Dollar SignSummary judgment is a critical tool in the litigator's cost control arsenal as it can save both parties from incurring astronomical trial costs in cases where arguably no triable issues exist. Under the New York CPLR, however, the denial of a strong summary judgment motion presents the moving party with a conundrum: The denial order is immediately appealable; but that appeal does not stay the trial. As a result, both the attorney and the client must bear the intense financial burden of a two-front war, and simultaneously prepare for both trial and appeal. To alleviate the strain on both parties and overburdened trial courts, we propose amending the CPLR to encourage discretionary stays of the underlying trial while an appeal of a dispositive summary judgment motion is pending. For guidance, we look to the framework crafted by the federal courts for permitting interlocutory appeals of Fed. R. Civ. P. 23(f) motions for class certification.

Stays of enforcement pending appeal are largely governed by CPLR 5519. Although at first glance 5519(a) appears to contain a lengthy list of situations in which an automatic stay is available, it is largely inapplicable to interlocutory appeals unless the government is a party. Technically, discretionary stays of interlocutory appeals are available under CPLR 5519(c) from either the trial or appellate court, but that provision provides no guidance as to when a stay is warranted. (The same holds true for the trial court's power to grant discretionary stays generally under CPLR 2201). Thus, stays are notoriously difficult to obtain absent a very favorable judge.

This reality leaves the party who filed a meritorious summary judgment motion in an unenviable position. Suffer the costs of appealing and preparing for trial, with the knowledge that if an appellate court grants the appeal, the trial preparation and costs will have been a waste of time and money. Or, avoid the costs of trial and appeal by settling the matter on undesirable terms from a position of poor leverage. Forcing litigants to pursue both paths also promotes a perversely inefficient judicial system as it simultaneously taxes both the trial courts (with unnecessary trials) and appellate courts (with wasted appeals).

At the same time, adopting extreme alternatives is also undesirable. The absence of interlocutory appeals in federal court encourages frivolous litigation and contributes to ever-rising litigation costs. But requiring automatic stays on all interlocutory appeals is untenable: It would invite a flood of meritless appeals and grind the trial courts to a halt.

To find a middle ground, in which courts will feel more comfortable issuing trial stays in worthy cases, we looked to the federal courts, who have grappled with a similar discretionary stay problem in the context of motions for class certification under Fed. R. Civ. P. 23(f). In theory, that motion is just another interlocutory motion in the lifespan of a litigation and such motions are ordinarily unappealable under the Federal Rules of Civil Procedure. In practice, however, granting a motion for class certification often coerces a quick settlement because the cost of litigating against a class are prohibitive. Thus, litigation costs once again incentivize frivolous litigation.

The drafters implemented Rule 23(f) in 1998 to address this precise issue, recognizing, inter alia, that "[a]n order granting certification … may force a defendant to settle rather than incur the costs of defending a class action and run the risk of potentially ruinous liability. These concerns can be met at low cost by establishing in the court of appeals a discretionary power to grant interlocutory review in cases that show appeal-worthy certification issues." The Rule has two facets. It trumps the usual federal prohibition on interlocutory appeals to provide that "[a] court of appeals may permit an appeal from an order granting or denying class-action certification." And like CPLR 5519(c), it permits the district judge or the court of appeals so orders to stay the proceedings pending the appeal. While the drafters suggested that the decision to grant an immediate appeal should turn on a cost-benefit analysis, they left it to the circuit courts to puzzle out the precise contours of 23(f) review.

In In re Delta Air Lines, 310 F.3d 953 (6th Cir. 2002), the Sixth Circuit enumerated an instructive list of factors to consider under Rule 23(f): "(1) whether the petitioner is likely to succeed on appeal under a deferential abuse-of-discretion standard; (2) whether the cost of continuing the litigation for either the plaintiff or the defendant presents such a barrier that subsequent review is hampered; (3) whether the case presents a novel or unsettled question of law; and (4) the procedural posture of the case before the district court." Id. at 959.

This analysis is refreshingly realistic. It recognizes that litigation has become so expensive that defendants often feel forced to settle while at the same time counseling deference to the trial court and requiring a showing that significant legal issues warrant appellate review. In other words, it strikes a balance between the parties' competing interests with an eye towards maintaining judicial efficiency at both the trial and appellate levels.

Moreover, the Sixth Circuit's analysis provides an ideal framework for analyzing an application under CPLR 5519(c) for a stay of trial proceedings pending an appeal of the denial of summary judgment. It mitigates the potential for unfettered appeals by placing a substantial burden on the moving party to show (a) likelihood of success on the merits, (b) a novel or unsettled question ripe for appellate review, and (c) what the court termed the "death knell" factor—detailed information about the potential costs and liabilities of proceeding to trial. Armed with this information, the New York state courts can then engage in a cost-benefit analysis as to whether a trial stay is appropriate under the particular facts and circumstances of a given case. In other words, adopting the Sixth Circuit's 23(f) analysis imposes a structured balancing test that modifies but still preserves the discretionary spirit of CPLR 5519(c).

Fed. R. Civ. P. 23(f) permits district and appellate judges to stay cases pending an appeal of a decision granting class certification. While the Rule does not set forth a standard, the Sixth Circuit has crafted a workable and rational, multi-factor test for addressing 23(f) applications. The New York legislature should incorporate this analysis into an amended CPLR 5519(c) in the context of trial stays pending an appeal of the denial of a motion for summary judgment. Although an increased number of stays could delay the resolution of some meritorious cases and somewhat increase the number of appeals, by requiring a balancing of cost- and merits-based factors, the New York state courts could achieve a solid middle ground between unnecessary trials and undesirable settlements all while promoting the judicial efficiency of both the trial and appellate courts. Amending the CPLR to provide guidance on discretionary trial stays is an important step in achieving those goals.

Russell Yankwitt is the founder of Yankwitt LLP. Dina Hamerman is a commercial litigator at the firm. Laura Rameshwar, an intern, assisted in the preparation of this article.