Gibbons Law Alert

Gibbons Law Alert

Tagged: Appeal

New Jersey Supreme Court Confirms the Enforceability of Class Action Waivers

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Posted in Class Action Defense

On July 25, 2024

The New Jersey Supreme Court issued a unanimous opinion on July 10, 2024, holding that class action waivers in consumer contracts are not per se contrary to public policy. While such waivers may be unenforceable if they are unconscionable or violate other tenets of state contract law, the opinion confirms that there is no blanket prohibition on them – a positive development for businesses in New Jersey. Pace v. Hamilton Cove concerned a putative class action filed by residential tenants of Hamilton Cove Apartments, a luxury apartment complex in a high crime area. In its advertisements, brochures, and oral statements to prospective tenants during tours, Hamilton Cove Apartments promised that the complex would have “elevated, 24/7 security,” with security personnel stationed round-the-clock near each building’s entrance. The plaintiffs alleged that the promises were knowingly false when made, and that they relied on those representations in deciding to sign the lease. The lease contained a “Class Action Waiver” Addendum, by which the lessee “expressly waive[d] any right and/or ability to bring, represent, join, or otherwise maintain a Class Action.” The defendants moved to dismiss the plaintiffs’ Consumer Fraud Act (CFA) claim, arguing in pertinent part that a class action was not necessary to vindicate the plaintiffs’ interests and, in any event, that the leases contained class...

Third Circuit Clarifies Standard for Assessing Preliminary Injunctions

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Posted in General Litigation

On July 24, 2024

On July 15, the Third Circuit issued a precedential opinion in Delaware State Sportsmen’s Association v. Delaware Department of Safety & Homeland Security that has the potential to alter the standard district courts apply when evaluating motions for preliminary injunctions. In a lawsuit challenging Delaware’s ban on assault weapons and extended magazines, the court held that the group challenging the law had not met the requirements for issuing a preliminary injunction, emphasizing that injunctions “were and still are extraordinary relief” reserved for “exceptional cases.”  It noted that injunctions, often “granted hurriedly and on the basis of very limited evidence,” themselves can inflict harm. And it concluded that “[a]ffidavits drafted by lawyers are poor substitutes for discovery, live testimony, and cross-examination.” Finally, the Third Circuit highlighted that “forecasting the merits [of a lawsuit] risks prejudging them,” as preliminary relief can “freez[e] first impressions in place.” With these principles in mind, the court reiterated that preliminary injunctions “should be granted only in limited circumstances” – to preserve the parties’ relative positions until a trial on the merits can be held, thereby ensuring that the court “can still grant an adequate remedy” or “render a meaningful judgment.” The court contrasted this purpose with issuing a preliminary injunction “just to prevent harm,” which is not an injunction’s “paramount purpose,” and...

Fourth Circuit Revives Claim that Faxes Promoting Free Webinars are “Unsolicited Advertisements” Under the TCPA

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Posted in Class Action Defense

On July 19, 2024

Last month, the Fourth Circuit in Family Health Physical Medicine, LLC v. Pulse8, LLC, et al. revived Family Health’s putative class action, finding that it plausibly alleged facts sufficient to state a claim that the defendant’s fax invitation to attend a free webinar was an “unsolicited advertisement” under the Telephone Consumer Protection Act of 1991 (the TCPA). In doing so, the Fourth Circuit revisited its recent holding in Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC that an “unsolicited advertisement” does not include offers or solicitations with no commercial component or purpose. Under that reasoning, a fax promoting a free webinar would seem not to fall within the TCPA’s definition of an “unsolicited advertisement.” However, because Family Health’s complaint alleged that the webinar was being used to market Pulse8’s healthcare coding technology, the court drew a reasonable inference that Pulse8 sent the fax hoping to persuade recipients to use its products. As a transmission of “information with a commercial nexus to the sender’s business,” the fax was therefore plausibly alleged to qualify as an advertisement. To survive a motion to dismiss, the Fourth Circuit continued, Family Health was not required to plead facts alleging the specific products or services that were promoted. Rather, it was reasonable to infer that a company that invites you to...

That’s a Wrap! United States Supreme Court Closes 2023 Term

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Posted in Appellate

On July 18, 2024

With the close of the U.S. Supreme Court’s October 2023 term, we offer this round-up, focusing on decisions of special interest from the business and commercial perspective. Administrative In a pair of cases, Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, the Supreme Court overruled the deference doctrine first articulated in Chevron v. Natural Resources Defense Council. That doctrine permitted federal courts to adopt an agency’s reasonable interpretation of its originating statute. Now, federal courts must interpret statutes anew and are free to adopt their own interpretations. Though the Supreme Court did not overrule any cases that relied on Chevron’s deference framework, it invited the bar to challenge those decisions in the future. The impact of this case will be dramatic, as courts across the country will be reinterpreting (what used to be) settled understandings of countless statutes, including the Clean Air Act, the Clean Water Act, the Civil Rights Act, the Securities Exchange Act, and many more. In another administrative case, the Court in Corner Post, Inc. v. Board of Governors of the Federal Reserve System held that the six-year statute of limitations for challenges under the Administrative Procedure Act accrues when a plaintiff suffers an injury from final agency action. That holding supplants the prior rule, which ended the statute of limitations six years after the...

Refusal to Wear a Face Mask May Leave You Constitutionally Unprotected

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Posted in Appellate / General Litigation

On February 29, 2024

Is there a constitutional free speech right to refuse to wear a face mask in public indoor spaces during a recognized public health emergency? The Third Circuit Court of Appeals recently determined there is not, as part of a precedential decision in the consolidated cases of Falcone v. Dickstein, et al. and Murray-Nolan v. Rubin, et al. The Third Circuit addressed the First Amendment issue in the Murray-Nolan case. Specifically, the issue the court confronted was whether, during the COVID-19 pandemic, plaintiff Gwyneth Murray-Nolan, an “advocate for parental choice in masking children at school,” was protected under the First Amendment in her refusal to wear a mask during a Board of Education (“BOE”) meeting, despite the BOE’s mask requirement and the Governor’s Executive Order mandating that New Jersey schools require the use of face masks. (The Falcone case, though likewise arising from an individual’s opposition to a mandatory masking policy, was decided on different grounds.) The plaintiff’s refusal to wear a mask was intended by her as a silent protest against the BOE’s masking policy and its lack of action to unmask children in schools. While the court recognized that the First Amendment protects some conduct in some settings, the court held that the refusal to wear a mask failed to satisfy the constitutional standard...

New Jersey Enacts Anti-SLAPP Legislation

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Posted in General Litigation

On September 13, 2023

Lawsuits filed to intimidate or punish those who are engaged in constitutionally protected activity by, in effect, suing them into submission or silence through the prospect of expensive and time-consuming litigation are commonly referred to as strategic lawsuits against public participation (SLAPP). On September 7, 2023, Governor Murphy signed New Jersey’s first anti-SLAPP legislation, which is designed to thwart such lawsuits by providing a process for early dismissal of these suits and an award of costs and counsel fees to a prevailing moving party. New Jersey now joins 32 other states that have enacted some form of anti-SLAPP legislation. The legislation applies 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 States Constitution or New Jersey Constitution and that relates to a matter of public concern. Modeled after the Uniform Public Expression Protection Act (UPEPA), the New Jersey legislation: permits a SLAPP defendant to file an early application for an order to show cause to dismiss the cause of action in whole or in part establishes a...

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

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Posted in Appellate / General Litigation

On July 31, 2023

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...

Securities Plaintiffs Beware: Third Circuit Holds Initiating Suit to Force Settlement May Violate Rule 11 and Can Lead to Mandatory Sanctions Under the PSLRA

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Posted in Securities

On April 24, 2023

With the 30th anniversary of the Private Securities Litigation Reform Act (PSLRA) on the horizon, the Third Circuit’s recent precedential opinion in Scott v. Vantage Corp. provides timely guidance on an important aspect of the landmark statute that may not always be top of mind – its interplay with Rule 11. The PSLRA, in its effort to curb frivolous securities litigation, not only imposes heightened pleading requirements and an automatic stay of discovery pending motions to dismiss, but also requires Rule 11 compliance findings as to each party and attorney based on what they knew at the time suit was filed. In Scott, the Third Circuit reiterated these principles and held that district courts must impose some form of sanction for any Rule 11 violation, no matter how insubstantial the violation – a characteristic unique to the application of Rule 11 in PSLRA cases. The decision also reminds us that the PSLRA creates a presumption in favor of awarding attorneys’ fees in cases of “substantial failure” to comply with Rule 11, which is defined by the court in the opinion. Finally, the decision stands for the remarkable proposition that filing a complaint to force settlement may violate Rule 11 even when the claims asserted are sufficient to withstand a motion to dismiss. In Scott, a...

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

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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...

Express Waiver of Rights in Arbitration Provisions Called Into Question by Recent New Jersey Appellate Decision

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Posted in Appellate

On February 21, 2023

In an opinion issued on February 8, 2023, the New Jersey Appellate Division carved out an exception to the New Jersey Supreme Court’s requirement in Atalese v. U.S. Legal Services Group, L.P. that arbitration provisions must contain clear and unambiguous waiver-of-rights language, holding that Atalese does not apply to sophisticated commercial parties with relatively equal bargaining power. An agreement that the County of Passaic entered into with Horizon Healthcare Services, Inc. contained a dispute resolution provision simply stating that “the parties shall submit the dispute to binding arbitration under the commercial rules of the American Arbitration Association.” After the trial court granted Horizon’s motion to compel arbitration based on this provision, the county appealed, arguing that the arbitration clause was unenforceable because it lacked an express waiver of access to the courts, as required by Atalese. The Appellate Division affirmed, relying on section 2 of the Federal Arbitration Act, which provides that a written arbitration provision “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” That provision, the Appellate Division reasoned, requires courts to apply standard contract principles, including “notions of unconscionability,” in order to determine whether mutual assent to the arbitration clause exists, thus rendering the arbitration clause enforceable. Importantly, whether such assent...

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