Andrew P. Quay – Class Action Defense

May 27, 2026May 27, 2026 by Gerald L. Maatman, Jr.

North Carolina Federal Court Highlights “Severe And Pervasive” Requirement Under Title VII In Denying Partial Motion To Dismiss A Pattern or Practice Claim Brought By The EEOC

By Gerald L. Maatman, Jr., Denis I. Yavorskiy, and Andrew P. Quay

Duane Morris Takeaways: On May 19, 2026, in EEOC v. Recovery Innovations, Inc. d/b/a RI Int’l, No. 25-CV-767, 2026 U.S. Dist. LEXIS 110782 (E.D.N.C. May 19, 2026), Judge Terrence W. Boyle of the U.S. District Court for the Eastern District of North Carolina denied a partial motion to dismiss a Title VII pattern or practice claims after finding that the EEOC’s complaint properly pled “severe or pervasive” harassment and sufficiently described a group of similarly aggrieved female employees. Id. at *4, 5. Judge Boyle held that alleged unwelcome conduct from a supervisor who supervised “at least some of the” allegedly injured workers was “sufficiently severe or pervasive” and that the universe of alleged victims was sufficiently described without identifying the alleged victims. Id.

The decision reinforces the importance of authoritative conduct and the leniency afforded to plaintiffs and the EEOC in bringing pattern or practice claims on behalf of alleged victims of discrimination.

Case Background

Defendant Recovery Innovations operates the Dix Crisis Intervention Center in Jacksonville, North Carolina. Id. at *1, 2. The Jacksonville center provides outpatient services for mental health disorders and substance abuse. Id. at *2. Recovery Innovations hired Chiara Munna as a “Peer Support Specialist” at the Jacksonville center. Id. Munna’s shift supervisor allegedly made “repeated sexual comments to the women under his supervision, touched them sexually, and sent at least two of them unwelcome sexual text messages and photos.” Id.

The EEOC filed suit on behalf of Munna and a group of similarly aggrieved female employees, asserting claims for: (1) sex harassment and hostile work environment under Title VII; (2) failure to accommodate under the ADA; (3) discriminatory discharge under the ADA; and (4) ADA record keeping violation under the ADA. Id. The Title VII claim is brought on behalf of Munna and “similarly aggrieved women.” Id. Recovery Innovations moved to dismiss the Title VII claims on behalf of the group of workers but not those brought on Munna’s behalf individually. Id.

The complaint alleges that Munna’s shift supervisor “engaged in unwelcome and offensive conduct ‘on nearly every occasion’ the [workers] encountered him,” including repeatedly insisting on “hugging them, elicit[ing] physical contact by impeding their paths or cornering and intimidating them, mak[ing] unwelcome sexual comments,” and sending sexually explicit photos of himself to at least two class members, among other misconduct. Id. at *4.

The Court’s Analysis

Recovery Innovations raised two arguments in its motion to dismiss. Its “chief argument” in support of dismissal was that the complaint failed to allege “severe and pervasive” harassment. Id. Recovery Innovations’ second argument was that the complaint “insufficiently describes” the group of allegedly injured workers, as it did not provide sufficient notice of “when the harassment occurred or precisely what unwelcome conduct each [worker] suffered.” Id. Judge Boyle rejected both of these arguments and denied Recovery Innovations’ partial motion to dismiss the Title VII pattern or practice claims.

First, as to Defendant’s “severe and pervasive” argument, Judge Boyle held that the alleged conduct was “sufficiently severe or pervasive to alter the class members’ conditions of employment” because “‘a supervisor’s power and authority invests his or her harassing conduct with a particularly threatening character.’” Id. at *4, 5 (quoting Boyer-Liberto v. Fontainebleau Corp., 786 F.3d 264, 278 (4th Cir. 2015)).

Second, as to Defendant’s argument that the complaint insufficiently describes the group of alleged victims, Judge Boyle found that “[a]n EEOC complaint brought on behalf of a [group of victims] is not . . . ‘deficient for failing to identify the numerous alleged victims of discrimination.’” Id. at *5 (quoting EEOC v. PBM Graphics Inc., 877 F. Supp. 2d 334, 347 (M.D.N.C. 2012)). In addition, because the complaint alleged that the alleged victims reported the supervisor’s conduct to the facility’s program supervisor, Recovery Innovations received “fair notice” of the “time frame and scope” of the workers at issue. Id.

Having found that the complaint adequately pled “severe or pervasive” harassment and sufficiently described the group of aggrieved female employees, Judge Boyle denied Recovery Innovations’ partial motion to dismiss. Id.

Implications For Employers

Recovery Innovations shines light on the “severe or pervasive” standard under Title VII when applied to a supervisor’s alleged conduct, as well as the pleading leniency surrounding claims that encompass alleged victims of discrimination. Corporate counsel should implement and update training for managerial employees regarding sexual misconduct to make every effort to avoid Title VII pattern or practice claims.

May 13, 2026May 13, 2026 by Gerald L. Maatman, Jr.

Wisconsin Federal Court Remands Privacy Class Action Lawsuit Based On Lack Of No Injury From Google Analytics Data Tracking

By Gerald L. Maatman, Jr., Bernadette M. Coyle, and Andrew P. Quay

Duane Morris Takeaways: On May 1, 2026, in Brahm, et al. v. Hospital Sisters Health System, et al., No. 23-CV-444, 2026 U.S. Dist. LEXIS 96866 (W.D. Wis. May 1, 2026), Judge William M. Conley of the U.S. District Court for the Western District of Wisconsin remanded a putative class action to state court after finding that Plaintiffs lacked Article III standing to pursue claims that healthcare defendants’ use of Google Analytics on patient portals resulted in unauthorized disclosure of protected health information (“PHI”) to Google. Id. at *2-3. The Court held that Plaintiffs’ lack of evidence of actual harm, together with their theory of future harm, was insufficient to confer standing. Id. at *3. The decision reinforces the growing trend among federal courts requiring proof that disclosed data was actually used to identify individuals, not merely that such identification was theoretically possible.

Case Background

The Defendant healthcare companies operate public websites and authenticated MyChart patient portals as “MyHSHS” and “MyPrevea,” which allow patients to log in with a username and password to access their medical records, schedule appointments, and pay bills. Id. at *4. Between at least 2016 and 2023, Defendants deployed Google Analytics tracking technology on their public websites, within patient portals on their websites, and on MyPrevea’s login page and app. Id. at *6. Whenever a user visits Defendants’ websites or portals, Google Analytics gathers information about the user’s interactions and shares certain transmissions with Google. Id. at *7.

Plaintiffs asserted that Google Analytics routinely disclosed patients’ identities and protected health care information to third-party websites like Google without the patients’ knowledge or consent. Id. at *1. Plaintiffs alleged that they began seeing Facebook advertisements related to their specific medical conditions after visiting Defendants’ portals or websites. Id. at *5. However, Plaintiffs also searched about their medical conditions or treatment online and have had their personal information involuntarily exposed to third parties by entities unrelated to the litigation. Id. None of the Plaintiffs had ever tried or intended to sell their PHI, nor did they claim to have suffered any out-of-pocket expenses as a result of Defendants’ allegedly wrongful disclosures. Id. at *10. Nonetheless, they sought actual damages based on the alleged “diminished sales value of their PHI,” as well as statutory and nominal damages. Id.

Plaintiffs alleged claims for violation of federal and state wiretapping statutes, as well as Wisconsin common and statutory laws for breach of duty of confidentiality, breach of implied contract to protect privacy, public disclosure of private facts, and unjust enrichment. Id. at *3. Plaintiffs moved to certify four subclasses, while Defendants moved for summary judgment as to all claims. Id.

The Court’s Opinion

The Court addressed the “threshold question” of Article III standing on its own initiative, noting that Defendants’ summary judgment motion called Plaintiffs’ standing into question and standing “is jurisdictional and cannot be waived” and must be “secured at each stage of the litigation.” Id. at *12. While the Court had previously allowed the original named Plaintiff to proceed past the motion to dismiss stage because it found her allegations of injury sufficient at the pleading stage, the Court explained that with a full record at the summary judgment stage, Plaintiffs failed to present sufficient evidence of a concrete injury-in-fact on multiple grounds. Id.

First, as to Plaintiffs’ tort claims for invasion of privacy and breach of fiduciary duty, the Court found no evidence from which a reasonable jury could conclude that their patient identity or PHI was actually disclosed to Google, disclosed by Google, or used by Google inappropriately. Id. at *17. Plaintiffs’ evidence did not establish that any of the disclosed anonymous information was actually used by Google or another third party to identify them. Id.

Despite Plaintiffs’ expert opining that Google’s systems had the “technical capability and documented practice” of linking information to specific individuals, the Court determined that the capabilities of Google’s systems were insufficient to demonstrate what it actually did. Id. at *19. Further, Plaintiffs failed to proffer evidence showing that Defendants caused Plaintiffs’ PHI to be shared, as opposed to other third parties or Plaintiffs themselves through their own voluntary internet disclosures. Id. at *20.

Relying on the Seventh Circuit’s decision in Dinerstein v. Google, LLC, 73 F.4th 502 (7th Cir. 2023), the Court emphasized that Plaintiffs “must still present sufficient evidence that Google Analytics actually worked as allegedly intended, which they have failed to do in this case,” and therefore, Plaintiffs failed to show a concrete injury to support standing under Article III. 2026 U.S. Dist. LEXIS 96866, at *23. The risk of Google or other third parties identifying Plaintiffs at a later date by leveraging the data obtained from Defendants was “not sufficiently imminent to obtain relief in federal court.” Id.

Second, as to the breach of implied contract claim, the Court found that Plaintiffs lacked standing because their asserted pecuniary harm based on the diminished sales value of their PHI or nominal damages, without any actual harm, was an injury in law and not an injury-in-fact as required by Article III. Id. at *24-25.

Third, Plaintiffs alternatively asserted unjust enrichment, arguing that Defendants retained without compensation Plaintiffs’ PHI and then disclosed this information to third parties for Defendants’ own gain. Id. at *26. However, the Court found that without any evidence of improper disclosure, Plaintiffs’ alleged pecuniary injury was “simply speculative and insufficient to confer standing.” Id. at *27.

Fourth, the wiretapping claims likewise failed. Although Plaintiffs sought statutory damages, the Court held that a statutory violation on its own does not confer standing without an underlying concrete, particularized injury. Id. at *28 (citing TransUnion LLC v. Ramirez, 594 U.S. 413, 427 (2021)).

Having found that Plaintiffs lacked standing as to all claims, the Court remanded the case to Wisconsin state court for further proceedings. Id.

Implications For Companies

Brahm reinforces that plaintiffs challenging tracking technology must present actual evidence identifying what allegedly private information was disclosed and cannot rely on abstract and speculative alleged injuries to confer Article III standing. Asserting an Article III standing defense remains an effective defense that companies should consider throughout litigation, balanced against the prospect of the case continuing in state court.

March 16, 2026March 16, 2026 by Gerald L. Maatman, Jr.

Third-Party Complaint Dismissed With Prejudice After Alabama Federal Court Finds Parties’ Indemnity Provisions Do Not Apply To Title VII In EEOC Sex Discrimination Lawsuit

By Gerald L. Maatman, Jr., George J. Schaller, and Andrew P. Quay

Duane Morris Takeaways: On March 9, 2026, in EEOC v. TCI of Alabama, LLC, Case No. 25-CV-89, 2026 U.S. Dist. LEXIS 47895 (N.D. Ala. Mar. 9, 2026), Judge Corey L. Maze of the U.S. District Court for the Northern District of Alabama dismissed a third-party complaint seeking to enforce indemnity provisions between Defendant-TCI and third-party staffing firms with the aim of indemnifying TCI from liability under Title VII. The Court held that parties cannot contract away their responsibilities under Title VII in light of its comprehensive remedial scheme.

The Court’s decision illustrates that corporate defendants cannot shift potential Title VII liability through contracted indemnity clauses entered into by staffing firms that refer employees.

Case Background

TCI of Alabama, LLC (“TCI”) disposes and recycles PCB contaminated items at various plants and employs laborers to do so. Id. at *3. To hire laborers, since 2020, TCI has “relied exclusively on third-party temporary staffing agencies” who refer qualified applicants. Id.

The EEOC investigated TCI after the Commission learned that TCI allegedly refused to recruit and hire qualified women for laborer positions. Id. Following its investigation, the EEOC issued TCI a letter of determination, found reasonable cause to believe that TCI violated Title VII, and invited TCI to conciliate. Id. The Parties did not reach a conciliation agreement, and the EEOC filed the instant lawsuit. Id.

The EEOC’s lawsuit brought one claim for sex discrimination under Title VII. Id. at *3-4. According to the EEOC, TCI “intentionally excluded from employment a class of qualified females seeking employment as laborers in favor of hiring equally or less qualified male applicants.” Id. at *4. The EEOC maintained that TCI refused to hire women for numerous reasons including that TCI instructed third party staffing agencies, Orin Staffing, LLC, Personnel Staffing, Inc., and WorkSmart Staffing, Inc. (the “Staffing Firms”) not to refer women for its laborer positions because “among other reasons, women would ‘distract’ male workers and increase the risk of sexual harassment in the workplace.” Id.

TCI answered the complaint and then filed its own third-party complaint for breach of contract against the Staffing Firms. Id. TCI’s third-party complaint alleged the Staffing Firms “agreed via contracts” to lawfully refer qualified laborers to TCI. Id. The contracts also contained indemnification provisions, which required the Staffing Firms, as joint employers of referred employees, to indemnify TCI “for all claims caused by the [Staffing Firms’] breach of contract, including a breach caused by failing to follow the law when referring applicants.” Id. at *4-5.

Accordingly, TCI contended that even if the EEOC’s allegations were true, the Staffing Firms’ compliance with TCI’s alleged unlawful instruction was itself “unlawful and violated Title VII.” Id. at *5. Therefore, the Staffing Firms exposed TCI to legal claims which TCI was indemnified for under their agreed contracts. Id.

The EEOC and the Staffing Firms moved to dismiss TCI’s third-party complaint. Id. Their arguments for dismissal varied. Id. The Court focused on one argument raised by the EEOC, whether Title VII preempts TCI’s breach of contract claim and therefore requires dismissal of TCI’s third-party complaint. Id. at *6-7.

The Court’s Opinion

Judge Maze agreed with the EEOC that Title VII preempts TCI’s breach of contract claim and dismissed the third-party complaint with prejudice, explaining that any amendment would be futile. Id. at *9.

Acknowledging Title VII’s “comprehensive remedial scheme,” the Court adopted the holding in EEOC v. Blockbuster, Case No. 07-CV-2612, 2010 U.S. Dist. LEXIS 2889 (D. Md. Jan. 14, 2010), which held that parties accused of violating Title VII may not bring claims for indemnification against third parties “to skirt their own liability.” TCI of Alabama, LLC,2026 U.S. Dist. LEXIS47895, at *7. In Blockbuster, the EEOC brought a Title VII action against the home video rental chain for failing to prevent and correct known sexual harassment at one of its warehouse facilities. Blockbuster, 2010 U.S. Dist. LEXIS 2889, at *1. Blockbuster, like TCI here, filed a third-party complaint against a staffing firm that agreed to indemnify Blockbuster against any losses arising from any employment claim brought by its employees. Id. The Court in Blockbuster granted judgment on the pleadings against Blockbuster and held that “[t]he primary goal of Title VII to eradicate discriminatory conduct would be thwarted if Blockbuster were permitted to contract around its obligations and shift its entire responsibility for complying with Title VII” to a third party. Id.

The Court here agreed that the policy rationale in Blockbuster applied in greater force to TCI’s third-party indemnification claims given those claims rested on the EEOC’s allegation that TCI instructed staffing firms not to refer qualified women. TCI of Alabama, LLC,2026 U.S. Dist. LEXIS47895, at *8. “Federal public policy would be undermined,” the Court explained, “if TCI had the ability to tell others to help TCI violate federal law and then pay TCI if TCI got caught.” Id. Therefore, a contractual indemnity provision could not shield TCI from liability under Title VII.

Even though the EEOC’s lawsuit continues against TCI, the Staffing Firms involved in hiring are not off the hook. In a footnote, the Opinion clarifies that if the Staffing Firms violated Title VII by complying with TCI’s unlawful request to not refer qualified women for laborer jobs, they too can face liability in another case. Id. at *9, n. 2.

Accordingly, the Court dismissed TCI’s third-party complaint with prejudice.

Implications For Businesses

EEOC v. TCI of Alabama, LLC demonstrates that corporate defendants cannot turn a blind eye to potential Title VII harms and attempt to contract away Title VII liability. While indemnity clauses may appear all-encompassing, courts continue to decline coverage where Title VII violations are alleged.

This Court agreed that public policy concerns control and remain critical in analyzing the scope of an indemnity provision in alleged gender-bias hiring under Title VII. After TCI of Alabama, LLC, Companies contracting with outside staffing firms cannot rely on “shifting the blame” through indemnity provisions in contracts when faced with Title VII claims brought by the EEOC.

December 1, 2025December 1, 2025 by Gerald L. Maatman, Jr.

Florida Federal Court Denies Certification Of Nationwide Classes Of Burger King Consumers in Suit Alleging Deceptive Practices

By Gerald L. Maatman, Jr., Brett Bohan, and Andrew Quay

Duane Morris Takeaways: On November 25, 2025, in Coleman, et al. v. Burger King Corp., Case No. 22-CV-20925, 2025 U.S. Dist. LEXIS 231422 (S.D. Fla. Nov. 25, 2025), Judge Roy K. Altman of the U.S. District Court for the Southern District of Florida denied a motion for class certification of three nationwide classes of consumers against one of the Burger King after the lawsuit narrowly survived two motions to dismiss. The Court held that due to the predominance of individual questions between the proposed classes, and plaintiffs’ lack of class-wide evidence to support certification, the plaintiffs failed to establish the prerequisites for class certification from the sale of “Whoppers” and “Big Kings” across the country. The opinion illustrates the hurdles plaintiffs face when attempting to certify multi-state, let alone nationwide, classes, and the fundamental, yet effective arguments corporate counsel can raise to defeat them.

Case Background

Plaintiffs, a group of Burger King consumers alleging that Burger King materially overstates the size of its burgers in advertisements, sought certification of three nationwide classes. Id. at *2. Plaintiffs sought certification under Rule 23(b)(3), which allows a district court to certify a class only if “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Id. at *6-7 (quoting Fed. R. Civ. P. 23(b)(3)). Plaintiffs insisted that they each purchased a burger because of the advertising and would not have if the size of the burgers had been portrayed accurately. Id. at *3. Notably, the plaintiffs did not offer any substantive analysis on variations between state laws despite their request for certification of nationwide classes.

Burger King responded that plaintiffs’ motion could not satisfy predominance and superiority under Rule 23(b)(3) and commonality and typicality under Rule 23(a). Id. at *8. Burger King argued that plaintiffs’ lack of class-wide evidence, coupled with Burger King’s affirmative defenses that raise additional individualized questions, was fatal to their motion for class certification. Id. at *33. Also weighing against predominance, Burger King argued, the proposed class members “were exposed to a wide variety of advertisements,” and “[n]o single photograph of a burger . . . can represent the appearances of the burgers every other class member received.” Id. at *23, 28.

The Court’s Opinion

In a 35-page opinion, Judge Roy K. Altman denied plaintiffs’ motion for class certification for failing to carry their Rule 23 burden. Explaining that plaintiffs are not entitled to “a mere pleading standard” on a motion for class certification, and that they must “affirmatively demonstrate” their compliance with each element of Rule 23, the Court held that plaintiffs failed to establish predominance and superiority under Rule 23(b)(3) and, at minimum, commonality under Rule 23(a). Id. at *5 (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011)).

As for predominance, the Court explained that Plaintiffs needed to be able to prove “the relative smallness of the burgers [they bought compared to the burgers in the advertisements] with a few pieces of common evidence that apply with equal force to everyone.” Id. at *30. Plaintiffs could not do that, the Court held, because each putative class member saw a particular advertisement and received a specific burger. Id. Plus, by seeking certification of nationwide or multi-state classes, plaintiffs bear the heavy burden to demonstrate that “variations in state law” do not threaten to “swamp any common issues and defeat predominance.” Id. at *10 (quoting Klay v. Humana, Inc., 382 F.3d 1241, 1261 (11th Cir. 2004)). Plaintiffs’ motion for certification did not provide “any analysis of potential state-law conflicts,” thus “utterly fail[ing]” to meet their burden of showing that common issues of law predominate. Id. at *12.

The Court further agreed that Burger King’s affirmative defenses raised additional individualized inquiries. If the Court were to grant certification, a “potentially significant percentage” of the putative class members may be precluded from pursuing their claims by virtue of an arbitration clause and class action waiver that loyalty rewards program users had agreed to, and with respect to at least one class, numerous plaintiffs and putative class members did not properly notify Burger King of the alleged breaches within a reasonable time after they discovered the alleged breaches.

For similar reasons, the Court rejected plaintiffs’ proffered method of calculating class-wide damages by subtracting the price of the burger from the value of the item as determined by the jury. Id. at *45. Burger King menu items vary by location, and the prices likely differed throughout the class period, so the Court would need to confirm when and where each individual plaintiff purchased a burger in order to compute damages. Id. at *46.

Turning to superiority, the Court held that plaintiffs’ proposed classes “would create an administrative nightmare.” Id. at *51. Plaintiffs contended that “there are no significant or unusual difficulties in managing this case” because Burger King’s liability “can be proven by its uniform advertisements and photographs of the actual Menu Items served to customers, which are common to the entire class.” Id. at *50. The Court rejected plaintiffs’ conclusory argument because the proposed class involves millions of consumers stretching to 2018, “very few of whom are likely to have retained proof of (or even remember) their fast-food purchases.” Id. at *52.

Finally, though not necessary for denying class certification, the Court held that plaintiffs failed to show that common questions they raised, such as whether Burger King’s advertisements are materially misleading, can be raised through class-wide evidence. Id. at *54. While plaintiffs offered questions common to the class, they failed to show that a class-wide proceeding would “generate common answers apt to drive the resolution of the litigation.” Id. at *55 (quoting Dukes, 564 U.S. at 350).

In sum, after narrowly surviving two motions to dismiss, plaintiffs were unable to surmount their burden at the class certification stage, and the Court denied their motion for class certification.

Implications For Companies

The Court’s holding in Coleman demonstrates the burden that plaintiffs must overcome when seeking to certify a class. Coleman shows that plaintiffs cannot rest on the allegations in their complaints to satisfy the elements of class certification and must instead put forth evidence from which courts may determine commonality and predominance.

In cases involving allegations of consumer fraud, it may not be sufficient for plaintiffs to establish that they were all deceived by the same allegedly fraudulent behavior. Instead, to certify a nationwide class, plaintiffs may also need to overcome differences between locations; difficulties in supplying reliable, supporting proof; and variations between state laws.

Additionally, Coleman represents a reminder of the continued utility of an arbitration agreement for defeating class certification, even where the agreement may not extend to all members of the class.

October 29, 2025October 29, 2025 by Gerald L. Maatman, Jr.

Illinois Federal Court Allows Plaintiffs To Proceed In Data Breach Class Action Anonymously

By Gerald L. Maatman, Jr., Brett Bohan, and Andrew Quay

Duane Morris Takeaways: On October 22, 2025, in Doe, et al. v. Veradigm Inc., No. 25-CV-10147, 2025 U.S. Dist. LEXIS 207942 (N.D. Ill. Oct. 22, 2025), Judge Mary M. Rowland of the U.S. District Court for the Northern District of Illinois granted plaintiffs’ motion to proceed under a pseudonym in a class action alleging violations of the Electronic Communication Privacy Act and the California Invasion of Privacy Act, and negligence for improper disclosure of plaintiffs’ protected health information (“PHI”). The Court held that the potential harm to the plaintiffs in revealing their identities exceeded the likely harm from concealment because revealing their identities would exacerbate the very harm plaintiffs sought to remedy.

The decision illustrates the delicate balancing that courts apply when deciding whether to allow plaintiffs to proceed anonymously, particularly when faced with allegations of improper disclosure of highly sensitive personal information including test results, doctor’s notes, and medical treatment information. When plaintiffs’ reasons for proceeding anonymously implicate the same reasons they brought the lawsuit, like in Veradigm, the scales are demonstrably tipped in favor of proceeding under a pseudonym.

Case Background

In August 2025, plaintiffs, proceeding under the pseudonyms “Jane Doe,” “Janet Doe,” and “John Doe,” filed a class action lawsuit against Veradigm alleging improper disclosure of their PHI to Google via Google’s online marketing systems. Id. at *1. Plaintiffs contended that the disclosure would make them particularly vulnerable if their true names were revealed, as the publication of their names together with improperly released PHI would make them a “prime target” for identity theft, fraud and financial loss, stigma, and similar threats. Id. at *2.

Plaintiffs’ initial motion to proceed under a pseudonym was denied without prejudice for failing to address recent Seventh Circuit precedent, Doe v. Loyola Univ. Chicago, 100 F.4th 910 (7th Cir. 2024), and Doe v. Blue Cross & Blue Shield United of Wis., 112 F.3d 869, 872 (7th Cir. 1997). Id at *1. In Loyola, the expelled plaintiff sought to proceed anonymously where he was accused of engaging in non-consensual sexual activity with another student. 100 F.4th at 912. In Blue Cross, the plaintiff requested anonymity out of fear that the litigation might result in the disclosure of his psychiatric records. 112 F.3d at 872. The Seventh Circuit indicated that it was inappropriate to allow the plaintiffs to proceed under fictitious names. See id.; Loyola, 100 F.4th at 914.

In their renewed motion in the case at hand, plaintiffs argued that Loyola and Blue Cross could be distinguished because, rather than concealing embarrassing information flowing from their own conduct, plaintiffs seek to prevent additional intrusions into their own private affairs. Veradigm, 2025 U.S. Dist. LEXIS 207942at *2. Plaintiffs agreed to reveal their true identities to Veradigm pursuant to a protective order to allow Veradigm to investigate their claims. Id. at *4-5.

The Court’s Opinion

The Court agreed that the sensitive information in Loyola and Blue Cross was “tangential” to the respective Title IX and ERISA claims, whereas in the case at bar “the injury litigated against is the same interest Plaintiffs seek to protect through pseudonyms: disclosure of Plaintiffs’ PHI.” Id. at *4. Furthermore, there could be no prejudice to Veradigm where the plaintiffs agreed to reveal their true identities under a protective order to allow Veradigm to investigate their claims. Id. at *4-5. Therefore, although the use of fictitious names is generally disfavored in federal court, the harm to plaintiffs in revealing their identities exceeded the likely harm from concealment, and the Court granted plaintiffs’ motion to proceed under a pseudonym.

An analogous decision from the U.S. District Court for the Northern District of California, In Re Meta Pixel Healthcare Litig., No. 22-CV-03580, 2025 U.S. Dist. LEXIS 45310 (N.D. Cal. Mar. 12, 2025), guided the opinion. There, as in Veradigm, the court considered whether the plaintiffs should be permitted to proceed under pseudonyms where data privacy was at issue. Id. at *12. It held that they should, reasoning that requiring the plaintiffs to proceed publicly would “arguably cause a further and greater privacy intrusion” and disclosure may dissuade plaintiffs from bringing privacy cases. Id. The court in Veradigm adopted this reasoning when granting plaintiffs’ motion for permission to proceed under a pseudonym. Veradigm, 2025 U.S. Dist. LEXIS 207942 at *4-5.

Implications for Companies

Veradigm illustrates that, where the privacy of an individual is at issue in a lawsuit, courts may be more inclined to permit plaintiffs to proceed anonymously to avoid intruding further on their privacy.

Individuals who know that they may be able to avoid disclosing their identities during litigation may feel emboldened to pursue a data privacy lawsuit that they may not have otherwise.

Therefore, companies should be aware of the risk of additional litigation as the result of plaintiffs being permitted to litigate under pseudonyms.

October 2, 2025October 2, 2025 by Gerald L. Maatman, Jr.

North Carolina Federal Dismisses Class Action Based On No Injury Stemming From Bojangles Data Breach

By Gerald L. Maatman, Jr., Ryan T. Garippo, and Andrew P. Quay

Duane Morris Takeaways: On September 30, 2025, in Dougherty, et al. v. Bojangles’ Restaurants, Inc., No. 25-CV-00065, 2025 U.S. Dist. LEXIS 194879 (W.D.N.C. Sept. 30, 2025), Judge Kenneth D. Bell of the U.S. District Court for the Western District of North Carolina dismissed a class action alleging violations of numerous state torts and the North Carolina Unfair and Deceptive Trade Practices Act following an alleged cyberattack on Bojangles. The Court held the former employees of the fast-food chain failed to plausibly allege a concrete injury, and therefore, lacked Article III standing. The Court reasoned that Plaintiffs’ theory of an “ongoing threat of identity theft” without any actual harm was not enough to sustain a concrete injury.

The decision illustrates that the mere possibility of future harm, without any actual harm, is not enough to plausibly allege an injury-in-fact for purposes of Article III standing. Further, building on U.S. Supreme Court precedent, the decision highlights the requirements of traceability where plaintiffs cannot identify any harm connected to the transfer of personal information to a data breach defendant.

Case Background

Bojangles Restaurants, Inc. (“Bojangles”) was the alleged victim of a cyberattack in February 2024. Id. at *5. In November of that same year, Bojangles sent a notice to those who may have been impacted, stating “that certain files were viewed and downloaded by an unknown actor between February 19, 2024 and March 12, 2024.” Id.

In January 2025, after receiving the notice from Bojangles, Alexis Dougherty and eight other former employees (“Plaintiffs”), filed a putative class action complaint against Bojangles. Id. at *2. Plaintiffs alleged that Bojangles gathers various types of sensitive information from its employees, including names, addresses, Social Security numbers, driver’s license information, etc., and that Bojangles failed to implement “reasonable cybersecurity safeguards or protocols.” Id. at *4-5. Notably, however, Plaintiffs did not identify any sensitive information they provided to Bojangles, except for some Plaintiffs who alleged they provided their Social Security number or that Bojangles’ notice identified their Social Security number. Id. at *6.

Plaintiffs asserted two different theories of injury. Eight of the nine Plaintiffs did not allege any identity theft or data misuse; rather, they claimed injury based on “the threat of harm” from a potential sale of their information on the Dark Web, an uptick in spam calls, “diminution in value” of their personal information, time spent mitigating the potential impacts of the cyberattack, and emotional distress. Id. The remaining plaintiff alleged fraudulent charges on his debit card but did not allege that he provided the card number to Bojangles as part of his employment. Id. at *6.

Bojangles moved to dismiss for lack of subject-matter jurisdiction and for failure to state a claim upon which relief can be granted. Bojangles argued that eight of the Plaintiffs failed to allege a concrete injury without an actual misuse of their personal information, and that the remaining plaintiff’s alleged debit card fraud is not fairly traceable to the data breach.

The Court’s Opinion

In a 10-page opinion, Judge Kenneth D. Bell granted Bojangles’ motion to dismiss for lack of subject-matter jurisdiction without reaching the merits of Plaintiffs’ claims.

The Court held that Plaintiffs failed to plausibly allege Article III standing. Judge Bell explained that Plaintiffs’ allegations “only describ[e] the possibility of future harm that is inherent in every data security incident, but cannot support the Article III standing necessary to pursue a federal lawsuit.” Id. at *7. There was no dispute that Plaintiffs’ personal information may have been impacted by the data breach, but the potential threat of resulting damages failed to plausibly allege a concrete injury that is fairly traceable to the data breach. Id. at *6-7.

The U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), governed the opinion. There, the named plaintiff on behalf of a putative class alleged that TransUnion, a credit reporting agency, violated the Fair Credit Reporting Act by failing to use reasonable procedures before placing a misleading alert in his credit file that labeled him as a potential terrorist, among other comparable threats. Id. at 419-21. The Supreme Court held that only class members whose credit reports had been provided to third-party businesses had suffered a concrete injury, and that the mere existence of misleading alerts in one’s own credit file did not cause such an injury. Id. at 417, 435.

Applying TransUnion to the facts at hand, Judge Bell reasoned that “Plaintiffs’ allegations of harm as a consequence of the Data Breach fall squarely in the ‘might be a problem’ rather than the ‘is already a problem’ category.” Dougherty, 2025 U.S. Dist. LEXIS 194879,at *12. Therefore, Plaintiffs’ theory of an ongoing threat of identity theft or other data misuse failed to plausibly allege any actual harm, such as an attempt to open credit card accounts or otherwise steal information. Id. at *12-13. Further, most of the Plaintiffs did not identify any personal information that they personally provided to Bojangles, defeating any traceability argument. Judge Bell similarly dismissed Plaintiffs’ varied attempts to establish standing based on an uptick in spam calls, diminution in value of personal information, time spent mitigating the “potential impact” of the data breach, and emotional distress. Id. at 13-14. None of these harms constitute a concrete injury.

Judge Bell also dismissed the claims of the one Plaintiff who allegedly noticed fraudulent charges on his debit card, because he did not allege those charges were fairly traceable to the breach. Because the Plaintiff did not allege that he provided his debit card number to Bojangles as part of his employment, there was no way to connect those charges to the alleged breach. Thus, although those charges may constitute an injury-in-fact, they were insufficient on traceability grounds.

Implications For Companies

Dougherty illustrates the pleading requirements established in TransUnion, and the powerful tool that they can be in dismantling a nationwide data breach class action.

What’s more, the court in Dougherty seemed to take for granted that every class member must suffer an actual injury for each of their claims, even at the pleading stage in the litigation. Id. at *9 (“Therefore, following TransUnion, it is clear that to recover damages from Defendant, every class member must have Article III standing for each claim that they press requiring proof that the challenged conduct caused each of them a concrete harm”) (quotations omitted). This signal may be a favorable sign that Judge Bell agrees with the “sleeping lion” noted by Justice Kavanaugh in Lab. Corp. of Am. Holdings v. Davis, 605 U.S. 327 (2025) – i.e., whether “a federal court may . . . certify a damages class that includes both injured and uninjured members.” Id. at 328 (Kavanaugh, J., dissenting). For now, however, the Court left that issue until another day.

Nonetheless, if corporate counsel’s organizations are facing a class action seeking damages stemming from an alleged data breach, corporate counsel should consider their ability to attack Article III standing on all fronts, not only as to the named plaintiffs, but also as to the class. If successful, other organizations may be able to make an early exit from a data breach class action on the theory that plaintiffs cannot plausibly allege an actual injury from the future possibility of their data misuse, much like the defendant in Dougherty.

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

Florida Court Finds No Standing For “Disappointed” Consumers In Class Action Lawsuit Concerning Halloween-Themed Candies

By Gerald L. Maatman, Jr., George J. Schaller, and Andrew P. Quay

Duane Morris Takeaways: On September 19, 2025, in Vidal, et al. v. The Hershey Co., No. 24-CV-60831, 2025 U.S. Dist. LEXIS 184308 (S.D. Fla. Sept. 19, 2025), Judge Melissa Damian of the U.S. District Court for the Southern District of Florida dismissed a class action complaint alleging violations of the Florida Deceptive and Unfair Trade Practices Act for deceptive candy packing. The Court held the plaintiff-consumers failed to plausibly allege an economic injury, and therefore, lacked Article III standing. Plaintiffs’ allegations that they were “disappointed” with the lack of carved designs on Halloween-themed candy and blanket assertions that they “paid a premium” was not enough to sustain an economic injury.

The decision illustrates that conclusory statements, without an economic injury, are not enough to confer Article III standing. Though the ruling demonstrates “spooky” claims for deceptive labeling and deceptive advertising can support a potential class action, the Plaintiffs here could not show they sustained an economic injury.

Case Background

Plaintiffs Nathan Vidal and Eduardo Granados, on behalf of themselves and a putative class of consumers, filed a class action complaint against The Hershey Company (“Hershey”). Plaintiffs alleged they purchased certain decorative Reese’s products in Florida and that these products “misled” them in violation of the Florida Deceptive and Unfair Trade Practices Act. Id. at *4

Plaintiffs asserted they would not have purchased Reese’s Peanut Butter Pumpkins and Reese’s White Pumpkins had they known that the products did not contain detailed carvings of eyes and a mouth as pictured on the packaging. Id. at *3-4. Plaintiffs maintained “Hershey [] deceived reasonable consumers … into believing the [p]roducts were something that they were not.” Id. at *5. In true Halloween horror story fashion, Plaintiffs claimed that without the carvings and designs the products were “worthless” and that they would not have purchased them. Id. at *14.

Hershey moved to dismiss for lack of subject-matter jurisdiction or, in the alternative, for failure to state a claim, Hersey also moved to strike Plaintiffs’ class action allegations. Id. at *4.

Hershey primarily argued Plaintiffs lacked standing because “they suffered no injury-in-fact.” Id. at *6. Hershey maintained Plaintiffs lacked standing because they only alleged an economic injury. Hershey however contended Plaintiffs did not suffer an economic injury because they still received “delicious Reese’s candy.” Id. Even still, Hershey countered that most of the at-issue products, contained “DECORATING SUGGESTION” disclaimers and both carved and uncarved images. Id. at * 7. Hershey similarly highlighted that Plaintiffs did not allege the products were defective, inedible, did not meet taste/flavor expectations, or that they lost any economic value without the decorative carvings. Id. at *14.

While Hershey’s motion was pending, Plaintiffs moved for class certification arguing they satisfied all the requirements under Rule 23 to certify a class of consumers who purchased any of the at-issue Reese’s products “based on a false and deceptive representation of an artistic carving” on the products packaging. Id. at *5.

The Court’s Decision

The Court dismissed Plaintiffs’ complaint because they did not allege a concrete economic injury and therefore lacked standing to pursue their personal claims and class claims.

In dismissing Plaintiffs’ complaint, the Court reasoned the Eleventh Circuit’s analysis of standing emphasizes that “[e]conomic injuries are the ‘epitome’ of concrete injuries,” and that such an economic injury can be the “result of a deceptive or unfair practice” where an individual is “deprived of the benefit of her bargain.” Id. at *15. In analyzing the benefit of the bargain a plaintiff’s damages are calculated based on “the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties.” Debernardis v. IQ Formulations, LLC, 942 F.3d 1076, 1084 (11th Cir. 2019) (citing Carriuolo v. Gen. Motors Co., 823 F.3d 977, 986-87 (11th Cir. 2016)).

The Court relied on two analogous cases in considering Plaintiffs’ economic injury assertions. The first case concerned “honey-lemon cough drops” that “soothe[] sore throats” and based on those representations the “plaintiff believed that the cough drops contained lemon ingredients and were capable of soothing bronchial passages.” Id. at *17-18 (citing Valiente v. Publix Super Markets, Inc., 2023 U.S. Dist. LEXIS 91089 (S.D. Fla. May 24, 2023)). The Court in Valiente held plaintiff failed to allege an economic injury because the plaintiff did not allege the cough drops were defective, did not work as advertised, or were otherwise so flawed to render them worthless. Id. at *18.

The second case concerned plaintiffs who alleged they “paid a premium price” for “protein-infused brownies” that contained less than the advertised protein content. Id. at *18 (citing Melancon v. Alpha Prime Supps, LLC, 2025 U.S. Dist. LEXIS 21114 (S.D. Fla. Jan. 13, 2025). The Court in Melancon held plaintiffs failed to allege they suffered an economic injury for the same reasons as Valiente and also failed to identify any competing products for the Court to plausibly conclude that plaintiffs suffered a concrete injury in fact. Id.

Based on these cases, the Court agreed that “Plaintiffs here fail to allege Reese’s Products they purchased were defective or worthless.” Id. The Court explained “[p]ut simply, Plaintiffs do not allege that the products were unfit for consumption, did not taste as Plaintiffs expected, or otherwise were so flawed as to render them worthless.” Id. a

The Court reasoned Plaintiffs’ disappointment and conclusory allegations as to why they were deprived of the benefit of their bargain merely reflected their subjective, personal expectations of how the candies would or should have looked when unpackaged. Id. The Court held Plaintiffs’ failure to tie the value of the candies to their purported misrepresentation theory did not plausibly allege a concrete economic injury for purposes of Article III standing. Id. at *19. Further, the Court reasoned Plaintiffs made no allegations that would allow any measurement of “the difference between the value of the Reese’s Products with or without the decorative carvings.” Id.

The Court also determined Plaintiffs’ “[c]omplaint contain[ed] nothing more than allegations of Plaintiff’s subjective belief that they paid a price premium” and these blanket allegations were not enough to allege a concrete injury. Id. at *19-20.

Accordingly, the Court dismissed Plaintiffs’ complaint finding “Plaintiffs lack Article III standing to assert a claim for relief” individually or on behalf of a purported class. Id. at *20. The Court dismissed Plaintiffs’ complaint without prejudice preserving Plaintiffs’ ability to move for leave to amend within 15 days from the date of the Court’s Order. Id. at *23.

Implications For Companies

Companies faced with consumer fraud class action lawsuits alleging theories of false advertising and deceptive practices related to their products must consider standing at the outset of any litigation.

Vidal illustrates the importance of analyzing Article III standing issues in every lawsuit. The Vidal Plaintiffs did not allege a sufficient economic injury based on their personal expectations of how Halloween-themed candies should have looked and did not allege the candies were defective, flawed, or reduced the actual value of the product. Accordingly, the Court subjected their claims to dismissal.

Companies should not treat defective or false advertising product class action claims lightly, and if faced with such a lawsuit, Companies must consider all available defenses.

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

Second Circuit Rejects Former Employees’ Attempt To Seek Review Of Arbitral Fees Dispute

By Gerald L. Maatman, Jr., Andrew Quay, and Eden Anderson

Duane Morris Takeaways: A Second Circuit panel of Judges Gerard Lynch, Michael Park, and Beth Robinson reversed the Southern District of New York in Frazier v. X Corp., Case No. 24-1948 (2d Cir. Sept. 2, 2025), holding that X’s (formerly Twitter) refusal to pay ongoing arbitral fees did not amount to a “failure, neglect, or refusal … to arbitrate” that the district court was empowered to remedy under the Federal Arbitration Act (“FAA”). The Second Circuit explained that under 9 U.S.C. § 4, district courts may only address a narrow category of disputes limited to whether arbitration must occur between particular parties over particular issues. The decision follows related precedent set by the Third, Fifth, Ninth, and Eleventh Circuits and makes clear that a party’s decision not to abide by the procedural determinations of an arbitrator or arbitral body does not empower a district court to intervene and review.

The decision is an important primer for corporate counsel in handling disputes over ongoing arbitral proceedings.

Case Background

Plaintiff-Petitioners, seven former employees of Twitter, signed arbitration agreements committing them to resolve any employment-related disputes in binding individual arbitration. The employees filed arbitration demands following their termination, believing that they had been denied severance and had been illegally discriminated against, among other claims. After making certain payments of arbitral fees, Twitter asserted that the arbitration agreements required that the fees be apportioned equally between it and the former employees. The agreements called for a pro-rata split of arbitral fees but incorporate by reference Judicial Arbitration and Mediation Services’ (“JAMS”) rules and policies, which required Twitter to pay all but the case initiation fees. The employees sued to compel arbitration under 9 U.S.C. § 4, arguing that by refusing to pay the fees allocated to it by the arbitral body, Twitter was “refus[ing] to arbitrate” in accordance with the arbitration agreements.

At issue before the Second Circuit was whether Twitter’s refusal to pay ongoing arbitral fees constituted an outright refusal to arbitrate that the district court was empowered to remedy under 9 U.S.C. § 4. The former employees took the position that by incorporating the arbitral body’s rules in the arbitration agreements, Twitter agreed to be bound by the arbitral body’s initial determination that Twitter was responsible for the disputed fees. Therefore, the former employees argued, the district court could compel Twitter to pay the disputed fees under 9 U.S.C. § 4.

The Decision

The Second Circuit rejected the former employees’ argument.

It held that a party’s decision not to abide by the procedural determinations of an arbitrator or arbitral body is an intra-arbitration delinquency that arbitral bodies are empowered to manage. Therefore, the former employees could not use 9 U.S.C. § 4 as a vehicle to seek judicial review of the arbitral body’s decision not to proceed with the arbitration process.

Implications Of The Decision

The Frazier decision marks another federal circuit keeping the courts out of disputes in ongoing arbitral proceedings over a party’s payment of fees or compliance with arbitral policies. Corporate counsel must consider the limited scope of permitted review under 9 U.S.C. § 4 when facing disputes in ongoing arbitral proceedings, whether over payment of fees or otherwise.