Business Disputes

Our Client’s Crusade to Protect His First Amendment Rights Will Be Featured on Milwaukee News Channel Tonight

July 12, 2013 | Peter S. Lubin and James V. DiTommaso

//www.youtube.com/watch?v=dsN1s-OvdKs

Our client David Bates was sued by Chicago Motor Cars for criticizing the used car dealership online. We represented him in federal court and arbitration where he prevailed. He continues to exercise his First Amendment rights to criticize the dealership and is seeking to expose what he believes are unethical business practices and to support his position with evidence and judgments from court cases against the dealership. There are a number of court judgments finding that the dealer engaged in consumer fraud as to customers other then David Bates which we uncovered in our investigation.

In the federal court case the dealer filed a false affidavit claiming that it had never even been sued for fraud even though, in truth, these fraud judgments had entered against it relating to customers other than David Bates. The federal judge hearing the case entered a rule to show cause against the dealer requiring it to demonstrate why it should not be sanctioned for filing an allegedly false affidavit. The Court indicated that it might consider entering the sanction of dismissing the case along with sanctions against the dealer.

At that point, the dealer facing the impossible task of explaining why it had filed a false affidavit. Chicago Motor Cars decided to drop the case. It settled the federal court case by releasing all of its money damages claims against David Bates and his girl friend.

We then headed to arbitration where the Arbitrator, a retired judge, ruled that Bates’s videos,which were the subject of the arbitration, did not defame Chicago Motor Cars and were essentially true with any minor inaccuracies being irrelevant. Given Chicago Motor Cars’s documented history of fraud judgments entered against it and Chicago Motor Cars’s admissions in deposition and arbitration testimony regarding those judgments for fraud, the Arbitrator ruled against Chicago Motor Cars. He held that all of Bates’s many videos, which were the subject of the arbitration hearing, could remain posted on the internet. Mr. Bates’s First Amendment right to speak his mind and voice his opinions, even using harsh language, was vindicated. Consumers have a right to know that the business they are dealing with has a history of fraud judgments and to take that information into account in making a major purchase decision for a luxury, high priced car. Chicago Motor Cars’s owners admitted when we cross examined them that Bates had a First Amendment right to publish on the internet facts about the fraud judgments entered against Chicago Motor Cars.

Fight Over Borghese Trademarks — Our Chicago Business Attorneys Represent Families in Closely Held Business Disputes

July 9, 2013 | Peter S. Lubin and James V. DiTommaso

Despite all of the patents and trademarks out there, one might assume that, at the very least, one’s own family history would be safe. However, according to Georgette Mosbacher, the owner of Borghese Inc., that is not the case.

The Borghese family is a noble Italian family, which has included royalty, rulers, philosophers, and a pope. In the 1950s, Borghese Inc. was started by Princess Marcella Borghese and Revlon and has since been developed into a well-known cosmetics brand. In 1976, Revlon bought the rights, title, and interest to the Borghese cosmetics brand. According to the court papers, this included “the words BORGHESE, MARCELLA BORGHESE”, and “PRINCESS MARCELLA BORGHESE”.

In 1992, Revlon sold Borghese Inc. to Ms. Mosbacher, who then became its chief executive. She then reached an agreement with the family regarding final payments, although those have also been disputed.

Since then, Princess Marcella’s descendants have made their own mark on the beauty industry. Her son, Francesco, started his own line of beauty products in the early 1980s under names such as Orlane, Perlier, and Elariia. Beginning in the 1990s, the family (including Francesco, his wife, Amanda, and their son, Lorenzo) started making appearances on the home shopping channel QVC and, after that, HSN.

While none of the products are sold under the Borghese name, their marketing does include the noble lineage of the Borghese family. However, Borghese Inc. argues that that heritage is no longer theirs to capitalize on.

According to Mark N. Mutterperl, the attorney representing Borghese Inc., the lawsuit “is not different than if any other brand name with a surname like Lauder, McDonald, Heinz, Gallo, Ferragamo were to take steps as they do to stop others from using their intellectual property rights”.

Mark Evens, the attorney for the Borghese family, argues that Borghese Inc. “has suffered no harm. No dilution of their mark. No counterfeiting. No palming off.”

For decades, the Borghese family coexisted peacefully with Borghese Inc. It wasn’t until 2006, when Lorenzo entered into discussions with ABC to possibly appear on “The Bachelor” that things started to get heated. It was then that ABC mentioned Lorenzo’s grandmother as the woman who “started the famed self-named cosmetics line, Borghese Inc.” Although there is nothing factually incorrect about this assertion, Ms. Mosbacher nevertheless appeared to feel that her toes were being stepped on. She wrote to Mr. Borghese to warn him not to “cause any false impression in the marketplace that there is a connection or relationship between yourself and Borghese Inc. and our cosmetics products.”

In 2008, Lorenzo applied for a federal trademark for a line of pet shampoos and conditioners called “La Dolce Vita by Prince Lorenzo Borghese” for PetSmart. Borghese Inc. contested the trademark and, as the trademark approached approval in 2010, Borghese Inc. filed a lawsuit against the family.

Federal Judge Will Decide if NCAA Players Through a Class-Action Lawsuit Will Receive a Share of Video Game Revenues

July 6, 2013 | Peter S. Lubin and James V. DiTommaso

The world of professional athletes has long been extremely financially rewarding. In recent years, college athletics have approached professional levels where revenue is concerned. The biggest difference is whether or not the players get a cut of the action. Beginning in 2008, the National Collegiate Athletic Association (NCAA) has faced increasing criticism from people who claim that college athletes are being exploited while colleges and the NCAA are making millions off the performance of these players.

The exploitations might not be permitted to last much longer. Ed O’Bannon, a former basketball star for UCLA, watched a friend’s son start up a video game in 2008 and was surprised to see himself appear on the screen. While his name never appeared, the player in the game undoubtedly resembled O’Bannon, down to his physique, his player number, and his right-handedness. O’Bannon was initially flattered until he realized that the gaming company was making money off of his likeness while he, O’Bannon, received nothing. The video game was published by E.A. Sports, a brand of Electronic Arts.

Beginning in 2009, O’Bannon filed a lawsuit seeking licensing of broadcast and video game rights for student athletes. Shortly after O’Bannon filed his lawsuit, the NCAA released a statement that its agreement with E.A. Sports prohibits the use of the names and pictures of athletes. However, in July 2003, six years before the lawsuit was ever filed, Peter Davis, an NCAA official, noted that Electronic Arts did include a feature in their latest football game, which allowed users to download rosters of players’ real names. Electronic Arts responded that the game did not use real names, although it did use “all the attributes and jersey numbers of the players.”

In an email, Davis asked if that was “too close to reality”. He was then warned by another NCAA executive, Melissa Caito, to be “cautious as you move through this – any more ‘watering down’ of the video games will likely move the manufacturers to cease operations with us”. Such a statement reflects the NCAA’s awareness that the video game avatars were pushing the limits of the law. It also demonstrates their determination to make as much money as possible off of the student athletes, while simultaneously making sure that they do not receive any of that money.

Other emails provide further evidence of high-level executives who see absolutely nothing wrong with the way they treat their athletes. David Berst, a senior NCAA executive, wrote to the head of the organization in August 2008 that, regarding “the student athlete, I think the focus of the exploitation may be misplaced, and maybe it is not our duty to protect the student athlete.”
Christine Plonsky from Texas, part of the presidential task force on commercialism, was equally dismissive. She wrote, “We have things we have to do a certain way to raise funds and pay for the scholarships and other things that [student athletes] and their parents expect. I view these cases as being the result of the entitlement attitude we’ve created in our revenue sports.”
Now O’Bannon’s lawsuit is moving to a critical stage.

A federal judge in Oakland, California will hear arguments concerning whether the case can proceed as a class action. If class-action status is granted, it would give the plaintiffs the opportunity to represent thousands of current and former student athletes.

Chicago Class Action and Consumer Fraud Attorneys DiTommaso Lubin Bring Alleged Counterfeit Rare Wine Lawsuit Against Famed Chicago Chef Charlie Trotter

June 21, 2013 | Peter S. Lubin and James V. DiTommaso

The Chicago class action attorneys and consumer fraud lawyers at DiTommaso Lubin filed a lawsuit alleging consumer fraud on behalf of our clients against famed Chicago Chef Charlie Trotter claiming that he sold what the specially retained expert concludes is a counterfeit bottle of rare wine. Trotter denies our client’s claims and asserts that they simply have “buyer’s remorse” according to a report in the Chicago Tribune. Our clients, a small family of wine enthusiasts, very much wanted to add the rare wine to their collection. They believed it was a magnum-size bottle of 1945 Domaine de la Romanée-Conti. They sought to have it insured but their carrier required them to get it authenticated. The expert concluded in the report attached to the lawsuit that the bottle was not authentic. After trying to get their money back, the client believed that they had no choice but to file suit so that they could get their over $46,000 investment back. They retained our Chicago fraud attorneys and we filed suit alleging consumer fraud and magnuson moss warranty claims on their behalf. We based the suit on the expert report that the wine was unmerchantable and that Charlie Trotter should have known based on his claimed expertise that it was not authentic. Charlie Trotter denies the claims according to the Chicago Tribune report and has not yet responded to the suit formally so it will now be a matter of proving the case in court before a jury which will decide the merit of the claims. The Complaint only states our clients’ claims which they need to prove.

The Complaint filed by our Chicago class action lawyers and Chicago consumer fraud attorneys alleges the following:

13. … A Charlie Trotter’s employee negotiated the price – $46,227.40 – with Benn and Ilir. Based on Defendants’ representation of the rarity and value of the DRC magnum, Benn and Ilir agreed to purchase it. Ben and Ilir paid Charlie Trotter’s $40,000 in cash and $6,227.40 by credit card for the DRC magnum.

14. On June 17, 2012, Defendants shipped the DRC magnum to Benn’ New York residence.

15. Upon receiving the DRC magnum, Benn contacted his insurance carrier. He notified the carrier that he wanted to list the DRC magnum on his homeowners insurance. Benn’s carrier informed Benn that 1945 bottles of Domaine de la Romanee-Conti are often counterfeited and that Benn would need to authenticate the DRC magnum through an expert before it would provide coverage.

16. On or about September, 2012, Benn retained Maureen Downey, DWS, CWE, FWS of Chai Consulting to authenticate the DRC magnum. Ms. Downey determined that the DRC magnum was counterfeit and valueless based on the physical attributes of the DRC magnum, the provenance provided by Charlie Trotter’s, and her discussions with experts on Domaine de la Romanee-Conti wines. See Exhibit 1. Ms. Downey visited the estate of Domaine de la Romanee-Conti after preparing her report. She spoke with Jean-Charles Cuvelier, the estate director of Domaine de la Romanee-Conti, regarding the production of large format bottles. The information Ms. Downey received from Jean-Charles Cuvelier confirmed the accuracy of her report.

The Complaint’s claims have been denied by Charlie Trotter according to the Chicago Tribune report and Defendants have denied the allegations.

Below is a video about famed Chef Charlie Trotter:

NPR Story — What’s At Stake With New Supreme Court Decisions

June 8, 2013 | Peter S. Lubin and James V. DiTommaso

Claim for Fraud in the Sale of a Business Requires Proof of Both Reasonable and Justifiable Reliance on a Misrepresentation – Walid v. Irene Couture

May 17, 2013 | Peter S. Lubin and James V. DiTommaso

A couple who bought a retail business in New Jersey filed suit for fraud, alleging that the seller materially misrepresented the business’ revenues. After a bench trial, the lower court ruled for the defendants in Walid v. Yolanda for Irene Couture, Inc., holding that the plaintiffs did not demonstrate by clear and convincing evidence that their reliance on the defendants’ misrepresentations was justified. The New Jersey Superior Court, Appellate Division vacated the judgment, finding the defendants liable for fraud, remanding the case, and instructing the trial court to apportion liability among the defendants.

Anwar and Donna Walid, saw an online listing for the sale of a retail business, Irene’s Bridal Shop. They contacted the listing broker, who gave them a “fact sheet” from the owner, Yolanda for Irene Couture, Inc. (YIC). The fact sheet stated that the business had annual sales exceeding $500,000 and profits of almost $300,000. The listed sales price was $700,000. The Walids agreed to a purchase price of $700,000, subject to “proof of sales” and review by an attorney and an accountant. They retained an attorney, but Mr. Walid decided, against the attorney’s advice, to examine the financial reports himself rather than hire an accountant. YIC’s financial information showed annual income from 2003 through early 2006 well in excess of $500,000. The Walids obtained bank financing, and the sale closed in May 2006.

The business failed, and the Walids filed suit against YIC, its owner, and the accountant who prepared the financial reports Mr. Walid had reviewed prior to the sale. They amended the complaint to include Yolanda Couture, Inc. (YC), a New York company owned by YIC’s owner. They alleged that YC’s revenues were deposited into YIC’s bank accounts in order to inflate YIC’s earnings.

Literary Agent Sued for Allegedly Stealing Rights for “To Kill a Mocking Bird” From Harper Lee

May 17, 2013 | Peter S. Lubin and James V. DiTommaso

Many people will try to take advantage of the sick and elderly by having them sign away their rights when they are vulnerable. However, when someone in a compromised position signs a legal document, a court of law may choose not to find that document to be binding.

Such is allegedly the case with Harper Lee, the author of “To Kill a Mockingbird”, in signing her copyright over to her agent. Eugene Winick represented Lee for more than 40 years. When Winick fell ill in 2002, his son-in-law, Samuel Pinkus, took over many of Winick’s clients. Lee has recently filed a lawsuit in Manhattan to regain control of her copyright.

According to the lawsuit, in 2007, Pinkus “engaged in a scheme to dupe” the then 80-year-old Lee into signing over her copyright for “To Kill a Mockingbird” without payment. At the time, Lee was recovering from a stroke in an assisted-living facility. The complaint alleges that, “Pinkus knew that Harper Lee was an elderly woman with physical infirmities that made it difficult for her to read and see”. Lee says she has no memory of agreeing to sign over her copyright.

The transfer allegedly secured for Pinkus “irrevocable” interest in the income derived from her book. It also helped him to avoid paying legal obligations to his father-in-law’s company for royalties that Pinkus misappropriated.

Although the copyright was reassigned to Lee last year as a result of a separate legal action, Pinkus was allegedly still receiving royalties from the novel as of this year, the complaint alleges. The current lawsuit is asking that any commissions Pinkus has received since 2007 be returned to Lee.

The lawsuit also claims that Pinkus has failed to provide royalty statements in recent years to explain money earned by the book. Additionally, Pinkus allegedly failed to respond to offers by HarperCollins to discuss licensing e-book rights and did not respond to the publisher’s request for assistance related to the book’s 50th anniversary.

“To Kill a Mockingbird” was published in 1960 and is Lee’s only published book. It is considered a classic and has sold more than 30 million copies.

Prenda Lawyers Sanctioned for Alleged Shake Down Scheme Against Alleged Porn Down Loaders

May 13, 2013 | Peter S. Lubin and James V. DiTommaso

While copyright attorneys are very useful in protecting the rights of citizens, there are those who allegedly use illegal means to take advantage of copyright laws, as well as the high cost of litigation.

Three attorneys, Paul Hansmeier, John Steele, and Paul Duffy allegedly set up a copyright-trolling operation which came to be known as Prenda Law. The attorneys at Prenda Law allegedly forged copyright documents to give themselves the right to sue those who illegally downloaded pornography. They would then search the IP address of those who illegally downloaded the porn and sue. Before going to trail however, Prenda Law would offer the defendant a settlement of about $4,000, just below what a bare-bones defense in court would cost. To avoid the expense of litigation, and the embarrassment of having their names associated with a public trial involving pornography, the defendants allegedly were, more often than not, willing to pay the settlement.

In order to pull off this alleged scheme, the attorneys would file early-discovery requests with the courts so they could settle. Once they came upon a determined defendant though, Prenda allegedly quickly backed off. U.S. District Judge Otis Wright notes that, “Without better technology, prosecuting illegal BitTorrent activity requires substantial effort in order to make a case. … It is simply not economical viable to properly prosecute the illegal download of a single copyrighted video.”

Instead of admitting to the existence of other possibilities (for example, an outsider using a home WiFi signal), Wright says that Brett Gibbs, an attorney who worked for Prenda Law who is now testifying against Prenda, deliberately downplayed them. In one case, Gibbs described the defendant’s property as “a very large estate consisting of a gate for entry and multiple separate houses/structures on the property.” A quick search using Google Street View though, showed a very different picture: a modest home in West Covina, a Los Angeles suburb. Wright says, “It is a small house in a closely packed residential neighborhood, … There are also no gates visible. Gibbs’s statement is a blatant lie.”

At the hearing, the attorneys behind Prenda took the Fifth Amendment. They refused to answer such simple questions as who owned their shell companies and where the settlement money (rumored to be in the millions) was going.

The judge ordered the three Prenda attorneys to pay sanctions to defense attorneys of $36,150 to Morgan Pietz and $1,950 to Nicholas Ranallo. Wright then doubled that amount “as a punitive measure” for a total of $81,319.72. The judge says in a footnote that the total “is calculated to be just below the cost of an effective appeal”. The Prenda attorneys have 14 days to pay the sanctions.

Wright is also suggesting that the attorneys be disbarred. He states that, “there is little doubt that Steele, Hansmeier, Duffy [and] Gibbs suffer from a form of moral turpitude unbecoming an officer of the court.” In many states, California included, crimes reaching the level of “moral turpitude” lead to automatic disbarment. Wright says that he will be referring the four lawyers to every state bar in which they are currently admitted to practice.

Additionally, the judge has suggested that the alleged Prenda scheme warrants criminal investigation. In his conclusion, Wright says, “The Court will refer this matter to the United States Attorney for the Central District of California. The [court] will also refer this matter to the Criminal Investigation Division of the Internal Revenue Service and will notify all judges before whom these attorneys have pending cases.”

Super Lawyers Names Peter Lubin 2013 Selection

April 30, 2013 | Peter S. Lubin and James V. DiTommaso

Super Lawyers named Chicago and Oak Brook business trial attorney Peter Lubin a Super Lawyer in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. DiTommaso Lubin’s Oak Brook and Chicago business trial lawyers have over thirty years experience in litigating complex class action, consumer rights and business and commercial litigation disputes. We handle libel and defamation cases, First Amendment issues and emergency business law suits involving injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud.

DiTommaso Lubin’s Wheaton, Naperville, and Aurora litigation attorneys have more than two and half decades of experience helping business clients unravel the complexities of Illinois and out-of-state business laws. Our Chicago business, commercial, class-action, and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Oak Brook, near Naperville and Glen Ellyn, we serve clients throughout Illinois and the Midwest.

If you’re facing a business or class-action lawsuit, or the possibility of one, and you’d like to discuss how the experienced Illinois business dispute attorneys at DiTommaso Lubin can help, we would like to hear from you. To set up a consultation with one of our Chicago class action attorneys and Chicago business trial lawyers, please call us toll-free at 630-333-0333 or contact us through the Internet.

Former Illinois Governor Thompson Says That Recent Lawsuit Against the White Sox is Simply a Self-Serving Tirade

April 30, 2013 | Peter S. Lubin and James V. DiTommaso

Chicago has long been known for its corrupt politicians. A former executive of the Illinois Sports Facilities Authority (ISFA) claims that the IFSA is no exception in a recent lawsuit. The Authority denies those allegations.

Perri Imer, the former executive director of the ISFA, has filed a lawsuit against former Illinois governor Jim Thompson and the White Sox owner Jerry Reinsdorf. The lawsuit alleges that the two conspired to have Imer fired two years ago to stop her reforms at the public agency from going through. The complaint alleges that Reinsdorf and Thompson, who was chairman of the ISFA at the time, “sought to silence Perri Imer and to stifle her efforts to protect Illinois taxpayers from Reinsdorf’s greed.”

According to the lawsuit, Reinsdorf allegedly pressured Thompson to remove Imer because of her success in getting the White Sox to pay $1.2 million in yearly rent to the agency for the use of U.S. Cellular Field. According to the lawsuit, Reinsdorf allegedly had “undue influence” over former Governor Thompson and apparently over all the members of the ISFA Board of Directors who became complicit in allowing Reinsdorf to treat Cellular Field and the surrounding publicly owned lands as his personal fiefdom.”

According to the complaint, the public agency used taxpayer money to build and renovate U.S. Cellular Field as well as to build the restaurant next door, Bacardi at the Park. However, most of the revenue from those two facilities has allegedly gone to the White Sox.

The lawsuit alleges that the “highly favorable terms granted to the White Sox in 1998 and intended to last until at least 2029 served to create a sense of entitlement on the part of White Sox Chairman Reinsdorf, who has repeatedly acted as though U.S. Cellular Field was a gift by the Illinois taxpayers to Reinsdorf and his team”.

Thompson dismissed the lawsuit as a “self-serving tirade” and both he and a Reinsdorf spokesman denied the allegations.