Gibbons Law Alert

Gibbons Law Alert Blog

Governor Murphy Announces First-in-the-Nation Environmental Justice Rules

Posted in Development/Redevelopment / Environmental and Green Issues

On April 20, 2023

On Monday, April 17, 2023, New Jersey Governor Phil Murphy announced the adoption of the New Jersey Department of Environmental Protection’s (DEP) Environmental Justice Rules (EJ Rules) implementing New Jersey’s landmark Environmental Justice (EJ) Law signed in 2020. The EJ Law and implementing rules are the first in the nation aimed at reducing pollution in historically overburdened communities that have been subjected to a disproportionately high number of environmental and public health stressors. In his announcement, Governor Murphy stated, “As we enter Earth Week 2023, the final adoption of DEP’s EJ Rules will further the promise of environmental justice by prioritizing meaningful community engagement, reducing public health risks through the use of innovative pollution controls, and limiting adverse impacts that new pollution-generating facilities can have in already vulnerable communities.” DEP Commissioner Shawn M. LaTourette added that, “With the adoption of the nation’s first EJ Rules, New Jersey is on a course to more equitably protect public health and the environment we share.” Under the new rules, which are effective immediately, state environmental officials considering permit requests of eight specific types of facilities must include impacts to residents of affected communities in their decision-making process. The eight types of facilities that must comply with the new EJ Rules are: gas-fired power plants, cogeneration facilities, and other...

2023 Is Shaping Up to Be a Big Year for the Clean Water Act and Its “Waters of the United States”

by Gibbons P.C.

Posted in Environmental and Green Issues

On April 17, 2023

In January, the Biden Administration promulgated the federal government’s latest rule defining “waters of the United States” (WOTUS Rule). The WOTUS Rule, which defines the waters that are subject to federal permitting and oversight under the Clean Water Act (CWA) by the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (USACE), went into effect on March 20, 2023. As with past attempts to define “waters of the United States,” the new WOTUS Rule is already triggering legal challenges. Since the enactment of the CWA in 1972, courts, agencies, and landowners have struggled to define the statute’s geographic scope, especially with respect to wetlands, which do not fit neatly within familiar notions of “water” or “land.” The statute prohibits unpermitted discharges of pollutants (including fill material) into “navigable waters” but defines that term broadly as “the waters of the United States, including the territorial seas.” The Biden Administration’s WOTUS Rule replaces the Trump Administration’s Navigable Waters Protection Rule (NWPR), which was promulgated in 2020 but subsequently vacated by two federal district courts. The NWPR followed the Trump Administration’s 2019 repeal of a 2015 Obama Administration rule (the 2015 Clean Water Rule) that had taken a categorical approach to defining “waters of the United States.” The Biden Administration’s WOTUS Rule seeks to return to...

How the Elections Transparency Act Changes New Jersey’s Political Contribution Landscape

by Michael D. DeLoreto

Posted in Political and Campaign Finance Compliance

On April 12, 2023

Governor Murphy signed into law one of the most sweeping campaign and political law reform bills since the enactment of The New Jersey Campaign Contributions and Expenditures Reporting Act in 1977. The Elections Transparency Act (“Act”) has been the focus of much attention due to the changes in the leadership and enforcement operations at the New Jersey Election Law Enforcement Commission (NJELEC). However, the Act’s most significant impacts will be felt in the areas of campaign contribution limits, reporting requirements, and the standardization of the state’s pay-to-play laws. Campaign Contributions Current law provides for contribution limits on a per election or per year basis, ranging from $2,600 to “no limit” contributions between leadership and party committees. These limits remain in effect until after the June 2023 Primary Election. Following the June 2023 Primary Election, the contribution limits dramatically increase to double, or in some instances, triple the current limits. For example, individuals, corporations, unions, associations, and groups will be subject to the following limits: $5,200 per election cycle to a Candidate Committee $14,400 per election cycle to a Political Committee $14,400 per year to a Continuing Political Committee or Municipal Political Party Committee $75,000 per year to a Legislative Leadership Committee, State Political Party Committee, or County Political Party Committee Contribution limits will also be...

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

by Christopher P. Anton

Posted in General Litigation

On April 6, 2023

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...

Fifth Circuit Affirms District Court’s Grant of a Motion to Strike Class Allegations

by Gibbons P.C.

Posted in Class Action Defense

On April 5, 2023

The Fifth Circuit Court of Appeals recently affirmed the grant of a pre-discovery motion to strike class allegations. In Elson v. Black, 14 women from seven states sought to bring a putative class action against the defendant companies, alleging that the defendants falsely advertised its FasciaBlaster product. Specifically, the plaintiffs alleged that the FasciaBlaster had been falsely advertised as a product that would eliminate cellulite, help with weight loss, and relieve pain. The district court, in a three-sentence opinion, struck the class allegations, finding that the class failed to establish commonality. The next day, the district court dismissed the remainder of the plaintiffs’ claims in their entirety. While the Fifth Circuit Court of Appeals found the district court opinion to be “inappropriately brief,” it agreed that the class could not be certified, nor could the plaintiffs establish their claims of fraud. However, the appellate court reversed and remanded the district court’s ruling dismissing two plaintiffs’ express warranty claims, finding that the court failed to apply the law of a specific jurisdiction. The appellate court held that the class could not be certified under Rule 23(a)’s commonality requirement and Rule 23(b)(3)’s predominance requirement. First, the plaintiffs’ claims were governed by different states’ laws, and the plaintiffs were unable to meet their burden establishing that “such differences...

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

by Christopher Viceconte and Leonardo A. Di Stasio

Posted in General Litigation

On March 29, 2023

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...

Appellate Division Holds Plaintiffs Can State a Claim Under New Jersey’s CFA and TCCWNA Statutes Where an Advertised Discount Is Alleged to Be Illusory

by Caroline E. Oks

Posted in Class Action Defense

On March 22, 2023

A recent split decision from the New Jersey Appellate Division called into question whether the “ascertainable loss” requirement for pleading a claim under the New Jersey Consumer Fraud Act (NJCFA) is the same as the “aggrieved consumers” requirement under the Truth in Consumer Contract, Warranty and Notice Act (TCCWNA). Without deciding that question, the court found that the pleading sufficiently alleged both in asserting that the defendant inflated its prices to offer an illusory discount. The plaintiffs alleged that the defendant, SPARC Group LLC, falsely advertised clothing at two of its Aeropostale stores as being discounted from a higher price when the clothing allegedly had never been sold in those stores at the higher price. The plaintiffs asserted that this “markup to markdown” practice violates both the NJCFA, the TCCWNA, and the common law. The trial judge dismissed the complaint for failure to state a claim and largely rested her decision on a determination that the plaintiffs failed to allege an “ascertainable loss.” The Appellate Division majority disagreed and reversed. The majority noted some confusion as to whether the NJCFA’s “ascertainable loss” requirement was the same as the TCCWNA’s “aggrieved consumer” requirement. The New Jersey Supreme Court has held that an “ascertainable loss” must be “quantifiable and measurable” and not “hypothetical or illusory,” while the...

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

by Christopher P. Anton

Posted in General Litigation

On March 8, 2023

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...

New Policy From DOJ Offers Predictability and Incentives to Self-Report Misconduct

by Gibbons P.C.

Posted in Environmental and Green Issues

On March 7, 2023

Representatives of the United States Attorney’s Office (USAO) announced on February 22, 2023, the immediate implementation of a new Voluntary Self-Disclosure Policy. This new policy was created in response to a September 2022 memorandum from the Deputy Attorney General, which requested that each component of the Department of Justice (DOJ) review its policies on corporate voluntary self-disclosure and revise or create a formal written policy that incentivizes such self-disclosure. The stated intention of the new policy is to provide transparency and predictability to companies and the defense bar concerning the benefits, and potential outcomes, in cases where companies voluntarily self-disclose misconduct, fully cooperate with the government, and remediate the misconduct in a timely and appropriate manner. In general, the policy requires that: (1) the disclosure of misconduct is made voluntarily (not to include instances where there is a pre-existing obligation to disclose, e.g., by regulation or contract); (2) the disclosure be made prior to an imminent threat of disclosure, prior to the misconduct being publicly disclosed, and within a reasonably prompt time after the company becomes aware of the misconduct; and (3) the disclosure includes all relevant facts concerning the misconduct that are known to the company. The incentives created by this new policy are significant and include the following: Absent the presence of aggravating...

GoodRx Fined $1.5 Million for Disclosure of Users’ Personal Information to Third Parties Without Notice or Consent

by John T. Wolak and William C. Martinez

Posted in E-Commerce / Privacy and Data Security / Privacy Class Actions / Regulatory Counseling and Departmental Action

On February 23, 2023

On February 1, 2023, the Federal Trade Commission (FTC) filed a “first of its kind” enforcement action under the FTC’s Health Breach Notification Rule, 16 CFR Part 318, which offers several useful takeaways for all companies that collect and process a consumer’s personal information – not just companies that handle health-related data. The FTC’s proposed order seeks to impose a $1.5 million civil penalty against GoodRx, a digital health platform, for sharing the sensitive personal health and other information of millions of GoodRx users with various advertising platforms, including Facebook and Google, and failing to report these disclosures to consumers. According to the FTC complaint, GoodRx collects sensitive personal information from users and represents that it will treat users’ information in accordance with its privacy policies. Since at least 2017, the GoodRx privacy policy specifically stated that GoodRx “would never disclose personal health information to advertisers or any third parties.” Yet for several years, GoodRx allegedly violated these promises “by sharing information with Advertising Platforms, including Facebook, Google and Criteo, about users’ prescription medications or personal health conditions” and “did so without notice to users, and without obtaining consent.” In addition, GoodRx monetized the personal health information it collected through the creation of advertising campaigns on Facebook and Instagram that targeted GoodRx users. In August...