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May 2017

Count Down and Gear Up for the Strict Requirements of the EU General Data Protection Regulation

By Nancy C. Libin

DataAs of May 25, 2018, all companies that offer goods or services to residents of the European Union (“EU”) will be required to comply with the EU General Data Protection Regulation (“GDPR”).

Companies must begin to get their houses in order now, however. The GDPR will impose strict requirements and hefty penalties for non-compliance, with fines running as high as 4% of a company’s total global annual turnover. Companies will have to conduct thorough assessments of the personal data that they collect, maintain, use, and disclose, as well as review their contracts with vendors and their policies and procedures with respect to such data, so that they can make any necessary changes well before the GDPR becomes effective.

Below are brief descriptions of key provisions of the GDPR and what they mean for U.S. companies:

Affects U.S. Companies That Do Business in the EU or That Process Data on Behalf of Such Companies. The GDPR will apply to an extremely wide range of companies: data controllers (entities that, alone or with others, determine how personal data will be processed and for what purpose) and data processors (entities, such as cloud providers, that process personal data on behalf of a data controller) that (1) are established in the EU, or (2) that are not established in the EU, but that offer goods and services to EU residents or track EU residents online (e.g., for marketing purposes).

Continue reading "Count Down and Gear Up for the Strict Requirements of the EU General Data Protection Regulation " »

Whirlpool Defeats Multi-State Certification Bid Reliant on “Kitchen Sink” Expert Report

Storm_Hurricane_iStock_000022250449XLargeBy Reena R. Bajowala 

Recently, a federal court in Chicago rejected an attempt to certify multi-state classes of consumers who purchased allegedly defective ovens manufactured by the Whirlpool Corporation.  The plaintiffs claimed that the ovens had a design defect rendering them inoperable after one or more self-cleaning cycles.  Plaintiff moved for class certification, relying almost exclusively on the opinion of proffered expert Albert de Richemond, a professional engineer with a master’s degree from Virginia Tech, as proof of a common defect in all ovens purchased by class members (i.e, as proof of commonality).  One of the key lessons from Wal-Mart Stores Inc. v. Dukes, 564 U.S. 338, 350 (2011), was that commonality “is not the raising of common questions – even in droves – but rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation.”

De Richemond’s report addressed a confluence of alleged defects relating to the thermostat, the thermo-regulator, lack of proper insulation, heat-resistance of component parts, excessive temperatures for the self-cleaning cycle, insufficient cooling fans and various ineffective fuses.  The class representatives’ class certification and Daubert briefing generally followed suit, referring to this “undifferentiated mass of potential problems” as the defect.  

Continue reading "Whirlpool Defeats Multi-State Certification Bid Reliant on “Kitchen Sink” Expert Report " »

Class Action Goes “To The Dogs” When Plaintiff Fails to Sufficiently Allege Damages from “Made in the USA” Claim

By Reena R. Bajowala

Dog-foodA federal court in Chicago recently dismissed a lawsuit brought by Dale Sabo, an Illinois resident seeking to represent a multi-state class of consumers who bought defendant Wellpet LLC’s pet food products. Sabo alleged that the products were falsely labeled “Made in the USA,” but instead contain vitamins and minerals sourced from outside the United States in violation of Illinois, California, New York and six other state consumer fraud statutes.  Sabo alleged that he places a premium on American-made products and is willing to pay more for them.  In addition, he claims that a majority of Americans feel the same way, particularly given recent reports of recalls linked to foreign-sourced ingredients. 

To prevail on a consumer fraud claim, though, a plaintiff must plead actual damages, i.e., actual pecuniary loss.  The court found that plaintiff failed to do so. While Sabo alleged that he “paid more for the products than they were actually worth,” the court held that he failed to provide the factual foundation “to moor his subjective estimation of the products’ worth.”  Neither did he allege that products that lacked domestic-source designations were less expensive.  As a result, “while he alleges that he (and other consumers) are willing to pay a premium for goods made in the United States, he stops short of alleging that he in fact paid more for defendant’s . . . American-made” products.  Because the damages allegation was too speculative, the Court dismissed the lawsuit.

Sabo v. Wellpet, LLC, 2017 WL 1427057, ___ F. Supp. 3d ___ (N.D. Ill. Apr. 4, 2017). 

Cybersecurity Issues Influence World Events

Pexels-photo-326522By Mary Ellen Callahan

Two events affecting cybersecurity will have both immediate and lasting impact on cybersecurity, cyber policy and cyber requirements for companies for years to come.  

Wannacry Ransomware Attack

The event with the most immediate impact on companies and inter connectivity is the ransomware attack which started Friday May 12, and as of time of publication affected at least 230,000 servers in 150 countries. The WannaCry attack is the most widespread and simultaneous cyber attack, locking up servers and demanding payment of $300 per server (payable in bitcoin).

The WannaCry attack allegedly exploited vulnerabilities that were disclosed in March 2017.  The ransomware capitalized on certain exploits in standard Microsoft code.

The source of the exploit is less relevant than the direct impact on companies and servers that had not patched the vulnerability since Microsoft released an update in April.  Those companies were held captive, often shutting down communications and contact until a decision to pay was made. 

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Spate of Deceptive Luxury Outlet Pricing Suits Slows, But is its End in Sight?

New-Update-IconThe past few years have seen a dramatic increase in class actions against luxury fashion brands concerning the practice of affixing allegedly deceptive reference prices on goods sold in outlet stores.  According to the plaintiffs in these suits, certain brands mislead consumers by including a “Was,” “Manufacturer Suggested Retail Price,” or similar reference price on the tags of articles made exclusively for sale in outlet stores.  Since made-for-outlet goods were never actually sold at the reference price, plaintiffs allege that the reference prices convey fictitious price reductions to entice consumers in violation of various consumer protection statutes.  

There are indications that this line of cases is on the decline.  But is its end truly in sight?

In an article written for the Luxury Law Alliance Newsletter, Jenner & Block Partner Jeremy M. Creelan and Law Clerk Nicolas G. Keller investigate the answer to this question while providing recommendations to luxury brands that operate outlet stores. 

Continue to their article, “US Outlet Pricing Class Action Update – Another Dismissal but No Death Knell”