Business and Commercial Courts

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Business Courts, sometimes referred to as Commercial Courts, are trial courts that primarily or exclusively adjudicate internal business disputes and/or commercial litigation between businesses, heard before specialist judges assigned to these courts.[1][2] Commercial Courts outside the United States may have broader or narrower jurisdiction than state trial level business and commercial courts within the United States, for example patent or admiralty jurisdiction[3]; and jurisdiction may vary between countries.[4]

Business and Commercial Courts in the United States[edit]

Business Courts in the United States have been established in approximately twenty-five states. In some cases, a state legislature may choose to create a business court by statute. In other cases, business courts have been established by judicial rule or order, at the state supreme court or trial court level.[5] Georgia created a statewide business court by constitutional amendment.[6]

In virtually all cases, the jurisdiction of the court to hear certain cases is limited to disputes that are in some way related to "business" or commercial disputes, and generally fall into two categories: (1) those courts which require that cases have an additional complexity component; and (2) those courts which establish jurisdictional parameters (i) through a defined list of case types (ii) combined with a specified minimum amount of damages in controversy, irrespective of complexity.[7]

In New York, for example, the trial level Supreme Court Commercial Division, following the case type and jurisdictional amount in controversy model, has jurisdiction over 12 listed case categories, such as breach of contract or Uniform Commercial Code claims, corporate internal affairs disputes, partnership law disputes, banking transaction matters, business torts, shareholder derivative actions, commercial class actions, and environmental or commercial insurance coverage disputes. By further rule, the Commercial Division expressly cannot hear a defined list of seven different categories of case types. Commercial Division Rule 202.70(a) sets out jurisdictional monetary thesholds, ranging from $50,000 in some counties to $500,000 in the Manhattan Commercial Division.[8] The Massachusetts Superior Court's Business Litigation Session (BLS) includes a jurisdictional list of case types, but instead of focusing on monetary thresholds as a gatekeeping mechanism, its governing directive provides for inclusion of listed case types only where "the BLS in the sound discretion of the BLS Administrative Justice, based principally on the complexity of the case and the need for substantial case management," selects a case for inclusion.[9]

There are mixed models as well, with some mandatory case type categories specifically listed and other types requiring an element of complexity. The Maryland Circuit Court's Business and Technology Case Management Program follows this mixed approach, including certain listed "presumptive" case types within the program's mandatory jurisdiction, while other case types must be judicially determined to present "commercial or technological issues of such a complex or novel nature that specialized treatment is likely to improve the administration of justice."[10] North Carolina's Business Court[11] has a mixed legislative model that includes, among other things, a large amount in controversy provision ($5,000,000) placing certain case types under the mandatory jurisdiction category that would otherwise be subject to an element of judicial discretion, and a category where the parties may consent to jurisdiction if other criteria are met,[12] as well as a relatively seldom used court rule allowing designated judges discretionary authority to assign a case to the Business Court's docket.[13]

The modern creation of specialized Business Courts in the United States began in the early 1990s,[14] and has expanded greatly in the last thirty years.[15] Business courts (which are often business programs or divisions within existing trial level courts) are operating in New York City and 10 other jurisdictions throughout New York State as the New York Supreme Court Commercial Division,[16] Chicago, North Carolina, New Jersey, Philadelphia and Pittsburgh, Pennsylvania, Reno and Las Vegas, Nevada, Massachusetts, Rhode Island, Maryland, Orlando,[17] Miami, Ft. Lauderdale, and Tampa, Florida, Michigan,[18] Cincinatti,[19] Cleveland[20] and Toledo,[21] Ohio, Iowa, Maine, New Hampshire, Metro Atlanta regionally and Georgia Statewide, Delaware's Superior Court and Court of Chancery, Nashville, Tennessee,[22] Wisconsin,[23] Indiana,[24] Arizona, Kentucky,[25] South Carolina,[26] West Virginia,[27] and the Wyoming Chancery Court.[28] This mapshows states having business courts either statewide, in multiple counties or cities, or within a single major city or county, which is accurate through April 2023. In New York, Chicago, Philadelphia, Massachusetts,[29] North Carolina, South Carolina and New Jersey, among other states with business courts, the original programs have expanded by adding judges and/or by expanding into additional cities and counties.[30][31][32]

In 2023, Utah adopted legislation creating a statewide Business and Chancery Court, which will become operational in 2024.[33] On June 9, 2023, Texas' governor signed an Act into law creating a Business Court.[34] The new law became effective in September 2023, but the Business Court will not be open for cases until September 2024 at the earliest.[35] The Hamilton County, Ohio Court of Common Pleas had discontinued its Commercial Docket in 2017, but revived it effective March 1, 2024.[36]

Delaware's Court of Chancery, the pre-eminent court addressing intra-business disputes, has functioned as a business court of limited jurisdiction for a century.[37] However, its traditional equity jurisdiction has evolved and expanded since 2003 to include technology disputes (10 Del. C. § 346), some purely monetary commercial disputes (10 Del. C. § 347), and to expand its role in the alternative dispute resolution of business and commercial disputes. This includes the use of mediation (10 Del. C. § 347), Masters in Chancery to adjudicate matters (10 Del. C. § 350), and agreements to make decisions non-appealable (10 Del. C. § 351).[38]

California,[39][40] Connecticut,[41] Oregon, and Minnesota have created specialized courts or tracks for complex litigation,[42] tying specialization to process and case management rather than legal subject matter, which could include some complex business and commercial disputes among a broader array of subject matter case types. Minnesota General Rule of Practice 146.02 provides an example of the process oriented nature of these specialized tracks. California's complex litigation programs are not statewide, but includes at least the following Superior Courts: Alameda, Contra Costa,[43] Los Angeles,[44] Orange,[45] Riverside,[46] Sacramento,[47] San Francisco,[48] San Mateo,[49] and Santa Clara.[50] There is a sufficient relationship between these specialized complex litigation dockets and business courts that, for example, former Orange County Complex Litigation Program Judge Gail A. Andler is a past president of the American College of Business Court Judges (ACBCJ),[51][52] and a number of California's complex litigation judges, and Minnesota complex litigation Judge Jerome Abrams, have served as Business Court Representatives[53] to the American Bar Association's Section of Business Law. Judge Abrams is also a 2023-2024 Vice President of the ACBCJ.[54]

Other states are in various stages of moving toward or away from business or complex courts, with Colorado having conducted extensive studies over two decades ago into the merits and potential parameters of creating a business court on a broad basis,[55] which was not pursued, and later experimenting with a business court, the Civil Access Pilot Project, from 2012-2015; and Orlando, Florida having to move resources away from its Complex Business Litigation program into its family court,[56] though this program was restored in October 2019,[57] New Jersey expanding to a statewide business court track in 2015, after having only two counties with specialized commercial courts for 20 years,[58] and South Carolina's Business Court went from a regional pilot program and is now a permanent statewide program.[59] Milwaukee had a pilot business court program, implemented by the Milwaukee Circuit Court via local rule, that was little used and ended in 2009,[60] but Wisconsin's Supreme Court implemented a broader business court pilot program in 2017, which has expanded to a number of circuit courts and administrative districts throughout the state.[61] Oklahoma Statute §20-91.7 was enacted in 2004, authorizing the Supreme Court to create business court divisions in Tulsa and Oklahoma City,[62] but the Supreme Court has never chosen to do so; however, in 2024, Oklahoma's Governor has supported creation of business courts in Oklahoma.[63]

The American College of Business Court Judges was established in 2005.[64] The American Bar Association has played a significant role in the development of business courts.[65] The ABA Business Law Section has also created the Business Court Representative Program to include business and complex litigation judges in its community and educational programming. Since 1996, the Association of Corporate Counsel has similarly endorsed the creation of business courts in the United States where appropriate.[66]

International Business and Commercial Courts[edit]

Business and Commercial Courts exist internationally as well,[67][68][69] including, for example, the Business and Property Courts of England and Wales (encompassing 13 specialized courts or lists),[70] Toronto,[71] Quebec,[72] and Alberta,[73] Canada, Ireland,[74] Scotland,[75] Denmark, Netherlands,[76] Hong Kong, Belgium, Bermuda, Queensland[77] and Victoria, Australia,[78] New Zealand (Commercial Panel),[79] Northern Ireland,[80] Qatar,[81] Dubai,[82] Spain,[83][84][85] France (where the commercial courts are not divisions of other civil courts, but are autonomous[86]), Switzerland,[87][88] Austria,[89]Tanzania,[90] Rwanda,[91] Lesotho,[92] South Africa,[93] the British Virgin Islands,[94] St. Lucia,[95] Cayman Islands,[96] Guyana,[97] India,[98] Japan,[99][100]Malaysia,[101] Thailand,[102] Kenya,[103] Malawi,[104] Saudi Arabia,[105] and Croatia.[106]

New English language commercial courts have been created in Paris, Frankfurt, the Netherlands,[107][108][109] Stuttgart | Mannheim, Germany,[110] Singapore,[111]Abu Dhabi,[112] and Kazakhstan.[113] This reflects the growth in international commercial courts designed to hear disputes among parties from different nations.[114][115][116] The DIFC Courts in Dubai have had an English language international court for nearly two decades.[117] Some international commercial courts include foreign judges with commercial court experience on their bench,[118][119][120] for example, former Delaware Vice Chancellor and Supreme Court Justice Carolyn Berger serving on Singapore's International Commercial Court.[121]

The Business and Property Courts of England and Wales encompass 13 different courts or lists, for example, the Commercial Court, the Business List, the Circuit Commercial Court, the Technology and Construction Court, the Insolvency List, and the Intellectual Property Enterprise Court.

In 2023, 40% of Commercial Court cases, within the Business and Property Courts of England and Wales, involved opposing parties from different nations, and 64% involved a mix of UK parties and international parties.[122][123] There is a view that the more recently created commercial courts designed to hear disputes between parties of different nations will compete with the London based commercial courts as the preferred litigation forum for international commercial disputes.[124] In 2017, New York's Commercial Division added a "Large Complex Case List," modeled on the Business and Property Courts' Financial List for high stakes commercial litigation, as part of an overall effort to compete with the London based commercial courts as a preferred forum for international litigation.[125][126][127][128][129]

The jurisdictional scope of these international commercial courts[130] may have some differences with that of United States business and commercial courts. For example, the Business and Property Courts of England and Wales include specialized courts or lists for admiralty,[131] insolvency,[132] and patents,[133] which in the United States would typically be subject to jurisdiction in federal tribunals, such as the United States Bankruptcy Courts[134] or the United States District Courts, and not in specialized state trial level business courts. The scope of any commercial court's jurisdiction may vary between countries.[135]

The Standing International Forum of Commercial Courts was created in 2016.[136] In its 2023 policy resolution, the Association of Corporate Counsel recognizes and endorses the creation and support of business courts internationally, as well as in the United States.[137]

Technology Disputes & Cyber Courts[edit]

In the United States and internationally, "[t]he notion of specialized courts to decide technology disputes has a rich history with noteworthy milestones."[138]

Some states have established specialized business and commercial courts that include technology disputes as part of their express jurisdiction.[139] Through legislative effort and court rule, in 2003, Maryland established a Business and Technology Case Management Program. In May 2003, Delaware expanded the Court of Chancery's jurisdiction to include technology disputes, and the mediation of other kinds of business disputes (10 Del. C. §§ 346, 347).[140] West Virginia's Business Court Division Rule 24.09 expressly includes technology issues. The Davidson County, Tennessee Business Court Docket expressly encompasses technology and biotechnology licensing.[141] North Carolina's Business Court jurisdiction expressly includes computer software, information technology and systems, data and data system security, biotechnology and bioscience technology.[142] Under Michigan's statutes, MCL Sec. 600.8031(2)(b), business court jurisdiction includes business or commercial disputes "involving information technology, software, or website development, maintenance, or hosting...."[143] Wyoming Chancery Court Rule 2(b)(17) provides jurisdiction over disputes "concerning a digital asset registered under W.S. § 34‑29‑201 through 34‑29‑209[144]...."[145] New York Commercial Division Rule 202.70(b)(1), addressing that business court's jurisdiction, was amended in February 2024 to expressly include "technology transactions and/or commercial disputes involving or arising out of technology".[146] This amendment is intended to make clear the New York business court's experience in handling technology disputes, especially in light of the fact that "many of the business courts in other states have emphasized their jurisdiction over and experience with adjudicating technology disputes...."[147]

There are also examples of international courts expressly addressing technology disputes as part of their jurisdiction. The Practice Directions (Part XXIV) of Singapore's International Commercial Court include a Technology, Infrastructure, and Construction List.[148] In 2024, the Commercial Court, within Ireland's High Court, was in the process of developing "a specialist sub-list called the Intellectual Property and Technology List with specialist judges from the Commercial Court." The Victoria, Australia Commercial Court expressly includes jurisdiction over "Proceedings relating to technology, engineering and/or construction...."[149] The DIFC Courts Technology and Construction Division has jurisdiction over, among other things, "claims relating to the design, supply and/or installation of computers, computer software and related network and information technology systems and services...."[150]

Some jurisdictions emphasized the idea that newly created business courts would make use of cutting edge technologies in handling business litigation, becoming so-called "cyber courts."[151] For example, North Carolina's Business Court was an early proponent of electronic filing and high-tech courtrooms.[152] New York's Commercial Division created "Courtroom 2000" making various technologies available for use by the courts and parties, while also serving as "a technological laboratory" for later use in all of New York's state courts.[153] The use of technology in case management may be especially apt in international commercial courts, with litigation between parties from different nations.[154] For example, the ADGM Courts in Abu Dhabi self-describe as "the world's first end-to-end, fully digital courts platform...."[155]

Entities and Committees Involved in Developing and Maintaining Business Courts[edit]

The history of business and commercial courts in the United States provides considerable examples of task forces, advisory bodies, bar associations and other entities involved in their creation, development and refinement, and in providing education on their operations.

A number of business courts were created after studies carried out by task forces. For example, Maryland's General Assembly created a Business and Technology Court Task Force to study the feasibility of a specialized business and technology court in Maryland, that included judges, legislators, bar association members, and others from the business and academic communities.[156] With approval from South Carolina's Chief Justice, the South Carolina Bar created a Task Force on Courts, consisting of judges and lawyers, to study the creation of a specialized business court, among other tasks.[157] The Delaware Superior Court's President Judge "appointed a committee of nine lawyers ... to explore the management of complex and commercial litigation matters within the Court and to make recommendations about the handling of such matters...."[158] In 1994, North Carolina's Governor established the North Carolina Commission on Business Laws and the Economy, and North Carolina's Business Court was created after the Commission's 1995 report and recommendations.[159] In 1999, a Nevada Legislative Commission formed a Subcommittee to Encourage Corporations and Other Business Entities to Organize and Conduct Business in this State, that included a number of state legislators and legislative counsel, and an advisory committee including a deputy secretary of state, the president of the Nevada Business Journal, the chair of the State Bar's Business Law Section, and the deputy director of a commission on economic development.[160] Other examples of states creating task forces to study and make recommendations concerning the implementation of business courts include, among others, Michigan,[161] West Virginia,[162] Arizona,[163] Georgia,[164] Iowa,[165] New Jersey,[166] and Ohio.[167] The Texas Judicial Counsel's[168] Civil Justice Committee's 2022 Report and Recommendations recommended creating pilot business courts.[169]

Other groups have studied and reported on operations and practices in functioning business and commercial courts, to provide information and/or recommendations. In Massachusetts, Superior Court Chief Justice Suzanne V. DelVecchio appointed a body of lawyers with a variety of backgrounds to a Business Litigation Resource Committee, to report on the Suffolk Superior Court's Business Litigation Session.[170] The North Carolina Administrative Office of the Courts has submitted annual reports on the North Carolina Business Court for over 20 years.[171] Arizona's Supreme Court created the Commercial Court Review Committee to study and make recommendations concerning the Commercial Court docket in Phoenix.[172] Iowa's State Court Administration has made annual reviews of the Iowa Business Specialty Court as a pilot project and will make reports on the permanent business court.[173] Tennessee's Supreme Court created a Business Court Docket Advisory Commission[174] to study the ongoing operations and make recommendations concerning continuation of Tennessee's Business Court.[175] West Virginia's Business Court Division makes annual reports.[176] Wisconsin's Supreme Court created the Business Courts Advisory Committee ("consisting of judges, private attorneys, and administrative staff"), which was both involved in the 2017 creation of commercial dockets in Wisconsin, and in the expansion of, and practices in, the Commercial Docket Pilot Project.[177]

Some councils and committees take an active role in business courts' ongoing operations. In 2013, New York Court of Appeals Chief Judge Jonathan Lippman established the New York Commercial Division Advisory Council (CDAC) to implement recommendations for his earlier created Task Force on Commercial Litigation in the 21st Century.[178] The CDAC "is composed of distinguished commercial practitioners and Judges from around the state and [has been] chaired by Robert L. Haig, Esq. [since its inception]."[179][180] In addition to providing education about the Commercial Division,[181] the CDAC has regularly recommended Commercial Division rule changes that have been adopted after an opportunity for public comment.[182][183][184][185]

The Philadelphia Bar Association's Business Litigation Committee plays a role in selecting lawyers as Judges Pro Tempore to serve as court appointed neutrals and mediators in Philadelphia Commerce Court cases,[186] as well as working with the Commerce Court in other ways.[187] The Boston Bar Association's Business and Commercial Litigation Section holds an annual event, "Business Litigation Session[188] Year in Review", where the bar can hear directly from Business Litigation Session judges.[189] The Florida Bar's Business Law Section has a Business Courts Task Force.[190] The Ohio State Bar Association's Corporation Law Committee urged a detailed resolution to expand the Commercial Docket statewide.[191] The Kentucky Bar Association's Business Law Section put on programming about Kentucky's newly established business court.[192][193]

Indiana provides an example where essentially the same advisory entity has addressed all aspects of adjunct support to create and maintain a business court. The Commercial Courts Working Group began in 2014 as a project headed by Superior Court Judges Heather Welch and Craig Bobay, who recruited judges, lawyers and academics to work on creating commercial courts in Indiana. In 2015, Indiana's Supreme Court formalized the group, after which it evolved into a broader membership, tasked with answering specific questions and carrying out specific functions toward the possible implementation of commercial courts. A pilot commercial court program was created in 2016, and the Working Group was then tasked with studying and improving the ongoing commercial court.[194] In 2019, the pilot commercial courts were made permanent and the Working Group was replaced by the Commercial Courts Committee, which was to provide future guidance on the Commercial Courts, consisting of one judge from each Superior Court Commercial Court, litigators representing small and large businesses, transactional attorneys representing small and large businesses, in-house counsel representing small and large businesses, other commercial litigation attorneys, one or more legislative representatives, one or more members of the Chamber of Commerce, and one or more law professors in relevant subject matter.[195]

Private entities have also carried out implementation or operational studies at the behest of courts, for example, the Institute for the Advancement of the American Legal System[196] studies and reports for Colorado's pilot business courts (Civil Access Pilot Project),[197] the National Center for State Courts Commercial Court Evaluation for the Superior Court of Arizona in Maricopa County[198] and its study of civil programs in Philadelphia's Court of Common Pleas (including its Commerce Court),[199] a private firm study to create a business court in Atlanta (Fulton County Superior Court),[200] and a good government group's (The Committee of Seventy) study of Philadelphia's Commerce Case Management Program.[201] The National Center for State Courts, working with the Tennessee Administrative Office of the Courts, also has developed a curriculum and faculty guide for creating business courts.[202]

Business Courts and Alternative Dispute Resolution[edit]

The significant relationship between business courts and Alternative Dispute Resolution, such as mediation, neutral evaluation,[203] and arbitration, is well recognized, both in seeing business courts as a competitor forum with arbitration, and in using ADR as a complementary adjunct to the litigation process..[204][205][206][207][208] Thus, for example, New York Commercial Division Rule 3 allows for court appointed mediators and neutral evaluators,[209] the enabling order for Philadelphia's Commerce Case Management Program creates an alternative dispute resolution program utilizing Judges Pro Tempore within court mandated settlement conferences, and discretionary referrals to private mediation,[186], North Carolina Business Court Rule 11 addresses mandatory mediation,[210] and Florida's Ninth Judicial Circuit Business Court Procedures, Section 8, requires mandatory ADR for each case, and addresses non-binding arbitration as well as mediation.[211] The Business and Property Courts of England and Wales Commercial Court Guide, Section G, addresses "Negotiated Dispute Resolution" (NDR), including mediation, conciliation, direct negotiations between party representatives, and early neutral evaluation.[212] Some business courts expressly encourage the use of special masters or referees in expediting some types of decision making during the litigation process.[213][214]

The New York Commercial Division and the Metro Atlanta Business Case Division are empowered to hear court-based disputes concerning international arbitration proceedings.[215][216]

Appellate Business and Commercial Courts[edit]

In 2023, Texas passed a law creating an appellate level business court, the Fifteenth Court of Appeals, which will not become operational until September 2024, at the earliest.[217] Once operational, it would become the first specialized appellate level business court in the United States.[218] On February 6, 2024, the Texas Supreme Court approved a preliminary set of appellate rules for this new court, subject to public comment (which closed on May 1, 2024).[219] Pennsylvania earlier passed a law, in 2020, encouraging the Superior Court of Pennsylvania to create a specialized appellate Commerce Court,[220] but that intermediate appellate court has not done so. Other appellate courts have been described as commercial or business courts, not by design, but in reference to their actual case work, such as the United States Court of Appeals for the Seventh Circuit,[221] and the Delaware Supreme Court.[222] India's Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act includes provisions for specialized commercial appellate divisions.[223][224]

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