As outlined in previous posts, the New York Commercial Division seeks to be a forward-thinking forum that adopts rule changes aimed at increasing efficiency and decreasing litigant costs. In August, a revised Model Preliminary Conference Order form was adopted for optional use by Division judges, even though the previous Preliminary Conference Order form had been approved only two years ago. The need for a revised form highlights the rapid changes in Commercial Division rules and the Division’s continuous efforts to stay up to date. The new form incorporates specific descriptions of many of the recently adopted rules and contains significant revisions to the sections governing pre-answer motion practice, document production, interrogatories, depositions, disclosure disputes, and e-discovery. This post discusses four of the more significant rule changes that are reflected in the new form.
Just as the revised federal rules incorporated a “proportionality standard” in Rule 26(b)(1) that went into effect towards the end of 2015, the preamble to the Rules of Practice for the Commercial Division was similarly amended in November 2015. The purpose of this amendment is to emphasize the importance of proportionality in the pursuit of discovery and the resolution of discovery disputes. Last year, the Commercial Division recognized that the cost of discovery was often disproportionate to the amount in dispute. The placement of proportionality in the preamble is no accident. Neither is its prime location on the revised Preliminary Conference form. The discovery section of the revised form quotes the preamble to the Rules of Practice and begins with a general admonition that parties should be “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.”
Limitations on Interrogatories and Depositions
At the beginning of 2014, there were virtually no limitations in the Commercial Division rules concerning interrogatories and depositions. In an effort to rein in the costs and time devoted to discovery, new rules were propagated to limit the number and scope of these discovery devices. Parties are now restricted to 25 interrogatories which, with limited exceptions, may only concern the identity of witnesses, the computation of damages, and the location and custody of documents and information. Additionally, parties are now only allowed, absent court order, 10 depositions of no more than seven hours each. This is consistent with Federal Rule 30(a)(2)(A)(i) and the procedural rules of several other states. These are substantial deviations from prior practice in the Division and are explicitly referenced on the revised Model Preliminary Conference Order form.
The revised form also reflects proposed changes to the Commercial Division Rules concerning deposition of entity representatives. The new rules concerning entity deposition, which are still awaiting final action by the Board of Judges, are modeled after Rule 30(b)(6) of the Federal Rules of Civil Procedure. The proposed rules, like their federal counterparts, directs a party to list in its deposition notice the topics about which it seeks to ask questions. These topics must be listed “with reasonable particularity.” The responding party must then respond by designating and producing organizational witnesses who are prepared to testify about information known or reasonably available to the entity concerning those topics. Before the advent of the new rules, the only governing rule was CPLR 3106(d) which does not impose an affirmative requirement that ensures deponents be reasonably informed about the relevant deposition topics.
Alternate Dispute Resolution
Encouraging a broader mix of Alternate Dispute Resolution (ADR) mechanisms is another point of emphasis in the Commercial Division. Last year, the rules were amended to provide for summary jury trials. Such streamlined proceedings often last one day because of the limited number of witnesses; reduced time for jury selection and opening/closing statements; and relaxed evidentiary rules. This summer, the rules were also amended to encourage settlement conferences before a judge other than a judge assigned to the case. Now, the revised Preliminary Conference form has been reworked to focus parties on possible ADR methods to be used and the timing of the use of ADR. The form states that judges want “litigants and their attorneys, on a continuous basis going forward, to consider any and all mechanisms to resolve the issues before them.”
The New Model Preliminary Conference Order form can be found here.