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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Software Gains New Status as a Product Under Strict Liability Law

MAHA Commission Publishes Report to Highlight Childhood Chronic Disease Drivers

Tenth Circuit Denies Challenge to CPSC Rule Regulating High-Powered Magnets

Ousted CPSC Democrats Fight Back Against President Trump

Setting Consumer Standards for Lithium-Ion Batteries Act

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More aggressive enforcement actions and increased regulatory activities under the Biden Administration are here. In President Biden’s first weeks, he is making good on his promise to reverse course from the previous administration’s product safety agenda.So far, we witnessed rare civil penalties against product manufacturers, a flurry of recalls, and the progression of new product safety regulations. We also expect Biden to nominate a new commissioner to the Consumer Product Safety Commission (CPSC), which will shift the agency’s power balance.Enforcement Actions. CPSC recently announced a $7.95 million civil penalty in a settlement with Cybex International, Inc., an exercise equipment manufacturer.[1] CPSC charged Cybex with failing to immediately report a known product safety defect. CPSC learned Cybex had received 85 reports of broken handles on its arm curling machine and 27 reports of injuries on its press machine but never notified CPSC. Cybex recalled the products several years ago but, on February 11, 2021, agreed to pay the civil penalty to resolve CPSC’s charges.In early January 2021, a fire extinguisher manufacturer was ordered to pay a $12 million civil penalty following a rare referral from CPSC to the Department of Justice.[2] The government alleged Kidde failed to immediately report a serious defect in its fire extinguishers, underreported the scope and nature of the defect and associated risk, made misrepresentations to CPSC, and misused a registered safety certification mark.All companies in a product’s distribution chain have a duty to report potential defects that create an unreasonable risk of serious injury to consumers. The civil penalties against Cybex and Kidde should remind consumer product companies to evaluate and refresh their own compliance policies if needed. CPSC’s charges for failure to report underscore the urgency for companies to act fast in determining whether reportable product hazards exist. As a result, it is critical to promptly consult products liability counsel to assess reportability when a potential safety issue arises.Recalls. Since President Biden took office, CPSC has announced 20 product recalls, following 256 total recalls in 2020. The surge comes on the heels of steadily declining recall levels under prior acting chairwoman Ann Marie Buerkle. Recalls in 2019 decreased 7 percent from 2018 levels, which were a decrease of 8 percent from 2017 levels.[3] However, once Robert Adler, the current acting chairman, took over in October 2019, recall levels in 2020 jumped 6 percent from the previous year. This trend is likely to continue.Regulations. We expect the Biden Administration’s preference to shift to mandatory standards over the previous administration’s deference toward voluntary standards. Children and baby products represent a key area of CPSC’s current focus. The agency seeks to finalize a mandatory standard for crib mattresses that incorporates ASTM F2933-19 with modifications to make the standard more stringent. The proposed rule will also add “crib mattresses” as defined in the standard to the regulatory definition of “durable infant or toddler product.” In addition, CPSC issued a direct final rule to update its regulation of infant swings to the newly revised version of the standard, ASTM-F2088-20, which takes effect April 3, 2021. Businesses should keep an eye out as new proposed regulations come down the pipeline.CPSC’s Leadership. Biden has three opportunities to reshape the Commission. Acting Chairman Adler’s term ends in October 2021, prompting the anticipated announcement of his replacement in the next few months. Commissioner Elliot Kaye, whose term ended in October 2020 and is being held over for a year, is also due for a replacement while a fifth seat remains vacant. With the chance to fill three seats, Biden can return CPSC to full strength and secure a Democratic majority to pursue his agenda.One hurdle persists – the stalled nomination of Nancy Beck. President Trump nominated Beck to fill the vacant chairman position but she encountered opposition in the Senate. Even if the Senate confirms, Biden can simply remove her and nominate a new candidate. With a slim Democratic Senate majority, Beck’s nomination appears doomed, paving the way for a Biden nominee to replace Acting Chairman Adler. A Democrat-led Commission would likely drive increased compliance activities across industries and push for new mandatory safety regulations – a more aggressive approach lobbied for by consumer product safety advocates.Be on the lookout for more Client Alerts from Morrison & Foerster’s products liability and counseling group to stay apprised of the latest consumer product safety developments.[1] <a href="https://cpsc.gov/Newsroom/News-Releases/2021/Cybex-Agrees-to-Pay-7-95-Million-Civil-Penalty-for-Failure-to-Report-Serious-Injuries-Involving-its-Exercise-Equipment">https://cpsc.gov/Newsroom/News-Releases/2021/Cybex-Agrees-to-Pay-7-95-Million-Civil-Penalty-for-Failure-to-Report-Serious-Injuries-Involving-its-Exercise-Equipment</a>[2] <a href="https://www.justice.gov/opa/pr/fire-extinguisher-manufacturer-ordered-pay-12-million-penalty-delay-and-misrepresentations">https://www.justice.gov/opa/pr/fire-extinguisher-manufacturer-ordered-pay-12-million-penalty-delay-and-misrepresentations</a>[3] <a href="https://www.washingtonpost.com/business/2020/01/13/product-recalls-under-trump-fall-lowest-level-16-years-new-signs-emerge-tougher-regulator/">https://www.washingtonpost.com/business/2020/01/13/product-recalls-under-trump-fall-lowest-level-16-years-new-signs-emerge-tougher-regulator/</a>

Fertility Center Litigation

Fitbit

MicroPort

Leading Healthcare, Pharmaceutical, and Medical Device Company

Lethal Injection Matters – Major Pharmaceutical Company

Pain Pump Matters – Large Pharmaceutical Company

Major Technology Company

Leading Chemical Company

Security Device Company

In re Air Crash Near Peixoto de Azevedo, Brazil

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Co-Chair, Litigation Department

Erin Bosman is the global co-chair of Morrison Foerster’s litigation department. Erin is also the founder and co-head of the Artificial Intelligence group and former chair of the Complex Litigation + Advisement practice 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 the Global Co-Chair of Morrison Foerster’s Litigation Department. Erin is also the founder and co-head of the Artificial Intelligence Group and former chair of the Complex Litigation + Advisement Practice 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

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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

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

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Consumer Product Safety Enforcement To Heat Up Under Biden Administration

Consumer Product Safety Enforcement To Heat Up Under Biden Administration

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More aggressive enforcement actions and increased regulatory activities under the Biden Administration are here. In President Biden’s first weeks, he is making 

Product Liability

Consumer Products

CPSC

Erin Bosman, Julie Park, and Alexandra Preece authored an article for Law360 discussing how product liability regulation and litigation changed in 2020 due to the impact of the COVID-19 pandemic, as well as upcoming trends.“In a year dominated by the pandemic and political gridlock in Washington, D.C., it comes as no surprise that we saw no major product safety laws or regulations in 2020,” the authors wrote.“In fact, the U.S. Consumer Product Safety Commission did not issue a single civil penalty last year, although it did recently refer a case to the U.S. Department of Justice. We expect an uptick in regulatory activity this year, as consumer product safety advocates urge the incoming Biden administration to take a more aggressive approach to product safety.”

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, autom

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How 2020 Changed Product Liability — And What's Next

Using Waivers to Curb COVID-19 Legal Exposure

Erin Bosman, Julie Park, and Alexandra Preece authored an article for Law360 discussing how product liability regulation and litigation changed in 2020 due to t

How 2020 Changed Product Liability — And What's Next

Coronavirus (COVID-19)

Autonomous Vehicles & Robotics

Public Readiness and Emergency Preparedness Act (PREP Act)

Emergency Use Authorization (EUA)

David McDowell and Nancy Thomas authored an article for Law360 where they share five things in-house counsel can do when facing data breach class actions.First on the list is creating a strong foundation. “Depending on the nature and scope of the breach, companies can expect dozens if not hundreds of class actions in the days and weeks after announcing a breach,” the authors wrote. “This flurry of action can seem like chaos of the worst kind – the kind with no end in sight. At this early stage, companies need outside counsel who can scale up and handle dozens or hundreds of lawsuits until the filings slow and steer the lawsuits into a manageable posture.”

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5 Tips For In-House Counsel Anticipating Cyber Class Actions

5 Tips For In-House Counsel Anticipating Cyber Class Actions

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David McDowell and Nancy Thomas authored an article for Law360 where they share five things in-house counsel can do when facing data breach class actions.
First

Privacy

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

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

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

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

Arbitration

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.

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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 

Trials

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

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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

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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