Topic: Consumer class actions

Subscribe to Consumer class actions RSS feed

CCPA enforcement trends–what we are seeing

Despite limitations on private rights of action within the California Consumer Privacy Act, many were concerned that the plaintiffs’ bar would find creative ways to skirt CCPA’s boundaries. Four months into CCPA enforcement, those concerns have been borne out. We are seeing three worrisome enforcement trends:

  • Expanding the CCPA’s private right of action;
  • Cloaking a CCPA claim as a California Unfair Competition law violation; and
  • Retroactive application of the CCPA to conduct pre-dating January 1, 2020.

Check out our detailed analysis here.… Continue Reading

Court tosses consumer class action based on alleged Prop 65 violation

As a California appellate court once stated, and many businesses find out to their dismay, Proposition 65’s enforcement procedures make “the instigation of Proposition 65 litigation easy—and almost absurdly easy at the pleading stage and pretrial stages.” Consumer Defense Group v. Rental Housing Industry Members, 137 Cal. App. 4th 1185, 1215 (2006). A recent ruling from a federal court has found that despite Prop 65’s low bar, plaintiffs in a consumer class action lawsuit cannot bootstrap an alleged Proposition 65 violation into the basis for California consumer protection claims, at least not without first complying with Prop 65’s pre-suit … Continue Reading

Braille on gift cards: ADA accessibility issue or novel shakedown?

As retailers and restaurants are well aware, the proliferation of website accessibility claims filed by serial plaintiffs’ counsel is not slowing down. But now a new wave of lawsuits—Braille on gift cards—is flooding the New York federal courts.

Recent cases

Starting in October 2019, a handful of plaintiff’s counsel have filed more than 200 putative class action lawsuits on behalf of visually impaired plaintiffs in the Southern and Eastern Districts of New York against retailers and restaurants based upon their failure to sell gift cards with Braille. These lawsuits allege that blind or visually-impaired consumers are deterred from visiting retailers … Continue Reading

FDA clarifies position on CBD, cracks down on 15 online stores

The U.S. Food and Drug Administration issued a revised consumer alert on Cannabidiol (CBD), warning that the agency is aware that some companies are marketing CBD products in ways that violate the federal Food, Drug and Cosmetic Act (FD&C Act), and that may put the health and safety of consumers at risk. The FDA also sent a new round of warning letters to 15 companies in an effort to crack down on illegal selling practices.

The CBD industry is one of the fastest growing markets in the US. CBD-infused ointments, gummy bears, beauty creams, baby oil, dog treats—you name it, … Continue Reading

Specific jurisdiction ruling gives companies a new weapon in combatting mass consumer actions

On June 19, 2017, the United States Supreme Court limited the ability of plaintiffs to pursue mass consumer actions in state court. In Bristol-Myers Squibb Co. v. Superior Court, the Supreme Court limited personal jurisdiction over corporations in state courts on due process grounds, holding that persons purportedly injured outside of the forum state did not have jurisdiction to prosecute claims against a corporation who was not a resident or incorporated in that state.

The consolidated actions sought relief in California state court for 678 plaintiffs who used a BMS drug called Plavix – the vast majority of whom … Continue Reading

Your product labels could be deceptive based on what’s on a competitor’s labels

In what seems to be an ever-expanding zone of liability for false advertising claims on food products, the Ninth Circuit ruled this week that “external facts” – aka what a competitor does or does not put on their labels – can make the labels of another product misleading by implication.

In Bruton v. Gerber, plaintiff Natalia Bruton alleged that labels on Gerber baby food products advertising nutrient and sugar content were impermissible under FDA regulations (thereby creating a UCL unlawful advertising claim). Bruton’s theory of deception was a combination of two factors: 1) presence of “attractive label” claims such … Continue Reading

ALERT: Merchants face new wave of class actions alleging excessive shipping charges

Recently filed complaints seemingly forecast a new type of class action in California courts: consumer protection claims based on allegations that merchants are overcharging consumers for shipping and delivery charges. Such claims have the potential to affect all companies selling consumer goods online or by mail order.

Even though there is no specific statute forbidding merchants from charging delivery fees that exceed the actual costs of shipping, the new complaints assert that the practice violates California Unfair Competition Law and Consumer Legal Remedy Act, based on ethical guidelines promulgated by the Direct Marketing Association, which state that “shipping or Continue Reading

Do California 998 settlement offers have legs in class actions?

If you litigate in California, chances are you have come across the CCP 998 settlement offer. Presenting the proverbial “carrot and stick,” 998 offers force plaintiffs to effectively “bet”  on their success in a case. If a plaintiff refuses a 998 settlement offer, their ability to recover costs and attorneys’ fees (if available) will be cut off after the date of the offer if they do not receive an award higher than the amount of the 998 offer. Not surprisingly, such offers can be important tools in aggressively pursuing settlement and forcing plaintiffs to realistically evaluate the worth of … Continue Reading

Discount class action theories broaden in California

The plaintiffs’ bar has a new angle on retailer discounting cases, which attack California retailers who discount merchandise by showing an “original” or “former” price next to a much lower, discounted price to imply tremendous savings.

Initially, plaintiffs relied on California’s False Advertising Law, Unfair Competition Law, and the Consumer Legal Remedies Act to allege that consumers are deceived into purchasing items based on allegedly “false” discounts. The FAL specifically prohibits discount “advertising” of this sort unless the former price was “the prevailing market price… within three months” prior.

Using these cases as a springboard, plaintiffs have recently developed a … Continue Reading

Second Circuit guts jury verdict with post-trial decertification

Given the low probability that a class action will go to trial and the high probability that a settlement favorable to plaintiffs and their attorneys will be reached after class certification, there is a consistent “race to certification” in many consumer class action matters. The plaintiffs’ bar frequently frames claims with an eye towards meeting Rule 23 requirements, with little regard to whether or not the evidence actually exists to prove the merits of the claims.

While many defendants are disheartened when a class is certified, a recent decision out of the Second Circuit reminds that certification is not … Continue Reading

FDA says evaporated cane juice labels are false and misleading

On Wednesday, the FDA issued guidance on the use of the phrase “evaporated cane juice” in order to “enhance consumers’ ability to make informed choices among sweeteners by promoting accurate and consistent labeling.” In an opinion that will have far-reaching implications in the food industry, the FDA concluded that “the term ‘evaporated cane juice’ is false or misleading because it suggests that the sweetener is a ‘juice’ or is made from ‘juice’ and does not reveal that its basic nature and characterizing properties are those of a sugar.”

In recent years, food manufacturers have used the phrase “evaporated cane juice” … Continue Reading

Southern District of California rejects medical sling class bid

Sometimes, although it seems like not very often, California courts do find that consumer fraud cases are not appropriate for class certification. Take, for example, the decision that came down last week out of the Southern District of California.

In Mezzadri v. Drive Medical, plaintiff claimed that defendant misrepresented the quality and the materials used to make its full body patient slings (used to transport patients who are unable to walk). Plaintiff claimed he purchased a medical sling based on false statements seen while conducting online research, and that these statements led him to purchase a sling that was … Continue Reading

Chobani motion to dismiss unceremoniously vacated

Last month, the Ninth Circuit, in an opinion scant on explanation, vacated the order of Judge Koh in the Northern District of California dismissing false advertising class action claims Chobani, LLC, the maker of Chobani Greek Yogurt.

The class action alleged that Chobani falsely advertised its yogurt in two ways: 1) by referring to the sweetener in the yogurt as “evaporated cane juice,” when it is really just “sugar” or “dried cane syrup” and 2) representing that the yogurts contain “[o]nly natural ingredients,” when they actually include artificial colors.

In February 2014, Judge Koh issued an opinion dismissing the Continue Reading

Coca-Cola requires proof of purchase to pay out class settlement for juice false ad suit

Last week, Coca-Cola reached a settlement in a consumer class action alleging that it falsely advertised its Minute Maid Enhanced Pomegranate Blueberry Flavored Blend of 5 Juices by creating the impression it was made primarily of pomegranate and blueberry juices, when it was actually composed mostly of cheaper apple and grape juices. These allegations by consumers are, essentially, a repeat of the claims brought against the soft drink company by its competitor Pom Wonderful, which resulted in an important Supreme Court decision.

On February 26, Plaintiff Niloofar Saeidian filed a request for Judge Otero of the Central District of … Continue Reading

Ninth Circuit reverses dismissal of another consumer class action against Hain Celestial

In what is becoming a bit of a pattern, the Ninth Circuit has again ruled that a lower court’s dismissal of a consumer class action against The Hain Celestial Group was the wrong result.

On December 5, 2013, Judge Manuel Real dismissed without leave to amend claims by Alessandra Balser and Ruth Kresha that Hain Celestial falsely advertised body wash, lotion, and hair care products as “natural” when the products allegedly contain unnatural, synthetic ingredients. Judge Real held it was implausible that plaintiffs could believe the products were “existing in or produced by nature” because shampoos and cosmetics … Continue Reading

UPDATE: Seventh Circuit ascertainability holding petitioned to the Supreme Court

We previously reported on the Seventh Circuit’s decision in Mullins v. Direct Digital, LLC, in which the Court systematically refuted every policy argument made to support holdings like the Third Circuit’s opinion in Carrera, requiring a plaintiff to demonstrate that class members can be identified through a reliable and administratively feasible manner in order to meet the implied ascertainability requirement for class certification.

Since our last post, Direct Digital has petitioned the ruling to the Supreme Court, and the opposition to the request is due to be filed no later than December 28, 2015. Moreover, the Sixth Continue Reading

Seventh Circuit intensifies ascertainability split

Last month, the Seventh Circuit further added to the tension between the circuits regarding the interpretation and application of Rule 23(f)’s shadow ascertainability requirement. As we previously reported, we await a ruling in the Ninth Circuit on this issue; it is almost certain that this recent opinion will now be added to the mix affecting that ruling.

The case, Mullins v. Direct Digital, LLC, is a consumer class action alleging that the product Instaflex Joint Support is falsely advertised to “relieve discomfort,” “improve flexibility,” “increase mobility,” “support cartilage repair,” as well as being “scientifically formulated” and “clinically tested … Continue Reading

UPDATE: Bill to amend California’s “Made in USA” law gets one step closer to becoming law

Following up on our recent post about two bills pending in the California legislature that would amend California’s “Made in USA” law—yesterday the Assembly passed SB 633.  Next, SB 633 will be sent back to the Senate for a concurrence vote, and assuming the Senate approves, the bill would then go on to the Governor’s desk for signature.  The Legislature goes on summer recess today, so we won’t find out the fate of SB 633 for at least another month.  So far that bill has not received any “no” votes, either in committee or on the floor of … Continue Reading

Changes coming to California’s “Made in USA” law?

California’s “Made in the USA” law imposes strict standards on when products may be labeled “Made in the USA.”  This strict standard has resulted in recent litigation against companies whose products allegedly contain some (albeit relatively minor) foreign components.  But, the Legislature is seeking to amend the law to loosen this standard with two pending bills—AB 312, which has the Assembly has already approved, and SB 633, which the Senate has already approved.

AB 312

In May, the Assembly approved, AB 312, which would align the California law with the Federal Trade Commission standard, and would allow “Made … Continue Reading

Court rules California “Made In USA” claims not actionable if only on product websites

We have been following California’s “Made in the USA” standard and recent cases interpreting it. While courts so far have been reluctant to dismiss claims at the pleading stage, last week a federal judge dismissed a class action claiming Lands’ End violated California’s “Made in the USA” standard.

In Oxina v. Lands’ End, Inc., plaintiff filed a false labeling claim because she ordered a necktie from the Lands’ End website described as “Made In USA”, but received a necktie that was identified as “Made In China.” The court granted Lands’ End’s motion to dismiss (with leave to amend) on the … Continue Reading

Supreme Court will determine whether class action plaintiffs can be bought off

The Supreme Court has granted cert to decide whether or not class action defendants can make the claims of named plaintiffs invalid by offering early settlements.

This practice, known as “mooting” an action or the “pick-off” strategy, occurs when, prior to class certification, a defendant offers a class representative a full settlement, completely covering any of the named plaintiff’s damages. Even if the named plaintiff does not accept the offer, defendants may then argue that the claims are moot because full relief was offered (and, therefore, no need for a lawsuit) and seek dismissal.

The Supreme Court is poised to … Continue Reading

California Court of Appeal finally issues guidance to retailers on privacy issue for credit card customers

California’s Song-Beverly Credit Card Act, Civil Code section 1747.08, prohibits retailers from requesting or requiring “personal identification information” (PII) in connection with consumer credit card transactions and then recording that information.  Following a February 2011 California Supreme Court opinion in Pineda v. Williams-Sonoma Stores, Inc., plaintiffs filed hundreds of putative class action complaints against retailers throughout California alleging violations of the Act.  But, the extent of the Act’s prohibition in the context of requests for PII at the point of sale in brick and mortar stores has been unclear.

Confusion

The question is whether the Act prohibits … Continue Reading

UPDATE: Court approves Red Bull settlement

Although we were wary that caps on the Red Bull settlement could ultimately be rejected by the court based on dilution concerns, on May 12, 2015, Judge Katherine Polk Failla out of the Southern District of New York approved the settlement and entered an order of dismissal with prejudice in both Red Bull class actions.

The settlement originally intended to provide $10 checks or $15 vouchers to claimants, with the amount of Red Bull’s payout capped at $13 million. However, as soon as the proposed settlement was announced to the public, the claims website was flooded with traffic and quickly … Continue Reading

Bourbon need not be “made by hand” to be advertised as “handmade”

Proving that a false advertising claim can be thrown out on a motion to dismiss (despite recent cases in California indicating the contrary), a Florida federal judge tossed false advertising claims brought against Maker’s Mark Distillery, Inc., determining that consumers could not possibly interpret the phrase “handmade” – used to market the company’s bourbon whiskey – to mean the product was made “predominantly by hand.”

Plaintiffs filed their complaint in December 2014, alleging there was nothing “handmade” about the bourbon whisky “under any definition of the term.” Plaintiffs argued the advertising was deceptive because the bourbon was made “via a … Continue Reading

LexBlog