FTC

Public sector software company Tyler Technologies maintained and used the plaintiff's and class members’ personally identifiable information (PII) in a “reckless manner,” a negligence complaint filed Thursday (docket 2:24-cv-00425) in U.S. District Court for Eastern Texas in Marshall alleged.

Plaintiff Efstathios Maroulis and some 500,000 class members suffered “concrete injuries” due to a data breach at art auction house Christie’s, alleged Maroulis' class action Monday (docket 1:24-cv-04221) in U.S. District Court for Southern New York.

The FCC’s updated data breach notification rule “encapsulates the wrong way for the administrative state to approach rulemaking,” TechFreedom’s 6th U.S. Circuit Appeals Court amicus brief said Thursday in support of the five petitioners seeking to invalidate the rule as contrary to law (see 2402210026).

U.S. District Judge John Chun for Western Washington in Seattle denied the motion of Amazon and three of its executives to dismiss the FTC’s amended Amazon Prime complaint, said Chun’s signed order Tuesday (docket 2:23-cv-00932). The FTC’s Sept. 20 amended complaint alleges Amazon for years has tried to enroll consumers into its Prime program without their consent "while knowingly making it difficult" for them to cancel their Prime subscriptions (see 2309200069). Newly named in the amended complaint were Neil Lindsay, Russell Grandinetti and Jamil Ghani, Amazon executives with current or former Prime oversight. Amazon’s motion to dismiss argued that its Prime enrollment processes don’t violate the FTC Act or the Restore Online Shoppers’ Confidence Act (ROSCA), as the FTC alleged. Because this matter comes before the court on Rule 12(b)(6) motions to dismiss, the court must accept as true the allegations in the amended complaint and must view them in the light most favorable to the FTC, said the judge’s order. The FTC alleges that Amazon’s online cancellation process for Prime “required consumers to click six times and go through four screens, seeking to entice consumers not to cancel the subscription, or merely pause the subscription, before the consumer could finally cancel Prime,” it said. Viewing the amended complaint in the light most favorable to the FTC, the court can’t dismiss the claim that cancellation method wasn't a “simple mechanism,” as ROSCA requires, said the order. A "reasonable company in Amazon’s position" would be aware that state and federal laws, including ROSCA, "regulate negative option marketing and require that material terms be clearly and conspicuously disclosed and that they must obtain express informed consent before charging consumers," said the order. Viewing the amended complaint in the light most favorable to the FTC, the court concludes that the allegations "sufficiently indicate that Amazon had actual or constructive knowledge that its Prime sign-up and cancelation flows were misleading consumers," it said.

Amazon's "anti-competitive and monopolistic practices" have artificially inflated prices for Arizona consumers and harmed smaller third-party retailers that rely on its platform, said Arizona Attorney General Kris Mayes (D) in a news release Wednesday in which she announced two lawsuits against Amazon in Maricopa County Superior Court for violations of Arizona consumer fraud and antitrust laws.

Healthcare institutions are “particularly vulnerable" to cyberattacks because of the value of the private information they collect and maintain, but defendant DocGo failed to follow cybersecurity best practices, allowing cuber thieves to gain access to current and former patients’ protected health information (PHI) and personally identifiable information (PII), alleged a negligence class action Thursday (docket 1:24-cv-03594) in U.S. District Court for Southern New York.

U.S. District Judge Cindy Jorgenson for Arizona denied a motion to dismiss the robocalling complaint brought in May 2023 by the attorneys general of 48 states and the District of Columbia (see 2305230069), said the judge’s signed order Wednesday (docket 4:23-cv-00233). Defendants Michael Lansky, his company Avid Telecom and Stacey Reeves, Avid’s vice president-operations and sales, filed the motion. The judge also denied their motion to stay the case and refer the AGs’ claims to the FCC and FTC for expert review, said her Wednesday order. Jorgenson granted the plaintiffs leave to file an amended complaint within 14 days “to state an alter ego claim of individual liability” against defendant Lansky. Should the plaintiffs not amend their complaint, the defendants will have until June 14 to file an answer, said the order. The judge found there’s no merit to the defendants’ argument that as a matter of law, the plaintiffs’ TCPA claims fail because Avid can’t be found to have ever initiated any calls covered by the TCPA, it said. The defendants also provide no contrary law to that relied on by the plaintiffs, it said. The state AGs allege that Avid, Lansky and Reeves violated the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, the Telephone Consumer Protection Act and state laws in 11 states in facilitating billions of illegal robocalls for years via the company's VoIP services. They allege that Avid received more than 329 notifications from USTelecom's Industry Traceback Group, putting it on notice that it was transmitting illegal robocalls. They also allege that Avid, Lansky and Reeves "knew or consciously avoided knowing they were routing illegal robocall traffic." Robocalls are a "scourge,” said North Carolina AG Josh Stein (D) in a statement Thursday, one of the few AGs to weigh in on the judge's denial of the motion to dismiss. “I’m pleased the court agreed that the defendants’ attempt to dismiss the case was baseless," he said.

Nhu Quynh Nguyen, a victim of identity theft, received PayPal notifications Jan. 19 indicating that her “deposit account” had been used to make nearly $45,000 in 19 fraudulent eBay purchases through unauthorized electronic fund transfers, said her complaint against PayPal Wednesday (docket 2:24-cv-00868) in U.S. District Court for Nevada in Las Vegas. Authorities believe Nguyen was the victim of a “parcel mule scam” in which perpetrators fraudulently bought the eBay goods using her account, and then hired “middlemen” to receive and repackage the fraudulently obtained packages, said the complaint. The plaintiff provided PayPal with a police report and an FTC report in support of her requests to investigate and reverse the fraudulent charges, but PayPal denied her requests Feb. 9, and later turned her account over to a debt collector, said the complaint. The Clark County, Nevada, resident alleges that PayPal’s investigation was “unreasonable,” it said. The defendant should have discovered from its own records and Nguyen’s police and FTC reports that the eBay charges to her PayPal account “were unauthorized and fraudulent transactions,” it said. PayPal lacked “a reasonable basis” for believing that the fraudulent charges were legitimate, it said. Nguyen alleges the company’s conduct violated Section 1601 of the Truth in Lending Act and Section 1693 of the Electronic Funds Transfer Act. Despite the plaintiff’s “persistence” in following up with PayPal and her willingness to help aid the investigation, it refuses to “communicate fully” with her and continues to hold her responsible for the fraudulent charges, said the complaint. With her efforts to be absolved of the unauthorized fraudulent transactions unsuccessful, Nguyen was “required” to bring her lawsuit against PayPal to “finally resolve” the dispute, it said. As a “direct and proximate result” of the defendant’s violations, Nguyen suffered actual damages by incurring the fraudulent charges and related fees, charges and interest, it said. She suffered further actual damages through the loss of use of her PayPal account, and through “lost time spent” disputing the charges with PayPal, eBay, financial institutions, the FTC and law enforcement, it 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.

San Diego County plaintiff Melissa Ryan has experienced an uptick in spam calls since an early January data breach at her mortgage lender, loanDepot, said her negligence class action Thursday (docket 2:24-cv-03630) Thursday U.S. District Court for Central California.