The hostility of some California courts to arbitration—and their resistance to preemption under the Federal Arbitration Act (FAA)—has produced nearly three decades of U.S. Supreme Court reversals. The most recent is AT&T Mobility LLC v. Concepcion, which held that the FAA preempted the Discover Bank rule, under which the California Supreme Court had blocked enforcement of consumer arbitration agreements that required individual rather than class arbitration. Last week’s decision in Imburgia v. DirecTV, Inc. (pdf) demonstrates that resistance to Concepcion lives on in the California courts, even at the cost of creating a split with the Ninth Circuit on
Continue Reading Another California Court Does Backflips to Thwart Arbitration and Elevate The Class-Action Device

It is no secret that many private class actions are filed as follow-on lawsuits to news reports, government investigations, regulatory developments, and identical earlier-filed class actions. But a recent gambit by the plaintiffs’ bar is among the more creative efforts we have seen. Earlier this week, a well-known plaintiffs’ firm filed Dang v. Samsung Electronics Co., in the Northern District of California. The complaint alleges that Apple’s victory over Samsung (at least in part) in certain highly publicized patent infringement actions establishes that Samsung has violated California’s consumer protection law as well as warranty statutes in 49 states and
Continue Reading Will A New Wave Of Class Actions Spring From Patent Infringement Litigation?

Since 2006, companies based outside California have been alert to the potential burdens of class actions under California’s Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 630 et seq. The laws of most states, as well as federal law, allow telephone calls to be recorded with the consent of one party to the call. Accordingly, companies in those states usually can record customer service calls for quality-assurance purposes without the need to procure the customer’s consent because the call-center employee, as a party to the call, can consent to the recording. California, however, is one of 12 states that
Continue Reading What’s Going On With Class Actions Alleging That Businesses That Record Customer-Service Calls Are Violating California’s Invasion of Privacy Act?

The Ninth Circuit’s decision last year in Mazza v. American Honda Motor Co. [666 F.3d 581] (a case I argued) made it more difficult to sustain a nationwide class action under California consumer protection laws. Applying California “governmental interest” choice-of-law principles, the Mazza court held that the jurisdiction having the greatest interest in supplying the rule of decision was the one in which a consumer received misleading communications, made her purchase, and sustained any injury—not the location of the company headquarters from which the communications “emanated.”

In Maniscalco v. Brother International (USA) Corp., the Third Circuit reached a similar
Continue Reading Third Circuit Rejects South Carolinan’s Effort To Bring Nationwide False Advertising Class Under New Jersey Law

Plaintiff Christopher Rapczynski testified that he purchased Skinnygirl Margarita mix “because I love my wife,” she “said she liked it,” and she “has my three children and works very hard.” Those all may be good reasons for a nice Valentine’s Day present, but not for bringing a class action. As the Southern District of New York recently held, Rapczynski was an inadequate class representative—not for lack of love—but because he hadn’t relied on the allegedly false claim on the product’s label about which he was suing. For that and other reasons, the court denied certification of a putative class of
Continue Reading Class Certification Denied in Skinnygirl False-Advertising Case Because Class Representative Didn’t Rely on Label

Plaintiffs who wish to bring product-liability and consumer-fraud class actions against businesses often overreach when defining the proposed class in order to raise the stakes—and hence the settlement pressure—on the defendant.  A recent unpublished decision by the Eleventh Circuit, Walewski v. Zenimax Media, Inc. (pdf), No. 12-11843, is yet another example of the growing consensus rejecting these overly broad putative classes.

In Walewski, a Florida purchaser of a fantasy video game (Elder Scrolls IV: Oblivion) alleged that after he had played the game for 450 hours, a software defect prevented him from “cast[ing] spells,” “open[ing] doors and


Continue Reading Expelliarmus! Eleventh Circuit Disarms False-Advertising Class Action Against Makers of Fantasy Video Game

A New Jersey district judge has certified a nationwide class to pursue claims under the New Jersey Consumer Fraud Act (NJCFA) (pdf), in conflict with the decisions of other courts that have refused to permit nationwide classes to proceed under the law of a single state. The plaintiffs in Kalow & Springut, LLP v. Commence Corp.2012 WL 6093876 (D.N.J. Dec. 7, 2012), contend that Commence, a New Jersey software company, intentionally inserted a “time bomb” that caused its software to stop working in 2006 in order to force users to buy a software fix or upgrade.

Most of the plaintiffs bought the software and were allegedly injured in states other than New Jersey, and it was in those states that they would have received and relied on any misrepresentations by omission. And the district court recognized that the consumer laws of the 51 jurisdictions differed in material respects. Nonetheless, based on its application of New Jersey choice-of-law principles (which follow the Restatement’s most-significant-relationship test), the court concluded that New Jersey’s interests in preserving the reputations of its local merchants outweighed the interests of other states in regulating business transactions that occurred within their borders and were claimed to injure their citizens. Because the NJCFA is one of the strictest consumer laws in the nation, the court found that other states’ interests in applying their own laws to in-state transactions would not be impaired. In effect, the court held (as I see it) that the most plaintiff-friendly rule is always acceptable everywhere else.
Continue Reading New Jersey Federal Court OKs Nationwide Class Under NJ Consumer Law