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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Last week, the Federal Communications Commission (“FCC”) issued a public notice (the “Notice”) seeking comment on key aspects of the Telephone Consumer Protection Act (“TCPA”) that were addressed in the recent decision in ACA International, et al. v. FCC, 885 F.3d 687 (D.C. Cir. 2018).  As we noted in our Client Alert on the decision, the court in ACA set aside portions of the FCC’s 2015 Order interpreting, among other things, the definition of an automatic telephone dialing system (“ATDS”) and the applicability of the TCPA to reassigned numbers.More specifically, the Notice seeks comment on:<ul><li>What constitutes an “automatic telephone dialing system”? Under the TCPA, an ATDS is defined as equipment with the capacity to store or produce telephone numbers to be called. In ACA, the Court found that the FCC significantly overreached in its interpretation of “capacity.” The Notice thus seeks comment on how to interpret “capacity,” including how much user effort should be required to enable the device to function as an ATDS. The notice also seeks comment on what functions a device must be able to perform to qualify as an ATDS. For instance, to be “automatic,” must an ATDS dial numbers without human intervention? Must the ATDS dial thousands of numbers in a short period of time? What if a system has ATDS functionality, but the caller does not use the ATDS functionality when making a call?</li></ul><ul><li>How should calls to reassigned wireless numbers be treated? The TCPA exempts from liability certain calls made with prior express consent of the called party. A key issue in the ACA decision was interpretation of the term “called party” and how it applies to reassigned numbers. For instance, what happens if a business has obtained consent from the caller it is trying to call, but the wireless number associated with the person who provided consent is “reassigned,” and the business calls someone who did not consent to be called? The FCC’s answer to this issue in its 2015 Order was a “one-call safe harbor” for callers to detect reassignments. The Court in ACA, however, struck down this approach as arbitrary and capricious. The FCC’s notice thus seeks comment on how to interpret the term “called party” for reassigned numbers. For instance, does “called party” refer to “the person the caller expected to reach” or “the person actually reached”?</li></ul><ul><li>How may a called party revoke consent? In its 2015 Order, the FCC determined that consent may be revoked “at any time and through any reasonable means,” including orally or in writing, that “clearly expresses a desire not to receive further messages.” The Court in ACA left the ruling in place but suggested that a business could avoid TCPA liability by making available “clearly-defined and easy-to-use opt-out methods.” The FCC notice thus seeks comment on what opt-out methods would be sufficiently clear such that opt-outs outside of those methods would not constitute a “reasonable means.”</li></ul><ul><li>Pending petitions: The FCC notice also seeks comment regarding pending petitions for reconsideration, including the FCC’s Broadnet Declaratory Ruling as well as the 2016 Federal Debt Collection Rules.</li></ul>Comments on the FCC’s notice are due on June 13, 2018, with reply comments due on June 28, 2018. In the meantime, and as we noted in our Client Alert, businesses should continue to evaluate whether particular devices may be considered an ATDS as well as whether they have processes in place to provide a reasonable means of revoking consent.

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After ACA International, FCC Seeks Comment on Autodialer Definition

After ACA International, FCC Seeks Comment on Autodialer Definition

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Last week, the Federal Communications Commission (“FCC”) issued a public notice (the “Notice”) seeking comment on key aspects of the Telephone Consumer Protecti

Late last week, the D.C. Court of Appeals issued its much-anticipated ruling in ACA International et al. v. Federal Communications Commission, No. 15-1211 (Mar. 16, 2018).The ruling appears to pare back significantly the scope of activity that may be subject to the Telephone Consumer Protection Act, 47 U.S.C. 227, and its implementing regulations at 47 C.F.R. 64.1200 (collectively, the “TCPA”), as interpreted by the Federal Communications Commission (“FCC”).

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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An Autodialer Ain’t What It Used to Be: D.C. Circuit Rejects FCC’s Broad Ruling on the TCPA’s Scope

Federally-Backed Debt Collection Exception Not the Supreme Court’s Cup of T(CPA)

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Late last week, the D.C. Court of Appeals issued its much-anticipated ruling in ACA International et al. v. Federal Communications Commission, No. 15-1211 (Mar.

An Autodialer Ain’t What It Used to Be: D.C. Circuit Rejects FCC’s Broad Ruling on the TCPA’s Scope

In the high-risk Telephone Consumer Protection Act (TCPA) arena, the Ninth Circuit recently offered some respite. On January 10, 2018, the Ninth Circuit limited the potential liability that companies may unknowingly face for the communication practices of their upstream vendors. In Kristensen v. Credit Payment Services, Inc., No. 16-15823 (9th Cir. 2018), the Ninth Circuit affirmed summary judgment for defendant payday lenders, finding that the lenders were not vicariously liable for any unlawful text messages sent by a third-party lead generator. The TCPA plaintiff had received a text message from a company called AC Referral, which contained a link to a loan application website. AC Referral had contracted with lead generator Click Media, which in turn sold customer leads to a lead acquisition company LeadPile. The defendant lenders had hired LeadPile to help acquire customer leads for loans. In 2014, the District of Nevada certified a class of other similar text recipients. Even though the defendant lenders had no contact with the text sender, plaintiff argued that “defendants ratified AC Referral’s unlawful texting by accepting the benefits of the text messages sent by AC Referral while unreasonably failing to investigate its texting methods.” Applying principles of agency law, the Ninth Circuit concluded that the lenders could not be liable under a ratification theory. It was “undisputed that AC Referral did not enter into a contract with any of the lenders or with LeadPile” and “AC Referral did not communicate with or even know of the lenders or LeadPile before the lawsuit was filed.” Thus, because AC Referral never acted as an agent or purported agent of the defendants, there was no act that could be ratified. Summary judgment was also affirmed for the defendant intermediary company Click Media that actually contracted with AC Referral. Click Media’s contract stated that “AC Referral could use text message marketing and required AC Referral to comply with the TCPA.” The Ninth Circuit agreed that the plaintiff “presented no evidence that Click Media had actual knowledge” of the texting violation and “knowledge that an agent is engaged in an otherwise commonplace marketing activity [e.g., texting] is not the sort of red flag that would lead a reasonable person to investigate whether the agent was engaging in unlawful activities.” This ruling could reduce litigation risks for companies that are unaware and have no reason to suspect their vendors are sending communications that may not be in compliance with the TCPA.

TCPA Vicarious Liability Limited by Ninth Circuit in Texting Class Action

In the high-risk Telephone Consumer Protection Act (TCPA) arena, the Ninth Circuit recently offered some respite. On January 10, 2018, the Ninth Circuit limited

TCPA Vicarious Liability Limited by Ninth Circuit in Texting Class Action

Another Florida district court, another favorable ruling for companies facing TCPA lawsuits.  In Pozo v. Stellar Recovery Collection Agency, Inc., U.S. Magistrate Judge Anthony E. Porcelli granted summary judgment for defendant Stellar Recovery Collection Agency, Inc. (“Stellar”) after determining that the “point and click” dialing system it used to call the plaintiff did not constitute an automatic telephone dialing system (“ATDS”) under the TCPA.<a href="#_ftn1" name="_ftnref1">[1]</a>  This follows a recent decision out of the Southern District of Florida—Strauss v. CBE Group, Inc.—that granted summary judgment on similar grounds.Background.  The plaintiff claimed that he received several debt collection calls from Stellar and that the calls continued even after he told Stellar that it was calling the wrong person.  The parties disagreed over the number and content of calls but agreed that Stellar placed the calls using the web-based LiveVox Human Call Initiator (HCI) dialing system.  The sole issue on summary judgment was whether this dialing system constituted an ATDS.No Capacity or Potential Functionality to Autodial.  Relying on evidence submitted by Stellar that described how the technology worked, the court held that the HCI system did not have the capacity to function as an autodialer because it required “human intervention to make and route each call.”  Specifically, the evidence showed that:<ul><li style="margin-bottom: 10px;">Each call has to be initiated by a human “clicker agent,” who has to confirm, by clicking a dialogue box on his/her computer screen, that a particular telephone number should be dialed. If the clicker agent fails to click on the dialogue box, the call will not be placed.</li><li>Once a call is answered, the clicker agent refers the call to a human “closer agent,” who speaks with the customers. Clicker agents also monitor closer agent availability; the clicker agent cannot initiate a call if no closer is available to take it.</li></ul>The plaintiff pointed to cases involving a different LiveVox dialing system that courts found actionable under the TCPA.  But the court distinguished these cases, reasoning that, unlike that LiveVox predictive dialing system, the HCI system does not use any statistical algorithms to minimize agent wait time between calls, or automatically call numbers from a pre-generated list and then automatically connect answered calls to an available agent.The plaintiff also pointed to the FCC’s July 2015 <a href="https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-72A1_Rcd.pdf" target="_blank" rel="noopener">declaratory ruling</a>, in which the FCC broadened the definition of an ATDS to encompass not only a system’s “current configuration,” but also its “potential functionalities.”  The court again held firm, finding that there was no evidence that the HCI system could be “modified to make calls without human intervention,” and thus qualify as an ATDS under the new FCC standard.  The system did not have any automated dialing functionality that customers could activate.  Further, though LiveVox offers such automated dialing systems to customers, those systems were stored on a separate server from the HCI system.  The court conceded that Stellar could “hypothetically hire a team of programmers to modify and rewrite large portions of HCI’s code to enable HCI to make autodialed calls,” but, even if true, that “pointless endeavor” did not mean the HCI system had the capacity or potential functionality to autodial calls.Takeaway.  This is the latest of several cases that have re-affirmed the “human intervention” test even after the FCC’s expansion of the ATDS definition.  Thus, companies looking to mitigate TCPA risk should opt for calling systems in which human intervention is an essential element. <a href="#_ftnref1" name="_ftn1">[1]</a> Case No. 8:15-cv-929-T-AEP (M.D. Fla. Sept. 2, 2016).

“Human Intervention” in Calling System Dooms Plaintiff’s TCPA Claim

Another Florida district court, another favorable ruling for companies facing TCPA lawsuits.  In Pozo v. Stellar Recovery Collection Agency, Inc., U.S. Magistra

“Human Intervention” in Calling System Dooms Plaintiff’s TCPA Claim

On April 12, 2016, in Chen, et al. v. Allstate Insurance Co., No. 13-16816, the Ninth Circuit considered whether an unaccepted offer of judgment and tender of payment under Federal Rule of Civil Procedure 68 to fully settle—and thereby moot—a plaintiff’s individual claims would also moot putative class action claims.  Relying on the Supreme Court’s recent decision in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), Judge Raymond C. Fisher, writing for the panel, held that an unaccepted offer and tender of payment was not sufficient to moot a plaintiff’s class action claims.On February 14, 2013, plaintiff Florencio Pacleb filed a class action complaint against defendant Allstate in the Northern District of California, alleging he received five phone calls from Allstate in violation of the Telephone Consumers Protection Act (TCPA).  In April 2013, Allstate made a Rule 68 offer of judgment to plaintiff to settle his individual claims, plus injunctive relief and attorneys’ fees and costs.  Allstate deposited $20,000 in full settlement in an escrow account, to be paid to plaintiff upon entry of a district court judgment.  When the offer elapsed without a response from plaintiff, Allstate filed a motion to dismiss for lack of subject matter jurisdiction, arguing that because its Rule 68 offer would have satisfied all of plaintiff’s individual claims, his claims were effectively moot.  Allstate also sought dismissal of plaintiff’s class claims, arguing that if plaintiff’s individual claims were mooted, his class claims were also mooted.  District Court judge Phyllis J. Hamilton denied Allstate’s motion to dismiss, and later granted its motion to certify the issue for interlocutory appeal to the Ninth Circuit.Campbell-Ewald’s Unanswered Question While the court agreed with Allstate that its offer of judgment would fully satisfy plaintiff’s individual claims, it rejected Allstate’s argument that this mooted plaintiff’s class claims.  The court relied on Campbell-Ewald to hold that an unaccepted offer of judgment to settle individual claims does not moot class action claims.  (For more information on Campbell-Ewald, see our prior client alert).Campbell-Ewald left unanswered the question of whether the outcome would be different if a defendant deposited the full settlement amount into an account payable to plaintiff, and the court entered judgment for plaintiff in that amount.  Allstate argued that because it deposited the full amount of settlement funds—$20,000 —into an account payable to plaintiff upon entry of judgment, plaintiff’s individual and class claims were mooted.  Relying on Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011), the court held that Allstate’s tender of payment was irrelevant, because even if plaintiff’s individual claims were fully satisfied, an unaccepted Rule 68 offer still would not moot a class action, as long as the plaintiff could still file a timely motion for class certification, which he could.Alternate Reasons to Deny The Court then offered two alternate reasons why plaintiff’s individual and class claims were not mooted by Allstate’s offer of judgment and deposit of funds into an account payable to plaintiff.  First, the Court went on to say that even if Pitts were not controlling, its ruling would not change.  Relying on Campbell-Ewald, the Court held that a plaintiff is entitled to decline an offer of judgment on individual claims in order to pursue relief on behalf of a putative class.  To hold otherwise, the Court reasoned, would allow defendants to use the mootness doctrine to “pick off” named plaintiffs and deny them a fair opportunity to pursue class-wide relief.Second, the Court held that even if Allstate could moot an entire class action by mooting a plaintiff’s individual claims, here plaintiff’s claims were not mooted because under Campbell-Ewald, plaintiff must actually receive all the relief to which he is entitled.  Since Allstate’s release of the $20,000 was contingent on the district court’s dismissal, plaintiff had not yet received funds, and therefore had not received his entitled-to relief.Takeaway Chen is one of several post-Campbell-Ewald cases rejecting defendants’ attempts to moot a putative class action by mooting the named plaintiff’s individual claims.  See, e.g., Weitzner v. Sanofi Pasteur, Inc., No. 14-3423, 2016 WL 1359220 (3d Cir. Apr. 6, 2016); Bais Yaakov of Spring Valley v. Graduation Source, LLC, No. 14-cv-3232 (NSR), 2016 WL 872914, at *1 (S.D.N.Y. Mar. 7, 2016); Brady v. Basic Research, L.L.C., 312 F.R.D. 304, 306 (E.D.N.Y. 2016).  (See our Brady post <a href="http://classdismissed.mofo.com/false-advertising-claims/new-york-federal-court-rejects-first-attempt-since-campbell-ewald-to-moot-class-plaintiffs-claims/">here</a>).However, another judge in the Southern District of New York saw things differently in Leyse v. Lifetime Entertainment Services, LLC, No. 13 Civ. 574 (AKH), 2016 WL 1253607 (S.D.N.Y. Mar. 17, 2016), holding that a defendant’s payment of plaintiff’s individual claims plus court costs required entry of judgment.  (For more information on Leyse, see our <a href="http://classdismissed.mofo.com/tcpa/point-counterpoint-new-york-federal-court-holds-payment-of-plaintiffs-claim-ends-lawsuit-under-campbell-ewald/">post</a>).

No Method to the Mootness: Ninth Circuit Rejects Allstate’s Effort to Moot Class Action Claims

On April 12, 2016, in Chen, et al. v. Allstate Insurance Co., No. 13-16816, the Ninth Circuit considered whether an unaccepted offer of judgment and tender of p

No Method to the Mootness: Ninth Circuit Rejects Allstate’s Effort to Moot Class Action Claims

In response to a provision in the Bipartisan Budget Act of 2015 (Pub. L. No. 114-74), the Federal Communications Commission (FCC or the “Commission”) has promulgated <a href="https://apps.fcc.gov/edocs_public/attachmatch/FCC-16-57A1.pdf" target="_blank">a notice of proposed rulemaking</a> (NPRM) regarding the new exemption in the Telephone Consumer Protection Act (TCPA) for calls made “to collect a debt owed to or guaranteed by the United States.”  47 U.S. Code § 227(b)(1)(A)(iii), (b)(1)(B). The proposed language of the rule would track the statutory language.  The FCC’s analysis in the NPRM, however, suggests that the Commission intends to interpret this exception narrowly, and will impose significant restrictions on calls covered by these provisions. In particular:<ul><li>The FCC suggests that a call “solely to collect a debt” means “only those calls made to obtain payment after the borrower is delinquent on a payment.”  (¶ 8).</li><li>While the FCC proposes that debt servicing calls would be covered, and would include calls made by the creditor and entities acting on behalf of the creditor, the NPRM also proposes restrictions on covered calls—meaning that coverage under this exemption could be a double-edged sword.  (¶¶ 9, 10)  And, only creditors and those calling on their behalf could make calls based on this exemption.  (¶ 15)</li><li>Permissible calls would be “only to the person or persons obligated to pay the debt because it appears impossible that calls to non-debtors by their nature would directly result in collection from the debtor.”  (¶ 13)  Furthermore, the FCC proposes to import the one-call “safe harbor” for a reassigned number from the FCC’s 2015 Omnibus Declaratory Ruling.  In other words, if a wireless number that a debtor provides to a creditor is reassigned, then calls to that number are not exempt, and after one such call the caller will be deemed to have constructive knowledge that “consent” to call that number has been withdrawn.  (¶ 14)</li><li>The FCC proposes to limit the number of covered (i.e., exempt) calls to three initiated calls to a wireless number per month—including calls that may not be answered by a person.  The NPRM reasons that three calls per month “affords callers an opportunity to obtain the debtor’s consent to make additional calls beyond” any adopted limit.  (¶ 18) This would apply to robocalls to wireless numbers, including calls that attempt to connect the called debtor to a live agent.  But the FCC also suggests that it may extend this restriction to calls to residential lines “even though such calls would not have required prior express consent even before” the TCPA was amended.  (¶ 23)</li><li>The FCC also seeks comment on “the maximum duration of a voice call,” whether there should be a limit on the length of covered text messages (¶ 18), and whether there should be a limit on the hours during which such a call could be made (¶ 19).  The NPRM suggests that the limit could be governed by the local time at the called party’s location, which could create a compliance challenge given that individuals may take their cell phones to different time zones.</li><li>The NPRM also proposes that “consumers should have a right to stop [covered calls] at any point the consumer wishes.”  (¶ 20)</li></ul>Commissioner O’Reilly issued a strong partial dissent (approving solely to initiate the rulemaking required by Congress).  He noted in particular that:<ul><li>The proposed limit on the number of calls initiated per month would be inconsistent with other federal requirements to make calls in connection with a delinquency;</li><li>The one-call safe harbor for reassigned numbers is inconsistent with the statutory exemption from the consent requirement for covered calls; and</li><li>The FCC has inappropriately limited covered calls to those pertaining to delinquency or default, while the statute refers only to calls “to collect a debt.”</li></ul>Finally, both Commissioner O’Reilly and Commissioner Pai (who dissented on the ground that federal debt collectors should not be afforded special treatment) criticized the proposed rules because manually dialed calls from equipment that could function as an autodialer in the future might be considered autodialed calls.Comments on the NPRM are due on June 6, 2016.

FCC issues NPRM on TCPA Exemption for U.S. Government Debt

In response to a provision in the Bipartisan Budget Act of 2015 (Pub. L. No. 114-74), the Federal Communications Commission (FCC or the “Commission”) has promul

FCC issues NPRM on TCPA Exemption for U.S. Government Debt

A New York federal court has held that a defendant’s payment of the amount of plaintiff’s TCPA claim plus costs to the clerk of the court required entry of judgment for the plaintiff and ended the case.  Leyse v. Lifetime Entertainment Servs., LLC, Case No. 13-cv-574 (AKH) (S.D.N.Y. Mar. 17, 2016).  In Campbell-Ewald v. Gomez, __ S. Ct. __ (Jan. 20, 2016), the United States Supreme Court held that a defendant’s unaccepted offer of complete relief did not moot a class plaintiff’s claim or require dismissal of the action, but left open the issue whether actual payment of the claim could do so.  (See our client alert on Campbell-Ewald.)Earlier this year, another New York federal court, the first to consider the issue after Campbell-Ewald, held that a motion and letter seeking to deposit funds with the court in the full amount of plaintiff’s claim did not permit the defendant to moot plaintiff’s claims or defeat certification.  Brady v. Basic Research, L.L.C., Case No. 2:13-cv-7169 (SFJ) (E.D.N.Y. Feb. 3, 2016).  (See <a href="http://classdismissed.mofo.com/false-advertising-claims/new-york-federal-court-rejects-first-attempt-since-campbell-ewald-to-moot-class-plaintiffs-claims/">Brady blog post</a>.)  In Leyse, however, Judge Alvin K. Hellerstein held that “once the defendant has furnished full relief, there is no basis for the plaintiff to object to entry of judgment in its favor.”  Judge Hellerstein had previously denied the plaintiff’s motion for class certification and for reconsideration of that ruling.<a id="_ftnref1" href="#_ftn1" name="_ftnref1">[1]</a>  In Brady, the court had not yet ruled on class certification.In addition to paying the amount of Leyse’s claim plus costs estimated by the court, defendant Lifetime also agreed to an injunction prohibiting it from calling the plaintiff at the phone number previously called in alleged violation of the TCPA.  The court reasoned that a “plaintiff has no entitlement to an admission of liability, as a party can always incur a default judgment and liability without any factual findings.”  The court concluded that “if the defendant has thrown in the towel there is nothing left for the district court to do except enter judgment.  The absence of a controversy in the constitutional sense precludes the court from issuing an opinion on whether the defendant actually violated the law.”  Leyse thus provides a mechanism for a defendant that has defeated class certification to avoid proceeding to trial on a plaintiff’s individual claim. <a id="_ftnref2" href="#_ftn2" name="_ftnref2">[2]</a> <a id="_ftn1" href="#_ftnref1" name="_ftn1">[1]</a> The court stated in a footnote that entry of judgment for plaintiff would not necessarily preclude plaintiff’s subsequent appeal of the class certification ruling.  The court noted that under the Supreme Court’s ruling in Deposit Guar. Nat. Bank v. Roper, 445 U.S. 326, 336 (1980), the denial of class certification is a “procedural ruling, collateral to the merits of a litigation, that is appealable after the entry of final judgment.”<a id="_ftn2" href="#_ftnref2" name="_ftn2">[2]</a> McCauley v. Trans Union, L.L.C., 402 F.3d 340, 342 (2d Cir. 2005), quoting Chathas v. Local 134 IBEW, 233 F.3d 508, 512 (7th Cir. 2000).

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Point Counterpoint: New York Federal Court Holds Payment of Plaintiff’s Claim Ends Lawsuit Under Campbell-Ewald

A New York federal court has held that a defendant’s payment of the amount of plaintiff’s TCPA claim plus costs to the clerk of the court required entry of judg

Point Counterpoint: New York Federal Court Holds Payment of Plaintiff’s Claim Ends Lawsuit Under Campbell-Ewald

The Fifth Circuit recently reversed partial summary judgment in favor of the plaintiff in a TCPA claim, finding that summary judgment instead should have been granted to the defendant on four of the seven calls at issue. Ybarra v. Dish Network, L.L.C., No. 14-11316, 2015 WL 6159755 (5th Cir. Oct. 20, 2015). The plaintiff argued that the defendant violated the TCPA by making a call with a prerecorded voice. But, because the plaintiff did not answer the four calls at issue, no prerecorded voice was ever delivered or used. The Fifth Circuit held that the prerecorded voice must speak during the call to trigger liability. The court therefore reversed and remanded, directing the district court to enter partial summary judgment in favor of defendant.

Do NOT Leave a Message at the Tone

The Fifth Circuit recently reversed partial summary judgment in favor of the plaintiff in a TCPA claim, finding that summary judgment instead should have been g

Do NOT Leave a Message at the Tone

After noting at oral argument that the plaintiff’s TCPA claim was one of the “silliest” the court had ever encountered, the Ninth Circuit issued an order affirming dismissal of the plaintiff’s suit. Roberts v. Paypal, Inc., No. 13-16304, 2015 WL 6524840 (9th Cir. Oct. 29, 2015). The plaintiff claimed that PayPal sent him a welcoming text message without his consent, thereby violating the TCPA. The panel disagreed, finding that under the FCC’s 1992 interpretation of “prior express consent” under the TCPA, in providing PayPal with his cellphone number, the plaintiff expressly consented to receive calls from PayPal. The court also rejected the plaintiff’s argument that the FCC’s interpretation of “prior express consent” was limited to “normal business communications,” but noted that, even if it adopted this position, nothing suggested that PayPal’s message was anything but “normal.” The panel accordingly affirmed the district court’s grant of summary judgment in favor of PayPal.

Dead on Arrival

After noting at oral argument that the plaintiff’s TCPA claim was one of the “silliest” the court had ever encountered, the Ninth Circuit issued an order affirm

Dead on Arrival

The Third Circuit has become the first appellate court to endorse the FCC’s broad definition of “autodialer” under the TCPA. In a July 10 <a href="https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-72A1.pdf">declaratory ruling</a>, the FCC defined “autodialer” as any device with the capacity to store or produce randomly or sequentially generated numbers, even if the device isn’t currently used for that purpose. Relying on the FCC’s decision, the Third Circuit reversed the district court’s order dismissing the plaintiff’s complaint, remanding to determine whether the defendant’s technology constituted an “autodialer” under the FCC’s definition. Dominguez v. Yahoo, Inc., No. 14-1751, 2015 WL 6405811 (3d Cir. Oct. 23, 2015).