The First Week of August

The dog days of summer often see the Supreme Court and the Appellate Division issuing opinions in cases argued earlier in the Term. The Third Circuit is often more active than those other courts in issuing opinions during the summer.

Here are summaries of some of the published opinions issued by the three courts last week. These include all published opinions, civil and criminal, of the Supreme Court and the Appellate Division, and the lone published civil decision issued by the Third Circuit (without covering several criminal opinions issued by that court last week):

East Bay Drywall, LLC v. Department of Labor and Workforce Development, 251 N.J. 477 (2022). This unanimous opinion by Judge Fuentes addressed the question of whether certain workers employed by plaintiff East Bay Drywall, LLC were properly labeled as employees or as independent contractors. The decision was guided by the “ABC test” found in N.J.S.A. 43:21-19(i). The three prongs of that test provide that one is to be considered an employee unless it is shown that “(A) Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact; and (B) Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and (C) Such individual is customarily engaged in an independently established trade, occupation, profession or business.” The defendant Department found that all sixteen workers at issue were employees, but the Appellate Division reversed as to five of those employees in an opinion reported at 467 N.J.Super. 131 (App. Div. 2021). The Supreme Court held that plaintiff had failed to satisfy prong (C) as to any of the individuals involved, so that they were all to be considered employees.

State v. F.E.D., 251 N.J. 505 (2022). With Justice Patterson writing a lengthy opinion, a unanimous Supreme Court articulated the standard required under the Compassionate Release Statute for a court to release an inmate not otherwise eligible for parole based on the inmate’s suffering from “a permanent physical incapacity,” N.J.S.A. 30:4-123.51e(f)(1). The Court held that an inmate is eligible if the inmate can show, by clear and convincing evidence, that s/he has a medical condition that was not present at the time of sentencing, and that that condition makes the inmate permanently unable to carry out at least two “activities of basic daily living” (which the Court defined (looking to other statutes, as the statute at issue did not define the term) as including “eating, mobility, bathing, dressing, using a toilet, and transfers, and excludes instrumental activities such as shopping, house cleaning, food preparation, and laundry) such that the inmate requires 24-hour care. The Court concluded that F.E.D. did not make the required showing. That ruling modified and affirmed the decision of the Appellate Division, reported at 469 N.J. Super. 45 (App. Div. 2021), which had held against the inmate but had stated that only inmates who cannot perform any of the activities of basic daily living could win compassionate release. The Court also differed with the Appellate Division regarding the standard of review of the decision of the Department of Corrections in this context. The Appellate Division believed that its review was only for arbitrary and capricious action, but Justice Patterson held that the statute mandated that a trial court, not the Department, was to make the substantive decision in the first instance.

State v. Tucker, 473 N.J. Super. 329 (App. Div. 2022). In State v. Cain, 224 N.J. 410 (2016), the Supreme Court held that expert witnesses in jury trials of drug cases “may not opine on the defendant’s state of mind.” This opinion by Judge Gooden Brown ruled that Cain applied to grand jury proceedings as well, and that since a police officer expert testified to the grand jury regarding defendant’s state of mind, that “impermissibly encroached upon the grand jury’s decision-making function” and required reversal of the Law Division’s ruling that multiple counts of the indictment that required intent were sufficiently supported. The Appellate Division dismissed those counts but allowed other counts that did not require intent to go forward.

Berta v. New Jersey State Parole Bd., 473 N.J. Super. 284 (App. Div. 2022). This opinion by Judge Susswein involved an inmate who was convicted in 1984 of murdering his girlfriend in 1983. He was given a life term and a 30-year period of parole ineligibility expired in 2014. Defendant sought parole in 2015, but the Parole Board denied that and imposed a 120-month future eligibility term. Defendants applied for parole again in 2021, but the Board rejected that request and imposed a new 72-month future eligibility term. Defendant appealed to the Appellate Division. Speaking through Judge Susswein, the court reversed and remanded to the Board for reconsideration. Judge Susswein said that the Board’s denial rested on three circumstances: “(1) Berta was ‘committed to incarceration for multiple offenses’; (2) he has a ‘serious’ and ‘persistent’ history of institutional disciplinary infractions; and (3) his continued denial of guilt constitutes ‘insufficient problem resolution.’” The first of those was not legally correct since defendant’s convictions for murder and possession of a firearm were merged, so he was not committed based on multiple offenses. The second unreasonably found defendant a “persistent” offender when, in fact, he had been infraction-free for nearly twenty years. The third was without explanation as to why defendant’s refusal to admit guilt bore on his likelihood to re-offend, as “admitting guilt is not a categorical prerequisite to parole,” and there were “two in-depth psychological evaluations that suggested that defendant “presented only a low risk of re-offense.”

Robert D. Mabe, Inc. v. OptumRx, 43 F.4th 307 (3d Cir. 2022). This case had so many plaintiffs that the caption consumed nearly one-third of Judge Smith’s 54-page opinion. The first two paragraphs of that opinion well summarize the rest:

“Over 400 pharmacies joined forces in a lawsuit against OptumRX (Optum), a pharmacy benefits manager, alleging breaches of contract and breaches of duties of good faith and fair dealing, together with violations of certain state statutes. Pointing to arbitration agreements found in various contracts covering almost all of those pharmacies, Optum moved to compel arbitration. The pharmacies opposed the motion, arguing that compelling arbitration would be unconscionable. The District Court agreed with the pharmacies, and Optum timely appealed.

“We conclude that the District Court erred by applying the wrong standard in ruling on Optum’s motion. Per Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764 (3d Cir. 2013), the District Court—after concluding the pharmacies brought forth sufficient facts to place the arbitration agreements in question—should have allowed discovery limited to the question of arbitrability and then provided Optum an opportunity to renew its motion. It did neither. We will therefore vacate in part the District Court’s order denying Optum’s motion to compel arbitration and remand with instructions.”