On June 30, 2022, the New Jersey Supreme Court issued its decision in Fowler v. Akzo Nobel Chemicals, Inc., in which NJCJI jointly participated as amicus curiae with the United States Chamber of Commerce.
The Court held that an asbestos manufacturer or supplier that places insufficient warnings on asbestos bags used in the workplace has breached its duty to warn the worker, regardless of whether it provided the employer with correct supplemental information intended to reach the employees. From a practical perspective, this means that the totality of a manufacturer or supplier’s efforts to communicate risk and safety information, such as flyers for an employer to hang in the workplace, are insufficient. This decision overlooks the fact that workers derive a significant benefit from manufacturer or supplier educational materials, especially when such materials are conveyed to them through their employer. Despite this reality, the majority of the Court elevated the importance of warnings on product packaging that an employee could (but will not necessarily) read, regardless of the extent of other education provided by the manufacturer or supplier. This holding could disincentivize an array of strategies used by manufacturers and suppliers to communicate product safety risks to employers who purchase their products.
NJCJI and the Chamber were represented by Philip S. Goldberg, Esq., Mark A. Behrens, Esq., and Cary Silverman, Esq., at Shook, Hardy, and Bacon L.L.P. NJCJI thanks Phil, Mark, and Carey for their hard work and expertise on an outstanding brief.
On June 20, 2022, NJCJI’s President, Anthony Anastasio, testified before the Senate Commerce Committee on Senate Bill 467 (S467). Part of a package of automobile insurance legislation advanced by Senate President Nicholas Scutari, S467 seeks to alter a New Jersey law that allows drivers to choose to limit their ability to bring accident lawsuits for non-economic damages in exchange for a lower auto insurance premium. That option, commonly known as the “verbal threshold,” can still be overcome if an injured driver suffers serious injuries. The law in its current state has been effective at containing automobile insurance costs in New Jersey and limiting time-consuming litigation for New Jersey’s courts.
However, S467 would allow anyone injured in a car accident that happened to be caused by someone convicted of drunk or reckless driving at the time of the accident to automatically bypass the verbal threshold, despite the choice they made when they purchased their car insurance and no matter how minor the injuries. This change will lead to increased auto accident litigation and in turn, higher insurance premiums for drivers in New Jersey.
Despite heavy opposition by both the business community and consumer advocacy groups, the Senate Commerce Committee voted favorably on S467 and the rest of the bills in the package. These bills will now be sent for a second reading in the Senate. So far, no counterpart to S467 been introduced in the Assembly, but other bills from this package have counterparts in the Assembly. NJCJI will continue to update its membership on this package of legislation.
Read NJCJI’s written comment here. You can listen to Anthony’s testimony here, starting at 1:43:43.
On June 7, 2022, the Committee on Rules of Practice and Procedure voted unanimously to approve an amendment to Rule 702 of the Federal Rules of Evidence. This amendment clarifies that the proponent of expert testimony is required to demonstrate its admissibility by a preponderance of the evidence and that experts will not assert a degree of confidence in an opinion that is not derived from sufficient facts and reliable methods. This clarification will assist federal courts in carrying out their gatekeeping function and prevent unreliable junk science from being admitted as expert testimony.
Next, the proposed amendment will go to the Judicial Conference for consideration this fall. After that, the proposed amendment will be reviewed by the Supreme Court of the United States and sent in its final form to Congress. Barring action by Congress to disapprove the amendment, the revised rule will take effect on December 1, 2022.
NJCJI would like to thank Michelle Bufano, Esq. of Patterson Belknap for sharing her deep expertise on the subject and for drafting the comment NJCJI submitted to the Committee on Rules of Practice and Procedure earlier this year.
On April 7, 2022, the U.S. Chamber of Commerce’s Institute for Legal Reform (“ILR”) released an update on third-party litigation funding across the globe. Among the trends and developments ILR identified was the third-party litigation funding rule adopted by the District of New Jersey. NJCJI successfully advocated for this rule, Civ. Rule 7.1.1, last year. Read ILR’s update here.
The American Tort Reform Association (“ATRA”) recently released a report about the National Association of Attorneys General (“NAAG”). Traditionally, NAAG’s function was to host a forum for state attorneys general to coordinate shared antitrust cases and manage multistate investigations and lawsuits. However, as ATRA’s report shows, NAAG’s mission has crept from promoting consistency across these cases to promoting “entrepreneurial litigation” among its member-attorneys general. Now NAAG functions like an extension of the mass torts plaintiffs’ bar, even taking a cut of settlements, which are a major revenue source for NAAG. Read the full report here.
On Monday, March 28, 2022, the Supreme Court of the United States heard oral argument in Southwest Airlines Co. v. Saxon.
Southwest Airlines Co. v. Saxon asks the Supreme Court to determine whether workers who load/unload goods from vehicles that travel in interstate commerce but do not themselves physically transport the goods across state lines are considered interstate “transportation workers” exempt under Section 1 of the Federal Arbitration Act (“FAA”). This case raises similar questions to those answered by Chief Judge Freda Wolfson in the Uber misclassification cases in the District of New Jersey. In the Uber cases, Chief Judge Wolfson rejected the conclusion that Uber drivers are exempt from the FAA as interstate “transportation workers” simply because they sometimes drop off people at airports for interstate trips and occasionally cross state lines. NJCJI will issue an update when the Supreme Court issues its opinion in Southwest Airlines.
NJCJI joined a coalition of business advocacy organizations in a letter opposing H.R. 963, the “Forced Arbitration Injustice Repeal (FAIR) Act.” The so-called FAIR Act would prohibit pre-dispute arbitration agreements that require arbitration in employment, consumer, antitrust, or civil rights disputes or that interfere with the ability of individual plaintiffs to participate in joint, class, or collective actions related to those types of disputes. Effectively, the FAIR Act will ban arbitration provisions in most private contracts where they typically appear today.
In its letter to the U.S. House of Representatives opposing the bill, the coalition highlighted the fact that arbitration helps litigants. Indeed, plaintiffs tend to prevail in arbitration, recover more money, and reap these benefits faster than they would in traditional litigation and class actions. Indeed, the only group that stands to gain from the FAIR Act are class-action lawyers, whose businesses profit from increased traditional class-action litigation. Nevertheless, H.R. 963 passed the House of Representatives and is now before the Senate Judiciary Committee.
Read H.R. 963 here and the Coalition’s letter here.
On March 23, 2022, the Honorable Freda L. Wolfson, Chief Judge for the United States District Court for the District of New Jersey, issued a comprehensive opinion granting summary judgment to Merck in In re Fosamax (Alendronate Sodium) Products Liability Litigation. Chief Judge Wolfson’s decision ends about 500 lawsuits filed over the last fourteen years.
In re Fosamax involved more than 500 individual plaintiffs who took Fosamax, a drug manufactured by Merck. The plaintiffs claimed that they suffered atypical femoral fractures between 1999 and 2010 and that Merck failed to warn them of this alleged side effect. The plaintiffs’ claims were based on state-law failure-to-warn theory.
This case previously went to the Supreme Court of the United States on the issue of whether the judge or jury decides whether federal law preempts the plaintiffs’ state-law failure-to-warn claims. The Supreme Court ruled that the trial judge decides the preemption issue. The case was remanded to the District Court to decide if communications between Merck and the Food and Drug Administration (“FDA”) were sufficient to give rise to preemption. Specifically, the FDA issued a Complete Response Letter (“CRL”) that rejected a warning concerning atypical femoral fractures that Merck proposed.
Chief Judge Wolfson’s opinion evaluated whether the CRL rejecting Merck’s proposed warning preempts the plaintiffs’ state-law failure-to-warn claims. The plaintiffs argued that the CRL was not “clear evidence” that the FDA would have rejected any and all warnings. Chief Judge Wolfson disagreed, finding that Merck fully informed the FDA of the justification for its proposed warning, which would have been adequate under New Jersey law, and that the FDA did not approve changing the Fosamax label to include a warning about atypical femoral fractures. Further, the FDA based its rejection on insufficient evidence of a causal link between Fosamax and atypical femoral fractures, so Chief Judge Wolfson also found that the FDA would not have approved a differently worded warning about that risk. Thus, Chief Judge Wolfson concluded that the state-law failure-to-warn claims were preempted by the FDA’s rejection of the proposed warnings.
NJCJI applauds this decision as an appropriate application of the doctrine of preemption. Read Chief Judge Wolfson’s thoughtful opinion here.
On March 14, NJCJI appeared as a friend of the New Jersey Supreme Court in East Bay Drywall, LLC v. New Jersey Dep’t of Labor and Workforce Devel., No. 085770, a dispute over application of New Jersey’s “ABC Test” for determining whether workers paid as independent contractors should instead have been classified as employees. The drywall installation company at issue sent drywall contractors to job sites all over the state. At issue in the case are whether (1) those remote job sites—the customers’ premises—count as “places of business” for the drywall company (as the State contends), and (2) the drywall company provided sufficient evidence that its contractors operated independent businesses (which the State disputes). The Appellate Division sided with East Bay Drywall and the Supreme Court granted the State’s petition to review the case.
The Justices posed tough questions to both sides in the case and to the two amici, NJCJI on the defense side and the New Jersey chapter of the National Employment Lawyers Association in support of the State. With respect to whether remote work sites count as the drywall company’s “places of business,” precluding the company from satisfying the test’s “B” prong, questioning focused on differences between this case and Carpet Remnant Warehouse, Inc. v. N.J. Dep’t of Labor, 125 N.J. 567 (1991), in which the Supreme Court found that customers’ premises where the defendant’s contractors installed carpets were not the defendant’s places of business. Narrowing or reversing this interpretation of the “B” prong in the manner argued by the State would have serious implications not just for construction, but for many industries in New Jersey. For that reason, NJCJI urged the Court to follow and affirm its decision in Carpet Remnant.
As to whether East Bay Drywall provided sufficient evidence that its contractors operated independent businesses, the test is fact-intensive. The State contended that the evidence East Bay Drywall submitted should not have sufficed, but the State neither provided any evidence of improper practices by the company nor explained where it would set the proof bar. Several Justices noted that the absence of regulations explaining what employers in East Bay Drywall’s position must provide is unfortunate and leaves employers without proper guidance. NJCJI acknowledged that the “C” prong issues in the case are complex and urged the Court not to impose an evidentiary burden higher than small businesses in the State would be able to meet without undue expense.
Jeffrey Jacobson, a litigation partner at Faegre Drinker and a former Chief Counsel to the New Jersey Attorney General, briefed and argued the case for NJCJI. NJCJI would like to thank Jeff for his brilliant advocacy in this case and steadfast support of NJCJI.