The New W.Va. Business Court: A Summary

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[author: David A. Bosak]

Introduction

On September 11, 2012, the West Virginia Supreme Court of Appeals announced the new Business Court Division (“BCD”). The BCD was created pursuant to W. Va. Code § 51-2-15,[1] and the new rules can be found in West Virginia Trial Court Rule 29.[2] The following is a discussion of the BCD and related topics.

Q.    What is the BCD?

A.  The BCD, based in Martinsburg, West Virginia,[3] is a new court system designed to handle complex and specialized commercial cases. The BCD will take commercial cases out of the normal circuit court docket,[4] give those cases to judges who are trained to handle commercial matters,[5] and then expedite the process so that these cases are resolved efficiently.[6]

The BCD is not

  • an appellate court,
  • a court of original jurisdiction, or
  • a court that will handle consumer complaints or other delineated claims (see list).
The West Virginia Supreme Court of Appeals (“WVSCA”) stated the purpose of the BCD is to ensure a fair and competent trial on complex commercial matters.[7] The goal is that companies looking to conduct business here will see that commercial disputes are given special treatment that is designed to resolve their problems quickly.[8]

Q.  What is the structure of the BCD?

A.  The BCD is a specialized court that exists within the current circuit court system; it is not a separate entity.[9] The BCD divides the state into seven regions, with cases arising in a particular region staying in that region.[10] BCD judges will keep their circuit court dockets, in addition to their new BCD dockets.[11] Each judge is appointed for a term of seven years (with no prohibition on successive terms).[12] However, there will only be three judges appointed to the BCD in 2012, with the other four being appointed thereafter on staggered terms.[13] The Chief Justice will appoint one of the judges the Chair of the Business Court Division, overseeing the administration of the BCD and reporting to the WVSCA.[14] The Chair will serve a term of three years (again, with no prohibition on successive terms).[15] The current judges, who are to receive specialized training,[16] are:

  • BCD Chair Judge Christopher C. Wilkes of the 23rd Circuit (Berkeley, Jefferson, and Morgan Counties)
  • Judge James J. Rowe of the 11th Circuit (Greenbrier and Pocahontas Counties)
  • Judge Donald H. Cookman of the 22nd Circuit (Hampshire, Hardy and Pendleton Counties).

Additionally, Judge James H. Young, Jr. of the 24th Circuit (Wayne County) will be joining the BCD on January 1, 2013.

Q.  How does a case get to the BCD?

A.  The BCD has no original jurisdiction.[17] To get a case in the BCD, any party or the judge can file a Motion to Refer.[18] The Motion to Refer must:

  • Identify the nature of the action(s) sought to be referred,
  • The basis for the request, and
  • If known, whether additional related actions are pending or may be filed in the future.[19]

Notably, parties may only file a Motion to Refer within the first three months of filing the action; however, a judge may file a Motion to Refer at any time (so long as the judge determines that the litigation qualifies for the BCD and can be resolved faster by the BCD).[20] Just like every other motion, the Motion to Refer must be served on all parties and the court. Once this is done, other parties have 20 days to file a “reply memorandum”[21] and oppose the motion if desired. Judges may file reply memoranda within 20 days after the parties’ 20 day period.[22]

Once the 20 day period expires, the clerk of the circuit court where the Motion to Refer was filed will transmit to the WVSCA clerk a copy of the Motion and all reply memoranda for the Chief Justice to review.[23] At this point, the Chief Justice will either

  • decide whether to grant or deny the Motion, or
  • if the Chief Justice cannot decide, he/she can direct the BCD to conduct a hearing and make recommendations concerning whether the BCD should take the case.[24]

In either case, the Chief Justice must promptly[25] enter an order either granting or denying the motion.[26] Once the Chief Justice has acted, the WVSCA clerk will send a copy of the order to:

  • The BCD Chair (currently Judge Wilkes);
  • The Central Office of the BCD; and
  • The circuit clerk from where the Motion originally came.[27]  

Q.  What types of cases will the BCD handle?

A.  The BCD will handle “business litigation.” To be considered “business litigation,” a case must meet two requirements:

  • “the principal claim or claims must involve matters of significance to the transactions, operations or governance between business entities; and
  • the dispute must present commercial or technology issues in which specialized treatment is likely to improve the expectation of a fair and reasonable resolution of the controversy because of the need for specialized knowledge or expertise in the subject matter or familiarity with some specific law or legal principles that may be applicable.”[28]
This definition gives the Chief Justice flexibility in deciding what cases will end up in the BCD. In a draft of the rules from September 30, 2011, however, specific types of cases were listed as BCD-worthy. Though that list was removed from the rules in favor of the more flexible rule above, these are the types of cases the BCD will probably handle:

[29]

  • The business relationship, including breaches of business contracts;
  • The sale or purchase of a business;
  • The sale or purchase of commercial real estate;
  • The sale or purchase of business products covered by the Uniform Commercial Code (“UCC”);
  • The terms of a commercial lease;
  • Commercial non-consumer debts;
  • The internal affairs of a business, such as dissolution of a business or shareholder actions;
  • Trade secrets and trademark infringement;
  • Non-compete agreements;
  • Intellectual property, securities, technology disputes;
  • Business torts;
  • Insurance coverage disputes in commercial insurance policies;
  • Professional malpractice claims in connection with the rendering of professional services to a business entity;
  • Anti-trust;
  • Injunctive and declaratory relief between business entities;
  • Liability of shareholders, directors, officers, partners, etc.;
  • Mergers, consolidations, sale of assets, issuance of debt, equity and like interests;
  • Shareholder derivative claims;
  • Unfair trade practices;
  • Commercial bank transactions;
  • Franchisees/Franchisors;
  • Internet, electronic commerce and biotechnology disputes;
  • Complex tax appeals;[30] and
  • Other cases involving business entities deemed by the Chief Justice to require transfer.

Q.  What types of cases are not appropriate for reference to the BCD?

A.  The following list of claims will not be referred to the BCD:

  • Consumer litigation, such as:

o   Products liability;

o   Personal injury;

o   Wrongful death;

o   Consumer class actions;

o   Actions arising under the West Virginia Consumer Credit Act; and

o   Consumer insurance coverage disputes;

  • Non-commercial insurance disputes related to bad faith, or disputes in which an individual may be covered under a commercial policy, but is involved in the dispute in an individual capacity;
  • Employee suits;
  • Consumer environmental actions;
  • Consumer malpractice actions;
  • Consumer and residential real estate, such as landlord-tenant disputes;
  • Domestic relations;
  • Criminal cases;
  • Eminent domain or condemnation; and
  • Administrative disputes with government organizations and regulatory agencies.[31]

If you are not a business, you are not likely to be successful in getting your case referred to the BCD.[32]

Q.  Can I move for a case to be referred to the BCD that was filed before the BCD opens?

A.  The BCD opens for business on October 10, 2012. If you have a case that was filed within three months of that date then you may move for the case to be referred to the BCD.[33] If your case has been filed for longer than three months, you may still move for it to be referred to the BCD if you (or you and opposing counsel) move the judge to file a Motion to Refer.[34] This is why the rule that judges can make Motions to Refer at any time is so important.

Q.  What happens once my case has been referred to the BCD?

A.  Once the Chief Justice grants a Motion to Refer, “the Division Chair shall, with the advice and consent of the [BCD], enter an order assigning a Presiding Judge.[35] The Division Chair may serve as a Presiding Judge.”[36] Rule 29.07 does not assign any judge to any Assignment Region; however, it does assign cases arising in a region to that region.[37]

If that Presiding Judge sits in a different county than the county where the case arose, the Division Chair[38] may “submit a request to the Chief Justice that the Presiding Judge be authorized, pursuant to Article VIII § 3 of the West Virginia Constitution, to preside over the action in any county that is within the same Business Litigation Assignment Region.”[39] If any party takes issue with the BCD’s attempt to move the case from one county to another, they may file a response stating their opposition within twenty days of the Division Chair submitting his request to the Chief Justice.[40] The Chief Justice will then promptly enter an Order permitting the BCD judge to move the case to another county or denying that request.[41]

The Presiding Judge will then determine if efficiency would benefit from consolidating cases found in different circuits. If so, then the Presiding Judge can do so with advice and consent of the BCD.[42]

Next, the Presiding Judge shall conduct a case management and scheduling conference within 30 days of being assigned.[43] Fifteen days after the conference, the Presiding Judge must issue a case management order that includes any deadlines or procedures deemed appropriate to fairly and efficiently manage and resolve the business litigation.[44] Any activities within the BCD may be held in any circuit court courtroom within the Assignment Region, “with due consideration for the convenience of the parties.”[45]

After the case management order is entered, the Presiding Judge will have sole authority to:

  • Supervise the jury selection process,
  • Disqualify a prospective juror from jury service, and
  • Excuse jurors from juror service in Business Litigation to which the Presiding Judge has been assigned.[46]

Finally, while the normal time standards set forth in Rule 16.05 apply, the presiding judge must make all reasonable efforts to conclude business litigation within ten months from the date the case management order was entered.[47] The rest of the time standards and rules set forth in the West Virginia Rules of Civil Procedure will apply.[48]

Q.  How will the BCD develop?

A.  The BCD is charged with “develop[ing] and implement[ing] effective case management and trial methodologies to fairly and expeditiously resolve Business Litigation.”[49] Therefore, the first few cases in front of each Presiding Judge will necessarily involve forming some of the methods of acting that the BCD will operate from. Spilman will continue to follow the development of the BCD and will update you as more information arises.

Conclusion

Spilman Thomas & Battle considers the BCD a positive change for the future of litigation in West Virginia. Your Spilman attorney will be pleased to discuss how the BCD may impact you and answer your questions about the benefits of pursuing your business litigation there. We look forward to assisting you in any way we can with the changes that the BCD will bring.

[1] The language of the statute is as follows:

(a) The West Virginia Legislature finds that, due to the complex nature of litigation involving highly technical commercial issues, there is a need for a separate and specialized court docket to be maintained in West Virginia's most populated circuit court districts with specific jurisdiction over actions involving such commercial issues and disputes between businesses.

(b) The West Virginia Supreme Court of Appeals is authorized to designate a business court division within the circuit court of any judicial district with a population in excess of sixty thousand according to the 2000 Federal Decennial Census.

(c) Upon the determination to designate business court divisions, the West Virginia Supreme Court of Appeals shall promulgate rules for the establishment and jurisdiction of the business court divisions within its circuit court system.

[2] http://www.courtswv.gov/legal-community/court-rules/trial-court/chapter-2.html

[3] Though the headquarters of the BCD is in the Eastern Panhandle, Judge Wilkes reassured everyone that the “video conference technology the [BCD] will use will make the state small in regard to hearings and conferences.” “State Business Court will be located in Martinsburg.” The State Journal, available at http://www.statejournal.com/story/19565468/state-business-court-will-be-located-in-martinsburg.

[4] Rule 29.04

[5] See Rule 29.04(a)(2) (describing business litigation as “commercial and/or technology issues in which specialized treatment is likely to improve the expectation of a fair and reasonable resolution of the controversy because of need for specialized knowledge or expertise in the subject matter); “WV business court approved” The State Journal, available at http://www.statejournal.com/story/19515660/wv-business-court-approved (quoting Justice Robin Davis as stating “these judges will have training in business litigation to cut down the length of time it takes to try these cases.”)

[6] See Rule 29.08(g) (“the Presiding Judge shall make all reasonable efforts to conclude Business Litigation within ten (10) months from the date the case management order was entered.”)

[7] “Supreme Court announces formation of Business Court Division.” Supreme Court of Appeals, State of West Virginia News, available at http://www.courtswv.gov/public-resources/press/releases/2012-releases/sept11_12.pdf

[8] See The State Journal, supra note 4 (quoting West Virginia House Speaker Rick Thompson: “I think a separate business docket focusing on resolving commercial litigation will make our state a much more welcoming environment for businesses.”)

[9] Rule 29.01.

[10] Rule 29.02 (see attached map for the region structure).

[11] See Supreme Court of Appeals, State of West Virginia News, supra, note 6.

[12] Rule 29.02

[13] Id.

[14] Id.

[15] Id.

[16] See The State Journal, supra, note 4. While Justice Davis has stated that these judges will receive training in commercial litigation, the source of that training is notably absent.

[17] Rule 29.06.

[18] Rule 29.06(a)(1).

[19] Id.

[20] Rule 29.06(a)(2).

[21] Rule 29.06(a)(3). Though the WVSCA uses the term “reply,” it appears that these memoranda are going to be responses to the initial Motion to Refer. Further, there does not appear to be any provision for replies. Id.

[22] Id. (“Any party shall have twenty (20) days after the motion is filed to file a reply memorandum stating its position and opposition, if any. Any affected judge may file a reply memorandum within twenty (20) days thereafter).

[23] Rule 29.06(c)(1).

[24] Id.

[25] There is no timeframe for the Chief Justice to decide whether to grant or deny the Motion to Refer.

[26] Rule 29.06(c)(3).

[27] Id.

[28] Rule 29.04.

[29] This list of cases comes from a Memorandum to the Defense Trial Counsel of West Virginia dated September 30, 2011. The memorandum included a draft of Rule 29 as it stood that day. That memorandum can be found at http://www.dtcwv.org/shared/content/pdfs/russell%20jessee%20report%2010-21-11.pdf.

[30] Rule 29.04(a)(3). Complex tax appeals are the only type of case expressly deemed acceptable in the BCD. However, the WVSCA never defines “complex tax appeal” in Rule 29, and no West Virginia case law defines that term.

[31] Rule 29.04(a)(3).

[32] As such, estate and trust cases, personal income tax cases, and similar cases will probably not succeed on a Motion to Refer.

[33] Rule 29.06(a)(2).

[34] Id.

[35] Rule 29 does not indicate that a particular judge will be assigned to a particular Assignment Region, or how the Presiding Judge will be chosen.

[36] Rule 29.07(a).

[37] Rule 29.07(b).

[38] The Division Chair is essentially the Chief Judge of the BCD, appointed once every three years. The first Division Chair will be Judge Wilkes. See supra, p. 3.

[39] Rule 29.07(b).  

[40] Id.

[41] Id.

[42] Rule 29.08(b).

[43] Rule 29.08(c).

[44] Rule 29.08(d).

[45] Rule 29.08(e).

[46] Rule 29.08(f).

[47] Rule 29.08(g).

[48] Rule 29.09.

[49] Rule 29.05(a).

For more information, please contact:

Published In: Civil Procedure Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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