In In re Everquote, Inc. Securities Litigation, 2019 N.Y. Slip Op. 29242, No. 651177/2019, 2019 WL 3686065 (Sup. Ct. N.Y. Cnty. Aug. 7, 2019), Justice Andrew Borrok of the New York County Commercial Division stayed discovery pending a motion to dismiss a federal securities class action pursuant to the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), diverging from the handful of state courts that have grappled with that statute’s application since the Supreme Court’s ruling last year in Cyan, Inc. v. Beaver County Employees Retirement Fund, 138 S.Ct. 1061 (2018) (“Cyan”). The PSLRA provides for an automatic discovery stay pending adjudication of motions to dismiss private securities actions, and has been interpreted to be a procedural mechanism meant to curb litigation abuses in securities cases. See 15 U.S.C. § 77z(b)(1). In his decision, Justice Borrok joined the ever-growing list of judges tasked with deciding whether such mechanisms apply to state court securities litigation in the wake of Cyan. Continue Reading
Pursuant to New York Civil Practice Law and Rules § 306-b, a plaintiff is required to serve a summons and complaint within 120 days of commencing an action. Although a court may grant an extension of this deadline for good cause shown or in the interests of justice, Judge Richard M. Platkin recently found that neither justified an extension of the plaintiff’s time to serve its summons and complaint in Plank, LLC v. Dutch Village, LLC, et al., 62 Misc. 3d 1220(A) (N.Y. Sup. Ct. Feb. 7, 2019). In that case, the Court rejected any argument that the plaintiff’s failure to serve the complaint was excused by its pro se status, especially given that New York prohibits limited liability companies like the plaintiff from appearing pro se. Continue Reading
During her annual State of Our Judiciary speech on February 26, 2019, Chief Judge Janet DiFiore announced that the Commercial Division would be expanding to Bronx County. As stated by Chief Judge DiFiore, the expansion is “in recognition of the economic resurgence taking place in the Bronx” and “the number of commercial cases filed in Bronx Supreme Civil.” Although the change was effective on April 1, 2019, the Commercial Division has yet to announce which justices will be assigned to these new Commercial Division openings or amend the Commercial Division Rules to provide for, among other things, a jurisdictional threshold for the Commercial Division in Bronx County.
In Kyowa Seni, Co., Ltd. v. ANA Aircraft Technics, Co., Ltd., Docket No. 650589/2017, 2018 WL 3321410 (N.Y. Sup. Ct. July 5, 2018), Justice Saliann Scarpulla of the New York County Commercial Division joined in a long line of New York federal cases that have vitiated the registration theory of jurisdiction. Continue Reading
In an effort to streamline litigation in the Commercial Division, the Commercial Division Advisory Council has continued with its revisions to the Commercial Division Rules by recently implementing one new rule encouraging early adjudication on threshold issues, and revising another rule to approve the use of technology-assisted review in discovery. Continue Reading
Four of the proposed amendments to the Commercial Division Rules, which were discussed in an earlier blog post while the rules were under consideration by the Office of Administration, were adopted over the summer and have now gone into effect in the Commercial Division. Continue Reading
On May 22, 2017, Governor Andrew M. Cuomo announced that Justices Anil C. Singh and Jeffrey K. Oing had been appointed to fill vacancies on the bench of the Appellate Division, First Department. June 12, 2017 was the last day on the Commercial Division bench for both Justices. Since their departure for the First Department, Justices Singh and Oing have been missed on the Commercial Division bench, as the Court has worked to reassign their substantial caseloads. Acting Administrative Judge George J. Silver, who has temporarily stepped into the role left by prior Administrative Judge Peter H. Moulton (who was also elevated to the Appellate Division with Justices Singh and Oing) and the Office of Court Administration have been responsible for filling these vacancies on the Commercial Division bench. Continue Reading
In Gordon v. Verizon Communications, Inc., No. 653084/13, 2017 WL 442871 (N.Y. App. Div. Feb. 2, 2017), the Appellate Division of the Supreme Court of the State of New York, First Judicial Department (the “First Department”), reversed an order denying plaintiffs’ motion for final approval of a proposed non-monetary settlement in a shareholder class action litigation related to Verizon Communication Inc.’s (“Verizon”) acquisition of Vodafone Group PLC’s (“Vodafone”) stake in Verizon Wireless (“VZW”). With its decision, the New York Appellate Division breathed new life into beleaguered disclosure-only class action settlements, and modernized what it believed had become an outdated analytical framework for approving class action settlement agreements. It also appeared to accord special weight to provisions in such agreements whereby corporations promise to obtain fairness opinions in connection with future transactions in determining the overall fairness of the agreements. Thus, while non-monetary class action settlements are increasingly disfavored in other courts — most notably, in the Delaware Court of Chancery — New York courts remain receptive to their utility.
The New York Commercial Division is poised to continue its rules revamp, with six new rules proposals announced since October. While these proposals would not alter practice before the Commercial Division in the same manner that the 2014 and 2015 updates did, they do raise important practice considerations for parties and counsel who are currently, or expect to be, engaged in practice before the Commercial Division.
The Office of Court Administration is currently accepting public comments on most of the proposed rules described below, which will likely go into effect later this year or early next year.
In Matter of CDR Créances S.A.S. v First Hotels & Resorts Invs., Inc., 2016 Slip Op. 04888 (1st Dep’t June 21, 2016), the Appellate Division reversed a December 11, 2014 Order by New York County Commercial Division Justice Lawrence K. Marks, which denied respondent First Hotels & Resorts Investments, Inc.’s (“First Hotels’”) motion to dismiss the action for lack of personal jurisdiction. The action related to an $82 million loan made in 1991 by a predecessor in interest of petitioner CDR Créances S.A.S. (“CDR”) to Euro-American Lodging Corp. (“Euro-American”). The loan was made to enable Euro-American to acquire Manhattan real estate and convert it into a hotel. After Euro-American defaulted on that loan, CDR obtained a foreign judgment against Euro-American that CDR domesticated in New York. CDR subsequently commenced an action and obtained a New York judgment against a handful of individuals affiliated with Euro-American based upon allegations that those individuals engaged in a conspiracy to convert the proceeds of the loan for their own benefit. One of those individual judgment debtors was Maurice Cohen, one of the principals of Euro-American.