Stay Up to Date on Recent Changes to New York’s Commercial Division Rules – CLE Held on Division Rules Changes and Application of Commercial Rules to Other Court Parts
A CLE was recently presented by the Columbian Lawyers Association of the First Department on February 3, 2021 to offer guidance on the latest rule changes affecting the New York State Courts and the Commercial Division in particular. At that program, Commercial Division Blog editor Stephen P. Younger of Patterson Belknap, along with Rosanne E. Felicello, Michael James Maloney, and Kristie Blase of Felicello Law P.C., gave guidance to judges and litigators who focus on commercial disputes, as well as many who practice in other court parts.
Amendments to General Part Rules
The key topic of the evening was the New York State Unified Court System’s February 1, 2021 adoption of thirty of the Commercial Division rules for use in parts outside the Division. Spirited discussion surrounded how those rules affect New York practice. The panel and the attendees discussed which of the Division’s rules ought to apply in noncommercial cases. For example, Rule 11-d—which limits the length of depositions—may not make sense for all personal injury suits, particularly complex, multi-party cases in which multiple days of depositions are often standard practice. Younger noted, however, that parties can agree to vary the seven-hour limit by stipulation or by court leave when taking into account applicable factors.
Other rules now extended more broadly into other court parts include TRO practice, material fact statements on summary judgment motions, and meet and confer obligations in discovery disputes. The panel observed that these rules have been embraced by commercial litigators but may take some time to be digested and adapted in other parts of the New York court system. It was noted that many judges will handle this transition gradually—even though the new rules were adopted effective February 1.
For more detail on these changes, see Gizele Rubeiz & Jacqueline L. Bonneau, Commercial Division Rules Expanded to General Civil Practice in New York Effective February 1, 2021, N.Y. Com. Div. Blog (Feb. 3, 2021), https://www.pbwt.com/ny-commercial-division-blog/commercial-division-rules-expanded-to-general-civil-practice-in-new-york-effective-february-1-2021/.
Changes to Commercial Division Rules
Another hot-button issue was the Commercial Division’s adoption of Rule 6, which requires filings to be hyperlinked to internal documents, papers previously filed, and case law. On the one hand, Felicello commented that this rule is likely to be especially burdensome on solo practitioners and small firms, and will drive up expenses. Further, hyperlinked documents are not made part of the record under Rule 6(b), which raises questions about how this will affect appellate practice. On the other hand, Younger commented that hyperlinking can be particularly helpful for the judiciary, particularly during the Covid-19 pandemic when access to legal authorities and court records is made more difficult. It is hard to predict how this development will play out in practice, and this rule may require fine-tuning down the road, particularly before it is applied outside the Commercial Division.
Maloney discussed the new change to Rule 11, which builds an attorneys-eyes-only provision into the Division’s standard protective order in narrow cases, typically involving highly sensitive information requested by competitors. This update should help free up attorney time and pass savings on to clients by eliminating the need for heavy negotiation over confidentiality issues.
Rule 23 has also been abolished. That Rule required a moving party to send the court a letter sixty days after a motion had been made if no decision had been issued. Younger termed this now-repealed rule one of “the most ignored and disfavored rules among both practitioners and the Bench.” And the panel concurred that all are better off without this rule.
Effect of Covid-19
The panel also discussed the impact of the Covid-19 pandemic on practice in the First Department. Blase described the adoption of video appearance rules, which attorneys seem to be enjoying because it is much more efficient and saves money for clients. But while the video method will likely change practice forever, practitioners are still adjusting to the virtual courtroom. Younger observed that intangibles like body language, nuances, and which way the wind is blowing are harder to pick up on virtually. For that reason, practitioners cannot wait to return to the courtroom to argue substantive motions.
The Covid-19 pandemic has also created budget shortfalls for the Unified Court System. In addition to the retirements of senior judges, these budget cuts have affected the number of available support staff and Judicial Hearing Officers. Court referees are not as available to supervise discovery, which may lead to future appointments of pro bono referees, such as was recently ordered by Justice Andrea Masley. Younger observed that the general feeling among commercial practitioners is that case demands are growing in the Commercial Division whereas resources to support the Division’s Justices are becoming less available. Judges have less staff for motion work than they had two or three years ago. Combined with the two-month filing delay caused by the pandemic, the Commercial Division is suffering backlogs. Overall, in Younger’s view, this may lead to more use of alternative dispute resolution practices, such as mediation and private judging. Felicello suggested that more resources need to be allocated in order to preserve the Commercial Division’s role as a premier destination for commercial litigation.
Developments on the Horizon
Justices Marcy Friedman and Peter Sherwood are retiring from the bench this year. Justice Robert Reed was recently appointed to the Commercial Division. And there may be more changes of this nature on the horizon.
Younger noted that the Bar deeply appreciated the patience and adaptability that the Commercial Division Justices and other judges in the New York court system displayed during the pandemic.
The bench and practitioners alike have embraced virtual modes given the pandemic. Younger observed that many lawyers believe that these types of developments will continue to flourish when the Covid-19 crisis subsides as videoconferencing has been embraced by the courts, by lawyers, and by their clients. Nonetheless, the Bar is eager to return to in-person arguments when possible. Felicello concluded by noting that it is always a pleasure to work with former colleagues, and she hopes they have the opportunity to do so again in the future.
For further information on this timely program, visit the Columbian Lawyers Association’s website.
By Julia M. MacAllister and Stephen P. Younger