Jennifer A. Riley – Class Action Defense

July 12, 2024 by Gerald L. Maatman, Jr.

Minnesota Federal Court Imposes $100 Per Day Civil Contempt Sanctions For Company’s Continued Failure To Comply With An EEOC Subpoena

By Gerald L. Maatman, Jr., Jennifer A. Riley, and George J. Schaller

Duane Morris Takeaways: In EEOC v. Cambridge Transportation., Inc., No. 0:23-MC-00101, 2024 U.S. Dist. LEXIS 118857 (D. Minn. July 8, 2024), Judge Nancy E. Brasel of the U.S. District Court for the District of Minnesota accepted U.S. Magistrate Judge Dulce J. Foster’s Report and Recommendation (see EEOC v. Cambridge Transportation, Inc., No. 0:23-MC-00101, 2024 U.S. Dist. LEXIS 121147 (D. Minn. June 10, 2024)) to impose civil contempt sanctions against Cambridge Transportation Inc. for its failure to comply with an EEOC subpoena. The EEOC sought documents in its administrative charge investigation into Title VII discrimination allegations on behalf of a former Cambridge Transportation, Inc. worker.

The Court ordered payment to the EEOC of $100 per day for each day Cambridge Transportation, Inc. remains out of compliance beginning on June 7, 2024. Over one month later, Cambridge remains out of compliance based on the docket. This ruling is a warning admonisiton for employers facing EEOC subpoenas and the seriousness for any alleged non-compliance with the Commission’s investigation process.

Case Background

On October 19, 2023, the EEOC petitioned for an Application for and Order to Show Cause Why Administrative Subpoena Should Not Be Enforced (the “Application”) against Respondent Cambridge Transportation, Inc. (“Cambridge”). (See United States EEOC v. Cambridge Transp., Inc., No. 0:23-MC-00101, ECF No. 1.) The EEOC’s subpoena duces tecum sought information from Cambridge regarding a charge of discrimination under Title VII of the Civil Rights Act of 1964. (See id.) In the underlying charge, Charging Party Becky Blechinger alleged that Cambridge “discriminated against her on the bases of her sex (female), race (white), national origin (United States) and disability by paying a higher rate of compensation to men of Somalian national origin,” who worked at Cambridge. (See id., ECF No. 2, at 2.)

On November 1, 2023, the Court issued an order to show cause for the EEOC’s Application. (See id., ECF No. 7.) On November 21, 2023, the EEOC provided a status report that reflected it had not effectuated service on Cambridge. (See id., ECF No. 9)

On December 19, 2023, the EEOC filed a Motion to Stay Proceedings. (See id., ECF No. 12.) Therein, the EEOC stated Cambridge responded and acknowledged receipt of the Court’s order to show cause and further indicated that Cambridge intended to produce the documents identified in the EEOC’s Application by December 26, 2023. (See id.) The following day the Court stayed the case. (See id., ECF No. 13.)

On January 25, 2024, the EEOC filed another status report with a request due to Cambridge’s failure to comply with the subpoena. Thereafter, the Court entered an order for hearing on the EEOC’s Application. (See id., ECF Nos. 14 & 15.) On February 22, 2024, Cambridge attended the hearing via telephone through its non-attorney registered agent. (See id., ECF No. 18.)

On February 27, 2024, the Court granted the EEOC’s Application and determined that Cambridge must comply with the subpoena or otherwise the Court may find Cambridge in civil contempt and impose a daily fine for each day Cambridge remains out of compliance. (See id., ECF No. 20.)

On May 14, 2024, the EEOC provided a status report to the Court and reiterated that Cambridge failed to comply with the subpoena and requested the Court impose a civil fine of $800 per day, for each day past May 14, 2024, that Cambridge remains non-compliant. (See id., ECF No. 23.)

On May 20, 2024, the Court ordered a hearing on the EEOC’s Application and required Cambridge to retain counsel to enter an appearance on its behalf to show cause why sanctions should not be imposed for failure to comply with the Court’s February 27 order. (See id., ECF No. 25.) On June 7, 2024, the hearing occurred and Cambridge did not appear. (See id., ECF No. 27.)

The Magistrate’s Report and Recommendation and the District Court Judge’s Finding

On June 10, 2024, Magistrate Judge Dulce J. Foster issued his Report and Recommendation. (See United States EEOC v. Cambridge Transp., Inc., No. 0:23-MC-00101, 2024 U.S. Dist. LEXIS 121147 (D. Minn. June 10, 2024). The report detailed the continued failures of Cambridge to respond to the Agency’s subpoena and efforts to enforce its subpoena. (See id., at *1-6.)

The Court opined Cambridge had “ample time to retain counsel, for its alleged counsel to enter an appearance and to ensure its counsel either would be available to attend the show cause hearing or move to reschedule it” and “despite having months,” it had “faile[d] to do so and made no efforts to explain that failure or seek more time to comply.” (See id., at *5.) As a result, the Court found Cambridge waived all of its defenses to the EEOC’s motion and request for sanctions. (See id., at *5-6.)

The Court reiterated its authority that it “may hold a person who, having been served, fails without adequate excuse to obey the subpoena or an order related to it.” (See id, at *6) (quoting Fed. R. Civ. P. 45(g).) The Court found Cambridge’s continued non-compliance with the subpoena warranted contempt and imposition of monetary sanctions. (See id.) The Court’s recommendation was not made “lightly, but Cambridge’s intransigent refusal to cooperate” left the Court with few other options. (See id.)

On the requested $800 per day fine from the EEOC, the Court reasoned at this stage that it was not justified at this stage. (See id.) The Court instead recommended an initial daily fine of “$100 per day for each day Cambridge remains noncompliant with the subpoena beginning June 7, 2024, the date of the show cause hearing, and continuing until Cambridge satisfactorily complies.” (See id., at *7.) The Court further held “additional sanctions and penalties may be warranted in the future” if Cambridge’s failure to comply continues. (See id.)

The District Court Judge found no clear error in the Magistrate Judge Foster’s recommendation and report. (United States EEOC v. Cambridge Transp., Inc., No. 0:23-MC-00101, 2024 U.S. Dist. LEXIS 118857, at * 1 (D. Minn. July 8, 2024).) In so holding, the Court adopted the report in full, and found Cambridge in civil contempt and ordered payment of $100 per day for each day Cambridge remains out of compliance with the EEOC’s subpoena, beginning on June 7, 2024. (Id.) The Court left open whether any additional sanctions and penalties may apply.

Implications For Employers

This recommendation and report, and resulting Court order, illustrates the length to which the EEOC will go to enforce its investigation of allegations of discrimination under Title VII of the Civil Rights Act of 1964. Companies should recognize the EEOC’s enforcement efforts have teeth, and heed the Court’s response that imposed a daily fine based on total non-compliance.

Companies should take measures to ensure compliance with any EEOC request for information and respond accordingly, and promptly, to any investigation including subpoena requests. Otherwise, Companies may find themselves footing a $100 bill for every day of non-compliance and possibly expose themselves to further civil contempt sanctions.

July 8, 2024 by Gerald L. Maatman, Jr.

DMCAR Mid-Year Review – 2024/2025: FLSA Conditional Certifications Remain High, But So Far In 2024 Courts Are Granting Less Class Certification Motions Overall Compared To 2023

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

Duane Morris Takeaway: In the first half of 2024, across all major types of class actions, courts issued rulings on 203 motions to grant or deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 138 rulings, with an overall success rate of 68%. In contrast, in 2023, the plaintiffs’ class action bar succeeded in certifying class actions at a higher rate. Across all major types of class actions, courts issued rulings last year on 451 motions to grant or to deny class certification. Of these, plaintiffs succeeded in obtaining or maintaining certification in 324 rulings, an overall success rate of 72%. In 2022, by comparison, courts issued rulings on 335 motions to grant or to deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 247 rulings, an overall success rate of nearly 74%.

In 2024, the number of motions that courts considered varied significantly by subject matter area, and the number of rulings varied across substantive areas.

The following list summarizes the results in each of ten key areas of class action litigation:

WARN – 100% granted / 0% denied (1 of 1 granted / 0 of 1 denied)
FLSA / Wage & Hour (Conditional Certification) – 84% granted / 16% denied (68 of 81 granted / 13 of 81 denied)
Antitrust – 80% granted / 20% denied (8 of 10 granted / 2 of 10 denied)
FCRA / FDCPA – 75% granted / 25% denied (3 of 4 granted / 1 of 4 denied)
Securities Fraud – 67% granted / 33% denied (10 of 15 granted / 5 of 15 denied)
ERISA – 67% granted / 33% denied (10 of 15 granted / 5 of 15 denied)
Discrimination – 60% granted / 40% denied (6 of 10 granted / 4 of 10 denied)
Privacy – 60% granted / 40% denied (3 of 5 granted / 2 of 5 denied)
FLSA / Wage & Hour (Decertification) – 33% granted / 67% denied (3 of 9 granted / 6 of 9 denied)
Civil Rights – 48% granted / 52% denied (10 of 21 granted / 11 of 21 denied)
Consumer Fraud – 48% granted / 52% denied (12 of 25 granted / 13 of 25 denied)
Data Breach – 33% granted / 67% denied (1 of 3 granted / 2 of 3 denied)
Products Liability / Mass Torts – 0% granted / 100% denied (0 of 1 granted / 1 of 1 denied)
TCPA – 0% granted / 100% denied (0 of 3 granted / 3 of 3 denied).

The plaintiffs’ class action bar obtained the highest rates of success in WARN, wage & hour, antitrust, and FCRA class actions. There has only been one WARN certification ruling in 2024, which was granted by the court for a 100% success rate. In wage & hour litigation, plaintiffs succeeded in obtaining orders certifying classes and/or collective actions in 68 of 81 rulings issued during 2024, a success rate of 84%. In cases alleging antitrust violations, plaintiffs succeeded in obtaining orders certifying classes in 8 of 10 rulings, for a success rate of 80%. And in cases alleging FCRA violations, plaintiffs managed to obtain class certification rulings in 3 of 4 rulings issued during 2024, a success rate of 75%.

Courts Issued More Rulings In FLSA Collective Actions and Wage & Hour Class Actions Than In Any Other Areas Of Law

For the first half of calendar year 2024, courts again issued more certification rulings in FLSA collective actions and wage & hour class actions than in other types of cases. Plaintiffs historically have been able to obtain conditional certification of FLSA collective actions at a high rate, which surely has contributed to the number of filings in this area.

From January 1 to July 1, 2024, courts considered more motions for certification in FLSA matters than in any other substantive area. Overall, courts issued 90 rulings. Of these, 81 addressed first-stage motions for conditional certification of collective actions under 29 U.S.C. § 216(b), and 9 addressed second-stage motions for decertification of collective actions. Of the 81 rulings that courts issued on motions for conditional certification, 68 rulings favored plaintiffs, for a success rate of nearly 84%.

These numbers are higher than the numbers observed in 2023, during which courts issued 183 rulings. Of these, 165 addressed first-stage motions for conditional certification of collective actions under 29 U.S.C. § 216(b), and 18 addressed second-stage motions for decertification of collective actions. Of the 167 rulings that courts issued on motions for conditional certification, 125 rulings favored plaintiffs, for a success rate of nearly 75%.

At the decertification stage, courts generally have conducted a closer examination of the evidence and, as a result, defendants historically have enjoyed an equal if not higher rate of success on these second-stage motions as compared to plaintiffs.

The results so far in 2024 have not supported that typical success. Of the 9 rulings that courts issued on motions for decertification of collective actions, only 3 rulings favored defendants, for a lower success rate of 33%.

An analysis of the rulings demonstrates that a disproportionate number emanated from traditionally pro-plaintiff jurisdictions, including the judicial districts within the Second Circuit (16 decisions) and Ninth Circuit (10 decisions), which include New York and California, respectively.

Takeaways From The Numbers Midway Through 2024

Notable this year at the halfway point, there have been a very small number of rulings emanating from the Fifth and Sixth Circuits (4 and 7 decisions, respectfully), which could account for the high overall conditional certification rate in the wage & hour space, given that these two circuits have imposed new, stricter standards for conditional certification. Plaintiffs likely are shifting their case filings away from these two circuits toward jurisdictions with more lenient, more plaintiff-friendly standards for conditional certification.

The numbers no doubt flow from the different standards and approaches that courts in different federal circuits take in evaluating motions for conditional certification and decertification and, in turn, the likelihood of plaintiffs’ success on such motions. If more courts join the Fifth and Sixth Circuits in abandoning the traditional two-step certification process under 29 U.S.C. § 216(b), and thereby increase the time and expense of gaining a conditional certification order, it may lead to a reshuffling of the deck in terms of where plaintiffs file their cases and the types of claims they pursue.

We will continue to track class certification trends in 2024 and will report on final numbers in the Duane Morris Class Action Review – 2025, which will be published in the first week of January. Stay tuned!

July 1, 2024July 1, 2024 by Gerald L. Maatman, Jr.

Duane Morris Class Action Review – 2024/2025: Mid-Year Class Action Settlement Report & Analysis

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

Duane Morris Takeaways: Corporate defendants saw unprecedented settlement numbers across all areas of class action litigation in 2022 and 2023, and halfway through 2024, settlement numbers remain robust. The cumulative value of the top ten settlements across all substantive areas of class action litigation hit near record highs in 2023, second only to the settlement numbers observed in 2022. When the numbers for 2022 and 2023 are combined, the totals signal that corporate defendants have entered a new era of heightened risks and higher stakes in the valuation of class actions. On an aggregate basis, across all areas of litigation, class actions and government enforcement lawsuits garnered more than $51.4 billion in settlements in 2023, almost as high as the record-setting $66 billion in 2022. When combined, the two-year settlement total eclipses any other two-year period in the history of American jurisprudence.

As a prelude to the Duane Morris Class Action Review – 2025, this post reports on our analysis of class action settlements through the first half of 2024. The data shows that for the period of January 1 to June 30, 2024, the current year is on pace with the numbers of the previous two years. As of the end of the first half of 2024, the aggregate settlement total across all areas of class action litigation and government enforcement lawsuits is $22.9 billion (in accounting for the top 5 settlements in the various substantive areas of law). It is anticipated that these numbers will increase across the board by the end of the year and when measured by the top 10 settlements in each category.

More Billion Dollar Class Action Settlements

At the mid-way point of 2024, there are four settlements over the billion-dollar mark. In 2023, parties resolved 14 class actions for $1 billion or more in settlements, making 24 billion-dollar settlements in the last two years. Reminiscent of the Big Tobacco settlements nearly two decades ago, 2022 and 2023 marked the most extensive set of billion-dollar class action settlements and transfer of wealth in the history of the American court system.

Class action settlements totaled $66 billion in 2023, $51.4 billion in 2023, and $22.9 billion in 2024 so far.

The Scorecard On Leading Class Actions Settlements Halfway Through 2024

The plaintiffs’ class action bar has scored rich settlements thus far in 2024 in virtually every area of class action litigation.

[Click image to enlarge] The top 5 class action settlement totals in each practice area.

The following list shows the totals of the top 5 settlements at the mid-year point in 2024 in key areas of class action litigation:

$14.45 Billion – Products liability/mass tort class actions
$4.17 Billion – Antitrust class actions
$2.05 Billion – Securities fraud class actions
$628 Million – Consumer fraud class actions
$388.95 Million – Data breach class actions
$331.5 Million – Privacy class actions
$288 Million – ERISA class actions
$157.15 Million – Wage & hour class and collective actions
$147 Million – Discrimination class actions
$101.3 Million – Labor class actions
$67.7 Million – Government enforcement actions
$58.8 Million – Civil rights class actions
$49.69 Million – TCPA class actions
$24.96 Million – Fair Credit Reporting Act class actions

The high dollar settlements of the past two years suggested that the plaintiffs’ bar would continue to be equally, if not more aggressive, with their case filings and settlement positions. From the 2024 data, it certainly looks to be the case as we end the first half of the year.

The data points in each category are set out in the following charts.

Top Class & Collective Action Litigation Settlements In 2024

Top Antitrust Class Action Settlements In 2024

The top 10 antitrust class action settlements totaled $11.74 billion in 2023, and $3.72 billion in 2022.

1. $2.77 billion – In Re College Athlete NIL Litigation, Case No. 20-CV-3919 (N.D. Cal. May 23, 2024) (settlement agreement reached to resolve claims with former college athletes who filed an antitrust class action seeking compensation allegedly denied to them for decades before the Supreme Court overturned the NCAA’s compensation ban)..
2. $418 million – Burnett, et al. v. the National Association of Realtors, Case No. 19-CV-332, Gibson, et al. v. National Association of Realtors, Case No. 23-CV-788, and Umpa, et al. v. The National Association of Realtors, Case No. 23-CV-945 (W.D. Mo. Mar. 15, 2024) and Moehrl, et al. v. The National Association of Realtors, Case No. 19-CV-1610 (N.D. Ill. Apr. 23, 2024) (preliminary settlement approval granted in a class action to resolve claims that broker commission rules caused home sellers across the country to pay inflated fees).
3. $385 million – In Re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litigation, Case No. 13-MD-2445 (E.D. Penn. Feb. 27, 2024) (final settlement approval granted in a class action to resolve claims brought by states, insurers and buyers of a new dissolvable strip version of Suboxone to the market, encouraging the move from tablets to strips by misrepresenting to the U.S. Food and Drug Administration that the tablets posed a risk to children of accidental consumption).
4. $335 million – Le, et al. v. Zuffa LLC, Case No. 15-CV-1045 (D. Nev. Mar. Mar. 20, 2024) (preliminary settlement approval sought in a class action to resolve claims that fighters’ wages were suppressed by up to $1.6 billion).
5. $265 million – In Re Generic Pharmaceuticals Pricing Antitrust Litigation, Case No. 16-MD-2724 (E.D. Penn. June 26, 2024) (preliminary settlement approval granted for a class action to resolve claims by direct purchasers, end-payors and states alleging that multiple makers of generic drugs conspired to keep the prices on their products high, in violation of state laws and the federal Sherman Act).

Top Civil Rights Class Action Settlements In 2024

The top 10 civil rights class action settlements totaled $643.15 million in 2023, and $1.31 billion in 2022.

1. $17.5 million – Clark, et al. v. City Of New York, Case No. 18 Civ. 2334 (S.D.N.Y. Apr. 5, 2024) (settlement approval sought in a class action to resolve claims alleging that the city policy department’s policy requiring all arrested individuals to have their photograph taken without a head covering violated the Religious Land Use and Institutionalized Persons Act).
2. $13.7 million – Sow, et al. v. New York, Case No. 21 Civ. 533, (S.D.N.Y. Mar. 5, 2024) (final settlement approval granted for a class action resolving claims by individuals who were arrested or arrested and subjected to force by the New York City Police Department during protests in 2020 following the murder of George Floyd).
3. $12.8 million – In Re Chiquita Brands International Inc., Alien Tort Statute And Shareholders Derivative Litigation, Case No. 08-MD-1916 (S.D. Fla. June 24, 2024) (preliminary settlement approval granted in a class action to resolve claims alleging that the company funded Colombian paramilitary groups leading to the deaths of over 2,500 victims.
4. $10 million – Adberg, et al. v City Of Seattle, Case No. 20-2-14351-1 (Wash. Super. Ct. Jan. 30, 2024) (settlement reached to end a lawsuit brought by more than 50 protesters who say they were brutalized by its police force during Black Lives Matter demonstrations in the summer of 2020).
5. $4.8 million – Students For Fair Admissions, Inc., et al. v. University Of North Carolina, Case No. 14-CV-954 (M.D.N.C. Jan. 29, 2024) (the University of North Carolina agreed to cover the fees and expenses of a group founded by affirmative action advocates that won a U.S. Supreme Court challenge to the school’s consideration of race in student admissions).

Top Consumer Fraud Class Action Settlements In 2024

The top 10 consumer fraud class action settlements totaled $3.29 billion in 2023, and $8.596 billion in 2022.

1. $150 million – In Re Chevrolet Bolt EV Battery Litigation, Case No. 20-CV-13256 (E.D. Mich. May 16, 2024) (preliminary settlement approval sought in a class action to resolve claims against General Motors LLC and LG units over alleged battery which allegedly make cars prone to overheating and fires).
2. $145 million – In Re Kia Hyundai Vehicle Theft Marketing, Sales Practices, And Products Liability Litigation, Case No. 22-ML-3052 (N.D. Cal. July 15, 2024) (final settlement approval sought in a class action resolving claims that that consumers were left vulnerable to theft and damage due to vehicles being improperly manufactured with design flaws).
3. $125 million – National Veterans Legal Services Program, et al. v. United States, Case No. 16-CV-745 (D.D.C. Mar. 20, 204) (preliminary settlement approval granted in a class action resolving claims challenging the legality of “excessive” PACER fees).
4. $108 million – Elder, et al. v. Reliance Worldwide Corp., Case No. 20-CV-1596 (N.D. Ga. Apr. 23, 2024) (preliminary settlement approval granted in a class action to resolve claims alleging that the defendants made and sold water heater connector hoses with defective rubber linings).
5. $100 million – Esposito, et al. v. Cellco Partnership d/b/a Verizon Wireless, Case No. MID-L-6360-23 (N.J. Super. Apr. 26, 2024) (final settlement approval granted in a class action to resolve claims that the company misled its customers by not disclosing certain fees in its postpaid wireless service plans).

Top Data Breach Class Action Settlements In 2024

The top 10 data breach class action settlements totaled $515.75 million in 2023, and $719.21 million in 2022.

1. $350 million – In Re Alphabet Inc. Securities Litigation, Case No. 18-CV-6245 (N.D. Cal Apr. 9, 2024) (preliminary settlement approval granted in a class action alleging that a software glitch led to a data breach in which Google+ users’ personal data was exposed for three years).
2. $15 million – Salinas, et al. v. Block Inc., Case No. 22-CV-4823 (N.D. Cal. June 3, 2024) (preliminary settlement approval granted in a class action to resolve claims that a December 2021 data breach at the companies exposed personally identifiable information, account numbers and trading activity of 8.2 million people).
3. $8.7 million – Sherwood, et al. v. Horizon Actuarial Services LLC, Case No. 22-CV-1495 (N.D. Ga. Apr. 2, 2024) (final settlement approval granted for a class action to resolve claims that employer benefit plan members’ sensitive data was exposed in a massive breach at a consulting company).
4. $8 million – In Re Orrick, Herrington & Sutcliffe LLP Data Breach Litigation, Case No. 23-CV-4089 (N.D. Cal. May 31, 2024) (preliminary settlement approval granted in a class action to resolve claims brought by clients of a law firm alleging their personal information was compromised in a March 2023 data breach of some of the firm’s client data).
5. $7.25 million – In Re Lincare Holdings Inc. Data Breach Litigation, Case No. 22-CV-1472 (M.D. Fla. June 24, 2024) (final settlement approval granted for a class action to resolve claims that the company failed to protect consumers from a 2021 data breach).

Top Discrimination Class Action Settlements In 2024

The top 10 discrimination class action settlements totaled $762.2 million in 2023, and $597 million in 2022.

1. $54 million – California Civil Rights Department v. Activision Blizzard Inc., Case No. 21STCV26571 (Cal. Super. Jan. 17, 2024) (consent decree entered for an action to resolve claims that the company engaged in gender discrimination, pay inequities, and fostered a culture of sexual harassment in the workplace).
2. $30 million – Employees’ Retirement System Of Rhode Island v. Paul Marciano, et al., Case No. 2022-0839 (Del. Chan. Jan. 4, 2024) (final settlement approval granted for a class action to resolve claims of decades of alleged sexual misconduct by one of the company’s co-founders).
3. $25 million – Jewett, et al. v. Oracle America Inc., Case No. 17-CIV-02669 (Cal. Super. Ct. Feb. 11, 2024) (preliminary settlement agreement sought in a class action to resolve claims that female employees were paid less than male employees).
4. $20 million – Council, et al. v. Merrill Lynch Pierce Fenner, Case No. 24-CV-534 (M.D. Fla. May 24, 2024) (preliminary settlement approval sought in a class action to resolve claims alleging discrimination and retaliation against a proposed class of nearly 1,400 Black financial advisers who alleged they received less pay and promotions compared to their white counterparts).
5. $18 million – Forsyth, et al. v. HP Inc., Case No. 16-CV-4775 (N.D. Cal. Mar. 29, 2024) (final settlement approval granted in a class action to resolve claims alleging that the company unlawfully pushed out hundreds of older workers as part of a workforce reduction plan in violation of the ADEA).

Top EEOC / Government Enforcement Class Action Settlements In 2024

The top 10 EEOC / government enforcement class action settlements totaled $263.58 million in 2023, and $404.5 million in 2022.

1. $16.5 million – In The Matter Of Avast Ltd., Case No. 202-3033 (FTC Jan. 19, 2024) (consent decree entered following a Federal Trade Commission lawsuit alleging that the company sold personal information to more than 100 third parties despite promising to protect consumers from online tracking).
2. $16 million – U.S. Department Of Labor v. Disaster Management Group LLC (DOL Jan. 24, 2024) (consent order entered following investigations into 62 government subcontractors hired to construct temporary housing and provide services to Afghan refugees at Joint Base McGuire-Dix-Lakehurst in New Jersey).
3. $15 million – California Civil Rights Department v. Snap Inc. (Cal. Super. Ct. June 18, 2024) (consent order entered following an investigation into the company’s hiring and pay practices were discriminatory, finding the company failed to ensure women were treated equally, resulting in a glass ceiling for pay and promotions, sexual harassment and retaliation when female workers spoke up).
4. $11.5 million – Washington Department Of Labor & Industries v. Boeing (May 24, 2024) (the parties entered into a compliance agreement following an investigation by the agency after it received four complaints in November 2022 from workers who were performing aircraft maintenance overseas, and found that Boeing had not paid or accounted for all overtime and for paid sick leave for the additional time going to worksites while out of town).
5. $8.7 million – EEOC v. DHL Express (USA) Inc., Case No. 10-CV-6139 (N.D. Ill. Apr. 24, 2024) (consent decree entered resolving a lawsuit filed alleging that the company gave Black workers more difficult and dangerous work assignments than white employees).

Top ERISA Class Action Settlements In 2024

The top 10 ERISA class action settlements totaled $580.5 million in 2023, and $399.6 million in 2022.

1. $169 million – Electrical Welfare Trust Fund, et al. v. United States, Case No. 19-CV-353, (Fed. Claims Ct. May 16, 2024) (final settlement approval granted in a class action alleging that the government illegally exacted certain contributions from SISAs under it for benefit year 2014).
2. $61 million – In Re GE ERISA Litigation, Case No. 17-CV-12123 (D. Mass. Mar. 7, 2024) (final settlement approval granted in consolidated class actions alleging that the company violated the ERISA by directing employee retirement savings into underperforming GE Asset Management funds to generate fees for the subsidiary before it was sold).
3. $20 million – Durnack, et al. v. Retirement Plan Committee Of Talen Energy Corp., Case No. 20-CV-5975 (E.D. Penn. June 4, 2024) (final settlement approval granted for a class action resolving claims from employees alleging that that they were owed early retirement pension benefits and pension supplements due to a change in control).
4. $19 million – Krohnengold, et al. v. New York Life Insurance Co., Case NO. 21-CV-1778 (S.D.N.Y. Mar. 5, 2024) (preliminary settlement approval granted in a class action to resolve claims alleging that the company unlawfully kept underperforming proprietary investment options in two employee retirement plans).
5. $19 million – Colon, et al. v. Johnson, Case No. 22-CV-888 (M.D. Fla. June 10, 2024) (preliminary settlement approval granted in a class action to resolve claims alleging that the company and executives enacted a scheme that diverted workers’ retirement benefits to shell companies and private equity firm Palm Beach Capital).

Top FCRA, FDPCA, And FACTA Class Action Settlements In 2024

The top 10 FCRA, FDPCA, and FACTA class action settlements totaled $100.15 million in 2023, and $210.11 million in 2022.

1. $9.75 million – Sullen, et al. v. Vivint, Inc.,Case No. 01-CV-2023-903893 (Ala. Cir. Ct. Apr. 23, 2024) (final settlement approval granted in a class action alleging that the company accessed credit information in violation of the Fair Credit Reporting Act and created Vivint accounts without authorization).
2. $6.76 million – Martinez, et al. v. Avantus LLC, Case No. 20-CV-1772 (D. Conn. Feb. 27, 2024) (final settlement approval granted in a class action alleging that the company violated federal law by including inaccurate information on mortgage borrowers’ credit reports).
3. $5.7 million – Steinberg, et al. v. Corelogic,Case No. 22-CV-498 (S.D. Cal. Apr. 9, 2024) (final settlement approval granted in a class action lawsuit to resolve claims that the company violated the federal Fair Credit Reporting Act by listing consumers as deceased on credit reports when they were actually alive).
4. $1.87 million – Parker, et al. v. The Salvation Army, Case No. 20-CV-4787 (Cal. Super. Ct. Mar. 20, 2024) (preliminary settlement approval granted in a class action to resolve claims to resolve claims the company failed to comply with the Fair Credit Reporting Act (FCRA) when procuring job applicant background checks for employment applicants.
5. $877,000 – McKey, et al. v. TenantReports.com LLC, Case No. 22-CV-1908-GJP (E.D. Penn. Feb. 27, 2024) (final settlement approval granted in a class action lawsuit to resolve claims that the company prepared consumer background reports that included outdated criminal non-conviction information).

Top FLSA / Wage & Hour Class And Collective Settlements In 2024

The top 10 FLSA / wage & hour class and collective action settlements totaled $742.5 million in 2023, and $574.55 million in 2022.

1. $72.5 million – Utne, et al. v. Home Depot USA Inc., Case No. 16-CV-1854 (N.D. Cal. Mar. 8, 2024) (final settlement approval granted for a class action to resolve claims that the company failed to pay hourly wages, pay final wages on time, and provide accurate written wages).
2. $38 million – In The Matter Of The Investigation Of Letitia James, Attorney General Of The State Of New York Of Lyft Inc., AOD No. 23-041 (AG Labor Bureau Nov. 30, 2024) (the New York Attorney General took legal action against Lyft, claiming the ride-booking company withheld wages from drivers by deducting taxes and fees from their pay instead of having passengers pay those expenses and prevented drivers from receiving the benefits they were entitled to under New York law).
3. $16.65 million – Goldthorpe, et al. v. Cathay Pacific Airways Ltd., Case No. 17-CV-3233 (N.D. Cal. June 20, 2024) (preliminary settlement approval sought in a class action to resolve claims alleging that the airline violated state labor laws governing meal and rest periods, overtime and reserve duty pay).
4. $16 million – Oman, et al. v. Delta Air Lines Inc., Case No. 15-CV-131 (N.D. Cal. May 15, 2024) (preliminary settlement approval sought in a class action to resolve claims alleging that the company failed to provide accurate wage statements in violation of California Labor Law).
5. $14 million – Bolding, et al. v. Banner Bank, Case No. 17-CV-601 (W.D. Wash. Jan. 8, 2024)(final settlement approval sought in a class and collective action to resolve claims that the company misclassified mortgage loan officers as exempt employees and thereby failed to pay overtime compensation in violation of federal and state wage & hour laws).

Top Labor Class Action Settlements In 2024

The top 10 labor class action settlements totaled $129.67 million in 2023.

1. $55 million – Saunders, et al. v. State of Michigan Unemployment Insurance Agency, Case No. 22-000007-MM (Mich. Cl. Ct. Apr. 16, 2024) (preliminary settlement approval granted in a class action to resolve claims that unemployment benefits were improperly clawed back without notice during the COVID-19 pandemic)
2. $20 million – In Re International Longshore and Warehouse Union, Case No. 23-BK-30662 (N.D. Cal. Bankr. Feb. 22, 2024) (preliminary settlement approval granted in a class action to resolve claims alleging that the union of engaging in an unlawful boycott of the company during a labor dispute).
3. $20 million – Bauserman, et al. v. State Of Michigan Unemployment Insurance Agency, Case No. 15-000202 (Mich. Ct. Claims Jan. 29, 2024) (final settlement agreement granted in a class action to resolve claims over the Michigan Unemployment Insurance Agency’s use of a computer program to detect fraudulent claims, which resulted in thousands of false fraud determinations).
4. $3.8 million – Moliga, et al. v. Qdoba Restaurant Corp., Case No. 23-2-11540-6 (Wash. Super. Ct. Apr. 10, 2024) (preliminary settlement approval granted in a class action to resolve claims that the company violated Washington state’s pay transparency law when it failed to disclose pay information in job postings).
5. $2.5 million – Arrison, et al. v. Walmart Inc., Case No. 21-CV-481 (D. Ariz. Feb. 16, 2024) (preliminary settlement approval granted in a class action to resolve claims that the company should have paid nearly 80,000 workers for the time they spent undergoing COVID-19 screenings before clocking in for their shifts).

Top Privacy Class Action Settlements In 2024

The top 10 privacy class action settlements totaled $1.32 billion in 2023, and $896.7 million in 2022.

1. $90 million – In Re Facebook Internet Tracking Litigation, Case Nos. 22-16903 and 22-16904 (9th Cir. Feb. 21, 2024) (final settlement approval affirmed in a class action to resolve claims alleging that Facebook used cookies to track the internet activity of logged-out social network users who visited third-party websites containing Facebook “Like” button plugins).
2. $75 million – Rogers, et al. v. BNSF Railway Co., Case No. 19-CV-3083 (N.D. Ill. June 18, 2024) (final settlement approval granted in a class action to resolve claims alleging that the company unlawfully scanned drivers’ fingerprints for identity verification purposes without written, informed permission or notice when they visited BNSF rail yards).
3. $62 million – In Re Google Location History Litigation, Case No. 18-CV-5062 (N.D. Cal. May 3, 2024) (final settlement approval granted in a class action to resolve claims that Google illegally collected and stored smartphone users’ private location information).
4. $52.5 million – Schreiber, et al. v. Mayo Foundation For Medical Education And Research, Case No. 22-CV-188 (W.D. Mich. May 25, 2024) (final settlement approval granted in a class action to resolve claims that the company shared subscriber information with third parties without getting consumer consent).
5. $52 million – In Re Clearview AI Inc. Consumer Privacy Litigation, Case No. 21-CV-135 (N.D. Ill. June 21, 2024) (preliminary settlement approval granted in a novel settlement in a multidistrict litigation targeting Clearview AI’s allegedly unlawful practice of “scraping” internet photos to collect biometric facial data wherein the class will receive a 23% stake in the company).

Top Products Liability And Mass Tort Class Action Settlements In 2024

The top 10 products liability / mass tort class action settlements totaled $25.83 billion in 2023, and $50.32 billion in 2022.

1. $10.3 billion – In Re Aqueous Film-Forming Foams Product Liability Litigation, MDL 2873 (D.S.C. Mar. 29, 2024) (final settlement approval granted in a class action to resolve claims with 3M by utilities that maintain it’s liable for the damage they have and will incur due to its signature PFAS that were used for decades in specialized fire suppressants, called aqueous film-forming foams (AFFF), that were sprayed directly into the environment and reached drinking water).
2. $1.18 billion – Camden, et al. v. E.I. DuPont de Nemours & Co., Case No. 23-3230 (D.S.C. Feb. 8, 2024) (final settlement approval granted in a class action to resolve claims in a multidistrict litigation for the firefighting agent aqueous film forming foam (AFFF), which contains per- and polyfluoroalkyl substances (PFAS).
3. $1.1 billion – Philips Recalled CPAP, Bi-Level PAP, And Mechanical Ventilator Products Liability Litigation, Case No. 21-MC-1230 (W.D. Penn. Apr. 29, 2024) (settlement reached in a multi-district litigation claiming that degraded foam in breathing machines caused plaintiffs personal injuries or will require long-term medical monitoring).
4. $916 million – State Of Hawaii, et al. v. Bristol-Myers Squibb Co., Case No. 1CC141000708 (Hawaii Cir. Ct. May 21, 2024) (court found in favor of the plaintiffs and ordered payment by the companies to resolve claim alleging they marketed and sold Plavix in an unfair and deceptive manner, and that the companies failed to disclose that the drug could be harmful to those of East Asian and Pacific Islander ancestry).
5. $750 million – In Re Aqueous Film-Forming Foams Products Liability Litigation, Case No. 18-MN-2873 (D.S.C. June 11, 2024) (preliminary settlement approval granted to resolve claims that Johnson Controls International PLC subsidiary Tyco Fire Products LP’s public water systems’ federal claims that some “forever chemicals” they detected in their supplies came from firefighting foam it made).

Top Securities Fraud Class Action Settlements In 2024

The top 10 securities fraud class action settlements totaled $5.4 billion in 2023, and $3.25 billion in 2022.

1. $580 million – Iowa Public Employees’ Retirement System, et al. v. Bank of America Corp. Litigation, Case No. 17-CV-6221 (S.D.N.Y. Sept. 4, 2024) (final settlement approval granted in a class action to resolve claims alleging that the defendants conspired to block and boycott new offerings that would have increased competition and improved the efficiency and transparency of the market, in violation of Section 1 of the Sherman Act).
2. $490 million – In Re Apple Inc. Securities Litigation, Case No. 19-CV-2033 (N.D. Cal. June 3, 2024) (preliminary settlement approval granted in a class action to resolve claims that Apple’s CEO Tim Cook defrauded shareholders by concealing falling demand for iPhones in China).
3. $434 million – In Re Under Armour Securities Litigation, Case No. RDB-17-388 (D. Md. June 21, 2024) (settlement reached in a class action brought by investors alleging that the company inflated stock prices by hiding declining demand for its products).
4. $350 million – In Re Alphabet Inc. Securities Litigation, Case No. 18-CV-6245 (N.D. Cal. Apr. 9, 2024) (preliminary settlement approval granted in a class action to resolve claims that the company deceived them about a March 2018 software glitch that allegedly gave third-party app developers the ability to access the private profile data of 500,000 users of the Google Plus social media site).
5. $192.5 million – Chabot, et al. v. Walgreens Boots Alliance Inc., Case No. 18-CV-2118 (M.D. Penn. Feb. 7, 2024) (final settlement approval granted in a class action to resolve claims that the company’s executives lied about the likelihood of an ultimately unsuccessful merger between the two drugstore chains).

Top TCPA Class Action Settlements In 2024

The top 10 TCPA class action settlements totaled $103.45 million in 2023, and $134.13 million in 2022.

1. $21.88 million – Smith, et al. v. Assurance IQ LLC, Case No. 2023-CH-09225 (Ill. Cir. Ct. Sept. 3, 2024) (final settlement approval granted in a class action to resolve claims alleging that the company violated the Telephone Consumer Protection Act with unsolicited robocalls).
2. $9.7 million – Berman, et al. v. Freedom Financial Network LLC, Case No. 18-CV-1060 (N.D. Cal. Feb. 16, 2024) (final settlement approval granted in a class action to resolve claims alleging that the debt consolidation company and its subsidiaries made telemarketing calls which violated the Telephone Consumer Protection Act).
3. $9 million – Moore, et al. v. Robinhood Financial LLC, Case No. 21-CV-1571 (W.D. Wash. July 16, 2024) (final settlement approval granted in a class action to resolve claims that the company’s referral text messages violated Washington telemarketing laws).
4. $7 million – Williams, et al. v. Choice Health Insurance LLC, Case No. 23-CV-292 (M.D. Ala. July 9, 2024) (final settlement approval granted in a class action to resolve claims that the company violated the TCPA with unsolicited marketing calls).
5. $2 million – Burnett, et al v. CallCore Media Inc., Case No. 21-CV-3176 (S.D. Tex. June 25, 2024) (final settlement approval granted in a class action to resolve claims the company placed prerecorded phone calls to consumers in violation of state laws and the federal TCPA).

April 15, 2024 by Alex W. Karasik

EEOC Mid-Year Lawsuit Filing Update For Fiscal Year 2024

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

Duane Morris Takeaways: The EEOC’s fiscal year (“FY 2024”) spans from October 1, 2023 to September 30, 2024. Through the midway point of FY 2024, EEOC enforcement litigation filings have been noticeably down. In the first six months of FY 2023, there were 29 new lawsuits filed by the Commission, while only 14 lawsuits were filed through the midway point of FY 2024.

Traditionally, the second half of the EEOC’s fiscal year – and particularly in the final months of August and September – are when the majority of filings occur. Even so, an analysis of the types of lawsuits filed, and the locations where they are filed, is informative for employers in terms of what to expect during the fiscal year-end lawsuit filing rush in September.

Cases Filed By EEOC District Offices

In addition to tracking the total number of filings, we closely monitor which of the EEOC’s 15 district offices are most active in terms of filing new cases over the course of the fiscal year. Some districts tend to be more aggressive than others, and some focus on different case filing priorities. The following chart shows the number of lawsuit filings by EEOC district office.

The most noticeable trend of the first six months of FY 2024 is that the Atlanta and Philadelphia District Offices already filed three lawsuits each. Houston, Indianapolis, and New York each have two lawsuit filings, and Dallas and Chicago have one each. That means that many of the district offices have yet to file a lawsuit at all in FY 2024. But for employers in the Atlanta and Philadelphia metropolitan areas, these early tea leaves suggest that a higher likelihood of pending charges may turn into federal lawsuits by the end of Summer to next Fall.

Analysis Of The Types Of Lawsuits Filed In First Half Of FY 2024

We also analyzed the types of lawsuits the EEOC filed throughout the first six months, in terms of the statutes and theories of discrimination alleged, in order to determine how the EEOC is shifting its strategic priorities. The chart below shows the EEOC filings by allegation type.

The percentage of each type of filing has remained fairly consistent over the past several years. However, in FY 2024, nearly every filing has contained Title VII claims, with 12 of the 14, or 87% alleging these violations. This is a major increase over past years — in FY 2023, Title VII claims in 59% of all filings, 69% in FY 2022, and 62%. ADA cases were alleged in three lawsuits filed, for 21% of the cases, a decrease from the EEOC’s FY 2023 filings of 31%, 18% in FY 2022, and 36% in FY 2021. There was also an ADEA claim in one of the lawsuits and Pregnancy Discrimination Act claim in another.

The graph set out below shows the number of lawsuits filed according to the statute under which they were filed (Title VII, Americans With Disabilities Act, Pregnancy Discrimination Act, Equal Pay Act, and Age Discrimination in Employment Act) and, for Title VII cases, the theory of discrimination alleged.

The industries impacted by EEOC-initiated litigation have also remained consistent in FY 2024. The chart below details that hospitality, healthcare, and retail employers have maintained their lead as corporate defendants in the last 18 months of EEOC-initiated litigation.

Notable 2024 Lawsuit Filings

Gender Identity Discrimination

In EEOC v. Sis-Bro, Inc., Case No. 24-CV-968 (S.D. Ill. Mar. 28, 2024), the EEOC brought suit alleging that the farm violated federal law when it allowed an employee to be harassed because of her sex and gender identity after she began transitioning genders. The EEOC contended that the employee was subjected to frequent, derogatory comments about the employee’s gender identity; the co-owner refused to call the targeted employee by her name and referred to her by her former name; repeatedly told her she was “a guy”; and criticized her use of employer-provided health insurance and leave for gender affirming care, in violation of Title VII of the Civil Rights Act.

Disability Discrimination

In EEOC v. Atlantic Property Management, Case No. 24-CV-10370 (D. Mass. Oct. 4, 2023), the EEOC filed an action on behalf of a new hire who the company allegedly rescinded a job offer following the employee’s cancer diagnosis. The EEOC alleged that the individual was offered employment as an executive administrative assistant to the president and vice president of the two companies. Shortly after the offer of employment, the employee was diagnosed with breast cancer. Her doctor confirmed she was able to perform all aspects of her position, but she would need to receive treatment weekly resulting in a need for some limited time off from work. When she provided her doctor’s note to the companies, the president decided to withdraw her job offer without any discussion with the employee, which the EEOC alleged violated the ADA.

Race / National Origin Discrimination

In EEOC v. Bob’s Tire Company, Case No. 24-CV-10077 (D. Mass. Jan. 10, 2024), the EEOC filed an action alleging that the company violated Title VII of the Civil Rights Act by subjecting employees to egregious and constant harassment, including the owner telling Hispanic employees to “go back to [their] country”; calling Guatemalan employees “f—ing Guatemalans”; donning a U.S. Immigration and Customs Enforcement hat to intimidate Hispanic employees; and calling employees homophobic slurs. Additionally, the EEOC contended that employees were also harassed by a co-worker because of their sex, race, and national origin, and at least one employee complained to the owner, who retaliated against this complaining employee by mocking him for being in a romantic and/or sexual relationship with the harassing co-worker.

These filings illustrate that the EEOC will likely continue to prioritize sex, disability, and race discrimination claims in the second half of FY 2024.

March 2024 Release Of Enforcement Statistics

On March 12, 2024, the EEOC published its fiscal year 2023 Annual Performance Report (FY 2023 APR), highlighting the Commission’s recovery of $665 million in monetary relief for over 22,000 workers, a near 30% increase for workers over Fiscal Year 2022. This annual publication from the EEOC is noteworthy for employers in terms of recognizing the EEOC’s reach, understanding financial exposure for workplace discrimination claims, and identifying areas where the EEOC may focus its litigation efforts in the coming year. It is a must read for corporate counsel, HR professional, and business leaders.

As we blogged about here, the Commission reported having one of the most litigious years in recent memory in FY 2023, with 142 new lawsuits filed, marking a 50% increase from FY 2022. Among these new lawsuits, 86 were filed on behalf of individuals, 32 were non-systemic suits involving multiple victims, and 25 were systemic suits addressing discriminatory policies or affecting multiple victims. The EEOC also touted that it obtained $22.6 million for 968 individuals in litigation, while resolving 98 lawsuits and achieving favorable results in 91% of all federal district court resolutions.

These numbers show the EEOC is still aggressively litigating discrimination claims, and despite the slow start in FY 2024, we anticipate the EEOC will turn up the jets in the second half of the fiscal year.

Strategic Priorities

The Commission also reported significant progress in its “priority areas” for 2023, which included combatting systemic discrimination, preventing workplace harassment, advancing racial justice, remedying retaliation, advancing pay equity, promoting diversity, equity, inclusion and accessibility (“DEIA”) in the workplace, and, significantly, embracing the use of technology, including artificial intelligence, machine learning, and other automated systems in employment decisions.

In 2023, the EEOC resolved over 370 systemic investigations on the merits, resulting in over $29 million in monetary benefits for victims of discrimination. The Commission also reported that its litigation program achieved a 100% success rate in its systemic case resolutions, obtaining over $11 million for 806 systemic discrimination victims, as well as substantial equitable relief. Further, the Commission made outreach and education programs a priority in 2023, and specifically sought to reach vulnerable workers and underserved communities, including immigrant and farmworker communities, hosting over 680 events for these groups and partnering with over 1,120 organizations, reaching over 107,000 attendees.

These statistics confirm the Commission’s prowess, dictating that employers should take heed in the coming months as the EEOC seeks to match these gaudy figures.

Other Notable Developments

Beyond touting its monetary successes, and litigation accomplishments, the FY 2023 APR also highlights the newly enacted Pregnant Workers Fairness Act (“PWFA”), which provides workers with limitations related to pregnancy, childbirth, or related medical conditions the ability to obtain reasonable accommodations, absent undue hardship to the employer.

The Commission began accepting PWFA charges on June 27, 2023 (the law’s effective date) and has conducted broad public outreach relating to employers’ compliance obligations under the new law.

Takeaways For Employers

By all accounts, FY 2023 was a record-breaking year for the EEOC. As demonstrated in the report, the Commission has pursued an increasingly aggressive and ambitious litigation strategy to achieve its regulatory goals. The data confirms that the EEOC had a great deal of success in obtaining financially significant monetary awards.

Although the early numbers are lagging as compared with last year, we anticipate that the EEOC will continue to aggressively pursue its strategic priority areas in FY 2024. There is no reason to believe that the annual “September surge” is not coming, in what could be another precedent-setting year. We will continue to monitor EEOC litigation activity on a daily basis, and look forward to providing our blog readers with up-to-date analysis on the latest developments.

Finally, we are thrilled to announce that will be providing a webinar on May 13, 2024, to further analyze the above data. Employers will gain insight on what they should be doing to ready themselves for the remainder of FY 2024. Save the date and stay tuned!

April 9, 2024 by Gerald L. Maatman, Jr.

Texas Federal Court Throws Out Data Breach Class Action

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Emilee N. Crowther

Duane Morris Takeaways: In Austin v. Fleming, Nolen & Jez, LLP, No. 4:23-CV-00901, 2024 U.S. Dist. LEXIS 60696 (S.D. Tex. Apr. 2, 2024), Judge Andrew S. Hanen of the U.S. District Court for the Southern District of Texas granted Defendant’s motion for summary judgment in a data breach class action. The Court found that the time Plaintiff’s allegations about the time spent – (i) researching the data breach, (ii) exploring credit monitoring and identity theft options, (iii) self-monitoring her accounts, and (iv) seeking legal counsel – were not compensable damages and could not support her claims. This case serves as an important reminder that named Plaintiffs in data breach class actions must have suffered an actual, viable, concrete injury to sustain their claims.

Case Background

On February 6, 2023, a cybercriminal breached Defendant’s servers and obtained some of its confidential client data. Id. at *1. The cybercriminal then demanded Defendant pay money to avoid the publication of Defendant’s confidential client data on the dark web. Id. After Defendant sent out data breach notice letters to their potentially affected clientele, the named Plaintiff, a former client of Defendant, filed a class action complaint against Defendant asserting claims for negligence, breach of confidence, breach of implied contract, and breach of implied covenant of good faith and fair dealing. Id.

Defendant moved for summary judgment on the basis that Plaintiff had not, and could not, establish that she had suffered any damages as a result of the data breach. Id. In response, Plaintiff presented an affidavit from a putative class member who had suffered monetary damages due to identity theft. Id.

The Court’s Decision

The Court ruled that Plaintiff could not rely on a putative class member’s purported damages to support her claims prior to class certification, and as such, any evidence supporting the claims of other class members was “irrelevant.” Id. at 4. As a result, the Court only considered Defendant’s motion for summary judgment as it pertained to Plaintiff’s individual claim against the Defendant. Id.

The Court held that none of the following allegations of harm were sufficient for Plaintiff to maintain her claims — “time spent verifying the legitimacy and impact of the data breach, exploring credit monitoring and identity theft insurance options, self-monitoring her accounts and seeking legal counsel regarding her options for remedying and/or mitigating the effects of the data breach.” Id. at *5-6.

Accordingly, the Court found that because Plaintiff could not show “that she was injured by the data breach” or that “she suffered any damages,” summary judgment was proper. Id. at *6.

Implications For Companies

The Court’s ruling in Austin v. Fleming underscores the importance of damages and a viable injury-in-fact in data breach class actions. The first line of defense in any data breach class action challenging whether the named Plaintiff suffered an actual, concrete injury. Used effectively, companies can parlay a Plaintiff’s claimed damages in data breach class actions as quick off-ramp out of litigation.

March 18, 2024 by Gerald L. Maatman, Jr.

Texas Federal Court Strikes Down NLRB’s 2023 Joint Employer Rule

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Emilee N. Crowther

Duane Morris Takeaways: In Chamber of Commerce of the U.S.A. et al. v. NLRB et al., No. 6:23-CV-00553, 2024 WL 1045231 (E.D. Tex. Mar. 8, 2024), Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas granted the Plaintiffs motion for summary judgment and denied the Defendants cross-motion for summary judgment. Under the NLRB’s 2023 joint employer rule, even companies who exercise just “indirect control” over the employees of another entity could be considered a joint employer under federal labor laws. The Court held that the NLRB’s 2023 joint employer rule did not provide a meaningful two-part test to determine joint employer status, and that the NLRB’s reason for rescinding the 2020 Rule was arbitrary and capricious. Accordingly, the Court vacated the 2023 Rule and reinstated the 2020 Rule.

This ruling is a huge win for businesses, as it reinstates the 2020 Rule’s heightened “substantial direct and immediate control” standard for determining joint-employer status.

Case Background

In 2020, the NLRB issued a joint-employer final rule, providing that an entity “is a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment” (the “2020 Rule”). Id. at 12 (quoting 29 C.F.R. § 103.40(a) (2020)). Under the 2020 Rule, a company is a joint employer when it exercises “substantial direct and immediate control” over one or more of the following “essential terms or conditions of employment” – “wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.” Id. at 12-13 (quoting 29 C.F.R. § 103.40(a), (c)(1) (2020)).

In 2023, the NLRB rescinded the 2020 Rule and enacted a new joint-employer final rule (the “2023 Rule”). Id. at 14. The 2023 Rule defined a joint employer as an entity that exercised “reserved control” or “indirect control” over one of seven terms and conditions of employment, including: “(1) work rules and directions governing the manner, means, and methods of the performance, and (2) working conditions related to the safety and health of employees.” Id. (29 C.F.R. § 103.40(d)-(e)).

In 2023, Plaintiffs sued the Defendants, challenging the 2023 Rule on two grounds: (i) that it is inconsistent with the common law; and (ii) that it is arbitrary and capricious. Id. at 14-15.

In response, the Defendants cross-moved for summary judgment on the Plaintiffs claims, alleging that the 2023 Rule was based on, and is governed by, common law principles, that it is not arbitrary and capricious, and that the Board acted lawfully in rescinding the 2020 Rule. Id. at 20.

The Court’s Decision

The Court granted the Plaintiffs motion for summary judgment, and denied Defendants cross-motion for summary judgment, thereby “vacating the 2023 Rule, both insofar as [the 2023 Rule] rescind[ed] the [2020 Rule] and insofar as it promulgate[d] a new version of [the 2020 Rule].” Id. at 30.

First, the Court focused on the main dispute between the parties, i.e., whether the 2023 Rule had a meaningful two-step test to determine an entity’s joint employer status, or the 2023 Rule only had one step for all practical purposes. Id. at 20-21. The Defendants argued that the 2023 Rule’s joint-employer injury had the following steps: (i) “an entity must qualify as a common-law employer of the disputed employees”; and (ii) “only if the entity is a common-law employer, then it must also have control over one or more essential terms and conditions of employment.” Id. The Court disagreed, finding that “an entity satisfying step one, along with some other entity doing so, will always satisfy step two,” since “an employer of a worker under the common law of agency must have the power to control ‘the material details of how the work is to be performed,” and the Defendants proposed step two included “work rules and directions governing the manner, means and methods of the performance of duties.” Id. at 22-23 (internal citations omitted).

The Court then analyzed whether the Board lawfully rescinded the 2020 Rule. It opined that “to survive arbitrary-and-capricious review, agency action must be ‘reasonable and reasonably explained.” Id. at 28-29. The Court held that the Board did not provide a “reasonable or reasonably explained” purpose for rescinding the 2020 Rule, and therefore, its recension was arbitrary and capricious. Id. at 29. Since “vacatur of an agency action is the default rule” in the Fifth Circuit when such rule “is found to be discordant with the law or arbitrary and capricious”, the Court vacated the 2023 Rule. Id. at 30.

Implications For Employers

The Court’s vacatur of the 2023 Rule in Chamber of Commerce of USA et al. v. NLRB et al. is an important victory for employers. The 2023 Rule would have made “virtually every entity that contracts for labor . . . a joint employer.” Id. at 25. Moreover, the 2020 Rule, in addition to imposing the heightened “substantial direct and immediate control standard,” provides integral guidance for what actions are considered joint, and what actions are not. The Court’s decision to reinstate the 2020 Rule, therefore, is also a significant win for employers.

March 16, 2024 by Gerald L. Maatman, Jr.

Sixth Circuit Is First to Weigh In On Pizza Driver Mileage Reimbursement Battle And Rejects DOL Interpretation

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

Duane Morris Takeaways: On March 12, 2024, in Parker v. Battle Creek Pizza, Inc. No. 22-2119 (6th Cir. Mar. 12, 2024), a three-judge panel of the Sixth Circuit addressed the issue of what standard applies for calculating reimbursements of vehicle expenses owed under the FLSA to delivery drivers who use their own vehicles for their jobs. The consolidated appeal arose from dueling opinions of U.S. District Courts in Michigan and Ohio on the same issue.

The Sixth Circuit concluded that neither the IRS standard mileage rate (the approach of the court in Michigan), nor an employer’s “reasonable approximation” of vehicle costs (the approach of the court in Ohio), satisfies an employer’s minimum wage obligations under the FLSA. The Sixth Circuit vacated the district court opinions and sent the cases back to their respective courts for further proceedings on remand. The Sixth Circuit’s decision is essential reading for all businesses with delivery drivers, particularly those defending minimum wage claims involving drivers’ expenses, a hot-button litigation issue percolating in courts across the country.

Case Background

To set the stage, the FLSA requires payment of the minimum wage (currently $7.25 an hour) to employees “free and clear.” In the U.S. Department of Labor regulations interpreting the statute, 29 C.F.R. § 531.35 states that employers cannot shift business expenses to their employees if doing so causes the employees’ wages to drop below the minimum wage. In another section of the FLSA regulations, the DOL addresses how to calculate an employee’s “regular rate of pay” for overtime calculations when the employer reimburses an employee’s business expenses. In that regulation at 29 C.F.R. § 778.217(c), the DOL says employers may “reasonably approximate” the amount of the expenses to be reimbursed. The DOL regulations say nothing, however, about how to calculate such an approximation, and whether the analysis applies to wages owed other than overtime wages.

The district court in Parker v. Battle Creek Pizza, Inc., 20-CV-00277 (W.D. Mich. Apr. 28, 2022), held that use of the IRS mileage rate satisfied the FLSA. The court deferred to the DOL’s Field Operations Handbook, the internal manual that guides investigators for the Wage and Hour Division. In the Field Operations Handbook. The DOL takes the enforcement position at § 30c15(a) that employers may, in lieu of reimbursing an employee’s actual expenses, use the IRS standard business mileage rate to determine the amount of reimbursement owed to employees for FLSA purposes. By contrast, the district court in Bradford v. Team Pizza, Inc., 20-CV-00060 (S.D. Ohio Oct. 19, 2021), rejected the IRS mileage rate in favor of an employer’s “reasonable approximation” of the drivers’ expenses.

The IRS standard business mileage rate, currently $.67 a mile, is intended to represent gasoline, depreciation, maintenance, repair and other fees pertaining to vehicle upkeep. Employers’ “reasonable approximation” of an employee’s costs in using their personal vehicles to perform work typically is lower than the IRS rate.

The Sixth Circuit’s Ruling

The Sixth Circuit highlighted the basic requirement of the FLSA to pay employees at least the minimum wage for hours worked. As the Sixth Circuit stated, when an employee’s hourly wage is the minimum $7.25 an hour, any underpayment of the employee for costs they expended to benefit the employer necessarily causes them to receive less than the minimum wage.

Although it acknowledged the difficulty of calculating vehicle expenses on an employee-by-employee basis, the Sixth Circuit reasoned that any “approximation” of an employee’s personal vehicle costs — whether it be the employer’s own calculation or the IRS’s standard business mileage rate — is contrary to the FLSA where it results in an employee receiving less than the minimum wage.

The Sixth Circuit declined to defer to the DOL’s interpretation in the FLSA regulations or the agency’s Field Operations Handbook. It emphasized that the FLSA regulation supporting the “reasonable approximation” method — 29 C.F.R. § 778.217(c) — addressed overtime calculations, not minimum wage. The Sixth Circuit also found use of the IRS standard business mileage rate to be fatally flawed. As it explained, the IRS’s rate, though more generous in application than the “reasonable approximation” method, disfavors high-mileage drivers like delivery drivers and fails to account for regional and other differences inherent in maintaining a vehicle. Id. at 6.

The Sixth Circuit did not announce a new standard to replace the two approaches it rejected. However, it offered a three-part framework for the district courts to consider on remand. Similar to the burden-shifting framework in Title VII disparate treatment cases, the Sixth Circuit suggested that an FLSA plaintiff might present prima facie proof that a reimbursement was inadequate. The employer would then bear the burden to show that the amount it reimbursed bore a reasonable relationship to the employee’s actual costs. The plaintiff would have an opportunity to attack the employer’s reasoning while bearing the ultimate burden to prove failure to receive minimum wages.

Implications For Employers

Although the Sixth Circuit’s ruling in Parker is binding only on federal courts in Ohio, Michigan, Tennessee and Kentucky, the opinion may prompt courts around the country to reconsider reliance on the DOL’s “reasonable approximation” standard and the IRS’s standard business mileage rate when evaluating minimum wage claims of delivery drivers. Considering that FLSA claims asserting underpayment for vehicle expenses already is a favorite topic of the plaintiffs’ class action bar, we expect the opinion to unleash a flood of new lawsuits in this area. All businesses with delivery drivers ought to keep a close watch on how the Michigan and Ohio district courts apply the Sixth Circuit’s ruling on remand.

A silver lining in the decision may well be the notion that as calculating the appropriateness of reimbursement is required on a driver-by-driver basis, such claims seem difficult to ever certify.

The opinion in Parker is also significant in light of the Supreme Court’s forthcoming ruling on the viability of the Chevron doctrine, the framework in which courts generally defer to agencies’ interpretation of federal statutes. In rejecting the DOL’s interpretation of the FLSA, the reasoning in Parker may be a harbinger of future rulings under the FLSA and a panoply of other statutory schemes if the Supreme Court abandons Chevron deference.

March 14, 2024 by Gerald L. Maatman, Jr.

The Duane Morris Private Attorneys General Act Review – 2024

By Gerald L. Maatman, Jr., Jennifer A. Riley, Brandon Spurlock, and Shireen Wetmore

Duane Morris Takeaways: One law making California so different – and so challenging – for employers is the Private Attorneys General Act (“PAGA”), which authorizes employees to assert claims for alleged labor violations. Such a worker acts as “a private attorney general” to pursue civil penalties against an employer as if they were an arm of the State of its agencies. PAGA claims are not class actions per se – instead, they are known as “representative actions – but they pose analogous risks and exposures like class actions brought under the California Labor Code. Plaintiffs bring thousands of PAGA cases every year, and, because PAGA plaintiffs can bring suit on behalf themselves and other employees, the stakes are often significant, with companies exposed to risks similar to those arising from class action litigation. The PAGA, however, has its own specific rules of the road, which differ from the rules elucidated in familiar Rule 23 jurisprudence. The explosion of PAGA litigation has resulted in a complex body of case law that is often difficult to navigate, particularly in terms of the application of arbitration agreements and representative action waivers. Given the wide adoption of such arbitration agreements, companies are struggling to grasp how recent decisions regarding the PAGA and arbitration impact their businesses.

To that end, the class action team at Duane Morris is pleased to present this year’s edition of the Private Attorneys General Act Review – 2024. We hope it will demystify some of the complexities of PAGA litigation and keep corporate counsel updated on the ever-evolving nuances of these issues. We hope this book – manifesting the collective experience and expertise of our class action defense group – will assist our clients by identifying developing trends in the case law and offering practical approaches in dealing with PAGA litigation.

Click here to download a copy Duane Morris Private Attorneys General Act Review – 2024 eBook.

Stay tuned for more PAGA class action analysis coming soon on our weekly podcast, the Class Action Weekly Wire.

March 12, 2024 by Jennifer A. Riley

Class Action Law Forum – Recent Developments Regarding The Impact Of Artificial Intelligence

By Jennifer A. Riley

I was honored to speak today at the 6th Annual Class Action Law Forum at the University of San Diego School of Law.

With hundreds of attendees, the conference focused on the current state of class action litigation and “white hot” litigation topics for 2024. The discussion points provide an excellent roadmap for practitioners and corporate counsel alike on the types of cases and legal issues that Corporate America is likely to encounter over the remainder of 2024.

The Impact of Artificial Intelligence

The theme of my address involved the extraordinary impact of AI on the class action space over the past year. Aside from improving the efficiency with which the plaintiffs’ class action bar may be able to file and litigate claims, generative AI is providing an ocean of raw material for potential class claims.

Over the past year, we saw AI promptly become a popular subject of class actions in multiple areas. I touched on three in particular.

AI-Assisted Decision-Making

The first area targets companies that use AI to enhance or streamline their decision-making processes. Plaintiffs have filed suits against insurers, for instance, that use algorithms to adjudicate claims as well as against agencies that use programs to evaluate governmental benefits.

This type of claim frequently arises in the employment context as companies use algorithms to streamline and enhance their candidate screening and selection procedures and to inform their promotion, transfer, and evaluation decisions.

In May 2023, the EEOC issued a technical assistance document entitled “Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII,” which purports to provide employers guidance on preventing discrimination when using AI. The EEOC provided various examples in terms of how employers are using AI, including resume scanners that prioritize resumes that use certain key words, employee monitoring software that rates employees on the basis of key strokes, virtual assistants or chatbots that ask job applicants about their qualifications, and video interviewing software that evaluates candidates based on their speech patterns and facial expressions.

Unsurprisingly, we have started to see lawsuits attacking use of these types of tools. In Mobley v. Workday, filed in the Northern District of California, for instance, a plaintiff, an African American male over the age of 40 who claimed that he suffered from anxiety and depression brought suit against Workday claiming that its applicant screening tools discriminated against applicants on the basis of race, age, and disability. The plaintiff claimed that he applied for 80 to 100 jobs, and despite holding a bachelor’s degree in finance, among other qualifications, did not get a single job offer.

Workday, of course, is a software vendor. The district court granted the defendant’s motion to dismiss on the ground that plaintiff failed to plead sufficient facts regarding Workday’s supposed liability as an employer or “employment agency.” In other words, the plaintiff failed to allege that Workday was “procuring” employees for its customers and merely claimed that he applied for jobs with a number of companies that all happened to use Workday. On February 20, 2024, the plaintiff filed an amended complaint alleging that Workday was an agent of the employers that delegated authority to Workday to make hiring process decisions or, alternatively, that Workday was an indirect employer.

This is a prime example of a case to watch as we head through 2024 where plaintiffs are seeking to hold a software vendor liable for the use of its product by others.

Privacy Class Actions Targeting AI

The second area I touched on relates to privacy class actions. Companies that develop AI products have faced a slew of class action lawsuits alleging privacy violations. The allegation essentially has been that, by collecting publicly-available data to develop and train their software, developers of AI products stole private and personal information from millions of individuals.

In cases like PM v. OpenAI, as an example, groups of plaintiffs filed class action lawsuits against OpenAI and Microsoft alleging that, by collecting information from the internet to develop and train AI tools like ChatGPT, they stole private information from millions of people. Other lawsuits have been filed against companies like Open AI as well as Google alleging similar claims, including a recent example, AS v. Open AI, filed in the Northern District of California on February 27, 2024.

Copyright Class Actions Targeting AI

Third, in addition to privacy class actions, technology companies have been hit with a surge of recent lawsuits over the alleged “scraping” of copyrighted materials and personal data from across the internet to train their generative AI systems.

On February 28, 2024, for instance, Intercept Media filed suit in the Southern District of New York against Open AI and Microsoft. It alleged that, at least some of the time, ChatGPT provides responses to its users that regurgitate verbatim – or nearly verbatim – copyright protected works of journalism without providing (and even allegedly intentionally excluding) the author, title, copyright, or terms of use information contained in those works.

In terms of other examples, at the end of last year, the New York Times filed a similar lawsuit alleging copyright infringement in both the input and output of Open AI models. The Authors Guild of America filed a class action suit in September 2023 against MicroSoft and Open AI on behalf of tens of thousands of authors alleging willful violations of copyright laws. In the suit, they allege that the two companies reproduced and appropriated the copyrighted work of tens of thousands of authors to train their AI models. In Andersen v. Stability AI, a group of artists claimed that Stability AI created a software program that downloaded billions of copyrighted images to train and to act as a software library for a variety of visual generative AI platforms. They claimed that, having been trained on their works, the software could generate output in their own artistic styles.

Many of these class actions are just getting off the ground. As the results at the motion to dismiss stage continue to be mixed, it suggests that a model for successfully pleading and prosecuting these types of class actions is still a work in progress.

As courts start to weave their patchwork quilt of rulings, I expect we are seeing the tip of the iceberg in the types and numbers of filings we are likely to see on the generative AI class action front.

Other Hot Topics

The conference speakers covered myriad other timely and hot issues in the class action space, including the state of the current law on concepts such as ascertainability, standing, class-wide injury, and manageability at the class certification stage. A recurrent issue was standing and class-wide injury. Even if a court can “generally” determine class-wide injury at the certification and trial phases, how can it manageably resolve individualized questions at the damages phase?

The panelists likewise covered practical aspects of class-wide trials and mass arbitration, including best practices in preparing for and presenting cases for trial including use of video evidence such as video-taped depositions, use of demonstrative evidence at trial, and use of pre-trial focus groups to test and develop key themes and tell a story that resonates with the jury.

In sum, 2024, is shaping up to be a transformative year on the class action litigation front.

March 7, 2024 by Gerald L. Maatman, Jr.

Announcing The Launch Of The Duane Morris Discrimination Class Action Review – 2024!

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 inaugural edition of the Duane Morris Discrimination Class Action Review – 2024. This publication analyzes the key discrimination-related rulings and developments in 2023 and the significant legal decisions and trends impacting discrimination class action litigation for 2024. 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 download a copy of the Duane Morris Discrimination Class Action Review – 2024 eBook. Look forward to an episode on the Review coming soon on the Class Action Weekly Wire!