Duane Morris Takeaways:Register today and join us Thursday, January 30, 2025, at a Duane Morris Exclusive Event – our Book Launch for the Duane Morris Class Action Review – 2025! This event will be offered as an in-person panel discussion and a Zoom webinar.
The DMCAR e-book is an essential desk reference that can be viewed on any device and is fully searchable with selectable text. The 2025 Review analyzes 1,441 class action rulings from state and federal courts in 23 areas of law, providing a comprehensive review of the class action landscape. Details on the 10 key trends identified this year and a copy of the Executive Summary are featured on the DMCAR website here.
You are invited to join Duane Morris Partners Gerald L. Maatman, Jr. and Jennifer Riley for a panel discussion marking the release of the Duane Morris Class Action Review – 2025. Please register here to reserve your spot today! The event will be offered as an in-person discussion or join us live via Zoom webinar.
Featuring authors Gerald L. Maatman, Jr., Jennifer A. Riley and American Lawyer Media staff reporter Amanda Bronstad in a discussion of the key class action developments and decisions in 2024 and what companies can expect in 2025. We hope to see you there!
In-Person Event Location: Convene CityView Duane Morris Plaza | 13th Floor 30 South 17th Street, Philadelphia, PA 1910
Registration: 3:30 p.m. to 4:00 p.m. Eastern Book Launch and Discussion: 4:00 p.m. to 5:00 p.m. Eastern Cocktail Reception: 5:00 p.m. to 6:00 p.m. Eastern
Duane Morris Takeaways: As we kick off 2025, we are pleased to announce the publication of the third annual edition of the Duane Morris Class Action Review. It is a one-of-its-kind publication analyzing class action trends, decisions, and settlements in all areas impacting corporations, including class certification rulings in the substantive areas of antitrust, appeals, the Class Action Fairness Act, civil rights, consumer fraud, data breaches, discrimination, EEOC-initiated and government enforcement litigation, the Employee Retirement Income Security Act of 1974, the Fair Credit Reporting Act, labor, privacy, procedural issues, product liability and mass torts, the Racketeer Influenced and Corrupt Organizations Act, securities fraud, state court class actions, the Telephone Consumer Protection Act, wage & hour class and collective actions, and the Worker Adjustment and Retraining Notification Act. The Review also highlights key rulings on attorneys’ fee awards in class actions, motions granting and denying sanctions in class actions, the largest class action settlements across all areas of law, and primers on both the Illinois Biometric Information Privacy Act and the California Private Attorney General Act. Finally, the Review provides insight as to what companies and corporate counsel can expect to see in 2025.
We are humbled and honored by the recent review of the Duane Morris Class Action Review by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said, “The Duane Morris Class Action Review is ‘the Bible’ on class action litigation and an essential desk reference for business executives, corporate counsel, and human resources professionals.” EPLiC continued, “The review is a must-have resource for in-depth analysis of class actions in general and workplace litigation in particular. The Duane Morris Class Action Review analyzes class action trends, decisions, and settlements in all areas impacting corporate America and provides insight as to what companies and corporate counsel can expect in terms of filings by the plaintiffs’ class action bar and government enforcement agencies like the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL).”
We are equally proud that the Review made its way into American jurisprudence over the past year, with a federal district court citing our analysis on class action trends in its decision on a motion for class certification.
Click here to access our customized website featuring all the Review highlights, including the ten major trends across all types of class actions over the past year. Order your free copy of the e-book here, and download the Review overview here.
Check out an exclusive article featuring the Review posted this morning in Forbes here. The Firm’s press release on the Review can be found here.
The 2025 Review analyzes rulings from all state and federal courts in 23 areas of law. It is designed as a reader-friendly research tool that is easily accessible in hard copy and e-book formats. Class action rulings from throughout the year are analyzed and organized into 23 chapters and 7 appendices for ease of analysis and reference.
Executive Summary Of Key Class Action Trends Over The Past Year
Class action litigation presents one of the most significant risks to corporate defendants today. Procedural mechanisms like the one set forth in Rule 23 of the Federal Rules of Civil Procedure have the potential to expand a claim asserted on behalf of a single person into a claim asserted on behalf of a behemoth that includes every employee, customer, or user of a particular company, product, or service, over an extended period. Class actions allow plaintiffs to pursue claims on behalf of a defined and sometimes sprawling group of unnamed individuals. By aggregating the claims of many persons in a single lawsuit, plaintiffs can seek to increase the size of their cases exponentially in terms of the number of claims they assert and the damages they seek. As a result, class actions can present substantial implications for corporate defendants.
As plaintiffs increase the size of their cases, the resulting legal risks can grow, bringing increased leverage for plaintiffs. A negative ruling in a class action has the potential to reshape a defendant’s business model, to impose significant financial consequences, and to shape standards for the entire industry. The outcome of a class action lawsuit, therefore, can be significant and potentially devastating for a company. Due to their potential implications, class actions are often costly to defend. Defending a class action can be a time-consuming and resource-intensive process that diverts management attention from core business activities. Plaintiffs can attempt to leverage this reality to make class actions as expensive and disruptive as possible, in an effort to bring about litigation fatigue and to extract sizable settlements from corporations.
Class actions are sometimes even more perilous to settle. Given the potential size and cost, class action settlements can attract media attention and lead to public scrutiny. Lucrative settlements can prompt copy-cat lawsuits and lead to more claims. Negative publicity can have widespread implications, including potential harm to a company’s reputation, potential damage to its brand, and potential drop in consumer trust. Class actions are complex legal proceedings with uncertain outcomes. The complexity can arise from managing multiple claims, myriad legal issues, and assorted class members, making it challenging for corporate defendants to predict and control the result. Due to these factors, corporate defendants should approach class actions from a broad vantage point with a thoughtful and multi-faceted defense strategy.
We developed a one-of-a-kind resource to provide a practical desk reference for corporate counsel faced with defending class action litigation. We have organized this year’s book into 23 chapters, with seven appendices, each of which provides an analysis of the trends in a particular area of class action litigation, along with the key decisions from courts across the country that companies can use to shape their defense strategies.
We identified ten key trends that characterized 2024. These trends include: (i) the continued prevalence of massive class action settlements; (ii) the normalization of plaintiff-friendly class certification conversion rates across substantive areas of class action litigation; (iii) the expansion of privacy class action litigation; (iv) continued efforts to chip away at and counter the impact of the arbitration defense as a barrier to class action litigation; (v) a surge of challenges to diversity, equity, and inclusion (DEI) programs that are likely to fuel class claims; (vi) decisions by the U.S. Supreme Court laying the groundwork for rebooted litigation theories and defenses; (vii) continued growth of data breach class actions; (viii) attention-getting headlines regarding PFAS litigation, which generated the largest class settlement and attorneys’ fee award of 2024; (ix) filing activity in California on the PAGA front demonstrating its continued popularity among the plaintiffs’ class action bar; and (x) a decreased role for government enforcement activity.
Trend # 1 – Settlement Numbers Break $40 Billion For The Third Year In A Row
In 2024, settlement numbers broke the $40 billion mark for the third year in a row. The cumulative value of the highest ten settlements across all substantive areas of class action litigation totaled $42 billion. That number is the third highest value we have tallied in the last two decades, trailing only the settlement numbers from 2023 and 2022. In 2023 settlements totaled $51.4 billion, and in 2022, settlements totaled $66 billion. Combined, the past three years of $159.4 billion reflect use of the class action mechanism to redistribute wealth at an unprecedented level.
Trend #2 – Class Certification Numbers Normalize Across Substantive Areas
Although courts issued fewer decisions on motions for class certification in 2024 as compared to 2023, the plaintiffs’ class action bar obtained certification at a more consistent rate across all substantive areas, suggesting that plaintiffs are being more selective in their investments and the cases they pursue through class certification. In 2024, courts issued rulings on 432 motions for class certification, a decrease from 2023, when courts issued rulings on 451 motions for class certification. Of those, courts granted motions for class certification at a lower rate. Courts granted 272 of those motions, for a certification rate of approximately 63%. In 2023, by contrast, courts granted 324 motions for class certification, for a certification rate of approximately 72%.
Trend #3 – Privacy Class Actions Continue To Proliferate As Plaintiffs Search For Winning Theories
The plaintiffs’ class action bar has continued to invest in the privacy class action space and, over the past year, has generated a multitude of filings, making privacy one of the hottest areas of growth in terms of activity by the plaintiffs’ class action bar. As technology continues to infiltrate our everyday lives, it provides ongoing inspiration for novel claims. Two of the most active areas of privacy litigation over the past year include: (1) litigation regarding “biometric” technologies under the Illinois Biometric Privacy Act (BIPA); and (2) claims regarding website advertising technologies (adtech) asserted under a variety of federal and state statutory and common laws.
Trend #4 – Plaintiffs Continue To Chip Away At The Arbitration Defense
Despite another tumultuous year of rulings, the arbitration defense remained one of the most powerful weapons in the class action defense toolkit. A defendant’s ability to enforce an arbitration agreement containing a class or collective action waiver continues to reign as one of the most impactful defenses in terms of shifting the pendulum of class action litigation. The U.S. Supreme Court cleared the last hurdle to widespread adoption of such agreements with its decision in Epic Systems Corp. v. Lewis, et al., 138 S. Ct. 1612 (2018). In response, more companies of all types and sizes updated their onboarding systems, terms of use, and other types of agreements to require that employees and consumers resolve any disputes in arbitration on an individual basis. In 2024, the defense won 91 of 167 motions to compel arbitration, for a success rate of 54%. By way of comparison, in 2023 the defense won 126 of 190 motions to compel arbitration, for a success rate of 66%.
Trend #5 – Plaintiffs Target DEI and ESG Initiatives Prompting Roll Back
The U.S. Supreme Court’s 2023 decision in Students for Fair Admissions, Inc. (SFFA), et al. v. President & Fellows of Harvard College, 600 U.S. 181 (2023), stimulated a flood of claims targeting diversity equity and inclusion (DEI) programs over the past year. Headlines were replete with cases of employees and applicants accusing employers of prioritizing diversity over merit and improperly using protected characteristics to guide decision-making, setting the stage for more class action activity in this area.
Trend #6 – The Supreme Court Lays The Groundwork For Rebooted Litigation Theories
As the ultimate referee of law, the U.S. Supreme Court traditionally has defined the playing field for class action litigation and, through its rulings, has impacted the class action landscape. The past year was no exception. Although the U.S. Supreme Court did not directly address the procedural mechanisms that govern class actions during its most recent term, it issued multiple decisions that are sure to influence the class action space.
Trend #7 – Data Breaches Gives Rise To An Unprecedented Number Of Class Action Filings
Data breach litigation remained expansive in 2024 as plaintiffs filed more data breach class actions than in any other year and double the number filed in 2022. As the number of data breaches has accelerated, such events have provided the fuel for a surge of class actions. Despite the significant increase in filings, courts issued few (only five) class certification decisions in 2024, suggesting that many motions are in the pipeline or that, observing the difficulty that plaintiffs have faced in certifying such cases over the past two years, plaintiffs are electing to monetize their data breach claims prior to reaching that crucial juncture. So long as defendants continue to play ball on the settlement front, we are likely to see settlement payouts continue to lure plaintiffs to this space and fuel those filing numbers.
Trend #8 – PFAS Inspires Forever Litigation
PFAS class actions inspired some of the most attention-grabbing headlines this past year across the legal landscape. PFAS, or per- and polyfluoroalkyl substances, are a group of manmade chemicals that are resistant to oil, water, and heat. They are used in many consumer and industrial products and are commonly called “forever chemicals” because of their persistence, meaning they do not break down easily in the environment. PFAS generated the largest class action settlement in 2024, which came in at more than twice the next highest settlement, which also involved PFAS, and generated an attorneys’ fee award of nearly one billion dollars. These numbers are going to inspire a continued wave of PFAS class actions, as the plaintiffs’ class action bar targets more companies with claims that their products or packaging contained PFAS, and those companies, in turn, search for claims against their material suppliers.
Trend #9 – California Remains Ground Zero For PAGA Representative Actions
The California Private Attorneys General Act (PAGA) inspired more representative lawsuits than any other statute in America over the past year. According to the California Department of Industrial Relations, plaintiffs filed more than 9,464 PAGA notices in 2024, a nearly 22% increase over 2023, and a whopping 85,936% increase over the 11 PAGA notices filed in 2006. The so-called PAGA reform legislation passed in 2024 by California lawmakers seemingly did little to nothing to curb interest in these cases, which continue to present one of the most viable workarounds to workplace arbitration agreements.
Trend #10 – The Change At The White House Signals A Decreased Role For Government Enforcement Litigation
Government enforcement litigation is similar in many respects to class action litigation. In lawsuits brought by the U.S. Equal Employment Opportunity Commission (EEOC), as well as the U.S. Department of Labor (DOL), government enforcement claims typically involve significant monetary exposure, numerous claimants, and complex procedures. These types of lawsuits most often pose reputational risks to companies. As the White House shifts from blue back to red, the incoming Trump Administration has promised less government oversight of business and less regulation, thereby signaling less government enforcement litigation. Change, therefore, is inevitable.
Conclusion
Class action litigation is a staple of the American judicial system. The volume of class action filings has increased each year for the past decade, and 2025 is likely to follow that trend. In this environment, programs designed to ensure compliance with existing laws and strategies to mitigate class action litigation risks are corporate imperatives.
The plaintiffs’ bar is nothing if not innovative and resourceful. Given the massive class action settlement figures from 2022 through 2024 (a combined total of $159.4 billion), coupled with the ever-developing law, corporations can expect more lawsuits, expansive class theories, and an equally if not more aggressive plaintiffs’ bar in 2025. These conditions necessitate planning, preparation, and decision-making to position corporations to withstand and defend class action exposures.
Duane Morris Takeaways: Our Class Action Review publication launch is just around the corner – Tuesday, January 7, 2025.
The 2025 Review builds on the success of our previous editions and represents our twentieth annual study of the class action space. At over 650 pages, the 2025 Review has more analysis than ever before, with discussion of over 1,440 class certification rulings from federal and state courts over this past year. The Review will be available for download as an E-Book too.
The Review is a one-of-its-kind publication analyzing class action trends, decisions, and settlements in all areas impacting Corporate America, including the substantive areas of antitrust, appeals, the Class Action Fairness Act, civil rights, consumer fraud, data breach, EEOC-Initiated and government enforcement litigation, employment discrimination, the Employee Retirement Income Security Act of 1974, the Fair Credit Reporting Act, labor, privacy, procedural issues, product liability and mass torts, the Racketeer Influenced and Corrupt Organizations Act, securities fraud, state court class actions, the Telephone Consumer Protection Act, wage & hour class and collective actions, and the Worker Adjustment and Retraining Notification Act. The Review also highlights key rulings on attorneys’ fee awards in class actions, motions granting and denying sanctions in class actions, and the top-class action settlements in each area. Finally, the Review provides insight as to what companies and corporate counsel can expect to see in 2025.
We are humbled and honored by the recent review of the Duane Morris Class Action Review – 2024 by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said, “The Duane Morris Class Action Review is ‘the Bible’ on class action litigation and an essential desk reference for business executives, corporate counsel, and human resources professionals.” EPLiC continued, “The review is a must-have resource for in-depth analysis of class actions in general and workplace litigation in particular. The Duane Morris Class Action Review analyzes class action trends, decisions, and settlements in all areas impacting corporate America and provides insight as to what companies and corporate counsel can expect in terms of filings by the plaintiffs’ class action bar and government enforcement agencies like the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL).”
We look forward to providing the 2025 edition of the Review to all our loyal readers on January 7. Stay tuned and Happy Holidays!
By Gerald L. Maatman, Jr., Jennifer A. Riley, and Gregory Tsonis
Duane Morris Takeaways: On December 17, 2024, in a critical ruling in Stafford, et al. v. Bojangles’ Restaurants, Inc., No. 23-2287 (4th Cir. Dec. 17, 2024), the Fourth Circuit vacated the district court’s certification of a class action involving allegations of unpaid off-the-clock work and unauthorized edits to employee time records at Bojangles Restaurants. The Fourth Circuit determined that the district court erred in its application of Rule 23’s commonality and predominance requirements, relying on overly broad class definitions and vague assertions of company-wide policies. The decision underscores the importance of specificity in class certification arguments and highlights the successful opposition to class certification when plaintiffs rely upon generalized allegations and purportedly common policies in wage-and-hour litigation.
Case Background
Bojangles’ Restaurants, Inc. operates over 300 fast-food locations across eight states. The company employs a three-tier management structure with shift managers, assistant general managers, and general managers. Shift managers, the lowest tier, are responsible for a variety of operational duties, including pre-opening and post-closing tasks. Bojangles maintains internal policies prohibiting off-the-clock work and requiring employees to clock in and out to ensure accurate tracking of hours and overtime pay.
The lawsuit arose from allegations that Bojangles violated its policies by requiring shift managers to perform off-the-clock work and, at times, by systematically editing time records to reduce overtime payments. The Named Plaintiff Richard Stafford, a former hourly-paid shift manager, alleged that he was frequently required to work off the clock, perform unpaid tasks such as cleaning, making bank deposits, and traveling between locations, and was subject to unauthorized time-shaving.
The lawsuit was originally filed as an FLSA collective action and, in 2020, the district court conditionally certified a collective action for Stafford’s FLSA claims that attracted nearly 550 opt-in plaintiffs. Stafford later amended the complaint to assert state law class claims under various state wage and hour laws, and subsequently sought Rule 23 class certification for state law claims in North Carolina, South Carolina, Alabama, Georgia, Kentucky, Tennessee, and Virginia. While five of the state law classes failed to meet Rule 23’s adequacy prong, the district court certified classes for North Carolina and South Carolina shift managers, citing the Bojangles Opening Checklist, which allegedly mandated pre-shift tasks, as a common issue. The class definitions broadly included all shift managers employed within three years of the complaint’s filing since the district court found that at least 80% of shift managers would have worked an opening shift at some point.
Bojangles appealed, arguing that the district court’s class certification was overly broad and lacked the specificity required under Rule 23.
The Fourth Circuit’s Decision
The Fourth Circuit found that the district court relied excessively on generalized claims of Bojangles’ policies without providing specific evidence of commonality among the class members. While the Opening Checklist provided some basis for commonality regarding pre-shift work, the district court failed to address whether other alleged activities, such as time-shaving and post-closing tasks, were similarly unified by a common policy. The Fourth Circuit emphasized that “[a]llegations of generalized policies are not usually sufficient for the purposes of class certification” and further noted that Rule 23 does not permit a “30,000-foot view of commonality.” Id. at 11. Instead, plaintiffs must demonstrate that common questions predominate over individualized issues, and they had not done so with respect to the type of alleged off-the-clock work and time shaving.
The Fourth Circuit also criticized the overly broad class definitions, which included all shift managers employed during a three-year period without specifying the types of claims or injuries alleged. Such vague definitions risked including individuals with no viable claims and failed to meet Rule 23’s requirements. The lack of specificity raised concerns about commonality, predominance, and typicality, according to the Fourth Circuit, because some plaintiffs may not even have off-the-clock or time shaving claims against Bojangles. It suggested that sub-classes might be appropriate to address distinct issues but left this determination to the district court on remand.
The decision concluded by emphasizing the importance of adhering to Rule 23’s prerequisites to ensure that class actions remain a viable and efficient mechanism for resolving disputes. Characterizing Rule 23 class actions as a “carefully crafted compromise,” the Fourth Circuit observed that its decision was meant to “ensure that the class-action train stays on the tracks.” Id. at 19. Without clear evidence of commonality and precise class definitions, the Fourth Circuit ultimately vacated and remanded the district court’s class certification decision.
Implications for Employers
This decision provides a helpful roadmap for employers facing wage-and-hour class action cases premised on an alleged common policy. As this case exemplifies, employers should focus on the lack of specificity in alleged policies to counter claims of commonality or predominance. Demonstrating variations in employee experiences, decision-making processes, or other individualized factors can effectively undermine arguments for class-wide treatment.
Thinking through such considerations is an absolute necessity, and one that begins with the planning of a strategic defense early in the litigation process. Documenting lawful policies and practices during discovery lays a foundation for opposing class certification. By emphasizing the need for clear evidence and precise definitions, this ruling underscores the challenges plaintiffs face in meeting Rule 23’s rigorous standards. Employers can use these standards to their advantage, ensuring that ill-defined and nebulous classes are not certified in the high-stakes litigation they often face.
Duane Morris Takeaway:This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Jennifer Riley with their discussion of a U.S. Supreme Court decision vacating a D.C. Circuit ruling in an NLRB dispute over an employer’s liability for withdrawing recognition from a union under the agency’s successor bar standard. This ruling marks a notable development in the wake of the high court’s Loper Bright Enterprises v. Raimando opinion overturning the Chevron doctrine.
Jerry Maatman: Thank you loyal blog readers and listeners for joining our next episode of the weekly podcast series, the Class Action Weekly Wire. I’m Jerry Maatman of Duane Morris, and joining me is Jen Riley, the vice chair of the Duane Morris Class Action Defense Group. Thanks for being on the podcast, Jen.
Jennifer Riley: Thanks so much, Jerry. Great to be here.
Jerry: Today we’ll be breaking down the Supreme Court’s acceptance of a case for review involving the National Labor Relations Board and Hospital Menonita de Guayama from Puerto Rico. The case is crucial, especially after the Supreme Court’s decision in the Loper Bright Enterprises v. Raimondo case, which reshapes how courts review agencies interpretations of the law. I think this is a fascinating case, and a great opportunity to talk about how the Supreme Court’s shift in its approach is going to affect labor law and employment relations. It’s an interplay between agency discretion, and judicial review. And it’s really at the heart of class action litigation. Jen, can you recap the main points of this case for our viewers and listeners?
Jennifer: Thanks, Jerry, absolutely. The case involves a dispute where a hospital in Puerto Rico withdrew recognition from a union; the National Labor Relations Board ruled that this violated the National Labor Relations Act, citing the successor bar doctrine. That doctrine prevents an employer from withdrawing recognition from a union for at least six months after taking over a bargaining unit. After the hospital filed suit, the D.C. Circuit upheld the NLRB’s decision, and eventually the Supreme Court granted review and agreed to hear the case.
Jerry: Thanks, Jen. The core issue here is whether the successor bar doctrine, which the NLRB has applied for year, is legally valid – especially in light of the Supreme Court’s recent decision in the Loper Bright case. The Supreme Court’s ruling overruled the longstanding Chevron doctrine which had instructed lower federal courts to defer to federal agencies when interpreting ambiguous parts of statutes. That ruling has profound implications for federal courts, which will now review decisions made by agencies like the NLRB in this particular case.
Jennifer: Exactly, Jerry. That is why the Hospital Menonita case is so important. The Chevron doctrine is rooted in the idea that in certain circumstances, agencies with expertise in certain areas are better positioned to interpret ambiguous statutes than courts. If the statute is ambiguous, the court must assess whether the agency’s interpretation of the statute is reasonable. The court will generally uphold the agency’s interpretation, if it is a reasonable interpretation of the ambiguous statute, even if the court itself might have interpreted the statute differently. Courts generally give significant deference to agencies’ expertise and experience in interpreting laws within their jurisdiction.
This is now up for scrutiny, of course, after Loper Bright. Essentially, the hospital argued that the court should independently review whether the NLRB’s interpretation of the law, particularly the successor bar doctrine, was correct under the National Labor Relations Act. The NLRB defended its position, claiming that the D.C. Circuit wasn’t relying solely on Chevron and upholding the decision. The NLRB argued that the circuit actually used pre-Chevron case law that recognized agency discretion in interpreting the National Labor Relations Act. However, the hospital countered that under Loper Bright, any deference to the NLRB’s interpretation would need to be reconsidered.
Jerry: Interesting. I think this is somewhat of a blueprint or a test case for how employers or corporations sued, based on interpretations of agency regulations, can turn the table, so to speak, and argue that federal district court judges should interpret the laws as enacted, and not based on somewhat liberal interpretations of those laws by agencies. That’s exactly what the hospital, as I understand it, argued in terms of the Loper Bright decision requires the court to critically assess an agency’s interpretation, and not simply defer carte blanche to them. In the past, courts would have applied Chevron, and given the agency a wide berth in terms of all benefits, or the jump ball, going to the agency in terms of its interpretation. But now, with Loper Bright we have a new playing field, and the Supreme Court has signaled that agency interpretations will be scrutinized, particularly when the statute in question is ambiguous.
Jennifer: Exactly. The Supreme Court ultimately vacated the D.C. Circuit’s ruling and remanded the case here, sending it back to the D.C. Circuit for reconsideration in light of Loper Bright.
Jerry: It’s interesting, insofar as now the argument is ‘this is the essential reading of the statute, and how the court should interpret it, and the agency’s interpretation is just one data point.’ And now defendants have significant precedent to say agencies’ interpretations have been rejected and basically maybe not even a data point, but shouldn’t even be considered. So, the balance of power has shifted and the litmus test, so to speak, or the playing field on which defendants are operating has completely shifted, based on the Supreme Court’s decision.
Jennifer: Great point, Jerry. The successor bar doctrine itself is already controversial. Some people argue that it’s necessary to protect workers’ rights during employer transitions, while others think it goes too far in restricting employers’ ability to challenge unions.
Jerry: Well, now the case is back with the District of Columbia Court of Appeals, the D.C. Circuit, and it’s that time of the year when people make New Year’s resolutions and predict what’s going to happen in 2025. What is the Jen Riley prognostication as to the ultimate outcome of this particular case?
Jennifer: Well, this one is hard to say. The D.C. Circuit will have to reconsider its ruling with the Loper Bright framework in mind, which means it will have to engage in a more detailed analysis of whether the NLRB’s interpretation of the law is the best reading of the National Labor Relations Act. If the court decides that the successor bar doctrine doesn’t align with the statute, we could see a major shift in labor law, particularly in how unions and employers navigate these types of transitions.
Jerry: Well, that’s a very succinct summary of the significant implications of this case. Stay tuned, readers and listeners. 2025 – put on your seatbelts. This is going to be a heck of a ruling. Well, thank you so much, Jen, for your thought leadership and your contributions and giving us an inside baseball look at what’s going on in terms of the future interpretations of the Loper Bright doctrine, and how that will impact corporations and their defense of both labor and employment matters and class actions in general.
Jennifer: Thanks so much, Jerry. Thanks for having me, and happy holidays to all of our listeners!
Duane Morris Takeaways: On December 17, 2024, in Daghaly, et al. v. Bloomingdales.com, LLC, No. 23-4122, 2024 WL 5134350 (9th Cir. Dec. 17, 2024), the Ninth Circuit ruledthat a plaintiff lacked Article III standing to bring her class action complaint alleging that an online retailer’s use of website advertising technology disclosed website visitors’ browsing activities in violation of the California Invasion of Privacy Act and other statutes. The ruling is significant because it shows that adtech claims cannot be brought in federal court without specifying the plaintiffs’ web browsing activities allegedly disclosed.
Background
This case is one of the hundreds of class actions that plaintiffs have filed nationwide alleging that Meta Pixel, Google Analytics, and other similar software embedded in defendants’ websites secretly captured plaintiffs’ web browsing data and sent it to Meta, Google, and other online advertising agencies. This software, often called website advertising technologies or “adtech” is a common feature on many websites in operation today.
In Daghaly, Plaintiff brought suit against an online retailer. According to Plaintiff, the retailer installed the Meta Pixel and other adtech on its public-facing website and thereby transmitted web-browsing information entered by visitors such as which products the visitor clicked on and whether the visitor added the product to his or her shopping cart or wish list. Id., No. 23-CV-129, ECF No. 1 ¶¶ 44-45. As for Plaintiff herself, she did not allege what she clicked on or what her web browsing activities entailed upon visiting the website, only that she accessed the website via the web browser on her phone and computer. Id. ¶ 40.
Based on these allegations, Plaintiff alleged claims for violation of the California Invasion of Privacy Act (CIPA) and other statutes. The district court dismissed the complaint for lack of personal jurisdiction. Id., 697 F. Supp. 3d 996 (S.D. Cal. 2023). Plaintiff appealed and, in its appellate response brief, the retailer argued for the first time that Plaintiff lacked Article III standing.
The Ninth Circuit’s Opinion
The Ninth Circuit agreed with the retailer, found that Plaintiff lacked standing, and remanded for further proceedings.
To allege Article III standing, as is required to bring suit in federal court, the Ninth Circuit opined that a plaintiff must “clearly allege facts demonstrating” that she “suffered an injury in fact that is concrete, particularized, and actual or imminent.” Id., 2024 WL 5134350, at *2 (citing, e.g., TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021)).
Plaintiff argued that she sufficiently alleged standing via her allegations that she “visited” and “accessed” the website and was “subjected to the interception of her Website Communications.” Id. at *1. Moreover, Plaintiff argued, the retailer’s alleged disclosure to adtech companies of the fact of her visiting the retailer’s website sufficiently alleged an invasion of her privacy and thereby invoked Article III standing because the adtech companies could use this fact to stitch together a broader, composite picture of Plaintiffs’ online activities. See oral argument, here.
The Ninth Circuit rejected these arguments. It found that Plaintiff “does not allege that she herself actually made any communications that could have been intercepted once she had accessed the website. She does not assert, for example, that she made a purchase, entered text, or took any actions other than simply opening the webpage and then closing it.” Id., 2024 WL 5134350, at *1.As the Ninth Circuit explained during oral argument by way of example, it is not like the Plaintiff had alleged that she was shopping for underwear and that the retailer transmitted information about her underwear purchases. Moreover, the Ninth Circuit found “no authority suggesting that the fact that she visited [the retailer’s website] (as opposed to information she might have entered while using the website) constitutes ‘contents’ of a communication within the meaning of CIPA Section 631.” Id.
In short, the Ninth Circuit concluded that Plaintiff lacked Article III standing, and that this conclusion followed from Plaintiff’s failure to sufficiently allege the nature her web browsing activities giving rise to all of her statutory claims. Id. at *2. The Ninth Circuit remanded with instructions that the district court grant leave to amend if properly requested.
Implications For Companies
The holding of Daghaly is a win for adtech class action defendants and should be instructive for courts around the country. Other courts already have found that an adtech plaintiff’s failure to identify what allegedly private information allegedly was disclosed via the adtech warrants dismissal under Rule 12(b)(6) for failure to plausibly plead various statutory and common-law claims. See, e.g, our blog post about such a decision here. Daghaly shows that adtech plaintiffs also need to identify what allegedly private information beyond the fact of a visit to an online retailer’s website was allegedly disclosed via the adtech, in order to have Article III standing to bring their federal lawsuit in the first place.
Duane Morris Takeaway:This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Bernadette Coyle with their discussion of the 2024-2025 edition of the American Tort Reform Association’s (“ATRA”) “Judicial Hellholes” report, which details the 10 least favorable venues for corporate defendants across the country.
Jerry Maatman: Thank you, loyal blog readers and listeners for joining us for our weekly podcast series. My name is Jerry Maatman, and I’m a partner at Duane Morris, and joining me today is my colleague, Bernadette Coyle. Thanks so much for being on the podcast.
Bernadette Coyle: Thanks, Jerry. I’m very happy to be here.
Jerry: Today, our podcast covers one of my most favorite topics, and that is the annual report issued by the American Tort Reform Association, which goes by the acronym of ATRA, in terms of its annual report called the “Judicial Hellholes” report. It focuses on litigation issues and does a comparative study of litigation in all 50 states, and then ranks those states with respect to fairness or unfairness of the judicial system and bias, or lack of bias, in the administration of justice. So, it’s an important read for corporate counsel, those facing class action litigation, because it identifies what are suboptimal jurisdictions, what are challenging jurisdictions. And as a result, obviously in terms of our annual study of class action litigation, settlements, and rulings, many of the jurisdictions on that watch list happen to be epicenters for class action litigation. So, Bernadette, in this year’s report there were 10 specific jurisdictions listed as the top Judicial Hellholes, and I’m sure our loyal blog readers and listeners are anxious to hear – so what jurisdiction came out as on top of that infamous list of the worst jurisdictions in which to be sued in 2024?
Bernadette: This year, #1 was a defending champion from 2023; it was the Philadelphia Court of Common Pleas and the Pennsylvania Supreme Court ranked as the most challenging venue for defendants. And over the past few years, the courts there have been issuing nuclear verdicts. We’re talking about eye-popping nine figure damage awards that seem to be handed out with very little consideration for fairness. And additionally, a recent decision from the Pennsylvania Supreme Court has led to a flood of medical liability lawsuits by removing an important legal requirement for entry. In fact, I think they even allowed for duplicative damages in certain cases which only encourages more litigation. So, it’s definitely becoming a very plaintiff-friendly environment.
Jerry: So, kind of the watchwords are: it’s a petri dish or a hotbed for growing certain types of lawsuits. Moving on to #2, which I understand to be New York City. The report highlights it as one of the other really tough places to be sued. What’s your take on the ranking of New York City on the report?
Bernadette: Yeah, I think in New York City they noted a rise in fraudulent lawsuits, particularly with RICO lawsuits being filed against plaintiff firms and the city’s laws, including the Scaffold Law and the consumer protection act, are definitely ripe for abuse. And we’re seeing plaintiffs’ lawyers that are really cashing in on these opportunities, and it’s led to what the report is calling a “fraudemic.” It’s a growing problem in the city’s civil justice system, and unfortunately, leadership seems to be looking the other way.
Jerry: That’s certainly a very concerning trend for corporations that are sued in those jurisdictions. I know that #3 on the list is South Carolina in particular, its treatment of mass torts and the asbestos litigation. What are the problems identified there?
Bernadette: South Carolina’s asbestos judge has become infamous for being highly biased against corporate defendants. The judge often imposes unwarranted sanctions, modifies jury verdicts in favor of plaintiffs, and is becoming known for appointing a receiver to maximize insurance recoveries. All of that creates a legal environment where defendants don’t stand a fair chance, and plaintiffs are given an unfair advantage. This is really a textbook example of how judicial bias can distort the civil justice system.
Jerry: Sounds like that issue systemic to South Carolina in general, and mass tort litigation in particular. Moving on to #4, Georgia, where I litigate the defense of many class actions – what did the report have to say about the state of litigation in the Peach State?
Bernadette: Last year, Georgia was tied for #1 with Pennsylvania, and this year the report notes that Georgia is facing a rise in nuclear verdicts, huge excessive damage awards. And additionally, there’s a trend of inflated medical costs and laws that seem to set defendants up for failure. For example, Georgia still has an archaic seatbelt gag rule, meaning juries can’t even consider whether an occupant was wearing a seatbelt during a crash. It’s part of a broader trend in Georgia’s civil justice system that seems to favor plaintiffs and puts defendants at a severe disadvantage.
Jerry: Thanks. Well, next up is California, and I think that for the 42 years I’ve been a lawyer and dealing with corporate counsel, that seems to be the biggest litigation headache that they face in terms of doing business and getting sued in the state of California. What’s driving the inclusion of California this year in the Judicial Hellholes report?
Bernadette: California continues to be a major destination for plaintiffs’ lawyers looking to expand liability. The state’s legal landscape is very favorable for certain types of lawsuits. I mean, first off, California has the highest number of nuclear verdicts in the nation, and then you’ve got cases like Lemon Law claims and no injury lawsuits under the Private Attorneys General Act and the Americans with Disabilities Act. These are bogging down businesses and creating endless litigation that’s both costly and inefficient.
Jerry: What about Cook County, Illinois, where I was born and raised and sitting today? That deserves special mention this year – what was your take on Cook County’s inclusion?
Bernadette: Yes, Cook County is obviously very near and dear to us, and it’s also become infamous for its disproportionate share of lawsuits, especially no injury litigation and asbestos cases. One of the biggest issues here, though, is the Biometric Information Privacy Act, which has been abused to the point where lawsuits are filed over the very smallest technicalities.
Jerry: Well, those are the major geographic tours of the Hellholes. What about a brief overview of the remainder of the top 10 list?
Bernadette: Absolutely. Next is St. Louis, Missouri, which is also a hotbed for asbestos lawsuits, and for plaintiff-friendly rulings; the Michigan Supreme Court, which seems to allow reliance on junk science; followed by King County, Washington, which made it onto the list for the first time because of judges’ tendency to allow unfair group trials and junk science into court; and finally, Louisiana, with its nuclear verdicts that distort the fairness of its civil justice system.
Jerry: Well, that’s quite a tour of judicial highlights. The ATRA report, though, also has positive developments. What were some of those in terms of the legal landscape in 2024?
Bernadette: Yes, there are bright spots. For example, several states have strengthened their expert evidence rules to prevent junk science from entering court. The Third Circuit Court of Appeals ruled against lawsuits claiming insufficient product warnings when those warnings had been federally approved. And in Kentucky and Utah, we’ve seen courts make decisions that uphold fairness in the legal system.
Jerry: Well, that is good news in terms of judges being umpires and calling balls and strikes rather than being biased in favor of plaintiffs. I do believe that the report is essential, if not required reading, for our corporate counsel, and one can learn a lot looking at these reports from year to year and transposing them against litigation statistics that basically show the epicenters or hotspots of class action litigation tend to be clustered in these states that are identified by the report in terms of constituting a judicial hellhole. Well, thank you so much, Bernadette, for joining us on your very first podcast we really appreciate your contributions and thought leadership today, and thanks so very much.
Bernadette: Thank you for having me, Jerry, and thank you, listeners.
Duane Morris Takeaways: The American Tort Reform Association (“ATRA”) annually publishes its “Judicial Hellholes Report,” focusing on litigation issues and identifying jurisdictions likely to have unfair and biased administration of justice. The ATRA recently published its 2024-2025 Report and one of the top-ranking states from 2023 maintained its #1 position for 2024 – Pennsylvania, specifically the Pennsylvania Supreme Court and the Philadelphia Court of Common Pleas – as the most challenging venue for defendants. Readers can find a copy here and the executive summary here.
The Judicial Hellholes Report is an important read for corporate counsel facing class action litigation because it identifies jurisdictions that are generally unfavorable to defendants. The Report defines a “judicial hellhole” as a jurisdiction where judges in civil cases systematically apply laws and procedures in an unfair and unbalanced manner, generally to the disadvantage of defendants. The Report is a “must read” for anyone litigating class actions and making decisions about venue strategy.
The 2024 Hellholes
In its recently released annual report, the ATRA identified 10 jurisdictions on its 2024 hellholes list – which, in order, include: (1) Pennsylvania (especially in the Philadelphia Court of Common Pleas and the Supreme Court of Pennsylvania); (2) New York City (with unique state laws and lawsuit abuses); (3) South Carolina (particularly due to a bias against corporate defendants in asbestos litigation); (4) George (tied for #1 in 2023, the state has seen nuclear verdicts and endless liabilities for defendants); (5) California (with a huge overall volume of lawsuits, huge verdicts, Private Attorney General Act (PAGA) litigation, lemon law litigation, and high-stakes environmental litigation); (6) Cook County, Illinois (with no-injury claims filed under the state’s Biometric Information Protection Act (BIPA) and being a hotbed for asbestos litigation); (7) St. Louis, Missouri (with focuses on junk science in the courtrooms and nuclear verdicts); (8) the Michigan Supreme Court (particularly due to liability-expanding decisions and pro-plaintiff legislative activity); (9) King County, Washington (a first appearance on the list due to trial courts conducting unfair group trials, allowing junk science into evidence, and swapping to other state laws when favorable to plaintiffs); and (10) Louisiana (with long-running costal litigation and nuclear verdicts against defendants).
According to the ATRA’s analysis, these venues are less than optimal for corporate defendants and often attract plaintiffs’ attorneys, particularly for the filing of class action lawsuits. As a result, corporate counsel should take particular care if they encounter a class action lawsuit filed in one of these venues.
The 2025 “Watch List”
The ATRA also included one jurisdiction on its “watch list” — the Texas Court of Appeals for the Fifth District, which had three noteworthy decisions overturned by the Texas Supreme Court that would have expanded liability to defendants. The ATRA emphasized the need for oversight of this appellate court to ensure that it does not deviate from Texas precedent.
The 2025 “Dishonorable Mentions”
The ATRA included a few jurisdictions on its “dishonorable mentions” list, for making unsound decisions, engaging in abusive practices, or other actions that “erode the fairness of a state’s civil justice system.” The venues on the list include the Maryland Supreme Court, following a ruling which rejected a higher standard for expert evidence; Tennessee, as a new hotspot for abusive Americans with Disabilities Act Litigation; and Illinois courts where asbestos claims remain prevalent.
Points Of Lights
In addition, the ATRA recognized that several jurisdictions made significant positive improvements this year, highlighting decisions by the Third Circuit, which ruled that lawsuits alleging insufficient warnings on product labels, even with federal approval, cannot proceed; the Kentucky Court of Appeals, which overturned a previous problematic ruling for defendants; and the Utah Supreme Court, which upheld the state’s statute of repose for medical liability lawsuits.
Implications For Employers
The Judicial Hellholes Report often mirrors the experience of companies in high-stakes class actions, as Pennsylvania, New York, South Carolina, Georgia, California, Illinois, Missouri, Michigan, Washington, and Louisiana are among the leading states where plaintiffs’ lawyers file class actions. These jurisdictions are linked by class certification standards that are more plaintiff-friendly and more generous damages recovery possibilities under state laws.
Duane Morris Takeaway:This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Gregory Tsonis with their discussion of a proposed rule from the U.S. Department of Labor (“DOL”), entitled “Employment of Workers With Disabilities Under Section 14(c) of the Fair Labor Standards Act,” that would put an stop to the issuance of new certificates that allow employers to pay workers with disabilities a subminimum wage.
Jennifer Riley: Thank you for being here again for the next episode of our weekly podcast, the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is Greg Tsonis. Thank you for being on the podcast, Greg.
Greg Tsonis: Welcome, Jen, glad to be here.
Jennifer: So, big news this week from the U.S. Department of Labor. It has announced a major move to end the ability of employers to pay workers with disabilities below the federal minimum wage. This has been in the works for a while, though, right Greg?
Greg: Yes, it’s definitely been a long time coming. So, this rule is aiming to end the use of Section 14(c) of the Fair Labor Standards Act, the FLSA, which has allowed employers to pay workers with disabilities below the federal minimum wage way back since the 1930s, actually. So, this new proposal would stop the issuance of new certificates under that provision and existing employers with those certificates would have up to three years to phase out paying subminimum wages.
Jennifer: Right. I think a lot of people are surprised to see this move happening now, especially since it’s coming at the end of President Biden’s administration. What does the timeline look like for this rule?
Greg: Yeah, good question. So right now, the rule is in the proposed stage. So there’s a comment period that just started and runs through January 17th of next year. We’ll be hearing a lot of feedback from various stakeholders in that time. After that, the next steps will be determined, based on the comments that are received and what they say. But here’s the kicker – since it’s so close to Inauguration Day, it’s likely that the next administration will have a big role in finalizing that rule.
Jennifer: That’s right. And as we saw with some other issues under Biden’s administration, regulations like this can face challenges, especially if they come out toward the end of a presidency. But the push to end this practice has been building for a while, wouldn’t you say?
Greg: Absolutely. So, this is actually one of the farthest steps the federal government has taken to end Section 14(c). Democrats have been trying to get rid of it for years with legislation like Raise the Wage Act and the transformation to Competitive Integrated Employment Act. Both are still pending. But the platform for the Democratic party, both in 2020 and in 2024, has included a commitment to end subminimum wages for people with disabilities, and even some Republicans have backed this idea, especially in the Senate.
Jennifer: That’s true. Speaking of lawmakers, we have seen varying amounts of support. There was a pretty positive reception from some key figures in the Republican side as well as in the Democrat side. For instance, Representative Bobby Scott praised the announcement, calling it a step toward fairness. He made it clear that all workers, regardless of disability, should be treated with dignity and receive at least the minimum wage.
Greg: Exactly. He’s been an advocate for this for a long time, and his comments really emphasize the broader shift toward equality in the workforce. Democratic Senator Patty Murray also weighed in saying that paying workers with disabilities less than the minimum wage is discriminatory, and that this rule is a major step toward better economic outcomes for people with disabilities.
Jennifer: Right. But, as to be expected, there’s also pushback from some lawmakers going the other way. Republican Representative Virginia Foxx, for instance, was pretty vocal against the rule. She called it misguided and irresponsible, saying that the 14(c) program actually protects job opportunities for individuals with disabilities. She even pointed out that in states where the program was phased out, many workers ended up jobless or even isolated.
Greg: Yes, and that’s a real concern for some. Representative Foxx and others argue by eliminating 14(c), you could have unintended consequences. They believe that the program has helped individuals with disabilities gain employment in a way that would be difficult in a competitive market. Some critics are worried that this change could lead to job loss and greater social isolation for those workers who rely on these programs.
Jennifer: Right. It’s definitely a tough issue with strong opinions on both sides. But if the rule does go through, it could be a big shift in the rights and protections for people with disabilities. The government has already taken steps to end subminimum wage for federal contractors, and some states have banned it, too. So, it’s clear that momentum is building to move away from this practice.
Greg: Yeah, it’s been a major point of debate for years, and with the public comments coming in now, we’re likely to see even more perspectives emerge. There are certainly valid concerns about the potential impact on job opportunities. But at the same time, we’ve seen a shift in how workers with disabilities are treated in the broader workforce. Ending subminimum wage could create more opportunities for integration and fair pay.
Jennifer: It will definitely be interesting to see how this plays out with the comment period and potential changes from the next administration. There’s a lot of uncertainty about how quickly this rule will become a reality. But it’s definitely something to watch closely.
Greg: For sure, it’s a defining issue for both the disability rights community and the broader workforce, and whichever way it goes, it will have lasting implications for how workers with disabilities are treated in the job market. The next few months will be crucial in shaping that future.
Jennifer: Thanks, Greg, for breaking this down. It’s certainly going to be a topic that gets a lot of attention over the coming months. We will be sure to keep our listeners updated. Thanks for being here today, Greg, and thank you to everyone in the audience for tuning in.
Greg: Thanks for having me, Jen, and thank you to the listeners.
Duane Morris Takeaway: Happy Holidays to our loyal readers of the Duane Morris Class Action Defense Blog! Our elves are busy at work this holiday season in wrapping up our start-of-the-year kick-off publication – the Duane Morris Class Action Review – 2025. We will go to press in early January and launch the 2025 Review from our blog and our book launch website.
The 2025 Review builds on the success of our previous editions and represents our twentieth annual study of the class action space. At over 600 pages, the 2025 Review has more analysis than ever before, with discussion of over 1,250 class certification rulings from federal and state courts over this past year. The Review will be available for download as an E-Book too.
The Review is a one-of-its-kind publication analyzing class action trends, decisions, and settlements in all areas impacting Corporate America, including the substantive areas of antitrust, appeals, the Class Action Fairness Act, civil rights, consumer fraud, data breach, EEOC-Initiated and government enforcement litigation, employment discrimination, the Employee Retirement Income Security Act of 1974, the Fair Credit Reporting Act, labor, privacy, procedural issues, product liability and mass torts, the Racketeer Influenced and Corrupt Organizations Act, securities fraud, state court class actions, the Telephone Consumer Protection Act, wage & hour class and collective actions, and the Worker Adjustment and Retraining Notification Act. The Review also highlights key rulings on attorneys’ fee awards in class actions, motions granting and denying sanctions in class actions, and the top-class action settlements in each area. Finally, the Review provides insight as to what companies and corporate counsel can expect to see in 2025.
We are humbled and honored by the recent review of the Duane Morris Class Action Review – 2024 by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said, “The Duane Morris Class Action Review is ‘the Bible’ on class action litigation and an essential desk reference for business executives, corporate counsel, and human resources professionals.” EPLiC continued, “The review is a must-have resource for in-depth analysis of class actions in general and workplace litigation in particular. The Duane Morris Class Action Review analyzes class action trends, decisions, and settlements in all areas impacting corporate America and provides insight as to what companies and corporate counsel can expect in terms of filings by the plaintiffs’ class action bar and government enforcement agencies like the Equal Employment Opportunity Commission (EEOC) and the Department of Labor (DOL).”
We look forward to providing the 2025 edition of the Review to all our loyal readers in early January. Stay tuned and Happy Holidays!
