Gibbons Law Alert

Gibbons Law Alert Blog

Ninth Circuit Reverses Fee Award in DTSA Case

On January 10, 2020

The Ninth Circuit recently added to the small body of appellate court precedent interpreting the Defend Trade Secrets Act (DTSA), reversing an attorney fee award which had been granted by a district court in Washington. The reversal stemmed from the appellate court’s de novo determination that no circumstances existed to support a finding that the suit was brought and maintained in bad faith. In RJB Wholesale, Inc. v. Castleberry, the plaintiff sued a former sales representative for violation of the DTSA, claiming misappropriation of a customer list and company cell phone programmed with customer contact information. After the close of discovery, the defendant moved for summary judgment that the plaintiff had not proven any damages caused by the alleged misappropriation. The district court granted the motion, and the Ninth Circuit affirmed. The Ninth Circuit reversed, however, the district court’s fee award to the prevailing defendant. The decision follows on the heels of a decision from the Fourth Circuit, Akira Technologies, Inc. v. Conceptant, Inc., affirming the denial of attorney fees where the plaintiff “had at least some chance of success” on its DTSA claim and the Fifth Circuit in Dunster Live, LLC v. Lonestar Logos Mgmt. Co., LLC, where the court held fees were properly denied because a dismissal without prejudice did not render defendants...

Appellate Division Creates Split on Learned-Professionals Exception to New Jersey Consumer Fraud Act

by Thomas J. Coghlan

Posted in Class Action Defense

On December 16, 2019

In a recent opinion, Shaw v. Shand, the Appellate Division held that home inspectors are not “learned professionals” exempt from liability under the New Jersey Consumer Fraud Act (CFA). Instead, the court held that only professionals who have historically been recognized as “learned” based on the requirement of extensive learning or erudition are exempt under the CFA. In Shaw, the plaintiffs hired the defendant, a licensed home inspector, to examine a home for defects. The defendant wrote a report concluding that the property was built with professional workmanship, was made of quality materials, and would only require typical maintenance and upgrades. The plaintiffs purchased the property in reliance on that report. Soon after the plaintiffs made the purchase, however, the property’s front porch collapsed. Plaintiffs then learned that the roof, windows, and sliding glass doors all leaked and required complete replacement and that the driveway would need to be replaced as well. They then discovered that the house had a significant mold problem. At the time the Appellate Division decided Shaw, the plaintiffs had spent tens of thousands of dollars repairing those conditions, and expected to spend tens of thousands more. Defendant’s inspection of plaintiffs’ home was his first as a licensed inspector. As a licensed inspector, defendant was subject to the requirements set forth...

Join Us at the ICSC New York Deal Making Conference – December 11 & 12

by Douglas J. Janacek

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

On December 9, 2019

The Gibbons Real Property Department will once again exhibit at the upcoming International Council of Shopping Centers (ICSC) New York Deal Making Conference at the Jacob K. Javits Convention Center on December 11-12. Stop by our booth, #2411, to meet some of the Department’s attorneys who will be in attendance (Click here to view our booth location marked as the red circle). Deal Making hours are Wednesday, December 11, from 8:00 am to 5:00 pm, and Thursday, December 12, from 8:00 am to 3:00 pm. We look forward to seeing you there!

More Than Parking Tickets: Appellate Division Rules that New Jersey Municipal Courts Can Assess Civil Penalties for Spill Act Violations

by Gibbons P.C.

Posted in Environmental and Green Issues

On November 26, 2019

Municipal courts are typically called on to rule on such matters as parking violations and speeding tickets. Some statutes, however, give them jurisdiction over a surprising variety of actions. In its published opinion in State of New Jersey Department of Environmental Protection v. Alsol Corporation, the Appellate Division held that one powerful environmental law, the Spill Compensation and Control Act (Spill Act), grants municipal courts jurisdiction to assess civil penalties for violations of the statute, even where the department has not already gone through an administrative process to assess such penalties. DEP’s complaint against Alsol arose from an October 2016 oil spill at a property it owns in Milltown. According to factual assertions made by the New Jersey Department of Environmental Protection (NJDEP), the spill was the result of a contractor’s faulty demolition of three electrical transformers. Oil from the transformers, later determined to contain polychlorinated biphenyls (PCBs), spilled onto the surface and into a storm drain. The oil allegedly reached Farrington Lake and may have reached Mill Pond and Lawrence Brook, which a Department of Environmental Protection (DEP) Fish and Wildlife Officer closed to fishing. The complaint, filed in Milltown Municipal Court, did not allege a violation of the Spill Act’s fundamental prohibition on the discharge of hazardous substances. Instead, it alleged that Alsol...

New Jersey Appellate Division Clarifies Spill Fund Lien Law & Procedure

by Gibbons P.C.

Posted in Environmental and Green Issues

On November 21, 2019

In an unpublished opinion captioned In Re Spill Fund Lien, DJ No. 129570-02; 954 Route 202, the Appellate Division affirmed the final agency decision of the Spill Compensation Fund (Fund) holding that the lien filed against the property and revenues to recover remediation costs that the Fund expended in cleanup was appropriate under the New Jersey Spill Act (Spill Act). The property owner, Branch 2002 LLC (Branch), had purchased a gas station from a previous owner who was ordered by the New Jersey Department of Environmental Protection (NJDEP) to conduct a remedial investigation and remove or treat contaminated soil from leaking underground storage tanks at the property. Ultimately, the previous owner did not conduct the required remediation, so the NJDEP oversaw remediation of the property using Fund resources. The property was later sold to Branch, with the prior owner’s insurance company indemnifying all subsequent owners for any liability arising out of the prior owner’s discharge. The Fund Administrator filed the initial lien on the property for expenditures and commitments incurred by the Fund in 2002, and then later amended this lien in 2015 to reflect additional costs expended and requested that the Superior Court Clerk enter the addresses of both the previous owner and Branch in the record of docketed judgments. The NJDEP sought reimbursement...

Federal Court Denies Order to Show Cause with Temporary Restraints in Recent Defend Trade Secrets Act Case

by Gibbons P.C.

Posted in Trade Secrets

On November 20, 2019

A recent federal trade secret decision may spur employers to conduct forensic analyses of the computers of departing executives either before or immediately after their departures. In McKinsey & Co., Inc. v. Shi, a consulting firm sued a former senior partner asserting violation of the federal Defend Trade Secrets Act (DTSA), among other claims. McKinsey alleged that the defendant misappropriated confidential McKinsey and client documents over the thirteen week period preceding his last day of work. Shi had worked at McKinsey or one of its affiliates for ten years before he began working for a competitor three days after his departure. In an unusual fact pattern for DTSA cases, before McKinsey’s federal lawsuit was filed, the former employee had sued McKinsey in state court, alleging his entitlement to almost $1 million in discretionary compensation and asserting claims for fraud, misrepresentation, and breach of contract, among other claims. In the process of reviewing documents for discovery in the state court action, McKinsey allegedly discovered the misappropriation. It then filed a verified complaint in New Jersey federal court with an order to show cause for temporary restraints and request for expedited discovery. The court declined to enter the order to show cause, but did order expedited discovery. Judge Shipp reasoned that although loss of a trade secret...

Gibbons Real Property Department Attorney Publishes in New Jersey Law Journal

by Gibbons P.C.

Posted in Real Estate

On November 15, 2019

Cameron W. MacLeod, an Associate in the firm’s Real Property Department, authored an article, “Finding the Outer Edges of ‘Good Faith’ in ‘Mt. Laurel’ Litigation” in this week’s New Jersey Law Journal. An excerpt from the article can be found below. To view the full article, click here. In 2015, the court directed that municipalities revise their housing elements and fair share plans “with good faith” and with “reasonable speed.” In re: N.J.A.C. 5:96 & 5:97, 221 N.J. 1, 33 (2015). Now, four and a half years later, the question of what constitutes “good faith” in these constitutional compliance cases is paramount, as the trial courts are now faced with whether a municipality’s housing element and fair share plan are consistent with the Mount Laurel obligations. The recent trial court decision in In re Englewood Cliffs, as well as the 2016 decision from Judge Wolfson in In the Matter of the Application of South Brunswick, both demonstrate what steps are necessary to establish “good faith” in these cases. Of the 300-plus declaratory judgment actions commenced in the wake of the Supreme Court’s decision in In re: N.J.A.C. 5:96 & 5:97, 221 N.J. 1 (2015), many have now settled, or are in the process of settling. The result of this process will be measured by the...

2019 Election Results Bring Little Change to State Legislature

by Gibbons P.C.

Posted in Elections

On November 8, 2019

Democrats billed the 2019 elections as a referendum on President Trump. Republicans dubbed the off-year contests as the “Murphy Mid-Term” and a chance to stall Democratic attempts to build on the “blue wave” of 2018. Who was right? It looks like both sides can declare victory. With the 80 seats of New Jersey General Assembly up for election, along with a Special Election for the Senate seat in the First Legislative District (Cumberland, Cape May and Atlantic Counties), the election returns produced mostly a status quo result. Democrats will continue to control both the General Assembly and State Senate, but with majorities slightly smaller than in the past session. All three Democratic incumbents in the First Legislative District lost to their respective Republican challengers. The race for the two Assembly seats in the Second Legislative District was extremely close, but it appears the Democratic incumbents will be victorious. Even with the loss in the First Legislative District, Democrats still retain a wide majority in the Assembly (52-28) and the Senate (25-15). Republican incumbents were able to hang onto victory in District 8 (Burlington County), District 21 (Morris, Somerset, and Union Counties), and District 25 (Morris and Somerset), where Democrats ran particularly hard in all three districts. Democrats did show strength at the local and county...

States Step Up Data Privacy and Security Regulation

by Gibbons P.C.

Posted in General Litigation / Privacy and Data Security

On November 5, 2019

State legislatures from California and New York have taken action to respond to rising privacy concerns by enacting legislation to protect consumers and their personal information, and the New Jersey legislature is actively working to pass similar legislation to enhance the privacy and security obligations applicable to personal information obtained from New Jersey consumers. This legislation typically requires businesses to inform residents of certain rights regarding the collection or sale of their personal information and to provide notice to residents if a security incident at the company involves their personal information. As deadlines quickly approach for the enforcement of these laws, it is important for businesses to take action now and revisit privacy, security, and storage practices, as well as the associated policies for maintaining appropriate data privacy and security throughout the organization. The California Consumer Privacy Act (CCPA), which takes effect January 1, 2020, accords significant new privacy rights to consumers and imposes corresponding new requirements on businesses. In general, the CCPA mandates businesses to implement procedures to provide notice to consumers at or before the collection of personal information, to respond to consumers’ requests for the production or deletion of their collected information or to opt-out from its sale, and to create privacy policies detailing their processes for selling or distributing consumer data....

Governor Murphy Signs Executive Order Addressing Climate Change Resiliency for New Jersey

by Gibbons P.C.

Posted in Development/Redevelopment / Environmental and Green Issues

On November 5, 2019

As storms like Superstorm Sandy continue to grow more devastating and frequent, communities, governments, businesses, and industries of all sizes and varieties must face the challenge of adapting to a changing climate. October 29, 2019 marked the seventh anniversary of Sandy hitting New Jersey. Governor Murphy marked this occasion by signing Executive Order 89, which calls on the Department of Environmental Protection (DEP) to establish a Statewide Climate Change Resilience Strategy, among other initiatives related to climate change adaptation. “New Jersey is extremely vulnerable to the impacts of sea-level rise and global warming, and [this] Executive Order outlines a bold and comprehensive set of actions to ensure that our communities and infrastructure are more resilient against future storms,” said Government Murphy about the signing. The preamble to the Executive Order notes that New Jersey is especially vulnerable to the impacts of climate change as a coastal state. Picking up on this administration’s Environmental Justice efforts, the Order acknowledges that minority and low-income communities are disproportionately affected by the impacts of climate change. Climate change of course is an issue that also impacts all communities, including the business community, industry, and government. The preamble also notes that “studies show that each dollar spent to mitigate hazards, including those associated with climate change impacts, results in a...