Over the past year or so, we have made a point of highlighting in the “Check the Rules” series on this blog periodic updates to the individual practice rules of certain Commercial Division Justices, including Justice Eileen Bransten in New York County (twice, in fact), Justices Marguerite A. Grays and Leonard Livote in Queens County, and Justice Sylvia G. Ash in Kings County.

Continuing with this theme of local-rule vigilance, Commercial Division practitioners should take note some recent changes to the individual practice rules of Manhattan Commercial Division Justice O. Peter Sherwood.

Justice Sherwood’s Practices for Part 49, which were revised as of this month, provide some notable additions (and omissions) from his prior rules, which dated back to May 2014 before most of the Commercial Division Advisory Council’s new-rule proposals and amendments were adopted and implemented.

Be Prepared, Be Authorized. Justice Sherwood opens his practice rules with an express and emphatic reminder to attorneys practicing in his Part of the requirements under Rule 1 of the Commercial Division Rules that “counsel . . . must be fully familiar with the case . . . and fully authorized to enter into agreements, both substantive and procedural, on behalf of their clients.” In other words, appearing in Part 49 is no “cattle-call.” Attorneys should have factual command of their cases, as well as the requisite authority to bind their clients.

Separate and Describe Your Exhibits. Justice Sherwood now requires attorneys practicing in his Part who wish to annex exhibits to their correspondence or motion papers to separately e-file their exhibits and designate them with a “descriptive title.” In other words, a simple designation of “Exhibit A” won’t cut it. Attorneys must provide a description (e.g. “Operating Agreement, dated as of September 20, 2018”) so that adversaries and court personnel viewing the docket or other notice of filing can immediately understand what has been filed.

Get Advance Permission to Adjourn Appearances. Justice Sherwood now requires that requests for adjournment be submitted a full two business days in advance of the scheduled appearance. Justice Sherwood conferences his cases on Tuesdays, so that means attorneys must get their requests for adjournment in by no later than Thursday of the prior week.

Check Your E-Mail. Justice Sherwood’s new rules provide that the court may choose to communicate with counsel via e-mail “regarding scheduling matters or to make certain inquiries.” Note, however, that this line of communication only goes one way. It does not mean that attorneys practicing in Part 49 may “initiate communication with the court via email” or “use e-mail to make arguments.”

Complete Party Discovery Before Bothering Non-Parties. Justice Sherwood “strongly encourages” attorneys practicing in his Part to “attempt to confine their requests to parties to the action and resort to third-party disclosure only when it reasonably appears that the information being sought is otherwise unavailable.” Justice Sherwood also requires that all non-party subpoenas be “simultaneously served” on all parties, and that all documents and information produced in response be exchanged among all parties within five days of receipt.

Follow Instructions When Seeking to File Under Seal. Justice Sherwood’s updated practice rules provide specific instructions concerning the filing of documents under seal:

  • Applications to file under seal must be made by Order to Show Cause, which must be preceded by a meet-and-confer regarding the documents proposed for seal.
  • Motions will be considered in light of the limitations imposed under applicable case law, and the movant must propose redactions “as opposed to wholesale sealing.”
  • Any document proposed for seal must be filed in its original, un-redacted form as an exhibit, with the proposed redacted version filed “as a subset of that exhibit.”
  • All motions must be accompanied by a joint index of the documents proposed for seal, including the basis for sealing and any objection thereto.

Finally, as for notable omissions, Justice Sherwood appears to have dispensed with his former requirement – which, as far as I’m aware, was entirely unique to his Part – that  motion submissions also be provided to the court “in .rtf format on a computer disk.”

**Nota Bene** – Attention Kings County Commercial Division practitioners: How much is your case worth? The general practice rules for the Kings County Commercial Division also were updated this month to double the monetary threshold from $75,000 to $150,000.

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Disclosure of Electronically Stored Information (“ESI”) has become a staple in commercial cases.  Of course, with the vast number of documents and ESI being reviewed and the increased complexity in the review process, the risk of inadvertent production of privileged information is at its highest.  The inadvertent production of privileged material often leads to lengthy, costly litigation, the consequences of which can be disastrous to litigants. 

While the most efficacious approach for addressing privilege waiver as a result of inadvertent disclosure would be an amendment to the CPLR, there’s no telling whether the Legislature will pass such an amendment, or when.  Accordingly, the subcommittee of the Commercial Division Advisory Council (the “Subcommittee”) has proposed an “interim measure” to address these concerns.  Specifically, the Subcommittee proposed a new amendment to Commercial Division Rule 11-g (which addresses confidentiality orders in the Commercial Division) to incorporate specific “privilege claw-back” language into the confidentiality order.  Parties employing the language would agree to:

  • Implement and adhere to reasonable procedures to prevent the disclosure of privileged information;
  • Take reasonable steps to correct errors when protected information is inadvertently produced;
  • Return or destroy copies of inadvertently produced protected information upon request of the producing party;
  • Neither challenge the producing party’s document review procedure or its efforts to rectify the production error, nor claim that the return of the protected information has caused the receiving party to suffer prejudice.

This language is consistent with existing New York case law regarding inadvertent privilege waiver, which provides that the inadvertent production of documents does not constitute a waiver if: (i) the producing party had no intention of producing the document; (ii) the producing party took reasonable steps to ensure that the document was not disclosed; (iii) the producing party took prompt action to rectify the inadvertent production; and (iv) the party receiving the inadvertently produced document would not suffer prejudice by having to return the document.  See, e.g., AFA Protective Sys., Inc., v City of New York, 13 AD3d 564, 565 [2d Dept 2004].

The proposed amendment seeks to protect litigants from the inadvertent disclosure of protected information and reduce the number of disputes arising from inadvertent productions.  And, by incorporating language consistent with New York case law, the proposed amendment ensures that the parties take steps necessary under New York law to avoid an inadvertent waiver and take prompt action to rectify the inadvertent production if it occurs.

There’s a little over a month left to chime in on this important proposed amendment.  Persons wishing to comment on the proposal 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, New York 10004.  Comments must be received no later than January 16, 2018.