Category: Appellate

11th Circuit’s Stay Suggests that the FTC’s Final Order Against LabMD May Itself be “Unfair” and “Unreasonable” 0

11th Circuit’s Stay Suggests that the FTC’s Final Order Against LabMD May Itself be “Unfair” and “Unreasonable”

As reported on this blog on September 27, 2016, the FTC issued a Final Order holding that LabMD’s data security practices were “unreasonable” and constituted an “unfair” business practice in violation of Section 5 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §45(a) and (n). The findings were a clear signal of the FTC’s expanding efforts to regulate data security and to incentivize companies handling sensitive data to implement and maintain strong data security practices. On Thursday, November 10, 2016, the 11th Circuit stayed enforcement of the FTC’s Final Order pending a full hearing and final decision on LabMD’s appeal, and called into question the validity of the FTC’s conclusions as to what may constitute an actionable “privacy harm” following a data security breach.

Three Gibbons Directors Named “Lawyers of the Year” by 2014 Best Lawyers 0

Three Gibbons Directors Named “Lawyers of the Year” by 2014 Best Lawyers

Gibbons is proud to announce that Thomas J. Cafferty, a Director in the Gibbons Business & Commercial Litigation Department, Michael R. Griffinger, a Director in the Gibbons Business & Commercial Litigation Department, and John T. Wolak, Insurance Practice Team Leader, received “Lawyer of the Year” designations in the 2014 edition of Best Lawyers®.






Third Circuit Finds Waiver of Right to Arbitrate After Ten Months of Litigation 0

Third Circuit Finds Waiver of Right to Arbitrate After Ten Months of Litigation

In its recent opinion in In re: Pharmacy Benefit Managers Antitrust Litigation, the Third Circuit held that a defendant waived its right to arbitration after “actively” and “aggressively” litigating an antitrust dispute for ten months, even though no discovery had taken place. Emphasizing that no one factor is determinative, the Third Circuit’s holding is somewhat of a departure from prior cases finding waiver, which “uniformly featured significant discovery activity in the District Court.”






Second Circuit Clarifies the Pleading Standard for “Substantial Assistance” in SEC Enforcement  Cases Against Aiders and Abettors 0

Second Circuit Clarifies the Pleading Standard for “Substantial Assistance” in SEC Enforcement Cases Against Aiders and Abettors

In SEC v. Apuzzo, the Second Circuit Court of Appeals recently lowered the pleading standard for aiding and abetting of securities fraud in SEC enforcement actions by reversing the District Court’s finding that proximate causation of the ultimate harm was required to establish substantial assistance. When evaluating aiding and abetting claims, courts previously extended the proximate cause requirement that applies in litigation between private parties to SEC enforcement proceedings. The SEC’s complaint in Apuzzo outlined the details of a complex, but calculated, fraud scheme. The defendant-appellee, Joseph Apuzzo, was the CFO of an equipment manufacturer — Terex Corporation.






Second Circuit Holds That a Post-Disclosure Stock Price Rebound Does Not Per Se Preclude Damages for Alleged Federal Securities Fraud 0

Second Circuit Holds That a Post-Disclosure Stock Price Rebound Does Not Per Se Preclude Damages for Alleged Federal Securities Fraud

Recently, the Second Circuit vacated a District Court’s dismissal of a securities fraud action brought by Acticon AG, shareholder of China North East Petroleum Holdings Ltd. (“NEP”), for failure to plead economic loss—a necessary element to maintain a private damages action under § 10(b) of the Securities Exchange Act of 1934 (“§10(b)”). Acticon had multiple opportunities to, but did not, sell its NEP shares at a profit after NEP’s disclosure of the alleged fraud. The Court held that economic loss is not conclusively negated at the pleadings stage where the price of a security recovers shortly after a disclosure of alleged fraud. Significantly, in drawing all reasonable inferences in favor of the plaintiff under NEP’s 12(b)(6) motion, the Court explained that a rise in the price of a stock following a corrective disclosure requires an inquiry into whether the security rose for “reasons unrelated to [the] initial drop,” and thus introduces factual questions and competing theories of causation that would be inappropriate to resolve on a motion to dismiss.






New Amendments to New Jersey Court Rules Will Make Orders Denying Arbitration Immediately Appealable 0

New Amendments to New Jersey Court Rules Will Make Orders Denying Arbitration Immediately Appealable

The amended Rules Governing the Courts of the State of New Jersey will take effect on September 4, 2012. Among the more important amendments are those concerning a party’s ability to appeal an arbitration order. Typically, only final orders that conclude a litigation as to all parties and all issues are immediately appealable. But, as a result of amendments made in 2010, the current version of Rule 2:2-3(a) expands the notion of a final order in the context of orders compelling arbitration, providing that “an order compelling arbitration, whether the action is dismissed or stayed, shall also be deemed a final judgment of the Court for appeal purposes.” The New Jersey Supreme Court in GMAC v. Pittella, 205 N.J. 572 (2011), expanded that Rule still further by holding that “orders compelling or denying arbitration are deemed final and appealable as of right as of the date entered.” To implement that decision, Rule 2:2-3(a) has been amended to state that “any order either compelling arbitration, whether the action is dismissed or stayed, or denying arbitration shall also be deemed a final judgment of the Court for appeal purposes.” An amendment to Rule 2:9-1(a) will permit the Trial Court to retain jurisdiction, pending appeal, over other parties and claims that remain in that court.






Third Circuit Sets High Bar for Proof of Price-Fixing, Affirms Dismissal on Summary Judgment Based on Twombly 0

Third Circuit Sets High Bar for Proof of Price-Fixing, Affirms Dismissal on Summary Judgment Based on Twombly

The Third Circuit’s July 27, 2012, opinion in Superior Offshore International, Inc. v. Bristow Group, Inc., confirms that an antitrust plaintiff relying on circumstantial evidence of price-fixing must demonstrate something more than merely parallel behavior, not only to survive a motion to dismiss, as the Supreme Court held in Bell Atlantic Corp. v. Twombly, but also to defeat summary judgment. Thus, unless a plaintiff can present record evidence that is plausibly suggestive of, and not just consistent with, an illegal agreement to fix prices, a defendant moving for summary judgment should prevail. Indeed, without evidence of a manifest agreement not to compete, Superior Offshore International (“SOI”) suggests that courts will not infer an illegal price-fixing arrangement even where participants in an oligopoly market raise prices despite a weakening of demand for their services.






Gibbons Director Kevin McNulty Becomes a U.S. District Judge for the District of New Jersey 0

Gibbons Director Kevin McNulty Becomes a U.S. District Judge for the District of New Jersey

Kevin McNulty, a former Director in the firm’s Business & Commercial Litigation Department, has been appointed and confirmed as a Judge for the United States District Court for the District of New Jersey. “We are very proud of Kevin’s many stellar achievements at Gibbons,” says Patrick C. Dunican Jr., Chairman and Managing Director of the firm. “We know he will approach his judicial role with the greatest integrity and professionalism.”






Second Circuit Finds No Anti-Competitive Conduct in Eatoni v. RIM, Applies “Manifest Disregard of the Law,” Post-Hall Street 0

Second Circuit Finds No Anti-Competitive Conduct in Eatoni v. RIM, Applies “Manifest Disregard of the Law,” Post-Hall Street

In a summary order issued on June 21, 2012, the Second Circuit in Eatoni Ergonomics, Inc. v. Research in Motion Corp., affirmed the Rule 12(b)(6) dismissal of Eatoni’s monopolization complaint against BlackBerry maker RIM for failure adequately to plead anti-competitive conduct. Significantly, the Court held that individual instances of alleged misconduct that are not anti-competitive on their own do not state a claim under Section 2 of the Sherman Act when considered together.






Plaintiff Limited to Nominal Presumed Damages in Defamation Case Absent Proof of Actual Harm 0

Plaintiff Limited to Nominal Presumed Damages in Defamation Case Absent Proof of Actual Harm

On May 21, 2012, the New Jersey Supreme Court issued a corrected Opinion in W.J.A. v. D.A.. In that Opinion, the Court held that presumed damages continue to play a role in New Jersey’s defamation jurisprudence in private plaintiff cases that do not involve matters of public concern. Where a plaintiff does not proffer any evidence of actual damage to reputation, the doctrine of presumed damages permits him/her to survive a motion for summary judgment and to obtain nominal damages if successful at trial. The Court emphasized, however, that in order to receive compensatory damages, a plaintiff must prove actual harm to his/her reputation.