Justin L. Portaz

Twitter May Face Trial for Alleged Tweet Spam

Mobile Apps iStock_000019512727LargeBy Daniel A. Johnson

Last month, Twitter was dealt a setback in a case where it is accused of sending unwanted texts with “recycled” phone numbers in violation of the Telephone Consumer Protection Act (TCPA).  The case is a putative class action titled Nunes, et al. v. Twitter Inc., No. 3:14cv02843 (N.D. Cal.), and on July 1, the court denied Twitter’s motion for summary judgment, and granted the plaintiff’s cross-motion. 

According to the court’s opinion, some Twitter users sign up to receive tweets via text message, but will later change phone numbers without bothering to inform Twitter.  This can be a problem because sometimes cell phone carriers “recycle” old discarded phone numbers, assigning them to new cell phone users, in which case the person with the recycled number may allegedly receive unwanted tweets.  The plaintiff in the case claims to have been in this position.  On that basis, she brought suit under the TCPA, which allegedly renders it unlawful to “make any call” —a phrase courts interpret as including texts—using an automatic telephone dialing system without the consent of the recipient. 

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FTC Insists on Data Security in LabMD Ruling

IStock_000002108956LargeBy Daniel A. Johnson

Last month, the Federal Trade Commission issued an opinion and order concluding that a clinical laboratory, LabMD, Inc., committed an unfair act or practice in violation of Section 5 of the FTC Act as a result of its allegedly “unreasonable” data security practices.  This FTC matter has been closely watched and may well have a significant impact as an official confirmation—or arguably a broadening—of the law’s scope.

According to the FTC’s opinion, LabMD operated as a clinical laboratory that conducted tests on patient specimen samples and reported the test results to its physician customers.  As a result, it had collected sensitive personal information for over 750,000 patients over the course of its operations, including their names, addresses, dates of birth, Social Security numbers, insurance information, diagnosis codes, and physician orders for tests and services.  According to the FTC, LabMD allegedly failed to institute “basic security practices” at least from 2005 until 2010.  For example, it allegedly lacked the following measures: “file integrity monitoring or intrusion detection system”; “adequate[] monitor traffic coming across its firewalls”; “data security training” for “its information technology personnel or other employees”; “a policy requiring strong passwords”; software “update[s]” to “protect against known vulnerabilities”; and overly broad assignment of “administrative rights” that permitted management employees to download peer-to-peer (P2P) file-sharing applications. 

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POM Seeks Supreme Court Review in FTC Ad Dispute

By Michael A. Scodro and Ramon Villalpando

On April 29, 2016, the Supreme Court will consider whether to grant the certiorari petition in POM Wonderful et al v. Federal Trade Commission (15-525), which asks the Court to identify the standard of review applicable to agency decisions that prohibit truthful, yet allegedly misleading, advertising.  The case arises out of an FTC complaint filed against POM claiming, among other things, that certain POM ads misleadingly implied that pomegranate juice was a scientifically-established treatment for disease.  An administrative law judge determined that a subset of the challenged ads contained this implied message, but the full Commission later banned a substantially larger group of ads, concluding that these ads made implied, misleading claims.  On appeal, the D.C. Circuit deferred to the FTC’s determination and upheld the ban, rejecting POM’s argument that—to safeguard POM’s First Amendment rights—the court should have reviewed the Commission’s decision de novo.

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Another Supreme Court Rebuff To California Arbitration Rule

PillarsBy Michael A. Scodro

Issued on December 14, 2015, DirectTV v. Imburgia represents the newest in a line of Supreme Court decisions applying the Federal Arbitration Act (FAA) to enforce contractual arbitration provisions.  Here, a service agreement between DirectTV and its customers requires arbitration of any future disputes and expressly waives either party’s right to initiate arbitration on a class-wide basis, with the exception that, if the “law of your state” prohibits the waiver of class arbitration, then the arbitration provision as a whole “is unenforceable.”  Two customers sued DirectTV, seeking to proceed in court rather than arbitration on the theory that the “law of” their “state,” California, does indeed prohibit class-action waivers in arbitration.  It was this theory—requiring application of the term “law of your state” to California—that divided lower courts and attracted Supreme Court review. 

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