New Jersey Supreme Court Holds that Consumers Cannot Pursue Class Action Claims Against TGI Fridays for Inflated Drink Prices, But May Do So Against Carrabba’s Italian Grill

The New Jersey Supreme Court issued a decision on two consumer class actions under the New Jersey Consumer Fraud Act (“CFA”) and the Truth in Consumer Contract, Warranty and Notice Act (“TCCWNA”).  In two separate cases, consumers sought damages against TGI Fridays and the operator of several Carrabba’s Italian Grill, respectively, alleging unlawful practices with respect to the disclosure of prices for alcoholic and non-alcoholic beverages to customers.

With respect to TGI Fridays, the Court held that the named plaintiffs failed to show that common questions of law and fact predominate over individual issues.  The plaintiff had advanced a “price inflation” theory – that the fraudulent marketing drove up the cost of the drinks – but the Court rejected it noting that its prior decisions had found this theory did not support a claim under the CFA.

With respect to Carrabba’s, on the other hand, the plaintiff’s allegations focused on specific pricing practices, which plaintiff claimed are supported by receipts showing that each customer making this claim was charged different prices for the same brand, type, and volume of beverage in the course of a single visit. Because the proposed class had been redefined to only include customers who make that specific CFA claim, they met the predominance requirement for class certification.

In both cases, the Court found that the plaintiffs had failed to meet the standards for a class action as to their TCCWNA claims. Under TCCWNA, a claimant must prove that they received a written sign (here, a menu), which contained information in violation of a consumer law.  Because each individual claimant would have to prove that they received a menu, the Court held, the cases were not suitable for resolution as a class action.

For more information on class actions, the CFA or TCCWNA, please contact Kathleen Barnett Einhorn, Esq., Chair of the Firm’s Complex Commercial Litigation Group, at keinhorn@genovaburns.com or Jennifer Borek, Esq., Partner in the Complex Commercial Litigation Group, at jborek@genovaburns.com.

 

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Federal Circuit Paves Way for Additional Discovery in Autonomous Car Case

The Federal Circuit reinforced limits on its own jurisdiction by rejecting an appeal brought by intervenor Anthony Levandowski in the much-publicized case Waymo LLC v. Uber Technologies, Inc., et al., No. 17-cv-00939-WHA (N.D. Cal.). The Federal Circuit’s September 13, 2017, decision relies heavily on – and leaves intact – two District Court rulings compelling the production of certain potentially important discovery materials.

According to Waymo’s allegations, Levandowski, its former employee, improperly downloaded information relating to Waymo’s driverless vehicle technology, and then left Waymo to found Ottomoto (“Otto”), which was subsequently acquired by Uber.  Before Uber’s acquisition was complete, attorneys for Otto and Uber jointly retained Stroz Friedberg, LLC (“Stroz”) to investigate Otto employees who had previously worked for Waymo, including Levandowski.  The resulting report by Stroz is at the heart of the discovery dispute at issue.

During discovery, the Magistrate Judge granted Waymo’s motion to compel Otto and Uber to produce the Stroz report, and also refused to quash Waymo’s subpoena to Stroz seeking the report and related documents.  Both rulings were affirmed by the District Court.  His subsequent appeal to the Federal Circuit acknowledged that the appellate court’s two main avenues to jurisdiction – final judgments relating to patents and certain special categories of interlocutory orders – would not apply in this case.  Instead, Levandowski argued that his appeal should be treated as a petition for a writ of mandamus pursuant to 28 U.S.C. 1651(a), a general statute that grants all courts created by Congress the power to issue “all writs necessary or appropriate in aid of their jurisdictions[.]”  Levandowski argued that such a writ was necessary because disclosure of the Stroz report would violate his Fifth Amendment right against self-incrimination.  He also argued that the Perlman doctrine, which permits a privilege-holder to immediately appeal a discovery order aimed at a disinterested third-party custodian, should apply.

In rejecting each of Levandowski’s arguments, the Federal Circuit first noted that a writ of mandamus was only appropriate if, among other things, the petitioner had no other adequate means of relief, and could show a clear and indisputable right to issuance of the writ.  According to the court, a post-judgment appeal would suffice to protect Levandowski’s rights.  Additionally, he failed to establish a clear right to issuance of the writ, as the District Court’s legal conclusions were proper, including the findings that Levandowski couldn’t invoke the attorney-client privilege, work-product doctrine, common interest doctrine, or Fifth Amendment to prevent disclosure of the Stroz report.  Lastly, the court rejected the doctrine’s application in this case because Uber is not a disinterested third-party, but is instead a defendant in the case.

For more information on intellectual property law, trade secret issues, or the implications of Waymo, please contact Kathleen Barnett Einhorn, Esq., Director of the firm’s Complex Commercial Litigation Group at keinhorn@genovaburns.com, or Jennifer Borek, Esq., a Partner in the Complex Commercial Litigation Group at jborek@genovaburns.com.

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Supreme Court Narrows Choice of Court to File Patent Infringement Actions

The Supreme Court used a dispute over flavored drink mix to settle a question regarding the proper venue for patent infringement actions, unanimously ruling in TC Heartland LLC v. Kraft Foods Group Brands LLC, No. 16-341, that such actions, when brought in the venue where a defendant corporation “resides”, may only be brought in the judicial district where the corporation is incorporated.

The patent venue statute, 28 U.S.C. §1400(b), provides that patent infringement actions may be brought in “the judicial district where the defendant resides or where the defendant has committed acts of infringement and has a regular and established place of business.”  Interpreting that law in Fourco Glass Co. v. Transmirra Prods. Corp., the Supreme Court held that a domestic corporation “resides” only in its state of incorporation for patent venue– differing from the general venue statute, 28 U.S.C. §1391(c), which provided that a corporate defendant “resides” in any state in which it is subject to personal jurisdiction, including any state in which the corporation conducts a sufficient amount of business.  A 1988 congressional amendment to the general venue statute appeared to expand its scope and undermine the holding in Fourco.  Indeed, in 1990, the Court of Appeals for the Federal Circuit held that the general venue statute had generally supplanted the patent venue statute, and that corporations could be sued for patent infringement in any venue where the corporation was subject to personal jurisdiction.

However, the Supreme Court held in TC Heartland that Congress did not intend to supplant or change the meaning of the patent venue statute as set forth in Fourco.  The Court noted, among other things, that congressional amendments to the general venue statute in 2011 clarified that it does not apply when venue is “otherwise provided by law,” and deleted statutory language broadening the scope of the law.

Although the Court’s ruling is technical in nature, it will have a real effect on where patent infringement plaintiffs can file lawsuits.  Commentators have predicted that the decision will increase litigation in Delaware, New York, and California.

For more information on intellectual property law or the implications of TC Heartland, please contact Kathleen Barnett Einhorn, Esq., Director of the firm’s Complex Commercial Litigation Group at keinhorn@genovaburns.com, or Jennifer Borek, Esq., a Partner in the Complex Commercial Litigation Group at jborek@genovaburns.com.

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News-Gatherer not Nightcrawler: District Court Denies NYPD’s Motion to Dismiss Photojournalist’s First Amendment Complaint

The U.S.  District Court in Manhattan recently allowed a photojournalist’s complaint against the New York Police Department (NYPD) and City of New York to go forward.  In Jason B. Nicholas v. The City of New York, 15-CV-9592, the photojournalist-plaintiff alleged that the NYPD’s and City’s revocation of his press credentials violated his First Amendment and Fourteenth Amendment rights.

Nicholas recounted a series of encounters with the NYPD that led to the revocation, including an altercation with a retired NYPD detective while on assignment for the New York Daily News.  On multiple occasions, Nicholas refused to stay in an NYPD-imposed “press pen,” resulting in his press credentials being seized.  In the most recent incident, while photographing a rescued worker being loaded into an ambulance on-scene at a building collapse in Manhattan, Nicholas’s credentials were seized and revoked by the NYPD for allegedly not being in the press pen near the scene, although he alleges that other photographers were outside of the press pen and operating unimpeded.  The credentials were not returned until nearly eight months later.

Refusing to dismiss Nicholas’s complaint, the Court held that he had stated a viable claim for violation of his First Amendment rights.  The Court reiterated that “under the First Amendment, press organizations have a . . . right of access to newsworthy events in their capacity as representatives of the public and on their own behalf as members of the press.” The Court observed that “[e]qual press access is critical” to news-gatherers, citing case law extending protections against content-based or arbitrary exclusions.

The Court also allowed Nicholas’s due process claim, finding he had sufficiently alleged facts to show he had a protected interest in his press credentials; he was deprived process for revocation of his protected interest by the NYPD’s establishment of a “frozen zone” post-exigency; he was injured as a result of an official policy, custom, or practice of the municipality; and he was in danger of future harm, as evidenced by the pattern of multiple revocations of his press credentials by the NYPD.

Commentators and scholars have pointed to this recent decision, as well as decisions dating back decades upholding First Amendment claims by journalists excluded from covering public officials, including a case from the District of Columbia Circuit that found it impermissible to exclude White House press passes in a content-based or arbitrary fashion.

For more information, please contact Kathleen Barnett Einhorn, Esq., Chair of the Firm’s Complex Commercial Litigation Group, at keinhorn@genovaburns.com or Jennifer Borek, Esq., Partner in the Complex Commercial Litigation Group, at jborek@genovaburns.com.

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Supreme Court to Review Whether “Offensive” Names Can Be Trademarked

The U.S. Supreme Court agreed today to review the Federal Circuit’s decision to strike down the Lanham Act’s ban on “disparaging” trademarks.  The case, Lee v. Tam, No. 15-1293, involved an Asian American dance-rock band’s attempt to trademark their name THE SLANTS. The U.S Patent and Trademark Office (USPTO) refused, citing the Lanham Act’s prohibition on “disparaging” trademarks. The Federal Circuit held that this prohibition violated trademark applicants’ First Amendment Rights. (See Litigation Law Blog’s previous post about the Federal Circuit’s decision from December 23, 2015.)

The Supreme Court’s decision could impact the more famous battle over an attempt to cancel the trademark registration for the NFL’s Washington Redskins as disparaging to Native Americans.

In the Washington Redskins case, a federal district court had ruled that the football team’s trademark disparaged Native Americans.  The team had appealed the case to the Fourth Circuit Court of Appeals, which was scheduled to hold oral argument in December.  On October 18, 2016, the Fourth Circuit agreed to stay consideration of the appeal until the Supreme Court decides Lee v. Tam.

For more information on the Lanham Act or the Supreme Court’s grant of certiorari in Lee v. Tam, please contact Kathleen Barnett Einhorn, Esq., Chair of the Firm’s Complex Commercial Litigation Group, at keinhorn@genovaburns.com or Jennifer Borek, Esq., Partner in the Complex Commercial Litigation Group, at jborek@genovaburns.com.

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Recent Supreme Court Decision Expands Freedom of Speech Rights for Those in Common-Interest-Communities

The New Jersey Supreme Court’s December 3, 2014 decision in Dublirer v. 2000 Linwood Avenue Owners, Inc., et al., extended the free speech rights of those living within private common-interest communities relating to political speech and the right to distribute political materials therein.

In Dublirer, the Court addressed an action filed by a resident in a high-rise private cooperative apartment building (the “Co-op”) against the Co-op’s board of directors (the “Board”) who prevented the resident from distributing leaflets under his neighbors’ doors criticizing the Co-op’s governance and promoting his own candidacy for the Board. The Board’s rule banned the distribution of all written materials “anywhere upon the premises without written authorization of the Board of Directors.”

The Court noted that an essential element of living within a co-op community is the residents’ agreement to be bound by the co-op’s by-laws and rules. However, while the Board’s stated purpose for barring the distribution of such written materials was “to preserve the residents’ quiet enjoyment of their apartment and to cut down on litter pollution,” the Court found that the residents’ rights in speaking out about the governance of their community outweighed the “minimal intrusion [of] when a leaflet is placed under a neighbor’s apartment door.” The residents of the Co-op were not outsiders, and thus had both property and free speech rights within the Co-op. The Court developed a test for such restrictions, holding that courts “should focus on the purpose of the expressional activity undertaken in relation to the property’s use, and should also consider the general balancing of expressional rights and private property rights.”

The Dublirer Court found that the resident’s leaflets were akin to political speech, thus affording it the highest Constitutional protection. The Court took into account the potentially intrusive nature of the resident’s leaflets, noting that here, the resident “did not seek approval to use a bullhorn or a loudspeaker, or to erect a large sign in the lobby,” and that “residents could simply ignore or throw away any literature placed under their doors.” In considering the reasonableness of the Board’s restriction, the Court found no “convenient, feasible, and alternative means” for engaging in the same speech, finding that the resident had sought “the most direct and least expensive way possible,” and that there were not substantially similar alternatives for communicating the same message to his neighbors.

The Court held that “[s]peech about matters of public interest, and about the qualifications of people who hold positions of trust, lies at the heart of our societal values,” and thus is entitled to protection whether or not that speech involves those who hold positions of trust within private common-interest communities.

Similar common-interest communities, such as condominium associations, should be aware of the Dublirer holding and potential claims by residents against their boards. The Court’s characterization of certain types of resident speech as protected political speech requires particular focus, as the Court stated that such should be afforded the greatest protection. However, the Court did not find that a board of directors in common-interest communities could never impose any speech restrictions, noting that the Board could have adopted “reasonable time, place, and manner restrictions to serve the community’s interest.” Such restrictions, however, must be designed to promote the quiet enjoyment of the residents of the community, “without unreasonably interfering with free speech rights.” Thus, in designing by-laws and house rules related to speech, boards must take into account the practical effect of any such proposed limitations on speech and the effect it would have on the residents, paying particular attention to the availability for substantially similar (and cost effective) mechanisms for the residents to accomplish a similar result.

For more information regarding the firm’s Complex Business Litigation Program, please contact Kathleen Barnett Einhorn, Director of the Complex Commercial Litigation Practice Group, at keinhorn@genovaburns.com.

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New Jersey Supreme Court Approves Complex Business Litigation Program

The State Judiciary has recently announced the commencement of a Complex Business Litigation Program, which will begin accepting cases January 1, 2015. The new program will further the Judiciary’s goals of streamlining complex business, commercial, and construction cases and expediting resolution of those matters.

The program will provide for the assignment of a judge in each vicinage with experience in complex civil litigation to manage the resolution of qualifying commercial litigation cases. Each judge will receive training in especially relevant areas of the law and case administration, and will be expected to issue at least two written opinions each year, which will be posted on njcourts.com. The judges will be encouraged to post decisions online of particular interest to the business community in order to provide an educational legal resource to the public. In order to further resolution of commercial disputes, mediation will be encouraged whenever appropriate, but will not be required under the Judiciary’s mandatory civil mediation and arbitration program.

Eligibility for the new Complex Business Litigation Program will be evaluated when each case applying for the program is filed. The program has a threshold damages amount of $200,000, although a party may make a motion to have their dispute included in the program in cases that do not meet that amount when good reasons are demonstrated. Conversely, a party may move for removal from the program if the party believes the case does not meet the program’s requirements.

The program is good news for businesses, who will certainly benefit from the streamlined judicial process for complex commercial litigation cases.

For more information regarding the firm’s Complex Business Litigation Program, please contact Kathleen Barnett Einhorn, Director of the Complex Commercial Litigation Practice Group, at KEinhorn@genovaburns.com.

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