Category Archives: Legal Issues

BE CAREFUL: Don’t lose your attorney-client privilege due to email!

I’m sharing a thoughtful email I received from my friends at the law firm of Rooney Nimmo in New York City:

From CEOs and founders to file room folks, you may lose attorney-client privilege if using company email server. New York Court Rules that Attorney-Client Privilege is Lost if Otherwise Privileged Emails Go Through Employer’s Server.

In a recent decision in Peerenboom v. Marvel Entertainment, a New York court ruled that email communications between a client and his attorney are not privileged – and are subject to full disclosure – if they are transmitted through an employer’s email system that is “monitored.”

The case arose out of a subpoena to Marvel seeking the allegedly defamatory emails of its CEO, Perlmutter, regarding a dispute with the plaintiff over the management of the tennis club at their condominium.  Perlmutter objected on the grounds that some of the emails were between him and his attorneys and were protected by attorney-client privilege.  The plaintiff contended that under Marvel’s policy, all emails sent through its server by employees were subject to being monitored, and, for that reason, among others, the attorney-client privilege was waived.  The court agreed and ordered all emails produced.

Two general principles of U.S. law of privilege are important here.  One is that, unlike in some other countries, in the U.S. the attorney-client privilege belongs entirely to the client – not the attorney.  Second is that the privilege is generally deemed waived if the communications at issue are disclosed by the client to third parties.

The court considered four factors in deciding whether privilege had been waived:  Whether (1) the employer maintains an email policy banning personal or other objectionable use; (2) the employer monitors the use of the employee’s computer or email; (3) third parties have a right of access to the computer or emails; and (4) the employer notified the employee, or the employee was aware, of the use and monitoring policies.

Based on these factors – all of which were deemed satisfied – the court concluded that the emails in question had lost their privileged status.

Notably, the four factors can be satisfied without any evidence that the emails had actually been viewed or read by a third party.  There was no indication that any of Perlmutter’s emails were read by Marvel’s “monitors,” and none was required.

The court noted that “the use of one’s own personal home computer to communicate with an attorney on a private, unencrypted email account does not vitiate the attorney-client privilege.”

It should be noted this is a lower court decision and is subject to appeal but for now it stands as law.

Thanks to Rooney Nimmo, 800 Third Avenue, New York, NY 10022 for this information.
James Maisano, Esq.
(914) 636-1621

Supreme Court Opines on First Amendment and a Public Employee

I’m always looking for interesting First Amendment cases, and this past Tuesday, the U.S. Supreme Court released its decision in Heffernan v. City of Paterson, where it reversed and remanded the lower court by a 6-2 vote in a decision written by Justice Breyer. The question presented was whether the First Amendment bars the government from demoting a public employee based on a supervisor’s perception that an employee supports a political candidate?

For factual background, Detective Heffernan was demoted by the chief of police after fellow officers saw him holding a yard sign and speaking with campaign workers for the challenger in the Paterson mayor race, although in reality, Heffernan was not involved in the campaign (and he did not even live in Paterson). He was picking up a sign for his bedridden mother, whose sign had been stolen from her yard. For his actions, Heffernan was demoted for “overt involvement” in the challenger’s campaign, even though his supervisor was mistaken. It should be noted that prior precedent has established that public workers cannot be blocked by an employer from exercising First Amendment rights during after work hours.

Justice Breyer held that when this employer demoted the employee out of a desire to prevent him from engaging in protected political activity, the employee is entitled to challenge that unlawful action under the First Amendment, even if the employer’s actions were based on a factual mistake about the employee’s actual conduct. The analysis focused on the employer’s act instead of harm to employee. A discharge or demotion based upon the employer’s belief that the employee engaged in protected political activity rises to the level of a constitutional harm, regardless if the belief rests on fact or mistake. Heffernan was demoted because his supervisor believed he was involved in a political campaign, and this demotion would discourage him and other employees from engaging in protected constitutional activities in the future. I certainly agree with the majority here.

Heffernan brought a Section 1983 action, the federal statute to seek damages for constitutional violations by state and local governments/officials when a person is deprived of a “right, privilege, or immunity secured by the Constitution,” and will now return to the district court to present his claims.

I reviewed two articles for this post: 1) & 2)

James Maisano, Esq.
(914) 636-1621

Using 1031 Exchanges When Selling A Property

Often clients will come to us wanting to sell a property, but feel trapped by the high capital gains taxes that they would incur by selling.

We have the pleasure of informing these clients that there is a special rule in the Internal Revenue Code that will allow them to defer capital gains by making a “1031 Exchange.” This allows the client to sell without having to deal with the tax implications immediately. (Under the right facts, the client may never have to deal with Capital Gains Taxes.)

Put simply, a 1031 Exchange allows you to “swap” one property for another. There are strict IRS requirements to get this benefit:

  1. The money from the first Closing must be held in escrow by a Facilitator. If any of this money comes to you, it may disqualify the entire Exchange.
  2. You must then identify a replacement property within 90 days of closing.
  3. You must close on the replacement property within 6 months of the first closing.

When it comes time for the second Closing, the Facilitator sends the money held in escrow to the Seller of the replacement property.

These time limits are extremely important. If you miss any deadlines, the transaction will be disqualified as a 1031 Exchange even if you do everything else right.

In addition, the second property must be of equal or greater value than the first property. This way, you are not earning any money on the sale of the first property-so you will not owe any capital gains taxes.

*     *     *

If you would like to participate in a 1031 Exchange, we can help. We have experience with both residential and commercial Exchanges, and work closely with a Facilitator who has years of experience as an escrow agent. Do not let capital gains taxes dissuade you from selling your property.


The Paton Law Firm

Kimberly Paton

29 N. Farview Ave.

Paramus, NJ 07652


Criminalizing Free Speech in Ohio Political Campaigns

As an advocate against misguided government restrictions on freedom of speech, I was pleased the U.S. Supreme Court ruled unanimously on June 16, 2014 (Susan B. Anthony List v. Steven Driehaus) that the plaintiffs had standing to continue a First Amendment challenge of a 1995 Ohio law that allows for criminal penalties against those making false statements during political campaigns.

The dispute arose between Congressman Steven Driehaus and pro-life groups during his re-election campaign. The pro-life groups claimed that Driehaus’ vote for the Obamacare law was support for taxpayer-funded abortion. The Ohio Election Commission (“OEC”) found “probable cause” the statement was false. The Plaintiffs were then refused a reserved billboard site because the owner was scared of being sued. No further action was taken by the OEC or in a criminal court because Driehaus lost the election and withdraw his complaint, which raised the standing issue for the plaintiffs, although after the election Driehaus did file defamation claims against them.

The Supreme Court held that enforcement of the Ohio law caused a credible threat of harm to the plaintiffs’ political speech with Driehaus obtaining a probable cause finding (that could be viewed by voters as a final decision) without ever having to prove the falsity in a court of law. Additionally, a burden was imposed on the plaintiffs when they were forced to divert significant time and legal resources to respond to discovery requests before the OEC in the crucial days before Election Day. It was held the plaintiffs had standing to sue because “an allegation of future injury may suffice if the threatened injury is ‘certainly impending,’ or there is a ‘substantial risk’ that the harm will occur.” The law had been challenged in the lower courts as “unconstitutionally vague” and having a “chilling effect” on freedom of speech, but those courts held there was no “immediate threat” of injury.

This 1995 Ohio law makes it illegal to “post, publish, circulate, distribute or otherwise disseminate a false statement concerning a candidate in an election” and violators can be fined and/or sentenced to six months in prison (Ohio Election Law 3517.21). Complaints filed with the OEC must allege: (1) a statement to be false; (2) that the speaker knew the statement was false, or spoke with reckless disregard for the truth; and (3) that the statement was made with the intent of impacting the outcome of the election.

It’s shocking this Ohio law survived for two decades. While we all hope candidates remain truthful in campaigns, this law certainly restricts constitutionally protected political speech. No state should be allowed to set up arbitrary (as well as political or partisan) government “truth” panels to decide if campaign statements are false, especially if the law allows for criminal penalties. I don’t believe any government can fairly regulate whether campaign statements are true or false. Remember, the First Amendment case law grants political speech the highest protection possible.

I enjoyed reading a Cato Institute (a libertarian think tank in DC) amicus brief challenging the law. The entertaining political commentator P.J. O’Rourke drafted the brief with attorney Ilya Shapiro (see brief at:, and here are excerpts from the introduction:

“I am not a crook.” “Read my lips: no new taxes!” “I did not have sexual relations with that woman.” “Mission accomplished.” “If you like your healthcare plan, you can keep it.”

While George Washington may have been incapable of telling a lie, his successors have not had the same integrity. The campaign promise (and its subsequent violation), as well as disparaging statements about one’s opponent (whether true, mostly true, mostly not true, or entirely fantastic), are cornerstones of American democracy. Indeed, mocking and satire are as old as America, and if this Court doesn’t believe amici, it can ask Thomas Jefferson, “the son of a half-breed squaw, sired by a Virginia mulatto father.”  Or perhaps it should ponder, as Grover Cleveland was forced to, “Ma, ma, where’s my pa?” . . . After all, where would we be without the knowledge that Democrats are pinko-communist flag-burners who want to tax churches and use the money to fund abortions so they can use the fetal stem cells to create pot-smoking lesbian ATF agents who will steal all the guns and invite the UN to take over America? Voters have to decide whether we’d be better off electing Republicans, those hateful, assault-weapon-wielding maniacs who believe that George Washington and Jesus Christ incorporated the nation after a Gettysburg reenactment and that the only thing wrong with the death penalty is that it isn’t administered quickly enough to secular-humanist professors of Chicano studies. 

Many campaign statements cannot easily be categorized as simply “true” or “false.” According to, President Obama’s claim that “if you like your health-care plan you can keep it” was true five years before it was named the “Lie of the Year.” . . . There is no lie that can be told about a politician that will not be more damaging to the liar once the truth is revealed. A crushing send-up on The Daily Show or The Colbert Report will do more to clean up political rhetoric than the Ohio Election Commission ever could.”

I can list many political charges I hear in campaigns about which thoughtful people can disagree. Is abortion murder? Does gun control reduce crime? Is the death penalty a human rights violation? Is fracking harmful to the environment? Does raising the minimum wage reduce entry level jobs? I have friends that can argue over these questions for hours. If one of these politically debatable issues was the subject of a complaint to the OEC, it would be forced to interject its own biases and political views into its decision, which could remarkably lead to a criminal prosecution and jail sentence. If this law existed in New York with our rough and tumble campaigns, you could be sure political partisans would file frivolous complaints with the commission attempting to harass and wound opposing candidates if a probable cause finding could be obtained, with the complaint then dropped after Election Day.

I believe the Ohio law (and similar laws in other states) violates the First Amendment of our Constitution. The decision about the truth of a candidate’s campaign statements must be left to the voters. This case was sent back to the federal district court, which will hopefully strike down this unconstitutional law soon.

James Maisano, Esq.
(914) 636-1621


Interesting Posts From Other Legal Blogs

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I try to surf through several key legal blogs each week and wish to share a few posts I found interesting and helpful to my practice:

1) We all need “deep thought” to do our finest work but are limited by counterproductive multitasking at the office:

2) Attorneys need to be careful about check scams that wind up in our email inboxes:

3) Here are 5 closely watched US Supreme Court cases for 2014:


4) Twitter advice for attorneys and other business people:

5) Make sure your social media bios are updated regularly:


 6) Small firm are better at social media than big firms:



James Maisano, Esq.
(914) 636-1621
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