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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: December 21, 2020

Primary Jurisdiction Doctrine Calls for Dismissal of Lawsuit While Administrative Action Pending

On December 9, 2020, the Second Department issued a decision in New York Ind. Contrs. Alliance, Inc. v. Consolidated Edison Co. of N.Y., Inc., 2020 NY Slip Op. 07386, holding that the primary jurisdiction doctrine required the dismissal of a lawsuit while an administrative proceeding was pending, explaining:

We agree with the Supreme Court’s determination to grant the defendant’s motion to dismiss the complaint. The doctrine of primary jurisdiction is intended to co-ordinate the relationship between courts and administrative agencies to the end that divergence of opinion between them not render ineffective the statutes with which both are concerned, and to the extent that the matter before the court is within the agency’s specialized field, to make available to the court in reaching its judgment the agency’s views concerning not only the factual and technical issues involved but also the scope and meaning of the statute administered by the agency. While concurrent jurisdiction does exist, where there is an administrative agency which has the necessary expertise to dispose of an issue, in the exercise of discretion, resort to a judicial tribunal should be withheld pending resolution of the administrative proceeding. Here, this action raises issues—such as whether the Public Service Commission has, pursuant to Public Service Law § 115, directed that the defendant award the contracts at issue to the lowest responsible bidder, and whether the defendant’s change to the contracts’ terms and conditions violates that directive—that should be resolved in the pending proceeding before the Public Service Commission before resort, if any, is made to judicial review.

(Internal quotations and citations omitted).

Disputes regarding commercial contracts involving out-of-state and international parties end up being heard in New York courts. Even if the court has the power to assert jurisdiction of the parties, it can, under the primary jurisdiction doctrine discussed above, dismiss the dispute so it can be heard in an administrative forum with particular expertise over the subject of the dispute. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure whether an administrative agency rather than a court is the appropriate forum in which a dispute should be heard.

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