Class Action Defense

By Gerald L. Maatman, Jr.

Duane Morris Takeaways: The American Tort Reform Association (“ATRA”) annually publishes its “Judicial Hellholes Report,” focusing on litigation issues and identifying jurisdictions likely to have unfair and biased administration of justice. The ATRA recently published its 2024-2025 Report and one of the top-ranking states from 2023 maintained its #1 position for 2024 – Pennsylvania, specifically the Pennsylvania Supreme Court and the Philadelphia Court of Common Pleas – as the most challenging venue for defendants. Readers can find a copy here and the executive summary here.

The Judicial Hellholes Report is an important read for corporate counsel facing class action litigation because it identifies jurisdictions that are generally unfavorable to defendants. The Report defines a “judicial hellhole” as a jurisdiction where judges in civil cases systematically apply laws and procedures in an unfair and unbalanced manner, generally to the disadvantage of defendants. The Report is a “must read” for anyone litigating class actions and making decisions about venue strategy.

The 2024 Hellholes

In its recently released annual report, the ATRA identified 10 jurisdictions on its 2024 hellholes list – which, in order, include: (1) Pennsylvania (especially in the Philadelphia Court of Common Pleas and the Supreme Court of Pennsylvania); (2) New York City (with unique state laws and lawsuit abuses); (3) South Carolina (particularly due to a bias against corporate defendants in asbestos litigation); (4) George (tied for #1 in 2023, the state has seen nuclear verdicts and endless liabilities for defendants); (5) California (with a huge overall volume of lawsuits, huge verdicts, Private Attorney General Act (PAGA) litigation, lemon law litigation, and high-stakes environmental litigation); (6) Cook County, Illinois (with no-injury claims filed under the state’s Biometric Information Protection Act (BIPA) and being a hotbed for asbestos litigation); (7) St. Louis, Missouri (with focuses on junk science in the courtrooms and nuclear verdicts); (8) the Michigan Supreme Court (particularly due to liability-expanding decisions and pro-plaintiff legislative activity); (9) King County, Washington (a first appearance on the list due to trial courts conducting unfair group trials, allowing junk science into evidence, and swapping to other state laws when favorable to plaintiffs); and (10) Louisiana (with long-running costal litigation and nuclear verdicts against defendants).

According to the ATRA’s analysis, these venues are less than optimal for corporate defendants and often attract plaintiffs’ attorneys, particularly for the filing of class action lawsuits. As a result, corporate counsel should take particular care if they encounter a class action lawsuit filed in one of these venues.

The 2025 “Watch List”

The ATRA also included one jurisdiction on its “watch list” — the Texas Court of Appeals for the Fifth District, which had three noteworthy decisions overturned by the Texas Supreme Court that would have expanded liability to defendants. The ATRA emphasized the need for oversight of this appellate court to ensure that it does not deviate from Texas precedent.  

The 2025 “Dishonorable Mentions”

The ATRA included a few jurisdictions on its “dishonorable mentions” list, for making unsound decisions, engaging in abusive practices, or other actions that “erode the fairness of a state’s civil justice system.” The venues on the list include the Maryland Supreme Court, following a ruling which rejected a higher standard for expert evidence; Tennessee, as a new hotspot for abusive Americans with Disabilities Act Litigation; and Illinois courts where asbestos claims remain prevalent.

Points Of Lights

In addition, the ATRA recognized that several jurisdictions made significant positive improvements this year, highlighting decisions by the Third Circuit, which ruled that lawsuits alleging insufficient warnings on product labels, even with federal approval, cannot proceed; the Kentucky Court of Appeals, which overturned a previous problematic ruling for defendants; and the Utah Supreme Court, which upheld the state’s statute of repose for medical liability lawsuits.

Implications For Employers

The Judicial Hellholes Report often mirrors the experience of companies in high-stakes class actions, as Pennsylvania, New York, South Carolina, Georgia, California, Illinois, Missouri, Michigan, Washington, and Louisiana are among the leading states where plaintiffs’ lawyers file class actions. These jurisdictions are linked by class certification standards that are more plaintiff-friendly and more generous damages recovery possibilities under state laws.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Gregory Tsonis with their discussion of a proposed rule from the U.S. Department of Labor (“DOL”), entitled “Employment of Workers With Disabilities Under Section 14(c) of the Fair Labor Standards Act,” that would put an stop to the issuance of new certificates that allow employers to pay workers with disabilities a subminimum wage.

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

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 Greg Tsonis. Thank you for being on the podcast, Greg.

Greg Tsonis: Welcome, Jen, glad to be here.

Jennifer: So, big news this week from the U.S. Department of Labor. It has announced a major move to end the ability of employers to pay workers with disabilities below the federal minimum wage. This has been in the works for a while, though, right Greg?

Greg: Yes, it’s definitely been a long time coming. So, this rule is aiming to end the use of Section 14(c) of the Fair Labor Standards Act, the FLSA, which has allowed employers to pay workers with disabilities below the federal minimum wage way back since the 1930s, actually. So, this new proposal would stop the issuance of new certificates under that provision and existing employers with those certificates would have up to three years to phase out paying subminimum wages.

Jennifer: Right. I think a lot of people are surprised to see this move happening now, especially since it’s coming at the end of President Biden’s administration. What does the timeline look like for this rule?

Greg: Yeah, good question. So right now, the rule is in the proposed stage. So there’s a comment period that just started and runs through January 17th of next year. We’ll be hearing a lot of feedback from various stakeholders in that time. After that, the next steps will be determined, based on the comments that are received and what they say. But here’s the kicker – since it’s so close to Inauguration Day, it’s likely that the next administration will have a big role in finalizing that rule.

Jennifer: That’s right. And as we saw with some other issues under Biden’s administration, regulations like this can face challenges, especially if they come out toward the end of a presidency. But the push to end this practice has been building for a while, wouldn’t you say?

Greg: Absolutely. So, this is actually one of the farthest steps the federal government has taken to end Section 14(c). Democrats have been trying to get rid of it for years with legislation like Raise the Wage Act and the transformation to Competitive Integrated Employment Act. Both are still pending. But the platform for the Democratic party, both in 2020 and in 2024, has included a commitment to end subminimum wages for people with disabilities, and even some Republicans have backed this idea, especially in the Senate.

Jennifer: That’s true. Speaking of lawmakers, we have seen varying amounts of support. There was a pretty positive reception from some key figures in the Republican side as well as in the Democrat side. For instance, Representative Bobby Scott praised the announcement, calling it a step toward fairness. He made it clear that all workers, regardless of disability, should be treated with dignity and receive at least the minimum wage.

Greg: Exactly. He’s been an advocate for this for a long time, and his comments really emphasize the broader shift toward equality in the workforce. Democratic Senator Patty Murray also weighed in saying that paying workers with disabilities less than the minimum wage is discriminatory, and that this rule is a major step toward better economic outcomes for people with disabilities.

Jennifer: Right. But, as to be expected, there’s also pushback from some lawmakers going the other way. Republican Representative Virginia Foxx, for instance, was pretty vocal against the rule. She called it misguided and irresponsible, saying that the 14(c) program actually protects job opportunities for individuals with disabilities. She even pointed out that in states where the program was phased out, many workers ended up jobless or even isolated.

Greg: Yes, and that’s a real concern for some. Representative Foxx and others argue by eliminating 14(c), you could have unintended consequences. They believe that the program has helped individuals with disabilities gain employment in a way that would be difficult in a competitive market. Some critics are worried that this change could lead to job loss and greater social isolation for those workers who rely on these programs.

Jennifer: Right. It’s definitely a tough issue with strong opinions on both sides. But if the rule does go through, it could be a big shift in the rights and protections for people with disabilities. The government has already taken steps to end subminimum wage for federal contractors, and some states have banned it, too. So, it’s clear that momentum is building to move away from this practice.

Greg: Yeah, it’s been a major point of debate for years, and with the public comments coming in now, we’re likely to see even more perspectives emerge. There are certainly valid concerns about the potential impact on job opportunities. But at the same time, we’ve seen a shift in how workers with disabilities are treated in the broader workforce. Ending subminimum wage could create more opportunities for integration and fair pay.

Jennifer: It will definitely be interesting to see how this plays out with the comment period and potential changes from the next administration. There’s a lot of uncertainty about how quickly this rule will become a reality. But it’s definitely something to watch closely.

Greg: For sure, it’s a defining issue for both the disability rights community and the broader workforce, and whichever way it goes, it will have lasting implications for how workers with disabilities are treated in the job market. The next few months will be crucial in shaping that future.

Jennifer: Thanks, Greg, for breaking this down. It’s certainly going to be a topic that gets a lot of attention over the coming months. We will be sure to keep our listeners updated. Thanks for being here today, Greg, and thank you to everyone in the audience for tuning in.

Greg: Thanks for having me, Jen, and thank you to the listeners.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Duane Morris Takeaway: Happy Holidays to our loyal readers of the Duane Morris Class Action Defense Blog! Our elves are busy at work this holiday season in wrapping up our start-of-the-year kick-off publication – the Duane Morris Class Action Review – 2025. We will go to press in early January and launch the 2025 Review from our blog and our book launch website.

The 2025 Review builds on the success of our previous editions and represents our twentieth annual study of the class action space. At over 600 pages, the 2025 Review has more analysis than ever before, with discussion of over 1,250 class certification rulings from federal and state courts over this past year. The Review will be available for download as an E-Book too.

The Review is a one-of-its-kind publication analyzing class action trends, decisions, and settlements in all areas impacting Corporate America, including the substantive areas of antitrust, appeals, the Class Action Fairness Act, civil rights, consumer fraud, data breach, EEOC-Initiated and government enforcement litigation, employment discrimination, the Employee Retirement Income Security Act of 1974, the Fair Credit Reporting Act, labor, privacy, procedural issues, product liability and mass torts, the Racketeer Influenced and Corrupt Organizations Act, securities fraud, state court class actions, the Telephone Consumer Protection Act, wage & hour class and collective actions, and the Worker Adjustment and Retraining Notification Act. The Review also highlights key rulings on attorneys’ fee awards in class actions, motions granting and denying sanctions in class actions, and the top-class action settlements in each area. Finally, the Review provides insight as to what companies and corporate counsel can expect to see in 2025.

We are humbled and honored by the recent review of the Duane Morris Class Action Review – 2024 by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said, “The Duane Morris Class Action Review is ‘the Bible’ on class action litigation and an essential desk reference for business executives, corporate counsel, and human resources professionals.” EPLiC continued, “The review is a must-have resource for in-depth analysis of class actions in general and workplace litigation in particular. The Duane Morris Class Action Review analyzes class action trends, decisions, and settlements in all areas impacting corporate America and provides insight as to what companies and corporate counsel can expect in terms of filings by the plaintiffs’ class action bar and government enforcement agencies like the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL).”

We look forward to providing the 2025 edition of the Review to all our loyal readers in early January. Stay tuned and Happy Holidays!

By Jennifer A. Riley

Duane Morris Takeaways: Jennifer A. Riley, the Vice-Chair of the Duane Morris Class Action Defense Group recently spoke at 21st National Class Action Conference organized by the Barreau du Québec (Québec Bar Association). As the sole guest presenter from the United States on employment class actions, she spoke on cross-border class action defense strategies.

This week I had the pleasure of speaking at the Colloque national sur l’action collective, the National Class Action Conference in Montreal, Quebec.  

The conference was the 21 National Class Action Conference organized by the Barreau du Québec (Québec Bar Association) and was held on November 27 and 28 at the Palais des congrès de Montréal.

One of the largest international conferences on class actions, the event brought together nearly 60 speakers and moderators from Canada, the United States, and Europe.

The Conference

The organizers compiled a wide range of knowledge and experience on cutting edge class action topics, including recent trends, emerging issues, and the proliferation of industry-wide class actions.

The presenters covered the latest developments in class action trends across Canada, the United States, and Europe.  They discussed trends and legal developments in consumer, privacy, and employment class actions, and reviewed the growth of AI class actions, which have exploded in terms of filings from 2021 (2 filings) to 2024 (32 filings).

I had the pleasure of discussing developments on the employment class action front and providing a sneak peek at 2024 filing, settlement, and certification numbers.  

Class Action Trends

In terms of overall settlement numbers, in 2023, the largest settlements across all substantive areas of class actions in the U.S. totaled more than $51.4 billion.  In 2024, settlements are on track to exceed $37 billion, representing a continued use of the class action mechanism to effective a massive redistribution of wealth.  

Plaintiffs’ success on the certification front is continuing to fuel this trend.  In 2023, plaintiffs certified class actions at high rates by winning 324 out of 451 rulings (72%).  In the employment space, such numbers were equally high, as plaintiffs converted 82% of rulings in the ERISA space, prevailed on 75% of motions for conditional certification of FLSA collective actions, and prevailed on 50% of certification rulings in discrimination class actions.

In 2024, the numbers remain plaintiff-friendly.  So far in 2024, we have logged 363 decisions of U.S. courts on motions for class certification.  Courts have granted 232 of those motions, for a certification rate of 64%.  Although the overall rate might trend down from 2023, the 2024 numbers are showing more consistency across substantive areas.  

In the employment space, plaintiffs’ success on certification motions has surpassed the 2023 numbers.  So far in 2024, plaintiffs have prevailed on 81% of rulings on motions for FLSA conditional certification, 80% of rulings on motions to certify WARN classes, 67% of motions to certify ERISA classes, and 53% of motions to certify discrimination classes.  

Conclusion   

Overall, the conference presented a one-of-a-kind opportunity to share class action experiences and knowledge across jurisdictions.  It provided a unique look at the areas of consistency in terms of the focus of the plaintiffs’ class action bar across jurisdictions and an interesting overview of the deviations the plaintiffs class action bar has implemented as it has molded to the unique contours of the prevailing laws across jurisdictions.

By Gerald L. Maatman, Jr.

Duane Morris Takeaways: The Trial Lawyers of Mass Torts (TLMT) – an organization of plaintiffs’ class action lawyers – hosted their annual educational conference this week in Cabo, Mexico. TLMT invited Gerald L. Maatman, Jr. of Duane Morris, the co-author of the Annual Class Action Review, as one of the sole representatives of the class action defense bar to provide defendant-side perspectives on class action and mass tort litigation.

The TLMT brings together top practitioners on both sides of the bar as well as the judiciary to tackle contemporary issues in complex litigation, focusing on class actions and mass torts. The conference featured numerous prominent federal judges who handle leading MDL proceedings and class actions, including Judge Charles Breyer, Northern District of California, Judge Karen Caldwell, Eastern District of Kentucky, Judge Edward Chen, Northern District of California, Judge Vince Chhabria, Northern District of California, Judge Jacqueline Corley, Northern District of California, Judge James Donato, Northern District of California, Judge Nancy Rosenstengel, Southern District of Illinois, Judge David Proctor, Northern District of Alabama, Judge Richard Seeborg, Northern District of California, Judge Jane Milazzo, Eastern District of Louisiana, and Judge Joy Flowers Conti, Western District of Pennsylvania. In addition, Judges Amul Thapar and Rachel Bloomekatz of the U.S. Court of Appeals for the Sixth Circuit gave presentations.

The opening sessions focused on mass tort claims brought in MDL’s and cutting-edge class actions for data breaches and privacy violations.

I had the honor and privilege of speaking on the class action developments panel that included Judge Beth Freeman and Judge Rita Lin of the U.S. District Court of the Northern District of California and Judge Kenly Kiya Kato of the U.S. District Court for the Central District of California. Our panel addressed a wide variety of cutting-edge class action issues running the gamut from standing to settlements, and experts to arbitration.

Standing Issues

The requirement of a named plaintiff to possess legal standing often rears its head early on in a class action. The stakes can be high and case determinative, and also impact selection of forum considerations (e.g., where a motion to dismiss for lack of standing results in the remand of the class action to state court). The Judges further pointed out that standing can impact case management issues and the scope of discovery, which are important to companies due to the sheer size of class actions and the costs to defend them. Interestingly, the Judges opined that bifurcation of discovery into a class certification stage and a merits stage – while previously popular in the class action space – has largely fallen out of favor as a viable case management tool.

Settlements

Rule 23 requires courts to pass on and approve settlements. The Judges remarked that precertification settlements are more difficult to adjudicate but remain a viable exit ramp for many class actions.

The Judges agreed with my commentary on how the approach to settlement issues – especially for pre-certification settlements – is one of the most widely-varying areas from judge-to-judge and venue-to-venue in terms of judicial decision-making. Like buying real estate, “location, location, and location” means everything in terms of the way settlements are approached from a case law standpoint, which vary in state and federal courts and with respect to the pertinent case law in each location.

Experts & Certification

The Judges agreed that expert testimony is often the most crucial factor in the certification battle. The costs can be immense, but a win or loss on class certification can represent monetary exposure (or a lost opportunity) of substantial economic benefit (or loss). In sum, the stakes are exceedingly high and scrimping on expert fees may be short-sighted.

Arbitration

The Judges had interesting views on the interrelationship of arbitration and class action litigation. While the statistical findings of our Duane Morris Annual Class Action Review – 2024 demonstrate that corporate defendants won motions to compel arbitration (of class action claims on an individual basis) at a rate of 66% over the past year, nearly a third were denied – and often for a multitude of reasons. The Judges agreed on the high-stakes nature of such motions and how case-specific facts drive the extent to which discovery should be allowed on key factual and legal disputes over arbitration agreements. They also observed how mass arbitration has “weaponized” arbitration programs in certain situations where arbitration has virtually replaced Rule 23 as a method for adjudication of large-scale disputes or in situations involving hundreds or thousands of claimants.