General Jurisdiction and Multijurisdictional Practice

General Jurisdiction and Multijurisdictional Practice Following Daimler AG v. Bauman

By Wayne J. Positan

I. Introduction

Technology has made the world of lawyers a smaller, more interconnected place, with multijurisdictional practice across state and national boundaries now commonplace. Still, to borrow a line from Dorothy, often there’s no place like home when establishing personal jurisdiction for malpractice defense of a law firm or attorney in a transnational or interstate matter.

In light of recent case law developments, some corporations and multistate law firm defendants now face better odds of transferring claims by out-of-state plaintiffs to a preferred home jurisdiction on general jurisdiction grounds. Plaintiffs in such cases who are reluctant to bring suit where the activities giving rise to the claim actually occurred no longer can simply pick any forum (such as plaintiff’s home forum) where the defendant has been doing business generally. Now, for general jurisdiction to attach to defendants in such cases, the forum state must, with few exceptions, be either the state of incorporation or the headquarters location of the defendant. Consequently, the plaintiff’s opportunity to engage in forum shopping has been significantly limited. For law firm and attorney defendants, better odds of defending in the home jurisdiction may offer the great advantage of conserving litigation resources and reducing uncertainty.

This article will examine the impact of the United States Supreme Court decisions in Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011) and Daimler AG v. Bauman, 134 S. Ct. 746 (2014), as they relate to malpractice suits against law firms engaged in multijurisdictional practice. Here the term “multijurisdictional” refers to either transnational practice or practice in more than one US state, district, or territory either in litigation or transaction matters. The developments in Daimler and Goodyear ultimately will be beneficial to many prospective defendants from a liability risk standpoint. But in order to limit the number of jurisdictions in which a multistate law firm is properly considered “at home,” multistate law firms would be well advised to have a clearly defined headquarters, and to consider locating the firm’s headquarters in the state of registration or incorporation.

II. A Civil Procedure Refresher

As a brief civil procedure refresher, jurisdiction over a nonresident defendant can only be asserted where it is consistent with the Due Process Cause and is authorized by a state long-arm statue. The due process hurdle is met where either general or specific jurisdiction is established. General jurisdiction allows the nonresident defendant to be sued in a forum state, irrespective of the nature of the cause of action and even if the factual allegations are not connected with the defendant’s forum-state-related activities. International Shoe v. State of Washington, 326 U.S. 310, 320 (1945). Instead, general jurisdiction was traditionally established through the court’s analysis of all “systematic and continuous” affiliations of the nonresident defendant with the forum state. Id. On the other hand, specific jurisdiction over a nonresident defendant exists where the actual claims at issue in the suit arise out of the defendant’s actual contacts with the forum state. Helicopteros Nacionales de Colombia. S.A. v. Hall, 466 U.S. 408, 414 (1984). The specific jurisdiction inquiry focuses solely upon whether the nonresident defendant’s contacts with the forum state serve as the basis of the cause of action, and no consideration is given to the extent and nature of the foreign defendant’s unrelated contacts to the forum state. Id. 

In a very significant departure from precedent on the controlling jurisdiction analysis, in Goodyear and Daimler, the Supreme Court clarified that a multistate corporation will generally only be subject to suit in the state where it is incorporated or where its headquarters is located. This change in jurisdictional jurisprudence has critical implications for multistate law firms or law firms engaged in multijurisdictional practice, in connection with legal malpractice claims brought by out-of-state plaintiffs. By doing away with decades of federal and state jurisprudence, the Supreme Court has limited the prior “presence jurisdiction” standard and shifted the focus to whether a corporation or partnership can reasonably be considered “at home” in the forum state. For a corporation, “the place of incorporation and the principal place of business are considered the paradigm ‘bases’ for general jurisdiction.” Daimler, supra, 134 S. Ct. 746, 760 (quoting Goodyear, supra, 131 S. Ct. 2846, 2854). Following Daimler, courts have applied the “at home” standard to law firm defendants, whether they are organized as limited liability companies or as professional corporations. A court may assert jurisdiction over a case-in-controversy where either general or specific jurisdiction is established. However, a plaintiff may be able to successfully oppose transfer on specific jurisdiction grounds, if the conduct which forms the basis of the plaintiff’s claim arises from the defendant-attorney’s purposeful availment of the laws of the forum state.

It must be noted that the Daimler decision does not alter the standard for establishing specific jurisdiction over a law firm defendant. Where a law firm purposefully directs its activities to the forum state and the malpractice cause of action arises from those actions, a plaintiff can properly obtain specific jurisdiction over a law firm defendant in the forum state. Further, the locus of the underlying litigation or the transaction giving rise to the claim will generally be sufficient to allow the exercise of specific jurisdiction over the law firm in the forum state.

But following Daimler, issues surrounding the exercise of general jurisdiction over a law firm defendant are open to reexamination. As multijurisdictional practice becomes more common due to the ease of interstate travel and Internet communication, the frequency with which an aggrieved client may seek to initiate a legal malpractice complaint in its home jurisdiction will also rise. This change in law has implications for forum shopping by plaintiffs as well as the time and expense of defending a malpractice action in a distant or unfriendly jurisdiction. This article will explore the new contours of the exercise of general jurisdiction against law firm defendants following Goodyear and Daimler.

III. The Daimler AG v. Bauman Decision

In Daimler, the Supreme Court put an important gloss on the Goodyear decision, refining the rule as to where exactly, a corporation’s “home” is, for general jurisdiction purposes. In Goodyear, where the Supreme Court established the “systematic and continuous contacts” test of general jurisdiction, the Court reversed a North Carolina court’s assertion of jurisdiction over the foreign subsidiaries of a U.S. tire manufacturer. The plaintiffs were the parents of two North Carolina minors that were killed in a bus crash in France, and it was alleged that the crash was caused by a defective tire manufactured by the foreign subsidiaries. Id. at 2850-2851. The plaintiffs argued that general jurisdiction could be exercised over the foreign subsidiaries because their products reached North Carolina through the stream of commerce. Id. at 2852. The Supreme Court held that jurisdiction could not be established over the foreign subsidiaries in this manner, reasoning that a plaintiff seeking to establish general jurisdiction must demonstrate a foreign defendant’s continuous corporate operations within a state, so substantial and of such a nature as to render them essentially at home in the forum state. Id. at 2855. The Goodyear decision, in part, shifted the focus from the nature of the contacts, to whether the corporation could reasonably be considered “at home” in the forum state, based upon these circumstances.

In Daimler AG v. Bauman, 134 S. Ct. 746, 760-761 (2014), the US Supreme Court further modified the “systematic and continuous” standard in its analysis of general jurisdiction, and clarified precisely where a corporation will be considered “at home.” There, the plaintiffs, twenty-two Argentina residents, filed suit against a German corporation, Daimler, claiming that its wholly owned subsidiary collaborated with Argentina’s state security forces during the 1976-1983 “Dirty War,” leading to the detention, torture, and death of Argentina residents, including the plaintiffs and their relatives, who were employed by Daimler’s subsidiary. Id. at 750-751. The question before the Supreme Court was whether Daimler’s affiliations with the State of California were sufficient to subject it to the general jurisdiction in California.

The Supreme Court reasoned that “only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction” in the forum state and determined that general jurisdiction in California was improper. Id. at 760. “[W]ith respect to a corporation, the place of incorporation and principal place of business” are the paradigm “bases” for general jurisdiction. Id. This holding rejected the traditional standard expansively allowing the exercise of general jurisdiction in every state in which a corporation “engage[d] in a substantial, continuous and systematic course of business.” Rather, the Court clarified, citing Goodyear, “[T]he proper inquiry, this Court has explained, is whether a foreign corporation’s “affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” Goodyear [reporter citation omitted]. The Daimler court further reasoned: “Neither Daimler nor [its affiliate] MBUSA is incorporated in California, nor does either entity have its principal place of business there. If Daimler’s California activities sufficed to allow adjudication of this Argentina-rooted case in California, the same global reach would presumably be available in every other State in which MBUSA’s sales are sizable. No decision of this Court sanctions a view of general jurisdiction so grasping.” The Court in Daimler thus greatly limited those jurisdictions where a defendant corporation or partnership that is operating in multiple jurisdictions could be deemed subject to general jurisdiction.

While the place of incorporation and the location of the headquarters were referred to as the primary “bases” for an exercise of general jurisdiction, the Supreme Court did not foreclose the possibility that a corporation’s “operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State.” Id. at 761 n. 19.

Some courts have specifically interpreted Daimler as effecting a drastic change in the law affording corporate defendants a previously unavailable personal jurisdiction defense. See Gucci America, Inc. v. Weixing Li, 768 F.3d 122, 135 (2d Cir. 2014); 7 W. 57th St. Realty Co., LLC v. CitiGroup, Inc., 2015 U.S. Dist. LEXIS 44031, *22 (S.D.N.Y. Mar. 31, 2015). The new recitation of the standard “bases” for general jurisdiction set forth in Daimler has significant implications for multi-state law firms and law firms engaged in multijurisdictional practice.

IV. Specific Jurisdiction

Any general jurisdiction analysis applying Daimler and Goodyear to attorney liability in a multijurisdictional practice setting, should start with recognition that the established legal standard for specific jurisdiction was not adjusted by the new rule. Provided that the selected forum state’s long arm statute permits personal jurisdiction over nonresidents to the extent allowed by the Due Process Clause of the Fourteenth Amendment, the issue turns upon whether the exercise of jurisdiction comports with due process. Specific jurisdiction over a defendant is satisfied where the defendant purposefully avails himself or herself of the laws of the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). In general, where an attorney purposefully directs his activities to the forum state and the cause of action arises from those contacts, specific jurisdiction in the forum state will attach for a malpractice claim arising from those activities. See, e.g., Reliance Steel Products Co. v. Watson, Ess, Marshall & Enggas, 675 F.2d 587, 589 (3d Cir. 1982). However, specific jurisdiction over a nonresident defendant must arise from contacts the defendant itself has created with the forum state, as the “plaintiff cannot be the only link between the defendant and the forum.” Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014).

Thus, where an out-of-state attorney appears pro hac vice in a matter in the forum state, it has been held there is a near presumption that specific jurisdiction is appropriate in claims arising from the matter in which the attorney was admitted pro hac vice. Jackson v. Kincaid, 122 S.W.3d 440, 449-450 (Tex. App. 2003) rev’d on other grounds. The procedural rules of some jurisdictions require that attorneys being admitted pro hac vice consent to the jurisdiction in the state for disciplinary matters or malpractice suits arising from the case in which pro hacvice was granted. Mississippi Rule of Appellate Procedure 46(6) (requiring an attorney to submit an affidavit consenting to jurisdiction); New Jersey Court Rule 1:21(2)(c)(2) (requiring an order appointing the Clerk of the State Supreme Court as agent for service upon pro hacvice attorney). Even when an attorney is admitted pro hac vice in a related case, if a nexus exists between the defendant attorney’s pro hac vice admission in the forum state and the underlying cause of action asserted by the legal malpractice plaintiff, specific jurisdiction may properly be exercised in the forum state. See Klein Frank, P.C. v. Girards, 932 F. Supp. 2d 1203, 1211 (D. Colo. 2013).

V. General Jurisdiction Applied

a. Introduction

As noted above, following Goodyear and Daimler, general jurisdiction can only be exercised over a corporate defendant if the defendant is reasonably considered at home in the forum state, which is interpreted as either the place of incorporation of the location of the headquarters. While Goodyear and Daimler involved corporations, recent precedent suggests that their holdings will apply equally to law firms organized as limited liability partnerships or professional corporations. See Cromenas v. Morgan Keegan & Co., Inc., No. 2:12-CV-04268-NKL, 2014 WL 1375038, at * 13-15 (W.D. Mo. Apr. 8, 2014)(dismissing suit against limited liability partnership based upon lack of contacts with forum state). Despite the manner in which legal malpractice complaints are frequently pled, general jurisdiction over a defendant law firm cannot be established on the basis of the residency or location of the claimant or the unilateral actions of a third party. See Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984). Contact with attorneys via phone or email is generally considered insufficient to trigger jurisdiction over an attorney. E.g., Porter v. Berall, 293 F.3d 1073, 1076 (8th Cir. 2002).

b. Residency/Bar License of a Partner in the Forum State

Plaintiffs frequently seek to exercise general jurisdiction over an out-of-state law firm based upon the residency or possession of a law license by one or multiple partners in the forum state. Based upon the decisions in Goodyear and Daimler, it appears that such contentions, on their own, would be insufficient to trigger general jurisdiction, as they would not reasonably establish that the firm would be considered “at home” in the forum state. In Cromenas v. Morgan, the plaintiff asserted that general jurisdiction was proper over an out-of-state law firm in Missouri because four of the approximately 800 attorneys possessed active Missouri bar licenses. Id. at *12. The plaintiffs based this argument upon standard partnership principles, arguing that the activities of one partner are generally attributable to the partnership. Id. at *12-13. A Missouri district court held that general jurisdiction over the firm was improper based upon the possession of a Missouri bar license by four members of the firm. Id. The Cromenas court clarified that if a partner of the firm possessed a Missouri bar license and utilized that license to practice law within Missouri, then specific jurisdiction would be proper “by reason of the activities.” (citations omitted). The Court reasoned that general jurisdiction was improper because the complaint was “not related in any manner to the Missouri bar licensed partners’ contacts with Missouri.” Id. at 13.

Prior to Goodyear and Daimler, the mere residency of a partner, without further contacts, was generally considered insufficient to trigger general jurisdiction in the forum state. E.g., Pappas v. Arfaras, 712 F.Supp. 307, 311 (E.D.N.Y.1989) (“mere fact” that limited partners of defendants were New York citizens does not amount to purposeful activity within the state); Citibank, N.A. v. Estate of Simpson, 676 A.2d 172, 177 (N.J. App.Div. 1996) (personal service of partner unrelated to transaction in New Jersey was insufficient establish general jurisdiction). Given the newly announced focus upon whether the partnership is considered “at home” in the forum state, the existence or presence of a minority of unrelated partners in the forum state is also unlikely to subject the partnership to general jurisdiction in the forum state.

c. Clients and Solicitation in Forum State

Goodyear and Daimler and their progeny also now appear to preclude establishment of general jurisdiction over a foreign law firm on the grounds that the defendant firm has represented other clients – besides plaintiff – located in the forum state or directing marketing efforts toward potential clients in the forum state. It is well established that representation by an out-of-state law firm does not, by itself, establish general jurisdiction in the home state of the client. E.g., Dillon v. Murphy & Hourihane, LLP, No. 14-cv-01908-BLF, 2014 WL 5409040, at *4 (N.D. Cal. Oct. 22, 2014). A Nevada federal district court, in declining to exercise general jurisdiction over a California law firm, drew an important distinction between “doing business” in a state and being considered “at home” in a state. Couvillier v. Dillingham & Assoc., No. 2:14-cv-00482-RCJ-NJK, 2014 WL 3666694, at *3 (D. Nev. July 23, 2014). Moreover, in light of the Goodyear and Daimler decisions, the fact that a firm represents unrelated clients in the forum state is insufficient to ascribe general jurisdiction to the firm in the forum state. See Cromenas, supra, 2014 WL 1375038, at *13-14. Interestingly, the Couvillier court did not directly explain its application of Daimler’s jurisdictional language regarding the home state of a corporation to a California law firm. The Nevada District Court merely noted “[t]here is no general personal jurisdiction over Dillingham, a California law firm, in Nevada, because Dillingham is not alleged to be ‘at home’ in Nevada, but is only alleged to ‘do[] business’ in Nevada, however extensively.” It should be qualified that this change in law only relates to general jurisdiction and is therefore somewhat limited. Specific jurisdiction is likely to apply to any circumstances where a foreign law firm engages in the representation of a client concerning a legal issue within the forum state and the complaint arises from that set of circumstances.

Practitioners should also be aware that how the defendant law firm is organized may be relevant to the extent that it relates to so-called “tag jurisdiction.” In the past, physical presence of a foreign individual defendant in a state was sufficient to confer personal jurisdiction. Burnham v. Superior Court, 495 U.S. 604, 619 (1990). In First American Corp. v. Price Waterhouse LLP, 154 F.3d 16 (2d Cir. 1998), a preDaimler case, the Second Circuit U.S. Court of Appeals allowed general jurisdiction over a partnership based on in-state service on one of its partners. In contrast, courts have refused to allow tag jurisdiction where personal service is effected on a director or officer of a corporation while that individual is physically present in the forum state. See Martinez v. Aero Caribbean, 764 F.3d 1062, 1069-70 (9th Cir. 2014); Topnotch Tennis Tours, LLC, 2014 U.S. Dist. Lexis 160271, *6-7 (E.D.N.Y., November 14, 2014). In reaching the holding that the “at home” standard articulated in Daimler is not satisfied where an officer is personally served in the forum state, in Martinez the Ninth Circuit explicitly did not extend the decision to partnerships stating “partnerships differ from corporations in the important respect that a partnership (unlike a corporation) has no separate existence from its partners.” Martinez, supra, 764 F.3d at 1069 (internal quotations omitted). In this regard, practitioners seeking to invoke the Daimler defense to personal jurisdiction for a law firm organized as a professional corporation or limited liability partnership might consider analogizing that entity to a corporation, to distinguish it from a partnership.

Prior to Daimler, in some jurisdictions, a defendant’s solicitation of business in the forum state was considered a factor supporting a sufficient-contacts finding in the forum state and the exercise of general jurisdiction. E.g., Grynberg v. Ivanhoe Energy, Inc., 490 Fed. Appx. 86, 95 (10th Cir. 2012) (solicitation of business is a factor considered by a court considering general jurisdiction). While the issue has not been conclusively resolved in a majority of jurisdictions, the fact a law firm actively solicited business in the forum state should not support general jurisdiction under the new “at home” jurisdictional standard advanced by Daimler. It appears fully consistent with Daimler that a law firm’s active solicitation of business in another jurisdiction should not influence the analysis of that firm’s “home” state, for general jurisdiction purposes. Again, the home state for these purposes will typically be the state of incorporation/registration or the location of the headquarters. 

d. The Ramifications of Temporary Practice and Appearance in Forum State

Prior to Daimler and Goodyear, evidence that attorneys from a foreign law firm were admitted pro hac vice into the state or federal courts of the forum state was insufficient to establish general jurisdiction over the law firm. See, Cerberus Partners, L.P. v. Gadsby & Hannah, LLP, 836 A.2d 1113, 1116 (R.I. 2003) (multiple pro hac vice appearances by a national law firm were deemed insufficient to establish general jurisdiction in Rhode Island); Wolk v. Teledyne Indus., Inc., 475 F.Supp.2d 491, 502 (E.D. Pa. 2007) (pro hac vice appearance in an unrelated matter in the forum state failed to establish general personal jurisdiction”). The “at home” standard of Daimler further supports this determination, as the act of seeking approval for pro hac vice admission and affiliating with local counsel for a specific case confirms that the firm cannot be reasonably considered “at home” in the forum state and therefore subjected to all-purpose jurisdiction on unrelated matters. See Cromenas, supra, 2014 WL 1375038, at *12 (limited and primarily pro hac vice appearances in Missouri do not suggest that a law firm . . . is at home in Missouri).

However, following Daimler, courts have clarified that jurisdiction by consent of the defendant remains a valid and binding method for asserting jurisdiction. In Senju Pharm. Co., Ltd. v. Metrics, Inc., 2015 U.S. Dist. LEXIS 41504, *22 (D.N.J. Mar. 31, 2015), a District Court held that service was proper where the nonresident defendant had an agent authorized to accept service within the forum state. The Court made a distinction, however, between registering to do business in the state and accepting service in the state by an authorized agent, and noted that registering to do business in a state, without service upon a registered agent would likely not be sufficient to trigger consent jurisdiction. Id.

VI. Conclusion

Under Daimler, there is some leeway for consideration of the totality of the circumstances and the specific factors giving rise to the plaintiff’s assertion of general jurisdiction. The place of incorporation/registration and the location of the firm’s headquarters, however, are considered the paradigm “bases” for jurisdiction. In light of Goodyear and Daimler and their progeny, law firm defendants and defense counsel would be well guided to consider jurisdictional issues at the outset of cases and consider jurisdictional motions to dismiss in order to litigate in more appropriate and convenient “home” forums. The mere existence of multijurisdictional practice under ABA Model Rule 5.5 does not mean an attorney or law firm will be subject to general jurisdiction in each jurisdiction where practice occurs. In order to limit the number of jurisdictions in which a multistate law firm is properly considered “at home,” multistate law firms would be well guided to have a clearly defined headquarters, and to perhaps ensure that the headquarters is located within the state of registration or incorporation. And it should be noted that a forum selection clause in an attorney engagement agreement is another effective tool, permissible in many jurisdictions, for removing or reducing uncertainty as to eventual forum, in the event of a subsequent legal malpractice claim. See XR Co. v. Block & Balestri, P.C., 44 F. Supp. 2d 1296, 1300 (S.D. Fla. 1999). The developments in Daimler and Goodyear are ultimately beneficial from a risk liability standpoint, as a plaintiff’s ability to engage in forum shopping has been significantly limited, and some of the uncertainty concerning where a case will proceed has been curtailed.

Published in The Professional Lawyer, Volume 23, Number 3, ©2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

The Economic Loss Doctrine in New Jersey

THE ECONOMIC LOSS DOCTRINE IN NEW JERSEY – APPLICATION AND EXCEPTIONS

By: Paul Alain Sandars III

Introduction

The Economic Loss Doctrine stands for the simple proposition that a party cannot recover for purely economic losses under tort theories where contractual remedies are available. Construction projects are comprised of numerous contracts between and among various parties. Thus, while a general contractor may have a contract with a project owner, the project architect or engineer is usually not a party to that contract subject instead to its own contractual arrangement with the project owner. Therefore, claims for money damages on a construction project must be made against a party with whom privity exists. This is the so-called “majority rule” which is adopted in New Jersey.

Since the Economic Loss Doctrine as it applies to construction projects is non-statutory, many reported and unreported decisions are seemingly contradictory and therefore analysis of the cases follows with the adage that perhaps the “exception swallows the rule”.

Paul Alain Sandars III

It is well-settled that the Economic Loss Doctrine prevents a party from being able to collect in negligence for solely pecuniary harm that is unaccompanied by personal injury or damages to property. 6 Bruner & O’Connor on Construction Law § 19:10 (“BOCL”). As stated above, New Jersey follows the majority rule of the Economic Loss Doctrine that a plaintiff cannot recover purely economic damages in tort. Thus, damages consisting of personal injury or damages to property are excluded from the ambit of the Economic Loss Doctrines’ claim preclusion. In addition, willful or malicious conduct causing damage is likewise not barred by the Doctrine.

In the construction law context, actions for recovery of damages from costs of repair or replacement of defective products, adequate value, consequential loss of profits, delay damages, and claims for differing site conditions are all considered purely economic and therefore are subject to the bar of the Doctrine. Alloway v. General Marine Insurance, 149 N.J. 620 at 627 (1997). The personal injury or property damage exclusions to the Economic Loss Doctrine do not appear to be at issue and are consistently applied.

While the second exception for lack of privity or a lack of contract is somewhat blurred, parties to construction projects are free to allocate risk by contract for reasonably foreseeable damages.

 

The Origins of the Economic Loss Doctrine in Commercial Transactions and Subsequent Application to Construction Projects

It is well settled that the Economic Loss Doctrine bars a tort remedy where an action arises from a contractual relationship. New Jersey courts have consistently held that contract law is better suited to resolve disputes which were within the contemplation of, or which could have been the subject of negotiation between parties to an agreement. Spring Motors Distribution v. Ford Motor Company, 98 N.J. 555, 489 A2d 660, 666, 670-71 (1985); Alloway v. General Marine Indus., 149 N.J. 620, 695 A.2d 264, 268, 275 (1997); Dean v. Barrett Homes, Inc., 406 N.J. Super. 453, 968 A.2d 192, 203-04 (App. Div. 2009); Menorah Chapels at Milburn v. Needle, 386 N.J. Super.100, 899 A.2d 316, 323-35 (App. Div. 2006).

In Spring Motors Distribution v. Ford Motor Company, 98 N.J. 555 (1985), the New Jersey Supreme Court considered whether a commercial buyer should be permitted to pursue a cause of action predicated upon principles of negligence and strict liability, solely for economic loss caused by the purchase of defective goods, or should instead be restricted to a cause of action under the Uniform Commercial Code. Id. at 560. The court held that “a commercial buyer seeking damages for economic loss resulting from the purchase of defective goods may recover from an immediate seller and a remote supplier in a distributive chain for breach of warranty under the UCC, but not in strict liability or negligence.” Id. at 561. Critical to the Doctrine was the Court’s rationale highlighting the distinctions between tort and contract duties and principles:

  • The purpose of a tort duty of care is to protect society’s interest in freedom from harm, i.e., the duty arises from policy considerations formed without reference to any agreement between the parties. A contractual duty, by comparison, arises from society’s interest in the performance of promises. Generally speaking, tort principles, such as negligence, are better suited for resolving claims involving unanticipated physical injury, particularly those arising out of an accident. Contract principles, on the other hand, are generally more appropriate for determining claims for consequential damage that the parties have, or could have, addressed in their agreement. [Id. at 579-80.]

Several years later, in Alloway v. General Marine Indus., 149 N.J. 620, 695 A.2d 264 (1997), where a purchaser of a boat sought to recover for economic losses from both the dealer and the manufacturer, the Court expanded upon the principles in Spring Motors, plainly disfavoring the application of tort law in what is an otherwise clearly contractual context. The Court in Alloway concluded that the purchaser’s tort claims were barred by the Economic Loss Doctrine, and noted that: “[i]mplicit in the distinction” between tort and contract principles “is the Doctrine that a tort duty of care protects against the risk of accidental harm and a contractual duty preserves the satisfaction of consensual obligations”. [Id. at 268]

Our Supreme Court has explained that, “economic loss encompasses actions for the recovery of damages for costs of repair, replacement of defective goods, inadequate value, and consequential loss of profits.” Alloway v. Gen. Marine Indus., 149 N.J. 620, 627 (1997). In Saltiel v. GSI Consultants, Inc., 170 N.J. 297 (2002), the Supreme Court emphasized that economic losses have no place in tort, because, “generally speaking, there is no general duty to exercise reasonable care to avoid intangible economic loss or losses to others that do not arise from tangible physical harm to persons and tangible things.” Saltiel at 310, quoting Prosser & Keeton

The Doctrine enunciated in Spring Motors and Alloway has been specifically applied to transactions involving construction and design. In New Mea Construction Corp. v. Harper, 203 N.J. Super. 486 (App. Div. 1985), a builder sued a homeowner alleging that sums were due and owing for the construction of a single-family residence. Id. at 489. The homeowner’s counterclaims for negligent supervision and negligent workmanship were dismissed because there was no personal injury or consequential property damages suffered. Id.

In Dean v. Barrett Homes, Inc., 204 N.J. 286 (2010) the Court summarized the history of the Economic Loss Doctrine in New Jersey, and discussed its application in determining whether a claim sounds in tort or contract. The Dean court affirmed the principles outlined in Spring Motors, namely that, “when addressing economic losses in commercial transactions, contract theories were better suited than were tort-based principles of strict liability”. Id. at 296.

These principles were reiterated in Spectraserve, Inc. v. The Middlesex County Utilities Auth., et al., 2013 N.J. Super. Unpub. LEXIS 2173, (Law Div. 2013), which held that the Economic Loss Doctrine barred a plaintiff’s negligence claim, finding that the plaintiff could have invoked remedies by virtue of its contract with another party in the case. Spectraserve outlined the particular policies underpinning the Economic Loss Doctrine which apply in litigation of construction disputes:

  • In the context of larger construction projects, multiple parties are often involved. These parties typically rely on a network of contracts to allocate their risks, duties, and remedies. Construction projects are multiparty transactions, but it is rarely the case that all or most of the parties involved in the project will be parties to the same document or documents. In fact, most construction transactions are documented in a series of two-party contracts, such as owner/architect, owner/contractor, and contractor/subcontractor. Nevertheless, the conduct of most construction projects contemplates a complex set of interrelationships, and respective rights and obligations. [Spectraserve, at *26-27]

In Horizon Group of New England, Inc. v. New Jersey Schools Construction Corp., et al., 2011 N.J. Super. Unpub. LEXIS 2271 (App. Div. 2011), the court was faced with extra work and differing site conditions claims. The Horizon Group court held that:

  • [A] plaintiff with a direct contractual relationship [and] with contractual remedies to address changes in the scope of work or unexpected conditions [cannot] jettison these remedies and procedures and proceed on a tort theory of recovery. Id. at 20.

The court affirmed that the Economic Loss Doctrine “bars resort to tort theories of liability when the relationship between the parties is based on a contractual relationship”. Id. at 13, citing Dean v. Barrett Homes. Inc.

As stated above, New Jersey law has long recognized that purely economic loss, if reasonably foreseeable, is recoverable against the party in the absence of contractual privity. Conforti & Eisele, Inc. v. John C. Morris Associates, 175 N.J. Super. 341 (Ch. Div. 1980) aff’d 199 N.J. Super. 498 (App. Div. 1985), and People Express Airlines, Inc. v. Consolidated Rail Corp., 100 N.J. 246 (1985).

In Conforti, the Superior Court held that a design professional was chargeable in tort to a contractor who has sustained purely economic damages as a result of the negligence of the design professional in the absence of privity of contract between the two entities. Conforti, at 344. The court held that denying the contractor the ability to bring a tort claim under these circumstances, “would in effect, be condoning a design professional’s right to do his job negligently or with impunity as far as innocent third parties who suffer economic loss. Public policy dictates that this should not be the law. Design professionals, as are other professionals, should be held to a higher standard”. Id.

In People Express, a commercial airline brought an action in tort against a railroad for economic damages it suffered due to the evacuation of its offices following a fire. People Express, at 249. The railroad moved for summary judgment arguing that the airlines purely economic losses were not recoverable. The Supreme Court of New Jersey denied the railroad’s motion characterizing the “per se” rule against recovery in tort for economic losses as “hopelessly artificial”. Id. at 261. The Court held that, “when the plaintiffs are reasonably foreseeable, the injuries directly and proximately caused by defendants’ negligence, and liability can be limited fairly, courts have endeavored to create exceptions to allow recovery”. Id. Notwithstanding the decisions in Conforti and People Express, many advocates on behalf of defendants seek application of the per se rule barring recovery of economic damages in tort in the form of the Economic Loss Doctrine. However, it has been observed that the Economic Loss Doctrine operates to bar tort claims only where plaintiff seeks to enhance the benefit of the bargain she contracted for”. Saltiel v. GSI Consultants, Inc., 170 N.J. 297 (2002). In Saltiel, claims of negligent design and misrepresentation by a landscape architect against the turf grass corporation were dismissed as the landscape architect’s claim for economic damages essentially involved a breach of contract claim arising from a contract between the parties. Thus, it is clear where a contract between the parties exists, the New Jersey Supreme Court has concluded that claims should sound in breach of contract rather than in negligence because the Economic Loss Doctrine helps to maintain the “distinctions between tort and contract actions” by precluding the parties’ “negligence action in addition to a contract action unless the plaintiff can establish an independent duty of care. Saltiel, at 310.

The case of SRC Construction Corp. of Monroe v. Atlantic City Housing Authority, 935 F.Supp.2d 796 (D.N.J. 2013) stands for the proposition that the Doctrine does not bar a plaintiff from asserting a tort claim for economic damages against the defendant with whom it does not have a contract. In SRC Construction, the contractor, SRC which was involved in the construction of an assisted living facility sued the owner for breach of contract for unjust enrichment and wrongful termination of the contract and conversion. In a separate action, SRC sued the architect on a project with whom SRC did not have a contract. The architect moved for summary judgment seeking protection under the Economic Loss Doctrine.

The United States District Court Judge disagreed and analyzed the decision of the Superior Court of New Jersey, Giuliano v. Gastone, 187 N.J. Super. 491 (App. Div. 1982) where the Appellate Division refused to apply the Doctrine to the plaintiff homeowners “negligence claims against the subcontractors who participated in the construction of their home.” In Giuliano, just like in SRC, there was no contract between the parties. Thus, the Giuliano court ruled that the negligence claims were not barred.

The SRC Construction court distinguished the two unreported decisions, Horizon Group of New England, supra and Spectraserve, supra observing that, “in both cases, the courts held that the Economic Loss Doctrine barred the plaintiff’s negligence claim even in the absence of a direct, contractual relationship between the plaintiff and defendants. Moreover, both courts’ decision seemed to turn on the finding that the plaintiffs could have invoked contractual remedies in their contract with another defendant in the case”. SRC Construction, at 800 (citations omitted).

The SRC court stated as follows:

  • “Horizon and Spectraserve, cannot be reconciled with Giuliano. Not only could the Giulianos have sued the homebuilder with whom they had a direct contract, they did sue the homebuilder in a separate suit and obtained a judgment. (citation omitted).

The SRC Construction court attempted to reconcile the tension between lack of privity cases, lack of contract cases and lack of available other remedies as follows:

  • Leaving open an avenue of redress because no other exists is one thing but foreclosing an avenue of redress simply because another exists is quite another. … the reason for foreclosing a tort claim is not simply because a contract claim exists, but rather that the tort claim is not really a tort claim at all; it is a contract claim in tort claim clothing. … but whether there is no direct contractual relationship between the plaintiff and the defendant, frequently there can be no contract claim at all and therefore any tort claim asserted cannot possibly be a contract claim in tort clothing. SRC, at 801.

The SRC Construction court’s analysis was followed in Bedwell Co. v. Camden County Improvement Authority, Civ. A.14-1531 JEI, 2014 WL 3499581 (DNJ 2014). The Bedwell court held that a general contractor’s claim for negligent misrepresentation against an architect alleging that the architect provided defective designs was not barred under the Economic Loss Doctrine because there was no contract between the parties. The Bedwell court further recognized that even though there were third party agreements between (1) the general contractor and the owner and, (2) the owner and the architect, the third party agreements had no effect on the law on the ability to bring a tort claim because “a contract cannot define the legal obligation between two entities unless those two entities are party to the contract *3. Therefore, it may be that New Jersey is backing off from the per se application of the Economic Loss Doctrine.

Conclusion

Where a contract exists between the parties there is agreement that the Doctrine would bar tort claims. Where there is another party involved in a construction team with whom the plaintiff has a contract and thus another remedy is available seems to imply that tort claims will not survive the ambit of the Doctrine. It is only where there is no contract between the parties and there is no other available means of redress for the plaintiff that the tort claims will survive the application of the Doctrine. Nevertheless, plaintiff practitioners should be wary of the potential filing of dispositive Economic Loss Doctrine motions by defendants with whom no contract exists.

Paul A. Sandars, III is a Member of the Firm of Lum, Drasco & Positan LLC and practices in the Firm’s Litigation Group.

Executive Orders 242 and 243: New Jersey

EXECUTIVE ORDERS 242 AND 243: NEW JERSEY LIFTS OR MODIFIES CERTAIN COVID-19 RESTRICTIONS IN INDOOR PUBLIC SPACES AND WORKPLACES

By: Elizabeth Y. Moon

Governor Murphy signed Executive Order No. 242 on May 24, 2021, and Executive Order243 on May 26, 2021, as part of New Jersey’s “multistage Road Back Plan for the methodical and strategic reopening of businesses and activities” based on the progress made within the state against the COVID-19 pandemic. A series of prior Executive Orders have recently allowed for thelifting of restrictions regarding masking and distancing in outdoor settings, and the lifting of restrictions on indoor and outdoor gathering limits in food and beverage establishments and other entertainment facilities. Executive Order 242 has now lifted masking and spacing restrictions for “indoor public spaces” that are open to the public “for purposes of the sale of goods, attendance atan event or activity, or provision of services” as of May 28, 2021.

In Executive Order 243, Governor Murphy has clarified his prior Order on “indoor publicspaces” and similarly lifted COVID-19 restrictions in certain circumstances for workplaces and businesses that are generally closed to the public and have limited visitors. More specifically, employers are advised of the following pursuant to Executive Order 243, which becomes effectiveJune 4, 2021:

● Paragraphs 10 and 11 of Executive Order 107 — which stated that all businesses or non-profits whether closed or open to the public, must accommodate their workforce for telework or work-from-home arrangements — have been rescinded, and employers are no longer required to permit employees to work remotely as was done during the pandemic;

● Employees who are fully vaccinated against COVID-19 (the CDC considers an individual to be fully vaccinated 2 weeks after their second dose in a two-dose series, or 2 weeks after a single-dose vaccine), and provide their employer with proof of their full vaccination status (completed vaccination card), are not requiredto wear face masks or social distance at the worksite;

● Where an employer is unable to determine an employee’s vaccination status, or the employee is not fully vaccinated, “employers must continue to require those employees to wear masks and practice social distancing” in the workplace, except when the employee is in their own office or work station;

● Employers are permitted to allow customers, visitors and other authorized individuals to enter the worksite without requiring the use of a mask or adherence to social distancing, regardless of their vaccination status;

● Regarding customers, visitors and other authorized individuals entering the worksite, employers have the option of establishing a policy that requires such individuals to wear a mask and/or social distance, provided that such policy on mask wearing complies with federal and state law regarding accommodations in the event of a disability that makes the individual unable to wear a mask.

Executive Order 243 also emphasizes the following points:

● An employer may impose stricter requirements regarding mask wearing and social distancing in indoor settings (consistent with federal and state law on accommodations in the event of a disability that makes an employee /individual unable to wear a mask);

● Employers cannot restrict employees, customers, visitors or other authorized individuals from wearing masks in the workplace setting for any reason;

● Employees, customers, visitors and other authorized individuals in the workplace shallnot in any way be penalized or retaliated against if they elect to wear a mask;

● Other health and safety standards applicable to all New Jersey employers as set forth in Executive Order No. 192, have not been superseded by Executive Order 243 and remain in full force and effect, including:

  • Employers must take measures to ensure a “health screening” of employees on a regular basis, with such measures consisting of either: (1) temperature screenings, (2) visual symptom checking, (3) self-assessment checklists, and/or (4) health questionnaires;
  • Employers must notify all employees if there is a known exposure to COVID19 in the workplace, consistent with employee confidentiality requirements under the Americans with Disabilities Act, and federal and state guidance;
  • Employers must provide all employees, visitors, customers, and any other individuals who access to the work location, with access to sanitizing materials, at the employer’s expense;
  • Employers must ensure high-access areas in the work location are routinely cleaned and disinfected, and provide all employees with break time throughout the day to wash their hands (unless gloves are provided to the employees);
  • Penalties may be assessed for violations of the health and safety standards in Executive Order 192 which remain in effect.

Executive Order 242 further notes that its lifting of mask-wearing and social distancing restrictions in “indoor public places” do not include child care centers, other child care facilities, youth summer camps, and public, private and parochial preschool program premises and elementary and secondary schools, including charter and renaissance schools, which continue to be governed by applicable standards issued by the Department of Health.

Employers are encouraged to consider how these new standards will be implemented and communicated to employees, customers, visitors and authorized individuals entering the workplace. The Firm is available to assist in this regard and further address any questions or concerns regarding the new Executive Orders as employers continue to engage in the workplace reopening process.

To discuss any of this please contact one of the employment attorneys below:

Corporate Transparency Update Summer 2021

CORPORATE TRANSPARENCY UPDATE: July 2021

By: Steven J. Eisenstein, Esq.

On January 1, 2021 Congress enacted the National Defense Authorization Act overriding a Presidential veto. As part of this new law the Corporate Transparency Act was put into place. The CTA had failed several previous attempts at passage but as part of the annual Defense bill passage was assured. Ostensibly the rationale for including it was to ensure that foreign companies do not become unseen participants in our national defense. Whatever the rationale the law now exists and business owners must learn to deal with it.

Basically the CTA requires certain business to report the identity of their beneficial owners to the Financial Crimes Enforcement Network, a part of the Treasury Department. While there are still many open questions a brief examination of these three components seems to be in order.

Steven J. Eisenstein, Esq.

What are the “Reporting Companies” which have these obligations? Any corporation, limited liability company or similar entity which is formed or registered to do business by the filing of a formation document with a state must comply unless they fall within one of 24 exceptions. Among the exceptions are publicly traded companies, public utilities, financial services companies and companies which employ 20 or more people in the U.S., filed a tax return in the prior year reporting at least $5,000,000 in gross revenue and have a physical presence in the United States. Since newly formed companies will not have filed a tax return yet is appears to be the intent of the law to require all newly formed private companies to supply the information.

Who is a beneficial owner? An individual who, directly or indirectly, either owns 25% or more of the equity of the company or exercises substantial control, an undefined term. Minors are not included nor are people who acquire their equity through inheritance. There will doubtless be substantial confusion over the issue of control but even the seemingly fixed standard of 25% equity may be in doubt when issues like options and warrants are considered. Close attention should be paid to further developments in this area.

What information needs to be reported? FINCEN is to receive the full legal name of each Beneficial Owner, the date of birth, the current business or residence street address and an ID number from a Governmental document such as a driver’s license or passport. A person who files the application for the formation may obtain a FINCEN ID number and that ID number may be supplied in lieu of anything else. The information is to be kept confidential by FINCEN but may be released to other Federal agencies in law enforcement, national security or intelligence, to local and state agencies pursuant to a court order or to financial institutions with the consent of the companies.

When will reporting begin? New companies must file reports upon formation or registration to do business. Existing companies have two years to file after the effective date of the anticipated regulations. Regulations have not yet been drafted and all reporting requirements are suspended until they are passed. The reported information will need to be kept current and changes reported within one year of the change.

Are penalties involved? Do you need to ask? Failure to comply may result in both civil and criminal penalties. Fines of up to $500 for each day of violation are possible and prison sentences of up to 2 years may be imposed. Criminal penalties for unauthorized disclosure or use of the violation can result in up to 5 years imprisonment and substantial fines.

Until regulations are drafted there is much that remains unknown. The issue of substantial control will be of great interest in the regulations. This will prove to be of interest to creditors who may be covered if they meet the definition of Beneficial Owner upon foreclosure of security interests. Anyone seeking to form a new company is advised to seek competent advice before doing so as getting it wrong can have serious consequences.

The Business Law Section of Lum, Drasco & Positan stands ready to assist. For more information please contact Steven J. Eisenstein,  Kevin Murphy

Firm News Summer 2022

Firm News: Summer 2022

The Firm is pleased to announce that the following attorneys have been named to the 2022 New Jersey Super Lawyers list. These selections were based on a statewide survey, an evaluation process and a peer review by a blue ribbon panel of attorneys. The methodology for selection can be found at http://www.superlawyers.com/. (No aspect of this advertisement has been approved by the Supreme Court of New Jersey).

• Dennis J. Drasco for Business Litigation (Top 100 Lawyers)

• Wayne J. Positan for Employment and Labor (Top 100 Lawyers)

• Paul A. Sandars, III for Construction Litigation

• Kevin F. Murphy for Estate Planning and Probate (10th year)

• Kevin J. O’Connor for Business Litigation

• Daniel M. Santarsiero for Employment and Labor

PAUL A. SANDARS, III: Presented a lecture on the Economic Loss Doctrine at the New Jersey State Bar Construction Law Forum in June 2021.

KEVIN J. O’CONNOR: Has been appointed counsel to the Board of Trustees of Foundabilities, Inc., a charitable organization providing adults with disabilities a safe, secure and supportive environment that will promote a sense of self-worth and acceptance in the local community. This will be accomplished through social interaction, supervised events, and services through volunteer efforts.

Mandatory COBRA Subsidy for Certain Eligible Employees

Mandatory COBRA Subsidy For Certain Eligible Employees Under the American Rescue Plan Act of 2021

By:  Elizabeth Y. Moon

The American Rescue Plan Act (ARPA), which is part of President Biden’s COVID-19 relief
package recently signed into law, requires employers to subsidize the cost of COBRA coverage premiums from April 1, 2021, through September 30, 2021, for employees who lost health care coverage due to involuntary termination of employment through layoff or reduction of work hours. In exchange for providing this subsidy, employers will be reimbursed in the full amount of the covered subsidy or subsidies through a tax credit. Employers should be aware of this new subsidy requirement as well as required model notices just issued by the U.S. Department of Labor which must be provided to eligible employees.

Some key points for employers regarding the COBRA subsidy are as follows

Covered plans – The ARPA COBRA subsidy applies to any group health plan subject to the federal COBRA or state “mini COBRA” rules. The subsidy is not applicable to a health flexible spending account.

Covered individuals – The ARPA COBRA subsidy is available to individuals who lose or have lost health insurance coverage due to a layoff or involuntary termination of employment or reduction of hours and elect COBRA continuation coverage (“Assistance Eligible Individuals”). Assistance eligible individuals include the spouse and eligible dependent children of the affected employee. Individuals who lose coverage due to termination for gross misconduct, or through retirement or resignation or other voluntary reasons, are not eligible for the subsidy.

The subsidy will be available to individuals who:

(i) Have COBRA coverage as of April 1, 2021;
(ii) Experienced a covered qualifying event between April 1, 2021 and September 30, 2021; and
(iii) Declined COBRA coverage or let coverage lapse but whose maximum period of COBRA coverage due to a covered qualifying event has not expired as of April 1, 2021.

Covered period – An individual’s subsidy period begins April 1, 2021 and will end on September 30, 2021, unless the individual reaches the end of their 18-month COBRA coverage period, or becomes eligible for another group health plan or Medicare, before that date. A covered individual who becomes eligible for other coverage during the subsidy period must notify their employer or plan of such eligibility, or face penalties for not doing so.

Subsidy amount – The subsidy covers 100% of the COBRA premium during the covered subsidy period of April 1, 2021 through September 30, 2021. The subsidy amount is not taxable income to the individual. If a COBRA premium for a period of subsidized coverage is paid by the eligible individual, they must be reimbursed for their paid premium within 60 days after the date the premium payment was made.

Employer tax credit for subsidy – The IRS is expected to issue further guidance on the employer tax credit for the COBRA subsidy, but generally employers will be reimbursed for the full cost of the subsidized COBRA premiums through a tax credit. To ensure maintenance of coverage, employers bear the responsibility for paying health insurance carriers for the COBRA premiums or ensuring that premiums are credited to self-funded plans.

Lower-cost plan option – An employer may (but is not required to) allow an eligible individual to elect different coverage if the COBRA premium for that coverage costs the same or is less than the COBRA premium charged for the coverage in effect for the individual at the time of their qualifying event. The lower-cost option must be one that is offered to similarly be situated active employees and may not be an excepted benefit, a qualified small employer health reimbursement arrangement, or a health flexible spending account.

MODEL NOTICES FOR EMPLOYEES

Employers may review information and frequently asked questions related to the COBRA subsidy, and obtain required Model Notices to be provided to eligible employees, at the U.S. Department of Labor’s website at: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy 

The required Model Notices are:

● General Notice and Election Form for Newly Eligible Individuals: This Notice (along with the Summary of COBRA Premium Assistance Provisions) should be provided to eligible individuals who become entitled to COBRA between April 1 and September 30 notifying them of their eligibility for the subsidy and any applicable lower-cost plan option. A Model Alternative Notice also exists for small employer plans subject to state mini-COBRA laws.

● Notice and Election Form for Eligible Individuals Whose Qualifying Event Occurred Before April 1, 2021: This Notice (along with the Summary of COBRA Premium Assistance Provisions) should be provided to eligible individuals who previously elected COBRA coverage, as well as eligible individuals who declined COBRA coverage or who let COBRA coverage lapse. This notice also should include an election form for individuals that did not elect COBRA coverage or dropped COBRA coverage to allow them to elect subsidized coverage. Also, if the employer decides to allow a change in health plan coverage, a description of any applicable lower-cost plan option and related election form should be included. This Notice must be provided no later than May 31, 2021.

● Summary of COBRA Premium Assistance Provisions under the ARPA and Request for Treatment as an Assistance Eligible Individual: The Summary must be provided along with the first two Notices listed above. Included in the Summary is a “Request for Treatment as an Assistance Eligible Individual” which must be completed and returned by any eligible individual who wants to receive the COBRA subsidy, within 60 days of their receipt of the summary notice.

● Notice of Expiration of Premium Assistance: Notice of the date of expiration of the subsidy period and of other available coverage under unsubsidized COBRA must be provided to any eligible individual who elects the COBRA subsidy. This Notice must be sent between August 16, 2021 and September 15, 2021. Employers should review whether any of their employees from March 30, 2020 forward lost their health care coverage due to reduction in work hours or involuntary termination of employment due to layoff, to determine whether they are subject to ARPA’s COBRA subsidy and model notice requirements. This review time period incorporates the maximum 18-month COBRA continuation coverage period that includes the subsidy period of April 1, 2021 through September 30, 2021. Employers are also encouraged to communicate with their COBRA and plan administrators or insurers to make sure that all of the required notices are sent to eligible individuals as applicable.

Attorneys Named to 2021 NJ Super Lawyers List

Lum, Drasco & Positan Attorneys Named to the 2021 NJ Super Lawyers List and One Named to the Rising Stars List

These selections were based on a statewide survey, an evaluation process and a peer review by a blue ribbon panel of attorneys. The methodology for selection can be found at http://www.superlawyers.com/. (No aspect of this advertisement has been approved by the Supreme Court of New Jersey).

Dennis J. Drasco for Business Litigation (Top 100 Lawyers)

Wayne J. Positan for Employment and Labor (Top 100 Lawyers)

Paul A. Sandars, III for Construction Litigation

Kevin F. Murphy for Estate Planning and Probate (10th year)

Daniel M. Santarsiero for Employment and Labor

Best Lawyers in America 2022

Eleven Lum, Drasco & Positan LLC Attorneys Included in The Best Lawyers in America© 2022

Since it was first published in 1983, Best Lawyers ® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Almost 108,000 industry leading lawyers are eligible to vote (from around the world), and we have received over 13 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2021 Edition of The Best Lawyers in America©, 9.4 million votes were analyzed, which resulted in more than 67,000 leading lawyers being included in the new edition. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor.  (No aspect of this advertisement has been approved by the Supreme Court of New Jersey)

Dennis J. Drasco (2001), was named in the fields of Appellate Practice, Arbitration, Commercial Litigation, Construction Law, LitigationConstruction, Litigation – Insurance, Litigation – Real Estate, Litigation – Trusts and Estates.

Wayne J. Positan (1993), was named in the fields of Appellate Practice, Arbitration, Commercial Litigation, Employment Law – Management, Labor
Law – Management, Litigation – Labor and Employment. Wayne Positan has over forty years of experience representing management and defendants in labor and employment matters, including discrimination, whistleblower, and noncompete litigation, as well as traditional labor practice in the private and public sectors.

Paul A. Sandars III (2005), who was named in the fields of Commercial Litigation, Construction Law, Litigation – Construction, is a member of the firm. He concentrates his practice in complex commercial litigation as well as construction law and litigation. He is a frequent lecturer on construction law issues, and has been certified as an American Arbitration Association Construction Arbitrator.

Kevin J. O’Connor (2015), who was named in the field of Commercial Litigation, concentrates his practice in the area of civil litigation with a focus on commercial litigation, insurance law, eminent domain, land use law, and life, health, and disability insurance law.

Gina M. Sorge (2019), who was named in the field of Family Law, has been certified as a Matrimonial Law Attorney by the New Jersey Supreme Court since 2013. She presently serves as a Bergen, Essex and Morris County Family Court appointed Early Settlement Panelist. Bernadette Hamilton Condon (2015), who was named in the fields of Construction Law, Litigation – Construction, is a member of the firm’s litigation department. She concentrates her practice in commercial and business litigation. Bernadette handles a wide variety of contract, construction and shareholder disputes. She also has extensive experience representing condominium and homeowners’ associations in transition litigation and general governance matters.

Daniel M. Santarsiero (2016), who was named in the fields of Employment Law – Management, Labor Law – Management, represents management and individuals in defense litigation and counseling in connection with various labor and employment matters including discrimination claims, harassment claims, whistleblower, public policy claims as well as wage and hour claims and collective bargaining. Daniel also provides counseling in connection with various employment disputes including employee grievances other workplace issue in both the private and public sector.

Jack P. Baron (2021), who was named in the field of Corporate Law, is a member of the firm, concentrating his practice in commercial transactions, including acquisitions, sales and reorganizations of businesses; commercial real estate matters, and asset based financing. In addition to counseling clients in business matters, Jack has an in depth knowledge of estate and trust law, and assists his clients in estate and succession planning.

Scott E. Reiser (2015), who was named in the field of Commercial Litigation, litigates a broad array of commercial disputes, business ownership matters, various commercial cases, and estate and trust matters.

Richard C. Camp (2019), who was named “Lawyer of the Year” in the field of Family Law Arbitration and further named as a Best Lawyer in the fields of Family Law Arbitration, Family Law Mediation, Mediation, is a retired Superior Court judge. He handles both family and civil cases and serves as a Discovery Master in complex matters.

Elizabeth Moon (2016), who was named in the field of Employment Law – Management, represents employers and individuals in litigation against claims of discrimination, retaliation, harassment, breach of contract, defamation, and other employment-related claims in cases alleging violations of federal laws including Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act as well as violations of state laws including the New Jersey Law Against Discrimination, the New Jersey Conscientious Employee Protection Act, and the New Jersey Family Leave Act. Ms. Moon also defends governmental entities and their employees against claims arising under the New Jersey Tort Claims Act, the New Jersey Civil Rights Act, and 42 U.S.C. § 1983.

Cynthia A. Matheke (2003), who was named in the fields of Personal Injury Litigation – Defendants, Personal Injury Litigation – Plaintiffs, is concentrating on both office and hospital based cases of negligence and malpractice, including ancillary departments of pathology, nursing, pharmacy, and radiological imaging. She has expanded her practice to include cases of nursing home neglect.