Comments on Recent Cases: January 2026
Part of my work involves reading court decisions to keep abreast of how judges decide the types of cases I handle. Below, I share some thoughts on recent decisions.
Court Refuses to Quash Third-Party Subpoena
People are often surprised that litigants are entitled to demand people produce personal records as evidence in a lawsuit, even from people who are not parties to the lawsuit. While the recipient of a subpoena can object, courts often rule in favor of disclosure.
For example, in a recent case before the state appeals court in Manhattan, a woman challenged a subpoena she received from an accounting firm. The subpoena demanded information about a government investigation into her taxes. She objected, claiming the firm could get the same information from other sources. But the trial court and appeals court held that was an insufficient objection and ordered her to respond to the subpoena.
Cases like this illustrate how courts may have a liberal attitude towards litigants’ entitlement to discovery.
Court Refuses to Allow Default Judgment
It is important for defendants in litigation to promptly respond to a complaint. If they do not, a plaintiff may obtain a default judgment against them. But courts still apply strict rules to plaintiffs seeking default judgments.
For example, in a recent case before the state appeals court in Manhattan, a plaintiff sued a defendant, who did not timely respond before the court. But the parties entered settlement discussions. After more than a year, the settlement discussions did not conclude and the plaintiff sought a default judgment for non-response. The appeals court ruled that the plaintiff had waited too long to seek the judgment and that the defendant’s participation in settlement discussions did not prolong the deadline for the plaintiff’s motion.
Decisions like this illustrate how strictly courts may enforce rules for default judgments.
Court Narrows Duration of Non-Competition Agreement
Many courts will enforce non-competition agreements that employers have with former employees, but courts are careful in how far these enforcements go. Just because a contract says one thing does not mean a court will interpret it the same way as its drafters.
For example, in a recent case before the state appeals court in Manhattan, an interior design company sought to enforce a three-year non-competition agreement against a former employee. The employer said that employee agreed to the three-year restriction because he accepted six months’ severance pay in the contract. The court held that only the first six months of the period were enforceable, and that not paying him for the remaining two and a half years made the clause “overly broad.” The employee was free to pursue business with any construction company in the city when the severance period elapsed.
Cases like this illustrate how courts can decide how to enforce noncompete agreements.
Court Reinstates Claims Against Individuals Despite Corporate Entity
People form business entities to, among other reasons, shield themselves from personal liability. But just because a person created or works for a company does not mean they are immune from liability. A plaintiff can argue the entity was not really distinct from the person and “pierce the corporate veil.” Or the plaintiff can argue the person is liable for their own personal conduct, regardless of their employment.
For example, in a recent decision by the state appeals court in Manhattan, a plaintiff sued both a limited liability company and individuals who operated the company, alleging they stole trade secrets. The claim against the individuals had been dismissed, but the appeals court reversed this dismissal. Even though the appeals court did not disturb the ruling that the individuals had not “dominated” the company, which situation may have allowed the plaintiff to bypass the company and sue the individuals, the appeals court held that the individuals could be liable for their own thefts separate from the conduct of the business entity.
Cases like this illustrate how individuals can be liable in litigation, despite the existence of a company.