NYC’s Soda Ban on Trial in High Court

When announcing the City’s ban on large soda drinks, Mayor Bloomberg thought that he was going to make New York City a leader in the push for Nanny State regulations nationwide. Many health advocates seem to think it’s a good idea for government to regulate sales of sugary drinks and other (not so healthy) foods. So it’s doubtful that Bloomberg expected such a vocal public backlash. But people seem to be up in arms over the issue because it reminds us of how intrusive government has become in our daily lives. And for this reason the NFIB Small Business Legal Center thought it worth supporting the legal challenge to the Soda Ban.

So far things have gone our way. Last summer a New York Court of Appeal affirmed a lower court decision striking down the Soda Ban. At the time we applauded the victory; it was refreshing to see the court strike down a restriction on our economic liberties. But now the case is going to New York’s highest court in a final showdown.

Last week the NFIB Legal Center joined with other industry groups in a joint brief defending the Court of Appeals decision. We argue that consumers should be allowed the right to choose for themselves which products they would like, and that government shouldn’t seek to regulate our lifestyle choices in this manner. For this reason we maintain that businesses should be free to continue selling soda in whatever size consumers prefer.

The decision may well have implications beyond New York. If we succeed in striking down the Soda Ban, that’s a clear line in the sand. And regulators will have to think twice before adopting similar measures in other cities. Conversely, if the Court chooses to uphold the Soda Ban, that sets a precedent that will only embolden paternalism in other places. Indeed, if New York City gets away with this, it won’t be long until San Francisco, Portland, Chicago, Boston, and Philadelphia do the same thing.

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NFIB/NY’s Durant and Albany-Colonie President Eagan Talk Lawmakers Return to Albany

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NFIB/NY to US Senators: Higher Federal Minimum Wage Would be Setback for New York

The National Federation of Independent Business (NFIB) today put US senators on notice that their votes Wednesday on whether to raise the federal minimum wage by 37 percent will count heavily among small business owners in New York.

“New York small businesses are still trying to absorb the 24 percent increase that was enacted last year,” said NFIB State Director Mike Durant.  “The federal proposal would raise costs another 12 percent.  That would make it very hard for small businesses that are struggling, especially in Upstate.”

NFIB this morning sent a letter to the United States Senate notifying members that S-2223 will count as a Key Vote in the NFIB Voting Record for the 113th Congress.  The bill, entitled the Minimum Wage Fairness Act, would increase the minimum wage to $10.10, increase tipped wage, and permanently index it to inflation.

The organization opposes the measure as a danger to small businesses that are least able to absorb a big increase in the cost labor.

“Yet again, lawmakers are targeting the nation’s economic engine – small business owners – with an anti-employer agenda,” said NFIB Manager of Legislative Affairs Ashley Fingarson. “With increases to health care costs, higher taxes, more costly regulations, and now a dramatic minimum wage increase, small business owners simply can’t afford another excessive government mandate. It could not be clearer from our studies and the recent Congressional Budget Office report – raising the minimum wage will kill jobs and stifle economic output.”

NFIB uses Key Votes each Congress to rate members of Congress and the US Senate. The information is then compiled and sent to each Congressional office at the end of the congressional session.  Lawmakers who vote with small business at least 70 percent of the time are eligible for NFIB’s Guardian of Small Business Award and potentially its endorsement for reelection.  The NFIB Voting Record also highlights lawmakers who vote against small business on most key issues.

“A lot of elected officials talk about supporting small businesses but their voting records sometimes tell a different story,” said Durant.  “This is a very important issue for small businesses in New York and we want our senators to know that before they vote on Wednesday.”

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NFIB Bursts New York City’s Bubble

Today the National Federation of Independent Business (NFIB) Small Business Legal Center filed an amicus brief asking New York’s Court of Appeals to uphold a lower court’s ruling saying New York City’s ban on large drinks is unlawful.

“Small business owners have a right to freely provide goods and services without the government infringing upon their economic liberties,” said Karen Harned, executive director of the Small Business Legal Center. “From the beginning we have argued that this law is overreaching, unfair to small business owners and ignores the individual rights of consumers to make their own choices. Two different courts in New York have agreed with us and we urge New York’s High Court to uphold the previous rulings and ensure that the voice of small business continues to be heard.”

NFIB State Director Mike Durant, who criticized the soda ban when it was imposed by former Mayor Michael Bloomberg, called it regrettable that the new administration hasn’t acted more sensibly when it comes to consumer choice.

“We had hoped that the de Blasio administration would drop the case since the ban failed once already in court,” said Durant. “New Yorkers are smart people who can decide for themselves how much soda they can safely drink.  There’s no evidence that the soda ban has been good for anyone except late night comics and it’s an embarrassment to the city and the state.”

On March 2013, a state Supreme Court judge ruled that the soda-ban was unlawful—holding that the New York Board of Health had overstepped its authority and acted in an arbitrary manner. Four months later, the State Supreme Court’s appellate division affirmed the lower court’s decision striking down the ban. On June 4, the Court of Appeals in Albany will hear oral arguments in the city’s appeal.

NFIB’s brief argues that small business owners have a right to make an honest living by providing consumers with products and services that they desire, and that consumers should be allowed to make their own lifestyle choices with the products they consume.


The NFIB Small Business Legal Center  is a 501(c)(3) organization created to protect the rights of America’s small business owners by providing advisory material on legal issues and by ensuring that the voice of small business is heard in the nation’s courts. The National Federation of Independent Business is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals.

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About those “new” New York commercials…

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NFIB Legal Center Defends Entrepreneur in 54 Million Dollar Personal Liability Claim

The NFIB Small Business Legal Center recently announced that it was coming to the defense of an entrepreneur in his lawsuit against the federal agency that destroyed his company and then came after his personal assets—despite the fact he was never accused of a crime. At the center of the case is Craig Zucker, co-founder of Maxfield Oberton and inventor of its novelty product, Buckyballs.  They are little magnetic balls that can be manipulated into various formations—often bought as gift for executives and office workers as a harmless distraction.

Of course, they are not harmless if swallowed by children. For this reason, they drew the attention of the U.S. Consumer Product Safety Commission (CPSC). In response to the Commission’s concerns, Maxfield Oberton made changes to the product’s label. The company even offered to sell the product in childproof containers, and to give the Buckyballs a bitter taste to discourage children from putting them in their mouths. But the CPSC never seriously considered those measures. Instead the Commission took the unusual step of ordering a total recall, and banning the sale of Buckyballs. This quickly led to the demise of Maxfield Oberton, which had previously thrived on the sale of Buckyballs.

The company soon went out of business. That is when CPSC turned its eye to Craig Zucker. The Commission brought an action against him seeking to hold him personal liable for the costs of the recall—an estimated 54 million dollars.

“There’s a bright, bold line between regulatory enforcement and regulatory abuse, and in this case the federal government crossed it without slowing down,” said Karen Harned, Director of the NFIB Small Business Legal Center.  “The government acted so aggressively, so abruptly, so inflexibly and so arbitrarily that the company was destroyed.  Then it took the highly unusual and, we believe, unlawful step of filing a personal lawsuit against Mr. Zucker even though no one, including the CPSC, ever accused him of committing a crime.”

“You read the news every day and find another tragic story about kids being injured by common products that the CPSC hasn’t recalled or banned,” said Harned.  “But for some reason it treated this company differently and it did so with very little justification.”

Even more dangerous for entrepreneurs, said Harned, was the agencies attempt to hold Zucker personally responsible for the cost of the recall.  “That kind of dramatic action is permissible under the law only when a corporate officer is accused of criminal wrongdoing, or where the company is clearly set up as a sham,” she said. 

Zucker is now suing the CPSC, seeking a court order preventing the Commission from going after his personal asserts. NFIB filed a motion in the U.S. Federal District Court of Maryland last week voicing small business concerns over CPSC’ conduct, and cautioning the court against accepting the Commission’s expansive veil piercing theory. As NFIB Legal Center frequently argues to the courts, it is important that judges respect corporate formalities.

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The State of Small Business in New York

Last week I had the chance to talk about the recently enacted state budget and the “state of small business” here in New York.  I appreciated the time with WCNY TV and the conversation.

The entire segment is worth a watch and you can hear some of the varied perspectives on whether folks feel New York is a better place to own and operate a business.

The State of Small Business in New York



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Taking the Fight for Fair Compensation to the California Supreme Court

As part of the NFIB Legal Center’s Just Compensation Project, we are stepping up our efforts to defend the right of small business owners to receive full and fair compensation for eminent domain takings. This is a nationwide effort. In March we filed in an eminent domain case out of Westerville, Ohio. Now our fight for full and fair compensation takes us to the California Supreme Court in Stamper v. City of Perris.

Here the government is raising a down-right Orwellian argument in justification for a low-ball compensation award. The City of Perris initiated eminent domain proceedings to take a strip of land across a commercial property, but it is insisting that it should only be required to value the land in question as if it were used for agricultural purposes. That would be one thing if that was the only potential use for the property; however, in this case the owners could have sought to develop the property—which means the property should be valued substantially higher.

But this is where the curve-ball comes. The City argues that it would never approve a development permit for the property unless the owner agreed to dedicate the very land it is trying to take here. In other words, the City thinks that it should be able to get around the requirement to value the property in light of its most profitable potential uses by insisting that it would simply require the owners to give the government the property as a condition of getting a permit approval. Of course with that rationale government could systematically undercompensate landowners in eminent domain cases. Accordingly, we joined with Pacific Legal Foundation in an amicus brief urging the Court to reject the City’s Orwellian arguments. We believe this is important because other cities throughout the country will be taking note of what happens in the California Supreme Court here.

Be sure to follow the NFIB Blog and the NFIB Legal Center Facebook page for further updates.

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A Tale of Two Reports

Yesterday, the Tax Foundation praised the recently enacted tax reform in New York.  The lowering of the corporate tax rate has rapidly moved the state up the charts.  So mission accomplished right?  New York is now competitive and “open for business”!

Not so fast.

Also released yesterday was the American Legislative Exchange Council (ALEC) annual “Rich States, Poor States” business climate analysis.  Guess where New York ranks…dead last.  Now to be fair, this analysis is looking at 2013 and does not take into account the recently enacted tax reforms.  But as we stated repeatedly, a corporate only approach to tax reform was going to leave many small businesses clinging to an unaffordable status quo.

The tax cuts that the Governor and lawmakers enacted this year are pretty narrowly tailored for manufacturers and corporations, and while NFIB/NY supported the plan, this report from ALEC should be a reminder to Albany that we’ve got a long way to go before we’re really competitive.

Frankly, until our leaders in Albany recognize that punishing income means punishing work, we’re going to remain at the bottom.  Small businesses mostly pay the income tax, not the corporate tax, and on that side of the ledger we haven’t moved the needle.

A  real economic program would seek to reduce taxes for everyone instead of picking winners and losers.  Unfortunately for small business, Albany hasn’t positively impacted them much at all recently.

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Restoring Section 179 Expensing to Meaningful Levels will Boost Small Business, Reduce Unemployment

Rarely a day passes without news reports featuring pictures of long lines of unemployed people seeking jobs. More than 10.5 million Americans were without full-time work in March, according to the Bureau of Labor Statistics. Equally disturbing was the decline among owners who had plans to create jobs, falling to a seasonally adjusted net 5 percent from 12 percent a month earlier.

There’s no better time than April’s tax filing season for small-business owners to demand that Washington, D.C. policymakers get serious about meaningful tax reform before our economy gets worse. Perhaps there is no one simple solution, but it’s certain that few solutions to the current job-killing tax code will be found by continuing the us-versus-them political fray that exists today.

Rather than trying to repair the entire code in one fell swoop, why not focus on key areas that could have an immediate favorable impact on the nation’s most effective and efficient job-creating sector. Restoring meaningful expensing levels to the U.S. Tax Code’s Section 179 deduction could not only reinvigorate small-business growth but help reduce those long unemployment lines at the same time.

A victim of recent fiscal cliff negotiations, expensing limits for property such as machinery and equipment, storage facilities and off-the-shelf software, Section 179’s benefit to small business has been unfairly targeted. Although small firms could deduct up to $500,000 worth of qualified purchases for 2013, brace yourself for next year’s tax hit; the section’s original limits of $25,000 have been reinstalled and will be in effect for 2014 expenses. Also lost will be your ability to expense certain real property.

Restoring these limits to reasonable levels would allow small businesses to plan ahead—something they cannot do now in the current uncertain political environment–and it would also simplify accounting and free up cash that could be reinvested in small businesses eager to expand.

But rather than glaring at political opponents on “the other side of the aisle,” lawmakers should fix their gaze on those long lines of people who are desperate to work and imagine them enjoying regular paychecks as employees at small businesses whose jobs now go wanting.

Allowing small businesses to plan for the future, simplify their accounting tasks and recover available cash to create new jobs is a winning combination for all Americans. Contact your representatives and senators today and urge them to support job-creating Section 179 deductions.


Employment figures ref:

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