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Liz Clark Rinehart

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Liz Clark Rinehart represents clients in complex class action and commercial litigation matters arising from breach of contract, misappropriation of trade secrets, violations of consumer protection statutes, professional licensing, arbitration, employment contracts, and other business torts. Liz also advises clients in litigation involving the Telephone Consumer Protection Act (TCPA), Lanham Act, and other Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), and state attorney general enforcement matters. Her litigation experience includes pre-litigation strategy, negotiation, trial, and appellate practice.

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For those embroiled in Telephone Consumer Protection Act (TCPA) class action litigation, the sum of the damages may not necessarily equal the whole.

In Wakefield v. ViSalus, Inc., the plaintiff and certified nationwide class obtained a jury verdict that defendant made 1,850,440 prerecorded message calls without the then-heightened prior express consent to make such calls. Because the TCPA’s minimum statutory damages are $500 per unlawful prerecorded message call, the damages award was a whopping $925,220,000.

After trial, ViSalus challenged, among other things, the damages award as unconstitutionally excessive. Specifically, ViSalus did not argue that the TCPA’s $500 per violation statutory penalty is unconstitutional in a vacuum, but, rather, that the “aggregate award” is so “severe and oppressive” that it violated ViSalus’s due process rights. Last Thursday, the Ninth Circuit agreed.Continue Reading Ninth Circuit Rules That TCPA Aggregated Statutory Damages Might Be Unconstitutionally Punitive

By a unanimous 5-0 vote, the Federal Trade Commission last week released a staff report that sheds light on the agency’s enforcement positions and priorities regarding digital “dark patterns,” which the FTC defines as interface designs used to manipulate consumers into making decisions about purchases and personal data that they otherwise would not have.

Stemming from a public workshop the FTC hosted in April 2021, the report, “Bringing Dark Patterns to Light,” uses examples and illustrations to catalog and criticize numerous commonly seen practices in e-commerce, and includes an appendix describing types of dark patterns, while also stressing that dark patterns have a stronger effect, and by extension cause greater consumer harm, when they are used in combination, rather than in isolation.

Given Chair Lina Khan’s ambitious enforcement and policy goals for the agency, which we’ve previously discussed, anyone who engages with consumers online should consider the report both a reference and a warning.  Continue Reading The FTC Brings More Light to Dark Patterns in New Staff Report

Through a new interpretive rule announced this week, the Consumer Financial Protection Bureau (CFPB) has declared that digital marketing providers can be held liable under the Consumer Financial Protection Act (CFPA) if they engage in or substantially assist unfair, deceptive or abusive practices in advertising financial products on behalf of banks and nonbanks covered by the CFPA.

While service providers to “covered persons” under the CFPA are already subject to the Act, Congress carved out an exception for service providers offering or providing to covered persons “time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media.” The CFPB’s new rule limits the applicability of that exemption to digital marketing providers such that the “electronic media” prong is very nearly void.Continue Reading CFPB Warning to Consumer Financial Services Digital Marketing Providers

We’ve previously detailed the problem with the Florida Telephone Solicitation Act (FTSA), which, on its face, expansively prohibits the use of “an automated system for the selection or dialing of telephone numbers or the playing of a recorded message when the connection is completed” without the recipient’s prior express written consent. Fla. Stat. § 501.059(8)(a) (emphasis added).

Thus, arguably, even if a live human manually presses each digit in a ten-digit telephone number to place a telemarketing call or to send a marketing text message, if a system automatically selected those numbers for the representative to dial, it might be considered “autodialing” under the FTSA. (We have our doubts but, then again, no one refers to us as “Judges Blynn and Rinehart” . . . yet(?).) By comparison, the federal Telephone Consumer Protection Act’s (TCPA) definition is more restrictive and industry-favorable, requiring that telephone numbers be randomly or sequentially generated and called without human involvement. Dialing from a stored list of telephone numbers is not autodialing under the TCPA, as long as those numbers themselves are not pulled out of thin air.Continue Reading “Indefinitely Postponed and Withdrawn From Consideration”: Florida Telephone Solicitation Act Amendments Wait for Another Day

The Florida legislature gaveth (to the telemarketing plaintiffs’ bar) in July 2021 when it amended the Florida Telephone Solicitation Act (FTSA). That same state legislature might now taketh away and cure some of the class action abuses its amendments have created.

Last month, in the context of a deep dive into the legislative history of the FTSA, we previewed a major source of ambiguity in the statute that was exacerbated in July 2021. That was when Florida amended the statute to include a private right of action and uncapped statutory damages between $500 and $1,500 for each telemarketing call or text message that violates the FTSA’s autodialer provision.

Specifically, the FTSA prohibits placing telemarketing calls or sending marketing text messages with “an automated system for the selection or dialing of telephone numbers or the playing of a recorded message when the connection is completed” without first obtaining the recipient’s “prior express written consent.” Fla. Stat. § 501.059(8)(a).Continue Reading Florida Legislature to the Rescue? House Bill Proposed to Fix the Florida Telephone Solicitation Act’s Autodialer Provision

On September 22, 2021, FTC Chairperson Lina Khan published a memorandum to FTC staff urging the agency to unite behind her vision and priorities for the agency, and announcing that the elite vanguard leading Khan’s effort will be acting Bureau Directors Sam Levine and Holly Vedova, both of whom will become permanent directors of the Bureau of Consumer Protection and the Bureau of Competition, respectively. Khan has previously indicated that the FTC needs to throw off its bureaucratic chains of past approaches and practices and be more aggressive in enforcing both consumer protection and competition laws. Given the implicit and explicit criticism in her prior communications, the memorandum appears to be an effort to gather support among FTC staff for her approach. An overarching theme of the memorandum is that the FTC may be blurring the lines between the FTC’s consumer protection and competition missions by increasing collaboration between the Bureau of Consumer Protection and the Bureau of Competition. While many prior chairpersons have expressed this ambition, Khan appears ready to make that aspiration operational.

Chairperson Khan starts her strategic discussion by announcing that the agency will be taking a “holistic approach to identifying harms.” In elaborating on this “holistic approach,” she frequently combines references to individual consumers and businesses, and highlights nontraditional harms of anti-competitive activity, many of which are familiar to consumer protection, for example, disparate impact, privacy violations, and asymmetrical bargaining power. Her message is clear: the distinction between antitrust and consumer protection will no longer be as defined as it was in the past. Also clear are the consequences: once this boundary is eliminated, the FTC can use the merger review process to conduct discovery on consumer protection violations, perhaps hoping the cost and threat of that inquiry will deter merger activity.Continue Reading The Khan Manifesto

Session #1: When It’s All Over but the Shouting: How to Identify and Avoid Ethical Pitfalls during Settlement Negotiations

11:00 a.m. – 12:00 p.m. ET

As more cases are resolved through settlement, it is important to understand how you can negotiate settlement without falling into an ethical quagmire. What can you say (or not say)…

The Supreme Court recently plucked public access television out of your neighbor’s basement and clarified the state-action doctrine in Manhattan Community Access Corp. v. Halleck. The result has made it all the more important for content creators to understand the types of entities hosting their content. So let’s drop the blue screen and roll cameras because we’re live in 5-4-3-2-1.

The plaintiffs in Halleck alleged that MNN, the private nonprofit that manages the New York City public access channels, violated their First Amendment rights by restricting them from using the channels based on the content of their programs.Continue Reading “Public Access” isn’t a “Public Function”: No First Amendment Liability for Privately Managed Public Access Channels

Bimbo Bakeries and U.S. Bakery recently found out that consumer confusion, like politics, is local, and that “local” means what the local consumer says it means. Let’s unbraid this loaf.

In Bimbo Bakeries USA, Inc. v. Sycamore, No. 2:13-CV-00749, 2019 WL 1058234 (D. Utah Mar. 5, 2019), the jury originally awarded Bimbo $8,027,720 in damages on its false advertising claim against U.S. Bakery, which tried multiple times to convince the court that what makes bread “local” is really a matter of the seller’s opinion, or at least that claiming bread is “local” is mere puffery. According to U.S. Bakery, “local” is a geographical term, but not a geographically descriptive term entitled to Lanham Act protection, because “local” is not a specified location.Continue Reading Let’s Get This “Local” Bread!