Challenging A Non-Compete Covenant

SPORTS LAW: NHL Contracts

LABOR LAW: Who Pays For Sexual Harassment?

Severance Deal? No Need to Rush

Female Harasser

Joking Vs. Abuse

Woman to Woman Sexual Harassment

AIDS Discrimination?

CLASS ACTION: Defending Fleet On Rate Inflation Charge

Mortgage Cases Dismissed

TECH TRANSFER: Innovative Model For Biotech Deal

CONTRACT LAW: Harbor Dredging Dispute

MERGERS & ACQUISITIONS: Valuation Defended

TAX LAW: Defending Hospital’s Status

ENVIRONMENTAL LAW: $38 Million Cleanup

PERSONAL INJURY: Fatigued Trucker

FIRST AMENDMENT Right to Hear 911 Tapes

FAMILY LAW: Licenses Lost Over Child Support

Corrections or additions?

This article was prepared for the May 28, 2003 edition of U.S. 1 Newspaper. All rights reserved.

Business Law

U.S. 1 asked area firms to comment on recent legal cases and court

decisions that could have an impact on business in Central New Jersey.

This section was edited by Kathleen McGinn Spring and Barbara Fox

Top Of Page
Challenging A Non-Compete Covenant

Karol Maw is a graphic designer. Or she was until she

was fired by the Lambertville-based pharmaceutical marketing firm,

Advanced Clinical Communications, for refusing to sign an employment

agreement containing a covenant not to compete. The clause would have

prohibited her from working for a competitor or customer for two years

after leaving the company. Fearing that such a prohibition could

prevent

her from earning a living, she balked at signing.

After she was terminated, Maw sued her former employer, which has

since changed its name to Advanced (www.advancedmdc.com). Now Maw,

who probably would not have become famous as a result of the

illustrations

she prepared for pharmaceutical marketing materials, stands a good

chance of having her name attached to a ground-breaking case.

"This is a big, big issue," says Michael Osborne, an

attorney with Stark & Stark who specializes in employment law. This

is so, he says, because in her law suit, Maw alleged that her rights

under the Conscientious Employee Protection Act (CEPA) — also

known as the "whistle-blower act" — had been violated

by the demand that she sign the non-compete agreement. It is that

claim that sets her case apart, according to Osborne, who predicts

that the case could go all the way to the Supreme Court — and

create substantial headaches for employers.

Osborne speaks on "Restrictive Covenants," including

agreements

like the one Maw refused to sign, on Wednesday, June 4, at 9 a.m.

at a free seminar in the community room of Stark & Stark’s offices

at 993 Lenox Drive. Call 609-219-7413 to reserve a spot.

The Mercer County Superior Court dismissed Maw’s case, finding that

the non-compete agreement does not per se violate public policy. But,

in a decision handed down just last month, the Appellate Division

reversed this decision, and ruled that Maw can proceed with her claim

against her former employer.

Phone calls to the attorney representing Maw and to the attorney

representing

Advanced Clinical Communications were not returned, but here are the

facts of the case as laid out in the complaint Maw filed and in the

Appellate Court decision.

A New Hope resident, and the mother of a young child, Maw was employed

by Advanced Clinical Communications for three-and-a-half years,

designing

written materials and presentations used as educational and marketing

tools for the company’s clients in the pharmaceutical and healthcare

professions. She was promoted to the title of senior graphic designer

in January, 2000. In that position, her major responsibilities

involved

providing creative design concepts for written and graphic materials;

preparing the design and layout of technical charts, graphs, and

reports;

working with vendors on design issues; and other work typical of a

graphic designer.

The educational requirements for the position were a bachelor’s

degree,

with an emphasis in graphic design preferred. In addition, the

employer

required a minimum of four to six year of design experience and a

knowledge of a number of graphic-related software products. Maw had

no training in any medical or pharmaceutical science and understood

very little about the substantive/medical/pharmaceutical content of

the projects on which she was working. Her job did not require such

understanding or knowledge; instead it required her to be able to

present printed or graphic material in an attractive and

understandable

format by using the principles of graphic design.

In January, 2001, Advanced Clinical Communications and

its president, Michael Forte, against whom Maw also is pursuing a

cause of action, made a decision to require all employees at the level

of coordinator and above to sign an employment agreement, which

contained

the non-compete agreement. Maw’s complaint alleges that defendants

made no distinction between the employees based on their job duties

and did not undertake a process to specifically identify for each

employee the "legitimate business interest" it was seeking

to protect. It further alleges that, while Maw may have had access

to certain confidential material in the course of going about her

work, there were numerous administrative and clerical staff who had

the same access to this same material, and they were not required

to sign the employee agreement.

In addition, by the time graphic design projects relating to the

launch

of a new product were begun, the drugs involved had already passed

the FDA’s pre-approval process, and substantial information about

them was already in the public domain.

Nevertheless, Maw was willing to sign the section of the employment

agreement that prohibited any employee from disclosing, during the

time of employment or at any time thereafter, any confidential or

proprietary information.

It was the non-compete clause that gave her pause. She did not

understand

why, as a graphic designer, she would have to sign it, and she worried

that it would restrict her ability to find a job elsewhere in her

field.

The agreement suggested that employees obtain independent legal

counsel

before signing, and Maw did so, calling upon her father, an attorney.

Maw proposed changes in the agreement, including changes to the

duration

of the non-compete clause. When she presented the proposed changes,

she was told that the company would not discuss the agreement at all

with her. Her complaint alleges that an HR representative told her

that "it’s the president’s company and he is not going to make

any exceptions."

Believing that there was no legitimate business reason compelling

her employer to make her sign the agreement, she declined to do so

and soon after was terminated. The reason given was "noncompliance

with company policy."

In her complaint, Maw states that she is due compensatory and punitive

damages for her injuries, including humiliation and emotional

distress,

suffered as a result of her employer’s violations of CEPA. The

provisions

of CEPA, the complaint reminds the court, prohibit an employer from

taking retaliatory action against an employee where the employee is

objecting to or refusing to participate in an activity, policy, or

practice that the employee reasonably believes is in violation of

a law and/or is incompatible with a clear mandate of public policy.

That the Appellate Court agreed that she could pursue a cause of

action

under CEPA is what makes Maw’s case a ground breaker, according to

Stark & Stark attorney Osborne. "It’s like the law against

discrimination,"

he explains. Plaintiffs who prevail on a CEPA claim are entitled to

punitive damages, including attorney’s fees, in addition to

compensatory

damages, which typically include lost wages.

"That means," Osborne gives as an example, "a plaintiff

could win a $5,000 judgment and be awarded $100,000 in attorney’s

fees." This is not true in a contract case.

"This decision is sending a major chill through employers,"

says Osborne. This is especially so, he says, because employers have

vastly accelerated the pace at which they are passing out employment

agreements, and have broadened the categories of employees compelled

to sign them. "More and more rank and file, non-management

employees

with no access to secrets are signing," he says. In his opinion,

"some employers are over-reaching."

But, Osborne, continues, the employer’s caution is often based not

on paranoia, but rather on vastly changed ways of doing business.

"It used to be that you needed to pull up a van in the middle

of the night to make off with client lists," he says. The same

getaway strategy was necessary for spiriting away mailing lists,

top-secret

research, or plans for business expansion. Now, he points out, it

takes only seconds, and a blank disk, to accomplish the same heist.

"Information is much more portable than it was 15 years ago,"

says Osborne, and courts are having a much harder time in deciding

restrictive covenant cases. "They believe in competition,"

he says, "but not in unfair competition." Balancing the two

is the stuff of litigation.

There are three types of restrictive covenants. The first has to do

with trade secrets, the second with non-solicitation of clients or

employees, and the third, the issue in the Maw case, with non-compete

agreements. All three types of restrictive covenants must meet a

three-pronged

test if they are to be enforceable. They must protect a legitimate

business interest of the employer; they cannot impose undue hardship

on an employee; and they cannot injure the public.

Courts have the easiest time in deciding cases involving trade

secrets,

says Osborne. It is easy to see that sneaking out of Coke with the

formula for Coke Classic and setting up competing a soft drink

business

is a no-no.

Non-solicitation is far trickier. "It’s a chicken and egg sort

of thing," says Osborne. Did the salesperson attract the clients

through the power of his personality? And is he therefore entitled

to take them with him when he starts his own business or goes to work

for another company? Or did he reel them in using the prestige of

his company’s image? And should their relationship remain with that

company? "We see this all the time with securities firms,"

Osborne says. "A broker goes from one house to another and

solicits

his book of business."

While non-solicitation cases can go either way, non-compete cases

are where the employer has the most trouble prevailing, especially

in New Jersey. "New Jersey leans toward employees," says

Osborne.

"This is the one the courts are least likely to enforce. The

general

feeling is that people should have the ability to make a living."

Non-compete agreements restricting employees for a short period of

time have a better chance of being enforced. During the Internet

bubble,

Osborne recalls, New York courts decided that six months was the

maximum

amount of time an employee could be prohibited from competing. The

rationale? Within half-a-year the pace of technology innovation would

make any proprietary information obsolete — and useless.

Osborne, a graduate of Duquesne (Class of 1988) and of the Quinnipiac

School of Law, has been working on management-side employment law

for three years. He says his firm gets "hundreds" of calls

a year from employers looking for advice on restrictive covenants.

His general advice, particularly in light of potential implications

of the Maw case, is to proceed carefully in compelling employees to

sign restrictive covenants. If the agreements are deemed necessary,

it is probably a good idea to lock them up before employment begins,

or to have them signed in conjunction with a promotion.

A problem for the employer in the Maw case, in Osborne’s opinion,

is that the employment agreement was "sprung on her" for no

apparent reason after she had been working for the company for several

years. If she had been presented with the same agreement before she

was hired, it would be a different story. "Then it could be said

that she went into it with her eyes open," he says. But being

asked, out of the blue, to stay out of large segments of the workplace

for two years should she leave the job could be construed as being

unreasonable.

Should Maw prevail, the agreement, which appears to confer no major

protection or advantage on her former employer, could prove to be

very expensive. Perhaps just the prospect of such a victory will make

any number of New Jersey employees think twice before compelling their

workers to sign restrictive covenants. Says Osborne, "This is

a very interesting case."

— Kathleen McGinn Spring

Top Of Page
SPORTS LAW: NHL Contracts

For James F. Dial, a hockey fan and a partner

at Reed Smith at Forrestal Village, representing the Minnesota Wild

of the National Hockey League in salary arbitrations with restricted

free agents is a dream assignment. In a legal field historically

dominated

by Canadian law firms, Dial’s representation is something of an

anomaly,

but he had positive results for the three-year-old expansion club

after the past two seasons.

Every year scores of National Hockey League restricted free agents

file to participate in binding arbitration to determine their salaries

for the upcoming season. About a dozen or so actually get to the

hearing

stage of the process, at which management and the player are

represented

by legal counsel. This is where Dial comes in.

In 2001 he represented the Wild in one of the team’s three cases that

went the distance. On the heels of that favorable result, he was again

selected to represent the Wild in arbitration in 2002, this time

involving

the team’s left wing, Finnish-born Antti Laaksonen, the only Wild

player to appear in every game of the franchise’s then two-year

history.

"The process is that both sides submit evidence about a player’s

value to the hearing arbitrator," says Dial. "It’s a little

more exciting than many other kinds of arbitration, because this

evidence

hinges on an individual player’s hockey statistics — how many

goals, assists and saves made, how many minutes played, how many

minutes

in the penalty box. The primary focus is to try to find similar

players

and develop an argument for the salary worth of the player in question

based on salaries of these comparables. Management’s case hinges on

establishing the salary band for players with similar levels of

accomplishment.

Of course, the player and his attorney generally have a different

perspective."

Held in Toronto each year, a hearing requires both written submissions

and oral argument, after which the arbitrator determines the player’s

salary. Dial points out that the process must be carefully conducted,

with an eye not only on past player performance, but on future

considerations

as well.

"It’s important not to alienate a player in the salary arbitration

process," he explains. "These are individuals you want to

keep as part of your team and encourage their contribution to the

team’s success for seasons ahead."

The Wild’s recent loss to the Anaheim Ducks brought their Stanley

Cup hopes to an end in mid-May. With five players eligible to file

for arbitration, Dial is ready to represent the team in negotiations

with any who pursue the hearing route this summer.

Top Of Page
LABOR LAW: Who Pays For Sexual Harassment?

Employees working for small businesses that may not

have the money to compensate their employees for injury can still

hope to recover for damages incurred in a discrimination or harassment

case, according to a sexual harassment case that went to the Supreme

Court of New Jersey (Schmidt vs Smith, 1998). "This case has

changed

the face of discrimination claims in New Jersey," says

Elizabeth

Zuckerman of Zuckerman & Fisher who represented the employee.

John

Bubblewicz of Hamilton represented the employer.

As a result of the case, employers can now have insurance companies

cover claims in which employees allege physical consequences stemming

from the emotional distress of harassment or discrimination.

Top Of Page
Severance Deal? No Need to Rush

Medical Inter Insurance Exchange (MIIX, the medical

liability insurance company on Princess Road) lost a case in 1998

involving an employee who returned from disability leave to learn

that her job had been terminated. Upon her return, the employee was

encouraged, that day, to sign a release in return for a severance

package. Elizabeth Zuckerman represented the plaintiff in the

1998 case, Riddell vs. MIIX, and Vanessa Kelly of Jackson Lewis

represented the defendant.

The court held that the employee did not have adequate opportunity

for reflection and did not clearly identify the claims being waived.

The court also said that the employee could keep the severance she

received because a requirement to give it back could deter meritorious

claims.

Top Of Page
Female Harasser

<B>Linda Wong and Daniel Fleming of Alexander

Road-based Wong Fleming PC (www.wongfleming.com) have a sexual

harassment

case before the New Jersey Supreme Court that made the pages of People

magazine and stands to earn them almost a million dollars. Though

the harassment was mostly verbal, and the harassed person kept his

job, the jury awarded more than $750,000 in compensatory damages and

$3 million in punitive damages.

What made this case different was that the plaintiff was male, and

the harasser female. It was the first female-on-male sex harassment

case in New Jersey and the largest verdict of its kind in the country.

The state has finally admitted that Ronda Turner, a supervisor at

the Mid-state Correctional Facility in Wrightstown, harassed jail

guard Robert Lockley Jr. over a nine-year period. But the state did

not admit it soon enough, not before Wong and Fleming had counted

up $822,000 in attorney fees. "Before we filed, we offered to

settle the case for $10,000," says Wong, who has an eight-attorney

office at 821 Alexander Road (www.wongfleming.com). The state had

another chance. A week before jury selection she and Fleming offered

to settle for $300,000.

Wong rejects the notion that Lockley’s award is too high, saying that

the jury based its verdict on daily emotional distress. "Who is

in a better position than the jury to decide this? There was a

breakdown

in the relationship with his family. He was the subject of constant

ridicule about his masculinity. It was vicious and repeated, day in

and day out," she says.

The case was appealed, both on the grounds of attorney fees and jury

awards. Wong and Fleming said their personal work accounted for 1,349

of the 2,220 hours spent by their firm, and that their fee is $325

an hour. The state retaliated that it was more usual for associates

to do most of the work, but Wong and Fleming emphasized the

difficulties

that they faced and the risk that if their client lost, he would not

be able to pay any fees.

The appellate court upheld both the attorney fees and the $750,000

plus interest in compensatory damages, but not the $3 million in

punitive

damages. Wong took the $3 million to the state Supreme Court, which

heard the case last January.

Top Of Page
Joking Vs. Abuse

How to draw the line between joking and abuse in the

workplace? In 1999 a federal jury in Trenton awarded $227,000 to a

state worker with dyslexia who said the workplace atmosphere violated

the Americans With Disabilities Act rules on disability-related job

discrimination. It was one of the first times a plaintiff has won

a case alleging a hostile environment under the ADA.

The plaintiff’s attorney, Linda Wong of Wong and Fleming at 821

Alexander

Road (www.wongfleming.com), compares disability harassment to racial

harassment: "When someone’s weakness becomes the butt of daily

jokes, that’s not funny," says Wong. Agreeing that employers are

indeed liable for racial harmony and gender equity in the workplace,

defense attorneys decry the additional vulnerability that this

decision

adds and raise the specter of censorship in private conversations.

Plaintiff Philip J. Lanni, 34, was a radio dispatcher for the

Department

of Environmental Protection at the Assunpink Wildlife Area in

Robbinsville.

He says his halting speech and memory and comprehension problems due

to neurological disorders made him the target of repeated harassment

such as putting his picture on a turkey decoy, mimicking his speech,

publicly correcting his spelling errors, and joking about shooting

him.

Defense lawyers tried to show a teasing atmosphere where Lanni himself

called his overweight supervisor "Fat Man" and "Jabba

the Hun," and pointed out that co-workers were supportive in other

ways, such as collecting $500 when Lanni’s house burned down.

Presiding Judge Anne E. Thompson refused to approve the law firm’s

request for more than $1 million in fees and nearly $50,000 in costs,

saying in part that both name partners need not have attended the

trial, and so one of them should have billed themselves at the

associate’s

level. Most of the money questions — including some quibbles over

copying costs — were won by Wong & Fleming on appeal.

Top Of Page
Woman to Woman Sexual Harassment

This case of sexual harassment involved only one

incident,

and the court ruled that a single incident (touching on the breast

and threatening words by a supervisor to a subordinate) was enough

to establish that a reasonable woman could believe her work

environment

had become hostile.

The case of Flizack vs. Good News Home for Women was also unusual

in that the harassment was woman to woman. The appellate court ruled

that a woman could maintain a sexual harassment claim against another

woman regardless of whether either person was an avowed homosexual.

"A claim for sexual harassment does not require that the defendant

be motivated by the desire for sexual gratification," said the

court. Elizabeth Zuckerman of Zuckerman & Fisher on Mapleton

Road represented the plaintiff, and Charles Schalk of Somerset

represented the defendant.

Top Of Page
AIDS Discrimination?

A Mercer County jury awarded $265,800, amounting to

$540,000 including attorney fees and costs, to a former employee of

Nelson Communications on Lenox Drive who alleged he was selected for

termination as part of a reduction in force because the employer

suspected,

or discovered, that he had AIDS.

Jacqueline Tillman of Zuckerman & Fisher represented the

plaintiff

and Frank Dee of Carpenter Bennett in Newark represented the

employers. The company denied any wrongdoing and appealed the verdict,

and a settlement was reached before the case went to appeals court.

Top Of Page
CLASS ACTION: Defending Fleet On Rate Inflation Charge

When FleetBoston Financial was named a defendant in

a putative national class action suit, it was represented by Reed

Smith partners Mark S. Melodia at Princeton’s Forrestal Village,

and Anthony Laura in Newark (www.reedsmith.com).

FleetBank is among a dozen of the nation’s largest financial

institutions

being sued by three plaintiffs purporting to represent hundreds of

thousands, if not millions, of banking customers. Specifically, the

plaintiffs claim that FleetBank and its codefendants have engaged

in a conspiracy to inflate the prime rate paid by the borrowing public

on all prime-based credit products (for example, home equity loans,

credit cards and lines of credit).

"The suit asserted RICO, the Sherman Act, and New Jersey Consumer

Fraud claims, which our Reed Smith team and the attorneys for the

other financial institutions were able to successfully counter,"

says Laura. "All of the banks moved jointly to dismiss the case

— a motion the court granted."

Melodia participated in the nearly four-hour oral argument before

the court, and Laura played a key role in preparing defense materials.

But, says Laura, "all of the attorneys and firms involved

contributed

to the victory."

Melodia and Laura continue to represent Fleet Bank in the appeal of

the Court’s decision, to be argued on Monday, June 2, in the Court

of Appeals for the Third Circuit in Newark.

Top Of Page
Mortgage Cases Dismissed

Reed Smith’s Princeton-based team, headed by Mark

S. Melodia, scored a series of national victories for three

financial

clients — GMAC-RFC, Sovereign Bank, and M & T Bank — in 12

cases pending in two states.

A well-known plaintiffs’ class action firm had attempted to hold the

three Reed Smith clients and some 80-plus other defendants responsible

for alleged unlawful conduct by the originators of the named

plaintiffs’

second mortgage loans — regardless of the fact that most of the

defendants never purchased or received the plaintiffs’ loans from

the originators. The plaintiffs wanted such remedies as refunds of

mortgage loan fees, mortgage interest paid, and penalties.

Because of the large number of mortgage entities named as

co-defendants

in the cases, there were multiple law firms from across the nation

involved. Like Reed Smith, many of them represented more than one

defendant. The Reed Smith team, which also included Lauren G.

Delehey

and Melissa P. Marschner, was selected as lead counsel by this

large joint defense group. Melodia made the oral argument for the

defense group on the motions to dismiss before the courts in Indiana

and Colorado.

Dismissals were obtained for all 12 matters, with four judges

involved.

Top Of Page
TECH TRANSFER: Innovative Model For Biotech Deal

Last October Reed Smith Princeton partners Diane

Frenier and Nan Mantell put together a deal between a

genomics-based

drug discovery company and their major pharmaceutical client,

GlaxoSmithKline.

Together with associates Rosemary Farr, Michelle LoMonte and

Greg Wiessner, they arranged a broad alliance between

GlaxoSmithKline

(GSK) and San Francisco-based Exelixis to discover, develop, and

commercialize

novel therapeutics in the areas of vascular biology, inflammatory

disease, and oncology.

Using an innovative model for sharing risks and potential rewards

in an R&D collaboration, the alliance combines Exelixis’ gene-to-drug

discovery platform and GSK’s strengths in development and

commercialization.

Exelixis is to deliver to GSK an undisclosed number of small-molecule

compounds that have met agreed-upon criteria in early Phase II

clinical

testing. GSK will have the right to further develop these compounds

and exclusive, worldwide commercialization and manufacturing rights.

"As a part of the deal, Exelixis retains co-promotion rights in

North America," says Frenier. "GSK will make an upfront

payment

of $30 million to Exelixis. GSK will also initially acquire 2 million

newly issued shares of Exelixis common stock at $7 per share, which

represents a premium of approximately 100 percent to the current stock

price. Exelixis also has the option to sell GSK additional shares

at a specified time in the future."

Other parts of the agreement call for GSK to pay Exelixis a minimum

of $90 million in development funding over a six year period, $220

million to $350 million in clinical and regulatory milestone payments,

and it will loan Exelixis up to $85 million. Two years from now, if

the two companies expand the collaboration, Exelixis’ milestone

payments

could double in size, and the development funding and the loan

facility

would also be significantly expanded.

Top Of Page
CONTRACT LAW: Harbor Dredging Dispute

In a case that involved a high-dollar contract to

modernize

the ports in Newark and Elizabeth, Reed Smith’s Mark Manewitz

(of the Forrestal Village office) and Anthony Laura and Greg

Dadika (of the Newark office) successfully preserved their client’s

dredging agreement with the Port Authority of New York and New Jersey.

Their client, Bean Stuyvesant LLC, had submitted the second-lowest

bid for providing dredging services for the federal contract from

the Army Corps of Engineers for part of the New York harbor dredging

program.

Jay Cashman Inc., the New England-based plaintiff in the case, had

initially submitted the low bid. Cashman, however, made a mistake

of such magnitude in the bidding process that the firm subsequently

withdrew its offer. As the next lowest bidder, Bean Stuyvesant (a

joint venture between firms in the United States and the Netherlands)

was then awarded the contract.

Subsequently the Port Authority awarded Bean Stuyvesant with a

contract

for additional work in the same part of the harbor for deeper

dredging,

which Cashman sought to enjoin in Federal District Court. Cashman

claimed that Bean Stuyvesant, along with co-defendants, the Corps

of Engineers and the Port Authority, had bypassed federal public

bidding

requirements in awarding the work to Bean Stuyvesant.

The Reed Smith attorneys crafted critical certifications and briefs

to demonstrate that the U.S. District Court of New Jersey lacked

subject

matter jurisdiction to hear the plaintiff’s injunction, and they

guided

the Army Corps and Port Authority in succeeding on similar arguments.

"The Court agreed with the Reed Smith argument that Cashman had

filed the matter in the wrong court," explains Manewitz. "The

judge subsequently transferred jurisdiction in the matter to the

Federal

Court of Claims, where it should originally have been filed. We also

successfully convinced Cashman that their argument would not prevail

in the Court of Claims."

Cashman voluntarily dismissed the case against all three defendants

when it did not succeed in the District Court action.

Top Of Page
MERGERS & ACQUISITIONS: Valuation Defended

Putting a value on something, whether it’s a house for

sale or an asphalt contract, is as much of an art as a business. You

can crunch the numbers all you want, but there will still be some

intangibles that have to be guessed, and the final sum almost

certainly

will displease one of the parties involved, either the seller or the

buyer.

And when the object in question is worthy many millions of dollars,

the tension is compounded.

Valuation experts at Management Planning Inc. (MPI) on Poor Farm Road

have been doing this for more than 60 years (www.mpival.com). MPI

Securities Inc. is a broker-dealer that provides business and

securities

valuation expertise to closely held and publicly held businesses

including

litigation support and expert testimony.

But recently Management Planning ran afoul of a buyer that very much

disagreed with the firm’s conclusions, and was taken to court. Don

Veix of Mason Griffin Pearson, located in the same building on

Poor Farm Road, successfully defended MPI against an attorney team

that included the former U.S. Solicitor General under President

Clinton

and the firm that Clinton used during the Monica Lewinski scandal.

A branch of the family that had founded the Salt Lake Tribune had

lost financial control of the paper and was trying to buy it back,

but its owners meanwhile had sold it to someone else. Each side hired

an appraiser, and the third appraiser, MPI, was to come up with the

final sum. That sum was rejected by the family, who filed the lawsuit

in January, saying MPI’s value was too much by more than $100 million.

Though the New Jersey Superior Court rejected the suit, the family’s

attempt to buy the paper continues.

Top Of Page
TAX LAW: Defending Hospital’s Status

If you think the Medical Center of Princeton has had

problems with neighbors, zoning, and what not, consider the case of

a hospital that incurred so much ill will that the host municipality

tried to make it pay taxes.

The Southern Jersey Family Medical Center had its property tax

exemption

revoked by the municipality in which it was located, Pleasantville,

on the grounds that much of the hospital’s revenue was from government

grants and reimbursements for providing services to indigent and

low-income

patients. The New Jersey Tax Court upheld the tax assessor’s denial,

but Archer & Greiner, representing the hospital, successfully appealed

the decision. Then Pleasantville took it to the state supreme court.

On May 13 the New Jersey Supreme Court upheld a decision that even

though a charitable organization receives substantial government

funding,

it can still qualify for a tax exemption. Arthur H. Jones of

Archer & Greiner (www.archerlaw.com) successfully argued the case.

Top Of Page
ENVIRONMENTAL LAW: $38 Million Cleanup

Representing three companies, Chris Gibson of

Archer & Greiner successfully defended a $38 million suit filed by

Rohm & Haas to recover the cost of cleanup for the Lipari Landfill

Superfund Site in Gloucester County. Based in Haddonfield, Archer

& Greiner has offices at 700 Alexander Park (www.archerlaw.com).

Gibson’s

clients were Crown, Cork & Seal Company, Continental Can Company,

and NL Industries Inc.

The landfill was first on the priorities list of SuperFund Sites in

1985 when the original $38 million suit was filed by the United

States,

via the New Jersey Department of Environmental Protection, against

Rohm & Haas, and three years later Rohm & Haas filed suit against

the third-party defendants. After a 29-day trial, U.S. District Judge

Joseph H. Rodriguez ruled in favor of the defendants.

Top Of Page
PERSONAL INJURY: Fatigued Trucker

A trucker for a floral company was on his third day

of interstate deliveries and was driving his 24-foot, 9,000 pound

truck south on the New Jersey Turnpike. He made an illegal stop in

Salem County to urinate and then re-entered the roadway and never

saw the 1988 Nissan minivan traveling at 65 miles per hour in the

right lane. It was 5 a.m. on New Year’s Eve day, December 31, 1999,

and a family of six were driving from a relative’s home in Connecticut

to their home in North Carolina.

The father was thrown more than 300 feet and died hours after the

accident. The mother suffered brain injury and fractures to both legs,

ribs, and jaw. Four children had no serious physical injury but there

was severe emotional impact relating to the loss of their father and

their mother’s brain damage.

Frank D. Allen and Andrew J. Rosetti of Archer & Greiner

(www.archerlaw.com) represented the family, and the case settled on

January 4, 2002. The trucking company and its insurers had to pay

$7.125 million — $4.625 million for the mother and children and

$2.5 million for the estate of the father.

Top Of Page
FIRST AMENDMENT Right to Hear 911 Tapes

A Newspaper’s right to see public records includes the

rights to listen to a police department’s 911 tapes, ruled the

Superior

Court of New Jersey in Ocean County. The Asbury Park Press had sued

to get access to the tapes covering a confrontation between Lakewood

Township police officers, and an individual, Thomas Jacobs.

On July 6, 2001, Jacobs was being pursued by undercover police

officers

during what was termed a "low speed chase," and he called

911 on his cellular phone. Then he was stopped, forced out of his

vehicle, and according to his account, was kicked and punched. The

police officers were indicted after an investigation, but the Press

was denied access to the reports.

The Lakewood police officers claimed that the tapes were exempt from

the "Right to Know Law," particularly when they were part

of an ongoing investigation, and that it would prejudice the rights

of the parties in the investigation.

Representing Gannett, the New Jersey newspaper chain to which the

Asbury Park Press belongs, was John C. Connell of Archer &

Greiner,

based in Haddonfield and with an office on Alexander Road

(www.archerlaw.com).

Connell cited a 50-state survey of decisions that had examined this

issue, and the court found in favor of access to the tapes on April

11, 2002.

Top Of Page
FAMILY LAW: Licenses Lost Over Child Support

If you are an architect, doctor, taxi driver, or

cosmetologist,

keep your child support paid up or you won’t have a job. It happened

to a boxer licensed by the state; his failure to make child support

payments cost him his license and perhaps his career.

Brian Paul, a family law attorney with Szaferman Lakind

Blumstein,

Blader, Lehmann & Goldshore at Quakerbridge Executive Center

(www.szaferman.com),

won a case against "Tiger" Thomas, a light heavyweight boxer

who lost his license to fight until he had paid at least $4,000 in

child support to Margaret M. Greco, the mother of Thomas’ two-year-old

twin girls.

Paul, who represented Greco in the 1999 case, said that he could find

no previous case of a New Jersey boxer who lost his license for

failure

to pay child support. He based his case on a 1998 amendment to the

Child Support Improvement Act, which covers all state licenses and

certificates, including professional licenses for beauticians,

architects,

and veterinarians, as well as recreational and sporting licenses.

"Boxing is a privilege in New Jersey, not a right. It’s like

driving

a car. If you don’t meet your obligations to pay child support, that

privilege will be taken away," said Paul.

Greco, who was working at the time as a legal secretary for the state,

and also had a part-time job with a boxing management company, was

not the only mother of children by Thomas, but she was the only one

to pursue legal action. She was supposed to be getting $80 a week,

including back payments for $4,000 owed.

Thomas’ trainer protested that Greco was getting one-third of the

boxer’s purses, that Thomas was doing his best, and that canceling

fights would ruin his career. Described as a "rising star,"

Thomas had a 10-1 record with nine knockouts, and his fights had been

aired on cable television.

Paul brought the case up to date in a telephone interview. "A

couple of times he was able to box and a portion of the purse went

for the child," says Paul, "The purses were small, $10,000

and $15,000. After fees she probably got $1,500 or $2,000. I don’t

think he is boxing any more."

In contrast to driver suspension, which can be automatic and is easily

tracked, professional license suspensions require due process —

accurate identification and a hearing. "Many professional boards

had not been collecting social security numbers and their databases

are not of the caliber needed to confirm identities," says court

spokesperson Winnie Comfort. So only a small number of professionals

have been tracked down, and almost all were able to pay up to continue

working.


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