Expect Consumer Class Actions to Rise Given State, Federal Laws

The Bottom Line

• Consumer class actions likely wil be very active in telemarketing, online privacy, product labeling and marketing, and auto-renewal contracts.
• Developments in both state and federal law will be worth monitoring.
• Businesses should consider employing or updating arbitration clauses and class action waivers.

Last year was busy for the consumer class action space. There was substantial litigation involving staples such as the Telephone Consumer Protection Act and California Invasion of Privacy Act, along with new, fertile soil for developments affecting consumer outreach, product labeling and marketing, and consumer data collection and use.

Telemarketing’s Increasing Complexity

Telemarketing activity will continue driving major litigation in the near future and the following issues, and developments in this space, should be monitored:

Telephone Consumer Protection Act: A new trend in 2025 was the proliferation of litigation premised on 47 CFR Section 64.1200(c)(1), which bars certain solicitations before 8 a.m. and after 9 p.m. local time at the called party’s location. Claims included fact patterns based on communications made with consent and/or pursuant to established business relationships but premised on consumers allegedly never agreeing to specific language addressing the time of day (despite the TCPA not requiring that).

The US District Court for the District of Delaware chimed in on Dec. 30, concluding that under Section 64.1200(c)(1) “the general definition of ‘express invitation or permission’” is the applicable consent standard. And that standard is satisfied when an individual “knowingly releases” their phone number.

Companies should look out for further developments in court as well as from the Federal Communications Commission in response to a petition on this issue.

Due to US Supreme Court developments over the last two years, whether text messages qualify as calls under key TCPA regulations resurfaced as a central question. Courts have issued varying decisions on the issue over the last year, and companies using texting should continue to watch this developing space.

Although no one wants to be on the receiving end of a TCPA class action, one of the most dangerous types can be a prerecorded call case. Companies have received some relief, however, as the US Court of Appeals for the Ninth Circuit on Jan. 13 found that videos embedded in text messages may not trigger prerecorded call provisions.

State law mini-TCPAs: Not to be outdone by their federal counterpart, states have pressed on with mini-TCPAs. Texas expanded its mini-TCPA last year, adding a registration requirement for businesses, and broadening the scope of solicitations potentially triggering registration requirements to include texting.

In response to ambiguity in the statute’s language, parties in a case involving Texas reached a settlement that produced a joint motion prompting the US District Court for the Western District of Texas to issue an order concluding that texts made with consent don’t fall within the purview of the registration requirement.

Though it’s a positive development, because the decision is not binding, companies doing business with Texas consumers should monitor this area, particularly how courts treat this development. And companies in general should keep abreast of state-level mini-TCPA developments.

Online Privacy

The plaintiffs’ bar has continued to reimagine how privacy laws apply in digital space. A boom in California Invasion of Privacy Act litigation last year was premised on digital technology allegedly transmitting data to third parties without adequate consent.

We anticipate these claims will continue at a high volume based on a variety of creative theories. Plaintiffs, for example, have taken the position that pixels are the equivalent of “pen registers” and “trap and trace” devices under CIPA.

Claims also included fact patterns premised on technology allegedly transmitting information simultaneously to third parties in violation of other CIPA wiretapping provisions. Variations of the foregoing included claims premised on website search bars allegedly transmitting search data.

State and federal courts have issued mixed decisions to date, creating uncertainty and an environment ripe for further litigation.

Labeling and Marketing

As consumer expectations evolve, product labeling and marketing practices have become a focal point for scrutiny by enforcement agencies and private litigants alike. From origin claims to influencer endorsements and sustainability representations, companies face mounting pressure to ensure accuracy, transparency, and compliance across all channels.

Three areas dominated the legal landscape last year and are poised to shape litigation and regulatory priorities on the horizon:

‘Made in USA’ claims: Reflecting the Trump administration’s heightened focus on tariffs and domestic production, 2025 saw more companies incorporate country-of-origin labeling emphasizing a product’s US origin into their marketing strategies.

These claims are appealing to consumers, but they draw heightened scrutiny from the Federal Trade Commission and consumer class action attorneys challenging them as false or deceptive.

The FTC declared July 2025 “Made in USA Month,” issued warning letters to several manufacturers making unqualified origin claims, and settled one case for over $3 million in penalties. The volume of Made in USA class actions nearly tripled from 2024, with one case producing a $2.36 million jury award. This trend is expected to continue, making it critical for companies to understand and comply with applicable federal and state requirements.

Under the FTC’s “all or virtually all” test, a product advertised as Made in USA must meet three core criteria:

• Final assembly or processing occurs in the US
• All significant processing takes place domestically
• All or virtually all components are sourced from the US

The FTC permits only negligible foreign content—without defining a numeric threshold—and evaluates compliance based on both cost and functional significance. By contrast, California law imposes quantitative thresholds, allowing foreign components to comprise up to 5% of wholesale value, or up to 10% if domestic sourcing is unavailable. This creates a less stringent standard on cost, though not on functional significance, compared with the FTC’s approach.

Companies should maintain detailed sourcing and production records, ensure that origin claims comply with both FTC and state standards, monitor litigation trends and enforcement developments, and use clear and conspicuous qualifications where appropriate.

Influencer marketing: This remains a powerful driver of consumer engagement, but 2025 marked a turning point in its legal landscape. What was once primarily a regulatory compliance issue governed by the FTC’s “Guides Concerning the Use of Endorsements and Testimonials in Advertising” has evolved into a significant source of consumer class action litigation.

Private plaintiffs increasingly are targeting brands and influencers for allegedly deceptive practices, claiming social media posts failed to clearly disclose material connections—such as payments, free products, or affiliate links—and misled consumers into paying premium prices. These suits often seek substantial monetary and injunctive relief against companies as well as individual influencers.

This trend is expected to accelerate, making it critical for companies to understand and comply with both federal and state requirements. Developing clear guidelines, providing training to influencers and employees, maintaining rigorous monitoring systems, negotiating robust agreements, and tracking trends are all essential. By embedding strict compliance into influencer programs, companies can help reduce exposure to regulatory action and costly class litigation.

Sustainability claims and ingredient disclosures: Reflecting heightened consumer demand for transparency and sustainability, the rise of “greenwashing” litigation shows no signs of slowing.

Areas of focus include ingredient disclosure and robust substantiation. Plaintiffs challenged broad environmental claims—such as “eco-friendly,” “green,” and “carbon neutral”—in 2025, arguing that these statements lacked verifiable support.

Meanwhile, suits targeting cosmetics and personal care products center on omissions or misleading disclosures of chemicals such as PFAS, allergens, and compounds tied to health or environmental concerns. Regulatory signals reinforced this trend, with the FTC continuing to evaluate updates to its Green Guides and states such as California imposing stricter standards for recyclability and chemical transparency.

Looking ahead, companies should expect more aggressive enforcement and private litigation aimed at vague or aspirational sustainability claims. Anticipated revisions to federal guidance and emerging state laws will likely demand greater specificity and documented evidence to support environmental and health-related representations.

Failure to implement rigorous substantiation protocols may prompt regulatory investigations and parallel class action litigation. Transparency is poised to become a defining compliance priority.

Auto-Renewal Laws

An increasing number of laws regulating automatically renewing consumer agreements have joined staples such as the TCPA and CIPA.

State-level laws: For companies offering automatically renewing services across different states, keeping abreast of state law alterations will be critical. Several states have enacted laws regulating automatically renewing agreements. Features typically include provisions addressing:

• How automatically renewing agreements are presented
• Use of free/discounted trial periods
• Consent mechanisms
• Consumer notices
• Cancellation options/mechanisms

California law, for example, requires presentation of automatic renewal offers “in a clear and conspicuous manner,” before fulfilling an agreement and, in some cases, in visual proximity to the request for consent. If an offer includes a free gift or trial, California requires a clear and conspicuous explanation of the future price change.

While this isn’t an exhaustive recitation, it highlights the complexity of compliance in this area, particularly when numerous state laws are triggered.

Federal laws: In July 2025, the US Court of Appeals for the Eighth Circuit vacated what would have been the federal counterpart to the state laws described above—the FTC’s negative option rule.

While the FTC’s proposed rule may be out of the picture for now, companies should keep in mind several federal laws that remain, including the Restore Online Shoppers’ Confidence Act and the Telemarketing Sales Rule.

Like some state laws, ROSCA requires clear and conspicuous disclosures, consent, and a stop mechanism for certain transactions that include a “negative option feature.” The TSR prohibits, among other things, failing to disclose material terms and conditions of a negative option feature.

Strategies for Success

Companies navigating complex consumer protection laws can position themselves for success by taking a proactive approach and, with the assistance of counsel, reviewing the following for vulnerabilities and improvement:

• Data sources
• Consent mechanisms
• Consumer outreach efforts
• Consumer agreements and notices
• Terms of service/privacy policies
• Websites and technology deployed on the websites
• Product labeling and origin claims
• Influencer marketing programs
• Transparency measures
• Ingredient disclosures

Companies also should consider employing (or updating) arbitration clauses and class action waivers and generally continuing to monitor relevant legal developments touching on their consumer marketing efforts, consumer interactions, and products offered.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Esteban Morales is a member at Mintz who defends litigation and handles compliance issues related to marketing, consumer outreach, allegations of consumer fraud, and privacy.

Arameh Zargham O’Boyle is a member at Mintz who focuses her practice on defending product manufacturers in complex product liability and consumer class action litigation.

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