The Journal Gazette
Tuesday, May 31, 2016 10:02 am

Indiana ready to try out commercial courts

Sherry Slater | The Journal Gazette

Indiana’s effort to be more business friendly has included eliminating inventory taxes, investing in highways and expanding vocational training.

Walking trails, riverfront development and downtown apartments are being added to woo millennial workers. 

But state officials aren’t stopping there. They’re turning attention to the courts.

Indiana will launch a three-year pilot program Wednesday allowing most business-related court cases to be fast-tracked through the legal system.

The Indiana Commercial Court Pilot Program will allow businesses to more efficiently and predictably resolve disputes, said Allen Superior Court Judge Craig Bobay. He’s one of six ­judges statewide who agreed to preside over the special courts.

The effort started about three years ago at the Indiana Supreme Court’s request. Indiana is the 23rd state to wade into commercial courts, which are supported by the American Bar Association’s business law section but left to individual states to adopt.

State officials have budgeted $250,000 a year to cover salaries for four law clerks to support the courts. Although the courts themselves aren’t expected to save money by adding commercial courts, businesses that participate are expected to save.

A group of judges and lawyers from large and small firms statewide met regularly, reviewing other states’ commercial courts’ guidelines and crafting rules for Indiana.

"We’re learning from others," said Michael Michmerhuizen, a partner with Barrett McNagny. 

"We did not reinvent the wheel on this," Bobay said of interim rules that define, among other things, the kinds of cases the court will accept. The committee borrowed heavily from Ohio and Michigan rules. 

Bobay and Michmerhuizen led a three-hour continuing education session this month at the Allen County Bar Association’s office. They were joined by Karen Moses, a partner with Faegre Baker Daniels, and Shane Mulholland, a partner with Burt, Blee, Dixon, Sutton & Bloom. About 25 attorneys attended.

Attorneys are being encouraged to share feedback – good and bad – after they gain experience with commercial court. The working group plans to revise the rules along the way.

Presenters outlined the kinds of cases commercial court can handle: lawsuits involving trade secrets, contracts, noncompete agreements, sales transactions, antitrust law and franchise relationships.

What doesn’t qualify? Personal injury claims, eminent domain cases, routine debt collection, lemon law cases, federal law- or state law-based discrimination cases, most environmental cases and most employment law cases.

Indiana’s rules relied heavily on Michigan’s business court, which launched in October 2012, Bobay said. John Nevin, the Michigan Supreme Court’s spokesman, said the state has 16 business courts.

One was established in every circuit with three or more judges.

"It’s going really well," he said, referring to 940 opinions that have already been rendered and posted online.

Although no official data are available, informal feedback suggests that business-related cases are being resolved more quickly in the specialty court. That speed, again anecdotally, contributes to savings, Nevin said.

"We think so, but we’re not quite sure," he added.

No case will be channeled into Indiana’s commercial court if the participants don’t want it there, Bobay said. Every party involved in the lawsuit has to agree or the case will travel the conventional court route.

"There is nothing intended to be sneaky or prevent anyone from being on the docket or requiring them to be on the docket," Moses said.

"We don’t want this to be a trap," Bobay said. "We only want people in the program who are interested in the program."

Bobay sees some distinct advantages to going the commercial court route – for qualifying cases filed Wednesday or later.  

Some cases are incredibly complex, he said. By designating a half dozen judges statewide to handle them, the court system is allowing those judges to develop a greater expertise in the intricacies of business, patent law and various relatively arcane rules.

Well-informed judges, presumably, would render predictable decisions when deciding similar cases. 

Nevin said that advantage seems to be playing out in Michigan, where business court judges are developing expertise in business matters. 

Commercial courts push lawyers to be prepared, work with opposing counsel when feasible and alert the court when a technicality might delay the process. Typical civil cases can take years to settle – 10 years or more. With this approach, lawyers agree not to request more time or use other delay tactics.

Two local business leaders said they’re looking forward to the commercial court option.

Jim Bushey, president of Bushey’s Windows Doors & Sunrooms, said sometimes emotions take over in business disputes and people need outside help to settle issues. The traditional court system is too full of delays, he said. 

"I just think it’s going to be more efficient," Bushey said.

That efficiency, he said, will save time and money.

Matt Momper, president of Momper Insulation, agreed.

"Time is money," he said. "If you get (legal disputes) over quick, then you can move on with your life and your business life."

During the years it takes cases to be resolved in regular court, executives still have to draft budgets and make other business plans, Momper said. If they plan conservatively to allow for a potential court loss, then they aren’t using assets to their full potential, he added.

"This is what I call bringing common sense to the courts. It’s streamlining the process," Momper said. "It’s not cutting any corners."

Bushey likes the idea of developing judges with business expertise, which should mean decisions with added insight.

"He might come back and say, ‘Here, you two, here’s what you should be doing because I’ve seen these cases 10 times over,’ " Bushey said. 

As for economic development, Momper sees commercial courts as a definite plus for Indiana in the same way that the Komets, TinCaps, Mad Ants and Fort Wayne Philharmonic are selling points for the Fort Wayne.

Although some people have expressed concern that fast-tracking some commercial cases will shove other civil cases into the slow lane, Bobay doesn’t expect that to happen.

Taking complex cases away from judges who don’t want to deal with them will make the system work more efficiently, he said.

Commercial court is also designed to encourage opposing parties to settle disputes without going to trial in the first place. 

Bobay expects costs will decline as cases are wrapped up more quickly. That, he said, is a good thing.

"It doesn’t mean lawyers will be running out of business," he said.

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