Supreme Court Update: Lackey v. Stinnie (No. 23-621)
In Lackey v. Stinnie (No. 23-621), the Supreme Court addressed a question that had divided the circuits: If a plaintiff sues under Section 1983 and obtains a preliminary injunction, but subsequent events moot the suit before the district court can make that temporary relief permanent, is the plaintiff a “prevailing party” entitled to attorney’s fees under Section 1988(b)? Rejecting the approach favored by most lower courts, a 7-2 Supreme Court held that they are not.
The case began in Virginia, where state law required courts to suspend the license of any driver who had failed to pay “any fine, costs, forfeitures, restitution, or penalty lawfully assessed against him.” Such suspensions remain in effect until the driver paid the amount due in full or entered into a payment plan approved by a court. In 2016, a group of drivers whose licenses were suspended under this provision and alleged that they could not pay the fines required to reinstate their license sued the Commissioner of the Virginia Department of Motor Vehicles in federal court under Section 1983. The drivers alleged that the law violated the due process and equal protection clauses because it did not provide them with adequate notice before their licenses were suspended, and it applied even to people who were financially unable to pay the fines. The drivers sought declaratory relief, preliminary and permanent injunctive relief, and attorney’s fees under 42 U.S.C. § 1988(b).
In December 2018, the District Court entered a preliminary injunction against the law, holding (among other things) that the drivers were likely to prevail on the merits. Although Virginia could have appealed the preliminary injunction, it didn’t, so the case moved toward a full trial on the merits. In April 2019, a few months before trial was scheduled to begin, Virginia moved to stay the suit, arguing that it would soon become moot because the Virginia General Assembly was likely to pass a law eliminating the fines in an upcoming legislative session. The District Court entered the stay, and the next year, the General Assembly repealed the law and reinstated any licenses that had been suspended under it. Given that legislative change, the parties agreed the case was moot and stipulated to a dismissal, but the drivers asserted they were “prevailing parties” entitled to recover their attorney’s fees under Section 1988(b). The District Court refused to award fees, concluding that a party who obtains just a preliminary injunction (with no final relief) is not a prevailing party under Section 1988(b). Relying on circuit precedent, a Fourth Circuit panel affirmed, but the en banc Fourth Circuit then took up the case and overruled its precedent. In doing so, it joined the majority of the other courts of appeals in holding that a plaintiff who obtains “concrete, irreversible relief” on the merits of their claim via a preliminary injunction can be a prevailing party if the suit then becomes moot before a final judgment. Because the lower courts had divided on how to apply Section 1988(b)’s prevailing-party standard to cases like this one, the Court granted cert.
A 7-2 Court reversed the Fourth Circuit in an opinion written by Chief Justice Roberts. The Chief began by reciting the familiar “American Rule,” which provides that a prevailing party is generally not entitled to recover their attorney’s fees unless a statute expressly authorizes the court to award them. Section 1988(b) obviously is such a statute, as it provides that a “court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.” But the statute doesn’t define when someone is a “prevailing party.” So Roberts looked to legal dictionaries, which generally define the term as looking at who prevailed at “the end of the suit . . . when the matter is finally set at rest.” A preliminary injunction, by contrast, requires a party to show only that they are “likely to succeed on the merits,” meaning that a party who obtains a preliminary injunction may nonetheless go on to lose the suit on the merits. Preliminary injunctions are thus at most a “transient victory.” And that transient victory does not become any more final when some “external event” (like the legislature changing the law) makes it impossible to obtain enduring, court-ordered relief. In short, because a preliminary injunction does not conclusively resolve a case, a party obtaining a preliminary injunction, without more, is not a prevailing party entitled to recover fees.
Justice Jackson, joined by Justice Sotomayor, dissented. She emphasized that Section 1988(b) was enacted precisely because Congress wished to depart from the American Rule in civil rights litigation. Under both the plain language and the Court’s precedent, she concluded that securing a preliminary injunction is enough for a plaintiff to qualify as a prevailing party so long as the preliminary injunction is never reversed by a final ruling on the merits. She also objected to the significant practical consequences of the majority’s approach: It is hardly unique for civil-rights cases to be mooted out either by settlement or legislative action, and depriving successful litigants of attorney’s fees in those cases may deter the filing of meritorious suits, deter settlements, and reward gamesmanship from defendants.
Supreme Court Update: Waetzig v. Halliburton Energy Services, Inc. (No. 23-971)
In Waetzig v. Halliburton Energy Services, Inc., (No. 23-971), the Supreme Court finally settled a question lawyers have been debating from time immemorial: Is a plaintiff’s voluntary dismissal of a complaint without prejudice under Federal Rule of Civil Procedure 41(a) a “final proceeding” for purposes of a Rule 60(b) motion to reopen the suit? A unanimous Court concluded that it was, eliminating a circuit split created by a Tenth Circuit decision that had ruled it was not.
The case began when Gary Waetzig was fired by Halliburton. He sued his former employer in federal court alleging age discrimination. Halliburton responded by asserting that Waetzig was required to arbitrate his claim. Waetzig acquiesced, submitting his claim for arbitration. But instead of asking the District Court to stay his suit pending the outcome of that arbitration, he voluntarily dismissed his complaint pursuant to Rule 41(a), which permits a plaintiff to dismiss a case “without a court order” if the plaintiff serves “a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment.” Because Halliburton had not answered or moved for summary judgment, Waetzig’s dismissal was effective without any court action. And because this was Waetzig’s first such dismissal, it was (according to the Rule’s terms) presumptively without prejudice.
Unfortunately for Waetzig, he lost the arbitration. He then filed a motion in the docket for the dismissed case, asking the District Court to reopen the case and vacate the arbitration award. He argued the District Court had the authority to reopen the case under Rule 60(b), which allows a court “[o]n motion and just terms,” to “relieve a party . . . from a final judgment, order, or proceeding.” The District Court agreed with Waetzig and awarded Rule 60(b) relief, holding that a voluntary dismissal without prejudice counts as a “final proceeding” within the meaning of Rule 60(b), and that Waetzig’s voluntary dismissal was a “careless mistake” of the sort Rule 60(b)(1) allows relief from. Then, in a second order, the District Court found that the arbitration award was improper and set it aside. Halliburton appealed, arguing the District Court lacked authority to reopen the case in the first place because a voluntary dismissal without prejudice does not count as a “final judgment, order, or proceeding,” and therefore falls outside the reach of Rule 60(b). The Tenth Circuit agreed with Halliburton: It held that a voluntary dismissal without prejudice could not be a “final proceeding” because “a final proceeding must involve, at a minimum, a judicial determination with finality.” In reaching that result, the Tenth Circuit disagreed with the Fifth and Seventh Circuits, which both had held that a voluntary dismissal without prejudice was a “final proceeding” within the meaning of Rule 60(b).
A unanimous Supreme Court sided with the Fifth and Seventh Circuits over the Tenth. Writing for the Court, Justice Alito first concluded that a voluntary dismissal under Rule 41(a) was “final.” According to sources like the Advisory Committee’s Notes on the rule, the word “final” means only that interlocutory judgments are not subject to Rule 60. Whether it’s with or without prejudice, a voluntary dismissal “terminates the case,“ making it “final.” Alito then addressed whether such a dismissal was also a “proceeding.” Turning to dictionaries, he concluded that “proceeding” included “all formal steps taken in an action.” He thus rejected Halliburton’s argument that a “proceeding” required judicial intervention, noting that such a restrictive definition would deprive “proceeding” of independent meaning since the Rule also covers “orders,” which by definition require judicial action. Having concluded that a voluntary dismissal was both “final” and a “proceeding,” Alito put one and one together and held that it was a “final proceeding” within the meaning of Rule 60(b). The District Court thus had the authority to reopen Waetzig’s case.
Waetzig’s legal claim lives to fight another day, but maybe not that many more. For while Halliburton put up a valiant defense of the Tenth Circuit’s Rule 60(b) decision at the Supreme Court, its heart wasn’t really in it. Instead, Halliburton devoted many of the pages of its Supreme Court brief (and a good chunk of its oral argument) to the point that it doesn’t matter whether the District Court had the authority to reopen Waetzig’s dismissed case under Rule 60(b) because it didn’t have jurisdiction to set aside the arbitration award issued in Halliburton’s favor. But the Court gave that argument short shrift: It granted cert only on the question of whether the District Court had the authority under Rule 60(b) to reopen the case. And whether it did or didn’t wasn’t affected by whether it had the authority to then go on and grant Waetzig the relief he sought (namely vacating the arbitration award). The Court thus left “any subsequent jurisdictional questions” to the lower courts on remand. And if we had to guess, we suspect the Tenth Circuit will once again rule for Halliburton, only this time on the perhaps sounder basis that even if the District Court could reopen the case, it couldn’t free Waetzig from the arbitration award.
ANOTHER RETAILER SUED: TCPA Lawsuit Bites Sol de Janeiro in the Bum Bum
Hello again, TCPAWorld! After a grueling 2.5 months of bar prep (phew), I’m back! It’s wonderful being in the office again and I’m excited to turn my attention back towards all things Troutman Amin (and away from certain bar subjects that shall not be named).
2025 has already been jam packed with TCPA updates, rulings, and new trends, and as I was trying to catch up, I came across a familiar brand in a sticky situation. If you frequent skincare TikTok or the revered aisles of Sephora (like I do), you likely know Sol de Janeiro (“Defendant”) as a popular body care and fragrance brand. Now personally, I wouldn’t mind a discount code or two for my next body butter purchase. However, a certain Amani Manning (“Plaintiff”) is kicking up quite a stink about text messages she claims to have received, allegedly a little too early and in violation of the TCPA.
In Amani Manning v. Sol de Janeiro USA, Inc. (N.D. CA March 03, 2025), Plaintiff alleges that she received two “unauthorized” telephone solicitations from Defendant at 6:05 AM and 7:38 AM in her time zone.
Plaintiff alleges that these communications were sent in violation of TCPA’s call time limitations, which prohibit any telephone solicitation to a residential telephone subscriber before 8 a.m. or after 9 p.m. 47 C.F.R. § 64.1200(c)(1). The Complaint also states that Plaintiff’s telephone number has a California area code – presumably to counter any suggestion that she received text messages intended for a different time zone.
Plaintiff seeks to represent the following class: All persons in the United States who from four years prior to the filing of this action through the date of class certification (1) Defendant, or anyone on Defendant’s behalf, (2) placed more than one marketing text message within any 12-month period; (3) where such marketing text messages were initiated before the hour of 8 a.m. or after 9 p.m. (local time at the called party’s location).
Now as the Czar pointed out, the TCPA only restricts “telephone solicitations” to call time hours—which means calls made with consent or an established business relationship with the recipient are likely not subject to these restrictions. Interestingly, Plaintiff does not specifically allege that she did not consent to any telephone solicitations – only that she “never signed any type of authorization permitting or allowing Defendant to send them telephone solicitations before 8 am or after 9 pm.” However, the Complaint goes on to state, “If Plaintiff’s claim that Defendant routinely transmits telephone solicitations without consent is accurate, Plaintiff and the Class members will have identical claims capable of being efficiently adjudicated and administered in this case.” Confusing, but we’ll keep an eye on what happens.
In the meantime, Sol de Janeiro is just one of many retailers that have been named as defendants in recent call time lawsuits. See IN HOT WATER: Louisiana Crawfish Company Sued Over Early-Morning Text Messages – TCPAWorld, RUDE AWAKENING: Wellness Company Allegedly Sends 5:00 A.M. Texts To Consumers Without Consent. – TCPAWorld, and this one the Czar talked about just this morning: TRENDING: TCPA Class Action Against Steve Madden Shows Clear Trend of SMS Club Suits Against Retailers – TCPAWorld.
SCOTUS Rules that Trademark Infringement Plaintiff Cannot Marry ‘Single’ Dewberry Defendant to Affiliates’ Profits
Go-To Guide:
Supreme Court rules trademark infringement plaintiffs can’t claim profits from defendant’s corporate affiliates.
Decision emphasizes importance of corporate separateness in trademark cases.
Trademark plaintiffs may consider broader strategies when identifying potential defendants.
Courts may still examine “economic realities” to determine a defendant’s true financial gain.
On Feb. 26, 2025, the U.S. Supreme Court issued its opinion in Dewberry Group, Inc. v. Dewberry Engineers Inc. The Court considered whether a defendant in a trademark infringement suit can be held liable for the profits its non-party corporate affiliates earn under the provisions of Lanham Act Section 35(a) that allow for recovery of “the defendant’s profits.” In a decision that may have ramifications for how future trademark infringement cases are litigated, the Supreme Court held that a court can award only profits that are properly ascribable to the defendant. Background
The case involved two companies – Dewberry Engineers and Dewberry Group – doing business in the commercial real estate sector in the southeastern United States.
Dewberry Group, owned by developer John Dewberry, provided shared legal, financial, operational, and marketing services to Mr. Dewberry’s various separately incorporated companies, each of which owned a piece of commercial property for lease. The lessors kept their rental income on their own books and paid Dewberry Group below-market services fees. As a result, shared service provider Dewberry Group operated at a loss for decades while the property-owning affiliates raked in tens of millions of dollars in profit.
For nearly two decades, Dewberry Engineers, owner of a federal trademark registration for the mark DEWBERRY, tried to enforce its rights against Dewberry Group. A 2007 settlement agreement between the parties fell apart when Dewberry Group, about a decade later, resumed using the “Dewberry” name in materials marketing its affiliates’ properties.
Dewberry Engineers sued Dewberry Group for trademark infringement under the Lanham Act and won. Finding Dewberry Group’s infringement “intentional, willful, and in bad faith,” the district court awarded Dewberry Engineers “the defendant’s profits” under Lanham Act Section 35(a). The sole named defendant in the case – Dewberry Group – reported no profits. Nonetheless, the district court, finding that the profits from Dewberry Group’s conduct “show up exclusively on the [property-owning affiliates’] books,” decided to treat Dewberry Group and its affiliates “as a single corporate entity” to reflect the “economic reality” of their relationship. The court thus totaled the profits the affiliates earned during the years of Dewberry Group’s infringement and awarded nearly $43 million to Dewberry Engineers.
On appeal, a divided Court of Appeals for the Fourth Circuit affirmed the profits award, adopting the district court’s rationale that the “economic reality” of Dewberry Group’s relationship with its affiliates mandated that all the companies be treated “as a single corporate entity.” Thereafter, the Supreme Court granted Dewberry Group’s petition for certiorari.
The Supreme Court Opinion
Justice Kagan, writing for a unanimous Court, began her analysis by examining the language of Lanham Act Section 35(a), which provides in relevant part that a prevailing plaintiff in a trademark infringement suit may recover “the defendant’s profits.” Noting that the term “defendant” is not specifically defined in the Lanham Act, Justice Kagan looked to the definition in Black’s Law Dictionary, which defines “defendant” as “the party against whom relief or recovery is sought in an action or suit.” In this case, Justice Kagan noted, the “defendant” is “Dewberry Group alone” and that Dewberry Engineers “chose not to add the Group’s property-owning affiliates as defendants.”
Justice Kagan observed that treating Dewberry Group and its affiliates as a single corporate entity ran afoul of the principle of corporate separateness. She reasoned that “if corporate law treated all affiliated companies as (in the district court’s phrase) ‘a single corporate entity,’ we might construe ‘defendant’ in the same vein” and “sweep[ ] in the named defendant’s affiliates because they lack a distinct identity.” But as Justice Kagan pointed out, “[i]t is long settled as a matter of American corporate law that separately incorporated organizations are separate legal units with distinct legal rights and obligations.” In the absence of any exception to this rule, such as piercing the corporate veil to prevent fraudulent conduct (which Dewberry Engineers neither alleged nor proved), “the demand to respect corporate formalities remains.”
Justice Kagan dispensed with Dewberry Engineers’ argument that a court may take account of an affiliate’s profits under the so-called “just sum provision” in Section 35(a). Under that provision, “[i]f the court shall find that the amount of the recovery based on profits is either inadequate or excessive, the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances.” Dewberry Engineers argued that this provision entitled courts to determine that a different figure than a defendant’s profits better reflects the “defendant’s true financial gain.” But as Justice Kagan wrote, the courts below did not invoke the just sum provision and, in any event, “the fear that ‘corporate formalities’ would . . . insulate infringing conduct from any penalty . . . cannot justify ignoring the distinction between a corporate defendant and its separately incorporated affiliates.” Because the courts below approved an award including non-defendants by treating the defendant and its affiliates as a single corporate entity, their holding “went further than the Lanham Act permits.”
The Court expressed no view on Dewberry Engineers’ understanding of the just sum provision, because whether or how they could have used the provision was not properly before the Court. Importantly, the Court left open the possibility that a lower court, even without relying on the just sum provision, could “look behind a defendant’s tax or accounting records to consider ‘the economic realities of a transaction’ and identify the defendant’s ‘true financial gain.’”
In a concurring opinion, Justice Sotomayor emphasized that Section 35(a) directs courts to calculate the defendant’s profits “subject to the principles of equity.” Those principles, she wrote, “support the view that companies cannot evade accountability for wrongdoing through creative accounting.” Thus, the text of the Lanham Act “forecloses any claim that Congress looked favorably on easy evasion.”
Takeaways
The Court’s opinion leaves no doubt that a trademark infringement plaintiff cannot rely on the “single corporate entity” approach to capture the profits of a parent company, child company, sister company, or other affiliate. Accordingly, plaintiffs should consider casting a wide net in their initial complaints and be prepared to amend their complaints to include additional defendants as discovery progresses. In anticipation of such wider nets, both intracompany and intercompany agreements should be thoughtful and strategic in their approaches to indemnification, knowing that the likelihood of an entity having to prove its non-involvement in alleged wrongdoing may increase.
Because the Supreme Court’s ruling was narrow, in future cases, courts may face the issues of whether and how to examine the economic realities of complex corporate structures involving multiple interrelated affiliates. This may involve extensive fact discovery and expert testimony on not only the propriety of such arrangements (i.e., whether the defendant sought to divert profits through accounting sleight of hand) but also consideration of whether the profits at issue can, in Justice Kagan’s words, be “properly ascrib[ed] to the defendant itself.”
The focus on “principles of equity” Justice Sotomayor espoused may provide a more viable approach to the question of whose profits to measure than the just sum provision Dewberry Engineers advanced before the Supreme Court, which primarily asks how much, not whom. The just sum provision intends to give a district court leeway to increase or decrease an award of the defendant’s profits considering the circumstances; it is not meant to allow a plaintiff to sweep up the profits non-party affiliates earned. On the other hand, because profit disgorgement is an equitable remedy, the Supreme Court’s decision may encourage trademark infringement plaintiffs to invoke the equitable powers the Lanham Act bestows upon courts to attempt to unweave creative accounting, tax, and corporate schemes and arrive at an award that reflects the defendant’s true financial gain.
Supreme Court Expands Rule 60(b) Relief: Implications for Voluntary Dismissals and Arbitration Challenges
In Waetzig v. Halliburton Energy Services, Inc., the U.S. Supreme Court expanded the scope of Federal Rule of Civil Procedure 60(b), holding that a voluntary dismissal without prejudice under Rule 41(a) constitutes a “final proceeding” eligible for post-dismissal relief. This decision may open the door for plaintiffs to attempt to reinstate voluntarily dismissed claims, raising concerns about litigation finality and increasing risks for corporate defendants.
Case Overview
Gary Waetzig, a former Halliburton employee, sued the company for age discrimination in federal court before voluntarily dismissing his case without prejudice to pursue arbitration. After losing in arbitration, Waetzig sought to reopen his dismissed federal lawsuit and vacate the arbitration award under Rule 60(b), arguing his dismissal was filed in error. The district court granted Waetzig Rule 60(b) relief and vacated the arbitration award, but the Tenth Circuit reversed, holding that a voluntary dismissal without prejudice does not satisfy Rule 60(b)’s definition of a “final judgment, order, or proceeding.” On appeal, the Supreme Court reversed the Tenth Circuit, finding that Waetzig’s voluntary dismissal indeed qualified as a “final proceeding” eligible for Rule 60(b) relief. However, the Supreme Court declined to address whether the district court had jurisdiction over Waetzig’s motion to vacate the arbitration award or whether the district court’s decision vacating the arbitration award was otherwise proper.
Key Takeaways from the Supreme Court’s Decision
1. Voluntary Dismissals as “Final Proceedings” – The court determined that a voluntary dismissal without prejudice pursuant to Rule 41(a) is a “final proceeding” under Rule 60(b) because it removes the case from the docket and terminates active litigation. 2. General Rule for Voluntary Dismissals and Statute – When a plaintiff voluntarily dismisses a case without prejudice under Rule 41(a), the general rule is that the statute of limitations continues to run as if the case had never been filed. If the plaintiff refiles after the limitations period has expired, the claim is typically barred unless a state or federal savings statute applies. Waetzig does not alter this rule; it does not grant an automatic tolling effect to voluntary dismissals. 3. Implications for Statute of Limitations – If a court grants Rule 60(b) relief from a voluntary dismissal, the original case is reinstated rather than refiled as a new lawsuit. This could allow plaintiffs to bypass the statute of limitations issue because the original filing date remains intact. The court in Waetzig does not explicitly address this issue, but the risk arises because Rule 60(b) relief is often granted without regard to whether the statute of limitations has since expired. Defendants may now face arguments from plaintiffs that reopening a dismissed case under Rule 60(b) is permissible even if the statute of limitations would otherwise have barred refiling as a new lawsuit. 4. State “Savings Statutes” – Many states have “savings statutes” that allow a plaintiff to refile a voluntarily dismissed lawsuit within a specified period (e.g., six months or one year), even if the statute of limitations otherwise has expired. Under Waetzig, the availability of Rule 60(b) relief after a voluntary dismissal could allow plaintiffs to argue that they should not be constrained by savings statutes because they are reopening the original case rather than refiling it. Courts may need to address whether Rule 60(b) relief can extend beyond the time limits imposed by savings statutes, further complicating the statute of limitations analysis. 5. Arbitration Finality at Risk – Plaintiffs who dismiss cases without prejudice pre-arbitration may now attempt to vacate arbitration awards by moving to reopen those originally dismissed lawsuits, creating an additional avenue for challenging arbitration results. 6. Broader Interpretation of “Finality” – The Supreme Court rejected Halliburton’s argument that “final” under Rule 60(b) should align with appellate jurisdiction principles requiring a decision on the merits, broadening the interpretation of Rule 60(b).
Strategic Implications and Risk-Mitigation Considerations for Corporate Defendants
1.
Strengthen Language in Arbitration Agreements – Waetzig introduces a potential mechanism to challenge arbitration outcomes, requiring companies to reassess arbitration agreements and ensure dismissals are carefully structured. Defense counsel should consider insisting on stronger arbitration clauses, such as explicit waiver provisions in voluntary dismissals, to potentially limit post-dismissal challenges and reinforce that arbitration is binding and cannot be undone via procedural maneuvers. Consider updating arbitration agreements to include language such as, “Any dismissal of litigation arising from this Agreement, whether voluntary or involuntary, shall be deemed final and irrevocable, and Plaintiff waives any right to seek relief under Federal Rule of Civil Procedure 60(b) or any similar rule.”
2.
Monitor Previously Dismissed Claims – While Rule 60(b) motions generally must be filed within a “reasonable time,” motions under Rule 60(b)(1), (b)(2), and (b)(3)—based on mistake, newly discovered evidence, or fraud—must be filed within one year. Additionally, counsel may wish to argue that any attempt to reopen a dismissed case after the statute of limitations has expired is inherently unreasonable, as it causes prejudice and undue delay.
3.
Document Plaintiff Representations Regarding Dismissal – Consider documenting evidence that a plaintiff dismissed their case knowingly and voluntarily to reduce the chance of a successful Rule 60(b) motion. If a plaintiff voluntarily dismisses a case, defense counsel may request plaintiff confirm in writing that they understand the dismissal is final and that they are choosing to forgo litigation, rather than seeking a stay or alternative resolution. Additionally, in jurisdictions with savings statutes that permit refiling within a limited period (e.g., six months or one year), defendants may wish to ensure that any written acknowledgment from plaintiff explicitly states that they are aware of and voluntarily assuming the risk of any applicable statute of limitations consequences.
4.
Include Protections in Stipulation of Dismissal – To reduce the risk of plaintiffs attempting to reopen a case under Rule 60(b), counsel should consider including language in the Stipulation of Dismissal that plaintiff waives the right to reopen the case or otherwise seek relief under Federal Rule of Civil Procedure 60(b).
The Supreme Court’s decision in Waetzig expands the scope of Rule 60(b) relief, creating new risks for defendants by enabling plaintiffs to revive voluntarily dismissed claims, even in scenarios where statute-of-limitations concerns might otherwise arise. While the decision creates uncertainty, defendants can address potential exposure through updated litigation strategies, stronger arbitration agreements, and carefully structured dismissals designed to protect against future challenges.
Mass. Appeals Court Clarifies Chapter 93A Application in Landlord-Tenant Disputes
In another appeal of a summary process action, the Massachusetts Appeals Court addressed two questions related to Chapter 93A on appeal in 133 W. Main St. Realty, LLC v. Kimball. First, whether the landlord was engaged in trade or commerce when renting a residential property to the tenants, and second, whether a technical violation of the state sanitary code warranted actual damages under Chapter 93A, as opposed to statutory damages.
After trial, the Housing Court issued judgment in the landlord’s favor for unpaid rent and costs but awarded the tenants possession of the property along with damages for the Chapter 93A violation. The Appeals Court agreed with the Housing Court that a personal decision to allow an acquaintance to reside at the recently purchased property to help him get on his feet “morphed into” a transaction occurring in a business context such that Chapter 93A applied. The Appeals Court concluded that the “totality of facts” sufficiently supported the Housing Court’s conclusion. Amongst those facts were that (1) the premises was owned by an LLC without evidence the LLC managers ever lived there; (2) the rental was not an isolated rental property for the LLC, as it managed other residential and commercial properties; (3) one of the LLC managers worked with the tenants to resolve issues, pay bills, and co-managed the premises and other properties owned or operated through another LLC manager; and (4) other tenants previously resided at the premises.
As to the second issue, the Massachusetts state sanitary code seeks to protect the health, safety, and well-being of occupants and the general public by requiring that the owner of a dwelling provide water, sewer, and electricity absent a written agreement for them to be provided by a dwelling occupant. Here, the landlord and tenant had a verbal agreement that the tenant was responsible for utilities. The failure to reduce the agreement to writing, according to the Appeals Court, amounted to technical state sanitary code and Chapter 93A violations. The Housing Court awarded the tenants the exact amount that they paid for water and sewer utilities. However, since the violation was only a technical one, the tenants had affirmatively agreed to pay for utilities since the tenancy’s inception, and the Housing Court made explicit and repeated findings that the violation did not constitute a breach of the covenant of quiet enjoyment, the Housing Court erred in awarding actual rather than nominal damages. As such, the Appeals Court upheld the liability determination but vacated and remanded the amount of those damages to the Housing Court for recalculation.
It does not appear that the Appeals Court properly considered and applied the injury requirement under Chapter 93A, § 9 when reaching the second conclusion. Although the Appeals Court correctly cited Tyler v. Michaels Stores, Inc., 464 Mass. 492, 502 (2013) and noted that a plaintiff must allege and ultimately prove a separate and distinct injury that arose from the Section 2 violation, it does not appear the Appeals Court required a separate and distinct injury. Instead, it appears that the Appeals Court relied solely on violation of the State Sanitary Code (which it concluded automatically violated 940 Code Mass. Regs. § 3.16(3) and amounted to a per se Section 2 violation). According to the Massachusetts Supreme Judicial Court in Klairmont v. Gainsboro Restaurant, Inc., 465 Mass. 165, 174 (2013), however, not every violation of the law violates 940 Mass. Code Regs. § 3.16(3) and, in turn, Section 2. Rather, code violations run afoul of Section 2 when “the conduct leading up to the violation is both unfair or deceptive.” In Klairmont, the SJC dealt with a building code violation and the argument that the code violation also violated 940 C.M. R. § 3.16(3), which triggered a per se Section 2 violation. The SJC, however, rejected the argument and, when doing so, concisely explained that the fact that a building code may qualify as a regulation “meant for the protection of the public’s health, safety, or welfare” (940 Mass. Code Regs. § 3.16(3)), does not mean that a violation of the building code necessarily qualifies as a violation of c. 93A, § 2. Section 2(a) proscribes unfair or deceptive acts or practices in the conduct of trade or commerce. Although the language of 940 Code Mass. Regs. § 3.16(3) “is unquestionably broad, by its terms it imposes the substantive limitation that the law or regulation at issue must be intended to protect consumers, and we further read the regulation as being bound by the scope of c. 93A, § 2(a).” As such, under 940 Code Mass. Regs. § 3.16(3), a violation of a law or regulation, including a building code violation, would violate Section 2 “only if the conduct leading to the violation is both unfair or deceptive and occurs in trade or commerce.”
Finally, the SJC recognized that whether a particular violation or violations qualify as unfair or deceptive conduct “is best discerned ‘from the circumstances of each case.’” It appears, however, that the Appeals Court adopted the more lenient per se violation without further analysis of Klairmont’s requirements.
New Lawsuit Challenges Trump Administration’s Termination of TPS for Haiti and Venezuela
Haitian-Americans United, Inc., Venezuelan Association of Massachusetts, UndocuBlack Network, Inc., and four individual Haitian and Venezuelan migrants residing in Boston filed a lawsuit in U.S. District Court for the District of Massachusetts on March 3, 2025, challenging the Department of Homeland Security’s (DHS’s) decision to terminate Haitian and Venezuelan Temporary Protected Status (TPS). Haitian-Americans United Inc., et al. v. Trump, No. 1:25-cv-10498.
The latest lawsuit joins two existing suits filed in the U.S. District Court for the Northern District of California and the U.S. District Court for the District of Maryland on Feb. 20, 2025, challenging the termination of Venezuela TPS.
The suit alleges that DHS Secretary Kristi Noem lacked legal authority to vacate former DHS Secretary Alejandro Mayorkas’ July 1, 2024, decision to grant an 18-month extension of TPS for Haiti, and his Jan. 17, 2025, decision to grant an 18-month extension of TPS for Venezuela.
The complaint cites “dehumanizing and disparaging statements” that President Donald Trump has made against Haitian and Venezuelan migrants, including the claim that Haitians in Springfield, Ohio, were eating dogs and cats.
The suit further contends that the Trump Administration is discriminating against both groups of migrants based on race, ethnicity, or national origin in violation of the Fifth Amendment’s Equal Protection Clause.
In addition to violations of the Equal Protection Clause, the suit cites violations of the Administrative Procedure Act. It asks the court to declare that former DHS Secretary Mayorkas’ 18-month extensions of Haiti and Venezuela TPS remain in effect and to enjoin enforcement of Secretary Noem’s decisions to terminate Haiti and Venezuela TPS.
The plaintiffs request that the court issue an injunction “preliminarily and permanently” precluding DHS from implementing or enforcing the 2025 Haiti Vacatur, the 2025 Venezuela Vacatur, and the 2025 Venezuela Termination.
Year in Review: Top Insurance Cases of 2024
Still feeling the love from Valentine’s Day, this 2024 Year in Review highlights the most swoon-worthy coverage decisions of 2024 and offers a glimpse of the future of insurance coverage litigation in 2025 and beyond.
In 2024, D&O coverage and core insurance law principles were the true heartthrobs of the year, while rulings on environmental, social, and governance (ESG) issues showed that insurance disputes can arise in any situation. But the real cupid’s arrow? Policy interpretation—still the key to unlocking these cases. As we reflect on the year, this edition of our Year in Review highlights the most love-worthy coverage decisions of 2024 and examines the evolving landscape of insurance coverage litigation heading into 2025.
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First Class Action Filed Under Washington’s MY Health MY Data Act Draws Parallels to Previous SDK Litigation
On February 10, 2025, the first class action complaint was filed pursuant to Washington’s MY Health MY Data Act (“MHMDA”), Wash. Rev. Code Ann. § 19.373.005 et seq. See Maxwell v. Amazon.com, Inc. et al., Case No. 2:25-cv-261 (W.D. Wash.). Broadly, the lawsuit alleges that, by using software development kits (“SDKs”), defendants Amazon.com, Inc. and Amazon Advertising, LLC harvested the location data of tens of millions of Americans without their consent and used that information for profit. The Complaint’s core allegations in that regard are akin to previous SDK class actions, but the MHMDA claim is new.
Software Development Kits:
The Maxwell lawsuit focuses on an SDK allegedly licensed by Amazon to a variety of mobile applications. SDKs are bundles of pre-written software code used in mobile and other applications. Many SDKs include code required in virtually every app: APIs, code samples, document libraries, and authentication tools. Rather than writing code from scratch, developers often license SDKs to streamline the app development process. In theory, SDKs allow developers to build apps in a fast and efficient manner. However, many SDKs also gather user information, including location data.
The MY Health MY Data Act:
The MHMDA came into effect on March 31, 2024, and regulates the collection and use of “consumer health data.” The term is broadly defined as personal information linked or reasonably linkable to a consumer and identifies the consumer’s physical or mental health status, including “[p]recise location information that could reasonably indicate a consumer’s attempt to acquire or receive health services or supplies.” Wash. Rev. Code Ann. § 19.373.010. Among other things, regulated entities must provide consumers with a standalone consumer health data privacy policy; adhere to consent and authorization requirements; refrain from prohibited geofencing practices; comply with valid consumer requests; and enter into certain agreements with their processors. Unlike some other relatively similar state laws, the MHMDA includes a broad private right of action.
The Complaint:
Plaintiff Cassaundra Maxwell alleges that Amazon’s SDKs, operating in the background of other applications like the Weather Channel and OfferUp apps, unlawfully obtained user location data without consumers’ knowledge or consent. More specifically, Plaintiff claims that “Amazon collected Plaintiff’s consumer health data, including biometric data and precise location information that could reasonably indicate a consumer’s attempt to acquire or receive health services or supplies” without sufficient notice or consent. Plaintiff further asserts that, once the data was harvested, Amazon used it for its own targeted advertising purposes and for sale to third parties.
Plaintiff seeks to certify a class consisting of all natural persons residing in the United States whose mobile device data was obtained by Defendants through the Amazon SDK. The Complaint includes seven purported causes of action: (1) Federal Wiretap Act violations, (2) Stored Communications Act violations, (3) Computer Fraud and Abuse Act violations, (4) Washington Consumer Protection Act violations, (5) MHMDA violations, (6) invasion of privacy, and (7) unjust enrichment.
Historical Perspective:
Despite the new MHMDA claim, the Maxwell v. Amazon Complaint is similar to those from prior SDK cases. In Greenley v. Kochava, Inc., 684 F. Supp. 3d 1024 (S.D. Cal. 2023), for example, California residents brought a putative class action alleging improper data collection and dissemination by data broker Kochava. Similar to the Maxwell case, the plaintiffs in Greenley claimed that Kochava developed and coded its SDK for data collection and embedded it in third-party apps. They claimed the SDK secretly collected app users’ data, which was then packaged by Kochava and sold to clients for advertising purposes. Much like the Maxwell litigation, the improper interception and use of location data was a focal point of the Greenley plaintiffs’ allegations. Whereas the action against Amazon relies on the MHMDA, other Washington state law, and federal statues, the Greenley plaintiffs’ claims were rooted in alleged violations of California state law, including the California Computer Data Access and Fraud Act (CDAFA), California Invasion of Privacy Act (CIPA), and California Unfair Competition Law (UCL). In Greenley, Defendants filed a motion to dismiss, arguing inter alia that Plaintiff lacked standing. The Court denied the motion, holding that, “[T]he Complaint plausibly alleges Defendant collected Plaintiff’s data” and “there is no constitutional requirement that Plaintiff demonstrate lost economic value.” Greenley v. Kochava, Inc., 684 F. Supp. 3d 1024 (S.D. Cal. 2023).
Although the facts vary, some recent cases suggest courts may still be receptive to lack of standing arguments under certain circumstances. In a class action in the Southern District of New York, plaintiff claimed Reuters unlawfully collected and disclosed IP address information. Xu v. Reuters News & Media Inc., 1:24-cv-2466 (S.D.N.Y.). Plaintiff alleged violations of the California Invasion of Privacy Act. The Court dismissed Plaintiff’s claims for lack of standing, holding that the IP address used by Plaintiff to visit Reuters’ website does not constitute sensitive or personal information. Xu v. Reuters News & Media Inc., No. 24 CIV. 2466 (PAE), 2025 WL 488501 (S.D.N.Y. Feb. 13, 2025). The Complaint included no allegations of physical, monetary, or reputational harm. The Court noted that Plaintiff did not claim he received any targeted advertising (much less that he was harmed by such advertising) or that Reuters collected sensitive or personal identifying information data that could be used to steal his identify or inflict similar harm. See also Gabrielli, v. Insider, Inc., No. 24-CV-01566 (ER), 2025 WL 522515, at *4 (S.D.N.Y. Feb. 18, 2025) (holding that, “Not only does an IP address fail to identify the actual individual user, but the geographic information that can be gleaned from the IP address is only as granular as a zip code.”)
Takeaways:
Although the Maxwell Complaint against Amazon relies on the recently enacted MHMDA, its underlying allegations largely track previous SDK claims. As states continue to enact privacy legislation granting private rights of action, businesses should expect to see SDK complaints repackaged to fit the confines of each statute. Until courts sort through these types of claims over the course of the next several years, we may see many more cases follow in Maxwell’s footsteps. Businesses, particularly those in the healthcare space, should be mindful about their use of SDKs going forward.
BACK TO BASICS: Court Dismisses Plaintiff’s TCPA Case Against Liberty Bankers On the Simplest Possible Grounds–But Its Lawyers Missed it
For anyone who wonders why it is so important to hire attorneys that know the TCPA inside and out, here is another fun example.
In Gutman v. Liberty Bankers Insurance, 2025 WL 615128 (D. N.J. Feb. 26, 2025) a court dismissed a TCPA suit after conducting its own review of the complaint and determining it was insufficient on obvious grounds.
Interestingly, however, the Defendant’s own lawyers had missed the key issues and moved to dismiss on unrelated– and irrelevant–grounds.
In other words, Defendant should have lost because it challenged the wrong issues. But the Court viewed the flaws in the case as so obvious that it could not in good conscious allow the case to proceed.
Holy moly.
In analyzing the motion the Court said the following: “As an initial matter, neither party meaningfully addresses whether the Complaint meets the elements required to plead either claim under the TCPA.”
I mean, that’s just nuts. The entire concept of a 12(b)(6) is to challenge the elements of a claim are not pleaded.
But the Court did the analysis for Liberty Bankers and determined:
The regulated technology claim fails because no allegations existed that an ATDS was used; and
The DNC claim fails because plaintiff did not allege residential usage of his phone or that he received more than one solicitation in a 12 month period.
Anyone that practices TCPA defense would have spotted those issues immediately.
But per the Court’s order the Defendant simply missed those issues and focused on the “failure” to specifically allege the dates and times of phone calls– which is never going to win as a motion to dismiss ground.
Eesh.
But either way Defendant walked away with the W and TCPAWorld walks away with a reminder– don’t expect the court to bail you out.
A Brief Reminder About the Florida Information Protection Act
According to one survey, Florida is fourth on the list of states with the most reported data breaches. No doubt, data breaches continue to be a significant risk for all business, large and small, across the U.S., including the Sunshine State. Perhaps more troubling is that class action litigation is more likely to follow a data breach. A common claim in those cases – the business did not do enough to safeguard personal information from the attack. So, Florida businesses need to know about the Florida Information Protection Act (FIPA) which mandates that certain entities implement reasonable measures to protect electronic data containing personal information.
According to a Law.com article:
The monthly average of 2023 data breach class actions was 44.5 through the end of August, up from 20.6 in 2022.
While a business may not be able to completely prevent a data breach, adopting reasonable safeguards can minimize the risk of one occurring, as well as the severity of an attack. Additionally, maintaining reasonable safeguards to protect personal information strengthens the businesses’ defensible position should it face an government agency investigation or lawsuit after an attack.
Entities Subject to FIPA
FIPA applies to a broad range of organizations, including:
• Covered Entities: This encompasses any sole proprietorship, partnership, corporation, or other legal entity that acquires, maintains, stores, or uses personal information…so, just about any business in the state. There are no exceptions for small businesses.
• Governmental Entities: Any state department, division, bureau, commission, regional planning agency, board, district, authority, agency, or other instrumentality that handles personal information.
• Third-Party Agents: Entities contracted to maintain, store, or process personal information on behalf of a covered entity or governmental entity. This means that just about any vendor or third party service provider that maintains, stores, or processes personal information for a covered entity is also covered by FIPA.
Defining “Reasonable Measures” in Florida
FIPA requires:
Each covered entity, governmental entity, or third-party agent shall take reasonable measures to protect and secure data in electronic form containing personal information.
While FIPA mandates the implementation of “reasonable measures” to protect personal information, it does not provide a specific definition, leaving room for interpretation. However, guidance can be drawn from various sources:
Industry Standards: Adhering to established cybersecurity frameworks, such as the Center for Internet Security’s Critical Security Controls, can demonstrate reasonable security practices.
Regulatory Guidance: For businesses that are more heavily regulated, such as healthcare entities, they can looked to federal and state frameworks that apply to them, such as the Health Insurance Portability and Accountability Act (HIPAA). Entities in the financial sector may be subject to both federal regulations, like the Gramm-Leach-Bliley Act, and state-imposed data protection requirements. The Florida Attorney General’s office may offer insights or recommendations on what constitutes reasonable measures. Here is one example, albeit not comprehensive.
Standards in Other States: Several other states have outlined more specific requirements for protecting personal information. Examples include New York and Massachusetts.
Best Practices for Implementing Reasonable Safeguards
Very often, various data security frameworks have several overlapping provisions. With that in mind, covered businesses might consider the following nonexhaustive list of best practices toward FIPA compliance. Many of the items on this list will seem obvious, even basic. But in many cases, these measures either simply have not been implemented or are not covered in written policies and procedures.
Conduct Regular Risk Assessments: Identify and evaluate potential vulnerabilities within your information systems to address emerging threats proactively.
Implement Access Controls: Restrict access to personal information to authorized personnel only, ensuring that employees have access solely to the data necessary for their roles.
Encrypt Sensitive Data: Utilize strong encryption methods for personal information both at rest and during transmission to prevent unauthorized access.
Develop and Enforce Written Data Security Policies, and Create Awareness: Establish comprehensive data protection policies and maintain them in writing. Once completed, information about relevant policies and procedures need to shared with employees, along with creating awareness about the changing risk landscape.
Maintain and Practice Incident Response Plans: Prepare and regularly update a response plan to address potential data breaches promptly and effectively, minimizing potential damages. Letting this plan sit on the shelf will have minimal impact on preparedness when facing a real data breach. It is critical to conduct tabletop and similar exercises with key members of leadership.
Regularly Update and Patch Systems: Keep all software and systems current with the latest security patches to protect against known vulnerabilities.
By diligently implementing these practices, entities can better protect personal information, comply with Florida’s legal requirements, and minimize risk.
TRENDING: TCPA Class Action Against Steve Madden Shows Clear Trend of SMS Club Suits Against Retailers
Well the uptick has become a deluge and there is a very clear trend in new TCPA class actions right now. The Plaintiff’s bar–particularly our “friends” at Jibrael S. Hindi’s shop–are focused on text club messaging engagement outside of the TCPA’s timing windows.
For instance in a new suit against footwear company Steve Madden, Hindi’s client VALERIA TORRES claims she received text messages before 8 am:
As a result the Plaintiff is suing on behalf of the following class:
All persons in the United States who from four years prior tothe filing of this action through the date of class certification(1) Defendant, or anyone on Defendant’s behalf, (2) placedmore than one marketing text message within any 12-monthperiod; (3) where such marketing text messages wereinitiated before the hour of 8 a.m. or after 9 p.m. (local timeat the called party’s location).
As I have pointed out previously it is unclear whether the TCPA’s timing restrictions apply to calls and texts made with express written consent– but Hindi’s shop is apparently committed to finding out.
Will be interesting to see how this shakes out.
You can read the full complaint here: Madden Class Action