Even One-Hit Wonders Are Entitled to Copyright Protection

Judge Gutierrez of the federal district court in the Central District of California recently granted summary judgment in favor of the plaintiffs in a copyright lawsuit against the satellite radio company Sirius XM.  The case is Flo & Eddie Inc. v. Sirius XM Radio Inc., CV 13-5693 PSG (C.D. Cal. 2014).   In essence, the plaintiffs (who were members of the 1960's band "The Turtles") successfully argued that they were entitled to royalty payments for public performances and reproductions of their songs on the satellite radio stations of Sirius XM, under California copyright laws.

Why am I mentioning this California-based case? Mostly because it reinforces my opinion of the case pending against Pandora internet radio in New York, that I discussed back in April of this year.  Like the New York case, the songs at issue in Flo & Eddie were recorded before 1972 (for example, the Turtles recorded the psychedelic-pop hit "Happy Together" in 1967), which would put them outside the protection of the federal Copyright Act.  However, to the extent that the federal Copyright Act doesn't pre-empt some provisions of state-based copyright laws, copyright owners may find more expansive protection of their rights on the state level and in the state courts.

The Flo & Eddie decision cuts both ways for New York's Capitol Records, LLC v. Pandora Media, Inc.  On the one hand, the former decision is based on one federal judge's interpretation of California law; not New York law.  However, to the extent our copyright protections may be similar to those of California, Capitol Records may take heart.  Furthermore Judge Gutierrez's decision was a grant of summary judgement, which is a very strong award by a court (it is an "automatic" win for the plaintiff without going through trial).  That remedy isn't rare, but it is only granted under federal law "if the [party] shows that there is no genuine dispute as to any material fact and the [party] is entitled to judgment as a matter of law.”  However, insofar as Capitol Records filed their case in New York state court, summary judgment standards under New York state civil procedure and common law will apply.  This might not be as generous as the federal standard, since section 3212 of the Civil Practice Law and Rules state that "[t]he motion [for summary judgment] will be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party ... [but] the motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact."

Nevertheless, this federal court ruling in California is significant as the first ruling on these types of issues in the many recent artist-and-record-label cases against internet and satellite radio companies.  And, as the New York Times reported, it is "a case that could have wide implications for the digital music business."

Bye, Bye Snow Bird

The New York State Court of Appeals (our highest court) recently provided some helpful clarification of – and a little relief from – New York Tax Law §601 and §605(b)(1)(B).  As one of the majority of U.S. states that collect a state-level income tax, New York imposes the income tax on people and corporations if:

1. The person is “domiciled” in New York (“domicile” is sometimes referred to as the location you “call home”, and is normally your place of permanent, full-time, residence); or
2. The person maintains a "permanent place of abode” in New York, and spends in aggregate, more than 183 days per year in the state (a day longer than one-half the calendar year). 

In the recent case of Gaied v. New York State Tax Appeals Tribunal, 22 N.Y.3d 592, 2014 NY Slip Op. 01101 (2014), the Court of Appeals reversed the tax court’s determination that the plaintiff (Mr. Gaied) had a “permanent place of abode” in New York State.  The plaintiff lived in New Jersey (near the NY/NJ border), he owned a 3-family residence in New York, and he spent more than 183 days in the state.  However, the apartments in the 3-family property were all rented to strangers, except for one apartment where he housed his ailing parents.  He evidently paid some of the utilities for his parents' apartment but, according to the plaintiff, he never actually stayed at that apartment he owned for more than a brief period, and only at his parents' request.  The tax court held that Mr. Gaied's "maintenance" of this family property in New York State established it as his "permanent place of abode" under the tax law.  However, the Court of Appeals reversed the tax court’s ruling in this case, finding that there was "no rational basis for [the tax court's] interpretation" of §605(b)(1)(B) in that way.

Although Mr. Gaied has prevailed on this issue so far, this case reminds us of some other issues that snow birds (and other transient visitors to New York) should keep in mind if they wish to avoid being saddled with an unexpected New York State income tax bill:

1. The 183 day period is an aggregate time period calculated across the whole taxable (calendar) year.  Thus, if you spend one whole day in New York at the beginning of the year, move away for some time, spend another 180 days in the state, then leave again, only to return to New York for the last 3 days of the year, your 184 total days in the state will qualify you as a taxable “resident” of our state (if you also have a permanent place of abode in the state).  
2. Secondly, a “permanent place of abode” is not necessarily only a house you might own.  If you rent an apartment all year long, for the purpose of living at that apartment while you are in New York for your 183+ days, you will similarly be caught up in the definition of a “statutory resident” under §605.  Although our Court has rejected the Tax Tribunal's interpretation of the regulations defining "permanent place of abode" as "a dwelling place of a permanent nature maintained by the taxpayer, whether or not owned by such taxpayer, [which] will generally include a dwelling place owned or leased by such taxpayer's spouse," (20 NYCRR 105.20[e][1]), the Court did go on to state that "[t]he legislative history of the statute, ... as well as the regulations, support the view that in order for a taxpayer to have maintained a permanent place of abode in New York, the taxpayer must, himself, have a residential interest in the property."  The idea of a "residential interest" in property is much broader than "ownership".  You might not own the apartment building in which you live, but if you have a valid lease for that space, you do have a legally-protectable "residential interest" in that space.  And, if that building is in New York State, it may wind up qualifying as your "permanent place of abode" in the State for Tax Law purposes.

Therefore, if you intend to leave the Empire State (and our income taxes) for good, make sure that you either get rid of your New York “place of abode”, or at least be very careful that you do not come back to visit for more than ½ of any future year.

Outside the Wall

"Believing with you that religion is a matter which lies solely between Man & his God, that he owes account to none other for his faith or his worship, that the legitimate powers of government reach actions only, & not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should 'make no law respecting an establishment of religion, or prohibiting the free exercise thereof,' thus building a wall of separation between Church & State."

Thomas Jefferson, Letter to the Danbury Baptists, 1802 

In my opinion, the Supreme Court's decision in Town of Greece v. Galloway, issued this week, has broken down the wall contemplated by Jefferson but supplied no clear alternative arrangement.  In fact, it seems that the Court clearly repudiated the idea of "ceremonial deism" championed by former Justice O'Connor, which I likewise favored in my previous blog post on this case.

As I discussed before, this case involves the predominately-Christian prayers held at the start of Town Board meetings in the Town of Greece, New York.  This kind of public prayer associated with a local government obviously entails the religion clauses of our First Amendment, which simultaneously guarantee citizens' "free exercise" of their religious beliefs, and "non-establishment" of one particular religion (or any religion) by the government.  These two clauses of the Amendment display a clear tension: if, for instance, the Town Supervisor is a devout Christian and is forbidden from any religious expression during his time at the Town Board, such would negatively impact his freedom of expression.  However, if that devout Town Supervisor decided to only hire fellow Christians, or impose special taxes on non-Christians, the government would be unlawfully "establishing" an official state religion.  Thus, there is a broad spectrum from maximum-expression (with collateral establishment issues) to maximum non-establishment (with collateral freedom of expression issues).  It is ultimately up to the courts (and usually the Supreme Court) to decide where the allowable point on that spectrum should be.

Unfortunately, the courts (and especially the Supreme Court in this case), provide very little usable guidance on these matters.  There have been dozens of different tests and rulings on a host of religious issues in the past 100 years, and the rulings have fallen on many different points on that spectrum.  In the Galloway case decided May 5th, there are no less than 5 official opinions (a majority by Kennedy; a concurrence by Alito; a concurrence by Thomas; a dissent by Breyer; and a dissent by Kagan), and two plurality opinions (i.e. part of Kennedy's majority opinion was only joined by two other Justices (Roberts and Alito), while Thomas' concurrence was only joined by Scalia in one part).  Almost every Supreme Court judge gave their opinion on this matter.

As has been widely-reported, the five-Justice majority opinion upheld the right of the Town of Greece to hold pre-session prayers, thus reversing the Second Circuit's ruling in this case.  In essence, the majority held that the test for the courts in this matter should be whether "the prayer practice in the town ... fits within the tradition long followed in Congress and the state legislatures", as approved by the Court previously in the case of Marsh v. Chambers (which approved of opening prayers in the Nebraska legislature).  According to Justice Kennedy's opinion, "Marsh stands for the proposition that it is not necessary to define the precise boundary of the Establishment Clause where history shows that the specific practice is permitted." Galloway, 572 U.S. ____ (2014) (Kennedy, at p. 8).  The majority squarely rejects the idea - what I would say constitutes ceremonial deism - that "nonsectarian or ecumenical prayer as a single, fixed standard" is necessary for the opening prayer at issue to be constitutional.  Instead, "Marsh nowhere suggested that the constitutionality of legislative prayer turns on the neutrality of its content. ... [and] the Court instructed that the 'content of the prayer is not of concern to judges,' provided 'there is no indication that the prayer opportunity has been exploited to proselytize or advance any one, or to disparage any other, faith or belief.' ... Government may not mandate a civil religion that stifles any but the most generic references to the sacred any more than it may prescribe a religious orthodoxy." (Kennedy, at pp. 12-13).  This latter prohibition - on government control of the content of an opening prayer - is consistent with the aversion to imposing on the prayer-giver's freedom of expression.  "Once it invites prayer into the public sphere, government must permit a prayer giver to address his or her own God or gods as conscience dictates, unfettered by what an administrator or judge considers to be nonsectarian." (Kennedy, at p. 14). 

But then how can (or should) a municipality insure that it is not "establishing" preference for one religion over another?  The majority declares that "[a]bsent a pattern of prayers that over time denigrate, proselytize, or betray an impermissible government purpose, a challenge based solely on the content of a prayer will not likely establish a constitutional violation." (Kennedy, at p. 17).  I find this troubling, in that it creates a kind of "smell test" for constitutional violations of the Establishment Clause.  This brings to mind former Justice Stewart's famous obscenity test: "I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that." Jacobellis v. Ohio, 378 U.S. 184 (1964) (Stewart, J. concurring).  The majority in this case found that - although the Town used almost exclusively Christian clergy - it did not cross the "proselytizing" line, and "[s]o long as the town maintains a policy of nondiscrimination, the Constitution does not require it to search beyond its borders for non-Christian prayer givers in an effort to achieve religious balancing." (Kennedy, at p. 18).

The reason why I feel that the "wall of separation" coined by Jefferson has been conclusively breached, is that, not only does the majority opinion accept sectarian prayer in government contexts as non-violative of the Establishment Clause (and seemingly disdains more inclusive neutral / deist prayer), but the minority opinion authored by Justice Kagan likewise states that "I do not contend that [the principle of religious equality] translates here into a bright separationist line ... [a]nd I believe that pluralism and inclusion in a town hall can satisfy the constitutional requirement of neutrality." (Kagan, at pp. 1-2).  Furthermore, statements of profound belief articulated by some of the prayer-givers "'speak of the depths of [one's] life, of the source of [one's] being, of [one's] ultimate concern, of what [one] take[s] seriously without any reservation' ... If they (and the central tenets of other religions) ever become mere ceremony, this country will be a fundamentally different - and, I think, poorer - place to live." (Kagan, at pp. 22-23, quoting from The Shaking of the Foundations).  Thus, it seems to me, that the majority and dissenting Justices on the Supreme Court differ little in their jurisprudential concepts rejecting strict separation of Church & State, instead favoring pluralistic expression of various citizens' faiths in the public, governmental, sphere. The only real difference is their interpretation and assessment of the facts at issue in this case: whether or not the Town of Greece was as inclusive of various sects as they should be, rather than whether the Town impermissibly supported any sects at all.

While men and women of good conscience can disagree about religious doctrines, I believe it provides little assistance to municipalities and individuals trying to strike the right balance between religious expression protected by the First Amendment and religious establishment forbidden by the First Amendment, to say, in effect, "too much sectarian proselytizing in public prayer is bad" but the facts of each individual case will be the deciding factor.  Although Justice Alito concurred (agreed) with the majority opinion, I think the majority's ruling ignores a very cogent observation made in Alito's concurring decision.  That is, Justice Alito states "[m]any local officials, puzzled by our often puzzling Establishment Clause jurisprudence and terrified of the legal fees that may result from a lawsuit claiming a constitutional violation, already think that the safest course is to ensure that local government is a religion-free zone." (Alito, at p. 7).  The majority's opinion in this case does nothing to dispel government officials' bewilderment by saying that mostly-Christian opening prayers (that were ostensibly available to all faiths to give) were in accord with Marsh and not violative of the Establishment Clause ... but a more "proselytizing" or "denigrating" series of sectarian opening prayers might be.

The End of Oldies? (Or, Why You Might Not Hear Bob Dylan on Internet Radio Until 2067)

Today’s post looks at the intersection of new technology and our somewhat antique laws.  It has recently been reported that major music labels (Sony, Universal, Warner Music, and ABKCO) filed suit against the internet music service Pandora on April 17^th, alleging copyright infringement for essentially “playing old songs without licenses.”  What makes this case most interesting is that these multi-national music industry conglomerates are suing the California-based Pandora in New York State Supreme Court in Manhattan (for those not familiar with our special court-naming preferences in NY, that’s the regular civil trial court).  Without getting into any jurisdictional issues, I wondered why these plaintiffs would sue in state court for what is a predominantly federal cause of action (copyrights).

The answer lies in a strange quirk of history, most clearly articulated by the New York State Court of Appeals (that’s our highest court … I know, it’s confusing), in their answer of certified questions in Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 830 N.E.2d 250 (2005).  Under federal law (17U.S.C. §302) copyrights generally last for the life of the author/creator, plus 70 years.  However, the U.S. Copyright law never squarely addressed musical recordings, which remained unprotected on the federal level until amendments were made to the Copyright Act in 1972.   At the same time, most states had a body of common law rules concerning copyright in creative works (including musical recordings) which were often more expansive than the federal rights, and allowed a nearly unlimited term of protection.  During the drafting of the 1972 amendments to the Copyright Act, the House and Senate reached a compromise regarding protection of pre-1972 musical recordings: existing state common-law copyright protection for them would not be preempted by the new federal statute until February 15, 2067.  See Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 555-56, 830 N.E.2d 250, 260-61 (2005).  Thus, “[p]ursuant to 17 U.S.C. § 301(c), ‘[f]ederal copyright law does not cover sound recordings made prior to [February 15,] 1972. Rather, these recordings are protected by state common law on copyright infringement.’”  Capitol Records, LLC v. Harrison Greenwich, LLC, 652249/2012, 2014 WL 1492299 (N.Y. Sup. Ct. Apr. 14, 2014). 

But don’t federal statutes concerning something usually preclude inconsistent state law?  How can a state like New York say that, under our common law, all music recordings are entitled to permanent, perpetual copyright protection, when the federal law may protect the same recording for as little as 71 years?

Shortly after passage of the Copyright Act amendments, the U.S. Supreme Court addressed these concerns in Goldstein v. California, 412 U.S. 546, 93 S.Ct. 2303, 37 L.Ed.2d 163 (1973). The defendant in that case was convicted of criminal music piracy based on a California copyright law, which he challenged on the grounds that it conflicted with the U.S. Constitution’s “Copyright Clause, the Supremacy Clause and the federal Copyright Act by ‘establish[ing] a state copyright of unlimited duration.’” Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 556-57, 830 N.E.2d 250, 261 (2005) (quoting Goldstein).  The majority on the Court rejected the defendant's arguments, noting that

“[a]lthough the Copyright Clause ... recognizes the potential benefits of a national system, it does not indicate that … state legislation is, in all cases, unnecessary or precluded,” … the states did not relinquish all power to provide copyright protection … the states were free to act with regard to sound recordings precisely because Congress had not, and, in the absence of conflict between federal and state law, the Supremacy Clause was not a barrier to a state's provision of copyright protection to a work not covered under federal copyright law.

Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 556-57, 830 N.E.2d 250, 261 (2005) (quoting Goldstein).  Therefore, turning back to New York, the federal Copyright Act precludes and supercedes New York common-law protection of sound recordings only in two respects.

First, [New York] common law does not apply to any sound recording fixed, within the meaning of the federal act, after February 15, 1972, because recordings made after that date are eligible for federal statutory copyright protection. Second, state common-law copyright protection is no longer perpetual for sound recordings not covered by the federal act (those fixed before February 15, 1972), because the federal act mandates that any state common-law rights will cease on February 15, 2067.  The musical recordings … created before February 15, 1972, are therefore entitled to copyright protection under New York common law until the effective date of federal preemption—February 15, 2067.

Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 559-60, 830 N.E.2d 250, 263 (2005).

Goodnight, Irene

Therefore, if Sony and the other labels want to extract licensing fees from Pandora for the “performance” of pre-1972 musical recordings (or prohibit altogether Pandora’s playing them), it appears that New York’s common law of copyright might be their best shot.  I haven’t had the opportunity to review the actual text of the complaint in this case, but my gut says that Pandora (and those of us who enjoy online listening to anything recorded before Houses of the Holy) might have a problem.  Under New York’s common law, proof of copyright infringement only requires: (1) the existence of a valid copyright; and (2) unauthorized reproduction of the work protected by the copyright. Capitol Records, LLC v. Harrison Greenwich, LLC, 652249/2012, 2014 WL 1492299 (N.Y. Sup. Ct. Apr. 14, 2014).  As recently articulated by the federal Southern District of New York, “[c]ourts have consistently held that the unauthorized duplication of digital music files over the Internet infringes a copyright owner's exclusive right to reproduce.” Capitol Records, LLC v. ReDigi Inc., 934 F.Supp.2d 640, 648 (SDNY 2013).  Additionally, Pandora most likely won’t be able to argue that "unpopular" older music (perhaps some obscure Leadbelly tunes?) are exempt from New York’s protection either: “the ability to enforce copyright protections provided by New York common law is not diminished due to the size of the market and, therefore, the popularity of a product does not affect a state common-law copyright infringement claim.” Capitol Records, Inc. v. Naxos of Am., Inc., 4 N.Y.3d 540, 564, 830 N.E.2d 250, 266 (2005).

It will be interesting to see how this case turns out.  Most likely, I foresee it resulting in an out-of-court settlement involving additional licensing fees on Pandora for use of pre-1972 songs.  But if nothing else, the filing of this suit in New York illustrates the creativity and tenacity of the music industry in monetizing their copyrightable works – via any available legal means.

Understanding the New York Estate Tax Cliff

A number of important tax changes made in passage of the New York State budget last week were highly publicized by the Governor and legislative leaders.  While the estate tax law amendments were not mentioned in the government's press releases (despite earlier indications of their possibility), the State Legislature has made some of the most significant revisions to New York’s estate tax law in decades.

On the positive side of these revisions, Tax Law section 952 was amended to gradually phase-in higher estate tax exclusion amounts.  The amount was previously pegged at $1 million (a relatively low figure when all the different types taxable estate property are considered), but will increase each year starting this year, until January 1, 2019, when it will be $5 million plus the federal cost-of-living-adjustment (COLA).  In essence, New York’s estate tax exclusion will (eventually) be the same as the federal amount, and will increase with inflation.

However, as some news outlets (and the New York State Society of CPAs) have pointed out, there is a down-side to these amendments as well.  In fact, some reports have stated that, for people leaving a taxable estate above the exclusion amount ($2,062,500 until April 1, 2015), their estates will face a “a marginal New York estate tax rate of nearly 164%.”  This sounds like a shocking – even mathematically impossible – figure.  But we must bear in mind that, as they are talking about a marginal tax rate, it is the tax rate for the value of property above the exclusion amount.  This still, of course, means that estate taxes can (and may) eat into the value of the excluded property.  How can this be?

It appears to me that the State Legislature has fundamentally revised some of the basic estate tax presumptions that many of us have worked with for several years.  Primarily, the new, higher monetary thresholds listed in Tax Law section 952(c)(2) are exclusions used to calculate a tax credit rather than exemptions.  Under prior New York law, the $1 million figure represented an exemption from New York estate tax.  If you had an estate less than or equal to $1 million, you paid no tax; but if your estate had a taxable value of $1,000,100, you owed estate tax just on the value of that $100 in excess of the exemption.  Under the Tax Law that took effect April 1, 2014, the entire taxable value of an estate is subject to estate tax.  However, section 952(c) builds in a “credit” against the estate tax - which is the entire amount of the tax for estates with a taxable value less than or equal to the applicable exclusion (i.e. $2,062,500 this year), and a lesser “credit” for estates valued at up to 5% more than that exclusion.  However, “no credit shall be allowed to the estate of any decedent whose New York taxable estate exceeds [105%] of the basic exclusion amount.”

Let’s look at some examples.  Let’s say Bill dies on March 1, 2015 with a taxable estate valued at $2,062,500.  As this is the exclusion amount, his estate receives a credit for the entirety of any estate tax due, and his estate owes $0 of New York estate tax.  In contrast, if Jill dies on March 1, 2015 leaving an estate valued at $2,167,687.50 her heirs might have a problem.  That figure is 5.1% more than the applicable exclusion, and so her estate would owe the applicable estate taxes listed in the table found in section 952(b) of the revised Tax Law.  In this case, that tax would be $106,800 plus 8% of the excess value over $2,100,000 (i.e. $5,415), for a total estate tax burden of $112,215.  Since Jill’s estate is actually only $105,187.50 above the exclusion amount ($2,062,500), her estate is paying a 166% marginal tax on that amount above the exclusion.  But again, we must bear in mind that this exclusion/credit is not an exemption.  This may be why some have begun to refer to this as New York’s estate tax cliff: if you are at or under the exclusion figure, your estate owes nothing (via the credit), but if you are over 5% above the exclusion amount, your estate will be taxed on the full value of the estate at the amount listed in the law.  Nevertheless, the $112,215 estate tax payable by Jill’s estate in this example represents no more than 5% of the actual total value of the estate.

Whether your future estate resembles more Bill’s or Jill’s can depend on many factors.  Thus, with this extremely significant change to New York’s estate tax law, if you want to avoid falling off the Estate Tax Cliff, it would be advisable to review – and revise as need be – your estate plans over the next few years.

A Modern Animal Protection Law Proposed for New York

According to recent reports, New York State Assemblywoman Linda Rosenthal has introduced a "Consolidated Animal Crimes" Bill, to thoroughly modernize New York's animal cruelty / animal protection laws.  By an accident of history, most animal protection laws (and prohibitions on cruelty to animals) are currently housed in New York's Agriculture and Markets Law.  As the name of that portion of our laws implies, sections therein deal mostly with rules and regulations governing livestock, farming, and other agricultural issues.  It is, of course, not the first section one would look to understand the laws prohibiting animal cruelty.

This new bill (Assembly Bill A00775B / Senate Bill S06643) apparently seeks to remedy this by substantially revising parts of the Agriculture and Markets Code, and creating an entirely new Article in the Penal Law (our criminal law): Article 280 - Offenses Against Animals.  Although this bill is still in the Agriculture Committee, should it become law, some of the more interesting developments would be:

1. Second-degree promotion of animal fighting [engaging in the wagers or other peripheral activities of dog fighting, etc.] would be a Class-A Misdemeanor;
2. First-degree promotion of animal fighting [training, breeding, and/or purposefully forcing an animal to fight] would be a Class-D Felony;
3. Second-degree animal cruelty [severe neglect, abandonment, cruel treatment, or poisoning] would be a Class-A Misdemeanor;
4. First-degree animal cruelty [torturing, purposefully wounding, purposefully killing] would be a Class-D Felony;
5. Abuse of an animal involved in racing, breeding, or exhibition of skills [committing second-degree cruelty or tampering with a race horse, racing hound, etc.] would be a Class-E Felony;
6. Third-degree animal abduction ["restraining" a person's pet] would be a Class-B Misdemeanor;
7. Second-degree animal abduction [stealing a person's pet] would be a Class-A Misdemeanor;
8. First-degree animal abduction [stealing a person's pet and demanding ransom, or where the pet is injured or dies] would be a Class-D Felony.

As anyone familiar with criminal law can explain, a crime classified as a felony carries significant consequences.  It is hoped by the sponsors of this bill that the heightened penalties (as well as the reclassification under the Penal Law) will more clearly relate the seriousness of torturing an animal and stealing a person's pet.

I like the sound of this Bill.

Members of law enforcement and animal protection groups have publicly supported this Bill with the reasoning that "putting more specificity in the law would make it that much easier to prosecute people."  While I don't think it should be the province of our state legislature to generally make it "easier to prosecute" people, I do support the re-classification and amendment of our animal protection laws, for a  different reason: it should make the average New York much more aware of (1) their basic legal (if not moral) responsibility to pets and wildlife in our state; and (2) their legal rights if their pet is stolen or harmed by another.  And, of course, the less unnecessary harm caused to animals in our state, the better for all of us.

Careful Drafting and (Un)intended Consequences

Much of my work as an attorney involves carefully drafting legal documents (Wills, Trusts, Contracts, Operating Agreements, Settlements, etc.), that accurately reflect my client’s wishes.  With the ubiquity of low-cost legal forms available on the internet, I’m sometimes asked why people should hire me (or any attorney per se).  A recent child support case from the First Department provides a ready answer: because words have meanings, and those meanings have legal consequences! 

In the recent case of Lacy v. Lacy, 114 A.D.3d 500, 980 N.Y.S.2d 92 (2014), a father sued his ex-wife to seek termination of his child support obligation for their son.  Although the ex-wife was originally the custodial parent of the son, to whom the father was required to pay child support, in 2011 the son moved in with his father and apparently spent most of his residential time with his father.  In fact, as the Court pointed out, the son even went so far as to list his father’s address as his (the son’s) home address when he applied for a New York drivers’ license.  According to the Court, “pursuant to the parties' divorce settlement agreement, which requires plaintiff to pay defendant child support until the children become emancipated and defines emancipation as including having a ‘[p]ermanent residence away from the residence of the Wife,’ plaintiff was properly relieved of his child support obligations.”  Lacy v. Lacy, 980 N.Y.S.2d 92, 93 (2014). 

It is unclear from the record whether the ex-wife thought that “permanent residence away from the residence of the Wife” meant that the child lived on his own – and also away from the father’s residence – but that might have been her original idea.  Nevertheless, the trial court (as affirmed by the Appellate Division), strictly applied the plain meaning of the terms of the parties’ original divorce agreement: once the child no longer resided permanently and primarily with the mother, the child was legally “emancipated” and the father was relieved of his child support obligation to her.  I have no idea whether the parties’ original divorce settlement agreement was drafted by, or reviewed by, an attorney, but that isn’t unlikely.  There was nothing legally wrong with the language of the emancipation provision, although it may have been not quite what the wife had intended.  In which case, the lesson that we can take away from the poor Ms. Lacy is that words have consequences; and if you don’t quite understand the meaning of something in a legal document, you should hire an attorney for help (or, if your attorney is the one drafting the document, ask him or her for clarification).

Cautionary Tale: Even Celebrities Don't Always Get What They Pay For

According to a recent Forbes article, it looks like Philip Seymour Hoffman left a little more drama post mortem by some problematic wording in his Will.  According to the report, Hoffman's Will left his estate (estimated to be roughly $35 million) entirely to his children's mother.  However, since she was not his spouse (only ever his girlfriend), she would face substantial federal estate taxes on about $30 million of the estate, as well as New York State estate taxes on almost all of the estate.  Evidently Mr. Hoffman did foresee this potential problem, and so the drafting attorney wrote a specific "disclaimer" clause into the Will, which would allow his girlfriend to "disclaim" her inheritance, which would then go into a Trust for their son (which would avoid having another estate tax applied to it when Hoffman's son's mother passes away).

The problem? Hoffman only named the son in the Will, but when the actor died earlier this year, he left 3 children.  Now the Surrogate's Court will have to grapple with how, and whether, the other two children can share in the Trust created by their father's Will and their mother's - expected - disclaimer of her share.

With the amount of money that Mr. Hoffman had, and the fact that he lived in a City with hundreds of top-notch attorneys, it is very surprising to me that his Will was so inartfully drafted, as to not anticipate any future children.  As quoted in the Forbes article, a New York Law School professor noted:

One extra sentence in the will could have avoided these issues ... for instance by saying, “Any reference to [Hoffman's son] includes children born to me after him.”

In my practice I run into this situation often.  There may be only one child then living when a parent writes their Will (which child I usually name in one clause in order to satisfy the Rule Against Perpetuities ... but that's an issue for another blog post).  But if there are any more children anticipated (and there usually are), my "standard" Trust clause reads to the effect that a Trust is to be created for "as many of my children then living".  So even if a person creates a Will with only one child in mind, all his or her children will be taken care of by a Trust if any more children are born after signing the Will (without any need to necessarily revise the Will).

I'm just a country lawyer in Upstate New York - and probably charge less than 1/3 what most attorneys in Mr. Hoffman's Manhattan neighborhood do - but I wouldn't have let this happen to his kids.  A cautionary tale then, for those impressed with white-shoe firms and fancy ZIP codes: caveat emptor.

Arizona: Discriminatus Deus

The past few weeks have been terribly cold and dreary here in New York, so my interest has turned, temporarily, to warmer climes.  According to reports, the Arizona state legislature has recently passed a law (H.B. 2153), which provides a defense to discrimination claims if the defendant’s actions were motivated by a “sincerely held religious belief” and the action complained of, or sought, by the plaintiff would “substantially burden” the defendant’s religious beliefs.  In essence, this statutory amendment would provide a license to discriminate by public businesses in that state.

I rarely make sweeping generalizations, but I am quite confident that, if the Governor of Arizona is mistaken enough to sign this bill into law, it will undoubtedly be overturned by the first federal court to hear a challenge.  That’s because, this law is apparently in direct conflict with the federal Civil Rights Act (codified at 42 U.S.C. §2000a, et seq.).  Under the Civil Rights Act, “[a]ll persons shall be entitled to the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation … without discrimination or segregation on the ground of race, color,  religion, or national origin.”  Under federal law “establishments of public accommodation” include all those “affecting interstate commerce or supported in their activities by State action”, such as hotels and motels (other than small bed & breakfasts); restaurants (including those contained in a mall or at a gas station); movie theaters, concert halls, sports stadiums, and other entertainment venues.  A business’ effect on interstate commerce is pretty liberally construed under the Civil Rights Act, but there is an explicit exclusion of coverage for certain “private club[s] or other establishment not in fact open to the public.”

To say – as a business under the Arizona statute might – that “I refuse to serve you because my religious beliefs conflict with your actions or beliefs, and serving you would make me feel bad” is legally indistinguishable from saying “I refuse to serve you because I disagree with your religion [or lack thereof].”  The latter is unequivocally prohibited by federal law, and the support of the former by the State of Arizona cannot be reconciled with the federal Civil Rights Act.

Beyond the obvious legal infirmities of this statutory scheme in Arizona, the practical effects could be a nightmare.  It appears from reports that the legislative purpose of this bill is to protect conservative Christian business owners who wish to turn away business from potential homosexual customers/clients.  However, even a place like Arizona is a religiously plural society, and the terms of this law could – and would – go far beyond “protecting” conservative Christians.  For example, Jews and Muslims are forbidden from consuming pork, so would a Jewish mechanic be justified in refusing to fix a pig farmer’s truck?  Ahimsa, or non-violence, is a core tenant of Buddhist faith, so could a Buddhist ice cream shop owner refuse to sell ice cream to the county animal-control officer?  An even more extreme example could be imagined from the fact that some white supremacist organizations in the United States have (most likely for tax avoidance purposes) putatively organized as “religious” groups.  Of course, I’m sure the core tenants of that “religion” is hatred of non-Caucasian groups, so the protection of a such a business owner's "sincerely held" religious conscience would involve a whole lot of discrimination.

History teaches us that, when a national monarch was given supreme control over the religious beliefs of his or her subjects, war and strife inevitably followed.  This fact was one of the primary inspirations for our First Amendment.  However, it is no less pernicious and destructive to the cohesiveness of our society, to appoint every citizen their own mini-Pope, empowered to decide who does and doesn’t “deserve” their entirely secular business services.

#FirstAmendment #Arizona #ACLU

Why Every Couple Needs Estate Planning (Not Just Traditional Ones)

A recent New York Times article describes as “alarming” a January 6^th ruling by the Brooklyn Surrogate’s Court, which prohibited the non-biological parent of a child in a same-sex marriage from legally adopting that child.  Under New York law, a child born into a marriage is presumed to be the legal child of both parties to that marriage (married mother and father, or, in this case, the married mother and mother).  Thus, the Court reasoned, there was no legal need (nor ability) for the non-biological mother to “adopt” the child whom is already legally her child.

There was no animus against the same-sex married couple in the Court’s decision; in fact the judge noted that “her decision flowed from her strong belief that all married couples, gay or straight, should be treated equally.”  Nevertheless, this ruling has created some consternation amongst married same-sex parents, who fear that the non-biological parent’s rights will not be protected if they move to another state that doesn’t recognize same-sex marriage or “worst-case situations in which [the biological parent] is killed or incapacitated.”

Sooner or later, the Fifth Amendment equal protection analysis that overturned the federal Defense of Marriage Act (DOMA) in Windsor v. U.S. last year, will bear its weight upon the mini-DOMAs still existent in certain states.  This development, while slow, will eventually address these parents' first concern.  Of course, same-sex couples could also choose to avoid altogether states inhospitable to their legal union, but that's a different matter.

Their second concern - that once the (only) biological parent is incapacitated or dies, the non-biological same-sex parent will not have legal guardianship of the child absent the formal adoption process - can already be protected against with existing New York State law.  For all couples - straight and gay, married or not - the single biological parent of a child can direct that a specifically-named guardian be appointed for that child in a Will.

But what about the legal twilight where the biological parent is living, but incapacitated in some way where they cannot care for their child, or give consent to another guardian?  Luckily, the New York State legislature has thought of that too.  Under New York Surrogate's Court Procedure Act section 1726, in a signed and witnessed writing, a parent may appoint a "standby guardian" in case of their death or incapacity.  Again, whether or not your relationship is same-sex, if there is no other biological parent of your child alive (or legally entitled to custody / guardianship), it may be wise to create the kind of directive outlined in NY SCPA 1726.

The Supreme Court's ruling in Windsor v. U.S., and the New York State Legislature have done a lot to equalize same-sex marriages with more traditional heterosexual marriages in New York.  However, that doesn't mean that any couples should ignore planning ahead for the inevitable death or possible incapacity of their loved ones.

A Goodfella’s Comeuppance

As most people are probably now aware, authorities recently indicted and arrested an alleged Mafioso in connection with the 1978 Lufthansa Robbery (which took place at Kennedy International Airport, and was made famous in the Scorsese film “Goodfellas”).  But if you’re anything like me, you might be wondering, “how can someone be arrested for a 35-year-old robbery; hasn’t the statute of limitations run out?”  Under New York Criminal Procedure Law Section 30.10, the statute of limitations for a felony (other than an A-level felony and some sexual assault crimes), is only five years.  Penal Law Section 160.15 clearly states that first-degree robbery is classified as a B-felony, so, in theory, the Lufthansa robbers could not be indicted or tried for this famous robbery after 1983.

However, despite the sensational headlines to the contrary, the arrest that was made this week was not actually about the 1978 Lufthansa heist.  Instead, it is an arrest pursuant to a federal indictment alleging a racketeering conspiracy that lasted from 1968 to 2013.  A federal racketeering (often called “RICO”) charge similarly has only a five-year statute of limitations.  But, the statute of limitations for a racketeering conspiracy charged under 18 U.S.C. 1962(d) doesn’t begin until the completion of the conspiracy.  In this case, the government alleges that the conspiracy did not end until 2013, so bringing the case in 2014 (even against individuals whose participation in the conspiracy might have been decades ago) is allowable.

I have no doubt that the statute of limitations will be one of the issues the defense attorneys will assert in pre-trial motions and argument, and it will be interesting to see how the federal court in the Southern District of New York handles it.

Is a $1,500 Divorce Possible?

I recently came across an interesting opinion piece in Reuters News this week: "How I got divorced for less than $1,500 in legal fees".  The author recounts his experience obtaining a divorce from his wife in Massachusetts for about $1,500 in legal fees.  But is this a realistic expectation for couples contemplating divorce in New York?   In my experience, I would offer a cautious maybe. 

The feasibility of an “inexpensive” divorce lies almost entirely within the control of the spouses getting divorced.  That is, if the spouses are generally amicable, and go first to a skilled mediator to negotiate and finalize a Separation / Settlement Agreement, the ensuing divorce process is normally very simple and routine.  There are several documents that your attorney will have to draw up – and minimum court filing fees of at least $335 -- but as long as there is no opposition from the other spouse/spouse’s attorney, the attorney fees for processing a “no fault” divorce case should be relatively low.  Similarly, if you and your spouse did not first go to a mediator, but did come to a general agreement on the main principles of a divorce settlement before you each obtained attorneys, the legal fees involved in putting that settlement in writing, reviewing what is proposed by the other spouse’s attorney, finalizing a settlement and processing a subsequent divorce, should be in the low 4-figures.

Then what makes contested divorce proceedings so expensive (generally $5,000 and up)?  The following list are my observations of just some of the things that add to a divorce’s legal (attorney) costs:

• Spouses disagreeing vehemently on the value and/or ownership of certain property (often requiring appraisers or other financial experts to be hired).
• Spouses disagreeing vehemently on the custody and/or visitation schedule for a child (this can arise once the non-custodial spouse sees the level of his or her child support burden).
• Shared ownership of a white elephant (an unsellable house; a rare and expensive heirloom neither wishes to part with; a family business).
• Spouses letting their (understandably) hurt feelings get in the way of rational negotiation (i.e. demanding possession of some minuscule piece of property merely out of spite). 

Of course, nobody gets divorced because they agree about everything and are best of friends with their spouse; but mutual respect, reciprocal empathy, and shared purpose in expeditiously dissolving the marriage will go a long way toward keeping your legal costs down.

Godfather Just Isn’t What It’s Cracked Up to Be

Recently, many of my friends and family have started getting married and having children, which is great.  And most of them have secured a man and woman to act in the traditional role of “godparents” to those children.  Although I’d imagine many people are aware of this, it’s nevertheless important to point out the fact that the appointment of a “godparent” is entirely a religious (or if you’re not particularly religious, a traditional) convention.  Most parents will seek out a godparent or two who they feel would be a good guardian for that child, should anything happen to the natural parents.  But this verbal appointment / acceptance of the role of “godparent” is not legally binding.  If you really, truly wish a trusted friend, or close relative, to be the legal guardian of your child if both you and your spouse pass away, you must put that in a Will (or other specific appointment document, but that’s another story).

In addition to appointing a trusted person or couple to look after the physical and/or financial well-being of your children, with a Will you can also set limits on how much of your property your children can access at a given age (a Trust), specify particularly sentimental property to go to one child of many, and/or set certain conditions on a child’s (even adult child’s) receipt of your property.

With all the hustle-and-bustle of being a new parent, it is easy to overlook estate planning (and even easier to ignore the potential of an unimaginable tragedy occurring).  But every parent should make a Will if they want to ensure that their children are looked after by trusted friends or relatives.

New York's Latest Gun Control Law Upheld by Federal Court

Federal Judge William Skretny (of the Western District of New York) upheld the vast majority of new state gun regulations passed as part of the 2013 SAFE Act against a constitutional challenge brought by the New York State Rifle & Pistol Association, in a decision filed earlier this week.  Although courts in Upstate New York (federal as well as state) are generally considered more conservative than their downstate counterparts, this ruling shouldn't come as a surprise to anyone familiar with Justice Scalia's majority holding in D.C. v. Heller.  In a case concerning the District of Columbia's complete banning of possession of handguns within a home, the Supreme Court squarely recognized that the Second Amendment confers an individual right to "keep and bear arms".  However, "[l]ike most rights, the right secured by the Second Amendment is not unlimited. ... nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms."  D.C. v. Heller, 128 S. Ct. 2783, 2816-17 (2008).  Later, in McDonald v. City of Chicago, Justice Alito and the Supreme Court majority applied the reasoning of Heller - and established incorporation doctrine - to strike down municipal (City / State) prohibitions on common handgun ownership.  But again, the Court made sure to point out that "[i]t is important to keep in mind that Heller, while striking down a law that prohibited the possession of handguns in the home, recognized that the right to keep and bear arms is not 'a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose.'" McDonald v. City of Chicago, Ill., 130 S. Ct. 3020, 3047 (2010) (quoting in part Heller).

So with what are we left?  The Second Amendment prohibits the local, state and federal governments from outright banning of all - especially common - firearms that might be useful for protection of one's home.  However, state and federal governments maintain the power to impose reasonable regulations on firearm ownership in order to preserve order and public safety.  In the federal district court's opinion in New York State Rifle and Pistol Association Inc. v. Cuomo, New York State struck the right balance with the SAFE Act.