Iowa Business Specialty Court Pilot Project

The Iowa Supreme Court has announced that it is beginning a three-year project for an Iowa Business Specialty Court for complex cases with $200,000 or more in dispute. To begin the project, three Iowa judges will be hired for the court based upon their educational background, judicial and trial experience with complex commercial cases and personal interest.

Participation in the pilot project will be voluntarily and all parties to the dispute must agree to opt into the business court pilot program. It is anticipated the court will begin accepting cases no later than May 1, 2013. The Court covers the following:

 

Only cases in which compensatory damages totaling $200,000 or more are alleged, or claims seeking primarily injunctive or declaratory relief, will be eligible for assignment to the business court docket. In addition, to be eligible a case must satisfy one or more of the following criteria:

      I.        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.

   II.        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.

   III.        Involve claims of breach of contract, fraud, misrepresentation, or statutory violations between businesses arising out of business transactions or relationships.

 IV.        Be a shareholder derivative or commercial class action.

  V.        Arise from commercial bank transactions.

 VI.        Relate to trade secrets, non-compete, non-solicitation, or confidentiality agreements.

 VII.        Involve commercial real property disputes other than residential landlord-tenant disputes and foreclosures.

VIII.        Be a trade secrets, antitrust, or securities-related action.

  IX.        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.

 

This is a step in the right direction in my opinion. I first starting writing about business courts here in Iowa in 2008. At that time, I asked whether Iowa needed a business court to compete. While I think it's a great step in the right direction, I'd like to see the threshold amount come down. Many small business owners express frustration because the costs of litigation are so high. Perhaps we can have a modified "business small claims" that would include cases in a minimum amount of $25,000 or so. That's real money for a lot of small businesses. But I am excited to see how the pilot program works and commend the Iowa Supreme Court for taking this initiative.