Corporate defendants in product liability litigation will on occasion exercise their option to remove a case from state court to federal court, if diversity jurisdiction exists in the case. Therefore, the recent amendments to the Local Rules that govern the administration of cases in the United States District Court for the Southern District of New York and the United States District Court for the Eastern District of New York (SDNY and EDNY) may be of interest to our readers. The following outlines the recent updates to the Local Rules that may impact ongoing and future legal matters in these jurisdictions. Effective July 1, 2024, several amendments and additions have been made to these rules, aimed at enhancing procedural efficiency and clarity within the court. Understanding these changes is crucial for ensuring compliance and strategic planning in litigation strategies.

The updates were adopted by the Boards of Judges of the Eastern District of New York and the Southern District of New York and transmitted to the Judicial Council of the Second Circuit.

To preface, the application of these rules is governed by Local Civil Rule 1.1, which states:

These Local Civil Rules are promulgated under 28 U.S.C. § 2071 and Fed. R. Civ. P. 83. They apply in all civil actions and proceedings governed by the Federal Rules of Civil Procedure. Each district has, under 28 U.S.C. § 137, separately adopted Division of Business Rules that are available on their respective websites. These Local Civil Rules take effect on July 1, 2024 (the Effective Date) and govern actions pending or filed on or after that date. For actions pending on the Effective Date, if fewer than 14 days remain to perform an action governed by these Rules, the provisions of the previous Local Rules effective on June 30, 2024, will govern.

Notable Changes
Among the notable changes, one significant amendment pertains to counsel fees for taking depositions more than 100 miles from the courthouse, also known at Local Civil Rule 30.1. This particular rule has been withdrawn due to the Committee’s belief that it is no longer necessary due to the availability of telephonic and virtual depositions, which have eliminated the need for travel. Local Civil Rule 30.1 states:

When a deposition upon oral examination is to be taken at a place more than one hundred (100) miles from the courthouse, any party may request the Court to issue an order providing that prior to the examination, another party shall pay the expense (including a reasonable counsel fee) of the attendance of one attorney for each other party at the place where the deposition is to be taken. The amounts so paid, unless otherwise directed by the Court, may be taxed as a cost at the conclusion of the action or proceeding.

Additionally, the revised rules have been modified to delete language in Local Civil Rule 81.1, which addresses removal of cases from state courts suggesting that a party may rely on post-removal discovery to establish jurisdiction. The Committee feels that this change is necessary since the removing party must have a good-faith basis for asserting diversity jurisdiction at the time of removal. The amended Local Civil Rule 81.1 reads as follows:

If the court’s jurisdiction is based on diversity of citizenship, and regardless of whether or not service of process has been effected on all parties, the notice of removal must set forth

1) in the case of each individual named as a party, that party’s residence and domicile and any state or other jurisdiction of which that party is a citizen for purposes of 28 U.S.C. § 1332; 
2) in the case of each party that is a partnership, limited liability partnership, limited liability company, or other unincorporated association, like information for all of its partners or members, as well as the state or other jurisdiction of its formation; 
3) in the case of each party that is a corporation, its state or other jurisdiction of incorporation, principal place of business, and any state or other jurisdiction of which that party is a citizen for purposes of 28 U.S.C. § 1332; 
4) in the case of an assigned claim, corresponding information for each original owner of the claim and for each assignee; and 
5) the date on which each party that has been served was served.
 

Overall, the Committee’s revisions and amendments reflect the SDNY and EDNY's commitment to modernizing their practices while maintaining fairness and transparency.

Please do not hesitate to contact us with any questions or concerns regarding these new developments or their potential impact on legal strategies.