Gibbons Law Alert

Gibbons Law Alert Blog

On September 28, 2011

Failure to properly preserve electronic evidence continues to provide at-risk litigants with the ability to steer the court from scrutiny of the merits, and drastically shift the balance of litigation leverage. The latest example of this is NVE, Inc. v. Palmeroni out of the District of New Jersey. This case involved NVE’s claims of breach of fiduciary duty against its former employee Palmeroni. At least on the specific Complaint allegations, NVE’s case against Palmeroni seems formidable — while working as a NVE salesman, the defendant allegedly entered into secret kickback arrangements with product purchasers, and formed a dummy entity with another NVE employee to divert sales of NVE’s products for their own benefit. Palmeroni was terminated in 2006 and later sued by NVE. Seems like a pretty good case, if the court and a jury could get to it.

A Recent Clarification on Intervening Rights by the Federal Circuit

by Gibbons P.C.

Posted in Biotech / Patent / Pharmaceuticals

On September 28, 2011

The Federal Circuit recently found that intervening rights can apply to a claim that has been narrowed by argument only during a reexamination. In Marine Polymer Technologies, Inc. v. HemCon, the Federal Circuit recently found that narrowing a claim by argument only changes the substantive scope of the claim for purposes of intervening rights. Specifically, a claim term that is changed during reexamination without changing a word in the claim can still substantively narrow the scope of a claim. Therefore, upon reissue of the patent, an infringer would have “… absolute intervening rights with respect to products manufactured before the date of reissue.”

E-Discovery Sanctions May Be Entered and Have Consequences Long After Litigation Concludes

by Jennifer A. Hradil

Posted in E-Discovery: Legal Decisions and Court Rules

On September 27, 2011

Even after a particular case has concluded, the risk of sanctions arising from e-discovery violations persists. Green v. Blitz U.S.A. was one of many products liability suits alleging injuries resulting from the defendant’s failure to equip its gas can with a “flame arrester.” Over a year after the conclusion of the trial and entry of final judgment in Green, the court entered monetary and non-monetary sanctions against the defendant for its failure to adequately preserve and identify potentially relevant documents. Because the matter had closed, many of the non-monetary sanctions under Rule 37(b)(2) were not available. Accordingly, the court fashioned a creative non-monetary sanction requiring the defendant (1) to provide the sanctions opinion to all plaintiffs in any litigation against the defendant for the prior 2 years; and (2) to file the opinion with any court in any new lawsuit in which the defendant is a party for 5 years following entry of the opinion.

Wage and Hour Guidance: IRS and Department of Labor Focus on Worker Misclassification

by Gibbons P.C.

Posted in Wage and Hour

On September 27, 2011

Employers should be aware of two recent announcements from the U.S. Department of Labor (“DOL”) and the Internal Revenue Service (“IRS”) regarding the misclassification of workers as independent contractors or non-employees. First, the DOL on September 19, 2011 signed a memorandum of understanding with the IRS that is designed to improve the DOL’s efforts to curtail employee misclassification by employers by sharing information with both the IRS and participating states. Second, the IRS announced on September 21, 2011 the launch of a new program, the Voluntary Classification Settlement Program (“VCSP”), that will enable employers to resolve prior misclassification of employees as independent contractors. The VCSP significantly limits past taxes for misclassified workers if an employer comes forward voluntarily in an attempt to comply with the tax laws.

No Right of Access Under OPRA to Unfiled Discovery in NJDEP Litigation But Right of Access May Exist Under Common Law

by Thomas J. Cafferty

Posted in General Litigation

On September 27, 2011

Last month, in Drinker Biddle & Reath, L.L.P. v. New Jersey Department of Law and Public Safety, Division of Law, the Appellate Division held that un-filed discovery in an environmental lawsuit brought by the New Jersey Department of Environmental Protection was not subject to access pursuant to New Jersey’s Open Public Records Act (“OPRA”). But the Court also found that access to such information could be compelled under the common law, depending on whether the plaintiff’s need for disclosure outweighed the State’s need for confidentiality, and remanded the matter to the trial court to conduct the appropriate balancing test.

If the Creek Don’t Rise — Montana’s Right to Rental for Riverbeds Used by Power Company’s Dams Now Before the U.S. Supreme Court – PPL Montana, LLC v. State of Montana

by Gibbons P.C.

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

On September 23, 2011

The U.S. Supreme Court will take up another Montana river case. The case involves a dispute between the State of Montana and a power company that purchased dams on several Montana rivers, which are licensed under the Federal Power Act by the Federal Energy Regulatory Commission. The last time Montana visited the U.S. Supreme Court, it lost to Wyoming in a dispute over water usage under the Yellowstone River Compact. This time Montana stands to gain $41,000,000 as fair market rental for its river beds granted on summary judgment and upheld by the Montana Supreme Court.

Delaware Supreme Court Endorses Reasonable “Conceivability” on Motion to Dismiss Over Twombly-Iqbal’s “Plausibility” Standard

by Christopher Viceconte

Posted in General Litigation

On September 23, 2011

Since the U.S. Supreme Court’s decisions in Bell Atlantic Corp. v. Twombly in 2007 and Ashcroft v. Iqbal in 2009, many Delaware Court of Chancery decisions have applied the Twombly-Iqbal “plausibility” standard in ruling on motions to dismiss. In its recent decision in Central Mortgage Company v. Morgan Stanley Mortgage Capital Holdings LLC, however, the Delaware Supreme Court refused to apply the Twombly-Iqbal “plausibility” standard and, instead, held that — at least for now — Delaware’s less stringent reasonable “conceivability” standard is what governs motions to dismiss in Delaware courts.

Twombly, Iqbal and Heightened Pleading Standards in Patent Infringement

by Gibbons P.C.

Posted in Patent

On September 22, 2011

Two cases decided last month highlight the somewhat disparate pleading standards in patent infringement actions among districts after Twombly and Iqbal. In The Nielsen Co. v. comScore, Inc., a plaintiff in the Eastern District of Virginia overcame a motion to dismiss infringement claims. Case No. 11-cv-168 (E.D.Va. Aug. 19, 2011) (Davis, J.). The court held that the claims for direct infringement met the lenient pleading standard of Form 18 provided under the Federal Rules. While in Medsquire LLC v. Spring Med. Sys. Inc., the district court for the Central District of California granted the defendant’s motion to dismiss. 2-11-cv-04504 (C.D. Cal. August 31, 2011) (Nguyen, J.). The court held the plaintiff’s Form 18 pleading resulted in conclusory statements that failed to include any facts identifying the relevant aspect of the [accused product] that infringed the patents and the complaint was insufficient to meet the “plausibility” standard set forth in Twombly and Iqbal.

Electric Vehicles Get a Jump Start in the Northeast

by Susanne Peticolas

Posted in Environmental and Green Issues

On September 22, 2011

Today New Jersey Department of Environmental Protection Commissioner Bob Martin announced that New Jersey, along with the other members of the Transportation and Climate Initiative, have received a federal grant of nearly $1 million to start planning a network of charging stations for electric vehicles. The initiative is expected to spur job creation and the use of electric vehicles (EVs).

FINRA Issues Regulatory Notice 11-39: Social Media Websites and the Use of Personal Devices for Business Communications

by Gibbons P.C.

Posted in Corporate Information and Records Management Policies

On September 21, 2011

In August 2011, FINRA, the self-regulatory agency of the securities industry, issued Regulatory Notice 11-39, offering additional guidance concerning the use of social media and supplementing its first notice on the subject–Regulatory Notice 10-06, issued in January 2010. Notice 11-39 focuses on issues relating to FINRA members’ use of social media, including record-keeping, supervision and responding to third-party posts and links. The Notice includes 14 “Q&As,” which provide instruction on the practical application of a firm’s and “associated person’s” (i.e., FINRA members) obligations under applicable laws and regulations when it comes to social media. With respect to record-keeping requirements, social media websites raise new complications because member firms do not themselves typically sponsor or host the content on those websites. The Notice, however, clarifies that record retention requirements continue to apply to content on social media sites and that the controlling question is whether the communications on those sites relate to the firm’s “business as such.” Any business communication made via Facebook, for example, must be “retained, retrievable and supervised.”