General – Class Action Defense

June 2, 2026June 2, 2026 by Gerald L. Maatman, Jr.

Oregon Federal Court Denies Class Certification Due To The Impact Of Unique Defenses On The Named Plaintiffs

By Gerald L. Maatman, Jr., Jennifer A. Riley, Katherine L. Alphonso, and Jamar D. Davis

Duane Morris Takeaways: On May 28, 2026, in Ashley Schroeder et al. v. University of Oregon, Case No. 6:23-CV-01806, 2026 WL 1494043 (D. Or. May 28, 2026), Judge Michael J. McShane of the U.S. District Court for the District of Oregon – without deciding whether the University of Oregon adequately supports or invests in women athletics – reaffirmed that the typicality requirement for class certification cannot be met when “there is a danger that absent class members will suffer if their representative is preoccupied” with its own unique defenses. The ruling is a significant one for corporate counsel and provides a blueprint for defense of class action claims.

Case Background

In the 2000s, particularly at the collegiate level and among Division 1 institutions in warm-weather conferences, beach volleyball was a rapidly growing sport. Id. at *2. In 2009, the National Collegiate Athletic Association (“NCAA”), under its Emerging Sports for Women program, designated women’s beach volleyball an “emerging sport” for women. Id. Notably, the NCAA Emerging Sports for Women program was designed to encourage schools to create more opportunities for women’s athletic participation to meet the requirements of Title IX of the Education Amendment of 1972 (“Title IX”). Id.

As a state educational institution, the University of Oregon (the “University”) receives federal funds and is therefore subject to Title IX requirements. Id. at *1. In 2013, the University’s athletic department announced the addition of women’s volleyball to its roster of varsity teams. Id. at *2. Since its announcement, the University has worked to approve new beach volleyball facilities, provide locker rooms, make scholarships available for recruitment, and hire a new coach. Id. It currently sponsors eight men’s varsity teams (baseball, basketball, cross country, football, golf, tennis, indoor track and field, and outdoor track and field) and twelve women’s varsity teams (acrobatics and tumbling, basketball, beach volleyball, cross country, golf, lacrosse, soccer, softball, tennis, indoor track and field, outdoor track and field, and (indoor) volleyball). Id. at *1. The University also hosts forty-one club sports teams, including but not limited to rowing, which operate outside of the school’s athletic department and are generally student organized. Id. at *1-2.

Plaintiffs — consisting of female student athletes attending the University, five of which are current or former members of the women’s beach volley team (“Beach Volleyball Plaintiffs”) and four of which are current or former members of the women’s club rowing team (“Rowing Plaintiffs”) — filed a complaint alleging the University continues to violate Title IX by depriving its female student-athletes of equal treatment, equal access to athletic financial aid permissible under federal law, and equal opportunities to participate in varsity athletics. Id. at *1.

In pursuit of their claims, Plaintiffs asked the Court to certify the following classes: (1) Equal Treatment and Benefits Class defined as “all current and future female students who participate or will participate in intercollegiate varsity athletics at [the University]”; (2) Damages Class for the Equal Treatment and Benefits claim; (3) Equal Financial Aid Class defined as “all current and future female students who participate or will participate in intercollegiate varsity athletics at [the University] and do not receive all athletic financial aid permissible under federal law”; (4) Damages Class for the Equal Financial Aid claim; and (5) Effective Accommodation Class defined as “all present and future female students at [the University] who are being deprived of the opportunity to participate on women’s varsity intercollegiate athletic teams.” Id. at *3-4.

The District Court’s Decision

Judge McShane denied class certification for four of the five requested classes, namely the Equal Treatment and Benefits Class, both Damages Classes, and the Effective Accommodation Class. Id. at *5-8. The Court stayed its class certification consideration as to the Equal Financial Aid Class pending final disposition of the underlying claim on its merits. Id. at *4-5.

With regards to the Equal Treatment and Benefits Class, the Court held Federal Rule of Civil Procedure 23(a)’s typicality requirement ultimately prevented certification of the class. Id. at *6. While factual variations between a named plaintiff and proposed class members do not per se defeat typicality, typicality cannot be met when “there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.” Id. at *6 (internal citation omitted).

Here, rather than discussing all purported class members, Plaintiffs focused almost exclusively on the unique experiences of the Beach Volleyball Plaintiffs. Id. For example, unlike most of the other women’s varsity teams, the beach volleyball team practiced and competed off campus; until September 2025, the beach volleyball team was the only varsity team without its own locker room; and the beach volleyball team was the only varsity team without a dedicated full-time head coach who was not also coaching another team. Id. Moreover, the Beach Volleyball Plaintiffs “would need to address whether their participation in an ‘emerging’ varsity sport influences the merits of their Title IX claim.” Id. The Court expressed concern that addressing the unique experiences of the Beach Volleyball Plaintiffs would steal the focus of the litigation, creating an impermissible danger to absent class members. Id.

With regards to the two Damages Classes, the Court held a class action is not a superior method to litigate Plaintiffs’ damages claims because there are “too many distinct individual determinations that frustrate [class action] manageability. Id. at *7; see Fed. Rule of Civ. Prod. 23(b)(3). Again, the atypical experiences of the Beach Volleyball Plaintiffs would require individualized inquiry into any alleged liabilities and/or applicable remedies. Id. In addition, individualized inquiries would be needed “to determine which student-athletes were eligible for various forms of financial aid and the amount of aid they hypothetically would have received.” Id. This is only further complicated by “the University’s policy of allocating financial aid on a team-by-team basis and allowing coaches to make discretionary awards to student-athletes,” resulting in a requisite analysis into which student-athletes may have been eligible for aid but were not necessarily awarded scholarships because of other individualized considerations. Id.

With regards to the Effective Accommodation Class, the Court held the Rowing Plaintiffs were not members of the proposed class because they failed to demonstrate “they have the abilities to participate in varsity athletics . . . ” as their rowing times were markedly lower than the worst performing Division 1 rowing teams. Id. at *8 (emphasis in original). As such, Rowing Plaintiffs cannot be deprived of the opportunity to participate in varsity athletics. Id. Moreover, the Rowing Plaintiffs’ “inability to compete on a varsity level subjects them to a unique defense that defeats typicality.” Id. As mentioned above, rowing was a club sport operating outside of the school’s athletic department.

An interesting focus in the Court’s ruling was its dicta regarding the “proverbial elephant in the Title IX room” — men’s college football. Id. at *2. The Court reasoned that college football has evolved into a highly commercialized enterprise requiring investments—“extensive game-day operations and security; expansive locker room and training facilities; specialized coaching staffs numbering in the dozens; strength and conditioning programs; sports medicine and physical therapy personnel; recruiting operations; charter travel; housing and meal programs; academic tutoring; scholarships; and year-round training infrastructure” — comparative to the scale of its revenue. Id. at *2-3. Specifically, Title IX compliance cannot be measured solely on a dollar-for-dollar basis and must be “viewed across the athletic program as a whole.” Id. at *3.

Implications For Universities And Other Title IX Institutions

The Court’s message to the defense bar here is clear: continue to distinguish the named plaintiffs from the proposed class members (through factual distinctions, discrete issues, shortcomings on judicial efficiency, and unique defenses) as much as possible to oppose class certification. The opinion also provides helpful insight into how the statutory and regulatory framework of Title IX permits disparate expenditures among varying collegiate sports (namely men’s football when compared to other sports), serving as a defense into the extraordinary institutional investments associated with men’s college football that does not run counter to the aims of Title IX.

June 1, 2026June 1, 2026 by Gerald L. Maatman, Jr.

Fourth Circuit Closes Door On Third Party ERISA And WARN Act Class-Wide Liability

By Gerald L. Maatman, Jr., Rebecca S. Bjork, and Olga A. Romadin

Duane Morris Takeaways: On May 26, 2026, a unanimous panel of the U.S. Court of Appeals for the Fourth Circuit issued an opinion affirming a federal district court’s dismissal of a putative class action alleging violations of the Worker Adjustment and Retraining Notification (“WARN”) Act and the Employee Retirement Income Security Act (“ERISA”) in Tony Messer v. Garrison Investment Group, LP, No. 25-1657, 2026 WL 1465139 (4th Cir. May 26, 2026). Citing a 1996 U.S. Supreme Court decision, the Fourth Circuit ruled that the plaintiffs could not pursue a private equity firm they had voluntarily dismissed from their earlier suit for a judgment against their former employer because the district court had no jurisdiction over the firm.

Case Background

On October 19, 2018, plaintiffs, a group of several hundred former employees, brought a class action against Bristol Compressors International, LLC (“BCI”) and Garrison Investment Group LP, as BCI’s alter ego and successor, alleging that the manufacturer had failed to provide sufficient notice of the plant’s closure in violation of the WARN Act, and that it had failed to comply with ERISA in terminating the employee severance plan. Id. at *1. Following certification of three sub-classes and completion of discovery, Garrison moved for summary judgment, arguing that it could not be held vicariously liable for the actions of BCI. Id. Both Garrison and BCI also argued that the employee severance plan had been properly terminated, that members of a subclass had released their claims by signing an agreement, and that other workers had received proper notice of the plant closure under the WARN Act. Id. Plaintiffs moved to voluntarily dismiss Garrison without prejudice, citing conservation of resources, which Garrison opposed, predicting that if plaintiffs were unable to collect a judgment against BCI they would seek to collect it from Garrison instead. Id. at *2. The district court granted the plaintiffs’ motion to dismiss without prejudice. Id. Additionally, the district court granted partial summary judgment to BCI on the severance plan, and found that those workers who had signed an agreement releasing all of their claims against BCI could not participate in the suit. Id. At the subsequent trial on the remaining WARN Act claims, the district court found BCI liable, and awarded a judgment totaling $1,392,915.40, which, following an appeal to the Fourth Circuit and reversal of summary judgment on the severance plan, was increased to $4,078,105.11 on remand. Id.

In August 2024, unable to collect the judgement against BCI following its insolvency and dissolution, the plaintiffs brought an action against Garrison, its agents, owners, and related entities, alleging that it was BCI’s alter ego and seeking to pierce the corporate veil. Id. at *3. Plaintiffs argued that federal jurisdiction was proper because Garrison controlled BCI when it had violated federal laws, but the district court granted Garrison’s motion to dismiss, citing lack of subject matter jurisdiction as the judgement had been awarded against BCI following voluntary dismissal of Garrison from the earlier case, and, alternatively, finding that the statute of limitations. Id. The plaintiffs appealed.

The Fourth Circuit’s Decision

The Fourth Circuit determined that there was no federal question jurisdiction under 28 U.S.C. § 1331, and agreed with the district court’s interpretation of Peacock v. Thomas, 516 U.S. 349 (1996), where the U.S. Supreme Court found that federal courts do not have ancillary jurisdiction to impose liability over a party that was “not otherwise liable.” Id. at *3.

In, Peacock, an ERISA class action, the Supreme Court declined to extend subject matter jurisdiction over an officer and shareholder of the plaintiff’s former employer following a judgment of liability against the employer and determination that the officer and shareholder was a non-fiduciary third party and not liable for the judgement. Id. at *4. Noting that the Messer plaintiffs brought the action against Garrison “solely” because BCI could not pay, that no new violations were being alleged, and that neither ERISA nor the WARN Act impose liability on third parties, the Fourth Circuit found “no independent basis for subject matter jurisdiction.” Id. at *5. Further, the Fourth Circuit wrote that U.S. Department of Labor regulations explicitly “foreclose the applicability of duplicative theories of recovery such as piercing the corporate veil,” and the practice is disfavored both within the Fourth Circuit and other circuits. Id. at *5-6.

The Fourth Circuit was unconvinced by plaintiffs’ argument that their claims against Garrison were independent of its suit against BCI, which it dismissed on a brief overview of the record and conclusion that this was a mere attempt to piece the corporate veil in order to extend liability to Garrison. Id. at *6.

Finally, the Fourth Circuit, emphasizing the limited jurisdiction of federal courts, declined to exercise ancillary jurisdiction over the claims against Garrison on the grounds that the plaintiffs had voluntarily dismissed its claims against Garrison in their earlier suit, and proceeded to litigate exclusively against BCI, which in effect made BCI the only entity liable for the judgement. Id. at *7.

Implications For Employers

The Fourth Circuit’s decision in Messer highlights both the importance of maintaining practices that conform with applicable law, and proactive engagement with workforces who may fall under ERISA and the WARN Act when enacting reductions in force or similar measures. Key to this case, for example, was how employees were offered compensation in exchange for liability waivers. Further, this decision underscores how companies with outside ownership should consider the strategic advantage of litigating separately from affiliates, especially when risking joint and several liability.

June 1, 2026June 1, 2026 by Gerald L. Maatman, Jr.

Doctor’s Orders: Michigan Data Breach Class Action Dismissed Due To The CAFA’s Home-State Exception

By Gerald L. Maatman, Jr., George J. Schaller, and Denis Yavorskiy

Duane Morris Takeaways: On May 26, 2026, in Berven v. Sturgis Hosp., Inc., 25-CV-1142 (W.D. Mich. May 26, 2026), Judge Robert J. Jonker of the U.S. District Court for the Western District of Michigan dismissed two related data breach class actions for lack of subject matter jurisdiction, finding that the Class Action Fairness Act’s (“CAFA”) home-state exception prevented the Court from exercising jurisdiction over the cases.

The Court found that the defendant, Sturgis Hospital, Inc., carried its burden of proving that the CAFA’s home-state exception applied by demonstrating that it is more likely than not that over two-thirds of the class members are Michigan citizens. Sturgis Hospital’s records suggested that roughly 90% of its employees and former patients, the two populations impacted by the alleged data breach, reside in Michigan. Companies facing data breach and other class actions should consider similar ways to challenge jurisdiction by invoking the home-state exception.

Case Background

Plaintiffs Lavonna Berven and Paul Minor filed two related class actions against Sturgis Hospital asserting multiple “state law claims — negligence, negligence per se, breach of implied contract, unjust enrichment, and violations of the Michigan Consumer’s Protection Act” arising from an alleged data breach. Id. at *3. Plaintiffs alleged that they had “subject-matter jurisdiction under 28 U.S.C. 1332(d)(2), the CAFA provisions of the diversity jurisdiction statute.” Id.

Sturgis Hospital is a nonprofit hospital with its principal place of business in Sturgis, Michigan, near the Indiana border, and primarily employs and serves Michigan residents. Id. at *2. Sturgis Hospital collects “a home address” from every employee and patient that uses its services. Id. at *2, n 1. According to its records, “[r]oughly 90% of Sturgis’ employees reside in Michigan” and “since 2010, at least 90% of all patient visits to Sturgis were from individuals with a Michigan home address.” Id. at *2.

In September 2025, after detecting unauthorized activity in its computer network, the hospital sent “approximately 21,379 notice letters” to former patients and employees with “known addresses that were affected by the data breach.” Id. Of those notice letters “19,412—or 90.80%—were sent to individuals with Michigan addresses.” Id. Plaintiffs alleged a breach resulting in “an unauthorized third party” acquiring “Personal Identifying Information (PII) and Private Health Information (PHI)” of approximately 77,771 employees and former patients and sought to represent a purported class of those impacted. Id. Sturgis Hospital moved to dismiss both cases under the CAFA’s home-state exception.

The Court’s Decision

Judge Jonker dismissed both complaints, determining that Sturgis Hospital demonstrated “by a preponderance of evidence that the home-state exception applies[.]” Generally, under the “CAFA, federal courts have jurisdiction over class actions where: (1) any member of the class of Plaintiffs is a citizen of a different state than any defendant; (2) the class includes more than 100 putative class members; and (3) the aggregate amount in controversy exceeds $5,000,000.” Id. at *3-4 (emphasis in original). However, under the CAFA’s home-state exception, federal courts must “decline jurisdiction if ‘two-thirds or more of the members of all proposed plaintiff classes in the aggregate,’ and the primary defendants, ‘are citizens of the State in which the action was originally filed.’” Id. at *4 (quoting 28 U.S.C. § 1332(d)(4)(B)).

Judge Jonker noted that Sturgis Hospital did not need to prove the “actual citizenship of the class members” and instead had to show domicile, which turns on proof of residence and an intent to remain. Id. at *4. Sturgis Hospital produced a declaration from its CFO and COO to demonstrate, along with “over ten thousand pages of hospital records” that suggested that “roughly 90% of its employees and former patients — the only two populations affected by the data breach—reside in Michigan.” Id. These records, along with testimony, showed that between 2010 to 2025, the percent of Sturgis employees and former patients that resided in Michigan ranged from 89.55% to 92.15%., and from 93.96% to 95.80%, respectively. Id. at *5-6.

Judge Jonker found that this evidence “strongly suggest[ed]” that the “two populations affected by the data breach — resided, and were therefore presumptively domiciled, in Michigan.” Id. at *6. Further, Sturgis Hospital’s notice letter process was “even more persuasive[]” support, as testimony showed that the hospital mailed “approximately 21,379 notice letters to potential class members[,]” 90.8% of which “were sent to individuals with Michigan home-addresses.” Id. Considering this evidence, it was “easy for the Court to find Sturgis has shown that it is more likely than not that over two-thirds of the proposed class members are residents, and therefore citizens, of Michigan.” Id. at *6-7.

Plaintiffs attempted to “poke holes” in the records, claiming they are “are unreliable indicators of residence and citizenship” and that “the addresses of former patients may be faulty.” Id. at *7. Plaintiffs also argued that “the patient-visit data . . . does not fairly represent the class because it includes ‘repeat patients’ that may have sought care . . . multiple times and other individuals that may have not been affected by the breach.” Id. Judge Jonker was unpersuaded by Plaintiffs’ “speculations[.]” Sturgis Hospital “required their employees to provide a home address” and “asked patients to provide a home address at every visit,” and for those patients with multiple visits, it used “the most recent address provided.” Id. at *8. Additionally, before sending notice letters, the hospital “used a third-party vendor to check for address changes for everyone that had been identified as involved in the data breach.” Id. (emphasis in original). Judge Jonker found that these procedures in verifying address residence data “ensure[d] that residence data [was] reasonably accurate.” Id.

Judge Jonker also found that potential “double counting had a negligible impact” since “the percentage of patient visits from individuals with a Michigan address” and “the percentage of notice letters that were sent to actual individuals” were both consistent at “roughly 90%.” Id. at *8-9. Further, Sturgis Hospital’s physical location nearing the Indiana border did not “rebut the presumption of domicile.” Id. at *9. Rather, the fact that Sturgis Hospital “is located ‘exclusively’ in Sturgis, Michigan, and markets itself as a ‘hometown’ medical service’” weighed in favor of applying the home-state exception. Id.

The Court concluded that “the consistency of the data suggests that Sturgis’ information easily meets the preponderance standard” and found “the home-state exception to [the] CAFA applies.” Id. at *10. Accordingly, the Court dismissed for lack of jurisdiction. Id.

Implications For Businesses

Berven illustrates that the CAFA is not an unbounded vehicle for litigating class actions in federal court, and when an exception applies, here the home-state exception, this defeats federal court jurisdiction and requires dismissal. Sturgis Hospital presented hospital records and notice letter statistics showing that the home-state exception applied because over two-thirds of the proposed class members are citizens of Michigan.

Jurisdictional challenges are strategic decisions that should be carefully considered when defending against class actions. Corporate counsel should weigh the pros and cons of proceeding in federal versus state court before asserting a jurisdictional exception to the CAFA. Corporate counsel should also consider the strength of the support and whether it proves by a preponderance of the evidence that an exception applies.

May 29, 2026May 29, 2026 by Gerald L. Maatman, Jr.

Third Circuit Affirms Dismissal Of Session Replay Code Class Action Because The Collection Of Anonymized Information Does Not Constitute A Concrete Injury Necessary To Confer Article III Standing

By Gerald L. Maatman, Jr., Justin Donoho, and Hayley Ryan

Duane Morris Takeaways: On May 26, 2026, in Smidga, et al. v. Spirit Airlines, Inc., No. 24-1757, 2026 WL 1470137 (3d Cir. May 26, 2026), the U.S. Court of Appeals for the Third Circuit affirmed a federal district court’s dismissal of a class action alleging that the defendant’s use of session replay code, a form of website analytics technology, violated federal and state privacy laws. Relying on its prior decision in Cook v. GameStop, Inc., 148 F.4th 153 (3d Cir. 2025), the Third Circuit held that the three named plaintiffs lacked standing because there were no allegations of embarrassment or humiliation, plaintiffs voluntarily provided the information on the defendant’s website, the information allegedly collected was anonymized, and, in any event, most people “understand that what we do on the Internet is not completely private.” Id. at *2. Accordingly, the Third Circuit concluded that plaintiffs failed to allege a concrete injury to their privacy interests sufficient to confer Article III standing. Id. at *1.

This ruling reinforces the growing trend among federal courts requiring plaintiffs to plausibly allege that the collected data was personally identifiable and obtained without authorization in order to establish a concrete privacy injury.

Background

Many companies embed session replay code and other similar software, such as Google Analytics and the Meta Pixel, into their websites to conduct website analytics and/or targeted advertising. All of these various technologies capture users’ browsing behaviors and cryptographically transmit this data to algorithms residing on the software providers’ servers. Upon entry into the algorithm, this data is typically anonymized, aggregated, and not alleged to have been viewed or accessible by any human. Plaintiffs across the country have filed multitudes of class actions challenging these various website analytics and advertising practices under federal and state privacy laws, targeting companies in virtually every industry, including healthcare, retail, education, and consumer products. Some cases have resulted in multimillion-dollar settlements, others have been dismissed, and the vast majority remain undecided. In these session replay and other data privacy class actions, the central question is often whether the specific data captured is sufficiently sensitive or personally identifying to establish a cognizable legal injury.

In Smidga, three named plaintiffs sued the defendant airline, alleging that session replay code embedded on its website recorded users’ interactions with the website in real time, including “text entries, mouse clicks, and geolocation.” Id. at *1. Plaintiffs asserted claims under the Pennsylvania and Maryland Wiretap Acts, the California Invasion of Privacy Act, California’s Unfair Competition Law, and several other state and common law causes of action. Id. at *1 n.2.

All three plaintiffs visited defendant’s website to browse flights. Only one plaintiff ultimately purchased tickets and entered the names, addresses, and ages of herself and her children while doing so. Id. at *1.

The defendant moved to dismiss for lack of Article III standing under Federal Rule of Civil Procedure 12(b)(1) or, alternatively, for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). In support of its Rule 12(b)(1) arguments, the defendant submitted a declaration from its Senior Vice President and Chief Information Officer disputing plaintiffs’ allegations that the session replay code collected personal information and explaining that any data collected was “not traceable to any specific [w]ebsite user.” Id. at *1.

The District Court granted the motion to dismiss for lack of standing, finding that the plaintiffs failed to establish an injury-in-fact sufficient to confer Article III standing, while also granting plaintiffs leave to seek jurisdictional discovery and amend the complaint again. Id. When plaintiffs took no further action, the District Court dismissed the complaint with prejudice, and plaintiffs appealed.

The Third Circuit’s Decision

The Third Circuit affirmed dismissal of the complaint but modified the District Court’s order so that the dismissal would be without prejudice. Id.

After observing that its recent decision in Cook v. GameStop, Inc., 148 F.4th 153 (3d Cir. 2025), “plainly resolve[d]” plaintiffs’ standing challenge, the Third Circuit “briefly explain[ed]” why plaintiffs failed to establish a concrete injury sufficient to confer Article III standing. Id. at *2.

First, the Third Circuit held that the alleged harm did not share a “close relationship” to the comparator torts of disclosure of private information or intrusion upon seclusion. Id. With respect to public disclosure of private information, the Third Circuit explained that the two non-purchasing plaintiffsdid not allege that the defendant collected any personal information. Although the purchasing plaintiff entered personal information while using the website, the Third Circuit noted that the tort of public disclosure of private facts requires allegations of resulting embarrassment or humiliation, which were absent from the complaint. Id.

The Third Circuit similarly concluded that plaintiffs failed to state an analogous intrusion upon seclusion injury. Such a claim requires allegations that the defendant intentionally intruded upon plaintiffs’ “private affairs or concerns.” Id. The Third Circuit determined that standard was not satisfied because plaintiffs voluntarily provided the information, the allegedly collected information was anonymized, and, in any event, most people “understand that what we do on the Internet is not completely private.” Id.

Second, the Third Circuit rejected plaintiffs’ argument that bare violations alone confer standing, concluding that the argument misconstrued Third Circuit precedent and the U.S. Supreme Court’s holding in TransUnion LLC v. Ramirez, 594 U.S. 413, 426–27 (2021). Id. at *2.

Third, the Third Circuit reasoned that it was “hard-pressed to find that a de facto invasion of privacy exists where a website makes no express promise to refrain from collecting site visitors’ information.” Id. at *3. As explained in Cook, “there is a material difference between an allegation that a website merely failed to ask for visitors’ consent to data collection and an allegation that a website expressly promised it would not collect information but secretly did so anyway.” Id. The complaint contained no allegations that the defendant made such a promise.

The Third Circuit also rejected plaintiffs’ challenge to the District Court’s consideration of the declaration submitted in support of the defendant’s Rule 12(b)(1) motion to dismiss. The Third Circuit emphasized that plaintiffs failed to request discovery to respond to the defendant’s factual challenge despite being given the opportunity to do so, and it agreed that plaintiffs’ “boilerplate averments” alone could not rebut the defendant’s external evidence. Id. at *3.

Accordingly, the Third Circuit affirmed the District Court’s dismissal order for lack of Article III standing but modified the dismissal to be without prejudice.

Implications For Companies

Smidga reinforces that plaintiffs challenging the use of common website analytics and advertising technology must, at a minimum, plausibly allege that the technology collected and disclosed personally identifying information, rather than anonymized, aggregated web-browsing data cryptographically transmitted to software providers’ servers and not viewable or accessible by any human. Moreover, alleging the collection and disclosure of PII via functionally internal session replay technology may or may not confer standing, depending on the jurisdiction one is in, as we blogged about earlier this month (here).

For companies facing session replay and other data privacy class actions in federal court, Article III standing remains a significant threshold defense that should be evaluated throughout the litigation, while balancing the possibility that claims may continue in state court.

May 27, 2026May 27, 2026 by Jennifer A. Riley

The Beard Group’s Class Action Money & Ethics Conference Covers Major Developments And Trends In Class Action Litigation

By Jennifer A. Riley, Greg Tsonis, George J. Schaller, and Ryan T. Garippo

Duane Morris Takeaways: Jennifer A. Riley, Greg Tsonis, George J. Schaller, and Ryan T. Garippo, members of the Duane Morris Class Action Defense Group, recently attended the Beard Group’s Class Action Money & Ethics Conference organized in New York City. The conference, held on May 21, 2026, hosted hundreds of attendees, covered key trends in class action litigation, and honored several attorneys for their accomplishments in the class action industry. Jennifer A. Riley of Duane Morris gave the keynote address, and George J. Schaller and Ryan T. Garippo of Duane Morris received awards for their accomplishments as two of 12 Premier Class Action Lawyers Of Tommorow in the United States.

The Conference

At the Class Action Money & Ethics Conference, the Beard Group, Inc. hosts a gathering of the top class action professionals to discuss the hottest topics in class action and multi-plaintiff litigation, including new filings, pre-trial proceedings, settlements, verdicts, and the latest trends in this area of the law. The Conference featured panelists and attendees who are attorneys on both sides of the bar, judges, as well as other professionals who focus their work on class action litigation.

The Conference features panels that speak on a wide range of topics. These topics included the use of data analytics and artificial intelligence in class action litigation, mass arbitrations, the trends in data breach and consumer protection litigation, environmental class actions, and more.

The State Of The Industry

Jen Riley, Vice Chair of Duane Morris’s Class Action Defense Team, opened the Conference by presenting the ten latest trends in class action and multi-plaintiff litigation in her keynote speech. The presentation is based on the findings from the Duane Morris Class Action Review, which is a “one-of-a-kind” publication, that summarizes class action trends and decisions across substantive areas of law.

As Jen Riley explained, in 2025, class action litigation exploded which led to record-breaking settlement figures by a wide margin. In 2025, the ten largest class action settlements can be aggregated to a total of over $79 billion dollars which were paid from corporate defendants to individuals across the nation. This trend was driven by high class certification rates, high quantities of class action filings, shifts within the substantive claims that plaintiffs are pursuing and several other variables. The net effect of these trends was that the class action mechanism served as an effective tool for the plaintiffs’ bar to redistribute wealth at an unprecedented level.

Jen Riley also discussed the shifting landscape with respect to some of the most cutting-edge defenses to defeating class actions. She discussed the success of corporate defendants in defeating class actions via motions to compel arbitration, and some of the latest case law on arbitrations that is currently being litigated before the U.S. Supreme Court. In addition, she reviewed the ongoing federal appellate circuit split concerning the standards for when to grant conditional certification (if at all) under the Fair Labor Standards Act and the applicability of the personal jurisdiction defense to the claims of individual class and collective action members. Jen Riley, providing the keynote address, is pictured below:

Panels On Class Actions And Related Issues

Following Jen Riley’s keynote address, numerous panels followed on the state of class action litigation across various areas of substantive law. The panels in the morning focused on a wide range of topics. The first panel discussed the use of data analytics in class action litigation, particularly by plaintiffs’ attorneys, to identify potential defendants to sue and then effectively prosecute their clients’ claims after. There were also panelists on securities class actions, which helped explain the role that private plaintiffs’ firms have to play during the Trump administration’s control of the U.S. Securities and Exchange Commission. The morning ended with a discussion of the future of litigation financing and the impact of various state laws on the continued viability of the practice.

The panels in the afternoon focused largely on consumer class actions and again covered many areas of substantive law. The afternoon opened with a lively panel on the current state of mass arbitrations, including a conversation regarding the plaintiffs’ bar’s use of arbitration agreements in their engagement letters, and how it impacts their ability to challenge the viability of arbitration agreements in federal and state courts across the country. There were panels on how the plaintiffs’ bar evaluates claims in data breach cases, as well as the shifting trends in data privacy class actions as a result. These panels were followed by additional discussions on the impact of multi-district litigation, environmental class actions, and a comparative analysis of global class actions which explained the various ways that plaintiffs are seeking to monetize mass torts and other alleged harms outside of Rule 23’s class action mechanism. The afternoon concluded with a panel on the scope of consumer protection class actions, including the cutting-edge theories that plaintiffs are pursuing to advance the law in this space, as well as the challenges in identifying plaintiffs to pursue such claims in light of the Eleventh Circuit’s decision that service payments are per se impermissible in class action settlements.

Premier Class Action Lawyers Of Tommorow Award Ceremony

After the panels concluded, there was a reception which was emceed by the Honorable Kathy King, who is a Justice on the Supreme Court in New York County state court. Justice King gave her concluding remarks on the event and also awarded this year’s Premier Class Action Lawyers Of Tommorow with awards for accomplishments in the class action industry. The award was provided to twelve attorneys, under the age of 40, who are redefining the frontiers of class action litigation through innovative strategies, landmark victories, and unwavering commitment to justice on both sides of the bar.

This year’s award winners included Ryan Garippo and George Schaller, both of Duane Morris, who were honored to accept their awards from Judge King and the Beard Group. George and Ryan are pictured below:

May 4, 2026May 4, 2026 by Gerald L. Maatman, Jr.

The Disorganization Defense: North Carolina Federal Judge Finds That Litigation Practices Of Plaintiffs’ Counsel Are Sufficient Grounds To Deny Class And Collective Certification

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

Duane Morris Takeaways: On April 22, 2026, in Ayers, v. GKN Driveline North America, Inc., No. 23-CV-00581, 2026 U.S. Dist. LEXIS 89819 (M.D.N.C. Apr. 22, 2026), Chief Judge Catherine Eagles of the U.S. District Court for the Middle District of North Carolina denied several motions to certify various claims as class and collective actions under the Fair Labor Standards Act (the “FLSA”) and the North Carolina Wage And Hour Act (the “NCWHA”). This decision underscores the responsibility of plaintiffs’ counsel to manage a case and present the court with a viable plan to bring their clients’ claims through trial. Otherwise, plaintiffs’ counsel runs the risk that the court will not certify these claims at all.

Case Background

This decision emerges in the context of a series of seven-year-long lawsuits against GKN Driveline North America, Inc. (“GKN”), the supplier of all-wheel-drive and other automotive components, for several major automotive manufactures. Plaintiffs James Ayers, John Carson, and Tameka Ferges (collectively, “Plaintiffs”) brought three separate wage-and-hour lawsuits, asserting claims under the FLSA and the NCWHA. Plaintiffs alleged that GKN required them to perform work off the clock, including before and after shifts, and during unpaid meal breaks.

In 2018, Plaintiffs filed an earlier case against GKN. In that case, Plaintiffs alleged GKN had two policies that resulted in underpayment of their wages: (1) a “time rounding” policy; and (2) an “automatic deduction” policy for meal breaks. The Court originally conditionally certified an FLSA collective action and a Rule 23 class action under both of those theories. But the court ultimately decertified both the FLSA collective and the Rule 23 class, finding that “individual issues would swamp any attempt to resolve the claims on the class or collective basis.” Id. at *5

After that decision, Plaintiffs – represented by the same counsel – refiled three similar lawsuits, which split the claims based on GKN’s plant locations, but otherwise left the theories mostly intact. Plaintiffs then filed renewed motions for class and collective certification in each of the three actions and again asked the Court to allow them to proceed on a representative basis. The Court’s opinion, for all three cases, followed.

The Court’s Decision

In her 28-page opinion, Chief Judge Eagles of the U.S. District Court for the Middle District of North Carolina denied Plaintiffs’ motions based largely on manageability grounds.

Chief Judge Eagles explained that “manageability principles are explicit in the requirements for a proposed Rule 23(b)(3) class” and that “wider case management concerns remain relevant in the collective context.” Id. at 13. Thus, it is generally a plaintiff’s attorney’s responsibility to present the court with an “organized presentation of claims, organized discovery and motions practice, and organized submission of evidence.” Id. But here, Plaintiff’s counsel failed to present a manageable class or collective in at least four different ways.

First, and perhaps most fundamentally, Chief Judge Eagles found that “plaintiffs propose no efficient method of resolving class-wide liability and individual damages across three different subclasses.” Id. at *18. Although Plaintiffs’ theory was premised on the notion that GKN had a “de facto off-the-clock” policy, Plaintiffs did not explain how they planned to “efficiently prove that each and every nonexempt employee was subject to that de facto policy and, even more crucially, how each class member was injured by this policy.” Id. at *18-19. Chief Judge Eagles found this omission troubling given that “plaintiffs have had years to think about these problems” and could not present the court with a manageable solution. Id. at *19. But Chief Judge Eagles did not stop there.

Second, having dispensed with the omissions in Plaintiffs’ theory of case manageability, Chief Judge Eagles turned to Plaintiffs’ counsel who she reasoned has “not demonstrated the organization, diligence, and mindset required to prosecute a complex case.” Id. at *21. Chief Judge Eagles explained that because she often had to prompt Plaintiffs’ counsel to prosecute the case, via supplemental briefing and discovery, she had lost confidence in their ability to manage the docket. This problem was compounded by Plaintiffs’ counsel’s filing of “several ‘emergency’ motions and amended ‘emergency motions’” which underscored their inability to “handle ordinary litigation problems.” Id. at *21-22.

Third, Chief Judge Eagles characterized Plaintiffs’ counsel’s Rule 23 analysis as the product of an unreliable “narrator of the record.” Id. at *22-23. She described Plaintiffs’ counsel’s submissions as “inaccurate at best and misrepresentations at worst.” Id. at *23. Similarly, for the FLSA claims, Chief Judge Eagles held that the “factual representations about the evidence in the plaintiffs’ briefing on an FLSA collective do not always hold up to scrutiny.” Id. at *31-32. These inaccuracies did not give her confidence that Plaintiffs’ counsel would be able to present a manageable case through trial.

Fourth, as to the FLSA claims, Chief Judge Eagles concluded by finding that “the plaintiffs have not proposed any plan, much less a workable plan, for the aggregation of all these claims.” Id. at *31. For example, Chief Judge Eagles highlighted that plaintiffs “have not explained how they will manage presenting evidence on all the different work activities at issue and [across] three different plants.” Id. She noted that – although it is often possible for plaintiffs’ counsel to create such theories — “[i]f they are unable to make the required showing after over seven years of litigation, there is no reason to think they will be able to do so by the time these cases are called for trial.” Id. at *33.

In short, Chief Judge Eagles explained that she “has certified several dozen class actions over the past fifteen years and is familiar with how to deal with disagreements between parties about managing and trying common and individual issues.” Id. at *26. “The problem here is not that management might be hard” but rather “that the plaintiffs proffer no plan for management . . . [a]nd the Court has no confidence that counsel will devise a workable plan.” Id. Thus, the motions were denied in their entirety.

Implications For Employers

Ayers presents two key lessons for corporate counsel grappling with how to manage these complex cases.

The first lesson is that the value of class and collective claims often can hinge on the identity and competency of opposing counsel. Where plaintiffs’ counsel is savvy, competent, and organized, the value of otherwise weaker claims can go up. In these cases, competent plaintiffs’ counsel can often be the difference in whether a class is certified, which is often the difference between millions of dollars of potential of exposure and not. Thus, corporate counsel should weigh the competency of his or her adversaries when assessing the risk that a putative class or collective action poses.

The second lesson is that hiring experienced defense counsel and developing an aggressive litigation strategy are critical for success in such cases. In Ayers, Chief Judge Eagles observed defense counsel’s strategy and explained “it has been clear for years that GKN intended to hold the plaintiffs to their burden of proof at every stage on every issue, as is their right.” Id. at *22, n.13. As a result, any delay by GKN ultimately did not negate the deficiencies by Plaintiffs’ counsel. It takes experienced counsel to toe this line and keep the focus on a plaintiff’s conduct. Corporate counsel should consider such experience when deciding who is best to represent their organizations.

April 30, 2026April 30, 2026 by Gerald L. Maatman, Jr.

Georgia Federal Court Holds That To Establish Article III Standing To Sue In Data Breach Class Actions, The Named Plaintiffs’ Injury-In-Fact Requirement Demands Nuanced And Detailed Pleadings

By Gerald L. Maatman, Jr., Rebecca S. Bjork, and Ryan Garippo

Duane Morris Takeaways: On April 23, 2026, in Hall v. Bitcoin Depot, Inc., Case No. 25-CV-04317 (N.D. Ga. Apr. 23, 2026), Judge William Ray of the U.S. District Court for the Northern District of Georgia dismissed a putative class action alleging that users of Bitcoin Depot’s cryptocurrency ATMs were at significant risk of identity theft and attendant personal, social and financial harms due to a data breach. The District Court held that the Named Plaintiff did not properly plead a cognizable injury sufficient to confer Article III standing to sue, due to not pleading any specific misuse of his data. The decision clarifies the legal standards within the Eleventh Circuit regarding standing requirements in data breach class action cases, thus providing helpful and nuanced guidance for defendants facing similar lawsuits. This is especially true because the dismissal was granted without prejudice, affording the Named Plaintiff an opportunity to cure his defective pleading and potentially setting the stage for further litigation on this issue.

Case Background

Quincey Hall sued Bitcoin Depot, Inc. in federal court in the Northern District of Georgia on behalf of a putative class of consumers who used the company’s cryptocurrency ATMs. Id. at 2. After a data breach occurred affecting the ATMs, approximately 26,000 individuals’ personally identifiable information was exposed online. Id. After being notified by Bitcoin Depot that his information was amongst that involved in the breach, Hall filed his class action lawsuit as a “proposed representative of a class of individuals ‘impacted by [Bitcoin Depot’s] failure to safeguard, monitor, maintain and protect’ their personal information prior to the data breach.” Id.

Hall’s Complaint alleged that because of the data breach, he and the putative class members are “at [a] significant risk of identity theft and various other forms of personal, social and financial harm.” Id. at 3. He alleged that Bitcoin Depot is liable for common law tort and contract claims, as well as for violations of the Georgia Uniform Deceptive Trade Practices Act and he sought both monetary damages and injunctive relief. Id.

Bitcoin Depot filed a motion to dismiss under Rule 12(b)(6) based both on a failure to state a claim and for lack of standing to sue under Article III of the Constitution. Id.

The Court’s Decision

Judge Ray granted Bitcoin Depot’s motion to dismiss the complaint and he did so without prejudice, allowing the Named Plaintiff an opportunity to correct his defective pleading. Id. at 10. The court’s analysis of the legal requirements for standing in data breach cases is clarifying because it demonstrates that nuance matters when considering whether the injury-in fact requirement for Article III standing is properly pled.

First, the court explained that to constitute a case or controversy within the meaning of Article III, the plaintiff must have standing to sue (id. at 3), and in the context of a class action lawsuit “only one named plaintiff must have standing as to any particular claim in order for it to advance.” Id. at 5 (citation omitted).

Second, the court explained that to demonstrate standing, a named plaintiff must show that “[he] has suffered ‘an injury in fact that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical[.]’” Id. Furthermore, when seeking damages specifically, the court explained that “the mere risk of future harm, standing alone, cannot qualify as a concrete harm.” Id. (quoting TransUnion LLC v. Ramirez, 594 U.S. 413, 436 (2021). And for injunctive relief, too, the named plaintiff must establish that there is a “substantial risk that, in the near future, they will suffer an injury.” Id.

Third, the court applied these standards to the allegations in the Named Plaintiff’s complaint and held that those allegations were insufficient to establish Article III standing. Hall had only pled a risk of identity theft and the resulting potential adverse impacts on him and putative class members. He had not pled any facts that his specific information had been leaked to known criminal dark websites that in similar circumstances have survived motions to dismiss in data breach cases. Id. at 9 (citing, inter alia, Green-Cooper v. Brinker, Int’l., Inc., 73 F. 4^th883, 889 (11^th Cir. 2023).) In short, the Named Plaintiff had failed to allege that there was any misuse of his stolen identity data, and that was fatal to his pleading under the established rules for Article III standing.

Implications For Data Breach Class Action Defendants

Data breach class actions are abundant, as corporate counsel working in this space know. As such, it is crucial for all to have an understanding of the possible defenses available at the pleading stage to reduce litigation risk and force potentially meritless claims to a second round of pleading and motion to dismiss practice. Understanding how district courts analyze nuances in plaintiffs’ pleadings relating to this important area of the law – Article III standing – is critical to launching a successful defense to any such claims.

April 27, 2026April 27, 2026 by Gregory Tsonis

Class Action Issues In 2025/2026 – Report From The Perfect Law Global Class Actions and Mass Torts Conference In London

By Gregory Tsonis

Duane Morris Takeaways: Gregory Tsonis, a Partner in the Duane Morris Class Action Defense Group, recently spoke at the Global Class Actions and Mass Torts Conference organized by Perfect Law in London. During the conference on April 22 and 23, 2026, over 200 attendees discussed key issues impacting class action litigation in 2025/2026. As a guest presenter from the United States on employment class actions, Greg spoke on United States class action trends and defense strategies.

The Conference

Perfect Law brings together top practitioners on both sides of the bar, as well as academics and the judiciary, to tackle contemporary issues in complex litigation, focusing on class actions and mass torts. The conference featured several prominent federal judges who handle leading MDL proceedings and class actions, including Judge Robert Dow, Northern District of Illinois (and Counselor to the Chief Justice of the US Supreme Court), Judge Robin L. Rosenberg, Southern District of Florida, and Judge Yvonne Gonzalez Rogers, Northern District of California. In addition, Judge Amy J. St. Eve of the U.S. Court of Appeals for the Seventh Circuit spoke on multiple panels.

The organizers compiled a wide range of knowledge and experience on cutting edge class action topics, including recent trends and emerging issues. The presenters covered the latest developments in class action trends across Canada, the United States, and Europe. They discussed trends and legal developments in consumer, privacy, and employment class actions, as well as the continued growth of mass tort actions targeting various industries.

Trends in Global Mass Torts and Public Nuisance

I had the privilege of speaking on class action and mass tort trends. Our panel addressed a wide variety of cutting-edge class action issues running the gamut from settlements, the important arbitration defense, and litigation funding.

The proliferation of mass tort and class action litigation is largely driven by heightened risks and elevated exposure that are connected to record-breaking settlement numbers. In 2025, settlement numbers reached an unprecedented level in class action litigation. In 2024, settlement numbers broke the $40 billion mark for the third year in a row. In 2025, the cumulative value of the highest ten settlements across all substantive areas of class action litigation surpassed that benchmark and totaled $79 billion. Combined, the top 10 settlement numbers of the past four years in all substantive areas exceeded $238 billion, representing use of the class action mechanism to redistribute wealth at an unprecedented level. Mass tort litigation has recently also somewhat shifted away from areas like the pharmaceutical companies and the opioid crisis to industries like technology companies, for example, on the basis that tech companies knew and disregarded harms from social media.

I was also able to address the effectiveness of the arbitration defense to preclude or limit class action litigation. Arbitration agreements with class action waivers provide the foundation for one of the most potent defenses to class action litigation. While the U.S. Supreme Court has continued to promote arbitration agreements, plaintiffs have continued to attack their enforceability, and courts across the country have continued to apply exceptions in inconsistent and expansive ways. Mass arbitration has also emerged as a way to weaponize arbitration proceedings, with the plaintiffs’ bar seeking to adjudicate hundred or thousands of claims by bypassing Rule 23’s class certification requirements.

Litigation funding by private entities also continues to fuel the prevalence of class action and mass tort litigation. Financial firms are continuing to invest substantial sums into portfolios of class action and mass tort litigation, and disclosure requirements continue to be a source of dispute.

Panel On Thresholds For Class Certification Across Jurisdictions

On the first day of the conference, an interesting panel discussion ensued on class certification standards in various jurisdictions. Panelists spoke to the general requirements under Rule 23(a) – numerosity, commonality, adequacy, and typicality – and the differences between class action requirements in the United States and other countries. In Canada, for example, a sufficiently numerous class can consist of as little as two people, while in the United States 40 individuals will typically be sufficient to satisfy numerosity.

In discussing the Rule 23 standard in the United States, the panel presented to the audience the statistics on class certification presented in the Duane Morris Class Action Review – 2026. In terms of class certification motions, the Plaintiffs bar successfully secured certification in 68% of cases over the past year, a slight increase from the 63% success rate in 2024. In 2025, plaintiffs also maintained more consistent certification rates across substantive areas, from a low of 33% in the data breach area, to highs above 70% in the antitrust, wage & hour, and securities fraud areas. Likewise, courts granted more than 90% of the motions for class certification that they adjudicated in 2025 in the ERISA and WARN areas. Additionally, the panel spoke to the importance of reaching the class certification stage in a case, which in many cases can take three to four years, and that approximately 75% of Rule 23(f) petitions to appeal class certification decisions during the pendency of the case are denied by courts of appeal.

Panel on Class Representative Duties

Another panel of plaintiffs lawyers, defense lawyers, judges, and professors addressed the duties of class representatives in varying jurisdictions. The panelists discussed how in the United States, class representatives are expected to be knowledgeable about the litigation, the claims asserted, and the class nature of the action. The class representatives must individually be adequate and have claims that are typical of the putative class as well. The panelists discussed the ability to compensate class representatives for their participation as class representatives, with all but one circuit in the United States permitting such incentive payments (the Eleventh Circuit does not allow incentive payments). Europe largely does not permit incentive payments to class representatives, with such payments expressly forbidden in the Netherlands.

April 3, 2026April 3, 2026 by Gerald L. Maatman, Jr.

“A Matter Of Consent” – Ninth Circuit Finds Non-Mutual Offensive Collateral Estoppel Inappropriate In Invalidating Individual Arbitration Agreements Under The Federal Arbitration Act

By Gerald L. Maatman, Jamar D. Davis, and Caitlin Capriotti

Duane Morris Takeaways: On April 1, 2026, in Laura O’Dell et. al. v. Aya Healthcare Services, Inc., No. 25-1528, 2026 U.S. App. LEXIS 9420 (9th Cir. Apr. 1, 2026), a panel for the Ninth Circuit held that the U.S. District Court for the Southern District of California erred in relying on non-mutual offensive collateral estoppel to preclude the enforcement of hundreds of arbitration agreements based select arbitral awards from unappointed arbitrators for different parties. This decision reaffirms the principle of consent set forth in the Federal Arbitration Act (“FAA”) and the Ninth Circuit’s preference (in line with the FAA) for enforcement of valid arbitration agreements in individualized proceedings.

Case Background

Aya Healthcare Services, Inc. (“Aya”) is an agency the pairs traveling nurses and other supporting clinicians with hospitals in need. In 2022, four former employees filed a putative class action against Aya for allegedly reducing their pay mid-contract, asserting breach of contract, fraudulent inducement, state wage-and-hour violations, and violations under the Fair Labor Standards Act (FLSA). As a condition of employment, all employees signed arbitration agreements to resolve any employment-related disputes outside of the court system. Aya moved to compel arbitration, and the U. S. District Court for the Southern District of California (the “District Court”) granted the motion and compelled all four named plaintiffs to arbitration.

Aya proceeded to arbitrate with each of the four plaintiffs in four separate arbitrations. Each plaintiff challenged the validity of the arbitration agreements, and the delegation clause assigned the arbitrator (rather than the court) authority to decide whether the arbitration agreement was valid. Two arbitrators ruled the arbitration agreements were unconscionable, and two arbitrators ruled the arbitration agreements were valid. By the time the parties moved the District Court to confirm their respective arbitral awards, 255 additional plaintiffs had opted-in to the case pursuant to a collective action procedure under the FLSA. Aya moved to compel each of these plaintiffs to arbitration. In response, a newly assigned district judge raised sua sponte the issue of whether collateral estoppel barred Aya from enforcing the additional arbitration agreements against the opt-in plaintiffs. Ultimately, the District Court denied Aya’s motion to compel arbitration.

The District Court applied the doctrine of non-mutual offensive collateral estoppel to preclude the enforcement of the arbitration agreements between Aya and the 255 employees. This doctrine was “non-mutual” because a party different from the party in the original action is seeking preclusion and “offensive” because the new party is using a prior award as a sword (rather than a shield). However, the District Court only gave the collateral estoppel effect to the two decisions finding the arbitration agreements unconscionable, and awarded no such power to the decisions holding the arbitration agreements as valid. The Ninth Circuit reviewed the motion to compel arbitration de novo.

The Ninth Circuit’s Decision

The Ninth Circuit held that the District Court’s novel application of an equitable preclusion doctrine did not preclude the enforcement of the arbitration agreements because application of the doctrine runs contrary to FAA’s intention to enforce the agreed upon terms of valid arbitration agreements in individualized proceedings. “Precluding an arbitration that the parties had agreed to – because a different arbitrator in a different proceeding had concluded that an agreement between different parties was unconscionable – would render the parties’ consent meaningless,” wrote U.S. Circuit Judge Eric C. Tung (emphasis in original). This goes against the fundamental requirement that each arbitration agreement requires individualized resolution. The Ninth Circuit also stated that “the application of non-mutual offensive issue preclusion would also violate the principle of consent that the [Federal Arbitration Act (“FAA”)] incorporates.” Id. at *8. When parties enter arbitration agreements, the FAA serves to have those agreements enforced. Further, even when the validity of an arbitration agreement is at issue, the issue-preclusion doctrine is not a “generally applicable contract defense.” Id.

Further, the Ninth Circuit determined that the District Court’s order effectively transformed individual arbitration proceedings into a bellwether class action to which the parties never agreed. This also goes to the issue of consent. The Ninth Circuit cited the U.S. Supreme Court’s decisions in Epic Systems Corp. v. Lewis, 584 U.S. 497 (2018), and Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010), as holding that imposing a class action without the parties’ consent (or adequacy of representation) and where the parties had agreed to individual arbitration is a violation of the FAA. Allowing one arbitration proceeding to preclude hundreds or thousands of arbitration agreements, as the logic of the District Court suggests, regardless of adequacy of representation, would strip the resulting class action from all its important protective features.

As a result, the Ninth Circuit reversed the District Court’s judgment and remanded for further proceedings.

Implications For Employers

This decision reaffirms the strength of the FAA and reiterates the Ninth Circuit’s preference for enforcing arbitration agreements on an individualized basis.

District court judges who may have personal preferences against arbitration cannot destroy the FAA with novel doctrines inconsistent with the FAA.

March 17, 2026March 17, 2026 by Gerald L. Maatman, Jr.

Announcing The Third Edition Of The Duane Morris Products Liability & Mass Torts Class Action Review!

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

Duane Morris Takeaways: Clients, ranging from some of the world’s largest manufacturers and insurance companies to startup companies and individual inventors, turn to Duane Morris for counsel and representation in claims involving products liability and toxic torts. For years, Duane Morris has worked with clients to develop cost-containment and strategic litigation plans designed to minimize the risk, business disruption and potentially staggering cost of products liability and toxic tort litigation. Our goal is to provide value by acting as proactive counselors and advisors, rather than simply responding to particular problems in isolation. To that end, the class action team at Duane Morris is pleased to present the Products Liability & Mass Torts Class Action Review – 2026. This publication analyzes the key rulings and developments in 2025 and the significant legal decisions and trends impacting both product liability class action litigation and mass tort litigation for 2026. We hope that companies and employers will benefit from this resource and assist them with their compliance with these evolving laws and standards.

Click here to bookmark or download a copy of the Products Liability & Mass Torts Class Action Review – 2026 e-book.

Stay tuned for more products liability and mass tort class action analysis coming soon on our weekly podcast, the Class Action Weekly Wire.