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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The Supreme Court’s decision in Lamps Plus, Inc. v. Varela made it clear that an arbitration agreement must explicitly contemplate and provide for class arbitration, building on a line of pro-arbitration rulings from the Supreme Court over the past decade, including American Express Co. v. Italian Colors Restaurant, Stolt-Nielsen, S.A. v. Animal Feeds Int’l Corp., and AT&T Mobility LLC v. Concepcion. We analyze the Supreme Court’s decision and discuss their ongoing commitment to traditional arbitration.Read our <a href="https://protect-us.mimecast.com/s/qRxIC4xYV2fMAQg6CBNqhI">client alert</a>.

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.

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Lamps Plus, Inc. v. Varela: The Supreme Court Clarifies that Clear Consent is Necessary for Class Arbitration

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

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The Supreme Court’s decision in Lamps Plus, Inc. v. Varela made it clear that an arbitration agreement must explicitly contemplate and provide for class arbitra

Lamps Plus, Inc. v. Varela: The Supreme Court Clarifies that Clear Consent is Necessary for Class Arbitration

The United States Supreme Court continued the pro-arbitration trend in its jurisprudence, as well as its strict construction of the Federal Arbitration Act, in its unanimous decision in Henry Schein, Inc. v. Archer & White Sales, Inc., No. 17-1272, 2019 WL 122164 (U.S. Jan. 8, 2019).  Resolving a division in the Circuits on the issue, the Court held that where the parties delegate the “gateway” issue of arbitrability to the arbitrator, the court may not apply a judicially created “wholly groundless” exception to avoid delegation.<a name="_ftnref1" href="#_ftn1">[1]</a>Case BackgroundArcher and White Sales, Inc., a small business that distributes dental equipment and the plaintiff below, sued a dental equipment manufacturer and Schein, a major distributor of the equipment, for federal and state law antitrust violations.  The relevant agreement between the parties provided that disputes “arising under or relating to” the agreement “shall be resolved by binding arbitration in accordance with the rules of the American Arbitration Association [AAA].”  Schein invoked the FAA and sought to compel arbitration.Archer and White opposed, relying on an exception in the arbitration provision for actions seeking injunctive relief.  It argued that because its complaint sought injunctive relief in addition to damages, the dispute was not arbitrable.  Schein argued that because the AAA rules provide that arbitrators have the power to resolve threshold issues of arbitrability, under applicable case law the contract required that the arbitrator, not the court, decide whether the dispute was subject to arbitration.In response, Archer and White relied on a court-created exception recognized in the Fifth Circuit (and several other Circuits) permitting the court to decide arbitrability, notwithstanding a contractual delegation to the arbitrator, where the court finds the argument for arbitration to be “wholly groundless.”  The trial court agreed and denied arbitration, and the Fifth Circuit affirmed.The DecisionWith Justice Kavanaugh writing his first opinion for the Court, the Supreme Court vacated the decision and remanded.  The opinion emphasizes strict interpretation under the FAA:  “We must interpret the Act as written, and the Act in turn requires that we interpret the [arbitration] contract as written.”  Schein, 2019 WL 122164, at *4.  The Supreme Court had held in prior opinions that who decides whether a dispute may be arbitrated is itself a matter of contract, and the parties thus may agree that an arbitrator and not the court will decide.  See, e.g., Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 68-70 (2010).The Court concluded in Schein that the “wholly groundless” exception was inconsistent not only with the express terms of the FAA, but with the Court’s precedents.  Justice Kavanaugh noted that AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 649-50 (1986), held that the FAA precludes a court from ruling on the merits of a dispute that has been delegated to an arbitrator, even if the claim appears to be wholly frivolous.  Justice Kavanaugh concluded that this principle applied with equal force to the issue of arbitrability:  just as the court cannot decide a merits claim that the parties have delegated to an arbitrator, neither can it decide an arbitrability claim that the parties have similarly delegated.  Schein, 2019 WL 122164, at *4.Schein summarily rejected each of respondent’s additional four arguments:<ul><li>Respondent argued that §§ 3 and 4 of the FAA, which respectively set forth the standards for the court’s determination to stay litigation pending arbitration and for compelling arbitration, mean that a court must always make an initial determination of arbitrability. But “that ship has sailed” in light of the Court’s consistent holdings that threshold arbitrability issues can be delegated to the arbitrator.  2019 WL 122164, at *4.</li><li>Respondent’s reliance on § 10 of the FAA, which provides for “back-end” judicial review if the arbitrator has exceeded his or her powers, was similarly misplaced. Congress designed the statute in a specific way, and the Court had no power to redesign it.</li><li>The argument that it is inefficient to send a matter to an arbitrator where the argument for arbitration is “wholly meritless” fared no better. The Court could not engraft its own exceptions on the FAA.  Moreover, the Court was “dubious” that the “wholly groundless” exception would save time, since it would likely spark time-consuming collateral litigation.  Nor was it proper to assume that if a court would find the basis for arbitration “wholly frivolous,” so would an arbitrator, rendering referral to the arbitrator a waste of time.  “It is not unheard-of for one fair-minded adjudicator to think a decision is obvious in one direction but for another fair-minded adjudicator to decide the matter the other way.”   at *5.</li><li>Finally, the argument that the “wholly groundless” exception was necessary to deter frivolous motions to compel arbitration failed, among other reasons, because the Court may not rewrite the statute to accommodate policy concerns, and because arbitrators can dispose of frivolous cases by quickly holding the dispute non-arbitrable and may be able to award sanctions.</li></ul>The Court thus rejected the “wholly groundless” objection.  The Court expressed no view about whether the contract at issue in fact delegated the arbitrability determination to the arbitrator.  Indeed, Justice Kavanaugh emphasized that courts “should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.”  Id. at *6 (citing First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 994 (1995).Key TakeawaysAlthough the decision in Schein was not a surprise, it confirms that the Court as constituted will remain firmly on a pro-arbitration path and will continue to strictly adhere to the provisions of the FAA.  The decision also suggests that parties who desire arbitration may want to expressly delegate the gateway issue of arbitrability to the arbitrator.  (Incorporation of the AAA rules likely has that effect, but the Supreme Court has not ruled on the issue.)  Unlike a court, the arbitrator’s decision is not subject to review, which will give some potential litigants pause.  Nonetheless, the Schein opinion suggests that for parties who strongly desire arbitration, this may be a benefit.<a name="_ftn1" href="#_ftnref1">[1]</a> Just one week later, however, in New Prime Inc. v. Oliveira, No. 17-340, 2019 WL 189342 (U.S. Jan. 15, 2019), the Supreme Court held that a court, not an arbitrator, must decide the threshold question of whether the contract at issue is within the scope of the FAA and not within an exception.  Because §§ 3 and 4 of the FAA confer authority on a court to stay litigation and compel arbitration only where the contract comes within the scope of the FAA as defined in § 2 of that Act, the court must first resolve the scope issue even where the contract otherwise delegates arbitrability determinations to the arbitrator.  In New Prime, because the Supreme Court concluded that the transportation worker exception contained in § 1 of the FAA applied to independent contractors, the matter was not arbitrable.

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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 pro

Penelope Preovolos

Leave Arbitration to the Arbitrator: No “Wholly Groundless” Exception Where Contract Delegates Arbitrability Determination to the Arbitrator

The United States Supreme Court continued the pro-arbitration trend in its jurisprudence, as well as its strict construction of the Federal Arbitration Act, in 

Leave Arbitration to the Arbitrator: No “Wholly Groundless” Exception Where Contract Delegates Arbitrability Determination to the Arbitrator