Jennifer A. Riley – Class Action Defense

October 14, 2026October 14, 2026 by Gerald L. Maatman, Jr.

Webinar Replay: Year-End Review of EEOC Litigation and Strategy

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Daniel D. Spencer

Duane Morris Takeaway: Thank you to all the loyal blog readers and followers who joined us for our Year-End EEOC Litigation and Strategy Review webinar! In this 30-minute program, Duane Morris partners Gerald L. Maatman, Jr., Jennifer A. Riley, and Daniel D. Spencer analyzed the latest impact of enforcement litigation at the U.S. Equal Employment Opportunity Commission, including its new National Enforcement Plan and strategic priorities established in fiscal year 2026 and the enforcement lawsuits filed over the past 12 months, and discussed how employers can navigate the EEOC’s latest enforcement initiatives and implement strategies designed to minimize the risk of drawing the agency’s scrutiny.

If you were unable to attend the webinar, it is now available on our podcast channel. Click to watch below and stay tuned for important EEOC trends and developments throughout the year.

October 12, 2026 by Gerald L. Maatman, Jr.

Washington Supreme Court Rejects Privacy Class Action And Holds That Hospital’s Use Of Meta Pixel Does Not Violate State Privacy Act

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo

Duane Morris Takeaways: On October 8, 2026, in Baker, et al. v. Seattle Children’s Hospital, No. 104590-5, 2026 WL 3023818 (Wash. Oct. 8, 2026), Justice Theodore J. Angelis of the Supreme Court of the State of Washington held that a hospital’s use of Meta Pixel’s advertising technology ( “Meta Pixel”) on its public website did not violate the Washington Privacy Act (“WPA”) because the plaintiffs’ website searches involved communications between a single individual and a website, and were not between “two or more individuals” as required by the WPA. The decision is a significant win for companies that use website advertising technologies, like Meta Pixel, but its import may be limited to claims brought under Washington state law.

Case Background

Seattle Children’s Hospital (“SCH”) operates a public website that provides general information about the hospital, including a directory of health care professionals, hours of operation for clinics, and descriptions of health conditions. The website also uses free software, called Meta Pixel, that allows websites to review visitors’ clicks, text searches, and page views. Meta Pixel also allegedly relays content of such searches to Meta Platforms, Inc., which links that information to the Facebook or Instagram account of the website visitor for targeted advertising.

In 2023, Carly Baker, Amber Shavies, and Janssen Ramos Savoie (collectively, “Plaintiffs”) filed a putative class action against SCH. Each of the Plaintiffs was a parent who alleged that they visited SCH’s public website to search for information regarding “their children’s medical conditions and for clinic operating hours, as well as visiting the patient portal, MyChart, to communicate with doctors and view their children’s electronic records and medical histories.” Id. at *2. SCH disputed that Meta Pixel was ever installed on the hospital’s MyChart patient portal and Plaintiffs “subsequently clarified that their claims targeted only the use of Pixel on SCH’s publicly available website.” Id. at *2, n.5.

SCH moved to dismiss the complaint and argued, inter alia, that Plaintiffs’ searches and queries on the website were not “private communications” as defined by the WPA. The trial court granted SCH’s motion to dismiss and dismissed the complaint with prejudice. Plaintiffs appealed and the Washington Court of Appeals affirmed the dismissal on the ground that navigation of a website is not a “communication” as defined by the WPA. See Baker v. Seattle Children’s Hosp., 35 Wash. App. 2d 1018 (2025). Plaintiffs then petitioned the Washington Supreme Court for review and the petition was granted.

The Supreme Court’s Decision

In a unanimous result, Justice Angelis, writing for the majority of the Washington Supreme Court, affirmed the trial court’s dismissal but on a different basis than the Court of Appeals.

Instead of determining whether the Plaintiffs’ website activity constituted a “private communication,” the Supreme Court focused on a different part of the WPA’s text. Justice Angelis explained that it is unlawful for “any individual, partnership, corporation, association, or the state of Washington” to intercept or record any “[p]rivate communication . . . between two or more individuals.” RCW 9.73.030(1)(a).

Justice Angelis reasoned that, because only communications “between two or more individuals” are unlawful, SCH would need to be an “individual” for Plaintiffs’ theory to work. Id. But SCH is not an individual. The WPA draws a distinction between “individuals” on the one hand and entities such as “partnership[s], corporation[s], association[s], or the state of Washington,” on the other. Id. Thus, because SCH is a corporation and “only one individual was involved in each communication, the [P]laintiffs do not have a claim under the WPA.” Baker, 2026 WL 3023818, at *3.

Justice Angelis, however, took care to point out that it was immaterial that the WPA is “one of the most restrictive electronic surveillance laws ever promulgated” and that certain federal and California laws may prohibit such conduct. Id. at *4 (quotations omitted). He explained that those federal and state cases are “not instructive given the significant differences between the state and federal statutory schemes” and declined to consider such precedent. Id. (quotations omitted).

Notably, Justice González and Justice Whitener wrote separately to concur in the result but express the view that “private communications transmitted between an individual and individuals working for a corporation are protected by” WPA. Id. (González, J., concurring). Instead, Justice González would have held that these communications were not between “two or more individuals” because the “parents’ private communications were directed at a server that returned stored content and not at another individual.” Id. at *5 (González, J., concurring). Thus, to Justice González, the material distinction was not a communication with a corporation but the nature of the underlying technology itself.

But nonetheless, the Washington Supreme Court unanimously affirmed the trial court’s dismissal with prejudice.

Implications For Companies

The Baker decision is a meaningful development for Washington companies that deploy advertising technologies, such as Meta Pixel, on their public-facing websites. Although the unique language of the WPA likely makes this decision distinguishable from claims brought under the Electronic Communications Privacy Act or California Invasion of Privacy Act, this holding should knock out nearly all claims under the WPA as a matter of law.

Justice González’s concurrence, however, serves as a cautionary note. Even though the majority opinion would seem to imply that you could never apply the WPA to communications with a corporation under any circumstances, there is at least a possibility that under different facts (e.g., such as communications directed to an individual staff member) the Washington Supreme Court would reach a different result. Nonetheless, Baker is undoubtedly a tremendous win for Washington companies and corporate counsel should continue to monitor this blog to stay apprised of developments in class actions involving Meta Pixel litigation and digital privacy law.

September 29, 2026September 29, 2026 by Gerald L. Maatman, Jr.

Ninth Circuit Signals That Strong Merits Defenses And Post-Suit Remediation May Not Be Enough To Defeat Class Certification

By Gerald L. Maatman, Jennifer A. Riley, Katherine L. Alphonso, and Caitlin Capriotti

Duane Morris Takeaways: On September 24, 2026, in Alicia Nolen v. PeopleConnect, Inc., No. 24-3894, 2026 U.S. App. LEXIS 29276 (9th Cir. Sept. 24, 2026), a panel for the Ninth Circuit, via an opinion written by Judge Marsha S. Berzon, affirmed an order of the U.S. District Court for the Northern District of California that granted certification of injunctive and damages classes as satisfying both the requirements of predominance and adequacy. Predominance can be established by showing that reasonable inferences based on practical assumptions preclude the need for individualized inquiries. Predominance does not require courts to determine an administratively feasible way to identify class members to satisfy class certification. Furthermore, the Ninth Circuit reiterated that class certification issues must be evaluated separately from merits issues. As to adequacy, the Ninth Circuit held that a defendant cannot undermine adequacy by remedying a named plaintiff’s injury after a lawsuit is filed.

Case Background

PeopleConnect, Inc. (“PeopleConnect”) owns and operates Classmates.com, an online library of more than 450,000 digitized yearbooks. Id. at *5. PeopleConnect built its collection by purchasing copies and accepting yearbook donations from individuals and schools. Id. PeopleConnect then scans each page of these acquired yearbooks, making all text searchable, and uploads a copy to Classmates.com, where users can search for and connect with former classmates and/or others. Id. at *5-6. Notably, individuals who donate yearbooks they own fill out a form authorizing PeopleConnect to use their likeness on Classmates.com. Id. at *5.

The lead plaintiff in this case, Alicia Nolen (“Nolen”), is a California resident whose name and photo was featured in at least one yearbook on Classmates.com. Id. at *8. Nolen contends PeopleConnect violated California’s statutory right of publicity, codified in Cal. Civ. Code § 3344, by using individuals’ names, without consent, to advertise paid subscriptions to Classmates.com. Id. at *8-9. At the core of Nolen’s substantive claims is the sequence of subscription advertisements shown to Classmates.com subscribers, wherein visitors do not initially see subscription advertisements when browsing or searching yearbooks, but if a visitor searches for a particular name and clicks on the resulting thumbnail, the website prompts the visitor to register for a free account. Id. at *7. Once the visitor registers, they will immediately receive an advertisement encouraging them to purchase a subscription. Id. Nolen argues that PeopleConnect violated the statute by using name-search results to drive account registrations and subscriptions sales. Id. at *9. In other words, PeopleConnect “commercially used” individuals’ likeness, requiring consent under the statute, when a name and/or thumbnail image became a publicly accessible part of its advertising workflow. Id. at *9-10.

Nolen moved to certify injunctive and damages classes under Fed. Rule of Civ. Proc. 23(b)(2) and 23(b)(3). Id. at *10. The district court certified the classes, and PeopleConnect appealed under Fed. Rule of Civ. Proc. 23(f), arguing questions of law or fact common to class members do not predominate over those common to individual members, and Nolen is not an adequate representative for the purported class. Id. at *10-11.

The Ninth Circuit’s Analysis

Predominance

PeopleConnect argued predominance was not satisfied for three reasons; the Ninth Circuit disagreed on all three grounds. Id. at *13.

First, PeopleConnect argued that the district court misconstrued section 3344 as allowing claims based on the searchability of an individual on the website, whether or not a search has actually been conducted. Id. at *13. It urged the Ninth Circuit to construe section 3344 as only permitting recovery for claimants who have actually been searched, which requires an individualized showing of evidence. Id. The Ninth Circuit held that this issue goes to the merits of the section 3344 claims, not to whether the class can be certified. Id. at *14.

Second, PeopleConnect argued that the district court further misconstrued section 3344 as allowing claimants to obtain a minimum award of statutory damages without presenting individualized evidence of mental anguish or actual economic harm. Id. at *13. The Ninth Circuit disagreed with PeopleConnect, stating that whether class members suffered an economic injury can be determined on a class wide basis based on reasonable inferences from the practical circumstances. Id. at * 24. It is reasonable to assume that PeopleConnect’s use of the name shows that the name has economic value. Id. at * 22-25. It is also reasonable to assume that a person whose likeness a company seeks to use in connection with advertising could negotiate at least a nominal licensing fee for such use. Id. Thus, a plaintiff deprived of such compensation, no matter how small, has suffered an economic injury. Id.

Finally, PeopleConnect argued that the district court did not identify an adequate “winnowing plan” to exclude claimants ineligible for relief. Id. at *13. Specifically, the district court did not come up with a manageable method to weed out individuals who consented to PeopleConnect’s use of their names by registering as Classmates.com members or donating a yearbook, and those whose names are not searchable on the website. Id. at *25-26. However, the Ninth Circuit rejected this argument, finding no basis to reverse certification on predominance or manageability grounds. Id. at *40.

Adequacy

PeopleConnect challenged Nolen’s adequacy as a class representative on the following grounds: (1) her decision to proceed with a “searchable theory of liability” argument would create intraclass conflict by “sacrificing” potentially stronger claims from other purported class members, and (2) Nolen is not similarly situated to other class members because her name is no longer searchable on Classmates.com. Id. at *41. As to the first argument, the Ninth Circuit refused to rule as it was not properly raised on appeal. Id. at *48. The Ninth Circuit did, however, provide guidance should the issue be appropriately raised in the district court. Id. at *41-48. As to the second argument, the Ninth Circuit rejected PeopleConnect contention, explaining, inter alia, it could not “pick off” and moot Nolen’s claims by remediating her injury after she filed suit. Id. at *49-50.

Implications for Employers

This decision underscores the distinction between class certification and merits evaluation—that potentially strong merits defenses may not be enough to defeat class certification when common issues can be resolved through reasonable, class-wide inferences. Each of PeopleConnect’s defense arguments raised interesting issues on the merits but ultimately had no bearing on class certification. Employers should therefore evaluate class-certification exposure independently from the ultimate merits, maintain clear records of consent and authorization for commercial uses of names or likenesses, and assess early whether uniform practices could support class-wide proof. This decision also cautions that post-suit remediation directed at the named plaintiff generally will not defeat adequacy or moot the action, making proactive compliance and early risk assessment critical.

September 21, 2026September 21, 2026 by Gerald L. Maatman, Jr.

You’re Invited: Year-End Review Of EEOC Litigation And Strategy 2026

By Gerald L. Maatman, Jr, Jennifer A. Riley, and Daniel D. Spencer

Mark your calendars for our bi-annual program analyzing the latest EEOC developments: Wednesday, October 14, 2026 from 11:00 a.m. to 11:30 a.m. Central. Reserve your virtual seat for the program here.

Join Duane Morris partners Gerald L. Maatman, Jr., Jennifer A. Riley and Daniel D. Spencer for a live panel discussion analyzing the latest impact of enforcement litigation at the U.S. Equal Employment Opportunity Commission, including its new National Enforcement Plan and strategic priorities established in fiscal year 2026 and the enforcement lawsuits filed over the past 12 months. Our virtual program will empower corporate counsel, human resource professionals and business leaders with key insights into the EEOC’s latest enforcement initiatives and provide strategies designed to minimize the risk of drawing the agency’s scrutiny.

Presenters

Gerald L. Maatman Jr.

Jennifer A. Riley

Daniel D. Spencer

September 21, 2026September 21, 2026 by Gerald L. Maatman, Jr.

Florida Federal Court Holds That The TCPA’s Do-Not-Call Provisions Do Not Apply To Cell Phone Users

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo

Duane Morris Takeaways: On September 11, 2026, in Anthony, et al. v. Brian Marketing Group, No. 24-CV-80800, 2026 WL 2685650 (S.D. Fla. Sept. 11, 2026), Judge Aileen M. Cannon of the U.S. District Court for the Southern District of Florida denied a plaintiff’s motion for default judgment on a Telephone Consumer Protection Act (“TCPA”) class action claim and held that cell phone users are not “residential telephone subscribers” entitled to sue under the TCPA’s do-not-call provisions. The decision is premised on the conclusion that a prior Federal Communications Commission’s (“FCC”) order was outside the scope of the agency’s statutory authority under 47 U.S.C. § 227(c). If this decision is widely adopted, it has the potential to upend TCPA litigation nationwide.

Case Background

In June 2024, Plaintiff Michael Anthony (“Plaintiff” or “Anthony”) filed a putative class action against Brian Marketing Group (“BMG”) in the U.S. District Court for the Southern District of Florida for alleged violations of the TCPA and its implementing regulations. He claimed that he received five unsolicited text messages to his personal cellphone over a twelve-month span even though he registered his cell phone number on the national do-not-call registry. The text messages were identical and stated:

“Our records show that you or a loved one reached out for drug or alcohol treatment. We have immediate availability!”

Because Anthony had never used drugs or alcohol, or never heard of BMG, he claims these text messages were unsolicited and violated the TCPA. To that end, Anthony brought a single claim under § 227(c)(5) of the TCPA and its implementing regulations’ prohibition on unlawful communications to individuals who registered their phone numbers on the national do-not-call registry. 47 C.F.R. § 64.1200(c).

In September 2025, following proper service, the Clerk of Court entered default against BMG for failing to appear or respond. As a result, Anthony filed a motion for default judgment seeking declaratory relief and $2,500 in statutory damages.

The Court’s Decision

In a thorough 25-page opinion, Judge Cannon walked through the text, structure, and history of the TCPA to conclude that the FCC’s Report and Order, In Re Rules & Regulations Implementing the Telephone Consumer Protection Act of 1991 (the “2003 Order”) exceeded the agency’s statutory authority. The FCC could not lawfully include cell phone users within the definition of the term “residential telephone subscriber.” As a result, Anthony could not state a claim under § 227(c)(5) of the TCPA.

“The TCPA consists of two parts: § 227(b) imposes ‘restrictions on [the] use of automated telephone equipment,’ and § 227(c) protects ‘subscriber privacy rights’ and is colloquially known as the ‘do-not-call provision.’” Anthony, 2026 WL 2685650,at *2 (quotations omitted). The authority to promulgate the regulations to enforce the do-not-call provision come from an express delegation from the U.S. Congress and were designed “to protect residential telephone subscribers’ privacy rights [and] to avoid receiving telephone solicitations to which they object.” 47 U.S.C. § 227(c)(1).

Although Congress did not define the term “residential telephone subscriber,” the FCC’s implementing regulations – which created the national do-not-call registry adopted that language – when defining the individuals who have a private right of action under the statute. 47 C.F.R. § 64.1200(c)(2) (“No person or entity shall initiate any telephone solicitation to . . . [a] residential telephone subscriber who has registered his or her telephone number on the national do-not-call registry of persons”) (emphasis added); see also 47 C.F.R. § 64.1200(c)(1) (“No person or entity shall initiate any telephone solicitation to . . . [a]ny residential telephone subscriber before the hour of 8 a.m. or after 9 p.m.”) (emphasis added). From 1991 (when the TCPA was passed) to 2003 (when the 2003 Order was issued), there was no indication that the term residential telephone subscriber included calls to cell phones.

But, in 2023, the FCC issued the 2003 Order which purported to extend the national do-not-call registry’s protections to cell phone users because it was “more consistent with the overall intent of the TCPA to allow wireless subscribers to benefit from the full range of TCPA protections.” Anthony, 2026 WL 2685650,at *4 (quotations omitted). Judge Cannon, however, concluded that the FCC lacked the authority to decide this issue in the 2003 Order and therefore Anthony failed to state a claim as a matter of law. Judge Cannon’s analysis followed four primary steps.

First, Judge Cannon examined the plain meaning of “residential telephone subscriber” as used in § 227(c). Because the TCPA does not define the term, Judge Cannon looked to the dictionary definitions in existence at the time of enactment. “At the time the TCPA was enacted in 1991, dictionaries defined ‘residential’ as 1) ‘of or connected with residence,’ 2) ‘of, characterized by, or suitable for, residences or homes,’ and 3) ‘chiefly for residents rather than transients.’” Id. at *7 (quotations omitted). She, therefore, reasoned that the term “residential telephone subscriber” meant “at the very least . . . a person who pays intermittently to receive telephone services that are connected to his or her home.“ Id. Cell phones, however, were not connected to an individual’s residence in 1991 and therefore would not have been captured by the scope of that term at the time.

Second, Judge Cannon explained that the structure of the TCPA confirmed this interpretation as well. In § 227(b), Congress demonstrated its ability to extend protections to “cellular telephone service” subscribers. 47 U.S.C. § 227(b)(1)(A)(iii). It also included a separate section prohibiting the use of the above-mentioned regulated technologies to residential telephone subscribers. 47 U.S.C. § 227(b)(1)(B). Other sections of the TCPA confirmed that interpretation. See Anthony, 2026 WL 2685650, at *9-10. If the term “residential” was synonymous with “cellular,” then Judge Cannon reasoned that § 227(b)(1)(B) would violate the cannon against surplusage because Congress would have regulated the same conduct twice. “In sum, it is clear that Congress knew how to differentiate between cellular and residential when it wished to.” Id. at *10.

Third, Judge Cannon reasoned that the history of the statute confirmed this interpretation. “From the date of enactment of the TCPA through 2003,” no one thought that cell phone numbers were considered residential telephone lines. Anthony, 2026 WL 2685650, at *9-10. Indeed, the FCC even sought additional authority from Congress in order to promulgate such rules prior to 2003. “Nevertheless, in 2003, and without the previously contemplated additional authority from Congress, the FCC promulgated new implementing regulations . . . to bring wireless subscribers within the orbit of residential subscribers.” Id. at *11. In short, “[a]gencies may play the sorcerer’s apprentice but not the sorcerer himself” – and in the absence of an express delegation from Congress to allow the FCC to promulgate rules to protect cell phone users– the extension of § 227(c) to cell phones was improper. Id. at *11 (quoting Facebook, Inc. v. Duguid, 592 U.S. 395, 409 (2021)).

Finally, Judge Cannon opined on the ongoing circuit split related to whether text messages constitute calls and determined that “the private right of action in § 227(c)(5) . . . does not [authorize] suits by cell phone users based on unwanted text messages (rather than calls)” and noted that this authority was an additional basis to enter judgment for BMG. Anthony, 2026 WL 2685650, at *12.

Implications For Companies

If the reasoning of Anthony is widely adopted, this decision has the potential to eviscerate TCPA litigation for companies across the nation. Indeed, if the call in question is made to a cell phone, this decision essentially holds that there is no cause of action under § 227(c)(5) generally and specifically there is no protections afforded to such users under 47 C.F.R. § 64.1200(c)(1), 47 C.F.R. § 64.1200(c)(2), and 47 C.F.R. § 64.1200(d). It also represents yet another decision to hold that text messages are not calls within the meaning of § 227(c)(5).

That said, one of the more ironic elements of this decision is that it does not categorically foreclose 47 C.F.R. § 64.1601(e) claims – for failure to provide proper caller identification information – which a minority of courts have recently shoehorned into § 227(c)(5)’s private right of action. Despite the numerous other problems with such claims, § 64.1601(e) claims do not purport to hinge on an individual’s residential telephone subscriber status. This decision also does not eliminate TCPA liability under § 227(b)(3) for making calls using regulated technology but it would carve off a substantial chunk of TCPA liability if widely adopted.

While this decision is undoubtedly a positive development for corporate counsel, we are not yet at the stage where companies can take such liability off the table. This decision represents one decision, from one federal judge, and is certainly the minority view. Nonetheless, companies should continue to preserve this argument by raising it as the law continues to develop and monitor this blog to stay on top of this new potential trend in TCPA law.

September 16, 2026September 17, 2026 by Gerald L. Maatman, Jr.

It’s An Arbitration Agreement After All: Disney Compels Arbitration And Obtains Dismissal Of Class Claims In Antitrust Suit

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

Duane Morris Takeaways: On September 8, 2026, in Unger, et al v. The Walt Disney Company, No. 5:25-CV-01163 (N.D. Cal. Sept. 8, 2026), Judge Edward J. Davila granted Defendant’s motion to compel arbitration, ordered on a consolidated docket with Biddle, et al. v. The Walt Disney Company, No. 5:22-CV-07317 (N.D. Cal.). This decision serves as a clear example of arbitration agreements as a powerful tool for a company to dismiss class claims, and a critical reminder that a company that may not have signed an arbitration agreement can invoke an arbitration agreement in specific circumstances.

Case Background

Plaintiffs Cole Unger and Steven Prescott brought suit against the Walt Disney Company (“Disney”), alleging violations of the Sherman Act and corresponding state laws. Unger filed the Complaint on January 14, 2025 and filed a First Amended Complaint, adding Prescott as a plaintiff, on April 28, 2025. According to the First Amended Complaint, Disney allegedly undertook a “multifaceted campaign to suppress competition in the market for live television streamed over the internet to paying subscribers.” Specifically, Plaintiffs alleged that Disney used its ownership of ESPN to force streaming services to carry non-ESPN content in order to access ESPN, force streaming services to carry ESPN in its “base” package for customers, inflated the price of streaming ESPN through most favored nation clauses with streaming services, and provided anticompetitive rebates to Disney-owned streaming service Hulu. Plaintiffs brought claims on behalf of a putative class of fuboTV subscribers. The Unger lawsuit made similar allegations as another case, Biddle, et al. v. The Walt Disney Company, 5:22-CV-07317 (N.D. Cal.), brought on behalf of a putative class of YouTube TV subscribers and DirecTV Stream subscribers. The cases were consolidated on June 10, 2025.

Shortly before Unger filed his initial complaint, on January 6, 2025, Disney publicly announced its plan to purchase a 70% stake in fuboTV. The parties closed the deal on October 29, 2025, creating a newly combined fuboTV and Hulu + Live TV business.

On December 19, 2025, Disney filed a motion to dismiss Plaintiffs’ class claims, compel arbitration, and stay Plaintiffs’ individual claims pending arbitration. Disney filed its motion subject to fuboTV’s terms of service because Plaintiffs had assented to fuboTV’s terms of service when they subscribed to fuboTV. fuboTV’s terms of service included a provision compelling arbitration of all disputes and waiving class action claims subject to the terms of service. Disney argued that fuboTV’s terms of service, which authorized fuboTV’s “future affiliates” to invoke fuboTV’s rights under the terms of service, permitted Disney to compel arbitration of Plaintiffs’ claims and dismissal of Plaintiffs’ class claims.

The District Court’s Ruling

In a 26-page opinion, Judge Davila granted Disney’s motion to compel arbitration, dismissed Plaintiffs’ class claims, and stayed Plaintiffs’ individual claims pending arbitration. The opinion stressed that Plaintiffs did not dispute that they had assented to fuboTV’s terms of service when they signed up as subscribers. The Court held that the terms of service were “reasonably conspicuous” and that Plaintiffs had “unambiguously manifest[ed] assent” to terms of service. Op. at 9-10.

The Court held that Disney, as a non-signatory to the terms of service, could invoke fuboTV’s terms of service under the “future affiliates” provision. The Court stressed that under “the ordinary definitions of the words within the Future Affiliates Provision” were “clear and unambiguous, such that the Court will rely on its terms so long as this reliance would not lead to an absurd result.” Op. at 14. The Court then rejected Plaintiffs’ enforceability argument that Disney had not undertaken reciprocal contractual obligations, stressing that Disney was not required to “show that it undertook reciprocal obligations.” Op. at 15. Finally, the Court found that enforcement of the arbitration clause by a non-signatory would not lead to absurd results, distinguishing cases cited by Plaintiffs where disputes wholly unrelated to a company’s terms of service were found not to encompass the terms of service. Instead, the Court was unsympathetic to Plaintiffs’ argument that they did not expect to be entering into a contract with Disney when signing up for fuboTV, explaining that “courts have repeatedly found that future affiliates provisions, or clauses granting rights to successors, are valid, despite the existence of some inherent uncertainty.” Op. at 17-18.

The Court then undertook an unconscionability analysis, rejecting Plaintiffs arguments that fuboTV’s terms of service were procedurally and substantively unconscionable. The Court rejected Plaintiffs’ argument that the terms of service were substantively unconscionable as having “near infinite scope,” stressing that the canon of ejusdem generis requires courts to read broad contractual language in the scope of the specific language of the contract. Therefore, the terms of service had practical limitations based on the context of the agreement as a whole. Regarding procedural unconscionability, the Court found that the terms of service were not unconscionable because the terms were inconspicuous, included the ability for users to opt out, and were “not concealed in dense legalese inaccessible to lay consumers.” Op. at 24.

Implications for Companies

When addressing class action claims, companies should scour for any potential arbitration agreements a plaintiff may have signed, even where the plaintiff signed an arbitration agreement not directly with the Company. Courts regularly hold that non-signatories to arbitration agreements can invoke arbitration with a signatory based on multiple legal theories, including the explicit language of the arbitration agreement vesting rights in non-signatories, assignment clauses, estoppel, and a non-signatory’s third-party beneficiary status. Company mergers, like the Disney-fuboTV merger, can change a lawsuit’s calculus and require a plaintiff to individually arbitrate claims rather than petition for class certification in court.

The financial implications of invoking an arbitration agreement are substantial, as shown here. A plaintiff’s individual and class action claims can be dismissed in federal court even after the plaintiff survives a motion to dismiss. In this case, Disney had originally agreed to settle the case with all three subscriber classes for $55 million. Disney and the YouTube TV and DirecTV subscriber classes have since filed for settlement approval for $50 million. Given the reduced settlement now that the fuboTV subscriber class is not included, Disney may have saved $5 million in a settlement award it otherwise would have owed to fuboTV subscribers.

Finally, corporate counsel should regularly update its terms of service to comply with requirements for invoking arbitration in its jurisdiction. Though courts regularly enforce arbitration agreements, an otherwise valid arbitration agreement can be undone if a court finds that the agreement is unconscionable. Helpful provisions for conscionability include permitting the ability to opt out of mandatory arbitration, drafting class waivers and mandatory arbitration provisions in clear and non-legalese language, and allowing signatories time to review provisions. Companies should also require signatories to terms of service to review and affirmatively agree to updates to terms of service and include any waiver of rights in large, clear language.

September 9, 2026September 9, 2026 by Gerald L. Maatman, Jr.

First District Court In The Fourth Circuit Holds That The TCPA’s Do-Not-Call Provision Does Not Cover Text Messages

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo

Duane Morris Takeaways: On September 3, 2026, in Card, et al. v. R.J. Reynolds Tobacco Holdings, Inc., No. 26-CV-00433, 2026 U.S. Dist. LEXIS 201636 (M.D.N.C. Sept. 3, 2026), Judge Catherine Eagles of the U.S. District Court for the Middle District of North Carolina dismissed a putative class action brought under the Telephone Consumer Protection Act (the “TCPA””), on the basis that § 227(c)(5) of the statute does not extend to text messages. The decision follows the Seventh Circuit’s recent ruling in Steidinger v. Blackstone Medical Services, 182 F.4th 532 (7th Cir. 2026) and represents the first district court within the Fourth Circuit to hold that a text message is not a “telephone call” within the meaning of § 227(c)(5).

Case Background

On May 11, 2026, Plaintiff Shawn Card (“Plaintiff” or “Card”) sued R.J. Reynolds Tobacco Holdings, Inc. (“Reynolds”) under the TCPA claiming the company violated the national do-not-call registry’s requirements. Because Plaintiff alleged his phone number was registered on the national-do-not-call registry, allegedly received unwanted text messages from Reynolds, and supposedly never consented to receive those text messages, he claimed that Reynolds violated § 227(c)(5) of the TCPA.

In the complaint, Plaintiff also sought to represent a class of similarly situated individuals who also received text messages that allegedly violated the TCPA’s long-standing prohibition on telephone calls to numbers on the national do-not-call registry. Plaintiff specifically relied on § 227(c)(5) of the TCPA, which purports to create a private right of action for an individual “who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed under this subsection.”

Reynolds moved to dismiss and argued that § 227(c)(5) does not apply to text messages. Plaintiff opposed that motion.

The Court’s Decision

Judge Eagles found the reasoning of the Seventh Circuit’s recent decision in Steidinger persuasive and dismissed the complaint because text messages “do not fall within the private right of action created by § 227(c)(5).” Card, 2026 U.S. Dist. LEXIS 201636, at *3.

Judge Eagles explained § 227(c)(5) references a “telephone call” and not a “telephone solicitation,” as used elsewhere in the statute, and which is expressly defined to include telephone messages. This decision demonstrated that “Congress intended ‘telephone call’ in § 227(c)(5) to have a narrower scope.” Id. Thus, the structure and text of the TCPA supported this interpretation.

In addition, Judge Eagles also took care to note that – prior to McLaughlin Chiropractic Associates, Inc. v. McKesson Corporation, 606 U.S. 146, 168 (2025) – most courts had presumed that § 227(c)(5) applied to text messages based largely on the Federal Communications Commission’s (the “FCC”) regulations. But after McKesson, those cases are no longer good law because that case “changed the standard for judicial deference to agency statutory interpretation and called into question such decisions relying on the FCC’s interpretation.” Id. at *4.

Finally, Judge Eagles also rejected the approach adopted by the courts that have held the term “telephone call” encompasses text messages, such as Taha v. Momentive Software, Inc., 2026 WL 974297, at *3 (C.D. Cal. Mar. 11, 2026), which reasoned that “had Congress intended to eliminate textual communications from § 227(c)(5) it would have used the phrase ‘voice call,’ rather than ‘telephone call.’” Judge Eagles, however, noted that “the inverse is also true; if it had been the intent to include all types of communications, Congress more simply could have used the broader term ‘call’ as it did in §227(b), rather than ‘telephone call’ as it did in § 227(c)(5).” Id. at *6.

As a result, Judge Eagles concluded that Plaintiff failed to state a claim and became the first district court judge in the Fourth Circuit to conclude that § 227(c)(5) does not cover text messages.

Implications For Companies

The Card decision is significant for the growing split in authority as to whether the private right of action codified at § 227(c)(5) covers text messages. Card is the first court in the Fourth Circuit to hold that such text messages are not actionable. Indeed, there are now district courts in five federal circuits – including the entire Seventh Circuit – that hold text messages are not covered by this section of the statute. A chart summarizing this authority is depicted below.

Federal Circuit	Sample Opinion
1st Circuit	⮽
2nd Circuit	⮽
3rd Circuit	⮽
4th Circuit	Card v. R.J. Reynolds Tobacco Holdings, Inc., 2026 U.S. Dist. LEXIS 201636 (M.D.N.C. Sept. 3, 2026)
5th Circuit	⮽
6th Circuit	Stockdale v. Skymount Prop. Grp., LLC, 825 F. Supp. 3d 622 (N.D. Ohio 2026)
7th Circuit	Steidinger v. Blackstone Med. Servs., 182 F.4th 532 (7th Cir. 2026)
8th Circuit	Rush v. Selectquote Ins. Servs., Inc., 2026 WL 2495598 (W.D. Mo. July 30, 2026)
9th Circuit	⮽
10th Circuit	⮽
11th Circuit	See, e.g., Davis v. CVS Pharmacy, Inc., 797 F. Supp. 3d 1270 (N.D. Fla. Aug. 26, 2025)

On the other hand, there are district courts in the First, Second, Third, and Fifth Circuits that have ruled in favor of the plaintiffs’ bar on this issue with no decisions ruling in favor of corporate defendants in those circuits. There are no district courts in the Tenth Circuit that have analyzed this issue. And the common wisdom is that Howard v. Republican National Committee, 164 F.4th 1119 (9th Cir. 2026) decided this issue for the entire Ninth Circuit.

One of the most interesting parts of Card is that Judge Eagles’s opinion suggests that the issue is still live in the Ninth Circuit. Howard was decided in the context of a § 227(b)(3) claim. Thus, when Judge Eagles suggested that the term “any call” in § 227(b)(3) is a “broader term” than was used in § 227(c)(5), it also suggests that there may be some daylight between Howard and the growing number of district courts that hold §227(c)(5) does not cover text messages. Card, 2026 U.S. Dist. LEXIS 201636, at *6.

While this decision is undoubtedly a positive development for corporate counsel, we are not yet at the stage where companies can consider revising their text messaging programs. The new decisions are coming in rapidly and the landscape is changing quickly. Nonetheless, the Card decision provides corporate defendants with a powerful tool to challenge putative § 227(c)(5) class actions, premised on the receipt of text messages, particularly in the Fourth Circuit. As a result, companies should continue to raise this argument and monitor this blog to stay on top of this growing split in authority.

August 20, 2026August 20, 2026 by Gerald L. Maatman, Jr.

Waive Goodbye To Arbitration: Seventh Circuit Holds That Pre-Certification Conduct Can Establish Waiver Of Arbitration Rights In A Putative Class Action

By Gerald L. Maatman, Jr., Jennifer A. Riley, Ryan T. Garippo, and Brett A. Bohan

Duane Morris Takeaways: On August 18, 2026, in Moore, et al. v. Club Exploria, LLC, No. 25-2721, 2026 WL 2409841 (7th Cir. Aug. 18, 2026), Chief Judge Michael Brennan of the U.S. Court of Appeals for the Seventh Circuit affirmed the denial of a defendant’s motion to compel arbitration in a class action brought under the Telephone Consumer Protection Act (“TCPA”). The Seventh Circuit held that a defendant’s conduct, even prior to class certification, may support an inference that it waived its right to compel arbitration of putative class member’s claims. This ruling is significant for companies asserting an arbitration defense in a pending class action as preserving the right to compel arbitration can result in significant procedural complications.

Case Background

Club Exploria, LLC (“Exploria”) owns and manages vacation properties. To promote one of its properties, Exploria contracted with third-party vendors to run a telemarketing campaign. These vendors purchased the phone numbers of individuals who had agreed to receive sales calls which had been generated through various websites. Exploria used that list to call tens of thousands of potential customers using a prerecorded voice, including Plaintiff George Moore (“Plaintiff” or “Moore”).

In April 2019, Moore sued Exploria under § 227(b)(3) of the TCPA and claimed that he received these prerecorded calls without his consent. Over the next four years, Exploria filed pleadings with affirmative defenses, engaged in class-wide discovery, filed motions on the merits, and opposed class certification. After the class was certified, however, Exploria filed more motions, including a request to reopen discovery and to amend its answer to add additional affirmative defenses. In its third amended answer, Exploria stated that it sought to add an affirmative defense based on arbitration agreements with the class members. The district court denied this request and explained that the defense “was clearly waived by not bringing it up before now.” Id.

Thereafter, class notice was issued and Moore moved for summary judgment. But two months after briefing finished on Moore’s summary judgment motion, Exploria moved to compel arbitration and stated that 1,026 of the 66,682 class members had entered into mandatory individual arbitration agreements with the company. Exploria also explained that up to 70% of the class may be subject to similar agreements. The district court “ruled that Exploria had waived [the] arbitration defense” and “also granted summary judgment to Moore.” Id. at *2. Exploria appealed to the U.S. Court of Appeals for the Seventh Circuit.

The Seventh Circuit’s Ruling

On appeal, Chief Judge Brennan, writing for the Seventh Circuit, addressed three issues: (1) the appellate standard of review for orders denying motions to compel arbitration; (2) whether a court may consider a defendant’s pre-certification conduct in evaluating waiver; and (3) whether the district court clearly erred in finding waiver on the facts of this case.

First, the Seventh Circuit took the opportunity to clarify the standard of review for such cases as the case law was “in shambles” and highly conflicting. Id. at *3 (quoting Al-Nahhas v. 777 Partners LLC, 129 F. 4th 418, 430 (7th Cir. 2025) (Easterbrook, J., concurring)). To resolve the conflict, the Seventh Circuit turned to the U.S. Supreme Court case of U.S. Bank National Association v. Village at Lakeridge, LLC, 583 U.S. 387, 395-96 (2018) which explains that “[m]ixed questions [of law and fact] are not all alike.” Under that standard, where a district court is required to “expound on the law” the standard of review is de novo, but if the “decision does not announce a new legal rule, waiver decisions should be reviewed for clear error.” Moore, 2026 WL 2409841, at *4 (quotations omitted). The Seventh Circuit thus “overrule[d] the caselaw that does not follow [this] guidance,” particularly as to the case law that indicated that there is a per se rule that de novo review is the standard, but “only as to the applicable standard of review and to the extent [the cases] are inconsistent with this opinion.” Id.

Second, the Seventh Circuit considered whether a defendant’s pre-certification conduct could support an inference of waiver. “Waiver is the ‘intentional relinquishment or abandonment of a known right.’” Id. at *5 (quoting Morgan v. Sundance, Inc., 596 U.S. 411, 417 (2022)). The Seventh Circuit held that – although the issue was not free from dispute – that “a defendant’s pleadings, conduct during class-related discovery, and arguments in opposition to class certification are relevant to the waiver decision.” Id. at *6. “Arbitration agreements with putative class members should be produced during class-related discovery and in opposition to class certification. The number and variety of such agreements impact the district court’s Rule 23 analysis.” Id. “[I]f a diligent defendant intends to compel arbitration after class certification, it cannot do so promptly if those agreements have not been produced. Asking to reopen discovery shows a lack of diligence.” Id. Thus, the Seventh Circuit concluded that such conduct is relevant to the waiver inquiry.

Third, on the specific facts of this case and because the “legal principle [was] settled,” the Seventh Circuit reviewed the “waiver decision . . . for clear error.” Id. at *7. Here, the parties engaged in two years of class-related discovery and developed no evidence of arbitrability. Similarly, when class certification was briefed, the opposition made “no mention of arbitration.” Id. Thus, it was immaterial that “as much as 70% of the putative class [may] be subject to such agreements.” Id. “If Exploria intended to move to compel arbitration, it should have raised the issue of arbitrability in opposing class certification under Federal Rule of Civil Procedure 23” and could not do so without first developing the defense in discovery. Id.

The Seventh Circuit, therefore, affirmed the district court’s denial of Exploria’s motion to compel arbitration.

Implications For Companies

The Moore decision is quite significant for companies and their arbitration programs.

It is very common for companies to have an arbitration agreement with some members of a putative class and not others. When sued in a class action, there is often a temptation to hold such agreements back until after class certification in order to forgo the burden of collecting them until absolutely necessary. But the Moore decision instructs that this path forward is rife with peril and may result in a company losing the right to compel arbitration even when 70% of the class agreed to the provision.

From a legal perspective, the Seventh Circuit’s clarification of the standard of review, and the overruling of cases that call for a per se rule of de novo review, will also make it harder for defendants to overturn unfavorable waiver findings on appeal. When a waiver decision is ultimately reviewed for clear error, the burden to overturn an unfavorable decision will be exceedingly high at the appellate court level. Thus, the stakes at the district court level just got even higher for companies with federal cases pending in Illinois, Indiana, and Wisconsin, because the district court decision is likely to be the one that sticks in the long run.

As a result, corporate counsel should work with their outside counsel to audit their organizations’ arbitration agreements to ensure they are identified and ready to be used at the earliest stages of any pending class action.

July 30, 2026July 30, 2026 by Gerald L. Maatman, Jr.

No Vine to Certify: Grape Packer’s Bid for Class Certification Falls Short of Rule 23’s Requirements

By Gerald L. Maatman, Jr., Jennifer A. Riley, Betty Luu, and Jamar Davis

Duane Morris Takeaway: On July 21, 2026, in Sara Reyes, et al v. Grow Smart Labor, Inc., et al, Case No. 1:24-CV-00028, Magistrate Judge Stanley Boone of the U.S. District Court for the Eastern District of California issued findings and recommendations denying an employee’s motion for class certification under the California Labor Code. This decision is a reminder that courts scrutinizing motions for class certification will conduct a rigorous, fact-intensive analysis of each Rule 23 requirement rather than accept generalized allegations of common policies or practices. Even where numerosity is easily met, courts will closely examine whether the proposed class is sufficiently uniform across workers, supervisors, pay methods, and timekeeping systems before finding that commonality, typicality, and predominance are satisfied.

Background:

On January 5, 2024, Plaintiff Sara Reyes (“Plaintiff”) filed a class action asserting claims for violations of the Migrant and Seasonal Agricultural Worker Protection Act and the California Labor Code on behalf of herself and those similarly situated in the State of California. Id. at 6.

Defendant Grow Smart Labor, Inc. (“Grow Smart”) employed Plaintiff as a grape picker and packer in August 2023 for a two-week period. Id. at 3-4. Plaintiff alleges she was paid less than the piece-rate basis, was not separately compensated for rest periods or other nonproductive time, and that Grow Smart supervisors instructed her and other employees not to take meal periods or rest breaks, instead directing them to continue working. Id. at 4-6.

On May 14, 2026, Plaintiff moved to certify a class of all non-exempt agricultural employees employed by any Grow Smart from January 5, 2021 to the present.

The Magistrate Judge’s Findings and Recommendations:

The Magistrate Judge recommended denying Plaintiff’s motion for class certification and addressed each Rule 23(a) prerequisite in turn. As to numerosity, the Magistrate Judge agreed with Plaintiff that her proposed subclasses (ranging from 160 to 1,067 members) comfortably exceeded the roughly 40-member threshold generally required in the Ninth Circuit. Id. at 22-23. On commonality, however, the Magistrate Judge found Plaintiff failed to meet her burden as to both her meal-break and piece-rate claims. Id. at 23. The Magistrate Judge reasoned that Grow Smart’s workforce was too heterogeneous to generate common answers, since employees worked for different third-party contractees, at different locations, under different supervisors, different pay methods, and different timekeeping systems. Id. at 31-32. The Court also rejected Plaintiff’s reliance on the rebuttable presumption of meal-period violations recognized in Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021), explaining that Wage Order No. 14, unlike the wage order at issue in Donohue, exempts agricultural employers from recording meal periods when operations cease, so the absence of recorded breaks did not, on its own, establish noncompliance on a class-wide basis. Id. at 23-32.

On typicality, the Magistrate Judge found Plaintiff’s claims were not typical of the class she sought to represent. Id. at 33. Plaintiff worked only eight shifts, all for a single contractee, all on a piece-rate basis, and had no experience with the different contractees, supervisors, pay methods, or timekeeping systems used elsewhere in Grow Smart’s operations. Id. at 33-35. The Magistrate Judge also found Plaintiff could not represent employees who, beginning in March 2024, became subject to a mandatory arbitration agreement that Plaintiff herself never signed. Id. at 33-38. Because Plaintiff was not typical, the Magistrate Judge likewise found her inadequate to represent the class generally and, specifically, inadequate as to the arbitration-agreement subgroup. Id. at 38.

Turning to Rule 23(b), the Magistrate Judge found Plaintiff met neither subsection she invoked. Id. at 39. Under Rule 23(b)(2), the Magistrate Judge held that class treatment was inappropriate because Plaintiff sought individualized monetary damages (not solely injunctive or declaratory relief), which Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360-361 (2011),forecloses under that subsection, and because the arbitration agreements and varying work conditions meant no single injunction could resolve the claims class-wide. Id. at 39-40. Under Rule 23(b)(3), the Magistrate Judge found predominance lacking for the same reasons commonality failed, and further found Plaintiff had not shown superiority, since resolving the claims would require individualized inquiries into each employee’s assignment, contractee, timekeeping format, and pay method. Id. at 41-43. Having found Plaintiff met only numerosity while failing commonality, typicality, and both invoked Rule 23(b) categories, the Magistrate Judge recommended that the motion for class certification be denied in full. Id. at 43.

It should be noted that the Magistrate Judge’s findings and recommendations remain subject to adoption by the District Judge. Under the Eastern District of California’s Local Rule 304 and 28 U.S.C. § 636(b)(1)(B) and (C), the parties have fourteen days from service to file objections, and the District Judge will then conduct the applicable review before deciding whether to adopt, modify, or reject the Magistrate Judge’s recommendation.

Implications for Companies

This decision offers useful guidance for agricultural employers and other companies using third-party staffing arrangements across varied worksites.

The decision demonstrates that a named plaintiff’s own work history can substantially narrow the class she is permitted to represent, giving employers grounds to contest an overbroad proposed class even when certain claims otherwise survive. Further, adopting an arbitration agreement even after litigation begins can carve out a meaningful subset of the workforce from any later-certified class, since a plaintiff who never signed such an agreement cannot represent employees who did.

July 29, 2026July 29, 2026 by Gerald L. Maatman, Jr.

“Calling” Out Fraud: Florida Federal Court Allows Counterclaim To Proceed Against TCPA Plaintiff

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo

Duane Morris Takeaways: On July 21, 2026, in Smith v. GetMeHealthCare, LLC, No. 25-CV-00568, 2026 WL 2089044 (M.D. Fla. July 21, 2026), Judge Sheri Polster Chappell, writing for the U.S. District Court for the Middle District of Florida denied a Telephone Consumer Protection Act (“TCPA”) plaintiff’s motion to dismiss a common law fraud claim brought by the defendant. Although TCPA claims can prove difficult to win on a motion to dismiss, this decision provides TCPA defendants with another powerful tool at the pleadings stage and helps create opportunities for companies to educate courts on a plaintiff’s fraudulent activity early in the proceedings.

Case Background

In 2025, Plaintiff Keneisha Smith (“Plaintiff” or “Smith”) filed a TCPA lawsuit against GetMeHealthCare, LLC (“GMHC”), alleging she received 31 unwanted telemarketing calls over a 10-day period. She claims these calls were made without her consent and even though she registered her telephone number on the national do-not-call registry.

Nonetheless, on June 12, 2025, Smith answered one of these alleged telemarketing calls. She provided her name, phone number, address, date of birth, and current insurance information. The agent then transferred Smith to a GMHC employee, who helped Smith complete the enrollment process, and signed her up for an insurance plan. Even though Smith willingly signed up for insurance, she sued GMHC claiming it violated Section 227(c)(5) of the TCPA, and its implementing regulations, for calling her telephone number despite its registration on the national do-not-call registry.

But GMHC decided to put these facts in front of the Court right away. Instead of simply moving to dismiss the claims, GMHC answered the complaint and filed counterclaims for fraudulent misrepresentation and fraudulent inducement. It argued that “Smith’s willingness to participate in the June 12, 2025, call is inconsistent with her wish not to be contacted.” Id. at *1. Smith also allegedly lied about her age, her actual willingness to obtain health insurance, and her desire to be contacted in the future. In support of its counterclaims, “GMHC sent a recording of the June 12, 2025 call and attached transcript of the call” to its pleadings. Id. at *1, n.1.

In response, Smith moved to dismiss the counterclaims.

The Court’s Decision

In a well-reasoned order, Judge Chappell denied Smith’s motion to dismiss in its entirety, finding “all of Smith’s arguments to be meritless.” Id. Although Smith asserted various arguments regarding the Court’s jurisdiction and GMHC’s requested relief, the majority of the opinion focused on the actual allegations of GMHC’s counterclaim, which were sufficiently pled to survive a motion to dismiss.

In federal court, fraud claims must be pled with a heightened degree of particularity. See Fed. R. Civ. P. 9(b). Under this standard, “claims of fraud must proffer ‘the who, what, when, where, and how of the fraud alleged.’” Smith, 2026 WL 2089044, at *2 (quoting Omnipol, a.S. v. Worrell, 421 F. Supp. 3d 1321, 1343 (M.D. Fla. 2019), aff’d sub nom., 32 F.4th 1298 (11th Cir. 2022))

Here, Judge Chappell found that GMHC pled all of these details and the misrepresentations could be actionable. Judge Chappell found that Smith’s alleged conduct before the call where she “consent[ed] to be contacted,” when coupled with her misrepresentations about her “age” and desire to complete “enrollment,” could plausibly constitute fraud. Smith, 2026 WL 2089044, at *3. Judge Chappell also accepted GMHC’s plausible allegations that Smith’s “motivation [was] to commit fraud” and the communication was orchestrated to form the basis of “a lawsuit against GMHC to get money.” Id. Judge Chappell also independently concluded that the recording and transcript of the call supported “most, if not all, of GMHC’s allegations.” Id.

Thus, Judge Chappel rejected “Smith’s Rule 9(b) argument” and declined to dismiss the claim. Id.

Implications For Companies

The litigation strategy in Smith is significant for companies facing TCPA lawsuits.

As many companies know, it is common for a consenting customer to invite telemarketing calls, and then “deceptively play[] along” upon receipt of those calls, only to turn around and sue the caller in a TCPA class action. Abramson v. Oasis Power LLC, No. 18-CV-00479, 2018 WL 4101857, at *5 (W.D. Pa. July 31, 2018). When companies try to explain these tactics to courts at the pleadings stage, the concerns are often brushed away as “unpersuasive.” Id. The reason that strategy is ineffective is because “[p]rior express consent is an affirmative defense to a claim under the TCPA” and typically must be resolved after discovery. Murphy v. DCI Biologicals Orlando, LLC, No. 12-CV-1459, 2013 WL 6865772., at *4 (M.D. Fla. Dec. 31, 2013) (quotations omitted).

With the benefit of discovery, companies can often demonstrate the “Plaintiff invited the initial call . . . [and] further calls by playing along on the first call” as a basis why a class should not be certified because it is a unique defense that “will distract from the claim to the Class’s detriment.” Sapan v. Fed. Sav. Bank, No. 23-CV-00075, 2025 WL 3050064, at *8 (C.D. Cal. Sept. 30, 2025) (denying class certification based on typicality); see also Sapan v. Veritas Funding, LLC, No. 23-CV-00468, 2023 WL 6370223, at (C.D. Cal. July 28, 2023) (same). But it requires a significant investment to litigate a claim through class certification, and many companies are looking for an exit opportunity prior to that stage in the proceedings.

Smith provides companies with a tool to get these facts in front of courts at the earliest stages of the litigation and shape the judge’s impression of the case. It also provides companies with additional recourse as common law fraud opens up the door to tort damages that are traditionally off the table in TCPA cases. For example, in Illinois, there is an argument that “actions at common law fraud provide for the award of attorney fees and costs, as well as punitive damages.” Father & Sons, Inc. v. Taylor, 703 N.E.2d 532, 547 (Ill. App. Ct. 1998).

Further, even if the counterclaim cannot result in the entire action being dismissed at the outset of a case, it can create leverage for the company to negotiate a favorable exit from the litigation early on. And, if the case proceeds to discovery regardless, the counterclaim can prove useful given that “a defense or counterclaim defeats typicality if it is likely to become the litigation’s focus.” Hirsch v. USHealth Advisors, LLC, 337 F.R.D. 118, 133 (N.D. Tex. 2020).

Thus, corporate counsel facing TCPA actions should be carefully considering the facts in their cases to determine whether they support the use of a similar counterclaim or other creative procedural defenses.