Author: Yolanda J. Bromfield

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...

Rule 37(e) and a Court’s Inherent Authority to Sanction Parties for Spoliation of ESI; The District of Arizona Reminds Litigants that When Rule 37(e) is Up to the Task, It is the Controlling Source of Sanctions

The United States District Court for the District of Arizona recently addressed the issue of whether the court’s inherent authority can be used to analyze the failure to preserve ESI after amended Rule 37(e) became effective on December 6, 2015. Following the well-publicized amendments to Rule 37(e), the question of whether the court’s “inherent authority” to sanction a party for the spoliation of ESI survived the amendments has received disparate treatment from courts despite what many opine to be unambiguous language in the amended rule. In Alsadi v. Intel Corporation, District Judge David Campbell, who chaired the Advisory Committee on the Federal Rules of Civil Procedure from 2011 to 2015, weighed in on this controversy, in pronouncing that a court cannot impose negative (adverse) inference sanctions pursuant to inherent authority when Rule 37(e) is up to the task of addressing ESI spoliation and the intent requirement of that rule is not satisfied. In this case involving claims for negligence and loss of consortium related to the emission of hazardous gases from an industrial wastewater system, plaintiffs (a plant employee and his wife) alleged that defendant’s negligence caused the plant employee to become permanently disabled after being exposed to hydrogen sulfide and possibly other toxic gases. Plaintiffs sought data from defendant regarding measurements of ambient gas...

Do Not Treat Rule 26(g) Certifications as a Mere Formality: Southern District of Florida Cautions Against Client ‘Self-Collection’ of ESI Without Adequate Attorney Oversight

In a recent decision reprimanding defense counsel’s lack of oversight of a client’s collection of data during discovery, the District Court for the Southern District of Florida issued a cautionary opinion that should serve as yet another reminder to counsel of the perils associated with allowing a client to self-collect ESI. Similar to a recent decision we addressed from the District Court of the Northern District of California, Equal Employment Opportunity Commission v. M1 5100 Corp., d/b/a Jumbo Supermarket, Inc. is a strong reminder that Federal Rule of Civil Procedure 26 should serve as a guide for the action and oversight required of counsel in the search, collection, and production of documents in response to discovery demands. In this age discrimination case, the District Court addressed plaintiff’s motion to compel. Plaintiff sought more specific discovery responses to two requests, attorney’s fees and costs in addition to the “opportunity to inspect Defendant’s ESI because, by Defendant’s counsel’s own admission, Defendant ‘self-collected’ responsive documents and information to the discovery requests without the oversight of counsel.” Cautioning against the “perils of self-collection of ESI by a party or interested person,” the District Court reminded counsel of its obligation to “have knowledge of, supervise, or counsel the client’s discovery search, collection and production” pursuant to Rule 26(g)(1). The District...

Disappearing Act: Northern District of California Issues Rare Terminating Sanctions for Spoliation on a Massive Scale

In WeRide Corp. v. Kun Huang, the Northern District of California addressed an egregious case of discovery abuses and spoliation by defendants in a business litigation involving the alleged theft of autonomous vehicle technology. Applying Federal Rules of Civil Procedure 37(b) and 37(e), the court issued rare terminating sanctions against several defendants who willfully and intentionally deleted various forms of ESI, including relevant emails, status reports, and source code, well after the commencement of litigation and after a preservation order issued by the court requiring the preservation of such information. Defendants compounded these abuses by adopting the use of “DingTalk,” an ephemeral communication technology, after the court had issued the preservation order. WeRide, a technology company engaged in the business of developing autonomous cars, employed defendant Jing Wang as CEO in January 2018. WeRide alleged that Wang went on to form his own company, AllRide, as a direct competitor. WeRide also alleged that former employee defendant Kun Huang was recruited by Wang to work for AllRide while still employed by WeRide. WeRide alleged that Huang downloaded various forms of data during this time period and transferred this data onto several USB devices from two WeRide-issued computers, then proceeded to delete files from the devices. WeRide further alleged that AllRide and Huang stole WeRide’s source code,...