Class Action Defense – Class Action Defense

May 30, 2025May 30, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 103: Procedural Issues In Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Nathan Norimoto with their analysis of key procedural issues in class action litigation addressed by the Second, Third, and Seventh Circuit Courts.

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

Jennifer Riley: Thank you for being here again for the next episode of our Friday weekly podcast, the Class Action Weekly Wire. I’m Jennifer, Riley, partner at Duane Morris, and joining me today is Nathan Norimoto. Thank you so much for being on the podcast today, Nathan.

Nathan Norimoto: Thanks. Happy to be here again, Jen. I appreciate it.

Jennifer: So, today we wanted to discuss trends and important developments with procedural issues in class action litigation. In our Class Action Review, this topic is somewhat of a catch-all in terms of the legal issues involved. Class action litigation presents significant procedural issues to litigants and courts alike. In 2024 courts addressed myriad procedural issues in class action litigation. Nathan, can you tell our listeners some of the highlights in this area over the past year?

Nathan: Certainly, jurisdiction is always an important consideration in class action litigation. Jurisdictional defenses are often can be dispositive when a defendant challenges the ability of plaintiffs to maintain their class action in court. This past year, the plaintiffs in Hasson v. FullStory, Inc. challenged district court decisions dismissing their class action lawsuits against FullStory, Inc., one of the defendants, and also Papa John’s International, Inc., for lack of personal jurisdiction, and essentially in their complaint plaintiffs allege that they were being unlawfully wiretapped by the defendants without their consent. Both of the defendants were incorporated in Delaware and based in Georgia, and the core legal issue that was presented in both cases centered on whether the defendants’ actions constituted sufficient contact with Pennsylvania to warrant jurisdiction from the court. The district court ruled against the plaintiffs on the grounds that they had failed to show that FullStory, one of the defendants, specifically aimed its conduct at Pennsylvania, where the action was venue. The district court also found that the claims were inadequate under both the “traditional” and “effects” tests for establishing personal jurisdiction. This decision from the district court was appealed to the Third Circuit, which ultimately affirmed the district court’s ruling. The Third Circuit ruled that the plaintiff’s allegations had failed to show that one of the one of the defendants, Papa John’s, targeted Pennsylvania specifically as the company’s website was intended for a national audience. The Court of Appeals also held that just simply operating an accessible website does not equate to targeting a specific state for purposes of the personal jurisdiction analysis. Additionally, the Third Circuit rejected one of the plaintiffs’ arguments that Papa Johns’ business activities in Pennsylvania established sufficient jurisdiction, analyzing that the alleged wiretapping would have occurred regardless of the company’s operations in that state. The court acknowledged Papa Johns’ significant presence in Pennsylvania but found that the plaintiffs’ claims did not arise out of or relate sufficiently to those contacts. So, ultimately the Third Circuit ruled that the connection between the website’s operation and the wiretapping claims was too weak to satisfy jurisdictional requirements as to the other plaintiff’s claims. The Third Circuit ruled that the plaintiff did not allege that FullStory, the other defendant, knew that he or any other user was in Pennsylvania before this alleged wiretapping app application was dispatched to his browser. The court held that FullStory was a degree removed from the alleged harm in the chain of events preceding this application’s transmission to the plaintiff’s browser failed to establish that FullStory, the defendant, expressly aimed its alleged wiretapping at Pennsylvania. So, for these reasons, the Third Circuit affirmed the district court’s ruling dismissing the case.

Jennifer: Thanks, Nathan. The issue of standing is always also a hot topic in class action litigation. For instance, I know the Second Circuit weighed in on associational standing in a case called Do No Harm, et al. v. Pfizer Inc. this past year. So, associational standing is a legal doctrine that allows an organization to sue on behalf of its members when those members have suffered injury, even if the organization itself hasn’t experienced harm. Essentially, it gives an organization the right to act as a representative of its members in court. So, in that case the defendant was Pfizer. It launched a program called the Breakthrough Fellowship Program in 2021 to increase minority representation and leadership opportunities. The program included a summer internship, two years of full-time employment, a fully paid MBA, MPH, or MS degree, additional internships, and postgraduate employment with Pfizer, the defendant. Eligibility for the program was restricted to the U.S. citizens or permanent residents who were undergraduate juniors with 3.0 GPAs and who exhibited commitment to pursuing one of those degrees, and it specifically aimed to enhance opportunities for Black/African American, Latino/Hispanic, and Native American candidates. The plaintiff in that case was an advocacy organization and filed a lawsuit claiming that the fellowship’s focus on increasing diversity excluded White and Asian American applicants in violation of Title VII. The organizations sought a temporary restraining order, or TRO, to halt the selection process for 2023. The district court in that one dismissed the case, ruling that the plaintiff, the association, lacked standing because it failed to identify any harmed members by name, and also did not sufficiently demonstrate that its members were directly affected. The district court there opined also that the fellowship program did not violate the federal civil rights laws. On appeal, the Second Circuit affirmed the ruling of the district court. The plaintiff argued that the dismissal was premature because it had met the standing requirements for a preliminary injunction. The Second Circuit disagreed. It ruled that the plaintiff, who was of course pursuing claims as an association, had to name at least one injured member in order to establish standing, and therefore the dismissal was appropriate because the plaintiff failed to meet that requirement.

Nathan: Interesting. I’m interested to see how that doctrine progresses through 2025. Jen, I also wanted to address the issue of consolidation and class action litigation, since oftentimes consolidation issues surface when defendants are subject to multiple class actions and are assessing whether or not to consolidate multiple cases in one form is a strategic imperative for defendants. In Willis, et al. v. Government Employees Insurance Co., the plaintiffs filed a collective action alleging that GEICO had failed to pay overtime wages under the Fair Labor Standards Act, or the FLSA. The case was connected to two other FLSA collective actions against GEICO already pending in that court and the defendant, GEICO, had sought a dismissal of the case as duplicative since the named plaintiffs were also part of another lawsuit entitled Benvenutti v. GEICO. The court denied the motion and ultimately consolidated the actions, stating that the Benvenutti action specifically involved service representatives at GEICO’s operation working out of its Macon, Georgia call center, and had alleged that GEICO failed to pay overtime under a policy that had only compensated logged in hours. The current plaintiffs, while also part of the Benvenutti case, represented employees in different positions who had similar claims regarding unpaid hours worked. The court noted that there was a substantial overlap in the parties’ issues and relief sought between the two cases, emphasizing that both actions revolved around claims of unpaid overtime under these alleged timekeeping practices. And so, the court ruled that consolidating the cases would actually enhance judicial efficiency and avoid repetitive litigation to provide a more streamlined resolution of the common issues.

Jennifer: Thanks, Nathan. Agreed – centralization is key for parties when attempting to litigate the claims of several actions in a particular forum. So, let’s talk about one more topic, and one that is always interesting in terms of how courts rule – sanctions, sanctions in class action litigation. Were there any interesting rulings on sanctions in 2024?

Nathan: Definitely. One interesting sanctions case was Mazurek, et al. v. Metalcraft Of Mayville, Inc. The plaintiff machinist had filed a collective action alleging that the defendant had failed to pay overtime compensation in violation of again the FLSA. The plaintiff specifically asserted that the defendant’s timekeeping system allowed employees to clock in and out up to 15 minutes before and after their scheduled shifts. However, the plaintiff alleged that if employees clocked in early but didn’t ultimately end up working that time, the recorded start time was adjusted to reflect the regular shift start time that was already programmed in the system. The plaintiff claimed employees were not compensated for this early time, despite them working. So, a timeclock issue. The court initially granted conditional certification of the collective action, but after discovery it subsequently decertified the collective action. The plaintiffs, following that decertification ruling, filed 16 additional cases which the court moved to consolidate or consolidated, and then the court selected two cases for summary judgment briefing. Out of those 16, the court had granted summary judgment to the defendant in all the selected cases. It ruled that even though the FLSA plaintiffs have a lower burden of proof when employer records are inaccurate. For example, the plaintiffs must still provide some proof of the hours they worked and were not compensated for that time. And so, the court noted that reconstructed work time had to be more than mere guesswork and found that plaintiffs’ attempts to estimate their work hours were just insufficient. So, in a separate order, in addition to that motion for summary judgment order, the court noted that since the two selected cases shared similar issues, it might be indicative of the broader problem with all of the pending cases. The court instructed plaintiffs’ counsel to then provide any specific facts or legal arguments that could differentiate the remaining cases from the two that have already been decided. In response, the plaintiffs in the remaining cases voluntarily dismissed their complaints with prejudice. Given the court’s ruling and the other actions, the defendant then moved for sanctions across all 16 cases, arguing that the allegations were based on speculation rather than evidence, and that plaintiffs’ counsel should have realized the cases were baseless when they filed the complaints. The district court ultimately denied the sanctions motion finding that while the evidence provided by the plaintiffs was insufficient to win at summary judgment, it still didn’t rise to the level of frivolousness or baselessness to warrant sanctions. Defendants appealed, and on appeal, the Seventh Circuit affirmed the district court’s ruling, agreeing that the plaintiffs’ claims were based on legitimate legal arguments and methods of proof and also, of course, that the district court had not abused its discretion denying that motion for sanctions.

Jennifer: Thanks, Nathan, great insights and analysis. I know that these are only some of the manners in which procedural issues can and have impacted and shaped class action litigation. I expect the ways in which both sides utilize these procedural tools, and the manner in which the courts rule on their applications, will continue to evolve in 2025. Thanks so much for joining us today. And thank you, Nathan, for your insight and excellent analysis.

Nathan: Thank you, listeners. Thank you, Jen.

May 23, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 102: Key Developments In Labor Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman, senior associate Elizabeth Mincer, and associate Niyah Dantzler with their analysis of the key developments in labor class actions, including claims sparked by the impact of the COVID-19 pandemic on the workforce.

Episode Transcript

Jerry Maatman: Hello, everyone, and thank you for being here again for our next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today are Niyah Dantzler and Elizabeth Mincer. Thanks so much for being on our podcast.

Elizabeth Mincer: Great to be here, Jerry.

Niyah Dantzler: Thanks for having me on the podcast, Jerry.

Jerry: Today, we wanted to discuss trends and important developments in the area of labor-related class action litigation. Liz, I know this is an area of special interest in your practice – tell us about the highlights of the past year.

Elizabeth: So, labor law issues often result in class action litigation either brought by advocacy groups, including unions, or by private plaintiffs asserting violations of labor-related statutes. In turn, labor-related class actions can arise in many contexts as the consequence of alleged mistreatment or abuse of workers can give rise to various statutory or constitutional claims. In 2024, courts addressed a number of labor issues in class action litigation. Historically, class action rulings have been brought under statutes such as the Migrant and Seasonal Agricultural Workers Protection Act, the Victims of Trafficking and Violence Protection Act, the Labor Management Relations Act, as well as under various constitutional based theories, and then the state law equivalents. Significantly, the majority of the key labor-related class action litigation decided in 2024 involved claims relating to COVID-19 vaccination requirements.

Jerry: Thanks very much for that overview. Let’s talk about COVID-related rulings then in 2024. Niyah, could you give us a brief overview of the key rulings covered in the 2025 Class Action Review in this space?

Niyah: Absolutely. There were several important rulings, particularly in cases stemming from claims relating to COVID-19 vaccines. For example, the U.S. Court of Appeals for the Ninth Circuit weighed in on a case, Bacon v. Woodward, and that case was brought by a group of firefighters from Spokane, Washington, alleging that the city unlawfully discharged them while they refuse to receive COVID-19 vaccinations in accordance with the governor’s Proclamation that all healthcare providers be fully vaccinated against COVID-19. Although the Proclamation was intended to accommodate sincerely held religious beliefs, the plaintiffs alleged that Spokane did not provide religious accommodations to any city firefighters. They instead claimed that the Proclamation, as applied to them, violated their Free Exercise rights under the U.S. Constitution. The state joined the action as an intervener to defend the Proclamation, and move for a judgment on the pleadings under Rule 12(c). The district court granted the motion, finding that Spokane lawfully applied the proclamation, but on appeal, the Ninth Circuit reversed it, determined that the firefighters had plausibly alleged that the city applied the Proclamation arbitrarily and capriciously, and showed callous disregard to the firefighters’ religious rights, and so the Ninth Circuit highlighted the fact that the fire departments outside of Spokane had permitted religious accommodations and actually sent non-vaccinated firefighters to provide services in Spokane pursuant to mutual aid agreements. Accepting the plaintiffs’ allegations as true, the Ninth Circuit held that firefighters’ claims should move forward because it was possible that they could establish that the Proclamation, as it applied to them, was not narrowly tailored to achieve the goal of stopping COVID-19 spread, as it failed to account for less restrictive alternatives, such as testing, masking, or considering natural immunity.

Jerry: Upon reading that decision, it sure seems to me the Ninth Circuit decision provided some good guideposts for employers trying to accommodate religious exemptions in terms of dealing with public health mandates and underscores the importance of ensuring that these policies are generally applicable but flexible, insofar as they don’t discriminate on the basis of religious practices. Liz, were there significant rulings under the Trafficking Victims Protection Act in 2024 that companies should know about in this space?

Elizabeth: Yes, there was a very interesting case that involved the global supply chain that is important for employers to know about. So, in a case called Doe, et al. v. Apple Inc., the plaintiffs, a group of former child miners who were injured in accidents and their representatives filed a class action against the defendants under the Trafficking Victims Protection Reauthorization Act of 2008, we’ll call TVPRA, which essentially makes it illegal to participate in a venture that uses forced labor. The plaintiffs argued that the defendants participated in a venture by purchasing cobalt through the global supply chain, which included cobalt that had been mined under forced labor conditions. The defendants had purchased this cobalt from large international suppliers, but those suppliers had subsidiaries in the Democratic Republic of the Congo involved in both mechanized, industrial mining, but also informal mining – and informal mining is really a less sophisticated, more crude operation, where the plaintiffs asserted that sort of operation posed severe safety risks and forced labor. The defendants filed a motion to dismiss, and the district court granted the motion. So, a positive outcome there. The district court had determined that the plaintiffs failed to sufficiently prove a direct connection between their injuries and the defendants’ actions, which was just merely buying that cobalt. The district court stated that purchasing cobalt through a supply chain without more direct involvement or control over the mining operations, did not constitute “participation in a venture” under the TVPRA. The case was appealed, and the DC. Circuit affirmed that ruling. It agreed that the plaintiffs failed to prove that the defendant’s participation in that venture actually violated the TVPRA. The D.C. Circuit found that the plaintiffs failed to show how an injunction against the defendants would remedy their injuries, as they were no longer involved in the mining, and the effectiveness of such an injunction was too speculative. The D.C. Circuit also reasoned that the plaintiffs failed to establish that the defendants had a sufficient degree of control or shared purpose with the suppliers to be considered participants in a venture, and that the relationship was that of a buyer and seller.

Jerry: Thanks very much for that overview, that’s a really important case. And those led to some substantial settlements in the labor class action space in 2024. How did the settlement numbers this past year compare to 2023?

Niyah: So, we saw a significant increase in the numbers from 2023 to 2024. In 2023, the top 10 labor settlements totaled about $139 million, whereas in 2024, we got up to $237 million.

Jerry: Well, that’s a big jump. The top settlement areas are something we track every year in the Duane Morris Class Action Review, and we’ll want to keep our eyes on these numbers in 2025 in terms of labor-related class action settlements. Well, Liz and Niyah, thank you very much for lending your thought leadership in this area and being with us today on our podcast. Listeners, thank you for tuning in. And if you have any questions or comments on today’s podcast, please send us a direct message on Twitter @DMClassAction.

Niyah: Thanks, everyone. Great to be here.

Elizabeth: Thanks for having me and thank you to the listeners for being here today.

May 16, 2025May 16, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 101: Key Developments In Civil Rights Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Nathan Norimoto discussing the key developments in civil rights class actions, including a notable ruling from the U.S. Supreme Court.

Episode Transcript

Jennifer Riley: Hello, everyone, and thank you for being here again for the next episode of our weekly, podcast the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is Nathan Norimoto. Thank you, Nathan, for being on the podcast today.

Nathan Norimoto: Thank you, Jen. Great to be here.

Jennifer: Today, we wanted to discuss some trends and important developments in the area of civil rights class action litigation. Nathan, do you want to talk a bit about this area before we get into the recent developments?

Nathan: Sure. Yeah, so for over 70 years, class actions have been amongst the most powerful tools to secure civil rights in America. This began with the class action of Brown, et al. v. Board Of Education, in which the United States Supreme Court declared school segregation unlawful and arguably set the stage for the civil rights movement. In 1966, Congress and the judicial rule-making authorities crafted Federal Rule of Civil Procedure Rule 23 with the express goal of empowering litigants, challenging systematic discrimination – particularly segregation – to force courts to order widespread injunctive relief that would protect members of the class as a whole. And ever since, this provision remains as salient to the enforcement of federal civil rights statutes and constitutional claims as it was at its inception.

So, for a multitude of reasons, class actions are often a tool of first resort by advocacy groups to remedy civil rights violations – which we certainly saw in 2024.

Jennifer: Thanks, Nathan. What were some of those major developments in 2024 in this area of civil rights class action litigation?

Nathan: So, class actions in the civil rights context span numerous issues. Last year, given this breadth of subject area, there are well over 100 decisions in this space. However, the percentage of times courts granted a plaintiff’s or plaintiffs’ motion for class certification was down significantly last year, with courts granting certification about 40% of the time – in contrast to 2023, where courts granted class certification around 62% of the time. And so last year we saw a bit of a downtrend as to when these classes were being certified.

Jennifer: Are there any key rulings that our listeners need to know about in this area?

Nathan: So, among all civil rights cases, the United States Supreme Court issued an important ruling in the City Of Grants Pass, Oregon, et al. v. Johnson. In that case, the Supreme Court addressed whether a city’s public camping laws violated the Eighth Amendment’s prohibition against cruel and unusual punishment. Grants Pass, Oregon had ordinances banning camping on public property which can lead to fines and imprisonment. The Ninth Circuit had previously ruled that such laws could not be enforced against homelessness if there were not enough shelter beds available. The plaintiffs, two individuals experiencing homelessness, had filed a class action alleging that Grants Pass’ enforcement of these laws was unconstitutional under the Eighth Amendment. The district court agreed with the plaintiffs and issued an injunction against the city’s enforcement of the public camping laws, and then the Ninth Circuit affirmed the district court’s ruling. The United States Supreme Court then granted certiorari, and it overruled the Ninth Circuit’s decision. The Supreme Court determined that enforcing general public camping laws does not violate the Eighth Amendment. The court opined that the Eighth Amendment’s cruel and unusual punishment clause focuses on the nature of the punishments and not the criminalization of certain behaviors. And so, the court found that the punishments of fines and brief jail time terms imposed by grants passed were not cruel or unusual under the Eighth Amendment. The court also rejected arguments that the enforcement of these laws against individuals who are involuntarily homeless should be considered cruel and unusual, and in the end the court concluded that issues like homelessness and how to address homelessness involved complex policy decisions that were best left for elected representatives and not federal courts to address. So, in conclusion, the court overruled the Ninth Circuit’s ruling, finding that the enforcement of public camping laws by Grants Pass did not violate the Eighth Amendment.

Jennifer: Wow, what an interesting decision. So, you mentioned that there were over a hundred rulings in this area last year. How are things progressing so far in 2025 – have there been any interesting cases, interesting rulings where class certification was granted?

Nathan: Definitely, yeah. So, one example is Rossow, et al. v. Jeppesen. In that case, the plaintiff filed a punitive class action against the defendant, the Director of the Idaho Department of Health and Welfare, challenging a regulation that designated the prenatal use of controlled substances as child abuse, neglect, or abandonment – with the exception, of course, being that any substances that were prescribed by medical professional would not fall under this regulation. The regulation also included a clause that mandated individuals who use controlled substances be listed on the Central Registry for a minimum of ten years, and the plaintiff in this case was placed on the registry in December of 2021 after she tested positive for THC following the birth of her child. The plaintiff filed a class action, alleging violations of due process and equal protection under the United States Constitution on behalf of herself and others in similarly situated positions. Plaintiff filed a motion for class certification, and the court granted the motion. The court had found that the class met the numerosity requirement, as there were over 1,000 women on the registry for a similar reason as the plaintiff. The court also determined that the plaintiff’s claim raised common questions of law and fact, including whether the placement on the Central Registry affected a class member’s access to employment and their other personal rights, substantive rights, and whether there was a discriminatory intent, and how reports of child abuse were substantiated based on prenatal drug use. There were some procedural details and statute of limitations differences between the class members. But despite these differences, the court found that commonality was met because the class shared at least one significant common issue, including being placed on the registry. The court determined that the plaintiff’s claims for declaratory and injunctive relief met the requirements under Rule 23, and ultimately certified the class.

Jennifer: Well, it certainly seems like we will be continuing to see courts granting these motions in 2025, and the plaintiffs’ bar aggressively pursuing certification on behalf of plaintiffs. We know that successful certification often leads to settlements between the parties rather than a continuation of the litigation and ultimately a trial. So, how successful were plaintiffs in securing settlement dollars in 2024?

Nathan: So, settlement dollars in civil rights class actions in 2024 were significant. The top 10 settlements totaled $313.8 million. However, this was a significant decrease from the prior year, when the top 10 civil rights class action settlements in 2023 topped $643.15 million.

Jennifer: Wow, what a difference! So, the top settlement amounts in each area of law have been massive in recent years. And that’s a major trend that we track in the Duane Morris Class Action Review. We will continue to track those numbers in 2025 and keep our listeners aware of developments. Nathan, is there anything else corporate counsel and employers should be on the lookout for over the upcoming year?

Nathan: Definitely. Given the volume of litigation in the civil rights area, as well as the frequency with which these classes are granted, and also burgeoning issues that percolate, for example, claims regarding COVID-19, claims regarding increased issues with homelessness, and others, it’s anticipated that the plaintiffs’ bar will continue to be creative and inventive in this space for the coming year.

Jennifer: Well, thank you so much for all of your great analysis, Nathan – thank you for being here with me today. Listeners, thank you for tuning in. And if you have any questions or comments on today’s podcast, please send us a DM on Twitter @DMClassAction.

Nathan: Thanks, Jen. Thanks for having me on this morning!

May 12, 2025May 12, 2025 by Class Action Defense

New York Federal Court Serves The Association of Tennis Professionals (ATP) With Corrective Notice For Coercive Communications With Class Members

By Gerald L. Maatman, Jr., Nathan Berkebile, and Alek Smolij

Duane Morris Takeaways: On May 7, 2025, in Pospisil, et al. v. ATP Tour, Inc., et al., 25 Civ. 02207, 2025 WL 1327363 (S.D.N.Y. May 7, 2025), Judge Margaret M. Garnett of the U.S. District Court for the Southern District of New York granted in part and denied in part Plaintiffs’ motion for relief under Rule 23(d) regarding Defendants’ communications with putative class members. The lawsuit – brought by professional tennis players and The Professional Tennis Players Association – challenges the Defendants’ alleged anticompetitive practices in running professional tennis tours. Plaintiffs had sought an order preventing all Defendants from communicating with putative class members about the litigation. While the Court stopped short of granting that broad relief, it prohibited Defendant ATP from retaliating or threatening retaliation against potential class members and ordered ATP to issue a corrective notice to putative class members. This ruling serves as a reminder to employers defending class action lawsuits to tread carefully when communicating with potential class members about the litigation. Ensure that any statements you wish to make to employees about the pending lawsuit are vetted by outside counsel to avoid any appearance of coercion.

Case Background

On March 18, 2025, Plaintiffs filed a putative class action on behalf of professional tennis players against Defendants (ATP and other professional tennis organizations) alleging that Defendants engaged in anticompetitive practices in administering their professional tennis tours. Id. at *1. Plaintiffs filed a motion for relief three days after filing the lawsuit, alleging that the day after they filed their Complaint, ATP engaged in coercive communications with putative class members (professional tennis players) during the Miami Open tournament. Id. at *2.

Specifically, Plaintiffs alleged that a member of Defendant ATP’s Board of Directors approached various players with a pen asking them to sign a statement denouncing the litigation filed by Plaintiffs. Id. Plaintiffs argued that this action, coupled with Defendants’ near-total control of the putative class’s ability to earn a living as professional tennis players, was unduly coercive and entitled Plaintiffs to relief under Rule 23(d), including a restriction on Defendants’ ability to engage in any future communications with putative class members. Id.

On April 11, 2025, the Court held a hearing on Plaintiffs’ motion for relief that included testimony from Plaintiffs, as well as from the ATP representative who allegedly approached putative class members during the Miami Open. Id.

The Court’s Order

The Court granted Plaintiffs’ motion for relief in part, and prohibited ATP from retaliating or threatening retaliation against any of its members who are participating (or considering participating) in the putative class action. The Court further directed ATP to distribute a corrective notice drafted by the Court to all putative class members who are members of ATP, and to preserve all documents related to its efforts to communicate with its members concerning the litigation. Id. at *12.

Plaintiffs had moved for relief under Rule 23(d), which courts can use to protect putative class members from misleading communications about the pending lawsuit that would pose a threat to the fairness of the litigation process. Id. at *2. The Court noted that its authority to regulate communications under Rule 23(d) extended to communications in a situation where there is a relationship that is inherently coercive. Id. at *3.

After weighing the parties’ submissions and the live testimony at the evidentiary hearing, the Court held that regardless of ATP’s intent in its communications with putative class members at the Miami Open, such communications could have been viewed as potentially coercive, deceptive, or abusive, which warranted limited relief under Rule 23(d). Id. at *4. The Court found that ATP was the near-exclusive organizer of tournaments that allowed male professional tennis players to earn a living, and that ATP administered incentives for its players including bonus pools and retirement programs. Id. at *4-5. The Court found that ATP had a near-total control over its members’ compensation and benefits. Id. at *5.

Additionally, reviewing the factual record as to ATP’s conduct at the Miami Open, the Court found that ATP unilaterally targeted putative class members with information about the pending lawsuit in at least two instances. Id. at *6. The Court noted that a member of ATP’s Board approached players during the Miami Open with a pen in hand asking them to sign a position statement denouncing the lawsuit. Id. The Court held that regardless of ATP’s intent in this conduct, when paired with ATP’s control over its members’ livelihoods, it had a tendency to unduly influence putative class members and discourage them from participating in the class action. Id. at *8. Moreover, the Court held that ATP’s conduct in encouraging putative class members to sign a statement denouncing the lawsuit posed a threat to the fairness of the litigation process, the adequacy of representation, and the administration of justice generally. Id. at *9.

Although the Court faulted ATP for its conduct, the Court held that Plaintiffs’ requested relief was overbroad, in part because it sought to enjoin all Defendants from communicating with class members rather than just ATP. Id. at *11. ATP was the sole Defendant whose conduct was at issue. The Court noted that narrowly tailored relief was appropriate and granted Plaintiffs relief as to ATP by prohibiting ATP from retaliating or threatening retaliation against its members related to the litigation, requiring ATP to distribute a Court-drafted corrective notice to all of its members, and ordering ATP to preserve all communications related to its efforts to communicate with its members. Id. at *12.

Implications For Companies

The Court’s ruling emphasizes the need for caution by employers when communicating with employees about pending class action lawsuits. Employers hold an inherent position of power and often control the financial livelihood of their employees. Accordingly, if an employer wishes to communicate with its employees about a pending class action lawsuit, those communications must be carefully scrutinized to avoid the appearance of coercion.

May 8, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 100: Key Class Action Fairness Act Developments

Duane Morris Takeaway: Our 100th episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Zev Grumet-Morris discussing the key developments under the Class Action Fairness Act (“CAFA”).

Episode Transcript

Jerry Maatman: Thank you, loyal blog listeners for being here for our 100th episode of our weekly podcast the class Action Weekly Wire. It’s a privilege today to have Zev Grumet-Morris with me to do our 100th podcast. Welcome, Zev.

Zev Grumet-Morris: Great to be here, Jerry. Thanks for having me on the 100th episode.

Jerry: Today, we’re diving into something that has a big impact on litigation in general and class action litigation in particular, the Class Action Fairness Act of 2005. It’s discussed in much detail in our annual Duane Morris Class Action Review. Zev, can you start explaining to our listeners what the CAFA is and why it’s significant?

Zev: Absolutely. So, the Class Action Fairness Act, or CAFA, was signed into law by President George W. Bush on February 18, 2005, and it’s a key statute that expanded federal jurisdiction over large class actions and mass actions. And essentially, it just shifted most of these lawsuits from state courts to the federal courts, which has had major implications for both plaintiffs and for defendants.

Jerry: So how does CAFA function in practice for corporations?

Zev: So, functionally, CAFA provides a tool for defendants, especially big businesses, big employers, to remove class actions from state court to federal court, and that’s a big deal, because federal courts are often viewed as more neutral forums for corporate defendants. And so, this ability to forum shop, if you will, has influenced how both plaintiffs’ lawyers and defense attorneys plan their litigation strategies.

Jerry: I’ve always thought that CAFA underscores the notion that location is everything, just like buying real estate – location, location, location. And those who have defended class actions know it sometimes can be very different in state court as compared to federal court. How easy is it, after CAFA, for a plaintiff to keep a class action in state court as opposed to resisting removal to federal court?

Zev: Well, post-CAFA, it’s gotten very difficult, or at least more difficult. But before CAFA it was pretty easy, actually, for plaintiffs to keep cases in state court. Federal jurisdiction requires that every plaintiff meet a $75,000 amount in controversy threshold, and for complete diversity to exist between the plaintiffs and the defendants. So, that meant that plaintiffs’ lawyers before CAFA could often craft cases to stay in state court, especially in jurisdictions with elected judges who might be less sympathetic to out-of-state corporate defendants.

Jerry: So how did CAFA change that dynamic?

Zev: Well, it changed it fairly significantly. So, under CAFA, just one class member being from a different state than a defendant is enough to create diversity. In addition, the total amount in controversy only needs to exceed $5 million, and the class must have at least 100 members. So, this lower threshold made it much easier for corporate defendants to move cases into federal court.

Jerry: Well, we all know that California, New York, and states of that ilk are epicenters for class action litigation, and their defendants invoke CAFA more often than in other areas of the country, and therefore the jurisprudence on the interpretation of CAFA is probably more advanced in the Second and Ninth Circuit, and especially in the Ninth Circuit, than in other areas of the country. In terms of the last 12 months, what, in your opinion, would be the key decisions that have interpreted CAFA?

Zev: Yeah, and you’re absolutely right with the comment you make about the Ninth Circuit. But, as you point out, it’s not the only circuit that comes out with key decisions. So just this past January, the D.C. Circuit issued a rare CAFA ruling in National Consumers League v. Starbucks. So, the National Consumers League, which is a nonprofit focused on consumer protection, they filed a lawsuit in D.C. Superior Court against Starbucks, alleging that the company had misled customers by claiming to ethically source its coffee and tea, when in reality they were actually sourcing allegedly from farms that were involved in labor abuses and that violated the D.C.’s Consumer Protection Procedures Act, or the CPPA. And they filed this lawsuit on behalf of both NCL and the general public. Now, Starbucks attempted to remove the case to federal court under the CAFA. NCL opposed that removal, arguing that the case didn’t meet the criteria for federal jurisdiction, and then, as it turns out, the court agreed with them. They held that the CAFA did not apply because NCL’s lawsuit was not a class action under Rule 23 or any similar rule. So, although the complaint referenced damages and public interest, NCL explicitly stated that it was not seeking representative damages on behalf of the public which undermined Starbucks’ claim that the amount in controversy exceeded the $5 million threshold. And the court also found that diversity jurisdiction failed, because, even though the parties were from different states, the damages NCL sought amounted to just about $34, more or less, few cups of coffee, and that fell short far short of the $75,000 threshold. So, in the end Starbucks’ argument that potential attorneys’ fees could push the amount over the limit was deemed to be far too speculative, and courts have repeatedly held such fees cannot be aggravated in CPPA cases. So, at the end of the day, the court remanded the action back to the state court.

Jerry: That’s a great analysis. I’ve always thought that CAFA is like a mini trial within a trial in terms of figuring out what procedurally ought to be the venue where a class action is litigated. Well, thanks so much for giving us your insights and thought leadership on CAFA litigation, and how it impacts corporate defendants over 2024 and what we can expect in 2025. Thanks so much for joining us on our 100th podcast.

Zev: Happy to be here, Jerry. Thanks.

May 6, 2025May 6, 2025 by Class Action Defense

Webinar Replay: Mid-Year EEOC Strategy And Litigation Review

By Gerald L. Maatman, Jr., Jennifer A. Riley, Alex W. Karasik, and Gregory Tsonis

Duane Morris Takeaway: Thank you to everyone who joined us yesterday for our Mid-Year EEOC Strategy And Litigation Review webinar! Duane Morris partners Jerry Maatman, Jennifer Riley, Alex Karasik, and Greg Tsonis presented a 30-minute panel discussion analyzing the first six months of lawsuit filings in the Commission’s fiscal year 2025, current strategic enforcement agendas, and key directives from the White House and EEOC leadership shaping government enforcement litigation in 2025.

If you were unable to attend the webinar, a recording is now available on our channel – check it out below. Last week, we published our annual desk reference on EEOC-initiated litigation. Bookmark or download your copy of the EEOC Litigation Review – 2025, which is fully searchable and viewable from any device.

April 25, 2025April 25, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 98: Key Appellate Developments In Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley, senior associate Tyler Zmick, and associate George Schaller with their discussion of the notable appellate rulings shaping class action litigation in 2025.

Episode Transcript

Jennifer Riley: Thank you for being here again for the next episode of our Friday weekly podcast, the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today are Tyler Zmick and George Schaller. Thank you both so much for being on the podcast today.

Tyler Zmick: Thanks for having me, Jen.

George Schaller: Glad to be here, Jen.

Jennifer: So today, we wanted to discuss some trends and important rulings in the area of appeals in class action litigation. Parties have limited options when it comes to seeking interlocutory appellate review of a class certification decision. What are some typical ways in which parties can move for an interlocutory review?

Tyler: So, the main mechanism to get interlocutory appeal and review of a class certification order is Rule 23(f) of the Federal Rules of Civil Procedure. Under that rule, a party can ask the federal appellate court for permission to appeal within 14 days of the district court issuing an order that either grants or denies class certification. Another avenue is seeking interlocutory appellate review of a district court decision under a federal statute, 28 U.S.C. § 1292(b). Now, Section 1292(b) appeals are especially helpful in complex cases to correct early errors of law, that, if put off until after final judgment, might require the parties to redo years of extensive litigation.

Jennifer: George, can you explain to our listeners what are the primary differences between those two options? In particular, what is the benefit of Rule 23(f)?

George: Sure, Jen, so unlike interlocutory appeals under Section 1292(b), Rule 23(f) does not require a district court to certify an issue for appeal. Moreover, Rule 23(f) does not include the potentially limiting requirements of Section 1292(b) under which the district court can certify an issue for appeal only where an order involves a controlling question of law as to which there’s substantial ground for difference of opinion, and where an immediate appeal from the order may materially advance the ultimate termination of the litigation.

Jennifer: Thanks, George. So here’s a question that I get asked quite often – how likely is it that a Rule 23(f) petition will get granted by the appellate court?

Tyler: So, studies have actually been done on that very issue. And those studies show that appellate court orders or appellate courts deny approximately 75% of Rule 23(f) petitions to appeal class cert orders. And most of those denials come by way of summary orders that do not provide any reasoning. So basically, the court says ‘petition denied because I said so.’

Jennifer: Do you have any examples of some rulings granting petitions for appeal over the past year in particular?

George: Yes, so the plaintiffs in Richards, et al. v. Eli Lilly & Co. filed a collective action alleging that the defendant failed to promote older employees in violation of the Age Discrimination in Employment Act, or the ADEA. The court granted the plaintiff’s motion for conditional certification, and the defendant moved to certify an interlocutory appeal and stay the action. The court granted the defendant’s motion, and the court first analyzed whether the issue at hand was a pure question of law rather than a factual dispute. The court concluded that the question of the proper standard for collective action certification, whether it be the more lenient modest factual showing approach or the stricter preponderance of evidence standard, was a question of law suitable for appeal. The court assessed whether the resolution of the legal question would significantly impact the course of the litigation. The court also determined that clarifying the standard for certification would affect the size and scope of the collective action, thereby impacting settlement negotiations and potentially expediting or prolonging the litigation process. The court further considered whether there were substantial grounds for a difference of opinion on the legal issue. The court noted conflicting decisions in different circuits and within its own circuit, which indicated a genuine dispute over the appropriate standard for certification. Finally, the court concluded that resolving the certification issue would ultimately expedite the progression of the lawsuit. Accordingly, the court granted the defendant’s motion for an appeal, certifying the question of the proper standard for collective action certification of an ADEA claim.

Jennifer: Thanks, George, very interesting to get some of the court’s rationale in graining that petition, and we’ll see what the Court of Appeals decides in that case. Now that we are well into 2025, have there been any interesting rulings so far this year?

Tyler: Yes, there have been a few. One example of a notable ruling was issued by the Tenth Circuit Court of Appeals in March of this year, in the case named Quint v. Vail Resorts. The plaintiffs in that case filed a class action against their employer, Vail Resorts, in federal court in Colorado, alleging violations of state and federal labor laws. Now, around the same period of time, similar claims were being pursued in California state court by a different group of employees in a case called Hamilton v. Vail. The claims in the Hamilton case were ultimately settled, so the Vail defendant in the Colorado federal case asked the court for a stay to avoid overlapping litigation on the same claims. The district court agreed and paused the federal case until all appeals in the Hamilton case were resolved. Meanwhile, in California state court, the Colorado plaintiffs objected to the Hamilton settlement, and when the state trial court overruled those objections to the settlement, the plaintiffs appealed to the California Court of Appeals, and the California Appellate Court then ruled in favor of the Colorado plaintiffs, and then allowed them to intervene in the state court trial action and the court overturned the approval of the Hamilton settlement. The defendant then requested review from the California Supreme Court, but that court declined. As a result, the condition that triggered the end of the stay in the Colorado federal court case – which was final resolution of the Hamilton appeals – was met. And so back in federal court, the Colorado plaintiffs moved to lift the stay that had been in effect in that case, and the Tenth Circuit ultimately held that the stay had already expired on its own terms, and since there was no longer an active stay to lift, the Tenth Circuit found that the appeal was moot, because there was nothing left to resolve. So, the Tenth Circuit, therefore, dismissed the appeal.

Jennifer: Thanks so much for those examples. I anticipate that appeals will continue to be granted sparingly, and the courts will continue to provide little guidance to the parties on what will and won’t be successful in terms of arguments in these petitions. So, I think the parties will have to continue to develop some novel approaches and evolve their strategies in order to continue to obtain success in this area. Well, thanks so much for all of the great analysis, George and Tyler, and thank you for being here on the podcast with me today, listeners. Thank you so much for tuning in.

Tyler: Thanks for having me, Jen, and thank you, listeners.

George: Thanks, everyone. Have a great weekend.

April 22, 2025 by Class Action Defense

U.S. Supreme Court Clarifies Pleading Standards In ERISA Prohibited Transactions Cases

By Gerald L. Maatman, Jr., Rebecca S. Bjork, and Jesse S. Stavis

Duane Morris Takeaways: On April 17, 2025, the U.S. Supreme Court issued a decision in Cunningham v. Cornell University, No. 23-1007, 2025 WL 1128943 (U.S. Apr. 17, 2025), that clarified the pleading standards for allegations of prohibited transactions under the Employee Retirement Income Security Act (“ERISA”). The Supreme Court held that in order to survive a motion to dismiss, plaintiffs need only plead the elements of a prohibited transaction, and that there is no need to affirmatively argue that statutory exceptions do not apply. As the Supreme Court acknowledged, this ruling has the potential to unleash a floodgate of litigation over transactions that technically meet the definition of a prohibited transaction, but that are ultimately legal under one or more of the ERISA’s exceptions. However, the Justices provided a number of recommendations for responding to meritless claims. ERISA plan sponsors and administrators should carefully study these recommendations to avoid the expense of litigating threadbare accusations of violations.

Background

Section 1106 of the ERISA supplements the well-established common-law fiduciary duties binding plan administrators by defining a number of “prohibited transactions” that are deemed “likely to injure the … plan.” Commissioner v. Keystone Consol. Industries, Inc., 508 U.S. 152, 160 (1993). Under Section 1106, a plan is prohibited from engaging in certain transactions with a “party in interest,” a category that includes not only plan administrators, sponsors, and officers, but also entities “providing services to [the] plan. § 1002(14).

The issue with Section 1106 is that it prohibits, on its face, a number of transactions that are necessary for the operation of a modern retirement or benefits plan. For example, Subsection 1106(a)(1), which was at issue in Cunningham, prohibits a fiduciary from transferring or furnishing any assets, goods, services, or facilities to a party in interest. Because plan sponsors frequently transfer assets to administrators, who are parties in interest, they are technically engaged in prohibited transactions. However, a separate section of the statute — Section 1108 — provides 21 exceptions to this prohibition, including one common-sense one exempting transactions that involve “[c]ontracting or making reasonable arrangements with a party in interest for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor.” § 1108(b)(2)(A).

At issue in Cunningham were the pleading standards for claims under Section 1106. Defendant Cornell University retained TIAA and Fidelity to provide investment options and recordkeeping services to participants in defined-contribution 403(b) plans. In exchange, Cornell compensated these administrators with fees paid by plan participants. This is a very standard arrangement that, on its face, violated Section 1106(a)(1), but also fell under the exception set forth in Section 1108(b)(2)(A).

The named plaintiff in Cunningham, a participant in the plan, sued on behalf of a putative class alleging that Cornell had engaged in prohibited transactions. The complaint merely set forth the elements of a prohibited transaction, and did not address the Section 1108 exceptions. Cornell moved to dismiss the complaint. The District Court granted the motion, holding that, in addition to pleading the statutory elements, a plaintiff in a prohibited transactions case must also allege “some evidence of self-dealing or other disloyal conduct.” Cunningham v. Cornell University, No. 16 Civ. 6525, 2017 WL 4358769, at *10 (S.D.N.Y. Sept. 29, 2017), aff’d, 86 F.4th 961 (2d Cir. 2023), rev’d and remanded, No. 23-1007, 2025 WL 1128943 (U.S. Apr. 17, 2025). On appeal, the Second Circuit affirmed the grant of dismissal, but for different reasons. The Second Circuit held that while there is no requirement to plead self-dealing or other disloyal conduct, a plaintiff alleging a violation of Section 1106 must also show that the transaction does not qualify for an exception under Section 1108. Cunningham v. Cornell University, 86 F.4th 961, 975 (2d Cir. 2023). This ruling placed the Second Circuit in conflict with the Eighth Circuit, which had held that there is no requirement to address Section 1108 to survive a motion to dismiss. See Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 601. The Supreme Court granted certiorari to resolve the circuit split.

The Supreme Court’s Decision

In a unanimous decision authored by Justice Sonia Sotomayor, the Supreme Court reversed the Second Circuit’s grant of dismissal. In siding with the plaintiffs, the Supreme Court held that the Section 1108 exceptions are affirmative defenses, not implied elements, and that a plaintiff need only provide a plausible argument that Section 1106 has been violated to survive a motion to dismiss.

The Supreme Court noted that Section 1106(a)(1)(C) contains only three elements. A plaintiff must allege that a fiduciary: (1) caused a plan to engage in a transaction; (2) that the fiduciary knew or should have known constituted the direct or indirect furnishing of goods, services, or facilities; (3) between the plan and a party in interest. Cunningham, 2025 WL 1128943, at *4. According to the Supreme Court, establishing these elements is sufficient to plead a violation, and “[n]othing in that section removes from its categorical bar transactions that were necessary for the plan or involved reasonable compensation.” Id. Although Section 1108 sets out a number of exemptions, these exemptions are affirmative defenses, which must be established by the defendant. The Supreme Court noted that it would be impractical to require plaintiffs to demonstrate that none of the twenty-one separate statutory exceptions or hundreds of regulatory exceptions apply. Id. at *6.

Plaintiff argued that lowering the pleading standards would result in “an avalanche of meritless litigation,” but the Supreme Court reasoned that defendants and courts have access to tools to prevent meritless claims from moving forward. Id. at *7. For example, Federal Rule of Civil Procedure 7 allows district courts to require plaintiffs to file a reply to a defendant’s answer to show why asserted exceptions do not apply. Defendants can also argue that there is no injury in fact to convey standing. Finally, in cases where it is obvious that a Section 1108 exception applies and that plaintiffs have no good-faith basis to believe that the law is violated, courts can issue sanctions under Rule 11 or take advantage of the ERISA’s fee-shifting provisions to penalize plaintiffs for meritless allegations. Id. at *8.

In a brief concurring opinion, Justice Samuel Alito, who was joined by Justices Clarence Thomas and Brett Kavanaugh, noted that the result, while consistent with the ERISA’s statutory text, would likely cause “untoward practical results” because almost all plan fiduciaries must engage parties in interest to provide certain services. The concurrence urged District Courts to use all tools at their disposal, including reply pleadings pursuant to Rule 7, to prevent meritless cases from proceeding to discovery. Id.

Implications Of The Decision

The Supreme Court’s ruling in Cunningham substantially lowers the bar for plaintiffs alleging prohibited transactions, and will likely lead to an uptick, if not an explosion, in filings. Defendants in these cases can no longer point to a plaintiff’s failure to discuss statutory exceptions to secure a motion to dismiss. Rather, defendants must provide clear evidence that an exception applies in their responsive pleadings. Where necessary, defendants should be prepared to petition District Courts to allow for a reply pleading under Rule 7. This is a rarely used tool, but it is one that courts may have to employ more frequently in the aftermath of Cunningham. And where defendants believe that a claim is entirely baseless and has been made in bad faith, they should encourage courts to use the full array of tools at their disposal, including fee-shifting and Rule 11 sanctions, to disincentivize meritless litigation.

April 21, 2025April 22, 2025 by Class Action Defense

Idaho Federal Court Denies Beauty Product Manufacturer’s Bid To Strike Punitive Damages In EEOC Retaliation Suit

By Gerald L. Maatman, Jr., George J. Schaller, and Brett Bohan

Duane Morris Takeaways: On April 15, 2025, in EEOC v. Elevation Labs, LLC, No. 23-CV-00318, 2025 U.S. Dist. LEXIS 73702 (D. Idaho Apr. 15, 2025), Judge Lynn Winnmill of the U.S. District Court for the District of Idaho denied Elevation Lab’s untimely motion to strike punitive damages for the EEOC’s failure to comply with Idaho state law. The EEOC lawsuit asserts allegations of retaliation after a former employee complained of discrimination.

This ruling illustrates the significance of asserting timely defenses and that federal courts analyze procedural motions, including motions to strike, with strict adherence to the operative federal rule of civil procedure. In this case, the Court relied on Defendant’s failure to demonstrate striking the EEOC’s prayer for punitive damages was warranted under procedural rules.

Case Background

On July 7, 2023, the EEOC, on behalf of charging party Rachel Johnson, filed a lawsuit against her former employer, Elevation Labs, LLC (“Elevation”) regarding allegations of retaliation under Title VII of the Civil Rights Act of 1964. The EEOC alleged Elevation retaliated against Ms. Johnson after she complained of discrimination. Id. at *2. The EEOC’s Complaint included allegations for punitive damages against Elevation within its prayer of relief. Id.

On September 18, 2023, Elevation answered the Complaint. Id. After the parties litigated for over a year-and-a-half and engaged in discovery, Elevation moved to strike Plaintiff’s prayer for punitive damages under Federal Rule of Civil Procedure 12(f) on February 26, 2025. Id. Elevation argued the EEOC did not comply with Idaho Code § 6-1604(2), which requires plaintiffs to “obtain court permission before including a request for punitive damages in the complaint,” before it filed suit. Id.

The Court’s Order

The Court denied Elevation’s motion to strike and found the motion failed on two independent grounds, including: (1) the motion was untimely and (2) the motion lacked merit. Id. at *1.

First, under Federal Rule of Civil Procedure 12(f), a party may file a motion to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Id. at *3. In addition, a party must move to strike “within 21 days after being served with the pleading.” Id. Elevation however did not move to strike until almost 17 months after service of the Complaint, and therefore, the Court denied the motion as untimely. Id.

Second, the Court held that, even if it considered the merits of the motion to strike, Elevation’s motion still failed. Id. In liberally applying Rule 12(f), the Court determined “whether the prayer for punitive damages should be stricken because the EEOC did not comply with the gatekeeping mechanism in [the] Idaho Code § 6-1604(2) – the motion lacks merit.” Id at *4. The Court opined that the EEOC asserted a federal claim in federal court, “[w]hich of course means that federal law governs the substance and procedure of its claim.” Id. Elevation did not dispute this rule but nevertheless contended federal law “is silent with respect to any pleading standard or procedural prerequisite,” so the Idaho Code must fill “the silence.” Id.

The Court disagreed. The Court instead held the only prerequisite to requesting punitive damages in Title VII cases requires the EEOC to plead “sufficient factual matter to permit a reasonable inference that defendant engaged in intentional discrimination with malice or reckless indifference to plaintiff’s federally protected rights.” Id. at *5. The Court further held that Federal Rule of Civil Procedure 8(a)(3) fills the silence and enables litigants to seek “different types of relief” in their pleadings permitting plaintiffs to seek punitive damages without first seeking court permission. Id.

In sum, the Court determined that state procedural law on the ability to request punitive damages had no place in federal court proceedings involving federal law claims. See id. Instead, federal substantive and procedural law exclusively govern such claims. See id. at *6. Therefore, the Court denied Elevation’s motion to strike the EEOC’s prayer of relief for punitive damages finding Elevation’s reliance on Idaho state law was misplaced and its motion was untimely. Id.

Implications For Employers

The Court’s ruling in Elevation Labs signals the EEOC’s continued litigation enforcement efforts in federal courts for retaliation claims and its pursuit of all available damages.

This case demonstrates the pitfalls of moving under inapplicable state court rules in federal court. Here, the Court rejected Elevation’s attempt to inject state court procedural requirements and the Court disagreed that state statutory requirements impact federal claims under Title VII.

Employers, when embroiled in EEOC litigation, must analyze their defenses swiftly to assert a timely defense and to ensure that defense is applicable. Otherwise, Employers may find themselves moving too late and, without defenses, creating exposure in already difficult litigation.

April 17, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 97: Key Trends In Antitrust Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Sean McConnell and senior associate Daniel Selznick with their discussion of the key trends analyzed in the 2025 edition of the Antitrust Class Action Review, including the rise of pricing algorithm claims and notable class certification rulings.

Bookmark or download the Antitrust Class Action Review – 2025, which is fully searchable and viewable from any device.

Episode Transcript

Jerry Maatman: Welcome to our listeners. Thank you for being here today for our weekly podcast series, the Class Action Weekly Wire. I’m Jerry Maatman of Duane Morris, and joining me today are Sean McConnell, the chair of the Duane Morris Antitrust and Competition Group, and senior associate Daniel Selznick, who are both from our Philadelphia office. Gentlemen, thank you for being on the podcast today.

Sean McConnell: Thank you, Jerry, happy to be part of the podcast.

Daniel Selznick: Yeah, thanks, Jerry. Glad to be here.

Jerry: Today on the podcast we’re discussing the recent publication of this year’s edition of the Duane Morris Antitrust Class Action Review. Listeners can find this e-book publication on our blog, the Duane Morris Class Action Defense Blog. Sean, can you tell our listeners a little bit about this desk reference publication?

Sean: Absolutely, Jerry. In 2024, class action litigation involving antitrust claims had several key developments. Most antitrust class actions are settled before trial, and one of the most crucial phases in the cases is class certification. Thus, the order granting or denying a motion to certify a class in these cases is critical. To assist with understanding what this means for employers facing antitrust claims, Duane Morris has released the Antitrust Class Action Review for 2025, which analyzes the key rulings and litigation developments from 2024, and the significant trends that are apt to impact these types of actions in 2025. We hope that companies will benefit from this resource in their compliance with these evolving laws and standards.

Jerry: I’ve always thought and viewed class certification decisions as the Holy Grail in these sorts of cases. Daniel, what in your mind are the takeaways from the publication with regard to litigation in this space over the past year?

Daniel: Sure. So, one of the most notable shifts we’ve seen is the rise in cases involving pricing algorithms, information sharing, and data management. This trend really mirrors the technological evolution within organizations. So as businesses rely more heavily on automated pricing and complex data systems, plaintiffs’ lawyers are adapting their strategies to challenge those tools under antitrust laws.

Jerry: Sean, in your experience, how are these new strategies playing out in the courts? How did the plaintiffs do this past year?

Sean: Great question, Jerry. We saw a major development in the Gibson v. Cendyn Group case in the Ninth Circuit, where the Department of Justice actually stepped in. They argued that certain types of information sharing can be illegal even if there’s no explicit agreement on prices. That’s a pretty aggressive position. And while it’s yet to be clear if courts will accept it, I’d expect that stance to influence the plaintiffs’ bar going forward. And despite the change in administration, we’ve seen consistent positions from both DOJ and FTC with respect to information sharing going forward in 2025.

Jerry: Very interesting in terms of how that theory evolved. Daniel, what about labor market cases that in the year before had been very, very hot – how did those turn out over the last 12 months?

Daniel: So, in contrast to recent years, 2024 actually saw fewer challenges related to labor market restraints. And one possible reason is the DOJ’s limited success in prosecuting those cases which might be giving plaintiffs pause before jumping into that area.

Jerry: Let’s pivot to the issue of class certification, that Holy Grail of the plaintiffs’ bar. Sean, I understand there was quite a bit of activity this year in the pharmaceutical space.

Sean: Yes, absolutely, Jerry. Once again, Big Pharma and life sciences remained a core focus for antitrust class actions. A big factor is the structure of the pharmaceutical industry – when the supply chain and harm mechanism are relatively straightforward, courts are more likely to certify a class. For example, In Re Lipitor and In Re Actos, both cases from mid-to-late 2024, we saw the courts granting class certification based on those clearer market structures.

Jerry: Daniel, one of the things we’ve seen in other spaces is a huge battle over predominance, and how defendants latch onto that particular defense to sometimes prevent class certification. How did that play out in this space over the past 12 months?

Daniel: Yeah. So, Jerry, that’s still a major battleground courts are doing deep dives into whether plaintiffs can provide class wide evidence that shows that common issues predominate. So it’s not just a box-checking exercises – judges are really scrutinizing the proposed evidence, and that was a recurring theme in 2024.

Jerry: How about on the issue of numerosity under Rule 23(a)(1) in terms of how that’s played out in the antitrust sector?

Daniel: Sure. So you know, the numerosity requirement provides that plaintiffs must show that it’s impractical to join all members individually. And in antitrust cases, courts tend to say that fewer than 20 members likely won’t cut it, but over 40 usually will. So, for classes in that 20-to-40 range, courts look at other factors. A great example from this past year is the In Re EpiPen Direct Purchaser Litigation. And in that case, even where there was a proposed class of over 40 members, all of which, whom you know, had pretty large claims, the court said that joinder was not impractical, and therefore denied certification, so it shows how fact-specific the analysis can be.

Jerry: We, of course, studied class certification rates across the board in all spaces of litigation, and the plaintiffs’ bar did pretty well, and certified cases at a range of about 65 to 66% across the board. How did things go for the plaintiffs’ bar in the antitrust sector?

Sean: In 2024, Jerry, it was pretty consistent with respect to antitrust cases where class certification was granted in 68% of those actions, a total of 15 out of 22 motions from the past year. So, while a majority of plaintiffs were successful, there’s still a significant portion facing uphill battles, especially where the evidence class structure and damages and market dynamics are quite complex.

Jerry: That’s an interesting look at inside baseball statistics. I’ve always thought that the business model of the plaintiffs’ bar in this area is identify and file the case, certify the case, and then monetize the case. In terms of the study of class action settlements in the antitrust area, how did the plaintiffs’ bar do in 2024?

Sean: Plaintiffs were hugely successful in 2024, although not quite as successful as 2023. The top 10 antitrust class action settlements totaled just over $8.42 billion in 2024, compared to $11.74 billion in 2023, which had been a nearly threefold increase over the 2022 amount.

Jerry: Those are certainly eye-popping numbers in terms of settlements. My sense is 2025 is apt to see even bigger, if not consistent numbers, in terms of those top 10 antitrust settlements. Well, thank you, Sean and Daniel, for being here today, and thank you listeners for tuning into this week’s Class Action Weekly Wire.

Daniel: Thanks, Jerry. Glad to be on. And thank you, listeners.

Sean: Thanks so much, everyone.