By Gerald L. Maatman, Jr., Jennifer A. Riley, Daniel D. Spencer, and Kenny T. Tran
Duane Morris Takeaways: On June 30, 2026, Governor Newsom signed Assembly Bill 2155 (AB 2155), which amends California Code of Civil Procedure section 1281 to provide that any arbitration agreement deemed unenforceable under the Federal Arbitration Act (FAA) is likewise unenforceable under the California Arbitration Act (CAA). The amendment is designed to align California law with federal law by ensuring that the same limitations, exceptions, and exemptions governing the enforceability of arbitration agreements under the FAA also apply under the CAA.
Overview
AB 2155 expressly incorporates two significant FAA exemptions into the CAA, including: (1) the “transportation worker” exemption, which applies to contracts of employment for seamen, railroad employees, and other classes of workers engaged in foreign or interstate commerce; and (2) the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), which renders predispute arbitration agreements unenforceable with respect to claims involving sexual assault or sexual harassment disputes.
AB 2155 becomes effective on January 1, 2027, and the legislation contains no indication that it applies retroactively. Prior to this amendment, employers frequently argued that even if the FAA did not govern an arbitration agreement, the agreement remained enforceable under the CAA because California law did not recognize the FAA’s transportation worker exemption. AB 2155 eliminates that argument. Beginning January 1, 2027, if an arbitration agreement is unenforceable under the FAA due to the transportation worker exemption, it will likewise be unenforceable under the CAA.
Implications for Employers
Employers, particularly those whose operations involve interstate commerce, should review their arbitration agreements and dispute resolution strategies in anticipation of AB 2155’s effective date. The amendment is likely to increase litigation challenging the enforceability of arbitration agreements, including class and representative actions brought by transportation workers and claims falling within the scope of the EFAA.
Duane Morris Takeaway: In the first half of 2026, across all major types of class actions, courts issued rulings on more than 155 motions to grant or deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 97 rulings, with an overall success rate of 63%. In contrast, comparing apples to apples, in the first half of 2025, courts issued rulings on more than 211 motions to grant or deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 145 rulings, with an overall success rate of 69%.
Percentages for year over year rulings for 2022 to 2025 are below. Across all major areas of class action litigation in 2025, courts issued rulings on 435 motions for class certification. Courts granted 297 motions for class certification in whole or in part, a rate of approximately 68%. In 2024, courts issued rulings on 432 motions to grant or to deny class certification. Of these, plaintiffs succeeded in obtaining or maintaining certification in 272 rulings, for an overall success rate of 63%. In 2023, by comparison, courts issued rulings on 451 motions to grant or to deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 324 rulings, an overall success rate of nearly 72%. In 2022, 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 2026, the number of motions that courts considered varied significantly by subject matter area, and the number of rulings varied across substantive area:
The following list summarizes the results in each of ten key areas of class action litigation.
FCRA – 100% granted / 0% denied (2 of 2 granted / 0 of 2 denied) TCPA – 100% granted / 0% denied (2 of 2 granted / 0 of 2 denied) RICO – 100% granted / 0% denied (1 of 1 granted / 0 of 1 denied) WARN Act – 100% granted / 0% denied (1 of 1 granted / 0 of 1 denied)A Security Fraud – 80% granted / 20% denied (8 of 10 granted / 2 of 10 denied) Antitrust – 71% granted / 29% denied (5 of 7 granted / 2 of 7 denied) Consumer Fraud – 71% granted / 29% denied (10 of 14 granted / 4 of 14 denied) Civil Rights – 65% granted / 35% denied (13 of 20 granted / 7 of 20 denied) ERISA – 64% granted / 36% denied (9 of 14 granted / 5 of 14 denied) FLSA / Wage & Hour (Conditional Certification) – 58% granted / 42% denied (39 of 67 granted / 28 of 67 denied) Discrimination – 50% granted / 50% denied (2 of 4 granted / 2 of 4 denied) FLSA / Wage & Hour (Decertification) – 50% granted / 50% denied (1 of 2 granted / 1 of 2 denied) Privacy – 44% granted / 56% denied (4 of 9 granted / 5 of 9 denied) Products Liability / Mass Torts – 0% granted / 100% denied (0 of 1 granted / 1 of 1 denied) Data Breach – 0% granted / 0% denied (no class certification rulings in 2026)
The plaintiffs’ class action bar obtained 100% success rates in four areas, FCRA, TCPA, RICO, and WARN. There have only been two FCRA and TCPA certification rulings in 2026, and one each for RICO and WARN, which were all granted by the court for a 100% success rate. In cases alleging securities fraud violations, plaintiffs succeeded in obtaining orders certifying classes in 8 of 10 rulings, for a success rate of 80%. In cases alleging antitrust violations, plaintiffs managed to obtain class certification rulings in 5 of 7 rulings issued during the first half of 2026, a success rate of 71%. And in wage & hour litigation, plaintiffs were not nearly as successful as in previous years. They succeeded in obtaining orders certifying classes and/or collective actions in 39 of 67 rulings issued during 2026, a success rate of only 58%.
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 2026, courts 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. Of the 67 rulings addressing first-stage motions for conditional certification, the court granted 39, for a success rate of a much lower than typical 58%
In contrast, from January 1 to July 1, 2025, issued 74 rulings. Of these, 71 addressed first-stage motions for conditional certification of collective actions under 29 U.S.C. § 216(b), and 3 addressed second-stage motions for decertification of collective actions. Of the 71 rulings that courts issued on motions for conditional certification, 58 rulings favored plaintiffs, for a success rate of 82%.
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 2026 have not supported that typical success. There have only been 2 rulings thus far that courts issued on motions for decertification of collective actions, and only 1 ruling favored defendants, for a success rate of 50%.
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 (14 decisions), which include New York and California, respectively.
Takeaways From Certification Statistics Midway Through 2026
Notable thus far at the halfway point of the year, there have been a very small number of rulings emanating from the Fifth and Sixth Circuits (2 and 1 decisions, respectfully), which was true in 2025 as well. There have overall been less rulings issued by the courts, and at a lower success rate than previous years.
We will continue to track class certification trends in 2026 and will report on final numbers in the Duane Morris Class Action Review – 2027, which will be published in the first week of January. Stay tuned!
Duane Morris Takeaways: Corporate defendants saw unprecedented settlement numbers across all areas of class action litigation between 2022 and 2025, and mid-year through 2026, settlement numbers are even more robust. The cumulative value of the top ten settlements across all substantive areas of class action litigation hit record highs in 2025, surpassing the highest levels ever in 2022. When the numbers for the previous few years are combined, the total signals 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 $79 billion in 2025, $42 billion in 2024, $51.4 billion in settlements in 2023, and a $66 billion in 2022. When combined, the four-year settlement total eclipses any other four-year period in the history of American jurisprudence.
As a prelude to the Duane Morris Class Action Review – 2027, this blog post reports on our analysis of class action settlements through the first half of 2026. The data shows that for the period of January 1 to June 30, 2026, the current year is ahead of the historically high numbers of 2025. As of the end of the first half of 2026, the aggregate settlement total across all areas of class action litigation and government enforcement lawsuits is $53.795 billion (in accounting for the top 5 settlements in the various substantive areas of law). By comparison, in 2025 at the half-way mark, the aggregate settlement total was $21.77 billion.
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 2026, there are three settlements over the billion-dollar mark. There were eight total billion-dollar settlements in 2025. The 10 individual billion-dollar settlements in 2024 surpassed the number in 2023, and only fell short of the number of billion-dollar settlements in 2022. In 2023, parties resolved nine class actions for $1 billion or more. In 2022, parties resolved 15 class actions for $1 billion or more in settlement dollars. Together with the three thus far in 2026, corporations have seen 45 settlements of one billion dollars or more in four and a half years. This string of settlements marks the most extensive set of billion-dollar class action settlements in the history of the American court system.
The Scorecard On Leading Class Actions Settlements Halfway Through 2026
The plaintiffs’ class action bar has scored rich settlements thus far in 2026 in virtually every area of class action litigation. The following list shows the totals of the top 5 settlements at the mid-year point in 2026 in key areas of class action litigation:
$34.875 Billion – Antitrust class actions $8.609 Billion – Products liability/Mass Tort class actions $4.25 Billion – Government Enforcement actions $1.979 Billion – Securities Fraud class actions $1.535 Billion – Consumer Fraud class actions $624 Million – Privacy class actions $501 Million – ERISA class actions $392.1 Million – Discrimination class actions $323.9 Million – Wage & Hour class and collective actions $309.7 Million – Data Breach class actions $242.45 Million – Labor class actions $105.05 Million – Fair Credit Reporting Act class actions $60.93 Million – TCPA class actions $41.9 Million – Civil Rights class actions
The high dollar settlements of the past four years suggested that the plaintiffs’ bar would continue to be equally, if not more aggressive, with their case filings and settlement positions. From the 2026 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 2026
Top Antitrust Class Action Settlements In 2026
The top 10 antitrust class action settlements totaled $45.99 billion in 2025, $8.412 billion in 2024, $11.74 billion in 2023, and $3.72 billion in 2022.
$34 billion – In Re Payment Card Interchange Fee And Merchant Discount Antitrust Litigation, Case No. 05-MD-1720 (E.D.N.Y. June 9, 2026) (preliminary settlement approval granted to Visa’s and Mastercard’s revised settlement with merchants who accused the card networks of charging too much to process payments on their credit cards).
$303 million – Ray, et al. v. NCAA, Case No. 23-CV-425 (E.D. Cal. May 12, 2026) (final settlement approval granted in a class action to resolve claims from thousands of Division I volunteer coaches alleging that the organization’s rules fixed their compensation at zero).
$218 million – In Re Realpage Inc. Rental Software Antitrust Litigation, Case No. 23-MD-3071 (M.D. Tenn. May 22, 2026) (May 22, 2026) (preliminary settlement approval granted to resolve claims from a second set of renters alleging antitrust claims that they colluded with revenue management firm RealPage Inc. to fix rental prices across the country).
$200 million – In Re Generic Pharmaceutical Pricing Antitrust Litigation, Case No. 16-MD-2724 (E.D. Penn. Jan 23, 2026) (final settlement approval granted in a class action to resolve claims alleging antitrust claims alleging the defendants conspired with other drugmakers to inflate generic drug prices).
$136 million – In Re PVC Pipe Antitrust Litigation, Case No. 24-CV-7639 (N.D. Ill. May 13, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the company conspired with other polyvinyl chloride pipe producers to fix prices).
Top Civil Rights Class Action Settlements In 2026
The top 10 civil rights class action settlements totaled $580.9 million in 2025, $313.8 million in 2024, $643.15 million in 2023, and $1.31 billion in 2022.
$20 million – Healy, et al. v. Jefferson County Kentucky Louisville Metro Government, Case No. 17-CV-71 (W.D. Ky. Mar. 11, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the County regularly imprisons, detains or incarcerates persons longer than ordered by Courts of the Commonwealth of Kentucky, and under conditions that violate the orders of such Courts).
$15 million – Johnson, et al. v. City Of Annapolis, Case No. 21-CV-112 (D. Md. May 26, 2026) (settlement reached in two class actions to resolve claims from more than 1,400 city residents of public housing and by representatives of a former public housing resident who died alleging substandard housing conditions at properties owned and operated by the Housing Authority of the City of Annapolis (HACA).
$4 million – Cody, et al. v. City Of St. Louis, Case No. 17-CV-2707 (E.D. Mo. Feb. 13, 2026) (preliminary settlement approval granted in a class action to resolve claims from hundreds of people who say they endured inhumane conditions while held at the city’s Medium Security Institution, commonly known as the Workhouse).
$1.5 million – Coleman, et al. v. City Of Brookside, Case No. 22-CV-423 (N.D. Ala. Feb. 6, 2026) (preliminary settlement approval sought in a class action to resolve claims brought by four drivers who said they were targeted in an aggressive towing and ticketing scheme).
$1.4 million – Santiago, et al. v. City Of Chicago, Case No. 22-CV-5827 (N.D. Ill. Apr. 8, 2026) (preliminary settlement approval granted in two consolidated actions to resolve claims alleging the city of Chicago tows vehicles it deems abandoned without properly notifying their owners).
Top Consumer Fraud Class Action Settlements In 2026
The top 10 consumer fraud class action settlements totaled $2.1 billion in 2025, $2.44 billion in 2024, $3.29 billion in 2023, and $8.596 billion in 2022.
$436 million – Broadmoor Lumber & Plywood Co. et al. v. Toyota Industries Corp., Case No. 24-CV-6640 (N.D. Cal. Feb. 26, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the defendant and its subsidiaries misled tens of thousands of business buyers into thinking the emissions of its forklift and construction engines were “the cleanest” in the industry).
$425 million – In Re Capital One 360 Savings Account Interest Rate Litigation, Case No. 24-MD-311 (E.D. Va. Apr. 20, 2026) (final settlement approval granted in a class action to resolve claims alleging that Capital One deceptively advertised its 360 Savings accounts).
$309 million – In Re Amazon Return Policy Litigation, Case No. 23-CV-1372 (W.D. Wash. Jan. 27, 2026) (settlement approval sought in a class action to resolve a proposed class action accusing Amazon of shortchanging customers on refunds for returned items).
$240 million – Bickerstaff, et al. v. SunTrust Bank, Case No. 10EV010485 (Ga. Cir. Ct. May 26, 2026) (final settlement approval granted in a class action alleging that the bank charged illegal overdrafts on ATM and debit card transactions which harmed Georgia consumers).
$125 million – National Veterans Legal Services Program, et al. v. United States, Case No. 24-1757 (Fed. Cir. Mar. 20, 2026) (settlement approval affirmed in a class action to resolve claims of hundreds of thousands of PACER users who were allegedly made to pay more than the law allowed).
Top Data Breach Class Action Settlements In 2026
The top 10 data breach class action settlements totaled $515.79 million in 2025, $593.2 million in 2024, $515.75 million in 2023, and $719.21 million in 2022.
$117.5 million – Hasson, et al. v. Comcast Cable Communications LLC, Case No. 23-CV-5039 (E.D. Penn. May 13, 2026) (final settlement approval granted in a consolidated class action lawsuit alleging the internet and mobile services provider failed to implement proper cybersecurity measures to safeguard sensitive consumer information, leading to an October 2023 data breach).
$46.7 million – In Re 23andMe, Inc., Customer Data Security Breach Litigation, Case No. 24-MD-3098 (N.D. Cal. Feb. 6, 2026) (final settlement approval granted in a class action to resolve claims alleging that 23andMe Inc. and affiliates had a data breach in which millions of customers’ genetic data and personally identifiable information (PII) was hacked).
$31.5 million – Angus, et al. v. Flagstar Bank FSB, Case No. 21-CV-10657 (E.D. Mich. Mar. 12, 2026) (preliminary settlement approval granted in a class action to resolve consolidated class claims that Flagstar Bank failed to protect the personal information of customers and employees in two data breaches impacting more than 2 million people).
$26 million – In Re Lakeview Loan Servicing Data Breach Litigation, Case No. 22-CV-20955 (M.D. Fla. Feb. 4, 2026) (preliminary settlement approval granted to settle a class action over their personally identifiable information potentially being accessed during a data breach).
$24.5 million – In Re LastPass Data Security Incident Litigation, Case No. 22-CV-12047 (D. Mass. Feb. 2, 2026) (preliminary settlement approval granted to settle a proposed class action over a 2022 data breach that exposed the personal information of millions of people and led to the looting of cryptocurrency accounts).
Top Discrimination Class Action Settlements In 2026
The top 10 discrimination class action settlements totaled $507.10 million in 2025, $356.8 million in 2024, $762.2 million in 2023, and $597 million in 2022.
$110 million – In Re Wells Fargo & Co. Hiring Practices Derivative Litigation, Case No. 22-CV-5173 (N.D. Cal. May 15, 2026) (final settlement approval granted in a class action to resolve a shareholder derivative lawsuit accusing the bank of corporate mismanagement through discriminatory hiring and lending).
$100 million – Snyder-Hill, et al. v. The Ohio State University, Case No. 23-cv-2993, Knight, et al. v. The Ohio State University, Case No. 23-CV-2994, and Gonzales, et al. v. The Ohio State University, Case No. 23-CV-3051 (S.D. Ohio June 22, 2026) (board approval of a settlement agreement to resolve claims from approximately 300 former students accusing former Ohio State University sports doctor Richard Strauss of sexual abuse).
$72.5 million – Doe, et al. v. Bank Of America NA, Case No. 25-CV-8520 (S.D.N.Y. Apr. 2, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the defendant Jeffrey Epstein’s sex trafficking and abuse).
$60.5 million – Candelore, et al. v. Tinder, Inc., Case No. BC583162 (Cal. Super. Ct. June 4, 2026) (final settlement approval granted in a class action to resolve claims alleging that the company charged older users more than younger users for Tinder Plus and Tinder Gold subscriptions.
$35 million – Bensky, et al. v. Darren Indyke, Case No. 24-CV-1204 (S.D.N.Y. Mar. 3, 2026) (preliminary settlement approval granted in a class action alleging that the defendants helped facilitate Jeffrey Epstein’s vast sex trafficking enterprise).
Top EEOC / Government Enforcement Class Action Settlements In 2026
The top 10 EEOC / government enforcement class action settlements totaled $3.29 billion in 2025, $335.9 million in 2024, $263.58 million in 2023, and $404.5 million in 2022.
$3 billion – New Jersey Department Of Environmental Protection, et al. v. E.I. du Pont de Nemours & Co., Case No. 19-CV-14758 & 19-CV-14766 (D.N.J. June 24, 2026) (settlement approval pending to resolve the state’s claims over contamination caused by the manufacture and discharge of forever chemicals).
$575 million – United States Of America, et al. v. PacifiCorp., Case No. 24-CV-2102 (D. Ore. Feb. 20, 2026) (settlement reached to resolve claims for damages related to wildfires in Oregon and Northern California).
$450 million – United States Of America, et al. v. Chemours Co., Case No. 26-CV-418 (S.D. W. Va. June 24, 2026) (proposed consent decree entered for a multi-state settlement with Chemours Co. over alleged years-long, illegal discharges of synthetic “forever chemicals” used to make products resistant to water, grease and stains).
$125 million –Illinois And Peoples Gas and Northshore Gas (Ill. Cmrc. Comm. Apr. 30, 2026) (settlement reached with two gas companies and the Attorney General’s office on behalf of customers concerning costs related to Peoples Gas’ ongoing, massive program to retire cast- and ductile-iron mains).
$100 million – Federal Trade Commission, et al. v. Walmart Inc., Case No. 26-CV-1655 (N.D. Cal. Feb. 27, 2026) (consent decree entered to settle claims the company misled its “Spark” delivery program drivers over the amount they would be paid, and deceived customers over how much of the tips they paid would go to their drivers).
Top ERISA Class Action Settlements In 2026
The top 10 ERISA class action settlements totaled $680.30 million in 2025, $413.3 million in 2024, $580.5 million in 2023, and $399.6 million in 2022.
$332 million – McCutcheon, et al. v. Colgate-Palmolive Co., Case No. 16-CV-4170 (S.D. N.Y. Jan. 14, 2026) (final settlement approval granted in a class action to resolve claims alleging that Colgate-Palmolive violated ERISA by miscalculating pension benefits for retirees who took lump-sum distributions between 1989 and 2005).
$48 million – Hoak, et al. v. Ledford, Case No. 15-CV-3983 (N.D. Ga. May 13, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that the defendant failed to provide annuity payments for life).
$44.4 million – In Re AME Church Employee Retirement Fund Litigation, Case No. 22-MD-3035 (W.D. Tenn. Mar. 24, 2026) (preliminary settlement approval granted in a multidistrict litigation from a class of African Methodist Episcopal Church workers who alleged that mismanagement of their annuity retirement plan allowed a rogue employee to embezzle $90 million).
$42 million – Halter, et al. v. Providence Health & Services, Case No. 25-CV-210 (W.D. Wash. June 4, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that Providence mismanaged its employees’ retirement plan by failing to use money forfeited by departing workers to reduce administrative expenses).
$35 million – Iron Workers District Council Of New England Health And Welfare Fund, et al. v. Teva Pharmaceutical Industries Ltd., Case No. 23-CV-11131 (D. Mass. Apr. 3, 2026) (preliminary settlement approval granted in a class action to resolve claims from a coalition of union healthcare funds alleging that the defendant schemed to delay generic competition for its QVAR asthma inhalers).
Top FCRA, FDPCA, And FACTA Class Action Settlements In 2026
The top 10 FCRA, FDPCA, and FACTA class action settlements totaled $74.77 million in 2025, $42.43 million in 2024, $100.15 million in 2023, and $210.11 million in 2022.
$56.85 million – Stoff, et al. v. Wells Fargo Bank N.A., Case No. 37-2020-00020808-CU-BT-CTL (Cal. Super. Ct. Apr. 17, 2026) (final settlement approval granted in a class action to resolve claims alleging that the company violated the federal Fair Credit Reporting Act (FCRA) by failing to report CARES Act forbearances accurately).
$14.3 million – Ray, et al. v. AdaptHealth Corp., Case No. 22-CV-898 (M.D.N.C. June 1, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that the company violated the North Carolina Debt Collection Act by overcharging and trying to collect debts from patients who had returned medical equipment to the company).
$13.5 million – Scroggins, et al. v. LexisNexis Risk Solutions FL Inc., Case No. 22-cv-00545 (E.D. Va. Mar. 16, 2026) (final settlement approval granted in a class action to resolve claims alleging that the defendant incorrectly reported some consumers as deceased).
$13 million – VanderKodde, et al. v. Elliott, Case No. 17-CV-203 (W.D. Mich. Apr. 13, 2026) (final settlement approval granted in a class action to resolve claims from debtors who alleged that a creditor law firm charged unlawfully high post-judgment interest rates during debt collection).
$7.4 million – Keim, et al. v. Trader Joe’s, Case No. 19STCV36790 (Cal. Super. Ct. Feb. 5, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the grocery store violated the Fair and Accurate Credit Transactions Act by providing customers with printed receipts that displayed both the first six and last four digits of their card numbers).
Top FLSA / Wage & Hour Class And Collective Settlements In 2026
The top 10 FLSA / wage & hour class and collective action settlements totaled $430.58 million in 2025, $614.55 million in 2024, $742.5 million in 2023, and $574.55 million in 2022.
$162 million – Calderon, et al. v. Public Partnerships LLC, Case No. 25-CV-2320 (E.D.N.Y. June 23, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that the company failed to timely and accurately pay about 200,000 personal assistants).
$86 million – Callister, et al. v. Swedish Health Services, Case No. 21-2-16148-7 (Wash. Super. Ct. May 8, 2026) (preliminary settlement approval granted in a class action alleging that the company failed to provide required second meal periods for employees working shifts longer than 10 hours, and underpaid workers through a policy of rounding time entries).
$38.7 million – Pruess, et al. v. Presbyterian Health Plan Inc., Case No. 19-CV-629 (D.N.M. Jan. 9, 2026) (D.N.M. June 24, 2026) (final settlement approval granted to resolve claims alleging that the defendant failed to pay overtime compensation to care workers in violation of the FLSA).
$19.2 million – Diaz, et al. v. New York Paving Inc., Case No. 18-CV-4910 (S.D.N.Y. June 17, 2026) (final settlement approval granted in a class action to resolve claims alleging that the defendant failed to pay for pre- and post-shift work and for overtime compensation).
$18 million – Abarca, et al. v. Werner Enterprises Inc., Case No. 14-CV-319, Smith, et al. v. Werner Enterprises Inc., Case No. 15-CV-287, and Vester, et al. v. Werner Enterprises Inc., Case No. 17-CV-145 (D. Neb. Feb. 5, 2026) (preliminary settlement approval granted in a collective action to resolve claims alleging that Werner failed to pay minimum wages for non-driving work time, including time spent in sleeper berths, waiting for loads, performing pre-trip and post-trip inspections and attending to cargo security).
Top Labor Class Action Settlements In 2026
The top 10 labor class action settlements totaled $210.5 million in 2025, $237.0 million in 2024 and $129.67 million in 2023.
$200.2 million – Brown, et al. v. JBS, Inc., Case No. 22-CV-2946 (D. Colo. Jan. 15, 2026) (preliminary settlement approval granted in a class action to resolve claims between former employees and Agri Beef, American Foods Group, Cargill, Hormel, JBS, National Beef, Nebraska Beef, Perdue Farms, Quality Pork, Seaboard Foods, Triumph Foods and Tyson Foods alleging that the companies unlawfully conspired to suppress the wages of workers at their processing plants).
$27.5 million – Hoffman, et al. v. United Airlines, Inc., Case No. 21-CV-6395 (N.D. Ill. Mar. 11, 2026) (settlement reached in a class action to settle a lawsuit by former employees who say the defendant mishandled recent voluntary buyout programs).
$9.5 million – Dorrell, et al. v. Constellation Energy Corp., Case No. 25-CV-2251 (D. Md. May 12, 2026) (preliminary settlement approval sought in a class action alleging that the company conspired with other major nuclear power generation companies to illegally limit compensation for employees).
$3 million – Bailey, et al. v. Sedgwick Claims Management Services, Inc., Case No. 24-CV-2749 (W.D. Tenn. May 1, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that the defendant failed to retroactively reimburse the tobacco penalties paid by certain employees who subsequently complete a quit-smoking program, and of failing to inform workers that recommendations from their personal physicians will be considered in the course of assessing penalties).
$2.25 million – Brinkman, et al. v. Target Corporation, Case No. 24-2- 25091-3 (Wash. Super. Ct. May 5, 2026) (final settlement approval granted in a class action to resolve claims alleging that the company failed to disclose wage scales and salary ranges in Washington job postings).
Top Privacy Class Action Settlements In 2026
The top 10 privacy class action settlements totaled $801.85 million in 2025, $2.01 billion in 2024, $1.32 billion in 2023, and $896.7 million in 2022.
$250 million – Landsheft, et al. v. Apple Inc., Case No. 25-CV-2668 (N.D. Cal. May 5, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that Apple misled millions of iPhone buyers by falsely touting artificial intelligence capabilities for its Siri voice assistant in 2024).
$135 million – Taylor, et al. v. Google LLC, Case No. 20-CV-7956 (N.D. Cal. Jan. 27, 2026) (preliminary settlement approval sought in a class action class action alleging Google illegally consumes the cellular data consumers have purchased from their cellular providers).
$115 million – Katz-Lacabe, et al. v. Oracle America Inc., No. 24-7648 (9th Cir. Feb. 13, 2026) (final settlement approval affirmed in a privacy lawsuit over the defendant’s online data-collection practices despite the objections of one class member).
$68 million – In Re Google Assistant Privacy Litigation, Case No. 19-CV-4286 (N.D. Cal. Mar. 19, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that Google eavesdropped on and recorded confidential communications without user consent).
$56 million – Frasco, et al. v. Flo Health Inc., Case No. 21-CV-757 (N.D. Cal. Apr. 22, 2026) (preliminary settlement approval granted in a class action to resolve from Flo users who alleged Google illegally intercepted the private menstrual health data of millions of users without their consent).
Top Products Liability And Mass Tort Class Action Settlements In 2026
The top 10 products liability / mass tort class action settlements totaled $17.9 billion in 2025, $23.40 billion in 2024, $25.83 billion in 2023, and $50.32 billion in 2022.
$7.25 billion – King, et al. v. Monsanto Co., Case No. 2622-CC00325 (Mo. Cir. Ct. Mar. 4, 2026) (preliminary settlement approval granted to resolve current and future claims across the U.S. that weed killer Roundup causes non-Hodgkin lymphoma).
$773 million – In Re National Prescription Opiate Litigation, Case No. 17-MD-2804 (N.D. Ohio Apr. 14, 2026) (Albertsons Cos. Inc. and the attorneys general of California, Colorado, Illinois, and Oregon agreed to a settlement in principle to end claims brought by states, local governments, and Native American tribes over its role in the opioid crisis).
$318 million – In Re 650 Fifth Avenue and Related Properties, Case No. 08-CV-10934 (S.D.N.Y. Mar. 23, 2026) (settlement approval granted in a class action to resolve claims stemming from the federal government’s forfeiture action against a 36-story Midtown Manhattan office tower linked to the Iranian government).
$180 million – The Diocese of Camden, New Jersey, Case No. 20-BK-21257 (D.N.J. Bank. Ct. Feb. 17, 2026) (settlement reached pending approval by the bankruptcy court in a class action to resolve a dispute arising from claims of sexual abuse by members of the Diocesan clergy).
$88.5 million – In Re National Prescription Opiate Litigation, Case No.17-MD-2804 (N.D. Ohio Jan. 29, 2026) (final settlement agreement granted with Amneal Pharmaceuticals and several states to resolve litigation over its role in creating and fueling the opioid overdose epidemic).
Top Securities Fraud Class Action Settlements In 2026
The top 10 securities fraud class action settlements totaled $3.45 billion in 2025, $2.55 billion in 2024, $5.4 billion in 2023, and $3.25 billion in 2022.
$740 million – In Re Didi Global Securities Litigation, Case No. 21-CV-5807 (S.D.N.Y. June 16, 2026) (final settlement approval granted in a class action to resolve claims by investors alleging that defendants violated the federal securities laws by making false and misleading statements and omissions in the Registration Statement and engaged in deceptive conduct in connection with DiDi’s June 30, 2021 Initial Public Offering (IPO).
$500 million – Sjunde AP-Fonden, et al. v. The Goldman Sachs Group Inc., Case No. 18-CV-12084 (S.D.N.Y. May 20, 2026) (settlement reached in a class action brought by investors who asserted that they lost money after it came to light that the company was allegedly involved in a bribery scandal tied to Malaysia’s sovereign wealth fund).
$250 million – Crews, Jr., et al. v. Rivian Automotive, Inc., Case No. 22-CV-1524 (C.D. Cal. May 20, 2026) (final settlement approval granted in a class action to resolve claims from investors alleging that the company misled investors in connection with its Initial Public Offering).
$250 million – Sjunde AP-Fonden, et al. v. Activision Blizzard Inc., Case No. 2022-1001 (Del. Chanc. Ct. May 22, 2026) (settlement reached with Microsoft Corp. to end shareholder litigation over its $75.4 billion acquisition of Activision Blizzard Inc.
$239 million – In Re Celgene Corp. Securities Litigation, Case No. 18-CV-4772 (D.N.J. May 8, 2026) (final settlement approval granted in a class action to resolve claims alleging that the Celgene and two of its former officers violated the federal securities laws by making material misrepresentations and omissions during the regarding certain Celgene products and product candidates).
Top TCPA Class Action Settlements In 2026
The top 10 TCPA class action settlements totaled $69.1 million in 2025, $84.73 million in 2024, $103.45 million in 2023, and $134.13 million in 2022.
$28 million – Campbell, et al. v. Sirius XM Radio Inc., Case No. 22-CV-2261 (C.D. Ill. May 11, 2026) (final settlement approval granted in a class action to resolve claims alleging that Sirius XM made telephone calls to persons registered on the National Do Not Call Registry or Sirius XM’s Internal Do Not Call Registry).
$10.5 million – Fried, et al. v. Kaiser Foundation Health Plan, Inc., d/b/a Kaiser Permanente, Case No. 2025-016220-CA-01 (Cal. Super. Ct. Jan. 28, 2026) (final settlement approval granted in a class action to resolve claims from class members who alleging they received text messages sent by or on behalf of Kaiser after the person communicated that they did not wish to receive text messages by replying to the messages with a “stop” or similar opt-out instruction, in alleged violation of the TCPA and the Florida Telephone Solicitation Act (FTSA).
$9.95 million – Jackson, et al. v. Gen Digital Inc., Case No. 25-CV-535 (D. Ariz. Jan. 28, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the cybersecurity software company wrongfully placed prerecorded telephone calls regarding a LifeLock or Norton account to consumers who did not have an account with either company, or Gen Digital, in violation of the Telephone Consumer Protection Act).
$6.5 million – Walston, et al. v. National Retail Solutions, Inc. d/b/a NRS Pay, Case No. 24-CV-083 (Ill. Cir. Ct. Jan. 14, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the defendant placed prerecorded telemarketing telephone calls to cellular telephone numbers to individuals who did not give their prior express written consent in violation of the Telephone Consumer Protection Act).
$5.975 million – Ryan, et al. v. Wilshire Law Firm, P.L.C., Case No. 2025-022621 (Fla. Cir. Ct. June 3, 2026) (final settlement approval granted in a class action to resolve claims alleging that the defendant violated the TCPA by sending pre-recorded messages to cellular telephone numbers).
By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo
Duane Morris Takeaways: On June 24, 2026, in Hossfeld v. Allstate Insurance Co., No. 25-1518, 2026 WL 1815908 (7th Cir. June 24, 2026), Judge Amy St. Eve, writing for the U.S. Court of Appeals for the Seventh Circuit, reversed a summary judgment ruling in a class action against Allstate Insurance Co. (“Allstate”) and held that the plaintiff failed to establish vicarious Telephone Consumer Protection Act (“TCPA”) liability for calls placed by a subcontracted telemarketer. The decision is a significant win for companies in the lead generation space and forces plaintiffs to prove downstream agency for the calls at issue.
Case Background
Allstate sells car insurance policies nationwide. To make these sales, Allstate works with insurance agents to help sell its policies. In this case, Allstate contracted with two insurance agents, Jason Fleming and Daniel Gilmond. Fleming and Daniels signed contracts, which authorized them to work with “Non‑Contracted Telemarketers,” who do not contract directly with Allstate. Id. at *2. The “Non‑Contracted Telemarketers,” however, were required to comply with Allstate’s do-not-call policies. Id.
In 2020, Fleming and Daniels retained a “Non‑Contracted Telemarketer,” called Transfer Kings, to attempt to sell Allstate policies to interested consumers. Id. But, without informing Allstate or the agents, Transfer Kings subcontracted its duty to a third company, called Atlantic, which actually placed the calls. Atlantic bought “lead” lists from a fourth company, KP Leads, which represented that the list of consumers had consented to the calls. One lead was Plaintiff Robert Hossfeld (“Hossfeld”) who had been on Allstate’s internal do-not-call registry since July 10, 2020.
In reliance on the “lead” list from KP Leads, Atlantic made twelve calls to Hossfeld, between November 2020 and February 2021, and tried to sell him Allstate insurance policies. As a result, Hossfeld sued Allstate under 47 U.S.C. §227(c)(5) of the TCPA and its internal do‑not‑call regulations under 47 C.F.R. §64.1200(d). Ultimately, Hossfeld moved for class certification and summary judgment, whereas Allstate moved for summary judgment. The district court denied class certification, but granted summary judgment for Hossfeld, holding that Allstate was vicariously liable for the calls in question. Allstate appealed the summary judgment ruling, and Hossfeld appealed the denial of class certification.
The Seventh Circuit’s Ruling
Judge St. Eve, writing for the Seventh Circuit, reversed the district court’s summary judgment holding and found that Hossfeld failed to create a genuine issue of material fact as to whether Allstate was liable for Atlantic’s calls under any agency theory.
First, Judge St. Eve reasoned that in order to impute Atlantic’s conduct to Allstate, Atlantic must be Allstate’s “subagent.” She reasoned that “subagency” exists when “a principal . . . authorize[s] its agent to appoint an additional party to perform some of the tasks the principal delegated to the agent.” Hossfeld, 2026 WL 1815908, at *4. If authorized, subagents may appoint additional subagents. Id. “But for this to occur, there must be appointing authority at each level to support an agency relationship between each subagent and the principal.” Id. Here, there was no evidence Allstate ever communicated with Transfer Kings before it hired Atlantic or even knew Transfer Kings existed before the lawsuit was filed. Allstate, therefore, did not delegate any agency decisions to Transfer Kings or authorize the hiring of additional subagents. Simply put, Fleming and Daniels likely had the authority to hire Transfer Kings on Allstate’s behalf, but Transfer Kings did not have the authority to hire Atlantic and claim that the decision should be imputed to Allstate.
Second, Judge St. Eve reasoned that Hossfeld’s second argument, i.e., that Transfer Kings had apparent authority to hire Atlantic, also failed. Apparent authority must be created by the principal’s words or conduct toward the plaintiff. In this case, Allstate was the principal. Thus, because Hossfeld offered no evidence that Allstate ever represented to him that Atlantic was its agent, or otherwise interacted with him, Hossfeld could not establish that Allstate vested Atlantic with apparent authority.
Third, Hossfeld’s last argument that “Allstate ratified Atlantic’s calls to him by accepting benefits arising from the non-compliant calls” also failed. Id. at *7. Hossfeld’s ratification theory would have required him to show Allstate knowingly accept the benefits of an unauthorized act. But “Hossfeld admit[ed] he never obtained insurance or any other services from Allstate,” and thus Allstate never retained any benefit from Hossfeld specifically. Id. Thus, the Seventh Circuit found that no reasonable jury could find that this conduct rose to the level of ratification.
Fourth, the Seventh Circuit turned to the class certification ruling and affirmed the denial of class certification. Judge St. Eve explained Hossfeld only identified 33 unique telephone numbers on Allstate’s internal do‑not‑call list that Transfer Kings or Atlantic had called as part of the same campaign to sell insurance. The Seventh Circuit has recognized that “a forty-member class is often regarded as sufficient to meet the numerosity requirement.” Id. at *9 (quoting Orr v. Shicker, 953 F.3d 490, 498 (7th Cir. 2020)) But 33 putative class members “easily” falls “below the general forty‑member benchmark.” Id. Thus, because the “only mechanism for disturbing the district court’s class certification ruling is to reverse it if . . . the court abused its discretion,” the Seventh Circuit was left with no choice but to affirm.
Implications For Companies
Hossfeld is a powerful and practical decision for companies that use telemarketing vendors, such as lead generators. Because plaintiffs must show actual or apparent authority at each level of delegation to prevail on a subagency theory, corporate counsel should ensure that multiple levels of delegation are not authorized by their companies’ vendor agreements. This prophylactic measure is the type of “easy fix” which will prevent massive class action lawsuits down the line.
Corporate counsel should also ensure that their vendor agreements require outside vendors, or lead generators, to comply with existing TCPA policies to minimize any risk that the principal should be liable for its agents’ (or subagents’) failure to follow applicable law. TCPA class actions can be devastating for an organization, and front-end compliance goes a long way.
By Gerald L. Maatman, Jr., Jennifer A. Riley, Gregory Tsonis, and George J. Schaller
Duane Morris Takeaways: On May 27, 2026, in Sanchez, v. El Milagro, Inc., 2026 U.S. App. LEXIS 14984 (7th Cir. May 26, 2026), the Seventh Circuit issued an opinion that affirmed a district court’s decision granting summary judgment in favor of tortilla manufacturer El Milagro, Inc. (“El Milagro”) for claims of sexual harassment in the workplace in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”) and the Illinois Human Rights Act (“IHRA”).
The opinion fully vindicated the Company’s defenses, and clarifies that a prompt and thorough investigation coupled with appropriate action to bring harassment to an end are crucial to avoid liability under sexual harassment law.
Background
In 2022, Plaintiff Alma Sanchez filed a Class Action Complaint against her employer, El Milagro, Inc. (“El Milagro”), a tortilla manufacturer and distributor of tortilla products, alleging a sexually hostile work environment in violation of the IHRA and, subsequently, Title VII.
Plaintiff alleged she joined El Milagro in July 2019. Plaintiff claimed that in 2020, co-worker Francisco Gutierrez sexually harassed her by “inappropriately touching her three times,” although the Seventh Circuit’s opinion noted that Plaintiff’s version of events changed in numerous ways over time. Id.
According to the subsequent statement to Human Resources that Plaintiff submitted after the third alleged incident, Gutierrez “inappropriately touched [Plaintiff] first in October or November 2019, then in March 2020, and finally in August 2020.” Id. *4-5. Her Complaint, however, alleged that “Gutierrez touched her first in May or June 2020, then in July 2020, and finally in August 2020.” Id. *5.
As to her first alleged incident of harassment, Plaintiff’s Complaint asserted that Gutierrez “intentionally ‘rubbed his genitals’ against her buttocks as he passed her on the production line and then continued to walk away.” Id. In her deposition, however, Plaintiff testified that “she believe[d] Gutierrez purposefully touched her because ‘there were many ways for him to pass through without touching [her],” that he did not “touch her for long because ‘he made it look like he was passing by,’” and when she felt the contact and turned around “[h]e had already passed.” Id. In her later statement to Human Resources, Plaintiff wrote that Gutierrez “said sorry” but at her deposition, she testified that Gutierrez “turned around and stare[d] at me like watching and saying ‘oops.’” Id. *5-6.
Plaintiff alleged she verbally reported this incident two hours later to Supervisor Arturo Brito, which Brito denied. Id. *6. In her HR statement, Plaintiff “stated that although she mentioned this incident to Brito, she did not tell him Gutierrez’s name.” At her deposition, however, Plaintiff claimed that “she ‘specifically told Brito that Mr. Gutierrez had rubbed his genitals on my buttocks’” but, when asked outright, she “agreed that she did not share Gutierrez’s name with [the supervisor] when she reported the first incident.” Id. No Human Resources report was made about this incident at the time.
Plaintiff also asserted Gutierrez “sexually harassed her for the second time in July 2020” and claimed that he “groped her buttock with his hand.” Id. *6-7. Plaintiff contradicted herself about whether and when she reported this incident. In her HR statement, she wrote that she “could not have reported the incident because the factory had been permanently shut down because of the pandemic, but later claimed in the lawsuit that she did report the harassment to Brito the day after it happened. Id. *7. Plaintiff alleged that she informed Brito about this incident, but no complaint about this alleged incident was sent to El Milagro’s Human Resources department. Id.
The third incident occurred on August 29, 2020, and Plaintiff contended that “Gutierrez touched her buttocks for ‘a short time,’ or ‘a few seconds’ while she was stooping down to put down boxes that she was holding.” Id. In her written statement to HR, Plaintiff claimed that “Gutierrez touched her buttocks with one hand” but asserted during the lawsuit that “Gutierrez groped her with both hands when she bent over to put down a box that she was carrying.” Id.
After reporting the third incident to Brito, Plaintiff submitted a written statement to Human Resources describing the three incidents. Gutierrez’s statement claimed he accidentally touched Plaintiff while packing tortillas and apologized. Id. Plaintiff later testified that she “had not seen anyone else experience sexually harassing conduct at any time during her employment at El Milagro.” Id. Plaintiff also alleged subsequent verbal harassment by other coworkers, but Plaintiff did not tell Brito or El Milagro’s HR the names of those individuals. Id. *9.
The district court granted El Milagro summary judgment on Plaintiff’s claims. It also ruled that Plaintiffs’ class action claims could not be certified. Plaintiff appealed the district court’s decision on her individual claim to the Seventh Circuit.
The Seventh Circuit’s Opinion
The Seventh Circuit, in an opinion written by Judge Kenneth F. Ripple, affirmed the district court’s decision granting summary judgment in favor of El Milagro and fully vindicated its position.
As to the controlling legal standard, the Seventh Circuit first concluded that while Title VII and the IHRA do not contain identical language, “both this court and Illinois state courts consistently state that the analytical standards are the same.” Id. *9. Thus, “[t]o constitute actionable sexual harassment, the activity ‘must be sufficiently severe or pervasive to alter the conditions of the [the victim’s] employment and create an abusive working environment.” Id. *10. While noting that “physical acts are considered ‘more severe than harassing comments alone,’” the Court also noted that “physical harassment lies along a continuum just as verbal harassment does.” Id. *12.
Turning to the merits, the Seventh Circuit noted an employer is liable under the IHRA and Title VII “only if it was negligent in controlling working conditions.” To prove such negligence, the Seventh Circuit explained Plaintiff must establish two points: (1) that El Milagro had “notice or knowledge of the harassment,” and (2) that El Milagro “did not take ‘prompt and appropriate corrective action reasonably likely to prevent harassment from recurring.” Id. *16.
Assuming that Plaintiff reported the first two incidents to Brito, as she claimed, the Seventh Circuit concluded that Plaintiff could not establish El Milagro’s knowledge of the first two incidents of alleged harassment. Based on the record evidence, the Court reasoned that “what she told Brito led him to believe that she was complaining of accidental touching that happened because the production lines on which she and Gutierrez worked had close quarters.” Id. at *21. As a result, the Seventh Circuit concluded that “[w]e do not believe that a reasonable jury could conclude from [Plaintiff’s] deposition testimony, or any other evidence in the record related to her reporting of the first two incidents, that she gave Brito ‘enough information to make a reasonable employer think that there was some probability that she was being sexually harassed.’” Id. *20-21.
As to the third incident, all three judges agreed that investigation and corrective measures taken by El Milagro’s Human Resources department were sufficient. The Seventh Circuit noted that “[a]n HR employee interviewed [Plaintiff] and Gutierrez separately,” “HR concluded that the events described by [Plaintiff] could not be substantiated,” and that El Milagro “provided [Plaintiff] with a letter, dated September 16, informing her that the case was closed and that it had told Gutierrez, in a ‘call of attention’ letter, to immediately change his behavior toward her.” Id. *21-22. The Seventh Circuit also determined that “[a]lthough El Milagro did not interview any witnesses, [Plaintiff] did not identify any.” Id. *22.
Thus, the Seventh Circuit concluded that the “prompt investigation” was “the hallmark of a reasonable corrective action” (id.) and that “El Milagro’s investigation shows that it ‘took the harassment seriously and took appropriate steps to bring the harassment to an end.’ . . . [i]t had in place a viable and appropriate mechanism for reporting the misbehavior.” Id. A jury could not reasonably conclude, the Seventh Circuit held, that “El Milagro was negligent in fulfilling its responsibilities in responding to the situation.” Id.
Finally, as to alleged verbal harassment that occurred after HR investigated, the Seventh Circuit concluded that Plaintiff “did not report to anyone the names of the people who made the harassing comments that she overheard after the investigation concluded so El Milagro could not investigate them.” Id.
Accordingly, the Seventh Circuit affirmed the judgment of the district court.
Implications For Employers
The Seventh Circuit’s opinion clarifies what constitutes proper notice in alleged incidents of sexual harassment and reasonable corrective measures taken when an employer is properly on notice, including prompt investigations to bring alleged harassment to an end.
Employers should evaluate their sexual harassment policies and practices to ensure that reporting mechanisms, documentation, and investigation process are sound and that reports of harassment are communicated promptly to those responsible for investigating them. A thorough investigation and quick implementation of reasonable corrective measures can often insulate employers from liability under either Title VII or the IHRA.
By Gerald L. Maatman, Jr., Jennifer A. Riley, Jamar D. Davis, and Kenny Tran
Duane Morris Takeaways: On June 1, 2026, in Andrew Harrington et al. v. Cracker Barrel Country Store Inc., No. 21-CV-000940, 2026 WL 1532921 (D. Ariz. June 1, 2026), Judge Diane J. Humetewa of the U.S. District Court for the District of Arizona, reaffirmed the Ninth Circuit’s determination that 28 U.S.C. section 1631 does apply to personal jurisdiction issues.
The ruling serves as a blueprint for corporate counsel on jurisdictional defenses in nationwide wage & hour lawsuits
Case Background
Plaintiffs, former Cracker Barrel employees, brought an FLSA collective action seeking redress for alleged failure to pay proper wages. Id. at *1. Cracker Barrel filed a Motion to Dismiss due to the existence of a valid arbitration agreement. Id. A subset of the Plaintiffs who did not continue with arbitration refused to relent, filing a First Amended Complaint asserting that that their signed arbitration agreements were invalid because the Plaintiffs were minors when they signed the agreements. Id. Again, Cracker Barrel filed a Motion to Dismiss contending that the Court lacked personal jurisdiction as none of the named Plaintiffs were from Arizona or worked in Cracker Barrel Arizona stores. Id. The Court subsequently granted Cracker Barrel’s second Motion to Dismiss for lack of personal jurisdiction. Id. Remaining steadfast, the Plaintiffs filed a Second Amended Complaint adding an Arizona Cracker Barrel employee as a plaintiff. Id. In denying Cracker Barrel’s third Motion to Dismiss, the Court held that the addition of the Arizona Cracker Barrel employee cured the jurisdictional defect. Id.
Following the grant of conditional certification, Cracker Barrel filed a Motion to Certify an Interlocutory Appeal. Id. The Court certified for appeal two questions, including, “[w]hether Bristol-Myers Squibb Co. v. Superior Ct. of California, San Francisco Cnty., 582 U.S. 255, 265 (2017), prevents a District Court from sending notice under Section 216(b) of the FLSA to individuals over whom the Court lacks specific personal jurisdiction.” Id. The Ninth Circuit answered in the affirmative and held that “Bristol-Myers applies in collective actions under the FLSA and to that end, specific personal jurisdiction must be analyzed for every individual plaintiff proceeding under the collective action.” Id. In real word application, this meant that the Plaintiffs attempt to cure their Second Amended Complaint by adding an Arizona Cracker Barrel employee was ineffective as specific personal jurisdiction must be satisfied for all Plaintiffs in the collective action. Id. In other words, the Ninth Circuit determined that the District Court lacked personal jurisdiction over the non-Arizona Plaintiffs. Id. at *3.
In response, Plaintiffs filed a Motion to Sever and Transfer Non-Arizona Plaintiffs to the U.S. District Court for the District Court of Massachusetts. Id. at *1.
The Court’s Decision
Plaintiffs cited three statues, 28 U.S.C. Sections 1404, 1406, and 1631, to advance their motion. Id. at *2. The Court found that Section 1404 did not apply to Plaintiffs’ Motion. Id. The Court also clarified that Section 1406 did not apply to Plaintiffs’ Motion as the statute is appropriate when making an attempt to transfer a case if the initial court is not in the proper venue. Id. The Court noted that that venue “is not a jurisdiction component” and that Section 1406 is only proper if the defendant moved to dismiss (or transfer) for improper venue. Id.
The Court observed that Section 1631 did not apply to Plaintiffs’ Motion as it “is used specifically to cure deficiencies in jurisdiction.” Id. The statute, however, hinges on a “want of jurisdiction.” 28 U.S.C. § 1631. All circuits agree that “want of jurisdiction” applies to subject matter jurisdiction; however, there is a circuit split on whether the term applies to personal jurisdiction. Harrington, 2026 2026 WL 1532921, at *2. The Ninth Circuit typically finds that Section 1631 applies to personal jurisdiction. Id.
In the end, the Court made the decision to sever the non-Arizona plaintiffs and transfer their claims to the District Court of Massachusetts because there was a “want of jurisdiction” for the non-Arizona plaintiffs and because the legislative history, plain text, and the Ninth Circuit’s interpretation of Section 1631 (that the statute applies to personal jurisdiction) allowed for the transfer. Id. at 3.
Implications For Employers
Employers should remain diligent to confirm that personal jurisdiction applies for each plaintiff proceeding under a collective action. This is because attempts by the plaintiff’s bar to retain jurisdiction with the addition of a single plaintiff who is a resident of the location for the presiding court are futile. Further, this decision reaffirms the application of the Ninth Circuit’s reading of Section 1631 — namely, that “want of jurisdiction” applies to personal jurisdiction issues. Companies defending nationwide wage and hour actions should closely evaluate whether transfer motions can be used strategically when personal jurisdiction defects exist, especially in cases involving large groups of opt-in plaintiffs from multiple states.
By Gerald L. Maatman, Jr., Jennifer A. Riley, Katherine L. Alphonso, and Jamar D. Davis
Duane Morris Takeaways: On May 28, 2026, in Ashley Schroeder et al. v. University of Oregon, Case No. 6:23-CV-01806, 2026 WL 1494043 (D. Or. May 28, 2026), Judge Michael J. McShane of the U.S. District Court for the District of Oregon – without deciding whether the University of Oregon adequately supports or invests in women athletics – reaffirmed that the typicality requirement for class certification cannot be met when “there is a danger that absent class members will suffer if their representative is preoccupied” with its own unique defenses. The ruling is a significant one for corporate counsel and provides a blueprint for defense of class action claims.
Case Background
In the 2000s, particularly at the collegiate level and among Division 1 institutions in warm-weather conferences, beach volleyball was a rapidly growing sport. Id. at *2. In 2009, the National Collegiate Athletic Association (“NCAA”), under its Emerging Sports for Women program, designated women’s beach volleyball an “emerging sport” for women. Id. Notably, the NCAA Emerging Sports for Women program was designed to encourage schools to create more opportunities for women’s athletic participation to meet the requirements of Title IX of the Education Amendment of 1972 (“Title IX”). Id.
As a state educational institution, the University of Oregon (the “University”) receives federal funds and is therefore subject to Title IX requirements. Id. at *1. In 2013, the University’s athletic department announced the addition of women’s volleyball to its roster of varsity teams. Id. at *2. Since its announcement, the University has worked to approve new beach volleyball facilities, provide locker rooms, make scholarships available for recruitment, and hire a new coach. Id. It currently sponsors eight men’s varsity teams (baseball, basketball, cross country, football, golf, tennis, indoor track and field, and outdoor track and field) and twelve women’s varsity teams (acrobatics and tumbling, basketball, beach volleyball, cross country, golf, lacrosse, soccer, softball, tennis, indoor track and field, outdoor track and field, and (indoor) volleyball). Id. at *1. The University also hosts forty-one club sports teams, including but not limited to rowing, which operate outside of the school’s athletic department and are generally student organized. Id. at *1-2.
Plaintiffs — consisting of female student athletes attending the University, five of which are current or former members of the women’s beach volley team (“Beach Volleyball Plaintiffs”) and four of which are current or former members of the women’s club rowing team (“Rowing Plaintiffs”) — filed a complaint alleging the University continues to violate Title IX by depriving its female student-athletes of equal treatment, equal access to athletic financial aid permissible under federal law, and equal opportunities to participate in varsity athletics. Id. at *1.
In pursuit of their claims, Plaintiffs asked the Court to certify the following classes: (1) Equal Treatment and Benefits Class defined as “all current and future female students who participate or will participate in intercollegiate varsity athletics at [the University]”; (2) Damages Class for the Equal Treatment and Benefits claim; (3) Equal Financial Aid Class defined as “all current and future female students who participate or will participate in intercollegiate varsity athletics at [the University] and do not receive all athletic financial aid permissible under federal law”; (4) Damages Class for the Equal Financial Aid claim; and (5) Effective Accommodation Class defined as “all present and future female students at [the University] who are being deprived of the opportunity to participate on women’s varsity intercollegiate athletic teams.” Id. at *3-4.
The District Court’s Decision
Judge McShane denied class certification for four of the five requested classes, namely the Equal Treatment and Benefits Class, both Damages Classes, and the Effective Accommodation Class. Id. at *5-8. The Court stayed its class certification consideration as to the Equal Financial Aid Class pending final disposition of the underlying claim on its merits. Id. at *4-5.
With regards to the Equal Treatment and Benefits Class, the Court held Federal Rule of Civil Procedure 23(a)’s typicality requirement ultimately prevented certification of the class. Id. at *6. While factual variations between a named plaintiff and proposed class members do not per se defeat typicality, typicality cannot be met when “there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.” Id. at *6 (internal citation omitted).
Here, rather than discussing all purported class members, Plaintiffs focused almost exclusively on the unique experiences of the Beach Volleyball Plaintiffs. Id. For example, unlike most of the other women’s varsity teams, the beach volleyball team practiced and competed off campus; until September 2025, the beach volleyball team was the only varsity team without its own locker room; and the beach volleyball team was the only varsity team without a dedicated full-time head coach who was not also coaching another team. Id. Moreover, the Beach Volleyball Plaintiffs “would need to address whether their participation in an ‘emerging’ varsity sport influences the merits of their Title IX claim.” Id. The Court expressed concern that addressing the unique experiences of the Beach Volleyball Plaintiffs would steal the focus of the litigation, creating an impermissible danger to absent class members. Id.
With regards to the two Damages Classes, the Court held a class action is not a superior method to litigate Plaintiffs’ damages claims because there are “too many distinct individual determinations that frustrate [class action] manageability. Id. at *7; see Fed. Rule of Civ. Prod. 23(b)(3). Again, the atypical experiences of the Beach Volleyball Plaintiffs would require individualized inquiry into any alleged liabilities and/or applicable remedies. Id. In addition, individualized inquiries would be needed “to determine which student-athletes were eligible for various forms of financial aid and the amount of aid they hypothetically would have received.” Id. This is only further complicated by “the University’s policy of allocating financial aid on a team-by-team basis and allowing coaches to make discretionary awards to student-athletes,” resulting in a requisite analysis into which student-athletes may have been eligible for aid but were not necessarily awarded scholarships because of other individualized considerations. Id.
With regards to the Effective Accommodation Class, the Court held the Rowing Plaintiffs were not members of the proposed class because they failed to demonstrate “they have the abilities to participate in varsity athletics . . . ” as their rowing times were markedly lower than the worst performing Division 1 rowing teams. Id. at *8 (emphasis in original). As such, Rowing Plaintiffs cannot be deprived of the opportunity to participate in varsity athletics. Id. Moreover, the Rowing Plaintiffs’ “inability to compete on a varsity level subjects them to a unique defense that defeats typicality.” Id. As mentioned above, rowing was a club sport operating outside of the school’s athletic department.
An interesting focus in the Court’s ruling was its dicta regarding the “proverbial elephant in the Title IX room” — men’s college football. Id. at *2. The Court reasoned that college football has evolved into a highly commercialized enterprise requiring investments—“extensive game-day operations and security; expansive locker room and training facilities; specialized coaching staffs numbering in the dozens; strength and conditioning programs; sports medicine and physical therapy personnel; recruiting operations; charter travel; housing and meal programs; academic tutoring; scholarships; and year-round training infrastructure” — comparative to the scale of its revenue. Id. at *2-3. Specifically, Title IX compliance cannot be measured solely on a dollar-for-dollar basis and must be “viewed across the athletic program as a whole.” Id. at *3.
Implications For Universities And Other Title IX Institutions
The Court’s message to the defense bar here is clear: continue to distinguish the named plaintiffs from the proposed class members (through factual distinctions, discrete issues, shortcomings on judicial efficiency, and unique defenses) as much as possible to oppose class certification. The opinion also provides helpful insight into how the statutory and regulatory framework of Title IX permits disparate expenditures among varying collegiate sports (namely men’s football when compared to other sports), serving as a defense into the extraordinary institutional investments associated with men’s college football that does not run counter to the aims of Title IX.
By Gerald L. Maatman, Jr., Jennifer A. Riley, Eden Anderson, Rebecca Bjork, Ryan T. Garippo, and Olga A. Romadin
Duane Morris Takeaways: On May 28, 2026, in Flowers Foods, Inc. v. Brock, 2026 WL 1485669 (U.S. May 28, 2026), and in a much-anticipated ruling following a grant of certiorari from the 10th Circuit’s decision in Brock v. Flowers Foods, Inc., 121 F. 4th 753 (10th Cir. 2024), Justice Neil Gorsuch authored a unanimous opinion for the U.S. Supreme Court that affirmed the applicability of the Federal Arbitration Act (the “FAA”) transportation worker exemption for “last-mile” delivery drivers. Today’s opinion builds on the Supreme Court’s prior decisions in Southwest Airlines Company v. Saxon, 596 U.S. 450 (2022), and Bissonnette v. LePage Bakeries Park Street, LLC, 601 U.S. 246 (2024, to expand the FAA exemption for transportation workers seeking to bypass arbitration. The decision has significant implications for companies who employ delivery drivers and the logistics industry generally, and will play an important factor in re-shaping the arena of class and collective action litigation.
Case Background
Angelo Brock, a Denver-based delivery franchisee who had purchased distribution rights to baked goods produced by Flowers Foods, Inc. (known as a “last-mile” delivery driver), brought a putative class and collective action in a Colorado federal district court alleging that Flowers Foods had underpaid its franchisees in violation of the Fair Labor Standards Act (“FLSA”) and state laws. Id. at *2. “Brock picks up [Flowers Foods’] products from a warehouse in Colorado and delivers them to local stores, all without leaving the State.” Id. He also signed an arbitration agreement. Id. As a result, Flowers Foods filed a motion to compel arbitration under the terms of the agreement that it entered into with its franchisees, which the district court denied, citing 9 U.S.C. § 1., which exempts workers engaged in interstate commerce, and is commonly known as the FAA’s transportation worker exemption. Id.
In denying Flowers Foods’ motion, the district court concluded that Brock fell within the ‘‘transportation worker exemption” of § 1 of the FAA, which exempts transportation workers who engaged in interstate commerce from arbitration. Thus, even though Brock did not cross state lines, the district court reasoned that he had engaged in the transportation of the company’s products – which were created outside of the state – because he delivered those products in Colorado. Id. As a result, the district court declined to compel arbitration. Id.
Following an appeal of that decision by Flowers Foods, which argued that a worker who does not leave the state, like Brock, does not qualify for the exemption, the 10th Circuit affirmed the district court’s decision based on its determination that Brock’s “intrastate route formed a constituent part of the . . . interstate journey” of the cross-border delivery of Flowers Foods’s products. Id. Flowers Foods then sought review from the U.S. Supreme Court.
The U.S. Supreme Court granted Flowers Foods’ petition for writ of certiorari and sought to answer the question of whether a worker can fall under the “transportation worker exemption” for interstate workers under § 1 of the FAA if they neither cross state lines nor interact with vehicles that do. Id. at *3.
The Supreme Court Decision
In a unanimous decision, Justice Neil M. Gorsuch authored the 8-page opinion of the U.S. Supreme Court that affirmed the 10th Circuit’s ruling and held that “transportation workers” are exempt from the reach of the FAA, citing the statutory text, historical use, and U.S. Supreme Court precedent.
The Supreme Court cited its three recent decisions addressing § 1 of the FAA, including New Prime Inc. v. Oliveira, 586 U.S. 105 (2019), Southwest Airlines Company v. Saxon, 596 U.S. 450 (2022), and Bissonnette v. LePage Bakeries Park Street., LLC, 601 U.S. 246 (2024), to reject Flowers Food’s argument that in order to qualify for the exemption, a worker must cross state lines or engage with a vehicle that does. Id. Based on the statutory text, the Supreme Court found nothing in the language of the FAA requiring crossing state lines or interacting with a vehicle that does so. Under the definition for “interstate commerce” provided by Black’s Law Dictionary, the Supreme Court further noted, the transportation of goods between states includes intrastate activity. Id.
The Supreme Court also cited historic use of “interstate commerce” by referencing case law from the 19th and early 20th centuries, including discussing a case concerning steamship transportation of goods called The Daniel Ball, 10 Wall. 557 (1871), where the Supreme Court had found that a steamer that operated in one state without direct contact with other vessels transporting the goods into other states was found to engage in interstate transportation because the goods were destined for other states. Id. at *4.
Further, the Supreme Court rejected Flowers Foods’ argument that prior precedent was erroneously based on the U.S. Constitution’s Commerce Clause, and not the FAA. The Supreme Court noted that the similarity in the language between the Clause and § 1 were “probative” of the common conception of the meaning of the term used by both at the time that the FAA was enacted. Id.
Finally, the Supreme Court declined to find that the distribution agreement between Flowers Foods and Brock was relevant to the analysis. The Supreme Court did not find any significance to the fact that the agreement was signed by Brock’s independent company, and thus affirmed the judgment of the 10th Circuit by expanding the transportation worker exemption to individuals who do not travel to other states or come into contact with vehicles that do. Id. at *5.
Implications For Employers
As we predicted in a previous post in October 2025 (here – blog post), the Supreme Court’s decision is highly significant for logistics companies and deliver driver employees. This decision further expands the “transportation worker exemption” to make it much more difficult for employers to compel arbitration in class and collective actions brought by workers in transportation and transportation-adjacent positions. The U.S. Supreme Court’s decision, which was designed to prevent an analysis that hinges on “game of tag” with vehicles engaged interstate commerce, now has the potential to sweep in a wide variety of workers whose conduct is only tangentially related to movement of a company’s products across state lines.
Despite this blow to employers’ arbitration defenses, there are still some arguments for companies to assert in order to maintain their arbitration programs. By its own terms, the Supreme Court’s opinion is limited to whether § 1 requires a bright line rule that workers who “never cross[] state lines and never interact[] with vehicles that do” are outside of the FAA exemption and does not opine on whether a worker could be so attenuated from interstate commerce that they fall outside the scope of the exemption. Further, some arbitration agreements may be enforceable under state law and, therefore, the choice of law provisions in those these agreements will likely be the difference maker in whether a class action will survive a motion to compel arbitration or not. As a result, corporate counsel – particularly in the logistics industry – should follow the developments in this space closely, because their arbitration programs are under siege and a new wave of class actions is likely headed for their organizations.
By Jennifer A. Riley, Greg Tsonis, George J. Schaller, and Ryan T. Garippo
Duane Morris Takeaways:Jennifer A. Riley, Greg Tsonis, George J. Schaller, and Ryan T. Garippo, members of the Duane Morris Class Action Defense Group, recently attended the Beard Group’s Class Action Money & Ethics Conference organized in New York City. The conference, held on May 21, 2026, hosted hundreds of attendees, covered key trends in class action litigation, and honored several attorneys for their accomplishments in the class action industry. Jennifer A. Riley of Duane Morris gave the keynote address, and George J. Schaller and Ryan T. Garippo of Duane Morris received awards for their accomplishments as two of 12 Premier Class Action Lawyers Of Tommorow in the United States.
The Conference
At the Class Action Money & Ethics Conference, the Beard Group, Inc. hosts a gathering of the top class action professionals to discuss the hottest topics in class action and multi-plaintiff litigation, including new filings, pre-trial proceedings, settlements, verdicts, and the latest trends in this area of the law. The Conference featured panelists and attendees who are attorneys on both sides of the bar, judges, as well as other professionals who focus their work on class action litigation.
The Conference features panels that speak on a wide range of topics. These topics included the use of data analytics and artificial intelligence in class action litigation, mass arbitrations, the trends in data breach and consumer protection litigation, environmental class actions, and more.
The State Of The Industry
Jen Riley, Vice Chair of Duane Morris’s Class Action Defense Team, opened the Conference by presenting the ten latest trends in class action and multi-plaintiff litigation in her keynote speech. The presentation is based on the findings from the Duane Morris Class Action Review, which is a “one-of-a-kind” publication, that summarizes class action trends and decisions across substantive areas of law.
As Jen Riley explained, in 2025, class action litigation exploded which led to record-breaking settlement figures by a wide margin. In 2025, the ten largest class action settlements can be aggregated to a total of over $79 billion dollars which were paid from corporate defendants to individuals across the nation. This trend was driven by high class certification rates, high quantities of class action filings, shifts within the substantive claims that plaintiffs are pursuing and several other variables. The net effect of these trends was that the class action mechanism served as an effective tool for the plaintiffs’ bar to redistribute wealth at an unprecedented level.
Jen Riley also discussed the shifting landscape with respect to some of the most cutting-edge defenses to defeating class actions. She discussed the success of corporate defendants in defeating class actions via motions to compel arbitration, and some of the latest case law on arbitrations that is currently being litigated before the U.S. Supreme Court. In addition, she reviewed the ongoing federal appellate circuit split concerning the standards for when to grant conditional certification (if at all) under the Fair Labor Standards Act and the applicability of the personal jurisdiction defense to the claims of individual class and collective action members. Jen Riley, providing the keynote address, is pictured below:
Panels On Class Actions And Related Issues
Following Jen Riley’s keynote address, numerous panels followed on the state of class action litigation across various areas of substantive law. The panels in the morning focused on a wide range of topics. The first panel discussed the use of data analytics in class action litigation, particularly by plaintiffs’ attorneys, to identify potential defendants to sue and then effectively prosecute their clients’ claims after. There were also panelists on securities class actions, which helped explain the role that private plaintiffs’ firms have to play during the Trump administration’s control of the U.S. Securities and Exchange Commission. The morning ended with a discussion of the future of litigation financing and the impact of various state laws on the continued viability of the practice.
The panels in the afternoon focused largely on consumer class actions and again covered many areas of substantive law. The afternoon opened with a lively panel on the current state of mass arbitrations, including a conversation regarding the plaintiffs’ bar’s use of arbitration agreements in their engagement letters, and how it impacts their ability to challenge the viability of arbitration agreements in federal and state courts across the country. There were panels on how the plaintiffs’ bar evaluates claims in data breach cases, as well as the shifting trends in data privacy class actions as a result. These panels were followed by additional discussions on the impact of multi-district litigation, environmental class actions, and a comparative analysis of global class actions which explained the various ways that plaintiffs are seeking to monetize mass torts and other alleged harms outside of Rule 23’s class action mechanism. The afternoon concluded with a panel on the scope of consumer protection class actions, including the cutting-edge theories that plaintiffs are pursuing to advance the law in this space, as well as the challenges in identifying plaintiffs to pursue such claims in light of the Eleventh Circuit’s decision that service payments are per se impermissible in class action settlements.
Premier Class Action Lawyers Of Tommorow Award Ceremony
After the panels concluded, there was a reception which was emceed by the Honorable Kathy King, who is a Justice on the Supreme Court in New York County state court. Justice King gave her concluding remarks on the event and also awarded this year’s Premier Class Action Lawyers Of Tommorow with awards for accomplishments in the class action industry. The award was provided to twelve attorneys, under the age of 40, who are redefining the frontiers of class action litigation through innovative strategies, landmark victories, and unwavering commitment to justice on both sides of the bar.
This year’s award winners included Ryan Garippo and George Schaller, both of Duane Morris, who were honored to accept their awards from Judge King and the Beard Group. George and Ryan are pictured below:
By Gerald L. Maatman, Jr., Jennifer A. Riley, Ryan T. Garippo, and Jamar D. Davis
Duane Morris Takeaways: On May 14, 2026, in J.M. v. Illuminate Education, Inc., No. S286699, 2026 Cal. LEXIS 2657 (May 14, 2026), the California Supreme Court held that the California Court of Appeal decision to deny a demurrer was improper for an incorrect application of privacy laws. This decision emphasizes why defendants should confirm whether a plaintiff sufficiently pled a cause of action that aligns with the remedies that he or she seeks to recover. Further, the opinion clarifies that injury under the Confidentiality of Medical Information Act, Cal. Civ. Code § 56, et seq. (“CMIA”) depends on whether the company subjects medical information to a substantial risk of unauthorized use or access, not whether the unauthorized user actually views sensitive data.
Case Background
Illuminate Education, Inc. (“Illuminate”) is a technology company that helps educators determine the academic progression of an individual student, as well as their areas of potential improvement. The company uses data from individual students, including medical data, to make these determinations. Illuminate provided its services to the Ventura County Office of Education, under which Plaintiff (a minor) was a student. Plaintiff provided his medical information to the Ventura County Office of Education, which then provided Plaintiff’s health data to Illuminate.
In 2022, Illuminate became aware of suspicious activity related to its systems. Illuminate promptly initiated an investigation. The investigation confirmed an unauthorized user gained access to Illuminate’s records, including students’ medical information. Illuminate sent a notice to the guardians of the affected students, including Plaintiff, informing them of the scope of the potential disclosure. The notice made it clear that Illuminate found no evidence that the unauthorized user (or users) was successful in actual or attempted misuse of the data.
After the breach, Plaintiff alleges that he received several mail solicitations at an address provided to only the Ventura County Office of Education. As a result, Plaintiff filed a class action lawsuit alleging that Illuminate, as health care provider, negligently managed the students’ medical records under the CMIA and failed to expediently disclose the data breach to those affected under the Customer Records Act, Cal. Civ. Code § 1798.80, et seq. (“CRA”).
The trial court sustained Illuminate’s demurrer, without leave to amend, after Plaintiff twice failed to cure deficiencies in his pleadings. The Court of Appeal reversed that decision, holding that the trial court abused its discretion by sustaining the demurrer, because Plaintiff may have been able to cure the defects in his complaint if a different legal analysis was applied.
Following that decision, the California Supreme Court set out to resolve the disagreement.
The California Supreme Court’s Decision
The California Supreme Court’s analysis hinges on its statutory interpretation, involving the plain reading of the statutes and their legislative histories. Generally, this analysis fell into three distinct categories.
First, Justice Goodwin Liu, writing for the California Supreme Court, reasoned that Plaintiff failed to establish a valid claim under CMIA because he could not allege that Illuminate was a “provider of health care” under California Civil Code section 56.06. Relying on the text of section 56.06, the Supreme Court explained there are two ways for a business to qualify as a “provider of health care”: (1) a covered business maintains medical records to make the information available to either an individual or a health care provider upon request of the individual or provider; or (2) a covered business makes medical information available for an individual or a health care provider upon request to allow an individual to manage their information, or to help diagnose or treat the individual.
The Supreme Court also confirmed this interpretation by relying on the legislative history of the statutes. The Supreme Court observed that the legislative history confirmed that the legislature was concerned with situations where diabetics used a data platform to record glucose levels, or where people with hypertension used platforms to track their blood pressure. Relying on the legislative history, the Supreme Court observed that Plaintiff never alleged that Illuminate created a repository of student records that allowed the students to create their own records, or to access and share those records at their discretion. Instead, Plaintiff asserted that Illuminate stored medical information to help educators monitor, evaluate, and address student needs. As a result, Illuminate was not a “provider of health care,” because it did not make medical records available upon request of the individual or provider.
The Supreme Court also quickly addressed Plaintiff’s inability to satisfy the alternative method for determining whether Illuminate is a “provider of health care” because Plaintiff never alleged that Illuminate “provides medical information to health care providers or individuals for diagnosis and treatment of an individual.” Illuminate Education, 2026 Cal. LEXIS 2657, at *12. As a result, and after quickly dispensing with a few other arguments, the Supreme Court concluded that Illuminate was not a “provider of health care” under the CMIA.
Second, in addition to analyzing whether Illuminate was a “provider of health care,” the Supreme Court also determined whether Plaintiff had alleged sufficient injury to state a claim under the CMIA. The Supreme Court disagreed with Illuminate’s argument that injury requires an unauthorized person to view medical data, and ruled that a plaintiff alleges injury by claiming that the medical information was exposed to “a significant risk of unauthorized access or use.” Id. at *29.
The CMIA requires covered entities to “preserve[] the confidentiality” of medical information. Cal. Civ. Code § 56.101(a). The Supreme Court stated that “confidentiality” requires “keeping information private or secret” and clarified that this obligation applies regardless of whether an unauthorized party actually views the data. Illuminate Education, 2026 Cal. LEXIS 2657, at *26. (“[W]e reject the rule that no breach of confidentiality has occurred until medical information is actually viewed by an unauthorized person.”). Instead, the determination of whether a covered entity failed to preserve the confidentiality of data depends on a factor-based analysis that considers the “form, duration, and extent of the data breach, as well as any mitigation efforts by the covered entity.” Id. at *30. Thus, a plaintiff need not allege that his or her data was “actually viewed” by a third party, because that person is “unlikely to know what an unauthorized party has done with their data unless they suffer actual damage” and instead “[a]ll relevant circumstances must be considered” when determining whether confidentiality was breached. Id.
Third, for the CRA claim, the Supreme Court ruled that Plaintiff did not state a cause of action against Illuminate because Plaintiff was not a customer within the meaning of the statute. To bring suit under the CRA, a plaintiff must establish that he or she is a “customer” within the meaning of the statute. Boorstein v. CBS Interactive, Inc., 222 Cal. App. 4th 456, 467 (2013). A customer is “an individual who provides personal information to a business for the purpose of purchasing or leasing a product or obtaining a service from the business.” Cal. Civ. Code § 1798.80(c). Here, the Supreme Court found that Plaintiff never alleged that he provided any personal information to Illuminate to purchase or lease a product, or obtain a service from Illuminate. The Supreme Court observed that the Ventura County Office of Education purchased Illuminate’s services and provided the student information, not Plaintiff. Moreover, the Supreme Court disregarded Plaintiff’s argument that he was the “ultimate” customer of Illuminate because the CRA “does not authorize suit by all consumers or beneficiaries; it authorizes a civil action for an injured ’customer.’” Id. at *32.
In the end, the Supreme Court reversed the judgment of the Court of Appeal and remanded the matter for further proceedings.
Implications For Companies
This decision emphasizes the importance of ensuring that a plaintiff has sufficiently pled all causes of action asserted. When the CMIA or CRA are involved, companies must consider whether they are, in fact, a covered entity in order to determine whether they are subject to the statutes’ reach.
Further, to assert injury under the CMIA for a data breach claim, the analysis hinges on the risk of unauthorized use, not what an unauthorized user is able to do with the data. Thus, it is imperative that companies take all reasonable steps to retain the confidentiality of sensitive records, making an extra effort to ensure that hardware is secure.
For CRA claims, companies need to pay special attention to which entities solicit or contract for their services as attention to these details can potentially thwart a potential CRA claim.
In short, organizations that use such medical data, and operate in California, should take note of this decision because it impacts their defenses both positively and negatively going forward.
