General Counsel Committee Update
January 13, 2010
Staff Contact: Heather Briccetti
E-Discovery Legislation
In 2009, Assemblyman Mark Weprin introduced a bill (A.6000) which would have amended the CPLR to clarify the treatment of electronically stored information in civil disclosure proceedings conducted prior to the filing of a note of issue. This bill was introduced at the request of the New York State Bar Association and did not include a number of suggested measures that would limit the cost and scope of compliance with electronic discovery requests. In March, members of the Business Council’s General Counsel Committee, led by Joanne McMahon, Esq., of General Electric, briefed the sponsor and other members of the legislature on the need for amendments to strengthen the proposed legislation.
Assemblyman Weprin has since been elected to the New York City Council and we anticipate that a new sponsor will be assigned to the legislation. Please indicate by reply e-mail if you would be interested in participating in lobbying efforts this session to ensure that any e-discovery rules adopted by the state would add provisions the bill to address consideration of cost shifting for accessible documents, phased discovery and strengthen the safe harbor protections.
Power of Attorney Legislation
A new NYS Power of Attorney law went into effect on September 1st, 2009. The new Power of Attorney law was originally intended to prevent some abuses of POAs involving estates, the elderly and infirm. Unfortunately, the law is very overbroad -- and picks up all POAs signed by all individuals in NYS after September 1st. Even though the language doesn't fit the situation, business POAs signed by individual officers and directors must include detailed statutory caution and agency language.
The statute does not provide an exception for business or SEC documents signed by individuals. The law even arguably covers proxy ballots submitted by shareholders. Last session, the Assembly had passed a technical corrections bill to fix some of the issues unique to businesses (to carve out SEC documents, etc), but the Senate never acted on it. The Assembly is in the process of preparing a technical corrections bill and we have provided them with comments. Once the bill is introduced, assuming it makes the necessary corrections, we will coordinate a lobbying effort to enact the bill expeditiously.
Amicus Brief Filings
The Business Council participated in 3 cases as Amicus Curiae in 2009.
The first case, Snyder v. Bronfman, was decided by the Court of Appeals in November, unanimously affirmed the First Department's decision dismissing the case. The decision is attached. In this case of broad significance for the New York business community, the Court of Appeals upheld a challenge to the Statute of Frauds in dismissing the plaintiff’s argument that by characterizing himself as a “joint venturer”, he could sustain a claim that he participated in and was entitled to compensation in connection with a corporate acquisition, absent a written contract. The decision of the Court of Appeals is available here.
In Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., the Business Council joined as amicus curiae in support of respondent Allstate in a case that was argued before the Supreme Court of the United States in November. The petitioner is attempting to avoid a New York provision that does not permit the filing of a class action by bringing the action (on a state law claim) in federal court. A copy of the brief is available here.
In the case of Consumer Electronics Association, Information Technology Industry Council, v. City of New York , the Consumer Electronics Association and the Information Technology Industry filed a challenge to a City program which compels manufacturers to provide free, door-to-door residential collection of a range of obsolete electronic products. The City’s mandate would force manufacturers to pay for private, third-party haulers to collect used devices at the manufacturer’s sole expense. Expert witnesses have determined that this requirement alone will cost business over $200 million annually. The City ordinance also makes manufacturers retroactively liable for covered products they put on the marketplace, and holds them to performance mandates and compliance penalties if they cannot meet these arbitrary government quotas.
On August 7, ITI and CEA filed a motion for a Preliminary Injunction in the United States District Court for the Southern District of New York. They are alleging that the ordinance and final rule violate numerous constitutional and state law provisions. They argue that shifting the burden to out-of-state manufacturers who have no presence in and actually sell their products outside of New York City violates the Commerce Clause of the United States Constitution.
On October 9, the defendants filed 921-pages in response. This lawsuit is the test case for producer responsibility and retroactive liability. If the manufacturers were to lose, we are likely to see this door-to-door approach expand to other jurisdictions. The brief was filed on December 11, 2009 and the case is scheduled for argument on February 10th.
