Category: General

By Gerald L. Maatman, Jr., Bernadette Coyne, and Zachary J. McCormack

Duane Morris Takeaways: On September 6, 2024, in Hamm v. Acadia Healthcare Co., Inc., No. 20-CV-1515, 2024 U.S. Dist. LEXIS 160319 (E.D. La. Sept. 6, 2024), Judge Susie Morgan of the U.S. District Court for the Eastern District of Louisiana denied Acadia LaPlace Holdings, LLC and Oschner-Acadia, LLC’s (“Acadia”) motion to decertify Plaintiffs’ Fair Labor Standards Act (“FLSA”) collective action in a suit accusing the hospital operator of failing to pay nurses for interrupted meal breaks. After the Court previously certified the collective action by applying the rigorous standard from Swales v. KLLM Transport Services, LLC, 985 F.3d 430, 441 (5th Cir. 2021), Acadia moved to decertify the collective by claiming the workers are too dissimilar for collective-wide treatment. However, the Court ruled that Acadia’s request to decertify was improper at this late stage in the litigation considering that the Court previously certified the collective action after providing the parties with the opportunity to conduct preliminary discovery and fully brief the issue. This ruling indicates that, although the Fifth Circuit has not ruled on whether a defendant can bring a motion to decertify after certification has been granted, this issue is becoming ripe for appellate review.

Case Background

Acadia is a leading provider of behavioral healthcare services that operates a network of approximately 250 facilities in thirty-eight states and Puerto Rico. Acadia previously employed Plaintiffs Amy Hamm and Joye Wilson as nurses at hospitals it operated in Texas and Louisiana. Hamm, 2024 U.S. Dist. LEXIS 160319, at *3. On May 22, 2020, Plaintiffs filed a complaint alleging Acadia violated the FLSA and Louisiana state law by failing to pay overtime compensation for on-duty meal periods and off-the-clock work. Id. Specifically, the two former workers claimed the hospital operator automatically deducted 30 minutes from the nurses’ paychecks for meal breaks despite constant interruptions and the requirement to remain on call to respond to potential emergencies during the breaks. Id.

On March 7, 2022, Plaintiffs moved for certification of their FLSA claims as a collective action, but prior to hearing Plaintiffs’ motion, the Court found that “limited discovery [was] needed” to evaluate “whether the employees in [the] proposed collective action [were] similarly situated” within the meaning of Section 216(b) of the FLSA. Id. Ultimately, after conducting the limited discovery, the Court partially granted Plaintiffs’ motion to certify, and on July 13, 2022, defined the collective action to include all current and former hourly, non-exempt employees directly involved with patient care — such as nurses, nursing staff, aides and technicians — who worked for Acadia between May 2017 through the date of the dispute’s resolution. Acadia later filed its motion to decertify Plaintiffs’ collective action, arguing that the named and opt-in plaintiffs were not sufficiently similar to be combined into a collective action because of differences between the jobs, meal break experiences, and the claims alleged by the Plaintiffs and the potential opt-in members. Id. at *4.

The Court’s Decision

Until January 2021, district courts within the Fifth Circuit generally applied the test derived from Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987),during the certification process for FLSA collective actions. The Lusardi test divided the notice and class certification process into two steps. In the first step, referred to as “conditional certification,” the court determined whether the proposed opt-in plaintiffs and the named plaintiffs were similarly situated. Hamm, 2024 U.S. Dist. LEXIS 160319, at *5. The plaintiff’s burden at this step was minimal, and as such, most collective actions are typically certified. Id. The second step, which occurrs at the conclusion of discovery, and was often prompted by a motion to decertify by the defendant, requires a more rigorous determination of whether the named plaintiffs and the opt-in plaintiffs were similarly situated. Id. If not, the named plaintiffs could only bring the lawsuit on their individual behalf, not on behalf of the opt-in plaintiffs. Id. at *6.

The Fifth Circuit rejected the Lusardi approach in Swales, and now district courts within the Fifth Circuit are instructed to “rigorously scrutinize” whether the named plaintiffs and potential opt-in plaintiffs are sufficiently similar to each other at the outset of litigation, before potential opt-in plaintiffs can be notified of the FLSA action. Id. Courts in the Fifth Circuit now identify what facts and legal considerations are material to making the “similarly situated” determination and authorize preliminary discovery accordingly. Id. The Swales decision further directs courts to make the certification decision “as early as possible.” Id.

In Acadia’s motion to decertify, it asked the Court to undertake a post-discovery decertification inquiry reminiscent of the second stage of the Lusardi test. Id. at *9. Specifically, Acadia argued that evidence obtained during the preliminary discovery phase revealed differences between the jobs, meal break experiences, and claims of Plaintiffs and opt-in members, and established that the members of the collective action were not “similarly situated” under Section 216(b). Id. at *10. In response, Plaintiffs argued that Acadia’s motion was moot because the Court already declared Plaintiffs were similarly situated under the rigorous Swales approach, and certified the FLSA collective action. Id. at *11. In its reply, Acadia advanced a proposition that “[a]t the decertification stage, even post-Swales, it is still Plaintiffs’ burden to prove and maintain through the litigation that the collective members are similarly situated.” Id. Acadia argued that using the Swales framework in lieu of the Lusardi two-step process does not mean defendants forfeit their ability to later seek decertification. Id. at *13.

Ultimately, Judge Morgan ruled that Acadia’s motion to decertify came too late and that “to allow such a motion would be a waste of judicial resources.” Id. The Court reasoned that once certified under the Swales framework, after an opportunity to conduct preliminary discovery and fully brief the issues, there is no justification for a motion to decertify. Id. Although the Fifth Circuit has not yet ruled on whether a defendant may bring a motion to decertify after the initial certification of an FLSA collective action under the Swales framework, Judge Morgan opined that the Swales decision was not intended to allow this. Id. at *14. 

Implications For Employers

The Hamm ruling provides guidance to employers with operations in the Fifth Circuit as to how a court will treat a motion to decertify filed after the court has granted certification utilizing the Swales standard. Moving forward, employers in the Fifth Circuit should aim to break up a proposed collective action during the fact-intensive certification process conducted towards the beginning of the litigation. Courts are unlikely to require plaintiffs to maintain, throughout the litigation, that collective members are similarly situated. Corporate counsel should take note that “conditional certification” remains non-existent in the Fifth Circuit, and once a court considers all available evidence to grant Section 216(b) certification, it is unlikely to revisit the issue.

By Alex W. Karasik, Gerald L. Maatman, Jr., and Jennifer A. Riley

Duane Morris Takeaways:  In Vest Monroe, LLC v. Doe, No. S23G1224, 2024 Ga. LEXIS 187 (Ga. Sept. 4, 2024), the George Supreme Court reversed the Georgia Court of Appeals and held that a trial court did not abuse its discretion when it denied class certification in a data breach class action lawsuit alleging that a health facility failed to protect patients’ sensitive information.  The trial court originally ruled that Plaintiff failed to establish the elements of typicality and commonality, since the named Plaintiff did not suffer the same harm as the putative class that he sought to represent. The Georgia Supreme Court vacated a holding by the Georgia Court of Appeals that parted ways with the trial court.

For businesses that are embroiled in the rapidly evolving data breach class action litigation arena, this case provides valuable insight regarding how companies can oppose motions for class certification.

Case Background

Plaintiff received treatment at Ridgeview Institute – Monroe, a behavioral health and addiction treatment facility.  After an employee at the facility was terminated, the employee contacted Plaintiff’s counsel of record in a medical malpractice case pending against Ridgeview and provided the attorney with digital copies of documents and recordings that she obtained from Ridgeview.  Id. at *3.  After becoming aware of the disclosure of the patient information, Ridgeview discovered that information pertaining to nearly 2,000 patients was compromised.

In March 2020, Defendants filed a lawsuit against the former employee in federal court, which ultimately enjoined the former employee and her counsel from further dissemination of the Ridgeview documents, and ordered her to delete the material in her possession.  Defendants also notified all potentially affected individuals of the incident.  In November 2020, after receiving notice of the incident, Plaintiff filed a class action complaint against Defendants, asserting a number of claims related to the unauthorized disclosure of patient information. 

Plaintiff moved for class certification in March 2022.  The trial court denied Plaintiff’s motion for class certification on the grounds that Plaintiff failed to establish either the required elements of commonality or typicality under OCGA § 9-11-23 (a).  In finding a lack of commonality, the trial court noted the differences in the type of documents disclosed with respect to members of the proposed class, as some contained diagnosis and treatment information, while others did not.  Id. at *4.  Relatedly, the trial court concluded that Plaintiff’s claims did not satisfy the element of typicality because some members of the proposed class had clinical information revealed, while Plaintiff did not.

Plaintiff appealed, and the Georgia Court of Appeals reversed the trial court’s decision.  The Court of Appeals rejected the trial court’s findings on commonality and typicality,  and instead concluded that with respect to typicality, Plaintiff’s claims and those of the putative class arose “from the same alleged events” and were “based on the same legal theories.”  Id. at *6. 

The Georgia Supreme Court thereafter granted review to consider whether the trial court abused its discretion by finding that the putative class lacked commonality and typicality under OCGA § 9-11-23 (a).

The Georgia Supreme Court’s Decision

The Georgia Supreme Court reversed the Court of Appeals’ decision and held that the trial court acted within its discretion in finding a lack of typicality. 

First, the Georgia Supreme Court opined that the trial court’s order reflected that it conducted the rigorous analysis contemplated by OCGA § 9-11-23.10.  For instance, in its order denyingclass certification, the trial court explained that the OCGA § 9-11-23 (a)(3) typicality requirement directs that the class representative “possess the same interest and suffer the same injury as the classmembers,” and that the pertinent inquiry is “whether asufficient nexus exists between the claims of the namedrepresentatives and those of the class at large.”  Id. at *9-10.  The trialcourt further recognized that it was Plaintiff’s burden to prove that class certification wasappropriate and must do so by introducing affirmative evidence.  Agreeing with the trial court, the Georgia Supreme Court held that Plaintiff failed to fulfill this burden.

Second, the Georgia Supreme Court held that the trial court did not rely on incorrect facts in determining that typicality was lacking.  Pertinent to its assessment of typicality, the trial court found that the former employee who was responsible for the breach had access to information that had no relationship to her job duties, including patient files, many of which contained significant sensitive medical information.  Id. at *10-11.  The trial court also highlighted the undisputed fact that no diagnosis or treatment information related to Plaintiff was revealed.  Accordingly, the Georgia Supreme Court reasoned that the trial court properly concluded that Plaintiff’s claims “do not represent the claims of all of the proposed class members because some of [the patients had] clinical information revealed whereas [Plaintiff] has not” which “leads to factual and legal differences between the claims in the case.”  Id. at *13.

Finally, the Georgia Supreme Court noted that in reviewing the trial court’s findings with respect to typicality, the question before the Court of Appeals was whether the trial court’s analysis as to typicality fell “within the range of possible outcomes” permissible on abuse-of-discretion review “in which there could be room for reasonable and experienced minds to differ.”  Id. at *16 (citations omitted).  The Georgia Supreme Court held that, “because the trial court’s typicality determination was made in conformity with the governing legal principles, was not based on incorrect or irrelevant facts, and was within the reasonable range of possible outcomes, we cannot say that the trial court abused its discretion by finding a lack of typicality and denying [Plaintiff’s] motion for class certification on that basis.”  Id. at *16-17.  Accordingly, it held that the Court of Appeals erred in determining that the trial court wrongly failed to certify the class on the basis of typicality, and reversed the Court of Appeals’ decision. 

Implications For Businesses

For employers and consumer-facing businesses, data breach class action litigation is near or at the top of nearly every company’s “biggest risk” list.  When breaches do occur, there is a strong likelihood that a class action lawsuit will follow.

Fortunately, this decision provides a blueprint for one avenue to attack class certification — the element of typicality.  It is conceivable that many other data breach class action named plaintiffs, like Plaintiff here, will not have suffered the same harm as the putative class.  Accordingly, data breach class action defendants would be prudent to explore the potential factual differences between the named Plaintiff and the putative class to strengthen this defense.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Kathryn Brown with their discussion of key rulings issued in WARN Act class action litigation over the past year, and the notable challenges for employers defending WARN Act claims in the wake of the COVID-19 pandemic and the rise of remote work.

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 Kathryn Brown. Thank you so much for being on the podcast, Kathryn.

Kathryn Brown: Great to be here, thanks for having me.

Jennifer: Today we wanted to discuss trends and important developments in class action litigation involving the Worker Adjustment and Retraining Notification Act, or the WARN Act. Class actions brought under the WARN Act remain an area of key focus for skilled class action litigators in the plaintiffs’ bar. Unlike the flood of cases we saw in 2022 examining the WARN Act in the context of the COVID-19 pandemic, the significant decisions in 2023 examined more foundational concepts under WARN in a variety of factual contexts. In sum, despite that shift, the WARN Act remains a high stakes fuel for class action litigation. Kathryn, can you explain to our listeners some of the requirements for employers under the WARN Act?

Kathryn: Sure, so the WARN Act requires employers to give written notice to affected employees at least 60 days before conducting a plant closing or mass layoff at a single site of employment. The WARN Act defines a plant closing as the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, where the shutdown results in a defined employment loss during any 30-day period for at least 50 full-time employees. The WARN Act defines a mass layoff as a reduction in force that is not a plant closing, and that results in an employment loss at a single site of employment during any 30-day period for at least 50 full-time employees who constitute at least 33% of the active full-time employees at that single site of employment, or where 500 or more full-time employees at a single site of employment suffer employment losses during any 30-day period. The WARN Act regulations require aggregation of employment losses at a single site of employment during a rolling 90-day period, thereby in essence extending the statute’s 30-day period to 90 days.

Jennifer: Thanks so much for that overview. Can you speak to how often courts grant a class certification in these types of class Actions?

Kathryn: Yes. So, in 2023 plaintiffs’ lawyers achieved somewhat mixed results in their efforts to secure class certification in WARN Act cases. Overall, plaintiffs won a slight majority of class certification motions filed in WARN Act cases obtaining certification in 54% of the motions and with courts denying certification 46% of the time.

Jennifer: Wow, that sounds high, but that’s actually a big contrast to 2022 when courts granted class certification in 100% of WARN Act class actions. We track those numbers in the Duane Morris Class Action Review. What were some of the most significant rulings in WARN Act class actions over the past 12 months?

Kathryn: Well, one of the significant class certification rulings of the past year was Igarashi v. H.I.S. Guam, Inc., a WARN Act claim brought in the District Court for the Island of Guam. The plaintiff filed a class action alleging that the defendant, a travel service agency, violated the WARN Act when the plaintiff and other employees were terminated without 60 days advance notice. The plaintiff filed a motion for class certification pursuant to Rule 23, and the court granted the motion. The court found that the class met the numerosity requirements under Rule 23(a)(1), as there were approximately 96 employees affected by the mass termination. Likewise, the court found the class met the commonality requirement under Rule 23(a)(2). The court concluded that the plaintiff sufficiently demonstrated the existence of common questions of law and fact, including whether under the WARN Act: (i) the defendant is a covered employer; (ii) the class members were covered employees; (iii) the employees suffered a covered employment loss through a covered mass layoff; and finally (iv) there was a failure to issue the required 60 day written notice. The court also determined that typicality was met under Rule 23(a)(3) because the plaintiff and other class members experienced the same injury and the same course of conduct, i.e. a mass termination without the required WARN Act notice resulting in employment loss. The court also found that the Rule 23(a)(4) requirement for adequacy of representation was also satisfied. For the analysis of the Rule 23(b) factors, the court opined that common questions of fact predominated, because the issues were identical to each employee, because they all received the same separation notice, and any justification offered by the defendant for failing to provide a 60 day notice applied to each proposed class member. The court reasoned that common questions of law also predominated, including whether the WARN Act applied to the defendant’s mass layoff and whether the defendant was exempt from the requirements of the WARN Act. As to the superiority requirement, the court ruled that a class action would be the superior method of adjudication, because each proposed class member would also be analyzed under the same statutorily defined compensation framework under the WARN Act statute. Therefore, the court concluded that judicial economy would be served by certifying the class. So that’s one of the important rulings we saw in the past year.

Jennifer: Thanks so much, Kathryn, for that overview. The question as to what the single site of employment means for employees who work from home has become an increasingly significant issue with the dramatic rise of remote work, a trend that may well become a permanent fixture in the modern workplace. Do you have any examples of rulings addressing that question?

Kathryn: Yes, so under the WARN Act a plant closing is defined as the shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment. The DOL’s regulations implementing the WARN Act define the terms single side of employment and operating unit. But the definitions are far from bright lined. So in a recent Second Circuit opinion, we can see how this question is addressed, and how it will continue to be a hot button issue. In the case of Roberts v. Genting N.Y., LLC, the Second Circuit Court of Appeals allowed a class action lawsuit by former employees of a buffet restaurant within a casino to proceed under the WARN Act and corresponding New York law on the basis that a question of fact existed as to whether the buffet was a covered operating unit under the WARN Act, which would entitle the employees to 60 days advance notice before the closing of the buffet. The plaintiffs, a group of 177 former employees, were provided no notice when the defendant casino closed the buffet located inside the casino where the plaintiffs worked. After both parties moved for summary judgment, the district court granted the defendant’s motion, dismissing the employees claims under the WARN Act, because it found that the buffet was neither a single site of employment nor an operating unit within a single site of employment as required to trigger the notice requirements under the WARN Act. In reaching this conclusion, the district court primarily focused on the fact that the buffet was dependent upon the casino’s centralized services. So in reversing the district court’s grant of summary judgment, the Second Circuit Court of Appeals concluded that whether the buffet could operate independent from the casino was not dispositive in deciding if it was operationally or organizationally distinct particularly in light, of the DOL’s inclusion of entities, such as housekeeping and its illustrative examples of operating units in the WARN Act regulations. The Second Circuit detailed several differences between the buffet employees and other employees of the casino that could evidence the status of the buffet as a distinct operating unit for purposes of WARN, such as employee uniforms that were particular to the buffet and managers that worked only for the buffet. In doing so, the Second Circuit gave no special weight to a collective bargaining agreement which did not identify the buffet as a separate department, division, or unit within the larger casino. Viewing the evidence as a whole, the Second Circuit found that the record before the district court did not clearly establish that the buffet was not an operating unit for WARN Act purposes. Therefore, the Second Circuit concluded that neither party was entitled to summary judgment, sending the case back to the district court for a trier of fact ultimately to decide.

Jennifer: Great insights and analysis, Kathryn, thank you so much for being here today and for sharing this information. I know that these are only some of the cases that had interesting rulings in 2023, in WARN Act class actions – 2024 is sure to give us some additional insights into the ways that class actions are evolving in the WARN Act space. Thanks so much for our audience for tuning in today, and we will see you next week on the Class Action Weekly Wire.

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Kathryn Brown

Duane Morris Takeaways: On June 3, 2024, in Albright et al v. Ascension Michigan et al, No. 23-1996 (6th Cir. June 3, 2024), a three-judge panel of the Sixth Circuit reversed and remanded a district court’s approval of a nationwide class action settlement because the plaintiffs lacked Article III standing. The case illustrates the fundamental requirement of federal court jurisdiction that all named plaintiffs have an alleged injury traceable to the settling defendants. The decision is required reading for litigants seeking court approval of a Rule 23 class action settlement.

Case Background

On July 12, 2022, over 100 current or former employees sued the Michigan-based Ascension healthcare organization for alleged violations of Title VII and Michigan state law occurring at its Michigan hospitals. The plaintiffs claimed that the defendant entities discriminated against them based on religion and unlawfully denied their request for a religious exemption from the organization’s mandatory COVID-19 vaccination policy. The plaintiffs sought to represent a Rule 23 class of solely-Michigan-based workers.

On April 24, 2023, the parties jointly moved the U.S. District Court for the Western District of Michigan for preliminary approval of a Rule 23 settlement. In the proposed settlement agreement, the settling parties expanded the scope of the lawsuit to the parent company of the Michigan defendant entities and 24 affiliate hospitals, clinics, and other entities in Alabama, Washington, D.C., Indiana, Kansas, Maryland, Michigan, Missouri, New York, Oklahoma, Texas, Tennessee and Wisconsin. Two days later, the district court preliminarily approved the settlement and issuance of notice to the class.

The settling parties filed an amended complaint to facilitate the proposed nationwide class action settlement of claims challenging the mandatory vaccination policy in place at Ascension’s various entities. The amended complaint reflected the same Michigan-based plaintiffs as the original complaint.

About 2,700 of the 4,000 workers who received notice opted-in to the settlement, with 281 workers opting out. Nine opt-ins who had worked for the newly-added entities objected to the settlement on August 23, 2023.

After a final fairness hearing held on October 5, 2023, the district court granted the settling parties’ motion for final approval of the settlement on November 2, 2023 over the objections of the nine objectors.

The objectors filed two notices of appeal to the Sixth Circuit, which were consolidated together. In addition to opposing the settlement on standing grounds, the objectors argued that, by expanding the scope of the settlement class to a nationwide group, the proposed settlement diluted the value of back pay payouts each class member would receive.

The Sixth Circuit’s Ruling

The panel judges of the Sixth Circuit, in a brief unpublished opinion, unanimously ruled that the settlement failed on standing grounds.

For Article III standing to exist, the defendant’s alleged actions must have caused the plaintiff to suffer a concrete “injury-in-fact.” In a class action, for any defendant, at least one named plaintiff must have an injury traceable to the defendant.

Writing for the panel, Circuit Judge Cole reasoned that the named plaintiffs had no injury traceable to the 25 entities added to the lawsuit for settlement purposes. In expanding the scope of the defending entities without “add[ing] any new named plaintiffs to match the additional affiliate defendants,” the settling parties failed to establish subject matter jurisdiction for the district court to approve the settlement. Id. at 3.

Absent standing, the Sixth Circuit concluded that the 95 Michigan-based named plaintiffs could not settle claims on behalf of thousands of other employees who had worked for Ascension entities outside of Michigan.

Accordingly, the Sixth Circuit vacated the district court’s orders approving the class-wide settlement, certifying the settlement class, and awarding attorneys’ fees and expenses to plaintiffs’ counsel. The Sixth Circuit remanded the case to the district court for further proceedings.

Implications For Employers

The ruling in Ascension illustrates that standing challenges to putative class actions are a powerful tool not only at the pleading stage, but at all phases of class action litigation.

Prior to resolving any Rule 23 claims — particularly for nationwide settlements — it is essential for counsel defending class actions to vet the standing of each named plaintiff. Otherwise, just as the litigants in Ascension experienced, even a settlement approved in final form by a district court is vulnerable to being unraveled on appeal.

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

Duane Morris Takeaway: In its review of the Duane Morris Class Action Review – 2024, EPLiC Magazine called it the “the Bible” on class action litigation and an essential desk reference for business executives, corporate counsel, and human resources professionals.

We are humbled and honored by the recent review of the Duane Morris Class Action Review – 2024 by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here.

EPLiC said that “The Review must-have resource for in-depth analysis of class actions in general and workplace litigation in particular.”

EPLiC continued that “The Duane Morris Class Action Review analyzes class action trends, decisions, and settlements in all areas impacting corporate America and provides insight as to what companies and corporate counsel can expect to see in 2023 in terms of filings by the plaintiffs’ class action bar and governmental enforcement agencies likes the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL).”

So how do we do it?

The answer is pretty simple – we live, eat, and breathe class action law 24/7/365.

Every day, morning, and evening, we check the previous day’s filings of class action rulings relative to antitrust class actions, appeals in class actions, arbitration issues in class actions, Class Action Fairness Act issues in class actions, civil rights class actions, consumer fraud class actions, data breach class actions, EEOC-initiated litigation, employment discrimination class actions, Employee Retirement Income Security Act class actions, Fair Credit Reporting Act class actions, wage & hour class actions, labor class actions, privacy class actions, procedural issues in class actions, product liability & mass tort class actions, Racketeer Influenced and Corrupt Organization Act class actions, securities fraud class actions, settlement issues in class actions, state court class actions, Telephone Consumer Protection Act class actions, and Worker Adjustment and Retraining Act class actions. The Review also has focused appendices on significant sanctions in class actions, the largest attorneys’ fee awards, major settlements across all areas of litigation, the Illinois Biometric Information Privacy Act and the California Private Attorneys General Act.

We conduct due diligence reviews on a national basis for all of these areas, in both federal courts and in the courts of all 50 states. Then we read and analyze every ruling on Rule 23 certification motions and subsidiary issues throughout federal and state trial and appellate courts. The information is organized in our customized database, which is used to provide the Review’s one-of-a-kind analysis and commentary.

The result is a compendium of class action law unlike any other. Thanks for the kudos EPLiC – we sincerely appreciate it!

We look forward to providing the 2025 Review to all of our loyal readers in early January. In the meantime, check out our first-ever 2024 1st Quarter Class Action Settlement Review blog post here!

By Gerald L. Maatman, Jr., Jennifer A. Riley, Greg Slotnick, and Maria Caceres-Boneau

Duane Morris Takeaways: On May 6, 2024, the Beard Group sponsored the Class Action Money & Ethics Conference in New York City. The agenda is here. During the conference, over 150 attendees discussed key issues impacting class action litigation in 2024. We were privileged to chair the Conference and present the keynote address on class action litigation trends for the past year and what 2024 has in store for Corporate America. The discussion at the program underscores the cutting-edge issues facing companies in this area of law.

Key Trends For The Past Year

In our keynote address, we discussed the top ten developments in the class action litigation space. The leading trends center on the new era of heightened risks and elevated exposures that pivot on record-breaking settlement numbers; the high conversion numbers for class certification motions into certified classes, and the rise in privacy and data breach class actions.

On the settlement front, 2022 saw $66 billion in total proceeds when measured by the top ten settlements in all areas of law. In 2023, that figure totaled $51 billion, for a combined total of $117 billion over the past 24 months.

The pace of class action settlements thus far in 2024 shows no signs of slowing down. In the first four months of the year, three settlements of over $1 billion are in the books and the total (just for the top five settlements in each area) are at $19.8 billion.

In terms of class certification motions, the Plaintiffs bar successfully secured certification in 74% of cases over the past year. Those figures ranged from nearly 97% in securities fraud lawsuits to 14% in data breach cases. That said, the plaintiffs’ bar has proven its track record to convert class action lawsuit filings in to certified classes at a high rate.

In the privacy and data breach space, such claims became ubiquitous in 2023, with a virtual explosion in those types of lawsuits. While certification rates were quite low in data breach situations, the plaintiffs’ bar secured certification in privacy class actions at a higher rate.

Data Breach Panel

An interesting panel discussion – consisting primarily of plaintiffs’ lawyers – ensued after the keynote address on wiretapping class claims under the Video Privacy Protection Act and data privacy class action litigation. They reflected on the patchwork quilt of rulings in these areas over the past year and the low certification rates due to problems in surmounting standing issues based on lack of injury-in-fact showings.

The panelists predicted a subtle shift in privacy and data breach lawsuits to effectuate a “work around” to these impediments. Multiple plaintiffs’ counsel predicted more reliance on state law claims and litigation of class-wide claims in state court.

Panel On Use Of Qualified Settlement Funds

A panel of plaintiffs and defense lawyers addressed best practices in establishing and working on class-wide settlement with qualified settlement funds (QSF).

Several settlement administrators joined the panel and discussed new challenges in handling QSF funds posed by fraud (both by claimants and cyber criminals), as well as better interest rates that result in generation of more money for distribution.

Panel On Class Notice Strategies

The next panel focused on trends for class notice in 2024 and how artificial intelligence is now mainstream in terms of its use to facilitate the notice send to class members. The panelists expressed how these practices are quite innovative and rapidly evolving. Notice through social media and/or texts or email also is considerable cheaper than U.S. Mail, which is driving down settlement administration costs.

The challenge, however, is to prevent fraudulent claims from individuals seeking a share of the settlement pot. As to take rates, social media advertising is driving the rates upward, but the rates in data breach cases remain low at 2% to 5% (as compared to other types of settlements).- Class member demographics also impact the take rate, as older individuals are apt to view social media notice as “junk mail” or a scam. Conversely, staying ahead of fraudsters has created an imperative for settlement administrators (e.g., where settlement shares are claimed by an IP address of a bot).

Panel On Fraud In The Class Action Process

Another panel discussed the rise of fraudsters in the class action space. Some involve “deep fakes” of persons who seek to assert false claims as named plaintiffs or class members. Others involve cyber-criminals who infiltrate the settlement administration process and seek class settlement shares on a false basis.

Judicial responses have run the gamut from shutting down the settlement administration process and rebooting it with enhanced security measures to referrals to law enforcement personnel to combat fraud. Panelists predicted that judges are apt to ratchet up the scrutiny of final settlement approval of class actions, and possibly promote direct mail notice over digital communications.

ESG Class Action Litigation Panel

Class actions over environmental. social, and governance issues went mainstream in the past year. Panelists tracking these cases predicted that ESG class actions will continue to increase, especially as the plaintiffs’ bar refines their theories of recovery and begin to monetize their claims.

in particular, securities fraud class actions over DEI commitments are increasing as a result of the U.S. Supreme Court’s recent decision in Students For Fair Admissions, Inc., et al. v. President And Fellows Of Harvard College, Case No. 20-1199 (U.S. June 29, 2023). Both plaintiffs’ lawyers and defense counsel anticipate more litigation in this space.

Panel On “Lead Generation” Techniques In Mass Torts & Class Actions

The final panel explored new strategies utilized by the plaintiffs’ bar in reaching out to potential litigants in mass tort and class action litigation situations. The numbers behind the advertising – on television, social media, and radio – top $1.1 billion on an annual basis. On average, plaintiffs’ law firms run over 45,000 advertisements per day across the country with mass tort cases constituting the majority of ad placements.

The panelists opined that nuclear verdicts, large class action settlements, and social inflations are the main factors fueling the advertising. They concluded that these forms of advertising are a staple of the litigation system and not going away anytime soon.

Implications For Companies

Class action litigation is a fact of life for corporations operating in the United States. Today’s conference underscored that change is inevitable, and class actions litigation is no exception.

Duane Morris Takeaway: Join Duane Morris attorneys in Chicago for this special event! Duane Morris’ annual Developments in Workplace Law and Practice seminar series provides our clients and friends with a comprehensive update of important employment, labor relations, benefits and immigration law developments over the past year, as well as imminent changes that may seriously impact their businesses. Emphasis is placed on understanding the practical implications of these developments and the key strategies that immediately can be implemented to deal with them efficiently and effectively. This session encourages lively, thought-provoking discussions. Participants will have the opportunity to network with their peers and the presenters before and after the event. The program is of particular interest to business owners and executives, in-house counsel and HR professionals.

This program is open to all – click here to attend in person!

About the Chicago Program

Join Dan Canales, Alex Karasik, Jennifer Long, Jerry Maatman, John Reade, Jen Riley, Lisa Spiegel and Brandon Spurlock for a discussion of the following topics:

What’s New for Illinois Employers in 2024 and Beyond?

Hear all about current updates for Illinois employers including the latest regulatory guidance on mandatory paid leave requirements, how to prepare for mandatory pay transparency requirements beginning in 2025, the latest requirements impacting employers using temporary labor, and other anticipated employee-friendly changes in the legislative pipeline for 2025 and beyond.

Learn how recent federal developments impact your employment practices, including the Department of Labor’s regulatory action on independent contractor and employee misclassification, the NLRB’s recent regulatory action on joint employer issues, how OSHA’s new union representative walkaround rule impacts non-union employers, and other nationwide trends in state and local legislation.

Class Action Review: Top Developments Employers Should Expect for 2024 and Beyond

Class action litigation presents one of the most significant risks to corporations today. Learn the latest highlights in class action trends, decisions and settlements in crucial areas impacting Corporate America, including civil rights, employment discrimination, wage payment, labor and other class and collective actions brought by current and former employees. We will also share our insight on what companies and corporate counsel can expect to see in 2024 and beyond.

Digital Developments: What Businesses Need to Know About AI, Privacy and Data Breach Class Actions

Emerging technologies such as AI, biometric timekeeping software and cloud storage of data have exploded onto the scene of the modern workplace. Hear the latest developments about:

• How employers are handling the emergence of AI
• How courts are adjudicating privacy class actions following two major Illinois Supreme Court decisions involving the Biometric Information Privacy Act (BIPA)
• What employers need to know about the latest trend in class action litigation: data breach claims

Employee Benefits Update

The rules governing employee benefit plans are always changing and it is no different in 2024. We will discuss the biggest issues that employers should keep in mind this year – including:

• Health and welfare plan fiduciary developments
• Recent guidance under SECURE 2.0 that impacts all 401(k) plan
• Updates on ERISA retirement plan litigation and the steps that employers can take to minimize their potential exposure

The Latest Updates for Employers on Immigration Sponsorship and Immigration Related Investigations

Employer sponsorship of employees for work authorization and green cards can be a long, complex process. Over time, organizations, jobs, locations, and employees all change. Learn what rights employers have during the sponsorship process to stop, change or redirect sponsorship efforts and how those decisions will impact the sponsored employees.

USCIS, ICE and the DOJ regularly investigate employers for immigration-related compliance during visa sponsorship, and immigration-related discrimination during the I-9 and E-Verify processes. These investigations can be onerous with unexpected government visits to employer locations, large document productions and significant fines for civil liability. Get the latest updates for employer compliance in these situations.

Sign up today and join us at this important event!