Articles Posted in Commercial Law and Litigation

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New York has always been in-demand as far as real estate goes, but when property prices started to soar a few years ago, the rush to build new structures to meet the rising demand was feverish. chrysler.jpg

The problem, however, is that it now appears many of those jobs weren’t done correctly. In what appears to be a repeat of the last housing boom, it seems many construction companies were more concerned with meeting deadlines and cranking out more buildings, as opposed to ensuring they were erecting a quality product.

Among the growing number of complaints:

  • Balconies that are cracking;
  • Concrete flaking from the exterior walls;
  • Basements prone to flooding due to inadequate drainage-sewage connections;
  • Inadequate insulation;
  • Water filtration problems;
  • Malfunctioning elevators.

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In a recent commercial landlord-tenant dispute in New York City, the owner of a new business slated to open where a Chinese restaurant once operated is seeking $22 million from the landlord due to a termite infestation, as well as other structure problems that have so far required extensive repairs.
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The BBQ restaurant plaintiff alleges in the New York State Supreme Court filing that the landlord first lied about the condition of the First Avenue structure, and then attempted to initiate an eviction of the tenant when repairs were demanded.

The series of structural issues with the building has delayed the opening of the business for several months, leading to hundreds of thousands of dollars in lost revenue. That’s in addition to the $600,000 monthly rent it pays, as well as the $3.1 million it has so far invested in repairs on structural deficiencies that were “almost too many to count,” the plaintiff said.
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New York City’s ban on large soda has drawn the ire of a number of businesses throughout the city, where the beverage industry has filed suit to prevent it from going into effect as planned next March. soda.jpg

New York City commercial law attorneys are carefully watching the developments of Soda Industry et. al., v. New York City in the New York Supreme Court.

The Soda Industry, in conjunction with 11 other organizations, is seeking to stop the measure that would ban businesses from selling sugar-laden beverages larger than 16 ounces.

Interestingly, the industry is challenging the measure not so much on substance, but on procedure. In a 61-page complaint filed in mid-October, the plaintiffs outright say that the case, “is not about obesity in New York or the motives of the (New York City) Board of health in adopting the rule being challenged.” Rather, the plaintiffs allege that the New York City Board of Health, which passed the measure, does not in fact have the legal authority to do so. Instead, they argue, such legislation would have to passed by City Council, as have similar measures, such as requiring chain restaurants in the city to post calorie labels and banning smoking in all restaurants.

The plaintiffs say that the ban serves to usurp the role of the council, which violates the core principals of a democratic government.

Further, they allege that the ban unfairly harms small businesses and burdens consumers. Namely, they point to the hypocrisy of the measure when there are exceptions made for drinks favored by affluent customers, such as high-calorie coffee beverages, wine and alcohol-based drinks.

But the issue is more about the way in which the ban was enacted. The Board of Health, as the plaintiffs noted, is appointed almost entirely by the mayor, who proposed this measure in the first place. The board moved to act upon the measure, even as 90,000 people had signed a written petition to stop it.

The measure passed in mid-September, and imposes a $200 fine for each violation.

The city counters that the board does, in fact, have the authority to “create regulation that promotes healthier living.” In fact, the city contends that is the whole point of the board, which holds that obesity is an epidemic that kills some 6,000 New Yorkers annually and negatively impacts the health of thousands more, including children. Mayor Michael Bloomberg says the city spends approximately $4 billion annually on medical care for people whose primary problem is obesity. In fact, one in eight New Yorkers reportedly suffers from diabetes, which is most often directly attributed to obesity.

But again, the plaintiffs say it’s not about all that.

The plaintiffs note that it’s clear the reason why the measure went through the board, rather than council, is because it would likely not pass in the latter. It was noted that even some council members had been instrumental in circulating that petition to fight the ban.

The ban would affect not only restaurants, but also food carts and any other establishment that gets letter grades for its service of food. However, grocery stores would be exempt.

Some of the most vocal critics have been large corporations, such as Coca-Cola and McDonald’s, who say the measure is “misguided.”
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Great Neck business litigation lawyers realize that commercial contracts are about more than simply one party keeping their word. colorwheel.jpg

As multiple New York business litigation lawsuits have illustrated, violations and breaches of contracts can be the downfall of a business. That’s why it’s so critical to have a business attorney reviewing the contract even before it’s signed, as well as immediately upon the first hint that there may be a violation or breach.

This is what happened in the case of New York City-based commercial printer, Color-Web Inc., which is suing a subsidiary of their bank, People’s United Financial Inc. The civil suit alleges breach of contract and fraud, and the company, which has been forced to close, is seeking about $14 million in damages.

Color-Web, which was a printing firm and a subsidiary of 1800postcards.com, said that People’s Capital back-tracked on its 2007 promise to provide financial backing in the amount of $4 million for funding of new technology for the firm. This technology included a custom-built printing press. This was an extremely expensive piece of equipment, and one that the company had been counting on to revolutionize its business.

With the promise of funding, the company put $200,000 down on the printing press and proceeded to re-work its entire business model around this new equipment, which was set to be delivered in late 2009.

But then the bank reportedly pulled its financing – in violation of their signed agreement. The equipment was never delivered, and Color-Web’s business began to plummet. Primarily, the company said that the changes it made in anticipation of the new machinery were not quickly reversible. Business suffered greatly as a result.

The lawsuit alleges that the bank did not base this decision on performance issues that Color-Web had, but rather on the economic downturn. However, Color-Web says that banks, as financial institutions, have to be held to higher standard with regard to contracts, especially considering that 1800postcards, the city’s largest commercial printing company, has continued to honor its financial obligations with the bank, despite the financial hits it’s taken since the economy tanked.

The bank’s decision, company owners say, was enough to put the business under and cause more than 100 employees to be out of work.

Making the situation worse, Color-Web had signed on for a 15-year lease contract with a landlord in New York. If the landlord doesn’t release the company from that contract, it could be out even more money. If that happens, attorneys say they plan to increase the amount being requested from the bank for damages.

This case is actually a counter-suit to the original claim, which was filed by the bank in order to recoup the $200,000 deposit. Color-Web has counter-sued, and the case is being heard in the New York State Supreme Court.
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New York City commercial litigation attorneys know that Steve Rothstein was right about one thing: It’s not easy to take on giant corporations. airplane.jpg

Rothstein is embroiled in what has now been a highly-publicized New York City commercial litigation contract dispute with American Airlines, which revoked Rothstein’s unlimited air pass amid allegations of fraud.

Rothstein rightly concedes that large corporations have deep pockets and will fight tooth and nail to protect their bottom dollar. Of course, when you’re in the right and you have a skilled New York litigation attorney with decades of experience, your odds of winning are much greater.

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A recent appeal between two restaurants with the name Patsy stems from allegations of trademark and unfair competition in New York City based on the name of the restaurant.

These matters and others between businesses must be taken seriously because these issues are the very lifeblood of a company. If a business’ very name is being ripped off by another, it must be defended. If consumers can get confused by the name of a business, that can translate to lost dollars and loss of value in the marketplace.
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In this case, Patsy’s Italian Restaurant, Inc., et al. v. Banas, et al., the owners of Patsy’s Italian Restaurant got into a legal battle with Patsy’s Pizzeria over the name “Patsy’s.” At issue was whether each chain of Italian food and pizza fraudulently obtained trademark registrations from the Patent and Trademark Office.

The lower court also refused to reinstate Patsy’s Pizzeria’s trademark registrations. Both sides then appealed and yet the appeals court upheld the lower court’s rulings. After years of litigation, the panel of judges ruled that neither establishment can use the name “Patsy’s” as its own.

According to the New York Post’s account, the jury found that a Long Island franchise of Patsy’s Pizzeria was using the name of Patsy’s Italian Restaurant. Both restaurants claimed the late Frank Sinatra loved their food best. A Brooklyn judge ruled that neither establishment could use the name “Patsy’s” alone and required the pizzeria to put a sign on the door saying the two weren’t affiliated.

Patsy’s Pizzeria claims it was the first to sell pizza by the slice, while Patsy’s Italian Restaurant claims to have the blessing of Sinatra.

While Patsy’s Italian Restaurant has been operating since 1944 and Patsy’s Pizzeria since 1933, both have existed without lawsuits until recently, the appellate court’s ruling states. In 1998, both began selling packaged sauce under the name “Patsy’s,” which caused “considerable consumer confusion,” the judges wrote.

And they both sought to have the other company’s trademark cancelled. It was difficult to determine which company entered the sauce market first as the alleged date was “clearly falsified,” the court wrote.

Because of these issues, the two companies have gone through years of litigation in trying to protect their brand and to make sure customers don’t get confused about where to spend their precious dollars. Every market is competitive and therefore, a business must do all that it can to protect itself.

That can range from official complaints to full-scale lawsuits. Properly written contracts, licensing agreements and intellectual property matters are all issues that must be ironclad for a company to continue on successfully. Once one company has found a niche or is doing well, others will catch on and try to emulate the product or the strategy in order to latch on and make money themselves.
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Many people were shocked in the spring, when Mattel was ordered to pay an $89 million jury verdict to rival MGA Entertainment over a dispute involving the popular Bratz dolls. New York Business Litigation Attorney Blog reported on the verdict in May.

Imagine their shock now, after a judge ordered Mattel to cough up an addition $220 million, bringing the total to a whopping $309 million for violations of copyright and trade secret laws in New York. The judge reduced the initial verdict to $85 million, but then added $85 million in punitive damages and $137 million in legal fees, which have piled up since 2004.
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The case highlights the high stakes that businesses are in when they go head-to-head in court over a business law matter. This case also highlights the importance of strongly and clearly worded employee contracts.

The Bratz dolls, introduced in 2001 as a hipper version of other dolls on the market for girls ages 9 to 11 had pouty lips and hip-hop clothing. They were popular when introduced nearly 11 years ago.

The central issue of the lawsuit was that a Bratz designer created the dolls while he was employed at Mattel. The case also dealt with allegations that Mattel tried to crush the doll line because it was giving the long-standing Barbie doll a tough time in the market for girls’ dolls. The company alleged Mattel hired spies to find out information about its designs.

Mattel, however, accused MGA of stealing the idea for Bratz and then covering up any evidence the concept wasn’t created by them. During the initial trial, a jury sided with Mattel and awarded $100 million, but an appeals court overturned the verdict and sent it back for retrial.

At the second trial, a jury rejected Mattel’s claims of copyright infringement and found the company had stolen 26 trade secrets worth an $88 million verdict. Legal fees have reached nearly $600 million, the report states.

As you can see, business law matters can be contentious and expensive. But it is necessary for a company to protect its intellectual property — that is copyrighted material, ideas, secrets and other creations. Without protecting those things that have made a company unique and profitable, they will often lose out to a competitor. Trade secrets and other ideas pertinent to the future success of a company must be held tightly and if they are stolen, competitors must be held accountable.

And, as this case shows, a well laid out employment contract is critical. Allowing employees who know the secrets, the ideas and the battle plans to go to rival companies without consequence can be the death of a company. It is important to make sure contracts with prospective employees are worded to protect the business. These documents must be legally sufficient and include contingencies.
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A sixth teen in Minnesota has filed a lawsuit against a school district there, alleging her school’s staff members didn’t do enough to protect her from bullying. A Missouri school district faces a lawsuit alleging the school didn’t protect a student from being raped.

Those headlines are not what school districts in New York or anywhere want to see, mainly because of a student being injured, but also because of the potential financial impact a large settlement can have on the remaining students who are attempting to learn and prosper there. Education Law in New York has many facets and can include lawsuits filed against school districts, teacher-school district conflicts and even class-size and funding issues with the state.
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In the Minnesota case, a lesbian teenage girl claims she was punched and called slurs after attending a middle school there and alerted authorities, who did nothing to protect her. It is an add-on lawsuit filed by five other students who are being flanked by the Southern Poverty Law Center and the National Center for Lesbian Rights.

The lawsuit claims the steps officials took after hearing about the bullying were “grossly inadequate,” with some students being told to stay out of the way and lay low, Time reports. The plaintiffs want to get rid of the school district’s sexual orientation policy, which instructs staff members to be neutral on sexual orientation matters.

In the Missouri case, a middle school girl alleges school officials didn’t protect her from a male classmate, who allegedly harassed her, sexually assaulted and raped her. The special education student alleges she told officials about the events during the 2008-2009 school year, but they allegedly said they didn’t believe her, according to the News-Leader.

The lawsuit also alleges school officials forced the girl without her parents’ permission, to write a letter of apology to the boy and hand-deliver it. She was expelled and disciplined for filing a false report. When she returned to school, the harassment and assaults continued, and because the school didn’t believe her, she didn’t report the abuse. But her mother took her to get an exam, which showed she had been sexually assaulted and that the boy’s DNA matched samples taken. The boy pleaded guilty to the charges, the lawsuit states.

Both of these situations are tragic because students were injured. And New York school districts aren’t immune to these types of allegations and situations. It’s possible that school officials didn’t do enough to protect these students and, likewise, it’s possible the school staff did their jobs, but bad things still happened.

As stated above, education law can pertain to on-campus attacks and the school’s response, the accommodations given to special-needs students and even the battles between school districts and the state on matters of funding, teacher pensions in New York and other matters. Sound legal representation is needed in all cases to ensure a client’s rights are protected.
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A U.S. appeals court recently ruled it is unlawful to import and sell copyrighted works created outside the United States without permission from the copyright owner.

In a 2-1 decision, the 2nd U.S. Circuit Court of Appeals ruled that a man going to school at Cornell University violated the copyrights of publisher John Wiley and Sons when he sold less expensive editions of the company’s textbooks in the United States that were produced abroad.
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This ruling strengthens the rights of companies whose published works and products are created for cheap in other countries and then sold here or abroad for much less than they would by the original company. These New York intellectual property matters are prevalent throughout the city, where street peddlers try to sell everything from knockoff watches and designer bags to DVDs and movies that are still being shown in the theaters.

Copyright law is essential for any company that produces something because it allows recourse for those who unlawfully copy or rip-off the product. Intellectual property is the area of law that deals with a patent or copyright of a business’ products in order to protect them from outsiders who try to profit from the original company’s hard work.

In this case, according to the article, the ruling was based on a doctrine that establishes that the owner of a copy made lawfully under the Copyright Act can distribute the copy freely without the copyright owner authorizing it. But judges on the appellate court panel decided the rule in the Act only applies to products made inside this country.

To rule otherwise, the majority said, would defeat the purpose of a section of the law that stops a person from buying copyrighted works outside the country and bringing them in without the permission of the copyright’s owner.

But while other circuits, as well as five New York district judges have ruled in favor of copyright owners in other cases, they disagree about whether or not the first sale law applies to works produced abroad. It’s possible the U.S. Supreme Court will have to take the case to sort out the varying court opinions.

While this particular copyright law case deals with the production of books, this ruling will apply to any company that manufactures a product. Offshore production of U.S. goods has been a major issue in recent years, as many small businesses abroad have stolen the copyright owner’s design and product and sold it for less, even if the original company also sells its wares in those countries.

While competition will call for undercutting on costs to impress the consumer, it can’t be done unlawfully and to the detriment of the original company. These copyright and intellectual property matters must be handled by a Great Neck Business Lawyer who can work to protect a company from unfair competition and stolen ideas and products.
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As technology changes the way we operate in society and takes over the way we used to do things years ago, there are new legal challenges that must be made in order to regulate how businesses can use it.

A recent Thomson Reuters article reports on Manhattan anti-trust lawsuits that were recently filed, alleging technology and communications giant Apple conspired with five of the six major book publishers to fix prices for electronic books. And after one set of plaintiffs filed a lawsuit, four other class action lawsuits were filed — one in California and three in New York — making similar allegations.
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Anti-trust law is essentially the area of law that governs competition and prevents monopolies from occurring. It’s interesting that Apple is on the other end of an anti-trust lawsuit as in 1998, the United States Department of Justice and 20 states filed an anti-trust action against Microsoft Corporation, alleging the company abused monopoly power on Intel-based computers dealing with operating system and web browser sales. The issue in that case was whether it could sell its Windows operating system with Internet Explorer software.

Today, it seems second nature for PC users to have Internet Explorer standard, but the lawsuit raised questions about whether that restricted the market for competing web browsers. After a trial and appeals, Microsoft settled with the government, agreeing to share its application programming interfaces with other companies and allow access to the company’s systems, records and source code for five years.

The allegations in the case against Apple are slightly different, however. Electronic books — those read on Apple’s iPad, Amazon’s Kindle and Barnes and Noble’s Nook, among others — are the paperless version of millions of books, available with a click. The lawsuits claim that Apple and the publishers struck a deal in January 2010, just before Apple’s iPad launched, to fix prices. The deal was to raise e-book prices after the publishers were frustrated with Amazon charging low prices in order to dominate the market.

This type of litigation protects businesses from unlawful competition. Not that competition is bad — competition is what makes any marketplace thrive, but doing so unlawfully can cripple a business. As any small business owner knows — or if this is an example, any corporation knows, protecting one’s product through litigation is a step many have to take.

New York business law is designed to protect the companies that are acting lawfully and punish those who have broken the laws designed to regulate healthy competition. If companies are caught conspiring together to fix prices, steal competitors’ ideas or otherwise control the market, they can suffer the consequences of hefty fines and, in the public realm, very bad public relations.

It is important that businesses consider how the law can benefit them in regulating and policing the industry. Anti-trust laws are here to help companies who are working honorably and who have had dishonest competitors working together to bump out other companies who are trying to get a share of the consumer dollar.
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