The New York Law Blog: July 2016
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Thursday, July 28, 2016

Legal News: Federal Government Considering New Debt Collection Rules

Photo Courtesy of www.consumerfinance.gov 
For the first time in nearly 40 years, the Consumer Financial Protection Bureau is proposing new rules that govern debt collection in an effort to clamp down on abusive collectors who frequently contact consumers, many of whom may not even owe money.

Debt collection is a multi-billion dollar industry.  According to the Urban Institute, one in three American adults, have a report of debt in collections. That equals over 77 millions Americans. The average debt owed is over $5,000 and typically involves a credit card balance, medical or utility bill  more than 180 days past due.  The CFPB has fielded over 250,000 complaints since 2011.

According to the CFPB, the safeguards suggested are those that debt collection companies frequently ignore, raising the specter of the prototypical company aggressively chasing customers.  The rules should also bring some consistency to what is now a hodge-podge of local, state and federal rules and regulations.

Under the proposed rules:
  • Collectors must confirm consumers' names, addresses, phone numbers and the amount owed before contacting them;

  • Collectors must disclose if the debt it is attempting to collect is too old for a lawsuit; 

  • Collector must add a “tear-off” notice so consumers can dispute the alleged debt. If the consumer sends a written dispute back to the company within 30 days of the initial collection notice, then the collector must provide a report substantiating the debt, and stop all collection efforts until all documentation is checked and the report is sent;

  • Collectors must limit attempts to reach a consumer to six communications attempts a week; and,

  • If the debt is sold to a new collector, the new collector cannot start collection its own collection efforts until any outstanding consumer dispute is resolved.
These proposed rules are a long way from becoming enacted.  The agency has a short and contentious history politically, as the Republican Party in the U.S. called it a “rogue agency” that should be abolished, according to the New York Times

So what does this mean for debt collection companies and consumers?  For companies, the process for collecting a debt may become streamlined, and some debts that are beyond an applicable statute of limitations may not be collectible.  For consumers, the proposed rules, if enacted, will provide additional avenues outside of court to dispute a debt and prevent unwanted and harassing phone contacts. 
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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, July 27, 2016

How Businesses Can Grant Legally Binding Authority To Agents: NY Agency Law Basics

Every New York business needs to understand the basics of conferring legally binding authority within an agency relationship.

Agency law deals with the relationship between an “agent,” a person that acts on behalf of another person, company, or government, usually called the “master” or “principal.” An agency relationship forms when a principal asks an individual to act with authority on behalf of the principal that binds the principal in some way.

Agency is a fiduciary relationship resulting from:
  1.  Consent by a principal to another that the other;
  2.  Shall act on behalf of the principal; and
  3.  Shall act subject to the control of the principal; and
  4.  Consent by the other to act as agent for the principal.
Under these circumstances, a principal will be liable for contracts entered into by agents when (1) the fiduciary relationship outlined above is established, (2) the agent acted with some kind of authority, and (3) a contractual obligation is created between the agent and a third party.

The idea of authority can be a tricky one to nail down.

An agency relationship can be, and often is, enforced by written agreements made through a power of attorney that grants "actual authority" that is printed in black and white. A power of attorney, or a real estate agency agreement are prime examples of principals granting actual authority.

However, where an agent lacks actual authority or the issue is in doubt, s/he may nonetheless bind a principal to a contract if the principal has created the appearance of authority, also referred to as "apparent authority," leading the other contracting party to reasonably believe that actual authority existed.  This exists to protect third parties who would otherwise incur losses.

Agents may also possess "inherent authority," which is derived solely from the agency relationship itself and exists for the protection of persons harmed by or dealing with the agent. This power arises only if required for the agent to exercise some actual authority granted by the principal.  For example, if a principal grants power to do some action, but doing that action requires doing something related or conditional to that action, then the agent acquires inherent authority to the related or conditioned action on behalf of the principal.

New York small business owners cannot be everywhere and do everything. Understanding agency relationships, and making the right choices as to who one grants authority will allow your business to run efficiently and smoothly.
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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, July 26, 2016

Yelp Alerts Reviewers To Business's "Questionable Legal Threats" In Response To Negative Reviews

NY Business sues for Negative Yelp ReviewSome businesses, including a New York dentist, have been turning to litigation to respond to negative reviews left about their businesses on the popular website, Yelp.

Yelp is a website that crowd-sources recommendations and reviews of local businesses. Many businesses see an increase in business activity based upon positive reviews and recommendations left on the website, while others believe that their business good-will and reputation are harmed by negative reviews that may or may not be accurate.

Buzzfeed recounts the story of a New York dentist that has sued at least 3 negative reviewers for speaking their mind about the services provided by this business. The increase in such activity has led Yelp to alert reviewers to businesses who make, in Yelp's words, "questionable legal threats" against reviewers speaking their mind. The story also states that Congress is currently considering bills designed to protect consumers from such lawsuits based upon negative reviews posted online.

The basis of many of these lawsuits seem to be based on a theory of defamation.  The legal elements of defamation in New York are:
  • a false statement;
  • published to a third party without privilege or authorization;
  • with fault amounting to at least negligence;
  • that caused special harm or defamation per se.
In New York, truth is an "absolute defense" to a claim of defamation. However, the costs of hiring an attorney and defending such a lawsuit has a chilling effect on these matters, as some reviewers choose to remove the negative review or settle out of court to save money and time. 

Litigation isn't the only way some businesses have chosen to combat negative online reivews. Businesses may attempt to stop negative publicity on sites like Yelp by including "gag" clauses into contracts for services provided to customers whereby the consumer gives up their ability to publicly criticize the business upon execution of the agreement. Some companies' contracts include a clause prohibiting consumers from saying anything at all about the company and its services. California and Maryland already prohibit "gag" clauses in contracts.  

As this is a developing legal issue, we expect consumer protections to be put into place at the federal and state levels, and highly recommend - whether you are a business or a customer - to consult with an attorney when it comes to all issues concerning defamation.  
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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, July 25, 2016

Recent Intellectual Property Law News: From iPhones and Flight Simulators To Cheerleader Uniforms

Recent News on Intellectual Property Rights
Intellectual property rights remain a significant issue throughout the world, as outlined in the variety of claims brought around the world over a wide variety of issues

  • In June, the Beijing Intellectual Property Bureau ordered Apple to stop sale of the iPhone 6 and iPhone 6 Plus for violating a Chinese company's patent on exterior design.

    Chinese regulators claimed that Apple violated a patent held by a Chinese company, Shenzhen Baili, for the exterior design of the 100C smartphone. According to Jurist, Apple plans on ending production of the restricted models while planning to appeal the decision. This ruling could create  create a harmful precedent for Apple throughout the entire country, which has seen its business negatively affected by obstacles of a growing Chinese technology field

  • In May, a US jury concluded that Google had not violated copyright laws where it used Oracle's Java programming language to develop its own operating system, Android.

    Jurors determined that Google's use of the Java language was considered "fair-use" under copyright law. The victory for Google eliminates Oracle's claim for $9 billion of Google's Android phone business. The verdict should also provide reassurance to software companies that their method of creating common, inter-operable software doesn’t put them in legal jeopardy. Instead, it will promote the practice of writing re-implementations of the systems used to pass information between widely-used software. 

  • This week, software developer Bitmanagement Software GmbH has filed a lawsuit against the United States Navy claiming it infringed copyrights through copying and installing the company's three-dimensional virtual reality software - BS Contact Geo - onto "hundreds of thousands of computers for which the Navy does not have a license," to aid in flight simulator training. Bitmanagement claims that between 2013 and 2015 while it was negotiating licenses, the U.S. Navy distributed and reinstalled the software on over 550,000 machines, but only paid for 38 licenses.

  • Intellectual property rights are not just about technology.

    Earlier in May, the United States Supreme Court decided that it will hear a copyright case which would further clarify when the feature of a useful article is protectable under a section of the Copyright Act. The Supreme Court will hear the case of Star Athletica, LLC v. Varsity Brands, Inc.and rule on the appropriate test to determine when a feature of a useful article is protectable under section 101 of the Copyright Act. Specifically, the case deals with designs on cheerleader uniforms, but the case is expected to have a broader impact. The US Court of Appeals for the Sixth Circuit ruled that Varsity Brand's designs were copyrightable.
If your business involves anything creative, innovative or unique, always consider how you are protecting that property.  Trademarks and patents keep your business competitive and protected.  
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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.

Saturday, July 23, 2016

Basic Ways to Protect Your NY Small Business From Fraud

NY Business Law, Fraud Protection
It's no secret that small businesses have a higher fraud rate than larger companies and non-business owners. That is because they are the most susceptible to attack due to their failure to take time to implement measures and internal policies to prevent fraud.

Fraud can come from any direction. A frequent source of fraud is credit card abuse – largely due to business owners failing to take the time to thoroughly review their bills or who mingle business and personal affairs. Fraud stems from a general failure of security across the business, from inadequate cyber-security to failure to run background checks.

You can increase your security and give you and your business the best chance to avoid being a victim to some common types of fraud and cyber-crime by following these tips:

Protect Your Financial Information:  Every business, from sole proprietors to employee-based firms, must make securing financial information their absolute top priority.

  • Separate personal finances from your business. Segregating accounts keeps criminals from getting their hands on all of your money. It also making accounting for tax preparation easier.
  • Use your credit accounts wisely. Don’t hand over your plastic or your card number to employees or companies with which you don’t have a familiar relationship. Switch to online bill pay or make sure you store paper bills securely. Likewise, use a secure mailbox for receiving and sending bills. If you don’t have one, deposit your mail directly at the post office (this goes for any mail that contains sensitive information – you don’t want to leave it lying around in an unsecured mailbox).
  • If you use online banking, monitor your accounts everyday for activity.  Also, if you must share your account information, limit access to any online accounts to one, trustworthy person and frequently update and change passwords accordingly. 

Secure Your IT:  Businesses who wisely invest in creating a sound plan for securing computers, internet access and other proprietary information are smartly protecting themselves from fraud. This includes:

  • investing in security software, including firewalls restricting internet access, anti-virus, malware and spyware detection;
  • regularly backing-up proprietary information and securely storing it;
  • using a dedicated computer for banking that is not used for social media, email or web-surfing;
  • developing a password policy that changes on a regular basis, like every 60, 90 or 120 days, that requires complex safeguards (capital letters, sufficient characters, numbers, etc.)

Conduct Employee Background Checks:  Fraud can come from outside or within.  Basic pre-employment background checks, especially for employees who may handle cash, high-value merchandise, or be granted access to sensitive customer or financial data, is a must for any business. I have seen first-hand how a failure to conduct a simple background check can shake a company.

Educate Yourself & Your Staff:  Trustworthy employees are your first line of defense against fraud. Train them on basic security threats and preventative measures. Create policies that guide employees on the proper use and handling of company information, financial data, personnel and customer information. Make them part of your team by communicating that their future employment depends upon keeping the business as secure as possible and that failure to do so will result in termination. Businesses that have zero-tolerance for failures may experience some employee turnover, but will be healthier and more secure in the long run than those don't.

Of course, there may be industry-specific measures you can take depending upon your particular business, so you should consult an IT professional, insurance companies and your legal team to minimize your business's exposure to fraud.
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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, July 22, 2016

When Business Goes Bad: Proving Fraud In NY

Proving Fraud in NY, Business Law
Fraud comes in different forms in New York, which recognizes both common law fraud and statutory fraudulent behavior that is challenging to prove.

In business, as in life, people are not always as reputable and they appear. Unfortunately, there are less than scrupulous business actors who will resort to fraudulent misrepresentation to gain what you have.

The elements of proving a fraudulent misrepresentation claim are that:
  1. the defendant made a material false representation; 
  2. the defendant intended to commit fraud against the plaintiffs; 
  3. the plaintiff reasonably relied upon the defendant's fraudulent misrepresentation; and 
  4. the plaintiff suffered damage as a result of their reliance. 
The burden of proving the elements of fraudulent misrepresentations is by "clear and convincing evidence" which is a substantially greater burden of proof than the normal "preponderance of the evidence" standard. Specifically, a plaintiff must establish evidence that it is highly probable that what plaintiffs claim happened, actually did.  This usually means that a plaintiff needs to establish at trial by clear and convincing evidence that a defendant had actual knowledge of some material fact and then specifically misled them with respect thereto.

Additionally, New York's Deceptive Practices Act (which is not to be confused with the Uniform Deceptive Trade Practices Act that does not apply in New York) includes NY General Business Law section 349, which prohibits deceptive business practices in the conduct of any business, trade, or commerce. This law is broadly construed and applies to a wide range economic activities and empowers consumers and gives them an even playing field in their disputes with businesses that are generally in a superior position.

According to the Court of Appeals of New York, the highest court in the state, NY GBL 349 has three elements: 1) the act or practice was consumer-oriented; 2) the act or practice was misleading in a material respect; and 3) the plaintiff was injured as a result of the deceptive act or practice. This is a much lower bar to meet when compared to common-law fraudulent misrepresentation because a plaintiff does not need to prove that the defendant intended to mislead the plaintiff.

New York's Deceptive Practices Act also specifically prohibits false advertising and odometer tampering (which is classified as a misdemeanor). This statute allows for criminal prosecution by the attorney general, as well as civil litigation by the party injured by the deceptive practices. If the plaintiff prevails on a deceptive trade practices claim, s/he may be awarded actual damages up to $1,000 (in cases of willful or purposeful deception), as well as the costs and fees associated with the litigation.
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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, July 21, 2016

IPG Legal Attorney Gene Berardelli Appearing on Brooklyn Independent Media's "BK Live"

This afternoon, I'll have the pleasure to appear on BK Live to talk about the Republican National Convention with Emmy-nominated show host Brian Vines on Brooklyn Independent Media!

BK Live is Brooklyn Independent Media's flagship program. It is a live daily show broadcasting from BRIC's street-level studio at BRIC House in Downtown Brooklyn that tackles a wide range of topics.

I will be appearing to discuss the Republican National Convention wrapping up in Cleveland, Ohio where Donald Trump was officially nominated for President of the United States.

BRIC is home to two distinct media initiatives: Brooklyn Free Speech, Brooklyn's New York Emmy-nominated Public Access initiative, and BRIC TV, a nonprofit community TV channel and digital network. Here you'll find an online TV guide showcasing all of the exciting content that airs on both networks.

And, it is a great platform for local exposure to community-minded individuals.



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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, July 20, 2016

Infringement vs. Fair Use? Protecting Federal Trademarks

NY IP Law, NY Business Law
Seems like a lot of high-profile trademark issues are happening all over New York. A recent federal matter outlines the basics of federal trademark litigation and the arguments a business may use to attempt to enforce a trademark or attempt to use a trademark.

A federal judge in New York state recently ruled that The Car-Freshner Corporation - which makes the pine tree-shaped air fresheners that hang in millions of vehicles across the country -  has demonstrated that it may lay claim to the tree-shaped symbol through its various federal trademark registrations and more than 60 years of use of the mark in advertisements and other marketing ventures.

Car-Freshner claims that Sun Cedar, a non-profit business based out of Kansas, violated the Lanham Act and New York Law by making and marketing a car air-freshener in the same tree-shape and using a virtually identical symbol that Car-Freshner has registered as its trademark as early as 1961. It further argued that Sun Cedar's designs are designed to confuse consumers and unfairly use Car-Freshner's product identity and good-will built up over decades for capital gain.

The Lanham Act (also known as the Trademark Act of 1946) is the federal statute that governs trademarks, service marks, and unfair competition. It sets out procedures for federally registering trademarks, states when owners of trademarks may be entitled to federal judicial protection against infringement, and establishes other guidelines and remedies for trademark owners.

Sun Cedar argued its use of an evergreen design is permitted under the statutory "fair use" exception to the Lanham Act. It argued that the tree symbol it uses differs from Car-Freshner's because it uses the word "Sun" in the base of the logo that appears on its packaging, website and other social media accounts.

The Fair Use Doctrine protects certain uses of registered trademarks from infringement claims when the use of the name, term, or device is “a use, otherwise than as a mark, of a term or device that is descriptive of and used fairly and in good faith only to describe goods or services of [a] party, or their geographic origin.”  Sun Cedar argues that this exception would allow it to use the registered "Little Trees" shape in ways that "describe the goods or services" for which their cedar fresheners are used, but not as marks identifying the products themselves.

But, the judge disagreed, ruling that Sun Cedar did indeed use the tree symbol as a mark to attract public attention and that it has not acted in good will at continuing to use the symbol. In ruling this way, the federal judge ruled that Car-Freshner presented a plausible claim that Sun Cedar's adoption of a cedar tree design that is nearly identical to it's registered tree design marks was intended to trade on the good will of Car-Freshner's trademark by creating confusion in the minds of consumers.

This is by no means the end of the argument. This decision was preliminary in nature and only rules that Car-Freshner has sufficiently pleaded a cause of action. It remains to be seen whether Sun Cedar's defense of "fair use" holds water.

There are lessons your small business can take away from this matter and its preliminary decision. You must be diligent and proactive in defending your trademarks, including registering them with the federal government. Also, "fair use" does not mean "free use" of a registered mark, and you must consider your good faith basis for "fair use" before you start using it in commerce for yourself.

Business identity and good-will are vital characteristics built by the business owner's growth over time. Do not let someone get a "free ride" on your hard work.
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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, July 19, 2016

NYC Landlords Sue To Overturn Second Year Of Imposed Rent Stabilization Freeze

NY Landlord-Tenant Law, NYC Rent Stabilization Law,
New York City landlords want the courts to intervene on the rent freeze on rent stabilized units that takes effect for a second straight year.

According to the Courthouse News Service, four landlords, Benson Realty LLC, Danielle Realty LLC, Milagros Huertas and Marilyn Percy, and the Rent Stabilization Association, a trade group that represents 25,00 landlords across New York City, filed a petition in Manhattan Supreme Court seeking to overturn an order adopted by the New York City Rent Guidelines Board that freezes rent increases at 0 percent for one-year leases and 2 percent for two-year leases. This is the second year in a row that the freeze has been ordered.

The petition claims that the Order in question is "arbitrary and capricious," as well as "constitutionally dubious" and asks the Court to annul the Order in question, declaring it unconstitutional under the 5th and 14th Amendments, alleging violations of the separation-of-powers doctrine and the taking of private property for public use without just compensation.  It also seeks to compel the NYC Rent Guidelines Board to draft a new version of the Order in accordance with Section 26-510 of the NYC Rent Stabilization law.

The petitioners claim that the law, which governs how rent stabilization is determined, states that the board must calculate increases "on the basis of cost increases experienced in the past year, its forecasts of increases over the next year, its determination of the relevant operating maintenance cost-to-rent ratios, and other relevant information concerning the state of the real estate industry" - not based upon affordability to tenants.

The landlords contend that any trouble tenants face in paying "reasonable rents is a problem caused by society at large, and must be borne by the public as a whole, not by a group of owners who are charging reasonable rents."
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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, July 18, 2016

Business Formation Basics: Factors To Determine Where to Organize Your Business

NY Business Law, Business Formation
New York businesses are not bound to incorporate within the state. In fact, start-up businesses in New York should consider incorporating outside of New York based on several factors for consideration. Some choose to keep things simple by incorporating or forming an LLC in their home state, while others opt for more "business friendly" states and incorporate in Delaware, Nevada or Wyoming.

Here are some of the more important factors to consider:
  1. Setup & Recurring Fees: While a minor consideration in the grand scheme of establishing and operating a business, you need to pay a one-time filing fee to the state’s secretary of state office in every state for forming your business.  That fee can be as low as $50 and as high as $455, depending upon the location.  After establishment, most states charge an annual fee to maintain your business along with submission of an annual report.

  2. Franchise Taxes: A franchise tax is levied by a state on corporations and other entities for the privilege of incorporating or registering to transact business in the state.The method for calculating franchise taxes varies by state. Some states charge a minimum tax regardless of earnings or losses, while others base their franchise tax on the number of shares and par value. Nevada and Wyoming charge no franchise tax at all.

  3. Legal and Court System:  A main reason why so many successful large companies are incorporated in Delaware is because it has a separate court to resolve business disputes that do not conduct jury trials. Many business owners prefer bench trials because matters are handled quicker and because juries are unpredictable and inconsistent.  

  4. State Corporate Income Tax:  In addition to federal taxes, most states also charge a state corporate tax on income. Nevada, South Dakota and Wyoming do not charge any corporate income state or a personal state income tax. Ohio, Texas and Washington have a tax on the gross company revenues. However, these advantages do not apply to a business located in another state - you cannot avoid your home state's tax structure by incorporating in another state. To take advantage of these benefits, you would have to physically move to the desired location. 
Based on these and other factors, states create a measurable "business climate" that many calculate to determine the best - and worst - states to conduct business. Forbes has compiled one such list. 

This list is far from exhaustive. Your specific business will also drive your decision. However, when determining where and how to set up for new business, you should be mindful of such factors and weigh them against your own business concerns. 
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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, July 15, 2016

New York Incorporation Comes With Disadvantages For Small Businesses

NY Corporate Disadvantages
If you reside in or near New York, it may be convenient to incorporate a business in New York. But before you do, you should know some of the disadvantages that come along with New York incorporation.

Business owners tend to desire the protection that incorporation gives to its shareholders’ personal assets. But you should know of a significant exception to that rule in New York. Under N.Y. Business Corporation Law § 630, the ten largest shareholders in any non-public company can be held liable for wage claims made by corporate employees. This includes salaries, overtime, vacation, holiday, severance pay and a whole host of other inclusions.

To compound matters, liability under this law is “joint and several,” meaning that a claimant can enforce a judgment against just one of the ten largest shareholders, who would then have to seek contributions from his or her fellow business owners - which can lead to all kinds of strife within a corporation.

This exception is not without its own limitations. There are legal hurdles, like notice requirements and time limits on acting to invoke this provision. Additionally, in order to recover, the employee must have already obtained a judgment against the corporation itself and the corporation must have failed to pay the judgment.

But there is a way to avoid this whole statutory scheme.

New York’s Court of Appeals has held that NY BCL § 630 doesn’t apply to corporations incorporated in any other state. This is one of many reasons why businesses located in New York consider incorporating in another state (like Delaware, which lawyers consider to have the most favorable corporate laws in the nation) and then register to do business in New York as a foreign corporation.
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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, July 14, 2016

International Legal News: Emails Held Overseas Are Not Subject To U.S. Warrant

NY IP Law, Microsoft, Legal News
The Second Circuit in New York recently handed down a ruling that emails held in servers overseas are not subject to a warrant issued in the United States. 

Judge Susan Carney ruled that the government cannot use a domestic search warrant to compel disclosure of email data stored with a U.S. company outside the United States. Many are calling a victory for privacy rights for individuals and businesses.  

The New York-based 2nd U.S. Circuit Court of Appeals interpreted the Stored Communications Act of 1986 in a matter where the U.S. government had sought emails in connection with a drug trafficking investigation from Microsoft. Microsoft objected to the warrant, citing privacy rights provided under the law because the customer's emails were stored exclusively on a server in Ireland. Federal prosecutors argued that exempting the emails would create a loophole that would keep criminals' information out of reach. The decision overturns a 2014 decision which implicitly authorized  production of data stored overseas.

The case attracted strong interest from the technology and media sectors concerned that giving prosecutors power to collect data outside the country would put the U.S. at a competitive disadvantage. Indeed, many media and tech companies - and even the U.S. Chamber of Commerce - filed briefs in support of Microsoft's position. 

This decision seems to attempt to strike a balance between protecting privacy, respecting borders in the digital world, and reasonable efforts to prosecute criminal activity. We here at IPG expect the U.S. Congress to take up revising and amending the Stored Communications Act in light of this decision to enable domestic warrants to reach beyond these digital borders.
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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, July 13, 2016

Possible Legal Concerns Created By Pokémon GO & Other Augmented Reality Games

NY Business Law, Pokémon GO, New York Legal News
With the creation of "augmented reality games" like the wildly popular Pokémon GO, attorneys will be considering the possible legal issues that may arise.

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. In the case of Pokémon GO, fictional creatures are projected onto a mobile device's camera through the game's app.

With all new technology comes new questions for lawyers to consider. The possibilities are endless, but the American Bar Association has tried to outline what other attorneys are thinking.

For players, there is the danger of wandering through the world while distracted by their mobile device. These augmented reality games may lead to conflict and complications between players and non-players enjoying public and private spaces, which may lead to violent confrontations.

For government, law already exists prohibiting distracted driving with mobile devices - it is not much of a stretch to contemplate laws restricting mobile device usage while crossing streets in pursue of your next Pokémon. As public spaces become a game board, local government may want to consider limiting or apportioning spaces for play, which could lead to First Amendment challenges.

For businesses, owners may wish to consider whether it will cater to these gaming crowds. For example, bars, restaurants and other retail locations will have to weigh the potential business benefits of welcoming gamers to their establishments with the legal complications that may arise.

For other property owners, these games may mean an increased possibility for over-zealous gamers trespassing on their properties. Vacant land and other attractive nuisances may be secured with sufficient warning to everyone, or may result in exposure to liability.

As for the legalities within the Pokémon GO app itself, the terms of service disclaims liability for property damage, personal injury or death while playing the game.  It also disclaims liability based on violation of any other applicable law. Pokémon GO also generally requires arbitration of disputes that may arise.
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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, July 12, 2016

Federal Trademark Basics: What You Can Learn From The "New York Fashion Week" Trademark Controversy

NY IP Law, NY Business Law, Trademark Law
A growing controversy over the use of a widely-known phrase in the New York fashion industry is a perfect example of why you need to protect your trade names and marks immediately.

If you are fashion-forward, or a New York resident, then you have probably heard of the phrase "New York Fashion Week," which signifies a week-long grouping of events where designers reveal their latest creations put on by the Council of Fashion Designers of America (“CFDA”) and WME-IMG (formerly known as William Morris Endeavor.)

Recently, CFDA and WME-IMG were sued by Fashion Week, Inc. for infringing upon its use of the trademarked phrase “New York Fashion Week." The lawsuit follows a ruling from earlier this year by the Trademark Trial and Appeal Board (TTAB) determining that CFDA and WME-IMG do not have legal rights to the name.

In that trademark proceeding, CFDA argued that the trade organization and "its predecessors-in-interest have established rights in / to the mark "New York Fashion Week" through its continuous use of it in commerce since 1994 - prior to October 4, 2013, which Fashion Week, Inc. first used it, according to its registration. These dates are significant because the U.S. trademark system is run on a "first-to-use" basis, meaning that trademark registration with the USPTO doesn't create rights or priority over others use the same or similar trademarks. In short, whoever used it first, in this case, the CFDA, owns the trademark.

Normally, this is a solid legal argument.  But, the problem CFDA ran into is that it sat on its rights.

According to the TTAB decision, CFDA failed to take sufficient measures to effectively prosecute its case after it filed a Petition to cancel the registration against Fashion Week, Inc. Fashion Week, Inc. took advantage of this by asking the TTAB to dismiss the case, which it did.

This leaves CFDA in a very poor situation.  CFDA cannot use "New York Fashion Week" without Fashion Week, Inc's permission.  Fashion Week, Inc. also owns  “NYFW” as a federally registered trademark in connection with “[e]ntertainment in the nature of fashion shows," and "[o]rganization of fashion shows for entertainment purposes.” Fashion Week, Inc. has also applied for the trademarks “New York Fashion Week The Shows” and "NYFW The Shows" with the U.S. government.

There are many lessons to learn from this cautionary tale.  First, just because you use a mark does not necessarily make it yours.  Second, do not sit on your rights when it comes to competing for a trademark - because someone else may recognize the value of your trademark and take it out from under you.  Finally, you need to be proactive in your approach to defending your trademarks, which includes hiring a trademark attorney to register and monitor your trademarks.
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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, July 11, 2016

New York Legal News: No More Private Settlements of Federal Fair Labor Claims

Several federal district courts and federal circuit courts of appeals - including those affecting New York -  have issued decisions characterized as overly-protective toward plaintiffs in Fair Labor Standards Act (FLSA) cases.

In Cheeks v. Freeport Pancake House, an employee brought a claim for overtime wages against his employer under the FLSA and New York Labor Law. After the parties reached a private settlement and filed a joint stipulation of dismissal with prejudice, the district court rejected it, holding that a FLSA plaintiff cannot enter into a private settlement stipulating dismissal with prejudice without either court approval or without that of the U.S. Department of Labor.

The Second Circuit Court of Appeals, which includes New York within its jurisdiction, affirmed the trial court decision.

This ruling separates FLSA cases from the default provisions contained in the Federal Rules of Civil Procedure which set forth the general rule that parties may stipulate to dismissal of an action without court involvement.

However, the Second Circuit ruled that "the unique policy considerations underlying the FLSA," constitutes an "applicable federal statute" outside of those default rules. The Second Circuit also cited the potential for abuse to plaintiffs employees in private settlements that make outside supervision necessary.

This is significant for employers in New York, who now cannot simply settle federal employment law disputes without leave of court or supervision by the Federal government
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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, July 8, 2016

Proven Negotiation Tactics For New York Small Businesses

NY Small Business, Negotiations
When you are running your own business in New York, you must become a skilled negotiator for your goods and services.

In its simplest form, negotiation means a discussion between parties looking to reach an agreement. While the concept is easy to understand, the process of negotiation is as much art as it is science.  As a start on your road to becoming a good negotiator, here are some basics to think about before beginning your own process.
  1. Know Your Worth: Many people feel that the hardest thing to learn is their own self-worth. You and your business have much to offer - know that you are good enough to ask for the money you want! If you don't believe in yourself, how do you expect to convince someone else?

  2. Understand Your Worth: Information is power. Know the industry that your New York business competes in, and know the industry of the business or services that you are negotiating. Learn the going rate in your market for your services and the services you are negotiating to obtain. The more you know, the more you can convey in your negotiation, and the more you can feel your own worth.

  3. Develop a Plan: To prepare further, develop a plan for the negotiation itself. This is where your instincts will matter. Think about what information you have and when you wish to use it. If you are soliciting services from someone else, you may want to let them explain their services before you reveal what you know of their services. If you have a special skill that increases your New York business's value, you may wish to hold that back as a rebuttal statement. This has as much to do with feeling out your negotiating partner as it does finding your own presentation style. Negotiation plans are as much about educating yourself as educating your negotiation partner in a persuasive manner. 

    Part of your plan should also be a real evaluation of what you believe your services are worth and what you are willing to accept for your services. This is a balancing act between what is the higher end of what you can reasonably charge or pay versus what you are willing to accept to pay or charge. Hopefully, your skills will land you closer to the former than the latter. 

  4. Focus on Your Goal: Remember, the goal is not to "beat" the other side - the goal is to come to an agreement that everyone can be happy about so that you can develop an ongoing and prosperous business relationship where you consider each other equals.

    This also means recognizing, should that goal be unattainable, when to walk away. Chances are there will be another negotiating partner on the horizon where you both can benefit. 

  5. Recognize When You Need Help: Negotiations can be simple or extremely complex based upon the terms being negotiated. Recognizing that you are in over your head and require the assistance of an attorney is just as shrewd of a business decision as you can make for a negotiation. 
Developing negotiation skills is key to running a business in New York. The more you develop these skills, the better your chances that your New York business will grow and thrive. 
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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, July 7, 2016

NY Commercial Lease Basics: Different Types of Commercial Leases

NY Landlord-Tenant Law, NY Real Estate
When negotiating your commercial lease in New York, it is important that you know the types of leases that will be offered to your business.

There are different types of commercial leases and a number of alternate names and abbreviations that can be confusing. The basic structures mainly differ based on what the tenant is responsible for paying in addition to the base rent term each month:
  • In a Single Net Lease, or Net Lease, the tenant generally pays utilities and property tax in addition to base rent. The landlord usually pays for maintenance, repairs and insurance;

  • In a Double Net Lease, or Net-Net Lease, the tenant pays for utilities, property taxes and insurance premiums for the building in addition to the base rent. The landlord usually pays for maintenance and repairs.

  • In a Triple Net Lease, sometimes written up as a Net-Net-Net Lease, the tenant is generally responsible for all costs of the building in addition to the base rent. The landlord is only generally responsible for structural repairs. I have even seen this referred to as a "hell or high water lease" because tenants virtually step into the place of the landlord, including for liability to third party claims. 

  • In a Full Service Gross, or Modified Gross Lease (also referred to as a modified net lease): the landlord and tenant split structural repairs and operating expenses (property taxes, property insurance, common area maintenance (CAM), and utilities), and called that ‘base rent.’

There are advantages and draw-backs to each kind of lease. For example, Triple Net Leases tend to be more landlord-friendly because it transfers a lot of the landlord's responsibilities to the tenant, and the lease can also fluctuate from month to month and year to year as operating expenses increase or decrease, making the company's expense forecasting tricky and sometimes frustrating. On the other hand, tenants benefit from a Triple Net Lease because the tenant can finding cost savings in operating expenses and save on their own bottom line.

As you can see, there are many different commercial leases that each contain different and confusing terms. With any lease out there, New York businesses recognize that the devil’s in the details. Determining which lease suits your needs, your particular business and your finances is a serious matter.
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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, July 6, 2016

Consumer Safety Alert: 500K "Hoverboard" Scooters Recalled For Fire Hazard

If you purchased a "hoverboard" self-balancing scooter in the past year, be aware that ten major companies and retail stores that produced over 500,000 of them have issued a recall of the devices.

The recall is due to a design defect where the lithium ion battery packs overheat, posing a risk of the hoverboard smoking, catching fire and even exploding. Most of the defective "hoverboards" were purchased from June of 2015 to May of 2016 for between $350 and $900.

According to the Wall Street Journal, self-balancing scooters that don’t meet a new safety standard that governs the electrical drive train system, including the battery and charger system have been recalled. The U.S. Consumer Product Safety Commission endorsed the standard, called UL 2272, in February.

To date, defective "hoverboards" have caused over $11 million in property damage, and according to the U.S. Consumer Protection Safety Commission, have caused 99 incidents where the design defect caused an injury.

This tendency for these "hoverboards" to overheat and catch fire is one reason why the New York City Transit Authority has banned them not only from use on trains and platforms, but from even being carried by pedestrians on its properties and vehicles.

The U.S. C.P.S.C. warns consumers to immediately stop using these recalled products and to contact the recalling company. Click here to see which companies are participating in the recall. Companies will be offering full refunds, free repairs or a free replacement depending on the model.

If you or someone you know has been injured by a "hoverboard" scooter, we advise you to contact our office immediately so that you can reserve all your legal rights and remedies.
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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, July 5, 2016

New York Legal News: Settlement In VW Emissions Scandal Imminent?

VW Settlement, VW Emissions Scandal
Courtesy:  Daily Telegraph
New York is set to accept a partial settlement in the Volkswagen emissions case pending in U.S. Federal District Court.

Currently, 44 states have signed off on a settlement whereby VW would pay $14.7 billion to settle claims that it deceives states and customers by fraudulently misrepresenting its vehicles' emission numbers, in clear violation of state environmental laws and regulations.

Last September, the Environmental Protection Agency (EPA) issued VW a notice of violation of the Clean Air Act after it was found that Volkswagen had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate certain emissions controls only during laboratory emissions testing. That caused the vehicles' emissions to meet US standards during regulatory testing but emit up to 40 times higher emissions on the road for 500,000 cars on the road in the U.S. from 2009 to 2015. The scandal extends across the world to 11 million vehicles in the same time period.

This emissions scandal had been the subject of over 30 class-action lawsuits in the United States and Canada on behalf of VW car owners claiming breach of contract, fraud, false advertising and statutory violations. Litigants claim that the "diminished value" of cars that fail to conform to federal and state law have damaged them. All the matters were then consolidated into one action

As part of the settlement, 21,500 VW owners in New York would be able to send their cars back to Volkswagen plus receive at least $5,100 cash back, and VW will provide New York with $145 million in funds for environmental programs and additional recoveries.
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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.

International Law Basics: Authenticating International Documents In New York

International Law, NY Business Law, Apostilles in New York
If you want to enforce a judgment, or any other international document, headed to or coming from another nation, you should understand the process by which those documents are authenticated.

An American court will not take a foreign document at face value. It must be authenticated before it can be considered.  That means the document must go through a process of authentication, or legalization.

The easiest method is to obtain an Apostille, which is an authentication of a public document that governments issued if they are a party to the 1961 Hague Convention abolishing the Requirement of Legalization for Foreign Public Documents.

The Convention provides for simplified certification of public and/or notarized documents to be used in countries that have joined the Convention. Signatory countries have agreed to recognize public documents issued by other signatory countries under the conditions contained in the Convention, which includes attaching an internationally recognized form called an Apostille.

The New York Department of State has an application process by which you can obtain an Apostille, as do Consulate Offices of other signatory countries here in the United States.

If the nation to/from which is not a party to the 1961 Hague Convention abolishing the Requirement of Legalization for Foreign Public Documents, the Legalization process can be much more complicated, and may require authentication of documents by courts, embassies and/or agencies in both countries. We encourage you to consult with the U.S. State Department's Office of Authentications should you be dealing with a nation that is not a part to the Convention.

The Legalization process requires multiple layers of authentication in the nation where the document was produced before it can be received and accepted as authentic by the United States, which may also review the authenticity of the document at the federal and state level. Overall, this process can take much longer to complete.

In either event, the process by which you must authenticate international documents can be tedious and complicated.  Our office regularly handles such issues and can streamline the process for you and 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.

Saturday, July 2, 2016

New York's Confusing Fireworks Laws

New York Fireworks Laws
With Independence Day upon us, this would be a good time to review whether consumers can purchase fireworks legally in New York, which has created a confusing system.

Only three states - New Jersey, Massachusetts and Delaware - completely ban consumer fireworks. Since 2011, seven states — including New York — have lifted restrictions on the sale of most types of consumer fireworks. The reason for this to allow New York to collect the additional tax revenue that the sales raise.

Not all fireworks are for sale to the public in New York. New York only allows consumers to purchase and use ground-based or handheld sparkling devices, including cylindrical fountains, cone fountains, and wood sparklers/dipped sticks, as well as party poppers and snappers. Metal wire sparklers are not legal because they stay hot for a long time after burning out and retain heat long after use.

But, this is where it gets complicated.

County governments must "opt-in" to allow fireworks sales within its county boundaries. To date, only 31 of the 62 counties have opted-in. New York City has not. Click the link to see which counties have opted-in.

The law also limits the dates fireworks can be sold. In the counties that have opted-in, fireworks can be sold June 1 through July 5 — and then again from Dec. 26 through Jan. 2 — only to buyers 18 or older.

It is illegal to possess and use fireworks in counties that did not opt-in to the change in the law, even if you legally purchased them in a county which opted-in. So, if you buy legal fireworks in a county that opted-in, but use them in a place that did not opt-in, then you are breaking the law.

Also, it is still illegal in New York to sell and purchase any device that shoots up in the air, or sends out a projectile, such as aerial consumer fireworks, firecrackers and chasers, skyrockets, Roman candles, and bombs.

The best advice we could give you in navigating New York's fireworks law is to check out a fireworks display in your area - it's a lot more fun to watch them go off in a controlled environment than it is to spend a day in court and explain getting caught with illegal fireworks that may have been legal when you bought them.
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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, July 1, 2016

Foreign Nationals Can Start Businesses in New York

Immigration Law, NY Business Law
If you are a foreign national living in New York, it is not impossible for you to start a business and follow your American dream.

If you are looking to start a business in New York as a foreign national or resident alien, you should be aware of the immigration requirements before you get started.

According to the U.S. Small Business Administration, aside from U.S. citizens or naturalized citizens, if you are an individual with the following immigration status, then you can start a business in America:
Green Card Holders – Also known as “permanent residents,” green card holders can work, live and study in the U.S. while maintaining their foreign citizenship. They can also join the armed forces and start a business. 

EB-5 Investor Green Cards
– The EB-5 Immigrant Investor Program is administered by the U.S. Citizenship and Immigration Services (USACE) and enables entrepreneurs, their spouses, and unmarried children under 21 to apply for a green card. Up to 10,000 visas are issued each year. Applicants have to meet very specific criteria including making an investment in a commercial enterprise in the U.S. ($1,000,000, or at least $500,000 in a targeted employment area (high unemployment or rural area) and plan to create or preserve 10 permanent full-time jobs. The process is fraught with pros and cons. Consult an immigration lawyer to understand the full implications of an EB-5 green card. Learn more about getting a green card through investment.


Other Immigrant and Non-Immigrants Visas
– The USCIS’s Entrepreneur Visa Guide provides a menu of possible visa pathways for foreign entrepreneurs. Whether you are looking to explore or start a business, or are already in business and want to immigrate permanently, your options are extensive.
We agree with the SBA when it says that it's advisable to seek help from an attorney to help you get started with obtaining your American dream.
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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.