New Jersey Open Public Records Act Does Not Require Disclosure of Police Video, Supreme Court Holds

A divided New Jersey Supreme Court ruled today in Paff v. Ocean County Prosecutor’s Office that the “criminal investigatory records” exemption to public disclosure under New Jersey’s Open Public Records Act, permits the Ocean County Prosecutor’s Office (OCPO) to withhold disclosure of a police mobile video recording (MVR) of a traffic stop.  The case related to a police chase ending in Barnegat Township in which a police officer was investigated and ultimately charged with causing a police dog to injure the driver.  Paff, an activist for government transparency – see the Press of Atlantic City’s profile of him here – requested the MVR from the OCPO, which conducted the internal investigation.

The criminal investigatory records exemption allows public records to be withheld if they are “not required by law to be made” and if it pertains to a criminal investigation.  Reversing the Appellate Division (see our discussion on August 10, 2017, Litigation Law Blog New Jersey Courts Hands Victories to Open Government Records Advocates), the Supreme Court found that MVR was not “require by law” because the Barnegat Township Police Department’s directive did not have the force of law.    Relying on the Court’s recent decision in North Jersey Media Group v. Lyndhurst, also discussed in our August 10, 2017 Post, the Court compared the local directive to the Attorney General’s Use of Force Policy, which required creation of Use of Force Reports statewide and has the force of law on all police departments.  Since the MVR related to the investigation of the driver for evading arrest, the Supreme Court held it could be withheld under that exemption.

The Court, however, noted that the MVR would not be exempt under the “investigation in progress” exemption or due to the driver’s asserted privacy interest because of the strong public interest in police transparency.  The decision sends the case back to the trial court to determine whether the record should be released under the “common-law right of access” a broader doctrine that requires the court to balance competing interest to determine public access to records.

For more information on this decision or public records access, 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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Third Circuit Finds ADT Consumer Class Action Correctly Returned to State Court

The Third Circuit upheld a decision to remand a class action to state court, agreeing that one of the defendants  could not be disregarded as a “nominal party” even though it had transferred all of its contracts, assets, debts, and liabilities to another company. Walsh v. Defenders, Inc., Civ. No. 18-2156 (3d Cir. July 2, 2018).

The plaintiff is a New Jersey citizen who filed a class action, consumer fraud complaint in New Jersey state court relating to cancellation fees under contracts for home security equipment.  The plaintiff named three entities as defendants: Defenders, Inc., an Indiana citizen; ADT Security Services, Inc., n/k/a Tyco Integrated Security LLC (ADT SSI-TYCO), a New Jersey citizen; and ADT LLC, a Delaware citizen.  The Defendants argued that ADT SSI-TYCO should be disregarded as a “nominal party” for purposes of determining Class Action Fairness Act (CAFA) diversity jurisdiction because years before the suit, it had transferred all its assets and liability to ADT LLC.

Rejecting this argument and finding that ADT SSI-TYCO was a real party to the suit, the Third Circuit noted that, though ADT SSI-TYCO transferred the contracts and related liabilities to co-defendant ADT LLC, it nonetheless continued in operation and serviced the commercial contracts. Because ADT SSI-TYCO remainaaked an active company, its transfer of assets and liabilities could not discharge claims unless the plaintiff consented to the transfer and discharge.

The Third Circuit then affirmed the District Court’s ruling that the case fit the “local controversy exception” to the federal court’s CAFA jurisdiction—ADT SSY-TYCO is a New Jersey citizen, just like the named plaintiff, and its conduct formed a significant basis for the claims asserted.

The Third Circuit’s decision highlights the difficult questions that can arise when a company merges with or sells assets to a different entity.  These issues can be amplified in the class action context where a party’s citizenship can make the difference in keeping the case in state court and out of federal court.

For more information on the Walsh decision and on jurisdictional issues, 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 Rules Retailer Physical Presence No Longer Required For States to Tax Sales in Wayfair Decision

In a highly anticipated decision issued today, the Supreme Court overruled decades of its own precedent and held that states can require out-of-state retailers to collect and remit sales tax proceeds, even if the business has no physical presence in the state.  The Court’s decision in South Dakota v. Wayfair, No. 17-494 (2018), could have a significant impact on retailers who sell goods or services through the internet, as states rush to enact legislation forcing online sellers to collect and remit sales tax for transactions within those states.

The case was a challenge by Wayfair and other on-line retailers to a South Dakota law requiring large out-of-state sellers to collect and remit sales tax as if the seller had a physical presence in the state.  In two previous cases – National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753 (1967) and Quill Corp. v. North Dakota, 504 U.S. 298 (1992) the Supreme Court had ruled that states could not require sellers to collect and remit sales taxes if they had no physical presence in the state.  In those situations, states were forced to rely on their residents to voluntarily pay sales tax owed on purchases.  The Court noted that consumer compliance is as low as 4%, causing states to lose as much as $33 billion in combined sales tax revenue every year.

Referring to the “internet revolution” and the modern dynamics of the national economy, Justice Kennedy writing for a majority of the Court overruled Bellas Hess and Quill, finding that the rule in those cases amounted to a judicially-created tax shelter for businesses with no physical presence in a state.  The Court noted that modern e-commerce does not analytically align with a test based on the physical location of brick-and-mortar stores.  Instead of the physical location test, the Court concluded, to be subject to a state’s tax, there must be a “substantial nexus” between the state and the taxed activity.  Just how substantial a nexus remains to be seen and will likely result in future litigation.

The dissenting opinion, authored by Chief Justice Roberts and joined by Justices Breyer, Sotomayor, and Kagan, agreed that the Court’s older decisions were wrong, but contended that Congress, not the Court, should fix the problem and determine the extent to which states may burden interstate sellers with the duty to collect sales or use taxes.

For more information on the implications of Wayfair, 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 Paves the Way to Sports Wagering

In a victory for states’ rights and sports fans looking to cash in on their insight, the Supreme Court ruled today in favor of allowing states to determine whether to legalize sports wagering in Murphy v. NCAA.

Writing for the majority, Justice Alito ruled that the Professional and Amateur Sports Protection Act’s (“PASPA”) prohibition of state authorization of sports wagering violated the Tenth Amendment’s anti-commandeering doctrine, saying that the provision “unequivocally dictates what a state legislature may and may not do… A more direct affront to state sovereignty is not easy to imagine.”  Justice Alito then refuted the respondents’ preemption arguments on the grounds that the Constitution “confers upon Congress the power to regulate individuals, not States,” and PASPA’s prohibition on state authorization can, in no way, be understood as a prohibition on individuals.  Finally, the Court determined that offending portion of PASPA is not severable from the rest of PASPA and, therefore, the entire statute is struck down.

Justice Thomas concurred with the opinion but expressed his concern regarding the Court’s method in determining the severability of offending sections of a statute.  Justice Ginsburg wrote a dissenting opinion that Congress was within its authority to prohibit sports wagering since the activity substantially affects interstate commerce, and even if the prohibition is unconstitutional, it is severable from the law and PASPA should still stand.  Justice Breyer concurred in part with the majority decision that PASPA’s prohibition of state authorization of sports wagering was unconstitutional, but he agreed with Justice Ginsburg in that the provision is severable from the rest of the statute.

Does this mean you can start wagering on MLB games and the NHL playoffs?  Since the Court reversed the Third Circuit’s decision regarding the State’s 2014 sports wagering law, casinos and racetrack may engage in sports wagering, and each individual venue is left to craft their own regulation.  However, the casinos and racetracks are now waiting for the State Legislature to create a regulatory framework.  Legislation was introduced recently that will do just that (Assembly Bill No. 3911 was introduced on May 7, and Senate Bill No. 2602 was introduced today).  Senate President Stephen Sweeney said that the Senate intends to move quickly on sports wagering and anticipates passage by early June.

For more information about the potential impacts of this ruling or what steps you can take to effectively leverage same, please contact Nicholas R. Amato, Esq., Chair of the firm’s Casino & Gaming Law Practice Group, at namato@genovaburns.com or 973-533-0777.

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Monkey See, Monkey Sue: Ninth Circuit Finds Naruto Cannot Sue Under Copyright Act

Last week, the Ninth Circuit Court of Appeals panel affirmed dismissal of copyright infringement claims brought on behalf of a macaque monkey, Naruto, against a wildlife photographer. The Court found that Naruto had Constitutional standing to file suit, but that he could not maintain an action under the Copyright Act. Naruto v. Slater, No. 16-15469.

In 2011, Naruto, then a seven-year-old crested macaque living in Indonesia, took several pictures of himself with a camera that had been left unattended by wildlife photographer David Slater.  Slater subsequently published these “monkey selfies” in a book.  In 2015, PETA filed a complaint on Naruto’s behalf alleging copyright infringement, which a district court in California dismissed.

Affirming dismissal, the Ninth Circuit found that PETA did not have standing as “next-friend” of Naruto because animals cannot be represented by “next friends” absent express statutory authorization and PETA had failed to allege that it had a significant relationship with Naruto.  The Court also criticized PETA for seeking dismissal of Naruto’s appeal after PETA entered into a settlement agreement with the photographer following oral argument in the case.  Since the settlement did not include Naruto as a party, the settlement and subsequent motion gave the appearance that Naruto was being used for PETA’s institutional interests, which undermined PETA’s attempt to establish itself as Naruto’s next friend.

Relying on a prior decision of the Ninth Circuit from 2004, Cetacean Community v. Bush however, the court held that Naruto had Constitutional standing on his own to sue.  In Catacean Community, the Ninth Circuit found that the world’s whales, dolphins, and porpoises, had standing to sue through their self-appointed attorney.  The panel in Naruto’s case criticized that earlier decision as “wrongly decided,” but ruled that they were bound by it until the full Ninth Circuit or the Supreme Court revisited it.

Ultimately, however, the Court found that the language of the Copyright Act did not authorize animals to file copyright infringement suits.  The Court emphasized that a lawsuit by an animal is only allowable if the statute specifically permits it –  a rule meant to prevent monkey business.

For more information on animal law, intellectual property, constitutional or statutory standing, or the implications of Naruto, 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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New Jersey Supreme Court Unanimously Limits Scope of Consumer Protection Statute

The New Jersey Supreme Court issued an important decision on the scope of the New Jersey consumer protection statute called the Truth-in-Consumer Contract, Warranty and Notice Act or TCCWNA.

The two class action matters involved allegations that Select Comfort Corp. and Bob’s Discount Furniture violated the TCCWNA by failing to include, among other things, specific language regarding a consumer’s right to cancel an order as a result of delayed delivery. The Supreme Court held that a violation of this regulation could constitute a violation of a “clearly established legal right or responsibility of sellers” to constitute a violation of TCCWNA.

Separately, and of broader significance, the Supreme Court was asked whether a consumer must suffer an actual adverse consequence to be entitled to the statutory minimum penalty of $100 per person provided by the TCCWNA.  None of the plaintiffs in either of the cases had alleged that they suffered any actual harm, monetarily or otherwise, from the defendants’ technical violations of the regulations.   The question before the Court was whether these plaintiffs could be considered “aggrieved consumers” to qualify for TCCWNA’s statutory penalties.

Analyzing the statutory language, the unanimous Supreme Court noted that certain sections of the TCCWNA use the term “consumers” whereas the term “aggrieved consumer” was used in the section of the TCCWNA discussing damages. The addition of the term “aggrieved” before “consumer,” the Court held, must be given meaning and, under a plain reading of this word, denotes the plaintiff’s suffering some actual harm, even non-monetary harm.  As an example of the type of harm that may be sufficient to render a consumer “aggrieved” under the TCCWNA, the Supreme Court hypothesized a potential furniture seller customer who contends he would have sought a refund after a late furniture delivery but did not because of a company’s “no refund” statement (in violation of the regulation).

The Supreme Court’s decision will likely impact the uptick in putative class actions filed by consumers under TCCWNA. In addition to reducing the number of individuals who might be entitled to TCCWNA statutory damages, the decision will also make it more difficult for consumers to maintain class actions since each class member potentially must demonstrate that they suffered an “adverse consequence.”

For more information on the Supreme Court’s decision, the TCCWNA or consumer class actions, 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 Clarifies Appeal Timing for Consolidated Cases

The U.S. Supreme Court has ruled that when a final decision has been issued in one of several consolidated civil cases, the losing party can immediately appeal, even if other of the consolidated cases are ongoing. Hall v. Hall, No. 16-1150.

The decision, though technical, resolves an issue that has vexed lower courts and litigants.  Federal Rule of Civil Procedure 42(a) gives the district courts broad discretion to consolidate different actions involving “common questions of law or fact.” Hall involved cases consolidated in the Federal District Court in the Virgin Islands, relating to an inter-family dispute between siblings about rents collected for a vacation home.  At trial, the jury ruled against the daughter in both cases, awarding the son $2 million in damages, but entering separate judgments. The daughter appealed the judgment in one case, even though post-trial proceedings remained in the individual case.

The Third Circuit Court of Appeals dismissed the appeal stating that it lacked jurisdiction because the trust judgment was not final when the claims concerning the individual case remained in the district court.

Reversing the Third Circuit, the unanimous Supreme Court (in a decision authored by Chief Justice John Roberts) explained that had the actions not been consolidated, there would be no issue as to whether the daughter had the right to appeal the judgment in the trust case because the litigation was final. After reviewing cases from the founding of the country and the original 1813 statute, the Court held that that consolidation is a matter of convenience and judicial economy and does not merge the suits or change the rights of parties or make a party to one action a party to another consolidated action.

For unsuccessful litigants whose cases have been consolidated, the decision in Hall reaffirms their ability to appeal immediately without waiting for the rest of the consolidated cases to finish.  On the flip side, parties must now be alert and understand that even though two or three cases between the same or similar defendants and different plaintiffs have been consolidated, the time to appeal for one case will begin to run.  The decision will most likely impact large companies that are often the target of class action, product liability, or mass tort litigation where there are a vast number of claims against them and similar defendants.

For more information on the Supreme Court’s decision, please contact Kathleen Barnett Einhorn, Esq., Director 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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“Blurred Lines” Infringes Gaye’s “Got to Give it Up”, Ninth Circuit Holds

Yesterday, a divided panel of the Ninth Circuit Court of Appeals largely affirmed a trial court judgment finding that Pharrell Williams, Clifford Harris and Robin Thicke’s 2013 hit single “Blurred Lines” infringed upon the defendants’ copyright in Marvin Gaye’s 1977 song “Got to Give it Up.” Williams v. Gaye, No. 15-56800.

The decision of the panel majority (Judges Milan D. Smith and Mary Murguia) is a cautionary tale of how the procedural posture of a case can be outcome determinative. The majority held that following a full trial on the merits, the appeals court could not review the trial court’s earlier denial of a summary judgment motion.  The issues to be resolved were not purely legal, the majority continued, and the factual issues hotly disputed by the parties’ experts. Because of the full trial, the majority concluded that they could not conduct its own summary judgment analysis.

The Court then reviewed the verdict and found there was no basis to overturn the jury’s decision as it related to the Thicke Parties because there was sufficient evidence from which they could conclude that Williams, Harris and Thicke had access to Gaye’s work and the two songs were substantially similar. After a jury verdict, the Court continued, an appellate court cannot weigh the evidence for itself and make credibility rulings on the parties’ experts.

The dissent (Judge Jacqueline H. Nguyen) decried the majority’s opinion as allowing Gaye to “to accomplish what no one has before: copyright a musical style” and setting “a dangerous precedent that strikes a devastating blow to future musicians and composers everywhere.” Though there are some similarities between the songs, the dissent contended, most of the similarities were short patterns that are not themselves protectable under the copyright laws. The dissent warned that the majorities’ decision will stifle creativity as copyright law is only meant to protect authors’ expression as opposed to the idea underlying that expression.

Williams, Harris and Thicke now have the option of asking for review from the entire Ninth Circuit or seeking review by the U.S. Supreme Court.

For more information on copyright law or the  Ninth Circuit’s decision, 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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Governor Murphy Signs Executive Order Directing New Jersey to Reenter the Regional Greenhouse Gas Initiative

On Jan 29, Gov. Phil Murphy signed an executive order tasking NJDEP and NJ BPU with NJ’s reentry into the Regional Greenhouse Gas Initiative  (RGGI). The Regional Greenhouse Gas Initiative is a cooperative of states in the northeast United States committed to limiting and reducing greenhouse gases.  New Jersey was a founding member of RGGI in 2009, but withdrew on January 1, 2012, as the previous governor believed the program “a failure.”

RGGI is a cooperative among states in the northeast dedicated to capping and reducing carbon dioxide emissions from the power sector through a mandatory market-based program. Through each state’s independent Carbon Dioxide Budget Trading Program, each participating state sells emission allowances through auctions and invests proceeds in clean energy innovations. During the years New Jersey failed to participate in RGGI, it is estimated that New Jersey would have received $279 million in revenue that could have been used to sponsor programs in energy efficiency and renewable energy.

The executive order requires NJDEP and NJ BPU to “rejoin RGGI in an expeditious manner” and to promulgate guidelines for the allocation of any funds resulting from New Jersey’s participation which must include factors to ensure any funds New Jersey receives be allocated to projects that will serve New Jersey communities most impacted by the effects of climate change.

For more information regarding the potential impacts of this Executive Order, please contact William F. Harrison, Esq., Chair of the Firm’s Environmental Law and Land Use & Approvals Practice Group, at wharrison@genovaburns.com or 973-533-0777.

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New Jersey Appellate Division Clarifies Rights to Disclosure of School Records Under Public Records Law

In a lengthy, published opinion, the New Jersey Appellate Division recently ruled on four appeals from different trial courts (that had reached conflicting results) about the ability of a nonprofit advocacy organization for disabled students and one of the parent’s efforts to obtain copies of settlement agreements from public school districts relating to the provision of special services to other qualified students.

The issue was how to strike a balance between privacy rights in educational records reflected in the New Jersey Pupil Records Act, and the Federal Family Educational Rights and Privacy Act of 1974, on the one hand, and the broad right to obtain public records under New Jersey’s Open Public Records Act or OPRA, on the other hand.  (See Litigation Law Blog’s Post on a Series of Recent OPRA Decisions by the New Jersey courts.)

The Appellate Division Panel held that the non-profit entity plaintiffs in three of the cases were entitled to copies of the requested records with personal identifying information redacted, if they establish that they are “bona fide researchers” under the New Jersey Public Records Act or if they obtain in advance an order from the trial court granting them access. The school districts were directed to not turn over the redacted records until first providing reasonable advance notice to the parents or guardians of the affected students.

The Court distinguished one of the cases on appeal in which the requestor sought a report that exclusively mentioned her own child, affirming parents’ right to obtain unredacted records relating to their children.

For more information on OPRA, 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 at jborek@genovaburns.com.

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