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Nationwide Mutual Insurance CIPA Lawsuit

CIPA Lawsuit Against Nationwide Mutual Insurance

August 24, 2023/in False Advertising /by taulersmith

A CIPA lawsuit was recently filed against Nationwide Mutual Insurance for illegal wiretapping and invasion of privacy, and now a federal judge in California has ruled that the case can proceed to trial. The U.S. District Court judge issued the ruling in response to a motion to dismiss the wiretapping claims under Section 631 of CIPA, or the California Invasion of Privacy Act. The civil suit alleges that Nationwide Mutual unlawfully allows a third party to eavesdrop on customer conversations on the insurance company’s website. Chat communications are allegedly monitored in real time, and the sensitive personal data from those conversations is allegedly stored and used for financial gain. These actions would constitute clear violations of California consumer privacy laws.

These days, it is common for many different types of businesses to violate the CIPA and other invasion of privacy laws. If you live in California and used the chat feature on a company’s website, you may be eligible to join a class action lawsuit for invasion of privacy. The Los Angeles consumer protection lawyers at Tauler Smith LLP can help you get financial compensation.

Nationwide Mutual Insurance Sued for Invasion of Privacy

The defendant in the recent invasion of privacy case is Nationwide Mutual Insurance Co., which is a corporation that offers insurance, retirement, investing, and other financial services and products to consumers in the United States, including residents of California. Nationwide operates a website: www.nationwide.com. The website has a chat feature, which customers can use to have online conversations with Nationwide. Sometimes, the customers who use the chat feature may share sensitive personal data with the company.

Third-Party Wiretapping of Customer Conversations

Nationwide Mutual Insurance has been accused of using a third-party company, Akamai or Kustomer, to embed code into the Nationwide website, which allows the third-party company to monitor and store transcripts of the conversations that occur through the chat feature. Akamai specializes in harvesting data from consumer conversations, which is believed to be the reason that Nationwide contracted with them in the first place.

Significantly, Nationwide does not inform customers who use the chat feature on the website that monitoring of conversations, storing of transcripts, or data harvesting occurs. Beyond that, Nationwide does not obtain customers’ consent for any of these activities.

Federal Judge Denies Motion to Dismiss Wiretapping Lawsuit Against Nationwide Mutual Insurance

The plaintiff in the consumer data privacy case is a California resident who used a smartphone to visit the Nationwide Mutual Insurance website and to communicate with Nationwide via the company’s website chat program. She filed her original legal complaint in Los Angeles County Superior Court, and the case was later removed to the U.S. District Court for the Central District of California.

Once the case arrived in federal court, Nationwide filed a motion to dismiss the complaint. The U.S. District Court recently held a hearing on the motion to dismiss. Although the Section 632.7 CIPA complaint was dismissed, the court ruled that the Section 631 CIPA complaint could move forward to trial. The court found that the plaintiff had stated a valid claim under § 631 of the CIPA because she plausibly alleged that Nationwide aided third-party Akamai in violating the consumer privacy statute.

What Are California’s Data Privacy Laws?

On top of having extremely strong consumer protection laws, California also has some of the strongest digital privacy laws in the country. The three most prominent statutes are the California Invasion of Privacy Act (CIPA), the California Consumer Privacy Act (CCPA), and the California Privacy Rights Act (CPRA). All of these data protection laws impose civil liability on companies that invade the privacy of customers. The CIPA imposes a requirement on businesses to obtain permission from customers before recording telephone and internet communications, including online chat conversations. The CCPA specifically prohibits businesses from sharing the personal information of customers with third parties, while the CPRA amended the law to increase the penalties for violating consumer privacy.

What Conduct Is Prohibited by the California Invasion of Privacy Act?

Although Section 631 of the California Invasion of Privacy Act (CIPA) is technically a criminal statute with criminal penalties, the Penal Code authorizes civil liability for violations of the law. This means that consumers whose confidentiality was invaded by a company doing business in California can potentially bring a civil lawsuit for monetary damages.

California courts ruling on CIPA claims have interpreted Section 631 to prohibit three types of conduct:

Intentional wiretapping.
Attempting to learn the contents of a communication in transit over a wire.
Attempting to use information obtained as a result of wiretapping or monitoring of communications.

Additional requirements or elements of a CIPA violation include that the intentional wiretapping was done while the communication was in transit and that the communication was being sent from or received at a location within California. The prohibited conduct includes reading the contents of any message, report, or communication without the consent of all parties to that message, report, or communication. If one of the parties did not know that the chat or other type of communication was being monitored and/or wiretapped, then it would not be possible for them to provide consent or authorization. The bottom line is that eavesdropping on a conversation is a clear violation of Section 631 of the CIPA.

“Aiding” a Violation of the CIPA

Section 631 of the California Invasion of Privacy Act (CIPA) also imposes liability on any company that “aids” or assists another in violating the statute. The plaintiff in this case alleges that Nationwide Mutual Insurance “aided, abetted, and even paid third parties to eavesdrop” on her conversations. Moreover, she alleges that these privacy breaches happened not only with her communications, but also with other consumers’ communications on the Nationwide website.

Party Exception to § 631

There is a “party exception” to Section 631 of the CIPA. Courts have found that a party to a conversation cannot be liable for “eavesdropping” on that conversation. But this gets complicated when the conversation involves a third party. For example, if computer code on a website automatically directs a communication to a third party, the party exception won’t shield the third party from civil liability under the CIPA.

U.S. District Court: Nationwide Mutual Insurance May Have Violated California Invasion of Privacy Law

The plaintiff in the Nationwide Mutual Insurance data privacy case alleged that Nationwide violated the California Invasion of Privacy Act (CIPA) pursuant to California Penal Code § 631. Now, the U.S. District Court for the Central District of California has found that the plaintiff plausibly alleged that Akamai read the contents of her messages, which would constitute a violation of Section 631 by Nationwide for “aiding” in the wiretapping offense. Moreover, the court agreed that it is conceivable that Nationwide hired Akamai specifically to intercept messages and use them for Nationwide’s financial benefit. This would constitute “aiding” the illegal wiretapping by Akamai, which would lead to Nationwide itself being liable for violating the CIPA.

One theory put forward in the case is that Nationwide paid Akamai to “embed code” into the website that “enables Akamai to secretly intercept in real time, eavesdrop upon, and store transcripts” of messages sent via the website chat feature. In fact, it has been alleged that Akamai’s business model is to harvest data from transcripts of communications. Significantly, the federal court said that one inference from the plaintiff’s legal claim is that the personal information being harvested goes beyond mere “record information” like the consumer’s name, address, and subscriber number.

Akamai has been accused of intercepting customers’ messages as they are sent and received on the Nationwide website. The court found that these allegations are “plausible” based on Akamai’s public statements about their conduct. Additionally, the court said that the plaintiff clearly alleged that neither Akamai nor Nationwide Mutual Insurance had her consent to harvest personal data from communications on the Nationwide website.

Contact the California Consumer Protection Lawyers at Tauler Smith LLP

Anyone who used the chat feature on a company’s website may have been the victim of illegal wiretapping and privacy violations. If you are a California resident who visited a website, the Tauler Smith LLP legal team can help you. Contact our Los Angeles consumer fraud and false advertising attorneys today. You can call 310-590-3927 or email us.

Tauler Smith Wins Terminating Sanctions Motion

Tauler Smith Wins Motion for Terminating Sanctions

July 21, 2023/in Successes /by taulersmith

In a recent employment law matter filed in Los Angeles, Tauler Smith LLP won a motion for terminating sanctions. Los Angeles litigation attorney Wendy Miele represented a media production company that was being sued by a former contractor who worked as a personal assistant for the company. When the plaintiff refused to respond to discovery requests and failed to comply with multiple court orders, our California civil litigators sought an order granting case-terminating sanctions against the plaintiff. Although courts are typically reluctant to approve motions that effectively end a case, the LA County Superior Court judge granted the motion for terminating sanctions and dismissed the plaintiff’s complaint. This was a major success for attorney Wendy Miele and the rest of the Tauler Smith litigation team.

For additional information about Tauler Smith LLP’s latest legal victory, keep reading.

Los Angeles Employment Lawyers Successfully Represent Company in Misclassification Case

Los Angeles litigator Wendy Miele represented an entertainment production company in an employment law matter. A former personal assistant for the company filed a civil suit in the Los Angeles County Superior Court alleging that she had been misclassified as an independent contractor instead of as an employee. This is an important distinction because California employment law imposes different requirements on employers based on the classification of workers. The worker’s lawsuit alleged that the company violated the California Labor Code, which protects wage earners and regulates their wages, hours, and other conditions of employment. The lawsuit also argued that she was entitled to recovery of attorney’s fees because the alleged misclassification constituted a violation of the unlawful prong of California’s Unfair Competition Law (UCL), which explicitly prohibits any “unlawful, unfair or fraudulent business act or practice.”

Employment cases involving allegations of wage and hour violations are notoriously difficult to win on the defense side, especially at the pre-trial stage. That’s what makes this legal victory particularly noteworthy. In fact, the Tauler Smith LLP legal team has successfully defended three (3) of these cases so far this year. Our experienced California employment defense attorneys have also secured decisive victories for summary judgment in employment law disputes involving qui tam whistleblower claims, allegations of workplace retaliation, and allegations of wrongful termination.

Discovery Misconduct & Terminating Sanctions

The ex-worker in this case was required to produce certain documents in advance of trial, but the court had to intervene because she abused the discovery process by not turning over the requested evidence to opposing counsel. When the plaintiff committed discovery misconduct by continuing to use stall tactics and ultimately failing to provide the necessary discovery evidence in a timely manner as ordered by the court, the California employment attorneys at Tauler Smith LLP took aggressive action by filing a motion for terminating sanctions.

Other types of sanctions that the court could have imposed against the plaintiff for withholding information included issue sanctions, discovery sanctions, evidence sanctions, and contempt sanctions.

Los Angeles Civil Litigation Attorneys Win Motion for Terminating Sanctions

After hearing arguments from both sides, the Los Angeles County Superior Court judge granted the motion. The court found that the plaintiff willfully refused to comply with Los Angeles Superior Court Local Rule 3.25, which deals with the case management conference and the settlement conference. The rule stipulates that counsel must serve and file lists of exhibits to be presented at trial, and that this must be done at least five (5) days prior to a final status conference. Failure to comply with Local Rule 3.25 can prompt the court to impose terminating sanctions, which is what happened in this case.

In this recent California employment law matter, the plaintiff failed to produce documents and did not respond adequately to discovery requests. This chronic pattern of delay is why the judge ultimately granted attorney Wendy Miele’s motion for terminating sanctions against the plaintiff. The end result of the Tauler Smith legal team’s aggressive representation of their client is that the opposing party’s complaint has been dismissed with prejudice. This was another successful outcome for Tauler Smith LLP.

After the ruling, Wendy Miele commented on the “salacious” nature of the case. Miele said, “There was a lot of inflammatory mudslinging of a personal nature by the opposing party against Tauler Smith’s client. We seized on the tactical strategy of terminating sanctions, which a court rarely grants but which were appropriate in this case. It was a very satisfying win for our client.”

Contact Tauler Smith LLP Today for Legal Help with Your California Employment Claim

The litigation attorneys at Tauler Smith LLP represent both plaintiffs and defendants in California employment claims. Call 310-590-3927 or send an email to schedule a free consultation with one of our experienced litigators.

Arlo Home Security System Sued for Invasion of Privacy

July 5, 2023/in False Advertising /by taulersmith

Arlo Home Security System is being sued for invasion of privacy. The consumer protection attorneys at Tauler Smith LLP recently filed the lawsuit on behalf of a California resident who used the company’s website: www.arlo.com/. Specifically, Arlo is accused of engaging in the unauthorized collection, storage, and sharing of the personal information of its customers. Arlo has also been accused of allowing a third-party company to secretly intercept and monitor the online chat conversations of website visitors without their knowledge or consent. Arlo’s actions are alleged as clear violations of the California Invasion of Privacy Act (CIPA), which explicitly prohibits companies from engaging in behavior that violates certain privacy rights of customers.

We believe Arlo could be potentially violating other privacy rights of consumers based on our preliminary investigation. Keep reading this blog for more information.

Arlo Technologies Fails to Protect the Privacy Rights of Customers

Arlo is a home security company that sells doorbells and security cameras with wireless connections. Arlo Technologies, Inc. is the parent company that manufactures the wireless surveillance cameras and smart home security systems being marketed to consumers for both residential and small business use. Customers are able to use the Arlo.com website to purchase products, monitor their home security systems, and communicate with the company.

Arlo primarily manufactures and sells home security cameras, which means that it is absolutely imperative that the company complies with all applicable federal and California state laws and regulations concerning data privacy. Moreover, the nature of Arlo’s business of selling security cameras and recording devices means that the personal information being collected from customers is likely to be extremely sensitive. When Arlo fails to protect the privacy rights of customers, it exposes them to significant risks not just because the information shared typically goes beyond basic record information to include personally identifiable details, but also because users are able to transmit video files over the internet that make them vulnerable to serious abuses of their privacy.

Privacy Lawsuit Filed Against Arlo Home Security System in Los Angeles County Superior Court

The plaintiff in the current lawsuit against Arlo alleges that Arlo unlawfully collected data using a third-party service on its website. The lead attorney for the plaintiff is Betsy Tauler, a consumer protection attorney who focuses on privacy law. Tauler filed the lawsuit in the Los Angeles County Superior Court.

Arlo’s Chatbox:

A major issue has been raised about the digital privacy of consumers who use Arlo’s website and share their private information. When the plaintiff in this case browsed the site, the complaint alleges, she interacted with a chatbox function that used a third party to collect information about her without her consent. Additionally, the home security system company allegedly utilizes the third-party chatbox on the website to unlawfully transmit and store user data. Arlo does this by covertly embedding code into its online chat function that sends the chat to a third party who collects data from the chat without the user’s knowledge. This type of commercial surveillance is illegal in California and violates the California Invasion of Privacy Act (CIPA).

Arlo’s Privacy Policy:

Arlo has been accused of collecting data from many website visitors without providing any disclosures about how their private information is being used. Although the Arlo website has a privacy policy, the policy is easy to miss because it is not prominently displayed on the home page. In fact, the policy is buried deep within the website, making it difficult for users to read and understand its terms before they provide personal information when prompted to do so by the website chat bot. The complaint filed in the Los Angeles County Superior Court alleges that Arlo’s failure to make sure that website visitors are aware of the terms of the privacy policy constitutes a deliberate attempt to mislead them.

Arlo Sued for Violations of the California Invasion of Privacy Act (CIPA)

The California Invasion of Privacy Act (CIPA) prohibits companies from wiretapping and eavesdropping on the electronic communications of customers. The statute also specifically requires website operators to conspicuously warn visitors if their conversations are being recorded or if any third parties are eavesdropping on them.

The CIPA applies to conversations transmitted via a “cellular radio telephone” or a “landline telephone.” These categories have been found to include smartphones that enable web browsing, as well as desktop computers and laptop computers that utilize wi-fi. The plaintiff in this case accessed Arlo’s website using a smartphone.

Arlo Home Security System faces a civil suit for violating two sections of the California Invasion of Privacy Act:

Section 631
Section 632.7

§631 of the CIPA:

Section 631(a) of California’s Penal Code prohibits companies from using any machine, instrument, or contrivance to wiretap a conversation. The statute also forbids companies from reading the contents of any message or communication without the consent of all parties to the communication.

Section 631 applies not just to telephone conversations, but also to internet communications. This means that Arlo’s wiretapping of website chat communications would constitute a clear violation of the CIPA.

Additionally, Arlo allegedly embedded software on its website for the purpose of recording and eavesdropping on customer communications, which is also prohibited because this type of session recording software qualifies as a “machine, instrument, or contrivance” as defined by the statute.

§632.7 of the CIPA:

Arlo has also been accused of violating Section 632.7 of California’s Penal Code by intercepting and intentionally recording customer communications transmitted via telephone. The plaintiff in this case accessed Arlo’s website and used the chat feature with a smartphone, which qualifies as a sophisticated “cellular radio telephone” as defined by the law. Since the statute prohibits companies from recording telephony communications without the consent of all parties, Arlo’s actions would constitute a violation of Section 632.7.

According to the complaint, Arlo’s actions demonstrate that the company is more interested in profiting from its users’ personal information than it is in protecting users’ privacy rights.

Arlo Allegedly Surveils Customers

Arlo allegedly also allows ADA, a third-party company, to eavesdrop on customer conversations. ADA allegedly collects transcripts of these conversations and uses them for financial gain in unregulated dark data markets without any limitations. Additionally, ADA may be exposing Arlo customer data in international data transfers, which could involve foreign countries with different data protection laws.

Arlo allegedly pays substantial sums of money to ADA to embed code into the website chat feature. This is how ADA is able to allegedly intercept the chat communications in real time. The third-party company then eavesdrops on those conversations and stores transcripts. Website visitors have no way of knowing that this is being done. In fact, the complaint alleges that no one who uses the chatbox feature on the Arlo.com website is informed that they are being subjected to unlawful surveillance.

Do You Use Arlo for Home Security? Call the California Consumer Protection Attorneys at Tauler Smith LLP

Anyone within California who uses Arlo and believes they have been unlawfully collecting data may be eligible to file an invasion of privacy lawsuit to recover injunctive relief and statutory damages under the California Invasion of Privacy Act (CIPA) or other consumer protection laws.

The California consumer fraud lawyers at Tauler Smith LLP are representing plaintiffs in a class action lawsuit against Arlo Home Security System. For more information, call 310-590-3927 or send us an email.

JAMS Private Judges Accused of Corruption

February 2, 2023/in Arbitration /by taulersmith

JAMS is a private arbitration firm based out of Irvine, California. John Trotter helped to start the company, and today he remains one of the principals and a profit-earning shareholder. Trotter and other JAMS private judges have been accused of corruption for allegedly helping attorneys commit fraud and steal millions of dollars from clients. The absence of government regulation of the private arbitration industry has made it possible for unethical lawyers to take advantage of their clients and for big companies to abuse the arbitration system.

For more information about the corruption allegations against the JAMS private judges, keep reading this blog.

No Government Regulation of JAMS Private Judges

JAMS typically uses retired judges to serve as arbitrators and mediators in legal disputes, including business conflicts, contract disputes, intellectual property claims, personal injury claims, and civil rights actions. The former judges who administer cases are known as “JAMS Neutrals,” which is ironic because they are often anything but neutral.

A major problem with the JAMS private arbitration system is that the cases are decided behind closed doors and with little or no scrutiny. For instance, private judges are not subject to regulation by any government agency. The State Bar of California highlighted the issue by declaring in a statement that there is “no overarching regulatory framework for private judging or mediation.” California Supreme Court Chief Justice Tani Cantil Sakauye recently noted that there needs to be greater government oversight of the private judging industry so that litigants are protected.

JAMS Founder John Trotter Accused of Helping Disgraced Lawyer Swindle Clients

John K. Trotter was a retired California Appellate Justice with an unimpeachable record. Trotter began his legal career as a plaintiffs’ attorney in Orange County, and then moved on to the L.A. County Superior Court bench and later to the California Appellate Court bench. He eventually helped to start JAMS. At one point, the National Law Journal called Trotter “the most influential attorney” for Alternative Dispute Resolution (ADR) in the entire United States. Now, there are numerous questions being asked about Trotter’s role with JAMS, including whether he helped others use the private arbitration system to defraud participants.

John Trotter & Tom Girardi

John Trotter and JAMS have come under scrutiny in recent years for conflicts of interest in cases involving regular JAMS clients. In one extreme example, JAMS allegedly helped California attorney Tom Girardi steal millions from his clients. During his illustrious legal career, Girardi earned a reputation as a dogged defender of people who had been victimized by large corporations. In litigation involving aerospace company Lockheed Martin, he represented hundreds of workers who had contracted cancer and other illnesses on the job. After securing a massive settlement on behalf of his clients, Girardi enlisted multiple JAMS judges to fairly distribute the funds. The judges were tasked with determining exactly how much money each worker would get based on their specific injuries.

John Trotter served as the “special referee” who oversaw the distribution of settlement money to Girardi’s clients in another major case against a drug company that sold the diabetes medication Rezulin. The plaintiff alleged that the medication caused cancer, liver failure, and other maladies. After helping to secure a $66-million settlement, Girardi used JAMS mediator Trotter to oversee the distribution of funds. Instead of distributing the funds to the victims, however, Girardi diverted the money to his personal accounts. Moreover, while this fraud was happening, Trotter and JAMS did nothing to stop it.

In addition to having the final say on how funds were distributed in Girardi’s lawsuit settlements, Trotter also oversaw a $13-billion trust meant for the victims of Northern California wildfires. Any withdrawals from the settlement fund were supposed to reimburse the attorneys for legal costs related to the case, not for personal expenses. This is where it became apparent that Girardi’s relationship with JAMS judge Trotter was problematic. While Trotter approved millions of dollars in withdrawals for Girardi, he approved just $600,000 in withdrawals by another law firm that worked on the case. Moreover, this wasn’t the only time that a JAMS private judge has been accused of showing favoritism to one party over another.

JAMS Judge Jack Tenner Allegedly Signed False Documents to Defraud Litigants

One of the JAMS judges in the Lockheed Martin case was Jack Tenner, a respected jurist who spent a decade serving on the Los Angeles County Superior Court bench. As an attorney, Tenner had fought against racial discrimination in the city. While serving as a mediator in the Lockheed litigation, Tenner allegedly helped Tom Girardi cheat clients by signing false documents on L.A. County Superior Court letterhead. Those documents directed Comerica Bank to release millions of dollars to Girardi. Later, when Girardi came under fire from clients who questioned what he was doing with their money, Tenner explicitly supported the attorney. In a letter to the plaintiffs, Tenner said that he had personally approved all settlements and legal fees.

JAMS Judge Edward Panelli Accused of Corruption

Another JAMS judge accused of corruption is Edward A. Panelli, a retired California Supreme Court Justice. Panelli socialized with Tom Girardi even as he worked on JAMS cases for the dishonest lawyer. Panelli was chosen by Girardi to oversee the settlement distribution in a high-profile case involving a menopause drug called Prempro that allegedly caused cancer in elderly women. When many of the plaintiffs started asking questions about why they had yet to receive their portion of the $17 million settlement, Girardi said that he withheld the funds because of an order issued by Panelli. Girardi then refused to turn over financial records, as was required under California law.

Girardi’s claim that Panelli was forcing him to withhold funds from the cancer survivors turned out to be a lie. In fact, Panelli had no legal authority over the case because no court had ever appointed him to oversee the settlement. Moreover, Panelli had only spent around 20 hours working on the case. (For which JAMS billed the law firm $78,000, with another $50,000 payment being made directly to Panelli. This amounted to a $5,000 per hour pay rate.) To make matters worse, Panelli – even in his limited capacity – never instructed Girardi to hold back the money. A California magistrate judge later evaluated Panelli’s actions and concluded that the JAMS judge was culpable in the fraud because he had “rubber-stamped” all of the unlawful payouts to Girardi.

In the Prempro case, Girardi even tried to use Panelli to stop a lawsuit filed by the plaintiffs. When the clients sued Girardi, he argued that the case should be transferred from federal court to a private arbitration with Panelli making the final ruling. Not only did Girardi fight back against subpoenas and court orders, but so too did JAMS. After Girardi’s clients filed lawsuits to ensure transparency and so that they could finally get their settlement funds, JAMS spent months pushing back in court.

Other JAMS Judges, Arbitrators, and Mediators Allegedly Helped Tom Girardi Steal Settlement Funds

John Trotter, Jack Tenner, and Edward Panelli were not the only JAMS judges accused of helping Tom Girardi scam his clients. One former judge allegedly signed a fake court order that allowed Girardi to secure $3.5 million from a settlement fund meant for workers of Lockheed Martin who had been poisoned at the company’s Burbank facility. Another former state Supreme Court justice employed by JAMS allegedly assisted Girardi as he stole more than $1 million from cancer survivors.

Contact the California Arbitration Lawyers at Tauler Smith LLP

Tauler Smith LLP is a law firm with experience handling legal disputes that require mediation and arbitration in California, Texas, and New York. Our experienced arbitration lawyers also represent small business owners in class action lawsuits against JAMS. If your case is being administered by JAMS, it is very important that you contact one of our attorneys immediately. Call us or send an email.

Tauler Smith Wins Federal Bench Trial for Insurance Consumer

December 21, 2022/in Successes /by taulersmith

The insurance claim lawyers at Tauler Smith LLP recently won a major trial on behalf of a food & beverage manufacturer in a federal court in St. Louis, Missouri. The litigation began in a California courtroom with a business dispute over the manufacture of protein bars. Later, several of the parties in that case were also involved in insurance litigation heard by a U.S. District Court. Now, the judge has issued a ruling, with Tauler Smith winning a federal bench trial for their insurance consumer client.

The federal court’s decision can be read here. To learn more about Tauler Smith’s victory in the insurance claim lawsuit, keep reading this blog.

California Nutritional Supplement Lawyers Represent Food Manufacturer in Defective Protein Bar Lawsuit

One of the defendants in the nutritional supplement lawsuit was Eagle Mist Corporation, which does business as Osagai International and which is run by Kevin Laughlin. Eagle Mist is a company that invents and formulates functional foods, such as protein shakes and nutrition bars. They also provide other manufacturers with the technological ingredients they need for foods, beverages, and personal care products.

Nutritional Supplement Agreement

Eagle Mist entered into an agreement to supply ingredients to Sapphire Bakery, which would use the ingredients to reformulate and manufacture 13 types of nutritional protein bars. Sapphire then supplied the nutrition bars to Defense Nutrition, which finally supplied the bars to Julian Bakery.

Nutritional Supplement Dispute

Julian Bakery, the company that ultimately received delivery of the protein bars, alleged that the bars were defective due to the other companies modifying the formula of the bars, in addition to using certain processing agents during manufacturing. Julian Bakery sued Eagle Mist and Sapphire for breach of contract, damages related to defective goods, negligence, breach of warranty, unfair business practices, fraud, negligent misrepresentation, and promissory estoppel.

The lawsuit was filed in the Los Angeles County Superior Court, and the complex multi-party litigation included cross-complaints between seven (7) parties that all had a connection to the business dispute. Los Angeles nutritional supplement attorney Robert Tauler represented Eagle Mist in the California litigation, and successfully defeated three successive motions for summary adjudication in the case.

Insurance Coverage Dispute in California Food Supplement Case

Before starting production on the nutrition bars that were to eventually be delivered to Julian Bakery, Eagle Mist needed to get insurance coverage. At the time, Sapphire Bakery had a commercial general liability policy of insurance issued by Ohio Security Insurance Company. That policy called for Ohio Security to cover any legal expenses that Sapphire might one day become obligated to pay as damages in a lawsuit if sued. Since Sapphire’s insurance policy with Ohio Security allowed for the “named insured” to extend coverage to another company as an “additional insured,” Sapphire asked Ohio Security’s insurance broker to include Eagle Mist in its policy. The insurance broker then provided a certificate of liability insurance to Eagle Mist.

The insurance coverage became extremely important later when there was a business dispute over the manufacture of the nutrition bars. Sapphire Bakery’s insurance policy with Ohio Security meant that the insurance company would pay for Sapphire’s legal defense in the nutritional supplement litigation. The insurance company also agreed to pay for Eagle Mist’s legal defense in the civil suit because Eagle Mist was on the policy as an additional insured.

Texas Consumer Protection Attorney Camrie Ventry Wins Insurance Claim Litigation in U.S. District Court

The plaintiffs in the insurance claim litigation were Ohio Security Insurance Company and Ohio Casualty Insurance Company. The parent company of Ohio Security and Casualty is Liberty Mutual Insurance. Ohio Security and Liberty Mutual paid for Eagle Mist’s legal defense in the California nutritional supplement case. Later, the insurance companies argued at trial that Eagle Mist should be ordered to pay back their legal defense costs because they were never supposed to be covered under the insurance policy.

Dallas consumer protection attorney Camrie Ventry of Tauler Smith LLP represented Eagle Mist in the insurance coverage lawsuit. The case was heard by the United States District Court for the Eastern District of Missouri, with the court holding a one-day bench trial and issuing a memorandum opinion on December 16, 2022. The court was tasked with determining whether Ohio Security Insurance Company did, in fact, have a legal obligation to defend Eagle Mist under the terms of its insurance policy, as well as whether Ohio Security was entitled to reimbursement of the legal defense costs that they provided to Eagle Mist.

Federal Court Rules That Insurance Company Unreasonably Delayed Its Coverage Decision

Ohio Security’s argument at trial was that because Eagle Mist was never covered under the insurance policy, the insurance provider was entitled to recover all expenses it paid for Eagle Mist’s legal defense. The U.S. District Court rejected this argument and found that, under the circumstances, it was justified for Eagle Mist to retain the benefits of the legal expenses paid by the insurance company. Accordingly, the court entered judgment in favor of the Tauler Smith LLP client.

The court cited four main reasons for its ruling in favor of Eagle Mist and against the insurance company:

Ohio Security voluntarily assumed the defense of Eagle Mist in the nutritional supplement lawsuit.
Ohio Security had ongoing knowledge that Eagle Mist was not actually covered under the insurance policy.
Ohio Security continuously paid the defense costs of Eagle Mist in the nutritional supplement lawsuit.
Ohio Security unreasonably delayed for three (3) years before finally notifying Eagle Mist that they were not covered under the policy.

#1 – Insurance Company Agreed to Extend Policy Benefits

One of the benefits of Ohio Security’s insurance policy with Sapphire Bakery (and with Eagle Mist) was that Ohio Security agreed to pay all legal defense costs if there was a lawsuit brought by a third party.

As soon as the defective protein bars lawsuit was filed, Kevin Laughlin and Eagle Mist contacted Ohio Security Insurance Company to confirm that Eagle Mist was covered under the insurance policy. The U.S. District Court said that Eagle Mist had a good faith basis to believe that they were covered under the insurance policy. Kevin Laughlin communicated both verbally and in writing with Ohio Security to confirm that Eagle Mist was an additional insured under the policy, and he did the same with Sapphire Bakery. Moreover, the court found, Laughlin reasonably believed that the Certificate of Insurance issued by the insurance broker explicitly conferred coverage.

#2 – Insurance Company Knew the Policy Was Invalid

Shortly after the supplement civil suit was filed, the insurance company conducted its own investigation to verify whether Eagle Mist qualified as an additional insured under the insurance policy. During this investigation, Eagle Mist provided Ohio Security with email communications, purchase orders, and contracts.

According to the U.S. District Court, Ohio Security knew for several years that Eagle Mist was not actually covered under the insurance policy. But rather than acting quickly to provide notice, the insurance company delayed for three (3) years before finally informing Eagle Mist at a time when it would be most inconvenient for the food & beverage ingredient supplier.

#3 – Insurance Company Continued to Pay Legal Bills

After the investigation, Ohio Security still agreed to cover Eagle Mist’s legal fees for the nutritional supplement lawsuit. For the next three (3) years, the insurance company paid all of Eagle Mist’s legal bills in the case. During this time, Ohio Security made no statements to indicate that Eagle Mist was not covered under the insurance policy, nor did they provide notice to Eagle Mist that the food and beverage company was not covered under the insurance policy. It was only when the lawsuit was set to start trial that Ohio Security suddenly revealed that Eagle Mist never should have been covered under the policy. Ohio Security withdrew their defense, stopped paying Eagle Mist’s legal bills, and demanded that Eagle Mist repay nearly $1 million in defense costs already paid.

#4 – Insurance Company Delayed Its Coverage Decision

Although Ohio Security assumed the defense of Eagle Mist in the case and agreed to cover all legal costs, the insurance company argued that they had explicitly reserved the right to opt out of the arrangement. The court found this argument unpersuasive because the insurance company “essentially buried their head in the sand,” only to later “ask the Court to claw back funds they voluntarily paid over a span of years without producing any evidence that Defendants acted unjustly or that a three-year delay in asserting their coverage position was justified or reasonable.”

The insurance company knew at the start of the California nutritional supplement litigation that Eagle Mist was not supposed to be covered under the policy, but nevertheless continued to pay all legal costs while telling Eagle Mist that there were no issues. Then, after delaying for several years, the insurance company suddenly informed Eagle Mist that they were not covered under the policy. This sudden change in coverage came just one month before trial in the supplement lawsuit, when Eagle Mist would be most vulnerable.

The insurance company tried to justify its decision to withdraw coverage by pointing to a single, vague sentence about “reservation of rights” buried in a 25-page boilerplate letter. The court rejected this argument by noting that “a single mention in a twenty-five-plus-page boilerplate reservation of rights letter, without any further action by Plaintiffs for three years, was insufficient to put Defendants on notice they might not be covered under the Policy.”

Tauler Smith Insurance Litigation Team Represents Businesses & Consumers in California, Texas, and Throughout the U.S.

The Tauler Smith consumer protection & insurance litigation team is proud of its strong track record in insurance claim cases in state courts across California and Texas, as well as in federal courtrooms. Insurance companies must be held accountable when they attempt to take advantage of customers, which is why Camrie Ventry and our Texas litigators always fight so hard for clients in these cases.

After successfully defending Eagle Mist against Ohio Security and Liberty Mutual, Ms. Ventry called it “a great victory” for businesses and individuals who are unfairly forced to pursue the insurance benefits to which they are entitled. Ms. Ventry added, “This ruling shows that insurance companies cannot overreach by demanding to recover an exorbitant amount of money from the very people they are charged with protecting. The court got it right.”

Contact the California and Texas Insurance Claim Lawyers at Tauler Smith LLP

The attorneys at Tauler Smith LLP represent businesses and individuals in a range of practice areas, including dietary supplement lawsuits, consumer protection litigation, and insurance litigation. Call us today or send an email to schedule a free initial consultation about your case.

Natrol Class Action for Anxiety Supplements

May 31, 2022/in False Advertising /by taulersmith

Tauler Smith LLP, a California law firm focusing on consumer fraud litigation, recently filed a class action complaint against supplement manufacturer Natrol LLC. The Natrol class action for anxiety supplements complaint asserts that Natrol is violating the Consumers Legal Remedies Act (CLRA) by marketing its Relax+ Ultimate Calm supplement as a remedy for anxiety when it contains “ineffectual herbs, extracts, and other vitamins that plainly do not have the ability to treat anxiety.” The nutritional supplement lawsuit also alleges that when an individual uses unapproved anxiety medications like Relax+ Ultimate Calm instead of seeking treatment from a licensed doctor, they could worsen their mental health.

The Los Angeles false advertising lawyers at Tauler Smith LLP are bringing civil actions against companies that market and sell dietary supplements claiming to remedy anxiety. If you purchased one of these supplements, you may be eligible to join a class action lawsuit. Contact us today to discuss your options.

Nutritional Supplement Manufacturers Endanger Consumers with Unapproved Anxiety Drugs

Anxiety is a recognized mental disorder. When a person suffers from anxiety, they may be stricken with feelings of worry or fear while attempting to perform everyday activities. This is a major mental health concern for millions of Americans, with statistics showing that more than 40 million U.S. adults are affected by anxiety disorders. This includes millions of young children and teenagers who struggle with mental health problems.

According to the Mayo Clinic, the best way to treat an anxiety disorder is with medications prescribed by a licensed physician and psychotherapy provided by a mental health counselor. Additionally, the National Institute of Public Health (NIH) has stated that individuals should not self-diagnose or use over-the-counter supplements to treat anxiety. The nutritional supplement industry has attempted to capitalize on the country’s worsening mental health crisis in the aftermath of the COVID-19 pandemic by making unsupported claims regarding the ability of their products to relieve conditions like anxiety. When anxiety is left untreated, it can be ruinous to individuals and lead to more serious conditions and diseases.

Natrol Accused of False Advertising of the Relax+ Ultimate Calm Supplement as a Remedy for Anxiety

Natrol is a U.S. manufacturer of vitamins, minerals, and nutritional supplements. The company’s headquarters are in Chatsworth, California. According to Dun & Bradstreet, Natrol’s annual revenues surpass $121 million, which is part of the $140 billion market for dietary supplements.

The complaint alleges that Natrol puts consumers at risk by advertising its Relax+ Ultimate Calm supplement as a treatment for anxiety. The U.S. Food and Drug Administration (FDA) has issued a warning about the use of unapproved drugs to treat anxiety. Consumers who place their trust in nutritional supplement manufacturers may be more likely to forego seeking medical treatment for their health conditions, which can compound the effects of the disorders. Additionally, these individuals may be more likely to develop other mental and physical conditions because anxiety can cause depression, substance misuse, social isolation, and suicide.

Supplements Claiming to Treat Anxiety Violate the California Consumers Legal Remedies Act

The California Consumers Legal Remedies Act (CLRA) is a consumer protection statute that is meant to safeguard individuals against business fraud, including “unfair methods of competition and unfair or deceptive acts or practices in a transaction.” The CLRA, which is codified in Cal. Civ. Code §§ 1750, makes it illegal for companies to mislead consumers in advertising or sales transactions. The statute explicitly prohibits companies from “representing that goods…have…characteristics, ingredients, uses, benefits, or quantities that they do not have.” Plaintiffs can bring private civil actions under the CLRA when they have been deceived by the acts or practices of a company in the sale of consumer goods such as nutritional or dietary supplements.

Natrol has been accused of making unsupported claims about the ability of its Relax+ Ultimate Calm product to relieve anxiety. On the product packaging, Natrol prominently represents that use of the Relax+ Ultimate Calm supplement will reduce “stress, anxiety & tension” and offer other health benefits. According to the complaint, these representations are untrue and unlawful.

Class Action Lawsuit Filed Against Natrol for Violating the CLRA

The Los Angeles business fraud attorneys at Tauler Smith LLP have brought a class action lawsuit against Natrol for violating the CLRA. The legal complaint was filed in the Los Angeles County Superior Court. The complaint explains that an individual who consumes the Relax+ Ultimate Calm product “in lieu of a professional medical evaluation and treatment” is at risk of exacerbating their anxiety, as well as developing additional mental health disorders. Anyone who purchased the Relax+ Ultimate Calm supplement may be eligible to join the class action.

The class action lawsuit against Natrol seeks relief and judgment that includes the following:

An injunction that orders Natrol to correct its alleged deceptive marketing scheme and stop claiming that Relax+ Ultimate Calm is a remedy for anxiety.
An award of actual, punitive, and statutory damages to compensate the plaintiffs who purchased Relax+ Ultimate Calm.
Reimbursement of attorney’s fees for the plaintiffs.
Any other relief that the court may deem just and proper.

Did You Buy a Supplement That Claims to Treat Anxiety? Contact a California Consumer Fraud Lawyer Today

The California consumer fraud attorneys at Tauler Smith LLP are committed to protecting consumers against deceptive business practices. If you purchased a dietary supplement that claims to remedy anxiety, you should contact our legal team today to discuss your eligibility to join a class action lawsuit. Call 310-590-3927 or email us to schedule a free consultation.

BuzzFeed Article on Unruly Agency Intimidation

December 17, 2021/in Social Media Litigation /by taulersmith

BuzzFeed recently published an explosive article that provides information about the many allegations of unethical and illegal behavior by Los Angeles-based Unruly Agency. The talent agency has been accused of numerous transgressions: using deception to convince content creators to sign with Unruly, later threatening to sue clients for supposed contract breaches, taking control of clients’ personal bank accounts, and leaking nude photos of clients. All of this has left content creators who sign with Unruly feeling powerless and trapped.

BuzzFeed: Unruly Agency and Behave Agency Accused of Exploiting Online Content Creators

Unruly Agency is a major content marketing agency that represents a number of different influencers on OnlyFans and other social media platforms. Unruly also runs the Behave Agency, another online content management company with operations in Los Angeles. A large part of what Unruly and Behave do involves the day-to-day management of OnlyFans accounts belonging to content creators. This includes selling online content such as videos and photos, publicizing the creators’ work, and responding to messages sent by fans.

Given the staggering rise in the number of subscription-only platforms on the internet in the past few years, the market for online content creators has never been more competitive. Unruly has been able to capitalize on this by positioning itself as a reputable, reliable agency that is passionate about serving its clients. In fact, one of Unruly’s main selling points is that they can help content creators grow their brand by allowing them to reach a larger audience, which will translate into more followers and increased revenue.

For its story on Unruly, BuzzFeed News interviewed no fewer than 18 people and reviewed various documents reportedly showing that the talent agency was often misleading both clients and workers when it came to the details of contracts that were signed. At least two models who signed with Unruly said that company officials waived off their concerns about contract provisions by claiming that they were merely formalities. When the models attempted to get out of the contracts, however, those provisions were suddenly binding.

OnlyFans Models Hire Tauler Smith LLP for Legal Action Against Unruly Agency

Two former clients of Unruly recently enlisted the legal team at Tauler Smith LLP to represent them in civil suits against the talent agency. Both clients are young models whose lives were nearly ruined by Unruly. L.A. social media litigator Robert Tauler filed suit on behalf of the women in Los Angeles County Superior Court, seeking damages and injunctive relief.

Tauler called the typical Unruly contract “a Frankenstein of the worst provisions I’ve seen put together in one contract.” He said the contract is clearly unlawful, and that its main purpose appears to be to manipulate and gain leverage over the young women who make the mistake of signing with Unruly Agency.

Generally speaking, Unruly’s contracts are exploitative and grant the talent agency an unreasonable amount of control over clients’ personal lives. For example, several clients were locked into contracts with automatic renewal provisions. These legally questionable provisions basically forced the models to stay with the agency for at least three (3) years. Additionally, at least one contract used by Behave Agency gave the company authority to take out a life insurance policy on a client, as well as requiring the client to share private medical information with the agency.

OnlyFans Creators Say They Were Victims of Intimidation & Threats by Unruly Agency

One theme that runs throughout the many allegations made against Unruly Agency in the BuzzFeed article is that the company bullies and scares young female models, influencers, and online celebrities. Amia Miley, a former client of Unruly/Behave, said that many of the girls who sign with the agency are worried about retaliation, so they simply don’t say anything.

One OnlyFans model who did speak up said that the company pressured her to publish sexually explicit content on the internet even after she made it clear that she was not comfortable doing so. Remarkably, Unruly and its founders, Tara Niknejad and Nicky Gathrite, actually promote the agency as a strong advocate for female empowerment and women’s rights.

The young models interviewed by BuzzFeed News made several allegations of improper behavior and illegal conduct by Unruly Agency, including the following:

Unruly uses deceptive recruitment practices. One of the allegations against Unruly is that the talent agency uses misleading tactics and high-pressure sales pitches to convince content creators to sign long-term contracts.
The contracts signed by clients are unclear. The contracts that some clients signed allegedly included terms that conflicted with the terms discussed during contract negotiations with Unruly agents. For example, clients have reported specific details missing from the written contracts after Unruly had explicitly agreed to those details in conversations.
Unruly uses the threat of costly lawsuits to intimidate clients. Once an OnlyFans creator signs with Unruly, they are locked into what some are calling an exploitative contract. If the client later wants to opt out of the contract and leave the agency, they are reportedly threatened with a six-figure lawsuit that could cause financial ruin.
Unruly publishes nude images without consent. At least one OnlyFans model has accused Unruly of secretly taking nude photographs of her while she was changing clothes during a photo shoot. Moreover, the model says that the agency later released those nude images on social media without her knowledge or consent.
Unruly takes control of clients’ personal bank accounts. Multiple models said that Unruly switched out the banking information on their OnlyFans accounts, essentially replacing the client bank account with the agency’s bank account. As a result, Unruly initially gets all of the income generated on OnlyFans, and then the clients are entirely dependent on the talent agency to pay out any money earned. Additionally, at least one client said that the agency was repeatedly late when it came to making payments.

Unruly Agency Also Accused of Exploiting Workers and Committing Wage Theft

According to the BuzzFeed investigation of Unruly Agency’s business practices, the company’s exploitative tactics are not limited to just clients. A number of current and former workers for Unruly have accused the agency of violating California employment laws by misclassifying the employees as independent contractors so that they could illegally underpay them. At least six (6) workers are reportedly planning to file lawsuits against Unruly for wage theft.

Contact Los Angeles Social Media Lawyer Robert Tauler

Although the BuzzFeed article focuses on alleged abuses of power and unlawful conduct by Unruly Agency, it also serves to highlight a broader problem among many talent agencies in California that routinely take advantage of OnlyFans creators, Instagram models, and other social media influencers. If you are a content creator or influencer who has been exploited by a talent agency, Los Angeles social media litigator Robert Tauler and the Tauler Smith LLP legal team can help you. Call 310-590-3927 or submit the contact form.

Tauler Smith LLP Files OnlyFans Lawsuit Against Unruly Agency

July 16, 2021/in Social Media Litigation /by taulersmith

Tauler Smith LLP, a Los Angeles law firm that represents clients nationwide, recently filed a lawsuit against Unruly Agency and Behave Agency, two marketing firms for aspiring models and social media influencers. At the heart of the case is an allegation that the talent agencies took advantage of a young model by exerting undue control over her finances and by threatening her when she wanted to leave the agencies.

Unruly Agency and Behave Agency Accused of Exploiting OnlyFans Model

The model bringing the legal complaint against Unruly and Behave is being identified in court documents as “Jane Doe” to protect her privacy. According to Jane Doe, she hired the talent agencies to assist her with marketing her content on the OnlyFans social media platform, which allows fans of a model or influencer pay a monthly fee to subscribe and access exclusive content from that model.

After enlisting Unruly and Behave to help her sell content on OnlyFans, Jane Doe reported that the talent agencies quickly took complete control of her finances. The agencies also allegedly leaked sexually explicit content of the model without her consent. When she tried to sever the business relationship, they would not allow it: they are accused of threatening the model “with humiliation and financial ruin” if she ever attempted to leave, including the distribution of private sexual materials, videos, and photographs.

The official legal complaint against Unruly and Behave was filed in the Los Angeles County Superior Court on July 15, 2021. The lawsuit raises a number of legal claims, including:

Business Fraud
Unfair Business Practices
Negligence
Invasion of Privacy
Intentional Infliction of Emotional Distress

Jane Doe is asking the court to award both general and punitive damages in the case, in addition to issuing a preliminary injunction against the Defendants.

L.A. Business Fraud Lawyer Robert Tauler Represents Artists, Models, and Influencers in Social Media Litigation

Attorney Robert Tauler is one of the founders of Tauler Smith LLP, and he has extensive experience representing clients in litigation involving social media, business fraud, and intellectual property disputes. Mr. Tauler is the attorney representing Jane Doe in her lawsuit against the powerful talent agencies. Tauler did not mince words when discussing the behavior and actions of Unruly and Behave, calling them “modern day pimps” who “operate in the shadows of the cloistered COVID economy.”

You can view the legal complaint that was filed in L.A. County Superior Court.

Contact the Los Angeles Social Media Lawyers at Tauler Smith LLP Today to Discuss Your OnlyFans Case

Artists, models, and social media influencers who use the OnlyFans platform may find that they need a qualified attorney to protect their interests. If you are the victim of an unscrupulous talent agency, or if you simply need a lawyer to review your OnlyFans contract, call 310-590-3927 or fill out the contact form.

Tauler Smith LLP Wins Real Estate Dispute

June 11, 2021/in Successes /by taulersmith

Tauler Smith LLP, a Los Angeles-based law firm, recently represented a client in a real estate law matter with yet another successful outcome. The case involved a family, the Schallerts, who had been sued by a land developer that wanted a right-of-way over the family’s land for a development.

Robert Tauler Helps Los Angeles Family Fight Developer in Court

Attorney Robert Tauler, one of the firm’s co-founders, represented the Schallert family and secured the victory for them at trial. Tauler successfully argued in the Los Angeles County Superior Court that the developer’s request for an “easement by necessity” should not be granted because there are other ways to access the developer’s property without crossing over the family’s land. The judge in the case, the Honorable Stephen P. Pfahler, agreed with Mr. Tauler and issued a ruling in favor of the family.

The case has received media coverage. To read more, including comments from the judge and attorneys, click here.