Ethical Advertising – New Challenges

Blank Rome Partner Jonathan Korn, based in the Firm’s Princeton office, will present on “Ethical Advertising – New Challenges” at the New Jersey Association for Justice (“NJAJ”) 2017 Medical Malpractice Boardwalk Seminar on April 28, 2017, at the Harrah’s Resort in Atlantic City.

The three-day seminar is exclusively designed to meet the continuing educational requirements of trial attorneys and features outstanding local and regional speakers along with top national speakers. Additional topics include:

  • Making Your Mediation and Arbitration Statements Pop!
  • The Patient Safety Act: Developing Cases – Don’t Overreach
  • Deposing the Defendant on the Standard of Care
  • Using Medical Learned Treatise

For more information or to register, please click here

New Jersey Supreme Court Rules That Release of Debt of Closely-Held Corporation in Exchange for Release of Debt by Second Closely-Held Corporation Is a Fraudulent Transfer

Michael A. Rowe

In Motorworld, Inc. v. William Benkendorf, et al. (A-64-15), the Supreme Court of New Jersey held that a corporation’s release of a debt constituted a fraudulent transfer under the Uniform Fraudulent Transfer Act (“UFTA”), N.J.S.A. 25:2-20 to -34.

In 1998, Morton Salkind arranged for his wife, Carole Salkind, to become the sole shareholder of 19 closely held corporations, including: (i) plaintiff Motorwold, Inc. (“Motorworld”); (ii) Fox Development, Inc. (“Fox”); and (iii) Giant Association (“Giant”). Defendant William Benkendorf was the owner of defendant Benks Land Services, Inc. (“Benks”). In 2004, Morton retained Benks to provide landscaping services to some of the companies owned by Carole, including Fox and Giant, but not Motorworld. Over time, Fox and Giant accumulated a debt to Benks of more than $1 million. Later in 2004, Motorworld loaned Benkendorf and his wife, defendant Gundrun Benkendorf, $600,000 so that the Benkendorfs could resolve a tax issue. Carole transferred $499,999 from her personal account into Motorworld’s account and the Benkendorfs executed a Note, stating that they would pay the principal amount. The Benkendorfs also agreed not to use the Note to offset any monies owed to them by any company owned by Carole, including Fox and Giant. Continue reading “New Jersey Supreme Court Rules That Release of Debt of Closely-Held Corporation in Exchange for Release of Debt by Second Closely-Held Corporation Is a Fraudulent Transfer”

Happy Birthday to the Defend Trade Secrets Act: A One-Year Retrospective

Blank Rome LLP

Please join Blank Rome’s Trade Secret and Competition group for a cross-office briefing looking back on the impact that the Defend Trade Secrets Act has had during its first year in existence. Have any parties successfully used its extraordinary ex parte seizure provision?  Has there been a major shift in trade secrets law now that it is the subject of a federal statute? We will discuss answers to these questions and more. Continue reading “Happy Birthday to the Defend Trade Secrets Act: A One-Year Retrospective”

The New Jersey High Court Immunizes the State from New Jersey Spill Act Liability for Pre-1977 Discharges

Blank Rome LLP

The New Jersey Supreme Court’s decision in NL Industries, Inc. v. State of New Jersey will frustrate the equitable allocation of cleanup costs at sites involving pre-1977 discharges where the State would otherwise qualify as a responsible party. Such a result would be particularly severe considering the high cleanup price tag for many sites predating 1977. Any party involved in or contemplating such a contribution action against the State should be mindful of this decision when determining how best to proceed. This should include determining whether a federal forum and contribution claims under the NJ Spill Act’s federal counterpart, CERCLA, might achieve a better result. Continue reading “The New Jersey High Court Immunizes the State from New Jersey Spill Act Liability for Pre-1977 Discharges”

Seventh Circuit Is First to Hold that Title VII Protects against Sexual Orientation Discrimination

Blank Rome LLP

In a landmark decision yesterday, the United States Court of Appeals for the Seventh Circuit became the first federal circuit court in the nation to hold that discrimination based on sexual orientation is prohibited under federal law.

Specifically, in its April 4, 2017 decision, the Court found that Title VII of the Civil Rights Act of 1964 prohibits job discrimination based on sexual orientation. Hively v. Ivy Tech Community College, No. 15-1720. In Hively, the plaintiff, an open lesbian, is an adjunct professor who is suing her employer, Ivy Tech Community College, alleging that she was repeatedly passed over for promotions due to her sexual orientation. In reaching its decision, the Seventh Circuit reasoned that sexual orientation discrimination is, in essence, indistinguishable from sex discrimination and thus prohibited under Title VII.

The Seventh Circuit ruling comes after a rare en banc hearing of all 11 judges reviewing a three-judge panel decision from its own court, which, despite expressing strong reservations, held that Title VII did not protect against sexual orientation discrimination, even though gay marriage is now legal. The Court’s en banc decision reversed this prior ruling by an 8-3 vote.

Hively is in line with the Equal Employment Opportunity Commission’s July 2015 administrative ruling (binding federal agencies, but not federal courts), which held that bias based on sexual orientation violates Title VII. In contrast, in March 2017, the Eleventh and Second Circuits issued decisions holding that Title VII does not prohibit discrimination on the basis of sexual orientation. Evans v Georgia Regional Hospital, No. 15-15234 (11th Cir. March 10, 2017); Christiansen v. Omnicom Group, Inc., No. 16-748 (2nd Cir. March 27, 2017). The United States Supreme Court has yet to weigh in on the issue. The Hively decision, however, now creates a circuit split on the issue of whether sexual orientation is entitled to protection under Title VII, which significantly increases the likelihood that the issue is presented to, and accepted by, the Supreme Court for a final decision.

We will continue to monitor the rapidly evolving expansion of protected characteristics under federal law. For now, as a compliance philosophy, the key takeaway for employers is to treat all employees consistently and with respect, as though everyone is protected under the law. Remember that, although protection against sexual orientation discrimination may still be in question under federal law, many states and localities across the country explicitly provide that protection for employees.

This blog was originally by Blank Rome’s Labor and Employment group. Click here to read the alert online. 

Supreme Court Finds Waiver of Right to Arbitrate by Failure to Pay In Tahisha Roach v. BM Motoring, LLC

Bruce M. Gorman, Jr.

In Tahisha Roach v. BM Motoring, LLC (077125) (A-69-15), the New Jersey Supreme Court held that a used car dealership’s knowing refusal to cooperate with plaintiffs’ arbitration demands, filed in reasonable compliance with the parties’ agreement, amounts to a material breach, barring the breaching party from later compelling arbitration.

The decision stemmed from two separate litigations involving a used car dealership’s dispute resolution agreement (“DRA”). Plaintiffs had separately purchased used cars from two used car dealerships (operating under the same name), which turned out to be lemons. Plaintiffs’ respective efforts to file an arbitration before the AAA were met by the dealer’s refusal to advance its arbitration fees, and the AAA’s subsequent dismissal of the petition. Efforts to file in court were met by motions to dismiss in favor of arbitration, which the lower courts granted. Ultimately, a joint action was filed, and the lower court directed the plaintiffs to attempt to refile before the AAA, and dismissed their complaint with prejudice. An appeal was taken, and the Appellate Division affirmed. Continue reading “Supreme Court Finds Waiver of Right to Arbitrate by Failure to Pay In Tahisha Roach v. BM Motoring, LLC”

Federal Appeals Court Dismisses “Lime-a-Rita” Class Action

David Kistler

In a March 16, 2017 decision, the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of a putative consumer class action against Anheuser-Busch Companies, LLC. In this action, plaintiffs alleged that the labeling on defendant’s “Rita” malt beverages (including Bud Light Lime-a-Rita) was misleading and asserted claims for false advertising, omission, and breach of warranty under California law. Plaintiffs alleged that use of the word “Light” was misleading because the products contained considerably more calories and carbohydrates per ounce than other Budweiser products. The Ninth Circuit was called upon to review the District Court’s dismissal of the action with prejudice under Rule 12(b)(6).

In affirming the District Court, the Ninth Circuit held that “no reasonable consumer would be deceived by the label on the carton into thinking that ‘Bud Light Lime Lime-a-Rita,’ which the label calls a ‘Margarita With a Twist,’ is a low calorie, low carbohydrate beverage, or that it contains fewer calories or carbohydrates than a regular beer.” The Ninth Circuit noted that the label makes clear that the product is “not a normal beer” and that the label picture shows a bright green drink served over ice in a margarita glass. According to the Ninth Circuit, comparable products would include a hypothetical Budweiser Lime-a-Rita product (as opposed to a Bud Light) or a tequila margarita, both of which would contain more calories and carbohydrates than the product at issue. For these reasons, the Ninth Circuit dismissed both the false advertising and omission claims.

While this decision is not binding in New Jersey, New Jersey businesses should take note of the Ninth Circuit’s reasoning regarding what constitutes a comparable product for purposes of consumer deception.