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Iowa Business Specialty Court

To improve the overall efficiency and responsiveness of the courts, the Iowa Supreme Court in December 2012 created the Iowa Business Specialty Court Pilot Project. The supreme court’s Memorandum of Operation (PDF) outlines the pilot program and continuing operation. The genesis for this effort to leverage judicial expertise and gain court efficiencies throughout the judicial branch came from a key recommendation of the 2012 Report of the Iowa Civil Justice Reform Task Force (PDF). The supreme court has determined that the Iowa Business Specialty Court will remain an ongoing part of the Iowa court system.

Why a Business Court in Iowa?

In the 2013 State of the Judiciary address, Iowa Supreme Court Chief Justice Mark Cady announced that the justices of the supreme court are committed to making Iowa’s system of justice the best, most advanced, and most responsive court system in the nation. The Iowa Business Specialty Court is one step towards meeting this goal. 

The primary aim of the Iowa Business Specialty Court is to move business or complex commercial litigation cases through the court system more expeditiously, with lower costs for litigants and the court system. Businesses and attorneys will benefit from the business court’s published body of case law providing guidance and promoting risk assessment for fair and cost-effective resolution of such cases. Judges will benefit from the development of specialized judicial expertise to be shared with their judicial colleagues. All Iowans should benefit from the creation of a more attractive and cost-effective environment for the resolution of complex business disputes. Non-business case dockets will benefit from the removal of time-consuming, complex business cases from the general docket. The court system as a whole should benefit from the business court’s role as an incubator of innovative court practices that may be applied generally across the justice system. 

How do I know if my case is eligible for the business court?

Section E of the Memorandum of Operation sets forth the criteria cases must meet for assignment to the business court. Cases must involve claim(s) for compensatory damages totaling $200,000 or more or involve claim(s) seeking primarily injunctive or declaratory relief. In addition, cases must also satisfy one or more of the following criteria:

  1. 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.
  2. Relate to the internal affairs of businesses (i.e., corporations, limited liability companies, general partnerships, limited liability partnerships, sole proprietorships, professional associations, real estate investment trusts, and joint ventures), including the rights or obligations between or among business participants, or the liability or indemnity of business participants, officers, directors, managers, trustees, or partners, among themselves or to the business.
  3. Involve claims of breach of contract, fraud, misrepresentation, or statutory violations between businesses arising out of business transactions or relationships.
  4. Be a shareholder derivative or commercial class action.
  5. Arise from commercial bank transactions.
  6. Relate to trade secrets, non-compete, non-solicitation, or confidentiality agreements.
  7. Involve commercial real property disputes other than residential landlord-tenant disputes and foreclosures.
  8. Be a trade secrets, antitrust, or securities-related action.
  9. Involve business tort claims between or among two or more business entities or individuals as to their business or investment activities relating to contracts, transactions, or relationships between or among them.

Are there extra filing fees for business court cases?

There are no extra filing fees for cases in the Iowa Business Specialty Court.

How do I get a case into the business court?

The business court includes a voluntary opt-in format in which all parties agree to bring their legal dispute to the Iowa Business Specialty Court docket. Parties may transfer a case to the business court docket by filing a Joint Consent for Case Assignment to the Business Court with the State Court Administrator, acknowledging that the case meets the criteria set forth in section E of the Memorandum of Operation.

What is the Joint Consent Form?

The Joint Consent for Case Assignment to the Business Court Project form (PDF) is used for parties to request and consent to assignment of their case to the Iowa Business Specialty Court. The parties must certify that their case involves claim(s) for compensatory damages totaling $200,000 or more or involves claim(s) seeking primarily injunctive or declaratory relief, and that their case also satisfies one or more of the criteria set forth in section E of the Memorandum of Operation. The form is used to identify the status of the case and the names and contact information for the attorneys of all parties. An attorney for one of the parties submits the form to the State Court Administrator and certifies that all parties have agreed to the Joint Consent for assignment of their case to the business court docket.

What happens after filing a Joint Consent form?

The Joint Consent form is submitted to the State Court Administrator for approval of the case for the business court docket. Upon approval, the State Court Administrator will randomly assign one of the business court judges to the case. Soon after receiving the case assignment, the business court judge will contact all of the attorneys to arrange a pretrial conference.

Who are the judges and how were they selected?

There are four Iowa District Court judges serving as business court judges. The judges are:

  • Michael D. Huppert, Des Moines, District Court Judge for the Fifth Judicial District of Iowa.
  • Lawrence P. McLellan, Des Moines, District Court Judge for the Fifth Judicial District of Iowa.
  • Sean W. McPartland, Cedar Rapids, District Court Judge for the Sixth Judicial District of Iowa.
  • John D. Telleen, LeClaire, District Court Judge for the Seventh Judicial District of Iowa.

The Iowa Supreme Court appointed the business court judges based on their educational background, experience in the adjudication of complex commercial cases, and their desire to participate in the business court.  While serving on the business court, the judges also retain their normal district court dockets.  

How are judges assigned to cases? Do I have a choice of business court judge?

The State Court Administrator will assign judges to cases on a random basis.

What if the nature of the case changes or a party wants out of the business court once in?

Paragraph F of the Memorandum of Operation provides as follows:

Transfer from docket. Any party to an Iowa Business Specialty Court case may, upon a showing of good cause and lack of unfair prejudice to any other party, request transfer of the case from the business court docket to the regular court docket of the judicial district in which it is filed. The presiding business court judge shall determine, with or without hearing, whether the case shall be transferred back to the regular docket.

Are there time limitations for opting into the business court?

There are no prescribed time limits for opting into the business court. The State Court Administrator, however, must approve the parties’ Joint Consent form for transfer into the business court. The State Court Administrator will determine if the status of the case allows for efficiencies to be gained through transfer to the business court docket.

Where will the case be tried?

Cases transferred to the business court docket will be heard in the county in which they are filed and properly venued under current Iowa rules.

Are there evaluations of the business court?

The State Court Administrator performs periodic reviews of the Iowa Business Court to assess whether the program is successful and whether adjustments are necessary.  There have been evaluations in 2014 (PDF), 2015 (PDF) and 2016 (PDF).

Where do I find more information about the business court?

For more information on the Iowa Business Specialty Court please contact the State Court Administrator’s Office by email at Business.Court@iowacourts.gov or by telephone at (515) 348-4880.

Do other states have successful business court programs?

The Civil Justice Reform Task Force reported that at least 23 states have endorsed the concept of a business court, either by creating a court or considering a plan to do so. Business courts enjoy broad support from legal communities and organizations. In 1997, the ABA Section of Business Law endorsed creation of specialized business courts. In 2007, the Conference of Chief Justices adopted a resolution encouraging “states to study and, where appropriate, establish business courts or their equivalents for the effective management of complex, corporate, commercial and business cases.”

 

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