Business Litigation Alert Blog

New Jersey Poised to Mandate Across-the-Board Information and Data Security Preparedness

New Jersey Poised to Mandate Across-the-Board Information and Data Security Preparedness

The New Jersey Assembly is considering legislation that will require individuals and businesses that own or license personal information about a New Jersey resident to create and maintain a comprehensive information security program (“ISP”). The bill, A-5206, was introduced by Assemblywoman and Deputy Majority Leader Annette Quijano (D-Union) on November 30, 2017, and referred to the Assembly Homeland Security and State Preparedness Committee. If passed, New Jersey would join other states including Massachusetts (see 201 CMR 17.01 to 17.05) and Rhode Island (R.I. Gen. L. § 11-49.3-2), and sector-specific regulatory schemes including the Gramm-Leach-Bliley Act (16 CFR 314), New York Department of Financial Services Cybersecurity Regulation (23 NYCRR 500), and the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Security Rule (45 CFR 164), that require a written information security program. The bill as currently drafted includes a minimum of 28 data security policies and practices that must be included in any company’s ISP. These include: Designating one or more employees to be in charge of the ISP; Ongoing employee training regarding risks to the security, confidentiality, and integrity of any records containing personal information, and imposing disciplinary measures for violation of ISP rules; Obligating a company to conduct...

Class Certification of TCCWNA Claims Dealt a Serious Blow by NJ Supreme Court in Dugan v. TGI Fridays and Bozzi v. Restaurant Partners, LLC

Class Certification of TCCWNA Claims Dealt a Serious Blow by NJ Supreme Court in Dugan v. TGI Fridays and Bozzi v. Restaurant Partners, LLC

On October 4, 2017, the Supreme Court of New Jersey dealt a subtle but serious blow to “no injury” TCCWNA class actions. In consolidated appeals, Dugan v. TGI Fridays and Bozzi v. Restaurant Partners, LLC, the plaintiffs had argued that the defendant restaurant operators violated the plaintiffs’ clearly established rights by failing to list prices for beverages on their menus, that the restaurants were required to plainly mark the prices, and that when the restaurants’ employees presented menus to customers (class members), they “offered” contracts that violated the New Jersey Consumer Fraud Act (“CFA”) and the Truth-in Consumer Contract, Warranty and Notice Act (“TCCWNA”). However, the Court concluded that class certification was not appropriate because individual, rather than common, issues would predominate in proving TCCWNA’s “aggrieved consumer” and “clearly established legal right” requirements. The fundamental take-away from the Supreme Court’s analysis of TCCWNA’s “aggrieved consumer” requirement is that simply demonstrating that a consumer contract offends TCCWNA does not establish liability under the Act, because “[b]y its very terms, TCCWNA . . . does not apply when a defendant fails to provide the consumer with a required writing.” Rather, “at a minimum, a claimant must prove that he or she was...

Gibbons Ranked Best Law Firm and Best Lobbying Firm in Inaugural NJBIZ Reader Rankings

Gibbons Ranked Best Law Firm and Best Lobbying Firm in Inaugural NJBIZ Reader Rankings

Gibbons P.C. has been selected as the best law firm and the best lobbying firm in New Jersey in the inaugural NJBIZ Reader Ranking Awards. The Reader Rankings were compiled through an online survey seeking the best of the best in a wide range of categories and subcategories. According to NJBIZ, “The publication of the 2017 Reader Rankings by NJBIZ is our way of recognizing the regard our readers have for the businesses in their communities. What makes the companies listed here distinct is the devotion they inspire among our region’s business leaders.” Gibbons has been recognized by numerous organizations and publications for the firm’s work on behalf of clients, including being named among the New Jersey Law Journal’s Litigation Departments of the Year, earning the top overall honors in 2014, as well as recognition for the practice areas of class actions (2017), products liability (2016), and commercial litigation (2013). The Gibbons Government Affairs Department has ranked as the #1 lawyer-lobbying firm in New Jersey for nine consecutive years, according to the New Jersey Election Law Enforcement Commission In addition, the firm and Gibbons attorneys are also consistently recognized in annual client-review publications such as the Chambers USA Guide to...

Dos and Don’ts for Online Retailers Listing Terms and Conditions on Their Websites

Dos and Don’ts for Online Retailers Listing Terms and Conditions on Their Websites

A recent California federal decision states clear guidelines for consumer-focused companies’ online terms and conditions. In McKee v. Audible, Inc., the plaintiff signed up on his smartphone for a free one-month trial with Audible, an Amazon subsidiary offering audiobook subscription services. Thereafter, the plaintiff filed a putative class action against Audible and Amazon.com taking issue with Audible’s policy regarding unused credits. Defendants then filed a motion to compel arbitration. The motion to compel arbitration was granted as to Amazon, but denied as to Audible. The court found that while both companies’ arbitration agreements were valid and enforceable, Audible’s customer user agreements were not clearly displayed when consumers signed up for the service online and were blocked by certain images when using the Audible app. Therefore, customers were not given the requisite actual or constructive notices of the terms of service, such that they could mutually assent to the terms of service in order to create a valid and enforceable contract. The court offered the following guidelines for constructive notice in internet commerce: (1) “terms of use” will not be enforced where there is no evidence that the website user had notice of the agreement; (2) a user should be encouraged...

Slow Down You’re Moving Too Fast: Third Circuit Directs District Court to Resolve Motion to Compel Arbitration Before Motion to Dismiss

Slow Down You’re Moving Too Fast: Third Circuit Directs District Court to Resolve Motion to Compel Arbitration Before Motion to Dismiss

In a recent decision, the Third Circuit made it abundantly clear that a motion to compel arbitration must be decided before a Rule 12(b)(6) motion to dismiss. Joshua Silfee filed a lawsuit against ERG Staffing Service, his former employer, in the Middle District of Pennsylvania, claiming the company’s payroll policies violated state law because workers were required to use a fee-carrying debit card. ERG filed a motion to compel arbitration pursuant to Section 4 of the Federal Arbitration Act, asserting that the arbitration agreement between Silfee and ERG’s payroll vendor precluded the suit against ERG. ERG also filed a Rule 12(b)(6) motion to dismiss Silfee’s complaint based on the merits of his state law claims against the company. The district court decided to delay consideration of ERG’s motion to compel arbitration and denied the company’s motion to dismiss the case. ERG appealed. The Third Circuit concluded that the district judge erred in delaying the arbitrability inquiry, explaining that arbitrability is a “gateway” issue and that, after a motion to compel arbitration is filed, a court “must refrain from further action until it determines arbitrability.” The Third Circuit noted that “[t]he seeds of the District Court’s confusion may have been sown...

Third Circuit Clarifies Focus of Preliminary Injunction Standard

Third Circuit Clarifies Focus of Preliminary Injunction Standard

Describing its precedent as “confus[ing]” and “inconsistent,” the Third Circuit recently clarified the test for deciding whether to issue a preliminary injunction. Since the 1970’s, courts in the Third Circuit have decided preliminary injunction applications based upon the following factors: (1) the likelihood of success on the merits; (2) whether the movant will be irreparably harmed in the absence of relief; (3) the possibility of harm to others from grant or denial of the relief; and (4) the public interest. However, courts differed as to how these four factors should be applied. In Reilly v. City of Harrisburg, the Third Circuit shed light on how these factors are to be weighed and, at least in part, who bears the burden on each. The Third Circuit held that a movant seeking a preliminary injunction bears the burden of “meet[ing] the threshold for the first two ‘most critical’ factors.” To satisfy the first prong, the movant “must demonstrate that it can win on the merits” by showing that its chances of success are “significantly better than negligible but not necessarily more likely than not.” To satisfy the second prong, however, the movant must show “that it is more likely than not to...

Do You Like What You’re Reading? Rate Our Blog: The ABA Journal’s “Web 100” Award

Do You Like What You’re Reading? Rate Our Blog: The ABA Journal’s “Web 100” Award

Thank you for visiting the Gibbons Business Litigation Alert blog! Content on our site, authored by members of the Gibbons Business & Commercial Litigation Department, provides timely analysis and discussion on legal and business developments within the vast litigation arena. How are we doing? To review our blog and nominate the Gibbons Business Litigation Alert for this year’s ABA Journal’s “Web 100” award, please visit abajournal.com/blawgs/web100 and share why you are a “fan” of our site (Please note: the voting process closes on Sunday, July 30). Thank you in advance for your support.

Wrap Up of United States Supreme Court’s 2016-17 Term

Wrap Up of United States Supreme Court’s 2016-17 Term

With the close of the United States Supreme Court’s 2016-17 term, we offer this wrap up of the term’s most important business and commercial cases (excluding patent cases): Kindred Nursing Ctrs, L.P. v. Clark: The Supreme Court continued its full-throated support of arbitration agreements, again rejecting a state supreme court’s effort to apply an ostensibly arbitration-neutral rule of law to invalidate an arbitration agreement. In Kindred, the Kentucky Supreme Court held that an arbitration agreement signed by an attorney-in-fact under a broad power of attorney was invalid because the power of attorney did not expressly give the attorney-in-fact the right to waive the principal’s right to a jury trial. According to the Kentucky Supreme Court, to grant an attorney-in-fact the authority to waive a “fundamental constitutional right,” a power of attorney must grant that authority expressly and unambiguously. Because the right to access the courts and the right to a jury trial are such “fundamental constitutional rights” and because the power of attorney did not expressly and unambiguously waive them, the attorney-in-fact was not authorized to agree to arbitrate the principal’s claims, and no enforceable arbitration agreement was created. The Supreme Court found that the Kentucky Supreme Court’s facially arbitration-neutral...

Supreme Court Rules That Statute of Repose Trumps Class Action Tolling

Supreme Court Rules That Statute of Repose Trumps Class Action Tolling

The Supreme Court has given a boost to companies defending against securities claims, ruling in California Public Employees’ Retirement System v. ANZ Securities that a statute of repose cannot be extended by the doctrine that the filing of a class action tolls the statute of limitations for the claims of absent class members. The case emanated from a prior class action that had alleged, in connection with certain offerings by Lehman Brothers Holdings Inc., violations of Section 11 of the Securities Act of 1933, which relates to misrepresentations and omissions made in a securities registration statement. Section 13 of the Act provides that any such claim must be brought within “three years after the security was bona fide offered to the public.” CalPERS, which was an absent class member in the original class action, filed its own class action complaint more than three years after the transactions at issue and then opted out of the original class action. Affirming the decisions of the Southern District of New York and the Second Circuit, the Supreme Court held that the three-year limit in Section 13 is a statute of repose, and that such a limit cannot be extended by any court-made tolling doctrine....

Supreme Court Rejects Class Action Plaintiffs’ Attempts to Circumvent Rule 23(f)

Supreme Court Rejects Class Action Plaintiffs’ Attempts to Circumvent Rule 23(f)

As previously discussed on this blog, the Supreme Court granted certiorari to address the question of whether federal courts of appeals have jurisdiction to review an order denying class certification after the named Plaintiffs voluntarily dismissed their claims with prejudice. In the June 12, 2017 decision in Microsoft Corp. v. Baker, the high court answered this question with a very resounding “no.” In Baker, a putative class of owners of Microsoft Corporation’s Xbox 360® video game console filed suit, alleging that the console suffered from a design defect that gouged game discs. Microsoft opposed Plaintiffs’ motion to certify the class. The District Court denied certification, citing comity considerations and relying on the class certification denial in a similar case. The Ninth Circuit denied the Plaintiffs’ 23(f) petition for interlocutory appeal. Plaintiffs then voluntarily dismissed the case with prejudice for the express purpose of obtaining immediate Ninth Circuit review of the District Court’s denial of class certification. Plaintiffs filed an appeal from the final judgment, challenging the denial of class certification, but not the order dismissing the case with prejudice. The Ninth Circuit held that it had jurisdiction under 28 U.S.C. § 1291 because the stipulated dismissal did not involve a...