Monday, July 1, 2013

Oakland County court to tackle business disputes

Originally Appeared in The Detroit News

One of the nation’s largest banks is trying to recoup $230,000 from a Michigan business group that the bank says failed to repay a loan.

A Novi property owner is suing a group of renters for breaking the terms of a lease.

And a Farmington company is after investors for allegedly breaking the terms of a buyout agreement.

These cases will be among the first to make their way through Oakland County’s new business court, slated to open Monday.

Business courts have been used in other states for decades, but they’re just taking off in Michigan, under a law enacted last year. That law requires circuit courts with three or more judges to establish business courts. Seventeen open for business next week.

Operated as part of the county judicial system, the court offers a new route for business cases involving more than $25,000 in damages.

The business courts are intended to ease the case load on civil and criminal courts, accelerate the litigation process, and make rulings more accessible for later reference. The biggest advantage, however, may be the individual attention given to sometimes complex cases, advocates say.

“I think there’s a need for it,” said Judge James Alexander, who, along with Judge Wendy Potts will preside over Oakland County’s business cases. “By having a specific docket, judges can become much more educated, parties can get more predictability and it gives us the time to really get into these cases early.”

Gwynne Starkey, a spokeswoman for the Oakland County Circuit Court, said Potts and Alexander will receive about five to seven civil suits each week; criminal suits will continue to go through the regular court system. Depending on the number of filings, more judges may be added to the new court division.

Michigan Supreme Court Chief Justice Robert P. Young, Jr., said the new courts “complement Michigan judicial branch’s three-part reform plan: court performance, technology, efficiency — with the best possible service to the public as the goal.”

A 'dream court'
Macomb and Kent counties have been operating business courts on a test run for about a year.

Brian Wassom, a partner at Bloomfield Hills-based law firm Honigman Miller, was part of an advisory committee that designed the pilot programs. “It gave us the chance to build something from the ground up and put together our kind of dream court,” Wassom said.

That “dream court” includes training to ensure the judges are well-versed on complicated, jargon-filled documents such as financial statements and shareholder agreements; a system that records judges’ decisions online to be consulted in future cases; and shorter periods between filing a lawsuit and seeing a judge.

Wassom last week filed a case in Washtenaw County’s business court and already knows to which judge it has been assigned.

“There is a more hands-on involvement from the court,” Wassom said. “Normally, in the state court level, there are so many cases judges can’t get involved very early on. It was helpful from a plaintiff’s perspective to know which judge we would get.”

Macomb County Judge John Foster thinks the shortened response time is key.

“I’m absolutely convinced there’s a need,” he said. “These are the kinds of cases that need somebody to be involved very early.”

It can take about six months before a judge actually sees the involved parties in regular civil cases, Foster said, since the litigation is given a one-size-fits-all court order. With the new business court, a judge holds a conference with the parties after 30-45 days.

“We have an opportunity to move the case forward with some degree of speed while not costing the clients a lot more money,” Foster said. “It’s an opportunity for early input.”

That early input, Foster said, can even lead to intervention that avoids court time.

“It’s a real control mechanism over the litigation for the judge,” he said.

Optimism for business court
States such as Delaware, California, New York and North Carolina have had special business dockets for years. While Michigan is just launching its business courts, it already has what the state Court Administrative Office calls “problem-solving” courts, such as drug courts.

Maryland-based Judge Sean Wallace, president elect of the American College of Business Court Judges, said Michigan will benefit from business courts.

“For the most part, they’re well-received by the people involved in them,” he said. “They do allow for that individual attention.”

The Lansing-based Michigan Chamber of Commerce is optimistic about the new service.

“It’s exactly what the business community desires,” said Jim Holcomb, senior vice president and general consul for the chamber. “We’re hopeful it will have a strong outcome and improve justice in Michigan.”
Michigan counties with business courts:

  • Wayne
  • Washtenaw
  • St. Clair
  • Oakland
  • Monroe
  • Macomb
  • Genesee
  • Jackson
  • Kalamazoo
  • Muskegon
  • Kent
  • Ottawa
  • Ingham
  • Calhoun
  • Berrien
  • Saginaw
  • Bay

Source: Michigan Supreme Court

How it works

Here’s how a business court will work in Oakland County:
Step one:File a lawsuit to the county’s business court.
Step two:Case is assigned to business court judge.
Step three:An answer to a complaint is filed.
Step four: Parties receive a notice to appear before the judge about 21 days after complaint is answered.
Step five:Attorneys must talk and prepare a joint plan that includes a description of their claims, what issues may arise, etc.
Step six:Meet with the assigned judge and talk about the case.
Step seven:Judge will issue an individualized scheduling order.
Step eight: The case begins, or, if applicable, could go to alternate dispute resolution.
* Procedures may differ by county
Source: Oakland County Business Court Judge Wendy Potts

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