This bill has been amended

Bill S4530-2011

Establishes guidelines for information subpoenas

Establishes guidelines for information subpoenas.

Details

Actions

  • Jun 6, 2011: ADVANCED TO THIRD READING
  • Jun 2, 2011: 2ND REPORT CAL.
  • Jun 1, 2011: 1ST REPORT CAL.915
  • Apr 11, 2011: REFERRED TO JUDICIARY

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Memo

BILL NUMBER:S4530

TITLE OF BILL: An act to amend the civil practice law and rules, in relation to establishing guidelines for information subpoenas

PURPOSE: To require that judgment creditors meet the reasonable belief standard required before serving information subpoenas by requiring that the judgment creditor state the grounds by which the he/she has determined that the person being served has information about the debtor which will assist in collecting the judgment. This bill also requires that information subpoenas be served individually.

SUMMARY OF PROVISIONS: Section one amends section 5224 of the CPLR by amending paragraph 3 (i) and (ii). The amendment to the first paragraph provides that each information subpoena shall be individually mailed. The amendment to subparagraph (i) provides that a judgment creditor can only serve an information subpoena if he or she has stated the grounds on which they have formed a reasonable belief that the person being served has information about the debtor. Sub-paragraph (ii) provides that an information subpoena that does not contain the required verification or does not meet the mailing requirements shall be deemed null and void.

Section two sets forth an immediate effective date.

JUSTIFICATION: In New York State, there has been a vast increase in the number and frequency of information subpoenas served. These subpoenas have become overly burdensome and voluminous in nature and labor intensive to comply with. In the vast majority of cases, the individual for whom information is sought has no relationship to the persons served.

This bill establishes a mechanism that will ensure the reasonable belief standard is met when information subpoenas are served. A judgment creditor, or the judgment creditor's attorney, must verify which grounds he or she has relied on to form a reasonable belief that person served has information about the judgment debtor. This bill also requires each information subpoena to be mailed separately.

This legislation is designed to reduce the number of unfounded information subpoenas. An information subpoena may be a valuable tool for a judgment creditor. If used properly, an information subpoena can provide important information that enables a judgment creditor to collect his or her debt. However, information subpoenas can be abused and can create a burden on third parties without providing the necessary information to creditors. This bill establishes a procedural framework to ensure that information subpoenas remain a productive device for judgment creditors. If further provides relief to third parties who are inundated with subpoenas requesting information about debtors with whom, there is no reason to believe the judgment creditor has any ties.

LEGISLATIVE HISTORY: This is a new bill.

EFFECTIVE DATE: This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 4530 2011-2012 Regular Sessions IN SENATE April 11, 2011 ___________
Introduced by Sens. SALAND, FARLEY -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the civil practice law and rules, in relation to estab- lishing guidelines for information subpoenas THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 3 of subdivision (a) of rule 5224 of the civil practice law and rules, as amended by chapter 452 of the laws of 2006 and the opening paragraph as amended by chapter 552 of the laws of 2006, is amended to read as follows: 3. an information subpoena, accompanied by a copy and original of written questions and a prepaid, addressed return envelope. Service of an information subpoena may be made by registered or certified mail, return receipt requested. EACH INFORMATION SUBPOENA SHALL BE SEPARATELY MAILED. Answers shall be made in writing under oath by the person upon whom served, if an individual, or by an officer, director, agent or employee having the information, if a corporation, partnership or sole proprietorship. Each question shall be answered separately and fully and each answer shall refer to the question to which it responds. Answers shall be returned together with the original of the questions within seven days after receipt. Where the person serving the subpoena is a judgment creditor, other than where the state, a municipality or an agency or officer of the state or a municipality is the judgment credi- tor, the following additional rules shall apply: (i) information subpoenas, served on an individual or entity other than the judgment debtor, may be served on an individual, corporation, partnership or sole proprietorship only if the judgment creditor or the judgment creditor's attorney has a reasonable belief that the party receiving the subpoena has in their possession information about the debtor that will assist the creditor in collecting his or her judgment. Any information subpoena served pursuant to this subparagraph shall
contain a certification signed by the judgment creditor or his or her attorney stating the following: I HEREBY CERTIFY THAT THIS INFORMATION SUBPOENA COMPLIES WITH RULE 5224 OF THE CIVIL PRACTICE LAW AND RULES AND THAT I HAVE A REASONABLE BELIEF THAT THE PARTY RECEIVING THIS SUBPOENA HAS IN THEIR POSSESSION INFORMATION ABOUT THE DEBTOR THAT WILL ASSIST THE CREDITOR IN COLLECTING THE JUDGMENT. By signing the certification, the judgment creditor or attorney certifies that, to the best of that person's knowledge, information and belief, formed after an inquiry reasonable under the circumstances, that the individual or entity receiving the subpoena has relevant information about the debtor. ANY INFORMATION SUBPOENA SERVED PURSUANT TO THIS SUBPARAGRAPH SHALL BE ACCOMPANIED BY A VERIFICATION STATING THE GROUNDS BY WHICH THE JUDGMENT CREDITOR HAS FORMED THE REASONABLE BELIEF REQUIRED BY THIS SUBPARAGRAPH. FOR PURPOSES OF AN INFORMATION SUBPOENA SERVED ON A FEDERAL OR STATE CHARTERED CREDIT UNION, VERIFICATION SHALL INCLUDE A STATEMENT THAT THE JUDGMENT DEBTOR IS ELIGIBLE TO BECOME A MEMBER OF THE CREDIT UNION. (ii) if an information subpoena, served on an individual or entity other than the judgment debtor, does not contain the certification OR VERIFICATION provided for in subparagraph (i) [of] OR IS NOT MAILED IN ACCORDANCE WITH this paragraph, such subpoena shall be deemed null and void. (iii) if an information subpoena, served on an individual or entity other than the judgment debtor, does contain the certification provided for in subparagraph (i) of this paragraph, the individual, corporation, partnership or sole proprietorship receiving the subpoena, may move to quash the subpoena pursuant to section twenty-three hundred four of this chapter, except that such motion shall be made in the court that issued the underlying judgment. (iv) failure to comply with an information subpoena shall be governed by subdivision (b) of section twenty-three hundred eight of this chap- ter, except that such motion shall be made in the court that issued the underlying judgment. S 2. This act shall take effect immediately.

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