While plaintiffs’ attorneys seek to streamline the filing of class actions under the Telephone Consumer Protection Act (“TCPA”), a recent court decision serves as a reminder that there are clear limits to a plaintiffs’ ability to recover statutory damages under a theory of vicarious liability. On May 18, 2015, the U.S. District Court for the Central District of California awarded summary judgment to defendant UTC Fire & Security Americas Corporation, Inc. (“UTC”), finding the security equipment manufacturer could not be held vicariously liable for the actions of its authorized dealers under any theory of agency. The decision marks a win for companies that operate using a dealer or retailer network to distribute their products, in a legal area that is a noted favorite of class action lawyers, and provides an example for how companies may avoid vicarious liability under the TCPA by carefully structuring the way in which they authorize resellers to use and advertise their product.
Continue Reading Security Equipment Manufacturer Secure in Its TCPA Defense: Court Finds Company Not Vicariously Liable for Authorized Dealer’s Alleged TCPA Violations
TCPA “Pick Off” Play – Supreme Court to Consider whether a Settlement Offer to Named Plaintiff Moots Class Action
The Supreme Court will decide whether a defendant can “pick off” the named plaintiff in a Telephone Consumer Protection Act (TCPA) class action – and moot the putative class claims – by making a Rule 68 offer of judgment before the putative class representative files a motion for class certification. Thus, the Supreme Court could streamline putative class actions by eliminating the need for plaintiffs to file “protective” motions for class certification at the same time they file their complaints. The case, Gomez v. Campbell-Ewald Co., also involves important vicarious liability issues that litigants routinely address in TCPA class actions.
In Gomez v. Campbell-Ewald Co., the defendant marketing consultant allegedly arranged to send the plaintiff unsolicited text messages in violation of the TCPA through a third-party caller called Mindmatics, purporting to recruit for the U.S. Navy. Before the plaintiff filed a motion for class certification, Campbell-Ewald offered to pay the plaintiff $1,503.00 per violation, in full satisfaction of the plaintiff’s claims. The plaintiff allowed the offer to lapse and sought class certification. Campbell-Ewald argued to the United States District Court for the Central District of California and then to the Ninth Circuit that its Rule 68 offer of judgment mooted the plaintiff’s individual and putative class claims. The Ninth Circuit disagreed with the defendant, aligning the decision with other circuits which have also held that a rejected Rule 68 offer does not moot claims if the offer is made prior to filing or, or ruling on, a motion for class certification. The Seventh Circuit, in contrast, held in Damasco v. Clearwire Corp. that a Rule 68 offer made before the plaintiff had filed a motion for class certification mooted the class claims.
Continue Reading TCPA “Pick Off” Play – Supreme Court to Consider whether a Settlement Offer to Named Plaintiff Moots Class Action
Designer Duds? Class Action Alleges a “Made in USA” Fashion Faux Pas
Is the “surf up” again in California for “Made in USA” class actions? A prior wave of “Made in USA” class action litigation in California crashed up against a number of legal difficulties, including how one calculated damages for buying a product “mislabeled” as “Made in USA.” However, the California Supreme Court in the Kwikset case ultimately resolved this issue largely in plaintiffs’ favor.
Now a class action complaint has been filed on June 9, 2014, against designer jean company Citizens of Humanity (“COH”) and Macy’s Inc. (“Macy’s”) which alleges that the jeans were falsely labeled as “Made in USA” when, in fact, many of the components were imported. This follows on the heels of a settlement in a class action filed earlier this year against Lifetime Products, Inc. and The Sports Authority, Inc. for allegedly misusing the “Made in USA” label on basketball products. Defendants agreed to a permanent injunction and to provide gift cards or a basketball to each class member ranging in value from $12.50 to $30 and to make annual charitable contributions of $325,000 over a five-year period.
Continue Reading Designer Duds? Class Action Alleges a “Made in USA” Fashion Faux Pas
Absence of Federal Standard Greases Way for Another “Natural” Class Action
Another consumer class action over allegedly false and misleading “natural” claims survived a motion to dismiss in the Southern District of New York on May 15, 2014. At issue in Ault v. J.M. Smucker Co. is whether “All Natural” claims made on labels of Smucker’s Crisco branded vegetable oils are false and misleading. The plaintiffs allege in their complaint that the claim is misleading for two reasons: 1) the oils are derived from genetically modified vegetables which are not natural, and 2) the oils are so heavily processed that they bear no chemical resemblance to the ingredients from which they are derived.
In response to the complaint, Smucker’s filed a motion to dismiss on the grounds that FDA policies and regulations preempt the plaintiffs’ state false advertising claims, and argued that the Court should decline to enter that “All Natural” debate and defer to the FDA as it has primary jurisdiction. On May 15, 2014, Judge Crotty of the Southern District of New York denied the motion to dismiss.
Continue Reading Absence of Federal Standard Greases Way for Another “Natural” Class Action
POM Wonderful’s Decertification Decision Will Be Hard to Swallow for the Plaintiffs’ Class Action Bar
On March 25, 2014, Judge Dean Pregerson, of the U.S. District Court, Central District of California, decertified a nationwide class of consumers in a class action brought against POM Wonderful LLC over allegedly false and misleading health claims related to its pomegranate juice. Judge Pregerson’s decertification order is significant because it makes class certification more difficult for plaintiffs, requiring that: 1) Plaintiffs comport with the rigorous analysis of class-wide damages set forth in the recent U.S. Supreme Court decision of Comcast Corp. v. Behrend, 133. S. Ct 1426 (2013); and 2) Plaintiffs demonstrate that the putative class is ascertainable, which has been the recent focus of many courts, many of whom have denied class certification on that basis. See, e.g., Carrera v. Bayer Corp., 727 F. 3d 300 (3d Cir. 2013). Also see Greg Sater’s recent post, Chipotle Case Gives Hope Against Class Actions.
Continue Reading POM Wonderful’s Decertification Decision Will Be Hard to Swallow for the Plaintiffs’ Class Action Bar