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Posts Tagged ‘class action’

9th Circuit Holds Inadmissible Evidence May Support Class Cert

Posted on: May 17th, 2018

By: Ted Peters

Courts around the country are split over whether admissible evidence is needed to support a class certification.  The Fifth Circuit requires it, and the Seventh and Third Circuits appear to be of the same opinion.  In contrast, the Eighth Circuit has indicated that inadmissible evidence can be considered.  On May 3, 2018, the Ninth Circuit join ranks with the Eighth Circuit when it issued an opinion indicating that certification of a class action can be supported by inadmissible evidence.

The case arises out of the district court’s decision to deny class certification to a group of nurses based, in part, on the finding that two of the named plaintiffs had not offered evidence that they were underpaid.  Their only evidence consisted of a paralegal’s analysis of time cards reflecting that hours were not properly calculated.  While perhaps not sufficiently trustworthy to be admitted at trial, the Ninth Circuit concluded that the district court prematurely rejected such evidence when ruling on whether the class could be certified.  The Court stated: “Notably, the evidence needed to prove a class’s case often lies in a defendant’s possession and may be obtained only through discovery.  Limiting class-certification-state proof to admissible evidence risks terminating actions before a putative class may gather crucial admissible evidence.”

The Court also concluded that, because there was no consideration as to whether the employer controlled the nurses after they clocked in, the district court misapplied the definition of “work” under California jurisprudence.  Lastly, the Court was critical of the finding that the law firm representing the putative class action was incapable of properly representing the class, focusing on “apparent errors by counsel with no mention of the evidence in the record demonstrating class counsel’s substantial and competent work on [the] case.”

If you have questions or would like more information, please contact Ted Peters at [email protected].

Winemakers Decan’t Warn a Consumer About Every Risk

Posted on: May 16th, 2018

A Pour Result for Plaintiffs’ Attorneys in California, but a Grape Win for Vintners

By: Robyn Flegal

In May 2018, the California Court of Appeals refused to revive a class action lawsuit claiming wines made by fifteen winemakers should contain an arsenic warning. The lawsuit was originally filed in 2015, alleging that these wines exposed consumers to arsenic in violation of California law. The panel of the California Court of Appeals held that the alcoholic beverage warning on these wines sufficiently notified customers about the potential risks associated with consuming the wine, despite the lack of a specific arsenic warning.

California’s Proposition 65—the safe drinking water and toxic enforcement act of 1986—protects the state’s drinking water sources from being contaminated with chemicals known to cause cancer, birth defects, or other reproductive harms. Prop 65 requires businesses to disclose exposures to such chemicals to Californians.

The appeals court held that the Office of Environmental Health Hazard Assessment requires companies to disclose one chemical for each health risk. Thus, because the alcoholic beverage warning alerted customers that wine could result in cancer and reproductive harm, the additional arsenic warning was unnecessary. The failure to provide a separate arsenic warning was therefore not a violation of the regulations.

Companies doing business in California should be aware of Proposition 65 and the labeling and disclosure requirements thereunder. For more information, please contact Robyn Flegal at [email protected] or any of FMG’s Commercial Litigation Professionals.

When Appealing to the Environmentally-Friendly Consumer Results in RICO Litigation

Posted on: April 6th, 2018

By: Justine A. Baakman

With the push toward production of environmentally friendly motor vehicles driven primarily by consumer demand, vehicle manufacturers have been forced to rapidly adapt vehicle design and marketing strategies.  Appeals to the environmentally conscious consumer often involve touts of vehicle emissions test results with the goal of elevating one’s vehicle above the competition through achieving a lower result than any vehicle on the market.  The necessity to meet consumer demand in this respect has left vehicle manufactures open to suit by consumers unsatisfied with the emissions performance of their vehicles as compared to those advertised by vehicle manufactures.

BMW North America is the latest vehicle manufacturer facing such litigation.  In a class action federal suit filed by consumers residing in Pennsylvania, Maryland, and Colorado, BMW faces allegations of fraud, misrepresentation, and violation of consumer protection and unfair trade practices laws in relation to its emissions test results advertising of its 2009-2013 X5 xDrive 35d models and its 2009-2011 330d models.  BMW faces allegations that the subject models emit significantly higher levels than those advertised to consumers.

BMW has also been accused of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) arising from allegations that it installed emissions cheat devices on the models at issue to render lower emissions test results, and in turn, appeal and attract environmentally conscious consumers to its vehicles.  Additional allegations include that the models at issue emit emissions at 27 times higher than the maximum level allowed by the Environmental Protection Agency, and that BMW colluded with a vehicle parts maker to attain the results advertised to consumers.

For further information or for further inquiries involving commercial liability, you may contact Justine Baakman of Freeman Mathis & Gary, LLP, at [email protected].

Supreme Court Declines to Hear Data Breach Standing Case

Posted on: February 23rd, 2018

By: Amy C. Bender

The ongoing issue of when a plaintiff has grounds (“standing”) in data breach cases saw another development this week when the U.S. Supreme Court declined to weigh in on the debate.

CareFirst, a BlueCross BlueShield health insurer, suffered a cyberattack in 2014 that was estimated to have exposed data of 1.1 million customers. Affected customers filed a federal class action lawsuit in the District of Columbia claiming CareFirst failed to adequately safeguard their personal information. CareFirst asked the court to dismiss the case, arguing that, since the customers had not alleged their stolen personal data had actually been misused or explained how it could be used to commit identity theft, the customers had not suffered an injury sufficient to give them standing to sue and the court therefore lacked jurisdiction to hear the case. The court agreed with CareFirst and dismissed the case. Notably, in this particular breach, CareFirst maintained the hackers had not accessed more sensitive information such as the customers’ Social Security or credit card numbers, and the court found the customers had not alleged or shown how the hackers could steal the customers’ identities without that information. In other words, the mere risk to the customers of future harm in the form of increased risk of identity theft was too speculative.

The customers appealed this decision, and the appellate court reversed, finding the district court had read the customers’ complaint too narrowly. The appellate court reasoned that the customers actually had asserted their Social Security and credit card numbers were included in the compromised data and that they had sufficiently alleged a substantial risk of future injury.

In response, CareFirst filed a petition with the Supreme Court asking it to review the appellate decision. This would have been the first pronouncement on this issue from the high court in a data breach class action lawsuit, a move long-awaited by lower courts, lawyers, and their clients in order to gain more clarity on the application of prior decisions like Spokeo in the specific context of data breach litigation. However, the Supreme Court denied the request (without explanation, as is typical).

As we have reported here and here, courts continue to grapple with the contours of standing in data breach cases. We will continue to monitor and report on developments in this still-evolving area of the law.

If you have any questions or would like more information, please contact Amy Bender at [email protected].

 

Are Your Facebook Job Postings Violating the ADEA

Posted on: February 8th, 2018

By: Brenton S. Bean

So say putative class action plaintiffs in the Northern District of California.  See Communications Workers of America et al v. T-Mobile US, Inc., et al, Case No. 5:17-cv-7232 (N.D. Ca), filed Dec. 20, 2017.  Plaintiffs assert that Facebook has become the modern employment agency, providing not only a platform, but also data and strategies to help employers find candidates.  The lawsuit alleges that Facebook allows, and in some instances requires, a target audience be defined, which includes age restrictions.  In addition, Facebook uses its own massive database and algorithms to determine which users will see the ads, often on the basis of age.  This practice of “microtargeting” advertisements for employment discriminates against older workers, plaintiffs say.

Shortly before the lawsuit was filed, the New York Times ran an article regarding Facebook advertising and age discrimination.  Facebook and other social media sites have recently become more popular means by which employers advertise for job openings.  The Times story indicates many companies use Facebook’s ability to target its users by demographics, such as age, and therefore have discriminated against job applicants by restricting the scope of their Facebook ads to younger Facebook users.  Interestingly, that use of an age restriction is not always limited to cases where the advertiser requests such a restriction.  Facebook also takes the parameters identified by the employer and uses its own statistical methodologies to target the ad.  That means age restrictions may have been used in advertisements without the advertiser’s knowledge, according to the claim.

The scope of the case is potentially enormous.  First, the putative class size is immense.  The class as defined includes all Facebook users nationwide who are age 40 and older, who are interested in receiving employment-related advertisements or recruiting from employers via Facebook, and who were excluded from receiving an ad because of their age.  Second, the complaint names not only four defendant employers, but also a defendant class of employers and employment agencies.  Plaintiffs alleged there may be a thousand or more members of the defendant class, which could include every employer that has used age-limited Facebook ads.  In addition to the federal ADEA claim (which is expected to be amended once the charge process runs its course), plaintiffs have asserted claims under state law for discriminatory advertising and disparate impact recruiting and hiring.

While the named defendants are primarily large companies, the putative defendant class may also include many smaller employers.  Whether potentially implicated or not, companies are advised to review their job placement advertising.  At this juncture, it is too early to assess the class’s chances or the merits, either under the ADEA or the articulated state law claims.  We will monitor this matter closely.

If you have any questions or would like more information, please contact Brenton Bean at [email protected].