Category: General Litigation

Acheson Hotels, LLC v. Laufer: SCOTUS to Decide Whether Self-Appointed “Tester” Plaintiffs Have Standing to Sue Under the ADA

During its next term, the United States Supreme Court will review the First Circuit Court of Appeals’s holding in Acheson Hotels, LLC v. Laufer that a self-appointed Americans with Disabilities Act (ADA) “tester” plaintiff has Article III standing to challenge a place of public accommodation’s failure to provide disability accessibility information on its website, even if the plaintiff has no intention of visiting that place of public accommodation. In this first review of an ADA Title III case in almost two decades, the Supreme Court will address an issue that has split the circuit courts across the country. The Supreme Court’s merits decision could have significant ramifications for ADA litigation that has been wildly proliferating in the Second Circuit and elsewhere for the past decade. By way of background, a DOJ-promulgated regulation – 28 C.F.R. § 36.302(e)(1)(ii) – provides that a “public accommodation” operating a “place of lodging” must “with respect to reservations made by any means … [i]dentify and describe accessible features in the hotels and guest rooms offered through its reservations service in enough detail to reasonably permit individuals with disabilities to assess independently whether a given hotel or guest room meets his or her accessibility needs.” In September 2020, Deborah Laufer, a self-proclaimed “tester” plaintiff who has filed more than 600 federal lawsuits under...

Let’s Not Just Chat About It: District Court Sanctions Google for Failing to Preserve Chat Messages in Antitrust Suit

In a highly anticipated opinion addressing allegations that Google failed to preserve relevant internal chat messages – despite assuring the court in a case management conference that it had – United States District Court Judge James Donato of the Northern District of California ordered Google to cover the plaintiffs’ legal costs in pursuing a Rule 37 motion and left open the possibility of the plaintiffs later pursuing nonmonetary sanctions. Judge Donato’s scathing opinion in In re Google Play Consumer Antitrust Litigation represents yet another cautionary tale for attorneys certifying that a client has taken appropriate steps to preserve all pertinent electronic discovery without providing meaningful oversight. While Judge Donato chose to focus his criticism (and ultimate sanction) on Google, he clearly was concerned with the lack of oversight and misleading representation by both Google and its attorneys. The Google cases arise from a highly publicized multidistrict litigation (MDL) involving allegations that Google Play Store’s practices were anticompetitive in violation of antitrust laws. The plaintiffs include several gaming companies, Attorneys Generals of 38 states (and the District of Columbia), and numerous consumer plaintiffs. The plaintiffs alleged that Google engaged in exclusionary conduct leading to Google monopolizing the Android app distribution market. After a long and tortured procedural history that included extensive discovery and motion practice, the...

Appellate Division Holds Settlement Reached at Voluntary Mediation Is Unenforceable in the Absence of a Signed Written Settlement Agreement

In Willingboro Mall, Ltd. v. 240/242 Franklin Avenue, LLC, a case decided 10 years ago, the New Jersey Supreme Court upheld the confirmation of an oral settlement agreement that was made at a court-ordered mediation session. The court announced, however, that “going forward, a settlement that is reached at mediation but not reduced to a signed written agreement will not be enforceable.” In a recent, to-be-published decision, the Appellate Division held that Willingboro’s “broad, bright-line rule” requiring a signed written settlement agreement extends to voluntary mediations, too. The new case, Gold Tree Spa, Inc. v. PD Nail Corp., involved a dispute over the plaintiffs’ sale of two nail salons to the defendants. After the plaintiffs filed suit, the parties voluntarily agreed to mediation, resulting in the mediator’s creation of a draft settlement agreement. Several hours after the mediation ended, one of the plaintiffs decided she did not want to settle and refused to sign the agreement. The defendants moved to enforce the settlement, and the plaintiffs responded that they would honor the settlement agreement only if certain contingencies regarding an assignment of the lease of one of the salons could be met. The defendants then contacted the mediator to finalize the settlement agreement and circulated the lease assignment and related documents. The plaintiffs raised issues...

Delaware’s “Freedom of Contract” Approach to Non-Compete Agreements – Even Between Sophisticated Parties in the Sale-of-Business Context – Has Its Limits

Non-compete agreements have recently gained a new round of attention with the Federal Trade Commission’s (FTC) proposed rule that would effectively ban employers from imposing non-competes (albeit not in certain sale-of-business scenarios). While lawyers and businesses wait to see whether the FTC rule materializes, the nation’s most prominent business court – the Delaware Court of Chancery – recently issued two decisions demonstrating limits to its contractarian approach to restrictive covenants. Interestingly, both cases arose in the sale-of-business context, in which the court has traditionally enforced relatively broad restrictive covenants negotiated by sophisticated parties. In HighTower Holding, LLC v. Gibson (Vice Chancellor Will, Feb. 9, 2023), the court refused to enforce the parties’ Delaware governing-law provision and, instead, after performing a choice-of-law analysis, applied Alabama law to invalidate the non-compete. In Intertek Testing Services NA, Inc. v. Eastman (Vice Chancellor Will, Mar. 16, 2023), the court found a non-compete provision that prohibited the defendant from competing “anywhere in the world” to be unreasonably broad and, therefore, unenforceable. Delaware governing law provision rejected HighTower Holding, LLC v. Gibson. HighTower, a Delaware limited liability company, purchased a majority interest in an Alabama-based wealth advisory firm owned by Gibson, a licensed financial advisor, and other individuals. As part of the sale, Gibson and his former partners signed a protective agreement...

New Appellate Division Decision Highlights Limited Scope of Review of Arbitration Awards

In a recent to-be-published opinion, the New Jersey Appellate Division held that parties may not agree to expand the scope of judicial review of an arbitral award in an arbitration agreement governed by the Federal Arbitration Act (FAA), which does not permit courts to vacate or modify awards for errors of fact or law. The case, Strickland v. Foulke Management Corp., arose out of the plaintiffs’ purchase of a used car from the defendant. The parties executed an arbitration agreement, which provided that it was governed by the FAA except as provided elsewhere in the agreement. The agreement also stated that the arbitrator should render a decision only in conformity with New Jersey law and that a court may reverse the award based on “mere errors of New Jersey law.” The defendant repossessed the vehicle after the plaintiffs missed several monthly payments. The plaintiffs filed an arbitration demand asserting violations of the New Jersey Consumer Fraud Act and other state and federal statutes, as well as common law fraud. Following an arbitration hearing, the arbitrator entered an award dismissing all of the plaintiffs’ claims, finding that the claims were barred by contractual limitations periods contained in the arbitration agreement and other purchase documents and also that they lacked merit. The plaintiffs sought to vacate the...

Proposed Nationwide FTC Ban on Non-Compete Clauses: UPDATE – Virtual Public Forum Scheduled for February 16, 2023

As we recently reported, in January 2023, the Federal Trade Commission (FTC) announced a proposed nationwide ban on non-compete clauses. The proposed rule would restrict employers from enforcing all existing and future non-compete agreements with their employees. The FTC announced that it will host a free and open public forum on Thursday, February 16, 2023, from 12 p.m. to 3 p.m. EST, examining the proposed rule and providing the public (workers and business owners) with an opportunity to ask questions, express concerns, and share their past experiences with non-competes. Attendees may register to speak at the forum on the FTC’s website. Registration to speak is on a first come, first served basis. Details about the forum and registration may be found here. The public may also submit written comments on the proposed ban through March 20, 2023, at Regulations.gov. Interested parties should monitor the situation accordingly and consider contacting the firm if they have questions about the proposed rule or seek guidance ahead of the forum and comment period deadline.

Proposed Nationwide FTC Ban on Non-Compete Clauses

On January 5, 2023, the Federal Trade Commission (FTC) announced a proposed rule (“Rule”) that would effectively impose a nationwide ban on all existing and future non-compete clauses between workers and employers. By way of background, a non-compete clause is a type of restrictive covenant that prevents a worker from working for a competitor or starting a competing business, generally within a certain geographical area and time frame after the worker’s employment ends. The FTC’s position, as stated in the Rule’s overview, is that non-compete clauses prevent workers from leaving jobs, lower competition for workers, and reduce wages. According to the FTC, non-compete clauses also stop new businesses from forming, stifle entrepreneurship, and prevent novel innovation that would take place if workers were able to freely share ideas. On the other hand, proponents of non-compete clauses have historically argued, among other things, that they are necessary to protect an employer’s confidential information, trade secrets, and intellectual property and its often considerable investment in the training and development of  its employees. Non-compete agreements are currently subject to state law. Key components of the proposed Rule include: Providing that it is an “unfair method of competition” for an employer to enter into a non-compete clause with a worker, attempt to do so, or inform a worker they...

An Anti-SLAPP Bill That Packs a Powerful Punch

Strategic lawsuits against public participation (SLAPP) are lawsuits intended to intimidate or punish those engaged in constitutionally protected activity by, essentially, suing them into submission or silence through the prospect of costly and time-consuming litigation. Thirty-two states have enacted some form of anti-SLAPP legislation designed to weed out these cases and, in most instances, provide for dismissal of such actions early in the process. New Jersey is not one of those states. That may soon change. State Senate Bill S2802, the Uniform Public Expression Protection Act (the “Act”), and its Assembly counterpart, A4393, were introduced in June 2022 and provide an expedited process for dismissal of SLAPP actions. The legislation is modeled after the Uniform Public Expression Protection Act (UPEPA) drafted by the National Conference of Commissioners on Uniform State Laws and approved and recommended by it in 2020 for enactment in all states. The Act would apply to a civil cause of action against a person based on the person’s (1) communications during a legislative, executive, judicial, administrative, or other governmental proceeding; (2) communications on an issue under consideration or review by such a body; or (3) engagement in any other activity that is protected by the First Amendment freedoms guaranteed by the United State Constitution or New Jersey Constitution and that relates to...

NJ Supreme Court to Decide Whether Counsel Fees Are to Be Awarded to a Prevailing Requestor of Government Records Under the Common Law

New Jersey provides a statutory and common law right of access to government records. While New Jersey’s Open Public Records Act (OPRA), the statutory right of access, expressly mandates an award of counsel fees to a prevailing requestor, there has been some confusion among New Jersey courts, based upon the New Jersey Supreme Court’s decision in Mason v. City of Hoboken, as to whether there is a corresponding right to an award of counsel fees to a prevailing common law requestor. The New Jersey Supreme Court has recently granted certification on this issue and will now have the opportunity to unequivocally clarify the right of a prevailing common law requestor to recover the attorney’s fees incurred in challenging a wrongful denial of access. The case before the Supreme Court involves a request by the Asbury Park Press for access to the internal affairs file of a Township of Neptune police sergeant who chased down his ex-wife’s car and executed her with his service revolver in the summer of 2015. That internal affairs file contained more than 25 reports for a host of incidents, including domestic violence and assaultive behavior on the job. There was, understandably, strong public outcry over the horrific event, and the Asbury Park Press sought information about the sergeant’s internal affairs history...

Parties’ Obligations Under the Federal Rules “Reign” Supreme and Render Language in ESI Protocol Unnecessary

In Raine Group v. Reign Capital, the Southern District of New York highlighted parties’ affirmative obligations under Federal Rules of Civil Procedure 26 and 34 when conducting ESI searches and determining the identities of custodians and locations of relevant documents or information. In particular, the court emphasized that an agreement regarding keyword search terms should work in “tandem” with the responding party’s independent and inherent obligations to search for and produce documents that are “reasonably accessible, relevant, and responsive within the meaning of Rule 34.” The court also made clear that parties have a fair degree of autonomy in determining what is “reasonable” under Rules 26 and 34. In this trademark infringement case, the plaintiff, a merchant bank with more than 100 employees, objected to certain provisions proposed by the defendant, a two-person real estate firm, in the parties’ ESI protocol and proposed search terms. After the parties’ failure to reach a resolution, the court intervened. The court ruled that the defendant’s proposed language regarding the parties’ search obligations in the ESI protocol was unnecessary, given the scope of Fed. R. Civ. P. 26 and 34, and because the provisions were overbroad. Specifically, the defendant’s proposal including the following provisions: “The parties also acknowledge that, apart from this ESI protocol, each party has an independent...