Companies seek use of state's business court

MARTINSBURG – In the two years since West Virginia implemented its Business Court Division, an increasing number of business owners have relied on the special forum to quickly and more efficiently resolve their complex commercial litigation.

According to the 2013 Business Court Division Annual Report, the business court received 30 applications from business owners in 14 of West Virginia’s 55 counties in its first year. Of those applications, 14 cases were referred to the division.

However, as of Oct. 31, 2014, Business Court Division Executive Director Carol Miller says the business court has received a total of 60 applications from 22 of the state’s counties. Forty-one of those have been referred to the division.

Berkeley Circuit Judge and Business Court Division Chairman Christopher Wilkes contends that business owners reap numerous benefits from the new division. Primarily, he says, once a case is referred to the Business Court Division, it becomes a top priority.

“The sooner you can resolve a conflict for a business, No. 1, the cheaper the expenses they have in litigating, and No. 2, the faster they can get back to business again,” he said.

Wilkes explained that the West Virginia Supreme Court of Appeals initiated the idea of the Business Court Division after seeing a rise in specialty courts nationwide. At the time, he says, nearly two dozen states had opened their own business courts.

In 2010, the Supreme Court created a committee of judges to consider the concept and recommend whether it would be feasible and advantageous to the state and its business climate. Wilkes and his fellow committee members researched the other business courts, drafted a new rule to govern complex commercial litigation and asked for public comment.

“We came back and recognized that in states that had business courts, it generally promoted an environment that helped retain, or in fact, attract, businesses to those locales,” Wilkes said.

Supreme Court Chief Justice Robin Jean Davis agrees that it made sense to open a business court in West Virginia, a state with the busiest appellate court in the country. Officials took into account concerns about how slowly cases moved through the court system, as well as the significant expenses involved in extended litigation.

“Our court was very receptive and very responsive to the concerns and needs of the citizens, specifically the business community in this instance,” Davis said. “It was a win-win situation not only for the people in state of the West Virginia, but the businesses based upon the timeliness in which the cases are decided and the cost factors.”

In September 2012, the Supreme Court approved Trial Court Rule 29, which established the practice and procedures for the Business Court Division. The chief justice appointed six judges, who will each serve seven years with the division.

These judges are members of the American College of Business Court Judges and the Business Law Section of the American Bar Association, and take on the extra business cases for no additional pay.

Wilkes explained that in West Virginia, they opted for a statewide business court. Other states offer only localized business courts. For example, in Nevada, there are business courts in Clark and Washoe counties. In Arizona, Maricopa County houses that state’s single business court.

He said they also worked within the framework of the West Virginia constitution, and unlike states like North Carolina, did not create a separate court. Instead, business owners file applications with the chief justice, who then either refers those applications to the Business Court Division or denies them.

“We created a division of judges who go out and do these cases,” he said. “Article 3 of the constitution allows the chief justice to assign a judge in any circuit, in any county, where they feel there is a need or a benefit from the assignment of a judge.”

West Virginia keeps the business court cases in the county in which they were filed, unless the parties request that their cases be moved. Wilkes contends that this benefits business owners since the largest and most complex business court cases often arise in some of the smallest and most rural counties.

“A lot of the things we see are energy-related,” Wilkes said. “We might have a coal case that could be worth millions or tens of millions of dollars taking place in one of our more rural counties, but that’s where the coal operation is that’s one of the parties in the suit.

“We wanted to make sure that people realize we are not taking their cases out of the locale where the occurrences are that are subject to the action.”

Once a case is referred to the Business Court Division, two judges are assigned to that case. The first judge fills the role of the presiding judge, who rules on the motions and tries the case if necessary. The second judge acts as a resolution judge, who facilitates a mediation or arbitration if the parties opt for a quicker conclusion.

Wilkes recently attended a conference at which he spoke with general counsels from the nation’s largest corporations. He heard that their biggest concerns involved the cost of outside counsel and shared with them West Virginia’s unique use of a resolution judge in its business court cases.

“They feel in many states, and I guess California is the prime example, it can take five or six years before they can get a case to trial,” Wilkes said. “There is no mechanism to get them toward a quicker resolution.

“But in so many of these commercial disputes, the facts are already determined, they just need a judicial interpretation, a declaration of the rights and duties under a contract or under the application of a certain law.”

According to Miller, 12 of the cases referred to the Business Court Division since October 2012 have been resolved. She added that on average, those cases were only pending in the division for about 12 months.

Supreme Court Justice Menis Ketchum served as chief justice when West Virginia launched the Business Court Division. He contends that the court set out to provide specialized attention to businesses, and so far, it has accomplished that mission.

“The concept of having a Business Court Division has worked wonderfully well in resolving complex business disputes,” Ketchum said. “Since this was implemented two years ago, the statistics show you, for a small state like ours, how they’ve gotten these business disputes resolved.”

Davis agrees that the Business Court Division has been largely successful in its first two years of operation.

“The beauty of business court is that the process is supposed to be completed in eight to 12 months, and I think they are trying to keep that timeframe,” she said. “As a result of that, businesses are getting a quick resolution to their cases.”