NYCLA Supreme Court Committee Comments on Task Force on Uniform Rules Report 6.30.21

NYCLA Supreme Court Committee Comments on Task Force on Uniform Rules Report 

To: NYSBA Task Force on Uniform Rules and NYSBA Secretary

From: NYCLA Supreme Court Committee

Date: June 30, 2021

Re: Comments on NYSBA Preliminary Report of the Task Force on Uniform Rules

 

This memorandum presents the positions of the NYCLA Supreme Court Committee (“the Committee”) on the NYSBA Preliminary Report of the Task Force (the “Task Force”) on Uniform Rules (the “Preliminary Report”). As set out below, the Committee takes the following positions;

 

1. The Committee agrees with the Task Force that the process by which the Uniform Rules were adopted, as applied to all New York State courts, was less than optimal and that input from bar associations and other interested stakeholders should have been solicited. In addition, we agree that a longer transition period for the phase in of these Rules would be appropriate.

 

2. The Committee urges that the Task Force reaffirm that its Preliminary Report and any subsequent Reports on this issue do not seek to undermine or abrogate the rules of the Commercial Division. The Commercial Division is important to the resolution of commercial cases, the economy of the State, and the continuing role of the New York court system as a national leader. Regardless of whether these rules should be extended to other courts, the Committee believes that the current Rules of the Commercial Division implemented in 2014 have functioned well, have been carefully crafted to conform to the CPLR, and constitute an improvement over the rules that prevailed before those changes.

 

3. For that reason, the Committee urges that the Task Force refrain from taking the position that any Rules of the Commercial Division or any of the Uniform Rules violate the CPLR. We note, for reasons set out below, that the purported discrepancy between those rules and the CPLR is not nearly as clear as the Preliminary Report contends.

 

4. The Committee recognizes that certain rules of the Commercial Division may present problems when they are extended to cases outside of the Commercial Division. The Committee supports NYSBA’s efforts to study the effects of those rules on cases in various practice settings across the state.

 

5. Consistent with the unanimous position of the NYSBA Committee on Civil Practice Law and Rules in 2018 and the NYSBA Commercial and Federal Litigation Section in 2014, the Committee believes, subject to further review of the issue, that certain Rules of the Commercial Division should be extended to courts outside the Commercial Division because those rules, as a general matter, promote judicial efficiency. Those rules include Commercial Division Rules 11-a, 11-b, 11-d, and 11-e. Uniform Rules 202.20, 202.20-a, 202.20-b, 202.20-c (discussed in the Preliminary Report at 18-19, 21-24). These rules relate to interrogatories, depositions, privilege logs, and document requests. In addition, the Committee supports Uniform Rule 202.20-e, which requires adherence to scheduling orders.

 

6. The Committee reserves the right to interpose further comments in the event that the Task Force does not adopt its recommendations on any of the issues set out above. More generally, the Committee’s work is ongoing, and it reserves the right to supplement or amend its conclusions.

 

1. Overview

NYSBA deserves commendation for its great work in addressing the issues presented by the sudden, state-wide implementation of the Uniform Rules and in presenting its preliminary views on those issues. We share the concern that not all of the Uniform Rules may be well-suited to all courts outside the Commercial Division.

 

The Committee agrees that input from bar associations and other interested stakeholders should have been solicited before the Uniform Rules were adopted. In addition, we agree that a longer transition period for the phase in of these Rules would have been, and still is, appropriate.

 

At the same time, however, as set out below, we believe that some of the Uniform Rules would be appropriate for use in courts outside the Commercial Division. In addition, we urge the Task Force to carefully weigh whether any of its positions undermine the rules of the Commercial Division and carry the potential for disrupting the important work of the Commercial Division.

 

2. The Task Force Should Not Undermine the Rules of the Commercial Division

 

The Commercial Division was created “to maintain New York’s status as the premier state for the conduct of business.” Business leaders agree with this assessment. The Business Council of New York State applauded the work of the Commercial Division, describing the court as “the envy of businesses in other states.” The American Corporate Counsel Association has expressed its appreciation and support for the Commercial Division and urged other states to follow New York’s lead.

 

Indeed, in December 2018, the New York City Council issued a proclamation stating, among other things, that

 

New York owes much of its world-class status as an economic engine to its world-class court: the Commercial Division of the New York Supreme Court; and

 

The Commercial Division is a critically important forum for addressing complex commercial disputes. Litigants all over the world look to the Commercial Division’s expertise across the broad and complex expanse of commercial law to reach successful and efficient resolutions; and

 

The Commercial Division is uniquely qualified to increase taxable revenue for the City of New York while stimulating job growth. It strengthens New York City’s ability to attract and retain businesses, which add jobs, fuel demand/or real property, and increase tax revenue. The tax revenues from local businesses also provide financial support for the New York State judicial system; and

 

Local businesses rely on the Commercial Division for efficient, just resolution of complex commercial disputes, without which businesses would be less inclined to reside and conduct business in New York City. Leaders of national and global businesses located within our five boroughs recognize the significant role that specialized business courts play in their business decisions.

 

The Commercial Division is important to New York lawyers and the Task Force should not undermine the operation of the Commercial Division. We do not read the Preliminary Report as suggesting that the Commercial Division Rules are inappropriate for use in the Commercial Division itself. We urge that the Task Force insert a statement making clear that it does not seek to challenge the Commercial Division’s Rules. It is the view of the Committee that the Rules of the Commercial Division have worked effectively and that the Rule changes implemented in 2014 have enhanced judicial efficiency and promoted the efficient resolution of commercial cases.

 

3. The Task Force Should Not Attack the Commercial Division Rules as Inconsistent with the CPLR

 

To the extent that the Task Force attacks the Uniform Rules as inconsistent with the CPLR, such an attack would undermine the corresponding Rules of the Commercial Division, reducing the Commercial Division’s efficiency.

 

Such an attack on the Rules of the Commercial Division lacks support in any case law. Indeed, although the most recent version of the Commercial Division Rules have operated for seven years, with some additions along the way, the Task Force does not cite a single case that has sustained an attack on any of those rules based on the CPLR, the state or federal constitutions, or any other law.

 

Moreover, it is far from clear that such an attack would be viable. For example, the Preliminary Report attacks the sanctions (cost shifting) in the privilege log rule, 202.20-a. Preliminary Report at 8. It contends that the court is without power to impose sanctions if a party insists upon a burdensome document-by-document log. But NYSBA’s Commercial and Federal Litigation Section in May 2014 specifically wrote that “[t]he Section agrees that cost shifting is one sensible way of dealing with a party’s insistence on a document-by-document log.” The Commercial and Federal Litigation Section also stated that sanctions under the privilege log rules would be supported by a court’s “well established power to limit any type of discovery under CPLR §3103 to avoid, in appropriate settings, the unreasonable expense, burden or prejudice associated with document-by-document logging.” Id. (citing American Broadcasting Companies, Inc. v. Aereo, Inc., 2013 WL 139560 (S.D.N.Y. Jan. 11, 2013) (holding that a party may move for a protective order to avoid needing to create a document-by-document privilege log)

 

The Commercial and Federal Litigation Section correctly looked to federal case law as guidance in determining the propriety of the Commercial Division’s rules. In federal courts, litigants have attacked rules similar to those at issue here as inconsistent with the Federal Rules of Civil Procedure. For example, the Preliminary Report contends that the rule requiring a meet and confer before discovery disputes are heard violates the CPLR.  Preliminary Report at 9 (discussing Uniform Rule 202.20-a). Meet and confer obligations are an established part of the legal landscape and have been held to be consistent with rules that are silent as to whether a meet and confer obligation is necessary.  See Mendoza v. Amalgamated Transit Union Int’l, 2020 U.S. Dist. LEXIS 77722, *21-22 (D.Nev. 2020) (citing DarbeeVision, Inc. v. C&A Mktg., Inc., No. CV 18-0725 AG (SSX), 2019 U.S. Dist. LEXIS 134914, 2019 WL 2902697, *5 (C.D. Cal. Jan. 28, 2019) (local meet and confer rule is not inconsistent with FRCP sanctions rule because “the Federal Rule is silent as to whether a party seeking sanctions based on the failure to appear at a deposition must meet and confer. There is no express statement in the Rule affirmatively exempting a party from meeting and conferring in such circumstances.”).

 

Likewise, the Preliminary Report condemns Rule 202.8-g as contrary to the summary judgment rules of the CPLR.  Preliminary Report at 10.  But federal courts have consistently upheld analogous local rules in the federal courts as consistent with the Federal Rules of Civil Procedure and if necessary have harmonized the application of those local rules to ensure consistency with the Federal Rules. See e.g., Reese v. Herbert, 527 F.3d 1253, 1269 (11th Cir. 2008) (local rule requiring statement of material fact). Local rules may validly place conditions upon the exercise of rights granted under Rule 56. See Marshall v. Gates, 44 F.3d 722, 725 (9th Cir. 1994) (local rule does not conflict with Rule 56 because it does not eliminate a hearing right under rule 56; it merely “places a condition on that right.”). We do not intend the discussion above to be a full compendium of the case law regarding whether the Uniform Rules are consistent with the CPLR. Rather, we present that discussion to illustrate that the issue is more complicated than the Preliminary Report acknowledges. Accordingly, we urge the Preliminary Report to reconsider its contention that these rules violate the CPLR, a contention which could have the effect of undermining the Rules of the Commercial Division in a way that would disrupt its operations. We reserve the right to supplement this analysis depending upon the content of the final Report issued by the Task Force.

 

4. Certain Rules Appear to be Workable in Cases Outside the Commercial Division

 

The Committee does not see any reason why the rules relating to adherence to discovery schedules (rule 202.20-e) should not be applied outside of the Commercial Division. The Preliminary Report states that the sanctions imposed by the rule “could be overly harsh.” Preliminary Report at 23. However, no reason is provided for why the sanctions, which are entirely within the discretion of the presiding judge, are more likely to be harsh under this rule than under any other rule.

 

The Committee also supports the application of several discovery rules to courts outside the Commercial Division. As an appendix to the Preliminary Report indicates, the NYSBA Committee on Civil Practice Law and Rules in 2018 unanimously supported the extension of a number of Commercial Division Rules to non-Commercial Division cases. This Committee agrees that the application of certain of these rules outside the Commercial Division would promote judicial efficiency. These rules include Commercial Division Rules 11-a (limits on the number of interrogatories), 11-d (limits on depositions), and 11-e (document requests). These are set out in the Uniform Rules as Rules 202.20, 202.20-b, and 202.20-c (discussed in the Preliminary Report at 18-19, 21-24). The Committee also supports the application of the privilege log rule outside the Commercial Division, Uniform Rule 202.20-a (discussed in the Preliminary Report at 19).

 

As a general matter, these rules, which impose presumptive limits upon the number of interrogatories and the time for depositions, are better suited for smaller cases outside the Commercial Division than they are for the often larger and more complex cases in the Commercial Division, which may require more discovery than the presumptive limits imposed by the rules. Yet, even in the Commercial Division context, these presumptive limits have worked well and have generally streamlined discovery and improved efficiency. In 2014, the NYSBA Commercial and Federal Litigation Section endorsed the limits on interrogatories in the Commercial Division “as a meaningful step towards greater efficiency of litigation in the Commercial Division.” Our Committee also endorsed the interrogatory limit when it was considered for the Commercial Division in 2014. Experience has shown that parties and judges are willing to alter the discovery limits in the Rules when the occasion (and simple fairness) warrants it. We see no reason why this combination of presumptive rules and appropriate flexibility should not continue to work outside the Commercial Division.

 

The categorical privilege log rule (Rule 11-b) is also better suited to smaller cases where the avoidance of the expense associated with the preparation of voluminous privilege logs is especially necessary. This rule, too, has worked in the Commercial Division. As the NYSBA Commercial and Federal Litigation Section stated in May 2014: “There is growing recognition by courts and the organized bar that the substantial costs and burdens associated with document-by-document privilege logs often outweigh their benefits.”

 

SUMMARY

Our Committee thanks NYSBA for considering our comments, which are preliminary and as to which we reserve the right to amend. We appreciate NYSBA’s work in bringing these issues to the attention of the legal community and we look forward to further dialogue on this important subject.

Footnotes

1. The New York County Lawyers Association was founded in 1908 as one of the first major bar asociations in the country that admitted members without regard to race, ethnicity, religion or gender. Since its inception, it has pioneered some of the most far-reaching and tangible reforms in American jurisprudence, including through the work of its many committees that provide in-depth analysis and insight into legal practice areas. The views expressed here are those of the Supreme Court Committee only, have not been approved by the New York County Lawyers Association Board of Directors, and do not necessarily represent the views of the Board.
2. The NYSBA CPLR Committee statement is attached as an exhibit to the Task Force Report. The Reports of the Commercial and Federal Litigation Section can be found at http://ww2.nycourts.gov/rules/comments/index.shtml
3. See Eisenberg & Miller, The Flight to New York: An Empirical Study of Choice of Law and Choice of Forum Clauses in Publicly Held Company Contracts, 30 Cardozo L. Rev. 1475, 1478, 1485-86 (2009) (finding that 46% of contracts used New York law clauses, that New York law is “overwhelmingly favored” in financing contracts, and stating that “courts that are positively perceived by the commercial community obviously enhance a state’s effort to be a contractually designated choice of law,” and noting that the Commercial Division is perceived to be attaining “some success”)
4. NYS Courts, The Commercial Division: A 21st Century Forum for Commercial Litigation, Bing (Feb. 2, 2016),
   Click here to view (last visited, June 28, 2021)
5. N.Y. State Unified Court Sys., Commercial Division – NY Supreme Court History, http://ww2.nycourts.gov/courts/comdiv/history.shtml (last visited June 28, 2021)
6. Id.
7. New York City Council, Proclamation, Business Courts Blog (Dec. 20, 2018), https://www.businesscourtsblog.com/wp-content/uploads/2019/01/City-Council-Proclamation- 01541344xB05D9.pdf (last visited, June 28, 2021).