Third Circuit Eyes Up Consumers’ Standing, Splits With Seventh Circuit

Third

Last month, the Third Circuit issued a 2-1 decision in Cottrell v. Alcon Labs.,[1] reversing a district court’s dismissal of a class action lawsuit on standing grounds.  The putative class in Cottrell is comprised of consumers of prescription eye droplet medication used to treat glaucoma.  In their complaint, the named plaintiffs allege that the manufacturers and distributors of the droplets engaged in unfair trade practices—as prohibited by state consumer protection statutes—by selling them in dispensers that discharge the medicine in doses that are too large (i.e., the bottle’s dropper squirts out 15mL when an average consumer allegedly only requires 7mL).

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State AGs and FTC Combine Forces for Consumer Protection

State

A dozen bipartisan State Attorneys General and the Federal Trade Commission (FTC) recently instigated a medieval siege dubbed “Operation Game of Loans” against alleged student loan relief scams.  This coordinated nationwide enforcement effort targets companies charging upfront fees to consumers for promises  of relief from student loan debt – currently estimated to involve $95 million in claimed illegal fees. While this enforcement action is focused on apparent student loan debt relief scammers, there are some broader takeaways for companies about State AG authority.

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CFPB Overreaches in Handling Alleged RESPA ABA Exemption Issues in Meridian

RESPA

On September 27, 2017, the Consumer Financial Protection Bureau (CFPB) announced the settlement of its Real Estate Settlement Procedures Act (RESPA) enforcement action against Meridian Title Corp. (Meridian), an Indiana-based title insurance agency, based on alleged title insurance referrals made to an underwriter partially owned by three of Meridian’s executives. The CFPB faulted Meridian for allegedly failing to provide a RESPA disclosure explaining the affiliation with the underwriter, Arsenal Insurance Corporation (Arsenal), and for receiving impermissible money under the business arrangement.

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Business Groups File Federal Lawsuit to Challenge CFPB Arbitration Rule

CFPB

On September 29, 2017, the U.S. Chamber of Commerce, the Texas Association of Business, and various other national and Texas statewide business organizations and trade groups (together, Plaintiffs) filed a federal lawsuit in Dallas, Texas challenging the constitutionality of a Consumer Financial Protection Bureau (CFPB) rule designed to prohibit providers of certain consumer financial products and services from using class waivers in pre-dispute arbitration agreements (Arbitration Rule).   The Arbitration Rule, which was issued in July 2017 but which will not go into effect until March 2018, is already facing congressional challenge, with a joint resolution presently before the Senate to overturn the rule under the Congressional Review Act.

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Taking the Pulse of Ascertainability in the Ninth Circuit after Briseno v. ConAgra Foods, Inc.

Ascertainability

Most federal courts have found that Rule 23 of the Federal Rules of Civil Procedure implicitly requires a showing that members of a proposed class are readily identifiable or “ascertainable” for a class to be certified. For some time now, however, there has been a split among the United States Courts of Appeals over what a party seeking class certification must demonstrate to meet the ascertainability requirement.  On the one hand, the Third, Fourth, and Eleventh Circuits have held that a class cannot be certified unless it is sufficiently definite and plaintiff demonstrates an “administratively feasible” way for the court to determine whether a particular individual is a member of the class. On the other hand, the Second, Sixth, Seventh, and Eighth Circuits have found that there is no “administrative feasibility” prerequisite to class certification to demonstrate ascertainability.

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