In 2018, the Ninth Circuit held in Lusnak v. Bank of America, N.A. that California’s interest-on-escrow law was not preempted by the National Bank Act because the California law did not prevent or significantly interfere with the bank’s exercise of its powers. 883 F.3d 1185 (9th Cir. 2018). Six years after Lusnak, the Supreme Court held in Cantero v. Bank of America that test for preemption under the National Bank Act requires courts to “make a practical assessment of the nature and degree of the interference caused by a state law,” and courts should do so by engaging in a “nuanced comparative analysis” that compares the interference caused by previous state laws that were challenged as preempted before the Supreme Court to the law at issue. 602 U.S. 205, 219–21 (2024). Continue Reading Post-Cantero, Ninth Circuit Allows Prior National Bank Act Preemption Decision To Remain Standing
Post-Cantero, First Circuit Sets Demanding National Bank Act Preemption Test
Lenders often require borrowers to keep money in a mortgage escrow account, and those funds are used to pay taxes, mortgage insurance, and other costs throughout the year. At least 12 states require lenders to pay the borrower interest on the money held in these escrow accounts. And for more than a decade, certain national banks have challenged the applicability of those state laws to them, arguing the laws are preempted by the National Bank Act because they would significantly interfere with the exercise of a federally granted banking power.[1]
These cases have resulted in a trip to the Supreme Court. In Cantero v. Bank of America, the Supreme Court explained that the test for preemption under the National Bank Act requires courts to “make a practical assessment of the nature and degree of the interference caused by a state law,” and courts should do so by engaging in a “nuanced comparative analysis” that compares the interference caused by previous state laws that were challenged as preempted before the Supreme Court to the law at issue.[2] 602 U.S. 205, 219–21 (2024). Continue Reading Post-Cantero, First Circuit Sets Demanding National Bank Act Preemption Test
District Court Requires Specific Testing Allegations in Dismissing PFAS Class Action
A court in the Southern District of New York recently dismissed a proposed class action alleging that consumers paid a premium for juice products advertised as “made simply” with “all natural ingredients,” reasoning that the plaintiff lacked standing in light of flaws in his testing allegations. See Lurenz v. Coca-Cola
Continue Reading District Court Requires Specific Testing Allegations in Dismissing PFAS Class ActionFourth Circuit Concludes TransUnion Demands Evidence of Injury for All Class Members
In TransUnion LLC v. Ramirez, the Supreme Court held that “every class member must have Article III standing in order to recover individual damages.” 594 U.S. 413, 427, 431 (2021) (cleaned up). Post-TransUnion, courts have grappled with that guidance, especially as to whether a class that contains uninjured class members may permissibly be certified. As set forth in our recent post, the Supreme Court has granted certiorari in Laboratory Corporation of America Holdings v. Davis to address a circuit split on that issue.Continue Reading Fourth Circuit Concludes TransUnion Demands Evidence of Injury for All Class Members
First Circuit Reverses Denial of Class Certification Based on Erroneous Injury Ruling
Whether a class representative has actually been injured can determine the suitability of class certification, as a class with an uninjured representative will not be certified. But as illustrated by the First Circuit in Nightingale v. National Grid USA Service Company, — F.4th —-, 2024 WL 3337766 (1st Cir. July 9, 2024), when class certification is denied based on an erroneous interpretation of a class representative’s injury, that denial will not stand.Continue Reading First Circuit Reverses Denial of Class Certification Based on Erroneous Injury Ruling
A Closer Look: The Importance of Expert Testimony for “Reasonable Consumer” Claims
Companies in the food, beverage, pharmaceutical, and other industries continue to face litigation regarding their products’ labeling, including as to whether certain representations on labels are deceptive or misleading. In the Second Circuit and elsewhere, these lawsuits tend to turn on what an objective “reasonable consumer” would understand the representation at issue to mean, and whether that “reasonable consumer” would likely be misled under the circumstances. In Bustamante v. KIND, LLC, 2024 WL 1917155 (2d Cir, May 2, 2024), the Second Circuit confirmed how important expert testimony can be to that question, and how efforts to exclude expert testimony can ultimately be the difference between winning and losing. Continue Reading A Closer Look: The Importance of Expert Testimony for “Reasonable Consumer” Claims
Eleventh Circuit Vacates Settlement Approval Because Plaintiffs Lacked Standing to Seek Injunctive Relief
This blog has covered recent decisions from the Eleventh Circuit that have taken a hard look at class action settlements. For example, we previously discussed the Eleventh Circuit’s per se prohibition on the inclusion of incentive awards for class action representatives in class action settlements. See Johnson v. NPAS Sols., LLC, 975 F.3d 1244 (11th Cir. 2020) (vacating settlement in part because it included incentive awards). Just recently, the Eleventh Circuit vacated the approval of another class action settlement because it “included relief that [the district court] had no jurisdiction to award.” Smith v. Miorelli, 93 F.4th 1206, 1209 (11th Cir. 2024).Continue Reading Eleventh Circuit Vacates Settlement Approval Because Plaintiffs Lacked Standing to Seek Injunctive Relief
“Greenwashing” Claims Certified For Class Treatment
This blog recently covered a decision from the Northern District of California denying a defendant’s motion for summary judgment on a plaintiff’s “greenwashing” claims, which asserted that defendant’s “non-toxic” and “Earth-friendly” labels were false and misleading. See Bush v. Rust-Oleum Corp., 2024 WL 308263 (N.D. Cal. Jan. 26, 2024). Now, the same court has granted class certification on those claims, demonstrating that not only can these claims be difficult to defeat before trial, but it can also be difficult to prevent certification on those claims as well.Continue Reading “Greenwashing” Claims Certified For Class Treatment
N.D. Cal. Judge Allows “Greenwashing” Claims to Proceed to Trial
As companies have increased efforts to represent their products as environmentally friendly, “greenwashing” lawsuits—which target companies (often under consumer protection statutes) based on allegations of false or misleading statements regarding the environmental impact of their products or practices—have also increased. A recent order from the district court in the Northern District of California illustrates the difficulty in attempting to defeat these claims before trial if a strong evidentiary record has not been developed.Continue Reading N.D. Cal. Judge Allows “Greenwashing” Claims to Proceed to Trial
Second Circuit Holds that Rule 23(e) Prohibits Presumption of Fairness of Arm’s-Length Negotiated Class Settlements
In Moses v. New York Times Co., 2023 WL 5281138 (2d Cir. Aug. 17, 2023), the Second Circuit vacated and remanded the approval of a class action settlement because the district court applied the wrong legal standard in determining that the settlement was fair. But in doing so, the court reiterated that incentive awards for class action representatives are permissible in the Second Circuit.Continue Reading Second Circuit Holds that Rule 23(e) Prohibits Presumption of Fairness of Arm’s-Length Negotiated Class Settlements