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Lee Applebaum’s published letter to the editors of Trial Magazine on Business Courts

Lee Applebaum's published letter to the editors of Trial Magazine on Business Courts

September 2006

The title of Gary Jackson’s article, Do Business Courts Really Mean Business? [June 2006, at 50], poses a question that may be worth discussing, but the assumptions he makes in answering it need scrutiny.

Mr. Jackson correctly assumes that one goal in creating business courts is to create a litigation environment that encourages businesses to stay in or locate to a region. This goal is achieved by establishing a group of judges who will become specialists in business disputes and developing a reasoned body of case law to guide the bench, bar, and litigants on legal issues—creating a more stable and predictable litigation process. But Mr. Jackson errs in implying that these courts operate under an inherent presumption to rule against consumers or employees in favor of businesses.

Rather, business courts make the rules of the game clearer so that the parties know that they are playing by a discernable set of rules through which they can assess risks. This is what is admired in the Delaware Court of Chancery: Respected judges have created a reasoned body of case law that can guide litigants; they don’t act as a rubber stamp for pro-business positions.

The assumption that business courts are driven by necessity or design to rule against consumers is proven wrong in practice. In Philadelphia, where I practice, the business court once heard consumer class actions, but these are now assigned to a special docket. Judge Mark Bernstein, who once was the class action judge, is now on Philadelphia’s business court. There is no reason to believe that if the business court still heard consumer class actions, he would rule any differently as a business court judge than as a class action judge.

A sampling from the Philadelphia court shows that business courts are not subject to an ineluctable mandate to rule against consumers. During some quick research, I located five Philadelphia cases that came down in favor of consumer plaintiffs, at least to some extent, seeking class certification. Also, the Rhode Island business court’s decision in Defontes v. Dell Computers Corp. provides a strong example of consumer plaintiffs succeeding against a corporate defendant on substantive legal issues (52 U.C.C. Rptr. Serv. 2d 795 (R.I. Super. Ct. Jan. 29, 2004).) And the Nassau County, New York, Commercial Division ruled in favor of the plaintiffs in In re Coordinated Title Insurance Cases, granting them class certification. (No. 9600/03 (N.Y., Nassau County Sup. Ct. Jan. 8, 2004).)

I would suggest that a broader examination would show that the likelihood of an unfavorable result in a consumer class action is the same in a court’s business program as in its general docket, or in its specialized class-action or complex-case docket. If a business court judge has been known to grant class certifications, it is doubtful the class action bar will be racing to remove those cases from his or her docket. The question is really whether consumer cases should be excluded from something called a “business court” simply because it sounds like it may not be impartial, whether or not that is empirically the case.

Lee Applebaum

Editors’ Note: Mr. Applebaum is the vice chair of the American Bar Association’s Subcommittee on Business Courts of the Section of Business Law Committee on Business and Corporate Litigation. An article he cowrote on business courts was quoted in Mr. Jackson’s article.

Posted with permission of TRIAL (September 2006) Copyright The Association of Trial Lawyers of America