December 7, 2021

Volume XI, Number 341

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December 06, 2021

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Ninth Circuit Urged to Reconsider Ruling Narrowly Limiting “Public Injunctive Relief” Exception to Arbitration in Privacy and Data Collection Class Actions

CPW covered in September how the Ninth Circuit Court of Appeals reversed a district court order denying Comcast Cable Communications, LLC’s (“Comcast”) motion to compel arbitration under the Federal Arbitration Act (“FAA”) claims brought against it by a former cable subscriber.  The Plaintiff had brought a putative class action challenging Comcast’s privacy and data-collection practices for subscribers and demanded monetary and equitable remedies.  Hodges v. Comcast Cable Communs., LLC, 2021 U.S. App. LEXIS 27268 (9th Cir. Sep. 10, 2021).

The case followed off of the California Supreme Court ruling in the McGill case that insofar as a contractual provision “purports to waive [a party’s] right to request in any forum . . . public injunctive relief, it is invalid and unenforceable under California law” (the “McGill Rule”).  2 Cal. 5th 945 (Cal. 2017).  [Note: Subsequently, in 2019 the Ninth Circuit had previously ruled that “the FAA does not preempt” the McGill Rule.  Blair, 928 F.3d 819, 822 (9th Cir. 2019).]

Flash forward to the Ninth Circuit’s Comcast ruling in September.  The decision was notable in that the Ninth Circuit adopted a narrow reading of the “public injunctive relief” exception to arbitration provisions under California law, with the anticipated result that more privacy class actions would be forced into binding arbitration going forward.

  • Specifically, the Ninth Circuit held that public injunctive relief as used in the California Supreme Court’s ruling in McGill “is limited to forward-looking injunctions that seek to prevent future violations of law for the benefit of the general public as a whole, as opposed to a particular class of persons, and that do so without the need to consider the individual claims of any non-party.”  (emphasis supplied).

  • By contrast, the Court ruled, “when the injunctive relief being sought is for the benefit of a discrete class of persons, or would require consideration of the private rights and obligations of individual non-parties,” it is private injunctive relief outside the narrow scope of McGill.

Well, last week the Plaintiff who had filed suit in Comcast filed a petition for the Ninth Circuit to rehear the case (either en banc or with the same panel previously) and revisit its decision to send the litigation to arbitration (the “Petition”).  Among other things, the Petition argued that the Ninth Circuit’s opinion in Comcast conflicts with Court precedent by “adding new conditions to the definition of “public injunctive relief”: that the proposed injunction 1) must seek “to stop future violations of law that are aimed at the general public”; 2) must benefit the general public as a whole; and 3) must not “requir[e] consideration of the individual claims of non-parties.”  Pet. at 6 (emphasis in original).

For the Comcast ruling issued in September, Ninth Circuit Judge Berzon had dissented.  She sided with Plaintiff finding that “[t]he majority concludes, contrary to our precedent and to recent decisions of the California Court of Appeal, that a forward-looking injunction protecting the privacy rights of millions of cable consumers is not ‘public injunctive relief’ under California state law.  I disagree.”

Notwithstanding this prior dissent, whether the Petition is successful remains to be seen.  Plaintiff likely will have an uphill battle convincing the Ninth Circuit to reverse the panel’s earlier decision. 

© Copyright 2021 Squire Patton Boggs (US) LLPNational Law Review, Volume XI, Number 301
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About this Author

Kristin L. Bryan Litigation Attorney Squire Patton Boggs Cleveland, OH & New York, NY
Senior Associate

Kristin Bryan is a litigator experienced in the efficient resolution of contract, commercial and complex business disputes, including multidistrict litigation and putative class actions, in courts nationwide.

She has successfully represented Fortune 15 clients in high-stakes cases involving a wide range of subject matters.

As a natural extension of her experience litigating data privacy disputes, Kristin is also experienced in providing business-oriented privacy advice to a wide range of clients, with a particular focus on companies handling customers’ personal data. In this...

216-479-8070
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