Gibbons Law Alert

Gibbons Law Alert

Author: Michael R. McDonald

Sixth Circuit Vacates Certification of a Sprawling Multistate Class of GM Vehicle Owners Alleging Transmission Defects

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Posted in Class Action

On July 16, 2025

In Speerly v. GM, LLC , the Sixth Circuit en banc reversed a district court’s order certifying a class and multiple subclasses to assert various state law claims alleging defects in GM’s Hydra-Matic 8-Speed Transmission in vehicle models sold between 2015 and 2019 — in all, 26 state-wide subclasses with a total of 59 state-law claims on behalf of roughly 800,000 individual car buyers. The class had identified two problems with the transmission: (i) the transmission fluid absorbed moisture, changing its viscosity and causing gear shift slippage; and (ii) the transmission control module caused vehicles to lunge forward or “shudder.” Before addressing the substantive elements of each cause of action, the court explained that the district court must “answer merits questions that bear on Rule 23’s demands.” The Rule 23 analysis “will inevitably address issues that overlap with the merits inquiry” because the “element-by-element, claim-by-claim inquiry” required for the commonality and predominance inquiry “implicates the merits of each claim.” Therefore, the Panel noted that the “district court, as a result, must not defer merits questions bearing on commonality and predominance until summary judgment.” Regarding the commonality requirement, the Sixth Circuit explained that under Wal-Mart Stores, Inc. v. Dukes, a common question must resolve an issue that is “central” to the validity of each claim, and...

“Tester” Beware: California Wiretap and Pen Register Claims Challenging Website’s Third-Party Tracking Software Doomed by No Expectation of Privacy

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Posted in Class Action

On April 30, 2025

In Rodriguez v. Autotrader.com, Inc., the District Court for the Central District of California dismissed, with prejudice, a class action lawsuit claiming that Autotrader.com violated the California Invasion of Privacy Act (CIPA) by allowing third-party tracking software to be installed on a website visitor’s browser before the visitor had any opportunity to consent to or decline the website’s privacy policy. The plaintiff’s complaint alleged that she was a “tester” – i.e., someone who seeks out legal violations and files lawsuits to ensure compliance – who visited the Autotrader.com website and made a search query purportedly containing confidential and private information. The complaint alleged that once a query is entered in the search bar, it is routed to unknown third parties and shared with other third parties like Google, Facebook, Pinterest, and various other advertising services. The complaint asserted that the use of the tracking technology violated California’s wiretapping and eavesdropping statute, CIPA § 631(a), as well as CIPA § 638.51, which prohibits the use of pen registers and trace devices. In January 2025, the district court dismissed the plaintiff’s CIPA § 631 claims without prejudice for lack of standing because the complaint merely alleged that the plaintiff made a search query containing confidential and private information but “fail[ed] to describe the contents of her query.”...

Consent to Website’s Terms of Use Defeats Website Pixel Tracking Class Action Claims under Federal Wiretap Act, VPPA, and CIPA

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Posted in Class Action

On April 23, 2025

In Lakes v. Ubisoft, Inc., the District Court for the Northern District of California dismissed with prejudice a class action lawsuit claiming that Ubisoft, Inc., a video game distribution company, violated the Federal Wiretap Act, Video Privacy Protection Act (VPPA), and California Invasion of Privacy Act (CIPA) by placing a Meta Pixel tracking tool on its website that allegedly intercepted users’ communications and transmitted their information, including video request data, to Meta (Facebook). The complaint sought a nationwide class and California subclass of users of the website that had their personally identifiable information (PII), search terms, and detailed webpage information improperly intercepted by and disclosed to Facebook through the use of the Pixel. Ubisoft moved to dismiss all claims on the ground, among others, that all of the plaintiffs’ claims failed because an essential element of each claim is lack of consent, despite the fact that the plaintiffs repeatedly consented to, and were informed of, the use of cookies and pixels on the website. First, the plaintiffs had to consent to the use of cookies prior to using the website. Users were presented with a cookie banner when they first arrived at the website, which notified them that cookies would be used and gave them the option to change cookie consent preferences. Second, users had...

Strike Three – Lack of Scienter Dooms CIPA Class Action Claiming Website Owner Aided and Abetted Chat Bot Software Provider’s Alleged Eavesdropping

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Posted in Class Action

On March 28, 2025

In Valenzuela v. The Kroger Co., the District Court for the Central District of California granted, for the third and last time, defendant’s motion to dismiss a class action lawsuit claiming that The Kroger Co. violated  section 631(a) of the California Invasion of Privacy Act (CIPA) by allowing third-party software (provided by Emplifi) to be embedded on its website to record consumers’ communications with the website’s chat function. The only issue before the court was whether the amended complaint plausibly alleged liability under prong four of CIPA 631(a)—“that Kroger aided and abetted Emplifi’s eavesdropping on Kroger’s website users’ chats.” In its previous ruling, the court held that merely using embedded software to archive communications, like with a tape recorder, would not give rise to a statutory violation.  Instead, to state a claim under prong four of CIPA 631(a) there must be plausible allegations explaining how Kroger knew that Emplifi engaged in conduct constituting a breach of duty, e.g. by sharing users’ data with third parties, or how Kroger itself engaged in conduct that constituted a breach of duty. Because prong four of CIPA 631(a) does not contain an explicit scienter requirement, the court applied California common law of aiding and abetting, under which aiding and abetting liability for an intentional tort can be imposed only...

CIPA Litigation and the “Technological Capability” to Violate California’s Privacy Laws

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Posted in Class Action

On March 7, 2025

In Ambriz v. Google, LLC,  a court in the Northern District of California refused to grant Google’s motion to dismiss the plaintiffs’ claims under Section 631(a) of the California Invasion of Privacy Act (CIPA) for (i) “intentional wiretapping,” and (ii) “willfully attempting to learn the contents or meaning of a communication in transit.”  The lawsuit challenges Google’s AI-powered product, Google Cloud Contact Center AI (“GCCCAI”), which is used to support the customer service centers of other businesses by providing a virtual agent with whom callers can interact. The plaintiffs alleged that they placed customer service calls to businesses that use the GCCCAI service – specifically, Verizon, Hulu, GoDaddy, and Home Depot – and spoke with a “virtual agent” and human representative but did not know that Google would be listening in on and transcribing the call. Nor did the plaintiffs consent to Google’s alleged eavesdropping. Google moved to dismiss the CIPA claims on the ground, among others, that it simply provides a software tool to its business clients and was not “an unauthorized third-party listener to the communications between the named Plaintiffs and the customer service centers they called.” In denying Google’s motion to dismiss, the court began its analysis by explaining the split that has emerged in cases interpreting CIPA 631(a): Some courts require...

Fourth Circuit Rockets Certified Class Due to Lack of Article III Standing

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Posted in Class Action

On February 7, 2025

In a 2-1 recent published decision, the Fourth Circuit decertified a class, holding that every class member must be concretely harmed by an alleged statutory violation under the Supreme Court’s seminal holding on Article III standing in TransUnion v. Ramirez. Alig v. Rocket Mortgage, LLC involved statutory and common law claims under West Virginia law by a proposed class of consumers against Quicken Loans, Inc. (now Rocket Mortgage, LLC), alleging that, in refinancing their home-mortgage loans, the consumers paid for “independent appraisals” that were not “independent” at all. In fact, the defendants provided to the appraisers the homeowners’ own estimates of their homes’ values, which they had provided in their loan application. The plaintiffs claimed that the inclusion of the borrowers’ own estimates inflated the appraisals and so compromised the integrity of the appraisal process as to render their appraisals unreliable and worthless. The District Court certified a class of “‘[a]ll West Virginia citizens who refinanced mortgage loans with Quicken, and for whom Quicken obtained appraisals through an appraisal request form that included an estimate of value of the subject property,’” which amounted to 2,769 loans. The court then granted summary judgment to the plaintiffs and class members and awarded them more than $10.6 million in statutory damages, among other relief. On the first appeal, the...

Consumer Fraud Class Action Dismissed With Prejudice: Law Enforcement Tows Are Not Covered by the New Jersey Predatory Towing Prevention Act

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Posted in Class Action Defense

On June 21, 2021

On June 14, 2021, Judge Thomas J. Walsh of the Superior Court of New Jersey put an end to the long-running putative class action lawsuit in Kiley v. Tumino’s Towing, which sought to exploit regulations promulgated under the Predatory Towing Prevention Act (PTPA) by the Director of the Division of Consumer Affairs (DCA). The action was removed to federal court under the Class Action Fairness Act, where the magistrate judge initially denied a motion to remand and permitted jurisdictional discovery, but the district court judge later remanded back to state court. Finally addressing the merits, the Superior Court granted the defendants’ motion to dismiss the complaint, with prejudice, agreeing with Tumino’s Towing that the PTPA was not applicable to the towing services requested by law enforcement and performed in accordance with a duly-authorized municipal ordinance. As such, the plaintiff’s sole remaining cause of action for alleged violation of the Consumer Fraud Act (CFA) could not stand. In Kiley, the complaint alleged that the plaintiff’s vehicle was towed by Tumino’s Towing, at the request of the Ridgefield Park Police Department, because his vehicle was illegally parked during a snow emergency. After paying his parking ticket at police headquarters, the plaintiff was given a vehicle release authorization, which he brought to Tumino’s Towing to obtain the release...

Federal Preemption of ‘Structure/Function’ Claims on Dietary Supplements

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Posted in Class Action Defense

On December 14, 2020

Congress amended the Federal Food, Drug, and Cosmetic Act (FDCA) with the Nutrition Labeling and Education Act (NLEA) in 1990 and, in 1994, with the Dietary Supplement Health and Education Act (DSHEA), which provided the Food and Drug Administration (FDA) with regulatory authority over dietary supplements and specifically established “standards with respect to dietary supplements.” Together, the NLEA and DSHEA established “a new category of food products—specifically, dietary supplements—that have unique safety, labeling, manufacturing, and other related standards.” Kroessler v. CVS Health Corp., 977 F.3d 803, 808 (9th Cir. 2020). With Congress finding consumers “should be empowered to make choices” about potential benefits of dietary supplements, DSHEA implemented major shifts in dietary supplement regulation, including exempting “dietary supplements” from FDA drug approval and FDA food additive approval, 21 U.S.C. §321(g)(1), and expressly permitting dietary supplement labels to make “structure/function claims.” 21 U.S.C. §343(r)(6)(A). By definition, a structure/function claim “describes the role of a nutrient or dietary ingredient intended to affect the structure or function in humans [or] characterizes the documented mechanism by which a nutrient or dietary ingredient acts to maintain such structure or function.” Id. at §343(r)(6). Federal law allows such label claims, provided: (1) the manufacturer “has substantiation that such statement is truthful and not misleading”; (2) the label contains a prominent disclaimer that the statement...

Eleventh Circuit Eliminates Incentive Awards for Named Plaintiffs in Class Action Settlements

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Posted in Class Action Defense

On October 19, 2020

The Eleventh Circuit Court of Appeals recently upended what has become common practice in class action settlements by ruling that “incentive” awards to named plaintiffs are unlawful. In Johnson v. NPAS Solutions, LLC, the plaintiff filed a class action lawsuit under the Telephone Consumer Protection Act (TCPA) alleging that the defendant used an automatic telephone dialing system to call cell phones without the proper consent. Less than eight months after the complaint was filed, the parties jointly filed a notice of settlement for an award of $1,432,000. The District Court preliminary approved the settlement and certified the class for settlement purposes. In addition, that order permitted the plaintiff to petition the court to receive an amount not to exceed $6,000 “as acknowledgement of this role in prosecuting this case on behalf of class members.” The court also set a date for class members to opt out of the class settlement and a date three weeks later for class counsel to submit their petition for attorneys’ fees and costs. One person objected to the settlement on the grounds that (1) the objection deadline was set before the deadline for class counsel to file their attorneys’ fee petition, which she contended violated Federal Rule of Civil Procedure 23 and the Due Process Clause; (2) the amount of...

Supreme Court to Finally Decide Definition of Autodialer in TCPA Litigation

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Posted in Class Action Defense

On August 11, 2020

On July 9, 2020, the U.S. Supreme Court granted a long-pending petition for certiorari in Facebook Inc. v. Duguid, Noah, et al. to address a hotly debated question in Telephone Consumer Protection Act (TCPA) litigation: “whether the definition of [automated telephone dialing system] encompasses any device that can ‘store’ and ‘automatically dial’ telephone numbers, even if the device does not ‘us[e] a random or sequential number generator.’” The grant of certiorari comes on the heels of the Court’s sweeping decision in Barr v. American Ass’n of Political Consultants, severing the government debt collection exception to the TCPA’s “autodialer” prohibition as a content-based restriction on free speech. The TCPA broadly prohibits most calls using any ATDS or autodialer, defined by statute as “equipment which has the capacity – (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Given the lack of clarity in the statutory language, courts have grappled with whether “a random or sequential number generator” must be used to only “store” the numbers, or only to “produce” the numbers, or to “dial” the numbers after having “randomly or sequentially” generated or produced them. Further complicating court interpretations is the FCC’s interpretations stating that a dialing system known as a “predictive...

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