COMMENTARY: Business courts are taking care of business

By Daniel P. Ryan

The concept and necessity of a specialized business court docket to handle complex commercial litigation in an expeditious manner has been contemplated for more than a decade. It was Gov. Snyder, however, who most recently requested that the Legislature create a business court. Effective Oct. 17, 2012, Public Act 333 requires circuit courts with three or more judges to create a specialized business court docket for business and commercial cases where the amount in controversy is more than $25,000. Business court cases include those cases where all parties are “business enterprises” as defined by statute, as well as disputes between a business and individuals connected with it, such as employees, directors, owners, or shareholders. Cases regarding corporate governance, finance, organization or dissolution are also within the scope of the legislation. Some claims on behalf or against a nonprofit may also be brought in business courts. Any case that has a business or commercial dispute as defined in the act, whether in the initial pleading or added later, must be placed on the business docket, even if the case also contains non-business claims. Courts with less than three circuit judges may, but are not required to, have a business court. Wayne County’s 3rd Circuit is one of two courts in the state to have more than one Business Court Judge. The Michigan Supreme Court originally appointed 3rd Circuit Court Judges Daniel Ryan, Jeanne Stempien, and Brian Sullivan to serve six-year terms on the Business Court. With Judge Stempien’s retirement, Judge Susan Borman was appointed to the 3rd Circuit Business Court.

The objective of Michigan’s Business Courts are to provide a case management structure that facilitates more timely, effective, and predictable resolution of complex business cases. Specialized dockets improve the efficiency of the courts, which benefits all litigants. By appointing particular judges to the business court for six year terms, the Supreme Court intended to improve predictability and consistency, to promote expertise, and to employ Alternative Dispute Resolution for swifter case resolution. Public Act 333 also encourages electronic filing of all court documents. The 3rd Judicial Circuit Court Civil Division has adopted e-filing and is completely paperless, except for asbestos cases, and also utilizes telephone or video conferencing contemplated by the statute. The statute also creates a data bank for all written business court decisions maintained by the Supreme Court’s State Court Administrator’s office for easy access by business court judges, practitioners and their clients. Chief Justice Young, Governor Snyder and the business community believe that these goals will encourage and promote a more attractive economic climate in Michigan. At the implementation of Michigan’s Business Courts, Chief Justice Young noted that Business Courts “complement Michigan judicial branch’s three-part reform plan: Court performance, technology, efficiency-with the best possible service to the public as the goal.”  Business Court Judges throughout the State meet regularly with each other, the Michigan Judicial Institute, National Judicial College, and other business court judges from across the country for specialized training on the substantive and procedural issues they confront daily.

Wayne County is home to a significant number of Fortune 500 companies. With the revitalization of Detroit and the significant increase in economic activity in Detroit and Wayne County, the 3rd Circuit Business Court is one the busiest in the state and is setting precedent for business courts across the country through our innovative docket management techniques and early use of a variety of ADR techniques.

Since July 1, 2013, when cases were first assigned to the business court, nearly 700 cases have been assigned to the 3rd Circuit Business Court. More than 50 percent of the cases filed have already been resolved with an average time of resolution of 104 days — just a few days more than three months!

The distinguishing feature of the business court docket is the statutorily required status conference within 30 days of filing an answer resulting in early judicial intervention. At this status conference, the lawyers and judge discuss discovery parameters and a scheduling order is issued. The statute also requires that at this status conference the attorneys and judge discuss various alternative dispute resolution processes including facilitation, mediation, arbitration, summary jury trials, and the latest innovative ADR processes. Participation in ADR is voluntary but many lawyers realize that ADR permits the attorneys and their clients to focus their time, energy and resources on quick resolution of commercial disputes, rather than on litigation expenses, and allows the clients to return to doing what they do best: business.

The business courts in this state have been in existence for little over a year, but it is clear that they are accomplishing their intended objective: the swift resolution of complex commercial disputes. Information and forms regarding the Business Court for the 3rd Circuit Court may be found on the courts website www.3rdcc.org. Through this court’s performance, technology and efficiency, the 3rd Circuit Business Court promotes economic growth and contributes to the revitalization of the Detroit, Wayne County, regional and State economies by providing swift resolution and the best possible service to the business community.

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Daniel P. Ryan is a Wayne Couty Circuit Court judge and currently serves on Wayne County’s Business Court.