Enforceability of Contractual Class-Action Waivers in MDL Proceedings

Introduction

In Peter Maldini et al. v. Accenture LLP, 4th Cir. (June 3, 2025), the Fourth Circuit addressed for the second time whether a contractual class-action waiver—a term mandating that all disputes “be handled individually without any class action”—could be enforced against customers of Marriott’s Starwood Preferred Guest (“SPG”) Program, even after those cases were consolidated in a multidistrict litigation (“MDL”). The background is as follows:

• In 2018, hackers breached Marriott’s guest reservation database, compromising personal data belonging to some 133 million guests, including SPG Program members bound by SPG “Terms and Conditions.”
• Putative class actions alleging breach of contract, negligence, and consumer-protection claims were centralized in the District of Maryland under 28 U.S.C. § 1407. Accenture LLP, the IT vendor, was later added as a co-defendant.
• The SPG Contract’s Section 13.21 contains a three-part clause covering choice-of-law (New York), venue (New York), and a class-action waiver—requiring individual handling of disputes “without any class action.”
• On remand from the Fourth Circuit’s first decision (“Marriott I”), the district court held that Marriott had waived its right to enforce the class-action waiver by participating in the MDL, and also questioned whether Rule 23 barred such waivers.
• Marriott and Accenture appealed under Rule 23(f), and the Fourth Circuit reversed, vindicating the waiver and enforceability of SPG’s class-action provision and decertifying both the Marriott damages classes and the Accenture issue classes.

Summary of the Judgment

Judge Harris, writing for a unanimous panel, reversed the district court’s recertification of thirteen state-law damages classes against Marriott and two issue classes against Accenture. The Fourth Circuit held:

1. Marriott did not waive or forfeit its right to enforce the SPG Contract’s class-action waiver. Participation in MDL pre-trial coordination is fully consistent with a requirement to litigate each case individually.
2. The class-action waiver is valid under New York law and does not conflict with Rule 23 of the Federal Rules of Civil Procedure. Contractual class-action waivers are enforceable even outside the arbitration context.
3. The waiver covers all disputes “arising out of or related to” the SPG Program or Contract, including tort and consumer-protection claims, not just breach-of-contract claims.
4. The decertification of Marriott’s classes also undermines Accenture’s issue classes. Rule 23(b)(3)’s superiority requirement for narrow “issue” classes cannot be satisfied once the underpinning of the Marriott classes is removed.

Analysis

Precedents Cited

• Marriott I: In re Marriott Int’l, Inc., 78 F.4th 677 (4th Cir. 2023)—vacated class certification for failure to address the contractual waiver.
• American Express Co. v. Italian Colors Rest. (2013): Parties may waive class relief by contract without offending Rule 23.
• Lexecon Inc. v. Milberg Weiss (1998) / In re Korean Air Lines (2011): MDL consolidation does not merge separate cases into a single representative action.
• Am. Recovery Corp. v. Computerized Thermal Imaging (1996): Broad “arising out of or related to” language reaches tort claims as well as contract claims.
• Gillman v. Chase Manhattan Bank (1988): Contract is unconscionable only if “grossly unreasonable” under prevailing business norms.
• Convergys Corp. v. NLRB (5th Cir. 2017): Non-arbitration contracts may validly waive class actions.

Legal Reasoning

1. Waiver vs. Forfeiture: Marriott reiterated its class-action waiver in its answer, in a Motion to Dismiss, and in opposition to certification—meeting every procedural obligation. There was no forfeiture or surprising late-raised defense.

2. Inconsistent-conduct Waiver Theory Rejected: The district court’s view that MDL participation constituted a knowing relinquishment of the “handled individually” covenant conflicted with:

• The plain language of the SPG provision, which prohibits only class actions, not MDL coordination.
• Fourth Circuit authority confirming that MDL pre-trial consolidation preserves each case’s individual character.
• The SPG Contract’s severability clause, which insulates the class-action waiver even if choice-of-law or venue clauses were waived.

3. Enforceability under Rule 23: Consistent with American Express and subsequent decisions, a valid waiver of class remedies does not conflict with Rule 23’s certification process. Moreover, New York courts uniformly uphold class-action waivers as neither unconscionable nor against public policy.

4. Scope of “Arising out of or Related to”: Under Fourth Circuit and New York precedent, that broad phrasing encompasses not only breach-of-contract claims but also tort and consumer-protection claims tied to the same subject matter (the SPG Program and data breach).

Impact

• District courts must examine contractual class-action waivers before certifying any class, even in MDL settings.
• Participation in MDL pre-trial proceedings does not constitute a waiver of a contract’s promise to litigate individually “without any class action.”
• Broad “arising out of or related to” waivers will cover all claims—contractual, tort, statutory—stemming from the contract’s subject matter.
• Narrow issue classes under Rule 23(c)(4) face a steep uphill battle on superiority where remaining elements (injury, causation, damages) require separate individual trials.
• Data-breach MDLs may become less hospitable to class certification where end-user agreements contain clear class-action waivers.

Complex Concepts Simplified

• MDL (Multidistrict Litigation): A procedural device that centralizes pretrial proceedings of related cases in one court for efficiency, without merging cases into a single lawsuit.
• Forfeiture vs. Waiver: Forfeiture is failing to assert a right; waiver is intentionally giving up a known right.
• Rule 23(b)(3) Superiority: A class must be “superior” to individual suits when considering judicial economy, individual litigation costs, and the incentive problem of small claims.
• Issue Classes (Rule 23(c)(4)): Certification limited to specific elements (e.g., duty, breach) rather than the entire cause of action—a tool that often struggles on superiority grounds.

Conclusion

The Fourth Circuit’s decision in Peter Maldini v. Accenture LLP firmly establishes that:

1. Contractual class-action waivers are enforceable under federal and New York law, even in MDL contexts.
2. Participating in MDL pretrial proceedings does not waive a contractual promise to litigate disputes individually “without any class action.”
3. Broad “arising out of or related to” waivers reach all claims tied to the contract’s subject—contractual, tort, statutory alike.
4. Without viable damages classes against Marriott, narrow issue classes against Accenture cannot satisfy Rule 23(b)(3) superiority.

This ruling will guide lower courts to give full effect to class-action waivers in consumer and service-provider agreements and will shape the strategy of litigants and contract drafters in future class and MDL disputes.