Clients regularly ask: If we win this putative class action, can the opposition just file another one on behalf of another as-yet-unidentified putative class representative?  Until June 11, the answer was “Maybe?”  Now, the answer is clearly no.

In a unanimous decision, the Supreme Court (in reversing the Ninth Circuit) clarified that the tolling recognized under American Pipe applies only to successive individual actions, not successive putative class actions.  China Agritech v. Resh, 2018 U.S. LEXIS 3502, *23 (U.S. 2018).  According to the opinion authored by Justice Ginsburg: “We hold that American Pipe does not permit a plaintiff who waits out the statute of limitations to piggyback on an earlier, timely filed class action.  The ‘efficiency and economy of litigation’ that support tolling of individual claims . . . do not support maintenance of untimely successive class actions.”  Id. at *13-*14.

In her concurrence in the judgment, Justice Sotomayor wrote she would limit the holding to cases under the PSLRA.  Id. at *24.  But she was alone in that view.  Id.

We applaud the U.S. Supreme Court in continuing to recognize the inherent limits of class action procedure, and we look forward to similar opinions in the future.

In the past few weeks, five putative class action lawsuits have been filed under the Illinois Biometric Information Privacy Act (“BIPA”), 740 ILCS 14/1 et seq., targeting defendants in the health care, senior living, commercial baking, meat processing and security industries. These recent suits join previously filed BIPA class actions against day care operators, tanning salons, video game manufacturers, hotel groups and supermarkets as well as much larger entities, including Facebook, Google, Shutterfly, Six Flags and Snapchat. All of these suits have similar allegations at their core; that defendants utilized employees’, customers’, or other persons’ biometric identifiers, such as fingerprints, voiceprints, retina scans or facial recognition technology, in violation of BIPA’s disclosure and consent requirements. All seek recovery of BIPA’s statutory liquidated damages of $1,000 for each negligent violation, or $5,000 for each intentional or reckless violation, injunctive relief, and recovery of attorneys’ fees and costs.

BIPA Background

Until the past 18 months, when the first of these suits was filed, BIPA has been a little-known statute. Enacted in 2008, BIPA was passed to protect against risk of identity theft resulting from the growing use of biometric technology to facilitate financial transactions and security screenings. 740 ILCS 14/5.

BIPA applies to both biometric identifiers, such as fingerprints, voiceprints, retina scans, and facial geometry, and other biometric information based on those identifiers to the extent used to identify an individual. 740 ILCS 14/10. BIPA is an important measure because, unlike such things as Social Security numbers and passwords that can be changed if necessary, biometrics are biologically unique and, when compromised, leave an individual without recourse. 740 ILCS 14/5. Continue Reading The Rise of Biometric Lawsuits in Illinois

On July 10, 2017, the Consumer Financial Protection Bureau (the “CFPB”) finalized its proposed arbitration rule that will prohibit providers of certain consumer financial products and services from requiring a consumer to utilize mandatory pre-dispute arbitration in lieu of a consumer filing or participating in a class action (“Arbitration Rule”). In other words, no longer may covered entities require a consumer to use arbitration in lieu of class action participation. This Arbitration Rule will likely have far ranging consequences for covered providers, including mandatory updates to consumer agreements, likely increases to legal and compliance costs and increased operational risks in new consumer products.

Background

Congress directed the CFPB to study pre-dispute arbitration agreements in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Dodd-Frank Act”).  The Dodd-Frank Act also authorized the CFPB, after completing the study, to issue regulations restricting or prohibiting the use of arbitration agreements if the CFPB found that such rules would be in the public interest and for the protection of consumers.  In 2015, the CFPB published and delivered to Congress a study of arbitration.  On May 24, 2016, the CFPB proposed the Arbitration Rule with a request for comment.  Since May 2016 the CFPB has been silent, leading many in the financial services industry to believe that, with the change in administration, the CFPB had abandoned the Arbitration Rule.  In finalizing the Arbitration Rule, the CFPB has answered the industry’s long outstanding question.  Would the CFPB be more moderate in its approach in issuing regulation that drastically impacts financial services providers?  The industry has its answer.  The CFPB has answered in the negative. Continue Reading Another Day, Another Regulation: A Summary and Description of the CFPB’s Arbitration Rule

If you follow developments in TCPA case law, you’ve probably heard by now that the DC Circuit Court of Appeals last week overturned the 2015 FCC Order that had required TCPA opt-out notices on both solicited and unsolicited faxes. The court held that the FCC’s rule was “unlawful to the extent that it requires opt-out notices on solicited faxes.” See Bais Yaakov of Spring Valley v. FCC, et al., Case No. 14-1234 (D.C. Cir.). In fact, the DC Circuit—despite years of FCC guidance, 13 consolidated appeals and more than two dozen lawyers participating in the briefing—seemed to view this as a relatively simple issue of statutory construction: “The text of the Act provides a clear answer to the question presented in this case. . . . Congress drew a line in the text of the statute between unsolicited fax advertisements and solicited fax advertisements. Unsolicited fax advertisements must include an opt-out notice. But the Act does not require (or give the FCC authority to require) opt-out notices on solicited fax advertisements. It is the Judiciary’s job to respect the line drawn by Congress, not to redraw it as we might think best.” Continue Reading DC Circuit Opts Out of Flawed FCC Ruling

Yet another court has found that consent in a TCPA case is an inherently individualized issue that precludes class certification. In Newhart v. Quicken Loans, Inc., 2016 U.S. Dist. LEXIS 168721 (S.D. Fla. Oct. 13, 2016), the plaintiff moved to certify a class of individuals who had received calls from defendant on their cellular telephones, allegedly in violation of the TCPA. The court denied class certification, finding that “resolving the consent issue will depend upon multiple layers of individualized evidence about each call and the circumstances that preceded it. Therefore, predominance is lacking.” Id. at *6. Importantly, the court did not need to decide “whether any class member actually consented.” Id.

The court held that the consent analysis had two parts. First, the trier of fact must determine “whether each challenged call was made for a telemarketing purpose.” Id. If so, prior express written consent would be required. If not, the consent need not be in writing. Id. Second, the trier of fact must determine whether the defendant “possessed the requisite consent before making each call.” Id. at *6–7.  The court’s decision that an individualized analysis was necessary turned largely on its finding that the trier of fact must look at each individual call, not the “purpose of the overall campaign. Id. at *7–8. Analogizing to the TCPA fax provision, the court noted that, “[t]he FCC has expressly recognized, in the unsolicited fax context, that even when some aspect of a series of communications might meet the telemarketing rule, others might not, and so it is necessary to examine the communications separately.” Id. at *8. Because evidence showed that the challenged calls in the case were not uniform in purpose, the telemarketing issue could not be resolved on a class-wide basis. Id. at *10.  Continue Reading TCPA Class Certification Denials Continue to Pile Up, This Time in Florida

I. Overview

While the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (the TCCWNA) has been around for over 30 years, there has been a recent surge in the filing of class action lawsuits under the statute against businesses engaged in e-commerce. The statute was enacted in 1981 to regulate “consumer contracts, warranties, notices and signs contain[ing] provisions which clearly violate the rights of consumers.” Although such provisions are legally unenforceable, the legislature reasoned that “their very inclusion in a contract, warranty, notice or sign deceives a consumer into thinking that they are enforceable and for this reason the consumer often fails to enforce his rights.”

Initially, the statute was not used very much and remained dormant during the first 30 years following its enactment. Recently, however, the plaintiffs’ bar has resurrected the statute, targeting the website terms and conditions of businesses engaged in e-commerce. This resurrection began in 2013 as a result of the New Jersey Supreme Court holding that certificates issued by restaurants and offered for purchase by an Internet marketer are subject to TCCWNA rules1, and it has continued for a few reasons. First, plaintiffs are asserting that the TCCWNA is very broad in scope. Indeed, plaintiffs’ lawyers contend that it applies to consumers who suffered no actual injury. Additionally, the statute provides for statutory damages of $100 per customer as well as attorney’s fees and costs, which creates the potential for very large monetary awards. Finally, while more guidance is necessary to determine how courts will treat e-commerce TCCWNA claims, there have been several plaintiff-friendly TCCWNA decisions in New Jersey. Continue Reading New Jersey Consumer Statute Presents Trap for Unwary Retailers Engaged in E-Commerce

Despite claims from the plaintiffs’ bar that the Supreme Court’s decision in Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), did not significantly change the landscape for class actions, courts continue to rely on Spokeo to dismiss claims that have no concrete injury beyond a statutory violation. In the last month, two more cases — including one federal circuit-level decision and one TCPA decision — were dismissed because the plaintiff was unable to demonstrate Article III standing under Spokeo. These cases demonstrate the important role that Spokeo-related arguments can play in stymying class actions.

In Nicklaw v. CitiMortgage, Inc., 2016 U.S. App. LEXIS 18206 (11th Cir. Oct. 6, 2016), the court held that the plaintiff lacked Article III standing to pursue a claim where the class action complaint alleged statutory violations and sought only statutory damages.  The only claim asserted by the plaintiff in Nicklaw was that the plaintiff failed to comply with a New York statute requiring it to sign and record a certificate of discharge within 30 days of a mortgage satisfaction. Based on the defendant’s alleged failure to do so,  the plaintiff sought monetary damages. The court held that plaintiff alleged “neither a harm nor a material risk of harm that the district court could remedy.” This opinion marked the first time that the Eleventh Circuit had applied the Spokeo framework and will undoubtedly have a ripple effect on district court cases within the circuit (and beyond) when defendants make similar arguments. Although Nicklaw is not a media or privacy case, it certainly provides a roadmap for all manner of class actions. Continue Reading Spokeo as a Class-Action Silver Bullet? Two More Dismissals Based on Lack of Concrete Harm

A relatively new breed of data breach class action involves financial institutions suing merchants for expenses associated with credit card data breaches. Although merchants may not have contractual privity with the card issuers (and instead may have contractual privity with the credit card brands or payment processors), the financial institutions in these cases claim that the retailers should still compensate the financial institutions for costs associated with fraudulent charges and reissuance of credit cards as a result of a data breach. In the most recent decision involving these sorts of claims, an Illinois federal judge found the financial institutions’ claims against the Shnucks grocery store chain too vague to survive Rule 12 dismissal. See Cmty. Bank of Trenton v. Schnuck Mkts., 2016 U.S. Dist. LEXIS 133482 (S.D. Ill. Sept. 28, 2016). The court reasoned that although “the parties are charting relatively new territory in the data breach context by presenting a case between financial institutions and a merchant (as opposed to customers and a merchant), . . . the Court notes that the generality made it difficult to assess the plausibility of such claims.” Id. at *8-9. Continue Reading Schnucks Shakes Card Issuer Data Breach Class Action, For Now

For years, we have been documenting the rise in wage/hour class action lawsuits and precautionary steps your organization may take to mitigate the risks and liability inherent in those claims. And, while wage/hour lawsuits continue to be filed at record rates, the plaintiffs’ bar is now flirting with a new type of class action lawsuit which poses a threat to any employer that operates a website. These lawsuits allege that company websites are inaccessible to the blind and/or visually impaired and therefore violate Title III of the Americans with Disabilities Act (ADA) and various states’ laws.

Background

Title III prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation.” Title III requires “reasonable modification” of “policies, practices, and procedures” and the provision of “auxiliary aids” to ensure effective communication with the disabled. A flurry of recent lawsuits and attorney demand letters allege that websites violate Title III because they are not accessible to the visually impaired; for example, that they are not compatible with screen-reading software that describes images on the website, that they require the use of a mouse instead of making all functionality available from a keyboard, or that video content does not contain an audio description.

Because these lawsuits are relatively new, courts are split as to whether Title III applies only to websites that have a sufficient nexus to a company’s physical locations, or whether it applies to websites in and of themselves. Most of these cases are in the early stages of litigation and, so far, provide little substantive guidance on what steps, if any, businesses must take to make their websites compliant with Title III. Continue Reading Is Your Website Accessible to the Blind and Visually Impaired? Plaintiffs’ Firms and the Department of Justice Are Taking Notice

I. Introduction

On January 20, 2016, the U.S. Supreme Court issued its highly anticipated opinion in Campbell-Ewald Co. v. Gomez, ruling that an unaccepted settlement offer, or offer of judgment, without actual payment and/or entry of judgment does not moot a named plaintiff’s class action claims.  In essence, the ruling prevents defendants from offering (but not paying) complete individual relief and then arguing for dismissal of a putative class action based on satisfaction of the class representative’s individual claim.  Although this ruling was a loss for class action defendant Campbell-Ewald Co. (“Campbell”), the opinion potentially validates a powerful tool for class action defendants going forward because it suggests that actual payment of complete individual relief and/or entry of judgment for that individual relief, rather than a mere offer, is sufficient to fully satisfy a class representative’s individual claim, resulting in the entry of judgment based on the absence of Article III standing and in dismissal of the class claims without prejudice. Continue Reading Defense Implications of Campbell-Ewald: The Sky is NOT Falling