Gibbons Law Alert

Gibbons Law Alert

Category: General Litigation

Delaware Court of Chancery Announces Rule Amendments and New “Must Read” E-Discovery Guidelines

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Posted in General Litigation

On February 4, 2013

Effective January 1, 2013, the Delaware Court of Chancery Rules 26 (General provisions concerning discovery), 30 (Depositions upon oral examination), 34 (Production of documents) and 45 (Subpoenas) were amended, consistent with similar amendments to the Federal Rules of Civil Procedure, to refer to discovery of “electronically stored information” (“ESI”) in addition to “documents” and “tangible things” and explain how parties are to respond to requests for ESI.

Recent Developments Under New Jersey’s Open Public Records Act

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Posted in General Litigation

On January 16, 2013

New Jersey courts decided a trio of cases last month that shine a spotlight on the State’s Open Public Records Act (“OPRA”), which governs the disclosure of government records when requested by members of the public. These opinions — the holdings of which are summarized below — serve as important guideposts for practitioners litigating OPRA-related matters.

Third Circuit Clarifies that Reasonable Basis Standard Appropriate Quantum of Proof to Apply Crime-Fraud Exception to Attorney-Client Privilege

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Posted in General Litigation

On January 9, 2013

Clarifying the proofs necessary to apply the crime-fraud exception, the Third Circuit Court of Appeals in In re: Grand Jury recently held that a “reasonable basis” standard should be used, explaining that such a standard affords sufficient predictability for attorneys and clients without providing undue protection to those who seek to abuse the attorney-client and the work-product privileges afforded to them.

New York Court Upholds Separate Entity Rule, Quashes Non-Party Subpoenas Seeking Information on Overseas Bank Accounts

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Posted in General Litigation

On December 19, 2012

In Ayyash v. Koleilat, the Supreme Court of the State of New York, New York County, upheld and arguably extended the New York “separate entity” rule, which provides that each branch of a bank is treated as a separate entity, in no way concerned with accounts maintained by depositors in other branches or at a home office. Under this rule, a New York branch cannot be compelled to turn over assets maintained at another branch of the same bank. The Court’s decision appears to extend this rule to hold that — at least in circumstances where international comity considerations support broad application of the separate entity rule — a New York branch cannot be compelled to provide information or discovery concerning assets maintained at a foreign branch.

Communication Between Counsel and Client’s Independent Contractors May Be Privileged

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Posted in General Litigation

On December 6, 2012

The Eastern District of Pennsylvania recently found that communications generated and documents created by a party’s independent consultant may be entitled to attorney-client privilege protection. In In re Flonase Antitrust Litigation, direct and indirect purchasers of Flonase launched a class action against GlaxoSmithKline PLC (“GSK”) for allegedly delaying market entry of generic Flonase into the market. A dispute arose between GSK and direct purchasers as to whether the attorney-client privilege protects communications between GSK and its independent contractor, Swiftwater, which is a pharmaceutical consulting company. In this case, Swiftwater assisted GSK’s Flonase brand team in three areas: legal and regulatory, business development, and standard business practices. In the legal arena, Swiftwater assisted in the evaluation of legal and regulatory matters, such as evaluating GSK’s patent and intellectual property rights and FDA application to market over-the-counter Flonase.

New Jersey Supreme Court Tolls Filing Deadlines Due to Impact of Hurricane Sandy

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Posted in General Litigation

On November 13, 2012

In light of the wide-ranging and destructive impact of Hurricane Sandy, the New Jersey Supreme Court ordered that October 29, 2012, through November 16, 2012, shall be deemed the same as legal holidays for purposes of computing filing deadlines under the court rules and any statutes of limitations. Thus, any New Jersey state court filing that would otherwise be due between October 29, 2012, and November 16, 2012, will be deemed timely if filed on Monday, November 19, 2012.

Third Circuit’s Fair Notice Requirement Protects Defendants from Amended Claims Asserted After Expiration of Statute of Limitations

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Posted in General Litigation

On October 5, 2012

Affirming the statute-of-limitations-based dismissal of plaintiff Mary Glover’s claims against defendants Mark Udren and Udren Law Offices, the Third Circuit in Glover v. FDIC spoke clearly on the limits of the notice requirement under the relation-back doctrine, holding that Glover’s original pleading failed to provide fair notice of a subsequent claim in an amended complaint.

Pennsylvania Supreme Court Concludes That Dissenting Shareholders’ Post-Merger Recourse Is Limited to Judicial Appraisal

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Posted in General Litigation

On September 26, 2012

As discussed in a previous post, the Third Circuit’s August 2012 ruling in Mitchell Partners, L.P. v. Irex Corp. predicted that the Pennsylvania Supreme Court would “permit a post-merger suit for damages based on the majority shareholders’ breach of their fiduciary duties.” As a result, the Third Circuit concluded that Pennsylvania’s appraisal statute did not preclude dissenting minority shareholders who are “squeezed out” in a merger from seeking remedies beyond the appraisal remedies provided in the statute. However, on certification, the Pennsylvania Supreme Court concluded that minority shareholders who oppose a merger have no recourse — in the absence of fraud or fundamental unfairness — other than to seek judicial appraisal of the value of their post-merger shares.

United States District Court for the District of New Jersey Finds Franchisee’s Felony Conviction is Not a Valid Basis for Immediate Termination of a Franchise Agreement Under the New Jersey Franchise Practices Act When the Crime is Not “Directly Related to the Business Conducted Pursuant to the Franchise”

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Posted in General Litigation

On August 9, 2012

All franchisors and distributors should be aware of a June 27, 2012, decision in which the United States District Court for the District of New Jersey reaffirmed the New Jersey Franchise Practices Act’s (“FPA”) strong policy of protecting the rights of franchisees and limiting a franchisor’s ability to terminate a franchise agreement without first providing 60 days written notice — even in the face of a franchisee’s felony conviction — so long as that conviction is not “directly related to the business conducted pursuant to the Franchise.” In International House of Pancakes, LLC, et al. v. Parsippany Pancake House Inc., Civil Action No. 12-03307 (WJM) (MF), the District Court denied International House of Pancakes’ (“IHOP”) request for a preliminary injunction enforcing IHOP’s termination of Defendant Parsippany Pancake House, Inc.’s (“Pancake House”) franchise and prohibiting Pancake House from continued use of IHOP’s logos and other marks. IHOP terminated the franchise, effective immediately, after learning that Pancake House’s president and majority owner pleaded guilty to the crime of endangering the welfare of a minor, and admitted during his plea hearing to having engaged in sexual conduct with a minor, a felony. IHOP ended Pancake House’s franchise based upon language in the franchise agreement providing for immediate termination if the franchisee is convicted a felony. Pancake House countered that the...

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