State of New York

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A welcome change may be afoot for New York lawmakers, as New York Senate Bill S5162 recently passed the Senate and Assembly judiciary committees. The bill, which may soon be delivered to the Governor for signature, would amend CPLR 2106 to streamline the civil action process, ending the current notarization requirement to allow anyone to sign an affirmation sworn under penalty of perjury in place of an affidavit in a civil action within the state. Specifically, S5162 would amend CPLR 2106 to read as follows:

In a seismic change to its evidentiary jurisprudence, New York recently enacted legislation that significantly broadens the admissibility of statements made by a party’s agent or employee.

Until now, New York’s Civil Practice Law and Rules (“CPLR”) had an oft-maligned (or, perhaps sometimes celebrated) quirk—statements of a party’s agent or employee were inadmissible as hearsay unless made by someone with actual authority to speak on behalf of the party. This was in stark contrast to the Federal Rules of Evidence, which require only that the employee or agent be speaking “on a matter within the scope of that relationship and while it existed.”

Amid the COVID-19 pandemic, New York Attorney General Letitia James has stated her office will be aggressive in prosecuting price gouging. On March 10, AG James stated, “we will not tolerate schemes or frauds designed to turn large profits by exploiting people’s health concerns.” The NY Office of Attorney General (“OAG”) is tasked with enforcing New York General Business Law Section 396-r, which prohibits parties from selling or offering certain goods or services at an unconscionably excessive price during an abnormal disruption in the market.

What would companies need to do to comply with the law?

The Stop Hacks and Improve Electronic Data Security (SHIELD) Act imposes requirements in two areas: cybersecurity and data breach notification. The cybersecurity provisions of the proposed SHIELD Act would require companies to adopt “reasonable safe-guards to protect the security, confidentiality and integrity” of private information. The Act provides examples of appropriate administrative, technical, and physical safeguards, such as designating an employee to oversee the company’s data security program; identifying “reasonably foreseeable” risks to data security; selecting vendors that can maintain appropriate safeguards; detecting, preventing and responding to attacks and system failures; and preventing unauthorized access to private information. 

In November 2017, New York Attorney General Eric Schneiderman introduced the Stop Hacks and Improve Electronic Data Security (SHIELD) Act (the “Act”) in the state’s Legislature. Companies – big and small – that collect information from New York residents should take note, as the Act could mean increased compliance costs, as well as potential enforcement actions for those that do not meet the Act’s requirements. This blog post provides a breakdown of the essential components of the SHIELD Act and information on how to comply with this potential new law.

Currently, the New York Civil Practice Law and Rules permit temporary restraining orders (“TROs”) to be issued without notice to the opposing party – though this practice is discouraged by most judges. CPLR § 6313(a). Notice is not required  if the moving party can demonstrate that there will be significant prejudice by reason of giving the notice. Commercial Division Rule 20. When notice is required, however, there is no requirement that the movant attach the underlying papers describing the ground for issuing a TRO.

In late 2016, the Commercial Division Advisory Council proffered a proposed rule, Proposed Rule 11-h, which would amend Rule 216.1(a) of the Uniform Rules for Trial Courts in New York to define the “good cause” under which court records could be sealed. “Good cause” to seal court records, as defined by the proposed rule, “may include the protection of proprietary or commercially sensitive information, including without limitation, (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.” The Advisory Council has explained that the revised rule is designed to “clarify and highlight” that “the protection of proprietary sensitive business information in commercial disputes is an appropriate goal of, and ‘good cause’ for, sealing of selected documents or portions of documents filed in the course of litigation.” This is in keeping with a principal goal of the Advisory Council: to further enhance the reputation of the Commercial Division as a business friendly court.

A unanimous New York Court of Appeals recently held that the acceptance of an auction bid for the sale of a syndicated loan may constitute a final and binding trade, even if there is language indicating that the agreement is “subject to” the execution of a mutually acceptable, written agreement. The ruling overturns a New York Appellate Court decision that would have permitted parties to change their minds after agreeing to trades during a competitive online auction. The holding of New York’s highest court establishes that oral and electronic agreements in the debt and equity market can be sufficient under certain circumstances to form final and binding agreements.