OpenAI’s AI products use “stolen" personally identifiable information (PII) from “hundreds of millions of internet users,” including children, without their "informed consent or knowledge," alleged a class action Tuesday (docket 3:24-cv-01190) in U.S. District Court for Northern California in San Francisco.
James Shelton alleges that Fluce AI and its owner, Ralph Cohen, made unsolicited prerecorded telemarketing calls to him and others without their prior express consent, in violation of the Telephone Consumer Protection Act, said his class action Monday (docket 1:24-cv-01429) in U.S. District Court for Eastern New York in Brooklyn. Because the calls were transmitted using technology capable of generating thousands of similar calls per day, Shelton sues on behalf of a proposed nationwide class of other persons who received similar calls, said his complaint. Fluce offers a service that’s used to make tens of thousands of automated sales calls using AI software provided by third parties Amazon and Twilio, it said. To generate leads and find potential customers interested in using its services, Fluce makes telemarketing calls using AI chatbots to consumers who have never had a relationship with the company and who have never consented to receive the calls, it said. Fluce placed at least four such calls to Shelton’s cellphone on Feb. 8, said the complaint. Shelton and members of the class have been harmed by Fluce’s acts “because their privacy has been violated, they were annoyed and harassed, and, in some instances, they were charged for incoming calls,” it said. The calls also occupied their phone lines, rendering them unavailable for legitimate communication, it said.
Crown Roofing & Solar denies the allegations in plaintiff Alissa Hoheisel’s Dec. 22 class action that it places unsolicited telemarketing phone calls to consumers without their consent, in violation of the Telephone Consumer Protection Act (see 2312230001), said the roofing company’s answer Monday (docket 2:23-cv-02563) in U.S. District Court for Kansas in Kansas City. Hoheisel alleges receiving multiple unwanted calls from Crown Roofing & Solar in November, though her number has been listed on the national do not call registry since June 2010. But Hoheisel fails to state a claim on which relief can be granted, said the company in the only affirmative defense it asserts in its answer.
Microsoft conditionally opposes the Feb. 12 motions of the 14 plaintiffs in the first-filed copyright infringement suit against OpenAI in the Northern District of California to intervene in and to dismiss the four actions against OpenAI and Microsoft filed subsequently in the Southern District of New York (see 2402140028), said Microsoft’s opposition Monday (docket 1:23-cv-08292). The California plaintiffs alternatively seek to stay the four SDNY cases or transfer them to California. Microsoft is a defendant in each of the SDNY cases but not in the California case, said its opposition. The California plaintiffs “remarkably do not mention” that fact in their motions, said Microsoft. Were all the plaintiffs in the California and New York actions to agree that Microsoft should be dismissed with prejudice “so that the remaining common parties can facilitate complete consolidation of those matters,” Microsoft wouldn’t object, it said. But on the assumption that the plaintiffs in the New York actions aren’t amenable to dismissing Microsoft with prejudice, it opposes the relief sought by the California plaintiffs, Microsoft said. Its opposition is “for the simple reason that it is defending the cases brought against it in the jurisdiction where those cases were filed,” it said. Microsoft is doing so “with deliberate speed and pursuant" to the 2nd U.S. Circuit Court of Appeals’ "instructions regarding the handling of copyright class actions,” it said. The California plaintiffs’ motions should be “seen as what they plainly are: jockeying for position among putative class counsel in two separate jurisdictions,” it said. Though there may come a time when one court or the other has to address that dispute, that “turf war” involves the procedural step of class certification, it said. The 2nd Circuit has instructed that class certification should follow summary judgment rather than precede it, said Microsoft. The issue may not arise at all as to Microsoft if the court agrees with its fair use defenses. The 2nd Circuit has recognized that those summary judgment defenses should come first “in order to preserve judicial resources by potentially rendering class certification proceedings unnecessary,” it said.
Plaintiff Zuania Vazquez-Padilla remedied the court’s concern that plaintiffs in a multi-plaintiff action against Cognizant Technology relied on group allegations to support their individual claims of fraud, said her memorandum of law Monday (docket 8:23-cv-02607) in U.S. District Court for Middle Florida in Tampa in support of her opposition to Cognizant's motion to dismiss. Vazquez-Padilla’s November complaint alleged Cognizant’s human content moderation system, which provided content moderation services to Facebook, established call centers in “relatively low-paying labor markets” such as suburban Tampa to hire “low-paid, unsophisticated workers with little knowledge of the technology industry to perform the grueling job of content moderation.” Vazquez-Padilla’s lawsuit arises out of the Aguilo v. Cognizant class action (docket 8:21-cv-002054), which the court dismissed without prejudice “chiefly, because Plaintiffs continue to rely on group allegations to support their individual claims of fraud,” said the memorandum. In the multi-plaintiff action, the court determined that Vazquez-Padilla was the only plaintiff to have pleaded with sufficient particularity as to when the fraudulent misrepresentation occurred, it said. Vazquez-Padilla said she received a “cheat sheet” June 28, 2018, from a recruiter who hired content moderators for Cognizant. She also satisfied the “when” and “where” of the initial misrepresentation, saying she arrived for her assessment at Cognizant’s Tampa facility July 6, 2018. In its motion to dismiss, Cognizant said Vazquez-Padilla’s reliance on its misrepresentations about the dangers of content moderation wasn’t justified because whether something is harmful is “inherently subjective." But “nothing could be further from the truth,” said the memorandum, saying Facebook was aware of the dangers of long-term unmitigated content moderation and helped draft workplace safety standards to protect moderators. Vazquez-Padilla has been diagnosed with post-traumatic, acute and anxiety disorders, plus insomnia and other conditions resulting from Cognizant’s “tortious conduct,” said the memorandum. She alleges the injuries affect her daily life in that she and her children don’t go out often as a result of exposure to graphic content. In two related actions, a judge and an arbitrator denied Cognizant’s motions to dismiss, finding plaintiff Dawnmarie Armato sufficiently pleaded with specificity Cognizant’s alleged misrepresentation of “known danger,” and plaintiff Daniel Walker’s knowledge of the dangers of Cognizant’s content moderation system was a question of fact precluding resolution at that stage of arbitration, it said. Cognizant’s motion to dismiss should be denied in its entirety, the memorandum said.
Here are Communications Litigation Today's top stories from last week, in case you missed them. Each can be found by searching on its title or by clicking on the hyperlinked reference number.
Palo Alto Networks made misleading statements and failed to disclose material facts in violation of securities laws from Aug. 18 through Feb. 20, alleged a class action Monday (docket 5:24-cv-01156) in U.S. District Court for Northern California in San Jose against the company and three executives. Palo Alto shares fell 28% Feb. 21 to $261.97 on the company's disclosure of worsening Q2 results.
A law firm settling a federal class action in state court “to increase attorneys’ fees at the expense of the class’s recovery improperly ‘subordinates the interests of the class to its own interests,'" said intervenors’ memorandum in support of intervention Friday (docket 3:21-cv-08592) in a 2021 fraud class action over hidden Verizon fees.
Great Western Insurance Co. denies the allegations in Micheal Welch’s Feb. 1 class action that it violated the Telephone Consumer Protection Act (see 2402020002), said the insurer’s answer Friday (docket 6:24-cv-00234) in U.S. District Court for Middle Florida in Orlando. Welch alleges that Great Western engages in unsolicited marketing, “harming thousands of consumers in the process.” He further alleges that all of Great Western’s violations “were knowing, willful, and intentional,” and that it didn’t maintain procedures “reasonably adapted to avoid any such violation.” But Great Western’s answer asserts 31 affirmative defenses, including that the TCPA’s safe harbor provision bars Welch’s claims. Great Western also contends that the plaintiff “expressly or impliedly consented to and approved all the acts and omissions about which he now complains,” said its answer. Great Western also denies engaging in willful or knowing TCPA misconduct, and it contends that any of Welch’s alleged injuries “are the result of the conduct of an entity or entities that acted outside the scope of their agency” or breached “relevant contractual provisions” for which Great Western can’t be held responsible, it said. The insurer further contends that Welch’s claims on behalf of the putative class are barred because his case isn’t maintainable as a class action under Rule 23, said its answer.
The plaintiffs in a privacy class action, In Re Apple Data Privacy Litigation, don’t say “what data was collected from them, or what that data would have revealed,” said Apple’s reply Friday (docket 5:22-cv-07069) in U.S. District Court for Northern California in San Jose in support of its motion to dismiss.