OKPOLICY.ORG
In 2004, in response to the business establishment’s perennial call for “tort reform,” House Speaker Larry Adair and Senate President Pro Tempore Cal Hobson authored House Bill 2661 authorizing the Oklahoma Supreme Court to create a Business Court Division within the district courts of Oklahoma and Tulsa Counties to handle complex business litigation. Although the bill passed, the business courts were never created or funded.
Last year, Gov. Kevin Stitt leveraged his signature on the general appropriations bill and related measures, to gain the legislature’s agreement to create a Task Force for the Study of Business Courts. The task force, consisting of 11 members, was to study implementation of a business court system and submit a preliminary report no later than January 1, 2025. The preliminary report was issued in early December 2024, and the final report is due no later than January 1, 2026.
The result of the task force study and preliminary report is HB 1562 by Rep. Collin Duel, R-Guthrie, and Sen. Brent Howard, R-Altus, chairs of House and Senate Judiciary Committees. The business courts will be courts of limited jurisdiction empowered to handle only the cases authorized by the statute.
Judges for the business courts, unlike district judges who are elected, will be appointed by the governor from a list of five nominees. Rather than employing the Judicial Nominating Commission, the nominations for business court judges will be made by a legislative “Joint Committee on Judicial Vacancy Appointments” consisting of five members of the State Senate and five members of the House of Representatives appointed by the President Pro Tempore and the Speaker. Four of the five members from each chamber will be from the majority party with one from the minority.
The avowed purpose of the business courts, according to the governor, is to make Oklahoma the “most business-friendly state,” which could influence the selection of judges.
The judges must be at least 35 years old, a U.S. citizen, and a licensed attorney with 10 or more years of experience in complex civil business litigation or transaction law or a current or former judge with civil jurisdiction. Business court judges will serve eight-year terms and may be reappointed, unlike district judges who serve four-year terms and must be re-elected to continue. Also, unlike district judges, business court judges will have a paid law clerk to help with research and opinion and order writing.
By far, the most important provisions in the bill are those outlining the cases over which the business courts will have jurisdiction. The bill starts with cases involving a laundry list of various Oklahoma business acts such as the Uniform Trade Secrets Act, the Uniform Securities Act of 2004, the Uniform Commercial Code, and the General Corporations Act, among others.
It also includes a lengthy list of other types of business litigation such as cases involving professional malpractice claims arising out of a business dispute, cases involving commercial real property, breach of contract, fraud, or misrepresentation between businesses arising out of business transactions or relationships, complex mass tort and class action cases, insurance coverage claims arising out of any complex case, intellectual property cases, environmental or toxic tort claims, and more.
Jurisdictional issues will likely be ultimately resolved through litigation. For example, does a bad faith claim against an insurance company involving a bridge or building collapse go to business court or district court?
Where any other relief is requested, the amount in controversy must exceed $500,000 for claims in complex cases. The bill contains a lengthy definition of “complex cases.”
Specifically excluded from the business court jurisdiction are cases such as residential landlord and tenant disputes, cases under the Consumer Protection Act, personal injury and wrongful death cases, domestic relations, probate, foreclosure, collections in matters involving the Oklahoma farming and ranching statutes or an individual farmer, and several more.
However, there is an exception for cases with “sufficiently complex commercial issues” that could open business court jurisdiction to the excluded cases. For example, could the business court have jurisdiction over a divorce case in which one of the parties is a billionaire businessperson because it has sufficiently complex commercial issues?
According to the Task Force preliminary report, 25 other states have already passed some version of a business court. Oklahoma seems poised to enter the competition to have “business friendly” specialized courts.
