NEW JERSEY LAWYER

DAILY BRIEFING      10/28/2005


News Briefs

NEW TRIAL FOR SHEIK’S LAWYER REJECTED
Lynne F. Stewart, the New York lawyer convicted of helping her convicted client, sheik Omar Abdel Rahman — the mastermind behind the 1993 bombing of the World Trade Center — pass secret messages to a terrorist organization, has lost her bid for a new trial and faces sentencing Dec. 20. U.S. District Judge John G. Koeltl of the Southern District of New York found there was sufficient evidence to support the conviction, and separately refused to grant a new trial based on a juror’s claim he was intimidated during the trial. Stewart, who has a West New York office on this side of the Hudson River, has an appeal pending before the 2nd U.S. Circuit Court of Appeals. She faces up to 20 years in prison. 10-27-05

THIRD CIRCUIT FDA RULING GOES AGAINST ALLENDALE COMPANY
The Food and Drug Administration (FDA) can demand restitution for consumers from companies that sell unapproved drugs, the 3rd U.S. Circuit Court of Appeals has ruled. In United States v. Lane Labs-USA, the panel unanimously rejected Allendale-based Lane’s argument that the FDA cannot demand restitution for consumers in such matters because the federal law regarding drug and cosmetics safeguards does not expressly provide for such a remedy. The decision upholds a ruling by U.S. District Judge William G. Bassler of Newark that required Lane to pay $109 million to consumers who purchased shark cartilage products that Lane pitched as treatments for cancer and HIV even though the FDA had not determined the products are effective treatments. 10-27-05

SCHOOL’S INTERNET RESTRICTION RAISES CONSTITUTIONALITY QUESTION
Pope John XXIII Regional High School in Sparta may be setting itself up for a constitutional challenge with a new policy requiring students to delete their personal information and weblogs from certain websites the school considers to be “unsavory.” Frank Askin of Rutgers University’s Constitutional Litigation Clinic in Newark has said it is arguable that the New Jersey Constitution prohibits the school’s policy. Kevin Bankston, an attorney with the Electronic Frontier Foundation, said that even if it is not a First Amendment issue, the policy “robs students from using the medium of their generation.” A spokesperson for the Roman Catholic Diocese of Paterson said the policy protects students from unwanted solicitation by adults. 10-27-05

RACIAL, GENDER WORKPLACE DISCRIMINATION ABOUNDS, SURVEY FINDS
Good news for discrimination lawyers, bad news for many workers: In a nationwide survey, 25 percent of business professionals said they know of someone who has been a victim of gender discrimination, 31 percent of black professionals said they know victims of workplace racial discrimination and 18 percent of whites said they know victims of racial bias. The survey by Highland Hudson Group, a New York-based employment consulting firm, found workplace multi-cultural initiatives are failing because they lack support from company leaders, and they cannot overcome society‘s general intolerance of racial, cultural and gender differences, said William Dexter, an official at Highland Hudson. 10-27-05

ACCOUNTING REFORM LAW PROVIDES NO RIGHT FOR SHAREHOLDER SUITS
The Sarbanes-Oxley Act accounting reform law may make it a lot harder for companies to conceal fraud, but it does not create a private right of action for shareholders to sue companies whose fraud has hurt their stock value, a U.S. District judge has ruled in a case of first impression. In Stonepath Group Inc. v. Dennis, U.S. District Judge Stewart Dalzell, sitting in Philadelphia, said the Sarbanes-Oxley section that provides for top executives to surrender bonuses and profits when a company restates its financial reports after fraud is uncovered, does not explicitly afford a private right of action and no court has ruled that it does. 10-27-05



Today's Decision Summaries

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FROM THE NEW JERSEY SUPREME COURT, THURSDAY, OCTOBER 27, 2005
THE FOLLOWING OPINION WAS RELEASED BY THE NEW JERSEY SUPREME COURT ON THURSDAY, OCTOBER 27, 2005:

RIGHT TO COUNSEL
STATE v. DENNIS
New Jersey Supreme Court, A-78, October 27, 2005. (6 pages). Facts-on-Call Order Number 92707.

Although the defendant had the right to counsel at his probable cause hearing in the Municipal Court, any error arising from the failure to appoint counsel was harmless.

NO OPINIONS ARE SCHEDULED TO BE RELEASED BY THE NEW JERSEY SUPREME COURT ON FRIDAY, OCTOBER 28, 2005.



APPROVED FOR PUBLICATION
EDUCATION
IN RE DIVISION OF ASSETS AND LIABILITIES AMONG THE CONSTITUENT DISTRICTS OF LOWER CAMDEN COUNTY REGIONAL HIGH SCHOOL DISTRICT NO. 1
Appellate Division, A-1595-03T5, A-1616-03T5, and A-1668-03T5, approved for publication October 26, 2005. (21 pages). Facts-on-Call Order No. 92706

The State Board of Education may order a deviation from the strict application of the statutory formula for the distribution of the liquid assets of a dissolved regional school district among the constituent districts if it finds that the regional district’s debt is so small that allocation of that debt cannot achieve an equitable allocation of the regional district’s assets and liabilities.

NOT APPROVED FOR PUBLICATION
PRODUCTS LIABILITY
GALINDO v. PIONEER FOOD EQUIPMENT
Appellate Division, A-2561-04T1, October 27, 2005, not approved for publication. (14 pages). Facts-on-Call Order No. 18727

Summary judgment for the defendant seller of used meat-processing machines in a products liability action and denial of the plaintiff worker’s motion for partial summary judgment that sought a determination that the machine that injured his hand was defective when the seller placed it into the stream of commerce affirmed; the plaintiff’s employer had bought the machine from the seller, and the plaintiff had settled his claims against the machine’s manufacturer and the original distributor; the trial court properly determined (1) that the seller was a “product seller” within the meaning of N.J.S.A. 2A:58C-8 of the Products Liability Act, (2) that the seller was exempt from liability under N.J.S.A. 2A:58C-9(c) because the manufacturer was identified by the seller, did business in the United States, and had adequate assets to satisfy a judgment against it, and (3) that the seller was not liable under N.J.S.A. 2A:58C-9(d) because the plaintiff did not establish that the seller “knew or should have known of the defect” that caused his injury; further, the plaintiff could not maintain a common law negligence action against the seller because the Act supersedes all such claims for harm caused by a product.

GUN CONTROL
IN RE DENIAL OF THE APPLICATION OF KNIGHT FOR A FIREARMS PURCHASER IDENTIFICATION CARD
Appellate Division, A-6804-03T5, October 27, 2005, not approved for publication. (4 pages). Facts-on-Call Order No. 18728

Law Division order that denied the petitioner’s application for a firearms identification card affirmed; the municipal police department had found no disqualifiers in the petitioner’s background but had denied her application due to the background of her husband; the husband had tried to commit suicide in 1987 with a motor vehicle and by stabbing himself, and a 2003 domestic violence incident had led to his arrest and the seizure of 23 of his weapons, which never were returned; contrary to the petitioner’s argument on appeal, the lack of an express finding that her husband would have access to any weapons that she purchased did not warrant reversal because there was a reasonable basis for concern that the husband could gain access to the firearms and use them to commit violence, including testimony from the police chief, who was a family friend, regarding the husband’s “violent nature” and “potential instability.”

HUSBAND AND WIFE
GROMEK v. GROMEK
Appellate Division, A-4825-03T1, October 27, 2005, not approved for publication. (22 pages). Facts-on-Call Order No. 18726

Post-divorce-judgment order that was entered on remand and that addressed alimony, equitable distribution, and attorney’s fees affirmed in part, reversed in part, and remanded in part; although remand had been ordered “specifically” to consider issues relating to alimony and attorney’s fees, the trial court did not exceed the scope of the remand “merely” by reviewing additional evidence, and the trial court had the authority to review some equitable distribution issues; however, the trial court’s disposition of personal property had to be vacated because, even if that issue was properly considered on remand, the record did not support the disposition; further remand was required (1) to recalculate the defendant ex-husband’s alimony and child support obligations, (2) to issue him credits for excess payments and for funds owed to him in connection with the sale of the parties’ real property, and (3) to correct a mathematical error in the award of attorney’s fees to the plaintiff ex-wife; the order was affirmed in all other respects.

HUSBAND AND WIFE
GREKOS v. GREKOS
Appellate Division, A-2453-04T3, October 26, 2005, not approved for publication. (7 pages). Facts-on-Call Order No. 18725

Appeal by the defendant ex-husband from a default final judgment of divorce that was granted on grounds of extreme cruelty dismissed without prejudice and with leave to file a motion to vacate the judgment under Rule 4:50-1 and Rule 4:43-3; after the plaintiff ex-wife filed her divorce complaint, the ex-husband never filed an answer or appearance, and he never moved to vacate the default that had been entered against him; the judgment of divorce was entered after a proof hearing at which the ex-wife testified; Haber v. Haber, which held that a direct appeal from a judgment by default will not lie in New Jersey, governed the disposition of the ex-husband’s appeal.

FROM THE ADMINISTRATIVE AGENCIES
SPECIAL EDUCATION
J.R. v. WILLINGBORO TOWNSHIP BOARD OF EDUCATION
OAL Docket No. EDS 6373-05, Agency Docket No. 2006 10325, Final Agency Decision: October 11, 2005, released for publication October 14, 2005. By Metzger, ALJ. (3 pages).

The administrative law judge denied the petitioner mother’s request for reimbursement for the unilateral placement of her daughter at a parochial school. The daughter was classified with the designation of “other health impairment,” and the parties agreed in June 2005 to place the daughter out of district. The respondent Board of Education supplied the mother with a list of approved private schools in her area, but the mother determined that they were all inappropriate after she reviewed summaries of the schools on the Internet. Without visiting any of the approved schools, the mother made the unilateral placement. The ALJ concluded (1) that the Board had met its burden of proving that it had offered a free appropriate public education and (2) that the mother had placed herself in “an untenable legal position” by rejecting all of the schools without visiting any of them. The ALJ acknowledged that the parochial school might be a “good fit” for the daughter, but he found no basis to conclude that the Board’s approved schools could not provide a free appropriate public education.

WORKERS’ COMPENSATION
CARREON v. HOSPITALITY LINEN SERVICE
Claim Petition No. 2003-1970, Final Agency Decision: September 13, 2005, released for publication October 11, 2005. By Hickey, A.S.J.W.C. (3 pages).

On a motion to dismiss the workers’ compensation insurer based on the cancellation of its insurance policy with the respondent employer, the judge of compensation concluded that the insurer was responsible for paying benefits to the petitioner worker. The employer had entered into an installment contract with an insurance funding corporation under which the corporation paid the full premium and received a power of attorney to cancel the policy if the employer failed to make its required installment payments to the corporation. The corporation sought to cancel the policy as of October 31, 2001 due to nonpayment on the installment contract. The judge determined (1) that it was “clear” that neither the corporation nor the insurer had complied with the notice and cancellation provisions of N.J.S.A. 34:15-81, (2) that the corporation had to comply with §34:15-81, despite its right to cancel the policy under the power of attorney and N.J.S.A. 17:16D-13, (3) that the failure to comply with §34:15-81 rendered the attempted cancellation “incomplete,” (4) that applying §34:15-81 would extend the date of cancellation to at least December 9, 2001, and (5) that the policy period covered the worker’s accident.

PENSIONS AND BENEFITS
WELLE v. BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
OAL Docket No. TYP 6408-03S, Agency Docket No. PERS #2-10-177943, Initial Decision: July 12, 2005, Final Agency Decision: September 22, 2005, released for publication September 27, 2005. By Masin, ALJ. (17 pages).

The Board of Trustees of the Public Employees’ Retirement System accepted the recommendations of the administrative law judge and affirmed its original decision that determined (1) that the petitioner attorney did not qualify for membership in the “Prosecutors Part” of PERS because he was not “in service” as a prosecutor on January 7, 2002 and (2) that equitable doctrines did not apply to resolve the deficiencies in his qualifications. The Prosecutors Part became effective on January 7, 2002, and it provides “significantly enhanced” pension benefits for prosecutors and deputy attorneys general who qualify. During a 31-year period, the petitioner worked as either a deputy attorney general in the Division of Criminal Justice or an assistant prosecutor in a county prosecutor’s office. In November 2001, the petitioner applied for early retirement effective February 1, 2002, but he changed his retirement date to January 1, 2002 after he was threatened with termination. The ALJ found that the petitioner had stopped working on December 31, 2001 and concluded that the petitioner was not entitled to receive benefits through the Prosecutors Part because he had not met the “fundamental” requirement of being in service as a prosecutor on January 7, 2002. The ALJ further concluded that the doctrine of substantial compliance could not be invoked.

PENSIONS AND BENEFITS
RAUB v. BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
OAL Docket No. TYP 5452-03, Agency Docket No. PERS #2-10-190194, Initial Decision: August 22, 2005, Final Agency Decision: September 22, 2005, released for publication September 27, 2005. By Monaco, ALJ. (43 pages).

The Board of Trustees of the Public Employees’ Retirement System accepted the recommendations of the administrative law judge and affirmed its original decision that denied the petitioner cooking instructor’s application for accidental disability retirement benefits. The petitioner, who worked for the Department of Corrections, injured his left knee in 1999 while pulling a food cart out of a faulty chiller and injured his right knee in 2000 when an inmate pushed a 500-pound food cart into him. It was not disputed that the petitioner was totally and permanently disabled or that the 2000 incident was a “traumatic event.” However, the ALJ concluded (1) that the 1999 incident was not a traumatic event because the petitioner did not establish that the source of his injury was “a great rush of force or uncontrollable power” and (2) that the petitioner’s disability was not the direct result of either incident because there was insufficient evidence that the incidents and the petitioner’s injuries were the “essential significant” or “substantial contributing” causes of his disability.


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