
One of the ongoing goals of the New York State Office of Court Administration (“OCA”) is to periodically update and refine the jurisdictional criteria for the Commercial Division to ensure that it exclusively handles complex commercial matters. As part of this effort, OCA has proposed an important change aimed at establishing a monetary threshold for cases seeking equitable or declaratory relief.
Currently, a case that is presumptively considered “commercial” and seeks equitable or declaratory relief is not required to meet any monetary threshold. However, on September 20, 2024, the OCA issued a Request for Public Comment on a proposal to amend 22 NYCRR § 202.70 (a) and (b), based on recommendations from the Commercial Division Advisory Council (“CDAC”). These proposed amendments would introduce a monetary threshold specifically for cases seeking equitable or declaratory relief within the Commercial Division. While the change may seem small, its implications for practitioners and litigants would be substantial.
The proposed amendments include minor but significant adjustments to the language of the rule. The revised language would require that cases seeking equitable or declaratory relief demonstrate that the value of the object of the action meets the prescribed monetary threshold. Specifically, the amended rules would read as follows:
(a) Except as set forth in paragraphs (4), (5), (11) and (12) of subdivision (b) of this section, the monetary thresholds of the Commercial Division, exclusive of punitive damages, interest, costs, disbursements and counsel fees claimed, are established as follows:
Albany County $50,000 Bronx County $75,000 Eighth Judicial District $100,000 Kings County $150,000 Nassau County $200,000 New York County $500,000 Onondaga County $50,000 Queens County $100,000 Seventh Judicial District $50,000 Suffolk County $100,000 Westchester County $100,000 (b) Commercial Cases
Actions in which the principal claims involve or consist of the following will be heard in the Commercial Division provided that the monetary threshold is met or, and for such actions that seek equitable or declaratory relief, satisfaction of the applicable monetary threshold shall be measured by the value of the object of the action.
By implementing this amendment, all cases seeking equitable or declaratory relief would be required to substantiate that “value of the object of the action” meets the threshold established for the Commercial Division. The term “value of the object of the action” is a legal standard commonly used in federal courts to determine whether a case meets the monetary requirements for diversity jurisdiction. The CDAC has indicated that applying this standard would not pose significant difficulties, as prior case law, notably Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333 (1977), provides a well-established framework for evaluating the monetary value of such claims.
If enacted, judges in the Commercial Division would likely rely on federal case law to assess whether the value of the action meets the monetary threshold. In the Second Circuit, that value is typically determined from the plaintiff’s perspective, based on the value of the benefit the plaintiff seeks, the right being protected, or the injury being avoided.
Notably, the proposed amendment does not apply to all commercial cases. It explicitly exempts certain categories from the new monetary threshold requirements, including shareholder derivative actions, commercial class actions, actions seeking corporate dissolution, and Article 75 proceedings related to international arbitrations. These exceptions reflect the unique nature of these types of cases, which generally involve complex legal and factual issues that warrant consideration in the Commercial Division, irrespective of the monetary value involved.
The rationale for the proposed change is straightforward. The Commercial Division Justices in New York County have expressed concerns that the absence of a monetary threshold for equitable and declaratory relief cases has allowed certain matters that do not align with the Commercial Division’s intended scope to draw disproportionately on its resources. By establishing clearer jurisdictional limits, the proposed amendment aims to ensure that the Commercial Division remains focused on the high-stakes, complex commercial matters it was designed to handle.
In response to the OCA’s request for public comment, the New York City Bar Association raised two primary points. First, it recommended that only subsection (b) be modified to include the following clarification:
Actions in which the principal claims involve or consist of the following will be heard in the Commercial Division, provided that (i) the monetary threshold is met, or (ii) equitable or declaratory relief is sought and the value of the object of the action meets the monetary threshold, except that for actions brought under paragraphs (4), (5), (11), or (12) herein, the value of the object of the action need not meet the monetary threshold.
This proposed revision aims to simplify the process by limiting changes to subsection (b) alone, which it argues would streamline the amendment. The New York City Bar also raised concerns regarding the practical application of the term “value of the object of the action,” seeking clarification on how plaintiffs should substantiate this value and whether procedural devices such as the Request for Judicial Intervention would need modification.
With the period for public comment now closed, the OCA will consider these responses as it finalizes the proposed amendments. Should the amendments be enacted, they would have significant implications for practitioners in the Commercial Division. Currently, a presumptively commercial case seeking equitable or declaratory relief does not need to demonstrate the value of its requested relief. Under the new rule, however, litigants would be required to provide more detailed pleadings to establish that the value of their case satisfies the monetary threshold.
Moreover, questions remain regarding how Commercial Division judges will interpret and apply the “value of the object of the action” standard. Whether judges adopt their own interpretation or align more closely with federal precedent remains an open question. Regardless, if this rule is adopted, it will certainly reshape the practice of law within the Commercial Division, making it crucial for litigants to consider not only the substantive legal merits of their cases but also the monetary thresholds that will govern jurisdictional eligibility.
In summary, the proposed amendment is a critical step in refining the jurisdictional boundaries of the Commercial Division. While the change may appear modest, its potential impact on practice in the Division would be substantial. Practitioners should stay attuned to further developments as this proposal moves toward implementation, as it may require significant adjustments in litigation strategy and case preparation within the Commercial Division.