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We have written previously about FTC v. Wyndham Worldwide Corp., currently pending in federal district court in New Jersey, and its potential significance for data security class actions. A recent opinion in that case has brought it back into the news—and made clear that the stakes are as high as ever.

Over the FTC’s opposition, the district court certified an interlocutory appeal to the Third Circuit regarding its earlier denial of Wyndham’s motion to dismiss. Specifically, the district court certified two questions of law for appellate review: (1) whether the FTC has the authority under Section 5 of the…
Continue Reading Wyndham Seeks Immediate Appeal Over Whether FTC Has Authority To Regulate Data Security

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

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