Gibbons Law Alert

Gibbons Law Alert Blog

NJDEP Announces Change to Remediation Standards for Certain Contaminants

Posted in Development/Redevelopment / Environmental and Green Issues

On September 20, 2017

On September 18, 2017, the New Jersey Department of Environmental Protection (“NJDEP”) announced updated soil remediation standards for 19 contaminants. The updates are based on changes to toxicity data for the specified contaminants maintained by the United States Environmental Protection Agency in the agency’s Integrated Risk Information System database. Responsible parties and others conducting cleanups should consult with their Licensed Site Remediation Professionals and other environmental consultants regarding the applicability of the new standards to their sites. The new standards are in effect as of September 18, 2017. A copy of the updated standards can be viewed at NJDEP’s website.

Courts Send Signal That Care in Drafting Arbitration Provisions is Key

by Susan L. Nardone

Posted in Alternative Dispute Resolution

On September 5, 2017

Two recent decisions, one by the Third Circuit Court of Appeals and the other by the New Jersey Appellate Division, offer some interesting insight into the validity and viability of arbitration clauses that send employment-related disputes and claims out of the court system and into arbitration. In Moon v. Breathless, the Third Circuit Court held that an arbitration provision in an exotic dancer’s independent contractor agreement did not encompass her statutory FLSA and state wage-and-hour claims. Appellant Alissa Moon (“Moon”), a dancer at Breathless Men’s Club (“the Club”), filed a putative collective and class action against the Club in the District of New Jersey alleging violations of the Fair Labor Standards Act, the New Jersey Wage Payment Law and the New Jersey Wage and Hour Law. The Club moved to dismiss based upon an arbitration provision contained in the Independent Dancer Rental Agreement (the “Agreement”) that Moon signed. The Agreement also contained a provision stating Moon was an independent contractor and not an employee. The District Court denied the Club’s motion to dismiss and directed the parties to engage in limited discovery on whether Moon’s claims were subject to a valid arbitration provision. Following discovery, the District Court found that Moon’s claims fell within the scope of the Agreement’s valid arbitration provision and granted the...

Constitutionality of IPRs and PGPs

by Estelle J. Tsevdos, Ph.D.

Posted in Biotech / Patent / Pharmaceuticals / USPTO

On September 5, 2017

Recently, the Supreme Court granted certiorari in Oil States Energy Services v. Green’s Energy Group, Case 16-712 that may have implications on the constitutionality of America Invents Act (AIA) patent review proceedings such as Inter Partes Review (IPRs) and Post Grant Proceedings (PGPs). The case being reviewed involved a fracking patent granted to Oil States. Green’s Energy petitioned to have the Oil States patent reviewed in an IPR (6,179,053). The IPR resulted in the Oil States patent claims being held unpatentable. But, upon review at the Federal Circuit, Oil States challenged the decision and added that IPRs were not allowed under Article III and the Seventh Amendment of the Constitution. In particular, the Oil States argument advanced that the patents must be tried before a jury because invalidity of patent claims traditionally have been a jury issue before a court of competent jurisdiction. The Oil States argument then indicated that Congress could not delegate that right to an administrative agency. The Federal Circuit affirmed the USPTO’s IPR decision of invalidity, without the issuance of an opinion. Following that decision, Oil States petitioned for certiorari to the Supreme Court regarding three issues. The one issue was whether IPR was in violation of the Constitution’s Article III provision since there was no jury trial adjudication of the...

New Jersey Appellate Division Warns Planning Boards That Avoiding Controversy Risks Automatic Approval

by Jennifer P. Smith

Posted in Development/Redevelopment

On August 30, 2017

When reviewing land use applications, “the rule of law is paramount and cannot be sidestepped to avoid deciding unpopular land use applications.” In issuing this reminder, the New Jersey Appellate Division recently affirmed the automatic approval of a site plan application that modified a planned unit development approval (PUD) dating back to 1997, underscoring the principle that land use applications are to be adjudicated on the merits in a timely fashion. In Shipyard Associates v. Hoboken Planning Board, et al., an unpublished decision, a developer was granted PUD approval in 1997 for a mixed use waterfront project that included residential high-rise apartment buildings, commercial retail space, a parking garage, and tennis courts. The developer constructed the project, except for the tennis facilities, and, in 2011, applied for site plan approval to build two additional residential towers instead of the tennis courts. Although the applicant was deemed complete in October 2011, the matter was not scheduled to be heard at a Planning Board meeting until approximately eight months later. In the interim, the City sued the developer seeking to enforce its perceived rights under the developer’s agreement for the 1997 PUD approval. Due to the filing of that lawsuit, when the Planning Board finally turned to the application in July 2012, the Planning Board refused to consider...

New Jersey Legislature Considers Corporate and Business Law Reforms

by Jonathan S. Liss and Michael D. DeLoreto

Posted in Corporations

On August 28, 2017

A series of bills that would reform the New Jersey Business Corporation Act (“NJBCA”) are slowly churning their way through the New Jersey State Legislature. The pending legislation is modeled upon provisions of the “Delaware Business Corporation Law” and the recommendations of the “New Jersey Corporate and Business Law Study Commission.” In sum, the proposed revisions would generally benefit corporate boards of directors and modernize provisions of the NJBCA. Inspections of Corporate Books and Records Assembly Bill 2975 (Pinkin)/Senate Bill 2238 (Diegnan) modifies the NJBCA to allow corporations to impose reasonable limitations or conditions on the use or distribution of requested corporate books and records. While the bill does not define such “limitations and conditions,” the legislative statement accompanying A-2975/S-2238 provides an example of conditioning the receipt of requested materials on the demanding shareholder agreeing to customary confidentiality obligations. The bill preserves the ultimate authority of a court to decide and order relief in actions brought by shareholders for inspection of materials. On January 23, 2017, A-2975 passed the General Assembly by a vote of 69-0. On June 19, 2017, S-2238 passed the Senate Commerce Committee by a vote of 4-0. This bill is now awaiting a vote in the full State Senate. Derivative Proceedings and Shareholder Class Actions Assembly Bill 2970 (Pinkin)/Senate Bill 2236 (Diegnan) gives...

Dos and Don’ts for Online Retailers Listing Terms and Conditions on Their Websites

by Caroline E. Oks

Posted in Class Action Defense

On August 15, 2017

A recent California federal decision states clear guidelines for consumer-focused companies’ online terms and conditions. In McKee v. Audible, Inc., the plaintiff signed up on his smartphone for a free one-month trial with Audible, an Amazon subsidiary offering audiobook subscription services. Thereafter, the plaintiff filed a putative class action against Audible and Amazon.com taking issue with Audible’s policy regarding unused credits. Defendants then filed a motion to compel arbitration. The motion to compel arbitration was granted as to Amazon, but denied as to Audible. The court found that while both companies’ arbitration agreements were valid and enforceable, Audible’s customer user agreements were not clearly displayed when consumers signed up for the service online and were blocked by certain images when using the Audible app. Therefore, customers were not given the requisite actual or constructive notices of the terms of service, such that they could mutually assent to the terms of service in order to create a valid and enforceable contract. The court offered the following guidelines for constructive notice in internet commerce: (1) “terms of use” will not be enforced where there is no evidence that the website user had notice of the agreement; (2) a user should be encouraged by the design and content of the website and the agreement’s webpage to examine the...

Defendant Acting With “A Pure Heart But Empty Head” Not Subject to Spoliation Sanctions Under Amended Rule 37(e)

by Caroline E. Oks

Posted in E-Discovery: Legal Decisions and Court Rules

On August 7, 2017

A recent decision denying a motion for spoliation sanctions highlights that a moving party must show that even clearly spoliated ESI is not available from other sources to qualify for an award of any form of sanction under Rule 37(e). In Snider v. Danfoss, LLC, the Northern District of Illinois held that a defendant’s admitted and erroneous destruction of duplicative ESI did not prejudice the plaintiff and therefore sanctions were not warranted. In other words, “no harm, no foul.” Plaintiff Snider worked for Danfoss for a number of years, during which time she was sexually harassed by another employee. Plaintiff informed her acting supervisor of the harassment, and was later transferred to a different position, which she viewed as a demotion and retaliation for her complaint. Approximately one week after the transfer, Plaintiff’s counsel sent a generalized, “preserve all evidence” letter to Danfoss. She then quit, and, pursuant to Danfoss’s policy, her emails were deleted 90 days after her employment ended. Plaintiff’s acting supervisor also later left Danfoss’s employment, and her emails were deleted in accordance with Danfoss’s auto-deletion policy. After the case was filed, Plaintiff deposed her acting supervisor, who suffered from a case of “testimonial amnesia” and was unable to recall a variety of facts, even benign, irrelevant facts. Plaintiff thereafter sought production...

Mere Fact That Application Would Bring Development Closer Into Compliance With Zoning Code Insufficient to Warrant Grant of Site Plan Approval and Variance, N.J. Appellate Division Affirms

by Gibbons P.C.

Posted in Development/Redevelopment

On August 2, 2017

The New Jersey Appellate Division recently affirmed denial of an application for site plan approval and variance relief despite an applicant’s contention that the application’s issues identified by the Planning Board were too minor to justify denial of the application that would bring the subject property into conformity with the zoning code. Although unpublished and nonbinding, the decision confirms New Jersey courts’ broad deference to local boards in this state, making clear that if a land use board’s legitimate concerns are not addressed by an application, the mere fact that the application would bring a property into conformity with the local zoning code is insufficient to secure a variance under New Jersey’s Municipal Land Use Law. In World Wheat Foundation, Inc. v. Planning Board of the Township of Saddle River, et al., a church-based, not-for-profit organization, sought site plan approval and variance relief to convert a property that previously served as a residential facility for the elderly into a vocational school to assist Korean families with language and the arts. The previous facility ceased operations more than two years prior to the application. The property was situated in the Township’s Secondary Business Zone, in which the former residential facility was not a permitted use, but the proposed vocational school was permitted. The applicant also sought...

Slow Down You’re Moving Too Fast: Third Circuit Directs District Court to Resolve Motion to Compel Arbitration Before Motion to Dismiss

by Gibbons P.C.

Posted in General Litigation

On August 2, 2017

In a recent decision, the Third Circuit made it abundantly clear that a motion to compel arbitration must be decided before a Rule 12(b)(6) motion to dismiss. Joshua Silfee filed a lawsuit against ERG Staffing Service, his former employer, in the Middle District of Pennsylvania, claiming the company’s payroll policies violated state law because workers were required to use a fee-carrying debit card. ERG filed a motion to compel arbitration pursuant to Section 4 of the Federal Arbitration Act, asserting that the arbitration agreement between Silfee and ERG’s payroll vendor precluded the suit against ERG. ERG also filed a Rule 12(b)(6) motion to dismiss Silfee’s complaint based on the merits of his state law claims against the company. The district court decided to delay consideration of ERG’s motion to compel arbitration and denied the company’s motion to dismiss the case. ERG appealed. The Third Circuit concluded that the district judge erred in delaying the arbitrability inquiry, explaining that arbitrability is a “gateway” issue and that, after a motion to compel arbitration is filed, a court “must refrain from further action until it determines arbitrability.” The Third Circuit noted that “[t]he seeds of the District Court’s confusion may have been sown by our decision in Guidotti,” where the court explained that a motion to compel arbitration...

Natural Phenomenon Takes Back Seat to Analysis

by Gibbons P.C.

Posted in Patent / Pharmaceuticals

On August 1, 2017

In a recent decision of the CAFC entitled Millennium Pharmaceuticals, Inc. v. Sandoz Inc., et al, a consolidated appeal of cases 2015-2066, 2016-1008, 2016-1009, 2016-1010, 2016-1109, 2016-1110, 2016-1283, and 2016-1762, decided July 17, 2017, Judge Newman writing the opinion for a unanimous panel reversed a decision of the District Court for the District of Delaware holding the patent (US 6,713,446) on the cancer drug Velcade® invalid for obviousness. That drug had been used clinically to successfully treat multiple myeloma and mantle cell myeloma. The active moiety in Velcade® was the compound D-mannitol N-(2-Pyrazine)carbonyl-L-phenylalanine-L-leucine boronate. That compound arose as a result of a yearlong quest to solve the instability problem with solutions of the non-sugar containing bortezomib compound. When the inventor of the ‘446 patent (a scientist at the NCI and the University of Kansas) lyophilized bortezomib in the presence of mannitol he obtained the aforesaid boronate which had covalently incorporated the mannitol producing a new compound. This compound proved to be not only stabile on storage and in solution but also when administered to a subject functioned as a prodrug for bortezomib. No prior art was presented that taught or suggested a compound whose structure presented a basis for an obvious rejection using standard analysis of a pharmaceutical compound claim. In the District Court case,...