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Life in New York City came to a screeching halt in 2020 due to the COVID-19 pandemic. The city was one of the hardest hit in the world, and businesses have struggled to regain their footing amid all the uncertainty. Governor Andrew Cuomo (D), for his part, sent mixed signals to the business community – first, implementing strong protections for health care providers and others, and then repealing some of those protections in August 2020.

Governor Cuomo has long insisted that New York is a business-friendly state but the litigation and regulatory climate tells a very different story. Businesses face uphill battles on multiple fronts. The courts allow the entrepreneurial plaintiffs’ bar to advance novel theories of liability under state and federal laws like New York’s consumer protection statute and the Americans with Disability Act (ADA), while much-needed reforms continue to stall in the state legislature. The activist state attorney general is attempting to regulate industries through litigation, and third-party litigation financing companies seek to profit off of the state’s overly-litigious environment.

Lastly, the state has seen a dramatic increase in excessive verdicts, also known as nuclear verdicts. These multi-million-dollar awards are driving up the cost of doing business in the state and having a devastating impact on the state’s economy. The New York Law Journal recently discussed the sense of urgency around reforming the state’s civil justice system as “New York State buckles under the weight of increasing taxes, the highest tort costs per household, the exorbitant cost of living, the highest taxpayer exodus, and the devastating financial impact of COVID-19.”



Litigation targeting whether New York businesses fully complied with Americans with Disabilities Act (ADA) accessibility standards increased 300 percent in federal courts from January 2014 to June 2019. That year, New York (2,635) was second to only California (4,794) in the number of filings. Florida was a close third with over 1,800 cases, but the next closest state was Georgia with a mere 243 filings. While there have been fewer of these lawsuits due to the pandemic, as of mid-year, New York has kept its position in second place.

New York wins first prize, however, for lawsuits attacking businesses over their websites. These lawsuits claim that a business’s website is not sufficiently accessible to individuals with disabilities because they lack technologies like screen readers. In 2019, New York’s federal courts hosted 1,354 of these claims, which is more than all of the other top states combined.

As is common practice with this predatory litigation, no warning or customer complaint is given to the business about its noncompliance until the lawsuit is filed. The impacts of lawsuit abuse on unsuspecting small businesses are further compounded by the devastation caused by COVID-19. According to Scott Piper, a lawyer for several lawsuit victims, defendants feel “Disbelief and many times anger… They haven’t made any money since mid-March and then they get hit with a lawsuit.”


A handful of plaintiffs’ firms file a majority of the ADA lawsuits in New York. Jermaine Deleston and his attorney Erik Bashian, for example, have sued at least 80 businesses together as of late 2019. Deborah Laufer, a Florida resident, has filed at least 47 lawsuits against different hotels in New York State. She dubs herself a “tester,” enforcing the ADA on non-compliant businesses. Her suits allege accessibility issues with hotel booking web- sites. It is estimated that she has filed over 300 of these types of lawsuits in nine states.

In November 2019, one of New York’s most notorious plaintiffs’ lawyers, Stuart Finkelstein, was arrested after the State discovered he engaged in a massive scheme to shake down small mom-and-pop stores across the state. He filed multiple lawsuits on behalf of unknowing plaintiffs, threatening stores with additional litigation if they refused to immediately settle. He earned over $930,000 in attorney’s fees. His behavior demonstrates how excessive lawsuit abuse, if not addressed, can quickly morph into criminal activity at the expense of small business.


Between October 2019 and May 2020, four law firms – Gottlieb & Associates, The Marks Law Firm PC, Zare Khorozian Law LLC, and the Law Office of Darryn G. Solotoff – filed 243 claims on behalf of 13 plaintiffs against restaurants and retailers in New York federal courts. The plaintiffs claim that the ADA requires physical gift cards to have braille.

Despite the onslaught of litigation by enterprising plaintiffs’ firms, U.S. District Judge Gregory Howard Woods of the Southern District of New York issued a significant win for defendants. In 2020, Judge Woods dismissed cases against several retailers, including Kohls and Banana Republic. In his opinion, Woods noted concerning litigation tactics targeting businesses. He highlighted that as a matter of law, braille gift card litigation fails because ADA regulates the location, not the items being sold. Gift cards are not a “public accommodation,” and not having access to a gift card does not prevent full enjoyment of the premises.

In May 2020, following Judge Woods’ decision, a magistrate judge recommended District Judge Steward Aaron (SDNY) dismiss a similar Braille gift card suit. Plaintiffs’ lawyers are expected to appeal at least one of the cases before Judge Woods.


A “first-of-its-kind” class action suit was filed in New York federal court against an adult assisted living facility following the COVID-19 outbreak. Plaintiffs are “seeking to hold a place of public accommodation liable under Title III or another federal law regarding accommodation of disabilities, Section 504, for not taking adequate measures, in the plaintiffs’ estimation, to prevent or mitigate the spread of COVID-19.”


In 2019, New York overtook California as the premier jurisdiction for food and beverage lawsuits. More of the same is expected in 2020, as the two states are once again battling for this dubious distinction.

For example, a complaint filed in federal court in the Southern District of New York in late 2019 takes issue with whether reasonable consumers expect a Panera blueberry bagel purchased in Manhattan to have real blueberries, rather than what the complaint describes as “dyed lumps.” More recently, New York federal judge Katherine Polk Failla allowed a suit to proceed over whether a product qualifies as “potato skin snacks” when it is made from potato starch and potato flakes. The plaintiff is represented by Lee Litigation Group, “a prolific class action firm in NYC.”


Infamous Long Island attorney Spencer Sheehan continues to prolifically file lawsuits specializing in product flavoring. Following a year in which he filed 27 food lawsuits claiming $135 million in damages, he earned the nickname “Vanilla Vigilante” in 2020. He has led a “crusade against fake vanilla.” Among his long list of targets is Whole Foods, which he sued for its vanilla soy milk and ice cream bars. In recent months, Sheehan also has targeted Vanilla Coke, protein shakes, coconut and almond milk, coffee creamers, ice coffee drinks, yogurt, cake mix, and more.

While most of the vanilla cases are pending, a federal district court judge this year dismissed one of Sheehan’s class actions targeting Wegman’s vanilla ice cream. Senior District Judge Louis Stanton observed that a consumer who has questions on the origin of the ice cream’s flavor can read the ingredients list, which does not indicate that the product contains vanilla beans or extract. “Where is the deception? What is misLeading, or misrepresented?” Judge Stanton asks, when consumers want vanilla ice cream, that is precisely what they get. They are not “looking for a bowl of vanilla.”

The vanilla lawsuits must have resulted in some lucrative confidential settlements because Mr. Sheehan has expanded these types of claims to other flavored products. His lawsuits take issue with, for example, whether flavored potato chip makers have misled consumers to believe they are made with real sour cream or cheddar, or consumers buy Lemon Biscotti cookies because they think they are flavored with lemon juice. One lawsuit actually contends that consumers are deprived of real carrots in carrot cake flavored donuts (and provides an interesting history of carrot cake dating back to the middle ages).


New York City continues to be a preferred jurisdiction for asbestos litigation. The city ranked third in the country for most asbestos case filings in 2019 with a total of 314. It also ranked second for mesothelioma specific case filings in 2019, totaling 126. While asbestos lawsuit filings significantly fell nationwide in the first half of 2020, New York was one of a few jurisdictions in which litigation increased. Through the second quarter of 2020, New York City had a 7.2 percent increase in filings as compared to the same time last year.

According to an industry report by KCIC, “the number of New York City complaints not stating disease decreased by almost 70 percent in 2019, and the number of these complaints now alleging mesothelioma or lung cancer more than doubled.” This is due to Justice Manuel Mendez’s enforcement of the 2017 Case Management Order (CMO) that increased the specificity needed in a pleading for it to be placed on the accelerated docket.

Justice Mendez served as New York City Asbestos Litigation (NYCAL) Coordinating Judge until July 2020, when he was elevated to the appellate division and replaced with Justice Adam Silvera, a former plaintiffs’ lawyer.

KCIC’s industry report also cites New York and California as the “most dangerous” jurisdictions for asbestos litigation due to the prevalence of high value verdicts. Between 2017 and 2019, New York accounted for over 33 percent of all asbestos verdict dollars nationwide. Illinois, home to Madison County – the jurisdic- tion with the most asbestos lawsuit filings in 2019, only accounted for .2 percent of verdict dollars during the same time period.


In April of 2020, the New York Appellate Division, First Department became the first in the state to affirm a jury verdict finding that a plaintiff’s peritoneal mesothelioma was caused by talcum powder. The court in Nemeth v. Brenntag N. America held that plaintiff’s experts were not required to quantify precise levels of asbestos to which plaintiff would have been exposed in order to establish specific causation.” The court instead accepted that “evidence that exposure to asbestos in excess of ambient air levels could cause various forms of mesothelioma in general was a legally sufficient ‘quantification’ of exposure to demonstrate specific causation.” As one amicus brief points out, the appellate court’s opinion “would effectively relieve plaintiffs of their burden to prove that they were exposed to sufficient levels of asbestos to cause their illness.”


A new employee at a New York asbestos and mesothelioma plaintiffs’ firm is raising eyebrows. The law firm Belluck & Fox recruited retired Fulton County Supreme Court Justice Richard Aulisi after he had handled hundreds of asbestos cases over the course of more than 20 years on the bench. The hire has been criticized because it shows a “revolving door” between plaintiff firms and the judges who rule on the parties the firms represent.

In addition to the firm’s close ties to the judiciary, it also has influence in regulating judicial conduct.

Joseph Belluck, one of the firm’s founding partners, was appointed by Governor Cuomo to chair the state’s commission on judicial conduct, which has the power to discipline judges. He has been chairing the commission since 2016. Plaintiff attorney power over judges may influence the way cases are decided.


In July 2020, Governor Andrew Cuomo (D) appointed four judges to the New York Appellate Division, First Department, including two justices from the NYCAL court, Manuel Mendez Olivero and Martin Shulman.

Justice Shulman has close ties to disgraced Assembly speaker Sheldon Silver. The promotions continue the historical trend of NYCAL judges who show a pro-plaintiff philosophy being placed in the pipeline for appointment to higher courts, following the elevations of former NYCAL managers, including Justices Helen Friedman and Peter Moulton.

Speaking of Sheldon Silver, in July 2020, he was resentenced to a six-and-a-half-year prison sentence, more than four years after his original 12-year sentence was handed down. In 2015, Silver was convicted of obtaining approximately $4 million in payments characterized as attorney referral fees solely through the corrupt use of his official position. The charges stemmed from the money Silver was paid by the state’s most prolific asbestos law firm, Weitz & Luxenberg, and from another Manhattan law firm specializing in real estate tax work. The Second Circuit intervened and vacated his conviction in 2017, and in a new trial in 2018, he was reconvicted.

“This was corruption, pure and simple,” presiding Judge Valerie Caproni said. “He abused his office, he did it for profit. He did it for at least 15 years, he did it in multiple ways and lied for years. The people of the state of New York were hurt greatly by what he did,” Assistant U.S. Attorney Daniel Richenthal stated.

“This was corruption, pure and simple.”
– Judge Valeria Caproni


New York is experiencing a surge of “nuclear verdicts” in cases ranging from premise liability to medical malpractice. These are awards that usually include an amount for pain and suffering that dwarfs prior verdicts and, at levels in the tens of millions of dollars, hardly serve a compensatory purpose. Rather, they result from improper tactics that inflame jurors and mislead them to believe that amounts at these levels are ordinary and acceptable in litigation.

In July 2020, the New York Law Journal published a three-part series titled, “Ahead to the Past: The Evolution of New Rules of Engagement in the Age of Social Inflation and Nuclear Verdicts.” In this piece, the authors discuss how plaintiffs’ attorneys employ a “how dare they defend” approach to litigation. This method allows for disproportionate compensation by fueling emotional outrage. They use specific language, such as “big corporations” and “hired guns” when speaking to the jury and encourage them to “send a message” to the defendants.

Tort law is meant to compensate, not to punish. As the authors observe, “Rather than provide just compensation, [nuclear verdicts] are thinly veiled efforts to punish the defendant that are nearly always awarded at the specific request of plaintiff’s counsel.”

“The average New Yorker feels the pain too. Nuclear verdicts (and routinely excessive ver- dicts) drive insurers from the market and increase premiums. The twin pressures of decreasing competition and increased insurance costs are ultimately passed through to the consumer. This is the same consumer and taxpayer who was leaving New York at a higher rate than any of the 50 states even before COVID-19.” – New York Law Journal


Another tactic used by the plaintiffs’ bar to secure nuclear verdicts is improper “anchoring.” During summation, lawyers will suggest an unreasonably large award to the jury and that number becomes the starting point in a juror’s mind.

Several cases are currently on appeal in New York in which anchoring led to record-setting pain and suffering awards.

For example, after a woman was hit with a shopping cart thrown off a mall’s parking garage by two teen- agers, her lawyers sued the retailers, security firm, and property owners. The plaintiff’s lawyer asked the jury to award $58 million for her pain and suffering. The jury apparently felt this level – which would take the average New Yorker several lifetimes to earn – was too high, but still returned an extraordinary $45 million award, including $35 million in noneconomic damages. The trial court in that case, Hedges v. Planned Security Services, then cut the noneconomic damage award in half to $17.5 million–still a record amount.

In another case, plaintiffs’ lawyers  asked a jury to award  $85 million in noneconomic damages to a worker who fell while assembling a booth for an event at Jones Beach. The jury obliged with a $85.75 million pain and suffering award on top of $13.5 million for medical care and lost wages.  The trial court lowered the pain and suffering award in that case, Perez v. Live Nation, to $40.6 million – an amount wildly beyond that which New York  courts have  permitted. The New York  Law Journal points to how the rise in nuclear verdicts is “turning the New York court system on its head” and is “contributing to the demise of New York state.”

“At a high level, every improper anchor in our data set produced a runaway verdict of $15 million or more for pain and suffering with awards ranging as high as $90 million. The value of these pain and suffering awards totaled a staggering $1.5 billion, and this figure does not tell the full story.”

Unlike some other states, New York law does not set a hard cap on awards for a person’s pain and suffering, which cannot be objectively measured. Instead, in New York, a verdict is “excessive or inadequate if it deviates materially from what would be reasonable compensation.” Courts look to prior awards for comparable injuries, sustained on appeal, for guidance. Prior to the dramatic rise in nuclear verdicts, only two New York appellate cases surpassed $10 million in noneconomic damages. The article highlights specific data that demonstrates the impact anchoring has had on recent verdicts. According to the report, in 90 percent of all cases where a plain- tiff’s lawyer requests $20 million or more, the verdict is at least double the state’s “de facto cap” for pain and suffering damages of $10 million. In almost two-thirds of all cases, the plaintiff receives at least $30 million, and finally, in almost 33 percent of all cases, improper anchoring results in a verdict of more than $50 million.

These nuclear verdicts directly impact all New Yorkers, as it leads to higher insurance rates, higher consumer goods costs, and fewer jobs. Since public entities, such as public schools and the transit authority, are subject to these types of awards, nuclear verdicts also place taxpayers on the hook and place city services at risk.


Pushing an expansive view of public nuisance law, New York City lawyers and Attorney General Letitia James (D) are looking to shift costs associated with public crises to businesses. While litigation may fill government budget gaps and line the pockets of trial lawyers, it does little to help people or solve problems.

Historically, public nuisance law has been applied in cases involving land use and public spaces. A successful claim for public nuisance usually involves instances in which there is an unreasonable interference in a right that is common to the general public. Typical cases include manufacturing plants emitting noxious fumes or restaurants blaring loud music.

The new expansive view of public nuisance law exploits the vague definition of the tort and applies it to costs associated with products, sometimes long after they are made and sold. This trend is concerning to all industries and is likely to continue as state and local governments look for sources of funding for public health and other problems.


New York City continues to be on the forefront of regulation through litigation with respect to U.S. energy policy on climate change. NYC is currently suing energy producers alleging they should be penalized for selling oil, gas, and other energy products by paying for the City’s costs for future infrastructure projects, including seawalls, to protect it from storms and rising waters. As the U.S. District Judge who dismissed the case explained, “the serious problems caused [by climate change] are not for the judiciary to ameliorate.

Global warming and solutions thereto must be addressed by the two other branches of government.” The City appealed the case to the U.S. Court of Appeals for the Second Circuit, which is deciding whether the City’s state tort law claims can be so leveraged to circumvent Congress and federal agencies in this way. The City is arguing that state law applies because “there is no uniquely federal interest” in its ability to sue for local property damages. The energy producers countered that federal law applies because these cases invoke federal energy and emissions policies. As indicated, the District Judge sided with the energy companies, calling out the City as “hiding an emissions case in language meant to seem it was instead targeting the companies’ production and sales operations” over local property damages. The Second Circuit panel heard arguments in the case in November 2019, and we are awaiting its ruling.

Overall, there are now about two dozen cases around the country seeking to subject energy producers to liability for marketing and selling oil, gas, and other fuels. Unlike NYC’s lawsuit that was filed in federal court, many of them were filed in state court and then removed to federal court by the defendants. In many of those cases, the district and circuit courts remanded them back to state court despite the clear federal interests involved. In October 2020, the United States Supreme Court agreed to hear an appeal arising out of Baltimore’s case that was remanded by the Fourth Circuit. The specific issue before the Supreme Court relates to the scope of appellate review when the Federal Officer Removal Statute is invoked, though most court watchers believe the high court will provide guidance on whether these lawsuits belong in state or federal court.


In December 2019, Exxon successfully defended itself in a landmark bench trial over claims that Exxon Mobil “deceived its investors about climate change risks to its business.” When the State Attorney General launched its probe, its office made broad accusations about the company’s conduct. After several years, the State narrowed the case to a claim under the Martin Act, which requires the attorney general to prove that there were material misrepresentations to investors that would have altered a reasonable investor’s investment decisions. The state judge hearing the case dismissed the claim, calling the allegations “hyperbolic.”


New York Attorney General Letitia James (D) also is looking to improperly expand the state’s public nuisance law in the context of the opioid litigation. She has filed a lawsuit on behalf of the state of New York and two Long Island counties against manufacturers and distributors. It claims that the companies created a public nuisance through the marketing of opioids. Suffolk County Supreme Court Judge Jerry Garguilo dismissed the public nuisance claims brought against pharmacy defendants as dispensers of the prescription medication but so far has allowed the claims asserted against manufacturers to proceed.


New York City has been at the epicenter of the huge surge in litigation financing that has occurred over the past decade. This predatory business practice increases the amount of litigation and provides benefits to plaintiffs’ lawyers while preying on consumers. There have been reports of New York City third party litigation finance firms, which operate like payday lenders, encouraging vulnerable individuals to file lawsuits and then charging as high as a 124 percent interest rate.

Somewhat surprisingly in March 2020, the New York City Bar Association’s Litigation Funding Working Group issued its long-awaited report and endorsed the predatorial practice. The group said plain- tiffs would benefit from increasing access to litigation funding. The group rejected a proposal that would have at least required transparency and oversight of such arrangements by requiring disclosure of a third-par-

ty’s interest in the litigation to the court and other parties.

The New York City Bar Association previously published a formal opinion concluding that lawyers may not enter into a litigation financing arrangement with a non-lawyer funder under which the funder is paid out of any recovery. Such arrangements, the NYCBA found, violate ethical rules that have long prohibited lawyers from partnering with or sharing fees with non-lawyers.

The New York Court of Appeals also will weigh in on the issue in the near future as the court has been asked to determine whether a litigation financing agreement is usurious in certain instances. The court will determine whether a specific litigation finance agreement constitutes a loan or a “cover for usury.” This case involves “portfolio litigation funding” in which a funder advances money to the attorney to cover attorney’s fees and to the client for his or her own use. In this case, the plaintiff provided funding for the defendant lawyer’s lawsuit in exchange for proceeds from the case and attorney’s fees in other unrelated cases. The Ninth Circuit certified the question to the New York Court of Appeals because “the result is likely to have wide-reaching implications” and because “[o]ther states that have addressed [the issue] have reached conflicting results.”


New York City is home to the most expensive construction costs in the nation, thanks in no small part to its “Scaffold Law.” The Scaffold Law was enacted to “protect workers who helped build New York’s now-iconic skyline in the 19th century.” Now, it is one of the main deterrents for real estate investors and builders from investing in the city and in construction site safety. New York created a risk through legislation that is becoming uninsurable.

Under this law, courts hold contractors and property owners liable for workers’ “gravity-related injuries,” whether that injury occurred due to a fall from a stepstool or New York’s tallest tower. New York courts have found that liability under this law is “absolute,” meaning that businesses must pay up regardless of whether the fall occurred due to the workers’ carelessness or reckless conduct. No other state has such a law.

The absolute liability standard imposed by the Scaffold Law has led to a massive exodus of underwriting companies from the state, leading to higher premiums and an overall high cost of doing business. It is esti- mated that money wasted on the Scaffold Law could be spent to create 12,000 new jobs, boosting the state’s economy by over $150 million.

In February 2020, the New York Court of Appeals stacked the deck further against defendants. The Court abandoned its “choice” standard, meaning if the employee simply chooses not to use safety measures, then the employer is not liable. In its place, it outlined four criteria that must be met in order to grant a defendant’s motion for summary judgment. The criteria are as follows, “when plaintiffs: (1) had adequate safety devices available, (2) knew both that the safety devices were available and that [they were] expected to use them, (3) chose for no good reason not to do so, and (4) would not have been injured had they not made that choice.”

In the case, the plaintiff observed his co-worker climb up several feet to a scaffold beam, unhook his safety belt, and enter a building through a window cut out. The plaintiff then attempted the same maneuvers but fell onto the scaffold platform. The plaintiff testified that he knew he was not supposed “to pass through there.”

In denying the motion for summary judgment, the Court reasoned that the worker might not have known that he was expected to use the safety equipment because another worker had not followed safety protocol.

Some New York lawmakers have long sought to address excessive liability under the Scaffold Law but continue to come up short. Opposition from powerful special interests – especially the trial lawyers – has stymied efforts to have a more reasonable system that considers the actions of both employers and workers in deter- mining liability.


The New York legislature also introduced a bill that would potentially expand the state’s long history of using the courts and the powers of the attorney general to shake down successful businesses. State Senate Deputy Majority Leader Mike Gianaris (D), who is partially credited for scaring away the development of Amazon’s HQ2, introduced a bill that would open any business with a “dominant position” in a market to private lawsuits. The so-called “Twenty-First Century Anti-Trust Act” would open up any innovative twenty-first century company to massive new liabilities. For example, as posited in the National Herald, the eventual creators of a COVID-19 vaccine would naturally have a “dominant position” and under this proposal would be subject to lawsuits from both private attorneys and the attorney general.

In their continuing quest to open up every sector of the economy to private rights of action, the New York legislature also introduced legislation to expand their False Claims Act to include private rights of action and eliminate the sticky issue of intent. Not content to allow the Tax Department to do its job, the proposal would allow any two-bit attorney to take a shot at any wealthy taxpayer, turning potentially valuable recoveries into useless attorney’s fees. Further, with a ten-year statute of limitations, but a three-year window on regulatory audits, a tax filer could settle an audit, but still be unknowingly subject to lawsuits.


After passing needed liability protections for healthcare providers treating patients during an unprecedented pandemic, the New York legislature rolled back that law.

When enacted in April 2020, the New York law provided that a doctor, hospital, or other healthcare provider would not be liable if the care provided was impacted by the COVID-19 pandemic. This liability protection would apply so long as the provider acted in good faith and did not harm a patient through gross negligence, recklessness, or intentional misconduct.

Just four months later, the legislature amended that law to only apply when a healthcare provider was treating a COVID-19 patient. The protection would no longer be available when the pandemic led a healthcare provider, for example, to delay a surgery or not admit a patient due to limited staff, medical equipment, or bed space.

While legislators resisted calls to eliminate the liability protection completely, the altered law places healthcare providers in jeopardy as the battle against COVID-19 continues.

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