Sterns & Weinroth - Attorneys at Law - Trenton, New Jersey

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WINDOW OF OPPORTUNITY EXISTS TO OBTAIN SEWER EXTENSION APPROVALS FROM NJDEP BEFORE THE DEPARTMENT WITHDRAWS SEWER SERVICE AREA DESIGNATIONS.

To read this Alert in its entirety, please click here. For more information, contact Frank Petrino at 609.989.5047, or fpetrino@sternslaw.com.

Insurance Alert: Appellate Division Holds that a Passenger Injured in a Vehicle Covered by a “Special Policy” is Uninsured and Orders the UCJF to Provide Non-emergency PIP Benefits.

In the June 19, 2008 decision in Sanders v. Langemeier, et al., the Appellate Division rejected the arguments of the New Jersey Property-Liability Insurance Guaranty Association (“PLIGA”), administrator of the Unsatisfied Claim and Judgment Fund (“UCJF” or “Fund”), and held that an injured passenger of a driver covered by a special policy pursuant to N.J.S.A. 39:6A-3.3 is an “uninsured driver” entitled to personal injury protection (“PIP”) benefit payments through the Fund.

To read this Alert in its entirety, please click here. For more information, contact Doreen Piligian at 609.989.5047, or dpiligian@sternslaw.com.

PAID FAMILY LEAVE BILL SIGNED INTO LAW

On May 2, 2008, Governor Jon S. Corzine signed into law a bill which extends the State’s current temporary disability insurance program to provide up to six weeks of paid leave for employees to care for a newborn infant, newly adopted child, or seriously ill immediate family member. The program will be funded through employee payroll deductions and the benefits will be available starting July 2009. As a result, New Jersey has become the third state, behind California and Washington, to offer employees some form of paid family leave.

To read this Alert in its entirety, please click here. For more information, contact Karen A. Confoy at 609.989.5012 or kconfoy@sternslaw.com or Erica S. Helms at 609.989.5062 or ehelms@sternslaw.com.

Sealing Confidential Materials in the District of New Jersey

Until recently, when a federal practitioner in New Jersey wanted to file confidential documents or information under seal, she could properly rely on the procedures agreed upon and included in the case protective order. With the District's adoption of L.Civ.R. 5.3, however, the court clerk will no longer restrict public access to confidential materials unless a motion to seal is filed, and the court enters an order specifically finding ''good cause'' for granting that relief.

Insurance Alert: Legislation Enacted Prohibiting Use of UM/UIM "Step-Down" Provisions in Certain Circumstances

On September 10, 2007, P.L. 2007, c. 163 was signed into law by Governor Corzine to prohibit the use of "step-down" clauses that limit uninsured and underinsured motorists coverage for policies issued to corporate or business entities. The law takes effect immediately.

This amendment to N.J.S.A. 17:28-1.1 is in response to the decision of the New Jersey Supreme Court in Pinto v. New Jersey Manufacturers Ins. Co., 183 N.J. 405 (2005), where the Court affirmed the use of a step-down clause in a commercial auto insurance policy that limited the amount of UM/UIM coverage in an employer's policy to the amount selected by the employee (or the employee's family member) in his or her personal auto policy.

In Pinto, the Court concluded that an employee may obtain UM/UIM coverage in the amounts in his or her employer's commercial auto policy, only if he or she is a "named insured." The Court thus imposed "on insurers, their agents, and brokers, a duty to inform employers about the necessity for such language (i.e., language asserting the employer's intention to have all employees considered named insureds under the policy), so that employers may make informed decisions about whether their employees will have the status of 'named insureds' under the employers' business automobile insurance policies." In prohibiting the use of step-down clauses in these policies, the new law eliminates this duty.

In order to comply with N.J.S.A. 17:28-1.1, as amended, insurers may have to change the language of their commercial auto policies as well as how they handle UM/UIM claims. The new law also may impact commercial auto insurance rates.

For more information, please contact Susan Stryker at 609.989.5035, or sstryker@sternslaw.com, or Doreen J. Piligian at 609.989.5047, or dpiligian@sternslaw.com.

Unemployment Compensation Benefits No Longer Available for Employees who Voluntarily Leave Their Employment to Participate in Buyout Plans

On August 1, 2007, the Superior Court of New Jersey, Appellate Division, invalidated a New Jersey Department of Labor regulation, which had provided that employees who voluntarily leave their employment to participate in ''a written voluntary layoff and/or early retirement incentive policy or program'' were also qualified to receive unemployment compensation benefits. The Appellate Division found that the regulation contravened legislative policies underlying the Unemployment Compensation Act (Act), and was inconsistent with the Supreme Court's interpretation of the Act.

Minimum Retail Price Restraints No Longer Per Se Illegal

The United States Supreme Court recently granted manufacturers the ability to set and enforce minimum retail prices in order to take advantage of pro-competitive benefits that such vertical restraints may produce. On June 28, 2007, the Court decided Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S __ (2007), and overturned almost century-old precedent that agreements with retailers to set minimum retail prices are per se illegal under Section 1 of the Sherman Antitrust Act. The Court determined that hereafter such vertical price restraints will be judged by the "rule of reason," which requires a court to weigh all of the relevant circumstances, including specific information about the relevant business and the restraint's nature, history and effect, in order to distinguish between restraints with anticompetitive effects that are harmful to the consumer and restraints with procompetitive effects that are in the consumer's best interest.

To read this Alert in its entirety, please click here. For more information, contact Vincent J. Paluzzi at 609.989.5033, or vpaluzzi@sternslaw.com.

Appellate Division Holds That DEP is Entitled to Seek Damages for Loss of Use of Natural Resources Under the Spill Act

In New Jersey Department of Environmental Protection v. Exxon Mobil Corp., the Appellate Division recently considered whether an entity may be strictly liable under the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq., for damages for the loss of use of natural resources affected by the entity's discharge of hazardous substances. In this case of first impression, the court ruled that the DEP's claim for ''compensatory restoration,'' or loss of use damages, is consistent with the Spill Act's express terms, is harmonious with legislative intent, and is in keeping with legislative directives articulated in recent amendments to the Spill Act.

To read this Alert in its entirety, please click here. For more information, contact Jennifer L. Cordes at 609.989.5027, or jcordes@sternslaw.com.

Recent Amendments to Federal Age Discrimination Regulations

On July 6, 2007, the Equal Employment Opportunity Commission (EEOC) published a final rule that amends the Age Discrimination in Employment Act (ADEA) regulations, in order to conform the regulations to the Supreme Court's decision in General Dynamics Land Systems, Inc. v. Cline, 540 U.S. 581 (2004). The amended regulations clarify that employers are not prohibited from making age-based employment decisions that favor older employees over younger employees, when both groups are protected under the ADEA.

The ADEA protects individuals who are 40 years of age or older from discrimination with respect to any term, condition or privilege of employment, based upon an individual's age. The ADEA applies to private employers with 20 or more employees, as well as state governments, employment agencies and labor organizations.

In Cline, a group of employees between the ages of 40 and 49 initiated a lawsuit against their employer under the ADEA, alleging that the employer's elimination of retiree health benefits for any employee under 50 years of age impermissibly discriminated against younger workers. The Supreme Court rejected the employees' claim, finding that the ADEA's prohibition against age discrimination only prevents discrimination that favors younger workers, not actions that effectively place older workers in a more favorable position. Thus, the Court held that ''reverse discrimination'' claims, of the type advanced by the employees, do not fall within the regulatory purview of the ADEA. Writing for the Court, Justice Souter reasoned, ''the 40-year threshold makes sense as identifying a class requiring protection against preference for their juniors, not as defining a class that might be threatened by favoritism toward seniors.''

Prior to the recent amendment, the regulations prohibited age-based discrimination against employees 40 years of age or older, regardless of whether the employment action favored older or younger employees within the protected group.

The revised regulations no longer proscribe workplace discrimination against relatively younger employees within the protected 40 years and older age group, and they expressly clarify that employers are not prohibited under the ADEA from favoring relatively older employees over younger ones, when both groups of employees are protected by the ADEA. Proponents of the revised regulations believe that employers confronted with an aging workforce now have greater flexibility and freedom to make employment-related decisions. The revised regulations can be found at the EEOC's website at: http://edocket.access.gpo.gov/2007/E7-13051.htm.

If you would like more information concerning the recent amendments to the Federal Age Discrimination Regulations, or have any other questions about this Employment Law Alert, please contact Karen A. Confoy at 609.989.5012 or kconfoy@sternslaw.com or Erica S. Helms at 609.989.5062 or ehelms@sternslaw.com.

Identity Theft Prevention Regulations

New Jersey's Identity Theft Prevention Act (ITPA) was signed into law on September 22, 2005. The law is an important tool to give consumers better protections against identity theft and establish stronger safeguards for personal data. Despite the comprehensive nature of the ITPA, the Division of Consumer Affairs proposed regulations on April 16, 2007, purportedly to flesh out certain provisions of the act. See 39 N.J.R. 1397. However, the new regulations go well beyond the legislative intent and create an invasive and unworkable regulatory framework. Unlike the ITPA, the Division's regulations were developed without consultation with the business community and, as a result, vary greatly with what the Legislature intended.

The ITPA applies to all New Jersey businesses and public entities that possess records with New Jersey residents' personal information. Insurance companies, administrative services providers, insurance producers, banks, lenders, mortgage companies and brokers, and hospitals are among the businesses likely to be most affected by the law and the proposed implementing regulations. The regulations will also impose significant costs on state and local governments.

The regulations deviate from the Act in a number of important ways:

Security Breach Disclosure: Within six hours of a breach, the regulations require every business and public entity to disclose to the Division of State Police any breach of security to computerized records. The six hour limitation is inconsistent with the ITPA's requirement that gives the business or public entity a reasonable amount of time, depending on the circumstances, to investigate the nature and extent of the breach and to determine, before reporting to the State Police, whether there is a potential for misuse of the information once a breach of security has been detected.

The regulations also require every business or public entity to notify consumers of a breach within 24 hours of notice by the Division of State Police that the notification will not hamper an investigation. This time limitation also exceeds the Act's legislative intent, which requires an entity to notify its customer of a breach in the most expedient time possible and without unreasonable delay. This time frame is unnecessarily restrictive, as a flexible timeframe is crucial depending on the extent of the breach. Further, the law already provides penalties for entities that fail to notify affected customers at the earliest possible time.

In addition, after a security breach a business or public entity that finds there is the potential for the misuse of personal information must give notice to affected individuals both by written notice and posting on the entity's website. The dual notification requirement goes beyond the scope of the statute, which provides that written notice is sufficient. Requiring entities to notify customers when there is only a chance that a security breach has occurred may also result in unnecessary panic, which will lead countless consumers to needlessly freeze their credit.

Computer Security Systems: Businesses should be most concerned that the proposed regulations contain specific and highly technical computer security system requirements that would impose a one-size fits all security scheme with which compliance would be virtually impossible for any business or government entity, large or small. In fact, the requirements are so detailed that they provide a virtual roadmap for hackers to invade computer systems, resulting in exactly the opposite as what was intended. With ever-changing standards for computer security, it is likely these regulations will be outdated before they are even adopted. Further, there is absolutely no statutory support for requiring businesses and public entities to comply with these requirements, and the provision is beyond the scope of the authorizing legislation.

Retaining Records of Document Destruction: The regulations require a business or public entity to maintain a written record of all documents containing personal information that have been destroyed, including the types of records destroyed and the manner of destruction, and make such information available for inspection by the Division for a period of at least five years. While the ITPA requires destruction of such documents, it does not contain a time limitation, let alone a five year retention requirement, for information regarding the destruction.

Punishment Under Consumer Fraud Act: The regulations go beyond the legislative intent by also establishing that certain acts are deemed to be knowing, willful or reckless so as to subject a business or public entity to punishment under the Consumer Fraud Act. For instance, an entity would be subject to punishment under the Act for "wrongful use of social security numbers," despite the fact that this phrase is vague and undefined and never mentioned in the enabling ITPA.

On Thursday, May 31, a number of concerned groups met with the Governor's Office to discuss the regulations andthese concerns. Written comments on the regulations must be submitted to the Division of Consumer Affairs by June 15, 2007. Once the comment period is over, the Division will review and respond to comments.

While these regulations may be well intentioned, they go far beyond the scope of the Identity Theft Prevention Act and will increase, rather than lessen, the risk of a security breach. If the regulations are not withdrawn or allowed to expire, pursuing legal action to challenge the Division's authority may be necessary.

As a result, it is important for businesses to voice their objections to these rules during the comment period. It is our hope such comments will provide important information for the Division to consider, and influence the Division to rethink the prudence of the regulations. If you are interested in receiving more information about how these regulations could impact your business or how to provide written comments to the Division, please contact Richard J. VanWagner at 609.989.5042 or rvanwagner@sternslaw.com.

The New Jersey Civil Union Act and the Recent Amendments to the New Jersey Law Against Discrimination: How Will Employers be Affected?

New Jersey Governor Jon Corzine recently approved the Civil Union Act, effective February 19, 2007, making New Jersey the third State in the country to allow civil unions. Separate legislation was also approved, which amends the New Jersey Law Against Discrimination to prohibit discrimination or adverse employment action on the basis of an individuals gender identity or expression. This new Legislation will have a wide-ranging and immediate impact on employers in the State of New Jersey, who must ensure that their employment policies and procedures are in compliance with the new laws.

For more information, or if you have any other questions, please contact Karen A.Confoy at 609.989.5012, or kconfoy@sternslaw.com, or Erica S. Helms at 609.989.5062, or ehelms@sternslaw.com.

To read more, please click here.