Commercial Division Blog
Posted: February 17, 2015 / Categories Commercial, Discovery/Disclosure, Court Rules/Procedures
Court Enjoins Petitioners From Filing Any Further Process or Legal Proceedings Without Leave of Court
On January 26, 2015, Justice Kornreich of the New York County Commercial Division issued a decision in Matter of Shapiro v. Hayes, 2015 NY Slip Op. 30093(U), taking the unusual step of enjoining two parties before the court from instituting any further legal proceedings against another party without prior leave of court.
Matter of Shapiro involved "a battle royal" among former partners of a law firm. The parties' disputes were the subject of a AAA arbitration, and subsequently two New York court proceedings under Article 75 of the CPLR, and a separate lawsuit in California state court. The petitioners in the New York proceedings, issued over 200 restraining notices and information subpoenas, which Justice Kornreich sensibly concluded were designed improperly to embarrass and harass the respondent, their former law partner. Indeed, Petitioners aggressive approach could not be explained any other way, given that they were seeking to enforce a $59,000 judgment. Even worse, most of subpoenas and restraining notices were improperly served outside of New York (i.e., beyond the court's jurisdiction), and petitioners also failed to give the notice to respondent required by the CPLR. Nor was this the first time petitioners had engaged in such discovery abuses. The court determined that this conduct merited an award of attorneys' fees to respondent, and also granted an injunction precluding petitioners from bringing further proceedings against respondent without prior leave of court. Justice Kornreich explained:
The court grants the prongs of [respondents'] motions to enjoin petitioners from filing, without prior leave of court, any further process or legal proceedings involving the parties in [the New York proceedings] in any state. The injunction shall extend to petitioners' law firms, partners, agents, attorneys, and/or employees. A court may enjoin vexatious litigation by a party who abuses the judicial process. This is the second time in proceedings before this court that petitioners have issued subpoenas in a manner not authorized under the CPLR in an attempt to harass [respondent]. This is especially disturbing because petitioners are members of the New York bar and officers of the court, who should heed statutory requirements. Petitioners served over 200 persons or entities, including Hayes' clients and new partners, in an obvious attempt to embarrass him.
(Citations omitted.) The facts of this case are extreme, but Justice Kornreich's decision demonstrates that although the CPLR permits broad discovery, the courts will not permit abuse of the system to harass an opposing party. Another important lesson here is that a subpoena cannot be issued outside New York without obtaining a commission (for another state in the United States) or letters rogatory (for foreign countries).