OCBA UPDATE: Taking care of business

By James G. Derian Michigan took its first steps toward establishing a business case docket in 2001, when then-Gov. John Engler signed into law a bill creating a so-called "cyber court." The stated purpose of the cyber court statute was to allow business disputes to be "resolved with the expertise, technology, and efficiency required by the information age economy." The bill also recited some broader goals related to making the state more attractive to business. Because of perennially tight budgetary constraints, however, the Legislature never got around to allocating the necessary funds for the Michigan Supreme Court to implement the cyber court. Almost a year later in December 2001, when it had become apparent the cyber court bill was probably not going to be funded, the State Bar of Michigan Business Law Section took up the cause and set up a committee to study the merits of a Michigan business court. In April 2002, this group issued a report that offered three basic reasons in favor of a business court: (1) greater consistency, predictability and accuracy of decisions in business cases; (2) greater judicial efficiency through proactive case management, better information technology and early alternative dispute resolution; and (3) making the state more attractive to new and existing businesses. For the next seven years, the council of the State Bar's Business Law Section continued to study the concept of a business court, examining the business courts of other states. The concept did not gain much traction, however, until 2009, when the State Bar of Michigan established its Judicial Crossroads Task Force to study how Michigan could better "deliver justice in the face of diminishing resources and rising needs." In October 2010, the Judicial Crossroads Task Force recommended that the Michigan Supreme Court issue an administrative order creating pilot business dockets in at least two counties and designate no more than three judges per circuit to handle the business docket. An implementing Supreme Court administrative order had still not been issued one year later when the Macomb County Circuit Court issued its own local administrative order on October 14, 2011, becoming the first county in Michigan to create a specialized business docket. The Macomb business docket closely followed the recommendations of the Judicial Crossroads Task Force and was implemented on November 1, 2011, with the approval of the State Court Administrative Office (SCAO). Four days after Macomb, on October 18, 2011, Kent County became the second county in Michigan to establish a specialized business docket when the Kent County Circuit Court issued its own local administrative order. Like Macomb, the Kent County Circuit Court followed the recommendations of the Judicial Crossroads Task Force. Its business docket was up and running on March 1, 2012. Oakland County was a different story, however. In February 2012, the Oakland County Circuit Court issued an administrative order to start a two-year pilot project establishing a "specialized business docket," subject to approval by the SCAO. But, instead of following the Judicial Crossroads Taskforce recommendations, Oakland County raised the jurisdictional limit of the business docket from $25,000 to $500,000, thus excluding all but the larger, more complex business disputes. It also designated every single Civil/Criminal Division judge as a business court judge, deviating from the model of choosing a select group of judges who would gain greater expertise and provide more consistency of decision making. Before this Oakland County pilot program could be implemented, however, it was superseded by Michigan's new business court statute, MCL 600.8031 et sec., which was signed into law by Gov. Rick Snyder on October 16, 2012. The new business court statute closely followed the recommendations of the State Bar's Judicial Crossroads Taskforce. The Oakland County Circuit Court responded by issuing local administrative order 2013-03 to implement the mandates of the new business court law. Oakland County's specialized business docket commenced operation this year on July 1, 2013. The two sitting Oakland Circuit judges selected by the Supreme Court to preside over Oakland County's specialized business docket are Judge Jim Alexander and Judge Wendy Potts, who will serve six-year terms. The basic features of Michigan's new business court statute are: * Every circuit with three or more judges will have a business docket. * Standard jurisdictional minimum of $25,000. * Standard venue provisions. * Cases are assigned to the business docket if "all or part of the action includes a business or commercial dispute," even if it also involves non-business claims. * Cases that don't initially include a business dispute will be reassigned to the business docket if pleadings are amended to add a business claim. * Cases will be transferred out of the business docket if they cease to include a "business or commercial dispute." * "Business or commercial dispute" is defined as: (i) a case where all parties are businesses; (ii) one party is a business and the other parties are its owners, managers, suppliers or competitors, and the claims arise out of those relationships; (iii) one party is a non-profit and the claims arise out of that party's "organizational structure, governance, or finances"; or (iv) the case involves the "sale, merger, purchase, combination, dissolution, liquidation, organizational structure, governance or finances" of a business. * Expressly excluded from the business docket are cases involving product liability, personal injury, family law, probate, EPIC proceedings, criminal matters, condemnation, district and administrative appeals, enforcement of judgments, residential landlord-tenant, residential foreclosures, non-commercial insurance disputes, employment discrimination, civil rights, wrongful discharge (except corporate officers/directors), and workers' compensation. * All written opinions must be made available on an indexed website. * Appeals will be to the Court of Appeals under the ordinarily applicable court rules. It's generally acknowledged that business cases are a different breed of civil litigation. They tend to be more complex and time-consuming with thornier discovery issues. Because of these differences, business cases can sometimes cause courtroom backups and delay the resolution of other cases sitting on the same docket. The Judicial Crossroads Taskforce report contends that training a limited number of business court judges in specialized proactive case management techniques for business disputes is a more efficient and effective use of judicial resources and will have the added benefit of promoting the development of a body of business law that is more consistent and uniform statewide. The business lawyers I've talked to seem very pleased about the establishment of a specialized business docket. But, I'd like to know what you think. Is this a smart allocation of scarce judicial resources that will ultimately benefit both business and non-business litigants alike? Will it make Michigan more attractive to new and existing businesses? Your views matter to me. Email me at james.derian@delphi.com. ------------ James G. Derian, corporate counsel for Delphi Automotive Systems LLC, is the 81st president of the Oakland County Bar Association. Published: Wed, Oct 23, 2013

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