Focus on the Law: Tennessee Business Court

By Sharon Frankenberg,
Attorney at Law

Our Tennessee Supreme Court is charged with providing for the “orderly administration of justice” and, as such, it has decided to dedicate a court to the meet the specialized needs of business litigants.  The Davidson County Business Court Pilot Project, commonly referred to as the “Business Court,” was created by order of the court on March 16, 2015.  According to Supreme Court Order No. ADM2015-00467, twenty-six other states have created specialized business courts with the goal of “business retention, economic development and enhanced effectiveness of the judicial system.”  Business litigants with complex business and commercial disputes are expected to benefit from expedited resolution of their business cases by an experienced judge “who will provide proactive, hands-on case management with realistic, meaning deadlines and procedures adapted to the needs of each case for customized, quality outcomes.”

Davidson County Chancery Court Part III has been designated to serve as the Business Court for the state.  Chancellor Ellen Hobbs Lyle will preside over the Business Court in addition to her regular Davidson County Chancery Court docket.  She will be responsible for gathering data and information and identifying best practices for the development of potential future Tennessee Business Courts in various jurisdictions across the state.

What cases may be heard by the Business Court?  Civil cases filed on or after May 1, 2015 which allege at least $50,000 compensatory damages or claims seeking primarily injunctive or declaratory relief, and cases that satisfy one or more of the following: 1) relate to internal affairs of businesses, including the rights or obligations between or among shareholders, partners, and members or the liability or indemnity of officers, directors, managers, trustees or partners; 2)involve claims of breach of contract, fraud, misrepresentation, breach of fiduciary duty or statutory violations between businesses arising out f business transactions or relationships;  3) constitute a shareholder derivative or commercial class action; 4)involve commercial real property disputes other than residential landlord-tenant disputes and oreclosures; 5)involve business claims between or among two or more business entities or individuals as their business or investment activities relating to contracts, transactions, or relationships between or

among them; 6) arise from technology licensing agreements, including software and biotechnology licensing agreements, or any agreement involving the licensing of any intellectual property right, including patent rights; 7) constitute an action alleging violations of a noncompete, nonsolicitation, or confidentiality agreement, or an antitrust, trade secret, or securities-related action; or 8)commercial construction contract disputes and/or commercial construction defect claims.  The order specifically excludes several kinds of cases and cases involving certain parties, specifically, the State of Tennessee.

How do you get your eligible case into the Business Court?  For cases filed in Davidson County, within 60 days of the date of service of a complaint on a defendant, any party may file a Request for Designation with the Business Court.  If the Business Court Judge recommends accepting the case and the case meets the eligibility criteria, the Chief Justice may transfer the case to the Business Court.  All objections to the assignment of the case to the Business Court must be filed with the Chief Justice within 30 days of the order of transfer.   If the original case is filed outside of Davidson County on or after May 1, 2015, it may be transferred to the Business Court at the discretion of the Chief Justice if all parties file a motion to transfer the case and a Joint Consent and Waiver of Venue Form.

Contact an attorney if you need legal advice and assistance with your unique situation.  Sharon Frankenberg is an experienced attorney licensed in Tennessee since 1988.  She is a sole practitioner who handles foreclosures, evictions, probate, collections and general civil matters.  She represents Social Security disability claimants and represents creditors in bankruptcy proceedings. Her office is in Knoxville and she may be reached at (865)539-2100.

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