Plaintiff Failed to Show Proof of Service Where It Delivered an Electronic Copy of the 809-page Complaint

On August 11, 2021, Justice Platkin of the Supreme Court, Albany County, issued a decision in Contractors Compensation Trust v. $49.99 Sewer Man, Inc., 2021 NY Slip Op 50787 (U), denying plaintiff’s motion for entry of a default judgment against numerous defendants for failing to appear in response to the complaint where plaintiff filed an electronic copy of the complaint. While recognizing the complaint with exhibits totaled over 1.5 million pages, the Court explained that:

However, there is nothing in the CPLR, the BCL or the LLC Law that authorizes a plaintiff to serve a complaint as an initiatory paper on a non-consenting defendant other than by delivery of a hard copy of the pleading. To be sure, CPLR 2103 does permit papers to be served on an attorney by "electronic means" (CPLR 2103 [b] [7], [f] [2]), but this rule "deals with the [*2]service of interlocutory papers after jurisdiction has been acquired and an action is pending" (Cooky's Is. Steak Pub v Yorkville Elec. Co., 130 Misc 2d 869, 871 [Sup Ct, NY County 1986]; see Peterkin v City of New York, 293 AD2d 244, 249 [2d Dept 2002]; Jackson v State of New York, 85 AD2d 818, 818 [3d Dept 1981], lv dismissed and denied 56 NY2d 501, 568 [1982]; Thomas F. Gleason, Supplementary Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C:2101:7, C:2103:3). And the provisions of the rule governing service on a party to the action refer only to the delivery, mailing, transmittal or dispatching of "paper[s]" (CPLR 2103 [b], [c]).[FN3]

CPLR 2103's limited authorization to serve an attorney by electronic means is further qualified by the proviso that electronic service only is permitted "where and in the manner authorized by the chief administrator of the courts by rule and, unless such rule shall provide otherwise, such transmission shall be upon the party's written consent" (id., [b] [7]). In cases like this, commenced by mandatory electronic filing via the New York State Courts Electronic Filing ("NYSCEF") system,[FN4] court rules require that "service of initiating documents . . . shall be made as provided in Article 3 of the [CPLR] . . . , or by electronic means if the party served agrees to accept such service" (22 NYCRR 202.5-bb [b] [3] [emphasis added]; accord 22 NYCRR 202.5-b [f] [1] ["(i)nitiating documents may be served in hard copy pursuant to Article 3 of the CPLR . . . or by electronic means if the party served agrees to accept such service" (emphasis added)]).

Further, under 22 NYCRR 202.5-a, entitled "Filing by Electronic Transmission," a court may allow counsel to communicate with one another by electronic means and may direct counsel to submit documents "by e-mail or by other electronic means, such as by a computer flash drive" (22 NYCRR 202.5-a [b] [emphasis added]). But there is nothing in the rule that allows initiatory papers to be served on a party by electronic means. And under the prior version of the rule, which was in effect on the date of commencement, initiatory papers could be delivered to the court clerk electronically, but service of process by electronic means was not authorized. Thus, neither the governing statutes nor the rules of the Chief Administrative Judge authorize service of initiatory papers by electronic means absent the consent of the defendants, and there is no proof that any of the Corporate Defendants consented to service of the Complaint by delivery of a flash drive.

. . . .

And despite plaintiff's creative and well-intentioned attempt to avoid the printing and distribution of almost 1.5 million pages of pleadings (exclusive of any duplicate copies required by the Secretary of State), the Trust's use of an unauthorized method of services carries its own risks and concerns. In this age of increased awareness of cyber-security and daily reminders of the risks posed by malicious computer hackers and international ransomware gangs, a prudent corporation may have good reasons for refusing to allow an unknown flash drive to be inserted into its computer network (see Tonya Riley, USB-Based Malware Is A Growing Concern For Industrial Firms, New Honeywell Findings Show [2021], available at https://www.cyberscoop.com/usb-malware-honeywell-cyber-risk/ [last accessed Aug. 9, 2021]). These risks can be avoided (or at least mitigated) if electronic service is made via a trusted system like NYSCEF or some other method of electronic transmission agreed upon by the parties.

Moreover, the use of a flash drive was not the only way the Trust could have avoided the burdens attendant to the delivery of paper copies of the 809-page Complaint and 242-page Schedule A to 1,411 defendants. Had the Trust commenced this action through the filing a summons with notice, any defendant who appeared and demanded a complaint through counsel (see CPLR 3012 [b]) could have been served with an electronic copy of the Complaint and Schedule A as an interlocutory paper via NYSCEF or other electronic means (see CPLR 2103; Dunlop v Saint Leo the Great R.C. Church, 109 AD3d 1120, 1120-1121 [4th Dept 2013]).

Mistakes like this can be avoided by hiring experienced litigators. Please contact the Commercial Division Blog editors at commercialdivisionblog@schlamstone.com if you or a client have questions about the proper service of papers in New York.