JURISDICTION OF BUSINESS COURT

Senate Bill 333 (passed by the Senate as S-1)

Sponsor:  Sen. Rick Jones

House Committee:  Judiciary

Senate Committee:  Judiciary

Complete to 5-23-17

SUMMARY:

Senate Bill 333 would amend the Revised Judicature Act by clarifying the definitions and jurisdictional requirements for the business courts.

In 2012, Public Act 333 (enrolled House Bill 5128) mandated that every circuit court with three or more circuit judges establish a business court, and allowed smaller courts to do so. These courts have jurisdiction over cases involving business or commercial disputes.

Section 8035

The bill would revise Section 8035, which regulates the business courts' jurisdiction. Currently, a business court has jurisdiction over business and commercial disputes in which the amount in controversy exceeds $25,000. The bill would remove the amount in controversy requirement and instead read, "disputes in which equitable or declaratory relief is sought or in which the matter otherwise meets circuit court jurisdictional requirements." The circuit court jurisdictional requirements are provided for in MCL 600.601 et seq.

Section 8031 definitions

Currently, a "business or commercial dispute" is defined in Section 8031(1)(c). SB 333 would amend the definition, with the changes from current law as indicated by italics:

·         An action in which all of the parties are business enterprises, unless the only claims asserted are expressly excluded under subsection (3).

·         An action in which one or more of the parties is a business enterprise and the other parties are its or their present or former owners, managers, shareholders, members of a limited liability company or a similar business organization, directors, officers, agents, employees, suppliers, guarantors of a commercial loan, or competitors, and the claims arise out of those relationships.

·         An action in which one of the parties is a nonprofit organization, and the claims arise out of that party's organizational structure, governance, or finances.

·         An action involving the sale, merger, purchase, combination, dissolution, liquidation, organizational structure, governance, or finances of a business enterprise.

SB 333 would move this last part of the definition to create a new Subsection (2)(a) so as to clarify the kinds of business or commercial disputes that can be heard by the business courts.

Excluded Disputes

Subsection (3) states which business or commercial disputes are expressly excluded from the business courts. The bill following exclusions would be amended, with the new language indicated by italics.

·       Proceedings to enforce judgements of any kind, including supplementary hearings, are excluded. 

·       Land contract, mortgage, construction, and condominium lien foreclosure matters involving residential property are excluded.

·       The law currently excludes motor vehicle insurance coverage disputes under the Insurance Code is excluded, except where two or more parties to the action are insurers. The bill would remove the reference to "two or more parties to the action are insurers," and instead exclude all motor vehicle insurance coverage actions.

·       The law excludes proceedings under the Probate Code, and the bill would revise the reference to the sections of the code to make it clear that the exception applies to the entire Probate Code (MCL 710.21 to 712b.41).

MCL 600.8031 et al.

FISCAL IMPACT:

The bill would have no fiscal impact on state or local government.

                                                                                        Legislative Analyst:   Emily S. Smith

                                                                                                Fiscal Analyst:   Robin Risko

■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.