The specialized business docket pilot program debuted this year in Kent County, and earlier in Oakland and Macomb counties, to make the state’s court system more business-friendly. Even though the pilot project was just getting its legs in Kent County, state leaders have decided to take the program statewide. This month, Gov. Snyder signed legislation that makes the pilot programs state law.
The pilot program stemmed from a 2011 Judicial Crossroads Task Force study that recommended a specialized business docket to help business cases move through the court system more efficiently and to provide more consistency in the rulings on business cases.
Generalist judges typically preside over a range of criminal and civil cases and don’t get an opportunity to specialize in business law, sources told MiBiz. The pilot program aimed to test how a specialized docket could help make the courts more business-friendly by having a specialized judge on the bench deciding the cases, which should in the long run help reduce costs, sources said.
But the new law overrules the specialized business docket pilot programs at circuit courts in Kent, Oakland, and Macomb counties, and makes a few tweaks to the types of cases that can go to the specialized docket. The law establishes business dockets in any circuit court in the state that has more than three judges, effective Jan. 1. The new dockets will have jurisdiction over business and commercial cases with values in excess of $25,000.
“These specialized courts address specific needs in our judicial system, streamlining the court process and maximizing efficiency,” Snyder said at the bill’s signing.
Several West Michigan lawyers say they support the new system.
Mark Smith, an attorney with Rhoades McKee PLC with an emphasis in business and corporate law, has argued several cases before the Kent County specialized business docket while the program was in the pilot phase.
“(The process) has been entirely positive,” Smith told MiBiz.
Judge Christopher Yates presides over Kent County’s specialized business docket. Smith said Yates’ business background — the judge has an MBA from the University of Illinois — should help lead to improved consistency within cases.
“Part of the goal of the business court docket is to put all of these unique issues in front of one judge so that the judge could develop some expertise in handling the unique issues that come up in these business cases,” Smith said. “(Yates has) been publishing opinions in these business disputes that we can now all kind of rely on in guiding our clients.”
But it’s unclear whether the business courts will be organized under dedicated judges or spread over the entire bench, according to reports.
As the three-county pilot program begins to roll out statewide, Smith and Bruce A. Courtade, president of the Michigan State Bar Association and also a partner at Rhoades McKee, are confident that the similarities, as well as the differences, between the pilot program and the new legislation will lead to a better business climate in the state.
Courtade told MiBiz that the new law will:
• Establish judicial structures that will help all court users by improving the efficiency of the courts.
• Allow business or commercial disputes to be resolved with the expertise, technology, and efficiency required by the information age economy.
• Enhance the accuracy, consistency, and predictability of decisions in business and commercial cases.
“The new law signed by Governor Snyder is not really a ‘re-birth’ of the business courts but an acceleration of ideas to make our courts more user-friendly and our business climate more welcoming,” Courtade said.
Smith also points out that one of the major differences between the pilot programs and the statewide program is that the new law excludes any cases that involve domestic relations matters.
“The Kent County pilot program included domestic cases where the primary asset of the marital estate is a closely-held business,” Smith said. “The rationale utilized by the court here was in that circumstance, the division of this closely held business is exactly the same as you would encounter if two business partners were trying to break up the business. Here we happen to have a husband and wife that are breaking up the business but the issues are identical.”
As State Bar President and a commercial litigator, Courtade is excited to see how the move from the pilot program to statewide implementation will help his clients.
“The State Bar of Michigan’s Judicial Crossroads Task Force report has been lauded nationwide as an exemplary, proactive effort by a state bar to analyze the court system and what must be done to make it reflect the current state of our economy and the practice of law in the 21st Century,” Courtade said.