Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Partner

Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class action lawsuits. Claudia also regularly counsels clients in the food, cosmetics, retail, and technology industries. She represents companies in false advertising disputes before the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc.<h5>More about Claudia</h5>Claudia is active in MoFo’s pro bono efforts, and recently traveled to El Paso, Texas, to work with families separated and detained at the border. She is also supervising a pro bono collaboration with Equal Rights Advocates, a nonprofit fighting for gender justice in work places and schools across the country. The initiative will help students who have been victims of sexual assault, attempted assault, or harassment find support and seek justice. Claudia is also a board member of Bay Area Legal Aid and a former board member of Equal Rights Advocates. Claudia is an editor and frequent contributor to MoFo’s <a href="https://classdismissed.mofo.com/">Class Dismissed</a> blog, which provides reports about the latest defense news, developments, and trends in class action lawsuits and product liability issues that affect consumer-facing companies. Her perspectives are also respected in the larger legal community: Claudia has published articles about class action and false advertising issues, and is a co-author of Chapter 7 — “Unfair Competition in California Business Litigation 2016” — of The Recorder. She also regularly speaks at conferences on class action and advertising trends. Claudia is currently serving as a Lawyer Representative for the Northern District of California. She received her J.D. degree in 2004 from Berkeley Law (Boalt Hall School of Law), where she was an associate editor of the Berkeley Technology Law Journal.

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Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class actions.

Claudia M. Vetesi

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

Adam J. Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.Mr. Hunt has extensive experience representing consumer products companies, financial institutions, and technology firms in class action cases and complex commercial disputes before state and federal trial courts, as well as in arbitrations. Clients seek Mr. Hunt’s counsel for his creative, strategic thinking in high-stakes, high-profile matters. He has represented clients facing claims under false advertising, antitrust, and privacy laws throughout the country, securing wins at the pleading stage, summary judgment, and trial, in addition to negotiating favorable settlements, often early in the case. Representative experience includes successfully securing rulings dismissing two putative false advertising class action cases against one of the best-known consumer electronics companies in the world; obtaining a complete win on summary judgment for a major shipping and logistics company in a multimillion-dollar commercial dispute; appearing as counsel at trial for a leading financial institution in a $100 million commercial dispute, winning a bench trial verdict; and prevailing on motions to dismiss false advertising class actions against a leading Greek yogurt company.Mr. Hunt is also an editor of the firm’s <a href="https://classdismissed.mofo.com/" target="_self">Class Dismissed blog</a>, which provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class action lawsuits that affect consumer-facing companies.Mr. Hunt maintains an active pro bono practice and is the recipient of the New York State Bar Association’s 2017 President’s Pro Bono Service Award for the First Judicial Department, the 2018 Public Service Award from New York University School of Law, and Morrison Foerster’s Kathi Pugh Award for Pro Bono Services.Mr. Hunt received his B.A. with honors from Swarthmore College and his J.D. cum laude from New York University.

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Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

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Alexandra Preece Barlow

Adam J. Hunt

The Future of Section 230: Protection Against Product Liability Claims?

New Wave of PFAS Legislation Aimed at Consumer Products

CPSC Releases Annual Report on Deaths and Injuries Involving Nursery Products

CPSC Proposes New Safety Rules for Infant Rockers

CPSC Commissioners Abstain from Retracting Infant Sleep Product Statements

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The Eastern District of Tennessee recently ruled that there is no private right of action under the Consumer Product Safety Act (CPSA) for an alleged violation of a voluntary product safety standard.[1] The ruling narrows the claims in a pending lawsuit about hoverboards and narrows potential CPSA exposure for all consumer product companies.Consumer Product Safety Act Enacted in 1972, the CPSA established the Consumer Product Safety Commission (CPSC) and gave CPSC the power to issue consumer product safety standards and rules. 15 U.S.C. §§ 2056, 2058. The CPSA creates a private right of action for “[a]ny person who shall sustain injury by reason of any knowing (including willful) violation of a consumer product safety rule, or any other rule or order issued by the Commission.” 15 U.S.C. § 2072(a). While the statute defines a “consumer product safety rule,” 15 U.S.C. § 2052(a)(6), it provides no clear guidance on what constitutes “any other rule or order issued by the Commission” in Section 2072(a).Bruce v. Jet.com, Inc.The plaintiffs in Bruce v. Jet.com, Inc. asserted a claim under the CPSA based on alleged violation of a voluntary product safety standard issued by a private safety organization. CPSC had urged companies in the hoverboard chain of distribution to comply with this voluntary safety standard in a 2016 letter. In the same letter, CPSC cautioned that hoverboards not meeting the voluntary safety standard “may present a substantial product hazard.”[2] The Bruce plaintiffs argued that this letter, with CPSC’s endorsement of the voluntary standard, serves as “any other rule or order.”The court disagreed. It found that “[n]either the voluntary standards at issue nor the CPSC’s letter classify as ‘a consumer product safety rule, or other rule or order issued by the Commission.’”[3] Neither underwent the rulemaking procedure set out in the CPSA, and thus fall outside the limited private right of action permitted under the CPSA “To hold otherwise would circumvent the plain meaning of the statute and the CPSA’s own definitions.”[4]The court dismissed the CPSA claim with prejudice, ridding Jet.com of that ground for liability in this case for good.Industry TakeawayThe court’s decision provides welcome guidance on the scope of the CPSA’s private right of action.  Although as a trial court order it provides only persuasive—not binding—authority, it helps limit the scope of private rights of action, particularly for voluntary standards where the applicability or mandatory nature of the standard is unclear.[1] Bruce v. Jet.com, Inc., No. 2:19-CV-00175-DCLC, 2020 WL 5144692, at *5 (E.D. Tenn. Aug. 31, 2020).[2] Id.at *3.[3] Id. at *5 (quoting 15 U.S.C. § 2072(a)).[4] Id.

Fertility Center Litigation

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Leading Healthcare, Pharmaceutical, and Medical Device Company

Lethal Injection Matters – Major Pharmaceutical Company

Pain Pump Matters – Large Pharmaceutical Company

Major Technology Company

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Security Device Company

In re Air Crash Near Peixoto de Azevedo, Brazil

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Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin M. Bosman

Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin Bosman

An orthopedic implant company

A children&rsquo;s monthly subscription service product

A fertility company

A major technology company

A smart fitness equipment company

Julie Park provides analytic and strategic counsel for issues in product life cycle, product liability and defective products, consumer class actions, and more.

Julie Park

Julie Park | Product Liability Lawyer

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Court Finds No Private Right of Action Under Consumer Product Safety Act for Alleged Violation of Voluntary Standard

Court Finds No Private Right of Action Under Consumer Product Safety Act for Alleged Violation of Voluntary Standard

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The Eastern District of Tennessee recently ruled that there is no private right of action under the Consumer Product Safety Act (CPSA) for an alleged violation 

Along with making their advertising materials eye-catching and influential, consumer‑facing companies need to ensure that their representations about products and services comply with advertising laws. This article discusses basic advertising law, some things to avoid and some things to do. Although every state has its own consumer protection laws, our focus is on federal and California law.This article was originally published in Today’s General Counsel on September 15, 2020. The full article is available on pages 24–26 of the <a href="https://issuu.com/todaysgc/docs/tgc_fa20_issuu?fr=sMjBhNDI5ODIwMg" target="_blank">fall digital issue</a>.

Energy Drink Manufacturer

Consumer Electronics MDL

Computer Power Management System Litigation

Run Them Sweet, LLC v. CPA Global Limited

Online Billing Practices Class Action

Lipitor Antitrust Litigation

American Booksellers Association v. Barnes &amp; Noble, Inc.


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

Nature's Path Foods

Suja Juices

Unilever USA Inc.

Nature’s Path Foods and Sprouts Farmers Market

Iovate Health Sciences, International

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy mat

Claudia Vetesi

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Advertising Checklist for In-House Counsel

Advertising Checklist for In-House Counsel

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Along with making their advertising materials eye-catching and influential, consumer‑facing companies need to ensure that their representations about products a

Earlier this month, the Ninth Circuit held that state law cannot expand or confine a federal court’s power to issue equitable restitution because federal courts are bound by traditional equitable principles, which require, among other things, a showing of an inadequate remedy at law. Thus, the Ninth Circuit affirmed the district court’s dismissal of plaintiff’s claims for restitution where she failed to establish an inadequate legal remedy.[1]Plaintiff sought to avoid a jury trial by voluntarily dismissing her damages claim and instead seeking to try her equitable restitution claims to the court.Plaintiff Kathleen Sonner (“Sonner” or “plaintiff”) represented a certified class of California consumers who claimed that Premier’s Joint Juice did not provide the advertised joint health benefits. Plaintiff sought damages under the Consumer Legal Remedies Act (CLRA), restitution under California’s Unfair Competition Law (UCL) and the CLRA, and injunctive relief under the UCL and CLRA.After more than four years of litigation and on the eve of trial, Sonner sought leave to amend to voluntarily dismiss her CLRA claim for damages and proceed solely with claims for equitable restitution under the UCL and CLRA. The unorthodox move to dismiss a claim for money damages was motivated by plaintiff counsel’s desire to avoid a jury trial in favor of a bench trial. Plaintiff’s counsel advised the district court that it would continue to seek the same $32 million in equitable restitution that it sought as money damages under the CLRA. Premier opposed plaintiff’s eleventh-hour maneuver on the grounds that she had an adequate remedy at law (money damages under the CLRA) so plaintiff was prohibited from seeking equitable restitution. Premier advised the court that, if plaintiff were granted leave to amend, Premier would move to dismiss the equitable restitution claims.Although the district court granted plaintiff leave to file an amended complaint and vacated the jury trial, the judge strongly cautioned plaintiff’s counsel that if he ultimately granted Premier’s motion to dismiss, he would not allow plaintiff to amend her complaint for a third time to reallege the previously dismissed CLRA damages claim. Plaintiff’s counsel disregarded the district court’s warning and filed an amended complaint that only contained claims for equitable relief.Premier moved to dismiss the restitution claims pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that Sonner needed to—but could not—establish that she lacked an adequate legal remedy as required by both federal equitable principles and California law. After full briefing and oral argument, the district court granted Premier’s motion to dismiss, holding that plaintiff could not proceed on her equitable claims for restitution in lieu of a claim for damages. Specifically, the district court concluded that equitable restitution claims brought under the UCL and CLRA remained subject to the inadequate-remedy-at-law doctrine, and that plaintiff failed to establish that she lacked an adequate legal remedy for the same past harm for which she sought equitable restitution. The district court also denied Sonner’s request to amend her complaint to reallege the CLRA damages claim that she had voluntarily dismissed.Ninth Circuit affirms district court’s order.On appeal, Sonner argued (along with amici the CA Attorney General and Consumer Attorneys of CA), that because her UCL and CLRA claims arise under California law and the court’s jurisdiction rests in diversity, state law alone decides whether she must show a lack of an adequate legal remedy before obtaining restitution under those statutes. Sonner and the Amici further argued that the California legislature abrogated the inadequate-remedy-at-law doctrine for equitable restitution claims under the UCL and CLRA.The Ninth Circuit rejected this argument, finding that pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and Guaranty Trust Co. of New York v. York, 326 U.S. 99 (1945), federal courts must apply equitable principles derived from federal common law to claims for equitable restitution under California’s UCL/CLRA. Thus, state law cannot circumscribe a federal court’s equitable powers even when state law affords the rule of decision.The Court held that, “[r]egardless of whether California authorizes its courts to award equitable restitution under the UCL and CLRA, when a plain, adequate, and complete remedy exists at law, we hold that federal courts rely on federal equitable principles before allowing equitable restitution in such circumstances. And because Sonner fails to demonstrate that she lacks an adequate legal remedy in this case, we affirm the district court’s order dismissing her claims for restitution.”[2]The Ninth Circuit further explained that “the strong federal policy protecting the constitutional right to a trial by jury outweighs [a state’s] procedural interest.”[3] Following federal common law, plaintiffs must establish that they lack an adequate remedy at law before obtaining equitable restitution. The Ninth Circuit held that Sonner failed to make such a showing because the complaint did not allege she lacked an adequate legal remedy, and she failed to explain how seeking the exact same amount of money she requested in damages for the same harm was inadequate or incomplete.[4]Lastly, the Ninth Circuit held that the district court did not abuse its broad discretion in denying leave to amend, considering it cautioned Sonner that a third amendment would be “unfair, prejudicial, and an affront to the judicial system.”[5]TakeawaysWhen litigating in federal court, defendants should consider moving to dismiss equitable claims for restitution when the plaintiff has an adequate legal remedy, even if state law authorizes its courts to award equitable restitution. Federal courts rely on federal equitable principles before allowing equitable restitution in such circumstances. See Mort v. United States, 86 F.3d 890, 892 (9th Cir. 1996) (“It is a basic doctrine of equity jurisprudence that courts of equity should not act . . . when the moving party has an adequate remedy at law.” (ellipsis in original) (quoting Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381 (1992))). Thus, a plaintiff must establish that she lacks an adequate remedy at law before securing equitable restitution for past harm, even under consumer protection statutes like California’s UCL, CLRA, and False Advertising Law.Notably, the relevant test is whether an adequate damages remedy is available, not whether plaintiff elects to pursue it, or whether plaintiff will be successful in that pursuit. See, e.g., McKesson HBOC, Inc. v. New York State Common Ret. Fund, Inc., 339 F.3d 1087, 1093 (9th Cir. 2003) (holding that equitable relief was not available to plaintiff because it had “potential legal claims against any number of parties,” and “[w]hether [a plaintiff] chooses to pursue these remedies… does not alter the availability of the remedies at law.”); United States v. Elias, 921 F.2d 870, 874 (9th Cir. 1990) (“[f]ailure to comply with a remedy at law does not make it inadequate so as to require the district court to exercise its equitable jurisdiction.”); Rhynes v. Stryker Corp., 2011 WL 2149095, at *4 (N.D. Cal. May 31, 2011) (“[p]laintiffs’ argument that they will have no adequate remedy at law if their other claims fail is unavailing. Where the claims pleaded by a plaintiff may entitle her to an adequate remedy at law, equitable relief is unavailable.” (emphasis in original)). Therefore, even if a plaintiff fails to assert a legal remedy, defendants should investigate whether an adequate remedy at law is available. If so, defendants should consider moving to dismiss equitable claims for restitution.[1] Sonner v. Premier Nutrition Corp., No. 18-15890, 2020 WL 3263043 (9th Cir. June 17, 2020).[2] Id. at *8.[3] Id. at *5.[4] Id.[5] Id. at *8.

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Ninth Circuit Holds Plaintiffs Not Entitled To Equitable Restitution Under UCL/CLRA If Adequate Remedy At Law Is Available

Ninth Circuit Confirms No Choice-of-Law Analysis Necessary to Certify Settlement Class

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Earlier this month, the Ninth Circuit held that state law cannot expand or confine a federal court’s power to issue equitable restitution because federal courts

Ninth Circuit Holds Plaintiffs Not Entitled To Equitable Restitution Under UCL/CLRA If Adequate Remedy At Law Is Available

The Henry Schein arbitration battle is making its way to the Supreme Court again. The Court recently <a href="https://www.supremecourt.gov/docket/docketfiles/html/public/19-963.html">granted</a> Henry Schein, Inc.’s certiorari petition to answer the question of “Whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.” Henry Schein, Inc. v. Archer & White Sales, Inc., No. 19-963 (2019). In other words, if an arbitration agreement carves out certain claims (like injunctive relief), does that create a loophole that allows the district court to decide the arbitrability of those claims?Round 1As we <a href="https://classdismissed.mofo.com/consumer-products/leave-arbitration-to-the-arbitrator/">explained</a> last year, the case started when Archer & White Sales, Inc., a small business that distributes dental equipment, sued a dental equipment manufacturer and Schein, a major distributor of the equipment, for alleged antitrust violations. The parties’ agreement 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].” Henry Schein, Inc. (“Schein”) invoked the FAA and sought to compel arbitration. In opposition, Archer & White relied on a court-created exception 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 <a href="http://www.ca5.uscourts.gov/opinions/pub/16/16-41674-CV0.pdf">affirmed</a>, 878 F.3d 488 (5th Cir. 2017). The Supreme Court vacated the decision, unanimously <a href="https://www.supremecourt.gov/opinions/18pdf/17-1272_7l48.pdf">concluding</a> that the “wholly groundless” exception was inconsistent with the FAA and the Court’s precedents, 139 S. Ct. 524 (2019). The decision suggested that the Court as constituted remains firmly on a pro-arbitration path and will continue to strictly adhere to the FAA.Round 2 On <a href="http://www.ca5.uscourts.gov/opinions/pub/16/16-41674-CV1.pdf">remand</a>, the Fifth Circuit again refused to compel arbitration, 935 F. 3d 274 (5th Cir. 2019). The Fifth Circuit acknowledged that the parties had delegated at least some questions of arbitrability to the arbitrator. But because the arbitration agreement carved out injunctive relief claims, the agreement did “not clearly and unmistakably delegate[] the question of arbitrability to an arbitrator.” The Fifth Circuit therefore concluded that the court—and not the arbitrator—was responsible for determining the arbitrability of the claims at issue. It then held that the action was one “seeking injunctive relief” and thus exempt from arbitration under the parties’ agreement.  Schein filed a <a href="https://www.supremecourt.gov/DocketPDF/19/19-963/130539/20200131112522163_Henry_Schein_cert_petition.pdf">petition for writ of certiorari</a>, which the Supreme Court granted.[1]As Schein’s petition pointed out, courts are divided on the question presented. Some hold that the question of whether the provision exempts a particular claim from arbitration is itself a question of arbitrability, and the arbitrator must decide that question once the moving party has demonstrated the existence of a clear and unmistakable delegation. Others, like the Fifth Circuit, hold that the presence of a carve-out provision negates an otherwise clear and unmistakable delegation. Schein argues that this approach “threatens to render even the clearest and most unmistakable delegation ineffective,” allowing courts to easily override a contract’s delegation of authority to the arbitrator. The Supreme Court’s decision is expected to provide much-needed clarity in this matter. In the meantime, Morrison & Foerster’s <a href="https://www.mofo.com/capabilities/class-actions-mass-torts.html">Class Actions and Mass Torts</a> attorneys can provide further insight on the implications of this action.[1] The Court denied a cross-petition by Archer & White Sales, which asked the Court to decide (1) whether an arbitration agreement that identifies a set of arbitration rules to apply if there is arbitration clearly and unmistakably delegates to the arbitrator disputes about whether the parties agreed to arbitrate in the first place; and (2) whether an arbitrator or a court decides whether a nonsignatory to an arbitration agreement can enforce the arbitration agreement through equitable estoppel.

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Schein On: Supreme Court to Decide Key Arbitration Delegation Question

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 Henry Schein arbitration battle is making its way to the Supreme Court again. The Court recently granted Henry Schein, Inc.’s certiorari petition to answer 

Schein On: Supreme Court to Decide Key Arbitration Delegation Question

A number of startups announced they would begin selling at-home COVID-19 testing kits this week. These startups included:  Carbon Health, a tech-enabled healthcare network that combines virtual and in-person care, Everlywell, a company that offers food sensitivity and various other home health tests, and Nurx, an app that delivers prescriptions and STI testing kits.But the U.S. Food and Drug Administration (FDA) quickly responded, demonstrating that it is actively and aggressively monitoring the market for products with fraudulent COVID-19 claims, as we previously reported <a href="https://classdismissed.mofo.com/consumer-products/fda-and-ftc-send-warning-letters-to-companies-marketing-products-to-treat-coronavirus-state-attorneys-general-follow-suit/">here</a>.In its <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-alerts-consumers-about-unauthorized-fraudulent-covid-19-test-kits">March 20 statement</a>, FDA directly warned consumers—and indirectly warned the startups—that it “has not authorized any test that is available to purchase for testing yourself at home for COVID-19.” In other words, it “is beginning to see unauthorized fraudulent test kits that are being marketed to test for COVID-19 in the home.” FDA suggested that the public health value of expanded COVID-19 testing is predicated on testing that is “safe and accurate.”FDA also clarified its Policy for Diagnostic Tests for Coronavirus Disease-2019. The policy was <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-issues-new-policy-help-expedite-availability-diagnostics">published on February 29</a>, and <a href="https://www.fda.gov/regulatory-information/search-fda-guidance-documents/policy-diagnostic-tests-coronavirus-disease-2019-during-public-health-emergency">updated on March 16</a>, to expedite the availability of diagnostic tests. The policy describes the circumstances under which laboratories that develop and validate tests for coronavirus can use the tests before FDA has completed review of their Emergency Use Authorization (EUA). The policy only applies to laboratories that are certified to perform high-complexity testing consistent with requirements under Clinical Laboratory Improvement Amendments (CLIA).However, in an <a href="https://www.fda.gov/medical-devices/emergency-situations-medical-devices/faqs-diagnostic-testing-sars-cov-2#offerhometest">FAQ section</a>, FDA clarified that it is not blessing at-home COVID-19 testing kits—even if they are developed by a CLIA-certified lab. Instead, FDA “encourage[d] developers to discuss their validation of home use and/or self-collection tests with [the agency] early in their development process.” Test developers and laboratories who have questions about the EUA process can contact FDA’s 24-hour toll-free phone line.The Morrison & Foerster COVID-19 Task Force will continue to provide updates as the FDA issues guidance for consumer-facing product manufacturers.

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FDA Warns Against At-Home COVID-19 Testing Kits

Using Waivers to Curb COVID-19 Legal Exposure

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A number of startups announced they would begin selling at-home COVID-19 testing kits this week. These startups included:  Carbon Health, a tech-enabled healthc