Gibbons Law Alert

Gibbons Law Alert Blog

New Jersey Future Report: Changes to Low Income Housing Tax Credit Selection Criteria Change Locations of Affordable Housing Development

On May 24, 2017

In 2013, the New Jersey Housing and Mortgage Finance Agency made significant changes to the Qualified Allocation Plan (QAP), putting in place caps on development in areas with significant concentrations of poverty and adding additional criteria to encourage development in areas that would grant low- and moderate-income families a better chance at greater economic opportunity. Specifically, these changes encouraged development in transit oriented districts and areas with ready access to public transit, as well as encouraging development in areas with high-quality, well performing schools. In a recent study, New Jersey Future has found that these changes to the QAP have effectively implemented a policy shift in moving a significant amount of affordable housing construction out of poverty-stricken areas and reallocating such construction to more suburban areas of the State. Prior to 2013, roughly half the tax credits awarded were for economically distressed areas; after the changes to the QAP, that allocation is down to approximately 20%. More projects are being awarded tax credits in suburban areas with transit access and quality schools due to these changes in statewide policy as announced in the QAP, and this trend will likely make the limited number of tax credits allocated to urban areas more competitive as well. Click here to read New Jersey Future’s summary of their report.

Proper Planning Means You Do Not Need to Shed Tears When Hit with the Likes of WannaCry

by John T. Wolak

Posted in Privacy and Data Security

On May 17, 2017

Since Friday, May 12, over 200,000 companies from over 150 countries have become victims of a massive cyber-attack from the ransomware variant WannaCry (also known as WCry or WanaCryptor). The attackers demanded payment of $300 in Bitcoin from each victim to restore access to files that the ransomware encrypted. The attackers stated that the price of file retrieval would elevate to $600 after a short period of time, and if the company-victim refused to pay, the files would be permanently deleted. Notably, this particular ransomware appears to have been propagated primarily due to a failure to patch a Windows software vulnerability known as EternalBlue, and potentially gave the attackers access to the files they encrypted. Organizations large and small, domestic and international, are among the victims. The WannaCry attack is a stark reminder of the need to have comprehensive information governance and incident response plans in place. Planning for such an attack can be just as important, if not more so, than the response itself, and can block the threat or mitigate the damage, disruption, and liability suffered in the event the organization is a victim of a successful attack. Implement a Written Information Security Program. Knowing how to mitigate the effects of a breach and how to respond upon notice of a breach starts with...

We Have to Talk: New Jersey Appellate Division Invalidates Discharge Permit for Failure of Agency to Consult with Highlands Council

by Paul M. Hauge

Posted in Environmental and Green Issues

On May 10, 2017

In the latest twist in a saga that began in 2002, the New Jersey Appellate Division held that the Department of Environmental Protection’s (DEP) failure to consult with the Highlands Council invalidated a wastewater discharge permit that DEP had issued to the prospective developer of a site located in the “planning area” covered by the state’s Highlands Water Protection and Planning Act (Highlands Act). As a result, the story is guaranteed to continue for several more months and perhaps, in light of likely appeals, several more years. Bellemead Development Corporation first received a New Jersey Pollution Discharge Elimination System (NJPDES) permit for the discharge of treated wastewater from a planned development in Tewksbury in 1998. In 2002, with the permit set to expire the next year, Bellemead applied for a renewal of its original permit. DEP’s denial of the application in 2006 set in motion a chain of administrative hearings, apparent settlements, and new applications that culminated in DEP’s issuance of a new permit in 2014. The Township of Readington and several citizen groups appealed. The appellants pointed to a number of procedural missteps by DEP, but the court focused on the department’s failure to consult the Highlands Council prior to issuing the permit. The Council was created by the 2004 Highlands Act, which regulates...

California Supreme Court’s McGill Decision Creates Confusion Over the Enforceability of Arbitration Clauses That Limit Public Injunctive Relief

by Gibbons P.C.

Posted in Class Action Defense

On May 5, 2017

In McGill v. Citibank, N.A., the California Supreme Court unanimously held that arbitration clauses that waive the right to seek public injunctive relief in any forum are contrary to public policy and therefore unenforceable under California law. The decision is significant, as it potentially limits the type of the relief that is subject to arbitration. It also raises questions regarding the Federal Arbitration Act’s (“FAA”) preemption of California’s so-called Broughton-Cruz rule, which holds that agreements to arbitrate claims for public injunctive relief under the California’s Consumers Legal Remedies Act (“CLRA”), unfair competition law (“UCL”), or the false advertising law are unenforceable in California. Overall, however, the case raises more questions regarding the enforceability of arbitration clauses than it resolves. Plaintiff Sharon McGill (“McGill”) opened a credit card account with Citibank, N.A. (“Citibank”) and purchased a “credit protector” plan (“Plan”) for a monthly premium, which deferred certain credit balances when a qualifying event, such as unemployment, occurred. Although McGill’s original credit card agreement did not contain an arbitration provision, Citibank sent McGill notices in 2001 and 2005 which stated that all claims were subject to arbitration, regardless of the remedy sought, and waived the cardholder’s right to bring any claims on a representative or class-action basis. McGill filed a class action alleging violations of CLRA, UCL,...

NLRB Regional Director Continues Board’s Expansion in Higher Ed

by Gibbons P.C.

Posted in Labor

On May 2, 2017

A National Labor Relations Board (NLRB) regional director has decided that student resident advisors (“RAs”) are statutory employees under the National Labor Relations Act (NLRA). In George Washington Univ., the regional director ordered that an election take place May 3rd, so that the student RAs can decide whether to unionize through a secret ballot process. The decision is the latest in a string that expands the NLRA’s reach at colleges and universities, and comes on the heels of a memorandum authored by the Board’s general counsel that broadly interprets those decisions. Facts George Washington University requires all undergraduate students to live in residence halls until their senior year as part of the “student experience.” The university staffs its residence halls with student RAs whose role is to assist other students living in the residence halls and build relationships with and among them. The student RAs have wide discretion in performing their role, including the activities they choose to build relationships. Very few student RAs serve in the role for more than a year. There are, of course, parameters around being a student RA. They must be full-time undergraduate students who have completed at least one year of studies and are in good standing at the university. Individuals interested in becoming student RAs undergo an application and...

Sovereign Impunity?: State Cannot Be Sued Under New Jersey Spill Act for Pre-Enactment Discharges

by Paul M. Hauge

Posted in Environmental and Green Issues

On May 1, 2017

Since its original enactment in 1976, New Jersey’s Spill Compensation and Control Act (commonly known as the Spill Act) has been amended no fewer than ten times. The New Jersey Supreme Court had to grapple with that complicated history in its recent decision in NL Industries, Inc. v. State of New Jersey, No. A-44-15. Reversing the 2015 opinion of the Appellate Division, on which we have already written, the Court held that while the original statute made New Jersey subject to Spill Act liability by including the State in the definition of a “person,” subsequent amendments that (among other changes) expanded some portions of the statute to cover pre-enactment discharges did not “clearly and unambiguously” abrogate the State’s sovereign immunity for pre-enactment activities. As a result, the State can never face Spill Act liability associated with its discharges that occurred before the statute’s effective date of April 1, 1977. The case concerned the remediation of a contaminated site on the shoreline of Raritan Bay with an estimated cleanup cost of $79 million. Development plans for the area in the 1960s led to a proposal to construct a seawall. At least some of the material used in the seawall, which was completed in the early 1970s, allegedly consisted of furnace slag from a lead smelting facility operated...

21st Century Cures Act Lands in Federal Budget Blueprint

by David J. Pascrell and Michael D. DeLoreto

Posted in Healthcare

On April 27, 2017

President Trump’s proposed FY 2018 Budget (a/k/a the “skinny budget”) presented a departure from his predecessor’s proposed annual budgets – namely a $54 billion increase in defense and military spending paired with corresponding cuts to virtually every other federal department. But one area President Trump did not cut was the implementation of the 21st Century Cures Act (the “Cures Act”), which also happens to be one of the last bills signed into law by then-President Obama. The FY 2018 budget blueprint proposes to appropriate $1.1 billion towards the Cures Act’s implementation in the upcoming fiscal year. The Cures Act strives to expedite the discovery, development, and delivery of new treatments and cures. Those in the medical, biotechnology, and pharmaceutical industry should look to the Cures Act as the potential game-changer that the bipartisan sponsors of the law hoped it would be. Not only does the Cures Act provide the National Institute of Health with significant new funds to speed up research into diseases like cancer and Alzheimer’s, but it also attempts to speed up the process by which new treatments are reviewed and approved by the FDA. The Cures Act also focuses on changes to the treatment of mental health and substance abuse. The reforms included in the Cures Act create a new Assistant Secretary for...

Turning Back the Clock: NJ Appellate Division Holds That ISRA De Minimis Quantity Exemption Still Available Following Withdrawal of NFA

by Gibbons P.C.

Posted in Development/Redevelopment / Environmental and Green Issues

On April 26, 2017

The New Jersey Appellate Division recently announced several interesting holdings regarding the New Jersey Industrial Site Recovery Act (“ISRA”), N.J.S.A. 13:1K-6, et seq. In R&K Associates, LLC v. New Jersey Department of Environmental Protection, Docket No. A-4177-14T1, the Court held that a former owner of an industrial site may apply for an exemption from the ISRA process even when the former owner has not owned the site for many years and elected to not pursue the exemption in the past. The case concerned the final decision of the Department of Environmental Protection (“DEP”) denying a De Minimis Quantity Exemption (“DQE”) under ISRA to the former owner of the subject industrial site. ISRA is the New Jersey law which generally requires owners of industrial sites to remediate on-site environmental contamination or expressly assume responsibility for remediation prior to transferring an ownership of the site. A DQE under ISRA allows an owner of an industrial site to avoid the requirements of ISRA where only trivial amounts of hazardous substances were used on-site. The case has an extensive procedural history with three appeals and numerous DEP actions, beginning with DEP’s withdrawal of a 1997 No Further Action (“NFA”) letter to the former owner. When the former owner sold the site in 1997, it submitted a Preliminary Assessment Report (“PAR”)...

Third Circuit Decides Good Faith Belief of FMLA Abuse Justifies Termination

by Richard S. Zackin

Posted in Family Leave

On April 18, 2017

There are occasions when an employer becomes concerned that an employee on leave under the Family and Medical Leave Act (“FMLA” or “the Act”) is using the leave for purposes not authorized by the Act. That situation was presented in Capps v. Mondelez Global, LLC, a recently issued opinion from the Third Circuit Court of Appeals. There, the Court held that an employer’s good faith belief that an employee was abusing his authorized FMLA leave constituted sufficient grounds on which to terminate the employee. The case provides valuable guidance as to how employers should proceed in such situations. The Facts Frederick Capps worked as a dough mixing machine operator for Mondelez Global (“Mondelez”). Because of a blood flow condition, Capps underwent bilateral hip replacement. At times thereafter, he suffered from severe leg pain and was continuously recertified approximately every six months for intermittent FMLA leave for his condition. On the evening of February 14, 2013, Capps was arrested for driving under the influence and spent the night in jail. He had not reported to work that day having called Mondelez’s FMLA message line complaining of leg pain. On August 7, 2013, Capps pled guilty to a DUI charge and spent 72 hours in jail immediately following the guilty plea. The company did not have a policy...

Supreme Court to Decide Whether Class Action Plaintiffs Can Ring Their Own “Death Knell” Bell

by Caroline E. Oks

Posted in Class Action Defense

On April 18, 2017

The United States Supreme Court heard oral argument last month on the issue of whether a federal court of appeals has jurisdiction to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice. The case comes to the Supreme Court from the Ninth Circuit’s decision in Baker v. Microsoft Corp. In Baker, a putative class of owners of Microsoft Corporation’s (Microsoft) 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. Thereafter, Plaintiffs filed a 23(f) petition for interlocutory appeal with the Ninth Circuit, which was denied. The Plaintiffs then voluntarily dismissed the case with prejudice, with 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. On appeal, Microsoft argued that the Ninth Circuit lacked jurisdiction because a voluntary dismissal with prejudice does not sufficiently affect the merits of the substantive claims to constitute an appealable final judgment. However, the Ninth Circuit had previously rejected a similar argument in...