New York Commercial Division: New Rules and Model Compliance Order

Practical Law Legal Update 4-605-2665 (Approx. 5 pages)

New York Commercial Division: New Rules and Model Compliance Order

by Practical Law Litigation

Limitations on Depositions

Under the new Commercial Division Rule 11-d, the number of depositions is presumptively limited to ten per party and each deposition is limited to seven hours per deponent. These limits can be changed by stipulation or by court order on a showing of good cause (Commercial Division Rule 11-d(a) and (e)).

The deposition of an entity under Civil Practice Law and Rules (CPLR) 3106(d) is treated as a single deposition even if more than one person is designated to testify on behalf of the entity (Commercial Division Rule 11-d(c)).

Fact depositions of officers, directors, principals and employees (as opposed to depositions of entity representatives under CPLR 3106(d)) are treated as separate depositions (Commercial Division Rule 11-d(d)).

In light of these changes, amendments to Commercial Division Rules 8 and 11 now direct the parties and the court to consider at the preliminary conference whether the presumptive limits should be altered (see Commercial Division Rules 8(b) and 11(c)).

Responses and Objections to Document Requests

Under new Commercial Division Rule 11-e, when responding to document requests, parties must state either:

That the production will be made as requested.
The grounds for objecting to the production with reasonable particularity.

(Commercial Division Rule 11-e(a).)

Objections must state specifically:

Whether the objection pertains to all or part of the request.
Whether any otherwise responsive documents are being withheld and, if so, under which objection.
How the responding party intends to limit the scope of production.

(Commercial Division Rule 11-e(b).)

The new rule requires document productions to be completed before the start of depositions, unless otherwise ordered by the court (Commercial Division Rule 11-e(c)).

At least one month prior to the close of fact discovery, the parties must state for each individual request:

Whether their production of documents is complete.
That there are no responsive documents.

(Commercial Division Rule 11-e(d).)

Resolving Discovery Disputes

Amendments to Commercial Division Rule 14 set out a new procedure for resolving discovery disputes, unless the assigned justice has his own rules. Under amended Rule 14, the Commercial Division prefers that discovery disputes be resolved by court conference and not motion practice.

To resolve a discovery dispute, counsel must consult in good faith with opposing counsel. If unable to resolve the dispute, counsel must submit to the court a letter, not exceeding three single-spaced pages, that:

Outlines the nature of the dispute.
Requests a telephone conference.
Represents that counsel conferred in good faith to resolve the dispute or states why no consultation occurred.

Within four business days of receipt, opposing counsel may submit a responsive letter. The court then schedules a conference, either in court or by phone.

If the dispute is not resolved by conference, the parties can still make a formal motion.

Dilatory Tactics by Attorneys

The Commercial Division rules were amended to add a Preamble to discourage misconduct by counsel. The preamble states that the Commercial Division does not tolerate:

Dilatory tactics.
Failure to appear for hearings or depositions.
Undue delay in producing relevant documents.
Conduct causing the other parties in a case to incur unnecessary costs.

The court imposes sanctions when warranted under:

Commercial Division Rule 12 (22 NYCRR § 202.70(g)), for failure to appear at a conference.
Commercial Division Rule 13(a), for failure to comply with orders setting discovery deadlines.
Commercial Division Rule 24(d), requiring appearances by counsel familiar with the matter.
CPLR 3126, for failure to comply with discovery obligations.
Part 130 of the Rules of the Chief Administrator of the Courts (22 NYCRR pt. 130), for frivolous conduct and failure to attend scheduled court conferences.

Model Compliance Conference Order

The Commercial Division has adopted an optional Model Compliance Conference Order. The model order contains multiple sections that the court and parties can conform to their case. The order keeps the court informed of the case's progress and focuses the parties on outstanding issues.

The 18-page order requires the parties to set out details on the status of the case and their claims (including counterclaims, cross-claims and third-party claims), defenses and damages.

It includes sections on:

Confidentiality agreements (Section III).
Discovery, including:
- interrogatories and document production (Section V(a) and (b));
- depositions (Section V(c));
- electronic discovery (Section V(e)); and
- expert discovery (Section V(i)).
Impleader (Section V(d)).
The Note of Issue filing deadline (Section VI(a)).
Deadlines for dispositive motions (Section VI(b)).
Alternative dispute resolution (Section VII).

For more information on practicing in New York's Commercial Division, see Practice Note, Practicing in the Commercial Division of the New York State Supreme Court.

New York Commercial Division: New Rules and Model Compliance Order | Practical Law