Gibbons Law Alert

Gibbons Law Alert

Author: Gibbons P.C.

Supreme Court Limits American Pipe Tolling, Holds Tolling Does Not Apply to Successive Class Actions

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Posted in Class Action Defense

On July 2, 2018

The Supreme Court has acted to ensure that the class action device cannot be used to indefinitely extend the statute of limitations, holding in China Agritech, Inc. v. Resh that American Pipe tolling does not apply to successive class actions. American Pipe tolling dates to 1974, when the Supreme Court held that the filing of a class action tolls the statute of limitations for absent class members who seek to intervene after the court has denied class certification. Nine years later, in Crown, Cork & Seal, the Supreme Court extended the rule to toll the statute of limitations for absent class members who choose to file their own individual actions. Resolving a split amongst the Circuits, the Supreme Court held that American Pipe tolling does not apply where class certification is denied and a class member subsequently seeks to bring a new class action after the expiration of the statute of limitations. The Court opined that the “efficiency and economy of litigation” that underpin the American Pipe rule do not support tolling for successive class actions. Rather, the Court determined, barring tolling in such situations will promote efficiency by requiring all litigants who wish to act as class representatives to come forward early on so that the Court can select the best representative among them. Moreover,...

Supreme Court Expands the Scope of Damages to Include Foreign Sales

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Posted in Patent

On June 28, 2018

The Supreme Court in WesternGeco LLC v. ION Geophysical Corp. opened a new door to recover for patent damages in its holding that a patent owner can recover damages for patent infringement under 35 U.S.C. §271(f)(2) and §284 of lost foreign profits. The Patent Act outlines several ways an alleged infringer may be liable for patent infringement, including §271(f) which “expands the definition of infringement to include supplying from the United States a patented invention’s components.” 35 U.S.C. §284 authorizes “damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer.” In this case, WesternGeco developed technology for surveying the ocean floor for oil and gas companies. ION Geophysical Corp. sold a competing system where the components were manufactured in the United States and shipped abroad. The Southern District of Texas found that ION Geophysical Corporation infringed WesternGeco’s patents, and that WesternGeco lost specific contracts due to ION’s infringement. The district court awarded $93.4 million in lost profits and $12.5 million in royalties. On appeal, the Court of Appeals for the Federal Circuit reversed the award of lost-profit damages following its precedent in Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F. 3d 1348 (Fed. Cir. 2013) which held that...

Senator Hatch Proposes Legislation Forcing Challengers to Choose Between Filing a Hatch-Waxman Action or Filing an IPR

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Posted in Patent / USPTO

On June 25, 2018

On June 13, Senator Orrin Hatch, co-author of the Hatch-Waxman Act, proposed an amendment in the Senate Judiciary Committee to modify the inter partes review (“IPR”) process for pharmaceuticals. The senator published a press release summarizing and explaining the proposed legislation. The amendment, titled the Hatch-Waxman Integrity Act of 2018, intends to “restore the careful balance the Hatch-Waxman Act struck to incentivize generic drug development” by “prevent[ing] alternative procedures for challenging drug patents from tilting the playing field contrary to Hatch-Waxman’s design.” The proposed legislation would amend Sections 505(b)(2) and 505(j)(2)(A) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §§ 355(b)(2) and 355(j)(2)(A) respectively) to require the applicant to certify to the FDA that “neither the applicant nor any party in privity with the applicant, has filed, or will file, a petition to institute inter partes review” in order to be eligible for abbreviated regulatory approval under the Hatch-Waxman Act. The applicant would further need to certify that it “is not relying in whole or in part on any decision issued by the Patent Trial and Appeal Board in an [IPR]” in making the certification that the relevant listed patent is invalid or will not be infringed. According to Senator Hatch, the impetus for the proposed amendment is that IPRs are “producing unintended consequences in...

Access Denied: NJ Appellate Division Clarifies Shareholder’s Right to Inspection of Corporate Records

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Posted in General Litigation

On June 25, 2018

In R.A. Feuer v. Merck & Co., Inc., the New Jersey Appellate Division, in a to-be-published opinion, narrowly construed the scope of a shareholder’s right to inspect a corporation’s records under N.J.S.A. 14A:5-28 and the common law. A Merck & Co, Inc. shareholder appealed from the dismissal of his complaint seeking various corporate records, including twelve broad categories of documents. The shareholder sought evidence that Merck acted wrongfully in its acquisition of another pharmaceutical firm. After Merck appointed a working group to assess the shareholder’s concerns, the shareholder requested documents pertaining generally to the working group’s activities, communications, and formation; documents provided to the board regarding the target pharmaceutical firm and two of its drugs; and the board’s considerations of the shareholder’s demands and the working group’s recommendation. Merck disclosed pertinent minutes of the board and of the working group, but denied the remainder of the shareholder’s demand. The trial court determined that the shareholder’s demand exceeded the scope of the “books and records of account, minutes, and record of shareholders,” which the shareholder had a statutory right to inspect and that the common law did not expand that statutory right. The Appellate Division affirmed, narrowly construing the plain language of N.J.S.A. 14A:5-28(4). According to the court, “minutes” refers to “shareholder, board, and executive committee...

Gibbons Attorneys Author Article Featured in New Jersey Law Journal

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Posted in General Litigation

On June 22, 2018

Frederick W. Alworth and Jonathan S. Liss, Directors in the firm’s Commercial & Criminal Litigation Department, published the following article in the June 18 issue of the New Jersey Law Journal, after a recent decision by the New Jersey Superior Court Appellate Division made it more difficult for shareholders to challenge corporate actions in New Jersey. Is this part of a trend toward making New Jersey more business friendly? The full article can be found here.

Superfund Task Force Recommendation 23 Listening Session: Informing Parties About Streamlining the Cleanup and Redevelopment Process

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Posted in Development/Redevelopment / Environmental and Green Issues

On June 18, 2018

The Environmental Protection Agency (“EPA”) held a listening session concerning the Superfund Task Force (“Task Force”) Recommendation 23 on June 13, 2018. Recommendation 23 focuses on tools designed to assist parties interested in redevelopment of contaminated sites. The EPA created the Task Force in May 2017, which is comprised of senior representatives from various EPA offices associated with Superfund policy and enforcement. The Task Force intends to streamline and strengthen the Superfund program. In July 2017, the Task Force issued a report containing five goals and 42 recommendations. The Task Force’s five goals are to: i) expedite the cleanup and remediation process; ii) reinvigorate responsible party cleanup and reuse; iii) encourage private investment; iv) promote development and community revitalization; and v) engage parties and stakeholders. Phil Page from EPA’s Office of Site Remediation Enforcement, Policy, and Program Evaluation Division presented the listening session for Recommendation 23. The slide deck from the session is available here. Recommendation 23 aims to deliver an efficient and effective process to identify site-specific liability issues, to identify best manage practices to quickly respond to third-party concerns regarding liability, and to create a national team of redevelopment experts. Recommendation 23 discusses the use of Liability Issue Identification Tools (LIITs) that include site history and other relevant information, information regarding interested parties...

Superfund Task Force Listening Session – Exploring CERCLA Environmental Liability Transfer Approaches

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Posted in Development/Redevelopment / Environmental and Green Issues

On June 12, 2018

On June 5, 2018 the Superfund Task Force held another of its eight scheduled public listening sessions intended to solicit public and stakeholder input relating to recommendations contained in the Task Force’s July 2017 report. The listening session focused on Recommendation 22, which suggests exploring Environmental Liability Transfer (ELT) approaches and other risk management tools. While Recommendation 22 addresses a variety of risk management approaches Potentially Responsible Parties (PRPs) might use to transfer responsibilities, the listening session honed in on ELTs specifically. Participants in the listening session were able to follow along with a presentation from Greg Wall of OSRE’s Regional Support Division, Erik Hanselman of OSRE’s Policy and Program Evaluation Division, and Charlie Howland from the Region 3 Office of Regional Counsel, who described the general function of ELTs and offered details from two case-studies where ELTs were used effectively to spur cleanup by private parties at sites with unique challenges. As detailed by the presenters during the session, an ELT is a mechanism whereby PRPs contractually transfer their cleanup response obligations to a specialized third party for a negotiated price. The upside to the public of such arrangements is that they encourage cleanup by specialized private parties who are particularly motivated to cleanup and redevelop properties as expeditiously as possible, all of which helps to...

Third Circuit Holds Agreement to Arbitrate in Illusory Forum Is Unenforceable

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Posted in Class Action Defense

On June 11, 2018

The Third Circuit Court of Appeals recently held, in a precedential decision, that when parties enter an agreement directing them to arbitrate in an illusory forum, the forum selection clause is not severable and the entire agreement to arbitrate is unenforceable. In MacDonald v. CashCall, Inc. et al., a plaintiff brought suit on behalf of himself and a putative class, alleging a loan agreement between the parties was unconscionable and usurious. The agreement at issue included “(1) a provision requiring that all disputes be resolved through arbitration conducted by a representative of the Cheyenne River Sioux Tribe (‘CRST’) and (2) a clause that delegates questions about the arbitration provision’s enforceability to the arbitrator.” The defendants moved to compel arbitration. The district court declined to compel arbitration because the agreement at issue expressly disavowed federal and state law, thus rendering the arbitration provisions invalid as an impermissible prospective waiver of federal and state statutory rights. The district court further held that the arbitration agreement was unenforceable because the forum was illusory, as the selected forum did not conduct arbitrations or have rules for conducting arbitrations. The Third Circuit affirmed the district court’s conclusion that the loan agreement’s arbitration provision cannot direct arbitration to an illusory forum—here, the CRST. Similar to its sister circuits, the Third Circuit...

Superfund Task Force Recommendation 27 Listening Session: New Tools to Encourage Private Investment in Cleaning Up and Reusing Superfund Sites

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Posted in Development/Redevelopment / Environmental and Green Issues

On June 8, 2018

The Environmental Protection Agency (EPA) held a listening session concerning the Superfund Task Force (“Task Force”) Recommendation 27 on June 5, 2018 focusing on new tools for reusing Superfund sites through private investment. The EPA created the Task Force in May 2017, and it is comprised of senior representatives from various EPA offices associated with Superfund policy and enforcement. The Task Force intends to streamline and strengthen the Superfund program. In July 2017, the Task Force issued a report containing five goals and forty-two recommendations. The Task Force’s five goals are to: i) expedite the cleanup and remediation process; ii) reinvigorate responsible party cleanup and reuse; iii) encourage private investment; iv) promote development and community revitalization; and v) engage parties and stakeholders. Recommendation 27 seeks to implement some or all of the five goals by identifying tools for third parties interested in opportunities that support the cleanup or reuse of priority sites. EPA understands potential investors have concerns about uncertain liabilities, and looks to identify those specific concerns and to identify tools that may address such concerns. For example, the agency may determine standard language to include in agreements that would facilitate financing, and may create public-private partnership investment opportunities and structure. During the listening session, EPA noted that there are existing tools to clarify...

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