Gibbons Law Alert Blog

Sixth Circuit Holds Faxes Seeking Recipient’s Information Are a Pretext to Advertisement and Thus Within the Purview of the TCPA

The Sixth Circuit in Matthew N. Fulton, D.D.S., P.C. v. Enclarity, Inc., on remand from the Supreme Court, upheld its previous ruling that faxes seeking the recipient’s information are considered a “pretext” to an advertisement, and thus fall within the scope of the Telephone Consumer Protection Act (TCPA). The June 19, 2020 decision relies upon a 2006 Federal Communications Commission (FCC) Order stating that “any surveys that serve as a pretext to an advertisement are subject to the TCPA’s facsimile advertising rules.” The fax requested that the recipient verify or update its information with Defendant LexisNexis “for clinical summaries, prescription renewals, and other sensitive communications.” Plaintiff’s Complaint alleged that this constituted a pretext to send additional marketing materials to recipients, as well as obtain the recipient’s involvement in Defendant LexisNexis’s database. Plaintiff asserted that Defendants and third parties would use the recipient’s data to send information “regarding products, services, competitions, and promotions,” thereby constituting “a pretext to increase awareness and use of Defendants’ proprietary database service and increase traffic to Defendants’ website.” Defendants moved to dismiss, arguing that the fax did not constitute an advertisement as defined by the TCPA. The Michigan district court dismissed, finding that since the fax did not state that anything was available for purchase or sale, it “lack[ed] the commercial...

The DOL Amends FFCRA Paid Leave Rule

The United States Department of Labor’s Wage and Hour Division (“DOL”) recently announced amendments to regulations regarding the paid leave provisions of the Families First Coronavirus Response Act (FFCRA). By way of background, and as discussed in detail in our prior blog post, the FFCRA provides two types of leave to employees of covered employers (private employers with fewer than 500 employees and public employers of any size, with certain exceptions) – emergency paid sick leave (EPSL) and expanded family and medical leave (EFML). An employee may be eligible for 80 hours of EPSL if he or she is unable to work or telework (without regard to the employee’s length of employment) if the employee: Is subject to a federal, state, or local quarantine or isolation order related to COVID-19; Has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19; Is experiencing COVID-19 symptoms and seeking a medical diagnosis; Is caring for an individual who is subject to a quarantine or isolation order, or has “been advised” to self-quarantine; Is caring for a child, because the child’s school or place of care has been closed (or the child’s care provider is unavailable) due to COVID-19 related reasons; or Is experiencing any other substantially-similar condition specified by the Secretary of Health...

The End of LIBOR: Keeping Your Best Interest in Mind

The London Interbank Offered Rate (LIBOR), which is the basis for the interest rates for millions of commercial real estate loans, is scheduled to be phased out by the end of 2021 according to the United Kingdom’s Financial Conduct Authority (FCA). The Secured Overnight Financing Rate (SOFR), which represents the cost of borrowing cash overnight collateralized by Treasury securities, is the likely successor to LIBOR in the U.S., but it is not yet a mandatory replacement. While many loan documents address the possibility of LIBOR’s unavailability, most loan documents fall into three categories. First, there may be language that converts the LIBOR component to the last LIBOR rate quoted, which would essentially convert a variable payment into a fixed payment. Second, some loan documents contemplate a more specific alternative (e.g., prime rate, SOFR, etc.) that could be a higher or more volatile rate than LIBOR, resulting in a potentially unplanned increase in borrowing costs. Finally, some contracts do not contain any alternative to LIBOR, which could lead to potential conflict, and even litigation, if the borrower and its lender fail to agree on an alternative rate prior to LIBOR’s unavailability. Borrowers and their counsel should review their existing loan documents that mature after 2021 to understand and plan for how their loan payments will be...

New Jersey Supreme Court Holds That CFA and PLA Claims Can Be Pleaded in the Same Action

In a recent decision answering a question certified to it by the Third Circuit, the New Jersey Supreme Court held that claims brought under New Jersey’s Consumer Fraud Act (CFA) may be brought in the same action as claims brought pursuant to the Products Liability Act (PLA), provided each claim is based on distinct conduct. In Sun Chemical Corporation v. Fike Corporation and Suppression Systems, Inc., the Court explained that it is the nature of the actions—not the resulting damages—that determines when claims may be brought under either the CFA or the PLA. The Court clarified that CFA claims may be brought in instances where a party alleges “express misrepresentations — deceptive, fraudulent, misleading, and other unconscionable commercial practices,” while PLA claims are reserved for claims based upon “product manufacturing, warning, or design defects.” The claims in Sun Chemical arose out of the plaintiff’s purchase of an explosion isolation and suppression system from the defendant to be used to “prevent and contain potential explosions” in the plaintiff’s new dust collection system. Plaintiff’s federal court complaint alleged that on the first day it used the suppression system, a fire broke out in the dust collection system and while the alarm in the suppression system was activated, it was inaudible. Plaintiff alleged that, as a result, several...

Eleventh Circuit Eliminates Incentive Awards for Named Plaintiffs in Class Action Settlements

The Eleventh Circuit Court of Appeals recently upended what has become common practice in class action settlements by ruling that “incentive” awards to named plaintiffs are unlawful. In Johnson v. NPAS Solutions, LLC, the plaintiff filed a class action lawsuit under the Telephone Consumer Protection Act (TCPA) alleging that the defendant used an automatic telephone dialing system to call cell phones without the proper consent. Less than eight months after the complaint was filed, the parties jointly filed a notice of settlement for an award of $1,432,000. The District Court preliminary approved the settlement and certified the class for settlement purposes. In addition, that order permitted the plaintiff to petition the court to receive an amount not to exceed $6,000 “as acknowledgement of this role in prosecuting this case on behalf of class members.” The court also set a date for class members to opt out of the class settlement and a date three weeks later for class counsel to submit their petition for attorneys’ fees and costs. One person objected to the settlement on the grounds that (1) the objection deadline was set before the deadline for class counsel to file their attorneys’ fee petition, which she contended violated Federal Rule of Civil Procedure 23 and the Due Process Clause; (2) the amount of...

Unnecessarily Opening Doors — the Southern District of California Provides an Important Reminder of the Value of FRE 502(d) Clawback Agreements

Highlighting numerous preventable mistakes that resulted in the unintentional waiver of attorney-client privilege, a recent Southern District of California decision reinforces the importance of comprehensive clawback agreements specifically pursuant to FRE 502(d) and (e) to prevent analysis of waiver under either FRCP 26 or the common law waiver standard embodied in FRE 502(b). This blog has previously addressed the interplay between Rule 502 and parties’ clawback agreements and recently discussed the limitations of FRE 502(d) and the inability of litigants to use it to compel production of potentially privileged information without a privilege review. In Orthopaedic Hospital v. DJO Global, Inc. and DJO Finance, LLC, the District Court found a waiver of the attorney-client privilege with respect to a privileged document introduced at deposition and the testimony elicited in connection with the privileged document due to the producing party’s failure to “promptly” rectify the inadvertent production under FRE 502(b). The court refused to find a broader subject matter waiver as a result of the introduction of this privileged document. Critically, the parties had proceeded with discovery without having negotiated, entered into, and sought Court approval of a clawback order under FRE 502(d), instead proceeding under a Rule 26 protective order that incorporated the common law clawback standard of FRE 502(b). As we have discussed in...

That Mine Is Yours, Not Theirs: Ninth Circuit Holds That WWII Shutdown Order Did Not Make Federal Government the CERCLA “Operator” of California Gold Mine

One perennially vexing issue for federal courts in cases brought under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law, is what makes someone an “operator” of a facility, and thus strictly (and, in most cases, jointly and severally) liable for cleanup costs. In particular, what degree and nature of control over a facility exercised by the government make it an operator? (We recently blogged on this issue.) In its recent decision in United States v. Sterling Centrecorp Inc., a divided panel of the Ninth Circuit held that a World War II-era federal order that shut down a gold mine in California did not give the government sufficient control over the operations of the mine to make it a CERCLA operator. Upon entering World War II, the United States faced a serious shortage of nonferrous metals, especially copper, and a corresponding shortage of the machinery and materials needed to produce them. Scarce resources needed to be redirected from nonessential operations to essential ones, and gold mines, such as the Lava Cap mine in Nevada County, California, were deemed nonessential. An order of the War Production Board required the mine to cease operations in 1943. While the order was revoked in 1945, operations at the mine never resumed. It was...

New Jersey Issues Regulations Governing the Conduct of Remote Public Meetings, Effective Immediately

The New Jersey Department of Community Affairs, Division of Local Government Services (“DCA”), has issued emergency regulations which, according to a recently issued notice, “establish standard protocols for remote public meetings held by a ‘local public body’ during a Governor-declared emergency, including minimum procedures to be followed to provide reasonable public notice and allowance for public input.” The DCA advises that the emergency regulations are presently in effect and have been concurrently proposed for permanent adoption in the upcoming October 19, 2020 New Jersey Register. Comments will be accepted through November 18, 2020. As we reported previously, soon after the declaration of the COVID-19 public health emergency and the issuance of Executive Order 107, which restricted public gatherings, most governing bodies, planning boards, zoning boards of adjustment, and other public bodies in New Jersey initially canceled their meetings. Then, gradually, many began meeting remotely, relying on both existing statutory authority and emergency legislation to facilitate the conduct of electronic meetings, enacted as P.L. 2020, ch. 11 and codified in the Open Public Meetings Act at N.J.S.A. 10:4-9.3, which provides that during a declared emergency, a local public body may, using communication or other electronic equipment, conduct a meeting and any public business to be conducted thereat; cause a meeting to be open to the public;...

Gibbons Attorneys Draft NJSBA Amicus Brief Challenging Jury Selection in First In-Person Trial Since Pandemic

Lawrence S. Lustberg and Michael R. Noveck, Director and Fellow, respectively, of the John J. Gibbons Fellowship in Public Interest & Constitutional Law at Gibbons P.C., researched and drafted the amicus brief filed yesterday by the New Jersey State Bar Association (NJSBA), challenging the jury selection process in the first in-person trial to resume in New Jersey since the COVID-19 pandemic state of emergency was declared. Christine A. Amalfe, Chair of the Gibbons Employment & Labor Law Department and NJSBA Secretary and member of its Pandemic Task Force, arranged for the firm to handle the matter pro bono for the bar association. “As it has been doing for 30 years, the Gibbons Fellowship continues to tackle cutting-edge issues of justice and equality in our criminal courts,” said Patrick C. Dunican Jr., Chairman and Managing Director of the firm. “Fairness to the accused is paramount, even as courts face understandable difficulties as they try to return to normal operations while gradually emerging from the COVID crisis, which Larry and Mike argue very effectively in the NJSBA’s brief.” The matter at issue, State v. Dangcil, is a criminal trial in Bergen County that began last week. The NJSBA argued in the brief authored by Mr. Lustberg and Mr. Noveck that the jury management office exercised its own...

Insurer Alleges Pollution Policy Void Because of Policyholder’s Failure to Disclose

AIG Specialty Insurance Co. (“AIG”) recently asserted in a New Jersey Federal District Court Complaint that it owes no coverage to Thermo Fisher Scientific Inc. (“Thermo Fisher”) for cleanup costs associated with contaminated groundwater at a facility owned by Thermo Fisher in Fair Lawn, New Jersey. The crux of AIG’s claim is the fact that Thermo Fisher failed to disclose to AIG that the company had been monitoring groundwater pollution at its site for nearly three decades. AIG alleges the existence of two consent orders relating to groundwater contamination at the site and, more specifically, the presence of PFAS, so-called “forever chemicals” detected in a wellfield affected by the site. Both of these consent orders were in existence when Thermo Fisher sought a pollution liability policy with AIG. AIG asserts that Thermo Fisher either knew or should have known about the groundwater pollution conditions at its facility and the claims against the facility by the United States Environmental Protection Agency (“EPA”) prior to seeking the pollution liability policy at issue, facts that should have been disclosed in the application. AIG alleges that Thermo Fisher’s failure to disclose these consent orders and the fact that the Thermo Fisher plant was part of a Superfund site is sufficient to trigger a number of exclusions in the pollution...