On June 3, 2013, Public Act 333 of 2012 (the “Act’) took effect in Michigan. The Act requires Michigan circuit courts with three or more judges to create a separate “business court” to handle commercial cases, with certain judges from these courts being assigned to preside over these cases. The Michigan legislature established the new business court in an effort to improve efficiency in the handling of business and commercial cases and to create more consistency in the process.
In this regard, the business court is akin to the “family court,” which hears only family cases (e.g., divorce, custody disputes) and is presided over by certain circuit judges.
What is a “business court” case?
The Act provides that, “A case must be assigned to the business court if the amount in controversy is greater than $25,000 and all or part of the action includes a business or commercial dispute.”
The Act defines a “business or commercial dispute” as follows:
· Any claim in which all of the parties are business enterprises.
· Any claim in which one or more of the parties is a business enterprise and the other party is currently or formerly any of the following in relation to that business:
· Owners
· Managers
· Shareholders
· Members
· Directors
· Officers
· Agents
· Employees
· Suppliers
· Competitors
· Any claim involving a non-profit in which the claim arises out of their organizational structure, governance, or finances.
· Any claim involving a sale, merger, purchase, combination, dissolution, liquidation, organizational structure, governance, or finances of a business enterprise.
The Act provides examples of such cases, including cases involving the following:
· information technology, software, or website development, maintenance, or hosting;
· the internal organization of business entities and the rights or obligations of shareholders, partners, members, owners, officers, directors, or managers;
· contractual agreements or other business dealings, including licensing, trade secret, intellectual property, antitrust, securities, non-compete, non-solicitation, and confidentiality agreements;
· commercial transactions, including commercial bank transactions;
· business or commercial insurance policies;
· commercial real property.
Specific cases falling under this penumbra would include breach of contract actions between businesses (e.g., automotive supplier disputes), shareholder or member disputes (e.g., oppression and breach of fiduciary duty claims), certain employment disputes (e.g., enforcement of non-competes, sales representative compensation claims), competitor claims (e.g., wrongful competition, trade secret violations) and many other cases that arise out of business or commerce.
The Act also identifies cases that are not business or commercial cases, including the following:
· personal injury actions, including wrongful death and malpractice actions;
· product liability actions in which any claimant is an individual;
· matters within the jurisdiction of the family division of the circuit court;
· probate proceedings;
· proceedings under the estates and protected individuals code;
· criminal matters;
· condemnation matters;
· appeals from lower courts or any administrative agency;
· proceedings to enforce judgments of any kind;
· landlord-tenant matters involving only residential property;
· land contract or mortgage foreclosure matters involving residential property;
· motor vehicle insurance coverage matters (except where 2 or more parties are insurers);
· insurance coverage disputes in which the insured is an individual consumer;
· employment discrimination matters;
· civil rights matters;
· wrongful discharge (except those involving corporate officers or directors);
· workers’ compensation matters.
Who are the “business court” judges in the Oakland County Circuit Court?
Under the Act, the Michigan Supreme Court is to assign one or more sitting judges from the circuit court to serve as the business court judge for that circuit. The number of business court judges assigned will vary by circuit, but is to be “in a number reasonably reflecting the caseload of the business court.” A circuit judge assigned as a business court judge will serve in that capacity for six years.
In the Oakland County Circuit Court, the Hon. James Alexander and the Hon. Wendy Potts have been assigned to act as the initial business court judges. They will be assigned by blind draw to each case filed in the business court. These judges have indicated that they plan to create uniformity in their forms, orders, and scheduling orders to make the litigation process easier and more uniform for business or commercial cases. They also plan to meet regularly to discuss the state of the business court and determine the best and most efficient ways to manage business court cases.
How does a case get assigned to the “business court”?
If a party believes its case falls under the jurisdiction of the business court, they are required to file a Notice of Assignment to the Business Court along with their initial pleading (complaint, counterclaim, etc.). If a party to a case not assigned to the business court believes it should be, they must file the same form with their first pleading (e.g., the answer to the complaint, counterclaim, etc.). The case will then be assigned to the business court.
The Oakland County Circuit Court has created a Web page (http://www.oakgov.com/courts/businesscourt) to keep the public apprised of any developments with the new business court. This site includes a wealth of information on the new business court, including blank Notice of Assignment to the Business Court forms. New case filers should visit this site prior to filing any new matter in the Oakland County Circuit Court to ensure compliance with the Act.
To be certain, there will be kinks to work out as the new business court is implemented in Oakland County. However, the new business court should create a smooth and efficient avenue for the resolution of business and commercial disputes.
Editor’s Note: We received the following response from the article directly from the Court:
“I enjoyed reading your blog post on the new business court. It was well written and informative. One thing I would like to clarify: the Notice of Assignment to Business Court form is not yet required because it is not a SCAO approved form. However, we recommend that attorneys or litigants use the form to ensure that the Clerk’s Office assigns a case to Business Court. MCR 2.112(O) requires only that a notice of business court eligibility appear on the face of a pleading.”
Ann Erickson Gault
Judicial Staff Attorney to the Hon. Wendy Potts
How’s that for responsiveness from our new business court?!