Highlights from the September 2016 Issue of the Computer Law Reporter

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The most noteworthy decisions this month are the following:

  • In In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, No. 12-4671 (2nd Cir. June 30, 2016), the U.S. Court of Appeals for the Second Circuit reversed the district court’s approval of a settlement of antitrust class actions brought a decade ago by millions of merchants against Visa and MasterCard. In the original actions in the district court, plaintiffs alleged that the networks’ interchange fee and other rules were illegal restraints in violation of the Sherman Act. After years of litigation, the parties reached a settlement that would have released all claims in exchange for monetary relief of up to $7.25 billion—the largest antitrust cash settlement in history—and injunctive relief relating to future conduct. The re-opening of the settlement will result in further delay in resolution of a litigation involving the disparate interests of millions of retailers.
  • In Javier Luis v. Joseph Zang, No. 14-3601 (6th Cir. Aug. 6, 2016), in a case where a husband secretly installed spyware on his wife’s computer to access her private communications in “real time” and discovered that she was involved in a personal on-line relationship with another man, and where this man subsequently sued the spyware manufacturer for violations of the federal Wiretap Act and Ohio law, the Sixth Circuit reversed the district court’s dismissal of all claims and remanded.
  • In Meyer v. Kalanick, No. 15 Civ. 9796 (S.D.N.Y July, 29, 2016), the Defendant, Uber, filed a motion to compel arbitration in an anti-trust lawsuit, arguing that the plaintiff consented to binding arbitration when he registered to use the mobile ride-sharing application. At issue is whether the contract provided the plaintiff with “reasonably conspicuous notice” of the contract terms and whether the plaintiff manifested assent to those terms. The court ultimately concluded that the manner in which Uber presented its “Terms of Service” did not put the plaintiff on notice that by using the application, he agreed to binding arbitration, effectively waiving his right to a jury trial. In particular, the court noted the following deficiencies in Uber’s registration process: (1) the plaintiff’s consent to the contract terms, including the arbitration clause, was not a condition of using the Uber application; (2) the contract terms did not appear on the user’s screen and could only be accessed by clicking through two sets of hyperlinks; and (3) the size and placement of the hyperlink to the user agreement was considerably less prominent than other prompts on the registration screen. Therefore, the court held that the arbitration clause was not binding on the plaintiff, finding that Uber failed to provide reasonable notice of contract terms.
  • In Matera v. Google Inc., 15-CV-04062-LHK (N.D. Cal. Aug. 12, 2016), Plaintiff Daniel Matera, who did not have an email account with Google, but who corresponded with those who did, alleged that Google violated federal and state wiretapping laws by intercepting, scanning and analyzing the content of his emails to create user profiles to sell for targeted advertising.
  • In Sandquist v. Lebo Automotive, No. S220812 (Cal. July 28, 2016), the plaintiff in this case was a former employee of the Defendant, Lebo Automotive, where he worked as a car salesman. As a condition of employment, he signed a contract in which he agreed to arbitrate disputes arising out of his employment with the company. In 2012, the plaintiff filed suit alleging racial discrimination “on behalf of a class of current and former employees of color.” The parties disputed whether a court or an arbitrator had jurisdiction to decide if class-wide arbitration was permissible in this case where the agreement was ambiguous. Relying on long-standing rules of contract interpretation, the Supreme Court of California held that an arbitrator must decide the question on the availability of class-wide arbitration.
  • In Laffitte v. Robert Half International, No. S222996 (Cal. Aug. 11, 2016), the dispute in this case stemmed from the trial court’s approval of a pre-trial settlement in a class action lawsuit, in which one-third of the monetary fund was awarded to class counsel as attorneys’ fees. A class member objected to the amount of attorneys’ fees, arguing that the trial court abused its discretion in awarding fees based on a percentage of the settlement amount. Specifically, he argued that California case law provides that attorneys’ fees must be based exclusively on the amount of time legal counsel expended on the case. The court disagreed and held that “when class action litigation establishes a monetary fund for the benefit of the class members, and the trial court in its equitable powers awards class counsel a fee out of that fund, the court may determine the amount of a reasonable fee by choosing an appropriate percentage of the fund created.”

 

 

  • Computer Law Reporter invites the submission of articles, recent decisions, briefs and transcripts of interest to the legal community serving the computer hardware, software, and information service industries.