Jennifer A. Riley – Page 6 – Class Action Defense

May 24, 2023 by Gerald L. Maatman, Jr.

A Stellar Review For The Duane Morris Class Action Review – 2023

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

Duane Morris Takeaway: In its review of the Duane Morris Class Action Review – 2023, EPLiC Magazine called it the “the Bible” on class action litigation and an essential desk reference for business executives, corporate counsel, and human resources professionals.

We are humbled and honored by the recent review of the first edition of the Duane Morris Class Action Review – 2023 by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here.

EPLiC said that “The Review must-have resource for in-depth analysis of class actions in general and workplace litigation in particular.”

EPLiC continued that “The Duane Morris Class Action Review analyzes class action trends, decisions, and settlements in all areas impacting Corporate America. The Review also highlights key rulings on attorneys’ fee awards in class actions, motions granting and denying sanctions in class actions, and the top class action settlement in a myriad of substantive areas. Finally, the Review provides insight as to what companies and corporate counsel can expect to see in 2023 in terms of filings by the plaintiffs’ class action bar.”

So how was it done?

The answer is pretty simple – we live, eat, and breathe class action law 24/7/365.

Every day, morning and evening, we check the previous day’s filings of class action rulings relative to antitrust class actions, appeals in class actions, arbitration issues in class actions, Class Action Fairness Act issues in class actions, civil rights class actions, consumer fraud class actions, data breach class actions, EEOC-initiated litigation, employment discrimination class actions, Employee Retirement Income Security Act class actions, Fair Credit Reporting Act class actions, wage & hour class actions, labor class actions, privacy class actions, procedural issues in class actions, product liability & mass tort class actions, Racketeer Influenced and Corrupt Organization Act class actions, securities fraud class actions, settlement issues in class actions, state court class actions, Telephone Consumer Protection Act class actions, and Worker Adjustment and Retraining Act class actions. We conduct searches on a national basis, in federal courts and all 50 states. Then we read and analyze every ruling on Rule 23 certification motions and subsidiary issues throughout federal and state trial and appellate courts. The information is organized in our customized database, which is used to provide the Review’s one-of-a-kind analysis and commentary.

The result is a compendium of class action law unlike any other. Thanks for the kudos EPLiC – we sincerely appreciate it!

We look forward to providing the 2024 Review to all of our loyal readers in early January. In the meantime, look for our first-ever Mid-Year Update coming at the beginning of July!

May 15, 2023May 16, 2023 by Gerald L. Maatman, Jr.

Tennessee Becomes Eighth State To Enact Comprehensive Privacy Legislation

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

Duane Morris Takeaways: As efforts to enact comprehensive privacy protection continue to stall on the federal level, states have stepped up to create a patchwork quilt of protections for those doing business with consumers within their borders. Tennessee recently became the eighth state – following Indiana, California, Colorado, Connecticut, Iowa, Utah, and Virginia – to enact comprehensive privacy legislation. At least 15 other states have introduced similar bills during the current legislative session, and Montana’s comprehensive consumer privacy statute awaits the signature of its Governor. Companies doing business in Tennessee or with Tennessee consumers should take heed of the new law and review their policies and processes for compliance.

Tennessee Legislation

After receiving overwhelming support from both houses of the General Assembly, on May 11, 2023, Governor Bill Lee signed the Tennessee Information Protection Act into law. With this law, Tennessee became the eighth state to institute comprehensive consumer privacy legislation. The law is set to take effect on July 1, 2024.

The act applies to businesses that conduct business in Tennessee or produce products or services that are targeted to Tennessee residents and that: (1) control or possess the personal information of at least 175,000 consumers; or (2) control or process personal information of at least 25,000 consumers and derive more than 50% of their gross revenue from the sale of personal information. The law contains exemptions for certain types of entities, such as governmental entities, certain financial institutions, non-profit organizations, and higher education institutions. The law also exempts certain types of data, such as personal information regulated by the Family Educational Rights and Privacy Act, and protected health information under HIPAA.

Similar to other comprehensive state privacy laws, the Tennessee law grants Tennessee residents certain rights in their personal information. It allows for consumers to confirm whether a company is processing their personal information, to access their personal information, to correct inaccuracies in their personal information, to delete their personal information, to obtain copies of their personal information, and to opt out of future sales or targeted advertising.

The law allows a consumer to invoke his or her rights (and the rights of his or her children) at any time by submitting a request to a controller of the personal information specifying the rights that the consumer wishes to invoke, and it requires the respondent to comply with an authenticated request without undue delay but, in all cases, within 45 days.

The law imposes various requirements on persons and entities who “determine[] the purpose and means” of processing personal information. For example, it requires such persons and entities to limit the collection of personal information to what is adequate, relevant, and reasonably necessary in relation to the purposes for which the data is processed; to establish, implement, and maintain reasonable data security practices; and, if the controller processes or sells personal information for targeted advertising, to clearly and conspicuously disclose the processing, as well as the manner in which a consumer may exercise the right to opt out of the processing.

The Tennessee law does not provide for a private right of action and vests exclusive enforcement authority in the Tennessee attorney general. It allows a court to impose civil penalties of up to $7,500 per violation, and allows treble damages for willful or knowing violations. The law requires that, prior to initiating an action, the attorney general must provide a 60-day notice period during which the recipient may cure the noticed violation to avoid an enforcement action. The law also creates an affirmative defense under certain circumstances for a company that creates, maintains, and complies with a written privacy policy that reasonably conforms to documented policies, standards, and procedures designed to safeguard consumer privacy.

Implications for Businesses

Covered persons and entities who do business in Tennessee or who target Tennessee consumers should start reviewing their policies and developing processes to comply with the Tennessee law. Although the law is not set to take effect until July 1, 2024, the law adds another challenge to the already complex compliance landscape for companies seeking to operate on a nationwide basis.

May 10, 2023 by Gerald L. Maatman, Jr.

Introducing The Duane Morris Consumer Fraud Class Action Review – 2023

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

Duane Morris Takeaways: Class action litigation in the consumer fraud area has exponentially increased over the past several years, leaving corporations extremely vulnerable. Additionally, most consumer fraud class actions come with the possibility of excessive payouts for corporations. To that end, the class action team at Duane Morris is pleased to present the inaugural edition of the Consumer Fraud Class Action Review – 2023. We hope it will demystify some of the complexities of consumer fraud litigation and keep corporate counsel updated on the ever-evolving nuances in this area of law. We hope this book, which manifests the experience and expertise of the Duane Morris class action defense group, will assist clients by identifying trends in the case law and offering practical approaches in handing consumer fraud class action litigation.

Click here to download a copy of the Duane Morris Consumer Fraud Class Action Review – 2023 ebook.

Tune in on Fridays to our weekly podcast The Class Action Weekly Wire for more class action analysis and discussion of important trends!

May 8, 2023 by Gerald L. Maatman, Jr.

Class Action Money & Ethics Conference – The State Of Class Action Litigation

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

Duane Morris Takeaways: We were honored to present the keynote address today to open the 7th Annual Class Action Money & Ethics Conference in New York City sponsored by Beard Group, Citi Financial, Simpluris, and Pacer Monitor. With over 100 attendees, the program focused on the current state of class action litigation and “white hot” litigation topics for 2023. The discussion points provide an excellent roadmap on what is likely coming down the road for Corporate America for the remainder of 2023.

Class Action Dynamics

The themes of our keystone address focused on the extraordinary developments in class action litigation over the past 12 months.

The plaintiffs’ bar certified class actions at unprecedented levels throughout the country and monetized their cases with the highest settlement values seen in over 25 years. Many of these settlements arose from opioid litigation against manufactures, distributors, and retailers in the pharmaceutical industry. On an aggregate basis, class actions and government enforcement lawsuits garnered more than $71 billion in settlements, with 15 class action cases settling for more than $1 billion. Suffice to say, 2022 was unlike any other year on the class action settlement front. As success often begets copy-cats, corporations can expect the plaintiffs’ class action bar will be equally if not more aggressive in their case filings and settlement positions in 2023.

In 2022, the plaintiffs’ class action bar succeeded in certifying class actions at an exceedingly high rate. Across all major types of class actions, courts issued rulings on over 360 motions to grant or to deny class certification in 2022. Of these, plaintiffs succeed in obtaining or maintaining certification in 268 rulings, with an overall success rate of nearly 75%. The plaintiffs’ class action bar obtained the highest rates of success in securities fraud, ERISA, WARN, and FLSA actions. In cases alleging securities fraud, plaintiffs succeeded in obtaining orders certifying classes in 23 of the 24 rulings issues during 2022, a success rate of 96%. In ERISA litigation, plaintiffs succeeded in obtaining orders certifying class in 18 of 23 rulings issued during 2022, a success rate of 78%. In cases alleging WARN violations, plaintiffs managed to certify classes in 100% of the suits that resulted in decisions this year.

In terms of predictions, we opined that as the volume of class action filings has increased each year for the past decade, and 2023 is likely to follow that trend. As a result, a company’s programs designed to ensure compliance with existing laws and strategies to mitigate class action litigation risks are corporate imperatives. The plaintiffs’ bar is nothing if not innovative and resourceful. Given the massive class action settlement figures in 2022, coupled with the ever-developing case law under Rule 23, corporations can expect more lawsuits, expansive class theories, and an aggressive plaintiffs’ bar in 2023. These conditions necessitate planning, preparation, and decision-making to position corporations to withstand and defend class action exposures. These crucial issues are inevitably posed by any class action litigation. By their very nature, class actions involve decisions on strategy at every turn. The positions of the parties are constantly changing and corporate defendants must always be looking ahead and anticipating issues during every phase of the litigation.

Hot Class Action Topics

Among the topics addressed at the Conference were ESG class actions, PFAS “forever chemicals” litigation, Camp LeJeune mass tort litigation, Talc liability class actions, crypto class actions, and gender discrimination and pay equity class action litigation.

Litigating ESG Consumer Class Actions

Baldassare Vinti, Jeff Warshafsky, and Jennifer Yang of Proskauer Rose LLP led a discussion of class action litigation focusing on ESG environmental marketing claims, which they noted have been an increasing in number in the consumer class action space. These putative class actions challenge “green” claims that products or services are “carbon neutral,” “recyclable,” “non-toxic,” or otherwise beneficial for the environment.

PFAS “Forever Chemical” Class Actions

Michael J. Bisceglia, Brian M. Ledger, Paul T. Nyffeler, and Thomas R. Waskom of Hunton Andrews Kurth LLP presented on PFAS “forever chemical” litigation. Despite stringent regulation, PFAS has been linked to harmful health effects, including cancer. They predicted that after opioid litigation, many in the plaintiffs’ class action bar view this area as the next “big thing” for widespread mass tort and class actions.

Camp LeJeune Litigation & New Theories Of Liability

Mark A. DiCello of DiCello Levitt discussed the state of mass tort litigation with water contamination lawsuits filed against the U.S. Government alleging adverse health effects for affecting nearly 175,000 marines, sailors, their families and civilians at the camp between 1950 and 1985. Those cases were consolidated into MDL No. 2218 and the government successfully obtained dismissal of all of those cases in 2016. Plaintiffs’ lawyers have continued to litigate based on new theories of liability. The amount of advertising about the litigation is also continuing to mount (estimated at a cost of $500,000 to date), as more than 2,000 lawsuits are pending.

Talc Liability Class Actions

Gina Passarella, the editor in chief of American Lawyer, moderated a roundtable discussion with Melanie L. Cyganowski of Otterbourg P.C., Mohsin Meghji of M3 Partners, Robert J. Stark or Brown Rudnick, and Joshua A. Sussberg of Kirkland & Ellis regarding resolution of talc liability. The census of the roundtable was that this remains a hot topic in the class action and corporate restructuring communities, and that 2023 is expected to see various bankruptcy rulings in this sector.

After FTX, Crypto Lawyers And Class Actions

Michael P. Canty of Labaton Sucharow LLP and Graham Newman Chappell, Chappell & Newman provided their insights on crypto class action issues. They agreed that with the collapse of FTX, the crypto industry has endured more scrutiny. In this respect, decades-old laws are apt to provide fertile ground for assertion of class action theories.

Gender Based Discrimination & Pay Inequality

Matthew L. Berman of Valli Kane & Vagnini LLP and Rachel Geman of Lieff Cabraser Heimann & Bernstein LLP led a discussion on gender discrimination and pay equity class-based litigation.

With recent large equal pay cases, such as last year’s Google gender discrimination class action settlement of $118 million, and recent laws regarding pay equity and requiring pay transparency, a spotlight is shining on compensation in the workplace.

Mass Torts & Cases To Watch In 2023

Christopher Ege of Gordon Rees Scully Mansukhani, LLP, Mark Eveland of Verus LLC, Bridie Farrell of Milestone, Neil Kornswiet of Optium Captial LLC, and Edward E. Neiger of Ask LLP closed the Conference with a roundtable discussion of the state of mass tort litigation. They discussed several cases with some of the biggest brands making their way through court MDL proceedings, including Roundup, Tylenol Autism, and Elmiron. Based on key settlements from 2022, they predicted a robust litigation landscape for 2023.

Implications For Corporate America

If 2022 is any indication, 2023 is shaping up to be a signal year of developments in class action litigation.

May 4, 2023December 1, 2023 by Gerald L. Maatman, Jr.

Indiana Joins The Bandwagon In Passing A Comprehensive Privacy Law

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

Duane Morris Takeaways: The United States currently has no comprehensive data privacy law. Rather, a patchwork quilt of various privacy laws cover different types of data, such as information in credit reports (the Fair Credit Reporting Act), student records (Family Educational Rights and Privacy Act), and consumer financial products (Gramm-Leach-Bliley Act). In an attempt to fill the void of federal legislation, Indiana recently joined six other states – California, Colorado, Connecticut, Iowa, Utah, and Virginia – in enacting a comprehensive privacy statute, the Indiana Consumer Data Protection Act (“ICDPA”). At least nineteen states have introduced similar privacy bills this legislative session. Montana and Tennessee have comprehensive consumer privacy statutes pending signature by their governors. Businesses in Indiana should start immediately reviewing their policies and implementing processes for complying with ICDPA to avoid enforcement litigation by the Indiana Attorney General.

Indiana Legislation

On May 1, 2023, Indiana Governor Holcomb signed Senate Bill 5, known as the ICDPA. This new law will take effect on January 1, 2026.

The ICDPA applies to companies that conduct business in Indiana or produce products or services that are targeted to residents of Indiana and during a calendar year: (1) control or process the personal data of 100,000 consumers (who are Indiana residents) or (2) control or process personal data of at least 25,000 consumers (who are Indiana residents) and more than 50% of gross revenue from the sale of personal data. Significantly, the ICDPA does not apply to data processed or maintained in the course of applying to or being employed by a business. Moreover, the ICDPA does not apply to government entities, non-profit organizations or higher education institutions.

The ICDPA provides consumers with rights to their personal data, including:

– opt-out rights related to the sale of personal data, targeted marketing and profiling (automated decision making that could have significant legal effects, such as those related to employment and benefits);
– access rights, including a right to confirm whether a company is processing any data at all;
– deletion rights;
– correction rights, limited to data the consumer previously provided;
– appeal rights; and
– data portability rights (summary of the personal data sent to the consumer must be in a portable and readily usable format).

“Personal data” is broadly defined as information that is “linked or reasonably linkable to an identified or identifiable individual.” Personal data does not include de-identified data, publicly available information, or data related to a group or category of customers that is not linked or reasonably linked to an individual customer. The ICDPA also provides consumers the right to opt-out of the collection and processing of their sensitive personal data. “Sensitive personal data” includes: (1) personal data revealing racial or ethnic origin, religious beliefs, a mental or physical health diagnosis made by a healthcare provider, sexual orientation, or citizenship or immigration status; (2) genetic or biometric data that is processed for the purpose of uniquely identifying a specific individual; (3) personal data collected from a known child; and (4) precise geolocation data. Certain personal data that is covered by other statutes like the Fair Credit Reporting Act or Family Educational Rights and Privacy Act is exempt.

Once the ICDPA takes effect, companies must respond to a consumer personal data request within 45 days of receipt of the request. Companies may also seek a 45-day extension to respond. If a consumer appeals a company’s decision to deny the consumer’s request, the appeal response must be delivered within 60 days. If the appeal is denied, the company must provide the consumer with a method for contacting the state attorney general.

Importantly, the ICDPA does not provide individuals with a private right of action against businesses that violate the Indiana Law. Rather, the Indiana Attorney General will have exclusive enforcement authority. Prior to any enforcement action, the business will be allowed 30 days to cure the alleged violation. Only after the thirty days pass will the Indiana Attorney General be permitted to bring an enforcement action for the alleged violation. If the Indiana Attorney General decides to bring an enforcement action, the business may be fined up to $7,500 per violation.

Implications for Businesses

The ICDPA does not take effect until January 1, 2026. Covered businesses should start reviewing their policies and implementing processes for complying with the ICDPA to avoid enforcement by the Indiana Attorney General.

May 4, 2023 by Gerald L. Maatman, Jr.

Seventh Circuit Affirms Dismissal Of “Bare Bones” Lawsuit Brought Under Illinois Genetic Information Privacy Act

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Tyler Z. Zmick

Duane Morris Takeaways: On May 1, 2023, the U.S. Court of Appeals for the Seventh Circuit issued one of only a handful of decisions that have been released regarding the Illinois Genetic Information Privacy Act (“GIPA”). In Bridges v. Blackstone, Inc., No. 22-2486, 2023 WL 3165218 (7th Cir. May 1, 2023), the Seventh Circuit affirmed the District Court’s dismissal of Plaintiffs’ GIPA claims based on Plaintiffs’ failure to allege that Defendant “disclosed” or was “compelled to disclose” their statutorily-protected genetic information. Similar to its more well-known counterpart – the Illinois Biometric Information Privacy Act (“BIPA”) – liability under the GIPA could potentially result in “astronomical” damages awards and may represent an increasingly important Illinois law in the privacy space.

GIPA Background

Enacted in 1998, the GIPA was designed to prevent employers and insurers from using genetic testing data as a means to discriminate for employment or insurance underwriting purposes.

To further that goal, the statute places restrictions on the ability to release “genetic testing and information derived from genetic testing.” Specifically, the GIPA provides that “genetic testing and information derived from genetic testing is confidential and privileged and may be released only to the individual tested and to persons specifically authorized, in writing in accordance with Section 30, by that individual.” 410 ILCS 513/15(a). Section 30, in turn, states that subject to certain exceptions, “[n]o person may disclose or be compelled to disclose the identity of any person upon whom a genetic test is performed or the results of a genetic test in a manner that permits identification of the subject of the test, except to . . . the subject of the test.” 410 ILCS 513/30(a).

Like the BIPA, the more widely-known privacy statute, the GIPA allows “[a]ny person aggrieved by a violation” of the statute to collect liquidated damages “for each violation” in the following amounts: (1) for negligent violations, $2,500 or actual damages, whichever is greater; or (2) for intentional or reckless violations, $15,000 or actual damages, whichever is greater. 410 ILCS 513/40. Like the BIPA, prevailing GIPA plaintiffs can also recover reasonable attorneys’ fees and costs.

Case Background

In Bridges, the Plaintiffs sent their DNA samples (obtained through at-home test kits) to Ancestry.com, a genealogy company. Years later, Defendant Blackstone, Inc. purchased Ancestry.com for $4.7 billion in an all-stock acquisition. Plaintiffs subsequently filed a putative class action against Blackstone in July 2021, alleging that its acquisition of Ancestry.com resulted in a violation of the GIPA.

After removing the complaint to the U.S. District Court for the Southern District of Illinois, Blackstone moved to dismiss on the basis that Plaintiffs failed to sufficiently allege a claim for relief under the GIPA.

The District Court agreed, holding that Plaintiffs failed to state a GIPA claim because they did not adequately allege that Blackstone “compelled” Ancestry.com to disclose Plaintiffs’ genetic data under Section 30 of the GIPA. The District Court agreed with Blackstone that “compel[ing]” the disclosure of genetic information necessarily requires something more than receipt or obtainment, yet Plaintiffs alleged only that Blackstone “may have been entitled to request or receive information from Ancestry in connection with the[] acquisition.” Bridges v. Blackstone Grp., Inc., No. 21-CV-1091, 2022 WL 2643968, at *4 (S.D. Ill. July 8, 2022).

The Seventh Circuit’s Decision

The Seventh Circuit affirmed the District Court’s dismissal of Plaintiffs’ GIPA claim under Rule 12(b)(6).

Regarding the District Court’s reason for granting Blackstone’s motion to dismiss, the Seventh Circuit held that it need not answer the question “over whether GIPA liability can attach to a company like Blackstone that allegedly receives protected information, rather than discloses that information,” because Plaintiffs “have failed to state a claim regardless.” Id. at *2.

The Seventh Circuit agreed with the District Court that it is not plausible to infer that “a run-of-the-mill corporate acquisition, without more alleged about that transaction, results in a compulsory disclosure within the meaning of Section 30.” Bridges v. Blackstone Grp., Inc., No. 22-2486, Order at 4 (7th Cir. May 1, 2023) (“All we can say with certainty about Blackstone’s all-stock acquisition of Ancestry is that a change in ownership occurred – nothing more.”).

Implications for Employers

One of only a few cases to have interpreted the statute, the Bridges decision indicates that a company is not subject to liability under the GIPA based solely on its acquisition of another company that may be in possession of genetic data.

Nonetheless, Bridges serves as a reminder to Illinois employers that collect genetic information, medical histories, and/or conduct “health screenings” as part of their application processes about the importance of complying with the GIPA.

The GIPA’s statutory text mirrors the BIPA’s text in important (and potentially concerning) ways, including that (i) a plaintiff can likely sue under the GIPA regardless of whether an actual injury is alleged; and (ii) following the Illinois Supreme Court’s logic as applied to the BIPA in Cothron v. White Castle, 2023 IL 128004 (Ill. Feb. 17, 2023) (see here), statutory damages may accrue under the GIPA each separate time a company “disclose[s] or [is] compelled to disclose” genetic data protected by the GIPA. Thus, it is possible that plaintiffs will file increased numbers of GIPA class actions in Illinois courts in the coming months and years.

April 19, 2023 by Gerald L. Maatman, Jr.

Federal District Court in Virginia Rejects Two-Step “Conditional Certification” FLSA Process

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Rebecca S. Bjork

Duane Morris Takeaways: On April 14, 2023, U.S. District Court Judge T. S. Ellis, III joined in the fray over whether the long-used two-step process for issuing notice of a Fair Labor Standards Act (“FLSA”) collective action is consistent with the text of the statute. In Mathews v. USA Today Sports Media Group, LLC, et al., No. 1:22-CV-1307 (E.D. Va.), he held that it is not. Judge Ellis ordered the parties to engage in limited discovery to establish a factual record upon which he can decide whether members of the plaintiff’s proposed collective action are, in fact, “similarly situated.” If – and only if – he concludes they are, he would then issue a notice allowing such persons to opt-in to the collective action. This ruling is significant because it follows a similar decision by the U.S. Court of Appeals for the Fifth Circuit in 2021, and the Sixth Circuit is currently considering an appeal raising the same issue. Thus, momentum may be building for the U.S. Supreme Court to ultimately step in and settle the issue. The one-step or two-step process is far from academic, for it has everything to do with litigation costs and risks, and the leverage flowing from a win or a loss in the certification battle.

Case Background

Plaintiff filed a collective action lawsuit under the FLSA alleging that USA Today Sports Media Group, LLC (“USA Today”) and Gannett Co., Inc. unlawfully classified her and others like her as independent contractors, and thus denied them overtime pay. From January 2017 to August 2021, Plaintiff was the Site Editor for the Seahawks Wire website, USA Today’s website covering the NFL franchise Seattle Seahawks. In her role, Plaintiff alleges that she and other “similarly situated” Site Editors for other teams all signed the same “Editor Agreement” with USA Today, and that they all engaged in similar duties such as “writing, editing and publishing sports news articles regarding their respective teams; managing others; editing other people’s articles; and making social media posts regarding articles they had written.” (Slip Op. at 2.) She submitted three declarations signed by herself and two others working as site editors for other teams, along with a motion for “conditional certification” of her FLSA collective. (Id.)

USA Today responded by submitting declaration evidence to show that Site Editors have freedom to create their content including how long their articles are, the tone they take, how many are posted each day, et cetera. (Id. at 3.) It also noted that it did not provide any office space, tools, feedback, performance evaluations, or supervisors to Site Editors, and also allowed them to write for other websites. (Id.) In other words, USA Today submitted evidence to show that under the applicable test for deciding whether someone is an independent contractor, Site Editors meet that standard, so they are not misclassified.

As is typical, Plaintiff argued that her lawsuit should proceed immediately as a collective action by issuance of an order sending notice to all of the other Site Editors around the nation. She maintained that she had submitted sufficient evidence under a lenient first step standard in a two-step process that they are all “similarly situated.” (Id. at 1, 4.) Under a test established in 1987 by Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), Plaintiff contended that step one is an “initial ‘notice stage’ determination” that members of the proposed collective action are similar enough to receive a notice of the action and be given the opportunity to opt in. (Id. at 4 (citing Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095 1102 (10th Cir. 2001).) Under this view of the FLSA, a plaintiff need only show “substantial allegations” that they are “victims of a single decision, policy or plan” in order for a notice to be sent – in this case, to all Site Editors nationwide. (Slip Op. at 4.) Plaintiffs then usually receive the right to conduct complete discovery, after which defendants may file a motion to “decertify” the collective action, based on evidence developed during the discovery process.

USA Today responded that the Court should follow the Fifth Circuit’s recent decision in Swales v. KLLM Transp. Servs., LLC, 985 F.4th 430 (5th Cir. 2021), which rejected the longstanding approach developed in Lusardi. (Slip Op. at 4.) It argued that the two-step approach has no basis in the statutory language of the FLSA. Rather, it emphasized that the court must instead make a sound factual determination as to whether proposed opt-in plaintiffs are, in fact, similarly situated and that requires discovery targeted solely to that inquiry. (Id.)

The Court’s Decision

Judge Ellis agreed with USA Today. He ruled that the parties must engage in discovery directed to establishing whether or not Site Editors around the country are similarly situated with regards to their work, the supervision provided (or not) by USA Today, along with the other relevant factors to establish that they were misclassified as independent contractors. He began by noting that the Fourth Circuit had not adopted the Lusardi test, nor had it commented on the Fifth Circuit’s decision in Swales. Rather, the Fourth Circuit has simply stated that district courts have discretion to manage the notice process in FLSA collective actions. (Id. at 5.) Judge Ellis decided that “the correct approach then, as noted by the Fifth Circuit, is the one authorized by FLSA’s text. Courts must determine, at the outset, whether a proposed collective action is ‘similarly situated’ to the named plaintiffs. To make this determination, courts may require limited discovery, targeted only at the factual and legal considerations needed to make the ‘similarly situated’ determination.” (Id. at 6.) He then ordered discovery only of the following – from the plaintiffs the Schedule C or W-2 forms of the named plaintiff and two declarants relating to their work writing sports media blog posts; any employment contracts, offer letters or agreements relating to their work; and one three-hour deposition; and from the defendants the independent contractor agreements; policy documents relating to the independent contractor arrangement; an organizational chart; a three-hour long Rule 30(b)(6) deposition; and a three-hour long deposition of defendants’ declarant filed in opposition to plaintiff’s motion. (Id. at 6-7). The discovery must be completed by May 26, 2023. (Id. at 6.)

Implications For Employers

Our annual class action review analyzed FLSA conditional certification rates, and plaintiffs won 82% of first stage conditional certification motions, but only 50% of second stage motions. Our previous post on these statistics is here. Hence, the stakes are quite meaningful in terms of the approach outlined in the Matthews ruling.

As any employer who has been sued by a named plaintiff seeking to represent an FLSA collective action knows, the discovery burden imposed by application of the two-step Lusardi decision is far more onerous than what Judge Ellis established in this case. Full merits discovery lasting more than a year is common, as opposed to a narrowly-targeted investigation of the work performed by the plaintiffs along with facts relating to the relevant independent contractor factors. For that reason alone, employers with operations within the Fourth Circuit will be happy to know they can cite Judge Ellis’ ruling in the future. While no one can predict the future with any degree of certainty, it seems likely that this new legal trend regarding the collective action notice process may eventually need to be resolved by the U.S. Supreme Court.

April 13, 2023 by Alex W. Karasik

EEOC Mid-Year Lawsuit Filing Update For Fiscal Year 2023

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

Duane Morris Takeaways: The EEOC’s fiscal year 2023 (“FY 2023”) spans from October 1, 2022 to September 30, 2023. Through the midway point of FY 2023, EEOC enforcement litigation filings have been fairly status quo with a total of 29 new lawsuits filed in the first six months. Traditionally, the second half of the EEOC’s FY, and particularly in the final month of September, are when the majority of filings occur. Even so, an analysis of the types of lawsuits filed, and the locations where they are filed, is informative for employers in terms of what to expect during the fiscal year-end lawsuit filing rush in September.

Cases Filed By EEOC District Offices

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

The most noticeable trend of the first six months of FY 2023 shows that the Charlotte District Office already filed five lawsuits. The Los Angeles and San Francisco District Offices each filed 13 lawsuits in FY 2022. In the first half of FY 2023, however, there was only one filed in Los Angeles, and three in San Francisco. The Birmingham and Dallas District Offices have yet to file a single lawsuit in FY 2023.

Analysis Of The Types Of Lawsuits Filed In First Half Of FY 2023

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

The percentage of each type of filing has remained fairly consistent over the past several years. Title VII cases again made up the majority of cases filed the first half of FY 2023, with 59% of all filings, (lower than the 69% in FY 2022, but similar to the 62% in FY 2021 and 60% in FY 2020). ADA cases also made up a significant percentage of the EEOC’s FY 2023 filings thus far, at 31%, an increase from the 18% in FY 2022, although down from the 36% in FY 2021. There were also four ADEA cases filed in the first half of the FY.

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

Notable 2023 Lawsuit Filings

Gender Identity Discrimination

After the 2020 U.S. Supreme Court’s decision in Bostock v. Clayton County, 140 S. Ct. 1731 (2020), which held that federal law prohibits employment discrimination against LGBTQ workers on the basis of sexual orientation or transgender status, we expected to see more aggressive EEOC-initiated litigation in this area. Two lawsuits involve claims of discrimination on the basis of sexual orientation and transgender status. In the first, EEOC v. TC Wheeler, Case No. 23-CV-286 (W.D.N.Y. Mar. 30, 2023), the EEOC alleged that management and employees harassed a transgender male employee because of his gender identity, including telling the employee that he “wasn’t a real man,” and asking invasive questions about his transition. The EEOC further alleged that other employees also made anti-transgender comments and continually referred to the employee by using female pronouns.

In EEOC v. Sandia Transportation, Case No. 23-CV-274 (D.N.Mex. Mar. 31, 2023), the EEOC alleged that the defendant discriminated against lesbian female employees on the basis of their sexual orientation. The EEOC contended that the owner of the company stated that women did not belong in the workplace, that he “hated dealing with women,” and referred to them in a number of derogatory terms.

Both of these lawsuits suggest that the EEOC will be filing more lawsuits seeking to protect against harassment of employees based on their sexual orientation or because of their gender.

Vaccine-Related Litigation

Given the prevalence of vaccine-related debates that emerged during the COVID-19 pandemic, we anticipated there would be a surge of exemption cases coming through the EEOC’s charge intake system. In EEOC v. Children’s Hospital of Atlanta, Case No. 22-CV-4953 (N.D. Ga. Dec. 15, 2022), the EEOC alleged that the pediatric healthcare system violated federal law when it fired a maintenance assistant for requesting a religious exemption to its influenza vaccination policy. The EEOC contended that the defendant terminated the employee for failing to receive the vaccination, despite his request for a religious exemption to the defendant’s flu vaccination requirements based on sincerely held religious beliefs. The EEOC noted that the defendant previously granted the employee religious exemptions in 2017 and 2018, but denied the request in 2019 and subsequently terminated his employment. We anticipate a significant uptick in vaccine-related litigation as the smoke clears from the global pandemic.

Race Discrimination

Several events involving race discrimination over the last few years have made this issue a continued priority for the EEOC. So far, the Commission filed a few notable lawsuits involving race discrimination. In EEOC v. First Advantage Background Services Corp., Case No. 23-CV-958 (N.D. Ill. Feb. 16, 2023), the defendant allegedly used background check information to make discriminatory hiring decisions on the basis of race. In EEOC v. Bilal & Aaya Subway, Inc., Case No. 23-CV-129 (E.D.N.C. March 16, 2023) the EEOC filed a lawsuit alleging that three Subway franchises subjected employees to racial discrimination when their owner regularly made racist statements about Black people and terminated workers because they were Black. The EEOC asserted that the harassment was severe and pervasive, that the owner criticized traditionally Black hairstyles, and fired an employee with dreadlocks.

These filings indicated that the EEOC will continue to litigation race discrimination claims on a priority basis throughout the remainder of the fiscal year.

March 2023 Release Of Enforcement Statistics

On March 13, 2023, the EEOC published its fiscal year 2022 Annual Performance Report (FY 2022 APR), highlighting the Commission’s recovery of $513.7 million in monetary relief for more than 38,000 victims of employment discrimination, including nearly $40 million as a direct result of litigation resolutions.

This annual publication from the EEOC is noteworthy for employers in terms of recognizing the EEOC’s reach, understanding financial exposure for workplace discrimination claims, and identifying areas where the EEOC may focus its litigation efforts in the coming year.

It is a must read for corporate counsel, HR professional, and business leaders.

Strategic Priorities

Addressing systemic discrimination has long been a top priority for the EEOC. In FY 2022, the EEOC resolved over 300 systemic investigations on the merits, obtaining more than $29.7 million in monetary benefits. The EEOC also resolved 10 systemic lawsuits, obtaining over $28 million in relief for nearly 1,300 individuals and significant equitable relief. To ensure the systemic lawsuit cupboard was not left bare, the EEOC filed 13 new systemic lawsuits.

Advancing racial justice was another strategic priority for the EEOC in FY 2022. The FY 2022 APR notes that the EEOC resolved 18 lawsuits alleging race or national origin discrimination, for approximately $4.6 million in relief benefiting 298 individuals. In addition, nine of the new 13 systemic lawsuits include claims of race or national origin discrimination. The EEOC also conducted 468 race and color outreach events, which reached 52,675 attendees. This includes 143 racial justice events reaching 9,064 attendees.

Finally, in recent years the EEOC has indicated that the use of artificial intelligence (“AI”) and algorithmic fairness in employment decisions is a strategic priority. In addition to providing AI training to systemic enforcement teams in the EEOC’s field offices, the EEOC hosted 24 AI and algorithmic fairness outreach events for 1,192 attendees. The EEOC’s efforts culminated with one lawsuit filing in this area. Of note, the EEOC prepared two ADA-related guidance publications relative to the use of artificial intelligence.

We anticipate that the EEOC will continue to focus on these strategic priorities in the remaining months of FY 2023.

Other Notable Developments

Beyond touting its monetary successes, the FY 2022 APR also highlights the EEOC’s efforts in the community. The EEOC conducted 3,302 outreach and training events, providing more than 225,906 individuals nationwide with information about employment discrimination and their rights and responsibilities in the workplace. Among these outreach programs were 399 events for small businesses, which were attend by approximately 18,878 individuals. Finally, 369 outreach events concerned the intersection of COVID-19 and employment discrimination laws. These COVID-19 programs had 26,041 attendees.

The EEOC also expanded its digital footprint, as the EEOC’s website had 10.8 million users. This marks a 3% increase over fiscal year 2021. There were 16 million user sessions, a 4.4% increase over fiscal year 2021. The EEOC had over 29 million page views, a 4.4% increase over fiscal year 2021, and there was a 3% increase in mobile traffic on the website. This data suggests that potential charging parties and other various constituents are more actively engaging with the Commission through its online platforms.

Takeaways For Employers

The first six months of the EEOC’s FY 2023 started with changes in leadership and a focus on new strategic initiatives. With a vastly increased proposed budget, it is more crucial than ever for employers to take heed in regards to the EEOC’s strategic priorities and enforcement agendas.

Stay tuned to our blog for future updates regarding the EEOC’s litigation activities.

March 30, 2023 by Alex W. Karasik

Illinois Trial Court Grants Class Certification In BIPA Class Action

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

Takeaways: In Palacios v. H&M Hennes & Mauritz, LP, Case No. 18-CH-16030 (Cir. Ct. Cook County, Ill. Mar. 16, 2023), a state trial court in Illinois granted Plaintiff’s motion for class certification in an Illinois Biometric Information Privacy Act (the “BIPA”) class action. Given the limited jurisprudence in BIPA class action certification rulings, this decision is an important read for corporate counsel, as the ruling likely will be used as a roadmap by the plaintiffs’ bar to support their efforts to certify such classes.

Case Background

Plaintiff alleged that Defendant required him and other employees to scan their fingerprints into a biometric time clock system to record the time they worked, and unlawfully collected, possessed, and transferred their biometric information without consent and without a proper retention and destruction schedule. Plaintiff sought to certify a class of all hourly employees who enrolled in or used Defendant’s timekeeping system while working for Defendant between August 9, 2014, and October 15, 2019.

In terms of the four factors to certify the class – numerosity, adequacy of representation, commonality, and appropriateness – Defendant did not challenge the numerosity factor. However, Defendant challenged the motion for class certification regarding the other three factors.

The Court’s Decision

The Court granted Plaintiff’s motion for class certification. First, the Court held that the named Plaintiff was an adequate class representative. Defendant argued that, based on Plaintiff’s deposition testimony, he was, “uninformed and disinterested in the facts, the litigation, and his role as class representative.” The Court rejected this argument, holding that, “while [Plaintiff] may not understand legal jargon . . . he understands the basic facts . . . understands he is making a legal claim for violation privacy rights on behalf of a class of other employees [and] has been in regular communication with his counsel and participated in discovery.” Accordingly, the Court found that Plaintiff would adequately represent the putative class.

Second, the Court held that the commonality factor was met. Defendant contended that Plaintiff was at odds with the rest of the class since he alleged that he suffered emotional distress damages. The Court rejected this argument, holding that Plaintiff testified that he was harmed through a breach of his biometric information privacy rights and was pursuing the same claims on behalf of class members. Accordingly, the Court held that common questions predominated over questions affecting individual class members.

Finally, the Court explained that, “a class action must be an appropriate method for the fair and efficient adjudication of the controversy.” Id. (citations and quotations omitted). The Court opined that many individuals incurred relatively small liquidated damages and their likely recovery was probably too small to justify a separate action. However, collectively, the Court could adjudicate the putative class’s claims, as it noted, “This is what class actions were designed to achieve.” Id. Accordingly, the Court held that a class action was the appropriate method for the fair and efficient adjudication of the controversy.

Implications For Employers

While employers are likely still recovering from the sting of adverse Illinois Supreme Court BIPA class action rulings from early 2023, this decision marks another victory for the plaintiff’s bar. Defendants in BIPA class actions who are facing motions for class certification would be wise to avoid duplicating the arguments made here. In light of the shrinking number of potential BIPA defenses and skyrocketing damages, employers must begin exploring alternative defense strategies to combat these bet-the-company cases.

March 23, 2023 by Gerald L. Maatman, Jr.

Introducing The Duane Morris Wage & Hour Class And Collective Action Review – 2023

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

Duane Morris Takeaways: Complex wage & hour litigation has long been a focus of the plaintiffs’ class action bar. The relatively low standard by which plaintiffs can achieve conditional certification under the Fair Labor Standards Act (FLSA), often paired with state law wage & hour class claims, offers a potent combination by which plaintiffs can pursue myriad employment claims. To that end, the class action team at Duane Morris is pleased to present the inaugural edition of the Wage & Hour Class And Collective Action Review – 2023. This new publication analyzes the key wage & hour-related rulings and developments in 2022 and the significant legal decisions and trends impacting wage & hour class and collective action litigation for 2023. We hope that companies and employers will benefit from this resource and assist them with their compliance with these evolving laws and standards.

Click here to download a copy of the Wage & Hour Class And Collective Action Review – 2023 eBook.

Stay tuned for more wage & hour class and collective action analysis coming soon on our weekly podcast, the Class Action Weekly Wire.