Arthur R. Lehman, L.L.C.

New York Business Litigation Blog

Theme park owner faces shareholder dispute, class-action suit

Business litigation can take many forms, including disputes with customers, suppliers and subcontractors. But for Manhattan corporations, there are other parties who may initiate business litigation, namely shareholders. A shareholder dispute is a common source of business litigation. Recently, a well-known theme park owner found itself the target of litigation in response to allegations that statements made by company representatives artificially inflated the company's stock price.

SeaWorld Entertainment Inc. is known for its exhibition of killer whales and other sea creatures. Several years ago, a documentary was made that criticized SeaWorld's practices regarding its captive killer whales. Now plaintiffs are proceeding with a lawsuit that alleges SeaWorld intentionally misled shareholders about the impact of the documentary on SeaWorld's business.

The law of fraudulent misrepresentation in New York

Over the past several weeks, this blog has provided some basic information about possible legal remedies for when another party is harmfully dishonest in a business transaction. We've talked about fraud and trade disparagement; now we're going to talk about another New York business tort: fraudulent misrepresentation.

Fraudulent misrepresentation involves a party making a false statement to another party, causing a deal between the two parties to be based on a false premise. If the false premise has a material effect on the deal, the law considers the contract between the parties to be invalid. The misrepresentation can be communicated in a number of formats, including writing, speech, a gesture, or even silence.

What if I have been victimized by trade disparagement?

A New York business will often have a great amount invested in its reputation. In the competitive world of New York business, it is not unusual for competitors to try and gain an unfair and illegal advantage by making false and derogatory statements about another business in the same industry. This can be called commercial disparagement or business disparagement. The idea is to prevent others from working with the business or using its products or services. There is a wide array of ways in which this can occur and it is important for a business that is considering a business tort to understand them.

The allegations can range from a business being incompetent at its work, to unethical in its dealings, to showing outright dishonesty. The main idea of this business tort is to protect one business from disparagement from another, but the tort can also be brought against customers. To show that there was disparagement, the plaintiff must show four elements: that the false statement that was made has been published; that the statement that was made will lead to economic loss; that there was economic loss; and that the statement was made knowing that it was false or said with reckless disregard as to its accuracy.

Non-compete agreements: what they are and how they work

As the employment market begins to heat up, many New Yorkers are taking advantage by entering into employment relationships with different employers. A common requirement from employers is a non-compete agreement. Many employers require new employees to sign a non-compete agreement before being hired. But what is a non-compete agreement? How do courts enforce them?

A non-compete agreement restricts an employee from accepting employment with certain other employers for a certain period of time after leaving the employer that the non-compete agreement has been made with. For example, a company might fear that a sales person might try to take accounts away from the company if the sales person leaves and joins the sales team of a different company. To prevent this situation, the company might require sales staff to not go to work for a company that sells similar goods or services for a certain period after leaving the company.

Is intellectual property security an issue in your startup?

Like many other innovators, you may have conceived the idea for a brilliant technological widget by working nights and weekends in your garage. Friends enthusiastically contributed their ideas and you began developing plans to form a new company.

You want to get the company off on the right foot, and that means thinking about how to protect your new widget and its fellow widgets going forward.

What are the elements of a trade disparagement claim?

Although many New York business disputes arise from allegedly breached contracts, not all do. There are a number of civil wrongs that can also give rise to a business dispute. These civil wrongs are called torts. This blog post will focus on one of these torts: trade disparagement. As always, readers are encouraged to meet with a business law attorney if they have questions about how the law applies to their specific situation.

Trade disparagement is also known as commercial disparagement or business disparagement. Trade disparagement happens when someone makes derogatory statements about another's business or title to property with the purpose of discouraging the public from dealing with the person allegedly disparaged. A trade disparagement lawsuit gives a plaintiff an opportunity to possibly recover damages from another party for the damages suffered from the unfair disparagement. Competing businesses, as well as consumers, can be defendants in a trade disparagement action.

Manhattan business relationships require trust

Manhattan business people expect their business partners, vendors, contractors and customers to be honest about the important aspects of their business transactions. Our business culture is based on trust, and a baseline level of honesty engenders trust and fruitful business relationships. If business people feel they cannot trust the people they do business with, the whole economy suffers. This is why our legal system encourages honesty among business partners.

Not long ago, we discussed the elements of the legal concept of fraud and how it can be proved in court. When someone in a business deal knowingly misrepresents a material fact causing another party to suffer damages, the injured party may be able to recover for fraud. This remedy helps to safeguard the baseline level of trust necessary to do business in the Big Apple.

Protection of intellectual property for all New Yorkers

Last week on our New York business litigation blog, we reviewed the case of a decades-old work of art whose ownership has been challenged in court. The high-profile intellectual property dispute served to illustrate important legal principles for our Manhattan readers. But some may be left wondering: is protection of intellectual property really something that your average artist or creative individual, who may be struggling just to get by, needs to worry about?

The fact is that New York is home to an incredibly diverse creative population. Many people here devote themselves to making a living off of their creative work. It may be visual art, like the painting we discussed previously. It may be music, whether performed in a symphony orchestra or in a subway station. It may be a piece of performance art, fashion, or any other type of creative work -- high or low, no matter what, it's important to protect your rights to what's yours.

Ed Sheeran copyright case settles out of court

When does music creation become copyright infringement? In this case, popular singer songwriter Ed Sheeran was called out for his hit song "Photograph" copying  The X Factor winner's song "Amazing." The song "Amazing" was written by Leonard and Martin Harrington. The song was released in 2009 as a single won Matt Cardle the X Factor competition for 2010.

The copyright case, which was brought in 2016, reportedly settled out of court in April of 2017. The payout: $20 million. Additionally, as part of the settlement, the songwriters are now listed as co-authors of the song with Sheeran, along with other undisclosed terms.

Artwork subject of intellectual property litigation in Manhattan

A complex lawsuit was filed last week in federal court in Manhattan. The suit stems from from an intellectual property dispute involving a work of art that lies at the center of a challenging set of legal circumstances.

The work, entitled "The Mechanism of Meaning," is a series of paintings by Arakawa and Madeline Gins, who passed away in 2010 and 2014, respectively. The piece itself dates back to the early 1960s. A second edition sold for $3 million in 1989 and both are presumably worth significantly more today.