MCA Civil Procedure Defense: How to Challenge Merchant Cash Advance Lawsuits in Court

What Civil Procedure Defense Means in an MCA Lawsuit

When a merchant cash advance company files a lawsuit against your business, the legal fight does not begin and end with the contract you signed. Every lawsuit must follow civil procedure rules, and MCA funders routinely cut corners on jurisdictional requirements, service of process, venue selection, and pleading standards. Those procedural shortcuts create real defense opportunities that can slow, weaken, or eliminate the case against you.

Civil procedure defenses challenge the mechanics of how a case was brought rather than disputing whether a debt exists. In many MCA disputes, these procedural arguments are the most powerful tools available because the funder relied on a confession of judgment filed hundreds of miles from your business, chose a court that lacks authority over you, or obtained a default judgment without proper notice. Understanding these defenses is not optional if your business is facing an MCA lawsuit. It is the first layer of protection.

This guide walks through the specific civil procedure defenses that may apply in MCA lawsuit defense, how courts evaluate them, and what business owners need to do to preserve these rights before deadlines expire.

Why MCA Lawsuits Are Procedurally Vulnerable

Merchant cash advance agreements are not traditional loans. They are structured as purchases of future receivables, which means they often fall outside standard lending regulations. But regardless of how the transaction is characterized, the lawsuit itself must comply with civil procedure rules in whatever court it is filed. MCA companies frequently exploit the complexity of multi-state litigation to gain unfair procedural advantages.

Common procedural problems in MCA lawsuits include cases filed in states where the business owner has no meaningful connection, complaints that fail to attach required documents, service of process that never actually reached the defendant, and confessions of judgment entered without notice or hearing. Each of these issues can form the basis of a viable defense under applicable rules of civil procedure.

The Federal Rules of Civil Procedure and state-level equivalents provide specific mechanisms for challenging each of these defects. The key is identifying the procedural failure early and raising it before the court enters a judgment that becomes much harder to undo.

Personal Jurisdiction Defenses

What Personal Jurisdiction Means

Personal jurisdiction is the court’s authority to exercise power over you and your business. A court cannot enter a valid judgment against a defendant over whom it lacks jurisdiction, regardless of the merits of the underlying claim. In MCA cases, jurisdiction challenges arise frequently because funders file lawsuits in states like New York, where their offices are located, against business owners who operate entirely in other states.

Under the Due Process Clause of the Fourteenth Amendment, a state court may only exercise jurisdiction over an out-of-state defendant if that defendant has “minimum contacts” with the forum state sufficient to satisfy traditional notions of fair play and substantial justice. This standard, established by the U.S. Supreme Court in International Shoe Co. v. Washington (1945), remains the governing framework.

How MCA Companies Exploit Jurisdiction

Most MCA agreements contain forum selection clauses that designate New York (or another funder-friendly state) as the exclusive venue for disputes. MCA companies rely on these clauses to file suit far from the business owner’s home state, knowing that the cost and inconvenience of defending in a distant jurisdiction may pressure a quick settlement or default.

However, a forum selection clause in an MCA agreement does not automatically confer personal jurisdiction. Courts in many states have found that signing a contract with a forum selection clause, standing alone, may not be sufficient to establish personal jurisdiction over an out-of-state defendant, particularly when the clause was part of an adhesion contract with unequal bargaining power. The analysis depends on state long-arm statutes, constitutional due process requirements, and the specific facts of the business relationship.

How to Challenge Jurisdiction

A personal jurisdiction defense must be raised promptly. Under Federal Rule of Civil Procedure 12(b)(2), a motion to dismiss for lack of personal jurisdiction must be filed before or with the defendant’s first responsive pleading. If you answer the complaint without raising this defense, you may waive it permanently.

To support a jurisdiction challenge, your defense should establish that your business has no physical presence in the forum state, has no employees or agents there, did not travel to the forum state to negotiate or execute the MCA agreement, and did not direct any business activities toward the forum state beyond signing the agreement itself.

Improper Venue Challenges

Venue and jurisdiction are related but distinct concepts. Jurisdiction asks whether a court has authority over the parties. Venue asks whether the case was filed in the right courthouse within a jurisdictional system. Even if a court has personal jurisdiction, the case may have been filed in an improper or inconvenient venue.

Challenging Venue Under Federal Rules

Under Federal Rule of Civil Procedure 12(b)(3), a defendant may move to dismiss a case filed in an improper venue. Additionally, under 28 U.S.C. Section 1404(a), a court may transfer a case to a more convenient forum “for the convenience of parties and witnesses, in the interest of justice.” This transfer mechanism allows a court to move a case even when venue is technically proper, if the balance of convenience strongly favors another location.

In MCA cases filed in New York state courts, venue challenges may proceed under CPLR Section 510, which allows a change of venue when the designated county is not proper, when an impartial trial cannot be had, or when the convenience of material witnesses and the ends of justice will be promoted by the change.

Forum Selection Clauses and Their Limits

While courts generally enforce valid forum selection clauses, they are not absolute. A forum selection clause may be unenforceable if the clause was the product of fraud, overreaching, or unequal bargaining power; if enforcement would be unreasonable or unjust under the circumstances; if the chosen forum has no meaningful connection to the transaction; or if public policy of the defendant’s home state weighs against enforcement.

MCA agreements are often contracts of adhesion, meaning they are presented on a take-it-or-leave-it basis with no opportunity for negotiation. Courts have shown increasing willingness to scrutinize forum selection clauses in adhesion contracts, particularly when they effectively deny the business owner access to justice by requiring defense in a distant and inconvenient forum.

Challenging the Complaint: Failure to State a Claim

Every lawsuit begins with a complaint that must satisfy minimum pleading standards. Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a complaint that fails to state a claim upon which relief can be granted. This defense challenges whether the MCA company’s allegations, even if taken as true, would entitle it to the relief it seeks.

Pleading Deficiencies in MCA Complaints

MCA complaints frequently contain deficiencies that support a motion to dismiss. Common problems include failure to attach the complete MCA agreement as an exhibit, reliance on conclusory allegations without specific factual support, inconsistency between the claimed “purchase of receivables” structure and the actual terms of the agreement, failure to plead the specific amount of the alleged default with particularity, and failure to account for payments already made by the business.

A well-crafted motion to dismiss forces the MCA company to either fix these deficiencies (which may narrow their claims) or risk having the case dismissed. Even when dismissal is without prejudice, meaning the funder can refile, the motion buys critical time and signals to the court that the defendant is prepared to litigate aggressively.

Loan Recharacterization Arguments

One of the most significant procedural and substantive defenses in MCA litigation involves challenging whether the transaction is actually a purchase of future receivables or is, in substance, a loan. This distinction matters because if the MCA is recharacterized as a loan, it may be subject to state usury laws, truth-in-lending requirements, and other consumer or commercial lending regulations that the funder sought to avoid.

Courts evaluating recharacterization claims typically examine several factors: whether the MCA company bore a genuine risk of loss tied to the business’s actual receivables, whether daily fixed payments were required regardless of revenue, whether the agreement contained a “reconciliation” provision that the business could actually invoke, and whether the MCA company had an absolute right to repayment regardless of business performance.

If daily payments were fixed and did not fluctuate with actual revenue, courts in several jurisdictions have found that the arrangement more closely resembles a loan than a receivables purchase. This finding can open the door to usury defenses, statutory damages, and other remedies that would not be available in a true receivables purchase. For a deeper exploration of settlement options in these cases, see merchant cash advance settlement strategies.

Default Judgment Defense and Relief

Default judgments are among the most common and most damaging outcomes in MCA litigation. When a business owner fails to respond to a lawsuit within the required timeframe, the court may enter a default judgment granting the MCA company everything it requested, often without any hearing on the merits. Once a default judgment is entered, the funder can immediately begin bank levy enforcement, asset seizure, and other collection actions.

How Default Judgments Happen in MCA Cases

Many MCA default judgments result from defective or questionable service of process. The business owner may never have received actual notice of the lawsuit because service was made at an old address, was signed for by someone unrelated to the business, or was accomplished through a method that did not comply with the applicable rules. In some cases, MCA companies serve process on a registered agent or statutory agent, and the notice never reaches the business owner who needs to respond.

The tight response deadlines compound the problem. In many jurisdictions, a defendant has only 20 to 30 days to respond after service. Business owners dealing with cash flow crises, multiple MCA obligations, and daily ACH withdrawals may not prioritize a legal document they do not fully understand, and by the time they realize the severity, the default has already been entered.

Motions to Vacate Default Judgment

Federal Rule of Civil Procedure 55(c) allows a court to set aside an entry of default for “good cause shown.” Rule 60(b) provides broader relief from a final judgment for reasons including mistake, inadvertence, excusable neglect, newly discovered evidence, fraud, or any other reason justifying relief. State courts have analogous provisions, such as New York CPLR Section 5015.

To vacate a default judgment, a business owner typically must demonstrate a reasonable excuse for the default, a meritorious defense to the underlying claims, the absence of prejudice to the plaintiff if the default is vacated, and that the motion was made within a reasonable time (or within a specific statutory deadline).

Courts generally favor resolving cases on the merits rather than on procedural defaults, particularly when the defaulting party has a plausible defense. However, the motion to vacate must be made promptly. Waiting months or years after learning of the judgment significantly reduces the likelihood of success. For detailed guidance on this process, see MCA default judgment defense options.

Confession of Judgment Challenges

Confessions of judgment (also called cognovit notes) are among the most aggressive tools in the MCA enforcement arsenal. When a business owner signs an MCA agreement containing a confession of judgment clause, the funder can file that confession with a court and obtain a judgment without ever notifying the business owner or giving them an opportunity to be heard.

New York Restrictions on Confessions of Judgment

New York historically was the primary jurisdiction where MCA companies filed confessions of judgment, often against out-of-state business owners. In 2019, New York amended CPLR Section 3218 to significantly restrict this practice. The key changes include a requirement that the defendant must reside or have a principal office in New York for the confession to be filed there, mandatory affidavits detailing the facts of the default, and enhanced requirements for the content and execution of the confession itself.

These 2019 amendments created new grounds for challenging confessions of judgment entered against out-of-state business owners. If a confession was filed after the amendments took effect and the business owner does not reside in or maintain a principal office in New York, the confession may be subject to vacatur on jurisdictional grounds.

Constitutional Due Process Challenges

Even in jurisdictions that permit confessions of judgment, constitutional due process requires that the waiver of rights be knowing, voluntary, and intelligent. Courts have found confessions of judgment unenforceable when the language was buried in a lengthy contract, the business owner lacked legal representation at signing, the clause was not separately negotiated or initialed, or the business owner did not understand they were waiving the right to defend themselves in court.

The U.S. Supreme Court recognized in D.H. Overmyer Co. v. Frick Co. (1972) that while confessions of judgment are not per se unconstitutional, due process requires a voluntary, knowing, and intelligent waiver. MCA agreements, particularly those signed under financial duress, may fail this standard.

Service of Process Defenses

Proper service of process is a constitutional requirement. Without valid service, a court lacks authority to enter a binding judgment against a defendant. In MCA lawsuits, service defects are common because funders prioritize speed over compliance.

Common Service Defects in MCA Cases

Service may be challenged when papers were left with an unauthorized person at an incorrect address, when substituted service was used without first attempting personal service as required by the rules, when service by publication was used without a proper showing that other methods were impractical, when the process server’s affidavit contains inaccuracies about the time, place, or manner of service, or when service was made on the wrong entity (for example, serving a dissolved company rather than its successor).

Challenging service of process can result in dismissal of the case, vacatur of any default judgment, and a requirement that the MCA company re-serve the defendant properly. This reset can provide critical additional time to prepare a defense and may force the funder to litigate in a more convenient forum if the original service was part of a broader jurisdictional scheme.

Discovery Rights and Due Process Protections

Business owners defending against MCA lawsuits have discovery rights that can be powerful tools. Discovery allows you to demand documents, take depositions, and obtain information from the MCA company that may reveal defenses you did not initially know about.

What Discovery Can Reveal

In MCA litigation, discovery may uncover evidence that the reconciliation provision was never honored by the funder, that internal communications show the funder treated the transaction as a loan rather than a receivables purchase, that the funder failed to apply payments correctly, that the claimed default amount is inflated or inaccurate, or that the funder engaged in unfair or deceptive practices in originating or servicing the advance.

MCA companies often resist discovery aggressively, filing motions for protective orders or arguing that discovery is unnecessary in a “simple collections” case. Courts have the authority to compel discovery when the information sought is relevant to a claim or defense, and a business owner with legal representation can use this process to level the playing field.

Protective Orders and MCA Information Subpoenas

On the defense side, business owners may also need to respond to discovery demands from the MCA company, including information subpoenas directed at banks and third parties. Understanding when and how to object to overbroad discovery requests is an important part of the procedural defense strategy.

Comparison Table: MCA Civil Procedure Defenses

Defense	Legal Basis	When to Raise	Potential Outcome
Lack of Personal Jurisdiction	FRCP 12(b)(2); state long-arm statutes	Before or with first responsive pleading	Dismissal of case; funder must refile in proper court
Improper Venue	FRCP 12(b)(3); 28 U.S.C. 1404(a)	Before or with first responsive pleading	Transfer or dismissal; case moves to more favorable forum
Failure to State a Claim	FRCP 12(b)(6)	Before or with first responsive pleading	Dismissal of complaint; funder must amend or refile
Insufficient Service of Process	FRCP 12(b)(5); state service rules	Before or with first responsive pleading	Dismissal; funder must re-serve properly
Vacate Default Judgment	FRCP 55(c); FRCP 60(b); CPLR 5015	After default entered; time-sensitive	Judgment vacated; case reopened for defense on merits
Challenge Confession of Judgment	CPLR 3218 (as amended 2019); due process	After learning of judgment entry	Vacatur of judgment; funder must file proper lawsuit
Loan Recharacterization	State usury laws; UCC Article 9	In answer or counterclaim	Transaction treated as loan; usury defense may apply
Forum Selection Clause Challenge	Contract law; unconscionability doctrine	In motion to dismiss or transfer	Clause invalidated; case dismissed or transferred

Emergency Checklist: First Steps After Receiving an MCA Lawsuit

The first 72 hours after receiving notice of an MCA lawsuit are critical. Missing deadlines can permanently waive defenses that might otherwise have won the case. Use this checklist to protect your rights from the moment you learn about the action.

☐	Record the date of service. Your response deadline is calculated from this date. In most jurisdictions you have 20 to 30 days.
☐	Identify the court and jurisdiction. Note whether the case was filed in state or federal court and in which county or district.
☐	Evaluate personal jurisdiction. Determine whether the court has authority over you based on your business’s contacts with the forum state.
☐	Check service of process. Was the complaint served on the correct person, at the correct address, using a method authorized by the applicable rules?
☐	Review the MCA agreement. Look for forum selection clauses, confession of judgment provisions, arbitration clauses, and personal guarantee language.
☐	Gather payment records. Document every payment made to the MCA company, including ACH withdrawals, wire transfers, and any manual payments.
☐	Check for UCC filings. Search the Secretary of State’s office in your state for any UCC-1 financing statements filed by the MCA company against your business.
☐	Protect your bank accounts. Consider whether bank account freezes are imminent and whether protective measures are warranted.
☐	Consult an attorney immediately. Civil procedure deadlines are strict. Many defenses must be raised in the first responsive pleading or they are waived forever.
☐	Do not ignore the lawsuit. Ignoring the case will result in a default judgment, which may allow immediate bank levies, asset seizures, and collection enforcement.

When Bankruptcy Provides a Procedural Shield

In some cases, the most effective procedural defense against an MCA lawsuit is not a motion filed in the pending case but a bankruptcy filing that triggers the automatic stay under Section 362 of the Bankruptcy Code. The automatic stay is an injunction that takes effect the moment a bankruptcy petition is filed, immediately halting virtually all collection actions, lawsuits, judgments, and levies against the debtor.

For business owners facing MCA lawsuits, a Chapter 11 or Subchapter V bankruptcy filing can stop the litigation in its tracks while the business develops a reorganization plan. The automatic stay prevents the MCA company from continuing the lawsuit, enforcing any existing judgment, executing on bank accounts or assets, and continuing ACH withdrawals. This option is particularly valuable when procedural defenses alone may not fully resolve the situation or when the business faces multiple MCA obligations simultaneously. Learn more about how UCC liens interact with bankruptcy filings.

Counterclaims and Affirmative Defenses

Civil procedure does not just allow you to defend. It also allows you to bring claims against the MCA company in the same action. Counterclaims may be available when the funder engaged in deceptive practices, breached the terms of the agreement, or violated applicable state laws governing commercial transactions.

Common Counterclaims in MCA Cases

Potential counterclaims in MCA litigation may include breach of contract (when the funder failed to honor reconciliation provisions or other agreement terms), fraud or misrepresentation (when the funder materially misrepresented the terms or costs of the advance), violations of state consumer protection or commercial financing disclosure laws, tortious interference with business relationships (when the funder’s collection actions disrupted the business’s relationships with banks, vendors, or customers), and conversion (when the funder seized funds or property without legal authority).

Filing counterclaims shifts the dynamic of the litigation. The MCA company, which expected a straightforward collection action, now faces its own liability exposure. This can significantly improve settlement leverage and, in some cases, may result in the funder’s claims being reduced or offset entirely.

Affirmative Defenses to Preserve

Beyond procedural motions and counterclaims, a defendant’s answer should include all applicable affirmative defenses. In MCA cases, these may include usury (if the transaction is recharacterized as a loan), unconscionability, waiver, estoppel, failure to mitigate, unclean hands, and illegality. Each affirmative defense must be pled in the answer or it may be considered waived. Consulting with a business litigation attorney early in the process helps ensure that no viable defense is inadvertently abandoned.

Strategic Considerations: Settlement vs. Litigation

Not every civil procedure defense will result in outright dismissal of an MCA case. In many situations, the strongest defense strategy combines procedural challenges with settlement negotiations. A credible jurisdictional defense or a viable motion to vacate a default judgment creates leverage that can lead to significantly better settlement terms.

MCA companies factor litigation risk into their settlement calculations. A funder facing a well-supported motion to dismiss for lack of personal jurisdiction, a motion to vacate a default judgment with strong procedural grounds, or a loan recharacterization defense with usury implications may agree to substantial reductions to avoid the cost and uncertainty of contested litigation. For more on this approach, see merchant cash advance debt relief options.

Frequently Asked Questions About MCA Civil Procedure Defense

What is a civil procedure defense in an MCA lawsuit?

A civil procedure defense challenges how the MCA lawsuit was filed and prosecuted rather than disputing the underlying debt. These defenses target issues like personal jurisdiction, improper venue, defective service of process, and procedural failures in obtaining judgments. They may result in dismissal, transfer, or vacatur of a judgment even when the funder has a valid contract claim.

Can I challenge an MCA lawsuit filed in another state?

Yes, in many cases. If your business operates entirely in one state and the MCA company filed suit in a different state, you may challenge the court’s personal jurisdiction over you. Courts require “minimum contacts” between the defendant and the forum state to exercise jurisdiction. A forum selection clause in the MCA agreement does not automatically confer jurisdiction, and courts may refuse to enforce it when doing so would be unreasonable.

What is personal jurisdiction and why does it matter in MCA cases?

Personal jurisdiction is the court’s authority to exercise power over a specific defendant. Without it, the court cannot enter a valid judgment against you. MCA companies frequently file lawsuits in funder-friendly jurisdictions far from the business owner’s location. Challenging jurisdiction can force the case into a more convenient court or result in dismissal.

What happens if I do not respond to an MCA lawsuit?

If you fail to respond within the deadline set by the court’s rules, the MCA company can request a default judgment. A default judgment gives the funder the ability to pursue bank levies, asset seizures, and other collection actions without ever having to prove its case. Responding promptly, even if only to raise procedural defenses, is critical.

Can I vacate a default judgment from an MCA case?

Vacating a default judgment is possible under Rule 60(b) of the Federal Rules of Civil Procedure or equivalent state rules. You generally must show a reasonable excuse for the default, a meritorious defense to the claims, and that vacating the judgment would not unfairly prejudice the plaintiff. Courts generally prefer to resolve cases on the merits, but you must act promptly after learning of the judgment.

What is a confession of judgment in an MCA agreement?

A confession of judgment is a clause in which the business owner agrees in advance to let the MCA company obtain a court judgment without notice or a hearing. New York amended CPLR Section 3218 in 2019 to restrict this practice, requiring that the defendant reside or maintain a principal office in New York. Confessions filed against out-of-state defendants after this change may be subject to vacatur.

Are forum selection clauses in MCA contracts always enforceable?

No. While courts generally respect forum selection clauses, they may be unenforceable if the clause was part of an adhesion contract, if enforcement would be unreasonable, or if the chosen forum has no meaningful connection to the transaction. Courts have increasingly scrutinized these clauses in MCA agreements, particularly when they effectively deny the business owner a meaningful opportunity to defend.

What is the difference between a motion to dismiss and an answer?

A motion to dismiss asks the court to throw out the case (or specific claims) based on procedural or legal deficiencies in the complaint. An answer is the defendant’s formal response to the allegations. In many cases, a defendant may file a motion to dismiss first, and if the motion is denied, then file an answer. Some procedural defenses must be raised in the motion to dismiss or they are waived.

Can I file counterclaims against the MCA company?

Yes. Civil procedure rules allow defendants to assert counterclaims in the same action. Common counterclaims in MCA cases include breach of contract, fraud, violations of state commercial financing laws, and tortious interference with business relationships. Counterclaims create settlement leverage and may offset or exceed the funder’s claims.

How do I challenge service of process in an MCA case?

A motion challenging service of process must identify specific defects in how the complaint was delivered. Common grounds include service at the wrong address, service on an unauthorized person, failure to follow the sequence of service methods required by the rules, or inaccurate affidavits of service. Successful challenges may result in dismissal or require the funder to re-serve you properly.

What is the automatic stay and how does it relate to MCA lawsuits?

The automatic stay is an injunction under Section 362 of the Bankruptcy Code that takes effect immediately when a bankruptcy petition is filed. It halts virtually all collection actions, including pending MCA lawsuits, bank levies, asset seizures, and ACH withdrawals. Filing for Chapter 11 or Subchapter V bankruptcy can stop an MCA lawsuit and provide time to reorganize.

What is loan recharacterization in an MCA dispute?

Loan recharacterization is the argument that an MCA agreement, despite being labeled a “purchase of future receivables,” functions in substance as a loan. If a court agrees, the transaction may be subject to state usury laws and lending regulations. Courts consider factors like whether daily payments were fixed regardless of revenue and whether the funder bore genuine risk of loss.

How long do I have to respond to an MCA complaint?

Response deadlines vary by jurisdiction. In federal court, you generally have 21 days from the date of service (or 60 days if served outside the state through waiver of service). State court deadlines range from 20 to 30 days in most jurisdictions. Missing this deadline can result in a default judgment, so identifying and calendaring the deadline immediately is essential.

Can procedural defenses reduce the amount I owe?

While procedural defenses primarily target the validity of the lawsuit rather than the debt amount, they often lead to reduced settlements. An MCA company facing a strong jurisdictional challenge or a viable motion to vacate a default judgment may agree to significantly reduced terms rather than risk dismissal. Procedural leverage is a practical tool for achieving better financial outcomes.

What role does the UCC play in MCA civil procedure defense?

The Uniform Commercial Code governs how security interests in business assets are created, perfected, and enforced. MCA companies routinely file UCC-1 financing statements to claim priority in a business’s receivables and assets. Procedural challenges to these filings, including arguments that the filing is overbroad or improperly perfected, may be raised as part of a comprehensive UCC lien defense strategy.

Should I negotiate with the MCA company before raising procedural defenses?

In most cases, it is strategically preferable to raise procedural defenses before or concurrently with settlement negotiations. Procedural defenses create leverage that can lead to better settlement terms. Negotiating without raising defenses signals to the funder that you accept the court’s authority and the validity of its claims, which may weaken your bargaining position.

What if the MCA company filed multiple lawsuits against my business?

Multiple lawsuits from different MCA companies create complex procedural challenges. Each case must be evaluated independently for procedural defenses, but it may be possible to consolidate related cases, seek a global settlement, or pursue a bankruptcy filing that addresses all obligations simultaneously. Multiple MCA obligations also increase the practical arguments for recharacterization and for the immediate cessation of ACH withdrawals.

Can I represent myself in an MCA civil procedure defense?

While individuals may represent themselves in court (pro se representation), MCA civil procedure defenses involve complex legal analysis, strict deadlines, and procedural requirements that are difficult to navigate without legal training. Business entities, such as LLCs and corporations, generally cannot appear pro se and must be represented by an attorney. Even individual defendants benefit significantly from legal representation in these cases.

What is a motion to transfer venue in an MCA case?

A motion to transfer venue asks the court to move the case to a different courthouse, either because the current venue is improper under the applicable rules or because the convenience of parties and witnesses favors transfer. In MCA cases filed far from the business owner’s location, transfer motions can move the case closer to home, reducing litigation costs and creating a more level playing field.

How does the 2019 New York confession of judgment reform affect MCA cases?

The 2019 amendments to CPLR Section 3218 restricted the filing of confessions of judgment in New York to cases where the defendant resides or has a principal office in New York. For out-of-state business owners who had confessions filed against them after this change, the reform provides new grounds for vacating those judgments. The amendments reflect legislative recognition that out-of-state confessions were being used to deny business owners meaningful access to justice.