Commercial Litigation Update

For months, if not years, you received distribution checks from the business in which you own an interest. The funds came without question and like clockwork. You relied on them. Then suddenly, they stopped coming. Is this the result of a downward business cycle or something more sinister? Before jumping to conclusions, you should seek answers. Here’s how.

Often privately held businesses are organized as limited liability companies (“LLCs”). LLCs are hybrids of corporations and partnerships. They typically insulate members from personal liability to outside parties, a ...

Recently, a federal judge in New Jersey confirmed an arbitration award in favor of an insurer resulting from the independent dispute resolution (“IDR”) process created under the No Surprises Act. This is one of the first times an IDR award has been confirmed by the courts and demonstrates that the FAA’s presumption in favor of arbitration awards will apply to IDR determinations even without reasoned awards.

GPS, a medical practice in New Jersey, performed emergency plastic surgery on a patient in 2022. Following the procedure, GPS submitted a bill to Horizon, the patient’s ...

Once again, with a substantial backlog of cases—some of them potentially controversial—argued and pending decision, the Court continues to sail in relatively calm waters.

Nearly a decade ago, the New Jersey Supreme Court in Atalese v. U.S. Legal Services Group, L.P., held that for an arbitration agreement to be enforceable, it had to contain an explicit waiver of the parties’ right to seek access to court. According to a recent New Jersey Appellate Division opinion, that long-standing rule has been qualified to reflect the relative sophistication of the parties involved in the dispute. In County of Passaic v. Horizon Healthcare Services, Inc. d/b/a Horizon Blue Cross Blue Shield of New Jersey, the Appellate Division considered a contract between the County and the entity that managed the County’s self-funded benefits plan. Following the County’s institution of a breach of contract lawsuit, Horizon successfully moved to compel arbitration based upon a clause in the parties’ agreement that required “[i]n the event of any dispute between the parties to this Agreement arising under its terms, the parties shall submit the dispute to binding arbitration under the commercial rules of the American Arbitration Association.” The clause in question contained no explicit waiver of court access. Consequently, the County appealed the decision, arguing for that very reason, the arbitration clause was unenforceable.

Epstein Becker Green Lawyers Anthony Argiropoulos, Theodora McCormick, William Gibson, and Maximilian Cadmus Argue for Amicus Curiae New Jersey Doctor-Patient Alliance

On August 25, 2022, the New Jersey Supreme Court issued on an important decision in Mirian Rivera v. The Valley Hospital, Inc., (A-25/26/27-21)(085992)(085993)(085994), reaffirming the exceedingly high bar for punitive damages claims in medical malpractice cases in New Jersey. This is an important decision for healthcare providers as it provides them with broad protection from punitive damages claims (which are not covered by malpractice insurance) that are really negligence or gross negligence claims in disguise.

On April 26, 2022 the Supreme Court of New Jersey heard arguments about whether New Jersey should retain the judicially created “new business rule”. Since 1936 the rule has held that in the context of calculating damages “prospective profits of a new business are considered too remote and speculative to meet the legal standard of reasonable certainty.” RSB Lab. Servs., Inc. v. BSI, Corp. This case is interesting for aggrieved business litigants as well as interested observers of the appellate process.

Appellate aficionados have undoubtedly heard the news that the distinctively Jerseyan Courier New 12-point font may be on its way out of New Jersey appellate practice. On January 28, 2022, the Supreme Court Rules Committees published proposed amendments to the New Jersey Court Rules, including a number of appellate rules (such as required font). Appellate practitioners should be aware of these potential changes that may be adopted for the New Jersey Appellate Division and Supreme Court.

In a recent Press Release dated December 15, 2021, the Office of the Attorney General for the State of New Jersey (the “N.J. Attorney General’s Office”) announced the settlement, via consent order, of alleged HIPAA violations involving three, New Jersey based cancer treatment providers, In the Matter of RCCA MSO LLC, Regional Cancer Care Associates LLC, and RCCA MD LLC. Two key takeaways from this matter are that New Jersey based health care providers need to be wary of state as well federal authorities when it comes to information security and related policies and warrant substantial investments in cyber security.

We recently participated in what the New Jersey Law Journal called the “first complex civil jury trial to be conducted in person since the COVID-19 pandemic.” Although the case settled shortly after opening statements, this experience taught us that New Jersey courts are ready to try complex civil cases safely and responsibly with new COVID protocols that may force trial attorneys to depart from their usual practices. We published an article in the New Jersey Law Journal about this experience that may be of interest to our readers.

Should I click “Reply All”?  Did I accidentally click “Reply All”? These thoughts have run through almost every person’s head when responding to an email that contained numerous other individuals besides the sender. The Reply All option on emails has always been a source of questions surrounding work-place etiquette and embarrassment. On top of that, lawyers should think about one more thing before selecting Reply All: ethics.

A recent opinion by the New Jersey Advisory Committee on Professional Ethics considered the implications of an attorney clicking Reply All on an ...

Imagine this: You litigate a case for years. Your opponent wins summary judgment. You appeal. The appellate court agrees that the summary judgment was erroneous and remands for trial. On remand, your opponent argues that the appellate court actually affirmed the dismissal of one the claims that was clearly remanded for trial. The lower court accepts that argument. What do you do?

You are facing the injustice of being denied the victory you just won in the appellate court. You know you can return to the appellate court again—someday—as of right. But if that return trip does not happen ...

Long before the birth of Elvis Presley in 1935, and even longer before his recent 86^th birthday on January 8, 2021, King Arthur was the legendary king of choice, and his story was most completely told in Le Morte d'Arthur by Sir Thomas Malory. Hence, we embrace the paraphrased allusion in the title above, to both Arthur and the King of Rock-n-Roll, who despite his absence from the public stage since 1977 remains a brand. Thus, Elvis is a good example of what a lay person would call post-mortem publicity rights, as his brand remains one today valued at over $300 million. What is also ...

The COVID-19 pandemic has foisted ten years of technological advances on the legal sector in a period of ten months. In June of 2020, when the novel Coronavirus was truly novel, we blogged (here) about whether virtual jury trials would be part of the “new normal” and discussed some of the potential pitfalls associated with remote courtroom proceedings.

What seemed revolutionary just a few short months ago, does, indeed, appear to be the “new normal,” ushered in by the pandemic. On January 7, 2021, the New Jersey Supreme Court issued an Order resuming civil jury trials in a ...

Since the enactment of the Hatch-Waxman Act in 1984, courts have held that brand companies can sue generics wherever they plan on making sales, which is everywhere in the U.S. In practice, most suits have been filed in Delaware and New Jersey, with suits against multiple generic companies over the same drug consolidated in one proceeding.

In November 2020, the Federal Circuit upended this settled practice when it issued its opinion in Valeant Pharmaceuticals v. Mylan Pharmaceuticals, No. 19-2402 (Fed. Cir. 2020), holding that venue is not established by contemplated future acts of ...

We have previously discussed (here and here) the complex issues surrounding the resumption of jury trials during the COVID-19 pandemic. We cautioned that the various experimental efforts to resume jury trials taking place in courts around the country were likely to meet with a host of practical and jurisprudential problems. A few weeks later, it appears that our assessment was, if anything, too optimistic. Many of the states that had been taking first steps toward resuming jury trials in some form are now shutting down those experiments because of the spike in COVID-19 cases that is ...

Mark Twain once said: “Trial by jury is the palladium of our liberties. I do not know what a palladium is, but I am sure it is a good thing!” If Mr. Twain were alive today, he wouldn’t be quite so sure that jury trials conducted during the COVID-19 pandemic are really such a good thing.

Recent news reports suggest that a vaccine may not be available until next spring at the earliest, and it may take months before that vaccine can be widely distributed. But the demands of justice do not rest, and courts—already overburdened with growing dockets before the pandemic—are struggling to ...

Congratulations. You’ve been sued in court in New Jersey. To make matters worse, the complaint is full of lies. Not distorted versions of the truth or someone’s interpretation of events that actually occurred, but outright false statements of fact. The kind that make you look bad in your personal and business communities. The kind that hurt your reputation and cause people to think twice about doing business with you or your company.

You are understandably upset and want to go on the offensive, but your lawyer tells you the playbook is empty. She explains that there is an “absolute ...

The Racketeer Influenced and Corrupt Organizations Act, better known as “RICO,” was enacted to fight organized crime but has evolved into the bane of legitimate businesses. Along with criminal penalties that can only be enforced by federal prosecutors, RICO contains a provision allowing for civil lawsuits. The rewards for a successful civil RICO claim include mandatory treble damages and attorney’s fees. For this reason, civil RICO lawsuits have become a favorite of overzealous plaintiffs hoping to make headlines and scare legitimate businesses into quick settlements. And since private plaintiffs have a greater incentive to be “creative” than federal prosecutors, civil RICO cases often push the statute’s limits. But the Supreme Court’s recent decision in the infamous “Bridgegate” case, Kelly v. United States, may help decelerate this trend by limiting civil RICO claims in important ways.

In the Bridgegate case, three New Jersey state officials were charged with exacting political revenge against a local Democratic mayor for failing to endorse the Republican governor’s reelection bid. In what could have been a deleted scene from The Sopranos, the state officials ordered a “traffic study” that closed down some lanes for commuters in Fort Lee, New Jersey (the home of the Democratic Mayor) traveling across the George Washington Bridge into New York City. The “traffic study” had the predictable result of creating hours of gridlock that ensnared commuters, school buses, and even ambulances. That gridlock was, of course, the goal all along. In fact, upon hearing the news that the Democratic mayor would not endorse the Republican governor, one of the state officials emailed the other, advising: “Time for some traffic problems in Fort Lee.”

Federal prosecutors felt that this was more than petty political retribution and charged the trio of state officials with criminal violations of the federal wire fraud statute, which makes it a crime to use interstate wires (such as telephones and email) to effect “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.” 18 U.S.C. § 1343. One of the officials pleaded guilty, and the other two were convicted at trial. The convictions were later affirmed on appeal by the Third Circuit.

On March 23, 2020, Governor Phil Murphy signed Executive Order 109, which “limit[ed] non-essential adult elective surgery and invasive procedures, whether medical or dental, [in order to] assist in the management of vital healthcare resources during this public health emergency.” The purpose of EO 109 was to “limit[] exposure of healthcare providers, patients, and staff to COVID-19 and conserve[] critical resources such as ventilators, respirators, anesthesia machines, and Personal Protective Equipment (‘PPE’) [that] are essential to combatting the spread of the virus.” At the time EO 109 was executed, coronavirus cases were rapidly increasing within the State. On March 23rd, New Jersey had 2,844 coronavirus cases in all 21 counties, an increase of 935 over the previous day, and at least 27 people had died.

In the weeks that followed, New Jersey saw the surge in cases for which it was preparing. On April 4, the three-day average of new confirmed positive COVID-19 cases peaked at 4,064 cases, and by April 14th, there were 8,084 of COVID-related hospitalizations and a staggering 1,705 patients on ventilators. But since that time, thanks to social distancing and New Jersey’s ability to flatten the curve, these numbers have fallen drastically. By May 11th, the three-day average of new, positive cases had fallen to 1,572 new cases—a 61 percent decrease. Likewise, the three-day average of new hospitalizations had fallen to 4,277 patients—a 48 percent decrease.

In light of this decreased burden on the healthcare system, Governor Murphy signed Executive Order 145, which allows for elective surgeries to resume as of 5 am on May 26, 2020. EO 145 provides that elective surgeries and invasive procedures may proceed at both licensed healthcare facilities and in outpatient settings not licensed by the Department of Health (e.g., health care professional offices, clinics, and urgent care centers), subject to limitations and precautions set forth in policies to be issued by the Division of Consumer Affairs, in consultation with the Department of Health, by Monday, May 18, 2020. EO 145 further states that the Department of Health and/or the Division of Consumer Affairs may issue supplemental or amended policies concerning elective surgeries and elective invasive procedures on or after Monday, May 18, 2020.

Sometimes a crisis can be an opportunity to embrace new technologies and changes that were already on the horizon – albeit at a much more expedited pace.  As employees are required to work remotely and practice social distancing due to the COVID-19 pandemic, the federal government and several state governments (including New York and New Jersey) are moving (New York more quickly than New Jersey) to enable remote online notarization and keep businesses operating.

A Potential Federal Solution

On March 18, 2020, Senator Kevin Kramer, R-N.D. and Mark Warner, D-Va, introduced ...

Across the nation, authorities are scrambling to meet the new challenges posed by COVID-19. The United States Centers for Disease Control and Prevention (“CDC”) has recommended that individuals remain six feet apart in order to prevent the spread of COVID-19. On March 13, 2020, the White House proclaimed a national emergency and many State governments have ordered non-essential businesses to close, and residents to self-distance. However, these emergency measures conflict with the rules for personal service of process established by Federal Rule of Civil Procedure 4.

Personal service of process is among the oldest and commonest means by which a court can obtain personal jurisdiction over a defendant. F.R.C.P. 4(e) provides that personal service of process can be accomplished by handing the process papers to the defendant personally or leaving the papers with a responsible person at the defendant’s dwelling.

In most cases, personal service involves the physical act of handing papers from one person to another. The very act of accomplishing personal service therefore violates the CDC’s recommendation that individuals remain six feet apart. However, it can also run contrary to more stringent restrictions imposed by State governments.