An unaccepted offer under Federal Rule of Civil Procedure (FRCP) 68 to provide a plaintiff with complete relief does not moot the plaintiff’s individual claims or those of a putative class.

In Campbell-Ewald Co. v. Gomez, Campbell-Ewald Co., an advertising agency retained by the US Navy, sent text messages to over 100,000 recipients as part of a recruiting campaign. Gomez, a text message recipient, filed a class action complaint alleging that Campbell violated the Telephone Consumer Protection Act (TCPA), which prohibits sending text message solicitations without the recipient’s prior consent. Before the deadline for filing a motion for class certification, Campbell made an FRCP 68 offer of judgment to settle Gomez’s individual claim, which Gomez rejected. Campbell moved to dismiss the case for lack of subject matter jurisdiction, arguing that its offer, which would have provided Gomez with complete relief, mooted the individual and putative class claims.

In affirming the Ninth Circuit’s decision and holding that an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case, the US Supreme Court analyzed the issue under basic principles of contract law. Like any unaccepted contract offer, an unaccepted offer of judgment does not bind any party. Accordingly, Gomez’s individual claim and the claims of the putative class remain viable until the court makes a determination on class certification. Notably, the Supreme Court left open the issue of whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.

Additionally, the Supreme Court held that Campbell’s status as a government contractor did not immunize it from suit because Campbell violated both the TCPA and the Navy’s explicit instruction to send text messages to only those individuals who consented. ( (U.S. Jan. 20, 2016).)

See Legal Update, Supreme Court: FRCP 68 offer of Judgment Does Not Moot Class Action Claims for more on this decision.

See Practice Note, FRCP 68 offers of Judgment for more on offers of judgment, including the implications of Campbell-Ewald.

The Supreme Court has clarified the applicability of the Foreign Sovereign Immunities Act’s (FSIA’s) commercial activity exception.

The FSIA is the sole basis for obtaining jurisdiction over a foreign state in US courts. In OBB Personenverkehr AG v. Sachs, the Supreme Court concluded that a California resident’s suit against an Austrian state-owned railway for injuries she suffered at a train station in Austria did not fall within the FSIA’s commercial activity exception, and was therefore barred by the doctrine of sovereign immunity. The Supreme Court disagreed with the plaintiff’s contention that because she purchased a Eurail pass in the US, her suit was “based upon a commercial activity” carried on in the US by a foreign state, as required for the exception to apply (see 28 U.S.C. § 1605(a)).

In reversing the Ninth Circuit’s en banc decision, the Supreme Court rejected the reasoning that the plaintiff’s claims were based upon the sale of the Eurail pass because the sale provided “an element” of her claims. The Supreme Court found that the one-element approach was incompatible with its decision in Saudi Arabia v. Nelson, under which an action is “based upon” the particular conduct constituting the gravamen of the plaintiff’s suit. In OBB, all of the plaintiff’s claims turned on the incident at the Austrian train station. The Supreme Court explained that following any other approach would permit plaintiffs to evade the FSIA’s restrictions through artful pleading. (136 S. Ct. 390 (2015).)

See Legal Update, Foreign Sovereign Immunities Act Bars Austrian Railway Personal Injury Suit: Supreme Court for more on this decision

See Practice Note, A Primer on Foreign Sovereign Immunity for more on the commercial activity exception and the FSIA generally.

A recent decision from the First Circuit emphasizes that the crime-fraud exception to the attorney-client privilege is triggered by a client’s intent to use the attorney’s services in furtherance of a crime or fraud, rather than the attorney’s intent.

In United States v. Gorski, the government alleged that David Gorski, a non-veteran, fraudulently represented that his company, Legion Construction (Legion), was eligible for designation as a Service-Disabled Veteran Owned Small Business (SDVOSB). During discovery, the government subpoenaed documents from both a law firm Legion had retained to help effect a corporate restructuring and an attorney Gorski retained for personal legal advice related to the restructuring transaction. Legion and the law firm withheld certain documents on the basis of attorney-client privilege.

The district court determined that the crime-fraud exception applied to Gorski’s communications with the law firm about the restructuring, which were intended to present an appearance of compliance with the regulatory criteria for SDVOSBs. However, the court did not compel disclosure of Gorski’s communications with his personal attorney because the attorney had no role in the fraudulent restructuring.

The First Circuit affirmed in part, ruling that the crime-fraud exception applied to the defendant’s communications with both the law firm and the personal attorney. Applying the standard in the First Circuit for employing the crime-fraud exception, the court found that the government made a prima facie showing that:

The First Circuit rejected the district court’s conclusion that the exception did not apply to Gorski’s communications with his personal attorney because the district court had not focused on the relevant inquiry, namely, whether the client intended the communications to facilitate the fraud. (807 F.3d 451 (1st Cir. 2015).)

See Legal Update, Crime-Fraud Exception Hinges on Intent of Client to Use Lawyer to Facilitate Fraud: First Circuit for more on this decision.

See Attorney-Client Privilege and Work Product Doctrine Toolkit for a collection of resources to help counsel navigate the attorney-client privilege and work product doctrine.

In addition to relying on a plaintiff’s pleadings, a defendant removing a case to federal court may establish the amount in controversy by submitting summary-judgment-type evidence, such as interrogatory responses, according to the Fifth Circuit.

In Robertson v. Exxon Mobil Corp., the plaintiffs, a group of 189 individuals, filed suit against several oil companies in Louisiana state court, alleging that the defendants’ conduct produced harmful radioactive material that injured the plaintiffs’ health and property. The defendants removed the case to federal court under the Class Action Fairness Act of 2005 (CAFA), and the district court remanded on the grounds that the defendants had not met their burden of showing that at least one plaintiff satisfied the $75,000 individual amount-in-controversy requirement for mass actions under CAFA.

The Fifth Circuit reversed and remanded, explaining that the removing party can ask the court to make common sense inferences about the amount in controversy from the injuries the plaintiffs claim. The defendants in Robertson satisfied their burden of establishing the amount-in-controversy requirement by filing, in opposition to the motion to remand, the plaintiffs’ interrogatory responses detailing the harms suffered. These interrogatory responses, which constitute summary-judgment-type evidence, demonstrated harms that common sense dictates would amount to more than $75,000. ( (5th Cir. Dec. 31, 2015).)

See Legal Update, Defendants May Remove Mass Action with Summary-Judgment-Type Evidence: Fifth Circuit for more on this decision.

See Practice Note, Class Action Fairness Act of 2005 (CAFA): Overview for more on removal under CAFA.

The Third Circuit recently clarified the scope of the “inextricably intertwined” standard for establishing antitrust injury.

In Hanover 3201 Realty, LLC v. Village Supermarkets, Inc., the Third Circuit found that a real estate developer, Hanover 3201 Realty, LLC, had standing to sue a supermarket company, Village Supermarkets, Inc. (ShopRite), under Section 2 of the Sherman Act for attempted monopolization of the market for full-service supermarkets, even though it was not a competitor or consumer in that market. Hanover Realty had contracted with Wegmans, a supermarket chain, to develop a new supermarket near ShopRite and secure all necessary governmental permits and approvals. ShopRite subsequently filed numerous administrative and court challenges to Hanover Realty’s permit applications. Hanover Realty brought suit, alleging that ShopRite’s actions were baseless and constituted anticompetitive shams designed to keep Wegmans out of the market.

The Third Circuit disagreed with the district court’s finding that Hanover Realty lacked standing to bring its antitrust claims, concluding that its injuries were inextricably intertwined with ShopRite’s attempt to monopolize the market. The Third Circuit explained that ShopRite sought to impose costs and delay on Hanover Realty to keep Wegmans, a prospective competitor, out of the market. Without the relationship between Hanover Realty and Wegmans, the court noted, ShopRite’s conduct “would have been without purpose or effect.” Injuring Hanover Realty was the means by which ShopRite could get to Wegmans, and Hanover Realty’s injury was necessary to ShopRite’s plan.

Additionally, the Third Circuit held that ShopRite’s conduct was not covered by the Noerr-Pennington doctrine, which provides broad immunity from liability under the Sherman Act to those who petition the government for redress of their grievances, because ShopRite’s conduct was a mere sham to hide its attempt to directly interfere with a competitor’s business. (806 F.3d 162 (3d Cir. 2015).)

See Legal Update, Third Circuit Finds Antitrust Standing Based on Inextricably Intertwined Injuries for more on this decision.

See Practice Note, Antitrust Standing of Private Plaintiffs for more on the antitrust injury requirement and antitrust standing generally.

A recent Supreme Court decision underscores that the Federal Arbitration Act (FAA) preempts judicial interpretations of state law that do not give due regard to the federal policy favoring arbitration.

In DIRECTV, Inc. v. Imburgia, the contract at issue contained an arbitration provision, but stated that the provision would be unenforceable if the “law of your state” makes class arbitration waivers unenforceable. A California Court of Appeal found that class arbitration waivers were unenforceable in California under Discover Bank v. Superior Court, despite the Supreme Court’s holding in AT&T Mobility LLC v. Concepcion that the FAA preempted Discover Bank. The Court of Appeal then affirmed the trial court’s denial of DIRECTV’s motion to enforce the arbitration provision. After the California Supreme Court denied review of the decision and the Ninth Circuit reached the opposite conclusion in another case, the Supreme Court granted certiorari.

In reversing the Court of Appeal’s ruling, the Supreme Court found that its decision was not consistent with the FAA, even if it was consistent with California law. The Supreme Court explained that the phrase “law of your state” presumably referred to its ordinary meaning of valid state law, rather than invalid state law like Discover Bank. The Supreme Court also noted that California law incorporates the California legislature’s power to change the law retroactively. Accordingly, the Supreme Court held that the Court of Appeal’s decision did not place arbitration contracts on “equal footing” with all other contracts or uphold the federal policy favoring arbitration. (136 S. Ct. 463 (2015).)

See Legal Update, Supreme Court Finds Against California State Courts’ Interpretation of Class Action Waiver for more on this decision.

See Practice Note, Understanding the Federal Arbitration Act for more on the FAA and Class Arbitration Waivers in the US: Case Tracker for a table of key decisions on the enforceability of class arbitration waivers in the US.

An amendment to the TCPA limits liability under the statute for making certain debt collection calls.

The Bipartisan Budget Act of 2015, signed into law by President Obama on November 2, 2015, amends the TCPA by authorizing a party attempting to collect a debt owed to or guaranteed by the US government to use, without the called party’s prior express consent:

The Federal Communications Commission must issue regulations implementing this amendment within nine months of the Bipartisan Budget Act’s enactment.

See Practice Note, TCPA Litigation: Key Issues and Considerations for more on the TCPA.

The Delaware Supreme Court concluded that a financial advisor may be held liable for aiding and abetting a board’s breach of fiduciary duty, even where the directors themselves are exculpated from monetary damages. However, the decision confirms that a high degree of culpability is required to establish liability.

In RBC Capital Markets, LLC v. Jervis, the Delaware Supreme Court affirmed the Delaware Court of Chancery’s judgment against a financial advisor, RBC Capital Markets, for aiding and abetting the breach of the duty of care committed by Rural/ Metro Corporation’s board during the Rural/Metro sale process.

The Delaware Supreme Court held, among other things, that:

Despite these holdings, the Delaware Supreme Court did not adopt the Court of Chancery’s description of a financial advisor as a “gatekeeper” for a board’s performance of its fiduciary duties. The Supreme Court held that the term would wrongly suggest that any failure by a financial advisor to prevent directors from breaching their duty of care can give rise to an aiding and abetting claim. Rather, a financial advisor’s role is contractual and defined by its engagement letter. ( (Del. Nov. 30, 2015).)

See Legal Update, RBC Capital Markets v. Jervis: Delaware Supreme Court Affirms Rural/Metro with Narrower View of Financial Advisor Liability for more on this decision.

See Practice Note, Fiduciary Duties of the Board of Directors for more on the duty of care and other fiduciary duties.

In acquisition agreements for private M&A deals, buyers frequently agree to provide a provision disclaiming reliance on extra-contractual statements to give the seller comfort that all of its actionable representations and warranties are contained in the agreement. A recent Delaware Court of Chancery decision broadens the scope of these provisions and recognizes their ability to act as a bar even against accusations that the seller concealed material information.

In Prairie Capital III, L.P. v. Double E Holding Corp., the Court of Chancery upheld the effectiveness of a disclaimer styled as an “Independent Investigation” provision. The provision did not state explicitly that the buyer was not relying on the seller’s extra-contractual statements, but rather that the buyer was relying on its own investigation. In ruling that this wording was effective as a bar on fraud claims, the court held that the provision does not have to be framed negatively as a statement of non-reliance to manifest the buyer’s intent to disclaim reliance on extra-contractual statements.

Additionally, the court held that the provision was effective as a bar against claims that a defendant concealed material information, splitting with its 2013 decision in TransDigm Inc. v. Alcoa Global Fasteners, Inc. In TransDigm, the court held that disclaimers of reliance are ineffective against fraud claims based on a theory of omission of material information, unless and until the buyer disclaims reliance on the accuracy and completeness of information provided to it. The Prairie Capital court declined to follow TransDigm, holding that the existing disclaimer already made clear that the buyer had limited the universe of information on which it was relying to that contained in the agreement. ( (Del. Ch. Nov. 24, 2015).)

See Legal Update, Delaware Court of Chancery Broadens Scope of Language and Effect of Disclaimers of Reliance for more on this decision.

See Disclaimers of Reliance in Private M&A Deals Chart for a table of sample disclaimers of reliance typically seen in acquisition agreements and discussions of their adequacy under Delaware, Texas, and New York laws.

In a matter of first impression in the Seventh Circuit, the Western District of Wisconsin held that a safe harbor provision in the Americans with Disabilities Act (ADA) allows an employer to design a health plan that requires otherwise-prohibited medical examinations as a condition of plan enrollment.

EEOC v. Flambeau, Inc. involved an employer’s wellness program that required employees to complete a health risk assessment and biometric test to be eligible for enrollment in the employer’s health plan. The Equal Employment Opportunity Commission (EEOC) brought suit on an employee’s behalf, asserting that the wellness program violated the ADA’s prohibition against requiring medical exams that are not job-related or for business necessity.

The court held that the employer’s wellness program was protected by the ADA’s safe harbor for insurance benefit plans, under which employers may establish and administer the terms of a benefit plan for purposes of underwriting, classifying, or administering risks (42 U.S.C. § 12201(c)(2)). In reaching its holding, the court relied in part on the approach taken by the Eleventh Circuit in Seff v. Broward County, which extended the safe harbor to a wellness program similar to the one at issue in Flambeau. Additionally, the Flambeau court rejected the EEOC’s argument that a separate exception in the ADA for voluntary medical examinations that are part of employee health programs (42 U.S.C. § 12112(d)(4)(B)) would be rendered irrelevant by applying the safe harbor.

After determining that the wellness requirement constituted a plan term and fell within the safe harbor’s scope, the court granted summary judgment for the employer. ( (W.D. Wis. Dec. 31, 2015).)

See Legal Update, ADA Allows Wellness Exams as Condition of Health Plan Enrollment: Western District of Wisconsin for more on this decision.”

See Practice Note, Wellness Programs for more on wellness programs and issues to consider when designing these programs.”

Two private class action lawsuits alleging willful and reckless violations of the Fair and Accurate Credit Transactions Act (FACTA) have resulted in the largest settlements ever reached in the statute’s 12-year history.

In Legg v. Laboratory Corporation of America Holdings, the plaintiff claimed that Laboratory Corporation improperly included the expiration dates of customers’ credit cards on its receipts. The parties agreed to an $11 million preliminary settlement against the company, with each class member estimated to receive up to $200. (No. 14-61543 (S.D. Fla. Nov. 4, 2015) (order preliminarily approving settlement, directing notice to class, and scheduling final fairness hearing).)

Similarly, in Legg v. Spirit Airlines, Inc., the plaintiff claimed that Spirit Airlines revealed too many digits of its customers’ account numbers on its receipts. The parties agreed to a $7.5 million preliminary settlement against the company, with each class member expected to receive up to $265. (No. 14-61978 (S.D. Fla. Oct. 25, 2015) (order preliminarily approving settlement, directing notice to class, and scheduling final fairness hearing).)

Both settlements provide more than the minimum $100 in statutory damages for each individual. In addition to paying monetary damages, both defendants must bring their debit and credit transaction receipts into compliance with FACTA.

See Legal Update, Two Companies Settle Suits Alleging Violations of the Fair and Accurate Credit Transactions Act for more on these settlements.

See Practice Note, US Privacy and Data Security Law: Overview for more on FACTA.

The bar on registering disparaging marks in Section 2(a) of the Lanham Act violates the First Amendment, according to the Federal Circuit.

In In re Tam, the Federal Circuit, sitting en banc, vacated the Trademark Trial and Appeal Board’s (TTAB’s) decision refusing to register the mark THE SLANTS on grounds that the mark was disparaging to people of Asian descent, and remanded the case for further proceedings. Although the Federal Circuit acknowledged that its decision could result in wider registration of offensive marks, it concluded that Section 2(a)’s disparagement provision is subject to strict scrutiny, which it indisputably cannot survive, because it:

The Federal Circuit rejected the government’s arguments that strict scrutiny does not apply, concluding that:

Additionally, the Federal Circuit held that even if it treated Section 2(a) as regulating commercial speech, requiring the application of intermediate scrutiny, the provision would remain unconstitutional because the government did not present a substantial interest justifying the bar against disparaging marks. (808 F.3d 1321 (Fed. Cir. 2015).)

See Legal Update, Lanham Act Provision Prohibiting Federal Trademark Registration for Disparaging Marks is Unconstitutional: Federal Circuit for more on this decision and Legal Update, In re Tam: Landmark Federal Circuit Trademark Decision Triggers Practical Law Updates for a list of Practical Law resources affected by the Federal Circuit’s decision, with links to the updated resources.”

See Practice Note, Acquiring Trademark Rights and Registrations for information on the process for securing and maintaining federal trademark registrations.”

The International Trade Commission (ITC) does not have authority to regulate the electronic transmission of digital data because this data is not an “article” under Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337(a)(1)(B)).

In ClearCorrect Operating, LLC v. International Trade Commission, Align Technology, Inc. filed a complaint with the ITC asserting that the defendants violated Section 337 of the Tariff Act by, among other things, importing into the US certain digital models, digital data, and treatment plans to use in making dental appliances that infringed Align’s patents. The ITC determined that it had jurisdictional authority over electronically imported data under Section 337 and ruled in favor of Align.

The Federal Circuit reversed. Applying the first step of the test for reviewing an agency’s statutory construction outlined in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., the Federal Circuit construed the term “articles” in accordance with its ordinary and natural meaning, and concluded that the term is limited to “material things,” which does not cover electronically transmitted digital data.

Because Congress’s expressed intent was unambiguous, it was unnecessary to address the second step set out in Chevron and examine whether the ITC’s determination is based on a permissible construction of the statute. Nevertheless, the Federal Circuit held that the ITC’s statutory construction was unreasonable under Chevron because it failed to apply the plain meaning of the term “articles” or properly analyze the statute’s legislative history. ( (Fed. Cir. Nov. 10, 2015).)

See Legal Update, ITC Cannot Regulate Importation of Digital Data: Federal Circuit for more on this decision.

See Practice Note, ITC Section 337 Patent Investigations: Overview for information on Section 337 investigations.

The Federal Circuit explained that infringement under 35 U.S.C. § 271(g), which prohibits importing or selling products in the US that are made by a process patented in the US, is limited to situations where the product is actually made by the patented process. The ruling also clarifies the scope of the infringement safe harbor under the Hatch-Waxman Act (35 U.S.C. § 271(e)(1)).

In Momenta Pharmaceuticals, Inc. v. Teva Pharmaceuticals USA Inc., the plaintiff sued two generic drug manufacturers, Teva Pharmaceuticals USA Inc. and Amphastar Pharmaceuticals, Inc., for patent infringement under Section 271(g), claiming that its process patent was infringed by the defendants’ quality control testing of their enoxaparin drug products. Teva imports its enoxaparin from an Italian company, while Amphastar manufactures its enoxaparin in the US.

The Federal Circuit held that the patent was not infringed, concluding that Teva’s and Amphastar’s drug products are not “made by” the patented process within the meaning of Section 271(g). The Federal Circuit explained that limiting Section 271(g) to the actual making of a product is more consistent with the statute’s language than extending it to include methods of testing an intermediate substance or a final product. The term “made” refers to the manufacture, creation, or transformation of a product, not testing to determine whether the intended product has been made.

Additionally, the Federal Circuit found that Section 271(e)(1)’s safe harbor, which allows a party to use a patented invention solely for purposes reasonably related to developing and submitting information to the Food and Drug Administration for approval, did not apply to Amphastar’s routine quality control testing of each generic enoxaparin batch as part of its post-approval, commercial production process. (809 F.3d 610 (Fed. Cir. 2015).)

See Legal Update, Federal Circuit Addresses Quality Control Testing in Infringement and Safe Harbor Determination for more on this decision.”

See Practice Note, Patent Litigation: Hatch-Waxman Infringement for more on infringement claims under the Hatch-Waxman Act.”

Recovering both compensatory liquidated damages under the Fair Labor Standards Act (FLSA) and a state statutory penalty does not constitute double recovery, according to a case of first impression in the Tenth Circuit.

Evans v. Loveland Automotive Investments, Inc. involved an employee’s suit under the FLSA and Colorado Wage Claim Act (CWCA), alleging that his employer did not pay him timely wages. Following the entry of default judgment in favor of the employee, he appealed the district court’s damages determination that he should recover only under the statute that provided greater relief because his claims gave rise to overlapping damages.

The Tenth Circuit held that it was permissible to award both compensatory liquidated damages under the FLSA and a penalty under the CWCA because each serves a different purpose. However, the Tenth Circuit concluded that because FLSA liquidated damages and prejudgment interest serve the same purpose, the district court must vacate its award of prejudgment interest if it awards FLSA liquidated damages on remand. ( (10th Cir. Dec. 10, 2015).)

See Legal Update, State Statutory Penalty Plus FLSA Liquidated Damages Does Not Constitute Double Recovery: Tenth Circuit for more on this decision.

See Wage and Hour Claims Toolkit for a collection of resources to help employers comply with wage and hour obligations under the FLSA and state laws.

Arbitration agreements that waive the right to bring class or collective actions violate employees’ rights under Section 7 of the National Labor Relations Act (NLRA), according to a series of decisions from the National Labor Relations Board (NLRB). The decisions conflict with the Fifth Circuit’s holdings in Murphy Oil USA, Inc. v. NLRB and D.R. Horton, Inc. v. NLRB, which found that mandatory arbitration agreements with class and collective action waivers did not violate the NLRA.

The NLRB has determined that arbitration agreements with class or collective action waivers violate employees’ Section 7 rights where the agreement:

For more on these decisions, see Legal Updates, Arbitration Policy Not Saved by Allowing Claims with Administrative Agencies that May Seek Relief on Group Basis: NLRB, Voluntary Employment Arbitration Agreement with Class Action Waiver Unlawful: NLRB, NLRB Pans Janitor Mandatory Arbitration Agreement Despite NLRB Charge Exclusions, and NLRA Disclaimer Does Not Save Arbitration Policy, Murphy Oil Holdings Persist: NLRB.

See Practice Note, Employee Rights and Unfair Labor Practices Under the National Labor Relations Act for more on employee rights under Section 7 of the NLRA.”

Counsel litigating cases under Title VII of the Civil Rights Act of 1964 (Title VII) should take note of the Third Circuit’s adoption of a joint employer standard for Title VII discrimination claims.

In Faush v. Tuesday Morning, Inc., the plaintiff, a staffing agency employee, brought suit under Title VII against the staffing agency’s client, Tuesday Morning, for discrimination that occurred while the plaintiff performed services at Tuesday Morning’s worksite. The district court granted summary judgment to Tuesday Morning, finding that it was not the plaintiff’s employer as required for Title VII liability.

The Third Circuit reversed and held that Tuesday Morning may be held liable as a joint employer. The Third Circuit adopted the joint employer test applied by the Supreme Court in the ERISA context in Nationwide Mutual Insurance Co. v. Darden, rather than the broader test articulated by the Third Circuit in the FLSA context in In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation. The Darden test focuses on the hiring party’s “right to control” and involves consideration of a non-exhaustive list of factors. Analyzing these factors, the Third Circuit determined that a reasonable jury could conclude that an employment relationship existed between the plaintiff and Tuesday Morning. (808 F.3d 208 (3d Cir. 2015).)

See Legal Update, Third Circuit Adopts Joint Employer Test Under Title VII, Holding Staffing Agency Client Can Be Liable for more on this decision.”

See Practice Note, Joint Employment: Overview for more on the tests applied to determine joint employer status under various federal labor and employment laws.”

A Pennsylvania appellate court decision provides instructive guidance for real estate litigators on the evidentiary support that can sustain a constructive eviction claim.

In Sears, Roebuck & Co. v. 69th Street Retail Mall, L.P., Sears, a commercial tenant, alleged various instances of landlord neglect that occurred over several years, forcing it to ultimately vacate the premises. Sears argued that the landlord’s failure to provide maintenance or make repairs resulted in substantial deterioration and rendered the premises unsuitable for the purposes stated in the lease.

The Superior Court of Pennsylvania affirmed the trial court’s finding that Sears was constructively evicted as a result of the cumulative effect of the landlord’s years-long neglect. The court explained that problems that may not amount to constructive eviction when considered in isolation may do so when examined in the aggregate. Notably, the court also found that the impact of a landlord’s actions on a business’s commercial attractiveness is a factor that should be considered in a constructive eviction inquiry. (126 A.3d 959 (Pa. Super. Ct. Oct. 2, 2015).)

See Legal Update, Pennsylvania Appellate Court Finds Commercial Landlord Guilty of Constructive Eviction Based on Cumulative Long-Term Neglect for more on this decision.”

See State Q&A, Managing Commercial Real Estate Leases: Pennsylvania for a Q&A guide to state laws and customs on managing commercial real estate leases in Pennsylvania.”