Author: Gibbons P.C.

Third Circuit Affirms Class Certification in In re Suboxone Antirust Litigation

On July 28, 2020, the Third Circuit in In re Suboxone (Buprenorphine Hydrochloride & Nalaxone) Antitrust Litigation, affirmed certification of a direct purchaser class, concluding that common evidence existed to prove the plaintiffs’ antitrust theory and resulting injury and that the proposed class representative, Burlington Drug Company, Inc., was an adequate class representative. The direct-purchaser plaintiffs alleged that the defendant drug manufacturer of the opioid-treatment drug, Suboxone, engaged in anticompetitive conduct that impeded the entry of generic versions of the drug into the market. Specifically, plaintiffs asserted that defendant “shifted the market” from Suboxone tablets to Suboxone film by the time generic tablets entered the market, thereby maintaining a monopoly and suppressing competition. According to plaintiffs, the defendant’s transition from tablets to film was coupled with six tactics to “eliminate demand for Suboxone tablets and to coerce prescribers to prefer film,” including making false statements about the safety of the tablets and withdrawing brand-name Suboxone tablets from the market. The plaintiffs argued that due to defendant’s anticompetitive conduct, they paid more for brand Suboxone products than they would have for generic tablets. The district court certified the class, and the Third Circuit granted the defendant’s petition for leave to appeal under Rule 23(f). First, the Third Circuit addressed defendant’s argument that plaintiffs did not provide...

Claw It Back: Updated Protections of New Jersey Rule of Evidence 530 on Inadvertent Disclosure

On July 1, 2020, Amended New Jersey Rule of Evidence 530 (Waiver of Privilege by Contract or Previous Disclosure) became effective. N.J.R.E. 530, which tracks Federal Rule of Civil Procedure 502, was amended as a result of the increasing use of electronic discovery in litigation and the associated concerns regarding the potential for the inadvertent disclosures. This blog has frequently addressed decisions involving F.R.E. 502, including in 2019, 2018, and 2012. Amended N.J.R.E. 530 includes significant revisions in paragraph(c), which includes provisions that apply “to disclosure of a communication or information covered by the attorney-client privilege or work-product protection.” N.J.R.E. 530(c). In particular, amended N.J.R.E. 530(c) addresses disclosures made during state proceedings or to state office or agency, N.J.R.E 530(c)(1); inadvertent disclosures, N.J.R.E. 530(c)(2); disclosures made in another forum’s proceeding, N.J.R.E. 530(c)(3); the controlling effect of a court’s order, N.J.R.E. 530(c)(4); and the controlling effect of a party agreement regarding disclosure, N.J.R.E. 530(c)(5). Under the amended Rule, it is clear that a court order regarding disclosure pursuant to N.J.R.E. 530(c)(4) has the potential to have a significant impact on other litigations, as the rule provides that a court order on privilege “is also not a waiver in any other federal or state proceeding.” However, an agreement “on the effect of disclosure in a state proceeding...

New Jersey Supreme Court Holds That Individualized Proof of Damages Is Required Absent a Basis for Presumption of Class-Wide Damages Capable of Reliable Mathematical Calculation

In Little v. Kia Motors America, Inc., a litigation spanning nearly two decades, the New Jersey Supreme Court held that, although aggregate proof of damages can be appropriate in some settings, individualized proof of damages based on the actual costs incurred by the class members was required in the case before it. Class members had to show they incurred “actual costs” as a result of an alleged defect in order to recover damages. In 2001, plaintiff filed a putative class action asserting breach of warranty and other claims on her behalf and on behalf of other New Jersey owners and lessees of certain Kia models. Plaintiff alleged that the vehicles had a defective brake system which rendered the vehicles’ front brakes susceptible to premature wear. After a four-week trial, the jury returned a verdict in favor of plaintiff and the class on the class-wide warranty claim, awarding zero damages for alleged diminution-in-value but $750 per class member on the out-of-pocket loss theory, which had been premised on an expert’s estimate of the amount of money an average owner would pay for brake repairs over the vehicles’ lives as a result of the alleged defect. On defendant’s motion for a new trial and to decertify for purposes of repair damages, the trial court decertified the class...

In It for the Long Haul: The Duty to Preserve Social Media Accounts Is Not Terminated Upon an Initial Production

In a recent decision by a federal district court in Ohio, the court admonished a plaintiff in a gender-based pay discrimination for deactivating her LinkedIn account during the pendency of the litigation after making an initial production. The court concluded that plaintiff had violated her duty to preserve pursuant to Rule 37(e), as the conduct resulted in the deletion of relevant and discoverable information that was the subject of a previous court order. The court declined to impose sanctions because plaintiff had in fact produced data from her LinkedIn account and because defendant could not demonstrate prejudice. However, the court did not let plaintiff’s offense go lightly; the court stated that plaintiff’s action was serious and inappropriate. In Faulkner v. Aero Fulfillment Services, plaintiffs alleged gender-based pay discrimination during their employment with defendant. Pursuant to a court order, plaintiffs had to produce, among other things, the “last three years of social media information.” Plaintiff Faulkner’s counsel followed the directions on the LinkedIn website to download a full data archive in Microsoft Excel format and produced the Excel file to defendant. Subsequently, defense counsel requested the social media information in a different format, a “screenshot” format. But plaintiff’s counsel was unable to produce Ms. Faulkner’s LinkedIn information in the “screenshot” format because the account had already...

NJ Governor Supports Additional NJDEP Permitting Requirements to Address Environmental Justice Concerns

On June 19, 2020, Governor Murphy announced his support for proposed legislation that would require the New Jersey Department of Environmental Protection (NJDEP), and permit applicants, to take additional steps prior to permits being issued for new or expanded facilities under a wide variety of state environmental statutes. The proposed legislation, which aims to protect those communities that historically have been most impacted by pollution from industrial and related activities, would require the NJDEP to publish and maintain a list of those communities determined to be “overburdened.” In the proposed legislation, “overburdened community” is defined as: “any census block group, as determined in accordance with the most recent United States Census, in which at least one half of the households qualify as low income households, and either: (1) at least 40 percent of the residents of the census block group identify as Black, African American, Hispanic or Latino, or as members of a State-recognized tribal community; or (2) at least 40 percent of the households in the census block group have limited English proficiency.” Prior to approval of covered permit applications, an applicant would be required to assess and prepare an environmental impact statement to outline both the existing environmental and health stressors already borne by the relevant community, as well as any additional impacts...

Who’s in Charge Here?: Third Circuit Holds That Government Was Not an “Operator” of Jersey City Chromium Facility for Purposes of Superfund Liability

Federal courts have long struggled to determine the shape and boundaries of the wide liability net cast by the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law. In its recent decision in PPG Industries Inc. v. United States, the Third Circuit applied circuit and Supreme Court precedent to hold that the government’s influence over a chromite ore processing plant in Jersey City during World War I and World War II was not pervasive or intrusive enough to make the government a past “operator” of the plant and thus liable for cleanup costs. Prior to PPG’s 1954 acquisition of the plant (which it continued to operate until 1963), Natural Products Refining Corporation (NPRC) operated the plant, which processed chromite ore into various chromium chemicals, including sodium bichromate. During both World War I and World War II (when it designated the plant’s output as critical war materials, i.e., products manufactured for direct military use), the government regulated the production of chromium chemicals. Through a variety of price, labor, and production controls, the government sought to encourage increased production of these key chemicals. Those efforts, however, did not extend to direct control over day-to-day operations or to the use of government employees to run the facility. Moreover, while the government was aware...

“Cooperative Federalism” or “Paternalistic Central Planning”?: U.S. Supreme Court Agrees That State Courts Can Hear Claims Over Adequacy of CERCLA Cleanups Under Certain Circumstances, But Limits Plaintiffs’ Options

The federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law, prescribes a careful process for making decisions on how to remediate contaminated sites. To avoid delay, the statute also divests federal courts of jurisdiction to hear most challenges to the selected remedy. In its recent opinion in Atlantic Richfield Co. v. Christian, the U.S. Supreme Court agreed that CERCLA does not bar state courts from hearing claims grounded in state law that go beyond claims for money damages and seek a cleanup that goes beyond what EPA requires. The case arose in Montana, where the Anaconda Copper Smelter operated for over a century and contaminated an area of over 300 square miles with arsenic and lead. Atlantic Richfield Company acquired the financially troubled smelter in the 1970s but could not reverse its decline, and closed it by 1980. Three years later, EPA named it one of its first official Superfund sites, and since then Atlantic Richfield has spent over $450 million on a cleanup that is expected to continue until 2025. The Superfund site that Atlantic Richfield has been remediating includes numerous residential properties. The owners of 98 of those properties sued Atlantic Richfield in Montana state court in 2008, asserting state common law claims. In addition to traditional...

A Refinery Is Not a Gas Station: N.J. Court Says Former Oil Operation Was Abnormally Dangerous Activity

The 1976 Spill Compensation and Control Act (“Spill Act”) gave New Jersey a wide variety of new powers to address, and seek reimbursement for, environmental contamination. Despite its broad new remedies, however, it did not pre-empt or “subsume” common-law theories such as strict liability for abnormally dangerous activities. Moreover, the historical operations at an oil refinery and terminal that resulted in substantial discharges and pollution of nearby waterways could constitute an abnormally dangerous activity. So held the Appellate Division in its recent opinion in New Jersey Department of Environmental Protection v. Hess Corporation. Hess involves a property in the Port Reading section of Woodbridge historically operated as an oil refinery and terminal. In its 2018 complaint against Hess (which developed the property in 1958 when it was known as Amerada Hess Corporation) and Buckeye Partners, LP (which acquired the property from Hess in 2013), the New Jersey Department of Environmental Protection (NJDEP) alleged discharges of oil affecting the nearby Smith Creek and Arthur Kill during Hess’s period of ownership.  The NJDEP asserted claims under the Spill Act, the Water Pollution Control Act, strict liability, trespass, and public nuisance, seeking both injunctive relief and money damages in connection with the defendants’ failure to assess injuries to natural resources and to restore the injured resources. Hess and Buckeye...

New Jersey Department of Community Affairs Temporarily Relaxes Construction Code Provisions Relating to Minor Work, Inspections, and Certificate Requirements

In response to the COVID-19 pandemic, Governor Phil Murphy issued Executive Order No. 107 (“EO 107”) on March 21, 2020, mandating that all non-essential brick-and-mortar retail businesses close to the public as long as EO 107 remains in effect. EO 107 does not require closure of construction projects. Not only does EO 107 identify “construction workers” as an example of employees who need to be physically present at their work sites in order to perform their duties, but also, shortly after issuing EO 107, Governor Murphy sent a tweet confirming that work at construction sites may continue. On the same date that Governor Murphy issued EO 107, he issued Executive Order No. 108 (“EO 108”), which provides that local officials may not enact or enforce rules or regulations that conflict with EO 107. Although work at construction sites continues in New Jersey, there are myriad ways in which construction projects can be adversely impacted by the COVID-19 virus. One potential impact concerns ongoing inspections of construction work performed by local construction code officials pursuant to the Uniform Construction Code (UCC), N.J.A.C. 5:23. Construction code officials routinely inspect ongoing projects at various points during construction and issue Certificates of Occupancy for structures when requirements for same are satisfied. From a legal perspective, as a result of...

Preparing for and Addressing Potential Impacts of COVID-19 on the Construction Industry

As the number of COVID-19 cases increases exponentially in the United States, the impact on the construction industry will inevitably continue to rise. Although projects in many states continue to progress at this time, some jurisdictions have taken drastic measures. For example, the Pennsylvania Department of Transportation recently suspended all construction projects until further notice in response to COVID-19. Similarly, all construction projects in Boston were ordered to stop for at least 14 days. In addition to shutdowns that may possibly be imposed by potential government action in response to the virus, ancillary issues could adversely impact parties to a construction project and the labor, goods, services, and materials used on projects. Such issues may include disruptions to construction supply chains in the U.S. and abroad, employees becoming ill and under quarantine, a workforce adjusting to changes resulting from school closings and other evolving societal changes flowing from COVID-19, and a rapidly changing and uncertain economic situation. While the current situation is essentially unprecedented, there are some actions parties in the construction industry can take to help prepare for, and address, potential impacts to their business and ongoing projects. Review Construction Contracts: Whether it is a standard form construction contract such as those published by the American Institute of Architects, a contract that has been...