Circuit Court to create special court for more business-friendly state

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by Cynthia Price
Legal News

In March, 2012, the 17th Circuit Court will create the second Special Business Court in Michigan, with the intent of promoting more consistency and efficiency in dealing with the business community.

Chief Judge Donald A. Johnston was the chief architect of the Specialized Business Docket (SBD). After vetting it with 17th Circuit Court colleagues and incorporating what Johnston termed “dozens of revisions from the state,” the State Court Administrative approved the plan.

 Chief Judge Johnston issued Local Administrative Order 2011-05, dated  Oct. 18, to set out the details large and small.

One of the rather significant details which had to be determined was what judge would be assigned to the SBD. That individual has responsibility for a complex case load and greater-than-normal attorney interactions to expedite business case processing.

In Judge Christopher P. Yates, the 17th Circuit Court has the perfect candidate. Not only did Yates receive a Masters in Business Administration with a concentration in finance, but he also started out his career clerking for a federal trial judge in whose court, he says, the docket was set up much like the SBD.

“We’re lucky to have somebody who fits the bill so well,” Judge Johnston commented.

Macomb County’s 21st Circuit Court was the first to establish the SBD,  announced a little over a week ago.

Setting up a Specialized Business Docket was the recommendation of the Judicial Crossroads Task Force, a body convened by the State Bar of Michigan in 2009.

The Business Impact Committee of the task force, under the heading “Establishment of a Specialized Business Docket Pilot Program,” issued the recommendation to “Establish pilot business dockets chosen at the discretion of the Michigan Supreme Court in 2-3 circuit courts.”

The report of the full task force, however, specifically called for three-year pilot projects to be created in “at least the two largest counties,” and the body of the recommendation specifically mentioned Wayne and Oakland.

Chief Judge Johnston said that it became clear that Wayne County was not in a position to establish the pilot project court immediately. He said he believes that Oakland is likely to come on board in the near future, but Macomb County, in the meantime, felt great enthusiasm about participating.

How Kent County rose to the top of the list Johnston can only conjecture. It is the fourth largest court in the state, right behind those mentioned above. Whatever the circumstances, he says he was called into a meeting during the Michigan Judges Association conference in Mackinac Island last August.

Various state officials at that small meeting asked Chief Judge Johnston if he would be interested in establishing an SBD. “It was more or less made clear that they wanted me to volunteer,” he says, chuckling. For his part, the very experienced, long-serving circuit court judge (who took office on Jan. 1, 1989 after serving as a district court judge for the previous ten years) jumped at the chance.

“I started writing it just as soon as I got back from Mackinac,” Johnston says.

His administrative order 2011-05 states the purposes of the SBD as “reduc[ing] the time required to resolve business-related legal disputes” and increasing business case efficiency, as well as promoting more consistency in business legal decisions and developing a body of business-related case law at the trial court level. This will prevent business cases from dragging on for years, as Yates says a complex case often does, and provide more certainty for the West Michigan business community, thereby improving Michigan’s business climate.

The types of cases eligible for placement on the SBD include business torts between a business plaintiff and business defendant, intellectual property and trade secret disputes, malpractice suits by businesses against attorneys, accountants, architects, or other nonmedical professionals, insurance matters, employment law, commercial real estate disputes between businesses, and divorce cases where a closely-held business is the major asset.

Excluded cases include products liability and actions by consumers against businesses (and businesses against consumers), personal injury, medical malpractice, occupational health and safety matters, and commercial class actions. Chief Judge Johnston stated that there was no intent “to make this a sub
stitute for consumer-protection-type
litigation.”
Though the chief judge has the final say in what cases are assigned to the SBD Judge, a plaintiff or defendant may request that assignment by filing a face sheet to the complaint (or to the answer), the parties may agree to that assignment, or another judge may refer a case. There are detailed processes set out in the order describing how to remove a case from the SBD as well.
Judge Yates, who has been on the bench since April 2008, explains that dedicating all his time to the SBD should particularly help with complex cases that would normally result in lengthy trials. The mandated time frames in criminal and some aspects of family law often mean that business cases, especially those with a large amount of motions and discovery, are difficult to schedule  expeditiously.
The SBD Judge will intervene earlier, holding a status conference to set a timetable for significant milestones in the trial process — particularly helpful when there is a lot of electronic discovery needed.
“I think that early intervention by the judge with the parties should clear away a lot of the initial disputes, and streamline the discovery process,” Yates said. He pointed to a couple of foot-tall piles of file folders in his office and said, “That trial has over 1000 exhibits.”
Yates believes that his background in finance will be beneficial to expediting that process. He received both his MBA and his Juris Doctor from the University of Illinois, and often calls on that background in business cases he already handles. In fact, he said his staff often thinks he is speaking a different language when trials get into financial detail.

Judge Yates, along with Chief Judge Johnston, expresses a lot of excitement over the web site that will be created to offer easy reference to SBD opinions. Yates explains, “The judge assigned to the Specialized Business Docket will write a decision on everything and publish it, so there’s a stable body to provide a roadmap for how things are going to go for business cases.”

He says one thing he will be curious to see is how often SBD case attorneys will choose a jury trial over a bench trial. He thinks the recent jury reforms will dovetail nicely with the SBD process. “If a case goes to trial in front of a jury we would need to have the jury’s involvement, to make sure that they’re keeping up with the complexity of the case. The new jury rules will be advantageous to having reliable outcomes in business cases. If jurors are able to ask questions along the way, it not only allows them to focus, but it’s also a pretty clear indication to attorneys where they need to augment their proofs.”

Judge Yates thinks the 17th Circuit Court SBD project will be instructive both here and for others around the state, and he thinks Kent County is a good choice for a pilot. “Our court here has a reputation for efficiency, and we tend to take responsibilities assigned to us very seriously,” he notes.

Local Administrative Order 2011-05 establishes an advisory committee for oversight and evaluation of the project. Along with the SBD Judge and the 17th Circuit Court Administrator, Chief Judge Johnston will appoint “at least one civil attorney actively practicing in Kent County.”