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Dos and Don’ts for Online Retailers Listing Terms and Conditions on Their Websites

Dos and Don’ts for Online Retailers Listing Terms and Conditions on Their Websites

A recent California federal decision states clear guidelines for consumer-focused companies’ online terms and conditions. In McKee v. Audible, Inc., the plaintiff signed up on his smartphone for a free one-month trial with Audible, an Amazon subsidiary offering audiobook subscription services. Thereafter, the plaintiff filed a putative class action against Audible and Amazon.com taking issue with Audible’s policy regarding unused credits. Defendants then filed a motion to compel arbitration. The motion to compel arbitration was granted as to Amazon, but denied as to Audible. The court found that while both companies’ arbitration agreements were valid and enforceable, Audible’s customer user agreements were not clearly displayed when consumers signed up for the service online and were blocked by certain images when using the Audible app. Therefore, customers were not given the requisite actual or constructive notices of the terms of service, such that they could mutually assent to the terms of service in order to create a valid and enforceable contract. The court offered the following guidelines for constructive notice in internet commerce: (1) “terms of use” will not be enforced where there is no evidence that the website user had notice of the agreement; (2) a user should be encouraged...

Supreme Court Rejects Class Action Plaintiffs’ Attempts to Circumvent Rule 23(f)

Supreme Court Rejects Class Action Plaintiffs’ Attempts to Circumvent Rule 23(f)

As previously discussed on this blog, the Supreme Court granted certiorari to address the question of whether federal courts of appeals have jurisdiction to review an order denying class certification after the named Plaintiffs voluntarily dismissed their claims with prejudice. In the June 12, 2017 decision in Microsoft Corp. v. Baker, the high court answered this question with a very resounding “no.” In Baker, a putative class of owners of Microsoft Corporation’s Xbox 360® video game console filed suit, alleging that the console suffered from a design defect that gouged game discs. Microsoft opposed Plaintiffs’ motion to certify the class. The District Court denied certification, citing comity considerations and relying on the class certification denial in a similar case. The Ninth Circuit denied the Plaintiffs’ 23(f) petition for interlocutory appeal. Plaintiffs then voluntarily dismissed the case with prejudice for the express purpose of obtaining immediate Ninth Circuit review of the District Court’s denial of class certification. Plaintiffs filed an appeal from the final judgment, challenging the denial of class certification, but not the order dismissing the case with prejudice. The Ninth Circuit held that it had jurisdiction under 28 U.S.C. § 1291 because the stipulated dismissal did not involve a...

Supreme Court to Decide Whether Class Action Plaintiffs Can Ring Their Own “Death Knell” Bell

Supreme Court to Decide Whether Class Action Plaintiffs Can Ring Their Own “Death Knell” Bell

The United States Supreme Court heard oral argument last month on the issue of whether a federal court of appeals has jurisdiction to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice. The case comes to the Supreme Court from the Ninth Circuit’s decision in Baker v. Microsoft Corp. In Baker, a putative class of owners of Microsoft Corporation’s (Microsoft) Xbox 360® video game console filed suit, alleging that the console suffered from a design defect that gouged game discs. Microsoft opposed Plaintiffs’ motion to certify the class. The District Court denied certification, citing comity considerations and relying on the class certification denial in a similar case. Thereafter, Plaintiffs filed a 23(f) petition for interlocutory appeal with the Ninth Circuit, which was denied. The Plaintiffs then voluntarily dismissed the case with prejudice, with the express purpose of obtaining immediate Ninth Circuit review of the District Court’s denial of class certification. Plaintiffs filed an appeal from the final judgment, challenging the denial of class certification. On appeal, Microsoft argued that the Ninth Circuit lacked jurisdiction because a voluntary dismissal with prejudice does not sufficiently affect the merits of the substantive claims to constitute...

New Jersey Appellate Division Holds Consumer Fraud Act Plaintiffs Can Recoup Attorneys’ Fees for Successfully Defending Against Counterclaims 0

New Jersey Appellate Division Holds Consumer Fraud Act Plaintiffs Can Recoup Attorneys’ Fees for Successfully Defending Against Counterclaims

In an issue of first impression, the New Jersey Appellate Division held in Garmeaux v. DNV Concepts, Inc. t/a The Bright Acre that a prevailing plaintiff in a Consumer Fraud Act (“CFA”) case is entitled to recover attorneys’ fees expended to defend an “inextricably intertwined” counterclaim. The to-be-published opinion also reaffirmed that New Jersey does not impose a strict proportionality requirement on attorney fee awards.

Third Circuit Holds That Challenges to the Validity of  a Contract Containing an Arbitration Provision Can Only Be Adjudicated by the Arbitrator 0

Third Circuit Holds That Challenges to the Validity of a Contract Containing an Arbitration Provision Can Only Be Adjudicated by the Arbitrator

In a recent precedential decision, South Jersey Sanitation Co., Inc. v. Applied Underwriters Captive Risk Assurance Co., Inc., the Third Circuit held that although arbitration agreements may be invalidated by generally applicable contract defenses, like fraud, in order for the court to decide the issue, the challenge “must focus exclusively on the arbitration provision, rather than on the contract as a whole.” “If the challenge encompasses the contract as a whole, the validity of that contract, like all other disputes arising under the contract, is a matter for the arbitrator to decide.”

Eighth Circuit Relies on Spokeo to Hold That Retention of Personal Information, Without More, Does Not Satisfy Article III’s Injury-in-Fact Requirement 0

Eighth Circuit Relies on Spokeo to Hold That Retention of Personal Information, Without More, Does Not Satisfy Article III’s Injury-in-Fact Requirement

The United States Supreme Court decision in Spokeo v. Robins, in which the Court considered whether a claim of statutory damages was sufficient to confer Article III standing, left much to be desired in terms of guidance for lower courts and litigants. Nonetheless, the Eighth Circuit’s recent refusal to revive a putative class action over Charter Communications Inc.’s allegedly indefinite retention of consumer data illuminated a way for defendants to trim claims of bare statutory violations, while clarifying how Spokeo should be applied.

New Jersey District Court Enforces Comprehensive Arbitration Clause Between Car Dealer and Consumer 0

New Jersey District Court Enforces Comprehensive Arbitration Clause Between Car Dealer and Consumer

Notwithstanding a recent trend of seemingly anti-arbitration decisions in the state courts, a New Jersey District Court recently dismissed a consumer fraud complaint that it found to be duplicative of a prior arbitration award. In 2009, the plaintiff purchased a vehicle, and then leased an additional car from the same dealer in 2010. Despite signing agreements to arbitrate with the dealer, the plaintiff filed a complaint in state court against the dealer, Metro Honda, which was dismissed on the ground that the arbitration agreements were enforceable and required her to arbitrate her dispute. Plaintiff filed a demand for arbitration, citing a variety of consumer fraud statutes. An arbitration award was entered denying all of the plaintiff’s claims, and she neither appealed nor moved to vacate or modify the award.

New Jersey Supreme Court Holds Denial of Right to Jury Trial Not Within Panoply of Sanctions in a Trial Court’s Arsenal 0

New Jersey Supreme Court Holds Denial of Right to Jury Trial Not Within Panoply of Sanctions in a Trial Court’s Arsenal

Recently, the New Jersey Supreme Court unanimously held that trial courts may not deprive civil litigants of their constitutionally protected right to a jury trial as a sanction for failure to comply with a procedural rule. In Williams v. American Auto Logistics, the pro se plaintiff’s complaint did not include a jury demand, but the defendant’s answer did. The defendant later sought to waive its jury demand, but the plaintiff withheld his consent, which was required by court rules. Notwithstanding the lack of consent, the trial judge granted the request to waive the jury as a sanction against the plaintiff for his failure to provide the pre-trial disclosures required by Rule 4:25-7. The Appellate Division affirmed the trial court’s waiving of the jury as a sanction for the plaintiff’s failure to comply with Rule 4:25-7.

Supreme Court in Spokeo Holds Plaintiffs Must Allege More Than a Bare Procedural Violation to Stand Up for Their Rights 0

Supreme Court in Spokeo Holds Plaintiffs Must Allege More Than a Bare Procedural Violation to Stand Up for Their Rights

After much anticipation, the United States Supreme Court issued its decision in Spokeo v. Robins, a case that many believed would finally establish a definitive ruling as to whether a federal statute which awards statutory damages to those impacted is sufficient to confer Article III standing. The question is particularly relevant in the class action context where class members could be awarded statutory damages in the absence of any actual damages. Unfortunately, although the Court considered the scope of the injury-in-fact requirement, the 6-2 decision still leaves the standing question open to interpretation by courts and by both plaintiffs and defendants.

Third Circuit Says Bananas to Forum Shoppers Seeking Second Bite at the Apple 0

Third Circuit Says Bananas to Forum Shoppers Seeking Second Bite at the Apple

In a recent precedential 2-1 decision, Chavez, et al. v. Dole Food Company, Inc., et al., the Third Circuit emphasized the importance of the “first filed” rule and affirmed the dismissal of a Delaware suit that was “materially identical” to one first brought in Louisiana. The Circuit Court reiterated that “[t]he ‘first filed’ rule is a well-established policy of the federal courts that in all cases of concurrent jurisdiction, the court which first has possession of the subject must decide it. This rule permits the district courts, in their discretion, to stay, transfer, or dismiss cases that are duplicates of those brought previously in other federal fora.”