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Commercial Division Promulgates New Rule Regarding Mandatory Settlement Conferences

On January 7, 2022, the Commercial Division amended Rule 30 of section 202.70(g) of the Rules of the Commercial Division of the Supreme Court.  Rule 30 is entitled “Settlement and Pretrial Conferences,” and the amendment is effective as of February 1, 2022.  The amendment adds a new provision to Rule 30 that provides for mandatory settlement conferences in Commercial Division cases following the filing of a Note of Issue. 

The amendment maintains Rule 30(a), which provides that “[a]t the time of certification of the matter as ready for trial or at any time after the discovery cut-off date, the court may schedule a settlement conference which shall be attended by counsel and the parties, who are expected to be fully prepared to discuss the settlement of the matter.” 

The new provision, which will become Rule 30(b), greatly expands the scope of Commercial Division cases for which settlement conferences will be held.  The amendment provides that unless a case is “exempted . . .the parties in every case pending in the Commercial Division must participate in a court-ordered mandatory settlement conference (MSC) following the filing of a Note of Issue.”  Under the new provision, there are four tracks pursuant to which parties can choose to proceed to a MSC. The tracks are:

(A) A settlement conference before the assigned justice or another judge pursuant to Commercial Division Rule 3(b).

(B) The court will refer the case to the Judicial Hearing Officer/Special Referee office for assignment of a Judicial Hearing Officer or Special Referee to conduct the MSC.

(C) The assigned justice will refer the case to the ADR coordinator or other designated court official in the judicial district where the case is pending for assignment, at no charge to the parties, of a neutral selected from the roster of neutrals or mediators under Part 146 of the Rules of the Chief Administrative Judge. If the parties wish to continue talks with the neutral beyond the initial conference, an arrangement will have to be made to retain such neutral at terms agreed to by the neutral and the parties.

(D) The parties may agree to engage a private neutral.[1]

As amended, Rule 30(b) further explains that “[i]f all parties have agreed upon the settlement conference track that they prefer, they may file a joint request with a statement of preferred procedure for MSC. If the parties do not agree, they must file separate requests with statements as to their preference for a MSC track. The parties’ preferences would ordinarily be given presumptive weight.”

In addition, the amendment addresses other specifics of the MSC process.  For example, Rule 30(b)(2) states that the “MSC shall be attended by a person with knowledge of the case and authority” to settle it, and Rule 30(b)(5) provides for confidentiality of the MSC.  Rule 30(b)(4) clarifies that MSC is mandatory for all Commercial Division cases, “unless the assigned justice to the case, for good cause shown, exempts the case from MSC[.]”

With the inclusion of the amendment as Rule 30(b), the provisions of Rule 30 that are currently entitled Rules 30(b) and 30(c) will become Rules 30(c) and 30(d).

Prior to its adoption, the amendment was recommended to the Commercial Division Advisory Council by the Subcommittee on Procedural Rules.  The Subcommittee explained that the amendment is aimed at recognizing: “a) the need to respect the authority and discretion of the justice assigned to each case; (b) the benefit of allowing the parties and counsel to provide input to the assigned justice as to which settlement conference procedure they think will be best suited to their particular matter; and (c) [Office of Court Administration] budget constraints that preclude the hiring of additional settlement neutrals.”[2]

[1] Rule 30(b)(1)(A)-(D).

[2] Memorandum from Subcommittee on Procedural Rules, entitled “Proposal to amend Commercial Division Rule 30 to provide for a mandatory settlement conference,” dated September 25, 2020.