November 2025 – Class Action Defense

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

The EEOC Can Chart Its Own Path: Why The EEOC’s Latest “Win” Is Good News For Employers

By Gerald L. Maatman, Jr., Adam D. Brown, and Elizabeth G. Underwood

Duane Morris Takeaways: On November 25, 2025, in Cross v. EEOC, No. 1:25-CV-3702, 2025 WL 3280764 (D.D.C. Nov. 25, 2025), Judge Trevor N. McFadden of the U.S. District Court for the District of Columbia dismissed an Amazon delivery driver’s lawsuit against the EEOC. The lawsuit alleged that the EEOC illegally halted investigations of disparate impact claims following an executive order from President Trump. The district court’s ruling is at least a short-term win for employers, demonstrating that a plaintiff who is not the subject of an EEOC action cannot easily resort to the federal courts to challenge the internal investigation and enforcement policies that caused the EEOC not to pursue theories of employer liability. The “win” is likely the first in a series of challenges to the EEOC’s stance on disparate impact litigation.

Case Background

The plaintiff in this case, Leah Cross, who worked as Amazon delivery driver for several months in 2022, was fired after she failed to satisfy Amazon’s delivery quota requirements. In May 2023, Cross filed a sex-based charge of discrimination against Amazon with the Colorado Civil Rights Division, asserting violations of Title VII and Colorado state law.

Cross contended that Amazon’s delivery quotas and resulting bathroom limitations had a disparate impact on female Amazon employees. Specifically, she alleged, Amazon enforced excessively high delivery quotas, which forced delivery drivers to forgo bathroom breaks. According to Cross, this disparately impacted female delivery drivers because of their differing personal needs relative to male drivers.

In January 2024, the EEOC’s Denver office began investigating the charge. But in April 2025, President Trump issued Executive Order 14281 titled “Restoring Equality of Opportunity and Meritocracy,” which instructed federal agencies to deprioritize enforcement of antidiscrimination laws based on disparate impact theories of liability. That Executive Order also specifically directed the EEOC to examine all pending investigations of such claims and take appropriate action consistent with the new enforcement priorities.

In September 2025, the EEOC issued a memorandum requiring staff to close all investigations of disparate impact claims, which included Cross’s claims. Thereafter, Cross filed a lawsuit against the EEOC, alleging that she “ha[d] been denied the benefit of a full investigation” by the Commission. Cross v. EEOC, No. 1:25-CV-3702, 2025 WL 3280764, at *3 (D.D.C. Nov. 25, 2025).

Cross claimed the EEOC’s memorandum violated § 706(2) of the Administrative Procedure Act, arguing that: (1) the Commission acted contrary to Title VII and the Age Discrimination in Employment Act by “selectively exclud[ing] categories of discrimination from the charge-investigation process;” (2) the Commission acted arbitrarily and capriciously in abruptly changing its policy; (3) the Commission’s memorandum constituted a substantive rule that was “in excess of statutory jurisdiction, authority, or limitations”; and (4) the Commission should have promulgated its memorandum through proper notice-and-comment rulemaking procedures. Id. Therefore, Cross sought a preliminary injunction requesting, among others, for her investigation to be reopened.

The Court’s Opinion

The Court held Cross failed to establish that she had standing to bring her claims and thus dismissed Cross’s claims for lack of subject-matter jurisdiction, without addressing them on the merits. To remedy Cross’s alleged injuries, the Court suggested that Cross could pursue a Title VII action directly against Amazon.

The Court determined that Cross did not show any judicially cognizable injury from the EEOC’s closure of her investigation. Moreover, the Court opined that “even if that were the kind of injury capable of judicial resolution, Cross has not shown that a favorable ruling by this Court would redress that injury.” Id. at *1.

The Court explained that “federal courts are ‘not the proper forum for resolving claims that the Executive branch’ should ‘bring more’ investigations and enforcement actions.” Id. at *4 (quoting United States v. Texas, 599 U.S. 670, 680 (2023)). Under applicable case law recognizing this principle, the Court held, because Cross was not the subject of an EEOC enforcement action, she lacked standing to challenge the agency’s investigation and enforcement decisions.

Implications For Companies

The Court’s ruling is a win for companies, confirming that federal courts currently are not willing to interfere with the EEOC’s internal investigation and enforcement policies regarding disparate impact claims. Even more broadly, the Court’s order reinforces the substantial deference federal courts grant the EEOC in its internal decision-making processes, which could cut in different directions depending on the enforcement priorities and policies of a particular executive branch or EEOC leadership regime.

Crucially, however, employers are not in the clear. Companies still should be proactive and continue to audit regularly their hiring and employment practices for potential disparate impact, which remains unlawful under both federal and state laws notwithstanding any vacillation in EEOC policy. While the EEOC may choose to deprioritize pursuing disparate impact claims, a charging party who receives a Notice of Right to Sue letter still can file a private lawsuit in reliance on longstanding precedent regarding disparate impact.

November 26, 2025November 26, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 128: Illinois Federal Judge Certifies Class Of 1.2 Million Amazon Alexa Users In BIPA Class Action

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and senior associates Hayley Ryan and Tyler Zmick with their analysis of an Illinois federal court decision granting class certification in a BIPA suit alleging unlawful collection of biometric voice data.

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

Episode Transcript

Jerry Maatman: Thank you, loyal blog readers and listeners, for joining us again for this week’s edition of the Class Action Weekly Wire. I’m Jerry Maatman, a partner with Duane Morris, and joining me today are my colleagues Hayley Ryan and Tyler Zmick. Thanks so much for being here.

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

Hayley Ryan: Glad to be here, Jerry. Thanks so much.

Jerry: Today, we’re diving into a major ruling from the U.S. District Court for the Northern District of Illinois, entitled Gundersen v. Amazon.com. It’s a lawsuit against Amazon regarding the Alexa Voice ID feature and alleges violation of the Illinois Biometric Information Privacy Act, known by the acronym BIPA. Let’s start with the basics. Hayley, what exactly is Voice ID?

Hayley: Sure. Amazon’s Alexa has been around for a while, but since October 2017, it’s included a feature called Voice ID. This feature essentially trains Alexa to recognize a specific user’s voice. Users go through an enrollment process in the Alexa app, where they read several prompted phrases, which are called “utterances,” so Alexa can “learn” their voice and later personalize responses. The plaintiffs in this case alleged that this process creates a “voiceprint,” which counts as a biometric identifier under the BIPA. And the BIPA strictly regulates the collection, storage, sale, and disclosure of biometric data.

Jerry: As I understand it, the plaintiffs in the case allege that Amazon never told users of Alexa that the system would be creating or storing biometric “voiceprints.” Was that the gravamen of the claim?

Tyler: Exactly right. So, the prompts that were presented to the plaintiffs mentioned “Voice ID,” and the prompts also authorized Amazon to “create, use, improve, and store your Voice ID,” but the plaintiffs, who had all enrolled in Voice ID, alleged that those prompts failed to satisfy BIPA because they never used the specific statutory terms “voiceprint,” “biometric identifier,” or “biometric information.”

Jerry: Thanks for that explanation, Tyler. Can you walk our listeners through the exact allegations at issue in the lawsuit under BIPA, and what the plaintiffs claimed were violations?

Tyler: Sure. So, plaintiff sued Amazon under three sections of BIPA. The first one is Section 15(b) of BIPA for alleged collection of biometric data, specifically voiceprints, without providing the required written disclosures and obtaining the plaintiffs’ informed written consent. Number two, plaintiffs allege that Amazon violated Section 15(c) for allegedly profiting from the biometric data. And finally, plaintiffs alleged a violation of Section 15(d) for allegedly disclosing biometric data without the plaintiff’s consent. And, as I’m sure many people know, BIPA also gives plaintiffs a private right of action where they can recover $1,000 in statutory damages per negligent violation, or $5,000 in statutory damages per reckless or intentional violation. When you have potentially more than one million Illinois Voice ID users, which is the size of the class in this case, the damages can add up pretty quickly.

Jerry: As I read the opinion, the plaintiffs sought certification of a class defined as “all natural persons in Illinois for whom Amazon created a voiceprint on or after June 27, 2014,” and in terms of $5,000 per class member and over a million – obviously a whopper of a class. Let’s talk about how the court handled the Rule 23 analysis with respect to the plaintiffs’ motion for class certification.

Hayley: Sure, Jerry. Well, the court first found that the proposed class easily met the numerosity requirement, since Amazon admitted that about 1.18 million Alexa users with Illinois billing addresses enrolled in Voice ID between 2017 and 2023. And the court also determined that the plaintiffs’ proposed class met the commonality requirement of Rule 23, because everyone went through the same enrollment process, got the same disclosures, and the questions, such as whether Voice ID creates a biometric identifier, applied across the board.

Jerry: Rule 23(a)(3), of course, deals with typicality, and that seemed to me where the opinion got very interesting in terms of the court’s analysis.

Hayley: Yes, definitely, Jerry. The court actually rejected the named plaintiff Gunderson as a class representative, because he enrolled in Voice ID years after the lawsuit had already been filed, meaning that being a named plaintiff, he knew, or should have known, that enrollment would create a voiceprint. That opened him up to unique defenses like waiver or ratification. And the court said that those unique defenses could become a “major focus” of litigation, making him an atypical class representative.

Tyler: That said, the court did accept plaintiffs Block and Stebbins as typical representatives. So, Mr. Block enrolled in Voice ID before he was ever involved in the case, and the court said that Amazon’s arguments about his professional relationship in prior cases with plaintiffs’ counsel were too speculative. The court also found that Mr. Stebbins’ claims were typical to those of the class, even though Amazon attacked his credibility based on inconsistencies in his deposition testimony. The court said that nothing in the testimony rose to the level that would harm the class.

Jerry: Seemed to me the discussion and analysis of typicality bled into the discussion of adequacy, and here the court ran through usual topics of concern, including conflicts of interest, relationships with class counsel, and the credibility of the named plaintiff.

Hayley: Right, Jerry. And ultimately, the court found Mr. Block and Mr. Stebbins adequate class representatives, but not Mr. Gunderson. The court also noted that continuing to use Voice ID or not deleting it did not make the plaintiffs inadequate class representatives. That applied uniformly across users.

Jerry: Let’s move on to the Rule 23(b) requirements. Inasmuch as predominance is usually the make-or-break-it issue for certification in BIPA cases, how did the court rule on 23(b)(2)?

Tyler: That’s a great question, Jerry. The court found predominance satisfied for all three of the BIPA claims. The court stated that whether Voice ID creates a “voiceprint” was a common question that applied to all class members and also whether Amazon’s disclosures satisfied BIPA’s notice requirements also involved a common question, because the disclosures were identical for everyone in the class. Regarding the Section 15(c) and Section 15(d) claims, the plaintiffs said that they would prove that Amazon’s data sharing practices violated BIPA through common evidence, which the court accepted at this stage. Interestingly, Amazon also tried to argue that the class was not ascertainable, because BIPA does not apply to Voice ID users who were not physically in Illinois during enrollment and Amazon noted that the evidence did not definitively show whether a user was, in fact, in Illinois at that time. But the court ruled that plaintiffs presented enough evidence that Amazon’s internal records can determine the state that a user was in at the time of enrollment. So, ultimately, the court rejected Amazon’s extraterritoriality argument against class certification.

Hayley: And as to the superiority requirement of Rule 23 , the court ruled that with 1.2 million potential class members, a class action would be a far more efficient method of adjudication, as opposed to millions of individual lawsuits.

Jerry: Well, this certainly constitutes a major development in biometric privacy class action litigation, insofar as it is an order that certifies perhaps the largest class in the state of Illinois, and even in the United States, over the past year. Our Duane Morris Class Action Review of 2026, due out in the first week of January, will analyze all the opinions throughout the United States, and has a special BIPA appendix chapter that will talk about this ruling and others. Before we wrap up today, any predictions as to this case and what we will see in terms of ongoing BIPA litigation in Illinois?

Tyler: So, I think for one, in this case, Amazon will likely lean heavily into the argument that Voice ID does not create a voiceprint under BIPA, especially at summary judgment, so that is very much a merits argument that Amazon tried to raise at class certification. But the court declined to hear that argument because it went to the merits rather than class certification-related issues. I think Amazon will likely also seek to appeal the class certification order up to the Seventh Circuit.

Hayley: Yeah, I agree with you, Tyler, and I also expect more litigation in other jurisdictions, given the rise of voice-activated technology, such as cars, appliances, smart TVs – you name it. BIPA is still the strictest law, but it’s not the only one anymore.

Jerry: Well, thanks so much, and great insights and thought leadership from you both, Hayley and Tyler. And thank you, listeners, for joining us for today’s discussion about the largest BIPA class certification order of 2025. We’ll be sure to keep you up to date and informed of all developments involving this and other BIPA and privacy class actions. Happy Thanksgiving, everyone, and thanks for being here.

Hayley: Thanks for having me on the podcast, Jerry, and thanks to the listeners for being here.

Tyler: Thanks, everyone!

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

California Court Of Appeal Affirms Dismissal Of Standalone PAGA Action Because A Prior Global Settlement Precluded Overlapping Claims

By Gerald L. Maatman, Jr., Jennifer A. Riley, and George J. Schaller

Duane Morris Takeaways: On November 19, 2025, in Brown v. Dave & Buster’s of Cal., Inc., Case No. B339729, 2025 Cal. App. LEXIS 750 (Cal. App. Nov. 19, 2025), the California Court of Appeal for the Second Appellate District affirmed a trial court’s decision granting judgment on the pleadings that barred a standalone PAGA plaintiff’s claims for lack of standing and due to a prior global settlement with overlapping claims.

In an important decision for all employers in California, the Court of Appeal recognized a prior PAGA settlement fully encompassed and released the standalone plaintiff’s claims as to all defendant entities. Accordingly, the Court of Appeal affirmed the trial court order finding that the plaintiff did not have standing to sue and her claims were barred by claim preclusion.

Case Background

Lauren Brown worked for Dave & Buster’s of California, Inc. and Dave & Buster’s Inc. (collectively “Buster’s”) in its Westchester restaurant location from November 2016 to April 2018. Id. at *1-2.

In June 2019, Brown filed a standalone representative action under the Labor Code Private Attorneys General Act (“PAGA”) against Buster’s and alleged Buster’s “failed to provide meal periods, rest periods, vacation pay, and wage statements . . . and routinely required employees to work off-the-clock.” Id. at *2.

Buster’s filed a demurrer to abate/stay, or in the alternative, a motion for discretionary stay, and argued that Brown’s action “was between the same parties on the same cause of action in at least two previously-filed actions” in Espinoza v. Dave & Buster’s Management Corporation, Inc., Los Angeles County Superior Court Case No. BC710345, and Lopez v. Dave & Buster’s of California, Inc., et al.,San Diego County Superior Court Case No. 37-2018-00054080-CU-OE-CTL. See Brown, 2025 Cal. App. LEXIS 750at *2. In October 2019, the trial court found Brown’s case was “‘substantially identical’ to the Espinoza action” and sustained Buster’s demurrer and stayed the case. Id.

Buster’s, in February 2020, filed a statement with the trial court concerning additional information on earlier-filed PAGA actions. Buster’s statement included “when each case was filed, when the other plaintiffs submitted their requisite notices to the Labor and Workforce Development Agency (Agency), and which claims overlapped with Brown’s.” See id. at *3. Buster’s disclosed Rocha v. Dave & Buster’s Management Corporation, Inc., Santa Clara County Superior Court Case No. 19CV348961, and Andrade v. Dave & Buster’s Management Corporation, Inc., San Diego County Superior Court Case No. 37-2019-00019561-CU-OE-CTL (“Andrade”). See Brown, 2025 Cal. App. LEXIS 750at *3.

On April 1, 2022, the Andrade parties entered into a long-form settlement agreement with all three Buster’s entities, including those that Brown sued. Included in the released claims was “failure to pay accrued vacation pay at the end of employment, including but not limited to claims under the California Labor Code.” The released claims specifically cited § 227.3 of the California Labor Code regarding vacation pay. Id. at *4-5.

The plaintiff in Andrade moved for settlement approval, showing she notified the Agency of her motion and settlement agreement. The Agency accepted the settlement and did not oppose it. On November 4, 2022, the San Diego Superior Court granted approval of the Andrade settlement. Id.

In April 2023, the parties in Brown’s action notified the court that the Andrade action had settled. Brown alleged there “might not be complete overlap with Andrade as to her unpaid vacation claim, but she was still checking on this issue.” Id. at *4.

Thereafter, in June 2023, Buster’s moved for judgment on the pleadings and argued the Andrade settlement released all of Brown’s claims and that claim preclusion barred Brown’s lawsuit. Id. Buster’s supported its motion with various documents from the Andrade action, including the pre-filing notice to the Agency on May 13, 2019, the Andrade complaint filed on November 14, 2019 (which omitted a vacation pay violation), the amended notice letter to the Agency on February 3, 2022, and the corresponding amended complaint filed in Andrade on March 10, 2022. The amended notice to the Agency added a vacation pay claim, under § 227.3, and added the named defendants in Brown’s case. Id. at *4.

Brown opposed Buster’s motion and asserted she had standing to bring all claims in her PAGA letter because Buster’s violated her rights under the Labor Code. Citing LaCour v. Marshalls of Cal., LLC, 94 Cal. App. 5th 1172 (2023), Brown maintained because the Andrade plaintiff failed to exhaust her claims before the Agency, “she was therefore not deputized to pursue and settle the Labor Code violations in [Andrade’s] amended complaint.” See Brown, 2025 Cal. App. LEXIS 750at *5. Brown also noted the plaintiff in Andrade waited 35 days between sending her amended pre-filing notice and filing her complaint in court, and therefore, the Andrade settlement did not apply to Brown’s §227.3 vacation pay claims against the Buster’s entities Brown sued. Id.

The trial court granted Buster’s motion without written comment, dismissed Brown’s complaint with prejudice, and entered judgment in favor of Buster’s. Thereafter, Brown appealed. Id. at *5-6.

The California Court of Appeal’s Decision

The Court of Appealaffirmed the trial court’s decision, finding Brown lacked standing, claim preclusion barred Brown’s PAGA claims, and the Andrade plaintiff’s failure to wait 65 days to file her amended complaint was a “harmless defect” where the Agency had an opportunity to object to the Andrade global settlement and did not do so.

At the outset, the Court of Appealopined Brown identified no error from the trial court decision and determined Brown “effectively concede[d]” the Andrade settlement resulted in a final judgment on the merits and did not bar her non-vacation pay claims. Id. at *6. The Court of Appealsimilarly rejected Brown’s argument that she had standing to pursue Labor Code violations after November 4, 2022, the date after court approval of the Andrade settlement, because her employment with Buster’s ended in 2018. Id. at *6-7.

The Court of Appealconsidered the sole issue as — “did Andrade’s failure to adhere strictly to the 65-day waiting period for her amended claims defeat Buster’s claim preclusion argument?” Id. at *7. In determining this question, the Court of Appealexplained § 2699.3 of the Labor Code provides “if the Agency does not respond within 65 calendar days of an aggrieved employee providing it with written notice, ‘the aggrieved employee may commence a civil action.’” The crux of the Court of Appeal’sdecision centered on Andrade’s amended complaint which was filed “fewer than 65 days after her amended notice to the Agency.” Id.

The Court of Appealreasoned claim preclusion “bars a new lawsuit if the first case had (1) the same cause of action; (2) between the same parties, or parties in privity; and (3) a final judgment on the merits” and noted the doctrine “promotes judicial economy by requiring all claims based on the same cause of action that were or could have been raised to be decided in a single suit.” Id.

Brown argued LaCour, 94 Cal.App.5th 1172 (2023), controls and suggested the Court of Appealfind the Andrade settlement “does not bar her vacation pay or reach the Buster’s defendants in [Brown’s] case because [the] Andrade [plaintiff] filed her second amended complaint only 35 days after submitting her amended presuit notice to the agency.” See Brown, 2025 Cal. App. LEXIS 750at *7-9. The Court of Appeal interpreted Brown’s reliance on LaCour to suggest the plaintiff in Andrade “was never authorized to pursue the additional vacation pay claim and new defendants in her amended complaint” which would necessarily encompass Brown. Id. at *9.

Buster’s contended LaCour is “‘completely inapposite’ and factually distinguishable” given “Andrade’s initial notice letter, initial complaint, amended notice letter, and amended complaint ‘expressly include all of Brown’s alleged Labor Code violations such that they encompass Brown’s entire PAGA claim.’” Buster’s additionally contended “Andrade’s failure to abide by the 65-day waiting period is a technicality” and “not dispositive as to the issue of administrative exhaustion under PAGA.” Id.

The Court of Appealdetermined on the “administrative exhaustion issue, LaCour does not apply” and California’s Supreme Court has described “PAGA’s statutory pre-filing notice requirement as a ‘condition of suit.’” Similarly, the Court of Appealreasoned the purpose of PAGA’s pre-filing notice requirement is to afford “the Agency ‘the opportunity to decide whether to allocate scare resources to an investigation…’” Id. at *11. It explained “[n]othing in the statute’s language or any published case law suggests the 65-day waiting period also applies to amended notices and complaints.” Id. Accordingly, the Court of Appealfound “Andrade’s failure to wait 65 days was a harmless defect” and the “Agency accepted Andrade’s global settlement with Buster’s after it had an opportunity to object.” Id. at *12.

In sum, the Court of Appeal held “Andrade’s settlement fully encompassed and released Brown’s claims as to all Buster’s entities, thus satisfying all elements of claim preclusion” and affirmed the trial court’s decision.

Implications For Employers

Employers facing PAGA litigation can rely on Brown for support that prior settlements have a preclusive effect where, as here, the prior settlement and second lawsuit have overlapping claims.

Brown also supports the proposition that PAGA’s 65-day notice waiting period requirement for filing suit may not apply to amended PAGA notices. In another win for employers, the Court of Appeal found the plaintiff in Brown could not recover for periods after she left the company in 2018 – thereby limiting the scope of PAGA penalties further.

Given the myriad issues employers defend against in PAGA litigation, this decision signals an important strategic consideration in defending overlapping PAGA actions. Employers when faced with multiple PAGA actions must consider the sequencing of PAGA settlements and whether an already settled PAGA action can create a preclusive effect barring a separate PAGA action.

November 24, 2025November 24, 2025 by Justin Donoho

Gen AI Key Decisions and Trends in 2025

By Justin Donoho

Duane Morris Takeaway: Available now is the recent article in the Legal Intelligencer by Justin Donoho entitled “Gen AI Class Action Key Decisions and Trends in 2025.” The article is available here and is a must-read for corporate counsel involved with gen AI technologies.

This year has been a busy one in the generative artificial intelligence (gen AI) class action litigation landscape. New pleadings were filed, including several new class actions, several consolidated and amended complaints, and one appeal. Several key decisions were issued, including a trio that formed a three-way split of authority on how to determine whether training a gen AI model on copyrighted materials constitutes “fair use” under the Copyright Act. Additionally, one humongous settlement was reached. Additional notable decisions issued in 2025 in gen AI class actions include a decision denying class certification on the basis of the class definition being defined as a “fail-safe” class, dispositive decisions defining the contours of claims alleging that gen AI developers violated the Digital Millenium Copyright Act, a decision on the copyrightability of voice in the context of voice cloning technology, and multiple additional decisions on motions to compel, further clarifying the scope of documents that may or may not be discoverable in gen AI class actions. This article analyzes these key decisions and trends.

Implications For Corporations

With gen AI continuing to proliferate and the current presidential administration continuing the prior administration’s policy goals of sustaining and enhancing America’s global AI dominance, gen AI litigation is multiplying. We should expect to see an upward trend of key decisions and new cases in the remainder of this year and beyond as this burgeoning area of the law continues to unfold.

November 23, 2025November 23, 2025 by Gerald L. Maatman, Jr.

Illinois Supreme Court Imposes Stricter Standing Test For “No-Injury” Class Actions Premised On Statutory Violations

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

Duane Morris Takeaways: In Fausett v. Walgreen Co., 2025 IL 131444 (Nov. 20, 2025), the Illinois Supreme Court narrowly construed the private right of action set forth in the federal Fair Credit Reporting Act (FCRA), holding that because the FCRA does not explicitly authorize consumers to sue for violations, the law does not authorize individual lawsuits unless a consumer shows that a violation caused a concrete injury. Thus, at least for FCRA actions, a plaintiff must now allege a “concrete injury” in Illinois state courts similar to what a plaintiff must allege to establish Article III standing in federal courts. This is a significant development, as Illinois courts have not previously required “concrete-injury” allegations for statutory claims under the state’s more liberal standing test.

Fausett is therefore a must-read opinion that represents an obstacle for future plaintiffs pursuing “no-injury” claims premised on the FCRA, in addition to other federal statutes containing similar private rights of action.

Case Background

Plaintiff alleged that Defendant violated the Fair and Accurate Credit Transactions Act (FACTA) – a provision of the FRCA – by printing a receipt containing more than the last five digits of her debit card number. Plaintiff sought statutory damages for the alleged FACTA violation, though she did not claim the violation led to actual harm by, for example, a third party using the receipt to steal her identity.

Plaintiff moved to certify a class of individuals for whom Defendant printed receipts containing more than the last five digits of their payment card numbers. In granting class certification, the trial court rejected Defendant’s argument that Plaintiff had no viable claim due to lack of standing. The trial court reasoned that Illinois courts are not bound by the same jurisdictional restrictions applicable to federal courts and that the Illinois Supreme Court’s decision in Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186, established that “a violation of one’s rights afforded by a statute is itself sufficient for standing.” Fausett, 2025 IL 3237846, ¶ 15. The Illinois Appellate Court affirmed the trial court’s class certification order, and Defendant subsequently appealed to the Illinois Supreme Court.

The Illinois Supreme Court’s Decision

The issue before the Illinois Supreme Court was whether standing existed in Illinois courts for a plaintiff alleging a FACTA violation that did not result in actual harm.

The Court began by distinguishing the standing doctrines applied in Illinois state courts vs. federal courts. The Court observed that Illinois courts are not bound by federal standing law and that Illinois standing principles apply to all claims pending in state court – even those premised on federal statutes.

The Court then identified the two different types of standing that exist in Illinois courts, including: (1) common-law standing, which – like Article III – requires an injury in fact to a legally recognized interest; and (2) statutory standing, which requires the fulfillment of statutory conditions to sue for legislatively created relief. See id. ¶ 39 (for statutory standing, the legislature creates a right of action and determines “who shall sue, and the conditions under which the suit may be brought”) (citation omitted). The Court further noted that a statutory violation, without actual harm, can establish statutory standing only where the statute specifically authorizes a private lawsuit for violations.

Turning to Plaintiff’s FACTA lawsuit, the Court determined that Plaintiff’s claim could not invoke statutory standing because the FCRA’s liability provisions “fail to include standing language. In other words, Congress did not expressly define the parties who have the right to sue for the statutory damages established in FCRA.” Id. ¶ 40; see also id. ¶ 44 (“the plain and unambiguous language” of the FCRA “does not state the consumer or an aggrieved person may file the cause of action”). Thus, because the FCRA is “silent as to who may bring the cause of action for damages,” Plaintiff’s FACTA claim “does not implicate statutory standing principles, and thus common-law standing applies to plaintiff’s suit.” Id.

As for common law standing, the Court concluded that Plaintiff’s claim did not satisfy Illinois’s common law standing test, under which an alleged injury, “whether actual or threatened, must be: (1) distinct and palpable; (2) fairly traceable to the defendant’s actions; and (3) substantially likely to be prevented or redressed by the grant of the requested relief.” Id. ¶ 39 (quoting Petta v. Christie Business Holdings Co., P.C., 2025 IL 130337, ¶ 18). The injury alleged must also be concrete – meaning that a plaintiff alleging only a purely speculative future injury lacks a sufficient interest to have standing.

The Court held that Plaintiff failed to allege or prove a concrete injury because she conceded that she was unaware of any harm to her credit or identity caused by the alleged FACTA violation, and she could not identify anyone who had even seen her receipts “beyond the cashier, herself, and her attorneys.” See id. ¶ 48. Thus, Plaintiff could only show an increased risk of identity theft – something the Court has found to be insufficient to confer standing for a complaint seeking money damages. Because Plaintiff lacked a viable claim due to lack of standing, the Court held that the trial court abused its discretion in granting Plaintiff’s motion for class certification.

Implications Of The Fausett Decision

Fausett will impact FCRA class actions in a significant manner by precluding plaintiffs from bringing certain “no-injury” class actions in Illinois state courts. Federal courts have regularly dismissed such claims for lack of Article III standing based on the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016).

Fausett now forecloses plaintiffs from refiling the same claims in Illinois state courts, leaving plaintiffs without a venue to prosecute no-injury FCRA claims in Illinois. Importantly, the Fausett decision will likely reach beyond the FCRA context, as other federal consumer-protection statutes contain liability provisions with private-right-of-action language similar to the language found in the FCRA.

November 20, 2025November 20, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 127: California Federal Judge Overrules Objections To The NCAA’s $2.78 Billion NIL Class Action Settlement

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and special counsel Samson Huang with their analysis of recent developments in the $2.78 billion settlement between the NCAA and college athletes to resolve name, image, likeness (“NIL”) compensation claims.

Episode Transcript

Jerry Maatman: Thank you, loyal blog listeners, for joining us again for this week’s edition of the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today from Los Angeles is my colleague, Samson Huang. Thanks very much for being on the podcast.

Samson Huang: Great to be here, Jerry. Thanks for having me.

Jerry: Today, we’re here to discuss a recent court ruling relating to settlement approval of a ginormous class action involving the NCAA and the Power Five conference members, requiring them to pay $2.8 billion worth of damages, characterized as “back pay,” to compensate student-athletes for the denial of name, image, and likeness – known as NIL – opportunities under prior NCAA eligibility rules. The settlement class, subject to certain exclusions, includes all D1 student-athletes who competed from 2016 to the present. Compensation will be distributed to account for the lost NIL, video game, and broadcast-related opportunities that were previously restricted under the NCAA rules.

The new compensation model will mirror elements, I believe, of professional sports leagues – perhaps marking the end of the era of “amateurs” in college athletics. But the settlement faced some legal impediments and challenges for objectors. Samson, what’s the latest from the courthouse as to what’s going on with this particular settlement approval process?

Samson: Sure, thanks, Jerry. The court’s recent order addressed seven separate objections filed by incoming members of the Injunctive Relief Settlement Class following the July 23, 2025, notice. Under the Settlement Agreement, these class members could object within 60 days of receiving notice. The objections were heard on November 6, 2025, and the court ultimately rejected every objection.

Jerry: Let’s, unpack that a little bit and talk about some of the specific objections, beginning with Katherine Ernst of Vanderbilt University. As I understand it, she had asserted some objections challenging the treatment of various benefits in the revenue-sharing pool cap, and objecting to the release of claims subject to the distribution in the Gross Settlement Fund.

Samson: That’s right, and the court ultimately rejected the arguments as duplicative of issues already addressed by the court in the final approval order. Ernst also raised new objections related to Title IX compliance and her school’s distribution of revenue-sharing payments, requesting court-imposed modifications to the Injunctive Relief Settlement.

Jerry: I thought it was interesting because the judge emphasized that it lacked authority to, in essence, rewrite the settlement agreement, which is what the Vanderbilt student issued. It cited a chestnut of Ninth Circuit caselaw, Hanlon v. Chrysler Corporation, in terms of the ability of a district court to review and approve or reject a class action settlement. So, in this particular situation, the Title IX claims were not released, and athletes may bring those claims independently, as I understand it.

Samson: Yes, that’s right, Jerry. And also, Ernst additionally asserted that adequacy of representation was lacking, because none of the named plaintiffs are actually current student-athletes. However, the court reiterated its prior holding that the named plaintiffs share the same overarching interest as all class members of securing a more competitive labor market for college athletes. Moreover, the court has since appointed Miller Moss, who is an active D1 athlete, as an additional class representative, so the concern wasn’t really a concern for the court.

Jerry: Another objection I found interesting was from a student-athlete from Liberty University in Lynchburg, Virginia, Gracelyn Laudermilch, and she had argued that class counsel, in essence, was asleep at the wheel, refused to assist her in filing objections and, thereby, that rendered class counsel inadequate. How did the court react to that particular challenge?

Samson: Well, the court rejected the theory. The court explained that class counsel do not represent objectors, and objectors may appear pro se representing themselves, or they may hire independent counsel. But that does not implicate the adequacy of Class Counsel’s representation during settlement negotiations. Laudermilch also argued that the roster-limits provisions were adopted without adequate input from the named plaintiffs. However, the court found no support for that contention in the record. Named plaintiff Grant House provided a declaration confirming regular consultation with Class Counsel during negotiations. And statements attributed to him on a podcast were not actually before the court. Laudermilch further challenged the adequacy of the notice program, asserting that children as young as eight years old should receive notice of the settlement because they may one day participate in D1 athletics. The court rejected that position as well, finding that Rule 23 and due-process standards require notice that is reasonable and practical, and it is not feasible to identify future athletes who have not yet been recruited. The approved notice program, in which incoming D1 athletes receive notice upon joining their teams, was found by the court to be fully adequate.

Jerry: Well, I teach youngsters and coach them in Little League baseball, and that would be something for an 8-year-old to walk up to me and say, ‘Mr. Maatman, I just got a notice from the court,’ so we’ll see how that works. I also thought that this particular athlete had challenged the roster-limit provisions on the grounds that athletes with DSA status were being cut, and the court held that she lacked standing because she herself had not been cut. And additionally, the DSA status had been intended to guarantee roster spots, but actually all it did is exempt affected athletes from roster limits when transferring to other D1 programs, and that raised another objector, and that was Reid Macdonald of Long Island University, who argued he was cut from the lacrosse team at his university, but not granted DSA status. How did the court react to that particular challenge?

Samson: Well, the court found that even assuming that his factual claims were accurate, that actually reflected a school-specific issue, and did not justify halting the nationwide settlement. The settlement required schools to identify DSAs in good faith, and to submit those lists to class counsel, who may address any inaccuracies.

Jerry: I know the final four objectors were from Cal Poly State University, and they were on the diving and swimming team, and their programs were eliminated after the university opted in. How did the court treat their objections?

Samson: Well, each objector argued that the Injunctive Relief Settlement caused or incentivized the program cuts, thereby harming their athletic opportunities and, in one case, the student’s athletic scholarship. Several objectors also raised concerns about Title IX compliance. Again, the court rejected each objection on the same basis. Essentially, D1 schools have always retained discretion to allocate financial resources and eliminate sports programs, and nothing in the injunctive relief settlement requires or encourages team cuts. Therefore, any injury resulting from program elimination stems from each institution’s own choice, not from the settlement. The court also reiterated that it cannot and does not have the power to modify the settlement to impose Title IX compliance mechanisms. And, because Title IX claims were not being released under the settlement, any affected athletes may pursue those claims separately.

Jerry: Pretty remarkable that a $2.8 billion settlement with extensive, injunctive relief was approved. Judge left it in place, it certainly represents a seismic shift in the regulation of college athletics and formalizes a compensation model for student athletes and introduces robust oversight with NIL activity. Remains to be seen if eighth graders on Little League baseball teams get a notice and what they do with it, but certainly quite a ruling when it comes to settlement approval orders in 2025.

Samson: Absolutely, Jerry, and colleges, collectives, and student-athletes must now carefully navigate this evolving regulatory environment. Institutions should consult with counsel to address these considerations and develop strategies, including draft template agreements, that adequately address all of these considerations to optimally position institutions to comply with and profit from this new opportunity.

Jerry: Well, thanks so much, Samson, for joining us on this week’s Class Action Weekly Wire, and breaking down a very complex yet important settlement. As our readers know, Chapter 20 of the Duane Morris Class Action Review contains an analysis of settlement approval rulings throughout federal and state courts and class actions over the past year. And by far and away, this one is one of the most complex and most significant in terms of what we’re going to discuss in that chapter – our book being launched in the first week of January of 2026. So, thank you, Samson, and thank you, all our listeners, for joining us this week.

Samson: Thanks, Jerry, it was a pleasure.

November 19, 2025November 19, 2025 by Gerald L. Maatman, Jr.

Duane Morris Class Action Review Cited In Three U.S. Supreme Court Briefs

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

Duane Morris Takeaways: On October 15, 2025, in Eli Lilly & Co., et. al. v. Richards, et al., No. 25-476 (U.S. Oct. 17, 2025), Eli Lilly & Co. filed a Petition For Writ Of Certiorari after a decision by the U.S. Court of Appeals for the Seventh Circuit which created a four-way circuit split as to the proper interpretation of 29 U.S.C. § 216(b). This petition drew briefing from several amici curiae, including the U.S. Chamber of Commerce and the CHRO Association.

Similarly, when the U.S. Court of Appeals for the Ninth Circuit decision widened that circuit split to include five different methodical approaches in Cracker Barrel Old Country Store, Inc. v. Andrew Harrington, et al., No. 25-559 (U.S. Nov. 5, 2025), Cracker Barrel also filed a Petition For A Writ of Certiorari.

Significant for readers of this blog, both petitioners and amici also cited the Duane Morris Class Action Review as the authoritative source on FLSA certification statistics and the widening circuit split regarding when it is appropriate to send notice to would-be plaintiffs, under 29 U.S.C. § 216(b) in a Fair Labor Standards Act (“FLSA”) collective action.

In its review of our practice group’s resource, Employment Practices Liability Consultant Magazine (“EPLiC”) said, “The Duane Morris Class Action Review is ‘the Bible’ on class action litigation and an essential desk reference for business executives, corporate counsel, and human resources professionals.” EPLiC continued, “The review is a must-have resource for in-depth analysis of class actions in general and workplace litigation in particular.

With the submission of our analysis to the U.S. Supreme Court, we are humbled and proud to be cited as the authoritative source in the class action space.

The Briefing In Richards And Harrington

Both Cracker Barrel and Eli Lilly correctly argued in their petitions that “the circuits are split five ways in how to interpret” Section 216(b) and the case law in this area “is in total disarray.” Both petitions ask the U.S. Supreme Court to help organize this “disarray.” As such, a brief guide through these disjointed methodological approaches is included below.

First, there is the familiar and lenient two-step standard in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), which was expressly adopted by the U.S. Court of Appeals for the Second Circuit, Scott v. Chipotle Mexican Grill, Inc., 954 F.3d 502, 515 (2d Cir. 2020), and “acquiesced to . . . without express adoption” by the First, Third, Tenth, and Eleventh Circuits. Kwoka v. Enterprise Rent-A-Car Company of Boston, LLC, 141 F.4th 10, 22 (1st. Cir. 2025); Zavala v. Wal Mart Stores Inc., 691 F.3d 527, 534 (3d Cir. 2012); Thiessen v. Gen. Elec. Cap. Corp., 267 F.3d 1095, 1105 (10th Cir. 2001); Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001)

Under the Lusardi approach, at step one, a plaintiff moves for conditional certification, relying solely on his or her allegations, and not competing evidence submitted by the employer. If the employee’s motion is granted, would-be plaintiffs receive notice of the lawsuit and then have the ability to opt-in as party plaintiffs to the case and participate in discovery. At the close of discovery, the employer can then move to decertify the conditionally certified collective action, and prove the employees are not similarly situated with the benefit of discovery and evidence.

Second, in Campbell v. City of Los Angeles, 903 F.3d 1090, 1114 (9th Cir. 2018),the Ninth Circuit adopted a variation of the Lusardi two-step approach but also required the plaintiff to show he or she is similarly situated to his or her fellow employees in “some material aspect of their litigation” and not just similar in some sort of irrelevant way, but the plaintiff may rely on mere allegations to make that showing.

Third, the Fifth Circuit in Swales v. KLLM Transp. Servs., LLC, 985 F.3d 430, 443 (5th Cir. 2021), rejected Lusardi’s two-step approach outright, and required its district courts to “rigorously enforce” the FLSA’s similarity requirement at the outset of the litigation in a one-step approach. “[T]he district court needs to consider all of the available evidence” at the time the motion is filed and decide whether the plaintiff has “met [his or her] burden of establishing similarity.” Id. at 442-43.

Fourth, the Sixth Circuit in Clark v. A&L Homecare & Training Ctr., LLC, 68 F.4th 1003 (6th Cir. 2023), adopted a comparable standard to Swales requiring the employee to show a “strong likelihood” that others are similarly situated to him or her before the district court can send notice, but leaving open the possibility of the employer filing a motion for decertification down the line. Clark, 68 F.4th at 1011.

Fifth, the Seventh Circuit in Richards, et al. v. Eli Lilly & Co, et al., 149 F.4th 901 (7th Cir. 2025), rejected the Lusardi framework but declined to go as far as Clark or Swales. Instead, the Seventh Circuit approach requires “a plaintiff must first make a threshold showing that there is a material factual dispute as to whether the proposed collective is similarly situated” to secure notice and an employer “must be permitted to submit rebuttal evidence” for the court to consider. Richards, 149 F.4th at 913. But, there is not a bright line rule as to whether the court should decide the similarly situated question in a one or two step approach as the analysis is not an “all-or-nothing determination.” Id. at 913-914.

Sixth, as correctly noted by counsel for Cracker Barrel, the U.S. Courts of Appeal for the D.C., Fourth, and Eighth Circuits have not yet opined on the proper interpretive method, leaving their district courts free to choose among the available options.

Duane Morris Class Action Review Citations

It should go without saying that these issues are complicated, and employers are looking to experienced practitioners to help them navigate this procedural morass. For that reason, both petitioners and the amici curiae turned to the Duane Morris Class Action Review, and its authors, as the authoritative source in support of their petitions.

The first citation is found in Eli Lilly’s petition for writ of certiorari, which cites Avalon Zoppo, Circuit Split Widens on Judicial Approach to Sending FLSA Collective Action Notices, Nat. L. J. (Aug. 11, 2025), regarding the proper interpretation of Richards, following the Seventh Circuit’s decision in that case. In that article, Gerald L. Maatman, Jr., Chair of the Duane Morris Class Action Defense Group, stated “[t]he [Seventh Circuit’s] holding is going to reverberate and have a huge impact on wage and hour litigation throughout the United States.”

The second citation can be found in Cracker Barrel’s petition, following the Ninth Circuit’s holding in Harrington, which cites directly to the Duane Morris Class Action Review for varying conditional certification rates under this patchwork quilt of legal standards. Indeed, in the 2024 and 2025 editions of the Duane Morris Class Action Review, our analysis showed that: (1) the federal circuit courts that follow or acquiesce to Lusardi grant conditional certification at rates of 84%; (2) the Ninth Circuit grants conditional certification at rates of approximately 71% under the lenient-plus approach; and (3) the remaining Fifth, Sixth, and Seventh Circuits, with varied stricter standards, granted certification at rates approximating 67%. The petition further noted our finding that only approximately 10% of conditionally certified FLSA collective actions reach the decertification stage.

The third citation is found in the U.S. Chamber of Commerce and the CHRO Association’s amicus brief which relies on the Duane Morris Class Action Review for the proposition that “motions for conditional certification . . . are granted in a large majority of [FLSA] cases.” Looking at the statistics, the amici highlight “[i]n 2024, district courts granted 80% of motions seeking court-ordered notice” with “Plaintiffs enjoy[ing] similar success in past years”

These U.S. Supreme Court practitioners and defense counsel are not alone as others refer to the Duane Morris Class Action Review as “the Bible” on class action litigation. It is also relied on by some of the world’s largest plaintiffs’ firms and federal judges, see, e.g., Laverenz v. Pioneer Metal Finishing, LLC, 746 F. Supp. 3d 602, 614 (E.D. Wis. 2024). The Duane Morris Class Action Review is the “one stop shop” and authoritative source on collective action certification rates, collective action trends and analysis, and the implications, pressures, and contours that parties face when engaged in FLSA collective action litigation.

Implications For Employers

Although the petitioners are still briefing their petitions, it is clear that the myriad approaches adopted by the federal circuit courts are ripe for some clarity from the U.S. Supreme Court, which would hopefully provide a roadmap for district courts to assess collective actions uniformly.

Further, the framework for when and how to send notice under Section 216(b) are not the only issues presented by these petitions. Eli Lilly expressly invited the U.S. Supreme Court to overturn Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165 (1989) and plaintiff-appellee in Harrington would also have the high court decide whether Bristol-Myers Squibb Co. v. Sup. Ct. of Cal., 582 U.S. 255 (2017) applies to collective actions, which we blogged about here.

Because these questions, and many others, remain in flux and unanswered, employers should monitor this blog for updates as it is a trusted source for companies, defense counsel, plaintiffs’ firms, federal judges, and U.S. Supreme Court practitioners alike. We will be following these petitions as they unfold.

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

Third Circuit Affirms Dismissal Of CIPA Adtech Class Action Because A Party To A Communication Cannot Eavesdrop On Itself

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

Duane Morris Takeaways: On November 13, 2025, in Cole, et al. v. Quest Diagnostics, Inc., 2025 U.S. App. LEXIS 29698 (3d Cir. Nov. 13, 2025), the U.S. Court of Appeals for the Third Circuit affirmed a ruling of the U.S. District Court for the District of New Jersey’s in dismissing a class action complaint brought by website users against a diagnostic testing company alleging that the company’s use of website advertising technology violated the California Invasion of Privacy Act (“CIPA”) and California’s Confidentiality of Medical Information Act (“CMIA”).

The ruling is significant because it confirms two important principles: (1) CIPA’s prohibition against eavesdropping does not apply to an online advertising company, like Facebook, when it directly receives information from the users’ browser; and (2) the CMIA is not triggered unless plaintiffs plausibly allege the disclosure of substantive medical information.

Background

This case is one of a legion of nationwide class actions that plaintiffs have filed alleging that third-party technologies (“adtech”) captured user information for targeted advertising. These tools, such as the Facebook Tracking Pixel, are widely used across millions of consumer products and websites.

In these cases, plaintiffs typically assert claims under federal or state eavesdropping statutes, consumer protection laws, or other privacy statutes. Because statutes like CIPA allow $5,000 in statutory damages per violation, plaintiffs frequently seek millions, or even billions, in potential recovery, even from midsize companies, on the theory that hundreds of thousands of consumers or website visitors, times $5,000 per claimant, equals a huge amount of damages. While many of these suits initially targeted healthcare providers, plaintiffs have sued companies across nearly every industry, including retailers, consumer products companies, universities, and the adtech companies themselves.

Several of these cases have resulted in multimillion-dollar settlements; others have been dismissed at the pleading stage (as we blogged about here) or at the summary judgment stage (as we blogged about here and here). Still, most remain undecided, and with some district courts allowing adtech class actions to survive motions to dismiss (as we blogged about here), the plaintiffs’ bar continues to file adtech class actions at an aggressive pace.

In Cole, the plaintiffs alleged that the defendant diagnostic testing company used the Facebook Tracking Pixel on both its general website and its password-protected patient portal. Id. at *1-2. According to the plaintiffs, when a user accessed the general website, the Pixel intercepted and transmitted to Facebook “the URL of the page requested, along with the title of the page, keywords associated with the page, and a description of the page.” Id. at *2-3. Likewise, when a user accessed the password-protected website, the Pixel allegedly transmitted the URL “showing, at a minimum, that a patient has received and is accessing test results.” Id. at *3.

Plaintiffs asserted that these transmissions constituted (1) a CIPA violation because the company supposedly aided Facebook in “intercepting” plaintiffs’ internet communications, and (2) a CMIA violation because the company allegedly disclosed URLs associated with webpages plaintiffs accessed to view test results along with plaintiffs’ identifying information linked to users’ Facebook accounts. Id. at *3.

The company moved to dismiss, and, in separate orders, the district court dismissed both claims. See 2024 U.S. Dist. LEXIS 116350; 2025 U.S. Dist. LEXIS 7205.

As to the CIPA claim, the district court found that CIPA “is aimed only at ‘eavesdropping, or the secret monitoring of conversations by third parties,’” and that Facebook was not a third party because it received information directly from plaintiffs’ browsers about webpages they visited. 2025 U.S. Dist. LEXIS 7205, at *7-8 (quoting In Re Google Inc. Cookie Placement Consumer Privacy Litig., 806 F.3d 125, 140-41 (3d Cir. 2015)). As to the CMIA claim, the district court found that plaintiffs alleged only that the company disclosed that a patient accessed test results but not what kind of medical test was done or what the results were. 2024 U.S. Dist. LEXIS 116350, at *15. Accordingly, the district court held that plaintiffs failed to allege the disclosure of “substantive” medical information as required under the CMIA. Id.

Plaintiffs appealed both rulings.

The Court’s Decision

The Third Circuit affirmed. Id. at *1.

On the CIPA claim, the Third Circuit explained that “[a]s a recipient of a direct communication from Plaintiffs’ browsers, Facebook was a participant in Plaintiffs’ transmissions such that [the company] did not aid or assist Facebook in eavesdropping on or intercepting such communications, even if done without the users’ knowledge.” 2025 U.S. App. LEXIS 29698, at *6. With no eavesdropping, “Plaintiffs’ CIPA claim was properly dismissed.” Id. at *7.

On the CMIA claim, the Third Circuit explained that “at most, Plaintiffs alleged that [the company] disclosed Plaintiffs had been its patients, which is not medical information protected by CMIA.” Id. at *8. Thus, the Third Circuit held that the district court properly dismissed the CMIA claim. Id. at *9.

Implications For Companies

Cole offers strong precedent for any company defending adtech class action claims (1) brought under CIPA’s eavesdropping provision where the third-party adtech company directly receives the information from users’ browsers and (2) brought under the CMIA where the alleged disclosure merely shows that a person was a patient, without revealing any substantive information about the person’s medical condition or test results.

The latter point continues to appear across adtech class actions. Just as the plaintiffs in Cole failed to plausibly allege the disclosure of substantive medical information, courts have dismissed similar claims where plaintiffs allege disclosure of protected health information (“PHI”) without actually identifying what PHI was supposedly shared (as we blogged about here). These decisions reinforce that adtech plaintiffs must identify the specific medical information allegedly disclosed to plausibly plead claims under the CMIA or for invasion of privacy.

November 13, 2025November 13, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 126: California Federal Court Slashes $28 Million Attorneys’ Fee In $150 Million Securities Fraud Class Action Settlement

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Daniel Spencer with their analysis of a California federal judge’s decision to reject a $28 million attorney fee request as part of a $150 million securities fraud class action settlement.

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, loyal blog listeners and readers, for being here again with us for the next episode of our weekly podcast, The Class Action Weekly Wire. I’m Jerry Maatman of Duane Morris, and joining us today is Daniel Spencer, my colleague and partner from Duane Morris’ Los Angeles office. Welcome, Daniel.

Daniel Spencer: Thanks, Jerry. Great to be here.

Jerry: Today we’re talking about a pretty seminal ruling of a settlement and an attorneys’ fee award in litigation entitled In Re Zoom Securities Litigation in the Northern District of California. This was a case where the court gave preliminary approval to a $150 million settlement, but then during the final approval hearing took a hard look at a very hefty attorneys’ fees request from class counsel, whereby they asked for $28 million, or roughly 18.75% of the settlement fund. This would have translated into a multiplier under pertinent case law of over 10 times the amount of time actually spent. The court called this problematic. What’s your take on this, Daniel, from your viewpoint in practicing law in California?

Daniel: I’ll tell you, Judge Donato did not mince words on this one. He described the hourly rate of roughly $7,900 an hour as an “eye-watering figure”, commenting that it had no place in a straightforward securities class action. Instead, he went with the lodestar method, applied a multiplier of four, which is still pretty generous, and awarded $10.4 million in fees, plus an additional $262,000 in costs.

Jerry: So, this was a securities fraud class action brought under Section 10(b) of the Exchange Act and Rule 10b-5 of the SEC about Zoom allegedly misleading investors about its security practices. But the judge emphasized when considering the fee petition, that as class actions go, this one settled fairly quickly with a minimum of risk and toil, and that discovery was limited and actually no depositions had been taken, no motion for class certification was filed, no expert reports were produced, and there was no summary judgment practice.

Daniel: Yeah, that’s exactly right. And class counsel had reported approximately 3,500 hours of work, which is not insignificant, but the judge compared it to other work wherein the same firm had invested over 43,000 hours handling complex motions, depositions, and trial prep, and still received a 2.5 multiplier on its lodestar. So, here they wanted four times that multiplier for a much lighter workload.

Jerry: The judge made a very important statement about a principle that I think is key to class action jurisprudence, and that is that the court, when reviewing a settlement or reviewing a petition for attorneys’ fees, has in essence a fiduciary obligation to the class to protect them, especially where a defendant makes no objection to the plaintiffs’ application for an award of attorneys’ fees. As the judge put it, there’s a “heightened duty to peer into the provision and scrutinize it closely.” Was this an aberrational ruling, or is this something front and center in class actions in California?

Daniel: It’s absolutely front and center, and I’ll tell you that the judge reminded everyone that the courts have a duty to guard against these type of windfall profits in these megafund cases or those with settlements exceeding $100 million. In doing so, he stressed that the 25% benchmark that they’re used to seeing is simply not appropriate for those types of situations. 18.75% of $150 million, he said, would produce exactly the kind of disproportionate result the Ninth Circuit had warned against in similar settlements.

Jerry: The judge also touched upon something known in the law as the percentage of recovery factors that analyzes the results achieved, the risks to the lawyers, the non-monetary benefits accorded to the class, and the contingency nature of the case. And the judge said while this was a solid outcome, it wasn’t exceptional. The case didn’t break new legal ground or face unusual challenges, and the benefit to the class was entirely monetary and the risks were fairly routine for this sort of case.

Daniel: And that’s exactly right. The judge also pointed out that plaintiffs’ counsel’s own billing showed barely five hours spent on the class certification and notice, which is pretty extraordinary for a securities case. His takeaway was that 18.75%, which was requested, was a formulaic application of the benchmark. In megafund settlements, the court’s got to guard against that mechanical percentage that yield windfalls. The judge used the lodestar method and applied a generous multiplier of four, set the fee at $10,419,000, and also directed that 75% or about $7.8 million could be paid immediately with the remaining 25% to be held pending the post-distribution accounting. So even with a multiplier of four, every timekeeper down the line was effectively being compensated at $2,900 per hour, which is more than a healthy rate by any measure.

Jerry: In this case, class counsel also sought a service award for the lead plaintiff of $48,750. Most of the class action settlements we see, the service awards are around $5,000 to $12,000. How did the court come out on the request for the service award here?

Daniel: Yeah, so in this one, he relied directly on the Private Securities Litigation Reform Act, which prohibits incentive awards for lead plaintiffs in securities cases. A lead plaintiff can only recover reasonable costs and expenses, including lost wages. The declaration that plaintiff filed in support of that said he spent about 75 hours on the case and valued that at about $650 an hour. The court found no evidence tying that number to any actual costs or outcome.

Jerry: So, Daniel, what’s the big picture here for corporate practitioners when they’re looking at class action settlements or at the mediation table negotiating a class action resolution?

Daniel: So, really two lessons that you can take away from this case. First, don’t treat the 25% benchmark as a given, especially in these megafund settlements. And second, expect the judges to go through a rigorous lodestar cross-check, even in cases that are resolved efficiently. Judges are going to expect to see a clear correlation between the hours worked, complexity handled, and the fees requested by plaintiffs’ counsel.

Jerry: Well said, and thank you for your take on this case, Daniel. And thanks to our listeners for being here today. We’ll be breaking down this settlement and others in our upcoming Duane Morris Class Action Review scheduled for publication in the first week of January of 2026. So, thank you, Daniel, and thanks for all our listeners being with us today on our podcast.

Daniel: Thanks, Jerry. It’s a pleasure to be here.

November 11, 2025November 11, 2025 by Gerald L. Maatman, Jr.

Greetings From Texas: Annual ABA Conference On Class Action Litigation

By Gerald L. Maatman, Jr.

Duane Morris Takeaways: Recently we had the privilege of attending this year’s annual ABA conference on class action litigation. Cutting-edge issues under Rule 23 were the focus of discussion among session leaders and attendees. The consistent theme is that case law precedents are in a state of constant flux – and the “new normal” is “change…”

Key cutting-edge issues are summarized below in terms of top-class action issues for 2025.

Data Breach Class Actions

The focal point in class actions over data breaches is discovery of consultant work in the aftermath of a breach and whether the work product is privileged or not. Plaintiffs’ advocates asserted that discovery of facts is always allowed and that companies have complete control over the technology environment when remediation efforts are undertaken in the wake of a data breach. Defense proponents contended that such consulting expert work is a prime example of protected work product. Case law, however, is somewhat all over the lot and data breach litigation is increasing in scope and complexity.

This issue underscores what class action practitioners agreed upon – data breach class actions are exceedingly complex, raises vexing choice-of-law issues under state law, and are challenging in terms of managing the litigation process.

Trials In Class Actions

Once a rarity, trials in class actions are beginning to become more mainstream. A panel session on trying a class actions discussed how challenging such a trial is given the stakes and financial exposures in “big” lawsuits.

As an adjunct professor of law at Northwestern, I teach trial advocacy. The skillsets taught in my law school class resonated in this session – have an “elevator” presentation for the jury that boils down the complexities of the case into an easily understood explanation of the plaintiffs’ theories and the defendant’s defenses. Both plaintiffs and defense lawyers agreed that the ability to craft an effective “elevator” speech pays dividends in the successful prosecution and/or defense of a class action in a trial setting.

As a federal judge on the panel advised, “less is more” in terms of trying a complex dispute in a manner that engages the attention of a jury (and a judge).

Unresolved Rule 23 Issues

While many areas of class-wide ligation are in flux, the number one issue prompted agreement from all practitioners – the unresolved issue from Lab. Corp. v. Davis on the impact of uninjured class members on class certification and damages models prepared by experts in class cases. The “uninjured class member” issue continues to drive diverse outcomes and uncertainty relative to the concepts of Article III standing and predominance under Rule 23(b)(3).

Attendees agreed that the issue is ripe for U.S. Supreme Court review after the dismissal of the certiorari grant for jurisdictional issue in Lab. Corp.

Collective Action Certification Standards

The standard for conditional certification of a collective action under the Fair Labor Standards Act is in flux. In essence, there are four distinct standards depending on what circuit law applies. The majority standard is based on Lusardi v. Xerox Corp., 99 F.R.D. 89 (D.N.J. 1983).

For decades, many federal courts have relied on the two-step Lusardi approach for collective action certification. Under the Lusardi standard for conditional certification, plaintiffs only had to make a “modest factual showing” that they were victims of a common illegal policy or plan. Most courts applying this standard refused to weigh evidence or consider opposing evidence presented by the defendant. Such lenient notice standards allow plaintiffs to expand the size of a wage & hour lawsuit, significantly increasing pressure to settle, regardless of the action’s actual merits.

In the past four years, the Fifth and Sixth Circuit Courts of Appeal have found that Lusardi’s two step approach is inconsistent with the text of the FLSA. Swales v. KLLM Transp. Servs., LLC, 985 F.3d 430 (5th Cir. 2021); Clark v. A&L Homecare & Training Ctr., LLC, 68 F.4th 1003 (6th Cir. 2023). In Swales, 985 F.3d at 443, the Fifth Circuit rejected Lusardi’s two-step approach outright, and required its district courts to “rigorously enforce” the FLSA’s similarity requirement at the outset of the litigation in a one-step approach. Similarly, in Clark, 68 F.4th at 1011, the Sixth Circuit adopted a comparable, but slightly more lenient standard, requiring the employee to show a “strong likelihood” that others are similarly situated to him or her before the district court can send notice.

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. Harrington v. Cracker Barrel Old Country Store, Inc., 142 F.4th 678 (9th Cir. 2025); Thiessen v. Gen. Elec. Cap. Corp., 267 F.3d 1095 (10th Cir. 2001); Myers v. Hertz Corp., 624 F.3d 537 (2d Cir. 2010); Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208 (11th Cir. 2001).

The Seventh Circuit, in a recent opinion written by Judge Thomas Kirsch, rejected the Lusardi framework but declined to go as far as Clark or Swales. The Seventh Circuit observed that the notice process should be facilitated by three guiding principles: (1) the timing and accuracy of notice; (2) judicial neutrality; and (3) the prevention of abuses of joinder. Richards v. Eli Lilly, 2025 U.S. App. LEXIS 19667, at *14 7(th Cir. Aug. 5, 2025). It reasoned that the Lusardi standard threatened the latter two principles by “incentivizing defendants to settle early rather than attempt to ‘decertify’ at step two . . . transforming what should be a neutral case management tool into a vehicle for strongarming settlements and soliciting claims.” Id. at * 17. Thus, the Seventh Circuit rejected Lusardi, but what to do in the alternative was a more difficult question.

The Seventh Circuit decided that rather than endorse the rigid standards of Clark or Swales, its approach would be guided by “flexibility” and an analysis that is not an “all-or-nothing determination.” Id. at *19. Indeed, a plaintiff must now “make a threshold showing that there is a material factual dispute as to whether the proposed collective is similarly situated.” Id. at *21. Or, in other words, a plaintiff must “produce some evidence suggesting that they and the members of the proposed collective are victims of a common unlawful employment practice or policy.” Id, at *21-22. To counter a plaintiff’s evidence, an employer “must be permitted to submit rebuttal evidence and, in assessing whether a material dispute exists, courts must consider the extent to which plaintiffs engage with opposing evidence.” Id. at *22. It is not clear, however, the burden a plaintiff must satisfy to refute the defendant’s evidence to move forward.

This brewing circuit split suggest that U.S. Supreme Court review is necessary to resolve this important issue.