The newest judge to join Manhattan’s Commercial Division told an audience of junior associates and other practitioners Friday that the key to greater efficiency in litigation is to be realistic, reach across the aisle early and work on getting clients “the best deal possible.”
“I’m often shocked at how much money is spent on cases that I, as an arbiter, find have very little merit,” Justice Saliann Scarpulla said at the Commercial Litigation Academy 2014, a two-day series of panels organized by the Commercial & Federal Litigation Section of the New York State Bar Association.
Telling a packed ballroom at the Radisson Martinique on Broadway that the most expensive and inefficient strategy is to “try to go to trial and get a judgment,” the judge encouraged parties to engage in settlement discussions as early as possible and think about the merits of their case before it requires her intervention.
Scarpulla handled asbestos litigation, insurance coverage cases, property damage cases and general commercial litigation before being named to the specialized division in February. She has had only four months to adjust to her current docket, which she inherited when Justice Barbara Kapnick was elevated to the Appellate Division, First Department.
Scarpulla, who previously has worked in-house for Hudson United Bank and the Federal Deposit Insurance Corporation and as a litigation associate at what was then known as Proskauer Rose Goetz & Mendelsohn, spoke with a straight-shooter sensibility more characteristic of veteran colleagues on the bench.
With a docket of roughly 500 cases and a target adjudication of 12 to 18 months, the judge told the room that her time is limited. She said she’d like to see parties try to work things out in mediation or other arm’s length discussions.
The first question the Scarpulla said she poses to parties is, “ ‘Have you talked about settling?’” She said that she rarely sees attorneys focused on getting the best results for their client as opposed to, say, seeking unrealistic damages.
“If you’re seeking damages that you’re never gonna get, I know what I need to do to talk you down,” she said.
The judge was joined Friday by Robert Friedman, a partner at Sheppard, Mullin, Richter & Hampton; Gregory Markel, a partner at Cadwalader, Wickersham & Taft; Mark Segall, an arbitrator and mediator at JAMS; and Lawrence Chanen, senior vice president and associate general counsel at JP Morgan Chase. All five were part of a panel called “Litigating Commercial Cases Efficiently.”
The panelists agreed about the importance of early case assessment, or evaluating the merits and risks of one’s case with the opposing side. Even as something as simple as talking with one’s adversary about the workings of a structured product at the heart of a complex dispute is helpful, Segall said.
“I always thought that the time spent doing that at the outset was really important,” he said.
Friedman concurred, observing that the two points during a case at which parties are most likely to settle is at the beginning of an action and towards the end. “The early meeting is essential,” he said, advising practitioners to hone in early on damages to learn “what you can get and what you’re exposed to.”
The panelists also agreed that mediation—an increasingly buzzworthy word among commercial litigators—is undervalued, overlooked and in the grand scheme of things, “relatively inexpensive.”
“The cost of mediation is less than the cost of deposing a major witness,” Segall noted.
“I’ve never advised a client not to mediate at any stage,” Friedman added.
In her experience, said Scarpulla, “A million dollars in litigation is not even blinked at anymore.”
“I cannot remember a single case where a party tried to mediate, then went to trial,” she said, voicing her support for this case resolution technique.
Friday’s remarks also focused on recent efforts by the New York Commercial Division to make litigation more efficient by offering alternative, innovative ways to cut down on costs. Scarpulla took the time to familiarize the room with new Commercial Division rules such as an “accelerated adjudication” option to waive such matters as interlocutory appeals, forum disputes, right to a jury trial and punitive damages. She also said a mandatory mediation pilot program in Manhattan, where one out of every five cases except those seeking equitable relief, may automatically be diverted to mediation, “will come into effect very soon.”
This year’s Academy, intended for more junior attorneys but also for those practitioners looking to brush up on litigation practice, featured panels on venue decisions, pleadings, injunctive relief, disclosure and discovery, expert discovery, trials, and civil appeals and argument.
In addition to Friday’s panel, the speakers during Thursday and Friday’s discussions included Justice Shirley Kornreich, Justice Jeffrey Oing, Justice Carolyn Demarest of the Kings County Commercial Division, Justice Kapnick and Southern District of New York Judge Shira Scheindlin, as well as experienced litigators from a number of firms.