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

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Partner

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

Julie Y. Park

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

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Senior Counsel

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

Penelope A. Preovolos

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

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

Claudia M. Vetesi

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

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

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

Alexandra Barlow

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

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

Adam Hunt

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Alexandra Preece Barlow

Adam J. Hunt

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

New Wave of PFAS Legislation Aimed at Consumer Products

CPSC Releases Annual Report on Deaths and Injuries Involving Nursery Products

CPSC Proposes New Safety Rules for Infant Rockers

CPSC Commissioners Abstain from Retracting Infant Sleep Product Statements

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Legal 500 US 2021 has named Erin Bosman, David Fioccola, Jessica Grant, Julie Park, James Schurz, William Tarantino, and Claudia Vetesi among their top product liability and class action practitioners nationwide. The publication also recognized Morrison & Foerster as a top Tier 1 Firm in Product Liability, Mass Tort, and Class Action (Defense) for Consumer Products.<img src="https://media2.mofo.com/v3/images/blt5775cc69c999c255/bltfb9918f1567d3c2f/627315df220ab5285f51903d/210708-legal-500-product-liability.jpg?format=auto&quality=60" class="img-responsive" alt="Legal 500 Infographic" type="asset" sys-style-type="download">

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Morrison & Foerster Is Recognized As Tier 1 Firm in Product Liability, Mass Torts, and Class Action for Consumer Products

Legal 500 US 2021 has named Erin Bosman, David Fioccola, Jessica Grant, Julie Park, James Schurz, William Tarantino, and Claudia Vetesi among their top product 

Morrison & Foerster Is Recognized As Tier 1 Firm in Product Liability, Mass Torts, and Class Action for Consumer Products

Starting next month, businesses in New York City that collect biometric identifier information may be required to provide individuals with notice and be prohibited from selling or profiting from such information. New York City’s biometric privacy law (2021 NYC Local Law No. 3, NYC Admin. Code §§ 22-1201–22-1205) takes effect on July 9, 2021 and regulates the “collection, use, and retention” of biometric identifier information.  To avoid potential liability, businesses should evaluate both whether they are “commercial establishments” subject to the law and if any technology they use collects biometric identifier information. Read our <a href="https://www.mofo.com/resources/insights/210623-biometric-identifier-information-law.html?utm_source=publication&utm_medium=email">client alert here</a>.

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Marian Waldmann Agarwal is a partner in the Privacy + Data Security Group at Morrison Foerster. She also co-leads the firm’s Artificial Intelligence Group and is a member of the global Environmental, Social, and Governance (ESG) Steering Committee.

Marian Waldmann Agarwal

Marian A. Waldmann Agarwal

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Open for Business: Are You Prepared for New York City’s Biometric Identifier Information Law?

Open for Business: Are You Prepared for New York City’s Biometric Identifier Information Law?

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Starting next month, businesses in New York City that collect biometric identifier information may be required to provide individuals with notice and be prohibi

The Supreme Court has issued its much-anticipated ruling in Facebook v. Duguid, impacting many pending TCPA cases nationwide and providing guidance to the many businesses that engage in calling and texting campaigns. The TCPA generally requires an individual’s prior consent to use an automatic telephone dialing system (an “autodialer”) to call or text his or her mobile phone, including for non-marketing purposes. The definition of an autodialer is thus crucial to whether and when a business may call or text its customers, prospects, or even employees. Read our <a href="https://www.mofo.com/resources/insights/210405-supreme-court-ruling-limits.html?utm_source=publication&utm_medium=email">client alert</a>.

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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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).

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Much-Anticipated Supreme Court Ruling Limits the TCPA’s Definition of an Autodialer

Much-Anticipated Supreme Court Ruling Limits the TCPA’s Definition of an Autodialer

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The Supreme Court has issued its much-anticipated ruling in Facebook v. Duguid, impacting many pending TCPA cases nationwide and providing guidance to the many 

On September 6, 2018, Kimberly-Clark and affiliates filed a petition for writ of certiorari in Kimberly-Clark, et al. v. Davidson, No. 18-304, following a decision in the Ninth Circuit denying Kimberly-Clark’s motion to dismiss.  As we noted in previous posts, the Ninth Circuit had resolved a split among district courts in the circuit and held that a previously deceived consumer may have standing to seek an injunction against false advertising or labeling if he or she sufficiently alleges intent to repurchase the product in the future.  (See <a href="https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/">https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/</a>; <a href="https://classdismissed.mofo.com/consumer-products/update-ninth-circuit-softens-its-decision-in-flushable-wipes-case/">https://classdismissed.mofo.com/consumer-products/update-ninth-circuit-softens-its-decision-in-flushable-wipes-case/</a>.)  In Kimberly-Clark’s petition, the companies ask the Supreme Court to resolve the issue of whether a consumer, who after using a product and determining that a representation concerning that product is allegedly misleading, can plausibly allege a “real and immediate threat” that she will be deceived by the same representation in the future so as to establish standing to seek an injunction.Case BackgroundAs we noted in our other posts, Plaintiff Jennifer Davidson in this case alleged that Kimberly-Clark’s and its affiliates’ pre-moistened wipes were misleadingly labeled as “flushable.”  Plaintiff Jennifer Davidson alleged that that this “flushable” label was false and misleading, and she sued Kimberly-Clark for violations of California consumer protection laws.  Plaintiff sought restitution and damages based on the price premium resulting from the label, as well as an injunction requiring Kimberly-Clark to discontinue labeling the wipes as “flushable.” Kimberly-Clark moved to dismiss plaintiff’s first amended complaint and the district court granted the motion.  Davidson appealed.The Ninth Circuit reversed, finding that a previously deceived consumer may have standing to seek an injunction against false advertising or labeling, even though the consumer now knows or suspects that the advertising was false at the time of the original purchase. Kimberly-Clark then petitioned for rehearing en banc.  The Ninth Circuit denied the petition and instead amended its opinion, making clear that intent to purchase is a necessary element of injunctive standing.Kimberly-Clark’s Petition for CertiorariIn its petition, Kimberly-Clark proffers three main arguments as to why the Supreme Court should review the Ninth Circuit’s decision. First, Kimberly-Clark argues that the Ninth Circuit decision conflicts with the decision of every other federal circuit to consider this issue, including the Seventh Circuit, Third Circuit, and Second Circuit.  The company explains that each of these courts refused to find standing in similar circumstances.Second, Kimberly-Clark contends that the Ninth Circuit’s decision conflicts with the Supreme Court’s standing jurisprudence by diluting the injury-in-fact requirement in two ways. First, the decision conflicts with the requirement that a plaintiff must allege a future injury that is similar to the injury she has already suffered.  Here, the alleged past and future injuries were different.  Plaintiff’s first injury occurred when she purchased the product based on allegedly false information, which caused the product to be sold at a higher price, and which she would not have purchased absent this misrepresentation.  Her alleged future injury, by contrast, was the exact opposite.  If she saw Kimberly-Clark’s “flushable” wipes, she would not purchase them because she would not know what to believe about the meaning of “flushable.”  Second, even if her alleged future injuries were similar to her past injury, they would not be concrete and imminent.  Under this requirement, the injury must be “real” and not “abstract.” And it must be certainly impending.  Here, however, Davidson’s decision not to purchase the product could constitute harm only if the wipes were somehow reengineered to meet her criteria for flushability.  But Davidson had not alleged (and could not allege) that it was likely the wipes would be modified to satisfy her standards in the future.Finally, Kimberly-Clark argues that the decision would have sweeping, adverse, and nationwide effects. Here, an injunction would result in a prior restraint prohibited by the First Amendment.  It would also require, in effect, a nationwide injunction against Kimberly-Clark’s use of the term “flushable,” which would be “infeasible” given the realities of the national marketplace.Davidson’s OppositionIn her opposition to Kimberly-Clark’s petition, filed on November 5, 2018, Davidson begins her argument by reframing her injury as denial of accurate information to inform her decision whether to purchase Kimberly-Clark’s or others’ wipes. She also points to the fact-driven conclusion of the Ninth Circuit to attack each of Kimberly-Clark’s arguments.First, Davidson argues that the Ninth Circuit’s decision does not conflict with decisions in other circuits, which she argues all apply the same precedents, state the same principles, and reach consistent conclusions. Instead, other circuit court decisions were cabined to facts and none of them addressed the scenario presented in this case, where the plaintiff specifically alleged ongoing uncertainty over whether to purchase the product in the absence of an injunction requiring truthful advertising.Next, Davidson argues that her alleged injury easily satisfies injunctive-relief standing requirements. First, her alleged future injury is sufficiently similar to her past injury: just as Davidson could not rely on Kimberly-Clark’s representation when she previously bought the wipes, she cannot rely on it in the future, absent an injunction. Davidson further argues that, contrary to Kimberly-Clark’s argument that she has failed to allege a future injury, she has sufficiently alleged that she wants to purchase flushable wipes but is unable to rely on the information advertised by Kimberly-Clark.  Deprivation of information, she argues, is an injury sufficient to establish Article III standing.Davidson also argues that the consequences Kimberly-Clark envisions are exaggerated and there is no actual First Amendment issue presented in the case. Even more, the only speech at issue is false commercial speech, which receives no First Amendment protection.  And on a motion to dismiss, where the facts alleged in the complaint are taken as true, Kimberly-Clark cannot contest falsity of the claim.  Finally, Kimberly-Clark’s concerns about the “realities of the marketplace” are inapposite because the claim for injunctive relief would proceed in state court if plaintiff is held to lack Article III standing.Kimberly-Clark’s ReplyIn its reply, Kimberly-Clark rebuts Davidson’s argument that the Ninth Circuit’s decision below was “fact-bound” and does not conflict with other circuits. Instead, the company argues, every other court of appeals to consider whether a consumer has standing to seek to enjoin an allegedly misleading representation—despite already knowing the allegedly misleading nature of the representation—has answered in the negative.  In In re Johnson & Johnson Talcum Powder Products Mktg., Sales Practices and Liability Litig., 903 F.3d 278, 292 (3d Cir. 2018), for instance, the Third Circuit explained that because plaintiff was well aware of health risks associated with using Baby Powder, she was not likely to suffer future economic injury.  As Kimberly-Clark notes, the Ninth Circuit clearly rejects that proposition.  Kimberly-Clark also challenges Davidson’s “reframing” of her injury and argues that Davidson’s past and future harms are distinct.  Nor could Davidson be misled when she seeks Kimberly-Clark’s “flushable” label when Davidson knows exactly what that term means when it appears on a Kimberly-Clark label.To Grant or Not to Grant?Will the Supreme Court grant certiorari? It is hard to predict, but the Supreme Court denies the vast majority of petitions.  Whether the Supreme Court grants certiorari may turn on whether Kimberly-Clark has sufficiently demonstrated a circuit-wide split or whether at least four of the Supreme Court justices will agree with Davidson that the Ninth Circuit’s decision is cabined to the facts and does not actually conflict with the three other circuits.  The result could also turn on Kimberly-Clark’s arguments regarding injury.  In fact, the Supreme Court’s most recent decision on Article III standing and immediate threat of injury was five years ago in Clapper v. Amnesty Int’l USA, 568 U.S. 398.  There, Justices Alito, Roberts, Scalia, Kennedy, and Thomas held that respondents lacked Article III standing to seek prospective relief because they proffered no evidence of imminent injury and did not show that an injunction would redress their injuries. Justices Breyer, Ginsburg, Sotomayor, and Kagan dissented.  Given the current makeup of the Supreme Court, if Kimberly-Clark is able to get in front of the Supreme Court, it may have a chance of prevailing.We will provide relevant updates when the decision on the petition is released.

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Kimberly-Clark Seeks Supreme Court Review in “Flushable” Wipes Case

Kimberly-Clark Seeks Supreme Court Review in “Flushable” Wipes Case

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On September 6, 2018, Kimberly-Clark and affiliates filed a petition for writ of certiorari in Kimberly-Clark, et al. v. Davidson, No. 18-304, following a decis

In Hadley v. Kellogg Sales Company, Plaintiff Stephen Hadley, who has filed at least two additional lawsuits alleging the mislabeling of breakfast foods, sought certification of four California subclasses of purchasers of Kellogg’s cereal and cereal bar products.  On August 17, 2018, Judge Koh issued an order that carefully dissected Plaintiff’s request.  The court concluded that Plaintiff had established the requirements for class certification for several of his proposed subclasses challenging health claims on the labels of the products at issue.  Significantly, however, Judge Koh rejected Plaintiff’s attempts to certify a subclass challenging a representation made on the back of packaging of cereal bars.  She also concluded that Plaintiff had not established Rule 23(b)(3)’s predominance requirement as to his deceptive omission theory of liability due to his failure to present a viable damages model.Background. Plaintiff alleges that Kellogg’s use of statements containing terms such as “healthy,” “nutritious,” or “wholesome” on its cereal and cereal bar products misled consumers into believing that those products are healthy, when they are not because of the amount of added sugar they contain.  On this basis, Plaintiff alleges violations of the FAL, CLRA, and UCL, and asserts a claim for breach of warranty.  Plaintiff also predicates his consumer-protection claims on his allegations that Kellogg deceptively failed to disclose to consumers the products’ high sugar content, and that certain of the challenged statements violate FDA regulations.Narrowly Defined Subclasses Prevent Predominance Challenge Based on Lack of Exposure, But Back-of-the-Package Statements Do Not. Kellogg argued that many of the allegedly deceptive statements did not appear on the packaging of the cereal products for a substantial portion of the class period, and that this lack of uniform exposure created significant differences regarding the legal viability of class members’ claims.  The court disagreed.  Judge Koh reasoned that Plaintiff sidestepped this potential problem by narrowly defining the subclasses to include only those individuals who purchased products that actually displayed the challenged statements on their packaging.  Nevertheless, the court agreed with Kellogg that it could not infer class-wide exposure to the “wholesome goodness” statement that only appeared on the back panel of cereal bar packaging.  The court therefore declined to certify a subclass of purchasers of the cereal bar because it would have to conduct individualized inquiries to determine which class members saw the challenged statements.Advantage Realized Model Flunks Comcast for Omission Claims.  Comcast Corp. v. Behrend, 569 U.S. 27 (2013), requires a plaintiff to establish a damages model that matches his or her theory of liability and measures damages across the entire class.  Plaintiff claimed that his expert’s proposed “advantage realized model” satisfied the Comcast requirement for his theory that Kellogg deceptively failed to inform consumers about the allegedly high sugar content of its breakfast products.  Under the advantage realized model, Plaintiff’s expert proposed to measure the market advantage that Kellogg obtained by omitting that information.  The court concluded, however, that this model only provided a measure of nonrestitutionary disgorgement (Kellogg’s unjust enrichment), rather than restitutionary disgorgement (Plaintiff’s loss).  The court explained that nonrestitutionary disgorgement is not a permissible class-wide remedy under the FAL, CLRA, or UCL, and therefore Plaintiff’s damages model was not consistent with his omission theory of liability.Takeaway. Judge Koh’s decision in Hadley emphasizes that plaintiffs challenging multiple statements on multiple products in a single action are not excused from establishing the requirements for class certification for each product at issue and each theory of liability.  Even where defendants cannot entirely defeat class certification, they should parse plaintiffs’ broad requests and direct pointed attacks to particular products or theories of liability that are susceptible to challenge on any class certification requirement.  In particular, Judge Koh’s denial of class certification as to back-of-the-package statements and omission-based claims demonstrates that predominance and damages model requirements remain fruitful areas for opposing class certification.

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Mixed Results on Class Certification for “Cereal” Plaintiff

Mixed Results on Class Certification for “Cereal” Plaintiff

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In Hadley v. Kellogg Sales Company, Plaintiff Stephen Hadley, who has filed at least two additional lawsuits alleging the mislabeling of breakfast foods, sought

On May 9, 2018, the Ninth Circuit issued an Opinion amending its previous decision in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017).  As we noted in our December 4, 2017 post on the 2017 decision, the Ninth Circuit had held that the fact that a plaintiff now knows the “truth” of an allegedly false advertisement does not foreclose injunctive standing.  (See <a href="https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/">https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/</a>.)In its amended Opinion, the panel clarifies its decision and refines the requirements for injunctive standing in the misbranding context in three ways: (1) it confirms that Article III injunctive standing requires plaintiffs to allege an intent to repurchase the product at issue; (2) it changes its previous stance that consumer protection laws would be gutted without injunctive relief; and (3) it holds that Plaintiff sufficiently alleged a “concrete and particularized” injury as well as redressability.Case Background and the 2017 OpinionAs we noted in our December post, Plaintiff in this case alleged that Kimberly-Clark and affiliate’s pre-moistened wipes were misleadingly labeled as “flushable.”  Plaintiff sought restitution and damages based on the price premium resulting from the “flushable” label, as well as an injunction requiring Kimberly-Clark to discontinue using the “flushable” label.The Court’s opinion addressed the split in district court decisions as to whether understanding the truth of an alleged misrepresentation precludes injunctive standing.  In Davidson I, the Ninth Circuit answered in the negative.  The panel held that even if a consumer is aware that a label is falsely advertised, she or he may still suffer a threat of future harm necessary for Article III standing because, without an injunction, she or he may be unable to rely on the label in the future or might incorrectly believe the product has improved.  Davidson I thus clarified what does not preclude standing.  But it left open the question of what exactly is required.Davidson II Key HoldingsWhile the key holdings in Davidson II remain largely the same, the panel’s decision answers the question left open in Davidson I of what a Plaintiff must allege for Article III injunctive standing.  The panel’s decision also changes course from Davidson I by finding that a plaintiff’s inability to pursue injunctive relief would not gut consumer protection laws because the claims could be remanded to state court.  Finally, the panel expands its Article III Standing analysis and holds that Plaintiff demonstrated a “concrete and particularized” injury as well as redressability.<ul><li>Plaintiff Must Allege an Intention to Repurchase the Product at Issue.</li></ul>Although the majority of the Court’s October 2017 Opinion remains unchanged, the key differences on injunctive standing requirements lie in the footnotes.  In particular, the Court addresses other circuit decisions to assuage concerns that its decision conflicts with other circuits holding a deceived consumer does not have standing to seek injunctive relief.  As the Court notes, the facts in Davidson were distinguishable from these cases because the plaintiffs there had not sufficiently alleged intent to repurchase the product at issue.  One plaintiff, for instance, had alleged they may, one day, purchase the product.  See McNair v. Synapse Grp. Inc., 672 F.2d 213 (3d Cir. 2012).  Plaintiff, on the other hand, alleged that she would purchase truly flushable wipes.  Consistent with the Court’s prior decision in Bigelow (see <a href="https://classdismissed.mofo.com/consumer-products/reading-the-tea-leaves-ninth-circuit-further-clarifies-injunctive-standing-issues-in-bigelow-tea-cases/">https://classdismissed.mofo.com/consumer-products/reading-the-tea-leaves-ninth-circuit-further-clarifies-injunctive-standing-issues-in-bigelow-tea-cases/</a>), the Court’s revisions in Davidson II confirm that intent to purchase is a necessary element of injunctive standing.<ul><li>The Inability to Get Injunctive Relief Does Not Gut Consumer Protection Laws.</li></ul>In its previous decision, the Ninth Circuit expressed concern that California’s consumer protection laws would be effectively gutted if injunctive relief were unavailable to a consumer who learned post-purchase that a product’s label was false.  In its Amended Opinion, the Ninth Circuit notes to the contrary that “risks to plaintiffs . . . are occasionally overstated” because the proper course for a district court confronted with an Article III standing problem in a removed case is to remand for adjudication in state court.  Thus the issue of the “perpetual loop” of plaintiffs filing in California state court, defendants removing the case to federal court, and the federal court dismissing injunctive relief claims “should not occur.”<ul><li>Other Standing Requirements Are Met Based on the Inability to Rely on Advertisements.</li></ul>The Ninth Circuit’s Amended Opinion also adds an analysis on redressability and whether Plaintiff’s injury was “concrete and particularized.”  The Ninth Circuit answered in the affirmative: the alleged injury was concrete based on her allegations that she would purchase truly flushable wipes.  Finally, a favorable ruling would likely provide redress for her alleged injury because the injunction Plaintiff sought would prohibit Kimberly-Clark from using “flushable” until the product was truly flushable.Takeaways The Amended Opinion makes clear that its decision in Davidson is cabined to the facts and does not entirely foreclose the argument that a plaintiff lacks injunctive standing because he or she now knows the truth about an allegedly false advertisement.  Instead, a plaintiff only has standing in this situation if she or he sufficiently alleges intent to repurchase the product in the future.  Even more, a plaintiff’s inability to get injunctive relief due to lack of standing does not spell the end: the court should simply remand to state court.  And a threat of future harm is not enough:  a court must confirm the plaintiff has met each of Article III’s requirements.

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Update: Ninth Circuit Softens Its Decision In Flushable Wipes Case

Update:  Ninth Circuit Softens Its Decision In Flushable Wipes Case

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On May 9, 2018, the Ninth Circuit issued an Opinion amending its previous decision in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017).  As we no

For the second time, an Illinois federal judge powered down a proposed class action against VTech Electronics following a 2015 data breach of its internet-connected digital learning toys. The data breach also triggered separate allegations by the Federal Trade Commission (FTC) that VTech violated federal children’s privacy laws.Both developments illustrate the increasing exposure that the Internet of Things brings when consumer product manufacturers collect and store consumers’ personal data with connected devices. They also demonstrate how the need to address these issues upfront is imperative.VTech Toy Data Breach Class Claims Dismissed AgainIn In re VTech Data Breach Litigation, Case No. 1:15-cv-10889 (N.D. Ill. 2018), Plaintiffs sought to represent a class of consumers who purchased VTech’s digital learning devices.  Their claims arose after a hacker lifted personally identifiable information affecting 4.8 million adult accounts and 6.3 million child profiles linked to the devices.  Plaintiffs alleged that VTech broke promises to consumers because of its inadequate data-protection measures and subsequent suspension of online services accompanying the devices.The court disagreed. It had dismissed the suit once before on multiple grounds, including lack of standing to show future harm and failure to state a claim.  In granting VTech’s motion to dismiss for the second time, the court rejected Plaintiffs’ arguments that VTech spurned any implied promises it made to consumers at the time of purchase.The court reasoned that the alleged promises must be controlled by the express terms and conditions consumers agreed to when first using VTech’s online services post-sale. However, Plaintiffs failed to allege that VTech breached the express online service terms or the incorporated Privacy Policy that governed the device’s internet features.Plaintiffs also asserted that VTech’s online service suspension rendered the toy devices essentially useless in breach of the implied warranty of merchantability. VTech countered that Plaintiffs could not show that anything was actually wrong with the toys themselves or that users could never access the online services.  The court agreed with VTech, finding these pleading defects fatal to Plaintiffs’ claim.Finally, the court dismissed without prejudice Plaintiffs’ remaining allegations for unfair and deceptive business practices for failing to meet the heightened pleading requirement for fraud-based claims and dismissed the unjust enrichment claims on choice-of-law grounds.FTC Brings First Enforcement Action Under COPPA Involving Children’s IoT DevicesWhile the proposed class action sat in Illinois district court, the FTC filed a complaint against VTech in the FTC’s first children’s privacy case involving IoT toy products under the Children’s Online Privacy Protection Act (COPPA).Under COPPA, companies that collect personal information online from children under 13 must take reasonable steps to protect children’s data, including providing direct notice to parents that the device collects such information and obtaining their consent. The FTC claimed VTech failed to take these steps.The FTC also alleged that VTech’s Privacy Policy falsely stated that consumers’ personal information would be encrypted when in fact it was not.VTech settled with the FTC for $650,000 and agreed to implement a comprehensive data security program to ensure future compliance with COPPA and to protect consumers’ personal information.Implementing Effective Cybersecurity MeasuresVTech’s case—albeit a favorable result compared with its potential exposure—highlights the importance of implementing sound data privacy and security measures in consumer IoT devices as courts, federal regulators, and industry leaders grapple with <a href="https://classdismissed.mofo.com/consumer-products/connected-devices-bring-new-product-liability-challenges/">the interplay between cybersecurity and product liability</a>.For example, the Consumer Product Safety Commission (CPSC) will hold a <a href="https://classdismissed.mofo.com/consumer-products/cpsc-will-sharpen-its-focus-on-iot-in-upcoming-public-hearing-about-internet-connected-devices/">public hearing</a> on May 16, 2018, to discuss potential safety issues and hazards associated with IoT consumer products.As they continue to churn out internet-connected consumer products, IoT companies face increasing litigation risk from data breaches, privacy-related claims, and regulatory enforcement actions. Bringing in specialists to address these issues before they arise will reduce the inherent risks associated with IoT consumer products.