COVID-19 Update: Limited Access to Courts for Commercial Litigants

March 23, 2020 | Michael C. Mulè | Kenneth C. Murphy | Commercial Litigation

In these trying times, your options for immediate relief in commercial cases is likely limited unless it directly is related to coronavirus issues. However, if your issues satisfy the requirements of federal jurisdiction, you still have the ability to pursue a remedy in federal court.

When it comes to commercial litigation during the coronavirus pandemic, you may be left out in the cold. As of March 22, 2020, the New York State Courts have essentially shut down all court filings except under limited circumstances. The extremely limited list of permissible court requests, as of today, includes requests under the New York State Mental Hygiene Law, emergency guardianship applications, temporary orders of protection, emergency Election Law applications and Extreme Risk Protection Orders, which are orders restricting access to firearms when a person may be a danger to themselves or others. This means that state court commercial lawsuits are largely in limbo – a suit cannot effectively be commenced and you cannot seek court intervention to proceed in a litigation.

However, the March 22, 2020 Administrative Order of the Chief Administrative Judge of the New York State Courts (AO/78/20, attached here) provides a catch-all exception for “any other matter that the court deems essential.” Some of the lower courts have left open the possibility that non-listed matters, including Orders to Show Cause, which are efforts to seek emergency relief, may be considered essential.

Finally, taken in conjunction with the “any other matter” exception noted above, the administrative order makes one other notable exception: emergency applications related to coronavirus. While it has not yet been tested, this last exception may permit applications to New York Supreme Courts for certain businesses to seek an emergency declaration of whether they are considered “essential” or “non-essential” under the recently issued Executive Order 202.8 which ordered all “non-essential” businesses closed effective 8:00 pm, March 22, 2020.

While Executive Order 202.8 permits businesses to apply to be deemed “essential” via an online application to the Governor’s office, in the event the Governor’s office denies that request, there may be an avenue to seek emergency relief before the Supreme Courts suspending that denial.

In addition, it is significant to note that federal court remains available. Those who meet the jurisdictional requirements can still commence a federal court action or pursue emergency relief there. Although there are restrictions, both the Eastern and Southern Districts of New York remain open.  See Administrative Orders of the Chief Judge of the Eastern District of New York (Nos. 2020-06 and 2020-07) and Covid-19 Protocols for the Southern District of New York (https://nysd.uscourts.gov/covid-19-coronavirus).

While the present ability to obtain provisional relief in the New York State Courts in commercial matters appears to be very limited, in the Southern District, there is an “emergency civil part” that may hear “[a]rgument on applications in civil matters for temporary restraining orders and other emergency relief” (https://nysd.uscourts.gov/covid-19-coronavirus).  Moreover, “Civil Case Operations will proceed at the discretion of the individual Judge” in the Southern District.  Although “[i]n-court appearances will be limited strictly to Emergency Matters”, the Covid-19 Protocols for the Southern District of New York allow for teleconference “or (if the presence of witnesses is required) videoconference if possible.”

Similar protocols are established in the Eastern District of New York.  See AO-78-2020 (002) (noting that “[i]ndividual judges may continue to hold hearings, conferences, and bench trials in the exercise of their discretion” and “strongly encourage[ing] … telephone or video conferencing”).

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