Gerald L. Maatman, Jr. – Class Action Defense

March 28, 2025 by Gerald L. Maatman, Jr.

No Shot at Class Certification – Pennsylvania Federal Court Rules that Company Review of COVID-19 Vaccine Exemption Requests Requires Individualized Inquiries Not Suitable For Class Treatment

By Gerald L. Maatman, Jr., Shannon Noelle, and Anna Sheridan

Duane Morris Takeaways: In Meinert et al. v. Port Authority of Allegheny County, Case No. 2:22-CV-01736 (W.D. Pa. 2025), Judge Robert J. Colville of the U.S. District Court for the Western District of Pennsylvania denied class certification for a class of former transit company employees that were allegedly denied medical and religious exemptions to an employer-mandated COVID-19 vaccination policy. In so doing, the Court highlighted opportunities for defendants to defeat class certification by offering proof that the proposed class is amenable to ordinary joinder and that individualized inquiries predominate over common ones in terms of the qualified disabilities, sincerely held religious beliefs, and undue hardship. The ruling is a required read for corporate counsel facing workplace-related class actions.

Background

Former bus drivers and maintenance workers of Pittsburgh Regional Transit filed a class action complaint against the transit company in December 2022 alleging that a company policy issued in early 2022 requiring COVID-19 vaccinations for employees resulted in class members being denied a medical or religious exemption in violation of federal and state law prohibiting discrimination based on a disability or sincerely held religious belief. In total, the transit company received 350 accommodation requests related to its COVID-19 vaccination policy — 54 of which were for medical exemptions and 296 of which were for religious exemptions. The Company formed an Accommodation Review Committee that ultimately granted 13 medical exemption and 30 religious exemption requests to its vaccination policy.

The plaintiffs argued that the exemption review process was a “sham.” As it regards the medical exemption review process, the plaintiffs argued all proposed class members (the “medical exemption class”) were denied a medical exemption because their pre-existing conditions or disabilities did not show a contraindication to the CDC guidelines and the Company did not factor whether the conditions were a recognized disability under the ADA. As it regards its religious exemption review process, the plaintiffs maintained that the Company did not engage in any individualized analysis to determine undue hardship (the “religious exemption class”).

The Court’s Decision

In its Rule 23 analysis, the Court ruled that the medical exemption class failed to meet the numerosity and commonality prerequisites and that the religious exemption class failed to satisfy the commonality and predominance requirements for class certification. The Court found that as the plaintiffs presented no evidence to contradict the Company’s proof that only 12 individuals fell into the proposed medical exemption class, the Court opined that the plaintiffs failed to establish numerosity and demonstrate that joinder of all members was impracticable, particularly given that all class members were employees of the Company in Pittsburgh.

The Court also rejected plaintiffs’ generic arguments that class certification would promote consistent results and judicial economy. The Court further addressed the lack of commonality of the medical exemption class in dicta (as the lack of numerosity was sufficient to dismiss the proposed class) but nevertheless found that determining whether each member of the class had a cognizable disability would be an individualized inquiry that could not be considered on a class wide basis.

With respect to the religious exemption class, the Court found a lack of commonality given that the sincerity of a class member’s religious beliefs and the undue hardship to the Company are both individualized inquiries not suitable for class treatment. The Court rejected plaintiffs’ contention that the Company did not engage in any individual analysis to determine undue hardship, crediting an affidavit submitted by the Company detailing the Accommodation Review Committee’s process and attaching denial letters, which it reasoned illustrated that the Company considered undue hardship on an individual-by-individual basis. For the same reasons, the Court also reasoned that predominance was lacking as to the religious exemption class given that the sincerity of class members’ religious beliefs and undue hardship to the Company would both turn on individualized proof rather than evidence common to all class members.

Implications of the Decision

The Court’s decision underscores the opportunity for defendants to defeat certification by submitting evidence that proposed members of the class are limited and could be easily joined through ordinary joinder procedures and that the proposed class-wide proceeding is not apt to generate common answers as to whether class members are entitled to relief, as opposed to common questions.

Employers implementing similar review processes for exemption requests to company policies are well-advised to document and evidence an individualized process in evaluating and responding to such requests to defend against class action exposure.

March 27, 2025 by Justin Donoho

Pennsylvania Federal Court Disposes Of Adtech Class Action Due To Consent By Browsewrap

By Justin Donoho and Gerald L. Maatman, Jr.

Duane Morris Takeaways: On March 24, 2025, in Popa v. Harriet Carter Gifts, Inc., 2025 WL 896938 (W.D. Pa. Mar. 24, 2025), Judge William S. Stickman IV of the U.S. District Court for the Western District of Pennsylvania granted summary judgment for a retailer on a claim that the retailer’s use of website advertising technology violated the Pennsylvania Wiretapping and Electronic Surveillance Control Act (“WESCA”). The ruling is significant as it shows that in the hundreds of adtech class actions across the nation seeking millions or billions of dollars in statutory damages under various federal and state wiretap acts, implied consent may be found as a matter of law, thus disposing of the wiretap claim, where the defendant has posted a clearly labeled privacy statement at the bottom of the relevant webpage that discloses the use of adtech.

Background

This case is one of a legion of class actions that plaintiffs have filed nationwide alleging that Meta Pixel, Google Analytics, and other similar software embedded in defendants’ websites secretly captured plaintiffs’ web browsing data and sent it to Meta, Google, and other online advertising agencies.

This software, often called website advertising technologies or “adtech,” is a common feature on millions of corporate, governmental, and other websites in operation today. In adtech class actions, the key issue is often a claim brought under a federal or state wiretap act, a consumer fraud act, or the Video Privacy Protection Act, because plaintiffs often seek millions (and sometimes even billions) of dollars, even from midsize companies, on the theory that hundreds of thousands of website visitors, times $10,000 per claimant in statutory damages under the Federal Wiretap Act, for example, equals a huge amount of damages. Plaintiffs have filed the bulk of these types of lawsuits to date against healthcare providers, but they have filed suits against companies that span nearly every industry including retailers, consumer products, and universities. Several of these cases have resulted in multimillion-dollar settlements, several have been dismissed, and the vast majority remain undecided.

In Popa, the plaintiff brought suit against a retailer. According to the plaintiff, the retailer installed adtech called NaviStone OneTag on its public-facing website, thereby transmitting to Navistone, allegedly without the plaintiff’s consent, data about her visit to the retailer’s website where she added a set of pet stairs to her shopping cart. See id., 52 F.4th 121, 124-25 (3d Cir. 2022) (referenced in id., 2025 WL 896938). Based on these allegations, the plaintiff claimed that the retailer aided Navistone to intercept her communications in violation of the WESCA. Id., 2025 WL 896938, at *1.

The retailer moved for summary judgment, arguing that the plaintiff consented because of the nature of the internet or, alternatively, due to the retailer’s “Privacy Statement” linked at the bottom of the retailer’s webpage in a color contrasting with the website’s background, as is common on many websites, and which disclosed the retailer’s use of adtech. Id. at *2.

The Court’s Decision

The Court agreed with the retailer and held that the plaintiff impliedly consented to the retailer’s privacy policy, thereby defeating the plaintiffs’ WESCA claim.

Central to the Court’s holding was the WESCA’s statutory exception rendering it inapplicable “where all parties to the communication have given prior consent to such interception.” Id. at *5 (quoting 18 Pa. C.S. § 5704(4)). As the Court explained, “actual knowledge is not required under the mutual consent provisions of WESCA” and “‘prior consent’ can be demonstrated when the person being recorded knew or should have known, that the conversation was being recorded. This standard is one of a reasonable person, and not proof of the subjective knowledge of the person being recorded.” Id. at **5-6. In short, the Court reasoned that “the WESCA mutual consent exception focuses on a reasonable person standard.” Id. at *6.

To determine the reasonable person standard under the WESCA, the Court rejected the retailer’s first argument that any reasonable person using the internet impliedly consents to the use of adtech because of the nature of the internet. As the Court found, “the nature of the internet does not confer blanket implied consent to interception under WESCA.” Id. at *7. However, as the Court further found that “a reasonably prudent person has a lower expectation of privacy on the internet than on, for example, a telephone, which lacks the entire system of trackers, cookies, and algorithms commonly, if not ubiquitously, implicated in the use of a website.” Id. at *7.

Having found that WESCA’s reasonable person standard involves a lower expectation of privacy on the internet than on the telephone, the Court applied this standard to the relevant facts of the case. In doing so, the Court found that although the plaintiff did not actually read the Privacy Statement and therefore did not actually consent, if she were a reasonable person using the internet as the Court deemed her to be, then she had constructive knowledge as a matter of law due to a “browsewrap” agreement and therefore impliedly consented. As the Court explained, “Contracts formed on the Internet [include] ‘browsewrap’ agreements, where a website’s terms and conditions of use are generally posted on the website via a hyperlink at the bottom of the screen. Unlike a clickwrap agreement, a browsewrap agreement does not require the user to manifest assent to the terms and conditions expressly a party instead gives his assent simply by using the website.” Id. at *9.

In conclusion, the Court found a browsewrap agreement as a matter of law and ordered entry of a judgment in the retailer’s favor based on the following facts: (1) the privacy statement “was specifically labeled ‘Privacy Statement.’ [The plaintiff], or any other user could have easily seen the link and understood exactly what it contained”; and (2) the retailer’s placement of a link to the privacy statement on the bottom of the relevant webpage was “in line with common usage”; and (3) “The hyperlink to the Privacy Statement was reasonably conspicuous. It was displayed in a white contrasting font against a blue background on the bottom of every page of the website.” Id. at *11.

In sum, the Court found that “these factors compel a finding that a reasonable person in [the plaintiff]’s position had constructive notice of the terms of the Privacy Statement as a matter of law.” Id.

Implications For Companies

Popa provides powerful precedent for any company opposing adtech class action claims brought not only under the WESCA but also under any state or federal wiretap act, provided the company has a privacy policy sufficiently disclosing the use of adtech via a clearly labeled link on the bottom of the applicable webpage. Consider, for example, the numerous adtech class actions featuring a claim under the Federal Wiretap Act and seeking millions or billions of dollars in statutory damages. Although some courts have dismissed these claims on other grounds such as the lack of an interception or lack of criminal or tortious purpose (as discussed in our previous blog entry about a recent win for adtech defendants, here), other courts have refused to dismiss adtech claims brought under the Federal Wiretap Act, allowing them to proceed to costly merits, class certification, and expert discovery.

Popa provides an alternative path to victory in these cases, where applicable, which is to show that the plaintiff implied consented to the adtech via browsewrap.

March 13, 2025March 13, 2025 by Justin Donoho

Federal Court Holds Illinois Genetic Privacy Claim Not Preempted By Federal Transportation Regulations

By Justin Donoho, Gerald L. Maatman, Jr., and Tyler Zmick

Duane Morris Takeaways: In Short v. MV Transportation, Inc., No. 24-CV-3019 (N.D. Ill. Mar. 10, 2025), Judge Manish S. Shah of the U.S. District Court for the Northern District of Illinois denied defendant’s bid to dismiss a claim brought under the Illinois Genetic Information Privacy Act (“GIPA”). In his ruling, Judge Shah acknowledged that U.S. Department of Transportation regulations require companies in the transportation industry (including defendant) to ensure their drivers satisfy certain physical qualification criteria. The Court nonetheless rejected defendant’s argument that the regulations preempt the GIPA because they do not specifically require employers to ask applicants about their family medical histories (which the GIPA prohibits). In other words, the Court denied defendant’s motion to dismiss because the GIPA does not make it “physically impossible” to comply with federal regulations.

Background

Plaintiff Kevin Short alleged that he applied for a position as a driver for Defendant MV Transportation, Inc., a company that provides paratransit services. As part of the application process, Plaintiff was required to complete a physical examination during which he was asked about his family medical history, including whether his family members had a history of high blood pressure, heart disease, or diabetes.

Plaintiff subsequently sued MV Transportation under the GIPA, alleging that the company violated Section 25(c)(1) of the statute by “solicit[ing], request[ing], [or] requir[ing] . . . genetic information of a person or a family member of the person . . . as a condition of employment [or] preemployment application.” 410 ILCS 513/25(c)(1).

MV Transportation moved to dismiss the complaint on the basis that the Department of Transportation’s (“DOT”) regulations preempted Plaintiff’s GIPA claim. Specifically, MV Transportation argued that Plaintiff’s claim was barred under a “conflict preemption” theory because allowing the claim to proceed would force MV Transportation to choose between complying with the GIPA or complying with federal requirements to “conduct[ ] thorough physical examinations of its drivers.”

MV Transportation pointed to the Motor Carrier Safety Act for support, under which the DOT regulates commercial motor vehicle safety by promulgating “minimum safety standards” to ensure that “the physical condition of operators . . . is adequate to enable them to operate the vehicles safely” – including by requiring drivers to satisfy 13 “physical qualification criteria.” 49 U.S.C. § 31136(a)(3).

The Court’s Decision

In denying MV Transportation’s motion, the Court noted that conflict preemption applies only where “compliance with both federal and state regulations is a physical impossibility” or where the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id. at 6-7 (citations omitted); see also id. at 6 (noting that “‘[i]nvoking some brooding federal interest’ is insufficient to establish preemption; instead, MV Transportation must identify ‘a constitutional text or a federal statute’ that displaces or conflicts with the state law”) (quoting Virginia Uranium, Inc. v. Warren, 587 U.S. 761, 767 (2019)). The Court further observed that MV Transportation had the burden of overcoming the “presumption against preemption.”

In its ruling, the Court concluded that it is not physically impossible for MV Transportation to simultaneously comply with the GIPA and DOT regulations relative to Plaintiff’s pre-employment health screening because the DOT regulations do not specifically require any inquiry into a driver’s family medical history. MV Transportation asserted that DOT regulations nonetheless “contemplate[] that medical examiners may discuss” a person’s family medical history during a physical exam. The Court was not persuaded, however, stating that such a scenario is “not enough to suggest that compliance with GIPA and the federal regulations is ‘physically impossible.’” Id. at 9 (“The mere possibility that a medical examiner asks for information protected by GIPA while performing an examination does not demonstrate impossibility to comply with both federal and state law.”).

The Court similarly held that the GIPA is not an obstacle to the execution of Congress’s purposes, as reflected in the Motor Carrier Safety Act and DOT regulations. As support for this conclusion, the Court observed that the relevant DOL regulations and the GIPA serve different purposes – the regulations are meant to promote the safe operation of commercial motor vehicles, while the GIPA focuses on health information privacy.

Implications Of The Decision

Short v. MV Transportation is one of several recent decisions in which courts denied bids to dismiss GIPA claims at the pleading stage.

Given this litigation landscape and the statute’s strict penalty provision – under which statutory damages can quickly become significant ($2,500 per negligent violation and $15,000 per intentional or reckless violation, see 410 ILCS 513/40(a)(1)-(2)) – employers should ensure they comply with the statute regarding any health screenings they ask applicants or employees to complete (including by explicitly advising applicants and employees not to disclose their family medical histories during the screenings).

February 28, 2025 by Tiffany E. Alberty

Unjust Enrichment Defeated: Colorado Supreme Court Rules Unjust Enrichment Class Claim Cannot Stand

By Tiffany E. Alberty and Gerald L. Maatman, Jr.

Duane Morris Takeaways: On February 24, 2025, in CSU Board of Governors v. Alderman, Case No. 23-SC-565, 2025 CO 9 (Colo. Feb. 24, 2025), the Colorado Supreme Court reversed the Court of Appeals in finding that an unjust enrichment class claim over COVID-19 tuition reimbursement may proceed even though it contained the same subject matter in which a breach of contract claim was dismissed. As a result, a plaintiff cannot properly state a claim for unjust enrichment if an enforceable contract covers the same subject matter as those claims.

Case Background

In April 2020, Renee Alderman (“Alderman”) filed a putative class action against Colorado State University (“CSU”) in state court, accusing the university of taking tuition and student fees and failing to refund the tuition and fees, when the university was closed for six-weeks due to the pandemic in Spring of 2020, and thus breaching their contract or in the alternative, enriching itself with student money. 2025 CO 9, at 3.

Alderman argued that CSU had a contractual obligation to provide “live, in person classroom instruction in a physical classroom” and “access to on-campus athletic events, on-campus computers and technology, and other in-person events” in exchange for student payments inclusive of tuition and fees. Id. at 6. However, CSU noted that it offered “fully online distance-learning programs” which were priced differently than in-person classes in Fort Collins. As such, CSU moved to dismiss Alderman’s complaint under 12(b)(5) – failure to state a claim, citing it had authority to temporarily cease operations under C.R.S. § 23-30-111, which covers exigent circumstances such as in the event of “the prevalence of fatal diseases of other unforeseen calamity.” Id. at 7.

Ultimately, the district court agreed with CSU and dismissed the case in agreeing with the language of C.R.S. § 23-30-111, stating there was no breach because the statute allows for temporary suspensions such as that of Spring 2020. The district court also dismissed the unjust enrichment claim based upon the same statute and contract, concluding it covered the same subject matter. Id. at 8.

Alderman appealed both rulings. The Colorado Court of Appeals (“COA”) upheld the dismissal of the breach of contract claims but reversed the district court’s ruling on the unjust enrichment claim. The COA emphasized that “the contract obligations were obviated when it invoked the statute,” leaving Plaintiffs with no enforcement rights because the statute made her contract claims unenforceable. Id. at 13. CSU then petitioned the Colorado Supreme Court on her unjust enrichment claim in July 2023, which the Supreme Court accepted.

The Supreme Court’s Decision

The Colorado Supreme Court focused on whether an unjust enrichment claim can be properly asserted when it mirrors a contract that: (1) covers the same subject matter; and (2) remains legally enforceable.

The focus on unjust enrichment was determinative a “quasi-contract or contract implied-in-law that does not depend on a promise or privity between the parties,” but when an unjust enrichment claim and breach of contract involve the same subject matter, it is “mutually exclusive.” Id. at 18. The Supreme Court emphasized that this means “a party may not assert a claim for unjust enrichment is a valid contract covers the same subject matter,” which also holds true even if a party is unable to recover under the contract. Id. at 18-19.

Yet, there are two exceptions to this rule for unjust enrichment and same subject matter of a breach of contract: (1) when the express contract fails or (2) the claim covers matters which are outside (or arose after) the contract. Id.

The Supreme Court held that breach of contract and unjust enrichment claim involved the same subject matter (i.e., tuition and fees for educational services). Id. at 19. It reasoned that the COA conflated the “breach of contract claim with the failure of the contract itself,” meaning that even though Alderman’s inability to prove CSU breached the contract by temporarily suspending in-person operations did not render the whole contract void or unenforceable. Id. In sum, all other contractual rights existed between both Alderman and CSU.

Ultimately, the Supreme Court ruled that Alderman’s unjust enrichment arguments merely serves as “gap-filler provision to provide a remedy” where a contract is silent about her “desired term” is not grounded in case law or principle; thus, Alderman’s approach for the Court to expand its reach of unjust enrichment jurisprudence is unfounded. Id. at 21. For these reasons, the Supreme Court opined that Alderman’s unjust enrichment claims fail as a matter of law.

Implications Of The Ruling

The Colorado Supreme Court’s ruling underscores the importance evaluating all claims raised by plaintiffs in both breach of contract and equity principles (such as unjust enrichment) to ensure those claims rise from the same subject matter to ultimate defeat the same claim raised through different legal theories at the outset of a lawsuit.

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

EEOC Male Bias Suit Against Sports Bar Restaurant Group Survives Dismissal

By Gerald L. Maatman, Jr., Anna Sheridan, George J. Schaller

Duane Morris Takeaways: In EEOC v. Battleground Restaurants, Inc. et al., 1:24-CV-792, 2025 U.S. Dist. LEXIS 32071 (M.D.N.C. Feb. 24, 2025), the Court denied Defendants’ motion to dismiss an EEOC lawsuit alleging discriminatory hiring practices against men at a chain of sports bars. The EEOC’s complaint asserts sex discrimination in hiring for server, bartender, and host positions, and for failures to preserve employment records in violation of Title VII of the Civil Rights Act of 1964.

This case signals a new wave of anti-discrimination enforcement actions against companies that prioritize hiring practices that may exclude male applicants. The Commission’s litigation efforts are in full swing, and companies must review their hiring practices to ensure all applicants are weighed neutrally during the application process.

Complaint Allegations

The EEOC’s complaint alleges that between December 1, 2019, and February 18, 2022, Kickback Jack’s restaurants located throughout North Carolina, Virginia, and Tennessee discriminated against males by failing to hire men for front of house, non-managerial positions. Id. at *1. Kickback Jack’s is owned and operated by Battleground Restaurants, Inc. and Battleground Restaurant Group, Inc. (“BRGI”) (collectively “Defendants”). Id.

Kickback Jack’s employs “servers, hosts, and bartenders in non-managerial front-of-house positions,” all of which require no “special skills or qualifications.” Id. at *2. Kickback Jack’s advertisements state that applicants need only “[b]ring [their] great attitude to work and [Kickback Jack’s] will train you.” Id. at *2.

The underlying charge was filed on July 31, 2020, when a female server, Melody Roe, filed an EEOC charge of discrimination against Kickback Jack’s. Id. Included in Roe’s charge of discrimination was statements that Kickback Jack’s “has a policy and/or practice of only hiring females for front of house positions and not into management.” Id. at *3. The EEOC’s investigation into Roe’s charge of discrimination found that Battleground Restaurants, Inc. “maintained a policy or practice . . . of failing or refusing to hire males for non-managerial front of house positions because of their sex.” Id.

The Commission’s investigation further revealed that of the 2,100 non-managerial front-of-house employees employed between December 1, 2019, and February 18, 2022, “approximately 3% were male” and some Kickback Jack’s locations “did not employ male servers at all.” Id. at *4.

As a result of these newly uncovered hiring practices, the EEOC filed a complaint asserting that “a predominantly female front-of-house workforce cannot be justified by any legitimate business purposes” and that Defendants’ hiring practices “were and are intentional and willful.” Id. The Complaint also alleged that Defendants failed to make and preserve records relevant to their employment practices, and specifically failed to retain applications for employment. Id. at *5.

Defendants moved to dismiss the EEOC’s complaint, dismiss or strike BRGI, and requested the Court certify the case for interlocutory appeal. Id. at *1.

District Court’s Ruling

The Court denied the Defendants’ motion in all aspects on the basis that the EEOC complied with procedural and administrative requirements, plausibly alleged a pattern or practice of disparate sex discrimination, and that the EEOC could properly include BRGI as a defendant. Id.

Defendants argued the EEOC failed to provide them with adequate notice of its claims on “behalf of male applicants and the Title VII records violations.” Id. at *5. Defendants did not dispute that it received notice of Roe’s charge of discrimination within 10 days (as required by 42 U.S.C. § 2000e-5(b)). Rather, the Defendants argued the charge of discrimination did not “give them notice of an EEOC investigation into discrimination against males in hiring.” Id. at *7.

The EEOC countered that the investigation into discrimination against males was implicit in Roe’s allegations that the restaurant had “a policy and/or practice of only hiring females” for front of house positions. Id.The Court agreed that the “alleged discrimination against males for front of house positions appears on the face of the charge of discrimination,” Defendants did not allege that they were not on notice of the charge of discrimination, and therefore, the EEOC complied with its administrative and procedural requirements under the statute. Id. at *8

The Court also denied Defendants’ motion to dismiss the EEOC’s preservation of records claim because no 10-day notice requirement exists under the statutory provisions. Id. at *8-9. The Court further disagreed with Defendants that the EEOC’s claims should be limited to 180 days before Defendants received notice of the charge of discrimination because “the complaint [did] not contain the facts necessary to assess whether the EEOC’s claims exceed Title VII’s statute of limitations period.” Id. at *10-11.

On Defendants’ argument to dismiss or strike BRGI, the Court opined that the Commission plausibly alleged BRGI is “essentially, Kickback Jack’s operator.” Id. at *12. The Court held the EEOC can sue BRGI “despite not naming [BRGI] directly as a party in the charge of discrimination or communicating with it based on both the joint enterprise test and substantial identity exception.” Id. at *15.

On the EEOC’s allegations of Title VII sex discrimination in hiring, the Court denied the Defendants’ motion to dismiss because the EEOC “plausibly alleged a pattern or practice of discrimination by using statistics” which demonstrated of the 2,100 non-managerial front-of-house employees approximately only 3% were male. Id. at *18. And in some instances, locations “did not employ any male servers at all.” Id. The EEOC also satisfied its pleading requirements under Title VII as it alleged Defendants discriminated “against male applicants –– a protected class — ” and alleged that “male applicants qualified” for the front-of-house roles.” Id. *17-18. Based on these findings, the Court reasoned “this type of ‘gross disparity’ plausibly demonstrates an inference of discrimination against males who applied to work as servers.” Id. at *18. Therefore, the Court found that the EEOC has met its burden of plausibly alleging the elements of its claim sufficiently to survive a motion to dismiss.

The Court also denied Defendants’ request for certification stating it did “not find any esoteric issues meriting an interlocutory appeal.” Id. at *2.

Implications For Employers

Employers’ hiring practices remain a target for EEOC initiated litigation. This case is but one example of the EEOC bringing a lawsuit after identifying a pattern of potentially discriminatory practices first alleged in a charge. While uncommon, the EEOC does regularly bring these “pattern-or-practice” lawsuits under Section 706 or Section 707 of Title VII of the Civil Rights Act of 1964 when it has a case that draws significant public interest or could make an industry-wide impact.

This is far from the first case of male gender discrimination in the restaurant industry. The popular restaurant chain Hooters has settled several similar lawsuits, one in 1997 for $3.75 million, and one in 2009 for an undisclosed sum. See Latuga v. Hooters, Inc., 1:93-CV-7709 (N.D. Ill. Nov. 25, 1997); see also Grushevski v. Texas Wings, Inc., No. 09-CV-00002 (S.D. Tex. Apr. 16, 2009). Lawry’s restaurants were also hit with an EEOC pattern or practice lawsuit in 2006 alleging that Lawry’s practice of only hiring females for its server positions constituted gender discrimination. See EEOC v. Lawry’s Restaurants, Inc., No. CV 06-01963 (C.D. Cal. Mar. 31, 2006).

The recent case against Battleground shows that the EEOC continues to closely scrutinize hiring practices which select individuals based on a protected characteristic, including gender. Employers must also monitor and audit their hiring practice outcomes to ensure statistical models don’t demonstrate discrimination otherwise an EEOC action may be on the horizon.

February 25, 2025February 25, 2025 by Gerald L. Maatman, Jr.

EEOC’s First Publicized Settlement During The Trump Administration Puts Employers On Notice Of “Anti-American Bias”

By Gerald L. Maatman, Jr., and Christian J. Palacios

Duane Morris Takeaways: On February 18, 2025, in EEOC v. LeoPalace, Case No.: 1:25-CV-00004 (D. Guam), the EEOC settled a lawsuit and entered into a three-year consent decree with LeoPalace Resort, a large hotel in Guam. Under the terms of the agreement, LeoPalace agreed to pay over $1.4 million and hire an external equal employment monitor to settle allegations that it provided employees of non-Japanese national origin with less favorable wages, benefits, and other terms of employment than their Japanese counterparts. This lawsuit is significant because it is the first seven figure settlement that the Commission has procured since President Trump took office in January 2025 and it is accompanied by a statement from the new Acting Chair Andrea Lucas announcing the Commission’s new enforcement agenda and its intent to protect all workers from national origin discrimination and “Anti-American” bias.

The LeoPalace Settlement And Anti-American Bias Enforcement

On February 14, 2025 the EEOC filed suit against LeoPalace in the U.S. District Court for the District of Guam, on behalf of non-Japanese employees Christopher Adams, Thomas Lee and Donald Gueniot Jr., alleging that the hotel subjected these workers to less favorable wages and benefits, and other terms and conditions of employment compared to equivalent or subordinate Japanese employees on the basis of their national origin (non-Japanese), in violation of Title VII of the Civil Rights Act. Id. at 1. The Commission settled with LeoPlace shortly thereafter, resulting in the hotel chain agreeing to pay $1,412,500.00 and further agreeing to a three-year external equal opportunity monitor to oversee compliance and training, as well as reinstate former employees interested in going back to work for LeoPalace. Id. at 9.

In the accompanying press release, Acting Chair Andrea Lucas announced, ““Federal anti-discrimination laws ensure equal employment opportunity for jobs performed by all workers regardless of national origin. The President’s Executive Order on Ending Illegal Discrimination and Restoring Merit-Based Opportunity recognizes that the longstanding federal civil rights laws serve as a bedrock to support equality of opportunity for all Americans. This case is an important reminder that unlawful national origin discrimination includes discrimination against American workers in favor of foreign workers.” See EEOC Newsroom, LeoPalace Resort to Pay Over $1.4 Million in EEOC National Origin Discrimination Lawsuit (Feb. 18, 2025). This is the Commission’s first publicized settlement since Lucas was appointed Acting Chair of the EEOC on January 21, 2025.

One day after the settlement was announced, the EEOC published a second press release on its Newsroom “putting employers and other covered entities on notice” that the Commission was committed to protecting all workers from unlawful national origin discrimination, including American workers. See EEOC Newsroom, EEOC Acting Chair Vows to Protect American Workers from Anti-American Bias (Feb. 19, 2025). The Commission further explained that, although Title VII’s national origin nondiscrimination requirement generally meant that employers could not prefer American workers, it also meant that employers could not prefer non-American workers, or otherwise disfavor Americans. Id. It concluded its press release by stating that while employers may have “many excuses” for preferring non-American workers (including lower labor cost, client preference, or a biased perception that foreign workers have a better work ethic than Americans), none of these were legally permissible reasons to violate Title VII. Id.

Takeaway for Employers

Every new presidential administration brings with it an array of objectives focused on different policy priorities. Since President Trump took office, he has taken unique steps to reshape the Commission by firing its Chair, two Commissioners, and its general counsel, all within the course of a few weeks. The Commission has already indicated it is committed to carrying out President Trump’s policy agenda, consistent with his executive orders related to “unlawful DEI-motivated race and sex discrimination,” “defending the biological and binary reality of sex and related rights,” “protecting workers from religious bias and harassment, including antisemitism” and, as the above settlement illustrates, “anti-American national origin discrimination.” See EEOC Newsroom, President Appoints Andrea R. Lucas EEOC Acting Chair (Jan. 21, 2025).

Employers should take note of the EEOC’s new policy priorities and can likely expect increased enforcement activity in each of these areas for the next four years.

February 25, 2025February 25, 2025 by Gerald L. Maatman, Jr.

Announcing The Launch Of The Duane Morris Discrimination Class Action Review – 2025!

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Duane Morris Takeaways: Legal compliance to prevent discrimination is a corporate imperative. Companies and business executives operate in the court of public opinion and workplace inequality continues to grab headlines and remains forefront in the public eye. In this environment, employers can expect discrimination class actions to reach even greater heights in 2024. To that end, the class action team at Duane Morris is pleased to present the second edition of the Discrimination Class Action Review – 2025. This publication analyzes the key discrimination-related rulings and developments in 2024 and the significant legal decisions and trends impacting discrimination class action litigation for 2025. We hope that companies and employers will benefit from this resource in their compliance with these evolving laws and standards.

Class action litigation in the discrimination space remains an area of key focus of skilled class action litigators in the plaintiffs’ bar. Class actions challenging employment policies and practices has a robust history since passage of the Civil Rights Act of 1964. For decades, federal courts routinely granted class certification in nationwide employment discrimination class actions, which often spiked settlements that entailed huge pay-outs and across-the-board changes to HR systems. In turn, significant changes in the workplaces of Corporate America resulted from class action precedents, massive settlements, and injunctive relief orders. This changed in large part over a decade ago when the U.S. Supreme Court decided Wal-Mart Inc. v. Dukes, et al., 564 U.S. 338 (2011). That decision reversed a class certification order in a pay and promotions lawsuit involving 1.5 million class members who asserted claims of sex discrimination in pay and promotions. In handing down this ruling, the Supreme Court tightened the legal requirements for securing class certifications. It simultaneously forced the plaintiffs’ bar to adjust their strategies on how to prosecute class actions, while also fueling new defense strategies for opposing class certification motions. Suddenly gone were the days when nationwide class actions challenging hiring, compensation, and promotion policies of large corporations inevitably ended with across the board certification orders and big settlement checks.

But the pendulum appears to be swinging back, as courts are becoming increasingly inclined to find for plaintiffs in class certification rulings, and thereby raising the potential for large monetary remedies. This is especially true in the discrimination context, as society continues to grapple with widespread inequality in the wake of large scale social justice campaigns like Black Lives Matter and the #MeToo movement. Businesses are being confronted with increasingly employee-friendly legislative changes and a more aggressive plaintiffs’ bar.

Click here to bookmark or download a copy of the Discrimination Class Action Review – 2025 e-book. Look forward to an episode on the Review coming soon on the Class Action Weekly Wire!

February 24, 2025February 24, 2025 by Gerald L. Maatman, Jr.

Data Privacy Class Action Alleges Insurers Improperly Collected The Data Of 40 Million Users Through Third-Party Applications

By Gerald L. Maatman, Jr., Justin Donoho, George J. Schaller, Ryan T. Garippo

Duane Morris Takeaways: In Mahoney, et al. v. The Allstate Corp, et al., 25-CV-01465 (N.D. Ill. Feb. 11, 2025), Plaintiffs Michael Mahoney and Scott Schultz (collectively, “Plaintiffs”) filed a putative class action lawsuit asserting Allstate, and its subsidiary Arity, illegally obtained personal driving data of 40 million policyholders through third-party mobile application software. The case is pending in the U.S. District Court for the Northern District of Illinois before Judge Steven C. Seeger.This is the third lawsuit in a series of lawsuits alleging class-wide allegations based on Allstate’s alleged data collection practices. See Sims et al. v. The Allstate Corp. et al., 1:25-CV-00407 (N.D. Ill. Jan. 14, 2025) (alleging data collection through third party application Sirius XM); see also Arellano et al. v. The Allstate Corp. et al., 1:25-CV-01256, (N.D. Ill. Feb. 5, 2025) (alleging data collection through third party applications Life360, GasBuddy, and Fuel Rewards).

Mahoney, Sims, and Arellano, represent a triumvirate of data privacy class actions centered on allegations of improper data collection through third-party applications. Companies will be well-served monitor these cases for their novel assertions in trending data privacy litigation.

Complaint Allegations

Michael Mahoney resides in San Francisco, California, and he downloaded the GasBuddy application in 2011 to “find competitive gas prices.” Mahoney, 25-CV-01465, ECF No. 1 § III ¶ 14 (N.D. Ill. Feb. 11, 2025). Scott Schultz resides in Highland Park, Illinois, and he downloaded the GasBuddy application in 2021 and used it “in his own and other people’s vehicles to find competitive gas prices.” Id. § III ¶ 15.

Plaintiffs collectively allege that Allstate and its subsidiary Arity (collectively, “Defendants”) “conspired to collect drivers’ geolocation data and movement data from mobile devices, in-car devices, and vehicles.” Id. § IV ¶ 7. Plaintiffs allege Defendants designed a software development kit that could be integrated into third-party mobile applications such as “Routely, Life360, GasBuddy, and Fuel Rewards.” Id. § IV ¶ 8. Plaintiffs further allege Defendant advertised that they “collect data ‘every 15 seconds or less’ from 40 million ‘active mobile connections’ and ‘derive[] unique insights that help insurers, developers, marketers, and communities understand and predict driving behavior at scale.” Id. § IV ¶ 24.

Plaintiffs contend Defendants’ software development kit was “designed to and does collect data” including “Geolocation data and ‘GPS Points,’” “cellphone accelerometer, magnetometer, and gyroscopic data,” “Trip attributes” data (including start and end locations, trip distances, trip duration), “Derived events” data (including acceleration, speeding, distracted driving, crash detection), and “Metadata.” Id. § IV ¶ 11 (A) – (E). Plaintiffs further assert that when using these third-party applications “Defendants could collect real-time data on their locations and movements and surreptitiously collect highly sensitive and valuable data directly from Plaintiffs’ mobile phones.” Id. § IV ¶ 16.

It is also important to note that Plaintiffs maintain that Defendants used their personal data to “develop, advertise, and sell several products and services to third parties, including insurance companies . . .” and used the purchased consumer data for “[Defendants’] own underwriting purposes.” Id. § IV ¶ 23. Plaintiffs, ultimately, assert that Defendants real purpose in using this data is for their “own financial and commercial benefit” and to obtain “substantial profit.” Id. § V ¶ 49. They ultimately assert via their nine-count Complaint that this technology amounts to a wiretapping of their personal information which entitles them, inter alia, to a sum of “$100 per day per violation or $10,000” per class member whichever is greater. Id. § V ¶ 51.

Implications For Companies

Although such data collection lawsuits are no longer a new phenomenon, their scope has become far more aggressive as the plaintiffs’ bar continues to look for ways to monetize lawsuits against corporations using such technologies.

Take for example the dilemma presented by Mahoney. In that case, it is likely that Defendants will have strong defenses to this action. For example, Plaintiffs admit that Defendants’ purpose in using this technology was to earn “substantial profit.” Id. § V ¶ 49. Based on similar allegations, many courts have found that these purposes are insufficient for a plaintiff to avail itself of such wiretapping statutes. See, e.g., Katz-Lacabe v. Oracle Am., Inc., 668 F. Supp. 3d 928, 945 (N.D. Cal. 2023) (dismissing wiretap claim because defendant’s “purpose has plainly not been to perpetuate torts on millions of Internet users, but to make money.”).

There are, however, enough court rulings that come out in the opposite direction to give a corporate defendant pause. See, e.g., R.S. v. Prime Healthcare Services, Inc., No. 24-CV-00330, 2025 WL 103488, at *6-7 (C.D. Cal. Jan. 13, 2025) (recognizing the split and siding with the plaintiffs). And, if Plaintiffs are correct that there are 40 million individuals in the class, and that each class member is entitled to $10,000 at a minimum, then this lawsuit alleges at least $400 billion dollars in liability. Even if there is a 1% chance of success on these claims, it would suggest that the completely unrealistic figure of $4 billion dollars is on the table.

Corporations in these types of class actions are faced with the difficult choice of settling the claims for an astronomical figure based on the use of technologies which are ubiquitous in nature (like software development kits for mobile applications) or defend a $400 billion lawsuit based on defenses in an area of the law which is not fully developed. It will be interesting to see how the Mahoney defendants balance these concerns as the case progresses, because many twists and turns lie ahead.

In the meantime, corporate counsel should take the opportunity to evaluate their companies’ data collection and privacy policies to make sure their companies are not easy targets. If the allegations in Mahoney are any example, the mere threat of one of these lawsuits should be enough to keep corporate counsel up at night. And, if their companies are ultimately sued in one of these lawsuits, they should ensure that an experienced defense team has its hands on the steering wheel.

February 20, 2025February 20, 2025 by Gerald L. Maatman, Jr.

The Class Action Weekly Wire – Episode 89: Key Trends In Privacy Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman, special counsel Justin Donoho, and senior associate Tyler Zmick with their discussion of the key trends analyzed in the 2025 edition of the Duane Morris Privacy Class Action Review, including the major settlements and cutting-edge litigation theories percolating in a variety of privacy-related class actions, including the Biometric Information Privacy Act (“BIPA”), advertising technologies (“adtech”), and artificial intelligence tools.

Bookmark or download the Privacy Class Action Review e-book here, which is fully searchable and accessible from any device.

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

Episode Transcript

Jerry Maatman: Welcome, loyal listeners, to the next installment of the Class Action Weekly Wire. My name is Jerry Maatman, I’m a partner at Duane Morris, and joining me today are my colleagues, Justin and Tyler.

Justin Donoho: Thank you, Jerry, happy to be part of the podcast.

Tyler Zmick: Thanks, Jerry. I’m glad to be here.

Jerry: Today on our podcast we’re discussing the recent publication of this year’s edition of the Duane Morris Privacy Class Action Review. Our loyal listeners can download the desk reference from our blog, the Duane Morris Class Action Defense Blog. Justin, can you tell our listeners a little bit about our desk reference?

Justin: Yes, and thank you. Last year saw a continued explosion in privacy class action litigation. As a result, it is imperative that companies beef up their efforts to comply with privacy laws in the many ways that companies interact with employees, customers, and others. To that end, the class action team at Duane Morris is pleased to present the Privacy Class Action Review – 2025. This publication analyzes the key privacy-related rulings and developments in 2024, and the significant legal decisions and trends impacting privacy class action litigation for 2025 in a variety of different privacy-related subject areas. We hope that companies and employers will benefit from this resource in their compliance with these evolving laws and standards.

Jerry: Well, just on this podcast I know the assembled speakers have over 60 years of experience in dealing with these issues. But I’d have to say 2024 was a year of incredible change and flux. Tyler, what are some of the key guideposts out there in the case law over the past 12 months?

Tyler: So, there’s been an explosion of class action lawsuits in recent years, including 2024, involving adtech technologies. And of course, biometric data. I think the biggest driver is the fact that we are operating in a legal environment that is evolving so quickly that said technology has far outpaced the law, especially when it comes to new tools like Meta Pixel, Google Analytics, and other adtech technologies. While these tools are innovative in many ways that benefit businesses, they’re also collecting massive amounts of sensitive data – data that consumers may have never explicitly agreed to share. The courts are now grappling with outdated statutes, such as old wiretapping and eavesdropping laws, and trying to apply them to modern technologies.

Justin: Absolutely. Businesses that rely on these technologies have often done so without thinking through a variety of ways that they can mitigate the risk of noncompliance or mitigate the risk of facing any class action lawsuit in the first place, by modernizing their terms of service and data privacy policies. The rise in class actions is directly related to an increased public awareness about data privacy, and of course, the increased aggressiveness of plaintiffs’ attorneys trying to expand the application of the Illinois Biometric Information Privacy Act, for example, with high-profile cases alleging violations of various AI technologies that perform functions other than facial recognition or any kind of person recognition.

Jerry: Speaking of BIPA – 2024 certainly saw a mixed bag of rulings related to biometric data collection, particularly on the issue of facial analysis technologies. So, how does one make sense, if you’re a corporate decision-maker, of what businesses are facing and the risks that are out there, given these murky waters with the case law developments?

Tyler: That’s a great question. The mixed rulings obviously create an atmosphere of uncertainty. And that’s what I think is driving so much of the litigation companies are basically being forced to decide whether to settle or to litigate these cases and risk very high damage awards, because often there are substantial penalties for violations when courts release decisions on issues where there’s no clear-cut answer, and when the decisions are often conflicting, such as on the issue you mentioned about whether certain types of data count as biologically unique. It leaves businesses with many gray areas to navigate, and this is only compounded by the reality that these technologies evolve faster than courts can keep up.

Justin: Yes, and from the business side, companies are being forced to take a much more cautious approach when it comes to how they collect and process biometric data. For example, they’re revisiting their privacy policies in terms of service and taking a closer look at the technologies they use, too. Some companies, especially larger ones, like Google, Meta, and Oracle, have already settled for significant amounts, which sends a clear signal to others that ignoring these issues is just simply too costly.

Jerry: Let’s talk about settlements. So, the plaintiffs’ mantra is file the case, certify the case, then monetize the case. Certainly, in the last 12 months we saw some eye-popping settlements, particularly the $1.4 billion deal between Meta and the State of Texas. What does this tell us about the broader implications of these settlements and what it means for companies operating in this sort of environment?

Justin: Yeah, the size of these settlements is indicative of the stakes involved for sure. As you mentioned, the Meta settlement alone was huge, and it’s reflective of the kind of high-dollar cases we are now seeing across the board. Privacy class action litigation has outpaced other areas of law in terms of growth. And as companies continue to allegedly violate privacy laws, there’s real financial risk involved statutory damages in some of these privacy laws can reach up to $5,000 per violation, which to a plaintiff means per website visit of millions of visitors. And with class actions these violations multiply quickly. This creates significant potential liability for companies.

Tyler: I think that’s exactly right. and it’s not just the monetary cost. These cases also damage a company’s reputation in the world we live in. Consumers are more aware than ever of how their data is used. And if you’re a company in a settlement like that, it’s not just about paying a fine – you’ve also potentially lost consumer trust, and that can have long term business implications.

Jerry: Well, we’ve certainly seen a rise in filings of privacy-related class actions, but we’re also seeing an increase in the skill and ability of the plaintiffs’ bar to secure certification in these class actions. Do you expect this trend to continue during 2025?

Justin: Well, at least the rise in privacy class actions I expect to continue. I mean, it’s been going like this, and it’s going to keep going. We’ll see about the certification decisions as more consumers become aware of their rights, and as data privacy laws continue to evolve. I think we’ll continue to see an uptick in class action filings for sure. Privacy law is still in its infancy in many respects. and many of the current legal frameworks just don’t fully cover the realities of all the new technologies, and how data is being used today, and how data science is evolving the ambiguity is creating fertile grounds for litigation, and I expect that to keep growing.

Tyler: And from a litigation standpoint – yes, we’ll likely continue to see class actions. However, I do think that courts will eventually have to provide more clarity on some of these unsettled issues. We’ve got one of the first federal appeals brewing soon, for example, regarding whether online advertising technology violates the Federal Wiretap Act. As things currently stand, though, the litigation landscape in this area and many other areas of privacy law remain in flux, and there’s still a lot of uncertainty about certain privacy laws, and how they will be applied.

Jerry: Well, I guess the bottom line is we’ve reached a pivot point, certainly a pivotal moment in the intersection of technology and privacy law. Well, thank you, Justin and Tyler, for being here today, and thank you to our loyal listeners for participating in this week’s Class Action Weekly Wire. Please stop by and visit our blog for a free copy that you can download of the Privacy Class Action Review e-book.

Tyler: Thank you for having me, Jerry, and thank you, Listeners.

Justin: Thank you so much, everybody.

February 18, 2025February 18, 2025 by Gerald L. Maatman, Jr.

It’s Here! The Duane Morris Privacy Class Action Review – 2025

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

Duane Morris Takeaways: The last year saw a virtual explosion in privacy class action litigation. As a result, compliance with privacy laws in the myriad of ways that companies interact with employees, customers, and third parties is a corporate imperative. To that end, the class action team at Duane Morris is pleased to present the second edition of the Privacy Class Action Review – 2025. This publication analyzes the key privacy-related rulings and developments in 2024 and the significant legal decisions and trends impacting privacy class action litigation for 2025. We hope that companies and employers will benefit from this resource in their compliance with these evolving laws and standards.

Click here to bookmark or download a copy of the Privacy Class Action Review – 2025 e-book. Look forward to an episode on the Review coming soon on the Class Action Weekly Wire!