In a one-line order issued last week, the Supreme Court dismissed In Re Grand Jury, No. 21-1397, one of the most significant cases about the attorney-client privilege in decades.  The dismissal came just two weeks after oral argument.  The Court explained that the writ of certiorari had been “improvidently granted,” meaning the Court should not have agreed to hear the case.

In re Grand Jury invited the Court to address the recurring question of how the attorney-client privilege applies when a client confers with a lawyer and receives both legal and non-legal advice.  The case came to the Court after the Ninth Circuit ordered an unnamed law firm to comply with a grand jury subpoena for documents related to its advice on a client’s taxes.  The Ninth Circuit concluded that the attorney-client privilege did not attach because legal advice was not the “primary purpose” of the communication.

The “primary purpose” test applied by the Ninth Circuit reflects the approach that a majority of courts take in determining the scope of the attorney-client privilege.  In Re Grand Jury provided the Court the opportunity to endorse a broader and clearer test used by a smaller group of courts including the D.C. Circuit, which asks whether receiving legal advice was at least one “significant purpose” of the communication.  The latter test would more clearly protect attorneys’ communications with their clients on complex matters involving both legal and non-legal advice.

Although the Court did not explain its reasons for dismissal, the Justices could have concluded that the facts of the case—which involved a confidential grand jury proceeding—offered a poor vehicle for addressing the issue.  Alternatively, the Court may have been frustrated by how the parties shifted their arguments over the course of briefing.  But a dismissal does not necessarily indicate that the Court will decline to weigh in on the “primary purpose” v.  “significant purpose” debate in the future.  After all, the original decision to hear the case suggests an interest in the issue.  In the meantime, it remains important to be aware of the limits of the attorney-client privilege as applied to dual-purpose communications, and how that answer may change depending on the governing law.

A U.S. District Court Judge in California dismissed a putative class action asserting claims under section 637.7 of the California Invasion of Privacy Act (CIPA) in a case that could have useful implications for automotive and other device manufacturers whose products have the ability to track location.  Plaintiff claimed that a third-party company, Otonomo Inc., partnered with automobile manufacturers to use the telematics control units (TCUs) installed in their vehicles to track a driver’s location via GPS without the driver’s knowledge.  The Court rejected the claim, holding that because the TCU devices were built-in, rather than devices added to a vehicle, they were not “attached” to the car and thus did not fall within the statute’s definition of “electronic tracking device.”

Continue Reading Class Action Suit Brought Under CIPA Section 637.7 for Alleged Location-Based Tracking of Vehicles Is Dismissed

A court in the Northern District of Illinois and a court in the Middle District of Florida recently arrived at opposite conclusions in two very similar putative class actions, both of which alleged that the claim “natural flavor with other natural flavors” on drink labels was misleading because synthetic malic acid was present in the product.

Continue Reading Two Federal Courts Arrive at Opposite Conclusions in Suits Claiming “Natural Flavor with Other Natural Flavors” Is Misleading

The Ninth Circuit recently held that the Children’s Online Privacy Protection Act, which gives the Federal Trade Commission  authority to regulate the online collection of personal information from children under the age of 13, does not preempt consistent state law, potentially increasing the risk of class action litigation based on alleged COPPA violations.  See Jones v. Google LLC, No. 21-16281, — F.4th —- (9th Cir. 2022).

COPPA’s preemption provision states that “No State or local government may impose any liability . . . in connection with an activity or action described in this chapter that is inconsistent with the treatment of those activities or actions under this section.”  15 U.S.C. § 6502(d).  Based on the FTC-focused remedial scheme and the lack of a private right of action, the district court held that COPPA “does not leave room for state laws to impose additional liability” and dismissed state law privacy, consumer protection, and unjust enrichment claims premised on violations of COPPA.  Hubbard v. Google LLC, 508 F. Supp. 3d 623, 630 (N.D. Cal. 2020); see also Hubbard v. Google LLC, 546 F. Supp. 3d 986 (N.D. Cal. 2021). 

The Ninth Circuit reversed.  Focusing on the preemption clause’s use of the word “inconsistent,” it explained that its precedents analyzing similar clauses bar only “contradictory state law requirements, or . . . requirements that stand as obstacles to federal objectives.”  It rejected the argument that the use of the word “treatment” in COPPA’s preemption clause indicated an exclusive remedial scheme.  As a result, the Ninth Circuit held that state law remedies for violations of state law overlapping with COPPA violations were not preempted in these circumstances.

The Ninth Circuit’s decision aligns with the Third Circuit’s decision in In re Nickelodeon Consumer Priv. Litig., 827 F.3d 262, 292 (3d Cir. 2016), which also held that COPPA did not preempt consistent state law.  Defendants faced with state-law claims overlapping with COPPA violations should continue to assess whether asserted claims may be inconsistent with COPPA or whether plaintiffs have proved all elements of the independent state law claims (and not just a COPPA violation), which could provide grounds to distinguish these decisions.  See, e.g., H.K. through Farwell v. Google LLC, 595 F. Supp. 3d 702, 709-11 (C.D. Ill. 2022) (holding that COPPA preempts BIPA claims asserted by plaintiffs under age of 13 because BIPA and COPPA impose different substantive standards).

From the implementation of the EU Representative Actions Directive to an explosion of claims in the UK Competition Appeal Tribunal, coupled with an ever-increasing role for litigation funders, class actions in both the UK and the EU are now taking off. We take a look at some of the key developments below.

Continue Reading A Closer Look: The Rise of Class Actions in the UK and the EU

Dark chocolate manufacturers have recently been hit with a wave of putative class action complaints in New York and California federal courts, alleging that the confectioners breached an implied warranty of merchantability and engaged in misleading advertising by failing to disclose the levels of lead and cadmium in their dark chocolate products.  According to the complaints filed against The Hershey Company, Trader Joe’s, Mars, Inc., and most recently Godiva Chocolatier, Inc. and Lindt & Sprüngli, Inc., the plaintiffs allege that the products contain lead and cadmium in excess California’s Maximum Allowable Dose Level (“MADL”)—a “safe harbor” level established under California’s “Prop. 65” law, the Safe Drinking Water and Toxic Enforcement Act of 1986.

The class action mechanism and the claims of false and deceptive advertising are a more novel approach to lead-in-chocolate lawsuits, which have traditionally been litigated in California state court as a violation of Prop. 65.  That law requires manufacturers, distributors, suppliers, and retailers of a consumer product containing certain listed chemicals to provide consumers with a “clear and reasonable” warning if exposure to that listed chemical poses a significant risk of cancer, or reproductive or developmental harm.  Mars, Hershey, Lindt, and Trader Joe’s previously entered into a settlement in 2018 to resolve Prop. 65 claims against the chocolatiers brought by the organization As You Sow.

Continue Reading Leaving a Bitter Taste: Class Action Lawsuits Alleging Lead and Cadmium in Dark Chocolate

Under the Ninth Circuit’s 2020 decision in Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020), plaintiffs cannot recover equitable relief in federal court if they have an adequate legal remedy.  More than two years later, district courts remain divided on how to apply Sonner at the pleading stage, with some postponing the analysis to later stages and others routinely dismissing equitable claims.  In courts that take the stricter view, Sonner can be a useful tool for narrowing the claims class action defendants must litigate in a federal case, particularly in California, where common consumer protection claims are largely limited to equitable remedies.  That said, a pair of recent Ninth Circuit decisions highlights that defendants should carefully consider the risk that a plaintiff will refile dismissed equitable claims in state court.

Continue Reading A Closer Look: Equitable Jurisdiction in the Ninth Circuit After Sonner

The Sixth Circuit recently affirmed a district court’s application of nonmutual offensive collateral estoppel to negligence claims arising out of an MDL—potentially raising the stakes for bellwether trials that are not considered binding by the district court at the outset and the impact that rulings in those cases could have on later decisions.

Continue Reading Sixth Circuit Applies Offensive Collateral Estoppel in Subsequent Mass Tort Proceedings

The Supreme Court recently granted certiorari in a case to resolve a circuit split that has serious implications for companies who are unsuccessful in their efforts to enforce arbitration provisions in federal district courts. 

In Coinbase, Inc. v. Bielski, No. 22-105, the defendant moved to compel arbitration in two putative class actions.  The motions to compel were denied, and the defendant sought stays while it appealed the denials—which the Federal Arbitration Act gives defendants an automatic right to do.  See 9 U.S.C. § 16.  Both motions to stay were denied, and the Ninth Circuit affirmed both decisions.

Continue Reading SCOTUS Set to Resolve Circuit Split over Stays Pending Arbitration Appeal

The First Circuit recently vacated and remanded a district court’s approval of a proposed class action settlement “because the absence of separate settlement counsel for distinct groups of class members makes it too difficult to determine whether the settlement treated class members equitably.” Murray v. Grocery Deliver E-Servs. USA Inc., — F.4th —, 2022 WL 17729630, at *1 (1st Cir. Dec. 16, 2022). At the same time, the First Circuit declined to follow the Eleventh Circuit’s recent decision banning incentive awards to class representatives.

On October 15, 2021, a district court approved a class action settlement resolving plaintiffs’ claims that defendant HelloFresh violated the Telephone Consumer Protection Act in three different ways. On appeal, an objector argued that the settlement was defective because class members with one type of claim had stronger and more valuable claims than members with the two other claims, so it was inadequate for class members with different claims to be represented by the same counsel during settlement negotiations.

The First Circuit agreed. Because the same counsel represented different groups of plaintiffs whose claims involved “significantly different elements” and faced “very different defenses,” the First Circuit found that the “district court lacked the requisite basis for certifying the settlement class and approving the allocation of the $14 million among class members as fair, reasonable, and adequate.” Id. at *8. The Court explained that if the same counsel represents groups of plaintiffs “with significantly different claims in the context of allocating a lump-sum settlement,” then the district court “lacks structural assurance that the settlement treats each group fairly.” Id. at *4. In Murray, for instance, the class members’ three TCPA claims involved different elements and defenses that were “too significant to leave the equitable apportionment of a common fund to a court’s discretion” without the procedural safeguard of an “arm’s-length negotiation between separately represented groups” to ensure that class counsel was not “selling out” one category of claim for another. Id. at *4–8.

In the process, the Court rejected the objector’s arguments that incentive awards for named plaintiffs are improper. Although the Eleventh Circuit recently made waves for holding that class settlements may not offer incentive awards to class representatives, the First Circuit chose “to follow the collective wisdom of courts over the past several decades that have permitted these sorts of incentive payments, rather than create a categorical rule that refuses to consider the facts of each case.” Id. at *10. The Court also rejected the objector’s argument that incentive awards categorically present a conflict of interest that prevents named plaintiffs from adequately representing the class. See id.

The First Circuit’s decision should remind companies who are negotiating a proposed class settlement to consider whether separate counsel is necessary to represent groups of plaintiffs that have significantly different claims—i.e., claims with materially different elements or defenses. Moreover, although the Court did not address the extent to which a class may be certified for litigation, see id. at *8 n.1, it noted that “much, if not all, of [its] analysis would apply to Rule 23(a)’s adequate representation requirement in the context of class certification for settlement,” id. at *3. Thus, defendants may be able to apply the Court’s reasoning to argue that a class should not be certified under Rule 23(a)(4)’s adequacy requirement if a single class counsel represents plaintiffs who have claims that involve significantly different elements or defenses.