Centralization of claims in multidistrict litigation has become the new normal—so much so, that MDL proceedings now comprise more than 50 percent of the federal civil caseload. But has MDL practice in the United States peaked? Only time will tell. While the total number of MDL cases remains high (424,720 cases as of mid-February), the vast majority of these cases are concentrated in just a few of the more crowded MDL dockets. And as the annual MDL statistics in recent years show, the total number of new MDL petitions submitted, and granted, has been in decline. In 2021, for example, the Judicial Panel on Multidistrict Litigation received 33 total MDL petitions, granting only 19—compared with 44 petitions (26 granted) the year before.
Category: Consumer Fraud and Protection
Tenth Circuit Affirms Dismissal of Pet Food False Ad Proposed Class Action
The Tenth Circuit recently affirmed dismissal of a proposed class action against a dog food manufacturer, finding that the putative class claims were nonactionable puffery and overly subjective.
In Renfro, et al. v. Champion Petfoods USA, Inc., et al., No. 20-1274, pet owner plaintiffs brought a proposed class action against Champion Petfoods alleging that the packaging for some of its dog food brands were false and misleading. Specifically, plaintiffs asserted claims for violation of the Colorado Consumer Protection Act, breach of express and implied warranty, fraudulent misrepresentation, fraudulent concealment, unjust enrichment, and negligence.
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PFAS in Cosmetics Continue to Draw Attention as Litigation and Legislation Efforts Mount
In June 2021, we published Cosmetics Companies: Beware of PFAS, highlighting the recently introduced No PFAS In Cosmetics Act and recommending that cosmetics and personal-care product companies examine their products and supply chains to determine if, when, and where PFAS may affect their businesses. As anticipated, PFAS in cosmetics has continued to draw attention, with the filing of at least two lawsuits and the anticipated enactment of PFAS legislation in several states.
The No PFAS In Cosmetics Act, which seeks to ban the use of intentionally added per- or polyfluoroalkyl substances (“PFAS”) in cosmetics, was introduced in the House on June 17, 2021. The bill has been assigned to the House Energy and Commerce Subcommittee on Health, but no hearing has been scheduled. Ultimately, the bill will require the Department of Health and Human Services to issue and finalize a rule banning the use of intentionally added PFAS in cosmetics. In the meantime, on February 2, 2022, over 30 senators sent a letter to President Biden requesting funding for Fiscal Year 2023 for PFAS research, regulatory efforts, and testing.
FTC Continues Crack Down on Unfounded COVID Claims
Last month, the Federal Trade Commission (FTC) announced that it “ordered more than 20 marketers nationwide to immediately stop making baseless claims that their products and supposed therapies can treat or prevent COVID-19.” Like prior rounds of cease-and-desist demands, the letters warned that the alleged violators could be subjected to monetary penalties under the COVID-19 Consumer Protection Act, which Congress passed in 2020. Specifically, the letters warned that businesses engaging in a deceptive act or practice associated with the treatment, cure, prevention, mitigation, or diagnosis of COVID-19 or a government benefit related to COVID-19 could be subjected to penalties of up to $43,792 per violation.
As the FTC points out, however, “there’s a key point that differentiates these Demands from the more than 400 letters that preceded them.” Namely, copies of the recent round of letters were also sent to the social media platforms used by the advertisers, including Facebook, Instagram, Twitter, YouTube, Etsy, LinkedIn, Shopify, and TikTok. The FTC found that nearly all of the marketers used social media to convey their claims, with many companies utilizing multiple platforms. A recent FTC analysis on the alleged role of social media platforms in the spread of disinformation related to COVID found that deceptive marketers are able to “extend[] the reach of their deceptive COVID claims by using major social media platforms.” The FTC observed that social media’s design helps scammers amplify their deceptive messages while also identifying users most likely to be receptive to those messages. It cautioned, “[b]ogus claims of miracle cures may be successful in attracting consumers’ eyeballs, but they can have devastating consequences for Americans who forgo needed treatment or part with hard-earned money in pursuit of false cures.”
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Eastern District of Virginia Denies Motion to Certify Class, Sheds Light on Rule 23(b)(3) Predominance and Superiority Requirements for Class Actions
The U.S. District Court for the Eastern District of Virginia analyzed Federal Rule of Civil Procedure 23(b)(3)’s predominance and superiority requirements for class actions in a recent decision denying a motion to certify a purported class of motor vehicle purchasers. The decision underscores that plaintiffs seeking to certify classes asserting claims that will render the process of identifying class members to be a mere series of individualized inquiries will not pass muster under Rule 23.
The Facts in Dispute
Garcia, et al. v. Volkswagen Group of America, Inc., et al. involved a purported class of plaintiffs residing in multiple states who purchased vehicles manufactured by defendants within the last 14 years. The plaintiffs sued a group of auto manufacturers alleging damages resulting from defendants’ alleged fraudulent misrepresentations about the vehicles, and asserting claims for violations of the Federal Odometer Act, fraud, breach of contract, and unjust enrichment, in addition to state law claims under the laws of California, Colorado, Florida, Illinois, New Jersey, and Washington.
Amazon Notches Another Win on Personal Injury Liability Relating to Third-Party Seller Products
For some time, we have been following the emerging case law on whether companies, such as Amazon, that create an online marketplace for other sellers, may be held liable when products supplied by those sellers cause injury. The cases have gone both ways, but on November 30 Amazon added another ruling to its win column when a New York appellate court upheld a ruling dismissing negligence and breach-of-warranty claims based on injuries allegedly caused by a defective service from a third-party provider on a product sold by a third party on Amazon’s website.
In Wallace v. Tri-State Assembly LLC (Case No. 2020-04820), the First Department of New York’s Appellate Division affirmed an order dismissing claims against Amazon by an individual who was injured after the handlebars on his electric bike came apart, causing him to fall. His father ordered the bike on Amazon’s website from a third-party seller in China, and at the same time purchased an assembly option from an Amazon-approved service provider, Tri-State. Plaintiff alleged that Amazon and its “agents” were negligent and breached warranties of fitness and merchantability.