Special Rules for Complex Business Litigation Program Take Effect


New Jersey Law Journal

September 3, 2018

On Sept. 1, 2018, cases in the New Jersey Superior Court’s Complex Business Litigation Program (CBLP) became subject to a brand new set of rules. The new rules, which can be found in a new Chapter XI within Part IV of the Rules Governing the Courts of the State of New Jersey, borrow liberally from the Federal Rules of Civil Procedure and the rules in specialized business courts in sister states and are designed to make case management and discovery in complex commercial and construction cases more efficient.

What Is the Complex Business Litigation Program?

On Jan. 1, 2015, after the Working Group on Business Litigation assessed the performance of pilot commercial-litigation programs in Bergen and Essex counties, the New Jersey Supreme Court expanded the program throughout state, calling the program the Complex Business Litigation Program. Under the program, each vicinage appointed a special Complex Business Litigation judge to be responsible for managing all aspects of all qualifying complex commercial and construction cases. To qualify for the program, a matter must be designated by a litigant in its Civil Case Information Statement as a complex commercial (Code 508) or complex construction (Code 513) matter, and at least $200,000 must be in controversy. Because each qualifying matter in a vicinage is managed by a single Complex Business Litigation judge, each case will enjoy the benefit of individualized case management by a jurist experienced in managing and resolving similar matters.

How Do the New CBLP Rules Differ from the Rules Governing Other Civil Matters?

The existing rules in Parts I and IV will continue to apply to CBLP cases, unless they are contradicted by a new rule. Thus, many things will remain the same in CBLP cases. The new rules mainly modify certain aspects of case management, discovery, and motion practice.

The more substantial practice changes implemented by the new rules are:

  • Initial Disclosures: Following the federal courts’ innovation of requiring mandatory disclosures, litigants in the CBLP will be required to disclose early in the case: (1) all individuals with knowledge of information that the disclosing party may use to support its claims or defenses; (2) copies or a description of (including the location of) all documents, electronic data, or tangible things that the disclosing party may use to support its claims or defenses; (3) a computation of the disclosing party’s damages, including non-privileged documents on which the calculation is based; and (4) applicable insurance policies. See Rule 4:103-1.
  • Discovery Plans and Preliminary Conferences: Also following federal practice, litigants in CBLP cases will be required to meet and confer early in a case about anticipated discovery needs and issues, and to develop a written discovery plan to be submitted to the court to assist the court in the preparation of an initial case-management order. Discovery is to be held in abeyance until the parties have conducted the preliminary conference. See Rules 4:103-2 and 4:104-2.
  • Mandatory Initial Case Management Conference: CBLP judges are now required to convene an early initial conference and must, within the earlier of 90 days after any defendant has been served with process or 60 days after any defendant has appeared, issue an initial scheduling order. See Rule 4:103-3.
  • Final Pretrial Conferences and Orders: All CBLP cases will be pre-tried pursuant to existing Rule 4:25. See Rule 4:103-3(d).
  • Presumptive Limitations on Discovery: Unless the parties agree or the court orders otherwise, each side (i.e., all plaintiffs and all defendants and third-party defendants) shall be limited to 10 depositions of no more than seven hours. Each party will be limited to 15 interrogatories, unless otherwise stipulated or ordered. See Rules 4:104-3 and 4:104-4. If a litigant believes that it will require more interrogatories or more (or longer) depositions, it will need to secure the consent of its adversaries or, if such consent is not forthcoming, convince the assigned CBLP judge that additional discovery is required.
  • Uniformity for Spoliation of Electronically Stored Information: In the area of electronic discovery, the new CBLP rules provide guidance for when and how a party should be sanctioned when it fails to preserve electronic data. The new rules also provide a safe harbor for parties who act in accordance with a court order for the preservation of electronic data, precluding the imposition of sanctions for failing to preserve data beyond the scope of the order. See Rule 4:104-5(b).
  • Categorical Privilege Logs: To limit the expense of preparing vast privilege logs, which are common in large commercial and construction litigation, the new rules encourage litigants to use “categorical” privilege logs, where categories of similar documents, rather than individual documents, are described in the log. A party’s refusal to agree to the use of “categorical” logs may result in that party being held responsible for the other party’s cost in preparing a traditional document-by-document privilege log. See Rule 4:104-5(c).
  • Standard Protective Order: To expedite the negotiation and ultimate entry of a confidentiality protective order, which is typically required before the parties can begin to exchange discovery in earnest, the new rules include a standard default confidentiality protective order, which can be adjusted by the parties by agreement. See Rule 4:104-6 and Appendix XXX.
  • Discovery Motion Practice: Like the current practice, the new rules require litigants to meet and confer over discovery disputes before making a discovery motion. But the new rules add an extra requirement: the party seeking relief must first request and participate in a telephone conference with the court in an effort to resolve the discovery dispute. Only if that effort fails may the party file a motion. See Rule 4:105-4.
  • Summary Judgment Motions: Under the new rules, the parties are not subject to the briefing schedule in R. 4:46-1 for summary judgment motions. Instead, the parties are expected to agree on a briefing schedule for such motions. When the briefing is complete, the moving party is required to so advise the court and to request a hearing date for the motion. See Rule 4:105-5.

What’s Next for the CBLP?

Just days before approving the special CBLP rules, the New Jersey Supreme Court also published a Notice to the Bar, soliciting comments on a document entitled “Complex Business Litigation Program (CBLP) Overview and Case Management Guidelines,” as well as a model discovery plan, model scheduling order, model electronic discovery stipulation and order, and clawback stipulation and order. Comments to these documents are due by Sept. 24, 2018.

The Overview and Case Management Guidelines document summarizes and clarifies the criteria for inclusion in the Program, noting that traditional equity matters, consumer class actions, and several other types of potentially complex matters are generally not handled by the Program.

The proposed model Joint Discovery Plan, if approved, should be very helpful in guiding the litigants through their initial discovery-planning conference and preparing the required discovery plan.

The proposed model Electronic Discovery Stipulation and Order encourages transparency in the collection and production of electronic discovery by contemplating that each party disclose its custodians and search terms to the adversary and, reciprocally, approve the adversary’s custodians and search terms. The proposed model Electronic Discovery Stipulation and Order also contemplates that the parties will agree on which data sources should and should not be preserved. The proposed model Electronic Discovery Stipulation and Order is silent on the use of technology-assisted review techniques.

The proposed model Clawback Stipulation and Order absolves a litigant of the obligation of reviewing every document in its production for privilege, so long as the litigant engages in other, more efficient “Best Practices” for identifying potentially privileged materials, such as searching keywords and domain names identifying the producing party’s counsel and using analytical software to target potentially privileged materials. As its name suggests, the model Clawback Stipulation and Order also allows a litigant the right to claw back privileged documents that were inadvertently produced, notwithstanding the use of such Best Practices.

The aspiration for all the rules in New Jersey’s courts is “secur[ing] a just determination, simplicity in procedure, fairness in administration and elimination of unjustifiable expense and delay.” Rule 1:1-2. The new rules for CBLP should go a long way toward reaching that goal. But for the rules to achieve their full potential, adversaries must work cooperatively with each other and employ the rules in a fair and reasonable way to realize a just and expeditious result.

Reprinted with permission from the September 3, 2018 issue of the New Jersey Law Journal. © 2018 ALM Media Properties, LLC. 
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