Federal judges often find themselves confronting a familiar conundrum in consumer class actions that challenge misleading practices. The typical plaintiff will file a suit after somehow discovering that one of the defendant’s advertisements, product labels, or other representations is “false” or “misleading.” The self-nominated “representative” asks the court to certify a class of all consumers “similarly situated”—that is, other consumers who bought the product or were exposed to the misleading message. The plaintiff then seeks not only compensation for the class, but also an injunction or ban prohibiting the defendant from making the challenged claims going forward.

Since an injunction is to stop the likelihood of irreparable future harm, the deceptively tricky question that judges face is whether the named plaintiff can seek an injunction prohibiting the misleading claims when she herself is no longer at risk of being deceived by something she now knows is false. In other words, if the named plaintiff won’t get fooled again, does she have standing to obtain injunctive relief on the class’s behalf? One California Federal court’s take: fool the plaintiff twice, shame on him.Continue Reading Won’t Get Fooled Again: Recent Bigelow Decision Raises Roadblock to Consumer Plaintiffs Seeking Injunctions in False Advertising Class Actions

Handed down January 20, 2016, the Supreme Court’s decision in Campbell-Ewald Co. v. Gomez was a major blow to what class action practitioners call the pick-off strategy: using a Rule 68 offer of complete relief to “pick off” a putative class representative, thereby mooting the class action suit. In Campbell-Ewald the Court rejected this tactic by a 6-3 vote, holding that an unaccepted offer of judgment under Rule 68 does not moot a class action, even where the offer provides everything the named plaintiff has asked for—that is, where the plaintiff “won’t take ‘yes’ for an answer.”

In reaching this decision, though, the Court left open the important question of “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.” This was a wrinkle that had plainly intrigued several of the justices.

Writing in dissent, for example, Chief Justice John Roberts pointedly noted that the “good news” was that “the majority’s analysis may have come out differently if [the defendant] had deposited the offered funds with the District Court.” Justice Samuel Alito likewise noted in dissent that the majority’s decision “does not prevent a defendant who actually pays complete relief—either directly to the plaintiff or to a trusted intermediary—from seeking dismissal on mootness grounds.” And at oral argument, even Justices Anthony Kennedy and Stephen Breyer—who ultimately voted with the majority—mused whether “the case is over” if the defendant not only makes an offer of complete relief but deposits a certified check in the full amount of the judgment with the court or in an independent account.

The ink has barely dried on the Campbell-Ewald opinion, but already at least one court, the Ninth Circuit, has answered the door left open by the decision. Its response: slamming it shut.Continue Reading Heading Off the Pick-Off: Ninth Circuit Slams Door on Use of Rule 68 “Deposits” to Moot Class Actions

The continuing use of child and forced labor in parts of the world is, without question, a humanitarian tragedy. Less clear, though, is whether consumer class actions in the United States are a suitable tool for addressing this problem.

Should retailers and manufacturers be subject to suit under consumer protection statutes if they fail to disclose the difficult-to-quantify risk that their suppliers—or their suppliers’ suppliers—may use forced labor? Do these companies have a legal duty to disclose such risks directly on their products’ labels and packages? And if so, what is the limiting principle here—what types of information must a company disclose on the limited “real estate” of its products’ packaging, and which can it safely omit?Continue Reading The World on a Chocolate Wrapper: California District Court Clarifies Companies’ Duty to Disclose Human Rights Abuses in Supply Chains

Last Tuesday, the U.S. Supreme Court handed down its keenly anticipated decision in Tyson Foods, Inc. v. Bouaphakeo, another in its recent run of class action cases. Siding 6-2 with the plaintiffs-respondents, the majority held that the employees at one Tyson pork processing plant could extrapolate how much overtime class members had worked from statistical evidence estimating how long it took an “average” employee to “don and doff” protective gear. In other words, the Court agreed that the plaintiffs could use inferences drawn from “representative sampling” methods to smooth over employee-specific differences—even though such variations directly impacted whether Tyson was liable to any given class member for overtime pay.

Tyson Foods begs to be read in dialogue with the Court’s landmark decision in Wal-Mart Stores v. Dukes, in which the late Justice Antonin Scalia criticized the use of representative sampling in class actions at the expense of a defendant’s right to litigate individualized defenses to liability. Does the Tyson Foods holding mark a departure from recent precedent, including Wal-Mart’s critique of “Trial by Formula”? And could this ruling have broader implications for class actions in other areas of the law, particularly consumer fraud and false advertising cases?Continue Reading Down Goes Tyson: What Does Tyson Foods v. Bouaphakeo Mean for Consumer Class Actions?