In another indicator of the importance of the litigation industry, New York and Delaware courts continue to compete for big commercial cases. A recap of some of New York’s recent moves is set out in a June 6, 2015 AmLaw Daily article about Barry Ostrager taking the bench in New York. The article includes, however, the following bigger picture observations about the jockeying between Delaware and New York. The new focuses on, among other things, how New York is appointing judges to its Court of Claims, and then moving them to a new commercial litigation bench in Manhattan:
“The Court of Claims appointment would seem a curious fit for Ostrager, who’s among the most experienced and best-known commercial litigators in the country. Altogether, Ostrager estimates he’s handled 65 trials and more than 50 appeals, including more than a dozen before the U.S. Court of Appeals for the Second Circuit and two before the U.S. Supreme Court.
“That’s more trials than the entire litigation department at many firms,” said Sullivan & Cromwell’s Robert Giuffra Jr., who most recently collaborated with Ostrager in a 2014 defense victory for UBS AG and various underwriters in a $113 billion federal securities class action—one of the largest bank stock-drop suits ever.
Ostrager’s appointment may have everything to do with a larger push by New York to compete with other states—Delaware in particular—for a larger share of the country’s choicest commercial litigation. Since the financial crisis, the need for upgrades to the state’s Commercial Division has become urgent. The court has been handling a vastly larger and more complex docket of high-value disputes at the same time that its budget has steadily declined since 2009, leading to delays.
In 2012, New York Chief Judge Jonathan Lippman created a task force of top litigators, state court judges, academics and senior in-house counsel to look into ways to strengthen the Commercial Division. The first recommendation of the task force, co-chaired by former New York Chief Judge Judith Kaye (now of counsel at Skadden, Arps, Slate, Meagher & Flom) and Wachtell, Lipton, Rosen & Katz name partner Martin Lipton, was to increase the number and experience level of judges in the division.
The task force advised the legislature to amend the Court of Claims Act to add six additional judges, whom the chief judge could then reassign to the Commercial Division. Amending the law would enable the governor to directly designate judges “qualified and eager to resolve complex commercial disputes,” the report’s authors concluded. In the past, most judges were elected to the Supreme Court seats and appointed to the appellate court positions.
At least three other judges originally appointed to the Court of Claims have been moved to the Commercial Division. They include Melvin Schweitzer, a former Rogers & Wells corporate partner appointed to the Court of Claims in 2005 and later designated an acting Supreme Court justice, who recently retired; State Supreme Court Justice O. Peter Sherwood, a former Manatt, Phelps & Phillips litigation partner appointed to the Court of Claims in 2008; and Lawrence Marks, appointed in 2009 to the Court of Claims, and now the second-ranking administrative judge in the state court system.”