Class Action Defense

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

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

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

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

Case Background

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

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

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

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

The District Court’s Decision

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

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

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

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

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

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

Implications For Universities And Other Title IX Institutions

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

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

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

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

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

Case Background

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

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

The Fourth Circuit’s Decision

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

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

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

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

Implications For Employers

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

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

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

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

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

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

Case Background

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

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

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

The Court’s Decision

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

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

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

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

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

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

Implications For Businesses

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

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

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

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

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

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

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

Background

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

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

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

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

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

The Third Circuit’s Decision

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

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

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

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

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

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

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

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

Implications For Companies

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

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

May 29, 2026May 29, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 149: Key Class Action Trends In The Insurance Industry

Duane Morris Takeaway: This week’s episode features Duane Morris partners Jerry Maatman and Jessica La Londe and associate Ryan Garippo with their discussion of Duane Morris’ Insurance Class Action Review, highlighting several trends and developments shaping class action litigation in this industry.

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: Welcome to our listeners. Thank you for being here on our weekly podcast, the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today are my colleagues, Jessica La Londe and Ryan Garippo. Jessica is a partner in both our San Francisco and Seattle offices, a team lead for the Duane Morris Insurance/Reinsurance Industry Group, and co-chair of the firm’s Insurance Division of the Trial Practice Group. Ryan is an associate here in our Chicago office, and a member of the Class Action Defense Team. Thanks so much to both of you for joining us today on the podcast.

Jessica La Londe: It’s really great to be here, thank you so much.

Ryan Garippo: Thanks, Jerry.

Jerry: Today on the podcast, we’re discussing the publication of a brand-new desk reference called the Insurance Class Action Review – 2026. Listeners can find this e-book and resource on our blog, the Duane Morris Class Action Defense Blog. Jessica, can you tell our listeners a bit about this desk reference?

Jessica: Yeah, absolutely, Jerry, thank you so much, and I’ll also note that it has been linked to on our insurance blog page as well. So, this release is Duane Morris’ sixth class action publication this year that has an industry focus. The Insurance Class Action Review is intended to and does analyze the key rulings and developments in 2025 from all sorts of different areas of the class action landscape that impact companies in the insurance industry, and it provides insights into evolving and emerging trends. We are hopeful that the insurance companies that we work with and insurance companies out there in the industry benefit from this resource to help them see what their potential class action risks are out there, and to aid them, in addition, in their compliance with laws and standards.

Jerry: Well, class action litigation sure is on the rise in many industries, certainly a truism in the insurance industry. What’s driving that trend in this sector?

Ryan: Well, Jerry, it’s really a combination of old risks and new ones. Class actions have been and are now still one of the most powerful procedural tools in the American legal system. There are really few mechanisms that can shape liability in the way that a class action claim can. So, for example, a single claim that might otherwise involve limited damages can suddenly expand into thousands, sometimes millions of dollars, both for policyholders and for a variety of other consumers, that the policyholders insure. So that reality has really fundamentally changed the way that litigation environment operates for insurers.

Jessica: And I’ll just jump in and note that the kinds of claims that we’re seeing continues to grow, in the class action world in general, and as it pertains to the insurance industry. So lots of folks might be aware that historically, insurers have dealt with class action on various topics – commonly premium calculations, underwriting practices, claims handling practices – but now we’re seeing a whole bunch of new categories that are affecting insurance companies and the insurance industries. Those include some of the up-and-coming issues, like data privacy breaches, artificial intelligence, underwriting models, cybersecurity issues, and even, as we’ve seen, climate-related coverage disputes.

Ryan: Yeah, and really that expansion reflects how much the insurance industry itself has changed. Insurers now operate in an environment where virtually every business practice can create exposure across a broad customer base, and as a result, the industry occupies a uniquely complicated position legally, because insurance products touch nearly every aspect of American life, yet the policies themselves are highly technical and highly regulated.

Jerry: Well, that description sure gives us some definitions in this space and shows that insurance-related disputes rarely involve just one body of law. Seems like you’re dealing with contract interpretation, state insurance regulations, consumer protection statutes, privacy laws, administrative guidance, and many differing standards across multiple jurisdictions. It’s truly a patchwork quilt. That complexity certainly creates a fertile ground for class-wide and collective-wide litigation strategies initiated by the plaintiff’s bar.

Jessica: Okay, that’s very true, and it’s probably a surprise to no one that plaintiffs’ lawyers are increasingly sophisticated when they’re navigating all these different areas of law. We’re continuing to see plaintiffs’ efforts to certify nationwide and multi-state classes, even in areas where state law variations historically pose major obstacles, because there can be state variations in all these types of regulations and laws, but we are seeing these combined and collective efforts across states. But the upside is that the insurance industry is not without its tools. Insurers are responding themselves with more advanced defense strategies, including things like arbitration provisions, class action waivers, data governance protocols, and improvements in claims administration systems themselves.

Jerry: I think there’s also somewhat of a catch-22 there. Technology has changed the equation and litigation outcomes significantly, and over the last decade, insurers in particular have undergone major digital transformation initiatives in terms of collecting and processing enormous amounts of consumer-related data, which creates both efficiency, but also introduces a bit of risk into the equation.

Jessica: That is very true, and just like insurance companies are underwriting risks that their policyholders are facing on all these issues, they themselves are facing these issues. So, cybersecurity and privacy-related class actions are, of course, a major area of exposure now. And regulators and plaintiffs’ firms are really scrutinizing how insurers are gathering, storing, sharing, and securing all this personal information that is part of what they do every single day. And because insurance companies maintain such highly sensitive financial and health-related data, just one single incident can quickly snowball and escalate into what we’re seeing as large-scale litigation on these issues.

Jerry: Well, the data analytics that our group collects and publishes on an annual basis showed these attributes of the space in terms of more class actions being filed last year than any year before, and settlements were higher than in any other year in the history of American jurisprudence. So, you’re layering these external economic pressures and factors, catastrophic weather events, inflationary pressures, rising healthcare costs, labor market changes – all putting pressures on insurers’ pricing methodologies and claims practices.

Ryan: Yeah, that’s completely right, Jerry, and that combination has created a litigation landscape that is more dynamic and consequential than at any other point in the industry’s history. Every day, we’re litigating questions surrounding fairness, transparency, and the economic responsibility, through the class action mechanism itself, and these issues are of real consequence for insurers.

Jerry: I was saying earlier, you learned the plaintiffs’ bar is nothing if not inventive and innovative, and certainly the future of insurance-related class action litigation is likely to be shaped by many of these forces that extend well beyond traditional coverage disputes, things like artificial intelligence, climate risks, digital surveillance technologies, ESG initiatives, mass arbitration tactics, and expanding consumer protections are all reshaping class action litigation.

Ryan: Yeah, Jerry, and these developments are all happening simultaneously. There are courts, regulators, consumers, even the insurance industry itself, which are attempting to effectively negotiate these evolving standards in real time. So, you know, getting out in front of these issues and making strategic planning efforts is critically important for not only corporate defendants, but more specifically as to insurers.

Jerry: I had an insurance executive share with me that these sorts of risks are just enormous, because the outcome of a class action lawsuit can be not only financially devastating for a company, but also impair its reputation, create disruption to its operations, and have regulatory consequences.

Jessica: That is very true, and everyone knows that insurance companies are well aware of their reputation in the market, and bad news and being in the headlines certainly draws regulators’ attention, so that’s something that insurance companies want to avoid getting on that list. And it’s why insurance companies need to approach class action defense from a very big picture perspective. We look at things like the successful defense strategies that require coordination, across legal, compliance, cybersecurity, operations, claims administration, executive leadership, all facets of an insurance company’s operation. And it’s no longer enough to just kind of try to tackle these cases one at a time, as they come.

Jerry: Those factors underscore the purpose and the motivation behind the creation of the Duane Morris Insurance Class Action Review, and in terms of developing this resource for our clients in the insurance industry. The goal is to create a practical desk reference for corporate counsel and industry professionals who are increasingly having to confront these sophisticated and challenging class action risks.

Ryan: Yeah, Jerry, and it’s those risks and these trends that really reinforce the need for this kind of resource. There are rulings involving class action, litigation in the insurance industry every single day, and they’ve remained very steady for over the last, over the past several years. But we really have started to see a noticeable uptick in activity during 2025. We’d expect that to continue into 2026.

Jerry: Well, from a prognostication standpoint, this suggests the area is only going to continue to grow in importance, moving forward for the insurance industry.

Jessica: I think that’s definitely right. I do think class actions are going to continue to be one of the primary ways through which major questions are resolved in upcoming years – questions like insurance practices, consumer protection, technology, and economic accountability.

Jerry: Well, thank you, Jessica and Ryan, for joining us on this week’s podcast. Listeners, remember to stop by both the Class Action Defense Blog and the Insurance Blog for a free copy of our new e-book and publication, the Insurance Class Action Review – 2026. Thanks for tuning in.

Ryan: Thanks, Jerry, always a pleasure to be on the podcast.

Jessica: Thank you so much, Jerry, and thanks to everyone for listening.

May 28, 2026May 28, 2026 by Gerald L. Maatman, Jr.

U.S. Supreme Court Delivers Arbitration Exemption To Last-Mile Local Drivers

By Gerald L. Maatman, Jr., Jennifer A. Riley, Eden Anderson, Rebecca Bjork, Ryan T. Garippo, and Olga A. Romadin

Duane Morris Takeaways: On May 28, 2026, in Flowers Foods, Inc. v. Brock, 2026 WL 1485669 (U.S. May 28, 2026), and in a much-anticipated ruling following a grant of certiorari from the 10th Circuit’s decision in Brock v. Flowers Foods, Inc., 121 F. 4th 753 (10th Cir. 2024), Justice Neil Gorsuch authored a unanimous opinion for the U.S. Supreme Court that affirmed the applicability of the Federal Arbitration Act (the “FAA”) transportation worker exemption for “last-mile” delivery drivers. Today’s opinion builds on the Supreme Court’s prior decisions in Southwest Airlines Company v. Saxon, 596 U.S. 450 (2022), and Bissonnette v. LePage Bakeries Park Street, LLC, 601 U.S. 246 (2024, to expand the FAA exemption for transportation workers seeking to bypass arbitration. The decision has significant implications for companies who employ delivery drivers and the logistics industry generally, and will play an important factor in re-shaping the arena of class and collective action litigation.

Case Background

Angelo Brock, a Denver-based delivery franchisee who had purchased distribution rights to baked goods produced by Flowers Foods, Inc. (known as a “last-mile” delivery driver), brought a putative class and collective action in a Colorado federal district court alleging that Flowers Foods had underpaid its franchisees in violation of the Fair Labor Standards Act (“FLSA”) and state laws. Id. at *2. “Brock picks up [Flowers Foods’] products from a warehouse in Colorado and delivers them to local stores, all without leaving the State.” Id. He also signed an arbitration agreement. Id. As a result, Flowers Foods filed a motion to compel arbitration under the terms of the agreement that it entered into with its franchisees, which the district court denied, citing 9 U.S.C. § 1., which exempts workers engaged in interstate commerce, and is commonly known as the FAA’s transportation worker exemption. Id.

In denying Flowers Foods’ motion, the district court concluded that Brock fell within the ‘‘transportation worker exemption” of § 1 of the FAA, which exempts transportation workers who engaged in interstate commerce from arbitration. Thus, even though Brock did not cross state lines, the district court reasoned that he had engaged in the transportation of the company’s products – which were created outside of the state – because he delivered those products in Colorado. Id. As a result, the district court declined to compel arbitration. Id.

Following an appeal of that decision by Flowers Foods, which argued that a worker who does not leave the state, like Brock, does not qualify for the exemption, the 10th Circuit affirmed the district court’s decision based on its determination that Brock’s “intrastate route formed a constituent part of the . . . interstate journey” of the cross-border delivery of Flowers Foods’s products. Id. Flowers Foods then sought review from the U.S. Supreme Court.

The U.S. Supreme Court granted Flowers Foods’ petition for writ of certiorari and sought to answer the question of whether a worker can fall under the “transportation worker exemption” for interstate workers under § 1 of the FAA if they neither cross state lines nor interact with vehicles that do. Id. at *3.

The Supreme Court Decision

In a unanimous decision, Justice Neil M. Gorsuch authored the 8-page opinion of the U.S. Supreme Court that affirmed the 10th Circuit’s ruling and held that “transportation workers” are exempt from the reach of the FAA, citing the statutory text, historical use, and U.S. Supreme Court precedent.

The Supreme Court cited its three recent decisions addressing § 1 of the FAA, including New Prime Inc. v. Oliveira, 586 U.S. 105 (2019), Southwest Airlines Company v. Saxon, 596 U.S. 450 (2022), and Bissonnette v. LePage Bakeries Park Street., LLC, 601 U.S. 246 (2024), to reject Flowers Food’s argument that in order to qualify for the exemption, a worker must cross state lines or engage with a vehicle that does. Id. Based on the statutory text, the Supreme Court found nothing in the language of the FAA requiring crossing state lines or interacting with a vehicle that does so. Under the definition for “interstate commerce” provided by Black’s Law Dictionary, the Supreme Court further noted, the transportation of goods between states includes intrastate activity. Id.

The Supreme Court also cited historic use of “interstate commerce” by referencing case law from the 19th and early 20th centuries, including discussing a case concerning steamship transportation of goods called The Daniel Ball, 10 Wall. 557 (1871), where the Supreme Court had found that a steamer that operated in one state without direct contact with other vessels transporting the goods into other states was found to engage in interstate transportation because the goods were destined for other states. Id. at *4.

Further, the Supreme Court rejected Flowers Foods’ argument that prior precedent was erroneously based on the U.S. Constitution’s Commerce Clause, and not the FAA. The Supreme Court noted that the similarity in the language between the Clause and § 1 were “probative” of the common conception of the meaning of the term used by both at the time that the FAA was enacted. Id.

Finally, the Supreme Court declined to find that the distribution agreement between Flowers Foods and Brock was relevant to the analysis. The Supreme Court did not find any significance to the fact that the agreement was signed by Brock’s independent company, and thus affirmed the judgment of the 10th Circuit by expanding the transportation worker exemption to individuals who do not travel to other states or come into contact with vehicles that do. Id. at *5.

Implications For Employers

As we predicted in a previous post in October 2025 (here – blog post), the Supreme Court’s decision is highly significant for logistics companies and deliver driver employees. This decision further expands the “transportation worker exemption” to make it much more difficult for employers to compel arbitration in class and collective actions brought by workers in transportation and transportation-adjacent positions. The U.S. Supreme Court’s decision, which was designed to prevent an analysis that hinges on “game of tag” with vehicles engaged interstate commerce, now has the potential to sweep in a wide variety of workers whose conduct is only tangentially related to movement of a company’s products across state lines.

Despite this blow to employers’ arbitration defenses, there are still some arguments for companies to assert in order to maintain their arbitration programs. By its own terms, the Supreme Court’s opinion is limited to whether § 1 requires a bright line rule that workers who “never cross[] state lines and never interact[] with vehicles that do” are outside of the FAA exemption and does not opine on whether a worker could be so attenuated from interstate commerce that they fall outside the scope of the exemption. Further, some arbitration agreements may be enforceable under state law and, therefore, the choice of law provisions in those these agreements will likely be the difference maker in whether a class action will survive a motion to compel arbitration or not. As a result, corporate counsel – particularly in the logistics industry – should follow the developments in this space closely, because their arbitration programs are under siege and a new wave of class actions is likely headed for their organizations.

May 27, 2026May 27, 2026 by Gerald L. Maatman, Jr.

North Carolina Federal Court Highlights “Severe And Pervasive” Requirement Under Title VII In Denying Partial Motion To Dismiss A Pattern or Practice Claim Brought By The EEOC

By Gerald L. Maatman, Jr., Denis I. Yavorskiy, and Andrew P. Quay

Duane Morris Takeaways: On May 19, 2026, in EEOC v. Recovery Innovations, Inc. d/b/a RI Int’l, No. 25-CV-767, 2026 U.S. Dist. LEXIS 110782 (E.D.N.C. May 19, 2026), Judge Terrence W. Boyle of the U.S. District Court for the Eastern District of North Carolina denied a partial motion to dismiss a Title VII pattern or practice claims after finding that the EEOC’s complaint properly pled “severe or pervasive” harassment and sufficiently described a group of similarly aggrieved female employees. Id. at *4, 5. Judge Boyle held that alleged unwelcome conduct from a supervisor who supervised “at least some of the” allegedly injured workers was “sufficiently severe or pervasive” and that the universe of alleged victims was sufficiently described without identifying the alleged victims. Id.

The decision reinforces the importance of authoritative conduct and the leniency afforded to plaintiffs and the EEOC in bringing pattern or practice claims on behalf of alleged victims of discrimination.

Case Background

Defendant Recovery Innovations operates the Dix Crisis Intervention Center in Jacksonville, North Carolina. Id. at *1, 2. The Jacksonville center provides outpatient services for mental health disorders and substance abuse. Id. at *2. Recovery Innovations hired Chiara Munna as a “Peer Support Specialist” at the Jacksonville center. Id. Munna’s shift supervisor allegedly made “repeated sexual comments to the women under his supervision, touched them sexually, and sent at least two of them unwelcome sexual text messages and photos.” Id.

The EEOC filed suit on behalf of Munna and a group of similarly aggrieved female employees, asserting claims for: (1) sex harassment and hostile work environment under Title VII; (2) failure to accommodate under the ADA; (3) discriminatory discharge under the ADA; and (4) ADA record keeping violation under the ADA. Id. The Title VII claim is brought on behalf of Munna and “similarly aggrieved women.” Id. Recovery Innovations moved to dismiss the Title VII claims on behalf of the group of workers but not those brought on Munna’s behalf individually. Id.

The complaint alleges that Munna’s shift supervisor “engaged in unwelcome and offensive conduct ‘on nearly every occasion’ the [workers] encountered him,” including repeatedly insisting on “hugging them, elicit[ing] physical contact by impeding their paths or cornering and intimidating them, mak[ing] unwelcome sexual comments,” and sending sexually explicit photos of himself to at least two class members, among other misconduct. Id. at *4.

The Court’s Analysis

Recovery Innovations raised two arguments in its motion to dismiss. Its “chief argument” in support of dismissal was that the complaint failed to allege “severe and pervasive” harassment. Id. Recovery Innovations’ second argument was that the complaint “insufficiently describes” the group of allegedly injured workers, as it did not provide sufficient notice of “when the harassment occurred or precisely what unwelcome conduct each [worker] suffered.” Id. Judge Boyle rejected both of these arguments and denied Recovery Innovations’ partial motion to dismiss the Title VII pattern or practice claims.

First, as to Defendant’s “severe and pervasive” argument, Judge Boyle held that the alleged conduct was “sufficiently severe or pervasive to alter the class members’ conditions of employment” because “‘a supervisor’s power and authority invests his or her harassing conduct with a particularly threatening character.’” Id. at *4, 5 (quoting Boyer-Liberto v. Fontainebleau Corp., 786 F.3d 264, 278 (4th Cir. 2015)).

Second, as to Defendant’s argument that the complaint insufficiently describes the group of alleged victims, Judge Boyle found that “[a]n EEOC complaint brought on behalf of a [group of victims] is not . . . ‘deficient for failing to identify the numerous alleged victims of discrimination.’” Id. at *5 (quoting EEOC v. PBM Graphics Inc., 877 F. Supp. 2d 334, 347 (M.D.N.C. 2012)). In addition, because the complaint alleged that the alleged victims reported the supervisor’s conduct to the facility’s program supervisor, Recovery Innovations received “fair notice” of the “time frame and scope” of the workers at issue. Id.

Having found that the complaint adequately pled “severe or pervasive” harassment and sufficiently described the group of aggrieved female employees, Judge Boyle denied Recovery Innovations’ partial motion to dismiss. Id.

Implications For Employers

Recovery Innovations shines light on the “severe or pervasive” standard under Title VII when applied to a supervisor’s alleged conduct, as well as the pleading leniency surrounding claims that encompass alleged victims of discrimination. Corporate counsel should implement and update training for managerial employees regarding sexual misconduct to make every effort to avoid Title VII pattern or practice claims.

May 27, 2026May 27, 2026 by Gerald L. Maatman, Jr.

Pennsylvania Federal Court Delivers Misjoinder Blow To FedEx Drivers’ Wage And Hour Mass Actions

By Gerald L. Maatman, Jr., Elisabeth Bassani, and Olga A. Romadin

Duane Morris Takeaways: On May 18, 2026, Judge Robert J. Colville of the U.S. District Court for the Western District of Pennsylvania issued an order severing claims of over 14,000 plaintiffs who had alleged violations of the Fair Labor Standards Act (“FLSA”) and state laws in Brannon, et al. v. Federal Express Corp., No. CV 2:24-1128, 2026 WL 1382330 (W.D. Pa. May 18, 2026), Abner, et al. v. Federal Express Corp., No. 2:25-1129, 2026 WL 1382330 (W.D. Pa. May 18, 2026), and Smith, et al. v. Federal Express Corp., No. 2:25-1507, 2026 WL 1382330 (W.D. Pa. May 18, 2026). Following an order to show cause, plaintiffs in each of the three matters filed motions to sever and to transfer venue, which the Court granted, tolling the statute of limitations to permit individual plaintiffs to file individual claims.

Case Background

Three mass actions were filed following voluntary decertification and dismissal by plaintiffs in Claiborne, et al. v. FedEx Ground Package Systems, Inc., No. 2:18-CV-1698 (W.D. Pa.), a conditionally certified class and collective action consisting of over 30,000 opt-ins alleging FLSA overtime violations which had been pending in the Western District of Pennsylvania for almost seven years. Id. at *1. The Court subsequently granted a Motion on Misjoinder, Change of Venue, and Separate Trials, and severed the claims of all plaintiffs in Claiborne, and a related matter entitled Atwood, et al. v. FedEx Ground Package Systems, Inc., No. 2:24-CV-1127 (W.D. Pa.). Id. The Court also issued a Memorandum Order in which it opined that Brannon and Abner were also likely mis-joined, and ordered the plaintiffs in those matters to show cause. Id. In response, the plaintiffs motioned to sever and transfer their claims to appropriate forums, as the court had granted in Claiborne and Atwood, which FedEx opposed. Id.

The Court’s Decision

The Court, including the Smith matter in its opinion due to all three matters being represented by the same law firm, granted the plaintiffs’ motion to sever, and tolled the statute of limitations at 60 days, though it declined to transfer the claims of the thousands of individual plaintiffs to appropriate forums as requested because it determined that doing so would be overly burdensome for the Court and the Clerk’s Office. Id. at *3.

Noting the wide disparity in the numbers of putative plaintiffs in Claiborne and Atwood, which had twelve and two, respectively,and the hundreds and thousands of named plaintiffs in the three matters at issue here, the Court warned that the mass actions had the appearance of “a tactical maneuver around the standard or collective action procedures,” which the plaintiffs were unable to maintain, and the Court found to be improper. Id. at *2.

The Court found, as it had in its prior orders, that the plaintiffs here were mis-joined under Federal Rule of Civil Procedure 20. Id. at *3. Noting that the U.S. District Court for the District of Massachusetts echoed its conclusions on mis-joinder in related cases before it, the Court wrote that its prior conclusions regarding impracticality of litigating the claims in Claiborne and Atwood were equally applicable here in that holding a trial for 14,296 individual plaintiffs with individual issues predominating was “patently untenable.” Id. Further, the Court found that the claims did not arise out of the same transaction, occurrence, or series of transactions or occurrences, as required for joinder under Rule 20, and thus elected to sever the claims. Id.

Finally, the Court determined that the plaintiffs’ severed claims would be continuations of their current cases, and therefore permitted an extension of the tolling period to allow them 60 days to file individual actions in appropriate forums, but cautioned that any further efforts to bring additional mass claims would be “at their own peril.” Id. at *4.

Implications For Employers

For employers with a workforce that may fall under the FLSA, this decision offers practical insight into maintaining a compliant overtime program.

The Court’s decision additionally highlights the proliferation of creative procedural tactics, such as mass actions, undertaken by plaintiffs’ attorneys as a strategic loophole when class and collective actions are otherwise unsuccessful.

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

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

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

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

The Conference

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

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

The State Of The Industry

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

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

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

Panels On Class Actions And Related Issues

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

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

Premier Class Action Lawyers Of Tommorow Award Ceremony

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

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

May 19, 2026May 19, 2026 by Gerald L. Maatman, Jr.

California Supreme Court Rules That A Smash-And-Grab Hardware Theft, With No Access To Sensitive Records, Does Not Automatically Result In Multi-Million Or Billion Dollar Liability Under California Privacy Laws

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

Duane Morris Takeaways: On May 14, 2026, in J.M. v. Illuminate Education, Inc., No. S286699, 2026 Cal. LEXIS 2657 (May 14, 2026), the California Supreme Court held that the California Court of Appeal decision to deny a demurrer was improper for an incorrect application of privacy laws. This decision emphasizes why defendants should confirm whether a plaintiff sufficiently pled a cause of action that aligns with the remedies that he or she seeks to recover. Further, the opinion clarifies that injury under the Confidentiality of Medical Information Act, Cal. Civ. Code § 56, et seq. (“CMIA”) depends on whether the company subjects medical information to a substantial risk of unauthorized use or access, not whether the unauthorized user actually views sensitive data.

Case Background

Illuminate Education, Inc. (“Illuminate”) is a technology company that helps educators determine the academic progression of an individual student, as well as their areas of potential improvement. The company uses data from individual students, including medical data, to make these determinations. Illuminate provided its services to the Ventura County Office of Education, under which Plaintiff (a minor) was a student. Plaintiff provided his medical information to the Ventura County Office of Education, which then provided Plaintiff’s health data to Illuminate.

In 2022, Illuminate became aware of suspicious activity related to its systems. Illuminate promptly initiated an investigation. The investigation confirmed an unauthorized user gained access to Illuminate’s records, including students’ medical information. Illuminate sent a notice to the guardians of the affected students, including Plaintiff, informing them of the scope of the potential disclosure. The notice made it clear that Illuminate found no evidence that the unauthorized user (or users) was successful in actual or attempted misuse of the data.

After the breach, Plaintiff alleges that he received several mail solicitations at an address provided to only the Ventura County Office of Education. As a result, Plaintiff filed a class action lawsuit alleging that Illuminate, as health care provider, negligently managed the students’ medical records under the CMIA and failed to expediently disclose the data breach to those affected under the Customer Records Act, Cal. Civ. Code § 1798.80, et seq. (“CRA”).

The trial court sustained Illuminate’s demurrer, without leave to amend, after Plaintiff twice failed to cure deficiencies in his pleadings. The Court of Appeal reversed that decision, holding that the trial court abused its discretion by sustaining the demurrer, because Plaintiff may have been able to cure the defects in his complaint if a different legal analysis was applied.

Following that decision, the California Supreme Court set out to resolve the disagreement.

The California Supreme Court’s Decision

The California Supreme Court’s analysis hinges on its statutory interpretation, involving the plain reading of the statutes and their legislative histories. Generally, this analysis fell into three distinct categories.

First, Justice Goodwin Liu, writing for the California Supreme Court, reasoned that Plaintiff failed to establish a valid claim under CMIA because he could not allege that Illuminate was a “provider of health care” under California Civil Code section 56.06. Relying on the text of section 56.06, the Supreme Court explained there are two ways for a business to qualify as a “provider of health care”: (1) a covered business maintains medical records to make the information available to either an individual or a health care provider upon request of the individual or provider; or (2) a covered business makes medical information available for an individual or a health care provider upon request to allow an individual to manage their information, or to help diagnose or treat the individual.

The Supreme Court also confirmed this interpretation by relying on the legislative history of the statutes. The Supreme Court observed that the legislative history confirmed that the legislature was concerned with situations where diabetics used a data platform to record glucose levels, or where people with hypertension used platforms to track their blood pressure. Relying on the legislative history, the Supreme Court observed that Plaintiff never alleged that Illuminate created a repository of student records that allowed the students to create their own records, or to access and share those records at their discretion. Instead, Plaintiff asserted that Illuminate stored medical information to help educators monitor, evaluate, and address student needs. As a result, Illuminate was not a “provider of health care,” because it did not make medical records available upon request of the individual or provider.

The Supreme Court also quickly addressed Plaintiff’s inability to satisfy the alternative method for determining whether Illuminate is a “provider of health care” because Plaintiff never alleged that Illuminate “provides medical information to health care providers or individuals for diagnosis and treatment of an individual.” Illuminate Education, 2026 Cal. LEXIS 2657, at *12. As a result, and after quickly dispensing with a few other arguments, the Supreme Court concluded that Illuminate was not a “provider of health care” under the CMIA.

Second, in addition to analyzing whether Illuminate was a “provider of health care,” the Supreme Court also determined whether Plaintiff had alleged sufficient injury to state a claim under the CMIA. The Supreme Court disagreed with Illuminate’s argument that injury requires an unauthorized person to view medical data, and ruled that a plaintiff alleges injury by claiming that the medical information was exposed to “a significant risk of unauthorized access or use.” Id. at *29.

The CMIA requires covered entities to “preserve[] the confidentiality” of medical information. Cal. Civ. Code § 56.101(a). The Supreme Court stated that “confidentiality” requires “keeping information private or secret” and clarified that this obligation applies regardless of whether an unauthorized party actually views the data. Illuminate Education, 2026 Cal. LEXIS 2657, at *26. (“[W]e reject the rule that no breach of confidentiality has occurred until medical information is actually viewed by an unauthorized person.”). Instead, the determination of whether a covered entity failed to preserve the confidentiality of data depends on a factor-based analysis that considers the “form, duration, and extent of the data breach, as well as any mitigation efforts by the covered entity.” Id. at *30. Thus, a plaintiff need not allege that his or her data was “actually viewed” by a third party, because that person is “unlikely to know what an unauthorized party has done with their data unless they suffer actual damage” and instead “[a]ll relevant circumstances must be considered” when determining whether confidentiality was breached. Id.

Third, for the CRA claim, the Supreme Court ruled that Plaintiff did not state a cause of action against Illuminate because Plaintiff was not a customer within the meaning of the statute. To bring suit under the CRA, a plaintiff must establish that he or she is a “customer” within the meaning of the statute. Boorstein v. CBS Interactive, Inc., 222 Cal. App. 4th 456, 467 (2013). A customer is “an individual who provides personal information to a business for the purpose of purchasing or leasing a product or obtaining a service from the business.” Cal. Civ. Code § 1798.80(c). Here, the Supreme Court found that Plaintiff never alleged that he provided any personal information to Illuminate to purchase or lease a product, or obtain a service from Illuminate. The Supreme Court observed that the Ventura County Office of Education purchased Illuminate’s services and provided the student information, not Plaintiff. Moreover, the Supreme Court disregarded Plaintiff’s argument that he was the “ultimate” customer of Illuminate because the CRA “does not authorize suit by all consumers or beneficiaries; it authorizes a civil action for an injured ’customer.’” Id. at *32.

In the end, the Supreme Court reversed the judgment of the Court of Appeal and remanded the matter for further proceedings.

Implications For Companies

This decision emphasizes the importance of ensuring that a plaintiff has sufficiently pled all causes of action asserted. When the CMIA or CRA are involved, companies must consider whether they are, in fact, a covered entity in order to determine whether they are subject to the statutes’ reach.

Further, to assert injury under the CMIA for a data breach claim, the analysis hinges on the risk of unauthorized use, not what an unauthorized user is able to do with the data. Thus, it is imperative that companies take all reasonable steps to retain the confidentiality of sensitive records, making an extra effort to ensure that hardware is secure.

For CRA claims, companies need to pay special attention to which entities solicit or contract for their services as attention to these details can potentially thwart a potential CRA claim.

In short, organizations that use such medical data, and operate in California, should take note of this decision because it impacts their defenses both positively and negatively going forward.