Class Action Trends Feed

COVID-19 / Coronavirus Resources

We continue our efforts to do everything we can to support our clients as they navigate these times.  Our lawyers have provided practical insight into the legal and strategic challenges companies are facing.  To stay abreast of the quickly changing landscape, Jenner & Block has assembled a multi-disciplinary team, drawn from a variety of our practice areas and sector gro Noun_virus_1772453ups, to support clients as they navigate these uncharted waters.  We also continue to update our COVID-19 / Coronavirus Resource Center.  It provides helpful and timely information on the legal and strategic challenges companies are facing. Following is a list of some of those pieces.


First COVID-19 Securities Class Action Lawsuits Hit Cruise Line and Pharmaceutical Company

The rapid developments in the spread and economic impact of COVID-19 present particular challenges for officers and directors of public companies trying to manage their businesses while providing timely and truthful information to shareholders.  Over the last few days, shareholders have filed the first suits alleging that public companies materially misrepresented the impact of COVID-19 on their operations.  If history is any guide, derivative litigation alleging director and officer mismanagement is likely to follow.  Directors and officers of public companies should exercise great care in any public statements regarding the impact of COVID-19 on their businesses, and carefully consider and document the steps they are taking to oversee and respond to COVID-19 developments.

To read more, please click here.

COVID-19: "Employer Guidance for Addressing Possible Layoffs and Closures"

As employers grapple with staffing while dealing with the current COVID-19 crisis, they need to be mindful of their obligations under federal and state legislation addressing certain closures and layoffs.

Under the federal Work Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. §2101, covered employers must provide at 60 calendar days written notice of a covered “plant closing” or “mass layoff.”  WARN contains various definitions that establish:

  • Which employers must give notice;
  • When such notice must be given;
  • Who must receive notice;
  • What must the notice contain; and
  • When notice may be excused.

To read more, please click here.

COVID-19: Issues Facing the Airline Industry

As the novel coronavirus / COVID-19 continues to cause economic and social turmoil across the globe, the airline industry is suffering particularly acute hardships.  US carriers, including Delta, American, United and Southwest, have announced plans to cut their international routes by as much as 80% to 90% over the next several months, and domestic capacity is now being reduced by 20%-40%.  Foreign carriers have been impacted even more harshly.  Ryanair has announced it may have to ground its entire fleet, Air France has announced cuts into its flight schedule of up to 90% and British Airways has made similar cuts of up to 75%.  Furthermore, the aircraft that continue to fly are far from full.  Along with these flight reductions, airlines have grounded fleets of their larger aircraft, instituted hiring freezes and in some cases commenced layoffs, and US airlines are actively seeking ways to preserve cash on hand and obtain relief from the federal government.

To read more, please click here.

To stay abreast of developments through this unprecedented situation, continue to monitor the Consumer Law Round-Up blog and visit the resource library for helpful reference materials.


Ninth Circuit Sharply Limits Pre-Certification Discovery Into the Identity of Other Class Members

By:  Alexander M. Smith 

CaliforniaWhile the Ninth Circuit’s decision reflects a welcome concern about the use of pre-certification discovery to identify potential clients, it further exacerbates the stark contrasts between class action practice in California state courts and California federal courts.

In class actions, named plaintiffs frequently seek discovery from the defendant regarding the identities and contact information of other putative class members. While some view this practice as a normal method of obtaining information about other similarly situated consumers, others view it as a way for plaintiffs’ lawyers to fish for potential plaintiffs—either in new lawsuits, or as a “backup” in the event the court finds the original named plaintiff atypical or inadequate.

In spite of these concerns about fishing expeditions, California state courts have consistently permitted named plaintiffs in class actions to obtain pre-certification discovery regarding the names and contact information of other putative class members. Indeed, the California Supreme Court has repeatedly blessed this practice, holding that the interests of named plaintiffs in seeking relief on behalf of similarly situated consumers—and the broad scope of discovery under California law—weighed in favor of requiring defendants to identify other potential members of the class. See Pioneer Elecs. (USA) v. Superior Court, 40 Cal. 4th 360, 373-74 (2007); Williams v. Superior Court, 3 Cal. 5th 531, 547 (2017).

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Seventh and DC Circuits Allow Nationwide Class Actions with Claims of Out-of-State Plaintiffs after Bristol-Myers Squibb

   

By: Michael T. Brody, Gabriel K. Gillett, Howard S. Suskin and Brenna J. Field

New-Development-IconThis week, the Seventh and DC Circuits issued long-awaited and major decisions addressing a critical issue in class action litigation explicitly left unresolved in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017)—whether a federal court has jurisdiction to hear claims by out-of-state members of a putative nationwide class action whose claims lack a connection to the forum. Both courts said yes, albeit for different reasons. As other circuit courts weigh in, and possibly disagree, the Supreme Court will likely be called upon to resolve the issue.

In Bristol-Myers Squibb, 600 plaintiffs brought a coordinated mass tort action asserting California state law claims in California state court using a California rule for consolidating individual suits. But only 86 plaintiffs were California residents. The defendant argued that it was not subject to specific personal jurisdiction as to the non-resident plaintiffs’ claims because they and their claims lacked a sufficient connection to the forum. The Supreme Court agreed, but stated that it did not decide whether its holding applied to federal courts or to class actions. Since then, some federal district courts have taken this to mean that federal courts have specific personal jurisdiction over defendants facing claims by absent non-resident putative class members in any type of aggregated litigation while others have taken the opposite view, that this ruling limits the court’s jurisdiction to claims by plaintiffs (named and unnamed) with a connection to the forum.

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Zero Calories, Zero Plausibility: Ninth Circuit Affirms Dismissal of “Diet” Soda Class Action

By: Alexander M. Smith

SodaIn 2017, several plaintiffs began bringing lawsuits in California and New York premised on the theory that “diet” sodas — i.e., sodas sweetened with zero-calorie artificial sweeteners rather than sugar — were mislabeled because the sodas falsely suggested they would help consumers lose weight, even though aspartame and other artificial sweeteners are supposedly associated with weight gain.  Courts have routinely dismissed these lawsuits on one of two grounds:

  • Some courts have concluded that this theory of deception is implausible because reasonable consumers understand the term “diet” to mean that the soda has zero calories, not that it will help them lose weight.  See, e.g., Geffner v. Coca-Cola Co., 928 F.3d 198, 200 (2d Cir. 2019) (“[T]he “diet” label refers specifically to the drink’s low caloric content; it does not convey a more general weight loss promise.”); Becerra v. Coca-Cola Co., No. 17-5916, 2018 WL 1070823, at *3 (N.D. Cal. Feb. 27, 2018) (“Reasonable consumers would understand that Diet Coke merely deletes the calories usually present in regular Coke, and that the caloric reduction will lead to weight loss only as part of an overall sensible diet and exercise regimen dependent on individual metabolism.”). 
  • Other courts have dismissed these lawsuits on the basis that the scientific literature cited by the plaintiffs does not support a causal relationship between zero-calorie sweeteners and weight gain.  See, e.g., Excevarria v. Dr. Pepper Snapple Grp., Inc., 764 F. App’x 108, 110 (2d Cir. 2019) (affirming dismissal of lawsuit challenging labeling of Diet Dr. Pepper, as “[n]one of the studies cited . . . establish a causal relationship between aspartame and weight gain”).

The Ninth Circuit recently joined the chorus of courts that have rejected this theory of deception.  In Becerra v. Dr. Pepper/Seven Up, Inc., the district court dismissed a lawsuit alleging that Diet Dr. Pepper was mislabeled as a “diet” soda, both because the plaintiff had not alleged that consumers construed the term “diet” as a representation about weight loss and because the plaintiff had not sufficiently alleged that aspartame is associated with weight gain.  On December 30, 2019, the Ninth Circuit issued a published decision affirming the dismissal of this lawsuit.  Becerra v. Dr. Pepper/Seven Up, Inc. --- F.3d ----, 2019 WL 7287554 (9th Cir. 2019).

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US Franchise Dealers Latest to Sue Volkswagen In New Purported Class Action

Car ManufacturerBy Susan J. Kohlmann

The family of Ed Napleton, owners of three car dealerships in Illinois and Florida, sued Volkswagen in Chicago federal court on behalf of themselves and other franchise dealers similarly situated in connection with the VW emissions scandal. According to the complaint, the Napleton family opened its first car dealership on the south side of Chicago in 1931, and now owns more than 50 dealerships in 30 different locations in five states. Napleton purchased his first VW dealership in September 2015. Only three days later, the EPA issued its Notice of Violation and announced that VW had admitted that it had used a defective device on 11 million cars worldwide. The complaint alleges that “VW has engaged in policies with respect to franchise dealers that are in direct conflict with federal law designed to protect car dealers from unfair practices by vehicle manufacturers, as well as various franchisee protection laws of several states, causing direct and measurable harm to Plaintiffs. In addition to the their (sic) claims on behalf of all Volkswagen franchise dealers nationwide, Plaintiffs, on behalf of the Volkswagen franchise dealers located in Florida and Illinois, seek damages and injunctive relief under applicable state franchise protection laws.”  The Napleton class action lawsuit, the first to be filed on behalf of franchise dealers according to Napleton’s counsel, is in addition to the more than 600 lawsuits currently pending before U.S. District Judge Charles Breyer in San Francisco. Judge Breyer has been asked to approve three different classes: a consumer class, a reseller class and a class of non-Volkswagen dealers.


"Gambits” or Just Good Lawyering: Recent Class Action Cases in the Supreme Court

By Jill M. Hutchison

In a recent New York Law Journal Supreme Court 35719-0001 article, Partner Jeremy M. Creelan and Associate Daniel H. Wolf explore class action cases before the US Supreme Court.  They explain that the Court in recent years has raised the thresholds for class action plaintiffs and other plaintiffs to bring and sustain their claims.  “At the start of this Supreme Court term, the court appeared poised to continue this threshold-raising trend,” the authors observe.  They examine Campbell-Ewald Co. v. Gomez and Microsoft Corp v. Baker.  Associate Jacob D. Alderdice assisted with preparing the article. 

To read more on what they have to say, click here.


No resolution of growing rift on acceptable method for establishing ascertainability for small-dollar claims

By Jill M. Hutchison

IStock_000009666174MediumThe Supreme Court recently declined to wade into a developing circuit split on the question of just what constitutes an ascertainable class under Fed. R. Civ. P. 23(b)(3) class. In the case of many consumer products, particularly those that are consumable, like food, cosmetics, and supplements, the defendant is unlikely to have records to document individual customers’ purchases, and the consumers are unlikely to have kept receipts. In such cases, some court have permitted class members to self-identify by affidavit and have held that this identification method is acceptable to create an ascertainable class.

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Fitbit’s PurePulse Tracker at the Heart of New Consumer Fraud Lawsuit

Running Shoes on path
By Reena R. Bajowala

On January 5, 2016, three putative class plaintiffs – Kate McLellan, Teresa Black and David Urban – filed a nationwide class action lawsuit against Fitbit Inc. in the Northern District of California.  Fitbits are wrist-based devices that track fitness activity.  At the center of the suit is the PurePulse Tracker, which records the wearer’s heart rate during fitness activities.  The suit brings a panoply of consumer fraud claims – common law fraud, fraud in the inducement, breach of express and implied warranties, and violations of the California Unfair Competition Law and Consumer Legal Remedies Act, along with parallel claims under Colorado and Wisconsin business codes – but rests upon a central allegation.  To wit: plaintiffs claim Fitbit’s advertising representations regarding the consistency and accuracy of its PurePulse Trackers in recording heart rates during intense physical activity are false.  The Complaint also challenges Fitbit’s use of a post-purchase agreement, required to activate the PurePulse Tracker, as unconscionable. 

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US Supreme Court Predicting the Future For Class Actions

By Jeremy M. Creelan

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During its next term, the Supreme Court will consider whether class action defendants can end the cases against them simply by offering complete relief to individually named plaintiffs and offering nothing to the classes those plaintiffs purport to represent.[1]

The legal issue involves the intersection of two Federal Rules of Civil Procedure, namely the effect that Rule 68—which allows defendants to serve offers of judgment on specified terms and requires plaintiffs to respond to them—has on Rule 23, which governs class actions.  Some circuit courts have held that when a Rule 68 offer of judgment offers a plaintiff all the relief available to him, he can have no further interest in litigation and his legal claims are moot.  In the class action context, at least one circuit has further held that when a defendant makes a complete offer of judgment under Rule 68 before the plaintiff has moved for class certification, the plaintiff can have no interest in representing the class.  Under this analysis, the plaintiff’s class claims are moot in addition to his or her individual claims. 

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CAFA PRIMER

By Kate T. SpelmanCafa

This post is intended to give readers a basic understanding of the Class Action Fairness Act of 2005 (“CAFA”).  This post is not intended to be a comprehensive review or recitation of the law.

Many litigators perceive state courts as more plaintiff-friendly than their federal counterparts.  As such, plaintiffs often prefer litigating class action lawsuits in state court, while defendants prefer removing these suits to federal court.

However, federal courts have limited subject matter jurisdiction, as they can generally hear only two types of cases: (1) cases involving federal law (“federal question jurisdiction”), and (2) cases involving parties from different states where the amount in controversy exceeds

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