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

The California Court of Appeal recently held that the Federal Arbitration Act (FAA) preempts any statutory right to a class action under the California Consumers Legal Remedies Act (CLRA). See Caron v. Mercedes-Benz Financial Services USA LLC et al., — Cal.Rptr.3d —-, 2012 WL 2579662 (Cal.App. 4 Dist.). In doing so, the court applied the reasoning of the Supreme Court’s landmark decision in AT&T Mobility, Inc. v. Concepcion, 131 S. Ct. 1740 (2011) holding that the FAA preempts state laws refusing to enforce arbitration agreements according to their terms.
Continue Reading The Federal Arbitration Act Preempts Any Right To A Class Action Under State Law

On March 16, 2012, the Ninth Circuit followed the recent U.S. Supreme Court decision in AT&T Mobility, Inc. v. Concepcion, 131 S. Ct. 1740 (2011), and held that the Federal Arbitration Act (the FAA) preempts state law refusing to enforce arbitration provisions with class action waivers. See Marygrace Coneff v. AT&T Corp., — F.3d —-, 2012 U.S. App. LEXIS 5520 (9th Cir. Wash. Mar. 16, 2012). Coneff follows closely on the heels of the Ninth Circuit’s recent opinion in Kilgore v. KeyBank, Nat’l Ass’n, — F.3d —-, 2012 WL 718344, *10 (9th Cir. March 7, 2012), in which it followed Concepcion in holding the FAA preempts California law excluding claims for “public injunctions” from arbitration.
Continue Reading The Ninth Circuit Again Follows Concepcion And Enforces Consumer Arbitrations

In Avritt v. Reliastar Life Ins., __ F.3d__ (8th Circ. 8-12-2010), the Eighth Circuit Court of Appeal affirmed an order denying class certification of a putative class of California annuity investors who were allegedly misled by the defendant. The opinion re-affirms the federal rules that require the plaintiff to show that it can prove reliance and damages on a class-wide basis before the court certifies a class while simultaneously limiting the persuasive authority of Tobacco II.
Continue Reading Eighth Circuit Denies Class Certification of UCL Cause of Action Despite Tobacco II’s Holding

On April 27, 2010, in a closely watched antitrust case with the potential for broad impacts on class action arbitrations, the United States Supreme Court considered the issue “whether imposing class arbitration on parties whose arbitration clauses are ‘silent’ on that issue is consistent with the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq.” Slip op. at 1. See Stolt-Nielsen S.A. et al. v. AnimalFeeds International Corp., 559 U.S. —, No. 08-1198 (April 27, 2010) (“Stolt-Nielson”).
Continue Reading The United States Supreme Court Rules That Class Arbitration Is Improper When Parties To An Arbitration Agreement Have Not Explicitly Authorized Class Arbitration

On April 19, 2010, California’s Fourth Appellate District decided two companion cases – Durell v. Sharp Healthcare, — Cal.Rptr.3d —-, 2010 WL 1529322, Cal.App. 4 Dist., April 19, 2010 (NO. D054261) and Hale v. Sharp Healthcare, — Cal.Rptr.3d —-, 2010 WL 1529329, Cal.App. 4 Dist., April 19, 2010 (NO. D054637) – that mark a potentially significant development in pleading standards under California’s Unfair Competition Law, California Business & Professions Code sections 17200, et seq. (“UCL”). Broadly speaking, both Durell and Hale stand for the proposition that named class plaintiffs alleging a UCL violation under the “unlawful” prong of the statute must now also plead “actual reliance” when the conduct challenged involves “misrepresentation and deception.” Stated another way, plaintiffs alleging unlawful conduct stemming from misrepresentation and deception under the UCL now must actually have relied on the defendant’s alleged misrepresentation; proximate cause or a mere “factual nexus” is insufficient. Both decisions extend the reasoning of the California Supreme Court’s recent decision in In re Tobacco II Cases (2009) 46 Cal.4th 298 (Tobacco II), which addressed the requirements for pleading standing under the UCL’s “fraud” prong, to UCL class actions brought under the “unlawful” prong, at least where the conduct challenged involves misrepresentation and deception.
Continue Reading California’s Fourth Appellate District Holds That Named Plaintiffs In Putative Class Actions Alleging Misrepresentation And Deception Under The UCL’S “Unlawful” Prong Must Plead Actual Reliance

In Wallace v. GEICO General Insurance Company (April 19, 2010) __ Cal.App.4th __, the Fourth District Court of Appeal confirmed that a defendant cannot “pick off” a potential class representative by tendering payment of their claim in a class action alleging violations of California’s Unfair Competition Law, Business and Professions Code section 17200 et seq. (“UCL”). The no “pick off” rule stems from the California Supreme Court’s holding in La Sala v. American Savings & Loan Ass’n, 5 Cal.3d 864 (1971), that an involuntary settlement of the named plaintiff’s claim does not necessarily divest him or her of standing to continue the action on behalf of the class. Under Wallace, as long as the class representative “suffered injury in fact” and “lost money or property” as of the filing of the lawsuit, he or she may still serve as the representative plaintiff in a UCL class action.
Continue Reading Fourth District Court of Appeal Confirms that the No “Pick Off” Rule Applies to a Potential UCL Class Action

On April 21, 2010, the Ninth Circuit Court of Appeals confirmed that a putative class action removed to federal court under the Class Action Fairness Act (CAFA) does not lose federal jurisdiction just because the court denies class certification. The case, United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, AFL-CIO, et al. v. Shell Oil Company, et al., No. 10-55269, ___ F.3d ____ (9th Cir. Apr. 21, 2010), began as a putative class action in California state court. Plaintiffs alleged that defendants’ oil refineries violated California’s Unfair Competition Law, Business & Professions Code § 17200, and failed to provide meal periods, rest periods, timely and accurate wage statements and wages due at the time of termination. Defendants removed the case to federal court under CAFA, 28 U.S.C. § 1332(d)(2), which provides removal jurisdiction if any member of the putative class is diverse from any defendant, if the amount in controversy exceeds $5,000,000.
Continue Reading Ninth Circuit Makes CAFA Jurisdiction Stick

In DeKoven v. Plaza Associates (No. 09-2016) and Kubert v. Plaza Associates (No. 09-2249), which were consolidated for decision, the United States Court of Appeals for the Seventh Circuit affirmed the dismissal of class actions brought under the Fair Debt Collection Practices Act regarding allegedly confusing dunning letters. In both cases, the District Court found that survey evidence offered by the plaintiffs’ expert was flawed and entered summary judgment in favor of the defendant, Plaza Associates.
Continue Reading Seventh Circuit Affirms Dismissal Of Consolidated Class Actions Under The Fair Debt Collection Practices Act Based On Faulty Survey Evidence

In In re Revlon, Inc. Stockholder Litigation, Consol. C.A. No. 4578-VCL, 2010 WL 985732 (Del. Ch. Mar. 16, 2010), the Delaware Chancery Court dismissed a group of law firms that had been appointed to act as co-lead and liaison plaintiffs’ counsel for a putative class of stockholders in an action challenging a corporate merger, and appointed new co-lead counsel with instructions to investigate the conduct of former counsel and the fairness of a proposed settlement negotiated by former counsel. This scathing decision from Vice Chancellor Laster highlights the critical importance for all attorneys of maintaining credibility and “reputational capital” with the Court when, among other things, seeking approval of a settlement of a class or derivative action.
Continue Reading Delaware Chancery Court Dismisses Plaintiffs’ Counsel In Merger Class Action, Challenging Credibility Of All Counsel In Connection With Proposed Settlement