On May 17, 2023, 2023 Assembly Bill 280 was introduced in the Wisconsin Legislature. A copy of the bill can be found here.
The parallel bill in the Senate, 2023 Senate Bill 275, can be found here.
Among other things, the proposed legislation would “statutorily recognize a specialized docket for commercial cases in state circuit courts.” Such a commercial court docket “is designed to operate within the framework of the existing state court system with minimal impact on the balance of court operations. It is intended to leverage judicial expertise in commercial law and
disputes with commercial litigants’ desire to tailor case management practices best suited for resolving substantial business disputes fairly and expeditiously.”
At first glance, the proposed legislation appears generally to map the contours of the Wisconsin Supreme Court’s Commercial Docket Pilot Project (aka the Business Court) which the Supreme Court established in 2017. We have previously summarized the beginnings of Wisconsin’s Business Court, here. The Business Court expanded in 2019, and again in 2020 (see this post, and order expanding into Dane County.)
On June 29, 2022, in a 4-3 decision, the Wisconsin’s Supreme Court granted a petition to extend the Commercial Docket Pilot Project to July 30, 2024. A copy of the Order can be found here.
The Order adds language expressly stating that the Chief Justice will select judges for this docket, “after considering the recommendation of the chief judge of the Judicial Administrative District” where a particular Business Court is located.
Looking from the outside, the Wisconsin Business Court finds itself caught in Wisconsin’s persistent political maelstrom. Thus, in light of the recent judicial elections in Wisconsin, there is likely a concern that the 4-3 majority vote in 2022 to extend the Business Court docket into 2024, could become a 4-3 majority vote to end the pilot project in 2024, when it comes before the Supreme Court again. This current legislative effort may be anticipating that concern, and is seeking to place the Business Court on a more permanent footing.
Business Courts as Non-Partisan/Bi-Partisan
From a national perspective, one of the benefits of business courts has been their non-partisan nature, and bi-partisan support, in many jurisdictions. By way of example, states as diverse as New Jersey, Pennsylvania, and Utah have passed legislation to create business courts with unanimous, or near unanimous, support from all political parties in those states’ legislatures. As another example of bi-partisanship, in the first few years of the American College of Business Court Judges’ operations, its programs were sponsored by the Brookings Institute’s and American Enterprise Institute’s, AEI-Brookings Joint Center for Regulatory Studies.
Historically, business courts both were adopted early on in states and cities typically associated with Democratic majorities (e.g., Boston, Chicago, Maryland, Rhode Island, New York), but also rejected in two states seen as having Democratic majorities (California and Connecticut). States seen as having Republican majorities, e.g., Georgia (State-wide, by constitutional amendment), Indiana, South Carolina, and Tennessee have created business courts more recently.
Unfortunately, Wisconsin’s passionate politics includes a divisive debate over its current Business Court. One former judge has painted a portrait of a “shadowy” court, which has drawn responses, e.g., that the Business Court is performing an open public service.
Wisconsin Business Court
Wisconsin judges are elected. Business Court judges are not specifically elected by voters to sit on business courts, but only elected generally to serve on a court, e.g., trial level circuit courts. Under the current pilot program, the Chief Justice selects the Business Court judges. This heated dispute seems to center on how and why the judges being appointed as trial level business court judges are selected.
In general, since business courts are designed to handle business-to-business disputes or internal corporate governance disputes, there should not be the kind of business vs. consumer perspective that might exist in courts of general jurisdiction, i.e., individuals who have suffered personal injuries and consumers who have suffered financial damages should not be litigants in most specialized business courts. Thus, the idea of a pro-business/anti-consumer judge does not fit in the business court setting.
[In fact, the Business Court’s operational rules provide the following case types are not within the Business Court’s jurisdiction:
a) Cases involving small claims under ch. 799, stats.;
b) Cases involving a governmental entity or political subdivision seeking to enforce a statutory or regulatory restriction or prohibition;
c) Cases involving consumer contracts or transactions; landlord/tenant disputes; domestic relations claims; labor claims; receivership, insolvency, or liquidation cases; malpractice claims; personal injury claims; product liability claims; civil rights claims; tax disputes; cases seeking to compel arbitration or to affirm or disaffirm an arbitration award; construction claims; or environmental claims unless the claim or dispute identified in this section is ancillary and incidental to a case assigned to the Commercial Court under section 4.
Similarly, the proposed legislation states that the following case types would not be subject to the business court’s jurisdiction:
(a) Cases involving small claims under ch. 799.
(b) Cases involving a governmental entity or political subdivision seeking to enforce a statutory or regulatory restriction or prohibition.
(c) Unless the claim or dispute identified in this subsection is ancillary and incidental to a case assigned to the commercial court docket under sub. (4), cases involving a consumer contract or transaction; disputes between landlords and tenants; domestic relations claims; labor claims; receivership, insolvency, or liquidation cases, except as provided in sub. (4) (b) 8.; malpractice claims; personal injury claims; product liability claims; civil rights claims; tax disputes; cases seeking to compel arbitration or to affirm or disaffirm an arbitration award, except as provided in sub. (4) (b) 9.; construction claims, except as provided in sub. (4) (b) 10.; or environmental claims.]
Apparently, to directly address some of this concern, as quoted above, the most recent Supreme Court order continuing the Business Court experiment modifies the judicial selection language. That Order now requires the Chief Justice to consider recommendations of the chief judge of the trial court administrative district where each Business Court operates, before appointing a Business Court Judge: “The Chief Justice, after considering the recommendation of the chief judge of the Judicial Administrative District, shall select the circuit court judges in the counties and judicial administrative districts participating in the pilot plan who will be assigned to the Commercial Court docket.”
The proposed business court legislation maps this concept: “The chief justice of the supreme court, after considering the recommendation of the chief judge of the encompassing judicial administrative district, shall select the circuit court judges in the judicial administrative districts who will be assigned to the commercial court docket upon each judge’s agreement to so serve.”
Again, for those wanting to compare the details of the proposed legislation itself to the current Business Court rules and guidelines, the text of Assembly Bill 280 can be found here, and the Supreme Court’s original 2017 rule can be found here, the 2020 amendments here, and the July 2022 amendments here.
Posted by Lee Applebaum
