Class Action Archives - The National Law Forum

Surge in Class Actions Under the Illinois Genetic Information Privacy Act

This year has seen a substantial increase in the number of class action lawsuits filed against employers under the Illinois Genetic Information Privacy Act (GIPA). More than 20 suits have been filed this year, a stark contrast to zero filed in 2022 and only two in 2021.

Like its federal counterpart the Genetic Information Nondiscrimination Act (GINA), GIPA prohibits employers, and agents acting on their behalf, from “directly or indirectly” soliciting, requesting, requiring or purchasing genetic information from a person as a condition of employment or from using genetic information in a discriminatory manner against an employee or applicant. Genetic information is defined to include information from genetic tests or the manifestation of a disease or disorder of an individual or their family members.

Under the claims filed, plaintiffs allege that during the hiring process prospective employers collected family medical history and required pre-employment physicals or health interviews, which sought the protected information. These exams and interviews were often conducted by third-party occupational health services providers. The damages sought included “statutory damages” under the Act of $15,000 for each intentional and/or reckless violation and $2,500 for each negligent violation. In addition, GIPA has no statutory cap on punitive or compensatory damages and no statute of limitations, exposing employers to potentially massive damage awards.

Because these cases are in their infancy and currently only in Illinois, there is little guidance on the scope of GIPA and any exceptions that may exist. This means that we will need to wait and see how courts will interpret the Act and what impact the cases will have beyond Illinois.

In light of these developments, all employers should consider the following:

Disclaimer Use on Authorizations and Information Packets: Consider adding a written disclaimer to any authorization and pre-employment questionnaires that requests applicants not to provide any genetic information when responding to requests for medical information. The disclaimer should be provided to the applicant/employee for their information.
Review Third-party Provider Practices: Evaluate the practices of third-party medical providers, including documents provided to applicants/employees in their evaluation process, and request that family medical history not be obtained.
Assess Contracts/Indemnification Obligations: Review and assess the indemnification provisions of contracts with third-party medical providers. It is important that the hold harmless and indemnification obligations of the provider include reference to GIPA obligations in the scope of protection for the employer.

How To Help a Jury Understand Complex Litigation

We hear this quite a bit from our clients. An attorney, when introducing us to his pending complex litigation matter, tells us up front, “This is a complicated case.” It’s code for, “I don’t think jurors will understand this case.”

We hear it again in opening statements: “This is a complicated case.” So now, the attorney knows it’s a complicated case; the consultants know it’s a complicated case; the jurors know it’s a complicated case. Great. What now?

Here are a few ideas to help you connect your complex litigation to the jurors and make them more comfortable hearing it.

Change the Question

Instead of asking, “How can I make jurors understand my complex case?”, how about asking, “How can I simplify my case for the jurors (and the judge and the witnesses)?” This basic reframing can change your focus—instead of concentrating on the complexity, you and your team begin to think about simplification. There’s a big difference.

Don’t Tell the Jury It’s a Complicated Case

When you tell a juror the case is complicated, they hear one of two things: “They think I’m too stupid to understand this” or “This is going to be way above my head.” The first can cause them to feel offended and the second tends to stop them from listening. Finding ways to explain the unfamiliar in familiar terms helps them understand the concepts underlying your case. Characterizing the case does no good for anyone.

Tell the Jury a Story

Try thinking about your case as a story: What tale do you want to tell? Or think of it this way: If someone at a dinner party asked about your case, what would your side of the story sound like?

We all think in stories, especially from the jury box. Jurors want to know what happened between these opposing parties that landed them in court, not a list of evidence and intricate facts. Instead, tell a story that answers jurors’ questions about motives for the lawsuit and the significance of your case, which should (again) simplify the details. Talking in stories makes your complex litigation more jury-friendly.

There’s a saying that goes, “What you focus on expands.” Ultimately, the key to helping jurors understand your complicated case lies in focusing not on its complexity, but on its simplicity.

Article By Robert Gerchen of IMS Consulting & Expert Services

For more litigation legal news, click here to visit the National Law Review.

Beyond Meat Sued Over Protein Content Claims

A proposed consumer class action lawsuit was filed against Beyond Meat, Inc. on June 10, alleging that the plant-based meat manufacturer embellished the amount of protein contained in its line of plant-based sausages, breakfast patties, meatballs, ground beef, and chicken products.
In the complaint, plaintiff Mary Yoon alleges that Beyond Meat falsely labels and advertises its products as providing “equal or superior protein” to animal-derived meat. Her claim is based on the fact that “two different U.S. laboratories have independently and separately conducted testing on a wide range of Beyond Meat products. The test results were consistent with each other: the results of both tests show that Beyond Meat products contain significantly less protein than what is stated on the product packaging.”
Plaintiff Yoon alleges that Beyond Meat’s quantitative declaration of protein and percent Daily Value (%DV) are false and misleading because the quantitative amount was calculated using the nitrogen method. According to the complaint, “the nitrogen method is not the most accurate way to describe protein content” and that “[b]y law, Beyond Meat is required to use the PDCAAS calculation for the products rather than some other less-sophisticated method.”
In opposition to plaintiff Yoon’s claims, 21 CFR 101.9(c)(7) specifically provides for two different methods to determine protein values, including the nitrogen method. The FDA recently issued a clarifying Q&A supporting the use of either method to calculate protein content (i.e., nitrogen or PDCAAS), but noted that manufacturers are still obligated to include a %DV when protein claims are made and that %DV should be adjusted for protein quality.

Article By Food and Drug Law Practice Group at Keller and Heckman LLP

For more biotech, food, and drug legal news, click here to visit the National Law Review.

Litigation Minute: Defending Consumer Class Action Claims Involving PFAS

WHAT YOU NEED TO KNOW IN A MINUTE OR LESS

Defending consumer class action claims alleging false and misleading product labeling based on the presence of per- and polyfluoroalkyl substances (PFAS) is similar to the defense of other food and beverage labeling class actions, but there are nuances the food and beverage industry should consider.

What Are PFAS?

As noted in last week’s edition, PFAS are per- and polyfluoroalkyl substances used for their flame-retardant and water-resistant properties. They are used in clothing, cosmetics, and food packaging. PFAS can also be found in municipal water supplies.

How Do PFAS Relate to Consumer Class Actions?

Plaintiffs’ counsel have brought consumer class actions against the makers and sellers of food and beverages alleging that the presence of PFAS in the labeled product renders the labeling false and misleading. Consumer class actions involving PFAS typically allege that the presence of PFAS renders affirmative representations on the product labeling false or misleading, or that the presence of PFAS must be disclosed on the label.

For example, both of these theories are at play in the case of Davenport v. L’Oreal USA, Inc. The complaint asserts that (1) the representations that L’Oreal’s waterproof mascaras are safe, effective, high quality, and appropriate for use on consumers’ eyelashes are false or misleading due to the presence of PFAS; and (2) L’Oreal failed to disclose to consumers that PFAS are present in detectable amounts in its waterproof mascaras.¹

How is the Defense of PFAS Consumer Class Actions Similar to the Defense of Other Consumer Class Actions?

In most instances, the defense of consumer class actions involving PFAS allegations does not differ substantially from the defense of other types of consumer class actions. In the case of an alleged affirmative misrepresentation, the inquiry is the same on a pleadings challenge – whether the labeling is likely to mislead a reasonable person given the presence of PFAS in the product.

Moreover, plaintiffs typically assert a “premium price” theory, meaning the plaintiff claims he or she would not have purchased the item, or would have paid less, had the PFAS been properly disclosed. These allegations provide the defense with an opportunity to attack the damages model on class certification, similar to other types of consumer class actions.

How is the Defense of PFAS Consumer Class Actions Different From the Defense of Other Consumer Class Actions?

The defense of consumer class actions involving PFAS will differ from other consumer class actions in two key ways, depending on the allegations.

First, given the current lack of regulations governing the presence of PFAS in food and beverage products, the food and beverage industry should be aware that there is generally no duty to disclose the presence of PFAS in the absence of a relevant false or misleading statement on the product labeling. This lack of regulations provides an additional avenue for a pleadings challenge that may not otherwise succeed.

Second, scientific testing will be critical to determining whether there are any, or a uniform quantity of, PFAS present across the entire product line. PFAS variations between product exemplars may provide an additional avenue to defeat class certification.

Takeaway

Unfortunately, it appears that the food and beverage industry will see a new wave of class action litigation focused on the presence of PFAS in products. However, it also appears that many tried and true defense strategies will be applicable to such claims, and the unique nature of PFAS litigation will provide class defendants with additional strategies.

FOOTNOTES

¹Davenport v. L’Oreal USA, Inc., No. 2:22-cv-01195 (C.D. Cal.).

Article By Matthew G. Ball with K&L Gates.

For more articles about litigation, visit the NLR Litigation section.

Full Ninth Circuit Removes Unwarranted Hurdles to Class Certification in Big Tuna Antitrust Case

Court delivers a necessary course correction in the law of class certification.

There was reason for optimism in August 2021, when the Ninth Circuit Court of Appeals granted rehearing en banc of a 2-1 decision that would have made it more difficult for antitrust claimants to secure class certification. The three-judge panel in Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 993 F.3d 774 (9th Cir. 2021) had determined that Federal Rule of Civil Procedure 23(b)(3) required a district court to find that no more than a de minimis number of class members are uninjured before a class may be certified. Having announced this de minimis rule in its opinion, the court then took the unusual step of inviting the parties to argue whether the full court should rehear the issue en banc.

As we wrote last year when en banc rehearing was granted, with its de minimis rule, “the panel really jumped the median strip.” We argued that the rule conflated the question of whether issues common to the class predominate over issues unique to individual class members with the question of how the class is defined and that the Ninth Circuit’s new and unrealistic de minimis requirement erected an unnecessary procedural hurdle to class certification. Other commentators and amici argued that requiring proof that all but a de minimis number of class members are injured requires a determination on the merits, impermissible at the class certification stage.

In welcome news for claimants and attorneys who bring antitrust class actions, the Ninth Circuit sitting en banc decided against the de minimis rule, for all of the foregoing reasons, in Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, No. 19-56514, 2022 U.S. App. LEXIS 9455 (9th Cir. Apr. 8, 2022).

In a thorough review of the requirements for class certification under Rule 23, the Ninth Circuit held that the movant’s burden is to prove the prerequisites of Rule 23 by a preponderance of the evidence, bringing the Ninth Circuit in line with the law in the First, Second, Third, Fifth, and Seventh Circuits. As for the predominance requirement of a Rule 23(b)(3) class, the court cited In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 311 (3d Cir. 2008) as amended (Jan. 16, 2009), to hold that, when assessing whether a plaintiff has proven that a common question related to a central issue in the claim predominates, a district court is limited to resolving whether the evidence establishes that a common question is capable of class-wide resolution, not whether the evidence in fact establishes that plaintiffs would win at trial.”

In rejecting the de minimis rule, the court began with the notion that class-wide proof is not required for all issues. Thus, the need for individualized assessment of a class member’s damages does not preclude a court from certifying a class. It contradicts this notion to require proof of injury of not more than a de minimis number of class members.

The presence of uninjured class members, the court held, does not defeat predominance. Predominance is defeated only where the class members cannot rely on the same body of common evidence to establish the common issue.

The presence of a large number of uninjured class members, however, could require a district court to consider whether the class definition is “fatally overbroad.” The remedy in that case, the court said, is to “redefine the overbroad class to include only those members who can rely on the same body of common evidence to establish the common issue.” “[T]he problem of a potentially ‘over-inclusive’ class,” the court said, “can and often should be solved by refining the class definition rather than by flatly denying class certification on that basis” (citation and internal quotation omitted).

With that, the Ninth Circuit reversed the three-judge panel and affirmed the certification of the classes by U.S. District Judge Janis L. Sammartino of California’s Southern District*, holding that the district court did not abuse its discretion in concluding that the methodology employed—statistical regression analysis and other expert evidence—”was capable of showing that a price-fixing conspiracy caused class-wide antitrust impact.” [*Judge Sammartino subsequently recused herself and the case was reassigned to Chief Judge Dana Sabraw.]

The 9-2 decision was written by Circuit Judge Sandra S. Ikuta. In a dissenting opinion, Circuit Judge Kenneth K. Lee said as much as a third of the class members were unharmed. This is a “victory to plaintiffs” who will now be able to settle the action without having to prove their case trial, he said.

The suit was brought by direct purchasers of tuna products, indirect purchasers of bulk-sized tuna products, and individual end purchasers against the owners of Bumble Bee Foods LLC (currently in Chapter 11), StarKist Co., and Chicken of the Sea—which sell more than 80 percent of the packaged tuna in the United States. The industry has also been investigated by the Department of Justice in recent years, resulting in criminal guilty pleas by industry executives for participating in a price-fixing conspiracy.

Nothing in Rule 23 suggests that the presence of more than a de minimis number of uninjured class members affects whether questions affecting only individual class members predominate.

The now vacated de minimis rule conflates impact with damages and the predominance inquiry with potential overbreadth in the class definition. The Ninth Circuit’s en banc decision is a model of clear thinking and a welcome course correction in the law of class certification.

Article By Dan Mogin and Jonathan Rubin of MoginRubin

For more antitrust legal news, click here to visit the National Law Review.

Intra-Class Conflict Dooms Auto Insurance Class Action in Fifth Circuit

Last week the Fifth Circuit issued a short opinion that made an important point that does not arise often in class certification decisions. Class certification failed because the plaintiffs’ proposed theory of liability would benefit only some class members and disadvantage others, who would be overpaid if the plaintiffs’ theory were correct. For that reason alone, the plaintiffs could not adequately represent the class.

Prudhomme v. Government Employees Insurance Company, No. 21-30157, 2022 WL 510171 (5th Cir. Feb. 21, 2022) (per curiam) was similar to another case I recently wrote about—the plaintiffs claimed that their insurer undervalued their vehicles that were deemed total losses, in violation of Louisiana statutes. Sidestepping questions about commonality and predominance, which are usually the focus of class certification decisions, the Fifth Circuit affirmed the denial of class certification because the adequacy of representation requirement was not met. This was because “a portion of the proposed class members received payments above (that is, benefitted from) the allegedly unlawful valuation.” According to the district court opinion, an expert witness opined that approximately one-fifth of the class would have received less on the plaintiffs’ theory than they received from GEICO. While the plaintiffs argued that class members who were overpaid on their theory might still be entitled to some damages under Louisiana law, that would likely create a typicality problem. Class representatives cannot adequately represent a class if they offer “a theory of liability that disadvantages a portion of the class they allegedly represent.”

Look out for this type of issue the next time you are litigating a class action. It might be lurking in your case when you peel back the onion.

Article by Wystan M. Ackerman with Robinson & Cole LLP.

For more articles about class-action lawsuits, visit the NLR Litigation section.

Fitness App Agrees to Pay $56 Million to Settle Class Action Alleging Dark Pattern Practices

On February 14, 2022, Noom Inc., a popular weight loss and fitness app, agreed to pay $56 million, and provide an additional $6 million in subscription credits to settle a putative class action in New York federal court. The class is seeking conditional certification and has urged the court to preliminarily approve the settlement.

The suit was filed in May 2020 when a group of Noom users alleged that Noom “actively misrepresents and/or fails to accurately disclose the true characteristics of its trial period, its automatic enrollment policy, and the actual steps customer need to follow in attempting to cancel a 14-day trial and avoid automatic enrollment.” More specifically, users alleged that Noom engaged in an unlawful auto-renewal subscription business model by luring customers in with the opportunity to “try” its programs, then imposing significant barriers to the cancellation process (e.g., only allowing customers to cancel their subscriptions through their virtual coach), resulting in the customers paying a nonrefundable advance lump-sum payment for up to eight (8) months at a time. According to the proposed settlement, Noom will have to substantially enhance its auto-renewal disclosures, as well as require customers to take a separate action (e.g., check box or digital signature) to accept auto-renewal, and provide customers a button on the customer’s account page for easier cancellation.

Regulators at the federal and state level have recently made clear their focus on enforcement actions against “dark patterns.” We previously summarized the FTC’s enforcement policy statement from October 2021 warning companies against using dark patterns that trick consumers into subscription services. More recently, several state attorneys general (e.g., in Indiana, Texas, the District of Columbia, and Washington State) made announcements regarding their commitment to ramp up enforcement work on “dark patterns” that are used to ascertain consumers’ location data.

Article By: Privacy and Cybersecurity Practice Group at Hunton Andrews Kurth

For more cybersecurity legal news, click here to visit the National Law Review.

Texas AG Sues Meta Over Collection and Use of Biometric Data

On February 14, 2022, Texas Attorney General Ken Paxton brought suit against Meta, the parent company of Facebook and Instagram, over the company’s collection and use of biometric data. The suit alleges that Meta collected and used Texans’ facial geometry data in violation of the Texas Capture or Use of Biometric Identifier Act (“CUBI”) and the Texas Deceptive Trade Practices Act (“DTPA”). The lawsuit is significant because it represents the first time the Texas Attorney General’s Office has brought suit under CUBI.

The suit focuses on Meta’s “tag suggestions” feature, which the company has since retired. The feature scanned faces in users’ photos and videos to suggest “tagging” (i.e., identify by name) users who appeared in the photos and videos. In the complaint, Attorney General Ken Paxton alleged that Meta, collected and analyzed individuals’ facial geometry data (which constitutes biometric data under CUBI) without their consent, shared the data with third parties, and failed to destroy the data in a timely matter, all in violation of CUBI and the DTPA. CUBI regulates the collection and use of biometric data for commercial purposes, and the DTPA prohibits false, misleading, or deceptive acts or practices in the conduct of any trade or commerce.

Among other forms of relief, the complaint seeks an injunction enjoining Meta from violating these laws, a $25,000 civil penalty for each violation of CUBI, and a $10,000 civil penalty for each violation of the DTPA. The suit follows Facebook’s $650 million class-action settlement over alleged violations of Illinois’ Biometric Privacy Act and the company’s discontinuance of the tag suggestions feature last year.

This article was written by the team at Hunton Andrews Kurth. For more articles about biometric information protection, please see here.

Class Actions Begin: Plaintiffs Target Banks for PPP Loan Processing

A number of class-action lawsuits have been filed targeting national and community banks for their processing of loans under the Small Business Administration’s Paycheck Protection Program (PPP). It is not surprising that disputes have already arisen, given the swift creation of the vital relief program and equally rapid depletion of the $349 billion in initial funding. The suits allege that banks violated the CARES Act and state law by prioritizing high-value and existing customers over other small businesses. More suits are likely to follow, whether based on similar theories or new ones that arise out of the next round of funding.

Plaintiffs in these class actions have accused banks of inappropriately processing and funding larger loans for “bigger business” clients and favoring current customers over other applicants who were unable to obtain loans before the funding ran out. One of the first class actions, filed in federal court in Maryland, sought a temporary restraining order and preliminary injunction to prevent banks from prioritizing current bank customers over individuals and businesses that were not current customers of the bank. The court denied plaintiffs’ request for emergency relief, concluded that there is no private right of action under the CARES Act, and found that plaintiffs’ claims were unlikely to survive. See here for a link to the decision. Plaintiffs have appealed to the Fourth Circuit. Two similar class actions have been filed in Texas federal court.

Another class action was filed this week in state court in Texas against a community bank, alleging fraud, breach of contract, breach of fiduciary duty, negligence and violations of the Texas Deceptive Trade Practices Act, all arising out of claims that the bank gave preference to customers eligible for larger loans in order to obtain more lucrative fees. Similarly, several small businesses have filed federal class actions in California and New York, accusing banks of false advertising, fraud, violations of state unfair competition law and deceptive trade practices, among others. Additional disputes are likely to arise as small businesses continue to face unprecedented circumstances; reportedly up to 80% of small businesses were unable to obtain loans during the first round of the program.

ARTICLE BY Bryan S. Dumesnil, Rachel B. Goldman, Christopher L. Dodson,

David A. Shargel, David J. Ball and William S. Anderson of Bracewell LLP.

For more on CARES Act PPP Loans, see the National Law Review Coronavirus News section.

Class Actions Follow Universities’ Moves to Online Learning

After switching to online learning in response to the COVID-19 pandemic and sending students home, colleges and universities are beginning to face class action lawsuits seeking refunds of tuition, housing costs, meal plans, and fees. One such lawsuit is Church v. Purdue University, No. 4:20-CV-0025, in the U.S. District Court for the Northern District of Indiana.

The lawsuit asserts contract and unjust enrichment claims for three general classes, seeking partial reimbursement for: (1) tuition; (2) housing; and (3) meals and fees. Among the many important issues will be whether the damages are so individualized that they are not susceptible to class-wide proof. If so, they would predominate over common, class-wide issues and prevent class certification. The Church complaint, for example, acknowledges that the diminished value may vary for each student. It alleges that academic performance drops from online learning and the adverse effects hit lower ranked students progressively more harshly. Also, the named plaintiff is an engineering senior who is missing out on his senior project of building an airplane. Many other students will have similar stories, but they each will be unique. These and other problems will be a struggle for plaintiffs as they seek to find a class-wide damages model for some or all of the sub-classes they seek to represent.

These suits also may entail issues arising from recent federal legislation enacted to combat the economic fallout from COVID-19, as well as issues regarding financial aid.

These damage issues will be hotly litigated as these cases face motions to dismiss and oppositions to class certification.

ARTICLE BY Thomas A. Lidbury of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For more litigation resulting from COVID-19, see the National Law Review Coronavirus News page.

Tag: Class Action

Surge in Class Actions Under the Illinois Genetic Information Privacy Act

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