Rebecca S. Bjork – Class Action Defense

February 18, 2026February 18, 2026 by Gerald L. Maatman, Jr.

Fourth Circuit Splits The Baby In Deciding That Virginia District Court Erred By Striking Class Allegations Under One Subsection Of Rule 23 But Not Another

By Gerald L. Maatman, Jr., Rebecca S. Bjork, and Anna Sheridan

Duane Morris Takeaways: On February 9, 2026, in Oliver, et al. v. Navy Federal Credit Union, Case No. 24-1656 (4th Cir. Feb. 9, 2026), the Fourth Circuit issued a 2-1 ruling partially affirming a district court’s order striking class allegations from a complaint alleging racial discrimination in mortgage lending before any discovery had occurred. In addition to the parties’ briefs, the Fourth Circuit received briefs from four amici supporting the defendant, indicating substantial interest in the outcome of the appeal. Navy Federal Credit Union prevailed in the district court on its motion to strike the class allegations from the complaint pled under Rule 23(b)(2) and Rule 23(b)(3). On appeal, the Fourth Circuit reversed the decision striking the Rule 23(b)(2) allegations because it found that the district court acted prematurely, given the legal standards governing when courts are authorized to do so (which it helpfully clarified). However, under those same legal standards, the majority concluded that the district court properly struck the plaintiffs’ Rule 23(b)(3) allegations. The dissenting judge concurred with the decision to affirm striking the Rule 23(b)(3) allegations but would also have affirmed the ruling striking the Rule 23(b)(2) allegations.

The decision is a helpful illustration of how defendants facing class action litigation can use the mechanism of Rule 23(c)(1)(A) to eliminate class-wide exposure early in the process, along with the limitations of such an approach.

Case Background

Laquita Oliver and nine other named plaintiffs, who all are either Black or Latino, brought a putative class action against Navy Federal Credit Union in 2023 alleging that the lender systematically discriminates against minority mortgage loan applicants based on their race. Slip op. at 3. Plaintiffs allege that the lender uses a “semi-automated underwriting process” and a single form for collecting information from every applicant that includes information that can be proxies for race, resulting in unlawful intentional and disparate impact discrimination. Id. at 4, 15-16. They sought class-wide relief for “all minority residential loan applicants from 2018 through the present” whose loans were denied, issued with less favorable terms, or processed more slowly than non-minority applicants. Id. at 4. Plaintiffs sought certification of a class to provide injunctive and declaratory relief generally applicable to the class as a whole under Rule 23(b)(2), and also certification under Rule 23(b)(3) – allowing class treatment where common issues predominate over individualized issues. Id. at 16.

The defendant filed a motion to dismiss under Rule 12(b)(6) and a motion to strike the class allegations in the complaint under Rule 12(f) and Rule 23(d)(1)(D). Id. at 5. It argued the case could not proceed as a class action due to myriad differences between the loan products they offer, and because the plaintiffs “failed to explain how an undefined underwriting process could produce discriminatory effects for class members who applied for different [loan] products.” Id. The district court denied the motion to dismiss but granted to motion to strike the class allegations, and the Plaintiffs appealed to the Fourth Circuit. Id. at 5.

The Fourth Circuit’s Decision

A divided panel of the Fourth Circuit affirmed the district court’s decision striking the Rule 23(b)(3) class allegations from Plaintiffs’ complaint before any discovery had occurred but reversed the decision to strike the class allegations seeking injunctive and declaratory relief under Rule 23(b)(2). The dissenting judge would have affirmed the district court’s decision in full.

As a threshold matter, which this blog’s more wonkish readers will appreciate, the Court of Appeals took the time to sort through a procedural miasma present in Rule 23 litigation relating to motions to strike class allegations. Navy Federal Credit Union, like many other defendants before them, had moved to strike under Rule 12(f) – which allows courts to strike material from complaints that they deem to be “redundant, immaterial, impertinent or scandalous” (id. at 7) – along with Rule 23(d)(1)(D), which allows them to order that a party amend their pleadings to remove class allegations. Id. at 8. The Fourth Circuit determined that those rules, as a logical and practical matter, cannot form the basis for a district court to issue an order striking class allegations, but instead, Rule 23(c)(1)(A) does. Id. at 6, 9. That rule requires district courts to decide class certification issues at “an early practicable time.” Fed. R. Civ. P. 23(c)(1)(A). Because a decision to strike class allegations necessarily implies that those allegations cannot possibly form the basis for a decision on class certification, the Fourth Circuit concluded that Rule 23(c), which is entirely concerned with the class certification process, is the proper procedural vehicle. Id. at 6-9. Even though Navy Federal Credit Union did not raise that rule as its procedural mechanism for seeking to strike the class allegations, the Court of Appeals decided it would do so sua sponte in affirming the order striking the Rule 23(b)(3) class. Id. at 9, n.1.

Then, the majority explained how district courts should analyze allegations in class action complaints when defendants move to strike them to determine whether the time is right to do so. In other words, such motions may not be granted prematurely, and district courts within the Fourth Circuit must now do so by looking to the face of the complaint. Applying the 1978 precedent established in Goodman v. Schlesinger, 584 F.2d 1325 (4th Cir. 1978), it decided that if the class claims fail as a matter of law, district courts may strike them before any discovery has occurred. Id. at 6. However, district courts commit legal error if they grant such motions where the dispute cannot readily be resolved by looking at the complaint alone. Id. at 11-12. The majority concluded that just as a district court may never grant class certification based solely on the face of the complaint, a court may deny class certification at that preliminary stage only if the class allegations do not satisfy Rule 23’s class certification requirements as a matter of law. Id. at 13.

Finally, the majority examined whether the district court erred when it granted Navy Federal Credit Union’s motion to strike both class claims before discovery occurred. It decided that the district court exceeded its discretion when it struck the Rule 23(b)(2) class claim, but it was not error to strike the Rule 23(b)(3) class claim. Id. at 14. The majority noted that while it was not entirely clear based on the record before why the district court ruled the way it did on the defendant’s motion, the language used indicated a concern from the district court judge about the manageability of the Rule 23(b)(3) class claims and whether a class action would be a superior method for trying such claims, given the material variations in the types of mortgage products applied for and their various requirements. Id. at 14-15. Thus, the plaintiffs’ factual allegations could not be tried on a class-wide basis consistent with Rule 23. But the allegations relating to the Rule 23(b)(2) injunctive relief class was different, the majority concluded. The allegations underlying that class claim are far more cohesive and centralized than the others, making it error for the district court to strike those allegations under Rule 23. Id. at 16-18.

Implications For Class Action Defendants

When companies are sued in class actions, it is crucial for them to have corporate counsel that understand not only the stakes and extreme exposure risk such lawsuits present, but also the nuances and often-changing jurisprudence governing Rule 23. Motions to strike class allegations are a very powerful tool for such companies to use, and the Fourth Circuit’s decision is a welcome clarification of how to think deliberately and critically about the prospects for such motion practice to succeed. The key is to understand the relationship between the specific facts alleged in such complaints and the requirements of Rule 23, in all of its nuances.

December 11, 2025December 11, 2025 by Gerald L. Maatman, Jr.

California Federal Court Holds That Minors Can Be Bound To Arbitration In A Class Action Context

By Gerald L. Maatman, Jr., Eden E. Anderson, and Rebecca S. Bjork

Duane Morris Takeaways: On December 9, 2025, Judge Yvonne Rogers of the U.S. District Court for the Northern District of California held in Williams, et al. v. Moon Active Ltd., Case No. 4:25-CV-01626 (N.D. Cal. Dec. 9, 2025), that when a minor to a contract states her intent to disaffirm “all contracts” with a defendant, such disaffirmance of a contract “as a whole” presents an issue of contract validity for an arbitrator to resolve, and is not a specific challenge to an arbitration clause’s delegation provision that a court must resolve. Under the Williams decision, if a minor wants a court to rule upon the validity of a delegation provision contained within an arbitration agreement, then the minor must specifically disaffirm the delegation provision and not merely the whole of the contract within which the delegation provision appears. As such, this ruling is a required read for corporate counsel managing litigation risks through arbitration program.

Case Background

D.K., a minor, used the defendant’s Coin Master mobile game, which allowed users to purchase coins to spin a slot machine feature. When D.K. created an account to play Coin Master, a pop up screen asked her to confirm she was over 18 and that she had read and agreed to Terms and Conditions (Terms) applicable to her usage, with a hyperlink to those Terms also furnished. The opening paragraph of the Terms mentioned in bold that the Terms included an arbitration clause, and provided a link directly to the section of the Terms containing the arbitration clause. The arbitration clause included a delegation provision whereby any disputes concerning the enforceability, validity, scope or severability were delegated to the arbitrator to resolve.

D.K.’s mother filed a class action lawsuit on her behalf asserting claims for negligence, unjust enrichment, and violations of California’s unfair competition law, and her counsel then sent letters to the defendant indicating that D.K. disaffirmed “all contracts” with the company. Id. at 3. The defendant moved to compel arbitration.

The Decision

The court granted the motion to compel arbitration. The court first addressed whether an arbitration contract had been formed. Because California law permits a minor to contract in the same manner as an adult subject to the power of disaffirmance, and because conspicuous notice of the arbitration clause was furnished, the court held the Terms were a validly formed contract between the parties.

As to whether D.K. had disaffirmed the Terms by sending a letter to the defendant disaffirming “all contracts,” the court agreed with the defendant that such issue was a validity challenge to the Terms as a whole that needed to be resolved by the arbitrator pursuant to the delegation clause. D.K. argued that the delegation clause could not apply since she had disaffirmed the Terms. In rejecting this argument, the court explained that while courts are permitted to decide specific challenges to delegation clauses, it is arbitrators who, pursuant to delegation clauses, are to determine challenges to the validity of an arbitration agreement as a whole. The court found that D.K.’s letter, which disaffirmed “all contracts,” was a challenge to the Terms as a whole because the letter did not single out the arbitration clause or its delegation provision. In so holding, the court distinguished the circumstances that were present in J.R. v. Electronic Arts, 98 Cal.App.5th 1107 (2024) because the minor there has specifically disaffirmed “any” contract rather than “all contracts.”

Implications of the Decision

The Williams decision highlights the importance of the wording used when a minor seeks to disaffirm an arbitration agreement.

Under Williams, for a court to address the validity of a delegation provision within an arbitration agreement, the minor must specifically disaffirm the delegation provision itself and not generally disavow “all contracts.”

December 1, 2025December 1, 2025 by Gerald L. Maatman, Jr.

District Of Columbia Federal Court Declines To Narrow EEOC’s Pregnancy-Bias Suit Against Security Firm

By Gerald L. Maatman, Jr., Rebecca Bjork, and Anna Sheridan

Key Takeaways: In EEOC v. Security Assurance Management Inc., No. 25-CV-00181, 2025 WL 2911781 (D.D.C. Oct. 14, 2025), Judge Rudolph Contreras of the U.S. District Court for the District of Columbia refused to pare back the EEOC’s pregnancy and lactation claims against Security Assurance Management, Inc. (“SAM”), leaving all five causes of action under the Pregnant Workers Fairness Act (PWFA) and both Title VII counts intact. Applying Rule 12(c), the Court held – in an order denying Defendant’s Partial Motion to Dismiss – the “heavy burden” on a defendant seeking judgment on the pleadings and determined that the EEOC’s theories — though factually overlapping — targeted distinct harms and therefore were not “duplicative.” The Court’s refusal to dismiss any of the EEOC’s PWFA counts sends a clear signal that defendants will face an uphill battle when trying to narrow pregnancy-related claims at the pleadings stage, particularly after filing an answer.

Case Background

The EEOC filed suit under Title VII and the PWFA on behalf of Simone Cooper, a special police officer who was reassigned after the client at her post did not want her working at the site while pregnant. (Compl. ¶ 17). As the court summarized, the EEOC “brings this employment discrimination action against Security Assurance Management, Inc. pursuant to Title VII … and the Pregnant Workers Fairness Act,” alleging that SAM “disciplined and removed an employee, Simone Cooper (‘Ms. Cooper’), from her assignment due to her pregnancy-related condition and her need for accommodations.” Id. at *3.

After her maternity leave, Cooper was placed at a Hampton Inn post where she “was breastfeeding and had the pregnancy-related medical condition of lactation.” Id. The court noted that she “could nonetheless perform the essential functions of her job as an Unarmed Special Police Officer,” but SAM “repeatedly denied or ignored Ms. Cooper’s accommodation requests.” Id. The consequences were significant, as “Ms. Cooper leaked through her clothing during the workday on at least two occasions,” and because SAM provided no adequate space, “Ms. Cooper had to pump in her car in the Hampton Inn parking lot.” Id.

Despite outreach by Cooper, her union representative, and her attorney, the company allegedly did not engage in any interactive process. SAM eventually issued a written warning for “excessive absenteeism” that included days she was not scheduled and the day she left after leaking through her uniform. Id. at *4. She was later removed from the schedule entirely.

The complaint asserts seven claims, including two under Title VII and five under the PWFA for failure to accommodate, adverse action based on accommodation requests, denial of employment opportunities, retaliation, and interference. After it filed its Answer, SAM filed a partial motion to dismiss seeking dismissal of three of the counts as purportedly duplicative.

The Court’s Ruling

Because SAM filed an Answer before seeking dismissal, the court treated the request as a Rule 12(c) motion. As Judge Contreras explained, such a motion “will be granted only if Defendant can demonstrate that no material fact is in dispute and that it is entitled to judgment as a matter of law,” and at this early stage the movant “shoulders a heavy burden of justification.” Id. at *6.

The Court began with its definition, citing from Wultz v. Islamic Republic of Iran’s “duplicative claim test.” It explained that “duplicative claims are those that stem from identical allegations, that are decided under identical legal standards, and for which identical relief is available.” Id. at *7 (quoting Wultz, 755 F. Supp. 2d 1, 81 (D.D.C. 2010)). SAM argued that several PWFA claims were repetitive, but after analyzing each count, the Court held otherwise.

Most notably, SAM asserted that the “Adverse Actions” claim duplicated the PWFA retaliation claim because both concerned similar employment decisions. Judge Contreras disagreed, emphasizing that the counts “assert different motivations for Defendant’s allegedly unlawful conduct.” Id. at *8. The adverse-action theory centers on actions taken “on account of” Cooper’s accommodation requests, while retaliation requires adverse treatment because she opposed unlawful practices. “Because Count Two (Adverse Actions) and Count Four (Retaliation) arise from different allegations,” the court concluded, “the claims are not duplicative.” Id. at *9.

The Court applied the same reasoning to SAM’s attempt to collapse the PWFA adverse-action, denial-of-opportunities, and interference counts into the single failure-to-accommodate claim. Those theories, Judge Contreras explained, each addressed different harms and are evaluated under distinct legal standards. As a result, “none are duplicative,” and the Court denied the motion in full. Id. at* 7.

Implications For Employers

This opinion is a reminder that overlapping facts do not automatically render multiple statutory claims redundant — especially under the PWFA, where Congress created several discrete causes of action aimed at different workplace harms. Courts are giving each theory breathing room rather than collapsing them into a single “pregnancy discrimination” count.

Procedurally, the decision warns defendants against using post-Answer motions to trim suits. Under Rule 12(c), the movant faces a “heavy burden,” and close questions typically favor allowing the case to proceed to discovery.

Substantively, the facts the Court credited (removing a visibly pregnant worker at a client’s request, ignoring repeated lactation-related accommodation needs, forcing pumping in a car, and disciplining a worker for consequences of inadequate accommodations) are the kinds of scenarios likely to support claims not just under the PWFA, but also under Title VII.

The decision reinforces that the PWFA is a powerful, stand-alone statute with multiple actionable theories. Courts will not readily prune these claims at the pleading stage, and the EEOC is deploying them aggressively. Employers should treat pregnancy-related accommodation requests with the same rigor as disability accommodations – engage promptly, document communications, provide appropriate space and break time, and avoid client-driven decisions that move or remove pregnant workers.

July 15, 2025July 15, 2025 by Gerald L. Maatman, Jr.

Maryland Joins With Other States Precluding Employees From Seeking Damages For De Minimis Claims For Allegedly Uncompensated Work Time Under State Law

By Gerald L. Maatman, Jr., Anna Sheridan, and Rebecca S. Bjork

Duane Morris Takeaways: On July 3, 2025, the Maryland Supreme Court held in Martinez v. Amazon.com, Serv., No. Misc. 17 (Md. July 3, 2025), that the long-standing common law doctrine de minimis curat lex applies to both the Maryland Wage & Hour Law (MWHL) and the Maryland Wage Payment and Collection Law (MWPCL). The Supreme Court aligned Maryland with federal precedent, reinforcing the principle that employers are not required to compensate employees for truly trivial amounts of uncompensated work time – what the U.S. Supreme Court has called “split second absurdities.” This ruling marks a notable win for employers in Maryland, who now have a potential defense against claims for brief unpaid time. For the defendant, the litigation will return to U.S. District Court for the District of Maryland – which had certified the question to the Maryland Supreme Court – for factual analysis on whether the time claimed by employees waiting in line to pass through security screening was truly de minimis.

Case Background

On December 2, 2021, Plaintiff Estefany Martinez brought a putative class and collective action in the U.S. District Court for the District of Maryland on behalf of current and former Amazon employees at its Baltimore fulfillment center. Id. at 2, 6. The Complaint alleged that Amazon failed to compensate employees for post-shift time spent in mandatory security screenings, which allegedly took between 3 and 15 minutes per shift. Id. at 5.

Martinez brought claims under the Fair Labor Standards Act (FLSA), MWHL, and MWPCL, seeking to recover unpaid wages and associated damages. On November 18, 2024, the District Court certified to the Maryland Supreme Court the following question: Does the doctrine of de minimis non curat lex, as described in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), and Sandifer v. U.S. Steel Corp., 571 U.S. 220 (2014), apply to claims brought under the Maryland Wage Payment and Collection Law and the Maryland Wage and Hour Law? Martinez v. Amazon.com Servs. LLC, No. 22-CV- 00502, 2024 WL 4817214, at *33 (D. Md. Nov. 18, 2024).

The Supreme Court of Maryland’s Ruling

On July 3, 2025, in a 5-2 opinion, the Supreme Court of Maryland held that the de minimis doctrine does apply to Maryland wage laws. Martinez. Slip op. at 2. The Supreme Court reasoned that Maryland wage laws are silent on the issue but were modeled on the FLSA, which has long been interpreted to permit employers to disregard “split-second absurdities” – short, administratively burdensome periods of unpaid time. See Anderson, 328 U.S. at 692.

The Supreme Court emphasized that Maryland’s General Assembly did not express any intent to abrogate the common law rule that the law does not concern itself with trifles. It reasoned that had the General Assembly intended to prohibit a de minimis exception, it would have said so. Martinez, Slip op. at 17-19. It further observed that Maryland’s regulatory definitions of compensable time, as reflected in COMAR 09.12.41.10, are consistent with federal standards and do not contradict the de minimis doctrine.

In support, the Supreme Court relied on Anderson v. Mt. Clemens Pottery Co., where the U.S. Supreme Court held that employees must be paid for all time spent working, including pre-shift activities integral to their principal duties. However, Anderson recognized that courts need not impose liability for “negligible time,” noting that “it is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved.” Anderson, at 692. After Anderson, the FLSA was not amended regarding the de minimis doctrine, rather it was determined that it was included in the statute all along.

Anderson also recognized the impracticality of recording every minute of work-related activity. It is from this recognition that the de minimis doctrine in wage law was born and later codified and clarified by the Portal-to-Portal Act of 1947.

The Supreme Court of Maryland also cited Sandifer v. U.S. Steel Corp., 571 U.S. 220, 229 (2014) (Martinez, Slip op. at 15), in which the U.S. Supreme Court reiterated that even under the FLSA, employers are not obligated to compensate for time that is too fleeting or difficult to track with precision. Maryland case law authorities have described the MWHL as the State “equivalent,” “parallel,” “partner,” and “counterpart” of the FLSA (id. at 23), and the MWHL mirrors many of the FLSA features, definitions, and exemptions and has remained “substantially similar” to the FLSA since the 1960s. Id. at 24-25. The Supreme Court emphasized that when the General Assembly enacted the Maryland wage laws, it did so against the backdrop of Anderson, Sandifer, and the Portal-to Portal Act, thereby implicitly adopting their contours unless stated otherwise.

Implications for Employers

While the Martinez decision provides employers some breathing room regarding irregular, brief, and administratively difficult to track periods of unpaid time, it does not offer a blanket exemption. Whether a given period of unpaid time qualifies as de minimis remains a highly fact-specific question. In future litigations, plaintiffs must now show that the time they allegedly were not paid for is more than “trifling.” We will follow the proceedings in the U.S. District Court in the Martinez case and keep our readers apprised of developments.

July 13, 2025 by Gerald L. Maatman, Jr.

The Ninth Circuit Joins Three Others In Holding Non-Resident Opt-In Plaintiffs In FLSA Collective Actions Must Demonstrate Specific Personal Jurisdiction, Curbing Litigation Risks For Employers Facing Wage And Hour Claims

By Gerald L. Maatman, Jr., Rebecca S. Bjork, and Betty Luu

Duane Morris Takeaways: On July 1, 2025, the U.S. Court of Appeals for the Ninth Circuit issued a decision in a case with major ramifications for employers facing wage and hour claims under the Fair Labor Standards Act. In Harrington v. Cracker Barrel Old Country Store, Inc., Nos. 23-15650, 24-1979 (9th Cir. July 1, 2025), a unanimous panel joined three other Circuits and held that the U.S. Supreme Court’s Decision in Bristol-Myers Squibb Co. v. Superior Court of Cal., 582 U.S. 255 (2017), applies to actions under the FLSA brought in federal court. This means that to achieve nationwide issuance of notice of a collective action under Section 216(b), each opt-in plaintiff must show a sufficient connection to the forum state. The impact will likely be fewer nationwide collective actions, which ultimately may reduce litigation pressure on employers who operate in states within the Ninth Circuit.

Background

Plaintiffs, former and current employes of Cracker Barrel, filed a class action lawsuit in the U.S. District Court for the District of Arizona against Cracker Barrel alleging violations of the Fair Labor and Standards Act (“FLSA”). Id. at 7. Plaintiffs moved for court authorization to send notice of a collective action under the FLSA to “all servers who worked for Cracker Barrel in states where it attempts to take a tip credit . . . over the last three years.” Id. at 7. Cracker Barrel objected on various grounds, including that the district court did not have personal jurisdiction over any of its employees outside of Arizona. Id. at 7. The district court granted the plaintiffs’ motion and ordered the issuance of nationwide notice because “the participation of one Arizona-based plaintiff was all that was needed to secure personal jurisdiction over Cracker Barrel for the collective action.” Id. at 7. Cracker Barrel appealed the district court’s decision to the Ninth Circuit.

The Ninth Circuit Joins The Third, Sixth and Eighth In Requiring Non-Resident Plaintiffs In FLSA Collective Actions To Establish Specific Personal Jurisdiction

The three-judge panel in Harrington unanimously held that where the basis for personal jurisdiction in an FLSA collective action is specific personal jurisdiction, the district court must assess whether each opt-in plaintiff’s claim bears a sufficient connection to the defendant’s activities in the forum state. In the case before them, they concluded that the district court authorized nationwide notice on the mistaken assumption that it would not need to assess specific personal jurisdiction on a claim-by-claim basis. As a result, it vacated and remanded for further proceedings.

In so doing, the Ninth Circuit held that the Supreme Court’s requirement outlined in Bristol-Myers — that non-resident plaintiffs in a mass tort action must establish their own basis for personal jurisdiction — applies in FLSA collective actions.

It therefore adopted the view of three other Circuits (the Third, Sixth, and Eighth) that non-resident plaintiffs must establish their own basis for specific personal jurisdiction in the context of an FLSA collective action. Thus, within the Ninth Circuit, a district court now must determine whether each opt-in plaintiff’s claim bears a sufficient connection to the defendant’s activities in the forum state.

Implications Of The Decision

Harrington v. Cracker Barrel means that in states encompassed within the Ninth Circuit, employers facing wage and hour collective actions will be far less likely to need to worry about the possibility of multi-state or nationwide issuance of notice under Section 216(b) of the FLSA.

This decision has enormously important implications for such employers. If nothing else, the vast geographic territory and population encompassed by the jurisdiction of the Ninth Circuit means that employers now have a powerful pre-certification defense argument to deploy to defend against putative nationwide collective actions, which tend to arise where large populations of potential opt-in plaintiffs are employed. We will follow the case on remand and keep our blog readers apprised as to how plaintiffs’ counsel proceeds in the district court.

June 5, 2025 by Gerald L. Maatman, Jr.

U.S. Supreme Court DIGs A Rule 23 Case And Justice Kavanaugh Dissents, Arguing Predominance Cannot Be Met Where Classes Include Uninjured Class Members

By Gerald L. Maatman, Jr. and Rebecca S. Bjork

Duane Morris Takeaways: On June 5, 2025, the U.S. Supreme Court issued a decision in Laboratory Corporation of America Holdings d/b/a Labcorp v. Davis, No. 24-304 (U.S. June 5, 2025), that dismissed the writ of certiorari as improvidently granted, an extremely rare move colloquially known as a “DIG.” Even more interesting, from the vantage point of issues that are the subject of this blog – namely, defense of class action litigation – Justice Kavanaugh wrote in dissent, stating that he would have decided the case and ruled that federal courts may not certify damages classes under Rule 23 that include both injured and uninjured class members. He reasoned that allowing such classes would not satisfy the Rule 23(b)(3) requirement that common issues predominate over individual issues. This unique decision, while it does not carry precedential weight, is instructive because the dissenting opinion provides a new roadmap for defendants facing class claims involving uninjured class members to challenge class certification, potentially keeping the door open for future review by the U.S. Supreme Court.

Background

The U.S. Supreme Court’s majority per curiam opinion dismissing the writ as improvidently granted is, as is typical, a perfunctory statement that says: “The writ of certiorari is dismissed as improvidently granted.” Slip op. at 1. The dissenting opinion authored by Justice Kavanaugh provides the background of the case, at least as it informs the issues he addresses in his dissent. His dissent starts by explaining that the majority decided the case was moot, but that he found that issue to be “insubstantial.” Id. at 1. He stated that he would have decided the case.

He provided the following background information — a federal district court in California certified a Rule 23 class of blind and visually impaired individuals who sued Labcorp, a company providing diagnostic medical testing services to consumers. The plaintiffs who brought the class action alleged they were “denied full and equal enjoyment of” goods, services, and accommodations required under the Americans with Disabilities Act by “LabCorp’s [sic] failure to make its e-check-in kiosks accessible to legally blind individuals.” Id. at 2. Later, the district court issued an order refining the class definition to include “all legally blind individuals who . . ., due to their disability” were unable to use Labcorp’s e-check in kiosks in California. Id. at 3.

Labcorp appealed the class certification decision to the Ninth Circuit under Rule 23(f). Id. The Ninth Circuit affirmed the district court and held that even if more than a de minimis number of class members are uninjured, Rule 23 allows district courts to certify such classes. Id. After en banc review was denied by the Ninth Circuit, the U. S. Supreme Court granted certiorari to decide the question whether Rule 23 authorizes certification of damages classes including uninjured class members.

Justice Kavanaugh’s Dissent From The U.S. Supreme Court’s DIG

In the substance of his dissenting opinion, Justice Kavanaugh opined that the predominance requirement of Rule 23 (b)(3) precludes district courts from certifying damages classes that include individuals who have suffered no legally cognizable injury. After discussing his disagreement with the majority’s analysis of the mootness issue (relating to whether Labcorp filed its Rule 23(f) petition against the correct class certification order), he analyzed the merits of the predominance inquiry. Id. at 4-5.

He reasoned that the Ninth Circuit decision ignores several U.S. Supreme Court decisions in the class actions area that, in his view, rule out including non-injury class members in damages classes (among them Comcast v. Behrend and Wal-Mart v. Dukes.) He also pointed to the Advisory Committee notes history of Rule 23(f) to conclude that it was established to prevent efforts to “coerce businesses into costly settlements” that include an unknown number of persons to have suffered no loss at all. Id. at 6. He also opined that such settlements raise the cost of doing business such that they create public policy effects such as higher costs of living that ultimately harm consumers, retirees and workers. Id.

Implications Of The Decision

The U.S. Supreme Court’s DIG order, while exceedingly rare, is actually not the big news embedded in this decision. The dissent by Justice Kavanaugh to the DIG order provides an explanation of how future litigants facing class actions that include individuals who have no legal injury conferring standing can present the issue in arguing Rule 23(b)(3) predominance. Companies facing the litigation pressures that class actions often produce should follow this blog for future developments in what we predict will be a significant area of litigation in the coming years.

February 12, 2025February 12, 2025 by Eden Anderson

The Federal Arbitration Act Turns 100

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

The Federal Arbitration Act (FAA) turns 100 years old today.

In enacting the FAA on February 12, 1925, Congress eliminated the power of the states to require that claims be resolved in court when contracting parties instead agree to resolve their claims in arbitration. The FAA’s purpose was to reverse longstanding judicial hostility to arbitration agreements, and to place arbitration agreements on equal footing with other contracts under the law.

As we celebrate the FAA’s 100th birthday, we highlight three key areas in which the FAA’s scope and application have come under scrutiny in recent years.

The Scope Of The Transportation Worker Exemption Remains Unclear

The FAA does not apply to employment contracts of seamen, railroad employees, and workers engaged in foreign or interstate commerce. The scope of this so-called transportation worker exemption has been a hotbed for litigation in recent years, with the U.S. Supreme Court addressing the issue in multiple decisions. The high court’s decisions in Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), Domino’s Pizza, LLC v. Carmona, et al., 143 S. Ct. 361 (2022), and Bissonnette v. LePage Bakeries Park St., LLC, 61 U.S. 246 (2024), emphasized that the transportation worker exemption is to be narrowly construed and that, for the exemption to apply, a worker must play a direct and necessary role in the free flow of goods across borders.

In the wake of these decisions, state and federal courts are now grappling with what that means and whether warehouse workers, last-mile delivery drivers, ride-hailing drivers, and fueling technicians meet the “direct and necessary role” test. While such classes of workers bear little resemblance to the seamen and railroad employees expressly excluded from the FAA’s scope, in jurisdictions hostile to arbitration, including California courts and the Ninth Circuit, the transportation worker exemption has been found to apply. It is therefore important for employers to include language in arbitration agreements that permits alternative enforcement of the agreement under state law if the FAA is found not to apply.

Does EFASHA Exempt Entire Cases From Arbitration?

On March 3, 2022, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFASHA). Under the EFASHA, an employee alleging sexual harassment or assault, whether individually or as a class representative, may pursue their claims in court rather than in arbitration, regardless of whether they agreed with their employer to arbitrate their claims.

But what happens when a plaintiff alleges such claims, but also alleges claims that permissibly can be arbitrated? Courts too have begun answering that question. Some courts have concluded that the EFASHA’s statutory language requires that the employee’s entire case remain in court, reasoning that the EFASHA makes a pre-dispute arbitration agreement invalid and unenforceable “with respect to a case” which means the entire case. (9 U.S.C. § 402(a) (emphasis added).) The court so concluded in Johnson v. Everyrealm, Inc., 657 F. Supp. 3d 535 (S.D.N.Y. 2023), in denying the employer’s motion to compel the plaintiff’s sex harassment, race discrimination, and retaliation claims to arbitration.

The outcome, however, differed in Mera v. SA Hosp. Grp., LLC, 675 F. Supp. 3d 442 (S.D.N.Y. 2023), wherein the plaintiff alleged claims that he experienced a hostile work environment on account of his sexual orientation and that he and other employees suffered state and federal wage and hour infractions. The court there determined that, because the wage and hour claims did not “relate to” the hostile work environment claim, the wage and hour claims could be compelled to arbitration. Id. at 447.

If a plaintiff can allege a plausible claim that triggers the EFASHA’s application, they may be successful in keeping all their claims in court, or possibly only some of them.

We anticipate continued litigation in this area, and an uptick in the assertion of tenuous sex-based harassment claims that might not otherwise have been plead.

Appellate Issues Raised By Recent Case And Legislative Developments

What happens to the trial court proceedings after a decision on a motion to compel arbitration has also been a hotly litigated issue.

In Smith v. Spizzirri, 601 U.S. 472 (2024), the U.S. Supreme Court held that, when a federal court finds that a dispute is subject to arbitration and a party has requested a stay of the court proceeding pending arbitration, the FAA compels the court to stay, and to not dismiss, the proceeding. Consequently, if a plaintiff’s claims are compelled to arbitration and the district court proceedings stayed, there will be no judgment with an associated right to appeal. Thus, the plaintiff’s only recourse—if they dispute the arbitration ruling—will be to seek permission to pursue an interlocutory appeal or to pursue an appeal of the forum issue long after the fact if and when they lose in arbitration.

Another stay issue that will surely be litigated concerns a 2024 amendment to California’s Code of Civil Procedure. In California, if a motion to compel arbitration is denied and that decision is appealed, there is now no longer an automatic stay of the court proceedings during the pendency of an appeal. As a result, plaintiffs can seemingly proceed with their claims in court while the employer seeks a reversal of the forum issue on appeal, unless the appellant seeks and obtains a stay from the trial court. As this law on its face disfavors arbitrate, we anticipate it will be challenged.

For a more comprehensive summary of FAA-related litigation issues, Duane Morris’s 2025 Wage & Hour Class and Collective Action Review, available here, features an entire Chapter on this topic.

February 11, 2025February 11, 2025 by Rebecca S. Bjork

Kansas Federal Court Declines To Revisit Motion for Summary Judgment Order In EEOC Lawsuit And Rejects Interlocutory Appeal Request By Employer

By Rebecca S. Bjork, Gerald L. Maatman, Jr., and Anna Sheridan

Duane Morris Takeaways: A Federal Judge in Kansas recently refused a request for reconsideration of summary judgment and a request for interlocutory appeal on the correct legal standard for hostile work environment claims post-Muldrow v. City of St. Louis, Mo. In EEOC v. Chipotle Services, LLC, Case No. 23-CV-2439 (D. Kan. Feb. 10, 2025) (linked here), Judge Kathryn H. Vratil of the U.S. District Court for the District of Kansas found that appellate review of the Muldrow standard used at summary judgment likely would not affect the case substantially, but rather lead to delay before the case would proceed in the same manner regardless of a decision by the Tenth Circuit. The opinion also rejected the employer’s motion for reconsideration to rehash arguments it should have made on summary judgment – in the Court’s view, an inappropriate use of a motion for reconsideration. This decision not only highlights the importance of timely arguments made at the appropriate stage of litigation, but also counsels employers to analyze and balance the potential outcomes of motions with the time and costs associated with non-dispositive or only partially dispositive motions.

Case Background

Areej Saifan, a Muslim woman, and former Chipotle crew member, alleged in a Charge of Discrimination that she experienced religious harassment from a co-worker during her employment. Saifan alleges that a co-worker repeatedly asked to see Saifan’s hair, which was covered by hijab, and on at least one occasion, the co-worker physically pulled on the hijab, partially uncovering Saifan’s hair. Saifan resigned the next day. After investigating the Charge, the EEOC filed suit on behalf of Ms. Saifan against Chipotle alleging that Chipotle (1) subjected Saifan to unlawful religious harassment, (2) constructively discharged her, and (3) retaliated against her for reporting religious harassment.

Chipotle filed a motion for summary judgment on all three of the EEOC’s Title VII claims but was unsuccessful on all counts.

On December 17, 2024, defendant filed two motions, asking the Court to (1) reconsider its order on defendant’s summary judgment motion, and (2) certify an interlocutory appeal.

The Court’s Ruling

Judge Vratil dismissed defendant’s motion for reconsideration as “simply a rehash of arguments that it made or could have made on summary judgment.” Slip Op. at 5. The Court rejected each of Defendant’s positions as an argument that “it [Defendant] could have raised in summary judgment briefing and chose not to.” Id. at 8. The Court found that Chipotle had not met its burden of showing an intervening change in the controlling law, availability of new evidence, or the need to correct clear error or prevent manifest injustice as is required by the local Kansas rules.

Judicial economy also took center stage in this ruling when the Court denied the motion to certify its Memorandum and Order for immediate appeal, finding that an interlocutory appeal would not materially advance the ultimate termination of the litigation. While the question of whether Muldrow changed the legal standard for hostile work environment is a controlling question of law, the Court determined that Chipotle failed to establish that the Tenth Circuit would likely dispose or affect the EEOC’s claims for trial. As such, an interlocutory appeal would only delay, rather than expedite or eliminate trial.

Implications For Employers

Employers often may want to fight a non-dispositive decision that feels unfair. However, this decision counsels employers to consider the implications of motions practice before proceeding if the requested outcome would not materially change the future of the case.

January 16, 2025January 17, 2025 by Rebecca S. Bjork

Post-Removal Amendment To Hybrid State/Federal Law Complaint Dropping Federal Law Claims Requires Remand To State Court, Says SCOTUS

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

Duane Morris Takeaway: In a unanimous decision issued on January 15, 2025, the U.S. Supreme Court decided in Royal Canin U. S. A. v. Wullschleger, No. 23-677 (U.S. Jan. 15, 2025), that when a plaintiff files a civil suit under both state and federal law and subsequently amends the complaint to drop the federal law claims, the case must be remanded to state court due to lack of subject matter jurisdiction in the district court. This decision lends clarity to employers who have been navigating a circuit split on the question of whether federal district court subject matter jurisdiction is determined at the time of removal to federal court, or whether subsequent amendments abandoning federal claims destroys such jurisdiction. This issue arises over and over again in class action litigation.

Introduction

In a decision that will provoke readers’ memories (fondly or otherwise) of first year civil procedure class in law school, the U.S. Supreme Court ruled that a plaintiff’s deceptive marketing lawsuit originally stating both state and federal causes of action, that later dropped the federal claim in an amended complaint, must be remanded to state court. In a 9-0 decision, Justice Kagan explained that once the state law claims are stripped away, no federal subject matter jurisdiction exists and remand is required. Deciding a split amongst the circuit courts, the Supreme Court sided with the Eighth Circuit – and against the First, Third, Fourth, Sixth and Eleventh Circuits – in deciding that when a case is removed to federal court, an amended complaint dropping the federal claims destroys the district court’s jurisdiction.

This is obviously of interest for employers facing federal statutory class-wide claims involving issues such as wage and hour and discrimination, that also implicate overlapping state statutes.

The Ruling In Royal Canin U. S. A. v. Wullschleger

The U.S. Supreme Court issued its unanimous decision in Royal Canin U. S. A. v. Wullschleger, No. 23-677 (U.S. Jan. 15, 2025). In this case, the plaintiff purchased the defendant’s dog food that requires a prescription to obtain, believing that it contains medicine that off-the shelf dog food does not. Id. at 4. After learning that it does not, she filed suit in Missouri state court alleging violations of the state’s statute against deceptive marketing practices. Her complaint also included a claim under the federal Food, Drug and Cosmetic Act, 21 U.S.C. 301 (“FDCA”), that also forbids deceptive marketing practices.

Royal Canin, seeking perhaps to avoid being thrown to the dogs in a state court jury pool, decided to file a notice of removal of the plaintiff’s lawsuit to federal district court based on federal question jurisdiction (the plaintiff’s FDCA count). Id. at 4-5. In response, the plaintiff amended her complaint, dropping the FDCA claim, and only seeking relief under Missouri state law. Id. at 5. She then moved to remand to state court where she originally filed her complaint, but the district court denied her motion. Id. She ultimately appealed the dismissal of her amended complaint on the merits to the Eighth Circuit, and it reversed the district court’s decision to maintain jurisdiction of the matter and remanded it to state court. Id. Royal Canin sought certiorari to resolve the circuit split, and the Supreme Court obliged and affirmed the Eight Circuit’s ruling.

Basis Of The Supreme Court’s Opinion

In a very systematic and straightforward opinion of the Court, Justice Kagan explained why the limitations on federal court jurisdiction established by statute (e.g., 28 U.S.C. 1331 – cases “arising under” federal law) mandate SCOTUS’ unanimous conclusion. Long-established precedent holds that federal courts are courts of limited jurisdiction. Also, Congress has determined the scope of “supplemental jurisdiction,” where federal courts interpret and apply state law but only so long as they have concurrent federal jurisdiction to do so in the litigation. 28 U.S.C. 1367. And, the Supreme Court emphasized another statute that mandates that if at any time it appears that the federal court lacks subject matter jurisdiction, the case “must” be remanded to state court. 28 U.S.C. 1447(c). Id. at 3-4.

Applying these principles, the Supreme Court rejected Royal Canin’s argument that such limitations do not apply once a case has been removed to federal court and so-called “removal jurisdiction” exists. The Supreme Court explained, “Royal Canin argues that our precedent makes an exception for when an amendment [to a complaint] follows a lawsuit’s removal, but that is to read two bits of gratuitous language for a good deal more than they are worth.” Id. at 6. The Supreme Court continued that “Nothing in § 1367’s text . . . distinguishes between cases removed to federal court and cases originally filed there.” Id. at 8. And, unfortunately for Royal Canin, the Supreme Court has already held that in such a circumstance relating to original jurisdiction, the amended complaint is what determines jurisdiction, not the one at the time of removal. Id. As a result, the Supreme Court concluded that when the plaintiff “reconfigured her case to make it only about state law” her suit “became one for a state court.” Id. at 20.

Implications For Employers

As employers know, many class and collective action lawsuits are filed by plaintiffs that allege both state law and federal law claims. The classic example is a hybrid class and collective action under the Fair Labor Standards Act and a similar but often more onerous state statute governing how employees are paid. In our experience, many plaintiffs add their state law claims in order to extend the relevant statute of limitations period, for example, or sweep in certain state law substantive claims that are not available under a governing federal law.

Royal Canin U. S. A. v. Wullschleger will simplify litigation strategy decisions for employers with nationwide workforces. However, it remains to be seen how the plaintiffs’ bar will respond in terms of crafting both original and amended complaint strategies in the employment law space. We will be following developments closely and will provide our analysis and insights here.

December 4, 2024 by Gerald L. Maatman, Jr.

Rhode Island Federal Court Rules That Defendants Waived Their Right To Arbitration By Refusing To Pay AAA Filing Fees

By Gerald L. Maatman, Jr., Rebecca S. Bjork, and Eden E. Anderson

Duane Morris Takeaway: In 5-Star General Store, et al. v. American Express Co., 2024 U.S. Dist. LEXIS 217246 (D.R.I. Dec. 2, 2024), Judge Mary McElroy of the U.S. District Court for the District Court of Rhode Island held that the defendants could not move to compel arbitration on the issue of whether it was required to pay filing fees to the American Arbitration Association. This ruling presents an unusual twist to arbitration issues typically resolved by federal courts and is a cautionary warning for companies.

Background

The 5-Star General Store case is an antitrust action brought by merchants who resolved certain claims with American Express entities in arbitration relating to the acceptance of the defendants’ credit cards for purchases at their stores. After the final order was issued, the defendants refused to pay their share of the filing fees to the American Arbitration Association, which totaled more than $17 million. The AAA administratively closed the case and the plaintiffs filed a class action relative to those fees. The defendants moved to compel arbitration of the lawsuit’s claims and to strike the plaintiffs’ class allegations.

The Court’s Ruling

The court denied the defendants’ motion to compel arbitration on whether they were required to pay the AAA filing fees and denied the defendants’ motion to strike the plaintiffs’ class allegations. The plaintiffs sought to represent more than 5,000 merchants accepting the defendants’ cards. They argued that the defendants had waived their right to arbitration by failing to pay their share of the arbitration fees because they were in default of the agreement under § 3 of the FAA. First, the court ruled that it, not an arbitrator, had the authority to decide whether the defendants defaulted on the arbitration agreement. Although the court found no controlling case law authority directly on point, it decided to follow the Fifth, Ninth, Tenth and Eleventh Circuits, which have held that courts may decide whether failure to pay arbitration fees constitutes a default under § 3.

Second, the court focused on whether the defendants were in default of the agreement. Relying on Black’s Law Dictionary, which defines “default” as “the omission or failure to perform a legal or contractual duty; esp., the failure to pay a debt when due,” the court found the issue to be clear and concluded that the defendants defaulted on the arbitration agreement. Id. at *12. It also opined that a second arbitration likely would not fare any better than the first and the parties would end up before the court again.

Third, the court rejected the defendants’ claim that the plaintiffs lacked clean hands and therefore should not be allowed to pursue their claims in court. The court reasoned that the plaintiffs did not change their theory of their case sufficiently when filing the instant case to rescind the defendants’ waiver of arbitration. Therefore, the court denied the defendants’ motion to compel arbitration.

Finally, the court also denied the defendants’ motion to strike the plaintiffs’ class allegations because the class was ascertainable by objective means and the class definition was not “fail safe” because it did not contain a legal conclusion that determines eligibility for class membership. Id. at *32-33. The court further considered and rejected the defendants’ claims that the plaintiffs’ requests for injunctive and declaratory relief under Rule 23(b)(2) and 23(c)(4), including certification of issues classes, should be stricken at the pleading stage.

Implications For Companies:

This ruling should serve as a cautionary tale to companies that regularly seek to enforce mandatory arbitration agreements when those agreements require individual arbitration. The defendants’ failure to pay filing fees for thousands of individual arbitrations could lead to a complete waiver of the ability to compel arbitration of the claims in the future.