Gibbons Law Alert Blog

Instruction on Nominal Damages Was Anything but Instructive as Jury Returns $800,000 “Nominal” Damage Award

In its recent opinion in Graphnet, Inc. v. Retarus, Inc., the New Jersey Supreme Court revisited the role of nominal damages in the defamation context. This time, the issue arose after trial in connection with a jury instruction that advised the jury, in part, that it may award nominal damages to compensate a plaintiff for injury to reputation caused by a defendant’s defamation. In 2014 defendant Retarus published a brochure that contained allegedly defamatory statements about one of its competitors, plaintiff Graphnet. The jury found that Retarus did defame Graphnet but that Graphnet had not shown any actual loss. The jury, nonetheless, awarded Graphnet $800,000 in nominal damages. This exorbitant nominal damage award was, at least in part, the result of a confusing and contradictory jury instruction, which advised the jury both that it was “permitted to award nominal damages to compensate the plaintiff” and that “[n]ominal damages…are not designed to compensate a plaintiff.” Only the latter part of that instruction is correct. Nominal damages, as distinct from compensatory or actual damages, are not meant to compensate the plaintiff for actual loss. Rather, they serve the purpose of vindicating the character of a plaintiff who has not proved a compensable loss. Nuwave Inv. Corp. v. Hyman Beck & Co., Inc., 221 N.J. 495, 499 (2015)....

Expert Report Cannot Be Used for Previously Undisclosed Invalidity Theories

The United States District Court for the Central District of California recently granted a plaintiff’s motion to strike portions of the defendant’s expert report for the untimely disclosure of new invalidity theories that were not previously disclosed in the defendant’s invalidity contentions. In Nichia Corporation v. Feit Electric Company, Inc., the plaintiff sought to strike from the defendant’s expert report: (1) an entirely new reference; (2) two new obviousness theories based on combinations of references not included in the defendant’s final invalidity contentions; and (3) a new written description argument. In ruling, the court highlighted the district’s Standing Patent Rules’ emphasis on “early notice” of infringement and validity contentions, that amendments to contentions require diligence by the moving party and that new infringement and invalidity theories cannot be introduced through expert reports. The Standing Patent Rules that the parties were following were initially set forth by Judge Guilford of the Central District of California. It has been noted that “Judge Guilford’s Standing Patent Rules are similar to the Local Patent Rules adopted by the Northern District of California.” Mort. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1321(Fed. Cir. 2016). And, relatedly, the District of New Jersey “adopted verbatim [its] Local Patent Rules from the Northern District of California.” TFH Publ’n, Inc....

Governor Murphy Signs Executive Order to Prevent State Resources from Supporting the Russian Government

Governor Murphy signed Executive Order 291 (“EO 291”) on March 2, 2022, which requires all state agencies to review their authority to suspend or revoke licenses, permits, registrations, and certifications of businesses that invest directly in companies owned or controlled by the governments of Russia, Belarus, or their instrumentalities, and businesses that invest directly in such companies. EO 291 also directs all relevant State agencies to undertake a review of the State’s ability to boycott or halt the import or purchase of products or services provided from Russia or Belarus. EO 291 is broad-reaching in its scope and includes: Boycotting or halting the import or purchase of any products or services provided from the Russian Federation or Belarus, including, but not limited to, food products, energy products, clothing products, jewelry, and liquor or other alcoholic beverages made in the Russian Federation or Belarus. Reviewing all relevant State contracts to determine if any are with companies owned or controlled by the governments of Russia, Belarus, or their instrumentalities, or businesses that invest directly in such companies, directly or as subcontractors. Requiring the New Jersey Department of Banking and Insurance to issue bulletins or directives to regulated entities requiring them to fully comply with United States sanctions on the Russian Federation and Belarus, as well as with...

In a Case of First Impression in the Second Circuit, the District Court Clarifies When the Statute of Limitations Begins to Run on a Natural Resource Damages Claim Under CERLCA

A case that shares the elements of a crime thriller – massive illegal dumping of toxic construction debris in a public park and playground, corrupt public officials, a special grand jury investigation and criminal prosecutions – has broken new ground on when the statute of limitations runs on a natural resource damages claim. Seggos v. Datre, a case relating to the closure of a public park in an environmental justice area due to illegal dumping of hazardous waste, will proceed now that a federal judge has rejected a request brought by 17 law firms to find that it had been filed too late. The complaint in the case, pending in the U.S. District Court the Eastern District of New York, alleged that in 2013 and 2014, tens of thousands of tons of construction and demolition debris and related waste (“C&D”) were dumped in Roberto Clemente Park (“Park”) in the hamlet of Brentwood, New York, an environmental justice community located in the Town of Islip on Long Island. The C&D was brought to the Park from construction sites throughout the New York City metropolitan area. The New York Attorney General, suing on behalf of the New York State Department of Environmental Conservation (NYSDEC) Commissioner and the State of New York (together, the “State”), brought the case to...

David J. Freeman Co-Authors Article for Bloomberg News on the Future of New York’s Brownfield Cleanup Program

David J. Freeman, a Director in the Gibbons P.C. Environmental Group, has co-authored an article with Lawrence P. Schnapf for Bloomberg Law on New York’s Brownfield Cleanup Program (BCP). The two authors, who co-chair the New York State Bar Association’s Brownfields Task Force, are well positioned to offer insights on the future of the program. The tax credit provisions of the BCP, a key feature of the highly successful program, are scheduled to expire at the end of this year. New York Governor Kathy Hochul has supported efforts to expand and reauthorize the tax credit provisions. The article describes the current tax credit provisions and the key features of Governor Hochul’s proposal, which would result in a ten-year extension of the BCP tax credits. The article also describes changes to the BCP program recommended by other interested stakeholders and in bills introduced by the legislature in last year’s session. The article notes that, while a positive step, the Governor’s proposed reforms “fall short of the changes recommended by the New York State Bar Association, community groups, and developers, and in bills introduced in last year’s legislative session.” Noting that developments in the next two months may impact the shape of BCP for the next ten years, the authors recommend that interested stakeholders make their voices...

Appellate Division Affirms Dismissal of Class Action Claims and Compels Arbitration in Case Against Sirius XM

In Parrella v. Sirius XM Holdings, Inc., the Appellate Division upheld a 2020 trial court decision dismissing a Sirius XM radio customer’s proposed class action complaint and compelling arbitration. The plaintiff had claimed that the satellite radio provider falsely advertised discounts in order to induce customers to reactivate their Sirius radio accounts. The radio provider moved to dismiss the complaint and compel arbitration, which it alleged was required under the parties’ customer agreement. The plaintiff had a 15-year relationship with the radio provider, during which he used its services for various intervals of time. The plaintiff restarted or cancelled his services and each time, upon renewal, he received a copy of the customer agreement. The plaintiff had also contacted Sirius XM customer service to discuss reactivating his account, at which time the customer service representative informed the plaintiff of the customer agreement and told him where he could find a copy of that agreement on the company’s website. The customer agreement clearly and conspicuously contained a binding arbitration clause. Based on these facts, the trial court held that the plaintiff impliedly assented to the terms of the customer agreement and therefore was compelled to arbitrate his claims. In his appeal, the plaintiff alleged that the trial court incorrectly found that he impliedly assented to the...

Meade v. Twp. of Livingston: Subordinate’s Indirect Influence Can Leave Employers Open to Liability Under the New Jersey Law Against Discrimination

On December 30, 2021, the Supreme Court of New Jersey reversed a grant of summary judgment in favor of an employer in a case involving an allegation that a subordinate’s discriminatory animus indirectly influenced an employment termination decision in violation of New Jersey’s Law Against Discrimination (LAD). In Meade v. Twp. of Livingston, the employee, a town manager, claimed that the town council decided to terminate her employment due to the gender bias of a male subordinate, the town police chief. Contrary to the trial court and appellate division, the Supreme Court concluded that there was a genuine dispute as to whether the police chief’s alleged bias influenced the town council’s decision, thereby rendering the case appropriate for a trial. In so ruling, the court noted that the matter was not a cat’s paw case (as argued by amicus curae National Employment Lawyers Association of New Jersey) because the town manager was not alleging the police chief influenced the town council to fire her, but that the town council’s decision simply was influenced by the police chief’s own purportedly discriminatory view of women. In coming to its decision, the court walked through the familiar McDonnell-Douglas burden shifting framework. It first explained that the town manager presented a prima facie case of employment discrimination: (1) the...

Second Circuit Holds Monetary Compensation for Survey Participation Not an “Unsolicited Advertisement” Under the TCPA; Disagrees with Third Circuit

The Second Circuit recently held, in Bruce Katz, M.D., P.C. v. Focus Forward, LLC, that an unsolicited faxed invitation offering $150 to participate in a market research survey does not constitute an “unsolicited advertisement” under the Telephone Consumer Protection Act of 1991 (the “TCPA”). The TCPA defines “unsolicited advertisement” as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission.” The Second Circuit reasoned that the subject fax transmissions “plainly do not advertise the availability of any property, goods, or services” and therefore “cannot reasonably be construed” as unlawful advertisements. The panel did note, however, that its holding may not necessarily extend to all “communications, including faxed surveys, offering the recipient both money and services,” as some such communications could incur liability under the TCPA depending on the specific content of the communication. The Second Circuit’s holding in Katz departed from the reasoning in the Third Circuit’s divided opinion in Fischbein v. Olson Research Group, Inc. The faxes at issue in Fischbein consisted of requests to doctors to participate in market research surveys in exchange for monetary compensation. The Third Circuit held that such faxes are advertisements, reasoning that “an offer of payment in exchange for participation...

A Look at the 220th Legislature and Annual State of the State Address

On January 11, 2022, New Jersey began a new legislative session marked by the Legislature’s reorganization and the Governor’s State of the State Address. Legislative Reorganization Democrats retained control of both houses, albeit with much smaller margins after Republicans managed to win back several seats in the November elections. Democrats now hold a 24 to 16 majority in the Senate and a 46 to 34 majority in the General Assembly. The Senate has new leadership for the first time in twelve years, with Senator Nicholas Scutari of Union County being sworn in as the Senate President and Senator Teresa Ruiz of Essex County becoming the Senate Majority Leader. Senator Sandra Cunningham of Hudson County remains the Senate President Pro Tempore. Senator Steven Oroho of Sussex County is now the Republican Leader, replacing Tom Kean, Jr., who did not run for reelection in order to focus on his campaign for the 7th Congressional District. The Senate also welcomed five new members. Senators Jon Bramnick (R-21), Gordon Johnson (D-37), Jean Stanfield (R-8), and Andrew Zwicker (D-16) all previously served in the General Assembly. Senator Ed Durr (R-3) has not previously held elective office. In the Assembly, Craig Coughlin of Middlesex County and Louis Greenwald of Camden County will continue as Speaker and Majority Leader, respectively, for another...

Pennsylvania Supreme Court Protects Due Process Rights and Rejects “Jurisdiction by Consent”

On December 22, 2021, a unanimous Pennsylvania Supreme Court held in Robert Mallory v. Norfolk Southern Railway Company that a foreign corporation is not subject to personal jurisdiction in the Commonwealth of Pennsylvania solely because of its registration to do business there. The Mallory decision is an affirmation of the due process rights of non-Pennsylvania corporate defendants and significantly impacts who can permissibly be sued in the Commonwealth. Mallory, a resident of the Commonwealth of Virginia, filed suit in Pennsylvania seeking damages under the Federal Employers’ Liability Act against his former employer, Norfolk Southern, a Virginia corporation, for injuries allegedly sustained in the course of the plaintiff’s work in Virginia and Ohio. The sole basis for the exercise of personal jurisdiction was Norfolk Southern’s registration to do business in the Commonwealth of Pennsylvania. Pennsylvania’s business registration statute is unique in that the statute conditions registration upon a corporation’s “consent” to personal jurisdiction in Pennsylvania courts. Before Mallory, Pennsylvania state courts and many of Pennsylvania’s federal courts generally permitted the exercise of personal jurisdiction over foreign corporations based solely on their registering to do business in Pennsylvania. The appeal in Mallory required the Pennsylvania Supreme Court to consider whether Pennsylvania’s broad exercise of personal jurisdiction through its corporate registration statute comports with the demands of due...