Judge Niess calls commercial docket’s efficacy, impartiality into question

Listen to this article

As the Wisconsin Supreme Court plans to test its commercial-court project in more places, some judges are questioning the need for the court in the first place.

The court, which started taking cases in 2017, was billed as a fast way to resolve complex commercial litigation. Its initial try-out took place both in Waukesha County and the Eighth Judicial District, which encompasses Marinette, Oconto, Door, Kewaunee, Brown, Outagamie and Waupaca counties.

The project was originally to run for three years. After the first of those, a Wisconsin Law Journal assessment of the court’s progress found that many attorneys were reporting faster outcomes and were expressing appreciation for commercial court judges’ expertise in complex business disputes. But one attorney said there was a common misconception: That the court favored businesses.

Such accusations have stuck around even as the court has been put to wider use. In February 2020, the state Supreme Court ordered the project to continue through July 2022 and added the Second and Tenth Judicial Administrative Districts as new locations. Then, in an order dated March 13, Dane County was added as a designated location for commercial-court dockets, despite opposition from some of the county’s judges.

The decision has become a statewide topic of debate. Dane County Circuit Court Judge Jill Karofsky, who’s running against Justice Dan Kelly for a seat on the state Supreme Court, spoke out against the project during a forum at the Milwaukee Bar Association on March 12.

“It feels like there are two different judicial systems: one for big business in the state of Wisconsin and one for everybody else,” Karofsky said. “It’s not just businesses in this state that need their cases resolved faster. Everyone would like their cases resolved faster.”

Kelly called Karofsky’s characterization of the commercial court “preposterous.”

“We have many different kinds of courts organized around topics to resolve them efficiently,” Kelly said. “I’m not going to prejudge the efficacy of the business court. We’ve just started implementing these recently, and we don’t have enough information to determine if this is an effective handling of business cases.”

Disputed data

The state Supreme Court has released data giving insight into the commercial court’s efficacy and reception among attorneys. A progress report from the high court said 81 cases had been filed in the commercial docket by December 2019 (see infographic).

Half of the cases were filed under the Prohibited Business Activity class code, which incorporates cases involving tortious or statutorily prohibited business activity, unfair competition or antitrust; claims of tortious interference with a business organization; claims involving restrictive covenants and agreements not to compete or solicit; and claims involving confidentiality agreements.

Forty-five of the 81 cases have been closed. And more than 80% were resolved in less than a year (see infographic), according to the progress report.

The numbers make a good case for the continuation of the project. But Dane County Circuit Court Judge Richard Niess is skeptical of the data’s accuracy.

He said the progress report structures the qualitative data in a way that provide participants with three opportunities to give the court favorable ratings but only one chance to rate it poorly. The arrangement goes against the best practices often recommended for surveys, which typically have a symmetrical scale to avoid bias.

Niess said the progress report’s claim that cases outside the commercial docket take three years, far more than the 18 months in the commercial court, isn’t fair either.

“They make these statements that have no basis in data,” Niess said. “None of (the cases) have gone to trial in the commercial docket. If you drill down on those 81 cases, none are any kind of a ‘rocket docket’ to what we’re doing here.”

Niess cited five cases he heard since 2017 that would have qualified for the commercial docket. Two were intentional tort, two were money judgments and one was a declaratory judgment. Four settled or were dismissed before trial. Niess said the other is in private mediation as of January and still open. Of the four closed cases, three took about 15 months from start to finish and one took about 21 months.

‘A threat to independence’

Niess criticized the high court’s proposal and decision to bring the commercial docket to Dane County. He and several other circuit court judges first found out about that proposal in November 2019.

“We agreed to accept the court with one qualification,” Niess said. “We wanted to use civil rotation in Dane County, which has been handling commercial cases for decades, to be the commercial docket. That’s where the negotiations broke down.”

At that point, Niess said the chief of chief judges told him and his colleagues that Chief Justice Patience Drake Roggensack wanted to choose the judges on the commercial court. Also, she said, if Dane County didn’t want to participate, it didn’t have to. Dane County’s chief judge at the time, William Hanrahan, took advantage of that option and declined to have the circuit court participate.

But, according to Niess, Hanrahan learned in February the commercial docket was coming to Dane County anyway and that judges had already been selected.

“The process that has been imposed on Dane County is a threat to our independence and certainly gives the appearance of impropriety to anyone who is not in the business community who happens to get tied up in this court,” Niess said.

Niess sent an email in February to his colleagues expressing his opposition to the decision. A day later, Roggensack released a statement about the commercial court. She wrote that she had convened a study committee for the project in 2016 because 26 other states had commercial dockets.

Roggensack said the court decided to expand the project because it had proved itself beneficial over the past three years. The commercial court is not unique in its reliance on specifically assigned judges, according to Roggensack’s statement.

“There are other courts in Dane County where judges do not hear all case types,” Roggensack wrote. “For example, not all judges are assigned family law cases. However, in all Wisconsin circuit courts our judges provide unbiased, thoughtful adjudications.”

Roggensack said she has given every judge an opportunity to decline to take part in the court because of the extra work involved in such assignments.

Niess believes there’s no need to limit the opportunity to certain judges in the first place.

“If you are really looking to make this succeed, you would accept the entire civil division, all of whom have for years handled commercial docket cases,” Niess said.

An attorney’s perspective

Stephen Cox, an attorney at Hale Lammiman in Milwaukee, has two cases pending in the commercial court. He said having specially designated judges on the court has been a help.

“I think on the commercial docket, the judge might be more willing to take an emergency phone call hearing as far as a dispute that arises at a deposition, whereas that might be impossible to get in front of another judge on the same day,” Cox said.

He said the commercial court seems to have made its process more like federal courts’, putting the onus on attorneys to sort out issues amongst themselves.

“It encourages dialogue between attorneys,” Cox said. “Getting (e-discovery) issues out on the front end, as opposed to trying to deal with it on the back end, is nice, and accounting for it in the case management plan.”

Cox would recommend other attorneys file in the commercial docket if their cases meet the qualifications, and the data included in the state Supreme Court’s progress report show the majority of attorneys surveyed agree. Seventy-five percent of respondents somewhat or strongly believed the commercial court should become a permanent part of the Wisconsin Court System.

What’s ahead

The commercial-court project will continue until July 2022, according to the interim rule amended in February. The state Supreme Court may extend it again upon the recommendation of the Director of State Courts.

The March 13 order set Dane County’s project to start as soon as reasonably possible. Niess said judges Valerie Bailey-Rihn, Julie Genovese and Frank Remington are presiding over the cases.

Niess, meanwhile, continues to speak out against the project and what he believes is an “unnecessary blot on the court.”

“This is a solution looking for a problem,” Niess said. “Dane County is not anti-business. We are one of the leading, if not the leading, economic engine in this state, and we’ve done it without a commercial docket so far.”