New Jersey Offer of Judgment Rule: NJ Supreme Court Holds High-Low Agreement Supersedes Plaintiff’s Offer of Judgment

Jonathan M. Korn

On July 19, 2018, the New Jersey Supreme Court, affirming both the trial court and Appellate Division, decided Serico v. Rothberg (A-69-16). In its decision denying Plaintiff’s attempt to recover her attorney’s fees and costs pursuant to New Jersey’s offer of judgment rule (R. 4:58, et seq.), the Supreme Court relied upon basic principles of contract interpretation and reminded all New Jersey lawyers and parties of the risks of relying upon silence and omission when later enforcing one’s rights.

The offer of judgment rule can be an effective tool to encourage settlement, primarily based on the threat that if the case does not settle, the party rejecting the offer may be forced to pay substantial attorney’s fees and costs. Rule 4:58 provides that if a party extends an offer of judgment which is not accepted and the party obtains a money judgment in an amount that is 120 percent or more of the offer, then the offeror would be entitled to seek their costs of the lawsuit, including attorney’s fees. R. 4:58-2(a). A high-low agreement, unlike the offer of judgment rule, does not encourage settlement, but instead limits parties’ risk at trial. As defined by Black’s Law Dictionary, a high-low agreement is “[a] settlement in which a defendant agrees to pay the plaintiff a minimum recovery in return for the plaintiff’s agreement to accept a maximum amount regardless of the outcome at trial.” Continue reading “New Jersey Offer of Judgment Rule: NJ Supreme Court Holds High-Low Agreement Supersedes Plaintiff’s Offer of Judgment”

New Jersey Legal Pulse Named a Top 60 New Jersey Blog

Stephen M. Orlofsky and Jonathan M. Korn

We are pleased to announce that New Jersey Legal Pulse was named a Top 60 New Jersey Blog to follow in 2018.

Blog rankings were based on Google reputation and Google search rankings; influence and popularity on Facebook, Twitter, and other social media sites; quality and consistency of posts; and editorial team and expert reviews. To learn more, please click here.

We are honored to be included in the Top 60 New Jersey Blogs list, and look forward to continuing to provide our readers with timely, relevant, and high-quality legal news and updates.

Appellate Division Holds That Non-Residents of New Jersey Have Right to Request New Jersey’s Public Records

Jaret N. Gronczewski

On May 16, 2018, the Appellate Division approved for publication a decision ruling that citizens from states outside New Jersey also have standing to obtain New Jersey’s public records under the Open Public Records Act (“OPRA”). The opinion—Scheeler v. Atlantic County Municipal Joint Insurance Fund, No. A-2092-15T2—was rendered in connection with three consolidated appeals in which the trial courts below came to conflicting conclusions about the scope of OPRA and who had standing to request documents pursuant to OPRA.

The pivotal language in dispute was the first sentence in the first paragraph of OPRA declaring it to be New Jersey’s public policy that “government records shall be readily accessible for inspection, copy, or examination by the citizens of this State.” N.J.S.A. § 47:1A-1. Despite this seemingly unambiguous language limiting OPRA’s rights to New Jersey citizens, the court disagreed. It rooted its rationale in other more specific sections of OPRA that had no such limiting language, the policy preference to construe the right to access broadly, OPRA’s history and purpose, and the fear of producing an absurd result.

In so holding, the court found that it owed no deference to a 2013 U.S. Supreme Court decision in McBurney v. Young, 569 U.S. 221 (2013) that referenced OPRA as one of several state open records statutes that limited access to citizens of its state. The court found that the U.S. Supreme Court’s reference was dicta and not binding.

Scheeler is an impactful ruling with wide-reaching implications that had amici arguments on both sides. While Scheeler does represent a significant victory for public access, helping entities such as out-of-state news organizations, local New Jersey municipalities appearing as amici feared that this ruling “would place an undue burden on their limited resources.” The Scheeler court recognized the municipalities’ concerns, but it declared that “[c]oncerns about OPRA’s practical ramifications should be directed to the Legislature.” Because of the significant public interest in the court’s holding on this legal issue, the New Jersey Supreme Court may grant certification if a petition is filed.

Judicial Independence in the Age of Trump

Stephen M. Orlofsky

“A bad high school student would understand this.” That is what President Donald J. Trump had to say about the Ninth Circuit, which was charged in Feb. 2017 with determining whether a district court’s order blocking the president’s travel ban should be reversed. Coming less than a month into his presidency, it was just one of many critical comments made by President Trump about the nation’s federal Judiciary since he took office. As the tweeting public knows, the president has criticized federal judges for political bias, and has gone so far as to blame them for future terrorist attacks.

As much as these criticisms may seem unprecedented, friction between the judicial and executive branches of the federal government is not new.

In response to the Supreme Court’s landmark decision in McCulloch v. Maryland, President Thomas Jefferson wrote privately that the judiciary of the United States is the subtle corps of sappers and miners constantly working under ground to undermine the foundations of our confederated fabric. They are construing our constitution from a co-ordination of a general and special government to a general and supreme one alone.”

President Andrew Jackson is reported to have said, “John Marshall has made his decision, now let him enforce it,” regarding an opinion by the Supreme Court on Cherokee Indians. President Franklin Roosevelt is known for having attempted to “pack” the Supreme Court when the justices were not as amenable to his New Deal program as he would have liked.

Even President Barack Obama, a scholar of constitutional law, called out the Supreme Court over its Citizens United decision during his 2010 State of the Union Address.

Despite its disputes with presidents, the federal Judiciary has remained independent since its inception—and, in this author’s view, it will remain so. It is true, never before has a president so vigorously attacked the Judiciary, alleging political bias, or, in the case of Judge Gonzalo Curiel, the inability to be fair because of his “Mexican heritage.” But in the Age of Trump, these types of attacks may be the new normal. While the tone of these attacks on the Judiciary is unprecedented, the U.S. Constitution was designed to ensure that the federal Judiciary remains independent, so it can function, even when under hostile fire by the president or Congress.

To read the full article, please click here.

“Judicial Independence in the Age of Trump,” by Stephen M. Orlofsky was originally published in the June 2018 issue of New Jersey Lawyer, a publication of the New Jersey State Bar Association. Reprinted with permission.

Appellate Division Compels Arbitration of Consumer Fraud and TCCWNA Claims and Dismisses Class Claims

Adrienne C. Rogove

In Griffoul v. NRG Residential Solar Solutions, LLC and NRG Energy, Inc., the Appellate Division recently addressed the validity of an arbitration clause in a lease between the plaintiffs, residents of Elmwood Park and class representatives (“Plaintiffs”), and NRG Residential Solar Solutions (“NRG RSS”) doing business as NRG Home Solar (“NRG Residential”) and NRG Energy, Inc. (“NRG Energy”) (collectively, “Defendants”). A-5535-16T1 (App. Div. May 4, 2018). Plaintiffs filed a class action complaint against Defendants alleging violations of the New Jersey Consumer Fraud Act (“CFA”) and the Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) based on particular provisions in the lease. The lease required NRG Residential to install solar systems on Plaintiffs’ properties, which would provide electricity to their homes, and which would be connected to the utility’s electrical transmission grid.

Defendants filed a motion to compel arbitration pursuant to an arbitration clause in the lease. In pertinent part, the lease provided:

“[A]ny dispute, disagreement or claim between you and NRG RSS arising out of or in connection with this Lease, or the Solar System…shall be submitted to final and binding arbitration…YOU AND NRG RSS AGREE THAT BY ENTERING INTO THIS LEASE, YOU AND WE ARE WAIVING THE RIGHT TO A JURY TRIAL. IN ADDITION, EACH PARTY MAY BRING CLAMS AGAINST THE OTHER PARTY ONLY IN ITS INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING.”

Defendant NRG Energy also moved to dismiss the CFA claim for failure to plead it with particularity as required by Rule 4:5-8(a), and to dismiss the TCCWNA claim on the basis that NRG Energy was not a party to the lease agreement. Continue reading “Appellate Division Compels Arbitration of Consumer Fraud and TCCWNA Claims and Dismisses Class Claims”

Must Consumer Suffer Adverse Consequence in Order to Sue under TCCWNA?

Stephen M. Orlofsky and Ethan M. Simon

The Third Circuit certified to the New Jersey Supreme Court two questions about the interplay between New Jersey’s furniture delivery regulations and the state’s Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA). In Spade v. Select Comfort Corp., — A.3d —, 2018 WL 1790394 (N.J. Apr. 16, 2018), the court answered. In so doing, it expanded the reach of TCCWNA, which is intended to “prevent deceptive practices in consumer contracts.” Id. at *7. The act prohibits merchants from offering and entering into written contracts with consumers that include “any provision that violates any clearly established right of a consumer or responsibility of a seller … as established by State or Federal law at the time the offer is made or the consumer contract is signed.” Id. Continue reading “Must Consumer Suffer Adverse Consequence in Order to Sue under TCCWNA?”

Loot Boxes in Videogames: Gambling by Any Other Name?

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.

Third Circuit Rules That Traditional Trusts Are Citizens of the States of Its Trustees and Business Trusts Are Citizens of the States of Its Owners for Diversity Purposes

Richard L.A. Wolf

The United States Court of Appeals for the Third Circuit recently determined that, for purposes of determining diversity of citizenship, the citizenship of a traditional trust is only that of its trustees, while the citizenship of a business trust is that of each of its constituent owners. GBForefront, L.P. v. Forefront Mgmt., LLC, No. 16-3905 (3d Cir. Apr. 19, 2018).

The case involved claims brought by GBForefront, a limited partnership whose membership included various trusts, against Forefront Management Group, LLC (“FMG”) and others, alleging that the defendants had defaulted on the terms of a settlement agreement. FMG moved to dismiss, arguing that complete diversity, the basis for subject matter jurisdiction in this case, was lacking. Between the filing of the motion and the District Court’s decision, the United States Supreme Court decided Americold Realty Trust v. Conagra Foods, Inc., 136 S. Ct. 1012 (2016), in which it held that the citizenship of a business trust includes the citizenship of all its members. Continue reading “Third Circuit Rules That Traditional Trusts Are Citizens of the States of Its Trustees and Business Trusts Are Citizens of the States of Its Owners for Diversity Purposes”

Third Circuit Restricts Corporate Officer Liability under Telephone Consumer Protection Act

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”

False Hope for False Claims Act Defendants? Government Dismissals of Qui Tam Cases May Increase

Nicholas C. Harbist and Lauren E. O’Donnell

On January 10, 2018, the Department of Justice (“DOJ”) Civil Fraud Section Director, Michael Granston, sent an internal memorandum (the “Memorandum”) to attorneys responsible for civil False Claims Act (“FCA”) enforcement. The Memorandum provides guidance to DOJ attorneys considering whether to dismiss FCA qui tam cases. The Memorandum begins by noting that, while the number of FCA qui tam cases has increased substantially over the years, the rate of government intervention has remained the same. The Memorandum advises DOJ attorneys to consider seeking dismissal as they evaluate whether to intervene. Continue reading “False Hope for False Claims Act Defendants? Government Dismissals of Qui Tam Cases May Increase”