GIVE UP THE NAME!: TCPA Defendant Ordered to Identify BPO Involved in Allegedly Illegal Despite Ongoing Criminal Proceedings
Every once in a while I am asked by a client to “keep so and so out of the case.”
The rule that bind attorneys in civil litigation–especially in federal court– lean quite heavily in favor of discovery of known and relevant facts. And whereas a Defendant CERTAINLY has rights to avoid burdensome or needlessly intrusive discovery, simple questions like “who made the calls” or “where did the leads come from” are almost always going to result in a court requiring an answer (no matter how great and powerful your attorney might be.)
In MARGO SIMMONS v. WP LIGHTHOUSE LLC, No. 1:24-cv-01602-SEB-MKK (S.D. Ind. April 22, 2025), for instance, a Defendant refused to identify a BPO that may have made the calls at issue in its behalf.
As the story goes, the BPO provider “is subject to ongoing criminal proceedings” and the Defendant did not want to identify the BPO for fear it would incriminate itself. That is, if the calls the BPO is under investigation for were actually made at the behest of WP Lighthouse it fears being included in the criminal proceeding.
Pause.
Does WP Whitehouse really think the BPO isn’t going to give them up to the feds/state anyway?
Unpause.
The Court in Simmons made short work of the 5th amendment argument here. Businesses have no fifth amendment rights– which is odd since they seem certainly have other constitutional rights–so the court rejected the refusal to answer just that simply. It held the Defendant must identify the BPO and provide additional information related to its relationship with the BPO.
The defendant also refused to provide information regarding its dialing platform–RingCentral–so the Court also ordered it to provide copies of contracts, communications and other records.
Pretty clear lesson here– TCPA defendants can and should fight to protect themselves against needless and burdensome discovery, but simple stuff like the names of other companies involved with phone calls are almost always going to be ordered.
As if to drive home that point the Court in Simmons is going to issue SANCTIONS against the defendant. The Court found the Defendant’s position was not substantially justified and, as a result, intends to award Plaintiff’s counsel– the Wolf Anthony Paronich–the attorneys fees incurred in having to bring the motion to compel.
Eesh. Terrible.
But so it goes.
One last note here, INDIVIDUALS who are sued personally in TCPA cases DO have 5th amendment privilege because the TCPA does contain criminal penalties. So whereas the Defendant in Simmons could not raise the privilege, if you find yourself named personally in a TCPA lawsuit be sure to discuss the issue of privilege with your counsel.
Litigate or Arbitrate? Sixth Circuit Decision Looks at Timing of Sexual Harassment Claim
Can you compel arbitration with an employee who is alleging sexual harassment? You may recall that in 2022, Congress enacted the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), which precludes employers from requiring employees to arbitrate sexual harassment claims. But what if the alleged harassment occurred before the EFAA effective date? A recent Sixth Circuit opinion, Memmer v. United Wholesale Mortgage, LLC, answered this question.
EFAA Background
Congress passed the EFAA on the heels of the #MeToo movement, which highlighted that arbitration could be used to hinder public awareness of sexual harassment claims and potentially deter employees from pursuing claims, including class actions. Under the EFAA, an employee may voluntarily agree to proceed with arbitration of a sexual harassment claim, but an employer cannot compel as much.
The EFAA applies “with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act [March 3, 2022].”
But what does this language actually mean? Is it possible for the EFAA to apply to an instance of sexual harassment that occurred prior to March 3, 2022? If the employee left employment before the effective date, can you compel arbitration?
The Memmer Decision Sheds Some Light
Kassandra Memmer quit her job several months before the enactment date of the EFAA and filed a lawsuit alleging a variety of discrimination claims, including sexual harassment. Given her termination date, the alleged harassment occurred prior to March 3, 2022. Not surprisingly, the defendant moved to compel arbitration based on a valid agreement, arguing that the EFAA did not apply to the plaintiff’s claims. The district court agreed, and Memmer appealed.
The majority opinion, authored by Judge Karen Moore and joined by Judge Eric Clay, focused on the EFAA’s language in a statutory note, specifically Congress’s disjunctive language choice, “dispute or claim.” Given Congress’s use of both words, the Court held it had to ascribe a separate meaning to each word. On the one hand, a “claim” accrues when the cause of action accrues, meaning certain elements are in place to form an injury or legal claim ripe for vindication. As for the word “dispute,” the Court held that there is no “set legal framework” to determine when a dispute arises. Instead, the question involves determining exactly when the parties became adverse to one another.
By giving distinct meanings to the words “dispute” and “claim,” the Court held that even though the plaintiff’s claims accrued prior to the enactment date of the act, the dispute between the parties may have transpired after the enactment date of the EFAA. Accordingly, the Court remanded to the district court for consideration of exactly when the dispute arose between the parties.
Based on the Memmer case, employers who seek to compel arbitration of sexual harassment claims cannot rely only on the employee’s separation date. Instead, an employer must also consider when the dispute arose, or when some type of opposition between the parties transpired. The operative dates could be when the employee complains of harassment, when the employer investigates (or does not investigate) the sexual harassment complaint, when the plaintiff files an EEOC charge, or even when the plaintiff files a lawsuit. In the words of the Sixth Circuit, “[u]ltimately, when a dispute arises is a fact-dependent inquiry” that depends on the specific context of each case.
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OCR Reaches Settlements with Northeast Radiology and Guam Memorial Hospital Over HIPAA Security Rule Violations
The Department of Health and Human Services’ Office for Civil Rights (“OCR”) recently announced two HIPAA enforcement actions involving failures to safeguard electronic protected health information (“ePHI”) in violation of the HIPAA Security Rule. Both cases stem from investigations into incidents that exposed sensitive health data, underscoring ongoing federal scrutiny of entities that fail to implement core compliance measures such as HIPAA risk analyses, system activity reviews and workforce access controls, into their security programs.
Northeast Radiology, P.C. (“NERAD”) agreed to a $350,000 settlement after OCR launched an investigation into the company’s use of a medical imaging storage system (“PACS”) that lacked proper access controls. The investigation stemmed from a March 2020 breach report in which NERAD disclosed that, between April 2019 and January 2020, unauthorized individuals had accessed radiology images stored on its PACS server containing unsecured ePHI, gaining access to the ePHI of nearly 300,000 individuals. OCR found that NERAD had not conducted a comprehensive HIPAA risk analysis, failed to implement procedures to monitor access to ePHI, and lacked adequate policies to safeguard sensitive data.
In addition to the monetary settlement, NERAD agreed to a two-year corrective action plan that requires it to conduct a thorough HIPAA risk analysis to assess potential threats to the confidentiality, integrity, and availability of ePHI; implement a risk management plan to address identified security vulnerabilities; establish a process for regularly reviewing system activity, including audit logs and access reports; maintain and update written HIPAA policies and procedures; and enhance its HIPAA and security training program for all workforce members with access to PHI.
Guam Memorial Hospital Authority (“GMHA”) reached a $25,000 settlement following OCR’s investigation into two separate security incidents: a ransomware attack in December 2019 and a 2023 breach involving hackers who retained access to ePHI. Through its investigation, OCR determined that GMHA had failed to conduct an accurate and thorough HIPAA risk analysis to determine the potential risks and vulnerabilities to ePHI held in its systems.
As part of a three-year corrective action plan, GMHA is required to conduct a comprehensive HIPAA risk analysis to identify risks to the confidentiality, integrity and availability of its ePHI; implement a risk management plan to mitigate those risks; develop a process for regularly reviewing system activity, such as audit logs and access reports; and adopt written policies and procedures to comply with the HIPAA Privacy, Security and Breach Notification Rules. GMHA also must strengthen its HIPAA training program, review and manage access credentials to ePHI, and conduct breach risk assessments, and provide supporting documentation to OCR.
Together, these enforcement actions reinforce OCR’s expectation that covered entities and business associates adopt and maintain robust, enterprise-wide security programs capable of preventing, detecting and responding to threats that compromise ePHI.
Transatlantic Terminology: Skilled Artisan Could Equate UK, US Word Meanings
The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board unpatentability determination, finding that a skilled artisan would have found the term “sterile” in a UK publication to mean the same as the term “sterilized” in the United States. Sage Products LLC v. Stewart, Case No. 23-1603 (Fed. Cir. Apr. 15, 2025) (Reyna, Cunningham, Stark, JJ.)
Sage owns two patents related to a sterilized chlorhexidine product in a package, such as an applicator filled with an antiseptic composition for disinfecting skin. Becton, Dickinson and Company petitioned for inter partes review (IPR) of both patents. The Board relied on four key pieces of prior art, including one that was a UK publication, to find the challenged claims unpatentable. In instituting the IPR and evaluating the petition, the Board construed the term “sterilized” to mean that “the component or composition has been subjected to a suitable sterilization process such that sterility can be validated.” In the final written decision, the Board found that a skilled artisan at the time of the invention would have known, through education and experience, that the term “sterile,” as used in the UK prior art publication, is equivalent to the term “sterilized,” as used in the US and particularly in the Sage patents. Reviewing the totality of the evidence before it, including both parties’ experts’ reports and testimony, the Board determined the challenged claims were unpatentable. Sage appealed.
The Federal Circuit declined to overturn the Board’s findings, affirming the Board’s definition of a person of ordinary skill in the art and their understanding of the term “sterilized” at the time of the invention. The Court found that the Board did not ignore or disregard evidence but properly weighed the evidence before it, concluding that a skilled artisan having the education and experience required by the Board’s definition would know the differences between the US and UK regulatory standards for “sterile” and therefore would know that UK references to “sterile” items would satisfy the challenged claims’ requirement for “sterilized” items.
MORE IS REQUIRED: Senior Life Insurance Company Out of TCPA Class Action For Too Thin Allegations
Quick one for you this am TCPAWorld.
Senior Life Insurance Company–which has the unfortunate acronym of SLIC– was sued in a TCPA class action in Virginia recently. It moved to dismiss arguing the complaint did not actually state FACTS to show it made the calls at issue.
Earlier this week the Court agreed in Matthews v. Senior Life Insurance 2025 WL 1181789 (E.D. VA April 22, 2025).
Interestingly the complaint actually did allege the calls were “from” SLIC and that a caller was an “employee” of SLIC. Indeed Plaintiff even alleges that during one of the calls he was asked “regarding qualifying for SLIC life insurance.”
Still the court found these allegations too conclusory to state a claim. Unstated here is the assumption that someone else might have been making calls on SLIC’s behalf–which shows a pretty sophisticated court that understands SLIC’s business model likely does not include a bunch of captive w-2 agents calling out to sell policies.
Pretty interesting one that TCPA defendants should keep in mind.
New York Court of Appeals Holds That Child Victims Act Claims Brought Against the State of New York Must Meet Statutory Substantive Pleading Requirements
In a unanimous ruling, the New York Court of Appeals held that the New York State Legislature did not alter the substantive pleading requirements of Section 11(b) of the Court of Claims Act (the “Act”) for claims brought against the State of New York (the “State”) pursuant to the New York Child Victims Act (“CVA”).
In Chi Bartram Wright v. State of New York, the plaintiff alleged that between 1986 and 1990, when he was twelve to fifteen years old, he was repeatedly sexually assaulted by various men at a state-owned performance arts facility located in Albany, New York. The complaint filed in the Court of Claims failed to identify any of the men who allegedly assaulted plaintiff, the specific months and dates of the alleged assaults, why plaintiff was in the company of the alleged abusers multiple times over a four year period, or what repeatedly brought plaintiff to the performance arts facility. Instead, the complaint generally alleged that during the alleged time period, plaintiff was assaulted by various State employees and members of the general public while on the state-owned premises. Plaintiff sought over $75 million in damages based on various negligence-based causes of action, including negligent hiring, retention, direction, and supervision.
The complaint was filed in 2021 pursuant to the CVA, which temporarily relaxed the statute of limitations for asserting civil claims of childhood sexual abuse and provided a two-year lookback window during which previously time-barred civil actions could be filed.
The Court of Claims granted the State’s motion to dismiss the complaint, agreeing that the CVA had not relaxed the Act’s pleading requirements “and that a claim brought under [section 11(b) of the Act] must plead the date of the underlying conduct with sufficient definiteness to enable the State to promptly investigate its claim and to ascertain its potential liability.”
Plaintiff appealed the Court of Claims’s decision to the Appellate Division for the Third Department, which reversed the Court of Claims and held that the four-year period alleged in the complaint satisfied the Act’s requirements because the alleged acts occurred many decades ago when the plaintiff was a child. The Appellate Division further opined that requiring more specific or exact dates would not better enable the State to investigate the allegations. The Appellate Division further concluded that the general allegations were “sufficient to provide [the State] with an indication of the manner in which [Wright] was injured and how [the State] was negligent.” The Appellate Division granted the State’s motion for leave to appeal to the Court of Appeals.
In its appeal to the Court of Appeals, the State argued that the complaint should be dismissed for lack of subject matter jurisdiction due to its failure to comply with the specific pleading requirements of Section 11(b) of the Act, which requires that a claim “shall state the time when and place where such claim arose, the nature of the same, the items of damage or injuries claimed to have been sustained and . . . the total sum claimed” (Court of Claims Act § 11 [b]). The Court of Appeals agreed, holding that the complaint lacked the sufficient details required by Section 11(b) of the Act and, therefore, must be dismissed.
In rendering its decision, the Court of Appeals stated that the “CVA lacks any indication, let alone a clear expression, that the Legislature intended to exempt CVA claims from [S]ection 11(b)’s conditions; indeed, it does not amend or even mention the Act’s pleading requirements.” The Court further noted that the Legislature’s silence in the CVA as to Section 11(b)’s pleading requirements contrasted “sharply” with the Legislature’s amendment of Section 10 of the Act “by waiving the notice of claim requirement for claims revived by the CVA.” The Court further noted that if the Legislature had wanted to lower the pleading requirements of Section 11 and adjust the conditions on the State’s waiver of sovereign immunity for certain classes of claims, it knew how to do so as evidenced by its adoption of different pleading requirements for claims of unjust conviction and imprisonment. Accordingly, the Court held that Section 11(b)’s pleading requirements must be applied to CVA claims “in the same manner we would apply them to any other claim against the State.”
The Court of Appeals’ decision is a reminder that the suits brought against the State must meet the Act’s heightened pleading requirements. The Court of Appeal’s decision that the CVA does not alter the Act’s pleading requirements could not only have implications for other CVA lawsuits brought against the State that rely on general allegations, but also actions commenced under the Adult Survivors Act, which, like the CVA, temporarily provided a lookback window to allow previously time-barred claims to be filed. Additionally, it remains to be seen whether the Court of Appeal’s holding that the CVA does not create a different pleading standard will impact cases not involving the State that are filed pursuant to the New York CPLR’s notice-based pleading requirements.
If You Agree That Stock Issuance Was Not “Compensation, Salary, Or Income”, You May Want To Think Carefully Before Issuing A Form 1099
Ten years ago, Hovik Nazaryan sued Femtometrix, Inc. claiming that the company had issued shares to him than it had promised. The parties settled the lawsuit. The settlement agreement provided that the stock issued to Mr. Nazaryan “is not ‘compensation,’ ‘salary,’ or ‘income’ for services performed by [Nazaryan].” The settlement agreement further provided “The Settlement Stock, and any other stock issued by way of this Agreement, is being provided to [plaintiff] as ‘Founder’s Stock’ for his capital/equitable contributions to Femtometrix as alleged by [Nazaryan] in the Action, and the Parties will classify it as such, for all purposes to the extent permitted by law.” When Femtometrix later issued 1099 forms, Mr. Nazaryan sued. The action was removed to federal court but U.S. District Court Judge James V. Selna remanded the case to the Superior Court. Nazaryan v. FemtoMetrix, Inc., 2019 WL 3545452 (C.D. Cal. Aug. 5, 2019) based on a forum selection clause in the settlement agreement.
The trial court held that Femtometrix had breached the settlement agreement and had issued fraudulent information returns under Internal Revenue Code section 7434. Yesterday, the Court of Appeal affirmed. Notably, the Court of Appeal, while acknowledging a split of authority in the federal courts, upheld the trial court’s decision to hold Femtometrix’s chief executive and financial officers jointly and severally liable.
Florida Appellate Court Calls Audible: Agency Principles Bind Sport Spectator to Arbitration Agreement in Electronic Ticket She Never Saw
On April 9, 2025, a Florida appellate court addressed whether a football game spectator had to arbitrate her claims under the terms of a ticket she did not buy or possess. Applying traditional agency principles, the court held she did.
In Miami Dolphins, Ltd. v. Engwiller, __ So. 3d __, 2025 WL 1064381, Florida’s Third District Court of Appeal addressed whether a football game spectator who gained access to the stadium when her mother displayed the electronic tickets for both of them was required to arbitrate her negligence claims against stadium management and the football team pursuant to the ticket terms. Following the U.S. Courts of Appeals for the Fourth Circuit (applying Maryland law) and Fifth Circuit (applying Texas law), the court applied traditional agency principles in reasoning that the spectator, a non-signatory, was bound to arbitrate.
Plaintiff filed a negligence action against the Miami Dolphins and stadium management for injuries she sustained at the Hard Rock Stadium in late 2022 after a fight broke out at a Miami Dolphins-Pittsburgh Steelers game. She gained access to the stadium with electronic tickets her mother accepted from her employer. To accept the tickets, her mother logged into the Dolphins Account Manager website, which displayed the following notice between the user log-in fields and the “Sign In” button: “By continuing past this page, you agree to the Terms of Use . . . .” The phrase “Terms of Use” was hyperlinked, bold, and in a contrasting aqua ink. That hyperlink directed users to the “2022-2023 Hard Rock Stadium Ticketback Terms,” which explained that the ticket was a revocable license to enter the stadium for the event, subject to the described terms that included a mandatory arbitration provision.
Pursuant to this provision, the team and the stadium owner moved to compel arbitration. The trial court denied the motion. The appellate court reversed in favor of arbitration. It first considered whether the mother had accepted the arbitration agreement and (1) determined that the phrase “Terms of Use” was conspicuous enough to put a reasonable user on notice and that Plaintiff’s mother assented to these terms when she claimed the tickets; and (2) rejected the Plaintiff’s assertion that the terms were merely “exemplars” and that a party seeking enforcement of an electronic contract must produce a screenshot from the same device used by the other contracting party.
Turning to the Plaintiff/daughter, the court determined that, although she never accessed or possessed the tickets, once Plaintiff allowed her mother to present the ticket on her behalf to enter the stadium, her mother acted as her agent. The court explained that all entrants to the stadium were required to agree to the conditions of the single-use license set forth in the terms and that finding otherwise would allow a guest to accept the benefits of that license without the related conditions.
Event attendees often purchase tickets on behalf of family and friends. In so doing, they accept the applicable terms. Traditional agency principles bind non-signatories to those terms, including arbitration provisions, when they use that ticket regardless of whether they access or possess it so long as the purchaser received notice of the terms.
Case Spotlight – Exclusive Surrey Golf Club Forced to “Take a Mulligan” Over Treatment of Allegedly Cheating Member
Being a keen club golfer (although not one with any actual skill), a case that caught my eye in the last few weeks was the case of Rohilla v The Members of Royal Mid Surrey Golf Course (whose members listed in the Judgment included the perfectly named Michael Hole). As well as being a very detailed insight into the workings of an exclusive Surrey golf club, the case provides a few useful lessons on how, and more importantly how not to, remove someone from a membership who (allegedly) broke the rules and/or was quite unpopular.
The Allegation of Cheating
The Royal Mid Surrey Golf Club is a deeply traditional golf club, formed at the close of the Victorian era and granted the distinction of Royal by George V. Ms Rohilla had been a member of the club since 2003 and was described by the Judge as “not a popular member”. The judgment reports that the captains kept a file on her, she was overly competitive, engaged in gamesmanship and there were rumours that she kept her handicap at a deliberately inflated level (3 of the 7 deadly sins of golf club membership).
Golf is a sport that, perhaps more than any other, is based around a detailed set of rules. On top of that there is a code of conduct and rules of etiquette that anyone playing the sport is expected to adhere to. It is perhaps the only sport where every serious participant has a handicap (a number of shots they are given) based on their ability, which allows them to compete with better and worse players on a supposedly level footing. Golf therefore requires a large degree of honesty and self-policing to ensure fairness. Rule breaches are generally taken extremely seriously (particularly at the better known clubs) and professionals who are deemed to regularly break rules are routinely vilified (those that know, yes I’m looking at you…).
On 12 September 2019, Ms Rohilla played in a club competition called the Harare 125 Bowl which was open to the whole of the 1,400 strong membership. Her playing partners on the day were 2 other female members and Ms Rohilla’s scorecard was marked by a member who was described by the Judge as having a reputation for “not being the most accurate of markers”. After a dazzlingly average round of golf, the ladies reviewed their scorecards prior to submission, to be included in the tournament. It turned out there were numerous mistakes on Ms Rohilla’s card who in any event was a long way off winning any of the prizes in the tournament.
The ladies eventually agreed and signed off Ms Rohilla’s scorecard. However, prior to submitting the card it is common ground that two further alterations were made by someone to make the score two better than it had been when it was agreed by the players. The head of the Pro Shop (somehow) immediately spotted the discrepancy and told Ms Rohilla that the incident was extremely serious. She was disqualified from the tournament and told to expect to hear further from the management in due course.
It is almost certainly fair to say that if this was the first incident on Ms Rohilla’s roster, the matter probably would not have been taken any further. However, it is clear that Ms Rohilla was already under scrutiny and this was seen as a final straw. What followed was an investigation and process, but not one that was necessarily appropriate or lawful. Statements were taken from the playing partners and the offending scorecard was very closely examined. Ms Rohilla attended a meeting of the management committee on 25 September and put forward her version of events. However, the management committee met again on 30 September and voted unanimously that Ms Rohilla had cheated and would be expelled from the club.
The Injunction Hearing
Ms Rohilla thought that she had not been given a fair hearing and rather than start afresh at a different golf club or put her skillset to better use by applying for the next series of The Traitors, she embarked upon a long legal battle to seek an injunction against the club to reinstate her membership. Some five and a half years later, the matter was heard over 3 days at Central London County Court, with his Honour Judge Holmes taking it upon himself to, as asked by the parties, play detective and deliver an engaging 72-page Judgment.
Despite expressly stating that the Court was not deciding whether or not Ms Rohilla had cheated, the Judgment examined the facts (particularly the offending scorecard) in minute detail for 48 pages before seemingly reaching the conclusion that she probably had cheated. However, the Judgment found that the matter actually turned on natural justice and good faith – had Ms Rohilla been afforded a reasonable opportunity to be heard and was the decision free from bias?
Ultimately the Judge found that the management committee had not considered Ms Rohilla’s version of events and that effectively their decision (to expel her) was predetermined. It was also based upon members’ personal dislike of her more so than this particular incident and there was a clear bias against her. There had been a breach of natural justice and the club had acted in bad faith in various aspects.
In light of the breaches of duty in the process undertaken by the management committee to expel Ms Rohilla, the Judge awarded nominal damages in the sum of £1,000 for her inconvenience and injury to feelings and granted the injunction to reinstate her to the club. How she will be received on returning having gone through this process and after the passage of five and a half years is an intriguing question.
Lessons Learnt
Whilst I would not necessarily direct you to read the whole Judgment (which can be found here), it does provide a useful reminder that even if an institution has the power to remove someone from their position (in this case as a member of a golf club), it cannot act as judge and jury without complying with the principles of natural justice and acting fairly in a procedural sense and in good faith. It appears that the club in this instance saw the clear rule breach by Ms Rohilla as the ideal opportunity to remove an unpopular member, but it allowed this bias to override appropriate procedures and failed to consider Ms Rohilla’s side of the story.
The principles of natural justice and procedural fairness are well known. As per McInnes v Onslow Fane [1978] 1 WLR 1520 the extent of the application of the principles varies in the light of all the circumstances and, in particular, whether the case can be described as an “application” case, an “expectation” case or, as here, a “forfeiture” case, i.e. where a subsisting right was to be taken away. The Judge found that, in relation to the application of the principles in this forfeiture case: “First, what will be required is context specific. That includes the size and resources of the organisation. Secondly, what amounts to natural justice changes with the passage of time. Thirdly, it will often require that a person who may be adversely affected by the decision will have an opportunity to make representations on her own behalf before the decision is taken. Fourthly, the person must know what factors may weigh against her interest, such that she must know the gist of the case she has to answer. Whilst the contents of natural justice change with time, that is really a word of caution against taking every word and circumstance from the earlier cases as being the applicable modern standard for all purposes. Haque was a recent case on these points and I gratefully adopt the analysis and standard identified by Choudhury, J. in that case”
In Haque v. Faradhi [2023] EWHC 1135 (KB) Choudhury, J held that the power to terminate: “(i) Must be exercised in good faith and not for any improper purpose; (ii) Must not be exercised capriciously, arbitrarily or irrationally; (iii) Must be exercised with regard to the rules of natural justice, including: a) giving notice of the gist of any allegations against a member b) giving that member a fair opportunity to respond to them; c) the right to an unbiased decision maker; d) the right to a brief explanation as to the reason for termination.”
The judgement reads therefore as a cautionary tale. Any institution, sporting or otherwise, where executive powers are granted to management or to a committee to take away a right granted to a member must ensure that they have strict procedures in place to ensure that members receive a fair hearing even in relation to the most egregious of rule breaches or misconduct. Otherwise, perhaps sooner than five years later, they may find themselves welcoming the unwanted member back into the clubhouse, one assumes through gritted teeth.
President Trump Issues Executive Order Aimed at Eliminating Disparate Impact Liability Under Anti-Discrimination Laws
On April 23, 2025, the White House issued an Executive Order (“EO”) entitled “Restoring Equality of Opportunity and Meritocracy,” which aims to “eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.”
First recognized under Title VII of the Civil Rights Act of 1964 (“Title VII”) by the U.S. Supreme Court in Griggs v. Duke Power Co. (1971), disparate impact liability provides that a policy or practice that is facially neutral and applied without discriminatory intent may nevertheless give rise to a claim of discrimination if it has an adverse effect on a protected class, such as a particular race or gender. Disparate impact liability has also been recognized under fair housing laws and in other contexts.
The EO characterizes disparate impact liability as creating “a near insurmountable presumption of unlawful discrimination . . . where there are any differences in outcomes in certain circumstances among different races, sexes, or similar groups, even if there is no facially discriminatory policy or practice or discriminatory intent involved, and even if everyone has an equal opportunity to succeed.” The EO further states that disparate impact liability “all but requires individuals and businesses to consider race and engage in racial balancing to avoid potentially crippling legal liability” and “is wholly inconsistent with the Constitution.”
To that end, the EO, among other things:
directs all executive departments and agencies to “deprioritize enforcement of all statutes and regulations to the extent they include disparate-impact liability,” including but not limited to Title VII;
orders the Attorney General, within 30 days of the EO, to report to the President “(i) all existing regulations, guidance, rules, or orders that impose disparate-impact liability or similar requirements, and detail agency steps for their amendment or repeal, as appropriate under applicable law; and (ii) other laws or decisions, including at the State level, that impose disparate-impact liability and any appropriate measures to address any constitutional or other legal infirmities”;
orders the Attorney General and the Chair of the EEOC, within 45 days, to “assess all pending investigations, civil suits, or positions taken in ongoing matters under every Federal civil rights law within their respective jurisdictions . . . that rely on a theory of disparate-impact liability, and [] take appropriate action” consistent with the EO;
orders all agencies, within 90 days, to “evaluate existing consent judgments and permanent injunctions that rely on theories of disparate-impact liability and take appropriate action” consistent with the EO;
orders the Attorney General, in coordination with other agencies, to “determine whether any Federal authorities preempt State laws, regulations, policies, or practices that impose disparate-impact liability based on a federally protected characteristic such as race, sex, or age, or whether such laws, regulations, policies, or practices have constitutional infirmities that warrant Federal action, and [] take appropriate measures” consistent with the EO; and
orders the Attorney General to initiate action to repeal or amend regulations contemplating disparate impact liability under Title VI of the Civil Rights Act of 1964, which prohibits race, color, and national origin discrimination in programs and activities receiving federal financial assistance.
The EO also orders the Attorney General and the Chair of the EEOC to “jointly formulate and issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate.”
Takeaways
This EO is the latest evidence of shifting enforcement priorities by the federal agencies tasked with enforcing civil rights laws, including the EEOC. The ultimate scope of the EO’s impact remains to be seen, particularly as it relates to the potential for preemption of disparate impact liability under state or local anti-discrimination laws. Congress has the authority to amend any federal statutes to specifically address a disparate impact theory of liability, and the courts will continue to have the ultimate say on whether and to what extent such a theory is cognizable under particular statutes. We anticipate further updates in this area and will continue to monitor and report on these updates.
EU Loses WTO Challenge Against China’s Anti-Suit Injunctions; Files Appeal
As predicted by ip fray on April 10, 2025, the European Union (EU) has confirmed on April 22, 2025 it lost the World Trade Organization (WTO) proceedings against China over anti-suit injunctions (ASIs) for standard essential patents (SEPs). The EU is appealing. In August 2020, China’s Supreme People’s Court decided that Chinese courts can prohibit patent holders from going to a non-Chinese court to enforce their patents by putting in place an “anti-suit injunction”. The Supreme People’s Court also decided that violation of the order can be sanctioned with a 1 million RMB daily fine. Since then, Chinese courts have adopted several additional anti-suit injunctions against foreign patent holders leading to the current dispute.
Per the EU,
[T]he WTO panel upheld the EU’s case by acknowledging that China has developed a policy of limiting intellectual property rights, starting with the guidelines of the Supreme People’s Court, supported by the political level and implemented by the judiciary through several court judgments. It also found that China must be more transparent by transmitting to the EU and other WTO members information on intellectual property matters, including court judgements.
However, the panel did not follow the EU’s interpretation of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement as requiring China to refrain from adopting or maintaining measures that undermine other WTO members’ implementation of the agreement in their jurisdictions. According to the panel, the TRIPS Agreement does not contain an obligation for WTO members to abstain from adopting measures that prevent other WTO members from implementing it in their own territories.
China’s Ministry of Commerce responded on April 23, 2025:
China has always attached great importance to intellectual property protection and its achievements are obvious to all. China is pleased to see that the WTO expert group supports China’s claims. China has received the EU’s appeal request and will handle it in accordance with the relevant rules of the MPIA to safeguard its legitimate rights and interests.
An additional WTO complaint filed by the EU against China continues to proceed regarding setting global royalty rates for SEPs in DS632.
The EU appeal can be found here (English) and China’s response as reported by Xinhua here (Chinese).
TOO CLASSY FOR THIS SUIT: What Two Google Rulings Say About How Not To Define A Class
Greetings CIPAWorld!
Here are some exciting case updates involving Google. What started as a headline-making copyright case against Google just became required reading for anyone litigating under CIPA. So, you may be asking, what do copyright and CIPA have in common? Don’t worry… the connection will become clear as we explore these cases. In In re Google Generative AI Copyright Litig., No. 23-cv-03440-EKL, 2025 U.S. Dist. LEXIS 75740 (N.D. Cal. Apr. 21, 2025), a class of creators claimed that Google scraped their copyrighted works without permission to train its AI models. It was pitched as a massive data appropriation lawsuit. Still, the case stumbled temporarily because, as litigators know all too well, the Plaintiffs proposed an improperly defined class.
The Plaintiffs, a group of authors, illustrators, and content creators, accused Google of using their copyrighted materials to train its generative AI models without permission. I find this fascinating! While in law school, I wrote a white paper on this topic, examining the copyright implications of using creative works to train AI systems. The intersection of copyright law and emerging technologies presents novel legal challenges.
In this case, it was a sweeping theory of unauthorized data use, but the case ran into trouble the moment plaintiffs defined their class. They limited membership to individuals “whose exclusive rights under 17 U.S.C. § 106 in their registered works were infringed upon.” In re Google Generative AI Copyright Litig., 2025 U.S. Dist. LEXIS 75740, at *6. In other words, you were only in the class if Google violated your copyright.
It may seem straightforward to target affected individuals, but the Court immediately identified the problem. The class only included those who would ultimately prevail on the merits. As such, the Court couldn’t determine who was in the class without deciding if Google was liable to each potential class member. News flash… that’s what courts call a “fail-safe” class.
Judge Lee explained that “the Court cannot determine who is a member of the class without deciding the merits of each potential class member’s claim, including whether the potential class member has a valid copyright registration, whether Google infringed the class member’s work(s), and whether Google has a valid defense based on fair use or license.” Id. at *10.
As the Ninth Circuit explained in Kamar v. Radio Shack Corp., 375 F. App’x 734, 736 (9th Cir. 2010), a fail-safe class is impermissible because membership is conditioned on a legal finding. It’s circular. Because Plaintiffs’ proposed class was tied to the elements of infringement, the Court struck the class allegations under Fed. R. Civ. P. 12(f). See Google Generative AI Copyright Litig., 2025 U.S. Dist. LEXIS 75740, at *11. Judge Lee didn’t dismiss the case outright, but she gave Plaintiffs fourteen days to amend their definition.
The Court also offered a suggestion: reframe the class based on factual criteria. The revised definition proposed by Plaintiffs, “all persons or entities domiciled in the United States who owned a United States copyright in any work used by Google to train Google’s Generative AI Models during the Class Period,” was precisely that. Id. Judge Lee acknowledged that this revised definition “would not require an upfront determination by the Court that each potential class member will prevail on the merits of an infringement claim.” Id. This makes perfect sense. That’s the difference between a procedural dead-end and a viable class.
This issue isn’t unique to copyright litigation. I mean, this is CIPAWorld, right!? Plaintiffs continue to define classes as people “whose communications were intercepted” or “whose data was unlawfully shared.” These definitions don’t identify a group of people based on facts. They identify a group based on whether they’ve already proven their claim. That’s precisely what courts are rejecting.
I saw a nearly identical issue in In re Google RTB Consumer Priv. Litig., No.: 4:21-cv-2155-YGR, 2024 U.S. Dist. LEXIS 119157 (N.D. Cal. Apr. 4, 2024) a few weeks prior. That case focused on Google’s Real-Time Bidding (“RTB”) platform. Plaintiffs alleged that the system shared sensitive user data with advertisers through real-time ad auctions. The class was defined as Google account holders “whose personal information was sold or shared.” Sounds familiar, right?
Judge Yvonne Gonzalez Rogers found the class definition flawed. Like Judge Lee, she concluded that the definition was “fail safe” because it required resolving the merits. Specifically, whether Google “impermissibly shared” personal information, just to identify who belonged in the class. The Court stated: “The Court agrees with Google that, as written, the class definition is fail safe. The question on which this suit hinges is whether Google impermissibly shared its account holders’ personal information through RTB.” Id. at *18.
But that wasn’t the only issue the court addressed. Judge Rogers also cautioned that removing the contested phrases from the class definition might broaden the class so much that it would include users who weren’t harmed. The Court stated, “Defining a class so as to avoid, on one hand, being over-inclusive and, on the other hand, the fail-safe problem is more of an art than a science.” Id. at *17.
CIPA litigators should take note. These rulings aren’t just about definitions, but they’re about strategy. If the class can’t be defined in a way tethered to objective facts, plaintiffs won’t make it to the merits. Courts aren’t guessing anymore. They’re asking: Can we identify class members without deciding if the law was broken? If the answer is no, certification won’t happen.
The RTB case also surfaced another common problem in CIPA litigation: individualized consent. Judge Rogers denied certification of a Rule 23(b)(3) damages class because determining who saw disclosures and who didn’t would require user-by-user analysis. That inquiry would overwhelm common issues.
Still, the Court acknowledged that a Rule 23(b)(2) injunctive class could be appropriate. While Plaintiffs could not satisfy the predominance requirement for a damages class, the Court noted that prospective injunctive relief might proceed under a different analysis. A forward-looking injunction targets company practices going forward and doesn’t require resolving individualized consent issues for each user. But even injunctive claims must be grounded in a well-defined, objectively ascertainable class.
Despite presenting expert evidence involving millions of RTB bid requests, Plaintiffs faced one more obstacle. The Court was not persuaded that the data set reliably reflected the experience of the proposed class as a whole. Plaintiffs alleged that advertisers could determine what content users viewed and even infer their locations. But the Court held that this wasn’t enough. The data needed to be representative of the entire class experience, and the plaintiffs hadn’t met that burden. See In re Google RTB Consumer Priv. Litig., 2024 U.S. Dist. LEXIS 119157, at *32-33.
For defense counsel, the takeaway is that challenges to class definitions and evidentiary gaps remain powerful early tools to be utilized. Whether the issue is consent variability, class overbreadth, or sampling deficiencies, these rulings reinforce that procedural missteps can and often derail class actions before the merits stage. As CIPA litigation continues to sweep across California, these two Google rulings illustrate where cases are getting stuck. Defining your class around legal conclusions, relying on non-representative data, or ignoring consent variations are no longer technical errors. They are strategic liabilities.
Whether you’re responding to claims involving chat features, embedded scripts, or real-time data flows, the foundational question remains the same: who’s in your class, and how do you know? If answering that requires proving liability, the case may never reach certification.
As always,
Keep it legal, keep it smart, and stay ahead of the game.
Talk soon!