Gibbons Law Alert

Gibbons Law Alert Blog

Third Circuit Reverses Class Certification in In re Lamictal Direct Purchaser & Antitrust Consumer Litig.; Next up, In re Suboxone

On May 6, 2020

On April 22, 2020, the Third Circuit in In re Lamictal Direct Purchaser & Antitrust Consumer Litig., reversed class certification, concluding that the evidence did not establish that common proofs could be used to prove class-wide injury. The circuit court faulted the district court’s predominance analysis for failing to resolve factual disputes, weigh competing expert evidence, and make a prediction as to how these issues would play out at trial. Central to the ruling was the issue of antitrust impact. After brand and generic pharmaceutical manufacturers of the prescription drug Lamictal, or generic lamotrigine, settled a patent litigation, direct purchasers of these drugs sued claiming the settlement violated the antitrust laws as an impermissible “reverse payment agreement.” The brand manufacturer was alleged to have “paid” the generic to stay out of the market by promising not to launch an authorized generic (“AG”). The direct payor plaintiffs argued that they paid more for the drugs than they would have otherwise based on the theory that, on average, the price of a generic is lower when there are two generics rather than just one. The Third Circuit granted the manufacturer-defendants’ petition for leave to appeal under Rule 23(f). First, the Third Circuit rejected direct purchasers’ argument that certification was controlled by a comment in Tyson Foods v....

Appellate Division Enforces Provision Prohibiting Class Arbitration

by Caroline E. Oks

Posted in Class Action Defense

On May 5, 2020

In Curiale v. Hyundai Capital America Inc., the New Jersey Appellate Division reversed an order denying a motion to compel arbitration by Hyundai’s financing company (“HCA”), based on an arbitration clause in a motor vehicle retail order. The Appellate Division rejected the trial court’s finding that the arbitration clause was ambiguous because it stated that the parties must arbitrate any claims and then explicitly stated that the provision bars “class action arbitration.” The Arbitration clause provided: AGREEMENT TO ARBITRATE ANY CLAIMS. READ THE FOLLOWING ARBITRATION PROVISION CAREFULLY, IT LIMITS YOUR RIGHTS, INCLUDING THE RIGHT TO MAINTAIN A COURT ACTION. The parties to this agreement agree to arbitrate any claim, dispute, or controversy, including all statutory claims and any state or federal claims, that may arise out of or relating to the sale or lease identified in this agreement. By agreeing to arbitration, the parties understand and agree that they are waiving their rights to maintain other available resolution processes, such as a court action or administrative proceeding, to settle their disputes. … The parties also agree to waive any right (i) to pursue any claims arising under this agreement including statutory, state or federal claims, as a class action arbitration, or (ii) to have an arbitration under this agreement consolidated with any other arbitration or...

Organizations Commit to Share Their Intellectual Property to Support the Fight Against the Coronavirus

by Gibbons P.C.

Posted in Copyright / Patent / Trademarks

On May 5, 2020

The Open COVID Pledge calls on organizations around the world to make their patents and copyrights freely available to combat the coronavirus. The Pledge was developed by the Open COVID Coalition (“Coalition”), an international group of scientists and lawyers, seeking to accelerate the rapid development and deployment of diagnostics, therapeutics, medical equipment, and software solutions to this urgent public health crisis. Many major technology companies and academic organizations have “signed onto” the Pledge. The Pledge, however, does not appear to be as popular with biopharmaceutical companies. Am I eligible? How do I make the Pledge? Anyone who holds intellectual property rights is eligible by either issuing a public statement making the Pledge or issuing a press release and notifying the Coalition. What IP is covered? Pledging parties may share any of their intellectual property rights, including patents and copyrights relating to the coronavirus pandemic. The Pledge does not cover trademarks or trade secrets. How do I implement the Pledge? The Coalition has published three standard licenses. A pledging party may adopt one of these standard licenses, adopt its own compatible license, or adopt an alternative license. What are some of the key terms of the standard licenses? Grant: Simply stated, the standard licenses grant a non-exclusive, royalty-free, worldwide license to use and commercialize the intellectual...

The National Labor Relations Act and COVID-19

by Gibbons P.C.

Posted in Labor

On May 4, 2020

One law that has not received much attention in the midst of COVID-19 is the National Labor Relations Act (NLRA). The NLRA is a federal law that governs labor relations for most private sector employers in the United States. The statute is enforced and interpreted by the National Labor Relations Board (NLRB), which is headquartered in Washington, DC and has regional offices throughout the country. The NLRA provides employees with various rights, including the right to engage in protected concerted activity, the right to join and to refrain from joining a labor union, and the right to have a union collectively bargain their terms and conditions of their employment. As recent developments demonstrate, both union and non-union employers should keep the NLRA in mind when conducting their workforce planning. Protected Concerted Activity The NLRA protects employees who engage in protected concerted activity. Generally speaking, this means that employees have the right to band together to demand better working conditions with or without a union. Concerns that employees raise about health and safety issues at work, which very well may include COVID-19-related concerns, could constitute protected concerted activity entitling employees to protection. See, e.g., Contemporary Cars, Inc. v. NLRB, 814 F.3d 859 (7th Cir. 2016) (concern employees raised with manager about coworker’s failure to wash hands...

SCOTUS Creates “Functional Equivalent” Test to Determine Whether Point Source Dischargers Are Subject to the Clean Water Act

by Gibbons P.C.

Posted in Environmental and Green Issues

On April 30, 2020

The U.S. Supreme Court recently handed down a decision in the most prominent Clean Water Act (CWA) case since its 2006 plurality decision in Rapanos v. United States. In County of Maui v. Hawaii Wildlife Fund, the Court interpreted the landmark statute to require a permit where there is a “functional equivalent” of a direct discharge from a “point source” into “navigable waters.” The likely impact of this holding for the parties is to subject the County of Maui to the statute’s permitting requirements for its discharges of treated wastewater through wells to groundwater that eventually reach the ocean. Beyond the parties, environmental groups are likely to cheer this decision while the regulated community, and lower courts, will likely be wary of the Court’s multifactor test. The CWA prohibits the “addition” of any pollutant from a “point source” to “navigable waters” without a permit from the Environmental Protection Agency (EPA). The County of Maui came before the Court as the operator of a wastewater reclamation facility in Maui, Hawaii. That facility collects sewage, partially treats it, then pumps that water into four underground wells. The effluent then travels about a half mile through groundwater to the Pacific Ocean. For nearly five decades the facility operated in this manner with the knowledge of the EPA, and...

New Jersey Further Expands Family Leave and Temporary Disability Benefits in the Wake of COVID-19

by Gibbons P.C.

Posted in Employee Benefits / Family Leave

On April 29, 2020

On April 14, 2020, Governor Phil Murphy signed into law Senate Bill S2374, which further amends the New Jersey Family Leave Act (FLA) and the New Jersey Temporary Disability Benefits Law (TDBL), including the Family Leave Insurance program (FLI), expanding on prior amendments signed into law on March 25, 2020 (included in Senate Bill 2304), as part of the state’s initial response to the early stages of the COVID-19 pandemic. These amendments are effective immediately and apply retroactively to leave taken on or after March 25, 2020. As the pandemic has continued, so too have the Legislature’s attempts to address its impact on New Jersey citizens, which have included efforts to protect New Jersey employees who are in need of temporary leave and/or income replacement benefits as a result of circumstances caused by COVID-19. Prior to the COVID-19 related amendments, eligible employees working for covered employers could, under the FLA, take up to 12 weeks of job-protected leave in any 24-month period for the following three reasons: The birth of a child, including a child born pursuant to a valid written agreement between the employee and a gestational carrier The adoption or foster care placement of a child Caretaking for a family member with a serious health condition As discussed in our prior blog post,...

Is Everything Negotiable? Anticipating Legal Issues for the “Reopening”

by Frederick W. Alworth and Mary Frances Palisano

Posted in General Litigation

On April 28, 2020

In the early 1980s, a book entitled You Can Negotiate Anything spent nine months on the New York Times bestseller list. The book may have a resurgence in the coming months, as one thing is for certain right now: After the state’s reopening, every contract, lease, and agreement is likely to be subject to negotiation. While much attention has been focused on force majeure provisions in contracts and potential bankruptcy filings, the practical effect of survival of the fittest will dictate necessary legal needs. Certainly there will be a time lag for the courts to be clogged with new cases. The retail, leisure travel, and entertainment sectors, while arguably most impacted by the recent closures and restrictions, will surely not be the only areas where businesses and individuals by necessity will renegotiate virtually every existing agreement. As New Jersey deals with the enormity of the COVID-19 pandemic, legal issues are emerging that were previously never contemplated. In an instant, the world has changed, and all negotiated contracts are potentially at risk. The question becomes: How do businesses protect their futures? To start, anticipate legal issues. Documents and Agreements Likely to Be Subject to Renegotiation It is prudent to develop a reopening legal plan consisting of the following steps: Review your existing agreements. Are they still...

Beyond Force Majeure: Government Quarantine Orders May Themselves Excuse Contract Non-Performance

by Kevin W. Weber and Joshua S. Levy

Posted in General Litigation

On April 27, 2020

The coronavirus pandemic is reverberating throughout commercial sectors, and countless contract obligations are going unperformed—shipments are not being made or accepted, payments are being missed, and contract milestone dates are lapsing every week that the pandemic and business shutdown continues. Those typically rare force majeure provisions are now being scrutinized. (For more on those topics, see previous entries in our COVID-19 “The Coronavirus Pandemic and Your Business: How We Can Help” client alert series, including “Litigation Issues That May Arise.”) And, in New Jersey, the precise language of such a clause is key, as courts in this state have held that they should be “narrowly interpreted as contemplating only events or things of the same general nature or class as those specifically enumerated.” Seitz v. Mark-O-Lite Sign Contractors, Inc., 210 N.J. Super. 646 (N.J. Sup. Ct. Law Div. 1986). With only some force majeure clauses including explicit references to pandemics, or broadly-worded “catch-alls,” the success of a force majeure defense is not necessarily certain. But before (or in addition to) attempting to invoke that force majeure provision, consider whether a court would ultimately determine that contractual non-performance is due to an “Act of God” or rather is being caused by the governmental orders quarantining segments of the population and/or shutting down whole swaths of the...

“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

by Gibbons P.C.

Posted in Environmental and Green Issues

On April 27, 2020

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...

Pennsylvania Issues New Executive Order Mandating Additional COVID-19 Disease Control Measures

by John C. Romeo

Posted in Employee Benefits

On April 24, 2020

On April 15, 2020, the Secretary of the Pennsylvania Department of Health issued an order aiming to blunt the continued and expansive spread of COVID-19 throughout Pennsylvania (“Order”). The Order, which took effect on April 19, 2020, requires additional disease control measures to further protect workers and customers of any life-sustaining business (“Business”) that has remained open during the COVID-19 disaster emergency. The original list of Businesses can be found here, and includes companies such as healthcare service providers; restaurants offering carry-out, delivery, or drive-through services; food, medical equipment, and chemical manufacturers; and utility and telecommunication companies, among others. The Order requires any such Business, other than a healthcare provider, to implement certain social distancing, mitigation, and cleaning protocols. These measures are in addition to those included in Pennsylvania’s April 6, 2020 building safety measures executive order, which requires covered businesses to clean and disinfect high-touch areas in accordance with CDC guidelines in spaces accessible to customers, tenants, or other individuals, and maintain pre-existing cleaning protocols established in the facility for all other areas of the building, ensure the facility has a sufficient number of employees to perform the required cleaning protocols effectively and in a manner ensuring the safety of occupants and workers, and make sure that the facility has a sufficient number of...