Gibbons Law Alert

Gibbons Law Alert

Author: Gibbons P.C.

Third Circuit Holds that Injunctive-Relief-Only Class Cannot Be Certified Where Plaintiffs Based the Threat of Future Harm on Irrational Consumer Behavior

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Posted in Class Action Defense

On March 23, 2012

In McNair v. Synapse, a precedential opinion, the Third Circuit held that former customers could not certify an injunctive-relief-only class asserting consumer fraud claims against defendant Synapse, Inc., the largest marketer of magazine subscriptions in the United States, because they lacked Article III standing. In short, the Third Circuit concluded that plaintiffs could not show a likelihood of future injury based on their claim that they might be deceived by the same conduct twice.

Zoltek Corp. v. U.S.: Federal Circuit En Banc Reverses Zoltek III and Rules That 28 U.S.C. § 1498(a) Can Waive Immunity for Infringement Under 271(g)

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Posted in Patent

On March 22, 2012

The Federal Circuit recently demonstrated how active the Court is, and will continue to be. After having ruled in Zoltek III that the United States did not waive immunity from suit except for acts that would constitute direct infringement under 35 U.S.C. § 271(a), the Court voted sua sponte to reconsider the question en banc.

Ex-Juror Who “Friended” Defendant Faces Jail for Bragging on Facebook About Dismissal From Jury Duty

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Posted in E-Discovery: Legal Decisions and Court Rules

On March 22, 2012

By now, attorneys should know to advise their clients to watch out for Friend requests from jurors during a trial. The latest debacle concerning jurors use of social media involves a juror “friending” a party and then bragging about his resulting dismissal from the panel. For that juror, his Facebook antics landed him a three-day jail sentence. Click here and here for additional coverage regarding this incident.

Play Nice or Pay the Price: Failing to Cooperate in Creating Preservation Protocols Can Result in Significant Consequences

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Posted in E-Discovery: Legal Decisions and Court Rules

On March 20, 2012

The dual issues of over-preservation and proportionality took center stage in a recent Southern District of New York class and collective action litigation, leading to a Magistrate’s opinion in Pippins v. KPMG, No. 11-377 (S.D.N.Y. Oct. 7, 2011), and a District Court’s affirmance in Pippins v. KPMG, Civ. No. 11-377 (S.D.N.Y. Feb. 3, 2012), which are sending shock waves through the e-discovery community. The effect of those shock waves here is particularly acute for FLSA and other employment-related class action defendants where the targeted company often possesses and controls ESI pertaining to sometimes thousands of potential plaintiffs.

gTLDs Pose New Threats in Cyberspace

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Posted in E-Commerce / Trademarks

On March 16, 2012

On January 12, 2012, ICANN, the Internet’s domain name registration watch dog, began accepting applications for new generic Top-Level Domains (gTLDs) to add to those already in existence, including .com, .net, .biz and others. Under the new scheme, any company can apply for a gTLD, thereby expanding the domain name system (DNS). Ultimately, this expansion will change the Internet forever. Each new gTLD poses an incremental risk for trademark owners who are already under heavy assault in cyberspace from cybersquatting (registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark owner), brandjacking (assuming the online identity of another entity for the purposes of trading on another’s brand equity), and typosquatting (registering URLs with common misspellings) by those seeking to generate illicit profits. According to the Coalition Against Domain Name Abuse (CADNA), cybersquatting already costs trademark owners more than $1 billion each year due to lost sales, lost goodwill, and increased enforcement costs. However, with a major increase in gTLDs, many corporations fear an expansion in expensive litigation to enforce their brands and trademarks.

New Jersey Appellate Division Finds That a Demand for Arbitration or Mediation Constitutes the “First-filed” Action for Comity Purposes

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Posted in General Litigation

On March 15, 2012

In CTC Demolition Company, Inc. v. GMH AETC Management / Development, LLC, et al., the Appellate Division recently found in a to-be published opinion that a party’s demand for contractually-mandated arbitration or mediation may constitute the “first filed” action for purposes of a comity analysis. The “first filed rule” typically surfaces where parties have engaged in a “race to the courthouse,” filing similar lawsuits in different jurisdictions that they perceive to be most friendly to their cause. Based on traditional principles of comity, the rule provides that “a New Jersey court should not interfere with a similar, earlier-filed case in another jurisdiction that is capable of affording adequate relief and doing complete justice,” Sensient Colors, Inc. v. Allstate Ins. Co., but allows for certain exceptions, such as where “the presence of special equities may lead a court to disregard the traditional deference paid to the first-filed action.”

The Extension of the Permit Extension Act is on the Move, To Be Reviewed Today By Assembly Appropriations Committee

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Posted in Development/Redevelopment / Environmental and Green Issues / Transactional Real Estate and Leasing

On March 12, 2012

About two months ago, several NJ Legislators, including State Senator Paul Sarlo (Bergen/Passaic) and Assemblyman Ronald Dancer, proposed bills that would amend the 2008 “Permit Extension Act.” Designed to give developers breathing room in the sluggish economy by extending the validity of development approvals, Proposed Bill S743 (the “Bill” or “S743”) is gaining traction and is moving through the necessary legislative committees. On March 5, 2012, S743 passed by a vote of 4-0 by the Senate Budget and Appropriations Committee. The Bill is scheduled to go before the Assembly Appropriations Committee on March 12, 2012.

Victory for Accountants: Accountant Third-Party Liability Based on Third-Party’s Access to Accountants’ Work Product Arises Only When Accountant is Explicitly Informed at Outset of Engagement that Third Party Will Rely on Accountant’s Work

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Posted in General Litigation

On March 12, 2012

The New Jersey Supreme Court recently held in Cast Art Industries, LLC v. KPMG LLP that the scope of accountant liability contained in the Accountant Liability Act, N.J.S.A. 2A:53A-25(b)(2)(a), is restricted to clients and third parties who the accountant knew at the start of engagement would have access to the accountant’s work product. N.J.S.A. 2A:53A-25(b)(2) identifies three circumstances when an accountant may be liable to a third party, including when the accountant “knew at the time of the engagement by the client, or agreed with the client after the time of the engagement” that the accountant’s work product would be made available to the third party. The Appellate Division held that an accountant retained to conduct an audit could be liable to a third party who received and relied on the audit so long as the accountant knew at some point during the engagement that the third party would rely on the audit.

Healthcare System and its CEO Held Not Liable by New York District Court for Wage Claims at Single Hospital in the Hospital System

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Posted in Wage and Hour

On March 7, 2012

The issue of whether a hospital system (operating over 25 facilities) and its Chief Executive Officer can be held liable for wage claims by workers employed at a single entity within the system was decided by the Eastern District of New York in Wolman v. Catholic Health System of Long Island, Inc. Applying traditional tests to assess “joint employer” liability, the District Court concluded that plaintiffs did not plead the basic elements in the complaint to hold the hospital system and its CEO liable for alleged unpaid wages. The Court reached a similar conclusion regarding several underlying claims — failure to compensate employees for meal periods and for time spent pre- and post-shift — based on plaintiffs’ inadequate pleadings.

NJ Department of Labor Re-Adopts Inside Sales Exemption

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Posted in Wage and Hour

On March 6, 2012

Effective February 21, 2012, the inside salesperson exemption was re-adopted by the New Jersey Department of Labor and Workforce Development (NJDOL) as part of the Administrative Exemption contained in New Jersey’s wage and hour laws. When the NJDOL adopted the so-called “white collar” exemptions for Administrative, Executive, Professional, Outside Sales, and Computer employees as contained in the Federal Fair Labor Standards Act (“FLSA”) in September 2011, it eliminated this long-recognized exemption. As we previously reported, the NJDOL later admitted that the elimination of this exemption was inadvertent and proposed regulations to reinstate it.

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