- Rise in Mass Arbitrations: Mass arbitrations
continued their rise in 2023, especially in the privacy and
consumer areas. Courts have ordered defendants to pay filing fees
for thousands of individual arbitration claimants and have largely
rejected efforts by corporate defendants to obtain relief from
onerous fees. The use of this tactic has led to the emergence of
adaptations in arbitration agreements to specifically tackle mass
claims and to new arbitration providers introducing mass
arbitration protocols and fee structures. This shift has triggered
court challenges to batching and bellwether procedures, with
notable rulings finding that arbitration agreements containing such
batching provisions may be unconscionable. We expect more companies
will face mass arbitration threats in 2024, as the tools to defeat
them are still being developed and tested.
- Data Privacy Class Actions: Data privacy
continues to be a hot area for class action lawsuits. Claims
asserting violations of the Video Privacy Protection Act have
appeared given the availability of statutory damages of $2,500 per
violation, along with possible punitive damages and attorney fees.
There is also another wave of website and telephonic wiretapping
claims based on the use of "chatbot" web services,
session replay, pixels, and voice verification. Hundreds of these
cases were filed nationwide in 2023, predominantly in California,
Pennsylvania and Maryland, and this trend is expected to continue
in 2024.
- Financial Services Class Actions: 2023 saw an
uptick in class actions asserting claims under the Electronic Funds
Transfer Act and state consumer fraud statutes arising out of fraud
schemes targeting customers using smart phones and other devices
for electronic banking. Banks and other financial institutions
should continue to monitor this trend and review policies and
procedures for investigating and reimbursing allegedly unauthorized
electronic consumer transactions. Another trend that is expected to
continue in 2024 is the continued filing of overdraft fee class
actions. The Consumer Financial Protection Bureau's recent announcement
of a proposed rule limiting overdraft fees will ensure that this
topic stays in the spotlight.
- Cosmetics and Personal Care Class Actions: No
relief is in sight for companies in the cosmetics and personal care
space due to the heightened scrutiny of product claims and
ingredient transparency. Regulators and consumers alike are placing
increasing importance on accurate labeling, safety standards, and
environmental sustainability within the sector. Recent trends show
an increase in claims targeting companies that make "clean
beauty" representations about products—e.g.,
sustainable, nontoxic, ethically made, cruelty-free, or
vegan—due to plaintiffs' attorneys scrutinizing
ingredient lists and conducting their own testing to identify
potentially harmful components that allegedly make such claims
misleading.
- Environmental, Social, and Governance Class Actions: As companies face greater pressure to make aspirational statements and disclosures about their products and practices, the rise in "ESG" claims is expected to continue. Companies are facing a backlash from consumers and stakeholders asserting "greenwashing" and other claims in states with plaintiff-friendly consumer statutes that force defendants to either substantiate their product claims or face significant legal risk.
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