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Marriott Can’t Use Class Waiver To Block Cert. In Breach Row


December 1, 2023

A Maryland federal judge has reinstated certification for several classes of consumers suing Marriott and its information technology provider over a massive data breach at the hotel’s Starwood-branded properties, finding that Marriott’s response to the litigation has been “wholly inconsistent” with its argument that guests had agreed to pursue their claims individually.

U.S. District Judge John Preston Bailey’s ruling, issued Wednesday, came in response to the Fourth Circuit in August vacating an earlier district court order certifying eight classes of potentially millions of Marriott International Inc. customers who are pressing claims that the hotel and its IT provider, Accenture LLC, failed to take reasonable steps to protect personal information exposed in a 2018 data breach that affected roughly 133 million Starwood guests in the U.S.

In doing so, the appellate court found that the district court had not properly considered the “effect” on class certification of a “choice of law and venue” clause in a Starwood guest rewards contract that the members of the damages class had signed and remanded the dispute to the lower court for further consideration of this issue.

Judge Bailey undertook this task in his latest order, concluding that Marriott had “waived any benefit from its Choice of Law and Venue provision” through both its “inaction and action” during the course of the case and that, even if the provision weren’t waived, the contest agreement was “ineffective to override the court’s discretion” to certify a class or consolidate proceedings in order to promote judicial efficiency.

The judge’s decision to reinstate the previously-certified classes hinged on his interpretation of the alleged “class waiver” in the contract that Starwood Preferred Guest Program members signed. That clause stated that any disputes arising out of the agreement would be “handled individually without any class action,” would be governed by New York law and be litigated exclusively in New York courts.

In concluding that Marriott waived this provision, Judge Bailey raised several issues, including that Marriott had requested that all the cases filed over the breach be consolidated in multidistrict litigation and it had not objected to the dispute being heard in Maryland federal court.

“An MDL is the antithesis of handling each claim on any individual basis,” Judge Bailey found, adding that Marriott’s request that the litigation be assigned to a judge in Maryland was also “wholly inconsistent with the Choice of Law and Venue provision’s requirement that the dispute be filed in New York.”

Additionally, Marriott had backed the parties’ joint suggestion that they select 10 bellwether cases to test the sufficiency of the pleadings, with each claim being keyed to the law of a particular state, a move that “again … is wholly inconsistent with handling cases on an individual basis, in New York, applying only New York law,” according to Judge Bailey.

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Judge Grimm issued another order in May 2022 certifying eight classes for monetary damages, negligence and other liability issues that covered potentially millions of impacted guests spanning six states, which the Fourth Circuit vacated in August and Judge Bailey reinstated in full on Wednesday.

The consumers are represented by Amy Keller of DiCello Levitt LLC, Andrew N. Friedman of Cohen Milstein Sellers & Toll PLLC, James Pizzirusso and Megan Jones of Hausfeld LLP, Jason L. Lichtman and Sean A. Petterson of Lieff Cabraser Heimann & Bernstein LLP, Norman E. Siegel and Kasey Youngentob of Stueve Siegel Hanson LLP, MaryBeth V. Gibson of The Finley Firm, Timothy Maloney and Veronica Nannis of Joseph Greenwald & Laake PA, Gary F. Lynch of Lynch Carpenter LLP, James Ulwick of Kramon & Graham PA, Daniel Robinson of Robinson Calcagnie Inc. and Ariana J. Tadler of Tadler Law LLP.

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