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HARRISBURG - Pennsylvania may be well on its way to joining states like Delaware and North Carolina in developing a commerce court.
Commerce courts are courts dedicated to complex business litigation. They create a forum in which business issues such as contract litigation and shareholder disputes can be resolved quickly by specialized judicial groups.
Lawyer Debra Fourlas - the co-chair of the Appellate and Post Trial Practice at McNees Wallace & Nurick in Harrisburg - believes the state would benefit from the creation of a specialized court.
“It could help Pennsylvania compete with other states in attracting new businesses to incorporate here,” she told the Pennsylvania Record. “More and more states are establishing separate commerce divisions in their court systems and we should not be left behind.”
In October, the state House of Representatives approved a bill sponsored by Rep. Seth Grove to establish specialized courts to hear complex business cases. Under the bill set forth by Grove, two elected judges and three senior judges from the Superior Court would have jurisdiction over commercial cases.
Sen. Stewart Greenleaf, the chair of the Senate Judiciary Committee has also introduced legislation to create a dedicated commerce court.
Fourlas said that creating such a court system would make Pennsylvania a business-friendly state not just for initial incorporation, but also for dispute resolution.
“In a court system that is seriously overburdened, adding a separate commerce division from the trial court through the intermediate appellate level could help ease the burden on the other divisions of the courts, as well as speed up the disposition of commercial cases, which are often highly time-sensitive,” Fourlas said.
Resolving disputes quickly means that businesses spend less money and resources on litigation. That can be a big draw for businesses, she says.
Delaware has long had a commerce court. Nearly two-thirds of Fortune 500 businesses are incorporated in Delaware and half of all publicly traded U.S. companies are registered there.
Delaware’s Court of Chancery, founded in 1792 focuses solely on complex business litigation. It is made up of five judges with specialized commercial dockets. Its long record of case law serves as a guideline for corporate law across the country.
Even closer to home, Philadelphia and Pittsburgh have created systems dedicated to commercial disputes within their courts of common pleas.
One of Pennsylvania's neighbors to the south, West Virginia, also has a business court.
“My personal opinion is that a separate court is the only way to create a commerce division,” Fourlas said. “Both judges and staff would need to be added, not simply diverted from the existing judicial staff.”
But in a state with an already strained judicial budget, does creating an entirely separate court seem like a price the state simply can pay, even if it brings in more business in the long run?
“I think we need to keep in mind, though, that we are already underfunding our courts, so we should be planning to devote more financial resources to them in any event, whether the system includes a separate commerce division or not,” Fourlas said.