Turbulence ahead for airlines in price-fixing lawsuit

Last week, American Airlines, Delta, Southwest and United Continental received some unwelcome news. A federal judge denied the airlines’ motion to dismiss a class action alleging a price-fixing conspiracy. The plaintiffs allege that the airlines colluded to raise fares and reduce flight choices for travelers, in part by restricting seating capacity in their aircrafts. (The case is In re Domestic Airline Travel Antitrust Litigation, U.S. District Court, District of Columbia, No. 15-mc-01404.) In addition to the class action, The Department of Justice is conducting its own separate inquiry into the matter. 

Other Jurisdictions

Mobile payment apps and data privacy litigation

Google was recently unsuccessful in getting a federal court to dismiss a lawsuit that accused the tech giant of violating the privacy of Google Wallet users. The lawsuit alleges that Google impermissibly shared users’ “personal information with outside app developers,” Reuters reports. Google Wallet stores users’ credit and debit card information so that users can simply tap their phone at checkout on a special terminal, creating ease of payment.

The lawsuit, pending in California, alleges that Google breached users’ contracts, violated the Stored Communications Act and violated California consumer protection law. The plaintiff is seeking to certify a class, with $1,000 in damages per violation and punitive damages, among other remedies.

Issues of data privacy pervade commerce. Companies that obtain or store consumer data should take care when using technology in their business transactions. For more on this case, click here.

Data Privacy and Cyber Security, Other Jurisdictions

Data breach roundup

Here’s the latest data breach news from the past few days:

Data Privacy and Cyber Security, Ohio Class Action Law, Other Jurisdictions

Another circuit addresses the pick-off play

As we’ve recently discussed, one of the more interesting developments in class action law as of late is the use of the pick-off play, which occurs when a potential class action defendant settles the case with a named plaintiff, potentially mooting the rest of the class action from going forward. And, as we’ve explained in the past, different circuits have come down on different sides on the issue as to whether a Rule 68 offer (an offer to the named plaintiff to fully settle that plaintiff’s damages) indeed moots the rest of the suit. As this story explains, the Eleventh Circuit recently joined the debate and held that it does not:

On December 2, 2014, the United States Court of Appeals for the Eleventh Circuit reversed a district court order dismissing a putative class action as moot, holding that: (1) an unaccepted Rule 68 offer of judgment does not moot a plaintiff’s individual claims; and (2) even if a Rule 68 offer were to moot individual claims, the putative class action would remain justiciable, irrespective of whether a motion to certify the class had been filed at the time of the offer. See Stein v. Buccaneers Ltd. P’ship, No. 13-15417, -- F.3d --, 2014 WL 6734819 (11th Cir. 2014); see also Keim v. ADF Midatlantic, LLC, No. 13-13619 (11th Cir. Dec. 2, 2014) (unpublished) (reversing dismissal of class action based on decision in Stein).

While Stein provides some much-needed clarity regarding the effect of Rule 68 offers on putative class actions in the Eleventh Circuit and aligns the Circuit with most others that have considered the issue, the court’s decision eliminates a strategic option class-action defendants have used to obtain early dismissals, and it may have the unintended consequence of rendering early resolutions of class actions less likely.

In the opinion, the court addresses whether the timing of the Rule 68 offer makes a difference on the issue of mootness. According to the court, a live controversy could still exist after a Rule 68 offer, regardless of whether the remaining plaintiffs have moved to certify the class:

On the issue of the mootness of the class claims, Zeidman [ed note: a Fifth Circuit case from 1998] is different from our case in only one significant respect: in Zeidman, the plaintiffs moved to certify a class before the individual claims became moot, while here, the plaintiffs moved to certify the class only after BLP served its Rule 68 offers. BLP says this changes the result.

We disagree.

First, it is plain that this case still presents a live controversy. The plaintiffs say BLP violated the Telephone Consumer Protection Act and that all class members are entitled to money damages; BLP denies it. In indistinguishable circumstances, Zeidman held the dispute was still live and said: "The case before us, therefore, rests not on whether there exists a live controversy, but on whether the district court has before it some plaintiff with a personal stake in that controversy." Id. at 1042. The same is true here.

Federal Class Action Law, Other Jurisdictions , Settlements

Illinois Attorney General proposes changes to “beef up” data breach law

As reported by NBC Chicago, Illinois Attorney General Lisa Madigan is pushing a new bill in response to a record 67 million personal records that were breached last year in the state. Here are a few highlights from the piece about the proposal:

Madigan’s bill, which is sponsored by Senator Daniel Biss and Representative Ann Williams, will expand the type of information that requires a company to notify consumers of a breach, including medical information outside of federal privacy laws, biometric data, geolocation information, sensitive consumer marketing data, contact information when combined with identifying information, and login credentials for online accounts.

The bill also requires entities holding sensitive information to take “reasonable” steps to protect the information and requires entities to notify the Attorney General’s office when breaches occur. Madigan said her office would create a website that lists every data breach that affects Illinois to increase awareness among residents.

Data Privacy and Cyber Security, Other Jurisdictions

Michigan district court weighs in on Rule 68 offers

We’ve previously discussed Rule 68 offers — also called a “pick-off play” — in the context of class action proceedings. The essence of a Rule 68 offer is this: a prospective class action defendant settles the case with a named plaintiff, potentially mooting the rest of the class action from going forward.

A recent federal district court decision out of Michigan weighed in on the issue. In Compressor Engineering Corp. v. Charles J. Thomas, Jr., the plaintiffs brought suit under the Telephone Consumer Protection Act (TCPA) for alleged unsolicited advertisements sent via fax machine. The defendant offered the named plaintiff a judgment pursuant to Federal Rule of Civil Procedure 68. When the plaintiff didn’t respond within 14 days, the defendant moved to dismiss the case for lack of subject matter jurisdiction. As the defendant saw it, the claims were moot given the unaccepted offer of judgment.

The district court disagreed. First, it distinguished its case from Genesis Healthcare Corp. v. Symczyk, a Supreme Court decision that, according to the district court, “assumed without deciding that a named plaintiff’s individual claims in a collective action pursuant to the Fair Labor Standards Act (‘FLSA’) were mooted by an unaccepted offer of judgment pursuant to Rule 68.” In the district court’s view, the “Supreme Court limited its holding in Genesis Healthcare to collective actions pursuant to the FLSA and explained that Rule 23 class actions were ‘fundamentally different from collective actions under the FLSA . . .’.”

Next, the court addressed Sixth Circuit precedent on the effect of Rule 68 offers in the Rule 23 context: “when ‘the named plaintiff’s claim becomes moot before certification, dismissal of the action is required.’” The court went on to note that Sixth Circuit precedent requires this result only when the “unaccepted offer of judgment” under Rule 68 “satisfies a plaintiff’s entire demand.” Here, it did not. While the unaccepted monetary offer took care of the plaintiffs’ financial demands, it did not address the plaintiffs’ additional request for injunctive relief namely injunctive relief against “further violations” of the TCPA.

Other Jurisdictions , Sixth Circuit Class Action Law, Telephone Consumer Protection Act