Vol. 9 Issue 28 | March 2015 | www.nycla.org New York COUNTY LAWYER The Beat of New York Law It’s Not So Wonderful: The Nitty-Gritty of Food Labeling

actually in compliance with FDA rules and By Lindsey A. Zahn, Esq. regulations.8 In its suit, Pom Wonderful alleged that Have you ever picked up a food item the use of the label by Coca-Cola was mis- at the super market, scrutinized the label leading and deceptive under § 43 of the enough to realize that something about Lanham Act, which allows a competitor to the product’s description or claims just sue another provided that it asserts unfair seemed off, perhaps even misleading? competition from false or misleading prod- Such is my daily life as a food and bever- uct descriptions.9 The Court of Appeals age attorney. Unfortunately, according for the Ninth Circuit held that the FD&C to a study published in 2008 by The U.S. Act precluded Pom Wonderful’s Lanham Federal Food and Drug Administration Act claim.10 Pom appealed, and the case (FDA), only about 50 percent of consum- reached the Supreme Court in 2014. ers read the ingredients and nutrition facts panels before purchasing a food product What issue was presented in for the first time.1 What is the other half Pom Wonderful? missing? In the world of food and beverage The issue presented in Pom Wonderful regulation, the answer is most likely a lot. was whether a competitor could bring a The FDA has primary jurisdiction over Lanham Act claim challenging a product ensuring the safety and welfare of most food ing from false or misleading advertising.4 blueberry pomegranate juice, sued compet- label that is regulated and authorized by and beverage products in the United States.2 Because advertising and labeling are gen- itor Coca-Cola Company over Coca-Cola’s the FD&C Act.11 Even though the FD&C The FDA also promulgates regulations that erally not mutually exclusive, the regula- Minute Maid Pomegranate Blueberry Act and the FDA provide details on how provide guidance on how manufacturers tion of certain products can present inter- juice.5 The Minute Maid label contained the a manufacturer can label a fruit juice of a should label food or beverage products. esting questions, especially in the context words “blueberry pomegranate” in greater blend of such, there generally is not a pri- The Federal Food Drug and Cosmetic Act of the food and beverages. For example, predominance than other text on the label vate right of action to bring suit against a (FD&C Act), which authorizes the FDA to how do the Lanham Act and FD&C Act that indicated the juice was a blend of five party in violation of such. So a third party, oversee food safety, does not provide an interact when a label is in compliance with fruit juices.6 In actuality, the Minute Maid like Pom Wonderful, would need to find express or implied private right of action to the FD&C Act and enacting agency regula- Pomegranate Blueberry juice contained 0.3 separate grounds to bring a claim. enforce the Act’s provisions.3 tions, yet may present grounds for unfair percent pomegranate juice and 0.2 percent The Lanham Act, which prohibits a competition claims? Such was an issue blueberry juice, whereas 99.4 pecent of the What was the result of number of activities, does allow a competi- presented to the Supreme Court last year. blend contained apple and grape juice.7 Pom Wonderful? tor to bring a private right of action against Pom Wonderful LLC, the producer and While this label may seem misleading on Pom Wonderful holds that competitors its competitor for unfair competition aris- seller of pomegranate juices including a its face, Coca-Cola argued its labeling was { See Foods Laws on page 2 }

INSIDE NY COUNTY LAWYER It’s Not So Wonderful: The Impact of the SEC Guidelines on The Nitty-Gritty of Food Labeling ...... 1 The Impact of the SEC Guidelines on Investment-Based Immigration Investment-Based Immigration . . . . 1 Message from Lew Tesser President of NYCLA ...... 3 By Janire Lamiquiz, Esq. and Corey T. Lee, Esq. Message from the NYCLA Foundation ...... 3 Background 1 New Frontiers in Family Offices ...... 4 Obtaining EB-5 Immigrant Investor status has been a preferred pathway for Personal and Professional Reflections in obtaining lawful permanent resident Honor of the Anniversary of the (LPR) status in the United States for 1964 Civil Rights Act ...... 5 wealthy foreign individuals since the inception of the program in 1990.2 Gener- Two United Nations Conferences ally, in order to qualify for EB-5 LPR sta- to Advance Women’s Rights and tus, foreign nationals must invest lawfully Empowerment ...... 6 acquired funds (at least $1 million in most cases or $500,000 for rural or high-unem- NYCLA Recent Events ...... 7 ployment areas) in a U.S. Citizenship and Immigration Services (USCIS) approved NYCLA In The News ...... 8 regional center. The investor receives two Taxpayer Bill of Rights and years of conditional LPR status after the Importance of Paying Taxes . . . . .8 EB-5 visa is granted. The investor must as any economic entity, public or private, Regional centers are attractive to most 3 create or preserve 10 full-time jobs within which is involved the promotion of eco- potential EB-5 investors because they are Speaking Tips ...... 8 two years of obtaining conditional LPR nomic growth, improved regional produc- able to capture indirect jobs. In contrast, status to remove the condition and receive tivity, job creation and increased domestic those who invest in a “stand-alone” project NYCLA Library Notes ...... 9 LPR status without restrictions. capital investment in a designated con- that is not associated with a regional center NYCLA Upcoming Events ...... 9 tiguous geographical region. For purposes can only rely on direct jobs that are created. Regional Centers of EB-5, regional centers facilitate capital In other words, those who invest through a Only businesses that have applied for investment of EB-5 investors, fulfilling the regional center are more easily able to ful- and received approval from the United job creation requirement of EB-5 by indi- fill the job creation requirement to remove States Citizen and Immigration Services rectly creating jobs. In essence, a regional conditions to their conditional LPR status. (USCIS) may be designated as regional center acts as an agent, using the capital of Therefore, when the primary investment centers. An EB-5 regional center is defined foreign investors to create jobs indirectly. { See SEC on Immigration on page 2 } 2 • March 2015 The New York County Lawyer

the Pom Wonderful, similar claims were While some of this text may be unique labeling regulations and requirements. FOOD LAWS brought against alcohol beverage prod- to the product’s characteristics, the most Continued from page 1 ucts boasting terms like “small batch,” important thing for a manufacturer to Lindsey A. Zahn, Esq., a “handmade,” and “handcrafted” on bev- consider is the accuracy of these claims. NYCLA Member, is an may bring a private right of action under erage labels.15 Since alcohol beverages Under the FD&C Act, a manufacturer of alcohol beverage and food the Lanham Act alleging unfair competi- are regulated by the Alcohol and Tobacco a food and beverage product is responsible attorney. She represents tion from false or misleading product Tax and Trade Bureau—whose regulatory for ensuring that all claims on a label or domestic and international descriptions on the labels of food or bev- authority derives from the Federal Alcohol labeling are truthful and not misleading.17 food and alcohol beverage erages regulated by the FD&C Act.12 The Administration Act—and since alcohol Generally, these requirements have companies with regulatory counseling, FD&C Act’s provisions do not preclude labels require pre-market approval from been mandatory for food and beverage advertising and labeling, import/export the statutory private right of action that the federal government, some wonder manufacturers even pre-Pom Wonderful, issues, licensing, direct shipping, and derives from the Lanham Act.13 Effectively, whether the holding of Pom Wonder- however the case’s ruling may increase the tied house laws. Additionally, she is the the Supreme Court’s holding means the ful would apply. This is yet to be seen, exposure to suits brought by competitors author of an award-winning blog, On FD&C Act will not serve as a limit to food although some ambitious plaintiffs claim or even class actions. Thus, a producer Reserve: A Wine Law Blog (http://www. regulations because Congress intended Pom Wonderful’s outcome should apply to must take precaution to ensure its labels winelawonreserve.com). the Lanham Act and FD&C Act to accom- alcohol, too.16 In actuality, these plaintiffs are not only in compliance with FDA pany one another and be read together, as are also arguing that pre-market approval regulations, but can also defend Lanham 1 Conrad J. Choinière and Amy Lando, opposed to the latter trumping the former. of an alcohol label is simply a floor and Act claims or related state laws. 2008 Health and Diet Survey, Center for As a result of the Pom Wonderful case, does not necessarily imply the producer is Often, this is easier said than done, Food Safety and Applied Nutrition, FDA, food and beverage companies are increas- immune from false advertising or unfair but the FDA does provide a significant available at http://www.fda.gov/Food/ ingly more susceptible to these types of competition claims. amount of regulations and guidance FoodScienceResearch/ConsumerBehav- suits, and state court consumer protection documents to ease the labeling process. iorResearch/ucm193895.htm. actions may be on the rise. An important What is the most important thing to Still, given the outcome of Pom Won- 2 See generally 21 U.S.C. ch. 9 § 301 et seq. thing to note is that, even though a label consider when advising food and bev- derful, a manufacturer must now assess 3 21 U.S.C. ch. 9 § 301; see, e.g., Pom Won- or labeling may comply with FDA’s regula- erage clients? enforcement dangers with respect to derful LLC v. The Coca-Cola Company, tions, it can still be misleading, deceptive, Many times, food and beverage clients labeling somewhat differently. The most 573 U.S. ___ (2014), 134 S. Ct. 2228. and possibly in violation of the Lanham enjoy using romance copy or other fanci- important step a prudent manufacturer 4 15 U.S.C. § 1051 et seq. Act.14 ful language to promote or differentiate can take is to have the label reviewed by 5 See, e.g., Pom Wonderful LLC v. The Co- While not specifically addressed in their products from those of competitors. a lawyer or consultant familiar with food ca-Cola Company, 573 U.S. ___ (2014),

objective is obtaining permanent resident tion: Companies relying on the Rule 506 SEC ON status, investing through a regional cen- 1. The company cannot use general exemptions are not required to register the ter is substantially more attractive than solicitation or advertising to market sale of securities with the SEC, but they are IMMIGRATION investing through a “stand-alone” project the securities; required to file a “form D” electronically Continued from page 1 because of the ability to capture both 2. The company may sell its securities that includes basic information about the direct and indirect job count. Please note to no more than 35 non-accredited company and the offering. that approval by USCIS does not in any investors (but may sell to any num- way represent that a government agency ber of accredited investors). Broker-Dealers has approved the financial strategy of the An accredited investor is an investor Most regional centers have foreign and regional center or evaluated and assured who: domestic agents that help connect with the quality of the investment. a. has an individual (or a joint and refer potential investors. Under the Upon investing in a regional center, an net worth with a spouse) that Securities Exchange Act of 1934 (Exchange Published for investor becomes either a limited partner exceeds $1,000,000 at the time Act), “broker” is defined generally as “any New York County Lawyers’ Association or a member, depending on the organiza- of purchase; person engaged in the business of effecting 14 Vesey Street tional structure of the regional center (a b. has an individual income that transactions in securities for others.”6 Gen- New York, NY 10007 limited partner in a limited partnership exceeds $200,000 in the two erally, if a person actively locates investors (212) 267-6646 (LP) or a member in a limited liabil- most recent years and expects on a regular basis, receives transaction- www.nycla.org ity company (LLC)). When an investor to maintain the same level of based remuneration or advises investors as becomes a limited partner or a member, income in the year of purchase; to the merits of the investment, that per- Lewis Tesser the regional center is selling a security. or son may be deemed to be a broker.7 Sec- President c. has a joint income that exceeds tion 15(1)(1) of the Exchange Act requires Securities $300,000 in the two most recent registration with the SEC of any person Sophia J Gianacoplos As defined by the Securities Act of 1933 years and expects to maintain acting as “broker” or “dealer” of securities Executive Director (Securities Act),4 “securities” include “any the same level of income in the in interstate commerce. Toni Valenti note, stock, treasury stock, [...] investment year of purchase; The Exchange Act establishes two main Director of Marketing & contract, [...] or in general, any interest or 3. In the event that the securities are exemptions to the registration require- Membership Development instrument commonly known as a ‘secu- sold to non-accredited investors, ment, which are commonly known as 4 Ariella Greenbaum rity.’” The U.S. Securities and Exchange the seller is required to furnish upon the “issuer exemption” and the “finder Editor Commission (SEC) considers a limited request the investor information set exemption”. First, the finder exemption Senior Communications & partnership interest in an LP and, although forth in Rule 502(b) (similar to the applies in cases where the finder (i) only Social Media Manager there is continuing debate, membership information required in a registra- introduces the prospective investor to the interest in an LLC an “investment con- tion of the securities with the SEC); issuer; (ii) does not participate in nego- Art & Design Adjudicator tract” and, therefore, a security. Conse- 4. The company must abide by anti- tiating the transaction; and (iii) receives Aude Cabaldon quently, foreign investors investing capital fraud prohibitions of federal secu- compensation dependent on the purchase in a regional center are effectively purchas- rity laws; of the security. ing securities. As a result, the Securities Act 5. The company must be available to Second, the issuer exemption the issuer ®2015 New York County Lawyers’ Associa- requires that such sales of securities be reg- answer questions of prospective itself does not need to be registered because tion. All rights reserved. New York County istered with the SEC, a process that is long, purchasers; and the issuer effects the transactions for itself Lawyers’ Association grants permission arduous, and expensive. However, exemp- 6. The company must provide finan- and is not engaged in the regular business for articles and other material herein or tions to this registration requirement exist. cial statements certified by an inde- of selling and buying securities. However, portions thereof to be reproduced and pendent, public accountant. the issuer exemption does not extend distributed for educational or professional Unregistered Securities non-broker-dealer status to employees use through direct contact with clients, Unregistered securities are securi- Under Rule 506(c), a company may gen- of the issuer who can still be considered prospective clients, professional colleagues ties that have been properly exempted erally solicit or advertise securities if: “brokers” or “dealers” under Section 3 of and students provided that such shall not from registration requirements with the 1. All investors in the offering are the Exchange Act. This illogical conclusion involve any matter for which payment SEC. In the case of regional centers, such accredited investors; and and the host of problems it entails were (other than legal fees or tuition) is made exemption usually falls under Rule 506 of 2. The company must take reasonable addressed by the promulgation of Rule and provided further that all reproductions 8 include the name of the author of the Regulation D, considered the “safe harbor.” steps to verify that all investors are 3a4-1 in 1985. article, the copyright notice(s) included in There are two types of exemptions under accredited investors (e.g., reviewing Rule 3a4-1 states that “an associated per- 9 the original publication, and a notice indi- Rule 506 of Regulation D: exemptions for documentation such as W-2 forms son” of an issuer of securities shall not be cating the name and date of the Association entities that do not use general solicita- and tax returns). deemed to be a broker solely by reason of publication from which the reprint is made. tion or advertising to market the securities his participation in the sale of the securi- (Rule 506(b)) and exemptions for entities Furthermore, all unregistered securities ties of the issuer if the associated person that use general solicitation or advertising purchased under Rule 506 of Regulation fulfills a set of qualifying conditions. These Subscription • New York County Lawyer (Rule 506(c)).5 In both cases, entities must D are considered restricted securities, qualifying conditions include, among oth- is published monthly (except January and comply with Rule 501 of Regulation D and meaning that the securities cannot be sold ers, that such associated person: (i) is not August) for $10 per year by New York certain conditions set forth in Rule 502 of without first being registered except under compensated in connection with his par- County Lawyers’ Association, 14 Vesey Regulation D. certain circumstances (e.g., Rule 144 ticipation by the payment of commissions Street, New York, NY 10007. Under Rule 506(b), a company must sat- (securities held for at least six months are or other compensation based either directly isfy the following to qualify for an exemp- no longer considered restricted)). { See SEC On Immigration on page 11 } The New York County Lawyer February 2015 • 3

Message from Lew Tesser Message from the President of NYCLA NYCLA Foundation Building Careers Celebrate Women’s History Month in March

Dear Member: May honoring attorneys and law students Dear Member: felons get back on their feet after great life You may have who deserve recognition for their contribu- We educated, changes. But what is particularly surprising attended a NYCLA tions to the legal profession. privileged lawyers about the people who are benefitted by our event or program Law students are also encouraged to have a professional programs, is that in at least 3 of our pro bono organized by our join the group and attend programs like and moral duty to programs (Legal Counseling, State Central vibrant and active NYCLA’s annual Lunch with a Judge pro- represent the under- Registry and CLARO projects) 50% of the Young Lawyers’ Sec- gram held each June that offers real-world represented in our clientele helped by our volunteer attorneys tion in the past. One education for summer associates. Attendees society, to ensure that are women. This means, that NYCLA mem- might say that this group is the pulse of the witness real motions and arguments and justice exists for all, both legal and economic bers are doing a wonderful job of contrib- organization, bringing members together experience face-time with judges in inti- justice. —Justice Sonya Sotomayor uting to the community, and empowering to learn, socialize, and network. Run by mate, small group settings. Other programs At the 2014 Annual Dinner, we heard women to take charge of their affairs and Co-Chairs Dan Wiig, counsel at Municipal for law students include the annual Mentor from Justices Ruth Bader Ginseberg and become better members of society. I think Credit Union and Adjunct Law Professor Auction and the law student correspondent Sonya Sotomayor about their experiences on the Justices would be especially proud of the at St. John’s University School of Law, and program through which representatives the Supreme Court and their journeys to the work we are doing. Adam Roth, Associate at Wingate Russotti from area law schools host on-site events to bench. All attorneys, women and men, have We could not hope for better progress or Shapiro & Halperin, LLP, the group actively give their colleagues and friends a glimpse been inspired by their stories of triumph better representation of NYCLA’s philoso- seeks to make NYCLA membership mean- into NYCLA. and true love of the law. Their work continu- phy—that everyone should be included and ingful for those who belong to it. Another initiative organized by the Young ally shapes our society every day, and I am helped if they need it. Not only are so many Each year a myriad of events and pro- Lawyers’ Section is the exclusive peer-to- sincerely encouraged by their wisdom. So, of the women attorneys in New York City grams are organized for members, target- peer Resume Review Service, which is as we move into spring, it is important that (and the nation) thriving in law, but we are ing those admitted about 10 years or less. available only to NYCLA members and run we celebrate not only their achievements as also empowering other women to get back A variety of activities help members build by program Co-Founders and Co-Chairs women in law, but that of the many incred- on their feet by providing key legal services their careers and shape their lives—includ- Katherine Hwang, Esq., Young Lawyers’ ibly talented women attorneys who are they would not otherwise be able to afford. ing CLEs, small-group meet and greets Section Vice Chair and Assistant Attorney members of NYCLA and the work they are NYCLA wants to continue to provide these with judges, happy hours, networking General, New York State, and Mitch Huzar, doing to further the lives of other women services for years to come, and with your events, and recognition programs. Recent Esq., The Matays Law Group, P.C. Now in society. What better time to do so than help, we will do just that. I strongly encour- CLEs included “So You Want to Be a Judge” in its third year, volunteers help members Women’s History Month in March. age you to donate to these effective and and “All About Debt” while members had refine their resumes for particular practice NYCLA has always been the bar asso- life-changing pro bono programs when you the opportunity to meet with Hon. Jenny areas and also help those seeking supervi- ciation of inclusion. This is our bread and can. Our service to women and families is Rivera, Associate Judge, New York Court sory and lateral positions. butter. Women, minorities, and LGTBQ just one more way NYCLA is making a dif- of Appeals at an “In Chambers” program. If you’re admitted less than 10 years or attorneys all have had a place at the Home ference in the community. Nearly 500 connections were made at the if you’re a law student and not already a of Law from the beginning. Because of this group’s recent Speed Networking program, member of the Young Lawyers’ Section, I diversity, we are able to adapt and work with and members are in the process of submit- highly recommend that you join this ener- each other and help others through our pro ting nominations for the group’s Young getic and resourceful group. Looking to bono programs with an open mind. We are Carol Sigmond Lawyers Awards, which will be held this { See Lew Tesser on page 5 } helping everyone from veterans to convicted President, NYCLA Foundation

Law and Literature Award Ceremony and Program

Award Presented to Gilbert King Author of the 2013 Pulitzer Prize Winning Book Devil in the Grove: Thurgood Marshall, the Groveland Boys and the Dawn of a New America

Join us as NYCLA’s Law and Literature Committee presents its Law and Literature award to Gilbert, author of the 2013 Pulitzer Prize winning book Devil in the Panel Discussion: Thurgood Marshall’s Legacy Grove: Thurgood Marshall, the Groveland Boys and the Dawn of a New America, a beautifully written account of four black men falsely accused of raping a 17-year-old white woman in Groveland, Fla., in 1949. It explores, in painstaking detail, the tactics used by their lawyer, Thurgood Marshall, to chip away at the Tuesday, April 14, 2015 foundations of Jim Crow laws. 6:00 PM – 8:15 PM After accepting the award, Mr. King will make a presentation about the case and 2.5 NY Credits: 2.5 PP how he researched it by gaining access to unedited FBI les, conducting interviews, while also convincing the NAACP to allow him to view the les of its 2.5 NJ Credits: 2.5 General Legal Defense and Education Fund. Transitional and Non-transitional

The evening concludes with a panel discussion commenting on criminal justice and civil rights issues raised by the book and by Justice Marshall's career among Mr. King, Barbara D. Underwood, NY Solicitor General, former law clerk for Associate Justice Thurgood Marshall, Bruce Green, Louis Stein Professor at Fordham Law School, former law Clerk for Associate Justice Thurgood Marshall and Gloria Browne-Marshall, John Jay College of Criminal Justice and former litigator at www.NYCLA.org NAACP Legal Defense and Educational Fund, Inc. 4 • March 2015 The New York County Lawyer

New Frontiers in Family Offices

their wealth. Some of today’s legendary (G)-1)), family offices must meet certain the interests of family members from dif- By E. David Smith, Esq. and investors have converted their hedge funds SEC requirements to avoid being consid- ferent generations. All too often, this raises Yitzy Nissenbaum, Esq. into family offices. Steve Cohen, founder ered an investment adviser. To meet these difficult questions about who, exactly, is of SAC Capital Advisors, transformed his requirements, a family office must (1) have the client, creating potential conflicts of When I tell other attorneys that I rep- hedge fund into a family office in 2014, fol- no clients other than “family clients”; (2) be interest for an attorney, particularly with resent “family offices,” many give me a lowing a string of highly publicized insider wholly owned by “family clients” and exclu- respect to attorney-client privilege. puzzled look and say “oh, so you do matri- trading allegations against his company. sively controlled (directly or indirectly) by To learn more about family offices, join monial law?” Well, no. George Soros also decided, in 2011, to one or more family members and/or family us at NYCLA’s CLE on the topic, “Family Others think the term “family office” change his hedge fund into a family office. entities; and (3) not hold itself out to the Offices: A to Z about acting as legal counsel refers to a family-owned business. That These are just two examples from among public as an investment adviser. for a Family Office” on April 21. Visit nycla. may be closer to the truth. the many renowned investors who have The rule also delineates who may be con- org to learn more and register. So what is a family office? Essentially, it’s chosen the family office structure to man- sidered a permissible “family client.” The a private company handling the affairs for a age their portfolios. non-exhaustive list primarily comprises wealthy family. The Investopedia reference While it is true that family offices origi- family members, former family members, E. David Smith, Esq., is website defines family offices as “private nally catered only to the extremely wealthy, and key employees. Subject to certain outside general counsel wealth management advisory firms that there has been a growth in family offices as conditions, it can also include former key for US-based companies serve ultra-high net worth investors. Family the structure’s appeal becomes clear to oth- employees. A family office is allowed to and international entities offices are different from traditional wealth ers whose assets are slightly more modest.3 serve clients of non-profit or charitable focusing on positioning management shops in that they offer a While there’s little formal data definitively organizations or estates of those members, companies for growth total outsourced solution to managing the accounting for the number of family offices, if the organization or estate is funded exclu- opportunities and mitigating risk. Combining financial and investment side of an affluent FOX estimates that there are 2,500 to 5,000 sively by former or present family members his experience in corporate transactions, individual or family.”1 family offices in the U.S., with another 6,000 and employees. Similarly, it can manage financing and governance, corporate litigation Family offices can serve very differ- informal family offices operating inside various trusts in which the trust is either and intellectual property, he provides ent purposes, providing services ranging privately-controlled businesses. Moreover, controlled, conveyed, exclusively funded or strategy and quarterbacks companies’ and from simply acting as a concierge ser- in Europe and Asia, where family offices are has as an enumerated primary client a ben- family offices’ legal needs. As part of guiding vice, arranging vacations and the like, to a newer development, the number of family eficiary of the trust, and where a company his clients in the creation and growth of managing all the day-to-day operations offices is surging. is wholly owned and operated for the sole their wealth, he counsels clients in asset for a family, including payroll activities, In addition to classifying family offices benefit of family clients. The rule also allows preservation. accounting, and legal issues. according to their focus, as in the seven certain family offices to be grandfathered in The Family Office Exchange (FOX), the main categories above, family offices can to avoid registration with the SEC.5 Yitzy Nissenbaum, Esq.,is a largest peer-to-peer network for ultra- also be categorized according to the num- A family office’s legal needs do not begin practicing attorney in NY. wealthy families and their family offices, ber of families they represent: a single-fam- and end with merely complying with regu- He was formerly Of Counsel identifies seven common office types, ily office (SFO) and a multi-family office latory requirements. Numerous questions with Kirkland & Ellis and although many family offices are hybrids (MFO). A SFO is a structure that manages will arise in the formulation of a family an Associate with Kenyon of the branded office types. These are: the financial and personal affairs of only office, even with an SEC exemption, as to & Kenyon. He is an active (1) Founder’s Office; (2) Business Owner one wealthy family. A MFO is broader in what is the appropriate legal entity sta- member in various NYCLA Committees, Office; (3) Diversified Business/Private focus and supports multiple families in tus for a family office. The choice of legal including the Federal Courts Committee and Equity Office; (4) Investment Office; (5) managing their affairs. Though this distinc- structure, whether it will be a partnership, a the Cyberspace Law Committee. He is also Compliance Office; (6) Philanthropy tion seems obvious, in reality the differences limited liability company (LLC), or a S Cor- currently serving as a Chair of NYCLA’s newly Office; and (7) Multi-Generational Office. can be quite complex, and determining the poration, may have far-reaching tax impli- formed Lawyers in Transition Committee. The Founder’s Office model is designed established structure of the family office is cations. Furthermore, complex issues can 1  to support the founding family of the critical for regulatory purposes. arise with respect to the needs and legalities Family Offices”, Def. INVESTOPEDIA, business and generally concerned with Historically, family offices sidestepped of estate planning. available at http://www.investopedia. addressing issues outside the scope of the much of the SEC regulation imposed by While family offices are often like a corpo- com/terms/f/family-offices.asp (last vis- actual operating business. In contrast, a the Investment Advisers Act of 1940 (IAA). ration, the legal counsel has a responsibility to ited February 5, 2015). 2  Business Owner’s Office provides aid to The IAA, until recently, contained a “private the family behind the family office, since the “Types of Family Offices, Seven Com- the shareholders regarding the control and adviser exemption” under Section 203(b) family office is only a vehicle to accomplish mon Models Defined”, FAMILY OFFICE maintenance of the primary business. The (3) ((15 U.S.C. 80b-3(b)), which allowed the family’s goals. Hence, legal counsel is EXCHANGE, available at https://www. Diversified Business/Private Equity Office an investment adviser with fewer than 15 required to confront any issues a family office familyoffice.com/understanding-family- assists the owners in extending the realm of clients over a 12 month period to avoid faces with a critical eye to both the present and office/types-family-offices (last visited their business activities beyond the original registration with the SEC. Under the “pri- the future generations’ possible goals. February 5, 2015). 3  business. An Investment Office supports vate adviser exemption” many hedge funds, This role is different from that of legal See Julie Steinberg & Kelly Greene, Finan- owners choosing public equity investing private equity funds, venture capital funds, counsel to a regular corporation. In a regu- cial Advice, Served Rare, WALL ST. J., May over private equity investing, overseeing the and family offices, which would include lar corporation, the goal is to maximize the 17, 2013, http://www.wsj.com/articles/ investment process. A Compliance Office properly-structured multi-family offices, return for shareholders, and shareholders SB10001424127887323551004578441002 serves in the area of wealth management, were excluded from SEC oversight. can sell their shares if the return is not to 331568618 (last visited February 5, 2015). 4  functioning to control costs. Sometimes This law changed in 2010 when President their liking. In a family office, the interested “Family Office”, INVESTMENT ADVIS- the purpose of the family office is to aid Barack Obama signed the Dodd-Frank Wall parties are family members for life. They ERS ACT RELEASE NO. 3220 (June 22, the family in its philanthropic ventures and Street Reform and Consumer Protection Act cannot just simply sell their interests and 2011), available at http://www.sec.gov/ activities, with that type of office recog- (Dodd-Frank) into law. The new law elimi- cash out. Therefore, there is a far greater rules/final/2011/ia-3220.pdf (last visited nized as a Philanthropy Office. Finally, there nated the “private advisor” exemption, forc- interplay of the conflicting interests of both February 5, 2015). 5  is a Multi-Generational Office tasked with ing entities that had previously been exempt the present and the future generations. Id. 6  the challenge of delivering a broad range of from oversight to register with the SEC. Accordingly, a family office can have more See E. David Smith, Make Sure your offerings for family members of different When Dodd-Frank was first proposed, nuanced and complex legal concerns than a Direct Investments Float Your Boat, generations.2 family offices recognized that the elimina- typical Fortune 500 corporation. Don’t Sink it, FAMILY OFFICE CAPITAL The array of family office types means that tion of the exemption could compel family The demands of the family office on its NETWORK (FOCAPNET), available at different family offices have vastly different offices to register with the SEC. In response, counsel will vary depending on the services http://edslaw.net/wordpress/wp-content/ legal needs, with some offices needing a full family office representatives joined to form it provides, which could include corporate uploads/2014/03/FOCAPNET-Make- complement of legal services. A family office the Private Investor Coalition, which spear- work, intellectual property work, compli- Sure-Your-Direct-Investments-Float- may need legal counsel related to tax plan- headed a lobbying effort to establish a for- ance, information governance, and assis- Your-Boat-Dont-Sink-It.pdf (last visited ning, estate and succession planning, trust mal definition of the term “family office.” tance on mergers and acquisitions. Since February 5, 2015). planning, investment management, corpo- This lobbying effort succeeded in creat- family offices typically engage in direct rate governance, real estate, employment, ing a “family office exemption” from SEC investments, they will need legal advice on privacy, regulations, and insurance, to name registration, although this exemption was how to best perform legal and regulatory just a few of the basic legal services needed. not extended to multi-family offices. As the due diligence with respect to investment Family offices are designed to serve the SEC concluded in creating the exemption, deals.6 Maintaining a family office means ultra-wealthy. Indeed, the first modern fam- there was no way “to distinguish in any handling very sophisticated transactions, ily offices, as they exist today, were formed meaningful way between [multi-family] requiring top-flight legal talent. back in the 19th century to manage the offices and family-owned commercial advi- Legal work for family offices not only expanding fortune of the Rockefeller family. sory firms that offer their services to other entails complex problems and intricate However, their popularity continues to rise. families.”4 attention to details, but also comes with Many celebrities, including Oprah Win- Under the Family Office Exemption (Rule its own set of professional ethical issues. frey, have opted for a family office to handle 202(a)(11)(G)-1 (17 CFR § 275.202(a)(11) Often, the family office is designed to serve The New York County Lawyer February 2015 • 5

Personal and Professional Reflections in Honor of the Anniversary of the 1964 Civil Rights Act1

Honorable Ronald Ellis at the City University of New York, School the country to admit all attorneys as mem- By Laury A. Betha, Esq. Judge Ellis was born 60 miles southeast of Law. Prior to that she worked in public bers without regard to their background.”5 of New Orleans in the Bayou country. service for the Legal Aid Society’s Home- Thus, it was fitting to have a panel of civil As the maxim from Justice Oliver Wen- Judge Ellis told the attendees that, “Seg- less Family Rights Project, the Puerto rights trailblazers present their personal dell Holmes, Jr. reminds us: “The life of the regation was so much a part of what was Rican Legal Defense and Education Fund stories in commemoration of the 1964 Act law has not been logic, it has been experi- happening [in Louisiana], I did not ques- (renamed Latino Justice PRLDEF), and to the NYCLA members. The organization ence.”1 In late 2014, NYCLA’s Civil Rights tion it.” However, ironically enough, in “was appointed by the New York State has been a vanguard organization in the and Liberties Committee, Federal Courts his elementary schools, he had only white Attorney General as Special Deputy Attor- admission of attorneys without regard to Committee, and Minorities and the Law teachers. It was clear to his parents from ney General for Civil Rights.” race or gender. Committee held a panel discussion of four their occupations of common laborer and Judge Rivera argues that the 1964 Act current and former experienced judges. domestic, that the occupational oppor- was instrumental in the fight for Latino Laury A. Betha, PhD., Esq. NYCLA members and non-members in tunities for Judge Ellis, and his siblings rights in the areas of housing, education, is a member of NYCLA’s attendance were fortunate to hear the per- would be limited if the family remained in healthcare and employment. She has had Federal Courts and LGBT sonal stories, and professional legal tales of Louisiana. a specialty concentration on women’s and Committees. She is a solo the Honorable George Bundy Smith (Ret.) Starting with his father, the family immigrant’s rights. The judge believes practitioner with the Law NYS Ct. of Appeals, the Honorable Ronald migrated to New York City and settled in that the Act “frames a particular moment Office of Laury A. Betha 3 Ellis, Magistrate Judge, Southern District Harlem. He described his upbringing as in time” and that we “need to think about in Fort Lee, NJ. She works collaboratively of New York (SDNY), the Honorable “uneventful.” He earned a bachelor’s in ways the statute can be changed” to include in New York with George Bundy Smith Jenny Rivera, NYS Ct. of Appeals, and the chemical engineering from Manhattan the current civil rights issues of today. & Associates, P.C. She can be reached at Honorable Pamela Chen, District Judge, College in 1972, and a law degree from http://laurybethalawfirm.com. Eastern District of New York (EDNY). New York University in 1975. Judge Ellis Honorable Pamela Chen In keeping with the theme of the eve- was fortunate to obtain an internship Judge Chen received her BA from the 1 Holmes, Oliver Wendell, Jr. (1881). The ning, the panel was moderated by Cath- with the NAACP-LDF while in law school University of Michigan (1983), and her Common Law: Little, Brown and Com- erine Christian, Esq., a former NYCLA where he drafted discovery and interroga- law degree from Georgetown University pany. President and NYCLA’s first and only tory requests. After graduating from law Law Center (1986). She worked in private 2 Abernathy v. The State of Alabama, 380 US African-American President. school, he was hired full time at the LDF practice in Washington, DC before work- 447 (1965)(Sup. Ct. ruled 7-0 to reverse where he remained from 1976 until 1993. ing for the US Department of Justice, and the decision of the Court of Appeals of Honorable George Bundy Smith Since 1993, he has been on the bench in then as an assistant US attorney for the Alabama. Justices White and Black took Attendees learned of the early educa- the SDNY as a magistrate judge. EDNY. no part in this decision.) tion, and activism of Judge Smith (Ret). As a staff attorney with the LDF, he Judge Chen presented on the very diffi- 3 The movement of large numbers of Born in New Orleans, LA, and raised in traveled throughout the South litigating cult and timely civil rights issue of human Blacks from the segregated South to the Washington, DC, Judge Smith observed cases in voting rights, employment law, trafficking. This was my second time North was called the Great Migration. see segregation at a very young age, and won- and other areas. He was shocked by the hearing Judge Chen’s presentation on this Isabel Wilkerson, The Warmth of Other dered why white children went to separate entrenched racism. He recounted how in topic, and each time it is gripping, but very Suns: The Epic Story of America’s Great and better schools than black children. one company town he was told: “If it needs difficult to listen to because of the brutal Migration, Random House (2010). Even then, he knew that he could make a a key, it is a white man’s job.” Judge Ellis treatment of some of the world’s most vul- 4 Subsequently reauthorized as Traffick- change in the educational conditions of all thoroughly enjoyed his civil rights work, nerable by a small segment of society who ing Victims Protection Reauthorization children. and stated that he would have “considered would prey on fellow country persons, and Act of 2003 (TVPRA) (see United States v Before setting out on his activist work, his legal career a success if he had worked abuse their immigration hopes and expec- Sabhnani, 599 F.3d 215. Also see, Pamela he was educated on a full scholarship at only at the LDF.” Judge Ellis pointed out tations. Chen & Monica Ryan, “Federal Prosecu- Phillips Academy. At Yale, he earned a BA that the 1964 Act is “part of a whole” and At the time that she prosecuted a human tion of Human Traffickers”, in Lawyer’s in history in 1959, and a law degree in “a continuum from the World War II civil trafficking ring based in Queens, New Manual on Human Trafficking: Pursu- 1962. Later in life, he earned an MA from rights legislation.” York, she was the chief of the criminal ing Justice for Victims 271 ([Jill Laurie NYU, and an LLM from the University of section of the Civil Rights Litigation Unit. Goodman & Dorchen A. Leidholdt, eds., Virginia School of Law. He worked as a Honorable Jenny Rivera The Mexican family of human traffickers 2011]). judge in the New York State courts for 31 Judge Rivera was born and raised in preyed upon poor, young women in a rural 5 Remarks of Lewis Tesser, President, New years, 14 of those years on the NYS Court New York City. She reported that she grew community in Mexico. The family mem- York County Lawyers’ Association at of Appeals. After retiring from the bench up on Fifth Street by Avenues B and C and bers transported the women to the United Luncheon Honoring Federal Courts in in 2006, he joined Chadbourne & Parke, in the Baruch Houses. She enjoyed her States, and forced them into prostitution. New York City. New York Law School, LLP, as a partner, where he remained for NYC upbringing, and fondly remembers The family also illegally brought to the November 3, 2014. five years. He is currently semi-retired protesting with her mother against the United States hearing impaired men and from the practice of law, but still litigates exclusion of Puerto Ricans from public women, beat and tasered them, and forced and mediates cases around the country. housing. She reported that she was a very them to beg on the subways of NYC. During undergrad, Judge Smith joined small child, and did not know exactly Since this family was from the commu- a freedom ride from Atlanta, Georgia what they were doing, but knew that there nity, they gained the trust of the residents, to Montgomery, Alabama where he was was a reason for standing in a circle with and were even thought of as powerful and arrested at a lunch counter. His intention the neighborhood women, and shouting prestigious. The human trafficking ring LEW TESSER was to join other freedom riders in Jack- about housing discrimination. continued for more than a decade. Continued from page 3 son, Mississippi, but he was jailed. He According to the Judge, all the Latino Judge Chen and her team of assistant was convicted of breach of the peace, and families who could afford to, put their United States attorneys were able to use build your resume/CV? Another reason to unlawful assembly. Two trial courts found children in Catholic schools to avoid the the Trafficking Victims Protection Act join—the group always looks to members him guilty, and the Court of Appeals of sub-standard education of the public (TVPA) of 20004 to charge several ring- to organize a moderate programs. Alabama affirmed. The National Asso- schools available to Latinos. She states leaders with a wide range of criminal and Log onto NYCLA.org with your Mem- ciation for the Advancement of Colored that Latinos were not given the “resources” civil violations. The defendants received ber ID and password then click on ‘Join a People Legal Defense Fund (NAACP-LDF) available to whites which was a barrier to long sentences. Judge Chen reported that Committee” on the left navigation under appealed his conviction to the Supreme educational advancement. this is the “modern face of slavery in this “Members Only” and select the “Young Court of Alabama, but the court refused Judge Rivera attended catholic schools country.” Lawyers’ Section.” If you’re already a to hear the case. The LDF then appealed to from fifth grade through high school. The judge cited to the representative member, look out for emails from Dan the US Supreme Court where the convic- She earned her bachelor’s from Princeton cases in this area of United States v Carreto, and Adam about upcoming meetings and tion was unanimously reversed.2 University (1982), her law degree from 583 F.3d 152 (2nd Cir. 2009), and United opportunities. Judge Bundy Smith’s civil rights protests New York University (1985) and an LLM States v Sabhani, 599 F.3d 215 (2nd Cir. I hope to see you at a future Young Law- gave him his first experiences with litiga- from Colombia University School of Law 2010). yers’ Section program. Please email me tion, and the use of litigation to overthrow (1993). After law school, the Judge clerked NYCLA started its inclusive mission of at [email protected] or tweet me @ segregation. Whether on the bench or in for the Honorable Sonia Sotomayor, then membership without regard to race prior NYCLAPres and let me know how NYCLA practice, the heart of the judge’s legal work of the SDNY, and now of the US Supreme to the 1964 Act, and has continued this can work for you. was to change educational, social, and Court, and clerked in the Pro Se Law mission to the present day. In remarks legal discriminatory practices. Such work Clerk’s Office. made at a luncheon honoring the federal is certainly the legacy of the 1964 Civil At the time of Judge Rivera’s appoint- courts in NYC, the President of NYCLA, Rights Act. ment to the NYS Court of Appeals in Janu- Lewis Tesser, told of the Association’s his- Lew Tesser, President ary, 2013, she was a tenured law professor tory “as the first major bar association in New York County Lawyers’ Association 6 • March 2015 The New York County Lawyer

Two United Nations Conferences to Advance Women’s Rights and Empowerment

ernmental body exclusively dedicated to • Women and the Media; contraception. There have been increases By Barbara T. Rochman, Esq. the promotion of gender equality and the • Women and the Environment; in the numbers of women in decision-mak- empowerment of women. The principal • The Girl Child ing, although progress is uneven. There Over 700 women gathered from Novem- theme of CSW 59 is review of the Beijing are some strong institutional mechanisms ber 3rd to 5th, 2014, at the Palais des Declaration and Platform for Action (Bei- According to the UN ECE, “Since 1995, for the advancement of women at national Nations in Geneva, Switzerland, for the jing+20). The regional forums were orga- progress has been stagnant, uneven and and international levels, the report stated, Geneva NGO Forum, Beijing + 20, United nized to, “contribute to the Beijing + 20 there has been a reversal of gains in some citing the establishment of the United Nations (UN) Economic Commission for review process...by providing vital perspec- areas. Measures dealing with the finan- Nations Entity for Gender Equality and the Europe (ECE) Regional Review. They came tives, information and recommendations cial crisis have been gender [insensitive].” Empowerment of Women (UN-Women). to discuss, debate, and develop recommen- from a large base of NGOs and women’s Women face a plethora of threats to the “However, these remain largely under- dations to update and further implement rights advocates....” Beijing commitments, including pervasive funded and poorly resourced, particularly the Beijing Declaration and Platform of One over-arching concern among par- violence against women and girls and vio- in countries that have reduced their annual Action for Equality, Development and Peace, ticipants in Geneva was the lack of imple- lations of and threats to girls and women’s revenues through tax cuts and other fiscal adopted at the 4th World Conference on mentation of, and the need to hold govern- sexual and reproductive health and rights. measures.” Women in Beijing, China in 1995. This ments accountable for, their commitments Women in vulnerable situations, including Mechanisms to hold countries account- groundbreaking document committed UN and obligations to women’s human rights indigenous women and women with dis- able are limited because the UN has no Member States to a comprehensive agenda and gender equality under the Beijing Dec- abilities, experience disproportionate rights ability to require countries to implement for advancing women’s rights and empow- laration and Plan of Action. violations, and girls and older women lack UN resolutions, agreed conclusions, con- erment. Since 1995, UN reviews have been con- social protections. ventions or protocols, even where Member Marilyn J. Flood and Barbara T. Roch- ducted every five years to monitor progress However, gains have been made. The States may have signed such documents. man, two of NYCLA’s representatives at the in the 12 critical areas of concern: ECE includes some of the most advanced These documents generally “urge” Member UN, attended the Geneva Forum. NYCLA and progressive European countries on States to take action, but cannot tell them to is a registered Non-Governmental Organi- • Women and Poverty; women’s rights, and also, Canada, the do so. It is up to stakeholders in each coun- zation (NGO) at the UN. Geneva was one • Education and Training; United States, and the United Kingdom. try to press for implementation and action. of five preliminary regional conferences • Women and Health; But it contains less developed countries, Obviously, civil society has greater success held worldwide in preparation for the 59th • Violence against Women; especially in Eastern Europe and some in calling for action in some nations, while session of the United Nations Commission • Women and Armed Conflict; former Soviet Republics in Asia. Turkey in some countries citizen involvement is on the Status of Women (CSW 59), which • Women and the Economy; is also within the region. The draft report limited, if not dangerous. is taking place this month at the United • Women in Power and Decision- of the Geneva Forum cited “tremendous” Participants at CSW 59 will include rep- Nations Headquarters in New York City. making; progress in education in many countries in resentatives of Member States, UN enti- The UN Commission on the Status of • Institutional Mechanisms for the the region. Fewer women die in pregnancy ties, and accredited NGOs from all regions Women is the principal global intergov- Advancement of Women; and childbirth from preventable causes of the world. UN Women facilitates the • Human Rights of Women; and more women have access to modern { See UN Conferences on page 10 }

On-Demand, On-line Courses Available on www.nycla.org

New Titles! • 15 Cases from the Past Year Every Real Estate Lawyer Should Know • 7th Annual Art Litigation and Dispute Resolution Institute • Basic Estate Planning in New Jersey • Cross Examination Of The Negative Medical Defense Expert Witness • Ethics, Civility And The Newly Admitted Attorney • The Experts' Guide to Appellate Practice: The Basics and Beyond • FINRA Enforecement 2014 - Managing FINRA Investigations And Enforcement Proceedings Also be sure to check • Hot Issues in Landlord Tenant Practice in New Jersey out the MP3 Audio • How to Protect Your Law License Programs and Bundles • Privacy and the Law: What You Need to Know to Avoid Trouble available at • Real Estate Closing Practice in New Jersey • Real Estate Closings from A to Z CLE On The Go www.NYCLA.org The New York County Lawyer February 2015 • 7 Recent Events

Judge Fisher Receives Black Nearly 500 Connections Made at History Month Award Speed Networking Program

NYCLA and the Metropolitan Black Bar Association presented the Ida B. Wells-Barnett Justice Award in honor of Black History Month to Hon. Fern A. Fisher (center), Deputy Chief Administrative Judge, New York City Courts, Director, New York State Courts Access to Justice Program, on February 3. Pictured alongside Judge Fisher are NYCLA President Lew Tesser (left) and Hon.Pam Jackman Brown (right), Justice of the On January 29, NYCLA’s Young Lawyers’ Section held a Speed Networking program Queens County Supreme Court and Chair of the Ida B. Wells-Barnett during which nearly 500 connections were made by attendees who were matched up Justice Award Committee. with other professionals.

NYCLA’s Young Lawyers Section Sponsors So You Want to Be a Judge

The Young Lawyers’ Section held a Continuing Legal Education course, “So You Want to Be a Judge” on January 14. The program was moderated by Adam Roth, Wingate, Russotti, Shapiro & Halperin, LLP, and featured panelists Darren Marks, President, Lexington Democratic Club; Hon. Arlene Bluth, NYC Civil Court; Jeanine Johnson, Chief of Staff and General Counsel, Assemblyman Keith L.T. Wright; Hon. Peter Moulton, Supervising Judge, Civil Court of the City of NY; and Hon. James d’Auguste, NYC Civil Court.

Former SDNY US Attorney Touro Law Students Discusses Memoir Learn About NYCLA

On January 14 NYCLA’s Federal Courts and Law and Literature Committees Several Members spread the word about NYCLA to law students at a Bar held a reading and discussion with former US Attorney, SDNY and now Association Fair at Touro Law School on February 24 including (left to right) prominent trial attorney Robert B. Fiske, about his new memoir, Prosecutor Touro Correspondent Dorothy Kong, Philip Sanchez, Darren Marks, and Karen Defender Counselor: The Memoirs of Robert B. Fiske, Jr. Lumpkin. 8 • March 2015 The New York County Lawyer In The News

A roundup of recent national and local news stories featuring NYCLA and its members

NY Bar Groups Show Support for New Rule Requiring Specificity in Discovery Objections Lynch as Attorney General Litigation Insider New York Law Journal January 27, 2015 January 27, 2015 http://www.litinsider.com/PubArticleCLI. http://www.newyorklawjournal.com/id=1202716131235/NY- jsp?id=1202716189484&New_Rule_Requiring_Specificity_in_ Bar-Groups-Show-Support-for-Lynch-as-Attorney-General?mc Discovery_Objections&slreturn=20150030140657 ode=1202716131235&slreturn=20150029094241

Ethics Hotline Committee

The Committee on Professional Ethics accepts both written and telephone inquiries on ethics matters and provides Reports advisory opinions. For additional information, call the members listed below. NYCLA frequently reports, comments on, and supports issues affecting the New York legal com- March 16-31 April 16-31 May 16-31 June 16-30 munity: Richard Maltz Alison Jacobs Robert Malionek Don Savatta 212-705-4804 352-215-5400 212-906-1816 212-983-6000 · NYCLA Report on the New York Uniform Bar Exam Proposal April 1-15 May 1-15 June 1-15 · Report by NYCLA’s Criminal Justice Jim Kobak Mark Bower Sarah Diane McShea Section on Raising the Age of Juvenile 212-837-6757 212-240-0700 212-679-9090 Jurisdiction • Federal Courts Committee Comments Please Note: Assignments are subject to change. on Proposed Amendments to the Federal Questions to the hotline are limited to an inquiring attorney’s own conduct under New York’s Rules of Professional Conduct. Rules of Civil Procedure Also, the hotline does not answer questions that are being litigated in a pending legal proceeding or before a grievance committee, • Federal Courts Committee Comments or questions of law. Calls to the hotline are confidential but not privileged. For a full discussion of Ethics Hotline guidelines, please on Proposed Amendments to the Federal see the article “Guidelines on NYCLA’s Ethics Hotline,” published in the September 2006 issue of New York County Lawyer. Rules of Appellate Procedure

Taxpayer Bill of Rights and Importance of Paying Taxes

IRS, headed by National Taxpayer Advocate core taxpayer rights will better enable “tax- to determine an individual’s tax liability. By Carmela Walrond, Esq. Nina E. Olson. In fact, in her 2013 Fiscal Year payers [to] better understand their rights in Every year the IRS evaluates whether an Report to Congress, Olson listed the adop- dealing with the tax system.” The IRS Com- individual owes taxes or is owed a refund, In June 2014, the Internal Revenue Service tion of a Taxpayer Bill of Rights as her top missioner, John A Koskinen, acknowledged with the IRS providing a refund for any (IRS) adopted the Taxpayer Bill of Rights objective for the IRS. She articulated in her that the Taxpayer Bill of Rights would pro- excess taxes paid. (TABOR), with the intention that it serve as report that “[a] thematic, principle-based vide taxpayers with “fundamental informa- An in-depth analysis of the Taxpayer a “cornerstone document” to better inform list of core taxpayer rights would serve as tion” concerning their rights, better sum- Bill of Rights will be discussed at NYCLA’s taxpayers of their rights. In constructing an organizing principle for tax administra- marizing these “important protections in a upcoming CLE on March 26. Learn more TABOR the IRS extracted the critical rights tors in establishing agency goals and per- clearer, more understandable format than and register at nycla.org. pre-existing in the present tax-code, group- formance measures, provide foundational ever before.” ing them into 10 primary taxpayer rights. principles to guide IRS employees in their The importance of paying taxes cannot Carmela Walrond, Esq., a In accepting and promulgating these rights, dealings with taxpayers, and provide infor- be understated. Without taxes we would member of NYCLA and its as part of the IRS publications, notice was mation to taxpayers to assist them in their not enjoy many of the public benefits that Taxation Committee, is an sent, this past year, to millions of taxpayers dealings with the IRS.” we currently take for granted, such as public Associate at Spar Bernstein to better advise them of their rights with Since 2007, Olson has been promoting schools, public parks, streets, and highways Lewis, LLP. respect to issues relating to audits, defi- the idea of establishing TABOR. Olson to name just a few of the benefits we cur- ciency notices, and collections, with these noted that while multiple pieces of legisla- rently enjoy. Of particular importance is rights being publicly displayed in every IRS tion with the purported title of a ‘Taxpayer that without public funds the government 1 http://www.taxpayeradvocate.irs.gov/user facility. Bill of Rights’ has passed, her office’s tax- and military would not be able to operate. files/file/2013-Annual-Report-to-Con- The push to have the IRS issue TABOR payer surveys “found that most taxpayers We have all seen the dysfunction that comes gress-Executive-Summary.pdf (at 20) to clearly define a taxpayer’s rights was do not believe they have rights before the with a government shutdown. Thus, it is spearheaded by the Office of the Taxpayer IRS and even fewer can name their rights.” essential for every individual to file a tax Advocate, an independent office within the Olson further remarked that the listing of return to empower the IRS with the ability Part 2: Don’t Let Your Body Language Betray You

1. Keep your hands open and available for natural gestures; not inside your pockets By Maria Guida or behind your back. 2. When you are standing, a waist-level position for the hands (with palms relaxed In my last article, I described compelling research about the importance of non-verbal and fingers slightly curved) is often effective. When gesturing, use both hands communication and its power to enhance or jeopardize your persuasive power as an attor- whenever possible. ney. Here are additional, specific points to bear in mind about your physical demeanor 3. Put pens and pointers down when you are not using them. when you speak, both in and outside of the courtroom. Savvy attorneys consider non-verbal communication the same way that actors do: by Your face-to-face listeners are observing five basic non-verbal communication path- routinely (1) asking themselves, “how might my physical behavior impact my listeners?” ways: eye contact, facial expression, gestures/posture, and the physical distance you estab- and (2) making necessary adjustments in behavior. lish between yourself and your listeners. Messages communicated through body language Be mindful of any physical behaviors you exhibit that may be sending unintended mes- vary according to culture. Here are four additional aspects of body language to remember sages. This self-monitoring will dramatically enhance your ability to elicit the kind of about general perception among people raised in the United States: responses from your listeners that you desire, both in and outside of the courtroom. 1. Pointing with a finger (and especially with an object, such as a pen) often sends a message of aggressiveness/hostility. Maria Guida is a speaking strategist, executive coach, and Broadway actor. 2. A subtext of disagreement is sent when your arms are crossed over your chest. Having worked with Paul Newman, James Earl Jones, and Kevin Kline, 3. When you are listening, leaning back in your chair with fingers joined behind your she helps savvy attorneys enhance their credibility and generate business by back communicates confidence, relaxation, and pleasure in what the speaker is saying. speaking with poise, passion, and persuasive power. Her delighted clients include Shearman & Sterling, Allen & Overy, and Paul Weiss. Contact her Here are some suggestions for a wide range of speaking situations: at 718-884-2282 or at [email protected]. The New York County Lawyer December 2014 • 9 Library Notes

Residential Landlord Tenant Law (also on the LexisNexis Law Digest Archive. The be found in the LexisNexis Law Directory Westlaw), and the newsletters Apartment searchable secondary source materials are: database in the NYCLA Lexis subscrip- Law Insider and Landlord & Tenant. The tion. In addition to having firm and library’s holdings also include the entire • Bender’s Forms for the Consolidated individual attorney listings this database run of the New York Law Journal (in micro- Laws also includes the LexisNexis Law Digest form and print). And finally, Finkelstein’s • Bender’s Forms for Civil Practice Archive (through 2010). The Law Digest Landlord and Tenant Practice in New York [including CPLR, RPAPL, DRL, provides an overview to the law of the 50 and Rasch’s treatises Landlord and Tenant GML and EPTL/SCPA coverage] states and many foreign countries, while and New York Rent Control are part of our • Bender’s Forms of Pleading in the also including citations to the primary Westlaw subscription. These resources State of New Yor source materials through 2010. comprise a strong collection that should • Weinstein, Korn and Miller’s New Use the NYCLA library’s fee based ser- be of interest to any attorney practicing York Civil Practice [all fifteen vol- vices from anywhere. When you need By Dan Jordan Landlord Tenant law. umes] assistance, send an email to reference@ As the NYCLA Library collection has • Weinstein, Korn and Miller’s CPLR nycla.org. Having trouble finding a case, The NYCLA Library has substantially migrated from print to digital, nearly all Manual [a four volume set] a statute, a Record and Brief, an NYCRR moved from being a book based library the titles discontinued in print are avail- • New York Appellate Practice provision? Need some research in an unfa- to being digital library through our access able online through Westlaw, Lexis, and miliar area of law? Contact the NYCLA to Westlaw, Lexis, and a number of other other sources. Relevant portions of nearly all other Library for guidance and assistance at ref- databases. That said, the NYCLA Library While WestlawNext is the primary digi- Matthew Bender/Lexis treatises can be [email protected]. still keeps many sets in print form. The tal resource in the NYCLA Library, there accessed through the Lexis “Get a Docu- sets in print include McKinney’s New York is also a not-to-be-overlooked Lexis sub- ment” feature. Ask the library staff for To make suggestions about book, Consolidated Laws, the New York Code scription, available on one computer in assistance on best use of the “Get a Docu- ebook, or database purchases for Rules and Regulations, the New York City the North Reading Room. The Lexis sub- ment” feature for your project. the NYCLA Library, please contact Charter and Administrative Code, and the scription includes national primary source Martindale Hubbell, now owned by Dan Jordan, Director of Library Rules of the City of New York. materials, a short list of secondary source Internet Brands Inc., is no longer part of Service, at [email protected] or at In addition, the Library keeps in print materials geared to New York practice, Lexis. The same information formerly 212-267-6646, x201. The Housing Court Reporter, Scherer’s the LexisNexis Legal Directory, including found in Martindale Hubbell can now

Electronic Research Center CLE Programs

March April

Westlaw: Advanced Research on U.S. Bankruptcy Court Electronic Case Westlaw: Introduction to Westlaw Next Westlaw: Public Records Research on Westlaw Next Filing System Apr. 09 – 1-2 p.m. Westlaw Next March 3 – 11 am-noon March 18 – 10 a.m.-12:30 p.m. 1 MCLE Credit: 1 Skills; Transitional Apr. 21 – 2:30-3:30 p.m. 1 MCLE Credit: 1 Skills; Transitional 2.5 MCLE Credits: 2.5 Skills; Transitional 1 MCLE Credit: 1 Skills; Transitional Member: $65 Non-member: $85 Non- U.S. Bankruptcy Court Electronic Case Lexis: Basic Legal Research legal Staff: $35 Filing System Lexis: Basic Legal Research March 4 – 10:30-11:30 a.m. Apr.15 – 10:00 a.m.-12:30 .m. Apr. 22 – 10:30-11:30 a.m. 1 MCLE Credit: 1 Skills; Transitional Westlaw: Introduction to Westlaw Next 2.5 MCLE Credits: 2.5 Skills; Transitional 1 MCLE Credit: 1 Skills; Transitional March 26 – 1-2 p.m. Member: $65 Non-member: $85 Non- Lexis: Advanced Legal Research 1 MCLE Credit: 1 Skills; Transitional legal Staff: $35 Lexis: Advanced Legal Research March 4 – 12-1 p.m. Apr. 22 – 12-1 p.m. 1 MCLE Credit: 1 Skills; Transitional Westlaw: Public Records Research on Westlaw: Advanced Research on 1 MCLE Credit: 1 Skills; Transitional Westlaw Next Westlaw Next Lexis: Expert Witness Research March 26 – 2:30-3:30 p.m. Apr. 21 – 1-2 p.m. Lexis: The Ethical Challenge Presented by March 4 – 1:30-2:30 p.m. 1 MCLE Credit: 1 Skills; Transitional 1 MCLE Credit: 1 Skills; Transitional Social Media Metadata. 1 MCLE Credit: 1 Skills; Transitional Apr.22 – 1:30-2:30 p.m. 1 MCLE Credit: 1 Skills; Transitional

Unless otherwise noted, courses are free and open to the public. Register at nycla.org Questions? Contact Irina Chopinova at [email protected] or 212-267-6646 Ext. 203.

Upcoming Events

April

Law Day Luncheon Friday, April 17 – Reception-11:30 a.m., Lunch-12:30 p.m. Cipriani Wall Street, 55 Wall Street NYCLA’s Supreme Court Committee, chaired by Pamela L. Gallagher, Esq. and Brian Graifman, Esq., will host the annual Law Day Luncheon on Friday, April 17, 2015. The Capozzoli Gavel Award will be presented to Hon. Sheila Abdus-Salaam, Associate Judge, New York Court of Appeals.

Portrait Unveiling of a Former President, Michael Miller Thursday, April 30 - 5:30 p.m. Join us as we unveil a portrait of Michael Miller, President of NYCLA from 2002-2004. Reception to follow ceremony.

All events, unless otherwise noted, will be held at NYCLA Home of Law, 14 Vesey Street. Visit the Association’s website, nycla.org for more details, schedule changes and additions, and to R.S.V.P. for events, which are subject to change. Cartoon by NYCLA Member Shaina Rubin, Esq. 10 • March 2015 The New York County Lawyer

purchasing securities are non-accredited 13 Id. SEC ON investors. This means that the issuer must FOOD LAWS 14  This was generally argued in Pom Won- review financial documentation such as Continued from page 1 derful. IMMIGRATION tax returns or comparable statements, 15 See Robert C. Lehrman, The Tito’s Continued from page 2 confirming that the potential investor is 134 S. Ct. 2228. Lawsuit: When Approval is Not Approval, 6 Id. or indirectly on transactions in securities; an accredited investor. If the issuer does BevLog, Sept. 20, 2014, available at 7  (ii) is not an associated person of a broker not engage in general soliciting or adver- Id. See also Ben Wolford, Minute Maid http://www.bevlaw.com/bevlog/vodka/ or dealer; and, (iii) is not subject to a statu- tising, assuming that other conditions are Pomegranate Juice Is Actually 99.4% the-titos-lawsuit-when-approval- tory disqualification, as defined in Section fulfilled, the issuer is permitted to sell to Apple And Grape Juices; Supreme Court is-not-approval; Lorraine Bailey, Al 3(a)(39) of the Exchange Act.10 However, non-accredited investors. However, even if Rules Competitor Can Sue, Medical Daily, Capone Liked It, But…, Courthouse the SEC makes the final determination of the issuer itself does not engage in general June 13, 2014, available at http://www. News Service, Sept. 11, 2014, avail- whether the activities of an associated per- soliciting or advertising, it is not automati- medicaldaily.com/minute-maid-pome- able at http://www.courthousenews. son rises to the level of broker-dealer and cally exempt from Rule 502(b) regulations. granate-juice-actually-994-apple-and- com/2014/09/11/71274.htm. requires registration on a case by case basis. General soliciting or marketing activi- grape-juices-supreme-court-rules-com- 16 See, e.g., Michael Lipkin, Anheuser- ties undertaken by any third party, whether petitor-can. Busch Suit Buoyed By Pom Ruling, 6th 8 Id. Impact on Potential EB-5 Investors domestic or abroad, on behalf of issuers, Circ. Told, Law 360, Dec. 17, 2014, 9 What do these regulatory guidelines are considered in tandem with actions Id. available at http://www.law360.com/ 10 mean to prospective EB-5 investors? At the undertaken by the issuer itself. As per SEC Id. articles/605836/anheuser-busch-suit- 11 outset, it appears that these guidelines pri- guidelines, a third party is considered to Id. buoyed-by-pom-ruling-6th-circ-told. 12 marily concern regional centers. However, be acting on behalf of an issuer when the Id. 17 21 U.S.C. § 343. it is imperative that prospective investors, third party accepts compensation from broker-dealers and immigration attorneys the issuer based on the third party’s role fully understand these guidelines as well. in securing the sale of securities. This When the primary objective of the means that, for example, if an immigra- investor is to turn a profit, investors tion attorney accepts fees other than those the statutorily required 2-year period are ultimately impact his or her prospects for must understand that USCIS approval for the filing of an EB-5 application from satisfied. In addition to the already lengthy obtaining such status or at the very least for a regional center does not mean that the EB-5 applicant, he or she would be registration process, the pathway to legal result in a lengthy delay. a governmental agency has approved the considered to be working on behalf of permanent resident status would become business plan or financial soundness of the issuer. As such, if such immigration exorbitantly long. As such, it is imperative Conclusion such a regional center. Thus, it is crucial attorney engaged in general soliciting or that prospective EB-5 investors be aware In sum, transactions made in violation of that investors understand the nature of marketing, it would be in violation of Rule of the regulations concerning unregistered the Exchange Act will be voidable and the regional centers, the obligation of regional 506(b) and the only exemption available securities and perform due diligence to Regulation D exemptions will no longer centers to disclose certain information and would be under Rule 506(c). In the event ascertain that the regional center they hope be available. This could mean invalidation to evaluate the soundness of the selected of a violation of Rule 506(b), issuers can to invest in is not in violation of the appli- of the legal permanent residence status of regional center’s financial strategy. no longer sell unregistered securities to cable regulations. the investor because from the moment the As is usually the case though, the primary non-accredited investors. transaction can be voidable, the investment objective of a prospective EB-5 investor is Prospective EB-5 investors should be Broker-Dealer Regulatory Violations will no longer be considered “at risk” under not to turn a profit but instead to acquire concerned with the manner in which an As with regulations concerning the sale EB-5 regulation. permanent resident status. In such a case, issuer, or any third party working on behalf of unregistered securities, it is important To ensure that the process remains effi- it is perhaps even more important that an of an issuer, solicits investors because the that prospective investors familiarize cient and effective all parties involved must investor understand how the SEC guide- consequences of a Rule 506(b) violation themselves with the regulations concern- understand the applicable regulations as lines affect their applications. A violation are invariably costly. Since the primary ing broker-dealers, particularly with well as the consequences of violating them, of either of the two main categories of objective of the investor is obtaining regards to the point at which a third-party and take the necessary steps to avoid such regulatory guidelines mentioned above— legal permanent residency, time is of the becomes classified as a broker-dealer. As violations. unregistered securities and broker-dealer essence. In this regard, the main advantage previously noted, any third party that registration—can potentially deny an unregistered securities have over regis- accepts compensation, “finder’s fees” or Janire Lamiquiz, Esq. is EB-5 application, or at the very least result tered securities, namely circumvention of any form of transaction-based compen- an Associate at C.T. Lee & in a substantial delay. lengthy and costly registration processes, sation will almost certainly be deemed a Associates. Ms. Lamiquiz would be lost. This is exacerbated by the broker-dealer by the SEC. For issuers and transactional practice Unregistered Securities Regulatory fact that registration for a non-public third parties, entering into an unregistered within the firm focuses Violations company such as a regional center is tanta- broker-dealer relationship may carry civil primarily in business Unregistered securities violations can mount to the initial public offering of the or criminal liability. For prospective inves- immigration law. arise from numerous circumstances, the company, entailing an even lengthier pro- tors, having the issuer and a third party Corey T. Lee, Esq. is the most common of which is a violation of cess of disclosure. The considerable length enter into an unregistered broker-dealer founder and managing the general soliciting or advertising guide- of time required by the registration process relationship may result in invalidation of partner of C.T. Lee & lines. As noted, when an issuer uses general is a luxury that the EB-5 investor does not any prior investments. Again, assuming Associates. He has experience soliciting or advertising to market offers of have. The investor is not afforded the pro- that obtaining a legal permanent residence in the firm’s main practice securities, such issuer must take reasonable tection of legal permanent residency status status is the primary motivation for such areas of immigration law, steps to ensure that none of the investors until after both investing and waiting for an investor, a broker-dealer violation may business law and litigation.

and UN entities, as well as parallel events tatives, rushing from one event to another, U.N. organized by NGOs and held outside of and with meeting rooms often filled to Barbara T. Rochman,Esq. UN premises. Opportunities for written overflowing. CSW 59 will be filled with con- is a NYCLA UN CONFERENCES or oral presentations are very limited and troversy as well. In recent years the women’s Representative and sits on Continued from page 6 must be requested in advance. NGO rep- rights agenda has become increasingly polit- the Justice Center Advisory participation of NGOs in sessions of the resentatives can also be called upon during icized at the UN. Issues of controversy will Board. She is a past chair CSW. There is limited space for represen- brief question and answer periods at most likely include prevention of violence against of NYCLA’s Women’s tatives of NGOs such as NYCLA to attend side and parallel events. women, reproductive rights, and economic Rights Committee. She has been a leader of official meetings. They can freely attend CSW 59 will be a jam-packed two weeks, and educational equality—all critical to the women’s rights organizations and coalitions side events organized by Member States with attendees, including NYCLA represen- empowerment of women. for the past 35 years.