Adrienne C. Rogove
In another blow to plaintiffs suing under New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”), the United States District Court for the District of New Jersey in Martinez-Santiago v. Public Storage, 2019 WL 1418118 (D.N.J. March 29, 2019), decertified a class of 160,000 members alleging that lease agreements with the Defendant Public Storage violated TCCWNA. Following the New Jersey Supreme Court’s decision last year finding that a consumer who is a party to a contract that fails to comply with New Jersey law, but who does not suffer any adverse consequences from the noncompliance, has failed to state a TCCWNA claim, United States District Judge Jerome Simandle decertified the class. The decision was based on an analysis of the Rule 23 requirements, where the Court held that the requirements of “typicality,” “predominance,” and “numerosity” under Rule 23 could not be met.
With respect to the typicality requirement, the Court found that the named plaintiff was one of “relatively few” customers who actually suffered an adverse consequence due to the form lease contract entered into with Public Storage. Since the vast majority of class members did not suffer an adverse consequence, the claims of the named plaintiff were not typical of the class members, and therefore the typicality requirement was not met.
The Court also found that the “predominance” requirement could not be met because questions of fact common to class members no longer predominated over questions affecting only individual claims. Finally, because discovery revealed that only 29 class members might be able to assert a viable claim under TCCWNA, the “numerosity” requirement of Rule 23 likewise could not be met.
The decision of the Court in Martinez-Santiago left only the named plaintiff with potentially viable claims, thereby continuing to chip away at the prospect of successful class action suits against corporate entities, and large attorneys’ fee awards to class action counsel, in suits where the class cannot meet the requirements of Federal Rule of Civil Procedure 23.
Adrienne C. Rogove
In a case alleging violations of federal securities laws by Cigna Corporation and certain of its officers, the Second Circuit Court of Appeals affirmed the dismissal of the complaint on the basis that the statements made by the defendants were simple, generic assertions about its regulatory policies and procedures upon which no reasonable investor would reasonably rely, and were therefore not materially misleading. Singh v. Cigna Corp., No. 17-3484-cv, (2d Cir. Mar. 5, 2019). Following Cigna’s acquisition of HealthSpring, a regional Medicare insurer, Cigna issued several public statements, including 10-K filings, concerning its commitment to regulatory compliance given the significant regulatory responsibilities involved in Medicare coverage. In its 2013 Form 10-K filed on February 27, 2014, Cigna said it had “established policies and procedures to comply with applicable requirements,” and that it “expect[ed] to continue to allocate significant resources” to compliance efforts. Id. at *5. In December 2014, Cigna published a pamphlet titled “Code of Ethics and Principles of Conduct,” which affirmed the importance of compliance and integrity:
[I]t’s important for every employee. . .to handle, maintain, and report on [Cigna’s financial] information in compliance with all laws and regulations. . .
[W]e have a responsibility to act with integrity in all we do, including any and all dealings with government officials.
Id. at **4-5. In its 2014 Form 10-K, Cigna stated that it would “continue to allocate significant resources” to compliance. Id. at *6. The 10-K included a discussion of the difficulty of compliance in the regulatory environment given the “uncertainty surrounding legislation and implementation of national healthcare reform.” Id.
A 2015 audit of Cigna’s Medicare operations by the Centers for Medicare and Medicaid Services (“CMS”) revealed numerous regulatory violations. Cigna filed a Form 8-K disclosing the CMS audit conclusions and accompanying sanctions. Within several days, Cigna’s stock price fell substantially. Continue reading “Generic Representations of Regulatory Compliance Not Actionable under Federal Securities Laws”
Blank Rome Partners Omid Safa and Michael A. Iannucci have been named 2018 Rising Stars by Law360 in recognition of their legal accomplishments in the categories of Insurance and Class Action, respectively. Below are excerpts of their profiles, as published by Law360. Continue reading “Meet Blank Rome’s 2018 Law360 Rising Stars”
Jeffrey N. Rosenthal and Ethan M. Simon
To quote classicist author Edith Hamilton from her book The Roman Way to Western Civilization, “The comedy of each age holds up a mirror to the people of that age, a mirror that is unique.” Nowhere is that statement truer than when discussing the comedic genius of the hit animated television series South Park, now approaching its twenty-second season.
In its 2006 Primetime Emmy Award-winning episode “Make Love, Not Warcraft,” South Park delved into video gamers’ obsession with the wildly-popular PC game World of Warcraft. One of the show’s plotlines focused on a player whose in-game character had become so powerful the game’s developer had to devise a way to stop him. The developer’s solution: give another player the legendary “Sword of a Thousand Truths,” a unique item that might even the odds.
Eight years later, South Park lambasted so-called “freemium” games in its Primetime Emmy Award-nominated episode “Freemium Isn’t Free.” This episode, too, took a hard look at gaming culture, paying particular attention to “freemium games”—in which players can play a videogame for free, but to obtain certain desirable upgrades or items they must pay real-world money. In this episode, an eight-year-old character spent thousands of dollars on freemium upgrades, much to his father’s chagrin.
Not surprisingly, South Park’s observations about videogame culture were right: gamers will place a premium on certain virtual items, and are eager to spend big money to get them.
To read the full article, please click here.
“Loot Boxes in Videogames: Gambling by Any Other Name?” by Jeffrey N. Rosenthal and Ethan M. Simon was published in The Legal Intelligencer on April 24, 2018.
Adrienne C. Rogove
In a recent precedential opinion in City Select Auto Sales, Inc. v. David Randall Associates, Inc., 885 F.3d 154 (3d Cir. 2018), the United States Court of Appeals for the Third Circuit affirmed a judgment by the United States District Court for the District of New Jersey following a jury verdict dismissing a case brought under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, against the president and co-owner of David Randall Associates, Inc. (“DRA”). DRA was a commercial roofing company. Raymond Miley (“Miley”) was its president and a majority shareholder. DRA hired Business to Business Solutions (“Business Solutions”) to fax unsolicited advertisements to thousands of fax numbers. City Select was the recipient of some of these faxes.
Under the TCPA, it is “unlawful for any person…to use any telephone facsimile machine…or other device to send, to a telephone facsimile machine, an unsolicited advertisement.” 47 U.S.C. § 227(b)(1)(C) (emphasis added). The Federal Communications Commission has defined “sender” as the person “on whose behalf [the faxes] are transmitted.” 10 FCC Rcd. 12391, 12407 (1995). Here, City Select argued that the “on whose behalf” language was meant to place liability on the author or originator of the relevant faxes, and therefore, Miley, as the author or originator of the faxes, was a “sender” under the TCPA. Continue reading “Third Circuit Restricts Corporate Officer Liability under Telephone Consumer Protection Act”
On his final day in office, Governor Christie signed into law a dramatic change in how judgments obtained in foreign countries are domesticated in New Jersey. First introduced in 2015, the Foreign Country Money-Judgments Recognition Act of 2015 (the “Act”) repeals the 1997 Act of the same name and fundamentally alters the process for recognizing foreign judgments in New Jersey. Continue reading “Governor Christie’s Final “Act””
Stephen M. Orlofsky and Deborah Greenspan
A recent decision by the United States Court of Appeals for the Third Circuit reminds us that when we want an arbitration clause to apply in certain situations or to certain parties, we have to build that intention into the plain terms of the contract. In White v. Sunoco, Inc., — F.3d —, No. 16-2808, 2017 WL 3864616 (3d Cir. Dec. 5, 2017), Sunoco promoted the “Sunoco Awards Program,” under which customers who used a Citibank-issued “Sunoco Rewards Card” credit card were supposed to receive a 5-cent per gallon discount on gasoline purchased at Sunoco gas stations. The promotional materials included a document entitled “Terms and Conditions of Offer,” which indicated that Citibank issued the Sunoco Rewards Card and applicants had to meet Citibank’s creditworthiness criteria to obtain the credit card. Continue reading “A Lesson from the Third Circuit on Arbitration Clauses: Say What You Mean”