Whether in employment agreements or business transactions, drafters often include certain clauses within these documents to protect their client if litigation arises (e.g., arbitration clauses, forum- selection clauses). However, when not clearly drafted, these clauses can lead to a battle over where the case may proceed. Recently, Manhattan Commercial Division Justice Joel M. Cohen handed

As one can easily glean, we here at the New York Commercial Division Practice Blog view New York’s Commercial Division as the heartbeat of business litigation in the United States.  So, we think getting your business litigation in front of the Commercial Division is a big deal.  But what happens when you have a case that meets the requirements for the Commercial Division, and you are not assigned to that Part? 

Generally, there are two ways to be assigned to the Commercial Division under § 202.70[d] of the New York Code of Rules and Regulation (the “Rules”).  The first is for any party to file an RJI with the accompanying Commercial Division Addendum 90 days following service of the complaint.  The second is by consent of the parties via a forum – selection clause in the parties’ contract. 

But what if a party files an RJI before the 90-day period runs without requesting assignment or submitting a Commercial Division Addendum?  The answer lies in § 202.70[e] of the Rules, which permits a party to apply via letter to the Administrative Judge within 10 days of the RJI for transfer to the Commercial Division. 

But what if the request is made outside the time limits in § 202.70[d] and [e] of the Rules? Again, § 202.70[e] of the Rules permits a letter application to the Administrative Judge showing “good cause” for the delay. 

While the timing provisions are relatively simple to work though, the “good cause” standard under CPLR 2004, which requires reasoning for the delay, is a bit more subjective, as a finding of good cause is within the discretion of the Administrative Judge.  It is imperative, therefore, to point the Administrative Judge to applications with analogous issues or facts to support your cause.  As for where to find those decisions, never fear, the Commercial Division itself provides some help in this regard. 

On the New York Courts webpage, the Commercial Division has a page titled Administrative Judge on Transfer Applications. That page provides a list of all the Administrative Judge’s decisions on transfer applications from prior to the effective date of the Commercial Division Rules on January 17, 2006, to the present.

 For example, what if a timely request for Commercial Division assignment was not filed, but you have a related case pending before a Commercial Division Judge?  The Administrative Order in ABG HMX LLC v. Alba Longa Concepts LLC provides precedent for the Administrative Judge granting a transfer for “good cause”, in this context.   And what if a request for Commercial Division assignment is rejected by the clerk’s office but was only a few days late?  Curtis v. Merrill Lynch, et al provides precedent for the Administrative Judge granting a transfer if the request was “untimely albeit only by a matter of days.”  But waiting years before filing a transfer application is not wise.  In ABL Advisor LLC, et al. v. Ian S. Peck, et al, the Administrative Judge denied a transfer application made two years into the litigation, finding that the “rules are designed to ensure that appropriate cases are assigned to the Commercial Division at the inception of the case, not two years into the litigation.”  Finally, what if you have a complex commercial case but one of the issues is arguably excluded from review by the Commercial Division?  In City of New York v. FC 42nd Street Associates, L.P., the Administrative Judge granted transfer of a generally excluded real property case that dealt with the determination of fair market value in relation to rental income, agreeing that while the case “is not an action for the payment of rent only, … the complaint raises complex questions of commercial and arbitration law and belongs in the Commercial Division.”  And there are many more helpful examples for litigators on the Commercial Division’s “Transfer Application” page.  

In short, the next time you find yourself in a position where leave to the Administrative Judge is required for assignment to the Commercial Division, remember the Commercial Division and its readily available resources has you covered. Continue Reading Help, I Need to Get My Case into the Commercial Division!! Transfer and Determinations by the Administrative Judge

Misbehaving children?  Blame the parents, right? Not so in the corporate context, at least according to Manhattan Commercial Division Justice Robert R. Reed in a recent decision, Memorial Sloan Kettering Cancer Ctr., v. Bristol Myers Squibb Co., in which he found that parent corporations will not be automatically held liable for the contracts of

Nonparty subpoenas are a useful discovery tool in commercial disputes. Particularly when the dispute involves access to or control over funds on deposit with a financial institution, the institution’s account statements, and transaction records may be critical. But stringent requirements are imposed on a party seeking disclosure from a nonparty. If the requesting party does not include sufficient detail in the subpoena to demonstrate its relevance to the pleadings, then its request might prove fruitless. A recent decision from Manhattan Commercial Division Justice Robert Reed in UKI Freedom LLC v Organization for the Defense of Four Freedoms for Ukraine, Inc. exemplifies such a shortfall.

Background

Under CPLR 3101(a)(4), a party may obtain disclosure from a nonparty of “matter material and necessary in the prosecution or defense of an action.” When disclosure is sought from a nonparty, “more stringent requirements are imposed on the party seeking disclosure” (Velez v Hunts Point Multi-Serv. Ctr., Inc., 29 AD3d 104, 108 [1st Dept. 2006]). In practice, these “more stringent requirements” are fairly minimal, but the subpoenaing party must at least “sufficiently state the ‘circumstances or reasons’ underlying the subpoena” (Kapon v Koch, 23 NY3d 32, 34 [2014]).

The nonparty, or another party to the action, may move to quash the subpoena but bears “the initial burden of establishing either that the requested disclosure is utterly irrelevant to the action or that the futility of the process to uncover anything legitimate is inevitable or obvious” (Wells Fargo Bank, N.A. v Confino, 175 AD3d 533, 534-35 [2d Dept. 2019] [internal quotations omitted]). If the movant meets this burden, then the burden shifts to the subpoenaing party to “establish that the discovery sought is material and necessary to the prosecution of the action” (id. at 535).Continue Reading Don’t Forget the Details: How Conclusory Pleadings Can Thwart Nonparty Disclosure

As many practitioners know, it is common to dismiss a complaint for pleading defects that are readily apparent.  However, another type of complaint has recently caused a significant amount of confusion in the Commercial Division – the third-party complaint. A recent decision from Bronx Commercial Division Justice Fidel E. Gomez  confirms as much, dismissing a third-party complaint where the third-party plaintiffs failed to plead any claims against the third-party defendant that were “rooted in indemnity or contribution.”Continue Reading What’s Your Contribution? A Cautionary Tale Surrounding Third-Party Complaints

The burden of establishing personal jurisdiction over a defendant rests with the plaintiff. Service of process is a necessary component of jurisdiction, and it is not complete until proof of service is filed. Ordinarily, defective service of process is not a jurisdictional defect and does not warrant dismissal. But when it comes to “affix and mail” service under CPLR § 308(4), the statutory requirement of “due diligence” must be strictly observed, otherwise dismissal may result.  A recent decision from Manhattan Commercial Division Justice Robert Reed in Arena Special Opportunities Fund, LLC v McDermott discusses just how much diligence is required.Continue Reading If the Service Was Poor, You’ll Have to Do More – How Much Diligence Is Due for Affix and Mail Service?

The old game of “hide-and-seek” brings many of us back to our childhood as one of our favorite ways to pass time during the summer. As commercial practitioners know, the concept of serving a summons and complaint in a case can be similar to playing an adult version of “hide-and-seek.”  However, the days in which service of a summons and complaint can only be accomplished by physical delivery to a defendant seem outdated in our ever-growing technology reliant society. A recent decision from Manhattan Commercial Division Justice Robert R. Reed confirms as much, finding that service of process by email will suffice when dealing with an elusive litigant.Continue Reading Ready or Not, Here I Come: The Expansion of Substitute Service by Email

Commercial Division Rule 11-f establishes that a party may serve a notice or subpoena on any legal or commercial entity. Upon receiving this notice, the responding party must then designate and produce a corporate representative for the deposition, who is prepared to testify about information known or reasonably available to the entity concerning topics listed in the deposition notice. While a corporate representative deposition may serve as a great discovery tool, it may also serve as a dangerous trap. In a recent decision from the Manhattan Commercial Division, Justice Andrea Masley reminds us that parties who attempt to depose an additional corporate representative of the same entity are fighting a losing battle.Continue Reading Commercial Division Says “No Chance” on “Second Chance” Deposition of a Corporate Representative