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

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

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

<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

Zak is an associate in the Litigation Department in Morrison Foerster’s New York office.Zak’s practice focuses on class actions, commercial litigation, white collar defense, government investigations, and antitrust litigation and counseling. He has represented clients before federal and state courts in complex commercial matters, as well as in arbitration tribunals.Zak received his J.D. from New York University School of Law in 2018, where he was inducted into the Order of the Barristers. During law school, Zak also served as the Marden executive editor for the NYU Law Moot Court Board. In 2013, Zak received his B.A. and M.A. in political science from Yale University, receiving honors in his major and the Ellsworth Prize for Best Senior Essay in the Social Sciences.

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Associate

Zak Newman

Mitchell A. Hokanson is an associate in the Litigation Department of Morrison Foerster’s San Diego office.Mitchell’s practice focuses on commercial litigation and consumer class actions. He has extensive experience with civil litigation, including managing day-to-day strategy, propounding and responding to discovery, taking and defending depositions, and engaging in motion practice. He also has experience providing regulatory advice to clients, including pro bono partners and multinational corporations. Mitchell maintains an active pro bono practice.After law school, Mitchell worked as a judicial clerk for Justice Susan M. Carney of the Alaska Supreme Court, where he drafted bench memoranda and opinions on a wide range of state and federal law topics. Prior to joining MoFo, Mitchell worked for another international law firm, where he was a member of the Complex Civil Litigation practice group, in Los Angeles, California.Mitchell received his J.D. from Columbia Law School, where he was honored as a James Kent Scholar and Harlan Fiske Stone Scholar. While in law school he was the senior executive editor of the Columbia Journal of Environmental Law and worked as a judicial intern for Judge Sandra S. Ikuta of the United States Court of Appeals for the Ninth Circuit and Judge George B. Daniels of the United States District Court, Southern District of New York. Prior to that, Mitchell earned his B.A. from Stanford University.

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Mitchell Hokanson

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FDA Seeks to Phase Out Synthetic Color Additives

Client Alert: Jury Returns Verdict in “Manufactured in the USA” False Advertising Case

ICPHSO 2025: CPSC at ICPHSO

ICPHSO 2025: State Regulation in Response to Trump’s Push for Federal Deregulation

Everyone Please Stand: Supreme Court to Consider Standing Requirements for Class Actions, With the Potential to Resolve Long-standing Multi-circuit Split.

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The Supreme Court has issued its much-anticipated ruling in Facebook v. Duguid, impacting many pending TCPA cases nationwide and providing guidance to the many businesses that engage in calling and texting campaigns. The TCPA generally requires an individual’s prior consent to use an automatic telephone dialing system (an “autodialer”) to call or text his or her mobile phone, including for non-marketing purposes. The definition of an autodialer is thus crucial to whether and when a business may call or text its customers, prospects, or even employees. Read our <a href="https://www.mofo.com/resources/insights/210405-supreme-court-ruling-limits.html?utm_source=publication&utm_medium=email">client alert</a>.

CCPA and Data Breach Class Action for Leading Software Company

BIPA Class Action Against Gaming and Hospitality Company

TCPA and Other Class Actions for Major Technology Company

Data Breach Class Action for Technology Company

Wiretap Act action against a Major Consumer Electronics Manufacturer

TCPA Class Action Against National Chain

In re Pharmaceutical Industry Average Wholesale Price Litigation

In re Verizon Wireless Data Charges Litigation

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Clients seek out Tiffany for her successful track record in defending class action claims on behalf of clients in a broad range of industries, including technology, healthcare, and consumer product companies. She represents numerous Fortune 500 companies in high-stakes litigation involving privacy and marketing claims in courts throughout the United States.

Tiffany Cheung

Clients seek out Tiffany for her successful track record in defending class action claims on behalf of clients in a broad range of industries, including technology, healthcare, and consumer product companies. She represents numerous Fortune 500 companies in high-stakes litigation involving privacy and marketing claims in courts throughout the United States.

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

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Much-Anticipated Supreme Court Ruling Limits the TCPA’s Definition of an Autodialer

Much-Anticipated Supreme Court Ruling Limits the TCPA’s Definition of an Autodialer

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The Supreme Court has issued its much-anticipated ruling in Facebook v. Duguid, impacting many pending TCPA cases nationwide and providing guidance to the many 

This summer, we <a href="https://classdismissed.mofo.com/consumer-products/schein-on-supreme-court-to-decide-key-arbitration-delegation-question/">discussed</a> that the Supreme Court is reviewing whether an arbitration agreement’s clear delegation of the question of arbitrability to the arbitrator can be negated by a provision that exempts certain claims from arbitration. Henry Schein, Inc. v. Archer & White Sales, Inc., 207 L. Ed. 2d 1050 (2019). Since the Supreme Court granted certiorari in that case, three notable appellate decisions, two in the Ninth Circuit and one in the Third Circuit, have confronted related delegation questions. These cases all underscore the importance of paying careful attention to the drafting and presentation of arbitration provisions. Even seemingly minor differences in drafting and approach can result in disputes being heard outside their intended fora.NINTH CIRCUITShivkov v. Artex Risk Solutions, Inc.On September 9, 2020, the Ninth Circuit issued a ruling in Shivkov v. Artex Risk Solutions, Inc. that addressed an issue of first impression in the circuit.[1] A large group of individuals and related business entities involved in the insurance industry filed a putative class action lawsuit alleging that the captive insurance companies that the defendants had formed and managed were illegal and abusive tax shelters. The relevant agreements between the parties contained an arbitration clause governed by the FAA, and the defendants moved to compel arbitration based on those terms. One of the key issues that the court addressed was whether the determination of the availability of class arbitration was presumptively for the court (rather than an arbitrator) to decide. The Shivkov court ruled definitively that “class arbitration is a gateway issue for a court to presumptively decide.”This did not end the court’s analysis, though. The Shivkov court still needed to address the plaintiffs’ contention that the relevant arbitration provision evidenced “a clear and unmistakable intent to delegate the issue to the arbitrator.” The plaintiffs relied on the Ninth Circuit’s 2015 decision in Brennan v. Opus Bank, where the court held that “incorporation of the AAA Rules constitutes clear and unmistakable evidence that contracting parties agreed to arbitrate arbitrability.”[2] But, unlike in Brennan, in Shivkov the relevant arbitration provisions did not incorporate the AAA rules, but rather merely required that any arbitration, if necessary, be conducted before AAA. Accordingly, the Shivkov court did not “find clear and unmistakable evidence that the parties intended to delegate the gateway issue of class arbitration to the arbitrator by virtue of the AAA Rules . . . .”  And “[b]ecause Plaintiffs d[id] not claim that any other provision demonstrate[d] a clear and unmistakable intent to delegate the availability of class arbitration to the arbitrator,” the Shivkov court determined that the availability of class arbitration remain[ed] a gateway issue” for the court to decide.[3] Ultimately, because the arbitration agreement was silent as to the availability of class arbitration, the Shivkov court easily found that the agreements did not permit class arbitration pursuant to the Supreme Court’s recent ruling in Lamps Plus. But, importantly, it was the court, not the arbitrator, that made this determination.SEIU Local 121RN v. Los Robles Regional Medical CenterEven more recently, SEIU Local 121RN v. Los Robles Regional Medical Center addressed whether the issue of the delegation of arbitrability should be treated differently in the labor context.[4] In 1996, the Ninth Circuit had determined that labor cases are different and that an arbitrator (rather than a court) should decide arbitrability as long as the agreement included a broad arbitration clause.[5] In 2010, however, the Supreme Court rejected the notion that labor arbitration disputes should be analyzed differently than commercial arbitration disputes.[6] As a result, the Los Robles court overruled the Ninth Circuit’s earlier ruling and now held that questions regarding the delegation of issues of arbitrability must be analyzed in the same way in both the labor and commercial contexts. With this new framework in place, the Los Robles court relied on the “well-settled principles ‘that whether parties have agreed to submit a particular dispute to arbitration is typically an issue for judicial determination,’” absent “‘clear and unmistakable’ evidence of the parties’ intent to have an arbitrator—rather than the court—decide whether the grievance is arbitrable.” Because the CBA at issue in Los Robles was silent as to the arbitrator’s authority to determine its own jurisdiction, the Ninth Circuit held that the district court was responsible for determining whether the grievance filed by SEIU was arbitrable.THIRD CIRCUITMZM Construction Co. v. New Jersey Building Laborers Statewide Benefit FundsOn September 14, 2020, the Third Circuit also issued a ruling regarding the delegation of questions of arbitrability to arbitrators.[7] In MZM Construction Co. v. New Jersey Building Laborers Statewide Benefit Funds, the court was confronted with an arbitration agreement that explicitly stated that the parties agree to arbitrate “questions or grievances involving the interpretation and application of this Agreement” and that “[t]he Arbitrator shall have the authority to decide whether an Agreement exists, where that is in dispute.” Despite this clear and unmistakable language, MZM argued that the entire agreement was unenforceable due to fraud in the execution of the contract containing these arbitration provisions. MZM’s president had signed a one-page short-form agreement that incorporated by reference, but did not attach, an unsigned collective bargaining agreement that contained the relevant arbitration and delegation provisions. MZM argued that the entire agreement—the short-form agreement incorporating the collective bargaining agreement that contained the arbitration and delegation provisions—could not be enforced because the company’s president had felt pressured to sign the short-form agreement due to a threatened work stoppage and there was no evidence that MZM’s president ever saw the collective bargaining agreement containing the relevant provisions. As described by the court, the “critical question” was “who decides MZM’s contract defense.”After summarizing several earlier Supreme Court and Third Circuit decisions, the MZM court recognized that none of them “dealt with a contract-formation dispute involving a delegation provision assigning that task to the arbitrator.” Relying on Section 4 of the FAA—which mandates that a court be “satisfied” that an arbitration agreement exists—the MZM court settled this open question in the Third Circuit. In line with the Fourth, Fifth, and Eighth Circuits, and district courts in the Seventh Circuit, the Third Circuit held that, “under section 4 of the FAA, courts retain the primary power to decide questions of whether the parties mutually assented to a contract containing or incorporating a delegation provision.” Therefore, because the plaintiff had stated a claim for fraud in the execution of the contract containing the delegation provision, the plaintiff had “put the formation of the delegation provision in issue and thus triggered the District Court’s power to adjudicate that claim.”The Third Circuit explained “that nothing in our decision today precludes parties from delegating issues of contract formation.”  However, “the legal effect of the delegation must come from an ‘independent source’ outside the contract whose formation or existence is being disputed,” such as a “pre-negotiation contract in which the [parties] agree to arbitrate all arbitrability issues pertaining to future contracts between them.” Ultimately, the Third Circuit held that “unless the parties clearly and unmistakably agreed to arbitrate questions of contract formation in a contract whose formation is not in issue, those gateway questions are for the courts to decide.”TAKEAWAYSShivkov and Los Robles are reminders that if a company wants an arbitrator (not the court) to determine arbitrability and treatment of class claims, it should make sure that its arbitration agreement says so in “clear and unmistakable” language. Otherwise, courts in the Ninth Circuit and elsewhere may default to the court deciding these gateway issues. The Third Circuit’s decision in MZM also shows that, even if clear and unmistakable delegation language exists, the way a company presents the agreements to the other party could result in those agreements (and the arbitration provisions within them) being interpreted by a court rather than the intended arbitrator, and even ultimately being found unenforceable. Morrison & Foerster’s <a href="https://www.mofo.com/capabilities/class-actions-mass-torts.html">Class Actions and Mass Torts</a> attorneys have advised companies on a variety of arbitration-related issues. They can provide further insights on these recent court decisions, share best practices, and help draft and present arbitration provisions based on the needs of your business.[1] 974 F.3d 1051 (9th Cir. 2020). In 2014, the Ninth Circuit issued an unpublished and nonprecedential opinion that was consistent with the ruling in Shivkov.  The Supreme Court has never taken up this gateway issue.   [2] 796 F.3d 1125, 1130 (9th Cir. 2015).[3] The Ninth Circuit rejected several other arguments offered by the plaintiffs in their attempt to escape arbitration, including their contentions that the arbitration provisions were unconscionable on fiduciary duty related grounds, the arbitration obligations did not survive termination, the parties had not agreed to arbitrate all of the plaintiffs’ claims, and non-signatories to the agreements could not compel arbitration. [4] No. 19-55185, 2020 WL 5583677 (9th Cir. Sept. 18, 2020).[5] United Bhd. of Carpenters & Joiners of Am., Local No. 1780 v. Desert Palace, Inc., 94 F.3d 1308 (9th Cir. 1996).[6] Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 300–01 (2010).[7] 974 F.3d 386 (3d Cir. 2020).

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Arbitrating Arbitrability: Three Recent Appellate Decisions on Delegation Clauses in Arbitration Agreements

U.S. Supreme Court’s Decision to Review a Pair of FTCA Cases Could Spell a Sea Change in FTC’s Enforcement Authority

This summer, we discussed that the Supreme Court is reviewing whether an arbitration agreement’s clear delegation of the question of arbitrability to the arbitr

Arbitrating Arbitrability: Three Recent Appellate Decisions on Delegation Clauses in Arbitration Agreements

The Supreme Court heard roughly an hour of oral argument on Wednesday in a pair of cases against Ford Motor Company raising important questions about the scope of personal jurisdiction. In Ford Motor Co. v. Montana Eighth Judicial District Court and Ford Motor Co. v. Bandemer, the Court must decide whether the car manufacturer was properly subjected to specific personal jurisdiction in two states where plaintiffs alleged they were injured by manufacturing defects in Ford vehicles originally made and sold elsewhere. State courts in Minnesota and Montana had said that it was enough that Ford marketed and sold the same type of cars in those states, while Ford insisted that a defendant’s in-state activities must bear a closer causal relationship to a plaintiff’s particular claims.Read our <a href="https://www.mofo.com/resources/insights/201007-supreme-court-specific-jurisdiction-ford-cases.html">client alert</a>.

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Brian Matsui co-chairs Morrison Foerster’s Appellate and Supreme Court practice. Brian is a go-to appellate advocate for sophisticated clients in complex appeals nationwide. 

Brian R. Matsui

Brian Matsui is a partner in Morrison Foerster’s Appellate and Supreme Court practice. For nearly 20 years, Brian has been a go-to appellate advocate for sophisticated clients in complex appeals nationwide. Clients turn to Brian for his substantial experience in patent appeals in the Federal Circuit. He has argued more than 10 times in that Court, winning appeals from both district courts and the Patent Trial and Appeal Board. Brian excels at applying significant legal principles to complex technologies in a way that distills them for the Court. He has done so for companies in a myriad of industries, including mobile device manufacturers, pharmaceutical companies, medical device companies, memory manufacturers, movie studios, and software companies.

Brian Matsui

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Once More Into the Jurisdictional Morass: Supreme Court Grapples With Specific Jurisdiction at Oral Argument in Ford Cases

Ninth Circuit’s Pro-Defense Decision in Hyundai Opens the Door for Class Certification Defenses

The Supreme Court heard roughly an hour of oral argument on Wednesday in a pair of cases against Ford Motor Company raising important questions about the scope 

Once More Into the Jurisdictional Morass: Supreme Court Grapples With Specific Jurisdiction at Oral Argument in Ford Cases

Despite their repeated efforts to provide guidance to lower courts, the Justices once again find themselves in a familiar position: attempting to clarify the constitutional limits on courts’ power to exercise personal jurisdiction over defendants. The Supreme Court’s docket has seen a steady stream of personal jurisdiction cases in recent years. But the lower courts just can’t seem to get it right. This time, the Court is considering the limits of specific personal jurisdiction in a pair of consolidated cases involving Ford Motor Company.Read our <a href="https://www.mofo.com/resources/insights/200916-supreme-court-ford-motor.html">client alert</a>.

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Getting Specific: Supreme Court Once Again Examines Limits of Personal Jurisdiction in Ford Motor Company Cases

Getting Specific: Supreme Court Once Again Examines Limits of Personal Jurisdiction in Ford Motor Company Cases

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Despite their repeated efforts to provide guidance to lower courts, the Justices once again find themselves in a familiar position: attempting to clarify the co

Barr v. Am. Ass’n of Political Consultants, Inc., 2020 WL 3633780, 591 U.S. __ (2020).[1]Earlier this month, the Supreme Court held, in a fractured decision yielding multiple concurring or dissenting opinions, that the 2015 government-debt exception to the Telephone Consumer Protection Act (the TCPA) permitting robocalls to cellphones solely to collect a debt owed to or guaranteed by the United States violated the First Amendment, affirming the Fourth Circuit’s decision. Id. at *2. Applying traditional severability principles, seven Justices concluded that, rather than invalidate the entire TCPA, the 2015 government-debt exception must be severed from the remainder of the statute. Id. The bottom line: the government-debt exception is gone; the rest of the TCPA remains.Questions Before the Supreme Court<ul><li>Is the government debt exception to the robocall ban to cell phones unconstitutional? YES</li><li>Is the exemption a content-based restriction requiring strict scrutiny? YES</li><li>If so, is severing the exemption from the TCPA the appropriate remedy? YES</li></ul>ReasoningThe initial question before the Court in its First Amendment analysis was whether the robocall restriction, with the government-debt exception, is content-based. Id. at *5. The Court answered in the affirmative because the law favored speech made for collecting government debt over political and other speech. Id. at *5. The Court rejected the government’s arguments that the TCPA drew distinctions based on speakers rather than content, that the legality of a robocall depends on whether a caller is engaged in a particular economic activity, not its content, and that if the TCPA is content-based, so are debt collection statutes. Id. Applying Reed, the Court reasoned that, because the government-debt exception is content-based, it is subject to strict scrutiny. Id. at *6 (citing Reed v. Town of Gilbert, 576 U. S. 155, 163 (2015)). The Government conceded that it could not satisfy strict scrutiny to justify the differentiation between government-debt collection speech and other categories of robocall speech, such as political speech, charitable fundraising, issue advocacy, commercial advertising, etc., and the Court agreed. Id.Having concluded that the 2015 government-debt exception created an unconstitutional exception to the TCPA, the Court was left to decide whether to invalidate the entire statute, or instead to invalidate and sever the 2015 government-debt exception. Id. at *6. In its analysis, the Court rejected plaintiffs’ broader argument that the entire TCPA is unconstitutional. Plaintiffs argued that, because Congress was willing to carve out an exception for government debt, its credibility regarding an interest in privacy was undermined. Id. at *6–7. The Court reasoned, however, that “Congress’s continuing broad prohibition of robocalls amply demonstrates Congress’s continuing interest in consumer privacy.” Id. at *7.The Court ultimately determined that it must invalidate the 2015 government-debt exception and sever that exception from the remainder of the statute. Id. at *11. The Court relied on the text of the Communications Act’s severability clause and the presumption of severability. Id. The majority disregarded Justice Gorsuch’s suggestion that the decision provided “no relief” to plaintiffs, reasoning that invalidating and severing the government-debt exception properly addressed the unequal treatment underlying plaintiffs’ claim. Id. at *13. The Court noted that Justice Gorsuch’s remedy would result in harm to “tens of millions of consumers who would be bombarded every day with nonstop robocalls notwithstanding Congress’s clear prohibition of those robocalls.” Id.Justice Sotomayor concurred in the judgment, yet reasoned that strict scrutiny should not apply to all content-based distinctions. Id. at *14. However, she concluded that the government-debt exception still failed intermediate scrutiny because it is not “narrowly tailored to serve a significant governmental interest.” Id.Justice Breyer, with whom Justices Ginsburg and Kagan joined, concurred in the judgment with respect to severability and dissented in part. Id. at *14. Justice Breyer disagreed that the exception violates the First Amendment. Id. He reasoned that strict scrutiny was inappropriate and that intermediate scrutiny should apply. Id. at *15. Justice Breyer reasoned that not all content-based distinctions are subject to strict scrutiny regardless of context or practical effect. Id. at *19. He did agree, however, with Justice Kavanaugh’s conclusion that the provision is severable. Id.Justice Gorsuch, with whom Justice Thomas joined in part, concurred in the judgment in part and dissented in part. Justice Gorsuch agreed with Justice Kavanaugh that the government-debt exception violates the First Amendment. Id. at *19–20. However, he disagreed as to why and the remedial consequences. Id. at *20. Justice Gorsuch agreed that the exception is a content-based restriction that fails strict scrutiny, but reasoned that plaintiffs are entitled to an injunction precluding TCPA enforcement against them. Id. at *21.TakeawaysAlleged TCPA violations are the basis of an increasing number of lawsuits each year, and the statute appears to be here to stay.Because the TCPA is heavily litigated and lacks a statutory limitation or cap on the amount of damages that can be awarded for each violation, it can lead to tens of millions of dollars in potential exposure. Therefore, companies seeking to reduce their exposure to TCPA litigation should consult a legal professional for advice on compliance and mitigation of litigation risk.Morrison & Foerster has advised extensively on TCPA disputes and represented numerous Fortune 500 companies in TCPA litigation. Follow Morrison & Foerster’s Class Dismissed blog to stay informed on TCPA developments.[1] Morrison & Foerster filed an amicus brief in this case.

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Tiffani B. Figueroa is a partner in the Litigation Department and is based in Morrison Foerster’s New York office. Her practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Tiffani B. Figueroa

Tiffani Figueroa

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Federally-Backed Debt Collection Exception Not the Supreme Court’s Cup of T(CPA)

Federally-Backed Debt Collection Exception Not the Supreme Court’s Cup of T(CPA)

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Barr v. Am. Ass’n of Political Consultants, Inc., 2020 WL 3633780, 591 U.S. __ (2020).[1] Earlier this month, the Supreme Court held, in a fractured decision yi

The 1914 Federal Trade Commission Act (FTCA) created the Federal Trade Commission (FTC or “the Commission”) and empowered it to prevent, and provide redress to consumers affected by, unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce. In 1973, Congress added Section 13(b) to the FTCA, providing the Commission with the power to seek “preliminary injunctions” as well permanent injunctions in “proper cases.” Although the provision’s language is narrow, the FTC has since read into Section 13(b) a more expansive authority to “halt deceptive practices” by seeking equitable remedies that look a lot like monetary relief, including asset freezes, the appointment of receivers, awards of restitution, and “other relief to redress injury from consumer frauds.”Read our <a href="https://www.mofo.com/resources/insights/200716-us-supreme-court-ftca.html">client alert.</a>