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

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

Julie Y. Park

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

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Senior Counsel

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

Penelope A. Preovolos

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

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

Claudia M. Vetesi

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

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

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

Alexandra Barlow

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

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

Adam Hunt

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Ninth Circuit Weighs In on Standing Requirements for Privacy Claims and Approval of Injunctive Relief-Only Class Settlements

Ninth Circuit Weighs In on Standing Requirements for Privacy Claims and Approval of Injunctive Relief-Only Class Settlements | Class Dismissed

Courts scrutinize class action settlements to ensure they result from arms-length negotiations and are fair and reasonable to absent class members. Applying that standard to a nationwide settlement of a privacy lawsuit against Facebook, on March 3, 2020, the Ninth Circuit provided a helpful roadmap for parties seeking approval of class action settlements where the primary benefit afforded to the class is injunctive relief, not money damages. See Campbell v. Facebook, Inc., No. 17-16873 (9th Cir. Mar. 3, 2020). The Court also held that a violation of the Electronic Communications Privacy Act (“ECPA”), 18 U.S.C. § 2510 et seq., and California Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 630 et seq., may be sufficient to confer Article III standing without further allegations of harm.Case BackgroundIn December 2013, two Facebook users filed a class action alleging that the company captured, read, and used website links (URLs) in users’ private messages without consent in violation of the ECPA and CIPA, among other laws. The plaintiffs moved for certification of both a damages class under FRCP 23(b)(3) and an injunctive relief class under FRCP 23(b)(2). The district court certified an injunctive relief class but refused to certify a damages class. Thereafter, the parties reached a classwide settlement through mediation.In the settlement agreement, Facebook acknowledged that it had already made several changes to its practices and agreed for one year to add a 22-word disclosure regarding its collection and use of URLs to a Help Center page on its website. The agreement provided no monetary benefit to absent class members. Class counsel was permitted to seek an award of $3.89 million in fees and costs, which Facebook agreed not to oppose.Over an objector’s challenge, the district court found the settlement to be fair and reasonable and awarded class counsel the full $3.89 million in fees and costs requested. The objector appealed the decision to the Ninth Circuit. The appeal raised primarily two issues:  (1) whether the plaintiffs had standing; and (2) whether the district court abused its discretion in approving the settlement.Violation of ECPA and CIPA Is a “Concrete” InjuryThe Ninth Circuit held that the plaintiffs had Article III standing to assert claims under the ECPA and CIPA based on the allegedly unconsented to interception, cataloguing, and use of URLs the plaintiffs had shared in private messages.First, the Court concluded that the plaintiffs’ alleged injury – an intangible harm linked to a statutory violation – was sufficiently “concrete” to confer standing. It reasoned that the ECPA and CIPA expressly provide a private right of action and protect against the viewing or using of private communications, which are analogous to harms traditionally covered by the tort of intrusion upon seclusion. It further reasoned that the plaintiffs need not allege any further harm to have standing because, historically, under common law privacy torts, the intrusion itself was sufficient to render the defendant liable. And by creating private rights of action, the legislatures indicated that the ECPA and CIPA are modernizations of the privacy protections available at common law. Joining the Third Circuit, the Ninth Circuit held that those statutes codify a substantive extension of the right to privacy and the alleged violations constitute a “concrete” injury.Second, the Court concluded the plaintiffs had standing to seek injunctive relief and post-filing developments did not moot the case. At the time the plaintiffs filed their complaint, the company had ended some, but not all, of the challenged uses of private message URL data. In addition, the company continued to retain the data collected and thus could have resumed the discontinued uses of the data. That “combination of continuing harm plus likelihood of future harm” conferred standing upon the plaintiffs to seek injunctive relief. The case was not moot for similar reasons, since it was not absolutely clear the allegedly wrongful practices would not recur. The Court thus had jurisdiction and moved on to the merits.Ninth Circuit Affirms the Approval of Injunctive Relief-Only SettlementThe Ninth Circuit affirmed the district court’s approval of the settlement as “fair, reasonable, and adequate” under FRCP 23(e)(2), but along the way articulated useful guidance regarding several factors that impact the approval of classwide settlements that provide only injunctive relief.First, the Court rejected the contention that the settlement provided only “worthless” injunctive relief. It found that the year-long disclosure Facebook agreed to add to its website provided real value to class members in the form of “information to users about Facebook’s message monitoring practices, making it less likely that users will unwittingly divulge private information to Facebook or third parties in the course of using Facebook’s messaging platform.” The Court balanced the value of that relief against the likelihood plaintiffs may have obtained no benefit for the class had the case proceeded because the district court had refused to certify a damages class and plaintiffs faced numerous “doctrinal hurdles” to obtaining any other classwide relief. Accordingly, “[g]iven how little the class could have expected to obtain if it had pursued claims further . . . (and, correspondingly, how little it gave up in the release),” the “modest value” of the settlement was not “unreasonable.”Second, the Ninth Circuit rejected the objector’s argument, based on In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011), that the settlement unfairly prioritized class counsel’s interests over those of the class. In so doing, the Court addressed the “warning signs” that allegedly may indicate class counsel colluded with defense counsel to settle a case improperly and dismissed each of them. It first rejected the notion that class counsel received a disproportionate share of the settlement. Although absent class members received no monetary relief, the Court explained that that was a function of the district court’s certification of an injunctive relief only class and affirmed the finding that the class’s interests were vindicated by the non-monetary relief obtained through the settlement. The Court emphasized that “[t]here is no blanket rule foreclosing parties from agreeing that the class will receive only injunctive relief.”Next, the Court explained that where the benefits to the class are difficult to quantify (e.g., in an injunctive-relief only settlement), “district courts have discretion to award fees based on how much time counsel spent and the value of that time” without needing to estimate how the amount compares to the value of the recovery for the class. The Court found that the district court reasonably exercised that discretion because class counsel received a fee award of just over half of what would have fully compensated them for their time on the case; the district court had already declined to certify a damages class; the settlement agreement did not release the absent class members’ potential rights to damages; and the district court had an understanding of the injunctive relief’s value as a result of the hard-fought litigation prior to settlement. On that basis, “the district court did not abuse its discretion by concluding that the value of what the class received was reasonable not only in proportion to what the class gave up . . . but also in proportion to what class counsel received.”Finally, the Ninth Circuit rejected the contention that the fact the settlement agreement did not contemplate any formal notice to the class proved the settlement was unfair, noting that the district court required the parties to provide notice by posting information about the settlement on class counsel’s websites before final approval.Key TakeawaysAlthough the Ninth Circuit ultimately gave the stamp of approval to the settlement at issue in Campbell, it provided several warnings that parties should keep in mind in the course of negotiating and seeking approval of class settlements that confer primarily injunctive relief:The benefit obtained for absent class members should be commensurate with the release of claims by which absent class members will be bound. Settlements where class members receive no or very little monetary relief but release all money damages claims are subject to the highest scrutiny.Injunctive relief value should be proportional to the fee award. “[I]n a case where the class primarily receives non-monetary relief, but class counsel obtain millions of dollars, it may be an abuse of discretion not to at least attempt to approximate the value of injunctive relief and use that valuation in an assessment of disproportionality.”Consider some form of class notice for a Rule 23(b)(2) class settlement. Although the settlement in Campbell provided only injunctive relief and did not release claims for damages, the Court found it “odd that the parties repeatedly emphasized the informational value of the settlement while simultaneously arguing that it was unnecessary to provide class members formal notice that this information exists.”Settlements reached before a class is certified are subject to a higher standard of fairness. Campbell involved a post-certification settlement. As the Ninth Circuit reaffirmed, a “higher standard of fairness” applies when parties settle a case before certification, which places a premium on the proportionality of the fees requested by plaintiffs’ counsel to the benefit conferred on the class.Parties settling class actions affording primarily injunctive relief should take heed of the Ninth Circuit’s guidance in Campbell. It could mean the difference between a district court approving a classwide settlement or rejecting it and sending the parties back to the drawing board.