New Jersey Lawyer & Attorney : Stark & Stark Law Firm : New Jersey Law Blog

Since the beginning of October 2009, over 350 YAZ®, Yasmin® and Ocella® cases from various jurisdictions throughout the country have been transferred to the MDL in the United States District Court for the Southern District of Illinois. On November 9, 2009, motions were filed to appoint Plaintiffs’ lead counsel and a Plaintiffs’ Steering Committee. The Court will hold a conference in the coming weeks to address the newly transferred cases and pending motions.

Stark & Stark’s Mass Tort/Pharmaceutical Litigation Team pursues claims throughout the nation against drug manufacturers, so they can be held accountable when the drugs they market are proven to be defective or cause catastrophic injury to the people who use them. If you feel you have experienced any side-effects from taking YAZ® or Yasmin® (or the generic brand, Ocella®), you can contact Stark & Stark and speak to one of the Mass Tort/ Pharmaceutical Litigation attorneys, free of charge, who can help assess any claims that you might have against the YAZ®, Yasmin® or Ocella® manufacturers.

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NuvaRing®, the combined contraceptive vaginal ring that is supposed to provide month-long birth control, is currently involved in a Multi-District Litigation (“MDL”) in the United States District Court for the Eastern District of Missouri.  Plaintiffs have advanced claims that NuvaRing® is responsible for injuries in some individuals.
 

In recent months, the defendants filed a motion for the entry of a Lone Pine case management order. Such an order would have required all existing and future plaintiffs in the NuvaRing® MDL to submit a Rule 26(a)(2), or case specific, expert report attesting to a reasonable degree of medical certainty that NuvaRing® caused the injury suffered by each plaintiff. The defendants claimed that the entry of a Lone Pine case management order would promote judicial efficiency by discouraging claims that did not have merit and allowing the Court to group cases with legal similarities. However, the plaintiffs argued that the entry of a Lone Pine case management order would actually have amounted to an onerous burden that would have the effect of discouraging many plaintiffs from filing otherwise viable claims against the defendants. Accordingly, the Court ruled in favor of the plaintiffs and denied the defendants' motion for entry of a Lone Pine case management order, without prejudice.

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NuvaRing®, the once-a-month combined contraceptive vaginal ring which is supposed to  provide month-long birth control, is currently involved in a Multi-District Litigation (“MDL”) in the United States District Court for the Eastern District of Missouri based on claims that NuvaRing® is responsible for injuries in some individuals. 

On February 6, 2009, Plaintiffs filed a Master Consolidated Complaint (“Master Complaint”), which will serve to supplement the complaints in the individual cases.  The cases were originally filed in different state courts and transferred to the MDL.  The Master Complaint will make entry of cases into the MDL from around the country more efficient by allowing the incoming plaintiffs to simply refer to the Master Complaint.  This Master Complaint makes the necessary jurisdictional claims, as well as alleging a variety of counts for Negligence, Fraud, and other causes of action.

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NuvaRing® is marketed as a once-a-month, combined contraceptive vaginal ring that provides month-long birth control.   It is sold in the United States by Organon USA Inc., a New Jersey corporation with its principal place of business in Roseland, New Jersey, and Organon International, Inc., headquartered in the Netherlands. Its parent company, Schering-Plough Corp., is located in Kenilworth, New Jersey.  Complaints have alleged that hormone levels in NuvaRing® have resulted in death, the breakdown of tissue and organs, amputation, heart attacks, ischemic strokes, and deep vein thrombosis. 

 

Courts in the United States have consolidated NuvaRing® claims in two locations:  1) New Jersey Superior Court, Law Division, Civil Part, Bergen County Vicinage; and 2) the United States District Court for the Eastern District of Missouri.  As of July 1, 2009, there have been 79 cases filed in new Jersey Superior Court and more than one hundred in the Eastern District of Missouri.
 

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Hydroxycut®, the group of dietary supplements which claim to be fitness and weight loss aids, have recently been linked to severe, and sometimes life threatening injuries. Recent reports state that these injuries include damage to the liver, kidneys and other internal organs, rhabdomyolysis (severe muscle damage), cardiovascular disorders and even death. On May 1, 2009, the United States Food and Drug Administration (FDA) issued a warning urging consumers to discontinue the use of the supplements due to the severe health dangers associated with Hydroxycut®. Following the warning from the FDA, the makers of Hydroxycut® issued a voluntary recall of the supplements.

These supplements include Hydroxycut® Regular Rapid Release Caplets, Hydroxycut® Caffeine-Free Rapid Release Caplets, Hydroxycut® Hardcore Liquid Capsules, Hydroxycut® Max Liquid Capsules, Hydroxycut® Regular Drink Packets, Hydroxycut® Caffeine-Free Drink Packets, Hydroxycut® Hardcore Drink Packets (Ignition Stix), Hydroxycut® Max Drink Packets, Hydroxycut® Liquid Shots, Hydroxycut® Hardcore RTDs (Ready-to-Drink), Hydroxycut® Max Aqua Shed, Hydroxycut® 24, Hydroxycut® Carb Control and Hydroxycut® Natural. Hydroxycut® supplements are manufactured and distributed by Iovate Health Sciences and MuscleTech Research and Development, Inc.

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As the student loan scandal widens, it seems that most colleges and universities will have to examine and modify any existing internal policies that outline appropriate conduct between employees and outside service providers.

In both New Jersey and New York, news is unfolding of possible inappropriate practices of college and university employees accepting perks ranging from stock options, the use of vacation homes, trips, as well as cash provided by loan industry representatives in an effort to become one of the institution’s preferred lenders for prospective students.

More than 90% of all students have some form of student loan, and more than 80% utilize the private lenders recommended by the university. Since these loans are for the most part subsidized by the government, there is little risk of non-payment to the lenders, in fact student loans are not even dischargable in bankruptcy.

Colleges and universities must now face the reality that in spite of their enlightened existence, they too are subject to conflicts of interest, as well as possible civil and even criminal liability.

 

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Large-scale, industrial construction litigation naturally involves high volumes of documents exchanged through discovery, which must be marshaled, reviewed and compiled in some form by counsel. Many times, adverse parties seek access to such compilations of what are otherwise completely discoverable documents. The Federal Courts have protected compilations under what has been termed the "selection and compilation" theory of the work product doctrine. Federal Courts have held that, in cases that involve reams of documents and extensive document discovery, the selection and compilation of documents is often more crucial than legal research. James Julian, Inc. v. Raytheon Co., 93 F.R.D. 138, 144 (D.Del.1982). The most widely cited cases regarding the doctrine are the Third Circuit's decision in Sporck v. Peil, 759 F.2d 312 (3d Cir.1985), cert. denied, 474 U.S. 903 (1985), and the Eighth Circuit's decision in Shelton v. American Motors Corp., 805 F.2d 1323 (8th Cir.1986). In Sporck, defendants produced thousands of documents and defendant's counsel selected and had defendant review certain documents in anticipation of his deposition. Defendant’s counsel did not claim any of the documents were work product; however, the court upheld counsel's objections to deposition questions which sought the identification of documents the deponent reviewed to prepare for the deposition. The court held that counsel's selection and compilation of the documents fell within the category of highly protected opinion work product, because the compilation of the documents would reveal counsel's mental impressions and opinions as to how the documents related to the issues. It further held that an attorney's legal strategy, his intended lines of proof, his evaluation of the strengths and weaknesses of his case and the inferences he draws from the facts are all opinion work product. The court stated:

Such material is accorded an almost absolute protection from discovery because any slight factual content that such items may have is generally outweighed by the adversary system's interest in maintaining the privacy of an attorney's thought processes and in ensuring that each side relies on its own wit in preparing their respective cases.

Id. at 316.

In Shelton, defendant's in-house counsel refused to respond to deposition questions seeking information regarding the existence or non-existence of documents in defendant's possession. Counsel argued that: 1) relevant documents were already produced, interrogatories were answered, counsel’s knowledge was acquired solely in her efforts to assist her client in litigation and thus constituted work product; and 2) any recollection of particular documents on certain subjects would reveal those to which counsel attached particular significance, revealing her theories and opinions. The court held that counsel had no first hand factual information related to the claims and that the questions she was asked sought more than just information about the existence of documents. The court agreed that the selective review and recollection of documents reflects the attorney's professional judgment on the issues, as well as her legal theories and thought processes. It found that "[i]n cases that involve reams of documents and extensive document discovery, the selection and compilation of documents is often more crucial than legal research...." Id. at 1328; see also, In re Grand Jury Subpoenas Dated October 22, 1991 and November 1, 1991, 959 F.2d 1158 (2d Cir.1992) (applying the Sporck principle that production of otherwise unprivileged documents that could be protected from discovery if their disclosure presented a real concern that the thought processes of counsel would be exposed); Santiago v. Miles, 121 F.R.D. 636, 638-40 (W.D.N.Y.1988) (court applied Sporck, finding that Second Circuit has recognized the selection and compilation doctrine; while data in computer printouts consists of unprivileged facts, printouts were prepared at direction of counsel and reflect counsel's selection process and mental impressions, deserving of protection in absence of strong showing of necessity and unavailability).

Thus counsel’s selection and compilation of otherwise discoverable documents should be protected under the work product doctrine.

Technorati Tags: New Jersey : Litigation

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It is well established that sub-subcontractors may not maintain direct actions against EPC contractors or owners based upon a theory of unjust enrichment or quantum meruit. The Appellate Division in Insulation Contracting, Inc. v. Kravco, 209 N.J. Super. 367 (App. Div. 1986), held that, in such situations, a basic premise of the theories of unjust enrichment and quantum meruit is that there must be a clear expectation by the defendant that it will be responsible for payment directly to the plaintiff. The fact that the defendant may have received a benefit for which it has not paid is not sufficient. Id. at 378.

Such was also the explicit holding in F. Bender, Inc. v. Muscarelle, Inc., 304 N.J. Super. 282, 285 (App. Div. 1997):

We know of no case where the statutory protections given to a subcontractor or sub-subcontractor by filing a notice of intention or stop notice could be replicated by a common law claim based upon quantum meruit. Such a rule would create havoc in the construction industry. See Insulation Contracting & Supply v. Kravco, Inc., supra, (denying similar reimbursement in a claim by a sub-subcontractor against the prime contractor after the subcontractor for whom the plaintiff had performed defaulted).

 In this case, Hertz had an obligation to pay its contractor, and, Muscarelle, the contractor, had an obligation to pay its subcontractor, Tri-Gee, who in turn had an obligation to pay plaintiff, its subcontractor. When plaintiff performed, it had a claim only against Tri-Gee unless it filed a notice of intention or stop notice in compliance with the Mechanics' Lien Law. It is true that Hertz and/or Muscarelle may have received the benefit of plaintiff's work; however, Tri-Gee owes plaintiff for that work.

Quantum meruit, which plaintiff seeks, requires that there be unjust enrichment. Callano v. Oakwood Park Homes Corp., 91 N.J. Super. 105, 108- 109, 219 A.2d 332 (App.Div.1966). Here, there was no unjust enrichment.

Id. at 284-5.

Therefore, the sub-subcontractor’s unjust enrichment and quantum meruit claims against the EPC contractor and owner will not support any cognizable claim for relief, and must be dismissed. Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746 (1989); Leon v. Rite Aid Corp., 340 N.J. Super. 462, 466 (App. Div. 2001); Rule 4:6-2(e). The sub-subcontractor is thus left to seek redress under the statutory provisions of the construction lien law, and through its direct contractual claims against the subcontractor.

Technorati Tags: New Jersey : EPC Contractors

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As a general rule, the plaintiff carries the burden of proving delay and constructive acceleration claims. According to well-settled law, the party claiming delay damages must demonstrate to the trier of fact (1) what delays occurred; (2) whether the delays are compensable; (3) who caused the delays; (4) whether the delay was offset by concurrent delays such as the delays of the opposing party or by compensable delays; and (5) the relationship between the delay and damages claimed. See, Fieldcrest Builders, Inc. v. Antonucci, 724 N.E.2d 49 (Ill. App. Ct. 1999); Premier Elec. Const. Co. v. American Nat. Bank of Chicago, 658 N.E.2d 877 (Ill. App. Ct.); Pathman Const. Co. v. Hi-way Elec. Co., 382 N.E.2d 453 (Ill. App. Ct. 1978). The claimant has the burden of proving the extent of the delay, that the delay was proximately caused by the other party, and that the claimant was harmed by the delay. See, Wilner v. U.S., 24 F.3d 1397 (Fed. Cir. 1994) The extent of the delay of each party must be clearly shown. See, Fieldcrest Builders, supra, 724 N.E.2d 49 (denying owner's counterclaim for delay damages in contractor's action for recovery in quantum meruit, finding that owner caused delays in contractor's work during the course of the project and the owner made no attempt to separate, explain, or identify which delays could be attributed to the contractor; also rejecting owner's argument that delay damages were mandated because project was delayed when owner terminated contractor from the project in August and could not find replacement until December).

In establishing a causal link between delay and the damages claimed, a contractor must show that the contractee's actions affected activities on the critical path of the contractor's performance of the contract. See, Kinetic Builder's Inc. v. Peters, 226 F.3d 1307 (Fed. Cir. 2000) (government contractor failed to show causal connection between Air Force's delay in correcting defective restroom design in building to be altered and slowing of contractor's progress in completing contract, so contractor was not entitled to time extension or reimbursement for extended job site overhead costs in connection with such delay). The party seeking delay damages bears the burden of establishing the alleged damages with a reasonable degree of certainty. See, Fieldcrest Builders, supra, 724 N.E. at 58 (1st Dist. 1999).

In addition, Courts in the 4th Circuit have held that the party claiming it incurred added costs because of delay in performance required under the contract has the burden of proving these costs. Virginia Beach Mechanical Services, Inc. v. Samco Construction Company, 39 F. Supp. 661, 672 (E.D. Va. 1999) (citing United States v. Citizens & Southern Nat. Bank if Atlanta, 367 F.2d. 473, 480 (4th Cir. 1966). If there are factors for which the defendant is responsible and factors for which it is not, the party alleging a delay caused by a material breach must provide a reasonable basis for apportioning the damages. Id. Applying these principles to the facts in Samco, the Court held that at least one other subcontractor caused the delays and may have stalled the contract performance, and for this reason, it could not conclude what role the contractor played in delaying ultimate completion of the contract and causing the damages sought. Id. Finally, the Court found that the subcontractor did not provide a reasonable basis for apportioning damages among the contractor and other subcontractors, who were obviously a substantial factor in the delay that did result. Id.

Therefore, it is the subcontractor that bears the burden of proving that an EPC contractor’s actions caused delay and constructive acceleration.

Technorati Tags: New Jersey : EPC Contractors

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Section 7 of the Federal Arbitration Act (“FAA”) provides that "[t]he arbitrators ... or a majority of them, may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case ...." 9 U.S.C. §7. Section 7 further provides:

[I]f any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States.

Id.

F.R.C.P. 45 governs the issuance and service of subpoenas in federal district court. Thus, under the FAA, F.R.C.P. 45 also governs the service of arbitration subpoenas. F.R.C.P. 45(a)(2) provides that "a subpoena for production or inspection shall issue from the court for the district in which the production or inspection is to be made.” F.R.C.P. 45(b)(2) imposes territorial limits upon the area in which a subpoena may be served providing that:

a subpoena may be served at any place within the district of the court by which it is issued, or at any place without the district that is within 100 miles of the place of the deposition, hearing, trial, production, or inspection specified in the subpoena or at any place within the state where a state statute or rule of court permits service of a subpoena issued by a state court of general jurisdiction sitting in the place of the deposition, hearing, trial, production, or inspection specified in the subpoena.

Under the above rules, it is necessary to apply a two-step analysis in order to determine the geographic limitation of the enforcement of an arbitration subpoena. First, it is necessary to identify the proper district court in which to file a petition to enforce the arbitrator's subpoena. As noted above, the FAA requires the petition to be filed in the "district in which such arbitrators, or a majority of them, are sitting." This is the only Federal Court that can legally enforce the arbitrator's subpoena, no matter where the witness works or resides.

The next step is to identify the jurisdictional limitations of the particular court. F.R.C.P. 45(b)(2)restricts the District Courts' ability to enforce a subpoena to the area within 100 miles of the courthouse or within the state in which the trial or the hearing is being held. Because Section 7 invokes F.R.C.P. 45, this limitation applies to the Court's authority to compel a witness to attend an arbitration hearing. Thus, if a third party receives an arbitration subpoena to appear at the hearing but fails to show up, the remedy the FAA provides is to petition the District Court in the District in which the panel is sitting for an order to compel compliance with the subpoena. In the alternative, Section 7 authorizes the District Court to punish the non?complying party for contempt.

The Federal case law regarding non-party subpoenas is somewhat scarce, in most cases not on point, and has led to varying results. In Amgen, Inc. v. Kidney Center of Delaware County, 879 F. Supp. 878 (N.D. Ill.1995), the arbitration was pending in Illinois and the arbitrator issued a subpoena to the non-party out of state kidney center, which was based in Pennsylvania, to produce documents and a representative for a deposition in Illinois. The kidney center refused to honor the subpoena and the plaintiff sought to enforce the subpoena in Federal Court in Pennsylvania, which held that it lacked authority to entertain the petition. Plaintiff filed a new petition with the federal court in Illinois, where the kidney center was based. The Illinois federal court ruled that it had no power to enforce the arbitrator's subpoena under the FAA and F.R.C.P. 45, but held that the parties had expressly agreed to arbitrate their dispute under the Federal Rules. Thus, they inherently agreed to liberal discovery and to the arbitrator acting "with the power of a judge applying those rules." Accordingly, the Court held that the plaintiff could follow the procedure in F.R.C.P. 45(a)(3)(B), and have its attorney issue a subpoena on behalf of the district court in Pennsylvania where the kidney center was located.

Thereafter, the U.S. District Court for the Southern District of New York, decided to strictly apply Section 7 of the FAA in Integrity Insurance Co. v. American Centennial Insurance Co., 885 F. Supp. 69 (S.D.N.Y. 1995), holding that it does not authorize an arbitrator to subpoena non-party witnesses for pre?hearing depositions. In Integrity, two non-party witnesses moved to quash an arbitrator's subpoenas for a deposition and documents. Though the non-parties were in the same jurisdiction, the Court granted the motion to quash as to the depositions, holding that the arbitrator only had the power to compel a witness to attend the hearing. The Court modified the subpoenas to provide for the non-party witnesses to appear at the hearing. It also enforced the subpoena for documents, but modified it to require production in advance of the hearing.

Most recently, in Legion Insurance Co. v. John Hancock Mutual Life Insurance Co., 2002 WL 537652 (3d Cir. 2002), the U.S. Court of Appeals for the 3rd Circuit refused to enforce an arbitration subpoena for a deposition of a non-party who resided outside the court's jurisdiction and refused to enforce the portion of the subpoena requesting document production. There, the arbitration was to take place in Pennsylvania, and the third party resided in Florida. The 3rd Circuit based its refusal to enforce the arbitrator’s non-party subpoena on the ground that the witness resided beyond the Court's territorial jurisdiction under F.R.C.P. 45.

Though there is a paucity of cases addressing an appearance at an arbitration hearing, as opposed to depositions and the production of documents, it is clear that the rules regarding arbitration subpoenas for non-party out-of-state witnesses are strictly construed by the Federal Courts. It is also clear that Federal Courts have held that there is a direct relationship between Section 7 of the FAA and F.R.C.P. 45, such that arbitration subpoenas for non-party out-of-state witnesses are restricted in that they must be issued in the same jurisdiction or within 100 miles of the location of the arbitration hearing.

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