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

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

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 Questions To Ask When Changing Your Arbitration Clause

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 An Arbitration Clause Health Check

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

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 The Second Circuit Invites All The Party Plaintiffs To The Disco With Broad Definition Of ATDS Under 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 FCC Declares Certain Calls/Texts Regarding COVID-19 Are Exempt From The TCPA

The Seventh Circuit has recently joined the Second, Third, Sixth and Eleventh Circuits in adopting a narrow interpretation of Automatic Telephone Dialing System (ATDS) under the Telephone Consumer Protection Act (“TCPA”), one that excludes equipment that dials numbers from a customer database.  See Gadelhak v. AT&T Services, Inc., No. 19-1738, — F.3d —-, 2020 WL 808270 (7th Cir. Feb. 19, 2020); see also Glasser v. Hilton Grand Vacations Co., 948 F.3d 1301 (11th Cir. Jan. 27, 2020); Gary v. Trueblue, Inc., 786 F. App’x 555 (6th Cir. Sept. 5, 2019); King v. Time Warner Cable, 894 F.3d 473 (2d Cir. 2018); Dominguez v. Yahoo, Inc., 894 F.3d 116 (3d Cir. 2018).
Continue Reading Seventh Circuit Adopts Narrow Definition of Autodialer Under The TCPA

The California Court of Appeal recently made it more difficult for plaintiffs to certify class actions based on false advertising or fraud.  In Downey v. Public Storage, Inc., Case No. B291662, ___Cal.App.5th___ (Feb. 6, 2020), the Court of Appeal affirmed an order denying class certification on the grounds that issues of deception and reliance were not susceptible to common proof.

In March 2015, several plaintiffs filed a class action against Public Storage, alleging that its $1 promotional rate was deceptive, violated California’s Unfair Competition Law (Bus. & Prof. § 17200 et seq.), and constituted a false advertisement.  In particular, the plaintiffs alleged that the $1 promotional rate was deceptive because customers had to pay more than $1 for their first month of storage due to (1) having to pay for a new account fee, (2) being charged for a second month’s rent on the first day of the next calendar month, (3) having to pay for a lock for their storage unit, and (4) having to pay for insurance coverage. 
Continue Reading California Court Sets High Bar For Class Certification In False Advertising Cases

As one year ends, another begins.  So too it seems with California’s embrace of multi-million dollar privacy class actions.  The purported illegal recording of cellular or cordless phone calls under Section 632.7 of the California Penal Code has long been a favorite of the class action bar due to the availability of staggering statutory damages.  These actions are all but dead, however, following the Fourth Appellate District’s decision in Smith v. LoanMe, Inc., 2019 DJDAR 11930, holding that some form of eavesdropping is required to state a cause of action under Section 632.7.  No longer is the simple recording of a cellular or cordless telephone call between the actual participants to the call actionable.  While many have long argued that the actual language of the statute as well as its legislative history – including the legislative history of the California Invasion of Privacy Act (Pen. Code §§ 630, et seq.) in general – require some form of spying to state a claim under Section 632.7, the court of appeal in LoanMe has made it official.  Barring review or inconsistent rulings by other appellate districts, privacy class actions seeking statutory damages under Penal Code section 632.7 are the past.  
Continue Reading The Death of One California Privacy Class Action, and the Birth of Another