Category: Class Action Weekly Wire

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associates George Schaller and Ryan Garippo with their discussion of a significant ruling handed down by the Seventh Circuit in Richards v. Eli Lilly & Co setting a new standard for the conditional certification of collective actions.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jerry Maatman: Thank you, loyal blog readers for joining us for our next episode of our weekly wire podcast called the Class Action Weekly Wire. I’m Jerry Mammon, of Duane Morris, and joining me today are my associates and colleagues, Ryan, Garippo, and George. Thanks so much, gentlemen, for being on this week’s Podcast.

Ryan Garippo: Great to be here. Thanks for having me, Jerry.

George Schaller: Thanks, Jerry, always good to be on the podcast.

Jerry: Today we’re unpacking a bombshell of a decision by the Seventh Circuit earlier this week, entitled Richards v. Eli Lilly. Ryan, can you give us a high-level overview of what this case is all about, and the ruling and holding of the Seventh Circuit?

Ryan: Yeah, of course, Jerry. So, this case started back in 2022, when Monica Richards, a former employee of Eli Lilly, sued the company for age discrimination under the ADEA, the Age Discrimination in Employment Act. The plaintiff brought the case as a collective action, which means that she wanted to send notice to potentially affected employees and give them a chance to join the lawsuit. The ADEA incorporates the FLSA’s enforcement provision, which allows for employees to band together in collective actions when suing an employer for either age discrimination or wage and hour violations. Richards, as a result, alleged that Eli Lilly promoted younger employees in violation of the Act.

Jerry: So, although this is about the Age Discrimination in Employment Act, it has application to wage and hour collective actions, and I’d say, for every one age discrimination lawsuit, there are probably 100 wage and hour cases being brought. So, what’s at issue is 29 U.S.C. § 216(b) – In other words, in what circumstances should a court conditionally certify a collective action and send notice to those who are at issue in the lawsuit. So, in terms of conditional certification, I think that’s where the rubber meets the road in this decision. George, how do you view that issue?

George: Well, here, Jerry, after the plaintiff moved for conditional certification of the collective action, the district court followed the widely-used approach called the Lusardi two-step process, which is from a district court of New Jersey opinion in 1987, called Lusardi v. Xerox Corp. Under this framework the courts hold that the employee has a light burden at the first stage, and thus may rely solely on the plaintiff’s allegations and courts do not consider competing evidence submitted by the employer. In recent years, the Fifth and Sixth Circuit Courts of Appeals have found that the Lusardi two-step approach is inconsistent with the text of the FLSA. But in contrast, the Second, Ninth, Tenth, and Eleventh Circuits continue to either follow or allow the district court to adopt the two-step framework outlined in Lusardi. Here, the district court followed the two-step framework, granting conditional certification of the collective action and allowing notice to be sent to all potential collective action members.

Jerry: I know to get up to the Seventh Circuit there was an interesting route, unlike a class action under Rule 23(f) where one may file a petition with a court of appeal to examine a class certification order. There’s no such right of appeal under the rules or under the statute under 216(b). And yet Eli Lilly filed a motion for interlocutory appeal, and the Seventh Circuit accepted it, hence its realization of how important this issue is. What exactly did the Seventh Circuit decide in construing the parameters of 216(b)?

Ryan: Well, Jerry, the Seventh Circuit agreed that Lusardi was too permissive, and reformed the approach under 216(b). As a result, it held that the standard allowed for abuse, mainly by encouraging settlements based on the pressure of having a massive case brought against an employer rather than their merit. But, interestingly, the Seventh Circuit also stopped short of adopting the stricter frameworks adopted by both the Fifth and Sixth Circuits, and adopted a standard that’s primarily focused on flexibility. The idea is that instead of a hard rule, the Seventh Circuit gave district courts more discretion. It observed that the notice process should be facilitated by three guiding principles, namely, the timing and accuracy of notice; judicial neutrality; and the prevention of abuses of joinder. And now, plaintiffs have to show that there’s a material factual dispute as to whether employers are similarly situated, and actually bring forward some evidence of a common unlawful policy, as opposed to just relying on the allegations in their complaint. Of course, employers can introduce rebuttal evidence in response to that, and the employee has to engage with it, and the court can consider it as a whole.

Jerry: Sure sounds like a big win, to me, for employers. Given that the devil is in the details when it comes to allowing district courts to exercise their discretion, how do you think this is going to work in practice in the future in the Seventh Circuit at the district court level?

George: All that’s the details, Jerry. It’s definitely a win for employers, because in Illinois, Indiana, and Wisconsin employers can now challenge collective actions earlier and more effectively. But the Seventh Circuit left a lot of questions unanswered, including the level of scrutiny courts should apply when plaintiffs should get limited discovery to meet this new standard. What happens if plaintiffs want to submit supplemental evidence, all that’s left to the court’s discretion? It does remove the automatic green light plaintiffs used to get at the first step, but now it opens the door to new fights about process. How much is enough evidence? When is the case strong enough to notify other employees? Nobody really knows yet.

Ryan: That’s right, and the federal courts are deeply divided, and this is a hot debate amongst the courts of appeal. You’ve got the Fifth and Sixth Circuits rejecting this already, and the Seventh join that group, albeit taking a middle road. Meanwhile, the Second, Ninth, Tenth, and Eleventh Circuits still allow it. Add to that about a second disagreement about whether or not Bristol Myers Squibb, a seminal U.S. Supreme Court case from a few years ago, applies to collective actions, and you’ve got a lot of uncertainty.

Jerry: You know, it’s remarkable that this is a piece of new deal legislation passed in 1938, and yet here we are, 85 years or more later, in 2025, and there are now four different standards to determine when to conditionally certify a collective action under 216(b). And if you’re an employer operating throughout the United States, you could be litigating the same case in one of those jurisdictions in a completely different manner than another one, because the standards are different. So, it does seem to scream out for Supreme Court review eventually, so that there’s one national, unified standard. In the interim, what can employers do?

George: Well, first, if you’re facing a collective action in the Seventh Circuit, this ruling does give you a stronger basis to oppose conditional certification early, and employers should use that opportunity to gather rebuttal evidence and be prepared to challenge the similarly situated claims head on. Second, consult outside counsel early – this area is in flux and procedural missteps can have real consequences.

Jerry: Well, thanks for those insights, and I would commend our listeners and readers to the blog post you gentlemen did earlier this week in elucidating the Seventh Circuit’s opinion. And we’ll be following these issues throughout the year, culminating in publication of the 2026 Duane Morris Class Action Review. So, thanks so much for joining our podcast this week.

Ryan: Thanks for having me on the podcast and thanks to the listeners for being here.

George: Thanks everyone. Great to be here.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and special counsel Justin Donoho with their discussion of significant attorneys’ fee awards in class action litigation over the past 12 months.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jerry Maatman: Thank you loyal blog listeners for joining us for this week’s installment of the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is special counsel Justin Donoho. Thanks for being on the podcast, Justin.

Justin Donoho: Great to be here. Thanks for having me.

Jerry: Today we have a little different topic. We’re going to be discussing significant attorneys’ fee awards in the class action space – sometimes known as mini litigation inside a class action. Justin, how are attorneys’ fees generally calculated to class counsel in a class action situation?

Justin: Sure. In federal courts, settlements are approved under Rule 23(h), which allows the court to award reasonable attorneys’ fees and nontaxable costs that are authorized by law or by the parties’ agreement. Courts typically use two methods: the percentage-of-the-fund method, common in “common fund” class actions, where attorneys receive a fraction – often 25 to 33% – of the settlement or judgment. There’s also the lodestar method, where fees are tied to hours worked times hourly rate, often with a multiplier for risk or complexity. Courts also use the lodestar as a reasonable cross-check. Courts must carefully assess fee requests to protect absent class members and weigh results, effort, risk assumed, and any class objections.

Jerry: Our Duane Morris Class Action Review surveys leading class action fee awards throughout the United States. What were some of the significant rulings in your mind over the past 12 months?

Justin: Well, in 2024 there were some record attorney paydays in high-stakes litigation.

In the In Re Syngenta AG MIR162 Corn Litigation, a $1.51 billion settlement between Syngenta and corn farmers resulted in an attorney fee award of $503 million.

In environmental class actions against 3M resolving lawsuits related to PFAS contamination in public drinking water systems, a $10.3 billion settlement generated an attorneys’ fee award of $840 million, one of the largest ever.

In a securities fraud shareholder litigation – just one more example – firms representing Dell investors secured a $267 million fee award from the $1 billion class settlement, which was later upheld by Delaware’s highest court.

Jerry: Well, suffice to say, 2024 was a banner year for the plaintiffs’ class action bar in taking down large fee awards. I know there was also a noteworthy fee award in the past month or so in the In Re College Athlete NIL Litigation, where $515 million in attorneys’ fees were awarded in various consolidated antitrust class actions. The court also found it reasonable to allow class counsel to apply for future fee awards in administering the settlement involving student at student athlete-benefits, which will add even more to that number.

What do you see here, Justin, in what’s going on?

Justin: That one you just talked about from just last month reflects a broader trend class action settlements of over $40 billion dollars for the third straight year, with 2024 totaling around $42 billion dollars. The size of settlements tends to scale attorneys’ fees dramatically.

Jerry: Now, there are some lawyers that police these agreements. They’re known as objectors. There are some serial objectors, professional objectors, legitimate objectors – what do you make of that space in terms of objections that are filed to these sorts of fee awards?

Justin: The objections matter. Objectors often challenge disproportionate fees, especially in no-cash or low-claim situations. However, as we discussed recently on the Duane Morris Class Action Defense Blog, the Third Circuit in In Re Wawa Data Security Litigation approved a $3.2 million class fee award for class counsel finding that fees can be based on relief made available to the class and does not have to be capped by a percentage of the relief actually claimed in low-harm data breach security class actions where the claim rate is notoriously low. The Third Circuit also held that clear sailing agreements and fee reversions are not per se impermissible and, rather, there must be evidence of collusion or harm to class members to invalidate a fee award on that basis.

Jerry: In terms of sitting at the mediation table and trying to bring home a settlement for a company in the class action space, do you have any thoughts for companies in terms of negotiating out attorneys’ fee awards?

Justin: Certainly. It’s important to understand how percentage-of-fund and lodestar methods play out based on settlement type and jurisdiction. Parties negotiating settlements should prepare for objector scrutiny, especially around any clear sailing terms and reversions. And it’s necessary to recognize that record-breaking settlements are driving fee awards into the hundreds of millions or close to billions. These cases illustrate just how large and complex class attorneys’ fee awards can get.

Jerry: Well, great thoughts and analysis, Justin. Certainly true that these massive settlements are driving the cottage industry of huge attorneys’ fee awards that we’re probably going to see in 2025 and beyond. So, thanks so much listeners for joining us for this week’s Class Action Weekly Wire.

Justin: Thanks for having me on the podcast and thanks to the listeners.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and special counsel Rebecca Bjork with their discussion of key sanctions rulings in class action litigation over the past 12 months.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jerry Maatman: Thank you, loyal blog readers and listeners, for joining us for our next episode of the Duane Morris Class Action Weekly Wire. I’m Jerry Maatman, a partner here at Duane Morris, and joining me today is special counsel Rebecca Bjork of our Washington, D.C. office. Thanks so much, Rebecca, for being on our podcast.

Rebecca Bjork: Jerry, it’s great to be here. Thanks for having me.

Jerry: Today we have a little bit of a different topic. We’re going to focus on significant issues considering motions for sanctions in class action litigation. Rebecca, describe for our listeners some of the reasons why a court might contemplate entering sanctions in class action litigation.

Rebecca: Sanctions are just simply thought of as penalties – in civil cases, they are typically in the form of a monetary fine usually issued in response to violating procedures or abusing the judicial process somehow. But the most extreme sanction that can be imposed in civil cases is dismissal with prejudice of the filing party or dismissal of the answer of the responding party, which means that the sanctioned party would have no further recourse available, and the case would be over with judgment entered against them.

Jerry: Well, thanks for that overview. Let’s jump right into it and talk about some of the most significant rulings over the past 12 months. What about the Ikea case – what happened there?

Rebecca: Sure. In Donofrio, Ikea was hit with sanctions in an age discrimination collective action. Plaintiffs had alleged that older workers were passed over for promotions in favor of younger employees based on so-called “future potential” and their willingness to relocate. The court had ordered Ikea to preserve and produce emails from certain managers, which is obviously common in such litigation, but instead, Ikea deleted four of those accounts in violation of the court’s order. The court said that this spoliation wasn’t intentional, but it still caused significant prejudice to the plaintiffs, and as a result Ikea had to pay attorneys’ fees and expenses related to their sanctions motion.

Jerry: Always viewed that case as a great example of how simple negligence and not intentional or bad faith conduct can trigger sanctions in the class action space. Let’s pivot to a sanctions ruling that made a lot of headlines in the consumer fraud class action space. The Dukas v. KLM Airlines case. What stood out for you there in that situation?

Rebecca: Well, that one centered on climate-related advertising. Plaintiffs, led by class action lawyer named Spencer Sheehan, claimed that KLM had misled customers about their environmental commitments. But the named plaintiff admitted that she never saw the ads in question – so she never had standing. Now the attorney Sheehan did not withdraw the suit or fix the issue even after KLM raised these points with the court, so the court hit him with a $1,000 fine and ordered him to pay KLM’s legal fees. The court also referenced this attorney’s history of filing questionable consumer class actions, so this is a clear signal – do your diligence before filing your lawsuit.

Jerry: Good admonition. But speaking of high costs, what about Durant v. Big Lots that involved over $140,000 in attorneys’ fees? What happened there?

Rebecca: Well, that case was about allegedly deceptive labeling of coffee, and the court found that the lawsuit was frivolous, especially since it mirrored previously dismissed case out of New York. The judge used the lodestar method to calculate fees, and rejected the plaintiff’s objections as vague. But importantly, while the defendant requested a multiplier for the work their attorneys did, the court said that standard fees were enough, but still this was a big hit for the plaintiff’s counsel, both financially and reputationally.

Jerry: Let’s continue and take a tour of the sanctions jurisprudence that developed over the last year. Tell us briefly about the cases of Hamm v. Acadia Healthcare and Plunkett v. FirstKey Key Homes.

Rebecca: Sure. In Hamm, the court partially granted sanctions against the plaintiff’s counsel in a wage and hour case, and it was all about discovery misconduct, which is often the case in these cases – missed depositions, failure to cooperate. The judge trimmed the fee award, though, for inefficiencies like block billing, but he still ordered reimbursement for time spent preparing the sanctions motion.

But in Plunkett v. FirstKey, the other case you mentioned, the tables were turned there. The plaintiffs were awarded sanctions because the defendant, FirstKey Homes, tried to settle directly with potential opt-in plaintiffs outside of court supervision. The court called this coercive, issued a protective order, and awarded fees and costs to the plaintiffs. So, there’s another cautionary tale – never sidestep judicial oversight in FLSA cases.

Jerry: Let’s talk about courts declining to order sanctions or appellate review of sanctions order. Let’s talk about the rare reversal in the In Re Sanford Law Firm case.

Rebecca: Yeah, in that case the Eighth Circuit concluded that the district court had not given the firm that was involved there, or its managing partner, sufficient notice before suspending them from handling FLSA cases for two years – that’s another type of sanction that courts have the authority to impose. It was about allegedly excessive billing, but the appeals court said that due process matters, even in sanctions proceedings.

Jerry: And then what about the word count – in a very interesting decision, called Larsen v. PTT?

Rebecca: Yeah, that case was funny. The plaintiffs accused the defense team of submitting overly long briefs in violation of local rules by falsely certifying compliance with word limits, and it turns out that the Microsoft Word settings excluded footnotes from the count. Now the court here wasn’t thrilled, but called it inadvertent, and actually denied sanctions in that case.

Jerry: Well, that’s a good reminder to double check your software settings. We have time for two quick ones – how about the Mazurek v. Metalcraft case and the Ortiz v. Sazerac case?

Rebecca: There, plaintiffs lost their FLSA claims after not being able to show unrecorded work hours. But the court said that their legal theories were not frivolous, so, even though they ultimately lost no sanctions were awarded.

And in the Ortiz case. the plaintiffs voluntarily dismissed their suit alleging Fireball’s malt labeling was misleading. The defendant sought fees under Rule 11, but because they withdrew the complaint within the safe harbor period. Under that rule, the court concluded that sanctions were not appropriate there either.

Jerry: As always, it’s been an interesting year in terms of sanctions decisions throughout the United States. I know that you focused a lot in your writings and thought leadership in this area – what would you share with our readers and listeners as the general takeaways in this space?

Rebecca: Oh, it’s definitely a fun area of the law to work in – very unique area of class action jurisprudence. I would say that the courts try to balance accountability of the parties to comply with the rules and fairness. and that’s probably reflective of what the rules require. Courts are willing to impose serious consequences, but only after very careful consideration, and I see the trend being judges increasingly scrutinizing discovery matters and professional conduct matters in complex litigation, and that both sides, plaintiffs and defendants, are being held to the same standards.

Jerry: Well, thanks so much for your insights, Rebecca, and I know our readers are looking forward to the launch of the 2026 Duane Morris Class Action Review and the Appendix II on sanctions orders throughout the United States over the past 12 months, which you’re the co-author of. Thanks so much for joining us today and sharing your thought leadership.

Rebecca: You’re very welcome. Thanks so much for having me on.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and special counsel Samson Huang with their discussion a key ruling from a California appeals court allowing a plaintiff to pursue PAGA claims solely on behalf of other aggrieved employees.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jerry Maatman: Hello everyone, and welcome to the Class Action Weekly Wire, the podcast where we explore critical class action legal developments. I’m Jerry Maatman, a partner at Duane Morris, and joining me today for the first time is Samson Huang, our newest member of our class action team, who is based in our Los Angeles office. Samson, thanks so much for being here today.

Samson Huang: Of course. Thanks, Jerry. I’m so glad to be here.

Jerry: Today we’re discussing the recent ruling coming out of the California Court of Appeal in CRST Expedited, Inc. v. Superior Court of Fresno County, which addresses the legality of something known as a “headless” PAGA action. Can you start by explaining for our listeners the central issue in the case?

Samson: Absolutely. The heart of the case was whether an employee can bring a so-called “headless” PAGA action, meaning a Private Attorneys General Act claim that seeks civil penalties for labor code violations suffered only by other employees and not by the plaintiff themselves. This came up after the plaintiff dismissed, or tried to dismiss, his individual claims to avoid arbitration.

Jerry: So, as I understand it, the Court of Appeal in California had to decide whether or not this sort of lawsuit is even viable under the PAGA?

Samson: That’s correct. The employer, CRST Expedited, argued that the statute’s language—specifically the phrase “on behalf of himself or herself and other current or former employees”—meant that you must have, and bring, your own individual claim in order to piggyback off of, to have standing, for the nonindividual claims and they wanted the court to interpret the word “and” strictly in the conjunctive.

Jerry: And so how did that go for the employer in the Court of Appeal with respect to that particular argument?

Samson: Well unfortunately, the Court of Appeal disagreed with the employer, and found that the statutory language was ambiguous, holding that the word “and” could be actually interpreted as meaning either “and” or “or “—what we call an inclusive disjunctive—and the panel emphasized that PAGA is a remedial statute designed to empower private enforcement of labor laws. They reasoned that, allowing headless PAGA claims better served the statute’s purpose, especially in light of recent procedural hurdles around arbitration after Viking River Cruises v. Moriana.

Jerry: Well, things weren’t complicated enough. I know that Viking River Cruises created new law and basically stood for the proposition that if you’re a worker, and you had signed an arbitration agreement with a class action waiver, you had to proceed in arbitration. And then, as I understand it, California courts have thereafter interpreted Viking River to allow, nonetheless, the employee, after arbitration, to go forward with a representative action on behalf of other representative employees. How did the Court of Appeal deal with Viking River Cruises in terms of whether that had an impact on headless PAGA actions?

Samson: Well, the issue of headless PAGA actions really wasn’t addressed. In Adolph v. Uber Technologies, the California Supreme Court simply held that merely the fact that a plaintiff’s individual PAGA claims compelled to arbitration pursuant to Viking River didn’t mean that the plaintiff lost standing to maintain the representative nonindividual PAGA claims in court, and strongly suggested that if a plaintiff gets compelled to arbitration on the individual claim, the nonindividual claims should be stayed pending resolution of the arbitration. In this recent CRST case, this is a strategy that the plaintiffs’ bar has developed in order to avoid arbitration.

Jerry: So, as I understand it, that was a gambit by the plaintiff’s lawyer, a conscious decision to dismiss their individual claim, to try and get around Viking River?

Samson: That’s right. And basically, the argument goes that if a plaintiff has no individual claim, there would be nothing left to compel into arbitration. Therefore, the court proceedings on the nonindividual claims can proceed. The employer in the case argued that by doing so, he lost standing and meaning by dismissing an individual PAGA claim, the plaintiff loses standing again. The Court of Appeal disagreed, and it held that even though the plaintiff wasn’t personally seeking penalties anymore, he still qualified as an aggrieved employee because he had been subjected to labor code violations, or at least had alleged that he had been subjected to labor code violations, and completed the required notice procedures under PAGA.

Jerry: Well, what would be your prognostication for our listeners about whether or not there’s a chance this could get reversed by the California Supreme Court?

Samson: Jerry, prior to this case there was another Court of Appeal in a case called Leeper v. Shipt which, while addressing the same issue, reached the opposite conclusion, and held that every PAGA claim necessarily includes both an individual and nonindividual component. And that case has actually been taken up to the California Supreme Court, which has granted review. So, CRST is definitely not the final word, and until the Supreme Court issues its opinion in Leeper, trial courts are free to choose between Leeper and CRST, in terms of which decision they want to follow. So, until then, employers and practitioners alike should be cautious.

Jerry: I know you do a lot of thought leadership in this particular space and help many employers with respect to PAGA compliance. What would be your quick advice for employers in dealing with this situation until there’s resolution at the California Supreme Court level?

Samson: Well, I think this ruling really reinforces California’s commitment to robust enforcement of labor laws through PAGA, and employers should revisit their arbitration agreements and attorneys should stay tuned to Leeper. The terrain is shifting quickly.

Jerry: Well, thanks so much for your thoughts and analysis in this very complex area, and welcome to the show and to your first podcast on behalf of Duane Morris. Thanks so much.

Samson: Thanks for having me, Jerry, and thank you, listeners.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and special counsel Kathryn Brown with their analysis of key developments in class action litigation involving the Worker Adjustment and Retraining Notification (“WARN”) Act.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jerry Maatman: Hello everyone and welcome to the Class Action Weekly Wire, the podcast where we explore critical issues in class action litigation. I’m Jerry Maatman of Duane Morris, and joining me today is Kathryn Brown, one of our class action lawyers based in Ohio. Great to see you, Kathryn. Welcome to the podcast.

Kathryn Brown: Thanks, Jerry. I’m so glad to be here.

Jerry: Today, we’re diving into a very complex area in the class action world – class actions under the WARN Act. Let’s start with some of the basics. Kathryn, can you describe for our listeners what WARN is all about?

Kathryn: Sure, the WARN Act, which stands for the Worker Adjustment and Retraining Notification Act, is a federal law that requires large employers, those with 100 or more full-time employees, to give at least 60 days’ notice before conducting a mass layoff or plant closing. What’s made this area explode recently, especially post-COVID, is the sheer volume of layoffs that occurred with little or no notice that opened the door for a wave of class actions which are still weaving through the courts. Now, if employers fail to comply with the WARN Act, they may owe up to 60 days of wages and benefits to each impacted employee.

Jerry: COVID-19 certainly has been a tipping point in the courthouse in many areas of litigation. Specifically, how has it shaped WARN Act litigation?

Kathryn: It’s been a game-changer. Many employers tried to argue that the COVID-19 pandemic was a natural disaster or an unforeseeable business circumstance that excused the 60-day notice requirement under the WARN Act, but some courts rejected those defenses outright – especially where the employer failed to give any notice or gave only partial notice.

Jerry: Really interesting, both from a legal and societal perspective, in terms of, I take it, courts still expected companies, employers to abide by the prescriptions of WARN, despite all the challenges posed by COVID-19.

Kathryn: Yes, and some of the 2024 decisions confirm that courts looked closely at whether employers gave as much notice as possible as required, even under those exceptions, to WARN.

Jerry: Well, you’ve done a lot of writing in this area, and you were one of the authors of the Duane Morris Class Action Review. In your opinion, what are some of the standout decisions in this space in 2024?

Kathryn: There were several. One important case was Staley v. FSR International Hotel, which involved the Four Seasons Hotel in New York City. The court in Staley granted class certification of a class of hotel workers furloughed during the pandemic. The court found that common issues of law and fact predominated because the central issues in the case – whether the extended furlough qualified as a “mass layoff” or “plant closing” under the WARN Act, and whether the employees were entitled to severance pay – were common issues across all class members. The court opined that although there were some individual differences among the class members, such as the fact that some employees worked at other hotel properties after the hotel closed, the court determined that these variations did not override the predominance of common legal questions.

Jerry: So even in certain circumstances, extended furloughs rather than terminations can trigger WARN Act obligations?

Kathryn: They can, especially if they last over six months. Courts are treating those as employment losses under both federal and state WARN acts. Other important rulings under the WARN Act in 2024 addressed employers’ notice obligations when an anticipated date of termination is postponed, the need to provide a brief statement of the reason for a shortened notice period, employers’ greater risk of exposure to liability under state law versions of the WARN Act, and how back pay damages owed to affected employees are calculated following a determination of liability. This was the case in Messer v. Bristol Compressors, where the employer postponed the employees’ final termination date, but failed to issue additional notice. The court held that once a shutdown is delayed by 60 days or more, a new 60-day notice under warrant is required.

Jerry: I know if the compliance obligations weren’t tough enough, we also are dealing with a patchwork quilt of state law mini-WARN acts. Have there been decisions, in your mind, in terms of those state law provisions that also complicated this space?

Kathryn: Absolutely. The New York and New Jersey WARN Acts, for example, often require longer notice periods than the federal WARN Act. They require notice periods of up to 90 days and impose stricter requirements than under the federal WARN Act. States often have different definitions, different notice formats, and different exceptions than under the federal WARN Act. The plaintiffs’ bar knows this and uses it to their advantage.

Jerry: Well, the plaintiffs’ bar is nothing if not innovative, and certainly is always kind of chasing that money trail. What sorts of verdicts, damages, settlements did you see in the past year on the WARN front?

Kathryn: Right, so a core component of potential damages in a WARN Act lawsuit is back pay owed to affected employees for the period of the violation. Given the strict standards for notification under the WARN Act, it’s no surprise that the standards of calculation of damages owed to affected employees likewise heavily favor employees. So, one case is Chaney v. Vermont Bread Company. In that case, the court awarded millions of dollars in back pay, even rejecting attempts by the employer to offset damages based on help the employer provided after the layoffs or payments made by a receiver. The court provided guidelines as to acceptable forms of calculating damages in WARN Act cases, as well as made clear that employers cannot mitigate damages based on efforts to assist employees post-layoff or by suggesting that payments made by a receiver should offset their liability.

Jerry: One of the attributes of the Duane Morris Class Action Review is an analysis of major settlements in the class action world. What about in the WARN area – what were some of the major class action settlements over the past year?

Kathryn: Well, in the case of Nunn v. Bitwise, the court approved a $20 million settlement to resolve claims under both the federal WARN Act and the California WARN Act. WARN Act settlements often come through bankruptcy proceedings, which adds certain amount of complexity – but does not erase liability.

Jerry: At the end of the day, then, what would be your takeaways for employers in dealing with WARN Act issues in the class action space?

Kathryn: The key takeaway is to treat WARN notice obligations extremely seriously, and get counsel involved. If you’re downsizing or restructuring, you may be triggering WARN Act, and failing to comply can lead to massive liability.

Jerry: Well, that’s great succinct advice. Kathryn, thanks so much for joining us on the podcast today.

Kathryn: Thank you so much for having me, Jerry, and thank you, listeners.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Jennifer Riley with their report on trends analyzed in the class certification rulings issued through the first six months of 2025.

Read our detailed breakdown of 2025 class certification rulings here.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jerry Maatman: Hello everyone, and welcome to the next episode of our Class Action Weekly Wire series. I’m Jerry Maatman, and I’m joined today by my partner, Jennifer Riley, to talk about the mid-year review of class certification numbers. Jen, welcome to the podcast.

Jennifer Riley: Thanks so much, Jerry. It’s great to be here, especially with so much going on in the class action space.

Jerry: Well as of June 30, 2025, we’re six months into the new year. Let’s start with the big picture: courts ruled on approximately 207 class certification motions in the first half of the calendar year, and plaintiffs were successful in 69% of those motions. That’s quite a jump from 2024, isn’t it?

Jennifer: It is. So, last year the success rate was 63%. We’re seeing a notable uptick there, although it’s still a bit lower than what we saw in 2023, and even 2022, when certification success rates hit 72% and 74% respectively. The trajectory so far this year suggests that plaintiffs are regaining some of that ground.

Jerry: Sure sounds like it. I know that certification is a function of where the case is, the judges before it, and the subject matter area. So these are general numbers. What do you look when you peel back that number and look at the specific areas?

Jennifer: Well, I think the subject matter area has been particularly notable in terms of the numbers we’re seeing. The highest success rates in 2025 so far have come from WARN, antitrust, ERISA, and wage and hour. WARN has had a 100% certification rate so far, even though that was only two cases. Antitrust and ERISA are close behind at 92%. And then there’s wage and hour, which is always a hot topic. Wage and hour is showing us a strong 82% success rate in terms of courts granting certification.

Jerry: Let’s focus on wage and hour. Let’s talk about Fair Labor Standards Act conditional certification. That continues, it appears to be, a very, very hot area of the law, isn’t it?

Jennifer: Absolutely. From January through June of this year, courts issued 74 rulings in FLSA matters. 71 of those were first stage motions for conditional certification, and plaintiffs won 58 of them. That is an 82% success rate, up slightly from the 79% success rate we saw in 2024.

Jerry: I think it’s certainly obvious that there are epicenters of wage and hour FLSA litigation, particularly the Second and Third Circuits, in terms of the number of filings and the success rates there. What makes these places more favorable to the plaintiffs?

Jennifer: That’s absolutely right. So, we’re seeing those jurisdictions particularly show favorable results for the plaintiff at the decertification stage. Also, the usual trend where defendants succeed more often isn’t really playing out this year. We’ve only seen three decertification rulings so far, and plaintiffs have won two of those.

Jerry: I know location impacts certification numbers in terms of the standards in the various circuits. We’re seeing fewer rulings than in past years in the wage and hour space in both the Fifth and Sixth Circuits which are controlled by the Swales case and the Clark case. What’s your thoughts or takeaways on what we’re seeing in 2025?

Jennifer: That’s very important to know, Jerry. I completely agree. I think, what we’re seeing there in those circuits, it’s reflective of a strategic move by the plaintiffs. Both of those circuits have adopted stricter standards for conditional certification, which makes them arguably less appealing venues for plaintiffs. So plaintiffs, therefore, are shifting their filings and their motions toward those more lenient circuits which really boosts their odds of success.

Jerry: Think it’s ironic that [the FLSA] is a piece of new deal legislation signed in 1938. And here, in 2025, we still have three different standards around the country for the circumstances under which wage and hour cases will be certified. Do you see a shift in a geographical sense of where the plaintiffs’ bar hunts out these cases, files them, to maximize their chances for certification?

Jennifer: Absolutely. I think the mid-year numbers are showing us that things like venue selection, subject matter, and timing are all critical components in plaintiffs’ class certification strategy. So, with FLSA continuing to dominate, we’ll definitely be watching closely to see how courts respond in the second half of the year, and whether we see more shifting standards influencing where and when we’re seeing motions filed by the plaintiffs’ bar.

Jerry: Well, the scorecard is interesting through mid-year 2025. We’ll have the final numbers for our clients in the first week of January of 2026 upon publication of the Duane Morris Class Action Review. So, stay tuned and gain more insights in this area. Thanks Jen so much for your thought leadership as always in this particular space.

Jennifer: Thank you, Jerry, and thanks so much to our listeners for tuning in for this week’s edition.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Jennifer Riley with their report on class action settlement trends at the halfway mark of 2025.

Read our detailed breakdown of 2025 class action settlements here.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jerry Maatman: Hello, everyone, and welcome to the next episode of the Class Action Weekly Wire. I’m Jerry Maatman, and with me today for our special mid-year review of class action settlements is my partner, Jen Riley. Jen, welcome back to the podcast.

Jennifer Riley: Thanks so much, Jerry.

Jerry: Well, we’re halfway through 2025. What sort of developments do we see on the settlement front?

Jennifer: Thanks, Jerry. It’s been quite a ride. The data confirms what we’ve been tracking since 2022 – we’re in a new era of class action litigation, corporate defendants have been facing unprecedented settlement exposures. The total value of class action and government enforcement settlements hit $66 billion in 2022, $51.4 billion in 2023, and $42 billion in 2024. As of mid-2025, we have already reached $21.77 billion, keeping pace with those historic high numbers that I just mentioned.

Jerry: Those are enormous numbers, and obviously the snapshot for the first six months of 2025 only involved the top 5 settlements in each of these areas. So, we’re talking about over a $180 billion dollars in just three and a half years. That’s remarkable.

Jennifer: Exactly. It is the largest 3-year span of settlements in U.S. legal history. If the current trends hold, 2025 may end up right alongside those previous three years. It may not be a record breaker, but it’s definitely in that same upper tier.

Jerry: When you peel back the onion skin and dig down into the numbers, where are you seeing the highest settlement values so far in 2025?

Jennifer: That would probably be in the product liability and mass tort space. Those areas are leading by a long shot, $13.09 billion in just the first half of 2025. The next area is antitrust, which follows at $4.36 billion, and then, after that, securities fraud at $2.03 billion.

Jerry: I recall prior to Covid, one could count the number of $1 billion settlements on one or two fingers, sometimes in a 5-year period, although those are becoming more commonplace these days. Are there any standout billion-dollar settlements so far in 2025?

Jennifer: Great question. There are a few major ones, I would say the In Re College Athlete NIL Litigation – that one hit $2.78 billion. That’s the one that gave athletes retroactive compensation for missed name, image, and likeness opportunities. It’s really a historic shift. Also worth noting, Purdue Pharma’s $7.4 billion opioid-related settlement. Just last week, Purdue announced that it is preparing to send an updated bankruptcy plan and proposed settlement to a vote following a broad sign on by all U.S. states and territories.

Jerry: Way in and of themselves, those are landmark figures for those settlements. Are we seeing, as we did the last three years, increasing number of $1 billion settlements per case?

Jennifer: We are, there have been three billion-dollar settlements so far in 2025, that brings us to 37 total settlements over a $1 billion since 2022. It’s the most in any three-and-a-half-year period ever.

Jerry: Again, remarkable figures in terms of your analysis of that settlement activity. Are there particular sectors you would point out to our listeners that are worth looking at or to view as emerging areas of risk and exposure?

Jennifer: Data, breach and privacy settlements are increasingly prominent. For example, AT&T just agreed to pay $177 million dollars for a breach-related case. And Clearview AI settled for $51.75 million over biometric privacy violations. Also, discrimination and civil rights cases continue to generate large settlements, showing that the courts are still a viable forum for those systemic claims.

Jerry: Let’s talk about antitrust – that’s historically been an area where there have been very high settlements. What’s going on in that space thus far in 2025?

Jennifer: The antitrust sector is very active. The top 5 settlements in 2025 alone total more than $4 billion, with notable cases against the NCAA, CDK Global, and Perdue Farms. There’s a sustained focus on wage suppression and market manipulation. Those are key areas of concern for both the regulators and for the plaintiffs.

Jerry: The Duane Morris Class Action Review also tracks governmental enforcement settlement activity, insofar as those cases certainly have the feel look of a class action. What’s going on on that particular front with government enforcement litigation?

Jennifer: Even with the changes – still going strong. Government enforcement settlements reached over $77 million so far in 2025, covering everything from labor violations to deceptive marketing in the gaming industry. The DOJ, DOL, and state AGs have remained active, especially in sectors affecting workers and vulnerable consumers.

Jerry: If you take a holistic look at all the areas that are tracked that corporations are vulnerable to being sued over, are there any areas that are cooling down, or where the numbers are actually going down?

Jennifer: Great question, I would say securities fraud. Securities fraud is slightly down from the highs of 2023, and we’re also seeing some slowdown in TCPA-related cases, although Realogy Holdings $20 million robocall case is still making headlines over this past year, but overall, I would say most sectors are either holding steady or growing.

Jerry: Jen, I know you recently won an award and you were selected the number one most quoted and followed class action lawyer in the United States in terms of your thought leadership. Tell us about inside baseball in terms of your thoughts and insights in this particular space of what corporations can expect for the remainder of 2025.

Jennifer: Thanks, Jerry. I would say the bottom line is really that corporate defendants are operating in a legal environment where these large-scale class actions – whether driven by consumers, employees, investors, regulators – these are a constant and very costly risk. We’re really in a high-stakes phase of class action litigation right now, and there’s no indication that it’s going to slow down.

Jerry: Jen, thanks, as always, for those insights and thanks for our listeners for joining us for this week’s installment of the Class Action Weekly Wire. We’ll be sure to keep you updated on all the settlement numbers throughout the remainder of 2025, and when we debut the Duane Morris Class Action Review for 2026. I’m sure what we’re going to point out to are the enormous settlement numbers now for four years in a row. So thanks so much.

Jennifer: Absolutely. The 2026 version is going to be a must-read. Thank you, Jerry, and thank you to our listeners.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and senior associate Ciara Dineen with their analysis of key developments in class action litigation in state courts, including significant rulings on the PAGA front in California.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTube.

Episode Transcript

Jennifer Riley: Thank you, listeners for being here again for the next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is Ciara Dineen. Thank you for being on the podcast, Ciara.

Ciara Dineen: It’s great to be here, Jen. Thanks for having me.

Jennifer: So today, we wanted to discuss some trends and important developments in state court class action litigation, since the decision on where to file a class action will always be an important strategic decision for plaintiffs’ lawyers seeking to maximize their odds for class certification as well as maximize their opportunity for larger verdicts and settlements. And as well as for defense lawyers in considering whether to remove a case from state court to federal court. Whether it is between state or federal court or deciding in which particular state to file, many factors impact this decision. Ciara, what are some of those factors?

Ciara: Yeah. Although almost all state law procedural requirements for class certification mirror Rule 23 of the Federal Rules, the plaintiffs’ bar often perceives state courts as having a more positive predisposition towards their clients’ interests, particularly where putative class members have connections to the state, and the events at issue occurred in the state where the action is filed. Beyond forum-shopping between state and federal court, the plaintiffs’ bar also seeks out individual states that are believed to be plaintiff-friendly. These courts are thought to have more relaxed procedural rules related to discovery, consolidation, and class certification, a lower bar for evidentiary standards, and higher than average jury awards, among other considerations, all of which incentivize forum-shopping related to state class actions.

 Jennifer: In reviewing key state court class action decisions and analyzing class certification rulings, although state courts tend to apply a fairly typical Rule 23-like analysis, many state decisions focus on the underlying claims at issue in addressing whether a class action should proceed. Nonetheless, understanding how state courts apply their respective Rule 23 analyses really is crucial toward effectively navigating the complexities of these types of lawsuits.

Ciara: Another important topic for companies is state private attorney general laws, in particular California’s Private Attorneys General Act or PAGA. The PAGA authorizes workers to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for state labor code violations. Although California is the only state to have enacted this type of law so far, several other states are considering their own similar private attorney general laws, including New York, Washington, Oregon, New Jersey, and Connecticut. It will be crucial to monitor state legislation on this topic given the impact such laws will have on classification strategy.

Jennifer: As we discussed in the 2025 edition of the Duane Morris Class Action Review, PAGA filings are surging. According to the California Department of Industrial Relations, plaintiffs filed more than 9,400 PAGA notices in 2024. That’s a near 22% increase over 2023 and a whopping 86,000% increase over the 11 PAGA notices filed in 2006.

Jennifer: So, the so-called PAGA reform legislation passed in 2024 by California lawmakers seemingly did little to curb interest in these cases, which continue to present one of the most viable workarounds to workplace arbitration agreements.

Ciara: That’s right. In 2024, Governor Newsom in California announced that labor and business groups had inked a deal to alter the PAGA in return for removing the referendum to repeal the PAGA from the November 2024 ballot. The California Legislature quickly moved to approve two bills, Assembly Bill 2288 and Senate Bill 92. The alterations include reforms to the penalty structure, new defenses for employers, changes to the PAGA standing requirements, and a new “cure” process for small and large employers, among other changes. These reforms affect all PAGA notices filed on or after June 19, 2024, with some exceptions.

As is clear from the PAGA reform and activity, California is the epicenter of class actions filed in state courts. It has more class action litigation than any other state.

Jennifer: Thanks, Ciara. We have talked a lot about PAGA cases on the Weekly Wire, and we’ve previously discussed a couple of high-profile rulings from 2024. Have there been any significant PAGA rulings so far in 2025?

Ciara: Absolutely, Jen. So far, in 2025, there has been a new ruling on “headless” actions — those actions that only allege representative, or non- individual, PAGA claims and therefore cannot be ordered to arbitration. In Parra Rodriguez, et al. v. Packers Sanitation Services LTD, the plaintiff filed a lawsuit under the PAGA against the defendant, his former employer, seeking civil penalties for alleged labor code violations. The defendant moved to compel arbitration, pointing to an agreement the plaintiff signed at the commencement of his employment which mandated individual arbitration for employment related disputes. The defendant argued that under the U.S. Supreme Court decision Viking River Cruises, Inc. v. Moriana, the plaintiff’s individual PAGA claim must be arbitrated and the remainder of the case dismissed. The plaintiff contended he was not asserting any individual PAGA claims, only representative ones, and thus nothing in his complaint was subject to arbitration. The trial court denied the defendant’s motion, stating that at the time the arbitration agreement was signed, California law prohibited arbitration of any PAGA claims. The defendant appealed, arguing that the plaintiff’s complaint necessarily included an individual component. The California Court of Appeal, Fourth Appellate District affirmed the trial court’s ruling. The Court of Appeal ruled that the plaintiff’s complaint clearly stated he was not seeking individual relief and had deliberately drafted his complaint to omit such claims. Though the defendant argued that simply identifying the plaintiff as an aggrieved employee proved the presence of an individual claim, the Court of Appeal opined that this identification was only necessary for standing, and did not mean that the plaintiff was pursuing individual penalties. The Court of Appeal stated that whether a complaint includes an individual claim must be determined by examining the complaint itself, not by legal assumptions about what a PAGA action should include, and that courts cannot impose claims the plaintiffs have chosen not to assert.

Jennifer: Thanks so much for that overview, Ciara. That decision is incredibly interesting, among other reasons, because it runs counter to a ruling from late December from the Second Appellate District in Leeper v. Shipt, Inc. That ruling stated that all PAGA actions necessarily have “individual” and “representative” components, regardless of whether the plaintiff pleads those individual claims. Under Leeper, then an employer could compel arbitration of the absent individual PAGA claims, and request that the trial court stay the pending representative action pending the completion of that arbitration.

Ciara: Exactly, and that’s why the Parra Rodriguez ruling was so meaningful. Since that decision early this year, the California Supreme Court has granted review of both rulings. In Leeper, the Supreme Court has limited the review to two questions: (i) does every PAGA action necessarily include both individual and non-individual PAGA claims, regardless of whether the complaint specifically alleges individual claims; and (ii) can a plaintiff choose to bring only a non-individual PAGA action? After granting review in Parra Rodriguez, the Supreme Court noted that any ruling in this case will be deferred pending “consideration and disposition of related issues” in Leeper.

Jennifer: Well, we will be sure to keep our listeners updated on those upcoming California Supreme Court rulings, to resolve that split among the Courts of Appeal on whether these “headless” PAGA actions are permissible and can continue. Thank you so much for your insights and analysis, Ciara, and thank you to our listeners for tuning in.

Ciara: Thanks so much, Jen.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and senior associate Betty Luu with their analysis of settlement approval issues in class action litigation addressed by courts over the past year. 

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Samsung Podcasts, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, and YouTub

Episode Transcript

Jerry Maatman: Thank you so much for being here again, loyal blog readers and listeners, for the next episode of our weekly podcast entitled the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my colleague Betty Luu of our Los Angeles office. Thanks so much for being on today’s podcast.

Betty Luu: Great to be here, Jerry. Thanks for having me.

Jerry: Today, we’re going to discuss settlement issues in class action litigation over the last 12 months. As I assume everyone knows, you can’t settle a class action unless a court approves it as fair and reasonable. So, Betty, how often does this sort of issue percolate in the federal courts?

Betty: Well, class actions typically are dismissed, settled, or tried to verdict. Trials are rare as a financial exposure in most class action cases is vast, and the possibility of an adverse verdict may present unacceptable risk. Most potential class actions are resolved before or on the heels of a class certification order. Rule 23 not only provides a process for certification of a class action, but also a procedure for settlement of such claims. Rule 23(e) lays out a three-part settlement approval process. It includes a preliminary approval described as approval to provide notice to the class, notice to class members, and final settlement approval.

Jerry: Betty, what are the pros and cons in terms of settling or not settling a class action that a company is facing?

Betty: Well, Jerry, there are benefits on both sides. Early settlements offer individual plaintiffs relatively quick payments. They allow defendants the opportunity to end cases early without the need to pay the high costs, including often burdensome discovery related costs. Early settlements benefit the court system, too, by avoiding needless litigation that can clog the court’s dockets. When permitted by law, parties frequently choose to settle on a confidential basis, thereby avoiding a risk of adverse publicity which is a dynamic that benefits both defendants and plaintiffs.

Jerry: I know there’s always kind of a debate in the mind of general counsel: “Should I settle this on an individual basis, where I can do so confidentially, or should I get a settlement bar through a class action settlement?” What are some of the obstacles that general counsel should be aware of in this process?

Betty: Well, in order to secure the court’s approval to send notice to the class, the parties must provide sufficient information for the court to determine whether it will likely be able to approve the settlement and certify the class for purposes of entry of a judgment. Rule 23(e) Includes a detailed list of factors for consideration before final approval of a class settlement, including the quality of class representation, whether the negotiation took place at arm’s length, the adequacy of class relief, and equitable treatment of class members. Class notice is also governed by the rule and outlines the proper process for providing notice to class members.

Jerry: Thanks for that overview, Betty. I’ve often heard that sometimes settlement approvals are rubber stamped, but in my experience, especially in the last decade, it’s anything but a rubber-stamping process. Courts depend on the presentation of facts, case law, argument of counsel, and judges don’t always apply those standards equally from state to state or federal court to federal court. And some jurisdictions hardly deal with settlement issues, whereas in other jurisdictions, it’s a daily occurrence in the courthouse. I would say, for preliminary approval, where notice is to be sent to class members, there is a less rigorous standard for certification, and this is evident with respect to the Rule 23(b)(3) requirement for predominance. In terms of practice pointers, what does this mean for defense counsel? What does it mean for companies when they approach the settlement drafting process to anticipate these issues and the sorts of questions that judges will ask in terms of either preliminary approval or final settlement approval?

Betty: Well, settlement on a class-wide basis often poses strategic dilemmas for plaintiffs and defendants alike. Issues include how much can the defendant concede without compromising its ability to defend the case if the settlement falls through and is not approved? Can a settlement-only class be too cheap, and therefore deemed inadequate or unfair when reviewed by the court? And how extensive and broad can a release be in covering the settling parties and class members?

Jerry: In my experience, that release and its parameters are a very, very set of important data points for a judge, and the notion that you can’t settle a class action with a release that’s broader than the claims actually alleged. In terms of the spectrum of issues that courts ruled upon in the settlement approval process over the last 12 months, to your mind, what are some of the key rulings in 2024 that would give guidance to general counsel?

Betty: Well, class-wide settlements often require that plaintiffs show that all applicable requirements of Rule 23 are met. Courts will deny approval to proposed class-wide settlement where the Rule 23 requirements are not established. As an example, in Galvan, et al. v. First Student Management, LLC, the plaintiffs filed a class action alleging various wage and hour violations. The parties ultimately settled the matter, and the plaintiffs filed a motion seeking preliminary approval for a class action settlement. The court denied that motion. The proposed settlement divided a $3.5 million fund into two sub-classes, including a “Driver Class” and a “Non-Driver Class” with specific periods and conditions for each. The court found that the plaintiffs’ proposed settlement agreement failed to address issues with predominance of common questions required for class certification. The court also stated that the plaintiffs failed to adequately estimate the defendants’ maximum potential exposure, making it difficult to assess the fairness of the settlement. Additionally, the court determined that the proposed settlement distribution formula might unfairly treat class different class members, particularly those who are current employees versus those who have left the company. For these reasons, the court determined that the plaintiffs’ counsel failed to meet the adequacy requirement, the class failed to meet the predominance requirement, the parties failed to provide evidence that the settlement was fair and adequate, and the plaintiffs’ lawyers did not establish that class members would be treated equitably by the settlement terms.

Jerry: In my experience over the last decade, another development in this space is the rise of objectors. Sometimes professional objectors, or sometimes members of the class who actually object to the court granting preliminary or final approval to the settlement. How often in your experience does that happen, and what are some of the key rulings over the last year with respect to objectors?

Betty: Well, there are objections all the time to class action settlements, and objectors are sometimes successful in overturning the settlement or getting it vacated on appeal. An interesting example from last year was in the case of In Re Roundup Products Liability Litigation. The parties reached a nationwide class settlement agreement, resolving the plaintiffs’ claims that Monsanto omitted information on the labeling of its roundup products. Two class members objected, alleging that the settlement process involved collusion, and that the settlement would extinguish higher value claims in their class action in Missouri. The district court rejected the Objectors’ concern and granted the plaintiffs’ motion for final approval and for certification of the nationwide class for purposes of settlement. On the Objectors’ appeal, the Ninth Circuit affirmed the district court’s ruling. The Objectors contended that the district court abused its discretion in approving the class action settlement given the warning signs of collusion and because the settlement extinguished higher value claims in the Objectors’ Missouri action and erred by relying on the parties’ use of a mediator. The Ninth Circuit determined that the district court made reasonable factual findings, including that the settlement amount and compensation rates appeared fair and adequate and that there was no evidence of collusion or inadequate representation. The Ninth Circuit also ruled that the district court did not abuse its discretion by rejecting the Objectors’ argument that the nationwide class action settlement would extinguish higher value claims in the Objectors’ Missouri class action. Finally, the Ninth Circuit found that the district court’s decision to approve the settlement did not rely on the parties’ use of a mediator, and there were no signs of collusion during the mediation itself.

Jerry: I think that Ninth Circuit decision is a great example of the sort of range of fairness considerations where an appellate court thinks that district court should focus on when they pass on objections, or with respect to the propriety of whether or not to approve a class action settlement.

Thanks so much, Betty. I think we’re out of time. Thanks so much for lending your thought leadership and expertise with respect to explaining these considerations to our audience today, and thank you everyone for tuning in. Please be reading the Duane Morris Class Action Defense Blog for further updates with respect to settlement considerations and class action litigation.

Betty: Thanks, Jerry, happy to be here.

Jerry: Thanks so much, everyone.