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In recent months, we have seen growing interest in potential privacy issues in the context of mobile applications. Earlier this month, California Attorney General Kamala D. Harris released an official report—“Privacy On the Go: Recommendations for the Mobile Ecosystem”—with new privacy recommendations for the mobile industry. The report, while providing a “template” for best practices, suggests that app manufacturers take steps beyond what is required under current law. Please take a look at our assessment of the report—and the potential that it will be used by plaintiffs’ lawyers seeking a new source for privacy class actions.
Continue Reading Privacy and Mobile Apps: The California AG Speaks Out

Some academics and commentators have been reading the tea leaves in Wal-Mart Stores, Inc. v. Dukes (pdf) and AT&T Mobility LLC v. Concepcion (pdf) as spelling doom for consumer and employment class actions. That’s overwrought; Dukes rejected an extremely adventuresome application of the class action rules by the Ninth Circuit, and Concepcion merely reminded courts that they can’t get around the Federal Arbitration Act by insisting that arbitration agreements permit expensive aspects of judicial litigation that are completely alien to arbitration in its traditional form. The continuing flood of class action filings is proof that the spigot hasn’t been shut off. But companies should pay attention to where the plaintiffs’ bar thinks they should move next if filing class actions stops being a viable business model.

In a recent article—After Class: Aggregate Litigation in the Wake of AT&T Mobility v. Concepcion (pdf), 79 U. Chi. L. Rev. 623 (2012)—law professor Myriam Gilles and plaintiffs’ lawyer Gary Friedman shine the spotlight on state attorneys general:

In our view, the “private attorney general” role assumed by class action lawyers over the past several decades should give way to a world in which state attorneys general make broad use of their parens patriae authority—far greater use than they have in the past—to represent the interests of their citizens in the very consumer, antitrust, wage-and-hour, and other cases that have long provided the staple of class action practice.

And to tackle complex cases, we would hope to see underfunded AG offices making use of the lawyers who have acquired expertise in originating, investigating, and prosecuting class actions, as well as financing them.

The linchpin of this strategy is, of course, the money. If a state AG can’t give the deputized class action lawyers a big chunk of the money recovered for citizens, the model falls apart. Of course, money was one of the main problems with the biggest experiment with deputizing private lawyers as state AGs—the states’ lawsuits against the tobacco industry. Then-Texas AG Dan Morales was sentenced to four years in prison for attempting to steer millions of dollars from the proceeds of the tobacco settlement to a Houston lawyer.

So what should businesses do if they face one of these parens patriae lawsuits from a faux “acting AG”? Here are a few thoughts:
Continue Reading What’s Next for the Class Action Plaintiffs’ Bar? Getting Deputized by State Attorneys General

Most defendants are familiar with Rule 23 or its state-law equivalents, and there’s no question that a tried-and-true method of opposing class certification is to attempt to show that the plaintiffs have failed to meet their burden of satisfying Rule 23’s requirements.  But defendants should not be afraid to invoke the U.S. Constitution itself to attack class actions.  To that end, I am co-authoring (with colleagues Kevin Ranlett and Phil Dupré) a six-part series of articles for Inside Counsel addressing potential constitutional challenges to class actions.  Here’s the first installment, which provides an overview of those arguments.  I…
Continue Reading Opposing Class Actions On Constitutional Grounds

Last week, the FCC requested comments on four petitions for declaratory rulings relating to the Telephone Consumer Protection Act (“TCPA”), the law that launched a thousand class-action lawsuits (or at least seems that way). One petition (pdf), by Revolution Messaging, LLC, asks the FCC to classify text messages sent via the Internet as subject to the TCPA.

The TCPA provides for statutory damages to (among others) cell phone users who receive unsolicited non-emergency calls from “automatic telephone dialing systems.” The FCC has always maintained that text messages qualify as “calls” under the statute. But recent advances in technology have blurred…
Continue Reading FCC Requests Comments on Whether TCPA Applies to Internet-to-Text-Message Services

October has been a good month to be a plaintiff in a class action under the Telephone Consumer Protection Act (“TCPA”) in the Ninth Circuit. Twice this month, that court has issued pro-plaintiff rulings, upholding a preliminary injunction against one defendant and reversing a district court’s grant of summary judgment to another defendant. See Meyer v. Portfolio Recovery Assocs., LLC, No. 11-56600 (9th Cir. Oct. 12, 2012); Chesbro v. Best Buy Stores, LP, No. 11-35784 (9th Cir. Oct. 17, 2012).

The TCPA restricts calls using an “automatic telephone dialing systems” or artificial or prerecorded voice messages. Absent “prior express consent” or an emergency, no one may make such calls to a mobile phone number. The TCPA also restricts prerecorded (or artificial voice) telephone solicitations to a residential number. TCPA class actions are becoming increasingly common, in large part because the statute provides for damages of $500 per violation. In Meyer and Chesbro, the Ninth Circuit offered a survey of many of the recurring issues in TCPA class actions.Continue Reading Ninth Circuit Hands Two Losses to TCPA Class Action Defendants

According to an interesting student note that will soon be published in the Stanford Law Review, the answer to both questions is “yes.” Specifically, the would-be class counsel must “protect[] the substantive legal rights of putative class members . . . from prejudice” “resulting from the actions of class counsel.”

The implications for defendants opposing class certification are significant: If the plaintiff’s lawyers have prejudiced the rights of absent class members, then they have demonstrated that they will not “fairly and adequate protect the interests of the class,” as required by Federal Rule of Civil Procedure 23(a)(4). And…
Continue Reading Do Class Counsel Owe Fiduciary Duties to Absent Class Members Before Class Certification (and Should Defendants Care)?

For a variety of reasons, there are situations when plaintiffs’ lawyers are unable to pursue private class actions on their own. As a result, some plaintiffs’ lawyers have come up with a substitute business model: Convince state attorneys general to hire them on a contingent-fee basis to bring claims on behalf of a state—either in the name of the state itself or standing in the shoes of its citizens, through so-called parens patriae actions.

No business likes to be sued by a state attorney general. But what might make such a suit arguably more palatable than a private class action…
Continue Reading Should State Attorneys General Be Able To Deputize Plaintiffs’ Lawyers On A Contingent-Fee Basis?

In recent years, courts generally have cast a more skeptical eye on fee requests made by plaintiffs’ counsel who have negotiated a class action settlement. In the past, courts often rubberstamped outlandish fee requests. In fact, settlements awarding class counsel “excessive attorneys’ fees with little or no recovery for the class members themselves” were the very first “abuse” identified in the findings accompanying the Class Action Fairness Act (pdf).

But even today, courts do not always slash the fees requested by counsel for the settlement class. In one recent wage-and-hour class action, Lemus v. H&R Block Enterprises LLC (pdf) (N.D.
Continue Reading What Are Courts Doing With Fee Requests Made in Connection with Class Settlements?

Tomorrow, the Supreme Court will hear argument in United States v. Bormes, a case that apparently has not captured the attention of most class action practitioners. That’s understandable: The question presented (pdf) is “whether the Little Tucker Act, 28 U.S.C. § 1346(a)(2), waives the sovereign immunity of the United States with respect to damages actions for violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.” But the impetus for the federal government’s request for immunity—the enormous liability generated by aggregating statutory damages in a FCRA class action—is one that routinely affects businesses targeted by similar class actions. Businesses therefore should stay tuned to see what, if anything, the Court might say about the concerns that result from piling up large amounts of potential statutory damages in class actions.
Continue Reading Federal Government Acknowledges Undue Risk of Potentially Massive Liability from Class Actions for Statutory Damages Under the Federal Credit Reporting Act, but Proposes a Solution Good for One Defendant Only

The plaintiffs’ bar often uses adventuresome choice-of-law arguments to attempt to grease the skids towards certification of nationwide classes.  Earlier this year, in a blockbuster decision, the Ninth Circuit rejected one of plaintiffs’ key arguments in Mazza v. American Honda Motor Co. (pdf), 666 F.3d 581 (9th Cir. 2012).  In that case, the plaintiffs had argued that California consumer-protection law should apply to the claims of all putative class members nationwide because the alleged wrongdoing supposedly emanated from that state.  The Ninth Circuit held that the plaintiffs’ approach would contravene fundamental principles of federalism by ignoring the materially different consumer protection laws of the other states where the challenged transactions actually occurred.  (Mayer Brown represented defendant Honda; here is our report on the decision.)

Since then, plaintiffs in consumer false advertising cases have scrambled to find ways to answer Mazza. One tactic—used frequently against food companies—is to bring nationwide class claims under the federal Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. §§ 2301 et seq. Plaintiffs assumed that the existence of a federal claim—allowing the entire nationwide class’s claims to be evaluated under federal law—would do the trick. Plaintiffs thus often allege that statements on a product label, such as “All-Natural Ingredients,” constitute a written warranty by the manufacturer under the MMWA and that a breach of that warranty occurred when consumers did not realize the advertised benefits.Continue Reading Class Action Bar Targets Food Companies for False Advertising Lawsuits, Using Magnuson-Moss Warranty Act to Try to Evade Ninth Circuit’s Mazza Decision