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Posted on by Gerald L. Maatman, Jr.

California Court of Appeal Affirms Trial Court Judgment Defeating Malicious Prosecution Action Where Sister-in-Law Served As Class Representative In Underlying Lawsuit

By Gerald L. Maatman, Jr., Daniel D. Spencer, and George J. Schaller

Duane Morris Takeaways: On June 10, 2026, in Citizens of Humanity, LLC v. John Donboli et al., No. D085849, 2026 Cal. App. LEXIS 360 (Cal. App. June 10, 2026), the California Court of Appeal affirmed the trial court’s decision in favor of Defendants in a malicious prosecution action stemming from a consumer class action over “Made in the U.S.A.” labeling on jeans.  The Court of Appeal held that a familial relationship between a named plaintiff and class counsel does not, as a matter of law, deprive a class action of probable cause, and that Apple Computer, Inc. v. Superior Court, 126 Cal.App.4th 1253(2005), does not establish a per se bar on relatives of class counsel serving as class representatives.

For companies that have faced consumer class actions and are considering malicious prosecution counterclaims, this decision underscores that the probable cause standard remains a high bar and requires a showing that any reasonable attorney would agree the underlying claims were totally and completely without merit.

Case Background

Citizens of Humanity LLC is a jeans manufacturer whose products had “Made in the U.S.A.” labels, despite Citizens Ingrid-style jeans having fabrics and components sourced from Japan and China.  Citizens of Humanity, LLC v. John Donboli et al., No. D085849, 2026 Cal. App. LEXIS 360, *7 n. 2 (Cal. App. June 10, 2026). 

In June 2014, attorneys John Donboli and JL Sean Slattery of Del Mar Law Group LLP filed a putative class action against Citizens in federal court, alleging the labels violated former California Business and Professions Code § 17533.7, the Consumers Legal Remedies Act, and the Unfair Competition Law.  Id. at *3.

In the federal court action against Citizens, Louise Clark served as the named-plaintiff who previously purchased Citizens’ Ingrid-style jeans.  Citizens later discovered Clark was attorney Slattery’s sister-in-law.  Id.  Based on this familial relationship, Citizens moved to disqualify Del Mar Law Group as class counsel.  While that motion was pending, Clark filed a motion to withdraw and substitute a new named-plaintiff, Coni Hass.  Id. at *4.  The federal court granted the motion to withdraw and substitute and found that the substitution “vitiate[d]” Citizen’s disqualification motion and also held Citizens “failed to demonstrate that [Clark] or her counsel . . . acted in bad faith” in requesting substitution.  Id.

As the action was pending, the California Legislature amended § 17533.7 to permit “Made in the U.S.A.” labeling where foreign-sourced materials constitute no more than 5% (or 10% if not domestically sourceable) of the final wholesale value of the product.  Id.  In response to the amendment, Citizens moved to dismiss.  The district court granted Citizens’ motion and allowed Hass leave to amend, but Hass elected not to amend and the case was dismissed.  Id. 

In February 2018, Citizens filed this action for malicious prosecution against attorneys Donboli and Slattery, Del Mar Law Group, and former named plaintiffs Clark and Hass (collectively “Defendants”). 

Defendants moved to strike the complaint under the anti-SLAPP statute, but the trial court denied their motion, and that ruling was later affirmed by this Court of Appeal (see Citizens of Humanity, LLC v. Hass, 46 Cal.App.5th 589 (2020)).  Citizens of Humanity, LLC, 2026 Cal. App. LEXIS 360 at *5. 

In affirming, the Court of Appeal “found two conflicting narratives . . . regarding the origin of the federal mislabeling case.”  Id. at *5-6.  It concluded one possible narrative was “that Clark was a shill plaintiff, and [her attorneys] were aware of this fact.”  The second possible narrative focused on Hass and whether Defendants “knew ‘that Hass purchased Ingrid-style jeans with a label that said ‘Made in the U.S.A.’ and components of those jeans came from a foreign country[.]’”  Id. at *6. 

After affirming, the case was remanded and the matter proceeded to trial.  After opening statements, and after Citizens presented testimony from the company’s founder, the parties asked the court “to ‘review certain exhibits, [and] deposition testimony from Clark and Hass’ and the parties ‘agreed to have the [c]ourt make a determination on probable cause’” consequently waiving their right for the jury to decide that issue.  Id. at *7.  After accepting evidence and hearing argument the trial court ruled in favor of Defendants concluding “Citizens had not established [Defendants] lacked probable cause for” the previously filed putative class action and entered judgment for Defendants.  Id. at *7-8.  Citizens appealed. 

The Court of Appeal’s Decision

The Court of Appeal affirmed the decision of the trial court. 

Citizens’ primary argument on appeal was that Defendants lacked probable cause as a matter of law because Clark, as Slaterry’s sister-in-law, was an improper class representative under Apple Computer, Inc. v. Superior Court.  Citizens relied on the Apple court’s observation that “the majority of courts . . . have refused to permit class attorneys, their relatives, or business associates from acting as the class representative.”  Citizens of Humanity, LLC, 2026 Cal. App. LEXIS 360 at *10-11.  The Court of Appeal rejected this argument on multiple grounds.

First, the Court of Appeal distinguished Apple factually and noted that the plaintiff in that case was an attorney at one of the representing firms who stood to gain monetarily from recovery of attorney fees.  Id. at *11.  The Court of Appeal reasoned that Apple addressed a “‘financial relationship and interdependence between’ the plaintiff and associated.”  Id.  Here, however, Citizens presented no information “about any ‘financial relationship’ between Slattery and Clark.”  The Court of Appeal also determined it was not “reasonable to presume ‘interdependence’ solely based on [Slattery and Clark’s] relationship as siblings-in-law.”  Id. 

Second, the Court of Appeal held that the relevant passage in Apple is, “at best” “dictum that cannot bind very reasonable attorney on threat of a malicious prosecution judgment.”  Id. at *12. 

Third, it reasoned that even if a disqualifying conflict existed, it would not be fatal to the putative class action against Citizens.  As the Court of Appeal noted “Clark could have pursued the claim with different counsel, or [Del Mar] Law Group could have proceeded with a different representative plaintiff, which is what the district court authorized here after Clark decided to withdraw.”  Id. at *13. 

Accordingly, the Court of Appeal affirmed and agreed with “the trial court’s conclusion that Apple is not determinative of the probable cause analysis here.”  Id. 

Implications For Corporate Litigants

For companies facing consumer class actions, including those with origin-of-manufacture claims such as “Made in the U.S.A.,” this decision serves as a reminder that labeling must comply with current statutory standards. 

Even assuming a company is successful in defeating a consumer class action, then companies considering malicious prosecution actions should take note that class representative conflicts, including familial relationships with class counsel, are evaluated on a fact-specific basis.  There is no per se rule of disqualification, and even where a conflict exists, it goes to the fitness of counsel or the representative, not the viability of the underlying claim itself.  As the Court of Appeal noted here, the class action can proceed with substitute counsel or a substitute plaintiff.

The decision in Citizens of Humanity, LLC, serves as a cautionary tale that even relatives of class counsel can potentially serve as class representatives and further narrows adequacy challenges to class certification.  It also demonstrates another way class counsel can creatively select representative plaintiffs while still allowing courts to scrutinize representative plaintiffs for actual conflicts on a case-by-case basis. 

Posted on by Gerald L. Maatman, Jr.

Duane Morris Class Action Review – 2026/2027: Mid-Year Class Action Settlement Report & Analysis

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

Duane Morris Takeaways: Corporate defendants saw unprecedented settlement numbers across all areas of class action litigation between 2022 and 2025, and mid-year through 2026, settlement numbers are even more robust. The cumulative value of the top ten settlements across all substantive areas of class action litigation hit record highs in 2025, surpassing the highest levels ever in 2022. When the numbers for the previous few years are combined, the total signals that corporate defendants have entered a new era of heightened risks and higher stakes in the valuation of class actions.

On an aggregate basis, across all areas of litigation, class actions and government enforcement lawsuits garnered more than $79 billion in 2025, $42 billion in 2024, $51.4 billion in settlements in 2023, and a $66 billion in 2022. When combined, the four-year settlement total eclipses any other four-year period in the history of American jurisprudence.

As a prelude to the Duane Morris Class Action Review – 2027, this blog post reports on our analysis of class action settlements through the first half of 2026. The data shows that for the period of January 1 to June 30, 2026, the current year is ahead of the historically high numbers of 2025. As of the end of the first half of 2026, the aggregate settlement total across all areas of class action litigation and government enforcement lawsuits is $53.795 billion (in accounting for the top 5 settlements in the various substantive areas of law). By comparison, in 2025 at the half-way mark, the aggregate settlement total was $21.77 billion.

It is anticipated that these numbers will increase across the board by the end of the year and when measured by the top 10 settlements in each category.

More Billion Dollar Class Action Settlements

At the mid-way point of 2026, there are three settlements over the billion-dollar mark. There were eight total billion-dollar settlements in 2025. The 10 individual billion-dollar settlements in 2024 surpassed the number in 2023, and only fell short of the number of billion-dollar settlements in 2022. In 2023, parties resolved nine class actions for $1 billion or more. In 2022, parties resolved 15 class actions for $1 billion or more in settlement dollars. Together with the three thus far in 2026, corporations have seen 45 settlements of one billion dollars or more in four and a half years. This string of settlements marks the most extensive set of billion-dollar class action settlements in the history of the American court system.

The Scorecard On Leading Class Actions Settlements Halfway Through 2026

The plaintiffs’ class action bar has scored rich settlements thus far in 2026 in virtually every area of class action litigation. The following list shows the totals of the top 5 settlements at the mid-year point in 2026 in key areas of class action litigation:

$34.875 Billion – Antitrust class actions
$8.609 Billion – Products liability/Mass Tort class actions
$4.25 Billion – Government Enforcement actions
$1.979 Billion – Securities Fraud class actions
$1.535 Billion – Consumer Fraud class actions
$624 Million – Privacy class actions
$501 Million – ERISA class actions
$392.1 Million – Discrimination class actions
$323.9 Million – Wage & Hour class and collective actions
$309.7 Million – Data Breach class actions
$242.45 Million – Labor class actions
$105.05 Million – Fair Credit Reporting Act class actions
$60.93 Million – TCPA class actions
$41.9 Million – Civil Rights class actions

The high dollar settlements of the past four years suggested that the plaintiffs’ bar would continue to be equally, if not more aggressive, with their case filings and settlement positions. From the 2026 data, it certainly looks to be the case as we end the first half of the year. The data points in each category are set out in the following charts.

Top Class & Collective Action Litigation Settlements In 2026

Top Antitrust Class Action Settlements In 2026

The top 10 antitrust class action settlements totaled $45.99 billion in 2025, $8.412 billion in 2024, $11.74 billion in 2023, and $3.72 billion in 2022.

  1. $34 billion – In Re Payment Card Interchange Fee And Merchant Discount Antitrust Litigation, Case No. 05-MD-1720 (E.D.N.Y. June 9, 2026) (preliminary settlement approval granted to Visa’s and Mastercard’s revised settlement with merchants who accused the card networks of ‌charging too much to process payments on their credit cards).
  2. $303 million – Ray, et al. v. NCAA, Case No. 23-CV-425 (E.D. Cal. May 12, 2026) (final settlement approval granted in a class action to resolve claims from thousands of Division I volunteer coaches alleging that the organization’s rules fixed their compensation at zero).
  3. $218 million – In Re Realpage Inc. Rental Software Antitrust Litigation, Case No. 23-MD-3071 (M.D. Tenn. May 22, 2026) (May 22, 2026) (preliminary settlement approval granted to resolve claims from a second set of renters alleging antitrust claims that they colluded with revenue management firm RealPage Inc. to fix rental prices across the country).
  4. $200 million – In Re Generic Pharmaceutical Pricing Antitrust Litigation, Case No. 16-MD-2724 (E.D. Penn. Jan 23, 2026) (final settlement approval granted in a class action to resolve claims alleging antitrust claims alleging the defendants conspired with other drugmakers to inflate generic drug prices).
  5. $136 million – In Re PVC Pipe Antitrust Litigation, Case No. 24-CV-7639 (N.D. Ill. May 13, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the company conspired with other polyvinyl chloride pipe producers to fix prices).

Top Civil Rights Class Action Settlements In 2026

The top 10 civil rights class action settlements totaled $580.9 million in 2025, $313.8 million in 2024, $643.15 million in 2023, and $1.31 billion in 2022.

  1. $20 million – Healy, et al. v. Jefferson County Kentucky Louisville Metro Government, Case No. 17-CV-71 (W.D. Ky. Mar. 11, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the County regularly imprisons, detains  or  incarcerates  persons  longer  than ordered by Courts of the Commonwealth of Kentucky, and under conditions that violate the orders of such Courts).
  2. $15 million – Johnson, et al. v. City Of Annapolis, Case No. 21-CV-112 (D. Md. May 26, 2026) (settlement reached in two class actions to resolve claims from more than 1,400 city residents of public housing and by representatives of a former public housing resident who died alleging substandard housing conditions at properties owned and operated by the Housing Authority of the City of Annapolis (HACA).
  3. $4 million – Cody, et al. v. City Of St. Louis, Case No. 17-CV-2707 (E.D. Mo. Feb. 13, 2026) (preliminary settlement approval granted in a class action to resolve claims from hundreds of people who say they endured inhumane conditions while held at the city’s Medium Security Institution, commonly known as the Workhouse).
  4. $1.5 million – Coleman, et al. v. City Of Brookside, Case No. 22-CV-423 (N.D. Ala. Feb. 6, 2026) (preliminary settlement approval sought in a class action to resolve claims brought by four drivers who said they were targeted in an aggressive towing and ticketing scheme).
  5. $1.4 million – Santiago, et al. v. City Of Chicago, Case No. 22-CV-5827 (N.D. Ill. Apr. 8, 2026) (preliminary settlement approval granted in two consolidated actions to resolve claims alleging the city of Chicago tows vehicles it deems abandoned without properly notifying their owners).

Top Consumer Fraud Class Action Settlements In 2026

The top 10 consumer fraud class action settlements totaled $2.1 billion in 2025, $2.44 billion in 2024, $3.29 billion in 2023, and $8.596 billion in 2022.

  1. $436 million – Broadmoor Lumber & Plywood Co. et al. v. Toyota Industries Corp., Case No. 24-CV-6640 (N.D. Cal. Feb. 26, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the defendant and its subsidiaries misled tens of thousands of business buyers into thinking the emissions of its forklift and construction engines were “the cleanest” in the industry).
  2. $425 million – In Re Capital One 360 Savings Account Interest Rate Litigation, Case No. 24-MD-311 (E.D. Va. Apr. 20, 2026) (final settlement approval granted in a class action to resolve claims alleging that Capital One deceptively advertised its 360 Savings accounts).
  3. $309 million – In Re Amazon Return Policy Litigation, Case No. 23-CV-1372 (W.D. Wash. Jan. 27, 2026) (settlement approval sought in a class action to resolve a proposed class action accusing Amazon of shortchanging customers on refunds for returned items).
  4. $240 million – Bickerstaff, et al. v. SunTrust Bank, Case No. 10EV010485 (Ga. Cir. Ct. May 26, 2026) (final settlement approval granted in a class action alleging that the bank charged illegal overdrafts on ATM and debit card transactions which harmed Georgia consumers).
  5. $125 million – National Veterans Legal Services Program, et al. v. United States, Case No. 24-1757 (Fed. Cir. Mar. 20, 2026) (settlement approval affirmed in a class action to resolve claims of hundreds of thousands of PACER users who were allegedly made to pay more than the law allowed).

Top Data Breach Class Action Settlements In 2026

The top 10 data breach class action settlements totaled $515.79 million in 2025, $593.2 million in 2024, $515.75 million in 2023, and $719.21 million in 2022.

  1. $117.5 million – Hasson, et al. v. Comcast Cable Communications LLC, Case No. 23-CV-5039 (E.D. Penn. May 13, 2026) (final settlement approval granted in a consolidated class action lawsuit alleging the internet and mobile services provider failed to implement proper cybersecurity measures to safeguard sensitive consumer information, leading to an October 2023 data breach).
  2. $46.7 million – In Re 23andMe, Inc., Customer Data Security Breach Litigation, Case No. 24-MD-3098 (N.D. Cal. Feb. 6, 2026) (final settlement approval granted in a class action to resolve claims alleging that 23andMe Inc. and affiliates had a data breach in which millions of customers’ genetic data and personally identifiable information (PII) was hacked).
  3. $31.5 million – Angus, et al. v. Flagstar Bank FSB, Case No. 21-CV-10657 (E.D. Mich. Mar. 12, 2026) (preliminary settlement approval granted in a class action to resolve consolidated class claims that Flagstar Bank failed to protect the personal information of customers and employees in two data breaches impacting more than 2 million people).
  4. $26 million – In Re Lakeview Loan Servicing Data Breach Litigation, Case No. 22-CV-20955 (M.D. Fla. Feb. 4, 2026) (preliminary settlement approval granted to settle a class action over their personally identifiable information potentially being accessed during a data breach).
  5. $24.5 million – In Re LastPass Data Security Incident Litigation, Case No. 22-CV-12047 (D. Mass. Feb. 2, 2026) (preliminary settlement approval granted to settle a proposed class action over a 2022 data breach that exposed the personal information of millions of people and led to the looting of cryptocurrency accounts).

Top Discrimination Class Action Settlements In 2026

The top 10 discrimination class action settlements totaled $507.10 million in 2025, $356.8 million in 2024, $762.2 million in 2023, and $597 million in 2022.

  1. $110 million – In Re Wells Fargo & Co. Hiring Practices Derivative Litigation, Case No. 22-CV-5173 (N.D. Cal. May 15, 2026) (final settlement approval granted in a class action to resolve a shareholder derivative lawsuit accusing the bank of corporate mismanagement through discriminatory hiring and lending).
  2. $100 million – Snyder-Hill, et al. v. The Ohio State University, Case No. 23-cv-2993, Knight, et al. v. The Ohio State University, Case No. 23-CV-2994, and Gonzales, et al. v. The Ohio State University, Case No. 23-CV-3051 (S.D. Ohio June 22, 2026) (board approval of a settlement agreement to resolve claims from approximately 300 former students accusing former Ohio State University sports doctor Richard Strauss of sexual abuse).
  3. $72.5 million – Doe, et al. v. Bank Of America NA, Case No. 25-CV-8520 (S.D.N.Y. Apr. 2, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the defendant Jeffrey Epstein’s sex trafficking and abuse).
  4. $60.5 million – Candelore, et al. v. Tinder, Inc., Case No. BC583162 (Cal. Super. Ct. June 4, 2026) (final settlement approval granted in a class action to resolve claims alleging that the company charged older users more than younger users for Tinder Plus and Tinder Gold subscriptions.
  5. $35 million – Bensky, et al. v. Darren Indyke, Case No. 24-CV-1204 (S.D.N.Y. Mar. 3, 2026) (preliminary settlement approval granted in a class action alleging that the defendants helped facilitate Jeffrey Epstein’s vast sex trafficking enterprise).

Top EEOC / Government Enforcement Class Action Settlements In 2026

The top 10 EEOC / government enforcement class action settlements totaled $3.29 billion in 2025, $335.9 million in 2024, $263.58 million in 2023, and $404.5 million in 2022.

  1. $3 billion – New Jersey Department Of Environmental Protection, et al. v. E.I. du Pont de Nemours & Co., Case No. 19-CV-14758 & 19-CV-14766 (D.N.J. June 24, 2026) (settlement approval pending to resolve the state’s claims over contamination caused by the manufacture and discharge of forever chemicals).
  2. $575 million – United States Of America, et al. v. PacifiCorp., Case No. 24-CV-2102 (D. Ore. Feb. 20, 2026) (settlement reached to resolve claims for damages related to wildfires in Oregon and Northern California).
  3. $450 million – United States Of America, et al. v. Chemours Co., Case No. 26-CV-418 (S.D. W. Va. June 24, 2026) (proposed consent decree entered for a multi-state settlement with Chemours Co. over alleged years-long, illegal discharges of synthetic “forever chemicals” used to make products resistant to water, grease and stains).
  4. $125 million – Illinois And Peoples Gas and Northshore Gas (Ill. Cmrc. Comm. Apr. 30, 2026) (settlement reached with two gas companies and the Attorney General’s office on behalf of customers concerning costs related to Peoples Gas’ ongoing, massive program to retire cast- and ductile-iron mains).
  5. $100 million – Federal Trade Commission, et al. v. Walmart Inc., Case No. 26-CV-1655 (N.D. Cal. Feb. 27, 2026) (consent decree entered to settle claims the company misled its “Spark” delivery program drivers over the amount they would be paid, and deceived customers over how much of the tips they paid would go to their drivers).

Top ERISA Class Action Settlements In 2026

The top 10 ERISA class action settlements totaled $680.30 million in 2025, $413.3 million in 2024, $580.5 million in 2023, and $399.6 million in 2022.

  1. $332 million – McCutcheon, et al. v. Colgate-Palmolive Co., Case No. 16-CV-4170 (S.D. N.Y. Jan. 14, 2026) (final settlement approval granted in a class action to resolve claims alleging that Colgate-Palmolive violated ERISA by miscalculating pension benefits for retirees who took lump-sum distributions between 1989 and 2005).
  2. $48 million – Hoak, et al. v. Ledford, Case No. 15-CV-3983 (N.D. Ga. May 13, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that the defendant failed to provide annuity payments for life).
  3. $44.4 million – In Re AME Church Employee Retirement Fund Litigation, Case No. 22-MD-3035 (W.D. Tenn. Mar. 24, 2026) (preliminary settlement approval granted in a multidistrict litigation from a class of African Methodist Episcopal Church workers who alleged that mismanagement of their annuity retirement plan allowed a rogue employee to embezzle $90 million).
  4. $42 million – Halter, et al. v. Providence Health & Services, Case No. 25-CV-210 (W.D. Wash. June 4, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that Providence mismanaged its employees’ retirement plan by failing to use money forfeited by departing workers to reduce administrative expenses).
  5. $35 million – Iron Workers District Council Of New England Health And Welfare Fund, et al. v. Teva Pharmaceutical Industries Ltd., Case No. 23-CV-11131 (D. Mass. Apr. 3, 2026) (preliminary settlement approval granted in a class action to resolve claims from a coalition of union healthcare funds alleging that the defendant schemed to delay generic competition for its QVAR asthma inhalers).

Top FCRA, FDPCA, And FACTA Class Action Settlements In 2026

The top 10 FCRA, FDPCA, and FACTA class action settlements totaled $74.77 million in 2025, $42.43 million in 2024, $100.15 million in 2023, and $210.11 million in 2022.

  1. $56.85 million – Stoff, et al. v. Wells Fargo Bank N.A., Case No. 37-2020-00020808-CU-BT-CTL (Cal. Super. Ct. Apr. 17, 2026) (final settlement approval granted in a class action to resolve claims alleging that the company violated the federal Fair Credit Reporting Act (FCRA) by failing to report CARES Act forbearances accurately).
  2. $14.3 million – Ray, et al. v. AdaptHealth Corp., Case No. 22-CV-898 (M.D.N.C. June 1, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that the company violated the North Carolina Debt Collection Act by overcharging and trying to collect debts from patients who had returned medical equipment to the company).
  3. $13.5 million – Scroggins, et al. v. LexisNexis Risk Solutions FL Inc., Case No. 22-cv-00545 (E.D. Va. Mar. 16, 2026) (final settlement approval granted in a class action to resolve claims alleging that the defendant incorrectly reported some consumers as deceased). 
  4. $13 million – VanderKodde, et al. v. Elliott, Case No. 17-CV-203 (W.D. Mich. Apr. 13, 2026) (final settlement approval granted in a class action to resolve claims from debtors who alleged that a creditor law firm charged unlawfully high post-judgment interest rates during debt collection).
  5. $7.4 million – Keim, et al. v. Trader Joe’s, Case No. 19STCV36790 (Cal. Super. Ct. Feb. 5, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the grocery store violated the Fair and Accurate Credit Transactions Act by providing customers with printed receipts that displayed both the first six and last four digits of their card numbers).

Top FLSA / Wage & Hour Class And Collective Settlements In 2026

The top 10 FLSA / wage & hour class and collective action settlements totaled $430.58 million in 2025, $614.55 million in 2024, $742.5 million in 2023, and $574.55 million in 2022.

  1. $162 million – Calderon, et al. v. Public Partnerships LLC, Case No. 25-CV-2320 (E.D.N.Y. June 23, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that the company failed to timely and accurately pay about 200,000 personal assistants).
  2. $86 million – Callister, et al. v. Swedish Health Services, Case No. 21-2-16148-7 (Wash. Super. Ct. May 8, 2026) (preliminary settlement approval granted in a class action alleging that the company failed to provide required second meal periods for employees working shifts longer than 10 hours, and underpaid workers through a policy of rounding time entries).
  3. $38.7 million – Pruess, et al. v. Presbyterian Health Plan Inc., Case No. 19-CV-629 (D.N.M. Jan. 9, 2026) (D.N.M. June 24, 2026) (final settlement approval granted to resolve claims alleging that the defendant failed to pay overtime compensation to care workers in violation of the FLSA).
  4. $19.2 million – Diaz, et al. v. New York Paving Inc., Case No. 18-CV-4910 (S.D.N.Y. June 17, 2026) (final settlement approval granted in a class action to resolve claims alleging that the defendant failed to pay for pre- and post-shift work and for overtime compensation).
  5. $18 million – Abarca, et al. v. Werner Enterprises Inc., Case No. 14-CV-319, Smith, et al. v. Werner Enterprises Inc., Case No. 15-CV-287, and Vester, et al. v. Werner Enterprises Inc., Case No. 17-CV-145 (D. Neb. Feb. 5, 2026) (preliminary settlement approval granted in a collective action to resolve claims alleging that Werner failed to pay minimum wages for non-driving work time, including time spent in sleeper berths, waiting for loads, performing pre-trip and post-trip inspections and attending to cargo security).

Top Labor Class Action Settlements In 2026

The top 10 labor class action settlements totaled $210.5 million in 2025, $237.0 million in 2024 and $129.67 million in 2023.

  1. $200.2 million – Brown, et al. v. JBS, Inc., Case No. 22-CV-2946 (D. Colo. Jan. 15, 2026) (preliminary settlement approval granted in a class action to resolve claims between former employees and Agri Beef, American Foods Group, Cargill, Hormel, JBS, National Beef, Nebraska Beef, Perdue Farms, Quality Pork, Seaboard Foods, Triumph Foods and Tyson Foods alleging that the companies unlawfully conspired to suppress the wages of workers at their processing plants).
  2. $27.5 million – Hoffman, et al.  v. United Airlines, Inc., Case No. 21-CV-6395 (N.D. Ill. Mar. 11, 2026) (settlement reached in a class action to settle a lawsuit by former employees who say the defendant mishandled recent voluntary buyout programs).
  3. $9.5 million – Dorrell, et al. v. Constellation Energy Corp., Case No. 25-CV-2251 (D. Md. May 12, 2026) (preliminary settlement approval sought in a class action alleging that the company conspired with other major nuclear power generation companies to illegally limit compensation for employees).
  4. $3 million – Bailey, et al. v. Sedgwick Claims Management Services, Inc., Case No. 24-CV-2749 (W.D. Tenn. May 1, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that the defendant failed to retroactively reimburse the tobacco penalties paid by certain employees who subsequently complete a quit-smoking program, and of failing to inform workers that recommendations from their personal physicians will be considered in the course of assessing penalties).
  5. $2.25 million – Brinkman, et al. v. Target Corporation, Case No. 24-2- 25091-3 (Wash. Super. Ct. May 5, 2026) (final settlement approval granted in a class action to resolve claims alleging that the company failed to disclose wage scales and salary ranges in Washington job postings).

Top Privacy Class Action Settlements In 2026

The top 10 privacy class action settlements totaled $801.85 million in 2025, $2.01 billion in 2024, $1.32 billion in 2023, and $896.7 million in 2022.

  1. $250 million – Landsheft, et al. v. Apple Inc., Case No. 25-CV-2668 (N.D. Cal. May 5, 2026) (preliminary settlement approval sought in a class action to resolve claims alleging that Apple misled millions of iPhone buyers by falsely touting artificial intelligence capabilities for its Siri voice assistant in 2024).
  2. $135 million – Taylor, et al. v. Google LLC, Case No. 20-CV-7956 (N.D. Cal. Jan. 27, 2026) (preliminary settlement approval sought in a class action class action alleging Google illegally consumes the cellular data consumers have purchased from their cellular providers).
  3. $115 million – Katz-Lacabe, et al. v. Oracle America Inc., No. 24-7648 (9th Cir. Feb. 13, 2026) (final settlement approval affirmed in a privacy lawsuit over the defendant’s online data-collection practices despite the objections of one class member).
  4. $68 million – In Re Google Assistant Privacy Litigation, Case No. 19-CV-4286 (N.D. Cal. Mar. 19, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that Google eavesdropped on and recorded confidential communications without user consent).
  5. $56 million – Frasco, et al. v. Flo Health Inc., Case No. 21-CV-757 (N.D. Cal. Apr. 22, 2026) (preliminary settlement approval granted in a class action to resolve from Flo users who alleged Google illegally intercepted the private menstrual health data of millions of users without their consent).

Top Products Liability And Mass Tort Class Action Settlements In 2026

The top 10 products liability / mass tort class action settlements totaled $17.9 billion in 2025, $23.40 billion in 2024, $25.83 billion in 2023, and $50.32 billion in 2022.

  1. $7.25 billion – King, et al. v. Monsanto Co., Case No. 2622-CC00325 (Mo. Cir. Ct. Mar. 4, 2026) (preliminary settlement approval granted to resolve current and future claims across the U.S. that weed killer Roundup causes non-Hodgkin lymphoma).
  2. $773 million – In Re National Prescription Opiate Litigation, Case No. 17-MD-2804 (N.D. Ohio Apr. 14, 2026) (Albertsons Cos. Inc. and the attorneys general of California, Colorado, Illinois, and Oregon agreed to a settlement in principle to end claims brought by states, local governments, and Native American tribes over its role in the opioid crisis).
  3. $318 million – In Re 650 Fifth Avenue and Related Properties, Case No. 08-CV-10934 (S.D.N.Y. Mar. 23, 2026) (settlement approval granted in a class action to resolve claims stemming from the federal government’s forfeiture action against a 36-story Midtown Manhattan office tower linked to the Iranian government).
  4. $180 million – The Diocese of Camden, New Jersey, Case No. 20-BK-21257 (D.N.J. Bank. Ct. Feb. 17, 2026) (settlement reached pending approval by the bankruptcy court in a class action to resolve a dispute arising from claims of sexual abuse by members of the Diocesan clergy).
  5. $88.5 million – In Re National Prescription Opiate Litigation, Case No. 17-MD-2804 (N.D. Ohio Jan. 29, 2026) (final settlement agreement granted with Amneal Pharmaceuticals and several states to resolve litigation over its role in creating and fueling the opioid overdose epidemic).

Top Securities Fraud Class Action Settlements In 2026

The top 10 securities fraud class action settlements totaled $3.45 billion in 2025, $2.55 billion in 2024, $5.4 billion in 2023, and $3.25 billion in 2022.

  1. $740 million – In Re Didi Global Securities Litigation, Case No. 21-CV-5807 (S.D.N.Y. June 16, 2026) (final settlement approval granted in a class action to resolve claims by investors alleging that defendants violated the federal securities laws by making false and misleading statements and omissions in the Registration Statement and engaged in deceptive conduct in connection with DiDi’s June 30, 2021 Initial Public Offering (IPO).
  2. $500 million – Sjunde AP-Fonden, et al. v. The Goldman Sachs Group Inc., Case No. 18-CV-12084 (S.D.N.Y. May 20, 2026) (settlement reached in a class action brought by investors who asserted that they lost money after it came to light that the company was allegedly involved in a bribery scandal tied to Malaysia’s sovereign wealth fund).
  3. $250 million – Crews, Jr., et al. v. Rivian Automotive, Inc., Case No. 22-CV-1524 (C.D. Cal. May 20, 2026) (final settlement approval granted in a class action to resolve claims from investors alleging that the company misled investors in connection with its Initial Public Offering).
  4. $250 million – Sjunde AP-Fonden, et al. v. Activision Blizzard Inc., Case No. 2022-1001 (Del. Chanc. Ct. May 22, 2026) (settlement reached with Microsoft Corp. to end shareholder litigation over its $75.4 billion acquisition of Activision Blizzard Inc.
  5. $239 million – In Re Celgene Corp. Securities Litigation, Case No. 18-CV-4772 (D.N.J. May 8, 2026) (final settlement approval granted in a class action to resolve claims alleging that the Celgene and two of its former officers violated the federal securities laws by making material misrepresentations and omissions during the regarding certain Celgene products and product candidates).

Top TCPA Class Action Settlements In 2026

The top 10 TCPA class action settlements totaled $69.1 million in 2025, $84.73 million in 2024, $103.45 million in 2023, and $134.13 million in 2022.

  1. $28 million – Campbell, et al. v. Sirius XM Radio Inc., Case No. 22-CV-2261 (C.D. Ill. May 11, 2026) (final settlement approval granted in a class action to resolve claims alleging that Sirius XM made telephone calls to persons registered on the National Do Not Call Registry or Sirius XM’s Internal Do Not Call Registry).
  2. $10.5 million – Fried, et al. v. Kaiser Foundation Health Plan, Inc., d/b/a Kaiser Permanente, Case No. 2025-016220-CA-01 (Cal. Super. Ct. Jan. 28, 2026) (final settlement approval granted in a class action to resolve claims from class members who alleging they received text messages sent by or on behalf of Kaiser after the person communicated that they did not wish to receive text messages by replying to the messages with a “stop” or similar opt-out instruction, in alleged violation of the TCPA and the Florida Telephone Solicitation Act (FTSA). 
  3. $9.95 million – Jackson, et al. v. Gen Digital Inc., Case No. 25-CV-535 (D. Ariz. Jan. 28, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the cybersecurity software company wrongfully placed prerecorded telephone calls regarding a LifeLock or Norton account to consumers who did not have an account with either company, or Gen Digital, in violation of the Telephone Consumer Protection Act).
  4. $6.5 million – Walston, et al. v. National Retail Solutions, Inc. d/b/a NRS Pay, Case No. 24-CV-083 (Ill. Cir. Ct. Jan. 14, 2026) (preliminary settlement approval granted in a class action to resolve claims alleging that the defendant placed prerecorded telemarketing telephone calls to cellular telephone numbers to individuals who did not give their prior express written consent in violation of the Telephone Consumer Protection Act).
  5. $5.975 million – Ryan, et al. v. Wilshire Law Firm, P.L.C., Case No. 2025-022621 (Fla. Cir. Ct. June 3, 2026) (final settlement approval granted in a class action to resolve claims alleging that the defendant violated the TCPA by sending pre-recorded messages to cellular telephone numbers).
Posted on by Gerald L. Maatman, Jr.

Unanimous Seventh Circuit Panel Limits TCPA Liability For Downstream Telemarketers

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

Duane Morris Takeaways: On June 24, 2026, in Hossfeld v. Allstate Insurance Co., No. 25-1518, 2026 WL 1815908 (7th Cir. June 24, 2026), Judge Amy St. Eve, writing for the U.S. Court of Appeals for the Seventh Circuit, reversed a summary judgment ruling in a class action against Allstate Insurance Co. (“Allstate”) and held that the plaintiff failed to establish vicarious Telephone Consumer Protection Act (“TCPA”) liability for calls placed by a subcontracted telemarketer.  The decision is a significant win for companies in the lead generation space and forces plaintiffs to prove downstream agency for the calls at issue.

Case Background

Allstate sells car insurance policies nationwide.  To make these sales, Allstate works with insurance agents to help sell its policies.  In this case, Allstate contracted with two insurance agents, Jason Fleming and Daniel Gilmond.  Fleming and Daniels signed contracts, which authorized them to work with “Non‑Contracted Telemarketers,” who do not contract directly with Allstate.  Id. at *2.  The “Non‑Contracted Telemarketers,” however, were required to comply with Allstate’s do-not-call policies.  Id.

In 2020, Fleming and Daniels retained a “Non‑Contracted Telemarketer,” called Transfer Kings, to attempt to sell Allstate policies to interested consumers.  Id.  But, without informing Allstate or the agents, Transfer Kings subcontracted its duty to a third company, called Atlantic, which actually placed the calls.  Atlantic bought “lead” lists from a fourth company, KP Leads, which represented that the list of consumers had consented to the calls.  One lead was Plaintiff Robert Hossfeld (“Hossfeld”) who had been on Allstate’s internal do-not-call registry since July 10, 2020.

In reliance on the “lead” list from KP Leads, Atlantic made twelve calls to Hossfeld, between November 2020 and February 2021, and tried to sell him Allstate insurance policies.  As a result, Hossfeld sued Allstate under 47 U.S.C. §227(c)(5) of the TCPA and its internal do‑not‑call regulations under 47 C.F.R. §64.1200(d).  Ultimately, Hossfeld moved for class certification and summary judgment, whereas Allstate moved for summary judgment.  The district court denied class certification, but granted summary judgment for Hossfeld, holding that Allstate was vicariously liable for the calls in question.  Allstate appealed the summary judgment ruling, and Hossfeld appealed the denial of class certification.

The Seventh Circuit’s Ruling

Judge St. Eve, writing for the Seventh Circuit, reversed the district court’s summary judgment holding and found that Hossfeld failed to create a genuine issue of material fact as to whether Allstate was liable for Atlantic’s calls under any agency theory.

First, Judge St. Eve reasoned that in order to impute Atlantic’s conduct to Allstate, Atlantic must be Allstate’s “subagent.” She reasoned that “subagency” exists when “a principal . . . authorize[s] its agent to appoint an additional party to perform some of the tasks the principal delegated to the agent.”  Hossfeld, 2026 WL 1815908, at *4.  If authorized, subagents may appoint additional subagents.  Id.  “But for this to occur, there must be appointing authority at each level to support an agency relationship between each subagent and the principal.”  Id.  Here, there was no evidence Allstate ever communicated with Transfer Kings before it hired Atlantic or even knew Transfer Kings existed before the lawsuit was filed.  Allstate, therefore, did not delegate any agency decisions to Transfer Kings or authorize the hiring of additional subagents.  Simply put, Fleming and Daniels likely had the authority to hire Transfer Kings on Allstate’s behalf, but Transfer Kings did not have the authority to hire Atlantic and claim that the decision should be imputed to Allstate.

Second, Judge St. Eve reasoned that Hossfeld’s second argument, i.e., that Transfer Kings had apparent authority to hire Atlantic, also failed.  Apparent authority must be created by the principal’s words or conduct toward the plaintiff. In this case, Allstate was the principal.  Thus, because Hossfeld offered no evidence that Allstate ever represented to him that Atlantic was its agent, or otherwise interacted with him, Hossfeld could not establish that Allstate vested Atlantic with apparent authority.

Third, Hossfeld’s last argument that “Allstate ratified Atlantic’s calls to him by accepting benefits arising from the non-compliant calls” also failed.  Id. at *7.  Hossfeld’s ratification theory would have required him to show Allstate knowingly accept the benefits of an unauthorized act.  But “Hossfeld admit[ed] he never obtained insurance or any other services from Allstate,” and thus Allstate never retained any benefit from Hossfeld specifically.  Id.  Thus, the Seventh Circuit found that no reasonable jury could find that this conduct rose to the level of ratification.

Fourth, the Seventh Circuit turned to the class certification ruling and affirmed the denial of class certification.  Judge St. Eve explained Hossfeld only identified 33 unique telephone numbers on Allstate’s internal do‑not‑call list that Transfer Kings or Atlantic had called as part of the same campaign to sell insurance.  The Seventh Circuit has recognized that “a forty-member class is often regarded as sufficient to meet the numerosity requirement.” Id. at *9 (quoting Orr v. Shicker, 953 F.3d 490, 498 (7th Cir. 2020)) But 33 putative class members “easily” falls “below the general forty‑member benchmark.”  Id.  Thus, because the “only mechanism for disturbing the district court’s class certification ruling is to reverse it if . . . the court abused its discretion,” the Seventh Circuit was left with no choice but to affirm.

Implications For Companies

Hossfeld is a powerful and practical decision for companies that use telemarketing vendors, such as lead generators.  Because plaintiffs must show actual or apparent authority at each level of delegation to prevail on a subagency theory, corporate counsel should ensure that multiple levels of delegation are not authorized by their companies’ vendor agreements.  This prophylactic measure is the type of “easy fix” which will prevent massive class action lawsuits down the line.

Corporate counsel should also ensure that their vendor agreements require outside vendors, or lead generators, to comply with existing TCPA policies to minimize any risk that the principal should be liable for its agents’ (or subagents’) failure to follow applicable law.  TCPA class actions can be devastating for an organization, and front-end compliance goes a long way.

Posted on by Class Action Defense

The Class Action Weekly Wire – Episode 153: California Federal Court Grants In Part And Denies In Part Motion To Dismiss In Algorithmic Bias Suit

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman, special counsel Adam Brown, and associate Elizabeth Underwood with their discussion of key ruling issued in the ongoing Mobley v. Workday litigation challenging the use of AI tools in employment practices.

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

Episode Transcript

Jerry Maatman: Hello, everyone, and thank you for being here again on the next episode of the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today are my colleagues, Adam Brown and Elizabeth Underwood. Thanks so much for being on the podcast today.

Elizabeth Underwood: Glad to be here, Jerry.

Adam Brown: Thanks for having me, Jerry.

Jerry: Today, we’re discussing a significant decision in a rapidly evolving area of artificial intelligence and employment law. The case is Mobley v. Workday, and it involves a June 2026 decision from the Northern District of California. The plaintiffs in this lawsuit allege that Workday’s AI-driven applicant screening tools disproportionately screen out applicants based on race, age, disability, and other protected categories. While this isn’t a final ruling on the merits, the court’s decision on Workday’s motion to dismiss contains several important takeaways for employers, especially those using artificial intelligence in recruiting and hiring. With that background, Adam, can you start by giving our listeners a quick overview of the case?

Adam: Absolutely, Jerry. The plaintiffs in this case are a group of job applicants who allege that they applied for positions through employers. They used Workday’s applicant screening platform. According to the complaint, Workday’s AI and machine learning tools evaluated, ranked, and in some cases automatically rejected applicants. The plaintiffs claimed those tools had a disparate impact on protected groups, including older workers, individuals with disabilities, and certain racial groups. This latest ruling focused primarily on procedural issues. Workday asked the court to dismiss portions of the third amended complaint, arguing that the plaintiff still hadn’t adequately connected their claims to California, and that several new allegations exceeded the scope of what the Court previously allowed them to amend. The court granted some portions of Workday’s motion but denied most of it.

Jerry: Well, there are rulings, there are cases, and then there are cases, and I would say this is one of the most closely watched employment discrimination class action cases in the United States. Elizabeth, what do you see as the important takeaways from the ruling?

Elizabeth: The biggest takeaway is that the court allowed the plaintiffs’ California Fair Employment and Housing Act, or FEHA, claims to proceed. That’s significant because many of the plaintiffs are not California residents and applied for jobs located outside California. Workday argued that California employment law shouldn’t apply to those circumstances. The company essentially said there wasn’t a sufficient nexus between the alleged discrimination and California. The court disagreed.

Jerry: Adam, why would the court disagree with respect to that, what many would call an extraterritorial, type of argument?

Adam: Well, the plaintiffs had revised their complaint to allege that Workday’s AI screening systems were designed, developed, maintained, trained, and operated from Workday’s California headquarters. The court stated that the plaintiffs weren’t simply alleging that Workday happened to be headquartered in California. Instead, they alleged that the actual screening, scoring, and rejection decisions generated by the AI tools originated from California-based operations. At the pleading stage, the court found those allegations sufficient. What’s particularly notable is that the court viewed Workday as potentially being directly responsible for discriminatory conduct, rather than merely acting as a passive software vendor.

Jerry: That seems like a very major point of the decision. What did the court say about Workday’s role here?

Elizabeth: So, Workday argued that if an employer customer wouldn’t be liable under FEHA, then Workday shouldn’t be liable either. The court rejected that argument and explained that under California law, an entity acting as an employer’s agent can be directly liable for its own discriminatory conduct when performing employment-related functions on behalf of employers. In other words, the court treated Workday not merely as a software provider, but as a company that allegedly participated in employment decision-making through its screening technology. That distinction could have implications well beyond this case.

Jerry: Let’s talk about the practical implications of a ruling like that. What are the takeaways that employers should note from this ruling?

Adam: There are a couple of important takeaways from this. First, employers should recognize that courts are increasingly willing to scrutinize AI tools used in hiring. Historically, employers might have viewed applicant screening software as a neutral technology solution, but courts are now looking much more closely at whether those systems could create disparate impact on protected groups. Second, employers cannot assume that liability concerns end with the vendor. Even though Workday is the defendant here, the allegations highlight the risks associated with relying on automated screening tools without understanding how they function or whether they create adverse impacts.

Jerry: Elizabeth, to me, another important and interesting aspect of the decision involved its discussion of disability discrimination. Could you give our listeners some insights on that?

Elizabeth: Sure, so one plaintiff alleged discrimination based on physical disabilities, specifically asthma and cancer survivorship. The complaint alleged that AI hiring tools may identify proxy indicators associated with health conditions, things like employment gaps, medical leave history, or patterns that suggest treatment and recovery. The plaintiffs contended that the algorithm can infer disability-related characteristics from those proxies, even when disability information isn’t directly provided. Importantly, Workday did not challenge the sufficiency of those allegations in this motion. Instead, it argued that the plaintiff wasn’t permitted to add those theories. The court rejected that procedural argument and allowed the disability claim to proceed. For employers, that’s another reminder that AI systems can potentially create risk, even when they don’t explicitly ask about protected characteristics.

Jerry: Well, bottom line is, the court didn’t deny the motion in its entirety. What claims, indeed, were thrown out?

Adam: Yeah, that’s correct. One of the plaintiffs attempted to add a new race-based disparate impact claim that was focused on alleged discrimination against Asian American applicants, but the court found that theory had not been properly asserted in earlier versions of the complaint, and so it exceeded the scope of the amendment the Court had authorized, and as a result, that claim was dismissed.

Adam: The court also just struck allegations suggesting that Workday should be liable as an employer based on its own hiring practices. Concluding that that theory had not previously been pleaded and wasn’t authorized by the amendment order. So, while the plaintiffs won most of the major issues, Workday did succeed in narrowing the case in several respects.

Jerry: Well, as we wrap up this episode of the Class Action Weekly Wire, what are some of the broader lessons you think employers should take, both from this case and from this ruling?

Adam: I see at least three major lessons. First, AI governance is becoming a core employment law issue. Second, employers need visibility into how automated screening systems operate. Including what data they use, how candidates are ranked, and whether outcomes are regularly audited for disparate impact. Third, contractual protections with vendors are becoming increasingly important. Employers should review representations, warranties, indemnification provisions, audit rights, and compliance obligations relating to AI-enabled employment tools.

Elizabeth: I would add one more point. This decision reflects a growing judicial willingness to treat AI-driven employment decisions as employment practices subject to traditional discrimination laws. The technology may be new, but courts are applying familiar legal principles, including disparate impact, agency liability, and anti-discrimination statutes to evaluate these systems. Employers should expect continued scrutiny from courts, regulators, and plaintiffs’ attorneys in this area.

Jerry: Well, great insights from both of you, Elizabeth and Adam. The Mobley vs. Workday case is certainly another reminder that while artificial intelligence may streamline recruiting and employment-related decisions. It certainly doesn’t eliminate legal risk. In some respects, it may create new legal risks that employers need to manage and mitigate. So, we’ll continue monitoring developments in this case and the broader landscape of AI-related employment litigation in the class action space. Well, thanks so much for being with me today, Adam and Elizabeth, and thanks to our listeners for tuning in.

Adam: Thank you, Jerry, for having me.

Elizabeth: Thanks, everyone, have a great week.

Posted on by Gerald L. Maatman, Jr.

California Federal Court Grants In Part And Denies In Part Workday’s Motion To Dismiss In Mobley v. Workday

By Gerald L. Maatman, Jr., Adam D. Brown, and Elizabeth G. Underwood

Duane Morris Takeaways: In the closely watched AI-related litigation entitled Mobley, et al. v. Workday, Inc., No. 23-CV-00770 (N.D. Cal. June 22, 2026) (ECF No. 360), Judge Rita F. Lin of the U.S. District Court for the Northern District of California issued an order denying in part and granting in part Workday’s motion to dismiss.  The Court denied Workday’s motion to dismiss Plaintiffs’ California Fair Employment and Housing Act (“FEHA”) claims, holding that Plaintiffs adequately alleged a nexus to California because Workday allegedly designs, develops, and operates its algorithmic screening tools from its California headquarters.  Id. at 3-4.  The Court also denied the motion as to one of the plaintiffs’ Americans with Disabilities Act (“ADA”) claim, determining that her new proxy-discrimination factual allegations fell within the scope of a prior order granting leave to amend to address certain deficiencies in a prior iteration of Plaintiffs’ Complaint, despite Workday’s argument to the contrary.  Id. at 8.  However, the Court granted Workday’s motion to dismiss as to Plaintiff Rowe’s newly asserted race-based disparate impact claim because Rowe did not seek leave to add a race-based claim, and therefore Rowe could not add this claim to the Third Amended Complaint (“TAC”).  Id. at 9.

For employers and AI vendors defending against AI employment discrimination claims, this decision provides important guidance on how defendants can successfully move to strike unauthorized claims and legal theories that exceed the scope of court-granted leave to amend.

This development follows the Court’s previous Discovery Order, which we blogged on here, Workday’s unsuccessful Motion to Dismiss Plaintiff’s Amended Complaint, which we blogged about here, Workday’s first successful Motion to Dismiss, which we blogged on here, and the EEOC’s amicus brief filing, which we blogged about here.

Case Background

Plaintiffs Derek Mobley, Jill Hughes, Sheilah Johnson-Rocha, and FaithLinh Rowe brought this action against Workday, alleging that Workday’s algorithm-based applicant screening tools discriminated against them and other similarly situated job applicants based on race, age, and disability.  Id. at 1.  After the Court ruled on two rounds of motions to dismiss, Mobley proceeded on claims for disparate impact discrimination based on race under Title VII, disability under the ADA, and age under the ADEA.  Id. at 1-2.

On November 12, 2025, Mobley sought leave to file a further amended complaint adding three new named plaintiffs and claims for sex-based discrimination under Title VII and sex-based, race-based, and age-based discrimination under the FEHA.  Id. at 2.  The Court found good cause for the late amendment under Federal Rules of Civil Procedure 15 and 16.  Id.  Workday moved to dismiss the resulting Second Amended Complaint (“SAC”), and the motion was granted in part and denied in part.  Id.  Plaintiffs were given leave to remedy deficiencies in their FEHA claims, which lacked allegations of a nexus to California, and Hughes was given leave to amend her ADA claim.  Id.  Plaintiffs then filed a TAC.  Id.

Subsequently, Workday filed a motion to dismiss and to strike portions of the TAC, arguing Plaintiffs’ FEHA claims failed to plead a non-conclusory nexus between the alleged misconduct and California, and that the other amendments were unauthorized because they fell outside the scope of Plaintiffs’ leave to amend.  Id. at 1.

The Court’s Decision

The decision addressed several issues.

Plaintiffs’ FEHA Claims Were Plausibly Asserted

First, the Court denied Workday’s motion to dismiss the FEHA claims, finding that Plaintiffs sufficiently alleged that Workday, whose principal place of business is in California, participated in the alleged misconduct from its California headquarters.  Id. at 3.  The TAC alleged that Workday’s tools were “designed, developed, maintained, and controlled from [Workday’s] California headquarters” and that the “screening, scoring, and rejection” of Plaintiffs’ applications “originate[d] in and [was] carried out from California.”  Id. at 4.  The Court reasoned that the TAC adequately alleged “material participation in the allegedly unlawful discriminatory employment decisions by an actor (Workday, through its algorithmic decision-making tools) in California.”  Id.

The Court rejected Workday’s argument that its liability as an agent under the FEHA must turn on the liability of its customers, relying on the California Supreme Court’s decision in Raines v. U.S. Healthworks Medical Grp., 534 P.3d 40 (Cal. 2023).  Id.  Under Raines, Workday is not subject to derivative liability based on its employer-customer’s liability but instead “is directly liable for its ‘own engagement in FEHA-regulated activities on the employer’s behalf.’”  Id. (quoting Raines, 534 P.3d at 53).

The Court also rejected Workday’s contention that applying the FEHA to its California-based conduct would amount to an impermissible extraterritorial application, reasoning that wrongful conduct within California’s borders is not properly understood as “extraterritorial” regardless of where an aggrieved worker resides.  Id. at 5-7.

Plaintiff Hughes’s Amended ADA Claim Was Permissible

Second, the Court denied Workday’s motion as to the permissibility of Plaintiff Hughes’s ADA claim.  Id. at 8.  The TAC alleged that “algorithmic hiring tools can identify and rely upon [ ] proxy indicators of illness or health-related limitations” such as “medical-related leave, or patterns consistent with treatment and recovery,” and “can disproportionately flag and screen out such applicants based on inferred health status rather than job-related qualifications.”  Id.  The Court rejected Workday’s argument that the Court had not authorized new theories of proxy discrimination for physical disabilities, reasoning that the additional allegations were squarely within the scope of the leave to amend.  Id.

Plaintiff Rowe’s Race-Based Disparate Impact Claim Was Dismissed

Third, the Court dismissed Plaintiff Rowe’s race-based disparate impact claim under Title VII, which sought for the first time to assert discrimination based on her race as an Asian American.  Id. at 9.  The Court reasoned that the Second Amended Complaint did not contain such a claim and that Plaintiffs had not previously sought or received authorization to add the claim, as the prior race-related allegations were limited to African American and Black applicants.  Id.

Plaintiffs’ Direct-Employer Theory Was Stricken

Finally, the Court dismissed Plaintiffs’ new legal theory that Workday is liable as an employer because it used the challenged recruitment and hiring procedures in screening and selecting its own employees, explaining that this legal theory was unauthorized.  Id. at 10.

Implications For Employers

This decision highlights that companies developing and operating AI-driven hiring tools in and/or from California may be subject to the FEHA for their own California-based conduct, even when the affected applicants reside and apply for jobs out of state.

Moreover, the Court’s treatment of the amendments to the complaint underscores the importance of carefully observing the scope of court-granted leave to amend.  While the Court permitted new proxy-discrimination allegations supporting an existing ADA claim, the Court dismissed and struck a new race-based theory and a new direct-employer theory that exceeded the scope of the amendments the Court had authorized, illustrating that plaintiffs cannot use amendments to incorporate entirely new claims or theories without leave.

Posted on by Gerald L. Maatman, Jr.

No Retake Allowed: New York Federal Court Denies EEOC’s Motion For Reconsideration In Equal Pay Act Case Against School District

By Gerald L. Maatman, Jr., Olga A. Romadin, and Elizabeth G. Underwood

Duane Morris Takeaways: On June 18, 2026, Judge Anthony J. Brindisi of the U.S. District Court for the Northern District of New York denied the EEOC’s motion for reconsideration of the Court’s earlier order denying cross-motions for summary judgment in EEOC v. Hunter-Tannersville Central School District, No. 1:21-CV-00352, 2026 WL 1759441 (N.D.N.Y. June 18, 2026).  The district court found that the EEOC failed to satisfy the standard for reconsideration, reasoning that the EEOC had not identified an intervening change in controlling law, new evidence, or a clear error warranting relief.

This ruling is significant for employers defending Equal Pay Act claims and reinforces the high burden parties must satisfy to obtain reconsideration, namely, that a motion for reconsideration cannot be used to relitigate old issues or present evidence that was previously available.

Case Background

On March 26, 2021, the EEOC filed this action against the Hunter-Tannersville Central School District (“District”) alleging that the District violated § 206(d)(1) of the Equal Pay Act of 1963 by paying a former District superintendent, Dr. Susan T. Vickers (“Vickers”), less than her male colleagues for substantially equal work.  Id. at *1.  In response, the District denied the allegations and raised a statutory affirmative defense, asserting that any alleged pay disparity resulted from factors other than sex under 29 U.S.C. § 206(d)(1)(iv).  Id.

After several years of discovery, the parties filed cross-motions for summary judgment.  Id.  The Court denied both motions, finding that genuine disputes of material fact precluded summary judgment in favor of either party.  Id.  The EEOC then timely moved for reconsideration, which the District opposed.  Id.

The Court’s Decision

The Court ultimately denied the EEOC’s motion for reconsideration of the Court’s order denying cross-motions for summary judgment.  Id.

First, the EEOC argued that the Court had erroneously accepted certain facts as undisputed after overlooking contrary evidence, specifically a deposition exhibit that the EEOC admittedly did not submit with its prior motion papers.  Id.  However, the Court rejected this argument for two reasons.  Id.  The omitted deposition exhibit did not qualify as “new evidence” because it was readily available at the time of the earlier briefing.  Id.  Moreover, the EEOC did not show that the omitted evidence was inconsistent with any of the challenged findings.  Id. at *2.

Next, the EEOC contended that the Court misapplied Second Circuit precedent on the question of substantial equivalence.  Id.  The Court disagreed, explaining that the Second Circuit has made clear that “[w]hether two positions are ‘substantially equivalent’ for Equal Pay Act purposes is a question for the jury.”  Id. (quoting Lavin-McEleney v. Marist Coll., 239 F.3d 476, 480 (2d Cir. 2001)).  In particular, the Court determined that the EEOC did not show a clear error in the Court’s application of the law because the “expansive record” included “sufficient evidence from which a reasonable factfinder could conclude that Vickers’ comparators had different or additional job responsibilities and performance requirements.”  Id.

The EEOC also argued that the Court failed to require the District to “prove” that the pay disparities between Vickers and her comparators stemmed from gender-neutral factors.  Id. at *3.  The Court, however, determined that the EEOC’s argument misunderstood the relative burdens on a motion for summary judgment.  Id.  While the District would have needed to “prove” its affirmative defense as a matter of law to succeed on its own motion, to survive the EEOC’s motion and get to trial, “the District was only required to identify sufficient evidence from which a reasonable factfinder could conclude that ‘the pay disparity in question result[ed] from a differential based on any factor except for sex.’”  Id. (quoting Eisenhauer v. Culinary Inst. of Am., 84 F.4th 507, 522–23 (2d Cir. 2023)).  The Court found the District met that standard.  Id.

Finally, the Court rejected the EEOC’s argument that the Court failed to apply the law requiring the District to prove that longevity and negotiation were gender-neutral factors.  Id.  In rejecting the EEOC’s argument, the Court noted that the EEOC cited no controlling authority for the proposition that longevity and negotiations cannot constitute factors other than sex, identifying several courts within the Second Circuit that have found such factors to be legitimate factors other than sex.  Id.

Because the Court declined to reconsider its earlier ruling, the Court indicated that the EEOC’s contingent requests regarding the issues of willfulness, good faith, and damages were rendered moot.  Id. at *4.

Implications For Employers

The Court’s decision underscores that motions for reconsideration are subject to a demanding standard and cannot be used as a second opportunity to relitigate issues or present evidence that was available during an earlier round of briefing.

This decision also reinforces that the question of whether two job positions are “substantially equivalent” under the Equal Pay Act is a fact-intensive inquiry properly reserved for a jury, and that shared job descriptions alone do not establish substantial equivalence as a matter of law.  Id. at *2.

Lastly, the Court’s analysis confirms that longevity and salary negotiations remain viable “factors other than sex” under the Equal Pay Act in the Second Circuit.  Id. at *3.  Employers should therefore document the legitimate, gender-neutral factors underlying compensation decisions to support a potential affirmative defense in the event of an Equal Pay Act challenge.

Posted on by Gerald L. Maatman, Jr.

The Third Circuit’s FLSA Overtime Gap Time Decision Opens Up Circuit Split

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

Duane Morris Takeaways: On June 3, 2026, addressing an issue of first impression on overtime gap time, the U.S. Court of Appeals for the Third Circuit in U.S. Department of Labor v. Comprehensive Healthcare Mgmt. Servs. LLC, No. 24-2842, 2026 WL 1582064 (3d Cir. June 3, 2026), partially reversed an order of a district court that had awarded damages to the U.S. Department of Labor(“DOL”), which had brought a lawsuit on behalf of 6,000 healthcare employees, alleging various overtime violations under the Fair Labor Standards Act (“FLSA”) by Comprehensive Healthcare Management Services LLC (“Comprehensive”). On appeal, Comprehensive argued that the district court had erred in finding that the FLSA affords a remedy for overtime gap time claims, which address non-overtime hours in a non-exempt employee’s workweek, as well as misapplied a lower burden of proof to some of the claims against it, had erred in its finding that certain employees were nonexempt, and in some of its factual findings. The Third Circuit agreed with the employer in part, and vacated and remanded the matter to the district court.

Case Background

In 2018, the DOL brought a lawsuit in the U.S. District Court for the Western District of Pennsylvania against fifteen nursing and assisted living entities owned and operated by Comprehensive Healthcare Management Services LLC and its chief executive officer, alleging that the defendants had failed to pay hourly employees for all hours worked and the appropriate rate of pay, as well as failing to keep accurate pay records in violation of the FLSA. Id. at *1. One of the claims involved overtime gap time, which occurs when an employee who exceeds the overtime threshold does not receive pay for all non-overtime hours worked. Id.

In January 2024, the district court held a bench trial, following which it ruled in favor of the DOL, finding that there were “system errors” in the calculation of pay. Id. at *2. The district court explained that the defendants’ timekeeping system had not kept an accurate record of employees’ working hours, and Comprehensive paid employees for scheduled hours instead of hours they actually worked, as well as that the system automatically deducted meal breaks, even if employees had worked through them, and that the defendants had failed to accurately pay overtime wages. Id. The district court found that employees were not paid the required one-and-one-half regular rate required under the FLSA, and that the regular rate did not include pay that was required to be calculated in it, including shift differentials, bonuses, and other types of pay. Id. The district court also concluded that some employees had been improperly classified as exempt from the FLSA’s overtime requirement. Id. The district court, noting that the Third Circuit had not yet ruled upon the “viability of overtime gap time claims,” nonetheless awarded $35,804,438.20 in damages against Comprehensive for these violations. Id. at *3. Comprehensive appealed.

The Third Circuit’s Decision

On appeal, Comprehensive argued that the district court had erred in finding that claims for overtime gap time were cognizable under the FLSA. Id. at *3. The Third Circuit noted a disagreement among the circuits, with the Second Circuit having opined that overtime gap time claims were not cognizable under the FLSA in Lundy v. Cath. Health Sys. Of Long Island, Inc., 711 F.3d 106, 115-17 (2d Cir. 2013), while the Fourth Circuit found that they were in Conner v. Cleveland County, 22 F.4th 412, 426 (4th Cir. 2022). Id. Writing for the majority in a split panel decision, Third Circuit Chief Judge Michael A. Chagares explained that “[w]hen the statutory language is clear, the text is the beginning and the end of our inquiry.” Id. at *4. On review of the text of the FLSA, the appellate court found no mention of overtime gap time and concluded that the statute does not provide a remedy to overtime gap claims.  Id. In finding that there was no support in the text of the statute for an overtime gap claims, the court of appeals rejected the Labor Secretary’s argument that under § 207 of the FLSA, the term “regular rate” contemplates an overtime requirement, and so requires that a regular rate must be paid for all hours worked. Id. Further, the Third Circuit was unconvinced by the Secretary’s reference to the DOL’s guidance, which stated that overtime under the FLSA requires the payment of all straight time worked during non-overtime hours, finding that this ran counter to the unambiguous text of the Act. Id. at *4-5. Finally, agreeing with the Court of Appeals for the Second Circuit, the Third Circuit determined that individuals seeking to bring such claims could do so under state laws. Id. at *5. Thus, agreeing with Comprehensive, the Third Circuit reversed the district court’s ruling finding that Comprehensive had violated the FLSA by failing to compensate certain employees for overtime gap time. Id.

In reviewing the remaining arguments brought by Comprehensive, the Third Circuit court found that the district court did not err in applying a lower evidentiary burden to the claims against Comprehensive under the Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) burden-shifting framework, where an employee alleging an employer failed to keep adequate records may do so by producing sufficient evidence prior to the burden being shifted to the employer to counter the claims. Id. at *5-6. Noting that the district court based its findings on the time and pay records produced by Comprehensive, the appellate court concluded that “Mt. Clemens did not affect the analysis for these claims.” Id. at *6. The Third Circuit also found no clear error in the district court’s factual findings or finding of an ongoing pattern or practice of regular rate miscalculation, writing that the single witness that Comprehensive had produced in support of its contention that employees were paid for all hours worked instead of based on their scheduled hours was found to be unreliable by the district court, and that the Secretary of Labor had produced more concrete proof in the form of an investigation, and documentary proof corroborated by hundreds of employees. Id. Next, the Third Circuit affirmed the lower court’s finding that employees at different facilities were regularly not paid for work performed through meal breaks based on a representative sample of employee testimony and the testimony of the company’s regional consultant. Id. at *7.

Finally, the Third Circuit agreed with Comprehensive that the district court’s determination that certain employees were not exempt from the FLSA’s overtime requirements was an error because it had applied the “plain and unmistakable” burden of proof to its analysis, but under the U.S. Supreme Court’s decision in Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018), an employer seeking to prove an employee’s exempt status does so by a preponderance of the evidence, and vacated the part of the lower court’s decision and remanded it for further proceedings. Id. at *8-9.

In a partial dissent, U.S. Circuit Court Judge Jane R. Roth wrote that the text of the FLSA “is far from clear,” and the case law defining a regular rate offered additional confusion that could be addressed by making the actual rate, contracted rate, and regular rate of pay to be the same, aligning with the Fourth Circuit decision in Conner and the U.S. Department of Labor guidance that the majority declined to endorse. Id. at *10-11.

Implications For Employers

Employers with a workforce falling under the FLSA should take heed in ensuring that exempt employees, such as those working in an executive, administrative, or professional capacity, meet the statutory minimums such as salary requirements to qualify as bona fide exempt from overtime requirements. Maintaining accurate pay and time records for exempt and non-exempt workers and conducting regular audits may serve well in defending against miscalculation allegations, as the appellate court here confirmed the lower court’s conclusion based on records provided by the company.

This federal appellate court decision further signals a circuit split on the issue of whether overtime gap time claims are cognizable under the FLSA, with the Third Circuit here joining the Second Circuit in deciding that under the plain meaning of the text they are not, while the Fourth Circuit maintains that the FLSA does offer relief for plaintiffs seeking to bring such claims.

Posted on by Class Action Defense

The Class Action Weekly Wire – Episode 152: Key Arbitration Developments In Class Action Litigation

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and special counsel Eden Anderson and Rebecca Bjork with their discussion of significant arbitration developments in class actions.

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

Episode Transcript

Jerry Maatman: Thank you, loyal blog readers and podcast listeners for joining us for our next episode of our weekly series and podcast called The Class Action Weekly Wire. I’m Jerry Maatman of Duane Morris, and joining me today are my colleagues, Eden Anderson and Rebecca Bjork. Thank you so much for being here today on the podcast.

Eden Anderson: Great to be here, Jerry.

Rebecca Bjork: Thanks for having me, Jerry.

Jerry: Today, we wanted to discuss and explore trends and important rulings in the area of arbitration and class action litigation. Arbitration has been one of the areas where each year seems to bring new rulings and new gloss to the Federal Arbitration Act. We saw significant Supreme Court decisions this past year, and California courts also continue to reshape the relationship between arbitration and representative actions brought under the PAGA. Eden, when you look at the last 18 months, what stands out to you?

Eden: Yeah, Jerry, two things stand out. First, the Supreme Court continues to refine the scope of the Federal Arbitration Act’s transportation worker exemption. And second, California courts are still trying to answer some fundamental questions about how arbitration affects representative PAGA claims.

Jerry: Let’s start with the U.S. Supreme Court. The biggest arbitration decision so far this year is probably Flowers Foods vs. Brock. Rebecca, what was that case all about?

Rebecca: That case involved delivery drivers who distributed bakery products for a company named Flowers Foods, and the drivers argued that they fell within the transportation worker exemption in Section 1 of the Federal Arbitration Act and therefore could not be compelled to arbitrate under that act. The company argued that the drivers were making local deliveries only, and were not the kind of interstate transportation workers Congress had in mind when it created that exemption.

Jerry: And how did the Supreme Court come out on that question?

Rebecca: Oh, the Supreme Court disagreed. The court focused on the role that the workers played in the movement of goods through interstate commerce, and the key takeaway is that a worker doesn’t necessarily have to cross state lines personally to qualify for the exemption. If the worker is participating in a continuous interstate flow of goods, the exemption may apply even when the worker’s own deliveries occur entirely within one state.

Eden: And that is what makes the decision important. A lot of businesses have assumed that local delivery drivers were safely within the FAA’s scope. Flowers Foods suggests the analysis is more nuanced than that. Employers with delivery networks, logistic operations, warehouse-to-consumer distribution systems, or similar models should be evaluating whether portions of their workforce might now fit within the transportation worker exemption.

Rebecca: And what’s interesting is that this case, Flowers Foods isn’t really an outlier. It’s part of a broader trend at the Supreme Court. Over the last several years, the court has repeatedly focused on the actual work being performed, rather than formal job titles or industry labels, and Flowers Foods continues that trajectory.

Jerry: So, if that’s the federal story at the Supreme Court level, what about California in terms of the state law story and the significant litigation that occurs within the Golden State?

Eden: Well, as our listeners know, under the U.S. Supreme Court’s decision in Viking River, out in California, individual PAGA claims can be separated from a PAGA action and compelled to arbitration. But after Viking River, plaintiffs here began trying to disclaim their individual PAGA claims, trying to avoid arbitration. And courts out here have been grappling with whether that’s a permissible tactic and whether if an individual PAGA claim is found to be meritless or non-viable, whether the plaintiff can still pursue representative PAGA claims on behalf of other employees.

Jerry: One of the most significant cases from California in 2025 surely is the CRST Expedited v. Superior Court case, where the employee voluntarily dismissed the individual PAGA claim and sought to continue litigating only in a representative capacity. The employer argued that once the individual claim was gone, the representative claim also had to go as well, but the Court of Appeal disagreed.

Eden: That’s right, Jerry. Faced with supposed ambiguity in the statute, the Court of Appeal interpreted PAGA very broadly, and concluded that plaintiffs can abandon their individual PAGA claims, sidestep arbitration altogether, and pursue only representative PAGA claims in court.

Jerry: So, the bottom line is the CRST decision effectively gave support to the notion that a plaintiff’s lawyer can litigate a headless PAGA theory successfully in court.

Rebecca: It was a significant victory for the plaintiffs’ bar, yes, because it suggested that representative claims might survive even after an individual claim is dismissed.

Rebecca: But that’s actually not the end of the story, because just two days later, another California appellate court reached the opposite conclusion. And that case was Williams v. Alacrity Solutions Group, and the court held that a plaintiff needed a viable and timely individual claim in order to pursue representative PAGA penalties. And because the plaintiff’s own claim was time-barred, that court concluded he could not proceed with the representative action.

Eden: Yeah, and we saw a similar approach in Leeper vs. Shipt. The plaintiff there also tried to avoid arbitration by disclaiming individual relief, and the Court of Appeal there held that all PAGA actions necessarily must include an individual claim. In the court’s view, you can’t simply disclaim an individual PAGA claim and proceed only in court on behalf of others: your individual PAGA claim has to be asserted and is subject to arbitration.

Jerry: Well, it sure seems like these issues and principles are on a collision course for the California Supreme Court at this point.

Rebecca: That’s exactly right, and that’s why the California Supreme Court’s upcoming review is so important. The Court has agreed to address two fundamental questions: first, does every PAGA action necessarily contain both an individual and a representative component? And second, can a plaintiff choose to pursue only the representative portion of a PAGA claim?

Jerry: Well, these sound like technical parsings of the statute, but my sense is there are enormous practical consequences that can stem from the outcome of this question.

Eden: That’s correct, Jerry. If the California Supreme Court approves headless PAGA actions, plaintiffs who signed arbitration agreements, will be able to bypass arbitration and proceed, directly with representative claims in court. It could also occur, though it seems contrary to the statute, that the court could find that a plaintiff who lacks a viable PAGA claim may nonetheless still pursue representative PAGA claims on behalf of others. On the other hand, if the court rejects a ‘headless’ PAGA theory, then individual PAGA claims will continue to be arbitrated, and if a plaintiff loses, then their case should be over. Oral argument in Leeper was supposed to occur in May, but the parties had a conflict, and the California Supreme Court doesn’t hear arguments all summer long, so even if argument occurs in September, we may not see a decision on this issue until year’s end. So, we have a ways to go before we will know the outcome.

Jerry: The bottom line, then, it isn’t just whether or not an employer has an enforceable arbitration agreement, it’s whether, under the pertinent case law, a plaintiffs’ lawyer can structure PAGA claims in such a way to avoid or bypass arbitration altogether. Well, before we wrap up, what are the practical takeaways in your advice for employers, given this mosaic of rulings?

Rebecca: Well, first, review your arbitration agreements, and especially if your workforce includes drivers, delivery personnel, others involved in moving goods through interstate commerce, because Flowers Foods may affect assumptions that you have had in place for many, many years regarding your arbitration program.

Eden: And second, continue viewing arbitration as an important tool, but not necessarily one that can be used in all PAGA cases.

Rebecca: And third, stay current in the law. This is a fast-moving area, and it’s an area where a single appellate decision can material change litigation strategy.

Jerry: Well, that’s a great summary from both of you. Eden and Rebecca, thanks so much for joining us today on The Class Action Weekly Wire, and thanks to all our loyal listeners for tuning in. We’ll continue to track developments on the arbitration front and it’ll culminate in Chapter 4 of the Duane Morris Class Action Review for 2027 to be published during the first week of January next year. Well, thanks so much for being here, and looking forward to being with you next time.

Eden: Thanks, Jerry, and thanks to the listeners.

Rebecca: Thanks for having us!

Posted on by Gerald L. Maatman, Jr.

The Duane Morris Class Action Defense Blog’s 700th Post!

By Gerald L. Maatman, Jr.

Duane Morris Takeaways: Since its inception in September of 2022, the Duane Morris Class Action Defense blog has posted 700 times! There have been over 100,000 views to blog posts, with thousands of people reading about class action litigation developments. There are so many highlights from the last 700 posts, but we wanted to provide just a few for you here. Click on the links below to see all the hot trends in class action litigation.

We launched the third edition of the Duane Morris Class Action Review, which is a one-of-its-kind publication analyzing class action trends, decisions, and settlements in all areas impacting Corporate America. The Review has been prominently featured in the media and is a must-have for all human resources professionals and corporate counsel.

We also published mini-books focused on specialized areas of law (including ERISA, Products Liability & Mass Torts, FCRA, Discrimination, Consumer Fraud, Antitrust, TCPA, Data Breach and Privacy, Wage & Hour and PAGA, and EEOC and Government-Enforcement), various unique industries (including Higher Education, Insurance, Energy, Oil, & Gas, Transportation, Automotive, & Logistics, Healthcare, Hospitality, and Digital Assets & Blockchain), and state-specific laws in class action litigation and on EEOC-Initiated litigation.

Every week on the blog, we feature attorneys and experts discussing the latest class action developments and rulings on the Class Action Weekly Wire Podcast. Tune in each week for a new episode! Some of the most popular podcasts were featuring the dismissal of a class action in a data breach area, a discussion on the California’s Supreme Court’s win for employers, and the overview of class action litigation in the digital assets and blockchain sector.

Click here to read our most viewed blog post of 2026, entitled “AI Hallucinated Case Citations Prompt Sanctions And Delay Class Action Settlement.” Over 2,000 people read this post! Other top reads included our analysis of a 2024 ruling in Illinois dismissing class action privacy claims, an overview of the American Tort Reform Association’s picks for the top Judicial Hellholes in 2025, and our always sought-after annual blog post covering the developments in EEOC FY Filings.

Thank you, loyal followers, for making the Class Action Defense blog your stop for class action litigation related information, trends, and analysis. We truly appreciate it! Please keep coming back, we promise to keep the content fresh and informative!

Posted on by Class Action Defense

The Class Action Weekly Wire – Episode 151: Key Appellate Decisions In Class Action Litigation

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman, special counsel Tyler Zmick, and associate Christian Palacios with their discussion of significant appellate rulings in class actions.

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

Episode Transcript

Jerry Maatman: Thank you for being here again, loyal listeners, for the next episode of the Duane Morris Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today are my colleagues, Tyler and Christian. Thanks so much for being on the podcast.

Tyler Zmick: Thank you for having me, Jerry.

Christian Palacios: Glad to be here, Jerry.

Jerry: Today, we wanted to discuss trends and important rulings in the area of appeals in class action litigation. Parties have limited options when it comes to seeking direct or interlocutory appellate review of class certification decisions and other class-like rulings. What are the typical ways in which parties can move for interlocutory appeal in this space?

Tyler: So, the primary mechanism is Rule 23(f) of the Federal Rules of Civil Procedure, and under that rule, a party can ask the federal appellate court for permission to appeal within 14 days of the district court issuing an order that either grants or denies class certification. Parties can also seek interlocutory appellate review under Federal Statute 28 U.S.C. § 1292(b),  and Section 1292(b) appeals are especially helpful in complex cases to correct early errors, questions of law that, if put off until after final judgment, might otherwise require parties to re-do years of extensive litigation.

Jerry: What’s the primary practical difference between these two options?

Christian: So, unlike interlocutory appeals under 28 U.S.C. §1292(b), Rule 23(f) doesn’t require the District Court to certify an issue for appeal. Moreover, Rule 23(f) does not include the potentially limiting requirements of Section 1292(b), under which the District Court can certify an issue for appeal only where an order “involve[s] a controlling question of law as to which there is substantial ground for difference of opinion” and where “an immediate appeal from the order may materially advance the ultimate termination of the litigation.”

Jerry: At the end of the day, what sort of analytics underlie the success and failure of these types of petitions, typically, at the Court of Appeals level?

Tyler: So that’s a great question, and the data shows that appellate courts deny approximately 75% of Rule 23(f) petitions to appeal class certification decisions, and most of those denials come by way of summary orders that do not provide any reasoning. That said, in approximately 10% of cases, the appellate court issues an opinion explaining its reasons for either granting or denying the Rule 23(f) petition. And while reasoned decisions are somewhat rare in this space, appellate courts nonetheless issued several noteworthy decisions in 2025 regarding Rule 23(f) appeals and Section 1292(b) appeals.

Jerry: Chapter 3 of the Duane Morris Class Action Review summarizes and analyzes those key appellate rulings. Do you have some examples of some significant rulings where petitions for appeal were granted over the last 12 months?

Christian: Definitely. In Konya, et al. v. Lockheed Martin Corp., the plaintiffs, four retirees, filed a class action against the defendant, alleging that the company violated the Employee Retirement Income Security Act, or ERISA, when it transferred responsibility for their pensions to a private annuity provider, named Athene Annuity & Life Assurance Company of New York, through a pension risk transfer. The plaintiffs claimed that Athene was a riskier and less secure choice than traditional providers and that the defendant prioritized cost savings over the plaintiffs’ financial security in retirement. The defendant then moved to dismiss for lack of standing, under the U.S. Supreme Court’s decision, Thole, et al. v. U.S. Bank, 140 S.Ct. 1615 (2020), arguing that because the plaintiffs had not yet lost any benefits, they were not able to bring lost benefits claims. The court rejected this argument, finding that the retirees had alleged enough potential harm to proceed. That same day, a district court in Washington, D.C., ruled the opposite way in a nearly identical case involving Athene. Faced with these conflicting rulings and mounting litigation nationwide, the defendant filed a motion for an interlocutory appeal. The court granted the motion, finding that the question of standing was a purely legal issue that could potentially resolve or significantly simplify the case. Noting the conflicting court decisions and the broader implications for similar lawsuits, the court granted defendant’s motion for an interlocutory appeal and stayed the case while the Fourth Circuit considers the matter.

Jerry: That’s a very interesting outcome, especially in-so-far as the rationale of the Court of Appeals was, elucidated to give the reader of the opinion a sense of what motivated the Court of Appeals to grant the petition. So, we’ll see what happens and how the Fourth Circuit rules. Any other key rulings in the appeal space to share with our listeners?

Tyler: Yes, I think one noteworthy decision came from the Northern District of California in 2025 in a case called Mullins v. International Brotherhood of Teamsters, and the District Court in that case granted a request by the defendants to certify an interlocutory appeal under Section 1292(b). And the issue in that case was whether the Federal Railway Labor Act, or RLA, gives individual employees the right to pursue grievances independently, even when their union decides not to do so. Previously, the district court had ruled in favor of the plaintiffs and held that individual employees can pursue grievances even when the union does not do so. The defendants argued that this ruling was appropriate for interlocutory appeal because it involved a controlling legal question on which there was substantial disagreement among courts, and that resolving it now could advance the case. And the district court agreed, noting that other courts, including other federal appellate courts, have issued conflicted opinions on whether the RLA provides individual grievance rights. Therefore, because the issue was a purely legal issue and central to the one remaining claim, the District Court determined that it met the standard for interlocutory appeal under Section 1292(b). Therefore, the District Court granted the motion and certified the appeal, which the Ninth Circuit actually later accepted, and that appeal is still pending before the appellate court.

Jerry: Well, those are two great examples, and one would anticipate that we’ll see, during the next 12 months, a continued pattern by courts of appeals in terms of this kind of patchwork quilt of data analytics in terms of acceptance or denial or reasons why an appeal might be ripe to be decided by a court of appeals.

Well, thanks so much for all this great analysis, Christian and Tyler, and thank you for being here today as our guests on the Class Action Weekly Wire. Listeners, thanks so much for tuning in.

Tyler: Thank you for having me, Jerry, and thank you, listeners.

Christian: Thanks, everyone. Happy to be a part of the podcast.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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