Category: Class Action Weekly Wire

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and special counsel Justin Donoho and Tyler Zmick with their analysis of significant settlement agreement resolving a DOJ enforcement lawsuit against TikTok under the Children’s Online Privacy Protection Act (“COPPA”).

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple 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 the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today are my colleagues Justin and Tyler. Thanks so much for being here today on our podcast.

Justin Donoho: Glad to be here, Jerry.

Tyler Zmick: Thank you for having me, Jerry.

Jerry: Today, we’re discussing one of the most significant privacy enforcement settlements we’ve seen in years. TikTok has agreed to pay $400 million to resolve allegations that it violated the Children’s Online Privacy Protection Act, known as COPPA, by collecting personal information from children under the age of 13, without allegedly complying with federal regulations and requirements. According to the U.S. Department of Justice, this is one of the largest recoveries ever, in terms of monies collected under the COPPA. It’s also accompanied by a separate effort by the government to vacate a 2019 consent decree that had governed the predecessor of TikTok for years. Justin, let’s start with the headline. What happened here in this litigation?

Justin: Thank you, Jerry. The government announced a $400 million settlement with TikTok to resolve allegations that the company knowingly allowed children under 13 to create accounts on the platform and collected personal information from those users without obtaining parental consent as required by COPPA. The settlement reportedly requires TikTok to pay $300 million immediately, and another $100 million if, and when, a federal court vacates a consent decree that was entered against Musical.ly, TikTok’s predecessor, in 2019. The settlement resolves a lawsuit that the DOJ filed in 2024 following a referral from the Federal Trade Commission.

Jerry: So, I take it this is not a new issue that TikTok has faced on the litigation front?

Justin: No, not at all. This really represents the latest chapter in a dispute that goes back nearly a decade. The original allegations involved Musically, the video sharing platform that TikTok acquired and eventually merged into its current product. The government has consistently maintained that the children’s privacy and data collection practices were at the center of both the 2019 case and the more recent litigation.

Jerry: Tyler, if you look at the allegations at issue in this lawsuit. What exactly was the Department of Justice asserting?

Tyler: So, the government’s allegations were serious and extensive. The DOJ claimed that TikTok knowingly permitted large numbers of children under the age of 13 to create standard accounts and interact on the primary TikTok platform. According to the DOJ, TikTok collected various forms of personal data from those users without notifying their parents or obtaining their parents’ consent, as required under COPPA. The government also alleged that TikTok’s efforts to identify underage users were ineffective, and basically that the company failed to delete the children’s accounts and information when the parents requested it.

Jerry: I take it, then, that these allegations overlapped with obligations in the 2019 consent decree, and so that prior order was at issue here, too.

Tyler: That’s exactly right, Jerry, and that’s what made the later enforcement action so notable. The government claimed that despite the 2019 settlement and the compliance obligations imposed by that agreement, deficiencies remained in TikTok systems for identifying children under 13 and preventing the unlawful data collection. So, from a regulator’s perspective, allegations involving children’s data are really one of the most serious privacy issues a company can face. COPPA has been a major enforcement priority for years, and when regulators believe a company has repeatedly failed to comply with the law, penalties can become significant.

Jerry: I take it that helps explain, at least in part, how we got from a $5.7 million settlement with the consent decree in 2019 to a $400 million settlement in 2026. And the settlement certainly reflects and manifests the seriousness of the alleged conduct at issue and the government’s continued focus on children’s privacy protections. Let’s turn to another aspect, which I think is the most interesting one of the story. Justin, it seems very unusual for the government to collect $400 million, and at the same time tell a court that an existing consent decree should be removed. Why would they do that, and what was at issue there?

Justin: Thanks, Jerry. Yes, the government’s position is that the circumstances today are dramatically different from those that existed when the original consent decree was entered in 2019. In the motion filed with the court, the DOJ emphasized that the original decree addressed conduct involving Musical.ly, and predecessor entities that existed years before the current structure of TikTok’s U.S. operations. The government also points to major changes in ownership and corporate governance. According to the filing, TikTok USA’s operations are now controlled by a newly formed U.S.-based entity known as TikTok US, following a restructuring and divestiture process. The government argues that this represents a fundamentally different organization than the one that engaged in the historical conduct that led to the original settlement.

Jerry: I guess it underscores the notion that no corporation is static, change is inevitable, and the same as in the law, and here’s an argument about how something should be modified or adjusted, just seven years after the 2019 decree.

Justin: Yes, that’s exactly the DOJ’s argument. They contend that the consent decree imposes requirements that go beyond the underlying statutory requirements contained in the COPPA itself, and that continued enforcement is no longer necessary or equitable, given the changes that have occurred.

Jerry: A very seminal aspect of the agreement, however, is that the statement that TikTok remains subject to COPPA regardless of what happens to the consent decree.

Justin: Correct. The DOJ makes clear that vacating the decree would not eliminate TikTok’s obligation to comply with federal privacy laws. According to the motion, TikTok would still be fully subject to the COPPA FTC enforcement authority, and future government actions if violations occur.

Jerry: Let’s talk about the broader issues and implications here. Tyler, what should corporate counsel and compliance professionals take away from this settlement, and what do you see as the most important lesson here?

Tyler: Well, the first takeaway here is simple: privacy enforcement remains a top regulatory priority. A $400 million settlement sends a powerful message that regulators view children’s privacy as an area warranting substantial penalties when they believe that companies fail to comply with the law. The second takeaway is that compliance programs matter. The government’s court filings repeatedly highlight measures that TikTok says it implemented after the original settlement, including enhanced age verification systems, artificial intelligence tools designed to identify underage users, human moderation teams, and efforts to remove accounts that appear to belong to children under the age of 13.

Jerry: I guess, in other words, regulators are looking beyond written policies and increasingly expect organizations to implement audit, operational controls, technological safeguards, monitor systems, and have a governance framework that demonstrates actual compliance in practice. A company, for instance, can’t simply point to an employee handbook and say, “We have a policy.” Governmental regulators want evidence that compliance controls are functioning in effect and have a causative impact on behavior. What about for companies involved in mergers, acquisitions, and restructuring, which certainly seem to be the backdrop here in the difference between 2019 consent decree and the 2026 settlement?

Tyler: That is another important lesson. Businesses often assume that changing ownership structures can eliminate historical regulatory concerns. This settlement shows that regulatory obligations and scrutiny can follow a company for years. Successor entities may still need to address legacy issues, regulatory settlements, and historical compliance failures. At the same time, this settlement suggests that regulators may be willing to account for meaningful remediation efforts and significant organizational changes when evaluating future remedies.

Jerry: Before we sign off on this week’s episode, how about your final thoughts in this area?

Justin: I’ll start. Jerry, what stands out to me is that this case reflects a balance between accountability and remediation. The government obtained a substantial monetary recovery for alleged historical violations, while also recognizing that the company has undergone significant changes in ownership, management, compliance functions, and privacy practices. The settlement appears designed to achieve both of these objectives.

Tyler: From my point of view, the biggest lesson is that privacy compliance has evolved into a core enterprise risk management function. It’s no longer solely a legal issue. It’s also a governance issue. It’s a technology issue. And increasingly, it is a board-level issue. Organizations that collect consumer data, especially data involving kids, should expect regulators to closely scrutinize how they obtain consent, how they manage their personal information, how they verify user age, and how they respond to consumer requests.

Jerry: Well, thanks so much. Those are great insights from both of you. The settlement certainly is a story we’ll continue to follow, both on our blog and in the Class Action Weekly Wire, as the court considers the government’s request to vacate the 2019 consent decree and as companies continue to evaluate what this record-setting settlement means in terms of privacy compliance moving forward. So, thanks so much for being here today, both Justin and Tyler, and thanks to our listeners for tuning in.

Tyler: Thanks for having me, Jerry. Thank you, listeners.

Justin: Thanks, everybody. Thanks everyone for listening.

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and special counsel Tyler Zmick with their analysis of a dismissal of a proposed Illinois Biometric Information Privacy Act (“BIPA”) class action and its implications for corporate defendants.  

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

Episode Transcript

Jerry Maatman: Thank you, loyal listeners, for being here again for the next episode of our weekly podcast, The Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my colleague, Tyler Zmick. Thanks so much for being on the podcast, Tyler.

Tyler Zmick: Great to be here, Jerry. Thanks for having me.

Jerry: Today, we’ll be discussing an important new decision by the U.S. Court of Appeals for the Seventh Circuit that could have significant and far-reaching implications for biometric privacy litigation under the Illinois Biometric Information Privacy Act. which goes by the acronym BIPA. The case is G.T. v. Samsung Electronics America, Inc.

Tyler: This is really a fascinating decision, Jerry, just because the Seventh Circuit has addressed a question that had been percolating in ports for years now, and that question is, when does a tech company actually “possess”, “collect”, or “obtain” biometric data under BIPA?

Jerry: I think that’s kind of at the heart of most of these cases, certainly at this one, isn’t it?

Tyler: Exactly right. So, the plaintiffs in this case allege that Samsung violated BIPA through a photo gallery application that comes pre-installed on Samsung devices. According to the complaint, Samsung’s gallery app, it automatically scans photos that are stored on the device, it then identifies faces, creates facial geometry templates based on those faces, which are then used to group people into, basically, photo galleries based on who appears in the photos. And so, the plaintiffs argued that these facial templates qualify as biometric data, and that Samsung collected and stored that information without providing the disclosures or obtaining the written consent required by BIPA.

Jerry: At first glance, having defended many of these cases with you over the years, that sounds like a fairly straightforward and traditional BIPA litigation allegation.

Tyler: It does. I think the critical distinction in this case is where the biometric data was actually maintained, and who controlled it. So, the plaintiffs in this case acknowledged that the face templates were stored on users’ personal devices. They nevertheless claim that Samsung exercised control over the templates, because Samsung is the one that designed the software, licensed the operating system, and controlled how the data was processed and stored.

Jerry: I take it in this particular instance, the Seventh Circuit, however, was not persuaded by the plaintiffs.

Tyler: It was not, correct. Judge Lee, writing for the panel, focused heavily on the BIPA’s statutory language. Specifically, the court examined the words “possession”, “collect”, “capture”, and “obtain”, and concluded that each term requires some degree of control over the actual biometric data itself. The court relied on Illinois Supreme Court precedent, including in Cothron v. White Castle, providing that to collect, capture, and obtain biometric data all involves gaining control over the data. According to the Seventh Circuit, simply providing a tool that can generate biometric information is not the same thing as actually controlling that data.

Jerry: That’s a critical and important distinction. The court essentially separates the technology from the data generated from the technology.

Tyler: That’s right, and the opinion repeatedly emphasizes that distinction. The court found that Samsung may have designed the software and manufactured the devices, but the complaint did not plausibly allege that Samsung itself could access, modify, use, or control the facial geometry data stored on customers’ phones. In fact, the court said that the plaintiffs were essentially conflating two separate activities: providing a tool versus using the tool.

Jerry: My sense is that this language from the Seventh Circuit is apt to be quoted in BIPA litigation for years to come. One thing I found critically important, and certainly interesting, was the Seventh Circuit’s discussion of the concept of cloud storage.

Tyler: Absolutely. The plaintiffs argued that because Samsung had previously offered cloud backup services through a product called Samsung Cloud, that it was reasonable to infer that facial templates were also being uploaded to Samsung-controlled servers. This was sort of their backup theory. The court rejected that theory, finding that the complaint lacked factual allegations supporting that inference. The judges noted that plaintiffs could not simply speculate that biometric data reached Samsung’s servers because photographs might be backed up to the cloud. That part of the opinion is important because it reinforces federal pleading standards, and it reinforces the idea that plaintiffs need factual allegations showing that biometric data was actually controlled by a defendant.

Jerry: Let’s talk about the broader, overall significance of this ruling. What does it mean for companies that are developing software involving facial recognition, biometric authentication, or artificial intelligence?

Tyler: This is absolutely a significant defense victory. For years, many BIPA lawsuits have focused on the mere existence of biometric functionalities within tech products. Plaintiffs would often argue that if a company created software that analyzes facial geometry, let’s say, then BIPA liability automatically followed. Seventh Circuit rejected that theory in the Samsung decision and instead, the court held that there must be a plausible allegation that a defendant exercised control over the actual biometric data. If the data remains entirely on the user’s personal device, as is the case here, and the company cannot access or use the data, then the company falls beyond BIPA’s statutory reach under those facts.

Jerry: In your view, then, does this ruling create a safe harbor or a potentially important limitation on BIPA exposure?

Tyler: It does. Obviously, plaintiffs’ lawyers are going to try to, be creative in pleading their way around it, but, for device manufacturers, software developers, and tech providers, the opinion does provide a roadmap for reducing risk. Companies that design privacy-protective systems where biometric information stays local on a user’s device have stronger defenses against BIPA claims now. The Seventh Circuit, again, repeatedly stressed Samsung never possessed, accessed, modified, or used the actual biometric data, and those facts played a central role in the outcome here.

Jerry: Well, the plaintiffs’ class action bar is nothing if not innovative. Do you have a sense that this means that BIPA plaintiffs will stop bringing these sorts of cases against technology companies?

Tyler: I don’t think we should expect the cases to stop. What I expect, though, is a shift in litigation strategy. I think that plaintiffs and attorneys will focus much more heavily on whether biometric data is transmitted to company servers, shared with third parties, used for analytics, or otherwise controlled by a company. In other words, I think future cases may turn less on the mere existence of biometric technology, and more on the flow and location of biometric data.

Jerry: That’s an excellent point, and a critical distinction. Another aspect of the opinion that struck me was the Seventh Circuit’s decision of the purpose of the BIPA. The court looked back at the statute’s origins and emphasized that the BIPA was designed to regulate the collection and storage of biometric information by entities that actually possess and use that data.

Tyler: That’s correct, and the court compared Samsung’s situation to the classic BIPA cases, which involved, generally, fingerprint-based timekeeping systems, amusement park entry systems, and payment authentication platforms. In those cases, you have a company that directly gathered biometric information from individuals and maintained that information for operational purposes. According to the Seventh Circuit, Samsung’s alleged conduct was fundamentally different from those facts, because the biometric data remained at all times on the user’s device, so the Seventh Circuit concluded that extending BIPA to those facts would move really beyond statute’s core purpose.

Jerry: Well, thank you, Tyler, for joining us on this week’s episode of the Class Action Weekly Wire and lending your thought leadership and expertise to this area. To me, this decision certainly is one of the more significant ones involving the interpretation of BIPA from the Seventh Circuit in recent years and provides very valuable guidance in terms of the limits of biometric privacy liability for manufacturers and software developers. Well, thank you to our listeners for tuning in, and we’ll continue tracking the latest developments in biometric class action privacy litigation and workplace laws.

Tyler: Thanks, Jerry. Thank you, listeners. It was a pleasure to be here.

Duane Morris Takeaway: This week’s episode features Duane Morris partners Jerry Maatman and Sharon Caffrey with their analysis of a proposed $5.5 billion settlement aimed to resolve thousands of lawsuits alleging Johnson & Johnson’s talc-based products caused ovarian cancer.

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

Episode Transcript

Jerry Maatman: Thank you for being here again for the next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my partner and colleague, Sharon Caffrey. Thanks so much for being on the podcast today.

Sharon Caffrey: Thank you, Jerry, it’s great to be here.

Jerry: Today, we’ll be discussing Johnson & Johnson’s recent announcement that it has agreed to pay approximately $5.5 billion to settle thousands of lawsuits alleging that its products containing talcum powder caused ovarian cancer. Sharon, I know this story has been unfolding for quite a while. What exactly happened here?

Sharon: Yeah, this is certainly one of the most significant settlements we’ve seen in the mass tort arena. Johnson & Johnson announced that it has reached a proposed agreement to resolve the claims against it brought by roughly 70,000 plaintiffs in federal talc multi-district litigation, which is pending in New Jersey, along with some related state court proceedings. Under the agreement, the company has agreed to commit at least $5.5 billion to compensate claimants. Importantly, though, the settlement is conditioned on participation by at least 95% of those plaintiffs. So, while it’s a major breakthrough, there are still some procedural hurdles before the settlement becomes final.

Jerry: One aspect of the settlement that stood out to me is that Johnson & Johnson maintains that its talc products are safe and do not cause cancer. So, this isn’t a situation where a company is admitting any liability.

Sharon: That’s exactly correct. Throughout the litigation, Johnson & Johnson has been consistent in arguing that its talc products do not contain asbestos and do not cause ovarian cancer. The company’s been unwavering on that position and in announcing the settlement, Johnson & Johnson characterized the agreement as a practical business decision rather than a concession on the merits. The company emphasized that it remains confident in the science supporting its products and believes it would have continued to prevail if these cases continued to move forward.

Jerry: That confidence also seems to be reinforced by some recent developments in the litigation itself.

Sharon: That’s correct, and in fact, the timing of the settlement is especially interesting, because it comes on the heels of a significant ruling in the multi-district litigation. Just last week, the federal court overseeing the MDL ordered the plaintiffs to demonstrate that they could produce admissible expert testimony linking talc to ovarian cancer. Without that evidence, the plaintiffs faced the possibility that their remaining claims would be dismissed. And that ruling followed the withdrawal of two key causation experts for the plaintiffs in Bellwether cases. Johnson & Johnson argued that those developments highlighted the fundamental problems for plaintiffs, proving that talc exposure caused a specific individual’s ovarian cancer.

Jerry: Certainly, when you talk about settlement of major litigation leverages everything, and it seems to me that the legal landscape might have been shifting in favor of Johnson & Johnson and against the plaintiffs here.

Sharon: Yeah, based on the specific causation issues that the plaintiffs were facing, that is accurate. Company representatives were pointing to those expert challenges at this time once the courts engaged in some more scrutiny of those experts. They essentially argued that plaintiffs were increasingly facing an uphill battle to establish specific causation, which is one of the most difficult things in product liability litigation.

Jerry: Well, $5.5 billion is what it is, and so the plaintiffs also claim victory here.

Sharon: Oh, of course they did. Plaintiffs’ leadership described the settlement as a landmark achievement and characterized it as long-delayed justice for women and families who have been waiting years for compensation. One of the more compelling points made by plaintiffs’ counsel was that the litigation is stretched on for more than a decade. During that time, many claimants have faced serious health issues, and some, unfortunately, have passed away before seeing a resolution of their claims. From that perspective, plaintiffs view this settlement as delivering certainty and compensation after years of legal battles.

Jerry: In terms of mass tort resolutions and class action litigation, an interesting feature, if not an unusual feature, that stood out to me was the fact that the settlement is uncapped. Could you explain to our listeners and viewers what that means?

Sharon: Sure. Usually, when there is a settlement of a mass tort, there is a fund, a specific fund, that is created for eligible claimants. And, it’s a fixed amount that must be divided amongst those claimants, so claimants step forward and their cases are weighed, usually on a tiered system. In this instance, plaintiffs’ counsel is very bullish on the fact that Johnson & Johnson is not capping this at $5.5 billion. It will depend on the levels of participation and the qualifying claims. In addition, the settlement applies only to current plaintiffs and does not resolve claims that may potentially arise in the future.

Jerry: Well, maybe the price of a settlement is making everybody equally unhappy or happy, but if you look at the recent trial results, it’s easy to see why both sides of the V in this case concluded that settlement was preferable to continued litigation.

Sharon: Right, the most recent case was tried in June, and that was in Los Angeles, and there was verdict was rendered in favor of Johnson & Johnson after a six-week trial of an ovarian cancer bellwether case. And then earlier this year, an Oklahoma jury also sided with the company in a mesothelioma case involving alleged asbestos-containing talc products. At the same time, the plaintiffs have secured notable victories as well, including a $65.5 million verdict that was recently upheld in a case involving a woman who alleged that Johnson & Johnson’s talc products caused her exposure to asbestos and contributed to her cancer. And also another prior Los Angeles plaintiff obtained a $40 million verdict in a bellwether trial. So, the mixed outcomes really create uncertainty for both sides, and trials are expensive, appeals take very long time, sometimes years, and neither party can fully predict how the juries are going to respond, particularly with the complex science.

Jerry: Sharon, from a broader perspective, what do you think this settlement tells us about, the mass tort space going forward into the later half of 2026?

Sharon: Well, there should be a whole lot less tort cases, but, first, I think mostly expert testimony remains the centerpiece for modern mass tort litigation. Regardless of the size of the case, the ability to establish reliable scientific causation often determine whether claims survive Daubert or Frye challenges. And second, the settlement pressure increases dramatically when courts begin to scrutinize expert evidence. The MDL court’s recent rulings appear to have created a pivotal inflection point in these proceedings, particularly for the plaintiffs who faced not having specific causation experts. And then, finally, after years of litigation and multiple trial victories for both sides, global resolution is probably the most attractive option because of the uncertainty in what the outcomes would be.

Jerry: Final question for you, do you think this is the end of the talc litigation story?

Sharon: It’s the end of a major chapter of the talc litigation story. Settlement still requires substantial participation by all the plaintiffs and there may be implementation issues as the claims proceed. Also, remember that this is only for the existing claimants, and there could be future claimants. And then I think If the participation threshold is met, this is going to be one of the most consequential resolutions in mass tort history and could bring some closure to a significant portion of the ovarian talc litigation involving cosmetic talc.

Jerry: Sharon, thanks so much for joining us on this week’s edition of the Class Action Weekly Wire. This has been a great discussion, and thank you for your detailed analysis, kind of inside baseball look at the settlement. Thanks to our listeners. We’re glad you were here to tune in to another edition of our weekly podcast series.

Sharon: Thank you, Jerry, for inviting me to speak on this topic.

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jennifer Riley and associate Elizabeth Underwood with their analysis of a ruling from the Eighth Circuit affirming a district court’s judgment in favor of an employer following a jury verdict rejecting a hostile work environment claim brought by the EEOC and an intervenor employee.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple 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 my colleague, Elizabeth Underwood. Thank you so much for being on the podcast today, Elizabeth.

Elizabeth Underwood: Great to be here, Jen. Thanks for having me.

Jennifer: Today, we’re discussing a significant new decision from the Eighth Circuit involving employer liability for workplace harassment. So, this is an important decision for employers. It reinforces what courts expect of employers when responding to harassment complaints. And just as importantly, it also talks about what an employer must know about a situation before liability can attach. So, let’s start with the basics. Elizabeth, can you tell our listeners what happened in this case?

Elizabeth: Sure. The case is EEOC v. Sun Chemical Corporation, decided by the Eighth Circuit on August 4, 2026. The EEOC and an employee, Bryan Banks, brought a Title VII hostile work environment claim after a coworker directed the N-word at Banks multiple times during a workplace confrontation. Banks immediately reported the incident. Sun Chemical investigated, suspended the coworker for five days without pay, warned that any future misconduct could result in termination, and also issued Banks a written warning for profanity use during the confrontation. The EEOC later sued, arguing that Sun Chemical’s response and its efforts to prevent the harassment in the first place were insufficient. After a jury trial, however, the jury found in favor of the employer, and the EEOC appealed.

Jennifer: And I understand the appeal wasn’t really about whether the incident happened or whether it didn’t happen. Instead, the appeal really focused on the legal instructions given to the jury, right?

Elizabeth: Exactly. The EEOC argued that the jury instructions were too narrow. Specifically, it claimed the instructions focused only on whether Sun Chemical responded appropriately after learning about the harassment, rather than whether the company should have prevented the harassment from occurring. The instructions required the plaintiffs to prove that Sun Chemical knew or should have known about the harassing conduct and failed to take prompt and appropriate corrective action. The EEOC argued that there was another theory of liability, that the employer had failed to prevent the harassment before it happened.

Jennifer: How did the Eighth Circuit respond to those arguments?

Elizabeth: Interestingly, the Eighth Circuit didn’t decide whether the jury instructions were perfect. Instead, it assumed, for the sake of argument, that the EEOC’s theory could apply, and then held that there simply wasn’t enough evidence to support it. The court explained that even under the EEOC’s theory, an employer must have actual or constructive knowledge of ongoing harassment and fail to take remedial action reasonably calculated to stop it. In other words, employers can’t prevent misconduct that they have no reason to anticipate.

Jennifer: That does seem to be the key takeaway. So, what evidence did the EEOC rely on to argue that Sun Chemical should have known?

Elizabeth: The EEOC pointed to one prior incident in which the same employee had allegedly used the N-word toward another Black employee. But the court said that single prior incident was not enough to put the company on notice that the employee was a serial harasser, or that ongoing racial harassment was occurring. The court distinguished situations where employers received repeated complaints or observe a pattern of misconduct. Here, there simply wasn’t enough evidence that management knew, or reasonably should have known, that additional harassment was likely.

Jennifer: The Eighth Circuit also spent some time discussing the employer’s disciplinary response, if I recall, correct?

Elizabeth: It did. The EEOC argued that the company should have taken stronger action after the earlier incident. The Eighth Circuit acknowledged that Sun Chemical’s response could have been stronger but emphasized that Title VII doesn’t require employers to terminate an employee after a first offense in order to demonstrate an adequate remedial response. The court noted that the employee had more than 30 years of service without a prior history of harassment, and that the company documented its discipline and warned that future misconduct could lead to termination. So, the court looked at the totality of the circumstances, rather than applying a one-size-fits-all approach.

Jennifer: There was also an argument about alleged unreported uses of a similar slur in workplace conversations if I recall. How did the court handle that?

Elizabeth: So, the Eighth Circuit rejected that argument, because there wasn’t enough evidence that those alleged comments had ever been reported to management, without reports or facts suggesting management reasonably should have known; the court found there wasn’t enough to establish constructive knowledge. That’s an important point, because constructive knowledge isn’t based on speculation. There has to be enough information that a reasonable employer would recognize a probability that harassment is occurring.

Jennifer: What a great decision. So, let’s talk about what employers should take away from the ruling.

Elizabeth: Well, there are several practical lessons. First, employers should continue to maintain clear anti-harassment policies and multiple reporting avenues. Those reporting mechanisms are critical because an employer generally cannot address contracts it doesn’t know about.

Second, every complaint should be investigated promptly and documented carefully. Courts continue to examine not only whether employers responded, but whether the response was reasonably calculated to stop future misconduct.

Third, progressive discipline remains important. While immediate termination may be appropriate in some situations, this decision reinforces that Title VII does not automatically require firing an employee after a first incident. Courts will consider the severity of the conduct, the employee’s disciplinary history, prior complaints, and the employer’s overall response.

Fourth and finally, documentation matters. Employers should carefully document complaints, investigations, disciplinary decisions, and the reasons supporting those decisions. That record often becomes critical years later during litigation.

Jennifer: Thanks so much, Elizabeth, for that great overview. I feel like this decision is really an important reminder that Title VII requires employers to take workplace harassment seriously, but it also, at the same time, recognizes the practical limitations on employer liability. The Eighth Circuit made clear here that employers are expected to respond promptly and effectively to known harassment, but they’re also not liable for failing to prevent misconduct that they really had no actual or constructive reason to anticipate. For employers, I think that means the best defense continues to be strong policies, effective reporting procedures, prompt investigations, appropriate corrective action, and thorough documentation.

Elizabeth, again, thank you so much for walking us through this important decision, and thank you to our listeners. We are glad you tuned in to another edition of the Class Action Weekly Wire.

Elizabeth: Thanks, Jen, and thank you, listeners. It was a pleasure to be here.

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and senior associate Hayley Ryan with their analysis of the $1.5 billion settlement set to resolve a class action brought by authors alleging artificial intelligence developer Anthropic pirated their work to train its large language model.

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

Episode Transcript

Jerry Maatman: Thank you, loyal listeners, for being here again for the next episode of our weekly podcast series entitled The Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my colleague, Hayley Ryan. Thanks so much for being here on the podcast today.

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

Jerry: Today, we’re discussing one of the most significant class action settlements ever, a copyright class action settlement that was recently approved for $1.5 billion between Anthropic and a class of authors and copyright holders whose books were allegedly downloaded from online piracy libraries and used in connection with AI training. The court, in its settlement approval order, called it the largest copyright class action settlement in the history of American jurisprudence. Hayley, let’s start with the basics. What was the case about?

Hayley: Yeah, Jerry, so the case was brought by authors and copyright holders against Anthropic. Plaintiffs allege that Anthropic downloaded hundreds of thousands of copyrighted books from the online repositories Library Genesis, or LibGen, and Pirate Library Mirror, often referred to as PiLiMi. The settlement class included copyright owners of books appearing on a specific works list, containing approximately 482,000 works that Anthropic had downloaded from those sources.

Jerry: As I understand it, in the history of the case, the judge, a federal district court judge in the Northern District of California, granted final settlement approval on July 20, 2026.

Hayley: That’s right, Jerry. The court concluded that the settlement satisfied Rule 23’s requirements and was fair, reasonable, and adequate. The court viewed the settlement as providing substantial value to the class. According to the court’s order, the average recovery is expected to be approximately $3,000 per word. The court stated that this amount is roughly four times the statutory minimum damages available for ordinary copyright infringement, and about 15 times the minimum for innocent infringement.

Jerry: As is inevitable in large class action settlements, I understand that some objectors lodged objections to the settlement, claiming that the settlement amount should have been larger, is that right?

Hayley: Yes, they sure did, Jerry. Several objectors pointed out that copyright law allows statutory damages of up to $150,000 per work in certain circumstances. The court concluded that continued litigation carried substantial risks, including the possibility of losing at trial, appellate reversals, delays, and constitutional challenges to a massive statutory damages award.

Jerry: One thing that stood out to me was the participation rate among class action members. I’ve seen settlements where the participation rate is under 3%. What did their data analytics look like in this particular settlement?

Hayley: Yes, Jerry, so here, the participation rate was extraordinarily high. By April of 2026, claims have been submitted for more than 91% of the works on the works list. The court noted that this level of participation was far above what is typically seen in class actions. The settlement administrator received only 350 timely opt-outs, covering just 1,802 works, despite notice reaching hundreds of thousands of potential class numbers. The court also noted that only 54 objectors or comments were filed, and several class members affirmatively supported the settlement.

Jerry: Notice program in a class action settlement is always important, but let’s talk about it in the context of this case, where there were an enormous amount of authors and copyright holders.

Hayley: Yes, Jerry, so the notice program was extensive. The settlement administrator gathered contact information from publishers, authors organizations, copyright records, ISBN databases, commercial sources, and internet searches. Notice was sent to nearly 595,000 potential class members, and the court found that notice reached owners associated with more than 99.5% of the works on the works list. The campaign also included industry publications, newspapers, press coverage, newsletters, as well as social media outreach.

Jerry: The scope of a release in a class action settlement review process is always important. How did it play out in this particular case?

Hayley: Absolutely. So, the settlement only releases claims related to works appearing on the specific works list, and only for certain past conduct. The judge emphasized that class members are not releasing claims concerning future conduct. They’re also not releasing claims based on AI outputs. So, the settlement focused primarily on alleged downloading and copying of works that occurred before August 25, 2025.

Jerry: Class action settlements of this ilk also often involve injunctive, programmatic, or non-monetary relief. How did that play out in the settlement approval process?

Hayley: Yes, Jerry, so Anthropic agreed to destroy the pirated copies of class members’ works that had been downloaded from LibGen and PiLiMi, subject to preservation obligations and other legal requirements. The court viewed that destruction obligation as a significant benefit to the class.

Jerry: And then, inevitably, in all class action settlements, a portion of the amount of the settlement is devoted to attorneys’ fees. I found this opinion on settlement approval particularly interesting insofar as attorneys’ fees approval issues was concerned.

Hayley: Yes, it really is, Jerry. Class counsel initially sought 20% of the settlement fund, which would have been $300 million. They later reduced that request to 12.5%, or $187.5 million. Even after that reduction, the court found the request too high.

Jerry: That’s certainly a significant amount of money to be paid to law firms for prosecuting a class action. Is this because, was the court’s opinion because this is the type of settlement that would fall into the category of what’s called a megafund class action settlement?

Hayley: Exactly, Jerry. The judge concluded that applying a percentage of the fund approach would generate a windfall for class counsel. So, instead, the court used the lodestar method. Class counsel reported approximately $27 million in lodestar fees, and the court applied a multiplier of 3.75. So, that resulted in a fee award of just over $101.5 million, which equates to roughly 6.8% of the settlement fund.

Jerry: Well, an enormous fee, one of the largest of 2026 thus far in any class action settlement, but certainly significantly less than what plaintiffs’ counsel had requested. The named plaintiffs, I assume, also requested service awards?

Hayley: Yes, they did. So, the class representatives asked for $50,000 each. The court found that amount to be excessive, although the representatives devoted substantial time and effort to the litigation, the judge concluded there was no showing of retaliation risk comparable to some employment class actions. So, the court instead awarded $15,000 to each of the three class representatives.

Jerry: Bottom line, Hayley, what are your biggest takeaways for corporate counsel from this decision?

Hayley: So, Jerry, courts remain willing to approve extraordinarily large settlements involving AI-related copyright claims when the settlement provides meaningful and immediate value to the class. However, the fee ruling reinforces that courts will scrutinize attorney’s fees in megafund settlements and may depart significantly from the traditional 25% benchmark.

Jerry: In following, class actions that are filed and settled, I think there’s one more takeaway, maybe, and that’s that this settlement resolves historic claims never before brought involving a defined set of books, but it leaves the door open and invites future litigation involving AI outputs and future conduct in privacy situations. So, it probably won’t be the last major case we see in this particular space.

Well, Hayley, thank you so much for this great discussion and your thought leadership in this area. Thanks for the detailed analysis of this important settlement, and thanks for being here today. Along with our listeners, thank you for joining us for this latest installment of the Class Action Weekly Wire.

Hayley: Thanks, Jerry, and thank you, listeners, it was a pleasure to be here.

Duane Morris Takeaway: This week’s episode features Duane Morris partners Jerry Maatman and Jennifer Riley with their analysis of class certification data in the first six months of 2026 and their prognostications for trends shaping the remainder of the year.

Read our full mid-year settlement review here and class certification data here.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple 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 a special mid-year review of class certification numbers is Jen Riley. Jen, welcome back to the show.

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

Jerry: Well, here we are, halfway through 2026. Let’s start with the big picture. Courts ruled on more than 155 class certification motions in just the first half of the year, and plaintiffs were successful in 63% of those situations. That’s quite a difference from the year before, isn’t it?

Jennifer: It is. Last year, the success rate was 68%, so we’re seeing a notable downtick. An even bigger change that we saw in 2024, 2023, and 2022, when certification success rates hit 69%, 72%, and 74%, respectively. So, the trajectory so far this year suggests that plaintiffs might not be as successful as they have been in the past.

Jerry: Seems to me what’s interesting, behind the numbers is the downturn isn’t across the board, it really depends on the subject matter area at issue in the class action.

Jennifer: Exactly. So, certification rates are all over the place. FCRA, TCPA, RICO, and WARN class certification decisions have all been small in number, with only one or two rulings in each of those areas, but all of them have been granted. So, 80% of class certification motions and securities fraud cases have been granted. Then on the flip side, less than half of certification motions and privacy were granted, and the one ruling on a class certification and products liability was denied.

Jerry: That really does run the gamut, and its very statute-oriented or subject matter oriented. Let’s talk about wage and hour or Fair Labor Standards Act conditional certification. Does that continue to be the most active area litigation in this space?

Jennifer: It does. From January through June, courts issued 69 rulings in FLSA matters. 67 of those were first stage motions for conditional certification, and plaintiffs won 39. So, that’s a success rate of only 58%, which is way down from the 76% in 2025 and the 79% we saw in 2024.

Jerry: When I look at those numbers and look at the locations, it’s striking how those rulings are congregated in certain geographic areas. A large chunk came from the Second and Ninth Circuits – places like New York City and San Francisco and Los Angeles, which tend to be more favorable to the plaintiffs’ bar.

Jennifer: That’s absolutely right. And at the decertification stage, the usual trend where defendants succeed more often hasn’t really been playing out this year. We’ve seen only two decertification rulings so far, and plaintiffs won one of those. So, it’s 50-50 so far this year.

Jerry: One of the key takeaways for me from this mid-year data analytics analysis is how much locations impact where cases get filed. We’re seeing very few rulings, for instance, from the Fifth, Sixth, and Seventh Circuits: only five in total. Any thoughts on why this is going on?

Jennifer: Great question. So, I think it’s likely a strategic move by the plaintiffs. Those circuits have adopted stricter standards for conditional certification, really making them less appealing venues. So, plaintiffs may be shifting, shifting their filings toward more lenient circuits to give them a better chance of success.

Jerry: If more circuits would follow the lead of the Fifth, Sixth, and Seventh Circuits, and start abandoning the traditional two-step certification process established in the Lusardi case out of New Jersey in 1987, that could have a big impact on where cases are brought and how they’re treated by the courts.

Jennifer: Absolutely. The mid-year numbers show us that venue selection, subject matter, and timing are all very critical in class action strategy. And with the FLSA continuing to dominate, we’ll be watching closely to see how courts respond in the second half of the year.

Jerry: Well, we’ll have the final data and full analysis in the Duane Morris Class Action Review for 2027 coming out in the first week of January of next year, so stay tuned. We’ll be back with more insights then. Jen, thanks as always for being here and for giving us your analysis of these trends on class certification.

Jennifer: Thank you, Jerry, and thanks to our listeners for tuning in.

Duane Morris Takeaway: This week’s episode features Duane Morris partners Jerry Maatman and Jennifer Riley with their analysis of class action settlement data in the first six months of 2026 and their prognostications for trends shaping the remainder of the year.

Read the full mid-year settlement review in our previous blog post.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple 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 the special mid-year review of class action settlements is Jen Riley. Jen, welcome back. Here we are halfway through 2026. What’s the big picture look like in the class action settlement space?

Jennifer Riley: Thanks, Jerry. Well, it’s been quite a ride. The data confirms essentially what we’ve been tracking since 2022. We are in a new era for class action litigation. Corporate defendants have been facing unprecedented settlement exposures. The total value of class action in government enforcement settlements hit $79 billion in 2025 that follows $66 billion in 2022, $51.4 billion in 2023, and $42 billion in 2024. As of mid-2026, we have already reached over $53 billion.

Jerry: That’s an enormous number. So, what we’re talking about is over $200 billion in just the last few years.

Jennifer: That’s exactly right. It is the largest multi-year span of settlements in U.S. legal history, and if current trends hold up, 2027 may end up ahead of the prior four years.

Jerry: Where are we seeing the biggest dollar amounts generated in these class action settlements?

Jennifer: Well, antitrust has historically had high settlements, and it is leading the charge this year with over $34 billion in settlements. Products liability and mass torts also have had big settlements this year, and has been no different in that area either, with almost $9 billion so far. Securities fraud settlements are also on track with last year’s numbers, and they’ve reached almost $2 billion so far.

Jerry: I know you track this space on a daily basis, 24-7. Any standout billion-dollar settlement cases come to mind?

Jennifer: So, there have been a few major ones. I would say the In Re College Athlete NIL Litigation is a big one. That one hit $2.78 billion alone. It finally gave athletes retroactive compensation for missed name, image, and likeness opportunities. So, that’s a historic shift in the landscape there. Also, worth noting that 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 broad sign-on by all U.S. states and territories.

Jerry: These seem to be landmark figures. Are we seeing any high numbers of billion-dollar cases in and of themselves?

Jennifer: We are. So, there have been three billion-dollar settlements so far in 2026. That brings us to 45 total settlements over a billion dollars since 2022. That is the most in any four-and-a-half-year period ever.

Jerry: By your examination and analysis, are there any particular industries or sectors that are showing either surprising or emerging exposures in this area?

Jennifer: Great question. Data breach and privacy settlements have become increasingly prominent. Apple agreed to a $250 million settlement in a class action to resolve claims alleging that it misled millions of iPhone buyers by falsely touting AI capabilities for its Siri Voice Assistant 2024. Also, government enforcement settlements are on the rise. One of the billion-dollar settlements so far this year is an agreement with the New Jersey Department of Environmental Protection and EI DuPont to resolve the state’s claims over contamination caused by the manufacture and discharge of forever chemicals.

Jerry: Let’s talk antitrust. You referred to that before. What’s the headline here?

Jennifer: So, the antitrust sector is very active, with notable cases against the NCAA, as I mentioned earlier, as well as Visa, MasterCard, and RealPage. There is a sustained focus on wage suppression and market manipulation. Those have been key areas of concern for regulators, as well as for plaintiffs.

Jerry: Are you seeing the same sort of similar energy from the Planum sparred compared to past years?

Jennifer: Absolutely. In fact, the size and pace of these settlements suggests that plaintiffs’ attorneys are pushing harder than ever, likely encouraged by that sheer size of recent wins.

Jerry: When you look at the trends and the data analytics, do you see any areas that are cooling off in 2026?

Jennifer: Great question. So, civil rights settlements have been fairly low this year. We’re also seeing some slowdown in TCPA-related cases, although final settlement approval for $28 million was granted in a case against SiriusXM Radio to resolve claims alleging that it made telephone calls to people on the Do Not Call Registry, or Sirius’ internal Do Not Call Registry. But overall, most sectors are either holding steady or are growing.

Jerry: Any closing thoughts to what should be uppermost on the mind of corporate counsel in this area?

Jennifer: Yeah, so I would say the bottom line is that corporate defendants are operating in a legal environment where large-scale class actions, whether driven by consumers, employees, investors, or regulars, are pretty much a constant and a very costly risk. We’re in a high-stakes phase of class action litigation, and there’s really no indication that it’s slowing down or going to slow down in the foreseeable future.

Jerry: Well, Jen, thanks as always for your insights, and thanks to our listeners for tuning in. We will be sure to keep you updated with new developments on these settlement numbers. It sounds like for the upcoming Duane Morris Class Action Review – 2027 edition, is going to be a must-read.

Jennifer: I think it definitely will be. Thanks, Jerry, and thank you to our listeners.

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and associates Christian Palacios and Andrew Quay with their discussion of key ruling issued by the Ninth Circuit reversing a California federal judge’s order denying a motion to compel arbitration.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple 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 the next episode of the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today are my colleagues, Christian and Andrew. Thank you both for being on our podcast.

Christian Palacios: Glad to be here, Jerry.

Andrew Quay: Thanks for having me, Jerry.

Jerry: Today, we’ll be discussing a very significant ruling by the Ninth Circuit that California employers, and really any employer using arbitration agreements, should be paying attention to. It’s the case of Cocom v. ABM Aviation. Christian, let’s start with the basics. What happened in this case?

Christian: So, this case involved a former airport janitor who filed a California wage and hour class action against his employer, ABM Aviation. Like many employers, ABM required employees to sign an arbitration agreement at the beginning of their employment. When the lawsuit was filed, ABM moved to compel arbitration. The district court denied the motion, finding the arbitration agreement procedurally and substantively unconscionable under California law, relying heavily on a 2024 California Court of Appeals decision called Cook v. University of Southern California. ABM appealed, and the Ninth Circuit reversed.

Jerry: So, this wasn’t about whether the arbitration agreement itself is enforceable under the Federal Arbitration Act. The question here was whether this particular agreement was so unfair under California law, that it couldn’t be enforced. Andrew, why did the district court think the agreement was unconscionable and therefore unenforceable?

Andrew: That’s right, Jerry. The district court focused on several provisions. First, it believed the agreement covered essentially every conceivable dispute between the employee and the company, and not just employment claims. Second, because it interpreted the agreement that broadly, it concluded the agreement lasted indefinitely. Third, it thought the agreement unfairly favored the employer because numerous affiliated entities and employees could invoke arbitration against the employee, while the employee supposedly had fewer reciprocal rights. Finally, the court concluded the agreement improperly waived certain forms of public injunctive relief; and looking at all those provisions together, the district court found the agreement was permeated with illegality and declined to even sever the problematic parts of it.

Jerry: Christian, the Ninth Circuit saw things differently. What was the outcome there?

Christian: It really did see things differently. The central issue was one of contract interpretation. The district court essentially read the phrase, including but not limited to, as making the arbitration agreement unlimited in scope. The Ninth Circuit disagreed, saying that’s not how California contract interpretation works. Instead, the Ninth Circuit applied the doctrine of Ejusdem generis, a long-standing principle that says when general language is followed by a list of specific examples, the general language is interpreted in light of those examples. Here, every specific example in the arbitration agreement involved employment-related disputes, wage claims, discrimination, retaliation, wrongful termination, labor code claims, and similar employment issues. Because of that, the court held the agreement should be interpreted as covering employment disputes, not unrelated personal disputes years after the employment ended.

Jerry: Andrew, that sure seems like a pretty important distinction from Cook. Could you explain that for our listeners?

Andrew: Probably the biggest takeaway here. So, in Cook, the arbitration agreement expressly stated that covered claims, “whether or not arising out of employment.” It also specifically listed non-employment tort claims. So, the California Court of Appeals imagines scenarios like a former employee needing to arbitrate a medical malpractice claim at a university hospital or a defamation claim years after employment ended. The Ninth Circuit said that’s simply not what ABM’s agreement did. ABM’s agreement focused exclusively on employment-related claims, and that distinction changed almost every aspect of the unconscionability analysis.

Jerry: It also addressed durational issues, too, didn’t it?

Christian: That’s right. Once the court concluded the agreement only applied to employment-related claims, the duration issue largely disappeared. Employment claims naturally stop accruing when employment ends, and applicable statutes of limitations eventually cut off any remaining claims. So, unlike the agreement in Cook, this agreement wasn’t truly perpetual.

Jerry: What about the concept of mutuality? That’s a concept employers hear about frequently in this space.

Andrew: Mutuality basically asks whether both sides are giving up similar rights. The employee argued that affiliates, officers, directors, employees, vendors, and clients could enforce the arbitration agreement against him, but he couldn’t as easily enforce it against them. Again, the Ninth Circuit said context matters here. Because the agreement only covered employment-related disputes, any claim involving those third parties would still have to arise out of the employment relationship. The Ninth Circuit explained that this is very different from forcing employees to arbitrate completely unrelated personal disputes with company affiliates years later.

Jerry: The Ninth Curcuit opinion also discusses PAGA waivers and the concept of public injunctive relief. What did the court do there?

Christian: Interestingly, the Ninth Circuit didn’t actually decide whether those provisions were enforceable. Instead, it assumed that even if those provisions were invalid under California law, they could simply be severed because of the agreement’s severability clause. That represents a fairly employer-friendly approach because courts sometimes refuse to enforce arbitration agreements if they believe illegal provisions infect the entire contract. Here, the Ninth Circuit concluded that wasn’t the case.

Jerry: Let’s turn to the practical side of this Ninth Circuit decision. If you’re advising employers in the wake of Cocom, what lessons should they take away from this ruling?

Andrew: The biggest lesson here is careful drafting. Employers should avoid language suggesting that arbitration extends to every conceivable dispute between the parties. The safest approach is to expressly limit covered claims to those arising out of employment or the employment relationship. That helps avoid the problems that doomed the agreements in Cook and similar California cases.

Christian: I’d add that employers should also revisit older arbitration agreements. Many agreements drafted years ago contain broad, any and all claims language that may have seemed harmless at the time but now creates litigation risk under California’s unconscionability doctrine. It’s worth reviewing those agreements to make sure the scope is appropriately limited and definitely include a well-written severability clause.

Jerry: Well, great insights from both of you, Andrew and Christian. The ABM decision by the Ninth Circuit is a great reminder to companies to review their arbitration agreements to ensure that they’re clearly limited to employment-related disputes and to update agreements to reflect evolving notions of California law, rather than relying upon forms drafted years ago. So, thanks so much for being here today with us, Christian and Andrew, and thank you to our listeners for tuning in.

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

Christian: Thanks, everyone, for listening.