Shannon Noelle – Class Action Defense

June 17, 2025 by Gerald L. Maatman, Jr.

Nothing Common or Predominant About Emotional Distress Damages

By Gerald L. Maatman, Jr., Shannon Noelle, and Anna Sheridan

Duane Morris Takeaways: In an opinion issued on May 29, 2025, Judge Christy Wiegand of the U.S. District Court for the Western District of Pennsylvania denied class certification of two proposed classes under the Fair Debt Collections Practices Act (“FDCPA”) (one in the alternative in the event of failure of the first) finding that the predominance requirement of Rule 23(b)(3) was not met where putative class members’ standing would depend on individualized inquiries “highly specific” to each member or was based solely on the fact that the member was a consumer that received a debt collection letter (whether it was read or not). The ruling is a defense blueprint for defending FDCPA cases.

Case Background

Named Plaintiff Jeffrey Lezark brought a putative class action under the FDCPA against I.C. System, Inc. (“ICS”), a debt collector, that allegedly sent Lezark and putative class members debt collection letters (“540 Letters”) to collect on a medical debt. The 540 Letter stated in relevant part that “[i]f you fail to contact us to discuss payment of this account, our client has authorized us to pursue additional remedies to recover the balance due, including referring the account to any attorney.” (ECF 91 ¶ 17). Lezark alleged that, in sending the 540 Letter, ICS violated the FDCPA by implying that legal action was possible to collect the debt when it was not. The Court authorized distribution of a Claim Form Questionnaire to putative class members to enable Lezark to collect information regarding their standing. The Questionnaire asked respondents for their individual experience upon reading the 540 Letter. Putative class members were instructed not to fill out the questionnaire if they did not read the 540 Letter. The questionnaire asked if putative class members: (1) felt anxious, overwhelmed, or stressed because they believed they could be subject to legal action or have debt referred to an attorney; (2) contacted an attorney or some other person because they believed they could be subject to legal action or debt could be referred to an attorney; (3) contacted ICS because they believed that they could be subject to legal action or that their debt could be referred to an attorney; (4) made a payment on their account because they believed they could be subject to legal action or their debt could be referred to an attorney; or (5) experienced some other event or engaged in some other conduct after reading the 540 Letter.

Lezark proposed one class definition consisting of “all individuals in the state of Pennsylvania who within the applicable statute of limitations, received a letter from Defendant in which Defendant claimed it was authorized to refer a medical debt to an attorney, incurred said debt from a medical provider that entered into a contract with Defendant in which the provider elected [NLAR] and/or litigation referral and incurred such debt for personal, family, and/or household purposes.” (ECF 130, at 4). There were over 15,000 putative class members of this first proposed class. Lezark also sought certification of an alternative class definition if the Court determined the first class definition could not be certified consisting of “[a]ll individuals who: signed, dated, and returned the Claim Form Questionnaire; checked the first, second, third, fourth, and/or fifth box on the Claim Form Questionnaire; and did not indicate that they failed to receive or read the 540 Letter.” Id. There were over 700 putative class members of this alternative proposed class.

ICS focused its opposition on challenging both proposed class definitions adherence to Rule 23(b)(3)’s predominance requirement. ICS specifically cited to and relied on TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), where the U.S. Supreme Court held that federal courts must “affirmatively determine that each putative class member has Article III standing before awarding that class member damages,” arguing that both proposed class definitions would require individualized factual inquiries into the injuries sustained by each putative class member. See ECF No. 142 (citing ICS’ opposition brief, ECF No. 136 at 14). As to the first class definition, Lezark argued that there was standing under Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982) as each class member suffered an injury “in precisely the form [that the FDCPA] was intended to guard against.” Havens, 455 U.S. at 364.As it regards the alternative proposed class definition, Lezark argued that Huber v. Simon’s Agency, Inc., 84 F.4th 132, 150 (3d Cir. 2023), confers standing as, in that case, the Third Circuit held that the named plaintiff that received a debt collection letter had standing as the plaintiff identified “an allegedly deceptive communication and specific harmful action and inaction she took as a result of the communication.” Huber, 84 F.4th at 150. The District Court rejected both proposed class definitions and Plaintiff’s argument that case law precedent supported certification in this context.

As to the Havens standing argument for the first proposed class definition, the Court found that the Havens decisions was a distinguishable and narrow holding applicable to the Fair Housing Act (“FHA”) and not a proposed FDCPA class definition. The Court explained that “the plaintiff in Havens was not just given false information but suffered a concrete injury in the form of racial discrimination prohibited by the FHA.” See ECF No. 142, at 13 (citing Havens, 373-74). The Court found that Lezark’s argument — that any consumer that is the object of a misrepresentation made unlawful under the FDCPA has de facto suffered an injury in the precise form prohibited by the FDCPA — was in direct tension with the TransUnion decision. The Supreme Court in TransUnion rejected the proposition that “a plaintiff automatically satisfied the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” 594 U.S. at 426. The Court, therefore, declined to extend the logic in Havens to “the 15,000-plus Proposed Class members” that “simply . . . receive the 540 Letter” with no “evidence that they read it, let alone suffered any downstream harm as a result.” See ECF No. 142 at 14.

As to the alternative proposed class definition that Plaintiff argued had viability under Huber, the Court pointed out that Huber only found standing as to the named plaintiff and had been remanded to the district court to make a predominance determination. The Court highlighted that Huber guided the district court on remand to evaluate whether each putative class member “undertook the kind of determinant action or inaction required for standing” and could show the same with a “plausible straight forward method” suitable for class adjudication. Huber, 84 F.4th at 157-58. Applying this directive, the District Court found that Lezark himself had demonstrated standing, having shown evidence of emotional distress and the decision to file for bankruptcy based on the 540 Letter, but the putative class members did not. Plaintiff had to show that putative class members could “likely” demonstrate standing through summary judgment and trial but the Court found that given that standing was “premised on suffering emotional distress and/or taking particular actions in response to the 540 Letter” this “necessarily” would require “individualized and highly” specific inquiries as to each member requiring deposition testimony, cross and direct examination, and medical records. See ECF No. 142 at 10-11.

Implications For Employers and Debt Collectors

This decision reinforces that plaintiffs’ burden at the certification stage of demonstrating concrete, particularized injury is not a mere formality. To the contrary, plaintiffs must come forward with evidence showing that putative class members can likely demonstrate standing through summary judgment and trial using a method that is common amongst all class members and unlikely to produce individualized mini trials on the issue of damages. The Lezark decision also further underscores that this burden is particularly high in cases asserting standing on the basis of emotional distress or intangible injuries.

May 20, 2025May 20, 2025 by Gerald L. Maatman, Jr.

When Removing Diversity Cases Defendants Cannot “Embiggen” The Amount-In-Controversy Through Attorneys’ Fee Estimates

By Gerald L. Maatman, Jr., Shannon Noelle, and Anna Sheridan

Duane Morris Takeaways: In an order issued on May 13, 2025, Judge Joshua Wolson of the U.S. District Court for the Eastern District of Pennsylvania ruled that a case removed to federal court on the basis of diversity jurisdiction had to be remanded back to state court given that the amount-in-controversy (AIC) alleged was based on an attorneys’ fee award that exceeded the plaintiff’s damages award by “at least seven times.”

Case Background

On January 9, 2025, Plaintiff Frank Wise sued his former employer Kimberly-Clark, a manufacturer of paper-based consumer products, in the Philadelphia Court of Common Pleas on behalf of himself and a putative class, accusing his former employer of violating the Pennsylvania Minimum Wage Act (“PMWA”) by failing to pay overtime for the time spent walking to and from job assignments in the Defendant’s manufacturing facility. As part of its remedial regime, the PMWA permits a prevailing party to recover “reasonable” attorneys’ fees. Plaintiff Wise estimated that his damages totaled $9,350.30, but on his cover sheet he indicated that the amount in controversy totaled “[m]ore than $50,000.00” for the amalgamated claims of the class. (ECF No. 1-3, p. 2).

On February 26, 2025, Defendant Kimberly-Clark removed the action to federal court, asserting that the amount in controversy was over $75,000 because Plaintiff Wise “may try to recover at least $78,375.00 in attorney’s fees.” (ECF No. 1 ¶¶ 24, 29). Plaintiff Wise moved to remand by including with that motion a declaration from his attorneys that if the lawsuit proceeded on an individual, rather than a class wide basis, the Plaintiff and his attorneys would waive the right to recover attorneys’ fees that would cause the amount in controversy to cross $75,000.

The Court’s Order

Judge Wolson found that Defendant Kimberly-Clark did not carry its burden to demonstrate that the amount in controversy exceeded $75,000, which the Defendant primarily based on its attorneys’ fees estimate. Although attorneys’ fees can be factored into the amount in controversy threshold, the attorneys’ fees sought must be reasonable. To pinpoint the legal standard under Pennsylvania law for determining when an award of attorneys’ fees is reasonable, Judge Wolson surveyed case law interpreting statutes similar to the PMWA, such as the Pennsylvania Unfair Trade Practices and Consumer Protection Law, where Pennsylvania courts determined that the “term reasonable” incorporates the concept of proportionality between the damages award and attorneys’ fees award. Though Pennsylvania law contains no “hard-and-fast rule for the acceptable ratio,” courts consider “the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite properly to conduct the case, the customary charges of the members of the bar for similar services, the amount involved in the controversy and benefits resulting to the clients from the services, and the contingency or certainty of the compensation.” (internal citations and quotations omitted). Applying this framework, Judge Wolson found that a 7:1 ratio for attorneys’ fees as compared to damages was unreasonable and could not be used to reach the jurisdictional threshold.

Judge Wolson further opined that this conclusion also was consistent with protecting the judicial economy of federal courts as litigants and attorneys should not be able to use exorbitant attorneys’ fees estimates to circumvent the amount in controversy requirement to invoke diversity jurisdiction. In the case at hand, the parties agreed for purposes of the motion that Plaintiff Wise could recover $9,350.30 in monetary damages and that the legal issues at hand involved straight-forward unpaid overtime claims. Notably, Judge Wolson also found the Plaintiff’s attorneys’ declaration, waiving the right to collect attorneys’ fees, to be unavailing as it arguably amended the complaint.

Implications For Employers

The Court’s holding in Wise emphasizes the importance of providing concrete evidence regarding damages sought and reasonable attorneys’ fee estimates when seeking to remove based on diversity jurisdiction. Ultimately, the damages and attorneys’ fees alleged in the complaint take precedence, but proportionality must be considered even in the context of fee shifting statutes. If a party’s jurisdictional math does not add up, they may be sent back to where the matter started: state court.

May 8, 2025May 8, 2025 by Gerald L. Maatman, Jr.

Class Action Issues In 2025 – Report From The 9th Annual Class Action Conference In New York City

By Gerald L. Maatman, Jr., Jennifer A. Riley, Shannon Noelle, and Anna Sheridan

Duane Morris Takeaways: On May 8, 2025, the Beard Group sponsored the Class Action Money & Ethics Conference in New York City. During the conference, over 200 attendees discussed key issues impacting class action litigation in 2025. We were privileged to chair the Conference and present the keynote address on class action litigation trends for the past year and what 2025 has in store for Corporate America. The discussion at the program underscores the cutting-edge issues facing companies in this area of law.

Key Trends For The Past Year

In our keynote address, we discussed the top ten developments in the class action litigation space. The leading trends center on the new era of heightened risks and elevated exposures that pivot on record-breaking settlement numbers, the high conversion numbers for class certification motions into certified classes, and the rise in privacy and data breach class actions.

On the settlement front, 2022 saw $66 billion in total proceeds when measured by the top ten settlements in all areas of law. In 2023, that figure totaled $51 billion, for a combined total of $117 billion over the past 24 months. And in 2024, those numbers came in at $42 billion, which pushed the settlement numbers to $159 billion for the past 36 months.

In terms of class certification motions, the Plaintiffs bar successfully secured certification in 63% of cases over the past year. Those figures ranged from nearly 83% in WARN lawsuits to 37% in RICO cases. That said, the plaintiffs’ bar has proven its track record to convert class action lawsuit filings in to certified classes at a high rate.

In the privacy and data breach space, such claims became ubiquitous in 2024, with a virtual explosion in those types of lawsuits. While certification rates were quite low in data breach situations, the plaintiffs’ bar secured certification in privacy class actions at a higher rate.

We also discussed how class actions over environmental. social, and governance issues went mainstream in the past year. We predicted that ESG class actions will continue to increase, especially as the plaintiffs’ bar refines their theories of recovery and begin to monetize their claims. In particular, securities fraud class actions over DEI commitments are increasing as a result of the U.S. Supreme Court’s recent decision in Students For Fair Admissions, Inc., et al. v. President And Fellows Of Harvard College, 600 U.S. 181 (2023). Both plaintiffs’ lawyers and defense counsel anticipate more litigation in this space.

Data Breach Panel

An interesting panel discussion – consisting primarily of plaintiffs’ lawyers – ensued after the keynote address on wiretapping class claims under the Video Privacy Protection Act and data privacy class action litigation. They reflected on the patchwork quilt of rulings in these areas over the past year and the low certification rates due to problems in surmounting standing issues based on lack of injury-in-fact showings.

The panelists predicted a subtle shift in privacy and data breach lawsuits to effectuate a “work around” to these impediments. Multiple plaintiffs’ counsel predicted more reliance on state law claims and litigation of class-wide claims in state court.

Panel On Class Notice Strategies

The next panel focused on trends for class notice in 2025 and how artificial intelligence is now mainstream in terms of its use to facilitate the notice send to class members. The panelists expressed how these practices are quite innovative and rapidly evolving. Notice through social media and/or texts or email also is considerable cheaper than U.S. Mail, which is driving down settlement administration costs.

The challenge, however, is to prevent fraudulent claims from individuals seeking a share of the settlement pot. As to take rates, social media advertising is driving the rates upward, but the rates in data breach cases remain low at 1% to 5% (as compared to other types of settlements).- Class member demographics also impact the take rate, as older individuals are apt to view social media notice as “junk mail” or a scam. Conversely, staying ahead of fraudsters has created an imperative for settlement administrators (e.g., where settlement shares are claimed by an IP address of a bot).

Panel On Fraud In The Class Action Process

Another panel discussed the rise of fraudsters in the class action space. Some involve “deep fakes” of persons who seek to assert false claims as named plaintiffs or class members. Others involve cyber-criminals who infiltrate the settlement administration process through artificial intelligence software and seek class settlement shares on a false basis.

Judicial responses have run the gamut from shutting down the settlement administration process and rebooting it with enhanced security measures to referrals to law enforcement personnel to combat fraud. Panelists predicted that judges are apt to ratchet up the scrutiny of final settlement approval of class actions, and possibly promote direct mail notice over digital communications.

Implications For Companies

Class action litigation is a fact of life for corporations operating in the United States. Today’s conference underscored that change is inevitable, and class actions litigation is no exception.

April 14, 2025 by Gerald L. Maatman, Jr.

Visualize This: The Sixth Circuit Holds That The VPPA Applies Only To Consumers Of Audio-Visual Materials

By Gerald L. Maatman, Jr., Shannon Noelle, and Ryan T. Garippo

Duane Morris Takeaways: On April 3, 2025, in Salazar, et al. v. Paramount Global, d/b/a 247Sports, Case No. 23-5748, 2025 WL 1000139 (6th Cir. Apr. 3, 2025), the Sixth Circuit departed from two other federal circuits (i.e., the Second and Seventh Circuits) in its interpretation of “consumers” covered by the Video Privacy Protection Act (“VPPA”), and affirmed the district court’s dismissal of a putative class action on the basis that only consumers of audio-visual related materials are covered by the protections of the Act. The Sixth Circuit’s holding narrows the scope and reach of the statute and is a welcome reprieve for companies offering video content on their websites in connection with advertising technology (“adtech”).

Background

In September 2022, Michael Salazar brought a putative class action against Paramount Global (i.e., the owner of 247Sports.com), claiming that the media company violated the VPPA because it installed Meta Pixel on its website. Salazar alleged that Meta Pixel, a form of adtech, tracked his and putative class members’ video viewing history and disclosed it to Meta without his consent. He sought to represent a putative class of subscribers to 247Sports.com’s newsletter which contained links to articles (that could contain videos), photographs, and other content.

Salazar, however, did not allege that he was a subscriber of audio visual materials as contemplated by the statute. 18 U.S.C. § 2710(a)(1)-(4). To the contrary, he alleged that he was a subscriber of 247Sports.com’s newsletter, and that 247Sports.com separately provided audio visual materials to its customers. Salazar v. Paramount Global, 683 F.Supp. 3d 727, 744 (M.D. Tenn. 2023). But, the district court determined that Salazar’s interpretation of the VPPA was “unavailing.” Id. Indeed, “there [was] no allegation in the complaint that Plaintiff accessed audio visual content through the newsletter (or at all, for that matter). The newsletter [was] therefore not audio visual content, which necessarily means that Plaintiff [was] not a ‘subscriber’ under the VPPA.” Id.

Salazar is no stranger to this legal issue. Last year, in a virtually identical case, the U.S. District Court for the Southern District of New York, dismissed a putative VPPA class action brought by Salazar on the basis that “signing up for an online newsletter did not make Salazar a VPPA ‘subscriber.’” Salazar v. National Basketball Association, 118 F.4th 533, 536-37 (2d Cir. 2024). Salazar appealed that decision to the Second Circuit, which reversed the lower court, and held that the VPPA protects “consumers regardless of the particular goods or services rented, purchased, or subscribed to.” Id. at 549. If blog readers would like to learn more about the Second Circuit’s decision, a link to our post is included here.

Salazar appealed this case on the same grounds as his Second Circuit win and asked the Sixth Circuit to determine whether he was considered a “subscriber” and thus, a “consumer” under the VPPA.

The Sixth Circuit’s Decision

The Sixth Circuit affirmed the district court’s ruling and agreed that to be considered a “consumer” under the VPPA an individual must purchase goods or services of an audio-visual nature.

Judge John Nalbandian, writing for the Sixth Circuit, reasoned that the term “subscriber” must be viewed in its broader context, and in harmony with the other words in the statute such not to render associational words inconsistent or superfluous. Applying these canons, the Sixth Circuit explained that the words “goods and services” informed the meaning of the term “subscriber.” By using the terms together, the statute was intended to encompass only audio-visual goods or services provided by a video tape service provider, as opposed to any and all goods and services, provided by that company. In other words, if a video tape service provider makes “hammers” or a “Flintstones sweatshirt or a Scooby Doo coffee mug,” a consumer of such goods would not fall under the purview of the VPPA. Paramount Global, 2025 WL 100139, at *10.

In so holding, the Sixth Circuit departed from the Second and Seventh Circuits, including the near-identical lawsuit brought by Salazar himself, that found the phrase “goods or services” to encompass all goods and services that a provider places in the marketplace. Judge Rachel Bloomekatz, penning the dissent, reached the same conclusion. She opined that, under the majority’s interpretation, a provider could “stitch[] together” non-video transactions to provide information about audio-visual transactions that could reveal a consumer’s personal information. Id. At *12. The majority found such concerns unavailing and reasoned that the type of information available from the videos on Paramount Global’s website was not inherent to the newsletter and was “accessible to anyone, even those without a newsletter subscription.” Id. at *7.

As a result, the Sixth Circuit affirmed the district court’s decision to dismiss the complaint without leave to amend.

Implications For Companies

Circuit splits in the federal courts are increasingly rare. It is nearly unprecedented, however, to have a situation where one litigant has created a federal circuit split with himself. Salazar could file one lawsuit in New York and his claims would go forward. But, if the exact same lawsuit was filed in Tennessee, then dismissal would be the proper remedy.

This patchwork system may be difficult for corporate counsel, tasked with ensuring their companies’ adtech compliance, to follow. But, the Sixth Circuit’s decision in Paramount Global is better than the alternative and could pave the way for other circuits to similarly limit the scope of the VPPA in their relevant jurisdictions.

In the meantime, however, corporate counsel for companies based in Kentucky, Michigan, Ohio, and Tennessee can rest a little easier knowing that – they can offer newsletters without worrying that adtech, installed solely on their websites – will somehow subject them to draconian VPPA liability.

March 28, 2025 by Gerald L. Maatman, Jr.

No Shot at Class Certification – Pennsylvania Federal Court Rules that Company Review of COVID-19 Vaccine Exemption Requests Requires Individualized Inquiries Not Suitable For Class Treatment

By Gerald L. Maatman, Jr., Shannon Noelle, and Anna Sheridan

Duane Morris Takeaways: In Meinert et al. v. Port Authority of Allegheny County, Case No. 2:22-CV-01736 (W.D. Pa. 2025), Judge Robert J. Colville of the U.S. District Court for the Western District of Pennsylvania denied class certification for a class of former transit company employees that were allegedly denied medical and religious exemptions to an employer-mandated COVID-19 vaccination policy. In so doing, the Court highlighted opportunities for defendants to defeat class certification by offering proof that the proposed class is amenable to ordinary joinder and that individualized inquiries predominate over common ones in terms of the qualified disabilities, sincerely held religious beliefs, and undue hardship. The ruling is a required read for corporate counsel facing workplace-related class actions.

Background

Former bus drivers and maintenance workers of Pittsburgh Regional Transit filed a class action complaint against the transit company in December 2022 alleging that a company policy issued in early 2022 requiring COVID-19 vaccinations for employees resulted in class members being denied a medical or religious exemption in violation of federal and state law prohibiting discrimination based on a disability or sincerely held religious belief. In total, the transit company received 350 accommodation requests related to its COVID-19 vaccination policy — 54 of which were for medical exemptions and 296 of which were for religious exemptions. The Company formed an Accommodation Review Committee that ultimately granted 13 medical exemption and 30 religious exemption requests to its vaccination policy.

The plaintiffs argued that the exemption review process was a “sham.” As it regards the medical exemption review process, the plaintiffs argued all proposed class members (the “medical exemption class”) were denied a medical exemption because their pre-existing conditions or disabilities did not show a contraindication to the CDC guidelines and the Company did not factor whether the conditions were a recognized disability under the ADA. As it regards its religious exemption review process, the plaintiffs maintained that the Company did not engage in any individualized analysis to determine undue hardship (the “religious exemption class”).

The Court’s Decision

In its Rule 23 analysis, the Court ruled that the medical exemption class failed to meet the numerosity and commonality prerequisites and that the religious exemption class failed to satisfy the commonality and predominance requirements for class certification. The Court found that as the plaintiffs presented no evidence to contradict the Company’s proof that only 12 individuals fell into the proposed medical exemption class, the Court opined that the plaintiffs failed to establish numerosity and demonstrate that joinder of all members was impracticable, particularly given that all class members were employees of the Company in Pittsburgh.

The Court also rejected plaintiffs’ generic arguments that class certification would promote consistent results and judicial economy. The Court further addressed the lack of commonality of the medical exemption class in dicta (as the lack of numerosity was sufficient to dismiss the proposed class) but nevertheless found that determining whether each member of the class had a cognizable disability would be an individualized inquiry that could not be considered on a class wide basis.

With respect to the religious exemption class, the Court found a lack of commonality given that the sincerity of a class member’s religious beliefs and the undue hardship to the Company are both individualized inquiries not suitable for class treatment. The Court rejected plaintiffs’ contention that the Company did not engage in any individual analysis to determine undue hardship, crediting an affidavit submitted by the Company detailing the Accommodation Review Committee’s process and attaching denial letters, which it reasoned illustrated that the Company considered undue hardship on an individual-by-individual basis. For the same reasons, the Court also reasoned that predominance was lacking as to the religious exemption class given that the sincerity of class members’ religious beliefs and undue hardship to the Company would both turn on individualized proof rather than evidence common to all class members.

Implications of the Decision

The Court’s decision underscores the opportunity for defendants to defeat certification by submitting evidence that proposed members of the class are limited and could be easily joined through ordinary joinder procedures and that the proposed class-wide proceeding is not apt to generate common answers as to whether class members are entitled to relief, as opposed to common questions.

Employers implementing similar review processes for exemption requests to company policies are well-advised to document and evidence an individualized process in evaluating and responding to such requests to defend against class action exposure.