Consumer Class Actions

Consumer Financial Services Arbitration: Another Perspective

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Much has been said and written about Congress’ rejection of the CFPB proposal to ban class action waivers in arbitration agreements between consumers and financial services companies. One of the most frequent statements I have heard from some politicians in the media is that Congress has voted to ban class actions against banks. As is true with many political statements from both sides of the aisle, this one is only partially true. Here are a few additional (but not alternative) facts to place Congress’ action in context.

  • The CFPB rule, and not Congress’ rejection of it, would have represented a change in the law. Since the Supreme Court’s 2011 decision in AT&T Mobility v. Concepcion, class action waivers have generally been enforceable in contracts for consumer financial services. The CFPB proposed rule was based on the agency’s authority granted under the Dodd-Frank Act. However, Congress and the President had the final say regarding whether the rule would take effect, and

When you get what you pay for: the First Circuit examines the injury requirement under Massachusetts chapter 93A.

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On July 26th, the First Circuit issued rulings in putative consumer class actions brought by the same attorney against two national department store chains, challenging their allegedly deceptive use of comparative pricing on their in-store price tags.  In the first case, brought against Nordstrom, the court engaged in a careful review of a series of Massachusetts decisions interpreting the state’s consumer protection act, Massachusetts General Laws chapter 93A.  In the second case, against Kohl’s, the court continued the analysis to fill a procedural gap left open in the first case.  In the end, the court reinforced the Massachusetts cases holding that proof of an unfair or deceptive act or practice, without more, is not sufficient to support a claim under the Massachusetts statute.  Rather, plaintiffs must also prove that the violation caused them harm.  Because plaintiffs in these cases did not allege that products themselves were other than represented, but only that they subjectively believed that they were getting a good bargain, the court held that they failed

Ninth Circuit Widens Circuit Split on Ascertainability in Briseno v. ConAgra Foods, Inc.

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On this blog, we have previously written about the growing split among the federal circuits concerning courts’ approaches to ascertainability. The Third Circuit, in a string of cases within the last five years, adopted a test requiring that class members must be identifiable without extensive and individualized fact-finding or “mini-trials,” and a plaintiff must present evidentiary support to demonstrate that a model it proposes to satisfy Rule 23’s requirements will be effective.  The Eleventh Circuit in Karhu v. Vital Pharmaceutical, Inc. similarly found that a plaintiff must establish an administratively feasible method by which class members can be identified.

In Mullins v. Direct Digital, LLC, the Seventh Circuit rejected the Third Circuit’s approach, finding that the Third Circuit’s test was a “heightened” requirement above and beyond Rule 23’s requirements.  The Seventh Circuit adopted a more lenient approach and looks only at whether a class can be ascertained by objective criteria, not whether there’s an administratively feasible way to identify

Bellerman v. Fitchburg Gas & Electric Light Co. – Lack of Injury in Massachusetts Consumer Claims

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In 2014, we posted about the Massachusetts Supreme Judicial Court’s decision in Bellermann v. Fitchburg Gas & Electric Light Co.  In that case, plaintiffs sought relief under the Massachusetts consumer protection statute, G.L. c. 93A, because of the defendant utility’s alleged failure properly to prepare and plan for a major winter storm, and its allegedly deceptive communications made to consumers before and during the storm.  The SJC affirmed the trial court’s denial of class certification because plaintiffs could not establish that defendant’s conduct caused similar injury to consumers on a class-wide basis.

On remand, plaintiffs filed a renewed motion for class certification relying on a different liability theory – that they had suffered economic injury by overpaying for a level of emergency preparedness, required by Department of Public Utility regulations, which the defendant allegedly failed to provide.  This time a different trial court judge certified two classes under this diminution-in-value theory (a business customers class and a residential customers class), but

District of Massachusetts Grapples with Campbell-Ewald’s Unanswered Questions

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Chief Judge Saris and Judge Sorokin of the District of Massachusetts recently tackled questions left unanswered by the Supreme Court’s opinion earlier this year in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) (see Don Frederico’s prior post for a full discussion of Campbell-Ewald).

In South Orange Chiropractic Center, LLC v. Cayan LLC, 2016 WL 1441791, No. 15-13069 (D. Mass. April 12, 2016), the defendant, seeking to slip through the door left ajar by Campbell-Ewald, sought to deposit $7,500 with the court, providing the named plaintiff in a putative Telephone Consumer Protection Act (TCPA) class action with full relief. In addition, the defendant agreed to have judgment entered against it for allegedly sending plaintiff an unsolicited fax in violation of the TCPA, to pay for costs, to be enjoined from future conduct as to plaintiff or others, and to preserve evidence, and presented the plaintiff with a stand-alone settlement agreement,

Spokeo, Inc. v. Robins and the No-Injury Class Action

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Class action practitioners have been closely watching Spokeo, Inc. v. Robins, a case before the Supreme Court on appeal from the Ninth Circuit.  Spokeo presented the Court with the opportunity to decide whether a plaintiff may maintain a class action absent any injury other than the violation of a statutory right.

Consumer Financial Protection Bureau Publishes Proposed Rule Precluding Class Action Waivers in Arbitration Clauses

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The CFPB today released a proposed rule that would ban consumer financial services providers such as banks, credit card issuers, and small-dollar lenders from using mandatory arbitration clauses to prohibit consumers from filing or joining class actions against them. Please click here for further analysis and potential impacts of the proposed rule.

First Circuit Denies Review in Building Products Case

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On October 2, 2015, we posted about the District of Massachusetts’ denial of class certification in a case in which we represent a building products company that sold allegedly defective decking.  We’re pleased to report that yesterday the First Circuit denied Plaintiffs’ petition for review of the class certification denial under Rule 23(f). 

A Byrd in the Hand

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Recently, I had the privilege of moderating a panel in Boston discussing hot topics in class actions.  We had a terrific group of panelists, including three (besides myself) who represent defendants in class actions and one who represents plaintiffs.  This imbalance was attributable to the nature of the organization sponsoring the program as a business-oriented legal foundation.