Litigation

With Massachusetts’ Consumer Data Privacy Bill Still Under Consideration, Student Data Privacy Class Action Fails In Federal Court

As we have recently reported, the Massachusetts legislature is currently considering a comprehensive data privacy law that would create a private right of action for consumers who allege a violation of any provision of the proposed law. Last week, a Massachusetts federal court dismissed a data privacy class action, concluding that the plaintiffs failed to state an actionable claim under existing law. The decision draws into sharp relief the potential impact of the proposed legislation. The case demonstrates how the data privacy bill, if enacted, could open a new avenue for individuals to sustain private actions based on alleged data privacy violations that courts have previously found do not entitle plaintiffs to relief.

The Mount Ida College Plaintiffs Alleged Data Privacy Violations but Could Not Sustain their Class Claims

In this recent and closely watched case, Squeri v. Mount Ida College, brought on behalf of a putative class of former and

Yan v. ReWalk Robotics, Ltd.: No Substitute for Standing in the District of Massachusetts

On May 16, 2019, the District of Massachusetts denied a lead plaintiff’s motion to amend a complaint that sought to overcome standing deficiencies of the original class representative by adding a new named plaintiff. The Court dismissed the putative class action without prejudice, holding that if a class action has only one representative, and that party does not have standing, the Court lacks jurisdiction over the case and cannot permit the lead plaintiff substitution.

In Yan v. ReWalk Robotics, Ltd., lead plaintiff Wang Yan brought a putative class action for alleged violations of the Securities Act of 1933 and the Exchange Act of 1934 in connection with the company’s 2014 initial public offering. In a class action complaint filed in 2017, Yan claimed that ReWalk concealed material information in its IPO documents concerning a failure to comply with FDA regulations and continued to make materially false statements after the IPO. In August 2018, the Court granted the

Lamps Plus, Inc. v. Varela: Class Arbitration Must Be Expressly Authorized

Class arbitration came back before the Supreme Court this term in Lamps Plus, Inc. v. Varela.  Today, the Supreme Court issued a 5-4 decision in Lamps Plus, holding that, under the Federal Arbitration Act, “courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.”  Rather, class arbitration must be expressly authorized by contract.

The facts of Lamps Plus are straightforward.  An employee had signed an arbitration agreement upon being hired to work for Lamps Plus.  After a data breach, the employee sued Lamps Plus in federal court.  Lamps Plus filed a motion to compel individual arbitration, and the district court granted the motion to compel but authorized arbitration on a class basis.  The Ninth Circuit affirmed, reasoning that the arbitration provision was ambiguous as to class arbitration and must be construed against the employer under California’s contra proferentem rule that ambiguities in a contract must be

Questions Regarding Cy Pres Settlements Remain after Frank v. Gaos

Today, in a case that was being watched closely for its potential ramifications for class settlements, the Supreme Court opted not to address the merits of the cy pres issues that were presented to it.  Frank v. Gaos involved a settlement that would have distributed millions of dollars to cy pres recipients and class counsel, but no money to class members.  Objectors complained that the settlement did not comply with the requirement that class settlements be “fair, reasonable and adequate,” and the Supreme Court granted certiorari to resolve that issue.  It ultimately did not.

Instead, the Supreme Court, in a per curiam decision, vacated and remanded for the lower courts to address whether the named plaintiff had Article III standing in light of Spokeo, Inc. v. Robins.  After the district court rejected the argument the plaintiff lacked injury and thus standing to pursue its claim that Google violated federal law by

Supreme Court Unanimously Rejects Equitable Tolling of Rule 23(f)’s Time Limit to Petition for Interlocutory Appeal

Yesterday, the Supreme Court in Nutraceutical Corp. v. Lambert unanimously held that Rule 23(f) is not subject to equitable tolling. After the District Court for the Central District of California decertified a class of consumers who alleged that Nutraceutical’s marketing of a dietary supplement violated California consumer-protection law, plaintiff Lambert filed a motion for reconsideration, which the court subsequently denied. Fourteen days later, Lambert petitioned the Ninth Circuit Court of Appeals for permission to appeal the decertification order under Rule 23(f). Nutraceutical opposed Lambert’s petition, arguing that it was untimely because more than four months had passed since the court’s decertification order. The Court of Appeals, however, deemed the petition timely and accepted the appeal, stating that the Rule 23(f) fourteen-day deadline should be equitably tolled under the circumstances as the time limit is “non-jurisdictional, and that equitable remedies softening the deadline are therefore generally available,” and Lambert had acted diligently in moving for reconsideration and subsequently filing his petition within fourteen days after

In re Celexa and Lexapro – The First Circuit Weighs in on China Agritech and American Pipe Tolling

The Supreme Court meant what it said in China Agritech, Inc. v. Resh – that is the primary lesson from the First Circuit’s January 30th decision in In re Celexa and Lexapro Marketing and Sales Practices Litigation.  As my partner, Don Frederico, explained in a blog post last year, the Supreme Court observed in China Agritech that its prior ruling in American Pipe & Constr. Co. v. Utah “tolls the statute of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims if the class fails.”  China Agritech went on to hold that “American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.”  The First Circuit, in In re Celexa and Lexapro, rejected a plaintiff’s attempt to read China Agritech narrowly.

Amendments to Rule 23 Now in Full Swing

On December 1, 2018, the amendments to Fed. R. Civ. P. 23 took effect, principally altering portions of the Rule governing class action notice, settlement, and appeals. Although the amendments were approved earlier in 2018 by the United States Supreme Court, they had been in the works for some time.

In 2014, a subcommittee of the Advisory Committee on Civil Rules met with class action attorneys from both the plaintiffs’ and defense bar all across the country in a series of meetings, seeking input on amendments to Rule 23. One such meeting was held in October 2014 during the ABA’s National Institute on Class Actions, a two-day conference well-attended by counsel in private practice, in-house counsel, academics, and reporters from class action news services. Those of us in attendance had the opportunity to offer the subcommittee suggestions on how to amend the Rule to better address problems we encounter in practice, such as cy pres awards, professional objectors, and issue classes. Fast-forward four years later, and

In re Asacol Antitrust Litigation: Article III Standing in Multi-State Class Actions

In his October 17th post, Josh Dunlap describes in detail the First Circuit’s landmark ruling in In re Asacol Antitrust Litigation concerning classes that include uninjured members. As Josh points out, although the district court had referred to ascertainability in its decision certifying the class, the First Circuit opinion reversing class certification did not, and for good reason. The case did not raise an ascertainability issue at all, but rather an issue of an overly broad class definition that encompassed significant numbers of uninjured class members (the court estimated 10 percent of potential class members had not been harmed because they would have purchased the branded drug even had the generic been allowed on the market). The ill-fated class was defined to include all purchasers of the defendant’s product, not just all such persons who would have purchased the generic alternative. Presumably, all purchasers of the drug could have been identified through prescription records, but plaintiffs failed to show that it

In re Asacol Antitrust Litigation – An Antidote to In re Nexium and “Ascertainability-by-Affidavit”

When last I wrote about ascertainability, I noted that a debate over the propriety of “ascertainability-by-affidavit” continued to percolate within the First Circuit even as lower courts relied on In re Nexium Antitrust Litigation to certify classes containing uninjured class members.  Specifically, I noted a couple of developments.  First, in In re Asacol Antitrust Litigation, Judge Casper of the District of Massachusetts had rejected defendants’ ascertainability arguments and certified a class containing uninjured individuals, relying on In re Nexium for the proposition that uninjured individuals could be identified and excluded after certification via submission of affidavits.  Second, I also observed that Judge Kayatta had continued, via his dissent from denial of a Rule 23(f) petition in In re Dial Complete Marketing and Sales Practices Litigation, to express concern about the “casual reliance on ‘say-so’ affidavits” apparently sanctioned by In re Nexium.  In his words, the First Circuit