The Commercial Division Rules are once again the subject of several proposed amendments, as detailed below. While these proposals are not as far-reaching as some of the rule changes enacted in 2014, they nonetheless raise important practice considerations for parties and their counsel engaged in practice before the Commercial Division. Expect to see these new rules take effect later this year.
Depositions of Corporate Representatives
On April 7, 2015, the Office of Court Administration announced a proposal to amend Rule 11-d of the Commercial Division rules with regard to the notice and taking of depositions of corporate entities. The proposal would provide a procedure similar to that of Rule 30(b)(6) of the Federal Rules of Civil Procedure governing corporate depositions in federal practice, i.e., the deposing party would be able to serve a deposition notice on an entity stating the topics of inquiry, and the responding party would be obligated to produce a witnesses (or witnesses) on behalf of the entity who is able to offer testimony on each of the specified topics. Unlike Rule 30(b)(6), the proposed Commercial Division rule would require the responding party to identify the designated deponent (or deponents) at least 10 days before the scheduled deposition. The Office of Court Administration is accepting comments on this proposal through June 5, 2015.
Revisions to Eligibility Requirements
On April 14, 2015, the Office of Court Administration proposed an amendment to 22 NYCRR § 202.70(b) and (c), relating to eligibility criteria for matters that may be heard in the Commercial Division. The Court is accepting comments on these proposed amendments through June 10, 2015.
The first proposed amendment, to 22 NYCRR § 202.70(b), would subject actions to compel or stay arbitration and to affirm or disaffirm arbitration awards to the same eligibility criteria as other matters. In other words, such actions would have to involve one of the other commercial issues set forth in 22 NYCRR § 202.70(b) and either meet the monetary threshold or involve equitable and/or declaratory relief. International arbitration matters would still be eligible for the Commercial Division regardless of the monetary amount.
As a reminder, the monetary threshold for assignment to the Commercial Division is currently $500,000 in New York County, $200,000 in Nassau County, $150,000 in Kings County, $100,000 in Suffolk and Queens Counties and the Eighth Judicial District, and $50,000 in Onondaga and Albany Counties.
The second proposed amendment, to 22 NYCRR § 202.70(c), would make disputes arising out of home improvement contracts for residences of 1-4 units ineligible for the Commercial Division.
Rules of Practice re: Proportionality in Discovery
On April 9, 2015, the Office of Court Administration proposed a tweak to the preamble of the Commercial Division Rules, which echoes a proposed revision to the Federal Rules of Civil Procedure. The proposed amendment to the Federal Rules of Civil Procedure, specifically Rule 26(b)(I), is as follows:
Parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.
In considering the problem that “litigants view the cost of discovery as out of proportion to the issues at stake in the litigation,” the Office of Court Administration has suggested that the preamble of the Commercial Division Rules be amended to state that “[t]he Commercial Division is mindful of the need to conserve client resources, encourage proportionality in discovery, promote efficient resolution of matters, and increase respect for the integrity of the judicial process.” (revision in italics).
The Office of Court Administration is accepting comments on this proposal through June 8, 2015.
Proposed New Status Conference Order
Finally, on April 16, 2015, the Office of Court Administration announced a proposed new model status conference form for use in the Commercial Division. Like the new model preliminary conference and compliance conference orders, it significantly expands upon the amount of case detail the parties are required to report. Counsel would be well-advised to come to status conferences with the majority of the eleven page document already completed and prepared to discuss any outstanding issues. The comment period on this proposal ends June 10, 2015.