Author: Kevin W. Weber

Beyond Force Majeure: Government Quarantine Orders May Themselves Excuse Contract Non-Performance

The coronavirus pandemic is reverberating throughout commercial sectors, and countless contract obligations are going unperformed—shipments are not being made or accepted, payments are being missed, and contract milestone dates are lapsing every week that the pandemic and business shutdown continues. Those typically rare force majeure provisions are now being scrutinized. (For more on those topics, see previous entries in our COVID-19 “The Coronavirus Pandemic and Your Business: How We Can Help” client alert series, including “Litigation Issues That May Arise.”) And, in New Jersey, the precise language of such a clause is key, as courts in this state have held that they should be “narrowly interpreted as contemplating only events or things of the same general nature or class as those specifically enumerated.” Seitz v. Mark-O-Lite Sign Contractors, Inc., 210 N.J. Super. 646 (N.J. Sup. Ct. Law Div. 1986). With only some force majeure clauses including explicit references to pandemics, or broadly-worded “catch-alls,” the success of a force majeure defense is not necessarily certain. But before (or in addition to) attempting to invoke that force majeure provision, consider whether a court would ultimately determine that contractual non-performance is due to an “Act of God” or rather is being caused by the governmental orders quarantining segments of the population and/or shutting down whole swaths of the...

Jersey City Restriction on Chain Stores and Restaurants Could be Unconstitutional

Jersey City, New Jersey’s second largest city, recently passed an ordinance that restricts “formula businesses” in certain neighborhoods. The ordinance defines a “formula business” as one which is “contractually obligated” to maintain certain “standardized characteristics” such as merchandise, menu items, design, signage, and trademarks. In other words, Jersey City is seeking to limit chain restaurants and stores from opening in certain city neighborhoods.

New Jersey State Courts Enter the E-Discovery Arena in Earnest; Award Sanctions for Email Spoliation

On June 18, 2012, an Appellate Court in New Jersey issued Goldmark v. Mellina, which held that asserting the attorney-client privilege does not excuse counsel and parties from their obligation to preserve relevant e-mails or other documents. There, the Court upheld the trial judge’s award of $5,502.50 in sanctions against a prominent New Jersey law firm because it had failed to timely produce electronic documents, which had temporarily disappeared, even though the lapse was not knowing. Because there were virtually no prior opinions (published or unpublished) addressing e-discovery in this jurisdiction, Goldmark is an important first-step towards providing e-discovery guidance to New Jersey practitioners.

New Jersey Appellate Division Holds That the Entire Controversy Doctrine Does Not Reach Tangentially-Related Claims Pending in Another Court, Despite Common Facts

In Alpha Beauty Distributors, Inc. v. Winn-Dixie Stores, Inc. the New Jersey Appellate Division reversed a trial court’s dismissal of an action under the Entire Controversy Doctrine, finding that the dismissed action was not part of the same “core controversy” as a related federal-court proceeding. Plaintiff Alpha Beauty Distributors is owned by Bebert Azran. After purchasing Alpha from Noel and Reid Kleinman, Azran discovered fraud and breaches of fiduciary duty, and sued the Kleinmans in Federal District Court on behalf of himself and Alpha . The federal action centered on allegations that the Kleinmans had damaged Alpha and Azran “through a course of self-dealing and conversion of corporate assets.” Among other things, the federal complaint alleged that the Kleinman’s had given certain of Alpha’s customers improper credits, but it did not encompass any claims against such customers for the improper credits.