The Class Action Weekly Wire – Episode 88: Key Trends In Data Breach Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Jennifer Riley, special counsel Justin Donoho, and associate Ryan Garippo with their discussion of the key trends analyzed in the 2025 edition of the Duane Morris Data Breach Class Action Review, including the contributing factors in the exponential growth of data breach class action filings, the sophistication of the plaintiffs’ bar litigation theories, and the chart-topping settlements in this area.  

Bookmark or download the Data Breach Class Action Review e-book here, which is fully searchable and accessible from any device.

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 all our loyal listeners and blog readers. Thank you for being here on our weekly podcast, the Class Action Weekly Wire. I’m, Jerry Maatman of Duane Morris, and joining me today are my colleagues, Jen, Justin, and Ryan. Thanks so much for being on this particular podcast.

Jennifer Riley: Thank you, Jerry. Happy to be part of the podcast today.

Justin Donoho: Thanks, Jerry. Glad to be here.

Ryan Garippo: Thanks for having me, Jerry.

Jerry: Today in the podcast we’re discussing the publication of this year’s Duane Morris Data Breach Class Action Review and desk reference designed for our clients to give them the latest, greatest information on the cutting-edge issues in the world of data breach class action. Listeners can find the e-book publication on our blog, the Duane Morris Class Action Defense blog. Jen, can you share with our listeners a bit about this desk reference and publication?

Jennifer: Absolutely, Jerry. The volume of data breach class actions exploded in 2024. Data breach has emerged as one of the fastest growing areas of class action litigation. The Review contains an overview of these filing numbers as well as settlements as well as some of the key decisions in this area. So, in sum, courts continue to reach inconsistent outcomes on issues such as standing and uninjured class members, those issues that are uniquely challenging in the data breach space. The Review has dozens of contributors, and it reflects really the collective experience and expertise of our class action defense group.

Jerry: I think it used to be, people thought whenever there was a drop in the stock following a company announcement, as sure as the sun rises in the east and sets in the west every day, there’d be a securities fraud class action lawsuit being filed. That seems to be the case now, when there’s a data breach incident, a data breach class action follows in its wake. Justin, can you shed some light on why this particular cause of action in this particular space has been growing incrementally over the last 36 months?

Justin: Absolutely. I mean, the frequency of the data breaches have been increasing, which is a huge part, and of course, with that comes heightened attention from both consumers and the plaintiffs’ bar. High profile cases, such as that multidistrict litigation arising from the Marriott International breach that affected over 133 million people, for example. There’s the MOVEIt MDL, which is another big one that got going last year. These have all put companies on notice that failure to secure personal data can lead to costly litigation. Cost lawsuits are not just about the breach itself, it’s also about the aftermath. So, consumers are now more aware of the risks and more inclined to seek legal recourse when their data is compromised.

Jerry: I think this is a great area where the notion that the law is trailing behind technology and can’t keep up with it – may well explain some of the developments in this particular space from a cybersecurity perspective. How do you think the increasing frequency of these sorts of events, and the sophistication of cyber criminals, is playing out in the class action space?

Ryan: Well, the rise in cyberattacks is definitely a huge factor. We’re seeing more sophisticated tactics from cybercriminals. Ransomware is at least one prime example – hackers demand payments in exchange for not publishing or further exploiting stolen data. The issue is that paying the ransom doesn’t necessarily guarantee the safe return or the deletion of the data, which makes these incidents devastating for companies. Additionally, I think we’ve seen as there’s been a shift to remote work and cloud-based infrastructure, that more vulnerabilities are exposed which ultimately increases the frequency of breaches. As a result, I think we’re seeing more lawsuits following these incidents and plaintiffs’ attorneys are more eager to capitalize on the growing number of affected individuals.

Jerry: In the last two weeks, the U.S. Supreme Court has accepted a case for review on the issue of uninjured class members, and whether or not their presence is something that can be used by a defendant to stop class certification. And one of the things we’ve seen in the last few years in the data breach area is the lack of injury or no injury-in-fact, as the Supreme Court has articulated that in TransUnion v. Ramirez. Jen, what do you see in terms of what plaintiffs are doing to try and come up with theories, at least from a financial damage or injury standpoint, that companies are now facing in what I would call data breach litigation 2.0?

Jennifer: Well, Jerry, I think several factors are really contributing to the rise of the popularity of these lawsuits. First, I think the sheer volume of people affected by these breaches has ballooned. Especially with breaches impacting millions of consumers or employees. As the size of these cases increases, I think it naturally leads to higher settlement amounts which in turn are attracting more plaintiffs’ lawyers to this area. Additionally, I think the type of data being compromised is becoming more sensitive – financial and healthcare information, for example – are leading to additional claims and higher potential damages and are leading plaintiffs’ attorneys to become more creative in looking for ways to monetize, capitalize on these breaches in terms of converting them into settlement dollars.

Justin: Yes, absolutely. And some courts are also becoming more sympathetic to plaintiffs in these cases, and to the potential long-term consequences of data breaches to plaintiffs, even where immediate harm is not apparent. So, it’ll be interesting to see where that Supreme Court case plays out. And let’s not forget about the legal fees and the expert fees also contributing to some of these large settlement dollars. As these cases become more complex with issues like class certification and determining damages, and the reasonableness of the cybersecurity, the costs involved in litigating these lawsuits are skyrocketing.

Jerry: You mentioned class certification – certainly the plaintiffs’ bar their theory is file the case, certify the case, then monetize the case, and the statistical study within the desk reference talks about the rise in class certification to 40%. Still a low number, but significantly up from 16% in calendar year 2023. What do you attribute to the trend that’s showing an upward number and a more of a chance for the plaintiffs’ bar to certify their data breach class actions?

Ryan: Well, like we mentioned before, I think it’s reflective of the fact that plaintiffs’ counsel has gotten more sophisticated in this space, and courts are getting more sympathetic to the plaintiffs at issue. But that said, class certification is still a major hurdle in any class action. And it’s particularly challenging in data breach cases. The increased success rate for class certification in the data breach space is 40% in 2024, reflecting that evolving legal precedent. Courts are now more inclined to accept the argument that consumers have suffered harm, even if their data hasn’t been directly misused, and that the mere recognition of an indirect harm, such as the increased risk of identity, theft, or emotional dispute or emotional distress, is enough to allow plaintiffs to get into court and overcome this clear obstacle.

Jerry: Jen, what were some of the major data breach litigation markers in the federal courts this year, by your way of thinking?

Jennifer: Well, Jerry, great question. We discuss in the Review some of the largest ones. Certainly, one of the prime examples is the ongoing MOVEIt Customer Data Breach Litigation. That litigation that began back in 2023 continued throughout 2024, and is ongoing. In that one, the Judicial Panel on Multidistrict Litigation consolidated more than 200 class action lawsuits. Those lawsuits resulted from a Russian cybergang hacking the file transfer software MOVEIt. The Judicial Panel on Multidistrict Litigation transferred those proceedings after consolidating them to the U.S. District Court for the District of Massachusetts. The plaintiffs in that case, as I mentioned, alleged that this vulnerability in the Massachusetts-based company MOVEIt, a transfer file software, was exploited. That data breach is considered to be the largest hack of 2023. According to the Panel’s initial transfer order, it exposed personally identifiable information of more than 55 million people. So, as I mentioned, that proceeding is ongoing. In July 2024, the Transferee Court issued an order adopting a modified bellwether structure in which it ordered the plaintiffs to file up to six consolidated amended complaints, and it ordered the parties to meet confer on the defendants to be named in each of those. The plaintiffs are going to file their motions for class certification, according to the schedule at least, in the summer of 2025. So, lots to be done in those cases yet.

Jerry: Well, it seems to me that data breach litigation, especially in the class action arena, is a problem or a fear that keeps corporate counsel up at night, and some of the top settlements in this space in 2024 maybe fuel that fear. What were some of the key and highest class action settlements in the data breach case, despite the fact that certification hovered around 40%?

The largest data breach class action settlement in 2024 was $350 million in In Re Alphabet Inc. Securities Litigation, Case No. 18-CV-6245 (N.D. Cal. Sept. 30, 2024), in which the court granted final settlement approval in a class action alleging that a software glitch led to a data breach in which Google+ users’ personal data was exposed for three years.

Justin: Yes, Jerry. Plaintiffs did very well in securing high dollar settlements last year, with the top 10 settlements totaling $593.2 million dollars. This was a significant increase over 2023 when the top 10 totaled $515 million – so they keep going up, too.

Jerry: Well, my prognostication is the 2025 numbers are going to go up and even exceed those chart-toppers in the next 12 months. In terms of final parting thoughts for our loyal listeners, what are some of the takeaways and key points that our listeners and readers should keep in mind for data breach issues in 2025?

Ryan: Invest in strong cybersecurity measures – it’s essential to stay out of the game in this space and constantly involve your cybersecurity infrastructure against these emerging threats. But beyond that, companies should also have a well-designated incident response plan in place and make sure that it’s regularly tested. This helps ensure not only quicker recovery, but also a stronger defense in court if a breach ever occurs. This legal landscape is evolving, and data breaches are no longer niche; they’re becoming an expected part of the litigation landscape, and so, having a proactive and comprehensive approach can help mitigate the immediate and long-term costs, and help keep you out of those $500 million numbers that Jerry and Justin mentioned before.

Jerry: Well, thanks, Jen, Justin, and Ryan, for your thought leadership and your analysis of this particular area. Loyal listeners, please stop by our blog and website to download for free our e-book, Data Breach Class Action Review – 2025. Thanks so much everyone for lending your expertise today on our Class Action Weekly Wire podcast.

Ryan: Thanks, Jerry.

Justin: Thanks for having me and thank you, listeners.

Jennifer: Thanks so much, everyone. See you next week.

The Class Action Weekly Wire – Episode 87: Key Trends In Wage & Hour Class And Collective Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman, Jennifer Riley, and Greg Tsonis with their discussion of the key trends analyzed in the third edition of the Duane Morris Wage & Hour Class And Collective Action Review, including courts’ interpretation of the conditional certification process, a circuit-by-circuit scorecard, and best practices for employers in 2025.

Bookmark or download the Wage & Hour Class And Collective Action Review e-book here, which is fully searchable and accessible from any device.

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 back, podcast listeners, to our first session of the Class Action Weekly Wire for calendar year 2025. Thank you for being here. I’m Jerry Maatman, a partner at Duane Morris, and joining me today are my partners, Jen Riley and Greg Tsonis. Welcome back.

Jennifer Riley: Thank you, Jerry, happy to be on the first week of Weekly Wire podcast of 2025.

Greg Tsonis: Thanks, Jerry. Glad to be here.

Jerry: Today on our podcast we’re going to be discussing the most recent publication of the Duane Morris Class Action Defense group regarding the 2025 Wage & Hour Class And Collective Action Review. Listeners can find the e-book version of this publication on our blog, the Duane Morris Class Action Defense Blog. Jen, can you share with our listeners some of the ins and outs of this executive summary and e-book?

Jennifer: Absolutely, Jerry. In the Duane Morris Wage & Hour Class and Collective Action Review, we provide an overview of the trends, the key decisions, and the key settlements impacting the wage and hour space over the past year. The purpose of the Review is really multifaceted. First, we hope that it will demystify some of the complexities of class and collective action litigation in the wage and hour space. Second, we really hope the book will keep corporate counsel updated on the ever-evolving landscape of Rule 23 and FLSA collective actions and enable them to really make informed decisions in dealing with these complex litigation risks.

Jerry: Well, I know that wage and hour litigation is one of the hallmarks of our practice with our team collectively having over 225 years of experience in defending these sorts of cases. The review was edited by the three of us on this podcast and we have dozens of additional contributors that analyzed all of the wage and hour class and collective action certification rulings and settlements over the past 12 months. Greg, from your standpoint in terms of dealing with general counsel, what do you think are some of the benefits of this resource?

Greg: Great question, Jerry. So, wage and hour litigation has long been a focus of the plaintiffs’ class action bar. Part of our purpose in putting this together is really to assist our clients by helping them identify developing trends in the case law and offering practical approaches and dealing with these types of cases and class and collective action litigation.

Jerry: As you had mentioned – in 2024, this was a very active space for the plaintiffs’ class action bar, and I think one of the things that clients have remarked to me about is the statistical analysis contained in the Review in terms of looking at circuits’ success rates for both the plaintiff side and the defense side. I know in calendar year 2024, there were approximately 160 motions that were decided and actually plaintiffs had a high degree of success at close to 80%. Jen, what’s your take on why the plaintiffs’ bar is able to certify in essence 4 out of 5 cases?

Of the 157 total motions for conditional certification filed in federal courts in 2024, the plaintiffs won conditional certification 125 times, or at a success rate of 80%, while 32 motions were denied.

Jennifer: Great question, Jerry. So, the threshold for conditional certification tends to be very low. In many cases, plaintiffs are submitting declarations – sometimes only one or two declarations, sometimes with payroll or time records – and courts are routinely accepting this minimal showing. It’s really not about proving the case, at this stage just about showing there’s a plausible basis for contending that the same allegations apply across a defined group. So, given that the plaintiffs’ bar knows this process so well, it’s really no surprise that they are continuing to have a high rate of success here.

Greg: Exactly, and plaintiffs are often able to leverage the conditional certification process and the subsequent notice that issues to bring in more employees to build their case. The fact that it’s relatively easy to get certified gives them a significant advantage right from the start.

Jerry: At least in all circuits except two, both the Fifth and Ninth Circuits, there’s a standard two-part test. A first stage called the lenient stage of conditional certification, and then a second stage called decertification. What occurred in 2024 in terms of how decertification motions came down, especially with respect to the changes or flux in the case law based on what’s coming out of the Fifth and Sixth Circuits?

Greg: That’s right, Jerry. So, after conditional certification, there’s a decertification phase where the court looks closer at the actual claims, the actual evidence that the plaintiffs have been able to marshal, and determine whether those employees are actually similarly situated. Now, historically, federal courts were almost universally following a two-stage process, but as of 2021, the Fifth Circuit threw a wrench in that with its decision in Swales v. KLLM Transport Services. There, the Fifth Circuit essentially abandoned the two-stage process and instituted a more rigorous approach where they required plaintiffs to present stronger evidence upfront. The Sixth Circuit followed suit in a case in 2023, but took a different approach by imposing even stricter standards.

Jerry: It’s very interesting to me that a piece of New Deal legislation passed in 1938, even close to 100 years later, has three different standards – a virtual patchwork quilt of case law depending on where an employer is sued, and what particular circuit’s law is applicable to the certification motion. What’s that like, Jen, in terms of what employers face in trying to defend themselves in these sorts of cases?

Jennifer: Absolutely, Jerry. In a word, it’s creating inconsistency. And that inconsistency could be problematic because it makes predicting outcomes more difficult. And with these now 3 distinct standards, there is a growing chance that the Supreme Court eventually will step in to provide some clarity here.

Jerry: I think it also has something to do with case architecture and venue selection. In 2023, we saw two dozen rulings in the Sixth Circuit. Yet last year, only a dozen, basically a 50% drop in the number of cases filed and then went to certification there. What do you think are the long-term implications in terms of FLSA litigation and venue selection?

Given the Sixth Circuit’s abandonment of the traditional two-step certification process, we expected a material decrease in FLSA cases filed in that in 2024. Indeed, there were only 12 rulings on certification and decertification motions in 2024 in the Sixth Circuit, down from 22 total rulings in 2023. In 2024, the Second Circuit issued the most certification rulings (27 granted; 6 denied), followed by the Fourth Circuit (20 granted; 1 denied); and the Ninth Circuit (13 granted; 7 denied).

Jennifer: Well, Jerry, it’s hard to say for sure. On the one hand, the stricter certification process could deter some plaintiffs from filing in the Sixth Circuit. That certainly seems to have been the case over the past year. On the other hand, employers could face a tougher time getting cases decertified after they’ve been conditionally certified which could lead to larger settlements, or more cases being litigated in other jurisdictions. So, we may see a shift in how and where the cases are filed going forward.

Jerry: Well, certainly anyone who is awake and watching TV on January 20th saw that change is inevitable, and change is now upon us, at least at the governmental sector. Greg, what do you think 2025 bodes for employers in terms of the types of things that the private plaintiffs’ bar will do, especially in the context of FLSA class and collective action litigation?

Greg: The overall trend is clear, Jerry. Employers should be aware that wage and hour litigation isn’t going away anytime soon. Given the plaintiffs’ bar’s ongoing success in these types of cases, and the ease with which they’re able to secure conditional certification, employers really need to be proactive. That means making sure that their pay practices are fully compliant, making sure that they’re reviewing employee classifications, and being ready to respond quickly to potential lawsuits. If they don’t, they might face costly litigation even in those jurisdictions where the plaintiffs’ bar is seeing more pushback.

Jennifer: And to add to that, employers also should be mindful of jurisdictions that are considered plaintiff-friendly, such as the Second Circuit, Fourth Circuit, Ninth Circuit. These are areas where a lot of FLSA litigation is concentrated and they tend to have even higher success rates for the plaintiffs.

Jerry: Success is all about filing the lawsuit, certifying it, and monetizing it. The Review spends a lot of pages delving into key settlements in the wage and hour space – what were the results in 2024 and what does it tell us for 2025?

Greg: Well, Jerry, plaintiffs did very well in securing high-dollar settlements in 2024 in this space, although not quite as well as they did in 2023. In 2024, the top 10 wage and hour settlements totaled just shy of $615 million. That was a decrease from 2023, when the top 10 wage and hour settlements totaled $742.5 million, but relatively in line with recent years.

The top 10 wage & hour class and collective action settlements totaled $614.55 million in 2024, down from $742.5 million in 2023, and up from $574.55 million in 2022.

Jerry: Well, my prognostications are the numbers in 2025 are going to go through the roof, and I think we’re apt to see even higher numbers than we’ve seen ever before. But obviously the jury’s still out on that. Well, thank you, Jen, and thank you, Greg, for your thought leadership and analysis in this area, and thank you to our loyal blog readers for tuning in to our first podcast of 2025. Please order your free copy of the Duane Morris Wage & Hour Class And Collective Action Review e-book right off of our blog.

Greg: Thank you for having me, Jerry, and thank you, listeners.

Jennifer: Thanks so much, everyone.

The Class Action Weekly Wire – Episode 86: Post-Chevron: Challenges To Administrative Agencies’ Authority

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Jennifer Riley with their discussion of a U.S. Supreme Court decision vacating a D.C. Circuit ruling in an NLRB dispute over an employer’s liability for withdrawing recognition from a union under the agency’s successor bar standard. This ruling marks a notable development in the wake of the high court’s Loper Bright Enterprises v. Raimando opinion overturning the Chevron doctrine.

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 our next episode of the weekly podcast series, the Class Action Weekly Wire. I’m Jerry Maatman of Duane Morris, and joining me is Jen Riley, the vice chair of the Duane Morris Class Action Defense Group. Thanks for being on the podcast, Jen.

Jennifer Riley: Thanks so much, Jerry. Great to be here.

Jerry: Today we’ll be breaking down the Supreme Court’s acceptance of a case for review involving the National Labor Relations Board and Hospital Menonita de Guayama from Puerto Rico. The case is crucial, especially after the Supreme Court’s decision in the Loper Bright Enterprises v. Raimondo case, which reshapes how courts review agencies interpretations of the law. I think this is a fascinating case, and a great opportunity to talk about how the Supreme Court’s shift in its approach is going to affect labor law and employment relations. It’s an interplay between agency discretion, and judicial review. And it’s really at the heart of class action litigation. Jen, can you recap the main points of this case for our viewers and listeners?

Jennifer: Thanks, Jerry, absolutely. The case involves a dispute where a hospital in Puerto Rico withdrew recognition from a union; the National Labor Relations Board ruled that this violated the National Labor Relations Act, citing the successor bar doctrine. That doctrine prevents an employer from withdrawing recognition from a union for at least six months after taking over a bargaining unit. After the hospital filed suit, the D.C. Circuit upheld the NLRB’s decision, and eventually the Supreme Court granted review and agreed to hear the case.

Jerry: Thanks, Jen. The core issue here is whether the successor bar doctrine, which the NLRB has applied for year, is legally valid – especially in light of the Supreme Court’s recent decision in the Loper Bright case. The Supreme Court’s ruling overruled the longstanding Chevron doctrine which had instructed lower federal courts to defer to federal agencies when interpreting ambiguous parts of statutes. That ruling has profound implications for federal courts, which will now review decisions made by agencies like the NLRB in this particular case.

Jennifer: Exactly, Jerry. That is why the Hospital Menonita case is so important. The Chevron doctrine is rooted in the idea that in certain circumstances, agencies with expertise in certain areas are better positioned to interpret ambiguous statutes than courts. If the statute is ambiguous, the court must assess whether the agency’s interpretation of the statute is reasonable. The court will generally uphold the agency’s interpretation, if it is a reasonable interpretation of the ambiguous statute, even if the court itself might have interpreted the statute differently. Courts generally give significant deference to agencies’ expertise and experience in interpreting laws within their jurisdiction.

This is now up for scrutiny, of course, after Loper Bright. Essentially, the hospital argued that the court should independently review whether the NLRB’s interpretation of the law, particularly the successor bar doctrine, was correct under the National Labor Relations Act. The NLRB defended its position, claiming that the D.C. Circuit wasn’t relying solely on Chevron and upholding the decision. The NLRB argued that the circuit actually used pre-Chevron case law that recognized agency discretion in interpreting the National Labor Relations Act. However, the hospital countered that under Loper Bright, any deference to the NLRB’s interpretation would need to be reconsidered.

Jerry: Interesting. I think this is somewhat of a blueprint or a test case for how employers or corporations sued, based on interpretations of agency regulations, can turn the table, so to speak, and argue that federal district court judges should interpret the laws as enacted, and not based on somewhat liberal interpretations of those laws by agencies. That’s exactly what the hospital, as I understand it, argued in terms of the Loper Bright decision requires the court to critically assess an agency’s interpretation, and not simply defer carte blanche to them. In the past, courts would have applied Chevron, and given the agency a wide berth in terms of all benefits, or the jump ball, going to the agency in terms of its interpretation. But now, with Loper Bright we have a new playing field, and the Supreme Court has signaled that agency interpretations will be scrutinized, particularly when the statute in question is ambiguous.

Jennifer: Exactly. The Supreme Court ultimately vacated the D.C. Circuit’s ruling and remanded the case here, sending it back to the D.C. Circuit for reconsideration in light of Loper Bright.

Jerry: It’s interesting, insofar as now the argument is ‘this is the essential reading of the statute, and how the court should interpret it, and the agency’s interpretation is just one data point.’ And now defendants have significant precedent to say agencies’ interpretations have been rejected and basically maybe not even a data point, but shouldn’t even be considered. So, the balance of power has shifted and the litmus test, so to speak, or the playing field on which defendants are operating has completely shifted, based on the Supreme Court’s decision.

Jennifer: Great point, Jerry. The successor bar doctrine itself is already controversial. Some people argue that it’s necessary to protect workers’ rights during employer transitions, while others think it goes too far in restricting employers’ ability to challenge unions.

Jerry: Well, now the case is back with the District of Columbia Court of Appeals, the D.C. Circuit, and it’s that time of the year when people make New Year’s resolutions and predict what’s going to happen in 2025. What is the Jen Riley prognostication as to the ultimate outcome of this particular case?

Jennifer: Well, this one is hard to say. The D.C. Circuit will have to reconsider its ruling with the Loper Bright framework in mind, which means it will have to engage in a more detailed analysis of whether the NLRB’s interpretation of the law is the best reading of the National Labor Relations Act. If the court decides that the successor bar doctrine doesn’t align with the statute, we could see a major shift in labor law, particularly in how unions and employers navigate these types of transitions.

Jerry: Well, that’s a very succinct summary of the significant implications of this case. Stay tuned, readers and listeners. 2025 – put on your seatbelts. This is going to be a heck of a ruling. Well, thank you so much, Jen, for your thought leadership and your contributions and giving us an inside baseball look at what’s going on in terms of the future interpretations of the Loper Bright doctrine, and how that will impact corporations and their defense of both labor and employment matters and class actions in general.

Jennifer: Thanks so much, Jerry. Thanks for having me, and happy holidays to all of our listeners!

The Class Action Weekly Wire – Episode 85: Mapping Out The “Judicial Hellholes” – Top Plaintiff-Friendly Jurisdictions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Bernadette Coyle with their discussion of the 2024-2025 edition of the American Tort Reform Association’s (“ATRA”) “Judicial Hellholes” report, which details the 10 least favorable venues for corporate defendants across the country.

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 weekly podcast series. My name is Jerry Maatman, and I’m a partner at Duane Morris, and joining me today is my colleague, Bernadette Coyle. Thanks so much for being on the podcast.

Bernadette Coyle: Thanks, Jerry. I’m very happy to be here.

Jerry: Today, our podcast covers one of my most favorite topics, and that is the annual report issued by the American Tort Reform Association, which goes by the acronym of ATRA, in terms of its annual report called the “Judicial Hellholes” report. It focuses on litigation issues and does a comparative study of litigation in all 50 states, and then ranks those states with respect to fairness or unfairness of the judicial system and bias, or lack of bias, in the administration of justice. So, it’s an important read for corporate counsel, those facing class action litigation, because it identifies what are suboptimal jurisdictions, what are challenging jurisdictions. And as a result, obviously in terms of our annual study of class action litigation, settlements, and rulings, many of the jurisdictions on that watch list happen to be epicenters for class action litigation. So, Bernadette, in this year’s report there were 10 specific jurisdictions listed as the top Judicial Hellholes, and I’m sure our loyal blog readers and listeners are anxious to hear – so what jurisdiction came out as on top of that infamous list of the worst jurisdictions in which to be sued in 2024?

Bernadette: This year, #1 was a defending champion from 2023; it was the Philadelphia Court of Common Pleas and the Pennsylvania Supreme Court ranked as the most challenging venue for defendants. And over the past few years, the courts there have been issuing nuclear verdicts. We’re talking about eye-popping nine figure damage awards that seem to be handed out with very little consideration for fairness. And additionally, a recent decision from the Pennsylvania Supreme Court has led to a flood of medical liability lawsuits by removing an important legal requirement for entry. In fact, I think they even allowed for duplicative damages in certain cases which only encourages more litigation. So, it’s definitely becoming a very plaintiff-friendly environment.

Jerry: So, kind of the watchwords are: it’s a petri dish or a hotbed for growing certain types of lawsuits. Moving on to #2, which I understand to be New York City. The report highlights it as one of the other really tough places to be sued. What’s your take on the ranking of New York City on the report?

Bernadette: Yeah, I think in New York City they noted a rise in fraudulent lawsuits, particularly with RICO lawsuits being filed against plaintiff firms and the city’s laws, including the Scaffold Law and the consumer protection act, are definitely ripe for abuse. And we’re seeing plaintiffs’ lawyers that are really cashing in on these opportunities, and it’s led to what the report is calling a “fraudemic.” It’s a growing problem in the city’s civil justice system, and unfortunately, leadership seems to be looking the other way.

Jerry: That’s certainly a very concerning trend for corporations that are sued in those jurisdictions. I know that #3 on the list is South Carolina in particular, its treatment of mass torts and the asbestos litigation. What are the problems identified there?

Bernadette: South Carolina’s asbestos judge has become infamous for being highly biased against corporate defendants. The judge often imposes unwarranted sanctions, modifies jury verdicts in favor of plaintiffs, and is becoming known for appointing a receiver to maximize insurance recoveries. All of that creates a legal environment where defendants don’t stand a fair chance, and plaintiffs are given an unfair advantage. This is really a textbook example of how judicial bias can distort the civil justice system.

Jerry: Sounds like that issue systemic to South Carolina in general, and mass tort litigation in particular. Moving on to #4, Georgia, where I litigate the defense of many class actions – what did the report have to say about the state of litigation in the Peach State?

Bernadette: Last year, Georgia was tied for #1 with Pennsylvania, and this year the report notes that Georgia is facing a rise in nuclear verdicts, huge excessive damage awards. And additionally, there’s a trend of inflated medical costs and laws that seem to set defendants up for failure. For example, Georgia still has an archaic seatbelt gag rule, meaning juries can’t even consider whether an occupant was wearing a seatbelt during a crash. It’s part of a broader trend in Georgia’s civil justice system that seems to favor plaintiffs and puts defendants at a severe disadvantage.

Jerry: Thanks. Well, next up is California, and I think that for the 42 years I’ve been a lawyer and dealing with corporate counsel, that seems to be the biggest litigation headache that they face in terms of doing business and getting sued in the state of California. What’s driving the inclusion of California this year in the Judicial Hellholes report?

Bernadette: California continues to be a major destination for plaintiffs’ lawyers looking to expand liability. The state’s legal landscape is very favorable for certain types of lawsuits. I mean, first off, California has the highest number of nuclear verdicts in the nation, and then you’ve got cases like Lemon Law claims and no injury lawsuits under the Private Attorneys General Act and the Americans with Disabilities Act. These are bogging down businesses and creating endless litigation that’s both costly and inefficient.

Jerry: What about Cook County, Illinois, where I was born and raised and sitting today? That deserves special mention this year – what was your take on Cook County’s inclusion?

Bernadette: Yes, Cook County is obviously very near and dear to us, and it’s also become infamous for its disproportionate share of lawsuits, especially no injury litigation and asbestos cases. One of the biggest issues here, though, is the Biometric Information Privacy Act, which has been abused to the point where lawsuits are filed over the very smallest technicalities.

Jerry: Well, those are the major geographic tours of the Hellholes. What about a brief overview of the remainder of the top 10 list?

Bernadette: Absolutely. Next is St. Louis, Missouri, which is also a hotbed for asbestos lawsuits, and for plaintiff-friendly rulings; the Michigan Supreme Court, which seems to allow reliance on junk science; followed by King County, Washington, which made it onto the list for the first time because of judges’ tendency to allow unfair group trials and junk science into court; and finally, Louisiana, with its nuclear verdicts that distort the fairness of its civil justice system.

Jerry: Well, that’s quite a tour of judicial highlights. The ATRA report, though, also has positive developments. What were some of those in terms of the legal landscape in 2024?

Bernadette: Yes, there are bright spots. For example, several states have strengthened their expert evidence rules to prevent junk science from entering court. The Third Circuit Court of Appeals ruled against lawsuits claiming insufficient product warnings when those warnings had been federally approved. And in Kentucky and Utah, we’ve seen courts make decisions that uphold fairness in the legal system.

Jerry: Well, that is good news in terms of judges being umpires and calling balls and strikes rather than being biased in favor of plaintiffs. I do believe that the report is essential, if not required reading, for our corporate counsel, and one can learn a lot looking at these reports from year to year and transposing them against litigation statistics that basically show the epicenters or hotspots of class action litigation tend to be clustered in these states that are identified by the report in terms of constituting a judicial hellhole. Well, thank you so much, Bernadette, for joining us on your very first podcast we really appreciate your contributions and thought leadership today, and thanks so very much.

Bernadette: Thank you for having me, Jerry, and thank you, listeners.

The Class Action Weekly Wire – Episode 83: How Trump’s Second Term Could Transform Class Action Litigation

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Jennifer Riley with their discussion of how the Trump’s second term in the White House could transform the class action arena heading into 2025.

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 this episode of the Class Action Weekly Wire. I’m joined for this episode by my partner, Jen Riley, the vice chair of Duane Morris’ Class Action Defense Group. Welcome, Jen.

Jennifer Riley: Thanks, Jerry. Great to be here.

Jerry: Today, we’re going to be discussing the potential impact of the second Trump presidency. Obviously, the last week has been dramatic in terms of the political world in America, and many people uppermost in their mind are what are going to be the new policies, the new procedures, the goals of the Trump administration, and how that’s going to play out in the class action litigation space. Jen, do you have some immediate thoughts in terms of what we’re going to see starting in 2025?

Jennifer: Thanks, Jerry. Well, since the time of Trump’s first administration, and really, over the past decade, American life and culture have really dramatically transformed. We’ve gone through a global pandemic, which drastically changed how we work and how employers manage their workplaces. The focus during the next Trump administration could reflect an even more pro-business approach with an emphasis on reducing class actions by supporting arbitration and limiting the opportunities for these large-scale lawsuits, especially in the employment space and in the consumer protection area. We also likely will see a few areas of particular focus, namely, immigration reform and easing of enforcement activity by federal agencies like the EEOC and the DOL, and a decrease in support potentially for initiatives, focusing on things like diversity in the workplace.

Jerry: I agree with those points. In living through the changeovers, from red to blue or blue to red, of the White House over the past several decades, I think this changeover may well be one of the most dramatic in memory. I’m looking for the impact on the federal judiciary and the differences between the types of individuals President Biden has nominated for appointments in the federal court compared to those that Donald Trump is apt to put forward, starting in 2025. I think that more conservative, measured federal judiciary may have a big impact in terms of class action litigation, and narrowing the circumstances where classes may well be certified. As far as immigration reform, I know that a lot of clients have been calling us about what is that to happen, and what sort of enforcement mechanisms will be in place. So, I think that America and its business leaders certainly are looking at some change in the offing, and some flux coming down the road.

Jennifer: Another area that I think we likely will see some change is in the artificial intelligence arena. The Trump administration could likely reverse some of the current administration’s regulatory efforts on AI, especially if they’re seen as having an anti-Big Business agenda. President Biden issued several executive orders that provided directives to federal agencies regarding AI, and President Trump could very well end those orders. Additionally, rather than focusing on regulations, the Trump administration could be more inclined to collaborate directly with tech companies – for instance, in crafting AI policies. One roadblock President Trump could have with any AI policy changes is the continued Democratic control of agencies, though, like the EEOC and the NLRB.

Jerry: Those are great points, and speaking about AI, obviously Corporate America is facing a patchwork quilt of laws and regulations without any overarching federal law, and the existence of various pockets of laws and regulations at the state level. So, a very difficult compliance challenge for companies. I think that the two Republican leaders on the commission at the EEOC, Andrea Lucas, and then Marvin Kaplan at the NLRB, may well be tapped to lead those organizations, but that might not take effect until mid-2025, and so maybe the trumpeted demise of government enforcement action at the Department of Labor or at the EEOC may well be overblown in a certain respect.

Jennifer: Oh, I absolutely agree. There have been several new regulations from the NLRB, the EEOC, and the Department of Labor over the past years, from changes to overtime rules, non-compete agreements, independent contractor classifications, and the implementation of the Pregnant Workers Fairness Act. Besides the activity slowing down from all agencies, whether it be ordered or due to lack of funding, though, there’s a chance that some of the regulations are rolled back with Trump’s new administration. The Trump administration also likely will reduce the focus on workplace diversity initiatives, including rolling back policies promoting affirmative action, or expanding definitions of workplace harassment. The EEOC might also take a more narrow approach to enforcing discrimination laws, for instance, things like LGBTQ rights or protections for other nontraditional segments of the workforce.

Jerry: Thanks, Jen. It’s certain change is inevitable and get used to it because it’s coming down the pike. We’ve seen it before, but it’s certainly underscored here in the circumstances of the shift from the Biden administration to the Trump administration. If you heard what he said on the campaign trail, change is in the offing. I know we’ll be addressing this in the forthcoming publication of the annual Duane Morris Class Action Review – that comes out in the first week of January of 2025. So, thanks very much for your thought leadership, Jen, and your analysis of what Corporate America is apt to face in the next few months under the new White House.

Jennifer: Absolutely thanks for having me, Jerry, and thank you to our listeners for joining us today.

The Class Action Weekly Wire – Episode 75: Key Developments In Name, Image, Likeness Antitrust Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Sean McConnell with their analysis of class action litigation in the antitrust space involving student-athletes and their Name, Image, Likeness (“NIL”) claims.

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 this episode of the Class Action Weekly Wire. It’s my privilege and honor to introduce Sean McConnell, who chairs Duane Morris’ antitrust group, who’s joining us today to talk about all things antitrust in the class action space. Welcome, Sean.

Sean McConnell: Great to be here. Thanks for having me, Jerry.

Jerry: Today we wanted to discuss a newsworthy lawsuit, the filing of which has been reported wide and far. A federal court lawsuit filed against the NCAA and various universities called Robinson v. NCAA. What should our listeners and readers know about that case? What does it mean?

Sean: Thanks, Jerry. Well, we’ve talked several times about the name, image, and likeness, or NIL, antitrust class actions that have been filed against the National Collegiate Athletic Association, or NC2A, and various athletic conferences. Arguing that past prohibitions by the NCAA preventing athletes from being compensated for their name, image, and likeness and various issues have arisen related to those claims leading to litigation. And this Robinson case is one of the latest in those lines of cases. This case was filed by former University of Michigan football players, who were NCAA student-athletes prior to June 15, 2016 on similar grounds to the House NCAA case. But the House case, that class only went back to 2016. So this this new Robinson case is for student-athletes that played sports for NC2A colleges before 2016, on grounds of a continuing violation theory basically that the settlement proceeds should extend back beyond 2016 and cover their prohibition on compensation dating back before that time, arguing that they should have been compensated for their name, image, and likeness, as well as the plaintiffs in the House case.

Jerry: These types of NIL cases seem to be at the forefront of antitrust class action litigation involving universities. And it seemed like when the NCAA lifted the restrictions on compensation for student-athletes, it opened, so to speak, the floodgates of litigation. Is that what you’re seeing in terms of the poll side of the courthouse?

Sean: That’s exactly right, Jerry. Now that student-athletes are able to be compensated for their name, image, and likeness – which athletes were not able to do so, for you know, over a hundred years – we’re now seeing, you know, several antitrust class actions being filed against member institutions of the NCAA and the NCAA itself for money that they believe they should have been able to earn, whether it’s from television revenue sharing, from their name, image, and likeness being sold on jerseys and other memorabilia that was sold by the schools and by other third parties. So that is certainly the current trend.

Jerry: There’s certainly a lot of money at issue. If you become a little more granular and drill down into the theories of recovery in the Robinson lawsuit that has just been filed, what is it exactly that the plaintiffs are trying to recover?

Sean: Sure. So the theory of the case in Robinson is that the NCAA, its member institutions, and then, you know, networks such as the Big 10 Network that profited off of the name, image, and likeness of student-athletes by selling television rights and broadcasting games in which those players played – that much like players in professional leagues are compensated through revenue-sharing programs from television rights – that the plaintiffs in the Robinson case believe that they are entitled to a revenue share from the use of their name, image, and likeness, from television distribution, as well as from various products sold by those institutions.

Jerry: Well, thanks for that update and that analysis. I’m sure we’ll be circling back to you when the litigation proceeds to the class action certification stage – obviously, the Holy Grail in any class action that the plaintiffs are seeking. Also wanted to talk a little bit about the recent ruling a few weeks ago, where a federal district court judge declined to approve a class action settlement on antitrust theories against the NCAA to the tune of a $2.78 billion class-wide settlement. Tell our readers and listeners a little bit about how that came about?

Sean: Sure. So that’s the House antitrust case that I that I mentioned earlier, which covers student athletes from 2016 to the present. And as you as you referenced Jerry, I mean the settlement amount was quite large at first blush. I mean the notion that student-athletes would now be entitled to, you know, almost $3 billion in compensation from member institutions and conferences. But the problem with the settlement, as some objectors raised, and as the court took note of, was that apportioning different amounts of the revenue share by conference by school still amounted to seemingly price-fixing, because when you’re setting the limits on how much revenue can be shared with different student athletes, even as part of a settlement, those revenue sharing programs and limits on what certain conferences or certain schools could do from a revenue perspective, how different collectives organized by school could compensate student athletes, even as part of the settlement still amounted to, you know, apparently price-fixing, and that’s what the court was concerned with those limits, and whether that still constituted a Sherman Act violation. And so the judge told the parties to go back to the drawing board and try to work out a fix that was a little bit you know more in line with the antitrust laws.

Jerry: That’s so interesting, and certainly a blockbuster settlement in 2024. And one would think that the parties are going to reboot, do a 2.0 settlement, so to speak, and put that before the court – apt to be one of the largest settlements that we report on this coming January, when we publish the Duane Morris Class Action Review, as well as the mini-book on antitrust class action litigation that you’re an author of. Well, thank you so much for Sean, for joining us and lending your thought leadership and expertise. It’s been great to speak with you.

Sean: Thank you, Jerry. It’s been great to be here again.

The Class Action Weekly Wire – Episode 74: $65 Million Data Breach Settlement Tops 2024 Class Action Charts

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman, special counsel Justin Donoho, and associate Ryan Garippo with their analysis of a major settlement in the data breach class action space, and what it signifies for trends in this area as well as data security best practices for companies.

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 this week’s installment of our podcast series called the Class Action Weekly Wire. I’m joined today by my colleagues, Justin and Ryan, and the topic of the day is one of the most significant data breach class action settlements of 2024. Welcome, Justin and Ryan.

Justin Donoho: Hi, Jerry, thank you for having me.

Ryan Garippo: Thanks, Jerry. Happy to be here.

Jerry: So specifically, what we wanted to do was talk about the ins and outs of the $65 million class action settlement announced in a data breach lawsuit entitled Doe v. Lehigh Valley Health Network. Justin, can you set the stage for our listeners and readers about what this case is about and why it’s significant?

Justin: Yes, Jerry. In this case the plaintiffs are cancer patients. They filed a class action against Pennsylvania, based healthcare company, Lehigh Valley Health Network, for its alleged failure to protect their nude photographs taken during their cancer treatments from cybercriminals who hacked into the company servers, stole the photographs, and leaked them to the public in February 2023. The plaintiffs brought claims for negligence, breach of fiduciary duty, publicity of private matters, and other claims. The plaintiffs also sought punitive damages based on their assertion that, despite being told by the criminal hackers that the nude photos and other sensitive data would be released publicly if a ransom were not paid, the health system declined to take any action, and therefore allegedly made a knowing, reckless, and willful decision of their own to allow the criminal hackers to post their nude images on the internet.

Jerry: Most data breach class actions involve infiltration of systems involving social security information, payroll data, and like. Very unusual that would include photographs, let alone photographs of patients receiving treatment. Ryan, what were some of the particulars of the settlement agreement that plaintiffs’ counsel and defense counsel for the defendant had negotiated to get this case resolved?

Ryan: Well, Jerry, the breach affected over a 135,000 patients and employees, more than 600 of whom had their medical images posted online. So the class members will receive payouts ranging from $50 to $70,000. But the higher amounts going to those who actually had their new photos published on the internet, and the lower amounts being for those who suffered a less invasive invasion of their personal information. And, as you’ve mentioned overall, the company will pay a total of $65 million to sell those claims.

Jerry: So our Class Action Review tracks settlements in all substantive areas, including data breach, and over the last 36 months, anecdotally, data breach class actions just keep getting bigger and bigger and bigger. And this is a manifestation of that trend. How do you believe this will impact the price or the going rate of data breach class action settlements going forward in Corporate America?

Ryan: Well, Jerry, I think it’s only likely to go up. The Duane Morris Class Action Review analyzed the largest data breach settlements, and in 2023 plaintiffs secured about $515 million dollars in total for the top 10 settlements. The largest settlement being $350 million in the In Re T-Mobile Customer Data Security Breach Litigation, which accounted for the majority of that number, and the next largest settlement was $49.5 million in the In Re Blackbaud Inc. Customer Data Security Breach Litigation as well. So, this is settlement is very large for a data breach class action settlement overall, and healthcare institutions continue to be a favorite target for the plaintiffs’ bar in the cybersecurity space.

Justin: Thank you, Ryan. This settlement looks like it will likely be one of the largest data breach class action settlements in 2024 for sure. This case also continues the massive growth of data breach litigation in general over the past few years. Cybercrime is on the rise – companies need to likewise raise their own levels of data security practices to mitigate risks associated with these types of incidents. In fact, a number of data security practices including involvement of Board of Directors data encryption and password reset policies were included in some level of detail in this settlement as measures the healthcare company agreed to adopt in addition to paying out all that money to the plaintiffs. These are types of data security measures all companies should consider as they design and work to continuously improve their cybersecurity programs.

Jerry: Well, thanks so much, Justin and Ryan, for your analysis of this settlement and its implications for Corporate America. The newest edition, the 2025 Duane Morris Class Action Review, will come out in the first week of January of 2025, and my prediction would be this particular settlement certainly going to be on that top 10 list. Well, thank you loyal blog readers and listeners for tuning into this week’s installment of the Class Action Weekly Wire, and thank you, Justin and Ryan, for providing your thought leadership.

Ryan: Thanks, Jerry, and thank you to the listeners.

Justin: Thank you, Jerry. Thanks everyone.

The Class Action Weekly Wire – Episode 73: Wisconsin Federal Court Blazes A New Path On FLSA Conditional Certification Process

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associates Greg Tsonis and Derek Franklin with their analysis of a Wisconsin federal court decision weighing in on the two-step process for issuing notice of a Fair Labor Standards Act (“FLSA”) collective action, illustrating a gaining momentum among district courts toward rejecting a two-step “conditional certification” approach in favor of a one-step standard.

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 with me today are Greg Tsonis and Derek Franklin. Thank you for being on the podcast today guys.

Derek Franklin: Great to be here, thanks for having me.

Greg Tsonis: Yes, thanks Jen, I’m happy to be here.

Jennifer: Today we are discussing a recent ruling coming from the U.S. District Court for the Eastern District of Wisconsin, Laverenz v. Pioneer Metal Finishing. Greg, can you tell us a little about the background of this case?

Greg: Sure, so in this case the plaintiff Amanda Laverenz filed a class and collective action lawsuit under the FLSA and Wisconsin state law alleging that Pioneer deprived her and other similarly situated hourly employees of wages through its practice of rounding employees’ time clock entries to the nearest quarter hour and paying employees based on that rounded time. Now the plaintiff moved for conditional certification of a collective action, and argued that the court should employ a lenient two-step certification process established in 1987 by a Third Circuit district court in Lusardi v. Xerox Corp. Under the Lusardi framework, named plaintiffs need only present what courts have described as a “modest factual showing” that similar potential plaintiffs exist to satisfy the first step of conditional certification. In the second step, assuming others have joined the lawsuit as opt-in plaintiffs and the parties have completed discovery on the merits, the court would then make a final determination whether the opt-in plaintiffs actually qualify as parties to the litigation on the basis of substantial similarity to the named plaintiffs in what is known as a second-stage final certification order. Now here, Pioneer responded that the Court should follow the Fifth Circuit’s 2021 decision in Swales v. KLLM Transport Services, LLC, which rejected the longstanding approach developed in Lusardi.  Pioneer argued that the two-step approach “is inconsistent with the FLSA’s purpose and Seventh Circuit case law stressing the similarities of FLSA certification to Rule 23 certification, which requires ‘rigorous’ scrutiny.”

Jennifer: Yes, the Swales ruling changed the conditional certification analysis significantly. The Fifth Circuit in that case recognized that nothing in the text of the FLSA even mentions “conditional certification.” The Swales court directed that courts should consider all available evidence to determine if analyzing the merits of pending claims required a “highly individualized inquiry” into each opt-in’s circumstances and, if so, to declare a certification inappropriate. Derek, which standard did the court in the Laverenz action ultimately use?

Derek: Well, Jen, the court chose to go with Pioneer’s requested standard. The court adopted the Fifth Circuit’s FLSA collective certification approach in Swales and denied Plaintiff’s motion for conditional certification. The court actually cited in its ruling a 2022 Annual Class Action Report our colleague and Duane Morris partner Gerald L. Maatman, Jr. served as General Editor. In its ruling, the court noted that federal courts in 2021 granted FLSA conditional certification motions in 81% of rulings on such motions during the first stage of the two-step process despite – in that same year – granting 53% of FLSA decertification motions at the next stage. The Court gleaned from that data that “over half of those conditionally certified putative classes failed to survive upon a more rigorous review” and concluded, as a result, that the two-step certification process “defeats the very goal it set out to accomplish — efficiency.” The court ultimately found that “significant factual differences exist regarding how the [time rounding] policy affected each employee” given that “the rounding benefitted some and negatively affected others.” The court also stated that too many individualized claims remained in the matter that would necessarily involve fact-specific inquiries. And the court explained that “it would seem particularly inefficient and unfair to notify a broad class of employees,” given its conclusion that Plaintiff’s proposed collective action claims “involve highly individualized inquiries and defenses.”  Toward that end, the Court determined that “authorizing notice in a case such as this would turn a tool into a sword,” and that “many a plaintiff would likely join the line, requiring Pioneer to defend dozens — possibly hundreds — more claims despite the fact that Laverenz has not even showed a violation of law.” Ultimately, the Court concluded that Plaintiff “failed to provide a sufficient basis for the court to facilitate notice to potential plaintiffs,” and therefore, the Court denied Plaintiff’s motion for conditional certification.

Jennifer: Wow, thanks for the overview. What a significant ruling for employers. How do you both imagine this will impact future rulings on conditional certification in the Seventh Circuit?

Greg: Well Jen, the Duane Morris Class Action Review actually analyzed FLSA conditional certification rates, and, in 2023, plaintiffs won 75% of first stage conditional certification motions. However, only 56% of those conditionally certified collective actions survived motions for decertification involving a more rigorous scrutiny. Hence, the stakes are quite meaningful in terms of the approach outlined in the Laverenz ruling.

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

Jennifer: Thank you both for your great analysis of this ruing and the possible implications it might have in the future on conditional certification motions. We will be providing the new edition of the Duane Morris Class Action Review in early January, which will have statistics on how conditional certification is shaping up for 2024. Greg and Derek, thanks for being here today, and thank you so much to our listeners for tuning in.

Greg: Thanks Jen and thank you listeners.

Derek: Happy to be here and thanks everyone.

The Class Action Weekly Wire – Episode 72: Billion-Dollar Benchmark: 2023 & 2024 Class Action Settlements

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Jennifer Riley with their analysis of class action settlements over the past 24 months and key factors influencing the era of billion-dollar class 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: Welcome loyal blog readers to our weekly installment of our podcast series, entitled The Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is vice chair of our class action defense group, Jennifer Riley, of our Chicago and New York offices. Welcome, Jen.

Jennifer Riley: Great to be here, and thanks for having me.

Jerry: Today we’re discussing one of the biggest trends in the class action litigation space – involving settlement numbers and settlement amounts in class action litigation. Over the last two years, we’ve seen the highest numbers ever in the history of American jurisprudence. It’s certainly true that settlement numbers have been through the roof, and so we’re going to take a look at not only the last two years, but also the first six months of 2024. It’s clear to us that we’ve certainly entered a new era of heightened risks and higher stakes in class action litigation – Jen, what’s your take on the trends in this particular area?

 

Jennifer: Thanks, Jerry, I agree completely. The numbers are just staggering. In 2023, parties agreed to resolve 10 class actions for a billion dollars or more. In 2022, parties resolve 14 class actions for a billion dollars or more in settlements. That makes 24 billion-dollar settlements in two years. Many of the settlements in 2023 emanated outside of the products and pharmaceutical space, really signaling a wider base and a greater threat to businesses as these settlements continue to redistribute wealth. However, these settlements have reached virtually all industries and all areas of the country.

 

Jerry: Let’s talk about one in particular, and that’s the $12.5 billion-with-a-B class action settlement in 2023 stemming from the federal court in South Carolina, In Re Aqueous Film-Forming Foams Products Liability Litigation. It’s somewhat of a mass tort situation as well as product liability – involving chemicals used in film forming work and fire extinguishing agents – claiming that it causes cancer, and PFAS forever chemicals are linked to both health risks and environmental contamination. The plaintiffs claim that exposure to these chemicals resulted in cancer, liver damage, and other health conditions, and that the manufacturers of these chemicals knew or should have been aware. was no trial on the merits. Parties agreed to settle, but at $12.5 billion – the largest class action settlement of the year. What other areas and what other cases spike those big numbers over the past year?

Jennifer: The third largest settlement of 2023 was in an antitrust class action that was called In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. The settlement of $5.6 billion resolved claims by the plaintiffs who were primarily merchants, merchant associations who were alleging that credit card companies and their networks engaged in anticompetitive practices. The core claim there was that the networks, Visa and MasterCard, conspired to fix interchange fees and to prevent competition, thereby inflating the costs for merchants. In particular, the plaintiffs alleged that Visa and MasterCard engaged in practices that restricted merchants from negotiating better terms or accepting competing payment methods. The plaintiffs claimed that those practices harm competition by reducing the incentive for credit card networks to lower their fees or to improve their services. And they argued that this in turn led to higher costs for merchants, which were ultimately passed on to consumers.

Jerry: So, as our readers know, we examine class action settlements every day; we track all the rulings, filings in every state court, in every federal court throughout the United States. And so we’ve done an analysis of settlements from January 1 through June 30, and we wanted to kind of preview what that looked like – Jen, what do you think the numbers are showing, or the trend is showing, in comparing the first half of 2024 to what happened over the past two previous years?

Jennifer: Great question, Jerry. So, 2024 is looking to be another blockbuster settlement year. It might not be quite as robust as the past two years. But there are several settlements that already have been approved by the courts that hit that one billion-dollar benchmark. For example, in the consumer fraud space, a $1.5 billion settlement was announced in a case called Fitzgerald, et al. v. Wildcat, which is a class action alleging that around 2012 or 2013, a federally recognized Native American tribe a began partnering with a non-tribal payday lender, who entered into agreements that allowed them to oversee and collect on loans issued by lenders owned by the tribe. In that case, the tribe alleged that the lenders collected millions of dollars in unlawful debts, and conspired with each other and others to repeatedly violate state lending laws resulting in the collection of unlawful debts from the plaintiffs and from the class members.

Jerry: That’s a really interesting settlement, certainly an incredibly interesting class action. Another one that is beginning to get play in the press involves a government enforcement action – looks like a class action, basically functions like one – involving the State of Texas suing Meta Platforms for privacy violations. And it looks like a settlement coming in at $1.4 billion. So, given the size of some of these settlements, I agree that 2024 is shaping up to be even higher than the previous two years. So it’s very clear that we’re in a new era, a new zone in terms of the price of settlements, the expectations of plaintiffs, and the way the plaintiffs’ bar is pushing the numbers in terms of their theory – to file, certify, and then monetize these class actions.

Well, thanks so much, Jen, for your time and your expertise, and thank you to our loyal blog readers for listening in to this installment of our Class Action Weekly Wire.

Jennifer: Thanks, and thanks everyone for joining us.

The Class Action Weekly Wire – Episode 70: Sanctions Issues In Class Actions


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

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, partner at Duane Morris, and joining me today is special counsel Rebecca Bjork. Thank you so much for being on the podcast today, Rebecca.

Rebecca Bjork: Great to be here, Jen. Thank you for having me.

Jennifer: Today we have a little different topic – we are discussing significant decisions granting or denying sanctions in class action cases. Rebecca, what are some of the reasons that a court could grant sanctions in a class action?

Rebecca: Sanctions are usually issued in response to a party violating court procedures, or abusing the judicial process in some way. They are more simply thought of as penalties. In civil cases, sanctions are typically in the form of a monetary fine. But the most extreme sanction imposed in civil cases, including class actions, can be dismissal with prejudice of the filing party’s complaint or dismissal of the answer of the responding party. In either of those cases the sanctioned party would have no further recourse available, and the case would be over with judgment entered against them.

Jennifer: Given the cost of defending a class action, corporate defendants also sometimes move for sanctions if the claims are frivolous. For instance, the Sixth Circuit issued a ruling on sanctions in Garcia, et al. v. Title Check, LLC. In that case, the plaintiff filed a class action against the defendant alleging that its buyers fee violated the Michigan General Property Tax Act. In that one, the district court had dismissed the plaintiffs’ claims, finding that the fee was not prohibited by the statute, and then the defendant moved for sanctions against the plaintiffs’ attorneys on the ground that the case was frivolous and had forced the defendant to incur unnecessary legal fees. There the district court granted the motion for sanctions, and ordered the plaintiffs’ counsel to pay attorneys’ fees and costs north of $73,000. On appeal, the Sixth Circuit then affirmed the district court’s ruling in that when the plaintiffs argued that the district court erred in imposing the sanctions because the legal issues in the case were debatable, and because the district court misunderstood Michigan law.

The Sixth Circuit, however, agreed with the district court’s conclusion that the plaintiffs’ counsel had unreasonably pursued a frivolous claim based on an implausible interpretation of the statute. The Sixth Circuit found the plaintiffs should have known that their claims lacked merit. It also rejected the plaintiffs’ argument that sanctions should have been limited to the specific filings relating to the unnecessary claims. Instead, the Sixth Circuit held that the entire action was frivolous and vexatious. For these reasons it affirmed the district court’s ruling, and imposed the sanction on the plaintiffs’ counsel.

Rebecca: A really interesting case involving sanctions. Last year in a class action was AFL-CIO v. LSRI,LLC, where the court entered more serious sanctions. The plaintiffs were two AFL-CIO locals, Local 846 and Local 847, and their employee benefit plans, and the plaintiffs filed a class action alleging that the defendant failed to pay contributions for workers covered under a labor contract for a project involving SpaceX in Cape Canaveral, Florida, in violation of ERISA. Plaintiffs further asserted, and this is important for the sanctions piece of this case, that the actual amounts that plans were owed could not be determined without an audit of the defendant’s records. So the sanctions issue arose in the case after the defendant failed to appear after being served with a complaint, and the court subsequently entered a default order against it. But then the court also ordered the defendant to submit its books, ledgers, payroll records, bank statements, other financial documents reflecting the hours worked by the defendant’s employees. The defendant did not comply with this order, so the plaintiffs moved for an order holding the defendant in contempt of court. After the defendant failed to appear at the hearing on the motion for contempt, the court granted the motion finding the defendant in contempt, and further imposed a compliance fine of $200 per day, and in addition awarded the plaintiffs’ attorneys’ fees and costs. Subsequently, the plaintiffs had to file another motion – and this is surprising – they sought the arrest of the defendant’s principal as a last resort, to obtain compliance with the court’s orders. The court concluded that the monetary sanctions had not been effective in inducing the defendant to comply, and therefore determined that the arrest of the defendant’s principal was appropriate, and so, for these reasons, the court ordered the arrest of the defendant’s principal for civil contempt.

Jennifer: That’s a great example. Rebecca. Sanctions are also deemed warranted in some cases where a party is not forthright with its discovery responses. A great example of that is in In Re Keurig Green Mountain Single-Serve Coffee Antitrust Litigation, where death knell sanctions were imposed. The plaintiffs filed a class action alleging that the defendants violated antitrust laws by operating a monopoly, by using exclusive dealings and exclusionary product design. The plaintiffs filed a motion for sanctions asserting that the defendant Winn Dixie failed to respond to discovery. The court granted the motion, and ordered Winn Dixie to pay attorneys’ fees and costs. The court found that Winn Dixie repeatedly and consciously failed to comply with three court orders indicating that lesser sanctions would not be effective.

Rebecca: Right. Federal courts have wide discretion in calibrating sanctions orders. In 2023, a ruling in Lopez, et al. v. Fun Eats & Drinks, LLC demonstrated how sanctions can include civil contempt orders. Plaintiffs moved for contempt and an award of attorneys’ fees after the defendants violated multiple court orders. The court granted that motion, and had previously entered a final judgment against the defendants, and awarded the plaintiffs more than $538,000, plus attorneys’ fees. So the plaintiffs moved for additional attorneys’ fees, and the defendants failed to respond to the motion. The plaintiffs thereafter served post judgment discovery on the defendants, and they again failed to respond. Plaintiffs moved to compel discovery, and the defendants counsel responded by moving to withdraw as counsel of record due to the defendant’s failure to communicate with them regarding the post judgment, discovery. The court ended up denying the defendant’s motion, and granted the plaintiff’s motion to compel, and the defendants once again failed to respond, and the plaintiffs then resorted to filing their contempt motion. The court granted the motion, holding the defendants in contempt for the refusal to comply with the court’s orders and respond to the post judgment discovery, and also held the defendant’s attorney in civil contempt for his failure to appear at the show cause, hearing, as ordered by the court. So that in the end the court granted the plaintiff’s motion, and ordered the defendants and defendants counsel to pay for the plaintiff’s additional attorneys, fees in the amount of over $5,000.

Jennifer: Thanks, Rebecca, that is a great example as well. Were there any notable rulings that you can think of where sanctions were denied over the past year?

Rebecca: Well, actually, most times sanctions motions are denied, and that is simply because the moving party has not been able to demonstrate bad faith or willfulness by the other party. One example is Colucci, et al. v. Health First, Inc., where the plaintiffs allege anticompetitive practices in the acute healthcare market against the defendant. The court denied the motion for class certification due to lack of standing to represent the class, and the parties later stipulated to dismiss the case. So after that the defendant sought sanctions under Rule 11, arguing that the plaintiff’s counsel had no factual or legal support for asserting standing in the first place. This court denied the motion for sanctions, stating that the arguments in support of class certification were not lacking in evidentiary or legal support sufficient to justify an order granting sanctions, and the defendant also failed to demonstrate any improper purpose in prosecuting the case by the plaintiff’s attorneys.

Jennifer: Thanks, Rebecca, great insights and analysis. I know that these are only some of the cases that had interesting rulings on motions for sanctions over the past 12 months, and that we are apt to see some notable rulings over the remainder of 2024 as well. Rebecca, thanks for being here and to our audience listeners – thank you so much for tuning in.

Rebecca: Thank you, Jen.

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