Class Action Watch

Quarles’ national class action defense team represents businesses in all industries. Our team is particularly well versed in defending against matters involving consumer protection, false advertising, deceptive marketing, Telephone Consumer Protection Act (TCPA), privacy, data breach, employment and antitrust claims. This resource hub is designed to provide clear and practical insight into class action litigation developments across the nation. Our goal is to help readers understand not only what is happening in the class action space, but why it matters.

The Southern District of California Weighs in on a Safe Harbor Authority Split

In a recent opinion, the Honorable Gonzalo P. Curiel ruled that California's safe harbor doctrine precludes not only plaintiffs’ statutory consumer protection claims, but also their common law claims based on the same alleged conduct. Judges across California have reached differing conclusions on this point, but this opinion marks the first time a judge in the Southern District has weighed in.

In Carrie Calcagno, et al. v. The Scotts Company LLC, et al., No. 3:25-CV-02661-GPC-DEB, 2026 WL 2676828 (S.D. Cal. Sept. 11, 2026), the plaintiffs alleged that the defendant falsely advertised that its soil and fertilizer products were “organic.” Plaintiffs alleged both statutory claims (violations of UCL, FAL, and CLRA), and common law claims (breach of warranty and unjust enrichment). The defendant moved to dismiss all of the plaintiffs’ claims, arguing, among other things, that the California Department of Food and Agriculture had already determined that the products met the definition of “organic” under California regulations, which in turn meant that the defendant could use the label “organic” on its products. The defendant’s product labeling thus fell within California’s safe harbor doctrine as a matter of law.

In California, the safe harbor doctrine shields defendants from claims based on actions that the state legislature has expressly permitted. Courts have wrestled with whether the safe harbor extends to non-statutory claims that do not fall within the consumer protection rubric, such as the breach of warranty and unjust enrichment claims that the plaintiffs brought in their lawsuit. In Calcagno, Judge Curiel found that the safe harbor does so extend, holding that "the doctrine's purpose is only well-served if it applies to all such claims, not only those under the consumer protection statutes. Finding otherwise would enable plaintiffs to simply circumvent the doctrine entirely by framing consumer protection claims within common law causes of action." Calcagno, 2026 WL 2676828 at *10. Judge Curiel thus dismissed at the pleadings stage the plaintiffs’ non-statutory claims based on the defendant’s labeling of its products as “organic,” finding that they failed as a matter of law. Indeed, he dismissed these claims without leave to amend.

Notably, Judge Curiel did give the plaintiffs leave to amend misrepresentation claims that were based on different alleged conduct than the defendant’s “organic” label.

Companies facing false advertising claims should be aware that courts have reached differing conclusions about the scope of California’s safe harbor doctrine and assess whether a motion to dismiss is likely to succeed in the relevant jurisdiction.

Quarles & Brady’s class action litigation team is experienced with false advertising claims and can help navigate the best approach to litigating them. If you have received a demand related to such a claim or want guidance on false advertising law, please contact our team.

If you have any specific questions on this article, please contact your Quarles attorney:

Senior Law Clerk Connie Pasha contributed to this article.


Seventh Circuit Adds to Growing Circuit Split About Whether Federal Common Law or State Law Governs Non-signatory Equitable Estoppel Arguments in Arbitration Disputes under Chapter 2 of the Federal Arbitration Act

In Kim v. Jump Trading, LLC, No. 25-1964, 2026 WL 2348464 (7th Cir. Aug. 13, 2026), the Seventh Circuit affirmed the denial of a non-signatory defendant's motion to compel arbitration in a putative class action arising from the collapse of the two cryptocurrencies. The Seventh Circuit held that state law, not federal common law, supplies the rule of equitable estoppel governing whether a non-signatory may enforce an arbitration agreement under Chapter 2 of the Federal Arbitration Act (“FAA”), adding to a growing circuit split.

The Plaintiff, Taewoo Kim, brought putative claims on behalf of investors in the cryptocurrencies against Jump Trading, LLC and Jump Crypto Holdings, LLC (“Jump”), alleging that Jump conspired with Terraform, a Singapore-based company that managed the cryptocurrencies, to manipulate the price of the cryptocurrencies, which induced Kim and other investors to purchase them.

Despite not being signatories to the agreement, Jump sought to enforce, under a theory of equitable estoppel, the arbitration agreement between Kim and Terraform, arguing that Kim’s claims were intertwined with Terraform’s alleged misconduct. The district court denied Jump’s motion to compel arbitration.

On appeal, the Seventh Circuit addressed two key questions: “first, who decides—the court or an arbitrator—the merits of Jump’s equitable estoppel argument? And second, if a court decides, is Jump entitled to arbitrate against Kim?”

On the first issue, the Seventh Circuit determined that a court must resolve whether Jump has rights as a third party under the agreement between Kim and Terraform because arbitration is “strictly a matter of consent.” The court held that, if this question were left to the arbitrator to decide, then “anyone could benefit from a stranger’s agreement to arbitrate . . . without ever being a party to it—a result that the ordinary law of contracts does not allow.”

On the second issue, the Seventh Circuit joined the minority view of circuits that have addressed this issue and held that state law, not federal common law, provides the substantive elements for equitable estoppel under Chapter 2 of the FAA. The Seventh Circuit pointed to the language of Chapter 2 (which adopts the New York Convention recognizing foreign private arbitration agreements and awards), providing that Chapter 1 governs with respect to all subjects not covered in Chapter 2. Because equitable estoppel falls within the subjects covered by Chapter 1 through its incorporation of state law to interpret and enforce arbitration agreements, the Seventh Circuit held that state law should be used to determine whether equitable estoppel applies. The Seventh Circuit thus joined the Fifth Circuit in this conclusion, parting from the First, Second, Fourth, and Ninth Circuits—all of which apply federal common law under Chapter 2.

Non-signatory defendants seeking to enforce arbitration provisions should be aware of these differences, understand which law may apply depending on the jurisdiction in which they are located, and assess whether a motion to compel arbitration is likely to succeed under the applicable law (federal common law or state law).

Quarles & Brady’s litigators are experienced with the FAA and can help you navigate the complexities of trying to enforce an arbitration agreement as a non-signatory. If you have questions about the Kim decision, need assistance evaluating a bilateral arbitration agreement to see if it can be enforced by a third party, or want guidance on federal or state equitable estoppel law, please contact our team.

Ninth Circuit Limits Employers' Ability to Implement Arbitration Agreements After Litigation Begins

The Ninth Circuit recently held that a district court may refuse to enforce arbitration agreements obtained from putative class members during pending litigation when the employer’s communications were misleading and designed to undermine the class action process. Avery v. TEKsystems, Inc., 165 F.4th 1219 (9th Cir. 2026) is a cautionary tale for employers who wait until after they have been sued to implement arbitration agreements and class action waivers, and a powerful reminder that proactive dispute resolution planning is far more effective than reactive measures taken under pressure of litigation.

The case arose from a putative class action filed by former recruiters at a professional staffing agency, alleging California wage and hour violations. The staffing agency had maintained a longstanding arbitration policy for its external consultants but had never extended that policy to internal employees. Nearly two years into the litigation — after class certification briefing had closed — the staffing agency rolled out a new mandatory arbitration agreement to internal employees, including the putative class members. The company’s communications about the newly-implemented arbitration agreement disparaged class actions, contained inconsistent deadlines, and gave class members only thirteen days to respond during the holiday season. The staffing agency then moved to compel arbitration pursuant to the newly-minted agreement just five days before the class notice period closed.

The district court denied the motion to compel, and the Ninth Circuit affirmed, holding that Rule 23(d) grants district courts authority to invalidate arbitration agreements, particularly ones that effectively transform an opt-out class process into an opt-in process. The Avery decision reinforces a principle that has emerged consistently in post-Concepcion case law: arbitration agreements obtained before litigation are generally enforceable, but agreements obtained during litigation face extraordinary scrutiny. In assessing the invalidating of arbitration agreements, courts examine the vulnerability of class members, evidence of coercion, whether the employer targeted class members specifically, and whether communications were misleading.

For employers seeking to avoid a similar outcome, consider implementing arbitration agreements with class action waivers before any dispute arises. Such agreements can be part of standard onboarding for all employees — not limited to certain classifications — so they cannot be characterized as targeted at a particular group or responsive to a particular litigation. Communications should be neutral, professional, and internally consistent. Employees should receive adequate time for review, and any opt-out provisions should be clearly explained. Agreements should be drafted to withstand challenge under generally applicable contract defenses such as unconscionability, and where possible supported by consideration beyond mere continued employment. If you do not have these types of agreements currently in place, consider discussing the pros and cons of implementing them with counsel.

Even where litigation has already been filed, employers retain meaningful options prior to class certification. Early case assessment regarding the scope of potential exposure, the strength of the named plaintiff’s claims, and the composition of the putative class allows for informed strategic decision-making. The key is to engage with these strategies early rather than waiting until late in the litigation shift decisively in favor of the plaintiffs.

Quarles’ Class Action Defense Team brings deep experience navigating complex class action litigation across industries, including wage and hour class actions in federal court. Our litigators work closely with clients to develop proactive strategies, from implementing enforceable arbitration programs and class action waivers to opposing class certification and managing pre-certification risk. If you have questions about the Avery decision, need assistance evaluating your current arbitration agreements, or want guidance on reducing class action exposure, please contact our team.

If you have any specific questions on this article, please contact your Quarles attorney:


Ninth Circuit Expands the Reach of the TCPA’s “Telephone Solicitation” Definition: Context Matters In Addition to Content

The Ninth Circuit recently held that calls and text messages can qualify as unlawful “telephone solicitations” under the Telephone Consumer Protection Act (“TCPA”) even when the message never explicitly pitches a product or service, so long as the company’s purpose in initiating the contact was to encourage a purchase. Coffey v. Fast Easy Offer, LLC, --- F.4th ----, 2026 WL 1614175 (9th Cir. 2026), is a cautionary tale for any business that relies on outbound calling or texting, lead-generation funnels, or “soft-touch” outreach. The court made clear that what matters is the purpose behind initiating the message, viewed in light of its full context — not merely whether the script contains an express sales pitch. For companies that utilize calls and texts for consumer outreach, the decision meaningfully broadens potential exposure and warrants a fresh look at outreach scripts and compliance practices.

The case arose from a putative class action brought by an Arizona resident who registered her personal cell phone number on the national “do not call” registry. The defendant is an Arizona-based real estate company that advertises itself as “a local real estate solutions company” that helps homeowners “find solutions to any problem.”

The plaintiff alleged that she received at least six calls and two text messages from defendant. The messages were short and did not expressly mention any service for sale. For example, one read: “Hello Vickey, this is Yannick the home buyer. Have you given up on selling your ... Gilbert, AZ 85297 property?” Another simply asked, “Have you given up on selling your property?”

The Ninth Circuit reversed the district court’s decision that these communications did not constitute telephone solicitations under the TCPA. The TCPA defines a “telephone solicitation” as “the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.” 47 U.S.C. § 227(a)(4). The Court focused on the “for the purpose of” language, holding that it modifies the “initiation of” the call or message. As a result, the Court held the relevant question is why the company initiated the contact, not whether the words of the message standing alone reveal a sales motive.

Coffey signals that companies cannot avoid TCPA liability simply by stripping express sales language out of their call and text scripts. Courts in the Ninth Circuit will look behind the words of a message to the company’s underlying purpose in initiating contact, informed by the broader business model and how leads are monetized. This has several consequences. Lead-generation and multi-step “funnel” outreach are potentially at risk. Soft, informational, or conversational openers (“Have you given up on selling your property?”) may still be solicitations if the initiation’s purpose is to drive recipients toward a paid product or service. As a result, scripts and text messages should be reviewed and assessed against the backdrop of the communication’s purpose, not just its content.

Quarles & Brady’s litigators bring deep experience helping companies navigate the TCPA and defend against consumer class actions across industries. Our team works closely with clients to develop proactive strategies — from auditing telemarketing and lead-generation programs and reviewing call and text scripts, to strengthening do-not-call compliance, managing vendor and affiliate risk, and defending TCPA class actions in federal court. If you have questions about the Coffey decision, need assistance evaluating your current outreach and consent practices, or want guidance on reducing TCPA class action exposure, please contact our team.

If you have any specific questions on this article, please contact your Quarles attorney:


Wisconsin Supreme Court Curtails Ability to Bring Damages Class Actions Under the Wisconsin Consumer Act

The Wisconsin Supreme Court held in a 6-1 decision in Gudex v. Franklin Collection Services, Inc., 2026 WI 6, that a plaintiff is precluded from filing a putative class action for damages under the Wisconsin Consumer Act (“WCA”) if the defendant offers an “appropriate remedy” to the named plaintiff. While this decision provides defendants with a powerful mechanism to avoid damages class actions, it does not apply to class actions seeking injunctive relief, and what must be provided to utilize the mechanism remains somewhat murky.

The WCA regulates consumer credit transactions and debt collection in the State of Wisconsin. The WCA contains a specific section which governs class actions brought pursuant to the WCA, Wis. Stat. § 426.110. This section states that at least 30 days before the commencement of a damages class action “any party” must notify the defendant and demand the defendant correct or remedy the basis for the plaintiff’s claim. Wis. Stat. § 426.110(4)(a). If, however, “an appropriate remedy,” which must include actual damages and may include penalties, is provided to “such party” then no class action under the WCA can proceed. Wis. Stat. § 426.110(4)(c).

At issue in Gudex was whether the “appropriate remedy” contemplated by the WCA must be provided to the entire class or only to the named plaintiff. Applying principles of statutory interpretation, the Court concluded that “any party” refers to any party seeking to commence the damages class action and, as a result, that “adequate remedy” need only be given to any party seeking to commence the action, not the entire class. Although this means a damages class action “may be stopped before it even begins,” the Court found “that is what the text plainly says and means.”

While the Court provided definitive guidance on who the “adequate remedy” must be provided to in order to obviate a damages class action, the Court did not address what constitutes an “adequate remedy.” While the statute provides some guidance as to what must and may be included, it remains unclear how courts are to ultimately assess the remedy’s adequacy, particularly if there is a dispute as to what the named plaintiff’s actual damages are.

In addition, the Court’s decision did not impact the ability to proceed in class actions seeking injunctive relief. The WCA explicitly exempts such actions from the notice requirement applicable to damages class actions. As a result, while defendants can avoid costly damages class actions by offering individual relief to the named plaintiff, the risk of suits seeking class-wide injunctive relief remain.

Quarles’ Class Action Defense Teams brings deep experience navigating complex class action litigation across industries, including WCA class actions. Our litigators work closely with clients to develop proactive strategies, from pre-suit risk mitigation to class certification opposition and trial, tailored to the ever-evolving legal landscape. If you have questions about the Gudex decision or need guidance on class action exposure under the WCA or related statutes, please contact our team.

If you have any specific questions on this article, please contact your Quarles attorney:


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