For commercial practitioners who happen to be fans of the TV series “The Office,” Dwight Schrute’s “Learn Your Rules, You Better Learn Your Rules” jingle perfectly describes the constant theme of practicing before the New York Commercial Division. Since its inception in 1993, the Commercial Division has garnered the reputation of placing a heavy emphasis on rules for purposes of efficiency. As readers of this blog may know, those who fail to comply with the Commercial Division Rules, and/or the individual practice rules of a particular Commercial Division judge, will suffer the consequences. A recent decision issued by Justice Robert R. Reed illustrates this principle.

In Latin Mkts. Brazil, LLC v McArdle, a renowned conference promoter in the investment management industry (“Plaintiff”), commenced an action in 2020 against two former employees (“Defendants”), alleging that Defendants stole and used its trade secrets to form a competing entity in the same industry. The parties appeared before the Court for a Compliance Conference, and the Court issued a Compliance Conference Order that granted Plaintiff “leave to file a notice of motion to compel forensic inspection of the computers involved in the subject litigation.”

Plaintiff filed a motion to compel Defendants to respond to its discovery demands and produce, among other things, (i) certain computers belonging to Plaintiff, which the parties agreed to by stipulation, (ii) electronic discovery from local hard drives of computers used by Defendants in their business operations, and (iii) responses to Plaintiff’s Second Notice for Discovery and Inspection, and First Set of Interrogatories. Plaintiff argued that it obtained permission to make this discovery motion at the prior Compliance Conference.

In opposition, Defendants argued that Plaintiff’s motion to compel should be denied based on Plaintiff’s noncompliance with Manhattan Commercial Division Justice Robert Reed’s Part 43 Rule 6(h), which states that “discovery motions are discouraged,” and Commercial Division Rule 14, which requires that “discovery disputes are preferred to be resolved through court conference as opposed to motion practice.” In fact, prior to filing their opposition papers, Defendants’ counsel emailed Plaintiff’s counsel, requesting that Plaintiff withdraw its motion on the basis that it was only authorized to file a motion to compel for the “forensic inspection of the computers” at issue. Plaintiff’s counsel refused to withdraw its motion, and argued on reply that it properly included discovery issues that were raised in previous correspondence with the Court, but not addressed in the Compliance Conference Order.

Justice Reed denied Plaintiff’s motion in its entirety on the basis that “the filing of the instant motion was done without leave of court and in direct contravention of Commercial Division Rules 14 and 24, and Part Rule 43 6(h).” Justice Reed cited to a recent decision, Maple Drake Austell Owner, LLC v D.F. Pray, Inc., in which he denied a motion to strike on the basis that defendant “failed to comply with this court’s explicit rules … [by] never submitt[ing] a letter to the court outlining any of the discovery disputes.”

Upshot:

In light of the famous idiom – “penny wise and pound foolish” – practitioners who fail to adhere to the Commercial Division Rules and/or the individual rules of a particular Commercial Division judge are not only wasting their time, but also the court’s time, and their client’s money. In the words of my colleague Matt Donovan,“[c]heck the rules, folks. Always check the rules.”

 

The New York Commercial Division was created in 1993 “to test whether it would be possible, by concentrating on commercial litigation, to improve the efficiency with which such matters were addressed by the court and, at the same time, to enhance the quality of judicial treatment of those cases.”  By implementing rules and procedures developed with efficiency in mind and after careful consultation with Judges and practitioners alike, the Commercial Division has become a resounding success; it is one of the most efficient and effective forums in the world for the litigation of complex civil disputes.

It should therefore come as no surprise that other New York courts have taken notice of the innovative rule changes contributing to the success of the Commercial Division.  As Chief Administrative Judge Marks observes: “through the work of the Commercial Division Advisory Council – a committee of commercial practitioners, corporate in-house counsel and jurists devoted to the Division’ s excellence – the Commercial Division has functioned as an incubator, becoming a recognized leader in court system innovation, and demonstrating an unparalleled creativity and flexibility in development of rules and practices.”

Now, by Administrative Order effective February 1, 2021, the Uniform Civil Rules for the Supreme Court (the “Uniform Rules”) will incorporate, in whole or in part, nearly 30 Commercial Division Rules.  Some of these changes were foreshadowed by my colleague Paige Bartholomew in 2018 when the Unified Court System’s Advisory Committee on Civil Practice requested public comment on whether to adopt nine of the Commercial Division’s Rules.   Continue Reading Innovation Becomes the Norm: Commercial Division Rules Shape Revised Uniform Rules for the Supreme Court and County Court

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 readers of this blog know by now, we here at New York Commercial Division Practice frequently post on new, proposed, and/or amended rules of practice in the Commercial Division.  Just last month, for example, my colleague Viktoriya Liberchuk posted on the Advisory Council’s recent proposal to amend ComDiv Rule 6 (“Form of Papers”) to mandate hyperlinks in legal briefs, allowing adversaries, judges, and other court personnel immediate electronic access to cited cases, statutes, and other supporting documentary evidence.

We’ve also reported on ComDiv decisions taking lawyers to task for failing to comply with the particularities of practicing in the Commercial Division — both with respect to noncompliance with the Rules themselves, as well as noncompliance with the individual practice rules of this or that ComDiv judge.

In one of the first ComDiv decisions of 2020, Manhattan Commercial Division Justice Andrea Masley addressed the propriety of a post-argument submission by a defendant under ComDiv Rule 18 on a motion to dismiss.

Hawk Mtn. LLC v Ram Capital Group LLC involved statute-of-limitations issues vis-à-vis a promissory note and the validity of a related release.  Following oral argument on its dismissal motion, the defendant submitted a recent federal-court decision out of the Eastern District of Pennsylvania, apparently in an effort to resolve a dispute over whether the parties in the Hawk Mtn. case qualified as “affiliates” under, and therefore were covered by, the release in question.  Citing the exception to ComDiv Rule 18’s general prohibition against “sur-reply and post-submission papers” — namely, that “counsel may inform the court by letter of the citation of any post-submission court decision that is relevant to the pending issues, but there shall be no additional argument” — Judge Masley allowed the defendant to supplement the record on its dismissal motion but made perfectly clear that she would “disregard any arguments made in [the defendant’s] accompanying letter.”

Having seen the Hawk Mtn. decision, and given the recent turn of year, we thought it a worthwhile exercise to take a quick look back at 2019 for other decisions addressing issues of (non)compliance with the ComDiv Rules.  What follows are a couple of notable examples from the Manhattan Commercial Division last year — both from Justice Joel M. Cohen as it just so happens — addressing ComDiv Rules 13 and 14 concerning expert disclosure and pre-motion conferences respectively.

In 30-32 W. 31st LLC v Heena Hotel LLC, Judge Cohen granted the defendants’ motion to strike an expert rebuttal report submitted by the plaintiffs in a dispute over the development and sale of a hotel.  Judge Cohen found that the report did not comply with ComDiv Rule 13 in a number of important respects, including primarily the expert’s failure to provide a “complete” statement of his opinions and to identify any documentation he relied upon to support his opinions.  The incompleteness of the expert’s report was perhaps captured best in his own words — to wit:

At this time and on a preliminary basis I find that I do not concur with the conclusion reached by [the defendants’ expert].  Additional forensic accounting work is required, and I reserve the right to amend and supplement this draft.

The draft report also made repeated references to “disputed factual assertions” and “significant intercompany transactions” but altogether failed to specify the facts in dispute or the transactions at issue.  Such a report, according to Judge Cohen, “provides insufficient notice of any opinions [the expert] proposes to offer or the bases for those opinions” and thus offends the fundamental purpose behind expert disclosure — namely, “No Sandbaggers Allowed!”

In Village Green Mishawaka Holdings, LLC v Romanoff, Judge Cohen shot down a red-herring argument and related “barbed references” in an attorney affirmation when denying a non-party’s motion to quash a subpoena.  Judge Cohen attacked the motion as “procedurally improper” as well, citing ComDiv Rule 14’s prohibition on filing motions without first requesting a pre-motion conference and finding that “there [wa]s no indication that [the non-party] ever requested such a conference prior to filing this motion.”  Judge Cohen also took issue with the form of the attorney affirmation, citing his own practice rules prohibiting so-called “brief-irmations” and “brief-adavits” submitted in lieu of a proper memo of law:  “All motion papers … must include a Memorandum of Law,” and “Affidavits or Affirmations of counsel containing legal argument should not be submitted.”

Check the rules, folks.  Always check the rules.

Did you know that the New York State United Court System publishes an annual report covering the advances, challenges, and achievements in and by our New York State courts over the past year? If you did not, now is the time to head over to the NYCourts website and browse the recently released 45th Annual Report covering the 2022 calendar year.

The Annual Report is a visual reminder that we practice in “one of the largest, busiest, most complex court systems in the world,” as Acting Chief Administrative Judge Tamiko Amaker describes. Accompanied by vivid photos of some of the people and places involved with our courts, the 2022 Annual Report highlights the UCS’s initiatives toward equal justice within the courts (pgs. 15-23) and public access to justice (pgs. 25-39), as well as a fiscal overview of the UCS (pg. 55), and caseload statistics (pgs. 59-69).

Of particular interest to readers of this blog is the feature on the Commercial Division.

Since its creation in 1995, the Commercial Division of the New York State Supreme Court has transformed business litigation and made the State a preferred forum for complex business disputes. Renowned as one of the world’s most efficient venues for the resolution of commercial disputes and located in the world’s leading financial center, the Commercial Division is available to businesses of all sizes, both inside and outside the State of New York

Ever advancing the ball in substantive areas of the law and procedural rules and practices, the Commercial Division adopted and enacted 11 of the new procedural rules and amendments proposed by the Commercial Division Advisory Council in 2022 (which this blog has spotlighted), to wit:

As we move further into 2023, keep an eye on this blog for updates on developments in the Commercial Division’s rules and practices. As we’ve said before, always check the rules!

Hat tip to Chair of the Advisory Council and friend-of-the-blog, Robert L. Haig, for continuing to share with us the good work being done by the Advisory Council throughout the year.

Litigation in the Commercial Division is efficient and effective in part because its judges strictly enforce the Commercial Division Rules.  Those unsure can peruse Matt Donovan’s “Check the Rules” series on this blog, including (apropos the subject of this post) his post concerning the amendments to Commercial Division Rule 17.

One of the most significant rules of the Commercial Division is the limitation on the size of submissions.  In 2018, the Commercial Division Rules were amended to implement a word limit rather than a page limit.  According to a Memorandum by the Commercial Division Advisory Council, that rule change was designed to reduce incentives for attorneys to fit more text into the page limit. Commercial Division Rule 17 now provides:

Unless otherwise permitted by the court: (i) briefs or memoranda of law shall be limited to 7,000 words each; (ii) reply memoranda shall be no more than 4,200 words and shall not contain any arguments that do not respond or relate to those made in the memoranda in chief; (iii) affidavits and affirmations shall be limited to 7,000 words each. The word count shall exclude the caption, table of contents, table of authorities, and signature block.”

One need not look far to determine how seriously the Commercial Division Justices take the word count limitations.  Justice Borrok’s Part Rules provide that “Word limits specified in Commercial Division Rule 17 will be strictly enforced, unless permission to expand the word limits is granted in advance of the filing of the papers.”  Justices Grays (Queens County), Chimes (Erie County), Gomez (Bronx County), Reed (New York County), and Masely (New York County) all have similar rules.  Justice Jamieson of the Westchester County Commercial Division reminds counsel, “All papers must comply with the applicable provisions of the CPLR and with Rules 16, 17 and 18 of the Commercial Division Rules. In addition, the font size of text and footnotes must be no smaller than 11 point. Papers which do not comply may be rejected.”

Penalties for non-compliance with the word limits can be severe.  In Levine v Cohen, 2019 N.Y. Slip Op. 34059[U], 22 [N.Y. Sup Ct, Nassau County 2019], Nassau County Commercial Division Justice Timothy Driscoll struck an attorney’s affirmation that (among other defects) violated the commercial division word limits.

Last month, New York County Commercial Division Justice Joel M. Cohen issued another warning to the Commercial Division bar about improper attempts to circumvent the word limits of Commercial Division Rule 17 by filing multiple documents in the place of one.  In Durst Pyramid LLC v. Silver Cinemas Acquisition Co., 2022 NY Slip Op 31958(U), the Plaintiff filed a motion for summary judgment that included a nearly 7,000 word memorandum of law, but that memorandum of law did not include a statement of facts.  Rather, the memorandum simply referred the Court to four additional affidavits.  In his ruling on Plaintiff’s motion for summary judgment, Justice Cohen observed:

A brief note on process: Motions for summary judgment require Rule 19-a statements, but such a statement is not a substitute for including a Statement of Facts (with citations to the record) in the Memorandum of Law.  A statement of facts is an integral part of a summary judgment brief, not merely an appendix. And counsel may not evade the applicable word-count limits by omitting facts sections from their briefs. Here, Landlord’s opening submission went on for 414 pages, including a nearly 7,000-word memorandum of law and numerous exhibits, yet did not include a facts section. Instead, counsel referred the Court to four separate affidavits, totaling an additional 11,816 words. Doing so, in the Court’s view, circumvented the wordcount limit set forth in the Commercial Division Rules. While the Court will not strike the opening brief in this instance, counsel are advised that such submissions will not be considered in the future.”

(emphases added, citations omitted)

Counsel have been warned.  The Commercial Division word limitations exist to keep arguments concise, not test whether lawyers can “respectfully refer the Court to” or “incorporate herein” other filings into their memoranda.

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 just as important.

On March 21, 2023, the Commercial & Federal Litigation Section of the New York State Bar Association hosted the latest in its series of virtual programs pairing young lawyers with Commercial Division judges. The programs are geared to addressing what young lawyers should know about appearing before the judges and providing some practice tips.  

The special guest for the March 21 event was Nassau County Commercial Division Justice Timothy S. Driscoll and was co-moderated in part by Farrell Fritz’s very own James Maguire, a frequent contributor to this blog.

In addition to letting the attendees get a glimpse into his background and some of his personal interests, as well as regaling them with colorful stories of his tenure as a practicing attorney and judge, Justice Driscoll provided very useful practice tips for practitioners who come before him. Below is a summary of some of the key takeaways from the conversation.

  • Get in the Courtroom and Know Your Case Through and Through

Justice Driscoll noted at the outset of the conversation that getting as much experience as you can in the courtroom – even if that just means carrying a senior lawyer’s litigation bag – is critical. As he noted, “the courtroom is the front row seat to the greatest show on earth, which is humanity.”

Justice Driscoll also stressed the importance of being well-prepared and understanding what your case is about and its inflection points of both strength and weakness. He mentioned specifically that lawyers in the Commercial Division are particularly adept at this, and the high-level intellectual stimulation is what gets him so excited about being a judge in the Commercial Division and coming to work every morning.

  • Understand the Principles of Civility

One of Justice Driscoll’s biggest pet peeves is when litigators do not respect their adversaries and do not understand the principles of civility. Justice Driscoll advised that ad hominem attacks and excessive adjectives and adverbs within your legal brief designed to diminish your opponent’s position, as well as interruptions during oral argument, are both unappreciated and a waste of time.  As Justice Driscoll stated, rather than addressing your adversary at oral argument, “you are talking to the Court, and the Court is talking to you.”  

  • Legal Writing: Get to the Point and Provide Binding Authority

Justice Driscoll emphasized that when it comes to legal writing, the most important thing to keep in mind is to get to the point! He stressed that many practitioners lose sight of the main goal of a legal brief, which is to tell the judge (1) what you want him to do, and (2) why he should do it.  For Justice Driscoll, the “why” should be supported by recent, binding, primary authority (no obscure cases from before he was born or from a trial court across the country) ideally from the New York Court of Appeals or the Appellate Division. He further advised that, while long string cites of authority might show off your research skills, they do not help a litigant’s cause in the same way that analogies to the facts of the binding precedential cases do. Justice Driscoll also emphasized the importance of a strong Preliminary Statement within a legal brief since that is the only place within which to make pure legal argument without the fear of citation. 

  • Justice Driscoll’s Method of Reviewing Legal Briefs

Justice Driscoll also shared invaluable insight into his brief-reviewing process.  He noted that he always starts by reviewing the papers in reverse chronological order: reply brief first, then the opposition, and then the opening brief.   For that reason, he cautioned that reply papers should not merely regurgitate arguments made in the opening brief since it is the ultimate opportunity to tell the Court point blank why your adversary is wrong and why you are right.  He stressed that because reply papers provide the benefit of the last word, the opportunity to submit reply papers should always be taken advantage of.

When reviewing a legal brief, Justice Driscoll advised that he scans the brief’s Table of Contents and point headings since those are the “skeleton” of the brief and assist him with easily navigating through thousands of words and getting to the bottom line.  For that reason, it is important that brief headings be made argumentative with the word “because” baked in (i.e., “The First Cause of Action Should Be Dismissed Because . . .”)

Finally, Justice Driscoll advised that since he reads so many sets of legal papers throughout the day, he appreciates when briefs are easy to read and “visually appealing.” To that end, he suggested that practitioners use a font that “jumps off the page” like Century Schoolbook or Georgia (rather than the default font of Times New Roman).

The Commercial Division’s recent conversation with Justice Driscoll reinforces the idea that getting to know the audience – i.e., your Judge – is an invaluable tool for legal advocacy that should always be taken advantage of.  Litigators should use their best efforts to learn about the judges of the Commercial Division and attend programs where they can gain insight into their likes and dislikes.  Whether legal briefs will eventually deviate from Times New Roman . . . well, that remains to be seen!

As frequent readers of this blog are no doubt aware, the ten-volume practice treatise entitled Commercial Litigation in New York State Courts and edited by distinguished commercial practitioner Robert L. Haig (the “Haig Treatise”) – now in its 5th edition – is an invaluable guide for litigators navigating the inner workings of the New York State Court system.  With contributions by over 250 authors, the Haig Treatise is a must-have in every commercial litigator’s library, as it is chock-full with insights, strategies, and tactics essential to litigators and corporate in-house counsel alike.  With over 150 chapters, the Haig Treatise is a one-stop destination providing guidance on virtually every topic, procedural or substantive, that may arise in your commercial-litigation practice.

It’s no surprise that the Haig Treatise devotes an entire chapter to the topic of practicing before New York’s Commercial Division.  After all, Mr. Haig chairs the Commercial Division Advisory Council, whose primary purpose is to advise the Chief Judge of the State of New York on all matters related to the Commercial Division, and is one of the leading advocates for the Commercial Division as being among the premier business courts in the country – nay, the world.   

Chapter 39 of the Haig Treatise, entitled “Practice Before the Commercial Division,” is of particular interest to us here at New York Commercial Division Practice for obvious reasons.  Authored by the Hon. Brian M. Cogan of the EDNY and co-managing partner Alan M. Klinger of Stroock & Stroock & Lavan LLP, the chapter provides an all-fours summary for those who may be less familiar with practicing in the Commercial Division – including but not limited to issues related to eligibility for assignment, unique discovery rules, motion practice, ADR requirements, and confidentiality – much of which has served as blog fodder for us over the years.

But the Haig Treatise’s chapter on the Commercial Division also offers some unique practice insights worth expanding on here.  For example, the chapter spends a fair amount of time on the subject of forum shopping – particularly from the perspective of weighing the advantages and disadvantages of litigating in the Commercial Division as opposed to federal court, which for many years enjoyed preferential status among commercial litigators in the New York metro area. 

It’s common knowledge, of course, that plaintiffs’ counsel angle to commence suit in the forum expected to be most favorable to their clients.  Likewise, defendants’ counsel often take the opportunity to remove or transfer a case to a forum more favorable to their own clients.  On this, the authors of the ComDiv chapter suggest that the Commercial Division has “leveled the playing field” in the forum-selection game, and they provide invaluable strategic considerations for litigators when making this choice.

To be sure, since its inception in the mid-1990s, the Commercial Division has become a more attractive setting for business litigation in New York.  In fact, it has for many become the preferred forum for litigating complex business disputes.  The ComDiv chapter authors explain that one of the primary reasons for this is because of the expertise and sophistication of the ComDiv judges on all matters commercial.  As the preamble to the ComDiv Rules suggests, “the [Commercial] Division’s judges are chosen for their extensive experience in resolving sophisticated commercial disputes. Unlike jurists in other civil parts in New York’s court system, Commercial Division justices devote themselves almost exclusively to these complex commercial matters.”  This constitutes a legitimate counterpoint to a common argument in favor of litigating commercial disputes in federal court due to the business-law expertise of many of its judges, who often are appointed to the bench after having spent years litigating complex commercial matters at major law firms.

Another consideration weighing in favor of choosing to litigate before the Commercial Division as opposed to federal court is the comfort of knowing that, once commenced or transferred, your case will be heard by one of a select number of judges.  For example, for those looking to litigate in Manhattan, there are eight Commercial Division judges to whom your case could be assigned versus the approximately 50 SDNY district and magistrate judges sitting on Pearl Street or Foley Square.  Likewise, if you’re looking to litigate in or around Westchester County, you can be certain that your case will be assigned to one or the other of Commercial Division Justices Linda Jamieson or Gretchen Walsh versus the approximately 10 SDNY district and magistrate judges sitting on Quarropas Street in White Plains.

By the way, if you find yourself persuaded by the ComDiv chapter authors on this topic, Appendix C of the ComDiv Rules makes available sample forum-selection clauses, the express purpose of which “is to offer contracting parties streamlined, convenient tools in expressing their consent to confer jurisdiction on the Commercial Division.”

The authors of the ComDiv chapter also make a point of extolling the technological virtues of practicing before the Commercial Division – including, for example, the introduction of the next-gen “Courtroom for the New Millennium” and other innovative developments toward remote or virtual court participation.  

In 2004, long before the COVID-19 pandemic, the Supreme Court in New York County initiated a pilot program entitled “CourtCall,” which permitted attorneys to participate in certain court conferences telephonically.  Despite its obvious benefits – e.g., efficiency, expediency, cost-savings, etc. – the program didn’t gain much traction in the non-commercial parts.  The same can’t be said for the Commercial Division however.  As noted by the ComDiv chapter’s authors, “one legacy of the program [wa]s that the Commercial Division appear[ed] to have a greater degree of receptivity to the use of teleconferencing than in the non-commercial parts.”  

Such appearances no doubt have become realities over the last couple of years, as the Commercial Division has been compelled by the circumstances presented by COVID to make a massive pivot toward remote or virtual participation as a “new norm” for commercial litigation in New York – including, for example, new or amended rules on remote depositions, remote appearances, and virtual evidentiary hearings.   

As with many chapters in the Haig Treatise, the ComDiv chapter closes with some helpful practice aids, checklists, and forms – in this case specifically geared toward practicing in the Commercial Division – including ComDiv assignment and preliminary-conference forms, confidentiality stipulations, and much more.

In sum, chapter 39 of the Haig Treatise on practicing before the Commercial Division – as with the Treatise as a whole – is a well-organized, straightforward, and practical tool that all New York commercial litigators should have on their shelves.  

As readers of this blog are aware—click here, here, here, and here for related posts—the CPLR 3213 motion for summary judgment in lieu of complaint can be a powerful tool to secure an expedited judgment, “meld[ing] pleading and motion practice into one step, allowing a summary judgment motion to be made before issue [is] joined.”  Weissman v. Sinorm Deli, 669 NE 2d 242 (1996)

The New York legislature prescribes only a narrow set of circumstances under which CPLR 3213 may be applied.  When an action is based upon “an instrument for the payment of money only,” CPLR 3213 can save a plaintiff time and money by skipping past the pleadings and discovery stages of litigation, and barreling straight toward a judgment.

That said, Section 3213 of the CPLR is generally unavailable if the sued-upon instrument is ambiguous on the payment obligation and requires proof beyond the face of the instrument, as was recently discussed by the First Department in Talos Capital Designated Activity Co. v 257 Church Holdings LLC (2022 NY Slip Op 03186).

Talos involved a mezzanine lender who sought to collect, pursuant to CPLR 3213, money owed to the lender under certain loan guaranties and pledges following the borrower’s failure to meet its obligations at the “Five Year Paydown,” a five-year checkpoint of the loan.

In the guaranty context, in order to demonstrate entitlement to judgment under CPLR 3213, the plaintiff must show: (1) the existence of the guaranty; (2) the underlying debt; and (3) the guarantor’s failure to perform under the guaranty.

The First Department modified the judgment entered by the trial court in favor of the lender against all defendants, limited to just the judgment against the guarantor under the loan’s Payment Recourse Guaranty.

Rather than looking at the Payment Recourse Guaranty in isolation, the First Department held that when read together with the underlying loan agreement, the Payment Recourse Guaranty was ambiguous as to the triggering event of guarantor’s obligations. Therefore, the lender could not show that the guarantor actually defaulted on his obligations under the Payment Recourse Guaranty.

The underlying loan agreement provided that a nonpayment default by the borrower at the Five Year Paydown date was not considered a default under the loan agreement. Instead, upon a nonpayment default at the Five Year Paydown date, certain penalties were applied (calculated per the loan agreement) and the lender was entitled to exercise a series of elective remedies under certain specifically named guaranties and guaranty pledges. Any remaining deficiency after lender exercised its remedies under these guaranties and pledges would remain outstanding as part of the principal balance due upon the maturity date of the loan.

Critically, the loan agreement did not specifically name the Payment Recourse Guaranty as one of the guaranties and pledges that lender could exercise its remedies against. Thus, the First Department held that the instrument sued upon (the Payment Recourse Guaranty, as informed by the underlying loan agreement) was ambiguous as to whether the appellant-guarantor’s obligation was triggered upon a nonpayment default of the Five Year Paydown, or upon the maturity date of the loan when the borrower’s full obligation becomes due.

Given this material ambiguity, the First Department vacated that part of the judgment as to the guarantor and deemed the moving and answering papers to be the complaint and answer, respectively.

KEY TAKEAWAY

Section 3213 of the CPLR can be an efficient tool to streamline actions that fall within its ambit, but courts are careful to limit the motion’s applicability to only those instruments that are unambiguously clear as to a defendant’s payment obligation.

Aficionados of Commercial Division practice know that the ComDiv rules originally were — and, as evidenced by an Administrative Order earlier this month, continue to be — modeled after the federal rules.  Efficiency begets efficiency.

Earlier this month, on October 4, Chief Administrative Judge Lawrence K. Marks promulgated new ComDiv Rule 35, which, as of December 1 of this year, will require non-governmental corporate parties to file at the commencement of an action or proceeding a Commercial Division version of the disclosure statement required under FRCP 7.1.

Among the many checks and balances built into our adversarial system of justice are rules and procedures designed to root out conflicts of interest, including interests of an economic nature.  Such rules and procedures affect parties, lawyers, and judges alike.

The corporate disclosure requirement under FRCP 7.1 for example, allows a judge assigned to a new case to determine whether the judge has an economic interest in any corporate party or any of the party’s affiliated corporate entities.  Thus, counsel filing a new action in federal court on behalf of a corporate client must “identif[y] any parent corporation and any publicly held corporation owning 10% or more of its stock,” or otherwise “state[] that there is no such corporation.”

In September of last year, the Subcommittee on Procedural Rules to Promote Efficient Case Resolution sent the Commercial Division Advisory Council a memo proposing a rule requiring similar statements for cases filed in the Commercial Division, which would “require minimal financial information, but which [would] help protect the judge and the parties from litigating a case where the judge has or could be accused of having an improper interest or bias. ”

Flagging a certain tension between private interest and public disclosure, and perhaps anticipating some pushback from the bar in this regard, the Subcommittee looked to precedent to reiterate the purpose behind the rule and to support its promulgation in the Commercial Division:

Corporate disclosure statements exist to assist district judges in determining whether they might have a financial interest in a corporate entity that is related to a corporate party in a case before them and therefore requires their recusal. Recusal issues involve the operations of the courts and the judicial conduct of judges, and thus are matters of utmost public concern (citations and quotations omitted).

In particular, the Subcommittee cited a 2016 decision out of the Southern District of Georgia, Steel Erectors, Inc. v. AIM Steel Int’l, Inc., 312 F.R.D. 673, 676 (S.D. Ga. 2016), for the proposition that the public’s interest in a disclosure of this kind trumps a private corporation’s interest in concealing the identity of its parent, even if disclosure would mean a reduction in market share for the party corporation.

New ComDiv Rule 35 is virtually identical to FRCP 7.1:

Rule 35. Disclosure Statement.

(A) Who Must File: Contents. A non-governmental corporate party and a non-governmental corporation that seeks to intervene must file a disclosure statement that:

(1) identifies any parent corporation and any publicly held corporation owning 10% or more of its stock; or

(2) states that there is no such corporation.

(B) Time to File: Supplemental Filing. A party or a proposed intervenor must:

(1) file the disclosure statement with its first appearance, pleading, petition, motion, response, or other request addressed to the court; and

(2) promptly file a supplemental statement f any required information changes.

Again, the corporate disclosure requirement under new ComDiv Rule 35 goes into effect on December 1, 2021, a little under six weeks from the date of this post.