Class Action Defense

October 19, 2026October 19, 2026 by Gerald L. Maatman, Jr.

Second Circuit Revives Shelved Grocery Workers’ Waiting Time Suit

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

Duane Morris Takeaways: On October 13, 2026, in Santos v. Lidl US, LLC, No. 25-2357 (2d Cir. Oct. 13, 2026), the Second Circuit vacated a district court’s dismissal of a grocery worker’s time-shaving claims under the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”). The Second Circuit held that waiting time is compensable under the FLSA when an employer requires an employee to report to work at a specific time and be ready to work when there is no work to do for reasons beyond the employee’s control. It also declined to consider fifteen minutes of unpaid time a week as de minimis when argued at the pleading stage. For employers with shift workers, the ruling signals a narrowing of the Portal-to-Portal Act defense and gives plaintiffs’ lawyers a new basis for bringing collective actions in the Second Circuit.

Background

On January 26, 2024, Plaintiff Sandra Santos brought a class and collective action alleging that her employer, Lidl US, LLC (“Lidl”), had engaged in the unlawful practice known as “time-shaving” in violation of the FLSA and NYLL. Plaintiff, a store clerk and stocker at the grocer’s West Babylon, New York location, alleged that Lidl required her and other opening-shift employees to report to work fifteen minutes before the listed start time, though they were not always able to clock in until their shift start time or later, and that as a result they were not paid overtime. Plaintiff sought to represent a collective under the FLSA and a class under the NYLL.

On September 10, 2025, the U.S. District Court for the Eastern District of New York dismissed both claims with prejudice after holding that the Portal-to-Portal Act barred the FLSA claim and that because the NYLL claim was coextensive with it, it was barred, too. Plaintiff appealed, and the Second Circuit vacated and remanded to the District Court.

The Appeals Court’s Decision

Writing for the majority, Judge Beth Robinson cited to U.S. Department of Labor regulation 29 C.F.R. § 790.7(h) interpreting the Portal-to-Portal Act, writing that the regulation distinguished between when an employee voluntarily arrives early and conducts a “preliminary” activity, and when an employee is required to report at a set hour, is ready to work, and has no work to do for reasons beyond their control, where the employee is doing something “integral” to their principal activities. Id. at 1. Under the § 790.7(h), the former is not compensable, but the latter is. Judge Robinson then cited to the U.S. Supreme Court decision in IBP, Inc. v. Alvarez, 546 U.S. 21 (2005), which determined courts were required to apply a separate analysis on compensable work time where workers had been required to report at a specific time to begin donning protective gear prior to starting their shift only to find that no protective gear was available, including evaluating whether the donning was “integral” to the job they were hired to perform. Id. at 12.

In its defense, Lidl argued that Alvarez and § 790.7(h) were abrogated by the U.S. Supreme Court’s decision in Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. 27 (2014), which held that time spent waiting to go through a security line was a noncompensable postliminary activity because it was not a “principal” activity for which the workers were employed. Id. at 14. The Second Circuit declined to read the decision so broadly, writing that Busk did not “address the distinct scenario of a worker engaged to wait.” Id. at 15. Citing to Armour & Co. v. Wantock, 323 U.S. 126 (1944), Judge Robison wrote that an employee may be hired specifically to wait, and Busk did not upend the principle that “[r]eadiness to serve may be hired, quite as much as service itself.” Id. at 16.

Lidl responded that this is limited to workers such as firefighters and limousine drivers, but the Court of Appeals was unconvinced, writing that it found “no such limit in the text of § 790.7(h).” Id.

Finally, the Second Circuit rejected Lidl’s alternative argument that the time workers spent waiting was de minimis, writing that it could not “conclude from our precedents that fifteen minutes of uncompensated work time a week is de minimis.” Id. at 17.

Judge Richard J. Sullivan’s Dissent

In his dissent, Judge Sullivan wrote that the majority’s holding was in conflict with the Portal-to-Portal Act and with the U.S. Supreme Court’s precedent, concluding that the wait time at issue was neither “integral” nor “indispensable” to plaintiff’s work as a grocery store clerk because Lidl could have eliminated it without affecting the principal activities of stocking or customer service. Id. at 23. Judge Sullivan further wrote that § 790.7(h) applies only when waiting is an unusual break from routine, not a routine part of preliminary activities. Id. at 26.

Takeaways for Employers

The Second Circuit’s holding shows the enduring reluctance of the Second Circuit to broaden its reading of the U.S. Supreme Court Busk ruling on non-compensable waiting time, even when it sets new limits the Portal to Portal Act in determining compensable and non-compensable waiting time. Employers scheduling workers to arrive prior to shift start are cautioned that this may trigger a finding that such workers are “engaged to wait,” and should tread cautiously in relying on the Portal-to-Portal Act to preclude litigation or utilizing a de minimis defense argument to limit damages.

October 15, 2026October 15, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 169: Illinois Federal Court Approves $40 Million Settlement In Shareholders’ Bribery Suit

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman, senior associate Karla Mardueño, and associate George Schaller with their analysis of a major settlement approved in the Northern District of Illinois to resolve a shareholder derivative suit stemming from public corruption scandal.

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: Hello, everyone, and thank you for being here again for the next episode of the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and welcome to Karla Mardueño and George Schaller, who are joining me today. Thank you both for being on this week’s podcast.

Karla Mardueño: Glad to be here, Jerry.

George Schaller: Thanks for having me, Jerry.

Jerry: Today, we’re discussing a very significant shareholder derivative settlement that recently received final approval by the court in the Northern District of Illinois. The case is In Re Exelon Corporation Derivative Litigation, where a federal judge approved a $40 million settlement arising out of a public corruption scandal involving Commonwealth Edison.Karla, let’s start with the background. This litigation stems from one of the most high-profile and newsworthy corporate governance controversies to come out of Illinois in recent years. In essence, what happened?

Karla: The derivative litigation arose from the bribery scandal involving Commonwealth Edison, or ComEd, which is a subsidiary of Exelon. In 2020, ComEd entered into a deferred prosecution agreement with federal prosecutors and admitted that it had arranged jobs, contracts, and other benefits for associates of former Illinois House Speaker Michael Madigan. This was allegedly done in an effort to obtain favorable energy legislation. According to the DPA, those practices occurred over a number of years and resulted in significant scrutiny by regulators, prosecutors, shareholders, and the public. Following those revelations, Exelon shareholders sent demand letters and ultimately filed several derivative lawsuits alleging that the company officers and directors breached their fiduciary duties by failing to prevent or properly oversee the conduct that led to the scandal. Those actions were eventually consolidated into a single derivative case.

Jerry: George, at a 100,000-foot level, these sorts of cases, derivative shareholder actions, are somewhat different, both in purpose and function, from securities fraud class actions that we often discuss and write about in the Duane Morris Class Action Review. How should listeners think about this case in terms of the procedural posture of it?

George: In a derivative action, shareholders seek recovery on behalf of the corporation itself, not directly for individual investors. So, the theory here was that Exelon suffered harm because of the alleged misconduct, including reputational damage, regulatory consequences, legal costs, and the fallout from ComEd’s admitted actions. Importantly, Exelon’s board formed a special litigation committee, commonly called an SLC, to investigate the claims. According to the court filings, the SLC consisted of three independent former general counsels who had no prior connection to Exelon. The committee conducted a nearly two-year investigation, reviewed more than 1 million pages of documents, interviewed numerous witnesses, reviewed grand jury materials, and generated a comprehensive report before recommending that the litigation be resolved through settlement.

Jerry: Well, that’s certainly an extensive process in terms of kicking the tires. Karla, what did this settlement at issue and this ruling actually provide?

Karla: Sure. The settlement had both a monetary and governance component. First, it included a $40 million payment funded by insurers. The parties agreed that from that amount, $10 million would be paid as attorney’s fees and expenses, while the remaining funds would benefit the company. The court ultimately approved the $10 million fee award, and perhaps even more important from a governance perspective, the settlement required substantial reforms designed to prevent similar misconduct from occurring in the future. Those reforms address board oversight, compliance procedures, interactions with public officials and vendors, disclosure practices, audit processes, and board composition. These reforms will remain in effect for at least 5 years. The settlement also required the appointment of at least one new independent director with compliance expertise. Also, the settlement included executive accountability measures. The agreement called for a reduction of more than $4.2 million in compensation otherwise payable to former Chief Executive Officer Christopher Crane and preserved certain potential claims against former executives associated with the underlying conduct.

Jerry: Well, it certainly sounds like the settlement was designed not only to provide compensation, but also to reshape how the company conducts compliance and oversight. George, not everybody, however, supported the settlement. What were the objections that were registered in court?

George: A group of shareholders opposed the deal and argued that they had strong claims in light of the criminal convictions involving former ComEd executives and lobbyists, as well as the admissions contained in the deferred prosecution agreement. They contended that the settlement released potentially valuable derivative claims without providing sufficient consideration in return. They also argued that many of the governance reforms had already been implemented or had become stale over time. The objectors additionally challenged the monetary benefit. They argued that much of the settlement’s value was illusory, because $30 million of the recovery had been earmarked to help fund a separate $173 million securities class action settlement, and according to the objectors, those funds were already expected to be paid by insurance carriers, so the derivative settlement did not generate meaningful additional value.

Jerry: How did the court react to these objections and these concerns?

George: Well, Judge John Blakey rejected the objections and granted final approval. The court found that the settlement was fair, reasonable, and adequate. The judge stated that the settlement resulted from arm’s length negotiations overseen by an experienced mediator and followed a comprehensive investigation conducted by an independent special litigation committee. The court also concluded that the Special Litigation Committee was independent, capable of objective judgment, and conducted its investigation in good faith and with reasonable care. Those findings were important because courts often give significant weight to recommendations made by a properly functioning special litigation committee. Further, the court overruled all objections, approved the settlement in full, dismissed the derivative claims with prejudice, approved the $10 million fee award for settlement counsel, and denied the separate fee request submitted by the non-settling plaintiffs.

Jerry: Karla, what stands out to you about the court’s reasoning in terms of its approval?

Karla: One key takeaway is the court’s focus on litigation risk and certainty of recovery. The SLC argued that continued litigation would be expensive, lengthy, and uncertain. The committee also pointed out that Exelon would continue paying indemnification and defense costs for many defendants while simultaneously pursuing claims against them. The settlement provided an immediate recovery in substantial governance reforms, while eliminating the risk that shareholders might ultimately recover less, or nothing at all. The court accepted that reasoning and repeatedly emphasized the value of resolving a complex derivative case through settlement, rather than forcing years of additional litigation.

Jerry: George, if we rise to the 100,000-foot level, what are the practical lessons learned for companies and corporate boards by this litigation?

George: This case highlights how corporate misconduct can generate parallel proceedings across multiple fronts. Here, the underlying conduct led to criminal investigations, deferred prosecution agreement, securities litigation, derivative litigation, and extensive corporate governance scrutiny. A single compliance failure can create years of exposure and significant defense costs. The court also repeatedly relied on the extensive work performed by the SLC, and companies facing similar claims should recognize the value of creating a credible, independent investigative process that can withstand judicial scrutiny. Finally, derivative settlements increasingly focus on governance reforms rather than the monetary relief alone. Courts continue to view meaningful compliance enhancements as an important component of shareholder recovery, particularly where the goal is preventing future misconduct.

Jerry: Well, that’s certainly the point we see with respect to litigation over corporate governance. The emphasis certainly is no longer in simply just writing a check. Judges and courts reviewing settlement approval motions want evidence that the company has learned its lesson from the underlying events and implemented safeguards to reduce and prevent future risks and problems. As companies continue to navigate heightened scrutiny from shareholders, regulators, enforcement agencies, and plaintiffs class action lawyers. This decision certainly serves as another reminder that strong compliance programs and effective board oversight remain critical risk management tools.

Well, thank you, Karla and George, for your insights, and thank you to our listeners for tuning in.

Karla: Thanks, Jerry. Great to be here.

George: Thank you, Jerry, and thanks to the listeners.

October 14, 2026October 14, 2026 by Gerald L. Maatman, Jr.

Webinar Replay: Year-End Review of EEOC Litigation and Strategy

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Daniel D. Spencer

Duane Morris Takeaway: Thank you to all the loyal blog readers and followers who joined us for our Year-End EEOC Litigation and Strategy Review webinar! In this 30-minute program, Duane Morris partners Gerald L. Maatman, Jr., Jennifer A. Riley, and Daniel D. Spencer analyzed the latest impact of enforcement litigation at the U.S. Equal Employment Opportunity Commission, including its new National Enforcement Plan and strategic priorities established in fiscal year 2026 and the enforcement lawsuits filed over the past 12 months, and discussed how employers can navigate the EEOC’s latest enforcement initiatives and implement strategies designed to minimize the risk of drawing the agency’s scrutiny.

If you were unable to attend the webinar, it is now available on our podcast channel. Click to watch below and stay tuned for important EEOC trends and developments throughout the year.

October 14, 2026October 14, 2026 by Gerald L. Maatman, Jr.

Ninth Circuit Finds Article III Standing In Class Action Where The Only Harm Is The Act Of Unauthorized Disclosure Of Sensitive Information

By Gerald L. Maatman, Jamar Davis, and Caitlin Capriotti

Duane Morris Takeaways: On October 9, 2026, in Melissa Black and Miles Black v. IEC Group, Inc., No. 25-5952, 2026 U.S. App. LEXIS 30906 (9th Cir. Oct. 9, 2026), a panel for the Ninth Circuit, via an opinion written by Judge Eric. C. Tung, reversed the decision by the U.S. District Court for the District of Idaho dismissing a privacy class action for lack of subject matter jurisdiction for lack of injury. In the reversal, the Ninth Circuit held that the unauthorized disclosure of sensitive facts about Plaintiffs’ health that they entrusted Defendant to keep private is akin to a breach of confidence or contract. The act of disclosure, even without a formal privacy right, is an intangible harm sufficient for Article III standing. The case was remanded back to the District Court for further proceedings.

The decision is a must read for corporate counsel dealing with privacy class actions.

Case Background

Plaintiffs Miles and Melissa Black (“Plaintiffs”) receive health insurance from a plan administered by Defendant IEC Group, Inc. (“IEC”). Id. at *3. In August 2023, IEC sent Plaintiffs a letter informing them that some of their information was disclosed to unauthorized parties when an associate emailed a spreadsheet containing Plaintiffs’ sensitive health information to “on or more [plan] members.” Id. at *4. Information disclosed included: (1) first and last names, (2) unique tracking numbers, (3) provider names, (4) claim numbers, (5) dates of service, and (6) the amounts billed or paid. Id.

Plaintiffs brought a class action against IEC in the U.S. District Court for the District of Idaho claiming that when Plaintiffs entrusted their sensitive health information to IEC as a condition of their healthcare plan administration, IEC expressly and impliedly promised – through its Privacy Policy – to keep the information confidential and to not disclosure it to any third party without their consent, and to use reasonable methods to prevent such disclosure. Id. Plaintiffs allege that IEC breached those promises when they disclosed the confidential information without authorization, depriving Plaintiffs the benefit of their bargain and diminishing the value of the services rendered. Id.

The District Court granted IEC’s Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction because it concluded that Plaintiffs did not suffer an injury in fact and thus did not have Article III standing. Id. at *5. The District Court held that to allege a concrete injury from disclosure of personal information, the Plaintiffs must show that the nature of the information disclosed, the context of the disclosure, and other alleged injuries associated with the disclosure demonstrate an imminent and substantial injury. Id.

The Ninth Circuit’s Analysis

The Ninth Circuit reversed. It began its ruling by reiterating the long-held standard that an “injury in fact” includes both tangible harms, such as physical harms or monetary loss, and traditionally recognized intangible harms, such as “reputational harms” or “harms specificized by the Constitution itself.” Id. at *6. The Ninth Circuit also opined that “Congress’s ‘judgement is also instructive and important,’ as that body is ‘well positioned to identify intangible harms that meet minimum Article III requirements.’” Id. at *7 (citing Spokeo, Inc. v. Robins, 578 U.S. 330, 341 (2016)).

In this case, the harm Plaintiffs alleged consisted of the unauthorized disclosure of sensitive facts about their health that they entrusted to IEC to keep private. Id. At this stage of litigation, there is no dispute that the disclosed information was sensitive to Plaintiffs nor that IEC promised Plaintiffs to keep this information private. Id. Thus, the harm that Plaintiffs allege from the disclosure resembled a breach of confidence and breach of contract, which courts have long held provides basis for a lawsuit. Id.

Under a breach of confidence claim, a defendant is liable for “the unconsented, unprivileged disclosure to a third party of nonpublic information that the defendant has learned within a confidential relationship. Id (citing Kamal v. J. Crew Grp., Inc., 918 F.3d 102, 114 (3d Cir. 2019)). The panel described cases going back to 1614 England to demonstrate this long held cause of action. See id *8-12. Ultimately, for a breach of confidence, “a trust betrayed is the harm.” Id. at *12 (emphasis in original). Further, the Ninth Circuit held that a privacy right is not necessary to find a breach of confidence claim. Id. at 13. A “breach of contract” claim only reinforces the breach of confidence standing. Id. at 15. Here, Plaintiffs have alleged a confidential relationship grounded in promises made by IEC, and a breach of those promises. Id.

Finally, the Ninth Circuit reasoned that Congress has confirmed that disclosure of private health information is a concrete injury through other legislation. Id. at 16. Congress passed the Health Insurance Portability and Accountability Act (HIPAA) and subsequent amendments to protect certain sensitive health information from improper disclosure. Id. While HIPAA does not provide a private cause of action, it does prohibit disclosure of private health information and even provides criminal liability for “knowingly ‘disclos[ing] individually identifiable health information to another person.’”Id (citing 42 U.S.C. § 1320d-6(a)(3)). Congress has made the determination that this information is sensitive enough to warrant statutory protection. Id. Thus, a disclosure of the private health information is a harm sufficient for Article III standing.

Implications for Companies

This case highlights the importance of maintaining confidentiality when handling sensitive personal information of their employees and customers. The Ninth Circuit has held that even if a private cause of action regarding privacy for a specific kind of sensitive information does not exist, unauthorized disclosure is itself harm in the context of Article III. Employers must ensure that their security protocols and storage of sensitive information passes muster in the digital age in order to avoid potential liability

October 12, 2026 by Gerald L. Maatman, Jr.

Washington Supreme Court Rejects Privacy Class Action And Holds That Hospital’s Use Of Meta Pixel Does Not Violate State Privacy Act

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

Duane Morris Takeaways: On October 8, 2026, in Baker, et al. v. Seattle Children’s Hospital, No. 104590-5, 2026 WL 3023818 (Wash. Oct. 8, 2026), Justice Theodore J. Angelis of the Supreme Court of the State of Washington held that a hospital’s use of Meta Pixel’s advertising technology ( “Meta Pixel”) on its public website did not violate the Washington Privacy Act (“WPA”) because the plaintiffs’ website searches involved communications between a single individual and a website, and were not between “two or more individuals” as required by the WPA. The decision is a significant win for companies that use website advertising technologies, like Meta Pixel, but its import may be limited to claims brought under Washington state law.

Case Background

Seattle Children’s Hospital (“SCH”) operates a public website that provides general information about the hospital, including a directory of health care professionals, hours of operation for clinics, and descriptions of health conditions. The website also uses free software, called Meta Pixel, that allows websites to review visitors’ clicks, text searches, and page views. Meta Pixel also allegedly relays content of such searches to Meta Platforms, Inc., which links that information to the Facebook or Instagram account of the website visitor for targeted advertising.

In 2023, Carly Baker, Amber Shavies, and Janssen Ramos Savoie (collectively, “Plaintiffs”) filed a putative class action against SCH. Each of the Plaintiffs was a parent who alleged that they visited SCH’s public website to search for information regarding “their children’s medical conditions and for clinic operating hours, as well as visiting the patient portal, MyChart, to communicate with doctors and view their children’s electronic records and medical histories.” Id. at *2. SCH disputed that Meta Pixel was ever installed on the hospital’s MyChart patient portal and Plaintiffs “subsequently clarified that their claims targeted only the use of Pixel on SCH’s publicly available website.” Id. at *2, n.5.

SCH moved to dismiss the complaint and argued, inter alia, that Plaintiffs’ searches and queries on the website were not “private communications” as defined by the WPA. The trial court granted SCH’s motion to dismiss and dismissed the complaint with prejudice. Plaintiffs appealed and the Washington Court of Appeals affirmed the dismissal on the ground that navigation of a website is not a “communication” as defined by the WPA. See Baker v. Seattle Children’s Hosp., 35 Wash. App. 2d 1018 (2025). Plaintiffs then petitioned the Washington Supreme Court for review and the petition was granted.

The Supreme Court’s Decision

In a unanimous result, Justice Angelis, writing for the majority of the Washington Supreme Court, affirmed the trial court’s dismissal but on a different basis than the Court of Appeals.

Instead of determining whether the Plaintiffs’ website activity constituted a “private communication,” the Supreme Court focused on a different part of the WPA’s text. Justice Angelis explained that it is unlawful for “any individual, partnership, corporation, association, or the state of Washington” to intercept or record any “[p]rivate communication . . . between two or more individuals.” RCW 9.73.030(1)(a).

Justice Angelis reasoned that, because only communications “between two or more individuals” are unlawful, SCH would need to be an “individual” for Plaintiffs’ theory to work. Id. But SCH is not an individual. The WPA draws a distinction between “individuals” on the one hand and entities such as “partnership[s], corporation[s], association[s], or the state of Washington,” on the other. Id. Thus, because SCH is a corporation and “only one individual was involved in each communication, the [P]laintiffs do not have a claim under the WPA.” Baker, 2026 WL 3023818, at *3.

Justice Angelis, however, took care to point out that it was immaterial that the WPA is “one of the most restrictive electronic surveillance laws ever promulgated” and that certain federal and California laws may prohibit such conduct. Id. at *4 (quotations omitted). He explained that those federal and state cases are “not instructive given the significant differences between the state and federal statutory schemes” and declined to consider such precedent. Id. (quotations omitted).

Notably, Justice González and Justice Whitener wrote separately to concur in the result but express the view that “private communications transmitted between an individual and individuals working for a corporation are protected by” WPA. Id. (González, J., concurring). Instead, Justice González would have held that these communications were not between “two or more individuals” because the “parents’ private communications were directed at a server that returned stored content and not at another individual.” Id. at *5 (González, J., concurring). Thus, to Justice González, the material distinction was not a communication with a corporation but the nature of the underlying technology itself.

But nonetheless, the Washington Supreme Court unanimously affirmed the trial court’s dismissal with prejudice.

Implications For Companies

The Baker decision is a meaningful development for Washington companies that deploy advertising technologies, such as Meta Pixel, on their public-facing websites. Although the unique language of the WPA likely makes this decision distinguishable from claims brought under the Electronic Communications Privacy Act or California Invasion of Privacy Act, this holding should knock out nearly all claims under the WPA as a matter of law.

Justice González’s concurrence, however, serves as a cautionary note. Even though the majority opinion would seem to imply that you could never apply the WPA to communications with a corporation under any circumstances, there is at least a possibility that under different facts (e.g., such as communications directed to an individual staff member) the Washington Supreme Court would reach a different result. Nonetheless, Baker is undoubtedly a tremendous win for Washington companies and corporate counsel should continue to monitor this blog to stay apprised of developments in class actions involving Meta Pixel litigation and digital privacy law.

October 8, 2026October 8, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 168: Maryland Federal Court Dismisses ‘Drip Pricing’ Class Action Against Ticket Reseller

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and senior associates Michael Rosenblatt and Anna Sheridan with their analysis of a key ruling from the District of Maryland in a consumer protection class action finding the company’s arbitration unenforceable yet dismissing the lawsuit for failure to state a plausible claim for relief.

Episode Transcript

Jerry Maatman: Hello, everyone, and thank you for being here again for the next episode of the Duane Morris Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and welcome to Anna Sheridan and Mike Rosenblatt, who will be appearing on the podcast today. Thanks so much for both being here.

Anna Sheridan: Glad to be here, Jerry.

Mike Rosenblatt: Thanks for having me, Jerry.

Jerry: Today, we’re discussing a recent ruling out of the U.S. District Court for the District of Maryland involving Vivid Seats and allegations of so-called “drip pricing.” The case is Cheezum v. Vivid Seats, and it presents a very interesting combination of consumer protection law and arbitration issues. Anna, let’s start with the background. What is this lawsuit about?

Anna: The plaintiff, Laura Cheezum, alleged that Vivid Seats violated the Maryland Consumer Protection Act by advertising ticket prices that did not include mandatory fees, and then revealing the additional charges later in the purchasing process. According to the complaint, she selected two tickets advertised at $225 each, expecting to pay around $450 total. By the time she reached the final checkout screen, mandatory fees increased the purchase price to more than $600. She claimed that Vivid Seats used countdown timers and other pressure tactics during checkout and characterized the pricing model as “drip pricing.”

Mike: The lawsuit was filed after Maryland enacted a law targeting hidden ticket fees. The plaintiff sought to represent Maryland consumers who purchased tickets through the platform after the law took effect, arguing that Vivid Seats failed to disclose the full ticket price at the outset of the transaction.

Jerry: This sounds like a prototypical consumer fraud class action involving online pricing and disclosures, but as I read the opinion, it took a very interesting turn with respect to the issue of arbitration.

Mike: It certainly did. Vivid Seats, they first tried to compel arbitration based on its online terms of use. The company argued that when plaintiff completed her purchase, she agreed to those terms, which contained both an arbitration provision and a class action waiver.

Anna: The court, however, refused to enforce the arbitration agreement. Judge Matthew Maddox found that the agreement lacked consideration because Vivid Seats retained the unilateral right to modify its terms of use at any time without providing notice to customers. The terms stated that modifications became effective immediately, and that continued use of the website constituted acceptance. The court concluded that this allowed Vivid Seeds to change its obligations whenever it wanted, which rendered its promises illusory and made the arbitration provision unenforceable.

Jerry: That’s a very significant ruling by the federal court in Maryland. Kind of a trend we’re continuing to see as courts closely scrutinize online arbitration agreements, particularly where modification rights and provisions are drafted so broadly in favor of the manufacturer or of the company.

Mike: That’s exactly right. The court noted specifically that customers could only opt out after the changes had already been made, and there was no requirement that Vivid Seats provide advance notice. So, that was a critical flaw, and as a result, the motion to compel arbitration was denied.

Jerry: Despite defeating arbitration, nonetheless, the plaintiff ultimately didn’t win when it came to the decision with respect to the motion to dismiss. What happened there?

Anna: Well, the court held that the plaintiff had not adequately alleged reliance or injury under the Maryland Consumer Protection Act. To pursue a private claim under that statute, a consumer must show that a deceptive practice caused an actual loss. The court focused on the fact that the plaintiff admittedly saw the final ticket price, including all the fees, before completing the transaction, so she chose to proceed with the purchase, knowing all of those facts and that’s really the key takeaway from the merit portion of the decision. The court reasoned that because the plaintiff knew that the total price was what it was before she clicked “buy”, it cannot reasonably infer that she would have abandoned the purchase absent the alleged misrepresentations. So, the judge stated that the “only reasonable inference” was that she voluntarily completed the transaction with knowledge of the higher price and as a result, the court found that she failed to plausibly allege an identifiable loss caused by the alleged deceptive conduct. The complaint was dismissed without prejudice, meaning that she may seek leave to amend and attempt to cure the deficiencies.

Jerry: I thought it was interesting that this case also illustrates kind of the aggressive tactics and the innovative strategy of the plaintiff’s class action bar, insofar as in this particular case, the plaintiffs’ lawyer asked the court to certify a legal question to Maryland’s highest court regarding interpretation of the state’s anti-drip-pricing statute. What happened with respect to that request?

Mike: So, the court declined that request as well. The plaintiff argued that Maryland’s ticketing statute might provide an independent basis for relief. Judge Maddox concluded that the statutory framework was sufficiently clear, and that the Maryland Consumer Protection Act already provides the mechanism for consumers to pursue claims. So, he found no reason to believe the Maryland Supreme Court would interpret the statute as creating a separate private right of action.

Jerry: Let’s talk about what this means at a very high level for businesses both in Maryland and nationwide with respect to consumer fraud class actions.

Anna: Well, companies should pay very close attention to their arbitration agreements. The court’s arbitration analysis may prove just as important as its consumer protection analysis. Businesses that reserve broad rights to modify its online terms and conditions without advance notice risk having their arbitration provisions struck down as illusory. Companies should review modification clauses to ensure that they provide meaningful notice and preserve mutual obligations.

Mike: And companies should really note that while the plaintiff lost here, the court didn’t endorse drip pricing practices. So, the dismissal largely turned on pleading deficiencies related to reliance and injury. So, businesses should not assume that last minute disclosures of fees will defeat every consumer claim. States continue to enact disclosure requirements, and regulators remain focused on pricing transparency, and plaintiffs will likely continue testing these statutes in class litigation.

Anna: I also think the ruling highlights the importance of documenting consumer disclosures during online transactions. The court relied heavily on the fact that the plaintiff saw the total price before completing her purchase. Companies with clear checkout disclosures may be better positioned to challenge causation and reliance allegations at the fleeting stage.

Jerry: Those are all excellent points and takeaways because the decision certainly provides a helpful reminder that companies face risks in two different directions. On the one hand, arbitration agreements need to be scrutinized must be carefully drafted to remain enforceable under current interpretations of state and federal law. And on the other hand, transparent pricing practices and robust disclosures can provide a strong defense against consumer fraud allegations.

Mike: Right, and note that because the dismissal was without prejudice, this may not be the last chapter in the litigation.

Jerry: That’s for sure, and we’ll continue to monitor developments in this case and other consumer fraud cases nationwide. Well, that’s all for today’s episode. Anna and Mike, thanks so much for joining us, and thank you to our listeners.

Mike: Thanks for having me, Jerry, and thank you listeners.

Anna: Thank you everyone for listening.

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

California Legislature Halts Class Actions Alleging That Common Website Advertising Technologies Are Pen Registers And Trap And Trace Devices

By Gerald L. Maatman, Jr., Justin R. Donoho, and Hayley Ryan

Duane Morris Takeaways: On September 30, 2026, California Governor Newsome signed Senate Bill 690, which amends the California Invasion of Privacy Act (“CIPA”) to eliminate the private right of action under California Penal Code § 638.51 for pen register and trap-and-trace device claims arising from website, online application, and mobile application activity. Under the amended statute, only the California Attorney General may bring such claims against private actors. The law takes effect on January 1, 2027, and it applies retroactively to any pending claim in an action commenced within two years before that date. For the thousands of companies now facing CIPA § 638.51 class actions and demand letters over the use of pixels, cookies, and similar website advertising technologies (“adtech”), Senate Bill 690 offers significant and fast relief. It is not, however, the end of CIPA litigation. The wiretapping provision (§ 631) and the eavesdropping provision (§ 632), which plaintiffs have also used in adtech cases, are untouched.

The bill’s final form is much narrower than the version first introduced. As introduced, Senate Bill 690 would have exempted all processing of personal information for a “commercial business purpose” as defined by the California Consumer Privacy Act (“CCPA”) from civil and criminal liability under all three sections of the CIPA. See Assembly Committee On Privacy And Consumer Protection Committee Report (July 1 , 2026) (“Committee Report”) at 6-7. The analysis in our blog post covers the legal landscape that led to the bill, the scope and mechanics of the enacted statute, how the bill narrowed during the legislative process, and what corporate counsel and class action practitioners should do now.

Background

The CIPA was adopted in 1967 to criminalize wiretapping, eavesdropping, interception, and recording of telephone communications without court authorization. Section 637.2 confers a private right of action to any person injured by a violation of the CIPA. Available relief includes statutory damages of $5,000 per violation, three times the actual damages suffered by the plaintiff, if any, and injunctive relief. Section 637.2(c) specifically provides that plaintiffs do not need to show actual damages. The Assembly Committee on Privacy and Consumer Protection observed that, in the adtech context, these violations “can stack up rapidly, causing defendants to face potentially devastating liability.” See Committee Report at 7.

Recent adtech litigation has relied on three CIPA provisions: § 631 (wiretapping), § 632 (recording confidential communications), and § 638.51 (pen registers and trap-and-trace devices). Section 638.51 was added only in 2015, and according to the Assembly Committee on Privacy and Consumer Protection, the Legislature gave “little, if any, thought” to how it would apply online or interact with the CIPA’s private right of action. See Committee Report at 1. The Committee called the pen register and trap and trace device statute “a poster child for abusive lawsuits,” explaining that “[b]ecause the potential liability can be staggering, businesses generally settle this litigation hastily, encouraging vexatious litigants to continue blasting out demand letters.” See id. at 1.

The case law gave businesses little certainty. For example, federal district courts in California are split as to whether third-party collection of website-user information may constitute a trap and trace device or pen register under § 638.51. California state trial courts, by contrast, have mostly dismissed these claims, as in Licea v. Hickory Farms LLC, No. 23STCV26148, 2024 WL 1698147 (Cal. Super. Ct. Mar. 13, 2024), Casillas v. Transitions Optical, Inc., No. 23STCV30742, 2024 WL 4873370 (Cal. Super. Ct. Sep. 9, 2024), and Sanchez v. Cars.com Inc., No. 24STCV13201, 2025 WL 487194 (Cal. Super. Ct. Jan. 27, 2025). The Committee noted that there is no published California appellate authority applying § 638.51 to software. See Committee Report at 16. According to the bill’s sponsors, § 638.51 lawsuits rose from about 600 to nearly 4,000 after SB 690 was introduced, and tens of thousands of businesses received demand letters. See id. at 7.

What Does SB 690 Change?

SB 690 amends only § 637.2, the CIPA’s civil remedies provision. Its main features are as follows:

AG-Only Enforcement For Online Pen Register And Trap-And-Trace Claims. An action against a private actor for a violation of § 638.51 “alleged to arise from conduct occurring on an internet website, online application, or mobile application may be brought under this section only by the Attorney General.”
The Private Right Of Action Otherwise Remains. Subdivisions (a) and (b) of section 637.2 still authorize private suits for statutory damages, treble damages, and injunctive relief for all other CIPA violations, now subject only to the new subdivision (d) exception. The no-actual-damages provision in subdivision (c) also remains.
Retroactivity. The amendments “apply retroactively to any pending claim in an action commenced within two years before the operative date of that legislation.” The Committee explained that this provision is meant to relieve defendants in pen register lawsuits filed within the two-year period before January 1, 2027. It also stated that the amendments would not affect any case in which final judgment has been entered.
Severability. The Committee explained that a severability clause was added “in view of possible constitutional challenges to the retroactivity provisions.” See Committee Reportat 25.

Who And What Is Covered?

The carve-out is narrow and depends on four elements. First, it applies only to claims under § 638.51. Second, it applies only to actions against a “private actor.” Third, the claim must be “alleged to arise from conduct occurring on” a website, online application, or mobile application. Fourth, it removes only private standing. The underlying prohibition in § 638.51 remains, and the Attorney General may pursue violations using the remedies the CIPA already provides.

SB 690 does not define “private actor,” and it does not explain when conduct “arise[s] from conduct occurring on” a website or app. Defendants should expect plaintiffs to test those terms. Possible targets include back-end service providers to websites and apps, such as companies that provide payroll, shipping logistics, cybersecurity and antifraud technology, cloud storage, HR, and analytics and advertising tools, which the bill’s sponsors noted had also been sued.

How Did The Bill Change During The Legislative Process?

The introduced and enacted versions of SB 690 differ significantly. As introduced, the bill would have exempted any “commercial business purpose,” as defined by the CCPA, from both civil and criminal liability under the CIPA. The enacted version does much less: it removes private standing only for certain § 638.51 claims. The introduced bill would have changed CIPA §§ 631, 632, 632.7, and 638.51. The Committee’s amendments struck all changes to §§ 631, 632, 632.7, and 638.50, so the enacted law amends only § 637.2, the CIPA’s civil remedies provision. See Committee Report at 25-26.

The two versions also differ in reach. The original bill applied to all civil and criminal violations, was not limited to website activity, and could have covered any recording or interception of a confidential communication made for a commercial business purpose. Id. at 15. The enacted bill leaves criminal liability unchanged, focuses only on the civil private right of action against private actors, and is limited to conduct occurring on an internet website, online application, or mobile application. Further, the original bill did not provide for public enforcement, while the enacted version gives the California Attorney General standing to pursue these pen register and trap-and-trace violations using the remedies the CIPA already provides. The enacted version also adds two provisions the original bill did not have: retroactive application to pending claims in actions commenced within two years before the operative date, and a severability clause added in view of possible constitutional challenges to that retroactivity.

The Committee called the original bill “too blunt” and warned that the bill could “unintentionally shield wiretapping violations that involve highly offensive intrusions.” See Committee Report at 2, 25. The Committee also treated the trap and trace device and pen register statute differently from the other provisions, noting that trap and trace device and pen register cases usually involve “seemingly innocuous technical violations arising from ordinary operation of websites.” Id. at 2. By contrast, it found that §§ 631 and 632 cases often involve “highly offensive intrusions on users’ reasonable expectations of privacy, although they are not immune from abuse.” Id. The narrowed bill passed the Legislature unanimously in late August 2026.

What SB 690 Does Not Do

Claims under Sections 631 (wiretapping) and 632 (eavesdropping), which carry the same $5,000 per-violation exposure, remain available to private plaintiffs in class action litigation. The Committee acknowledged that § 631 “continues to be challenging for courts to apply” to conduct occurring on websites. See Committee Report at 2. It concluded that targeted reform of § 631 “appears warranted, albeit not as urgent as reforms to the pen register statute.” Id. at 24. The Committee also noted that plaintiffs have moved toward other theories, including claims under California’s Comprehensive Computer Data Access and Fraud Act and the federal Electronic Communications Privacy Act. Id. at 25. In his signing message, Governor Newsom noted that “additional work in this area is needed, as CIPA contains other decades-old statutes that are also susceptible to abuse by overly aggressive litigants,” and “urge[d] the Legislature to take this on next year to ensure a fair balance between protecting private information and preventing rapacious litigation.”

Implications For Companies

SB 690 should sharply reduce the volume of § 638.51 class actions and demand letters. In the short term, however, the plaintiffs’ bar may shift its claims rather than abandon them. Companies with any online presence, including websites, mobile applications, and online forms and applications, should consider the following steps.

Assess Pending § 638.51 Matters Now. For cases filed within the two-year retroactivity window, defendants should consider motions for judgment on the pleadings or dismissal once the law becomes operative on January 1, 2027, and should consider seeking stays in the meantime. Defendants should also reconsider their settlement posture on pen register-only demands.
Expect The Retroactivity Provision To Be Challenged. The Legislature added the severability clause because it anticipated constitutional challenges. Defendants should be prepared to defend retroactive application.
Expect Claims To Be Repleaded Under §§ 631 and 632. Plaintiffs asserting trap and trace device and pen register claims under § 638.51 are likely to recast adtech, claims as wiretapping or eavesdropping claims, particularly where descriptive URLs, search terms, or health information are involved, as adtech plaintiffs typically argue that such items constitute “contents” of a communication under § 631 and that transmission of such items to adtech companies constitutes “eavesdropping” or aiding and abetting eavesdropping under § 632. These claims still carry $5,000 per-violation statutory damages and remain suitable for class treatment. Of course, adtech plaintiffs will continue to face numerous significant legal challenges regarding the merits and certifiability of their §§ 631 and 632 claims, as we blogged about here, here, and here.
Continue Auditing Website Advertising Technologies. The relief provided by SB 690 fails to limit exposure not only under the CIPA §§ 631 and 632 but also under the Electronic Communications Privacy Act (ECPA), the Video Privacy Protection Act (VPPA), the Pennsylvania Wiretapping and Electronic Surveillance Control Act (WESCA), the Florida Security of Communications Act (FSCA), and other state and federal privacy statutes. Companies should continue to review and evaluate their adtech, data practices, consent mechanisms, and privacy notices, in light of rapidly evolving legal precedent regarding whether these old statutes apply to adtech, to ensure compliance with these other privacy laws.
Watch The 2027 Legislative Session. Given the Governor’s call for further reform, additional CIPA amendments are a realistic possibility.

Companies should consider Senate Bill 690 as a narrow solution providing limited relief to adtech defendants rather than a comprehensive reform. Companies that treat it that way will be better positioned for the next phase of CIPA class action litigation.

October 3, 2026October 3, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 167: New York Federal Court Rules Pre-Shift Warehouse Walk Time Non-Compensable

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and associates Olga Romadin and Elizabeth Underwood with their analysis of a key wage & hour ruling from the Northern District of New York addressing warehouse workers’ walking time between security checkpoints and timeclock stations.

Episode Transcript

Jerry Maatman: Hello, everyone, and thank you 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 are my colleagues, Elizabeth and Olga, to speak about all things class actions. Thank you both for being here on the podcast.

Elizabeth Underwood: Glad to be here, Jerry.

Olga Romadin: Thanks for having me, Jerry.

Jerry: Today, we’re discussing a significant wage and hour ruling from the U.S. District Court for the Northern District of New York called Kratzert, et al. v. Target Corporation. The decision addresses whether warehouse employees must be compensated for time working and walking from security checkpoints to their work areas before clocking in and after clocking out. The court’s ruling is an important development for employers operating large warehouses, distribution centers, and fulfillment facilities throughout New York and, in essence, throughout the United States. Elizabeth, can you walk us through the facts of this lawsuit?

Elizabeth: Absolutely, Jerry. The plaintiffs were current and former warehouse workers at Target facilities in Wilton and Amsterdam, New York. They allege that after entering the facilities and passing through security checkpoints, they had to walk substantial distances to reach time clocks located near their workstations. According to the complaint, some employees spent 3 or 4 minutes walking each way, while others spent as much as 10 to 15 minutes walking each way. They claimed that this time should have been paid under the New York labor law, and sought to bring the case on behalf of a class of similarly situated employees. The workers asserted four causes of action, including claims for unpaid minimum wages, unpaid overtime, failure to pay promised wages, and inaccurate wage statements. Their theory was straightforward: because Target required employees to be present in the warehouse and walk these distances before reaching their work areas, that time should qualify as compensable work under New York law.

Jerry: What’s notable here is that the gravamen of the case, the case theory, had more to do with New York state law requirements than federal law, is that right?

Olga: That’s right. The plaintiffs acknowledged that their claims would fail under federal law. The Fair Labor Standards Act, as amended by the Portal-to-Portal Act, generally excludes ordinary pre-shift and post-shift walking time within a facility from compensable work time. The Portal-to-Portal Act was enacted in 1947 specifically to reverse earlier Supreme Court decisions that had treated certain intro facility walking time as compensable. The parties agreed that if federal law alone controlled, the plaintiffs could not recover. The real fight was over New York law. The plaintiffs argued that New York had chosen to provide greater protections than federal law, and that the state’s wage regulations required compensation, even where federal law did not.

Jerry: Well, certainly not an academic question insofar as New York law is much more generous in terms of statute of limitations going back six years. How did the judge approach the state law questions?

Elizabeth: The court spent a considerable amount of time analyzing New York’s miscellaneous wage order, which regulates minimum wages and overtime for most New York employees. One provision, Section 142-2.1, states that minimum wages must be paid for time an employee is permitted to work or is required to be available for work at a location prescribed by the employer. The plaintiffs focused heavily on this language and argued that it covered the walking time at issue. But the court looked at another provision, Section 142-2.2., governing overtime compensation. That regulation requires employers to calculate overtime using the manner and methods provided by Sections 7 and 13 of the Fair Labor Standards Act, as amended. The judge concluded that this language incorporates not only the FLSA itself, but also the Portal-to-Portal Act amendments that limit compensable walking time.

Olga: The court’s reasoning was particularly interesting because it examined the history behind the Portal-to-Portal Act. The judge pointed out that the Supreme Court once held that certain walking time within an employer’s facility qualified as working time. Congress responded by passing the Portal Act specifically to eliminate liability for those claims. Because those decisions involved interpretation of Section 7 of the FLSA, the court concluded that what counts as compensable work is central to the manner and method of calculating overtime under Section 7. Therefore, when New York incorporated Section 7 as amended, it also incorporated the Portal Act’s limitations.

Jerry: As I read it, the opinion also seemed concerned about creating inconsistent results between minimum wage obligations and overtime obligations and calculations.

Elizabeth: Exactly. The court recognized that the plaintiff’s interpretation would lead to what it viewed as an unusual outcome. Under the plaintiff’s reading, the walking time might count toward minimum wage obligations, but would not count for overtime purposes. The judge said the New York Department of Labor likely did not intend for such an inconsistent result when adopting the wage regulations. Reading the provisions together, the court concluded that New York intended to incorporate the federal limitations on compensable walking time.

Jerry: This case is a great illustration of the patchwork quilt that employers much deal with, where not only compliance is required under federal law, but state and local laws, or state laws throughout the United States, that so-called patchwork quilt. In this instance, the judge was reviewing regulatory guidance of the New York Department of Labor, didn’t it?

Olga: It did, and that guidance played an important role. The judge examined a series of New York Department of Labor opinion letters dating back to the late 1990s and 2000s. Several of those letters directed employers and employees to federal regulations interpreting travel time and compensable work time. So, in the court’s view, those opinion letters demonstrated that the Department of Labor has historically interpreted New York’s wage regulations in line with federal travel time principles. The court also distinguished a 1997 opinion involving Yankee Stadium employees who reported to management, received work assignments, and then traveled to their work locations. The court noted that those facts were materially different because the employees had already begun performing activities directly related to their work duties.

Jerry: How did the court dispose of the other subsidiary claims once the walking time theory was rejected?

Elizabeth: The plaintiffs’ remaining claims fell with it. Because the court determined that the walking time was not compensable under New York law, it dismissed the minimum wage and overtime claims. It then held that the promised wage and wage statement claims were derivative of those underlying wage claims and dismissed those as well. Importantly, the court dismissed the case with prejudice and denied leave to amend, concluding that additional factual allegations about how employees walked the warehouse would not solve the legal defect identified by the court.

Jerry: Let’s talk about what this ruling means for employers in general at a 100,000-foot level. Olga, what are the takeaways here?

Olga: This is a significant victory for employers operating large facilities in New York. The decision provides strong authority that ordinary pre-shift and post-shift walking time inside a warehouse is generally not compensable under New York law, at least where employees are simply traveling to or from their work areas and have not yet began performing principal job duties. The ruling also reinforces the importance of federal Portal-to-Portal Act principles in New York wage litigation. Plaintiffs’ attorneys have increasingly argued that state wage laws are broader than federal law. This decision rejects that argument in the warehouse walking time context, and may make similar lawsuits more difficult to pursue in New York.

Elizabeth: I would add a note of caution for employers. This case involved ordinary walking time. The decision does not necessarily resolve disputes involving other activities that occur before or after a shift. Security screenings, equipment retrieval, donning and doffing protective gear, waiting for assignments, or other activities that are integral and indispensable to employees’ principal duties may raise different legal issues altogether. Employers should continue reviewing their timekeeping practices and compensation policies, rather than assuming every pre-shift activity is automatically non-compensable.

Jerry: Well, great insights from both of you. My takeaway is that decision certainly provides welcome relief and clarity for New York-based employers facing warehouse walking time claims, but it also underscores how important the language of relevant New York state agency regulations are and the specific meaning of the phrases used in those regulations, as well as the interaction between state law and federal law. We’ll be closely watching these issues in the Second Circuit and the New York Court of Appeals, its highest court, in terms of the defenses that employers can bring to bear in facing similar claims. So, thanks, Elizabeth and Olga, for joining me today, and thanks to our listeners for tuning in to this installment of the Class Action Weekly Wire. We’ll see you next time as we continue to track issues in the class action space.

Olga: Thanks for having me, Jerry, and thank you listeners.

Elizabeth: Thanks everyone for listening.

October 1, 2026October 1, 2026 by Gerald L. Maatman, Jr.

Ohio Federal Court Grants Conditional Certification Of A Wide Collective Action Against The Cleveland Clinic Foundation

By Gerald L. Maatman, Jr., Kathryn Brown, and Olga A. Romadin

Duane Morris Takeaways: On September 24, 2026, Judge Christopher A. Boyko of the U.S. District Court for the Northern District of Ohio granted Plaintiff’s motion for conditional certification of a proposed collective of workers alleging that time-rounding practices resulted in overtime violations in Garner v. Cleveland Clinic Foundation, Case No. 23-CV-2258 (N.D. Ohio Sept. 24, 2026). Judge Boyko found that Plaintiff had met her burden to show a strong likelihood that workers were similarly situated because she provided testimony, declarations, and an expert opinion that demonstrated that workers across multiple positions and facilities were all subject to the same non-neutral rounding policy. The opinion should be required reading for companies defending wage & hour claims in courts within the Sixth Circuit.

Case Background

Plaintiff Deborah Garner brought a putative class and collective action on behalf of herself and all other similarly situated on November 21, 2023. Plaintiff, a patient registrar and patient access specialist employed by Defendant, the Cleveland Clinic Foundation (“CCF”), alleged that CCF failed to pay non-exempt employees overtime at the statutory rate for all hours worked over forty, in violation of the Fair Labor Standards Act (“FLSA”) as well as Ohio’s wage and hour laws. Plaintiff additionally claimed that CCF failed to pay all wages owed to workers due to improper rounding and/or editing of hours worked in Defendant’s timekeeping software, and failed to keep accurate time records. Id. at 1-2.

On January 5, 2024, Plaintiff filed an amended complaint as well as a motion asking the Court to facilitate notice to other similarly-situated potential plaintiffs, and the Court granted the motion after striking Plaintiff’s class claims.

The Court’s Ruling

Judge Boyko granted Plaintiff’s motion to facilitate notice to putative collective members on determining that there was a strong likelihood that the proposed collective members are similarly situated because the plaintiffs had met their burden to show that non-exempt hourly employees were all subject to the same rounding policies. Id. at 1. Plaintiffs provided declarations of 5 opt-in plaintiffs, deposition testimony, and an expert opinion regarding CCF’s rounding policies and practices. Id. at 1-2. Plaintiff’s expert testified that CCF’s “rounding practices worked against the employees nearly 80 percent of the time.” Id. at 20.

Defendant argued that the scope of the proposed class and the variety of positions involved gave rise to individualized questions and issues, but the Court was unconvinced. Id. The Court determined that this evidence was enough to have “shown the rounding practice applied broadly to all the non-exempt employees” and was in line with the U.S. Supreme Court’s express determination that representative evidence in collective actions is permissible. Id.

However, the Court, citing to Plaintiff’s evidence, which showed that about 17% of employees suffered no injury, concluded that they lacked standing and were not similarly situated because they could claim no injury under the FLSA. Id. at 21.

Defendants further argued that approximately 4.5% of CCF’s non-exempt hourly employees were subject to “flex rounding” or “quarter rounding” policies and were therefore not similarly situated because they were not subject to the general rounding policy at issue. The Court found that Defendant’s argument only supported Plaintiff’s argument that CCF had a system-wide rounding policy, and that it was not applied to “select employees or departments.” Id. at 22. The Court concluded that the evidence showed “a consistent, systemwide policy of rounding and that rounding heavily favored Defendant,” and therefore that Plaintiffs met their burden to show the putative collective was similarly situated, and granted Garner’s motion for a Court-facilitated notice.

Implications for Companies

In light of the opinion in Garner, companies with a workforce of non-exempt employees are well-advised to take stock of their timekeeping policies and practices, particularly when they operate multiple facilities and utilize timekeeping systems with rounding features. Federal courts in the Sixth Circuit scrutinize any such policies to determine whether putative collective action members are subject to the same practices, and the likelihood of plaintiffs meeting the “strong likelihood” standard is greater when such policies are generally applicable across the employer’s sites and positions. A strong defense often features a showing that a company’s timekeeping policies and practices vary by position, department, and facility, and may be pointed to in arguing that putative collective members are not similarly situated enough to warrant collective-wide treatment.

October 1, 2026October 1, 2026 by Class Action Defense

Cutting-Edge Class Action Issues Debated At Perfect Law Conference at NYU School Of Law

By Gerald L. Maatman, Jr.

Duane Morris Takeaways: I had the privilege and honor of presenting on September 30 at the Perfect Law Class Action Conference at New York University School of Law. Practitioners and law professors from Europe, Canada, and the United States convened at NYU to debate cutting-edge class action issues involving privacy, securities fraud, products liability, and antitrust laws. The “debate” between the plaintiffs’ bar, defense lawyers, and academics made for an engaging and enlightening day. The full agenda is here – https://perfectlaw.co.uk/

Overview

Dean Troy McKenzie of NYU School of Law gave the keynote address that identified the array of unanswered and evolving legal issues in the class action space. Along with Professor Samuel Issacharoff, Den McKenzie set the stage for discussion about the quickly and ever-evolving law in this area. At the same time, artificial intelligence is fueling change and accelerating developments on all continents. “AI” became a consensus concept during all the conference presentations in terms of its potential to transform class action litigation issues.

Comparative Jurisdictions

In a follow up panel that included jurists from Europe and the United States, Judge Robert Dow – presently chief counsel for Chief Justice John Roberts of the U.S. Supreme Court and formerly a Judge of the U.S. District Court for the Northern District of Illinois – asserted that tools to manage complex litigation are functioning well, despite their genesis some 60 years ago. Both Supreme Court decisional law and Congressional enactments – such as the Class Action Fairness Act of 2005 – created heightened pleading requirements for litigating class actions and a preference for most of such cases being docketed in federal courts. As a result, class action litigation is growing, and federal courts are increasingly encountering cutting-edge class action issues as their caseloads expand.

Justice Benjamin Glustein of the Ontario Superior Court of Ontario observed that class actions likewise are increasing in Canada, and unlike U.S. practice, claims are more apt to be certified, especially dealing with civil rights claims. Canadian class actions, as a result, are thriving.

In terms of Europe, law professor Miguel Ferror of the University of Lisbon and plaintiffs’ lawyers Marc Grossman of Milberg and Luke Streatfield of Hausfeld talked about the rise of magnet jurisdictions in Europe, especially for antitrust claims in the United Kingdom. They opined that selection of jurisdiction is a high-stakes decision point for plaintiffs’ lawyers in Europe. In this respect, certain jurisdictions are not optimal forums for collective redress lawsuits. For example, while Romania follows a regime of 20% presumed damages, they observed, in essence, that “no one litigates in Romania” because they do not trust the courts and legal outcomes there. Litigation funders, they opined, also take a close look at selections of venue and pertinent ethical rules in those jurisdictions in terms of mass or group-wide claims.

Privacy Class Actions

On a panel with three plaintiffs’ privacy lawyers, I spoke on the rise and pervasiveness of privacy violations as a new frontier of class actions. In general terms, I opined that Article III standing requirements are critically important in this space. The case law is not necessarily consistent, the legal state of play is in flux, and many decisions turn on specific factual situations. I offered three distinct takeaways using a recent case from New York as an exemplar.

First – There was an important decision from the Southern District of New York issued in August of last year that goes into great depth into the issues raised by these questions.

In Re Zeta Global Privacy Litig., No. 25 Civ. 5780, 2026 WL 2254612 (S.D.N.Y. Aug. 8, 2025) (granting motion to dismiss a putative class action under ECPA and state consumer protection laws for lack of standing under Rule 12(b)(1) for lack of injury in fact).

Zeta is a company that uses artificial intelligence to develop personalized marketing techniques aimed at helping brands acquire and retain customers. Id. at *1. The named plaintiffs alleged that when they visited storefronts of business that use Zeta for this purpose, those businesses tracked them across the Internet; and that Zeta, and its clients, profited from collecting their PII. Id. Among other things, the plaintiffs alleged “Zeta uses this AI Engine to generate ‘insights’ which its clients can use to identify consumers who “can be targeted for specific lines of business.” Id. at 2. They alleged this creates significant monetary value as measured by how much clients pay to access the dataset. Id. They sought damages under the Electronic Communications Privacy Act (“ECPA”), 18 U.S.C. § 2510, et seq., and various state consumer protection laws. Id. at 1.

In response to the motion to dismiss, the plaintiffs argued that they pled two privacy-related harms traditionally recognized as adequate to confer standing: (1) invasion of privacy – at common law referred to as public disclosure of “private facts,” and (2) “intrusion upon seclusion. Id. at 4. They also argued: (3) because defendants profited from monetizing their PII data and harmed “plaintiffs’ electronic device ‘resources,’ and caused a loss of control of their data.” Id. at *4.

On the first claim – disclosure of private information – the court explained that in the Second Circuit, the Article III standing analysis requires either “’actual injuries’” resulting from the disclosure or ‘a substantial risk of harm’”

See FritzCo LLC v. Verizon Commc’ns Inc., No. 21 Civ. 10432, 2026 WL 734776, at *4 (S.D.N.Y. Mar. 16, 2026). Id. at 5.

A “substantial risk of harm’ is determined by “whether the type of data that has been exposed is sensitive such that there is a high risk of identity theft or fraud.”

McMorris v. Carlos Lopez & Assocs., LLC, 995 F.3d 295, 303 (2d Cir. 2021). Id. at 5.

This turns on whether it constituted “sensitive information” – id. at 6 – which the court noted does not include data like addresses, phone numbers, email addresses, and IP addresses.

Cooper v. Bonobos, Inc., No. 21 Civ. 854, 2022 WL 170622, at *6 (S.D.N.Y. 2022).

It also does not include “partial credit card numbers” and “password histories” (id.) because they are unlikely to cause an injury that was “certainly impending” or suggesting a “substantial risk the harm will occur” the standards set forth in the Cooper case. This was because of “the fragmented nature of the data and the age of the information (e.g. old passwords—that were captured.” (Id.)

On the other hand, a plaintiff arguably does have Article III standing for state law claims if credit card information is taken which, along with other stolen personal information, enables third parties to complete unauthorized transactions.

FritzCo LLC v. Verizon Commc’ns Inc., No. 21 Civ. 10432, 2026 WL 734776, at *4 (S.D.N.Y. Mar. 16, 2026).

And if the content of emails is sold, that is sufficient to establish standing for federal privacy claims if it contains information such as sensitive PII.

Cooper v. Slice Techs., Inc., No. 17 Civ. 7102, 2018 WL 2727888, at *2-3 (S.D.N.Y. June 6, 2018).

See also In re Christie’s Data Breach Litig., 767 F. Supp. 3d 12, 16-18 (S.D.N.Y. 2025) (finding disclosure of plaintiffs’ full names, passport numbers, and driver’s license numbers sensitive).

The court concluded that the named plaintiffs in the Zeta litigation did not provide enough specificity in their pleading to establish Article III standing. They did not state the nature of the PII allegedly collected and analyzed by the AI learning model, which the court explained was fatal to their complaint:

“It does not allege that credit card information, medical information, Social Security numbers, or any other data otherwise recognized by courts as sensitive—was disclosed. It hypothesizes that Zeta might possess “2,500” pieces of information about these plaintiffs, and that “Zeta has likely stored more information than what is publicly known.” FAC ¶¶ 67, 85. But such conjecture cannot support standing.”

In Re Zeta at *6.

Second – Other courts have held that the disclosure or capture of mere browsing activity, without more, is also not sufficient for a concrete injury.

Bradshaw v. Lowe’s Cos., No. 25 Civ. 742, 2025 WL 3171740, at *5 (S.D. Cal. Nov. 12, 2025) (collecting cases and observing combination of browser information with other information captured by tracking pixels did not demonstrate a concrete injury to show Article III standing);

Smidga v. Spirit Airlines, Inc., No. 22-CV-1578, 2024 WL 1485853, at *4 (W.D. Pa. Apr. 5, 2024) (“[C]ourts have held that even the collection of basic contact information by [ ] software or where the plaintiffs merely visited the website are not [ ] concrete harms.”).

Magliocca v. United Healthcare Servs., No. 25-CV-3388, 2026 WL 878694, at *4 (E.D. Cal. Mar. 31, 2026) (“button clicks, page visits, session lengths, URLs, and IP addresses” were the kind of “non-sensitive browsing activity on a single website” that courts have repeatedly found insufficient to establish a concrete injury under the ECPA and state law).

Third – the disclosure of private information claim in the Zeta case was also dismissed because the court concluded plaintiffs inadequately pled any harm whatsoever from the profit claim and the potential to serve targeted ads to the plaintiffs and the putative class. The complaint did not allege any named plaintiff received any targeted advertising or were otherwise affected, let alone harmed, by it.

In Re Zeta, at *7.

Conclusion

Class actions are wide and varied and are increasing in number. The stakes and risks for Corporate America have never been higher. The panel presentations at the Perfect Law Conference underscored these issues, and predicted more changes fueled by AI.