions that companies may want to ask when evaluating whether their arbitration clauses are enforceable.  If changes need to be made to those clauses, then companies should consider how to implement those changes so as to ensure those are enforceable too.  The following is what you should be thinking about and asking.…
Arbitration clauses with class action waivers remain one of the most effective tools that consumer-facing companies can employ to fend off consumer class action litigation.  Yet many companies stumble both in getting their customers to agree to the arbitration clause and in drafting a clause that captures all claims that they might face.  As we continue to work, shop, and engage with the world from home, companies should perform a quick “health-check” of their arbitration clause, asking themselves at least the following questions:…
The plaintiffs’ bar has continued to challenge sourcing and sustainability claims made by food manufacturers.  In Ehlers v. Ben & Jerry’s Homemade Inc., 2020 U.S. Dist. LEXIS 80773 (D. Vt. May 7, 2020), however, the court dismissed such a challenge where the allegedly false statement was taken out of context and the plaintiff ignored the totality of the company’s representations.  “A plaintiff who alleges that he was deceived by an advertisement may not misquote or misleadingly excerpt the language of the advertisement in his pleadings and expect his action to survive a motion to dismiss.”  This case should help companies…
In Duran v. LaBoom Disco, Inc., No. 19-600-cv (2d Cir. Apr. 7, 2020), the Second Circuit joined the Ninth Circuit in expansively defining Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).  The Second Circuit held, like the Ninth Circuit before, that ATDS includes automated texts/calls to consumers from stored lists, while the Third, Seventh, and Eleventh Circuits have held the opposite, requiring that an ATDS make texts/calls not only automatically, but from a list of randomly generated numbers.  The Second Circuit decision highlights the growing Circuit split on the issue and potentially foreshadows a date with…
The Telephone Consumer Protection Act (“TCPA”) generally prohibits automated calls, including text messages, to cell phones without sufficient prior express consent, and imposes a statutory penalty of $500 to $1,500 per call/text in violation.  Calls that serve an “emergency purpose” are completely exempt from the TCPA.  The FCC’s rules define “emergency purpose” to mean “calls made necessary in any situation affecting the health and safety of consumers.” See 47 C.F.R. § 64.1200(f)(4).…
The Seventh Circuit has recently joined the Second, Third, Sixth and Eleventh Circuits in adopting a narrow interpretation of Automatic Telephone Dialing System (ATDS) under the Telephone Consumer Protection Act (“TCPA”), one that excludes equipment that dials numbers from a customer database.  See Gadelhak v. AT&T Services, Inc., No. 19-1738, — F.3d —-, 2020 WL 808270 (7th Cir. Feb. 19, 2020); see also Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301 (11th Cir. Jan. 27, 2020); Gary v. Trueblue, Inc., 786 F. App’x 555 (6th Cir. Sept. 5, 2019); King v. Time Warner Cable, 894 F.3d 473 (2d Cir.…
The California Court of Appeal recently made it more difficult for plaintiffs to certify class actions based on false advertising or fraud.  In Downey v. Public Storage, Inc., Case No. B291662, ___Cal.App.5th___ (Feb. 6, 2020), the Court of Appeal affirmed an order denying class certification on the grounds that issues of deception and reliance were not susceptible to common proof. In March 2015, several plaintiffs filed a class action against Public Storage, alleging that its $1 promotional rate was deceptive, violated California’s Unfair Competition Law (Bus. & Prof. § 17200 et seq.), and constituted a false advertisement.  In particular, the…
As one year ends, another begins.  So too it seems with California’s embrace of multi-million dollar privacy class actions.  The purported illegal recording of cellular or cordless phone calls under Section 632.7 of the California Penal Code has long been a favorite of the class action bar due to the availability of staggering statutory damages.  These actions are all but dead, however, following the Fourth Appellate District’s decision in Smith v. LoanMe, Inc., 2019 DJDAR 11930, holding that some form of eavesdropping is required to state a cause of action under Section 632.7.  No longer is the simple recording of…
When it comes to compelling arbitration in California, courts often put the moving party to the test. The most recent example is the Fourth Appellate District’s decision in Fabian v. Renovate America. Affirming a lower court’s decision, the Court of Appeal held that the defendant failed to meet its burden of proof that an electronically signed contract – one containing a 15-digit alphanumeric verification from DocuSign and the words “Identify Verification Code: ID Verification Complete” – was in fact signed by the plaintiff. Stating that the “burden of authenticating an electronic signature is not great,” the Court of Appeal went…
Last week, in what may be the first of its kind, a putative class of Massachusetts consumers filed a false labeling class action complaint against Global Widget LLC, d/b/a Hemp Bombs (“Hemp Bombs”) (Ahumada v. Global Widget LLC, D. Mass. Case No. 1:19-cv-12005), challenging the labeling of numerous Hemp Bombs products, including gummies, lollipops, capsules, syrup, vape and pet products.…
Recently, the Sixth Circuit in Gary v. Trueblue, Inc., No. 18-2281, 2019 U.S. App. LEXIS 26959 (6th Cir. Sep. 5, 2019), weighed in on the meaning of Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).  The TCPA generally prohibits calls and text messages to cell phones using an ATDS without prior express consent and imposes a statutory penalty of $500 per call or text in violation, or up to $1,500 per call/text for a knowing or willful violation.  On a class action basis covering all calls/texts sent over four years, the potential liability can be crushing.…
At the end of the Supreme Court’s most recent term, the Court released its long-awaited ruling in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S. Ct. 2051 (June 20, 2019)—a case that could have carried far-reaching ramifications for Telephone Consumer Protection Act (“TCPA”) litigation nationwide. The Supreme Court granted review to consider whether the Administrative Orders Review Act (also known as the Hobbs Act), 28 U.S.C. § 2342(1), requires district courts to accept the FCC’s legal interpretation of the statutory term “unsolicited advertisement” under the TCPA.…
A recent decision by the Eleventh Circuit will make it more difficult for plaintiffs to establish standing to sue under the Telephone Consumer Protection Act (TCPA).  In Salcedo v. Hanna, et al., Case No. 17-14077, 2019 U.S. App. LEXIS 25967 (11th Cir. Aug. 28, 2019), the Eleventh Circuit ruled that a single text message did not cause sufficient harm to sue in federal court.  As a result, “single text message” TCPA cases may be a thing of the past, at least in the federal courts across the three States in the Eleventh Circuit (Florida, Georgia, and Alabama).  However, given…
The U.S. Supreme Court’s ruling in AT&T Mobility v. Concepcion, 563 U.S. 333 (2011) caused a shockwave in California’s class action bar when it held that the Federal Arbitration Act (“FAA”) preempted California’s former Discover Bank rule prohibiting arbitration clauses in consumer contracts from including a pre-dispute waiver of a plaintiff’s right to seek class action relief. After the decision in Concepcion, mandatory arbitration and corresponding class action waivers became the norm in consumer contracts. Many of the arbitration clauses in these consumer agreements, however, also included language prohibiting the plaintiff from obtaining relief for anyone other than the plaintiff. Courts…
In the last few months, a handful of class actions have been filed challenging label claims regarding the treatment of the animals providing the food item in question. This appears to be a new food litigation trend, as plaintiffs’ attorneys invoke the purchasing public’s apparent concern for “clean”, “pure”, “healthy”, and “organic” food items.…
Challenges based on lack of standing can be brought at any time and, in Friends of the Earth v. Sanderson Farms, Inc., 2019 U.S. Dist. LEXIS 127964 (N.D. Cal. July 31, 2019), the court dismissed a putative class action for lack of standing pursuant to Rule 12(h)(3) after Plaintiffs supplemented discovery responses and depositions were taken. Although it had earlier denied motions to dismiss brought pursuant to Rule 12(b)(6), the district court concluded that Plaintiffs failed to produce evidence in discovery to establish their injury in fact and, accordingly, lacked standing under Article III.  …