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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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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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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A jury in California awarded $2.36 million to consumers after finding that R.C. Bigelow Inc. violated the Consumer Legal Remedies Act (CLRA), breached an express warranty, and made a false misrepresentation by labeling its tea products as “Manufactured in the USA 100% American Family Owned” despite sourcing and processing ingredients abroad. The rare trial verdict highlights increasing scrutiny of “Made in USA” claims and the legal risks of noncompliance.Read the <a href="https://www.mofo.com/resources/insights/250415-jury-returns-verdict-in-manufactured" target="_self">full client alert</a>.

Nature's Path Foods

Suja Juices

Unilever USA Inc.

Nature’s Path Foods and Sprouts Farmers Market

Iovate Health Sciences, International

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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 mat

Claudia Vetesi

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

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Lena is an associate in the Litigation Department in Morrison Foerster’s San Francisco office. Lena’s practice focuses on commercial and class actions litigation, with an emphasis on false advertising, unfair competition, and antitrust. Lena regularly counsels clients in the food and beverage, dietary supplement, cosmetics, retail, and technology sectors.











Lena Gankin

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

High Court Orders Rethink Of $9.7M Award After TransUnion

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On January 24, 2024, the Supreme Court granted certiorari in Laboratory Corp. of America v. Davis (“LabCorp”),[1] to consider “[w]hether a federal court may certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III injury.” This will be the first time that the Supreme Court has addressed Article III standing requirements in class actions since deciding TransUnion LLC v. Ramirez in 2021. And it presents an opportunity for the Justices to resolve significant confusion among federal district courts about the extent to which a class can be certified if there is evidence that putative class members did not suffer any injury.[2] If the High Court chooses to resolve the circuit split and require that all putative class members have suffered an Article III injury, it could raise the standard plaintiffs must meet to certify a class.The District Court Certifies a Class with Uninjured MembersLabCorp is a class action that was filed on behalf of all legally blind individuals who visited a LabCorp patient center and alleged that, due to their disability, they were unable to use LabCorp’s Self-Service kiosks. The California class asserted claims under California’s Unruh Civil Rights Act (Unruh Act), which provides for $4,000 in statutory damages for each violation.In certifying the California Class, the District Court found that common facts predominated the Unruh Act claim, but only addressed the named plaintiff’s standing. The District Court found that all class members were subject to the same injuring behavior, namely that the LabCorp Self-Service kiosks were inaccessible to them. The District Court also found that the named plaintiff’s injury met the typicality requirement, explaining that the Ninth Circuit’s permissive standard did not require that the named plaintiffs’ injuries be identical with those of the other class members, only that the unnamed class members have injuries similar to those of the named plaintiffs and that the injuries result from the same, injurious course of conduct.[3] In other words, the District Court did not require that plaintiff establish, at class certification, that all putative class members suffered an injury.The Ninth Circuit Affirms, Deepening a Split Among the Courts of AppealsThe Ninth Circuit affirmed. In its standing analysis, the Ninth Circuit only looked at whether the named plaintiff had met the Article III standing requirement and rejected defendants’ arguments that that many of the putative class members lacked Article III standing. According to Defendant, discovery revealed that many of the class members were not aware that the LabCorp facilities included Self-Service kiosks and therefore were not injured.But because the Ninth Circuit held that the named plaintiff had standing, the court only addressed Defendants’ argument in a footnote, stating that class certification was not defeated even if some potential class members may not have been injured. To support its position, the court cited Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651, 667 (9th Cir. 2022), which held that Rule 23 permits “certification of a class that potentially includes more than a de minimis number of uninjured class members[.]” But the court did not conduct any substantive analysis of whether the district court certified a class with more than a de minimis number of injured members.The Ninth Circuit’s standard, which allows for more than a “de minimis” number of uninjured class members, aligns with the Seventh and Eleventh Circuits, although the Ninth Circuit has not clarified what that number would be. See Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651, 669 (9th Cir. 2022) (“we reject the dissent’s argument that Rule 23 does not permit the certification of a class that potentially includes more than a de minimis number of uninjured class members”). By contrast, the Seventh and Eleventh Circuits have held that the number of uninjured class members would have to be less than a “great many” or a “large portion” of the certified class. See Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 825 (7th Cir. 2012) (“There is no precise measure for ‘a great many.’”); Cordoba v. DIRECTV, LLC, 942 F.3d 1259, 1277 (11th Cir. 2019) (a class fails predominance only where a “large portion” of members lack injury).But other Circuits have taken different approaches.The DC and First Circuits have articulated a less permissive standard, holding that a class may be certified only if a “de minimis” number of the potential class members lack standing. See In re Nexium Antitrust Litig., 777 F.3d 9, 25 (1st Cir. 2015) (“a certified class may include a de minimis number of potentially uninjured parties.”); In re Rail Freight Fuel Surcharge Antitrust Litig. – MDL No. 1869, 934 F.3d 619, 627 (D.C. Cir. 2019) (denying class certification because more than a de minimis number of class members lacked any Article III injury).By contrast, the Second and Eighth Circuits have imposed a high bar and require that all potential class members must have Article III standing in order to be certified. See Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006) (“no class may be certified that contains members lacking Article III standing”); Halvorson v. Auto-Owners Life Ins. Co., 718 F.3d 773, 778 (8th Cir. 2013) (“In order for a class to be certified, each member must have standing.”).Key TakeawaysBy granting certiorari on the question of whether a 23(b) class action could be certified when some members of the proposed class lack any Article III injury, the Supreme Court will have the opportunity to resolve an important circuit split and provide guidance to courts that have struggled with how to apply TransUnion at class certification.Besides resolving the circuit split, this case will also present the Supreme Court conservative majority with an opportunity to take a more restrictive approach to class certification. Indeed, the same conservative majority that wrote the majority opinion in TransUnion could agree with the Second and Eighth Circuits and require all putative class members to establish Article III standing in order for a class to be certified. If so, this decision would raise the bar for all class actions and would be particularly important for privacy class actions, like TransUnion, where determining a cognizable injury can be difficult. The Court will also have the opportunity to address the implications for class certification where the class representative experienced a materially different, and more severe, injury than all or most other class members. Morrison Foerster will continue to follow this case.[1] <a href="https://www.supremecourt.gov/docket/docketfiles/html/public/24-304.html" target="_blank">No. 24-0304</a>.[2] TransUnion LLC v. Ramirez, 594 U.S. 413 (2021).[3] Davis v. Lab’y Corp. of Am. Holdings, 2022 WL 22855520, at *5 (C.D. Cal. June 13, 2022).

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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Tamara Wiesebron’s practice focuses on complex commercial litigation—including class actions, product liability and transactional disputes—across a variety of industries. Tamara has experience with drafting substantive motions, handling fact discovery, taking and defending depositions, and preparing witnesses for depositions and trial for antitrust and commercial litigation matters. 

Tamara Wiesebron

While it rarely rules on questions of preemption, the Ninth Circuit took an even rarer step on July 1, 2024 when it took up the question of whether private parties can seek to enforce the provisions of California’s Sherman Law that parallel federal law.Plaintiffs brought suit against Sprout Foods, Inc. (“Sprout”), a manufacturer of baby food, arguing that the labels on the baby food were deceptive and unlawful because they made statements regarding the nutritional content of the baby food, like “3g of Protein” and “5g of Fiber.” Plaintiffs alleged that Sprout’s baby food products were mislabeled under the “unlawful” prong of California’s Unfair Competition Law (UCL) because they were mislabeled under California’s Sherman Law.  Plaintiffs asserted that FDA regulations prohibit certain nutrient content claims on foods intended for children under the age of two and argued that Sprout’s products therefore violated those regulations and the identical provisions of California’s Sherman Law.  Sprout argued that Plaintiffs’ UCL “unlawful” prong claim was impliedly preempted because a violation of the Sherman Law requires a finding that the FDCA has been violated, and the FDCA, in turn, can be enforced only by the United States.  The lower court agreed with Sprout on the issue of preemption, holding that because a violation of the Sherman Law requires a finding that the FDCA has been violated, and the FDCA can be enforced only by the United States, Plaintiffs’ claims were preempted insofar as they originated from, were governed by, and terminated according to federal law.Prior to the Ninth Circuit’s decision, litigants frequently battled over whether lawsuits alleging a violation of the FDCA, but brought under state consumer protection laws, were impliedly preempted.  Federal law preempts state law when Congress has expressly stated or impliedly intended its purpose to do so.  Under the Supreme Court’s holding in Buckman Co. v. Plaintiffs’ Legal Committee, a state law can be preempted in two instances: (1) a plaintiff may not impose food label requirements under state law that are different from those imposed under the FDCA and its regulations, and (2) a plaintiff cannot privately enforce the FDCA.[1]  Accordingly, private claims that “exist solely by virtue of the FDCA,” or where the claim would not exist but for the alleged violation of the FDCA, are impliedly preempted.[2]  In recent years, Plaintiffs in consumer class actions targeting food labeling have argued that even though their claims are based on an underlying violation of the FDCA, their claims are not impliedly preempted.Ninth Circuit Clarifies PreemptionIn reversing the district court’s holding that enforcement of state standards is impliedly preempted by federal law, the Ninth Circuit, in an opinion written by Judge Schroeder, reasoned that federal law contemplated the ability of states, like California, to enact their own parallel laws permitting private rights of action.  The Ninth Circuit held that the critical distinction between Davidson and Buckman was that, in Buckman, Plaintiffs attempted to use state causes of action to obtain damages for violations owed under the FDCA, but in Davidson, Plaintiffs claimed violations of California’s Sherman Law (which runs parallel to the federal FDCA and whose standards are identical to the federal FDCA).[3]  In other words, because Plaintiffs’ UCL “unlawful” prong claim was premised on a violation of California’s Sherman Law, which was identical to the FDCA, Plaintiffs’ claims were not preempted.  The Ninth Circuit reasoned that Congress did not intend for state standards, like those under California’s Sherman Law, to be impliedly preempted and thus permitted states to adopt them: “there is no reason we can perceive why Congress would permit states to enact particular legislation and then deny enforcement by their citizens. . .  Federal law does not support such a strange result.”[4]Furthermore, the Ninth Circuit reasoned that even if it had doubts regarding the interaction between FDA regulations and California’s Sherman Law as applied through the UCL, it would still reverse the lower court’s holding because of the Ninth Circuit’s longstanding presumption against preemption. The Ninth Circuit reiterated that even if Sprout’s interpretation of preemption were equally plausible to that of Plaintiffs, the Court would be bound to ultimately hold that the FDCA does not impliedly preempt private enforcement of the Sherman Law and allow the case to proceed.Judge Collins DissentsJudge Collins dissented from the Ninth Circuit’s preemption holding, writing that a private claim based on state law that simply copies the FDCA’s requirements and has no independent substantive content is impliedly preempted.  Judge Collins distinguished between cases where plaintiffs sought to impose state-law standards with independent content, and state law standards that merely “parasitically cop[y]” the federal standard.[5]  State law standards with independent content were not impliedly preempted, but standards that merely copied the federal standard (as does the Sherman Law) were impliedly preempted.[6]Moreover, Judge Collins reasoned that the Sherman Law may have been intended to provide a right of action for state authorities to bring claims premised on federal regulations, not necessarily to grant private citizens a right of action.  The FDCA prohibits private enforcement of federal law, instead giving that authority to the federal government.[7]  By “permitting” states to enact statutes that mirror the FDCA, it would not be “strange” for the federal government to also limit the enforcement of state laws to state actors.[8]  Judge Collins further noted that enforcement by state authorities would allow for additional remedies provided by state courts that are not afforded by the FDCA, such as monetary damages.TakeawaysThe Ninth Circuit’s holding in Davidson clarifies the outer bounds of implied preemption in cases in which plaintiffs seek to leverage highly technical federal regulations in litigation through California’s Sherman Law and the “unlawful” prong of the UCL.  Notably, Davidson is the first case to reach the Ninth Circuit on implied preemption, California’s Sherman Law, and food labels.  Accordingly, the legal landscape is likely to continue to evolve as courts grapple with Davidson’s application.  Morrison Foerster will continue to monitor the impact of this ruling and is available to provide legal guidance to clients on the ramifications of this decision.<hr class="divider">[1] Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 353 (2001); 21 U.S.C. §§ 343-1, 337(a).[2] Id.[3] Id.; Davidson v. Sprout Foods, Inc., 2024 WL 3213277, at *6 (9th Cir. June 28, 2024).[4] Davidson v. Sprout Foods, Inc., 2024 WL 3213277, at *6.[5] Id. at *12.[6] Id.[7] Id. at *17.[8] Id.

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Mamie Tabet is an associate in the Litigation Department of Morrison Foerster’s San Francisco office.

Mamie Tabet

Passing on Preemption: Ninth Circuit Holds That California’s Sherman Law Is Not Impliedly Preempted

While it rarely rules on questions of preemption, the Ninth Circuit took an even rarer step on July 1, 2024 when it took up the question of whether private parties can seek to enforce the provisions of California’s Sherman Law that parallel federal law.

Passing on Preemption: Ninth Circuit Holds That California’s Sherman Law Is Not Impliedly Preempted

On May 23, 2024, the United States Supreme Court decided Coinbase, Inc., v. Suski, No. 23-3, serving a reminder to companies with mandatory consumer-facing arbitration provisions that contractual consistency is a key to enforceability. In Justice Jackson’s unanimous opinion, the Court found that “[w]here parties have agreed to two contracts—one sending arbitrability disputes to arbitration, and the other either explicitly or implicitly sending arbitrability disputes to the courts—a court must decide which contract governs.”This case involved the users of a cryptocurrency exchange platform, Coinbase, Inc. (“Coinbase”), entering into two digital contracts. The first contract, the Coinbase User Agreement (“User Agreement”), contained a delegation clause that provided that any disputes regarding arbitrability would be decided by an arbitrator. The second contract, the Official Rules for the Dogecoin promotional sweepstakes (“Sweepstakes Rules”), contained a forum selection clause that provided sole jurisdiction over sweepstakes-related disputes to the California courts.Plaintiff assented to both the User Agreement and Sweepstakes Rules. But following the sweepstakes, he filed a putative class action in the United States District Court for the Northern District of California alleging that Coinbase misrepresented entrance requirements into the Dogecoin sweepstakes in violation of various California laws. Coinbase moved to compel arbitration and argued that the User Agreement’s delegation clause meant that an arbitrator had to decide any arbitrability challenges to the scope or enforceability of the arbitration provision. But the district court held that it first needed to decide which contract’s dispute resolution provisions applied, since this would determine if the court or an arbitrator should decide who would ultimately hear the case, based on the dueling provisions. The court held that it, not the arbitrator, should determine which contract controlled. The court, applying California state law, then also held that the Sweepstakes Rules’ forum selection clause controlled, denying Coinbase’s motion to compel. The Ninth Circuit Court of Appeals affirmed.On May 23, 2024, the Supreme Court affirmed, explaining that when two contracts conflict as to which one decides the arbitrability of a dispute, this threshold issue must be decided by a court in the first instance. The Court based this decision on “basic legal principles” that “disputes are subject to arbitration if, and only if, the parties actually agreed to arbitrate those disputes.” This includes if the dispute is over arbitrability itself. In other words, “before either the delegation provision or the forum selection clause can be enforced, a court needs to decide what the parties have agreed to—i.e., which contract controls.” Here, this means the issue of whether the parties’ second agreement superseded their earlier agreement regarding who decides arbitrability for the sweepstakes-related disputes is therefore to be decided by the court before referring the dispute to arbitrators.The Court did make clear that their decision was limited in scope, particularly in Justice Gorsuch’s concurrence. They “reaffirm[ed] well-established principles about the primacy of the parties’ agreements when it comes to arbitration,” with their decision turning on the very specific conflict between the two contracts. The Court declined to address the secondary holding that the Sweepstakes Rules’ forum selection clause took precedence over the User Agreement’s arbitration clause, leaving the Ninth Circuit holding in place and leaving the case in the California court.Key takeaways: Companies seeking to enforce arbitration clauses should keep in mind the importance of uniform language across contracts, particularly when it comes to arbitration agreements. In particular, companies with consumer-facing agreements online, which are often supplemented by side promotions or sweepstakes that contain unique terms, need to consider the interplay between these various contracts. As this decision demonstrates, a delegation clause in the initial terms of service does not always guarantee arbitration if companies are not meticulous across all terms and agreements. But the Supreme Court did make clear that this holding is narrow—if the second Sweepstakes Rules contract didn’t exist, the court would have compelled arbitration. So beware of conflicting terms!Read the <a href="https://www.supremecourt.gov/opinions/23pdf/23-3_879d.pdf" target="_blank">Court’s opinion</a>.

Beware of Conflicting Terms: When Customers Entered into Multiple Contracts, SCOTUS Says Courts Must Decide Which One Governs Arbitrability 

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Jenny Morris is an associate in the Litigation Department of Morrison Foerster’s Washington, D.C. office.

Jenny Morris

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Beware of Conflicting Terms: When Customers Entered into Multiple Contracts, SCOTUS Says Courts Must Decide Which One Governs Arbitrability

On May 23, 2024, the United States Supreme Court decided Coinbase, Inc., v. Suski, No. 23-3, serving a reminder to companies with mandatory consumer-facing arbitration provisions that contractual consistency is a key to enforceability.

Beware of Conflicting Terms: When Customers Entered into Multiple Contracts, SCOTUS Says Courts Must Decide Which One Governs Arbitrability

Are Prebiotic Drinks Plaintiffs’ Bar’s Next Target?Late last month, San Francisco resident Kirstin Cobbs initiated a class action lawsuit against poppi after purchasing its product, poppi prebiotic soda, believing the product to be “gut healthy.” Poppi sodas are packaged in cans with label designs making noteworthy statements such as the product is “for a healthy gut.” Additionally, the front of the packaging depicted in the complaint displays the slogan “Be Gut Happy. Be Gut Healthy.”The suit was filed in the Northern District of California under California’s False Advertising Law (FAL), California’s Consumers Legal Remedies Act (CLRA), California’s Unfair Competition Law (UCL), and unjust enrichment. The complaint alleges that the product is not “gut healthy” because consuming the soda in the amount normally ingested will not create meaningful prebiotic effects. Plaintiff concludes that if she had been aware of this, she would not have purchased the product. Cobbs alleges that by promoting poppi soda as a gut-friendly, prebiotic beverage, poppi is misleading consumers because “a consumer would need to drink more than four Poppi sodas in a day to realize any potential health benefits from its prebiotic fiber.” But poppi is likely targeted because it has “quickly climbed the ranks as one of the most popular beverages in the United States” since consumers are interested in alternatives to traditional sodas.Health Halo Litigation Continues with New TrendsPoppi prebiotic sodas are marketed as an alternative to traditional sodas, emphasizing the importance of gut health and prebiotic ingredients. Prebiotics support probiotics, which aid the immune system and digestion. A poppi soda contains two grams of dietary fiber, which appears to come from inulin. Sources suggest that inulin may stimulate the growth of healthy bacteria in the gut.There is an increasing uptick in lawsuits challenging claims that may imply health benefits to consumers. The complaint alleges that consumers search for healthier alternatives to soda, so it is not surprising that companies are trying to appeal to health-conscious consumers. It is similarly not surprising that the plaintiffs’ bar targets emerging trends, beginning with successful, popular products.These lawsuits have targeted products using terms such as “healthy,” “healthier,” “wholesome,” and “good for you.” The suits have faced mixed results, with some defeating false advertising challenges and others proceeding further into litigation. As we have written about <a href="/topics/241022-water-is-in-white-bread-is-out-healthy-gets-a-new-look-in-2023" target="_self">previously</a>, in 2023, FDA redefined its definition of “healthy.” Moreover, these recent lawsuits target terms which are not defined by FDA regulations. While FDA has regulated “healthy,” it does not regulate terms that may imply health benefits. Specifically, here, FDA has not defined “prebiotic,” nor does it regulate “good for your gut,” “gut healthy,” or “gut happy.”Key TakeawaysLike other food labeling false advertising cases, we expect early arguments over whether these terms are puffery and whether a reasonable consumer would be deceived by a term such as “gut healthy” to mean that they are receiving some nutritional benefit. If this case proceeds past the pleadings stage, we expect that the case may turn on whether the ingredients provide the gut health benefits that consumers expect to receive. Additionally, there may be a battle of the experts over whether two grams of inulin can provide health benefits.We will be tracking this litigation and we write this as an important reminder that companies should be sure to review all labeling on food and beverage products and consult with counsel as necessary to stay on top of current changes in litigation trends.Shannon Labuschagne, a Summer Associate in Morrison Foerster's San Francisco office, contributed to this blog post.

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Lauren N. Margolies is an associate in the Litigation Department of Morrison Foerster’s New York Office.

Lauren Margolies

Lauren N. Margolies

Are Prebiotic Drinks Plaintiffs’ Bar’s Next Target?
Late last month, San Francisco resident Kirstin Cobbs initiated a class action lawsuit against poppi after purchasing its product, poppi prebiotic soda, believing the product to be “gut healthy.” Poppi sodas are packaged in cans with label designs making noteworthy statements such as the product is “for a healthy gut.” Additionally, the front of the packaging depicted in the complaint displays the slogan “Be Gut Happy. Be Gut Healthy.”



Health Halo Trend Continues With poppi "Gut Healthy" Sodas

On April 15, 2024, in a big win for the continued validity of implied preemption, the Supreme Court declined to hear an appeal of the First Circuit’s preemption-based dismissal of a proposed misbranding class action. The plaintiff claimed that the label of a dietary supplement called “Lactaid” should be required to meet the heightened regulatory requirements for drug products. The defendant—and the district court and First Circuit—disagreed.Read the <a href="https://www.mofo.com/resources/insights/240430-implied-preemption-for-dietary-supplements" target="_blank">full client alert</a>.