Friday, March 20, 2009

State Business Court Specialization

judges.jpgToday at lunch, between watching the 1st round NCAA games (Geaux Tigers), we were talking about specialized courts in various fields. For example, there is currently legislation, called the Patent Pilot Program (Senate Bill 299 and House Bill 628) to designate special district court judges as "patent judges." Under the bill, not less than $5,000,000 would be set aside to provide training to judges and staff, and for the hire of specialized law clerks to assist the new "patent judge." This discussion started me thinking about State Commercial Courts. I am wondering what the impact of State Commercial Courts are on decisions to arbitrate by clients. These business courts have been established to create a forum for specialized decision making by tribunals. For example, Maryland's Business and Technology Court Case Management Implementation committee provided for specialized training for judges in handling technology for easing the case burden on certain cases. New York's Commercial Division was created to "improve the efficiency with which such matters were addressed by the court and, at the same time, to enhance the quality of judicial treatment of those cases." Likewise, the North Carolina Business court was specifically created to oversee specialized complex commercial litigation matters.


There are currently sixteen states that have either ventured to create specialized forums for commercial litigation or have entertained the idea in some form. It seems that most of these courts are designed around the complex nature of the litigation, rather than the subject matter; specifically the expertise seems to be handling document intensive litigation. So is business court or commercial court division a misnomer? Do litigants expect that Judges hearing these matters have a greater expertise than an ordinary judge in accounting principles or transactional work. If there is a higher level of expertise in transactional matters, does that have a trickle down impact on negotiating to arbitrate disputes by the parties -- (there may be other reasons for preferring arbitration, like not wanting to risk the resolution of disputes on a jury trial, but putting that aside, does the creation of a specialized forum for business problems alter parties dispute resolution choices?). Do these courts have actual technical commercial expertise, or are they just better at handling document intensive litigations than their district court counterparts. I am curious to hear from anyone that has experience with these courts.


Marc (MLR)



5 comments:

Anonymous said...

The Journal of Business & Technology Law at the University of Maryland School of Law publishes notes on recent cases from state business and technology courts. Additionally, the Journal has a really helpful website that catalogs alot of information on state business and technology courts: http://www.law.umaryland.edu/academics/journals/jbtl/bus_tech_res.html

Lee Applebaum said...

Marc,

There are two basic business court models, each of which involves a jurisdiction defined by business and commercial case types, and each of which has the same judges hearing these cases on a regular basis. Thus, both models are designed to cultivate judicial expertise in substantive business and commercial law.

One model requires that a case not only be a business or commercial case, but must also have a complexity component. Maryland's Business and Technology Case Management Program is a good example of this model. North Carolina's Business Court originally used this model, but now includes some categories of case types (e.g., statutory antitrust) that fall within the Business Court's jurisdiction without having to meet a separate complexity test as well.

The other model is solely based upon whether of not a case falls within a specifically listed set of business and commercial case types/categories, and whether a minimum threshold amount is at issue in a case. Thus, e.g., if a case involves a breach of contract between two businesses and more than $X is at stake, it will go to a business court whether the case is procedurally complex or not. This model exists, e.g., in New York's Commercial Division, Chicago's Commercial Calendar and Philadelphia's Commerce Case Management Program.

There is another kind of specialized court program that is solely focused on whether or not the case is complex. Such complex litigation dockets can be found, e.g., in some California counties, Phoenix and in Connecticut. In these programs, the judges' expertise would be primarily procedural, rather than primarily substantive as in the two kinds of business and commercial court models described above.

Maryland's Journal of Business and Technology Law is a good general resource for business and commercial court information. There are links to, or some information on, all state business and commercial courts, as well as links to some specialized complex litigation programs. Here is the link to its resource page, http://www.law.umaryland.edu/academics/journals/jbtl/bus_tech_res.html

In addition, the Business Law Today's March/April 2008 issue focused on business courts, and there are a number of articles on the subject in that issue. http://www.abanet.org/buslaw/blt/email/20080304.shtml

Finally, here is a link to a lengthy overview article on business court history from the 2004 Business Lawyer, A History of the Creation and Jurisdiction of Business Courts in the Last Decade, addressing some of the questions you raised; though there has considerable development since then as well.
http://finemanlawfirm.com/publications/final_online.pdf

I am happy to provide any further information to anyone interested in the subject.

Lee Applebaum
Co-Chair, ABA Subcommittee on Business Courts
lapplebaum@finemanlawfirm.com

Lee Applebaum said...

I see the links didn't come through completely on my original comment.

Here they are again
www.law.umaryland.edu/
academics/journals/jbtl/bus_tech_
res.html

www.abanet.org/buslaw/
blt/email/20080304.shtml

http://finemanlawfirm.com/
publications/final_online.pdf

Lee Applebaum

Anonymous said...

I think that "expertise" is a bit of a euphemism. Commercial state courts (at least in NY) are distinguished by the quality of the judges. The rich folk get the good judges; the criminals get what they can. Sounds like lawyering, n'est-ce pas?

lucas law center said...

Very entertaining posts. I think I know of some who fit under one or more of each of these categories. Of course I love them all,,

LLCS