Class Action Defense

August 21, 2026August 21, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 161: Seventh Circuit Upholds Dismissal Of Biometric Privacy Class Action

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and special counsel Tyler Zmick with their analysis of a dismissal of a proposed Illinois Biometric Information Privacy Act (“BIPA”) class action and its implications for corporate defendants.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jerry Maatman: Thank you, loyal listeners, for being here again for the next episode of our weekly podcast, The Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my colleague, Tyler Zmick. Thanks so much for being on the podcast, Tyler.

Tyler Zmick: Great to be here, Jerry. Thanks for having me.

Jerry: Today, we’ll be discussing an important new decision by the U.S. Court of Appeals for the Seventh Circuit that could have significant and far-reaching implications for biometric privacy litigation under the Illinois Biometric Information Privacy Act. which goes by the acronym BIPA. The case is G.T. v. Samsung Electronics America, Inc.

Tyler: This is really a fascinating decision, Jerry, just because the Seventh Circuit has addressed a question that had been percolating in ports for years now, and that question is, when does a tech company actually “possess”, “collect”, or “obtain” biometric data under BIPA?

Jerry: I think that’s kind of at the heart of most of these cases, certainly at this one, isn’t it?

Tyler: Exactly right. So, the plaintiffs in this case allege that Samsung violated BIPA through a photo gallery application that comes pre-installed on Samsung devices. According to the complaint, Samsung’s gallery app, it automatically scans photos that are stored on the device, it then identifies faces, creates facial geometry templates based on those faces, which are then used to group people into, basically, photo galleries based on who appears in the photos. And so, the plaintiffs argued that these facial templates qualify as biometric data, and that Samsung collected and stored that information without providing the disclosures or obtaining the written consent required by BIPA.

Jerry: At first glance, having defended many of these cases with you over the years, that sounds like a fairly straightforward and traditional BIPA litigation allegation.

Tyler: It does. I think the critical distinction in this case is where the biometric data was actually maintained, and who controlled it. So, the plaintiffs in this case acknowledged that the face templates were stored on users’ personal devices. They nevertheless claim that Samsung exercised control over the templates, because Samsung is the one that designed the software, licensed the operating system, and controlled how the data was processed and stored.

Jerry: I take it in this particular instance, the Seventh Circuit, however, was not persuaded by the plaintiffs.

Tyler: It was not, correct. Judge Lee, writing for the panel, focused heavily on the BIPA’s statutory language. Specifically, the court examined the words “possession”, “collect”, “capture”, and “obtain”, and concluded that each term requires some degree of control over the actual biometric data itself. The court relied on Illinois Supreme Court precedent, including in Cothron v. White Castle, providing that to collect, capture, and obtain biometric data all involves gaining control over the data. According to the Seventh Circuit, simply providing a tool that can generate biometric information is not the same thing as actually controlling that data.

Jerry: That’s a critical and important distinction. The court essentially separates the technology from the data generated from the technology.

Tyler: That’s right, and the opinion repeatedly emphasizes that distinction. The court found that Samsung may have designed the software and manufactured the devices, but the complaint did not plausibly allege that Samsung itself could access, modify, use, or control the facial geometry data stored on customers’ phones. In fact, the court said that the plaintiffs were essentially conflating two separate activities: providing a tool versus using the tool.

Jerry: My sense is that this language from the Seventh Circuit is apt to be quoted in BIPA litigation for years to come. One thing I found critically important, and certainly interesting, was the Seventh Circuit’s discussion of the concept of cloud storage.

Tyler: Absolutely. The plaintiffs argued that because Samsung had previously offered cloud backup services through a product called Samsung Cloud, that it was reasonable to infer that facial templates were also being uploaded to Samsung-controlled servers. This was sort of their backup theory. The court rejected that theory, finding that the complaint lacked factual allegations supporting that inference. The judges noted that plaintiffs could not simply speculate that biometric data reached Samsung’s servers because photographs might be backed up to the cloud. That part of the opinion is important because it reinforces federal pleading standards, and it reinforces the idea that plaintiffs need factual allegations showing that biometric data was actually controlled by a defendant.

Jerry: Let’s talk about the broader, overall significance of this ruling. What does it mean for companies that are developing software involving facial recognition, biometric authentication, or artificial intelligence?

Tyler: This is absolutely a significant defense victory. For years, many BIPA lawsuits have focused on the mere existence of biometric functionalities within tech products. Plaintiffs would often argue that if a company created software that analyzes facial geometry, let’s say, then BIPA liability automatically followed. Seventh Circuit rejected that theory in the Samsung decision and instead, the court held that there must be a plausible allegation that a defendant exercised control over the actual biometric data. If the data remains entirely on the user’s personal device, as is the case here, and the company cannot access or use the data, then the company falls beyond BIPA’s statutory reach under those facts.

Jerry: In your view, then, does this ruling create a safe harbor or a potentially important limitation on BIPA exposure?

Tyler: It does. Obviously, plaintiffs’ lawyers are going to try to, be creative in pleading their way around it, but, for device manufacturers, software developers, and tech providers, the opinion does provide a roadmap for reducing risk. Companies that design privacy-protective systems where biometric information stays local on a user’s device have stronger defenses against BIPA claims now. The Seventh Circuit, again, repeatedly stressed Samsung never possessed, accessed, modified, or used the actual biometric data, and those facts played a central role in the outcome here.

Jerry: Well, the plaintiffs’ class action bar is nothing if not innovative. Do you have a sense that this means that BIPA plaintiffs will stop bringing these sorts of cases against technology companies?

Tyler: I don’t think we should expect the cases to stop. What I expect, though, is a shift in litigation strategy. I think that plaintiffs and attorneys will focus much more heavily on whether biometric data is transmitted to company servers, shared with third parties, used for analytics, or otherwise controlled by a company. In other words, I think future cases may turn less on the mere existence of biometric technology, and more on the flow and location of biometric data.

Jerry: That’s an excellent point, and a critical distinction. Another aspect of the opinion that struck me was the Seventh Circuit’s decision of the purpose of the BIPA. The court looked back at the statute’s origins and emphasized that the BIPA was designed to regulate the collection and storage of biometric information by entities that actually possess and use that data.

Tyler: That’s correct, and the court compared Samsung’s situation to the classic BIPA cases, which involved, generally, fingerprint-based timekeeping systems, amusement park entry systems, and payment authentication platforms. In those cases, you have a company that directly gathered biometric information from individuals and maintained that information for operational purposes. According to the Seventh Circuit, Samsung’s alleged conduct was fundamentally different from those facts, because the biometric data remained at all times on the user’s device, so the Seventh Circuit concluded that extending BIPA to those facts would move really beyond statute’s core purpose.

Jerry: Well, thank you, Tyler, for joining us on this week’s episode of the Class Action Weekly Wire and lending your thought leadership and expertise to this area. To me, this decision certainly is one of the more significant ones involving the interpretation of BIPA from the Seventh Circuit in recent years and provides very valuable guidance in terms of the limits of biometric privacy liability for manufacturers and software developers. Well, thank you to our listeners for tuning in, and we’ll continue tracking the latest developments in biometric class action privacy litigation and workplace laws.

Tyler: Thanks, Jerry. Thank you, listeners. It was a pleasure to be here.

August 20, 2026August 20, 2026 by Gerald L. Maatman, Jr.

Eighth Circuit Affirms Landmark Billion Dollar Class Action Settlement In Real Estate Broker Commission Antitrust Litigation

By Gerald L. Maatman, Jr., Mike Rosenblatt, and Brett Bohan

Duane Morris Takeaways: On August 19, 2026, in Burnett v. National Association of Realtors, Nos. 24-3444, 24-3450, 24-3451, 24-3527, 24-3585, 24-3619, 24-3621 (8th Cir. Aug. 19, 2026), the U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s final approval of a nationwide class action settlement resolving antitrust claims alleging that the National Association of Realtors (the “NAR”) and several major real estate brokerage franchisors conspired to inflate buyer-broker commissions. The settlement exceeds $1 billion in total value, eliminates the longstanding rule requiring sellers to offer compensation to buyer brokers through multiple listing services, and survived challenges from seven separate groups of objectors and intervenors.

Case Background

Starting in 1996, NAR’s Cooperative Compensation Rule required home sellers listed on an NAR-affiliated Multiple Listing Service (“MLS”) to offer the buyer’s broker a commission. Id. at 9. In practice, this rule meant “sellers paid a combined commission of roughly 5-6% of the sale price, split roughly evenly between the seller’s broker and the buyer’s broker” even though the buyer’s broker represented the buyer. Id. Because of the supremacy of NAR-affiliated MLSs in the national residential market, the rule applied nationwide. Id.

In April 2019, Rhonda Burnett filed a class action in the Western District of Missouri on behalf of a group of Missouri home sellers against NAR and four brokerage franchisors—HomeServices of America, Anywhere Real Estate, RE/MAX, and Keller Williams. Id. She alleged that the defendants had conspired to fix prices in violation of Section 1 of the Sherman Antitrust Act. Id. After trial in October 2023, a jury awarded $1.785 billion in damages subject to trebling. Id. at 10. While post-trial motions were pending, the parties in this case and in several related nationwide actions reached a global settlement. Id. NAR agreed to pay the settlement fund $418 million, HomeServices agreed to pay $250 million, and additional opt-in brokerages brought the total fund above $1 billion. Id. at 11. NAR also agreed to eliminate the Cooperative Compensation Rule and implement changes restructuring buyer-broker compensation. Id.

The district court entered an 88-page final approval order certifying a nationwide settlement class and approving the settlement under Rule 23. Id. at 13. Seven groups of objectors and intervenors appealed the settlement. Id. at 13 n.3.

The Eighth’s Opinion

The Eighth Circuit upheld the district court’s approval of the settlement and rejected the objectors’ and intervenors’ challenges.

Standing. The Eighth Circuit rejected the argument that plaintiffs lacked Article III standing for injunctive relief, finding an ongoing injury because “home prices remain inflated absent” the settlement’s practice changes. Id. at 17.

Rule 23(e)(2) Fairness Factors. The Eighth Circuit clarified that Rule 23(e)(2), as amended in 2018, provides the authoritative factors for evaluating class-action settlements. Id. at 21. However, the district court did not err by considering additional factors, even if it was not required to do so. Id.

Overbroad Release Challenge. Objectors/Intervenors contended the settlement impermissibly extended to New York claims involving the Real Estate Board of New York’s (“REBNY”) independently operated rules. Id. at 22. The Eighth Circuit held that both the NAR and REBNY claims hinged on the same operative factual predicate—that industry rules were used to keep brokerage fees artificially high at the expense of home buyers and sellers. Id. at 23. Because the released claims shared a “common nucleus of operative fact” with the litigated claims, the breadth of the release was permissible. Id.

Adequacy of Representation. The Eighth Circuit rejected the argument that class counsel had provided inadequate representation. Id. at 26. It held that the district court did not err in finding class counsel was qualified, had pursued the case aggressively through trial, and negotiated at arm’s length with the defendants. Id.

Attorneys’ Fees. The Eighth Circuit upheld a $333 million attorneys’ fees award—one-third of the fund—as consistent with Eighth Circuit precedent under the percentage-of-the-benefit approach. Id. at 30-31.

Distribution Method.The Eighth Circuit held that the parties did not need to establish a detailed distribution plan prior to final settlement approval. Id. at 32. A notice that “outlines the settled and released claims and states the total settlement amounts” is sufficient. Id.

Fairness Hearing Procedure. Objectors/Intervenors also challenged the district court’s requirement that all objectors appear in person at the fairness hearing. Id. The Eighth Circuit found due process was satisfied where counsel for non-appearing objectors was able to argue at the hearing, and the district court addressed the objections on the merits. Id.

Adoption of Proposed Order. The Eighth Circuit rejected the argument that the district court’s adoption of the plaintiffs’ proposed settlement order warranted heightened scrutiny, reaffirming that “even when the trial judge adopts proposed findings verbatim, the findings are those of the court and may be reversed only if clearly erroneous.” Id. at 33 (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 572 (1985)).

Timeliness of Intervention. The Eighth Circuit affirmed the denial of a group of objectors’ intervention motion because (1) “the litigation had proceeded for five years” before they filed the motion, (2) the intervenors knew about the case, (3) they offered no explanation for the delay, and (4) reopening the settlement would prejudice the parties. Id. at 34-35.

Implications For Companies

The Eighth Circuit’s decision carries broad significance. First, the sheer magnitude of the settlement, more than $1 billion in total, highlights the extraordinary financial exposure that antitrust price-fixing claims can generate. Under the Sherman Act, depending on the claims and damages alleged, successful plaintiffs may be entitled to treble damages, meaning that even a single adverse jury verdict can spiral into catastrophic liability. Businesses that participate in industry-wide arrangements touching price, commissions, or fee structures should ensure that any agreements or coordinated practices involving competitors are reviewed by experienced antitrust counsel before implementation.

Second, it reinforces that federal courts retain wide latitude to approve nationwide settlements releasing claims beyond the originally certified class’s geographic scope, provided the claims share a common factual predicate. Companies facing multi-state litigation should recognize that a settlement in one jurisdiction may resolve related claims elsewhere.

Third, the opinion provides the Eighth Circuit’s first definitive guidance on the 2018 Rule 23(e)(2) amendments, making clear that Rule 23 supplies the mandatory factors while circuit-specific tests may supplement but not supplant them.

Finally, the decision reinforces the high deference appellate courts afford district courts evaluating complex settlements following contested litigation and trial.

August 20, 2026August 20, 2026 by Gerald L. Maatman, Jr.

Waive Goodbye To Arbitration: Seventh Circuit Holds That Pre-Certification Conduct Can Establish Waiver Of Arbitration Rights In A Putative Class Action

By Gerald L. Maatman, Jr., Jennifer A. Riley, Ryan T. Garippo, and Brett A. Bohan

Duane Morris Takeaways: On August 18, 2026, in Moore, et al. v. Club Exploria, LLC, No. 25-2721, 2026 WL 2409841 (7th Cir. Aug. 18, 2026), Chief Judge Michael Brennan of the U.S. Court of Appeals for the Seventh Circuit affirmed the denial of a defendant’s motion to compel arbitration in a class action brought under the Telephone Consumer Protection Act (“TCPA”). The Seventh Circuit held that a defendant’s conduct, even prior to class certification, may support an inference that it waived its right to compel arbitration of putative class member’s claims. This ruling is significant for companies asserting an arbitration defense in a pending class action as preserving the right to compel arbitration can result in significant procedural complications.

Case Background

Club Exploria, LLC (“Exploria”) owns and manages vacation properties. To promote one of its properties, Exploria contracted with third-party vendors to run a telemarketing campaign. These vendors purchased the phone numbers of individuals who had agreed to receive sales calls which had been generated through various websites. Exploria used that list to call tens of thousands of potential customers using a prerecorded voice, including Plaintiff George Moore (“Plaintiff” or “Moore”).

In April 2019, Moore sued Exploria under § 227(b)(3) of the TCPA and claimed that he received these prerecorded calls without his consent. Over the next four years, Exploria filed pleadings with affirmative defenses, engaged in class-wide discovery, filed motions on the merits, and opposed class certification. After the class was certified, however, Exploria filed more motions, including a request to reopen discovery and to amend its answer to add additional affirmative defenses. In its third amended answer, Exploria stated that it sought to add an affirmative defense based on arbitration agreements with the class members. The district court denied this request and explained that the defense “was clearly waived by not bringing it up before now.” Id.

Thereafter, class notice was issued and Moore moved for summary judgment. But two months after briefing finished on Moore’s summary judgment motion, Exploria moved to compel arbitration and stated that 1,026 of the 66,682 class members had entered into mandatory individual arbitration agreements with the company. Exploria also explained that up to 70% of the class may be subject to similar agreements. The district court “ruled that Exploria had waived [the] arbitration defense” and “also granted summary judgment to Moore.” Id. at *2. Exploria appealed to the U.S. Court of Appeals for the Seventh Circuit.

The Seventh Circuit’s Ruling

On appeal, Chief Judge Brennan, writing for the Seventh Circuit, addressed three issues: (1) the appellate standard of review for orders denying motions to compel arbitration; (2) whether a court may consider a defendant’s pre-certification conduct in evaluating waiver; and (3) whether the district court clearly erred in finding waiver on the facts of this case.

First, the Seventh Circuit took the opportunity to clarify the standard of review for such cases as the case law was “in shambles” and highly conflicting. Id. at *3 (quoting Al-Nahhas v. 777 Partners LLC, 129 F. 4th 418, 430 (7th Cir. 2025) (Easterbrook, J., concurring)). To resolve the conflict, the Seventh Circuit turned to the U.S. Supreme Court case of U.S. Bank National Association v. Village at Lakeridge, LLC, 583 U.S. 387, 395-96 (2018) which explains that “[m]ixed questions [of law and fact] are not all alike.” Under that standard, where a district court is required to “expound on the law” the standard of review is de novo, but if the “decision does not announce a new legal rule, waiver decisions should be reviewed for clear error.” Moore, 2026 WL 2409841, at *4 (quotations omitted). The Seventh Circuit thus “overrule[d] the caselaw that does not follow [this] guidance,” particularly as to the case law that indicated that there is a per se rule that de novo review is the standard, but “only as to the applicable standard of review and to the extent [the cases] are inconsistent with this opinion.” Id.

Second, the Seventh Circuit considered whether a defendant’s pre-certification conduct could support an inference of waiver. “Waiver is the ‘intentional relinquishment or abandonment of a known right.’” Id. at *5 (quoting Morgan v. Sundance, Inc., 596 U.S. 411, 417 (2022)). The Seventh Circuit held that – although the issue was not free from dispute – that “a defendant’s pleadings, conduct during class-related discovery, and arguments in opposition to class certification are relevant to the waiver decision.” Id. at *6. “Arbitration agreements with putative class members should be produced during class-related discovery and in opposition to class certification. The number and variety of such agreements impact the district court’s Rule 23 analysis.” Id. “[I]f a diligent defendant intends to compel arbitration after class certification, it cannot do so promptly if those agreements have not been produced. Asking to reopen discovery shows a lack of diligence.” Id. Thus, the Seventh Circuit concluded that such conduct is relevant to the waiver inquiry.

Third, on the specific facts of this case and because the “legal principle [was] settled,” the Seventh Circuit reviewed the “waiver decision . . . for clear error.” Id. at *7. Here, the parties engaged in two years of class-related discovery and developed no evidence of arbitrability. Similarly, when class certification was briefed, the opposition made “no mention of arbitration.” Id. Thus, it was immaterial that “as much as 70% of the putative class [may] be subject to such agreements.” Id. “If Exploria intended to move to compel arbitration, it should have raised the issue of arbitrability in opposing class certification under Federal Rule of Civil Procedure 23” and could not do so without first developing the defense in discovery. Id.

The Seventh Circuit, therefore, affirmed the district court’s denial of Exploria’s motion to compel arbitration.

Implications For Companies

The Moore decision is quite significant for companies and their arbitration programs.

It is very common for companies to have an arbitration agreement with some members of a putative class and not others. When sued in a class action, there is often a temptation to hold such agreements back until after class certification in order to forgo the burden of collecting them until absolutely necessary. But the Moore decision instructs that this path forward is rife with peril and may result in a company losing the right to compel arbitration even when 70% of the class agreed to the provision.

From a legal perspective, the Seventh Circuit’s clarification of the standard of review, and the overruling of cases that call for a per se rule of de novo review, will also make it harder for defendants to overturn unfavorable waiver findings on appeal. When a waiver decision is ultimately reviewed for clear error, the burden to overturn an unfavorable decision will be exceedingly high at the appellate court level. Thus, the stakes at the district court level just got even higher for companies with federal cases pending in Illinois, Indiana, and Wisconsin, because the district court decision is likely to be the one that sticks in the long run.

As a result, corporate counsel should work with their outside counsel to audit their organizations’ arbitration agreements to ensure they are identified and ready to be used at the earliest stages of any pending class action.

August 17, 2026August 17, 2026 by Class Action Defense

Class Counsel… and Class Representative? New Jersey Federal Court Requires Attorney-Plaintiff To Pick One

By Gerald L. Maatman, Jr., Mike Rosenblatt, and Ryan Garippo

Duane Morris Takeaways: On August 10, 2026, in Kalman v. Sevigny, et al., No. 26-CV-00619 (D.N.J. Aug. 10, 2026), Judge Christine P. O’Hearn ruled that Attorney Matthew Kalman could not serve simultaneously as class representative and counsel prosecuting the case on behalf of the class. The decision serves as a helpful reminder for any company facing a class action to review opposing counsel and class representatives for conflicts of interest.

Conflicts of interest can be an early death knell for a class action suit, allowing companies to dispose of class actions without even addressing the case’s merits.

Case Background

As both class representative and class counsel, Matthew Kalnan brought suit against a myriad of financial services companies and their executives, alleging that he was defrauded in a systematic scheme to solicit investments from retirees and conservative investors. According to Kalnan, the scheme started in 2015 when he hired Aaron Sevigny of Acadia to invest his retirement funds. Kalnan claims that he entrusted Sevigny and Acadia to invest conservatively on his behalf.

But according to Kalnan, the investments recommended by Acadia were anything but risk averse. He claimed instead that his funds were invested in, for example (1) a private placement later charged by the SEC as a “Ponzi-like scheme”; (2) a conservation easement, which served as “abusive tax shelters”; and (3) a collateral debt obligation vehicle with “limited repurchases, … suspended offerings, and illiquidity risks.” Kalnan further alleged that Sevigny and Acadia failed to provide accountings or disclose risks of the investments, and as losses mounted in November 2024, Sevigny and Acadia stopped communicating with Kalnan altogether. Kalnan estimates he lost around $2 million in the scheme.

Kalnan brought the suit as a class action, however, rather than as a claim solely for his own damages. Kalnan’s class definition included “[a]ll persons who invested funds with or through Defendants in unsuitable alternative investments.”

Kalnan filed his complaint on January 20, 2026, and filed a First Amended Complaint on March 9, 2026. In both complaints, he served as both class counsel and class representative. Kalnan brought claims for racketeering, violations of federal security law, violations of New Jersey consumer fraud law, fraud, and other common law allegations. Defendants filed a motion to disqualify Kalnan from serving as both counsel and class representative on May 6, 2026.

The District Court’s Ruling

In a 3-page opinion, Judge O’Hearn struck all class allegations in the instant case and conditioned Kalnan’s refiling of class claims “only if alternative counsel enters an appearance and Kalnan withdraws his appearance in its entirety.” Op. at 3 (emphasis in original). The ruling also permits Kalnan to continue litigating the instant case as an individual and representing himself pro se.

Judge O’Hearn based her ruling on the Third Circuit’s holding in Kramer v. Science Control Corp., 534 F.2d 1085 (3d Cir. 1976). Kramer held that where a class action may result in an award of attorneys’ fees, the plaintiff class representative may not also serve as class counsel. The Third Circuit based its decision on “the possible conflict of interest between the class member plaintiff qua plaintiff and the class member qua counsel, under circumstances in which an equitable fund may be created from which an attorneys’ fee may be awarded.” Id. at 1090.

O’Hearn rejected Kalnan’s arguments that the motion to disqualify him as counsel was premature. Kalnan argued that procedurally, disqualification should wait until class certification or discovery began. The decision rejected this argument, stressing that “[n]o discovery could alter those facts or the conclusion that such representation is improper.” Op. at 2.

Implications for Companies

The Kalnan decision serves as a critical reminder to companies and defense counsel to search for and raise potential conflicts of interest between class and counsel as early into litigation as possible. Courts take great care in ensuring that class counsel’s interests in recovering attorneys’ fees does not interfere with representation of absent class members. This care typically arises later in the case when the parties move towards settlement and the court must serve as a steward of the class.

But conflicts of interest can arise at any time, and identifying a conflict of interest between class and counsel can be an efficient way to dispose of a class action in its early stages. Here, defendants were able to effectively dismiss all class claims with a single, 3-page motion, filed just two months after the First Amended Complaint. While Kalnan can continue to litigate his own case, the elimination of class claims substantially reduces defendants’ exposure. Companies should take note of this decision and be on the lookout for similar opportunities in their own class action defenses.

August 14, 2026August 14, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 160: $5.5 Billion Settlement Proposed To Resolve Ovarian Cancer Talcum Powder Claims

Duane Morris Takeaway: This week’s episode features Duane Morris partners Jerry Maatman and Sharon Caffrey with their analysis of a proposed $5.5 billion settlement aimed to resolve thousands of lawsuits alleging Johnson & Johnson’s talc-based products caused ovarian cancer.

Episode Transcript

Jerry Maatman: Thank you for being here again for the next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my partner and colleague, Sharon Caffrey. Thanks so much for being on the podcast today.

Sharon Caffrey: Thank you, Jerry, it’s great to be here.

Jerry: Today, we’ll be discussing Johnson & Johnson’s recent announcement that it has agreed to pay approximately $5.5 billion to settle thousands of lawsuits alleging that its products containing talcum powder caused ovarian cancer. Sharon, I know this story has been unfolding for quite a while. What exactly happened here?

Sharon: Yeah, this is certainly one of the most significant settlements we’ve seen in the mass tort arena. Johnson & Johnson announced that it has reached a proposed agreement to resolve the claims against it brought by roughly 70,000 plaintiffs in federal talc multi-district litigation, which is pending in New Jersey, along with some related state court proceedings. Under the agreement, the company has agreed to commit at least $5.5 billion to compensate claimants. Importantly, though, the settlement is conditioned on participation by at least 95% of those plaintiffs. So, while it’s a major breakthrough, there are still some procedural hurdles before the settlement becomes final.

Jerry: One aspect of the settlement that stood out to me is that Johnson & Johnson maintains that its talc products are safe and do not cause cancer. So, this isn’t a situation where a company is admitting any liability.

Sharon: That’s exactly correct. Throughout the litigation, Johnson & Johnson has been consistent in arguing that its talc products do not contain asbestos and do not cause ovarian cancer. The company’s been unwavering on that position and in announcing the settlement, Johnson & Johnson characterized the agreement as a practical business decision rather than a concession on the merits. The company emphasized that it remains confident in the science supporting its products and believes it would have continued to prevail if these cases continued to move forward.

Jerry: That confidence also seems to be reinforced by some recent developments in the litigation itself.

Sharon: That’s correct, and in fact, the timing of the settlement is especially interesting, because it comes on the heels of a significant ruling in the multi-district litigation. Just last week, the federal court overseeing the MDL ordered the plaintiffs to demonstrate that they could produce admissible expert testimony linking talc to ovarian cancer. Without that evidence, the plaintiffs faced the possibility that their remaining claims would be dismissed. And that ruling followed the withdrawal of two key causation experts for the plaintiffs in Bellwether cases. Johnson & Johnson argued that those developments highlighted the fundamental problems for plaintiffs, proving that talc exposure caused a specific individual’s ovarian cancer.

Jerry: Certainly, when you talk about settlement of major litigation leverages everything, and it seems to me that the legal landscape might have been shifting in favor of Johnson & Johnson and against the plaintiffs here.

Sharon: Yeah, based on the specific causation issues that the plaintiffs were facing, that is accurate. Company representatives were pointing to those expert challenges at this time once the courts engaged in some more scrutiny of those experts. They essentially argued that plaintiffs were increasingly facing an uphill battle to establish specific causation, which is one of the most difficult things in product liability litigation.

Jerry: Well, $5.5 billion is what it is, and so the plaintiffs also claim victory here.

Sharon: Oh, of course they did. Plaintiffs’ leadership described the settlement as a landmark achievement and characterized it as long-delayed justice for women and families who have been waiting years for compensation. One of the more compelling points made by plaintiffs’ counsel was that the litigation is stretched on for more than a decade. During that time, many claimants have faced serious health issues, and some, unfortunately, have passed away before seeing a resolution of their claims. From that perspective, plaintiffs view this settlement as delivering certainty and compensation after years of legal battles.

Jerry: In terms of mass tort resolutions and class action litigation, an interesting feature, if not an unusual feature, that stood out to me was the fact that the settlement is uncapped. Could you explain to our listeners and viewers what that means?

Sharon: Sure. Usually, when there is a settlement of a mass tort, there is a fund, a specific fund, that is created for eligible claimants. And, it’s a fixed amount that must be divided amongst those claimants, so claimants step forward and their cases are weighed, usually on a tiered system. In this instance, plaintiffs’ counsel is very bullish on the fact that Johnson & Johnson is not capping this at $5.5 billion. It will depend on the levels of participation and the qualifying claims. In addition, the settlement applies only to current plaintiffs and does not resolve claims that may potentially arise in the future.

Jerry: Well, maybe the price of a settlement is making everybody equally unhappy or happy, but if you look at the recent trial results, it’s easy to see why both sides of the V in this case concluded that settlement was preferable to continued litigation.

Sharon: Right, the most recent case was tried in June, and that was in Los Angeles, and there was verdict was rendered in favor of Johnson & Johnson after a six-week trial of an ovarian cancer bellwether case. And then earlier this year, an Oklahoma jury also sided with the company in a mesothelioma case involving alleged asbestos-containing talc products. At the same time, the plaintiffs have secured notable victories as well, including a $65.5 million verdict that was recently upheld in a case involving a woman who alleged that Johnson & Johnson’s talc products caused her exposure to asbestos and contributed to her cancer. And also another prior Los Angeles plaintiff obtained a $40 million verdict in a bellwether trial. So, the mixed outcomes really create uncertainty for both sides, and trials are expensive, appeals take very long time, sometimes years, and neither party can fully predict how the juries are going to respond, particularly with the complex science.

Jerry: Sharon, from a broader perspective, what do you think this settlement tells us about, the mass tort space going forward into the later half of 2026?

Sharon: Well, there should be a whole lot less tort cases, but, first, I think mostly expert testimony remains the centerpiece for modern mass tort litigation. Regardless of the size of the case, the ability to establish reliable scientific causation often determine whether claims survive Daubert or Frye challenges. And second, the settlement pressure increases dramatically when courts begin to scrutinize expert evidence. The MDL court’s recent rulings appear to have created a pivotal inflection point in these proceedings, particularly for the plaintiffs who faced not having specific causation experts. And then, finally, after years of litigation and multiple trial victories for both sides, global resolution is probably the most attractive option because of the uncertainty in what the outcomes would be.

Jerry: Final question for you, do you think this is the end of the talc litigation story?

Sharon: It’s the end of a major chapter of the talc litigation story. Settlement still requires substantial participation by all the plaintiffs and there may be implementation issues as the claims proceed. Also, remember that this is only for the existing claimants, and there could be future claimants. And then I think If the participation threshold is met, this is going to be one of the most consequential resolutions in mass tort history and could bring some closure to a significant portion of the ovarian talc litigation involving cosmetic talc.

Jerry: Sharon, thanks so much for joining us on this week’s edition of the Class Action Weekly Wire. This has been a great discussion, and thank you for your detailed analysis, kind of inside baseball look at the settlement. Thanks to our listeners. We’re glad you were here to tune in to another edition of our weekly podcast series.

Sharon: Thank you, Jerry, for inviting me to speak on this topic.

August 10, 2026August 10, 2026 by Gerald L. Maatman, Jr.

You’ve Got Email: The Ninth Circuit Affirms Denial Of Motion To Compel Arbitration Where Four Email Messages Containing Arbitration Agreement Sent To Employee Went Unopened

By Gerald L. Maatman, Jr., Eden E. Anderson, and Rebecca S. Bjork

Duane Morris Takeaways: On August 5, 2026, a panel of the U.S. Court of Appeals for the Ninth Circuit affirmed a decision denying a motion to compel arbitration brought by an employee on a representative basis under California law against his employer. In Rickes v. Thermo Fisher Scientific, Inc., et al., No. 25-5138 (9th Cir. Aug. 5, 2026), the Ninth Circuit decided that a district court had properly determined that there was insufficient evidence that the plaintiff assented to the arbitration agreement that had been sent to his work email address by his employer four times. The panel decided the evidence showed the plaintiff never opened the emails, supporting his declaration that he was not aware of those emails and never saw them until after he filed suit. The Ninth Circuit then held that the district court correctly decided that the plaintiff’s continued employment after he received the emails could not be construed as consent to arbitrate workplace claims because silence does not constitute assent.

Employers with a workforce in California who are considering rolling out or updating arbitration programs should take note and consider designing and implementing appropriate non-coercive, non-electronic methods of following up with employees who do not open or respond to such emails.

Case Background

Plaintiff Scott Rickes brought a lawsuit in the U.S. District Court for the Southern District of California against his employer, Thermo Fisher Scientific, Inc. (“Thermo Fisher”), alleging he and others similarly situated whom he seeks to represent were unlawfully subjected to age discrimination under California law. Thermo Fisher moved to compel arbitration, relying on emails the company sent to the plaintiff’s work email address that contained a link to an agreement to arbitrate claims such as this. Thermo Fisher relied on evidence it submitted to the district court to demonstrate that it sent that email to the plaintiff four times in 2019. The plaintiff, however, declared that he never saw those emails because he was very busy at work and it was not uncommon for him to have unopened emails. Id. He argued that there was insufficient evidence to demonstrate that he assented to the arbitration agreement and therefore it could not be enforced.

The district court denied Thermo Fisher’s motion to compel arbitration, finding no evidence that an agreement to arbitrate had been reached by the parties under California contract formation principles. Thermo Fisher appealed the district court’s ruling.

The Ninth Circuit’s Decision

On August 5, 2026, a panel of the Ninth Circuit, in an unpublished decision, unanimously affirmed the district court’s decision. The Ninth Circuit agreed no evidence had been submitted to demonstrate that the plaintiff had ever opened any of the emails containing a link to the arbitration agreement. Asa result, there was no evidence that the plaintiff saw the arbitration agreement.

In explaining its rationale, the Ninth Circuit first noted that a contract can only be formed with mutual assent. Under California law, this requires both notice of an agreement and mutual assent to it. Mutual assent is absent when a party has not received notice of the proposed contract.

The Ninth Circuit also concluded that while “outward manifestations” of assent can be objectively inferred by a party’s conduct at times, such is not the case where this plaintiff’s conduct was mere silence in response to the offer to form an agreement to arbitrate claims related to his employment. Id. at 3.

As a result, the Ninth Circuit considered – and rejected – Fisher Scientific’s argument that where a current employee continues to work at his position after having been informed that an arbitration agreement will govern any employment claims going forward, such employee is legally considered to have assented to arbitration by inference. Due to his silence, the Ninth Circuit decided the plaintiff could not have been deemed to have accepted the agreement by failing to opt out within forty-five days.

Finally, the Ninth Circuit dispensed with Fisher Scientific’s argument that continued employment despite unsigned arbitration agreements can constitute assent to arbitration because the cases cited were inapposite. Some applied to situations where a plaintiff was subject to an employment agreement that he agreed to that contained an arbitration clause (which is not the case in this matter) and others applied to cases where an employee signed a receipt saying they received an agreement or an employee handbook containing an arbitration provision (again not at issue in this matter).

Implications For Employers

Employers with a workforce in California should heed this ruling if they are planning on rolling out new or revised arbitration agreements to cover potential employment law claims. Relying solely upon electronic means to implement such a workplace arbitration program is likely insufficient to bind employees. Employers should consider planning for non-electronic follow-up contact methods to reach employees who do not respond to emailed requests to consent to arbitration agreements; implementing tracking methods to identify such employees; and carefully crafting such follow-up communications to neutrally and in a non-coercive manner inform the employees of the need to open the email and respond to it in a timely manner. Doing so could mean the difference between facing expensive and protracted litigation in California state or federal court involving potential additional aggrieved individuals and perhaps defending a single plaintiff arbitration matter at much lower costs.

August 7, 2026August 7, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 159: Eighth Circuit Affirms Jury Verdict For Employer In EEOC Race Harassment Suit

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jennifer Riley and associate Elizabeth Underwood with their analysis of a ruling from the Eighth Circuit affirming a district court’s judgment in favor of an employer following a jury verdict rejecting a hostile work environment claim brought by the EEOC and an intervenor employee.

Episode Transcript

Jennifer Riley: Thank you for being here again for the next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is my colleague, Elizabeth Underwood. Thank you so much for being on the podcast today, Elizabeth.

Elizabeth Underwood: Great to be here, Jen. Thanks for having me.

Jennifer: Today, we’re discussing a significant new decision from the Eighth Circuit involving employer liability for workplace harassment. So, this is an important decision for employers. It reinforces what courts expect of employers when responding to harassment complaints. And just as importantly, it also talks about what an employer must know about a situation before liability can attach. So, let’s start with the basics. Elizabeth, can you tell our listeners what happened in this case?

Elizabeth: Sure. The case is EEOC v. Sun Chemical Corporation, decided by the Eighth Circuit on August 4, 2026. The EEOC and an employee, Bryan Banks, brought a Title VII hostile work environment claim after a coworker directed the N-word at Banks multiple times during a workplace confrontation. Banks immediately reported the incident. Sun Chemical investigated, suspended the coworker for five days without pay, warned that any future misconduct could result in termination, and also issued Banks a written warning for profanity use during the confrontation. The EEOC later sued, arguing that Sun Chemical’s response and its efforts to prevent the harassment in the first place were insufficient. After a jury trial, however, the jury found in favor of the employer, and the EEOC appealed.

Jennifer: And I understand the appeal wasn’t really about whether the incident happened or whether it didn’t happen. Instead, the appeal really focused on the legal instructions given to the jury, right?

Elizabeth: Exactly. The EEOC argued that the jury instructions were too narrow. Specifically, it claimed the instructions focused only on whether Sun Chemical responded appropriately after learning about the harassment, rather than whether the company should have prevented the harassment from occurring. The instructions required the plaintiffs to prove that Sun Chemical knew or should have known about the harassing conduct and failed to take prompt and appropriate corrective action. The EEOC argued that there was another theory of liability, that the employer had failed to prevent the harassment before it happened.

Jennifer: How did the Eighth Circuit respond to those arguments?

Elizabeth: Interestingly, the Eighth Circuit didn’t decide whether the jury instructions were perfect. Instead, it assumed, for the sake of argument, that the EEOC’s theory could apply, and then held that there simply wasn’t enough evidence to support it. The court explained that even under the EEOC’s theory, an employer must have actual or constructive knowledge of ongoing harassment and fail to take remedial action reasonably calculated to stop it. In other words, employers can’t prevent misconduct that they have no reason to anticipate.

Jennifer: That does seem to be the key takeaway. So, what evidence did the EEOC rely on to argue that Sun Chemical should have known?

Elizabeth: The EEOC pointed to one prior incident in which the same employee had allegedly used the N-word toward another Black employee. But the court said that single prior incident was not enough to put the company on notice that the employee was a serial harasser, or that ongoing racial harassment was occurring. The court distinguished situations where employers received repeated complaints or observe a pattern of misconduct. Here, there simply wasn’t enough evidence that management knew, or reasonably should have known, that additional harassment was likely.

Jennifer: The Eighth Circuit also spent some time discussing the employer’s disciplinary response, if I recall, correct?

Elizabeth: It did. The EEOC argued that the company should have taken stronger action after the earlier incident. The Eighth Circuit acknowledged that Sun Chemical’s response could have been stronger but emphasized that Title VII doesn’t require employers to terminate an employee after a first offense in order to demonstrate an adequate remedial response. The court noted that the employee had more than 30 years of service without a prior history of harassment, and that the company documented its discipline and warned that future misconduct could lead to termination. So, the court looked at the totality of the circumstances, rather than applying a one-size-fits-all approach.

Jennifer: There was also an argument about alleged unreported uses of a similar slur in workplace conversations if I recall. How did the court handle that?

Elizabeth: So, the Eighth Circuit rejected that argument, because there wasn’t enough evidence that those alleged comments had ever been reported to management, without reports or facts suggesting management reasonably should have known; the court found there wasn’t enough to establish constructive knowledge. That’s an important point, because constructive knowledge isn’t based on speculation. There has to be enough information that a reasonable employer would recognize a probability that harassment is occurring.

Jennifer: What a great decision. So, let’s talk about what employers should take away from the ruling.

Elizabeth: Well, there are several practical lessons. First, employers should continue to maintain clear anti-harassment policies and multiple reporting avenues. Those reporting mechanisms are critical because an employer generally cannot address contracts it doesn’t know about.

Second, every complaint should be investigated promptly and documented carefully. Courts continue to examine not only whether employers responded, but whether the response was reasonably calculated to stop future misconduct.

Third, progressive discipline remains important. While immediate termination may be appropriate in some situations, this decision reinforces that Title VII does not automatically require firing an employee after a first incident. Courts will consider the severity of the conduct, the employee’s disciplinary history, prior complaints, and the employer’s overall response.

Fourth and finally, documentation matters. Employers should carefully document complaints, investigations, disciplinary decisions, and the reasons supporting those decisions. That record often becomes critical years later during litigation.

Jennifer: Thanks so much, Elizabeth, for that great overview. I feel like this decision is really an important reminder that Title VII requires employers to take workplace harassment seriously, but it also, at the same time, recognizes the practical limitations on employer liability. The Eighth Circuit made clear here that employers are expected to respond promptly and effectively to known harassment, but they’re also not liable for failing to prevent misconduct that they really had no actual or constructive reason to anticipate. For employers, I think that means the best defense continues to be strong policies, effective reporting procedures, prompt investigations, appropriate corrective action, and thorough documentation.

Elizabeth, again, thank you so much for walking us through this important decision, and thank you to our listeners. We are glad you tuned in to another edition of the Class Action Weekly Wire.

Elizabeth: Thanks, Jen, and thank you, listeners. It was a pleasure to be here.

August 6, 2026August 6, 2026 by Gerald L. Maatman, Jr.

Eighth Circuit Affirms Jury Verdict For Employer In Racial Harassment Case, Finding Insufficient Evidence Of Failure To Prevent Discrimination

By Gerald L. Maatman, Jr., Tiffany Alberty, and Brett Bohan

Duane Morris Takeaways: On August 4, 2026, in Equal Employment Opportunity Commission v. Sun Chemical Corporation, No. 25-1318 (8th Cir. Aug. 4, 2026), the U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s judgment in favor of an employer following a jury verdict rejecting a hostile work environment claim brought by the EEOC and an intervenor employee. The Eighth Circuit held that even assuming the jury instructions failed to adequately cover the EEOC’s theory that the employer could have prevented the harassment, the evidence in the record did not support such a theory. The opinion illustrates the importance of employers taking prompt corrective action in response to workplace harassment and reinforces the principle that an employer cannot be held liable for failing to prevent harassment when it lacked actual or constructive knowledge of ongoing discriminatory conduct.

Case Background

Bryan Banks and Ricardo Nevarez were both technicians at Sun Chemical Corporation, a manufacturer of inks, colorants, and coatings. Id. at 1. Their relationship deteriorated over time, culminating in a confrontation in which Nevarez punched a locker while standing near Banks and screamed that Banks was a “f***ing [N-word]” three times. Id. Banks reported the incident to a manager. Id. Sun Chemical suspended Nevarez for five days without pay and warned him that future incidents would lead to further discipline, up to and including termination. Id. at 1-2. Banks received a written warning for his profanity during the exchange. Id. at 2.

Banks subsequently filed a charge of race discrimination with the EEOC. Id. After conciliation efforts failed, the EEOC sued Sun Chemical in the U.S. District Court for the Western District of Missouri, alleging violations of Title VII of the Civil Rights Act of 1964. Id. Banks intervened. Id. Together, the EEOC and Banks argued that Sun Chemical’s response to Nevarez using the N-word was insufficient.

The Plaintiffs’ hostile work environment claim proceeded to a jury trial. Id. at 3. The jury returned a verdict in favor of Sun Chemical, concluding that the company did not discriminate against Banks. Id.

The Eighth Circuit’s Opinion

On appeal, the EEOC argued the jury received flawed jury instructions that did not cover its theory that Sun Chemical could have prevented the harassment. Id. The instructions indicated that plaintiff needed to prove that the company “knew or should have known of the harassing conduct” and “failed to take prompt and appropriate corrective action to end the harassment.” Id. The EEOC contended that the instructions addressed only whether Sun Chemical adequately responded to the harassment rather than whether the company had failed to prevent the harassment. Id. at 3-4.

The Eighth Circuit declined to decide whether the instructions adequately reflected the EEOC’s failure-to-prevent-harassment theory, holding instead that the evidence in the record did not support such a theory. Id. at 4. It explained that, even under the EEOC’s theory, Sun Chemical had to (1) have actual or constructive knowledge of “ongoing” harassment by Nevarez, and (2) decline to take “remedial action reasonably calculated to stop it.” Id.

As to the first element, the Eighth Circuit found that, at most, Sun Chemical may have known that Nevarez had used the N-word on one previous occasion toward a different Black employee. Id. Nothing about that incident would have placed the company on notice that Nevarez was a “known serial harasser.” Id. The Eighth Circuit distinguished cases where employers knew of continued harassment from a single isolated incident, noting that “a single harassing act might not be actionable standing alone.” Id. citing Engel v. Rapid City Sch. Dist., 506 F.3d 1118, 1124 (8th Cir. 2007).

Regarding the second element, shortly after the first incident, Sun Chemical sent a written disciplinary action to Nevarez directing him to “take a step back and begin to think about what you are about to say and the consequences that may follow.” Id. Although the Eighth Circuit acknowledged the response “could have been stronger,” it concluded that the discipline “reflected Nevarez’s more than three decades of service without a history of harassment,” and the law does not require an employer “to fire a harasser in the first instance to demonstrate an adequate remedial response.” Id. at 4-5.

The Eighth Circuit also rejected the EEOC’s unsupported argument that Nevarez used the N-word in occasional workplace conversations, finding that no one reported that conduct to Sun Chemical and there was not “enough information to raise a probability of harassment in the mind of a reasonable employer.” Id. at 5. It concluded that the occasional uses of the slur were not “so severe and pervasive that management reasonably should have known of them.” Id.

Implications For Employers

The Eighth Circuit’s decision in Sun Chemical provides several important takeaways for employers. First, the decision reinforces that an employer’s duty to prevent workplace harassment is triggered only when it has actual or constructive knowledge of discriminatory conduct. A single isolated incident, without more, does not place an employer on notice that an employee is a serial harasser requiring heightened preventive measures.

The opinion also confirms that courts will consider the totality of the circumstances, including the employee’s length of service and disciplinary history, when evaluating whether an employer responded appropriately. Employers should, however, document all known incidents and any progressive discipline, making clear that further incidents will result in escalating consequences, and in turn, underscoring the importance of reporting mechanisms. The Eighth Circuit found that the EEOC could not establish constructive knowledge of unreported incidents of alleged harassment. Employers who maintain clear reporting channels and anti-harassment policies may be better positioned to defend against claims that they should have known about discriminatory conduct that was never brought to management’s attention.

July 30, 2026July 30, 2026 by Gerald L. Maatman, Jr.

No Vine to Certify: Grape Packer’s Bid for Class Certification Falls Short of Rule 23’s Requirements

By Gerald L. Maatman, Jr., Jennifer A. Riley, Betty Luu, and Jamar Davis

Duane Morris Takeaway: On July 21, 2026, in Sara Reyes, et al v. Grow Smart Labor, Inc., et al, Case No. 1:24-CV-00028, Magistrate Judge Stanley Boone of the U.S. District Court for the Eastern District of California issued findings and recommendations denying an employee’s motion for class certification under the California Labor Code. This decision is a reminder that courts scrutinizing motions for class certification will conduct a rigorous, fact-intensive analysis of each Rule 23 requirement rather than accept generalized allegations of common policies or practices. Even where numerosity is easily met, courts will closely examine whether the proposed class is sufficiently uniform across workers, supervisors, pay methods, and timekeeping systems before finding that commonality, typicality, and predominance are satisfied.

Background:

On January 5, 2024, Plaintiff Sara Reyes (“Plaintiff”) filed a class action asserting claims for violations of the Migrant and Seasonal Agricultural Worker Protection Act and the California Labor Code on behalf of herself and those similarly situated in the State of California. Id. at 6.

Defendant Grow Smart Labor, Inc. (“Grow Smart”) employed Plaintiff as a grape picker and packer in August 2023 for a two-week period. Id. at 3-4. Plaintiff alleges she was paid less than the piece-rate basis, was not separately compensated for rest periods or other nonproductive time, and that Grow Smart supervisors instructed her and other employees not to take meal periods or rest breaks, instead directing them to continue working. Id. at 4-6.

On May 14, 2026, Plaintiff moved to certify a class of all non-exempt agricultural employees employed by any Grow Smart from January 5, 2021 to the present.

The Magistrate Judge’s Findings and Recommendations:

The Magistrate Judge recommended denying Plaintiff’s motion for class certification and addressed each Rule 23(a) prerequisite in turn. As to numerosity, the Magistrate Judge agreed with Plaintiff that her proposed subclasses (ranging from 160 to 1,067 members) comfortably exceeded the roughly 40-member threshold generally required in the Ninth Circuit. Id. at 22-23. On commonality, however, the Magistrate Judge found Plaintiff failed to meet her burden as to both her meal-break and piece-rate claims. Id. at 23. The Magistrate Judge reasoned that Grow Smart’s workforce was too heterogeneous to generate common answers, since employees worked for different third-party contractees, at different locations, under different supervisors, different pay methods, and different timekeeping systems. Id. at 31-32. The Court also rejected Plaintiff’s reliance on the rebuttable presumption of meal-period violations recognized in Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021), explaining that Wage Order No. 14, unlike the wage order at issue in Donohue, exempts agricultural employers from recording meal periods when operations cease, so the absence of recorded breaks did not, on its own, establish noncompliance on a class-wide basis. Id. at 23-32.

On typicality, the Magistrate Judge found Plaintiff’s claims were not typical of the class she sought to represent. Id. at 33. Plaintiff worked only eight shifts, all for a single contractee, all on a piece-rate basis, and had no experience with the different contractees, supervisors, pay methods, or timekeeping systems used elsewhere in Grow Smart’s operations. Id. at 33-35. The Magistrate Judge also found Plaintiff could not represent employees who, beginning in March 2024, became subject to a mandatory arbitration agreement that Plaintiff herself never signed. Id. at 33-38. Because Plaintiff was not typical, the Magistrate Judge likewise found her inadequate to represent the class generally and, specifically, inadequate as to the arbitration-agreement subgroup. Id. at 38.

Turning to Rule 23(b), the Magistrate Judge found Plaintiff met neither subsection she invoked. Id. at 39. Under Rule 23(b)(2), the Magistrate Judge held that class treatment was inappropriate because Plaintiff sought individualized monetary damages (not solely injunctive or declaratory relief), which Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360-361 (2011),forecloses under that subsection, and because the arbitration agreements and varying work conditions meant no single injunction could resolve the claims class-wide. Id. at 39-40. Under Rule 23(b)(3), the Magistrate Judge found predominance lacking for the same reasons commonality failed, and further found Plaintiff had not shown superiority, since resolving the claims would require individualized inquiries into each employee’s assignment, contractee, timekeeping format, and pay method. Id. at 41-43. Having found Plaintiff met only numerosity while failing commonality, typicality, and both invoked Rule 23(b) categories, the Magistrate Judge recommended that the motion for class certification be denied in full. Id. at 43.

It should be noted that the Magistrate Judge’s findings and recommendations remain subject to adoption by the District Judge. Under the Eastern District of California’s Local Rule 304 and 28 U.S.C. § 636(b)(1)(B) and (C), the parties have fourteen days from service to file objections, and the District Judge will then conduct the applicable review before deciding whether to adopt, modify, or reject the Magistrate Judge’s recommendation.

Implications for Companies

This decision offers useful guidance for agricultural employers and other companies using third-party staffing arrangements across varied worksites.

The decision demonstrates that a named plaintiff’s own work history can substantially narrow the class she is permitted to represent, giving employers grounds to contest an overbroad proposed class even when certain claims otherwise survive. Further, adopting an arbitration agreement even after litigation begins can carve out a meaningful subset of the workforce from any later-certified class, since a plaintiff who never signed such an agreement cannot represent employees who did.

July 30, 2026July 30, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 158: California Federal Court Approves $1.5 Billion Settlement In AI Copyright Class Action

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and senior associate Hayley Ryan with their analysis of the $1.5 billion settlement set to resolve a class action brought by authors alleging artificial intelligence developer Anthropic pirated their work to train its large language model.

Episode Transcript

Jerry Maatman: Thank you, loyal listeners, for being here again for the next episode of our weekly podcast series entitled The Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my colleague, Hayley Ryan. Thanks so much for being here on the podcast today.

Hayley Ryan: Great to be here, Jerry. Thanks for having me.

Jerry: Today, we’re discussing one of the most significant class action settlements ever, a copyright class action settlement that was recently approved for $1.5 billion between Anthropic and a class of authors and copyright holders whose books were allegedly downloaded from online piracy libraries and used in connection with AI training. The court, in its settlement approval order, called it the largest copyright class action settlement in the history of American jurisprudence. Hayley, let’s start with the basics. What was the case about?

Hayley: Yeah, Jerry, so the case was brought by authors and copyright holders against Anthropic. Plaintiffs allege that Anthropic downloaded hundreds of thousands of copyrighted books from the online repositories Library Genesis, or LibGen, and Pirate Library Mirror, often referred to as PiLiMi. The settlement class included copyright owners of books appearing on a specific works list, containing approximately 482,000 works that Anthropic had downloaded from those sources.

Jerry: As I understand it, in the history of the case, the judge, a federal district court judge in the Northern District of California, granted final settlement approval on July 20, 2026.

Hayley: That’s right, Jerry. The court concluded that the settlement satisfied Rule 23’s requirements and was fair, reasonable, and adequate. The court viewed the settlement as providing substantial value to the class. According to the court’s order, the average recovery is expected to be approximately $3,000 per word. The court stated that this amount is roughly four times the statutory minimum damages available for ordinary copyright infringement, and about 15 times the minimum for innocent infringement.

Jerry: As is inevitable in large class action settlements, I understand that some objectors lodged objections to the settlement, claiming that the settlement amount should have been larger, is that right?

Hayley: Yes, they sure did, Jerry. Several objectors pointed out that copyright law allows statutory damages of up to $150,000 per work in certain circumstances. The court concluded that continued litigation carried substantial risks, including the possibility of losing at trial, appellate reversals, delays, and constitutional challenges to a massive statutory damages award.

Jerry: One thing that stood out to me was the participation rate among class action members. I’ve seen settlements where the participation rate is under 3%. What did their data analytics look like in this particular settlement?

Hayley: Yes, Jerry, so here, the participation rate was extraordinarily high. By April of 2026, claims have been submitted for more than 91% of the works on the works list. The court noted that this level of participation was far above what is typically seen in class actions. The settlement administrator received only 350 timely opt-outs, covering just 1,802 works, despite notice reaching hundreds of thousands of potential class numbers. The court also noted that only 54 objectors or comments were filed, and several class members affirmatively supported the settlement.

Jerry: Notice program in a class action settlement is always important, but let’s talk about it in the context of this case, where there were an enormous amount of authors and copyright holders.

Hayley: Yes, Jerry, so the notice program was extensive. The settlement administrator gathered contact information from publishers, authors organizations, copyright records, ISBN databases, commercial sources, and internet searches. Notice was sent to nearly 595,000 potential class members, and the court found that notice reached owners associated with more than 99.5% of the works on the works list. The campaign also included industry publications, newspapers, press coverage, newsletters, as well as social media outreach.

Jerry: The scope of a release in a class action settlement review process is always important. How did it play out in this particular case?

Hayley: Absolutely. So, the settlement only releases claims related to works appearing on the specific works list, and only for certain past conduct. The judge emphasized that class members are not releasing claims concerning future conduct. They’re also not releasing claims based on AI outputs. So, the settlement focused primarily on alleged downloading and copying of works that occurred before August 25, 2025.

Jerry: Class action settlements of this ilk also often involve injunctive, programmatic, or non-monetary relief. How did that play out in the settlement approval process?

Hayley: Yes, Jerry, so Anthropic agreed to destroy the pirated copies of class members’ works that had been downloaded from LibGen and PiLiMi, subject to preservation obligations and other legal requirements. The court viewed that destruction obligation as a significant benefit to the class.

Jerry: And then, inevitably, in all class action settlements, a portion of the amount of the settlement is devoted to attorneys’ fees. I found this opinion on settlement approval particularly interesting insofar as attorneys’ fees approval issues was concerned.

Hayley: Yes, it really is, Jerry. Class counsel initially sought 20% of the settlement fund, which would have been $300 million. They later reduced that request to 12.5%, or $187.5 million. Even after that reduction, the court found the request too high.

Jerry: That’s certainly a significant amount of money to be paid to law firms for prosecuting a class action. Is this because, was the court’s opinion because this is the type of settlement that would fall into the category of what’s called a megafund class action settlement?

Hayley: Exactly, Jerry. The judge concluded that applying a percentage of the fund approach would generate a windfall for class counsel. So, instead, the court used the lodestar method. Class counsel reported approximately $27 million in lodestar fees, and the court applied a multiplier of 3.75. So, that resulted in a fee award of just over $101.5 million, which equates to roughly 6.8% of the settlement fund.

Jerry: Well, an enormous fee, one of the largest of 2026 thus far in any class action settlement, but certainly significantly less than what plaintiffs’ counsel had requested. The named plaintiffs, I assume, also requested service awards?

Hayley: Yes, they did. So, the class representatives asked for $50,000 each. The court found that amount to be excessive, although the representatives devoted substantial time and effort to the litigation, the judge concluded there was no showing of retaliation risk comparable to some employment class actions. So, the court instead awarded $15,000 to each of the three class representatives.

Jerry: Bottom line, Hayley, what are your biggest takeaways for corporate counsel from this decision?

Hayley: So, Jerry, courts remain willing to approve extraordinarily large settlements involving AI-related copyright claims when the settlement provides meaningful and immediate value to the class. However, the fee ruling reinforces that courts will scrutinize attorney’s fees in megafund settlements and may depart significantly from the traditional 25% benchmark.

Jerry: In following, class actions that are filed and settled, I think there’s one more takeaway, maybe, and that’s that this settlement resolves historic claims never before brought involving a defined set of books, but it leaves the door open and invites future litigation involving AI outputs and future conduct in privacy situations. So, it probably won’t be the last major case we see in this particular space.

Well, Hayley, thank you so much for this great discussion and your thought leadership in this area. Thanks for the detailed analysis of this important settlement, and thanks for being here today. Along with our listeners, thank you for joining us for this latest installment of the Class Action Weekly Wire.

Hayley: Thanks, Jerry, and thank you, listeners, it was a pleasure to be here.