Articles Posted in Class-Action

Settling most cases is a difficult process, particularly when the parties dispute what exactly happened or when the underlying claim turns out to be smaller than anticipated. In Fair Labor Standards Act (“FLSA”) cases, the process can be even more difficult depending on the court’s interpretation of the FLSA’s enforcement provision, section 16, which permits the Department of Labor to supervise settlements.

Courts have reached differing interpretations regarding this statutory language and whether it requires DOL or judicial approval of all FLSA settlements. The parties to an FLSA case may wish to avoid having to submit a settlement agreement to the court to obtain approval before a case can be settled. Such reasons include a desire to keep the settlement terms confidential, the cost of obtaining judicial approval, and the time delay inherent in having to obtain judicial or DOL approval. The question that has long plagued litigants and attorneys alike is whether the parties can find a means of settling their matters without having to seek review, as they do with virtually every other kind of employment case. Continue reading ›

An Illinois appellate court recently affirmed grant of summary judgment in favor of Commonwealth Edison (ComEd) in a class-action lawsuit alleging that ComEd violated the Illinois Employee Credit Privacy Act (“Act”), 820 ILCS 70/1 et seq., by investigating the plaintiff’s credit history in connection with a conditional offer of employment and ultimately refusing to hire her as a result of that investigation.

Many Illinois residents are familiar with ComEd, the public utility company that provides electrical services to nearly four million customers in Illinois. In 2017, ComEd offered the plaintiff a conditional offer for a part-time position. The offer was contingent upon the plaintiff’s successfully passing a background check, credit check, and drug test. ComEd subsequently withdrew its offer and notified the plaintiff by email that “due, in part, to information received from the consumer report previously provided to you, we are not able to offer you employment at this time.”

The plaintiff responded to the news by filing a class-action lawsuit alleging that, by inquiring into her credit history and obtaining her credit report in connection with her application for a position and by ultimately refusing to hire her because of information contained in the report, ComEd violated her rights under the Act. Continue reading ›

A recent decision by the Eleventh Circuit federal court of appeals adds another arrow to class action defendants’ quiver by making it more difficult for plaintiffs to establish standing to sue under the Telephone Consumer Protection Act (“TCPA”). The appellate court ruled that a single text message did not cause sufficient harm to sue in federal court.

In Salcedo v. Hanna, 936 F.3d 1162 (11th Cir. 2019), the plaintiff, John Salcedo, received a single form text message from his former attorney offering a discount on the attorney’s services. After receiving the message, Salcedo filed suit in the district court alleging that the text message violated the TCPA, 47 U.S.C. § 227(b)(1)(A)(iii). Salcedo sought to prosecute the suit on behalf of a putative class of the attorney’s former clients who also received unsolicited text messages from the attorney in the past four years. He alleged that the text message caused him to “waste his time answering or otherwise addressing the message” and infringed upon his “right to enjoy the full utility of his cellular device” and sought statutory penalties of $500 to $1,500 for each text message as damages.

After the defendant unsuccessfully moved to have the case dismissed for lack of standing and failure to state a claim, the district court permitted the defendant to file an interlocutory appeal recognizing that the question of standing “involves a controlling question of law as to which there is a substantial ground for difference of opinion.” The three-judge panel of the Eleventh Circuit did not buy the plaintiff’s standing arguments.

In a detailed opinion, the panel examined its own precedent, the legislative history of the TCPA, and the history of Article III’s standing requirement. Any discussion of standing would not be complete without an examination of the Supreme Court’s 2016 decision in Spokeo v. Robins. At the conclusion of this examination, the appellate court concluded that the plaintiff’s allegations about a single text message failed to state a “concrete injury-in-fact” necessary for federal jurisdiction.

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In a putative class action recently filed in a Florida federal district court against fast-food chain Burger King, the tagline for the Impossible Whopper of “100% Whopper, 0% Beef” is misleading. According to the plaintiff, Philip Williams, although Burger King advertises the Impossible Whopper as being a meat-free option, it is contaminated by meat by-product because it gets cooked on the same grill as other meat products.

The lawsuit accuses Burger King of “false and misleading business practices” and benefiting monetarily from claiming to offer customers a vegan option that in reality is not actually vegan. The plaintiff seeks to represent himself and a class of other vegans who ordered the Impossible Whopper from Burger King. The lawsuit seeks to recover damages for all class members who bought the Impossible Whopper, as well as the imposition of an injunction requiring Burger King to “plainly disclose” that it uses the same grill to cook both the Impossible Whopper and meat burgers.

According to the complaint, the Burger King that the plaintiff visited did not have signage at the drive-thru indicating that the plant-based burger would be cooked on the same grill as meat. The Burger King website notes that “a non-broiler method of preparation is available upon request,” for customers ordering the Impossible Whopper. Despite noting this on its website, the plaintiff alleges that no one told him that the Impossible Whopper was cooked on the same grill as the meat burgers and that if he had known this fact, he would not have ordered it. The suit further claims that other vegans would not have purchased the Impossible Whopper either if they had known. The lawsuit cites similar complaints made by several other consumers online about the burger chain’s preparation of the Impossible Whopper. The complaint requests an order requiring Burger King to return all the profits it made from selling the meat-free alternative, including the money that Mr. Williams paid. Continue reading ›

A federal judge for the Northern District of Illinois has given final approval to three major cruise lines and a travel agency of a $12.5 million class-action settlement. The defendants were accused of bombarding consumers nationwide with prerecorded telemarketing calls promoting cruise trips without their consent.

Defendants Carnival Corporation, Royal Caribbean Cruises Limited, Norwegian Cruise Lines Limited, and Resort Marketing Group, the travel agency that allegedly operated the auto-dialing system, contributed to the settlement fund together. The plaintiffs alleged that the defendants’ use of unsolicited robocalls violated the Telephone Consumer Protection Act.

More than 270,000 valid claims were filed following the initial approval of the settlement in July 2017. According to documents filed in support of the settlement, a total 274,851 valid claims were filed. According to Judge Andrea R. Wood, the judge overseeing the case, this works out to roughly $22 per claim. Continue reading ›

The Federal Trade Commission is asking the Second Circuit federal appeals court to uphold a finding that 1-800 Contacts violated antitrust law by preventing rivals from using its trademarked name in search ads. Meanwhile, 1-800 Contacts is also defending against a class-action lawsuit brought on behalf of consumers centering on the same conduct, but also naming additional retailers as defendants, including National Vision, Vision Direct, Luxxotica and Walgreens. Luxxotica recently agreed to pay $5.9 million to settle the claims against it in the lawsuit and National Vision settled for $7 million in 2017.

The dispute centers on 1-800 Contacts’s business practices dating back to 2004, when it brought or threatened legal action against numerous rivals accusing them of infringing its trademarks by purchasing search ads using the phrase “1-800 Contacts” to trigger a pay-per-click search ad. From 2004 through 2013, the company sued or threatened to sue at least 13 competitors over alleged trademark infringement on various search engines. 1-800 Contacts asserted that the act of purchasing ad words using its registered mark violated its trademark. In most cases, the rival companies responded to these threats or lawsuits by agreeing to enter agreements requiring them to cease bidding on search engine ad words using the 1-800 Contacts mark. Only Lens.com fought back and largely prevailed in the suit. Continue reading ›

In a 3-0 decision, the U.S. Court of Appeals for the Ninth Circuit ruled that Facebook users in Illinois can move forward with a class-action lawsuit challenging the company’s use of facial recognition technology. Facebook had argued that the court should not let the plaintiffs proceed on a class basis with claims that it violated the Illinois Biometric Information Privacy Act (often referred to a “BIPA”). The Ninth Circuit’s ruling in Patel v. Facebook affirmed the District Court’s decision to certify a class of Illinois Facebook users.

The BIPA is intended to protect the biometric privacy of Illinois citizens by imposing restrictions on the collection and storage of certain biometric information by private companies. One of the protections afforded by the law is the requirement that a company must obtain an individual’s written consent before collecting and storing any such biometric information.

The case stems from a class action complaint filed by three Illinois Facebook users on behalf of all Illinois Facebook users accusing the social media company of unlawfully gathering and storing its users’ biometric information, including through the use of facial recognition technology, without consent. Specifically, the suit targets a feature Facebook launched in 2010 called “Tag Suggestions” which uses facial recognition technology to build a “face template” of an individual from pictures uploaded to the site. The software builds these face templates by analyzing an individual’s face in uploaded photos and measuring various geometric data points on an individual’s face such as the distance between eyes, nose, and ears. Users are able to opt-out of the feature, and Facebook argued that it only builds face templates of Facebook users who have not opted-out and have the feature turned on. Continue reading ›

If you’ve used Facebook at all in the past few years, you’ve probably noticed that every time you post a photo with one of your friends, Facebook automatically suggests you tag that person. While that might seem innocent enough, the facial recognition technology Facebook uses to accomplish that is highly controversial and possibly illegal.

Facial recognition technology is a relatively recent development and it didn’t take long for it to become controversial. With the abundance of cameras all around us, facial recognition technology allows owners of the technology to find us just about everywhere we go, which is why Facebook is now facing a class action consumer lawsuit on behalf of millions of Illinois users.

According to the lawsuit, Facebook used its facial recognition technology to gather and store biometric data on its users without their consent, which violates the Illinois Biometric Information Privacy Act of 2008. Facebook tried to have the class action dismissed and to force each plaintiff to sue them individually, knowing the costs of filing the lawsuit would prohibit most, if not all the plaintiffs from pursuing legal action.

But the court said the class action was the proper format for this particular lawsuit. Facebook appealed that decision, and the appellate court recently upheld the lower court’s ruling, allowing the class action to proceed as is. Continue reading ›

A student loan debtor sued her loan servicer, arguing that the servicer had violated Illinois consumer fraud law by asserting that its customer representatives were experts in repayment options and acted in a borrower’s best interest when they were in fact instructed to steer borrowers into payment options that benefited the servicer more than the borrower. The district court dismissed the suit, finding that federal disclosure law preempted the suit, but the appellate court reversed, holding that penalizing loan servicers for making affirmative misrepresentations did not impose additional disclosure requirements on servicers, and thus was not preempted.

Nicole Nelson financed her education with federal student loans. Great Lakes, Nelson’s loan servicer, manages borrowers’ accounts, processes payments, assists borrowers with alternative repayment plans, and communicates with borrowers about the repayment of their loans. Nelson began repaying her loans in December 2009. In September 2013, she changed jobs and her income dropped. She contacted Great Lakes, and its representative led Nelson to believe that “forbearance” was the best option for her personal financial situation. A few months later, Nelson lost her new job. She contacted Great Lakes again in March 2014. This time, the representative again did not inform her of income-based repayment options, and instead steered her into deferment.

Forbearance is the temporary cessation of payments, allowing an extension of the term of the loan, or temporarily accepting smaller payments than were previously scheduled. Under forbearance, unpaid interest is capitalized, which can substantially increase monthly payments after the forbearance period ends. Federal law requires lenders and loan servicers to offer income-driven repayment plans, which Nelson argues are more appropriate in situations of longer-term financial hardship. Enrolling callers in these plans is, however, time-consuming for customer service representatives. Nelson eventually sued Great Lakes on behalf of a putative class, arguing that Great Lakes breach Illinois consumer protection law when it held itself out as an expert on student loan plans and caused her to rely on their assertions that they would operate on her behalf. The district court dismissed Nelson’s complaint, finding that her claims were preempted by federal law that stated that federal student loans were not subject to state-law disclosure requirements. Nelson then appealed. Continue reading ›

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