Facebook Facial Recognition Tag Suggestions May Violate Privacy Law

facebook privacyFacebook must face a lawsuit against it that claims its photo-tagging system using facial recognition software to identifying users violates Illinois’s Biometric Information Privacy Act.

Chicago residents brought the lawsuit, which was transferred to a Northern California District Court at Facebook’s request, claiming Facebook collected biometric identifiers, such as faceprints, without consent and in violation of the Illinois law.

Facebook attempts to dismiss lawsuit

Facebook filed a motion for summary judgement and a motion to dismiss the case, arguing that its terms and conditions included a choice-of-law provision stipulating that claims against Facebook must be litigated in California under its law, and that the plaintiffs failed to state a claim under the Biometric Information Privacy Act (BIPA).

The court agreed with Facebook, finding that the plaintiffs assented to the user agreements when they signed up for Facebook, and were provided notice of the updated user agreement containing the California choice-of-law provision.

However, in determining whether the California choice-of-law clause was enforceable, the court applied an enforceability test looking to whether California law on the issue is contrary to a fundamental policy and if Illinois had a “materially greater interest in the determination of the matter.

Illinois privacy law applies

The court, answering both questions in the affirmative, wrote that the BIPA “manifests Illinois’ substantial policy of protecting its citizens’ right to privacy in their personal biometric data.”

The court wrote that the BIPA is premised on concerns about the use of biologically unique identifiers that once compromised, “the individual has no recourse” and is at a heightened risk for identity theft.

The BIPA protects the privacy of individuals by requiring written policies on biometric data retention and informed consent before obtaining or disclosing personal biometric information.  The act also provides a private right of action for anyone whose privacy has been compromised.

The court wrote that Facebook attempted to “downplay the conflict as merely the loss of a claim,” but rejected the argument, writing that if its motion were granted, it would write the Illinois policy of protecting its citizen’s privacy interest “out of existence.”

Finding that Illinois would suffer a “complete negation of its biometric privacy protections for its citizens if California law were applied,” the court declined to enforce the California choice-of-law provision, denying Facebook’s motion for summary judgement.

User photos are biometric information

The court also denied Facebook’s motion to dismiss, which argued that the BIPA excludes photographs and any information derived from the photographs in its definitions of “biometric identifiers” and “biometric information.”

The court found the argument “unpersuasive” and refused to read the statute to exclude images and photographs from its scope.  The court wrote that such an exclusion would “substantially undercut” the BIPA because the analysis of biometric identifiers is usually based on an image or photograph.

The court allowed the Facebook users to proceed finding that they had a plausible claim that Facebook used its facial recognition technology without their consent, but no ruling was made on whether the technology violated BIPA.

 

The case is In re Facebook Biometric Information Privacy Litigation, Case number 3:15-cv-03747-JD, in the United States District Court Northern District of California.

 

Supreme Court Declines Review of $25M Tobacco Case Likened to Criminal Manslaughter

Philip morris oregonThe United States Supreme Court upheld a $25 million punitive damages award against tobacco giant Philip Morris USA Inc. for the family of a Oregon woman who died from lung cancer that had metastasized to a brain tumor.

The high court declined to hear Philip Morris’ appeal of an Oregon Appeals Court ruling that upheld the $25M punitive damages award reduced from a $150M jury verdict after the Oregon Supreme Court ordered a new trial solely on the issue of punitive damages.

Low-tar cigarettes marketed as safe alternative

Michelle Schwarz survivors brought the lawsuit against Philip Morris after her death in 1999.  Schwarz smoked since the age of 18 and switched to Philip Morris’s Merit Brand cigarettes which were fraudulently marketed as low tar cigarettes as a safe alternative.

The jury found Philip Morris liable for negligence, product liability, and fraud and apportioned Schwarz 49 percent of the fault, awarding $168,000 in compensatory damages and $150 million in punitive damages.

Philip Morris appealed the verdict to the Oregon Supreme Court asserting that the trial court had not properly instructed the jury regarding punitive damages.  The court ordered a new trial and limited the question on what the correct amount of punitive damages should be.

Using the binding verdicts from the first jury trial, the jury determined a punitive damages amount considering the courts emphasis that the evidence demonstrated that the tobacco giant acted with “reckless and outrageous indifference to a highly unreasonable risk of harm and …with a conscious indifference to the health, safety, and welfare of others.”

Considering what the court noted as concerns about the “degree of reprehensibility of Philip Morris’s conduct,” and the evidence regarding the tobacco company’s worth of $50 billion, the retrial jury awarded punitive damages of $25 million.

‘Extraordinarily reprehensible’ conduct compared to manslaughter

Philip Morris appealed the verdict again, arguing the award was grossly excessive in violation of the Due Process Clause.  The state’s Supreme Court rejected the argument, concluding that Philip Morris’s conduct, which it described as a “concerted decades-long effort to deceive smokers and the public about the dangers of smoking” its low-tar cigarettes, was “extraordinarily reprehensible.”

In affirming the verdict, the court referenced the state appeals court ruling that compared Philip Morris’s conduct to criminal homicide, writing that the fraudulent conduct the company engaged in resulting in Schwarz’s death could constitute first-degree manslaughter.

Supreme Court declines review

In its petition to review to the United States Supreme Court, Philip Morris asserted that Oregon’s partial-retrial of only the punitive damage issue conflicted with the high court’s rulings that partial-retrials are only allowed in unusual circumstances because they may cause “serious due process concerns.”

Philip Morris asserted that the Oregon courts were required to order a new trial on all issues, not just that of punitive damages.

The tobacco company also argued that the Supreme Court could use the case to settle state and federal court conflicts on the permissibility of partial retrials in punitive damage cases.

The company further urged the courts review of the case, claiming its implications “transcend punitive damages” and “will provide valuable guidance to…courts across the country” in complex litigation and “mass tort litigation that has proliferated in recent decades.”

Schwarz response brief pointed out that the cases cited by Philip Morris did not apply to decisions to remand for full or partial retrial.  The response further argued that issues for retrial are recognized as a matter for the court’s discretion and does not conflict with the due process clause.

The Supreme Court apparently did not find the case to be of transcending importance and declined to review, upholding the $25 million punitive damage award.

 

The case is Philip Morris USA Inc. v. Paul Scott Schwarz, case no. 15-1013, in the United States Supreme Court.

7th Circuit affirms $10M Unilever Hair Loss Settlement Against Class Member Appeal

burnt hair 2The Seventh Circuit Court of Appeals has affirmed a $10 million class-action settlement against Unilever United States, Inc. (Unilever USA) for its Suave Keratin Infusion 30 Day Smoothing Kit (Smoothing Kit) that melted consumers’ hair causing it to fall out and burn the scalp.

A class member objected to the settlement on many grounds, which the court dismissed, affirming the district court’s proper approval of the settlement agreement.

Three class action lawsuits were filed and consolidated into one in the Northern District of Illinois against Unilever USA in August 2012.  The class members purchased the Smoothing Kit, which was a hair product marketed to smooth hair and coat it with keratin.  An active ingredient in the product, thioglycolic acid, is extremely corrosive and when left in the hair, it can melt the hair and burn the scalp.

Settlement reached

After a year and a half of mediation, the parties reached a settlement agreement in February 2014 and an order granting approval was entered in July 2014.  The settlement provided for a reimbursement fund of $250,000 and an Injury fund of $10 million.

The reimbursement fund provided compensation to any class member with a one-time payment of $10 for the cost of purchasing the smoothing kit.

The injury fund was designed to compensate members under three benefits;

  • Benefit A provided a maximum of $40 for class members who incurred expenses for hair treatment but lack receipts;
  • Benefit B provides $800 for claimants who have receipts for hairdressers or medical bills; and
  • Benefit C provides up to $25,000 for claimants who suffered significant bodily injury.  Class counsel fees remained entirely separate from the $10,250,000 for class compensation

Class member appeals agreement

Class member Tina Martin objected to the settlement agreement and appealed the final order.  The Court of Appeals dismissed all 11 of Martin’s objections, writing many of the issues she asserted overlapped and conflicted with one another.

Martin claimed that the district court relied on inaccurate data, arguing that the settlement amount may be inadequate because the class size is probably larger than the parties assumed.  She also claimed the court did not know enough information about the number of claimants who suffered serious injuries because only 500 injury clams had been filed.

The court wrote that Martin did “not seem to be sure about what point she is making” as she asserted conflicting arguments.  Nevertheless, the court determined that district court had sufficient information to order the settlement agreement and that the amount was in a reasonable range.

In dismissing Martin’s claim that the certification of the class under Illinois law was unfair, the court found that certification in this class under one state’s law was appropriate.

The court further pointed to the terms of the settlement agreement for justification; the settlement agreement contained a choice-of-law clause, specifying the use of the law of Illinois.

Court affirms settlement agreement

Against Martin’s claim that the settlement failed to provide injunctive relief preventing Unilever from marketing or selling the Smoothing Kits, the court wrote that the agreement already carved out retailers still selling the product, negating the need for such an injunction.

Martin further objected to the procedures the court followed in approving the class counsel’s fees, claiming that her due process and procedural rights were violated because she was prevented from commenting on the counsel fee petition.

The court found no error by the district court deferring its consideration of the counsel fee motion until it had approved the settlement agreement.  Further, the attorney’s fee petition was not submitted until two weeks before the deadline for objections, which the court wrote was “plenty of time for input.”

The court also noted, “Martin herself filed an objection” to the petition.  In support of the district court decision, the court wrote that this type of provision that keeps the attorney’s fees separate from funds for compensation and defers the final award until the agreement is approved, is “to be encouraged.”

The court further dismissed Martin’s other claims for lack of standing and failing to provide evidence to support her claim.  Concerning her additional arguments against the agreement, the court “[saw] no need to address them separately” and affirmed the settlement agreement reached in the case.

 

The case is Sidney Reid et al. v. Unilever United States Inc. et al., case number 14‐3009 in the U.S. Court of Appeals for the Seventh Circuit.

Florida Supreme Court Rules Smoker with Lung Cancer Entitled to Punitive Damage Claims

engle punitive damages pic 2

The decision is a victory for “Engle progeny” plaintiffs, who were allowed to file individual lawsuits against the tobacco companies.

The Florida Supreme Court has allowed a widow of a man who died from lung cancer to seek punitive damages on strict liability and negligence claims in her Engle progeny wrongful death lawsuit against R.J. Reynolds Tobacco Co.

The decision resolved an appellate court split on the issue, now allowing individual members of the Engle class action to seek punitive damages on all claims properly raised.

The decision is a victory for “Engle progeny” plaintiffs, who were allowed to file individual lawsuits against the tobacco companies when the Florida Supreme Court decertified the original Engle class and overturned the $145 billion verdict.

The court permitted individual members to use the jury findings from the class action ruling, maintaining a res judicata effect for individual member’s cases.

Progeny plaintiff damage claims

Lucille Soffer brought her individual wrongful death action against R.J. Reynolds asserting the four causes of action pled in the Engle class action of negligence, strict liability, fraud by concealment, and conspiracy to commit fraud.  Soffer amended her complaint to add a demand for punitive damages.

During the jury charge conference, RJ Reynolds asserted, and the trial court agreed, that the jury should be instructed that only the fraudulent concealment and conspiracy counts could be considered for punitive damages based on the procedural posture of the Engle case.

In the Engle class action, plaintiffs initially sought punitive damages on the fraud charges, and later asked for leave to amend the complaint to include punitive damages for negligence and strict liability.  The court denied the motion as untimely.

The trial jury did not award punitive damages based on its jury instructions, but a judgment of $2 million was entered for Soffer.  She appealed, asserting the court erred in prohibiting punitive damages on the negligence and strict liability counts.

The First District Appeals Court upheld the trial court decision, finding that Engle progeny plaintiffs “wear the same shoes” as the Engle plaintiffs and could not bring other claims and remedies that had not been timely asserted as part of the Engle class action.

The Second District heard a similar Engle progeny case, but it determined that while Engle progeny plaintiffs benefit by the res judicata effect of the Engle class action findings, they are not precluded from seeking a remedy barred as untimely for “mere procedural deficiencies.”

Florida Supreme Court resolves District Court split

Soffer appealed the First District Court’s ruling, and the Florida Supreme Court found in her favor.  The Court ruled that Soffer, and all Engle progeny plaintiffs may seek punitive damages on all properly pled counts in individual actions.

The court stated that the trial court’s denial of the motion to amend in the Engle class action was not based on the merits of the request, but was based on the procedural posture at the time since the request was untimely.

Further, the procedural posture changed once the court vacated the entire punitive damages award of $145 billion, the related findings on punitive damages were vacated along with it, entitling each progeny plaintiff to punitive damages in his individual lawsuit.

The court also stated that a demand for punitive damages is not a “separate and distinct cause of action,” rather it is dependent on the existence of an underlying claim.

Progeny entitled to punitive damage claim

Finally, the court reasoned that since the burden to establish entitlement to punitive damages is on the plaintiff to prove by clear and convincing evidence that the defendant’s conduct causing the damage was either intentional or grossly negligent, claiming punitive damages does not vary depending on the underlying legal theory of the claims.

The ourt ruled that its decision on the res judicata effect of findings addressed in Engle have no application to claims for punitive damages sought by Engle progeny plaintiffs, and that there was “simply no basis to conclude that the procedural posture of Engle would bar an Engle progeny plaintiff.

The case is Lucille Ruth Soffer v. R.J. Reynolds Tobacco Company, case no. SC13-139, in the Supreme Court of Florida.

Taxotere Chemotherapy Drug Maker Failed To Disclose Risk of Permanent Hair Loss

taxotere hair loss

Sanofi-Aventis used misleading marketing to indicate that temporary hair loss could occur, but would grow back.

Cancer survivors around the country are filing lawsuits against drug manufacturer Sanofi-Aventis for its failure to warn about the risk of permanent hair loss with the use of its chemotherapy drug Taxotere.

The drug, commonly referred to as docetaxel, is a part of a family of drugs referred to as taxanes, which are used as chemotherapy agents that prevent cancer cells from growing and dividing.  Taxanes are used for the treatment of breast cancer, lung cancer, advanced stomach cancer, head and neck cancer, and metastatic prostate cancer.  There are several brands of taxanes that exist, including several generic forms.

The Taxotere lawsuits claim Sanofi-Aventis failed to warn patients and physicians of the increased risks of permanent hair loss, or permanent alopecia, even after treatment ends.  Sanofi-Aventis designed Taxotere to have an increased potency as compared to other taxanes, claiming that it was novel and merited for patent protection.  Because of its market exclusivity, Sanofi-Aventis was able to restrict competition and earn billions of dollars in revenues.

Marketed as superior to other chemo drugs

The manufacturer marketed Taxotere as superior to other treatments because of its increased potency.  The increased potency leads to an increased toxicity that is directly related to the increased adverse side effects, including permanent hair loss.

Although alopecia is a common side effect related to chemotherapy, Sanofi-Aventis used misleading marketing to indicate that temporary hair loss could occur, but would grow back.

One lawsuit alleges that Sanofi-Aventis knew of the increased risk of permanent hair loss because it disclosed the risks to patients and regulatory agencies in other countries, but failed to disclose the information in the United States.

Manufacturer aware of risk

Sanofi-Aventis further failed to disclose the results of additional studies it conducted that provided new facts about the risks associated with Taxotere use.

Research findings published by the National Cancer Research Institute found that 10-15 percent of patients who received Taxotere suffered from permanent hair loss.  Another study found that severe alopecia – an emotionally distressing side effect among female patients – was a reported complication of treatment with the drug.

The lawsuit states the Taxotere manufacturers “prayed on one of the most vulnerable group of individual’s at the most difficult time in their lives” and earned billions of dollars of revenues at the expense of “unwary cancer victims simply hoping to survive their condition and return to a normal life.”

Safer options available

The lawsuits state that if Sanofi-Aventis had properly warned patients and physicians of the increased risk of permanent alopecia by using Taxotere during chemotherapy, they would have been prescribed a different chemotherapy drug called Taxol, which is more effective than Taxotere, and does not result in permanent hair loss.

At this time, there has not been a recall of Taxotere, however the U.S. Food and Drug Administration acknowledged that Taxotere can result in permanent hair loss and required that the manufacturer place a warning on the label in December 2015.

Individual lawsuits have been filed, but there has not been any large group settlements involving Taxotere.  It is likely that the individual lawsuits will be combined in a multi-district litigation (MDL) case.

Grounds for filing a Taxotere permanent alopecia lawsuit include;

  • Failure to warn because Sanofi-Aventis failed to label its product or warn patients or physicians about the risks of permanent alopecia.
  • Fraudulent misrepresentation because Taxotere manufacturers falsely represented that it rigorously tested the drug and determined it was safe for its intended use.
  • Misleading marketing because Sanofi-Aventis was aware that Taxotere increased the risk of permanent alopecia, but made false and misleading statements that it was a superior drug as compared to other similar drugs, which do not cause permanent hair loss.
  • Concealed knowledge of hair loss risk because Sanofi-Aventis did not disclose the information they had on the drugs risk for permanent hair loss in the United States, although they included the warnings to patients and regulatory agencies in other countries.

 

Wisconsin Supreme Court Rules for Employees in Donning & Doffing Class Action

Donning

The Wisconsin Supreme Court affirmed workers who spend time putting on and taking off clothing and other work gear before and after their shift (“donning and doffing” in employment law terms) must be paid for the time these activities take.

The class action case, filed by the United Food & Commercial Workers Union on behalf of 330 current and former Hormel employees, was decided in the Rock County Circuit Court in favor of the union, and affirmed in the circuit court.

Integral Part of the Work Day

The United Food & Commercial Workers Union (Local Section 1473) alleged that Hormel violated Wisconsin wage and hour laws for failing to pay for the additional 5.7 minutes of time per day it takes workers to don (get dressed for work) and doff (remove work clothing). The time spent putting on and taking off the required clothing and equipment has not previously been included in the employees’ compensation, which resulted in employees working more than 40 hours per week without being paid overtime.

As Justice Shirley Abrahamson noted in her lead opinion, the “Work Rules” Hormel employees are required to abide by state that employees wear certain clothing and equipment on daily basis. “If employees do not wear the required clothing and equipment, the employees are subject to discipline, up to discharge,” Abrahamson wrote.

Hormel employees must don Hormel-provided hard hats, hearing protection, eye protection, and hair nets. Employees must also wear clean and sanitary footwear at all times. The clothing, which cannot under any circumstances be worn outside the Hormel plant, is provided by the company and must be changed daily. In certain cases, Hormel clothing must be changed more often than once daily.

Abrahamson cited the Wisconsin Department of Workforce Development code in determining that the action of putting on white shirts and pants, hard hats and hearing protection, and hand-washing qualifies as “physical or mental exertion.” The Workforce code provides that an employee must be paid for all time spent “in physical or mental exertion . . . controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer’s business.”

Back in the 1980s, Hormel paid its employees an extra 12 minutes per day for the “donning and doffing” under a then-existing union collective bargaining agreement (“CBA”). Eventually, however, that compensation was “bargained away.”

Not a De Minimis Trifle

Abrahamson’s lead opinion did not affirm the lower court’s determination that employees should be paid for donning and doffing even if they leave for lunch breaks. Abrahamson noted the parties agreed on that issue and therefore rendered no opinion on it. Chief Justice Roggensack dissented with this decision, concluding that compensation is not required when employees change clothes for lunch.

“Leaving during the lunch break serves no interest of Hormel, is not ‘an integral part of a principal activity’ of the employer within the meaning of the administrative code, and serves only employees’ interests,” Chief Justice Roggensack wrote.

Hormel argued the doctrine of de minimis non curat lex, which means “the law does not concern itself with trifles,” to bar compensation for only 5.7 minutes of its employees’ time. Justice Abrahamson disagreed, stating, “Viewed in the light of the employees’ hourly rate of $22 per hour, the unpaid period in question may amount to over $500 per year for each employee and substantial sums for Hormel. In the instant case this time is not a ‘trifle.’”

The U.S. Supreme Court weighed in on the “donning and doffing” question in 2014 in Sandifer v. United States Steel Corp. The high court disqualified most clothing as fitting under the Fair Labor Standards Act (“FLSA”), ruling that the vast majority of the time employees spent dressing was not compensable under the federal act.

The case is United Food & Commercial Workers Union, Local 1473 v. Hormel Foods Corporation, 2016 WI 13 (March 1, 2016).

60% of Companies are Facing a Class Action – New Survey Report

carlton fields class action surveyAccording to new research by defense law firm Carlton Fields, corporate spending to defend class actions is up after four years of decline. This marks an important turning point, and defense litigation spending is projected to increase in 2016 as well.

Highlights include the following findings:

  • After four consecutive years of decline, there has been a marked increase in class action defense spending. This is an important turning point as legal departments now project further spending increases in 2016, even as they pursue efficient and innovative ways to manage these costly cases.
  • Consistent with the upward trend in total spending, the survey also reveals an increase in the number of companies facing class actions to more than 60 percent.
  • Corporate counsel are also classifying more than 70 percent of their class actions as complex, high-risk, or bet-the-company, as opposed to routine. And yet, corporate legal departments report that they are making do with fewer in-house attorneys to manage these cases.
  • Corporate counsel rated potential exposure, and the likelihood of resolving matters under exposure, as the most important variables in evaluating prospective risks and success.
  • The survey reflects that organizations increasingly hold a single in-house attorney accountable for the outcomes of their class action lawsuits. Since 2014, there has been a 10 percent increase in companies that use this sole-accountability method.

See the survey report online by visiting http://classactionsurvey.com

The survey draws on 391 in-depth interviews of general and senior legal officers at major corporations in more than 25 industries. The data collected presents a snapshot of the ways in which leading corporate legal departments identify, measure, and manage class action risk.

Billions defending class actions

Across industries, companies spent $2.1 billion on class action lawsuits in 2015. The number of companies facing at least one major class action suit increased from 53.8 to 60.6 percent in 2015. Their class action dockets increased on average by one new case in 2015, bringing the average number of class actions managed to six. This total is expected to increase to seven in 2016.

Consumer fraud and labor and employment remain the most prevalent class action matters. They account for 48.7 percent of all class actions, down slightly from 2014. This year, financial services industry business practices emerged as an expected source of increased class action activity. In this connection, the proposed Consumer Financial Protection Bureau rule that will limit arbitration is expected to give rise to new class action suits. On the other hand, while data privacy class actions have been highly anticipated for several years, they remain a small percentage of matters overall.

The percentage of class actions identified by companies as routine is falling, as higher-risk matters become the norm. Complex matters now account for 62.5 percent of all class actions, up from 46.8 percent last year.

Even while increasingly facing higher-risk matters, corporate legal departments have reduced the number of in-house attorneys used to manage them. Not surprisingly, these in-house attorneys are spending more time on class actions, and their companies are relying more on outside counsel.

When evaluating the risks class actions present, exposure is still deemed the most important variable, and corporate counsel increasingly report that “coming in under estimated exposure” is a key determinant of success.

Less “Defend at All Costs”

Faced with a greater number of class actions—and higher-risk matters—companies are taking a pragmatic approach. While the percentage of corporate counsel who favor a “defend at all costs” approach dropped from 13.6 to 9.7, the percentage committed to defending “at the right cost” rose from 28.8 to 33.9. In addition, 68.7 percent of companies settle their class action lawsuits, most at the precertification stage.

While the use of alternative fee arrangements to manage class actions declined somewhat, nearly half of companies still rely on them. Those who use them increasingly favor fixed fees and capped fees. Capped fees, in particular, are gaining in popularity.

How Scalia’s Death May Impact Pending Supreme Court Cases

 

Antonin ScaliaThe death of Antonin Scalia — the Reagan-appointed, outspoken and rigidly conservative Supreme Court justice — left the outcome of several major pending SCOTUS cases entirely up in the air.

Gone are Scalia’s scathing dissents and his “originalist” judicial philosophy. Scalia believed jurists should interpret the U.S. Constitution according to the Framers’ original intent, regardless of the current reality.

Major Cases Now Pending

Dow Chemical Co.’s agreement to pay $835 million to settle a price-fixing dispute is just one example that Justice Scalia’s death is a serious blow to businesses that have previously been successful in challenging class action cases at the U.S. Supreme Court level. In the process of merging with Dupont, Dow opted to settle the decade-long case rather than risk a decision by an eight-justice court missing Scalia, who was a reliable vote in support of companies in class action cases.

Dow said in a statement that Scalia’s death and the raging political fight over naming his successor meant an “increased likelihood for unfavorable outcomes for business involved in class action suits.”

Multi-million dollar class actions suits involving Tyson Foods Inc. and Walmart Stores Inc. were also argued last year while Scalia was on the bench. Tyson challenged an almost $5.8 million class action judgment and Walmart seeks to throw out a $187 million class action judgment from Pennsylvania.

Another class action case heard by the Supreme Court this term involved online search company Spokeo Inc. SCOTUS appeared closely divided following the November oral argument, which could result in a 4-4 split. While such a ruling would not set a national precedent, it would be a victory for the affected plaintiffs.

And the Court has already started ruling on several health care cases pending during its current session. According to Josh Blackman, associate professor of law at South Texas College of Law, appellants and appellees banking on Scalia’s vote may receive profoundly different rulings without him on the bench. “If the Court splits 4–4, it gets complicated,” Blackman said. “Usually, a tie vote affirms the lower court, but in some of this term’s cases, lower courts have ruled differently on a single question.”

A split decision effectively upholds the ruling of the lower court (presumably a state supreme court). In the event of such a tie, the court typically issues what’s known as a per curiam decision. The opinion in such a decision is issued under the court’s name, as opposed to consisting of a majority and a minority opinion.

When a 4-4 deadlock does occur, the case is not deemed to have set any sort of precedent.

Scalia even wrote several major opinions in favor of corporations, including Comcast and Walmart. Thus, Scalia’s absence may influence overall what cases the Supreme Court chooses to hear. It’s a firm Supreme Court rule that decisions are not final until they are handed down, so nothing Scalia did or said in pending cases matters to the outcome.

Scalia

Uncertainty in His Absence

The uncertainty surrounding big SCOTUS decisions could last beyond this term depending on whether and for how long the Senate fights Obama’s nomination to replace Scalia. Tom Goldstein of SCOTUSBlog predicts the Republican Senate is unlikely to let President Obama push through his own pick so close to an election.

While it remains possible President Obama could attempt to bypass the Senate and replace Scalia through a recess appointment, that tactic is rarely used and would be certain to draw outrage and an attack from Republicans. One thing is certain regarding the president: the potential for 4-4 decisions creates uncertainty for several upcoming cases this term that will undoubtedly affect President Obama’s legacy.

In the case of a SCOTUS split, whatever the lower court decided is affirmed, and that ruling only applies to the low court’s specific circuit. Naturally, this leaves serious legal conflicts among circuits unresolved. The Court was divided 5-4 along ideological lines only about a quarter of the time; most decisions are actually unanimous. It is, of course, the divided decisions that are often the most culturally and politically controversial.

Scalia already heard – and potentially already cast votes – in several high stakes cases that could decide issues regarding whether universities can continue to use affirmative action to if unions can collect fees from nonmembers to survive. Any Scalia votes already cast in pending cases, however, will be invalidated, sending the Supreme Court back to the drawing board. We can likely expect to see 4-4 splits on key issues, with the remaining four liberals and four conservatives on the bench facing off against each other.

Ninth Circuit Revives Deceptive Cosmetic Labeling Suit

natural cosmeticsThe Ninth Circuit Court of Appeals agreed with cosmetic consumers that a reasonable person could be misled by a manufacturer’s use of the word “natural” and “100% vegetarian” on its packaging and revived a suit against the company.

The lower court dismissed the case under a 12(b)(6) motion. However, the Ninth Circuit believed the plaintiffs had sufficiently pleaded their claims.

Free of synthetics?

The Hain Celestial Group, Inc. alleged its products were free of synthetic ingredients and charged consumers a higher price for its “100 % vegetarian” makeup.

The plaintiffs claimed they would not have paid the premium price as compared to other products if they were aware the products were not as claimed.

The plaintiffs stated a reasonable consumer would believe that Alba Botanica cosmetics were derived from plants because of the “100 % vegetarian” label.

The court ruled that whether a business engaged in deceptive or misleading practices was generally a question of fact.

A manufacturer’s ingredient list or information on its website in itself does not override any misimpressions created by the product labels. Williams v. Gerber Prods Co., 552 F.3d 934, 939 (9th Circ. 2008).

The court concluded that similar to other misleading label claims, the statements that the products were natural or vegetarian, “could be taken as a claim that no synthetic chemicals were in the products.”

The lower court’s dismissal of the plaintiffs claim was reversed and remanded to consider the plaintiffs claims and the precertification discovery.

This case is Alessandra Balser et al. v. The Hain Celestial Group, Inc. Case No 14-55074, U.S. Court of Appeals Ninth Circuit, Pasadena CA.

Zofran Multidistrict Litigation Allowed to Proceed Despite Motion to Dismiss

belly of pregnant woman and vitamin pills in the hand

Amid increased warnings that the anti-nausea drug Zofran may be linked to serious birth defects when used during pregnancy, a federal panel last year created a special multidistrict litigation docket for victims to use as an avenue for compensation from the drug’s maker, GlaxoSmithKline (GSK).

With hundreds of lawsuits already filed, GSK filed a request last month to have the lawsuits against it thrown out of court before families even had a chance to prove their case. The federal judge overseeing the Zofran birth defect lawsuits denied GSK’s attempts to keep the cases out of court as premature at best.

Loath to Dismiss

GSK had argued the families’ state law claims were preempted by federal law under the U.S. Supreme Court decision in Wyeth v. Levine, which held that federal regulatory clearance of a medication does not shield the manufacturer from liability under state law. U.S. District Judge F. Dennis Saylor IV said that he was “loath to dismiss” the claims without giving the families the chance to develop the facts of their respective cases through discovery.

Zofran, manufactured by GlaxoSmithKline and first approved by the FDA in 1991, is intended for extreme cases of nausea, such as with cancer medications or following surgery. It was not FDA-approved for use during pregnancy. However, it has increasingly been prescribed to expectant mothers for morning sickness since its initial approval. GSK was fined a record $3 billion in 2012 by the federal government for illegally promoting Zofran for such unapproved purposes. GSK earned more than $1.5 billion per year in sales, and it is evident the $3 billion fine had little overall impact on the pharmaceutical giant.

The families affected by Zofran usage argued on January 6 that because the FDA hasn’t approved Zofran to treat morning sickness, only GSK has control over the relevant evidence of the foreseeable risks of using Zofran while pregnant.

  • Even though parties have not yet initiated discovery, the families said they have reason to believe GSK has evidence about the link between Zofran and alleged birth defects.
  • This includes several animal studies conducted by the pharmaceutical company in Japan after the company launched sales of the drug in the U.S. One of those studies, the families said, revealed the same cardiac birth defect alleged by many of the complaints.

Proceeding With Discovery

In its January motion to dismiss, GSK argued that the FDA’s negative response to a citizen petition requesting that the agency reclassify the pregnancy risk for Zofran demonstrates the FDA had already made a decision about the validity of the Zofran warnings. Judge Saylor disagreed, stating,

“In effect, GSK argues that the court need not consider evidence of how the FDA might have answered a change request, because the petition response itself contains the actual answer. GSK’s position, however, is problematic . . .”

In short, the standard of “clear evidence” involves a fact-based evaluation, so Judge Saylor felt the court should not rule on a motion to dismiss “without giving the plaintiffs some opportunity to develop the facts, whatever those facts may be.”

“If — as plaintiffs allege — GSK was in exclusive possession of information not previously submitted to the FDA indicating the need for a new or strengthened warning, that information would presumably be included in a [change being effected] request,” Judge Saylor said. “That information could not, however, have been submitted by a citizen petition, as no citizen (according to plaintiffs) had access to it.”

Hundreds of families have joined the multidistrict litigation against GSK, and now they all will have the opportunity to proceed with their claims.

The case is In Re: Zofran (Ondansetron) Products Liability Litigation, Case Number 1:15-md-02657, in the U.S. District Court for the District of Massachusetts.