Gibbons Law Alert

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

On July 2, 2020

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

by Gibbons P.C.

Posted in E-Discovery: Legal Decisions and Court Rules

On June 30, 2020

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...

Issues for NJ and NY Retailers and Food and Beverage Establishments to Consider Upon Reopening for Outdoor Sales and Service

by Howard D. Geneslaw

Posted in Liquor Licensing

On June 30, 2020

On June 3, 2020, New Jersey Governor Phil Murphy signed Executive Order No. 150 (the “Order”), which permitted, effective June 15, 2020, restaurants and other food and beverage establishments to offer on-site outdoor service. The Order also allowed municipalities to make outdoor shared spaces, such as sidewalks and streets, available to these establishments. Previously, these establishments had been limited to offering take-out services as a result of executive orders issued in response to the ongoing COVID-19 health emergency. Simultaneous with the issuance of the Order, the New Jersey Division of Alcoholic Beverage Control (NJABC) issued a special ruling to create a COVID-19 Expansion of Premises Permit (the “Special Ruling”). We discussed the special ruling here. Similarly, the State of New York – on a region-by-region basis – is entering Phase 2 of its reopening plan in response to the COVID-19 health emergency, and the New York State Liquor Authority (NYSLA) issued guidance to permit liquor licensees with on-premises service to resume outdoor, on-premises service of alcoholic beverages and food. We discussed the guidance here. In sum, both states have taken significant steps to provide relief to business establishments that have been hurt by the COVID-19 health emergency. These measures allow establishments to return to some semblance of normal operations. There are, however, still many unanswered...

“Good Cause” Not Required for Contention Amendments in the District of Delaware

by Charles H. Chevalier and Christine A. Gaddis

Posted in Patent / Pharmaceuticals

On June 29, 2020

In Bio Delivery Sciences International Incorporated v. Alvogen PB Research & Development LLC, a Delaware District Court recently denied the plaintiffs’ motion to strike two prior art references from the defendants’ supplemental invalidity contentions, reasoning that the defendants were not obligated, as the plaintiffs argued, to demonstrate good cause for the amendment. The court noted that the case’s scheduling order did not contain a “good cause” requirement for amending contentions or a requirement that contentions be amended before the date on which the defendants served their amended contentions. The court reasoned that, while the amended contentions did need to comport with the requirements of Fed. R. Civ. P. 26, an analysis under the Pennypack factors did not require striking the references. In particular, the “possibility of curing the prejudice” and “likelihood of disruption of trial” factors militated strongly in the defendants’ favor because the plaintiffs did not need further discovery on the references and could address them easily in their expert reports, which would not have any impact on the trial date. Interestingly, had these defendants been litigating in the District of New Jersey they would have been obligated to demonstrate “good cause,” where Local Patent Rule 3.7 requires a showing of “good cause” for any party to amend “contentions, disclosures, or other documents required...

USPTO Final Rule Limits a Reduction of Patent Term Adjustment to the Period the Applicant Failed to Undertake Reasonable Prosecution Efforts

by Estelle J. Tsevdos, Ph.D.

Posted in Licensing / Patent / USPTO

On June 26, 2020

On June 16, 2020, the United States Patent and Trademark Office (USPTO) published a final rule revising patent term adjustment under 35 U.S.C. 154(b) in view of Supernus Pharm., Inc. v. Iancu. In Supernus, the Federal Circuit held that a reduction of patent term adjustment must be equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application. The USPTO thus cannot deduct an amount of time beyond the period during which the applicant failed to undertake reasonable efforts to conclude prosecution. The USPTO revised relevant provisions pertaining to reduction of patent term adjustment, aligning the provisions with Federal Circuit law. Section 154(b)(2)(C) of the Patent Act authorizes the USPTO to reduce the total amount of patent term adjustment for certain delays by deducting the number of days equal to the period of time that “the applicant failed to engage in reasonable efforts to conclude prosecution of the application.” The USPTO implemented this section with 37 CFR § 1.704. In 2006, Supernus Pharmaceuticals filed patent applications in both the United States and Europe covering an osmotic drug delivery system. In February 2011, Supernus filed a Request for Continued Examination (RCE) in the U.S. application after a final rejection. Supernus’s European application was granted later...

New York State Liquor Authority Issues Guidance on Outdoor Expansion of Licensed Premises for Phase 2 Reopening

by Howard D. Geneslaw

Posted in Liquor Licensing

On June 25, 2020

On June 4, 2020, the New York State Liquor Authority (SLA) issued guidance to licensees in regions of the state of New York that have entered Phase 2 of the state’s reopening plan in response to the COVID-19 health emergency (“SLA Guidance”). The SLA Guidance applies to licensees that possess on-premises service privileges under New York’s Alcoholic Beverage Control Law (“ABC Law”), and it permits these licensees to resume outdoor, on-premises service of alcoholic beverages and food. The SLA Guidance, summarized below, shall remain in effect until July 6, 2020 and may be extended or reduced depending on the circumstances. It specifically provides guidance on how outdoor consumption shall be implemented and how licensees may expand the licensed premises into outdoor spaces, and it also includes a question and answer (Q&A) section that provides guidance to municipalities seeking to extend licensed premises. Outdoor Consumption The consumption of food and alcoholic beverages must occur in outdoor, open-air areas without fixed roofs, and patrons are required to be seated at tables, bars, counters, or similar contrivances. The Q&A section provides that a fixed roof is any overhead structure covering an outdoor seating area that would not reasonably be viewed as temporary. Awnings or covers that are temporary or seasonal are therefore permitted. Social distancing measures must be...

NJABC Issues Special Ruling Creating COVID-19 Expansion Permit and Provides Guidance on To-Go Cocktails

by Howard D. Geneslaw and Brendan J. Kelly

Posted in Liquor Licensing

On June 24, 2020

Earlier this month, the New Jersey Division of Alcoholic Beverage Control (“Division”) issued a special ruling to create temporary COVID-19 permits to expand licensed premises and an advisory notice regarding cocktails-to-go. These are summarized briefly below. Special Ruling Establishing Temporary COVID-19 Permit to Expand Licensed Premises This special ruling issued on June 3, 2020 establishes a COVID-19 Expansion of Premises Permit (“COVID-19 Expansion Permit”) to coincide with Executive Order No. 150, which allows licensees or permittees with on-premises retail consumption privileges to reopen and serve patrons in outdoor areas. The COVID-19 Expansion Permit allows the licensees and permittees to expand their licensed premises into outdoor areas, either contiguous or non-contiguous to their permanently licensed premises. All licensees and permittees with on-premises retail consumption privileges may apply for this permit, but no permit issued would be effective before June 15, 2020. The special ruling sets forth certain criteria that must be met for issuance of the COVID-19 Expansion Permit. In all cases, the licensee is required to demonstrate that it has a possessory interest and control over the expansion areas, and that it will exercise only the same privileges afforded to it on its existing licensed premises. For example, licensees that offer food service on their licensed premises must do so on the expanded premises. Any...

DOJ Updates Corporate Compliance Program Evaluation Guidelines to Invite the Practice of Continuous and Evolving Improvements Through Data Analysis

by Gibbons P.C.

Posted in General Litigation

On June 24, 2020

The Department of Justice (DOJ) recently updated its Evaluation of Corporate Compliance Programs guidelines, which federal prosecutors consider when making decisions to prosecute corporate compliance violations, impose monetary penalties, and require future compliance commitments. The guidelines highlight what prosecutors should deem relevant in evaluating a corporate compliance program, both at the time of the offense(s) and at the time of the charging decision and resolution. In turn, the guidelines serve as a roadmap for corporate compliance and control personnel in designing a corporate compliance program, allocating resources to the program, evaluating the efficacy of the program in practice, and redesigning the program as needed on a regular basis. The updates make clear that the DOJ is interested in the continuous evaluation and evolution of corporate compliance programs, and that prosecutors will now be examining whether and how a compliance program incorporates data analytics. As before, the guidelines instruct federal prosecutors to ask three questions, though now slightly revised as follows: Is the compliance program well designed? Is the program adequately resourced and empowered to function effectively? Does the program work in practice? A welcome addition to the guidelines is a stated recognition that the circumstances of the company, e.g., size, industry, geographic footprint, regulatory landscape, etc., are relevant to prosecutors’ analysis. The guidelines also suggest...

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

by Gibbons P.C.

Posted in Environmental and Green Issues

On June 24, 2020

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...

Plaintiffs’ Local Patent Rule 3.2(b) Document Production Sufficient to Support an “Invention Date” Predating a Disclosed “Priority Date”

by Charles H. Chevalier and Christine A. Gaddis

Posted in Patent / Pharmaceuticals

On June 17, 2020

Applying the plain language of the District of New Jersey’s Local Patent Rules, Chief Judge Wolfson recently ruled in Mitsubishi Tanabe Pharma Corp. v. Sandoz Inc., that the plaintiffs were not precluded from asserting an “invention date” derived from their Local Patent Rule 3.2(b) disclosures that differed from the “priority date” expressly disclosed in their Local Patent Rule 3.1(f) contention disclosures. Local Patent Rule 3.1(f) requires that infringement contentions disclose, “[f]or any patent that claims priority to an earlier application, the priority date to which asserted claim is allegedly entitled.” Local Patent Rule 3.2 governs the document production that must accompany Local Patent Rule 3.1 disclosures and Local Patent Rule 3.2(b) requires the production of “[a]ll documents evidencing the conception, reduction to practice, design, and development of each claimed invention, which were created on or before the date of application for the patent in suit or the priority date identified pursuant to L. Pat. R. 3.1(f), whichever is earlier.” An “invention date” and a “priority date” have distinct meanings in patent law. An “invention date” is the date when the inventor conceived the invention and reduced it to practice and the “priority date” is the filing date of the earliest patent application to which the patents-in-suit are entitled. The plaintiffs’ Local Patent Rule 3.1(f) infringement...