Gibbons Law Alert

Gibbons Law Alert

Author: Michael R. McDonald

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...

Third Circuit Holds Solicitations to Purchase Products and for Participation in Surveys can be Advertisements Under the TCPA

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Posted in Class Action Defense

On May 27, 2020

On May 15, 2020, the Third Circuit in Fishbein v. Olson Research Group, Inc. held “that solicitations to buy products, goods, or services can be advertisements under the TCPA and that solicitations for participation in . . . surveys in exchange for [money] by the sender were for services within the TCPA” making such solicitations advertisements that fall within the TCPA’s ambit. This opinion comes just one year after the Third Circuit issued its precedential decision in Mauthe v. Optum, Inc., holding that, in order for a fax to be considered an advertisement under the TCPA, “there must be a nexus between the fax and the purchasing decision of an ultimate purchaser whether the recipient of the fax or a third party,” meaning that “the fax must promote goods or services to be bought or sold, and it should have profit as an aim.” The consolidated appeal in Fishbein arose from two District Court decisions, Fishbein v. Olson Research Group, Inc., which involved a fax offering the recipient money in exchange for participating in a medical study, and Mauthe v. ITC, Inc., which involved faxes that offered the recipient money in exchange for completing surveys. After applying the Third Circuit’s precedential opinion in Optum, the District Courts dismissed the plaintiffs’ cases under Federal Rule of...

Second Circuit Affirms Expansive Reach of Preemption Provision of Food Drug and Cosmetic Act, Defeating False Labeling Class Action Premised Upon Consumer Protection Statutes

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Posted in Class Action Defense

On May 15, 2020

On May 11, 2020, the Second Circuit in Critcher v. L’Oréal USA, Inc., affirmed the dismissal of a putative class action, holding that the broad preemption clause of the Food Drug and Cosmetic Act (“FDCA”), 21 U.S.C. § 379s, barred plaintiffs from seeking to impose additional or different labeling requirements through their state consumer protection law claims, where Congress and the FDA already had provided for specific labeling requirements. In Critcher, purchasers of the defendant’s “liquid cosmetics” products claimed that while the net-quantities on the products’ labels were accurate, the product packaging was misleading because it omitted critical information that the creams could not be fully dispensed from the containers. Because they could not utilize the represented quantity of product, the plaintiffs claimed that they were deceived into buying more of the cosmetics than they could use. The District Court dismissed the complaint, concluding, among other things, that the claims were expressly preempted by the FDCA, and alternatively, preempted by the Federal Packaging Labeling Act (FPLA), 15 U.S.C. § 1451, et seq. On appeal, the plaintiffs argued that mere compliance with that net quantity disclosure requirement was not enough because it had the effect of making the packaging misleading in that a consumer would think the amount identified on the label is the amount accessible....

Does “100% Natural” Mean “No GMOs”? First Circuit Holds That Deceptive Label Claim Not Barred Where FDA Leaves Question Unresolved

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Posted in Class Action Defense

On May 12, 2020

On May 7, 2020, the First Circuit in Lee v. Conagra Brands, Inc., reversed the dismissal of a consumer fraud class action on the ground that the complaint plausibly stated that the product’s “100% Natural” statement may be deceptive to a consumer where the product contains genetically modified organisms (GMOs). In Lee, the plaintiff claimed that a “100% Natural” representation on the product label for Wesson Oil enticed her to buy the product because it indicated to her that the oil was GMO-free, when in fact it was not. She filed a class action alleging unfair or deceptive trade practices in violation of the Massachusetts consumer fraud law, Chapter 93A. The district court granted Conagra’s motion to dismiss, finding that the “100% Natural” language was “consistent with the FDA’s longstanding policy for the use of the term ‘natural’ on the labels of human food.” Additionally, the district court held that the FDA does not require a product to disclose on its label the use of GMOs. An act or practice violates Chapter 93A if it is “either unfair or deceptive.” The First Circuit’s decision addressed only the “deceptive” prong as plaintiff failed to raise, and thus waived, any argument that the label was “unfair.” Noting that its “analysis begins and ends with the allegations in...

Third Circuit Reverses Class Certification in In re Lamictal Direct Purchaser & Antitrust Consumer Litig.; Next up, In re Suboxone

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Posted in Class Action Defense

On May 6, 2020

On April 22, 2020, the Third Circuit in In re Lamictal Direct Purchaser & Antitrust Consumer Litig., reversed class certification, concluding that the evidence did not establish that common proofs could be used to prove class-wide injury. The circuit court faulted the district court’s predominance analysis for failing to resolve factual disputes, weigh competing expert evidence, and make a prediction as to how these issues would play out at trial. Central to the ruling was the issue of antitrust impact. After brand and generic pharmaceutical manufacturers of the prescription drug Lamictal, or generic lamotrigine, settled a patent litigation, direct purchasers of these drugs sued claiming the settlement violated the antitrust laws as an impermissible “reverse payment agreement.” The brand manufacturer was alleged to have “paid” the generic to stay out of the market by promising not to launch an authorized generic (“AG”). The direct payor plaintiffs argued that they paid more for the drugs than they would have otherwise based on the theory that, on average, the price of a generic is lower when there are two generics rather than just one. The Third Circuit granted the manufacturer-defendants’ petition for leave to appeal under Rule 23(f). First, the Third Circuit rejected direct purchasers’ argument that certification was controlled by a comment in Tyson Foods v....

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