From a practitioner’s standpoint, one of my five least-favorite recent developments in federal class-action practice is the explosion in the number of premature motions for class certification that would-be class representatives file.

I understand the motivation behind these motions—often filed along with the initial complaint. Of course, they are not seriously intended to induce a ruling on class certification; to the contrary, they expressly request that the issue be tabled until the completion of discovery. The real reason that plaintiffs’ counsel file these motions is that they want to preclude the defendant from mooting the putative class action by making
Continue Reading Judges Irked At Placeholder Class-Certification Motions Too

The spate of class actions under the Telephone Consumer Protection Act (TCPA) isn’t ending anytime soon. And the risks to businesses have just increased in the Third Circuit, thanks to that court’s recent ruling that the TCPA permits consumers to retract consent to receiving calls on their cell phones placed by automatic telephone dialing systems.

The TCPA prohibits making any call to a cell phone “using any automatic telephone dialing system or an artificial or prerecorded voice” unless (among various exceptions) the call is made with the “prior express consent of the called party.” 47 U.S.C. § 227(b)(1)(A)(iii). Courts have upheld various ways of demonstrating “express consent,” including:

  • verbally, such as when the consumer orally provides a cell phone number as a contact number (Greene v. DirecTV, Inc., 2010 WL 4628734 (N.D. Ill. Nov. 8, 2010)); 
  • in writing, such as when a contract authorizes cell phone calls (Moore v. Firstsource Advantage, LLC, 2011 WL 4345703 (W.D.N.Y. Sept. 15, 2011)); and 
  • through a third party, such as when a spouse authorizes cell phone calls (Gutierrez v. Barclays Bank Group, 2011 WL 579238 (S.D. Cal. Feb. 9, 2011)).

But once consumers have consented to receiving these calls, can they rescind their consent? The TCPA’s text is silent on the subject. And although the FCC’s 1992 TCPA Order indicates that consumers who provide their cell phone number can give “instructions” that they don’t agree to receive autodialer calls, the order doesn’t address whether the consumer can give those instructions long after initially providing the cell phone contact number.

By contrast, other privacy statutes—such as the CAN-SPAM Act, the Junk Fax Protection Act, and the Fair Debt Collection Practices Act—have express provisions allowing consumers to opt out of receiving communications at any time. A number of district courts have concluded that the lack of a corresponding express provision in the TCPA means that consumers don’t have the statutory right to retract consent once it has been given. See, e.g., Osorio v. State Farm Bank, F.S.B., 2012 WL 1671780 (S.D. Fla. May 10, 2012); Cunningham v. Credit Mgmt., L.P. (pdf), 2010 WL 3791104 (N.D. Tex. Aug. 30, 2010); Starkey v. Firstsource Advantage, L.L.C. (pdf), 2010 WL 2541756 (W.D.N.Y. Mar. 11, 2010).

But in Gager v. Dell Financial Services, Inc. (pdf), the Third Circuit sided with courts that have taken the opposite view. See Adamcik v. Credit Control Servs., Inc., 832 F. Supp. 2d 744 (W.D. Tex. 2011); Gutierrez, supra.

The Third Circuit gave three reasons for its holding. In my view, each one is questionable.Continue Reading Third Circuit Rules that TCPA Authorizes Consumers To Retract Consent to Cell Phone Calls

The plaintiffs’ bar continues to march forward in bringing privacy-related class actions. As we’ve written before, companies have often been able to defeat such lawsuits at the pleading stage when plaintiffs cannot allege that they suffered a harm that was concrete or cognizable. But that trend has not been universal: In a recent case involving Apple, the federal court for the Northern District of California refused to dismiss the majority of claims, in large measure because the plaintiff alleged that she relied on the company’s online representations concerning the privacy and security of personal information.

In Pirozzi v. Apple,
Continue Reading App Store Privacy Class Action Survives Apple’s Motion to Dismiss In Light Of Online Representations

Before the Supreme Court’s decision last Term in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), the Ninth Circuit had held that a named plaintiff can continue to pursue a putative class action even after the defendant has extended that plaintiff an offer of judgment for the full individual relief sought in the complaint, including reasonable attorneys’ fees and costs. See Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011). In a case that bears watching, a federal district judge in California recently certified for interlocutory review the question whether Pitts’s mootness holding remains good law. See Chen v. Allstate Ins. Co., No. 4:13-cv-00685-PJH (N.D. Cal. July 31, 2013).
Continue Reading Will the Ninth Circuit Revisit the Issue of Whether an Offer of Judgment to the Named Plaintiff Can Moot a Class Action?

When a company’s computer systems are raided by hackers, all too often it must brace itself for being victimized a second time by the class action bar. Plaintiffs frequently target such companies for class actions on behalf of the consumers whose data might have been exposed as a result of the potential data breach.
The fact that the consumers rarely have experienced any real harm can be the Achilles’ heel of these data-breach class actions. “World of Warcraft” creator Blizzard Entertainment Inc. was able to capitalize on this vulnerability when a court dismissed most of a putative class action against
Continue Reading Failure to Allege Harm Narrows Data-Breach Suit

Under the American Pipe rule, in federal court the filing of a class action tolls the statute of limitations for would-be class members. Otherwise, the Supreme Court reasoned in American Pipe, putative class members would have to intervene or file their own individual actions during the pendency of the class action in case class certification is denied to avoid having their claims become time-barred.

But does the American Pipe rule also apply to statutes of repose, which create an absolute right to be free from liability after a certain time frame? District courts had reached conflicting decisions on
Continue Reading Class Action Filing Doesn’t Toll Statute of Repose for Securities Claims, Says Second Circuit

The Class Action Fairness Act of 2005 (“CAFA”) provides that defendants may remove certain mass actions—cases that are proposed to be tried jointly—so long as the aggregate amount at stake is at least $5 million and there are 100 or more plaintiffs in the case. 28 U.S.C. § 1332(d)(11). But what if plaintiffs’ counsel try to avoid removal by splitting up a 100-plaintiff mass action into two smaller mass actions?

That was the situation facing Carnival. After a cruise ship ran aground off the coast of Italy, plaintiffs’ lawyers filed a mass action in state court on behalf of
Continue Reading Can Plaintiffs Gerrymander Mass Actions to Avoid Federal Jurisdiction?

As we have blogged before, the food and beverage industry is facing a tidal wave of class action litigation alleging false advertising under state consumer protection laws. We monitor hundreds of these cases, which often present a similar standing issue – the class representative has purchased one product, say Ben & Jerry’s All Natural Chunky Monkey Ice Cream, which he says was falsely advertised as “all natural,” but seeks to represent a nationwide class of consumers challenging all varieties of Ben & Jerry’s ice cream marketed as “all natural,” including, for example, Chubby Hubby.

One of the latest decisions
Continue Reading “Sure I Didn’t Buy It, But I’m Suing for False Advertising Anyway!”

The federal Food Drug and Cosmetic Act (“FDCA”)—along with the implementing regulations promulgated by the FDA—sets out a detailed national standard for much of what appears on food and beverage labeling. See 21 U.S.C. §§ 301, et seq.; 21 C.F.R. §§ 101, et seq.; Pom Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170, 1175 (9th Cir. 2012). This national labeling law expressly preempts states from enacting different requirements for labels, including requirements imposed by courts under the guise of redressing a “misleading” or “fraudulent” label. 21 U.S.C. § 343-1; Turek v. Gen. Mills, Inc.,
Continue Reading Are State-Law Claims for Violating Federal Food Labeling Law Preempted?

Plaintiffs in some TCPA class actions have taken the position that companies are strictly liable for any violation of the TCPA by third parties that make calls or send faxes on the companies’ behalf (such as third-party marketers or debt collectors).  The FCC, however, has just issued a declaratory ruling that appears to reject that broad position, instead concluding that federal common-law agency principles govern vicarious liability under the TCPA.  Please read our report on the ruling.
Continue Reading FCC Addresses Vicarious Liability Under Telephone Consumer Protection Act