Category: General

By Gerald L. Maatman, Jr.

Duane Morris Takeaways: Recently we had the privilege of attending this year’s annual ABA conference on class action litigation. Cutting-edge issues under Rule 23 were the focus of discussion among session leaders and attendees. The consistent theme is that case law precedents are in a state of constant flux – and the “new normal” is “change…”

Key cutting-edge issues are summarized below in terms of top-class action issues for 2025.

Data Breach Class Actions

The focal point in class actions over data breaches is discovery of consultant work in the aftermath of a breach and whether the work product is privileged or not. Plaintiffs’ advocates asserted that discovery of facts is always allowed and that companies have complete control over the technology environment when remediation efforts are undertaken in the wake of a data breach. Defense proponents contended that such consulting expert work is a prime example of protected work product. Case law, however, is somewhat all over the lot and data breach litigation is increasing in scope and complexity.

This issue underscores what class action practitioners agreed upon – data breach class actions are exceedingly complex, raises vexing choice-of-law issues under state law, and are challenging in terms of managing the litigation process.

Trials In Class Actions

Once a rarity, trials in class actions are beginning to become more mainstream. A panel session on trying a class actions discussed how challenging such a trial is given the stakes and financial exposures in “big” lawsuits.

As an adjunct professor of law at Northwestern, I teach trial advocacy. The skillsets taught in my law school class resonated in this session – have an “elevator” presentation for the jury that boils down the complexities of the case into an easily understood explanation of the plaintiffs’ theories and the defendant’s defenses. Both plaintiffs and defense lawyers agreed that the ability to craft an effective “elevator” speech pays dividends in the successful prosecution and/or defense of a class action in a trial setting.

As a federal judge on the panel advised, “less is more” in terms of trying a complex dispute in a manner that engages the attention of a jury (and a judge).

Unresolved Rule 23 Issues

While many areas of class-wide ligation are in flux, the number one issue prompted agreement from all practitioners – the unresolved issue from Lab. Corp. v. Davis on the impact of uninjured class members on class certification and damages models prepared by experts in class cases. The “uninjured class member” issue continues to drive diverse outcomes and uncertainty relative to the concepts of Article III standing and predominance under Rule 23(b)(3).

Attendees agreed that the issue is ripe for U.S. Supreme Court review after the dismissal of the certiorari grant for jurisdictional issue in Lab. Corp.

Collective Action Certification Standards

The standard for conditional certification of a collective action under the Fair Labor Standards Act is in flux. In essence, there are four distinct standards depending on what circuit law applies. The majority standard is based on Lusardi v. Xerox Corp., 99 F.R.D. 89 (D.N.J. 1983).

For decades, many federal courts have relied on the two-step Lusardi approach for collective action certification. Under the Lusardi standard for conditional certification, plaintiffs only had to make a “modest factual showing” that they were victims of a common illegal policy or plan. Most courts applying this standard refused to weigh evidence or consider opposing evidence presented by the defendant. Such lenient notice standards allow plaintiffs to expand the size of a wage & hour lawsuit, significantly increasing pressure to settle, regardless of the action’s actual merits.

In the past four years, the Fifth and Sixth Circuit Courts of Appeal have found that Lusardi’s two step approach is inconsistent with the text of the FLSA. Swales v. KLLM Transp. Servs., LLC, 985 F.3d 430 (5th Cir. 2021); Clark v. A&L Homecare & Training Ctr., LLC, 68 F.4th 1003 (6th Cir. 2023). In Swales, 985 F.3d at 443, the Fifth Circuit rejected Lusardi’s two-step approach outright, and required its district courts to “rigorously enforce” the FLSA’s similarity requirement at the outset of the litigation in a one-step approach. Similarly, in Clark, 68 F.4th at 1011, the Sixth Circuit adopted a comparable, but slightly more lenient standard, requiring the employee to show a “strong likelihood” that others are similarly situated to him or her before the district court can send notice.

In contrast, the Second, Ninth, Tenth, and Eleventh Circuits continue to either follow or allow the district court to adopt the two-step framework outlined in Lusardi.  Harrington v. Cracker Barrel Old Country Store, Inc., 142 F.4th 678 (9th Cir. 2025); Thiessen v. Gen. Elec. Cap. Corp., 267 F.3d 1095 (10th Cir. 2001); Myers v. Hertz Corp., 624 F.3d 537 (2d Cir. 2010); Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208 (11th Cir. 2001). 

The Seventh Circuit, in a recent opinion written by Judge Thomas Kirsch, rejected the Lusardi framework but declined to go as far as Clark or Swales. The Seventh Circuit observed that the notice process should be facilitated by three guiding principles: (1) the timing and accuracy of notice; (2) judicial neutrality; and (3) the prevention of abuses of joinder.  Richards v. Eli Lilly, 2025 U.S. App. LEXIS 19667, at *14 7(th Cir. Aug. 5, 2025).  It reasoned that the Lusardi standard threatened the latter two principles by “incentivizing defendants to settle early rather than attempt to ‘decertify’ at step two . . . transforming what should be a neutral case management tool into a vehicle for strongarming settlements and soliciting claims.” Id. at * 17. Thus, the Seventh Circuit rejected Lusardi, but what to do in the alternative was a more difficult question.

The Seventh Circuit decided that rather than endorse the rigid standards of Clark or Swales, its approach would be guided by “flexibility” and an analysis that is not an “all-or-nothing determination.” Id. at *19. Indeed, a plaintiff must now “make a threshold showing that there is a material factual dispute as to whether the proposed collective is similarly situated.” Id. at *21. Or, in other words, a plaintiff must “produce some evidence suggesting that they and the members of the proposed collective are victims of a common unlawful employment practice or policy.” Id, at *21-22. To counter a plaintiff’s evidence, an employer “must be permitted to submit rebuttal evidence and, in assessing whether a material dispute exists, courts must consider the extent to which plaintiffs engage with opposing evidence.” Id. at *22. It is not clear, however, the burden a plaintiff must satisfy to refute the defendant’s evidence to move forward. 

This brewing circuit split suggest that U.S. Supreme Court review is necessary to resolve this important issue.

By Gerald L. Maatman, Jr., George J. Schaller, and Andrew P. Quay

Duane Morris Takeaways:  On September 19, 2025, in Vidal, et al. v. The Hershey Co., No. 24-CV-60831, 2025 U.S. Dist. LEXIS 184308 (S.D. Fla. Sept. 19, 2025), Judge Melissa Damian of the U.S. District Court for the Southern District of Florida dismissed a class action complaint alleging violations of the Florida Deceptive and Unfair Trade Practices Act for deceptive candy packing.  The Court held the plaintiff-consumers failed to plausibly allege an economic injury, and therefore, lacked Article III standing.  Plaintiffs’ allegations that they were “disappointed” with the lack of carved designs on Halloween-themed candy and blanket assertions that they “paid a premium” was not enough to sustain an economic injury. 

The decision illustrates that conclusory statements, without an economic injury, are not enough to confer Article III standing.  Though the ruling demonstrates “spooky” claims for deceptive labeling and deceptive advertising can support a potential class action, the Plaintiffs here could not show they sustained an economic injury. 

Case Background

Plaintiffs Nathan Vidal and Eduardo Granados, on behalf of themselves and a putative class of consumers, filed a class action complaint against The Hershey Company (“Hershey”).  Plaintiffs alleged  they purchased certain decorative Reese’s products in Florida and that these products “misled” them in violation of the Florida Deceptive and Unfair Trade Practices Act.  Id. at *4

Plaintiffs asserted they would not have purchased Reese’s Peanut Butter Pumpkins and Reese’s White Pumpkins had they known that the products did not contain detailed carvings of eyes and a mouth as pictured on the packaging.  Id. at *3-4.  Plaintiffs maintained “Hershey [] deceived reasonable consumers … into believing the [p]roducts were something that they were not.”  Id. at *5.  In true Halloween horror story fashion, Plaintiffs claimed that without the carvings and designs the products were “worthless” and that they would not have purchased them.  Id. at *14. 

Hershey moved to dismiss for lack of subject-matter jurisdiction or, in the alternative, for failure to state a claim, Hersey also moved to strike Plaintiffs’ class action allegations.  Id. at *4. 

Hershey primarily argued Plaintiffs lacked standing because “they suffered no injury-in-fact.”   Id. at *6.  Hershey maintained Plaintiffs lacked standing because they only alleged an economic injury.  Hershey however contended Plaintiffs did not suffer an economic injury because they still received “delicious Reese’s candy.”  Id.  Even still, Hershey countered that most of the at-issue products, contained “DECORATING SUGGESTION” disclaimers and both carved and uncarved images.  Id. at * 7.  Hershey similarly highlighted that Plaintiffs did not allege the products were defective, inedible, did not meet taste/flavor expectations, or that they lost any economic value without the decorative carvings.  Id. at *14.

While Hershey’s motion was pending, Plaintiffs moved for class certification arguing they satisfied all the requirements under Rule 23 to certify a class of consumers who purchased any of the at-issue Reese’s products “based on a false and deceptive representation of an artistic carving” on the products packaging.  Id. at *5.

The Court’s Decision

The Court dismissed Plaintiffs’ complaint because they did not allege a concrete economic injury and therefore lacked standing to pursue their personal claims and class claims.

In dismissing Plaintiffs’ complaint, the Court reasoned the Eleventh Circuit’s analysis of standing emphasizes that “[e]conomic injuries are the ‘epitome’ of concrete injuries,” and that such an economic injury can be the “result of a deceptive or unfair practice” where an individual is “deprived of the benefit of her bargain.”  Id. at *15.  In analyzing the benefit of the bargain a plaintiff’s damages are calculated based on “the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties.”  Debernardis v. IQ Formulations, LLC, 942 F.3d 1076, 1084 (11th Cir. 2019) (citing Carriuolo v. Gen. Motors Co., 823 F.3d 977, 986-87 (11th Cir. 2016)). 

The Court relied on two analogous cases in considering Plaintiffs’ economic injury assertions.  The first case concerned “honey-lemon cough drops” that “soothe[] sore throats” and based on those representations the “plaintiff believed that the cough drops contained lemon ingredients and were capable of soothing bronchial passages.”  Id. at *17-18 (citing Valiente v. Publix Super Markets, Inc., 2023 U.S. Dist. LEXIS 91089 (S.D. Fla. May 24, 2023)).  The Court in Valiente held plaintiff failed to allege an economic injury because the plaintiff did not allege the cough drops were defective, did not work as advertised, or were otherwise so flawed to render them worthless.  Id.  at *18.

The second case concerned plaintiffs who alleged they “paid a premium price” for “protein-infused brownies” that contained less than the advertised protein content.  Id. at *18 (citing Melancon v. Alpha Prime Supps, LLC, 2025 U.S. Dist. LEXIS 21114 (S.D. Fla. Jan. 13, 2025).  The Court in Melancon held plaintiffs failed to allege they suffered an economic injury for the same reasons as Valiente and also failed to identify any competing products for the Court to plausibly conclude that plaintiffs suffered a concrete injury in fact.  Id.

Based on these cases, the Court agreed that “Plaintiffs here fail to allege Reese’s Products they purchased were defective or worthless.”  Id.  The Court explained “[p]ut simply, Plaintiffs do not allege that the products were unfit for consumption, did not taste as Plaintiffs expected, or otherwise were so flawed as to render them worthless.” Id. a

The Court reasoned Plaintiffs’ disappointment and conclusory allegations as to why they were deprived of the benefit of their bargain merely reflected their subjective, personal expectations of how the candies would or should have looked when unpackaged.  Id.  The Court held Plaintiffs’ failure to tie the value of the candies to their purported misrepresentation theory did not plausibly allege a concrete economic injury for purposes of Article III standing.  Id. at *19.  Further, the Court reasoned Plaintiffs made no allegations that would allow any measurement of “the difference between the value of the Reese’s Products with or without the decorative carvings.” Id. 

The Court also determined Plaintiffs’ “[c]omplaint contain[ed] nothing more than allegations of Plaintiff’s subjective belief that they paid a price premium” and these blanket allegations were not enough to allege a concrete injury.  Id. at *19-20. 

Accordingly, the Court dismissed Plaintiffs’ complaint finding “Plaintiffs lack Article III standing to assert a claim for relief” individually or on behalf of a purported class.  Id. at *20.  The Court dismissed Plaintiffs’ complaint without prejudice preserving Plaintiffs’ ability to move for leave to amend within 15 days from the date of the Court’s Order.  Id. at *23.  

Implications For Companies

Companies faced with consumer fraud class action lawsuits alleging theories of false advertising and deceptive practices related to their products must consider standing at the outset of any litigation. 

Vidal illustrates the importance of analyzing Article III standing issues in every lawsuit.  The Vidal Plaintiffs did not allege a sufficient economic injury based on their personal expectations of how Halloween-themed candies should have looked and did not allege the candies were defective, flawed, or reduced the actual value of the product.  Accordingly, the Court subjected their claims to dismissal.

Companies should not treat defective or false advertising product class action claims lightly, and if faced with such a lawsuit, Companies must consider all available defenses. 

By Gerald L. Maatman, Jr., Kevin E. Vance, and Ryan T. Garippo

Duane Morris Takeaways:  On June 17, 2025, in Smith, et al. v. Costa Del Mar, Inc., No. 18-CV-1011, 2025 WL 1697161 (M.D. Fla. June 17, 2025), Judge Timothy Corrigan of the U.S. District Court for the Middle District of Florida dismissed a Magnuson-Moss Warranty Act (“MMWA”) class claim following a multi-million-dollar settlement between the parties due to lack of subject matter jurisdiction.  Although the opinion may seem like a win for the company on its face, this decision only places further limitations on corporate defendants’ ability to access the federal forum and makes it more difficult for such defendants to get a fair trial where class-wide relief is alleged.

Background

Costa Del Mar, Inc. (“Costa”) “is a sunglasses manufacturer that represented to buyers that sunglasses were backed by lifetime warranties.”  Smith v. Miorelli, 93 F.4th 1206, 1209 (11th Cir. 2024).  Plaintiffs, who were Costa customers, filed three separate class action lawsuits alleging that the “lifetime warranties required Costa to repair their sunglasses either free-of-charge or for a nominal fee.”  Id.  Rather than repairing the sunglasses for a nominal fee, the plaintiffs alleged that Costa charged them, in some cases, up to $105.18 to repair their sunglasses which was paid by the plaintiffs.

After years of litigation, the plaintiffs ultimately filed an amended complaint “to facilitate a settlement agreement that would resolve the claims in all three cases” based on a MMWA class claim.  Id. at 1210.   To that end, the parties moved for approval of a class action settlement that would have provided “over $60 million of value to the class in the form of product vouchers and attorneys’ fees” as well as injunctive relief.  Id. (quotations omitted).  The district court preliminarily approved the parties’ settlement agreement pursuant to Federal Rule of Civil Procedure 23(e).  But, the preliminary approval order was not the end of the story.

Several objectors challenged the district court’s order on the basis that “any award of attorneys’ fees to class counsel must be based on the value of product vouchers that are actually redeemed, not the value of vouchers that would be distributed.”  Miorelli, 93 F.4th at 1211.  The district court, however, overruled these objections and awarded class counsel $8 million dollars in attorneys’ fees. 

The objectors appealed and argued, inter alia, that the district court abused its discretion to approve a settlement for injunctive relief because the plaintiffs lacked Article III standing under the U.S. Constitution.  As the objectors saw it, the plaintiffs did not have an ongoing injury-in-fact, sufficient to support injunctive relief, where they had already paid the fees for their sunglasses.  The Eleventh Circuit agreed with the objectors and reversed the district court’s preliminary approval order.  In so doing, it also noted that “[t]he parties have raised other jurisdictional issues that the district court should consider in the first instance” because the Class Action Fairness Act of 2005 (“CAFA”) potentially “does not provide an alternative basis for a federal court to exercise subject matter jurisdiction over a case brought under the MMWA.“  Id. at 1213, n. 8.  So, the case was remanded to the district court for further consideration of that question.

The Court’s Opinion

On remand, the district court had the “unenviable task of advising the parties that, notwithstanding the nearly seven years of litigation that have transpired since this case was filed, it is due to be dismissed for lack of subject matter jurisdiction.”  Smith, 2025 WL 1697161, at *1.

The district court noted that “[t]he MMWA vests federal district courts with subject matter jurisdiction to hear claims brought under the Act.”  Id. at *2.  But, a district court only has federal question jurisdiction under the MMWA if there are more than 100 named plaintiffs.  Id. at *2 (citing 15 U.S.C. § 2310(d)(3)).  Because plaintiffs could not satisfy this requirement, they relied solely on the federal court’s ability to hear the case under CAFA.

Ordinarily, a plaintiff can a bring a class action in federal court, that otherwise must be heard in state court, where the requirements of CAFA are met.  Subject to some exceptions, these requirements are that there must be: (a) at least 100 class members; (b) that there is minimal diversity between the parties; and (c) the amount in controversy exceeds $5 million dollars.  28 U.S.C. § 1332(d)(2).

The MMWA often presents a rare exception to that rule.  As the district court explained, the Third and Ninth Circuits, as well as numerous federal district courts, have “determined that CAFA does not provide an independent basis for jurisdiction for an MMWA claim.”  Smith, 2025 WL 1697161, *2.  The district court noted that this opinion is not shared unanimously by its sister districts, but nonetheless agreed “that CAFA does not provide an independent basis for subject matter jurisdiction.” Id.

As a result, the district court held that “because there are fewer than 100 named plaintiffs” and the CAFA was not an independent basis for federal subject matter jurisdiction “plaintiff fails to meet the federal court jurisdictional requirements.”  Id. at *3.  Accordingly, after seven years of litigation and after a settlement agreement had been reached, the district court simply dismissed the case outright.

Implications For Companies

On its face, the Smith decision may seem like a great result for the company in this litigation because, after all, the lawsuit was dismissed in its entirety which is presumably what the company wanted all along.  But, a more nuanced analysis reveals hidden traps for companies faced with class action litigation.

The result of this decision is not that this claim will never be heard at all, but rather that the case will not proceed in federal court.  Indeed, the Smith plaintiff explicitly “stated he intended to refile this suit in state court if the Court determined it did not have subject matter jurisdiction.”  Id. at *3, n. 6.

In general, it is not uncommon for a company to “prefer[] the federal courts because it fears a corporate defendant . . . will not get a fair trial in state court.”  See, e.g., Hosein v. CDL West 45th Street, LLC, No. 12 Civ. 06903, 2013 WL 4780051, at *3 (S.D.N.Y. June 12, 2013).  The Smith opinion adds a barrier to corporate defendants to avail themselves of the federal forum, and even goes so far as to place additional barriers on a defendant’s ability to settle claims against it.

If corporate counsel is concerned about their organizations being dragged into a class action, in a less-than-favorable state forum, then they should continue to monitor this blog for potential options or contact experienced outside counsel to discuss such matters.

By Shannon Noelle

On June 9-10, NYU hosted its 77^th annual conference on Labor & Employment Law, a non-partisan forum for stakeholders and experts to discuss current labor and employment policy and law.  We were privileged to attend the conference as an invited guest of sponsor and leading industry expert firm Resolution Economics. 

The conference spanned two days, with keynote addresses from Honorable Jonathan Snare, Deputy Solicitor of Labor, U.S. Department of Labor, and Marvin E Kaplan the National Labor Relations Board (NLRB) Chair.  The conference featured panels on topics such as the US Workforce, Reimagining Labor in a Conservative Era, Reimagining Civil Service, Federal Labor Preemption of State Captive Audience, Just Cause and Sectoral Bargaining Laws, Equal Access to Justice Reform Act, Facilitating Lawful Immigration (with speaker Ted Chiappari, Partner at Duane Morris,), Labor Union Political Activism, Future of the National Labor Relations Act, Restructuring the NLRB, AI Issues, Emerging Issues in Employment Arbitration, Employment Discrimination Law and Disparate Impact, and Restrictive Covenants.  

Future of the Department of Labor

Deputy Solicitor Snare opened the conference stating that the DOL’s new perspective is “personnel as policy” indicating that the Department has onboarded individuals with extensive and varied experience to bring insight and perspective to the Department’s new enforcement directives.  He stated that the Department’s enforcement priorities include “helping employers minimize unintentional errors,” child labor law enforcement, and speedy recovery of back way.  With regard to the test for independent contractor status, the DOL will rely on Fact Sheet #13 containing the “economic reality” framework and the 2019 Opinion Letter on Independent Contractors and Virtual Marketplace Companies.   In analyzing joint employer status, Deputy Solicitor Snare advised practitioners to look at the analysis in effect under the prior Trump administration for guidance which set out a 4-factor control test.  Solicitor Snare indicated that the overtime rule implemented in 2024 and joint employer analysis are currently under review by the Department. 

On the topic of OSHA enforcement priorities, Solicitor Snare referenced the recent Sea World fine and citation from 2024 for $16,5550 after a trainer was injured by a killer whale during a training session.   Solicitor Snare discussed the general duty clause in connection with this citation, found in Section 5(a(1) of the Occupational Safety and Health Act, requiring employers to furnish a place of employment free from recognized hazards that cause or are likely to cause, death or serious physical harm to employees, stating that this duty is not qualified under common law by the assumption of the risk or contributory negligence doctrine. 

There was also discussion of the Department’s implementation on May 15, 2025 of the non-enforcement policy regarding the 2024 Mental Health Parity and Addiction Equity Act (MHPAEA).   Solicitor Snare stated that this policy would “cut regulatory red tape” and give workers better access to mental health and substance abuse treatment as compliance with the former law was “burdensome.”   And, finally, Solicitor Snare discussed the Department’s initiative to improve pharmaceutical pricing transparency and provide Crypto guidance.  

Future of the NLRA and Restructuring the NLRB

The panel on the future of the NLRA and restructuring the NLRB advocated for restructuring the Board as opposed to dissolution, acknowledging that Board law on the National Labor Relations Act (NLRA) changing with each administration lacks clarity and consistency but also noting the utility of a quasi-judicial body continuing to provide guidance and decisions on labor disputes.  The panel discussed the upcoming decision regarding President Trump’s removal of Democrat Board member Gwynne Wilcox without cause—which reduced the Board to two members lacking the necessary 3-member quorum to issue decisions as to unfair labor practices—as likely to redefine Board authority and the Presidential executive power across the federal government.  The panel concluded that, no matter how the issue is decided, it presents an opportunity for both labor and management to consider how to refashion the Board into an exclusively adjudicatory agency likely to pass constitutional requirements and, at the same time, reduce the incidence of policy oscillation that has plagued the agency for decades. 

Acting General Counsel for the NLRB William Cowen expressed cautious optimism that a recent proposal to fund the agency at 4.7% below its current level would be “adequate for us to do our jobs” and expressed that he sees “ a way through this.” 

Samuel Estreicher, NYU Law professor, Roger King, HR Policy Association senior counsel, and David Sherwyn, Cornell University professor, discussed their proposal for restructuring the NLRB (recently detailed in a paper published by the University of Pennsylvania Carey School of Law) refashioning the board as a six-member court consisting of two Democrats, two Republicans, and two nonpartisans.  Further requirements for board members under this proposal would be that they cannot have represented labor or management interests for a six-year period prior to nomination to the Board to show a “propensity for independence.”  This requirement is to ameliorate the policy oscillation and lack of consistency in board law and to lend credibility to the agency.  The article authors indicated that they have gotten reasonable interest and traction from lawmakers and are actively in discussions regarding their proposal. 

Developments in AI

On the topic of AI, panelists discussed the proliferation of generative AI in the last 18 months which is used across the employment life cycle in sourcing, recruiting, predicting high potential employees, employees likely to leave, and even AI that generates job descriptions.   Experts indicated that the federal regulatory landscape is evolving with the Trump administration expected to roll out an action plan by the end of July.  Several recent reports discuss a Trump administration proposal, included in a House-passed budget reconciliation bill, that would implement a 10-year federal preemption or moratorium on state and local AI laws and regulations.  Thus, federal regulation of the AI space is expected to be on the radar of practitioners and experts alike.  

Implications for Companies

Employers must stay compliant with existing law (despite shifting prosecutorial priorities current labor and employment laws remain in effect) and monitor legal developments on the horizon.  Employers must remain vigilant in their compliance efforts and seek legal guidance for assistance in navigating this rapidly changing legal landscape.

Duane Morris partners Jennifer Riley and Jerry Maatman were recognized in the latest 2025 edition of the Mondaq Thought Leadership Awards. Riley won the top award as the #1 rated thought leader in the Data Protection and Privacy space in the United States. Maatman finished in the #2 slot. The rankings showcase the most popular articles across 16 areas of law published by authors around the globe between October 2024 and March 2025. We’d like to express our gratitude to our loyal blog readers and podcast listeners for this distinction and your continued support.

Jennifer Riley’s video episode “DMCAR Trend #7 – Data Breaches Gives Rise To An Unprecedented Number Of Class Action Filings” was ranked #1 across all data protection content on the platform.

Ranked #2 was Jerry Maatman’s launch announcement of Duane Morris’ Data Breach Class Action Review – 2025. Bookmark or download our virtual data breach desk reference, which is fully searchable and viewable from any device.

Stay tuned – coming soon to the Duane Morris Class Action Defense Blog is our mid-year class action report including key analysis of developments in the data privacy class action landscape.

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan Garippo

Duane Morris Takeaway: The Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, et seq., has long been a focus of class action litigation. Since the TCPA was enacted 30 years ago, the methods and technology that businesses use to engage and interact with customers has evolved and changed. The trend of states enacting or amending their own mini-TCPAs shows no signs of slowing down, making this subject area a likely continued focus for the plaintiffs’ class action bar in years to come.

To that end, the class action team at Duane Morris is pleased to present the 2025 edition of the TCPA Class Action Review. We hope it will demystify some of the complexities of TCPA class action litigation and keep corporate counsel updated on the ever-evolving nuances of these issues.  We hope this book – manifesting the collective experience and expertise of our class action defense group – will assist our clients by identifying developing trends in the case law and offering practical approaches in dealing with TCPA class action litigation.

Click here to bookmark or download a copy of the TCPA Class Action Review – 2025 e-book.

Stay tuned for more TCPA class action analysis coming soon on our weekly podcast, the Class Action Weekly Wire.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associates Jesse Stavis and Anshul Agrawal with their discussion of the key trends analyzed in the 2025 edition of the ERISA Class Action Review, including analysis of two major rulings and their significant impact on ERISA litigation in 2025.

Stay tuned for the publication of the ERISA Class Action Review on Tuesday, March 25.

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

Episode Transcript

Jerry Maatman: Welcome to our listeners. Thank you for being here on our weekly podcast series, the Class Action Weekly Wire. I’m Jerry Maatman, a partner with Duane Morris, and joining me today are my colleagues, Jesse and Anshul, and we’re here to talk about Episode 93 on class action issues involving ERISA. Welcome, gentlemen.

Jesse Stavis: Thanks, Jerry, always happy to be part of the podcast.

Anshul Agrawal: Yeah, thank you so much, Jerry.

Jerry: Today on our podcast we’re going to highlight our publication of the second edition of the Duane Morris ERISA Class Action Review. Jesse, can you share with our listeners a little bit about this publication?

Jesse: Absolutely. The surge of class action litigation filed under the Employee Retirement Income Security Act, or ERISA, over the last several years definitely persisted in 2024. Class action litigators in the plaintiffs’ bar continued to primarily focus on challenges to ERISA fiduciaries’ management of 401(k) and other retirement plans. The class action team at Duane Morris is pleased to present the ERISA Class Action Review – 2025, which analyzes the key ERISA-related rulings and developments in 2024, as well as the significant legal decisions and trends impacting this type of class action litigation for 2025. We hope the companies will benefit from this resource in their compliance with these evolving laws and standards.

Jerry: Well, certainly the subject matter of the book in terms of the key rulings in 2024 showed, I think, a mixed bag of results for both the defense bar and plaintiffs. Anshul, let’s talk a little bit about what you have identified as the biggest issues over the past 12 months, and that would be the increasing amount of class action litigation over 401(k) forfeiture issues. It’s certainly an area of concern for our clients, and we’re seeing some major developments. Could you share with our listeners your view of kind of the heart of these sorts of claims?

Anshul: Yeah, absolutely. So, the central issue here revolves around how employers handled forfeited 401(k) contributions. So specifically, the employers matching contributions when an employee leaves before they’re fully vested. Normally, if an employee leaves early, they forfeit these unvested funds, and many companies have been using this money to offset their own contributions in future years. However, there’s been a shift, because in 2024 we saw several class actions challenging this practice with plaintiffs, arguing that this forfeited money should instead be used to cover the administrative costs of the plan rather than reducing the employer’s future contributions. These claims have made it past motions to dismiss in several cases, including Perez-Cruet v. Qualcomm and Rodriguez v. Intuit. So, courts are increasingly finding that these claims may be valid under ERISA’s fiduciary duty standards.

Jerry: My take is that these cases are having real world consequences for people at companies that are in charge of managing 401(k) programs going forward. Jesse, do you think that these sorts of lawsuits are going to have lasting effects on the way in which employers treat these sorts of funds?

Jesse: Oh, definitely. The outcome of these cases could set new precedents. Courts have been indicating that companies might be violating their fiduciary duties if they’re not using forfeited funds for the benefit of plan participants. For example, in Perez-Cruet, the court found that Qualcomm’s use of forfeited funds for current employees’ accounts rather than administrative costs may have been a breach of fiduciary duty. Now this case, along with others like it, shows that companies could face real risks if they continue using forfeited funds solely to offset their own contributions. What’s particularly important here is the courts are saying that even if companies follow the plan’s documentation, they still have a duty to act in the best interest of the participants. This could definitely lead to a shift in how companies structure their 401(k) plans.

Jerry: I think it’s fascinating that we’re dealing with a statute that’s more than six decades old, but we’re bumping up against issues that have never been decided. Another thing that comes to my mind is the impact of socially and environmentally conscious investing, or what’s called ESG investing. And the big huge decision this year in the Spence v. American Airlines case. Anshul, can you comment on your take in terms of what was going on in that particular ruling?

Anshul: Yeah, sure. So, in the Spence case, a plaintiff challenged American Airlines’ investment decisions in the company’s 401(k) plan. The plaintiff argued that the plan’s fiduciaries breached their duties by selecting underperforming ESG funds and by choosing managers who prioritized these types of environmental and social goals over profitability. What’s notable here is that the plaintiff wasn’t just challenging the individual investments, but also the fund managers themselves for their ESG focus. The court found these claims plausible, allowing the case to move forward. So, this decision definitely has the potential to change how fiduciaries view ESG factors in their investment strategies, particularly when considering ERISA’s duty of prudence. If courts continue to allow these types of claims to proceed, it could lead to greater scrutiny of ESG investments in retirement plans.

Jerry: That to me is quite a headline and something that’s incredibly important to corporations and our clients to the extent that many are focused on ESG considerations, and this and the court’s ruling. That that might be a breach of fiduciary duties, seems to me to be a reordering of the playing field and the risks and compliance strategies when you’re looking in this area. Jesse, what would be your take on how this is going to play out in 2025

Jesse: Well, Jerry, I think that what makes Spence so interesting is that it highlights this tension between traditional profit-driven investing on the one hand, and socially conscious investments on the other. Now, in Spence, the court seemed to accept the argument that if ESG funds systematically underperform, fiduciaries could be seen as breaching their duty of prudence by investing in it. This opens up a new avenue for plaintiffs to challenge fiduciaries, and it’s something employers and investment managers will need to keep an eye on in the future. Now, we also saw some shifting regulatory perspectives here, especially with the Department of Labor’s rule allowing fiduciaries to consider ESG factors which is now under challenge. The Supreme Court’s Loper Bright decision which overturned Chevron deference could have significant implications for how courts evaluate these kinds of rules, and it might lead to more restrictive interpretations of fiduciary duties in the ESG context.

Jerry: Anshul, do you think that the Spence case is kind of a demarcation point where you’re going to see an increased focus by the plaintiffs’ bar and bringing class actions over this issue of putting notions other than profit first, and that that can translate into a breach of fiduciary duty?

Anshul: Yeah, I mean, that’s definitely possible. I think if other courts follow the lead of the Northern District of Texas, then we could see a rise in sort of these ESG-related lawsuits, particularly against employers or plan managers who prioritize these types of factors over pure financial performance. If more plaintiffs succeed in these claims, it could lead to more cautious approaches by fiduciaries when considering these ESG factors.

Jerry: I’ve always thought the business model of the plaintiffs’ class action bar is file a case, certify the case, then monetize the case by securing settlements. And 2024 certainly was a dramatic year when you talk about class action settlements. What about in the ERISA space in terms of how the plaintiffs’ bar did in taking down large-scale settlements?

Jesse: Well, Jerry, plaintiffs did very well in securing high dollar settlements in 2024, although not quite as well as in 2023. In 2024, the top 10 ERISA class action settlements totaled $413.3 million. This was a drop from 2023, when the top 10 settlements totaled $580.5 million.

Jerry: That’s still a lot of money, and that’s only the top 10, so, it dramatically illustrates the risk and compliance stakes for corporations in the ERISA class action space.

Well, thank you, gentlemen, for joining us on this week’s Class Action Weekly Wire and for providing us and lending us assistance in navigating the area of ERISA class actions, which is certainly at the top of the agenda for most corporations in terms of compliance activity.

Jesse: Thanks for having me, Jerry, and thanks, as always, to all the listeners.

Anshul: Thank you so much, Jerry, and thank you to everyone for tuning into the Weekly Wire

By Gerald L. Maatman, Jr., Rebecca Bjork, and Anna Sheridan

Duane Morris Takeaways:  On March 13, 2025, in International Rights Advocates v. Mars Inc. et al., No. 1:24-CV-00894 (D.D.C. Mar. 13, 2025),  Judge Royce Lamberth of the U.S. District Court for the District of Columbia ruled that the lawsuit filed by International Rights Advocates (IRA) against Mars Inc., Cargill Inc., and Mondelez International Inc. was not properly removed as it did not meet the “amount in controversy” prong of diversity citizenship and could not be aggregated. At the same time, the Court denied IRA’s Motion for Attorneys’ Fees and Costs, finding that the removal was not objectively unreasonable, as there had not yet been any “’clear, controlling case law from the D.C. Circuit on non-aggregation in the DCCPPA [D.C. Consumer Protection Procedures Act] context.” Id. at 20. The decision melted away the companies’ hopes of dodging local jurisdiction and set the stage for a potentially bittersweet legal battle.

Case Background

IRA filed this lawsuit in 2023, claiming that Mars, Cargill, and Mondelez sugarcoated their efforts to prevent child labor in their cocoa supply chains, and mislead consumers about the ethical sourcing of their chocolate products. IRA then filed an Amended Complaint alleging only misrepresentation in violation of the DCCPPA, invoking the private attorney general or representative-action provision, which authorizes a public interest organization to bring an action challenging an unlawful trade practice on behalf of itself and the “general public.” IRA sought an injunction requiring the defendants to correct their allegedly misleading public statements. The defendants then removed the case to federal court, arguing that the cost of compliance with an injunction (product labeling, public messaging, or both) met the monetary threshold required for federal jurisdiction. However, the Court did not buy into that argument wholesale.

The Ruling in International Rights Advocates v. Mars, Inc.

Judge Lamberth ruled that the defendants failed to demonstrate that the financial stakes met the standard for federal jurisdiction. He found that, rather than counting the total compliance costs, the amount should be divided among the affected population. More importantly, this case clearly set out a standard that a representative action under the DCCPPA brought on behalf of the general public cannot aggregate damages by the total costs combined to the defendants. This case follows precedent set in Breakman v. AOL LLC, when the court held that compliance cost could be used to determine the amount in controversy in an action where separate and distinct claims are presented on behalf of multiple parties only when the cost running to each plaintiff meets the amount in controversy requirement.545 F. Supp. 2d 96, 106 (D.D.C. 2008).This led Judge Lamberth to remand the case back to the D.C. Superior Court, where the chocolatiers will have to litigate the representative action.

Implications For Companies

This ruling serves as cautionary tale for employers hoping to whisk cases away to federal court by piling on compliance costs. Courts are increasingly scrutinizing how these figures are calculated. For companies facing consumer protection claims, this decision signals that removing cases to federal court will not always be a piece of cake. Employers must be prepared for cases to remain in state or local court where procedural rules might not be as favorable.