Court Boosts Manhattan Commercial Threshold to $500,000
New York court officials Tuesday approved raising to $500,000 the amount required for disputes to be adjudicated in Manhattan's Commercial Division, marking the first time since 2009 the amount has been increased.
The order, signed by Chief Administrative Judge A. Gail Prudenti, takes effect Feb. 17. It's expected to reduce the judges' docket size in the Commercial Division in Manhattan by roughly 20 percent, enabling more time and attention to be given to each case.
The current monetary threshold is $150,000.
"The [Administrative Board of the Courts] thought this was a recommendation that made sense going forward, taking into consideration the growing monetary value of complex commercial litigation while at the same time being mindful of the case load of the remainder of the Supreme Court civil term," said Office of Court Administration spokesman David Bookstaver.
Long a topic of discussion among the commercial bar, raising the monetary threshold was a key proposal in Chief Judge Jonathan Lippman's June 2012 Task Force Report on Commercial Litigation in the 21st Century.
The Commercial Division Advisory Council recommended the proposal to OCA last year.
"This order is a natural culmination of a process by which those involved in studying the issue reached a very healthy and constructive compromise. There was much discussion, but a consensus by all involved that this was a healthy approach," said Mark Zauderer of Flemming Zulack Williamson Zauderer. He, along with Manhattan Supreme Court Justice O. Peter Sherwood, co-chair the council sub-group that led the study on this issue.
According to Zauderer, increasing the threshold balances the need to "reserve the resources of the Commercial Division for cases of complexity and monetary significance" while allowing the division to be "reasonably accessible for cases that are less complicated or do not involve great sums of money."
"A 20 percent [reduction] is material and significant because it's that last 20 percent that can be the difference between the water boiling and turning to steam," he said. "We think that reduction will go a long way toward taking some of the pressure off."
Sherwood said in an interview that a "disproportionately large number of cases" handled in the Commercial Division are actually cases involving smaller amounts. On top of that, the judge noted, cases have become more complex, causing the number of motions filed between 2008 and 2012 to nearly double.
"Where the real burden [lies] is on motion practice," he said. "Given the numbers, and we did look at the hard statistics, we felt that raising the threshold would be an appropriate solution."
The last time OCA raised the jurisdictional amount in New York County, the threshold jumped from $100,000 to $150,000. The current increase, while substantial, won't necessarily filter out less complex or controversial cases.
"There may be some loose correlation, but it is true they are not directly related," Zauderer said. "Even if it doesn't change the mix of complicated cases, it will mean fewer cases."
The threshold increase is only the second proposal submitted by the Commercial Division advisory council that OCA has implemented without first seeking public comment. The first was the designation of Commercial Division Justice Charles Ramos to handle all international arbitration proceedings in the Commercial Division.
Recommendations on which the public is invited to comment are a pilot mandatory mediation program and accelerated adjudication procedures, measures intended to help reach the greater goal of increasing the visibility and competitiveness of New York's Commercial Division.
Robert Haig, partner at Kelley Drye & Warren who chairs the Commercial Division Advisory Council, said the need for the threshold increase is a testament to the growth of the Commercial Division.
"The volume of cases filed in the Commercial Division has increased as has the size and complexity of the cases," he said.
For the time being, the monetary threshold amounts in the other Commercial Divisions in the state will remain the same. Those amounts are $25,000 in Albany and Onondaga counties; $50,000 in the Seventh and Eighth Judicial Districts, Queens and Suffolk counties; $75,000 in Kings County and $100,000 in Westchester and Nassau counties.
@|Suevon Lee is senior editor for Commercial Litigation Insider, an affiliate of the Law Journal. She can be reached at firstname.lastname@example.org.