New York is unusual in having a statute–Judiciary Law Section 487–that provides a private cause of action, not simply the remedy of sanctions, for litigants to assert against opposing counsel for making false statements to a court in a proceeding. This statute has spawned subsidiary litigation about litigation. In the past month, the Court of Appeals and the Commercial Division issued significant rulings creating (or reinforcing) parameters on the statute.
On April 1, 2014, the Court of Appeals issued a decision in Melcher v. Greenberg Traurig, 2014 NY Slip Op. 02213, holding that the limitations period for claims under Judiciary Law § 487 is six years. In that case, the trial court and appellate division assumed a 3-year statute of limitations which is the default for injury to property. However, the Court of Appeals said that because liability for attorney deceit existed as early as 1787 under New York common law, the statutory cause of action is subject to the six-year statute of limitations in CPLR 213(1), the same that applies for other causes of action for fraud.
On March 20, 2014, Justice Bransten of the New York County Commercial Division issued a decision in Alliance Network, LLC v. Sidley Austin LLP, 2014 NY Slip Op. 50430(U), dismissing Judiciary Law Section 487 claims because they were not brought in the action in which the alleged misconduct occurred. The plaintiffs had asserted claims under the statute against several lawyers and law firms arising from prior law suits before different judges. Justice Bransten reiterated a rule by the First Department that a violation of the judiciary law must be remedied in the same law suit in which it occurs. Further, she noted that Section 487 claims could only be made for conduct in New York courts.