Category: Class Action Weekly Wire

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.

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.

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.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Sarah Gilbert with their discussion of key developments in litigation and legislation related to the California Private Attorneys General Act.

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

Episode Transcript

Jerry Maatman: Thanks, loyal blog listeners and readers for joining us on this week’s installment of the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and I’m joined by my colleague, Sarah Gilbert, of our San Diego office. Welcome, Sarah.

Sarah Gilbert: Great to be here, Jerry. Thank you.

Jerry: Today we wanted to discuss trends and important developments in state court class action, litigation. Since the decision of where to file a class action is always a strategic imperative for the plaintiff’s bar, and then, whether or not to remove it from state court to federal court. For defense counsel, class action litigation is very much like buying real estate – location, location is everything, Sarah, what are some of the considerations that you’re often speaking to your clients about in terms of state court versus federal court class action litigation.

Sarah: So, although almost all state law procedural requirements for class certification mirror Rule 23 of the federal rules. The plaintiffs’ bar often perceives state courts as having more positive predisposition towards their clients’ interests, particularly where putative class members have connections to the state and the events at issue occurred in the state where the action is filed. Beyond forum shopping between state and federal court, the plaintiffs’ bar also seeks out individual states that are believed to be more plaintiff-friendly, such as California, Georgia, Florida, Illinois, Louisiana, Massachusetts – among others – and these are actually among the leading states where plaintiffs’ lawyers file a volume of class actions. These courts are thought to have more relaxed procedural rules related to discovery, consolidation, and class certification; a lower bar for evidentiary standards; and higher than average jury awards – among other considerations – all of which incentivize forum shopping related to state class actions.

Jerry: I’ve been a lawyer 42 years, and I think at last, count, I’ve been in 48 different states defending class action litigation. And I’d have to say that although state statutory rules and regimes are based loosely on Federal Rule 23, every state approaches class action litigation a little differently, and there are nuances to the law. What do you think is important, for example, for companies operating in California to know about the nuances of California class action litigation?

Sarah: Absolutely. So, it is very important for companies in California to pay attention to California’s controversial Private Attorneys General Act – we call it the PAGA. The PAGA authorizes workers to file lawsuits, to recover civil penalties on behalf of themselves, other employees and the State of California, for state labor code violations. As of now, California is the only state to have enacted this type of law so far. However, several other states are considering their own similar private attorneys general laws, including New York, Washington, Oregon, New Jersey, and Connecticut. So it will be crucial to monitor state legislation on this topic given the impact such laws will have on class litigation strategy moving forward.

Jerry: Well, I know this has been an especially interesting year for PAGA related developments, especially following the reform legislation signed by Governor Newsom in June. And, as I understand it, after June of 2024, there’ll be a new regime in terms of how PAGA damages, PAGA procedures will take place. And although not to be applied retroactively and only into the future, it’s going to be a brand-new playing field in California. I know you’ve been working very hard on strategies for clients to deal with these changes, what would be some of the high-level points or takeaways that you think are important for clients?

Sarah: Sure. So I mean, as is clear and as you referenced, the PAGA reforms and activity are hotly contested, hotly debated in California. California is the epicenter of class actions filed in state court. It has more class action litigation than any other state. While all varieties of class-wide cases are filed in California, a high majority of those are consumer fraud and employment-related. And something I know, with all of our clients in California facing such claims, is that even where an employer’s written formal policies appear facially neutral and compliant – which is very often the case – employees may successfully seek class certification for demonstrating common issues where an employer’s practices and protocols allegedly violate the law, even if those policies, as written, appear to be compliant.

Jerry: Thanks, Sarah. You know, I think it’s very interesting – most companies think that the California Supreme Court exists to find in favor of plaintiffs. Yet in the last month it issued the Lyft decision, which has a direct ‘apples and oranges’ practical effect on PAGA litigation. As I read the opinion, it says, where an employer is facing multiple PAGA actions and settles one of them, the litigants in the other pending PAGA actions cannot parachute in, intervene and challenge the other settlement. So it makes it easier for a company to deal with PAGA litigation and to settle litigation. What are some of your thoughts on the takeaways from the California Supreme Court decision in Lyft?

Sarah: Yeah, absolutely. This was a seminal ruling came out on August 1st of this year. To give some background, in rapid succession between May to July 2018, three plaintiffs, all Lyft drivers, Olson, Seifu, and Turrieta filed separate PAGA actions alleging improper classification as independent contractors. So in 2019, Turrieta reached a $15 million settlement with Lyft, which included a payment of $5 million in attorneys’ fees. As part of the settlement, Turrieta amended her complaint to allege all PAGA claims that could have been brought against Lyft. She then filed a motion for court approval of the settlement consistent with practice. And although the LWDA did not object to the settlement, when Olson and Seifu, the other two plaintiffs, and their counsel, got wind of the settlement, they moved to intervene, and objected. The trial court denied the intervention requests, approved the settlement, and then denied motions by Olson and Seifu to vacate the judgment in the Turrieta PAGA action. The court of appeal affirmed, finding that as nonparties, Olson and Seifu lacked standing to move to vacate the judgment, as only an aggrieved party can appeal from a judgment. On the intervention issue, the Court of appeal explained that the real party interest in a PAGA action is the State of California, and thus neither Olson nor Seifu had a direct interest in the case.

The California Supreme Court then granted review to consider whether a PAGA plaintiff has the right to intervene, object to, or move to vacate a judgment in a related pocket action that purports to settle the PAGA claims that a plaintiff has brought on behalf of the State. The California Supreme Court ended up agreeing with the court of appeal and the trial court, and they made a few notable findings. The California Supreme Court noted there was nothing in the PAGA statute expressly permitting intervention, and that PAGA’s purpose to penalize employers who violate California wage & hour laws and deter such violations was well served by the settling PAGA plaintiff, thus having other PAGA plaintiffs involved in a settled PAGA claim is not necessary to effectuate PAGA’s purpose. Relatedly, the Supreme Court also found significant the fact that the PAGA statute only requires that notice of settlement be sent to the LWDA and approved by the trial court, necessarily implying that other litigants need not be informed of the settlement or otherwise involved.

The Supreme Court also noted that permitting intervention would result in a PAGA claim involving multiple sets of lawyers, all purporting to advocate for the same client, fighting over who could control the litigation and settlement process, and who could recover the attorneys, fees. The Supreme Court highlighted that PAGA plaintiffs nonetheless have a variety of options to pursue other than intervention, such as consolidation or coordination of PAGA cases, to facilitate resolution of the claims in a single proceeding; or PAGA plaintiff can offer arguments and evidence to a trial court related to the PAGA settlement; or raise his or her concerns with the LWDA, so as to spur LWDA action.

Finally, the Supreme Court then held that the same reasoning for its conclusion against a right to intervention also meant that a PAGA plaintiff has no right to move to vacate the judgment obtained by another PAGA plaintiff in a separate PAGA action, or to require that any objections he or she files to another plaintiff settlement be ruled upon.

Jerry: Thanks for that excellent overview, Sarah. I think 2024 and 2025 are going to be bellwether years in California, not only for PAGA related rulings, especially as the reform legislation is implemented, but just class action litigation in general. As our loyal blog readers and listeners know, we do an annual study called the Duane Morris Class Action Review. We download every filing, every ruling in state and federal courts throughout the United States. This morning there were 118 class actions recorded as being filed yesterday, and 40% of them were in the state of California. So California is truly the epicenter of class action litigation. Well, thanks so much for joining us on this weekly episode, Sarah, and thanks so much for your thought leadership in this space.

Sarah: Thank you. Thank you, Jerry.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Nick Baltaxe with their discussion of the settlement process in class action litigation and common issues that arise for both plaintiffs and defendants while crafting settlement agreements.

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 our next episode of the weekly podcast the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is associate Nick Baltaxe. Thank you for being on the podcast, Nick.

Nick Baltaxe: Always a pleasure, Jen, happy to be here.

Jennifer: Today we’re discussing settlement issues in class action litigation over the past 12 months. Nick, how often are there settlements in class action litigation?

Nick: You know, class actions are typically not tried to verdict. Trials in these situations are rare, because financial exposure in most of these cases can be vast, and the possibility of an adverse verdict is usually an unacceptable risk to the employer. Because of that, most potential class actions are resolved either before or on the heels of a class certification order. Rule 23 not only provides a process for that certification of the class action, but also does provide a procedure for settlement of the class action claims as well. Specifically, Rule 23(e) lays out a three-part settlement approval process. It includes preliminary approval, then notice to the class, and final settlement approval.

Jennifer: And what would you say are some of the benefits of settling these types of cases?

Nick: You know there are benefits to everyone included. Early settlements offer plaintiffs relatively quick payments, and they get to kind of skirt around the longer, drawn out class certification and class litigation process. It’s a benefit to the defendant because it allows the defendants to end cases early, which usually avoids the costs of protracted litigation, and usually what is very expensive discovery. Also, there’s a benefit to the court system as they get to avoid needless litigation that clogs court dockets. Usually, when permitted, parties frequently choose to settle on a confidential basis, which also allows the avoidance of risk of adverse publicity which is a dynamic that can benefit both defendants and plaintiffs.

Jennifer: Are there any obstacles to settling or getting court approval of class wide settlements? Or what would you say some of the biggest obstacles are?

Nick: Yes. So, as we stated, there’s both a preliminary and a final approval process for these class settlements. In order to secure a court’s approval at the preliminary stage, the parties must provide sufficient information to the court to determine whether or not it will likely be able to approve the settlement and certify the classes solely for the purposes of the entry of judgment. Rule 23(e) includes a detailed list of factors for consideration before final approval, as well, including the quality of class representation. Whether the negotiation took place at an arm’s length, the adequacy of class relief, and the equitable treatment of the class members. Class notice at the preliminary approval stage is also governed by this rule and outlines the proper process for providing notice to the class members.

Jennifer: Thanks, Nick. The settlement approval process is far from a rubber-stamping process, at least in many courts. While the legal standards are rule-based, courts tend to apply the standards in less than identical fashion based on the case law of the federal circuit which within which they’re located, as well as based on their own discretion. So what might pass muster in one courtroom may not pass muster in another courtroom. Courts do tend to use a less rigorous standard for certification of a class for settlement purposes, though, as compared to non-settlement purposes. I think this is especially evident with the Rule 23(b)(3) requirement of predominance. What do you think this means for counsel crafting these settlements?

Nick: Yes, settlement on a class wide basis consistently poses strategic dilemmas both for plaintiffs and defendants alike. There are multiple issues that need to be considered recrafting the settlement. For example, how much can a defendant concede without compromising its ability to defend the case to the extent the settlement ends up falling through or is not approved; can we settle something on a class wide basis that may be too cheap, and therefore deemed to be inadequate or unfair when being reviewed by the courts; and finally, how extensive and broad can the release language be to cover the settlement parties without risking of that not being approved by the court.

Jennifer: And the courts can answer those questions on a very wide spectrum. So, now that we’ve laid out the settlement process, do you have any notable rulings that you wanted to discuss from the past 12 months?

Nick: So classified settlements require that plaintiffs show all the applicable requirements of Rule 23, and courts have, and will, deny approval to a proposed class-wide settlement if those requirements are not established. A good example is a case called Mercado, et al. v. Metropolitan Transportation Authority. In that case, the plaintiffs, who are a group of employees of the MTA, filed a collective action alleging that the defendant failed to pay overtime compensation in violation of the FLSA.

The parties ultimately settled the claims, and the plaintiffs filed a motion for preliminary settlement approval. However, the court denied the motion. While the parties had asserted that the litigation would have been protracted, expensive, and risky – and that the settlement provided close to maximum recovery for plaintiffs – the court found that the parties failed to provide any documentation to support their assertions concerning the ranges of possible recovery and the reasonableness of the settlement. The court also noted that the settlement agreement’s release was overly broad because it extended liability releases to various entities beyond the defendant as well as to individuals who are not part of the lawsuit. The court also examined attorneys’ fees and costs. In the case, the plaintiffs’ counsel sought a fee of one-third of the settlement proceeds and reimbursement of all costs. The court opined that the requested rates were reasonable, but the plaintiffs’ counsel failed to provide any evidence whatsoever to determine whether the costs were also reasonable. The court finally concluded the plaintiffs failed to address whether the conditional certification status of the collective action affected the settlement; whether they were requested service rewards for the named plaintiffs; and that the fees and the cost of the administration of the settlement fund were reasonable. Accordingly, the court denied the motion for preliminary settlement approval.

Jennifer: Nick, how often would you say that there are objections to class action settlements?

Nick: So there is also a process for class members to object to the settlement, and there are objections all the time in these situations to these settlements. Sometimes these objectors are even successful in overturning the settlement or getting it vacated on appeal. An interesting example from the past 12 months is a case called In Re Wawa, Inc. Data Security Litigation. In that case, the plaintiffs allege that their personal information was compromised following a data breach in which hackers gained unauthorized access to Wawa’s payment systems, therefore, compromising the credit and bank card data of around 22 million customers.

The case was ultimately settled for $9 million in gift cards and other compensation to customers, including $3.2 million for attorneys’ fees and costs. One of the class members, named Theodore H. Frank, objected to the settlement, arguing that the fee calculation was unreasonable, and arguing that the settlement was based on a constructive common fund that combined attorney and class recovery, therefore, making the fee award disproportionate to the amount that was being provided to the class members. The objector also raised concerns about side arguments between class counsel and Wawa.

The district court, however, approved the settlement and dismissed the objections. However, Frank appealed, and the Third Circuit vacated the district court’s ruling. The Third Circuit in doing so highlighted two key considerations in evaluating fee rewards: first, the relationship between the fee award and the benefit received by the class members; and second, any side agreements between class counsel and the defendant. The Third Circuit ruled that the district court on remand had to review the fee award with “fresh guidance” from the appellate level, particularly regarding arrangements between the parties prior to any settlement approval being granted. The Third Circuit also noted the parties’ “clear sailing” arrangement, under which Wawa agreed not to contest any fee petitions filed by class counsel for the consumers, and the fee reversion provision that any reductions in class counsel fees would be returned to Wawa rather than distributed to the class members. The Third Circuit made sure that both of those were being reviewed to determine whether or not they were fair and reasonable. The Third Circuit further opined the district court should consider whether the funds made available to the class members, rather than the amount claimed during the claims process, was the best measure of reasonableness, and whether the fee reward was reasonable in light of any other side agreements between class counsel and Wawa. With all those considerations in mind, the Third Circuit accepted the objection and vacated and remanded it to the district court.

Jennifer: Thanks, Nick. Very, very interesting, and a great example of an appellate court articulating the fairness considerations that should be applied by district courts in considering approval of class action settlements.

Well, I think we are about out of time here for today. So thanks so much for joining me, Nick, and thanks to our listeners for being here. We will be sure to give more updates on settlement issues in class action litigation on our blog, the Duane Morris Class Action Defense Blog, so stay tuned.

Nick: Thanks, all.

 

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Nelson Stewart with their discussion of significant developments in the securities fraud class action space, including analysis of two key rulings, class certification rates, and major settlements.

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 the next episode of our podcast series, the Class Action Weekly Wire. I’m Jerry Maatman, a partner in Duane Morris’ Chicago and New York offices, and joining me today is my colleague from our New York office, Nelson Stewart. Welcome.

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

Jerry: Today we wanted to discuss trends, issues, and important developments in the area of securities fraud class action litigation. Nelson, this is a big space, but could you give us, from your thought leadership perspective, some kind of summary of what you think are kind of key developments in this area?

Nelson: Sure, Jerry. Class action securities fraud claims typically involve an alleged public misrepresentation or omission made by the issuer of a security, a subsequent disclosure that reveals the statement or omission to be false, and a decrease in the value of the security resulting from the disclosure. Securities fraud claims readily lend themselves to class-wide treatment because the number of investors who may claim losses resulting from a misrepresentation is often considerable.

The principal federal statutes for securities fraud claims are the Securities Act of 1933 and the Securities Exchange Act of 1934. Both statutes were enacted for the purpose of regulating securities markets and providing increased disclosure and transparency for investors in the wake of the stock market crash in 1929.

The 1933 Act generally applies to misrepresentation made in connection with an initial offering of securities. The 1934 Act imposes liability for misrepresentations related to the purchase or sale of existing securities.

Jerry: Thanks, Nelson, for that framework. By my way of thinking, the absolute Holy Grail in class action litigation for the plaintiffs’ bar is class certification. They file the case, they certify it, and then they monetize it. How did plaintiffs fare over the last year in terms of certifying securities fraud class actions?

Nelson: In 2023, plaintiffs were incredibly successful in gaining class certification. The plaintiffs’ bar secured class certification at a rate of 97% – or put another way, 35 of 36 motions. Companies secured denials in 3% of the rulings, or just in one case.

Jerry: While we do a comparative study of securities fraud with respect to other areas of law, at least in 2023 securities fraud class certification rates were the highest. We recently did a mid-year report in 2024, and still very high, but down to about 67% – 10 out of 15 cases certified in the securities fraud area. In terms of the key guide posts on the playing field when it comes to securities fraud class action litigation, what are some of the key developments that corporate counsel should be aware of?

Nelson: One of the most notable decisions in 2023 was the U.S. Supreme Court’s ruling in Slack Technologies v. Pirani, et al. The Supreme Court addressed a split among the federal circuits created by the Ninth Circuit’s departure from a well-established interpretation of Section 11(a) of the 1933 Act. A plaintiff bringing a fraud claim under the 1933 Act must show that the purchase of shares at issue can be traced back to the false or misleading registration statement. The statute imposes strict liability and a lower standard of proof for a narrower class of securities than the 1934 Act, which applies to misrepresentations or omissions for any security, but carries a higher standard of that requires plaintiffs to show a scienter, reliance, and loss causation.

In Slack, plaintiffs had purchased shares through a direct listing that offered both registered and unregistered stock shares. The inability to trace unregistered shares to a registration statement would be fatal to plaintiffs’ claims under the 1933 Act. In denying defendant’s motion to dismiss the class action, the district court attempted to accommodate the traceability challenges of a direct listing through a broad reading of the “such security” phrase of Section 11(a). The district court held that the unregistered shares were “of the same nature” as shares subject to the registration statement and plaintiffs therefore had standing under Section 11(a) to bring the suit.

 

On appeal, the Ninth Circuit noted that the application of Section 11(a) to the direct listing was one of first impression and it affirmed the district court’s decision while rejecting its broader reading of Section 11(a). The Ninth Circuit expressed concern that the more restrictive reading of the statute advocated by Slack, and applied by other circuits, would limit an issuer’s liability for false or misleading statements through the use of a direct listing and thereby disincentivize the 1933 Act’s goal of transparency.

On further appeal, the Supreme Court vacated the Ninth Circuit’s decision and held that the language of the 1933 Act was intended to narrow its focus. Citing Sections 5, 6 and 11(e) as support for the conclusion that the term “such security” refers back to shares that are subject to the registration.

Slack confirms that the novelty of a specific type of offering, such as a direct listing, cannot excuse the well-settled requirements for claims brought under Section 11 of the 1933 Act. Unregistered shares from a direct listing or certain post-IPO offerings are subject to dismissal at the pleading stage for lack of standing under Section 11 if those shares cannot be traced back to the initial registration. Whether an issuer is required to register all shares for sale in a direct listing was not addressed in Slack because this question had not been raised in the prior proceedings.

Another key ruling came out of the Southern District of New York in a case titled Underwood, et al. v. Coinbase Global. There, plaintiffs brought claims under Sections 5 and 12(a) of the 1933 Act and Sections 5 and 29(a) of the 1934 Act. Plaintiffs alleged that Coinbase operated a securities exchange without registering with the SEC. Their amended complaint also alleged that the cryptocurrency tokens sold on the Coinbase platform were securities as defined under both statutes.

However, the issue of whether digital assets must be registered with the SEC was not determined because the court found the plaintiffs failed to state a claim under the 1933 Act and the 1934 Act. Section 5 of the 1933 Act prohibits any person from selling unregistered securities unless the securities are exempt from registration. Section 12(a) creates a private right of action for any buyer against the seller of an unregistered security. To meet the definition of a seller under Section 12(a), a seller must either pass title or other interest directly to the buyer, or the seller must solicit the purchase of a security for its own financial interest. The court granted Coinbase’s motion to dismiss the claims brought under 12(a) because the plaintiffs did not sufficiently plead either requirement.

The initial complaint had stated that there was no privity between a user of the Coinbase platform and Coinbase. The user agreement also expressly stated that Coinbase was simply an agent, and a user who purchased a token from through the online platform was not purchasing digital currency from Coinbase. Though the plaintiffs had attempted to avoid this issue by amending their complaint to state that privity only existed between the user and Coinbase, the court held that it would not allow an amended complaint to supersede the admissions in the plaintiffs’ earlier pleading, or the express language of the user agreement. These facts precluded an action against Coinbase under Section 12(a). The company did not meet the definition of a statutory seller as defined in Section 12(a) because it did not pass title directly to a buyer. The plaintiffs also failed to plead anything more than collateral participation in the purchase of the tokens. The court concluded that absent allegations that the plaintiffs purchased the tokens as a result of active solicitation by Coinbase, Section 12(a) was inapplicable.

The court further held that the plaintiffs’ claims under the 1934 Act also failed for lack of privity. Section 29(a) of the 1934 Act provides that every contract that violates any provision, rule, or regulation is void. The plaintiffs argued that the user agreement and the transactions were void because they involved contracts that were premised on an illegal purchase of an unregistered security on an unregistered exchange, which violated Section 5 of the 1934 Act. The amended complaint sought rescission of the transaction fees and the transactions. To allege a violation of Section 29(b), the plaintiff is required to show that: (i) the contract involved a prohibited transaction; (ii) the plaintiff is in contractual privity with the defendants; and (iii) the plaintiff is in a class that the 1934 Act intended to protect. The court again found that privity was not established under the user agreement. The initial complaint asserted that the plaintiffs contracted with users of the Coinbase platform, not Coinbase. Thus there was no contractual privity with Coinbase. The court also noted that the user agreement was not a contract that required the plaintiffs to do anything illegal. A party to the user agreement was free to use the platform to transact crypto currencies or not transact at all. The court concluded this was insufficient to render the sale of digital assets on the platform a prohibited transaction under Section 5 of the 1934 Act.

Recently, in April of 2024, the Second Circuit reversed the district court’s dismissal of alleged Securities Act violations, fin ding the district court improperly relied on the plaintiffs’ initial complaint and Coinbase’s user agreement, instead of looking solely to the allegations in the amended complaint. The Second Circuit noted that some versions of the user agreements in place when the transaction at issue occurred had conflicting language that could plausibly support the allegations that defendants had passed title to the plaintiffs under Section 12(a)(1) of the 1933 Act. The court upheld dismissal of certain claims brought under the Securities and Exchange Act of 1934, finding that the plaintiff’s conclusory out allegations provided insufficient detail to support a claim for rescission.

Jerry: Thanks for that analysis. Evident to see a lot of developments in this space over the past 12 months. In terms of that monetization of securities fraud class actions, how did the plaintiffs’ bar do on the settlement front?

Nelson: There were several settlements of over a billion dollars reached in securities fraud class actions last year, and the top 10 class action settlements in this space add up to $5.4 billion.

In SEC, et al. v. Stanford International Bank, the Court granted approval of a $1.2 billion settlement to resolve investors’ allegations that the banks aided Robert Allen Stanford’s $7 billion Ponzi scheme.

A $1 billion settlement was approved in In Re Dell Technologies Inc. Class V Stockholders Litigation, which was a class action brought by investors alleging Dell, its controlling investors, and its affiliates shortchanged shareholders by billions in a deal that converted Class V stock to common share.

And in In Re Wells Fargo & Co. Securities Litigation, another $1 billion settlement was approved in a class action brought by investors alleging that the company made misleading statements about its compliance with federal consent orders following the 2016 scandal involving the opening of unauthorized customer accounts.

Jerry: It seems like 2024 is equally upbeat for the plaintiffs’ bar. We’ve tracked through the first six months settlements totaling over $2 billion, with three individual  settlements near the half-billion mark: $580 million, $490 million, and $434 million for securities fraud class action settlements, so a very robust area for the plaintiffs’ bar.

Well, thanks so much for your insights, Nelson. Very, very helpful in this space. And thank you to our loyal listeners for tuning in to this episode of the Class Action Weekly Wire.

Nelson: Thanks everyone.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Kelly Bonner with their discussion of key rulings, settlements, and trends analyzed in the RICO class action space.

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 podcast, the Class Action Weekly Wire. I’m Jen Riley, partner at Duane Morris, and joining me today is Kelly Bonner. Thank you for being on the podcast, Kelly.

Kelly Bonner: It’s great to be here, Jen.

Jennifer: Today we wanted to discuss trends and important developments in Racketeer Influenced and Corrupt Organizations Act, or RICO, class action litigation. RICO is a federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal enterprise. The Congress enacted the RICO in 1970 in an attempt to combat organized crime in the United States. The law has since been used to prosecute a variety of offenses, including securities fraud, money laundering, and even environmental crimes. Kelly, can you explain the burden on the plaintiff in a RICO action?

Kelly: Sure thing, Jen. RICO allows the government to prosecute individuals associated with criminal activities such as the leaders of crime organizations. Although there are criminal charges, today we’re going to focus on the burden for civil RICO claims. So, plaintiff must prove three elements: criminal activity, so that means the plaintiff must show that the defendant committed a RICO crime; a pattern of criminal activity, which means that the plaintiff must show that the defendant committed a pattern of at least two crimes – patterns can include everything from the same victim to the same methods used to commit the crimes, or that the crimes even happened within the same year; also the statute of limitations – in civil RICO cases, the statute of limitations is four years, and that runs from the time of discovery. Plaintiff must also prove the existence of an enterprise. So, civil RICO class actions are significant pieces of litigation, and due to the potential for exposure to treble damages – or, you know, three times the damages – such class actions can present extraordinary risks.

Jennifer: Thanks, Kelly, very different from the types of claims that we often discuss on the podcast. How often are RICO class actions granted class certification?

Kelly: So in 2023, the plaintiffs’ bar secured class certification at a rate of approximately 70%. Companies secured denials in 30% of the rulings – so plaintiffs were largely successful in certifying the class.

Jennifer: Can you discuss any key rulings from 2023?

Kelly: Sure. So, in several 2023 cases, courts granted class certification under Rule 23(b)(3). So this is where the court concluded that common questions of law, in fact, predominated over individual issues, and that a class method was superior to other available methods for fairly and efficiently adjudicating the controversy. So, for example, in Turrey, et al. v. Vervent, Inc., the court concluded that common questions were dominated over individualized issues where plaintiffs alleged that defendants violated RICO by offering high cost education programs and a sham private student loan program called the Program for Educational Access and Knowledge, or PEAKS. This program saddled students with significant debt and inferior credentials. Plaintiffs sought class certification on the basis that they identified several common questions that could be resolved on a class-wide basis: 1) whether defendants knew that PEAKS was a fraudulent scheme designed to defraud investors and the U.S. Department of Education; 2) whether loans lacked legally required information; 3) whether PEAKS operated as an association, in fact, enterprise; 4) whether PEAKS as an enterprise made fraudulent representations, and 5) finally, whether the PEAKS enterprise use the mail and interstate wire system for its activities. The court opined that all of the elements of a substantive RICO violation could be determined through evidence common to class members. The court also noted that expert testimony sufficiently established that defendants knowingly participated in fraudulent scheme, and that PEAKS was structured to further defend its fraudulent goals. The court also ruled that questions of causation and injury could be addressed on a class-wide basis, since the plaintiffs allege that defendants conduct was the actual approximate cause of their injuries, and that their harms were foreseeable. So, if the loans had not been made or serviced as they were, the borrowers would not have made the payments. Even though the exact amount of damages differed among individual borrowers, the court concluded that this issue did not preclude class certification.

Jennifer: There’s also an interesting ruling that I wanted to mention, that came out of the Fourth Circuit in a case called Albert, et al. v. Global Tel*Link Corp. In that case, the Fourth Circuit vacated and remanded a ruling by the district court dismissing the plaintiffs’ RICO claims based on a failure to establish proximate causation. The Fourth Circuit concluded that the plaintiffs’ alleged injuries were the direct result of defendants’ scheme, and thus sufficient to allege RICO violations. In that case, the plaintiffs were families of prison inmates. They filed a class action alleging that the defendants, a group of providers of inmate telephone services, violated the RICO by colluding to fix prices for single call offerings, as well as misleading the government about their pricing structures, and ultimately causing consumers to pay inflated prices. The district court had dismissed the plaintiffs’ RICO claims on the basis that the plaintiffs did not adequately allege that the defendants proximately caused their injuries, as their harm was contingent upon harm suffered by the contracting governments. On appeal though, the Fourth Circuit vacated and remanded, the Fourth Circuit concluded that even though the alleged conspiracy occurred before it impacted the plaintiffs, the government was not a more direct victim than the plaintiffs, and the plaintiffs’ injuries were not derivative of those suffered by the governments because they would have been charged inflated prices regardless of whether the governments were injured. The Fourth Circuit clarified that the plaintiffs need only alleged facts plausibly supporting a reasonable inference of causation, and that the plaintiffs’ complaint plausibly supports an inference that the governments would have demanded lower prices for consumers but for defendants’ misrepresentations. Because the Fourth Circuit concluded that the plaintiffs’ alleged injuries were the direct result of defendants’ scheme, and therefore sufficient to allege RICO violations, it vacated the district court’s ruling and remanded for further consideration.

Kelly, how did the plaintiffs do in securing major settlements in the RICO class action space over the past year?

Kelly: So, there were several settlements and judgments that were over a million dollars reached in RICO civil class actions in 2023. So I’m thinking of in Lincoln Adventures LLC, et al. v. Those Certain Underwriters at Lloyd’s London Members of Syndicates, the court granted final approval of a $7.9 million settlement to resolve claims that Lloyd’s Syndicates violated RICO with an illegal anticompetition agreement. A massive RICO default judgment of over $131 million was entered by the court in Gilead Sciences Inc., et al. v. AJC Medical Group Inc., based on allegations that dozens of companies and individuals were involved in parallel schemes run by two healthcare networks profiting from illegal resale of HIV treatment medications. And then finally, in Zwicky, et al. v. Diamond Resorts, which comes out of Arizona, the court granted file approval to a settlement of $13 million, resolving allegations under RICO that defendants misrepresented the required annual fees for timeshare interest they purchased.

Jennifer: Thanks so much, Kelly. I know that these are only some of the cases that had interesting rulings in 2023 and RICO class actions. 2024 is sure to give us some more insights into the ways that class actions will evolve or continue to evolve in the RICO space. Thanks to all of our listeners for joining us today, appreciate having you here for this episode of the Class Action Weekly Wire.

Kelly: Thanks so much. Bye-bye.