Insights

When a company learns that it may wind up as a defendant in a multidistrict litigation (or MDL), it may initially feel like a disaster. Between expensive, drawn out, and complicated legal proceedings and the possibility of outsized damages and company-threatening liability, it is difficult to imagine the upside. However, MDLs may not be as unfavorable a forum for defendants as they initially seem.

On 31 May 2024, the law of 21 April 2024 amending Books I, XV and XVII of the Economic Code, and transposing Directive (EU) 2020/1828 on representative actions to protect the collective interests of consumers, was published in the Belgian Official Journal.

On July 24, 2023, an en banc Eleventh Circuit joined the majority of circuits to find that just one text is sufficient to establish standing to bring a Telephone Consumer Protection Act (“TCPA”) claim. The decision, Drazen v. Pinto, --- F.4th ---, 2023 WL 4699939 (11th Cir. July 24, 2023), not only undoes the panel’s original holding, but also reverses course from the Eleventh Circuit’s prior decision in Salcedo v. Hanna, 936 F.3d 1162 (11th Cir. 2019), which held that a Plaintiff who received a single text message did not have TCPA standing.  

On Thursday, February 4, the 11th Circuit held that a plaintiff cannot establish Article III standing to sue based on an increased risk of identity theft. The 11th Circuit joins the 2d, 3d, 4th, and 8th Circuit’s in rejecting standing based on such allegations. However, the 6th, 7th, 9th, and D.C. Circuit have all held to the contrary that a plaintiff can establish Article III standing when the defendant’s conduct has increased the risk of identity theft. The circuit split augurs U.S. Supreme Court intervention on this question in the coming years, if not sooner.

The COVID-19 pandemic has resulted in a massive number of unforeseen cancellations of events and the inability to use paid subscriptions, memberships, and season passes. These range from gym and amusement park closings, to postponed sports seasons, to concert and vacation travel/accommodation cancellations. We previously wrote about the impact of the postponement of the 2020 Tokyo Olympics. Putative classes of consumers have begun to seek refunds of previously paid dues and fees for cancelled events and their inability to use services, putting liquidity strains on the offering businesses. Consumers are supported by some State Attorneys General who are advocating for consumers to receive refunds, avoid cancellation fees, and to otherwise be let out of contracts involving health club memberships and theme parks and more; it would not be surprising if this list grew.

Can a federal court, after Bristol-Myers Squibb Co. v. Superior Court of California,1 still exercise specific jurisdiction over a nationwide class action? Trial courts have debated the question for nearly three years. Last week, two federal circuits became the first appellate courts to decide. One held that a federal court can do so; the other, that the question is premature until the class is certified. At stake is the viability of nationwide or multi-state class actions in a forum where the defendant is not “at home” for purposes of general jurisdiction.

On February 26, 2020, Ripple Labs, Inc., et al., received a major setback in its class action defense against plaintiff’s claims that, among other things, Ripple’s issuance of XRP constitutes an unregistered offer and sale of securities in violation of Section 12(a)(1) of the Securities Act. In an order granting in part and denying in part Ripple’s motion to dismiss, Judge Phyllis J. Hamilton of the U.S. District Court for the Northern District of California, made several significant findings and held that plaintiff’s claims were not time barred by Title 15 U.S.C. § 77(m)’s three-year statute of repose.1

On June 11, 2018, the U.S. Supreme Court held in China Agritech, Inc. v. Resh that the filing of a putative class action equitably tolls the limitations period for putative class members to file individual claims, but does not toll the limitations period for filing new class actions.

The Belgian Council of Ministers has taken a further step towards broadening the scope of the Belgian collective redress system. It has finalized a preliminary draft law that, if approved by the Parliament, would allow not only consumers but also small and medium-sized enterprises (SMEs) and self-employed individuals to act as class members in class actions. Currently this collective redress option can only be brought by a group of consumers.

On March 9, 2017, the Fairness in Class Action Litigation Act of 2017 passed the House 220-201.  According to the Act itself, this aggressive legislation would sweepingly address “abuses in class action and mass tort litigation” with the intent of “ensuring Federal court consideration of interstate controversies of national importance consistent with diversity jurisdiction principles.” 

The first motion for class certification is a crucial inflection point in federal class action cases. Because the class action device makes it possible for plaintiffs to lump together many individual claims for damages, an early certification decision can dramatically change a defendant’s calculus of the costs and benefits of going to trial versus striking a settlement deal. In many cases, then, the defining battle is not trial or even summary judgment; it is class certification.

Prior to the Supreme Court’s January 2016 decision in Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016), the Rule 68 offer of judgment was a powerful tool in a defendant’s arsenal when facing a consumer class action. By offering judgment in full to the putative class representative, the defendant could effectively render the class action moot in certain jurisdictions. But the Supreme Court rejected this practice in Campbell-Ewald, holding that an unaccepted offer of judgment does not moot a class action lawsuit, even if the defendant offers everything the plaintiff seeks to recover.

On January 20, 2016, the U.S. Supreme Court held 6-3 in Campbell-Ewald Company v. Gomez, No. 14-857 (2016), that the plaintiff's Telephone Consumer Protection Act (TCPA) claim is not mooted by an unaccepted settlement offer, including a Fed. R. Civ. P. 68 offer of judgment. The decision is considered a substantial victory for consumer class action claimants, but may not foreclose all potential use of Rule 68 offers as a defense in class actions.

Pharmaceutical manufacturer Amarin Pharma Inc.'s momentous win in New York federal court affirms a drug manufacturer's First Amendment right to truthfully promote non-FDA—approved uses of its product. On August 7, 2015, Judge Paul Engelmayer of the Southern District of New York issued the first known affirmative protection of off-label promotion of a specific prescription drug. Amarin Pharma, Inc. et al. v. U.S. Food & Drug Admin., et al., Opinion & Order, No. 1:15-cv-03588 (S.D.N.Y.). The court granted preliminary relief that permits Amarin to engage in truthful and non-misleading speech promoting the off-label use of its triglyceride-lowering drug Vascepa to treat patients who have lower levels of triglycerides than the patients for whom the FDA approved its use. Critically, the court went even further and held that truthful and non-misleading speech may not form the basis of a prosecution by the Food and Drug Administration (FDA) for misbranding. The court's decision rested heavily on the Second Circuit's 2012 decision in United States v. Caronia, 703 F.3d 149 (2d Cir. 2012), and indicated for the first time how district courts might entertain offensive uses of Caronia by drug manufacturers.  

Since the economic downturn in 2008, the legal market has been in a constant state of change. Companies are demanding budget predictability, shared risk and reward, improved efficiency, more transparency, and a new way to define value, and law firms have rushed to respond. Firms cannot rely on the billable hour as they once did. This development has led to the rise of Pricing Departments whose job it is to manage value-based billing arrangements, profitability, and legal project management. Law firms and in-house counsel need to understand each type of alternative fee arrangement, its strengths and weaknesses, how to accurately scope and budget an engagement, and how to manage it once it has begun.

The FTC announced on May 28, 2014 that, just days before trial, it had settled its long-running antitrust lawsuit against Cephalon, Inc. and its parent company Teva Pharmaceutical Industries, Ltd. In the suit, the agency alleged that Cephalon unlawfully protected its monopoly for the sleep-disorder drug Provigil through a set of so-called "reverse payment patent settlements" with potential generic entrants. According to the FTC, the payments were in the form of commercial contracts that were favorable to the generic companies and executed as part of the settlement agreements.    

2014 was a record-breaking year for automobile recalls. Manufacturers recalled nearly 65 million vehicles in 2014, more than twice the previous record. In the wake of these record numbers, and the high profile nature of some of the recalls, Congress appears eager to enhance the automobile defect reporting system and increase the recall completion rate. By the second day of March, lawmakers had introduced two bills that seek to strengthen the authority and funding of the National Highway Traffic Safety Administration (NHTSA), increase transparency to the public of both NHTSA data and auto makers' communications regarding vehicle issues, and compel consumers to participate in recalls. Whether these proposed pieces of legislation pass, and whether they mark the beginning of a trend of stricter regulation, remain to be seen.

The U.S. Court of Appeals for the Fourth Circuit slapped down the EEOC's claim of disparate impact discrimination in a case involving an employer's use of criminal background and credit checks. In a strongly-worded opinion, the court affirmed a trial court's decision granting summary judgment to the employer because of the EEOC's failure to produce reliable statistical evidence showing a prima facie case of discrimination against job applicants. EEOC v. Freeman (opinion here). While some press reports have misapprehended the scope of the court's opinion, Freeman is a serious setback for the EEOC's current approach to litigating background check cases. The decision may also help employers defeat other employment law class action claims based on disparate impact theory.

The Supreme Court gave employers some good news this week in deciding that time spent by workers going through a theft-prevention security screening at the end of their shifts need not be compensated under the Fair Labor Standards Act. In a 9-0 ruling, the Court sided with the employer, determining that post-shift security screening procedures were not "integral and indispensable" to the workers' principal duties. The Court also clarified the standard to determine whether pre- and post-shift activities must be compensated under the FLSA.

As the storm of concussion-related litigation continues to churn, the Federal Trade Commission is once again wading into its turbulent waters. In August, the FTC sent warning letters to five undisclosed "major" retailers, expressing concerns that athletic mouthguards are being advertised deceptively on the retailers' web sites as helping to prevent concussions. These FTC letters represent the convergence of two trends at the Commission: (1) a recent focus on advertising claims of concussion prevention/protection; and (2) sustained efforts to hold retailers accountable for advertising claims concerning the products on their shelves.