Gibbons Law Alert

Gibbons Law Alert Blog

On June 23, 2017

Intellectual Asset Management (IAM) has again included Gibbons P.C. in its 2017 edition of IAM Patent 1000: The World’s Leading Patent Professionals. David E. De Lorenzi, Chair of the Gibbons Intellectual Property Department, and Department Counsel George W. Johnston and George M. Gould were also recognized individually among IAM’s leading patent practitioners. This is the seventh straight year that IAM has recognized the firm. To compile the IAM Patent 1000, the IAM team conducts extensive research over the course of five months with thousands of private practice attorneys based in dozens of countries, as well as the users of their services, in order to identify the practitioners and practices that are considered to excel at providing patent-related legal services. Among other accolades, IAM recognized that “intellectual property is a central pillar at general practice Gibbons” while also recognizing that the firm’s IP experience “across the board means that patents are prosecuted with aplomb, technology transfers are swiftly sewn up and high-stakes cases are favourably resolved.” Moreover, clients surveyed by IAM remarked that when working with the Gibbons Intellectual Property Department, the client’s “long-term business interests are always kept front and centre.” David E. De Lorenzi was again selected by IAM for his patent litigation and transactional practice: “David is a smart, sensible, practical and cost-effective...

Appellate Division Holds UHAC Regulations Preempt Local Code Provisions on Affordability Controls for New Developments

by Cameron W. MacLeod

Posted in Development/Redevelopment

On June 22, 2017

In an unpublished decision entitled Avalon Princeton, LLC v. Princeton et al., the Appellate Division has affirmed that certain state affordable housing regulations preempt pre-existing municipal ordinances, setting a period of affordability controls for “at least 30 years” on new construction. Although not precedential, this decision provides insight on how courts may view some of the regulatory framework, particularly regarding municipal versus state regulation of newly constructed affordable units, and potentially forecasts much more flexibility for municipalities in controlling their current and future stock of affordable housing. In order to assure that affordable housing units remain affordable for a period of time, municipalities have long required that properties that are affordable to low- and moderate-income families be encumbered with some form of restrictive covenant running with the land for both rental and owner-occupied properties. The length of term of these restrictions have varied, based on the municipality and the nature of the units, but typically ran for 30 years from the date of first occupancy, and traditionally have automatically expired after that period. Following the introduction of the Fair Housing Act, these standards varied as COAH’s regulations were refined and developed over the course of the various iterations of the First, Second, and Third Round Rules. In 2004, however, the Housing and Mortgage Finance Agency...

Opinion from Eastern District of New York May Have Opened the Door to a New Defense for Potential CERCLA “Arrangers”

by Jacob J. Franchino

Posted in Environmental and Green Issues

On June 20, 2017

In Town of Islip v. Datre, a recent decision out of the Eastern District of New York, the court adopted an approach to “arranger liability” under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) that holds parties cannot be liable unless they knew that the substances they arranged for disposal were, in fact, hazardous. The Islip court’s approach represents a departure from traditional considerations of arranger liability and, if followed by future courts, may present a defense for potentially responsible parties who, though intentionally arranging for disposal of materials which ultimately lead to contamination, lacked specific knowledge that such materials contained hazardous substances. The Islip case arises out of illegal dumping of hazardous construction and demolition debris that occurred at a public park (“the park”) in Islip, New York between 2013 and 2014. Though the case involves an elaborate and bizarre dumping scheme involving, among many others, a local church, the parks department, and a number of haulers, as well as the eventual filing of criminal charges, it is sufficient for present purposes to distill the facts as follows. Relevant to the issue of arranger liability, a civil complaint filed by the Town of Islip (“the Town”) alleged that two companies (the “arranger defendants”) acted as brokers between those defendants who generated the construction...

Proposed N.J. Assembly Bill Allocates a Share of PILOT Funds to School Districts

by Russell B. Bershad

Posted in Transactional Real Estate and Leasing

On June 19, 2017

As reported in the June 16, 2017 NAIOP WeekEnder, a bill is pending in the Assembly requiring five percent of each annual service charge under a PILOT agreement in connection with a residential redevelopment be remitted to the school district. At present, a municipality retains 95 percent of PILOT payments, the other five percent being remitted to the county. Conventional real estate tax payments are divided among the town, county, school district, and some other stakeholders, such as a fire district, municipal open space, etc. The splits vary, but the school district portion is substantial, often the largest share. To use one example, in Sayreville, the 2016 allocation to the school district is 55.74%; the municipal share is 26.49% and the county share is 14.79%. It is often contended that PILOTs are unfair to school districts because none of the PILOT payment is allocated to the school district. Indeed, school districts have challenged PILOT agreements in court. See, for example, the unreported 110 page, 2005 decision of Mercer County Assignment Judge Feinberg Hamilton Township Board of Education vs. Township of Hamilton and 240 Princeton Urban Renewal, LLC. Whether or not PILOTs truly adversely impact school district budgets is a matter of debate. Regardless of the merits of the debate, it is fair to ask if remitting five percent of PILOTs...

Federal DOL Rescinds Joint Employer and Independent Contractor Guidance

by Susan L. Nardone

Posted in Wage and Hour

On June 19, 2017

On June 7, 2017, the U.S. Department of Labor (“DOL”), Wage and Hour Division (“WHD”), announced that it was rescinding two significant and heavily-criticized Obama-era Administrator’s Interpretations, the first on joint employer liability under the Fair Labor Standards Act, 29 U.S.C. § 1801 et seq. (“FLSA”) and the Migrant and Seasonal Agricultural Worker Protection Act, 29 U.S.C. § 201 et seq. (“MSPA”) (the “Joint Employer AI”), and the second on independent contractor misclassification under the FLSA (the “Independent Contractor AI”). In its June 7th statement concerning the rescissions, the DOL made its intentions clear: Removal of the two administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act or Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the Department’s long-standing regulations and case law. The Department will continue to fully and fairly enforce all laws within its jurisdiction including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act. Although neither AI constituted a legal precedent, the January 2016 Joint Employer AI presented the DOL’s analysis of the joint employer principles under caselaw interpreting the FLSA and the MSPA. Gibbons issued an alert about the Joint Employer AI when it was first published. The underlying caselaw is not affected by the DOL’s withdrawal...

Supreme Court Rejects Class Action Plaintiffs’ Attempts to Circumvent Rule 23(f)

by Caroline E. Oks

Posted in Class Action Defense

On June 15, 2017

As previously discussed on this blog, the Supreme Court granted certiorari to address the question of whether federal courts of appeals have jurisdiction to review an order denying class certification after the named Plaintiffs voluntarily dismissed their claims with prejudice. In the June 12, 2017 decision in Microsoft Corp. v. Baker, the high court answered this question with a very resounding “no.” In Baker, a putative class of owners of Microsoft Corporation’s Xbox 360® video game console filed suit, alleging that the console suffered from a design defect that gouged game discs. Microsoft opposed Plaintiffs’ motion to certify the class. The District Court denied certification, citing comity considerations and relying on the class certification denial in a similar case. The Ninth Circuit denied the Plaintiffs’ 23(f) petition for interlocutory appeal. Plaintiffs then voluntarily dismissed the case with prejudice for the express purpose of obtaining immediate Ninth Circuit review of the District Court’s denial of class certification. Plaintiffs filed an appeal from the final judgment, challenging the denial of class certification, but not the order dismissing the case with prejudice. The Ninth Circuit held that it had jurisdiction under 28 U.S.C. § 1291 because the stipulated dismissal did not involve a settlement, and thus was a sufficiently adverse and appealable, final decision. The Supreme Court disagreed....

With the 2017 Primary Over, It’s Murphy versus Guadagno for Governor

by Michael D. DeLoreto

Posted in Elections

On June 8, 2017

On Tuesday, June 6, 2017, New Jersey voters went to the polls to select their party’s nominees for Governor and all 120 seats in the Legislature. After a 2016 election cycle full of surprises, New Jersey’s 2017 primary resulted in wins for the gubernatorial front-runners, Democrat Phil Murphy and Republican Kim Guadagno. Those legislative districts with contested primaries also resulted in no major upsets and saw the expected candidates emerge with victories. Governor’s Race Former Ambassador Phil Murphy won the Democratic primary with 48 percent of the vote (241,353). His next closest competitor, former U.S. Treasury official Jim Johnson, garnered 22 percent (109,260), followed by Assemblyman John Wisniewski who also received 22 percent (107,872). Senator Raymond Lesniak came in fourth with 5 percent (24,136). Lt. Governor Kim Guadagno won the Republican primary with 47 percent of the vote (113,404). Assemblyman Jack Ciattarelli tallied 31 percent (75,275). In both contests, turnout was low. About one-quarter of Democratic voters, and only 20 percent of Republicans, participated in the primary. With New Jersey and Virginia being only states to hold a gubernatorial election in 2017, national groups are expected to make these two elections a referendum on President Trump and his agenda. Legislative Races Of the 40 legislative districts, only a handful saw competitive primary contests. In Legislative...

Federal Circuit Overturned as SCOTUS Creates a New Patent Venue Rule

by Christine A. Gaddis

Posted in Patent

On May 26, 2017

In TC Heartland LLC v. Kraft Foods Group Brands LLC, the Supreme Court fundamentally changed the national patent litigation landscape when it considered “where proper venue lies for a patent infringement lawsuit brought against a domestic corporation” and held that “[a]s applied to domestic corporations, ‘reside[nce]’ in § 1400(b) refers only to the State of incorporation.” In so holding, the Supreme Court altered the established patent venue rule – that a corporation is deemed to reside anywhere in which it is subject to personal jurisdiction at the time the action is commenced – which was established by the Federal Circuit’s decision in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990). In VE Holding, the Federal Circuit held that the definition of venue in § 1391(c), the general venue statute, also applied to patent cases. The Supreme Court based the TC Heartland decision on its prior ruling in Fourco Glass Co. v. Transmirra Products Corp., 335 U.S. 222 (1957) in which, as it described in TC Heartland, it “definitively and unambiguously” held that “residence” in § 1400(b) “refers only to the State of incorporation” as well as its reasoning that “[t]he current version of § 1391 [as amended in 2011] does not contain any indication that Congress intended to alter...

Federal Tax Reform and the Potential Repeal of the Cash Method of Accounting

by Peter J. Ulrich

Posted in Federal Legislation

On May 26, 2017

In the wake of the introduction by President Trump of his Tax Reform proposal on April 26, 2017, Congress, especially the U.S. House of Representatives Committee on Ways and Means, will be considering various methods to fund tax rate reductions. The White House formally delivered the President’s proposed budget to Congress on May 23, 2017. One proposal likely to be under consideration is the repeal of the cash method of tax accounting for service businesses, though many experts dispute whether many of the budget’s finer details will ever pass both houses of Congress. Under current law, the cash method of accounting cannot be used for income tax purposes by (i) businesses that sell goods and therefore must keep inventories, and (ii) C corporations with average annual gross receipts of $5,000,000 or more. A taxpayer-favorable exception from the C corporation rule is available for qualified personal service corporations, consisting of personal service corporations (PSCs) in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting, when at least 95% of the stock of such PSCs is owned directly or indirectly by employees performing services in one of such fields. To oversimplify things, this means that law firms pay federal tax based on actual cash receipts, not based upon billings or upon what...

Purported Inventor’s Damaging Deposition Testimony Not Sufficient to Warrant Attorneys’ Fees for Failed Inventorship Challenge

by Gibbons P.C.

Posted in Patent

On May 25, 2017

If you practiced at the pharma-academia interface during the past five decades, you have no doubt heard the mantra it’s about the science and not about the money when issues arose. It was almost always about the money. A case in point is provided by the recent CAFC decision in University of Utah v. Max Planck Gesellschaft. In that case, Max Planck successfully defended a group of ten patents directed to improved methodologies relating to RNA interference, identified as the Tuschl II patents, against a claim to revise inventorship in these patents to name a Utah scientist (Dr. Bass) as sole or joint inventor. The factual basis for the inventorship claim arose from an interaction between Drs. Bass and Tuschl regarding the original methodology in RNA interference set out in a scientific publication identified, as Tuschl I. Such interaction resulted in what was deemed a mini review by Dr. Bass in the scientific journal cell which described the technology and set forth several hypotheses of Dr. Bass including one proposing the ‘3’ overhangs as the enzyme feature that was possibly responsible for the observed activity obtained by the Tuschl technology. During depositions taken in the course of discovery, defendants’ counsel obtained several damaging admissions from Dr. Bass which clearly undermined the claim of the University...