On Tuesday, the Supreme Court decided to review a case that potentially carries far reaching ramifications for litigation under the Telephone Consumer Protection Act (“TCPA”), which places restrictions on phone and fax solicitations and imposes serious penalties for violations. See 47 U.S.C. § 227, et seq. By granting certiorari in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., No. 17-1705, the Court is set to resolve the question whether the Hobbs Act requires district courts to accept the FCC’s interpretation of the TCPA’s key statutory term “advertisement.” Continue Reading
Class action plaintiffs’ attorneys may argue that a recent ruling by the Ninth Circuit expands the scope of liability under the Telephone Consumer Protection Act (“TCPA”) to include calls or text messages sent on all modern telephone equipment, including personal smartphones. Marks v. Crunch San Diego, LLC, 904 F.3d 1041 (9th Cir. Sept. 20, 2018).
In Durnford v. MusclePharm Corp., plaintiff Durnford asserted that the company’s “Arnold Schwarzenegger Series Iron Mass” supplements are falsely labeled because the protein content of the supplements is misstated. Durnford brought claims under California’s Unfair Competition Law (“UCL”), False Advertising Law (“FAL”) Consumer Legal Remedies Act (“CLRA”) and for breach of express warranty. The district court dismissed these claims, finding them preempted by federal law. However, the Ninth Circuit affirmed in part and reversed in part the district court’s dismissal of Durnford’s claims effectively reviving them, albeit on a narrower basis. Durnford v. MusclePharm Corp., No. 16-15374, __ F.3d __ (9th Cir. 2018), 2018 U.S. App. LEXIS 28771. Continue Reading
Companies may be inclined to offer “coupons” or similar benefits to settle consumer class actions. While offering coupons is permissible, in In re Easysaver Rewards Litigation, No. 16-56307, 2018 U.S. App. LEXIS 28000 (9th Cir. Oct. 3, 2018), the Ninth Circuit has reaffirmed that the full face value of coupons cannot be included when calculating the total value of the settlement, which may reduce the attorneys’ fees awarded to Plaintiffs’ class counsel. Continue Reading
In a recent decision, the California Court of Appeal reaffirmed and clarified how the “reasonable consumer” standard must be applied at the pleadings stage to mislabeling claims. In simplest terms, if the packaging makes a definitive statement on the front that suggests one thing, but fine print on the back contradicts that statement, the defendant cannot rely on the fine print to escape a mislabeling claim. In reaching that conclusion, however, the Court of Appeal appears to have laid a roadmap for how to defeat class certification. Continue Reading
The ruling in Lanovaz v. Twinings N. Am., Inc., 2018 U.S. App. LEXIS 15248 (9th Cir. June 6, 2018), settles what was arguably an open issue among district courts within the Ninth Circuit. A plaintiff must have an intent to re-purchase a product alleged to be falsely advertised in order to maintain an action for injunctive relief.
Twinings’ labels on its green, black, and white tea products stated that the teas were a “Natural Source of Antioxidants”. Plaintiff Lanovaz asserted that the labels amounted to “nutrient content claims,” which are regulated by the FDA (the term “antioxidant” is also subject to regulation). The plaintiff alleged that Twinings’ labels did not satisfy FDA regulations, and therefore were unlawful, misleading consumers. Continue Reading
On May 21, 2018, the United States Supreme Court upheld the legality of arbitration agreements containing class action waivers. In a 5-4 decision written by Justice Gorsuch, the Court held that arbitration agreements providing for individualized proceedings were valid, and neither the Federal Arbitration Act’s (“FAA”) savings clause, nor the National Labor Relations Act (“NLRA”) suggest otherwise. Continue Reading
1. Have the GOP’s Hopes for Enacting the Fairness in Class Action Litigation Act Been Dashed? – Passed in March 2017 by the U.S. House of Representatives, the Fairness in Class Action Litigation Act of 2017, H.R. 985, has stalled in the Senate. Among other things, the House bill would dictate the method by which to calculate attorneys’ fees in a class action and significantly limit recoverable attorneys’ fees to a “reasonable percentage of (1) any payments received by class members; and (2) the value of any equitable relief.” (H.R. 985, § 103) The bill also installs a stringent “ascertainability” rule that would likely result in more denials of class certification. On March 13, 2017, the House bill was sent to the Senate Judiciary Committee, but the Committee has not taken any further actions to advance the bill. In the current political climate, there may be a tailwind for this legislative effort in 2018.
2. The FCC’s Progress and Speed in Resolving the Backlog of TCPA Petitions – Several petitions for declaratory ruling were filed with the FCC in late 2016 and 2017 requesting clarification on issues relating to the meaning of “prior express consent” under the TCPA. After soliciting and receiving comments from the public, those petitions are ripe for decision by the FCC. See In the Matter of Credit Union Nat’l Ass’n Petition for Declaratory Ruling, Dkt. No. 02-278 (filed Sept. 29, 2017) (requesting FCC to exempt from the TCPA all informational calls made by credit unions to cell phones where the wireless subscriber has an established business relationship with the credit union, or the called party is not charged for the call); In the Matter of Petition for Expedited Declaratory Ruling of Bebe Stores, Inc., Dkt. No. 02-278 (filed Nov. 18, 2016) (requesting retroactive waiver of TCPA’s “prior express written consent” requirement for robocalls for calls made by Bebe from October 16, 2013, to October 7, 2015). At least two petitions for declaratory ruling were filed by defendants in pending TCPA fax class actions last year, and those petitions also await decision from the FCC. Continue Reading
In In re Hyundai & Kia Fuel Economy Litigation, No. 15-56014, 2018 WL 505343 (9th Cir. Jan. 23, 2018), the Ninth Circuit vacated a nationwide class action settlement, concluding that the district court’s failure to conduct a choice-of-law analysis precluded a finding that common issues predominated. Continue Reading
Deciding an issue of first impression, the California Court of Appeal issued a writ of mandate confirming that there is only one standard for the admissibility of expert opinion in California, and that standard applies when considering a motion for class certification. Apple, Inc. v. Superior Court of San Diego County, 2018 Cal. App. LEXIS 69 (Cal. Ct. App. Jan. 29, 2018). Accordingly, the Court of Appeal issued a peremptory writ of mandate directing the trial court to vacate its order granting Plaintiffs’ motion for class certification for reconsideration in light of the standards for the admission of expert testimony set forth in Sargon Enters., Inc. v. Univ. of S. Cal., 55 Cal.4th 747 (2012). Continue Reading