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New Jersey Appellate Division Holds Semblance of Acknowledgement Needed for Internet-Based Terms and Conditions Arbitration Clause to Apply

On July 16, 2021

In Wollen v. Gulf Streams Restoration and Cleaning LLC, the New Jersey Appellate Division, in a to-be-published opinion, reversed a trial court’s determination that a plaintiff was bound to an arbitration provision found on an internet-based company’s website. Specifically, the Appellate Court found that the plaintiff did not “knowingly and voluntarily agree to waive her right to resolve her disputes in court.” Defendant HomeAdvisor is an internet-based home improvement website that refers potential customers to third-party local service providers. A potential customer would log on to the HomeAdvisor website and create an online account in order to submit a service request. The customer was then required to provide information about the project before reaching the final webpage, which featured a button for the user to press requesting “free project cost information” from contractors in the area. An orange button with the words “View Matching Pros” was at the bottom of the page, with a line of text beneath it stating “[b]y submitting this request, you are agreeing to our Terms & Conditions.” The phrase “Terms & Conditions” was in blue and contained a hyperlink to a separate document entitled “HomeAdvisor Terms and Conditions.” However, a customer could click “View Matching Pros” without viewing the terms and conditions. Further, there was nothing to indicate that a...

Eighth Circuit Rules That Plaintiff Can File Motion to Strike Class Action Without Waiving Right to Compel Arbitration

by Gibbons P.C.

Posted in Class Action Defense

On July 15, 2021

In Donelson v. Ameriprise Financial Services, Inc., the Eighth Circuit reversed and remanded a district court’s decision that had denied both a motion to strike class action allegations and a motion to compel arbitration. The plaintiff was invited to create an Ameriprise account by defendant Sachse, who worked as a broker and investment advisor at defendant Ameriprise. The two met over lunch, where Sachse brought, and filled out himself, a copy of the account application. After the account application was signed, but not read, by the plaintiff, it was alleged that Sachse “badly mishandled [Plaintiff’s] investment account.” The plaintiff brought suit alleging violations of § 10(b) and § 20(a) of the Securities Exchange Act and Rule 10b-5, as well as breach of fiduciary duty under 15 U.S.C. § 80b-6, and, after finding other Sachse clients who had experienced similar problems with their accounts, sought to represent them in a Rule 23(b)(2) class action. The defendants moved to strike the class action allegations and to compel arbitration, which the district court denied. The defendants appealed. On appeal, the court addressed the question of whether the defendants waived their right to arbitrate when they simultaneously moved to strike the class action allegations. The court found that they had not. Ultimately, the court determined that when the defendants...

Supreme Court Limits Scope Of The Computer Fraud And Abuse Act

by Richard S. Zackin

Posted in Policies and Handbooks

On July 14, 2021

The Consumer Fraud and Abuse Act, 18 U.S.C. §1030 (CFAA) is a federal statute that imposes criminal penalties and provides for a civil cause of action against individuals who obtain information from a computer by intentionally accessing the computer without authorization or by exceeding authorized access. The statute has been used to criminally prosecute and bring civil actions for damages and losses against employees who have misappropriated their employers’ trade secrets or other confidential information. Those damages and losses may include attorneys’ fees expended by the employer to investigate violations of the statute. In its recent opinion in Van Buren v. United States, the United States Supreme Court resolved a disagreement among the lower federal courts over the scope of the CFAA’s “exceeds authorized access” clause. Does an employee with authorized access to his employer’s computers “exceed authorized access” only when accessing specific computer files the employee has not been authorized to access, or does the employee also “exceed authorized access” when accessing files for which the employee has authorization, but uses the information for an unauthorized purpose? In Van Buren, the Supreme Court ruled in favor of the more limited scope of the “exceeds authorized access” clause. Background When employed as a police officer in Georgia, Nathan Van Buren was the target of an...

The New Jersey WARN Act and the Coronavirus Epidemic – Update II

by Richard S. Zackin

Posted in Reductions in Force

On July 14, 2021

On January 21, 2020, New Jersey Governor Phil Murphy signed into law major amendments to the Millville Dallas Airmotive Plant Job Loss Notification Act, more commonly referred to as the New Jersey WARN Act (“the Act”). These amendments require employers with 100 or more employees to give 90-days’ advance notice to the affected employees of any reduction in force involving at least 50 employees. Employees not given the required notice may bring a civil action for damages. Even when the employer complies with the Act’s notice requirements, the amendments require the employer to pay the affected employee severance in an amount equal to one week of pay for each year of service. Failure to comply with the notice requirements will entitle each affected employee to an additional four weeks of severance pay. A fuller discussion of the amendments can be found here. The amendments were to take effect on July 19, 2020, but, because of subsequent actions by the legislature in response to the coronavirus pandemic (see here), the effective date was changed to the 90th day after the termination of Governor Murphy’s Executive Order 103, issued on March 9, 2020, which declared a Public Health Emergency and State of Emergency due to the coronavirus outbreak. Until recently, Executive Order 103 remained in place without...

“Public Figure” Status in the Age of Social Media: A Second Supreme Court Justice Calls for Review of the New York Times v. Sullivan Actual Malice Standard

by Thomas J. Cafferty and Lauren James-Weir

Posted in General Litigation

On July 13, 2021

United States Supreme Court Justice Neil Gorsuch, dissenting from the denial of certiorari in Berisha v. Lawson, et al., joined fellow Justice Clarence Thomas in questioning the appropriateness of the “actual malice” standard, which, under New York Times Co. v. Sullivan and its progeny, requires public official and public figure plaintiffs to demonstrate by clear and convincing evidence that, in publishing material about the plaintiff, the defendant acted with knowledge of falsity or a reckless disregard for the truth.

New Jersey Makes History in Advancing Renewable Energy

by Frank T. Cannone and Karl Teo Molin, III

Posted in Environment & Energy / Regulatory Counseling and Departmental Action

On July 13, 2021

Last month, the New Jersey Board of Public Utilities (NJBPU) made history when it awarded a combined 2,658 MW of offshore wind capacity to two wind energy companies. This award was the largest collective MW award in the United States to date, and it raised New Jersey’s total planned capacity to over 3,700 MW. This award is a significant step toward reaching Governor Phil Murphy’s goal of 7,500 MW of offshore wind by 2035 and 100 percent clean energy by 2050.

Clearing the Bar: SDNY Reminds Litigants of High Standard for Imposing Sanctions Under Rule 37(e)(2)

by Kevin H. Gilmore

Posted in General Litigation

On July 12, 2021

A recent decision out of the Southern District of New York once again illustrates the risk of sanctions under several sections of Fed. R. Civ. P. (“Rule”) 37 for spoliation of evidence and discovery misconduct, as well as the high burden a party must satisfy when seeking sanctions under Rule 37(e)(2). In Bursztein v. Best Buy Stores, L.P., despite finding that defendant flouted discovery obligations, failed to communicate promptly with its adversary, and raised baseless objections throughout discovery, the Court declined to impose sanctions under Rule 37(e)(2), though it did award sanctions – both monetary and in the form of evidence submission to the jury – under Rule 37(e)(1).

Following Duguid, South Carolina District Court Limits Reach of TCPA’s Autodialer Definition

by Caroline E. Oks

Posted in Class Action Defense / Privacy Class Actions

On July 8, 2021

In April 2021, the U.S. Supreme Court resolved a circuit split interpreting the Telephone Consumer Protection Act’s (TCPA) definition of “automatic telephone dialing system” or (ATDS). In Facebook, Inc. v. Duguid, the Court held that the clause “using a random or sequential number generator” in the statutory definition of ATDS, 47 U.S.C. § 227(a)(1), modifies both “store” and “produce,” thereby “specifying how the equipment must either ‘store’ or ‘produce’ telephone numbers.” Accordingly, “a necessary feature of an autodialer under § 227(a)(1)(A) is the capacity to use a random or sequential number generator to either store or produce phone numbers to be called.” Duguid thus reversed the Ninth Circuit’s interpretation that the clause “using a random or sequential number generator” modifies only “produce,” such that a device could be an autodialer if it has the capacity to store and automatically dial numbers, even if the numbers are not generated by a random or sequential number generator. Under Duguid, equipment that makes calls to “targeted…numbers linked to specific accounts” are excluded from liability under the TCPA. In June, the U.S. District Court for the District of South Carolina had the opportunity to apply the Supreme Court’s decision. In Timms v. USAA Federal Savings Bank, the plaintiff sought to recover damages from the defendant for alleged violations of the Fair...

NJ Supreme Court Holds a Supervisor’s Use of Two Racial Slurs Was Enough to Send the Claims to a Jury

by Gibbons P.C.

Posted in Discrimination

On July 8, 2021

On June 16, 2021, the New Jersey Supreme Court ruled in Rios v. Meda Pharmaceutical, Inc., Tina Cheng-Avery, Glenn Gnirrep, et. al. that a supervisor’s use of two offensive slurs based on race/national origin and directed at a Hispanic employee was sufficiently “severe and pervasive” to establish a hostile work environment claim under the New Jersey Law Against Discrimination (“LAD”), survive summary judgment, and proceed to trial. In Rios, Meda Pharmaceutical, Inc. (“Meda” or “Company”), hired plaintiff, Armando Rios, Jr., a Hispanic male, as the Company’s Director of Brand Marketing, reporting to individual defendant Tina Cheng-Avery, the Senior Director of Commercial Operations (“supervisor”). Plaintiff alleged that his supervisor directed the term “Sp–” towards him while at work. More specifically, plaintiff claimed that a month after his hire in May 2015, he told his supervisor that he and his wife were searching for a new home, and, in response, she stated, “it must be hard for a Sp– to have to get FHA loans.” According to plaintiff, shortly after this comment was made, his supervisor allegedly stated to him that an actress who had been “auditioning” for a company commercial would be hired “if she didn’t look too Sp–ky.” (Chief Justice Rabner noted that the court had used “the offensive language in the record” as it...

A Poor Substitute: The Eastern District of Texas Holds That Facebook Screenshots Are Not Sufficient to Avoid Sanctions Under Rule 37

by Gibbons P.C.

Posted in E-Discovery: Legal Decisions and Court Rules

On July 7, 2021

In Edwards v. Junior State of America Foundation, the Eastern District of Texas determined that screenshots of social media messages are not sufficient evidentiary substitutes for spoliated native files. As a result of the plaintiffs’ discovery misconduct and spoliation of relevant electronically stored information (ESI), the court imposed sanctions under Rule 37(c) and (e) against the plaintiffs for failing to preserve Facebook messages in native format, including its metadata, which prevented the defendant from authenticating the messages. The plaintiffs filed a complaint against the defendant alleging that a student member of the defendant, a youth organization, sent “racist and homophobic Facebook messages” to one of the plaintiffs (the “Messages”). After the alleged Messages were sent, the student’s father filed a complaint with the youth organization which included .jpeg “snapshot” images of the Messages. During the litigation, the defendant served written discovery requests on the plaintiffs, seeking production of ESI from the plaintiff’s Facebook Messenger account to authenticate the alleged Messages, including the production of the Messages in HTML or JSON format. The native format of Facebook messages can typically be retrieved and produced in HTML or JSON format and contain metadata that can be used for authenticity purposes. The defendant’s request for native format would have allowed the defendant to authenticate the Messages. The plaintiffs never...