In a wave of rulemaking activity over the past week, the Office of Court Administration opened public comment on three significant changes to the Commercial Division Rules proposed by the Commercial Division Advisory Council. The proposed rule changes would affect three major phases of commercial litigation: document discovery, evidentiary hearings, and motion practice. Each proposed rule change aims at enhancing the efficiency with which parties litigate in the Commercial Division.
The public comment period on each of the proposed rule changes is open through May 15, 2018. We will provide an update if these proposed changes are adopted.
Proposed Amendment to Rule 11-e re: Technology-Assisted Document Review in Discovery
The first proposed rule change, announced on March 8, would add language to Commercial Division Rule 11-e governing Responses and Objections to Document Requests that encourages parties “to use the most efficient means to review documents, including electronically stored information (‘ESI’), that is consistent with the parties’ disclosure obligations under Article 31 of the CPLR and proportional to the needs of the case.” The proposed rule further states that “[s]uch means may include technology-assisted review, including predictive coding, in appropriate cases.”
The amendment promotes the use of “increasingly common discovery techniques such as keyword searching, concept searching, email threading, near-duplicate identification, clustering and predictive coding” in complex commercial cases. As explained in the accompanying memorandum, the rule change “would make clear that the Commercial Division is sensitive to the cost of document review in complex commercial cases and is in line with other courts, including other centers of high-stakes commercial litigation such as the Southern District and the Delaware Chancery Court, in supporting the use of technology-assisted review, including predictive coding, in appropriate cases.”
The new language in Rule 11-e would “incorporate proportionality as a relevant consideration in determining the appropriateness of a document review method.” As the proposal explains, “[r]egardless of the method a party uses to review a large collection of ESI for responsiveness, the result will not be perfect.” Therefore, “i[f] the methodology chosen is reasonable in the circumstances—that is, ‘if the burden of identifying additional ESI outweighs the need for additional discovery and its importance in resolving the issues in dispute’—then it should be deemed sufficient to meet a party’s disclosure obligations.”
While the proposed rule encourages the responding party to make use of technology-assisted review to meet its discovery obligations where appropriate, the proposal also points out that the amended rule “does not prevent the requesting party from challenging those means as inadequate or a production as incomplete, nor does the proposed rule constrain in any way the presiding justice’s oversight of the disclosure process.”
Proposed New Rule 9-a re: Immediate Trial or Pretrial Evidentiary Hearing
On March 12, the Office of Court Administration announced the start of public comment on proposed new Commercial Division Rule 9-a, which would “encourage parties to take advantage of CPLR provisions (CPLR 2218, 3211[c] and 3212[c]) permitting immediate trial or pretrial evidentiary hearing on a material issue of fact.”
The Advisory Council explains in its proposal that the failure to employ CPLR provisions permitting immediate trial of material factual issues “can lead to delay and inefficiency in resolving Commercial Division disputes,” “particularly in cases where the disputed issue may be dispositive, such as a statute of limitations defense or a jurisdictional defect.” As the Advisory Council observes, “[a]ll too often litigants engage in costly, broad-based litigation when a dispute might be resolved, settled or significantly narrowed in scope by targeting key issues for early limited discovery and an immediate evidentiary hearing or trial.”
Thus, the new rule aims to combat protracted litigation in cases where early disposition may conserve judicial and litigant resources. The “proposed new rule simply encourages parties to ask the court to exercise its existing authority under the CPLR to conduct pre-trial evidentiary hearings in appropriate circumstances. The proposed new Rule does not expand, modify, or otherwise affect the court’s existing authority to conduct such hearings.” Such explicit encouragement, the Advisory Council explains, would help to deter continued underutilization of pre-trial evidentiary hearings and “achieve the objectives of Chief Judge DiFiore’s Excellence Initiative which is designed ‘to improve promptness and productivity, eliminate case backlogs and delays and provide better judicial services to the public.’”
Proposed Amendment to Rule 17: Replaces Page Limits with Word Limits
The third proposed rule change announced on March 14 would replace Commercial Division Rule 17’s page limits for briefs and memoranda of law with word limits. The rule would remove “incentives to unfairly squeeze additional content into the allotted pages,” using “techniques to ‘cheat’ the limit, which include moving text into footnotes and block quotes, widening page margins, decreasing font size, and changing line spacing.” A word limit on briefs “encourages attorneys to focus on strong, concise arguments,” and improves the “readability of papers.”
The Advisory Council’s proposal notes that adopting a word limit would harmonize the Commercial Division with the Court of Appeals and Appellate Departments for the First and Second Department, as well as the United States Court of Appeals for the Second Circuit and the Delaware Court of Chancery.
Under the proposed amendment, parties would simply include a word count in “Words: ####” format in the signature block, rather than a separate certification of compliance. Like other word count rules, amended Rule 17 would exclude the caption, table of contents, table of authorities, and signature block from the word count.