Michigan Business Court Jurisdiction To Change Under Proposed Bill

Senate Bill 333 may soon alter the type of cases heard by Michigan’s business courts. This proposed bill aims to continue streamlining business and commercial disputes by removing the current monetary requirement that cases before the business court involve at least $25,000 in controversy.  The bill instead focuses on the nature of the complaint. Bill 333 defines business and commercial disputes as “an action in which one or more of the parties is a business enterprise and the other parties are its or their present or former owners, managers, shareholders, members, directors, officers, agents, employees, suppliers, or competitors, and the claims arise out of those relationships.”

Parties should be cognizant of the fact that although this language may seem more encompassing, there are still limitations to the scope of cases business courts can hear. More specifically, matters involving land contracts, foreclosures and other residential land disputes continue to be outside the jurisdiction of business courts. In addition, the proposed bill will also exclude actions to enforce construction liens and actions involving the enforcement of governing documents in condominium and homeowners associations

Presently, parties are required to file actions in business court if their actions fall within its current jurisdictional scope.  This bill should limit the length of disputes which were historically held in unspecialized courts, as even guarantors of commercial loans and members of LLCs will be subject to the business court’s jurisdiction if Bill 333 passes in its current construction. Please continue to visit detroitbusinesslaw.com for any future updates on this legislation and other important business law news.

 

This article was written by Nezar Habhab, Law Clerk.

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