Results matching “levine”


By Ronald J. Levine

Ronald J. Levine is General Counsel of Herrick, Feinstein LLP and an arbitration neutral. He can be reached at; (212) 592-1424

With the Coronavirus pandemic, the entire world is suffering tremendous personal and economic stress and harm. Many are not only experiencing a form of grief for the impact on their lives, they are also grievants. As they sit at home, many people are contemplating taking action concerning the jobs they have lost, the services which they purchased but are not being provided, and for those who are unfortunately ill, the cause of their sickness. As with other mass injuries, the lawyers are ready and willing to step in. We are already seeing suits filed against a wide variety of defendants, from cruise lines, to gyms, to banks, to consumer product manufacturers.

While they are sitting in their remote locations, in addition to drafting complaints on their laptops, now is a good time for lawyers to brush up on their skills in utilizing alternatives to litigation, such as arbitration, and mediating settlements. Many courts have limited access, and countless lawsuits have been put on hold during the pandemic crisis. The last thing our overburdened court system needs is an influx of mass COVID-19 class actions, and legal battles in which the only winners may be the lawyers.

In order to achieve the least costly resolution of legal disputes, lawyers must encourage their clients to seek alternatives to litigation, through mediations and arbitrations (which can be done virtually on-line), rather than trying to get in the courthouse (after it has been sanitized).

In my 40 years of practice as a litigator, I have found that the reactions of litigants mirror those explored in depth by Elisabeth Kübler-Ross in her book, On Death and Dying. Ms. Kübler-Ross introduced the "Five Stages of Grief". Those stages are known by the acronym DABDA -- Denial; Anger; Bargaining; Depression; and finally, Acceptance. I have found that my clients tend to pass through the five stages as well as they journey through the litigation landscape. We know that, for better or worse, in the vast majority of cases the final stage is acceptance, or settlement.

Attorneys often have a hard time both doing battle and trying to settle at the same time. The failure to discuss an early resolution can lead to increased litigation, and unrealistic expectations. Too much time may be spent at the denial/anger and bargaining stages. Precious time and dollars will be lost before depression and acceptance set in, and a settlement is ultimately reached.

Armed with that knowledge, for years I have been advocating that counsel should be able to do a better job guiding their clients through these stages, and reaching a resolution more quickly and efficiently. Unfortunately, too many attorneys and their clients fixate on two of the early stages of the client's reaction to a lawsuit -- denial or anger. They do so almost instinctively, without evaluating the final stage -- acceptance -- at the commencement of the engagement. Studies have shown that accepting a pre-trial settlement offers may well result in a better financial outcome than proceeding to trial.

While we are being encouraged to wash our hands frequently, we need not wash our hands of drawn out litigation gamesmanship. A hard- fought litigation may be just what the doctor ordered. But, in addition to prescribing a strong prosecution or defense, it is necessary and ethically required that attorneys evaluate all alternate courses of action at the very outset of the litigation, and if appropriate, prepare the client (especially one who is a litigation novice) for the fact that settlement, like death, may be the inevitable outcome. The only question will be: Now or later? At the very least, lawyers should spend the time educating clients about alternatives to burdening the stressed court system with the client's claims.

Lawyers will be doing their clients, and the greater public, a real service if they vigorously pursue alternatives to litigations. When the storm passes, our courts will have plenty to do without having to process hundreds of thousands of lawsuits which will last far longer than the pandemic, and inflict continued pain on the litigants.

By Gerald M. Levine, Esq.

Arbitrators and Providers Immune - GL.pdf

Gerald M. Levine, Esq.
Levine Samuel, LLP
800 Second Avenue,
3rd Floor
New York, NY 10017-4709
Direct. 212.596.0851
Fax: 212.382.0320

Website and Blogs,
(Publishing, Contracts, Copyright, Trademark,
IP, Arbitration and Domain Name law)
Legal Corner Press, LLC,
Treatise trademarks, domain names, & cybersquatting
Domain Name Arbitration (Legal Corner Press 2015)
Essays republished and Arbitrator and Mediator. America Arbitration Association, FINRA,
Mediation New York Supreme Court, Commercial Division; and
the United States District Court for the Southern District of New York

Research of Facts and Law under the UDRP

See the attached article by Gerald M. Levine, Esq. of Levine Samuel, LLP:

Research of Facts and Law under the UDRP.pdf

SAVE THE DATE - October 11, 2015, Online Dispute Resolution Program

Lawline will be sponsoring a 3-member panel discussion led by Gerald M. Levine on the administrative (ODR) and statutory procedures for combatting cybersquatting. It will take place on October 11, 2015 at midday for 75 minutes (live and streamed) at New York Law School. The panelists will cover the arbitral regime implemented by the Internet Corporation for Names and Numbers (ICANN), the Uniform Domain Name Dispute Resolution Policy, and the Anticybersquatting Consumer Protection Act, both of which were rolled out in 1999. The discussion will include procedures, evidentiary demands, remedies, and jurisprudence of both regimes.

Please note that an incorrect version of this article by Neil Steinkamp, Elizabeth J. Shampnoi and Robert Levine was inadvertently posted on this blog on September 10, 2015. Kindly see below the correct version:

Dollars and Common Sense.pdf

By Gerald M. Levine, Esq.

Unlike typical arbitrations in which awards are final and binding online dispute resolution of domain names under the Uniform Domain Name Dispute Resolution Policy, the UDRP, can proceed to de novo actions in federal district courts under the Anticybersquatting Consumer Protection Act, the ACPA. The ACPA is a section of the Trademark Act of 1946, the Lanham Act. There are two possible claims under the ACPA. In both, the losing party is aggrieved by the award; either the domain name holder forfeits the domain name which is cancelled or transferred to the trademark owner; or trademark owners fail to prove domain name holders lack rights or legitimate interests in the domain names or are guilty of abusive registrations of the domain names.

There have been a number of notable UDRP awards that have moved to federal court. Unlike the UDRP in which injunction is the sole substantive remedy, under the ACPA the winning party is entitled to damages and attorneys' fees, whether it be to the trademark owner or the domain name holder. Taking the situations one at the time. There are actually three possibilities, in two of which the trademark owner becomes a defendant in ACPA actions.

Domain name holders have litigated in two situations; one is defensible and the other not. In the defensible case domain name holders lose under the UDRP and prevail under the ACPA because they have priority in registering domain names earlier than first use of any trademarks in commerce. In other words, the first to register a domain name has a right to it regardless whether it corresponds to a later acquired trademark. In the indefensible case, holders lose because their choices of domain names are identical or confusingly similar to trademarks, lack rights or legitimate interests in the domain names, and are found to have registered and are using the domain names in bad faith.

Parties have a right to vindicate their claims under the ACPA but it comes at a price. Under the ACPA the court has discretion to award damages up to $100,000 per domain name. In a recent case of the indefensible kind filed in the Federal District Court for the Eastern District of New York, for example, involving two domain names incorporating the word "Trump plus the name of real estate ventures in India" the domain name holder was on the wrong end of a damage award of $32,000. There are similar awards against misguided domain name holders in other federal cases in which their grievances were mere mirage.

But, there are also misguided trademark owners who overreach their rights, abuse the UDRP proceedings-- enabled it has to be said by Panels who misapply domain name jurisprudence--and find themselves as defendants in indefensible cases under the ACPA. Two recent examples will suffice to illustrate the problem of overreaching. The disputes were initiated with UDRP complaints and were granted even though the trademarks were not in commerce when domain names were registered. They were clearly overreaching trademark owners, but the domain name holders commenced action respectively in the Federal District Court for the District of Columbia and the District Court for the District of Colorado, with the not startling result that the trademark owners quickly entered into stipulated settlements and consent judgments for $25,000 and $50,000 respectively including permanent injunctions to get out of their bad situations.

Statutory and Provider Rules for Serving Notice for Arbitration

By Gerald M. Levine, Esq., Levine Samuel, LLP

CPLR 7503(c) provides that "notice or demand [for arbitration] shall be served in the same manner as a summons or by registered or certified mail, return receipt requested." Plaintiff in Town of Amherst v. Granite State Ins. Co., Inc., 2015 NY Slip Op 05352 (4th Dept. 6-19-2015) argued that defendant's service of a demand for arbitration was defective because it was inconsistent with the statutory requirements. The motion court agreed; the appellate division reversed.

Two interesting points in the case. First, the parties had entered into a handwritten agreement in which they "agreed to litigate" a particular issue that plaintiff believed constituted a waiver of the Policy's arbitration clause. The court held that "Once the parties to a broad arbitration clause have made a valid choice of forum . . . all questions with respect to the validity and effect of subsequent documents purporting to work a modification or termination of the substantive provisions of their original agreement are to be resolved by the arbitrator."

The second point concerns service of the demand for arbitration. The court held that New York law was inapplicable. Defendant had served the demand by Federal Express, which the court in an earlier case, Matter of New Cent. Mut. Fire Ins. Co. V. Czumaj, 9 A.D.3d 833, 834 (2004) had held was defective because it was not one of the permitted methods of service.

However, in Town of Amherst the parties had expressly agreed to be bound by the procedural rules of the American Arbitration Association, which permits such service--Rule 39 then but currently Rule 43 under the Amended Commercial Arbitration Rules.

The agreement to be bound by the rules of the arbitral provider for serving notices had the result of superseding New York Law, citing Smith v. Positive Prods., 419 F.Supp 2d 437, 446 (SDNY 2005).

Lawline will be sponsoring a 3-member panel discussion led by Gerald M. Levine on the administrative (ODR) and statutory procedures for combatting cybersquatting. It will take place on October 11, 2015 at midday for 75 minutes (live and streamed) at New York Law School. The panelists will cover the arbitral regime implemented by the Internet Corporation for Names and Numbers (ICANN), the Uniform Domain Name Dispute Resolution Policy, and the Anticybersquatting Consumer Protection Act, both of which were rolled out in 1999. The discussion will include procedures, evidentiary demands, remedies, and jurisprudence of both regimes.

Awarding Punitive Damages in Arbitral Disputes

By Gerald M. Levine

Awarding punitive damages may be available as a remedy in arbitral disputes but the question is: Who gets to decide the issue, court or arbitrator? There have been a number of cases recently in New York on this point. The "who" depends on which law applies, the Federal Arbitration Act or CPLR Article 75. In In re Flintlock Construction Services, LLC v. Weiss, 2014 NY Slip Op 05818 (1st Dept. August 14, 2014) and Cusimano, et al v. Schnurr, 2014 NY Slip Op 05702 (1st Dept. August 7, 2014) (discussed in last week's blog) the courts first have to decide which law applies before they reach the ultimate issue. Cusimano dealt with "waiver" (for the court) and "statute of limitations"(for the arbitrator).

Who decides depends to a large extent on both the factual matrix and the parties' agreement. On the issue of arbitrability, for example, the U.S. Supreme Court has held that "Courts should not assume that the parties agreed to arbitrate arbitrability unless there is 'clea[r] and unmistakabl[e]' evidence that they did so." First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). If the parties have incorporated Rule 7 of the Commercial Rules of the American Arbitration Association, for example, they will be deemed to have agreed that "[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim."

If the evidence is not clear and unmistakable, the question of arbitrability is reserved to the court--- and "presumptively" so according to the court in Werner Schneider v. Thailand, 688 F.3d 68(2d Cir. 2012). But where parties "agree to include claims ... within the issues to be arbitrated, the FAA ensures that their agreement will be enforced according to its terms even if a rule of state law would otherwise exclude such claims from arbitration," Mastrobuono v. Shearson Lehman Hutton, 514 US 52, 58 (1995). Mastrobuono dealt specifically with a New York case,Garrity v. Lyle Stuart, Inc., 40 NY2d 354, 356 (1976), that reserved the decision on punitive damages to the court. The Supreme Court rejected the reasoning of the 7th Circuit that New York law prevented the arbitrator from ruling on punitive damages.
The explanation for this reasoning lies in the concluding clause in Mastrobuono---"even if a rule of state law would otherwise exclude such claims from arbitration"---the court is obliged to look at both the applicable law and the parties' agreement for the scope of the arbitrator's jurisdiction. Moreover, if the issue arises under the FAA, federal law applies even though the arbitration clause contains a choice-of-law provision.

In re Flintlock Construction Services, LLC v. Weiss, 2014 NY Slip Op 05818 (1st Dept. August 14, 2014)clarified how these disparate elements are reconciled. As in Mastrobuono, the issue in Flintlock Construction concerned who gets to decide punitive damages. If the claim includes a request for punitive damages and the dispute involves interstate commerce, it is properly before the arbitrator. Over a vigorous dissent the court rejected application of the Garrity rule.

The parties' operating agreements in Flintlock Construction provided that they "shall be construed and enforced in accordance with the law of the State of New York." The key terms "construed" and "enforced" would appear to apply to both the substantive and procedural law of New York. As the New York Court of Appeals explained in the Matter of Diamond Waterproofing Sys., Inc. v. 55 Liberty Owners Corp., 4 NY3d 247 (2005), the choice of language is critical. Diamond Waterproofing involved the application of the statute of limitations, a question which would ordinarily be reserved to the court (CPLR 7502[b]). But because the parties' agreement did not provide that New York law shall govern the enforcement of the parties' agreement, the court held that the issue was reserved to the arbitrator under the FAA. The parties have to employ the correct lexical formula to assure the application of New York law, and, if they do, it is sufficient to override other principles.

Petitioners in Flintlock Construction (and the dissent) argued that the issue of punitive damages was for the court relying on Garrity's statement that New York law arbitrators "ha[ve] no power to award punitive damages, even if agreed upon by the parties." The argument for a court determination further urged that Mastrobuono "is not dispositive on this issue" because it dealt only with a general choice-of-law provision, i.e.,"[it] shall be governed by the laws of the State of New York," which is a different lexical formula. In Flintlock Construction, the parties included in their agreement the proper lexical formula as directed by the Court of Appeals in Diamond Waterproofing.

Given that the parties properly expressed their intention, why did they not get what they asked for? Although the dissent's argument was unpersuasive to the majority, it cannot be said to be unreasonable.
The majority in Flintlock Construction offered three reasons for denying petitioners' application to prevent the arbitrator from deciding the issue of punitive damages. First, a New York choice-of-law provision does not constitute a manifestation of unequivocal intent sufficient to invoke the Garrity rule. "Merely stating, without further elaboration that an agreement is to be construed and enforced in accordance with the law of New York" does not make it so. "The Supreme Court has made clear that in order to remove the issue of punitive damages from the arbitrators, the agreement must 'unequivocal[ly] exclu[de]' the claim" (Mastrobuono at 60).

The second reason stems from the rule against rendering an advisory opinion. Here, the arbitration panel "had denied the motion to dismiss the punitive damages claim without prejudice to renewal upon a complete record." Because it "remains to be determined whether, on this record, the contracts evidence a 'transaction involving commerce' such that the FAA, and not state law, applies," it would be premature to weigh in on the issue.

The third reason for denying petitioners' application rests on CPLR 7503(b), which authorizes motions to stay arbitration by parties "who ha[ve] not participated in the arbitration." In this case, "[p]etitioners participated in the arbitration process for nearly eight months - selecting arbitrators, participating in preliminary proceedings - before registering an objection to the arbitrability of respondent's claim for punitive damages." The objection took the form of a motion to the arbitrator to dismiss the claim, thereby
"squarely placing the issue of the arbitrability and availability of punitive damages before the arbitrators." In doing that, the court explained, petitioners "chartered their own course ... and cannot now avail themselves of the mechanisms set forth in CPLR 7503(b).

Since Flintlock Construction is a 3-2 decision the appellate court's reasoning may not be the last word on the application of the Garrity rule although petitioners may well have "chartered their own course." Having done that, the issue of punitive damages is squarely before the arbitration panel, at least until it makes a ruling, at which time (if it awards punitive damages) the issue will presumably return to the court.

Gerald M. Levine is a member of Levine Samuel, LLP. He practices in New York City and is on the list of neutrals of the American Arbitration Association. Mr. Levine runs an ADR blog on domain names and cybersquatting at He is the author of a forthcoming book to be published in March 2015 on domain name arbitration under the Uniform Domain Name Dispute Resolution Policy.


Find recent content on the main index or look in the archives to find all content.



Powered by Movable Type 5.11