Civil Justice Playbook: New York State's Commercial Division – Ideal for Resolving Complex Disputes

Thursday, September 6, 2018 - 09:18

 

The Commercial Division Advisory Counsel shapes the rules with the times.

There was a time when New York did not offer litigants an adequate forum for resolving complex commercial disputes. As Robert L. Haig wrote in the 4th Edition of Commercial Litigation in New York State Courts: 

"As a result, many businesses were turning to the federal courts ... as well as to the courts of other states such as Delaware and to private dispute resolution. In order to remain the commercial, financial, and banking capital of the world, New York had to have a viable public court system."

Things have changed dramatically, and 1995 marked a watershed in the history of the New York State court system. In 1995, former Chief Judge Judith Kaye implemented a division of the State Supreme Court designed specifically for commercial cases. The program was resoundingly successful, and now, 23 years later, the Commercial Division spans 10 counties around the state and is widely recognized as among the world’s foremost venues for adjudicating complex commercial disputes. 

The Division distinguishes itself through active, hands-on, case management jurists who are experts in commercial law and the availability of appropriate court resources. But it is also unique by dint of its bench-bar collaboration, which assists the Division in addressing the ever-changing landscape facing commercial litigants. In 2012, consistent with this collaborative spirit, the court system empaneled a bench-bar task force to study changes in commercial litigation and recommend a systemic overhaul of the Commercial Division and its practices to keep pace. The Chief Judge’s Task Force on Commercial Litigation in the 21st Century issued an extensive report, which detailed its findings and recommendations (bit.ly/CommLitTaskForce). Among these was the creation of the Commercial Division Advisory Council, a permanent body composed of judges, corporate in-house counsel and veteran commercial practitioners. The Council’s mandate is straightforward: to advise on all matters involving and surrounding practice in the Division.  

Since 2013, the Council has crafted a number of amendments to the Rules of the Commercial Division of the Supreme Court (“Statewide Rules”), see 22 N.Y.C.R.R. § 202.70, which were adopted through a series of administrative orders. These Statewide Rules augment significantly those contained in New York’s ubiquitous Civil Practice Law and Rules. For example: 

  • Proportionality: The Preamble to the Statewide Rules confirms that principles of proportionality apply to discovery. 

  • Optional accelerated adjudication: Parties may consent to streamlined procedures designed to make a case trial-ready within nine months.

  • Robust expert disclosure: Expert disclosures now must be accompanied by a detailed written report, and experts are now expressly subject to deposition. 

  • Entity depositions: A discovery notice issued to an entity may include a list of matters on which the entity will be questioned, and if the notice does not identify a specific designee to testify on the entity’s behalf, the entity must designate the specific individual(s) prior to the deposition. The individual(s) designated must testify about information known or reasonably available to the entity. 

  • Deposition limits: The number of depositions that may be taken in a case is presumptively limited to 10-per-side, and depositions are presumptively limited to seven hours per deponent. 

  • Limits on interrogatories: Interrogatories are presumptively limited to 25, including subparts, and are further limited during discovery to names of witnesses, computation of damages and identification of documents. Contention interrogatories may be served only at the conclusion of discovery. 

  • Streamlined privilege logs: Parties may use categorical designations rather than individually listing each privileged document. A litigant who insists on a document-by-document listing may be ordered to bear the cost of its preparation, including attorney’s fees.  

  • Tailored responses to document requests: Boilerplate objections are no longer permitted. Parties must state with specificity the nature of their objections, as well as whether and to what extent the objections interposed will curtail the scope of the requested production. 

  • Quick resolution of discovery disputes: Prior to filing a discovery motion, parties must consult in good faith, and each party may submit to the court a three-page letter outlining the dispute for immediate resolution. 

  • Standard form of confidentiality order: At the election of the presiding justice, the Division’s standard form of confidentiality order will govern the parties’ exchange of confidential information, including the mechanism for e-filing confidential documents under seal. 

  • Settlement conference before a different judge: A formal mechanism allows parties to request jointly that a justice other than the justice assigned to their case hear a settlement conference. 

  • Testimony by affidavit: The Court may require that direct testimony of a party’s own witness in a non-jury trial or evidentiary hearing be submitted in affidavit form.  

  • Time limits on trials: The Court may limit the total number of trial hours permitted for each party. 

The Commercial Division’s procedures have been designed not only to respond to the needs of the business community, but to make the business litigation process more predictable, practical and cost-effective, thus providing a more hospitable and attractive environment for business litigation in New York courts. 


Jonathan D. Lupkin is the founding member of Lupkin PLLC, a Manhattan-based litigation boutique focusing on commercial litigation in New York’s Commercial Division and its federal courts. He is also a member of the Commercial Division Advisory Council and co-chair of the Advisory Council’s Subcommittee on Procedural Rules to Promote Efficient Case Resolution. Reach him at lupkinpllc.com

Melissa Faragasso, a summer associate with the firm, assisted with the preparation of this article.