News & Events

The Tennessee Business Court at One Year

The Tennessee Business Court Davidson County Pilot Project opened on May 1, 2015, pursuant to a March 16, 2015 Tennessee Supreme Court Order.  Located in the Davidson County Chancery Court – Part III, the Business Court accepts transfers of business-related lawsuits seeking at least $50,000 in compensatory damages, injunctive, or declaratory relief, from other civil courts in Tennessee.  BizLitNews chronicled the opening of the Business Court and its workings in several posts in 2015.

The Business Court’s judge and staff attorney, Chancellor Ellen Hobbs Lyle and Justin Seamon, recently released a report of the Business Court’s first year.  The entire report is available here and is worth a read, but highlights include the following:

  • Since May 1, 2015, 53 cases have been transferred to the Business Court.
  • The businesses involved in the transferred cases represent a broad spectrum of industries, including healthcare services companies; manufacturers of home goods; television and music-industry companies; a casino corporation; restaurateurs; information technology companies; commercial real estate investors; travel and hospitality company; and a “mixologist, community activist, and philanthropist in the Nashville community,” to name just a few.
  • The majority (77%) of the cases involve business claims between two or more business entities or individuals as to their business or investment activities relating to contracts, transactions, or relationships between them. Sixty-eight percent of the cases involve claims for breach of contract, fraud, misrepresentation, breach of fiduciary duty, or statutory violations between businesses arising out of business transactions or relationships.  Comparatively fewer cases involve commercial construction contract disputes (6%) or constitute shareholder derivative suits or commercial class actions (8%).
  • Among the general practices and advantages of the Business Court are telephonic hearings where appropriate, rulings within 30 days, and ruling on the papers (e., without oral argument) where appropriate.
  • The Business Court makes use of a tailored Case Litigation Plan in each case to clarify causes of action, identify the appropriate method and schedule for discovery, and to schedule hearings on motions at the same time, rather than serially, among other things.
  • There are currently only three non-Davidson County cases in the Business Court. The Court will soon implement e-filing and believes that the ability to e-file may increase the number of non-Davidson County cases seeking transfer to the Business Court.
  • The Business Court also seeks to implement three types of tracks for cases: “fast,” “standard,” or “complex.” This would further individualize cases and litigation plans.

Overall, the Tennessee Business Court is well on its way to meeting the objectives laid out in the Tennessee Supreme Court’s Order establishing the court.  It has started to create a body of law applicable to business cases that are available online.  As the Business Court gains expertise in particular types of cases, subsequent litigants will benefit from increased efficiency.  It remains to be seen whether litigation in the Business Court will be attractive to non-Davidson County litigants, although the availability of e-filing and telephonic hearings may ameliorate this issue.  Butler Snow has handled litigation in the Business Court and will continue to monitor its developments.

Diana M. Comes