Gibbons Law Alert

Who’s Paying For This? First Department Requires the Producing Party to Initially Bear the Costs of Production in U.S. Bank N.A. v. GreenPoint Mtge. Funding, Inc.

Posted in E-Discovery: Legal Decisions and Court Rules

On March 26, 2012

For the second time this year, New York’s First Department, Appellate Division, has adopted e-discovery standards articulated in Zubulake v. UBS Warburg LLC, 220 FRD 212 (S.D.N.Y. 2003). On January 31, 2012, the First Department’s decision in Voom H.D. Holdings LLC v. EchoStar Satellite LLC, 2012 N.Y. Slip Op. 00658 (1st Dep’t 2012) adopted the Zubulake standard concerning when a party’s preservation obligations are triggered. Read a blog posting on the Voom decision here. Most recently, on February 28, 2012 the First Department held in U.S. Bank N.A. v. GreenPoint Mtge. Funding, Inc., 2012 NY Slip Op. 01515 (1st Dep’t 2012), that, consistent with Voom’s “adopt[ion] [of] the standards articulated by [Zubulake] in the context of preservation and spoliation, [it was] persuaded that Zubulake should be the rule in this department, requiring the producing party to bear the cost of production to be modified by the IAS court in the exercise of its discretion on a proper motion by the producing party.”

Third Circuit Holds that Injunctive-Relief-Only Class Cannot Be Certified Where Plaintiffs Based the Threat of Future Harm on Irrational Consumer Behavior

by Gibbons P.C.

Posted in Class Action Defense

On March 23, 2012

In McNair v. Synapse, a precedential opinion, the Third Circuit held that former customers could not certify an injunctive-relief-only class asserting consumer fraud claims against defendant Synapse, Inc., the largest marketer of magazine subscriptions in the United States, because they lacked Article III standing. In short, the Third Circuit concluded that plaintiffs could not show a likelihood of future injury based on their claim that they might be deceived by the same conduct twice.

Zoltek Corp. v. U.S.: Federal Circuit En Banc Reverses Zoltek III and Rules That 28 U.S.C. § 1498(a) Can Waive Immunity for Infringement Under 271(g)

by Gibbons P.C.

Posted in Patent

On March 22, 2012

The Federal Circuit recently demonstrated how active the Court is, and will continue to be. After having ruled in Zoltek III that the United States did not waive immunity from suit except for acts that would constitute direct infringement under 35 U.S.C. § 271(a), the Court voted sua sponte to reconsider the question en banc.

Ex-Juror Who “Friended” Defendant Faces Jail for Bragging on Facebook About Dismissal From Jury Duty

by Gibbons P.C.

Posted in E-Discovery: Legal Decisions and Court Rules

On March 22, 2012

By now, attorneys should know to advise their clients to watch out for Friend requests from jurors during a trial. The latest debacle concerning jurors use of social media involves a juror “friending” a party and then bragging about his resulting dismissal from the panel. For that juror, his Facebook antics landed him a three-day jail sentence. Click here and here for additional coverage regarding this incident.

Prometheus Re-bound: Supreme Court Reverses in Mayo v. Prometheus Labs

by Robert E. Rudnick

Posted in Patent

On March 20, 2012

In a much anticipated decision, a unanimous Supreme Court today reversed the ruling of the Federal Circuit Court of Appeals, and held that Prometheus’ process is not patent eligible. Mayo Collaborative Servs. v. Prometheus Labs., Inc., No. 2008-1403, slip. op. (Fed. Cir. Dec. 17, 2010), rev’d, 566 U.S. __ (2012). Mayo purchased and used medical diagnostic tests based on Prometheus Labs’ patents, but later sold and marketed its own diagnostic test. Prometheus Labs brought suit, asserting that Mayo’s test kits infringed its patents.

Play Nice or Pay the Price: Failing to Cooperate in Creating Preservation Protocols Can Result in Significant Consequences

by Gibbons P.C.

Posted in E-Discovery: Legal Decisions and Court Rules

On March 20, 2012

The dual issues of over-preservation and proportionality took center stage in a recent Southern District of New York class and collective action litigation, leading to a Magistrate’s opinion in Pippins v. KPMG, No. 11-377 (S.D.N.Y. Oct. 7, 2011), and a District Court’s affirmance in Pippins v. KPMG, Civ. No. 11-377 (S.D.N.Y. Feb. 3, 2012), which are sending shock waves through the e-discovery community. The effect of those shock waves here is particularly acute for FLSA and other employment-related class action defendants where the targeted company often possesses and controls ESI pertaining to sometimes thousands of potential plaintiffs.

gTLDs Pose New Threats in Cyberspace

by Gibbons P.C.

Posted in E-Commerce / Trademarks

On March 16, 2012

On January 12, 2012, ICANN, the Internet’s domain name registration watch dog, began accepting applications for new generic Top-Level Domains (gTLDs) to add to those already in existence, including .com, .net, .biz and others. Under the new scheme, any company can apply for a gTLD, thereby expanding the domain name system (DNS). Ultimately, this expansion will change the Internet forever. Each new gTLD poses an incremental risk for trademark owners who are already under heavy assault in cyberspace from cybersquatting (registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark owner), brandjacking (assuming the online identity of another entity for the purposes of trading on another’s brand equity), and typosquatting (registering URLs with common misspellings) by those seeking to generate illicit profits. According to the Coalition Against Domain Name Abuse (CADNA), cybersquatting already costs trademark owners more than $1 billion each year due to lost sales, lost goodwill, and increased enforcement costs. However, with a major increase in gTLDs, many corporations fear an expansion in expensive litigation to enforce their brands and trademarks.

New Jersey Appellate Division Finds That a Demand for Arbitration or Mediation Constitutes the “First-filed” Action for Comity Purposes

by Gibbons P.C.

Posted in General Litigation

On March 15, 2012

In CTC Demolition Company, Inc. v. GMH AETC Management / Development, LLC, et al., the Appellate Division recently found in a to-be published opinion that a party’s demand for contractually-mandated arbitration or mediation may constitute the “first filed” action for purposes of a comity analysis. The “first filed rule” typically surfaces where parties have engaged in a “race to the courthouse,” filing similar lawsuits in different jurisdictions that they perceive to be most friendly to their cause. Based on traditional principles of comity, the rule provides that “a New Jersey court should not interfere with a similar, earlier-filed case in another jurisdiction that is capable of affording adequate relief and doing complete justice,” Sensient Colors, Inc. v. Allstate Ins. Co., but allows for certain exceptions, such as where “the presence of special equities may lead a court to disregard the traditional deference paid to the first-filed action.”

The Extension of the Permit Extension Act is on the Move, To Be Reviewed Today By Assembly Appropriations Committee

by Gibbons P.C.

Posted in Development/Redevelopment / Environmental and Green Issues / Transactional Real Estate and Leasing

On March 12, 2012

About two months ago, several NJ Legislators, including State Senator Paul Sarlo (Bergen/Passaic) and Assemblyman Ronald Dancer, proposed bills that would amend the 2008 “Permit Extension Act.” Designed to give developers breathing room in the sluggish economy by extending the validity of development approvals, Proposed Bill S743 (the “Bill” or “S743”) is gaining traction and is moving through the necessary legislative committees. On March 5, 2012, S743 passed by a vote of 4-0 by the Senate Budget and Appropriations Committee. The Bill is scheduled to go before the Assembly Appropriations Committee on March 12, 2012.

Victory for Accountants: Accountant Third-Party Liability Based on Third-Party’s Access to Accountants’ Work Product Arises Only When Accountant is Explicitly Informed at Outset of Engagement that Third Party Will Rely on Accountant’s Work

by Gibbons P.C.

Posted in General Litigation

On March 12, 2012

The New Jersey Supreme Court recently held in Cast Art Industries, LLC v. KPMG LLP that the scope of accountant liability contained in the Accountant Liability Act, N.J.S.A. 2A:53A-25(b)(2)(a), is restricted to clients and third parties who the accountant knew at the start of engagement would have access to the accountant’s work product. N.J.S.A. 2A:53A-25(b)(2) identifies three circumstances when an accountant may be liable to a third party, including when the accountant “knew at the time of the engagement by the client, or agreed with the client after the time of the engagement” that the accountant’s work product would be made available to the third party. The Appellate Division held that an accountant retained to conduct an audit could be liable to a third party who received and relied on the audit so long as the accountant knew at some point during the engagement that the third party would rely on the audit.