The Cost of Victory: What Business Owners Should Consider Before Filing a Lawsuit in a Commercial Dispute

By Seth M. Rosenstein

A wise person once said, “Litigation is the basic legal right which guarantees every corporation its decade in court.”  While likely said facetiously, the fact is that business litigation often comes at great expense to the company and individuals involved.

The costs of vindicating and protecting a company’s rights – in time, money, disruption, reputation, and commercial relationships – along with the inherent risk and uncertainty involved in all litigation, can lead even a victorious plaintiff to ask whether their victory was worth the destruction it wrought. 

Undoubtedly, there are situations where litigation is a company’s best or only path forward in a commercial dispute, whether it is with a customer, competitor, or business partner. Sometimes, a lawsuit is the last resort after other attempts to reach a resolution have failed or the only way to bring the other side to the negotiating table. Other times, quick intervention by a judge is necessary to prevent irreparable harm to the business. In those situations, your company will want and need an experienced and strategic litigator who stands ready to vigorously pursue your claims.

But even after the dogs of litigation have been unleashed, most commercial lawsuits settle or are otherwise resolved before trial for many of the same reasons cited above – the expense, disruption, and risk involved in entrusting the outcome to a judge or jury. 

That is why, regardless of the perceived strength and merit of their claims, business owners should think carefully and consider the possible negative implications of litigation before telling their attorney to run to the courthouse and file a lawsuit. Here are three things to factor into your decision-making before pursuing business litigation: 

Even the Most Straightforward Lawsuit Can Take Your Business Down a Long and Winding (and Expensive) Road

Lawyers are sometimes accused of making simple matters needlessly complicated. But for attorneys representing defendants in business litigation, making things complicated is often a feature, not a bug. Part of the defense’s strategy, especially when faced with a strong or straightforward claim, can include using any means to make litigation as drawn-out, convoluted, costly, and painful as possible for the plaintiffs.

Unfortunately, the wheels of justice are extremely amenable to a commercial defendant who wants to slow a plaintiff’s roll. The system isn’t designed for speed to begin with, and even if your attorney does everything in their power to speed your case along, there are plenty of ways a defendant can stretch your simple case out for years.  

They may file multiple motions regarding various issues, most of which will require the submission of briefs and the time needed to prepare them. A lengthy briefing schedule could be followed by a hearing or ruling even further into the future, all delaying the suit’s progress until the motions are resolved. 

Discovery, the process of requesting and exchanging documents, gathering evidence, and taking witness depositions, also offers ample opportunity for delay and added costs. It can take a while and cost lots of money to produce a voluminous amount of material in response to a party’s request. Depositions may be held in distant locations and involve significant travel costs (including fees for the attorney’s travel time) and complicated scheduling conflicts. You may also need to retain paid experts to testify or prepare reports. 

But it is more than fees, expenses, and delays that can make discovery costly for a business plaintiff. Owners, executives, and employees who would otherwise be doing their jobs may need to divert their time, effort, and productivity toward handling document requests or preparing and sitting for their depositions. These disruptions should be factored into your litigation calculations as well. 

Of course, the end of your case may not be the end of your case if one side appeals the judgment, which can keep the attorney’s fees meter and litigation clock running and even lead to another trial.

There Are No “Slam Dunks” in Business Litigation

Just as there is no crying in baseball, there are no slam dunks in business litigation. When you put your fate in the hands of a judge or 12 random people sitting on a jury, there is no guarantee they will see your case the way you and your lawyer do. There is always – always – a risk of an adverse ruling, no matter how strong your case appears to be.

Not only may your company lose on its claims (while still being on the hook for attorney’s fees and costs), but it may be exposed to liability and a judgment if the defendant files and prevails on a counterclaim. And if a contract or statute provides that the losing side in litigation must pay the winning side’s attorney’s fees and costs, the monetary hole can be even deeper.

A Judgment Is Not a Check

For all the risk of losing that is inherent in litigation, there is an equally inherent likelihood your company will prevail on its claims and obtain a substantial monetary judgment against the defendant. But no matter how many zeros that judgment contains, it could ultimately be worth far less – or nothing at all. 

First, subtract all the amounts your business paid its lawyers from your judgment. That could shave tens or hundreds of thousands of dollars off that top-line figure. And those fees may keep coming if your attorneys have to spend time and effort trying to collect the amounts due from the defendant. Judgment debtors can engage in plenty of moves and tricks to hide assets and make collection efforts as difficult as possible. 

Of course, nothing makes collecting on a judgment more challenging than an insolvent judgment debtor. If the defendant is actually broke, even the most talented litigator cannot get blood from a stone. 

Again, as noted, sometimes litigation is the right or only way to resolve a business dispute despite the risks and costs it may involve. But before shooting first, you should ask your lawyer questions about the best path forward for your company, which may include pre-litigation demands, negotiations and non-binding mediation.

If you are involved in or anticipate a business dispute, please contact Ansell Grimm & Aaron Litigation Partner Seth M. Rosenstein

Ansell.Law Elevates Seth Rosenstein and Tara Walsh to Partners

Ansell.Law is pleased to announce that Seth M. Rosenstein and Tara K. Walsh have been elevated to partners. 

Seth enjoys a diverse practice handling litigation, controlled substances and regulatory law, and residential real estate matters. A savvy negotiator, Seth appears in state and federal courts and before the American Arbitration Association (AAA) and Financial Industry Regulatory Authority (FINRA) arbitration panels. He is licensed in New Jersey, New York, and Pennsylvania. 

Before Seth joined Ansell Grimm & Aaron, he practiced in the Manhattan office of a national litigation firm. He earned his Juris Doctor from Benjamin N. Cardozo School of Law and his Bachelor of Arts from American University.

Tara specializes in criminal defense and municipal court defense and has taken several cases through trial. She has also handled high-profile criminal cases before the Monmouth County Superior Court Criminal Division. Tara frequently speaks on municipal court defense and criminal defense developments. 

Dedicated to serving the greater New Jersey legal community, Tara is on the Monmouth Bar Association’s Municipal Court Committee and is an Inns of Court barrister. She also devotes significant time as secretary and board member of the Associate Board of Court Appointed Special Advocates for Children. Tara earned her Juris Doctor from New York Law School and her Bachelor of Arts from Syracuse University.

A Well-Crafted Medical Partnership Agreement Can Reduce the Likelihood of Disputes and Maximize the Benefits for Physicians

By Layne A. Feldman

Many elements go into building a successful medical practice. First is assembling a team of exceptional physicians with complementary talents and a shared vision and practice philosophy. But no matter how in sync the doctors who form a medical partnership may be at the outset, there is no guarantee they will remain on the same page. Differences of opinion on issues big and small can poison the partners’ relationship and result in costly litigation that poses an existential threat to the practice’s ongoing viability. 

Minimizing the chances of such destructive disputes – and having clear mechanisms for resolving them – can be the key to an enduring and rewarding practice. Those are but two of the many purposes and benefits of a comprehensive and well-crafted medical partnership agreement. This foundational document outlines and governs the relationship between the physician-partners, clarifies their respective rights, roles, and responsibilities, and fills in many blanks that could otherwise create confusion or lead to disputes.

Physicians forming a medical partnership should work with experienced counsel at the outset of their professional endeavor to prepare a partnership agreement that proactively addresses all the critical issues likely to arise during the course of the partnership. Some of the essential provisions of a medical partnership agreement include, but are not limited to: 

Establishing the Partnership’s Structure and Purpose 

The agreement should clearly outline the legal structure of the entity being formed, whether it is a general partnership, limited partnership, or another legal entity. Additionally, it should articulate the purpose of the partnership and specify the medical services it aims to provide and the scope of its business activities.

Defining Partners’ Roles and Responsibilities 

Clear delineation of the scope and limits of each partner’s responsibilities and obligations can keep physicians from stepping on each other’s toes – or bruising each other’s egos. This section should outline each partner’s specific duties, including clinical responsibilities, administrative tasks, and any specializations or areas of focus. 

Financial Arrangements

As with all businesses, disputes and litigation between medical partners often revolve around financial matters, making provisions that address contributions and liabilities among the most critical elements of a partnership agreement. This includes details about each partner’s initial capital contributions, profit and loss allocation, and mechanisms for resolving financial disputes. The agreement should also address how expenses will be shared, whether a salary structure is used, and how the partners will handle financial decisions, such as investments in new equipment and facilities or mergers and acquisitions of other practices.

Decision-Making Processes

A clearly defined decision-making framework is essential to ensure a smooth operational workflow. A medical partnership agreement should specify who has the authority to make decisions, what decisions they are empowered to make, and how and when they can delegate decision-making authority. The agreement may also stipulate that certain, more significant management decisions require the approval of all or the majority of the partners. 

Admission of New Physician-Partners

The agreement should detail the procedures and eligibility criteria for admitting new physician-partners to the practice. Such provisions may include establishing a minimum capital contribution before a new physician joins the partnership and requiring representations by the prospective partner as to their licensure status and history, claims and malpractice suits, and other professional matters. The document should also address any voting mechanisms or thresholds required for admitting new partners. Similarly, it should outline the circumstances under which a partner may withdraw from the partnership, whether due to retirement, disability, or other reasons. This ensures a transparent and fair process for changes in the partnership’s composition.

Dispute and Deadlock Resolution Mechanisms

While litigation is sometimes necessary or inevitable, it is rarely the optimal way to resolve disputes between business partners. Establishing alternative mechanisms for addressing conflicts or deadlocks when they arise can spare the partners and their practice from the inherent costs and disruption associated with lawsuits.

Mandatory mediation or arbitration (either binding or non-binding) provisions can facilitate early resolutions and minimize acrimony between partners. Similarly, the document should include mechanisms for resolving deadlocks

Termination and Dissolution of Partnership

In the unfortunate event the medical partnership needs to be dissolved, the agreement should outline the procedures for doing so. This includes addressing issues such as the distribution of assets and liabilities and handling ongoing patient care. Having a well-defined process for termination and dissolution helps minimize disruptions and ensures an orderly winding down of the practice.

Insurance and Liability

Outlining the insurance requirements for the partnership and its individual members is crucial. This includes malpractice insurance, general liability coverage, and any other relevant policies. Clearly defined provisions regarding the allocation of liability among partners contribute to a secure and stable working environment.

A well-crafted medical partnership agreement is essential for the success and sustainability of a collaborative healthcare practice. While no document can guarantee a medical partnership will survive in perpetuity, a medical partnership agreement can go a long way toward minimizing the chance of litigation and maximizing the potential for a long and lucrative professional relationship.

If you are considering entering a partnership with one or more of your fellow physicians, you should work with an attorney who has specific experience with physicians and small medical practices. If you need assistance preparing a partnership agreement or if you are currently involved in a dispute with your physician-partners, please contact one of the attorneys in Ansell Grimm & Aaron’s Corporate or Litigation practice groups.

Early Endgames: What Is the Difference Between a Motion To Dismiss and a Motion for Summary Judgment in New Jersey Litigation?

By Nicole D. Miller

There is a big difference between a lawsuit and a trial. While tens of thousands of lawsuits are filed every year in state and federal courts here in New Jersey and across the country, only a small percentage of those cases ever reach the point where the parties present all their evidence and testimony in person before a judge or jury, ending in a judgment. While many cases end before trial because the litigants have reached a negotiated settlement, others conclude with a pretrial ruling by a judge. In New Jersey, most of these rulings come after one of the parties files either a motion to dismiss or a motion for summary judgment.

A judge granting either motion effectively ends a case – at least temporarily. That is why they are both called dispositive motions — the movant requests that the judge dispose of the case in their favor before trial. In state court, these motions follow the same 28-day schedule for filing moving papers, opposition, and reply, which was a recent amendment to N.J. Ct. R. 4:6-2, the rule governing motions to dismiss.  But there are significant differences between a dismissal and summary judgment in terms of what the movant is asking the court to do, when such motions are filed, and the basis for granting or denying the motion. 

Motion To Dismiss

No matter the subject – a commercial dispute, a personal injury case, or a divorce – all civil litigation begins with the plaintiff filing a complaint against a defendant. The primary purpose of a complaint is to inform the defendant – and the court – of three things:

  • The factual allegations that support the plaintiff’s legal claims against the defendant;
  • What those legal claims are; and
  • What the plaintiff is asking for in damages or other relief.

Every defendant served with a complaint must file a timely response with the court. That response can be an answer in which the defendant admits or denies the specific factual allegations in the complaint. But if the complaint doesn’t include essential elements of a valid legal claim – even if all the facts alleged are taken as true – a defendant can file a motion to dismiss for failure to state a claim upon which relief can be granted. As noted, motions to dismiss for failure to state a claim in New Jersey state court are governed by N.J. Ct. R. 4:6-2, while Fed. R Civ. P. 12(b)(6) forms the basis for such motions in federal court. Both rules are essentially the same, as is the analysis of a complaint’s legal sufficiency.

Motions to dismiss are usually filed early in the case as the defendant’s initial response to the complaint. That means the parties have yet to engage in discovery or develop evidence to either support or refute the plaintiff’s allegations. It also means a judge considering a motion to dismiss will only look at the allegations contained in the complaint when making their determination as to the complaint’s sufficiency. And to decide whether the complaint sets forth a cognizable legal claim, the judge will assume that each factual allegation is true. In the event the defendant includes facts or documents outside the complaint, the court is required to convert the motion to a motion for summary judgment.

A judge will grant a motion to dismiss if those facts don’t or couldn’t form the basis of a legal action, even if the complaint’s allegations were true. In effect, the judge looks at all the allegations and concludes, “So what?”

A dismissal can be either with or without prejudice. A dismissal without prejudice means the plaintiff may be able to fix the shortcomings of the initial complaint by filing an amended complaint, and the court is giving the plaintiff the chance to do just that. In most cases where a motion to dismiss is granted, the judge will grant it without prejudice. In entering a dismissal with prejudice, a judge has determined that the complaint’s flaws are insurmountable and conclusively dismisses the case with no opportunity for the plaintiff to refile.

Motion for Summary Judgment

While a motion to dismiss focuses on allegations, a motion for summary judgment is all about evidence. While a motion for summary judgment can be filed earlier, most often it is filed after the conclusion of discovery (when the parties produce and exchange documents, take depositions, and develop other evidence). A motion for summary judgment asks the court to look at the evidence and conclude there is no issue of material fact in dispute. In other words, the moving party argues there is no point in the case going to trial because all the relevant facts of the case, as reflected in the evidence, are undisputed. Since trials involve ascertaining the truth behind the parties’ claims and defenses, a trial is unnecessary if the truth is already apparent.

According to N.J. Ct. R. 4:46-2, a judge will grant summary judgment “if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law.” Importantly, the rule requires the moving party to submit a statement of facts as to which there is no genuine dispute. Each fact in this statement must be supported by citation to the record, i.e., documents produced, deposition transcripts, written discovery responses, etc.

An issue of fact is genuine only if “the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact.”

The entry of summary judgment in favor of the moving party conclusively ends the case at the trial court level. There is no second chance or do-over for the non-moving party as there often is when a court grants a motion to dismiss. However, in certain instances, a party may file a motion for reconsideration if the party believes the court overlooked something or erred, or requests that the court invoke its discretion in the interest of justice pursuant to R. 4:49-2 or R. 4:42-2(b). Nonetheless, motions for reconsideration are rarely granted.

When appropriate, filing a motion to dismiss or for summary judgment offers the movant the chance for an early resolution of a case without the cost, disruption, and risk of going to trial. Conversely, the party on the receiving end of such a motion faces the prospect of their lawsuit being thrown out or shut down without being given the opportunity to present their case at trial. Accordingly, these two motions are enormously consequential in New Jersey litigation. 

 If you have any questions about motions to dismiss or motions for summary judgment in New Jersey, please contact Nicole Miller.

Law360 Covers Closely Watched Verizon Cell Tower Litigation in Monmouth County

In a hotly contested and closely watched litigation matter, Verizon Wireless applied to place cell towers along a New Jersey boardwalk in Monmouth County. Verizon sued the county and its board when their request was denied, claiming the denial was not supported by substantial evidence. Proposed Intervenors now seek to join the case, asking the courts to dismiss Verizon’s claims against the county. A recent Law360 article covered the case.

Ansell.Law partner Anthony J. D’Artiglio and associate Layne A. Feldman, attorneys in the Firm’s Litigation Department, represent the intervenors in the case.

Anthony’s practice encompasses complex litigation, bankruptcy, controlled substances and regulatory law, and labor and employment. Layne handles a diverse range of complex commercial and civil litigation matters.

Click here to read the Law360 article (subscription required).

Default Judgments: What Happens When You Fail to Respond to a Lawsuit

By Seth M. Rosenstein

One of the brightest minds of our time once said, “Half the battle is just showing up.” While “showing up” and responding promptly to a lawsuit filed against you doesn’t necessarily give you an edge in winning the case, failing to respond gives you close to a 100% chance of losing and having a default judgment entered against you.

Whether in state court, federal court or arbitration forums, a defendant in a civil action who does not file a response to the complaint against them within the time set forth by law effectively forfeits their right to defend the action. The court will accept the allegations in the complaint as true, enter a default judgment against the wayward defendant, and allow the plaintiff to take all steps needed to collect on their judgment.

That is why you should never ignore a complaint served upon you or your business and contact legal counsel as soon as possible. We cannot wish a lawsuit away, and nothing is accomplished by putting a complaint in your junk drawer like some people crumble up parking tickets and shove them in their glove compartment. When that first wage garnishment hits, a lien is put on your home, or your assets are seized, it will likely be too late for a do-over. 

Here is what you need to know about default judgments and their consequences.

What Is a Default Judgment?

To understand a default judgment, you need to understand the basics of how lawsuits work. They start with a plaintiff filing a complaint with the court that describes their claims against the defendant and the relief or amount of damages they want a judge to award. The complaint is then served on the defendant.

Once a defendant is properly served, the clock starts ticking on their time to respond. In New Jersey, that time is 35 days. It is either 20 or 30 days in New York, depending on how the complaint was served. In federal cases, defendants have 21 days to respond. Typically, that response will either be an answer to the complaint, a motion to dismiss the complaint, or a request for more time to respond. As long as the defendant “shows up” with a timely response and continues to participate in the case, the matter will proceed, and the defendant will be able to fight the allegations if they so choose.

When a defendant doesn’t respond promptly, the plaintiff can ask the court to enter a default judgment against the defendant. Unless the defendant has a legal basis for vacating that judgment, and seeks to vacate that judgment with the time set by court rules, the judgment will effectively close the door on any efforts to dispute the truth or accuracy of the complaint’s allegations. 

How Does a Plaintiff Obtain a Default Judgment?

The procedures for requesting and requirements for obtaining a default judgment are slightly different in New York and New Jersey (and in federal court). In some New York cases, a plaintiff can receive a judgment for all the damages they requested in the complaint without proving they actually incurred those damages. In other cases, the plaintiff must present evidence regarding their damages before a judge will enter a final judgment in the requested amount.

In New Jersey, the first step after a defendant fails to respond to a complaint is to ask the court for an entry of default. The plaintiff must then provide the defendant with notice of the entry and again when they subsequently file a motion for judgment by default. In this motion, the plaintiff must show the defendant was properly served notice of the proceedings, the defendant failed to answer, and the defendant is not an active member of the military. If they do so, the court may enter a final judgment by default, which definitively establishes the defendant’s liability.

In some cases, the court will hold a “proof” hearing at which the plaintiff will present evidence supporting the amount of damages they seek. The defendant must be given notice of this hearing as well. If the defendant shows up, they can dispute the damages amount. At the end of the hearing, the judge may enter a final judgment for a set amount, and the plaintiff is free to begin efforts to collect on the judgment.

What Can a Defendant Do After Entry of a Default Judgment?

As much as courts – and the law – do not favor defendants who ignore properly served complaints, they also loathe default judgments. They prefer resolving lawsuits on the merits of the claims and defenses, as opposed to disposition on procedural bases.

That is why the court rules provide a way for a defendant to ask a court for relief from a default judgment. But that relief is far from automatic. There are specific and limited bases for having a default judgment vacated, most of which involve flaws with the judgment itself. But short of a problem with the judgment (other than the substance of the claims), a defendant in New Jersey can get relief from a judgment if they show their failure to respond was due to “mistake, inadvertence, surprise, or excusable neglect” and that they have a meritorious defense to the allegations in the complaint. Similarly, in New York, a defendant must show they had a “reasonable excuse” for their failure to appear and also show they have a meritorious defense.

What qualifies as “excusable neglect’ and a “reasonable excuse” is largely up to the judge’s discretion, but simply forgetting or ignoring a complaint will unlikely be sufficient to support an application to vacate a default judgment. Rather than digging yourself into a hole that may be impossible to escape, the best course of action after being served with a complaint is to take the matter seriously and meet with experienced counsel who can preserve your right to mount a defense.

If you have questions about a pending default judgment against you or your business, please contact Seth Rosenstein at Ansell.Law.

Anthony J. D’Artiglio Elevated to Litigation Team Leader

Ansell.Law is pleased to announce that partner Anthony J. D’Artiglio has been elevated to Litigation Team Leader for North New Jersey. This new role complements his mentoring and leadership abilities within the Firm. D’Artiglio will manage the Firm’s North New Jersey litigation presence. Additionally, he will work closely with Firmwide Litigation Department Chair Lawrence H. Shapiro to shape the department’s future.

Based in the Firm’s Woodland Park office, D’Artiglio’s practice encompasses litigation, bankruptcy, controlled substances and regulatory law, and labor and employment. A seasoned attorney, he litigates a broad range of commercial matters, including commercial lease disputes, class actions, Consumer Fraud Act claims, corporate and shareholder disputes, employment disputes, and secured property actions. He also routinely represents creditors in bankruptcy matters.

D’Artiglio is licensed in New York and New Jersey. Best Lawyers in America has recognized him as a “One to Watch” since 2021.

Protecting Small Businesses and Property Owners From Serial Plaintiffs and Self-Appointed “Testers” Who File Nuisance Suits Under the Americans With Disabilities Act

By Seth M. Rosenstein

Twenty-five years after its passage, the Americans With Disabilities Act (ADA) has quite literally reshaped the landscape for disabled individuals, allowing them to participate more fully in society and avail themselves of the same facilities, services, and opportunities as everyone else. However, the ADA’s impact on the lives of millions of Americans has been matched by its impact on countless public-facing business and property owners who have had to modify their physical and online presence, practices, and properties to comply with the act’s accessibility requirements.

Title III of the ADA prohibits discrimination against people with disabilities by businesses open to the public. The ADA requires that businesses open to the public provide full and equal enjoyment of their goods, services, facilities, and websites and has provided detailed requirements for how companies must do so. However, satisfying those requirements can be tricky, even for the most well-intentioned and diligent businesses. If a person with disabilities wants to enter a store, visit a website, or obtain services but cannot do so because the business has not complied with the ADA, that person can file a lawsuit for such shortcomings, leading to costly and disruptive litigation that can cause both financial and reputational harm.

Self-Appointed “Testers” File Thousands of Shakedown ADA Suits Each Year

But the risk of ADA-related litigation doesn’t just come from individuals who were actually prejudiced or denied access or services. For all its benefits, the ADA has also become a tool for serial plaintiffs and legal counsel, many of whom have never attempted and never intended to patronize a business, to file questionable, if not frivolous, lawsuits designed solely to shake down the business for a quick payout. 

These nuisance ADA suits have cost American businesses millions of dollars. According to one analysis, ADA lawsuits have increased by 320% since 2013. Many plaintiff’s law firms file hundreds of cookie-cutter ADA lawsuits each year, often utilizing the same serial plaintiffs for each action. One person can visit multiple businesses or websites in a single day solely to identify even the slightest accessibility transgressions in order to generate claims. 

Small businesses bear the brunt of this abusive litigation, as serial plaintiffs – often labeling themselves as self-appointed ADA compliance “testers” – specifically target small businesses because they typically have limited means to defend themselves. Given the potential damages, including the payment of exorbitant attorneys’ fees, settlement is not just the path of least resistance; it may be the only path for a small business that wants to avoid a potentially devastating judgment.

So, what can small business owners do to reduce the risk of finding themselves in the crosshairs of a serial ADA plaintiff?

Hire a Certified Accessibility Specialist To Conduct a Compliance Assessment

You can’t fix a problem you don’t know you have. Perhaps the single most important thing you can do to limit exposure from accessibility lawsuits is to conduct a complete accessibility assessment and review of your facilities and online presence. A Certified Accessibility Specialist (CASp) can evaluate your property or internet presence, identify specific accessibility issues, and then supply you with the compliance requirements specific to your facility and website. Similarly, if you are planning new construction or alterations, a CASp can review your building plans and specifications to ensure the resulting construction will be ADA-compliant.

Once you have a complete picture of all accessibility issues with your facility or website, the next step is working to remove barriers and impediments to access. “Barrier removal” is one of the key elements of the ADA, and whether you need to make modifications or alterations to remove any identified barriers depends on whether such changes are “readily achievable,” which is defined “as easily accomplishable and able to be carried out without much difficulty or expense.” This is a very fact-specific analysis that depends on the complexity and costs involved in removing the barrier as well as the size and financial condition of the business. A CASp can assist in identifying barriers and also advise as to whether removal is “readily achievable” under the ADA.

Keep Your Eye on the Supreme Court

In its new term starting this month, the U.S. Supreme Court will decide whether self-appointed “testers” who do not suffer actual harm because of an alleged ADA violation have standing to sue under the act. The Court’s decision in Acheson Hotels, LLC v. Laufer will resolve a split between federal appellate courts on the issue and could have a seismic impact on the viability of ADA nuisance suits against small businesses if it rules that such individuals do not, in fact, have standing to sue. The importance of the case can be seen in the fact that 47 organizations have filed amicus briefs with the Court, advocating both for and against tester standing. 

Hire Experienced ADA Defense Counsel

Before reflexively giving in to an ADA plaintiff and settling a claim, small business owners should consult with experienced counsel who can evaluate the complaint and determine the best path forward. As noted, many complaints filed by “testers” are cookie-cutter and may contain boilerplate allegations of deficiencies that do not actually exist. It is often the case that an aggressive defense of the claims – particularly when the claims are frivolous – benefits both the business or property owner defending the action, as well as the greater community by deterring vexatious litigation primarily focused on lining counsel’s pockets.

If you have questions about your ADA obligations and protecting against accessibility lawsuits, please contact Seth Rosenstein at Ansell.Law.

SEC Approves Sweeping FINRA Rule Changes That Will Make Expungement More Difficult for Broker-Dealers and Associated Persons

By Seth M. Rosenstein

It is the rare FINRA-registered professional who does not face a customer complaint at some point in their career, and it is rarer still to find one who would not prefer to have customer dispute information expunged from the Central Registration Depository (“CRD”). But on April 12, 2023, the SEC approved changes to the FINRA rules regarding expungements and expungement hearings that will significantly alter how and when negative marks on professionals’ records are removed from the CRD and BrokerCheck.

The substantive and procedural changes were largely due to pressure put on FINRA by customer advocates and state securities regulators to make it more difficult to obtain an expungement. A 2021 PIABA study, for example, revealed that FINRA arbitrators approved 90% of the expungement requests they received.

Concerns About Straight-in-Requests in Particular

While some updates relate to all requests for expungement of customer dispute information, others only apply to each of the two types of hearings through which expungements can be obtained. This includes specific procedural changes to “straight-in-request” arbitration hearings, which are commenced by an associated person separate from a customer-initiated arbitration (as opposed to “on-behalf-of-requests” that are filed at the conclusion of an investment-related customer-initiated arbitration).

FINRA was particularly concerned about issues with straight-in-request arbitration proceedings, which often involve complaints brought and resolved many years before the expungement request. As FINRA expressed in an April 2022 discussion paper, the rule changes sought to address four shortcomings it identified with such hearings:

  • The unavailability of documents or information relating to disputes that occurred years prior. FINRA noted that two-thirds of straight-in-requests filed between 2016-2021 were filed more than six years after the customer dispute was initially reported.
  • The lack of customer participation in straight-in-requests leading to only one side presenting evidence and testimony.
  • The firm named in a straight-in request may have no relevant documents pertaining to the customer dispute because the event occurred while the associated person was employed at a different firm.
  • “Arbitrator shopping” by associated persons who make repeated attempts to seek expungement of the same customer dispute.

Changes That Apply to All Expungement Arbitration Hearings

These updates apply to both straight-in-request (FINRA Rule 13805) and on-behalf-of-request (FINRA Rule 12805) expungement hearings:

  • Arbitration panels can only issue expungement relief if they unanimously find that:
    • the claim or allegation is factually impossible or clearly erroneous;
    • the associated person was not involved in the alleged conduct; or
    • the claim or allegation is false.
  • FINRA must notify state securities regulators of all expungement requests.
  • The associated person requesting expungement must appear at the hearing in person or by video conference.
  • FINRA must notify involved customers of the time, date, and place of any prehearing conferences and the expungement hearing, advise them that they may attend and participate in those proceedings, and provide access to all relevant documents filed in the matter.
  • Panels are authorized to request any evidence the panel members consider relevant from the broker-dealer firm or associated person.
  • Panels must explain their rationale in sufficient detail when granting expungement relief.
  • Associated persons may not request expungement if a panel previously considered the merits of, or a court previously denied, an expungement request involving the same customer dispute information.
  • An associated person who withdraws an expungement request cannot subsequently re-file the request.

Changes to Straight-In-Request Hearings Under FINRA Rule 13805

To address the concerns above about straight-in-request hearings, FINRA made the following rule changes for such proceedings:

  • FINRA will not consider expungement requests filed:
    • more than three years after the date the customer complaint was initially reported in the CRD; or
    • more than two years after the customer-initiated arbitration or litigation involving the customer dispute information is fully adjudicated.
  • Straight-in requests must be filed against the broker-dealer firm at which the associated person was associated at the time of the events underlying the dispute.
  • An authorized representative of a state securities regulator may attend and participate as a non-party in the proceedings to the same extent that a customer could.
  • All straight-in requests must be decided by a three-person panel composed of randomly selected arbitrators pulled from a roster of experienced public arbitrators with enhanced expungement training and no significant ties to the industry. Parties cannot:
    • agree to fewer than three arbitrators;
    • strike any of the selected arbitrators;
    • agree to an arbitrator’s removal; or
    • agree to use arbitrators they pre-select.


The SEC’s 158-page notice approving FINRAs proposed rule changes contains several other modifications that impact an associated person’s ability to obtain an expungement, and FINRA has not yet announced an effective date for these changes. We will provide an update when they do. But given that the additional modifications generally make expungement more challenging, industry professionals contemplating an expungement request may wish to proceed sooner than later.

If you have questions about these updates, please contact Seth Rosenstein at Ansell, Grimm & Aaron.

Ansell.Law Welcomes New Attorney

Ansell.Law is pleased to announce that Nicole Benis has joined the firm’s Ocean office as an associate attorney. Her practice encompasses a range of complex commercial and civil litigation matters.

While earning her law degree from Seton Hall University School of Law, Benis served the Seton Hall Law community as a Student Mentor and a Student Bar Association member. She also served as a member of Seton Hall Law’s Center for Social Justice, Health Justice Clinic, representing clients in various matters. 

About Ansell.Law 

Ansell Grimm & Aaron, PC was founded in 1929 and has a long history of delivering for clients who come to us to resolve legal matters that are often urgent, stressful, and of great importance. A general practice law firm, we are powered by experienced attorneys who understand that the best outcome is the one that serves the needs of each client.