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Must a New York Party to an Arbitration Agreement Always Agree to and Pay Costs?

When entering business or employment relationships, parties are often presented arbitration agreements – either boilerplate form or customized to the nature of the relationship – for review and signature. These agreements consign the signing party to arbitration of any disputes that may arise between them and the party presenting the agreement. Also, they often set forth obligations of the parties involved related to location, time, procedures, binding nature, and burden of costs for arbitration. Usually the costs fall on the party presented with the agreement, but situations have arisen that indicate this does not always have to be the case even when it was agreed to by both parties.

New York’s View of Arbitration Agreements

New York has a strong public policy that favors utilizing agreed-upon arbitration as an alternate method to litigation for resolving disputes between parties, emphasizing that courts should interfere as infrequently as possible with both the process and any resulting reward. Courts have held that as “a general matter, therefore, a clear and unmistakable agreement to arbitrate statutory wage claims is not unenforceable as against public policy.”

Avoiding Arbitration Due to Cost

Despite the policy favoring arbitration, some people choose to challenge these agreements. Though usually unsuccessful, courts have been willing to entertain some arguments made by petitioners. In 2017 an employee in New York, as part of his employment agreement, agreed to arbitrate disputes between he and his employer in a venue in Florida. In the agreement, the employee would be required to pay the administrative costs and half of the arbitration costs including arbitrator fees. The employee, as part of a class suing on late wage payment claims, objected to the employer’s motion to compel arbitration on grounds he hadn’t agreed to arbitrate labor claims, such an agreement was against public policy, and that the fee splitting provisions made arbitration prohibitively expensive for him given his financial limitations.

Public Policy Concerns

The employee appealed a trial court ruling that compelled him to pursue arbitration. Without ruling as to whether a party could or could not definitively avoid arbitration by claiming financial hardship, the court did recognize the competing public policy interests between the benefits of enforcing arbitration agreements and the idea that a person’s inability to travel and pay for arbitration costs would preclude them from pursuing their claims. Without addressing the issue of whether the employee’s inability to pay arbitration costs would release him from the arbitration agreement, the court remanded the case back to the lower court with a directive that an accounting be made of the employee’s income and assets, as well as all costs associated with the arbitration the employee would be required to pay. The trial court was then charged with determining whether arbitrating at the employer’s expense in New York would remove the employee’s financial concerns and permit him to pursue his claims.

Though this court did not make a firm decision either way, it did deviate from the long-standing attitude that arbitration agreements should be enforced. Though public policy does favor upholding such agreements, the door is open for public policy arguments that may allow parties to avoid arbitration agreements in the future.

New York Employment Arbitration Lawyer

Whether you are an employee or employer, MOWK Law can help with your New York arbitration. Our talented team of employment lawyers will work hard to ensure your success in this popular form of employment dispute resolution. Get in touch with us today.

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When Does Imitation Go Too Far?

New York City is known for many things – the Statue of Liberty, the Empire State Building, and Chinatown’s infamous designer knockoffs on Canal Street. Imitation is often considered the sincerest form of flattery, but when does it cross the line into copyright infringement and incur liability?

Copyright infringement is a serious violation of a creator’s rights that can cost them considerable money and other tangential benefits. Upon a showing that a subsequent product is not sufficiently unique or differentiated from their own, a creator establishes either a copyright or trademark infringement and can then recover damages and pursue remedies including an order that the infringing party cease production of their products in that form or remove offending products from their shelves.

Parody: When Copyright Infringement Will Not Apply

However, products intended to parody well-known products may not rise to the level of copyright infringement. In a high-profile lawsuit in 2007, Louis Vuitton Malletier lost a claim of copyright infringement against Haute Diggity Dog, a comedy fashion company. Haute Diggity Dog had released a parody product line of pet toys called Chewy Vuitton to complement its other knockoff lines with such names as Sniffany & Co. and Chewnel No. 5.

Louis Vuitton Malletier claimed that the toys imitated Louis Vuitton’s “LV” mark with a “CV” mark and this resulted in trademark dilution based on tarnishment and blurring. The United States Court of Appeals upheld the District Court’s finding that the element of parody was present and thus Haute Diggity Dog had differentiated its products sufficiently to defeat claims of both copyright and trademark infringement. Louis Vuitton did not successfully demonstrate that the uniqueness of its marks was likely to be impaired by Haute Diggity Dog’s use of “Chewy Vuitton” and “CV.”

Risks of Pursuing Copyright Infringement

New York Copyright and trademark infringement cases are often complex and can be quite difficult to litigate. Parties considering embarking on this road should also consider that such claims can even end up backfiring on the party claiming infringement, so this should be approached with caution.

An infamous example of a lawsuit going horribly writing for the plaintiff is the outcome MGA Entertainment Inc. experienced in 2008 when it tried to sue Mattel for copyright infringement. MGA argued Mattel had copied their line of Bratz dolls, most notably the proportions of their dolls, to reclaim a larger share of the toy market. During the case, Mattel’s legal team was able to show former Mattel employee had moved to MGA and used designs there he had created during his tenure at Mattel.

As a result of this development, the Bratz doll designs were held to still be Mattel’s legal property. MGA was ordered to remove their dolls from stores and pay Mattel damages in the amount of $100,000,000. Though the companies are still engaged in legal wrangling over a decade later, the court’s ruling is a stark reminder that miscalculating when alleging copyright or trademark infringement can be an expensive proposition.

Think you are dealing with copyright infringement or being accused of one and not sure what to do? Get in touch with the talented team of New York attorneys at MOWK Law for a case evaluation and learn about your legal rights.

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What Happens When A Plaintiff Breaches Their Fiduciary Duty and Cannot Pay?

A fiduciary duty is a requirement for a party to act in a way that furthers the best interest of another party – even to their exclusion of their own personal benefit. In business, certain relationships create heightened duties for at least one party involved. Commonly, duties exist between many types of: professionals and their clients, trustee and the trust’s beneficiaries, business partners among themselves, and a corporation’s directors and officers to the corporation and its shareholders.

Fiduciary Relationships

Fiduciary obligations are created whenever a relationship between the parties requires reliance, special trust, and confidence on the party becoming a fiduciary to exercise their discretion, judgment, or expertise when acting on behalf of the other party/parties (usually a client). A party cannot accidentally become a fiduciary – they must knowingly understand the confidence and trust placed in them to exercise their skills and judgment on the client’s behalf. Once the relationship is created, the fiduciary is legally prohibited from acting in any manner adverse to their client’s best interests.

Breach of Fiduciary Duty and Remedies

When fiduciaries fall short of their duties, New York allows injured parties to bring a claim for breach of fiduciary duty. Clients may be entitled to compensatory damages if they can prove:

  • A fiduciary relationship existed;
  • The fiduciary committed misconduct; and
  • The fiduciary’s misconduct directly caused their damages.

In some situations, punitive damages and equitable relief are also merited.

When A Fiduciary Cannot Satisfy a Judgment and Pay Damages

Damage awards for breach of fiduciary duty can reach astronomical amounts, and individual plaintiffs and companies often cannot possibly satisfy the amount awarded by a judge or jury. This is particularly common in class action suits and in the aftermath of a Ponzi scheme implosion. The Bernie Madoff investment scandal resulted in multi-billion dollar losses, which would never have been satisfied by Madoff’s assets alone, which were only worth hundreds of millions of dollars.

Aiding and Abetting Liability

In cases such as this, victims of breach of fiduciary duty and fraud can often bring suit against other individuals that aid or abet that breach. Unless a state enacts laws of its own, usually only the Securities and Exchange commission can sue for aiding and abetting federal securities fraud. However, New York has taken the extra step and given victims the right to bring lawsuits seeking recovery from those who aid and abet the primary wrongdoer.

A party that aids and abets can be held liable for breach of fiduciary duty on the part of the primary party that owed the duty if he or she had knowledge of the party’s existing fiduciary duty and either procured the breach or substantially assisted with the breach. The aider or abettor may be ordered to help compensate victims for their damages.

MOWK LAW- New York Civil Trial Lawyers

The complexity of New York private litigant aiding and abetting claims in large-scale breach of fiduciary duty cases can be difficult to argue and even more confusing to navigate through the legal system. In these cases, it is advisable to turn to an experienced New York trial attorney. They can help you understand whether you have either viable claims or exposure for aiding and abetting as well as represent you through the course of litigation to ensure you obtain the best possible outcome. At MOWK Law, we are here to help- get in touch with us today to learn more.

Does Loud, Caustic, Hard Hitting Speech Equal Defamation in New York?

Last week, a Manhattan Supreme Court judge dismissed a defamation lawsuit brought by a Black Lives Matter activist against Fox News host Jeanine Pirro. DeRay McKesson claimed the controversial host had defamed him when she accused him of “directing” violence against an injured Louisiana law enforcement officer in December 2017 while on-air. He accused her of expressing a “loud, caustic” opinion over the airwaves.

New York’s Defamation Standard

Under New York law, to prove defamation occurred a party must prove:
A false statement;

  • Published to a third party without privilege or authorization;
  • With fault amounting to at least negligence;
  • Caused special harm or defamation per se.

Generally, statements meant to humiliate and maliciously degrade qualify as defamation. In all states, slander and libel laws differentiate between public and private figures – most notably, in New York public figures must prove the defendant acted with actual malice.

The more public a person’s profile, the higher the burden of proof they much satisfy to proof remarks were defamatory. When deciding a person’s status, New York courts use the “vortex notion” to determine whether a private individual should be considered a public figure – if they have drawn attention or notoriety to themselves, the answer is yes. By voluntarily attracting recognition and fame, they are stuck with their choice just as someone would if be if they jumped into the swirling vortex of a tornado.

If defamation is proven, unless a valid defense exists a defendant can be civilly liable for actual damages, compensatory damages, and even punitive damages.

Defenses to Defamation Claims

A party accused of defamation in New York may assert any of many recognized defenses to defeat a lawsuit. Defenses include:

  • The statement was true;
  • Opinion;
  • Lack of harm;
  • General reporting;
  • A wire service defense covering republished news items from a reputable news source;
  • Failure to identify the plaintiff; and
  • If they are a website operator, a code section exempting them from liability for third-party defamatory statements posted on their platform.

Protected Speech

Pirro argued that she did not defame McKesson – rather, she was merely expressing her opinion that the officer, Baton Rouge Sheriff’s Deputy Nicholas Tullier, had a right to sue McKesson when she was arguing on the air that the activist could be liable for the deputy’s injuries. Justice Robert Kalish sided with Pirro when he threw out the lawsuit, noting that even her own attorney had described her on-air personality as “loud, caustic and hard hitting.” In fact, the decision noted she is known, celebrated, and frequently criticized for her “lack of temperament and caustic commentary” and that nothing she said is outside the bounds of New York law. Thus, however divisive her commentary, Pirra’s expression of her opinion in this manner is protected speech.

Defamation Lawyer in New York

Defamation litigation in New York can be very nuanced depending on the intent of the author, the injuries alleged, the status of the party claiming defamation, and the presence (or lack) of defense present. In these cases, it is advisable to contact an experienced New York litigation attorney to discuss the unique facts of your situation, understand your options, and decide upon the best course of action.