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 L E G A L   B R I E F
July 2013
Newsletter Archive
Negotiating Update
Intellectual Property Update
Wills, Trusts & Estates Update
Firm News
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Campolo, Middleton & McCormick, LLP, is a full-service business law firm that represents clients in a wide variety of legal matters including litigation and appeals; corporate and technology; real estate development and zoning; wills, trusts and estates; labor and employment; personal injury matters including the defense of general liability, construction, premises liability and transportation cases.
3340 Veterans Highway Suite 400
Bohemia, NY 11716
p 631-738-9100
f  631-738-0659

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The information contained in this newsletter is provided for informational purposes only, and should not be construed as legal advice on any subject matter. The Firm provides legal advice and other services only to persons or entities with which it has established an attorney-client relationship. No recipients of information from this newsletter, clients or otherwise, should act or refrain from acting on the basis of any information included in this newsletter without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. The content of this newsletter contains general information and may not reflect current legal developments. The Firm disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this newsletter.


SEC Lifts Ban on Advertising Certain
Private Offerings

by David Hoeppner, Esq.


The Securities and Exchange Commission voted earlier this month to lift its 80-year-old ban on general solicitation and advertising under certain circumstances (Regulation D Rule 506 offerings), permitting startups, venture capitalists, and Hoeppner #2 hedge funds to openly advertise that they're raising money in private offerings. The advertising ban was originally adopted as part of the Securities Act of 1933, prompted by the concern for investor protection during the Great Depression.

The vote satisfies a provision in last year's Jumpstart Our Business Startups Act, signed by President Obama in April 2012, which was aimed at making it easier for small businesses to raise capital through private offerings of securities, and will likely transform how startups and investment firms are able to interact with and garner investors.

Private issuers of securities taking advantage of this rule change are still allowed to sell securities only to an exclusive group of investors, those who meet the criteria of "Accredited Investor." Individual Accredited Investors must have a net worth of at least $1 million excluding their primary residence, or annual income of more than $200,000 in each of the two most recent years. Fundraisers must take reasonable steps to ensure investors are in fact Accredited; the final regulation will include a list of verification methods that businesses may use to determine whether an investor is accredited, including reviewing copies of Internal Revenue Service filings, and will require companies to notify the SEC 15 days prior to engaging in any general solicitation.

To read more click here >>


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Negotiating Update

Ethics in Negotiations
by Joseph N. Campolo, Esq.

Legal commentators have written countless articles and entire CLE courses are dedicated to discussing what an attorney may or may not say in negotiations. Ethics in negotiations is tricky. On one hand, a lawyer must show Campolo3 honesty and good faith, and not accept a result that is unconscionably unfair to the adverse party. On the other hand, the attorney is obligated to obtain a result that is in the client's best interest and must do everything, short of fraud or deceit, to do so. The absence of a clear line between puffing and misrepresentation has resulted in a considerable body of ethics decisions and commentary.

Many lawyers refer to Model Rule 4.1 which states: "In the course of representing a client a lawyer shall not knowingly (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a material fact when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6." As the commentary to the Rule makes clear, a misrepresentation occurs when a lawyer incorporates or affirms a statement by another person that the lawyer knows to be false. A misrepresentation also includes misleading statements and omissions that are the equivalent of affirmative false statements.

Generally, Rule 4.1 defers to the parties and the circumstances of the transaction to determine what is factual, what is ethical, and what is legal. Here is where the line of negotiation ethics gets blurry. Not all untruths are equal. Posturing or "puffing" during negotiations is not a breach of the Rules. Specifically, statements regarding a party's negotiating goals or its willingness to compromise are not seen as actionable misrepresentations of fact but as negotiation tactics.

To read more click here >>


Intellectual Property Update

Use of Designer Handbags Images Leads to
False Advertising Suit
by Eryn Y. Truong, Esq.

Designer fashion label Michael Kors recently filed suit against Costco in the U.S. District Court for the Southern District of New York for falsely advertising that Michael Kors products were sold at Costco. Deblois

This action arose from an email that Costco sent to its customers offering handbags on sale for $99.99. The email used images of Michael Kors handbags, but the problem was that Costco is not an authorized retailer of Michael Kors products. In addition, Costco does not even sell Michael Kors handbags.

Michael Kors alleges that Costco's use of images of its handbags would make customers believe its handbags are for sale at Costco, effectively luring away prospective customers from Michael Kors retailers into Costco stores, and the advertisement of a low price destroys the value of the brand. The average price of Michael Kors handbags ranges from $128 to $1,395.

While the ad did not explicitly state that the purses in the photos were Michael Kors, the photos did depict features that would identify the bags as products of the luxury designer.

Michael Kors is seeking a court order barring any future marketing of Michael Kors products, as well as payment of monetary damages.

To read more click here >>


SCOTUS Update 

Supreme Court Defines "Supervisor" for Purposes
of Workplace Harassment Claims
by Lauren Kanter, Esq.
An employer's liability for workplace harassment could turn on whether the harasser meets the Supreme Court's newly adopted definition of "supervisor" of the victim, according to the Court's opinion in Vance v. Ball State University, Kanter handed down on June 24, 2013.

Petitioner Maetta Vance, an African-American woman, had worked in the Ball State's Banquet and Catering Department since 1989. Over the course of her employment there, Vance made numerous complaints regarding her interactions with Saundra Davis, a white catering specialist in her department. Vance filed complaints with the university and charges with the Equal Employment Opportunity Commission (EEOC), alleging racial harassment and discrimination, mainly stemming from her interactions with Davis.

Despite these efforts, the problem persisted. Vance eventually filed a lawsuit in 2006 in the United States District Court for the Southern District of Indiana, alleging that she had been subjected to a racially hostile work environment in violation of Title VII of the 1964 Civil Rights Act. Vance alleged that Ball State was liable for the hostile work environment created by Davis, whom Vance alleged was her supervisor.

Under Title VII, an employer's liability for workplace harassment depends on whether the harasser is considered a co-worker or a supervisor. If the harasser is the victim's co-worker, the employer may defend itself simply by showing that it was not negligent in addressing harassment complaints.

To read more click here >>

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Wills, Trusts & Estates Update

The Demise of DOMA
by Martin Glass, Esq.

Awhile back I wrote about the difficulties for same-sex couples with respect to their estate planning. Well, if you haven't heard by now, things have gotten easier for those in New York. I don't normally write about case law, but Glass when the Supreme Court of the United States (SCOTUS) speaks, even I try to listen. In this instance the case was U.S. v. Windsor.

As a quick refresher, in 1996 President Bill Clinton signed into law the Defense of Marriage Act (DOMA). One of the things it said was that marriage is defined as being between a man and a woman. Thus all Federal statutes, rules and regulations were required to follow that concept.

In the Windsor case, Edith Windsor married Thea Spyer in New York. When Thea died, the federal government said that the estate could not use the unlimited marital deduction for federal estate taxes and had to pay over $360,000. Last month SCOTUS decreed that DOMA is unconstitutional as a deprivation of equal liberty and was in violation of the Fifth Amendment. As long as the couple were married in a state that legally recognizes such marriages, the federal government must also recognize the marriage. That now opens up over 1,100 federal benefits to those couples.

But here's the rub. They did not say that state laws not allowing gay marriages are unconstitutional or illegal. The Justices said only that the federal government could not make that distinction between the types of marriages.

To read more click here >>


Firm News

                   Judge Doyle has Joined CM&M

    James Doyle

We are pleased to announce that Hon. James F.X. Doyle has joined CM&M.   He will be Special Counsel to the firm and work in all aspects of client litigation.


To learn more click here >>



     Truong has Joined the ConnectToTech Board


We are pleased to announce that Eryn Truong has joined the ConnectToTech Board. ConnectToTech is a non-profit whose mission is to inspire students to pursue STEM careers.


To learn more click here >>   


         Yermash Spotlighted in LIBN Who's Who


We congratulate Arthur Yermash on being spotlighted in Yermash the LIBN Who's Who in Corporate Law.  Yermash said, "Our corporate law practice has adapted to be more efficient and competitive in the global market.  One of our key focuses has been to stay on the forefront of cutting edge legal technology."


To learn more click here >>   


      CM&M to Attend Aug 21st Pet Peeves Event


CM&M will be attending the 6:00 PM Wed Aug 21st Pet Peeves Dog Days of Summer event at the Crest Hollow Country Club.  Pet Peeves is a non-profit umbrella organization that raises funds and awareness for Long Island's struggling animal shelters and rescue groups.

To learn more click here >>


          Pet Peeves Logo



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Campolo, Middleton & McCormick, LLP
3340 Veterans Highway, Suite 400
Bohemia, NY 11716
p 631-738-9100 | f 631-738-0659
[email protected] | www.cmmllp.com