This month, the Office of Court Administration publicized three proposed changes to the NY Commercial Division Rules that received slightly less attention than the publication of the infamous Donald Trump/Billy Bush videotape and more ‘Wikileaked’ Hillary Clinton campaign emails. As with the changes we’ve discussed in previous posts, these proposed rules are designed to enhance efficiency, decrease costs, and promote the Commercial Division as a hospitable forum for commercial litigants. The three new proposals are discussed below.
Disclosing Anticipated Trial Length:
Currently, under Commercial Division Rule 26, parties are obligated to provide the court with “a realistic estimate of the length of the trial” at least ten days prior to trial or such other time as set by the court. In an effort to make clear the power of the court to set trial time limitations, the proposed amendment to Rule 26 would additionally require parties, if requested by the court, to provide estimates of the total number of hours which each party believes will be necessary for its direct examination, cross examination, redirect examination and argument during trial. Courts are expressly authorized to set the total number of hours permitted to each party, and to extend the total number of trial hours if a court so decides. Judges would be free to use or not to use the new procedure. The Commercial Division Advisory Council intends that this rule will allow courts to better manage their own dockets, while also encouraging counsel to focus on their theories of the case in advance and consider how to best structure the case within established limitations. This should minimize repetition and mitigate some of the costs associated with unduly lengthy trials – in addition to better focus the issues for juries.
A proposed amendment to Commercial Division Rule 6 would make clear that judges have the discretion to require that parties employ hyperlinks in electronically filed documents. Hyperlinks benefit judges, clerks and litigants by permitting them to move quickly to different parts of the filed document, or to review cited materials and sources over the internet. The proposal will limit use of hyperlinks to reference other portions of the filed document, other NYSCEF filings, government websites, and “statutes, rules, regulations and court decisions.” Of course, the benefit of reviewing hyperlinked documents may be offset by the extra time it will take to file. Because of this, the Commercial Division’s Subcommittee on the Use of Technology advised hyperlinking is “generally useful,” but may not be appropriate in all cases. This explains the discretionary nature of the rule.
Under Seal Filing:
Finally, the Advisory Council is proposing an addition to Rule 11-h governing the sealing of court records to clarify that “good cause” to seal includes the protection of proprietary or commercially sensitive information. Examples of this include: (i) trade secrets, (ii) current or future business strategies, or (iii) other information that, if disclosed, is likely to cause economic injury or would otherwise be detrimental to the business of a party or third-party (e.g., pricing information that may be used by competitors). One reason parties opt for arbitration instead of bringing suit in the Commercial Division is that arbitration typically offers much greater safeguards for confidential information. Unlike courts, arbitrators do not usually need to balance the public’s interest in viewing the documents parties seek to file. Underlying this new rule is a desire to compete with alternative forums like arbitration.
The proposals discussed above are consistent with recent Commercial Division initiatives to promulgate rules that explicitly allow procedures which judges were previously permitted to utilize within their discretion. The purpose of codifying these procedures is apparently to encourage greater judicial use. For example, the Commercial Division recently codified a rule allowing for the submission of direct testimony by affidavit and a rule providing parties with the option to request settlement conferences by a judge other than the judge assigned to hear the case. Both of these rule clarifications were adopted in part because of prior positive experience with these procedures within the Commercial Division itself. It is too early to tell if these ‘rules of encouragement’ are having the desired effect.