Category: News on the Homepage

By Ken Schachter
kenneth.schachter@newsday.com

The parent company of AriZona Iced Tea is facing two federal lawsuits that challenge its “no preservatives” and serving-size labeling.
The suits are seeking class-action status.

A lawsuit filed in October in U.S. District Court in Manhattan says the Woodbury company “deceptively” labels beverages as having “no preservatives,” when many of its products contain citric or ascorbic acid, substances that Marc Meyers, a food scientist engaged by the plaintiffs, described as preservatives.

The other case, filed in September in U.S. District Court in Central Islip, says that AriZona Beverages USA LLC and affiliate Beverage Marketing USA Inc. mislead consumers about the amount of sugar and number of calories in their beverages by using a serving size of 8 fluid ounces on its labels instead of the actual size of the container.

That lawsuit, filed by Michael Reese and George Granade of the Manhattan-based law firm Reese LLP, says that AriZona’s typical beverage size is 16 ounces.

The company makes a wide variety of iced tea and juice beverages, including Arnold Palmer Half & Half and Joltin’ Joe Espresso, a carbonated coffee drink.

Domenick Vultaggio, chairman and co-founder of AriZona Beverages, and his legal team did not respond to calls seeking comment.

Both lawsuits seek jury trials, unspecified monetary damages, legal costs and court orders demanding that the company change its practices.
C.K. Lee, of the Manhattan-based Lee Litigation Group, the law firm that filed the lawsuit about the “no preservatives” labeling, said companies need to be accountable for their products.

“People say, ‘You bought a 99-cent can of AriZona Iced Tea. Big deal.’ [But] if manufacturers think they can get away with a small lie, they’ll think they can get away with a big lie,” Lee said.

Calls to Reese LLP were not returned.

Joseph Campolo, managing partner at Campolo Middleton & McCormick LLP in Ronkonkoma, said many such class-action lawsuits have been filed against businesses he represents.

Such cases “usually get resolved in some sort of court-ordered mediation,” he said.

Alternatively, the court could decide not to certify the class, meaning “the case is basically over,” Campolo said.

In certifying a class, a court needs to determine that the plaintiffs filing a lawsuit represent a large number of others; have claims typical of the class; protect the interests of other class members; and have similar questions of law.

If the class is certified — a crucial point in such class-action lawsuits — the cases can be “highly lucrative,” for law firms, Campolo said. “But they have to have merit.”

He said law firms typically pursue such cases on a contingency basis, meaning they get paid only if the lawsuit is successful or generates a payout in an out-of-court settlement.

If the case does move forward and the court certifies that the class is valid, companies can face “tremendous expenses,” Campolo said.

Irina Manta, associate dean for research and faculty development at Hofstra University’s Maurice A. Deane School of Law, said there have been other legal cases involving serving size and allegations of deceptive practices, some involving breath mints and vitamin gummy bears.

In March 2013, a U.S. District Court judge in San Francisco decertified a class in a March 2010 lawsuit that charged AriZona deceptively promoted its products as “all natural” even though ingredients included citric acid and high fructose corn syrup.

Sotiria Everett, a clinical assistant professor in Stony Brook University’s Department of Family Population and Preventive Medicine’s Nutrition Division, said there’s an “ongoing debate” within the food industry and the Food and Drug Administration about the term “natural” on labels.

“There are two questions here,” she said. “Are these things safe to consume long-term? And what’s the best and most ethical definition of natural sources? That’s the back-and-forth continuously with the FDA.”

Everett said the “obesity epidemic” can be traced in part to the trend toward “supersized” food products. “People tend to eat what’s in front of them,” she said.

A February 2018 “nonbinding” recommendation for food manufacturers by the FDA defined “serving size” as the “amount of food customarily consumed … in one sitting for that food” and includes guidelines for dual-column labels providing calorie and nutrition labeling per serving and per container.

Read it on Newsday.

Campolo, Middleton & McCormick ‘s M&A team has successfully closed another membership interest buyout for a longstanding business, helping a Long Island company with a fifty-year history begin its next chapter.

CMM represented two of the three owners of the Suffolk County-based construction management and engineering firm in their purchase of the third owner’s membership interest in the company, negotiating a great deal for our clients in the process. Donald Rassiger, with support from Vincent Costa, navigated the difficult negotiation and helped our clients through the process with as little stress and disruption to their business as possible.

Learn more about how we can help you buy or sell a business.

Campolo, Middleton & McCormick, LLP, a premier law firm with offices in Ronkonkoma and Bridgehampton, is pleased to announce the addition of David Green, Esq. to the firm’s rapidly growing Litigation team. Green brings to the firm many years of experience fighting for clients in courthouses across the New York metropolitan area in personal injury, negligence, and commercial litigation matters.

As an attorney with some of New York City’s largest litigation firms, Green has secured tens of millions of dollars for his clients, both individuals and businesses. At CMM, Green puts this hands-on experience to work representing all types of litigants in complex litigation matters in state and federal court. He also works with corporate litigants, using the skills he developed both inside and outside the courtroom.

A resident of Forest Hills, Queens, Green is a graduate of the University of Delaware and University of Miami School of Law. In 2018, Green was recognized as a SuperLawyers “Rising Star.”

Contact David at dgreen@cmmllp.com or (631) 738-9100, ext. 386.

About CMM

Campolo, Middleton & McCormick, LLP is a premier law firm with offices in Ronkonkoma and Bridgehampton, New York. Over the past generation, CMM attorneys have played a central role in the most critical legal issues and transactions affecting Long Island. The firm has earned the prestigious HIA-LI Business Achievement Award and LIBN Corporate Citizenship Award, a spot on the U.S. News & World Report list of Best Law Firms, and the coveted title of Best Law Firm on Long Island. Learn more at www.cmmllp.com.

By Mark Harrington 
mark.harrington@newsday.com
@MHarringtonNews
Four of the region’s largest solar companies are working with the Hauppauge Industrial Association on an initiative that would install solar panels on many of the members’ 459 rooftops, generating up to 20 megawatts of solar power.

The companies, Harvest Power, EmPower Solar, EnterSolar and SUNation Solar, have been working with the HIA to study rooftops to determine which are best suited to solar. The solar companies sent letters to more than 400 buildings in the Hauppauge Industrial Park, telling them of the revenue-producing potential of their roofs. The HIA, a support group for companies in the industrial park, announced the program to members at a meeting on Sept. 28.

Terri Alessi-Miceli, president of the association, said with so many flat roofs on buildings in the park, “it really makes sense to look at solar as an option.”

Jack Kulka, one of the founding members of the HIA, who is in the process of having solar panels installed on his building roof, likened the effort to other cooperative plans instituted by the park, including negotiations about power delivery with the former Long Island Lighting Co., internet service and pending discussions for sewer hookups.

Joe Campolo, chairman of the group, told members at the meeting that businesses need to cut costs to stay competitive, and solar was a way to do it.

One primary method of outfitting the buildings will involve a concept called community solar that would allow the companies to sell power produced on their rooftops to dozens of PSEG customers across Long Island. Community solar lets developers offer the cheaper power to customers who can pay as little as 16 cents a kilowatt hour for blocks of energy they buy by the year. Traditional power from the utility costs upward of 20 cents a kilowatt hour. A megawatt of solar powers around 165 homes in New York, according to the Solar Energy Industries Assoc., a trade group.

Companies can also participate in so-called feed-in tariff solar that allows companies to sell the power they generate back to the LIPA electric grid at a preset price. Revenue generated from the systems would allow the companies to offset the costs of installing solar, which is expected to come at a discounted price because the four solar providers are pooling resources to cut labor and materials costs.

Only 39 of the 459 buildings in the Hauppauge Industrial Park have solar power now. Among them is Superior Washer and Gasket, whose president, Allan Lippolis, said the company cut its annual electricity bill by some $50,000 — savings that will allow the system to pay for itself in around seven years. He said he expects his system to save $900,000 in electricity costs over its lifetime. The company has a 245,000-watt system of 805 panels.

Scott Maskin, chief executive of SUNation and chairman of the Hauppauge Industrial Park’s power subcommittee, said the 20 million square feet of rooftop space in the park can generate considerably more than the 20 megawatts the companies initially propose to install. Limitations on how much solar power can be run through a LIPA substation and other infrastructure issues limit the total amount of solar, for now, officials said.

On a peak-usage day, the park uses around 80 megawatts of power.
In the community solar model, building owners who choose to finance and own their systems get the benefit of tax credits and other tax incentives, and receive payments from subscribers for the blocks of energy they produce.

But building owners may choose to lease their roofs to developers, solar companies or other third parties, and they would receive lease payments.

Read this on Newsday.

Campolo, Middleton & McCormick has achieved a high-value settlement for a family who lost their father/husband in a tragic car crash that featured prominently in the news media for months.

The defendant’s vehicle was covered by a $25,000/$50,000 insurance policy, well below the total damages of the catastrophic accident, which raised the grim possibility that the family would receive only a fraction of the damages to which they were entitled. We previously reported that in a first in New York State, CMM prevailed on a motion for pre-judgment attachment in the case, providing security for the family as the case continued to make its way toward resolution.

Since then, following the success of this innovative motion, a related proceeding in Surrogate’s Court, and CMM’s persistent efforts to subpoena the defendant’s wife and attach marital assets, the defense team decided to settle the case. As CMM partner Scott Middleton explains, the two young sons of the man who tragically lost his life will now be provided for financially through their young adulthood.

“The information HIA-LI has uncovered – including that the Hauppauge Industrial Park is the second largest in the nation behind only Silicon Valley and that one in 20 jobs on Long Island depends on it – is staggering. But while information is great, it means nothing if action doesn’t follow. So let’s talk about the work we’ve done over the past year.” CMM Managing Partner and HIA-LI Board Chairman Joe Campolo inspired the 500 business leaders gathered to celebrate their love for Long Island at the HIA-LI 24th Annual Business Achievement Awards on September 20 as he spoke of the projects and partnerships that he, HIA-LI President Terri Alessi-Miceli, and the Board of Directors have forged over the past year to grow this economic engine. Read the full text of Joe’s speech below.

Good afternoon, everyone.  As mentioned, I proudly serve as the Managing Partner of CMM, and just as proudly I serve as the Chairman of the Board of Directors of the HIA-LI.

Thank you for joining us today at the Business Achievement Awards – we’re all gathered here to celebrate our love of Long Island and our desire to see it prosper and grow. CMM is a past recipient of the Rookie of the Year Award, and I remember sitting with my partners in the audience and finding out that we had been selected, and to this day it remains a pinnacle moment for us and our firm. So to all the finalists and recipients, I congratulate you and your teams on a truly wonderful accomplishment.

I like to think that my remarks last year marked the “coming out” of the economic importance of the Hauppauge Industrial Park to Long Island. We had just concluded a year-and-a-half long research project with graduate students from Stony Brook University to measure the economic impact of the Park on the region, and the results of this Economic Impact Study shocked even us at HIA-LI. Just a reminder of a few of those results I shared with you last year:

• The HIP is comprised of 11 square miles located primarily within the Town of Smithtown, with a small piece in the Town of Islip.
• It’s the second largest industrial park in the nation, behind only Silicon Valley! (Pretty amazing when you think about all the notoriety Silicon Valley gets, and how little the HIP has gotten.)
• Contained within these 11 square miles are approximately 1,400 companies that employ about 55,000 people. In fact, one in 20 jobs on Long Island is dependent on the HIP.
• The total sales volume of these businesses is in excess of $13 billion.
• The total annual payroll to HIP employees is in excess of $2.8 billion.
• The total income tax paid on that payroll is $806 million.
• This leaves in excess of $2 billion of household income to spend locally.
• The HIP generates more that $64 million in local property taxes.

But while information is great – and this information is truly staggering – it means nothing if action doesn’t follow. So let’s talk about all the work we’ve done at the HIA-LI over the past year since we uncovered this valuable information.

As a direct result of the Economic Impact Study, the Suffolk County IDA and the Regional Plan Association (RPA) have graciously granted critical funds to bring engineering, architecture, planning, and design professionals into the Park to help make it more viable for the future. We have been working closely with James Lima Planning and Development, as well as stakeholders in the Park, on ways to maximize the Park’s growth and competitiveness. These efforts are making national headlines as we continue to aggressively get the word out.

The Economic Impact Study also coincided with new leadership in the Town of Smithtown. Supervisor Ed Wehrheim and his administration, including Councilman Tom Lohmann, who in addition to the Town of Islip Supervisor Angie Carpenter, have since been incredibly receptive and supportive of our efforts to pass and explore new zoning regulations for the Park to allow businesses to grow. Our teams have been meeting regularly, with the Town of Smithtown giving us a direct seat at the table to discuss the needs of the park and most importantly giving us a line item in their capital budget.

Next, we’ve sharpened our focus on attracting and retaining talent here in the HIP and on Long Island in general. You may have heard that by 2025 – only a few short years away – over 70% of the workforce will be millennials. If we don’t keep these millennials working here in our businesses, factories, restaurants, and nonprofits, the Long Island economy can’t survive. As a result of the research we conducted, we learned that a huge factor in Silicon Valley’s success is its partnership with Stanford University, which provides a consistent stream of talent to the Valley. At that point, a lightbulb went off, and we realized that we need to be directly collaborating with our great universities and colleges. And so we have created a unique partnership between HIA-LI, as steward of the HIP, and Stony Brook University (Yacov Shamash and board member Ann-Marie Scheidt) and Suffolk County Community College (John Galiotos and Fara Afshar), with a laser-focused mission to find recent grads jobs right here in the Park. I also asked my fellow board member Sue Gubing, a career educator, to take on (and she graciously accepted) the role of the liaison with the career placement offices at these institutions so that we can directly help companies in the Park find talent and even hand-pick students and alumni when they have hiring needs, without getting lost in the bureaucratic shuffle.

Through these direct relationships, as well as our initiatives to create targeted job fairs exclusively for companies located in the Park, HIA-LI is ensuring that these businesses can attract and retain the talent needed to compete with the Googles and the Facebooks of Silicon Valley, which try every day to lure our most talented folks away.

Another critical initiative we are undertaking, understanding the “chicken and egg” relationship between jobs and housing, is that we are actively collaborating with LIBI, Tritec, and other real estate professionals to do feasibility studies and identify the zoning changes needed to create new residential developments with direct access to the Park, to house this growing workforce. These new partnerships have already gained tremendous momentum, and we’re just getting started!

But the Economic Impact Study and its impact aren’t the only things going on at HIA-LI. My amazing fellow board members are undertaking other important initiatives focused on economic growth and sustainability.
Our new energy initiative, headed by board member Scott Maskin, who is assisted with the guidance of Jack Kulka, aims to help building owners in the Park prosper by investing in renewable energy. They have worked closely with Mike Voltz (another board member) of PSEG to help identify 20,000,000 square feet of rooftops in the Industrial Park which can house solar, which would enable the businesses in the Park to lower their energy bills and become more competitive. Another home-grown initiative came from fellow board members Rita DeStefano, Joseph Garofalo, and Allan Lippolis, who have teamed up to create a small business task force, which hosts Town Hall meetings to focus on the needs and critical role of the often-forgotten sector of small business.

All of this demonstrates that the Hauppauge Industrial Park is more than just a random collection of buildings. It’s a living, breathing business ecosystem and the HIA-LI takes its role as steward of the Park very seriously. I am privileged and honored to work with HIA-LI President Terri Alessi-Miceli and her talented staff to help keep all of these important initiatives moving forward, as well as all of my fellow Board members, a virtual “who’s who” of Long Island.

All of this begs the question of what’s next? Short answer is, plenty. We are working hard toward finalizing the feasibility studies, working on creating a buying consortium among Park businesses to help lower costs for business supplies and other expenses, reaching out to collaborate with other Long Island colleges and universities, and are even launching a contest to rename and rebrand the Park, to help instill a broader sense of pride in this powerful economic engine across all of Long Island. And the list goes on and on.

Of course, none of this could be accomplished without the support of our elected officials, many of whom see the value and support the Park, and some who still need convincing. In addition to Supervisors Wehrheim and Carpenter, we have and continue to receive strong support from Suffolk County where we are fortunate to have a strong relationship with and support from both the Legislature and County Executive Steve Bellone.

We are also very happy to have many State representatives, including folks from the Governor’s office here today, showing that Albany understands and supports our initiatives. This is very good to see, as we cannot do this alone and need all of their help.

We are just getting started!

In an M&A deal that combined social impact investing, the heavily regulated healthcare industry, and the goal of expanding the reach of primary care physicians in underserved communities, Campolo, Middleton & McCormick represented the owners of an eight-office family medical practice in the sale of its wholly owned management company to Bridges Fund Management. Bridges U.S. Sustainable Growth Fund is the New York-based fund of a London headquartered private equity firm focused on social impact investing. The deal closed in July 2018.

Medwood Services provides administrative and management support services to New York Family Practice Physicians, which has locations in Brooklyn and Queens, and will continue to do so following the July close. The practice, headed by Dr. Glenn Muraca and Dr. Giovanni Marciano, plans to expand significantly throughout the New York metropolitan area and surrounding counties, helping to fill a gap in the healthcare system for primary care physicians who are able to efficiently and effectively manage the entire spectrum of healthcare-related services that families need, particularly in communities facing a shortage of primary care providers.

“Working with Christine [Malafi] and her team gave us total peace of mind. The entire process was well organized, and we were able to focus on our patients without being distracted by all the moving parts of the deal,” said Dr. Muraca. CMM’s Vincent Costa and Kyle Broderick assisted Malafi on the transaction. Learn more about our M&A and Healthcare practices.
Protegrity Advisors acted as the exclusive M&A advisor for Medwood Services and Drs. Maricano and Muraca.

Campolo, Middleton & McCormick has closed a fast-paced deal involving the sale of a third-generation family-owned music store in western Nassau County to a big box store, successfully negotiating a purchase price of nearly double the original offer.

The client retained CMM on a Monday and the transaction closed that Thursday. Donald Rassiger, with support from Kyle Broderick, drafted and negotiated the Asset Purchase Agreement and ancillary documents at breakneck speed. The pace of this transaction, coupled with the excellent result in the negotiation of the purchase price, demonstrates CMM’s ability to deliver enormous value to clients and how nimble CMM attorneys are when it comes to getting deals done.

Learn more about our Mergers & Acquisitions practice.

When a successful tire distribution company learned that one of its employees had been secretly operating a competing business for over four years while still working for the company and that key client files had gone missing and accounts stolen, they engaged Campolo, Middleton & McCormick to bring a lawsuit against the employee alleging misappropriation, unfair competition, and related claims. In response, the (now former) employee asserted numerous counterclaims against the tire company, including slander and defamation. Recognizing that the counterclaims were the employee’s attempt to distract the court from the damages  our client seeks in the lawsuit, CMM’s litigation team swiftly moved to dismiss the counterclaims, highlighting the former employee’s contradictory statements and failure to plead the “bare minimum” of facts necessary to maintain the counterclaims.

The Supreme Court – Suffolk County, Commercial Division (J. Emerson) agreed with CMM’s arguments and granted our motion to dismiss the counterclaims against our client in their entirety. CMM’s Jeff Basso noted, “This decision paves the way for our client to pursue the real issues in this case and start to recover from the tremendous harm this employee has done to their business.”

Learn more about our litigation practice.