Iowa Moving Toward Implementation of a Specialized Business Court

Kelley Drye Client Advisory

The second annual report on Iowa’s three-year Business Court Pilot Program reflects that the bench and bar thus far are highly satisfied with the experiment and strongly support making a specialized business court a permanent fixture in that state’s judicial system. In this most recent evaluation of the pilot program, Iowa appears to be on-track toward joining two dozen of its sister states that already have established specialized business courts to one degree or another.

In March 2012, the Iowa Civil Justice Reform Task Force recommended the implementation of the pilot program, which began accepting cases in May of the following year. The primary objective of the pilot program is to assess whether a specialized business court will help move complex business disputes through the Iowa court system more expeditiously and less expensively. Under the pilot program, a case may be assigned to the business court if all parties consent. In addition, to be eligible for assignment to the business court the dispute must involve a claim for at least $200,000 in compensatory damages, or a party must be seeking primarily injunctive or declaratory relief. Further, the case must fall within one of nine subject matter categories, ranging from technology licensing agreements and commercial bank transactions to trade secrets and business torts.

According to the report issued by the Iowa State Court Administrator, all attorneys who participated in the program in the past year and responded to an evaluation form reported that they strongly agreed that the business court should become a permanent component of the state’s court system. All respondents also reported that they strongly agreed that they would seek to have eligible cases assigned to the business court in the future.

The report also polled the three judges assigned to the program. Each judge gave the program high marks. Although they saw no need for any immediate changes in the procedural rules governing the business court, the judges did favor further study of the program’s existing voluntary opt-in” rule for assignment to the court. Judge Michael Huppert, for example, stated, I continue to wonder whether the opt-in process should continue to be voluntary, as it seems that one party or attorney may simply want to veto the decision based on unjustified grounds[.]” Judge Huppert suggested that the decision could be delegated to the chief judge in each district to provide some sort of screening process to identify those cases that should be in the program.”

Judge Annette Scieszinski concurred. For case opt-in,” she stated, I would like to see us progress to a system whereby a Chief Judge refers a complex case to this docket and then the parties are allowed reasonable opportunity to object to the referral[.]” She observed that the dynamic of parties (and often counsel) at the outset of litigation is not conducive to agreeing on an opt-in[.]”

Judge John Telleen agreed with his colleagues, stating that he was open to allowing for a less-than-voluntary’ process to be included in the business court program[.]”

The Iowa pilot program is scheduled to continue through the spring of 2016, when a final report and recommendation will be issued.

For more information on this advisory, please contact:

William S. Gyves
(212) 808-7640