Current Section News:
Message from the Chair
The New Preliminary
Conference Order as a
Catalyst for Change
In the book The Power of
Habit, Charles Duhigg discusses
how Paul O’Neill, the
new CEO of Alcoa, effected
radical reforms in Alcoa’s
culture, leading to dramatic
increases in profitability
and morale. When O’Neill
took the helm, Alcoa seemed
adrift; its efforts to expand
into new product lines were unsuccessful and the stock
price was falling. There seemed to be a need to focus on streamlining the business or more clearly defining the business model.
But, curiously, instead of addressing these issues, O’Neill made worker safety his primary goal when he became CEO in 1987. His theory, which proved to be dramatically effective, was that by focusing on one key issue—a keystone habit, as Duhigg calls it—he could and did transform Alcoa’s culture. Duhigg writes, “Keystone habits start a process that, over time, transforms everything.… If you focus on changing or cultivating keystone habits, you can cause idespread shifts.… This is the final way that keystone habits encourage widespread change: by creating cultures where new values become ingrained.” (The Power of Habit, at 100, 109, 123.)
By now, you might be asking why I am writing about the late 1980s transformation of Alcoa in a column about today’s Commercial and Federal Litigation Section. The answer is that I hope and believe that the Commercial Division is embarking on a similar path right now. In the past few months, several new Commercial Division Rules have been added that, like O’Neill’s keystone safety habit, have the possibility of transforming Commercial Division practice into an even more cost-effective and efficient method of resolving business disputes. As examples, consider the new requirements that cases be designated for the Commercial Division within ninety days of service of the complaint (Sections 202.70(d)-(e) of the Uniform Rules for the Supreme and County Courts) and the model Preliminary Conference Order Form (Administrative Order AO/80a/14 of the Chief Administrative Judge of the Courts).
Under the new rules, at the earliest stages of a case, the parties will know whether the Commercial Division Rules will apply and who their judge will be. In addition, in the cases in which the new PC Order Form is used, the parties will be expected not only to set a detailed schedule for document disclosure, interrogatories, depositions, and expert disclosure, but also to discuss at the Preliminary Conference the necessity of a confidentiality order, their theories of the case and/or defenses, any key electronic discovery concerns that they expect may arise (including methods for searching and reviewing electronically stored information, preservation concerns, privilege logs, clawback provisions, and costs), and the form and timing of any alternative dispute resolution mechanism that might facilitate settlement.
Just as the introduction of the Individual Assignment System in 1986 set new expectations for both the courts and the litigants about how a case would proceed—parties could no longer seek delay and reconsideration by bringing sequential motions before different judges—the new PC Order and early assignment permit the Court to take a more active role in keeping a case on track towards timely resolution and force the parties to consider, address, and potentially prevent certain document preservation, confidentiality, and witness problems before they might balloon into much larger disputes. So far, I’ve had one Preliminary Conference using the new form and the impact was striking. The case involves multiple defendants and until that point, counsels’ interaction had been limited, strained, and uncoordinated.
There had been dispositive motion practice and disputes about discovery and confidentiality. However, the new PC Order Form’s breadth and detail—coupled with Commercial Division Rule 8’s requirement that the parties meet and confer about the issues that would be discussed at the conference—led the parties to squarely address their views about how the litigation would proceed. And the PC that followed yielded an especially meaningful discussion with the Court about how to resolve and address certain scheduling disputes that the parties still had. The new PC Order had given counsel and the case direction and the Court a better understanding of the issues in the case.
Federal practitioners know well the value of a substantive initial conference and thoughtful pre-conference planning. The 1993 Amendments to Federal Rules of Civil Procedure Rule 26(f), which have required parties to address many of the same issues identified in the new PC Order Form, have fostered a culture of discovery planning and case management and active court supervision. So, for example, in one case that I had, after the parties in a contract dispute submitted their joint Rule 26(f) report to District Judge Brian Cogan, Judge Cogan held the Rule 16 Conference in his chambers, reviewed the parts of the contract that were in dispute, asked specifically about the custodians and witnesses with knowledge, and set a tight time frame for discovery that led to prompt settlement on terms that both parties found to be fair. I have seen similar successes on an ad hoc basis in the Commercial Division over the years as particular judges—such as Justice Scheinkman in Westchester—have crafted detailed preliminary conference orders and required parties to make joint submissions before the Preliminary Conference. “Keystone habits transform us by creating cultures that make clear the values that, in the heat of a difficult decision or a moment of uncertainty, we might otherwise forget.” (The Power of Habit, at 125-26.) So, too, do keystone habits transform us when, in the heat of litigation battles and zealous advocacy, we might forget the clients’ and courts’ desires to expeditiously resolve cases. It is my hope and expectation that through the new Commercial
Division Rules, New York commercial litigation will be transformed for the benefi t of the business community and our judicial system.
Notes of the Section’s Executive Committee Meetings
September 17, 2014
Guest speaker Justice Vito M. DeStefano of the Commercial Division, Nassau County, discussed cuts in the Nassau County courts and his perspective on several new Commercial Division rules. The Executive Committee discussed the 2015 Annual Meeting, Committee Chair and District Leader updates, upcoming CLEs in Rochester and Buffalo, a social media and jury instructions survey, and the Woman on the Move progra
August 12, 2014
In this special meeting, the Executive Committee approved, with amendments, two reports of the Section’s Commercial Division Committee: a report supporting a proposed Commercial Division rule change concerning sanctions and a report supporting a proposed Commercial Division rule concerning the presumptive limitations on the number and length of depositions.
July 8, 2014
In this special meeting, the Executive Committee approved the Section’s CPLR Committee Report supporting the Proposed Amendment to CPLR 3122-a.
Stress Benefits of New York for International Arbitration
By Suevon Lee
As New York
strives to host international arbitrations in a global marketplace, there are
plenty of practical reasons to look to the city as the location of choice,
according to panelists who spoke at the New York International Arbitration
Center on Thursday.
good restaurants, entertainment and sight-seeing, New York has a designated
judge to handle all international arbitration-related matters in Manhattan’s
Commercial Division and a year-old, state-of-the-art center where arbitrations
can take place, the panelists told a roomful of about 50 attorneys.
NYIAC and the Commercial and Federal Litigation Section of the New York State
Bar Association, the event reminded New York’s legal community about the
viability of this city as a seat when international arbitrations are
increasingly heading to Paris, London, Singapore, Geneva and other overseas
Moderated by Charles Moxley, Jr., an
arbitrator and mediator with MoxleyADR, the panelists included Justice Charles
Ramos; Stephen Younger, a partner at Patterson
Belknap Webb & Tyler and a NYIAC founding board member;
Alexandra Dosman, NYIAC’s executive director; Ted Semaya, a partner at Eaton
& Van Winkle; and Gregory Arenson, a partner at Kaplan Fox and outgoing
chair of the Comm-Fed section.
Ramos was designated in the Commercial Division to iron out dispute for parties
engaged in international arbitration. The judge said he’s so far had a handful
of cases—mostly orders of attachment—but he urged those in the room to bring
international arbitration cases go on his calendar immediately, and since he
typically issues decisions from the bench, parties can have “an appealable
order once you leave the courthouse.”
said he does not find arbitration cases to be that complex nor involve
thousands of documents—ensuring quick service to parties. In addition, he
reminded the room that designating New York’s Commercial Division at the outset
to handle these kinds of disputes guarantees the right to an interlocutory
appeal—or appeal of any non-dispositive decision to the appellate court.
distracted by a federal criminal docket,” Ramos said, distinguishing the
Commercial Division from the federal courts. “We spit this stuff out.”
observed a few trends about arbitration.
arbitration is becoming a more important area because so many businesses are
insisting on it,” Ramos said. “The bad news is that it’s becoming so expensive
and more like litigation.”
But the judge
noted that he and his colleagues in the Commercial Division “rarely” set aside
arbitration awards upon a party’s challenge.
“We really do
give the benefit of the doubt to the arbitrator,” he said.
reason for the ramped-up efforts in recent years to market New York as a viable
seat for hosting international arbitrations. International dispute resolutions
generate up to $2 billion of business for New York each year, said Younger.
which was founded with the support of 37 law firms and the international and
dispute resolution sections of NYSBA, celebrates its one-year anniversary in
June. It has hosted 19 arbitrations and two mediations so far, according to
attended Thursday’s panel were encouraged to use the center, which features a
large hearing room, breakout rooms, facilities for interpretation and ample
lounge space. NYIAC does not administer administrations, only provides space.
“The idea is
to be a user-friendly, client-serviced approach to international arbitration in
New York,” Younger said.
Lee can be reached at firstname.lastname@example.org and on
Twitter @suevlee. Follow CLI on Twitter @NYComLitInsider.
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