Duane Morris Takeaways:Register today and join us Thursday, January 30, 2025, at a Duane Morris Exclusive Event – our Book Launch for the Duane Morris Class Action Review – 2025! This event will be offered as an in-person panel discussion and a Zoom webinar.
The DMCAR e-book is an essential desk reference that can be viewed on any device and is fully searchable with selectable text. The 2025 Review analyzes 1,441 class action rulings from state and federal courts in 23 areas of law, providing a comprehensive review of the class action landscape. Details on the 10 key trends identified this year and a copy of the Executive Summary are featured on the DMCAR website here.
You are invited to join Duane Morris Partners Gerald L. Maatman, Jr. and Jennifer Riley for a panel discussion marking the release of the Duane Morris Class Action Review – 2025. Please register here to reserve your spot today! The event will be offered as an in-person discussion or join us live via Zoom webinar.
Featuring authors Gerald L. Maatman, Jr., Jennifer A. Riley and American Lawyer Media staff reporter Amanda Bronstad in a discussion of the key class action developments and decisions in 2024 and what companies can expect in 2025. We hope to see you there!
In-Person Event Location: Convene CityView Duane Morris Plaza | 13th Floor 30 South 17th Street, Philadelphia, PA 1910
Registration: 3:30 p.m. to 4:00 p.m. Eastern Book Launch and Discussion: 4:00 p.m. to 5:00 p.m. Eastern Cocktail Reception: 5:00 p.m. to 6:00 p.m. Eastern
Duane Morris Takeaway: As the ultimate referee of law, the U.S. Supreme Court traditionally has defined the playing field for class action litigation and, through its rulings, has impacted the class action landscape. The past year was no exception. Although the U.S. Supreme Court did not directly address the procedural mechanisms that govern class actions during its most recent term, it issued multiple decisions that are sure to influence the class action space.
The most momentous decision came in Loper Bright Enterprises v. Raimondo, et al., 144 S. Ct. 2244 (2024), wherein the Supreme Court overruled Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and undercut the authority of administrative agencies to engage in rulemaking. In doing so, the Supreme Court made clear that lower courts faced with class actions brought under the FLSA, ERISA, and TCPA, for example, must exercise their independent judgment in interpreting statutory provisions without deference to administrative agencies’ interpretations of those statutes.
The Supreme Court also issued a trio of mixed rulings regarding arbitration, including decisions that bear on the use of the Federal Arbitration Act to enforce arbitration agreements with class action waivers, and a number of miscellaneous rulings that likely will impact class actions in the areas of securities fraud, civil rights, preemption, and Title VII.
Watch partner Jerry Maatman discuss this trend in more detail in the video below:
Loper Bright Enterprises v. Raimondo, et al., 144 S. Ct. 2244 (2024)
The so-called Chevron doctrine, a fixture of administrative law for nearly four decades, emanates from the U.S. Supreme Court’s decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and essentially required courts to defer to an agency’s reasonable interpretation of ambiguous laws. The Chevron doctrine involves two steps: (i) first, a court should determine whether the statute in question is unambiguous and, if so, apply its plain meaning; and (ii) second, if the court finds the statute ambiguous, the court should defer to the agency’s interpretation so long as the interpretation is reasonable or permissible.
On June 28, 2024, the U.S. Supreme Court in Loper Bright Enterprises v. Raimondo, et al., 144 S. Ct. 2244 (2024), overturned the 40-year-old Chevron doctrine and held that, when Congress passes an ambiguous law, there is no implied delegation of power to an administrative agency to define its own authority or to say that the law means. The plaintiffs, two sets of commercial fishermen, challenged the authority of councils established under the National Marine Fisheries Service (NMFS) to promulgate a rule requiring Atlantic herring fishermen to cover costs of federally-mandated observers aboard their vessels under the Magnuson-Stevens Fishery Conservation and Management Act (MSA).
Two district courts granted summary judgment, concluding that, where a statute governing its authority falls within the Chevron doctrine, the NMFS is authorized to promulgate rules, and courts are required to defer to its interpretations of ambiguous statutes. Both the D.C. and the First Circuit courts affirmed. Id. at 2256-57. The U.S. Supreme Court granted certiorari regarding the question of Chevron’s continued validity. Id. at 2257.
The Supreme Court vacated the judgments of the courts below and remanded. The Supreme Court held that requiring judicial deference to agency interpretations violates the Administrative Procedure Act (APA), which expressly grants courts authority to review and decide issues of law. Id. at 2263. The Supreme Court explained that, unlike courts, “agencies have no special competence in resolving statutory ambiguities,” particularly when it comes to statutes governing agencies’ own power or authority. The Supreme Court concluded that “Chevron gravely erred.” Id. at 2266.
Loper Bright is poised to impact class actions of all types. In class action litigation, plaintiffs routinely invoke the Chevron doctrine as a powerful tool to pursue broad claims against corporate defendants based on administrative regulations that often exceed statutory requirements. Invoking this doctrine, plaintiffs argue that a court must defer to agency rulemaking whenever the agency’s interpretation supports the litigant’s claims or undermines the defenses of their opponents. For decades, for example, the U.S. Department of Labor (DOL) has enforced the FLSA and other wage and hour laws through extensive regulations and administrative guidance. Whereas the regulations enjoyed considerable deference under Chevron, their future is uncertain under Loper Bright as the decision now requires courts to exercise their independent judgment. Litigants already are feeling the effect of Loper Bright on the FLSA, as demonstrated by a recent decision by the Fifth Circuit invalidating an FLSA regulation regarding the tip credit.
In Restaurant Law Center, et al. v. United States Department of Labor, 2024 WL 4609380 (5th Cir. Aug. 23, 2024), the Fifth Circuit invoked Loper Bright to vacate the DOL’s so-called “80/20” rule. The FLSA defines a “tipped employee” as any employee “engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips,” 29 U.S.C. §207(t), and allows an employer to pay such persons a cash wage less than minimum wage. The DOL adopted a regulation establishing limits on the amount of time tipped employees may perform non-tipped work at the cash wage, the thought being that, if the worker spends too much time performing non-tipped activities, the worker is no longer “engaged in [the tipped] occupation.” Under the rule, if an employee spends (i) more than 20% of a workweek performing non-tipped activities or (ii) more than 30 continuous minutes per shift performing non-tipped duties, the employee does not qualify as “tipped,” and the employer may not pay the cash wage. The Fifth Circuit found the 80/20 rule inconsistent with the statutory text of the FLSA because it impermissibly “disaggregates the component tasks of a single occupation” and thus “applies the tip credit in a manner inconsistent with the FLSA’s text.” Id. at *8-9. Citing Loper Bright and noting the existence of the 80/20 standard since 1988, the Fifth Circuit nonetheless was “not persuaded that the 80/20 standard, however longstanding, can defeat the FLSA’s plain text.” Id. at *9.
The Supreme Court foreshadowed another casualty of Loper-Bright in its decision in Helix Energy Solutions Group, Inc. v. Hewitt, 598 U.S. 39 (2023), wherein it held that highly-compensated employees paid on a daily, hourly, or shift basis do not satisfy the FLSA’s salary basis test. In his dissent, Justice Kavanaugh noted that the Supreme Court’s holding depended on the FLSA regulations, and those “regulations themselves may be inconsistent with the Fair Labor Standards Act.” Id. at 67 (Kavanaugh, J., dissenting). Because the relevant FLSA statutory language regarding exemptions “focuses on whether the employee performs executive duties, not how much an employee is paid or how an employee is paid,” Justice Kavanaugh concluded that it was “questionable whether the Department’s regulations — which look not only at an employee’s duties but also at how much an employee is paid and how an employee is paid — will survive if and when the regulations are challenged as inconsistent with the Act.” Id. Justice Kavanaugh’s implicit invitation to issue such a challenge, coupled with the demise of Chevron, very well may bring more changes to longstanding regulations that fuel hundreds of class action lawsuits each year.
Loper Bright also may fuel challenges related to fiduciary investment strategies. In a rule published in 2022, the U.S. Department of Labor explicitly allowed ERISA fiduciaries to consider environmental, social, and governance factors in selecting investments. In Utah v. Su, 109 F.4th 313 (5th Cir. 2024), 26 states brought suit to challenge the DOL’s rule, and the Fifth Circuit remanded the suit to the U.S. District Court for the Northern District of Texas with instructions to consider the rule in light of Loper Bright. Thus, courts may open the door to class claims for breach of fiduciary duty by investment managers that prioritize environmental, social, and governance factors above profitability.
Defendants also are apt to use Loper Bright to challenge the FCC’s interpretations of the TCPA. With its strict requirements and statutory damages, the TCPA is a frequent source of class claims. In a recent class certification decision involving claims for violation of the TCPA, in Mantha, et al. v. QuoteWizard.com, LLC, 347 F.R.D. 376 (D. Mass. 2024), the district court refused under Loper Bright to defer to the FCC’s interpretation of “person” to mean “residential telephone subscriber.” It instead found that the term “person” in the TCPA’s private-right-of-action provision includes anyone whose number is listed on the national do-not-call registry regardless of who listed it. Id. 394 & n.17.
In sum, this new doctrine of administrative law is already affecting FLSA, ERISA, and TCPA class actions, and has the potential to reshape other laws that provide the bases for class claims and defenses.
In 2024, the U.S. Supreme Court issued three decisions regarding arbitration under the Federal Arbitration Act, each of which has the potential to put more authority back in the hands of courts. The Supreme Court decided: (1) that district courts lack discretion to dismiss and, rather, must stay lawsuits pending the completion of arbitration, Smith v. Spizzirri, 601 U.S. 472 (2024); (2) that workers need not work for companies in the transportation industry to qualify for the FAA’s transportation worker exemption, Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024); and (3) where parties have agreed to two contracts – one sending arbitrability disputes to arbitration, and the other sending arbitrability disputes to the courts – a court must decide which contract governs, Coinbase, Inc. v. Suski, 144 S. Ct. 1186 (2024).
In Smith v. Spizzirri, 601 U.S. 472 (2024), the Supreme Court issued a unanimous decision holding that, when a district court determines that a plaintiff’s claims are arbitrable, the district court does not have discretion to dismiss the lawsuit. In this case, delivery drivers brought wage and hour claims against their former employer regarding their alleged misclassification as independent contractors. Although plaintiffs agreed that their claims were subject to arbitration, they opposed dismissal of their lawsuit and asked the district court to stay the case pending arbitration. Although the district court and the Ninth Circuit found dismissal consistent with the FAA, the U.S. Supreme Court disagreed. Interpreting § 3 of the FAA, which states that the court “shall on application of one of the parties stay the trial of the action until [the] arbitration” has concluded, the Supreme Court held that this statutory language “creates an obligation impervious to judicial discretion.” Id. at 476. It also found that the structure and purpose of the FAA supports interpreting § 3 as mandating a stay rather than dismissal. Based on § 16, which allows for an automatic interlocutory appeal of an order denying a motion to compel arbitration but not for an order granting a motion to compel arbitration, the Supreme Court reasoned that Congress sought to avoid dismissal, which triggers the right to an immediate appeal, and instead intended to move arbitrable disputes out of courts and into arbitration as quickly and easily as possible. Id. at 5-6. Finally, the Supreme Court explained that stays are preferable because they allow federal courts to maintain jurisdiction to resolve disputes between the parties. Id.
In Bissonnette, et al. v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024), the Supreme Court issued another decision regarding the FAA’s transportation worker exemption. The Court again cautioned that the exemption does not apply in “limitless terms” and, instead, applies only where workers play “a direct and necessary role in the free flow of goods across borders.” Id. Section 1 of the FAA exempts from arbitration “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The third category commonly is called the “transportation worker” exemption. Although the U.S. Supreme Court issued two decisions in 2022 – Southwest Airlines Co. v. Saxon, et al., 596 U.S. 450 (2022), and Domino’s Pizza, LLC v. Carmona, et al., 143 S. Ct. 361 (2022) – construing the FAA’s transportation worker exemption narrowly, many courts failed to heed that direction. As a result, in April 2024, the U.S. Supreme Court again weighed in on the issue in Bissonnette, et al. v. LePage Bakeries Park Street, LLC, 61 U.S. 246 (2024).
The defendant in Bissonnette produced baked goods in 19 states and distributed its products across the country. The plaintiff franchisees contracted with the defendant to distribute the products in local markets. The plaintiffs filed a putative class action, and the defendant moved to compel arbitration on an individual basis. The district court granted the motion, the Second Circuit affirmed, and the U.S. Supreme Court granted further review. As in Saxon, the U.S. Supreme Court emphasized in Bissonnette that the test for application of the transportation worker exemption focuses on the work performed by the plaintiff and not the employer’s industry. Addressing the employer’s argument that such a test would make virtually all workers who load or unload goods, such as pet shop employees and grocery store clerks, exempt transportation workers, the Supreme Court disagreed. It opined that the exemption has “never” been interpreted to apply in “such limitless terms.” Id. at 256. The Supreme Court emphasized that, for the exemption to apply, the worker “must at least play a direct and necessary role in the free flow of goods across borders.” Id. The Supreme Court thus vacated the order compelling arbitration and remanded for further proceedings.
Finally, on May 23, 2024, the U.S. Supreme Court issued its decision in Coinbase, Inc. v. Suski, et al., 144 S. Ct. 1186 (2024), holding that, where parties have agreed to two contracts – one sending disputes regarding arbitrability to arbitration, and the other sending disputes regarding arbitrability to the courts – a court (and not an arbitrator) must decide which contract governs. In connection with the sweepstakes offered by Coinbase, a cryptocurrency exchange platform, users filed a class action complaint alleging that the sweepstakes violated various California consumer protection statutes. Citing an arbitration clause in the User Agreement, Coinbase moved to compel arbitration on an individual basis. The arbitration clause in the User Agreement included a delegation clause that allocated decisions concerning whether disputes were arbitrable to the arbitrator. The users argued that the court, and not an arbitrator, should decide the arbitrability issue and, in support, cited a second contract – the Official Rules – they entered in connection with the sweepstakes. In contrast to the earlier executed User Agreement, the Official Rules contained a forum selection clause that required parties to decide all disputes related to the sweepstakes in California courts. The users argued that the Official Rules superseded the User Agreement and its arbitration and class action waiver provision. The district court denied Coinbase’s motion to compel arbitration, and the Ninth Circuit affirmed.
The U.S. Supreme Court granted review to answer the question of who – a judge or an arbitrator – should decide whether a subsequent contract supersedes an earlier arbitration agreement that contains a delegation clause. The Supreme Court held that, where parties have agreed to two contracts – one sending arbitrability disputes to arbitration, and the other sending arbitrability disputes to the courts – a court must decide which contract governs. By contrast, in cases where only one contract is at issue, and that contract contains an arbitration clause with a delegation provision, courts must send all arbitrability disputes to arbitration, absent a successful challenge to the delegation clause. Thus, it was correct for the district court and the Ninth Circuit to have determined which contract governed the claims concerning the sweepstakes. Although Coinbase sought to challenge the Ninth Circuit’s determination that the Official Rules superseded the User Agreement, the Supreme Court declined to consider that issue.
In 2024, the U.S. Supreme Court issued a number of additional rulings that have the potential to impact class actions, particularly in the areas of securities fraud, civil rights, and Title VII, and with respect to issues such as preemption and bankruptcy plan releases.
Securities fraud. The Supreme Court clarified the standard for claims brought under the Exchange Act alleging pure omissions of fact in Macquarie Infrastructure Corp., v. Moab Partners, L.P., 144 S. Ct. 885 (2024). Under the Securities Act, a pure omission of fact is expressly prohibited if it makes a statement in the offering documents misleading. The Supreme Court held that pure omissions do not impose liability under the Exchange Act. The decision also resolved a split among the courts of appeal concerning a private right of action arising from an Item 303 statement issued pursuant to SEC Regulation S-K. The Supreme Court ruled that, half-truths, in which a defendant discloses some but not all material facts that render the statement misleading, can create liability for an Item 303 statement. However, pure omissions in an Item 303 statement do not create a private right of action.
Civil rights. The U.S. Supreme Court issued an important civil rights ruling in City Of Grant Pass, Oregon v. Johnson, 144 S. Ct. 2202 (2024). The plaintiffs, two individuals experiencing homelessness, filed a class action alleging that a city’s enforcement of ordinances banning camping on public property was unconstitutional under the Eighth Amendment. The Supreme Court determined that enforcing general public-camping laws does not violate the Eighth Amendment’s cruel and unusual punishments clause, opining that this clause focuses on the nature of punishments, not the criminalization of certain behaviors. The Supreme Court also rejected arguments that the enforcement of these laws against individuals who are involuntarily homeless should be considered cruel and unusual and concluded that issues like homelessness and how to address them involve complex policy decisions best left to elected representatives, not federal courts.
Preemption. In Cantero, et al. v. Bank Of America, N.A., 144 S. Ct. 1290 (2024), an alleged class of home buyers argued that the defendant failed to comply with New York law requiring national banks to pay interest on escrow accounts. The defendant argued that federal law preempted the New York law. The district court ruled in favor of the plaintiffs, and the Second Circuit reversed. The Supreme Court then vacated and remanded the Second Circuit’s ruling. According to the Supreme Court, the Second Circuit applied “a categorical test that would preempt virtually all state laws that regulate national banks, at least other than generally applicable state laws such as contract or property laws.” Id. at 1301. The Supreme Court remanded and instructed the Second Circuit to “make a practical assessment of the nature and degree of the interference caused by a state law” by comparing the state law’s level of prevention or interference with national bank borrowers in this case with that found in other banking cases.
Title VII. In Muldrow v. City Of St. Louis, Missouri, 601 U.S. 346 (2024), the Supreme Court held that an employee challenging a job transfer under Title VII must show that the transfer brought about some harm with respect to an identifiable term or condition of employment, but the harm need not be significant. Numerous courts already have cited this opinion in denying motions to dismiss class claims under Title VII, illustrating its immediate impact. See, e.g., Wilder v. Honeywell Fed. Mfg. & Techs., LLC, 2024 WL 4567290, at *6 (W.D. Mo. Oct. 24, 2024) (denying motion to dismiss employment class action in light of Muldrow); Doe v. Bozzuto Mgmt. Co., 2024 WL 3104550, at *6 (D.D.C. June 24, 2024) (same); Tribue v. Maryland, 2024 WL 4202444, at *10 (D. Md. Sept. 13, 2024) (same).
Bankruptcy plan releases. The case of Harrington, United States Trustee, Region 2 v. Purdue Pharma L.P., 144 S. Ct. 2071 (2024), involved a challenge to Purdue’s Chapter 11 bankruptcy plan and the broad release of liability for various parties, including the Sackler family, which owned the company. In 2019, Purdue Pharma filed for Chapter 11 bankruptcy protection as part of an effort to address the thousands of lawsuits filed against it by state and local governments, municipalities, and individuals, related to the opioid epidemic. Plaintiffs claimed that Purdue’s aggressive marketing and distribution of OxyContin contributed to widespread opioid addiction and overdose deaths. As part of its bankruptcy proceedings, Purdue proposed a reorganization plan that involved restructuring the company and creating a public-benefit trust to handle its assets and liabilities. Purdue’s proposed bankruptcy plan, however, also provided a release of liability to the Sackler family, the owners of Purdue. The U.S. government challenged the release as unfair to a number of alleged victims who brought a class action lawsuit and wanted to preserve a chance to seek damages from the Sacklers. The Supreme Court ruled that the Bankruptcy Code does not authorize a release or injunction as part of a Chapter 11 reorganization plan that seeks to discharge claims against a non-debtor, such as the Sacklers, without the consent of the affected claimants.
These rulings generally make it easier for plaintiffs to bring and maintain class claims in court. As a result, corporations are apt to see their impact in the class action space in 2025 and beyond.
Duane Morris Takeaways:Register today and join us Thursday, January 30, 2025, at a Duane Morris Exclusive Event – our Book Launch for the Duane Morris Class Action Review – 2025! This event will be offered as an in-person panel discussion and a Zoom webinar.
The DMCAR e-book is an essential desk reference that can be viewed on any device and is fully searchable with selectable text. The 2025 Review analyzes 1,441 class action rulings from state and federal courts in 23 areas of law, providing a comprehensive review of the class action landscape. Details on the 10 key trends identified this year and a copy of the Executive Summary are featured on the DMCAR website here.
You are invited to join Duane Morris Partners Gerald L. Maatman, Jr. and Jennifer Riley for a panel discussion marking the release of the Duane Morris Class Action Review – 2025. Please register here to reserve your spot today! The event will be offered as an in-person discussion or join us live via Zoom webinar.
Featuring authors Gerald L. Maatman, Jr., Jennifer A. Riley and American Lawyer Media staff reporter Amanda Bronstad in a discussion of the key class action developments and decisions in 2024 and what companies can expect in 2025. We hope to see you there!
In-Person Event Location: Convene CityView Duane Morris Plaza | 13th Floor 30 South 17th Street, Philadelphia, PA 1910
Registration: 3:30 p.m. to 4:00 p.m. Eastern Book Launch and Discussion: 4:00 p.m. to 5:00 p.m. Eastern Cocktail Reception: 5:00 p.m. to 6:00 p.m. Eastern
Duane Morris Takeaway: The plaintiffs’ class action bar has continued to invest in the privacy class action space and, over the past year, has generated a multitude of filings, making privacy one of the hottest areas of growth in terms of activity by the plaintiffs’ class action bar. As technology continues to infiltrate our everyday lives, it provides ongoing inspiration for novel claims. Two of the most active areas of privacy litigation over the past year include: (1) litigation regarding “biometric” technologies under the Illinois Biometric Privacy Act (BIPA); and (2) claims regarding website advertising technologies (adtech) asserted under a variety of federal and state statutory and common laws.
Watch DMCAR co-editor Jennifer Riley explain this trend in the following video:
Additionally, in the absence of a federal comprehensive privacy law, states have been enacting their own patchwork of laws. There are currently 19 states that have passed comprehensive privacy laws. The following chart shows new laws that will become effective in 2025:
On August 2, 2024, the Illinois Governor signed a long-awaited amendment to the BIPA, the most popular and heavily litigated privacy law in the U.S. The amendments eliminated per-scan damages, granting defendants a reprieve from potentially crushing penalties allowed under pre-amendment version of the law that inspired thousands of class action lawsuits over the past seven years.
Enacted in 2008, the BIPA regulates the collection, use, and handling of biometric information and biometric identifiers by private entities. Subject to certain exceptions, the BIPA prohibits collection or use of an individual’s biometric information and biometric identifiers without notice, written consent, and a publicly available retention and destruction schedule.
In terms of lawsuit filings, for nearly a decade following enactment of the BIPA, activity under the statute remained largely dormant. The plaintiffs’ bar filed approximately two total lawsuits per year from 2008 through 2016 before filings increased in 2017 and then skyrocketed in 2019. In 2020, plaintiffs filed more than six times as many class action lawsuits for alleged violations of the BIPA than they filed in 2017 and more than the number of class action lawsuits they filed from 2008 through 2016 combined.
Filings continued to accelerate in 2023, prompted by two rulings from the Illinois Supreme Court that increased the opportunity for recovery of damages under the BIPA. On February 2, 2023, the Illinois Supreme Court held that a five-year statute of limitations applies to claims under the BIPA, and, on February 17, 2023, the Illinois Supreme Court held that a claim accrues under the BIPA each time a company collects or discloses biometric information. See Tims v. Black Horse Carriers, 2023 IL 127801 (Feb. 2, 2023); Cothron, et al. v. White Castle System, Inc., 2023 IL 1280004 (Feb. 17, 2023).
In 2024, the Illinois General Assembly dealt a significant blow to plaintiffs’ pursuit of these claims. On August 2, 2024, the Illinois Governor signed SB 2979 into law, amending the BIPA and limiting plaintiffs to one recovery per person under §§ 15(b) and 15(d). In other words, a private entity that, in more than one instance, collects, captures, or otherwise obtains the same biometric identifier or biometric information from the same person using the same method of collection “has committed a single violation” for which an aggrieved person is entitled, at most, to one recovery. See 740 ILCS 14/20 (b), (c). Courts to date have disagreed as to whether the amendment and its new “per person” damages regime applies retroactively, seeEdwards v. Central Transport LLC, No. 24-CV-1925 (N.D. Ill. Nov. 13, 2024), or whether it applies only on a go-forward basis. We anticipate that parties will continue to litigate this question in 2025.
While a welcome relief to defendants, the BIPA’s new “per person” damages regime remains sizable and on a par with other privacy statutes that remain popular with the plaintiffs’ class action bar, such as the Electronic Communications Privacy Act (ECPA), which provides for damages up to $10,000 per claimant, or the Video Privacy Protection Act (VPPA), which provides for damages up to $2,500 per claimant.
Thus, whereas their rate of growth slowed in 2024, BIPA filings remained robust in comparison with prior years. Indeed, plaintiffs filed 427 lawsuits invoking the BIPA in 2024, compared with 417 in 2023, and 362 in 2022. The graphic shows the year over year growth in BIPA filings over the past eight years:
In terms of substance, 2024 saw the emergence of two significant trends in BIPA litigation that illustrate plaintiffs’ continued creativity when it comes to applying the BIPA to new technologies.
First, plaintiffs filed a significant number of BIPA cases targeting technologies that perform functions other than biometric identification. These include virtual try-on technologies, efforts to measure affects or emotions, attempts to verify conformance with pornography restrictions or passport photo requirements, and other functions. Basically, if a company’s technology performs any function at all involving a face, the company was a potential target of BIPA litigation in 2024. Although no courts have ruled definitively as to whether such technologies obtain “biometric identifiers” or “biometric information” within the meaning of the BIPA, some courts have found allegations regarding their use sufficiently plausible to survive motions to dismiss.
In Davis v. e.l.f. Cosmetics, Inc., 2024 U.S. Dist. LEXIS 94318 (N.D. Ill. May 28, 2024), for example, plaintiffs filed a class action alleging that the defendant’s virtual try-on technology used facial recognition technology without proper consent in violation of § 15(b). The defendant moved to dismiss on the ground that virtual try-on involves only facial detection (i.e., whether there is a face), not facial recognition or identification. The court rejected the argument, concluding that the plaintiffs’ allegations that the virtual try-on tool obtained biometric identifiers was “enough” at the pleading stage to overcome a motion to dismiss. Id. at *2.
In Martell, et al. v. X Corp., 2024 U.S. Dist. LEXIS 105610 (N.D. Ill. June 13, 2024), by contrast, plaintiff alleged that he uploaded a photograph containing his face to the social media platform X and that X then analyzed the photograph for nudity and other inappropriate content using a product called PhotoDNA. Id. at *1. According to the plaintiff, PhotoDNA created a unique digital signature of his face-containing photograph known as a “hash” and, therefore, necessarily obtained a “scan of . . . face geometry” in violation of the BIPA. Id. at *1-2. X Corp. moved to dismiss arguing, among other things, that plaintiff failed to allege that PhotoDNA obtained a scan of face geometry because PhotoDNA does not perform facial recognition. The court granted the motion finding no plausible allegations of a scan of face geometry because “PhotoDNA is not facial recognition software.” Id. at *5. As the court explained, the “plaintiff does not allege that the hash process takes a scan of face geometry, rather he summarily concludes that it must. The court cannot accept such conclusions as facts adequate to state a plausible claim.” Id. at *9.
Second, plaintiffs have filed a significant number of BIPA cases over the use of AI‑based facial recognition systems that transform photographs into numerical expressions that can be compared to determine their similarity. These modern systems are different than older, non-AI facial recognition systems in place at the time of the BIPA’s enactment in 2008 that attempt to identify individuals by using measurements of face geometry. The older systems construct a facial graph from many key landmarks such as the corners of the eyes, tip of the nose, and corners of the mouth. Courts have disagreed as to whether the BIPA, which defines biometric identifiers to include a “scan of face geometry,” applies to AI machine-learning systems for facial analysis or recognition that do not construct such geometric graphs.
One court previously found that this question is one for a jury, see In Re Facebook Biometric Information Privacy Litigation, 2018 WL 2197546, at *2-3 (N.D. Cal. May 14, 2018), but at least one other court, Zellmer, et al. v. Meta Platforms, Inc., 104 F.4th 1117 (9th Cir. 2024), held to the contrary.
In Zellmer, a plaintiff who never used Facebook sued Meta for alleged violations of the BIPA after his friends uploaded photographs of him to Facebook. He alleged that Facebook collected or captured his biometric identifiers when its tag suggestion feature created what Facebook calls a “face signature” from those uploaded photos. Id. at 1120. The district court granted summary judgment to Facebook, and the Ninth Circuit affirmed. As the Ninth Circuit explained, “[n]o one – not even [defendant, the creator of the face signature] – can reverse-engineer the numbers comprising a given face signature to derive information about a person.” Id. at 1121. For this reason, the face signature “cannot identify an individual” and, therefore, is not subject to the BIPA. Id. at 1123.
We expect continued litigation in 2025 over whether the BIPA regulates only those technologies capable of identification and whether AI-based facial recognition systems implicate the BIPA will remain a hotly litigated topic in 2025.
Although website activity tracking tools are nothing new, and appear on most websites, this past year they continued to fuel a wave of lawsuits alleging that such tools caused companies in various industries to share users’ private information. While some of these cases and claims met an early dismissal, others inspired sizable settlements, signaling that corporations should expect continued investment in this area by the plaintiffs’ bar in 2025.
In 2024, for the second time in as many years, plaintiffs filed more than two hundred class action complaints alleging that Meta Pixel, Google Analytics, and other similar software code embedded in websites secretly captured plaintiffs’ web browsing data and sent it to Meta, Google, and other online advertising agencies. This software, often called “adtech,” is a popular feature on many websites today. More than ten million companies and governmental organizations use it. Adtech works by collecting information about a person’s web-browsing behavior, using AI to analyze the collected data, and then serving targeted advertisements based on the analysis.
Plaintiffs have asserted claims attacking adtech based on one or more of a wide variety of legal theories, including federal and state wiretapping statutes, eavesdropping statutes, the VPPA, unfair and deceptive practices statutes, various common laws, and other legal theories. Plaintiffs typically seek to invoke a statute that provides for statutory damages, asserting that hundreds of thousands of website visitors, times $10,000 per claimant in statutory damages under the Federal Wiretap Act, for example, equals billions of dollars. Several of these cases have led to multi-million-dollar settlements, but the vast majority remain undecided.
The courts reviewing these claims have been tasked with applying statutes, many of which were passed decades ago, in novel ways to new technologies that the drafters of those laws could not have envisioned. As a result, courts issued an assortment of rulings on motions to dismiss adtech class actions in 2024, resulting in a mixed bag of outcomes. Court rulings on these inventive theories varied widely in 2024, presaging continued battles in 2025 as these issues bubble up to appellate courts.
One of this year’s largest adtech class action led to a victory for defendants in T.D. v. Piedmont Healthcare, Inc., Case No. 23-CV-5416 (N.D. Ga. Aug. 24, 2024). The plaintiffs sued Piedmont alleging that it installed the Meta Pixel on its public-facing website and its secure patient portal and transmitted the plaintiffs’ “personally identifiable information (PII) and protected health information (PHI) [to Meta] without their consent.” Id. at 1-2.
The plaintiffs asserted claims for invasion of privacy, breach of fiduciary duty, negligence, breach of contract, unjust enrichment, and violation of the ECPA. The court granted Piedmont’s motion to dismiss.
First, the court found no invasion of privacy because “[t]here is no intrusion upon privacy when a patient voluntarily provides personally identifiable information and protected health information to his or her healthcare provider.” Id. at 5-6. Second, the court rejected all seven of plaintiffs’ alleged damages theories and, accordingly, dismissed plaintiffs’ breach of fiduciary duty, negligence, breach of contract, and unjust enrichment, all of which required the plaintiffs to plausibly allege damages or, relatedly, enrichment, as an element of these claims. Id. at 7-10. Finally, the court dismissed the plaintiffs’ ECPA claim, which required plaintiffs to plausibly allege an intentional interception of the contents of an electronic communication. Id. at 11.
By contrast, in Kane, et al. v. University Of Rochester, 2024 WL 1178340 (W.D.N.Y. Mar. 19, 2024), a New York federal court denied a motion to dismiss finding that adtech plaintiffs sufficiently alleged that defendant disclosed information they entered on defendant’s website in the form of appointment scheduling information that identified the user who scheduled the appointment, the provider, and the provider’s specialty. Id. at *5-7.
The court declined to dismiss plaintiffs’ claims for breach of express contract, unjust enrichment, bailment, and violation of New York’s deceptive trade practices statute, and found that plaintiffs sufficiently invoked the crime-tort exception under ECPA. Id. at *7-8. The court acknowledged that it joined the “[a]t least one [other] . . . court” by finding an adtech plaintiff sufficiently invoked the crime-tort exception under ECPA with allegations that the website owner’s purpose was to “enhance its marketing efforts.” Id. at *7.
In cases where websites containing video and adtech allegedly transmit video viewing information, plaintiffs often assert claims for alleged violations of the federal VPPA. It prohibits a “video tape service provider” from knowingly disclosing “personally identifiable information concerning any consumer of such provider.” 18 U.S.C. § 2710(b)(1).
The statute defines a “video tape service provider” to include any person “engaged in business, or affecting interstate or foreign commerce, of rental, sale, or delivery of prerecorded video cassette tapes or similar audio-visual materials.” 18 U.S.C. § 2710(a)(4).
The VPPA provides for damages up to $2,500 per violation in addition to costs and attorneys’ fees for successful litigants, making it an attractive source of filings for the plaintiffs’ class action bar.
Indeed, plaintiffs initiated more than 250 VPPA class actions in 2024, compared to 137 in 2023, reflecting continued growth of VPPA class actions fueled in large part by adtech claims.
In 2024, courts issued a mixed bag of rulings on motions to dismiss claims for alleged violation of the VPPA. Compare, e.g., Brown, et al. v. Learfield Communications, LLC, 2024 U.S. Dist. LEXIS 15587 (W.D. Tex. Jan. 29, 2024) (dismissing VPPA claim because the plaintiff failed to allege a nexus between plaintiff’s newsletter subscription and access to video content), with Salazar, et al. v. National Basketball Association, 2024 U.S. App. LEXIS 25902 (2d Cir. Oct. 15, 2024) (rejecting defendant’s argument that the VPPA applies only to subscribers of audiovisual services and finding that it also applies to subscribers of an email newsletter).
These rulings illustrate the vast and growing patchwork quilt of differing approaches to adtech claims asserted under a variety of legal theories. A more expansive discussion of these rulings appears in Chapter 14 regarding Privacy Class Actions. The initial decisions concerning class certification of adtech claims issued in 2024, however, came out in favor of defendants as both courts denied class certification. SeeGriffith, et al. v. TikTok, Inc., 2024 U.S. Dist. LEXIS 176403 (C.D. Cal. Sept. 9, 2024); Martinez, et al. v. D2C, LLC, 2024 U.S. Dist. LEXIS 178570 (S.D. Fla. Oct. 1, 2024).
In 2025, we anticipate that the patchwork quilt will expand as more courts confront these novel claims and decisions start making their way toward resolution at the appellate level.
Duane Morris Takeaways:Register today and join us Thursday, January 30, 2025, at a Duane Morris Exclusive Event – our Book Launch for the Duane Morris Class Action Review – 2025! This event will be offered as an in-person panel discussion and a Zoom webinar.
The DMCAR e-book is an essential desk reference that can be viewed on any device and is fully searchable with selectable text. The 2025 Review analyzes 1,441 class action rulings from state and federal courts in 23 areas of law, providing a comprehensive review of the class action landscape. Details on the 10 key trends identified this year and a copy of the Executive Summary are featured on the DMCAR website here.
You are invited to join Duane Morris Partners Gerald L. Maatman, Jr. and Jennifer Riley for a panel discussion marking the release of the Duane Morris Class Action Review – 2025. Please register here to reserve your spot today! The event will be offered as an in-person discussion or join us live via Zoom webinar.
Featuring authors Gerald L. Maatman, Jr., Jennifer A. Riley and American Lawyer Media staff reporter Amanda Bronstad in a discussion of the key class action developments and decisions in 2024 and what companies can expect in 2025. We hope to see you there!
In-Person Event Location: Convene CityView Duane Morris Plaza | 13th Floor 30 South 17th Street, Philadelphia, PA 1910
Registration: 3:30 p.m. to 4:00 p.m. Eastern Book Launch and Discussion: 4:00 p.m. to 5:00 p.m. Eastern Cocktail Reception: 5:00 p.m. to 6:00 p.m. Eastern
Duane Morris Takeaways: Our Class Action Review publication launch is just around the corner – Tuesday, January 7, 2025.
The 2025 Review builds on the success of our previous editions and represents our twentieth annual study of the class action space. At over 650 pages, the 2025 Review has more analysis than ever before, with discussion of over 1,440 class certification rulings from federal and state courts over this past year. The Review will be available for download as an E-Book too.
The Review is a one-of-its-kind publication analyzing class action trends, decisions, and settlements in all areas impacting Corporate America, including the substantive areas of antitrust, appeals, the Class Action Fairness Act, civil rights, consumer fraud, data breach, EEOC-Initiated and government enforcement litigation, employment discrimination, the Employee Retirement Income Security Act of 1974, the Fair Credit Reporting Act, labor, privacy, procedural issues, product liability and mass torts, the Racketeer Influenced and Corrupt Organizations Act, securities fraud, state court class actions, the Telephone Consumer Protection Act, wage & hour class and collective actions, and the Worker Adjustment and Retraining Notification Act. The Review also highlights key rulings on attorneys’ fee awards in class actions, motions granting and denying sanctions in class actions, and the top-class action settlements in each area. Finally, the Review provides insight as to what companies and corporate counsel can expect to see in 2025.
We are humbled and honored by the recent review of the Duane Morris Class Action Review – 2024 by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said, “The Duane Morris Class Action Review is ‘the Bible’ on class action litigation and an essential desk reference for business executives, corporate counsel, and human resources professionals.” EPLiC continued, “The review is a must-have resource for in-depth analysis of class actions in general and workplace litigation in particular. The Duane Morris Class Action Review analyzes class action trends, decisions, and settlements in all areas impacting corporate America and provides insight as to what companies and corporate counsel can expect in terms of filings by the plaintiffs’ class action bar and government enforcement agencies like the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL).”
We look forward to providing the 2025 edition of the Review to all our loyal readers on January 7. Stay tuned and Happy Holidays!
Duane Morris Takeaway:This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Jennifer Riley with their discussion of a U.S. Supreme Court decision vacating a D.C. Circuit ruling in an NLRB dispute over an employer’s liability for withdrawing recognition from a union under the agency’s successor bar standard. This ruling marks a notable development in the wake of the high court’s Loper Bright Enterprises v. Raimando opinion overturning the Chevron doctrine.
Jerry Maatman: Thank you loyal blog readers and listeners for joining our next episode of the weekly podcast series, the Class Action Weekly Wire. I’m Jerry Maatman of Duane Morris, and joining me is Jen Riley, the vice chair of the Duane Morris Class Action Defense Group. Thanks for being on the podcast, Jen.
Jennifer Riley: Thanks so much, Jerry. Great to be here.
Jerry: Today we’ll be breaking down the Supreme Court’s acceptance of a case for review involving the National Labor Relations Board and Hospital Menonita de Guayama from Puerto Rico. The case is crucial, especially after the Supreme Court’s decision in the Loper Bright Enterprises v. Raimondo case, which reshapes how courts review agencies interpretations of the law. I think this is a fascinating case, and a great opportunity to talk about how the Supreme Court’s shift in its approach is going to affect labor law and employment relations. It’s an interplay between agency discretion, and judicial review. And it’s really at the heart of class action litigation. Jen, can you recap the main points of this case for our viewers and listeners?
Jennifer: Thanks, Jerry, absolutely. The case involves a dispute where a hospital in Puerto Rico withdrew recognition from a union; the National Labor Relations Board ruled that this violated the National Labor Relations Act, citing the successor bar doctrine. That doctrine prevents an employer from withdrawing recognition from a union for at least six months after taking over a bargaining unit. After the hospital filed suit, the D.C. Circuit upheld the NLRB’s decision, and eventually the Supreme Court granted review and agreed to hear the case.
Jerry: Thanks, Jen. The core issue here is whether the successor bar doctrine, which the NLRB has applied for year, is legally valid – especially in light of the Supreme Court’s recent decision in the Loper Bright case. The Supreme Court’s ruling overruled the longstanding Chevron doctrine which had instructed lower federal courts to defer to federal agencies when interpreting ambiguous parts of statutes. That ruling has profound implications for federal courts, which will now review decisions made by agencies like the NLRB in this particular case.
Jennifer: Exactly, Jerry. That is why the Hospital Menonita case is so important. The Chevron doctrine is rooted in the idea that in certain circumstances, agencies with expertise in certain areas are better positioned to interpret ambiguous statutes than courts. If the statute is ambiguous, the court must assess whether the agency’s interpretation of the statute is reasonable. The court will generally uphold the agency’s interpretation, if it is a reasonable interpretation of the ambiguous statute, even if the court itself might have interpreted the statute differently. Courts generally give significant deference to agencies’ expertise and experience in interpreting laws within their jurisdiction.
This is now up for scrutiny, of course, after Loper Bright. Essentially, the hospital argued that the court should independently review whether the NLRB’s interpretation of the law, particularly the successor bar doctrine, was correct under the National Labor Relations Act. The NLRB defended its position, claiming that the D.C. Circuit wasn’t relying solely on Chevron and upholding the decision. The NLRB argued that the circuit actually used pre-Chevron case law that recognized agency discretion in interpreting the National Labor Relations Act. However, the hospital countered that under Loper Bright, any deference to the NLRB’s interpretation would need to be reconsidered.
Jerry: Interesting. I think this is somewhat of a blueprint or a test case for how employers or corporations sued, based on interpretations of agency regulations, can turn the table, so to speak, and argue that federal district court judges should interpret the laws as enacted, and not based on somewhat liberal interpretations of those laws by agencies. That’s exactly what the hospital, as I understand it, argued in terms of the Loper Bright decision requires the court to critically assess an agency’s interpretation, and not simply defer carte blanche to them. In the past, courts would have applied Chevron, and given the agency a wide berth in terms of all benefits, or the jump ball, going to the agency in terms of its interpretation. But now, with Loper Bright we have a new playing field, and the Supreme Court has signaled that agency interpretations will be scrutinized, particularly when the statute in question is ambiguous.
Jennifer: Exactly. The Supreme Court ultimately vacated the D.C. Circuit’s ruling and remanded the case here, sending it back to the D.C. Circuit for reconsideration in light of Loper Bright.
Jerry: It’s interesting, insofar as now the argument is ‘this is the essential reading of the statute, and how the court should interpret it, and the agency’s interpretation is just one data point.’ And now defendants have significant precedent to say agencies’ interpretations have been rejected and basically maybe not even a data point, but shouldn’t even be considered. So, the balance of power has shifted and the litmus test, so to speak, or the playing field on which defendants are operating has completely shifted, based on the Supreme Court’s decision.
Jennifer: Great point, Jerry. The successor bar doctrine itself is already controversial. Some people argue that it’s necessary to protect workers’ rights during employer transitions, while others think it goes too far in restricting employers’ ability to challenge unions.
Jerry: Well, now the case is back with the District of Columbia Court of Appeals, the D.C. Circuit, and it’s that time of the year when people make New Year’s resolutions and predict what’s going to happen in 2025. What is the Jen Riley prognostication as to the ultimate outcome of this particular case?
Jennifer: Well, this one is hard to say. The D.C. Circuit will have to reconsider its ruling with the Loper Bright framework in mind, which means it will have to engage in a more detailed analysis of whether the NLRB’s interpretation of the law is the best reading of the National Labor Relations Act. If the court decides that the successor bar doctrine doesn’t align with the statute, we could see a major shift in labor law, particularly in how unions and employers navigate these types of transitions.
Jerry: Well, that’s a very succinct summary of the significant implications of this case. Stay tuned, readers and listeners. 2025 – put on your seatbelts. This is going to be a heck of a ruling. Well, thank you so much, Jen, for your thought leadership and your contributions and giving us an inside baseball look at what’s going on in terms of the future interpretations of the Loper Bright doctrine, and how that will impact corporations and their defense of both labor and employment matters and class actions in general.
Jennifer: Thanks so much, Jerry. Thanks for having me, and happy holidays to all of our listeners!
Duane Morris Takeaway:This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Bernadette Coyle with their discussion of the 2024-2025 edition of the American Tort Reform Association’s (“ATRA”) “Judicial Hellholes” report, which details the 10 least favorable venues for corporate defendants across the country.
Jerry Maatman: Thank you, loyal blog readers and listeners for joining us for our weekly podcast series. My name is Jerry Maatman, and I’m a partner at Duane Morris, and joining me today is my colleague, Bernadette Coyle. Thanks so much for being on the podcast.
Bernadette Coyle: Thanks, Jerry. I’m very happy to be here.
Jerry: Today, our podcast covers one of my most favorite topics, and that is the annual report issued by the American Tort Reform Association, which goes by the acronym of ATRA, in terms of its annual report called the “Judicial Hellholes” report. It focuses on litigation issues and does a comparative study of litigation in all 50 states, and then ranks those states with respect to fairness or unfairness of the judicial system and bias, or lack of bias, in the administration of justice. So, it’s an important read for corporate counsel, those facing class action litigation, because it identifies what are suboptimal jurisdictions, what are challenging jurisdictions. And as a result, obviously in terms of our annual study of class action litigation, settlements, and rulings, many of the jurisdictions on that watch list happen to be epicenters for class action litigation. So, Bernadette, in this year’s report there were 10 specific jurisdictions listed as the top Judicial Hellholes, and I’m sure our loyal blog readers and listeners are anxious to hear – so what jurisdiction came out as on top of that infamous list of the worst jurisdictions in which to be sued in 2024?
Bernadette: This year, #1 was a defending champion from 2023; it was the Philadelphia Court of Common Pleas and the Pennsylvania Supreme Court ranked as the most challenging venue for defendants. And over the past few years, the courts there have been issuing nuclear verdicts. We’re talking about eye-popping nine figure damage awards that seem to be handed out with very little consideration for fairness. And additionally, a recent decision from the Pennsylvania Supreme Court has led to a flood of medical liability lawsuits by removing an important legal requirement for entry. In fact, I think they even allowed for duplicative damages in certain cases which only encourages more litigation. So, it’s definitely becoming a very plaintiff-friendly environment.
Jerry: So, kind of the watchwords are: it’s a petri dish or a hotbed for growing certain types of lawsuits. Moving on to #2, which I understand to be New York City. The report highlights it as one of the other really tough places to be sued. What’s your take on the ranking of New York City on the report?
Bernadette: Yeah, I think in New York City they noted a rise in fraudulent lawsuits, particularly with RICO lawsuits being filed against plaintiff firms and the city’s laws, including the Scaffold Law and the consumer protection act, are definitely ripe for abuse. And we’re seeing plaintiffs’ lawyers that are really cashing in on these opportunities, and it’s led to what the report is calling a “fraudemic.” It’s a growing problem in the city’s civil justice system, and unfortunately, leadership seems to be looking the other way.
Jerry: That’s certainly a very concerning trend for corporations that are sued in those jurisdictions. I know that #3 on the list is South Carolina in particular, its treatment of mass torts and the asbestos litigation. What are the problems identified there?
Bernadette: South Carolina’s asbestos judge has become infamous for being highly biased against corporate defendants. The judge often imposes unwarranted sanctions, modifies jury verdicts in favor of plaintiffs, and is becoming known for appointing a receiver to maximize insurance recoveries. All of that creates a legal environment where defendants don’t stand a fair chance, and plaintiffs are given an unfair advantage. This is really a textbook example of how judicial bias can distort the civil justice system.
Jerry: Sounds like that issue systemic to South Carolina in general, and mass tort litigation in particular. Moving on to #4, Georgia, where I litigate the defense of many class actions – what did the report have to say about the state of litigation in the Peach State?
Bernadette: Last year, Georgia was tied for #1 with Pennsylvania, and this year the report notes that Georgia is facing a rise in nuclear verdicts, huge excessive damage awards. And additionally, there’s a trend of inflated medical costs and laws that seem to set defendants up for failure. For example, Georgia still has an archaic seatbelt gag rule, meaning juries can’t even consider whether an occupant was wearing a seatbelt during a crash. It’s part of a broader trend in Georgia’s civil justice system that seems to favor plaintiffs and puts defendants at a severe disadvantage.
Jerry: Thanks. Well, next up is California, and I think that for the 42 years I’ve been a lawyer and dealing with corporate counsel, that seems to be the biggest litigation headache that they face in terms of doing business and getting sued in the state of California. What’s driving the inclusion of California this year in the Judicial Hellholes report?
Bernadette: California continues to be a major destination for plaintiffs’ lawyers looking to expand liability. The state’s legal landscape is very favorable for certain types of lawsuits. I mean, first off, California has the highest number of nuclear verdicts in the nation, and then you’ve got cases like Lemon Law claims and no injury lawsuits under the Private Attorneys General Act and the Americans with Disabilities Act. These are bogging down businesses and creating endless litigation that’s both costly and inefficient.
Jerry: What about Cook County, Illinois, where I was born and raised and sitting today? That deserves special mention this year – what was your take on Cook County’s inclusion?
Bernadette: Yes, Cook County is obviously very near and dear to us, and it’s also become infamous for its disproportionate share of lawsuits, especially no injury litigation and asbestos cases. One of the biggest issues here, though, is the Biometric Information Privacy Act, which has been abused to the point where lawsuits are filed over the very smallest technicalities.
Jerry: Well, those are the major geographic tours of the Hellholes. What about a brief overview of the remainder of the top 10 list?
Bernadette: Absolutely. Next is St. Louis, Missouri, which is also a hotbed for asbestos lawsuits, and for plaintiff-friendly rulings; the Michigan Supreme Court, which seems to allow reliance on junk science; followed by King County, Washington, which made it onto the list for the first time because of judges’ tendency to allow unfair group trials and junk science into court; and finally, Louisiana, with its nuclear verdicts that distort the fairness of its civil justice system.
Jerry: Well, that’s quite a tour of judicial highlights. The ATRA report, though, also has positive developments. What were some of those in terms of the legal landscape in 2024?
Bernadette: Yes, there are bright spots. For example, several states have strengthened their expert evidence rules to prevent junk science from entering court. The Third Circuit Court of Appeals ruled against lawsuits claiming insufficient product warnings when those warnings had been federally approved. And in Kentucky and Utah, we’ve seen courts make decisions that uphold fairness in the legal system.
Jerry: Well, that is good news in terms of judges being umpires and calling balls and strikes rather than being biased in favor of plaintiffs. I do believe that the report is essential, if not required reading, for our corporate counsel, and one can learn a lot looking at these reports from year to year and transposing them against litigation statistics that basically show the epicenters or hotspots of class action litigation tend to be clustered in these states that are identified by the report in terms of constituting a judicial hellhole. Well, thank you so much, Bernadette, for joining us on your very first podcast we really appreciate your contributions and thought leadership today, and thanks so very much.
Bernadette: Thank you for having me, Jerry, and thank you, listeners.
Duane Morris Takeaway:This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Gregory Tsonis with their discussion of a proposed rule from the U.S. Department of Labor (“DOL”), entitled “Employment of Workers With Disabilities Under Section 14(c) of the Fair Labor Standards Act,” that would put an stop to the issuance of new certificates that allow employers to pay workers with disabilities a subminimum wage.
Jennifer Riley: 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 Greg Tsonis. Thank you for being on the podcast, Greg.
Greg Tsonis: Welcome, Jen, glad to be here.
Jennifer: So, big news this week from the U.S. Department of Labor. It has announced a major move to end the ability of employers to pay workers with disabilities below the federal minimum wage. This has been in the works for a while, though, right Greg?
Greg: Yes, it’s definitely been a long time coming. So, this rule is aiming to end the use of Section 14(c) of the Fair Labor Standards Act, the FLSA, which has allowed employers to pay workers with disabilities below the federal minimum wage way back since the 1930s, actually. So, this new proposal would stop the issuance of new certificates under that provision and existing employers with those certificates would have up to three years to phase out paying subminimum wages.
Jennifer: Right. I think a lot of people are surprised to see this move happening now, especially since it’s coming at the end of President Biden’s administration. What does the timeline look like for this rule?
Greg: Yeah, good question. So right now, the rule is in the proposed stage. So there’s a comment period that just started and runs through January 17th of next year. We’ll be hearing a lot of feedback from various stakeholders in that time. After that, the next steps will be determined, based on the comments that are received and what they say. But here’s the kicker – since it’s so close to Inauguration Day, it’s likely that the next administration will have a big role in finalizing that rule.
Jennifer: That’s right. And as we saw with some other issues under Biden’s administration, regulations like this can face challenges, especially if they come out toward the end of a presidency. But the push to end this practice has been building for a while, wouldn’t you say?
Greg: Absolutely. So, this is actually one of the farthest steps the federal government has taken to end Section 14(c). Democrats have been trying to get rid of it for years with legislation like Raise the Wage Act and the transformation to Competitive Integrated Employment Act. Both are still pending. But the platform for the Democratic party, both in 2020 and in 2024, has included a commitment to end subminimum wages for people with disabilities, and even some Republicans have backed this idea, especially in the Senate.
Jennifer: That’s true. Speaking of lawmakers, we have seen varying amounts of support. There was a pretty positive reception from some key figures in the Republican side as well as in the Democrat side. For instance, Representative Bobby Scott praised the announcement, calling it a step toward fairness. He made it clear that all workers, regardless of disability, should be treated with dignity and receive at least the minimum wage.
Greg: Exactly. He’s been an advocate for this for a long time, and his comments really emphasize the broader shift toward equality in the workforce. Democratic Senator Patty Murray also weighed in saying that paying workers with disabilities less than the minimum wage is discriminatory, and that this rule is a major step toward better economic outcomes for people with disabilities.
Jennifer: Right. But, as to be expected, there’s also pushback from some lawmakers going the other way. Republican Representative Virginia Foxx, for instance, was pretty vocal against the rule. She called it misguided and irresponsible, saying that the 14(c) program actually protects job opportunities for individuals with disabilities. She even pointed out that in states where the program was phased out, many workers ended up jobless or even isolated.
Greg: Yes, and that’s a real concern for some. Representative Foxx and others argue by eliminating 14(c), you could have unintended consequences. They believe that the program has helped individuals with disabilities gain employment in a way that would be difficult in a competitive market. Some critics are worried that this change could lead to job loss and greater social isolation for those workers who rely on these programs.
Jennifer: Right. It’s definitely a tough issue with strong opinions on both sides. But if the rule does go through, it could be a big shift in the rights and protections for people with disabilities. The government has already taken steps to end subminimum wage for federal contractors, and some states have banned it, too. So, it’s clear that momentum is building to move away from this practice.
Greg: Yeah, it’s been a major point of debate for years, and with the public comments coming in now, we’re likely to see even more perspectives emerge. There are certainly valid concerns about the potential impact on job opportunities. But at the same time, we’ve seen a shift in how workers with disabilities are treated in the broader workforce. Ending subminimum wage could create more opportunities for integration and fair pay.
Jennifer: It will definitely be interesting to see how this plays out with the comment period and potential changes from the next administration. There’s a lot of uncertainty about how quickly this rule will become a reality. But it’s definitely something to watch closely.
Greg: For sure, it’s a defining issue for both the disability rights community and the broader workforce, and whichever way it goes, it will have lasting implications for how workers with disabilities are treated in the job market. The next few months will be crucial in shaping that future.
Jennifer: Thanks, Greg, for breaking this down. It’s certainly going to be a topic that gets a lot of attention over the coming months. We will be sure to keep our listeners updated. Thanks for being here today, Greg, and thank you to everyone in the audience for tuning in.
Greg: Thanks for having me, Jen, and thank you to the listeners.
Duane Morris Takeaways: Jennifer A. Riley, the Vice-Chair of the Duane Morris Class Action Defense Group recently spoke at 21st National Class Action Conference organized by the Barreau du Québec (Québec Bar Association). As the sole guest presenter from the United States on employment class actions, she spoke on cross-border class action defense strategies.
This week I had the pleasure of speaking at the Colloque national sur l’action collective, the National Class Action Conference in Montreal, Quebec.
The conference was the 21 National Class Action Conference organized by the Barreau du Québec (Québec Bar Association) and was held on November 27 and 28 at the Palais des congrès de Montréal.
One of the largest international conferences on class actions, the event brought together nearly 60 speakers and moderators from Canada, the United States, and Europe.
The Conference
The organizers compiled a wide range of knowledge and experience on cutting edge class action topics, including recent trends, emerging issues, and the proliferation of industry-wide class actions.
The presenters covered the latest developments in class action trends across Canada, the United States, and Europe. They discussed trends and legal developments in consumer, privacy, and employment class actions, and reviewed the growth of AI class actions, which have exploded in terms of filings from 2021 (2 filings) to 2024 (32 filings).
I had the pleasure of discussing developments on the employment class action front and providing a sneak peek at 2024 filing, settlement, and certification numbers.
Class Action Trends
In terms of overall settlement numbers, in 2023, the largest settlements across all substantive areas of class actions in the U.S. totaled more than $51.4 billion. In 2024, settlements are on track to exceed $37 billion, representing a continued use of the class action mechanism to effective a massive redistribution of wealth.
Plaintiffs’ success on the certification front is continuing to fuel this trend. In 2023, plaintiffs certified class actions at high rates by winning 324 out of 451 rulings (72%). In the employment space, such numbers were equally high, as plaintiffs converted 82% of rulings in the ERISA space, prevailed on 75% of motions for conditional certification of FLSA collective actions, and prevailed on 50% of certification rulings in discrimination class actions.
In 2024, the numbers remain plaintiff-friendly. So far in 2024, we have logged 363 decisions of U.S. courts on motions for class certification. Courts have granted 232 of those motions, for a certification rate of 64%. Although the overall rate might trend down from 2023, the 2024 numbers are showing more consistency across substantive areas.
In the employment space, plaintiffs’ success on certification motions has surpassed the 2023 numbers. So far in 2024, plaintiffs have prevailed on 81% of rulings on motions for FLSA conditional certification, 80% of rulings on motions to certify WARN classes, 67% of motions to certify ERISA classes, and 53% of motions to certify discrimination classes.
Conclusion
Overall, the conference presented a one-of-a-kind opportunity to share class action experiences and knowledge across jurisdictions. It provided a unique look at the areas of consistency in terms of the focus of the plaintiffs’ class action bar across jurisdictions and an interesting overview of the deviations the plaintiffs class action bar has implemented as it has molded to the unique contours of the prevailing laws across jurisdictions.
