New York: A Litigation: General Commercial Overview

Access to New York’s Commercial Division and Emerging Gatekeeping Trends

New York City is one of the world’s leading centers for business, finance, real estate and media. Since 1995, the Commercial Division of the Supreme Court of the State of New York has offered an unrivaled forum for resolving complex commercial disputes among US and international business litigants. Business leaders and their legal advisers often choose New York law to govern their commercial arrangements and routinely select the Commercial Division as the forum for resolving their business disputes when they arise. The reasons are plenty. Commercial Division justices are sophisticated jurists with extensive experience in adjudicating complex commercial disputes. Matters assigned to the Commercial Division are subject to a specialized set of rules designed to maximize efficiency, including streamlining discovery and offering an accelerated adjudication procedure by which eligible cases may be ready for trial in as few as nine months. Furthermore, the Commercial Division is advised by a dedicated advisory council – comprised of current and former jurists, in-house counsel from some of the world’s largest corporations, and respected members of the New York commercial bar – providing recommendations to further enhance the services offered by the Commercial Division.

A case must meet certain requirements to be eligible for assignment to the Commercial Division. The amount in controversy must meet a specified monetary threshold ranging from USD50,000 in Albany County to USD500,000 in New York County. The dispute must also concern specified subject matters including, among others:

• breach of contract;
• commercial torts such as breach of fiduciary, fraud and misrepresentation;
• statutory and common law disputes arising out of business dealings;
• commercial class actions;
• business transactions arising out of dealings with commercial banks and other financial institutions;
• internal affairs of business organizations;
• dissolution of business entities;
• commercial insurance disputes; and
• applications to stay or compel arbitration or to affirm or disaffirm arbitration awards involving any of the foregoing.

Although some cases fall squarely within the requirements for designation to the Commercial Division, others seem ripe for adjudication by this specialized business court but do not fit neatly within these requirements. Each year, numerous cases that, on the surface, involve complex business disputes are rejected for designation. This appears to reflect a careful gatekeeping effort by the Commercial Division to admit only those cases that unquestionably satisfy its subject matter rules.  

For example, in Board of Managers of 101 Wall Condominium v 99 Wall Development, Inc, et al (Index No 655972/2025), the Administrative Judge of the Commercial Division – tasked with considering requested transfers of cases to the Commercial Division – took a narrow view of what falls into the category of “commercial cases” under the Commercial Division Rules, while at the same time taking a broad view of the list of presumptive “non-commercial cases” under those rules. There, the plaintiff (a condominium board) alleged that it was owed over USD1 million based on the sponsor’s alleged breaches of the offering plan and purchase agreements in connection with the conversion and renovation of the building. The plaintiff also asserted claims for fraud, breach of fiduciary duty, and an accounting. The defendants sought to transfer the case to the Commercial Division because it clearly involved breach of contract and commercial torts arising out of business dealings. Nevertheless, the administrative judge rejected the transfer request, determining that:

• the case was not a “commercial case” at all; and
• it was, in fact, a “residential real estate dispute,” which is a presumptive “non-commercial case” under the Rules.

A similar result occurred in Island Exterior Fabricators LLC v Tishman Construction Corp of New York (Index No 654788/2023), which involved a particularly complex commercial dispute related to the construction of the Richard Gilder Center for Science, Education and Innovation at the American Museum of Natural History in Manhattan, a 230,000 square foot, USD465 million dollar real estate development project. The plaintiff’s claims sought damages exceeding USD8 million resulting from significant project delays and design changes during the project’s performance, which took place during the COVID-19 pandemic. Although the applicable monetary threshold was satisfied, and the dispute concerned complex contract issues, the administrative judge denied the plaintiff’s request for transfer to the Commercial Division because “[t]he alleged ‘breach of contract’ did not arise out of ‘business dealings’ as that term is generally defined by” the Commercial Division Rules, and the claims concerning construction delays and related disputes “are not the type of claims consisting of a ‘complex and consequential commercial matter’ ordinarily heard in the Commercial Division.” Under this logic, commercial construction disputes – no matter how complex – are virtually barred from designation to the Commercial Division.

In some instances, different courts tasked with considering the propriety of Commercial Division assignments may reach divergent conclusions in nearly identical circumstances. In Hussein Beydoun et al v Viral Development LLC (Index No 605816/2025), the petitioners – arguing that they were members of a limited liability company (LLC) that had developed an AI-assisted weight loss app – commenced a special proceeding seeking an order directing the LLC to permit them to inspect the company’s books and records pursuant to New York LLC law. Following the Court’s initial rejection of assignment to the Commercial Division, the respondent (with the petitioners’ consent) requested that the administrative judge direct the transfer, noting that the case is “alleged to arise out of business dealings (eg, partnership, shareholder, joint venture, and other business agreements),” involved “technology transactions and/or commercial disputes involving or arising out of technology,” and sought “equitable or declaratory relief” based on a purported “statutory and/or common law violation (ie, New York’s LLC and common law). The request was denied without explanation.

In contrast, in Hazan et al v Duffy Square Associates, Inc et al (Index No 65467/2022), the Court reached the opposite conclusion. In Hazan, the petitioners were shareholders/members of various entities with interests in family-owned commercial real estate, and commenced a special proceeding seeking to inspect corporate books and records. The Court granted the petitioners’ request for assignment to the Commercial Division without issue.

Summary

In sum, unless the issues in the case fall strictly within the parameters of the Commercial Division, litigants should be prepared to have their requests for assignment scrutinized and possibly rejected. Moreover, they should assume that, once their initial attempt to designate their case for assignment to the Commercial Division has been denied, the administrative judge will be unlikely to reverse that decision and transfer the case to the Commercial Division.