This post originally appeared at https://www.badgerinstitute.org/backers-of-wisconsin-business-courts-fret-for-future-of-experiment/

Specialized docket wins bipartisan support but faces a changed Supreme Court

Advocates for a business court system operating since 2017 in Wisconsin are worried that a politicized state Supreme Court will dissolve the successful pilot program sometime this fall.

The Commercial Docket Pilot Project has the support of Chief Justice Annette Ziegler, and the court agreed to consider a petition filed by the Wisconsin Business Court Advisory Committee to continue the courts through July 2026 sometime after a public comment period that runs through Sept. 23.

Decision-making by the high court, however, has shifted considerably since it last approved extending the pilot in June 2022. With the election of Justice Janet Protasiewicz last year giving the court its first liberal majority since 2008, judges who have volunteered to hear business cases for the project say they are concerned that politics might scuttle what they consider a valuable judicial service.

So far, neither Protasiewicz, nor the other three justices in the progressive bloc, have spoken publicly about the business court pilot, and it’s unlikely they will with a petition hearing pending. 

In the interim, supporters are trying to deliver the message that the business court program is apolitical and that it has bipartisan support — and perhaps most important, that an efficiently run business court is a tool for economic development in the state.

“People on the right and the left are in favor of this court,” said Michael Aprahamian, a Waukesha County circuit court judge who currently has eight business cases on his docket. “This is just one of many specialty courts in this state. I see it as a way for the courts to be more effective and efficient.” 

Circuit Judge James Morrison, who has run the program for the seven northeastern counties in the Eighth Judicial Administrative District, said surveys done by the judges in the program show satisfaction from all parties involved.

Those surveys show overwhelming support for making the pilot program permanent; that litigants believe their cases were resolved at a lower cost and in less time; and that the specialized court reduced delays and continuations.  

“I think people don’t realize that the people most affected by these cases are not the fat-cat business owners. They are the suppliers and the customers,” Morrison said. “This is a volunteer assignment for me. I do it because I like it, it’s challenging, and it needs to be done. I’m just trying to be effective.” 

More data gathering 

The petition, filed May 30 by Laura Brenner, Business Court Advisory Committee chair, focuses attention on the positive feedback from parties involved in cases so far heard in the court. 

“We’ve heard from practitioners of all political bents saying this court is really helpful,” Brenner said. “Somehow, there was an erroneous impression created that people were picking political sides, and that is not at all true.” 

The petition also echoes Morrison’s contention that data gathering in support of making the program permanent suffered for more than a year because of the pandemic. The request for extension includes a seven-point plan to promote and explain the business court. 

“All of the work we’ve done is volunteer,” Morrison said. “We didn’t have funding for data gathering. We feel like we just need more time to make our case.” 

A hearing before the state Supreme Court is made all the more important with the failure of a bill in the Legislature this past session that would have codified the business court, which is not unlike the roughly 100 other specialty courts in the state for cases involving mental health, domestic violence and veterans’ affairs. 

Former Chief Justice Pat Roggensack, under whose leadership the pilot was launched, supported the move to have the Legislature pass a business courts bill, Assembly Speaker Robin Vos, a supporter of the business court, said. 

Despite the efforts of the authors of the twin bills in the Senate and the Assembly, Democrats did not sign on and the bill died in committee, Vos said. 

“This program had strong early bipartisan support,” Vos said. “But I think it says something about our current political climate that we can’t extend a pilot program that is clearly not partisan.”  

Political rancor first surfaced in March 2022, as the Badger Institute reported, with the publication of an editorial by former Dane County Circuit Court Judge Richard Niess calling for the business courts to be disbanded. Niess alleged the pilot was created secretively to serve big business. 

While the contentions were quickly rebutted in an editorial by Paul Swanson, former president of the State Bar of Wisconsin, some of Niess’ misperceptions linger among some members of the judiciary in Wisconsin, Morrison said. “I just don’t understand the hostility,” he said. 

In other states 

The most successful business court system in the country is in Delaware, President Biden’s home state, and one historically governed by Democrats, Morrison said. 

Delaware’s Court of Chancery has created many of the precedents that inform corporate law in the 25 states, including Wisconsin, that have business courts. New business courts in Texas and Utah are expected to begin hearing cases later this year. 

Roughly two-thirds of the companies in the S&P 500 and Fortune 500 are among the 2 million businesses across the country that are incorporated in Delaware. And the chief reason for its success, as two lawyers who spent their careers in the Court of Chancery said, is the antithesis of partisanship and politics. 

“The traits cited as the driving force behind the Delaware Court of Chancery’s more than 225 years of success include predictability, stability, and the ability to move cases forward promptly to disposition,” the attorneys wrote recently. “The key trait among those, however, is ‘predictability.’” 

That reputation is being tested, most recently by Elon Musk, who reincorporated Tesla from Delaware to Texas in June, months ahead of a September launch of business courts in the state’s five largest cities. 

Musk said the reincorporation would save the company $250,000 in Delaware franchise taxes but would also free the company from “undue meddling” by the court in the company’s relations between its corporate board and its shareholders, according to a Wall Street Journal story earlier this week. 

In response in part to Musk’s move, the Delaware General Assembly is considering a bill that would free companies from having to change or amend their charters or articles of incorporation when entering into shareholder agreements, according to the story. 

Kathaleen McCormick, head of the Court of Chancery, called it a “rushed reaction” from the General Assembly. “The reason Delaware has been successful is because it’s perceived as neutral and balanced between management and public investors,” Chancery veteran Joel Fleming, a partner with Boston-based Equity Litigation Group, told the Wall Street Journal. 

It’s the model of efficiency without meddling that prompted Gov. Greg Abbott to sign the bill last year creating the business courts in Texas. “By appointing judges with commercial law expertise,” Abbott said in a press release after the signing, “we can provide a more predictable and efficient process for resolving business disputes, which is crucial for economic growth.” 

Vos isn’t sure the progressive majority in the Wisconsin Supreme Court will embrace the idea of predictability and efficiency in a stand-alone business court system. Should a majority of justices vote not to extend the pilot, Vos said he would support legislation to resuscitate it in the next session. 

That bill would have to be signed by Gov. Tony Evers, who has a record of vetoing legislation for political reasons, Vos said. 

“I’ve heard no complaints, nothing but good things about our business courts,” he said. “I think the record in other states is for quickly and efficiently resolving cases with a huge economic impact. There is really not anything political about this.” 

Brenner acknowledged that the politics of the state Supreme Court has changed, but said she thinks the newest justice, Protasiewicz, will listen with no preconceptions. 

“I’m hoping the justices keep an open mind and look at the evidence,” she said.

Mark Lisheron is the Managing Editor of the Badger Institute. Permission to reprint is granted as long as the author and Badger Institute are properly cited.

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