Tagged: Choice of Law

The Power of New York’s Borrowing Statute

On October 11, 2016, the Supreme Court of New York, Appellate Division, First Department, decided 2138747 Ontario, Inc. v. Samsung C&T Corp., et al., which serves as a reminder to attorneys that New York’s borrowing statute applies even where the parties agreed to a New York choice-of-law provision. The borrowing statute, CPLR 202, provides that, when a non-New York resident sues on a cause of action accruing outside New York, the complaint must be filed timely under the statute of limitations of both New York and the jurisdiction where the cause of action accrued. The statute’s underlying objective is to prevent forum shopping by nonresident plaintiffs. In Ontario, the plaintiff, a corporation formed under the law of Ontario, Canada, was a creditor of SkyPower Corporation, a bankrupt Canadian renewable energy developer. SkyPower’s bankruptcy trustee assigned to the plaintiff all of its claims against the defendants. The plaintiff then sought damages against the defendants for a breach of a nondisclosure and confidentiality agreement (NDA), which contained a broad New York choice-of-law provision. The plaintiff’s complaint was untimely under Ontario’s two-year statute of limitations but was timely under New York’s six-year statute of limitations. The trial court found that Ontario’s two-year statute of limitations applied and dismissed the case. The Appellate Division affirmed. Although the court found...

California District Court Dismisses Facebook’s TCCWNA “Website Terms and Conditions” Lawsuit in Light of Valid Choice-of-Law Provision

New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”) ushered in a wave of class actions last year, targeting various provisions in retailers’ websites “terms and conditions.” Broadly speaking, the TCCWNA prohibits “consumer contracts” from containing language that violates any “clearly established legal right[s].” New Jersey courts have not been alone in adjudicating these cases, however, as a number of similar lawsuits have been brought in other jurisdictions, including California federal district courts. For example, on September 7, 2016, the Central District of California dismissed the complaint in Candelario v. Rip Curl, Inc. on standing grounds, holding that because the plaintiff’s “only connection to the Terms and Conditions appears to be her decision to read them” and because her complaint essentially alleged only “bare procedural violation[s]” of the TCCWNA – without more – she could not satisfy “the injury-in-fact requirement of Article III.” Even more recently, although on different grounds, the Northern District of California dismissed a “website terms and conditions” class action against Facebook. In Palomino v. Facebook, Inc., as in Candelario, the plaintiffs alleged that the social media company’s website terms and conditions violated the TCCWNA because of “provisions that purport to ‘1) disclaim liability for claims brought for Defendant’s negligent, willful, malicious and wanton misconduct; 2) bar claims for personal and economic injury...

Pennsylvania Superior Court Upholds Pennsylvania Choice-of-Law Provision in Restrictive Covenant Dispute Involving California Employee

In Synthes USA Sales, LLC v. Peter Harrison and Globus Medical, Inc., No. 12 EDA 2013, the Superior Court of Pennsylvania applied a Pennsylvania choice-of-law provision in an employment agreement containing confidentiality and non-solicitation provisions in a dispute over an employee who worked in California. In Pennsylvania, so-called “restrictive covenants” and “non-competes” are enforceable if they are incident to an employment relationship, reasonably necessary to protect the employer’s legitimate interests, reasonably limited in duration and geographical scope, and supported by adequate consideration. California law, in contrast, is notoriously hostile to restrictive covenants, with a statute rendering most employment restrictive covenants unenforceable.

Citing Concepcion, Ninth Circuit Holds that FAA Preempts Montana State Law that Invalidates Mandatory Arbitration Clause

In Mortensen v. Bresnan Communications, LLC, the plaintiffs filed a putative class action against Bresnan Communications alleging violations of various federal and Montana state laws in connection with targeted advertising that they received as customers of high-speed, broadband Internet service. When signing up for the service, the plaintiffs had entered into a subscriber agreement that contained a mandatory arbitration provision and designated the application of New York law to all disputes. Applying the U.S. Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion, the Ninth Circuit found that the Federal Arbitration Act (“FAA”) preempted a Montana state law that the District Court had relied on to invalidate the mandatory arbitration clause.

Rejecting Tele Aid, the Third Circuit in Maniscalco v. Brother Holds that the Laws of Consumers’ Home States Apply in Nationwide Class Actions

On March 8, 2013, the United States Court of Appeals for the Third Circuit issued its precedential decision in Maniscalco v. Brother International Corp., which significantly restricts the ability of out-of state plaintiffs to use the New Jersey Consumer Fraud Act (“NJCFA”) to pursue nationwide class actions in New Jersey against New Jersey based companies.

Lack of Standing and Choice-of-Law Rules Doom Nationwide Consumer Fraud Class Action Against BMW

On October 31, 2011, in Nirmul v. BMW, the District Court for the District of New Jersey dismissed a nationwide class action against BMW asserting claims under the New Jersey Consumer Fraud Act (“NJ CFA”), concluding, essentially, that none of the three plaintiffs had a standing to sue. The complaint alleged that the high pressure fuel pump in BMW’s N54 turbo engines had a known defect and that BMW failed to disclose this fact to purchasers throughout the country.