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Gibbons Law Alert Blog

Yes, Prejudice May Be Included in a Court’s Analysis of a Waiver of Arbitration

On September 5, 2024

In a recent published opinion, Marmo & Sons General Contracting, LLC v. Biagi Farms, LLC, the Appellate Division affirmed the trial court’s finding that a party had waived its contractual right to compel arbitration. At issue was the non-moving party’s assertion that the U.S. Supreme Court’s 2022 decision in Morgan v. Sundance, Inc. forbade considerations of prejudice in the seven-factor waiver analysis originally set forth in 2013 by the New Jersey Supreme Court in Cole v. Jersey City Medical Center.

ChatBot or Not: California Federal Courts Limit CIPA Applicability

by Caroline E. Oks

Posted in Class Action Defense

On September 3, 2024

The Northern District of California recently issued a decision further constraining plaintiffs’ ability to assert claims under the California Invasion of Privacy Act (CIPA). In Ambriz v. Google, LLC, the plaintiff filed a putative class action alleging that Google violated CIPA § 631(a) because its Cloud Contact Center AI software-as-a-service, a virtual customer service tool, wiretapped, eavesdropped on, and recorded his call to Verizon’s customer service center.

Litigation Update: Northern District of Texas Judge Blocks FTC’s Non-Compete Ban

by Christine A. Amalfe, Christopher Walsh and Zachary L. Miller

Posted in Restrictive Covenants

On August 30, 2024

As we recently reported, on July 3, 2024, the Northern District of Texas issued a preliminary injunction in Ryan LLC v. Federal Trade Commission, staying the effective date of the Federal Trade Commission’s (FTC) rule banning non-competes (the “Rule”) and enjoining the FTC from enforcing the Rule. That injunction, however, was only applicable to the plaintiffs and intervenors in the case and did not address the FTC’s broader enforcement of the Rule.

Recent Construction Law Decision Holds That Contract Payment Terms Control Over New Jersey’s Prompt Payment Act

by Lisa Lombardo and Julia E. Browning

Posted in Construction

On August 21, 2024

In JJD Electric, LLC v. SunPower Corporation, Systems, et al., the District Court of New Jersey dismissed multiple counts of plaintiff JJD Electric’s amended complaint, holding that the terms of the plaintiff’s subcontract control over its ancillary theories of liability. However, the court allowed the plaintiff’s fraudulent misrepresentation and unjust enrichment claims to proceed insofar as they challenged the very validity of the subcontract, as the Magistrate Judge held previously in granting the plaintiff leave to file the amended complaint. Defendant SunPower subcontracted JJD Electric to provide electrical contracting services in connection with the installation of power equipment at various project locations. JJD Electric asserted claims against SunPower for breach of contract, fraudulent misrepresentation, and unjust enrichment, as well as a claim under New Jersey’s Prompt Payment Act (PPA), seeking approximately $2 million for the alleged unpaid balance of work performed and another approximately $4 million for alleged delay damages. Importantly, as to the PPA claim, the court recognized the scarcity of case law addressing the elements of an action under subsection (b) of the PPA dealing with timing of payments between prime contractors and subcontractors. Based on the plain language of the PPA and guidance from other courts, the court adopted the following elements: The subcontractor has performed contractual work for the prime contractor....

Litigation Update: The Latest on Efforts to Block FTC’s Non-Compete Ban

by Christine A. Amalfe, Christopher Walsh and Zachary L. Miller

Posted in Restrictive Covenants

On August 1, 2024

As we recently reported on April 23, 2024, the Federal Trade Commission (FTC) issued a final rule banning virtually all future and most existing non-compete clauses. The rule was immediately challenged by a global tax services firm and the United States Chamber of Commerce in the Northern District of Texas, and, soon thereafter, others within the business community took action by filing suit in additional federal courts. This post provides an update on the various ongoing legal challenges unfolding across the country. Ryan LLC v. Federal Trade Commission (N.D. Tex. 2024) On April 24, 2024, Ryan LLC, along with a group of intervenors led by the Chamber of Commerce, challenged the non-compete rule arguing that the rule exceeds the FTC’s statutory authority under the Administrative Procedures Act. On May 10, 2024, the Chamber of Commerce filed a motion to stay the September 4, 2024, effective date of the rule and for a preliminary injunction preventing enforcement of the rule, which would have the effect of halting the rule from going into effect until the underlying lawsuit is resolved. The Northern District of Texas court granted the motion, finding that the plaintiffs were likely to prevail on the merits. But the court’s decision came with an important caveat: The court’s order granting the preliminary injunction and halting...

New Jersey Supreme Court Confirms the Enforceability of Class Action Waivers

by Caroline E. Oks

Posted in Class Action Defense

On July 25, 2024

The New Jersey Supreme Court issued a unanimous opinion on July 10, 2024, holding that class action waivers in consumer contracts are not per se contrary to public policy. While such waivers may be unenforceable if they are unconscionable or violate other tenets of state contract law, the opinion confirms that there is no blanket prohibition on them – a positive development for businesses in New Jersey. Pace v. Hamilton Cove concerned a putative class action filed by residential tenants of Hamilton Cove Apartments, a luxury apartment complex in a high crime area. In its advertisements, brochures, and oral statements to prospective tenants during tours, Hamilton Cove Apartments promised that the complex would have “elevated, 24/7 security,” with security personnel stationed round-the-clock near each building’s entrance. The plaintiffs alleged that the promises were knowingly false when made, and that they relied on those representations in deciding to sign the lease. The lease contained a “Class Action Waiver” Addendum, by which the lessee “expressly waive[d] any right and/or ability to bring, represent, join, or otherwise maintain a Class Action.” The defendants moved to dismiss the plaintiffs’ Consumer Fraud Act (CFA) claim, arguing in pertinent part that a class action was not necessary to vindicate the plaintiffs’ interests and, in any event, that the leases contained class...

Third Circuit Clarifies Standard for Assessing Preliminary Injunctions

by Andrew J. Marino and William P. Deni, Jr.

Posted in General Litigation

On July 24, 2024

On July 15, the Third Circuit issued a precedential opinion in Delaware State Sportsmen’s Association v. Delaware Department of Safety & Homeland Security that has the potential to alter the standard district courts apply when evaluating motions for preliminary injunctions. In a lawsuit challenging Delaware’s ban on assault weapons and extended magazines, the court held that the group challenging the law had not met the requirements for issuing a preliminary injunction, emphasizing that injunctions “were and still are extraordinary relief” reserved for “exceptional cases.” It noted that injunctions, often “granted hurriedly and on the basis of very limited evidence,” themselves can inflict harm. And it concluded that “[a]ffidavits drafted by lawyers are poor substitutes for discovery, live testimony, and cross-examination.” Finally, the Third Circuit highlighted that “forecasting the merits [of a lawsuit] risks prejudging them,” as preliminary relief can “freez[e] first impressions in place.” With these principles in mind, the court reiterated that preliminary injunctions “should be granted only in limited circumstances” – to preserve the parties’ relative positions until a trial on the merits can be held, thereby ensuring that the court “can still grant an adequate remedy” or “render a meaningful judgment.” The court contrasted this purpose with issuing a preliminary injunction “just to prevent harm,” which is not an injunction’s “paramount purpose,” and...

Fourth Circuit Revives Claim that Faxes Promoting Free Webinars are “Unsolicited Advertisements” Under the TCPA

by Julia E. Browning

Posted in Class Action Defense

On July 19, 2024

Last month, the Fourth Circuit in Family Health Physical Medicine, LLC v. Pulse8, LLC, et al. revived Family Health’s putative class action, finding that it plausibly alleged facts sufficient to state a claim that the defendant’s fax invitation to attend a free webinar was an “unsolicited advertisement” under the Telephone Consumer Protection Act of 1991 (the TCPA). In doing so, the Fourth Circuit revisited its recent holding in Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC that an “unsolicited advertisement” does not include offers or solicitations with no commercial component or purpose. Under that reasoning, a fax promoting a free webinar would seem not to fall within the TCPA’s definition of an “unsolicited advertisement.” However, because Family Health’s complaint alleged that the webinar was being used to market Pulse8’s healthcare coding technology, the court drew a reasonable inference that Pulse8 sent the fax hoping to persuade recipients to use its products. As a transmission of “information with a commercial nexus to the sender’s business,” the fax was therefore plausibly alleged to qualify as an advertisement. To survive a motion to dismiss, the Fourth Circuit continued, Family Health was not required to plead facts alleging the specific products or services that were promoted. Rather, it was reasonable to infer that a company that invites you to...

That’s a Wrap! United States Supreme Court Closes 2023 Term

by Julia E. Browning and Stephen Marietta

Posted in Appellate

On July 18, 2024

With the close of the U.S. Supreme Court’s October 2023 term, we offer this round-up, focusing on decisions of special interest from the business and commercial perspective. Administrative In a pair of cases, Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, the Supreme Court overruled the deference doctrine first articulated in Chevron v. Natural Resources Defense Council. That doctrine permitted federal courts to adopt an agency’s reasonable interpretation of its originating statute. Now, federal courts must interpret statutes anew and are free to adopt their own interpretations. Though the Supreme Court did not overrule any cases that relied on Chevron’s deference framework, it invited the bar to challenge those decisions in the future. The impact of this case will be dramatic, as courts across the country will be reinterpreting (what used to be) settled understandings of countless statutes, including the Clean Air Act, the Clean Water Act, the Civil Rights Act, the Securities Exchange Act, and many more. In another administrative case, the Court in Corner Post, Inc. v. Board of Governors of the Federal Reserve System held that the six-year statute of limitations for challenges under the Administrative Procedure Act accrues when a plaintiff suffers an injury from final agency action. That holding supplants the prior rule, which ended the statute of limitations six years after the...

DOL Issues Final Rule Increasing Salary Thresholds for Exempt Employees Under FLSA

by Richard S. Zackin and Catherine M. Soliman

Posted in Wage and Hour

On July 10, 2024

On April 23, 2024, the United States Department of Labor (DOL) released a final rule that increased the salary thresholds for the executive, administrative, professional, and highly compensated employees exemptions under the Fair Labor Standards Act (FLSA). The final rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees,” went into effect on July 1, 2024. The FLSA requires covered employers to pay employees a minimum wage and, for employees who work more than 40 hours in a week, overtime pay (at 1.5 times an employee’s regular rate). However, the minimum wage and overtime requirements do not apply to employees who meet the requirements of the executive, administrative, or professional exemptions. One of the requirements of these exemptions is a minimum weekly salary. The final rule raised the minimum weekly salary to qualify for the exemption from $684 per week ($35,568 per year) to $844 per week ($43,888 per year) and, effective January 1, 2025, to $1,128 per week ($58,656 per year). Additionally, the final rule raised the annual salary threshold for the exemption for highly compensated employees from $107,432 per year to $132,964 per year and, effective January 1, 2025, to $151,164 per year. The highly compensated employee exemption applies to certain highly compensated employees and combines an annual...