In the past week, New York has taken a number of steps to restrict movement in and around the State in an effort to contain the COVID-19 crisis. Governor Andrew Cuomo has issued executive orders and the chief judges of the state and federal courts have issued administrative orders that have had a sweeping impact on the legal industry as well as the business community at large. We are closely monitoring any developments in this area but, for now, here’s what you need to know:

Executive Order Regarding Non-Essential Business Activities

On Friday, March 20, 2020, Governor Andrew Cuomo announced the “New York State on PAUSE” Executive Order. (E.O. 202.8). E.O. 202.8 states that as of 8:00 p.m. on March 22, 2020, all “non-essential” businesses in New York State must reduce in-person workforces by 100% and utilize, to the maximum extent possible, any telecommuting or work from home procedures to continue operations. In addition, any businesses providing “essential” services are required to implement social distancing measures. Although theorder does not define “essential services,” an earlier executive order (E.O. 202.6) tasked the New York State Department of Economic Development(d/b/a Empire State Development) ("ESD") with defining which businesses qualified as “essential.” In addition to medical care, infrastructure, and food retail, the following are also considered “essential” services in New York:

  • Banks, insurance, accounting and services related financial institutions;
  • News media;
  • Restaurants (only for take-out or delivery);
  • Hotels and places of accommodation;
  • Mail and shipping services;
  • Providers of basic necessities to economically disadvantaged populations; and
  • Vendors that provide essential services or products, including logistics and technology support, and child care services.

Do Law Firms Qualify As "Essential"

Although ESD's initial guidance left open the question of whether law firms counted as "essential," it subsequently clarified its guidance.  ESD stated:

Law firms and other providers of legal services are essential businesses only to the extent that their services are currently needed to support the essential functions of health care providers, utilities, state and local governments, the federal government, financial institutions, businesses that have been designated as essential; or to support criminal defendants in court proceedings or individuals in emergency family court proceedings; or to participate in proceedings concerning the imminent release or detention of individuals subject to criminal or civil detention under any applicable provision of state or federal law, or proceedings to address emergency risks to health, safety, or welfare.

In other words, a law firm is not, by itself, an essential business under E.O. 202.8, but it may be deemed essential if the firm supports other "essential" businesses or operations.  In that case, the firm should still limit its in-person operations to those performing essential functions.  In addition, other portions of E.O. 202.8 may permit an individual with a law firm to continue to be present to accept and route mail and other deliveries that may contain essential communications.

ESD also allows businesses that are not otherwise listed as “essential” to request a special designation in order to maintain in-person operations. As a result, any lawyer or law firm that believes their practice should qualify as “essential” but cannot rely on current guidance, should promptly seek guidance from ESD. Otherwise, lawyers should make sure they have the tools they need to run their practice remotely for the foreseeable future.

Executive Orders Suspending Statutes of Limitations and Allowing Virtual Notarization 

Governor Cuomo also signed executive orders that temporarily changed New York’s procedural laws to account for the in-person workforce reductions throughout the State. These changes include: 

  • Suspending all statutes of limitations. E.O. 202.8 tolls all statutes of limitations contained in New York’s civil and criminal procedural laws from March 20, 2020 until April 19, 2020. Absent a new executive order, statutes of limitations will begin to run again after that time period. 
  • Shareholder Meetings. E.O. 202.8 suspends until April 19, 2020 the requirement in New York’s Business Corporation Law that shareholder meetings be noticed and held at a physical location.
  • Virtual Notarization. E.O. 202.7 provides that until April 18, 2020, any notarization required under New York law may be performed via audio-visual technology provided certain conditions are met, including that the individual seeking to have a document notarized provide sufficient proof of identification in a videoconference and that the individual affirmatively represent that he or she is physically situated in the state of New York.

In light of these temporary changes in the law, lawyers should make sure they are on top of upcoming deadlines in both litigation and transactional matters and should plan accordingly.

Court Closings and Administrative Orders

In addition to the executive orders, courts throughout the state have suspended or adjourned non-essential matters and have largely cancelled in-person appearances.  The following is a summary of the latest:

  • Chief Judge Janet DiFiore issued an Order on March 22, 2020, which suspended all non-essential filings in any state court in New York.  There is no end date to Judge DiFiore's order, but it is likely that it will track Governor Cuomo's decision to suspend statutes of limitations and whether the current April 19, 2020 deadline is extended.
  • The Four Appellate Divisions have issued orders suspending indefinitely deadlines to perfect appeals.  These orders also apply to any pending motions, which include attorney grievance matters. 
  • The New York County Supreme Court has adjourned all non-essential matters, cancelled all oral arguments and postponed jury selection for all civil trials. The courts remain open for emergency applications, which will take place by video conference.
  • The United States District Court for the Second Circuit has extended all filing deadlines by 21 days.  In addition all oral arguments will proceed telephonically.
  • The U.S. District Courts for the Southern and Eastern Districts of New York remain open but have restricted operations to essential activities and have cancelled all non-case related events. Any decisions regarding appearances in a federal matter and upcoming deadlines are reserved to the judge presiding over the case. In addition, lawyers may need to make individual applications to appear by telephone, depending on the rules of the presiding judge.

If lawyers are unsure how these administrative orders apply to their cases in either state or federal court, they should consult the judge’s individual rules and also consider seeking guidance from the court. Clients should also be promptly notified of these developments, especially if the client is planning to attend an upcoming court appearance.

Conclusion

Lawyers and law firms should pay close attention to these temporary changes in the law and should consider the impact these developments will have on their practice both in the short term and the long term. We will continue to monitor any developments and if something changes we will let you know.