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CATEGORY: ENVIRONMENTALBlog
May 12, 2015
In many pollution cases, local residents face water pollution that has not yet reached their residential drinking water wells. These residents have nonetheless been…
In many pollution cases, local residents face water pollution that has not yet reached their residential drinking water wells. These residents have nonetheless been harmed.
Because of the threat of contamination, and the uncertainties that often surround the exact location and spread of groundwater contamination when it is first discovered, local residents often have to take real steps to deal with the pollution.
They may be compelled to buy and rely on bottled water, take shorter baths and showers, cease using pools, and cope with the concerns and discomforts of being under the threat of contamination. Residents in such situations should be able to sue for nuisance, but courts often deny such claims because it is later determined that the contamination did not yet reach their wells.
Nuisance Claims: Validity If Contamination Not on Property
These residents generally assert claims in nuisance, seeking recovery both for the effect this contamination has on their lives (often referred to as a claim for the “loss of use and enjoyment” of their property) and the impact the threat of contamination has on the value of what is frequently their largest investment — their homes (often referred to as a “diminution in property value” claim).
But, when facing these types of allegations, courts are left with the difficult question of whether a person can have a valid nuisance claim even where no contamination has reached the plaintiff’s property. Where does liability stop in such a scenario?
Unfortunately, to avoid that difficult question, courts have too often simply created a bright line — if you don’t have contamination above regulatory standards, you don’t have a claim. This type of holding ignores the entire history and purpose of a nuisance claim.
Private Nuisance Claims
Private nuisance claims have a long history at common law. Originally, beginning in the 12th century, an action for “assize of nuisance” was available where there was no actual entry on land. This action was distinguished from “assize of novel disseisin,” which involved actual physical impact on another’s land. The assize of nuisance protected against interferences with the use and enjoyment of the land.
This distinction remains — nuisance claims at common law, which developed from assize of nuisance, protect rights even where there is no actual trespass or physical encroachment on the land. Trespass claims at common law cover physical intrusions on another’s property. See generally Restatement (Second) of Torts, § 821(D) cmt a. Thus, the purpose and history of a nuisance claim is to provide a remedy even where there is no physical intrusion onto the plaintiff’s land.
Yet, courts repeatedly have held that no claim for nuisance can stand in environmental tort actions where the contamination at issue has not yet reached the plaintiff’s land. In fairness, some of these cases have recognized that a nuisance claim does not require physical intrusion on another’s property. See, e.g., Adkins v. Thomas Solvent Co., 487 N.W.2d 715 (Mich. 1992); Exxon Mobil v. Albright, 71 A.3d 30, 94-95 (Md. App. 2013).
They go on to find that impacts on use and enjoyment resulting from the threat of contamination or low levels of contamination are not “significant” enough to warrant a claim in nuisance. For example, in Albright, the court found a nuisance claim could not lie based on evidence of having to use “bottled water or Brita filters, entertaining in and about their homes less than expected, reducing the frequency of use of outdoor spaces, and taking shorter showers and baths.” Id. at 95. But this sort of limitation seems to ignore the reality of living with contaminated groundwater, especially where that contamination threatens a home’s drinking water.
Nuisance Actions Based on Uncertainties
Nuisance actions traditionally have been viable causes of actions for foul odors, loud noises or bright lights that intruded upon the plaintiffs’ property. Indeed, these are the very types of non-trespassory nuisance claims upheld by Courts. See Restatement (Second) of Torts, § 821D, reporters’ notes.
If such interferences are sufficiently “significant” to be worthy of legal protection, how can it be that losing access to one’s drinking water — even for a relatively short period of time while contamination is investigated – is not? It cannot be ignored that the uncertainties often surrounding groundwater contamination – How far has it spread? Where is it moving? How deep is it? Where are the highest concentration levels? — are all the result of the polluter’s actions in causing and failing to control or investigate the contamination.
Courts too often seem to simply disregard the impact of losing one’s tap water for drinking and cooking, or losing access to a home’s swimming pool, as “insignificant.” But the result of such an approach is, effectively, giving a license to pollute without threat of liability. This cannot be the law, but for reasons that remain unclear, too many courts have decided cases along those lines.
For practitioners, it seems that steps must be taken to bring the reality and gravity of the harms caused by threatened or unknown levels of contamination to the court’s attention. Compelling and convincing testimony from individual plaintiffs is critical to get across to the court the difficulties of living with the contamination that is entirely the result of the defendant’s actions.
Indeed, many of the cases relied upon by defendants in these situations faltered on a lack of evidence of actual interference with use and enjoyment in the case, or even an outright concession by plaintiffs that they were not seeking use and enjoyment damages. See, e.g., Adkins, 487 N.W.2d at 726; In re Wildewood Litig., 52 F.3d 499 (4th Cir. 1995); Golen v. Union Corp., 718 A.2d 298 (Pa. Super. 1998).
Where defendants attempt to rely on such cases, they can be and must be distinguished where plaintiffs can assert actual and substantial impacts on their lives. Losing access to one’s drinking water is no minor inconvenience, especially where the possibility remains that the drinking water the plaintiff has been relying on for years may have unknowingly been contaminated. These are the types of impacts to the pleasure, comfort and security of one’s home that a nuisance claim is intended to protect.
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CATEGORY: ENVIRONMENTALBlog
Apr. 20, 2015
When the Deepwater Horizon offshore oil drilling rig exploded five years ago today, it was impossible to imagine that anything positive could result from…
When the Deepwater Horizon offshore oil drilling rig exploded five years ago today, it was impossible to imagine that anything positive could result from that tragic event. Innocent people died, the environment was decimated by more than 134 million gallons of oil spilling over four months, multiple thousands of businesses were ruined or put on the brink of ruin, and nearly 100,000 people — mostly residents of the Gulf — were exposed to the toxic fumes of BP’s oil during the cleanup of the oil from wildlife, beaches and wetlands.
Gulf Region Health Outreach Program (GRHOP)
One positive outcome of this disaster, however, is the Gulf Region Health Outreach Program (GRHOP), a component of the BP Medical Benefits Class Action Settlement designed to improve the many facets of health care that are lacking in the Gulf. The GRHOP, funded with $105 million by BP as part of the settlement, brought together four Gulf states and four health-related programs that share a common thread: the growth and sustainability of quality health care facilities and services in the Gulf region most impacted by the oil spill.
The GRHOP disburses funds over five years to the following institutions and for the following projects:
- Louisiana Public Health Institute for the Primary Care Capacity Project to expand and improve access to quality health care;
- a quad-state consortium of Gulf state universities for the Mental and Behavioral Health Capacity Project designed to address behavioral and mental health needs of coastal citizens and provide mental health services;
- The University of South Alabama for the Community Health Worker Training Project for the training of community health workers who help Gulf residents understand and maneuver within the health care system; and
- Tulane University School of Public Health for the Environmental Health Capacity and Literacy Project, which focuses on expanding and improving environmental health understanding and expertise.
In addition to the GRHOP, the medical settlement includes:
- Compensation for acute and chronic injuries from exposure to the oil
- The right of class members to a health consultation visit every three years for a maximum of 21 years
- Streamlined litigation procedures in the event a class member suffers a later-manifested physical condition that he or she alleges is from exposure to the oil.
Class members include all individuals who worked as BP oil spill cleanup workers, as well as residents of certain coastal and wetlands areas of Louisiana, Mississippi, Alabama and the Florida Panhandle. The GRHOP’s target beneficiaries are residents, especially the uninsured and medically underserved, of the17 coastal counties and parishes in the above-listed states. The majority of class members directly benefit from the GRHOP.
GRHOP’s Benefits to Class Members and the Gulf Coast
The GRHOP’s benefits to the class, and to coastal communities across the Gulf generally, are too numerous to mention. This area of the country had seen countless natural disasters and the BP oil spill, coming on the heels of these disasters, simply tipped the balance for many. The negotiators of the medical settlement, of which I was one, recognized this vulnerability and the need for improvements in, and in some areas availability of, primary care, as well as mental and behavioral health services. These services are now available where none before existed.
GRHOP funding, for example, has resulted in new or enhanced facilities in 17 community health centers, with a total of 60 individual clinical sites, across the impacted Gulf region. In Louisiana alone, there are now three fully-funded health care facilities that previously had buildings but no operational budgets to provide health services in the poorest of parishes. A fourth facility had an operating budget, but no clinical building in which to provide services, until the GRHOP funding provided that structure. The GRHOP funds are also credited with more than 60,000 individuals receiving mental and behavioral services, including behavioral health screenings and assessments, consultations, psychiatric and psychological treatment, telepsychiatry, supportive services in schools and communities, and education and training in Louisiana parishes impacted by the oil spill. None of this existed before the medical settlement was negotiated.
GRHOP Should Not Be Viewed as Cy Pres
We successfully argued before the District Court that the funds for GRHOP were not cy pres. The BP medical settlement had few objectors, and even among those objectors only one argued that the GRHOP was illegal cy pres. Cy pres is an equitable doctrine that permits the distribution of settlement funds to non-class members when those funds go unclaimed or are left over. [1] The GRHOP provided $105 million to fund Gulf health-related programs, but the district court held that it was not cy pres. Instead, it found that the GRHOP provides a direct benefit to all class members, is not a distribution of unclaimed funds, and does not detract from class members’ fair compensation under the settlement.[2]
GRHOP complements the other class benefits by enhancing class members’ access to available and quality health care, which enables them more easily to access other aspects of the medical settlement, such as the 21-year periodic medical consultation program and the discovery of conditions that may be subject to lawsuit against BP at a future time for later-manifested diseases. According to the district court, elimination of the GRHOP would not benefit the class, but instead result “in the loss of additional funding that will strengthen the health care infrastructure across the Gulf Coast, directly benefitting both Class Members and their communities.” [3] That decision is correct and should be followed by other courts when funds, such as the GRHOP, are included in class settlements.
GRHOP Settlement Type Should Be Allowed
But what if the GRHOP were cy pres? Shouldn’t a court still approve such a program in lieu of a few extra dollars to class members when such benefits aid the entire class in ways additional payments cannot?
Consider the BP medical settlement without GRHOP: class members would receive compensation if they are able to prove their acute or chronic injury, but they might not have a health care facility within 25 miles of their home to receive their periodic medical consultation, or there might not be a physician in their vicinity who understands the health consequences of chemical exposure, such as to oil. These and many other benefits have become a sustainable reality due to the GRHOP.
Some courts consider cy pres awards inferior distributions because they provide class members with an indirect benefit, even in circumstances when they promote the lawsuit’s underlying objectives.[4] But when they directly and positively impact the very harm caused by the defendant, and otherwise do not cut into class members’ compensation, they should be allowed and even encouraged.
True, not every cy pres award benefits the class. But where they do provide benefits like the GRHOP, courts should not discourage parties from negotiating cy pres awards in appropriate circumstances.
Classwide Program Benefits Potential Standard for Settlements
I encourage counsel in class settlements, especially when class members disproportionately comprise vulnerable segments of the population, to consider negotiating a portion of the settlement funds for a program designed to benefit class members on classwide basis that relates to the underlying injuries plaintiffs suffered from the defendants’ wrongdoing.
Such an award should not substitute for adequate compensation for economic and noneconomic losses of class members, but rather it should enhance, or complement, that compensation. In another oil spill, for example, if a certain fishery will no longer be available for fishermen to fish, such a settlement program could fund a vocational program for those no longer able to engage in their lifelong profession.
In a non-oil spill context, for example, a class action involving data breach, a settlement program could fund informational sessions and consultation with experts for securing and protecting private information that has been compromised. While not necessarily appropriate in all contexts, it is worth considering in any class action settlement whether a program designed to address the root effect of the defendant’s wrongdoing is not only appropriate but actually a direct, and oftentimes critically important, benefit to class members.
Such programs can be every bit as valuable as actual financial compensation. It is my belief that the GRHOP meets that test.
View Sources
1. Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468, 473-74 (5th Cir. 2011); In re Baby Prods. Antitrust Litig., 708 F.3d 163, 169 (3d Cir. 2013) (contrasting cy pres awards with “direct distributions to the class”).
2. In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Plaisance, et al. v. BP Exploration & Production Inc., et al., MDL 2179, 295 F.R.D. 112, 138-39 (E.D. La. 2013).
3. Id.
4. Klier, 658 F.3d at 475; In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679, 682 (8th Cir. 2002) (explaining that cy pres funds should adhere as nearly as possible to the lawsuit’s overall aims).
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CATEGORY: CONSUMER PROTECTION – GENERALBlog
Apr. 20, 2015
Although repeatedly asserted in cases of stolen personal data, bailment claims have been given generally short shrift by the courts. But the reasons provided…
Although repeatedly asserted in cases of stolen personal data, bailment claims have been given generally short shrift by the courts. But the reasons provided for rejecting these claims do not hold up to scrutiny in light of the way in which bailment principles have traditionally been interpreted and applied. On its face, a claim for bailment would seem to be a very good fit for the situation where an individual (the bailor) provides valuable personal data to a corporate entity such as an online merchant (the bailee). The bailor allows that entity to store that information for future transactions between the parties, often subject to reassurances from the entity that the information will be kept safe and secure. The courts that have addressed bailment claims in the context of data breaches have rejected the claim for a variety of reasons, but they have provided little analysis or reasoning to their decisions, often citing to no authority for their holdings.
Bailment Theories in Data Breach Cases
In one of the first data breach cases to address the claim, the Northern District of Illinois defined a bailment as “the delivery of property for some purpose upon a contract, express or implied, that after the purpose has been fulfilled, the property shall be redelivered to the bailor, or otherwise dealt with according to his directions, or kept until he reclaims it.” Richardson v. DSW, Inc., No. 05-C-4599, 2005 WL 2978755, at *4 (N.D. Ill. Nov. 3 2005). Initially, the Richardson court accepted that intangible property can be the subject of a bailment claim. The sole reason provided by the court for rejecting the bailment claim in Richardson was that there was no agreement by the bailee to return the information to the bailor. The court cited to no authority to support that this was even an element of a bailment claim. Indeed, the definition provided by the Richardson court for a bailment included situations where the property is not returned, but “dealt with according to [the bailor’s] directions, or kept until he reclaims it.” Id. Either of these results could be expressly or impliedly part of providing personal data to a store or other corporate entity. There would appear to be no basis for rejecting a bailment claim on the basis of a lack of agreement to “return” the property, especially where the claim is based on intangible data, which would never need to be “returned.”
Bailment Theories Rejected by Courts
Subsequent to Richardson, the Southern District of California rejected a bailment claim in the Sony Network cases for similarly unsupportable reasons. First, the Sony court held that there were no allegations of “intentional conduct” by Sony to retain the information. See In re Sony Gaming Networks and Customer Data Security Breach Litigation, 903 F. Supp. 2d 942, 974 (S.D. Cal. 2012). But that is not the standard for bailments. Rather, where a bailment is for mutual benefit of the bailee and bailor, the bailee must exercise “ordinary care” or “reasonable care and diligence” with respect to handling and use of the subject matter. See C.J.S. Bailments § 65. If the bailment were interpreted as for the benefit of Sony, Sony was obligated to exercise “great care” or “extraordinary diligence” in protecting the property. Id. at § 82. In either case, Sony would be liable for failing to exercise the proper care, it need not “intend” to steal or misuse the data. Finally, the Sony court also reasoned that the damages sought by the bailment claim were duplicative of other claims, such as negligence or consumer protection statutes. Sony Gaming Networks, 903 F. Supp. 2d at 974-75. But the court had largely dismissed those other claims, so the fact that the damages may have been “duplicative” of dismissed claims seems hardly a reason to dismiss the bailment claim. Again, the court cited no authority for the proposition that a separate cause of action can be dismissed merely because it seeks the same damages of another cause of action.
More recently, the District of Minnesota dismissed bailment claims in the Target data breach case. In re Target Corp. Customer Data Security Breach Litigation, 2014 WL 7192478, at *21 (D. Minn. Dec. 18 2014). Relying on Richardson and Sony, the court found that the bailment claims could not stand because (1) the data was not “to be returned” to the bailor and (2) there was no allegation that Target “wrongfully retained that information” (i.e., the no “intent” argument from Sony). Id. For the reasons above, neither of these bases stands up in light of the law surrounding bailment. Again, the court provided essentially no analysis of bailment claims, the standard of care applicable, or the issue of whether “return” of the property is an element at all, let alone where the property is intangible.
Bailment Claims Should be Viable in Data Breach Litigation
No court to date has given sufficient thought or analysis to bailment claims in the context of data breaches. The claim is a natural fit for a situation where an individual provides valuable and private information to a third party for safekeeping, and the remedy, based on the value of the property lost or damaged, would provide a distinct injury and an ascertainable measure of damages. The one distinction that has some merit – the fact that data is an intangible good that cannot be “delivered” in the traditional sense – has not been the issue, nor should it be. See Thyroff v. Nationwide Mutual Ins., 864 N.E.2d 1272, 832 N.Y.S.2d 873, 8 N.Y.3d 283 (2007) (explanation and analysis on why, in today’s world of commerce, traditional torts such as conversion should be read to apply to intangible “data”). Bailment is a long-standing, well-developed, and relevant cause of action that deserves better analysis and evaluation in data breach cases than it has received from courts to date.
In future litigation, data breach victims should place a greater focus on the bailment claim both in pleading the cause of action and at the motion to dismiss stage to ensure that this claim is forcefully alleged.
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CATEGORY: CONSUMER PROTECTION – GENERALBlog
Apr. 3, 2015
Lenovo carelessly placed thousands, if not millions, of its customers at substantial risk of eavesdropping and identity theft when Lenovo installed Superfish’s VisualDiscovery malware…
Lenovo carelessly placed thousands, if not millions, of its customers at substantial risk of eavesdropping and identity theft when Lenovo installed Superfish’s VisualDiscovery malware on more than 45 models of Lenovo laptops sold since September 1, 2014. This malware allows Superfish to spy on its users while they browse the Internet; Superfish then sends targeted advertisements to its users based on their browsing behavior. But the Superfish VisualDiscovery software also allows hackers to spy on users as well, potentially exposing those consumers to unprecedented data theft. Consumers expect much better from hardware manufacturers such as Lenovo, which are uniquely positioned to protect consumers and have the responsibility to do so. Lenovo knowingly allowed Superfish’s malware to nest deep within the Windows operating system — making it nearly impossible for antivirus software to find and stop it, let alone ordinary consumers. Lenovo and Superfish seemingly agreed to share the advertising revenue generated from the data that was illegally stolen from their customers’ laptops, showing that Lenovo and Superfish irresponsibly placed profits ahead of customers’ privacy and data security.
What Is Superfish?
The Superfish malware is especially pernicious because it defeats the primary security system —called the SSL/TLS protocol — that protects the privacy of communications made with secure “HTTPS” websites. This malware enables Superfish to intercept and decode all online communications made on the affected Lenovo laptops, including communications to secure websites such as online retailers, banks and health insurance companies. Moreover, the malware allows hackers to easily masquerade as genuine websites in order to steal customers’ communications with secure websites. For example, you could think you are logging in to Bank of America’s website but you are unknowingly giving your username and password to a hacker pretending to be Bank of America. A hacker could use the same trick to gain access to your private health records or to intercept your login credentials when you use PayPal, eBay, TurboTax, or any number of secure websites. With the information they can easily steal, hackers have endless opportunities to create havoc. They can apply for credit cards in your name, file tax returns in your name, sell your medical data, and ruin your credit. Adding insult to injury, Lenovo apparently knew that the Superfish malware was intentionally designed to spy on consumers and steal their private information, yet Lenovo decided to install the malware anyway.
Due to the Lenovo Superfish scandal, the U.S. Department of Homeland Security released an alert which urged Lenovo laptop owners to remove Superfish’s VisualDiscovery malware from their laptops. Lenovo has released an update that purportedly removes the malware, but security experts are not convinced that the update is completely effective. One report describes finding files with names such as “VisualDiscovery.exe” and “SuperfishCert.dll” after running Lenovo’s software update.
W&L Files Lawsuit Against Lenovo
Lenovo’s and Superfish’s egregious behavior is not just annoying; we believe it violates federal and state law. On March 3, 2015, Weitz & Luxenberg filed a class action lawsuit in federal court in Brooklyn, New York on behalf of two aggrieved consumers. On March 12, we followed with another lawsuit in federal court in San Jose, California. The plaintiffs in these lawsuits claim that Lenovo and Superfish violated the following federal computer security laws:
- Federal Wiretap Statute — prohibits intercepting or disclosing electronic communications without consent.
- Federal Computer Fraud and Abuse Act — prohibits trafficking in stolen passwords and obtaining information from a protected computer without authorization.
- Federal Stored Communications Act — prohibits taking stored information from a computer without authorization.
The plaintiffs allege also that Lenovo and Superfish violated their sales warranties and committed fraud by concealing what they knew about the dangerous Superfish malware. We demand compensation for all injured consumers, and that Lenovo and Superfish repair the damaged laptops at no expense to consumers. And we are not alone in taking action against Lenovo and Superfish. The Connecticut Attorney General recently opened an investigation into Lenovo’s and Superfish’s conduct.
The harmful effects of the Lenovo and Superfish scandal are still coming to light. This unfolding episode is a stark reminder of the power that hardware and software companies have over our most private information, and that we must be vigilant to ensure that they comply with the law and give the utmost priority to the security and confidentiality of our private data. If you own a Lenovo laptop and are worried that the security of your personal information may be at risk, please contact us today for a free consultation:
http://www.lenovolawyer.com/
(877)540-2553
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CATEGORY: CONSUMER PROTECTION – GENERALBlog
Apr. 1, 2015
Welcome to the Weitz & Luxenberg Consumer Protection Blog, hosted by the Weitz & Luxenberg Environmental, Toxic Tort, and Consumer Protection Unit. We litigate…
Welcome to the Weitz & Luxenberg Consumer Protection Blog, hosted by the Weitz & Luxenberg Environmental, Toxic Tort, and Consumer Protection Unit. We litigate environmental torts, mass torts and consumer protection class actions, and we use the courts to curb corporate abuses that cause real harm to everyday people. In this forum, we will share our perspective on law and policy, and shine a light on corporate wrongdoing.
We hope that you will return regularly to join this conversation. Some days we will focus on the fight against polluters or those whose practices expose the unwitting to dangerous chemicals. We will discuss current and past litigation — our efforts, for example: to hold polluters like Exxon and Chevron responsible for treatment costs borne by municipal water providers when their chemicals contaminate the groundwater used by water providers for drinking water; to hold British Petroleum responsible for the disastrous environmental and economic effects of the 2010 oil spill in the Gulf of Mexico; to seek damages to human health and property from contaminated groundwater and vapor intrusion into homes in Pompton Lakes, New Jersey, caused by decades of DuPont’s pollution at its Pompton Lakes explosives plant; to compel Monsanto to remove toxic PCBs from our children’s schools; and to seek compensation for the Long Island water provider Bethpage Water District for remediation costs associated with the harmful toxins dumped by Northrop Grumman in the 1990s that currently contaminates the Bethpage drinking water.
Other days we will turn our attention to corporate practices that harm consumers — false advertising, concealment of dangerous product defects, and failure to safeguard important customer information from internet hackers. Whether we are battling car manufacturers such as General Motors for its failure to warn customers of a dangerous ignition switch defect, or suing insurance companies such as Anthem Blue Cross for its failure to safely store consumer data, Weitz & Luxenberg is on the front lines of consumer law. We hope to share our perspective with you.
Thank you for joining us and we invite you to return regularly. This is but the first of an ongoing conversation.
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