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Monday, September 26, 2016

Pokémon Go Lawsuit Claims Game Creators Entice Users To Trespass

NY Legal News, NY Litigation, Pokemon Go
Creators of the popular Pokémon Go augmented reality game are litigants in a lawsuit claim that the game entices users to trespass on other's properties.

Nintendo, the Pokemon Company and Niantic Labs are named in a lawsuit filed in New Jersey on behalf of Jeffrey Marder, a homeowner who claims to have had a number of unwanted encounters with Pokémon Go Players on his property.

As dicussed in a previous blog posting, augmented reality games involve live direct or indirect views of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics or GPS data. When playing the game,player use their smartphone's camera feature  to "see" Pokémon's fictional creatures. In the case of Pokémon Go, fictional creatures are projected onto a mobile device's camera through the game's app and overlays project Pokémon over the physical world, as well as other items called "Pokéstops" and "Pokémon gyms" that attract players seeking to catch new Pokémon or battle previously caught monsters to go to those locations.

The suit claims that, on at least 5 occasions, strangers have knocked on the door of his home requesting access to the property to "catch" Pokemon that the game creators had placed there in the game. Marder seeks personal compensation and an order that the game makers update and adjust the game to prevent future trespasses. The lawsuit also claims that the creators of the game "placed" some of these virtual "Pokéstops"on overlays of private property without permission, creating unwanted attention and disturbance. The plaintiff in this particular lawsuit is seeking class action status for his case, claiming that his privacy issue are not unique, and that many other property owners have suffered trespassers playing the game resulting from overlaid objects virtually placed onto private property.

This situation as described in the lawsuit was, at least to us here at IPG, a foreseeable concern, as we anticipated "over-zealous gamers trespassing" onto properties.

Since service of the lawsuit, Niantic Labs has updated the game with a warning to players to use common sense and obey all laws, including a warning to players not to trespass.  Upon the game's release, it also included a set of disclaimers for liability resulting in property damage, personal injury or death committed while playing the game. It also disclaims liability based on violations of any other applicable law.

The disclaimer also generally requires arbitration of disputes that may arise from the game. While there may be an argument that this lawsuit should be dismissed in favor of arbitration, it remains to be seen how the court would respond to such an argument because the lawsuit is not based on the litigant's actions in utilizing the game, but in the game creator's placement of virtual objects causing others to violate the law.

We here are IPG will continue to monitor the legal evolution of claims involving augmented reality games.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Friday, September 23, 2016

New York Extends Time For WTC Disability Claims By 9/11 First Responders

NY Administrative Law, NY Health Law, WTC Disability Law
This week, New York Gov. Andrew Cuomo signed a law that extended the submission deadline for  disability claims by first responders who worked at the World Trade Center (WTC) and related rescue operations after the September 11, 2001 attacks.

The submission deadline under the WTC Disability Law has been extended to September 11, 2018 for first responders affected by the terror attacks. This applies to claims for lost wages and medical benefits for illnesses (including workers' compensation, disability claims and accidental death benefits) resulting from participating in activities at or near the WTC recovery site in lower Manhattan. Medical claims covered include respiratory, psychological and skin diseases, as well as other serious illnesses like cancer, pulmonary disease, asbestos-related ailments and heavy metal poisoning.

The WTC Disability Law establishes a presumption that certain disabilities for certain New York City employees were caused by rescue, recovery or clean-up operations at the World Trade Center during the September 11 attacks. According to the City of New York, the law entitles qualified uniformed members of NYPD, FDNY, DSNY, DOC and other civilian employees to accidental disability retirement benefits if the person:
  • Worked at a WTC site at least 40 hours during the period beginning on September 11, 2001 and ending on September 12, 2002 (or was unable to work 40 hours due to a physical injury incurred during WTC-related work on September 11 or September 12, 2001), or
  • Worked at Ground Zero during the first 48 hours after the terrorist attacks on September 11, 2001, and
  • Has developed, or develops in the future, certain physical and mental conditions.
Lawmakers determined that this extension is necessary to cover qualified employees with related medical conditions that remain latent for many years following exposure to the WTC recovery site.

First responders can also enroll in the WTC Health Program administered by the National Institute for Occupational Safety and Health. This program provides medical services available through clinics in New York City that were set up under the James Zadroga 9/11 Health and Compensation Act passed by the federal government. In October 2015, the federal government extended Zadroga Act coverage for 75 years.

Registration is still open to make a claim under the Zadroga Act through 2018, but only for new onset Chronic Obstruction Pulmonary Disease diagnoses on or before August 4, 2016 for persons who can verify their presence at or near the WTC recovery site. Anyone who was diagnosed after August 5, 2016 has two years to put in a Zadroga Act claim, but the claim must be filed no later than August of 2020.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Thursday, September 22, 2016

What Can and Cannot Be Included In A New York Prenuptial Agreement

NY Family Law, NY Divorce Law
In light of the impending divorce of superstar couple Brad Pitt and Angelina Jolie, now is a good time to become re-acquainted with what a prenuptial agreement is and what can and cannot be included in such agreements in the State of New York.

A prenuptial agreement is a contract between future spouses that they agree to prior to getting married where they each disclose to each other all the money, property and assets each own and determine their respective rights. The agreement sets in writing a future spouse's rights and responsibilities that s/he will have during the marriage, as well as how all money, property and assets will be divided in the event of divorce or the death of a spouse. While New York law already covers how money, property and assets would divided in the event a marriage ends in divorce or death, courts recognize valid prenuptial agreements that create division of property that differs from the statutory scheme and order that they control.

In New York, a prenuptial agreement is valid and enforceable so long as it protects both spouses and it was entered into with full and fair disclosure of all assets. New York also requires that a prenuptial agreement be executed much in the same way a deed is signed and recorded, with the parties being required to have separate attorneys to avoid any appearance of fraud.

A prenuptial agreement can address:
  • Defining property: Property and assets brought into a marriage is called separate property. So long as separate property specifically referenced in the agreement remains separate in ownership from property you and your spouse obtained together (or, marital property), then that separate property continues to belong to that spouse alone during and after the marriage. However, if a spouse does not keep his/her separate property in their own name only (for example, adding a spouse to a home you owned prior to marriage) then such separate property may become marital property and divided equally in a divorce under New York law. Future spouses can also establish who is responsible for pre-martial debt.

  • Maintenance and Child Support: A prenuptial agreement can establish maintenance, or a regular payment of money as support. This may become necessary if, for example, a spouse gives up a career to remain at home to raise children. Maintenance can also be established in the event of a divorce. If the spouses bring minor children to a marriage, a prenuptial agreement can help make sure the children are provided for if the spouses divorce.  
However, there is one aspect of family life that a prenuptial agreement does not generally cover:
  • Child Custody / Visitation: A prenuptial agreement cannot definitively address child support issues or custody issues for unborn children because a New York court is bound by law to determine whether child support and custody arrangements are in the best interests of a child.
A spouse may challenge the validity of a prenuptial agreement for certain reasons, including fraud (intentional failure to disclose assets), coercion (agreement signed under threat or duress) and unfairness (agreement was tailored inequitably in favor of one spouse to the detriment of another).

Prenuptial agreements are not simple instruments. They are, in fact, complicated and complex not only because of the legalities of the agreement, but the high emotions that can result from drafting, executing and, unfortunately, disputing the agreements in the event of divorce. That is why we recommend that you discuss these issues completely with your soon-to-be spouse before even considering hiring an attorney experienced in handling these delicate issues.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Wednesday, September 21, 2016

States Sue The U.S. Department of Labor To Stop New Overtime Rules

Employment Law, U.S. Constitutional Law
Twenty-one states have joined together in suing the U.S. Department of Labor (DOL) in the hopes of halting the imminent implementation of its new overtime rule, which they claim is unconstitutional and fiscally unsustainable.

Starting December 1, the DOL's new overtime rule mandates time-and-a-half overtime be paid by public and private-sector employers to hourly employees earning less than $47,476 annually. This is a significant jump from the previous salary threshold of $23,660 per year set by Congress in the Fair Labor Standards Act. The DOL's new overtime rule also includes employees earning less than the new threshold that perform executive, administrative, or professional duties (commonly referred to as "white-collar" employees) who were previously exempt.

The aggrieved states argue that the increased threshold is unconstitutional because the original threshold and exemptions were set by Congress and, once the DOL did away with the "white-collar" exemption, the DOL's action illegally overruled congressional authority. To bolster its constitutional arguments, the states also argue that the DOL's new overtime rule violates the Tenth Amendment by indirectly controlling state budgets.

Finally, the states argue that by modifying the threshold and eliminating the "white-collar" exemption, the DOL created an automatic method of re-calculating overtime pay that "ratchets" up the salary threshold every three years, in violation of the Administrative Procedure Act.

Once implemented, the DOL’s new overtime rule would dramatically impact state and local work forces. The main concern is sustainability - the drastic increase in the number of employees eligible for time-and-a-half overtime pay would grow overnight. For states and municipalities, that may mean previously unforeseen cuts in social service budgets and difficulty negotiating future union labor contracts. For small businesses, that may mean that many will be unable to afford their current employees, let alone experience growth. In fact, the DOL's new overtime rule may lead to employees seeing reduction of hours, pay cuts, and even experience layoffs.

New York has not joined the lawsuit as of yet.  It would be smart for New York small businesses to get ready to take a financial hit come December should the DOL's new overtime rules take effect. Re-evaluate your budget for the coming year, including whether you can afford employee overtime.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Tuesday, September 20, 2016

U.S. Appeals Court: Business's Prohibition On Dreadlocks Is Not Racial Discrimination

Business Law, Employment Law
The U.S. Court of Appeals for the 11th Circuit ruled that a business's grooming policy prohibiting dreadlocks was not racial discrimination under federal employment law.

In EEOC v. Castastophe Management Solutions, a female job seeker responded to an ad for a sales job. The applicant was qualified and interviewed well. However, as a condition to hiring her, the business requested that she change her hairstyle from dreadlocks to a "professional-looking" haircut because part of her job duties would be selling the business to the public. The job seeker refused and contacted the Equal Employment Opportunity Commission (EEOC) stating that the business discriminated against her on the basis of her race. The EEOC then brought a claim for intentional racial discrimination.

The EEOC argued that prohibition of dreadlocks in the workplace constitutes race discrimination because dreadlocks are a manner of wearing hair that is physiologically and culturally associated with people of African descent. In other words, the EEOC argued that a ban on dreadlocks in the workplace is indistinguishable from a ban on African-Americans in the workplace.

The business argued that its grooming policies are not associated with race and that the EEOC was over-reaching in its interpretation of Title VII of the Civil Rights Act of 1964, which prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion.

The Court agreed with the business, stating that Title VII protects discrimination based upon “immutable traits” like skin color, but reading Title VII to include mutable characteristics, such as hairstyles, would be beyond the scope of the law's intent. While the court acknowledged that "cultural characteristics" can change over time, a change in the Title VII to cover "cultural characteristics" can only come from the legislature.

That is not to say that discrimination based on hairstyle is always permissible. One can envision a scenario where hairstyle can be used as a pretext for discrimination based upon race, and Title VII addresses those types of employment decisions. However, that wasn't the argument put forth by the EEOC, which seemed to strive for an expansion of Title VII not originally contemplated when it passed.

This decision re-affirms what racial discrimination is and is not under Title VII, and draws a bright line as to what are permissible policies and what are discriminatory policies so businesses can be guided accordingly.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Monday, September 19, 2016

Fox Sues Netflix For Poaching Key Employees

Business Law, Business Dispute, Tortious Interference
Media giant Fox filed a lawsuit against Netflix claiming it has been damaged by Netflix's aggressive and improper campaign to unlawfully target, recruit, and poach valuable Fox executives by inducing them to break their employment contracts.

The claim that Fox will attempt to articulate is called tortious interference. The elements of a tortious interference claim which Fox would have to prove are:
  • The existence of a valid contract between Fox and a third person;
  • Netflix's knowledge of the contract;
  • Netflix's intent to interfere with the contract between Fox and a third person;
  • Actual interference by Netflix, which must be "improper" in nature; and
  • Fox suffers damage as a result of Netflix's "improper" interference.
The exact employee contract specifications that would serve as the basis of Fox's lawsuit is not clear from reading the court filings.

Claims for tortious interference can be difficult to prove because proving mere interference with a contract is not enough to make the winnable case. Fox would need to prove "improper" interference, which courts determine based upon the facts and circumstances of a given case, including:
  • The type of conduct alleged;
  • Evidence of a motive for the interference;
  • The interests of the parties involved;
  • The relationships of the actor's behavior is to the interference; and
  • The relationships between the parties.
For instance, if Fox believes that Netflix's motivation is to put them out of business - and can prove it somehow - then Netflix's actions would be considered "improper" interference. Because the facts will most likely determine the outcome of a tortious interference claim, the court must balance the public policy of protecting valid contracts against the public policy of protecting the actor's freedom of action to make - and break - contracts.

It appears that things will get worse in this matter before they get better. Netflix has been posturing that it will be vehemently defending against this claim, while Fox has intimated that it will be reassessing licensing content with the streaming company.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Friday, September 16, 2016

Buying or Selling A Business? Do Your "Due Diligence"

NY Business Law Buying a Business
Before buying or selling a business, make sure you understand how to perform a "due diligence" for the business. This is essential for all businesses whether you are the buyer or a seller of a company. A good motivated seller of a business will, usually, receive a better deal if pre-due diligence work is performed in order to satisfy the potential requests of a buyer - in a timely fashion. We often see a buyer questioning documents produced when the documents are not produced in a timely manner.

Recently, I was approached by a prospective client about selling a small business, and I asked if she knew what performing a "due diligence" was. The blank stare on her face was all the answer I needed. Many small business owners have heard the term, but know nothing about what it means to properly carry out the due diligence process.

“Due diligence” is a period of time during which a prospective buyer has the opportunity to investigate your business before completing the purchase. During this phase of the business purchase, a prospective buyer can research the company’s business via the financial statements, assets and liability statements, contracts and inventory. The purpose is to determine if what is represented about the business is true and often to arrive at a fair price.

This is a sensitive time in the sale process because you are providing a stranger access to confidential aspects of your business that need to be handled with care.

Preparing your company for a "due diligence" is basically getting your "ducks in a row," and getting your "house in order" all at the same time. Gather the following documents together and get together with your attorney to put all matters in order:
  • Organizing Documents: Whether your business is a sole proprietor, partnership, corporation or limited liability company, put your organizing documents together (including your certificate of organization, bylaws and all filings made at the NY Department of State. If you don't have these documents, check with the NY Department of State to get certified copies. And while you are there, check to see if your New York business remains in good standing. If it isn't, then get it into good standing before proceeding. 

  • Real Estate: If you have any rights to real property (deeds, leases, and other agreements), then gather the documents together and hand them off to your attorney to verify that your real estate is free from liens and encumbrances. 

  • Insurance: Provide proof of adequate coverage for your properties and your business itself. This is key if your business involves vehicles or transport.  

  • Licenses and permits: Include all documents for all licenses for the business and for operators personally. If you run a food service business, buyers should know that your personal licenses, like for food handling, are non-transferable. However, other licenses, such a liquor licenses, can be transferred with the business - under certain conditions. 

  • Agreements: This means all major contracts with customers and third party vendors and creditors. Have an attorney review all of these agreements to ensure that they are assignable to successors in interest before a buyer takes a look.

  • IP: Beyond your logos and branding, put together your proof of any patents, copyrights, trademarks and confidential trade secrets - but only provide them to the buyer after the buyer has agreed to keep this information confidential.

  • Financials: Prepare tax returns, profit and loss statements, bank and other financial statements. Keep in mind that in New York, business successors may be liable for tax debt incurred in the years before the purchase of the business, so buyers will want to see prior federal, state and local tax returns and financial records going back several years.

  • Assets & liabilities: This includes any inventory, cash and securities, receivables, commercial property like equipment, as well as revolving debt, overall debt, employee lists with salaries earned and owed, information on pending lawsuits, and all regulatory violations paid and outstanding.
At the same time, the buyer should be prepared to provide you with the following:
  • Credit history for principal and business;
  • Buyer’s bio and resume;
  • A proposed business plan after sale; and
  • Financial information for both the principal and the business.
Additionally, have your attorney research both the principal and the business for court filings and other red flags that may upset the deal.  

Buying and selling a business is not a simple matter. Regardless of which side of the transaction you find yourself, having an attorney guide you through the process will make it all the smoother in the end. 
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Thursday, September 15, 2016

Apple Sued In Class Action For Breach of Contract Over iPhone 7 Pre-Orders

NY Litigation, NY Class Action, NY Business Law
Apple iPhone users who signed up for a program to pay extra with the promise of receiving the latest device each year have filed a class action for a breach of contract claiming that they’ve been told to wait longer for their new gadgets than they should.

In a proposed federal class action filed this week filed filed in the U.S. District Court for the Northern District of California by Emil Frank, a Brooklyn resident who participated in Apple's "iPhone Upgrade Program," attorneys claim that Apple breached its contract when Frank and others were unable to pre-order the new iPhone 7 prior to its release in stores.

The suit claims that participants who had paid into the program were given a lower priority than ordinary buyers when ordering from Apple, resulting in participants having to make additional payments on older phones while they waited in limbo. Additionally, claimants allege that this delay in ordering the iPhone 7 through the "iPhone Upgrade Program" means that participants will not be able to purchase the next-generation iPhone 8 next year immediately when it launches because the participants would be ineligible for an upgrade within one year after the acquisition of the previous device.

A "class action" lawsuit is one in which a group of people with the same or similar injuries caused by the same product or action sue the defendant as a group. Under federal law, the rules governing class actions are found in Federal Rule of Civil Procedure 23. Depending upon the type of class action, resolution of the lawsuit would bind all members of a class that was previously certified by the Court. Class action lawsuits are designed to advance several important public policy goals. It is often the sole means of enabling persons to remedy injustices committed by powerful, multi-million dollar corporations and institutions.

In this particular claim, the proposed class is anyone who joined this upgrade program prior to the release of the iPhone 7 in September of 2016 and fulfilled their obligation to make 12 monthly payments on their phone.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Tuesday, September 13, 2016

How Businesses Properly Use A Cease And Desist Letter

NY Business disputes, NY IP Law
Proper use of a cease and desist letter is the first measure a business can take to protect itself from copyright and trademark infringement, as seen in recent news.

GiGi New York sent Gigi Hadid and her Tommy Hilfiger collaboration a cease and desist letter because of the similarities in the styling of their name of a new line of clothing called "GiGi," which GiGi New York believes has the potential for customer confusion between the brands. GiGi New York has owned their trademark, "GiGi New York" for certain leather goods it produces, but only filed an application for the trademark "GiGi" after Hadid's recent runway show.

A cease and desist letter is a tool that businesses use for any number of reasons: to stop harassment, assert ownership rights, or just want to formally tell someone to stop doing something harmful to you and your business. It lays the foundation that creates a paper trail for future action that may be needed, and can be tailored to be used much like an affidavit that outlines the facts and circumstances. But more importantly, it sends the message to the recipient that you take your business affairs seriously.

In a cease and desist letter similar to this situation hitting the news this week, the writer should include details about the copyrighted or trademarked work in question, proof that the writer holds the copyright or trademark and the instances where the holder of that intellectual property has been harmed by the recipient's infringement. Writers should include any documentation they have and, most importantly, what steps they expect the recipient to take to fix the infringement.

However, a business should not use a cease and desist letter unless it is ready to follow through on the consequences it lays out should the recipient refuse to respond. Failure to follow up with appropriate legal action may actually harm a business should it sit on its rights for too long.  Words in a cease and desist letter matter, so be ready to act as needed to protect your business.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.

Monday, September 12, 2016

What Businesses Should Learn From United States v. Texas Decision

immigration law, U.S. v. Texas
The Supreme Court’s decision United States v. Texas decision this past June upheld a challenge to a pair of executive orders on immigration. While the political rancor continues on the issue of immigration, especially on the grand stage of election politics, businesses should remain vigilant in the evolution of the law on this front.

First, businesses are still obligated to use Form I-9 to verify the legal status of new employees even though the form expired or be subject to monetary penalties up to $16,000 per violation.

Second, businesses relying on foreign skilled workers eligible for an H1-B visa should start planning for the next fiscal year as soon as possible. As a result of this decision, the cap on skilled foreign employees remains at 65,000. The USCIS has began accepting H1-B petitions for the 2017 fiscal year, with more than 236,000 petitions filed.

Clearly, businesses cannot turn a blind eye to immigration matters. The possibility of new opportunities to access an expanded workforce can be a boon to businesses, especially those located in large metropolitan areas where new immigrants tend to migrate. Also, the immigrants allowed to remain pursuant to the President's executive orders in question may no longer be protected from deportation or other penalty, so businesses must be sure that any worker who was effected by the executive order are still eligible for employment in the United States.

The law on immigration reform is in a volatile state. Even the outcome of the U.S. Presidential election will chart the course that the law will take, so business owners should keep a keen eye on both the state of the law and the state of American politics to see where immigration reform will settle.
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*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.

Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.