In a typical situation, defendants argue that plaintiffs lack standing and plaintiffs insist otherwise.  But, sometimes, the lack of standing can work in plaintiffs’ favor.  In Benton v. CVS Pharmacy, Inc., 2022 WL 1750462 (N.D. Cal. May 31, 2022), plaintiffs took the unusual step of arguing that they lacked Article III standing to bring their claims in federal court in order to have their case remanded back to state court.

Continue Reading To Defeat Dismissal, Plaintiffs Win By Losing Standing

A rare class action trial that resulted in a jury verdict against a defendant may set a precedent for the amount of statutory damages that can be recovered under New York’s General Business Law (GBL) when a class action proceeds to trial.  After a jury found that Joint Juice deceptively labeled its beverages and awarded actual damages to the class, the plaintiffs moved for $140 million in statutory damages.

Continue Reading Plaintiffs Seek $140 Million In Statutory Damages After Trial Win

This past week, co-defendants in a class action related to the theft of cryptocurrency engaged in their own lawsuit over alleged security failures.  IRA Financial Trust, a retirement account provider offering crypto-assets, sued class action co-defendant Gemini Trust Company, LLC, a crypto-asset exchange owned by the Winklevoss twins, following a breach of IRA customer accounts.  IRA claims that Gemini failed to secure a “master key” to IRA’s accounts, and that hackers were able to exploit this alleged security flaw to steal tens of millions of dollars of cryptocurrency.  This lawsuit demonstrates the growing trend of cryptocurrency thefts resulting from cyber breaches, and ensuing litigation activity.

Continue Reading Litigation Between FinTech Companies Follows Class Action Over Cryptocurrency Theft

            The Supreme Court recently declined to review the Sixth Circuit’s decision in Sevier County Schools Federal Credit Union v. Branch Banking & Trust Co., 990 F.3d 470 (6th Cir. 2021), which presents a potential challenge to enforcing arbitration clauses added to standard account agreements.  The cert denial serves as a reminder that companies introducing arbitration agreements should take care to follow all contractual change-of-term requirements and create a record of affirmative customer assent whenever possible.

Continue Reading A Closer Look: Arbitration Clauses Added to Account Agreements Face Risks After Supreme Court Declines Review of Sixth Circuit’s BB&T Decision

An Illinois federal court recently ruled that a Kroger shopper’s proposed class action lawsuit over “SMOKED GOUDA” cheese could proceed, holding that plaintiff’s interpretation of the label to mean the cheese was smoked over hardwood was not “inherently fanciful or unreasonable.”

The complaint, brought by Valerie Kinman under the Illinois Consumer Fraud and Deceptive Trade Practices Act (“ICFA”), alleges that the front label of the “SMOKED GOUDA” product is misleading because it “does not disclose that all of the Product’s smoked flavor is from liquid smoke, prepared by pyrolysis of hardwood sawdust, instead of being smoked over hardwoods.”  In denying Kroger’s motion to dismiss the complaint for failure to plead reasonable consumer deception, the court reasoned that the word “smoked” has at least two meanings—(1) “cured over burning wood” or (2) “an adjective that describes a flavor”—and is therefore ambiguous.  The phrase “distinctive, smoky flavor” on the front of the package did not resolve that ambiguity, moreover, because that phase, too, is subject to multiple interpretations, including that the cheese has such a flavor resulting from the process of smoking over hardwood.

Continue Reading Court Allows False Advertising Claims Over Kroger’s “Smoked Gouda” to Proceed

A bank partnership is the target of yet another “true lender” attack in a new class action filed last week. Michael v. Opportunity Fin., LLC, No. 1:22-cv-00529 (W.D. Tex. June 1, 2022).  The lawsuit is aimed at the lending partnership between OppFi (a fintech) and FinWise Bank (its bank partner), which was also the target of a recent investigation by California’s banking regulator and another class action earlier this year.  This latest development cements a growing trend of true lender attacks after Congress repealed a regulation on the topic last year, dashing hopes of a uniform and predictable standard to identify the “true lender” in bank partnerships.

Continue Reading Bank Partnership Attacked (Again) Under True Lender Theory

A recent class action filed in federal court against YouTube is the latest in a growing list of class actions against companies regarding their automatic renewal practices.

The suit alleges that YouTube and its parent company Google (together, “YouTube”) failed to provide the requisite disclosures and authorizations in connection with their subscription services, including YouTube TV, YouTube Music, and YouTube Premium, as required by Oregon’s Automatic Renewal Law (“ARL”) and in violation of Oregon’s Unlawful Trade Practices Act (“UTPA”).  See Walkingeagle, et al. v. Google LLC, et al., No. 3:22-cv-763 (D. Or.).  According to the complaint, YouTube enjoyed rapid growth in their user-base by employing “dark patterns” in their user interfaces to “trick” users into doing things they might not otherwise do, including signing up for recurring services (and bills).

Continue Reading YouTube Hit with Auto-Renewal Suit Over Its Online Subscriptions Services

Courts in the Northern District of California continue to turn away lawsuits alleging that food and beverage companies must adjust protein content claims to account for protein digestibility.  In Brown v. Nature’s Path Foods, Inc., 2022 WL 717816 (N.D. Cal. Mar. 10, 2022), Judge Gilliam observed that recent FDA guidance reaffirms that companies may

On May 24, Kellogg Sales Co. defeated a third putative class action alleging that Strawberry Pop-Tarts mislead consumers, having defeated two other putative class actions in March.  Represented by prolific plaintiffs’ firm, Sheehan & Associates, Stacy Chiappetta, Kelvin Brown, and Anita Harris each sued Kellogg after realizing that the filling in Strawberry Pop-Tarts contains not just strawberries, but also small amounts of dried pears, dried apples, and the food dye red 40.  But two federal judges in Illinois and a third in New York have now agreed with Kellogg that the packaging of Strawberry Pop-Tarts is not misleading for the simple reason that the pastries in fact contain strawberries.

Continue Reading Kellogg Beats Pop-Tarts Class Actions

Class action plaintiffs often attempt to drag an out-of-state parent company into a forum based solely on the contacts of a subsidiary under the so-called alter ego theory of personal jurisdiction (sometimes called a jurisdictional veil-piercing theory).  This theory allows a court to impute a subsidiary’s contacts with a forum to its parent when the subsidiary is found to be an “alter ego” of the parent company. 

Companies must understand how courts apply the alter ego jurisdictional theory and best practices to minimize the unique risks this theory presents.

Continue Reading A Closer Look: Avoiding Personal Jurisdiction Under An Alter Ego Theory