November 26, 2007
Court in session | It's too early for a verdict, but supporters are optimistic about Maine's new business and consumer court
By Douglas Rooks
Clogged state court dockets are a fact of life for businesses in many states ˆ and Maine is no exception. Increasingly, Maine businesses are taking legal matters outside the state courts and into other venues, from federal courts to private arbitration.
But unlike many other states, Maine is doing something about the problem.
As established by legislation passed in 2006, the state's Business and Consumer Court docket began operations in July, and the first cases are now being heard and, in two instances, settled without a trial.
It's no secret that Maine's courts are not among the best-funded parts of state government ˆ by some measures, Maine ranks 50th in per capita appropriations for the judicial system, as chief justices regularly remind legislators in their annual State of the Judiciary addresses. So it was no small feat to win nearly $1 million in first-year funding from the Legislature for the new initiative. Maine Supreme Judicial Court Chief Justice Leigh Saufley, a strong supporter of the new system, weighed her words carefully when asked why the Legislature was willing to fund a business court, while her urgings for more money for court security, for instance, have gone largely unheeded. "The need is pretty dramatic," she said. "Once legislators understood the scope of the problem, I think they were convinced that the time had come" for a dedicated docket.
Saufley also credited business lobbyists as being "articulate advocates" for the cause. The effort attracted the support of then-House Speaker John Richardson, who sponsored the legislation, and later went to work in Gov. John Baldacci's administration as commissioner of the Department of Economic and Community Development. In his original testimony, Richardson noted that federal court contract case filings in Maine had increased 90% since 2000, while state filings decreased 47% since 1993. "Delays and complications in Maine's state court system are forcing Maine businesses to seek relief outside of our state system," he said in 2005.
But now that it's here, how is the new court doing?
In terms of sheer numbers, there's not a lot to go on yet. There have been about a dozen filings from around the state, and the two settlements so far, according to Andre Frechette, associate court clerk in West Bath. No cases have gone to trial yet, though several might by the end of the year.
That's the hope, at least. After all, although lawmakers did not budget the $1.2 million requested for the business docket, they did come up with enough money for the current fiscal year to fund two judges, court staff and a home for its proceedings at the West Bath District Court (which, ironically, was cited by Richardson as devoting only minimal time to the small claims cases that are the most common filings by businesses statewide).
The business court is not actually a separate court system, which would require funding well beyond even what was initially requested; rather, it is a docket similar to what would be prepared for each Superior Court, with the exception that it has its own additional rules of procedure, and its judges hear only business and consumer cases.
Chief Justice Saufley called on some of the most prominent judges in the state system to initiate the new court. Justice Thomas Humphrey, chief judge of the Superior Court, and Judge John Nivison, who was then chief judge of the District Courts (he's since been promoted to the Superior Court) both accepted appointments. "They were the first judges I asked, and fortunately they said yes," Saufley said.
She felt the two system chiefs had the best knowledge of the far-flung court system from which cases will come ˆ 16 superior courts from each county, and at least another two dozen district courts. Humphrey and Nivison "know the logistics," she said ˆ what courts have available courtroom time and space, and which clerks are knowledgeable about business issues.
"We're a little ahead of the middle of the pack" compared to other states, Saufley said. "Businesses were getting short shrift, and that's something that the governor and Legislature responded to."
Early success?
Peter Murray of Portland law firm Murray, Plumb & Murray, who's been a visiting professor at Harvard Law School for 15 years, said he's heard "nothing but positive things" from colleagues thus far. But Murray, who was a consultant to the project, said that the wheels of justice ˆ even at an accelerated pace ˆ still move more slowly than other events in life. He concurred with Saufley's estimate that it will take a year to 18 months, or until the end of 2008, to get an idea of how often the court will be used, and how satisfied lawyers and their clients will be with the results.
Murray said that many states have experimented with business courts, but that only about a third are still using them. New York and North Carolina have recently elevated business cases in their systems; Massachusetts has a model perhaps most similar to Maine's new docket. One long-standing dedicated state court is Delaware's Court of Chancery, which handles cases based on its cachet as a mecca for business incorporations. Delaware's situation is unique, however, and not transferable to a state like Maine, where businesses are predominantly small. Murray found it more significant that, since the Maine court was authorized, New Hampshire is taking a serious look at a similar project.
Murray also said Maine is unusual in that consumers will get equal attention and can file claims against businesses under the same system. Some state courts handle only particularly complex cases, but Maine's docket will consider filings from small-claims court on up. And Maine also preserves the right to a jury trial, rather than requiring plaintiffs to waive that right. As a result, "only time will tell how much the new system will really speed things up," said Murray.
Still, there is definite value to a docket whose sole purpose is resolution of commercial disputes, Murray said. "There will be a positive effect from a court giving real attention to these cases, rather than having them buried in the docket," he said.
While the costs of delays and legal uncertainties are clear enough for businesses, there have been other, less obvious costs, said J. Ted Glessner, the state court administrator. The lack of case law precedents makes it more difficult for businesses to gauge the likely outcome of court filings ˆ and thus to know what cases should be settled and which pushed to trial. "Providing an appropriate sense of predictability" is one of the most valuable services the new court can offer, Glessner said. "To what extent these cases come back to the state court" will probably determine whether the experiment will be continued or expanded, he added.
Advocates for the new court said it will save time, and thus money, for businesses and other plaintiffs seeking relief from the judicial system. Over time, they say, judges who develop expertise in business law will become an asset, too, since the personal exchanges and knowledge between judges and attorneys shape a system that, in becoming more predictable, is also more transparent. In a joint interview, the two business court judges, Thomas Humphrey and John Nivison, said these are reasonable expectations ˆ though they demurred about how much expertise they can be expected to provide in the near term. "I'd say that would have to be in the eye of the beholder," said Humphrey, who's based in Portland.
Saving time should be simpler, he said. "Just this morning I had a conference on a case whose court of origin" ˆ which happened to be a district court ˆ "had judges who were overwhelmed with other matters," he said.
Nivison, who's based in Augusta, said that not just scheduling, but also the "certainty of the schedule" should have a positive effect on speeding resolutions. Attorneys who know that continuances will not be as routine as they tend to be in civil court, and who are expected to be ready at the appointed date, will plan accordingly, he said. "As we set forth the schedule, it becomes more certain because it's not competing with other matters for courtroom time," said Nivison.
Humphrey agreed that changes in courtroom procedure can result in changes in behavior. "In many aspects, legal matters take as long as you think you have," he said. If attorneys "know their feet are to the fire," they're not only likely to be ready, but to press their clients to make decisions about their cases as well. "They often get focused enough to negotiate, and to settle, in a relatively short period of time," he said.
Traveling court
While both judges have experience in commercial cases, "We're going to be getting a lot of business issues," in the months ahead, Humphrey said. He said that attorneys will then "be able to anticipate our judicial styles, which will provide consistency that's valuable, whether they happen to like a particular ruling or not."
As plaintiffs and defendants observe the court in action, past rulings will become almost as important as "the style and substance" of a particular judge, Nivison said. In the discovery process, for instance, the parameters of proprietary information can be extremely important to both parties. "If there's a track record of how a judge will rule, the attorneys know which points to argue, and which ones they just need to accept," he said.
Those certainties will be enhanced by the court system's overall policy that a single judge "owns" the files on a particular case, Humphrey said. This policy has eliminated the kind of "judge shopping" that once existed, and, as applied to the business court, should increase predictability almost from the beginning, he said.
Since the business court will take cases from all parts of Maine, the question naturally arises of how the two judges will handle the geography of a 33,000-square-mile state. The early legal phases will be handled without face-to-face meetings, with initial proceedings taking place by videoconferencing. Pre-trial motions also can be handled electronically, though the final pre-trial hearing, establishing witness lists and identifying exhibits, will take place in person "at a reasonably convenient location" for the judge and attorneys, Humphrey said. Trials will continue to take place in courtrooms, but the location may vary.
While the initial charge from the state Supreme Court said that trials must take place in the court of origin, that ruling was later relaxed so that the parties can request another site, or the judges can suggest an alternative when it works better for witnesses and others involved in the case. "It turns out that it's sometimes much more important to keep to the schedule, to have the decision in May, for instance, than it is to stay with a particular courtroom," Nivison said.
Eventually, the judges expect to see some of the complex business cases that are the exclusive purview of some other state business courts. "We're already seeing cases involving out-of-state attorneys and clients that have been unusual in Maine," Humphrey said. "We tend to know the state bar fairly well, and this will provide a different flavor." For now, though, "It's way too early" to tell whether two judges will be enough, or too much, to handle the caseload that will develop in the business court, he said.
Chief Justice Saufley said that she senses that some attorneys are taking a wait-and-see attitude toward the new court, examining rulings before deciding to file their cases there. The workload should also increase when the court can accept electronic filing of basic court documents, "hopefully within the year," although she doesn't have a firm prediction. She does see the business court as a leader in using videoconferencing, something she said "can save a lot of time and money for everyone."
Getting commercial cases resolved more quickly can help with the rest of the court docket, too, as cases that are unfamiliar to other judges are directed toward a forum where they can be resolved more quickly, Saufley said. And while "the jury is still out" on the new court, Saufley said she believes it can make Maine "a whole lot friendlier to business, and to consumers, too."
But unlike many other states, Maine is doing something about the problem.
As established by legislation passed in 2006, the state's Business and Consumer Court docket began operations in July, and the first cases are now being heard and, in two instances, settled without a trial.
It's no secret that Maine's courts are not among the best-funded parts of state government ˆ by some measures, Maine ranks 50th in per capita appropriations for the judicial system, as chief justices regularly remind legislators in their annual State of the Judiciary addresses. So it was no small feat to win nearly $1 million in first-year funding from the Legislature for the new initiative. Maine Supreme Judicial Court Chief Justice Leigh Saufley, a strong supporter of the new system, weighed her words carefully when asked why the Legislature was willing to fund a business court, while her urgings for more money for court security, for instance, have gone largely unheeded. "The need is pretty dramatic," she said. "Once legislators understood the scope of the problem, I think they were convinced that the time had come" for a dedicated docket.
Saufley also credited business lobbyists as being "articulate advocates" for the cause. The effort attracted the support of then-House Speaker John Richardson, who sponsored the legislation, and later went to work in Gov. John Baldacci's administration as commissioner of the Department of Economic and Community Development. In his original testimony, Richardson noted that federal court contract case filings in Maine had increased 90% since 2000, while state filings decreased 47% since 1993. "Delays and complications in Maine's state court system are forcing Maine businesses to seek relief outside of our state system," he said in 2005.
But now that it's here, how is the new court doing?
In terms of sheer numbers, there's not a lot to go on yet. There have been about a dozen filings from around the state, and the two settlements so far, according to Andre Frechette, associate court clerk in West Bath. No cases have gone to trial yet, though several might by the end of the year.
That's the hope, at least. After all, although lawmakers did not budget the $1.2 million requested for the business docket, they did come up with enough money for the current fiscal year to fund two judges, court staff and a home for its proceedings at the West Bath District Court (which, ironically, was cited by Richardson as devoting only minimal time to the small claims cases that are the most common filings by businesses statewide).
The business court is not actually a separate court system, which would require funding well beyond even what was initially requested; rather, it is a docket similar to what would be prepared for each Superior Court, with the exception that it has its own additional rules of procedure, and its judges hear only business and consumer cases.
Chief Justice Saufley called on some of the most prominent judges in the state system to initiate the new court. Justice Thomas Humphrey, chief judge of the Superior Court, and Judge John Nivison, who was then chief judge of the District Courts (he's since been promoted to the Superior Court) both accepted appointments. "They were the first judges I asked, and fortunately they said yes," Saufley said.
She felt the two system chiefs had the best knowledge of the far-flung court system from which cases will come ˆ 16 superior courts from each county, and at least another two dozen district courts. Humphrey and Nivison "know the logistics," she said ˆ what courts have available courtroom time and space, and which clerks are knowledgeable about business issues.
"We're a little ahead of the middle of the pack" compared to other states, Saufley said. "Businesses were getting short shrift, and that's something that the governor and Legislature responded to."
Early success?
Peter Murray of Portland law firm Murray, Plumb & Murray, who's been a visiting professor at Harvard Law School for 15 years, said he's heard "nothing but positive things" from colleagues thus far. But Murray, who was a consultant to the project, said that the wheels of justice ˆ even at an accelerated pace ˆ still move more slowly than other events in life. He concurred with Saufley's estimate that it will take a year to 18 months, or until the end of 2008, to get an idea of how often the court will be used, and how satisfied lawyers and their clients will be with the results.
Murray said that many states have experimented with business courts, but that only about a third are still using them. New York and North Carolina have recently elevated business cases in their systems; Massachusetts has a model perhaps most similar to Maine's new docket. One long-standing dedicated state court is Delaware's Court of Chancery, which handles cases based on its cachet as a mecca for business incorporations. Delaware's situation is unique, however, and not transferable to a state like Maine, where businesses are predominantly small. Murray found it more significant that, since the Maine court was authorized, New Hampshire is taking a serious look at a similar project.
Murray also said Maine is unusual in that consumers will get equal attention and can file claims against businesses under the same system. Some state courts handle only particularly complex cases, but Maine's docket will consider filings from small-claims court on up. And Maine also preserves the right to a jury trial, rather than requiring plaintiffs to waive that right. As a result, "only time will tell how much the new system will really speed things up," said Murray.
Still, there is definite value to a docket whose sole purpose is resolution of commercial disputes, Murray said. "There will be a positive effect from a court giving real attention to these cases, rather than having them buried in the docket," he said.
While the costs of delays and legal uncertainties are clear enough for businesses, there have been other, less obvious costs, said J. Ted Glessner, the state court administrator. The lack of case law precedents makes it more difficult for businesses to gauge the likely outcome of court filings ˆ and thus to know what cases should be settled and which pushed to trial. "Providing an appropriate sense of predictability" is one of the most valuable services the new court can offer, Glessner said. "To what extent these cases come back to the state court" will probably determine whether the experiment will be continued or expanded, he added.
Advocates for the new court said it will save time, and thus money, for businesses and other plaintiffs seeking relief from the judicial system. Over time, they say, judges who develop expertise in business law will become an asset, too, since the personal exchanges and knowledge between judges and attorneys shape a system that, in becoming more predictable, is also more transparent. In a joint interview, the two business court judges, Thomas Humphrey and John Nivison, said these are reasonable expectations ˆ though they demurred about how much expertise they can be expected to provide in the near term. "I'd say that would have to be in the eye of the beholder," said Humphrey, who's based in Portland.
Saving time should be simpler, he said. "Just this morning I had a conference on a case whose court of origin" ˆ which happened to be a district court ˆ "had judges who were overwhelmed with other matters," he said.
Nivison, who's based in Augusta, said that not just scheduling, but also the "certainty of the schedule" should have a positive effect on speeding resolutions. Attorneys who know that continuances will not be as routine as they tend to be in civil court, and who are expected to be ready at the appointed date, will plan accordingly, he said. "As we set forth the schedule, it becomes more certain because it's not competing with other matters for courtroom time," said Nivison.
Humphrey agreed that changes in courtroom procedure can result in changes in behavior. "In many aspects, legal matters take as long as you think you have," he said. If attorneys "know their feet are to the fire," they're not only likely to be ready, but to press their clients to make decisions about their cases as well. "They often get focused enough to negotiate, and to settle, in a relatively short period of time," he said.
Traveling court
While both judges have experience in commercial cases, "We're going to be getting a lot of business issues," in the months ahead, Humphrey said. He said that attorneys will then "be able to anticipate our judicial styles, which will provide consistency that's valuable, whether they happen to like a particular ruling or not."
As plaintiffs and defendants observe the court in action, past rulings will become almost as important as "the style and substance" of a particular judge, Nivison said. In the discovery process, for instance, the parameters of proprietary information can be extremely important to both parties. "If there's a track record of how a judge will rule, the attorneys know which points to argue, and which ones they just need to accept," he said.
Those certainties will be enhanced by the court system's overall policy that a single judge "owns" the files on a particular case, Humphrey said. This policy has eliminated the kind of "judge shopping" that once existed, and, as applied to the business court, should increase predictability almost from the beginning, he said.
Since the business court will take cases from all parts of Maine, the question naturally arises of how the two judges will handle the geography of a 33,000-square-mile state. The early legal phases will be handled without face-to-face meetings, with initial proceedings taking place by videoconferencing. Pre-trial motions also can be handled electronically, though the final pre-trial hearing, establishing witness lists and identifying exhibits, will take place in person "at a reasonably convenient location" for the judge and attorneys, Humphrey said. Trials will continue to take place in courtrooms, but the location may vary.
While the initial charge from the state Supreme Court said that trials must take place in the court of origin, that ruling was later relaxed so that the parties can request another site, or the judges can suggest an alternative when it works better for witnesses and others involved in the case. "It turns out that it's sometimes much more important to keep to the schedule, to have the decision in May, for instance, than it is to stay with a particular courtroom," Nivison said.
Eventually, the judges expect to see some of the complex business cases that are the exclusive purview of some other state business courts. "We're already seeing cases involving out-of-state attorneys and clients that have been unusual in Maine," Humphrey said. "We tend to know the state bar fairly well, and this will provide a different flavor." For now, though, "It's way too early" to tell whether two judges will be enough, or too much, to handle the caseload that will develop in the business court, he said.
Chief Justice Saufley said that she senses that some attorneys are taking a wait-and-see attitude toward the new court, examining rulings before deciding to file their cases there. The workload should also increase when the court can accept electronic filing of basic court documents, "hopefully within the year," although she doesn't have a firm prediction. She does see the business court as a leader in using videoconferencing, something she said "can save a lot of time and money for everyone."
Getting commercial cases resolved more quickly can help with the rest of the court docket, too, as cases that are unfamiliar to other judges are directed toward a forum where they can be resolved more quickly, Saufley said. And while "the jury is still out" on the new court, Saufley said she believes it can make Maine "a whole lot friendlier to business, and to consumers, too."
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