Commercial Litigation Update

On October 30, 2024, in Alternative Global One, LLC v. Feingold, the New Jersey Appellate Division affirmed a trial court’s orders denying a New Jersey litigant’s motion to quash a subpoena for his deposition in underlying Florida litigation to which he was not a party. This decision illustrates that a litigant, even a non-party, must do more than assert blanket, unsubstantiated objections to a subpoena ad testificandum.

The appeal arose from a Florida litigation. In Alternative Global One, LLC v. Feingold, No. 2023-000688-CA-01 (Fla. Cir. Ct. filed Jan. 17, 2023), plaintiffs Alternative Global Companies filed suit against defendants David Feingold and Michael Dazzo, alleging breach of fiduciary duty, civil theft, conversion, replevin, tortious interference, civil conspiracy, accounting, and unjust enrichment. Along with Richard Cardinale, defendants served as co-managing members of the Alternative Global Companies. But after their resignation, defendants allegedly “attempt[ed] to convert [certain investments] from the Alternative Global Companies to their own benefit” and refused to surrender corporate books and records that they maintained. Pursuant to Rule 4:11-4(b), plaintiffs served a subpoena ad testificandum on appellant Daniel W. Amaniera, who was not a party to the litigation, seeking only to depose him in New Jersey.

The New York State Court Rule (the “Rule”), 22 NYCRR 202.20-d, that governs entity depositions is intended to streamline the method for examining entities. Although it is similar to FRCP 30(b)(6), it is not entirely the same. The differences between the Rule and FRCP 30(b)(6), as well as the fact that there is minimal case law interpreting the Rule, will likely lead to some confusion for commercial entities - and their general counsel - that receive a notice or subpoena to testify at a deposition for a case pending in New York State court. This blog post provides a brief overview of what is required by such a notice or subpoena and the related rights that are afforded to the commercial entity.

On June 24, 2022, the U.S. Supreme Court released its opinion in Dobbs v. Jackson Women’s Health Organization, overturning Roe v. Wade—the 1973 landmark ruling that established the constitutional right to abortion. Now, companies that operate in states where abortions are banned or restricted are facing a quagmire of laws and risks regarding enforcement. Additionally, the risk landscape is not static, but rather in flux, as the federal government (agencies such as the U.S. Department of Justice and the U.S. Department of Health and Human Services) and a myriad of states introduce new legislation and issue guidance on a near-daily basis.

In many cases, the payment of restitution by a party in a lawsuit involving the government or a governmental entity creates a tax-deductible business expense under Title 26, United States Code, Section 162(f) (hereinafter, “Section 162”). When it comes to violations of the False Claims Act, the Anti-Kickback Statute, Stark Law, or even common law fraud claims and contract disputes, understanding how this statute operates can offer substantial short- and long-term tax-benefits to entities facing stiff financial recoupments.  While it is unlikely that the costs of an investigation or restitution order will ever generate a financial net-gain for the entity footing the bill, it is important to appreciate that restitution and proactive remediation costs are viewed differently by both government enforcers (i.e. prosecutors) and tax-collectors, compared with other types of remuneration. Recognizing that there is a difference can, in some cases, help mitigate significant financial burdens.