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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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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If a company enters an arbitration agreement with a consumer, can its future affiliate companies enforce the arbitration agreement even though the affiliate rel

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Does a Consumer Arbitration Agreement Apply to a Company’s Future Affiliates? The Ninth and Fourth Circuits Disagree

Does a Consumer Arbitration Agreement Apply to a Company’s Future Affiliates? The Ninth and Fourth Circuits Disagree | Class Dismissed

If a company enters an arbitration agreement with a consumer, can its future affiliate companies enforce the arbitration agreement even though the affiliate relationship did not exist at the time the consumer signed the agreement? The Ninth Circuit recently answered “no” in Revitch v. DIRECTV, LLC, __ F.3d __, 2020 WL 5814095 (9th Cir. Sept. 30, 2020), creating a split with the Fourth Circuit. The plaintiff, Jeremy Revitch, alleged that DIRECTV, a satellite television services company, placed prerecorded telemarketing calls to his mobile phone without his consent and in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”). He filed a class action complaint against DIRECTV in 2018. Revitch did not have a service agreement with DIRECTV. He did, however, have a contract for mobile phone wireless services with AT&T Mobility LLC (“AT&T Mobility”) that contained an arbitration agreement, which he entered in 2011. The arbitration agreement provided that “AT&T [Mobility] and you agree to arbitrate all disputes and claims between us. This agreement to arbitrate is intended to be broadly interpreted. It includes, but is not limited to . . . claims arising out of . . . any aspect of the relationship between us, whether based in . . . statute . . . or any other legal theory.”  2020 WL 5814095, at *11. The contract’s definition of AT&T Mobility included all “affiliates.” Id. at *2. AT&T Mobility and DIRECTV became “affiliates” (i.e., companies under common ownership) in 2015 when AT&T Mobility’s parent company, AT&T, Inc., acquired DIRECTV. Accordingly, DIRECTV moved to compel arbitration of Revitch’s complaint pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1–16 (“FAA”). The district court denied the motion on the ground that the arbitration agreement between Revitch and AT&T Mobility did not reflect the parties’ intent to arbitrate his claim against DIRECTV. DIRECTV appealed.The Ninth Circuit affirmed, holding that a valid agreement to arbitrate did not exist between Revitch and DIRECTV, a satellite television company that became an affiliate of AT&T Mobility three years after Revitch signed the wireless services contract containing the arbitration agreement. 2020 WL 5814095, at *5. The court reasoned that “absurd results follow from DIRECTV’s preferred interpretation,” which would require Revitch “to arbitrate any dispute with any corporate entity that happens to be acquired by AT&T, Inc., even if neither the entity nor the dispute has anything to do with providing wireless services to Revitch—and even if the entity becomes an affiliate years or even decades in the future.” Id. at *4. It thus affirmed based on its application of California’s “absurd results” canon of contract construction.   Judge O’Scannlain penned a concurring opinion, suggesting that even if the court analyzed the issue in terms of whether the arbitration clause in Revitch’s contract with AT&T Mobility encompassed his TCPA claim against DIRECTV, rather than asking whether a valid agreement to arbitrate exists between Revitch and DIRECTV, the court still would deny DIRECTV’s motion to compel arbitration. Judge O’Scannlain reasoned that, under the FAA, the claim to be settled by arbitration “must be one ‘arising out of’ the contract or transaction. By negative implication, the FAA does not require the enforcement of an arbitration clause to settle a controversy that does not arise out of the contract or transaction.” 2020 WL 5814095, at *7. Because, in his view, Revitch’s TCPA suit based on allegedly unsolicited advertisements for DIRECTV’s satellite television services is unrelated to Revitch’s contract for wireless services with AT&T Mobility, the suit does not “aris[e] out of” the contract and is not subject to the FAA. Id. at *10.Judge Bennett dissented, explaining that because “[n]either party disputes the existence and validity of the arbitration clause on which DIRECTV . . . relies,” the issue before the court is not one of contract formation, but one of scope: “‘whether the agreement encompasses the dispute at issue.’” Id. (citation omitted). In his view, “affiliates” includes DIRECTV because “[n]othing in the arbitration clause or in the dictionary definition of the word ‘affiliate’ confers any type of temporal scope to the term so that ‘affiliates’ should be read to refer only to present affiliates.” Id. at *11. “Because Revitch agreed to arbitrate ‘all disputes and claims,’” DIRECTV may compel arbitration under the agreement. Judge Bennett further noted that, “[e]ven if some ambiguity exists,” Supreme Court precedent would require the court to construe the agreement to apply to future affiliates and enforce the arbitration clause. Id. at *10 (citing Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1418 (2019) (“[A]mbiguities about the scope of an arbitration agreement must be resolved in favor of arbitration.”)). He further reasoned that the majority’s application of California’s “absurd results” canon disfavors arbitration agreements compared to other contracts and, therefore, contravenes the Supreme Court’s precedent in AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 341–42 (2011). 2020 WL 5814095, at *13.The Ninth Circuit’s decision creates a circuit split on this issue. Just two months ago, in a case involving substantially similar facts and the same arbitration clause, the Fourth Circuit concluded that the consumer-plaintiff formed an agreement to arbitrate with DIRECTV and that her TCPA claim “fit within the broad scope of that agreement, construed, as it must be, to favor arbitration.” Mey v. DIRECTV, LLC, 971 F.3d 284, 286 (4th Cir. 2020). Like Judge Bennett’s dissent, the Fourth Circuit concluded that the arbitration agreement “contains no explicit limitation on the term [affiliates],” and the term’s ordinary meaning includes present and future affiliates. Id. The Fourth Circuit thus concluded that plaintiff Mey formed an agreement to arbitrate with DIRECTV. Further, considering the arbitration agreement’s broad language (i.e., requiring arbitration of “all disputes and claims between us”), and applying the presumption in favor of arbitrability, the court concluded it must enforce the arbitration agreement. Id.Practice Pointers to Takeaway<ul><li>A company’s ability to rely on an arbitration clause in a later-acquired affiliate’s service agreement with a consumer will depend on the jurisdiction. Courts within the Fourth Circuit may enforce such arbitration agreements where the companies did not become affiliates until after the agreement was entered, while courts within the Ninth Circuit may not. It remains to be seen how other circuits will come out. </li></ul><ul><li>Companies should consider drafting arbitration clauses to cover future affiliates and subsidiaries expressly, since the Ninth Circuit opined that “[h]ad the wireless services agreement stated that ‘AT&T’ refers to ‘any affiliates, both present and future,’ we might arrive at a different conclusion.” Revitch, 2020 WL 5814095, at *4 (emphasis added).</li></ul><ul><li>In courts within the Ninth Circuit, all things being equal, a company’s future “successors” or “assignees” likely would have an easier time enforcing an arbitration agreement than a future “affiliate” would since an arbitration agreement’s reference to a “successor” or “assignee” necessarily contemplates an unknown future event. This is something to keep in mind when structuring acquisitions.</li></ul><ul><li>Finally, the court may have reached a different outcome if either DIRECTV or its dispute with Revitch had been materially related to the services provided under Revitch’s wireless services agreement with AT&T Mobility. In that regard, the enforcement of an arbitration agreement by an after-acquired affiliate likely is not entirely foreclosed in the Ninth Circuit.</li></ul>