2014 Nuts & Bolts Seminar Des Moines

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1 2014 Nuts & Bolts Seminar Des Moines Business Court 101 9:30 a.m.-10:00 a.m. Presented by Haley R. Van Loon BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA Phone: Fax: TUESDAY, OCTOBER 28, 2014

2 Iowa Business Specialty Court Pilot Program Haley R. Van Loon BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA Telephone: Facsimile:

3 Establishment On December 21, 2012, the Honorable Mark S. Cady, Chief Justice of the Iowa Supreme Court, issued a Supervisory Order and accompanying Memorandum of Operation establishing the Iowa Business Specialty Court pilot program (the Program ). In doing so, Iowa became the 24 th state to implement a business specialty court program.

4 Purpose The primary aims of the Iowa Business Specialty Court will be to move business or complex commercial litigation cases through the court system more expeditiously, with lower costs for litigations and the court system. Businesses and attorneys will benefit from the business court s published body of case law and providing guidance and promoting risk assessment for fair and costeffective resolution of such cases.

5 Purpose (cont.) Judges will benefit from the development of specialized judicial expertise to be shared with their judicial colleagues. All Iowans should benefit from the creation of a more attractive and cost-effective environment for the resolution of complex business disputes. Non-business case dockets will benefit from the removal of timeconsuming, complex business cases from the general docket. The court system as a whole should benefit from the business court s role as an incubator of innovative court practices that may be applied generally across the justice system.

6 Details The Program will operate for a three-year period from May 1, 2013 to May 1, The Program will consist of a statewide docket of cases that qualify for, and are voluntarily transferred to, the Program. Cases in the Program will be tried in the county in which they were filed. Qualifying cases will only be transferred to the Program where all parties involved consent. The Program will accept pre-existing and new cases.

7 Business Court Judges The Iowa Supreme Court, with assistance from the Iowa State Court Administrator, selected three Iowa District Court judges to handle cases assigned to the business court during the three-year pilot project. The judges are: Michael D. Huppert, Des Moines, District Court Judge for the Fifth Judicial District of Iowa. Annette J. Scieszinski, Albia, District Court Judge for the Eighth Judicial District of Iowa. John D. Telleen, LeClaire, District Court Judge for the Seventh Judicial District of Iowa.

8 Qualifications To qualify for the Program, a case must have an amount in controversy of at least $200, and meet one or more of the following criteria: (1) arise from technology licensing agreements, including software and biotechnology licensing agreements, or any agreement involving the licensing of any intellectual property right, including patent rights;

9 Qualifications (cont.) (2) relate to the internal affairs of businesses (i.e., corporations, limited liability companies, general partnerships, limited liability partnerships, sole proprietorships, professional associations, real estate investment trusts, and joint ventures), including the rights or obligations between or among business participants, or the liability or indemnity of business participants, officers, directors, managers, trustees, or partners, among themselves or to the business;

10 Qualifications (cont.) (3) involve claims of breach of contract, fraud, misrepresentation, or statutory violations between businesses arising out of business transactions or relationships; (4) be a shareholder derivative or commercial class action; (5) arise from commercial bank transactions;

11 Qualifications (cont.) (6) relate to trade secrets, non-compete, nonsolicitation, or confidentiality agreements; (7) involve commercial real property disputes other than residential landlord-tenant disputes and foreclosures; (8) be a trade secrets, antitrust or securities-related action; or (9) involve business tort claims between or among two or more business entities or individuals as to their business or investment activities relating to contracts, transactions, or relationships between or among them.

12 Application of Iowa Court Rules Existing Iowa Rules of Civil Procedure, rules of evidence, and other applicable Iowa Court Rules shall be applicable in Iowa Business Specialty Court proceedings. The parties, with the approval of the presiding business court judge, may, however, agree to such streamlined rules of pretrial procedure and discovery as will promote the fair, prompt, and efficient resolution of cases.

13 Evaluation of Pilot Program The State Court Administrator shall conduct, or cause to be conducted, a periodic review of the Iowa Business Specialty Court pilot program assessing whether the program is achieving its purpose and meeting its goals.

14 Eligibility Criteria in Current Business Court Cases Ten cases have been assigned to the business court pilot program since May The cases have met a variety of criteria for eligibility in the pilot program.

15 Eligibility Criteria in Current Business Court Cases (cont.) Must meet one or both threshold criteria: a. Damages over $200,000, or 8 b. Injunctive or declaratory relief sought 5 AND must meet one or more of these criteria: a. Technology licensing agreement 1 b. Internal affairs of a business 6 c. Business transactions e.g., breach of contract 7 d. Shareholder derivative or commercial class 1 action e. Commercial bank transactions 1 f. Trade secrets, non-compete, confidentiality 2 g. Commercial real property 0 h. Anti-trust or securities 0 i. Business tort claims 7 Number of cases

16 Current Status of Business Court Cases As of August 7, 2014, seven of the ten cases have settled. The court is waiting for final settlement and dismissal documents in two of those cases. Three business court cases remain active and are scheduled for trial during 2014 (one case) or the first two months of 2015 (two cases).

17 Judges Time on Business Court Cases Two important aspects of the pilot program evaluation are to determine the amount of judge time generally required to manage these types of complex business litigation and whether the program imposes an undue burden on any judicial districts where a business court judge resides.

18 Judicial Work Time on Business Court Cases Three judges spent 471 hours working on the 10 cases, which is approximately 24% of a full-time equivalent (FTE) judge. Judge Scieszinski spent 232 hours. Judge Huppert spent 136 hours. Judge Telleen spent 105 hours.

19 Business Court Judges Time Spent on Training, Administration, and Promotion of the Business Court Pilot Project The business court judges attended three meetings for planning and evaluating the pilot program. They also addressed meetings of state and local bar groups, educating attorneys about the business court. Judges Huppert and Telleen attended a business courts training program at the National Judicial College (NJC), and Judge Scienszinski attended an E-Discovery Summit at the NJC.

20 Business Court Judges Time Spent on Training, Administration, and Promotion of the Business Court Pilot Project (cont.) Finally, the judges attended at least one training session on the use of Court Call, a video conference system and service that is used in many courts throughout the U.S. The Court Call system will be installed and available for use by the three business court judges for their business court cases and their regular district court cases, as appropriate.

21 Need for a Video Conference System for Business Court Cases State court administration has agreed to pilot test services provided by Court Call, Inc., for the business specialty court. Court call will provide all of the equipment necessary for its coordination and initiation of conference calls in pending business court cases. There is no cost to the judicial branch, but the participating parties will pay a fee for each conference call.

22 Questions?

23 Website: Toll Free Phone Number: OFFICE LOCATIONS: 666 Grand Avenue, Suite 2000 Des Moines, Iowa Telephone: (515) Facsimile: (515) Franklin Place Pella, Iowa Telephone: (641) Facsimile: (641) DISCLAIMER: No oral or written statement made by BrownWinick attorneys should be interpreted by the recipient as suggesting a need to obtain legal counsel from BrownWinick or any other firm, nor as suggesting a need to take legal action. Do not attempt to solve individual problems upon the basis of general information provided by any BrownWinick attorney, as slight changes in fact situations may cause a material change in legal result.

24 Iowa Business Specialty Court Pilot Program Haley R. Van Loon BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA Telephone: Facsimile: Establishment On December 21, 2012, the Honorable Mark S. Cady, Chief Justice of the Iowa Supreme Court, issued a Supervisory Order and accompanying Memorandum of Operation establishing the Iowa Business Specialty Court pilot program (the Program ). In doing so, Iowa became the 24 th state to implement a business specialty court program. Purpose The primary aims of the Iowa Business Specialty Court will be to move business or complex commercial litigation cases through the court system more expeditiously, with lower costs for litigations and the court system. Businesses and attorneys will benefit from the business court s published body of case law and providing guidance and promoting risk assessment for fair and costeffective resolution of such cases. 1

25 Purpose (cont.) Judges will benefit from the development of specialized judicial expertise to be shared with their judicial colleagues. All Iowans should benefit from the creation of a more attractive and cost-effective environment for the resolution of complex business disputes. Non-business case dockets will benefit from the removal of timeconsuming, complex business cases from the general docket. The court system as a whole should benefit from the business court s role as an incubator of innovative court practices that may be applied generally across the justice system. Details The Program will operate for a three-year period from May 1, 2013 to May 1, The Program will consist of a statewide docket of cases that qualify for, and are voluntarily transferred to, the Program. Cases in the Program will be tried in the county in which they were filed. Qualifying cases will only be transferred to the Program where all parties involved consent. The Program will accept pre-existing and new cases. Business Court Judges The Iowa Supreme Court, with assistance from the Iowa State Court Administrator, selected three Iowa District Court judges to handle cases assigned to the business court during the three-year pilot project. The judges are: Michael D. Huppert, Des Moines, District Court Judge for the Fifth Judicial District of Iowa. Annette J. Scieszinski, Albia, District Court Judge for the Eighth Judicial District of Iowa. John D. Telleen, LeClaire, District Court Judge for the Seventh Judicial District of Iowa. 2

26 Qualifications To qualify for the Program, a case must have an amount in controversy of at least $200, and meet one or more of the following criteria: (1) arise from technology licensing agreements, including software and biotechnology licensing agreements, or any agreement involving the licensing of any intellectual property right, including patent rights; Qualifications (cont.) (2) relate to the internal affairs of businesses (i.e., corporations, limited liability companies, general partnerships, limited liability partnerships, sole proprietorships, professional associations, real estate investment trusts, and joint ventures), including the rights or obligations between or among business participants, or the liability or indemnity of business participants, officers, directors, managers, trustees, or partners, among themselves or to the business; Qualifications (cont.) (3) involve claims of breach of contract, fraud, misrepresentation, or statutory violations between businesses arising out of business transactions or relationships; (4) be a shareholder derivative or commercial class action; (5) arise from commercial bank transactions; 3

27 Qualifications (cont.) (6) relate to trade secrets, non-compete, nonsolicitation, or confidentiality agreements; (7) involve commercial real property disputes other than residential landlord-tenant disputes and foreclosures; (8) be a trade secrets, antitrust or securities-related action; or (9) involve business tort claims between or among two or more business entities or individuals as to their business or investment activities relating to contracts, transactions, or relationships between or among them. Application of Iowa Court Rules Existing Iowa Rules of Civil Procedure, rules of evidence, and other applicable Iowa Court Rules shall be applicable in Iowa Business Specialty Court proceedings. The parties, with the approval of the presiding business court judge, may, however, agree to such streamlined rules of pretrial procedure and discovery as will promote the fair, prompt, and efficient resolution of cases. Evaluation of Pilot Program The State Court Administrator shall conduct, or cause to be conducted, a periodic review of the Iowa Business Specialty Court pilot program assessing whether the program is achieving its purpose and meeting its goals. 4

28 Eligibility Criteria in Current Business Court Cases Ten cases have been assigned to the business court pilot program since May The cases have met a variety of criteria for eligibility in the pilot program. Eligibility Criteria in Current Business Court Cases (cont.) Must meet one or both threshold criteria: Number of cases a. Damages over $200,000, or 8 b. Injunctive or declaratory relief sought 5 AND must meet one or more of these criteria: a. Technology licensing agreement 1 b. Internal affairs of a business 6 c. Business transactions e.g., breach of contract 7 d. Shareholder derivative or commercial class 1 action e. Commercial bank transactions 1 f. Trade secrets, non-compete, confidentiality 2 g. Commercial real property 0 h. Anti-trust or securities 0 i. Business tort claims 7 Current Status of Business Court Cases As of August 7, 2014, seven of the ten cases have settled. The court is waiting for final settlement and dismissal documents in two of those cases. Three business court cases remain active and are scheduled for trial during 2014 (one case) or the first two months of 2015 (two cases). 5

29 Judges Time on Business Court Cases Two important aspects of the pilot program evaluation are to determine the amount of judge time generally required to manage these types of complex business litigation and whether the program imposes an undue burden on any judicial districts where a business court judge resides. Judicial Work Time on Business Court Cases Three judges spent 471 hours working on the 10 cases, which is approximately 24% of a full-time equivalent (FTE) judge. Judge Scieszinski spent 232 hours. Judge Huppert spent 136 hours. Judge Telleen spent 105 hours. Business Court Judges Time Spent on Training, Administration, and Promotion of the Business Court Pilot Project The business court judges attended three meetings for planning and evaluating the pilot program. They also addressed meetings of state and local bar groups, educating attorneys about the business court. Judges Huppert and Telleen attended a business courts training program at the National Judicial College (NJC), and Judge Scienszinski attended an E-Discovery Summit at the NJC. 6

30 Business Court Judges Time Spent on Training, Administration, and Promotion of the Business Court Pilot Project (cont.) Finally, the judges attended at least one training session on the use of Court Call, a video conference system and service that is used in many courts throughout the U.S. The Court Call system will be installed and available for use by the three business court judges for their business court cases and their regular district court cases, as appropriate. Need for a Video Conference System for Business Court Cases State court administration has agreed to pilot test services provided by Court Call, Inc., for the business specialty court. Court call will provide all of the equipment necessary for its coordination and initiation of conference calls in pending business court cases. There is no cost to the judicial branch, but the participating parties will pay a fee for each conference call. Questions? 7

31 Website: Toll Free Phone Number: OFFICE LOCATIONS: 666 Grand Avenue, Suite 2000 Des Moines, Iowa Telephone: (515) Facsimile: (515) Franklin Place Pella, Iowa Telephone: (641) Facsimile: (641) DISCLAIMER: No oral or written statement made by BrownWinick attorneys should be interpreted by the recipient as suggesting a need to obtain legal counsel from BrownWinick or any other firm, nor as suggesting a need to take legal action. Do not attempt to solve individual problems upon the basis of general information provided by any BrownWinick attorney, as slight changes in fact situations may cause a material change in legal result. 8

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