Gibbons Law Alert -

Gibbons Law Alert Blog

On April 1, 2025

In recent years, the Federal Communications Commission (FCC) has adopted various Reports and Orders containing new rules aimed at thwarting rampant abuse of robocalling and robotexting, especially in light of emerging technologies that make such illegal calls easier to place and more dangerous to consumers, as scammers are using this technology to trick individuals into divulging personal information such as Social Security numbers, credit card details, and financial account information. The volume of new rules coming out of the FCC regarding this ever-changing landscape makes it challenging for companies that have to deploy compliant consent mechanisms to continue their marketing and advertising activities. The latest of these rules was set to take effect on January 27, 2025, based on the FCC’s Second Report and Order (R&O) that imposed new standards under the Telephone Consumer Protection Act (TCPA) for obtaining prior written consent to receive certain marketing calls and text messages. Part III.D of the R&O states that a consumer cannot consent to a telemarketing or advertising robocall unless the consumer: (1) consents to calls from only one seller at a time; (2) receives a clear and conspicuous disclosure from the seller that the consumer will receive telemarketing calls or texts using an automatic telephone dialing system or an artificial or prerecorded voice; and (3) consents...

Strike Three – Lack of Scienter Dooms CIPA Class Action Claiming Website Owner Aided and Abetted Chat Bot Software Provider’s Alleged Eavesdropping

by Michael R. McDonald

Posted in Class Action

On March 28, 2025

In Valenzuela v. The Kroger Co., the District Court for the Central District of California granted, for the third and last time, defendant’s motion to dismiss a class action lawsuit claiming that The Kroger Co. violated section 631(a) of the California Invasion of Privacy Act (CIPA) by allowing third-party software (provided by Emplifi) to be embedded on its website to record consumers’ communications with the website’s chat function. The only issue before the court was whether the amended complaint plausibly alleged liability under prong four of CIPA 631(a)—“that Kroger aided and abetted Emplifi’s eavesdropping on Kroger’s website users’ chats.” In its previous ruling, the court held that merely using embedded software to archive communications, like with a tape recorder, would not give rise to a statutory violation. Instead, to state a claim under prong four of CIPA 631(a) there must be plausible allegations explaining how Kroger knew that Emplifi engaged in conduct constituting a breach of duty, e.g. by sharing users’ data with third parties, or how Kroger itself engaged in conduct that constituted a breach of duty. Because prong four of CIPA 631(a) does not contain an explicit scienter requirement, the court applied California common law of aiding and abetting, under which aiding and abetting liability for an intentional tort can be imposed only...

Flawed Theory: District Court Refuses to Dismiss Video Privacy Claim Challenging Use of Meta Pixel Web Tracking Technology

by Bassam F. Gergi

Posted in Class Action

On March 27, 2025

In Lee v. Springer Nature America, Inc., Judge Lewis J. Liman in the Southern District of New York held that a longtime subscriber to Scientific American plausibly alleged, on behalf of a putative class, that the website violated the Video Privacy Protection Act of 1988 (VPPA) based on its use of website tracking technology. The plaintiff, a 10-year subscriber, filed a complaint alleging that Scientific American unlawfully installed a code known as “Meta Pixel” on its website. The Meta Pixel supposedly transmitted information to Meta (formerly known as Facebook) about the subscriber’s use of the site (including Facebook ID, URLs accessed, and titles of videos viewed) in exchange for Meta providing advertising capabilities to Scientific American. Scientific American moved to dismiss the complaint on two grounds: first, that the plaintiff lacked standing because he had not suffered an injury, and second, that the plaintiff did not plead the elements required to state a claim under the VPPA. Judge Liman rejected both arguments. Citing the Second Circuit’s recent decision in Salazar v. National Basketball Association, Judge Liman held that the plaintiff’s allegations that he was a subscriber to Scientific American, that Scientific American disclosed to Meta the plaintiff’s personal information (Facebook ID, URLs accessed, and titles of videos viewed), and that Meta used this information without...

NJ Supreme Court Holds That Sales Commissions Are “Wages” Under the Wage Payment Law

by Richard S. Zackin

Posted in Wage and Hour

On March 26, 2025

Introduction In Musker v. Suuchi, Inc. (decided March 19, 2025), the New Jersey Supreme Court held that compensation earned by employees via sales commissions constitute “wages” for purposes of New Jersey’s Wage Payment Law (“the WPL”). The court rejected the contention that sales commissions may qualify as “supplementary incentives” rather than “wages.” The distinction between the two concepts is critical because an employer’s failure to timely pay “wages” exposes the employer to administrative fines and penalties (N.J.S.A. § 34:11-4.10a-b) and, under the Wage Theft Act, entitles employees to assert claims not only for the withheld compensation but also for liquidated damages of up to 200 percent and for counsel fees (N.J.S.A. § 34:11-4.10c). Background Rosalyn Musker was employed as a salesperson for Suuchi, Inc., which sold software subscriptions to apparel manufacturers. In addition to an annual salary, Musker earned commissions based on the volume of her sales. At the onset of the COVID-19 pandemic, Suuchi began to sell Personal Protective Equipment (PPE) under a commission plan that differed from its usual commission structure. Subsequently, a dispute arose between Musker and Suuchi over her PPE commissions, with Musker maintaining that those commissions should have been calculated based on a gross sales basis and constituted “wages” under the WPL, and Suuchi maintaining that it properly calculated her...

Delaware Bankruptcy Court Recognizes Crédito Real’s Prepacked Plan, Including Nonconsensual Third-Party Releases Allowed Under Mexican Law

by Katharina Earle and John S. Mairo

Posted in Bankruptcy

On March 19, 2025

In a case of first impression since the U.S. Supreme Court rendered its decision in Purdue prohibiting nonconsensual third-party releases, the U.S. Bankruptcy Court for the District of Delaware granted recognition of Crédito Real’s prepacked plan, which contains nonconsensual third-party releases approved by a Mexican court. In overruling the objection of the U.S. International Development Finance Corp. (DFC), which argued that the Mexican plan would be contrary to U.S. public policy and the court lacked authority to recognize the plan in light of Purdue, Judge Thomas M. Horan found that “Purdue only goes so far,” its holding is limited to Chapter 11, and it “does not create an impediment” to recognition. Emphasizing that “comity is key,” the court found that Crédito Real’s “plan does not implicate the public policy exception.” It will be interesting to observe what broader or long-term implications, if any, the court’s decision will have. Will debtors attempt to utilize Chapter 15 as a vehicle to circumvent Purdue to gain approval in the U.S. of nonconsensual third-party releases allowed under the laws of foreign jurisdictions, or is the court’s ruling limited to the facts of this case? The answer to this question is unclear at the moment. Following his ruling, Judge Horan acknowledged that this is an “issue of significance” and indicated...

CIPA Litigation and the “Technological Capability” to Violate California’s Privacy Laws

by Michael R. McDonald and Caroline E. Oks

Posted in Class Action

On March 7, 2025

In Ambriz v. Google, LLC, a court in the Northern District of California refused to grant Google’s motion to dismiss the plaintiffs’ claims under Section 631(a) of the California Invasion of Privacy Act (CIPA) for (i) “intentional wiretapping,” and (ii) “willfully attempting to learn the contents or meaning of a communication in transit.” The lawsuit challenges Google’s AI-powered product, Google Cloud Contact Center AI (“GCCCAI”), which is used to support the customer service centers of other businesses by providing a virtual agent with whom callers can interact. The plaintiffs alleged that they placed customer service calls to businesses that use the GCCCAI service – specifically, Verizon, Hulu, GoDaddy, and Home Depot – and spoke with a “virtual agent” and human representative but did not know that Google would be listening in on and transcribing the call. Nor did the plaintiffs consent to Google’s alleged eavesdropping. Google moved to dismiss the CIPA claims on the ground, among others, that it simply provides a software tool to its business clients and was not “an unauthorized third-party listener to the communications between the named Plaintiffs and the customer service centers they called.” In denying Google’s motion to dismiss, the court began its analysis by explaining the split that has emerged in cases interpreting CIPA 631(a): Some courts require...

California’s Ban on Reverse Payment Settlements Held Not To Apply to Settlements Negotiated or Entered Outside of California

by Michael E. Hamburger

Posted in Antitrust

On March 6, 2025

Chief Judge Troy L. Nunley of the U.S. District Court for the Eastern District of California entered an order on February 13, 2025, that dramatically limits the geographic scope of a California law attempting to ban “reverse payment” settlement agreements of patent infringement claims, but upheld the law as it relates to settlements that are “negotiated, completed, or entered into within California’s borders.” A “reverse payment” settlement may result if a branded drug manufacturer sues a potential generic entrant for infringing its patents and then settles that litigation by making a payment to the generic defendant in exchange for that defendant agreeing to drop its challenges to the branded plaintiff’s patents for some period of time (often until the patents expire). In such circumstances, the payment is said to be “reverse” because it flows from the plaintiff in the patent suit (the branded manufacturer) to the defendant (the generic manufacturer), rather than flowing from the defendant to the plaintiff as in most litigation. In 2013, the U.S. Supreme Court held in FTC v. Actavis that such settlements may violate the antitrust laws if they involve “large, unjustified” reverse payments rather than reflecting “traditional settlement considerations, such as avoided litigation costs or fair value for services.” In 2019, California’s governor signed into law Assembly Bill 824 (AB...

Governor Murphy Proposes FY 2026 Budget Focused on Fiscal Responsibility and Planning for New Jersey’s Future

by Alexandra C. Hayes

Posted in State Budget

On February 26, 2025

Governor Phil Murphy presented his State FY 2026 Budget to a joint session of the Legislature on Tuesday, February 25. This year’s address marks the final budget of Murphy’s eight years in office. The proposed budget totals $58.05 billion, which is $70 million less than the FY 2025 adjusted budget appropriation. The FY 2026 budget includes a $6.3 billion surplus and a structural deficit of $1.2 billion. The Governor’s budget address was centered around themes of fiscal responsibility and planning for future economic security and opportunities for all New Jerseyans. Governor Murphy reaffirmed his administration’s intentions to work in concert with the Trump administration. He noted, however, that there is a distinct possibility that New Jersey may need to adopt a “break the glass” strategy if New Jersey faces the harsh reality of losing billions of federal dollars for state programs. Affordability and Property Tax Relief Governor Murphy addressed rising costs and inflation in his address. The proposed budget aims to improve affordability by addressing property taxes and increasing access to housing. The budget includes $28.5 billion in direct and indirect property tax relief, including nearly $4.3 billion in direct property tax relief through programs such as the Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) Property Tax Relief Program and the Senior Freeze...

“Emergency” Amendments to UHAC Significantly Alter Affordable Housing Landscape Ahead of Fourth Round

by Cameron W. MacLeod

Posted in Development/Redevelopment

On February 21, 2025

On December 19, 2024, the New Jersey Housing and Mortgage Finance Agency released “emergency” revisions to the Uniform Housing Affordability Controls (UHAC), N.J.A.C. 5:80-26.1 et seq., which represent a sweeping change to the established affordable housing development landscape. Instead of being strictly limited to the updates required by the recent updates to the Fair Housing Act, these revisions are far more extensive. As of this writing, it does not appear the regulations have been proposed for notice and comment under the standard procedures pursuant to New Jersey’s Administrative Procedures Act. A copy of those regulations are available here. These new “emergency” rules went into effect immediately and will apply to any project not part of an existing Third Round settlement. There is no express grandfathering provision allowing projects that were approved as of December 19, 2024, much less those that were administratively complete, to continue to comply with the former UHAC regulations. Accordingly, all New Jersey developers should be aware of these changes and be sure to incorporate them into their pipeline of proposed inclusionary projects. The below is meant only as a summary of the high-level changes. Among the changes are the following: Unit mixes and bedroom distribution are changed. At minimum, the number of bedrooms must be at least twice the number of...

Fourth Circuit Rockets Certified Class Due to Lack of Article III Standing

by Michael R. McDonald and Caroline E. Oks

Posted in Class Action

On February 7, 2025

In a 2-1 recent published decision, the Fourth Circuit decertified a class, holding that every class member must be concretely harmed by an alleged statutory violation under the Supreme Court’s seminal holding on Article III standing in TransUnion v. Ramirez. Alig v. Rocket Mortgage, LLC involved statutory and common law claims under West Virginia law by a proposed class of consumers against Quicken Loans, Inc. (now Rocket Mortgage, LLC), alleging that, in refinancing their home-mortgage loans, the consumers paid for “independent appraisals” that were not “independent” at all. In fact, the defendants provided to the appraisers the homeowners’ own estimates of their homes’ values, which they had provided in their loan application. The plaintiffs claimed that the inclusion of the borrowers’ own estimates inflated the appraisals and so compromised the integrity of the appraisal process as to render their appraisals unreliable and worthless. The District Court certified a class of “‘[a]ll West Virginia citizens who refinanced mortgage loans with Quicken, and for whom Quicken obtained appraisals through an appraisal request form that included an estimate of value of the subject property,’” which amounted to 2,769 loans. The court then granted summary judgment to the plaintiffs and class members and awarded them more than $10.6 million in statutory damages, among other relief. On the first appeal, the...