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.

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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).

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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.

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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.

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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.

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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

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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

A judge in the Eastern District of California recently dismissed a class action filed against LogMeIn based on the company’s decision to terminate its free app, which allowed users to access a remote desktop computer via a virtual private network. Handy v. LogMeIn, Inc., Case No. 1:14-cv-01355-JLT (E.D. Cal. Jan. 27, 2016). The court held that Plaintiff failed to show that LogMeIn misrepresented the discontinuance of the free app or that it misled users into believing that the free app and paid subscription were “companion products” such that discontinuation of the app made the other products less valuable.LogMeIn’s Products. LogMeIn offered a free app, as well as a second product, Ignition, which allowed users access to the app using a table or smartphone for a one-time fee of $29.99. In 2014, LogMeIn notified users of the free app and Ignition that it would no longer offer the free product and was planning to migrate all users to a paid subscription service, which offered a few extra amenities. Plaintiff—a user of the free app and purchaser of Ignition—brought suit under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL), alleging that the company failed to properly notify users that it would discontinue its products and that, had he known LogMeIn would do so, he would not have purchased Ignition.LogMeIn filed a motion to dismiss Plaintiff’s claims and a motion for summary judgment. Since the court considered evidence outside the pleadings, it applied summary judgment standards and ruled in favor of LogMeIn.Failure to Identify Any Affirmative Misrepresentation. The court found that Plaintiff claimed the following: (1) LogMeIn led consumers to believe that the free app was being discontinued and that users had to pay for an annual subscription if they wanted to use the services provided by the app; and (2) LogMeIn led users to believe that the free app and the paid subscription were “companion services” and failed to inform users that the discontinuation of the free app would make the subscription app less valuable. The court rejected both theories.First, the court held that LogMeIn did not misrepresent its intention to discontinue its free app and the Ignition product. LogMeIn explained its migration plan and offered consumers a six-month free subscription to the new subscription-based service. It further explained that, regardless of whether users accepted the complementary subscription, they could continue to use Ignition until it was discontinued. This is exactly what Plaintiff did: he continued to use the Ignition product throughout 2014 and 2015. Because Plaintiff was not “tricked” by LogMeIn’s statement and did not buy the new subscription-based product because of any alleged misrepresentation, he could not base a claim on this statement. The court noted:<ul style="list-style-type: none;"><li>While he may be outraged by what he feels occurred to others, the Court is not clear why he believed that this outrage makes him aggrieved such that he can vindicate this grievance in this litigation.</li></ul>Second, the court held that Plaintiff failed to show that the free app and Ignition were “companion services” such that Ignition was less valuable without the free app. It noted that Plaintiff used the free app for more than a year before buying Ignition and then used Ignition for more than a year after the free app had been discontinued. The products, therefore, were not dependent on one another.Takeaway. Fraud-based claims under the UCL and FAL are subject to heightened pleading requirements. Plaintiffs must allege reliance on specific statements and injury in fact as a result. Courts are increasingly dismissing claims that fail to allege such individualized reliance and injury.

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

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LogMeIn Class Action Dismissed: Termination of Free App Not False Advertising

Digital Single Market Update: Technology Standardization in the EU

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A judge in the Eastern District of California recently dismissed a class action filed against LogMeIn based on the company’s decision to terminate its free app,

LogMeIn Class Action Dismissed: Termination of Free App Not False Advertising

Four years after California’s genetically engineered (GE) food labeling initiative was defeated, but just days before Vermont’s GE law is to go into effect, the U.S. Senate is poised to impose such labeling nationwide. The proposed legislation is the result of a compromise of interests between Senate Agriculture Chairman Pat Roberts, R-Kansas, and ranking Democrat Debbie Stabenow of Michigan, and will need 60 votes to pass the Senate.

Nationwide GE Labeling Leaps Forward

Four years after California’s genetically engineered (GE) food labeling initiative was defeated, but just days before Vermont’s GE law is to go into effect, the

Nationwide GE Labeling Leaps Forward

On Tuesday, June 21, the Federal Aviation Administration issued Part 107, the Final Rule for Operation and Certification of Small Unmanned Aircraft Systems (UAS). The Rule comes sixteen months after the FAA issued its Notice of Proposed Rulemaking (NPRM) for small UAS, and is the first step in the FAA’s plan to incrementally incorporate UAS into the national airspace. The FAA stated that the UAS industry estimates that “the rule could generate more than $82 billion for the U.S. economy and create more than 100,000 new jobs over the next 10 years.” The rule will take effect in late August 2016.

FAA Issues Long-Awaited Final Rule for Small Unmanned Aircraft Systems

On Tuesday, June 21, the Federal Aviation Administration issued Part 107, the Final Rule for Operation and Certification of Small Unmanned Aircraft Systems (UAS

FAA Issues Long-Awaited Final Rule for Small Unmanned Aircraft Systems

President Obama has signed the Frank R. Lautenberg Chemical Safety for the 21st Century Act, which amends the Toxic Substances Control Act (TSCA) for the first time since it was enacted in 1976. The compromise bill passed by Congress is a major accomplishment at the end of President’s Obama’s administration.The amendment will add new teeth to TSCA, a federal statute regulating the manufacture and sale of chemicals. The law has long been considered as ineffectual due in part to a requirement that EPA implement the “least burdensome” regulations. By removing that language and giving new regulatory powers to EPA, the Lautenberg Act will significantly change the regulatory landscape for chemical manufacturers, processors, and importers.

Federal Toxics Law Grows Up: Congress Strengthens the Toxic Substances Control Act

President Obama has signed the Frank R. Lautenberg Chemical Safety for the 21st Century Act, which amends the Toxic Substances Control Act (TSCA) for the first 

Federal Toxics Law Grows Up: Congress Strengthens the Toxic Substances Control Act

The FDA recently announced that it would once again delay promulgation of its proposed rule for generic drug labeling obligations. This action followed introduction of a spending bill that would have blocked funding for the rule in its current form.The rule, originally proposed in 2013, directly responds to the holding in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011). There, the Supreme Court held that federal law preempts certain failure-to-warn claims against generic drug manufacturers because generic labels cannot deviate from their brand-name equivalents. Consumer groups felt this was an unjust result. In many cases it left those injured by generic drugs without any remedy.In order to address what the Supreme Court labeled the “unfortunate hand that federal drug regulation has dealt” to generic drug users, the FDA’s proposed rule would allow generic drug manufacturers to update product warnings with new safety information, even if the revised labeling differs from the branded labeling. This would drastically change the pharmaceutical landscape, as currently only brand-name drug makers can revise warning labels without prior FDA approval. While the proposed rule would “permit” generic drug manufacturers to update their labels, in reality such a change would constitute a requirement due to the likely liability implications should a generic drug manufacturer fail to do so.This latest delay follows on the heels of recent congressional action directed toward the proposed rule. In April, the House Appropriations Committee introduced a congressional spending bill for 2017 that creates a serious roadblock for the proposed rule. The bill states that no funds will be made available to the FDA to finalize or implement the proposed rule unless the final version requires prior FDA approval for any change to a generic drug label. Clearly, members of the predominately Republican House Appropriations Committee agree with those industry groups and companies who have expressed grave concerns over the rule as currently drafted. Those who disagree with the proposed rule believe it would cause confusion and jeopardize patient safety due to the potential for conflicting labels. Requiring prior FDA approval would ensure consistency while still requiring generic manufacturers to maintain responsibility for safety warnings.On May 18, the FDA issued a notice that the date of publication of the rule has been extended until April 2017. This is the third delay since the FDA originally proposed the rule in 2013.<a name="_ftnref1" href="#_ftn1">[1]</a> An FDA spokeswoman commented that the extension reflects “ongoing work” but was not more specific. While the FDA has not commented on the spending bill, it seems highly likely that the latest delay is directly related and that the rule will be revised before it is finalized. We will continue to monitor future progress and provide updates accordingly. <a name="_ftn1" href="#_ftnref1">[1]</a> FDA Proposed Rule in Flux?; $4 Billion Price Tag for Pleasing Plaintiffs’ Bar? New Study Estimates Costs of FDA’s Proposed Rule on Generic Drug Labeling; Goodbye to Generic Preemption? FDA Publishes Proposed Rule.

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

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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

Still Waiting—FDA Delays Rulemaking

The FDA recently announced that it would once again delay promulgation of its proposed rule for generic drug labeling obligations. This action followed introduc

Still Waiting—FDA Delays Rulemaking

On April 22, 2016, in Alaei v. Kraft Heinz Food Co. (“Heinz”), No. 3:15-cv-02961, Southern District of California Judge Michael M. Anello granted defendant Heinz’s motion to dismiss without prejudice plaintiff Suzanne Alaei’s “Made in the U.S.A.” false advertising claims.  The court held that plaintiff failed to plead facts with the particularity required for fraud-based claims under Federal Rule of Civil Procedure 9(b), and lacked standing regarding products she did not purchase.Background.  Plaintiff’s First Amended Complaint, filed on January 19, 2016, alleged that defendant’s “Made in the U.S.A.” advertisements violated California’s Unfair Competition Law (UCL) and the Consumer Legal Remedies Act (CLRA). Plaintiff alleged that she purchased a bottle of defendant’s Heinz 57 sauce that included the claim “MFD. In U.S.A.” on the product label, but that the sauce was made, or contained ingredients made, outside the United States. Plaintiff claimed that had she known this, she would not have purchased Heinz’s product.The “Who, What, When, Where, and How.”  The court began its analysis by noting that, under Rule 9(b), a fraud allegation must include the “who, what, when, where, and how” of the circumstances giving rise to a claim.  While plaintiff alleged the basic factual premise underlying her claims — that Heinz falsely labeled its products as “Made in the U.S.A.” even though certain ingredients used in its products were manufactured outside the United States — she offered little detail beyond this. Her complaint did not allege that the bottle of Heinz 57 sauce plaintiff purchased was manufactured outside the United States or contained any ingredients that originated outside of the United States. And, while plaintiff challenged the origin of certain ingredients, her complaint contained no allegations regarding where any of Heinz’s products or their ingredients were actually manufactured.No Standing For Products Not Purchased. Although plaintiff alleged that she purchased a single bottle of Heinz 57 sauce, she sought to represent a class of all Californians who purchased any Heinz product advertised as “Made in the U.S.A.,” but which was foreign-made or contained foreign-made ingredients. The court held that plaintiff lacked standing to make claims as to products she never purchased and whose advertising she did not see unless those products and alleged misrepresentations were “substantially similar” to those she bought.  Because plaintiff failed even to identify other offending products in her complaint, the court could not assess the similarity of such products to the product plaintiff purchased. The court held that plaintiff lacked standing to sue as to products she did not purchase and dismissed her class claims as to those products under Rule 12(b)(1).Takeaway. Alaei joins the list of California federal district court cases we have highlighted that reject plaintiffs’ false advertising or misbranding claims at the pleading stage for failure to meet Rule 9(b)’s particularity requirement. See, e.g., Davidson v. Kimberly-Clark Corp., No. C 14-1783 PJH (N.D. Cal. Dec. 19, 2014) (see our Kimberly-Clark post); Figy v. Frito-Lay N. Am., Inc., No. 13-3988-SC (N.D. Cal. Aug. 12, 2014) (see our Frito-Lay post). Alaei also supports the majority trend in the Ninth Circuit holding that plaintiffs lacks standing to challenge products they did not purchase unless they at least demonstrate substantial similarity to purchased products. See, e.g., Gallagher v. Chipotle Mexican Grill Inc., No. 15-cv-03952-HSG (N.D. Cal. Feb. 5, 2016); Maxwell v. Unilever United States Inc., No. 12-cv-01736-EJD (N.D. Cal. Aug. 28, 2014); Bruton v. Gerber Prods. Co., No. 12-cv-02412-LHK (N.D. Cal. Sept. 6, 2013) (see our Gerber post). These decisions are a win for companies fighting vague, conclusory allegations of false advertising that challenge a host of products.

The Devil’s in the Details: Court Dismisses “Made in the U.S.A.” Fraud Claims against Heinz Because Plaintiff Failed to Allege Specific Facts and Lacked Standing to Sue for Products She Did Not Purchase

On April 22, 2016, in Alaei v. Kraft Heinz Food Co. (“Heinz”), No. 3:15-cv-02961, Southern District of California Judge Michael M. Anello granted defendant Hein

The Devil’s in the Details: Court Dismisses “Made in the U.S.A.” Fraud Claims against Heinz Because Plaintiff Failed to Allege Specific Facts and Lacked Standing to Sue for Products She Did Not Purchase

The Supreme Court case Spokeo, Inc. v. Robins reaffirmed and clarified the requirements necessary for plaintiffs to establish standing.<a href="#_ftn1" name="_ftnref1">[1]</a>  As evidenced by the recent First Circuit case Hochendoner v. Genzyme Corp., the analysis set forth in Spokeo is essential to determining the viability of products liability claims.<a href="#_ftn2" name="_ftnref2">[2]</a>  There, the two consolidated class action lawsuits involved products liability allegations against a drug manufacturer.  But because plaintiffs did not allege sufficiently specific harm, the First Circuit affirmed dismissal of the case on grounds of Article III standing.<a href="#_ftn3" name="_ftnref3">[3]</a>BackgroundThe plaintiffs and putative class members in Hochendoner all have Fabry disease, a rare genetic disorder that prevents the body from properly breaking down fats.  Fabry disease can lead to gastrointestinal issues, stroke, and heart and kidney failure.  Although there is no cure for Fabry, it can be effectively treated with Fabrazyme, the only FDA-approved enzyme replacement therapy for the disease.  Defendant Genzyme Corporation is the exclusive licensee of the Fabrazyme patent and is the only producer of Fabrazyme.  Various problems with Genzyme’s manufacturing facilities led to a shortage of Fabrazyme beginning in 2009.  Genzyme initiated a rationing plan and was unable to fully restore supplies of Fabrazyme until 2012.The plaintiffs in Hochendoner alleged several causes of action connected to the Fabrazyme shortage, including statutory violations, torts, breaches of warranty, breaches of contract, and losses of consortium.  Plaintiffs challenged the dismissal of two categories of claims on appeal: (1) plaintiffs’ claim that patients experienced an accelerated course of deterioration on the lower dose of Fabrazyme; and (2) plaintiffs’ claim that they experienced harm attributable to tainted Fabrazyme.  Although Genzyme challenged plaintiffs’ standing for the first time on appeal, the First Circuit noted that standing arguments may be raised at any stage of litigation.Standing AnalysisCiting Spokeo, the court recognized the Supreme Court’s recent articulation of Article III standing as having two distinct requirements:  concreteness and particularization.  While concreteness focuses on whether an injury actually exists, the particularization requirement ensures that a plaintiff has been personally affected by the injurious conduct.  Plaintiffs did not link the alleged injuries to any specific plaintiff, thus failing to satisfy the particularization requirement.  The complaints simply listed each plaintiff’s name and place of residence and alleged that each plaintiff had Fabry disease and had a history of taking Fabrazyme.  However, the complaints did not allege any specific information regarding the harm that was inflicted on each individual plaintiff.  With the exception of one named plaintiff, the court concluded that none of the plaintiffs had standing to assert claims based on their theories of injury because they failed “to plausibly allege that he or she suffered an injury in fact as a result of accelerated disease progression or receipt of a contaminated drug.”Future ImplicationsThis case is indicative of the implications that Spokeo will have on all cases, including those involving products liability claims.  The Court in Spokeo emphasized that plaintiffs must allege an injury that is both concrete and particular.  The particularization requirement will likely continue to be especially important in class actions asserting allegations against drug manufacturers.  Hochendoner set an important precedent in requiring plaintiffs to link alleged injuries to specific plaintiffs and to allege much more than generalized harms. <a href="#_ftnref1" name="_ftn1">[1]</a> Spokeo, Inc. v. Robins, No. 13-1339, slip op. (U.S. May 16, 2016).  The claims in Spokeo were related to statutory violations, but courts have found Spokeo to apply in a variety of cases.<a href="#_ftnref2" name="_ftn2">[2]</a> Hochendoner v. Genzyme Corp., Nos. 15–1446, 15–1447, 2016 WL 2962148 (1st Cir. May 23, 2016).<a href="#_ftnref3" name="_ftn3">[3]</a> The district court had dismissed the case not for lack of standing, but for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).

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Associate

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

Brittany Scheinok

Generalized Products Liability Claims Not Viable Post-Spokeo

The Supreme Court case Spokeo, Inc. v. Robins reaffirmed and clarified the requirements necessary for plaintiffs to establish standing. As evidenced by the rece

Generalized Products Liability Claims Not Viable Post-Spokeo

In a recent ruling, California’s Court of Appeal unanimously affirmed the dismissal of California’s complaint against Delta Air Lines, Inc. (“Delta”), which alleged that the company’s Fly Delta mobile application violated California’s privacy laws.<a href="#_ftn1" name="_ftnref1">[1]</a> The Court of Appeal held that the lawsuit was expressly preempted by the Airline Deregulation Act of 1978 (ADA). The holding is in line with other cases broadly applying the ADA’s preemption provision and limits the extent to which airlines may be required to comply with state privacy laws.California’s LawsuitThe California Attorney General (AG) brought the lawsuit against Delta to enforce California’s Online Privacy Protection Act of 2003 (CalOPPA), Cal. Bus. & Prof. Code §§ 22575-22579. In pertinent part, CalOPPA requires an operator of a commercial website or online service to draft and post online a privacy policy informing consumers in California “of the Web site’s or online service’s information practices with regard to the consumers’ personally identifiable information[.]” CalOPPA also places certain other requirements on operators of websites or online services.The AG argued that Delta violated CalOPPA in connection with the Fly Delta mobile app, which can be downloaded from the Internet and used on smart phones and other mobile devices (and therefore arguably makes Delta “an operator of online services” subject to CalOPPA). Users can do a variety of things on the app, including checking in for flights, viewing reservations for air travel, pricing and buying tickets, paying for and tracking checked baggage, and accessing their frequent flyer accounts. The app also purportedly allows users to send and receive information over the Internet, and collects certain personally identifiable information (PII) about individuals residing in California.The AG alleged that Delta did not conspicuously post a privacy policy as required by CalOPPA.  According to the complaint, app users allegedly were not informed that their PII was collected, how Delta used such information, or with whom that information was shared, disclosed, or sold. The AG first notified Delta that the app did not comply with CalOPPA in an October 2012 letter.  Less than two months later, the AG filed its complaint alleging that the app “does not have a privacy policy conspicuously posted, i.e., reasonably accessible to consumers within the [mobile application.]” The AG’s complaint contained a single cause of action under California’s Business and Professions Code section 17200 (the “unfair competition law” or UCL), claiming that Delta’s CalOPPA violations were “unlawful, unfair, or fraudulent business acts and practices” under the UCL.Delta responded with a demurrer in which it argued that the ADA expressly preempted the AG’s lawsuit. The ADA is a 1978 federal law intended to remove government control over fares, routes, and new carriers entering the market in the commercial aviation field. The ADA contains an express preemption provision that prohibits the states from enacting or enforcing any law, regulation, or provision “related to a price, route, or service of an air carrier[.]” 49 U.S.C. § 41713(b)(1). The trial court agreed with Delta, sustaining the demurrer without leave to amend and dismissing the complaint with prejudice. The AG appealed.The Court of Appeal’s OpinionThe Court of Appeal affirmed, holding that the ADA preempted California’s UCL claim against Delta. The court began by reiterating the “‘two cornerstones’ of federal preemption analysis”: First, that congressional intent is the focus of the analysis, and second, that there is a presumption against preemption.            Supreme Court PrecedentApplying those cornerstone principles here, the court was guided by three cases in which the U.S. Supreme Court addressed the reach of the ADA’s preemption provision: Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992), American Airlines, Inc. v. Wolens, 513 U.S. 219 (1995), and Northwest, Inc. v. Ginsberg, 134 S.Ct. 1422 (2014).In Morales, the Supreme Court held that the ADA preempted Travel Industry Enforcement Guidelines composed by the National Association of Attorneys General (NAAG). The NAAG guidelines purported to govern the content and format of airline fare advertising and were designed to stop allegedly deceptive airline advertisements. The Supreme Court interpreted the “relating to” language in the ADA preemption clause broadly, and held that the ADA preempted the NAAG guidelines because they were “related to” a price, route, or service of an air carrier.  Morales, 504 U.S. at 383-384.The Court similarly found that the ADA preempted the plaintiffs’ claims in Wolens. In Wolens, the plaintiffs alleged American Airlines’ retroactive modification of its frequent flyer program violated Illinois’ Consumer Fraud and Deceptive Business Practices Act. The Supreme Court held that the claims related to American Airlines’ “‘[prices],’ i.e. American’s charges in the form of mileage credits for free tickets and upgrades, and . . . ‘services,’ i.e. access to flights and class‑of-service upgrades unlimited by retrospectively applied capacity controls and blackout dates.” Wolens, 513 U.S. at 226.  Because they related to prices and services, the claims were preempted by the ADA.In Ginsberg, the Supreme Court reaffirmed its broad interpretation of the ADA’s preemption provision. The Court concluded that the ADA preempted the plaintiffs’ claims for breach of the implied covenant of good faith and fair dealing stemming from allegations that the airline terminated their memberships to its frequent flyer program. The Court found that airline’s frequent flyer program was “related to” the airline’s prices and services, and thus that the claims were preempted by the ADA.            ADA Preemption, CalOPPA, and the Fly Delta AppTurning to California’s claim here, the court began by addressing a few issues that had been resolved by Morales and Wolens.First, the court noted that, in assessing whether the ADA preempts the AG’s UCL action, the court would examine the underlying state law predicate—i.e., CalOPPA.Second, the court explained that, in analyzing the preemption issue, it was not required to apply the presumption against preemption because the field governed by the ADA—air transportation—has long been regulated at the federal level.Third, the court rejected the AG’s argument that the complaint did not “relate to” Delta’s service. The app was designed to facilitate access to the airline’s services, and the AG was trying to compel Delta to maintain the app in compliance with CalOPPA.  Thus, the lawsuit “related to” Delta’s services. Notably, the court did not decide whether the app itself was a “service” within the meaning of the ADA.The court then concluded that the ADA preempts California’s UCL/CalOPPA claim as applied to Fly Delta. The court explained that CalOPPA is not a mere “disclosure regimen” within which operators of online services may act with broad discretion. Rather, CalOPPA is similar to the consumer protection legislation at issue in Morales and Wolens, and has the potential to intrusively regulate airlines.  Moreover, as in Morales, the obligations imposed by CalOPPA would significantly affect the airline’s ability to market its product through the app, and would therefore have a meaningful impact on the fares Delta charges. As the court explained, quoting Morales: “If each AG were to require Delta to comply with its own version of CalOPPA, it would force Delta to design different mobile applications to meet the requirements of each state. And, indeed, enforcement of the CalOPPA’s privacy policy requirements might well make it impossible for an airline to use a mobile application as a marketing mechanism at all.”Finally, the court rejected the AG’s argument that CalOPPA would have only “a peripheral effect on ticket prices, routes, or airline services.” CalOPPA would instead “require Delta to meet state standards regarding privacy policy requirements in place of the market forces currently dictating Delta’s selection and design of” Fly Delta.Because the ADA preempted California’s UCL claim for violation of CalOPPA, the court upheld the dismissal of the complaint. And it did so without leave to amend, finding that there was no reasonable possibility that the AG could amend to avoid ADA preemption.What This MeansDelta reinforces the broad scope of the ADA’s preemption provision. As the case makes clear, airlines have a strong argument that state laws like CalOPPA, which apply across industries and seem to have only a remote effect on the airline’s prices, routes, or services, simply cannot be applied to them. But this does not mean that the airlines may operate unchecked in areas governed by CalOPPA and other preempted laws. As the Delta court noted, quoting Wolens, Morales, and Ginsberg: “[T]he DOT retains authority to investigate unfair and deceptive practices and unfair methods of competition by airlines, and may order an airline to cease and desist from such practices or methods of competition.” The court further stated that DOT appears to have “taken action” related to the collection of PII by air carriers, and privacy policies for the sharing and storage of that PII. To date, however, the DOT has issued no regulations governing the form and placement of privacy policies related to an airline’s mobile app. And until the DOT does, state privacy laws cannot fill the gap. <a href="#_ftnref1" name="_ftn1">[1]</a> People ex rel. Harris v. Delta Air Lines, Inc., Case No. A139238, 2016 LEXIS 419 (Cal. Ct. App. May 25, 2016).

California Court of Appeal Finds AG’s Privacy Suit Over Fly Delta Mobile App Is Preempted

In a recent ruling, California’s Court of Appeal unanimously affirmed the dismissal of California’s complaint against Delta Air Lines, Inc. (“Delta”), which all