Update: Second Circuit Upholds Dismissal of Absurd Diet-Soda Class Action

diet pepsiNearly a year ago in Neither Reason nor Science Supports Class Actions against Diet Soda Makers, we applauded the dismissal of several copycat class-action lawsuits alleging that because the word “diet” in “diet soda” implies the beverage aids in weight loss, companies like Pepsi and Dr. Pepper were misleading consumers. Consumers were misled, the suits asserted, because the artificial sweetener being used causes weight gain. The plaintiffs cited scientific studies they said supported that conclusion.

One decision by the U.S. District Court for the Southern District of New York, Manuel v. Pepsi-Cola Co., thoroughly dismantled the studies plaintiffs relied upon, holding that at most the studies supported a correlation between the sweeteners and weight gain, not causation.

The U.S. Court of Appeals for the Second Circuit affirmed that decision last month. On April 17, the same court, in a curt summary order, affirmed the dismissal of another diet-soda suit by the Southern District of New York, Excevarria v. Dr. Pepper Snapple Group, Inc.  The order explained that even if the reasonable consumer believed that a product containing the word “diet” was making promises about weight management, the studies Excevarria cited did not establish a causal connection between the artificial aspertame and weight gain.

Several other dismissed diet-soda class actions are awaiting decisions from the Ninth Circuit. Because all these suits rely on the same flawed studies, Manuel and Excevarria should seal the fate of those pending appeals.

Update: Supreme Court to Decide Whether the CWA Regulates Discharges through Groundwater to Waters of the United States

Sam Boxerman, Featured Expert Contributor, Environmental Law and Policy

sboxerman

As we anticipated in our post last year, the Supreme Court has granted a petition for a writ of certiorari from the Ninth Circuit in County of Maui v. Hawaii Wildlife Fund. The justice will decide whether the Clean Water Act (CWA) regulates discharges through groundwater that reach a water of the United States (WOTUS). The certiorari grant embraced the Solicitor General’s view, who filed an amicus brief urging the Court to take the case and decide the groundwater discharge issue.

This issue has become a prominent one in CWA jurisprudence recently, with three circuit courts of appeals weighing in on the issue in five decisions in 2018 alone. The circuits are split; the Ninth Circuit and the Fourth Circuit have determined that the CWA does regulate discharges to groundwater, while the FifthSixth, and Seventh Circuits have held that it does not.

If the Court ultimately sustains the Ninth Circuit’s approach, Maui will have far reaching implications for CWA regulation and enforcement, particularly for spills and other releases that reach groundwater. Moreover, the Court is addressing the case at the same time that EPA and the Corps are receiving comments on their proposed revised definition of what is a water of the United States.  Although Maui is not expected to address the definition of WOTUS, the decision will bear close reading for any Supreme Court insights into that all-important Clean Water Act term.

The Court added Maui to the docket for its October Term 2019, which begins this fall on October 7.

*Sam Boxerman is a Partner in the Washington, DC office of Sidley Austin LLP.

 

The First Amendment in the Supreme Court: “Scandalous” Trademarks and Labor Unions

Megan Brown, Featured Expert Contributor, First Amendment

Continue reading “The First Amendment in the Supreme Court: “Scandalous” Trademarks and Labor Unions”

Supreme Court’s DeVries Decision Doesn’t Spell the End of “Bare Metal” Defense in Asbestos Cases

Featured Expert Contributor, Mass Torts—Asbestos

RobertWrightRobert H. Wright, a Partner with Horvitz & Levy LLP in Los Angeles, CA

Last month, the United States Supreme Court rejected the “bare metal” defense to products liability claims in maritime cases.  Air & Liquid Systems v. DeVries, No. 17-1104, 2019 WL 1245520 (U.S. Mar. 19, 2019).  Some have predicted that the decision marks the beginning of the end for that defense even outside the maritime context.  But the prediction is premature.  The DeVries decision comes after the highest courts in some states have already embraced the “bare metal” defense and in doing so rejected the same arguments that the DeVries majority has now endorsed.  Those state decisions will continue to control in those jurisdictions, at least in non-maritime cases.  Further, those state courts are unlikely to reverse course and accept arguments that they so recently rejected.

In DeVries, the families of naval veterans who had died of cancer brought products liability claims against the manufacturers of pumps, blowers, and turbines used on naval ships, claiming that the manufacturers were negligent in failing to warn of the risks of asbestos-containing insulation the Navy used with their products.  The district court granted summary judgment for the manufacturers, holding that under the “bare metal” defense, the manufacturers were not liable for failing to warn about asbestos-containing products that they did not manufacture or supply.  The U.S. Court of Appeals for the Third Circuit reversed, holding that the manufacturers had a duty to warn because it was “foreseeable” that the asbestos-containing products would be used with their products. Continue reading “Supreme Court’s DeVries Decision Doesn’t Spell the End of “Bare Metal” Defense in Asbestos Cases”

Honest Services Fraud Back in the Spotlight with “Operation Varsity Blues”

Featured Expert Contributor, White Collar Crime & Corporate Compliance

Gregory A. Brower, a Shareholder with Brownstein Hyatt Farber Schreck, LLP in Las Vegas, NV and Washington, DC, with Stanley L. Garnett, a Shareholder in the firm’s Denver, CO office.

The charges federal prosecutors have filed in the “Operation Varsity Blues” college-admissions corruption scandal have thrust the federal crime of honest services fraud back into the spotlight.  Over the past two or three decades, this section of the federal criminal code has been the subject of much controversy.  Although the facts alleged in the various Operation Varsity Blues charging documents are unseemly, at best, and the evidence seems overwhelming, the government’s reliance on the honest services fraud statute is likely to renew the debate in white collar defense circles about what exactly the statute means and whether it is appropriately applied to private-sector actors. Continue reading “Honest Services Fraud Back in the Spotlight with “Operation Varsity Blues””

Third Circuit Builds on Post-Spokeo “Bare Procedural Violation” Standing Jurisprudence

Featured Expert Contributor—Civil Justice/Class Actions

Frank Cruz-Alvarez, a Partner in the Miami, FL office of Shook, Hardy & Bacon L.L.P., with Erica E. McCabe, an Associate in the firm’s Kansas City, MO office.

On March 8, 2019, the U.S. Court of Appeals for the Third Circuit, in Kamal v. J. Crew Grp., Inc., et al., ___F.3d___, 2019 WL 1087350 (3d Cir. Mar. 8, 2019), affirmed the U.S. District Court for the District of New Jersey’s judgment that plaintiffs’ putative class complaint failed to properly assert Article III standing under the guidelines established by Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Spokeo I).  In so holding, the Third Circuit joined its sister courts from the Second, Eighth, and Ninth Circuits in establishing that alleged procedural violations do not create Article III standing unless “the violation actually harms or presents a material risk of harm to the underlying concrete interest.”  Kamal, 2019 WL 1087350, at *17.  

In Kamal, the putative class alleges that J. Crew Group, Inc. (“J. Crew”) violated provisions of the Fair and Accurate Credit Transactions Act of 2003 (“FACTA” or the “Act”), 15 U.S.C. § 16801c(g), when it printed receipts showing the first six and last four digits of plaintiffs’ credit card numbers.  Kamal, 2019 WL 1087350, at *3.  In addition to the bare statutory violation, the putative class alleges that the offending receipts put them at an increased risk of identity theft. Continue reading “Third Circuit Builds on Post-Spokeo “Bare Procedural Violation” Standing Jurisprudence”

Third Circuit Limits the FTC’s Authority to Challenge Ceased Conduct

Featured Expert Contributor, Antitrust & Competition Policy — Federal Trade Commission

M. Sean Royall, a Partner at Gibson, Dunn & Crutcher LLP, with Richard H. Cunningham, a Partner and Emily Riff, an Associate, both with the firm.

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On February 25, 2019, the Third Circuit issued a decision affirming the District of Delaware’s dismissal of the FTC’s “sham petitioning” case against Shire ViroPharma (Shire), the manufacturer of the branded drug Vancocin.  The Court of Appeals held that to proceed pursuant to § 13(b) of the FTC Act, the FTC must plead facts plausibly showing that Shire is “about to violate” the antitrust laws, but failed to do so because the challenged conduct ceased years before the lawsuit and the FTC’s allegations were otherwise insufficient to meet the “about to violate” standard.

The decision may substantially limit the FTC’s ability to invoke § 13(b) in cases where the challenged conduct is not ongoing.  This is significant because the agency has, for years, successfully used § 13(b) to challenge past conduct in both the antitrust and consumer-protection contexts in federal court to obtain injunctive and equitable monetary relief.   Continue reading “Third Circuit Limits the FTC’s Authority to Challenge Ceased Conduct”