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Gibbons Law Alert

Tagged: Motion for Summary Judgment

District Court Affirms United States Copyright Office’s Denial of Copyright Registration for AI-Generated Visual Art

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Posted in Class Action Defense / Privacy Class Actions

On October 2, 2023

Pursuant to the Copyright Act of 1976, “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device” are eligible for immediate copyright protection, provided certain requirements are met. Against this backdrop, Stephen Thaler applied for copyright registration with the United States Copyright Office (USCO) of a piece of visual art produced by a generative artificial intelligence system he created – the “Creativity Machine.” The USCO subsequently denied the application, reasoning that Thaler’s work “‘lack[ed] the human authorship necessary to support a copyright claim,’” as “copyright law only extends to works created by human beings.” After Thaler filed suit against the USCO, both parties moved for summary judgment on the sole issue of whether a work generated entirely by an artificial system should be eligible for copyright protection. On August 18, 2023, in Thaler v. Perlmutter the United States District Court for the District of Columbia granted the USCO’s motion for summary judgment, concluding that “human authorship is an essential part of a valid copyright claim.” The court rejected as contrary to the Copyright Act’s plain language Thaler’s contention that because he created the AI system that “autonomously” produced...

District of New Jersey Analyzes Article III Standing Requirement in the Class Action Context Under the Supreme Court’s Decision in TransUnion

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Posted in Class Action Defense / Privacy Class Actions

On November 10, 2022

In a post-TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021) victory for the class action defense bar, the District of New Jersey has further clarified the standing requirement for showing concrete harm. In Schultz v. Midland Credit Management., Inc., the Honorable Madeline Cox Arleo, U.S.D.J. granted defendant Midland Credit Management, Inc.’s (“Midland”) motion for summary judgment because the plaintiffs failed to establish concrete harm and thus lacked standing. In Schultz, the plaintiffs filed a putative class action against Midland alleging that the collection agency issued collection letters with false Internal Revenue Service (IRS) reporting language in violation of the Fair Debt Collection Practices Act (FDCPA). Midland sent letters to the plaintiffs stating: “We will report forgiveness of debt as required by IRS regulations. Reporting is not required every time a debt is canceled or settled, and might not be required in your case.” Pursuant to the Department of Treasury and IRS regulations, Midland only needed to report discharges of indebtedness greater than $600. As the plaintiffs’ debts were below the $600 threshold, the plaintiffs argued that the IRS reporting language was false, deceptive, and misleading in violation of the FDCPA because the language implied that “there could be ‘negative consequences with the [IRS]’ and ‘deliberately fail[ed] to disclose that such reporting is required under...

New Jersey Appellate Division Finds No Ascertainable Loss Where a Plaintiff Never Used a Product and Made Hypothetical Allegations of Loss

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Posted in Class Action Defense

On July 18, 2022

On May 31, 2022, the Appellate Division in Hoffman v. Pure Radiance, Inc. affirmed the trial court’s order granting summary judgment for a defendant and dismissing the plaintiff’s Consumer Fraud Act (CFA) claims because the plaintiff could not show that he suffered an ascertainable loss where he never used the product and his allegations were not supported by facts. In this putative class action, serial plaintiff Harold Hoffman sued defendant Pure Radiance, Inc., alleging that it falsely marketed a hair growth product. Specifically, Pure Radiance advertised that its product Re-Nourish could help an individual regrow “a thick, full head of hair, even after years of balding” and was “the world’s first and only hair loss solution that revives dead hair follicles” to regrow hair “in just 30 days.” The advertisement also showed a before-and-after picture of a man’s head, with the before picture showing a balding head and the after picture showing a full head of hair. Based on this advertisement, Hoffman purchased the product and then, after researching the product but before ever trying it himself, filed a proposed class action alleging, among other things, that the ad contained material misrepresentations and that he suffered an ascertainable loss by reason of his purchase of the product for $108.90. Significantly, Hoffman did not receive the...

Third Circuit Affirms That CFA and PLA Claims Can Coexist Independently

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Posted in Class Action Defense

On March 4, 2021

We recently blogged about a New Jersey Supreme Court decision in which the court held that claims under New Jersey’s Consumer Fraud Act (CFA) may be brought in the same action as claims under the Products Liability Act (PLA). In a follow-up to that case, the Third Circuit in Sun Chemical Corporation v. Fike Corporation and Suppression Systems, Inc. applied the New Jersey Supreme Court’s guidance on the interplay between the CFA and PLA. The Third Circuit affirmed in part and reversed in part a District Court judgment, finding that some of the claims were “absorbed by the PLA” and some could be brought independently pursuant to the CFA. Sun sued defendant Fike under the CFA for alleged misrepresentations related to Sun’s purchase of an explosion-suppression system. Sun alleged that Fike “misrepresented various aspects of the suppression system in its pre-purchase conversations” and that Fike was therefore liable for injuries and property damages suffered by Sun from an explosion that occurred at Sun’s facility. The District Court of New Jersey determined that Sun’s CFA claims were precluded and absorbed by the PLA because “Sun was seeking damages because various features of the suppression system failed and that failure caused personal injury to Sun’s employees.” The CFA, the District Court reasoned, could not be used to...

New Jersey Supreme Court Holds That CFA and PLA Claims Can Be Pleaded in the Same Action

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Posted in Class Action Defense

On October 21, 2020

In a recent decision answering a question certified to it by the Third Circuit, the New Jersey Supreme Court held that claims brought under New Jersey’s Consumer Fraud Act (CFA) may be brought in the same action as claims brought pursuant to the Products Liability Act (PLA), provided each claim is based on distinct conduct. In Sun Chemical Corporation v. Fike Corporation and Suppression Systems, Inc., the Court explained that it is the nature of the actions—not the resulting damages—that determines when claims may be brought under either the CFA or the PLA. The Court clarified that CFA claims may be brought in instances where a party alleges “express misrepresentations — deceptive, fraudulent, misleading, and other unconscionable commercial practices,” while PLA claims are reserved for claims based upon “product manufacturing, warning, or design defects.” The claims in Sun Chemical arose out of the plaintiff’s purchase of an explosion isolation and suppression system from the defendant to be used to “prevent and contain potential explosions” in the plaintiff’s new dust collection system. Plaintiff’s federal court complaint alleged that on the first day it used the suppression system, a fire broke out in the dust collection system and while the alarm in the suppression system was activated, it was inaudible. Plaintiff alleged that, as a result, several...

District of New Jersey Further Clarifies TCPA’s Reach For Text-Marketing Campaigns

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Posted in Class Action Defense

On April 2, 2020

In a recent decision, Chief Judge Freda L. Wolfson of the District of New Jersey further clarified the reach of the Telephone Consumer Protection Act (TCPA) as it relates to certain text marketing campaigns by businesses. In Eisenband v. Pine Belt Automotive d/b/a Pine Belt Nissan, Eisenband filed a putative class action lawsuit against an automotive dealership, Pine Belt, claiming that Pine Belt had violated the TCPA by using an Automated Telephone Dialing System (ATDS), otherwise known as an autodialer, to send a text message to his cell phone. Eisenband had telephoned Pine Belt in 2017 requesting information about the cost of leasing a specific vehicle and instructed Pine Belt to call him back on his cell phone with the requested pricing information. Pine Belt’s sales representative obtained the cost estimate data and returned the call, as requested, but Eisenband decided not to enter into a lease for the vehicle. A few days later, Pine Belt sent Eisenband a promotional text message concerning lease options on other vehicles, which prompted him, about one week later, to file a class action lawsuit seeking statutory damages of up to $1,500 per text message, for himself and for every person in the putative class who received such text messages. Discovery revealed that Pine Belt had sent the text...

Appellate Division Creates Split on Learned-Professionals Exception to New Jersey Consumer Fraud Act

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Posted in Class Action Defense

On December 16, 2019

In a recent opinion, Shaw v. Shand, the Appellate Division held that home inspectors are not “learned professionals” exempt from liability under the New Jersey Consumer Fraud Act (CFA). Instead, the court held that only professionals who have historically been recognized as “learned” based on the requirement of extensive learning or erudition are exempt under the CFA. In Shaw, the plaintiffs hired the defendant, a licensed home inspector, to examine a home for defects. The defendant wrote a report concluding that the property was built with professional workmanship, was made of quality materials, and would only require typical maintenance and upgrades. The plaintiffs purchased the property in reliance on that report. Soon after the plaintiffs made the purchase, however, the property’s front porch collapsed. Plaintiffs then learned that the roof, windows, and sliding glass doors all leaked and required complete replacement and that the driveway would need to be replaced as well. They then discovered that the house had a significant mold problem. At the time the Appellate Division decided Shaw, the plaintiffs had spent tens of thousands of dollars repairing those conditions, and expected to spend tens of thousands more. Defendant’s inspection of plaintiffs’ home was his first as a licensed inspector. As a licensed inspector, defendant was subject to the requirements set forth...

Third Circuit Establishes Framework for Determining Third-Party Based Liability under the TCPA

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Posted in Class Action Defense

On June 24, 2019

In a recent precedential decision, the Third Circuit held that an unsolicited fax seeking information does not constitute an unlawful advertisement under the Telephone Consumer Protection Act (TCPA). Now, to “establish third-party based liability under the TCPA, a plaintiff must show that the fax: (1) sought to promote or enhance the quality or quantity of a product or services being sold commercially; (2) was reasonably calculated to increase the profits of the sender; and (3) directly or indirectly encouraged the recipient to influence the purchasing decisions of a third party.” In Robert W. Mauthe, M.D., P.C. v. Optum, Inc., the plaintiff claimed that it received unsolicited faxes from Defendants in violation of the TCPA. Defendants maintain a national database of healthcare providers, containing providers’ contact information, demographics, specialties, education, and related data. Defendants market, sell, and license the database typically to healthcare, insurance, and pharmaceutical companies, who use it to update their provider directories, identify potential providers to fill gaps in their network of providers, and validate information when processing insurance claims. To maintain the accuracy of the database, Defendants send unsolicited faxes to healthcare providers listed in the database, requesting them to respond and correct any outdated or inaccurate information. These faxes also advised recipients that “[t]here is no cost to you to participate...

Third Circuit Clarifies Scope of Liability for Insurance Companies Under the Consumer Fraud Act

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Posted in Class Action Defense

On March 5, 2019

In a precedential decision interpreting the New Jersey Consumer Fraud Act (CFA), the Third Circuit determined that an automobile insurance carrier may be liable under the CFA for deceptively inducing one of its customers into releasing claims against another party represented by the carrier. In Alpizar-Fallas v. Favero, Defendant’s car struck Plaintiff’s vehicle, causing serious injury and damages. Both parties were insured by Defendant’s insurance company, Progressive. A Progressive claims adjuster arrived at Plaintiff’s home and presented her with a document that he claimed required her signature. The adjuster represented that by signing the document Plaintiff would expedite the claim process. Plaintiff signed the document relying on the adjuster’s statements. The document, however, was a “comprehensive general release of any and all claims” against defendant driver, also insured by Progressive. Plaintiff was not advised by the adjuster to seek counsel. Plaintiff subsequently brought a putative class action against Progressive for violation of the CFA. On Progressive’s motion, the district court dismissed Plaintiff’s claims, reasoning that the CFA did not apply to “an insurance company’s refusal to pay benefits” but only to the “sale or marketing” of the policies. On appeal, the Third Circuit reversed, holding that the district court mischaracterized Plaintiff’s claim as one for denial of her benefits. Reaffirming its 2007 decision in Weiss...

Juridical Link Doctrine Does Not Relax Article III Standing Requirements in Class Actions

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Posted in Class Action Defense

On June 12, 2014

In 6803 Boulevard East, LLC v. DIRECTV, LLC, the District of New Jersey rejected the notion that “the juridical link doctrine” provided a limited exception to Article III standing requirements in a class action against several related defendants and granted DirecTech’s motion for summary judgment because the named plaintiffs were not injured by DirecTech’s actions.

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