Consumer Protection: Class-action waiver enforced in MDL suit

Where the district court held that Marriott engaged in conduct inconsistent with the class-action bar when it agreed to MDL proceedings in Maryland, and thus implicitly waived reliance on that provision, it erred.

Background

This is the second time this court has reviewed the certification of plaintiff classes against Marriott International Inc., and Accenture LLP after hackers breached one of Marriott’s guest databases. This court previously held that the district court erred by certifying damages classes against Marriott without first addressing the effect of a contractual class-action waiver signed by all putative class members. But the court noted that the district court had questioned whether Marriott timely raised its class-action waiver defense, and left that issue to the district court on remand.

On remand, the district court again declined to enforce the class- action waiver. It did not address the forfeiture issue raised in the prior opinion. Instead, it held that by agreeing to multidistrict litigation in Maryland, Marriott engaged in conduct inconsistent with the class-action bar and thus implicitly waived reliance on that provision. And it suggested that the class-action waiver would in any event be unenforceable because it conflicted with Rule 23 of the Federal Rules of Civil Procedure.

Waiver

This court first finds that Marriott did not give up its right to invoke the class-action waiver in the SPG Contract by failing to properly raise and preserve that defense. Marriott invoked its class-waiver defense in its answer, and again in opposing class certification – precisely the stage at which a district court should consider the effect of a class-action waiver. Marriott also raised a class-waiver defense in its motion to dismiss, and during discovery it identified the SPG Contract’s class waiver, specifically, as the basis of that defense.

The district court instead held that Marriott’s participation in consolidated MDL proceedings was the very “antithesis” of its contractual agreement to handle cases “individually without any class action,” and thus precluded Marriott from relying on the class-action provision. This court disagrees. This provision is what the parties and courts have understood it to be all along: a class-action waiver. Even if the provision could be read as an overarching commitment to litigate only “individually,” participation in an MDL would not be incompatible with that commitment.

Next, because the same section of the SPG Contract that bars class litigation also provides for venue in New York and the application of New York law, the district court reasoned that Marriott, by agreeing to MDL proceedings in Maryland and to bellwether cases litigated under various state laws, waived reliance not only on the venue and choice-of-law provisions but also on the class-action provision.

But that reading is foreclosed by the plain terms of the SPG Contract, which includes a severability clause. So even if Marriott waived the venue or choice-of-law provisions, the “remaining” class-action waiver would “remain in force,” as the parties agreed. Nor does it seem to be the case, as the district court assumed, that Marriott did waive the venue and choice-of-law provisions through inconsistent conduct.

Finally agreeing to an MDL, agreeing to an MDL in Maryland and identifying bellwether claims to be tested under various states’ laws occurred before the plaintiffs moved in 2021 for class certification and identified the SPG Contract as the basis for their breach of contract claims. Neither the district court nor the plaintiffs has explained how Marriott could intentionally abandon a known right under the SPG Contract through actions taken before it knew the SPG Contract was at issue.

Rule 23

The district court relied on a magistrate judge’s 2009 decision for the proposition that Rule 23 precludes contractual waivers of class-wide litigation. But more recent law is to the contrary. The district court also hinted, almost as an aside, that the class-action waiver is invalid as unconscionable. If that is what the court intended, it is mistaken.

Merits

The class-action waiver here applies to “[a]ny disputes arising out of or related to the SPG Program or [the SPG Contract].” The plaintiffs do not dispute that their contract claims are covered by this provision. But they argued on remand that their consumer protection and negligence claims fall outside the provision’s scope. Given its broad “arising out of or related to” language, the class waiver here applies to the plaintiffs’ consumer-protection and negligence claims as well as their contract claims.

Accordingly, the district court’s recertification of the damages classes against Marriott are reversed. And because it remains the case that the issue classes against Accenture have been justified only in combination with the Marriott damages classes, the recertification of the Accenture classes are reversed also.

Reversed.

Maldini v. Marriott International Incorporated, Case Nos. 24-1064, 24-1065, June 3, 2025. 4th Cir. (Harris), from DMD at Greenbelt (Bailey). Matthew S. Hellman and Devin S. Anderson for Appellants. Samuel Issacharoff for Appellees. VLW 025-2-191. 26 pp.