Edelson Lechtzin LLP

Supreme Court Confirms Last-Mile Drivers Can Bypass Forced Arbitration Under FAA’s Transportation-Worker Exemption

2026-05-29T05:43:32Z

The Supreme Court holds last‑mile delivery drivers may avoid forced arbitration under the FAA’s Section 1 exemption. What this means for workers and employers.

Supreme Court Confirms Last-Mile Drivers Can Bypass Forced Arbitration

In a unanimous decision issued on May 28, 2026, the U.S. Supreme Court ruled that delivery drivers who move goods on the final, intrastate leg of an interstate journey can fall within the Federal Arbitration Act’s Section 1 transportation‑worker exemption—even if they never cross state lines or handle vehicles that do. The Court held that “[a] worker who transports goods on an intrastate leg of an interstate journey can qualify for §1’s exemption without crossing state lines or interacting with vehicles that do.” Flowers Foods, Inc. v. Brock, No. 24-935, 2026 WL 1485669, at *3 (U.S. May 28, 2026). The case arose from a wage-and-hour class action brought by a Flowers Foods distributor who picked up baked goods in Colorado and delivered them to local stores, all within the state. The Court affirmed the Tenth Circuit’s denial of Flowers Foods’ motion to compel arbitration, rejecting the company’s proposed bright-line rule requiring that exempt workers cross state lines or interact with vehicles that do. The decision resolves lingering questions following prior Supreme Court arbitration decisions, clarifying that last‑mile drivers delivering goods that traveled interstate may invoke Section 1’s exemption.

The Holding in Plain English

The FAA generally enforces arbitration agreements, but Section 1 excludes certain transportation workers “engaged in interstate commerce.” The question was whether local delivery drivers qualify when they only move goods within a single state. The Court said yes: if you are part of the continuous interstate flow of goods—from an out‑of‑state source to their intended in‑state destination—you can be “engaged in interstate commerce” even if your routes are intrastate. Relying on ordinary meaning and historical usage, the Court explained that “interstate commerce” includes continuous carriage between points in different states, much of which may occur within a single state. Flowers Foods, Inc., 2026 WL 1485669, at *4. The Court rejected Flowers Foods’ request for a categorical cross-border or vehicle‑interaction requirement, concluding the statutory text cannot support that rule.

Key Reasoning

Text and history: The Court emphasized that “engaged in interstate commerce” encompasses workers who play a direct, necessary, and active role in moving goods across borders, even during intrastate segments of a single continuous shipment. The opinion grounds its analysis in contemporaneous definitions and historical examples, recognizing intrastate segments as part of interstate commerce when the shipment’s journey spans multiple states. Prior decisions: The ruling builds on the Court’s recent Section 1 cases, confirming that the exemption is not limited to workers who themselves cross borders or to those in a formal “transportation industry” role, so long as their work is integral to the interstate flow of goods. The Court cited its prior holdings that Section 1 covers certain independent contractors and workers who do not themselves cross state lines, and it reiterated that what matters is a direct and necessary role in moving goods across borders. No bright-line “cross-or-tag” rule: The Court refused to adopt Flowers Foods’ proposed rule that a worker is exempt only if they cross state boundaries or handle vehicles that do. Instead, the Court held that, at least in some circumstances, workers who transport goods on intrastate last‑mile legs are exempt.

Why This Is a Win for Plaintiffs and Workers

This decision is a significant victory for workers—especially last‑mile drivers and others in the logistics chain—because it ensures that many misclassification and wage claims can be heard in court rather than forced into individual arbitration. Practical access to the courts: Workers delivering goods that traveled interstate can invoke Section 1 to avoid arbitration clauses and class‑action waivers, preserving the ability to bring collective wage‑and‑hour claims. The Court affirmed that last‑mile drivers transporting goods from out‑of‑state sources to local destinations can qualify as transportation workers “engaged in interstate commerce.” Strengthens misclassification cases: Companies frequently argue that local routes defeat the exemption. Not anymore. The focus is on whether the driver’s work is part of the continuous interstate movement of the goods, not on crossing state lines. Class and collective leverage: Without forced arbitration, plaintiffs can pursue Rule 23 and FLSA collective actions to address widespread practices and recover unpaid wages, overtime, deductions, reimbursement, and penalties at scale.

Implications for Wage-and-Hour and Last-Mile Driver Cases

Broader coverage of drivers in national supply chains: Drivers who perform in-state deliveries of goods that originated out of state are strong candidates for Section 1 coverage when they play a direct, necessary, and active role in the goods’ interstate journey. Case-by-case issues remain: The Court left open other potential arguments—such as whether a given agreement is a “contract of employment,” corporate form questions, title passage, or whether a product has reached its “intended destination.” Plaintiffs should develop factual records on how goods flow from out‑of‑state origins to end retailers, the integration of delivery routes with upstream logistics, and the driver’s role in that chain. The Court noted but did not decide issues that some lower courts consider relevant, including agreements with independently operated entities and whether drivers take title to products before resale.

What Workers Should Do If They Believe They Were Misclassified or Denied Wages

Act promptly: Wage claims are subject to statutes of limitations. Preserve pay records, route manifests, communications, and any agreements you signed. Assess arbitration clauses: Even if your agreement has an arbitration clause, you may fall within Section 1’s exemption if you deliver goods that traveled interstate and your work is part of their continuous journey. Consult experienced counsel: Speak with a plaintiffs’ employment firm that regularly litigates wage‑and‑hour and misclassification class and collective actions. An attorney can evaluate whether Section 1 applies to your situation and the best forum for your claims.

Edelson Lechtzin LLP’s Wage-and-Hour Advocacy

Edelson Lechtzin LLP represents workers nationwide in complex wage‑and‑hour class actions and FLSA collective actions. We have deep experience with misclassification and last‑mile logistics cases, aggressively pursuing unpaid wages, overtime, unlawful deductions, and expense reimbursements. We are committed to holding companies accountable in high‑stakes litigation and maximizing recovery for workers.

Call to Action

If you are a delivery driver, distributor, or logistics worker who believes you were misclassified or denied wages, contact Edelson Lechtzin LLP for a free, confidential consultation. Call us at [nap_phone id="TOLL-FREE-CT-NUMBER-1"] or email elechtzin@edelson-law.com. You can also reach us through our online form at HERE. We will evaluate your claims, explain your options, and fight for your rights.

Disclaimer

This post is for informational purposes only and does not constitute legal advice. Reading this post does not create an attorney‑client relationship. You should consult an attorney about your specific circumstances.

Eleventh Circuit Revives ERISA “Actuarial Equivalence” Case Against Southern Company—A Big Win for Pension Plan Participants

2026-05-28T07:21:44Z

In a published opinion, the U.S. Court of Appeals for the Eleventh Circuit reversed a Georgia federal district court’s 2024 dismissal of a proposed ERISA class action brought by retirees William Drummond and Richard Odom against Southern Company Services, the Southern Company Pension Plan, and its Benefits Administration Committee, and remanded for further proceedings. The panel held that ERISA’s “actuarial equivalence” requirement demands the use of reasonable, realistic mortality and interest-rate assumptions when converting a single-life annuity to a joint-and-survivor annuity, and that excessive charges for preretirement survivor benefits (“QPSA”) can violate ERISA’s nonforfeiture rules.

Why This Decision Matters

The Eleventh Circuit rejected the contention that plans may rely on any written actuarial assumptions—no matter how outdated—emphasizing that assumptions must be those a reasonable actuary would use at the time of the benefit determination. The court also concluded that plans cannot charge participants more for preretirement survivor annuity coverage than it reasonably costs to provide, and that excessive QPSA charges can constitute a prohibited forfeiture.

What the District Court Did

The district court granted a Rule 12(b)(6) motion and dismissed all four claims in the Second Amended Complaint, which included claims under ERISA’s actuarial equivalence and anti-forfeiture provisions and a fiduciary breach claim.

What the Eleventh Circuit Decided

The Eleventh Circuit held that “actuarial equivalence” is a term of art tethered to reasonable, realistic actuarial assumptions, and that using assumptions as much as decades out of date can plausibly render joint-and-survivor annuity payments less valuable than the earned single-life annuity. On the anti-forfeiture claims, the court concluded that converting a protected single-life annuity into a less valuable joint-and-survivor annuity can constitute a forfeiture, and that Section 1055(i) permits only QPSA charges that reasonably reflect the increased cost of providing that benefit. Accordingly, the court reversed the dismissal of all four claims and remanded.

How This Aligns with Other Developments

The panel noted alignment with the Sixth Circuit’s recent decisions reviving similar mortality table disputes and referenced actuarial materials discussed in a recent Supreme Court ruling to explain actuarial standards and practices.

What Happens Next

The case returns to the Northern District of Georgia for further proceedings, where plaintiffs may pursue their claims that outdated mortality assumptions reduced joint-and-survivor payments and that QPSA charges exceeded reasonable costs. Key Takeaways for ERISA Plan Participants - Actuarial equivalence has teeth: plans must use reasonable, realistic mortality and interest-rate assumptions when converting benefits.

Outdated mortality tables can plausibly shortchange married participants receiving joint-and-survivor annuities.
QPSA charges must reasonably reflect the cost of providing preretirement survivor coverage; excessive charges may violate ERISA’s nonforfeiture rule.
The Eleventh Circuit’s decision revives all claims and sends the case back to the trial court, signaling meaningful scrutiny of conversion factors and survivor-annuity charges.
The ruling aligns with other appellate developments scrutinizing unreasonable actuarial assumptions.

Practical Implications

Participants and retirees who elected joint-and-survivor annuities should consider whether their plan used outdated mortality tables or fixed conversion factors that reduce monthly payments compared with a single-life annuity. Participants who did not waive preretirement survivor coverage should review whether annual QPSA charges reasonably track the cost of that protection.

Edelson Lechtzin LLP’s ERISA Experience

Edelson Lechtzin LLP represents workers, retirees, and plan participants in complex ERISA and employee benefits litigation nationwide. We have deep experience challenging practices that reduce participants’ vested benefits and scrutinizing actuarial methodologies in high-stakes pension cases. We are committed to advocating for employees and retirees to help ensure they receive the benefits they have earned. Disclaimer: This post is for informational purposes only and does not constitute legal advice. Reading this post does not create an attorney–client relationship. You should consult an attorney about your specific circumstances. Contact Us: If you are a worker, retiree, or plan participant with questions about how your pension benefits were calculated or about survivor annuity charges, contact Edelson Lechtzin LLP for a confidential consultation. We are here to help evaluate your options and protect your rights.

ERISA Long-Term Disability (LTD) Lawyers Serving Pennsylvania, New Jersey, and New York

2026-05-27T05:09:16Z

Denied LTD benefits? Free consultation and denial letter review. No fee unless we recover. Serving PA, NJ, and NY. Call 866-359-0484 or elechtzin@edelson-law.com elechtzin@edelson-law.com.

What Is ERISA and Why Does It Matter for Your LTD Claim

ERISA is a federal law that sets rules for most private-sector, employer-sponsored benefit plans, including many long-term disability (LTD) plans. Employer-provided LTD plans are often governed by ERISA, while individual policies you buy yourself, as well as many government or church plans, are generally not covered by ERISA. When you file an LTD claim under an employer-sponsored plan, ERISA’s procedures govern how insurers process claims, issue denials, and handle appeals.

Why LTD Claims Get Denied or Terminated

Common reasons include: (1) Insufficient “objective evidence” tying your diagnosis to your inability to perform your job duties (insurers look for records like imaging, functional capacity evaluations, and detailed physician opinions). (2) Missing or incomplete forms, gaps in treatment, or failure to document your symptoms consistently with your doctors. (3) Insurers periodically re-evaluate approved claims and may rely on restrictive policy terms to terminate benefits.

Deadlines and Why Acting Quickly Is Critical

You typically have only 180 days from the date of your denial letter to file a formal administrative appeal. If you miss an appeal deadline, you may lose your right to pursue benefits or to bring a lawsuit later. After denial, you are entitled to request the complete claim file and should do so immediately. Insurance companies generally have 45 days to decide on an initial claim, with up to two 30-day extensions in some circumstances.

The Administrative Appeal Record Can Make or Break Your Case

The administrative appeal is often your last chance to add new evidence, because courts typically limit their review to what is already in the claim file if a lawsuit becomes necessary. ERISA cases are usually decided by a judge on the existing record, without a jury.

Evidence That Strengthens LTD Claims

To build the strongest possible record, we focus on: (1) comprehensive medical records, treating physician statements, and proof of your disability onset and last day worked; (2) Objective testing and assessments, such as imaging studies and functional capacity evaluations, that connect your condition to specific job limitations; (3) Consistent treatment and clear documentation of symptoms at every appointment; (4) Vocational analysis, symptom diaries, and additional specialized testing, as appropriate, to address the plan’s definition of disability.

Insurer Tactics and Conflicts

ERISA imposes restrictions that often favor insurers, including limited damages and no bad-faith claims, which can incentivize aggressive denials or terminations. Because there are no “extra” damages, such as pain and suffering or punitive damages, group LTD insurers do not face the same financial risk as in other contexts.

How Our ERISA LTD Attorneys Help at Every Stage

Initial Claim Filing: We guide you through the claim process and the core components typically required: your statement, your employer’s report, and your doctor’s Attending Physician’s Statement. We help gather medical and vocational evidence that aligns with your plan’s definition of disability and insurer expectations for objective proof. Administrative Appeal After a Denial or Termination: We request and review the insurer’s entire claim file, analyze every denial reason, and develop targeted rebuttal evidence rather than resubmitting the same materials. We treat the appeal as a “trial on paper,” adding all supporting documents before the record closes because courts often limit review to the administrative record. Litigation in Federal Court: After exhausting plan appeals, ERISA lawsuits typically proceed in federal court, without a jury, and with limited remedies focused on benefits owed. Courts frequently apply a deferential standard of review that could uphold an insurer’s decision if it had a reasonable basis, making a strong administrative record vital.

What To Do Immediately After Your LTD Denial

Read the denial letter carefully for the specific reasons and the appeal deadline.
Request your complete claim file from the insurer right away.
Continue all recommended medical care and ensure every limitation is documented at each visit. It is extremely important to keep seeing your doctors and to discuss all issues that prevent you from working at each appointment.
Do not simply resend the same records; build new, targeted evidence addressing each denial rationale. Resubmitting the same materials is a common mistake; a winning appeal requires new evidence tailored to rebut the insurer’s reasons.
Contact us promptly to meet your deadlines and strengthen your appeal.

Free Consultation, Free Denial Letter Review, and Contingency Fees

Edelson Lechtzin LLP offers a free initial consultation and can review your policy, claim, and denial documents. We handle ERISA LTD matters on a contingent basis, meaning there is no fee unless there is a recovery. Fees are typically paid by the insurance company when you are successful.

Serving Pennsylvania, New Jersey, and New York

Our ERISA long-term disability team helps claimants across PA, NJ, and NY with initial claims, appeals, and litigation. Call 866-359-0484 or elechtzin@edelson-law.com to get started today.

Why Choose Edelson Lechtzin LLP

Experience you can trust.
Deep ERISA focus. We know how insurers evaluate claims and how to build persuasive administrative records.
Client-first model. Free consultation and free denial letter review; no fee unless we recover.
Regional reach. Serving Pennsylvania, New Jersey, and New York.
Clear communication. Plain-English guidance at every step.

Frequently Asked Questions

Does ERISA apply to my employer-sponsored LTD plan? If your LTD coverage is through a private-sector employer, it is likely governed by ERISA, while many government, religious, and individually purchased policies are not.
How long do I have to appeal my LTD denial? In most cases, you have 180 days from the date you receive the denial letter to submit a formal administrative appeal.
What evidence does the insurer want to see? Insurers typically look for objective evidence—detailed medical records, physician statements, and testing like functional capacity evaluations—showing why you cannot perform your job.
Can I sue right after a denial? No, ERISA benefits claims usually require you to exhaust internal appeals before filing a lawsuit in federal court.
Will a jury decide my ERISA case? No, ERISA benefits cases are generally decided by a judge based on the administrative record.
Can I recover pain and suffering or punitive damages? No, ERISA limits remedies to benefits owed under the plan and does not allow extra-contractual or punitive damages.
How long will the insurer take to decide my initial claim? Insurers generally have 45 days, with up to two 30-day extensions when justified.
What is the biggest mistake after a denial? Resubmitting the same materials instead of adding targeted new evidence addressing each reason for denial.
Why hire an ERISA LTD attorney early? Because the appeal record is often the only evidence a court will review later, building a complete, strategic file from day one is critical.

Take the Next Step

Call Edelson Lechtzin LLP at 866-359-0484 or elechtzin@edelson-law.com [elechtzin@edelson-law.com] for a free consultation and free denial letter review. No fee unless we recover. Serving clients throughout Pennsylvania, New Jersey, and New York.

About Our LTD Practice

We help clients in the mid-Atlantic region and beyond file claims, gather medical and vocational evidence, handle appeals, and, when necessary, litigate ERISA LTD cases. We will walk you through each step, help you collect key medical records and physician statements, and submit the required paperwork on your behalf. Contact us as soon as possible after a denial to preserve your rights and avoid missing critical deadlines.

Edelson Lechtzin LLP Files WARN Act Class Action for Spirit Airlines Employees After Sudden May 2 Shutdown

2026-05-20T04:27:39Z

Proposed class seeks back pay and benefits for roughly 17,000 workers allegedly laid off without the required advance notice Edelson Lechtzin LLP has filed a proposed class action adversary complaint in the U.S. Bankruptcy Court for the Southern District of New York on behalf of former Spirit Airlines employees following the carrier’s abrupt cessation of operations on May 2, 2026. The lawsuit alleges that Spirit failed to provide the 60-day advance written notice required by the federal WARN Act and seeks relief, including 60 days’ pay and benefits for affected workers.

What happened

According to the complaint, Spirit’s CEO informed employees via mass email on May 2, 2026, that the company would “cease operations immediately,” leaving approximately 17,000 employees suddenly without jobs or benefits. The pleading further alleges that employees have not received final paychecks, accrued vacation, or unused sick time, despite assurances that they would be paid for hours worked through May 2. The action was filed in Spirit’s Chapter 11 case, captioned In re Spirit Aviation Holdings Inc., No. 25-11897 (Bankr. S.D.N.Y.), on May 12, 2026.

What is the WARN Act?

The Worker Adjustment and Retraining Notification (“WARN”) Act is a federal law that generally requires certain employers to provide 60 days’ advance written notice before mass layoffs or plant closings. If adequate notice is not given, the statute may allow affected employees to seek up to 60 days of pay and benefits. This overview is general information only and not legal advice; specific rights and obligations can vary based on the facts and applicable law.

Key allegations and why does this filing matter?

Plaintiffs allege Spirit failed to provide the 60-day advance written notice required by the WARN Act before terminating nearly its entire workforce on May 2, 2026. They seek recovery of wages and ERISA-covered benefits for a 60‑day period, including compensation for accrued sick and vacation time, health and medical benefits, retirement contributions, and related relief available in the bankruptcy case. The complaint cites prior internal assurances as recently as April 16, 2026, that Spirit would continue operating and that employees should disregard shutdown rumors. The filing also references Spirit’s wind‑down proposals in bankruptcy, including up to $10.7 million in retention payments for non‑management employees and a separate bonus plan for senior executives tied to the liquidation process.

Who is covered by the proposed class?

The proposed class is defined as all former employees of Spirit who were terminated as part of, or as the reasonably foreseeable result of, the mass layoff ordered on or about May 2, 2026. Named plaintiffs include employees from multiple roles—a DOT compliance specialist, software engineers, a senior maintenance planner, a heavy maintenance project manager, and a flight attendant—reflecting the broad reach of the layoffs. The complaint alleges that approximately 17,000 employees were affected.

What can employees do next?

Preserve documents: save offer letters, pay stubs, benefits statements, schedules, company emails/texts, and any WARN or layoff notices.
Keep contact information current: if you believe you are part of the proposed class, ensure your mailing and email addresses are up to date.
Contact our team: use the information below to request a confidential review.

Disclaimer: This post provides general information and is not legal advice. Reading it does not create an attorney‑client relationship. You should consult an attorney about your specific situation.

Eric Lechtzin Appointed To Plaintiffs’ Executive Leadership In In Re Class Action Settlement Administration Litigation (MDL No. 3162)

2026-04-10T13:44:34Z

Judge Bates Appoints Eric Lechtzin, Co-Founder of Edelson Lechtzin LLP, to Plaintiffs’ Executive Leadership in In re Class Action Settlement Administration Litigation (MDL No. 3162)

Edelson Lechtzin LLP announces that Eric Lechtzin, Managing Partner of the firm, has been appointed to the Plaintiffs’ Executive Committee in the multidistrict class action, In re Class Action Settlement Administration Litigation, pending in the U.S. District Court for the District of Columbia before Judge John D. Bates. Judge Bates appointed a four-member Executive Committee chaired by David Boies and designated Christopher Seeger as Plaintiffs’ Lead Counsel. These leadership appointments were issued on April 9, 2026, in Misc. A. No. 25-179 (JDB), MDL No. 3162, and apply to all cases within the MDL. This appointment underscores the significance of the litigation, which consolidates actions involving common questions concerning settlement administration practices. The Judicial Panel on Multidistrict Litigation has transferred multiple related actions to the District of Columbia for coordinated pretrial proceedings and assigned them to Judge Bates under MDL No. 3162. Mr. Lechtzin and Edelson Lechtzin LLP have played a leading role in advancing the claims central to this MDL. Edelson Lechtzin LLP originated the litigation and filed the first complaint against settlement administrators and fintech companies on April 24, 2025, after a months-long investigation, and subsequently filed an amended complaint on June 13, 2025, with Seeger Weiss LLP as co-counsel. Edelson Lechtzin LLP also filed the MDL petition on August 13, 2025, seeking transfer and consolidation of related cases before the present Court. “The Court’s leadership structure positions the Plaintiffs to prosecute this case efficiently and effectively,” said Mr. Lechtzin. “I am honored to serve on the Executive Committee and to work with Mr. Seeger, Mr. Boies, and our colleagues in this important matter.”

About Edelson Lechtzin LLP

Edelson Lechtzin LLP is a national class action firm founded in 2020, based in suburban Philadelphia, with established practices in securities fraud and corporate governance, ERISA fiduciary litigation, wage and hour class actions, and data privacy. Mr. Lechtzin has served in leadership roles across numerous complex class actions and MDLs and is supported by a seasoned team with the professional and financial resources to prosecute high-stakes litigation.

Asserting shareholder rights during major business transactions

2025-12-30T20:12:20Z

Business owners and executives have a legal duty to the shareholders who have invested in a particular organization. They have a fiduciary duty, the highest legal obligation enforceable by the courts.

Those operating businesses must act in the best interests of shareholders and the company itself. In some situations, prospective changes within the organization can lead leaders to fail to fulfill their fiduciary duty.

Major business transactions, including mergers, acquisitions, and attempts to go private, can result in losses for investors in the business. Shareholders may need support in protecting themselves and their interests in a company when significant transactions are underway.

How mergers and acquisitions affect shareholders

When one business seeks to acquire another company or merges with an existing one, those changes can affect existing investors. There may be attempts to reduce the price of existing shares to acquire them as cheaply as possible and facilitate a change in ownership.

At other times, a merger with another business could reduce the value of existing shares. In both scenarios, shareholders may need to closely monitor each stage of the transaction to avoid losing their investment capital due to events during a merger or acquisition. If shareholders notice any warning signs of attempts to reduce the value of their holdings or freeze them out, they may need to act promptly to protect their financial interests.

How going private affects shareholders

Going private typically eliminates outside shareholders. A leader or investor seeking to take the company private may make strategic moves to reduce the price they must pay for outstanding shares.

Those moves may violate their fiduciary duty to existing shareholders. Efforts to buy out shareholders at below fair market value can result in unfair losses for shareholders who invested when the company was small or not yet profitable. Shareholders shouldn’t have to accept large losses, especially as part of a transaction intended to enrich someone who currently has a fiduciary duty to them.

Those who have invested in a company and now worry that their investments are vulnerable may need assistance as they take action and demand accountability from executives and majority shareholders. Working with a business law attorney to address breaches of fiduciary duties and other matters related to business transactions can protect shareholders and the capital they’ve invested.

JPML Grants Edelson Lechtzin LLP’s Petition to Centralize Settlement Administration Kickback Litigation in the District of Columbia

2025-12-19T21:19:49Z

Edelson Lechtzin LLP is pleased to report that the Judicial Panel on Multidistrict Litigation (JPML) has granted the motion filed on behalf of our clients in the first-filed Baker action1 to centralize the settlement administration kickback lawsuits and transfer the actions to the U.S. District Court for the District of Columbia for coordinated pretrial proceedings before Judge John D. Bates. The JPML ordered that five actions pending across four federal districts be transferred to the District of Columbia and assigned to Judge Bates for coordinated or consolidated pretrial proceedings. The Panel concluded that these actions share common factual questions regarding alleged schemes by settlement administrators and banks involving settlement funds, and that centralization will promote the just and efficient conduct of the litigation.

Significance of the Decision

The Panel found that centralization will eliminate duplicative discovery, prevent inconsistent pretrial rulings (particularly on class certification), and conserve resources of the parties, counsel, and the judiciary. In selecting the District of Columbia, the Panel cited the district’s very light MDL docket, its capacity and convenience, and Judge Bates’s extensive experience with class actions and multidistrict litigation The Panel also declined requests to separate and remand so‑called “digital payment kickback” allegations, determining that breaking the litigation apart was not warranted because the actions arise from a common factual core and involve overlapping defendants and witnesses

Impact on the Cases

The centralized docket encompasses actions originally filed in the Northern District of California (Whalen; Rieger), the Southern District of Florida (Tejon), the Southern District of New York (Whalen), and the Eastern District of Pennsylvania (Baker). The Panel determined that these actions raise factual questions regarding the alleged diversion of settlement deposits to banks in exchange for kickbacks in the form of interest and investment earnings that would otherwise have been distributed to class members or used to reduce administration costs. The complaints seek to represent substantially similar nationwide classes and assert similar federal antitrust, RICO, and common‑law claims. Following centralization, once a consolidated complaint is filed, defendants will have 50 days to respond.

Background of the Allegations

The lawsuits allege that three leading settlement administration companies—Epiq Systems Inc., Angeion Group, and JND Legal Administration—worked with Huntington National Bank and Western Alliance Bank in a kickback scheme involving settlement funds. Plaintiffs allege that the administrators control over 65% of the settlement administrator market and that the two banks control more than 80% of class action settlement funds. Edelson Lechtzin LLP’s proprietary Baker action, filed in the Eastern District of Pennsylvania, further alleges that administrators conspired with digital payment providers—Tremendous LLC, Blackhawk Network Holdings Inc., and Digital Settlement Technologies—to share portions of “breakage” from unredeemed or unclaimed digital payments.

Statement from Edelson Lechtzin LLP

The JPML concluded that centralization in the District of Columbia will streamline proceedings and avoid duplicative discovery and scheduling conflicts, expressing confidence that Judge Bates will steer the litigation on a prudent and expeditious course. “We are pleased that the Panel has recognized the benefits of consolidating the pretrial phase of this litigation in the D.C. District, which will promote the efficient adjudication of this matter,” said Eric Lechtzin. If you received a digital payment in a class action settlement and would like further information about participating in the case, In Re: Class Action Settlement Administration Litigation, MDL No. 3162 (D.C. District), please contact attorney Eric Lechtzin at 215-867-2399 ext. 1, or by email to elechtzin@edelson-law.com.

What the SEC’s forced arbitration shift means for investors

2025-12-17T16:55:25Z

The Securities and Exchange Commission (SEC) recently changed its policy on mandatory arbitration clauses. This is a major development for investors across the country. The change affects how shareholders can pursue fraud or misconduct claims against companies whose securities they own. Law firms such as Edelson Lechtzin LLP are monitoring how this will affect retail investors.

The policy reversal explained

For years the SEC discouraged companies from adding mandatory arbitration clauses. It did so by refusing to speed up approval of a company’s registration statement, which is a necessary step for an initial public offering (IPO). But on September 17, 2025, the SEC announced a new, neutral position. First, it said mandatory arbitration clauses do not conflict with federal securities laws. Second, such clauses will no longer affect whether the agency accelerates a registration statement. In short, the SEC removed a key obstacle that had stopped many companies from forcing investors to use private arbitration instead of heading straight to court.

How the shift affects retail investors

The policy change has significant effects for individual investors who face potential corporate misconduct. Here are some examples:

Loss of the securities class action: Many arbitration rules force each investor to sue alone. This process often costs more than the money a small investor lost, so most of them end up not filing claims.
Reduced transparency: Arbitration is private, so hearings and decisions stay out of the public record. Other investors and regulators may never learn about the problem and companies face less pressure to stop wrongdoing.
Fewer procedural protections: In arbitration it is harder to get documents and witnesses, and there is little chance to appeal undesirable results. That makes proving complex fraud much more difficult.

These changes may make it harder for retail investors to obtain compensation and to hold issuers publicly accountable.

What investors should do next

The SEC’s decision does not automatically allow every company to force investors into arbitration. State corporate law, such as the Delaware law, still controls what companies may include in their bylaws. The change does make it easier for newly public companies to add arbitration clauses. Investors should check a company’s bylaws and offering documents to see whether they would give up the right to sue in court. If they are unsure, investors should seek legal guidance to evaluate the practical impact of these provisions before making investment decisions.

Edelson Lechtzin LLP Leads the Charge Against Secret Kickbacks in Class Action Settlement Administration

2025-12-01T13:40:02Z

[nap_names id="FIRM-NAME-1"] is at the forefront of groundbreaking litigation exposing alleged secret “kickbacks” and revenue-sharing payments tied to digital prepaid cards used in class action settlements. In April 2025, the firm filed the first case alleging that settlement administrators secretly augmented their compensation through rebates and “breakage” arrangements with fintech and banking partners, concealing the payments from courts, class counsel, and class members.

The First Case to Allege Secret Digital-Payment Kickbacks

In Baker v. Angeion Group LLC et al., Case No. 2:25-cv-02079, filed in the Eastern District of Pennsylvania, Edelson Lechtzin LLP alleged that settlement administrators received undisclosed revenue-sharing payments from issuers of digital cards (including open- and closed-loop products), funded by “breakage” and related rebates associated with unredeemed or partially redeemed balances. The Class Action Complaint asserts that settlement administrators formed special purpose entities to conceal these payments, depriving classes of funds that should have reduced administration costs or been returned to class members. Those allegations have resonated with growing public scrutiny of digital prepaid card practices in class actions, including reports of inactivity fees and undisclosed rebates that can divert significant value from class members.

Strategic Leadership: Motion to Transfer and Centralize Related Actions

Building on its early leadership, Edelson Lechtzin LLP co-led a Multidistrict Litigation (“MDL”) motion to transfer and centralize overlapping cases that challenge the same undisclosed compensation scheme across administrators, fintech issuers, and banking partners. Plaintiffs moved to centralize the litigation in the Eastern District of Pennsylvania—where the first-filed Baker case is pending before Judge Kelley Brisbon Hodge—or, alternatively, in the Southern District of New York, to ensure efficiency, consistency, and convenience for parties and witnesses. That MDL effort now spans nine related federal actions filed from April through mid-November 2025, reflecting substantial overlap of defendants, factual allegations, and legal claims—including antitrust, RICO, fiduciary duty, fraud, negligence, and unjust enrichment theories.

Broad Support for Centralization; E.D. Pa. as the Center of Gravity

Responses to the MDL motion reflect widespread support for consolidation, with numerous defendants endorsing transfer but contesting the choice between the Eastern District of Pennsylvania and the Southern District of New York. The movants emphasized that E.D. Pa. is the site of the first-filed, comprehensive case; is proximate to Defendant Angeion’s headquarters; and offers favorable docket conditions and MDL experience, with Judge Hodge presiding over the Baker action. In the reply briefing, the movants urged the Panel to reject proposals to bifurcate “breakage”/digital card issues from antitrust and bank-related claims, demonstrating a common factual core among administrators, fintechs, and banks, and underscoring the efficiencies of centralized proceedings.

Why Centralization Matters

Eliminates duplicative discovery and inconsistent rulings on overlapping nationwide class claims.

Places common witnesses, documents, and contracting practices before one court for coordinated pretrial management.

Aligns venue with corporate footprints and accessible transportation, including Angeion’s Philadelphia headquarters and multiple defendants’ East Coast presence.

Growing National Attention

Media and congressional scrutiny have intensified around digital prepaid settlement distributions, including reports of rebates, inactivity fees, and non-disclosure of how much money reaches class members—further highlighting the importance of transparency and judicial oversight that this litigation seeks to advance.

The Path Forward

Edelson Lechtzin’s early filing and sustained leadership have positioned the firm to drive industry-wide reforms through centralized litigation focused on undisclosed compensation and conflicts in settlement administration. By championing transfer and consolidation in the Eastern District of Pennsylvania—or alternatively the Southern District of New York—the firm seeks efficient, consistent adjudication that prioritizes transparency, fiduciary obligations, and recovery for class members. If you have questions about these developments or potential implications for ongoing or future settlements, please contact Eric Lechtzin of Edelson Lechtzin LLP by calling 844-563-5550 ext. 1, or via e-mail at elechtzin@edelson-law.com.

Selecting lead plaintiffs and counsel under PSLRA

2025-12-01T20:07:41Z

The Private Securities Litigation Reform Act (PSLRA) sets rules for appointing the most adequate plaintiff in federal securities fraud class action lawsuits. Generally, the investor or small group of investors who have the largest financial interest in the litigation is the presumptive lead plaintiff. Institutional investors often qualify to lead securities fraud class actions because they have large financial losses. Choosing the right lead plaintiff affects case strategy. It also shapes potential recoveries and key decisions in markets such as New York, California, and Philadelphia.

How do courts determine the most adequate plaintiff?

Under the PSLRA Plaintiff provision, a court must pick the investor or a small group of investors with the largest financial loss. This investor should also be able to represent the class fairly. Judges review whether the investor can supervise counsel and whether the investor has no conflicts of interest. Institutional investors, such as pension funds, often receive preference because courts view them as having the resources and experience needed to manage complex litigation.

Step-by-step process

The PSLRA creates a structured process for choosing a lead plaintiff and the lawyers who will represent the class. Each step helps the court identify who can best guide the case.

A plaintiff publishes a notice after filing the complaint.

Class members may move to be appointed lead plaintiff.

The investor with the largest loss is presumed adequate.

Others may challenge that presumption.

The court appoints the lead plaintiff and the lead counsel.

These steps ensure that the investor with the strongest stake and capacity to lead will manage the case.

PSLRA notice requirements

The PSLRA requires a plaintiff to publish a public notice to the class no later than 20 days after filing a securities fraud complaint. This notice informs potential plaintiffs of their right to move for lead plaintiff status. Class members then have 60 days from that publication to submit a motion to serve as lead plaintiff. Missing that 60‑day window disqualifies an investor from consideration.

Selecting lead counsel and managing timing

Once appointed, the lead plaintiff has the authority to select counsel, subject to court approval. Courts review the counsel’s experience, staffing, and prior results before granting this. Timing is important. Complaints, notices, and motions must meet all statutory deadlines. An experienced legal counsel can help investors protect their stake and guide outcomes efficiently.