Hb 239 - Business Courts

• Jurisdiction: Georgia,United States
• Citation: Vol. 36 No. 1
• Publication year: 2019
• topic: Business of Law,Constitutional Law,Civil Procedure

HB 239 - Business Courts

Laura A. Shoop

Georgia State University College of Law, lshoop1@student.gsu.edu

L. Whitney Woodward

Georgia State University College of Law, lwoodward2@student.gsu.edu

COURTS

Courts: Amend Title 15 of the Official Code of Georgia Annotated, Relating to Courts, so as to Establish the Georgia State-Wide Business Court Pursuant to the Constitution of this State; Provide for Terms of Court and where such Court Shall Sit; Provide for Location of Proceedings; Provide for Subject Matter Jurisdiction; Provide for Filings, Pleadings, and Fees; Provide for a Judge of the Georgia State-Wide Business Court; Establish Qualifications; Provide for Appointment and Approval of such Judge; Provide for Terms of Office; Provide for Salary and Other Compensation; Authorize Rule Making; Provide for the Appointment of a Clerk of the Georgia State-Wide Business Court; Provide for an Interim Clerk of the Georgia State-Wide Business Court; Provide for Law Assistants and Other Employees; Amend Article 4 of Chapter 7 of Title 45 of the Official Code of Georgia Annotated, Relating to General Provisions Regarding Salaries and Fees, so as to Designate a Salary for the Judge of the Georgia State-Wide Business Court; Amend Title 5 of the Official Code of Georgia Annotated, Relating to Appeal and Error, so as to Make Conforming Changes Regarding Appeals; Amend Chapter 4 of Title 9 and Title 23 of the Official Code of Georgia Annotated, Relating to Declaratory Judgments and Equity, respectively, so as to Make Conforming Changes Regarding Equity; Amend Article 2 of Chapter 11 of Title 9 of the Official Code of Georgia Annotated, Relating to Commencement of Action and Service, so as to Revise Provisions Regarding the Electronic Service of Pleadings; Amend Article 6 of Chapter 13 of Title 24 of the Official Code of Georgia Annotated, Relating to Depositions to Preserve Testimony in Criminal Proceedings, so as to Revise the Manner by which Depositions Are Paid When Taken at the Instance of the State; Clarify How Depositions Shall Be Taken and Filed; Amend Title 15 of the Official Code of Georgia Annotated, Relating to Courts, so as to Exclude Certain Types of Filings from the Electronic Filing Requirements of Superior and State Courts; Provide that Fees for Electronic Filings Shall Not Be Charged for Pleadings or Documents Filed by Certain Entities and Persons Acting in Certain

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Capacities or for the Filing of Leaves of Absence and Conflict Notices; Provide that Certain Postjudgment Proceedings Shall Be Given a New Case Number for Improved Record Keeping; Revise a Definition; Provide for Related Matters; Provide for an Effective Date; Repeal Conflicting Laws; and for Other Purposes

Code Sections: O.C.G.A. §§ 15-5A-1, -16 (new); 45-7-4 (amended); 5-5-1 (amended); 5-6-33 (amended); 5-6-34 (amended); 5-6-41 (amended); 9-4-2 (amended); 9-4-5 (amended); 9-4-10 (amended); 23-1-1 (amended); 23-4-3 (amended); 23-4-33 (amended); 23-4-37 (amended); 9-11-5 (amended); 24-13-132 (amended); 24-13-133 (amended); 15-6-11 (amended); 15-6-61 (amended); 15-6-77 (amended); 15-7-5 (amended)

Bill Number: HB 239

Act Number: 271

Georgia Laws: 2019 Ga. Laws 845

Summary: Georgia voters passed a constitutional amendment in November 2018, endorsing the establishment of a statewide business court. the Act serves as the enabling legislation for the statewide business court's creation and implementation. Among other provisions, the Act provides the court's location alternatives, jurisdictional limitations, filing fee, amount in controversy requirements, filing and transfer procedures, consent and objection rights for parties with cases and controversies slated for adjudication in state-wide business court, and minimum experience requirements for the presiding judge.

Effective Date: May 7, 2019

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History

The State of Georgia takes great pride in being the top-ranked state in which to do business, earning that honor for the sixth consecutive year in 2018.¹ During his tenure as Georgia's Governor, Nathan Deal (R) focused his priorities on not only continuing to make Georgia attractive for businesses but also pushing for state improvements to further support Georgia's homegrown businesses and businesses considering a move to Georgia.² Businesses contemplating a move to Georgia consider a myriad of factors, including the state's judicial climate.³ More specifically, when Georgia found itself losing to neighboring states like North Carolina in company site selection processes, economic developers often cited the draw of North Carolina's business court as being one of the deciding factors.⁴

To further his economic development priority, among other priorities, Governor Deal signed an Executive Order in March 2017, "establishing the Court Reform Council to 'review current practices and procedures within the judicial court system and the administrative law hearing system and make recommendations to improve efficiencies and achieve best practices for the administration of justice.'"⁵ The Court Reform Council created three subcommittees for its work, one being the Statewide Business Court subcommittee.⁶ This subcommittee delivered on its purpose by evaluating whether a specialized state-wide court to handle complex business litigation would be useful, efficient, and effective.⁷

Specialized courts to adjudicate complex litigation are not new concepts in the United States, with the Delaware Court of Chancery, created in 1792, being the first of this kind.⁸ While some other states

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followed Delaware's lead, Georgia pursued a similar lead but at the local level with the creation of the Metro Atlanta Business Case Division—a division of the Fulton County Superior Court—and similar divisions in other counties like Gwinnett.⁹ These business divisions in local superior or state courts have proven effective and efficient, resolving complex business cases 50%-60% faster than similar cases on the court's regular, nonspecialized docket.¹⁰ Even though local circuits are allowed to create these divisional, specialized courts, not all circuits can or will support such a creation.¹¹ These divisional courts need funds to operate and sufficiently full case dockets to warrant the additional spend.¹² Some counties simply do not have the size or amount of business activity necessary to make the case for a specialized court in their particular circuit.¹³ Through extensive study, Governor Deal's Court Reform Council identified specific advantages found with specialized business courts:

(1) Certainty and predictability of outcome—judicial expertise gives business interests the security that their complex business issues will be heard in front of a judge who has substantial familiarity with complex business issues like fiduciary duties, disclosure issues, and duty of care.
(2) Because of the specialized nature of the courts and the lawyers who practice before it, complex issues can be expedited.
(3) Specialization, generally, leads to consistent case management and lower costs, with more efficient outcomes.¹⁴

Completing its work in November 2017, the Court Reform Council recommended "the constitutional creation of a statewide business court" with limited subject matter jurisdiction for complex business cases.¹⁵

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When Georgians traveled to the polls on November 6, 2018, they were asked to vote on Georgia Amendment Two, the Business Court Amendment.¹⁶

Shall the Constitution of Georgia be amended so as to create a state-wide business court, authorize superior court business court divisions, and allow for the appointment process for state-wide business court judges in order to lower costs, improve the efficiency of all courts, and promote predictability of judicial outcomes in certain complex business disputes for the benefit of all citizens of this state?¹⁷

Georgia Amendment Two received overwhelming support with 69% of Georgia voters voting "yes" to the creation of a state-wide business court.¹⁸ After this constitutional amendment passed, Georgia's legislators became responsible for drafting and passing enabling legislation to bring this state-wide business court to life.¹⁹ Hence, the birth of House Bill (HB) 239 as this legislation.

Bill Tracking of HB 239

Consideration and Passage by the House

Representatives Chuck Efstration (R-104th) and Barry Fleming (R-121st) sponsored HB 239 in the House.²⁰ The House read the bill for the first time on February 12, 2019, referring the bill to the House Judiciary Committee, and then read the bill for the second time on February 13, 2019.²¹ On February 27, 2019, the House Judiciary Committee favorably reported the bill by Committee substitute.²² The

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Committee substitute altered a significant amount of the bill's text but only amended four material components.²³

First, the Committee added an explicit enabling provision allowing superior and state courts to continue both operating current and creating new local business court divisions, if so desired.²⁴ As initially introduced, the bill did not preclude superior or state courts from creating local business courts but did remain silent on the topic.²⁵ With the success of local business courts like those in both Fulton and Gwinnett counties, the Committee had no desire or intention to intrude on those courts' current jurisdiction nor prevent future counties with sufficient case volumes from creating local business courts.²⁶

Second, the Committee added specificity around the one-party request for a jury trial in light of the business court's bench trial default provision.²⁷ Although the bill, as introduced, was not intended to remove the right to trial by jury as protected by Georgia law, the initial bill's language only allowed for jury trial where such trial was required.²⁸ The Committee amended this section to instead allow any party to request a jury trial and asserted that such jury trial would receive the business court judge's services—presiding over...