Michael Farinacci, Staff Attorney

On December 30, 2021, Administrative Judge Deborah A. Kaplan of the First Judicial District announced that, for judicial economy, any pending actions or future actions commenced pursuant to The Securities Act of 1933 (15 U.S.C. § 77a et seq) shall be assigned to the Hon. Andrew Borrok of the New York County Commercial Division.  These types of cases, by their nature, are typically assigned to the Commercial Division when filed in state court.  Although similar consolidation orders have been issued in the Commercial Division in the past—for example, all new residential-mortgage-backed-securities cases were consolidated in Part 60 for a period of time—this appears to be the first time that all cases involving a particular statute have been consolidated before a single Commercial Division justice.  In order to effectuate the consolidation, when e-filing a new Securities Act of 1933 matter, practitioners should select “Securities Act of 1933” as the case type from the “Other Commercial” drop-down menu.  For pending Securities Act of 1933 cases, practitioners should e-file for Judicial Intervention.  When prompted with the question “Will the ‘Nature of the Action’ stay as . . .”, “No” should be selected and the case action type should be updated to “Securities Act of 1933.” 

In the wake of the COVID-19 pandemic (“COVID”), a common question that arises is whether commercial leases are enforceable when COVID and subsequent governmental responses frustrate the purpose of the lease or render its performance impossible.  There is not a one-size-fits-all answer, as the answer will turn on the underlying facts, but the lack of a contractual force majeure provision in the lease will not bar the use of common law defenses.  This is evidenced in a recent Bronx County Commercial Division decision by Justice Eddie J. McShan in 1877 Webster Ave. Inc. v. Tremont Ctr., LLC.

On September 23, 2020, Chief Administrative Judge Marks amended Commercial Division Rule 11-g and the Division’s Standard Form Confidentiality Order (“SFO”) to allow parties to designate certain documents as highly confidential for attorney’s eyes only (“AEO”). Such a designation already exists in federal court, and it will be useful in the Commercial Division in matters involving particularly confidential issues such as the disclosure of confidential business information between competitors and disclosure of trade secrets.

In mid-June, Chief Judge Janet DiFiore appointed the Commission to Reimagine the Future of New York’s Courts, and charged it with examining technological, regulatory, and other long-term innovations for New York Courts.  Additionally, in the short-term, it was to provide recommendations for resuming in-person court operations amid the COVID-19 pandemic. 

On June 23, 2020, Chief Administrative Judge Marks approved the repeal of Rule 23 of the Commercial Division Rules.  Rule 23 (known as the “60-Day Rule”) required movant’s counsel to notify the court and other parties whenever a motion had not been decided within 60 days of its submission or oral argument. 

On June 16, 2020, Chief Administrative Judge Marks approved an amendment to Rule 1 to the Commercial Division Rules.  The amendment is designed to allow counsel to request the court’s permission to appear though videoconferencing and other similar technology.

Chief Judge Janet DiFiore and Chief Administrative Judge Lawrence K. Marks announced that courts in the Fifth Judicial District, Sixth Judicial District, and Seventh Judicial District will enter Phase II of re-opening on June 3, 2020, and it will expand to the Eighth Judicial District and Fourth Judicial District on June 5, 2020. 
 

On March 20, 2020, in order to limit court operations in light of the evolving COVID-19 emergency, Governor Cuomo issued Executive Order 202.8.   That order, among other things, tolls through April 19, 2020 “any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding, as prescribed by the procedural laws of the state[.]”  This order means that parties who are facing a deadline to file a civil action have an extension up and until April 19, 2020 in order to do so, unless a further extension of this deadline is granted.

2019 was a momentous year for the Commercial Division.  Below are the top developments related to the Commercial Division that our blog covered in 2019.

The final month of summer has seen a flurry of rulemaking activity with the Commercial Division Advisory Council (the “Advisory Council”) proposing four changes to the Commercial Division Rules. The Office of Court Administration has requested public comment on each proposal, and we will provide an update if any of the proposed amendments are adopted.

The arrival of the new year is a bittersweet time for the Commercial Division as it bids farewell to two of its most senior judges: Justice Charles E. Ramos and Justice Eileen Bransten.  Notably, both will be staying on to serve the Court as Judicial Hearing Officers.

On July 5, 2018, Justice Saliann Scarpulla of the Commercial Division granted a motion to dismiss by All Nippon Airways, Co. Ltd., ANA Aircraft Technics, Co., Ltd., ANA Base Maintenance Technics, Co., Ltd., ANA Holdings, Inc., and All Nippon Airways Co., Ltd. (collectively “ANA”) in Kyowa Seni, Co. v. ANA Aircraft Technics Co.[i], ruling that the Court lacked both general and specific jurisdiction over ANA.

The New York Court of Appeals, in Congel v. Malfitano,[1] recently ruled that the “Poughkeepsie Galleria Company” (the “Partnership”) was not an at-will partnership and that therefore Defendant Marc Malfitano’s (the “Defendant”) unilateral dissolution of the partnership breached the partnership agreement.  In addition, under Section 69 of the New York Partnership Law, the Court sustained the Appellate Division’s valuation of the Defendant’s partnership interest, including application of a minority discount.  The Court modified the order on appeal, holding that the Second Department erred in awarding legal fees in contravention of the American Rule on attorneys’ fee awards.