The Ninth Circuit recently upheld a California district court’s dismissal of a proposed class action against Shopify for lack of personal jurisdiction, cautioning that subjecting web-based platforms to jurisdiction in every forum in which they are accessible would lead to the “eventual demise of all restrictions” on personal jurisdiction.

In Briskin v. Shopify, Inc., 2022 WL 1427324 (N.D. Cal. May 5, 2022), the plaintiff alleged that Shopify, a Canadian-based company that provides online merchants throughout the United States with an e-commerce payment platform, violated California privacy and consumer protection laws by allegedly collecting his sensitive personal information while using a California-based retailer’s website.  The district court in the Northern District of California dismissed the action, finding that it lacked both general and specific personal jurisdiction over Shopify. 

A panel of the Ninth Circuit affirmed the district court’s dismissal of the complaint for lack of personal jurisdiction, holding that Shopify could not be subjected to jurisdiction in California where it did not expressly aim the alleged conduct implicated by the lawsuit toward California.  Briskin v. Shopify, Inc., 2023 WL 8225346 (9th Cir. Nov. 28, 2023).  Briskin confirms the Ninth Circuit’s view that for interactive websites and other web-based services and platforms that operate nationwide, “something more” is needed to satisfy the express aiming requirement for personal jurisdiction.

Continue Reading Ninth Circuit Finds No Personal Jurisdiction in California Over Website

            December 1 marks an important and long-awaited change to Federal Rule of Evidence 702.  The Rule, pertaining to the testimony of expert witnesses, has not received a substantive update since 2000, when it was amended in the wake of the Daubert decision.  Now, more than 20 years later—and after years of study—the Rule has been amended to make two issues clear:  (1) that the proponent of an expert’s testimony must establish the admissibility of that testimony by a preponderance of the evidence; and (2) that an expert’s opinion must reflect a reliable application of his or her methodology to the case.  These changes reinforce the key gatekeeping role that courts play in ensuring that only helpful, reliable expert testimony is heard by the factfinder. 

Continue Reading A Closer Look:  Changes To F.R.E. 702 Will Help Ensure Courts Follow The Expert ‘Gatekeeping’ Function

On November 3, the Second Circuit reversed a lower court decision denying a motion to compel arbitration in a putative class action against Klarna.  See Edmundson v. Klarna, Inc., 85 F.4th 695 (2d Cir. 2023).  The decision offers guidance (and support) for companies looking to enforce similar “click-wrap” agreements with mandatory arbitration provisions.

Continue Reading A Closer Look: Second Circuit Steps In to Reverse Decision Refusing To Enforce “Click-Wrap” Mandatory Arbitration Agreement

The Sixth Circuit vacated an order certifying five statewide classes alleging a common brake defect in Ford Motor Company’s F-150 pickup trucks, remanding the case to the district court “for more searching consideration” of whether commonality under Federal Rule of Civil Procedure 23(a)(2) was satisfied.

In Weidman v. Ford Motor Co., 2022 WL 1071289 (E.D. Mich. Apr. 8, 2022), plaintiffs had filed a putative class action against Ford over an alleged defective brake cylinder in their F-150 pickup trucks.  The district court certified five statewide classes on three issues under Rule 23(c)(4): (1) whether the trucks’ brake systems were defective; (2) whether Ford possessed pre-sale knowledge of the defect; and (3) whether concealed information about the defect would be material to a reasonable buyer.

On a Rule 23(f) petition for interlocutory review, the Sixth Circuit vacated the class certification order, finding that the district court’s “cursory treatment of commonality, one of the four necessary class action ingredients, failed to meet Rule 23’s stringent requirements.”  In Re Ford Motor Co., 2023 WL 7877971, at *1 (6th Cir. Nov. 16, 2023).

Continue Reading Sixth Circuit Pumps the Brakes on Class Certification Alleging Common Defects in Ford F-150 Pickup Trucks

On October 24, a Nevada federal court dismissed a class action complaint against operators of hotels on the Las Vegas Strip alleging that defendants’ use of similar room-pricing algorithms constituted a per se illegal price-fixing agreement under Section 1 of the Sherman Act.  The decision, Gibson v. MGM Resorts International, No. 2:23-cv-00140 (D. Nev. 2023), rejected plaintiffs’ allegations of a per se illegal agreement among competitors or a hub and spoke conspiracy but granted leave to amend to plead a Rule of Reason theory. 

Algorithmic pricing refers to the use of software tools, typically offered by vendors, that include historical and/or contemporaneous data to dynamically propose prices to businesses.  In Gibson, plaintiffs alleged that Las Vegas hotel operators Caesars, Treasure Island, Wynn, and MGM violated Section 1 by “agreeing to all use pricing software marketed by the same company” resulting in “higher prices for hotel rooms than the market could otherwise support.”  

Continue Reading Brief Stay: Vegas Hotel Case Dismissed

The Second Circuit recently revived a putative class action asserting false advertising and breach-of-warranty claims over “Reef Friendly*” sunscreen, providing another cautionary tale of how claims involving potentially ambiguous marketing language can survive a motion to dismiss even when clarifying language appears elsewhere on the product package.

In Richardson v. Edgewell, plaintiff challenged the labeling of sunscreen products with “Reef Friendly*” on the front and the clarification “*No Oxybenzone or Octinoxate” or “*Hawaii Compliant: No Oxybenzone or Octinoxate” on the back.  According to the complaint, this labeling was deceptive under the New York General Business Law because the products contained other reef-harming ingredients, and that the inclusion of those ingredients also breached an express warranty formed by the words “Reef Friendly*.”

The district court dismissed the case, finding that the words “Reef Friendly*,” standing alone, were too vague and ambiguous to sustain a claim, and when viewed together with the clarifying language on the back label, the representation was not misleading.  In a non-precedential opinion, the Second Circuit reached a different conclusion, holding that the challenged labels could mislead a reasonable consumer into thinking the products contained no reef-harming ingredients.  Moreover, the opinion explained, the ingredient list would not provide clarification in this case because a reasonable consumer could not be expected to know the “universe of chemicals” harmful to coral reefs such that they could determine whether a sunscreen product was in fact “Reef Friendly.”

This case is one of several challenging similar sunscreen claims.  The Second Circuit’s opinion is yet another example of how vague marketing slogans, even coupled with clarifying language elsewhere on the label, may be deemed deceptive and capable of surviving a motion to dismiss.  This developing case law may also shed light on when courts might deem ingredient lists (or other sources of information) too far beyond the ken of a reasonable consumer to cure an allegedly deceptive representation.

The Eleventh Circuit resurrected a putative class action by holding that consumers need not prove actual damages in order to recover statutory damages based on alleged willful violations of the Fair Credit Reporting Act (“FCRA”).  See Santos v. Healthcare Revenue Recovery Grp., LLC., –F4th–, 2023 WL 7289662 (11th Cir. Nov. 6, 2023) (per curium).

Continue Reading Eleventh Circuit Holds Willful Violations of the Fair Credit Reporting Act Do Not Require Proof of Actual Damages

On October 25, 2023, the Eleventh Circuit overruled several objections to a $2.67 billion antitrust class action settlement agreement that was the product of years of negotiations between Blue Cross and classes of its past and present health plan subscribers.  Two objections, raised by Home Depot, focused on (i) the settlement’s release of antitrust claims arising from Blue Cross’s conduct, and, relatedly, (ii) the adequacy of representation for an injunctive class of plaintiffs who might have future claims based on that conduct.

Continue Reading Eleventh Circuit Upholds Blue Cross Blue Shield Subscriber Settlement Over Antitrust and Public Policy Objections

A bank partnership that has recently been the target of a series of “true lender” attacks has defeated a California regulator’s motion for a preliminary injunction.  The regulator sought the inunction as part of a lawsuit that seeks to hold the fintech firm Opportunity Financial LLC (“OppFi”) liable for violations of California’s usury laws.  The court’s decision is a significant victory for companies that follow the bank partnership lending model to provide consumer loans.

Continue Reading Bank Partnership Defeats Motion for Preliminary Injunction in “True Lender” Suit

A California Superior Court recently certified a putative class action of California residents “who have used mobile devices running the Android operating system to access the internet through cellular data plans provided by mobile carriers.” See Order Concerning: (1) The Parties’ Expert Exclusion Motions; and (2) Plaintiffs’ Class Certification Motion, Csupo, et al. v. Alphabet, Inc., 19CV352557 (Super. Ct. Santa Clara Oct. 26, 2023).

Plaintiffs alleged, under theories of conversion and quantum meruit, that Alphabet, Inc. (alternatively, “Google”) misappropriated allowances of cellular data without permission through “passive transfers.” Plaintiffs further alleged that these transfers occurred even when there was no direct engagement with Google’s products or services.

Noting that “[t]he certification question is essentially a procedural one that does not ask whether an action is legally or factually meritorious,” the court concluded that plaintiffs had satisfied the requirements for class certification. Notably, the court held that common legal and factual issues predominated since the types of data transfers at issue “affect[ed] all or virtually all Android users.” In doing so, the court rejected Google’s arguments that the harm caused to each individual by the data transfers, as well inquiries regarding consent and damages, all required individualized determinations. 

First, the court decided that any data throttling or overages resulting from passive transfers, which presumably varied by class member, did not defeat predominance. The court held that plaintiffs “rel[ied] solely on Google’s misappropriation of cellular data to show harm.” The actual effect of the passive transfers was considered irrelevant for this inquiry.

Second, the court rejected the notion that determinations of implied or express consent would defeat predominance. While the court conceded that implied consent could require individualized determinations, it concluded that Google had failed to demonstrate that there were enough class members that (1) “knew all relevant, material facts” and (2) “tacitly consented” to render certification inappropriate. In reaching that decision, the court found the survey data of Google’s expert, as well as Google’s theories of “continued phone use” and “exposure to newspaper or Internet articles,” to be insufficient grounding for a finding of implied consent. Regarding express consent, the court held that class treatment was appropriate because the terms of use did not vary materially across the class.

Finally, the court found that the plaintiffs’ expert evidence, which purported to show the fair market value of the misappropriated data, was sufficient to establish a classwide model for damages calculations.