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Class Action Countermeasures

Discussions of the Strategic Considerations Involved In Class Action Defense

Week in Review: How the Causes of Action Asserted Impact Which Defendants Face Certification

Posted in Uncategorized

This week we consider a decision that illustrates how the suitability—or unsuitability—of certain causes of action for certification can render certain defendants more susceptible to class actions than others, as well as a state court’s specific objection to a proposed class action settlement.

Breach of Implied Warranty of Merchantability Claim Provides Path to Certification Where Fraud Claim Dead Ends:  Fraud is a notoriously difficult claim to litigate on a class-wide basis due to the individualized proof required to meet the reliance element. In the context of false advertising claims, an unintended consequence of this is that it may be easier to pursue a class action against the seller of a product than the manufacturer whose packaging included the purported misrepresentation.  At least such was the case in a recent Northern District of Ohio decision regarding consumers’ allegations that packaging on toddler wipes misrepresented they were “sewer and septic safe.”  The court refused to certify a fraud claim against the manufacturer due to the predominance of individualized issues, but did certify a breach of the implied warranty of merchantability claim against the seller on the grounds that if the product did not live up to this warranty, all purchasers were affected in the same way.

Broad Release Language in Settlement Agreement Precludes Preliminary Approval:  Rather than striking an objectionable provision in a class action settlement, a California Superior Court denying preliminary approval issued a ruling so specific as to essentially toss the blue pencil to the parties and say, “Here, you do it.”  The action arose out of claims of underpayment of wages by an insurance company, and the provision the court refused to approve purported to release all class-member employees’ claims “known or unknown, that were or could have been brought based on the facts or claims alleged in any version of the complaints filed in this matter arising during the class period.”  The court emphasized that the release was the only piece of the settlement standing in the way of the approval, and that the denial of preliminary approval was without prejudice. The case is captioned Tara Tunforss v. Allstate Insurance Co., Case No. BC448390.

Court Denies Satellite Radio Provider’s Motion for Decertification as the Same Old Song:  The Central District of California denied a satellite radio provider’s motion to decertify a class of song owners who filed suit over the payment of royalties for the use of their material.  Defendant Sirius XM contended that each artist’s claim would be too individualized for class resolution, but the court denied the motion without oral argument, characterizing the defendant’s arguments as rehashes of those asserted sixteen months ago in opposition to the plaintiffs’ motion for certification.  In that initial ruling on certification, the court held that individualized issues did not predominate as to song ownership because those questions could be resolved through a streamlined attestation process.  The court further held that individualized issues did not predominate as to the plaintiff’s proposed damages analysis, because the theory’s reliance on already available data concerning the percentage of plays of each song on satellite radio made it a logical and workable damages theory.

Litigation Matters: The Curious Case of Tyson Foods v. Bouaphakeo

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Just a brief update today.  Last week, the latest edition of the Cato Supreme Court Review was published, and it included an article by yours truly entitled Litigation Matters: The Curious Case of Tyson Foods v. Bouaphakeo.  Here’s the abstract from SSRN:

The general assumption when analyzing Supreme Court jurisprudence is that the opinion is the product of a clash between the justices (and their 30-odd clerks) and their specific ideological predilections. And there is no question that judges — especially those on the Supreme Court and the various federal appellate judges — matter in the development of law in the United States. But the role of the litigator is often overlooked. Given the adversarial nature of the American justice system, this is surprising. It is the litigator who frames the issues that appear before the judge at each level. It is the litigator who creates the record the judge must examine. And it is the litigator who makes the particular tactical choices that result in the case as it appears before the judge on appeal. Despite its comparatively narrow ruling, Tyson Foods is an interesting case because it makes the effects of those choices particularly transparent.

Litigation Strategy & Tyson Foods

Posted in Uncategorized

A small bit of self-promotion this week.  The Cato Supreme Court Review has come out, and it contains an article I wrote titled Litigation Matters: The Curious Case of Tyson Foods v. Bouaphakeo.  The article combines two of my professional obsessions: litigation strategy and class action jurisprudence.

Here’s a brief excerpt to give you a taste:

The general assumption when analyzing Supreme Court jurisprudence is that the opinion is the product of a clash between the justices (and their 30-odd clerks) and their specific ideological predilections. And there is no question that judges—especially those on the Supreme Court and the various federal appellate judges—matter in the development of law in the United States. But the role of the litigator is often overlooked. Given the adversarial nature of the American justice system, this is surprising. It is the litigator who frames the issues that appear before the judge at each level. It is the litigator who creates the record the judge must examine. And it is the litigator who makes the particular tactical choices that result in the case as it appears before the judge on appeal. Despite its comparatively narrow ruling, Tyson Foods is an interesting case because it makes the effects of those choices particularly transparent.

You can follow the link above to SSRN for a PDF of the galley for the article, or get the entire issue, which is filled with a number of interesting articles about the last Court term.

Week in Review: How Excluding the Plaintiff’s Expert Can Position You Perfectly to Defend a Rule 23(f) Appeal and More

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This week we take a look at how a trial court’s evidentiary rulings can foreclose pathways to appealing a ruling on certification down the line, as well as a Hail Mary appeal by a group of Super Bowl ticketholders that fell harmlessly to the turf. 

Exclusion of Expert by District Court Renders Certification Appeal a Quick Exercise:  The Ninth Circuit recently affirmed denial of class certification in a putative class action filed against an automaker over allegedly defective brakes, based on its determination that there was no evidence of a common defect.  What may be more interesting to practitioners than the outcome is the path that led to the appellate court’s determination on certification.  Because the plaintiffs attempted to prove their “common defect” theory through an expert whose testimony was excluded by the lower court, the Ninth Circuit’s holding that the district court did not abuse its discretion by excluding that testimony effectively resolved the certification issue as well.  With no evidence of a common defect, it was a short, easy step to affirm the denial of certification.

Separate Classes Can’t Save Super Bowl Ticket Purchasers’ Bid for Certification:  Class counsel seeking to avoid predominance challenges to certification will often use subclasses or separate classes to attempt to concentrate similarly situated class members.  That play call fell flat for a group of football fans dissatisfied with their tickets to Super Bowl XLV, as the Fifth Circuit upheld the lower court’s order declining to certify classes of “displaced” ticketholders, “relocated” ticketholders, and “obstructed-view” ticketholders.

For the “relocated” class members who were given different seats, the court held that individual issues still predominated over common issues because the key questions—whether the new seat was of lesser-quality, and if so, how it affected the damages analysis—could not be resolved on a classwide basis.  Similarly, the court held that individualized issues regarding the extent or materiality of any particular obstruction prevented certification of the “obstructed-view” class.  Lastly, the “displaced” class of ticketholders—those who never received a seat to the game at all—ran into another problem that can haunt those who split their classes too thinly: the court held this class failed to satisfy Rule 23(a)’s numerosity requirement.

Sixth Circuit Aligns with Seventh Circuit on Data Breach Class Actions:  Following its decision in Lewert v. P.F. Chang’s China Bistro this April, some commentators declared the Seventh Circuit the place to be for those seeking to bring a data-breach class action (for a discussion of some of the obstacles that remain for those plaintiffs notwithstanding Lewert, look here).  Regardless of the ultimate viability of these actions, the Seventh Circuit gained an ally last week when the Sixth Circuit reversed the lower court’s dismissal of a data-breach class action for lack of standing, holding that plaintiffs had sufficiently identified a substantial risk of harm because “[w]here a data breach targets personal information, a reasonable inference can be drawn that the hackers will use the victims’ data for the fraudulent purposes alleged in plaintiffs’ complaint.”  The court also held that reasonably incurred mitigation costs, such as paying for credit security freezes, also qualify as a concrete, particularized injury.

Settlement Contingencies Based on Company’s Valuation Too Uncertain for Court:  Courts reject proposed class action settlements all the time, often because the court concludes that the terms of the settlement agreement do not afford sufficient relief to class members to justify their waiver of rights (or, for the cynical among us, the attorneys’ fees).  A San Francisco Superior Court judge recently held that uncertainty about the relief that will ultimately be afforded to class members can likewise torpedo a settlement.  In the Wash.io Wage and Hour Cases, the parties’ proposed settlement calculated different potential payouts to class members based on the future valuation of the defendant, an app-based laundry service, and the court concluded the odds of any particular valuation being reached needed to be assessed prior to determining whether the agreement was a fair deal for class members.

 

Will Collective Arbitration Waivers Land in the Supreme Court Again?

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The long-running battle over collective action waivers in the arbitration clauses of employment agreements continues to rage in the Courts of Appeals.  Two recent decisions (and the cert petitions filed in their wake) may well lead the Supreme Court to consider once again the thorny relationship between the class/collective action mechanism and federal arbitration law.

Just weeks ago, a divided panel of the Ninth Circuit delivered its opinion in Morris v. Ernst & Young, LLP, vacating an order by the N.D. Cal. that would have compelled individual arbitration of claims that the defendant misclassified employees in order to deny them overtime wages.  The panel majority went out of its way to emphasize that it had no qualms with such disputes being sent to arbitration—or to any number of other, more inventive forms of alternative dispute resolution:

The illegality of the “separate proceedings” term here has nothing to do with arbitration as a forum. . . . The same infirmity would exist if the contract required disputes to be resolved through casting lots, coin toss, duel, trial by ordeal, or any other dispute resolution mechanism, if the contract (1) limited resolution to that mechanism and (2) required separate individual proceedings. The problem with the contract at issue is not that it requires arbitration; it is that the contract term defeats a substantive federal right to pursue concerted work-related legal claims.

Circuit Judge Sandra Ikuta’s vigorous dissent, which called the majority’s opinion “breathtaking in its scope and in its error,” rejected that analysis. Instead, she traced a common thread through the Supreme Court’s many decisions enforcing arbitration clauses, finding that “the Supreme Court consistently rejects claims that a ‘contrary congressional command’ precludes courts from enforcing arbitration agreements according to their terms, including when such agreements waive the use of class mechanisms.”  In other words, if the claimed statutory rights at issue in Gilmer, CompuCredit, and Italian Colors didn’t cut it for the Supreme Court, neither does the National Labor Relations Act’s right to “concerted activities.”

The dissent in Morris is hardly a lone voice in the wilderness.  In its decision late last year in Murphy Oil USA, Inc. v. NLRB, the Fifth Circuit reiterated its previously articulated stance that “(1) the NLRA does not contain a ‘congressional command overriding’ the Federal Arbitration Act . . . and (2) ‘use of class action procedures . . . is not a substantive right’ under Section 7 of the NLRA.”

These divergent outcomes are now the subject of parallel cert petitions in Morris and Murphy Oil.  Unsurprisingly, each petition cites the other Court of Appeals decision.  Time—and perhaps the volume of amicus curiae briefs sought to be filed—will tell whether the Supreme Court decides to use one or both of these cases as an opportunity to clarify what statutory rights, if any, can override the Federal Arbitration Act’s national policy favoring arbitration.

Common overcharges may not be so common

Posted in Scholarship, Uncategorized
Often, when a plaintiffs’ counsel seek to certify a class asserting a hard-to-prove financial injury, they will rely on a statistics or economics expert to demonstrate that there has been some kind of “common overcharge” for the product at issue.  This method is extremely common in antitrust class actions, but also shows up increasingly in various kinds of consumer class actions, including product liability class actions (“we would not have paid this much for a product with a defect”) and food-labeling class actions (“we would not have paid so much for Nutella if we’d known it was sugary”).
The “common overcharge” argument is seductive.  It provides a judge a common method of determining a key element of liability, offered by an expert, and backed up by math.  But, as economists have pointed out, it’s not necessarily accurate.  And this critique is not coming from the perspective of nailing down everyone’s damages to the last decimal point.  Instead, economists are concerned about adequately accounting for heterogeneity of demand when they construct hypotheses. That is, they’re trying to make sure that the model they have created actually acts like the buyers it’s supposed to represent.  Doing otherwise would mean either overcharging the defendant (not good for either deterrence or fairness) or under-compensating a class (not good for compensation or fairness).
In their article Turning Daubert on its Head: Efforts to Banish Hypothesis Testing in Antitrust Class Actions, economists Laila Haider, John Johnson, and Gregory Leonard take on the question of whether a single statistical technique can really account for a heterogenous group.
It has become standard in modern empirical economics to recognize and, where possible, account for, possible heterogeneity across economic agents (e.g., customers and suppliers) in their responses to changes in economic factors. For example, the well-known “BLP” approach frequently used in demand analysis allows for the possibility that different consumers have different levels of price sensitivity (including possibly zero sensitivity). Thus, for a defendant’s economist to raise the possibility that a regression model may differ across customer-suppliers is consistent with the current state-of-the-art in economics research.
(Footnotes omitted, emphases added.)  (“BLP” refers to “best linear predictor,” the old “fit the line to the scatterplot” method.)
In other words, there are solid economic reasons not to accept the plaintiffs’ expert’s use of a broad regression that downplays differences among class members.  In fact, it is often good Use of individual regressions/hypothesis testing in class actions.
The authors specifically discuss antitrust class actions, but their analysis easily transfers to products liability and consumer class actions as well.  In fact, any time a plaintiff’s economist claims she can come up with a simple averaged overcharge, defense counsel should be on guard.  As econometrics get more sophisticated, it is becoming clear that an “average overcharge” may be just about as useful as “average state law.”

The New Rule 23 Is Available for Public Comment

Posted in Settlement, Uncategorized
In August, while we were all on vacation, beating the heat, or recovering from a busy first half of 2016, the Advisory Committee published the new proposed Rule 23 for public comment.
The proposed changes here fall into several categories:
Notice.  Rule 23’s notice provision gets amended to allow for technological change.
Preliminary approval.  Preliminary approval is dead.  Long live preliminary approval!  In other words, the Committee has taken a stand (in its Comment) that the moniker “preliminary approval” is misleading.  But it has explicitly enshrined a reference to the initial hearing where the court determines whether the likelihood of settlement approval justifies certifying the class for settlement purposes and sending out notice to the class members.  In addition, it identifies much of the information that the parties should provide before the court makes its notice determination.
Settlement criteria.  In addition to reiterating the need to find a settlement “fair, reasonable, and adequate,” Rule 23(e) would be amended to require the court consider the following factors:
(A) the class representatives and class counsel have adequately represented the class;
(B)  the proposal was negotiated at arm’s length;
(C)  the relief provided for the class is adequate, taking into account:
(i)  the costs, risks, and delay of trial and appeal;
(ii)  the effectiveness of the proposed method of distributing relief to the class, including the method of processing class-member claims, if required;
(iii)  the terms of any proposed award of attorney’s fees, including timing of payment; and
(iv)  any agreement required to be identified under Rule 23(e)(3); and
(D) class members are treated equitably relative to each other.
Objectors.  The Rule now explicitly recognizes objectors, places several limitations on their withdrawal of claims in exchange for money, and provides a mechanism for successful objectors to get paid.
I’m sure I’ll have more thoughts about the proposed amendments as the public hearing period progresses, but it’s interesting to me that the only proposals that survived the town hall tour and rounds of comments so far were those involving settlement.  Politically, it makes sense: settlements are where the harm to class members is clearest when a class action goes bad, and absent class members are the one group that does not receive pointed criticism for naked, monetary self-interest.  I’ve consistently argued that the best way to guard against bad settlements is to guard against bad class actions.  But even if the Advisory Committee is focused on the symptoms rather than the root pathology, at least they are paying attention to the problem.
The public comment period is open until February 15, 2017, and includes several public hearings.  If you care about the proposed changes, make sure you get heard.

Week in Review: The Uphill Battle of a Rule 23(f) Appeal and More Spokeo

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This week we take a look at a Ninth Circuit decision giving short shrift to a Rule 23(f) appeal and revisit two repeat players on Class Action Countermeasures: arbitration clauses and challenges to a class representative’s standing under Spokeo.

Ninth Circuit Succinctly Shoots Down Appeal from Order Granting Certification:  The cost of litigating a claim on a class-wide basis can certainly justify seeking an interlocutory appeal from an order granting certification, but that doesn’t mean that such relief is easily obtained.  The Ninth Circuit reminded practitioners of that difficult truth last week in a one-page order summarily denying the defendants’ petition for permission to appeal the district court’s order granting class certification.  The class certified in that action comprises employees seeking to pursue claims against animation and visual effect studios who they allege secretly agreed not to recruit one another’s employees in order to suppress wages.  While Rule 23(f) permits an appeal from an order granting or denying class certification if filed within 14 days of the order, this discretionary appeal is typically only granted when the ruling on certification “sounds the death knell” of the litigation, or turns on a novel or unsettled question of law.

More Arbitration Clauses, More Problems: Another week, another set of reasons a court may refuse to enforce the class action waiver in your arbitration clause.  Unsurprisingly, one way to lose the protection of an arbitration clause is to designate a non-existent forum.  This was the Eleventh Circuit’s basis for denying a bank’s attempt to send a payday lending dispute to arbitration, holding that the designated Cheyenne River Sioux Tribal Nation arbitral forum did not exist at the time the agreement was made.  Turning to what is surely a more common reason for striking an arbitration clause, the Second Circuit reversed the lower court’s order sending a matter to arbitration, ruling that a reasonable fact-finder could conclude it was too difficult to access the set of terms and conditions that included the arbitration clause. These terms and conditions were available by hyperlink on the online order page, but the page included between fifteen and twenty-five other hyperlinks to various pages, which the court held could potentially confuse a consumer.

Court Construes Spokeo to Bestow Standing on a Plaintiff Challenging the Calculation of an Unpaid Cost:  The most notable takeaway from an August 30 U.S. District Court decision granting a plaintiff’s motion for class certification on an FDCPA claim has nothing to do with Rule 23; rather, this ruling will most likely provoke discussion based on its application of standing under Spokeo.  The class definition at issue encompassed any Illinois resident who received a collection letter from the defendant that included a charge for “costs” calculated as a percentage of the debt the consumer owed.  In holding that the class was ascertainable, the court rejected the defendant’s argument that many class members, including the named plaintiff, lacked standing under Spokeo because they had not paid the disputed cost identified in the letter.  The court held that the plaintiff had standing because receiving a misleading debt communication is a type of concrete, particularized injury the FDCPA was designed to prevent, even if the lack of payment on the debt renders that injury intangible.

Class Action Spanning Five Decades Comes to a Close:  The Eleventh Circuit recently entered an order that bucked two oft-repeated generalizations in one fell swoop: class actions never end, and laches defenses never win.  In 1982, the U.S. District Court for the Middle District of Florida entered a modified consent decree regarding hiring practices for the fire department of the City of Jacksonville, which arose from a 1971 class action filed by employees and applicants.  In 2007, the plaintiffs filed a motion to show cause against the city for failure to comply with that consent order starting in 1992.  The Eleventh Circuit affirmed the district court’s order denying the motion to show cause on the grounds of laches and dissolving the consent decree, holding that plaintiffs’ fifteen-year delay in seeking relief was too prejudicial to the city given the number of witnesses and documents that were no longer available.

 

Should MDL Judges Act More Like Class Action Judges?

Posted in Scholarship, Uncategorized
Class actions are not the only form of aggregate litigation. Multi-district litigation (“MDL”), the process by which large numbers of smaller lawsuits are consolidated before a single judge for pretrial purposes, without requiring any kind of certification process, has been around since 1968.  And, as courts have demanded more rigor for Rule 23 certification, MDLs have become more popular, particularly for mass torts.
With that increasing popularity comes increasing scrutiny.  To take just one example, a new paper on the proper role of the judge in MDL cases by professors Andrew Bradt and D. Theodore Rave has received press coverage only days after its posting on SSRN.
The paper deserves the recognition.  It’s a good summary of the problems with MDLs, and contains an interesting solution to at least one of the issues scholars and lawyers have confronted.
As the authors write:
Despite its transfer-and-remand structure, judges, lawyers, and scholars all recognize that the goal of MDL is not merely centralized discovery followed by thousands of trials scattered around the country. The goal is mass settlement. By centralizing nationwide proceedings in mass tort cases—essentially gathering all of the relevant players into same forum before the same judge—MDL creates a perfect environment for the parties to negotiate a global resolution of the defendant’s liability to potentially thousands of claimants in one fell swoop.6 And, as MDL has begun to take center stage in both the federal courts and procedure scholarship,7 perhaps the most controversial issue is clarifying the proper role of the judge in achieving these mass settlements—in particular whether the MDL judge should review settlements, and reject them if they are unfair, as a judge in a class action would be obliged to do under Federal Rule of Civil Procedure 23(e).
(Footnotes omitted)
MDLs, of course, are not class actions.  There are no absentee members, and consolidation is supposed to only be for pretrial proceedings.  (In reality, there are often just a few “bellwether” trials held in front of the MDL court.)
Faced with the question of how to keep aggregate settlements fair without the protections of Rule 23(e), Professors Bradt & Rave suggest a novel solution:
the judge in an MDL ought to conceive of her role as acting in an “information forcing” capacity; that is, the judge should use the MDL process to force the disclosure of information to allows the parties in MDL cases to make informed decision about whether to accept proposed settlements. And often, the single most useful piece of information that the MDL judge can communicate to claimants will be a simple and frank assessment of the fairness of deal, even if that assessment will have no binding force.
Their argument is straightforward.  Aggregate litigation of any type faces a governance problem, because there are always a large number of claimants represented by a small number of lawyers.  As a result, no individual claimant will exert much control over the litigation.  Moreover, the lawyers will be tempted to cut corners, and may not reconcile the conflicts between their interests and their clients’.
Class actions resolve this dilemma through certification under Rule 23.  But MDL cases don’t have that kind of structural protection.  Instead, litigants remain dependent on their lawyers and the steering committee to watch out for their interest.
Some judges have addressed this concern by appointing themselves fiduciaries of the small claimants, and treating the MDL as a “quasi-class action.”  This role is controversial, and possibly in violation of the Rules Enabling Act.
But, the authors note, judges don’t need formal authority to register their opinion of MDL settlements.  And, based on the reactions of one set of litigants to a judge’s declaration that a settlement was “unfair” (instead of seeking mandamus, they re-negotiated to address the judge’s concerns), they believe MDL judges may simply need to be more aggressive in sharing their thoughts about the progress of the litigation.
It’s an intriguing idea, though not without its flaws.  As Bradt & Rave note, some judges may not have the bandwidth to monitor the MDLs in front of them this closely; and some may be biased toward any settlement so long as it clears their docket or provides some relief to many claimants.
The fact is, however, that aggregation by MDL is not going away.  And lawyers concerned with mass torts will be grappling with these issues for some time to come.  Professors Bradt & Rave have provided a concise, thought-provoking summary that is sure to have influence in this area.

Week in Review: Appellate Court Upholds Damages-Based Challenge to Predominance and More

Posted in Uncategorized

This week’s recap examines a recent appellate ruling that provides a nice roadmap for arguing a plaintiff’s theory of damages cannot satisfy Rule 23’s predominance requirement, as well as another district court’s efforts to parse out the contours of standing based on statutory violations post-Spokeo.

How an Individualized Damages Inquiry Can Preclude Certification:  It’s generally accepted that a damages theory that requires individualized proof as to the measure of class members’ damages does not necessarily doom a class under Rule 23(b)(3)’s predominance requirement.  However, where individualized inquiries are necessary simply to establish the fact of damages, then denying certification under Rule 23(b)(3) may be appropriate.  The U.S. Court of Appeals for the Third Circuit illustrated this point nicely in affirming the district court’s denial of class certification sought by students alleging their law school published misleading employment statistics about its graduates by including part-time and non-legal positions in its totals.  The court held that the plaintiffs’ damages theory—that the misleading statistics inflated the cost of tuition for all applicants—required individualized inquiries as to how these statistics impacted each class member’s decision-making process in choosing to pay tuition.

FACTA Claim Withstands Post-Spokeo Challenge to Plaintiff’s Standing:  We’re all watching to see how Spokeo’s intricate line-drawing regarding what types of statutory violations provide a basis for standing plays out on the ground.  A recent decision from the U.S. District Court for the Southern District of Florida held that a putative class representative who claimed she received a receipt from a retailer containing her credit card’s expiration date in violation of the Fair and Accurate Credit Transactions Act (“FACTA”) established standing sufficiently to withstand a motion to dismiss.  Citing Spokeo, the Court reasoned that FACTA creates a substantive legal right for consumers to receive receipts that protect their personal financial information by truncating their personal credit card numbers and expiration dates, and that the violation of this right constituted a concrete harm sufficient to give the plaintiff standing to pursue her claims.

Ninth Circuit Weighs in on Two Arbitration Provisions:  Last week was a big one for anyone following the status of class action waivers in arbitration agreements in the Ninth Circuit.  In a widely covered decision, the Ninth Circuit held that a class-action waiver in an employment agreement violated the employees’ right under the National Labor Relations Act “to engage in . . . concerted activities for . . . mutual aid or protection.”  Look for a detailed analysis of that ruling and its implications here soon.  In the meantime, defense practitioners can take solace in the Ninth Circuit’s ruling affirming the lower court’s enforcement of an arbitration agreement included in a direct-to-consumer genetic testing company’s online terms of service.  The Ninth Circuit rejected the putative class representatives’ arguments that the arbitration clause’s fee-shifting provision, forum-selection clause, and provision exempting intellectual property disputes were unconscionable.

Putative Class Member Frozen Out Based on HVAC Repair History:  The U.S. District Court for the Eastern District of Pennsylvania denied certification of a putative class representative’s claims against an HVAC manufacturer regarding an allegedly defective evaporator coil that leaked refrigerant during normal use.  The court held the named plaintiff was neither a typical nor adequate class representative because an HVAC servicer replaced several parts in addition to the evaporator coil when the plaintiff’s unit malfunctioned, and because the evaporator coil itself was discarded rather than returned, precluding further testing as to whether it was defective.  In addition, the court held that predominance was lacking because class members would have to present individualized proof to show what defect caused their HVAC unit to malfunction.