Category: Class Action Weekly Wire

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.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and special counsel Justin Donoho with their analysis of key developments in RICO class actions, including a key ruling from the Ninth Circuit on class certification in the RICO context.

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 for being here again for the next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jennifer Riley and joining me today is Justin Donoho. Thank you for being on the podcast, Justin. Today, we wanted to dive into the RICO Act. It’s a law that comes up a lot, but a lot of people probably don’t fully understand what it is. Justin, could you start by explaining to our listeners what RICO means?

Justin Donoho: Absolutely, Jen, and thank you for having me on the podcast today. The RICO Act, short for the Racketeer Influenced and Corrupt Organizations Act, is a federal law passed in 1970. It was originally aimed at tackling organized crime in the U.S., but over time it’s been applied to a much broader range of criminal activity. Essentially, it allows for extended criminal penalties, and even civil lawsuits, against individuals or groups involved in ongoing criminal enterprises.

Jennifer: So, you’re saying that RICO goes beyond just criminal prosecutions?

Justin: Exactly. It has both criminal and civil components. On the criminal side, someone found guilty under RICO can face up to 20 years in prison and fines up to $250,000. And on the civil side, it’s quite powerful, too – victims can recover treble damages, meaning three times the amount of actual damages, plus attorneys’ fees and the cost of the lawsuit.

Jennifer: Interesting. So, who can bring a civil RICO claim?

Justin: They can be brought by private individuals who’ve been harmed in their business or property as a result of a RICO violation. But they must meet certain requirements – often referred to as RICO’s statutory standing requirements. In other words, you have to prove causation and injury.

Jennifer: Interesting. So, what do plaintiffs have to prove to demonstrate a RICO violation?

Justin: So, there are three main elements. First, they have to prove racketeering activity. This includes a long list of criminal acts, everything from murder and kidnapping to mail fraud, wire fraud is a big one, we see a lot money laundering and securities fraud.

Jennifer: Wow, that’s quite a range.

Justin: Yeah, it really is. And that’s why RICO can be applied to so many different types of cases, especially fraud-related ones across various industries. Second, there must be a pattern of racketeering activity – at least two criminal acts – and they need to be related in some way, whether by method, victim, or timeframe.

Jennifer: Got it. What’s the third?

Justin: The third is the existence of an enterprise. Broadly, that includes individuals, partnerships, corporations, associations, or even groups that aren’t legally recognized as entities. What’s key here is the relationship between the defendant and the enterprise. The defendant can’t be the enterprise. Instead, they must be shown to have conducted the affairs of the enterprise through a pattern of racketeering activity.

Jennifer: Got it, that makes sense. So, what is the statute of limitations applicable to a RICO claim?

Justin: It’s four years from the date of discovery of the injury caused by the RICO violation.

Jennifer: So, now I understand that RICO class actions have become more significant recently, can you tell us about some of the key rulings from the past year?

Justin: Yes, the past year was a big one for RICO class actions. Courts granted class certification in about 33% of cases in 2024, while denying it in 67%. These decisions can have massive implications, especially because treble damages in class actions can pose serious risks for defendants.

Jennifer: Can you give us an example of a case where class certification was granted and the class was certified?

Justin: Sure, so one notable one was Sihler v. Global E-Trading, LLC. It involved alleged fraudulent charges for diet pills. The so-called “Keto Racket.” The court found that common legal and factual issues, like the alleged conspiracy to mislead consumers and artificially suppress chargebacks, outweighed individual differences. That was enough to certify a nationwide class under RICO. In that case, the court emphasized that the harm stemmed from the overall conduct of the enterprise. They also dismissed the idea that plaintiffs had to prove reliance in these RICO claims.

Jennifer: Do you have any examples where class certification was denied in the RICO context?

Justin: Yes. So, the Ninth Circuit in White, et al. v. Symetra Assigned Benefits Services reversed the district court’s order granting class certification in a RICO lawsuit. The plaintiffs were approximately 2,000 individuals who had received structured settlement annuities, or SSAs, to resolve personal injury claims who thereafter entered into factoring transactions exchanging their future annuity payments for immediate but discounted lump sums. The plaintiffs alleged that the defendants, the issuer and obligor of the SSAs, wrongfully induced them into these factoring agreements through misleading representations, unfair business practices, and hidden conflicts of interest in violation of the RICO. The district court granted the plaintiffs’ motion for class certification. On appeal, though, the Ninth Circuit found that “individual issues of causation will predominate over common ones when evaluating whether defendants’ acts and omissions caused the plaintiffs to enter factoring transactions and to incur their alleged injuries.” The Ninth Circuit held that the “defendants’ allegedly uniform course of conduct was not as uniform as plaintiffs suggest,” including because although the defendants’ “initial communications were standardized, the process became more individualized to the annuitant as it went along.” Further, the Ninth Circuit held that “even assuming defendants engaged in uniform conduct, plaintiffs have not shown there is a common question of whether such conduct improperly induced plaintiffs to enter into factoring agreements to their detriment. Here, resolving the critical element of causation will require consideration of individualized issues that swamp the assertedly common ones.” Thus, the Ninth Circuit ruled that “any assessment of whether the defendants’ alleged acts and omissions caused the plaintiffs to enter the factoring transactions, or led them into accepting inferior factoring deals than they otherwise would have absent the alleged misconduct, would require an analysis of each plaintiff’s individual circumstances – including their understanding of the transaction and motivations. The result would be 2,000 mini-trials on causation.” Given the variety in interactions and state court processes, the Ninth Circuit concluded that individualized issues of causation would predominate, making class certification improper. For these reasons, the Ninth Circuit reversed the district court’s ruling granting the plaintiffs’ motion for class certification.

Jennifer: Got it. Thanks for that overview, Justin, what about settlements in these types of cases? Are they common in the RICO context?

Justin: Large settlements are not exceedingly common, however, there were several in 2024 that crossed that $1 million mark. The biggest one we saw was In Re Juul Labs, Inc., Marketing, Sales Practices, And Products Liability Litigation, in which the court granted final approval to a settlement of $45 million to resolve claims with defendant Altria Group alleging that the company created, marketed, and sold tobacco products by misleading the public about the addictiveness and risks of the product, and by trying to expand the market by capturing and addicting individuals who had not previously used tobacco or e-cigarette products, including in violation of the RICO.

Jennifer: Well, Justin, this has been incredibly informative. Thanks so much for breaking down such a complex topic in an understandable way for our listeners and thank you to our listeners for tuning in today.

Justin: My pleasure, Jen. Always happy to talk legal strategy, especially about class actions. Thanks to all the listeners.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and senior associate Nelson Stewart with their analysis of key developments in securities fraud class actions, including a notable decision from the U.S. Supreme Court clarifying the standard for claims brought under the Securities Exchange Act alleging pure omissions of fact.

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 for being here again, loyal blog listeners and readers, for the next episode of our weekly podcast series, the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is Nelson Stewart from our New York office. Thanks so much, Nelson, for being on the podcast.

Nelson Stewart: Thank you. Great to be here, Jerry.

Jerry: Today we want to discuss trends and important developments in the securities fraud class action space. Certainly, securities fraud claims generally turn on alleged public misrepresentations by a security issuer and adjudication of these claims often are done on a class-wide basis. The plaintiffs’ bar obviously has made class action litigation in the securities fraud space a very active area, and 2024 was certainly no exception. Nelson, can you explain to our listeners a little bit of the background of how federal securities laws work in this context?

Nelson: Sure, the pillars of the federal securities law are the Securities Act of 1933, and the Securities Exchange Act of 1934, both of which were enacted in the wake of the stock market crash of 1929 to help regulate the securities markets and promote transparent disclosure to investors. The Securities Act generally regulates securities offerings, while the Securities Exchange Act governs the trading of existing securities and securities markets. The Securities Act allows private litigants to pursue claims against corporate issuers for material misrepresentations or omissions made in connections connection with the securities offering. Although the Securities Act expressly provides a private cause of action, for losses related to an offering a plaintiff must demonstrate the shares of the security at issue trace back to that offering. Because of this limitation, plaintiffs tend to look to the broader implied right of right of action under the Securities Exchange Act Section 10(b) and SEC Rule 10b-5, which prohibit fraudulent schemes and fraudulent misrepresentations in connection with any securities transaction.

Jerry: Well, thanks so much for that context. In the class action space, securing class certification is the Holy Grail for the plaintiffs’ bar because it’s very dangerous to try a certified class action. And so, the parties put lots of effort into either prosecuting or opposing a motion for class certification. And that in turn requires that questions of law or fact predominate over those that are pertinent to individuals, and that a class action is superior to all of their methods to adjudicate the dispute. In the securities fraud context, what are some of the challenges and litigations in terms of securing or defending against class certification?

Nelson: For a large and varied group of plaintiffs, proving reliance on a misstatement of material fact – which is one of the prerequisites of a securities fraud action – often creates individual fact issues among investors that could overwhelm common fact issues and present an insurmountable hurdle to class certification. This challenge was substantially mitigated when the U.S. Supreme Court adopted the “fraud on the market theory” of reliance in Basic v. Levinson. This theory avoids the need to show individual alliance by employing the presumption that, when a stock trades in an efficient market, investors “rely on the market as an intermediary for setting the stock price in light of all publicly available information; accordingly, when an investor buys or sells the stock at the market price, the investor has, in effect, relied on all publicly available information, regardless of whether the investor was aware of that information personally.”

Jerry: How does the plaintiff’s bar invoke the Basic presumption to be able to litigate securities fraud class actions?

Nelson: To invoke the Basic presumption, plaintiffs must demonstrate that a misrepresentation was publicly known; that it was material; that the stock traded in an efficient market; and that the plaintiffs traded the stock between the time the misrepresentation was made and the date the misrepresentation was revealed to be untrue.

Jerry: Well, I know a lot of cases and rulings in 2024 pivoted on that presumption. In your mind, what were some of the key rulings in the past 12 months?

Nelson: In 2024, the U.S. Supreme Court clarified the standards for claims brought under the Exchange Act that allege a pure omission of fact. In Macquarie Infrastructure Corp., et al. v. Moab Partners, L.P., plaintiffs alleged Macquarie omitted material facts and public statements, but did not identify any material misleading statements of fact made by Macquarie. Under the Securities Act, a pure omission of fact is expressly prohibited if it makes the statement in an offering document misleading. The Supreme Court held that Macquarie’s pure omission did not impose liability under Rule 10b-5, even when there is a duty to disclose, unless they render the affirmative statement misleading. In this case, plaintiffs had not alleged any affirmative misstatement. The decision also resolved a split among the courts of appeal concerning private right of action, arising from an Item 303 statement issued pursuant to SEC Regulation S-K. Item 303 statements require a publicly held company to disclose trends and uncertainties that affect the company’s financial condition. The Supreme Court ruled that, half-truths, in which a defendant discloses some, but not all, material facts that render the statement misleading can create liability for an Item 303 statement. However, a pure omission, as in this case, in an Item 303 statement does not create a private right of action. Other notable decisions discuss the reasonable investor standard established by the Supreme Court in Omnicare, Inc. v. Laborers District Council Construction Industries Pension Fund and the presumption for omissions under Rule 23 set forth in the Supreme Court’s decision in Affiliated UTE Citizens v. United States.These cases were addressed in In Re Ocugen, Inc. Securities Litigation, and in Crews, et al. v. Rivian Automotive, Inc.

Jerry: It’s like the plaintiffs’ bar in the securities fraud class action area is constantly pushing the legal envelope and innovating with new theories. How successful was the plaintiffs’ bar in 2024 in securing certification of motions for class certification?

Nelson: In 2024, 70% or 19 out of 27 class certification motions in securities fraud actions were successful. Defendants fared better on motions to dismiss, motions to strike, and motions for summary judgment, which were granted in whole or in part at a fairly high rate.

Jerry: That is a high rate. Do you have a sample, in terms of your thinking, of what class certification ruling kind of crystallizes all this, and is representative of victories on the plaintiff side?

Nelson : In Pampena v. Musk, plaintiffs filed a class action under 10(b) of the Exchange Act alleging Elon Musk made misleading statements to artificially depress the share price of Twitter, after Musk announced his intention to acquire the company. In April 2022, Twitter agreed to be acquired by an entity that was wholly owned by Musk for $54.20 per share. From May 14, 2022, to May 17, 2022, Musk made three public statements concerning the anticipated acquisition. First, Musk stated that the merger was on hold because the presence of fake accounts and spam on the Twitter platform would prevent him from completing the acquisition. Musk followed that comment by stating that these accounts comprise more than 20% of Twitter users. Finally, Musk announced that the merger could not move forward until Twitter’s CEO issued accurate SEC statements after the CEO declined to publicly disprove Musk’s claims about the fake accounts. Plaintiffs alleged that the share price dropped from $45.08 on May 12 to $35.76 by May 24. In opposition to the motion for class certification, Musk did not dispute the numerosity requirement or the commonality requirements of Rule 23. His opposition focused primarily on the predominance requirement of Rule 23(b)(3). Musk argued that the sophisticated investors would have understood that his statements were false and would not have relied on them. Accordingly, the class could not show individual reliance among the sophisticated investors and the other investors in the class. The court noted that the plaintiffs asserted their claims under the fraud on the market theory of reliance adopted by the Supreme Court in Basic. In challenging the fraud on the market theory, Musk argued the difference between sophisticated investors and other investors in the class rendered the market for Twitter shares inefficient. The court found that this argument misplaced the emphasis on investors. The fraud on the market theory presumes that in an efficient market, all publicly available information, not an investor’s interpretation of that information,  is deemed to be reflected in the share price. Once the Basic presumption is established, predominance is satisfied, absent a rebuttal of the price impact caused by the misrepresentation. The court found that Musk had not presented any evidence that would sever the link between his misrepresentations and the decline in share price that is required to rebut the basic presumption. Musk also argued that the lead plaintiffs were not typical of those in other of other class members, because there were certain class members who did not rely on his statements. The court found this argument similar to the predominance defense and held that the lead plaintiff’s experience reflected common issues among the plaintiffs, and that the claims were sufficiently typical. Finally, Musk argued that the class was overbroad because it would include individuals who either did not realize a loss or profited from the trades within the class period. The court ruled that a subset of class members who did not incur damages does not defeat a class action at the certification stage. It reasoned that injured parties and non-injured parties should be sorted out in the damages phase of the litigation, and the court granted the plaintiff’s motion for a class certification.

Jerry: That last point is interesting. Yesterday morning, the U.S. Supreme Court issued an 8-to-1 ruling in LabCorp v. Davis and indicated that certiorari had been improvidently granted. But Justice Kavanaugh issued a dissent – and this is a class action case that many people were following – where he indicated that if a class contains uninjured class members, a district court cannot certify it, and it’s not something in the damages phase. Obviously, it’s just one vote. It’s in a dissent. But, when a Supreme Court Justice dissents like that, it’s very important. So, it will be interesting to see if there’s a motion for reconsideration brought or the defense in that case continues to assert the defense that to the extent an uninjured class member is in the four corners of the class definition – that’s a reason why the class can’t be certified. But separate and apart from that, obviously, when cases get certified, settlements typically follow. How did the plaintiffs’ bar do on the settlement front in the securities fraud class action space?

Nelson: The plaintiffs’ class action bar successfully converted class certification rulings into class-wide settlements at a brisk pace in securities fraud litigation.  The top 10 securities fraud class action settlements totaled $2.65 billion in the past year. By comparison, the top 10 securities fraud class action settlements totaled $5.4 billion in 2023.

Jerry: Well, that’s certainly a drop, but it’s still an incredible amount of money that was collected by the plaintiffs’ securities fraud class action bar. So, it will be interesting to see if 2025 replicates that sort of success that the plaintiffs enjoyed in 2024. Well, great analysis, Nelson, and thanks so much for joining this week’s Class Action Weekly Wire.

Nelson: Thank you.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman, senior associate Elizabeth Mincer, and associate Niyah Dantzler with their analysis of the key developments in labor class actions, including claims sparked by the impact of the COVID-19 pandemic on the workforce.

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 thank you for being here again for our next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today are Niyah Dantzler and Elizabeth Mincer. Thanks so much for being on our podcast.

Elizabeth Mincer: Great to be here, Jerry.

Niyah Dantzler: Thanks for having me on the podcast, Jerry.

Jerry: Today, we wanted to discuss trends and important developments in the area of labor-related class action litigation. Liz, I know this is an area of special interest in your practice – tell us about the highlights of the past year.

Elizabeth: So, labor law issues often result in class action litigation either brought by advocacy groups, including unions, or by private plaintiffs asserting violations of labor-related statutes. In turn, labor-related class actions can arise in many contexts as the consequence of alleged mistreatment or abuse of workers can give rise to various statutory or constitutional claims. In 2024, courts addressed a number of labor issues in class action litigation. Historically, class action rulings have been brought under statutes such as the Migrant and Seasonal Agricultural Workers Protection Act, the Victims of Trafficking and Violence Protection Act, the Labor Management Relations Act, as well as under various constitutional based theories, and then the state law equivalents. Significantly, the majority of the key labor-related class action litigation decided in 2024 involved claims relating to COVID-19 vaccination requirements.

Jerry: Thanks very much for that overview. Let’s talk about COVID-related rulings then in 2024. Niyah, could you give us a brief overview of the key rulings covered in the 2025 Class Action Review in this space?

Niyah: Absolutely. There were several important rulings, particularly in cases stemming from claims relating to COVID-19 vaccines. For example, the U.S. Court of Appeals for the Ninth Circuit weighed in on a case, Bacon v. Woodward, and that case was brought by a group of firefighters from Spokane, Washington, alleging that the city unlawfully discharged them while they refuse to receive COVID-19 vaccinations in accordance with the governor’s Proclamation that all healthcare providers be fully vaccinated against COVID-19. Although the Proclamation was intended to accommodate sincerely held religious beliefs, the plaintiffs alleged that Spokane did not provide religious accommodations to any city firefighters. They instead claimed that the Proclamation, as applied to them, violated their Free Exercise rights under the U.S. Constitution. The state joined the action as an intervener to defend the Proclamation, and move for a judgment on the pleadings under Rule 12(c). The district court granted the motion, finding that Spokane lawfully applied the proclamation, but on appeal, the Ninth Circuit reversed it, determined that the firefighters had plausibly alleged that the city applied the Proclamation arbitrarily and capriciously, and showed callous disregard to the firefighters’ religious rights, and so the Ninth Circuit highlighted the fact that the fire departments outside of Spokane had permitted religious accommodations and actually sent non-vaccinated firefighters to provide services in Spokane pursuant to mutual aid agreements. Accepting the plaintiffs’ allegations as true, the Ninth Circuit held that firefighters’ claims should move forward because it was possible that they could establish that the Proclamation, as it applied to them, was not narrowly tailored to achieve the goal of stopping COVID-19 spread, as it failed to account for less restrictive alternatives, such as testing, masking, or considering natural immunity.

Jerry: Upon reading that decision, it sure seems to me the Ninth Circuit decision provided some good guideposts for employers trying to accommodate religious exemptions in terms of dealing with public health mandates and underscores the importance of ensuring that these policies are generally applicable but flexible, insofar as they don’t discriminate on the basis of religious practices. Liz, were there significant rulings under the Trafficking Victims Protection Act in 2024 that companies should know about in this space?

Elizabeth: Yes, there was a very interesting case that involved the global supply chain that is important for employers to know about. So, in a case called Doe, et al. v. Apple Inc., the plaintiffs, a group of former child miners who were injured in accidents and their representatives filed a class action against the defendants under the Trafficking Victims Protection Reauthorization Act of 2008, we’ll call TVPRA, which essentially makes it illegal to participate in a venture that uses forced labor. The plaintiffs argued that the defendants participated in a venture by purchasing cobalt through the global supply chain, which included cobalt that had been mined under forced labor conditions. The defendants had purchased this cobalt from large international suppliers, but those suppliers had subsidiaries in the Democratic Republic of the Congo involved in both mechanized, industrial mining, but also informal mining – and informal mining is really a less sophisticated, more crude operation, where the plaintiffs asserted that sort of operation posed severe safety risks and forced labor. The defendants filed a motion to dismiss, and the district court granted the motion. So, a positive outcome there. The district court had determined that the plaintiffs failed to sufficiently prove a direct connection between their injuries and the defendants’ actions, which was just merely buying that cobalt. The district court stated that purchasing cobalt through a supply chain without more direct involvement or control over the mining operations, did not constitute “participation in a venture” under the TVPRA. The case was appealed, and the DC. Circuit affirmed that ruling. It agreed that the plaintiffs failed to prove that the defendant’s participation in that venture actually violated the TVPRA. The D.C. Circuit found that the plaintiffs failed to show how an injunction against the defendants would remedy their injuries, as they were no longer involved in the mining, and the effectiveness of such an injunction was too speculative. The D.C. Circuit also reasoned that the plaintiffs failed to establish that the defendants had a sufficient degree of control or shared purpose with the suppliers to be considered participants in a venture, and that the relationship was that of a buyer and seller.

Jerry: Thanks very much for that overview, that’s a really important case. And those led to some substantial settlements in the labor class action space in 2024. How did the settlement numbers this past year compare to 2023?

Niyah: So, we saw a significant increase in the numbers from 2023 to 2024. In 2023, the top 10 labor settlements totaled about $139 million, whereas in 2024, we got up to $237 million.

Jerry: Well, that’s a big jump. The top settlement areas are something we track every year in the Duane Morris Class Action Review, and we’ll want to keep our eyes on these numbers in 2025 in terms of labor-related class action settlements. Well, Liz and Niyah, thank you very much for lending your thought leadership in this area and being with us today on our podcast. Listeners, thank you for tuning in. And if you have any questions or comments on today’s podcast, please send us a direct message on Twitter @DMClassAction.

Niyah: Thanks, everyone. Great to be here.

Elizabeth: Thanks for having me and thank you to the listeners for being here today.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Nathan Norimoto discussing the key developments in civil rights class actions, including a notable ruling from the U.S. Supreme Court.  

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: Hello, everyone, and thank you 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 Nathan Norimoto. Thank you, Nathan, for being on the podcast today.

Nathan Norimoto: Thank you, Jen. Great to be here.

Jennifer: Today, we wanted to discuss some trends and important developments in the area of civil rights class action litigation. Nathan, do you want to talk a bit about this area before we get into the recent developments?

Nathan: Sure. Yeah, so for over 70 years, class actions have been amongst the most powerful tools to secure civil rights in America. This began with the class action of Brown, et al. v. Board Of Education, in which the United States Supreme Court declared school segregation unlawful and arguably set the stage for the civil rights movement. In 1966, Congress and the judicial rule-making authorities crafted Federal Rule of Civil Procedure Rule 23 with the express goal of empowering litigants, challenging systematic discrimination – particularly segregation – to force courts to order widespread injunctive relief that would protect members of the class as a whole. And ever since, this provision remains as salient to the enforcement of federal civil rights statutes and constitutional claims as it was at its inception.

So, for a multitude of reasons, class actions are often a tool of first resort by advocacy groups to remedy civil rights violations – which we certainly saw in 2024.

Jennifer: Thanks, Nathan. What were some of those major developments in 2024 in this area of civil rights class action litigation?

Nathan: So, class actions in the civil rights context span numerous issues. Last year, given this breadth of subject area, there are well over 100 decisions in this space. However, the percentage of times courts granted a plaintiff’s or plaintiffs’ motion for class certification was down significantly last year, with courts granting certification about 40% of the time – in contrast to 2023, where courts granted class certification around 62% of the time. And so last year we saw a bit of a downtrend as to when these classes were being certified.

Jennifer: Are there any key rulings that our listeners need to know about in this area?

Nathan: So, among all civil rights cases, the United States Supreme Court issued an important ruling in the City Of Grants Pass, Oregon, et al. v. Johnson. In that case, the Supreme Court addressed whether a city’s public camping laws violated the Eighth Amendment’s prohibition against cruel and unusual punishment. Grants Pass, Oregon had ordinances banning camping on public property which can lead to fines and imprisonment. The Ninth Circuit had previously ruled that such laws could not be enforced against homelessness if there were not enough shelter beds available. The plaintiffs, two individuals experiencing homelessness, had filed a class action alleging that Grants Pass’ enforcement of these laws was unconstitutional under the Eighth Amendment. The district court agreed with the plaintiffs and issued an injunction against the city’s enforcement of the public camping laws, and then the Ninth Circuit affirmed the district court’s ruling. The United States Supreme Court then granted certiorari, and it overruled the Ninth Circuit’s decision. The Supreme Court determined that enforcing general public camping laws does not violate the Eighth Amendment. The court opined that the Eighth Amendment’s cruel and unusual punishment clause focuses on the nature of the punishments and not the criminalization of certain behaviors. And so, the court found that the punishments of fines and brief jail time terms imposed by grants passed were not cruel or unusual under the Eighth Amendment. The court also rejected arguments that the enforcement of these laws against individuals who are involuntarily homeless should be considered cruel and unusual, and in the end the court concluded that issues like homelessness and how to address homelessness involved complex policy decisions that were best left for elected representatives and not federal courts to address. So, in conclusion, the court overruled the Ninth Circuit’s ruling, finding that the enforcement of public camping laws by Grants Pass did not violate the Eighth Amendment.

Jennifer: Wow, what an interesting decision. So, you mentioned that there were over a hundred rulings in this area last year. How are things progressing so far in 2025 – have there been any interesting cases, interesting rulings where class certification was granted?

Nathan: Definitely, yeah. So, one example is Rossow, et al. v. Jeppesen. In that case, the plaintiff filed a punitive class action against the defendant, the Director of the Idaho Department of Health and Welfare, challenging a regulation that designated the prenatal use of controlled substances as child abuse, neglect, or abandonment – with the exception, of course, being that any substances that were prescribed by medical professional would not fall under this regulation. The regulation also included a clause that mandated individuals who use controlled substances be listed on the Central Registry for a minimum of ten years, and the plaintiff in this case was placed on the registry in December of 2021 after she tested positive for THC following the birth of her child. The plaintiff filed a class action, alleging violations of due process and equal protection under the United States Constitution on behalf of herself and others in similarly situated positions. Plaintiff filed a motion for class certification, and the court granted the motion. The court had found that the class met the numerosity requirement, as there were over 1,000 women on the registry for a similar reason as the plaintiff. The court also determined that the plaintiff’s claim raised common questions of law and fact, including whether the placement on the Central Registry affected a class member’s access to employment and their other personal rights, substantive rights, and whether there was a discriminatory intent, and how reports of child abuse were substantiated based on prenatal drug use. There were some procedural details and statute of limitations differences between the class members. But despite these differences, the court found that commonality was met because the class shared at least one significant common issue, including being placed on the registry. The court determined that the plaintiff’s claims for declaratory and injunctive relief met the requirements under Rule 23, and ultimately certified the class.

Jennifer: Well, it certainly seems like we will be continuing to see courts granting these motions in 2025, and the plaintiffs’ bar aggressively pursuing certification on behalf of plaintiffs. We know that successful certification often leads to settlements between the parties rather than a continuation of the litigation and ultimately a trial. So, how successful were plaintiffs in securing settlement dollars in 2024?

Nathan: So, settlement dollars in civil rights class actions in 2024 were significant. The top 10 settlements totaled $313.8 million. However, this was a significant decrease from the prior year, when the top 10 civil rights class action settlements in 2023 topped $643.15 million.

Jennifer: Wow, what a difference! So, the top settlement amounts in each area of law have been massive in recent years. And that’s a major trend that we track in the Duane Morris Class Action Review. We will continue to track those numbers in 2025 and keep our listeners aware of developments. Nathan, is there anything else corporate counsel and employers should be on the lookout for over the upcoming year?

Nathan: Definitely. Given the volume of litigation in the civil rights area, as well as the frequency with which these classes are granted, and also burgeoning issues that percolate, for example, claims regarding COVID-19, claims regarding increased issues with homelessness, and others, it’s anticipated that the plaintiffs’ bar will continue to be creative and inventive in this space for the coming year.

Jennifer: Well, thank you so much for all of your great analysis, Nathan – thank you for being here with me today. Listeners, thank you for tuning in. And if you have any questions or comments on today’s podcast, please send us a DM on Twitter @DMClassAction.

Nathan: Thanks, Jen. Thanks for having me on this morning!

Duane Morris Takeaway: Our 100th episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Zev Grumet-Morris discussing the key developments under the Class Action Fairness Act (“CAFA”).

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 being here for our 100th episode of our weekly podcast the class Action Weekly Wire. It’s a privilege today to have Zev Grumet-Morris with me to do our 100th podcast. Welcome, Zev.

Zev Grumet-Morris: Great to be here, Jerry. Thanks for having me on the 100th episode.

Jerry: Today, we’re diving into something that has a big impact on litigation in general and class action litigation in particular, the Class Action Fairness Act of 2005. It’s discussed in much detail in our annual Duane Morris Class Action Review. Zev, can you start explaining to our listeners what the CAFA is and why it’s significant?

Zev: Absolutely. So, the Class Action Fairness Act, or CAFA, was signed into law by President George W. Bush on February 18, 2005, and it’s a key statute that expanded federal jurisdiction over large class actions and mass actions. And essentially, it just shifted most of these lawsuits from state courts to the federal courts, which has had major implications for both plaintiffs and for defendants.

Jerry: So how does CAFA function in practice for corporations?

Zev: So, functionally, CAFA provides a tool for defendants, especially big businesses, big employers, to remove class actions from state court to federal court, and that’s a big deal, because federal courts are often viewed as more neutral forums for corporate defendants. And so, this ability to forum shop, if you will, has influenced how both plaintiffs’ lawyers and defense attorneys plan their litigation strategies.

Jerry: I’ve always thought that CAFA underscores the notion that location is everything, just like buying real estate – location, location, location. And those who have defended class actions know it sometimes can be very different in state court as compared to federal court. How easy is it, after CAFA, for a plaintiff to keep a class action in state court as opposed to resisting removal to federal court?

Zev: Well, post-CAFA, it’s gotten very difficult, or at least more difficult. But before CAFA it was pretty easy, actually, for plaintiffs to keep cases in state court. Federal jurisdiction requires that every plaintiff meet a $75,000 amount in controversy threshold, and for complete diversity to exist between the plaintiffs and the defendants. So, that meant that plaintiffs’ lawyers before CAFA could often craft cases to stay in state court, especially in jurisdictions with elected judges who might be less sympathetic to out-of-state corporate defendants.

Jerry: So how did CAFA change that dynamic?

Zev: Well, it changed it fairly significantly. So, under CAFA, just one class member being from a different state than a defendant is enough to create diversity. In addition, the total amount in controversy only needs to exceed $5 million, and the class must have at least 100 members. So, this lower threshold made it much easier for corporate defendants to move cases into federal court.

Jerry: Well, we all know that California, New York, and states of that ilk are epicenters for class action litigation, and their defendants invoke CAFA more often than in other areas of the country, and therefore the jurisprudence on the interpretation of CAFA is probably more advanced in the Second and Ninth Circuit, and especially in the Ninth Circuit, than in other areas of the country. In terms of the last 12 months, what, in your opinion, would be the key decisions that have interpreted CAFA?

Zev: Yeah, and you’re absolutely right with the comment you make about the Ninth Circuit. But, as you point out, it’s not the only circuit that comes out with key decisions. So just this past January, the D.C. Circuit issued a rare CAFA ruling in National Consumers League v. Starbucks. So, the National Consumers League, which is a nonprofit focused on consumer protection, they filed a lawsuit in D.C. Superior Court against Starbucks, alleging that the company had misled customers by claiming to ethically source its coffee and tea, when in reality they were actually sourcing allegedly from farms that were involved in labor abuses and that violated the D.C.’s Consumer Protection Procedures Act, or the CPPA. And they filed this lawsuit on behalf of both NCL and the general public. Now, Starbucks attempted to remove the case to federal court under the CAFA. NCL opposed that removal, arguing that the case didn’t meet the criteria for federal jurisdiction, and then, as it turns out, the court agreed with them. They held that the CAFA did not apply because NCL’s lawsuit was not a class action under Rule 23 or any similar rule. So, although the complaint referenced damages and public interest, NCL explicitly stated that it was not seeking representative damages on behalf of the public which undermined Starbucks’ claim that the amount in controversy exceeded the $5 million threshold. And the court also found that diversity jurisdiction failed, because, even though the parties were from different states, the damages NCL sought amounted to just about $34, more or less, few cups of coffee, and that fell short far short of the $75,000 threshold. So, in the end Starbucks’ argument that potential attorneys’ fees could push the amount over the limit was deemed to be far too speculative, and courts have repeatedly held such fees cannot be aggravated in CPPA cases. So, at the end of the day, the court remanded the action back to the state court.

Jerry: That’s a great analysis. I’ve always thought that CAFA is like a mini trial within a trial in terms of figuring out what procedurally ought to be the venue where a class action is litigated. Well, thanks so much for giving us your insights and thought leadership on CAFA litigation, and how it impacts corporate defendants over 2024 and what we can expect in 2025. Thanks so much for joining us on our 100th podcast.

Zev: Happy to be here, Jerry. Thanks.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman, Jennifer Riley, Alex Karasik, and Greg Tsonis discussing the upcoming Duane Morris webinar that will provide analysis of key developments in the first six months of the EEOC’s fiscal year 2025 and the 2025 edition of the EEOC Litigation Review.

Join us on Monday, May 5 at 12 p.m. Central. Learn more and register here: Mid-Year Review of EEOC Enforcement Litigation and Strategy. Stay tuned for the new edition of Duane Morris’ EEOC Litigation Review launching on our blog this Thursday, May 1.

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: Welcome to our listeners. Thank you for being here for our weekly podcast series, the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris and joining me today on the podcast are my partners Jen Riley, Alex Karasik, and Greg Tsonis. Thanks so much all of you for being here on the podcast.

Jennifer Riley: Thank you, Jerry, happy to be part of today’s podcast.

Alex Karasik: Thanks, Jerry. Glad to be here.

Greg Tsonis: Great to be here, Jerry.

Jerry: Today we have a message about a great webinar coming up, Duane Morris’ mid-year review of the EEOC enforcement litigation and strategy. The host will be the four of us, and we wanted to personally invite all of our listeners and readers to sign up and attend this 30-minute event. Jen, do you want to share with our listeners a little bit about the content of this webinar?

Jennifer: Sure, Jerry. The webinar will be a quick 30-minute panel discussion where the four of us will review the EEOC’s latest strategic priorities and lawsuit filings. We’ll take a look at the first six months of the Commission’s fiscal year 2025. We’ve analyzed the strategic priorities, the lawsuit filings, and other activity for fiscal year 2025 to date, and we’ll provide our listeners that analysis in a short half-hour segment.

Jerry: This virtual program is in response to many phone calls we’ve been receiving from general counsel, HR professionals, and the like in terms of what in the world is going on with the EEOC. So, we’ve designed this webinar for corporate counsel, human resource professionals, and business leaders to provide insights into the EEOC’s latest enforcement initiatives, and just what is going on in Washington, D.C. in terms of all things involving the EEOC. Alex, what are the webinar details?

Alex: The webinar is scheduled for Monday, May 5, from 12 p.m. to 12:30 p.m. Central time. We will provide the sign-up link in the episode transcript on the Class Action Defense Blog. This webinar is really great information-packed 30 minutes and it’s well worth your time – especially to get insights into the EEOC’s activities on the first half of its fiscal year.

Jerry: This webinar will prove to be very informative, and we hope all of our listeners for our weekly podcast series can tune in for it.

Greg: We also want to remind listeners that we are publishing our primer on EEOC litigation, the EEOC Litigation Review 2025 edition this coming Thursday, May 1. Given the importance of compliance with workplace anti-discrimination laws for our clients, the Review is a great resource for corporate counsel and human resources professionals. It’ll be available on the Class Action Defense Blog in e-book format.

Jerry: Well, thanks, Jen, Greg, and Alex for being here today. We’re looking forward to our webinar next week, and to sharing our insights in terms of all things EEOC and what is going on in Washington, D.C. And we’ll continue to share those details in updated blog postings and sharing further thoughts and analysis regarding what employers can do to get ready.

Jennifer: Thanks, Jerry, and, thanks to our audience. Hope to have everyone at the webinar next week.

Greg: Thanks for having me, Jerry, and thank you to all the listeners.

Alex: Thank you, everyone.