Author Archives: David Stein

About David Stein

David Stein represents plaintiffs in class action litigation against the country’s largest corporations. He has served as court-appointed lead counsel in various consumer protection class action and multi-district proceedings, and his advocacy at both the trial and appellate levels has resulted in product recalls, permanent injunctive relief, and substantial remuneration for class members.

CD Cal. Court Declines to Compel “Browsewrap” Arbitration

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In April, we wrote about a California Court of Appeal opinion in which the court decline to compel arbitration based on a “browsewrap” agreement (i.e., where a website’s terms and conditions of use posted via a hyperlink, often at the bottom of the screen).  A recent opinion from U.S. District Judge Cormac J. Carney reflects a similar outcome based on federal precedent.

In Nghiem v. Dick’s Sporting Goods Inc., a TCPA case, defendant argued that the plaintiff was on notice of the arbitration agreement posted on its website.  The plaintiff responded that he had been unaware of the clause’s presence.

Citing the Ninth Circuit’s Nguyen v. Barnes & Noble, Inc., decision, Judge Carney began by noting that “courts enforce browsewrap agreements with ‘reluctance,’ and will generally only do so when a consumer has ‘actual or constructive knowledge of a website’s terms and conditions.”

Then, after rejecting the argument that plaintiff had actual knowledge of the contract, Judge Carney also found a lack of constructive knowledge.  The reasoning tracked closely to the Ninth Circuit’s Nguyen holding that “close proximity of the [arbitration clause] hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice”:

[Defendant] does not point to any “notice to users” of the Terms of Use, nor does it allege that users of [its] website were affirmatively required to accept the Terms of Use before completing certain functions.

… Read more

ND Cal. Finds Standing Allegations Sufficient Under Spokeo

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As we continue to keep an eye on post-Spokeo standing decisions, Judge Alsup of the Northern District of California recently issued a decision on the topic in a ruling granting class certification in a Truth In Lending Act (TILA) suit.

In McLaughlin v. Wells Fargo Bank, 2016 WL 3418337 (N.D. Cal. June 22, 2016), the plaintiff alleged that Wells Fargo had breached its TILA obligation to provide her with an accurate payoff statement regarding her home mortgage.

Defendant contested certification on adequacy grounds, arguing the plaintiff lacked standing under Spokeo to pursue her claims.

Judge Alsup rejected the argument:

The bank argues that the harm alleged by plaintiff borrower is “akin to the no-harm procedural violations” detailed by the Supreme Court in Spokeo.  Not so.  In Spokeo, the Court acknowledged that not all inaccuracies cause harm or present material risk of harm. As an example, the Court explained that “[i]t is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.” The inaccuracy here is in no way akin to an inaccurate zip code. The bank’s effort to downplay the harm done by an inaccurate payoff statement is unconvincing.
… Read more

SDNY Finds Standing Well-Pleaded Post-Spokeo

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As we’ve discussed previously, following the Supreme Court’s Spokeo decision, there is some question of how courts will analyze the “concrete” injury requirement for Article III standing.

In Boelter v. Hearst Communications, 2016 WL 3369541 (S.D.N.Y. June 17, 2016), the plaintiffs filed a class action complaint alleging violations of the Michigan Video Rental Privacy Act, among other things. Defendant sought dismissal, arguing that plaintiffs lacked standing because they had “not suffered an ‘injury-in-fact’—that is, that violation of the VRPA, as well as the other harms alleged in the amended complaint, do not constitute a particularized, concrete injury sufficient to confer standing.”

The court denied the motion to dismiss, based on allegations that

Defendant disclosed protected information about Plaintiffs in two ways: by selling it to third parties, and by providing it to “data mining” companies who then supplemented it with additional data to enhance the value of the information for Defendant.

By that conduct, the court reasoned, the defendant had

deprived Plaintiffs of their right to keep their information private, subjected them to unwanted solicitations and the risk of being victimized by “scammers,” and unjustly retained the economic benefit the value of that information conferred. Moreover, had Plaintiffs known that Defendant would disclose their information, they “would not have been willing to pay as much, if at all, for [their magazine] subscriptions.”

Accordingly, the court held plaintiffs had suffered a particularized, concrete injury-in-fact, sufficient to establish their standing to sue.  … Read more

W.D. Wash. Court Finds Spokeo “Concrete Injury” in TCPA Case

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Following the Supreme Court’s recent decision in Spokeo, practitioners are keeping a close eye on how courts will analyze the “concrete” injury requirement for Article III standing.

One recent opinion comes from Judge James L. Robart of the Western District of Washington, who held that a plaintiff in the TCPA case before him contained sufficient allegations of a concrete injury:

Here, the court is satisfied that Plaintiffs’ allegations demonstrate “concrete injury” as elucidated in Spokeo. In Spokeo, the “injury” Plaintiffs incurred was arguably merely procedural and thus non-concrete. In contrast, the TCPA and WADAD violations alleged here, if proven, required Plaintiffs to waste time answering or otherwise addressing widespread robocalls. … As Congress and Washington State’s legislature agreed, such an injury is sufficiently concrete to confer standing.

Booth v. Appstack, Inc., 2016 WL 3030256 (W.D. Wash. May 25, 2016).… Read more

District Court Conflict Over Campbell-Ewald “Pick Off” Attempts

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It has been about five months since the Supreme Court decided in Campbell-Ewald that unaccepted Rule 68 offers to proposed class representatives do not give rise to mootness.  As soon as that opinion issued, readers noted the question the decision expressly chose not to answer:

We need not, and do not, now decide whether the result would be different if a defendant deposits the full amount of the plaintiff ’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.

As two recent opinions demonstrate, courts continue to grapple with the Supreme Court’s unanswered question.

In the first, Demmler v. ACH Food Companies, Judge Sorokin of the District of Massachusetts held that the distinction between an unaccepted Rule 68 offer, on the one hand, and a check sent without any preconditions, on the other hand, “makes all the difference.”  The court concluded it could not offer “any more relief” than what defendant had already tendered, and concluded both the individual and proposed class claims were moot.

In stark contrast, the Campbell-Ewald litigation has returned to the district court, where the defendant promptly paid $10,000 (in two separate ways) to the plaintiff, in an attempt to squeeze through the “opening” left by the Supreme Court.  … Read more

Sixth Circuit Interprets Campbell-Ewald

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The Sixth Circuit Court of Appeals recently became the latest circuit court to interpret the Supreme Court’s Campbell-Ewald opinion.  Campbell-Ewald, as most practitioners know by now, dealt with a defendant’s attempt to moot a proposed class action by making a Rule 68 offer of judgment to the class representative.

In Wilson v. Gordon, the Sixth Circuit reexamined its “picking off” exception to the mootness doctrine.  The court recounted how, dating back to even before the Supreme Court’s 1980 decision in Deposit Guaranty National Bank v. Roper, it has recognized that “the concern that the defendant … might strategically seek to avoid” class certification by offering to pay off the named plaintiff justifies an exception to the mootness doctrine.

Since Roper, we have recognized this line of reasoning under analogous circumstances. In Carroll v. United Compucred Collections, Inc., we held that a class action was not moot even though the named plaintiffs had been tendered a Rule 68 offer of judgment because a motion for class certification was then pending.

Turning to Campbell-Ewald, the court noted that while the “Supreme Court recently had the opportunity to address the ‘picking off’ exception … [t]he Supreme Court … grounded its holding in ‘basic principles of contract law’ instead.”  The court nevertheless noted that

Though Campbell–Ewald sheds little light on the “picking off” exception, the Court did observe that allowing an unaccepted offer to moot a case would place defendants like Campbell–Ewald “in the driver’s seat,” enabling them to avoid significant class-based liability.  

… Read more

How District Courts Are Interpreting Campbell-Ewald

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Earlier this year, the Supreme Court issued its opinion in Campbell-Ewald v. Gomez, and held that an unaccepted Rule 68 offer does not moot putative class action claims. Almost immediately afterward, the lower courts began grappling with the question the SCOTUS expressly held open: whether a furnished payment (as opposed to a mere offer) could suffice to moot putative class claims.  Most recently, we wrote about the Ninth Circuit’s ruling in Chen v. Allstate, in which the Ninth Circuit held that a furnished payment did not have the effect of mooting the claims in that case.

How have the district courts ruled on the issue outside the Ninth Circuit?  Most recently, Judge Elaine E. Bucklo of the Northern District of Illinois opted to follow the Ninth Circuit’s ruling, holding:

I agree with the Ninth Circuit and the several district courts that have concluded that the Campbell–Ewald Court’s admonition that “a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted,” id. means that it is inappropriate to enter judgment on a named plaintiff’s individual claims, “over the plaintiff’s objection, before the plaintiff has had a fair opportunity to move for class certification.”

Fauley v.… Read more

11th Circuit: Comcast Doesn’t Require Classwide Proof of Damages

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Today, in Carriuolo v. General Motors Co., the Eleventh Circuit joined a group of circuits that includes at least the Second, Third, Seventh, and Ninth, holding that “individual damages calculations alone cannot defeat class certification.” The court rejected defendant’s argument that, after the Supreme Court’s Comcast v. Behrend decision, “damages must be capable of measurement on a classwide basis.”

The underlying case involves allegations that GM advertised that some of its vehicles had achieved safety ratings that they hadn’t really achieved.  Plaintiffs alleged this conduct violates Florida’s deceptive practices statute.  Based on that theory of liability, the Eleventh Circuit held that damages would be a common issue, since individual buying preferences would not alter the overall market price::

a manufacturer’s misrepresentation may allow it to command a price premium and to overcharge customers systematically. Even if an individual class member subjectively valued the vehicle equally with or without the accurate Monroney sticker, she could have suffered a loss in negotiating leverage if a vehicle with perfect safety ratings is worth more on the open market. … Obviously, prices are determined in substantial measure according to market demand. Thus, because a vehicle with three perfect safety ratings may be able to attract greater market demand than a vehicle with no safety ratings, the misleading sticker arguably was the direct cause of actual damages for the certified class even if members individually value safety ratings differently.

… Read more

Deadline for Filing a Song Bev Implied Warranty Claim?

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Dating back to 2009, when the California Court of Appeal decided Mexia v. Rinker Boat Co., there has been a debate about when Song Beverly implied warranty claims must be brought by. Within a year of sale? Within four years? Or later?

The text of the statute can be read to suggest one year: it states that the duration of an implied warranty can last no “more than one year following the sale.” Cal. Civ. Code § 1791.1(c). But Mexia held that with “a latent defect, a product is rendered unmerchantable, and the warranty of merchantability is breached, by the existence of the unseen defect, not by its subsequent discovery.” 95 Cal. Rptr. 3d at 291. Last December, the Ninth Circuit in Daniel v. Ford Motor Co., held that despite the post-Mexia uncertainty of the past 6 years, “there is not convincing evidence that the California Supreme Court would decide the latent defect discovery issue that was presented in Mexia differently.” As a result, the defect need not manifest, and the implied warranty claim need not be brought, within one year of the sale.

The new question, then, is whether there is any deadline for a Song Beverly implied warranty claim.  … Read more