LOS ANGELES (Legal Newsline) - A panel of litigation experts on Sept. 13 held a discussion via Zoom on trends they see developing in the filing of class action lawsuits, most commonly litigation brought by large groups of plaintiffs against companies or organizations for consumer product defect, misleading advertising claims, privacy violations and insurance actions.
“Chemicals are also finding their way into class action suits,” Bethany Lukitsch, Los Angeles-based host of the program with the BakerHostetler law firm’s Class Action Defense Team told viewers.
The program was billed as a “Fall Recap Update.”
Lukitsch said PFAS chemicals used to create non-stick surfaces, called “forever chemicals” because they can get in drinking water systems and enter the body's bloodstream, are more often today the subject of class action suits. Other chemicals commonly litigated include benzene used in lubricants, dyes and detergent.
Lukitsch called a recent flurry of PFAS lawsuits a “blitz.”
“PFAS is in all sorts of consumer products,” she said. “These chemicals are a target (for litigation) in 2022 from the cosmetics to the food industry. Suits are for economic damages, in other words I would not have bought the product if I’d known (it contained such chemicals).”
Lukitsch added that many pending court cases have not yet been decided. Additional suits have been filed regarding aerosols (sunscreen, deodorants and shampoo).
“Judges have said the plaintiffs need more than conjecture (and potential increased risk) to win such cases," she said.
Climate change litigation will also be a more frequent occurrence in the future, she said, adding that the Federal Trade Comission (FTC) is in the process of updating a “Green Guide,” to help marketers avoid making environmental claims that mislead consumers.
In one case, Corpvz v, Bayer Corp., plaintiffs claim that a One a Day Natural Fruit Bite (multivitamin) product had wrongly labeled that the product contained “natural synthetic ingredients.”
Companies also face potential litigation over accusations of wiretapping, which in California is a violation of the state Invasion of Privacy Act (CIPA), making it unlawful to secretly listen in on conversations. In May, the 9th Circuit Court decided the law does apply to the internet.
“We’re seeing s flurry of suits applying to replay technology and (web) chat functions,” Lukitsch said. “It deals with complied consent and whether the participation of a third party vendor is eavesdropping.”
Panelist Julie Singer Brady said an emerging target of plaintiffs are companies that make diet supplements such as melatonin, less regulated by the Food & Drug Administration (FDA) than a prescription or over-the-counter drug would be.
“Companies are being accused of overdosing, misleading consumers,” Brady said.
The accusations in addition to false labeling also include breaches of warranty and unjust enrichment.
In the case Lopez v. Zarbees Inc. in the Northern District of California, the company is accused of providing supplements with twice the amount of melatonin shown on the label, allegedly creating side effects and putting child consumers at risk.
A similar case of false labeling has been filed against Walmart.
“The good news for the defense is that cases have found that a reasonable consumer would not be deceived,” Brady said.
An example she said is a chocolate health drink. In a case at the Northern District of California, Norti v. Nestle Healthcare Nutrition Inc., the plaintiffs argue false labeling tricked consumers into believing the drink can help treat diabetes. A court determined that plaintiffs had failed to show that reasonable consumers were likely to be deceived by the product labels.
“People with diabetes had to know better,” Brady said.
Regarding deceptive pricing cases, Brady said most states prohibit deceptive pricing.
“Such cases continue, a slew of them,” Brady said. “Two are against Target and Walmart, accused of bait-and-switch pricing and fictitious discounts.”
The accusations in those cases maintain that the companies engaged in shelf pricing to misrepresent the amount a customer will have to pay.
In a case in the 9th Circuit Appeals Court, TransUnion v. Ramirez, the plaintiff filed a class action in 2012 accusing the consumer credit reporting company of three violations of the Fair Credit Reporting Act. Plaintiffs in the class suit, 8,185 of them, alleged that the company sold credit reports for use by entities requesting information on the creditworthiness of individual consumers. Using third party software, the company introduced in 2002 an Office of Foreign Assets Control (OFAC) name alert, comparing the consumer credit names against a Treasury Department OFAC terrorist list.
The plaintiffs alleged that TransUnion had failed to use appropriate procedures to ensure the accuracy of their credit files.
Panelist Karl Fauter said the 8,185 plaintiffs had Article III standing (a plaintiff must have suffered tangible harm), while 6,333 class members did not qualify. A district court decided on preliminary approval of the class settlement.
“The take-away from this case is whether a plaintiff who alleged injury has a close relationship to harm,” Fauter said. “The risk of future harm is insufficient.”
He said lots of actions are being filed against banks when a plaintiff can sue for identity theft alleging harm.
“It would not surprise me to see more suits against consumer banking in 2023,” Fauter said. “I think we’ll see an increase in class actions against financial institutions over the next 18 months.”
Suits are being filed against auto insurance companies where class action plaintiffs contend insurers failed to pay for a replacement vehicle after an accident or failed to properly value a vehicle.
In a 2020, case Lewis v. Government Employees Insurance Co., the plaintiff contended that GEICO underpaid a claim settlement. The case involved a woman pedestrian who was hit by a car, suffered injuries, applied for insurance coverage through her parent’s policy but was denied because the defendant determined she was not a resident of her parents’ household. The defendant had the case moved to a federal court.
Panelist Paul Karlsgodt said the litigation horizon will center on privacy and data breech issues among retail and financial companies, but particularly data breech issues in the healthcare industry.
“Among the trends the big one is identity theft,” he said. “Lately more (such) suits are surviving motions to dismiss. The plaintiffs claiming fraud have become more creative in developing their theories of injury.”
Karlsgodt said in the past suits were launched over issues of debit cards. The new trend is among crypto currency attacks through ransomware and phishing attacks (malwear that denies a person or organization access to their computer files).
Karlsgodt predicted a growing trend of suits against hospital systems using Facebook Pixel (collects data for target marketing and advertising on a company website).
BakerHostetler will hold an end-of-year review of class action trends in December.