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 doubt that it is the Federal Government rather than private litigants who [is] authorized to file suit for noncompliance with” the FDCA’s substantive provisions). This article addresses recent federal cases supporting FDCA preemption of state law claims that require the fact finder to improperly assume the FDA’s enforcement power, particularly in the class action context. 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 in the terms of use on Ticketmaster’s and Live Nation’s websites.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 class action plaintiffs’ attorneys seeking to hold companies liable for calls/texts over a four year statute of limitations period.

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 and dairy milks, yogurts, ice creams, creamers, cereals, chips, cakes, cookies and brownies have faced such claims.  Vanilla, lime, butter, milk, strawberry, smoked, chocolate and fudge flavors have all been dragged into court.  All of this litigation begs the question – will the gluttonous plaintiff’s class action counsel ever be satiated?  It seems that, by and large, the federal courts are not swallowing the case theme.  Two back-to-back decisions from the Southern District of New York, Boswell v. Bimbo Bakeries USA, Inc. and Kamara v. Pepperidge Farm, Inc., chucked flavor claims on the basis that a reasonable consumer could not be misled by the product labels.  In Boswell, the court dismissed plaintiff’s claims that she was misled by the packaging on Entenmann’s “All Butter Loaf Cake.”  The district court noted that this was “the latest in a long string of putative class actions brought by the same lawyer” and identified six prior cases that had been dismissed.
Continue Reading Are Flavor Cases Fizzling? Two More Courts Grant Motions to Dismiss