News & Events

Let’s Get Down to Business: Tennessee Supreme Court Establishes Business Court Pilot Project

Following the lead of over half of the States in the union (including its neighbors Alabama, Georgia, North Carolina, and South Carolina), the Tennessee Supreme Court has created by Order of March 16, 2015 the Davidson County Business Court Pilot Project (the “Business Court”). The Supreme Court created the Business Court to “meet the litigation needs of existing and future businesses” in Tennessee. The Business Court is designed to provide a more expeditious forum for commercial litigation, led by an experienced judge with substantial expertise in complex commercial and business disputes. A full copy of the Supreme Court’s Order is located here; however, a quick review of the basics is set forth below:

Who is The Business Court Judge?: The Supreme Court appointed Davidson County (Nashville) Chancery Court Part III to serve as the initial Business Court. Chancellor Ellen Hobbs Lyle is the Chancellor for Part III. Chancellor Lyle has been a Chancellor since 1996 and, over the course of her judicial career, has handled some of the State’s most complex business and commercial cases.

When Will the Business Court Begin Accepting Cases?: Cases filed on or after May 1, 2015 are eligible for assignment to the Business Court.

What Type of Cases Can Be Assigned to Business Court?: To be eligible for assignment to the Business Court, a case must: (a) seek at least $50,000 in damages or primarily injunctive or declaratory relief; and (b) satisfy at least one of the following:

  • i. relate to the internal affairs of a business;
  • ii. involve claims for breach of contract, fraud, misrepresentation, breach of fiduciary duty, or statutory violations between businesses;
  • iii. constitute a shareholder derivative claim or commercial class action;
  • iv. involve commercial real property disputes (as opposed to residential property disputes);
  • v. involve business claims between two or more businesses or individuals relating to business or investment activities;
  • vi. involve technology licensing agreements or the licensing of any intellectual property or patent rights;
  • vii. involve alleged violations of noncompetition, confidentiality, or related agreements; or
  • viii. involve commercial construction contractual or defect claims.

There are many types of cases that are not eligible for the Business Court, the noteworthy of which include personal injury and wrongful death claims, professional malpractice claims, and claims where the State of Tennessee is a party.

How Does a Party Get a Case into Business Court?: A plaintiff will still file a commercial complaint in the appropriate court and serve the complaint on the defendant(s) in the same manner as in the past. However, within sixty (60) days of service of the complaint, if the case is filed in Davidson County, any party may file with the Business Court a Request for Designation of the case to the Business Court. If the case meets the eligibility requirements, the Chief Justice of the Supreme Court will ultimately make the decision on whether the case will be assigned to the Business Court.

Can Cases That Otherwise Would Not Have Venue in Davidson County (Nashville) Be Filed in Business Court?: If a case otherwise eligible for the Business Court does not have venue in Davidson County, it may still be assigned to the Business Court, but only if all parties file a motion to transfer the case and a Joint Consent and Waiver of Venue From.

What are the Procedural and Evidentiary Rules of the Business Court?: The Tennessee Rules of Civil Procedure and the Tennessee Rules of Evidence shall apply to the Business Court. However, the Business Court has been vested with broad discretion to establish its own local court rules and case management procedures in order to promote efficient and effective dispute resolution.

The Business Court is obviously a work-in-process, as the Court will inevitably develop specific processes and procedures to promote the express purposes set forth in the Supreme Court’s Order. However, potential litigants should take comfort in the fact the Business Court is being run by an experienced Chancellor who has handled business and commercial cases effectively and efficiently for the last nineteen years.

Charles I. Malone