The Southern District of California recently declined to certify a class based on plaintiffs’ failure to offer class wide proof of deception and materiality.  In Gross et al. v. Vilore Foods Company, Inc., plaintiffs alleged that Kern fruit juice products were deceptively labeled as “100% Natural” or made with whole fruit when the drinks in fact contained artificial ingredients.  Plaintiffs brought claims under various California laws, including the UCL, CLRA, and FAL.  To certify a class, plaintiffs were required to offer common proof both that the challenged representations were deceptive or misleading to a reasonable consumer; and that the challenged representations were material, meaning a reasonable person would attach importance to the representations that Kern’s fruit juice is “100% natural” or made with whole fruit.  The court held that plaintiffs satisfied neither burden.

First, as to deception, the only evidence Plaintiffs cited was their expert’s report.  Plaintiffs’ expert purported to assess the importance consumers placed on certain product attributes, and how claims such as “artificially flavored” affected their willingness to pay for a product.  Plaintiffs’ expert concluded that consumers were willing to pay approximately 29% more for a Kern product that did not disclose its use of artificial flavors, and approximately 30% less for a product disclosing that it contained artificial flavors.  The court found this evidence insufficient because consumers’ willingness to pay more or less for a product said nothing about whether the labels at issue would lead consumers to believe that the products did not contain artificial flavors, or contained only natural flavors.  As a result, the court held that Plaintiffs’ expert’s opinion could not constitute common proof of deception.

Last Friday, the National Telecommunications and Information Administration (“NTIA”) took a major step in furtherance of the Biden Administration’s goal of connecting all Americans to broadband by releasing its widely anticipated Notice of Funding Opportunity (“NOFO”) for the landmark $42.5 billion Broadband Equity, Access, and Deployment (“BEAD”) Program, along with NOFOs for two smaller programs. 

In the early hours of Friday, 13 May, the European Parliament and the Council of the EU reached provisional political agreement on a new framework EU cybersecurity law, known as “NIS2”. This new law, which will replace the existing NIS Directive (which was agreed around the same time as GDPR, see here) aims to strengthen EU-wide cybersecurity protection across a broader range of sectors, including the pharmaceutical sector, medical device manufacturing, and the food sector.

A recent Fifth Circuit decision continues the trend of courts rejecting putative class and collective actions where absent class members are subject to arbitration agreements.

Exotic dancers sued A&D Interests, Inc. (doing business as the “Heartbreakers Gentlemen’s Club”) in a putative Fair Labor Standards Act collective action for allegedly misclassifying the club’s dancers as independent

A consumer purchases a product and later finds out that the product was contaminated with a toxic substance.  Was the consumer injured?  Without knowing more, the answer is “no”—at least for the purposes of establishing standing in the Third Circuit.  In Koronthaly v. L’Oreal USA, Inc., 374 F. App’x 257, 259 (3d Cir. 2010), the court held that mere exposure to lead in lipstick was not sufficient to support standing.  Years later, in In re Johnson & Johnson Talcum Powder Prods. Mktg., Sales Practice & Liability Litigation, 903 F.3d 278, 289, 290 n. 15 (3d Cir. 2018), the court held that mere exposure to a carcinogen in talcum powder is likewise not enough to establish standing.

Following this trend, District Judge Chesler in the District of New Jersey recently dismissed a case where plaintiffs alleged they purchased baby food contaminated with heavy metals.  See Kimca v. Sprout Foods, Inc. d/b/a Sprout Organic Foods, 2022 WL 1213488 (D.N.J. Apr. 25, 2022)

On May 10, 2022, Prince Charles announced in the Queen’s Speech that the UK Government’s proposed Online Safety Bill (the “OSB”) will proceed through Parliament. The OSB is currently at committee stage in the House of Commons. Since it was first announced in December 2020, the OSB has been the subject of intense debate and scrutiny on the balance it seeks to strike between online safety and protecting children on the one hand, and freedom of expression and privacy on the other.

A California federal district court recently granted in part the dismissal of certain federal and state privacy claims, including a California Consumer Privacy Act (“CCPA”) claim, in Hayden v. The Retail Equation, Inc., No. 8:20-cv-01203 (C.D. Cal.).  Plaintiffs in Hayden alleged that twelve retailers unlawfully shared customer data with a computer software firm, The Retail Equation (“TRE”), which in turn created “customer risk scores” to identify potentially fraudulent customer returns.  This customer risk score was alleged to include information about the customers’ purchase histories, information gleaned from social media, as well as personal information, including name, government identification card or passport information, address, sex, race, and date of birth.  TRE and the retailers sought dismissal of: (1) the Fair Credit Reporting Act (“FCRA”) claim; (2) the CCPA claim; (3) the California invasion of privacy claim; (4) the Unfair Competition Law (“UCL”) claim; and (5) unjust enrichment claim.  The Court dismissed all but the invasion of privacy claim.

Congress launched the Conference Committee on Bipartisan Innovation and Competition Legislation last week with a four-hour meeting featuring remarks by nearly one-hundred committee chairs and members from both chambers of Congress. Chaired by Senator Maria Cantwell (D-WA), the Conference Committee’s objective is to reconcile differences between the United States Innovation and Competition Act (“USICA”), which passed the Senate by a bipartisan vote of 68–32 in June 2021, and the America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act (“America COMPETES Act”), which passed the House by a partisan vote of 222–210 in February 2022.

The kick-off meeting suggested that this objective is attainable, but by no means guaranteed.

On display was broad consensus that the United States is not doing enough to spur innovation and remain competitive around the world, and that legislation is needed in support of those goals.  Chair Cantwell opened the conference by recognizing that this is a “historic day” with a supply chain crisis and that this is a “Sputnik moment.”  A bicameral and bipartisan chorus, including Senate Commerce Committee Ranking Member Roger Wicker (R-MS), House Science Committee Chair Eddie Bernie Johnson (D-TX), and House Science Committee Ranking Member Frank Lucas (R-OK) echoed her optimism and urgency.

Members also generally agreed on several key components in the bills.  Members of both chambers and both sides of the aisle recognized the importance of anchoring supply chains of critical products including semiconductors and pharmaceutical drugs in the United States.  A bipartisan group expressed support for the $52 billion in funding for semiconductor incentives that is included in both the USICA and America COMPETES Act.  Several Democrats and Republicans also noted that they are working together on an additional tax provision, which is currently not in either bill, to encourage semiconductor design and manufacturing in the United States.  Members also agreed on the need to push back against anti-competitive conduct by China such as cyberattacks and intellectual property theft, and to invest in science, technology, education, and mathematics (STEM) education to expand and improve the U.S. workforce.

Most observers expect the Republicans to take control of the House of Representatives, and possibly the Senate, in the upcoming midterm elections.  While both Democrats and Republicans are likely to keep their attention on the actions of so-called “Big Tech,” this political shift should bring a renewed focus on amending Section 230 of the Communications Decency Act.  Section 230, which provides platforms with immunity from liability for third-party content and content-moderation decisions, has been a target for lawmakers seeking to limit the power of large technology companies.  Republicans have generally focused more on modifying Section 230, versus Democrats, who have spent more energy on using antitrust legislation to regulate those platforms.

Looking ahead, now is the time to consider policies and plans in light of a Republican-controlled Congress taking on potentially divisive issues through the lens of Section 230.

Republicans, Conservatives, and Section 230

Two trends will guide Republicans’ approach to Section 230 in the next Congress.  First, as in many areas, Republicans will seek to address what they see as “woke capitalism.”  New York Times columnist Ross Douthat coined the term in 2018 and defined it as a “certain kind of virtue-signaling on progressive social causes, a certain degree of performative wokeness, [that] is offered to liberalism and the activist left pre-emptively, in hopes that having corporate America take their side in the culture wars will blunt efforts to tax or regulate our new monopolies too heavily.”

Republicans are already planning a variety of legislative and oversight maneuvers meant to address corporations taking certain positions on cultural issues.  Technology companies may very well be at the top of Republicans’ list.

Second, conservatives increasingly view liberals as having abandoned their commitment to free speech.  For example, Republicans view the Hunter Biden laptop controversy, campus speech codes, and social media content moderation as part of a broader effort to silence and marginalize conservatives.  Simply put, conservatives believe that they are now the defenders of free speech.