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 Are credits coupons? The Ninth Circuit Says Yes in Calculating Total Value of Class Action Settlements
Ninth Circuit Slams the Brakes on Nationwide Class Action Settlement; Choice of Law and Reliance Are Bumps in the Road
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.
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Dancing On Their Own: The California Supreme Court’s Decision in McGill v. Citibank, N.A. that Class Action Waivers Do Not Apply to Claims for Public Injunctive Relief under California’s Consumer Protection Laws
On April 6, 2017, the California Supreme Court struck another blow in its contentious battle with the United States Supreme Court on the enforceability of consumer arbitration clauses subject to the Federal Arbitration Act (FAA). In McGill v. Citibank, N.A., No. S224086, Slip Op. at 1 (Cal. Apr. 6, 2017), the Court held that an arbitration clause in Citibank’s credit card agreement purporting to waive the plaintiff’s right to seek public injunctive relief under the Consumers Legal Remedies Act (CLRA), the Unfair Competition Law (UCL), or the False Advertising Law (FAL) in any forum was unenforceable as against California public policy. The Court further held that, notwithstanding the U.S. Supreme Court’s decisions on the subject, including in AT&T Mobility v. Concepcion, 131 S. Ct. 1740, 1747 (2011), the FAA did not preempt California’s policy. As discussed below, these holdings are troubling and likely inconsistent with federal law.
Continue Reading Dancing On Their Own: The California Supreme Court’s Decision in McGill v. Citibank, N.A. that Class Action Waivers Do Not Apply to Claims for Public Injunctive Relief under California’s Consumer Protection Laws
No Proof Necessary: SCOTUS Rules Defendant’s Notice Of Removal Under CAFA Need Not Include Evidence of The Amount In Controversy
On December 15, 2014, the United States Supreme Court resolved a circuit split in holding that a defendant need not supply evidence of the amount in controversy in its notice of removal under the Class Action Fairness Act (“CAFA”). In Dart Cherokee Basin Operating Co. v. Owens, No. 13-719, 574 U.S. __ (2014), the plaintiff, Owens, filed a putative class action in Kansas state court alleging defendants had underpaid royalties to putative class members under certain oil and gas leases. The defendant, Dart, filed a notice of removal with the U.S. District Court for the District of Kansas pursuant to CAFA. To establish diversity jurisdiction under CAFA, defendants must show, among other things, that the amount in controversy exceeds $5 million.
Continue Reading No Proof Necessary: SCOTUS Rules Defendant’s Notice Of Removal Under CAFA Need Not Include Evidence of The Amount In Controversy
Top Five Tips For Minimizing The Risk of Class Action Litigation
Beyond the usual substantive advice—maintaining effective compliance and document management systems, for example—our class action defense team suggests that companies implement the following relatively straightforward procedural tips to avoid class actions.
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The Ninth Circuit Holds That The TCPA Prohibits Automated Calls Even When They Do Not Refer To Any Specific Good Or Service
In Chesbro v. Best Buy Stores, LP, No. 11-35784, 2012 WL 4902839 (9th Cir. Oct. 17, 2012), the Ninth Circuit reversed the Western District of Washington’s grant of summary judgment in favor of Best Buy Stores, LP (“Best Buy”) on claims that Best Buy placed automated telephone calls to plaintiff Michael Chesbro’s home in violation of the Telephone Consumer Protection Act of 1991 (“TCPA”), 47 U.S.C. § 227 and Washington statutes. The TCPA prohibits “any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.” However, the FCC has exempted automated calls that do not adversely affect the consumer’s privacy rights and do not include any “unsolicited advertisement,” pursuant to 47 U.S.C. § 227(b)(2)(B)(ii) and 47 C.F.R. § 64.1200(a)(2)(iii). An “unsolicited advertisement” is defined as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission.” 47 U.S.C. § 227(a)(5). Here, the Ninth Circuit rejected Best Buy’s argument that its automated calls to Chesbro were not “unsolicited advertisement[s],” holding that such calls need not explicitly mention a good, product, or service, but can nonetheless violate the TCPA if they encourage the listener to make future purchases.
Continue Reading The Ninth Circuit Holds That The TCPA Prohibits Automated Calls Even When They Do Not Refer To Any Specific Good Or Service
Ninth Circuit rejects class action settlement, clarifies standards for cy pres remedies and plaintiff counsel’s attorneys’ fees
In the recently published decision Dennis v. Kellogg Company, No. 11-55674, 2012 WL 2870128 (9th Cir. July 13, 2012), the Ninth Circuit reversed the district court’s approval of a purported $10.64 million settlement between defendant Kellogg and a class of consumers alleging false advertising. The Ninth Circuit rejected the settlement for three reasons: (1) the District Court did not apply the correct legal standard in evaluating the proposed cy pres charities that were to be the recipients of the settlement funds, and thereby abused its discretion; (2) the settlement failed to name the charities that would receive cy pres donations; and (3) the District Court’s award of $2 million in attorneys’ fees, the maximum amount Kellogg had agreed not to oppose, was excessive.
Continue Reading Ninth Circuit rejects class action settlement, clarifies standards for cy pres remedies and plaintiff counsel’s attorneys’ fees
California Court of Appeal Continues the Trend of Limiting Tobacco II
The California Court of Appeal for the Fourth Appellate District recently added to the growing jurisprudence interpreting the scope and effect of In re Tobacco II Cases (2009) 46 Cal.4th 298 in its decision last month in Sevidal v. Target Corp. (Case No. D056206, Oct. 29, 2010) __ Cal.App.4th __. Following a trend of other California appellate courts, including the Second Appellate District in Pfizer v. Superior Court (2010) 182 Cal.App.4th 622, Target stands for the proposition that Tobacco II applies only to standing, and does not change the requirements for class certification under California’s Unfair Competition Law (“UCL”). The Target court upheld the lower court’s decision denying class certification, holding that Tobacco II‘s limitation of traditional reliance and causation standing requirements to the named plaintiff in certain cases brought under the UCL does not eliminate the need for absent class members to establish that they were affected by the allegedly unfair practice in order to meet class certification requirements.
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The Recent Assault on Consumer Arbitration Clauses
After years of growth, the Federal Arbitration Act (“FAA”), and numerous court decisions emphasizing the strong public policy in favor of arbitration as a cost-effective means of resolving disputes, arbitration now appears to be under siege—particularly in the consumer context. Many consumer contracts, including those involving cellular phones, credit cards, and other consumer finance products, such as automobile retail installment contracts, contain mandatory arbitration provisions requiring consumers to resolve any disputes through arbitration rather than through the courts. In many cases, these contracts have attempted to establish arbitration an alternative to the high cost, slow pace, and uncertainty of class action litigation. Now consumer arbitration itself has become the focus of public entity investigations and class action lawsuits. Ultimately, consumer arbitration will likely survive, perhaps with new guidelines and consistent rules governing the process so companies know when their arbitration agreements will be enforced.
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