Jennifer A. Riley – Class Action Defense

November 7, 2026November 7, 2026 by Gerald L. Maatman, Jr.

Pennsylvania Superior Court Shoes In Consent Framework For State Wiretap Claims

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

Duane Morris Takeaways: On October 23, 2026, in Thompson v. C. & J. Clark America, Inc., No. 74 WDA 2026, 2026 Pa. Super. LEXIS 557 (Pa. Super. Ct. Oct. 23, 2026), the Pennsylvania Superior Court vacated a lower court’s grant of summary judgment to footwear retailer C. & J. Clark America, Inc. (“Clarks”) in a putative class action alleging that a third-party analytics vendor “wiretapped” visitors’ interactions with the retailer’s website in violation of Pennsylvania’s Wiretapping and Electronic Surveillance Control Act (“WESCA”) and constituted common law invasion of privacy. The Superior Court rejected the trial court’s holding that communicating over the internet amounts to consent to interception, and adopted the framework articulated in Popa v. Harriet Carter Gifts, Inc., 772 F. Supp. 3d 592 (W.D. Pa. 2025), in its entirety, holding that a reasonably conspicuous privacy policy disclosing third-party tracking can establish implied consent under WESCA’s all-party consent exception. The decision underscores an emerging line of state court rulings scrutinizing online privacy policies more closely, with wider implications for litigation to be brought against companies with an online presence.

Background

On February 14, 2023, Plaintiff, a consumer, brought a putative class action against Clarks in the Court of Common Pleas of Washington County alleging that the shoe retailer, through third-party vendor Content Square, wiretapped the electronic communications of visitors to its website, including their “mouse movements, clicks, keystrokes … URLs of web pages visited, and/or other electronic communications,” in violation of WESCA and common law invasion of privacy. Id. at *1-2. Plaintiff claimed that after visiting the Clarks website on her phone and browsing for sandals, she received unwanted, targeted ads for sandals, including for those sold by Clarks. Id. at *6-7. Plaintiff’s complaint stated that she had not entered her name, email address, or payment information, did not create an account on the website, and did not use the chat function. Id. Further, Plaintiff claimed that she never reviewed the website’s terms of use nor the cookie policy. Id. at *7.

The Court of Common Pleas dismissed her common law invasion of privacy claim on preliminary objections but allowed her to proceed on her WESCA claim. Id. at *2. On December 5, 2025, it granted summary judgment to Clarks. Id. at *8. In a 3-5 decision relying on Commonwealth v. Proetto, 2001 PA Super 95, 771 A.2d 823 (Pa. Super. 2001), Commonwealth v. Cruttenden, 619 Pa. 123, 58 A.3d 95 (Pa. 2012), Commonwealth v. Diego, 2015 PA Super 143, 119 A.3d 370 (Pa. Super. 2015), and Commonwealth v. Byrd, 661 Pa. 85, 235 A.3d 311 (Pa. 2020), the Court of Common Pleas held that a website visitor need not have known that she was being tracked or by whom, and that her “‘very act’ of sending an electronic communication over the Internet amounted to her express consent to recording.” Id. at *15-16. The Court of Common Pleas determined that “when [plaintiff] surfed the Internet for summer sandals and clicked on the Clarks America website, she should have known that Clarks America or another acting on its behalf was tracking her activity.” Id. at *16.

Plaintiff appealed, and the Superior Court vacated the summary judgment and remanded the matter back to the Court of Common Pleas.

The Superior Court’s Decision

On October 23, 2026, the Superior Court issued its decision after considering (1) whether the Court of Common Pleas erred in finding that a website visitor gives their express consent to being wiretapped through the act of sending an electronic communication over the internet; (2) whether the Court of Common Pleas erred in finding that Clarks’ third-party vendor was its agent and thus permitted to circumvent WESCA’s all-party consent requirement; and (3) whether the Court of Common Pleas erred in holding that Plaintiff had failed to make a prima facie showing sufficient to allow a trier of fact to find that her communications with Clarks’ website were unlawfully intercepted by the third party vendor. In an opinion written by Judge Mary P. Murray and joined by Judges Mary Jane Bowes and Judith F. Olson, the Superior Court found that the Court of Common Pleas had erred on the issue of consent, and found the last question moot, and thus vacated and remanded the decision.

The Superior Court, finding a dearth of Pennsylvania case law applying WESCA to the circumstances at issue, based its decision on what it referred to as a “highly instructive” 2025 ruling in the U.S. District Court for the Eastern District of Pennsylvania entitled Popa v. Harriet Carter Gifts, Inc., 772 F. Supp. 3d 592 (W.D. Pa. 2025) (“Popa II”), which followed a reversal of summary judgment granted in Popa v. Harriet Carter Gifts, Inc., 544 F. Supp. 3d 535 (W.D. Pa. 2021) (“Popa I”), to a defendant in a putative class action alleging similar claims, reversed by the Third Circuit in Popa v. Harriet Carter Gifts, Inc., 52 F.4th 121 (3d Cir. 2022) (“Popa III”). Id. at *28. In Popa II, the Third Circuit held that “there is no sweeping direct-party exception to civil liability under WESCA,” reasoning that the General Assembly’s 2012 amendment codifying a narrow intended-recipient carve-out for law enforcement limited Proetto and Cruttenden to their facts. Id. at *31. On remand, the District Court in Popa III had held that the plaintiff constructively consented to third-party tracking because the defendant retailer’s privacy statement adequately disclosed third-party data collection and was reasonably conspicuous in the website’s footer. Id. at *33-44.

The Superior Court found that the record raised a genuine issue of fact as to whether Content Square tracked Plaintiff’s communications, and that such tracking would constitute an interception under WESCA. Id. at *47. The Superior Court agreed with the Court of Common Pleas that under WESCA § 5704(4), consent turns on an objective, “reasonable user” standard: “whether a reasonable Internet user in [plaintiff’s] position knew or should have known that the contents of her communications with the Clarks website would be acquired by a third party,” and that actual knowledge is not required. Id. at *47-48. But the Superior Court held that the Court of Common Pleas erred with its application of the statute. Id. at *48. It found that the lower court’s conclusion that a sender’s ignorance of the recipient’s identity is irrelevant was in error because of the reliance on Proetto and Cruttenden, which had involved two-party communications with police officers posing as the intended recipient, and a 2012 amendment to WESCA licensed only police officers to do so. Id. at *48-50. As the Superior Court observed, “misrepresenting one’s identity in order to receive communications appears to be a prerogative belonging to police officers.” Id. at *49.

The Superior Court found that the Court of Common Pleas had removed Proetto’s language on the “very act of sending a communication over the Internet” being consent from its context, which, in Proetto was a chat room message received in recorded form by its intended recipient. Id. at *51-53. The Superior Court explained that “Proetto and its progeny do not support the blanket ruling, which implies that any person sending any form of communication over the Internet inherently consents to the acquisition of that communication’s contents by anyone who happens to be listening/recording.” Id. at *52. The Superior Court found that the Court of Common Pleas erred by failing to apply the reasonable person standard to the particular form of communication at issue, here, a shopper’s interaction with a retail website, and by failing to consider whether a reasonable person would be aware that someone other than the intended recipient might acquire the communication. Id. at *52-53.

The Superior Court agreed with Clark’s reasoning, relying on Popa III, that “a reasonably prudent person has a lower expectation of privacy on the Internet, particularly with respect to the kind of non-sensitive data involved here.” Id. at *55. While acknowledging that WESCA is content-neutral and that a violation does not require sensitive information, the Superior Court held that the “innocuous nature” of the data is relevant to the reasonable person standard. Id. at *55.

The Superior Court then held that a website privacy policy may convey implied consent to an interception if it “disclose[s] the nature of the interception to a reasonable reader” and is “reasonably conspicuous” on the webpage. Id. at *57. It found Clarks’ privacy policy to have satisfied the first prong because it disclosed that Clarks and its “third party partners” used cookies, pixel tags, and web beacons to “track the actions of users,” and that third parties “may place cookies on your browsers for purposes of tracking consumer behavior.” Id. at *57-61. The Superior Court found the policy “rife with references to the involvement of third parties,” and concluded that “reasonable readers of the Privacy Policy would know that the content of their communications with the Clarks website would be intercepted by third parties.” Id. at *61-62. The Superior Court rejected the opinions of Plaintiff’s expert that the policy did not cover Content Square because it applied only to data collected by “www.clarksusa.com” because the Superior Court found that such a technical distinction “would not be appreciable by an average Internet user,” and it agreed with Popa III that WESCA does not require a privacy policy to “reveal granular details about the identity of the ‘third parties’ or the specific type of cookies used.” Id. at *62.

The Superior Court adopted Popa III’s rejection of Plaintiff’s argument that tracking begins before a user can reach the privacy policy. Id. at *63. It further refused to import the heightened, “unambiguous manifestation of assent” standard that the Superior Court had applied to online arbitration agreements in Duffy v. Tatum, 354 A.3d 14 (Pa. Super. 2026), explaining that Plaintiff waived no constitutional right and that the alleged infringement “is of such low stakes” that the Third Circuit had found it insufficient to confer Article III standing. Id. at *63-65. The Superior Court thus held that “a website’s browsewrap privacy policy, if reasonably conspicuous, may be sufficient to demonstrate that a reasonable user should know about the data-collection practices disclosed in the policy, thereby conferring implied consent under WESCA section 5704(4).” Id. at *66.

Ultimately, however, the Superior Court rejected Clark’s contention that a link to its privacy policy was conspicuously located at the center of the bottom of its website because it was not supported by evidence in the record. Id. at *68. Thus, viewing the record in the light most favorable to Plaintiff, the Superior Court could not conclude that Clarks had met its burden for consent. Id. The Superior Court therefore vacated without prejudice and remanded, authorizing the parties to supplement the record. Id. at *70.

Implications For Companies

With the decision in Thompson, the Superior Court of Pennsylvania has laid out the governing framework for WESCA class actions in Pennsylvania courts via Popa. Courts in the state are instructed to more closely scrutinize whether website users have been reasonably apprised of a site’s privacy policy, and whether such policies inform users of any tracking they are subject to. A simple click or scroll is, under this ruling, may no longer be argued as consent to be tracked. The key takeaway for companies operating websites utilizing tracking software or third party vendors include the importance of preparing a conspicuous and clear privacy policy that discloses use of such technology and/or vendors, and that a visible and accessible privacy policy may be the centerpiece of a defense of consent in wiretapping litigation.

October 19, 2026October 19, 2026 by Gerald L. Maatman, Jr.

Second Circuit Revives Shelved Grocery Workers’ Waiting Time Suit

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

Duane Morris Takeaways: On October 13, 2026, in Santos v. Lidl US, LLC, No. 25-2357 (2d Cir. Oct. 13, 2026), the Second Circuit vacated a district court’s dismissal of a grocery worker’s time-shaving claims under the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”). The Second Circuit held that waiting time is compensable under the FLSA when an employer requires an employee to report to work at a specific time and be ready to work when there is no work to do for reasons beyond the employee’s control. It also declined to consider fifteen minutes of unpaid time a week as de minimis when argued at the pleading stage. For employers with shift workers, the ruling signals a narrowing of the Portal-to-Portal Act defense and gives plaintiffs’ lawyers a new basis for bringing collective actions in the Second Circuit.

Background

On January 26, 2024, Plaintiff Sandra Santos brought a class and collective action alleging that her employer, Lidl US, LLC (“Lidl”), had engaged in the unlawful practice known as “time-shaving” in violation of the FLSA and NYLL. Plaintiff, a store clerk and stocker at the grocer’s West Babylon, New York location, alleged that Lidl required her and other opening-shift employees to report to work fifteen minutes before the listed start time, though they were not always able to clock in until their shift start time or later, and that as a result they were not paid overtime. Plaintiff sought to represent a collective under the FLSA and a class under the NYLL.

On September 10, 2025, the U.S. District Court for the Eastern District of New York dismissed both claims with prejudice after holding that the Portal-to-Portal Act barred the FLSA claim and that because the NYLL claim was coextensive with it, it was barred, too. Plaintiff appealed, and the Second Circuit vacated and remanded to the District Court.

The Appeals Court’s Decision

Writing for the majority, Judge Beth Robinson cited to U.S. Department of Labor regulation 29 C.F.R. § 790.7(h) interpreting the Portal-to-Portal Act, writing that the regulation distinguished between when an employee voluntarily arrives early and conducts a “preliminary” activity, and when an employee is required to report at a set hour, is ready to work, and has no work to do for reasons beyond their control, where the employee is doing something “integral” to their principal activities. Id. at 1. Under the § 790.7(h), the former is not compensable, but the latter is. Judge Robinson then cited to the U.S. Supreme Court decision in IBP, Inc. v. Alvarez, 546 U.S. 21 (2005), which determined courts were required to apply a separate analysis on compensable work time where workers had been required to report at a specific time to begin donning protective gear prior to starting their shift only to find that no protective gear was available, including evaluating whether the donning was “integral” to the job they were hired to perform. Id. at 12.

In its defense, Lidl argued that Alvarez and § 790.7(h) were abrogated by the U.S. Supreme Court’s decision in Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. 27 (2014), which held that time spent waiting to go through a security line was a noncompensable postliminary activity because it was not a “principal” activity for which the workers were employed. Id. at 14. The Second Circuit declined to read the decision so broadly, writing that Busk did not “address the distinct scenario of a worker engaged to wait.” Id. at 15. Citing to Armour & Co. v. Wantock, 323 U.S. 126 (1944), Judge Robison wrote that an employee may be hired specifically to wait, and Busk did not upend the principle that “[r]eadiness to serve may be hired, quite as much as service itself.” Id. at 16.

Lidl responded that this is limited to workers such as firefighters and limousine drivers, but the Court of Appeals was unconvinced, writing that it found “no such limit in the text of § 790.7(h).” Id.

Finally, the Second Circuit rejected Lidl’s alternative argument that the time workers spent waiting was de minimis, writing that it could not “conclude from our precedents that fifteen minutes of uncompensated work time a week is de minimis.” Id. at 17.

Judge Richard J. Sullivan’s Dissent

In his dissent, Judge Sullivan wrote that the majority’s holding was in conflict with the Portal-to-Portal Act and with the U.S. Supreme Court’s precedent, concluding that the wait time at issue was neither “integral” nor “indispensable” to plaintiff’s work as a grocery store clerk because Lidl could have eliminated it without affecting the principal activities of stocking or customer service. Id. at 23. Judge Sullivan further wrote that § 790.7(h) applies only when waiting is an unusual break from routine, not a routine part of preliminary activities. Id. at 26.

Takeaways for Employers

The Second Circuit’s holding shows the enduring reluctance of the Second Circuit to broaden its reading of the U.S. Supreme Court Busk ruling on non-compensable waiting time, even when it sets new limits the Portal to Portal Act in determining compensable and non-compensable waiting time. Employers scheduling workers to arrive prior to shift start are cautioned that this may trigger a finding that such workers are “engaged to wait,” and should tread cautiously in relying on the Portal-to-Portal Act to preclude litigation or utilizing a de minimis defense argument to limit damages.

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

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

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

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

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

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

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

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

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

Case Background

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

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

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

The Supreme Court’s Decision

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

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

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

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

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

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

Implications For Companies

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

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

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

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

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

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

Case Background

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

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

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

The Ninth Circuit’s Analysis

Predominance

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

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

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

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

Adequacy

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

Implications for Employers

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

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

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

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

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

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

Presenters

Gerald L. Maatman Jr.

Jennifer A. Riley

Daniel D. Spencer

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

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

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

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

Case Background

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

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

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

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

The Court’s Decision

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

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

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

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

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

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

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

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

Implications For Companies

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

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

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

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

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

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

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

Case Background

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

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

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

The District Court’s Ruling

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

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

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

Implications for Companies

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

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

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

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

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

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

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

Case Background

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

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

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

The Court’s Decision

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

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

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

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

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

Implications For Companies

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

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

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

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

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

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

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

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

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

Case Background

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

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

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

The Seventh Circuit’s Ruling

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

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

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

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

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

Implications For Companies

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

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

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

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