In the first installment of Seyfarth’s 2021 monthly Consumer Financial Services Webinar Series held on February 24, 2021, attorneys David M. Bizar, Tonya M. Esposito and J. Patrick Kennedy discussed the major legislative initiatives, regulatory and enforcement, and executive actions that are likely to be prioritized by the Biden-Harris administration; the key financial department appointees of the new administration; and the continuing impacts of the COVID-19 pandemic, particularly on the status of federal foreclosure and eviction moratoria.

As a conclusion to this webinar, we developed a summary of key takeaways:

  • Until the COVID-19 pandemic subsides, CARES Act provisions providing for mortgage payment forbearance and foreclosure eviction moratoria will continue to cause disruptions in the consumer lending and mortgage servicing marketplaces.  With the administration change following the November election, new legislative initiatives will be heavily consumer-focused, and enforcement of consumer laws by the CFPB and other executive agencies will dramatically increase.  Fintech, student lending and smaller-dollar consumer products such as payday loans are expected to be a particular focus under new CFPB Director Rohit Chopra.
  • The Biden-Harris administration’s financial department appointees are smart; consumer-focused; experienced in leading important consumer initiatives in prior Democratic administrations; and are expected to be aggressive in their enforcement and rule-making positions.
  • The federal eviction and foreclosure moratoria have been formally extended due to the continuing COVID-19 pandemic through March 31, 2021, will be extended further until June 30, 2021, and absent a dramatic improvement in conditions related to COVID-19 are expected to be in place through at least September 2021.  Federal restrictions generally take precedence over state-law restrictions, unless state bans are more inclusive.  These moratoria will result in increasing numbers of mortgage loans in default status, requiring more default servicing and foreclosure resources for banks and other financial servicers once the pandemic subsides.

Banks and financial institutions should review their compliance protocols and procedures, and be prepared for increased scrutiny by federal regulators during the Biden-Harris administration.  Our next scheduled event in the monthly Consumer Financial Services Webinar Series will be held on March 25, 2021, and will explore the recently-issued CFPB Taskforce Report and Recommendations.

With the Democrats in control of the House, the Senate, and the White House, combined with the ongoing effect of COVID-19’s effect of consumer lending, we anticipate a heightened focus on consumer protection issues and financial services enforcement at every level in 2021.

President Biden recently appointed FTC Commissioner Rohit Chopra to head the Consumer Financial Protection Bureau (CFPB). As we await Chopra’s Senate confirmation process, there is much to consider in terms of what the future may bring for consumer lending, including the recently released report of the CFPB’s Taskforce on Federal Consumer Financial Law’s recently released report. Noteworthy among the recommendations in the taskforce’s report is that the CFPB be given the authority to license and regulate financial technology companies. If implemented, that change would broaden the CFPB’s regulatory oversight powers.

Please join us for our first Consumer Financial Services Litigation Webinar of 2021. This webinar will discuss what the incoming Biden-Harris administration’s likely policy, regulatory and enforcement agenda might mean for banks and financial institutions. Specifically, our attorneys will touch on:

  • The major legislative, regulatory and administrative acts that are likely to be prioritized by the Biden-Harris administration;
  • The Biden-Harris administration’s financial regulatory agency appointments, including Chopra to head the CFPB, and their backgrounds, and expected platform for change; and
  • COVID-related impacts, including the status of the federal foreclosure and eviction moratoria.

Consumer Financial Services Webinar Series

Given the magnitude of the potential changes ahead, Seyfarth has developed a webinar series designed to convey strategies and best practices to help you to ensure that your company and internal clients are prepared for what is ahead. To take part in the webinars, please subscribe to our mailing to list receive future invitations. We urge clients interested in this topic to register immediately.

Subscribe to Seyfarth’s Consumer Financial Services Mailing List.


David Bizar, Partner,  Seyfarth Shaw LLP
Tonya Esposito, Partner, Seyfarth Shaw LLP
J. Patrick Kennedy, Senior Counsel, Seyfarth Shaw LLP

Tuesday, February 23, 2021

12:00 p.m. to 1:00 p.m. Eastern
11:00 a.m. to 12:00 p.m. Central
10:00 a.m. to 11:00 a.m. Mountain
9:00 a.m. to 10:00 a.m. Pacific

If you have any questions, please contact Kelli Pacha at and reference this event.


A recently decided Ninth Circuit case provides additional guidance for defendants looking to challenge standing in consumer class actions.  In, McGee v. S-L Snacks National, Plaintiff brought a putative class action asserting claims of unfair competition, nuisance, and breach of the implied warranty of merchantability arising from her contention that her popcorn brand of choice, Pop Secret from Diamond Foods, contained trans-fat. Even though trans-fat was a listed ingredient, Plaintiff argued that it caused her both economic loss and physical injury. The Ninth Circuit disagreed.


The Ninth Circuit rejected Plaintiff’s claims regarding her supposed economic injury largely due to the fact that the popcorn clearly listed trans-fat as an ingredient on its nutritional label. Under a benefit of the bargain theory, Plaintiff claimed that she was injured because she believed she was purchasing a safe product when, in fact, the popcorn contained “unsafe and unlawful ingredients.” However, the court explained that Plaintiff’s beliefs were immaterial where Plaintiff could not allege that Diamond made any false representations given its disclosure of trans-fat in its labeling. The Ninth Circuit similarly found Plaintiff’s claims regarding economic injury unavailing under an overpayment theory. Even entertaining the possibility of an overpayment theory being viable absent a misrepresentation, the Ninth Circuit disregarded Plaintiff’s arguments. The nutritional label plainly disclosed the presence of trans-fat and the health risks associated with consuming trans-fat had been well established. Therefore, the popcorn did not contain some hidden defect and was not worth objectively less than what Plaintiff paid for.

Turning to Plaintiff’s allegations of physical injury, the Ninth Circuit found that Plaintiff’s claims were too speculative to be actionable. Plaintiff alleged that she experienced immediate physical injury because there is no safe quantity for which one can consume trans-fat. The Ninth Circuit found that, even at the pleading stage, Plaintiff’s failure to provide facts regarding medical testing, examination, or the like to confirm her supposed injuries was fatal to her claim. The Ninth Circuit found that Plaintiff’s claim of future physical injury suffered the same defect. Simply claiming that consuming trans-fat substantially increased her risk of disease was not enough. Plaintiff’s failure to tie this risk to the quantities that she consumed made her injury too remote.

Takeaway: Defendants should always look to whether a class action suit can be challenged on the basis of standing. The Ninth Circuit has signaled that even at the pleading stage, a plaintiff cannot get by with conclusory allegations. A plaintiff must adequately and specifically plead an injury in fact.

Seyfarth Synopsis: The New York state legislature recently introduced a standalone biometric information privacy bill, AB 27, that mirrors Illinois’ Biometric Information Privacy Act (740 ILCS § 14/1 et seq., “BIPA”), which has spawned thousands of class actions in the Land of Lincoln. If enacted, The New York bill would become only the second biometric privacy act in the United States to provide a private right of action and plaintiffs’ attorneys’ fees for successful litigants. This represents a significant development for companies and employers operating in New York in light of the explosion of class action litigation over workplace privacy issues.

Details Of New York’s Proposed Legislation

What can otherwise be characterized as BIPA 2.0, New York proposed and introduced its own “Biometric Privacy Act” on January 6, 2021. New York’s proposed “Biometric Privacy Act” is a carbon copy of the Illinois BIPA, including identical definitions of both biometric identifiers and biometric information. The proposed law prohibits private entities from capturing, collecting, or storing a person’s biometrics without first implementing a policy and obtaining written consent. Most notably, the proposed bill provides for identical remedies to BIPA, whereas an aggrieved person under the proposed bill will be afforded a private right of action with the ability to recover $1,000 for each negligent violation, $5,000 for each intentional or reckless violation, and reasonable attorneys’ fees and costs.

Implications For Companies

Companies that are already familiar with the Illinois BIPA are undoubtedly aware of the risks that the proposed New York biometric privacy bill poses. While the BIPA was enacted in 2010, Illinois has seen an explosion in class action litigation over the past few years brought by employees and consumers alleging that their biometric data was improperly collected for timekeeping, security, and consumer transactions. In fact, between 2015 and 2020 alone, there were over 1,000 Illinois BIPA class action complaints filed across the United States, with additional new filings continuing to be initiated every day.

It remains to be seen if New York’s biometric privacy bill will pass as drafted. However, if enacted as it is currently drafted, companies in New York can also expect to face an onslaught of biometric privacy litigation. Compliance is key, and there no better time to think about your company’s biometric privacy compliance than right now. Companies with New York operations that are utilizing anything that could be considered biometrics, for any reason, should consider audit their practices, policies, and procedures to avoid potentially costly exposure in the event that the bill ultimately passed. Businesses with compliance questions should contact a member of Seyfarth Shaw’s Biometric Privacy Compliance & Litigation Practice Group.

While this proposed bill is only days old, we will provide immediate updates on its progress when available.

The Telephone Consumer Protection Act (TCPA) generally restricts making certain non-emergency calls to cellular phones and landlines, among other things, without the called party’s consent.  However, the Federal Communications Commission (FCC) has created a number of exemptions on which business have come to rely.  A new FCC Order significantly limits those exemptions.


The TCPA places different restrictions on making calls without the called-party’s consent, depending on the type of telephone line used. For instance, with respect to residential landlines, the TCPA prohibits initiating non-emergency calls “using an artificial or prerecorded voice” but permits calls to residential landlines using an automatic telephone dialing system (ATDS).[1] With respect to cellular telephone numbers, the TCPA prohibits non-emergency calls using an ATDS or an artificial or prerecorded voice.[2]

Through section 8 of the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act), enacted in 2019, Congress required the FCC to ensure that its TCPA exemptions had parameters regarding “(i) the classes of parties that may make such calls; (ii) the classes of parties that may be called; and (iii) the number of such calls that a calling party may make to a particular called party.”[3] The FCC released a notice initiating this process in October 2020 and solicited comments.[4]

Following the notice and comment period, the FCC issued an Order on December 30, 2020 which places significant limits on the exemptions with respect to residential landlines, as outlined below.  These changes will come into force six months from the date of publication of the Office of Management and Budget’s approval of the rules in the Federal Register.[5]

Changes to Residential Landline Exemptions

  1. Non-commercial, Non-Telemarketing and Tax-Exempt Nonprofit Calls

(a) Before:  A caller, including any tax-exempt, nonprofit organization, could make  (or cause its vendor(s) to make) any amount of prerecorded or artificial voice calls to a residential landline for non-commercial or non-telemarketing purposes (including for political purposes) under this exemption.

(b) After:  A caller, including any tax-exempt, nonprofit organization, may make (or cause its vendor(s) to make) only three (3) prerecorded or artificial voice calls in a consecutive thirty (30) day period to residential landlines for non-commercial or non-telemarketing purposes.[6]

Further, an opt-out mechanism is now required for those calls, meaning that the caller must provide a phone number which takes opt-out requests or a key-press tool that can be prompted during prerecorded or artificial calls.[7]

  1. Healthcare / HIPAA Calls

(a) Before: A caller could make (or cause its vendor(s) to make) any amount of   HIPAA-related calls delivering a healthcare message to residential landlines under this exemption.

(b) After: A caller may make (or cause its vendor(s) to make) only one (1) HIPAA-related call conveying a healthcare message per day, up to a maximum of three (3) artificial or prerecorded voice calls per week under this exemption.[8]

Further, the same type of opt-out mechanism described above is required.[9]

No Changes to Wireless Number Exemptions

As our readers may be aware, the FCC has carved-out exemptions for package delivery calls, financial institution calls, healthcare provider calls, and inmate-calling service calls made to wireless numbers using an ATDS or artificial / prerecorded voice.  These exemptions stand.

The FCC determined that “no further restrictions [were] necessary” to harmonize these exemptions with the TRACED Act.[10] As to calls made by financial institutions, for example, the FCC found existing conditions on the exemption sufficient, as the exemption only applies to calls made by financial institutions to their customers and is limited to no more than “three calls per event over a three-day period for each affected account.”[11]


These new restrictions have significant implications for businesses in a wide-variety of industries, from tax-exempt nonprofits to political organizations to healthcare companies, as well as vendors making calls on their behalf.  Although these new restrictions are not enforceable for six months, businesses should begin to think seriously about compliance now, particularly if they engage multiple outside vendors as part of their communications strategy. The reason for this is that the new limitations apply per “calling party” (i.e. caller) and “called party” (i.e. per person), meaning that a caller cannot call the same person (or cause the same person to be called) more than 3 times in 30 days or, in the case of HIPAA-related calls, more than 3 times per week.  In other words, a business will likely run afoul of the limits if it has multiple agents who collectively call a person in excess of these limits.  Accordingly, the best practice for businesses and their vendors is to make sure that they have sufficient internal and external controls to stay within the new limits.

As always, please reach out to use if you have any question regarding compliance with these new rules.

[1] 47 U.S.C. § 227(b)(1)(B).

[2] Id. § 227(b)(1)(A)(iii).

[3] Id. § 227(b)(2)(I).

[4] Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Report & Order, FCC 20-186 (2020), ¶ 8.

[5] Id. ¶ 42.

[6] Id. ¶¶ 15, 28, 33.

[7] Id. ¶¶ 21, 23, 28, 29, 33, 34 & n. 77.

[8] Id. ¶ 38.

[9] Id. ¶ 40.

[10] Id. ¶ 43.

[11] Id. ¶ 45.

The United States Supreme Court has again granted a petition to examine standing in the context of class actions, specifically whether Article III of the Constitution permits members of a certified class to recover money damages when members of the certified class suffered no actual injury. This issue was presented to the Supreme Court after the Ninth Circuit issued an opinion and order in Ramirez v. TransUnion LLC, 951 F.3d 1008 (9th Cir. 2020), finding absent class members in a class action brought under the Fair Credit Reporting Act (“FCRA”) had Article III standing where it was undisputed that, in the case of the majority of the certified class members, allegedly inaccurate credit information was not disclosed to any third party. The Supreme Court’s consideration of the issues presented in Ramirez will allow the Court to provide more defined boundaries on what type of “intangible” harm suffered by absent class members can constitute a “concrete” injury sufficient to confer Article III standing, an issue largely left open after the Supreme Court’s prior landmark decision in Spokeo, Inc. v. Robins, No. 13-1339 (U.S. 2016).

I. Case Background.

The Ramirez case arose when the named plaintiff, Sergio Ramirez, brought a putative class action against a consumer reporting agency (“CRA”) alleging violations under the FCRA. The credit files of Ramirez and other class members included an alert indicating that they potentially matched the name of a person on the United States government’s list of Specially Designated Nationals (“SDN”), which if true, would prohibit companies from doing business with those individuals. Ramirez alleged that he suffered difficulty in obtaining credit and embarrassment in front of family members when an automobile dealer received a credit report allegedly indicating that it could not do business with Ramirez. Ramirez testified that he was embarrassed, shocked, and scared when he learned of this alert and his potential inclusion on the SDN List. Ramirez requested a copy of his credit report, which once received did not indicate that he was on the SDN List. However, the next day, Ramirez received a separate letter from the CRA (the “OFAC Letter”) making him aware that he was considered a potential match on the SDN List. The OFAC Letter was not accompanied by a summary of rights form.

As a result, Ramirez ultimately initiated a class action alleging three violations of the FCRA, seeking to represent a class that included “all natural persons in the United States and its Territories to whom [the CRA] sent a letter similar in form to the [OFAC Letter] [that the CRA] sent to [Ramirez] … from January 1, 2011-July 26, 2011.” In other words, everyone in the class: (1) was labeled by the CRA as a potential SDN List match; (2) requested a copy of his or her credit file from the CRA; and (3) in response, received a mailing with the SDN List alert redacted and a separate OFAC Letter mailing with no summary of rights form.

The district court rejected the CRA’s arguments that the injury suffered by Ramirez was atypical to that of the class, and certified a class action under Rule 23 of the Federal Rules of Civil Procedure. Notably, the parties stipulated that this class included 8,185 consumers, and that, out of those 8,185 consumers, only 1,853 consumers actually had their credit reports requested by a potential credit grantor during the relevant class period, meaning that the CRA did not furnish credit reports to third parties during the class period for the remaining 6,332 class members. The case went to trial, and the jury heard primarily about the experiences and injury suffered by Ramirez, and awarded every member of the 8,185-member class near the maximum in statutory damages and thousands more in punitive damages, for a total award of over $60 million. Ramirez did not provide evidence that any other class member actually read the OFAC Letter from the CRA or was even aware that such a letter had been sent, and did not prove that any other class member ever suffered injury (or even embarrassment) on account of the claimed deficiencies in how the CRA provided the “potential match” information.

II. Ninth Circuit Analysis.

The CRA appealed the jury verdict to the Ninth Circuit, arguing (1) the verdict could not stand because none of the class members other than Ramirez had standing under Article III of the U.S. Constitution; (2) the class should not have been certified because Ramirez’s claims were not typical of the class’s claims; and (3) additional arguments regarding the statutory and punitive damage awards.

In a 2-1 decision, the Ninth Circuit affirmed the lower court’s rulings regarding Article III and Federal Rule of Civil Procedure 23, and also reduced the punitive damages award. The Ninth Circuit first considered the challenge to the absent class members’ Article III standing. The Ninth Circuit first held that when a class is certified for money damages, each individual class member must establish standing at the final (damages) phase of the litigation. However, the Ninth Circuit went on to conclude that each absent class member had suffered an injury sufficient to satisfy Article III where the CRA had allegedly incorrectly placed SDN List alerts on the front page of consumers’ credit files and later sent the consumers “confusing and incomplete disclosures” in the form of the OFAC Letters about the alerts and how to remove them. The Ninth Circuit determined that the CRA’s alleged violation of the consumers’ notification rights under the FCRA, by itself, constituted a concrete injury even if a class members credit file had not been disclosed to a third party.

In doing so, the Ninth Circuit interpreted the U.S. Supreme Court’s 2016 ruling in Spokeo, Inc. v. Robins, No. 13-1339 (U.S. 2016) (“Spokeo II”) and applied a “risk-of-harm” theory in analyzing whether absent class members suffered concrete harm sufficient to confer Article III standing even if their credit reports were not furnished to third parties. The Ninth Circuit relied upon language in Spokeo II that states that concrete harm sufficient to confer Article III standing can be intangible, and there is sufficient injury in fact when a defendant’s statutory violation creates a “risk of real harm” to a plaintiff’s concrete interest. The Ninth Circuit reasoned that the fact that the CRA would have provided a class member’s report to numerous potential creditors and employers if they had requested it was sufficient to show a material risk of harm to the concrete interests of all class members.

The Ninth Circuit also rejected the CRA’s challenge under Federal Rule of Civil Procedure 23 that, even if the absent class members had Article III standing, they could not be properly represented by an atypical named plaintiff who suffered far greater and different injuries. The Ninth Circuit reasoned that all class members’ claims arose from the same event or practice and were based upon the same legal theory.

Judge M. Margaret McKeown penned a dissent concluding that only the 1,853 consumers whose credit reports were requested by a potential credit grantor had Article III standing to assert a claim. Judge McKeown argued that the majority’s conclusion that every class member suffered Article III injury-in-fact simply because the CRA’s credit files contained allegedly inaccurate information about them could not be reconciled with prior Supreme Court precedent such as Spokeo II. She also pointed to several decisions from other U.S. Courts of Appeals that found no Article III standing where there was a mere existence of inaccurate information in a credit file without dissemination to any third party. Judge McKeown observed that Congress’s main concern in enacting the FCRA was the “dissemination of inaccurate information, not its mere existence in the . . . database.” See, e.g., Owner-Operator Independent Drivers Ass’n, Inc., et al., v. United States Department of Transportation et al., 879 F.3d 339, 345 (D.C. Cir. 2018).

III. U.S. Supreme Court Grants Petition, Possible Repercussions.

The U.S. Supreme Court granted the CRA’s petition for certiorari in order to review whether either Article III of the Constitution or Federal Rule of Civil Procedure 23 permits class members to recover money damages when members of the certified class suffered no actual injury, let alone an injury similar to what the class representative suffered.

The Supreme Court has long held that Article III standing requires a plaintiff to establish that she suffered an “injury in fact” that is “concrete and particularized” and “actual or imminent.” See, e.g., Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). Spokeo II explains that mere statutory violations on their own are insufficient to confer Article III standing absent sufficient concrete injury. Spokeo II, 136 S. Ct. at 1547–49. Importantly, the Court in Spokeo II explicitly recognized that a violation of one of the FCRA’s procedural requirements may result in no harm, while also instructing that an alleged procedural violation can by itself manifest concrete injury where Congress conferred the procedural right to protect a plaintiff’s concrete interests and where the procedural violation presents a risk of real harm to that concrete interest. Id. at 1550.

The Supreme Court’s decision will resolve an apparent Circuit split created by the decision in Ramirez, and recognized by the dissent. The D.C. Circuit and other circuits have held that individuals who never had their information disseminated to third parties cannot claim Article III injury in an FCRA claim based on the bare fact that inaccurate information sat inchoate in a database. See, e.g., Owner-Operator Indep. Drivers Ass’n, Inc. v. U.S. Dep’t of Transp., 879 F.3d 339 (D.C. Cir. 2018). Nor do other circuits allow individuals to claim injury in-fact merely because they were sent a purportedly incomplete disclosure that they may not have read, let alone found confusing. See, e.g., Flecha v. Medicredit, Inc., 946 F.3d 762, 768 (5th Cir. 2020).

The Supreme Court’s ruling is sure to affect future class action litigation and issues of standing, especially for claims under the FCRA.  Will we have another Spokeo II on our hands, raising the bar further on Article III standing for absent class members?  Will the reasoning of the Ninth Circuit majority’s position or Judge McKeown’s dissent win the day?  We’ll be sure to let you know.


Greg Markel and Gina Ferrari wrote “Settling Securities Class Actions,” the cover article for the December issue of Practical Law magazine. You can view the article here.

We hope you find this article helpful and insightful.

In this article, Greg and Gina discuss the various tactical and strategic questions and concerns that can affect the success of reaching a good settlement in a securities class action case. The article includes details that are important to the foundation of understanding and evaluating settlement options from the outset of a case throughout achieving a settlement.

Seyfarth attorneys Renée Appel, Tracee Davis, Tonya Esposito, Joe Orzano, Jeremy Schachter, John Tomaszewski, and  Ken Wilton will present at the Association of National Advertisers’ Brand Activation Legal Committee meeting on December 17, 2020.

The team will present on the following topics:

  1. Updates in false advertising litigation, including, consumer class actions, Lanham Act litigation, and cases at the National Advertising Division
  2. Updates to the regulatory landscape, including the latest from the FTC and State AGs
  3. Updates in the world of Privacy, including the latest out of California

On September 11, 2020, the California Court of Appeal issued a decision with two crucial holdings limiting the scope of California’s Automatic Renewal Law (ARL), Business and Professions Code sections 17600, et seq.

In Mayron v. Google LLC, No. H044592, 2020 WL 5494245 (Cal. Ct. App. Sept. 11, 2020), one of the first cases to put the State’s infamous ARL to the test, the Court of Appeal clarified that:

(1) there is no private right of action for a violation of the ARL’s provisions, and

(2) a plaintiff seeking to use an alleged ARL violation as the basis for a claim under the Unfair Competition Law (UCL), Business and Professions Code sections 17200, et seq. is subject to the requirements for standing under the UCL.

More specifically, a plaintiff seeking to repackage an alleged ARL violation under the “unlawful” prong of the UCL must allege an economic injury sufficient to establish standing.

The Lawsuit

Eric Mayron filed his action in Santa Clara Superior Court, seeking to assert claims against Google LLC for violations of the ARL and unfair competition on behalf of a putative class. Mayron alleged that Google failed to provide “clear and conspicuous disclosures,” obtain his affirmative consent to recurring charges, or adequately explain how to cancel with respect to the subscription data plan available through Google Drive (which provides up to 15 GB of data for free and charges $1.99 per month for additional storage up to 100 GB). According to Mayron, each of these alleged failures constitutes a violation of the ARL.

The trial court sustained Google’s demurrer without leave to amend, dismissing Mayron’s ARL claims on the ground that the statute does not create a private right of action, and dismissing the UCL claims for lack of standing, as Mayron had failed to sufficiently allege an “injury.”

On appeal, the Court reviewed and affirmed both of the foregoing determinations.

The ARL Does Not Create A Private Right Of Action

The ARL was enacted in 2009 to “end the practice of ongoing charging of consumer credit or debit cards . . . without the consumers’ explicit consent for ongoing shipments of a product or ongoing deliveries of service.” In furtherance of this purpose, the ARL imposes notice and consent requirements on companies that utilize a subscription model or recurring charges for their business, and provides remedies for violations of these requirements. The ARL does not, however, arm plaintiffs with an independent cause of action to tack onto any lawsuit.

The Court rejected Mayron’s argument that the Legislature intended to create a private right of action by providing for remedies in Section 17604; although such a provision does imply an action to recover the remedies provided for, an intent by the Legislature to create a private right of action must be “clear, understandable, [and] unmistakable,” not merely implied by or consistent with the text of the statute in question. See Lu v. Hawaiian Gardens Casino, Inc., 50 Cal. 4th 592, 596 (2010).

By providing for remedies but declining to explicitly create a right of action, the Legislature meant to require plaintiffs to use existing means, e.g., the UCL, to seek relief. The Court found support for this conclusion in other statutes, where the Legislature had clearly and unmistakably created a right of action. See, e.g., Cal. Lab. Code § 218; Cal. Bus. & Prof. Code § 17070, Cal. Civ. Code § 1748.7. The Court also took judicial notice of the ARL’s legislative history, and observed that the bill’s author had suggested enforcement through the UCL. See also Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1143 (2003) (“Section 17200 ‘borrows’ violations from other laws by making them independently actionable as unfair competitive practices.”).

For a more detailed overview of the ARL’s provisions, click here.

“Standing to sue for unfair competition requires actual injury and causation”

Citing Section 17204, the Court reiterated that the UCL provisions contain an express standing requirement; an action may be brought only “by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.” See Hall v. Time, Inc., 158 Cal. App. 4th 847, 849 (2008) (“We hold the phrase ‘as a result of’ in the [UCL] imposes a causation requirement; that is, the alleged unfair competition must have caused the plaintiff to lose money or property.”) (Emphasis added).

The Court then walked through a roadmap for future plaintiffs to meet the UCL threshold. For example, Mayron needed to allege that he had ordered increased Google Drive storage (subscribing to the plan) but would not have done so if proper disclosures had been provided, or that he would have cancelled the subscription had it been clearly explained or easier to do so. Without such allegations there was no “causal link” between any payments by Mayron and the alleged violations by Google, even assuming the violations had, in fact, occurred.

“[T]he unconditional gift provision . . . does not confer standing for a section 17200 cause of action”

Mayron then argued that because Google had violated its obligations under the ARL, the storage he received was a “gift” under Section 17603, meaning he had paid for something he didn’t need to and therefore “lost money” due to the violation. While a handful of federal courts appear to have been persuaded by this reasoning, the Court was quick to dismiss it, following simple chronology instead. The right to retain a product (treatment as an unconditional gift) is a consequence of violating the statute, i.e., follows the violation in time, and therefore cannot be a loss caused by the violation. Furthermore, as pointed out by the Court, an “injury” for purposes of Article III standing is much broader than the economic loss required for standing under the UCL. Compare Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310, 317 (2011) with Johnson v. Pluralsight, LLC, 728 F. App’x 674, 676-77 (9th Cir. 2018). The inquiry for UCL standing must relate a plaintiff’s purchase to the defendant’s conduct.


In a previous article, we outlined the possibilities for plaintiffs seeking to exploit California’s numerous consumer protection statutes as fodder for class litigation, especially in the wake of COVID-19. Although the Mayron Court has reaffirmed critical limitations on the use of the ARL for this purpose, membership- and subscription-based businesses must remain vigilant to ensure compliance measures are in place and effective.

In addition, Mayron raises serious questions concerning the scope of the ARL’s provisions, such as the gift provision. See Cal. Bus. & Prof. Code § 17603. The Court declined to reach the issue of whether the ARL’s “gift” provision applies to intangible goods or mixed goods/services like the data storage plan offered by Google, but this is likely to be another issue at the forefront of future ARL cases.

*Link to case: