Proposal to Set a Monetary Threshold for Commercial Division Cases Seeking Equitable and Declaratory Relief

SUMMARY

The Council on Judicial Administration, State Courts of Superior Jurisdiction Committee, and Litigation Committee submitted comments in response to a request for public comment on a proposal to amend 22 NYCRR § 202.70 to set a monetary threshold for Commercial Division cases seeking Equitable and Declaratory Relief. The committees noted that the proposal addresses a valid concern that the extant exemption to the monetary threshold requirement for cases seeking equitable and declaratory relief has enabled cases that would not otherwise qualify for Commercial Division treatment to draw disproportionately on the Division’s resources. They recommend minor revisions to the proposal to make it clearer: specifically, they recommend leaving section (a) of 22 NYCRR § 202.70 as-is and adding the following language to section (b): “Actions in which the principal claims involve or consist of the following will be heard in the Commercial Division provided that (i) the monetary threshold is met or (ii) equitable or declaratory relief is sought and the value of the object of the action meets the monetary threshold, except that for actions brought under paragraphs (4), (5), (11) or (12) herein the value of the object of the action need not meet the monetary threshold.” The committees also asked how the value of the object of the action would be determined, and recommended clarifying how a plaintiff should inform the Court that the value of the object of the action meets the monetary threshold – e.g., whether the RJI would be modified to permit a plaintiff to claim that the equitable relief meets this requirement. They also asked whether submission of the form would be sufficient for assignment to the Commercial Division, or whether the clerk pool would further review the matter – and whether such review, along with a potential influx of letter briefs arguing that the standard was misapplied, would put a strain on judicial resources.

REPORT

By Email
David Nocenti, Esq.
Office of Court Administration
25 Beaver Street, 10th Floor
New York, NY 10004 rulecomments@nycourts.gov

Re: New York City Bar Association Response to Request for Public Comment on Proposal to Set a Monetary Threshold for Commercial Division Cases Seeking Equitable and Declaratory Relief

Dear Mr. Nocenti:

We write to provide comments with respect to the Request for Public Comment on amending 22 NYCRR § 202.70 to set a monetary threshold for Commercial Division cases seeking equitable and declaratory relief.

The City Bar’s Council on Judicial Administration, State Courts of Superior Jurisdiction, and Litigation Committees have considered and discussed the proposed rule change. We adopt the spirit of the proposal, propose minor revisions, and pose some questions.

At the outset, we note that the proposed rule addresses a valid concern that the extant exemption to the monetary threshold requirement for cases seeking equitable and declaratory relief has enabled cases that would not otherwise qualify for Commercial Division treatment to draw disproportionately on the Division’s resources. We are swayed by the fact that this proposal seems to address a particular concern raised by Commercial Division Judges of New York County.

We think the language of the proposed rule should be modified slightly such that only section (b) of 22 NYCRR § 202.70 is amended, as set forth below.[1]

(b) Commercial cases

Actions in which the principal claims involve or consist of the following will be heard in the Commercial Division provided that (i) the monetary threshold is met or (ii) equitable or declaratory relief is sought and the value of the object of the action meets the monetary threshold, except that for actions brought under paragraphs (4), (5), (11) or (12) herein the value of the object of the action need not meet the monetary threshold.

We do not see a need to modify subsection (a) and we believe the language above makes the proposed rule clearer.

Although we adopt the proposed rule above, we wish to address certain practical concerns with how the rule will be analyzed and implemented. First, it is unclear how the “value of the object of the action” will be determined. Although we understand that there is federal case law on this point, we think it would be useful if the proposed rule, or the commentary thereto, clarified that the value of the object of the action may be measured from either plaintiff’s or defendant’s perspective.

Second, we have questions about how the rule will be applied. It is unclear how a plaintiff should inform the Court that the value of the object of the action meets the monetary threshold. Will the Commercial Division Request for Judicial Intervention form be modified to permit a plaintiff to claim that the equitable relief meets this requirement? If so, will submission of that form be sufficient for the assignment to the Commercial Division, or will the clerk pool review the matter in more depth? If the clerks are tasked with discretion to make the determination, there may be an influx of letter briefs to the Administrative Judge’s office protesting that the standard was misapplied. We want to ensure both that the clerks’ pool and the Administrative Judge’s office will have adequate resources to address the additional analysis required under the new rule. We think these practical issues should be considered and addressed before the proposal is implemented.

Thank you for considering our comments. If you believe that it would be beneficial, we would be happy to discuss these comments with you further.

Sincerely,

Fran Hoffinger, Chair
Council on Judicial Administration

Cassandra Porsch, Chair
Litigation Committee

Amy D. Carlin, Chair
State Courts of Superior Jurisdiction