Gibbons Law Alert

Gibbons Law Alert

Category: General Litigation

New Jersey Appellate Division Confirms Parties May Review for Relevance Documents That Hit on ESI Search Terms

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Posted in General Litigation

On April 11, 2025

The New Jersey Appellate Division recently issued a rare opinion concerning review and production of Electronically Stored Information (ESI). In Atlantic ER Physicians Team Pediatric Associates, PA v. UnitedHealth Group, the Appellate Division held that the trial court erred in holding that all documents that hit on ESI search terms must be produced, regardless of their relevance. The plaintiffs (emergency medical service providers) alleged that the defendants (insurers and third-party administrators of health benefits plans) underpaid claims by leveraging the plaintiffs’ obligation to provide emergency care. The order that the trial court entered to “‘govern the discovery of [ESI] and any electronically stored or maintained information’ … require[d] the parties to collaborate to identify ‘custodians whose email[s] [were] reasonably believed to contain relevant ESI for collection’ and develop ‘search parameters, i.e., search terms’ to search the agreed-upon custodians’ records.” During a discovery hearing at which both sides raised relevance objections, the trial court stated that “‘relevance is not a reason to withhold documents.’” Thereafter, the parties negotiated search terms in a way that sought to minimize the number of irrelevant documents they would generate. Nevertheless, during a subsequent conference, the trial court directed the parties to produce all documents returned by the agreed-upon ESI search terms, regardless of whether they were responsive or relevant, and...

Dog Doesn’t Hunt: After Plaintiff Drops Federal Claim, U.S. Supreme Court Says Dog Food Case Must Be Remanded to State Court

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Posted in General Litigation

On February 4, 2025

The United States Supreme Court clarified this month in Royal Canin U.S.A., Inc. v. Wullschleger that when a plaintiff amends her complaint, following removal from state to federal court, to “cut[] out all her federal-law claims, federal-question jurisdiction dissolves” and the case must be remanded “to the state court where it started.” In Royal Canin, Anastasia Wullschleger purchased “a brand of dog food available only with a veterinarian’s prescription” and “sold at a premium price,” thinking that the dog food “contained medication not found in off-the-shelf products.” When Ms. Wullschleger learned that, despite its trappings, the dog food was just “ordinary dog food,” she brought suit in Missouri state court, filing a complaint that included asserted violations of the Federal Food, Drug, and Cosmetic Act (FDCA), as well as factually intertwined state-law claims. The defendant dog food company removed Ms. Wullschleger’s complaint from state to federal court based on federal-question jurisdiction resulting from the FDCA. In response, Ms. Wullschleger amended her complaint to remove any reference to the FDCA, and she asked the federal court to remand the case back to state court, arguing that there was no longer federal jurisdiction over the “amended, all-state-law complaint.” The district court denied Ms. Wullschleger’s petition. It reasoned that federal jurisdiction could not be unilaterally eliminated by a plaintiff’s...

Massachusetts Supreme Court Takes a Closer Look at Wiretap Laws, Potentially Narrowing Privacy Actions

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Posted in General Litigation

On November 25, 2024

The Massachusetts Supreme Judicial Court recently issued an important ruling in Vita v. New England Baptist Hospital et al., addressing whether tracking a user’s activities on a website and sharing that data with third parties constitutes intercepting communications in violation of the state’s 1968 Wiretap Act (the “Act”). In dismissing the plaintiff’s statutory claims, the court emphasized that it is the responsibility of the legislature – and not the court – to address gaps in statutory protections related to privacy and modern tracking technologies, highlighting that as technology and any corresponding digital privacy concerns evolve, legislative frameworks must be modified to adapt accordingly. Plaintiff Kathleen Vita claimed that New England Baptist Hospital and Beth Israel Deaconess Medical Center violated the Act by “intercepting” communications without her consent or knowledge through the use of tracking tools on their websites. Specifically, the plaintiff alleged that the hospitals used third-party software to record her activity when she browsed the hospitals’ websites to obtain information about doctors, search for information about medical symptoms and other healthcare-related issues, and obtain and review medical records. The plaintiff alleged that the hospitals then shared this data with third parties that processed the data for targeted advertising campaigns tailored to the individual user’s data. The court concluded that although the web tracking practices raised...

Just Poor Form? How the New OPRA Request Form Creates Confusion for Custodians and Requestors Alike

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Posted in General Litigation

On October 8, 2024

Recent amendments to the Open Public Records Act, N.J.S.A. 47:1A-1, et seq. (OPRA), became effective on September 3, 2024. One of those amendments, which may be of particular interest to litigators, prohibits certain OPRA requests by attorneys who are representing parties in legal proceedings. The parameters of the prohibition, however, are not so clear. The provision, contained in Section 5(g) of OPRA, prohibits a “party to a legal proceeding,” which includes “a party subject to a court order, any attorney representing that party, and any person acting as an agent for or on behalf of that party,” from requesting a government record if that record “is the subject of a court order, including a pending discovery request.” OPRA expressly states that a custodian is not required to complete such a request. What is unclear is whether this provision prohibits only requests for government records that are the subject of a court order (one example of which is a court order addressing a pending discovery request) or whether it prohibits requests for government records that are either the subject of a court order or the subject of a pending discovery request. Further confusing the issue is the fact that Section 5(g) requires a requestor to certify whether the government record is being sought in connection with a...

Third Circuit Clarifies Standard for Assessing Preliminary Injunctions

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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...

“Pharma Bro” Avoids the Most Serious Adverse Inference Sanction for Spoliating Evidence Under Rule 37(e)

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Posted in General Litigation

On May 29, 2024

In an opinion out of the Southern District of New York addressing alleged spoliation of ESI, Judge Denise Cote found that the plaintiffs – the Federal Trade Commission and a collection of states – only sufficiently established half of their spoliation claims sought against defendant Martin Shkreli. Shkreli, aka “Pharma Bro,” and his business partner, Kevin Mulleady, launched Vyera in 2014. The plaintiffs alleged that in November 2017 Vyera entered into several anti-competitive agreements, including exclusive supply agreements, with a company preparing to seek FDA approval for the manufacture of the active ingredient in one of Vyera’s branded drug products. The plaintiffs sought sanctions under Rule 37(e) against Shkreli, alleging he failed to preserve messages on two cellphones despite receiving a litigation hold in late 2015. The first phone – a company-issued phone – was allegedly used by Shkreli to communicate about issues relevant to the case. When Shkreli’s attorney sent the company phone to be forensically imaged in April 2020, it was discovered that it had been factory reset (i.e., wiped) sometime in 2016 or 2017. While neither Shkreli nor Vyera produced communications from this phone, Vyera represented that company-issued phones were backed up to iCloud. The second was a contraband phone Shkreli appeared to have possessed while in prison. A Vyera executive testified...

NJ Supreme Court Holds That Hospital’s Medical Staff Bylaws Do Not Create Implied Duties of Good Faith

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Posted in General Litigation

On April 24, 2024

Pursuant to New Jersey Department of Health regulations, New Jersey hospitals must implement bylaws to govern the hospital’s medical staff. Those bylaws typically address the qualifications and procedures for being admitted to the hospital’s medical staff and often include a right to a hearing and other procedural protections for a physician who has been denied privileges to the hospital. Though it has long been resolved that a physician may compel a hospital to comply with the procedures set forth in its bylaws, it was less clear whether a hospital’s bylaws created a contract between the hospital and its medical staff, which in turn would give rise to an implied duty of good faith and fair dealing, as well as a right to monetary damages for breach of contract. In Comprehensive Neurosurgical, P.C. v. Valley Hospital, the New Jersey Supreme Court resolved this open issue, holding that a hospital’s bylaws do not amount to a contract and thus do not, without more, give rise to implied duties or monetary damages. The Supreme Court, however, also recognized that an implied contract, which itself would include an implied duty of good faith, can arise from the course of dealings between a hospital and a physician group. In Comprehensive Neurosurgical, a group of neurosurgeons that held longstanding privileges at Valley...

Refusal to Wear a Face Mask May Leave You Constitutionally Unprotected

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Posted in Appellate / General Litigation

On February 29, 2024

Is there a constitutional free speech right to refuse to wear a face mask in public indoor spaces during a recognized public health emergency? The Third Circuit Court of Appeals recently determined there is not, as part of a precedential decision in the consolidated cases of Falcone v. Dickstein, et al. and Murray-Nolan v. Rubin, et al. The Third Circuit addressed the First Amendment issue in the Murray-Nolan case. Specifically, the issue the court confronted was whether, during the COVID-19 pandemic, plaintiff Gwyneth Murray-Nolan, an “advocate for parental choice in masking children at school,” was protected under the First Amendment in her refusal to wear a mask during a Board of Education (“BOE”) meeting, despite the BOE’s mask requirement and the Governor’s Executive Order mandating that New Jersey schools require the use of face masks. (The Falcone case, though likewise arising from an individual’s opposition to a mandatory masking policy, was decided on different grounds.) The plaintiff’s refusal to wear a mask was intended by her as a silent protest against the BOE’s masking policy and its lack of action to unmask children in schools. While the court recognized that the First Amendment protects some conduct in some settings, the court held that the refusal to wear a mask failed to satisfy the constitutional standard...

NJ Appellate Division Holds That Residency of Party Making First Contact in Long-Term Business Relationship Is Not “Jurisdictionally Dispositive”

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Posted in General Litigation

On February 28, 2024

Personal jurisdiction over an out-of-state defendant cannot be based on the unilateral acts of an in-state plaintiff. Instead, a New Jersey court may assert jurisdiction over a defendant only if that defendant “reached out” to New Jersey in some meaningful way. Consequently, when an out-of-state defendant is sued by an in-state plaintiff alleging a breach of contract, the court will often look to see which party initiated the contractual relationship when deciding whether it has jurisdiction over the defendant. In a recent published opinion, however, the New Jersey Appellate Division clarified that, depending on the particular facts of a matter, jurisdiction may be asserted over an out-of-state defendant even when an in-state plaintiff initiated the relationship. In Allure Pet Products, LLC v. Donnelly Marketing & Development LLC , the plaintiff, a New Jersey-based supplier of pet products, telephoned the defendant, a Utah-based organizer of trade shows, in 2011 to request booth space for a biennial trade show planned for 2012. The agreement was consummated, and the plaintiff exhibited at the 2012 trade show. In 2013, the defendant mailed to the plaintiff a “special offer” to renew its booth space for the 2014 show. The plaintiff accepted the offer and exhibited at the 2014 show. The same pattern held for the 2016 and 2018 shows: The...

New Jersey’s Consumer Data Privacy Statute – What You Need to Know

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Posted in General Litigation

On January 31, 2024

On January 16, 2024, Governor Murphy signed S332 into law, making New Jersey the 13th state to enact legislation designed to protect the personal data of its residents. The law will become effective next year, on January 15, 2025, and imposes various obligations on a person or entity (designated as either a “controller” or a “processor”) that collects, discloses, processes, or sells the personal data of New Jersey consumers. The statute establishes various rights for New Jersey residents with respect to their own personal data and also provides consumers with the ability to opt out of disclosure and sale of their personal data in certain circumstances. Finally, the Division of Consumer Affairs has the authority to develop rules and regulations necessary to effectuate the purposes of the statute, and the Attorney General has sole and exclusive enforcement authority. The scope of S332 signed by the Governor was expanded significantly from prior versions. As late as December 17, 2023, the bill only applied to a person or entity that operated “any service provided over the Internet that collects and maintains personally identifiable information from a consumer.” The law enacted less than one month later, however, is not limited to collection of data over the internet; it applies to all “personal data” regardless of how it is...

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