No Reason to Blush

*This post originally appeared as an article in the August 2020 edition of Happi Magazine.

Beauty companies face an uptick in alleged false-labeling class actions. Whether the actions are justified or vexatious, one thing is certain: they are expensive to defend. By keeping the following labeling-related litigation trends in mind when considering and reviewing product labels and marketing, beauty companies can, hopefully, avoid becoming a litigation target. Continue Reading

The Sixth Circuit Broadly Defines ATDS, Widening The Split Among Circuits Before The Supreme Court Rules Next Year

On July 29, 2020, the Sixth Circuit joined the Second and the Ninth Circuits in expansively defining Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).  In Allan v. Pa. Higher Educ. Assistance Agency, No. 19-2043 (6th Cir. July 29, 2020), the Sixth Circuit held that “devices that dial from a stored list of numbers”—i.e. “predictive dialers”—qualify as an ATDS under the TCPA.  The Third, Seventh, and Eleventh Circuits have applied a more stringent definition, requiring that an ATDS have the capacity to generate random or sequential telephone numbers and to dial them.  Now the Circuit Courts are split on this issue 3-3.  The U.S. Supreme Court recently accepted review of the definition of ATDS and will presumably resolve this split in its next terms, likely by the spring of 2021. Continue Reading

Avoiding Formation Challenges To Your Arbitration Clause With Consumers

In prior posts (here and here), we raised questions that companies may want to ask when evaluating their arbitration clauses and making changes to them.  In this third installment, we look at what companies should be doing to ensure that they can present proof of their arbitration agreements if ever required to do so in court.  Your company may have a perfect arbitration clause, but if a customer claims never to have signed the arbitration agreement or not to have seen the website providing notice of the terms and conditions, you will have to present evidence that the customer is wrong. Continue Reading

U.S. Supreme Court to Address Circuit Split on Definition of ATDS Under The TCPA

On July 9, 2020, the U.S. Supreme Court granted certiorari in Facebook, Inc. v. Duguid, to resolve a split in authority on the meaning of Automatic Telephone Dialing System (“ATDS”) under the Telephone Consumer Protection Act (“TCPA”).  In TCPA class actions, millions of dollars of potential liability often turn on this one issue, and different courts have rendered different results.  A Supreme Court decision should establish a uniform definition that will almost certainly alter TCPA litigation nationwide. Continue Reading

Death by a Thousand Cuts? Supreme Court Finds Government Debt Exception to TCPA Unconstitutional, Opening Door to Similar Attacks on FCC Regulations

On July 6, 2020, the United States Supreme Court affirmed a ruling by the Court of Appeals for the Fourth Circuit, which found that an exception allowing government debt-related robocalls to cell phones is unconstitutional and must be severed from the rest of the Telephone Consumer Protection Act of 1991 (“TCPA”).  Barr v. Am. Assn. of Political Consultants, Inc., No. 19-631, — S.Ct. —- (2020).  Though the Court severed the offending exemption from the rest of the TCPA rather than invalidating the entire TCPA, the Court’s opinion provides a roadmap to making similar constitutional attacks on other portions of the TCPA, including regulations implemented by the Federal Communications Commission (“FCC”). Continue Reading

Questions To Ask When Changing Your Arbitration Clause

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. Continue Reading

An Arbitration Clause Health Check

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: Continue Reading

“Happy Cows” False Labeling Theory is Just “Half Baked”: Court Dismisses False Advertising Claims Against Ben & Jerry’s

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 fend off similar claims in the future. Continue Reading

The Second Circuit Invites All The Party Plaintiffs To The Disco With Broad Definition Of ATDS Under The TCPA

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 Supreme Court.  For now, the decision will likely encourage TCPA class action plaintiffs to fill their dance cards in New York and other states in the circuit. Continue Reading

FCC Declares Certain Calls/Texts Regarding COVID-19 Are Exempt From The TCPA

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). Continue Reading

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