Late last year, our colleagues highlighted a wave of class action litigation asserting novel claims under state wiretap laws against website operators that use session replay software and chatbots on consumer websites. Federal district courts in California have now ruled on the first round of chatbot cases, most brought by a handful of “tester” plaintiffs under the California Invasion of Privacy Act (“CIPA”), Cal. Penal Code §§ 630 et seq., and have nearly uniformly rejected the claims. These initial favorable rulings should be helpful for defendants facing similar claims.Continue Reading A Closer Look: Courts Reject California Wiretap Claims Based on Website Chat Features
Supreme Court Denies Cert on Incentive Awards
We previously covered the Eleventh Circuit’s decision in Johnson v. NPAS Solutions, LLC, 975 F.3d 1244 (11th Cir. 2020), in which the Eleventh Circuit relied on two Supreme Court decisions from the 1880s to prohibit courts from awarding incentive or service awards to class representatives in class settlements. Id. at 1255 (citing Trustees v. Greenough, 105 U.S. 527 (1881), and Cent. R.R. & Banking Co. v. Pettus, 113 U.S. 116 (1885). Although the Eleventh Circuit was the first federal appellate court to bar these awards in all circumstances, a recent Second Circuit decision agreed that these awards are “likely impermissible” under Supreme Court precedent, while observing that it would take the entire Second Circuit to overturn prior precedent upholding incentive awards. See Fikes Wholesale, Inc. v. HSBC Bank USA, N.A., 62 F.4th 704, 721 (2nd Cir. 2023). The Department of Justice has likewise implied that it agrees with the Eleventh Circuit’s position, relying on the Johnson decision in an effort to block incentive awards from a class settlement in a District of Columbia court.Continue Reading Supreme Court Denies Cert on Incentive Awards
Federal Court Finds That Plaintiffs Aren’t “Subscribers” Under The Video Privacy Protection Act
On April 24, 2023, a judge in the Southern District of New York dismissed a putative class action alleging that Scripps Network LLP (“HGTV”) disclosed plaintiffs’ identities and streaming activities on hgtv.com in violation of the Video Privacy Protection Act (“VPPA”). See Carter v. Scripps Networks, LLC, No. 22-CV-2031 (PKC), 2023 WL 3061858, at *1 (S.D.N.Y. Apr. 24, 2023).Continue Reading Federal Court Finds That Plaintiffs Aren’t “Subscribers” Under The Video Privacy Protection Act
AI Face-Swap App Spawns New Class Action
Last month, a new class action lawsuit was filed in California federal district court against the maker of the app “Reface,” which allegedly allows users to swap their face onto that of a celebrity in images and videos. The plaintiff in the case, Kyland Young, was a finalist on the reality TV show Big Brother. He alleges that Reface allows users to “become” him and to recreate his scenes from the show with their face in place of his. Young alleges that in doing so, the defendant is commercially exploiting his likeness without his permission in violation of California’s right of publicity statute. Young asserts the claim on behalf of a putative class of “[a]ll California residents whose name, voice, signature, photograph, or likeness was displayed on [the] Reface application . . .” Young does not allege how many likenesses were available for use on Reface, but he does allege they are enough to satisfy Rule 23’s numerosity requirement. See Young v. NeoCortext, Inc., Case No. 2:23-cv-02496 (C.D. Cal.).Continue Reading AI Face-Swap App Spawns New Class Action
Eleventh Circuit Analyzes Article III Standing in Class Action Settlement Context
The Eleventh Circuit recently addressed two aspects of Article III standing relevant to class action settlements: the standing of a class member to object, and the standing of class representatives to seek injunctive relief—and thus whether such injunctive relief should be given any weight as part of the approval process.Continue Reading Eleventh Circuit Analyzes Article III Standing in Class Action Settlement Context
Challenge to “I Can’t Believe It’s Not Butter! Spray” Labeling Is Preempted, Ninth Circuit Says
In a decision that boosts defendants’ chances of defeating mislabeling claims at the pleading stage, a Ninth Circuit panel held that that the Food Drug and Cosmetic Act (“FDCA”) expressly preempted plaintiffs’ claims. See Pardini et al. v. Unilever United States, Inc., No. 21-16806 (9th Cir. Apr. 18, 2023).Continue Reading Challenge to “I Can’t Believe It’s Not Butter! Spray” Labeling Is Preempted, Ninth Circuit Says
New York Court Permits “Maximum Strength” False Advertising Case to Proceed
False advertising lawsuits challenging lidocaine products that are represented to be “maximum strength” have now survived motions to dismiss in several instances. Most recently, in Gonzalez Rodriguez v. Walmart, Inc., the plaintiffs brought a putative class action alleging that Walmart’s private label Equate-brand lidocaine patches and creams are falsely labeled as “maximum strength” or “max strength.” The three challenged products are labeled as 4% lidocaine, and allegedly contain 360 milligrams of lidocaine. The plaintiffs allege that certain prescription-strength patches deliver up to a 5% dose of lidocaine, and other over-the-counter patches deliver 560 milligrams of lidocaine—200 milligrams more than Walmart’s products. The Southern District of New York concluded that plaintiffs had adequately pled claims under New York’s consumer protection statutes (GBL §§ 349 and 350), reasoning that “it is plausible that a reasonable consumer would understand ‘maximum strength’ to mean that the patch product contains the maximum amount of lidocaine available on the market for that type of product.” Gonzalez Rodriguez v. Walmart, Inc., 2023 WL 2664134, at *4 (S.D.N.Y. Mar. 28, 2023). Though Walmart argued that (1) prescription-strength patches are not proper comparators and (2) the plaintiffs used erroneous calculations regarding the amount of lidocaine in comparator products, the court rejected these arguments as “fact-intensive disputes  not appropriate for resolution at the motion-to-dismiss stage.”Continue Reading New York Court Permits “Maximum Strength” False Advertising Case to Proceed
Court finds Plaintiffs Pled “Just Barely Enough” to Withstand Dismissal of California Wiretapping Claim against Data Broker
A judge in the Northern District of California granted in part and denied in part Oracle America, Inc.’s motion to dismiss a putative class action alleging that the data broker collects and sells internet users’ personal information for targeting advertising and other purposes in violation of wiretapping acts and privacy-based laws. See Order Granting in Part and Denying in Part Motion to Dismiss, Katz-Lacabe v. Oracle Am., No. 3:22-cv-04792-RS (N.D. Cal. Apr. 6, 2023). In the suit against Oracle, the three named plaintiffs – residents of California, Florida, and Ireland – purported to represent five separate classes of individuals, including a California class, nationwide class, and global class.Continue Reading Court finds Plaintiffs Pled “Just Barely Enough” to Withstand Dismissal of California Wiretapping Claim against Data Broker
D.D.C.’s Application of TransUnion Echoes the Importance of Actual Injury to Class Certification
In Attias v. CareFirst, Inc., 15-cv-00882-CRC (D.D.C. Mar. 28, 2023), the court’s application of TransUnion v. Ramirez, 141 S. Ct. 2190 (2021), reinforced that inclusion of uninjured class members in the class definition can defeat certification. In CareFirst, Plaintiffs alleged that the data breach that CareFirst, Inc. (“CareFirst”), a health insurance company, suffered in 2014 exposed the plaintiffs to increased risk of fraud and identity theft. Plaintiffs claimed they had to spend time and money on services such as credit and identity theft monitoring programs. They sought to represent classes that included all CareFirst customers in certain states whose personal information was impacted by the breach, regardless of whether those customers incurred additional expenses as a result of the breach.Continue Reading D.D.C.’s Application of <em>TransUnion </em>Echoes the Importance of Actual Injury to Class Certification
Minnesota Federal Court Certifies Class of Indirect Pork Purchasers Under Rule of Reason Analysis
A Minnesota federal court recently certified several classes of plaintiffs asserting antitrust claims against America’s largest pork producers and integrators. In re Pork Antitrust Litig., C.A. No. 18-1776 (D. Minn. Mar. 29, 2023).
Each class of plaintiff asserted a per se theory of harm that defendants conspired to limit the supply of pork and thereby fix prices in violation of federal and state antitrust laws. Plaintiffs further alleged that defendants coordinated output and limited production with the intent and expected result of increasing pork prices in the United States. The court readily found that these claims were suitable for class treatment.
However, one of the classes—the indirect purchasers, representing the end-purchasers of pork products—also asserted a theory of harm that defendants conspired to participate in an anticompetitive information exchange. Such claims are typically evaluated under a rule of reason analysis. The court observed that a “rule of reason claim cannot be certified as a class unless the proposed class members can show commonality—meaning that they participated in the same geographic market and product market.” As a result, the rule of reason often “raises more individualized issues precluding class certification’” (quoting Conrad v. Jimmy John’s Franchise, LLC, No. 18-133, 2021 WL 3268339, at *10 (S.D. Ill. July 30, 2021)). Here, however, the court credited expert testimony that class members participate in the same geographic and product market, which was a national market for certain specified pork products that together constituted “a comparable cluster of products.”
It is likely that other plaintiffs contemplating class claims predicted on conduct subject to the rule of reason may be encouraged by this court’s decision. The court’s finding of commonality based in part on a product market defined by reference to a “cluster” of not necessarily interchangeable pork products may provide guidance for other plaintiffs looking to show commonality in similar contexts.