Litigation

Earlier this month, the Judicial Conference’s Advisory Committee on Civil Rules unanimously approved a proposed new rule to the Federal Rules of Civil Procedure to address case management of multidistrict litigation (“MDL”).  The rule is the first addition to the Federal Rules focused on MDLs, and it reflects an attempt to suggest a nationwide approach to MDL case management that tracks approaches to case management that MDL judges have often followed in practice while leaving MDL judges discretion to depart from the suggested procedures depending on the needs of a particular case.Continue Reading New Federal Rule of Civil Procedure for MDLs Approved by Advisory Committee

On April 15, the U.S. Supreme Court declined a request by Visa and Mastercard to review a D.C. Circuit decision that appeared to add to a circuit split about how lower courts are to determine whether common issues predominate under Federal Rule of Civil Procedure 23(b)(3). 

The case, Visa Inc. v. Nat’l ATM Council, Inc., Case No. 23-814, was part of a long-running dispute between the card companies and ATM operators about ATM fees.  In July, the D.C. Circuit upheld the certification of three different Plaintiff classes over the card companies’ argument that the district court had failed to perform a “rigorous analysis” about whether class-wide issues predominated.  Nat’l ATM Council, Inc. v. Visa Inc., 2023 WL 4743013 (D.C. Cir. 2023).  Although it noted that the district court’s analysis was “notably terse,” the D.C. Circuit found no error in the lower court’s holding that Plaintiffs need only demonstrate a “colorable” method of proving class-wide injury and that the Plaintiffs’ evidence satisfied that test.  Rejecting the card companies’ argument that Plaintiffs’ class-wide injury methodology failed to weed out uninjured class members, the court observed that “Defendants’ contention that their model showing unharmed members is more accurate and credible than Plaintiffs’ different models showing that all members were harmed is … precisely the kind of material factual dispute” that should be resolved at the merits, not class certification, stage.  Id. at *11.    Continue Reading Supreme Court Declines to Wade into Class Certification “Predominance” Issue

Environmental, social, and corporate governance (ESG) initiatives have become increasingly important in today’s business setting.  Increased awareness and heightened scrutiny of ESG-related issues, combined with third-party litigation funding, has led to a surge in ESG-related litigation and enforcement actions as consumers, regulators, and investors seek to hold companies accountable for claims about their environmental and social impact.  

This post explores the emerging trends shaping the landscape of ESG litigation, which are increasingly centralized in courts in the District of Columbia.  Such claims are often brought by nonprofit organizations seeking to take advantage of local consumer protection laws which they claim allow them standing to sue.Continue Reading A Closer Look: Developing Trends in ESG Litigation

In a short, unanimous opinion on April 12, 2024, the Supreme Court shut the door on “pure omission” claims under Rule 10b–5 and made clear that the Rule is limited to claims based on false or misleading statements.

The case, Macquarie Infrastructure Corp. v. Moab Partners, L.P., concerns alleged omissions in Defendant Macquarie’s SEC filings related to its subsidiary’s operation of bulk liquid storage terminals.  In 2016, the United Nations’ International Maritime Organization issued a regulation limiting this subsidiary’s ability to store high-sulfur fuel oil, its single largest product. Though the regulation was set to take effect in 2020, Macquarie did not discuss the regulation in its public filings.Continue Reading Supreme Court rejects pure omission claims under SEC Rule 10b–5

The Northern District of Illinois recently denied certification to several proposed classes of purchasers of a seizure drug called Acthar in City of Rockford v. Mallinckrodt ARD, Inc., No. 3:17-cv-50107, 2024 WL 1363544 (Mar. 29, 2024).  Class plaintiffs had alleged that defendant Express Scripts, a drug distributor, conspired with Mallinckrodt, a drug manufacturer, to raise the price of Acthar through an exclusive distribution arrangement.  In denying certification to the damages classes, the court determined that plaintiffs had not met Rule 23(b)(3)’s predominance standard because they lacked a reliable economic model showing that damages were “capable of measurement on a classwide basis,” as required by Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013).Continue Reading Court Denies Class Certification in Antitrust Case Based on Expert’s Reliance on Unsupported Assumptions in Damages Model

Another federal district court has dismissed a putative class action complaint asserting that an online retailer’s chat feature violated the users’ privacy under the California Invasion of Privacy Act (“CIPA”), Cal. Penal Code §§ 630 et seqSee Garcia v. Build.com, Inc., Case No. 22-cv-1985-DMS-KSC (S.D. Cal. Mar. 29, 2024), ECF 37. Continue Reading Federal Court Dismisses Class Action Asserting California Wiretapping Claim Based on Website Chat Feature

Defendants in privacy class action lawsuits increasingly face assertions by plaintiffs and putative class members that they should be awarded statutory penalties that vastly exceed any purported actual damages. A recent decision under the False Claims Act reinforces the constitutional limitations plaintiffs may face in pursuing these outsized awards.

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A federal judge in the Southern District of California recently granted Hwareh.com’s motion to dismiss a proposed class action claiming that third-party source code on its website unlawfully routed information about consumer information to that third party.  See Zarif v. Hwareh.com, Inc., No. 3:23-cv-00565-BAS-DEB (S.D. Cal.).  The court found that the plaintiff—whose claims included asserted violations of the Federal Wiretap Act, 18 U.S.C. § 2510 et seq., and the California Invasion of Privacy Act, Cal. Pen. Code § 631—failed to establish that the court had personal jurisdiction over Hwareh.com, an online pharmacy.  Hwareh.com is incorporated in Delaware and maintains its principal place of business in Missouri, but the plaintiff alleged that its website was available in California and that it maintained a non-resident pharmacy license in the state.  The court’s decision is the latest in a series of decisions clarifying personal jurisdiction in the context of privacy claims.Continue Reading Federal Court Dismisses Wiretapping Claims Against Pharmacy for Lack of Personal Jurisdiction

In Elegant Massage, LLC v. State Farm Mutual Automobile Insurance Co., 95 F.4th 181 (4th Cir. 2024), the Fourth Circuit took the unusual step of exercising interlocutory appellate jurisdiction over an order denying a motion to dismiss.  Having granted a petition for interlocutory review under Federal Rule of Civil Procedure 23(f) of a class certification order, the court concluded that its review of the class order required it also to review the district court’s earlier denial of the defendant’s motion to dismiss. Continue Reading In Rare Move, Fourth Circuit Exercises Pendent Jurisdiction Over Non-Final Order

A court in the Southern District of New York recently denied plaintiffs’ motion for class certification on adequacy grounds in a suit challenging the labeling of “Maximum Strength” Robitussin cough syrup.  See Woodhams v. GlaxoSmithKline Consumer Healthcare Holdings (US) LLC (S.D.N.Y. Mar. 21, 2024).Continue Reading SDNY Court Denies Class Certification in Suit Challenging Robitussin “Max Strength” Labels