Class Action Weekly Wire – Class Action Defense

November 6, 2026November 6, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 171: “100% de Agave” Tequila Labeling Suit Dismissed By Washington Federal Court

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and associates Jamar Davis and Kenny Tran with their analysis of a Washington federal court’s dismissal of a product labeling class action brought by Costco customers over its “100% de Agave” Kirkland tequila.

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 back, everyone, to our podcast, the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today here from our Los Angeles office are my colleagues, Jamar Davis and Kenny Tran. Thank you, gentlemen, for both being here.

Jamar Davis: Thank you for having me, Jerry.

Kenny Tran: Happy to be here, Jerry.

Jerry: Today, we’ll be discussing an interesting class action decision involving Costco’s Kirkland Signature Tequila and allegations that products labeled “100% de Agave” actually contained alcohol derived from other sources. The case is called Salisbury v. Costco Wholesale Corporation, and it was filed in the U.S. District Court for the Western District of Washington. Recently, Judge Kymberly Evanson dismissed the proposed class action with prejudice, and what makes the ruling particularly interesting is that the court did not ultimately decide whether or not Costco’s tequila was adulterated. Instead, it concluded that based on international comity and the act of state doctrine, it prevented a U.S. court from adjudicating the plaintiff’s claims. Jamar, can you give us some background? What were the plaintiffs alleging here?

Jamar: Absolutely. The case involved five Kirkland tequila products: Blanco, Resposado, Añejo, Cristalino, and Extra Añejo. Each was labeled “100% de Agave”, and Costco represented that the products were made in Jalisco, Mexico, using 100% Blue Agave. Fourteen plaintiffs from nine states allege that they purchased the tequila between 2019 and 2025 in reliance on those representations. They claimed the products contained cheaper, non-agave alcohol, and that they either would not have purchased them or would have paid less if they had known that. The plaintiffs asserted a federal RICO claim and proposed a nationwide class action under Washington Consumer Protection Law and a number of state law claims.

Jerry: Any of the plaintiffs claimed in this case to have scientific testing that supported their allegations in the complaint. What did that testing show?

Kenny: So, they relied on a methodology called SNIF-NMR testing. We’ll call it “SNF and NMR” testing for short, which the complaint alleged could identify the plant origin of ethanol. The plaintiffs commissioned testing of Kirkland tequila samples and alleged none of them had met the threshold they said would indicate alcohol derived entirely from agave sugars. But that evidence ultimately presented a significant problem, because substantially similar allegations based on SNIF and MRR testing had already been considered by Mexican regulatory authorities. Mexico’s DGN, essentially their National Standards and Regulations Authority, considered a complaint involving Kirkland Tequila concluded that SNIF and MRR testing was not competent or sufficient evidence to establish noncompliance with Mexico’s tequila standards. It dismissed that complaint as inadmissible and unfounded, and a separate Mexican criminal proceeding involving similar allegations also ended in a decision not to prosecute.

Jerry: So, Jamar, how did the U.S. court treat that mosaic of background facts in terms of what had occurred in Mexico?

Jamar: The plaintiffs tried to characterize the lawsuit as a domestic consumer protection case. They were U.S. consumers who purchased products in U.S. stores from an American company. But the court concluded that characterization did not account for the central issue underlying their claims, which was whether the tequila had been adulterated during production. Tequila can legally be produced only in Mexico, and its production, authentication, and certification are governed by a comprehensive Mexican regulatory system. U.S. law also requires tequila to be produced in Mexico in compliance with Mexican law. That led the court to apply the doctrine of international comity.

Jerry: And Kenny, what did that analysis look like in terms of the court then looking into that particular issue?

Kenny: So, the court considered the interests of both countries and the adequacy of the Mexican proceedings. It acknowledged that the United States had an interest because the plaintiffs were American consumers. Costco was an American corporation, and the alleged misconduct implicated U.S. consumer protection concerns. But the court found that most of the conduct at the heart of the dispute, including the alleged adulteration, the production, authentication, and the certification of tequila, all occurred in Mexico. So, Mexico’s interests were particularly strong because tequila is a distinctive product in Mexico, and is governed by Mexico’s regulatory framework. The court also pointed to the U.S. regulations and the USMCA as recognizing Mexico’s authority over tequila production.

Jerry: I found it interesting that the plaintiffs argued, as one might expect, that they couldn’t obtain justice, and that the same consumer protection remedies available under Washington state law were unavailable in Mexico. How did that argument fly?

Jamar: Absolutely. So, the court acknowledged that Costco had not established that these U.S. plaintiffs could pursue these same claims or obtain the same remedies in Mexico. But the court concluded that the absence of an identical remedy did not make the Mexican proceedings inadequate. Instead, it emphasized that the plaintiffs had not shown fraud, manifest injustice, or a failure of fundamental procedural fairness in those proceedings. The court ultimately held that international comity warranted dismissal of plaintiffs’ claims.

Jerry: And Kenny, Costco had a second defense that independently supported dismissal, what they characterized as the act of state doctrine. Could you explain the background on that concept?

Kenny: Of course, Jerry. So, the active state doctrine generally prevents U.S. courts from sitting in on judgment on certain official acts of foreign sovereigns within their own territory. The court determined that both the DGN and Mexico’s CRT, their Tequila Regulatory Council, had undertaken official acts for purposes of that doctrine. The CRT had certified Kirkland tequila as 100% agave, while the DGN had rejected adulteration allegations based on SNIF and NMR testing. So, if the U.S. courts had accepted plaintiffs’ theory and found that the products were adulterated based on that testing, it wouldn’t necessarily conflict with those Mexican determinations. The court concluded that at the active state doctrine, therefore, independently required dismissal.

Jerry: I thought that the court’s distinction was very important. It was not making a factual finding, of course, that the plaintiffs’ testing methodologies were wrong, or conclusively determining that the tequila only obtained agave alcohol. Instead, it basically concluded that adjudication of the plaintiff’s theory without official actions taken in Mexico under its tequila regulatory system would implicate all of these concerns. So, let’s finish with the practical implications. Jamar, what are the biggest takeaways for companies in this situation?

Jamar: For companies selling internationally regulated products, I think the first takeaway is to understand the regulatory framework behind the representations appearing on the actual product. Here, Mexico’s certification process was not merely background evidence. It became central to Costco’s defense because the very representation the plaintiffs challenged depended on a designation regulated in Mexico, and U.S. law itself looks to Mexican requirements governing tequila production.

Jerry: Kenny, how far should companies read this decision? Is regulatory approval something that would insulate them from consumer fraud class actions?

Kenny: No, this was a very specific regulatory situation. What companies should take away is that when a class action challenges an imported or internationally regulated product. Counsel should ask at the outset whether the plaintiffs’ theory would require the court to contradict a foreign government certification or a regulatory determination. If it would, doctrines like international comity and the active state doctrine may provide important threshold defenses.

Jerry: And I think there’s also a broader litigation lesson to be learned here as well. Costco did not win because the federal court decided as a factual matter that the plaintiffs were wrong. It won, basically, because the court concluded that it was not the appropriate tribunal to make the determination that the plants wanted. That means companies, engaged in defending product labeling class actions should think about concepts far beyond whether the label is technically accurate. They should examine the entire regulatory chain, both domestically and internationally, particularly where a product is manufactured or regulated abroad, and its labeling or its certification may depend on that country’s regulatory regime.

Well, Jamar and Kenny, thanks so much for joining me, and thank you to our listeners for tuning in. We’ll see you next time on the Class Action Weekly Wire.

Kenny: It was great to be here, Jerry. Thanks to all the listeners for joining in.

Jamar: Thanks for having me, Jerry, and thanks, listeners.

September 25, 2026September 25, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 166: Job Applicants Seek Class Certification in Mobley v. Workday AI Bias Suit

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman, special counsel Adam Brown, and associate Elizabeth Underwood with their analysis of a significant development in a landmark class action centered on algorithmic discrimination in the employment context.

Episode Transcript

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

Adam Brown: Great to be here, Jerry.

Elizabeth Underwood: Thanks for having me, Jerry.

Jerry: Today, we’re discussing one of the most closely watched, AI-related employment lawsuits in the United States, a case called Mobley v. Workday. The plaintiffs recently filed a sweeping motion for class certification, asking a federal court in the Northern District of California to allow their claims to proceed on a class-wide basis involving potentially thousands, if not millions, of job applicants who were screened by Workday’s AI-powered recruiting tools. The certification gives us an early preview of the plaintiffs’ case theory and how they’re trying to challenge AI-driven hiring systems on a class-wide basis. Adam, can you give us an overview of the plaintiffs’ motion?

Adam: Sure, thanks, Jerry. The core of this case is an allegation by the plaintiffs that Workday’s recruiting and applicant screening tools disproportionately disadvantage applicants based on protected characteristics, which include race, sex, age, and disability. What they contend is that Workday’s AI products, such as HiredScore Spotlight, Fetch, and Candidate Skills Match, rely on historical hiring data and apply common screening logic across employers, which they say results in systemic disparities. What is important to note here is that the plaintiffs are pursuing disparate impact theories under Title VII, the ADA, and California’s Fair Employment and Housing Act. And what that means is that they don’t necessarily need to prove intentional discrimination, and instead, they’re attempting to show that the tools allegedly produce statistically significant adverse outcomes for protected groups.

Jerry: Well, that’s obviously a very critical decision. President Trump had issued an executive order last year outlawing the use of the disparate impact theory, at least insofar as EEOC actions, and here’s an example where the private plaintiffs’ bar is using that theory to forge ahead on their motion. This isn’t a case, then, challenging individual recruiter-made decisions. Instead, it’s that the technology itself may be generating discriminatory outcomes on a huge scale. That’s what makes this litigation, obviously, so significant for employers and technology providers. Why is this class certification motion noteworthy in and of itself?

Elizabeth: So, the certification motion may ultimately be the most important phase of the case. The plaintiffs are arguing that this dispute presents common questions capable of being resolved in one stroke, which is the language courts often use when evaluating Rule 23 commonality requirements. Their main argument is that Workday implemented the same AI-driven screening architecture across its customer base, so whether those tools produce desperate outcomes should be answered once for everyone subjected to the technology. The proposed class includes applicants who were screened, ranked, scored, shortlisted, or rejected through various Workday AI tools. The plaintiffs also proposed separate subclasses based on race, gender, age, and disability.

Jerry: It’s a very interesting spin in terms of their case architecture and their theories. In other words, the plaintiffs are attempting to move the discussion away from individual hiring decisions and focus it on the design and the operation of the AI systems themselves in an attempt to convince the court that the algorithms work uniformly across the board against employees or applicants in favor of employers. Adam, one aspect of the litigation that’s getting a lot of attention is the statistical evidence cited in the motion. What are the plaintiffs relying on in this situation?

Adam: Yeah, the motion is jam-packed with statistical arguments. The plaintiffs rely very heavily on expert analyses that they contend show significant disparities in rejection and grading outcomes. According to the motion, Black applicants were rejected at rates showing disparities exceeding 18 standard deviations from expected outcomes. Female applicants showed disparities exceeding 15 standard deviations, and Black female applicants allegedly experienced even larger disparities. The plaintiffs also point to alleged patterns in the timing of the rejections. They argue that many applicants receive rejections very quickly after applying, often during evenings, overnight hours, or weekends, and the motion contends that these timing patterns suggest automated decision-making rather than individualized human review.

Jerry: Seems like those allegations in this case theory ties directly into the broader debate surrounding AI in the employment context. The concern is simply not whether a system can make decisions faster. Actually, the concern is whether this automated process is replicating historical patterns in a way that creates headwinds and measurable disparities against protected category groups. Elizabeth, let’s talk about the other side of the “v.” What is Workday’s expected primary responses to this motion likely to be?

Elizabeth: Well, Workday has already previewed much of that argument publicly. The company says the plaintiffs are improperly lumping together different products and different hiring situations. Workday’s position is that applicant outcomes depend on numerous individualized factors, including qualifications, job requirements, employers, industries, locations, and the decisions made by individual customers. Class certification becomes much harder if the court accepts that framework. If every hiring decision requires examining a unique combination of employer preferences and applicant qualifications, common issues may no longer predominate.

Jerry: As we see it happen so often in class-wide litigation, there are competing narratives then underscoring both the motion for class certification and the opposition. Plaintiffs will say, “There’s one AI engine, there’s one common process, and there’s one common question.” I expect Workday is going to argue that there are thousands of employers, millions of applications, and countless individual circumstances, the gist of which is something that doesn’t create a class-wide common question. Whichever narrative the court finds persuasive could determine whether the class proceeds on a class-wide basis or as a collection of smaller individual claims. So, stepping back from that, Adam, what should employers be paying attention to in the coming months with respect to this briefing and the ultimate decision by the court?

Adam: This case is really important to keep an eye on, because it ultimately could be a roadmap for future AI litigation. The theory the plaintiffs are putting forward here is designed to reach beyond a single software platform. They’re effectively arguing that an AI developer can be challenged based on the way its algorithm operates across many employers using a common system ad if courts accept that theory, plaintiff’s lawyers may focus increasingly on centralized AI products rather than individual employers. That could significantly expand the scope of potential AI-related employment litigation.

Elizabeth: And I think another takeaway is the growing emphasis on bias audits and validation studies. One theme throughout the motion is whether Workday adequately tested its systems for disparate impact and whether those efforts were sufficient. Much of the future litigation landscape may focus not just on AI outputs, but also on the governance processes surrounding those systems.

Jerry: These are great points, and the legal conversation seems to be increasingly shifting from “Do you use AI?” to “How do you monitor it, how do you validate it, how do you document those efforts to mitigate one’s risks?” Well, as we wrap up, this remains one of the preeminent and consequential AI employment-related cases in the country, and the court’s upcoming ruling on class certification could have implications well beyond just this litigation. As Adam had indicated, it may well define how future plaintiffs challenge AI -driven employment systems and how courts evaluate class certification in this space.

So, Adam and Elizabeth, thanks so much for joining us today and providing your thought leadership and your insights. And thank you to our listeners for tuning in for another episode of the Class Action Weekly Wire. We’ll certainly keep you apprised of all developments in this litigation.

Elizabeth: Thanks for having me, Jerry, and thank you listeners.

Adam: Thanks, appreciate everyone listening.

August 28, 2026August 28, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 162: FLSA Conditional Certification Denied By Colorado Federal Court In Meal And Rest Break Case

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and associate Brett Bohan with their analysis of Colorado federal court decision denying conditional certification of an FLSA collective action brought by nurses and medical staff over alleged meal and rest break violations.

Episode Transcript

Jerry Maatman: Hello, everyone, and thank you for being here again for the next episode of the Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my colleague, Brett Bohan, an associate in our Class Action Defense Group. Thanks so much for being on the podcast, Brett.

Brett Bohan: Thanks for having me, Jerry.

Jerry: Today, we’re discussing a significant Fair Labor Standard Act decision out of the U.S. District Court for the District of Colorado; name of the case is Lightner v. DaVita, Inc. It was decided by Judge Nina Wang on August 21, 2026. The case involved allegations that the employer failed to properly compensate nurses and medical technicians for shorted rest breaks and interrupted meal breaks, resulting in alleged unpaid overtime under the FLSA. Let’s start with the background, Brett. What was this case about when you strip it down to its bare essentials?

Brett: Sure, Jerry. So, the plaintiff filed the lawsuit on behalf of herself and other similarly situated employees under the FLSA. The plaintiff specifically alleged that unpaid 30-minute meal breaks were frequently interrupted because nurses and technicians remained responsible for patient care, and that DaVita failed to pay for breaks lasting less than 20 minutes. Under Department of Labor regulations, breaks generally lasting between 5 and 20 minutes are compensable work time. The plaintiff claims that employees were required to clock out for these short breaks, and that the unpaid time reduced overtime compensation when employees worked more than 40 hours in a week. The plaintiff sought to represent current and former hourly paid nurses and technicians who provided direct patient care across DaVita facilities in 41 states.

Jerry: The decision at issue involved one where the plaintiff moved for conditional certification of a collective action, and the issue at the heart of that motion is whether or not the plaintiffs had shown sufficient evidence to conditionally certify a collective action and send notices to other workers about their right to potentially opt in to the litigation. Under Tenth Circuit precedent, district courts there use a two-step process. At the first stage, plaintiffs have a rather modest burden to show that they are similarly situated to other workers, and that the case could be managed on a representative basis. Historically, courts often grant conditional certification because the standard is known to be fairly lenient. But, as Judge Wang stressed in her ruling, certification is certainly not automatic. What evidence, in this case, did the plaintiff rely upon and supported their motion?

Brett: Yeah, so in the complaint, the plaintiff argued that nurses and technicians across DaVita facilities were similarly situated because they were all non-exempt hourly employees, were eligible for overtime, all used the same timekeeping system, and they were subject to the same meal and rest break policies. The plaintiff also asserted that DaVita maintained a company-wide practice of not paying employees for breaks shorter than 20 minutes. And to support those allegations, she relied on employee testimony regarding interrupted meal breaks and certain time records that showed a break lasting only 19 minutes. So, although this is a common claim in wage and hour cases, the issue became whether there was enough evidence showing that this allegedly unlawful practice existed across the entire proposed collective.

Jerry: And as I understand it, the company essentially argued that the plaintiffs had not demonstrated a common nationwide policy that cut the same way with respect to all members of the collective action, and that the evidence really was anecdotal and isolated, so therefore the plaintiff had not shown that workers across over a dozen states had experienced the same sort of uncompensated breaks. As I understand it, the court basically concluded that the plaintiff failed to even satisfy the relatively lenient first stage burden of showing that the members of the proposed collective action were victims of a common, uniform policy, and practice. What specifically did the judge identify in terms of deficiencies with the plaintiff’s case?

Brett: Yep, that’s right, Jerry. First, the judge stated that the complaint contained largely conclusory allegations. It asserted that the employees were subjected to an unlawful pay practice but provided very little detail regarding how the alleged practice operated across DaVita’s nationwide network workforce. Second, the court found the evidentiary record to be extremely thin. The plaintiff repeatedly relied on the records of a single employee showing a 19-minute meal break. Third, although many employees testified that meal breaks were interrupted, the court emphasized a critical distinction. Interrupted meal breaks did not automatically establish unpaid, compensable short breaks under the FLSA. What was missing was evidence showing employees routinely clocked back in within 20 minutes and were not paid for that time. The court essentially said that evidence of interruptions is not the same thing as evidence of an unlawful payment practice. One employee testified that she sometimes returned to work after only 5 or 10 minutes, but Judge Wang found that isolated testimony, combined with the single time record, was insufficient to establish a common nationwide policy affecting workers in 41 states.

Jerry: For me, this is a big win for an employer. The data analytics that we run every year in creating the Duane Morris Class Action Review showed over the last three years that plaintiffs won these first-stage conditional certification motions anywhere from 72 to 83% of the time. Last year was actually 75% of the time, so think about that – 3 out of 4 cases are granted. In your mind, what was the reasoning of the judge in this case that won the case for the employer and prevented conditional certification?

Brett: Yeah, I think, Jerry, that the thing that the court really emphasized here was that although the burden for conditional certification is modest, it isn’t non-existent. And so, a plaintiff still needs to provide some meaningful evidence that connects the individual experiences of a plaintiff to a common company-wide practice. And here, the court refused to infer a nationwide policy from the scattered examples and unsupported assertions that the plaintiff gave.

Jerry: For me, the underlying message here is that courts are increasingly scrutinizing claims, especially on a nationwide basis, and large wage and hour collective actions, even at the first stage in the so-called lenient stage of considering these types of motions. Employers that I speak with often believe that because of the data analytics underlying the plaintiffs’ victories across the United States, that sometimes it’s not even worthwhile to spend the time, effort, and money to oppose these sorts of requests, but certainly the decision is a reminder that in appropriate circumstances, when called to test the proof and the pleadings, plaintiffs don’t always win, and employers can actually turn the tables and beat a motion for conditional certification of a collective action. So, let’s talk about the practicalities, and the practical implications of this ruling – what should employers take away from it?

Brett: Employers should take away several things. So, they should continue to maintain accurate timekeeping records. One reason that DaVita prevailed here is that a plaintiff couldn’t point to broad evidence demonstrating a systemic violation. Employers should also review meal break and rest break procedures to ensure they comply with FLSA requirements. Specifically, breaks of 20 minutes or less generally must be paid, and employers should ensure their timekeeping systems are not inadvertently creating unpaid short break issues. Employers in healthcare face unique risks because patient care responsibilities often interrupt breaks. And here, the court did not determine that its practices were lawful. The judge expressly stated that she was not deciding the merits of the underlying FLSA claims. So, healthcare employers still should therefore examine whether employees are routinely interrupted during breaks, and whether interruptions are being tracked and compensated appropriately.

Jerry: Well, great discussion, Brett. The bottom line here is Judge Wang denied conditional certification because the plaintiff was unable to show that the employers, nurses, and technicians across 41 states were subject to a unifying common policy of denying compensation for breaks of less than 20 minutes. So, basically, the court interpreted the statute, 29 U.S.C., Section 216(b), to create a meaningful evidentiary threshold, even if it’s a relatively modest one. So, Brett, thanks so much for being here today and lending your thought leadership in this space, and thank you to our listeners for tuning in.

Brett: Thanks everyone for listening, and thanks, Jerry.

July 23, 2026July 23, 2026 by Class Action Defense

The Class Action Weekly Wire – Episode 157: $10 Million Settlement Proposed To Resolve Right Of Publicity Class Action

Duane Morris Takeaway: This week’s episode features Duane Morris partner Jerry Maatman and special counsel Justin Donoho with their analysis of a $10 million preliminary settlement between a data aggregator and a group of plaintiffs from nine states alleging violations of their right to publicity.

Episode Transcript

Jerry Maatman: Thank you for being here again for our next episode of the weekly podcast, the Class Action Weekly Wire. I’m Jerry Maatman of Duane Morris, and joining me today is my colleague Justin Donoho, who knows all things privacy. Thanks so much for being on the podcast today.

Justin Donoho: Great to be here, Jerry. Thanks for having me.

Jerry: Today, we’re discussing for our listeners a significant class action settlement involving data privacy, the right to publicity, and the use of personal information on online marketing purposes. The case is called Kellman v. Spokeo. There’s been a lot of interest in this case by our clients, and the parties have now reached a proposed settlement. So, we’re going to talk about what the case raises for companies, what the proposed settlement actually provides, and more importantly, what are the key takeaways for companies. Justin, let’s start with the basics – what’s the case about?

Justin: Yes, this case concerns Spokeo’s use of personal information in what the plaintiffs called “teaser profiles.” So, Spokeo operates a people search website. Users can search for information about individuals, and Spokeo provides information about those individuals through its website. Now, some of that information is available through a free search, while additional information is behind a paywall or requires a subscription. So, the plaintiffs allege that Spokeo used their personal information, including their names and home addresses in teaser profiles to market and sell subscriptions to the Spokeo website. The theory was that Spokeo wasn’t simply providing information about individuals. According to the plaintiffs, it was using individuals’ identities to promote a commercial service without obtaining their consent, and that distinction was important because the plaintiffs brought claims under a right of publicity laws in various states.

Jerry: So, as things go, this was not a traditional data breach case, right?

Justin: Correct. There was no allegation that Spokeo suffered a data breach that exposed information to any cybercriminals or anything like that. Instead, this case involved the commercial use of personal information, alleged commercial use. That’s an important distinction for companies because privacy risk isn’t limited to cybersecurity incidents. A company can face potential liability based on what it does with information that it lawfully possesses. Here, the plaintiffs alleged that Spokeo’s use of their identities in connection with marketing paid subscriptions violated state right of publicity laws.

Jerry: So, as I understand it, those laws can be particularly significant, and may provide pretty weighty statutory damages, even without proof of a pocketbook injury or actual economic loss.

Justin: Exactly. The proposed settlement filing explains that the relevant laws in Alabama and a lot of other states – California, Illinois, Indiana, Louisiana, Nevada, Ohio, South Dakota, and Washington – generally prohibit the unauthorized commercial use of an individual’s identity. The statutes differ from state to state, but they do provide statutory minimum damages. So, it ranged from $750,000 to $5,000 – in our home state of Illinois, I think it’s $1,000 – everything within that range among those states. So, that creates a potentially significant litigation risk when a company allegedly applies the same practice to large numbers of people.

Jerry: Let’s talk about the history of the case in terms of how the settlement occurred. As I understand it, the case had been ongoing for several years.

Justin: Yes, the original lawsuit was filed in November of 2021 by three plaintiffs asserting claims under California, Ohio, and Indiana law. Spokeo moved to dismiss, arguing, among other things, a lack of standing had not stated valid claims. In April of 2022, the court denied the motion to dismiss. There was permission sought for an interlocutory appeal, extensive discovery. According to the settlement filing, that included written discovery, document production, depositions, discovery disputes, expert work, motion practice. So, this was not a case that settled at the very beginning of the litigation.

Jerry: And as we have discussed many times on this podcast, pursuit and successful victory in the class certification context is all about gaining and obtaining class certification. That’s the holy grail that enables plaintiffs’ counsel to negotiate favorable settlements. In this case, was class certification a major pivot point in the case?

Justin: Absolutely, yes. The plaintiffs moved for class certification in 2023. Ultimately, they withdrew their request for a nationwide damages class, but the court certified California and Ohio classes with modifications to the proposed class definitions. Spokeo petitioned the Ninth Circuit for permission to appeal that order. The Ninth Circuit denied the petition, so that was an important point in the litigation because class certification significantly increased the stakes.

Jerry: If the settlement is ultimately approved by the court under Rule 23, let’s talk about the numbers in the settlement. The proposed settlement has the headline number of $10 million, is that correct?

Justin: Yes, that’s right. Spokeo would establish nine state-specific settlement funds totaling that $10 million, right? The funds are described as non-reversionary, also. That means the money if it’s not initially distributed to class members, it doesn’t simply go back to Spokeo. Instead, the settlement provides mechanisms for the remaining funds to be redistributed to claiming class members where practicable or otherwise handled as directed by the court. The actual amount each person receives will depend on a number of factors, including the number of valid claims submitted in that state and deductions for settlement administration expenses attorneys’ fees and costs, and any incentive awards approved by the court. So, the plaintiffs’ filing estimates that, assuming a 10% claims rate, individual recoveries could range from tens of dollars to more than $1,000, depending on the state.

Jerry: Was there any class-wide injunctive relief in the proposed settlement?

Justin: Yes, also a very important aspect of this settlement from a business perspective. Under the proposed settlement or agreement, when a user conducts a search that Spokeo’s algorithms interpret as a name search, Spokeo will modify the relevant purchase and payment pages so that the full name and home address of individuals in the injunction classes will no longer be displayed in that portion of the website flow. So, the proposed change is to be implemented within 30 days after entry of an order granting final approval. Gotta change all those business processes within 30 days.

Jerry: I think those aspects of the settlement tend to be more relevant to companies in terms of lessons learned. In terms of lessons learned, what are the takeaways for companies about the commercial use of data, and not just collection or security of that data?

Justin: Well, I think it means that a company might lawfully obtain information from public records or third-party data providers, but what this case teaches is that that doesn’t necessarily answer whether the company can use that information in every conceivable way. The question becomes, what is the company doing with this information? Is it displaying it, selling access to it, using it to generate leads? Using it to target advertising, using someone else’s name or likeness to promote a product, Incorporating somebody’s identity? Most importantly, is any of that violating any laws? So those are different uses, and they can present different legal risks.

Jerry: Let’s dig into that a little bit. What should a company do if it’s operating a business model involving the use of personal information like that?

Justin: Oh, boy, so many different uses of personal information. So, the first thing to do is to map the data lifecycle. Companies should know what personal information they collect, where it comes from, how it’s stored, who has access to it, how it’s ultimately used kind of a complex process there for many companies with a lot of personal information. Second, companies should specifically identify any uses of personal information that are commercial or promotional. Third, companies should conduct a state-by-state legal analysis where appropriate. Nationwide businesses shouldn’t assume that because a practice is permissible under one state’s law, it’s necessarily permissible everywhere. Fourth, companies should review their marketing and product design practices together. Sometimes legal risk is created not by a single marketing campaign, but by the design of the whole customer journey. And fifth, companies should think about class action exposure. If a company has a practice that is applied uniformly to thousands or millions of people, the aggregate litigation risk can be much greater than the potential exposure associated with any one individual claim.

Jerry: So, from a company’s perspective, I take it this means that a potential privacy or right of privacy issue should be evaluated early on before the business practice becomes the subject, obviously, of class action litigation.

Justin: Absolutely, and that’s particularly important as companies increasingly rely on data aggregation, AI, personalization, targeted advertising, automated marketing, all of that.

Jerry: So, the practical takeaway on the checklist should be know your data, know where it comes from, know how you’re using it, and understanding what laws apply to those uses.

Justin: Yes, absolutely. And also review practices that have become embedded in your products over time. Sometimes a feature was created years ago, when the legal environment was different, and no one’s revisited.

Jerry: Well, Justin, this has been a great tour of the privacy world, a super discussion. Thank you for your detailed analysis of the settlement and thank you for being here today. And thank you to our listeners for being here today, we’re glad you tuned in for another edition of the Class Action Weekly Wire.

Justin: Thanks, Jerry, and thank you to the listeners. It was a great time to be here. Appreciate it.

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.

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.

December 5, 2025December 5, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 129: North Carolina Federal Court Upholds Class And Collective Certification Rulings In Misclassification Suit

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Alex Karasik with their discussion of a North Carolina federal court decision adopting a magistrate judge’s recommendation to deny a motion for decertification of FLSA claims and grant the certification motion for state law claims.

Episode Transcript

Jerry Maatman: Thank you, loyal blog readers and listeners, for joining us again this week for the next episode of our weekly podcast series entitled The Class Action Weekly Wire. I’m Jerry Maatman, a partner at Duane Morris, and joining me today is my colleague and partner Alex Karasik. Welcome so much, Alex, for being on the podcast.

Alex Karasik: Great to be here, Jerry. Thank you for having me.

Jerry: Today, we’re going to discuss an important ruling that emanated from North Carolina. It’s in a case called Landis v. The Elevance Health Cos., and it involves a Fair Labor Standards Act (FLSA) case and a North Carolina wage and hour law case. It involves a recommendation made by a magistrate judge to not decertify a FLSA conditionally certified collective action, and then on top of it, to certify a Rule 23 class under state law. From your perspective, Alex, in terms of following these sorts of rulings, what stands out to you, and what should employers take away from this ruling?

Alex: What stands out is the court’s straightforward endorsement. By finding no clear error, Judge Boyle confirmed that both the FLSA collective action and the North Carolina Wage and Hour Act class claims should remain intact. That was certainly a unique ruling to me.

Jerry: Well, these are misclassification claims by the plaintiff, Kathy Landis. Could you give our listeners a quick recap of what this lawsuit was all about?

Alex: Yeah, certainly, Jerry. Landis alleged that Elevance, formerly the Anthem Companies and its subsidiary, Amerigroup, misclassified utilization reviewers in the Nurse Medical Management (NMM) job titles as exempt employees. Landis and the other plaintiffs alleged that they were salaried, classified as exempt, and routinely worked more than 40 hours in a work week, and therefore did not receive overtime compensation for the hours worked beyond 40. Their primary job duty was utilization review, which is essentially assessing whether requested healthcare services are medically necessary using objective clinical criteria.

Jerry: The study we do each year in the Duane Morris Class Action Review gathers statistics on decertification motions, and in past years, basically a jump ball, 50-50 between plaintiffs and defendants. In this particular case, what were the factors that led the court to deny decertification of the collective action?

Alex: In this instance, the magistrate judge found that similarities across all NMM rules outweighed the differences. All NMMs used the same software systems, they reported with a common supervisory structure, they performed standardized utilization review, they followed similar approval and escalation procedures. So even though sometimes there were different guidelines, the main functions remained the same. The magistrate judge stated that the differences were not meaningful to the core question of exempt status and whether or not they were misclassified. In other words, even if the day-to-day details varied among the people in the case, the variations did not alter the legal inquiry under the FLSA.

Jerry: One way to think about decertification is the concept of chaos. You can’t put one person on the stand, they tell their story, and it transposes to everyone else. What was the court’s take on the defendant’s argument about the individualized nature of the duties, the jobs, the tasks at issue here?

Alex: Yeah, the court didn’t find that persuasive in this case. Judge Swank found that the defendants overstated the amount of individualized analysis that would be required. She concluded that the collective could be analyzed efficiently and because the exemption issue was common across the group. The court opined that the central question was whether the utilization reviewers were exempt, or were they performing exempt or non-exempt work, and minor variations among the work performed wouldn’t alter that inquiry. The magistrate judge also found that collective treatment would be a more efficient method in terms of adjudicating these claims as opposed to an individual case. The magistrate judge concluded that all factors weighed against decertification.

Jerry: Many believe that obtaining conditional certification of a collective action is easier than obtaining Rule 23 certification of a class action. How did the court treat theories that the plaintiffs offered here for Rule 23 certification of their state law wage and hour claims?

Alex: Yeah, the court here essentially rejected the defendant’s arguments in terms of what they disputed in the case of the Rule 23 factors. She stated that the class shared a central question of whether individuals in these roles whose primary job was utilization review. We’re properly classified as exempt. The court held that the variations in hours worked or guidelines used did not defeat commonality, because the exemption question could be answered with common evidence.

Jerry: Commonality under Rule 23(a)(2) is one thing, but predominance under Rule 23 is another, and a very exacting, difficult test. How did the court react to the defenses of predominance and superiority in this context?

Alex: Judge Swank found that common issues predominated because the exemption question was common across the class, and it could be resolved using largely uniform evidence, such as their job descriptions, the deposition testimony about the review process, and Elevance’s uniform exemption policy. In other words, the judge concluded that a class action would be the superior method for adjudicating these claims.

Jerry: Well, thanks so much, Alex, for your overview and thought leadership in this area. The Duane Morris Class Action Review is about a month out from being launched. Chapter 23 is the wage and hour chapter, probably the meatiest chapter in the entire book in terms of the volume of rulings, and this certainly is a good case study of how plaintiffs have succeeded, at least in North Carolina, in certifying their cases. So, thanks so much for being here today, and being our guest speaker on this week’s podcast.

Alex: Well, thank you, Jerry. I’m grateful for the opportunity to be here, and thank you to our listeners.

August 21, 2025August 21, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 115: Ninth Circuit Strikes Arbitration Clause In Employee Health Plan

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associates Jesse Stavis and Caitlin Capriotti with their discussion of a major Ninth Circuit decision addressing a district court’s denial of a motion to compel arbitration in a proposed ERISA class action.

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

Episode Transcript

Jerry Maatman: Thank you to our listeners for being here again for our next episode of the Class Action Weekly Wire, our podcast series that examines class action issues. I’m Jerry Maatman, a partner at Duane Morris, and today we have Jesse Stavis of our Philadelphia office and from California, our newest team member, Caitlin Capriotti. Thank you both for being here to join the podcast.

Jesse Stavis: Great to be here, Jerry. Thanks so much for having me on again.

Caitlin Capriotti: Thanks, Jerry. I’m really happy to be here for my first episode.

Jerry: So, the Ninth Circuit just issued a very significant opinion involving Sodexo and its employee health care plan, and specifically how arbitration clauses interact with ERISA class action claims. Caitlin, can you give our listeners a synopsis of the decision?

Caitlin: Yeah, of course. So, the plaintiff in this case, Robert Platt, alleged that a monthly tobacco surcharge imposed on his employee health insurance premiums violated the ERISA. The plaintiff brought claims on behalf of himself and other plan participants under ERISA Sections 502(a)(1)(B) and 502(a)(3) and a fiduciary breach claim under 502(a)(2) on behalf of the health plan itself. Sodexo sought to compel arbitration based on the provision it unilaterally added to the Plan after Platt had already enrolled. The district court denied the motion, holding that there was no enforceable arbitration agreement because Sodexo could not unilaterally modify the Plan to impose arbitration without Platt’s consent, and then the company had appealed to the Ninth Circuit.

Jerry: Thanks for that cogent summary. Jesse, how did the Ninth Circuit react after reviewing the district court’s opinion?

Jesse: The Ninth Circuit agreed. It held that an employer cannot create a valid arbitration agreement simply by unilaterally amending an ERISA-governed plan. Instead, valid consent from the appropriate party is required. Now, for Platt’s individual claims under Sections 502(a)(1)(B) and (a)(3), the Ninth Circuit found that Platt himself was the relevant consenting party – and that he had not consented to arbitration, so he received insufficient notice, and was never informed that continued participation would signal his agreement.

However, the Ninth Circuit held that for the fiduciary breach claim under Section 502(a)(2), the Plan, and not Platt, was the relevant consenting party. Because the Plan’s terms grant Sodexo broad authority to amend its provisions, the court found that the Plan consented to arbitration. Nonetheless, the panel also agreed with Platt’s argument that even if the Plan had consented, the arbitration clause’s ban on representative actions violated the effective vindication doctrine, which protects statutory rights from being waived through arbitration. Since representative actions are integral to ERISA enforcement under Sections 502(a)(2) and 409(a), the court held that the representative action waiver was unenforceable.

Jerry: So, what’s the essential big takeaway here? Is this just another quirky, fact-specific Ninth Circuit opinion, or are we starting to see a trend in ERISA class actions where arbitration clauses are at issue?

Caitlin: We’re definitely starting to see a trend. This decision aligns with what we’ve seen from several other circuits, specifically the Second, Third, Sixth, Seventh, and Tenth. Courts are increasingly skeptical of arbitration provisions in ERISA plans that try to block representative or class-wide claims.

Jesse: And if we take a step back and look at the big picture, we really see that employers are losing ground in trying to force individualized arbitration when plan-wide relief is at stake. That’s a pretty huge shift in ERISA litigation strategy, and employers need to take note.

Jerry: Let’s unpack this a little more. Obviously, the case is now going back down to the district court because the Ninth Circuit affirmed in part and reversed in part. What exactly got compelled to arbitration or stayed, and what got tossed?

Jesse: So, the Ninth Circuit said that Sodexo could not compel individual arbitration for benefits and equitable relief because they didn’t get proper consent from plan participants when they added the arbitration clause unilaterally. That part stuck.

Caitlin: But for the fiduciary breach claim, the court actually said Sodexo did get valid consent – from the Plan itself, which is a distinct legal entity. So, technically, that claim could be arbitrated.

Jerry: But that being said, the way I read the Ninth Circuit’s opinion, there seems to be a catch. What’s that all about?

Jesse: Yes, Jerry, there is indeed a catch. Because the arbitration clause had a representative action waiver, the court said enforcing that would violate the effective vindication doctrine. That means Platt couldn’t be blocked from pursuing a fiduciary breach claim on a representative basis, which is exactly what ERISA allows.

Jerry: Well, this is probably music to the plaintiffs’ bar, because their business model is to find a case, file the case, certify the case, and then monetize the case – and avoid being compelled to arbitration. Are the plaintiffs’ attorneys going to have a broader array of tools to try and frustrate motions to compel arbitration and keep their cases in court?

Jesse: Oh, yes, they certainly are. And beyond that, the court also opened the door for unconscionability defenses, even though Sodexo had a valid agreement with the Plan. The Ninth Circuit said those defenses arise under federal law, not state law, which means they’re not preempted by ERISA. So, Platt gets another shot at challenging the clause.

Jerry: So, is this settled law in your opinion, or are we seeing a little bit of the Wild, Wild West and a lot of innovative, creative attacks on arbitration clauses in the coming months?

Caitlin: It’s still a bit of the Wild West. While the circuits are mostly moving in the same direction, there are differences on questions like plan-wide monetary relief versus equitable relief, and how far effective vindication goes.

Jerry: My sense is this lack of clarity, or that the legal principles are in flux, may well put this on the Supreme Court’s radar, especially as more circuit splits emerge on the arbitration issue in ERISA class actions. Before we wrap up, what are your big takeaways from the Ninth Circuit’s opinion in Sodexo?

Caitlin: For me, it’s the reaffirmation that ERISA’s representative structure matters. Courts won’t let arbitration clauses rewrite that.

Jesse: And I’d just add to that by saying that employers need to be very careful with how they draft arbitration clauses in ERISA plans. Unilateral amendments and representative waivers are definitely more risky territory.

Jerry: Well said. That’s cogent advice. We’ll be watching to see if the Supreme Court of the United States takes this up, but for now, loyal blog readers and listeners, be sure to keep checking the Duane Morris Class Action Blog for our updates on all things class actions and arbitration issues. Well, thanks for being here, Jesse and Caitlin, and thanks for tuning in, listeners.

Jesse: Thanks so much for having me on the podcast, Jerry, and thanks, as always, to the listeners for being here.

Caitlin: Thanks, everyone, and thank you for the warm welcome. I’m happy to be here.

May 30, 2025May 30, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 103: Procedural Issues In Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Nathan Norimoto with their analysis of key procedural issues in class action litigation addressed by the Second, Third, and Seventh Circuit Courts.

Episode Transcript

Jennifer Riley: Thank you for being here again for the next episode of our Friday weekly podcast, the Class Action Weekly Wire. I’m Jennifer, Riley, partner at Duane Morris, and joining me today is Nathan Norimoto. Thank you so much for being on the podcast today, Nathan.

Nathan Norimoto: Thanks. Happy to be here again, Jen. I appreciate it.

Jennifer: So, today we wanted to discuss trends and important developments with procedural issues in class action litigation. In our Class Action Review, this topic is somewhat of a catch-all in terms of the legal issues involved. Class action litigation presents significant procedural issues to litigants and courts alike. In 2024 courts addressed myriad procedural issues in class action litigation. Nathan, can you tell our listeners some of the highlights in this area over the past year?

Nathan: Certainly, jurisdiction is always an important consideration in class action litigation. Jurisdictional defenses are often can be dispositive when a defendant challenges the ability of plaintiffs to maintain their class action in court. This past year, the plaintiffs in Hasson v. FullStory, Inc. challenged district court decisions dismissing their class action lawsuits against FullStory, Inc., one of the defendants, and also Papa John’s International, Inc., for lack of personal jurisdiction, and essentially in their complaint plaintiffs allege that they were being unlawfully wiretapped by the defendants without their consent. Both of the defendants were incorporated in Delaware and based in Georgia, and the core legal issue that was presented in both cases centered on whether the defendants’ actions constituted sufficient contact with Pennsylvania to warrant jurisdiction from the court. The district court ruled against the plaintiffs on the grounds that they had failed to show that FullStory, one of the defendants, specifically aimed its conduct at Pennsylvania, where the action was venue. The district court also found that the claims were inadequate under both the “traditional” and “effects” tests for establishing personal jurisdiction. This decision from the district court was appealed to the Third Circuit, which ultimately affirmed the district court’s ruling. The Third Circuit ruled that the plaintiff’s allegations had failed to show that one of the one of the defendants, Papa John’s, targeted Pennsylvania specifically as the company’s website was intended for a national audience. The Court of Appeals also held that just simply operating an accessible website does not equate to targeting a specific state for purposes of the personal jurisdiction analysis. Additionally, the Third Circuit rejected one of the plaintiffs’ arguments that Papa Johns’ business activities in Pennsylvania established sufficient jurisdiction, analyzing that the alleged wiretapping would have occurred regardless of the company’s operations in that state. The court acknowledged Papa Johns’ significant presence in Pennsylvania but found that the plaintiffs’ claims did not arise out of or relate sufficiently to those contacts. So, ultimately the Third Circuit ruled that the connection between the website’s operation and the wiretapping claims was too weak to satisfy jurisdictional requirements as to the other plaintiff’s claims. The Third Circuit ruled that the plaintiff did not allege that FullStory, the other defendant, knew that he or any other user was in Pennsylvania before this alleged wiretapping app application was dispatched to his browser. The court held that FullStory was a degree removed from the alleged harm in the chain of events preceding this application’s transmission to the plaintiff’s browser failed to establish that FullStory, the defendant, expressly aimed its alleged wiretapping at Pennsylvania. So, for these reasons, the Third Circuit affirmed the district court’s ruling dismissing the case.

Jennifer: Thanks, Nathan. The issue of standing is always also a hot topic in class action litigation. For instance, I know the Second Circuit weighed in on associational standing in a case called Do No Harm, et al. v. Pfizer Inc. this past year. So, associational standing is a legal doctrine that allows an organization to sue on behalf of its members when those members have suffered injury, even if the organization itself hasn’t experienced harm. Essentially, it gives an organization the right to act as a representative of its members in court. So, in that case the defendant was Pfizer. It launched a program called the Breakthrough Fellowship Program in 2021 to increase minority representation and leadership opportunities. The program included a summer internship, two years of full-time employment, a fully paid MBA, MPH, or MS degree, additional internships, and postgraduate employment with Pfizer, the defendant. Eligibility for the program was restricted to the U.S. citizens or permanent residents who were undergraduate juniors with 3.0 GPAs and who exhibited commitment to pursuing one of those degrees, and it specifically aimed to enhance opportunities for Black/African American, Latino/Hispanic, and Native American candidates. The plaintiff in that case was an advocacy organization and filed a lawsuit claiming that the fellowship’s focus on increasing diversity excluded White and Asian American applicants in violation of Title VII. The organizations sought a temporary restraining order, or TRO, to halt the selection process for 2023. The district court in that one dismissed the case, ruling that the plaintiff, the association, lacked standing because it failed to identify any harmed members by name, and also did not sufficiently demonstrate that its members were directly affected. The district court there opined also that the fellowship program did not violate the federal civil rights laws. On appeal, the Second Circuit affirmed the ruling of the district court. The plaintiff argued that the dismissal was premature because it had met the standing requirements for a preliminary injunction. The Second Circuit disagreed. It ruled that the plaintiff, who was of course pursuing claims as an association, had to name at least one injured member in order to establish standing, and therefore the dismissal was appropriate because the plaintiff failed to meet that requirement.

Nathan: Interesting. I’m interested to see how that doctrine progresses through 2025. Jen, I also wanted to address the issue of consolidation and class action litigation, since oftentimes consolidation issues surface when defendants are subject to multiple class actions and are assessing whether or not to consolidate multiple cases in one form is a strategic imperative for defendants. In Willis, et al. v. Government Employees Insurance Co., the plaintiffs filed a collective action alleging that GEICO had failed to pay overtime wages under the Fair Labor Standards Act, or the FLSA. The case was connected to two other FLSA collective actions against GEICO already pending in that court and the defendant, GEICO, had sought a dismissal of the case as duplicative since the named plaintiffs were also part of another lawsuit entitled Benvenutti v. GEICO. The court denied the motion and ultimately consolidated the actions, stating that the Benvenutti action specifically involved service representatives at GEICO’s operation working out of its Macon, Georgia call center, and had alleged that GEICO failed to pay overtime under a policy that had only compensated logged in hours. The current plaintiffs, while also part of the Benvenutti case, represented employees in different positions who had similar claims regarding unpaid hours worked. The court noted that there was a substantial overlap in the parties’ issues and relief sought between the two cases, emphasizing that both actions revolved around claims of unpaid overtime under these alleged timekeeping practices. And so, the court ruled that consolidating the cases would actually enhance judicial efficiency and avoid repetitive litigation to provide a more streamlined resolution of the common issues.

Jennifer: Thanks, Nathan. Agreed – centralization is key for parties when attempting to litigate the claims of several actions in a particular forum. So, let’s talk about one more topic, and one that is always interesting in terms of how courts rule – sanctions, sanctions in class action litigation. Were there any interesting rulings on sanctions in 2024?

Nathan: Definitely. One interesting sanctions case was Mazurek, et al. v. Metalcraft Of Mayville, Inc. The plaintiff machinist had filed a collective action alleging that the defendant had failed to pay overtime compensation in violation of again the FLSA. The plaintiff specifically asserted that the defendant’s timekeeping system allowed employees to clock in and out up to 15 minutes before and after their scheduled shifts. However, the plaintiff alleged that if employees clocked in early but didn’t ultimately end up working that time, the recorded start time was adjusted to reflect the regular shift start time that was already programmed in the system. The plaintiff claimed employees were not compensated for this early time, despite them working. So, a timeclock issue. The court initially granted conditional certification of the collective action, but after discovery it subsequently decertified the collective action. The plaintiffs, following that decertification ruling, filed 16 additional cases which the court moved to consolidate or consolidated, and then the court selected two cases for summary judgment briefing. Out of those 16, the court had granted summary judgment to the defendant in all the selected cases. It ruled that even though the FLSA plaintiffs have a lower burden of proof when employer records are inaccurate. For example, the plaintiffs must still provide some proof of the hours they worked and were not compensated for that time. And so, the court noted that reconstructed work time had to be more than mere guesswork and found that plaintiffs’ attempts to estimate their work hours were just insufficient. So, in a separate order, in addition to that motion for summary judgment order, the court noted that since the two selected cases shared similar issues, it might be indicative of the broader problem with all of the pending cases. The court instructed plaintiffs’ counsel to then provide any specific facts or legal arguments that could differentiate the remaining cases from the two that have already been decided. In response, the plaintiffs in the remaining cases voluntarily dismissed their complaints with prejudice. Given the court’s ruling and the other actions, the defendant then moved for sanctions across all 16 cases, arguing that the allegations were based on speculation rather than evidence, and that plaintiffs’ counsel should have realized the cases were baseless when they filed the complaints. The district court ultimately denied the sanctions motion finding that while the evidence provided by the plaintiffs was insufficient to win at summary judgment, it still didn’t rise to the level of frivolousness or baselessness to warrant sanctions. Defendants appealed, and on appeal, the Seventh Circuit affirmed the district court’s ruling, agreeing that the plaintiffs’ claims were based on legitimate legal arguments and methods of proof and also, of course, that the district court had not abused its discretion denying that motion for sanctions.

Jennifer: Thanks, Nathan, great insights and analysis. I know that these are only some of the manners in which procedural issues can and have impacted and shaped class action litigation. I expect the ways in which both sides utilize these procedural tools, and the manner in which the courts rule on their applications, will continue to evolve in 2025. Thanks so much for joining us today. And thank you, Nathan, for your insight and excellent analysis.

Nathan: Thank you, listeners. Thank you, Jen.

April 25, 2025April 25, 2025 by Class Action Defense

The Class Action Weekly Wire – Episode 98: Key Appellate Developments In Class Actions

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley, senior associate Tyler Zmick, and associate George Schaller with their discussion of the notable appellate rulings shaping class action litigation in 2025.

Episode Transcript

Jennifer Riley: Thank you for being here again for the next episode of our Friday weekly podcast, the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today are Tyler Zmick and George Schaller. Thank you both so much for being on the podcast today.

Tyler Zmick: Thanks for having me, Jen.

George Schaller: Glad to be here, Jen.

Jennifer: So today, we wanted to discuss some trends and important rulings in the area of appeals in class action litigation. Parties have limited options when it comes to seeking interlocutory appellate review of a class certification decision. What are some typical ways in which parties can move for an interlocutory review?

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

Jennifer: George, can you explain to our listeners what are the primary differences between those two options? In particular, what is the benefit of Rule 23(f)?

George: Sure, Jen, so unlike interlocutory appeals under Section 1292(b), Rule 23(f) does not require a district court to certify an issue for appeal. Moreover, Rule 23(f) does not include the potentially limiting requirements of Section 1292(b) under which the district court can certify an issue for appeal only where an order involves a controlling question of law as to which there’s substantial ground for difference of opinion, and where an immediate appeal from the order may materially advance the ultimate termination of the litigation.

Jennifer: Thanks, George. So here’s a question that I get asked quite often – how likely is it that a Rule 23(f) petition will get granted by the appellate court?

Tyler: So, studies have actually been done on that very issue. And those studies show that appellate court orders or appellate courts deny approximately 75% of Rule 23(f) petitions to appeal class cert orders. And most of those denials come by way of summary orders that do not provide any reasoning. So basically, the court says ‘petition denied because I said so.’

Jennifer: Do you have any examples of some rulings granting petitions for appeal over the past year in particular?

George: Yes, so the plaintiffs in Richards, et al. v. Eli Lilly & Co. filed a collective action alleging that the defendant failed to promote older employees in violation of the Age Discrimination in Employment Act, or the ADEA. The court granted the plaintiff’s motion for conditional certification, and the defendant moved to certify an interlocutory appeal and stay the action. The court granted the defendant’s motion, and the court first analyzed whether the issue at hand was a pure question of law rather than a factual dispute. The court concluded that the question of the proper standard for collective action certification, whether it be the more lenient modest factual showing approach or the stricter preponderance of evidence standard, was a question of law suitable for appeal. The court assessed whether the resolution of the legal question would significantly impact the course of the litigation. The court also determined that clarifying the standard for certification would affect the size and scope of the collective action, thereby impacting settlement negotiations and potentially expediting or prolonging the litigation process. The court further considered whether there were substantial grounds for a difference of opinion on the legal issue. The court noted conflicting decisions in different circuits and within its own circuit, which indicated a genuine dispute over the appropriate standard for certification. Finally, the court concluded that resolving the certification issue would ultimately expedite the progression of the lawsuit. Accordingly, the court granted the defendant’s motion for an appeal, certifying the question of the proper standard for collective action certification of an ADEA claim.

Jennifer: Thanks, George, very interesting to get some of the court’s rationale in graining that petition, and we’ll see what the Court of Appeals decides in that case. Now that we are well into 2025, have there been any interesting rulings so far this year?

Tyler: Yes, there have been a few. One example of a notable ruling was issued by the Tenth Circuit Court of Appeals in March of this year, in the case named Quint v. Vail Resorts. The plaintiffs in that case filed a class action against their employer, Vail Resorts, in federal court in Colorado, alleging violations of state and federal labor laws. Now, around the same period of time, similar claims were being pursued in California state court by a different group of employees in a case called Hamilton v. Vail. The claims in the Hamilton case were ultimately settled, so the Vail defendant in the Colorado federal case asked the court for a stay to avoid overlapping litigation on the same claims. The district court agreed and paused the federal case until all appeals in the Hamilton case were resolved. Meanwhile, in California state court, the Colorado plaintiffs objected to the Hamilton settlement, and when the state trial court overruled those objections to the settlement, the plaintiffs appealed to the California Court of Appeals, and the California Appellate Court then ruled in favor of the Colorado plaintiffs, and then allowed them to intervene in the state court trial action and the court overturned the approval of the Hamilton settlement. The defendant then requested review from the California Supreme Court, but that court declined. As a result, the condition that triggered the end of the stay in the Colorado federal court case – which was final resolution of the Hamilton appeals – was met. And so back in federal court, the Colorado plaintiffs moved to lift the stay that had been in effect in that case, and the Tenth Circuit ultimately held that the stay had already expired on its own terms, and since there was no longer an active stay to lift, the Tenth Circuit found that the appeal was moot, because there was nothing left to resolve. So, the Tenth Circuit, therefore, dismissed the appeal.

Jennifer: Thanks so much for those examples. I anticipate that appeals will continue to be granted sparingly, and the courts will continue to provide little guidance to the parties on what will and won’t be successful in terms of arguments in these petitions. So, I think the parties will have to continue to develop some novel approaches and evolve their strategies in order to continue to obtain success in this area. Well, thanks so much for all of the great analysis, George and Tyler, and thank you for being here on the podcast with me today, listeners. Thank you so much for tuning in.

Tyler: Thanks for having me, Jen, and thank you, listeners.

George: Thanks, everyone. Have a great weekend.

October 11, 2024 by Class Action Defense

The Class Action Weekly Wire – Episode 77: Chicago’s New Sick Leave Law Faces Airlines’ Challenge

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Ryan Garippo with their discussion of a recent lawsuit challenging the implementation of the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, which took effect in July 2024, alleging the statute would impact flight prices and routes – hindering airlines’ ability to provide services.

Episode Transcript

Jerry Maatman: Thank you. Loyal blog readers and listeners. My name is Jerry Maatman of Duane Morris, and welcome to our weekly podcast series, entitled The Class Action Weekly Wire. I’m joined today by Ryan Garippo, one of my colleagues, who’s here to discuss some cutting-edge litigation in the U.S. District Court for the Northern District of Illinois. Welcome, Ryan.

Ryan Garippo: Great to be here, Jerry. Thanks for having me.

Jerry: We wanted to talk about a lawsuit brought by an organization known as the Air Transportation Association of America, in response to a new law passed by the City of Chicago requiring paid sick leave. The law is being challenged, a law that went into effect on July 1, which requires that employers provide workers with up to 40 hours of paid sick leave (and up to 40 hours of paid leave) that can be used for any reason and at any time. Ryan, what’s this lawsuit all about and why is it important for companies?

Ryan: Well, Jerry, it’s a really interesting case. The plaintiffs in this case alleged that the municipal ordinance, the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, cannot be enforced against airlines because it interferes with flight crew staffing and scheduling in violation of federal law and their collective bargaining agreements. Here, the airline lobbying group stated that the new regulation is preempted by the ADA, or the Airline Deregulation Act, and the Railway Labor Act. These are laws that removed federal government control over the industry to allow the market to influence economic decisions like fares, routes, schedules, and services. The law also prohibited state and local governments from enacting or enforcing a law or regulation having the force and effect of law related to price, route, or service of an air carrier. The plaintiffs have argued that this ordinance would do exactly that.

Jerry: Well, thank you for setting the scene. That’s a very interesting lineup of issues and litigants. My understanding is the lawsuit was filed against Kenneth Meyer, who’s the Commissioner of Chicago’s Department of Business Affairs and Consumer Protection – why is it that this association sued the city or the chair of this agency?

Ryan: Well, this the organization sued Mr. Meyer because he’s the one who enforces the law. He argued that the law is not preempted at the ADA because it regulates airline employees – and not the price, routes, or services. Mr. Meyer also contended that the ordinance’s regulations of employees would not cause airlines’ labor costs to increase, but the costs are just one of many inputs that impact an airline’s customer facing services and are too far removed to be preempted. Mr. Meyer also stated that the ordinance was not preempted by the Railway Labor Act because it did not involve the collective bargaining process and did not trigger that interpretation of the collective bargaining agreement. He also argued that the ordinance simply established minimum labor practices within the city.

Jerry: So, in essence, the association was challenging the viability of this law and whether or not it could stay on the books. How did the association respond then to the city’s motion to dismiss after it was filed?

Ryan: Understandably, they argue that the motion should be denied. They argued that the ordinance does undermine the airline’s ability to organize with its employees, and that it would result in the employees ultimately misusing the ordinance by taking sick leave more frequently and on shorter notice. This possibility, according to the plaintiff, means that the ordinance is preempted by the ADA because the Act removed the federal government’s control over the industry to allow the market to influence decisions like fares, routes, schedules, and services. They also contend that a certain number of the flight attendants must be on a plane for the airline to allow passengers to start boarding, and if more employees are misusing the ordinance, then the airline will be forced to spend time searching for potential replacements for flight attendants when they call out abruptly on sick leave which will lead to potential delays, cancellations, and will ultimately impact routes and fares. Well, now that the motion is fully briefed, we’ll keep our eyes out for a ruling from the court.

Jerry: This reminds me of kind of the post-COVID situation, where hundreds, if not thousands, of cities and municipalities enacted leave laws, including the sick leave law that you’ve described, so that employers, especially those operating in multiple states, have to deal with a patchwork quilt of obligations when it comes to leave laws such as at the federal level, state level, and even the city level. So a very vexing, challenging area for employers. And this is a key ruling that everyone will want to keep uppermost in their mind in terms of trying to figure out how to comply with that patchwork quilt. Well, thanks, Ryan, for lending your expertise and thought leadership and joining us for this week’s podcast.

Ryan: Happy to be here. Thanks everyone.