By Christine Kummer | Senior Staff Writer
Complex business disputes are presenting the Commercial Division with increased caseloads and time-consuming innovative legal issues. In 2014, 5,763 cases were pending in the Commercial Division, an increase of 13% from 2008 (5,084 cases pending). Similarly, the number of dispositions in 2014 (3,536) increased 11% from 2008 (3,193). Moreover, the number of motions substantially increased 85%,from 4,419 motions filed in 2008 to 8,161 filed in 2014.
Chief Justice Jonathan Lippman, the Task Force on Commercial Litigation, and the Commercial Division Advisory Council recently undertook significant reforms to help maintain and improve the Commercial Division’s efficient and cost-effective resolution of business disputes in light of the influx of complex litigation. Several of the adopted reforms to the Rules of the Commercial Division of the Supreme Court (22 NYCRR § 202.70(g)) took effect April 1, 2015, including the following:
Model Compliance Conference Order. A new model compliance conference order form for optional use was adopted.
Sanctions. The preamble was amended to direct litigants and counsel to review the rules of practice of the Commercial Division regarding sanctions, including Rules 12, 13(a) and 24(d), Rule 3126 of the Civil Practice Law and Rules and Part 130 of the Rules of the Chief Administrator of the Courts.
Limitations on Depositions. Rule 11-d was added and provides limits for 10 depositions per side and 7 hours per deponent.
Responses and Objections to Document Requests. Rule 11-e requires the response to each document request to state either that production will be made or the grounds for objection with reasonable particularity. Objections should specify whether all or part of the request is being challenged, any documents being withheld and the manner the scope of production is limited. Rule 11-e provides a fixed date for document production. Additionally, for each document request, the responding party will state whether production is complete or no documents are in its possession.
Disclosure Disputes. Rule 14 as amended provides the court’s Part Rules shall govern discovery disputes and where silent, Rule 14 shall serve as default. Preference is to resolve disputes through court conference instead of motions.
The following reforms to Rules of the Commercial Division (22 NYCRR § 202.70(g))were recently adopted and will be effective December 1, 2015:
Model Status Conference Order Form. The new model status conference order form will serve to accompany the preliminary conference and model compliance conference forms. The form includes sections for history of the case, motion practice and current status of the case.
Eligibility Criteria for Cases that may be Heard. The amendment to 22 NYCRR § 202.70(b)limits the monetary threshold for arbitration proceedings to be the same threshold as the applicable County or Judicial District. Also, the amendment to 22 NYCRR § 202.70(c) adds certain home improvement contracts to matters ineligible to be heard.
Proportionality in Discovery. The amended preamble would highlight the need to encourage proportionality in discovery.
Depositions of Entity Representatives. Recently added Rule 11-d was amended to require a party who wishes to depose an entity to enumerate the matters with reasonable particularity.
Reform efforts remain ongoing, with the following proposals to the Rules of the Commercial Division (22 NYCRR § 202.70(g))pending determination:
Form of Papers. Proposed amendment to Rule 6 would require electronically submitted documents to include a bookmark listing the documents’ contents.
Alternative Dispute Resolution (ADR). Proposed amendment to Rule 3 includes that, with permission of the court, counsel for all parties may stipulate to summary jury trial in the absence of a controlling local rule.
Overall, these reforms seek to reduce filing motions where practicable, streamline motions via requested specificity or particularity and suggested forms, and avoid frivolous motions and delays. The reforms have the potential to help save litigants’ time and money, but it may be too early to predict precisely the savings versus the impact on a case. Some of the rules are still undergoing additional transformation after being recently adopted. Furthermore, some rules may alter the way litigants undergo discovery. For instance, the encouragement for proportionality in discovery may be cost-effective in terms of cutting costs for all-inclusive e-discovery searches. But depending on the parties or the case, will proportionate discovery help or hurt the parties in the long-run? Nonetheless, in this increasingly innovative and complex age of commercial litigation, the Commercial Division’s efforts to expedite and simplify processes and reduce motions will change the way that Commercial Division and business litigants resolve commercial disputes.