WHAT'S NEW IN THE COMMERCIAL DIVISION

By: Hon. Ira B. Warshawsky, J.S.C. (Ret.)
April 1 2014,

In 2012, Chief Judge Jonathan Lippman created the Task Force on Commercial Litigation in the 21st Century to provide practical proposals that would have a lasting impact on commercial litigation in New York. The Task Force had an interdisciplinary make up of practitioners, academics and current and retired judges of the Commercial Division. It was co-chaired by Judge Judith S. Kaye and Martin Lipton of Wachtell Lipton.

Many of their recommendations, as found in their report of June, 2012 would require additional funding (at a time when the court system was, and still is, under severe financial restraints); while other recommendations did not have a budgeting impact.

One suggestion supports the change in Expert Disclosure which has now been accomplished.

Another suggestion, which recently became part of the rules was to raise the monetary threshold in NY County to $500,000.

Its impact will not be felt immediately, but eventually it will dramatically cut down on the number of cases in Manhattan's Commercial Division.

In another attempt to cut down on the number of cases in NY County's Commercial Division, a pilot program will be started shortly that will require that every fifth case be sent to mediation to be mediated within 180 days of being assigned to the Commercial Division. Will the practitioner revolt against this rule? Will Counsel choose to avoid the Commercial Division rather than gamble on mediation?

There are ways to avoid it, yet remain in the Commercial Division. The parties may stipulate that they don't want mediation or a party may show by good cause as to why mediation would be ineffective “or otherwise unjust”. Only time will tell of the impact of this project and will it be the precursor of such projects in all our counties as have prior Commercial Division rules (TRO 24 hour notice).

One thing is clear, mediation, be it chosen voluntarily or mandated by the court system, is a vital part of the future of commercial litigation in New York. The system will collapse under its own weight if more cases do not move out of the system and into an ADR format.

It should be understood that prior to the proposed pilot project, a Commercial Division Judge could mandate mediation (without the parties' consent) or counsel could request it, pursuant to Rule 3. Of course that was with an uncompensated mediator. I am surprised that that part of the rules has yet to be amended in that the Commercial Division panel of mediators is compensated for its efforts.

Another new matter on the horizon is the proposed new Preliminary Conference Form for use in the Commercial Division. The proposed form was circulated from the office of the Chief Administrative Judge in early December requesting comment no later than Feb. 3, 2014. It was composed by the Commercial Division Advisory Council's Subcommittee on Best Practices and Judicial Case Management Co-Chaired by Hon. Eileen Bransten and Roberta Kaplan

Some changes are simplistic, an expanded area for appearances of counsel and parties and a description of the case, an area which many judges had expanded on their own without a unified form.

We now will also have a reference to a Confidentiality Order Sec. (II) whether it is needed and what the parties have done to enter into such an agreement.

In the area of basic discovery (Bills of Particulars, Document Production and Interrogatories) there is now a reference to the Commercial Division Rules [http://www.nycourts.gov/rules/trialcourts/202.sht/#70}. There is also a section that sets forth the dates for depositions (party and non-party.

Now let's take a look at a very serious new clause IV(7) Electronic Discovery. Subsection 7(c) in one form or another has been around for quite a while. It covers Preservation, Production, Identification and Redaction of Privileged Electronic Data, Clawback and Costs. The break out of these subsections ((c)(i) – (c)(v)) is deserving of your attention and will be very helpful to you in analyzing your case.

The sections that may be a wake-up call to many practitioners are 7(a) and 7(b). You must state if there is Electronic Discovery in your case (Yes ____ No ____ Not Sure ____) and then “certify” whether you have had the required “Meet and Confer” conference, the dates of the conference and whether you reached an agreement.

This document is then So Ordered by the Court. What is missing from my draft copy is a place for the signatures of counsel which some stickler might consider necessary for enforcement by the court against an attorney.

In a prior article, I discussed the new Expert Discovery rule found in the revised Commercial Division Rules (13(c)). Section IV (9) would now bring the rule, in full force and effect, into the Preliminary Conference Order. It does so by restating it and giving the parties the opportunity to object to it or to its timetable as found in Rule 13(c) and directs the parties to request a court conference to discuss any objections to the rule or its procedural format.

Far too many lawyers, after receiving the Preliminary Conference Order, file it in their obligation binder and never look at it again. Often at times it is a big mistake to do that and such an error could be magnified in the future assuming the new format is put into effect.

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Hon. Ira B. Warshawsky, is a retired Justice of the Supreme Court, Nassau County, Commercial Division. He is a member of NAM's (National Arbitration and Mediation) Hearing Officer Panel and is available nationwide for arbitrations and mediations. For the third year, he was voted a Top Ten Arbitrator in the 2016 New York Law Journal Reader Rankings Annual Survey, and was also named a National Law Journal 2016 Alternative Dispute Resolution Champion, as part of a select group of only 48 nationwide. Judge Warshawsky is Of Counsel to Meyer, Suozzi, English & Klein, P.C., in Garden City, NY.

Click here to view Hon. Ira Warshawksy's resume

For any questions or comments, please contact Jacqueline I. Silvey, Esq. / NAM General Counsel, via email at jsilvey@namadr.com or direct dial telephone at 516-941-3228.