Second Circuit Affirms Class Certification Holding that Direct Evidence of Price Impact is Not Always Necessary to Demonstrate Market Efficiency

In Waggoner v. Barclays PLC, No. 16-1912 (2d Cir. Nov. 6, 2017), the United States Court of Appeals for the Second Circuit, in a Rule 10b-5 securities fraud action, affirmed the district court’s order granting class certification and, in the process, made a number of significant rulings including concluding that direct evidence of price impact is not always necessary to demonstrate market efficiency and confirming that defendants seeking to rebut the fraud-on-the-market presumption must do so by a preponderance of evidence. The decision will potentially make it easier for securities fraud plaintiffs seeking class certification to demonstrate market efficiency, including, for example, when the securities at issue are not traded on national exchanges. Continue Reading

Behavioral Advertising Company That Dropped “Zombie” Cookies Can’t Use Verizon’s Arbitration Clause To Avoid Class Action Lawsuit

The 9th Circuit Court of Appeals ruled that a non-party online behavioral advertising firm could not benefit from the arbitration clause in the agreement between Verizon and its customers because it was not a party to that agreement. Continue Reading

Seventh Circuit Holds Footlong Settlement Falls Short

The Seventh Circuit’s rejection of a class action settlement in a case alleging consumer fraud against Subway for allegedly “shorting” customers of its Footlong sandwiches illustrates the pitfalls of settlements that provide only injunctive relief and the perils to plaintiffs who pursue claims for “worthless benefits.” In Re Subway Footlong Sandwich Mktg. & Sales Practices Litig., 2017 U.S. App. LEXIS 16260, at *14 (7th Cir. Aug. 25, 2017). The Seventh Circuit recognized: “[a] class action that ‘seeks only worthless benefits for the class’ and ‘yields [only] fees for class counsel’ is ‘no better than a racket’ and ‘should be dismissed out of hand.’ That’s an apt description of this case.” Id. (citation omitted). The court further warned that, “[n]o class action settlement that yields zero benefits for the class should be approved[.]” Id. at *11.       Continue Reading

Outlet And Factory Class Actions Take A Hit: California Court of Appeal Confirms Companies Can Sell Made-For-Outlet Product At Outlet Or Factory Stores

Over the past two years, class actions have been filed against nearly every major retailer challenging various sales and pricing practices. Many of these have focused on outlet stores (sometimes called “factory” stores). These cases have generally claimed that selling product made only for the outlet or factory store, where that product was never sold in mainline channels (e.g., in regular stores, boutiques, department stores or online), is deceptive, particularly product if the store suggests that the made-for-outlet was previously sold in mainline channels for a higher price. In many states, the trend has been to dismiss the case on the pleadings, holding that plaintiffs, who purchased a product for the price advertised, were not injured, especially if they cannot allege that the product was worth less than what they paid. In California, with the expansive reach of the Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer Legal Remedies Act (CLRA), courts have generally permitted these claims to proceed beyond the pleadings. Continue Reading

Ninth Circuit Confirms that a Cy Pres Only Settlement Can Work In Privacy Class Action

In the past few years, class action lawsuits challenging privacy practices, particularly internet privacy practices, have expanded. But, these lawsuits often challenge practices that do not cause any actual damage, which can make it difficult to reach a settlement, particularly of a Rule 23(b)(3) class. So, how can parties wanting to settle proceed? Continue Reading

Spokeo—Round 3: The Ninth Circuit Finds Alleged Statutory Violation Sufficiently “Concrete” To Satisfy Article III Standing

The Ninth Circuit recently issued its long-awaited opinion in Robins v. Spokeo, Inc., — F.3d —-, 2017 WL 3480695 (9th Cir. Aug. 15, 2017), on remand from the United States Supreme Court. Once again, the Ninth Circuit reversed the district court’s dismissal of plaintiff’s lawsuit alleging willful violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”), holding plaintiff’s alleged injuries were sufficiently “concrete” to satisfy Article III standing requirements. This most recent Spokeo decision (a/k/a Spokeo III) is the latest in a series of appellate decisions during the last year that have determined whether, and under what, circumstances a defendant’s alleged violation of a federal statute, without more, may satisfy Article III’s “injury-in-fact” requirement. Continue Reading

The Consumer Financial Protection Bureau Adopts New Rule Barring Class Action Waivers in Arbitration Agreements

As expected, and with few changes, the Consumer Financial Protection Bureau adopted its proposed rule barring financial companies regulated by the agency from including class action waivers in arbitration agreements. Arbitration clauses in new contracts offering a consumer financial product or service will need to include specified language indicating that arbitration cannot be used to stop the consumer from pursuing a class action. Continue Reading

You Can’t Always Get What You Want—Second Circuit Affirms Parties Can Bargain Away TCPA Right To Revoke Consent To Automated Calls

As the Rolling Stones famously sing, “You can’t always get what you want.” And in the ever treacherous world of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et seq., the Second Circuit has ruled that means a party to contract cannot unilaterally revoke consent to receive automated calls. Continue Reading

Class Action Plaintiffs In The Ninth Circuit Can No Longer Obtain Immediate Appellate Review Of Orders Denying Class Certification

The U.S. Supreme Court has closed a loophole that class action plaintiffs in the Ninth Circuit had been exploiting to obtain immediate appellate review of a district court’s denial of class certification. The decision – Microsoft Corp. v. Baker, 582 U.S. __ (2017) – will end a practice in the Ninth Circuit that was seen as unfair to defendants, who could not exploit the same loophole to obtain immediate review of a district court’s grant of class certification. Continue Reading

If At First You Don’t Succeed: The Ninth Circuit Invites Successive Class Actions By Extending American Pipe Tolling To Absent Class Members’ Own Class Claims

In Resh v. China Agritech, No. 15-5543, 2017 U.S. App. LEXIS 9029 (9th Cir. May 24, 2017), a Ninth Circuit panel held that a pending putative class action in which class certification is ultimately denied tolls the statute of limitations as to claims that previously absent class members later seek to assert as class claims. The ruling expands a tolling doctrine the U.S. Supreme Court has so far only applied to absent class members’ individual claims. See American Pipe & Construction Co v. Utah, 414 U.S. 538 (1974). It also clarifies Ninth Circuit precedent, which, to the extent it had previously applied American Pipe tolling to absent class members’ class claims, arguably did so only when the earlier class certification denial rested on the named plaintiff’s inadequacy, not on the invalidity of the alleged class itself. Resh applies American Pipe to class claims without qualification. Hence, it opens the door in the Ninth Circuit to new phenomenon: successive class actions based on the same underlying event. Continue Reading

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