OCBA UPDATE: Get ready, business courts are coming: some points to consider

By Peter Alter While consideration has been given to establishing business courts in Michigan for more than a decade, recently it has become clear that business courts, sometimes referred to as "specialized business dockets," are about to be a reality. This has occurred because a number of forces starting with the State Bar of Michigan's Business Impact Committee of the Judicial Crossroads Task Force, with support from the Supreme Court Administrative Office, Governor Rick Snyder and various legislators, have coalesced to make this happen. Frankly, for now there is no more need to discuss whether such business courts are needed. That debate is over - at least until the soon-to-be established pilot project proposed through the Supreme Court Administrative Office has been completed at the end of 2014. Although no decision has yet been made about how the business court or the specialized business docket will operate in Oakland County, it is worthwhile to discuss the operation of the business court and to understand some of the reasons for, goals of, and issues relating to the proposed business court. In fact, no firm definition of a "business" case has been established, but it seems clear that the business courts are intended to handle "business-to-business" cases - not those involving consumers. Tentatively, and consistent with the recommendations of the State Bar's Business Impact Committee, the types of cases that would qualify as business court cases are all cases involving business governance, internal affairs of businesses including shareholder derivative and oppression suits, and general business disputes including business torts, contracts, anti-trust, intellectual property, trade secrets, securities and commercial real estate disputes. In addition, no damages threshold has been set to qualify a case for the business court. Nevertheless, it does not seem as if every filed "business-to-business" case ought to be in the business court. Should there be no special threshold or should the minimum claim be set at $50,000, $100,000, $500,000 or even $1,000,000? Some recommend that "business" cases be assigned to judges having specialized experience in business and commercial law. In turn, those judges are expected to be able to create a body of business case law that promotes consistency and increases guidance for parties and lawyers so that litigation risks can be properly understood and assessed. Others suggest that establishing a specialized business docket does not require cases to be heard by only one or two judges in the circuit, but can be part of a specialized business docket for each judge in the circuit, with procedures and guidelines established that will be uniquely applicable to business cases. While the expertise of judges regarding complex business cases may seem reasonable to some, it seems to others that having a very limited number of judges decide important business court cases presents its own problems with potential biases, predilections and philosophies of individual judges. Businesses also have complained that their litigation has been held hostage to criminal cases because of a person's right to a speedy trial. Plainly, there is some truth to this complaint. Will the business court judges no longer have any criminal case docket? If so, will all of the other civil division judges be responsible for handling those criminal cases no longer being assigned to the business court judges? And, if that happens, will it mean that the non-business civil cases are pushed even further down the priority pole because fewer judges will be handling more criminal cases that get priority over civil cases? Or, if business court judges maintain their criminal case load, how will that affect their ability to effectively and speedily resolve business cases? Of course, another goal and a primary reason for business courts is for business and commercial cases to move more swiftly through the system, thereby reducing litigation costs for the parties and the court systems. Some maintain that business cases, at least complex commercial ones, always are going to move more slowly through the system as the result of such cases being more labor-intensive and involving more factual and legal issues, thereby limiting the ability of judges to resolve them "quickly." As part of the program relating to such business courts, the business court judges also will be required to issue written opinions (to be placed on a county or statewide website available for viewing) for all judgments rendered in non-jury trials and for important rulings granting or denying motions for summary disposition, among other things. The notion is that this will be one of the primary ways to establish consistent decision-making along with a ready and available body of case law. It's a very good, but quite time-consuming, idea. Can one or two or three judges really handle all of the "business" cases in Oakland County and maintain the goal of "expediting" cases through the system? Will those judges actually be able to try more business cases than the total number of business cases that would be tried by the entire group of judges in the civil division? In addition, part of the lure of business courts is that they are supposed to establish specialized dispute resolution programs and procedures, thereby promoting earlier and more frequent settlement of business and commercial cases which, it is claimed, are more amenable to ADR resolutions. Some, however, wonder whether the specialized dispute resolution program is anything other than ordering counsel and parties to an "early intervention conference" to be scheduled within 60 to 75 days after the filing of a complaint and at that time selecting the "proper" mediator to attempt to resolve the case. I know from experience that Judge Edward Sosnick and a number of other Oakland County Circuit Court judges have been doing exactly this, with a fair amount of success, for many years. If business cases are handled by a select number of circuit court judges in the civil division, some maintain that this will permit non-business cases to be moved more effectively and rapidly through a system no longer clogged by complex, time-consuming business cases. But, isn't it a zero-sum game? Aren't there going to be fewer judges available to handle the non-business cases (because some have been assigned to the specialized business docket)? Certainly, cost considerations are also an issue when any new program is undertaken. It is not yet clear what the additional cost would be to operate a business court in Oakland County. At a time when Oakland County has cut its budget and the Circuit Court likewise has reduced its budget by many millions of dollars over the last several years, there does not appear to be any extra money to be spent on the implementation of the business court. Of course, one of the essential and original reasons for establishing the business court is to be perceived by the business community in Michigan and beyond as being a "business-friendly" state. Creating such a perception for Michigan is a valid and important goal. But, without unduly debating the issue, it seems questionable whether establishment of a business court is going to attract businesses to or maintain them in Michigan. Undeniably, a generation ago Michigan was doing just fine in attracting businesses, even though it didn't have a business court and its courts were, if anything, less business-friendly than they are today. Moreover, many of the most important issues for businesses involve product liability lawsuits and consumer-related lawsuits, both of which are excluded from and not part of the business court. Currently, the Oakland County Circuit Court is considering various options and proposals for establishing its own "specialized business docket." To date, no final decisions have been made about how the Oakland County Circuit Court will proceed with its pilot project. As the Oakland County Circuit Court's proposal is reviewed and finalized I hope to provide additional information in an upcoming article. UNSUNG HERO This month's OCBA "unsung hero" is attorney Tim Cordes. In just this past year, he has represented several FLAP clients, providing more than 115 hours of legal services. In one case, Mr. Cordes was instrumental in assisting a married woman who had been the victim of domestic violence. As a result of Tim's efforts, this woman was awarded spousal support and exclusive possession of the marital home for 10 years. In another case involving a high level of domestic violence, Tim, representing the wife, was responsible for obtaining a PPO against the husband and also terminating a PPO that the husband had obtained against the wife. Further, Tim must have been doing something right because that husband changed attorneys four times during the proceedings. Our congratulations to Tim for his excellent efforts. ------------ Peter M. Alter, a partner in the Southfield office of Jaffe, Raitt, Heuer, & Weiss, is the 79th president of the Oakland County Bar Association. Published: Tue, Feb 21, 2012