Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

Social

Search

Editors

park_julie_blog_150x150.png

park_julie_common_640x280.jpg

park_julie_heroretina_2700x1160.jpg

park_julie_mobileretina_750x1040.jpg

park_julie_social_600x600.jpg

Partner

Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

preovolos_penelope_blog_150x150.png

preovolos_penelope_common_640x280.jpg

preovolos_penelope_heroretina_2700x1160.jpg

preovolos_penelope_mobileretina_750x1040.jpg

preovolos_penelope_social_600x600.jpg

Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class action lawsuits. Claudia also regularly counsels clients in the food, cosmetics, retail, and technology industries. She represents companies in false advertising disputes before the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc.<h5>More about Claudia</h5>Claudia is active in MoFo’s pro bono efforts, and recently traveled to El Paso, Texas, to work with families separated and detained at the border. She is also supervising a pro bono collaboration with Equal Rights Advocates, a nonprofit fighting for gender justice in work places and schools across the country. The initiative will help students who have been victims of sexual assault, attempted assault, or harassment find support and seek justice. Claudia is also a board member of Bay Area Legal Aid and a former board member of Equal Rights Advocates. Claudia is an editor and frequent contributor to MoFo’s <a href="https://classdismissed.mofo.com/">Class Dismissed</a> blog, which provides reports about the latest defense news, developments, and trends in class action lawsuits and product liability issues that affect consumer-facing companies. Her perspectives are also respected in the larger legal community: Claudia has published articles about class action and false advertising issues, and is a co-author of Chapter 7 — “Unfair Competition in California Business Litigation 2016” — of The Recorder. She also regularly speaks at conferences on class action and advertising trends. Claudia is currently serving as a Lawyer Representative for the Northern District of California. She received her J.D. degree in 2004 from Berkeley Law (Boalt Hall School of Law), where she was an associate editor of the Berkeley Technology Law Journal.

vetesi_claudia_blog_150x150.png

vetesi_claudia_common_640x280.jpg

vetesi_claudia_heroretina_2700x1160.jpg

vetesi_claudia_mobileretina_750x1040.jpg

vetesi_claudia_social_600x600.jpg

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class actions.

Claudia M. Vetesi

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

preece_alex_blog_150x150.png

preece_alex_common_640x280.jpg

preece_alex_heroretina_2700x1160.jpg

preece_alex_mobileretina_750x1040.jpg

preece_alex_social_600x600.jpg

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

Adam J. Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.Mr. Hunt has extensive experience representing consumer products companies, financial institutions, and technology firms in class action cases and complex commercial disputes before state and federal trial courts, as well as in arbitrations. Clients seek Mr. Hunt’s counsel for his creative, strategic thinking in high-stakes, high-profile matters. He has represented clients facing claims under false advertising, antitrust, and privacy laws throughout the country, securing wins at the pleading stage, summary judgment, and trial, in addition to negotiating favorable settlements, often early in the case. Representative experience includes successfully securing rulings dismissing two putative false advertising class action cases against one of the best-known consumer electronics companies in the world; obtaining a complete win on summary judgment for a major shipping and logistics company in a multimillion-dollar commercial dispute; appearing as counsel at trial for a leading financial institution in a $100 million commercial dispute, winning a bench trial verdict; and prevailing on motions to dismiss false advertising class actions against a leading Greek yogurt company.Mr. Hunt is also an editor of the firm’s <a href="https://classdismissed.mofo.com/" target="_self">Class Dismissed blog</a>, which provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class action lawsuits that affect consumer-facing companies.Mr. Hunt maintains an active pro bono practice and is the recipient of the New York State Bar Association’s 2017 President’s Pro Bono Service Award for the First Judicial Department, the 2018 Public Service Award from New York University School of Law, and Morrison Foerster’s Kathi Pugh Award for Pro Bono Services.Mr. Hunt received his B.A. with honors from Swarthmore College and his J.D. cum laude from New York University.

hunt_adam_blog_150x150.png

hunt_adam_common_640x280.jpg

hunt_adam_heroretina_2700x1160.jpg

hunt_adam_mobileretina_750x1040.jpg

hunt_adam_social_600x600.jpg

Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

favicon.ico

favicon-16x16.png

favicon-32x32.png

apple-touch-icon.png

MoFo Favicons

Morrison Foerster’s Class Dismissed blog provides insights and reports on the latest news, developments, and trends that affect consumer-facing companies. Subscribe to receive the latest updates by attorneys from our nationally recognized Consumer Class Action and Product Liability practices.

Welcome to Class Dismissed

class-dismissed-welcome-image.jpeg

class-dismissed-welcome-image

Morrison Foerster’s Class Dismissed blog provides insights and reports on the latest news, developments, and trends that affect consumer-facing companies. 

Class Action

Blog - Terms of Use

Blog - Privacy Policy

Blog - Blog Disclaimer

Blog - Attorney Advertising

morrison-foerster-blog-logo.png

Brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry.

MoFo Tech

Equips our clients with the most up-to-date and relevant information on employment and labor law issues.

Employment Law Commentary

Stay on top of emerging issues and stay informed of developments related to the law and business of social media.

Socially Aware

In-depth analysis of developments and trends impacting government contracting.

Government Contracts Insight

The latest news and insights from the nationally recognized Consumer Class Action and Product Liability practices of Morrison & Foerster.

Class Dismissed

  Linkedin

MoFo LinkedIN

Class Dismissed Blog - RSS

Stay Connected

By submitting your data to subscribe to this blog, you approved Morrison & Foerster LLP to email you future information about MoFo news and events. You may opt-out at any time by sending a request to <a href="mailto:mofonews@mofo.com">mofonews@mofo.com</a>. To learn more about how Morrison & Foerster LLP uses and protects your personal data, please view our <a href="https://www.mofo.com/about/privacy-policy.html">Privacy Policy</a> at <a href="https://www.mofo.com/">www.mofo.com</a>.

Never miss a post from Class Dismissed. Enter your email below to stay up-to-date.

Subscribe

Class Action and Product Insights for Your Business

Morrison Foerster - Footer

Blogs -  Home Button

Home

Blog - Topics

TCPA

Announcements & Press

Antitrust

Appellate & Supreme Court

Arbitration

Autonomous Vehicles & Robotics

Aviation & Drones

Class Certification

Consumer Products

Coronavirus (COVID-19)

CPSC

Drug & Medical Device

Emergency Use Authorization (EUA)

Environmental Law

False Advertising

FCRA

Food Misbranding

Government Actions

Internet of Things

Mass Torts

Pharmaceutical & Medical Devices

Privacy

Product Liability

Public Readiness and Emergency Preparedness Act (PREP Act)

Retail

Trials

Topics

Blog - Editors

Blog - About

About

Blog - Subscribe

More

Alexandra Preece Barlow

Adam J. Hunt

The Future of Section 230: Protection Against Product Liability Claims?

New Wave of PFAS Legislation Aimed at Consumer Products

CPSC Releases Annual Report on Deaths and Injuries Involving Nursery Products

CPSC Proposes New Safety Rules for Infant Rockers

CPSC Commissioners Abstain from Retracting Infant Sleep Product Statements

We have entered the next chapter in the ongoing saga of the Consumer Product Safety Commission’s (“CPSC”) regulation of high-powered, small, rare earth magnet sets (“SREMS”).<a href="#_ftn1" name="_ftnref1">[1]</a>  On March 1, 2017, CPSC met and unanimously approved removing the Magnet Sets Safety Standard from the Code of Federal Regulations.<a href="#_ftn2" name="_ftnref2">[2]</a>  On separate motion, the Commissioners split 3-2 along partisan lines in favor of revisiting rulemaking for magnet sets.  This decision follows the United States Court of Appeals for the Tenth Circuit’s November 2016 decision to vacate and remand to the Commission its earlier standard that effectively banned SREMS from sale in the U.S.<a href="#_ftn3" name="_ftnref3">[3]</a>Fight Over Safety Standard for Magnet SetsAs defined by CPSC, magnet sets are “[a]ny aggregation of separable magnetic objects that is a consumer product intended, marketed or commonly used as a manipulative or construction item for entertainment, such as puzzle working, sculpture building, mental stimulation, or stress relief.”  16 C.F.R. § 1240.2.  In 2014, CPSC issued a Final Rule on Safety Standard for Magnet Sets restricting the size and strength of the individual magnets in these sets.  Id. §§ 1240.1-1240.5.  While not categorically banned under the 2014 Safety Standard, SREMS could not be sold due to the standard’s severe size and strength restrictions.<a href="#_ftn4" name="_ftnref4">[4]</a>  Last November, Zen Magnets, LLC (“Zen”)<a href="#_ftn5" name="_ftnref5">[5]</a> successfully challenged CPSC’s regulation in the Tenth Circuit.  Zen Magnets, LLC v. Consumer Prod. Safety Comm’n, 841 F.3d 1141, 1155 (10th Cir. 2016).  The Tenth Circuit vacated and remanded CPSC’s 2014 Safety Standard for further proceedings consistent with the court’s finding that CPSC failed to meet the Consumer Product Safety Act’s requirements.  The court based its ruling on CPSC’s incomplete and inadequately explained factual findings.  Id. at 1144.Removal of Standard Following Court’s Vacatur CPSC’s vote to remove the 2014 Safety Standard was a procedural formality needed to remove the vacated magnet set standard from the Federal Register.  82 Fed. Reg. 12716-01 (Mar. 7, 2017).Regardless of CPSC’s action or response, the Tenth Circuit’s decision vacating the standard had the force of law immediately after the court filed its order on November 22, 2016.  Id.Motion to Revisit Magnet Set Safety Standard RulemakingDuring the March 1st decisional meeting, Commissioner Elliot Kaye separately moved to direct staff to prepare a draft notice of proposed rulemaking addressing the issues raised in the Tenth Circuit’s holding.<a href="#_ftn6" name="_ftnref6">[6]</a>  Commissioner Kaye’s motion directed CPSC staff to utilize CPSC’s existing data, as opposed to conducting further fact-finding.<a href="#_ftn7" name="_ftnref7">[7]</a>  During questions on the motion, Commissioner Robert Adler identified the issues in the Tenth Circuit opinion that needed to be addressed in the draft notice:  (1) CPSC’s use of an incorrect time frame for the data set in its cost-benefit analysis, Zen Magnets, 841 F.3d at 1149; (2) CPSC’s reliance on injury reports that only “possibly” involved magnet sets, id. at 1152; and (3) CPSC’s failure to consider the utility of magnet sets, id. at 1152-53.<a href="#_ftn8" name="_ftnref8">[8]</a>  CPSC estimated that it will take 11 staff months to prepare the draft notice.<a href="#_ftn9" name="_ftnref9">[9]</a>The Future of SREMS Regulation in Light of Shifting Tides at CPSCThis reshaping of magnet set regulation comes during an interesting time at CPSC.  As <a href="http://classdismissed.mofo.com/consumer-products/same-enforcement-trend-new-cpsc-leadership/">previously reported</a>, CPSC’s political makeup has recently shifted following CPSC’s February 9, 2017 announcement of Republican Ann Marie Buerkle as Acting Chairman.  Although the partisan balance of CPSC is likely to shift to the Republicans later this year, Acting Chairman Buerkle currently heads a Commission with three Democrat Commissioners.  At the March 1st meeting, the two Republicans, Acting Chairman Buerkle and Commissioner Joseph Mohorovic, cast the two votes against revisiting rulemaking for magnet sets.  Commissioner Mohorovic strongly opposed new safety standards, stating:I think this has gotten so personal with this agency of having a rule being . . . thrown out that we are ready to hurl ourselves headlong back into rulemaking. . . . We’re doing this without taking the time to either learn the lessons about why we failed the first time or to figure out if there’s still any need for the rule. . . . I think this is a factor of pure ego and this agency has taken the thoughtful opinion of the Tenth Circuit personally and we just want to win for winning’s sake.<a href="#_ftn10" name="_ftnref10">[10]</a>When Democrat Commissioner Marietta Robinson’s term ends in October 2017, President Trump will appoint a new commissioner, and Acting Chairman Buerkle and Commissioner Mohorovic’s position on magnet sets likely will become the majority view at CPSC.We will continue to monitor CPSC’s actions with regard to magnet sets and provide updates on any new proposed standards in light of the Tenth Circuit opinion in Zen Magnets and the shifting roster at CPSC.<a href="#_ftnref1" name="_ftn1">[1]</a>  For background regarding CPSC’s prior enforcement activity regarding SREMS, see our prior post.<a href="#_ftnref2" name="_ftn2">[2]</a>See 82 Fed. Reg. 11347-02 (Feb. 22, 2017) (notice of meeting).<a href="#_ftnref3" name="_ftn3">[3]</a>  Reported in full in our prior post.<a href="#_ftnref4" name="_ftn4">[4]</a>  Under the safety standard, SREMS that fell within the size sold by companies like Zen had to have a flux index of 50 kG2mm2 or less.  See 16 C.F.R. § 1240.3.  The SREMS in Zen Magnets had a magnetic flux index of 400 to 500 kG2mm2.  Zen Magnets, 841 F.3d at 1144.<a href="#_ftnref5" name="_ftn5">[5]</a>  Zen was the last remaining importer and distributor of SREMS by the time CPSC issued its 2014 Safety Standard.  See id. at 1146.<a href="#_ftnref6" name="_ftn6">[6]</a>  Video, Commission Meeting: Decisional Matter: Magnet Sets Safety Standard – Removal from the Code of Federal Regulations, Consumer Product Safety Commission (posted Mar. 2, 2017), <a href="https://cpsc.gov/Newsroom/Video/commission-meeting-decisional-matter-magnet-sets-safety-standard-removal-from-the">https://cpsc.gov/Newsroom/Video/commission-meeting-decisional-matter-magnet-sets-safety-standard-removal-from-the</a>.<a href="#_ftnref7" name="_ftn7">[7]</a>  Commission Meeting Video (posted Mar. 2, 2017).<a href="#_ftnref8" name="_ftn8">[8]</a>Id.<a href="#_ftnref9" name="_ftn9">[9]</a>Id.<a href="#_ftnref10" name="_ftn10">[10]</a>Id.

Fertility Center Litigation

Fitbit

MicroPort

Leading Healthcare, Pharmaceutical, and Medical Device Company

Lethal Injection Matters – Major Pharmaceutical Company

Pain Pump Matters – Large Pharmaceutical Company

Major Technology Company

Leading Chemical Company

Security Device Company

In re Air Crash Near Peixoto de Azevedo, Brazil

bosman_erin_blog_150x150.png

bosman_erin_common_640x280.jpg

bosman_erin_heroretina_2700x1160.jpg

bosman_erin_mobileretina_750x1040.jpg

bosman_erin_social_600x600.jpg

Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin M. Bosman

Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin Bosman

An orthopedic implant company

A children&rsquo;s monthly subscription service product

A fertility company

A major technology company

A smart fitness equipment company

Julie Park provides analytic and strategic counsel for issues in product life cycle, product liability and defective products, consumer class actions, and more.

Julie Park

Julie Park | Product Liability Lawyer

magnets_600_thumbnail.jpg

CPSC to Consider New Magnet Set Safety Standards Following 10th Circuit Decision in Zen Magnets

CPSC to Consider New Magnet Set Safety Standards Following 10th Circuit Decision in Zen Magnets

magnets_600_image.jpg

We have entered the next chapter in the ongoing saga of the Consumer Product Safety Commission’s (“CPSC”) regulation of high-powered, small, rare earth magnet s

The House of Representatives has passed legislation that will fundamentally change class actions as we know them.  The Fairness in Class Action Litigation Act of 2017 (the “Act” or “H.R. 985”) leaves no stage of class action litigation untouched.  For example, the provisions require stricter “typicality” requirements for class members, the disclosure of conflicts of interest between class counsel and named plaintiffs, an administratively feasible way to identify class members, capping distribution fees to class counsel, staying discovery pending motion practice, and automatic appeals of class certification rulings.  The bill also proposes changes to the multidistrict litigation (MDL) procedure, including that plaintiffs claiming personal injury must submit evidence of the harm and causation within 45 days of filing or transfer.H.R. 985 is not an isolated bill—it is part of a larger effort to pass litigation reform through Congress in the era of President Trump.  There are five other pending bills related to legal reform that address issues such as the fraudulent joinder of parties (H.R. 725), EPA Settlement of citizen suits (H.R. 469), Department of Justice settlement funds (H.R. 732), sanctions for frivolous litigation (H.R. 720), and reporting of payments to plaintiffs in asbestos cases (H.R. 906).  All six bills are expected to pass (or have passed) the House.  Given the sweeping nature of the bills, many of the issues are likely to be hotly contested as the bills head to the Senate.BackgroundOn February 9, 2017, Representative Robert Goodlatte (R-Va.) introduced H.R. 985, which, if enacted, would fundamentally alter class action litigation.  Rep. Goodlatte is no stranger to class action reform.  He was the author of the 2005 Class Action Fairness Act (CAFA) and has introduced a variety of proposed class action reforms since that time.  The Act, however, is by far the most comprehensive reform proposed since CAFA.The U.S. Chamber of Commerce is also a leading supporter of the Act, and recently published a case study likely intended to demonstrate a need for legal form:  The Food Court, Trends in Food and Beverage Class Action Litigation.  (U.S. Chamber Institute for Legal Reform, February 2017.)  In addition to providing an overview of the surge in food class actions and theories, the publication discusses the need for legislative action to ensure class actions benefit consumers instead of lawyers.From Cradle to Grave:  Examples of the Act’s Broad Changes to Every Aspect of Class Action LitigationH.R. 985 proposes changes to every aspect of class action litigation, from inception to settlement.  Below is a summary of some of the key provisions of the bill.   Class Member Typicality.  Current law requires that class representatives have claims that are “typical” of the other class members.  Under the Act, class representatives are subject to a heightened typicality requirement:  they must demonstrate that each proposed class member suffered the same type and scope of injury they did.  This change would ensure that class actions are only available where the named plaintiffs can show that all class members incurred actual harm.  It would prohibit plaintiffs from including uninjured individuals in their class definition—a question the United States Supreme Court ducked in Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016), and that is the subject of a Circuit split.Plaintiffs’ firms have already lambasted the provision as limiting the availability of the class action device for individuals who are affected by alleged abuses in different ways.  On the other hand, the proposed change would ensure that class actions are addressing real consumer harms and not imaginary harms for the benefit of class action attorneys.Class Counsel Conflicts of Interest. The Act requires class counsel to disclose whether the proposed class representative is a relative, former or current employee, or former or current client (aside from the current action).  If the proposed representative falls into any of those categories, the court is prohibited from certifying the class.  This provision would send major shockwaves through the plaintiffs’ bar, as many class representatives are repeat players and have some relationship to class counsel.Ascertainability:  Administratively Feasible Method of Identifying Class Members.  The Act officially adds an “ascertainability” prong to the class certification inquiry.  Under the Act, a class representative must demonstrate that there is a reliable and administratively feasible means to identify class members and to distribute payment to the class.  This change would resolve a current Circuit split regarding the ascertainability requirement and would side with the Third Circuit’s decision in Carrea v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013), and overrule the Ninth Circuit’s recent decision in Briseno v. ConAgra Foods, Inc., ___ F.3d ___ (Jan. 3, 2017), which held that Rule 23 does not require plaintiffs to establish an “administratively feasible” means of identifying putative class members.While the Act does not address whether affidavits attesting to class membership would be considered a feasible mechanism, this added provision would strengthen the case for affirmance (or even moot the appeal) of the Northern District of California’s decision in Jones v. ConAgra Foods, Inc., 3:12-cv-01633 (June 14, 2014), wherein the court found that such affidavits were insufficient when there were multiple label changes and the purchase price was small.[1] This provision could have broad implications, as it could effectively eliminate class actions against companies that sell small dollar items and do not track who obtains their products.Limitations on Class Counsel’s Recovery of Attorneys’ Fees.  The Act also aims to curb actions where the main beneficiaries of the actions are the class counsel.  The Act prohibits fee distribution until the distribution of monetary relief to the class has been completed, and the fee determination must be based on the money actually distributed to the class.  In no event can the attorney fee award exceed the amount of monetary relief received by the class; however, class counsel can still receive compensation for obtaining equitable relief.  This provision could also be costly for defendants, as plaintiffs are likely to insist on more expansive and expensive class notice to increase claims rate.No Issue-Only Classes.The Act prohibits courts from granting certification to a class as to a particular issue under Rule 23(c)(4) unless the entirety of the cause of action satisfies all the class certification requirements of Rules 23(a) and (b).  This provision is an attempt to limit the class action device where there is no classwide damage, and it is an effort to overrule the Sixth and Seventh Circuit Whirlpool cases, Glazer v. Whirlpool Corp., 722 F.3d 838 (6th Cir. 2013) and Butler v. Sears, Roebuck and Co., 727 F.3d 796 (7th Cir. 2013), in which the plaintiffs were able to avoid Comcast v. Behrend, 133 S.Ct. 1426 (2013), (only a small percentage of the class has a defect manifest) by certifying liability-only classes.  The Supreme Court in Comcast held that certification was improperly granted where plaintiffs had not shown that common issues predominated as to damages.Stay of Discovery Pending Motions.  The Act also stays discovery during the pendency of any motion to transfer, dismiss, or strike class allegations, unless the court finds that particularized discovery is necessary to preserve evidence or prevent undue prejudice.  This change would enable defendants to fight claims without being subject to costly discovery.  This change could be viewed as at odds with the recent amendments to the Federal Rules of Civil Procedure, which permit parties to serve discovery even prior to the initial case management conference.Right to Appeal Class Certification Decisions.  Grants or denials of class certification would be immediately appealable—eliminating the courts of appeals’ discretion in determining whether such decisions warrant review.  While this would give defendants an immediate appeal for an erroneous class certification decision, it would likely increase plaintiffs’ appeals as well.  This would also effectively eliminate the issue pending before the Supreme Court in Baker v. Microsoft, No. 15-457, which is whether a court of appeals has jurisdiction to hear an appeal of a denial of class certification where the plaintiffs voluntarily dismiss the action with prejudice, as plaintiffs would no longer need to dismiss the claim to obtain review.MDL Procedural Changes.  While the Act provides for several procedural changes, the most noteworthy change is that in any consolidated or coordinated MDL proceeding seeking recovery for personal injuries, the plaintiff must submit evidentiary support, including medical records, for the alleged injury, the exposure that allegedly caused the injury, and the alleged cause of the injury within 45 days of transfer or filing.  No extensions of this deadline are permitted.ConclusionThe Act would change the landscape of class action litigation.  We expect passage of the key provisions of the Act in the Senate to be contentious. We will continue to track the Act through the legislative process and will update this client alert with any developments.[1] Jones is currently stayed pending the Supreme Court’s decision in Baker v. Microsoft, No. 15-457.

Nature's Path Foods

Suja Juices

Unilever USA Inc.

Nature’s Path Foods and Sprouts Farmers Market

Iovate Health Sciences, International

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy mat

Claudia Vetesi

istock_000009344446_small_thumbnail.jpg

House Passes Bill Proposing Sweeping Changes to Class Action Litigation

Trump Nominates Buerkle as Permanent CPSC Chair

istock_000009344446_small_image.jpg

The House of Representatives has passed legislation that will fundamentally change class actions as we know them.  The Fairness in Class Action Litigation Act o

House Passes Bill Proposing Sweeping Changes to Class Action Litigation

Republican Ann Marie Buerkle was named Acting Chairman of the Consumer Product Safety Commission (CPSC) on February 9, 2017, replacing former Chairman and Democrat Elliott Kaye. This transition has many wondering whether the trend of increased CPSC enforcement, and its pledge to issue increased civil penalties, will continue under Buerkle’s leadership.CPSC Enforcement Under Former Chairman KayeAs we have <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltba3468f449d4f4e8/62731590a1a1dd2aa9f6c986/150303cpscpenaltiestoincrease.pdf" target="_blank">previously reported</a>, over the last few years CPSC has stepped up its enforcement actions against retailers, distributors, and manufacturers for unsafe products and associated reporting violations. Under former Chairman Kaye’s leadership, the agency also pledged to, and did, increase the monetary amount of civil penalties issued against companies for failure to report potentially hazardous products.CPSC’s increased focus on fines is backstopped by the Consumer Product Safety Improvement Act of 2008, which increased the maximum penalties from $8,000 to $100,000 per occurrence for failure to report a product safety hazard, and increased the maximum penalty amounts for a related series of violations from $1.8 million to $15 million. Recently, CPSC has used its authority to impose higher penalties on manufacturers, distributors, and retailers to reach settlements with significant price tags for settling companies.<a href="#_ftn1" name="_ftnref1">[1]</a> In 2016, the average reported CPSC penalty was over $6 million, more than double the average in 2015.<a href="#_ftn2" name="_ftnref2">[2]</a> Under Kaye, CPSC escalated its enforcement efforts by filing litigation against companies for failing to report product safety hazards.<a href="#_ftn3" name="_ftnref3">[3]</a> Former Chairman Kaye spoke out often about using increased civil penalties and frequently released press statements to highlight fines, enforcement actions, and recalls. Kaye viewed higher civil penalties as a “real deterrent” aimed at forcing manufacturers, retailers and distributors into reporting potential product safety issues early.<a href="#_ftn4" name="_ftnref4">[4]</a>Outlook: Will The Trend Of Increased Enforcement Continue?Acting Chairman Buerkle is a former New York Congresswoman who was nominated to serve as a CPSC commissioner by President Barack Obama in 2013. Buerkle’s ascension to acting chairman has many wondering whether the trend of increased enforcement will continue, particularly in light of the fact that Buerkle has been a vocal critic of the trend of seeking increased penalties. Under Kaye’s leadership, Buerkle was “deeply troubled by recent pronouncements that the Commission will seek higher civil penalties.”<a href="#_ftn5" name="_ftnref5">[5]</a>As acting chairman, Buerkle has instead emphasized a collaborative approach that brings all stakeholders together to forge new solutions that work for all. Buerkle has <a href="https://www.cpsc.gov/Newsroom/News-Releases/2017/Ann-Marie-Buerkle-Elevated-To-Serve-As-Acting-Chairman%20of-US-Consumer-Product-Safety-Commission" target="_blank">stated</a> that she is committed to working “to enhance relationships so that CPSC can leverage the knowledge, insight, and expertise of the entire consumer product safety community.” At the same time, she has <a href="https://www.cpsc.gov/Newsroom/News-Releases/2017/Ann-Marie-Buerkle-Elevated-To-Serve-As-Acting-Chairman of-US-Consumer-Product-Safety-Commission" target="_blank">emphasized</a> that “[w]hile we are experiencing a change in leadership, CPSC’s mission remains the same and I look forward to continuing to work closely with all stakeholders in my new position.” Although Buerkle’s position as acting chairman may not be set in stone, the partisan balance of CPSC will very likely shift towards Republicans this year. Three Democrat and two Republican commissioners currently head CPSC.<a href="#_ftn6" name="_ftnref6">[6]</a>  Democrat commissioners Kaye, Robert Adler,<a href="#_ftn7" name="_ftnref7">[7]</a> and Marietta Robinson<a href="#_ftn8" name="_ftnref8">[8]</a> have all been outspoken in their support of the trend of increased penalties. The term of Democrat Commissioner <a href="https://cpsc.gov/About-CPSC/Commissioners/Marietta-Robinson" target="_blank">Marietta Robinson</a>, however, expires in October 2017. At that time, President Trump will have the opportunity to appoint a new commissioner that aligns with his vision of the agency. Given this shift under the new administration, CPSC will almost certainly back away from the rhetoric of severe penalties and enforcement that prevailed under Chairman Kaye’s leadership. We will continue to monitor CPSC’s enforcement approach as it unfolds in the coming months.<a href="#_ftnref1" name="_ftn1">[1]</a>“CPSC Penalties to Increase Beyond ‘Cost of Doing Business,’” Morrison & Foerster LLP Client Alert, Mar. 3, 2015, available at <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltba3468f449d4f4e8/62731590a1a1dd2aa9f6c986/150303cpscpenaltiestoincrease.pdf" target="_blank">https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltba3468f449d4f4e8/62731590a1a1dd2aa9f6c986/150303cpscpenaltiestoincrease.pdf</a>.<a href="#_ftnref2" name="_ftn2">[2]</a> See Civil and Criminal Penalties Database, Consumer Product Safety Commission, available at <a href="https://www.cpsc.gov/Business--Manufacturing/Civil-and-Criminal-Penalties" target="_blank">https://www.cpsc.gov/Business–Manufacturing/Civil-and-Criminal-Penalties</a>.<a href="#_ftnref3" name="_ftn3">[3]</a> “Recall, Enforce, Repeat! CPSCP and DOJ Team Up for Another Enforcement Action,” Morrison & Foerster LLP Class Dismissed Blog, June 22, 2015, available at <a href="http://classdismissed.mofo.com/consumer-products/recall-enforce-repeat-cpsc-and-doj-team-up-for-another-enforcement-action/">http://classdismissed.mofo.com/consumer-products/recall-enforce-repeat-cpsc-and-doj-team-up-for-another-enforcement-action/</a>.<a href="#_ftnref4" name="_ftn4">[4]</a> See, e.g., “Joint Statement of Chairman Elliot F. Kaye and Commissioner Robert S. Adler on Civil Penalties,” Consumer Product Safety Commission Statements, July 20, 2016, available at <a href="https://www.cpsc.gov/about-cpsc/chairman/elliot-f-kaye/statements/joint-statement-of-chairman-elliot-f-kaye-and" target="_blank">https://www.cpsc.gov/about-cpsc/chairman/elliot-f-kaye/statements/joint-statement-of-chairman-elliot-f-kaye-and</a>.<a href="#_ftnref5" name="_ftn5">[5]</a> “Overseeing the Consumer Product Safety Commission”: Testimony Before the S. Comm. on Commerce, Science, and Transportation and Subcomm. on Consumer Protection, Product Safety, Insurance, and Data Security, (June 17, 2015) (testimony of Ann Marie Beurkle, Consumer Product Safety Commission), available at <a href="https://www.cpsc.gov/s3fs-public/Buerkle-Senate-Testimony.pdf" target="_blank">https://www.cpsc.gov/s3fs-public/Buerkle-Senate-Testimony.pdf</a>.<a href="#_ftnref6" name="_ftn6">[6]</a> See “Commissioner Biographies,” Consumer Product Safety Commission, available at <a href="https://cpsc.gov/About-CPSC/Commissioners" target="_blank">https://cpsc.gov/About-CPSC/Commissioners</a>.<a href="#_ftnref7" name="_ftn7">[7]</a> See, e.g., “Joint Statement of Chairman Elliot F. Kaye and Commissioner Robert S. Adler on Civil Penalties,” Consumer Product Safety Commission Statements, July 20, 2016, available at <a href="https://www.cpsc.gov/about-cpsc/chairman/elliot-f-kaye/statements/joint-statement-of-chairman-elliot-f-kaye-and" target="_blank">https://www.cpsc.gov/about-cpsc/chairman/elliot-f-kaye/statements/joint-statement-of-chairman-elliot-f-kaye-and</a>.<a href="#_ftnref8" name="_ftn8">[8]</a> See, e.g., “Statement of Commissioner Marietta S. Robinson on the Appropriateness of Civil Monetary Penalties Generally and The Recent Settlements with Teavana Corporation and Jarden Consumer Solutions,” Consumer Product Safety Commission Statements, June 10, 2016, available at <a href="https://www.cpsc.gov/about-cpsc/commissioner/marietta-s-robinson/statements/statement-of-commissioner-marietta-s-robinson" target="_blank">https://www.cpsc.gov/about-cpsc/commissioner/marietta-s-robinson/statements/statement-of-commissioner-marietta-s-robinson</a>.

cpsc-leadership-square_thumbnail.jpg

A Changing of the Guard: Same Enforcement Trend under New CPSC Leadership?

A Changing of the Guard: Same Enforcement Trend under New CPSC Leadership?

cpsc-leadership-square_image.jpg

Republican Ann Marie Buerkle was named Acting Chairman of the Consumer Product Safety Commission (CPSC) on February 9, 2017, replacing former Chairman and Democ

Earlier this month, the Washington Supreme Court saddled medical device manufacturers with a new duty to warn under Washington law—the duty to warn hospitals about potential risks their products may pose—and eroded exemptions from strict liability afforded to manufacturers of certain “unavoidably unsafe” products.<a href="#_ftn1" name="_ftnref1">[1]</a>  This decision comes as a surprise and represents an unexpected shift in the law with regard to medical device manufacturers.Background  Intuitive Surgical, Inc. (Intuitive) manufactures and markets the da Vinci System robotic device—a device that has been used for robotic laparoscopic surgeries for nearly two decades.  Due to its complexity, the da Vinci System may only be used by credentialed surgeons.In this case, Intuitive sold the da Vinci System to a hospital in Washington State.  Separately, Intuitive provided a user’s manual with warnings to the doctors that would use the device.  A credentialed doctor used the da Vinci System to treat Plaintiff’s prostate cancer in September 2008.  According to the opinion, the doctor did not follow all of the warnings, and Plaintiff experienced complications during the procedure.  As a result, Plaintiff alleged that his quality of life was reduced.Plaintiff sued the doctor who performed his surgery, his partner and their medical practice, the hospital that purchased the da Vinci Robot, and Intuitive.  Plaintiff settled with the medical provider defendants before trial, leaving Intuitive as the only defendant.  The trial court granted summary judgment in Intuitive’s favor on all claims except Plaintiff’s failure-to-warn claim under the Washington Product Liability Act (WPLA).  The case went to trial.  The jury returned a verdict for Intuitive, specifically finding it was not negligent in providing warnings or instructions to the doctor who performed the surgery.  On appeal, Plaintiff pursued a number of arguments, including that the trial court (1) erred in declining to instruct the jury that Intuitive had a duty to warn the hospital and (2) improperly applied a negligence standard to Plaintiff’s failure-to-warn claims (rather than strict liability).  The case was affirmed on appeal and the Washington Supreme Court granted review.Evolving LawThe Washington Supreme Court made two significant holdings, finding the trial court erred by:  (1) not instructing the jury on Intuitive’s duty to warn the purchasing hospital; and (2) improperly applying the negligence standard, rather than strict liability, to Plaintiff’s failure to warn claim.A New Duty to Warn HospitalsThe court created a new duty to warn hospitals.  The court reasoned that this duty arises from the WPLA, which requires manufacturers to warn of risks to “purchasers” of dangerous products.  But even the court could not decide whether the text of the statute supports this duty.  At one point the court admits that “the duty [to warn hospitals] is not explicitly stated in the text of the [WPLA].”  Yet in another part of the opinion the court agrees with plaintiff’s argument “that the manufacturer’s duty to warn exists in the plain text of the WPLA.”<a href="#_ftn2" name="_ftnref2">[2]</a>  Ultimately, the court reasoned that the text of the WPLA requires manufacturers to provide warnings “with” products and therefore the purchaser (here, the hospital) is owed product warnings “with” the product.  The court conceded that the “physician is in the best position to make a decision regarding the patient’s treatment,” but noted that “the hospital is not completely absent from the process.”<a href="#_ftn3" name="_ftnref3">[3]</a>  Following this unprecedented path, the court held that the warnings provided to the credentialed doctor should also have been given to the hospital.  Rather than rely on legal precedent, however, the court leaned on policy and logic arguments, as well as dicta from other cases.  The result opens a Pandora’s Box of questions for manufacturers seeking to warn end users and learned intermediaries about its products.  For example, what entities or individuals in various distribution chains require warnings?  And who qualifies as a purchaser?In fashioning this new duty, the court held that the learned intermediary doctrine did not apply here because the manufacturer’s duty ran to the hospital.  By contrast, the learned intermediary doctrine allows manufacturers to discharge their duty to warn the patient by warning the doctors prescribing the products.  The dissenting Justice noted that the court lost sight of how the duty to warn translates to liability.  Specifically, this unprecedented duty to warn the hospital, even if supported in law, is only a duty owed to the hospital and should not form the basis for recovery by the Plaintiff/patient.  Id. at *37 (“[Plaintiff] cannot invoke a duty owed to [the hospital] to recover damages from Intuitive.”)Comment k Protections InapplicableUnfortunately, the court also reinterpreted and limited the protections provided to certain manufacturers of unavoidably unsafe products.  Comment k to the Restatement (Second) of Torts, § 402A concerns unavoidably unsafe products (products incapable of being made safe that are not unreasonably dangerous given the public benefit they offer).  Recognizing the public policy benefits of keeping such products on the market, comment k exempts manufacturers from strict liability if they produce unavoidably unsafe products so long as the products are “properly prepared and marketed, and proper warning is given.”<a href="#_ftn4" name="_ftnref4">[4]</a>  In short, manufacturers of unavoidably unsafe products are held to negligence, not strict liability standards.  Ignoring cases that applied this negligence standard, and finding “no binding precedent in Washington” on the issue, the court determined that “proper warnings are a prerequisite to application of the exception” provided by Comment k.<a href="#_ftn5" name="_ftnref5">[5]</a>  The court reasoned that because Intuitive did not provide warnings to the hospital, application of the Comment k protection was improper and Intuitive should be judged on a strict liability basis.ConclusionIn sum, the Washington Supreme court (1) expanded medical device manufacturers’ duty to warn to hospitals, and (2) stripped away a layer of protection offered to manufacturers of unavoidably unsafe products.  Fortunately, this case appears to be an outlier, and is unlikely to be followed in other jurisdictions that adhere to traditional principles of product liability law.<a href="#_ftnref1" name="_ftn1">[1]</a> Taylor v. Intuitive Surgical, Inc., No. 92210-1, 2017 Wash. LEXIS 200, at *2 (Feb. 9, 2017)<a href="#_ftnref2" name="_ftn2">[2]</a> Id. at *11-12<a href="#_ftnref3" name="_ftn3">[3]</a> Id. at *14-15<a href="#_ftnref4" name="_ftn4">[4]</a> Restatement 2d of Torts, § 402A (2nd 1979)<a href="#_ftnref5" name="_ftn5">[5]</a> Taylor, No. 92210-1, 2017 Wash. LEXIS 200, at *25, 28

medical_thumb_thumbnail.jpg

Expanding Duties and Eroding Protections for Medical Device Manufacturers

Expanding Duties and Eroding Protections for Medical Device Manufacturers

medical_thumb_image.jpg

Earlier this month, the Washington Supreme Court saddled medical device manufacturers with a new duty to warn under Washington law—the duty to warn hospitals ab

On February 2, 2017, the Central District of California terminated a false advertising lawsuit against Schwabe North America, Inc. and Nature’s Way Products, LLC (Defendants), based on allegations that the companies misrepresented the cognitive benefits of two Ginkgo biloba products.  Sonner v. Schwabe North America, Inc. et al., Case No. 15-1358-VAP (C.D. Cal., filed July 7, 2015).  The court granted Defendants’ motion for summary judgment, finding that Plaintiff Kathleen Sonner (Plaintiff) had failed to establish that the claimed memory benefits were provably false.Background of the Case.  On July 7, 2015, Plaintiff Kathleen Sonner filed a class action against Defendants, alleging that the companies had falsely advertised that Ginkgold and Ginkgold Max products had cognitive benefits, including mental sharpness, memory, and concentration.  The complaint alleged claims under the Wisconsin Unfair Trade Practices Act (UTPA), California’s Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA), and breach of express warranty.  Ms. Sonner sought to represent a class of consumers who had purchased the Ginkgold and Ginkgold Max products in the United States.Plaintiff Had Standing to Pursue Claims for Products Not Purchased.  Defendants argued that Plaintiff lacked standing to pursue claims as to the Ginkgold Max product, which Plaintiff never purchased.  The court disagreed, finding that she had standing to assert claims for unnamed class members because the two products were “essentially identical.”  The only purported difference between the products—the level of active ingredient EGb 761—was irrelevant since the dispute was whether any amount of EGB 761 provided cognitive benefits.Plaintiff Failed to Show the Cognitive Benefits Advertisements Were False or Misleading.  Defendants argued that Plaintiff’s UCL and CLRA claims were barred because they were “lack of substantiation claims,” which may not be brought by private individuals.  But the court found that Plaintiff did more than claim that Defendants lacked substantiation for their advertising claims; she provided evidence of scientific reports concluding that Ginkgo biloba does not appear to provide cognitive health benefits.  As such, the relevant inquiry was whether a reasonable juror could find that Plaintiff had proven that Defendants’ advertising claims were false or misleading.To resolve that inquiry, the court analyzed each side’s proffered evidence, including quantitative meta-analyses and clinical studies, in what the court called the “Battle of the Experts.”  Plaintiff criticized Defendants’ reliance on less recent studies and criticized the fact that Defendants’ studies conflicted with what Plaintiff claimed was the most authoritative source of review and synthesis.  But the court found that merely taking issue with the strength of the studies was not enough to prove their falsity.Plaintiff also argued that Mullins v. Premier Nutrition Corp., 178 F. Supp. 3d 867 (N.D. Cal. 2016) compelled her recovery.  In that case, the plaintiff brought almost identical UCL and CLRA claims against a defendant that had advertised the health benefits of its product.  The court in Mullins found that plaintiff had met her burden to establish that a reasonable jury could find that defendant’s claims were provably false by offering principled, supported critiques of the studies relied upon by defendants.  The Plaintiff in Mullins was also entitled to recover under a theory that the representations were misleading because a reasonable juror could conclude that the “vast weight of the competent evidence establishe[d] that th[e] health claims [were] false.”The court found that Mullins did not support recovery.  Unlike in Mullins, the Plaintiff failed to offer “principled, supported critique” of “each of the studies finding beneficial effects.”  Nor did Plaintiff challenge the methodology, structure, or independence of any of the studies.  As such, Plaintiff failed to meet her burden of proving falsity.For these reasons, the court held that Defendants were entitled to summary adjudication as to Plaintiff’s UCL and CLRA claims.  The court also granted Defendants’ motion with regards to Plaintiff’s UTPA claim and breach of express warranty claim finding that Plaintiff had failed to identify any express warranty.Takeaway.  Companies should carefully consider which scientific evidence they use to support defenses in false advertising cases, and should be on the lookout for outside studies that may challenge the methodology, structure, or independence of proffered scientific evidence.

ginkgo_thumb_thumbnail.jpg

District Court Sacks Ginkgo Biloba False Advertising Case

District Court Sacks Ginkgo Biloba False Advertising Case

ginkgo_thumb_image.jpg

On February 2, 2017, the Central District of California terminated a false advertising lawsuit against Schwabe North America, Inc. and Nature’s Way Products, LL

Defendants successfully argued “fraudulent joinder” in Bahalim v. Ferring Pharmaceuticals, Inc., winning dismissal of the case in its entirety.<a href="#_ftn1" name="_ftnref1">[1]</a>  The case was decided on Plaintiffs’ motion to remand and Defendants’ motions to dismiss after Defendant Ferring Pharmaceuticals removed the suit to federal court based on diversity jurisdiction.  The court rejected Plaintiffs’ argument that the forum defendant rule applied and ultimately dismissed the case.BackgroundFerring manufactures and distributes Bravelle, a drug designed to treat infertility in women.  Plaintiffs, who were citizens of Texas and Utah, sued Ferring and Stericycle in Illinois state court.  They alleged that Ferring recalled multiple lots of the drug that did not meet potency specifications and that Stericycle administered the recall.  Plaintiffs further alleged that they consumed Bravelle from the recalled lots and asserted claims based on negligence, strict liability, product liability, and express and implied warranties.Ferring removed the case to federal court based on complete diversity of citizenship.  Plaintiffs argued in a motion to remand that removal was improper under the forum defendant rule, which prohibits removal premised on diversity in cases where at least one defendant is a citizen of the forum state.  Although Stericycle was a citizen of the forum state Illinois, Ferring argued Plaintiffs had fraudulently joined Stericycle, and therefore removal was proper.Fraudulent Joinder DoctrineTo establish fraudulent joinder, a defendant must prove that the plaintiff cannot establish a cause of action against the forum state defendant after resolving all issues of fact and law in favor of the plaintiff.  The court considered the policy interests articulated in Morris v. Nuzzo, a Seventh Circuit opinion that considered fraudulent joinder in the context of the forum defendant rule.<a href="#_ftn2" name="_ftnref2">[2]</a>The court concluded that:  a plaintiff’s interest in selecting the forum is less compelling when he or she joins a non-diverse defendant; improperly joining a forum defendant lessens the weight provided to a plaintiff’s choice of forum; and neither plaintiff here was an Illinois citizen, thus weakening the court’s deference to plaintiffs’ choice of forum.  Furthermore, the forum defendant rule only applies where a resident defendant is properly joined and served—but a fraudulently joined forum defendant is not a properly joined defendant.  Therefore, the court concluded that the interest in confining federal jurisdiction to its appropriate statutory limits weighed in favor of Defendants.Finally, the court determined that Plaintiffs could not maintain a failure to warn or negligence claim against Stericycle, and had improperly joined Stericycle for the sole purpose of avoiding removal to federal court.  In support of its conclusion, the court noted that Stericycle did not manufacture, promote, distribute, or sell Bravelle.  Therefore, Plaintiffs could not bring a product liability failure to warn claim against Stericycle under the applicable state laws.  Plaintiffs’ negligence claims against Stericycle were similarly without merit.ConclusionHaving concluded that the fraudulent joinder doctrine applied and that Plaintiffs’ claims against Stericycle had no chance of success, the court granted Stericycle’s motion to dismiss.  The court also granted Ferring’s motion to dismiss for lack of personal jurisdiction, holding that Ferring did not have sufficient minimum contacts in Illinois to establish specific jurisdiction.The fraudulent joinder doctrine is not commonly raised and may often be overlooked as a litigation tool for defendants.  Although applicable only in specific circumstances, Bahalim proves that it is worth asserting in appropriate cases.<a href="#_ftnref1" name="_ftn1">[1]</a> Bahalim v. Ferring Pharmaceuticals, Inc., Case No. 16 C 8335, 2017 WL 118418 (N.D. Ill. Jan. 12, 2017).<a href="#_ftnref2" name="_ftn2">[2]</a> Morris v. Nuzzo, 718 F.3d 660 (7th Cir. 2013).

scheinok_brittany_blog_150x150.png

scheinok_brittany_common_640x280.jpg

scheinok_brittany_heroretina_2700x1160.jpg

scheinok_brittany_mobileretina_750x1040.jpg

scheinok_brittany_social_600x600.jpg

Associate

Brittany Scheinok is an associate in the Litigation Department of the firm’s San Diego office.