Class Action Defense Strategies

Consumer products companies increasingly do business online, which means they frequently collect, and sometimes share, customers’ personal information.  That practice makes Company Privacy Commitmentcompanies potential class action targets under various privacy laws.  Recently, the Ninth Circuit rejected three similar putative class actions under California’s “Shine the Light” law (STL), Cal. Civ. Code §§ 1798.83-1798.84, and Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200, et seq.  In three unpublished opinions, Baxter v. Rodale, No. 12-56925, 2014 WL 667474 (9th Cir. Feb. 21, 2014), King v. Conde Naste Publications, No. 12-57209, 2014 WL 607385 (9th Cir. Feb. 18, 2014) and a companion case, the same three-judge panel affirmed dismissal of class actions under these statutes because the plaintiffs lacked standing to sue, since they failed to plead that they asked the defendants whether their information had been shared with third parties.  Therefore, the plaintiffs did not sufficiently plead injury.
Continue Reading Ninth Circuit Rejects ‘Gotcha’ Class Actions Under California Privacy Law

Law books, gavel and scales Berger v. Home Depot USA, Inc., No. 11-55592 (9th Cir. Feb. 3, 2014) This is a great decision for retailers and consumer products companies. The court affirmed a decision denying class certification, recognizing that variability in consumer experience when entering into a retail transaction makes a case inappropriate for class treatment. In Berger, plaintiff challenged the defendant’s “damage waiver surcharge,” which allows the customer to avoid liability if a tool is damaged during the period of rental. Plaintiff claimed the waiver was deceptive because it was automatically added to all transactions and the defendant (allegedly) failed to disclose that it was optional. The trial court denied class certification and the Ninth Circuit affirmed.
Continue Reading Variability in Consumer Experience Dooms Class Action

Cash RegisterMany lawsuits over consumer products involve allegations that a product didn’t work as advertised, or that the manufacturer failed to adequately disclose how to use the product.  These cases often are filed by plaintiffs who have spent just a few dollars on the product and suffered no real damages, other than possibly the price of the product, assuming their allegations can be proven.  Thus, these cases frequently are seen in the form of class actions.  The Supreme Court’s decision in Symczyk v. Genesis Healthcare Corp., 133 S.Ct. 1523 (2013)and cases since have raised the issue of whether a defendant’s unaccepted offer of judgment for complete relief can moot individual claims or even class actions before a class is certified, which in turn raises the issue of whether such cases can be mooted by a simple offer of a full refund.

In Symczyk, the plaintiff brought a collective action under the Fair Labor Standards Act.  No other employees “opted into” the lawsuit, the plaintiff failed to accept the defendant’s offer of judgment under Federal Rule of Civil Procedure 68 for the full amount of the plaintiff’s alleged damages, and the Supreme Court held that the District Court lost subject matter jurisdiction.  However, based on procedural issues with the plaintiff’s appeal, the Supreme Court assumed, without deciding, that the unaccepted Rule 68 offer mooted the plaintiff’s individual claim.
Continue Reading Can a Consumer Products Company Moot Class Actions by Offering a Refund?

As addressed in a separate post on this blog, the Supreme Court’s decision in Symczyk v. Genesis Healthcare Corp., 133 S.Ct. 1523 (2013) and cases since raised the issue of whether a defendant’s unaccepted offer of judgment for complete relief can moot class actions before a class is certified, which in turn raises the issue of whether such cases can be mooted by a full refund.  A recent decision from the Eastern District of California says “yes.”Cash Register

On February 04, 2014, in the case of Luman v. Theismann, 2014 WL 443960 (E.D. Cal. Feb. 4, 2014), the Court granted a motion to dismiss a putative class action alleging false advertising and related claims against NAC Marketing Co. and its endorser, former Washington Redskins quarterback Joe Theismann, because the plaintiffs who had purchased NAC’s product — an allegedly ineffective prostate medication — had received full refunds.  U.S. District Judge Kimberly J. Mueller dismissed the entire action, ruling that the Court lacked subject matter jurisdiction since the plaintiffs’ alleged injuries had been redressed.
Continue Reading Strategy of Offering Refunds to Moot Class Actions Gains Traction