Tennessee’s Business Court is Back in Business
Many of our clients will be happy to know that Tennessee’s Business Court is back in business as of May 1, 2017, after the Tennessee Supreme Court lifted an embargo on the filing of new cases. Clients with sophisticated business disputes and intellectual property disputes based in Tennessee can once again avail themselves of a forum whose primary function is dedicated to resolving complex cases.
Officially, the Tennessee Business Court is just a “Pilot Project,” but most attorneys and clients hope it is here to stay. (Tennessee is one of 28 states with a dedicated Business Court). Phase 1 was established by the Tennessee Supreme Court in March 2015 and was set to expire in December 2017, but it was so popular that an embargo had to be imposed earlier than that to give the presiding judge, Chancellor Ellen Hobbs Lyle, some relief. Over 90 business cases were transferred to the Business Court prior to the embargo.
Phase 1 of the Business Court was celebrated by attorneys (and judges) across the state as a huge success. It unclogged the dockets of other courts in the state. And while many courts in Tennessee function at a high caliber, Phase 1 of the Business Court gave clients access to a tribunal where judicial involvement was specifically tailored to the demands of each case, and where the presiding judge operated at the highest levels of competence, flexibility and efficiency.
Although Phase 2 of the Business Court is still in its infancy, here are five takeaways from what we know already:
1. To qualify now, a party must seek at least $250,000 in damages, compared with $50,000 under Phase 1. (If the case seeks primarily injunctive or declaratory relief, it may still qualify even if it doesn’t seek damages of that amount.)
2. If your case involves any of the following claims, it no longer automatically qualifies for transfer unless your lawyer can persuade Chancellor Lyle and the Chief Justice how those claims present “sufficiently complex commercial issues that would have significant implications for the larger business community”: breach of contract; fraud; misrepresentation; shareholder derivative actions; real property disputes; claims between business entities/owners as to their business or relationship; construction disputes; and violations of non-compete, non-solicitation or confidentiality agreements.
3. Unlike previously, cases involving trademark law now are explicitly included as qualifying for transfer, assuming the other criteria are met.
4. Where you previously had 60 days from service of the complaint to seek a transfer, you now have only 30 days.
5. Finally, as our firm has learned through experience, even if your case otherwise qualifies for transfer to the Business Court, the Supreme Court will refuse to transfer it if the complaint was filed prior to May 1, 2017. This means, unfortunately, that some clients will miss out on the opportunity for specialized resolution of their dispute in Tennessee’s Business Court.
Bonus! To read the Court’s “Guide to the Business Court” or examine past Business Court decisions, click here. If you believe your case could use a proactive approach from a hands-on judge who sets meaningful deadlines and who adapts procedures to meet the needs of your case for a customized outcome, we would be happy to discuss your case with you and see if it might qualify.