Source: http://www.globalclassactionsblog.com/category/united-states/
Timestamp: 2019-04-24 20:43:42+00:00

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On September 6, 2018, the Ninth Circuit Court of Appeals in California breathed fresh life into a case brought by a putative class of retired professional football players (“players”) against the National Football League (“NFL”). See Dent v. NFL, No. 15-15143, 2018 U.S. App. LEXIS 25302 (9th Cir. Sep. 6, 2018) (“Dent”). The players assert that the NFL directly provided medical care and supplied powerful prescription drugs to players, in violation of federal and state laws, which allegedly resulted in permanent orthopedic injuries, drug addictions, heart problems, nerve damage and renal failure. After the district court ruled that these claims were preempted (i.e., barred) under Section 301 of the Labor Management Relations Act (“LMRA”), a unanimous, three-judge panel reversed. The Ninth Circuit held that the players’ claims did not trigger a dispute “over the rights created by, or the meaning of,” the NFL’s collective bargaining agreements (“CBAs”), thus leaving the parties to address the players’ claims on the merits at the district court. The Ninth Circuit was careful to “express no opinion about the ultimate merits of the players’ claims”; and whether the players’ claims are adequately pled, or create a sufficient factual question that could lead to trial, will be questions for the district court in the months to come.
The NFL is an unincorporated association of thirty-two independently owned and operated football “clubs”, or teams. Although the NFL “promotes, organizes, and regulates professional football in the United States,” the NFL “does not employ individual football players; they are employees of the teams for whom they play.” Since 1968, the NFL, its member teams, and the NFL players have been bound by a series of CBAs which, since 1982, include provisions regarding “players’ rights to medical care and treatment.” The CBAs generally require teams to employ board-certified orthopedic surgeons and trainers certified by the National Athletic Trainers Associations. The CBAs have also guaranteed players the right to access their medical records, obtain second opinions, and choose their own surgeons.
Retired NFL football player, Richard Dent, played in the league for fourteen years. On behalf of himself and other retired NFL players, Dent sued the NFL in 2014 in federal district court in San Francisco, alleging that since 1969, the NFL has distributed controlled substances and prescription drugs to its players in violation of both federal and state laws. The complaint also alleged that the manner in which the drugs were administered left the players with permanent injuries and chronic medical conditions. Dent claims that doctors and trainers gave him “hundreds, if not thousands” of injections and pills that contained powerful painkillers so that he could stay on the field. More broadly, the complaint alleges that players “rarely, if ever”, received written prescriptions for the medications they were given. Instead, the players claim that they received, and were told to take, pills in “small manila envelopes that often had no directions or labeling”. The players allege that throughout their years of taking the medications, no one from the NFL warned them about potential side effects, long-term risks, interactions with other drugs or the likelihood of addiction. In Dent’s particular case, he ended his career with an enlarged heart, permanent nerve damage in his foot and an addiction to painkillers.
With these allegations as their baseline, the players sought to represent a class of plaintiffs who had “received or were administered” drugs by anyone affiliated with the NFL or an NFL team. The claims the players filed were styled as ones grounded in state law (albeit with the specific state unspecified), including: negligence per se, negligent hiring and retention, negligent misrepresentation, fraudulent concealment and fraud. The players sought relief that included damages as well as injunctive relief, declaratory relief and medical monitoring.
On appeal, the Ninth Circuit reversed the district court’s preemption ruling in favor of the players. The Ninth Circuit explained that a “hypothetical connection between the claim and the terms of the CBA is not enough to preempt the claim.” (Emphasis in original.) For purposes of preemption, the “plaintiff’s claim” must be the “touchstone”, and the “need to interpret the CBA must inhere in the nature of the plaintiff’s claim.” In contrast, merely “consulting a CBA” does not “constitute interpretation of the CBA for preemption purposes.” The Ninth Circuit then considered whether the players’ allegations, as pled, arose from the CBAs and, if not, whether establishing the elements of the claim would require interpretation of the CBAs. The answer to each, the Ninth Circuit held, is no.
In turn, the Ninth Circuit held that the players’ negligence claim did not require interpretation of the CBAs, because each element — duty of care, breach, causation, and damages — falls outside the scope of the CBAs. In so holding, the Ninth Circuit distinguished another case, Williams v. Nat’l Football League, 582 F.3d 863 (8th Cir. 2009), on the basis that Williams involved an alleged failure to warn claim as applied to certain supplements that contained a banned substance. The players in Williams, unlike in Dent, had procured “the supplements on their own; in fact, they were taking supplements against the advice of the NFL.” (Emphasis added.) Not so here, said the Ninth Circuit, where the players alleged the “NFL has a duty to avoid creating unreasonable risks of harm when distributing controlled substances that is completely independent of the CBAs.” The Ninth Circuit also distinguished obligations of teams from the NFL: “if the NFL had any role in distributing prescription drugs, it was required to follow the law regarding those drugs” regardless of what each NFL team’s obligations may have been within the meaning of the CBAs.
In addition, the Ninth Circuit addressed the players’ negligent hiring and retention claim with respect to doctors and trainers, observing that if the NFL “did in fact hire doctors and trainers to treat the players, or hire individuals to oversee the league’s prescription drug regime, there is clearly an employment relationship” that makes the alleged incompetence “foreseeable”. As such, the NFL had a “common-law duty to use reasonable care in hiring and retaining” any such individuals it may have hired. Any negligent hire and retention claims did not implicate any CBA provisions, according to the Ninth Circuit, which instead only related to “teams’ obligations”. (Emphasis added.) The Court also addressed negligent misrepresentation, holding that whether the NFL made false assertions, knew or should have known that they were false, whether the players justifiably relied on the NFL’s statements to their detriment, “are all factual matters that can be resolved without interpreting the CBAs.” The Court held similarly with respect to the players’ fraud claim. Finally, the Ninth Circuit rejected the NFL’s argument that the players “failed to exhaust the grievance procedures required by the CBAs” because, as already held, the players’ claims did not arise under, or involve the interpretation of, the CBA.
The Ninth Circuit was conscious to confine its ruling to preemption. Whether the players’ claims will be enough to survive a motion to dismiss for failure to state actionable claims, or failure to timely bring them — both of which the NFL filed the first time around, without receiving a ruling on either — will await another day. So too, perhaps, will the question of whether the players have enough actual facts, beyond the pleadings, to sustain their claims all the way to trial. Even still, the Ninth Circuit’s ruling is significant. It may now force the NFL to defend the players’ allegations on the merits. It could also inform NFL players, looking to avoid the preemption often caused by the CBAs, how to style their complaints in any future actions for recovery. Regardless of whether Mr. Dent’s claims ultimately win the day in this case, an upshot for the NFL from the Ninth Circuit’s ruling is that additional “direct liability” actions, brought by other retired players, seem sure to follow.
Data privacy law is rapidly developing; significant updates to data privacy and protection laws (now enacted in over 100 jurisdictions worldwide) are of increasing importance to class action litigation. Especially after the enactment of the EU General Data Protection Regulation (GDPR) and the Chinese Cybersecurity Law (and its supporting guidelines and regulations), there is a strong push for the enactment of stricter data protection laws in the United States. Practitioners must consider the implications of Article III standing on putative data privacy class actions.
According to Article III of the United States Constitution, the federal judicial power extends to all cases arising under the Constitution between citizens of different states. U.S. Const. art. III, § 2, cl. 1. The Constitution requires that the plaintiffs must have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1542 (2016). To properly establish an “injury in fact” in data privacy class actions, plaintiffs must prove that their injuries are “concrete and particularized” and “certainly impending.” As courts continue to grapple with this emerging area of law, additional, significant changes are likely to develop.
Courts must determine whether plaintiffs have alleged a concrete, particularized injury before conferring Article III standing. In Spokeo v. Robins, the plaintiff alleged that Spokeo violated the Fair Credit Reporting Act (FCRA) by making false personal information publicly available on the Internet, including false assertions that plaintiff was married and wealthy. The Ninth Circuit held that the technical violation of the FCRA alleged by the Plaintiff was an adequately alleged “injury in fact” sufficient for the purposes of Article III standing. On appeal, the Supreme Court held that the Ninth Circuit “failed to fully appreciate” whether the particular procedural violations alleged by the plaintiff was sufficiently concrete, reasoning that plaintiffs cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1550 (2016). Thus, plaintiffs do not “automatically satisfy the injury-in-fact requirement whenever a statute grants a right and purports to authorize a suit to vindicate it.” Id. at 1549.
Post-Spokeo, courts have continued to require parties to prove concrete harm before conferring Article III standing. For example, in a recent putative class alleged that a national retailer violated the D.C. Consumer Protection Act by requesting customers to provide their zip codes at checkout. The D.C. Circuit ruled that the retailer’s simple request and recording of the zip codes, “without any concrete consequence,” did not present a risk of real harm. Similarly, the Eighth Circuit found no real injury where a defendant cable company retained records of former customer telephone and Social Security numbers for years after the former customers cancelled their cable subscriptions. The Seventh Circuit has agreed that such record retention poses no material risk. These subsequent holdings indicate that the mere retention of consumer data, without the presence of material, concrete risks (such as those posed by a data breach) is not itself sufficient to confer Article III standing.
Courts must also determine whether plaintiffs have suffered “actual” or “certainly impending” injuries before conferring Article III standing. Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1147, 1147 (2013). In Clapper, a putative class alleged that the National Security Administration had violated the Fourth Amendment when it conducted warrantless wiretapping of telephone and e-mail communications authorized by the Bush administration. The Supreme Court held that the class’s arguments were too speculative because the government had not indicated it intended to imminently target class member communications. Id. at 1147-48 (“[W]e have repeatedly reiterated that threatened injury must be certainly impending to constitute injury in fact, and that [a]llegations of possible future injury are not sufficient.”) (internal citations omitted) (emphasis in original).
Some courts have clearly identified “actual” injuries where consumers were forced to expend tangible resources to protect their rights and/or privacy. However, the Third Circuit has explained that when it comes to laws that protect privacy, a focus on economic loss is misplaced.
Although “concreteness,” “particularity,” and “certainty” are not interpreted uniformly, it appears that courts are unlikely to confer Article III standing on “bare” allegations of violations of procedural or statutory rights. However, courts are more likely to find Article III standing where parties’ privacy interests are alleged to have been violated in a concrete, material way. To that end, where personal information has actually been exposed (for example, as the result of a data breach) or plaintiffs have suffered tangible loss, courts are likely to confer Article III standing.

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