August 2025 – Class Action Defense

August 29, 2025August 29, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 116: 42 State Attorneys General Can’t Object To $275 Million Antitrust Settlement, Pennsylvania Federal Judge Rules

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and senior associate Daniel Selznick with their discussion of a key ruling issued by a Pennsylvania federal judge regarding intervenors to a $275 million settlement resolving pharmaceutical price-fixing claims.

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

Jerry Maatman: Thank you for being here again, loyal blog listeners and readers, for our weekly podcast series entitled The Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is senior associate Dan Selznick. Thanks so much for being on the podcast, Dan.

Daniel Selznick: Great to be here, Jerry. Thanks for having me.

Jerry: Today, our topic is discussing a ruling from the Eastern District of Pennsylvania called In Re Generic Pharmaceutical Pricing Antitrust Litigation. That’s a mouthful, but it involved a situation where 40 state attorneys general were blocked from intervening in a $275 million generic drug price-fixing antitrust settlement. Dan, what’s the hubbub about with respect to this case?

Dan: Yeah, so this is part of a massive multidistrict litigation involving allegations that Sandoz and other pharmaceutical companies conspired to fix prices on generic drugs. This $275 million settlement would resolve claims brought by consumers, insurers, and other so-called “end payers,” and it’s actually the largest settlement so far for any defendant in this MDL.

Jerry: Why was it that the state attorneys general were attempting to intervene in the settlement?

Dan: So, the states, which are collectively referred to as the “Movant States,” filed a motion to intervene because they were concerned the settlement might interfere with their own lawsuits against Sandoz that had been remanded to the District of Connecticut. They claimed they had a sovereign and statutory interest in ensuring a fair recovery for consumers in their states.

Jerry: So, the concern was the federal settlement approved by the Eastern District of Pennsylvania might impair or cut off their rights to pursue state-related claims?

Dan: Exactly, so they argued that the scope of the release in the federal settlement could overlap with or even undermine what they’re trying to recover in their own suits. But the states weren’t asserting any new claims in this case, they were just asking to intervene so they could protect what they saw as their interests.

Jerry: But the end result was the Federal District Court in the Eastern District of Pennsylvania said no – what was the reasoning behind that answer to the states’ request?

Dan: Sure, so the court was following a recommendation by the special master in the case, and ruled that the states did not have Article III standing to intervene. And essentially, the court agreed that the states’ interest here was nominal, and it didn’t rise to the level of a concrete, sovereign interest required for standing.

Jerry: When you say nominal, from a legal sense, what does that mean in terms of standing?

Dan: In legal terms, a nominal interest means the party, in this case the states, is not asserting a direct legal claim or injury. The court held that because the states weren’t asserting their own affirmative claims and were instead trying to weigh in on claims resolved between private plaintiffs and Sandoz, the states were more like bystanders. So, the court made it clear that the real parties in interest are the individual consumers, or the end payers, and the states weren’t acting in their sovereign authority, which is key when trying to establish standing under a parens patriae theory.

Jerry: But isn’t it true that states have that statutory authority to protect consumers and to recover damages on their behalf? Doesn’t that matter in terms of a standing analysis?

Dan: Right, so that’s a big part of the states’ argument, and they were pointing to their parens patriae authority under state law to say, “We’re not just speaking for private citizens – we, the states, have an independent role.” But the court said that was not enough, because the states weren’t bringing their own claims here, and all of their actions were pending elsewhere. In this MDL, they were just objecting to the settlement and trying to ensure it did not impact their separate litigation. The court concluded that this indirect interest was not sufficient to establish standing to intervene.

Jerry: So that’s no standing, no intervention under Rule 24(a). What about permissive intervention under Rule 24(b)? Did the states try that gambit?

Dan: Right, so that’s a good question. You know, under Rule 24(b), the court has more flexibility. But even there, the special master concluded, and the court agreed, that letting the states in at this stage would risk delaying or prejudicing the rights of existing parties. And notably, the states didn’t push back on that conclusion, so the court denied permissive intervention under 24(b) as well.

Jerry: I thought the ruling was interesting insofar as the states were not allowed to intervene, but were not totally silenced. The court still let them leave to file an amicus brief. Is that something that you see very often?

Dan: You know, it’s hard to say. I mean, in this case, the court said that the states’ objections could still be considered, but only as amici curiae. So, the court made a point to say it would give those objections the same weight it would have if the states had been permitted to intervene. But the key difference with this is that because the states don’t have formal party status, they can’t appeal the final ruling unless they can establish standing.

Jerry: I thought another interesting dynamic to the decision was the role of Florida, and what it did, in a unique way as compared to the other states. Could you explain that for our listeners?

Dan: Sure, and yeah, it is interesting. So, Florida actually was not part of the group trying to intervene, and instead it asked to file an amicus brief supporting the settlement. So, contrary to what the other states were doing, and the court granted that request. So, you know, you’ve got states on both sides of this issue, which highlights how divided even the public enforcers can be when it comes to evaluating the fairness of a settlement.

Jerry: In terms of the financial side of the equation, how are the costs for the intervention motions being split?

Dan: So, my understanding is that the court is treating this as a shared cost among the parties involved in the motion, and I think the special master fees for the motion will be 50% covered by the states, so the movants, and then the other 50% will be split between Sandoz and the end-payer plaintiffs, each having 25%.

Jerry: That’s quite interesting. Well, thanks, Dan, for lending your thought leadership here in this complicated arena in the Eastern District of Pennsylvania. I think the big takeaway here seems to be, as it is in many federal-related class action situations, that real standing is the key to opening the courthouse door and being able to intervene and having a clear legal interest in an Article III sense trumps everything else. So, thanks so much for being here, Dan, and for your insights and for explaining this ruling to our readers. And thanks, listeners, for tuning in.

Dan: Of course, thanks, Jerry, for having me on the podcast, and again, thanks to the listeners for being here.

August 28, 2025August 28, 2025 by Gerald L. Maatman, Jr.

Second Circuit Reiterates EEOC’s Expansive Subpoena and Investigative Authority, Even After The Charging Party Files A Lawsuit Based On A Right-to-Sue Letter

By Gerald L. Maatman, Jr., Adam D. Brown, and Gregory S. Slotnick

Duane Morris Takeaways: On August 25, 2025, in United States EEOC v. AAM Holding Corp. (In Re AAM Holding Corp.), 2025 U.S. App. LEXIS 21629 (2d Cir. Aug. 25, 2025), the U.S. Court of Appeals for the Second Circuit affirmed a decision by the Southern District of New York and held the U.S. Equal Employment Opportunity Commission (“EEOC”) retains authority to investigate an EEOC charge even after the EEOC issues the charging party a right-to-sue letter and the charging party subsequently files a lawsuit in court. This ruling significantly expands the scope of the EEOC’s investigative authority in the Second Circuit as it joins the Seventh and Ninth Circuits in allowing pending EEOC investigations to proceed following the agency’s issuance of right-to-sue letters to a charging party who thereafter files suit. The decision is directly at odds with the Fifth Circuit’s holding in EEOC v. Hearst Corp., 103 F.3d 462 (5th Cir. 1997), that the EEOC’s investigative authority ceases upon the charging party’s filing suit pursuant to a right-to-sue letter. The Second Circuit’s opinion follows the more recent trend of courts siding with the EEOC on its assertion of expansive investigative authority and allowing the agency to continue investigating charges despite the charging party’s separate private lawsuit. With the decision, the split in authority now heavily favors the EEOC’s expanded authority, and employers should understand that ongoing EEOC investigations may continue in full force despite the agency’s issuing a right-to-sue letter. Finally, the opinion confirmed that EEOC subpoenas must be construed generously and may properly request extremely broad categories of class-wide documents and information if the EEOC finds it relevant and in the public’s interest to seek same.

Case Background

In March 2022, Eunice Raquel Flores Thomas (“Thomas”), a former dancer who worked at two Manhattan adult entertainment clubs (FlashDancers Midtown and FlashDancers Downtown (together, “the Clubs”)), filed a class-based charge with the EEOC alleging widespread sexual harassment and hostile work environment at both club locations. AAM Holding Corp., 2025 U.S. App. LEXIS 21629, at *3. Thomas claimed she and other women were forced to change clothes in an open back room without doors that was video-monitored, and were pressured to have sex with high-paying repeat customers in champagne rooms, fearing adverse employment actions should they refuse. Id. at *3-4.

Following the EEOC’s initial notification to the Clubs that Thomas filed a charge, the EEOC requested information such as “the clubs’ policies regarding relationships between customers and employees, any records of sexual harassment complaints, and pedigree information for their employees, including each employee’s name, age, sex, race, position, dates of employment, and contact information.” Id. at *4. The Clubs objected to the EEOC’s requests as irrelevant and unduly burdensome to produce, and the EEOC thereafter issued two subpoenas demanding the employee pedigree information, which ultimately led to the EEOC petitioning the District Court for enforcement. Id. at *4-5. The District Court granted the EEOC’s petition and ordered the Clubs to produce the information, explaining that the relevance requirement is a “low bar” and that courts give the term a “generous construction,” allowing access to “virtually any material that might cast light on the allegations against the employer.” Id. at *5 (internal citation omitted). The Clubs eventually filed a notice of appeal to the Second Circuit and moved to stay the enforcement order first in the District Court and then in the Second Circuit, both of which motions were denied. Id. at *5-6.

Meanwhile, in July 2024, while the Clubs’ appeal before the Second Circuit was pending, the EEOC issued Thomas a right-to-sue letter, on the basis of which Thomas filed, in September 2024, a putative class action complaint in the District Court. Id. at *6. The Clubs then argued to the Second Circuit that the EEOC had been divested of its investigative authority (including its ability to issue subpoenas) once Thomas received her right-to-sue letter and filed suit. Id. The Clubs also reiterated their position that the underlying subpoenas’ demand for pedigree information for all club employees (not just Thomas) was overbroad and unduly burdensome. Id.

The Second Circuit’s Decision

The Second Circuit began its opinion by providing background about the investigative process under Title VII. It explained that the EEOC bears primary responsibility for enforcing Title VII under a multistep enforcement procedure that involves the filing of a timely charge, an investigation by the EEOC during the pendency of the charge, and, where appropriate, dismissal of the charge and issuance of a right-to-sue letter authorizing the charging party to pursue litigation. Id. at *6-8.

The Second Circuit also addressed the Clubs’ argument that the EEOC’s investigative authority stops once it issues a right-to-sue letter and the party files suit. Specifically, it addressed the Clubs’ reliance on the Fifth Circuit’s opinion in EEOC v. Hearst Corp., 103 F.3d 462 (5th Cir. 1997), which held that the initiation of a private suit by an aggrieved party marks the end of the investigation stage and thus terminates the EEOC’s investigative authority. Id. at *8-9.

Disagreeing with the Fifth Circuit’s holding in Hearst, the Second Circuit found no support in the text or structure of Title VII, instead citing Title VII’s broad grant of authority to the EEOC, which provides that the agency “‘shall at all reasonable times have access to . . . evidence . . . that relates to unlawful employment practices . . . and is relevant to the charge under investigation.’” Id. at *9 (citing 42 U.S.C. § 2000e-8(a)) (emphasis added). The Second Circuit determined that Title VII did not place any “strict temporal limit” on the EEOC’s authority to issue and enforce subpoenas and obtain evidence through the enforcement process, and that, in fact, the requirement that the EEOC complete its investigation within 120 days applies only “so far as practicable,” which the Court held does not establish “a hard stop.” Id. at *10.

Moreover, the Second Circuit observed that the Supreme Court has held that the EEOC retains independent administrative “responsibility of investigating claims of employment discrimination” and therefore retains the right to file its own civil lawsuit even after the 180-day window, which does not end its responsibility or ability to investigate a charge. Id. at *11 (citing Occidental Life Ins. Co. of Cal. v. EEOC, 432 U.S. 355, 368 (1977)).

The Second Circuit further reasoned that a central part of the EEOC’s “broad public interest and role” in fighting employment discrimination is pursuing the public interest by enforcing the law even when that interest is distinct from or exceeds the private interest of the aggrieved charging party. Id. at *11. It noted the possibility that the EEOC could issue a right-to-sue letter only to have the charging party file suit and settle for nominal damages, a scenario in which, the opinion states, the agency would still be free to continue investigating ongoing unlawful discrimination that may be remedied by unique EEOC mechanisms like conciliation or public litigation. Id. at *12. Those mechanisms also include the EEOC’s ability to initiate class-wide enforcement actions without certification of a class representative under Federal Rule of Civil Procedure 23, as well as its ability to pursue injunctive relief. Id. at *12-13.

Ultimately, the Second Circuit opined on these bases that the EEOC retains its authority to investigate, including issuing and enforcing administrative subpoenas, after it issues a right-to-sue letter and the charging party files a lawsuit. Id. at *13-14. The Second Circuit supported its holding by noting that, “[w]hen the EEOC determines that public resources should be committed to investigating and enforcing a charge, the statutory text unambiguously authorizes it to proceed,” citing to similar holdings (without dissent) in both the Ninth Circuit (EEOC v. Fed. Express Corp., 558 F.3d 842, 854 (9th Cir. 2009) and the Seventh Circuit (EEOC v. Union Pacific Railroad Co., 867 F.3d 843, 850-51 (7th Cir. 2017)). Id. at *13-14 (internal citations and quotation marks omitted).

The opinion also held the EEOC’s subpoena for pedigree information was not overbroad or unduly burdensome. Id. at *14. The Second Circuit determined the District Court did not abuse its discretion in finding that: (i) the materials were relevant to Thomas’s claims of widespread sexual harassment at the Clubs; and (ii) the Clubs failed to show that producing responsive documents and information would be unduly burdensome, rejecting the Clubs’ assertion, without factual detail, that the production would take approximately 300 hours of work. Id. at *15-19.

Implications For Employers

The Second Circuit’s decision means the EEOC’s investigative authority does not end when a charging party requests and receives a right-to-sue letter and thereafter files a suit. Instead, the EEOC may, in its discretion, determine that the public’s interest either diverges from or exceeds the interests of the private charging party and may continue its ongoing investigation by issuing class-wide records and information requests.

Companies must be keenly aware of the EEOC’s broad, ongoing investigatory powers in dealing with the charging party and the EEOC throughout the time after a charge is filed. Employers should also be aware that courts are reluctant to deny the EEOC’s subpoena requests when the agency makes a showing of relevance, which is generously interpreted by courts in the EEOC’s favor. While situations may arise in which the agency’s requests are truly overbroad or unduly burdensome in scope, businesses should assume they will have an uphill battle objecting to or greatly limiting any such requests, even after the charging party files a separate private lawsuit.

August 26, 2025August 26, 2025 by Gerald L. Maatman, Jr.

Illinois Federal Courts Allow Adtech And Edtech ECPA Claims To Proceed, Furthering Split Of Authority

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

Duane Morris Takeaways: On August 20, 2025, in Hannant v. Sarah D. Culbertson Memorial Hospital, 2025 WL 2413894 (C.D. Ill. Aug. 20, 2025), Judge Sara Darrow of the U.S. District Court for the Central District of Illinois granted a motion to dismiss while allowing a website user to re-plead her claim that the hospital’s use of website advertising technology (“adtech”) violated the Electronic Communications Privacy Act (“ECPA”). The same day, in Q.J. v. Powerschool Holdings, LLC, 2025 WL 2410472 (N.D. Ill. Aug. 20, 2025), Judge Jorge Alonso of the U.S. District Court for the Northern District of Illinois denied the Chicago school board and its educational technology (“edtech”) provider’s motion to dismiss a claim that their use of a third-party data analytics tool violated the ECPA. These rulings are significant in that they show that in the hundreds of adtech, edtech, and other internet-based technology class actions across the nation seeking millions (or billions) in dollars in statutory damages under the ECPA, Illinois Federal courts have distinguished themselves from other courts in other jurisdictions that have refused to interpret the ECPA in such a plaintiff-friendly manner as have the Illinois Federal courts.

Background

These cases are two of a legion of class actions that plaintiffs have filed nationwide alleging that Meta Pixel, Google Analytics, and other similar software embedded in defendants’ websites secretly captured plaintiffs’ web-browsing data and sent it to Meta, Google, and other online advertising agencies and/or data analytics companies. In these adtech, edtech, and similar class actions, the key issue is often a claim brought under the ECPA on the theory that hundreds of thousands of website visitors times $10,000 per claimant in statutory damages equals a huge amount of damages. Plaintiffs have filed the bulk of these types of lawsuits to date against healthcare providers, but they have filed suits against companies that span nearly every industry including education, retailers, and consumer products. Several of these cases have resulted in multimillion-dollar settlements, several have been dismissed, and the vast majority remain undecided.

In Hannant, the plaintiff brought suit against a hospital. According to the plaintiff, the hospital installed the Meta Pixel on its website, thereby transmitting to Meta, allegedly without the plaintiff’s consent, data about her visit to the hospital’s website.

In Q.J., the plaintiff brought suit against the Chicago school board and its edtech provider. According to the plaintiff, the school board and edtech provider installed a third-party data analytics tools called Heap Autocapture on the edtech provider’s online platform, thereby transmitting to Heap, allegedly without consent, information about the students’ visits to the online platform.

In both lawsuits, the plaintiffs claimed that these alleged events amounted to an “interception” by the defendant that violated the ECPA. Neither defendant contested whether the plaintiff had plausibly alleged an “interception,” even though the events were more like the catching and forwarding of a different ball, not an interception: (1) as alleged in Hannant, see No. 24-CV-4164, ECF No. 14 ¶¶ 49, 363 (alleging that the communication Meta received was not the same transmission but a “duplicate[]” that was “forward[ed]”); and (2) despite the wholly conclusory allegations of a purported “interception” in Q.J. However, both defendants moved to dismiss the claim under the ECPA on the grounds that, to the extent there was any interception, no liability exists under the ECPA pursuant to its exception where the party does not act “for the purpose of committing any criminal or tortious act.” 18 U.S.C. 2511(2)(d).

The Courts’ Decisions

In Hannant, the Court dismissed the ECPA claim without prejudice, and granted the plaintiff leave to re-plead in a fashion that may allow such an amended complaint to withstand the ECPA claim. Specifically, the Court found that an amendment might plausibly allege a criminal or tortious purpose by adding sufficient detail about the plaintiff’s website interactions to show that there had been a violation of the Health Insurance Portability and Accountability Act (“HIPAA”), which provides for criminal and civil penalties against a person “who knowingly … discloses individually identifiable health information [(‘IIHI’)] to another person.” 2025 WL 2413894,at *3 (quoting 42 U.S.C. § 1320d-6). As the Court explained, under adtech class-action precedent in the U.S. District Court for the Northern District of Illinois, adding additional detail regarding alleged transmission of IIHI could be enough to allege a criminal or tortious purpose. Id. at *3-5.

In Q.C., the Court denied the school board and edtech provider’s motion to dismiss, citing the same plaintiff-friendly precedent in the Northern District of Illinois cited by the opinion in Hannant, and explaining that while the allegedly disclosed data in this educational context did not violate the HIPAA, the plaintiff had plausibly alleged that the transmissions at issue violated the Illinois School Student Records Act (“ISSRA”), 105 ILCS 10/6, and Family Educational Rights and Privacy Act (“FERPA”), 20 U.S.C. § 1232g. 2025 WL 2410472, at *6.

Implications For Companies

In Illinois Federal courts, pixels and cookies are no longer just marketing and educational tools – they are legal risk vectors. By contrast, other U.S. District Courts ruling on Rule 12(b)(6) motions have found no plausibly alleged interception when an internet-based communication is forwarded as opposed to being intercepted mid-flight, and no plausibly alleged criminal or tortious purpose because the purpose was not to violate any statute but rather to engage in advertising or data analytics. (See, e.g., our prior blog entry discussing one of these several cases, here.)Website owners facing lawsuits in Illinois District Courts would do well to press such arguments finding success in other jurisdictions in order to preserve them for appeal in the Seventh Circuit, which has yet to rule on these issues. In addition, other defenses remain, including demonstrating that plaintiffs cannot meet their burden of proof to show any actual disclosure where transmissions of information entered on the website to adtech vendors and data analytics providers such as Meta or Google are encrypted, ephemeral, anonymized, aggregated, and otherwise unviewable and irretrievable by any human and hence not any actual disclosure to a third party.

Corporate counsel seeking to deter ECPA litigation should keep in mind the following best practices (discussed in more detail in our prior blog post, here): (1) add or update arbitration clauses to deter class actions and mitigate the risks of mass arbitration; (2) update website terms of use, data privacy policies, and vendor agreements; and (3) audit and adjust uses of website advertising technologies.

August 26, 2025 by Gerald L. Maatman, Jr.

Illinois Federal Court Dismisses Data Breach Class Action Lawsuit For Lack Of Subject-Matter Jurisdiction

By Gerald L. Maatman, Jr., Christian Palacios, and Brett Bohan

Duane Morris Takeaways: On August 20, 2025, in Phelps v. Ill. Bone & Joint Inst., LLC, No. 24-CV-08555, 2025 WL 2410341 (N.D Ill. Aug. 20, 2025), Judge Martha Pacold of the U.S. District Court for the Northern District of Illinois granted Defendant Illinois Bone & Joint Institute, LLC’s motion to dismiss for lack of subject matter jurisdiction. The Court held Plaintiff failed to adequately plead Defendant’s citizenship, given its status as a limited liability company; therefore, the Court could not determine whether complete diversity existed between the parties. This ruling illustrates the differences between the general diversity statute under 28 U.S.C. § 1332(a), and the more lenient “minimal diversity” requirement under the Class Action Fairness Act, as well as the consequences of failing to sufficiently plead a limited liability company’s citizenship.

Case Background

On August 30, 2024, Defendant Illinois Bone & Joint Institute, LLC (“Defendant”) sent a data breach notification letter to its patients, including Plaintiff Alexandra Phelps (“Plaintiff”). Id. at *1. Plaintiff, individually and on behalf of a putative class, filed a lawsuit shortly after receiving the letter alleging negligence, negligence per se, breach of implied contract, and violation of the Illinois Personal Information Protection Act. Id.

Defendant moved to dismiss the complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. Id. In the motion, Defendant raised two arguments, including: (i) that Plaintiff lacked Article III standing, and (ii) that Plaintiff could not establish diversity jurisdiction under the Class Action Fairness Act (“CAFA”). Id. Although Plaintiff had invoked jurisdiction under the CAFA in her Complaint, she did not respond to Defendant’s CAFA arguments. Id. at 2. Instead, Plaintiff argued that she could “invoke jurisdiction under the general diversity statute, 28 U.S.C. § 1332(a).” Id.

The Court’s Order

The Court determined that the Complaint failed to allege sufficient facts to support diversity jurisdiction.

First, the Court reasoned that Plaintiff’s decision not to respond to Defendant’s CAFA arguments amounted to a concession that Plaintiff could not meet the standards for subject-matter jurisdiction under the statute. Id. However, although Plaintiff had not invoked general diversity jurisdiction in her Complaint, the Court permitted her to raise these arguments because “a complaint’s imperfect statement of the legal theory supporting jurisdiction does not itself defeat jurisdiction.” Id.

Second, the Court observed that, to satisfy general diversity jurisdiction, Plaintiff must be able to show that Plaintiff is a citizen of a different state than Defendant and “the amount in controversy exceeds $75,000, exclusive of interest and costs.” Id. Under the CAFA, an LLC, like Defendant, is “a citizen of the State where it has its principal place of business and the State under whose laws it is organized.” Id. Under the general diversity statute, on the other hand, an LLC is a citizen “of every state of which any member is a citizen.” Id. The Court concluded that the Complaint did not include any allegations of Defendant’s “member’s identity or citizenship.” Id. As such, the Court could not determine whether “any member is a citizen of the same state as Phelps.” Id. Because the Complaint did not allege facts sufficient for the Court to conclude that “complete diversity between the parties” existed, the Court dismissed the case without prejudice. Id.

In sum, the Court concluded that, to establish diversity jurisdiction, a Complaint must adequately allege the citizenship of all parties. Id. Plaintiff’s failure to plead the citizenship of all Defendant’s members was, therefore, fatal to her claims. Id. at 3

Implications For Employers

The Court’s ruling in Phelps serves as a reminder of the distinctions between the the CAFA’s minimal diversity jurisdiction requirement and general diversity jurisdiction. While Plaintiff’s Complaint may have included sufficient facts to establish Defendant’s citizenship under the CAFA, the Complaint could not support the more demanding “complete” diversity jurisdiction requirement under 28 U.S.C. § 1332(a).

This case highlights an important procedural defense available to employers, particularly if the named corporate entity in the litigation is a limited liability company (rather than a traditional corporation, who’s citizenship is tied to its state of incorporation and principal place of business). Employers should take note of a plaintiff’s burden to sufficiently establish federal subject matter jurisdiction at the outset of the litigation, and the accompanying procedural defenses they might avail themselves of when a plaintiff fails to sufficiently plead the jurisdictional prerequisite.

August 21, 2025August 21, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 115: Ninth Circuit Strikes Arbitration Clause In Employee Health Plan

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associates Jesse Stavis and Caitlin Capriotti with their discussion of a major Ninth Circuit decision addressing a district court’s denial of a motion to compel arbitration in a proposed ERISA class action.

Episode Transcript

Jerry Maatman: Thank you to our listeners for being here again for our next episode of the Class Action Weekly Wire, our podcast series that examines class action issues. I’m Jerry Maatman, a partner at Duane Morris, and today we have Jesse Stavis of our Philadelphia office and from California, our newest team member, Caitlin Capriotti. Thank you both for being here to join the podcast.

Jesse Stavis: Great to be here, Jerry. Thanks so much for having me on again.

Caitlin Capriotti: Thanks, Jerry. I’m really happy to be here for my first episode.

Jerry: So, the Ninth Circuit just issued a very significant opinion involving Sodexo and its employee health care plan, and specifically how arbitration clauses interact with ERISA class action claims. Caitlin, can you give our listeners a synopsis of the decision?

Caitlin: Yeah, of course. So, the plaintiff in this case, Robert Platt, alleged that a monthly tobacco surcharge imposed on his employee health insurance premiums violated the ERISA. The plaintiff brought claims on behalf of himself and other plan participants under ERISA Sections 502(a)(1)(B) and 502(a)(3) and a fiduciary breach claim under 502(a)(2) on behalf of the health plan itself. Sodexo sought to compel arbitration based on the provision it unilaterally added to the Plan after Platt had already enrolled. The district court denied the motion, holding that there was no enforceable arbitration agreement because Sodexo could not unilaterally modify the Plan to impose arbitration without Platt’s consent, and then the company had appealed to the Ninth Circuit.

Jerry: Thanks for that cogent summary. Jesse, how did the Ninth Circuit react after reviewing the district court’s opinion?

Jesse: The Ninth Circuit agreed. It held that an employer cannot create a valid arbitration agreement simply by unilaterally amending an ERISA-governed plan. Instead, valid consent from the appropriate party is required. Now, for Platt’s individual claims under Sections 502(a)(1)(B) and (a)(3), the Ninth Circuit found that Platt himself was the relevant consenting party – and that he had not consented to arbitration, so he received insufficient notice, and was never informed that continued participation would signal his agreement.

However, the Ninth Circuit held that for the fiduciary breach claim under Section 502(a)(2), the Plan, and not Platt, was the relevant consenting party. Because the Plan’s terms grant Sodexo broad authority to amend its provisions, the court found that the Plan consented to arbitration. Nonetheless, the panel also agreed with Platt’s argument that even if the Plan had consented, the arbitration clause’s ban on representative actions violated the effective vindication doctrine, which protects statutory rights from being waived through arbitration. Since representative actions are integral to ERISA enforcement under Sections 502(a)(2) and 409(a), the court held that the representative action waiver was unenforceable.

Jerry: So, what’s the essential big takeaway here? Is this just another quirky, fact-specific Ninth Circuit opinion, or are we starting to see a trend in ERISA class actions where arbitration clauses are at issue?

Caitlin: We’re definitely starting to see a trend. This decision aligns with what we’ve seen from several other circuits, specifically the Second, Third, Sixth, Seventh, and Tenth. Courts are increasingly skeptical of arbitration provisions in ERISA plans that try to block representative or class-wide claims.

Jesse: And if we take a step back and look at the big picture, we really see that employers are losing ground in trying to force individualized arbitration when plan-wide relief is at stake. That’s a pretty huge shift in ERISA litigation strategy, and employers need to take note.

Jerry: Let’s unpack this a little more. Obviously, the case is now going back down to the district court because the Ninth Circuit affirmed in part and reversed in part. What exactly got compelled to arbitration or stayed, and what got tossed?

Jesse: So, the Ninth Circuit said that Sodexo could not compel individual arbitration for benefits and equitable relief because they didn’t get proper consent from plan participants when they added the arbitration clause unilaterally. That part stuck.

Caitlin: But for the fiduciary breach claim, the court actually said Sodexo did get valid consent – from the Plan itself, which is a distinct legal entity. So, technically, that claim could be arbitrated.

Jerry: But that being said, the way I read the Ninth Circuit’s opinion, there seems to be a catch. What’s that all about?

Jesse: Yes, Jerry, there is indeed a catch. Because the arbitration clause had a representative action waiver, the court said enforcing that would violate the effective vindication doctrine. That means Platt couldn’t be blocked from pursuing a fiduciary breach claim on a representative basis, which is exactly what ERISA allows.

Jerry: Well, this is probably music to the plaintiffs’ bar, because their business model is to find a case, file the case, certify the case, and then monetize the case – and avoid being compelled to arbitration. Are the plaintiffs’ attorneys going to have a broader array of tools to try and frustrate motions to compel arbitration and keep their cases in court?

Jesse: Oh, yes, they certainly are. And beyond that, the court also opened the door for unconscionability defenses, even though Sodexo had a valid agreement with the Plan. The Ninth Circuit said those defenses arise under federal law, not state law, which means they’re not preempted by ERISA. So, Platt gets another shot at challenging the clause.

Jerry: So, is this settled law in your opinion, or are we seeing a little bit of the Wild, Wild West and a lot of innovative, creative attacks on arbitration clauses in the coming months?

Caitlin: It’s still a bit of the Wild West. While the circuits are mostly moving in the same direction, there are differences on questions like plan-wide monetary relief versus equitable relief, and how far effective vindication goes.

Jerry: My sense is this lack of clarity, or that the legal principles are in flux, may well put this on the Supreme Court’s radar, especially as more circuit splits emerge on the arbitration issue in ERISA class actions. Before we wrap up, what are your big takeaways from the Ninth Circuit’s opinion in Sodexo?

Caitlin: For me, it’s the reaffirmation that ERISA’s representative structure matters. Courts won’t let arbitration clauses rewrite that.

Jesse: And I’d just add to that by saying that employers need to be very careful with how they draft arbitration clauses in ERISA plans. Unilateral amendments and representative waivers are definitely more risky territory.

Jerry: Well said. That’s cogent advice. We’ll be watching to see if the Supreme Court of the United States takes this up, but for now, loyal blog readers and listeners, be sure to keep checking the Duane Morris Class Action Blog for our updates on all things class actions and arbitration issues. Well, thanks for being here, Jesse and Caitlin, and thanks for tuning in, listeners.

Jesse: Thanks so much for having me on the podcast, Jerry, and thanks, as always, to the listeners for being here.

Caitlin: Thanks, everyone, and thank you for the warm welcome. I’m happy to be here.

August 20, 2025August 20, 2025 by Alex W. Karasik

Second Circuit Rules That The NFL Arbitration Of Race Discrimination Claims Because Arbitration Process Provides Arbitration “In Name Only”

By Alex W. Karasik and Gregory S. Slotnick

Duane Morris Takeaways: On August 14, 2025, in Flores v. N.Y. Football Giants, Inc., No. 23-1185, 2025 U.S. App. LEXIS 20688 (2d Cir. Aug. 14, 2025), the U.S. Court of Appeals for the Second Circuit affirmed a decision from the Southern District of New York denying a motion to compel arbitration of claims of plaintiff Brian Flores (“Flores”) asserting race discrimination filed by the National Football League (“NFL”) and six of its member clubs. In closely examining the arbitration provision at issue (and agreed upon by the parties), the Second Circuit found that the NFL’s internal arbitration framework, which provided the NFL Commissioner with unilateral control over arbitrator selection, substantive process of proceedings, and other discretionary decision-making powers, provided for arbitration “in name only” and fell short of requirements set forth in the Federal Arbitration Act (“FAA”).

According to the Second Circuit, the NFL Commissioner’s complete control over the NFL’s internal arbitrations pursuant to the NFL Constitution makes the process, “inherently biased” and leaves it outside the protections of the FAA. The Second Circuit sternly concluded that, “[u]ltimately, the NFL’s arbitration provision is fundamentally unlike any traditional arbitration provision protected by the FAA,” and the agreement between Flores and the NFL to arbitrate his claims, “is plainly unenforceable under the most basic principles of the effective vindication doctrine,” requiring arbitration guarantee that Flores can “vindicate [his] statutory cause of action in [an] arbitral forum.” Id. at *5. As a result, Flores’s racial discrimination lawsuit will proceed in federal court and the NFL will likely need to go back to the drawing board to update its internal arbitration provisions so they comply with arbitration mandates under the FAA and prior court decisions. All employers seeking to prepare and enforce arbitration provisions should heed the Second Circuit’s concerns with the NFL’s arbitration language and process to ensure their agreements comply with the FAA.

Case Background

Since 2008, Flores – the current defensive coordinator of the NFL’s Minnesota Vikings – has been employed as a football coach by a variety of NFL teams, including the New England Patriots (2008-2018), Miami Dolphins (2019-21), Pittsburgh Steelers (2022), and the Minnesota Vikings (2023-Present). Id. at *5. The operation and structure of the NFL and the relationship between the NFL, its member clubs, and the clubs’ employees (including NFL coaches), are governed by the NFL Constitution and Bylaws (the “NFL Constitution”). Id. at *6. The NFL Constitution “broadly empowers” the NFL Commissioner to manage the league’s affairs, including, but not limited to, the ability to interpret and establish league policy and procedure, discipline relevant parties, hire legal counsel to respond to conduct detrimental to the league, its member clubs or employees, or to professional football, and the full, complete, and final jurisdiction and authority to arbitrate disputes between relevant parties, including between employees and member clubs. Id. Flores’s employment agreement with the Patriots included a club-specific arbitration provision, incorporating by reference arbitration language in the NFL Constitution. Id. at *9-10.

In January 2019, while still under contract as a coach with the Patriots, Flores interviewed to be the head coach of the Denver Broncos. Id. at *9. Flores claims the Broncos discriminated against him because of his race in failing to hire him and that the Broncos only offered him an interview as a “sham” to satisfy the Rooney Rule – a long-standing requirement by the NFL that two opportunities to interview for each open coaching position be allotted to prospective candidates who are members of a racial minority group and/or a woman. Id.

One month later, in February 2019, Flores was hired as the head coach of the Dolphins. Id. In January 2022, Flores was fired following three seasons as head coach of the Dolphins. Id. at *10. After the Dolphins fired him, Flores interviewed for head coach positions with both the New York Giants and the Houston Texans, though he was not hired for either position due to what he alleges to be racial discrimination and retaliation. Id. at *10-11. In February 2022, Flores was hired as a senior defensive assistant and linebackers coach with the Steelers, signing an employment agreement that, like his agreement with the Patriots, included a club-specific arbitration agreement and incorporated by reference the NFL Constitution. Id. at *11. The same month, Flores filed a putative class action against the NFL, the Denver Broncos, New York Giants, and Miami Dolphins alleging claims of race discrimination under 42 U.S.C. § 1981, as well as state and local statutes. Id. at *6. In June 2022, the NFL and its relevant member clubs sought to compel Flores to arbitrate his claims pursuant to the employment agreements Flores signed with the Patriots and Steelers, respectfully. Id. at *7-8.

The District Court found that Flores’s claims against the Broncos and the NFL clearly fell outside his club-specific arbitration agreement with the Patriots. Id. at *10. Although the District Court found that the NFL Constitution’s arbitration provision applied to Flores’s claims, the Court refused to enforce it, reasoning that it was illusory and unenforceable under Massachusetts state law because “the NFL and its member clubs have the unilateral ability to modify the terms of the NFL Constitution.” Id. As such, the District Court ordered that Flores’s claims against the Broncos and related claims against the NFL be litigated in federal court. Id. The NFL’s appeal to the Second Circuit followed.

The Second Circuit’s Decision

The Second Circuit affirmed the District Court’s decision denying the motion to compel Flores to arbitrate his claims against the NFL, the Broncos, the Giants, and the Texans. Id. at *25-26. Specifically, the Second Circuit concluded that Flores’s agreement under the NFL Constitution to submit his claims against the Broncos and the NFL to the unilateral substantive and procedural discretion of the NFL Commissioner (the principal executive of one of Flores’s adverse parties) provides for arbitration “in name only” and lacks the protection of the FAA. Id. at *18. It also held that Flores’s agreement to submit his claims against the Broncos and the NFL to the unilateral discretion of the NFL Commissioner is unenforceable because the agreement fails to guarantee Flores can “vindicate [his] statutory cause of action in [an] arbitral forum.” Id. The decision further confirmed that the District Court did not err or abuse its discretion in denying Defendants’ motion to compel arbitration or in denying Defendants’ motion for reconsideration. Id. at *2.

The Second Circuit provided background on the FAA and its principles mandating that although the FAA establishes a “liberal federal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract,” not every self-described “arbitration agreement” falls within the FAA’s ambit. Id. at *14. Under the facts at issue here, the Second Circuit found that while Flores agreed to arbitrate his statutory claims by way of arbitration provisions in the employment agreement he entered with the Patriots, the relevant language granted the NFL Commissioner unilateral discretion over the arbitration process itself. Id. The Second Circuit held that such one-sided control undermines the fairness required for a valid arbitration agreement under the FAA because the NFL Constitution’s arbitration provision fails to provide: (i) an independent arbitral forum for bilateral dispute resolution, resulting instead in compelling one party (Flores) to submit disputes to the substantive and procedural authority of the principal executive officer of one of their adverse parties (the NFL); and (ii) the procedure to be used in resolving the dispute, instead allowing the NFL Commissioner to unilaterally dictate arbitral procedure. Id. at *19-22. The Second Circuit concluded that “the NFL’s arbitration provision is fundamentally unlike any traditional arbitration provision protected by the FAA,” is not afforded any special deference under the FAA, and that this served as an independent reason to affirm the District Court’s order denying the motion to compel Flores to arbitrate his claims. Id. at *22.

Moreover, the Second Circuit found Flores’s agreement was “plainly unenforceable” under exceptions to the FAA since the arbitration provision “fails to provide Flores access to an arbitral forum” and in fact waives Flores’s right to pursue statutory remedies. Id. at *22-24. It reasoned that requiring Flores to submit statutory claims to the unilateral discretion of the executive of one of his adverse parties (the NFL Commissioner), without an independent arbitral forum, denied Flores arbitration in any meaningful sense of the word, rendering the agreement unenforceable. Id. at *24.

Relying on the foregoing reasoning, the Second Circuit affirmed the District Court’s order, finding: (i) Flores’s agreement under the NFL Constitution to submit his claims against the Broncos and the NFL to the unilateral substantive and procedural discretion of the NFL Commissioner provides for arbitration “in name only,” thus lacking the protection of the FAA; (ii) Flores’s agreement to submit his claims against the Broncos and the NFL to the unilateral discretion of the NFL Commissioner is unenforceable because the agreement fails to guarantee Flores can “vindicate his statutory cause of action in an arbitral forum,”; and (iii) the same unprotected and unenforceable agreement also cannot be used to compel Flores to arbitrate his claims against the Giants, Texans or related claims against the NFL. Id. at *25-26.

Implications For Employers

The Second Circuit’s decision means Flores can continue litigating his race discrimination claims against the NFL and its member clubs in the public eye of federal court, despite the NFL’s attempts to force Flores into its internal private arbitration framework. While the attention-grabbing headline provides Flores a major victory in keeping his race discrimination lawsuit alive, perhaps the most important takeaways are for companies or businesses with an arbitration clause or agreement in effect, as well as employers considering implementing same for employees. Employers must ensure that any arbitration procedures, including arbitral forum and substantive process, comply with the FAA’s mandates to ensure bilateral and objective arbitration for all involved parties.

The Second Circuit repeatedly held that although there was no dispute that both Flores and the NFL member teams signed the employment agreement and agreed to the referenced NFL Constitution’s arbitration provision, a process providing one party with unilateral discretionary control over arbitrator selection and substantive procedure amounts to arbitration “in name only,” and lacks the protection of the FAA. As evidenced by the Second Circuit’s description of the relevant arbitration provision’s shortcomings, businesses seeking to ensure their arbitration agreements are enforceable should have counsel regularly review their existing arbitration language to confirm it is bilateral and objective, thus falling under the FAA’s protection.

August 14, 2025August 14, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 114: Seventh Circuit Adopts Higher Standard For Certifying Collective Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associates George Schaller and Ryan Garippo with their discussion of a significant ruling handed down by the Seventh Circuit in Richards v. Eli Lilly & Co setting a new standard for the conditional certification of collective actions.

Episode Transcript

Jerry Maatman: Thank you, loyal blog readers for joining us for our next episode of our weekly wire podcast called the Class Action Weekly Wire. I’m Jerry Mammon, of Duane Morris, and joining me today are my associates and colleagues, Ryan, Garippo, and George. Thanks so much, gentlemen, for being on this week’s Podcast.

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

George Schaller: Thanks, Jerry, always good to be on the podcast.

Jerry: Today we’re unpacking a bombshell of a decision by the Seventh Circuit earlier this week, entitled Richards v. Eli Lilly. Ryan, can you give us a high-level overview of what this case is all about, and the ruling and holding of the Seventh Circuit?

Ryan: Yeah, of course, Jerry. So, this case started back in 2022, when Monica Richards, a former employee of Eli Lilly, sued the company for age discrimination under the ADEA, the Age Discrimination in Employment Act. The plaintiff brought the case as a collective action, which means that she wanted to send notice to potentially affected employees and give them a chance to join the lawsuit. The ADEA incorporates the FLSA’s enforcement provision, which allows for employees to band together in collective actions when suing an employer for either age discrimination or wage and hour violations. Richards, as a result, alleged that Eli Lilly promoted younger employees in violation of the Act.

Jerry: So, although this is about the Age Discrimination in Employment Act, it has application to wage and hour collective actions, and I’d say, for every one age discrimination lawsuit, there are probably 100 wage and hour cases being brought. So, what’s at issue is 29 U.S.C. § 216(b) – In other words, in what circumstances should a court conditionally certify a collective action and send notice to those who are at issue in the lawsuit. So, in terms of conditional certification, I think that’s where the rubber meets the road in this decision. George, how do you view that issue?

George: Well, here, Jerry, after the plaintiff moved for conditional certification of the collective action, the district court followed the widely-used approach called the Lusardi two-step process, which is from a district court of New Jersey opinion in 1987, called Lusardi v. Xerox Corp. Under this framework the courts hold that the employee has a light burden at the first stage, and thus may rely solely on the plaintiff’s allegations and courts do not consider competing evidence submitted by the employer. In recent years, the Fifth and Sixth Circuit Courts of Appeals have found that the Lusardi two-step approach is inconsistent with the text of the FLSA. But in contrast, the Second, Ninth, Tenth, and Eleventh Circuits continue to either follow or allow the district court to adopt the two-step framework outlined in Lusardi. Here, the district court followed the two-step framework, granting conditional certification of the collective action and allowing notice to be sent to all potential collective action members.

Jerry: I know to get up to the Seventh Circuit there was an interesting route, unlike a class action under Rule 23(f) where one may file a petition with a court of appeal to examine a class certification order. There’s no such right of appeal under the rules or under the statute under 216(b). And yet Eli Lilly filed a motion for interlocutory appeal, and the Seventh Circuit accepted it, hence its realization of how important this issue is. What exactly did the Seventh Circuit decide in construing the parameters of 216(b)?

Ryan: Well, Jerry, the Seventh Circuit agreed that Lusardi was too permissive, and reformed the approach under 216(b). As a result, it held that the standard allowed for abuse, mainly by encouraging settlements based on the pressure of having a massive case brought against an employer rather than their merit. But, interestingly, the Seventh Circuit also stopped short of adopting the stricter frameworks adopted by both the Fifth and Sixth Circuits, and adopted a standard that’s primarily focused on flexibility. The idea is that instead of a hard rule, the Seventh Circuit gave district courts more discretion. It observed that the notice process should be facilitated by three guiding principles, namely, the timing and accuracy of notice; judicial neutrality; and the prevention of abuses of joinder. And now, plaintiffs have to show that there’s a material factual dispute as to whether employers are similarly situated, and actually bring forward some evidence of a common unlawful policy, as opposed to just relying on the allegations in their complaint. Of course, employers can introduce rebuttal evidence in response to that, and the employee has to engage with it, and the court can consider it as a whole.

Jerry: Sure sounds like a big win, to me, for employers. Given that the devil is in the details when it comes to allowing district courts to exercise their discretion, how do you think this is going to work in practice in the future in the Seventh Circuit at the district court level?

George: All that’s the details, Jerry. It’s definitely a win for employers, because in Illinois, Indiana, and Wisconsin employers can now challenge collective actions earlier and more effectively. But the Seventh Circuit left a lot of questions unanswered, including the level of scrutiny courts should apply when plaintiffs should get limited discovery to meet this new standard. What happens if plaintiffs want to submit supplemental evidence, all that’s left to the court’s discretion? It does remove the automatic green light plaintiffs used to get at the first step, but now it opens the door to new fights about process. How much is enough evidence? When is the case strong enough to notify other employees? Nobody really knows yet.

Ryan: That’s right, and the federal courts are deeply divided, and this is a hot debate amongst the courts of appeal. You’ve got the Fifth and Sixth Circuits rejecting this already, and the Seventh join that group, albeit taking a middle road. Meanwhile, the Second, Ninth, Tenth, and Eleventh Circuits still allow it. Add to that about a second disagreement about whether or not Bristol Myers Squibb, a seminal U.S. Supreme Court case from a few years ago, applies to collective actions, and you’ve got a lot of uncertainty.

Jerry: You know, it’s remarkable that this is a piece of new deal legislation passed in 1938, and yet here we are, 85 years or more later, in 2025, and there are now four different standards to determine when to conditionally certify a collective action under 216(b). And if you’re an employer operating throughout the United States, you could be litigating the same case in one of those jurisdictions in a completely different manner than another one, because the standards are different. So, it does seem to scream out for Supreme Court review eventually, so that there’s one national, unified standard. In the interim, what can employers do?

George: Well, first, if you’re facing a collective action in the Seventh Circuit, this ruling does give you a stronger basis to oppose conditional certification early, and employers should use that opportunity to gather rebuttal evidence and be prepared to challenge the similarly situated claims head on. Second, consult outside counsel early – this area is in flux and procedural missteps can have real consequences.

Jerry: Well, thanks for those insights, and I would commend our listeners and readers to the blog post you gentlemen did earlier this week in elucidating the Seventh Circuit’s opinion. And we’ll be following these issues throughout the year, culminating in publication of the 2026 Duane Morris Class Action Review. So, thanks so much for joining our podcast this week.

Ryan: Thanks for having me on the podcast and thanks to the listeners for being here.

George: Thanks everyone. Great to be here.

August 14, 2025 by Gerald L. Maatman, Jr.

You’ve Got Mail But Not Class Certification

By Gerald L. Maatman, Jr., Shannon Noelle, and Ryan Garippo

Duane Morris Takeaways: In a recent opinion in Fischbein v. IQVIA Inc., Case No. 19-CV-5365 (E.D. Pa. June 5, 2025), Judge Nitza I. Quiñones of the U.S. District Court for the Eastern District of Pennsylvania denied class certification of a proposed class of healthcare professionals that allegedly received unsolicited fax advertisements in violation of the Telephone Consumer Protect Act (“TCPA”). The Court determined that the TCPA only prohibits receipt of unsolicited ads on a “a traditional stand-alone fax machine” (as opposed to modern online faxing) and plaintiffs did not demonstrate that common evidence existed showing all class members received the alleged ads at issue through a traditional fax machine as opposed to through an online transmission. As a result, the Court found that plaintiffs did not satisfy the required ascertainability and predominance elements of class certification.

Background

The proposed class in Fischbein v. IQVIA Inc. consisted of more than 25,000 healthcare providers that allegedly received unsolicited fax advertisements from Defendant IQVIA Inc., a company that provides advanced analytics, technology solutions, and clinical research services to the life sciences industry. The class complaint contended that certain faxes for surveys administered by IQVIA were allegedly sent in violation of the TCPA which makes it “unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States . . . to use any telephone facsimile machine, computer, or other device to send, to a telephone or facsimile machine, an unsolicited advertisement.” Id. at 3.

The Court’s Decision

Parsing the plain language of the statute and interpretive case law in the Fourth Circuit, the District Court agreed with the Fourth Circuit finding that the statute was designed to only protect plaintiffs that received advertisements on stand-alone fax machines, rather than through online fax services. The statute states in relevant part that it is unlawful to “use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” See 47 U.S.C. § 227(b)(1)(C) (emphasis added). The statute further defines “telephone facsimile machine” as “equipment which has the capacity (A) to transcribe text or images, or both, from paper into an electronic signal and to transmit that signal over a regular telephone line, or (B) to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper.” See ECF No. 119, at 8 (citing § 227(a)(3) (emphasis added)). Plaintiffs submitted the testimony of an expert who opined that the phrase “regular telephone line” would include transmissions made by online services so long as it was regulated by the North American Numbering Plan Administrator. Id. at 8-9. But the Court found that this interpretation would “render superfluous” the word “regular” used as a modifier of “telephone line” in the statute. Id. at 9. In fact, the expert’s testimony contradicted his expert opinion as he conceded that “regular telephone line” means an “analog telephone line.” Id. The Court also noted that plaintiffs presented no evidence nor did they make any arguments that an online fax service has the ability on its own to either transcribe text or images “from paper” or “onto paper” as stated in the statute, further undermining plaintiffs’ argument that the statute was meant to include online fax transmissions. Id. at 10. Indeed, Plaintiffs’ expert conceded that such online fax services have the “capacity” to do this type of transcription only when connected to other devices like scanners or printers. Id. at 10. The Court acknowledged that its statutory interpretation was also supported by the Federal Communications Commission’s (“FCC”) declaratory ruling in In the Matter of Amerifactors Fin. Grp., LLC, 34 F.C.C. Rcd. 11950 (2019).

Applying this statutory interpretation, the Court found that the proposed class was not adequately ascertainable as plaintiffs could not point to common evidence to show that proposed class members received unsolicited ads through a stand-alone fax machine as opposed to an online service provider. Plaintiffs suggested that they could submit declarations from class members to ascertain that they fell under the scope of the class of plaintiffs the statute was designed to protect, but the Court found that declarations from potential class members “standing alone, without records to identify class members or a method to weed out unreliable affidavits” would not constitute a reliable or feasible means of determining class membership. See ECF No. 119, at 15 (internal citation and quotations omitted).

For similar reasons, the Court also found that the predominance element of class certification was not met as individual questions of whether the faxes at issue were received on a stand-alone fax machine or by way of an online fax service would predominate over questions common to the proposed class.

On June 20, 2025, plaintiffs filed a motion for reconsideration of the order denying class certification or, in the alternative, to certify a more narrowly-defined class (i.e. asking the Court to narrow the class definition to exclude people who used online fax services). This motion is pending before the Court.

Implications for TCPA Defendants

The Fischbein decision provides important points of attack for the defense bar on ascertainability and predominance grounds for TCPA classes by underscoring the importance of parsing class definitions in the TCPA context to ensure the modality of transmission of the alleged unsolicited advertisement can be determined on a class-wide basis and is limited to traditional fax machine communications.

August 7, 2025August 7, 2025 by Gerald L. Maatman, Jr.

New York Federal Court Rules EEOC Early Right to Sue Regulation Is Incompatible With Title VII In Post-Loper Bright Decision

By Gerald L. Maatman, Jr. and Christian J. Palacios

Duane Morris Takeaways: On July 30, 2025, Judge Eric Komitee of the U.S. District Court for the Eastern District of New York dismissed a plaintiff’s ADA discrimination lawsuit against her employer after finding that the plaintiff failed to satisfy the statutory 180-day waiting period before receiving a right-to-sue (“RTS”) letter from the EEOC. The case, Prichard v. Long Island University, Case No. 23-CV-09269 (E.D.N.Y. July 30, 2025), is significant because it represents one of the first applications of Loper Bright Enters. v. Raimondo, 603 U.S. 369, 401 (2024) (“Loper Bright”), where a court has held that an EEOC regulation is incompatible with the text of an employment discrimination statute. This ruling is a critical development for employers seeking to control the timing of when a plaintiff can bring a discrimination claim and marks the first of many challenges to the longstanding deference the Commission has enjoyed when interpreting employment discrimination statutes in a post-Loper Bright world.

Background and The EEOC’s Early RTS Regulation

Cecilia Prichard, a financial aid counselor at Long Island University (“LIU”), was terminated in 2022 after exhausting her FMLA leave following a kidney transplant. Id. at 1. Prichard filed a charge with the EEOC on July 24, 2023, alleging disability discrimination under the Americans with Disabilities Act (“ADA”). At her request, the EEOC issued an early RTS letter only 57 days later — well before the 180-day statutory waiting period elapsed.

With her early RTS letter in-hand, Prichard commenced her suit in New York federal court against her employer, alleging it violated the ADA, as well as other state-specific human rights laws. Id. at 3. LIU moved to dismiss, arguing that the early RTS letter was invalid and thus, Prichard had not satisfied the precondition to filing suit under Title VII. See 42 U.S.C. § 2000e-5(f)(1)

By way of context, the EEOC regularly issues “early” RTS letters upon a charging party’s request prior to the expiration of Title VII’s 180-day statutory waiting period if the Commission determines that it is probable it will “be unable to complete its administrative processing of the charge within 180 days from the filing of the charge.” See 29 C.F.R. § 1601.28(a)(2). This regulation, as well as other regulations promulgated by the Commission, have previously enjoyed longstanding “Chevron deference,” which required judicial deference for agency interpretations of vague laws. In the Supreme Court’s 2024 ruling in Loper-Bright, it eliminated “Chevron deference,” holding it was the courts, not agencies, that determined statutory meaning. Loper Bright at 401.

There is currently a circuit split regarding the Commission’s “early RTS” regulation, and it has been upheld as lawful by the Ninth, Eleventh, and Tenth Circuits (prior to Loper-Bright). See Saulsbury v. Wismer & Becker, Inc., 644 F.2d 1251 (9th Cir. 1980); Sims v. Trus Joist MacMillan, 22 F.3d 1059 (11th Cir. 1994); Walker v. United Parcel Serv., Inc., 240 F.3d 1268 (10th Cir. 2001). In contrast, the D.C. Circuit has invalidated the regulation while the Third Circuit has opined, in dicta, that early RTS letters should be discouraged as contrary to congressional intent. See Martini v. Federal Nat. Mortg. Ass’n, 178 F.3d 1336 (D.C. Cir. 1991); Moteles v. Univ. of Penn., 730 F.2d 913, 917 (3d Cir. 1984). The Second Circuit has not addressed this question, however as Judge Komitee observed in his ruling, district courts have decided this issue both ways. Prichard Order, at 5.

The Court’s Ruling

In a short, seven-page order, Judge Eric Komitee sided with LIU, concluding that the EEOC exceeded its statutory authority by issuing an RTS letter before the 180-day period had expired. As the Court observed, “Prichard’s assertion that deference is due the EEOC’s interpretation of the statute effectively urges this court to operate in a parallel universe in which Loper Bright had been decided the other way. No case that Prichard cites (or that the Court has identified) sided with the EEOC on textual grounds without according deference: they either deferred to the agency pre-Loper Bright, or relied primarily on policy considerations.” Id. at p. 7. The Court then “directed” the EEOC to reopen Prichard’s charge and granted Prichard leave to re-file once: (1) the Commission dismissed her claim; or (2) investigated for 123 more days and neither filed a lawsuit or entered into a conciliation agreement. Id.

Takeaway for Employers

The Prichard ruling illustrates the consequential impact of Loper Bright on employment discrimination litigation, specifically with respect to the Commission’s ability to interpret the employment discrimination statutes it is meant to enforce. Although the issue decided in Prichard is comparatively low stakes (given plaintiff’s lawsuit was ultimately dismissed without prejudice and she was granted leave to re-file), this ruling may be one of many where courts challenge other, more consequential EEOC regulations, in the absence of Chevron deference.

From a strategy perspective, employers may now be able to better control the timing of when plaintiffs bring their employment discrimination claims (ensuring they first exhaust the 180-day waiting period). Such a strategy carries with it, its own risks, however, and many employers welcome early RTS letters. In the event an employment discrimination charge is heavily investigated by the Commission, and the employer receives a request for information (“RFI”) from the EEOC, the employer may be forced to provide the complaining employee with wide-ranging “free discovery” that it would ordinarily be able to contest in court. Employers should evaluate such early RTS letters on a case-by-case basis and determine, as a matter of strategy, whether it makes sense to contest the lawsuit-permission letter, or simply litigate the matter in court.

August 7, 2025August 7, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 113: Attorneys’ Fee Awards In Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and special counsel Justin Donoho with their discussion of significant attorneys’ fee awards in class action litigation over the past 12 months.

Episode Transcript

Jerry Maatman: Thank you loyal blog listeners for joining us for this week’s installment of the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is special counsel Justin Donoho. Thanks for being on the podcast, Justin.

Justin Donoho: Great to be here. Thanks for having me.

Jerry: Today we have a little different topic. We’re going to be discussing significant attorneys’ fee awards in the class action space – sometimes known as mini litigation inside a class action. Justin, how are attorneys’ fees generally calculated to class counsel in a class action situation?

Justin: Sure. In federal courts, settlements are approved under Rule 23(h), which allows the court to award reasonable attorneys’ fees and nontaxable costs that are authorized by law or by the parties’ agreement. Courts typically use two methods: the percentage-of-the-fund method, common in “common fund” class actions, where attorneys receive a fraction – often 25 to 33% – of the settlement or judgment. There’s also the lodestar method, where fees are tied to hours worked times hourly rate, often with a multiplier for risk or complexity. Courts also use the lodestar as a reasonable cross-check. Courts must carefully assess fee requests to protect absent class members and weigh results, effort, risk assumed, and any class objections.

Jerry: Our Duane Morris Class Action Review surveys leading class action fee awards throughout the United States. What were some of the significant rulings in your mind over the past 12 months?

Justin: Well, in 2024 there were some record attorney paydays in high-stakes litigation.

In the In Re Syngenta AG MIR162 Corn Litigation, a $1.51 billion settlement between Syngenta and corn farmers resulted in an attorney fee award of $503 million.

In environmental class actions against 3M resolving lawsuits related to PFAS contamination in public drinking water systems, a $10.3 billion settlement generated an attorneys’ fee award of $840 million, one of the largest ever.

In a securities fraud shareholder litigation – just one more example – firms representing Dell investors secured a $267 million fee award from the $1 billion class settlement, which was later upheld by Delaware’s highest court.

Jerry: Well, suffice to say, 2024 was a banner year for the plaintiffs’ class action bar in taking down large fee awards. I know there was also a noteworthy fee award in the past month or so in the In Re College Athlete NIL Litigation, where $515 million in attorneys’ fees were awarded in various consolidated antitrust class actions. The court also found it reasonable to allow class counsel to apply for future fee awards in administering the settlement involving student at student athlete-benefits, which will add even more to that number.

What do you see here, Justin, in what’s going on?

Justin: That one you just talked about from just last month reflects a broader trend class action settlements of over $40 billion dollars for the third straight year, with 2024 totaling around $42 billion dollars. The size of settlements tends to scale attorneys’ fees dramatically.

Jerry: Now, there are some lawyers that police these agreements. They’re known as objectors. There are some serial objectors, professional objectors, legitimate objectors – what do you make of that space in terms of objections that are filed to these sorts of fee awards?

Justin: The objections matter. Objectors often challenge disproportionate fees, especially in no-cash or low-claim situations. However, as we discussed recently on the Duane Morris Class Action Defense Blog, the Third Circuit in In Re Wawa Data Security Litigation approved a $3.2 million class fee award for class counsel finding that fees can be based on relief made available to the class and does not have to be capped by a percentage of the relief actually claimed in low-harm data breach security class actions where the claim rate is notoriously low. The Third Circuit also held that clear sailing agreements and fee reversions are not per se impermissible and, rather, there must be evidence of collusion or harm to class members to invalidate a fee award on that basis.

Jerry: In terms of sitting at the mediation table and trying to bring home a settlement for a company in the class action space, do you have any thoughts for companies in terms of negotiating out attorneys’ fee awards?

Justin: Certainly. It’s important to understand how percentage-of-fund and lodestar methods play out based on settlement type and jurisdiction. Parties negotiating settlements should prepare for objector scrutiny, especially around any clear sailing terms and reversions. And it’s necessary to recognize that record-breaking settlements are driving fee awards into the hundreds of millions or close to billions. These cases illustrate just how large and complex class attorneys’ fee awards can get.

Jerry: Well, great thoughts and analysis, Justin. Certainly true that these massive settlements are driving the cottage industry of huge attorneys’ fee awards that we’re probably going to see in 2025 and beyond. So, thanks so much listeners for joining us for this week’s Class Action Weekly Wire.

Justin: Thanks for having me on the podcast and thanks to the listeners.