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
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.
Appellate Division Rules that High-Low Agreement Supersedes Offer of Judgment Rule
Jeremy N. Kolman
A high-low agreement is a settlement agreement that guarantees a minimum recovery for a plaintiff and limits a defendant’s exposure to an agreed upon maximum, regardless of the jury’s award. This maximum, or high-limit, is inclusive of costs and fees and it is a basic assumption of high-low agreements that the plaintiff cannot recover more than the “high-limit.”
Recently, the New Jersey Appellate Division addressed the intersection of these two risk management mechanisms. In Serico v. Rothberg, Plaintiff brought a medical malpractice action for failure to diagnose colon cancer. While the matter was awaiting a trial date, Plaintiff made an offer-of-judgment to accept $750,000 from the Defendant. Defendant did not respond to the offer. The matter went to trial and while the jury was deliberating, the parties entered a high-low agreement that provided a “low” of $300,000 for the Plaintiff and limited Defendant’s liability to a “high” of $1 million. During negotiations for the high-low agreement, Plaintiff’s possible entitlement to fees under the offer-of-judgment rule (R. 4:58-2(a)) was never discussed. It was not expressly waived by the Plaintiff, no demand for waiver was made by the Defendant, and the offer of judgment was not mentioned when terms of the high-low agreement were placed on the record.
The jury then returned a verdict in favor of the Plaintiff for $6 million, well over 120 percent of Plaintiff’s offer-of-judgment. Absent the high-low agreement, Plaintiff would have been entitled to costs and fees under the offer-of-judgment rule. However, Although the high-low agreement permitted a maximum award of $1 million. Despite this ceiling, Plaintiff’s counsel filed a motion for an award of attorney’s fees and costs, arguing that absent an express waiver, a high-low agreement does not waive a plaintiff’s right to seek sanctions under R. 4:58-2(a). Plaintiff claimed that the purpose of the Rule is “to impose financial consequences on a party [that] rejects a settlement offer” and the offer-of-judgment rule “accords judges no discretion regarding whether or not to award attorney’s fees.” The Court disagreed and the Appellate Division affirmed.
The Appellate Division explained that by entering into the high-low agreement, Plaintiff “could not recover any amount beyond the ‘high’ to which she agreed.” A high-low agreement is a contract and, like any contract, if the terms of the agreement are clear they must be enforced as written. The high-low agreement made no mention of Plaintiff’s offer of judgment and “Plaintiff did not come forward with any evidence that she preserved her rights [to attorney’s fees] under the Rule.” Although parties are always free to preserve any claim they might have, they must clearly state that intention at the time of the settlement. Unless expressly preserved, a claim for an additional amount beyond the “high-limit” is considered to be encompassed within the negotiated high-low agreement.
Ascertainability Requirement for Class Certification
The webinar will provide class counsel with a review of federal circuit court decisions addressing the ascertainability requirement for class certification. The panel will examine the scope and impact of differing circuit rulings on certification proceedings and provide insights into how defense counsel are faring with challenging certification on the grounds that the proposed class is insufficiently ascertainable. Continue reading “Ascertainability Requirement for Class Certification”
The Global Anti-Corruption Corner: A Primer to the Foreign Corrupt Practices Act
Shawn M. Wright, Carlos F. Ortiz, Mayling C. Blanco, Ariel S. Glasner
Employer Cannot Be Liable for Interfering with Non-Compete It Doesn’t Know Exists, Third Circuit Holds
Ethan Simon
In Acclaim Systems, Time Warner Cable (“TWC”) was looking to cut costs on its Sales Force Dot Com (“SFDC”) project by switching providers for certain IT services. When TWC switched from Acclaim to Infosys, TWC asked Infosys to consider retaining four individuals who were already working on SFDC on behalf of Acclaim. All of these individuals had non-competes with Acclaim that prohibited them from working on SFDC on behalf of Infosys. Continue reading “Employer Cannot Be Liable for Interfering with Non-Compete It Doesn’t Know Exists, Third Circuit Holds”
Third Circuit Enforces Non-Compete Agreement Posted on Internet
ADP sought to enforce a non-compete agreement against two employees who had left to work for a direct competitor. The non-compete was for one year and prohibited the employees from soliciting current and prospective clients. The District Court enforced the non-solicitation clause but declined to enjoin the employees from working for the competitor. The employees appealed the injunction order claiming that the District Court erred because there was nothing to prove that they agreed to the contents of the non-compete, despite their affirmance that they read it. Continue reading “Third Circuit Enforces Non-Compete Agreement Posted on Internet”
2017 Legal Malpractice Update
Blank Rome Partner Stephen M. Orlofsky will speak at the upcoming New Jersey State Bar Association (“NJSBA”) CLE, “2017 Legal Malpractice Update,” on March 25, 2017, from 9:00 a.m. to 12:45 p.m., at the New Jersey Law Center. This program is presented in cooperation with the NJSBA Senior Lawyers Special Committee
The panels will discuss the statute of limitations for legal malpractice claims, ethical issues when an attorney changes firms, lost opportunity cases, tips for taking the deposition of an attorney as a witness, and the program will culminate with a legal malpractice court room demonstration. Continue reading “2017 Legal Malpractice Update”
NJ Supreme Court Adopts Restatement Second Section 142 to Determine Applicable Statute of Limitations
Jaret N. Gronczewski
Appellate Division Holds OSHA Regulations Relevant in Negligence Case
Adrienne Rogove