Andrew P. Quay – Class Action Defense

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.