Appeals Court Rules Courts Must Address Class Action Waivers Before Certifying Class

KEY TAKEAWAYS:

This is the first federal appellate opinion to make express what many defense practitioners have argued should be the universe rule. Moving forward, courts within the Fourth Circuit (and likely beyond), will need to address similar waivers before certification. As such, corporate defendants should keep in mind the litigation and cost-savings advantages class action waivers can often provide when appropriately incorporated into key consumer-facing contracts.

The Fourth Circuit recently vacated a class certification order in a significant customer data breach case, finding the district court erred by failing to first address the effect a class-action waiver (signed by class members) would have on certification. The holding and rationale of the opinion are likely to impact many consumer class-action suits going forward.