In this edition of Litigation Roundup, a $10 million class action settlement over defective, leaky pipes gets Fifth Circuit approval, the Texas attorney general sues Google for unlawful biometric data collection and a Dallas-area real estate analytics and software company draws an antitrust lawsuit in California.
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Midland County District Court
Paxton Sues Google Over Biometric Data Collection
Attorney General Ken Paxton announced Wednesday that he filed a lawsuit on behalf of Texas against Google for what he said was the unauthorized capture and use of Texans’ biometric data.
Google is accused of collecting voiceprints, which is a digital model of an individual’s vocal characteristics, face geometry and other biometric identifiers through its products, including Google Photos, Google Assistant and Nest Hub Max.
In February, Paxton lodged similar claims against Facebook, now known as Meta.
“This is yet another example of Big Tech’s deceitful business practices and it must stop,” Paxton said in a news release announcing the Google suit. “I will continue to fight for Texans’ privacy and security.”
Texas is represented by Joseph M. Graham Jr., Barbara Light, Zachery Newton, Lilly MacDonald, Gary Y. Gould, Marc B. Collier, Julie Searle, Chris Cooke, Chase Sippel and Vic Domen of Norton Rose Fulbright; Bradley H. Bains and Matt Catalano of Cotton Bledsoe Tighe & Dawson and a team of a dozen additional attorneys from the attorney general’s office.
Counsel information for Google, and a cause number for the case, wasn’t immediately available.
Eastern District of Texas
Plano Co. Accused by CFPB of Duping Consumers Out of $300M
The Consumer Financial Protection Bureau has sued Plano-based Active Network, accusing it of employing “deceptive and abusive acts and practices to dupe” consumers into enrolling in its “discount club” that has generated it about $300 million in fees since July 2011.
Active Network provides third-party registration and payment processing services to consumers who sign up to participate in events such as races or fundraisers online. The government alleges that when consumers register for their intended event, Active unlawfully gets them to sign up for the “Active Advantage discount club” that hits them with an annual fee of almost $90.
“When consumers are enrolling in an event, Active inserts a webpage into the registration and payment process that includes a button, typically labeled ‘Accept,’ that, when clicked, enrolls the consumers in Active’s discount club membership called ‘Active Advantage,’” the government alleges. “Many consumers click on this highlighted button because they mistakenly believe this action is required to accept charges to their credit or debit cards for the event.”
Since 2011, CFPB told the court, more than three million customers have been victimized.
The case, filed Oct. 18, has been assigned to Judge Amos L. Mazzant III.
The CFPB is represented by its own Uche Egemonye and Minka Moore. Active has yet to retain counsel.
The cause number is 4:22-cv-00898.
Southern District of California
RealPage Hit With Class Action by Renters Alleging Price Inflation
RealPage, a Richardson-based real estate software company, has been accused alongside seven property management firms of participating in a cartel to artificially inflate the price of multifamily residential real estate nationwide.
Additional defendants named in the lawsuit brought by five renters include Security Properties, Thrive Communities Management, Essex Property Trust, Equity Residential, Avenue5 Residential, Mid-America Apartment Communities, FPI Management, Dallas-based Lincoln Property Co. and Greystar Real Estate Partners.
The lawsuit was filed Oct. 18 and has been assigned to U.S. District Judge William Q. Hayes.
“Until approximately 2016, and potentially earlier, many of the nation’s largest lessors priced their leases based upon their own assessments of how to best compete against other lessors,” the lawsuit alleges. “However, beginning in approximately 2016, and potentially earlier, lessors replaced their independent pricing and supply decisions with collusion. Lessors agreed to use a common third party that collected real-time pricing and supply levels, and then used that data to make unit-specific pricing and supply recommendations.”
The plaintiffs are represented by Sophia M. Rios, Eric L. Cramer, Michaela L. Wallin and Daniel J. Walker of Berger Montague, Janet M. Herold, Benjamin D. Elga and Lucy B. Bansal of Justice Catalyst Law, Gary I. Smith Jr., Swathi Bojedla and Katie R. Beran of Hausfeld, Brendan P. Glackin and Dean M. Harvey of Lieff Cabraser Heimann & Bernstein and Jason Scott Hartley of Hartley LLP.
As of Monday the defendants had not retained counsel.
The cause number is 3:22-cv-01611.
U.S. Court of Appeals for the Fifth Circuit
CFPB’s Payday Lending Rule Vacated
A rule enacted by the Consumer Financial Protection Bureau in 2017 has been vacated by a federal appellate panel that rested its decision on the bureau’s “unique, double-insulated funding mechanism.”
The bureau doesn’t receive its funding through congressional appropriations but instead is funded directly by the Federal Reserve, “which is itself funded outside the appropriations process through bank assessments.”
The challenged 2017 rule had two prongs: a prohibition on lenders making loans without first determining the consumer had the ability to repay the loan, and a limit on a lender’s ability to obtain loan repayments via preauthorized access to a consumer’s bank account.
The first prong was repealed in July 2019, and the panel’s Oct. 19 unanimous ruling vacating the second prong will likely trigger an appeal from the CFPB. The panel wrote that congress’ decision to cede its “power of the purse to the Bureau violates the Appropriations Clause and the Constitution’s underlying structural separation of powers.”
The Community Financial Services Association of America and the Consumer Service Alliance of Texas filed notice of appeal in the case in September 2021, according to court records, and oral arguments took place before the panel in May.
Judges Cory T. Wilson, Don Willett and Kurt D. Engelhardt sat on the panel.
The CFPB is represented by its own Kevin E. Friedl and Karen S. Bloom.
The cause number is 21-50826.
$10M Settlement Over Faulty Pipes Gets OK
A lone objector who was challenging a $10 million class action settlement for San Antonio-area owners of D.R. Horton homes that were filled with defective, leaky pipes recently lost his appeal.
Jose Garcia had argued the settlement against the maker of the pipes, NIBCO, that was approved by a Western District of Texas judge last year, was inadequate and that the interests of all class members hadn’t been represented.
The panel determined there was “no basis for determining that the district court abused its discretion in finding the settlement fund ‘fair, reasonable, and adequate.’”
Judges Jerry E. Smith, Edith Brown Clement and Catharina Haynes sat on the panel
The objector is represented by George Fleming of Fleming Nolen & Jez.
The cause number is 21-51151.