In late June 2012, Chief Judge Jonathan Lippman’s Task Force on Commercial Litigation released its Report and Recommendations for the Commercial Division, ((The Task Force’s 30+ page Report can be found on the New York Commercial Division website at http://www.nycourts.gov/courts/comdiv)) the culmination of the Task Force’s six-month exploration of how to better manage judicial resources of the Commercial Division by improving the Court’s operations for both the Bench and the Bar. The Report contains 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.
Procedural Reforms
Many of the recommendations in the Report involve procedural reforms to the Commercial Division Rules, the most notable being an amendment of the expert disclosure process to mirror expert disclosure in the federal courts. For example, the proposed rule would require depositions of all testifying expert witnesses and require that all expert disclosure (including identification of expert witnesses and written reports) be made no later than four months after completion of fact discovery. In addition, the Task Force recommended a modification to Rule 8 of the Commercial Division Rules requiring the parties to discuss the scope and timing of expert disclosure both prior to and at the Preliminary Conference.
Reforms to enhance efficiency were recommended which included a modification to the Commercial Division Rules to restrict the number and scope of document demands, interrogatories and the number and length of depositions (again, akin to the existing limitations in federal court). Additionally, the Report proposed that an amendment be made to the Commercial Division Rules to offer an accelerated adjudication procedure available on consent of both parties, which would have highly truncated written discovery, narrowly tailored electronic discovery, limited depositions, and other accelerated procedures.
Other proposed procedural reforms in the Report include:
- Imposing limitations to privilege logs, with recommendations of four different rubrics under which privilege logs can be limited as examples of the possible ways in which parties can stipulate to appropriate means of limiting privilege logs.
- The creation of standard forms and procedures for optional use in Commercial Division litigation to promote greater efficiency.
- Endorsement of two reforms proposed by the E-Discovery Working Group of the New York State Court System: (i) The recently adopted Rule 1(b) which requires parties to appear at the preliminary conference with counsel who have sufficient knowledge of the party’s computer systems to have a meaningful discussion of e-discovery issues, and (ii) The consideration of the use of internal experts to assist the court, lawyers, and parties with the newest opportunities and challenges presented by e-discovery.
- Improvements to courtroom efficiency by: (i) urging Justices to schedule staggered court appearances (instead of asking all lawyers on all cases to appear on a given day at the same time); (ii) utilizing letter submissions for discovery motions, (iii) conducting discovery conferences via telephone, instead of requiring the attorneys to travel to court, and (iv) encouraging judges to preside over discovery conferences.
- Encouraging an open dialogue between the Commercial Division and the Appellate Divisions, and providing appellate judges with additional exposure to commercial issues.
- The use of recent technological advancements and tools to promote greater efficiency in the Commercial Division, including the continued expansion of mandatory Electronic Filing to other counties.
- The recommendation that Commercial Division Justices be encouraged to consider monetary and non-monetary sanctions more often where parties fail to comply with case management orders and other deadlines.
Revisions to the Docket
Several recommendations were made to revise the Commercial Division docket in order to alleviate the growing number of cases and motions that the Commercial Division currently confronts. The first is the revision of the Court of Claims Act to enable the Governor to designated qualified individuals as judges assigned to the Commercial Division (with a suggestion that six new judges be appointed to the Commercial Division). The second recommendation was an increase in the monetary threshold. For example, the Task Force urged that New York County’s threshold be increased from $150,000 to $500,000 and that proportionate increases should likewise be implemented on a county-by-county basis. In addition to the foregoing recommendations, the Task Force calls for periodic review of the cases eligible for Commercial Division designation (and adjustments as necessary).
Early Case Resolution Initiatives
Two initiatives were proposed which the Task Force believes will aid in the early resolution of cases. The first initiative is the implementation of a Pilot Mandatory Mediation Program, which the Task Force proposed be first implemented in New York County. The rule as proposed would require that every fifth newly assigned case to the New York County Commercial Division be required to be mediated within 180 days of assignment to the Commercial Division unless (a) all parties stipulate that they do not want the case mediated or (b) a party makes a showing of “good cause” as to why mediation would be ineffective or otherwise unjust. The second initiative proposes that Rules 7 and 8 of the Uniform Rules be amended to require the parties and the Court to address, at the Preliminary Conference, whether any particular limited disclosure would help facilitate settlement discussions or mediation.
Additional Judicial Support
The Task Force endorsed providing additional Law Clerks for all Commercial Division Justices, similar to the law clerks provided to federal judges. The Report noted that New York County Justices currently have at least one long-term Law Clerk and have additional law clerks recruited and hired directly out of law school which serve for a shorter period of time. It is suggested that this program, which is akin to the federal program, be expanded to other counties that have demanding caseloads.
Creation of a panel of “Special Masters” whom the Justices of the Commercial Division can appoint on consent of all parties to “hear and report” on discovery and other matters was also recommended. It is proposed that the panel be drawn from seasoned New York commercial litigators. It was also recommended that the court system rehire Judicial Hearing Officers (JHOs) specifically assigned to the Commercial Division to assist the Justices with the Commercial Division’s growing docket.
In order to guide the implementation of the recommendations and to periodically review the long-term strategic goals of the Commercial Division, the Task Force proposes that the Chief Judge appoint a formal statewide Advisory Council on the Commercial Division. It is anticipated that many of the recommendations will be adopted in the near future.