On behalf of four Texas law firms, Blank Rome on March 24, 2020, successfully obtained a dismissal of a putative legal malpractice class action in Gore, et al. v. Bruce Nagel, et al., filed in the United States District Court for the District of New Jersey, alleging that the law firms violated New Jersey Court Rule 1:21-7 by charging excessive contingency fees. Plaintiffs did not allege that the Texas law firms provided incorrect advice. In underlying personal injury litigation, the Texas law firms represented Debbie Gore, a Texas resident, and Doris Lance-Smith, an Alabama resident, against Ethicon, the manufacturer of pelvic mesh products for injuries sustained after surgical implantation of these products. On May 21, 2013, and June 2, 2012, respectively, Texas resident Gore and Alabama resident Lance-Smith, entered into retainer agreements with Texas counsel to pursue their mesh claims against Ethicon. Both Plaintiffs agreed to pay a 40 percent contingency fee, and allowed their counsel to associate with other law firms without increasing the required fee. Gore’s Retainer Agreement stated that Texas law governs and that any claims “arising under [the Gore Retainer] must be filed only in a court of competent jurisdiction in Harris County, Houston, Texas.” Lance-Smith’s Retainer Agreement did not have a choice of law provision. The Plaintiffs had sustained injuries in their home states after being implanted with the allegedly defective mesh products. Continue reading “Blank Rome Obtains Dismissal of Putative Class Action for Legal Malpractice against Texas Law Firms”
COVID-19 Resources for New Jersey Individuals and Businesses
The outbreak of the novel coronavirus (“COVID-19”) is impacting businesses and public life in New Jersey and around the world. From supply chain disruption, government-ordered closures, and event cancellations to employee safety concerns and social distancing recommendations, every company is facing its own unique challenges in the face of the uncertainties surrounding this global pandemic.
How Can We Help
Blank Rome’s Princeton office, as well as Blank Rome’s Coronavirus (“COVID-19”) Task Force (“Task Force”), is monitoring this ever-changing situation and is here to help. The Task Force is an interdisciplinary group of the Firm’s attorneys with decades of experience helping companies and individuals respond to the legal fallout from disruptive crises and disasters.
Our multifaceted team includes insurance recovery, labor & employment, maritime, litigation, corporate, real estate, and cybersecurity & data privacy attorneys prepared to analyze your issues from every conceivable angle to ensure a holistic, complete, and comprehensive approach to your specific needs and issues. Our Princeton attorneys are ready to assist New Jersey businesses that must respond and prepare for an evolving public health emergency.
Latest Executive Order
You can download or view the most recent Executive Order from Governor Phil Murphy of the State of New Jersey setting forth what business are deemed essential and permitted to remain operating.
Stay Informed and Updated
Our Task Force continues to update businesses on these and other emerging issues in this rapidly developing legal landscape and has developed helpful and practical preparedness guidance; answers to common questions; and other materials for both individuals and businesses affected by COVID-19.
Links to our most recent guides can be found below:
- Understanding the Employment and Tax Provisions of the Families First Coronavirus Response Act
- FERC Issues Guidance and Regulatory Relief in Connection with Coronavirus Response
- Protecting Student Privacy: DOE Issues Guidance for Educators on Permissible COVID-19 Disclosures Under FERPA
- Update on Emergency Financing for Small Businesses through the SBA
- Key Considerations for Creating Employer-Sponsored Charities in Response to the COVID-19 Crisis
- Looming Payment Defaults: Act Now on Your Trade Credit Insurance
- COVID-19 Legislative Update – March 25, 2020
- DOL Issues Families First Coronavirus Response Act Guidance on Employer Coverage and Obligations to Provide Paid Sick and Family and Medical Leave
For the latest updates and to see all our COVID-19 resources, please visit our Coronavirus (“COVID-19”) Task Force page regularly or subscribe to receive our digest published twice a week.
Third Circuit Adopts Rule That Removal of State Litigation to Federal Court Does Not Confer Personal Jurisdiction over the Defendant
Adrienne C. Rogove
In the last few years, the United States Supreme Court and federal courts in New Jersey and Pennsylvania have provided additional guidance on what circumstances give rise to personal jurisdiction over foreign Defendants. The Third Circuit addressed the issue of consent to jurisdiction in Danziger & DeLlano v. Morgan Verkamp, LLC, in its January 15, 2020, decision where it held that removing a case to federal court is not a waiver of the defense of personal jurisdiction. In Danziger, two law firms were engaged in a dispute over whether the plaintiff firm was entitled to a referral fee following the defendant firm’s settlement of a qui tam action allegedly referred by the Plaintiff Danziger (“Danziger”).
Danziger is a Texas law firm. Danziger alleged it referred potential qui tam clients to Morgan and Verkamp, LLC (“Morgan Verkamp”), an Ohio law firm. Danziger claimed it formed an oral contract with Morgan Verkamp to collect one-third of the attorneys’ fees as a referral fee in connection with a qui tam case filed on behalf of Michael Epp. The Epp case was settled for “hundreds of millions of dollars.” Danziger & DeLlano v. Morgan Verkamp, LLC, __ F.3d __ (3d Cir. 2020) (slip op. at 4). Continue reading “Third Circuit Adopts Rule That Removal of State Litigation to Federal Court Does Not Confer Personal Jurisdiction over the Defendant”
A Paralegal Is Guilty of the Unauthorized Practice of Law by Preparing Documents for Litigation and Providing Legal Advice without Supervision by a Licensed New Jersey Attorney
Adrienne C. Rogove
New Jersey court rules and statutes prohibit the unauthorized practice of law. While paralegals engage in activities that constitute the “practices of law,” they can only do so under the direct supervision of a licensed New Jersey attorney. R.P.C. 5.3. The Superior Court of New Jersey, Appellate Division, recently addressed this issue in an unreported decision dated November 21, 2019, in Baron v. Karmin Paralegal Services, __ N.J. Super. __ (2019) (slip. op.). In Baron, the New Jersey Superior Court, Appellate Division, affirmed the decision of the Superior Court, Law Division, Special Civil Part, which held that the defendant paralegal company, Karmin Paralegal Services, committed fraud by performing legal services on behalf of the plaintiff, John Baron. While the Appellate Division reversed that part of the trial court’s decision awarding punitive damages to the plaintiff, the Court’s guidance on what constitutes the “practice of law” and the implications under New Jersey’s Rules of Professional Conduct are important to both the legal community and New Jersey consumers of legal services. Continue reading “A Paralegal Is Guilty of the Unauthorized Practice of Law by Preparing Documents for Litigation and Providing Legal Advice without Supervision by a Licensed New Jersey Attorney”
Personal Jurisdiction and Internet Transactions
Jonathan M. Korn and Michael R. Darbee
In a recent case, the New Jersey Appellate Division addressed whether an Internet transaction between a New Jersey buyer and California seller exposed the seller to a New Jersey lawsuit initiated by the buyer.
The case, Jardim v. Overley, involved the sale of a vintage car. The seller, Overley, is a California resident. On May 2, 2018, he listed a 1960 Buick Invicta for sale on the website Hemmings.com, a marketplace used to list cars for sale. Overley explained in a certification that he is not in the business of selling cars and does not regularly conduct business over the Internet. The buyer, Jardim, is in the business of selling used cars and has an office in New Jersey. Jardim v. Overley, __ N.J. Super. __ (2019) (slip op. at 3–4).
On May 26, 2018, Jardim, through his business associate, e-mailed Overley and offered to purchase the car. In a series of e-mail and telephone communications over a two-day period, the parties negotiated and agreed on a purchase price. Once the price was set, the parties executed a bill of sale. Jardim arranged to have the car shipped from California to New Jersey, and on June 25, 2018, he received the car in New Jersey. Id. at 4–8.
When the car arrived, Jardim discovered that it was not in the condition Overley had advertised. He filed a lawsuit in the Law Division, alleging claims for breach of warranty, unjust enrichment, fraud, and consumer fraud. The trial court, however, dismissed Jardim’s claims for lack of personal jurisdiction over the seller. It reasoned that the parties’ contact was an isolated occurrence and that their negotiations did not create “sufficient minimum contacts with New Jersey to attach personal jurisdiction to Overley.” Id. at 8–9. Continue reading “Personal Jurisdiction and Internet Transactions”
Hiring in New Jersey? Salary History Ban Sprouts in Garden State
Effective January 1, 2020, private employers in New Jersey are prohibited from asking job applicants about their salary, wage, and benefit history and are not permitted to make hiring decisions based on that information. Employers will also be prohibited from requiring that an applicant’s salary history satisfy certain minimum or maximum requirements.
There are notable exceptions to this prohibition, which include the following:
- If an applicant “voluntarily, without employer prompting or coercion,” discloses salary or wage information, the employer may verify whether the information was accurate and use the information to determine compensation to be paid to the applicant;
- An employee is applying for internal transfer or promotion with a current employer;
- Actions taken by an employer pursuant to a federal law or regulation that expressly requires the disclosure or verification of salary history for employment purposes; and
- After an offer of employment has been made that includes an explanation of the overall compensation package, an employer may confirm an applicant’s salary history upon the applicant’s written authorization.
Employers who violate the law can be fined up to $1,000 for a first offense, $5,000 for a second offense, and $10,000 for violations thereafter.
Please contact a member of Blank Rome’s Labor & Employment practice group if you have any questions about compliance with New Jersey’s salary and wage ban or any other employment issues.
Class Decertified Where Vast Majority of Members Sustained No Ascertainable Loss
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.
“Obesity Alone” Is Not a Disability under the New Jersey Law against Discrimination
Earlier this month, a three-judge panel for the Appellate Division of the Superior Court of New Jersey affirmed a 2018 trial court decision granting summary judgment against a self-described obese former bus driver for defendant Community Bus Lines, Inc. (“Community”), and dismissing the driver’s claim for violation of the New Jersey Law Against Discrimination (“NJ LAD”). In doing so, the appellate court held that “obesity alone is not protected under the NJ LAD as a disability unless it has an underlying medical cause.” Because plaintiff, in part, failed to present any direct or circumstantial evidence that defendants perceived the driver as disabled due to a medical condition that caused him to be overweight, the appellate court found his claim was without merit.
The plaintiff in this matter worked as a bus driver for Community for 10 years during which time he weighed between 500 and 600 pounds. To maintain his status as an active bus driver, he was required to undergo a medical examination every two years and obtain medical certification verifying his fitness to drive. In 2015, a doctor certified by the United States Department of Transportation (“DOT”) conducted plaintiff’s examination and temporarily disqualified him from driving a bus pending further testing. The plaintiff never followed through to complete the required additional testing and was therefore placed “out of service.” Despite his failure to schedule the follow-up testing, plaintiff’s supervisor referred him for a second opinion to another doctor, who confirmed the prior conclusions and found that further testing was needed before a medical certification could be issued. Neither doctor who examined plaintiff determined that he was disabled but only that further testing was required before he could be certified. Plaintiff again did not pursue the required testing and remained on leave. Continue reading ““Obesity Alone” Is Not a Disability under the New Jersey Law against Discrimination”
Generic Representations of Regulatory Compliance Not Actionable under Federal Securities Laws
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”
More Money, More Problems? New Jersey Significantly Expanding Family Leave Benefits
The bill (NJ A3975), revamping the New Jersey Family Leave Act (“NJFLA”) and Family Leave Insurance (“FLI”), was passed in both houses of the New Jersey Legislature on January 31, 2019. Governor Murphy is expected to sign the bill today, with some changes effective immediately.
As a reminder, NJFLA provides job-protected leave for workers at large employers to care for family members. On the other hand, FLI provides wage-replacement benefits to workers during a leave used to care for a family member. FLI applies regardless of the size of the employer and is funded by employee payroll deductions.
Summary of the most significant changes: Continue reading “More Money, More Problems? New Jersey Significantly Expanding Family Leave Benefits”