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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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

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Another court has allowed individuals to move past the preliminary stages of litigation by finding that “lost time” and the “time value of money” are injuries. Building on its prior rulings allowing data breach cases to jump over standing hurdles, on April 11, 2018, in Dieffenbach v. Barnes & Noble, Inc., No. 17-2408 (7th Cir. 2018), the court also allowed this data breach case to hop over the damages hurdle at the pleading stage.In Barnes & Noble, the plaintiffs alleged that in 2012, hackers breached PIN pads that Barnes & Noble used to verify customers’ payment information.  This breach allegedly allowed the hackers to steal customers’ names, card numbers, expiration dates, and PINs.  Barnes & Noble then announced to affected customers that it had been a victim of a data breach.  In response to this announcement, some customers allegedly spent monies on credit-monitoring services, while others allegedly expended merely their personal time to sort out issues related to the breach with their credit card companies and/or the police.Two lead plaintiffs brought this litigation: Heather Dieffenbach and Susan Winstead. Ms. Dieffenbach alleged four distinct injuries under California’s Customer Records Act and the Unfair Competition Law, three of which the Court found sufficient to allege injury: (1) her bank took three days to restore funds someone else had used to make a fraudulent purchase; (2) she had to spend time sorting things out with police and her bank; and (3) she could not make purchases using her compromised account for three days.  And Ms. Winstead alleged two theories of injury under Illinois’ Consumer Fraud and Deceptive Business Practices Act: (1) her bank contacted her about a potentially fraudulent charge on her credit card statement and deactivated her card for several days; and (2) the security breach at Barnes & Noble “was a decisive” factor in her renewing a credit-monitoring service.Consistent with its recent rulings in data breach actions, the Seventh Circuit noted that the alleged money spent for credit-monitoring services and the loss of the time value of money and one’s own time satisfied Article III standing. See Remijas v. Neiman Marcus Group, LLC, 794 F.3d 688 (7th Cir. 2015) (data breach plaintiffs may have standing based strictly on an alleged impending harm), and Lewert v. P.F. Chang’s China Bistro, Inc., No. 14-3700 (7th Cir. 2016) (the increased risk of fraudulent charges and identity theft that consumers faced because their data had been stolen was sufficient to confer standing).But the Seventh Circuit this time went further and held that the “time value of money” (the loss of access to plaintiff’s account for three days) and “significant time and paperwork costs incurred to rectify violations” can qualify as economic losses under the California statutory claims asserted. The Court also held that the Illinois plaintiff sufficiently pled injury under the Illinois consumer protection statute based on her allegation that the security breach “was a decisive factor” when she paid to renew her credit-monitoring service.While the Dieffenbach court seems to open the court doors to those who spend time “set[ting] things straight” after a data breach, the court expressly limited its decision to the pleadings stage.  The court stated, “All we hold today is that the complaint cannot be dismissed on the ground that the plaintiffs do not adequately allege compensation damages.”  The court also acknowledged the reality that, because Barnes & Noble was a victim of the data breach too, “[p]laintiffs may face a difficult task showing an entitlement to collect damages from a fellow victim of the data thieves” and that “it is far from clear that this suit should be certified as a class action.”  This is not the last word; plaintiffs continue to face an uphill battle in proving that a class should be certified and that defendant is liable for any damages.

CCPA and Data Breach Class Action for Leading Software Company

BIPA Class Action Against Gaming and Hospitality Company

TCPA and Other Class Actions for Major Technology Company

Data Breach Class Action for Technology Company

Wiretap Act action against a Major Consumer Electronics Manufacturer

TCPA Class Action Against National Chain

In re Pharmaceutical Industry Average Wholesale Price Litigation

In re Verizon Wireless Data Charges Litigation

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Clients seek out Tiffany for her successful track record in defending class action claims on behalf of clients in a broad range of industries, including technology, healthcare, and consumer product companies. She represents numerous Fortune 500 companies in high-stakes litigation involving privacy and marketing claims in courts throughout the United States.

Tiffany Cheung

Clients seek out Tiffany for her successful track record in defending class action claims on behalf of clients in a broad range of industries, including technology, healthcare, and consumer product companies. She represents numerous Fortune 500 companies in high-stakes litigation involving privacy and marketing claims in courts throughout the United States.

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Time Is Money: Time Spent Resolving Issues Arising from Data Breaches Enough to Plead Standing and Damages

Time Is Money: Time Spent Resolving Issues Arising from Data Breaches Enough to Plead Standing and Damages

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Another court has allowed individuals to move past the preliminary stages of litigation by finding that “lost time” and the “time value of money” are injuries. 

Overview Standing requirements have forced many a data breach action to stand down. Can a plaintiff have a claim (and on behalf of a massive class) when plaintiff hasn’t suffered any harm?  For those polling the Circuits, the Ninth Circuit votes “yes.”  And because no good deed goes unpunished, the Court interpreted defendant’s helpful advice to consumers as an “acknowledgment” of the harm.For years, district courts in the Ninth Circuit have debated whether the mere risk of future identity theft originating from a data breach constitutes an injury sufficient to confer Article III standing following the United States Supreme Court’s decision in Clapper v. Amnesty Int’l USA, 133 S.Ct. 1138 (2013).  On March 8, 2018, in In re Zappos.com, Inc., Customer Data Security Breach Litig., Case No. 16-16860 (9th Cir. 2018), the Ninth Circuit concluded that it did.  The Court found that, notwithstanding the Supreme Court’s decision in Clapper, its prior decision in Krottner v. Starbucks, 628 F.3d 1139 (9th Cir. 2010) – that the threat of future harm was sufficient to confer standing – remains the law in the Ninth Circuit.In In re Zappos, the plaintiffs alleged that in 2012 hackers breached the servers of online retailer Zappos.com.  The hackers allegedly stole the names, account numbers, passwords, email addresses, billing and shipping addresses, telephone numbers, and credit and debit card information for more than 24 million customers.  While some of the plaintiffs alleged that the hackers actually used their stolen information to conduct financial transactions, other plaintiffs did not.  Judge Robert C. Jones of the District of Nevada dismissed the claims of those plaintiffs who “failed to allege instances of actual identity theft or fraud” on the basis that they lacked Article III standing.  Those plaintiffs appealed.In re Zappos is the first time the Ninth Circuit considered whether Krottner could be reconciled with the Supreme Court’s later decision in Clapper.  In Krottner, the Ninth Circuit found that allegations of an “increased risk of future identity theft” resulting from the theft of a laptop represented a “credible threat of real and immediate harm” sufficient to establish Article III standing.  In Clapper, however, the Supreme Court found that the “objectively reasonable likelihood” that plaintiffs’ communications would be the subjects of governmental surveillance authorized by the Foreign Intelligence Surveillance Court did not rise to the level of a “certainly impending injury” necessary to establish Article III standing. Clapper thus undermined Krottner.In In re Zappos, however, the Ninth Circuit reasoned that Krottner and Clapper were not “clearly irreconcilable” and, thus, Krottner remained good law.  First, the Court noted that unlike in Clapper, the alleged injury in Krottner was not based on a “speculative multi-link chain of inferences” because “the Krottner laptop thief had all the information he needed to open accounts or spend money in the plaintiffs’ names.”  Second, the analysis of standing in Krottner did not involve any “national security or separation of powers concerns” as it did in Clapper.  And third, since Clapper, the Supreme Court has emphasized that allegations of a future injury may establish Article III standing when there is a “substantial risk that the harm will occur.”Operating within the Krottner framework, the Ninth Circuit decided that, while the information stolen in In re Zappos was not the exact same type as that stolen in Krottner, “the sensitivity of the stolen data” was “sufficiently similar.”  The Court reasoned that “the information taken in the data breach still gave hackers the means to commit fraud or identity theft.”  Notably, the Court relied upon Zappos’s own breach notice in reaching this conclusion, finding that Zappos itself effectively acknowledged the substantial risk of harm “by urging affected customers to change their passwords on any other account where they may have used ‘the same or a similar password.’”  As a result, the Court concluded that the plaintiffs had alleged an injury sufficient to confer Article III standing.With its decision in In re Zappos, the Ninth Circuit picks a side in the Circuit split and joins the circuit courts that have concluded that the threat of future harm is sufficient for purposes of Article III standing, including the D.C., Sixth, and Seventh Circuits. See, e.g., Attias v. Carefirst, Inc., 865 F.3d 620 (D.C. Cir. 2017), cert. denied, No. 17-641, 2018 WL 942459 (U.S. Feb. 20, 2018); Galaria v. Nationwide Mutual Ins. Co., 663 Fed.Appc. 384 (6th Cir. 2016); Remijas v. Neiman Marcus Grp., LLC, 794 F.3d 688, 693 (7th Cir. 2015).  Conversely, the Second, Fourth, and Eighth Circuits have determined that plaintiffs must allege an actual injury in the form of fraudulent charges or the opening of fraudulent financial accounts based upon their stolen information to establish Article III standing; general allegations of an increased risk of identity theft is not enough. See, e.g., Whalen v. Michaels Stores, Inc., 689 Fed.Appx. 89 (2d Cir. May 2017); Beck v. McDonald, 848 F.3d 262 (4th Cir. 2017); In re SuperValu Customer Data Security Breach Litig., 870 F.3d 763 (8th Cir. 2017).Key Takeaways Companies should take note of the Court’s decision in In re Zappos for a variety of reasons.  Although data breach cases often involve consumers who did not actually experience fraudulent charges or identity theft, the Ninth Circuit allowed such consumers to overcome the standing hurdle ― at least at the motion to dismiss stage.  But the Court was quick to point out that “as litigation proceeds beyond the pleading stage, the Complaint’s allegations will not sustain Plaintiffs’ standing on their own.”  Accordingly, while plaintiffs may be able to survive a motion to dismiss on allegations that a data breach put them at risk of a future harm, Article III standing may still prove to be a strong defense on summary judgment.Additionally, the decision particularly impacts companies that suffer a breach that triggers a notification requirement under state law. For example, California statutes mandate that certain victims of data breaches issue statements warning consumers about risks to their online accounts or data.  But in In re Zappos, the Court relied upon the language from this statutory notice issued by Zappos to support the Court’s finding that plaintiffs had Article III standing.  Thus, companies subject to data breaches should pay close attention to the precise language used in the notices they issue to evaluate the potential impact on plaintiffs’ standing arguments.

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No Injury? No Problem: Mere Risk of Identity Theft Can Establish Standing

No Injury?  No Problem:  Mere Risk of Identity Theft Can Establish Standing

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Overview Standing requirements have forced many a data breach action to stand down. Can a plaintiff have a claim (and on behalf of a massive class) when plainti

A split among U.S. Circuit Courts of Appeals regarding what harm should suffice to maintain standing in data breach litigation doesn’t get easier to address as new questions of whether extrinsic evidence from Dark Web searches of breached personal data for sale can be relied on at the motion to dismiss stage of litigation.The dark web—the alternative internet of websites often offering illegal products and stolen information for sale—presents complex issues in the context of considering harm in data breach litigation.Please see our full article as originally published by <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltb91f9a9dd9996fa2/627315370cffdf1eb1369d34/180319-dark-web-data-analysis.pdf">Bloomberg Law</a>. Reprinted with permission.

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Purvi G. Patel is the former managing partner of the Los Angeles Office. She represents retail, e-commerce, and other businesses in significant advertising, unfair competition, consumer fraud, and privacy 

Purvi G. Patel

Purvi G. Patel defends retail, e-commerce, and other businesses in significant advertising, unfair competition, consumer fraud, and privacy matters. She has built a robust practice defending household names in complex and class action litigation in federal and state courts across the country, winning motions to dismiss, defeating class certification, and securing summary disposition in several multi-million dollar lawsuits. Purvi is a strategic and practical thinker who is in tune with her clients’ priorities, which leads to successful outcomes both inside and outside the courthouse.

Purvi Patel

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The Dark Web—the Next Frontier in Data Breach Standing Analysis Amid a Deepening Circuit Split

The Dark Web—the Next Frontier in Data Breach Standing Analysis Amid a Deepening Circuit Split

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A split among U.S. Circuit Courts of Appeals regarding what harm should suffice to maintain standing in data breach litigation doesn’t get easier to address as 

One year ago, the federal government test drove its first set of self-driving policies with a four-part <a href="https://www.transportation.gov/AV-factsheet" target="_blank" rel="noopener">announcement </a>from the U.S. Department of Transportation. In twelve months, much has changed, but the wheels are still turning.The U.S. House of Representatives earlier this month passed the bipartisan Safely Ensuring Lives Future Development and Research in Vehicle Evolution (SELF DRIVE) Act. The SELF DRIVE Act continues the work of clarifying state and federal government roles as well as the federal government’s responsibilities with regard to safety, cybersecurity, privacy, and consumer education.Although SELF DRIVE has now launched, the engine is still heating up: The U.S. Senate is still developing its approach to federal policy in this space. Last week, the U.S. Senate held a hearing to this end, inviting experts on self-driving trucks to <a href="https://www.commerce.senate.gov/public/index.cfm/pressreleases?ID=BAC7FBCE-424B-4C61-8082-71B3E3D9333B" target="_blank" rel="noopener">testify </a>before its Commerce Committee. This latest action built on a set of bipartisan “principles” for <a href="https://www.commerce.senate.gov/public/index.cfm/pressreleases?ID=3319E728-1F3A-4316-8F7E-8CAF66000F8C" target="_blank" rel="noopener">legislation </a>that the U.S. Senate had released in June.The Executive Branch has also announced a change to its approach. Specifically, U.S. Department of Transportation Secretary Chao unveiled <a href="https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/documents/13069a-ads2.0_090617_v9a_tag.pdf" target="_blank" rel="noopener">“A Vision for Safety: 2.0” i</a>n Michigan <a href="https://www.transportation.gov/briefing-room/av-summit" target="_blank" rel="noopener">last week. </a>As Secretary Chao noted, this “replaces the Federal Automated Vehicle Policy Version 1.0” released last year, but it is not the Department’s final word: “DOT and NHTSA are already planning for Version 3.0 in 2018!”In short, for federal self-driving policy, the wheels are still turning – and the regulatory landscape will most certainly continue to evolve over the coming weeks and months.

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Wheels Are Turning on Federal Self-Driving Policy

Wheels Are Turning on Federal Self-Driving Policy

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One year ago, the federal government test drove its first set of self-driving policies with a four-part announcement from the U.S. Department of Transportation.

On August 17, 2017, the Second Circuit Court of Appeals vacated a district court’s denial of Uber’s and Mr. Travis Kalanick’s motions to compel arbitration in a case involving price-fixing accusations.  In Meyer v. Kalanick, No. 16-2750 (2d Cir. Aug. 17, 2017), the Second Circuit held, as a matter of law, that plaintiff Spencer Meyer received objectively reasonable notice of the terms of service and unambiguously assented by clicking “register” on his smartphone when he signed up to use Uber’s services.  The Second Circuit also remanded for consideration of whether Uber and Mr. Kalanick waived the right to compel arbitration by defending the lawsuit.This was a heavily watched case with amici support on both sides.  The foes of arbitration hoped to use Meyer to call into question the viability of all click-through protocols that many companies use for their terms and conditions, not just Uber.Background of the Case.  In 2015, Mr. Meyer, on behalf of a putative class of Uber riders, filed an action against Mr. Kalanick, alleging that the Uber App allows drivers to fix prices amongst themselves, in violation of the Sherman Act, 15 U.S.C. § 1, and the Donnelly Act, N.Y. Gen. Bus. Law § 340.  Uber was subsequently joined as a defendant in 2016.  Uber and Mr. Kalanick filed motions to compel Meyer to arbitrate.  Judge Rakoff of the Southern District of New York denied the motions, concluding that Mr. Meyer did not have reasonably conspicuous notice of the terms of service and did not unambiguously manifest assent to the terms.  See Meyer v. Kalanick, 200 F. Supp. 3d 408, 420 (S.D.N.Y. 2016).  The district court did not reach Meyer’s other defenses to arbitration, including whether defendants waived their right to arbitrate by actively participating in the litigation.The District Court’s Determinations Were Subject to De Novo Review.  Plaintiff argued that the Second Circuit was limited to clear-error review of the district court’s findings and legal conclusions.  The Second Circuit disagreed, finding that it would review de novo the denial of a motion to compel arbitration.  While factual findings upon which a conclusion was based would be reviewed for clear error, the facts in Meyer were undisputed.Beyond “Clickwrap” and “Browsewrap.” The court discussed web-based contracts, noting that it had previously distinguished web-based contracts as either “clickwrap” or “browsewrap” agreements.  “Clickwrap” agreements, which courts routinely uphold, require a user to click an “I agree” box after being presented with the terms and conditions of use.  “Browsewrap” agreements, on the other hand, generally post terms and conditions on a website via a hyperlink at the bottom of the screen.  Because no affirmative action is required in “browsewrap” agreements, the determination of the validity of these agreements depends on whether the user has actual or constructive knowledge of the terms and conditions.  The Second Circuit noted, however, that not all interfaces would fit neatly into the “clickwrap” or “browsewrap” categories.  As such, classification of web-based contracts would not resolve the notice inquiry. The Parties Mutually Assented to the Agreement.  Under California law, the Second Circuit considered whether the undisputed facts established that there was: (1) reasonably conspicuous notice of the existence of contract terms; and (2) unambiguous manifestation of assent to those terms.  Analyzing Uber’s agreement, the court found both requirements were established.In analyzing the first requirement, the court considered “the perspective of a reasonably prudent smartphone user.”  Looking at the interface at issue in the case, the court concluded that the design of the screen and language used rendered the notice provided reasonable as a matter of law.  First, the registration payment screen was uncluttered.  The text on that screen advised Uber users that “By creating an Uber account, you agree to the TERMS OF SERVICE & PRIVACY POLICY.”  This text, along with a hyperlink to the terms of service, appeared directly below the buttons for registration.  Even more, the entire screen was visible without scrolling.  Finally, although the text was in a small font, its dark print contrasted with the bright white background, and the hyperlinks were in blue and underlined.The court also found that the fact that the terms of service were available by hyperlink did not preclude a determination of reasonable notice because the hyperlinked text was reasonably conspicuous.  Additionally, the court disagreed with the district court’s determination that the location of the arbitration clause within the terms of service was itself a “barrier to reasonable notice.”  Accordingly, the Uber App provided reasonably conspicuous notice as a matter of law.In analyzing the second requirement, the court found that although Meyer’s assent to arbitration was not express, it was unambiguous in light of the objectively reasonable notice of the terms.  A reasonable user would know that, by clicking the registration button, he or she was agreeing to the terms and conditions accessible via the hyperlink.  Plaintiff argued that the fact that clicking the register button had two functions—creation of a user account and assent to the terms of service—rendered plaintiff’s assent ambiguous.  The court disagreed.  The physical proximity of the notice  regarding the terms of service to the register button made clear to a user that the linked terms pertained to the action the user was about to take.The court concluded that, as a matter of law, Meyer agreed to arbitrate his claims with Uber.The District Court Would Decide the Issue of Waiver.  Plaintiff argued in the alternative that defendants waived their right to arbitrate by actively litigating the underlying lawsuit.  Although a defense of waiver would normally be decided by the arbitrator, the court found that, here, the district court could properly decide the question because defendants had participated in litigation.  As such, the court remanded the case to the district court to consider whether defendants had waived their right to arbitrate.The court’s decision signals what factors at least one Court of Appeal will consider in determining the validity of consent in hybrid agreements—those agreements that don’t fall expressly into the “clickwrap” or “browsewrap” categories.  It also confirms the validity of the electronic registration process used by Uber and many other companies.Request to amend its opinion denied.  On Tuesday, August 29, 2011, the Second Circuit denied Plaintiff’s motion to have the Second Circuit amend its August 17, 2017 opinion.  Plaintiff requested that the Second Circuit include language in its opinion stating that the district court could consider the extent to which Plaintiff may have been unable to see Uber’s Terms of Service hyperlink (an argument made by plaintiff in Metter v. Uber Technologies, Inc., Case No. 3:16-cv-06652-RS).  The Court denied the motion without prejudice to Plaintiff raising the issue in the district court in the first instance.

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Second Circuit Scraps District Court’s Denial of Uber’s Motion to Compel Arbitration

Second Circuit Scraps District Court’s Denial of Uber’s Motion to Compel Arbitration

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On August 17, 2017, the Second Circuit Court of Appeals vacated a district court’s denial of Uber’s and Mr. Travis Kalanick’s motions to compel arbitration in a

The Federal Trade Commission’s recent workshop on drones raised familiar issues related to the privacy implications of a new and evolving technology. While the many potential innovations and consumer benefits of drone technology were highlighted, the workshop’s focus was on whether drones raise unique privacy considerations and, if so, how such considerations should be addressed.

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

FTC Workshop on New Drone Technologies Raises Familiar Privacy Issues

The Federal Trade Commission’s recent workshop on drones raised familiar issues related to the privacy implications of a new and evolving technology. While the 

FTC Workshop on New Drone Technologies Raises Familiar Privacy Issues

Defending the American people and economy from hostile state or state-sponsored actors is critical for both economic and national security reasons. However, while our state and federal law enforcement agencies vigorously protect people from criminals and assist victims of crimes, companies that publicly disclose that they have been the victim of a cybercrime are not treated like a typical victim by federal and state regulators. Instead, they are investigated by numerous agencies, including the Federal Trade Commission, the State Attorneys General, and the Security and Exchange Commission, while often simultaneously sued by consumers, business customers, and shareholders. In the face of the onslaught of cyber threats, U.S. companies are charged with defending themselves in cyberspace or facing legal liability. How did we arrive at holding those victimized by a cybercrime liable for the damage inflicted upon them?Read more in Miriam Wugmeister’s The Hill op-ed.

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Few lawyers in the world have Miriam Wugmeister’s breadth and understanding of privacy and data security laws, obligations, and practices. 