Gibbons Law Alert

Gibbons Law Alert Blog

Medical Marijuana Reforms on the Horizon

On April 2, 2018

Governor Phil Murphy and the New Jersey Legislature are taking actions towards expanding the medical marijuana program. The Governor announced new rules and regulations to reduce barriers to access for medical marijuana. These include expanding the list of debilitating medical conditions eligible for treatment with cannabis, permitting currently licensed Alternative Treatment Centers (ATCs) to dispense at satellite locations, eliminating the physician registry for doctors who prescribe marijuana, and soliciting new applicants for ATC permits. These actions stem from the Administration’s report on ways to expand access to marijuana for medical purposes. The New Jersey General Assembly Health and Senior Services Committee also recently approved legislation that would vastly expand the State’s existing medical marijuana program. The bill, A-3740, would allow medical marijuana to be prescribed for any condition and give greater flexibility for patients and caregivers to purchase and transport medical marijuana. Most importantly, and unlike the current medical marijuana distribution system where ATCs both cultivate and dispense medical marijuana, A-3740 creates a separate manufacturing and licensure system. The bill allows for the licensure of 34 medical marijuana dispensaries that would be authorized to dispense marijuana and marijuana products to patients. The legislation would also permit licensure of six medical marijuana cultivator-processors to process marijuana and marijuana infused/derived products, which it may supply to medical marijuana dispensaries....

SDNY Expands Interpretation of “Possession, Custody, or Control” – Orders Adverse Inference Against Company for Spoliation of Text Messages by Non-Party, Independent Contractor on Personal Phone

by Gibbons P.C.

Posted in General Litigation

On April 2, 2018

In Van Zant, Inc. v. Pyle, et al., 270 F. Supp. 3d 656 (S.D.N.Y. 2017), the Southern District of New York ordered an adverse inference against Los Angeles-based Cleopatra Entertainment LLC (“Cleopatra”), based on the conduct of its independent contractor and non-party to the case, Jared Cohn (“Cohn”). Cohn had been hired by Cleopatra to write and direct a motion picture about the 1977 plane crash that killed two members of the Southern rock band Lynyrd Skynyrd. During the film’s production, Cleopatra and Cohn enlisted the aid of Lynyrd Skynyrd drummer Artimus Pyle (“Pyle”), who, along with other surviving band members (and the estates of deceased members), was party to a 1988 Consent Order that set limits on the permissible use of the Lynyrd Skynyrd name; the likenesses, names, and biographical material of its members; the band’s history; and related items. The Consent Order also detailed the respective parties’ rights to royalties from Lynyrd Skynyrd music, merchandise, and other proceeds, and prohibited the parties from “implicitly or through inaction authoriz[ing] the violation of the terms [of the agreement] by any third party.” Pyle initially did not make Cleopatra aware of the Consent Order, but plaintiffs (also parties to the 1988 Consent Order) sent Cleopatra a copy, along with a cease and desist letter, after learning...

New Jersey Legislature Passes Sweeping Pay Equity Legislation

by Gibbons P.C.

Posted in Discrimination

On March 27, 2018

Yesterday, the New Jersey Senate and Assembly passed comprehensive pay equity legislation. The legislation passed both houses with significant bi-partisan support and it is expected that Governor Murphy will soon sign the legislation into law. Once in effect, the legislation, which amends the New Jersey Law Against Discrimination (“the LAD”), will be the most wide-ranging pay equity law in the United States. Significantly, unlike most pay equity laws passed in recent years by other states which target unlawful pay discrimination of women, the New Jersey law will prohibit pay discrimination of employees in any protected class. Specifically, the legislation makes it an unlawful employment practice to discriminate against a member of any protected class by compensating the employee at a lesser rate of pay, benefits, or other forms of compensation than an employee who is not a member of the protected class for “substantially similar work.” The “substantially similar” standard, which diverges from the “equal work” standard of the federal Equal Pay Act, mirrors the California Fair Pay Act. Moreover, the legislation provides that comparisons of wage rates shall be based on wage rates in all of an employer’s operations or facilities regardless of where located. An employer will be permitted to pay a different rate to an employee if it can show that the...

New Jersey Picks Its Opportunity Zones

by Paul J. St. Onge, Peter J. Ulrich and Michael D. DeLoreto

Posted in Economic Development

On March 26, 2018

The Murphy Administration announced it has recommended census tracts within 75 New Jersey towns to the U.S. Department of Treasury for inclusion in the newly-created federal Opportunity Zones Program. 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) stock in a domestic corporation; (ii) any capital or profits interest in a domestic partnership; and (iii) tangible property used in a trade or business of the Opportunity Fund that substantially improves the property. The Program is designed...

D.C. Circuit’s Rejection of FCC’s 2015 “Autodialer” Definition is Welcome News for Businesses in TCPA Class Actions

by Michael R. McDonald

Posted in Class Action Defense

On March 23, 2018

On March 16, 2018, the D.C. Circuit Court of Appeals issued a long awaited decision in its review of the Federal Communications Commission’s (FCC) 2015 Declaratory Ruling and Order, which among other things, had sought to clarify various aspects of the Telephone Consumer Protection Act’s (TCPA) general bar against using automated dialing devices (ATDS) to make uninvited calls or texts messages. The FCC’s 2015 Order was largely viewed by businesses as having greatly expanded the scope of the TCPA, opening the floodgates of class action litigation against businesses utilizing virtually any type of text messaging to communicate ads to customers. In ACA International v. FCC, the D.C. Circuit, among other things, struck down the Commission’s broad definition of autodialer. The TCPA generally makes it unlawful to call a cell phone using an ATDS, i.e., “equipment which has the capacity-(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Id. § 227(a)(1). The FCC’s 2015 Order declined to define a device’s “capacity” in a manner confined to its “present capacity,” but rather, construed a device’s “capacity” to encompass its “potential functionalities” with modifications such as software changes. Thus, under the Commission’s 2015 interpretation, calls or texts made with a device having the capacity...

Third Circuit Awards $10 Million to Plaintiff on Summary Judgment in Recent RICO Case

by Gibbons P.C.

Posted in General Litigation

On March 19, 2018

The Third Circuit recently affirmed a summary judgment in favor of a plaintiff for more than $10 million in damages on federal and state RICO claims. In the process, the court shed light on what evidence shows an “intent to defraud a financial institution” as required to establish bank fraud. In Liberty Bell Bank v. Rogers, et al., a bank sued an individual and entities he owned and controlled, alleging, among other things, violations of the federal and New Jersey RICO statutes. The bank alleged that the defendants developed a scheme through which they fraudulently obtained loans from the bank and further defrauded it by making payments on the loans using a check-kiting scheme. On a motion for summary judgment – in response to which the individual pro se defendant failed to file a responsive statement of material facts, thereby enabling the court to deem certain facts admitted – the district court entered summary judgment in favor of the bank, holding the defendants jointly and severally liable to the bank for more than $10 million, plus attorneys’ fees and costs. The defendants appealed, and the Third Circuit affirmed. In particular, the court affirmed the district court’s finding that defendants had committed the predicate crime of bank fraud, which makes it an offense to execute, or...

Plaintiffs No Longer Need a “Nexus” to Pennsylvania in Order to Bring Claims Under the Unfair Trade Practices and Consumer Protection Law

by Caroline E. Oks

Posted in Class Action Defense

On March 16, 2018

In answering a certified question from the Third Circuit, the Pennsylvania Supreme Court recently issued a decision that greatly expands the reach of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL). In Danganan v. Guardian Protection Services, the Supreme Court held that “a non-Pennsylvania resident may bring suit under the UTPCPL against a [Pennsylvania]-headquartered business based on transactions that occurred out-of-state.” Plaintiff Danganan contracted with Guardian Protection Services (“Guardian”), a Pennsylvania-headquartered business, for home security equipment and services at the plaintiff’s then-home in Washington, DC. The contract contained, inter alia, a choice-of-law provision, stating that the “Agreement shall be governed by the laws of Pennsylvania.” After moving to California, the plaintiff attempted to cancel the agreement, but Guardian continued to bill the plaintiff, claiming the agreement authorized ongoing charges through the contract’s term, regardless of cancellation attempts. The plaintiff brought suit in Pennsylvania state court, and Guardian removed the matter to the United States District Court for the Western District of Pennsylvania. Guardian then moved to dismiss, arguing that the plaintiff had not, pursuant to the UTPCPL, demonstrated a “sufficient nexus” between Pennsylvania and the improper conduct alleged in the complaint. The district court agreed and dismissed the complaint. On appeal, the Third Circuit certified two questions to the Pennsylvania Supreme Court: (1) Whether...

Governor Murphy Delivers Fiscal Year 2019 Budget Address

by Michael D. DeLoreto

Posted in State Legislative and Budget Matters

On March 14, 2018

Governor Phil Murphy delivered his first budget address to the New Jersey State Legislature on Tuesday, March 13th. The Governor’s proposed Fiscal Year (FY) 2019 Budget totals $37.4 billion, which is a $2.7 billion increase from the $34.7 billion spending plan enacted in Fiscal Year 2018. The Governor stated that the proposed FY 2019 Budget is “realistic and responsible,” affirms New Jersey’s values, and will begin the process of returning New Jersey to being a “good value for good money.” To accomplish this, Governor Murphy is proposing to: Increase public school spending by $341 million in FY 2019 with the goal of reaching full funding in four years; Invest an additional $83 million in pre-K this year and start a four-year expansion of a statewide program; Make community college tuition free for all in three years by investing an additional $50 million this fiscal year; Add 3,500 new Tuition Aid Grant awards; Triple funding for New Jersey Transit with an additional $242 million in investment; Increase the Earned Income Tax Credit from 35 percent to 40 percent over three years; Provide $3.2 billion in payments to the state pension system; Increase the minimum wage to $11 per hour for state employees; Raise the state property tax deduction to $15,000; and Create a new Child and...

NLRB Vacates Recent Joint Employer Decision

by Gibbons P.C.

Posted in Labor

On March 12, 2018

On February 26, 2018, the National Labor Relations Board (NLRB) rescinded its recent 3-2 decision in Hy-Brand Indus. Contractors, Ltd., 365 NLRB No. 156 (2017), which had restored the traditional standard for determining when multiple entities are joint employers under the National Labor Relations Act (NLRA). The Board’s action stemmed from a determination by the NLRB’s Designated Agency Ethics Official that one of the Board Members who voted in favor of the Hy-Brand decision should not have participated in that decision. The vacatur of the Hy-Brand decision is a setback for the business community. As we previously reported, the Hy-Brand decision overruled the NLRB’s controversial joint employer decision in Browning-Ferris Indus. of Cal., Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015) and restored the decades-old standard that required an entity to actually exercise direct and immediate control over another entity’s essential employment conditions and terms to be a joint employer. In Browning-Ferris, the Board decided that two or more entities could be jointly liable under the NLRA if one of the entities merely reserves the right to indirectly control essential employment conditions and terms of another entity. Once again, this funky joint employer standard as set forth in Browning-Ferris is NLRB law. In a memorandum dated February 9, 2018, the Board’s Inspector General, David P....

New Jersey HMFA Announces 2018 Tax Credit Round – Applications Due July 24, 2018

by Cameron W. MacLeod

Posted in Development/Redevelopment

On March 8, 2018

The New Jersey Housing and Mortgage Finance Agency (HMFA) announced Tuesday that it is now accepting applications for federal low-income housing tax credits (“LIHTC”) for the development of family, senior, and supportive housing projects throughout New Jersey. This announcement relates to the competitive LIHTC, which provides a 9% tax credit as a mechanism of funding construction of affordable housing in New Jersey. HMFA has announced that there is a funding tranche of approximately $28 million dollars in LIHTC funding available. Applications for the family, senior, and supporting housing rounds are due July 24, 2018 at noon.