Duane Morris Takeaway: The Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, et seq., has long been a focus of class action litigation. Since the TCPA was enacted 30 years ago, the methods and technology that businesses use to engage and interact with customers has evolved and changed. The trend of states enacting or amending their own mini-TCPAs shows no signs of slowing down, making this subject area a likely continued focus for the plaintiffs’ class action bar in years to come.
To that end, the class action team at Duane Morris is pleased to present the 2026 edition of the TCPA Class Action Review. We hope it will demystify some of the complexities of TCPA class action litigation and keep corporate counsel updated on the ever-evolving nuances of these issues. We hope this book – manifesting the collective experience and expertise of our class action defense group – will assist our clients by identifying developing trends in the case law and offering practical approaches in dealing with TCPA class action litigation.
Click here to bookmark or download a copy of the TCPA Class Action Review – 2026 e-book.
Stay tuned for more TCPA class action analysis coming soon on our weekly podcast, the Class Action Weekly Wire.
By Gerald L. Maatman, Jr., Hayley Ryan, and Tyler Zmick
Duane Morris Takeaways: In Zaluda et al. v. Apple, Inc., Case No. 2019 CH 11771, (Cir. Ct. Cook Cnty., Ill. Jan. 29, 2026), Judge Michael T. Mullen of the Circuit Court of Cook County, Illinois granted class certification to a class of plaintiffs alleging that Apple’s Siri function violated the Illinois Biometric Information Privacy Act (“BIPA”). In doing so, Judge Mullen delivered a significant setback to Apple’s efforts to block the certification of a purported class that could number in the millions. Pre-certification discovery established that there were approximately 2.6 to 3.9 million Siri users in Illinois during the relevant class period.
This decision represents the latest success for the plaintiffs’ bar in a string of victories in Illinois privacy class actions (as we previously blogged about here and here) and underscores that even the largest and most sophisticated companies in the world face substantial legal exposure arising from their biometric data collection, retention, and use practices.
Background
Apple’s voice-activated digital assistant, “Siri,” uses speech recognition technology to understand and respond to user inquiries and to perform user-requested tasks. Siri comes pre-loaded on a wide range of Apple devices, including iPhones, iPads, HomePods, Apple Watches, Macbooks, iMacs, and AirPods.
Siri relies on an automatic speech recognition (“ASR”) process that “automatically and uniformly computes biometric feature vectors [] from every user utterance for every Siri user,” and that process functions uniformly across all Apple devices. Id. at 4. These “feature vectors” are capable of being used to identify a speaker. Id. at 3. During the relevant class period, Apple’s privacy policies and disclosures applicable to Siri users were uniform and did not include the notice, consent, or retention policy disclosures required by the BIPA. Id. at 4.
Apple sorts its records to identify device users based on their state of residence or telephone number area code. Id. at 5. Apple’s former Senior Director of Siri testified at his deposition that Apple tracks the percentage of device owners who enable Siri and that approximately 20% to 30% of all device owners do so. Based on those figures, Apple estimated that there were approximately 2.6 to 3.9 million Siri users in Illinois during the relevant period at issue in the lawsuit. Id. at 3, 5.
Against this backdrop, plaintiffs filed a class action lawsuit alleging that Apple violated the BIPA by collecting, capturing, storing and/or disseminating “biometric feature vectors” and/or “voiceprints” of millions of Illinois residents who used Siri on any Apple device without first providing the required disclosures, obtaining informed written consent, or maintaining publicly available written data retention and destruction guidelines. Id. at 2. Plaintiffs sought certification of a class consisting of all Illinois residents who used Siri on any Apple device on or after September 19, 2014. Id. at 5. Notably, pre-certification discovery revealed that there were more than 13 million unique Apple IDs associated with a billing address in Illinois and an Apple device capable of running Siri. Id. at 5 n.20.
The Court’s Ruling
In ruling in favor of the plaintiffs, Judge Mullen systematically rejected Apple’s arguments that plaintiffs failed to satisfy the requirements for class certification under 735 ILCS 5/2-801. Given the size of the purported class, Apple stipulated to numerosity for purposes of class certification. Id. at 8.
With respect to the adequacy requirement, Apple argued that the named plaintiffs were inadequate representatives because they lacked sufficient knowledge about the case and because three of them no longer reside in Illinois. Id. at 18. The Court rejected those arguments. After reviewing the named plaintiffs’ deposition testimony, the Court found that each plaintiff demonstrated a basic understanding of the claims and emphasized that class representatives are not “required to be experts.” Id. The Court further concluded that each named plaintiff was an Illinois resident at some point during the proposed class period and that there was no evidence of any conflict between the interests of any named plaintiff and the interests of absent class members. Id.
The Court also found that common questions of law and fact predominated over any questions affecting individual members, and that a class action was an appropriate method for adjudicating the claims. Id. at 17, 22. Apple argued that commonality and predominance were lacking because: (1) Siri is optional and not all Apple device users enable it; (2) Siri users do not all activate Siri in precisely the same manner; and (3) Siri’s speech recognition functions changed during the class period. Id. The Court rejected each contention.
First, the Court explained that users who never enabled Siri are not members of the proposed class, rendering that argument irrelevant. Id. Second, the Court concluded that regardless of how Siri is activated, Plaintiffs plausibly alleged that Siri’s ASR process uniformly generates feature vectors that are capable of identifying a speaker from all user utterances. Id. The Court further reasoned that the optional Siri features cited by Apple do not undermine plaintiffs’ claims based on Siri’s ASR process and, at most, could give rise to additional BIPA claims for users who opted in to those features. Id. at 11-12. Third, the Court found that alleged changes to Siri’s speech recognition functions during the class period did not alter the uniform operation of the ASR process and therefore did not defeat commonality or predominance. Id. at 12.
Apple also contended that class membership could only be established through “individualized” proof, which it argued defeated certification. Id. at 14. The Court disagreed. Citing Svoboda v. Amazon.com, Inc., 2024 WL 1363718, *10 (N.D. Ill. Mar. 30, 2024) (which we previously blogged about here), the Court held that issues concerning how class members are identified are matters of class management, not class certification. Id. at 16. The Court explained that, if liability is established, class members could submit affidavits attesting to their Siri use in Illinois, which could then be cross-checked against Apple IDs, home addresses, IP addresses, and geolocation data. Id.
Finally, the Court concluded that proceeding on a class basis was the most efficient and fair method of adjudication. Id. at 22. The Court noted that Apple’s implicit alternative (i.e., requiring millions of individual BIPA lawsuits by Illinois Siri users) would impose a severe burden the judicial system. Id. at 21.
Implications for Companies
This decision serves as a reminder of the significant risks associated with collecting or retaining biometric information without BIPA-compliant policies and practices. As Zaluda illustrates, the larger the company, the larger the potential class size (and the greater exposure to statutory damages). Although the ultimate size of the certified class remains to be determined, it is likely to number in the millions. Companies of all sizes should view this ruling as a wake-up call regarding the substantial liability that can result from noncompliance with Illinois’ biometric privacy laws.
Thank you to all our clients who attended the in-person book launch of the Duane Morris Class Action Review in Chicago at the Northwestern Pritzker School of Law last week, as well as our nationwide and international audience who participated via Zoom.
Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman, special counsel Justin Donoho and Tyler Zmick, and senior associate Hayley Ryan with their discussion of the key trends and developments analyzed in the 2026 editions of the Privacy Class Action Review and the Data Breach Class Action Review.
Jerry Maatman: Thank you, loyal blog listeners and readers. Thank you for joining us again for our next episode of our podcast, The Class Action Weekly Wire. I’m Jerry Maatman of Duane Morris, and joining me today are some of my favorite colleagues, Justin, Hayley, and Tyler. Thanks for joining us.
Justin Donoho: Thank you, Jerry, great to be here.
Tyler Zmick: Thanks, Jerry, it’s a pleasure to be here today.
Hayley Ryan: Thanks for inviting me, Jerry.
Jerry: Today’s a great day, and an exciting one, because we’re announcing the publication and launch of two new Duane Morris publications: the 2026 Data Breach Class Action Review, and the 2026 Privacy Class Action Review. We’ve got a lot to unpack, because 2025 was a huge area and a lot happened in the class action space, and especially both with respect to data breach and privacy class action litigation. Let’s start with data breach – what happened in 2025?
Justin: Yes, Jerry, huge is the right word. If anyone thought data breach class actions were slowing down, 2025 pretty much put that theory to rest.
Hayley: Completely, Justin. Data breach class actions continue to be one of the fastest growing areas in complex litigation. At this point, it’s almost predictable. A breach gets reported, the headlines follow, and then the class actions aren’t that far behind.
Tyler: And, interestingly, it’s not just the massive breaches anymore – even smaller data incidents are triggering lawsuits, which really tells you a lot about how aggressive and sophisticated this litigation space has become.
Jerry: Let’s start with the numbers, because, in my view, they’re eye-popping. In the first half of 2025 alone, there were 944 data breach class actions filed – nearly 158 per month.
Justin: That’s right, Jerry, and by the end of the year, that number ballooned to over 1,822 filings. That’s a staggering volume by any measure.
Hayley: Absolutely, and what’s especially striking is the breadth of industries impacted. Finance, healthcare, tech, retail, education, professional service – no sector was immune in 2025.
Tyler: And many of these data breaches involved hundreds of millions of employee and consumer records, and that scale really drives everything. Litigation risk, settlement exposure, and also a company’s reputational harm.
Jerry: When you peel back the onion skin, what, in essence, is driving, this mushroom cloud of class actions in the data breach space is a big part of this, the kind of ‘evolving threat’ landscape.
Justin: Yes, absolutely, Jerry. Cybercriminals today are more sophisticated than ever before. Ransomware attacks, in particular, surged in 2025, with criminals demanding payment not to publish stolen data.
Hayley: And even paying the ransom doesn’t solve the problem. There’s no guarantee the data gets deleted, and many believe those payments just encourage more attacks.
Tyler: Then when you layer that on top of remote work, cloud storage, and increasingly complex IT environments, you end up with a recipe for more large-scale breaches, and as a result, more lawsuits.
Jerry: I think the statistics that we gathered and analyzed for 2025 also tell a story of increasing settlement values in the class action space. What do you see in terms of settlement numbers?
Justin: Yeah, those settlements are going higher. That’s being pushed by larger classes, more sensitive data, and courts are increasingly sympathetic to plaintiffs as well.
Hayley: And in addition, legal fees are also climbing, as these cases become more complex and specialized.
Tyler: Which is why proactive cybersecurity and incident response planning are just so critical in today’s day and age. Companies with tested response playbooks tend to fare much better, both operationally and in litigation. The Data Breach Class Action Review is therefore a crucial resource for corporate counsel and companies to have in their toolbox to understand this area of class action litigation.
Jerry: Well, that’s absolutely true. Let’s pivot now to the Privacy Class Action Review, because this is an area that’s heating up and accelerating just as fast, if not faster, with the law struggling to keep up with technological advancements.
Justin: Yes, data privacy, another one of my favorite topics. Companies are adopting technologies that allegedly collect web browsing, biometric, genetic, and other personal data, and plaintiffs are challenging nearly all of it, a lot nationwide – everywhere.
Hayley: Yes, adtech litigation exploded again in 2025, with aggressive theories under statutes like the VPPA, or the Video Privacy Protection Act, the ECPA, or the Electronic Communications Privacy Act, and CIPA, which is the California Invasion of Privacy Act, with widely inconsistent rulings on standing and consent.
Tyler: I would absolutely echo the inconsistent ruling point and the complexity that raises for companies. I would also note that we saw a divergence at the appellate level in 2025, specifically we had the Ninth Circuit narrowing the VPPA exposure when it comes to movie theaters, while the Seventh Circuit expanded consumer status when it comes to free online services.
Jerry: It also seemed from the case law and the rulings that Illinois remains ground zero for businesses, especially with respect to litigation over biometrics and genetic privacy with the BIPA statute continuing to generate massive filings, and the GIPA now just following closely behind. When you put all this in the mix, what are your prognostications for 2026 in terms of what this means for companies on the privacy front?
Justin: Jerry, based on the trends we’re seeing, I think we can expect continued growth in both data breach class actions and privacy class actions. We’re seeing lots of divergent rulings in a lot of these different areas. We’ll continue to see some forum shopping as a result as well, but generally continued growth.
Tyler: And settlement values will likely keep rising as well, especially where courts grant class certification. We will be on the lookout to see how plaintiffs in 2026 fare in obtaining class certification, given the low rate from 2025.
Jerry: Well, that underscores why we put these two new publications together for clients in terms of corporate toolkits for getting their arms around data breach and privacy risks in the class action space. It’s certainly turning into an increasingly high-stakes terrain. So, for anyone who wants to dig a little deeper, the reviews are available — at the right price: for free – on our blog and website. For the remainder of the year, we’ll certainly be continuing to cover and dig deep into data breach and privacy class action litigation developments, both on our blog and in the Class Action Weekly Wire. So, stay tuned! And thanks so much, Justin, Hayley, and Tyler, for joining us on this episode of the Class Action Weekly Wire.
Justin: Thank you, Jerry, and thank you, listeners.
Tyler: Glad to be a part of the podcast, and thank you all, listeners. Be sure to download your copy of the review.
By Gerald L. Maatman, Jr., Jennifer A. Riley, Daniel D. Spencer, Katherine L. Alphonso, and Kenny T. Tran
Duane Morris Takeaways: On January 21, 2026, in Yeh v. Barrington Pacific, LLC, Case No. B337904, 2026 Cal. App. LEXIS 30 (Cal. App. Jan. 21, 2026), the California Court of Appeal for the Second Appellate District held that plaintiffs have standing to sue under the Investigative Consumer Reporting Agencies Act (ICRAA) without showing any actual injury because the statute authorizes a $10,000 minimum recovery untethered to any actual harm. At the same time, the Court of Appeal affirmed dismissal of the Unfair Competition Law (UCL) claims, reinforcing that UCL standing remains firmly rooted in concrete economic loss that cannot be manufactured from purely technical statutory violations.
Case Background
Barrington Pacific, LLC (Barrington) and its related entities own and operate multiple apartment complexes across Los Angeles, all managed under a centralized process. Id. at *3. Prospective tenants were required to complete a standardized rental application, authorize background screening, and pay a nonrefundable $41.50 application fee. Id. at *4. That fee was expressly allocated to obtaining credit reports, eviction histories, and resident screening reports, as well as processing internal costs. Id. Each applicant signed a written authorization permitting Barrington to obtain background information “including, but not limited to, resident screening and credit checking.” Id.
Between November 2020 and July 2022, more than 100 applicants, who were ultimately approved as tenants, filed individual lawsuits alleging Barrington violated the ICRAA’s disclosure requirements. Id. The alleged violations were procedural in nature, including failure to provide plaintiffs with a means of requesting a copy of such reports, failure to identify the consumer reporting agency, failure to disclose the scope of the investigative consumer reports procured, and failure to offer or provide copies of the reports. Id. at *4-5. Notably, no plaintiff alleged inaccurate information, denial of housing, identity theft, or any adverse consequence whatsoever. Id. at *7. Three plaintiffs also asserted UCL claims premised on the same alleged ICRAA violations. Id. at *5.
After the cases were related and consolidated, with Yeh designated as the lead action, Barrington moved for summary judgment. Id. at *5. Barrington argued that plaintiffs lacked standing because they could not show concrete injury, relying heavily on Limon v. Circle K Stores Inc., 84 Cal.App.5th 671 (2002), which held that uninjured plaintiffs lack standing under the federal Fair Credit Reporting Act (FCRA) when claims are based solely on statutory violations. The trial court agreed, concluding that the ICRAA’s $10,000 provision did not create standing through statutory penalty and that plaintiffs suffered no harm because they became tenants and alleged no inaccuracies in any of the information Barrington had. Id. at *6-7. Summary judgment was entered for Barrington on both the ICRAA and UCL claims. Id. at *6.
The California Court of Appeal’s Decision
The Court of Appeal reversed as to the ICRAA, holding plaintiffs need not prove actual harm to bring an ICRAA claim. Id. at *25. Central to the Court of Appeal’s analysis was Civil Code section 1786.50(a)(1), which permits recovery of “[a]ny actual damages sustained by the consumer as a result of the failure or, except in the case of class actions, ten thousand dollars ($10,000), whichever sum is greater.” Id. at *19. Emphasizing the disjunctive “or,” the Court of Appeal concluded that actual damages and the $10,000 amount are alternative remedies, not cumulative or interdependent. Id. at *20. The Court of Appeal relied on a line of recent California decisions recognizing that statutory schemes may confer standing through statutory damages or penalties untethered from actual harm. It cited Chai v. Velocity Investments, LLC, 108 Cal.App.5th 1030 (2025), Guracar v. California Capital Insurance Co., 111 Cal.App.5th 337 (2024), and Kashanian v. National Enterprise Systems, Inc., 114 Cal.App.5th 1037 (2025), each of which held that statutory damages provisions create standing even where plaintiffs admit no concrete injury. Id. at *11-16. Like those statutes, the ICRAA creates informational rights and attaches a fixed monetary consequence to their violation in order to punish and deter noncompliance. Id. at *18.
The Court of Appeal expressly declined to follow Limon, explaining that its reasoning was tied to the FCRA’s distinct statutory language and federal Article III standing concerns. See Limon, supra, 84 Cal.App.5th at 700-03. The Court of Appeal reasoned that the legislative materials make clear that the “ICRAA was designed to overcome the FCRA’s practical limitations by ensuring that consumers could obtain a nontrivial recovery and thus would be motivated to enforce ICRAA, even when actual damages were nonexistent.” Id. at *24-25. Legislative history also showed the California Legislature intentionally set a minimum recovery, which was $300 in 1975 and has since been increased to $10,000, to incentivize enforcement and compliance. Id. at *25. Of note, opponents of the ICRAA’s enactment criticized the statute precisely because it would impose liability “without regard to whether the individual has ever suffered damages,” further confirming that this result was not accidental but deliberate. Id. at *24.
The Court’s Reasoning on the UCL Claims
Where the opinion strongly favors the defense bar is its treatment of the UCL claims, the Court of Appeal affirmed summary adjudication, holding that Business and Professions Code section 17204 requires injury in fact and loss of money or property, regardless of whether the predicate statute allows recovery without harm. Id. at *31-32. Relying on cases such as Peterson v. Cellco Partnership, 164 Cal.App.4th 1583 (2008), the Court of Appeal reiterated that private UCL standing demands real economic injury. Id. at *31. Per Peterson, a private plaintiff must make a twofold showing: “he or she must demonstrate injury in fact and a loss of money or property caused by unfair competition.” Peterson, 164 Cal.App.4th at 1590.
Here, the Plaintiffs’ theory that the $41.50 application fee constituted lost money failed outright. Id. at *32. They argued that they were harmed because they were required to pay for a report that they were not given a copy of. Id. The Court of Appeal disagreed – the rental application described how the $41.50 non-refundable processing fee would be used to screen applicants with respect to their credit history and other background information. Id. Moreover, the application broke down the elements of the $41.50 fee: $22.99 for credit and screening reports, and $18.51 in costs, including overhead and soft costs, related to the processing of the application. Id. Since the application did not suggest that the $41.50 fee was for a consumer report to be provided to the applicant, the Court of Appeal determined that Plaintiffs received precisely what they paid for: the processing and consideration of their rental applications, which resulted in their approval as tenants. Id. at *32-33. Finally, any failure to provide plaintiffs with copies of their consumer reports within three days also does not constitute an injury because plaintiffs failed to allege any concrete or particularized harm as a result of the delay. Id. at *33.
The Court of Appeal emphasized that applicants paid for screening and processing, received exactly that, and were approved as tenants. Id. The alleged failure to timely provide copies of reports did not deprive plaintiffs of property, cause lost opportunities, or result in financial harm. Id. Technical noncompliance alone was not enough.
Implications for Companies
The takeaway here is twofold.
First, Investigative Consumer Reporting Agencies (ICRAs) under the ICRAA, loosely defined as any person who, for compensation, gathers or communicates information regarding a consumer’s character, reputation, or personal characteristics, usually obtained through extensive, often more personal investigative methods — such as interviews or public record checks — should carefully audit ICRAA disclosures as plaintiffs can proceed without needing to prove actual harm. This decision underscores the ICRAA as a strict liability statute with teeth, and technical compliance matters even when no one is harmed.
Second, this case confirms that California courts remain unwilling to dilute UCL standing requirements. Even in an era of expansive statutory enforcement, courts continue to draw a hard line against no injury, no loss UCL claims. This ruling provides powerful authority to limit exposure by cutting off UCL claims early where plaintiffs cannot show injury in fact and a loss of money or property.
By Gerald L. Maatman, Jr., Eden Anderson, Rebecca Bjork, Olga Romadin
Duane Morris Takeaways:On January 28, 2026, in Avery, et al. v. TEKsystems, Inc., 2026 U.S. App. LEXIS 2091, Case No. 24-5810 (9th Cir. Jan 27, 2026), the Ninth Circuit issued an order affirming a district court’s denial of an employer’s motion to compel arbitration. TEK, an IT staffing company, appealed a decision by the district court that declined to enforce arbitration under an agreement it had rolled out after a class certification ruling by a group of recruiters alleging unpaid overtime. The Ninth Circuit found that TEK had issued misleading communications with the arbitration agreement, and had inverted the class opt-out proceedings by requiring putative class members to opt out of the agreement to remain in the litigation. The decision highlights the impact that the choice of language employers utilize in communicating about arbitration agreements has on future litigation and underscores the authority of district courts in procedural considerations when an entire arbitration agreement is challenged.
Case Background
Four plaintiffs brought a putative class action in 2022, alleging that the defendant, a staffing agency specializing in placing IT professionals on temporary assignments, had violated California wage and hour laws by misclassifying recruiters as exempt from overtime and failing to provide meal and rest breaks. Id. at 6. Following nearly two years of litigation and a ruling by the District Court for the Northern District of California granting class certification, TEK implemented a new mandatory arbitration agreement that was automatically applicable to putative members of the class action via a series of emails sent around the holiday season. Id. at 6-8. The emails contained language referring to “exorbitant fees” of class action litigation and disparaged them as “wasteful” and “inefficient.” Id. at 3. The new arbitration agreement precluded class members from participating in the class automatically and required individuals wishing to remain in the class to either resign their positions or to affirmatively opt out of the arbitration agreement. Id. at 12. TEK then moved to compel arbitration.
The District Court denied the motion. It found that the new arbitration agreement was implemented in a manner that was misleading and that the “unilateral” communication of the new arbitration agreement “threatened the fairness of litigation“ and subverted Rule 23’s opt-out procedure by turning it into an opt-in proceeding. Id. at 5.
On appeal, TEK argued that the district court had erred in denying its motion to compel arbitration because it had no authority to invalidate a binding arbitration agreement under Federal Rule of Civil Procedure 23(d). TEK’s argument was rooted in its reading of Rule 23(d) as limiting a district court’s authority to impose conditions on defendants, and also argued that under the Federal Arbitration Act (FAA) a procedural rule could not be used to invalidate an arbitration agreement.
The Ninth Circuit’s Decision
A unanimous panel of the Ninth Circuit affirmed the district court’s decision declining to enforce the motion to compel arbitration.
The Court of Appeals found that under Rule 23(d), the district court had the authority to decline to compel arbitration to ensure fairness, and that the district court had applied the rule correctly. Examining the U.S. Supreme Court’s decision in Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), the Ninth Circuit found that the district court’s broad authority under Rule 23(d) was applicable to collective actions, that it had a “duty” to exercise its authority to regulate the opt-in process, and thus the district court could refuse to enforce the arbitration agreement in dispute because it had found that TEK had “subverted” the opt-out process by requiring putative members to opt in instead. Id. at 20. The Ninth Circuit determined that Rule 83(b), which permitted a judge to “regulate practice” in the absence of controlling law, and wrote that when read in tandem with Rule 23(d), a district court had the authority to make appropriate decisions with regard to the parties, including in disputes over arbitration. Id. at 24-25.
The Ninth Circuit reviewed the emails that TEK had sent to implement the new arbitration agreement and found that the “disparaging” language used by the company to describe class action litigation was misleading, inaccurate, and confusing, and as a result had had a “harmful” effect on class membership, particularly since it was sent at the end of December 2023 and went into effect in January 2024. Id. at 27-29.
Finally, the Ninth Circuit opined that the arbitration agreement’s delegation provision, which delegated issues of arbitrability to an arbitrator, did not bar a district court from ruling on the enforceability of the arbitration agreement because plaintiffs had challenged the validity of the entire arbitration agreement, including the delegation clause, and under the Supreme Court’s ruling in Coinbase, Inc. v. Suski, 602 U.S. 143 (2024), the whole contract could be considered by the district court as part of the dispute. Id. at 31.
Implications For Class Action Defendants
When implementing a new arbitration agreement, employers should be mindful of the language and timing of their communications on such agreements so as not to appear to be attempting to influence recipients and running afoul of additional scrutiny in litigation.
Duane Morris Takeaways: Data breaches are becoming increasingly common and detrimental to companies. The scale of data breach class actions continued its record growth in 2025, as companies faced copycat and follow-on lawsuits across multiple jurisdictions. The last year also saw a virtual explosion in privacy class action litigation. As a result, compliance with privacy and data privacy laws in the myriad of ways that companies interact with employees, customers, and third parties is a corporate imperative.
To that end, the class action team at Duane Morris is pleased to present the third editions of the Data Breach Class Action Review – 2026 and the Privacy Class Action Review – 2026. These publications analyze the key data breach and privacy-related rulings and developments in 2025 and the significant legal decisions and trends impacting data breach and privacy class action 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 download a copy of the Duane Morris Data BreachClass Action Review – 2026 eBook.
Click here to download a copy of the Duane Morris Privacy Class Action Review – 2026 eBook.
Stay tuned for more data breach and privacy class action analysis coming soon on our weekly podcast, the Class Action Weekly Wire.
By Gerald L Maatman, Jr., Shannon Noelle, and Elizabeth G. Underwood
Duane Morris Takeaways: On November 20, 2025, in Buchanan v. Vuori, Inc., No. 5:23-CV-01121 (N.D. Cal. Nov. 20, 2025), Magistrate Judge Nathanael M. Cousins of the U.S. District Court for the Northern District of California imposed sanctions on plaintiff’s counsel for using artificial intelligence to generate case law citations in a motion for preliminary approval of a wage and hour collective action settlement. The sanctions included an order directing plaintiff’s counsel to pay $250 to the clerk of court, striking the motion without leave to refile, and referring plaintiff’s counsel to the Court’s Standing Committee on Professional Conduct. Importantly, because of the sanctions, Magistrate Judge Cousins found plaintiff’s counsel to be an inadequate representative of the class and precluded plaintiff’s counsel from filing an additional motion for approval of the class settlement. This required defense counsel to file a case management statement requesting a stipulation of dismissal that was approved on January 8, 2026. Plaintiff’s counsel’s use of AI ultimately delayed final disposition of the action until months later and underscores the growing trend of judicial commitment to accountability with respect to attorney use of AI in drafting legal filings.
Case Background
On March 14, 2023, a former Vuori, Inc. (“Vuori”) employee, Terrence Buchanan, sued Vuori, alleging that it had violated the Fair Labor Standards Act (FLSA) and various California Labor Codes by miscalculating the overtime paid to their employees by failing to include commissions or bonuses in calculating overtime. See Case No. 5:23-cv-01121, ECF No. 1. Eventually, the parties settled the litigation.
On October 3, 2025, after a first try for settlement approval failed, counsel for Plaintiff filed a second motion for preliminary approval of a collective action settlement (ECF No. 81) followed by a corrected motion on October 28, 2025 (ECF No. 89). Upon review of the corrected motion, the Court found that the memorandum in support of the motion included 8 quotations “supposedly attributable to a real case” that did not actually appear in the cited case and “one nonexistent case.” See ECF No. 96, at 1. On November 5, 2025, the Court ordered plaintiff’s counsel to show cause as to why he should not be sanctioned pursuant to Federal Rule of Civil Procedure 11(c) and referred to the Court’s Standing Committee on Professional Conduct under Civil Local Rule 11-6 for providing fabricated case law to the Court. Plaintiff’s counsel filed a response and proof of service that he provided the Court’s order to show cause to his client. See ECF Nos. 92, 93. He also filed a supplemental response. See ECF No. 94. The Court held a hearing on the order to show cause on November 19, 2025, at which counsel and plaintiff Buchanan appeared. See ECF No. 96, 1-2.
Order Imposing Sanctions And Finding Class Counsel Is Therefore Inadequate
Magistrate Judge Cousins ordered sanctions by way of payment of $250 to the clerk of court pursuant to Federal Rule of Civil Procedure 11(c), referred Plaintiff’s counsel to the Standing Committee on Professional Conduct pursuant to Civil Local Rule 11-6, and ordered that the motions for preliminary approval be stricken without leave to refile.
In support of this decision, Magistrate Judge Cousins explained that “the rise in non-existent cases and quotations hallucinated by artificial intelligence tools” is of “particular concern.” ECF No. 96 at 3. He noted that Plaintiff’s counsel “acknowledge[d] without reservation” that his motion “contained one non-existent case citation.” ECF No. 92, at 3 (citing ECF No. 92 at 2). Plaintiff’s counsel also admitted to using about six different AI tools to prepare his motion “[a]s a solo practitioner under time pressure” and that he used the tools to check one another. Id. at 3-4. The Court noted that the corrected memorandum of law in support of the second motion for preliminary approval, did not correct the false case law hallucinated by the AI tools. Id. at 4. The Court made clear that the intentions of Plaintiff’s counsel were irrelevant and that his use of AI which “led him to submit a hallucinated case to the Court through his motion” and failure to conduct a reasonable inquiry into the law cited in his motion violated Rule 11(b) and Local Rule 11-4. Id. at 4-5. Specifically, the Court found that Plaintiff’s counsel violated his duty of candor owed to the tribunal under California Rule of Professional Conduct 3.3 by citing nonexistent cases and quotations to the Court and certifying “via signature that he had conducted reasonable inquiry into these citations when he had not.” Id. at 5.
Though Plaintiff’s counsel offered to forfeit attorneys’ fees in the matter, to file an amended motion certifying that he verified all citations, and to complete continuing legal education, the Court declined his suggested sanctions and instead ordered that: (1) plaintiffs’ second motion for preliminary approval of a class action settlement and corrected motion be stricken with prejudice; (2) Plaintiff’s counsel pay the clerk of court $250 by December 5, 2025; and (3) Plaintiff’s counsel be referred to the Court’s Standing Committee on Professional Conduct in connection with his violation of Local Rule 11-4 and unprofessional conduct. As to the third remedial measure, the Standing Committee has authority to conduct further investigation or impose additional discipline, such as continuing legal education or notification of the state bar as it deems necessary and appropriate. Magistrate Judge Cousins added that it was the Court’s “hope” that “the experience with the Standing Committee also proves constructive for Plaintiff’s counsel, who attests that he is a very busy sole practitioner who faces various logistical constraints.” See ECF No. 96 at 6.
Finally, and notably, the Court found that striking plaintiff’s motion for settlement approval “necessarily raises the questions” of whether Plaintiff’s counsel could adequately represent the class through final approval of settlement. The Court found that Plaintiff’s counsel could not file an amended motion for preliminary approval of the class settlement because “it does not find that he is adequate class counsel, which would prevent the Court from approving a renewed motion for settlement approval.” See ECF No. 96, at 7.
Delay Of Final Disposition Due To Sanctions And Inadequate Class Representative Finding
On December 5, 2025, the Court docketed and acknowledged receipt of counsel’s payment of $250 to the clerk of court. See ECF No. 98. As Magistrate Judge Cousins found Plaintiff’s counsel to be an inadequate class representative and therefore prohibited him from filing further motions to approve the class action settlement, on January 7, 2026, counsel for Vuori was required to file a case management statement to get final disposition of the action and setting out Vuori’s position that the parties signed a settlement agreement containing “a general release of Plaintiff’s claims against Defendant” and, per the terms of that agreement, “Plaintiff was obligated to dismiss this action with prejudice no later than December 31, 2025.” See ECF No. 100, at 2. To that end, counsel for Vuori requested that “Plaintiff immediately dismiss this action with prejudice.” Id. On that same day, Plaintiff’s counsel filed a Stipulation of Dismissal with the Court. See ECF No. 101. On January 8, 2026, the Court granted the stipulation of dismissal with prejudice by order signed by Magistrate Judge Cousins. See ECF No. 102.
Implications For Companies
This order is unprecedented. The implications of the sanctions order and the aftermath of the order is two-fold. First, employers and companies should review class counsel’s filings scrupulously by noting any citations or quotations that seem incorrect and AI-generated as this may build a case for disqualifying class counsel and may prove as a barrier to getting approval of a class settlement agreement. Second, employers and companies must be diligent in ensuring that in-house and outside counsel alike use human verification in connection with the use of any AI tool when drafting court filings to ensure that all case law citations and quotations have been independently verified by an attorney prior to filing such information with a court to avoid similar deleterious consequences.
Duane Morris Takeaway:This week’s episode features Duane Morris partners Jerry Maatman, Jennifer Riley, and Daniel Spencer with their discussion of the key trends and developments analyzed in the new edition of the EEOC And Government Enforcement Litigation Review – 2026.
Jerry Maatman: Thank you for being here, loyal blog readers and listeners, for the next episode of our regular podcast series, The Class Action Weekly Wire. My name is Jerry Maatman, and I’m a partner at Duane Morris, and joining me today are my colleagues and fellow partners, Jen Riley and Daniel Spencer. Welcome.
Jennifer: Great to be here, Jerry. Thanks for having me.
Daniel: Yeah, thanks, Jerry.
Jerry: Today, we’re here to announce our publication of the 2026 edition of Duane Morris’ EEOC And Government Enforcement Litigation Review. The review is available on our blogsite as an e-book and is a must-read for employers.
Jennifer: Absolutely, Jerry. Government enforcement litigation continues to look more and more like class action litigation in terms of both its exposure and its complexity. When you’re dealing with lawsuits brought by agencies like the EEOC or the Department of Labor, you’re often looking at significant risk, a large number of claimants, and serious reputational concerns for the companies involved.
Daniel: And one of the key points that we emphasize in the Review is that while these cases resemble class actions, they don’t actually operate the same way procedurally. In private class actions, plaintiffs have to jump through a bunch of hoops, like Rule 23, to get through class certification. That’s not the case with government enforcement and litigation.
Jerry: Exactly. A great example is what are known as EEOC systemic pattern or practice lawsuits, where there’s no class certification requirement, and the practical impact of the case, however, is just like a class action in terms of the amount of money necessary to defend it, the amount of management time that has to be allocated to the defense of the case, and the need to defend against widespread company-wide allegations of alleged discriminatory behavior. It’s certainly a high-stakes sort of lawsuit.
Jennifer: And that’s why employers cannot afford to underestimate these cases. Even without Rule 23, EEOC systemic lawsuits raise many of the same strategic and litigation challenges as private class actions raise. And those agencies are aggressive – the EEOC and the DOL, they continue to be two of the most active federal enforcement bodies.
Daniel: Yeah, Jen, and the numbers from 2025 really drive that point home. In fact, the top 10 EEOC enforcement action settlements and verdicts totaled $41.43 million, which is a notable increase from $25.95 million in 2024. The trend tells us that enforcement activity is not slowing down.
Jerry: I think it’s pertinent to note that the Department of Labor numbers are even more eye-popping from the perspective of corporate decision makers. In 2025, the top 10 settlements in the DOL space totaled $3.29 billion. That was up, quite a bit from 2024, when it was $335 million. So, you can see how dramatic the increase has been with the Department of Labor on its radar screen, looking for employers engaged in what it calls as alleged wage theft against workers.
Jennifer: Those DOL cases covered a range of issues, also Fair Labor Standards Act claims, as well as litigation involving consent decrees and injunctions. The rulings we analyzed in the review show how broad and potentially impactful the DOL enforcement actions can be.
Daniel: And that’s why this Review is so important for companies across the country. It looks at the legal issues that are being litigated, the enforcement strategies these agencies are using, and identifies and understands those critical trends for companies trying to stay ahead of the risk.
Jerry: Well, that’s well said, Jen and Daniel. And for anyone who wants to dig deeper, the full Review is available in e-book format on the Duane Morris Class Action Defense Blog. And we’ll be continuing to cover legal developments and rulings in the EEOC and the DOL space over the remainder of 2026, so stay tuned to the Class Action Weekly Wire.
Jennifer: Thanks for having me on the podcast, Jerry, and thanks to our listeners for being here. As always, subscribe to stay updated on the latest trends in class action law.
Daniel: Glad to be a part of the podcast, and thanks very much to all the listeners. Be sure to download your copy of the Review today.
By Gerald L. Maatman, Jr., Shannon Noelle, and Anna Sheridan
Duane Morris Takeaways: On January 7, 2026, in Valli et al. v. Avis Budget Group Inc. et al., Case No. 24-3025 (3d Cir. Jan. 7, 2026), the Third Circuit issued a mandate vacating an order from the District Court for the District of New Jersey denying a rental car company’s motion to compel arbitration and remanding the action for the District Court to address properly presented challenges to enforceability of the arbitration provisions that it did not reach in its decision. Avis appealed an order from the District Court denying its motion to compel arbitration of the claims of a certified class of renters presenting legal challenges to imposition of fees associated with traffic or parking fines incurred during the rental period. The Third Circuit found that Avis did not waive its right to compel arbitration by participating in litigation for years with the named Plaintiffs (whose rental agreements did not contain arbitration provisions) as Avis asserted its arbitration rights as an affirmative defense in its answers, raised the issue in opposition to class certification, and promptly field to a motion to compel after its Rule 23(f) petition challenging class certification was denied. This decision underscores that where named plaintiffs are not subject to arbitration provisions, but class members may have such constraints, pre-certification conduct preserving arbitration rights is essential to avoid waiver post-certification when arbitration rights are ripe.
Case Background
The named Plaintiff Dawn Valli filed a putative class action in September 2014 challenging Avis’ imposition of fees associated with a speeding traffic violation caught by a traffic camera that Avis paid and then charged Plaintiff Valli the $150 traffic fine it covered as well as a $30 administrative fee. Case No. 24-3025, ECF No. 53-3, at 3. The notice that Avis sent to Plaintiff Valli warned that Avis would charge $180 to Ms. Valli’s credit card if she did not make timely payment. Id. at 4. Plaintiff Valli brought an action on behalf of herself and other putative class members asserting state law claims including violations of the New Jersey Consumer Fraud Act and unjust enrichment on the theory that Avis deprived renters of an opportunity to contest the traffic violations by paying fines before notifying renters of the infractions and allowing them the ability to contest the fines. Id.
Avis moved to dismiss the complaint several times for failure to state a claim. Id. at 4-5. On April 1, 2016, Avis updated its rental agreement to include a mandatory arbitration provision for disputes arising out of the rental agreement and rental of its vehicles. Id. at 5. After Avis filed a renewed motion to dismiss (which did not mention the arbitration agreement as it only applied prospectively), the District Court denied the motion on May 10, 2017. Id. at 6. On May 25, 2017, Avis answered the First Amended Complaint (“FAC”) asserting its arbitration rights as an affirmative defense. Id. In June 2018, Avis allowed Ms. Valli to file a second amended complaint (“SAC”) adding another named Plaintiff. Id. at 7. Avis again invoked its arbitration rights as an affirmative defense in its answer. Id.
In July 2019, the two named Plaintiffs moved to certify a class of renters that were required to reimburse Avis for traffic, parking, tolls, or other violations and associated administrative fees. Id. at 8. In support of the motion for class certification, Plaintiffs defined the class period for the first time as September 30, 2008, through the present. Id. In opposition to class certification, Avis argued that the named Plaintiffs—who were not subject to its 2016 arbitration provisions—could not adequately represent the interest of renters that must arbitrate their claims. Id. Avis also argued that, at the motion to dismiss stage, such arguments were not ripe as it was unclear how the named Plaintiffs would define the class and whether it would include renters bound by arbitration agreements. Id. Oral argument on class certification occurred two years later, but Avis asserted the argument that the arbitration provisions defeated class certification. Id. at 8-9. Plaintiffs countered that Avis waived the argument by not having raised it earlier and choosing to participate in the litigation. Id. at 9. The District Court ordered supplemental briefing on the issue. Id. In its supplemental brief filed on September 15, 2022, Avis reiterated that nearly half the members of the putative class signed arbitration agreements and the named Plaintiffs (who had not) could not fairly represent the interests of those putative class members. Id. Avis filed another brief approximately two weeks later, arguing that it had preserved its arbitration rights by raising arbitration as an affirmative defense in its answers to both the FAC and SAC. Id. Avis also emphasized that Plaintiffs’ July 2019 class certification motion was the first time they identified arbitration-bound renters as putative class members. Id.
In October 2023, the District Court certified a subclass of individuals that rented an Avis vehicle from September 30, 2008, through the present and whose rented vehicle was the subject of an alleged parking, traffic, tolls, or other violation, where the class member was charged for such fine, penalty, and court costs, and/or associated administrative fee. Id. at 10. Avis filed a Rule 23(f) petition challenging certification of the class that was denied in November 2023. Id. at 10-11. Three months later, in February 2024, Avis moved to compel individual arbitration of the relevant class members’ claims. Id. at 11. Avis disputed that it waived its right to enforce its arbitration agreements arguing that any earlier motion to compel would have been directed at unnamed class members and would have therefore been futile before class certification. Id. On September 30, 2024, the District Court denied Avis’ motion to compel arbitration and faulted Avis for failing to formally seek to enforce arbitration until after the class had been certified. Avis appealed that decision to the Third Circuit.
The Third Circuit’s Decision
The Third Circuit found that Avis’ pre-certification litigation conduct was indeed relevant to the waiver issue, but this conduct indicated that the company had adequately preserved its arbitration rights.
The Third Circuit found that “[c]entral to th[e] case” was the “interplay between” the doctrine of waiver and futility. Id. at 12. The Third Circuit resolved the parties’ dispute as to whether Avis’ pre-certification conduct was relevant to the issue of waiver by answering this question in the affirmative. Id. at 14. In support of that finding, the Third Circuit found it notable that Avis “knew” of its prospective right to enforce arbitration “even if it lacked a present ability to enforce it pre-certification.” Id. at 19. The Third Circuit reasoned that the purpose of the waiver doctrine is to prevent “gamesmanship” or permitting a defendant to litigate aggressively for a merits advantage so that it can pivot to arbitration “the moment it becomes advantageous to do so, all without consequence.” Id. at 20. Yet, the Third Circuit found that the doctrine of futility “excuses the failure to file a formal motion to compel as to the unnamed class members” because to do so would be futile given that a District Court lacks jurisdiction to grant such a request. Id. The Third Circuit next addressed what a party must do to preserve future arbitration rights it cannot presently enforce. Id. at 21. The Third Circuit held that to implicitly waive arbitration rights, a party must litigate in a way that is inconsistent with a desire to arbitrate.
The District Court had identified two such events: (1) Avis’ motion of August 18, 2016 that did not mention arbitration; and (2) Avis’ participation in discovery and mediation. Id. at 26. Rejecting the first ground for finding waiver, the Third Circuit opined that it was not until two years later that plaintiffs defined the putative class to include post-April 2016 renters thus the motion to dismiss did not waive its arbitration rights. As to the second ground for finding waiver, the Third Circuit ruled that while Avis did not object to discovery or seek to exclude information concerning arbitration-bound renters, Plaintiffs could identify “only a single instance in which Avis produced information not also relevant to other customers who are not subject to arbitration.” Id. at 27. Further, “critically, Avis never sought discovery specifically targeted at arbitration-bound putative class members.” Id. at 27-28. The Third Circuit clarified that “discovery and mediation conduct can support a finding of waiver in the appropriate circumstances,” but explained that “discovery directed at non-arbitrable claims does not, by itself, waive the right to arbitrate arbitrable claims.” Id. at 28. The Third Circuit also found it significant that Avis “repeatedly put its intent to arbitrate on record” by consistently asserting its arbitration rights in opposing certification and reaffirming its stance two years later during oral argument. Id. at 29. The Third Circuit further reasoned that the fact that Avis moved to compel arbitration four months after the District Court’s certification decision was prompt enough and “not unreasonable” particularly as Avis’ Rule 23(f) petition was still pending. Id. Ten days after the Third Circuit denied the Rule 23(f) petition, the District Court held a status conference on December 14, 2023, setting a deadline of February 2024 for the motion to compel which Avis met. Id. at 29-30.
The Third Circuit stopped short of directing the District Court to compel the relevant class members to arbitrate their claims and did not reach the Plaintiff’s claims challenging the enforceability of the arbitration agreements, finding that the District Court relied exclusively on waiver in its decision and remanding the action permitting the District Court to reach the issue of enforceability if properly presented.
On January 13, 2026, the District of New Jersey issued an order implementing the mandate of the Third Circuit and vacating its September 30, 2024 order denying Avis’ motion to compel arbitration. A status conference is set for February 2026.
Implications For Class Action Defendants
Where named plaintiffs are not subject to arbitration agreements but defendants suspect that putative class members may be, defendants must act promptly to preserve their arbitration rights even where a motion to compel arbitration is not ripe, by asserting arbitration rights as an affirmative defense in answers to class action complaints and in opposition to class certification (as a basis for lacking commonality, adequate representation, typicality, etc.). The Third Circuit’s decision in Avis provides a guidepost for proper preservation of arbitration rights that class action defendants are well-advised to heed.
