Gibbons Law Alert

Gibbons Law Alert Blog

Third Circuit Holds Anti-Assignment Clauses in ERISA Plans Are Enforceable

On June 27, 2018

The Third Circuit, in a decision that may limit the remedies available to medical providers in the event of non-payment, recently clarified that “anti-assignment clauses in ERISA-governed health insurance plans as a general matter are enforceable.” In so holding, the Third Circuit joins all other circuit courts that have addressed the issue. On the basis of that clause, the Court held that the plaintiff out-of-network health care provider seeking reimbursement for a participant’s medical claims lacked standing to pursue the claim against the insurers on the participant’s behalf. In October 2015, the plaintiff provider performed shoulder surgery on a patient who was covered by an ERISA-governed health-insurance plan. In billing the individual for the procedure, the provider – because it was not part of the plan’s provider network – charged amounts that far exceeded the plan’s reimbursement limits for the surgery. The plan’s insurers applied its out-of-network limit in processing the claim and reimbursed only a fraction of the total amount charged. The provider appealed the claim on the patient’s behalf. At the same time, the provider had the patient sign an assignment-of-benefits form which assigned to the provider the patient’s right to pursue claims under his health-insurance plan for the surgery. The insurers denied the appeal, and the provider sued alleging ERISA violations. The insurers...

Gibbons Attorneys Author Article Featured in New York Law Journal

by Gibbons P.C.

Posted in Privacy and Data Security

On June 26, 2018

John T. Wolak and Mitchell Boyarsky, co-leaders of the firm’s Privacy & Data Security Team, along with Team associate Randy A. Gray, published an article earlier this month in the New York Law Journal relating to the growing commercial use of facial recognition technology and other biometric data. The full article can be found here.

Senator Hatch Proposes Legislation Forcing Challengers to Choose Between Filing a Hatch-Waxman Action or Filing an IPR

by Gibbons P.C.

Posted in Patent / USPTO

On June 25, 2018

On June 13, Senator Orrin Hatch, co-author of the Hatch-Waxman Act, proposed an amendment in the Senate Judiciary Committee to modify the inter partes review (“IPR”) process for pharmaceuticals. The senator published a press release summarizing and explaining the proposed legislation. The amendment, titled the Hatch-Waxman Integrity Act of 2018, intends to “restore the careful balance the Hatch-Waxman Act struck to incentivize generic drug development” by “prevent[ing] alternative procedures for challenging drug patents from tilting the playing field contrary to Hatch-Waxman’s design.” The proposed legislation would amend Sections 505(b)(2) and 505(j)(2)(A) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §§ 355(b)(2) and 355(j)(2)(A) respectively) to require the applicant to certify to the FDA that “neither the applicant nor any party in privity with the applicant, has filed, or will file, a petition to institute inter partes review” in order to be eligible for abbreviated regulatory approval under the Hatch-Waxman Act. The applicant would further need to certify that it “is not relying in whole or in part on any decision issued by the Patent Trial and Appeal Board in an [IPR]” in making the certification that the relevant listed patent is invalid or will not be infringed. According to Senator Hatch, the impetus for the proposed amendment is that IPRs are “producing unintended consequences in...

Access Denied: NJ Appellate Division Clarifies Shareholder’s Right to Inspection of Corporate Records

by Gibbons P.C.

Posted in General Litigation

On June 25, 2018

In R.A. Feuer v. Merck & Co., Inc., the New Jersey Appellate Division, in a to-be-published opinion, narrowly construed the scope of a shareholder’s right to inspect a corporation’s records under N.J.S.A. 14A:5-28 and the common law. A Merck & Co, Inc. shareholder appealed from the dismissal of his complaint seeking various corporate records, including twelve broad categories of documents. The shareholder sought evidence that Merck acted wrongfully in its acquisition of another pharmaceutical firm. After Merck appointed a working group to assess the shareholder’s concerns, the shareholder requested documents pertaining generally to the working group’s activities, communications, and formation; documents provided to the board regarding the target pharmaceutical firm and two of its drugs; and the board’s considerations of the shareholder’s demands and the working group’s recommendation. Merck disclosed pertinent minutes of the board and of the working group, but denied the remainder of the shareholder’s demand. The trial court determined that the shareholder’s demand exceeded the scope of the “books and records of account, minutes, and record of shareholders,” which the shareholder had a statutory right to inspect and that the common law did not expand that statutory right. The Appellate Division affirmed, narrowly construing the plain language of N.J.S.A. 14A:5-28(4). According to the court, “minutes” refers to “shareholder, board, and executive committee...

Gibbons Attorneys Author Article Featured in New Jersey Law Journal

by Gibbons P.C.

Posted in General Litigation

On June 22, 2018

Frederick W. Alworth and Jonathan S. Liss, Directors in the firm’s Commercial & Criminal Litigation Department, published the following article in the June 18 issue of the New Jersey Law Journal, after a recent decision by the New Jersey Superior Court Appellate Division made it more difficult for shareholders to challenge corporate actions in New Jersey. Is this part of a trend toward making New Jersey more business friendly? The full article can be found here.

An Application for Development Must Include All Checklist Items for Protection of “Time of Application” Rule to Apply, New Jersey Supreme Court Says

by Howard D. Geneslaw, Cameron W. MacLeod and Michael D. DeLoreto

Posted in Development/Redevelopment

On June 20, 2018

The New Jersey Supreme Court ruled today, in a unanimous opinion in a case of first impression captioned Dunbar Homes, Inc. v. Zoning Board of Adjustment of the Township of Franklin, et al., that to receive the protection of the “time of application” rule, an application must comply with the definition of “application for development” in the Municipal Land Use Law (“MLUL”), meaning that it must include all of the items required by the submission checklist which the municipality has adopted by ordinance. This case constitutes the first time the Supreme Court has interpreted the “time of application” rule, and its decision will impact the review of development applications throughout the state. The MLUL’s “time of application” rule provides that the ordinances and regulations in effect “on the date of submission of an application for development” govern review of that application. This reversed the longstanding “time of decision” rule whereby municipalities could change the zoning regulations at any time prior to the approval of an application for development, even where the change was enacted during a public hearing process specifically for the purpose of derailing a pending application. Under the “time of application” rule, the date upon which “an application for development” was submitted for review is key to determining what ordinances apply to it...

Eleventh Circuit Rules FTC’s Data Security Cease and Desist Order Against LabMD Is Unenforceable

by John T. Wolak

Posted in General Litigation

On June 20, 2018

In its June 6, 2018 decision, the Eleventh Circuit concluded that the Federal Trade Commission’s (“FTC”) Final Order against LabMD lacked adequate specificity and therefore was unenforceable. The Eleventh Circuit had previously issued a stay of enforcement of the FTC’s Final Order – as reported by this blog on November 16, 2016 – which had concluded that LabMD’s data security practices were “unreasonable” and constituted an “unfair” business practice in violation of Section 5 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §45(a) and (n). The FTC initiated an enforcement action against LabMD in August 2013, alleging that LabMD, which operated as a clinical laboratory testing center, failed to implement reasonable data security measures to protect patients’ sensitive personal information. LabMD’s alleged data security failures allowed an employee to install and maintain file-sharing software on a work-related computer for a period of at least three years, which allowed exposure of patient information on a peer-to-peer network accessible daily by millions of users. In July 2016, and on appeal following a hearing before an Administrative Law Judge, the FTC concluded that LabMD’s failures had caused, and were also likely to cause, substantial consumer injury, including identity theft and medical-identity theft, which constituted an unfair act or practice in violation of Section 5 of the...

Superfund Task Force Recommendation 23 Listening Session: Informing Parties About Streamlining the Cleanup and Redevelopment Process

by Gibbons P.C.

Posted in Development/Redevelopment / Environmental and Green Issues

On June 18, 2018

The Environmental Protection Agency (“EPA”) held a listening session concerning the Superfund Task Force (“Task Force”) Recommendation 23 on June 13, 2018. Recommendation 23 focuses on tools designed to assist parties interested in redevelopment of contaminated sites. The EPA created the Task Force in May 2017, which is comprised of senior representatives from various EPA offices associated with Superfund policy and enforcement. The Task Force intends to streamline and strengthen the Superfund program. In July 2017, the Task Force issued a report containing five goals and 42 recommendations. The Task Force’s five goals are to: i) expedite the cleanup and remediation process; ii) reinvigorate responsible party cleanup and reuse; iii) encourage private investment; iv) promote development and community revitalization; and v) engage parties and stakeholders. Phil Page from EPA’s Office of Site Remediation Enforcement, Policy, and Program Evaluation Division presented the listening session for Recommendation 23. The slide deck from the session is available here. Recommendation 23 aims to deliver an efficient and effective process to identify site-specific liability issues, to identify best manage practices to quickly respond to third-party concerns regarding liability, and to create a national team of redevelopment experts. Recommendation 23 discusses the use of Liability Issue Identification Tools (LIITs) that include site history and other relevant information, information regarding interested parties...

Third Circuit Affirms the Dismissal of a Putative Class Action against TD Bank for Failure to Meet Pleading Requirements

by Kelsey A. Ball

Posted in Class Action Defense

On June 18, 2018

Last month, the Third Circuit upheld the dismissal of a putative class action against TD Bank, finding that plaintiffs’ conclusory allegations lacked sufficient evidence and failed to satisfy Rule 9(b)’s heightened pleading standard for claims that sound in fraud. In MZL Capital Holdings, Inc. et al. v. TD Bank, N.A. et al., two account holders with TD Bank filed a proposed class action accusing the Bank of obscuring its exchange rates and improperly charging an embedded fee for converting foreign currency, thereby defrauding its customers in violation of the New Jersey Consumer Fraud Act. Shortly thereafter, plaintiffs amended their complaint to add claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of numerous other state consumer-protection laws. TD Bank moved to dismiss plaintiffs’ claims for failure to state a claim, and the District Court granted TD Bank’s motion, dismissing all of plaintiffs’ claims. On appeal, the Third Circuit affirmed the district court’s decision, concluding that plaintiffs’ claims were inadequately pled. At the outset, the Court re-affirmed the basic principle that claims brought under the Consumer Fraud Act sound in fraud and therefore must comply with Rule 9(b)’s particularity requirement. The Third Circuit held that plaintiffs’ general allegations, which failed to identify any provision in their agreement...

New Jersey Appellate Court Upholds Class Waiver & Arbitration Provision

by Joshua S. Levy

Posted in Class Action Defense

On June 15, 2018

The New Jersey Supreme Court has noted that both “federal and state policies favor[] arbitration.” Nevertheless, the High Court’s Atalese v. Legal Servs. Grp. decision—rejecting the enforceability of an arbitration clause—continues to raise questions about whether New Jersey state courts view such provisions with more skepticism than other jurisdictions. In this regard, the Appellate Division’s recent decision in Signor v. GWC Warranty Corp. provides some welcome guidance. In Signor, the trial court refused to dismiss and compel arbitration of class claims grounded in a particular automobile service contract. The contract contained an arbitration provision with language including: ARBITRATION PROVISION: READ THE FOLLOWING ARBITRATION PROVISION (“Provision”) CAREFULLY, IT LIMITS CERTAIN RIGHTS, INCLUDING YOUR RIGHT TO OBTAIN RELIEF OR DAMAGES THROUGH COURT ACTION. Any and all claims, disputes, or controversies of any nature whatsoever . . . shall be resolved by binding arbitration before a single arbitrator. You agree that any arbitration proceeding will only consider Your Claims. Claims by, or on behalf of, other individuals will not be arbitrated in any proceeding that is considering Your Claims. You and We understand and agree that because of this Provision neither You nor Us will have the right to go to court except as provided above and to have a jury trial or to participate as any member of a...