New Iowa Business Specialty Court will help efficiency, reduce costs

Three-year pilot expected to streamline eligible civil cases

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Big business cases soon will have not only their day in court, but also their very own court.

An Iowa Business Specialty Court — set in motion by the Iowa Supreme Court in December as a three-year pilot project for commercial cases involving $200,000 or more — could begin by this spring.

Lawyers who handle civil litigation say the Iowa Business Specialty Court will speed up the time it takes to get the more complex cases through court, reduce costs for clients and provide more consistent decisions or verdicts.

Greg Lederer, attorney with Lederer Weston and Craig in Cedar Rapids, said he hopes the specialty court will eliminate the frustrating delays in trying to get a civil case into court.

“Over the last seven years the system has broken down at the trial level because of (budget) cuts to the courts,” Lederer said. “The legislature continues to pile new tasks on the court system without increasing resources.

"The expense is overwhelming for these civil cases that continually get bumped for other cases that take priority like criminal or a domestic abuse, where lives are at stake, but the civil system suffers.”

Deb Tharnish, a lawyer with Davis Brown Law in Des Moines and an Iowa Civil Justice Reform Task Force member, said this is an opportunity for the court system to try something new and hopefully, draw people back to court instead of going into arbitration.

“I’m optimistic about the specialty court,” Tharnish said. “I think business leaders will be open to it, and I will give my clients the option if it’s appropriate for them.”

The three-year pilot program is a result of the work Tharnish and 70 others did as part of the Iowa Civil Justice Reform Task Force, which was formed to find ways to make the civil court system more efficient, less complicated and more affordable.

The task force members and a 14-member steering committee spent two years evaluating the civil court process and made several recommendations, including the specialty court, to the Iowa Supreme Court last year.

Eligible cases for the business court docket must have claims totaling $200,000 or more and involve civil litigation such as:

  • Technology licensing agreements
  • Intellectual property rights
  • Patent rights
  • Relate to internal affairs of businesses
  • Breach of contract
  • Fraud
  • Commercial class action
  • Trade secrets
  • Antitrust
  • Commercial real property disputes
  • Business tort claims between businesses or individuals.

There were 35,668 civil cases filed in Iowa District Courts last year, according to preliminary statistics from State Court Administration. Not all these civil cases would be eligible for the pilot project, but there are numerous contract/commercial, fraud, real property, product liability and other cases that could possibly meet the requirements.

The business court will have three assigned judges who will be selected based on their educational background, judicial and trial practice experience in complex commercial cases, and their level of interest, Iowa Supreme Court Justice Daryl Hecht said.

The deadline for judges’ applications was Jan. 18, and four judges applied for the three positions, said Steve Davis, Iowa Judicial Branch spokesman. The judges were Michael Huppert and Lawrence McLellan, both from the 5th district in Des Moines; Annette Scieszinski from the 8th district in Albia; and Jon Telleen from the 7th district in Davenport.

Marty Diaz, an Iowa City attorney and task force member, said the business court will be more streamlined for these complex cases and one of the big advantages is to have judges with the expertise to make more efficient rulings.

“Litigants need to know what the law will be — how the law will be interpreted in these cases,” Diaz said.

Mark Zaiger, with Shuttleworth and Ingersoll in Cedar Rapids, said assigning one judge to a case will help the rulings be more consistent and predictable.

Sixth Judicial District Chief Judge Patrick Grady said the district judges have to be “generalist” because they preside over a variety of cases — criminal, civil, custody, divorces. The business litigation can be complicated and time consuming.

“Many times in those cases, the lawyers have to educate us,” Grady said. “It would be good to have some judges with that expertise on those cases.”

Lederer and Zaiger said the experiment is a good thing, even if it fails.

“I like that the court is willing to give it a try,” Lederer said. “They won’t know if it will work unless they try it.”

Zaiger said it’s offered on a voluntary basis so attorneys and clients don’t have to transfer their cases to the specialty court.

Grady said his concern is how this will be managed with the other court dockets. If a judge from the 5th Judicial District becomes a business court judge it would affect other cases in that district.

“It would be difficult to be without a judge for an extended time,” Grady said. “Usually if there’s a conflict with a judge, we rely on help from a (nearby) district, which also impacts that district. We’ll have to see if the specialty court is a drag on the resources.”

Hecht said adjustments will have to be made and this program will require some flexibility.

“A judge will come to a case, instead of the case coming to the judge,” Hecht said. “If a judge is in Eastern Iowa and the case is in Northwest Iowa, adjustments will have to be made in their workload, and that will be up to the chief judge (of the districts) how to handle those.

"We have confronted those problems before with recusals and conflicts.”

Diaz said one of his goals as part of the task force was to emphasize the use of technology that would cut costs such as travel for judges, who could conduct more hearings by phone and reduce delays. The installation of the Electronic Document Management System in each judicial district also will help reduce travel time because all court documents will be available online.

Judicial district 3B has electronic management capability, work has begun in 3A and 5C and there are four counties left in 2B to complete, explained Ken Bosier, information systems and technology director for the judicial branch. All 99 counties are expected to be completed by 2015.

Hecht said he doesn’t know how many cases will be eligible or submitted into the specialty docket. Everything is open to change, and “flexibility will be hallmark” of the pilot program. The intention is not to delay or interfere with the other court dockets.

The business docket won’t be adding volume to the system.

“It may be an attractive option to litigants because it can lower their costs if the case moves through court faster,” Hecht said. “If they find ways to streamline the process, like agreeing to limit pretrial discovery, it would expedite a case.”

The specialty court isn’t a new concept, Hecht noted. The task force researched other state court systems who have adopted specialty courts including California, Pennsylvania, South Carolina, Oregon, Maryland, New York, Alabama and Arizona.

According to the task force report, after Pennsylvania developed its Commerce Court, the judges assigned to the court gained expertise in business law as well as in case management.

A judge in South Carolina said the business courts helped develop consistent case law regarding business matters, according to the task force report.

In New York, a commercial division was created that led to a 35-percent increase in the disposition of commercial cases. The business judges could dispose of more cases than other judges in a given amount of time.

Civil cases that meet the requirements, either existing ones or newly filed, will be accepted up until May 1, Hecht said.    

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