Gibbons Law Alert

Gibbons Law Alert Blog

Update: U.S. Treasury Approves New Jersey’s Opportunity Zones

by Paul J. St. Onge and Michael D. DeLoreto

On April 13, 2018

As we had previously written, the Murphy Administration recently recommended 169 census tracts within 75 New Jersey towns to the U.S. Department of Treasury for inclusion in the newly-created federal Opportunity Zones Program. The Treasury Department has now approved Governor Murphy’s recommendations. A list of the Opportunity Zones and an interactive map showing the Zones can be found through the New Jersey Department of Community Affairs. Championed by Senators Cory Booker (D-NJ) and Tim Scott (R-SC), the 2017 tax reform law incorporated the Opportunity Zones Program to provide federal community development tax incentives and encourage long-term investment in eligible census tracts. The Program allows investors to temporarily defer payment of federal income tax on realized gains if the gains are invested in a qualified Opportunity Fund within 180 days of the date of the particular taxable sale or exchange. In addition, when a taxpayer disposes of an investment in a qualified Opportunity Zone held by the taxpayer for at least 10 years, the taxpayer can elect to exclude from gross income the capital gain on the investment in the Opportunity Zone Fund. A qualified Opportunity Fund is an investment vehicle that is organized as a partnership or a corporation for the purpose of investing in Opportunity Zone Property. Eligible Opportunity Zone Property generally includes (i)...

Ninth Circuit Holds Salary History Does Not Justify Wage Differences Between Male and Female Employees

by Gibbons P.C.

Posted in Discrimination

On April 11, 2018

In a precedential en banc opinion, Rizo v. Yovino, the U.S. Court of Appeals for the Ninth Circuit determined that an employee’s prior salary cannot justify a wage differential between male and female employees under the Equal Pay Act. Significantly, this decision overrules established prior Ninth Circuit precedent that an employee’s prior salary constitutes a “factor other than sex” under the Act upon which a wage differential may be based. Background The Plaintiff, Aileen Rizo, was hired by the Fresno County Office of Education in 2009 as a math consultant. At the time of her hire, her starting salary was determined in accordance with Fresno’s standard operating policy which provided that the salary for all new hires would be set by adding five percent to their previous salary. In or about 2012, Rizo learned that male colleagues who were hired after her were earning more than she. In 2014, Rizo filed a lawsuit against Jim Yovino in his official capacity as the Superintendent of the Fresno County Office of Education alleging violations of the Equal Pay Act, Title VII, and California law. At the District Court, Fresno admitted that it paid Rizo less than her male colleagues for the same work, but argued that the pay differential was permissible based on the Equal Pay Act’s...

TCPA Update: When Revocation of Consent Is Unreasonable

by Michael R. McDonald

Posted in Class Action Defense

On April 11, 2018

The District of New Jersey recently made clear that when attempting to cancel unwanted commercial text messages, if the recipient does not follow the sender’s simple instructions, any other attempts to revoke consent to the text messages may be found unreasonable. In Rando v. Edible Arrangements International, LLC, a class action lawsuit claiming violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, et seq., plaintiff claimed that she was sent commercial text messages from defendant using an automatic telephone dialing system (“ATDS”). Though plaintiff had originally consented to receive such text messages, and never followed defendant’s instruction to text “STOP to cancel,” the complaint alleged that plaintiff had revoked her consent to receive the messages via other return text messages of varying content and that defendant had impermissibly designated an exclusive means for the revocation of consent.” The Rando court held that the complaint failed to state a TCPA claim by failing to allege that the plaintiff’s chosen method of revoking consent was reasonable. Plaintiff had replied to the text with language which would clearly indicate to a human being that she wanted to revoke her consent, but she did not text back “STOP” as instructed in the original text itself. Although District Court Judge Simandle found that the FCC’s statements on...

Supreme Court Holds FLSA Overtime Exemptions Not to be Construed Narrowly

by Gibbons P.C.

Posted in Wage and Hour

On April 10, 2018

On April 2, 2018, in Encino Motorcars, LLC, v. Navarro, the Supreme Court held that auto service advisors – those who “interact with customers and sell them services for their vehicles” – are exempt from the overtime pay requirements of the Fair Labor Standards Act (“the FLSA”). The Court’s decision will certainly affect auto service advisors, but its impact will not be limited to the auto dealership industry. The crux of the Court’s decision centered around Section 13(b)(10)(A) of the FLSA, which states that “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” is exempt from the FLSA overtime requirement. In a 5-4 decision, the majority found that a service advisor is “obviously a salesman” under the ordinary meaning of salesman, given that a salesman sells goods or services and service advisors “sell [customers] services for their vehicles.” The Court also found that service advisors are “primarily engaged in . . . servicing automobiles” due to their integral involvement in the servicing process. Thus, the Court held that sales advisors are exempt from the FLSA overtime pay requirement under Section 13(b)(10)(A). Significantly, in reaching its conclusion, the majority departed from the Supreme Court’s longstanding principle that FLSA exemptions should be narrowly construed against employers, and, instead, held that the exemptions should be...

Budget Act Makes Changes to Federal Brownfield Program

by David J. Freeman

Posted in Development/Redevelopment / Environmental and Green Issues

On April 10, 2018

As noted in last week’s blog, the recently-passed Consolidated Omnibus Appropriations Act made a number of modifications to the federal brownfield program. That blog focused on the expansion of lessees’ ability to qualify for Bona Fide Prospective Purchaser (BFPP) status (and thereby obtain protection from Superfund liability). However, the Act made other changes that are of interest to brownfield site owners, developers, states, municipalities, and potential applicants for federal brownfield grant money. These modifications are found in Division N of the legislation, entitled “the Brownfields Utilization, Investment, and Local Development Act of 2018” (“BUILD Act”). They include the following: eliminating state and local government Superfund liability for sites acquired through seizure or otherwise in connection with law enforcement activity. State and local governments were previously protected only with respect to sites acquired “involuntarily”; eliminating the restriction for grants to petroleum sites that a site must be “relatively low risk” as compared with other petroleum-only sites in a state; allowing grants to be used for the cleanup of publicly-owned properties even if the public owner is not a BFPP; increasing the maximum federal brownfield grant per site from $200,000 to $500,000, which limit can be waived by EPA up to a maximum of $650,000 per site; authorizing multi-purpose brownfield grants of up to $1 million per...

No Harm to Competition: Third Circuit Upholds Decision for Uber in Antitrust Challenge by Philadelphia Taxicab Drivers

by Kevin R. Reich

Posted in Antitrust

On April 9, 2018

The Third Circuit’s newly-issued precedential opinion in Philadelphia Taxi Association v. Uber Technologies, Inc. is a classic reminder that the antitrust laws protect against harm to competition – not harm to competitors. In 2016, a group of Philadelphia taxicab drivers sued Uber in federal district court, alleging that the ride-sharing service was unlawfully attempting to monopolize the vehicle-for-hire market in Philadelphia. Plaintiffs pointed to the fact that, in October 2014, just prior to Uber’s entry into Philadelphia, there were 7,000 taxi drivers, and each of the city’s 1,610 taxicab medallions was valued at an average of $545,000. Two years later, 1,200 medallion taxi drivers had fled to Uber, those still driving taxis saw a thirty percent decline in their earnings, and the value of a medallion plummeted to just $80,000. The district court dismissed the complaint, holding that the plaintiffs had not pled antitrust injury – i.e., harm that the antitrust laws are designed to prevent – and thus did not have antitrust standing to maintain their suit. This appeal followed. The Third Circuit affirmed the dismissal but, unlike the district court, did so first based on plaintiffs’ failure to plausibly allege the elements of their attempted monopolization claim – i.e., that Uber (1) engaged in anticompetitive conduct with a (2) specific intent to monopolize and...

The U.S. Supreme Court Declines Review of Seventh Circuit Decision Rejecting Extended Leave as a Reasonable Accomodation for Disabled Employees under the ADA

by Richard S. Zackin

Posted in Disability

On April 6, 2018

On April 2, 2018, the United States Supreme Court declined to hear an appeal in Severson v. Heartland Woodcraft, Inc., a decision of the Seventh Circuit Court of Appeals that rejected a disabled employee’s claim that, as an accommodation for his disability, he was entitled under the Americans with Disabilities Act (“the ADA”) to leave beyond the maximum 12 weeks authorized by the Family and Medical Leave Act (“the FMLA”). The Seventh Circuit’s Decision Because of back pain, Raymond Severson took the maximum 12 weeks of leave permitted by the FMLA. On the last day of his leave he underwent back surgery, which required him to remain out of work for another two to three months. His employer rejected his request to extend his leave for an additional three months and terminated his employment, although did invite him to reapply when he was medically cleared to return to work. Instead of reapplying, Severson brought suit under the ADA, alleging that the employer failed to provide a reasonable accommodation for his disability by denying his request for extended leave. The district court granted the employer’s motion for summary judgment, and the Seventh Circuit affirmed. The Seventh Circuit’s analysis of the issue was straightforward. “A ‘reasonable accommodation’ is one that allows the disabled employee to ‘perform the...

Federal Budget Act Expands Lessees’ Ability to Claim Superfund Exemption as Bona Fide Prospective Purchasers

by David J. Freeman

Posted in Development/Redevelopment / Environmental and Green Issues

On April 6, 2018

The recently-enacted Consolidated Omnibus Appropriations Act made headlines in extending funding for federal government programs through September 30, 2018. Less widely noted were the myriad changes wrought by the Act to the administration of many federal programs. Among the programs affected was the federal brownfields program. The major substantive change in the Act was the expansion of the Bona Fide Potential Purchaser (BFPP) protection for lessees of properties. BFPP status exempts from Superfund liability parties who become owners or operators of facilities after the discharge of contaminants, so long as they are unrelated to parties responsible for the discharge, conduct “all appropriate inquiries” (e.g., a Phase I environmental site assessment) prior to closing, and observe certain other protocols post-closing. Until now, lessees were precluded from qualifying as a BFPP unless the property owner was also a BFPP. Now, if a lessee performs the required actions, it can obtain BFPP protection irrespective of whether its landlord is similarly exempted. This change will have a major impact on the liability exposure of lessees, particularly those who are developing and operating properties under long term ground leases. Most of the Act’s other brownfield-related provisions concern the funding of federal brownfield grants. Non-profit organizations are now eligible for such grants. The eligibility of grants for petroleum-related sites has been expanded. The...

Not So Fast: Another Court Limits Use of Reissue

by Gibbons P.C.

Posted in Patent

On April 5, 2018

Barco, N.V. & Barco, Inc. v. Eizo Corp. & Eizo Inc., aff’d, Barco, N.V. & Barco, Inc. v. Eizo Corp. & Eizo Inc., Appeal No. 2017-2086 (Fed. Cir. Apr. 3, 2018) is the latest federal district court decision analyzing the rule against recapture under 35 U.S.C. § 251. The Court of Appeals for the Federal Circuit summarily affirmed the lower court’s decision under Rule 36. As patent applicants are increasingly using the reissue process to try to remove limitations relied upon to distinguish prior art during an original prosecution – in many instances to broaden claim scope to cover a competitor’s product – Barco follows a judicial trend of courts stamping down on this abuse of the reissue statute. Violation of the rule against recapture has been treated as a question of law reserved for the court as opposed to the jury. Courts analyzing the issue use a three step test: 1) whether, and in what respect, the reissue claims are broader in scope than the original patent claims; 2) whether the broader aspects of the reissue claims relate to subject matter surrendered in the original prosecution; and 3) whether the reissued claims were materially narrowed in other respects to avoid the recapture rule. Pannu v. Storz Instr., 258 F.3d 1366, 1371 (Fed. Cir. 2001)....

Inadvertent Production Deemed Waiver of Privilege Where Counsel Was Reckless and Clawback Agreement Was Unclear

by Caroline E. Oks

Posted in E-Discovery: Legal Decisions and Court Rules

On April 4, 2018

The Southern District of Ohio recently clarified the relationship between FRE 502 and clawback agreements in its finding that a party’s counsel was “completely reckless” in producing the same privileged documents on two separate occasions. In Irth Sols., LLC v. Windstream Commc’ns LLC, the parties entered into a clawback agreement that was memorialized in three bullet points in an email exchange between counsel. The agreement provided that an inadvertent disclosure (a term not defined in the agreement) would not waive the attorney-client privilege. The parties further agreed that, “based on the scale of the case,” it was unnecessary to ask the court to enter an order under Rule 502(d), whereby the court may order “that the privilege or protection is not waived by disclosure connected with the litigation pending before the court.” Defendant then produced documents, 43 of which defendant later discovered were privileged. Defense counsel argued the reviewing defense attorney failed to designate the documents privileged because he was not familiar with the name of defendant’s in-house counsel and the second level review neither caught this error nor flagged search words such as “legal.” Upon discovering the error, defense counsel requested a clawback of the 43 documents. Plaintiff’s counsel sequestered the 43 documents but challenged the clawback agreement’s application, arguing the disclosure resulted from...