With the recent adoption of new Commercial Division Rules, and several others proposed and open for public comment, practicing in the Commercial Division is likely to become more akin to Federal Courts, adding greater speed and efficiency to the litigation process.
In June 2012, Chief Judge Jonathan Lippman’s Task Force on Commercial Litigation released its Report and Recommendations for the Commercial Division, containing widespread suggestions including procedural reforms, revising the Commercial Division’s docket, proposals to facilitate early case resolution and suggestions to provide more support to Commercial Division Justices. Recently, some of the recommendations have been adopted, and many others are proposed, pending public comment. Below is an overview of the recently adopted or proposed Rules that will add greater speed and efficiency in adjudicating cases in the Commercial Division.
On June 2, 2014, Rule 9 relating to the use of accelerated adjudication procedures in the Commercial Division becomes effective. Upon written consent of the parties, accelerated adjudication procedures will be applied, which would include truncated written discovery (with no more than seven interrogatories and five requests to admit), narrowly tailored electronic discovery, limited depositions, and other accelerated procedures.
Specifically, under the accelerated process, all pre-trial proceedings (including all discovery, pre-trial motions, and mandatory mediation) must be completed within nine months from the date of filing a Request for Judicial Intervention. In addition, the parties shall have deemed to waive the following: (1) objections based on lack of personal jurisdiction or forum non conveniens; (2) the right to trial by jury; (3) the right to recover punitive damages; (4) the right to interlocutory appeal; and (5) the right to discovery, except that specifically provided for in the Rule or as the parties otherwise agree. Similar to a choice of law provision in a contract, the parties may consent to the accelerated adjudication process at the time of entering into a contract by using specific language, such as:
Subject to the requirements for a case to be heard in the Commercial Division, the parties agree to submit to the exclusive jurisdiction of the Commercial Division, New York State Supreme Court, and the application of the Court’s accelerated procedures, in connection with any dispute, claim or controversy arising out of or relating to this agreement, or the breach, termination, enforcement or validity thereof.
Likewise on June 2, 2014, Commercial Division Rule 11-a will become effective, which relates to the use of interrogatories in commercial cases. Under Rule 11-a, the number of interrogatories is limited to 25, including subparts, unless a different number is specified in the preliminary conference order. Additionally, the Rule further limits to the scope of interrogatories to the following:
- Name of witnesses with knowledge of information material and necessary to the subject matter of the action;
- Computation of each category of damage alleged; and
- The existence, custodian, location and general description of material and necessary documents, including pertinent insurance agreements, and other physical evidence.
Of course, those who regularly practice in Federal Court will note that these limitations correspond with similar limitations imposed within the Southern District of New York.
Staggered Court Appearances
In April 2014, the Commercial Division Advisory Council recommended the adoption of a new Rule of the Commercial Division providing for staggered court appearances scheduled by a judge, instead of asking all lawyers on all cases to appear on a given day at the same time. Specifically, under the proposed Rule, “Each court appearance before a Commercial Division Justice for oral argument on a motion shall be assigned a time slot,” with the length of the time slot left up to the discretion of the court. The proposal further provides that all parties must appear at the appointed time and date (even those parties not directly involved in the matter before the court), and each attorney who receives notification of an appearance is responsible for notifying all other parties via email of the assigned date and time.
The proposal is aimed at increasing courtroom efficiency and lowering litigation costs of the parties by decreasing the lawyers’ time waiting for a matter to be called by the court. The proposed Rule is open for public comment until May 30, 2014. Although counsel who practice on Long Island are not typically hampered by lengthy delays for appearances, the implementation of staggered court appearance schedules will be a relief for counsel who appear in the Commercial Division within New York City, where it is not uncommon that routine appearances extend for hours on end.
Modification of Privilege Log Practice
In April, the Commercial Division Advisory Council also recommended the adoption of a new Rule modifying privilege log practice in commercial cases. Currently, the CPLR § 3122 mandates that a party prepare a privilege log when withholding documents, setting forth: (i) a separate entry for each document, (ii) the basis of privilege, and (iii) the type, general subject matter, and date of the document, along with such other information as is sufficient to identify the document.
Under the Proposed Rule, however, the parties would be expected “to agree, where possible, to employ a categorical approach to privilege designations.” The proposal would treat uninterrupted email chains as a single document. If a party objects to the categorical approach and insists on a document-by-document log, the producing party, “upon a showing of good cause, may apply to the court for the allocation of costs, including attorney’s fees incurred.” Where a categorical approach is used, the responsible attorney for the producing party must provide a certification under 22 NYCRR § 130-1.1-a setting forth specific facts supporting the privileged status of the materials in each category. The Proposed Rule seeks to promote efficiency during pretrial disclosure and to reduce the time and costs associated with preparing privilege logs, and is open for public comment until June 2, 2014.
These collective reforms will enhance the efficiency of Commercial Division cases.