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

As any practitioner litigating a case before the Commercial Division knows, and as we have mentioned time and again on this blog, it is critical to know the Part Rules of the particular judge assigned to your case.  But getting to know your judge – including the judge’s individual preferences and style – may be

Commercial Division Rule 11-b governs a party’s obligation to produce a log of documents withheld on the basis of privilege.  Enacted in 2014, Rule 11-b substantially streamlines the privilege log process by encouraging parties, “where appropriate,” to exchange categorical privilege logs, rather than document-by-document logs.  Rule 11-b instructs the parties to meet-and-confer over the issue