Video Capacity Will Boost NY As Commercial Dispute Forum

September 2019Law360

The Commercial Division Advisory Council of the New York State Supreme Court proposed a rule amendment, which is intended to strengthen New York state’s status as a preferred forum for commercial litigation. The proposed rule would encourage, but not require, greater utilization of video conferencing technology.

The council, comprised of judges and practicing lawyers, including this author, sought to harmonize the needs and prerogatives of judges, with the needs of practicing lawyers and their clients.

This article is derived from the work of the council. Lawyers and clients who litigate in the New York state commercial division, often must travel substantial distances to argue motions and appear at court conferences. They come from remote locations throughout New York state, the country and the world. Travel may be particularly arduous for those litigants and counsel with disabilities. Moreover, travel has become more burdensome because of increased security procedures and urban congestion. Travel time is also impacted by weather conditions. In sum, travel is often inconvenient, inefficient and materially adds to the costs of litigation.

Many out-of-town commercial clients and lawyers are already utilizing video conferencing technology. They may be more receptive to litigating in New York if they could observe court proceedings without incurring the costs and spending the time to travel to New York for motions and conferences.

Furthermore, several courts throughout the United States, including courts in New York, have already embraced the use of video conferencing technology and the costs of such technology have become very affordable.

The proposed amendment would vest commercial division judges with discretion to permit counsel to participate in court proceedings from remote locations where it would further the interests of justice, but will respect the rights of attorneys and clients to appear in person. The council believes that this proposed rule will further New York State Chief Judge Janet DiFiore’s mandate that New York courts implement procedures which will improve the efficiency of the courts and improve the litigation process for the public, the bar and the judiciary.

The proposed rule amendment provides:

Counsel may request the court’s permission to participate in court proceedings from remote locations through use of video conferencing or other technologies. Such requests will be granted in the court’s discretion upon finding that such participation would further the interests of justice; however, nothing contained in this subsection (d) is intended to limit any rights which counsel may otherwise have to participate in court proceedings by appearing in court.

The council proposal noted, inter alia,

“[V]ideo conferencing technology has been used by courts throughout the United States, beginning in the 1990s.” The U.S. Courts of Appeals for the Second, Third, Eighth, Ninth and Tenth Circuits have “used some form of video conferencing technology for conducting oral arguments.”

Several Court of Appeals judges have opined that the benefits of video conferencing outweighed its disadvantages. Judges have cited the following advantages of video conferencing:

  •   Saves travel time;
  •   Allows for scheduling flexibility and reduces the administrative burden on the courts;
  •   Decreases litigation cost; and
  •   Increases access to courts for marginalized litigants whose in-person appearance might otherwise be prohibitively expensive.

A judge observed that “[n]ot every lawyer wants to show in court, and it’s not a lack of commitment to the case but more an economic decision. Video conferencing solves that.” Judges have acknowledged that disadvantages include technical difficulties, e.g., poor connections, and decreased level of personal interactions.

The council observed that “[m]any federal courts have installed video conferencing equipment and that the United States Judicial Conference Committee on Automation and Technology endorsed the use of video conferencing systems as “necessary and integral parts of courtrooms.”

Witness testimony may be obtained through remote transmission by the use of a live video feed that transmits an image of the witness, together with corresponding audio, onto a video monitor situated in a courtroom. The council noted that the language of Federal Rule of Civil Procedure 43(a) does not mandate that video be the form of transmission and the rule has been cited in connection with requests for telephonic transmissions as well. The council’s proposed amendment to commercial division rule 1 “relates only to participation by counsel in court proceedings and thus does not raise any of the issues presented by witness testimony.”

State trial courts have also used video conferencing, permitting attorneys to participate in some pretrial hearings through the technology. The National Center for State Courts conducted a survey addressing video conferencing. When respondents were asked to address whether video conferencing helps or hinders the administration of justice, one respondent commented, “Video conferencing can help tremendously with the administration of justice, if you have all the stakeholders wanting to make it work. Proactive judges and attorneys that find ways to use it and make it work, reap benefits for all.”

More recently, the National Center for State Courts concluded that: “Not only has video conferencing proven to be effective within the courtroom, but it likewise benefits attorneys and judges by saving time and cutting costs of the entire judicial process.”

Video conferencing is superior to telephone conferencing because courtroom participants rely on accurately assessing the demeanor of the people involved. Video conferencing allows observations of the nuances that may be discerned from body language. The council cited a 2010 Future Trends in State Courts report, which found that vendors have strengthened their understanding of the behavioral issues involved in effectively communicating with remote video technologies. Judge Ronald Gould of the U.S. Court of Appeals for the Ninth Circuit stated, “the technology has improved to the point where it is virtually the same as being in the courtroom, and I believe that there will be a trend to increasing use.”

Video conferencing is increasingly being used as a result of the globalization of legal practice where controversies often cross geographic barriers. Attorneys are requesting this technology to facilitate efficient participation by attorneys and reduce the demand for continuances due to travel constraints.

Judge DiFiore has stated that “The New York state courts are open and welcoming to foreign litigants.” The council believes that business litigants from Argentina, India or Australia are more likely to litigate in New York state courts if they could observe court proceedings in their case through video conferencing without substantial expense.

In New York, a surrogate judge has utilized video conferencing or Skype to avoid the very expensive use of “commissions” for hearings in other countries.

A 2016 study of state trial courts’ use of remote technology noted that “there are many trial courts that have experienced great success in integrating remote technologies to improve court performance without compromising established legal principles that have guided American courts for centuries.” Courts in California, Florida, North Carolina and New Jersey, among others, now use video conferencing. For example, Rule 12.4 of the North Carolina Business Court General Rules of Practice and Procedure specifies a pretrial attorney “may be an in-person conference or conducted through remote means.” Alaska and Arizona courts also have rules which permit video conferencing.

A Florida survey indicates that seven judicial circuits authorize attorneys to participate in select hearings through video conferencing at the judge’s discretion. California and New Jersey courts also permit attorneys to appear remotely via video conferences by request in family law cases.

The proposed amendment to commercial division rule 1 is similarly permissive to that adopted by other state courts. The proposed amendment grants the judge discretion to use, or not use, the technology.

Additionally, the council has addressed the cost of video conferencing and concluded that this technology is remarkably inexpensive “in comparison to the savings which its use can provide”:

A lawyer who travels from San Francisco to New York County to argue a motion will require a minimum of 15 hours of travel time and will incur out-of-pocket disbursements for airline tickets, ground transportation, lodging and meals. If that lawyer bills $1,000 per hour, the cost of the travel to the lawyer’s client would be $15,000 in attorney’s fees plus at least another $1,000 in disbursements. A lawyer who travels from White Plains to Albany County to participate in a status conference will require a minimum of four hours of travel time and will incur out-of-pocket disbursements for travel by train or automobile. If that lawyer bills $600 per hour, the cost of the travel to the lawyer’s client would be $2,400 in attorney’s fees plus another $100 in disbursements.

Lawyers who are required to travel to participate in court proceedings are likely to incur other expenses as well. Since lawyers schedule their travel so they will arrive on time, they need to consider travel delays. Therefore, additional travel time is needed to provide a “cushion” against travel issues. Lawyers also believe that it is often appropriate to be accompanied by a colleague who has worked on the matter and that can easily double the aforementioned cost estimates.

Moreover, there is never a guarantee that a court will be able to hear the matter at the time originally scheduled. Although the Commercial Division strives to schedule proceedings such as oral arguments of motions for specific times and to adhere to its schedules, other urgent court business may require a delay of the argument. The cost of delays in court increases the estimates of minimum costs for travel time previously outlined. Such delays may also lead to missed flights or vehicular traffic delays during peak travel times.

In contrast, the cost of video conferencing is minimal. The use of video conferencing permits the lawyer’s colleagues who have participated in the matter, as well as clients, to observe the proceeding in real time and to possibly assist the lawyer who is making the appearance. If other court business prevents the commercial division judge from presiding over the court proceeding at the scheduled time, counsel at the remote location may do other work while waiting for electronic notification from the court clerk that the judge is able to proceed.

Use of video conferencing technology may also provide judges with greater flexibility in scheduling and adjourning court conferences and oral arguments of motions. Since so much less time is required for counsel to participate in a court proceeding, the court may be able to schedule a proceeding for a time period that would not be appropriate if counsel had to travel hours in order to participate. Moreover, the court may be able to adjourn a proceeding even at the last minute, with little inconvenience to counsel and parties because they do not need to leave their offices to participate.

In providing a cost analysis, the council used Skype as an example to enable discussion of specific dollar figures. However, the council expressed no preference for Skype or any other particular type of video conferencing technology. The particular technology used would be subject to approval by the court.

Skype is a part of Microsoft Corp.'s Office 365 offering. Office 365 is a collection of online products and services. Microsoft offers multiple personal and business plans for Office 365. The higher the plan cost, the more products and/or services that are included.

To illustrate, below is a simple comparison of two enterprise plans including the applications and the services included in each plan and the cost:

Office 365 Enterprise E1:

  •     Applications: Not included,
  •     Services: Includes Skype for Business and the ability to host unlimited HD video conferencing meetings,  
  •     Cost: $8 per user per month, with an annual contract.

Office 365 Enterprise E3:

  •     Applications: Outlook, Word, Excel, etc.
  •     Services: Includes Skype for Business and the ability to host unlimited HD video conferencing meetings,
  •     Cost: $20 per user per month, with an annual contract.

Microsoft provides special pricing for governmental organizations.

Generally, the only other cost is a camera if the person joining a video conference already has a computer and Internet connectivity. Logitech is a commonly known brand of USB camera. Depending upon the resolution and features, pricing ranges from $40 to $200. Features can include the camera following persons if they move, a built-in microphone, wide-angle lens, light adjusting, etc. Also, electronic tablets and laptops commonly have cameras built-in.

Conclusion

Video conferencing can provide a great convenience to all commercial division constituencies. It enables lawyers and their clients to save time and money. The benefits of making greater use of this effective technology is obvious, compelling and presents an opportunity for the commercial division to continue its innovation and leadership in the adoption of technology to enhance the efficient administration of justice.

The proposed amendment to commercial division rule 1 is consistent with the approach of other state and federal courts, provides individual judges with substantial discretion to permit participation in court proceedings from remote locations in a manner that is suitable for their particular docket, and will not burden or prejudice those lawyers who might not want to use this technology and will prefer to appear in person.

The New York State Administrative Board of the Courts is soliciting comments on the proposal until Sept. 30. The council recommended building on the positive experience of other courts by adopting the proposed amendment to rule 1.


Scott Mollen is a partner at Herrick Feinstein LLP.

Disclosure: The author is a member of the New York Supreme Court Commercial Division Advisory Council.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

This article originally appeared in the September 13, 2019 edition of Law360.