Tagged: Appeal

An Anti-SLAPP Bill That Packs a Powerful Punch

Strategic lawsuits against public participation (SLAPP) are lawsuits intended to intimidate or punish those engaged in constitutionally protected activity by, essentially, suing them into submission or silence through the prospect of costly and time-consuming litigation. Thirty-two states have enacted some form of anti-SLAPP legislation designed to weed out these cases and, in most instances, provide for dismissal of such actions early in the process. New Jersey is not one of those states. That may soon change. State Senate Bill S2802, the Uniform Public Expression Protection Act (the “Act”), and its Assembly counterpart, A4393, were introduced in June 2022 and provide an expedited process for dismissal of SLAPP actions. The legislation is modeled after the Uniform Public Expression Protection Act (UPEPA) drafted by the National Conference of Commissioners on Uniform State Laws and approved and recommended by it in 2020 for enactment in all states. The Act would apply 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 State Constitution or New Jersey Constitution and that relates to...

NJ Supreme Court to Decide Whether Counsel Fees Are to Be Awarded to a Prevailing Requestor of Government Records Under the Common Law

New Jersey provides a statutory and common law right of access to government records. While New Jersey’s Open Public Records Act (OPRA), the statutory right of access, expressly mandates an award of counsel fees to a prevailing requestor, there has been some confusion among New Jersey courts, based upon the New Jersey Supreme Court’s decision in Mason v. City of Hoboken, as to whether there is a corresponding right to an award of counsel fees to a prevailing common law requestor. The New Jersey Supreme Court has recently granted certification on this issue and will now have the opportunity to unequivocally clarify the right of a prevailing common law requestor to recover the attorney’s fees incurred in challenging a wrongful denial of access. The case before the Supreme Court involves a request by the Asbury Park Press for access to the internal affairs file of a Township of Neptune police sergeant who chased down his ex-wife’s car and executed her with his service revolver in the summer of 2015. That internal affairs file contained more than 25 reports for a host of incidents, including domestic violence and assaultive behavior on the job. There was, understandably, strong public outcry over the horrific event, and the Asbury Park Press sought information about the sergeant’s internal affairs history...

New Jersey Appellate Division Finds No Ascertainable Loss Where a Plaintiff Never Used a Product and Made Hypothetical Allegations of Loss

On May 31, 2022, the Appellate Division in Hoffman v. Pure Radiance, Inc. affirmed the trial court’s order granting summary judgment for a defendant and dismissing the plaintiff’s Consumer Fraud Act (CFA) claims because the plaintiff could not show that he suffered an ascertainable loss where he never used the product and his allegations were not supported by facts. In this putative class action, serial plaintiff Harold Hoffman sued defendant Pure Radiance, Inc., alleging that it falsely marketed a hair growth product. Specifically, Pure Radiance advertised that its product Re-Nourish could help an individual regrow “a thick, full head of hair, even after years of balding” and was “the world’s first and only hair loss solution that revives dead hair follicles” to regrow hair “in just 30 days.” The advertisement also showed a before-and-after picture of a man’s head, with the before picture showing a balding head and the after picture showing a full head of hair. Based on this advertisement, Hoffman purchased the product and then, after researching the product but before ever trying it himself, filed a proposed class action alleging, among other things, that the ad contained material misrepresentations and that he suffered an ascertainable loss by reason of his purchase of the product for $108.90. Significantly, Hoffman did not receive the...

No Property Damage, No Claim for Business Interruption: New Jersey Appellate Division Affirms Dismissal of Six COVID-19 Business Loss Claims

In a recent decision, the New Jersey Appellate Division held that six businesses were not entitled to insurance coverage for losses sustained when they were forced to close or limit their operations as a result of Executive Orders (“EOs”) issued by Governor Phil Murphy to halt the spread of COVID-19. This ruling follows the general trend nationally in which courts have rejected claims by insureds for business interruption losses incurred due to government orders related to the spread of COVID-19. The decision arose from the consolidated appeals of six businesses that reported losses as a result of the EOs and sued their insurance companies, alleging they improperly refused to cover the plaintiffs’ insurance claims for business losses sustained due to the issuance of the EOs. All six suits were dismissed with prejudice at the trial level pursuant to Rule 4:6-2(e) for failure to state a claim, because the plaintiffs’ business losses were not related to any “direct physical loss of or damage to” covered properties as required by the terms of their insurance policies. The Appellate Division affirmed all six dismissals and further concluded that the losses were not covered under “their insurance policies’ civil authority clauses, which provided coverage for losses sustained from governmental actions forcing closure or limiting business operations under certain circumstances.”...

New Jersey Appellate Division Broadens Scope of Sham Affidavit Doctrine

Last month, in an opinion approved for publication, the New Jersey Appellate Division, in Metro Marketing, LLC, et al. v. Nationwide Vehicle Assurance, Inc., et al., addressed whether a party who switched sides mid-litigation entered a “sham affidavit,” a self-serving certification that directly contradicts prior representations in order to create an issue of fact, after the side-switching took place. In this non-compete litigation between rival telemarketing firms, the plaintiffs sued their former employees for misappropriation of trade secrets. Two scenarios arose in which the sham-affidavit doctrine was potentially implicated. The first was after a defendant who had been deposed returned to the plaintiffs’ employ and submitted a certification directly contradicting his prior deposition testimony. The second was after a co-defendant, who was also rehired by one of the plaintiffs’ companies after his deposition, contradicted his former testimony during a secretly recorded phone call. The trial court excluded both pieces of evidence and granted summary judgment to the defendants, dismissing all of the plaintiffs’ claims. On appeal, the Appellate Division ruled that the court below properly excluded contradictory testimony of the first defendant. On this issue of first impression, the court held that the sham-affidavit doctrine could apply in a side-switching scenario where: (1) a co-defendant is deposed; (2) that deponent thereafter obtains a job with...

New Jersey Appellate Division Finds Parties’ Agreement for Arbitrator to Participate in Settlement Discussions and Continue as Arbitrator Need Not Be in Writing

In Pami Realty, LLC v. Locations XIX Inc., the New Jersey Appellate Division, in a to-be-published opinion, reversed a trial court’s determination that an agreement between litigants that an arbitrator could participate in settlement discussions and then continue as arbitrator must be in writing. After commencing litigation over a construction contract dispute, the parties agreed to participate in arbitration proceedings to resolve their dispute. On the second day of arbitration, the parties discussed settlement. When the settlement negotiations were unsuccessful, the arbitration resumed for a final day of testimony. Six weeks after the submission of post-hearing briefs, the arbitrator reported that he had finished his opinion and would be finding in favor of the defendant. Plaintiff’s counsel responded that the arbitrator “had no authority to act as a mediator in this matter and then re-assume the role of arbitrator,” and his “decision to act as mediator created a conflict of interest that neither party waived through the arbitration agreement.” After the arbitrator issued an award in favor of the defendant, the defendant moved to confirm the award. The plaintiff filed a cross motion to vacate the award, again arguing that the arbitrator had “exceeded his powers when he resumed the role of arbitrator after acting as a mediator mid-arbitration.” In a one-page statement of reasons,...

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

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

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...

Fourth Time’s a Charm: The Third Circuit Reverses Dismissal of Trade Secrets Complaint and Clarifies Pleading Standard

The Third Circuit issued a precedential decision in Oakwood Laboratories LLC v. Bagavathikanun Thanoo et al. that clarified the pleading requirements for trade secrets misappropriation claims under the Defend Trade Secrets Act, 18 U.S.C. § 1836(b) (DTSA). In that decision, the Third Circuit held that the Third Amended Complaint was “so factually detailed that, on appeal, we conclude it easily meets the pleading requirements of the Federal Rules of Civil Procedure and pertinent substantive law.” Earlier, the District Court for the District of New Jersey had dismissed four of Oakwood Laboratories LLC’s (“Oakwood”) complaints on the grounds that each complaint was not specific enough to support a claim. The District Court dismissed Oakwood’s Third Amended Complaint (its most recent attempt), because it did not show precisely how defendants misappropriated Oakwood’s trade secrets, but noted that Oakwood did plead facts sufficient to identify its trade secrets and support the information’s protected status. Oakwood appealed, and the Third Circuit reversed. Oakwood alleged that defendants Aurobindo Pharma U.S.A. and its subsidiaries misappropriated Oakwood’s trade secrets regarding microsphere technology when Aurobindo hired an Oakwood employee who specializes in this technology, Dr. Bagavathikanun Thanoo, and relied on a memorandum provided for the limited purpose of exploring a business opportunity to develop Aurobindo’s own microsphere technology. In reversing the District Court’s...

Third Circuit Affirms That CFA and PLA Claims Can Coexist Independently

We recently blogged about a New Jersey Supreme Court decision in which the court held that claims under New Jersey’s Consumer Fraud Act (CFA) may be brought in the same action as claims under the Products Liability Act (PLA). In a follow-up to that case, the Third Circuit in Sun Chemical Corporation v. Fike Corporation and Suppression Systems, Inc. applied the New Jersey Supreme Court’s guidance on the interplay between the CFA and PLA. The Third Circuit affirmed in part and reversed in part a District Court judgment, finding that some of the claims were “absorbed by the PLA” and some could be brought independently pursuant to the CFA. Sun sued defendant Fike under the CFA for alleged misrepresentations related to Sun’s purchase of an explosion-suppression system. Sun alleged that Fike “misrepresented various aspects of the suppression system in its pre-purchase conversations” and that Fike was therefore liable for injuries and property damages suffered by Sun from an explosion that occurred at Sun’s facility. The District Court of New Jersey determined that Sun’s CFA claims were precluded and absorbed by the PLA because “Sun was seeking damages because various features of the suppression system failed and that failure caused personal injury to Sun’s employees.” The CFA, the District Court reasoned, could not be used to...