Chelsea Pieroni

It’s always important to read the fine print. In a win for class-action waivers, the Fourth Circuit recently issued an opinion ordering decertification of numerous classes, providing clarity both on the enforceability of class-action waivers and the kind of litigation conduct that might cause a defendant to forfeit such contractual protections. Maldini v. Marriott Int’l, Inc., 140 F.4th 123 (4th Cir. 2025).

A Data Breach Crisis Spurs Putative Class Actions Across the Nation

In 2016, the hotel chain Marriott purchased Starwood Hotels & Resorts Worldwide. Unfortunately, this purchase occurred when Starwood was dealing with a massive security breach.  In 2018, Marriott publicly announced that hackers had hacked the guest reservation database of Starwood, accessing personal information from over 130 million guest records. Of these millions of affected guests, some, but not all, were part of the “Starwood Preferred Guest Program” (or “SPG Program”).

Predictably, many hotel-goers filed suit, resulting in multiple putative class actions being filed around the country. The U.S. Judicial Panel on Multidistrict Ligation directed consolidation of pretrial proceedings, and the cases ultimately landed in the United States District Court for the District of Maryland, where Marriott was headquartered. At this juncture, the parties also agreed to a “bellwether” approach, testing state law claims under multiple states’ laws.

The plaintiffs asserted state-law contract claims and statutory consumer protection claims against Marriott, as well as state-law negligence claims against both Marriott and Accenture, a third-party IT services provider. At this stage, the parties “expressly agreed that ‘neither party was waiving any arguments it may have regarding choice of law and that each party is reserving its rights as to the same.’” 

When Marriott answered the complaint, after a failed attempt at getting it dismissed, it “did not seek enforcement of a specific-class waiver provision” because “[t]he plaintiff had yet to clarify which of the many contracts referenced in their complaint they would rely on for their breach claims.” Nevertheless, Marriott raised a general affirmative defense that the plaintiffs had waived the ability to pursue a class action. 

When the plaintiffs eventually moved for class certification, they zoned in on one particular contract: the SPG Program’s Terms and Conditions (or “SPG Contract”). The SPG Contract contained a clause “requiring that disputes ‘arising out of or related to’” the SPG Contract “be handled individually without any class action.”  

District Court Review Pt. 1:  Class-Action Waiver Question Left for Another Day

As one prerequisite for class certification, Federal Rule of Civil Procedure 23(a) requires that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” Marriott argued this typicality requirement was not met here because the named plaintiffs were part of the SPG Program, whereas unnamed plaintiffs were not.  

The district court agreed in part. To address the typicality concerns, the court redefined the class to only include SPG Program members. As a result, “now every proposed class member litigating against Marriott was someone who had purportedly given up the right to engage in just such class litigation.” However, the district court did not make a ruling as to the impact of the presence of the class-action waiver in the SPG Contract, deferring that issue for a later stage of litigation.  In a footnote, the court hinted that “Marriott might have forfeited reliance on the class waiver defense by raising it only in a ‘one-line, boilerplate affirmative defense.’” The district court thus certified various classes.

Fourth Circuit Appeal Pt. 1:  Class-Action Waiver Question Brought to the Forefront

After granting review, the Fourth Circuit vacated and remanded the district court’s order. The Fourth Circuit concluded that the district court erred in failing to consider the impact of the class-action waiver, signed by every putative class member, “before certifying class actions against Marriott.” Accordingly, the Fourth Circuit instructed the district court to address the class-action waiver on remand.

Additionally, the Fourth Circuit questioned the district court’s suggestion that Marriott had forfeited its ability to enforce the class-action waiver, noting that Marriott had raised this issue in its answer and at the class-certification stage. Thus, on remand, the district court was instructed to articulate how exactly this defense had been forfeited.

District Court Review Pt. 2:  Class-Action Waiver Not Enforced

On the second go-round, the district court expressly ruled that Marriott had forfeited enforcement of the class-action waiver. In the court’s view, the fact that the waiver required litigation to “be handled individually” meant that it barred not just class actions but “any collective handling of the claims.” Based on this interpretation of the SPG Contract, the district court concluded that pretrial consolidation of the nationwide lawsuits “was inconsistent with the promise to forgo any collective handling of claims,” and thus Marriott, by going along with consolidation, had forfeited that defense. 

Further, according to the district court, because the class-action provision was part of a greater section of the SPG Contract that included a New York choice-of-law and venue provision, Marriott had acted inconsistently by agreeing to pretrial consolidation in Maryland while applying a “bellwether” analysis of the state law claims. In the court’s view, Marriott could not forfeit part of that section (New York choice-of-law and venue) but enforce the other (waiver of class actions). 

Lastly, separate from its analysis of the SPG Contract’s waiver provision, the district court questioned the validity of any contract term that waives class actions. The district court suggested that class-actions waivers are rendered unenforceable in federal court because “parties cannot by agreement dictate that a district court must ignore” the class-certification provisions of Rule 23 of the Federal Rules of Civil Procedure.

A second petition for review ensued, which the Fourth Circuit granted once more.

Fourth Circuit Appeal Pt. 2:  Class-Action Waiver Enforced

The Fourth Circuit disagreed with the district court’s take on the class action waiver in all respects.

According to the Fourth Circuit, Marriott had not forfeited its right to invoke and enforce the class‑action waiver provision of the SPG Contract at all. Marriott brought up this defense at all the right times, namely, in its answer and in its opposition to the plaintiffs’ motion for class certification. Marriott had even raised the defense in its previous, albeit unsuccessful, motion to dismiss, and highlighted the existence of the waiver during discovery. Thus, according to the Fourth Circuit, despite the “complex and lengthy” nature of the proceedings, Marriott ticked all the right boxes and was not required to do more to preserve this defense. 

Next, the Fourth Circuit addressed the question of whether Marriott had acted inconsistently with the class-action waiver of the SPG Contract by engaging in the proceedings. It concluded that Marriott had not. 

First, the Fourth Circuit disagreed with the district court’s interpretation of the class-action waiver. The contractual language requiring litigation to be handled “individually” and “without any class action” did not extend to all collective litigation proceedings, such as pretrial consolidation—it was solely limited to class-action proceedings. “In short,” the Fourth Circuit stated, “this provision is what the parties and courts have understood it to be all along: a class-action waiver.” 

Second, the many putative class actions against Marriott still “remain[ed] separate”; they were only “temporarily brought together at the pretrial stage” and would be later “remanded back to their courts of origin at trial.”  Thus, regardless of the district court’s reading of the SPG Contract, Marriott had not acted inconsistently by participating in the consolidated pretrial proceedings.

Next, the Fourth Circuit disagreed with the district court’s statement that, if Marriott had acted inconsistently with part of the SPG Contract in which the class-action waiver was included—namely, by ignoring the choice-of-law and venue provision—then the entire contract had to be thrown out. This was due to the “plain terms” of the SPG Contract itself. Specifically, the SPG Contract contained a severability clause, allowing for any provision to be severed from the rest of the contract, without invalidating that section or the contract. 

Severability aside, the Fourth Circuit concluded that Marriott’s actions were not inconsistent with the choice-of-law and venue provision. Even though Marriott had agreed to the District of Maryland as the temporary venue for the consolidated pretrial proceedings, this did not alter or dictate venue for future proceedings once pretrial consolidation was over. But further, “both parties jointly and expressly reserved all choice-of-law arguments,” rendering this argument moot.

The Fourth Circuit also noted that all of the conduct that the plaintiffs found problematic as to Marriott “occurred before the plaintiffs moved . . . for class certification and identified the SPG Contract as the basis for their breach of contract claims.”  How could Marriott “intentionally abandon a known right under the SPG Contract through actions taken before it knew the SPG Contract was at issue[?]” Per the Fourth Circuit, that was simply not possible.

Finally, the Fourth Circuit rejected the district court’s notion that class-action waivers are unenforceable in federal court under Rule 23. Indeed, following the Supreme Court’s ruling in American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013), validating the notion of class-action waivers, multiple courts had enforced them throughout the years.

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In sum, the Fourth Circuit concluded that the SPG Contract’s class-action waiver was enforceable and Marriott had not forfeited this defense by participating in consolidated pretrial proceedings. The district court’s order was reversed, and the classes were ordered to be decertified. For the rest of us practitioners, the moral of the story is loud and clear—do not take class-action waivers for granted, lest your litigation strategy be derailed.