Business Class-- State officials hail formation of business court

By Paul Janczewski

Legal News

If ever there was a time that Michigan needs to send a message encouraging businesses to locate here, it's now. For years, the state has been mired in a national economic slump that has seen layoffs, high unemployment, and government cutbacks.

The recent formation of a business court docket in Macomb County, the first in Michigan, and a House bill to create a statewide business court are two steps in the right direction.

"Businesses look to states that have courts that provide efficient and expeditious ways of solving business problems," said Kevin A. Fanning, a business attorney and partner for Clark Hill. "That could tip the scales in favor of the state with a business court docket."

State Rep. John Walsh, chairperson of the Judiciary Committee and Speaker Pro Tem of the House recently introduced legislation to create a business court system in Michigan, which he hopes makes the state offer a friendly climate for companies, and more jobs for Michigan residents.

Fanning said the idea of creating a business court in Michigan has been discussed for the past 10-15 years among lawyers involved in various state Bar of Michigan committees to "create a part of the court system that is more expeditious and less expensive to litigate business disputes, thereby making the court system here more attractive to businesses that might locate here."

He said the idea really took hold when one of the state Bar Judicial Crossroads Task committees recommended a business court docket within circuit courts that would serve business cases that met certain criteria.

It called for the formation of a pilot project.

Chief Circuit Judge Mark Switalski of Macomb signed an administrative order establishing the pilot project and assigned Judge John Foster to handle complex business cases, Fanning said.

Fanning said the Crossroads Task Force looked at 27 other states that currently have business court dockets and decided having one in Michigan would make our overall court system more efficient, and make it less expensive for business to do business in Michigan, thereby making our state look more attractive to staying here, or locating here.

In the Macomb County business docket would receive cases filed after November 1 that fall into one of the following three categories:

* Category 1 cases include business torts, antitrust law, intellectual property, trade secrets between business, security law and other.

* Category 2 cases, which include collection of professional fees and some others, will only be assigned to the business court docket by mutual agreement of the parties.

* Category 3 cases, including products liability, personal injury and wrongful death, medical malpractice and some others, will be excluded from the business court docket.

"The expectation will be that (Judge Foster) will be better able to control his docket and flow cases through more quickly, and try to seek earlier resolution of cases using ADR mechanisms, and get the parties talking about the case problems quicker, and if it has to go to trial, it'll be a faster process," Fanning said.

He said Gov. Rick Snyder also is a proponent on the business court, and all these people, from the State Bar committee members, to Snyder's team, and others, including the Walsh bill, "came together at the same time."

Under Walsh's bill, the new court division would be divided into four regions, roughly tracking the four appellate districts. One judge in each district would be designated as the business court docket judge, although the size of the district, willingness to cooperate and number of filings would all be key factors. Some counties may opt out, and other counties may elect to have their own business court docket, based on factors in each particular county or region.

It would operate similar to the Macomb County pilot project, with a few differences. But the bottom line would be to create an environment where business disputes would be handled by judges with expertise in specific areas, creating an atmosphere favorable to those disputes by being faster and cheaper than what exists now.

Walsh said he's been encouraged by the response so far, from colleagues in both the state House and Senate, as well as Snyder's office. He said some details have to be worked out, and it will likely undergo some changes as it moves through the legislative process.

Walsh also said Macomb County's pilot program is "exactly what the state Bar had hoped for," and both will send a message encouraging businesses to locate in Michigan to take advantage of it.

"If we can create an environment where businesses have a greater certainty in the judicial process...that will peak their interest," Walsh said.

He hopes to have his bill go through the House and Senate and signed into law by March 2012.

Published: Thu, Dec 1, 2011

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