In our last “Check the Rules” post back in December, we noted the recent additions to the Manhattan Commercial Division bench, Justices Andrew Borrok and Joel M. Cohen, and promised to report back in early 2019 on any notable practice rules in their respective Parts.

My colleague Viktoriya Liberchuk’s perceptive post last week on the recent trend in the Commercial Division (and beyond) to formally encourage in-court “at bats” for young lawyers cited two specific rules from the newly-published “Practices and Procedures” for both Justice Borrok and Justice Cohen, both of whom encourage and even incentivize the “less senior attorney” or the “lawyer out of law school for five years or less” to argue motions before them.

In addition to advocating for the development of junior associates, Justice Borrok’s individual practice rules also suggest that he’s an advocate for the use of technology in the practice of law, or at least in his Part.  In his one and only published decision in 2019 thus far, Ostro v Ostro, Justice Borrok twice ordered the parties to comply with the court’s e-filing procedures, which is the subject of an entire section of his practice rules entitled “Electronic Filing.”

Justice Borrok has a handful of other techie practice rules worthy of note:

Be sure to “bookmark” your briefs and “hyperlink” your references to case law, etc.  Justice Borrok requires strict adherence to the requirement in Commercial Division Rule 6 that all briefs “shall include bookmarks providing a listing of the document’s contents and facilitating easy navigation by the reader within the document.”  He also “strongly encourages” the use of hyperlinks within documents submitted to the court.

Make sure you’re registered for “eTrack.”  As noted in Justice Borrok’s practice rules, as well as in the New York State Unified Court System’s description of the service, “eTrack is a case tracking service which enables you to track active Civil Supreme Court cases from all 62 counties of New York State.”  Justice Borrok requires that “parties and/or their counsel” litigating in his Part be registered for eTrack.

Check in at the “kiosk” outside the courtroom before appearing for a conference.  There’s a kiosk located near the courtroom entrance of Part 53.  Counsel are required to check in by entering the index number of their case, select and print the appropriate conference form(s), and fill them out before entering the courtroom.  By the way, be sure to set specific discovery dates in your proposed conference orders.  Open-ended “within 45 days”-type deadlines won’t cut it.

Submit your trial documents on a “flash drive.”  If you’re headed to trial before Justice Borrok, be sure to submit all your trial documents — including marked pleadings, prior decisions, notices to admit, deposition transcripts, and the like — “via flash drive prior to the hearings or start of trial.”

Be sure to check back with us in the coming months for notable decisions coming out of the newly-constituted Parts 3 and 53 in the Manhattan Commercial Division.

Want more tips on New York practice and procedure? Subscribe to the New York Commercial Division Practice blog and receive an email notification when a new post is published.

 

Tired of printing hundreds of thousands of documents and carrying numerous boxes of documents to court? The New York Commercial Division has heard your cry.  The New York Law Journal  reported that the Commercial Division courts are committed to utilizing technology to help make litigation efficient and more user friendly. The Commercial Division hopes to utilize innovative and advanced technology to efficiently adjudicate, among others, complex commercial matters. The benefits are bountiful as they will be valuable to lawyers, judges, and jurors.

In October, innovative technology made its debut in Justice Saliann Scarpulla’s courtroom in the New York County Commercial Division. In addition to Justice Scarpulla’s Part Rules, which require all cases be electronically filed and all documents text-searchable, Justice Scarpulla’s courtroom now contains an “86-inch screen to display documents, a podium with a document viewer and a USB port and small screens for attorneys and the judge.”   The new 86-inch screen permits attorneys to highlight and mark up documents. It also allows attorneys to scan documents while at the podium during trial, which helps to avoid unnecessary emergencies and courtroom delays.  Additionally, in an effort to protect client confidentiality, the courtroom contains a separate USB port for attorneys to use if their documents are highly sensitive so that they cannot be accessed through the court’s Wi-Fi. This new technology also permits attorneys to attend conferences via Skype, thus conserving time and expense.

In addition to the 86-inch display screen, the jury box in the courtroom was expanded and is now wheelchair accessible and offers technological assistance to jurors who are hearing or vision impaired. Similarly, jurors will no longer be inundated with reams of documents, as this new technology permits attorneys to provide jurors with a flash drive to access and review the documents in a more efficient matter.  In that regard, Justice Scarpulla stated that “we can promise a juror that they’re not going to be here for six months looking through documents.”  All of these technological improvements will undoubtedly have a positive effect on the willingness of people to serve as jurors and significantly impact efficiency in the courtroom.

“We think it’s important to have the right technology to give the business community in New York the sense that we could compete with the best courts in the world,” Justice Scarpulla opined.  Justice Scarpulla’s courtroom is the first, of what will hopefully be many New York courtrooms, to utilize this innovative technology that will make New York courts a much more desirable venue to handle complex commercial disputes.

The Commercial Division has initiated other changes that reflect its efforts to increase efficiency through technology.  For example, the Commercial Division promulgated Rule 11-e(f), which went into effect on October 1, 2018, encouraging parties to “use the most efficient means to review documents, including electronically stored information.” This new Rule, which addresses the use of technology-assisted review in the discovery process was discussed at length in Kathryn Cole’s blog, titled Important Update for Those Who Practice in the Commercial Division of the NYS Supreme Courts.

As technology pervades the legal profession, it is crucial that practitioners stay current with the changing technological landscape moving forward. Make sure you stay up-to-date with judge’s part rules and changes in the Commercial Division that we are certain to see in the future.

For more practice tips in New York Courts, subscribe to the New York Commercial Division Practice Blog.

At this point, after nearly three months of practicing law virtually from home, I think it’s fair to say that what was once novel and experimental has become a kind of new norm for the future.

Sure, state courts in New York, including the Commercial Division, have been returning slowly-but-surely to in-person operations over the last couple weeks, particularly upstate where Syracuse, Binghamton, Rochester, Buffalo, and the surrounding counties officially have entered Phase II of Governor Cuomo’s reopening protocols.

But make no mistake, as long as heath and safety remain the priorities — and as well they should — physical interaction in the courthouse will continue to be minimized while virtual interaction is maximized.  As Chief Judge Janet DiFiore remarked earlier this week:

As we progress toward fuller in-person court operations across the State, our foremost priority remains protecting the health and safety of all those who work in and visit our court facilities.

As it stands, only essential family matters will be conducted in-person.  Criminal, juvenile-delinquency, and mental-hygiene proceedings, as well as all other “non-essential” matters, will continue to be held virtually.  Mediation and all other ADR proceedings also will continue to be conducted virtually.

No strangers to technological innovation, Commercial Division judges around the state have been embracing the new virtual norm with optimism, if not enthusiasm.  A few weeks ago, on May 11, NYSBA’s Commercial and Federal Litigation Section sponsored a “Virtual Town Hall” discussion via Zoom during which Commercial Division Justices Saliann Scarpulla (NY County), Timothy Driscoll (Nassau County), and Deborah Karalunas (Onondaga County) reported on the status of litigating in the Commercial Division during COVID-19 and the methods being employed to move their cases forward.  Here are some highlights on a just a few topics from the program:

  • The Transition to Virtual Proceedings Generally.  The move to virtual courtroom practice, along with all the associated technology (primarily Skype for Business), will require much patience on the part of the bench and bar alike.  Expect some bumps in the road and be prepared to deal with them cooperatively.  Judges are welcoming and even encouraging lawyer input.  Everyone needs to be sensitive to the reality of a general unwillingness to get back to the courthouse on the part of judges and other court staff.
  • Virtual Evidentiary Hearings.  Judges for the most part are encouraging virtual evidentiary hearings and, for those that have conducted them, are finding that they proceed fairly seamlessly.  Managing exhibits remains a challenge, however, especially for document-intensive cases involving lengthy contracts, etc.  Again, patience and cooperation is required.
  • Settlement and ADR.  Judges across the board actively (and successfully) are encouraging parties to settle their cases through court settlement conferences and/or the court’s mediation/ADR programs.  Specifically, Justice Scarpulla has been encouraging settlement by reminding lawyers that their clients should not expect to receive a trial date any time soon.  Justice Driscoll personally has been conducting three-room Skype settlement conferences.  And Justice Karalunas has been emailing lawyers directly, encouraging them to resolve their cases by settlement conference or mediation.

Next week, on June 8, the Business & Commercial Law Committee of the Westchester County Bar Association will be presenting a similar program entitled “Litigating in the Westchester Commercial Division During COVID-19:  A Virtual Town Hall Discussion.”  Westchester Commercial Division Justices Linda Jamieson and Gretchen Walsh will be on hand to address questions concerning, among other topics, the virtual practices and procedures being implemented in their courtrooms, upticks in ADR and settlement, and the recently-instituted gradual reopening of the courthouse on Martin Luther King Boulevard in White Plains.  Register for the program here and join us for the discussion!

The COVID-19 pandemic has had widespread impact on litigation, with some courts and most cases coming to a screeching halt.  Some courts have responded with Orders or rules (Massachusetts Sup. Jud. Ct. Order OE-144 [March 20, 2020]; Wisconsin S. Ct. Order [March 25, 2020]; Florida S. Ct., No. AOSC20-16 [March 18, 2020]), while others have not, leaving the practitioner to determine the logistics under existing procedural rules and whatever Executive or Administrative Orders are in place.

As of this writing, we thought it might be helpful to provide the landscape in the state and federal courts in New York, and the impact, if any, Governor Cuomo’s Executive Order 202.7 may have.  We also provide links to helpful resources as you near your first virtual deposition.  We intend to update this as the landscape changes.

New York Law on Remote Depositions

New York Civil Practice Law and Rules (“CPLR”) 3113(b) mandates that an “officer” put the deponent under oath. The officer, or someone acting under the direction of the officer, must record the testimony.  Typically, a notary public or a stenographer serves the function of an officer who then records the testimony.

Pursuant to CPLR 3113(d), the officer administering the oath and transcribing the testimony must be physically present at the location where the deponent is testifying. Put simply, the statute does not permit the officer to be at a remote location and accessible by telephone. The rationale makes sense:  the officer who swears in the witness must have proof that the person before them is the actual witness.  SIgnifciantly, however, the statute allows the parties to stipulate otherwise (CPLR 3113[d]; In re Estate of Smith, 29 Misc 3d 832, 834 [Sur Ct 2010] [The court notes that “unless otherwise stipulated to by parties, the officer administering the oath shall be physically present at the place of the deposition”]). CPLR 3113(d), in part, states that “[u]nless otherwise stipulated to by the parties, the officer administering the oath shall be physically present at the place of the deposition and the additional costs of conducting the deposition by telephonic or other remote electronic means, such as telephone charges, shall be borne by the party requesting that the deposition be conducted by such means.”  In Washington v Montefiore Hospital et al., the Third Department held that because the court reporter who administered the oath was not present in the deponent’s office during his testimony, and rather, was present by telephone, the deposition was not conducted in accordance with CPLR 3113. However, there, the Court held that because there was no objection to the manner in which the oath was administered, thus preventing any correction of defect, the objection was waived (see Matter of Washington v Montefiore Hosp., 7 AD3d 945, 948 [3d Dept 2004]).

The rule further provides,that the testimony can be recorded by “stenographic or other means.” Indeed, CPLR 3113(d) permits the parties to “stipulate that a deposition be taken by telephone or other remote electronic means and that a party may participate electronically.” The stipulation must be agreed to by all the parties to a litigation and must detail 1) the method of recording; 2) the use of exhibits; and 3) who must and may be physically present.

Federal Law on Remote Depositions

Pursuant to Federal Rule of Civil Procedure (“FRCP”) 30(b)(4), “the parties may stipulate – or the court may on motion order – that a deposition be taken by telephone or other remote means.” In other words, under federal law, the court can order that a deposition be taken by telephone or other remote electronic means even in the absence of an agreement between the parties (Fed R Civ P 30[b][4]). Rule 30(b)(3) further states that testimony may be recorded by “audio, audiovisual, or stenographic means” and that the party who notices the deposition bears the recording costs.  In addition, any party can arrange to have the deposition testimony transcribed.

The COVID-19 pandemic has even caused certain federal judges to temporarily supplement their individual rules to permit all depositions to be taken by remote means, including telephone and videoconference (see Judge Lewis J. Liman’s COVID-19 Emergency Individual Practices in Civil and Criminal Cases).  The rule also provides that “[f]or avoidance of doubt, a deposition will be deemed to have been conducted “before” an officer so long as that officer attends the deposition via the same remote means (e.g., telephone conference call or video conference) used to connect all other remote participants, and so long as all participants (including the officer) can clearly hear and be heard by all other participants” (see id.).

Rule 30(b)(5) states that, unless the parties stipulate otherwise, the “deposition must be conducted before an officer appointed or designated under FRCP 28 (Nowlin v Lusk, 2014 WL 298155, at *5 [WD NY Jan. 28, 2014]).  Under FRCP 28, the deposition must be taken before either: 1) an officer authorized by federal law or by the law in the place of examination to administer oaths; or 2) a person appointed by the court where the action is pending. Rule 28 defines “officer” as a “person appointed by the court under this rule or designated by the parties under Rule 29(a).”  Notably, under FRCP 29(a), the parties can stipulate that “a deposition may be taken before any person, at any time or place, on any notice, and in the manner specified – in which event it may be used in the same way as any other deposition.” Put simply, the parties can stipulate that remote video depositions will be conducted by a person who is not a notary. The stipulation can also address the remote participation of the officer. The Rule does not require the parties to obtain the court’s approval of these stipulations. However, it is important to note that local rules can require approval for these stipulations.  Therefore, it is critical to consult both the Local Rules of the operative District Court, and the Individual Rules of the assigned Magistrate and Article III Judge.

Although the parties can stipulate otherwise, federal courts have held that a deposition is deemed to have been conducted before an officer if that officer “attends the deposition via the same remote means (e.g., telephone conference call or video conference) used to connect all other remote parties, and so long as all participants (including the officer) can clearly hear and be heard by all other participants)” (see Sinceno v Riverside Church in City of New York, 2020 WL 1302053, at *1 [SD NY Mar. 18, 2020] [permitting all depositions to be taken by telephone, video conference, or other remote means in light of the COVID-19 pandemic]).

In sum, federal law, unlike New York State law, does not require the physical presence of the officer in the same location as the deponent.

Executive Order 202.7 and Depositions

In light of the COVID-19 pandemic, on March 19, 2020, Governor Cuomo issued Executive Order 202.7 (“EO”), which suspended until April 18, 2020 the rule requiring the physical appearance of a notary public for the signing of documents.  To date, it is unclear whether the suspension will be extended. It is also not clear what impact, if any, the EO has on CPLR 3113’s physical presence requirement.  The EO addresses the witnessing of document signings, not the administration of oaths at depositions. Specifically, Executive Order 202.7 permits notary services to be performed by video provided the following conditions are met:

  • The person seeking the Notary’s services, if not personally known to the Notary, must present valid photo ID to the Notary during the video conference, not merely transmit it prior to or after;
  • The video conference must allow for direct interaction between the person seeking the Notary’s services and the Notary (g., no pre-recorded videos of the person signing);
  • The person seeking the Notary’s services must affirmatively represent that he or she is physically situated in the State of New York;
  • The person seeking the Notary’s services must transmit by fax or electronic means a legible copy of the signed document directly to the Notary on the same date it was signed;
  • The Notary may notarize the transmitted copy of the document and transmit the same back to the person seeking the Notary’s services; and
  • The Notary may repeat the notarization of the original signed document as of the date of execution provided the Notary receives such original signed document together with the electronically notarized copy within thirty days after the date of execution.

The New York Department of State has issued guidance to notaries regarding Executive Order 202.7.  Below are the additional considerations for notaries:

  • Notaries public using audio-video technology must continue to follow existing requirements for notarizations that were unaltered by the Executive Order. This includes, but is not limited to, placing the notary’s expiration date and county where the notary is commissioned upon the document.
  • If the notary and signatory are in different counties, the notary should indicate on the document the county where each person is located.
  • An electronically transmitted document sent to the notary can be sent in any electronic format (e.g., PDF, JPEG, TIFF), provided it is a legible copy.
  • The notary must print and sign the document, in ink, and may not use an electronic signature to officiate the document.
  • The signatory may use an electronic signature, provided the document can be signed electronically under the Electronic Signatures and Records Act (Article 3 of the State Technology Law). If the signer uses an electronic signature, the notary must witness the electronic signature being applied to the document, as required under Executive Order 202.7.
  • The Executive Order does not authorize other officials to administer oaths or to take acknowledgments, and only applies to notary publics commissioned by the Secretary of State’s office.
  • Following remote notarization, if the notary receives the original document within 30 days, the notary may notarize the document again (i.e., physically affixing a notary stamp and hand signing the document) using the original remote notary date.
  • Additionally, when performing remote notarization pursuant to this Executive Order, the Department recommends the following best practices. (However, not following these two recommendations will not invalidate the act or be cause for discipline):
    • Keep a notary log of each remote notarization;
    • Indicate on the document that the notarization was made pursuant to Executive Order 202.7.

Some Helpful Links and Advice From Court Reporters

So what are court reporters doing in light of the pandemic?  Adapting of course!  Many are offering free virtual or on-line demonstrations of how to conduct a remote deposition, or helpful  information on how the depositions would proceed.  Some examples can be found at Enright, Veritext or Bee Reporting, to name a few.  You might want to share these “tutorials” with your witness or clients so they understand the process before “taking the stand”.

 

 

As a result of the COVID-19 (Coronavirus) pandemic, court systems throughout the United States have had to rapidly adapt and issue temporary rules and procedures in order to keep court personnel, litigants and attorneys safe while continuing to serve their important societal function of administration of justice.

We wanted to provide a resource to readily access the various and ever-changing temporary rules and procedures of New York State’s Appellate and Commercial Divisions of the Supreme Court.  We will continue to monitor and post updates and other useful information at a time when policies are changing on a seemingly minute-by-minute basis.

New York State Executive Action

In keeping with Chief Administrative Judge of the Courts, Hon. Lawrence K. Marks, Memorandum of March 15, 2020, which postponed all non-essential court functions effective at 5:00 p.m. on March 16, 2020, Governor Andrew Cuomo signed Executive Order No. 202.8 on March 20, 2020 which, among other things, tolled until 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, including but not limited to . . . the civil practice law and rules, . . . and the uniform court acts, or by any other statute, local law, ordinance, order, rule, or regulation, or part thereof.” For other Executive Orders related to the Coronavirus, click here. Correspondingly, Judge Marks issued Administrative Order 78/20 on March 22, 2020, directing an immediate prohibition to filing any papers in any matter with any county clerk’s office until further notice. This directive applies to both hard copy and electronic filings. However, certain matters deemed essential are permitted and contained on the list annexed as Exhibit A to Administrative Order 78/20.

Additional pertinent Executive actions taken include allowing NY notaries to perform notarial services using video conferencing technology provided certain conditions are met, such as the person seeking the service must transmit a valid photo ID during the video conference, be on the video conference at the time of signing and affirmatively present themselves as being physically situated in NY. See Executive Order No. 202.7.

New York Court System Generally

On March 19, 2020, Judge Marks issued Administrative Order No. 71/20 strongly discouraging litigants engaged in pending civil matters from prosecuting such matters in a manner that would require appearing in-person or travel during this health crisis. See AO 71/20 (1). Additionally, this Order directs litigants (parties and attorneys) affected by COVID-19 to use best efforts to enter agreements to adjourn discovery-related matters for a period not exceeding ninety (90) days. See AO 71/20 (2). If litigants cannot reach an agreement, the court has the ability to review the matter and issue the appropriate order once court returns to normal operation. See id.

In keeping with Judge Marks’ Memorandum and Administrative Orders, most, if not all, courts of New York State implemented temporary policies and procedures (highlighted below) to handle essential court functions virtually.

Now in an effort to ease restrictions placed on non-essential court functions, on April 7, 2020, Judge Marks circulated a new Memorandum offering the Courts preliminary steps to transition non-essential court functions to a remote/virtual court system on an ongoing basis beginning on April 13, 2020, including Judges being available to conduct conferences to aid counsel with discovery disputes via Skype or telephone. Judge Marks then issued Administrative Order dated April 8, 2020 (AO/85/20) providing additional procedures and protocols concerning specific matters trial courts will address such as conferencing pending cases, deciding fully submitted motions, discovery, and video technology. Nevertheless, litigants are still unable to file new non-essential matters until further notice.

Appellate Division

Generally, on March 17, 2020, all the Appellate Divisions of New York’s four (4) Judicial Departments issued emergency Orders. While similar in substance, each Judicial Department’s temporary rules and procedures vary slightly. We urge you to review the particular rules and procedures pertinent to your matter.

First Department

On March 17, 2020, the First Department issued an Order temporarily suspending deadlines, with the exception of matters perfected for May 2020 and June 2020 terms, the Court suspended indefinitely deadlines for all perfection, filing and other deadlines set forth by court order, Parts 1240 and 1250 of the Rules of the Appellate Division, Parts 600 and 603 of the Rules of the Appellate Division First Department, or Part 1245 of the Electronic Filing Rules of the Appellate Division. Additionally, and again, with the exception of all matters perfected for the May 2020 and June 2020 term, the March 17th Order granted all motions or applications for extensions of time to perfect or file that were pending as of March 17, 2020. See Order. Contemporaneous to the March 17th Order, the First Department also issued emergency procedures. See Covid-19 Emergency Procedures as of March 17, 2020.

Second Department

Unlike the First Department’s March 17th Order, the Second Department’s March 17th Order did not place a limitation on when suspensions or extensions would commence and indefinitely suspended deadlines, granted pending motions or applications for extension of time until further order of the Court. All dates for perfecting, filing, motions or applications for extensions, and all other motions were suspended until further directive of the Court.

The Second Department also issued additional Notices regarding:

(i) Limitation of Court Operations – Presently, the Court is processing its calendars through April 2, 2020. But for appeals between March 17, 2020 and April 2, 2020, such appeals will be on submission only unless a request to hear such appeal via Skype is made to Court via email at ad2clerk@nycourts.gov. Also, for emergency applications and motions presently pending considered to be an emergency, you should contact the Court via email to ad2clerk@nycourts.gov indicating that the matter is urgent.

(ii) Hard copy filings at the Court’s Clerk’s Office – Hard copy filings are NOT permitted and e-filing is mandatory until further notice.

(iii) Oral arguments before the Court – Beginning on March 17, 2020, all matters are on submission but the Court will permit oral argument via Skype on request to the Court at ad2clerk@nycourts.gov to make arrangements.

Click here for all other Second Department Notices related to Covid-19.

Third Department

Similar to the Second Department, the Third Department’s March 17, 2020 Order indefinitely suspended deadlines, granted pending motions or applications for extension of time. However, the Third Department’s extension did not apply where a statute confers a deadline.

Beginning on March 17, 2020, the Third Department began only entertaining emergency matters. However, if you deem a matter an emergency, the Court requests that you notify it in writing, on notice to your adversaries, as a request that “the Court treat your matter as urgent” to ad3clerksoffice@nycourts.gov with the subject indicating that the matter is urgent. Also, calendared matters for the March term will be heard on submission and matters for the April term are adjourned to a date in a later term. See Third Department’s Covid-19 Emergency Procedures as of March 17, 2020. Click here for additional Third Department Covid-19 related updates.

Fourth Department

The Fourth Department’s March 17, 2020 Order substantially mirrors the Order issued by the Third Department. The Fourth Department also intends to only entertain matters on an emergency basis with staffing significantly reduced. Matters calendared for the March and April terms are being considered on submission only and matters scheduled for the May term are adjourned to be re-calendared for a later term. Requests for emergency relief should be made by email to ad4-clerk@nycourts.gov. For additional information, contact the Fourth Department Clerk’s office at (585) 530-3100.

Commercial Division

Presently, all of the Justices of the Commercial Division, New York County have issued temporary rules or procedures, including procedures for requesting remote conferences in keeping AO/85/20.

Given the rapid changes, we plan to maintain regular updates to this blog for the foreseeable future. For this reason, each Commercial Division of the New York Supreme Court is listed below. Please check back regularly for updates.

7th Judicial District – Cayuga, Livingston, Monroe, Ontario, Seneca, Steuben, Wayne, and Yates Counties

For essential and emergency court matters, contact court staff directly. Click here for a list of contact numbers and links to additional important information about the 7th Judicial District.

o Hon. J. Scott Odorisi

8th Judicial District – Erie County

o Hon. Deborah Chimes
o Hon. Emilio Colaiacovo
o Hon. Henry J. Nowak
o Hon. Timothy J. Walker

Albany County

o Hon. Richard Platkin

Kings County

o Hon. Lawrence Knipel
o Hon. Larry D. Martin
o Hon. Leon Ruchelsman

Nassau County

Supreme Court, Nassau County has implemented virtual chambers protocols and provided a list of virtual chambers contacts and conference request forms. For additional important information concerning Nassau County Courts operations during COVID-19, click here.

o Hon. Stephen A. Bucaria
o Hon. Vito M. DeStefano
o Hon. Timothy S. Driscoll
o Hon. Jerome Murphy

New York County

o Hon. Andrew Borrok – Requests for conferences in Part 53 may be made via email to sfc-part53@nycourts.gov.

o Hon. Joel M. Cohen – Requests for conferences in Part 3 may be made via email to sfc-part3@nycourts.gov.

o Hon. Marcy Friedman
o Hon. Andrea Masley

o Hon. Barry Ostranger – Requests for conferences in part 61 – sfc-part61@nycourts.gov.

o Hon. Saliann Scarpulla – Requests for conferences in Part 39 may be made via email to part-39@nycourts.gov.

o Hon. Jennifer G. Schecter
o Hon. O. Peter Sherwood

In addition, a party wishing to request a remote conference in all New York County Supreme Court Civil Parts can complete the request form found annexed to the below link and email the completed form to sfcconferencerequest@nycourts.gov. The completed form will be forwarded to the assigned judge. See https://www.nycourts.gov/legacypdfs/courts/1jd/supctmanh/PDF/Remote-Conference-Protocol.pdf for more information.

Onondaga County

o Hon. Deborah H. Karalunas
o Hon. Anthony J. Paris
o Hon. Donald A. Greenwood

Queens County

o Hon. Marguerite A. Grays
o Hon. Leonard Livote
o Hon. Joseph Risi

Suffolk County

o Hon. Jerry Garguilo
o Hon. Elizabeth H. Emerson
o Hon. James Hudson

Westchester County

o Hon. Linda S. Jamieson
o Hon. Gretchen Walsh

For general Coronavirus updates from the New York State Courts, visit https://www.nycourts.gov/ or call the Court’s Coronavirus Hotline at (833) 503-0447.

As we continue to see increased litigation over electronic programs, apps, and algorithms, courts are increasingly called to consider discovery requests for the coding behind that technology.  These requests highlight the tension between the need for broad discovery and the litigant’s proprietary interest in secret, commercially valuable source code.  And as a recent First Department decision highlights, Courts are acutely protective of this source code.

The First Department, in BEC Capital v. Bistrovic, recently reversed the trial court’s ordering a coder to either produce his trading algorithm subject to the Commercial Division’s standard confidentiality order or abandon his claims, holding instead that the trial court should have ordered the algorithm produced “for Attorneys and Experts’ Eyes Only.”

The discovery dispute in BEC Capital arose from a failed high-frequency trading joint venture.  The defendant Bojan Bistrovic, through his company MCM, entered into an agreement with Plaintiff BEC where Bistrovic would integrate his proprietary trading algorithm into BEC’s trading platform, and he and BEC would share in the gains or losses of Bistrovic’s algorithm.  Bistrovic’s trading algorithm was built for speed: executing trades in a fraction of second to exploit fleeting market trends and inefficiencies.  Consequently, the algorithm required an efficient trading platform—every process, line of code, or mile of cable that a trade order had to traverse increased the time between when Bistrovic’s algorithm directed the trade and the time it was executed, and that lag gutted the efficiency of Bistrovic’s algorithm.

Less than six months into their agreement, the parties’ venture had performed so poorly that both effectively abandoned the agreement.  BEC pinned the poor performance on Bistrovic’s algorithm; Bistrovic blamed serious problems in BEC Capital’s trading platform.  When a dispute arose about the allocation of trading losses, Bistrovic allegedly told others in the high-frequency trading industry that Plaintiffs were fraudsters who had stolen money from him.

When BEC and its principals sued for defamation and breach of their NDA, Bistrovic brought counterclaims for breach of contract, alleging that BEC breached their agreement because they failed to provide Bistrovic with a satisfactory high-frequency trading platform into which his algorithm could have been properly integrated.

In light of Bistrovic’s counterclaims, Plaintiffs demanded the coding behind Bistrovic’s high-frequency trading algorithm in discovery.  The coding was necessary, Plaintiffs argued, to rebut Bistrovic’s counterclaims that the failure resulted from BEC’s platform—i.e., to show that the poor performance resulted from Bistrovic’s algorithm itself, not BEC’s platform.  When Bistrovic objected to the discovery of his trading algorithm, the trial court (Ramos, J.) held that Bistrovic must either (i) disclose the algorithm subject to the standard Commercial Division confidentiality order, or (ii) face the risk of having his counterclaims and defenses based on his algorithm stricken.

In November, the First Department reversed the trial court, holding that:

The production of defendants’ source code, which is a trade secret . . . should have been ordered to be produced for ‘attorneys and expert eyes only.’  Plaintiffs’ assertion that they have the expertise to review and opine on the source code and should not be subjected to retaining an expert, does not support unfettered access to defendants’ confidential algorithm.

The First Department’s ruling constitutes a rare reversal of the discretion afforded to the trial courts to oversee the discovery process.  See Don Buchwald & Assoc. v Marber.

In so holding, the First Department continues to show its interest in ensuring that confidential source code be produced according to appropriate terms and limitations, including, where necessary, an “attorneys and experts’ eyes only” designation.  See MSCI Inc. v. Jacob (reversing trial courts’ denial of discovery into confidential source code and ordering production “for attorneys’ eyes only”).  More generally, the First Department remains actively protective over confidential source code and—in this area more than others—willing to substitute its own discretion for the trial court’s, ensuring the deliberate development of legal authority over issues relating to confidential source code.  See also, e.g., People v. Aleynikov (reinstating the tossed conviction of the now-infamous Goldman Sachs programmer Sergey Aleynikov for uploading portions of Goldman’s high-frequency trading code to a German code repository).

Practical Considerations

BEC Capital provides some welcome guidance on how the First Department views the interplay between proprietary computer code and the need for “open and full disclosure as a matter of policy.”  MSCI.  Going forward, litigants can expect trial courts to take a thorough and critical look at requests for discovery into proprietary source code, including analysis of the following considerations:

  • How central is the source code to the claims? Not all requests for disclosure of proprietary code are created equal, and, of course, the more central the disputed source code is to the issues in the case, the more compelling the argument for disclosure.  For instance, a copyright case concerning the disputed code (where the party asserting the claim must prove the originality of the work) might favor disclosure, see Fonar Corp. v. Magnetic Resonance Plus, Inc., 93-cv-2220, 1997 WL 689462 (S.D.N.Y. Nov. 3, 1997), but only where the claim directly concerns the specific code requested, see Abarca Health, LLC v. PharmPix Corp. (denying discovery of portions of source code that were not at issue in infringement claims).  Likewise, a federal court has granted discovery of a carmaker’s proprietary code in a products liability action alleging harm directly caused by the code, Burnett v. Ford Motor Co., while another has denied discovery into proprietary source code in a false advertising case where plaintiffs claimed that the code created the misleading content, Congoo, LLC v. Revcontent LLC.
  • Is the code needed offensively or defensively? In Viacom Int’l Inc. v. YouTube Inc., the Court denied plaintiff’s request for discovery of defendants’ source code based in part upon the fact that Viacom sought YouTube’s source code offensively—to support its own claims.  The Court observed that defendant “should not be made to place this vital asset in hazard merely to allay speculation.”
  • What are the parties up to? Where the parties are in the same industry—such that the disclosure of the source code even subject to strict confidentiality restrictions may result in a competitive disadvantage—the case for non-disclosure or an “attorneys and experts’ eyes only” designation is stronger.  See MSCI (attorneys and experts’ eyes only designation appropriate where employee left plaintiff company to build a competing platform for defendant-company); ABC Rug & Carpet Cleaning Serv. Inc. v. ABC Rug Cleaners, Inc. (“Ample precedent exists for limiting disclosure of . . . proprietary information to attorneys and experts, particularly when there is some risk that a party might use the information . . . to gain a competitive advantage over the producing party.”).
  • Have other creative disclosure frameworks been considered? In addition to an “attorneys eyes only” designation, litigants should consider whether some other discovery framework is appropriate.  See RGIS, LLC v. A.S.T., Inc. (appointing special master to review confidential source code); Princeton Mgt. Corp. v. Assimakopoulos, 1992 WL 84552 (S.D.N.Y. April 10, 1992) (limiting disclosure to two designated individuals within plaintiff’s organization).
  • Is the code uniquely ill-suited to an “attorneys’ eyes only” designation? While the First Department in BEC Capital rejected the plaintiffs’ argument that BEC (and not its experts) needed to view the source code because they had the expertise to review it, other courts have favored this argument in holding that an “attorneys’ eyes only” designation was inappropriate.  See Metropolitan Life Ins. Co. v. Bancorp. Servs. LLC, 2000 WL 1644488 (S.D.N.Y. Nov. 2, 2000).  It remains to be seen how the First Department would view a case where the code sought is so particularized that an “attorneys eyes only” designation would be effectively useless.

While courts will continue to consider the discoverability of proprietary source code on a case-by-case basis (and subject to their broad discretion to oversee discovery), recent First Department guidance suggests that litigants would be well-advised to prepare for a deeply thorough, fact-specific inquiry focused not only on the necessity of the source code to the claims or defenses, but also on the commercial value of the source code and the appropriateness of alternative discovery frameworks.

 

Following the lead of several federal courts, hyperlinks in legal briefs in the Commercial Division appear to be well on the way!  The Commercial Division Advisory Council (“Advisory Council”) has announced a new proposal, which was put out for public comment, mandating hyperlinks.  The proposed amendment to Rule 6 of the Commercial Division Rules would require legal memoranda to include hyperlinks [a feature in an electronic document that permits a reader to jump to another location or file with just one click] to other sources and would grant judges discretion in determining whether to require hyperlinking and to what extent the benefit of hyperlinking outweighs the burdens.

The proposed amendment to Rule 6 would include the following:

  • “require hyperlinking to a cited docket entry already available on NYSCEF;
  • give Justices discretion to require hyperlinking cited legal authorities to Lexis/Nexis or Westlaw, or a government website;
  • encourage hyperlinking cited legal authorities even if not required; and
  • permit exemptions from required hyperlinking for parties that certify an inability to comply with the requirement without undue burden.”

This amendment hopes to advance Chief Judge DiFiore’s Excellence Initiative, which seeks to “ensure the just and expeditious resolution of all matters.” This amendment would also be in theme with the Commercial Division’s latest efforts to implement technology in the courts for purposes of improving efficiency and productivity.

Hyperlinking to external sources cited in legal memoranda, similar to bookmarking – internal hyperlinks – will enable judges and their clerks to access cited materials more quickly and with greater ease. The Advisory Council states that hyperlinks are particularly helpful in complex cases i.e., like those within the jurisdiction of the Commercial Division.

The Advisory Council explains that other courts have encouraged and even required hyperlinking. For example,  the Second Department now requires that briefs contain bookmarks or hyperlinks to legal authorities to permit the judges and their staff to access the referenced authorities more efficiently:  “electronically-filed briefs should contain bookmarks or hyperlinks to the authorities cited in those briefs. If utilized bookmarks should take the reader to a copy of the cited authority, that is, the case, statute or rule, which will be part of the briefs submitted.”

In addition, certain Commercial Division Justices, including Justice Saliann Scarpulla already encourage the use of hyperlinks in electronically-submitted memoranda.  Similarly, Justice Andrea Masley currently requires hyperlinks to actual NYSCEF documents. Interestingly, the Second, Third, and Fourth Circuit’s local rules, to name a few, permit the use of hyperlinks.

Notably, if a party certifies in good faith that it cannot include hyperlinks without undue burden as a result of “limitations in its office technology or other showing of good cause,” the court may excuse the party from compliance.

This is a long-awaited and welcome rule change.  The Administrative Board of the Courts is now seeking public comment on the proposal set forth in the Advisory Council’s Memorandum.  Those wishing to comment should e-mail their submissions to rulecomments@nycourts.gov or write to: Eileen D. Millet, Esq., Counsel, Office of Court Administration, 25 Beaver Street, 11th Floor, New York, New York 10004.  The public comment period is open through February 24, 2020.

*** Attention all Queens County commercial litigators: If you have a case before Judge Grays, be sure to bring an HDMI cable and a USB drive with you to court from now on! ***

One of the themes that we’ve developed on this blog over the years has been the implementation of technology in the courts of the Commercial Division, as well in the rules that govern the practice of law in those courts.

We’ve regularly reported on such developments in the context of the individual practice rules of certain Commercial Division judges, as well as in certain NYSBA-sponsored events showcasing the new Integrated Courtroom Technology (or “ICT”) program in the Commercial Division, including in Westchester County (Walsh, J.) in June 2018 and New York County (Scarpulla, J.) in April 2019.

This past Tuesday, members of ComFed’s Committee on the Commercial Division (including Hamutal Lieberman and yours truly from this blog), along with Queens County Commercial Division Justice Marguerite A. Grays, presented a similar program called “The Electronic Courtroom: Using Integrated Courtroom Technology,” which took place in Justice Grays’s beautiful, oak-paneled courtroom (Part 4, Room 66).  As with our New York County program in April of this year, the Queens County program was well-attended and well-received by approximately 30 lawyers, judges, and other court personnel.

Many of the same features and equipment were on display during the program, including the 86-inch interactive Smartboard, which works in conjunction with counsel’s laptops, tablets, and USB drives, and on which they are able to display, highlight, and even annotate their documents and videos during oral argument and at trial.  The “ELMO” document camera, which allows counsel to project unique documents and other physical evidence onto the Smartboard for judge and/or jury to see, also was prominently featured during the program.

And if that wasn’t enough courtroom technology for one day, the presenters then promptly Uber’d their way through midday metro traffic back to Manhattan Commercial Division Justice Saliann Scarpulla’s Part 39 for a redux of their April program – this time entitled “The Electronic Courtroom: Using Integrated Courtroom Technology in State and Federal Courts on Motions and at Trial” and sponsored by the Second Circuit Judicial Council and the New York State-Federal Judicial Council.  In addition to demonstrating the existing Smartboard, ELMO, Skype, and audio/visual-impaired technologies, the presenters were given the opportunity to showcase the courtroom’s new, interactive witness-stand monitor, which allows a witness during her testimony to identify, highlight, and annotate with a stylus or her own finger the documents, photos, and other evidence displayed by counsel on the Smartboard.

I’ll say it again:  If you’ve been reluctant to introduce technology into the way you litigate your commercial cases in New York, the Commercial Division may soon leave (indeed, already has left) you behind.

 

The Commercial Division Advisory Council (the “Advisory Council”) has proposed three new amendments to the Commercial Division Rules: (1) a proposed amendment to Rule 1, which will allow counsel to participate in court conferences remotely, via Skype or other videoconferencing technology; (2) a proposed amendment to Rule 6, which will require proportionally spaced 12-point serif-type font in papers filed with the court; and (3) a proposed amendment to repeal Rule 23 (also known as, the “60-Day Rule”), which currently requires litigants to notify the court and other parties whenever a motion has not been decided within 60 days of its submission or oral argument.

The Proposed Amendment to Rule 1

The proposed amendment to Rule 1 will permit counsel to participate in court proceedings from remote locations via videoconference.  According to the Advisory Council, the proposed amendment “is consistent with the commercial division’s mission to improve efficiency and productivity, eliminate delays, and provide better service to the public” by, among other things, encouraging the avoidance of wasteful attorney travel.  The new proposed subsection (d) states:

Counsel may request the court’s permission to participate in court conferences and oral arguments of motions from remote locations through use of videoconferences or other technologies. Such requests will be granted in the court’s discretion for good cause shown; however, nothing contained in this subsection (d) is intended to limit any rights which counsel may otherwise have to participate in court proceedings by appearing in person.

The proposed amendment does not require counsel to participate in court proceedings from remote locations, and therefore avoids placing any burden on lawyers who lack the technical resources to participate from remote locations.  Moreover, the proposed amendment is limited to court conferences and oral arguments of motions, and is not intended to address the more complex subject of testimony by witnesses at trials or other evidentiary hearings.

Videoconferencing is not a novel concept in the Commercial Division.  Last year, my colleague Viktoriya Liberchuk reported on Justice Scarpulla’s implementation of videoconferencing technology in her courtroom, including the use of Skype for oral argument and other court conferences.  Videoconferencing is also frequently used in other courts, such as the United States circuit courts, and the First and Second Departments.  For example, the Second Department has installed Skype-equipped large screen computers in both its courtroom and consult room, and has started to use Skype for arguments of appeals and motions.

In fact, a Report of a Survey of Videoconferencing in the Courts of Appeals revealed that the benefits of videoconferencing may outweigh the disadvantages.  In that study, many of the appellate court judges who were interviewed cited the following advantages of videoconferencing:

  • Saves travel time and expense;
  • Allows for scheduling flexibility;
  • Reduces the administrative burden on the courts;
  • Decreases litigation costs;
  • Increases access to courts for marginalized litigants whose in-person appearance might otherwise be prohibitively expensive or constitute a hardship; and
  • Allows the court to make special accommodations for judges who may be ill or unable to travel.

Are there any disadvantages to videoconferencing?  Obviously some technical difficulties may occur.  But even so, technical difficulties are usually minor, easily resolved, and infrequent.  Other disadvantages may include decreased personal interactions and “quality of the argument experience.”  But, the judges who were interviewed indicated no difference in their understanding of the legal issues in arguments that were video conferenced.  In fact, one appellate judge even stated that “Videoconferencing is the wave of the future.”

Videoconferencing may prove to be convenient and cost-efficient for many litigators because it enables lawyers and their clients to save time and money.  In the words of the Advisory Council:

The proposed amendment presents an opportunity for the Commercial Division to continue its innovation and leadership in the smart adoption of technology in aid of the efficient administration of justice. The proposed rule confers sufficient discretion on individual Justices to permit participation in court proceedings from remote locations in a way that makes sense for their particular docket, and is calculated to avoid any burden or prejudice to the few lawyers who might not want to use this technology.

Proposed Amendment to Rule 6

A proposed amendment to Rule 6 of the Commercial Division Rules will require proportionally spaced 12-point serif type font in all papers filed with the court.  Rule 6 currently provides that all papers filed with the court shall comply with CPLR 2101 and 22 NYCRR 202.5(a), contain print no smaller than 12-point font, and footnotes no smaller than 10-point font.  But, like CPLR 2101 and 22 NYCRR 202.5(a), Rule 6 is silent as to the particular style of typeface.

Well, apparently some studies have shown that larger point typeface and use of proportionally spaced serif typeface enhances readability, improves comprehension and retention of long passages of text, and makes it easier for the eye to quickly and easily distinguish letters.  For those unfamiliar with typefaces, Serif typefaces are those that have little extensions, or “serifs” at the ends of the strokes of the letters.  By contrast, “sans-serifs” do not have the added stroke.  Some styles of proportionally spaced serif typeface include: Times New Roman, Century Schoolbook, Georgia, and Bookman.

According to the Advisory Council, larger point font and proportionally-spaced serif typeface “would assist the Commercial Division Justices and their staff in dealing with the arduous task of reading and retaining the content of tens of thousands of pages each year, which presumably would lead to greater efficiency.”

Proposed Amendment to Repeal Rule 23

The last proposed amendment to the Commercial Division Rules seeks to repeal Rule 23 in its entirety.  Rule 23, also known as, the “60-Day Rule,” currently requires movant’s counsel to notify the court and other parties whenever a motion has not been decided within 60 days of its submission or oral argument.  The Advisory Council proposes repealing this rule for three reasons:

  • First, the rule puts attorneys in the difficult and sometimes awkward position of reminding judges of their failure to render a decision and, therefore, is rarely followed;
  • Second, an analogous rule applicable more broadly in the Supreme and County court (see 22 NYCRR 202.8[h]) was rescinded in 2006; and
  • Third, most judges already receive notice of unresolved motions through other channels, such as the Office of Court Administration.

Those who wish to comment on these proposals should e-mail their submissions to rulecomments@nycourts.gov or write to: John W. McConnell, Esq., Counsel, Office of Court Administration, 25 Beaver Street, 11th Floor, New York, NY 10004.

Comments to the proposed amendment to Rule 1 must be received by September 30, 2019. Comments to the proposed amendment to Rule 6 must be received by October 25, 2019.  Comments to the proposed amendment to repeal Rule 23 must be received by November 1, 2019.

Luddites beware!  If you’ve been reluctant to introduce technology into the way you practice law, the Commercial Division may soon leave you behind.

Here at New York Commercial Division Practice we regularly report on technological developments in the Commercial Division.  Earlier this year, for example, we reported on the technological proclivities of newly-appointed Manhattan Commercial Division Justice Andrew Borrok, whose individual Practices and Procedures emphasize (and even assume) lawyers’ use of technology when practicing in Part 53.

Last year, we twice reported on the implementation of the Integrated Courtroom Technology (or “ICT”) program in the Commercial Division, beginning with Westchester County (Courtroom 105, Walsh, J.) in January 2018, followed by New York County (Courtroom 208, Scarpulla, J.) in October 2018.  The Business & Commercial Law Committee of the Westchester County Bar Association, as well as NYSBA’s Commercial & Federal Litigation Section both presented CLE programs last year on the “21st Century Courtroom” in White Plains, showcasing many of its new hi-tech features and equipment.

Last week, members of ComFed’s Committee on the Commercial Division (including two of this blog’s authors), along with Administrative Judge Deborah A. Kaplan and Manhattan Commercial Division Justice Saliann Scarpulla, as well as sponsor A.C. Roman & Associates Inc., presented a similar program called “The Electronic Courtroom Comes to 60 Centre Street:  Using Integrated Courtroom Technology in the Commercial Division.”  The program, which took place in Justice Scarpulla’s Part 39, was standing-room only and, by all accounts, very well-received by the 75-plus lawyers, judges, and other court personnel in attendance.

Some of the hi-tech features and equipment showcased during last week’s program — all of which, by the way, are described in how-to detail in “Exhibit A” to Justice Scarpulla’s individual Practices and Procedures — included the following:

  • Interactive Smartboard.  Virtually every technological feature and device in Part 39 interacts with the 86-inch Smartboard, which is displayed prominently to the left of counsel table as one faces the bench.  The presenters showed how practitioners can use their laptops, tablets, and USB drives in conjunction with the Smartboard to display, highlight, and even annotate their motion papers and other documentary evidence during argument before judge and jury.
  • “ELMO” Document Camera.  The ELMO allows practitioners to project virtually any physical item in 3D onto the Smartboard for judge and jury to see.  It’s particularly useful for displaying unique documents or other pieces of evidence that are perhaps less conductive to being converted to electronic format.
  • Business Skype Capabilities.  The use of Skype in the courtroom is a considerable step up from teleconferencing (and even traditional videoconferencing), allowing parties and their counsel to remote into and even appear by video in court from an outside location via their desktop and laptop computers, tablets, and smartphones.  This feature is particularly relevant to practicing in the Commercial Division, which has become one of the premiere, go-to business courts across both nation and globe.

** Attention all Manhattan Commercial Division practitioners **  If you missed the program last week but would like to familiarize yourself with the ICT features in Part 39 beyond the information provided in Justice Scarpulla’s individual rules, fear not.  ComFed’s Committee on Continuing Legal Education was on hand to ensure that the presentation was video recorded, which recording will be spliced and packaged for distribution on the NYSBA’s “CLE Online and On-Demand” site later this year.

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