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Courting Business
The plan would create a separate business court to handle commercial matters such as contract cases in Miami. The idea could spread to other urban areas.
Proponents say the new specialized court could generate savings for litigants by speeding up discovery and other pretrial procedures. Judges assigned to the business court also would gain more familiarity with the ins and outs of commercial transactions, allowing them to get a handle on cases quicker.
Says Miami lawyer Philip Schwartz, chair of the Florida Bar's Business Law Section: "With Florida becoming a major business state it's going to be critical that there be available judges who have experience dealing with complex commercial matters. Many of the judges now do have substantial experience; but many don't."
While state trial judges generally do a good job, already, "I think there is an economy of scale" in designating a few judges to hear commercial matters, says Miami lawyer Jorge L. Guerra. A commercial litigator and former banker, Guerra heads a committee of the Dade Trial Lawyers Association that is drafting the business court plans for submission this month to Dade Chief Judge Joseph Farina. It'll be up to Farina to OK the pilot program. Guerra's committee is basing its plans in part on previous efforts by the state Business Law Section.
Trial lawyers freely admit the new system could make money for them. Take a small company's $100,000 dispute with a supplier or subcontractor. Under current practice, such a dispute isn't economically feasible for many big-city lawyers to handle. In part, that's because of high overhead costs in urban centers. Also, lengthy discovery, expert witnesses and other trial costs can quickly devour a client's resources.
"If they walk that ($100,000 dispute) into my office, under the current system it's likely that it won't be cost-effective for them for me or most lawyers to handle it," says Joseph Matthews, president of the Dade Trial Lawyers Association.
But trial lawyers routinely take personal-injury cases - such as auto accidents - that involve the same amount of damage. What's the difference? One difference is that, unlike personal- injury cases, business disputes usually involve counterclaims by the defendant. Counterclaims can drive up litigation costs while driving down awards.
Another difference is that personal-injury cases usually involve insurance companies on the defense side, unlike most commercial disputes. Insurance companies are adept at adjusting claims, reaching timely settlements and controlling costs. Insurance companies also aren't liable to file for bankruptcy if they lose, so plaintiffs' lawyers can proceed on a contingency-fee basis. In commercial disputes, by contrast, lawyers can never be sure that a litigant who's responsible for paying fees won't go belly-up.
But economics isn't the only force behind the push for special business courts. Across the country, businesses have called for more uniform results in the complex world of commercial disputes. Chicago and New York state courts responded with pilot programs in 1993. North Carolina and Wisconsin followed suit.
South Florida sponsors are trying to forestall objections that their effort would take resources away from litigants in the personal-injury area. Those fears have helped quash attempts at forming business courts in a few other states.
Says Matthews: "In the process of trying to improve the civil justice system as it applies to business disputes, I'm very sensitive to the need to avoid creating problems for the remaining disputes."
A New Threat To Legal Aid
Florida attorneys are keeping a wary eye on two cases that threaten to wipe out their cherished legal charity.
The Florida Bar Foundation provides money for a variety of causes: legal aid for the poor, law student scholarships, neighborhood dispute resolution centers. Its funds come from interest on lawyers' trust accounts (known as IOTA in Florida and elsewhere as IOLTA).
Florida adopted the first voluntary IOTA program back in 1981. Since then, practically every state has devised its own. The charges are levied on small interest amounts that aren't worth preserving - say, the $2 interest that a divorce client's $800 prepaid fee might earn over 45 days.
But despite the nominal amounts involved, the program always has been controversial, especially among conservative opponents of government-sponsored legal aid programs. The controversy grew in recent years as states - including Florida - began making IOTA contributions mandatory. Now a panel of the Fifth Circuit U.S. Court of Appeals has ruled that the Texas IOLTA program amounts to an unconstitutional taking of property. The decision came in a suit brought by the conservative Washington Legal Foundation.
If upheld by the U.S. Supreme Court, the ruling could invalidate such programs and deal a blow to legal aid that already has suffered severe federal budget cuts. In Florida, IOTA pays for over one-third of the budgets of the state's 12 Legal Services offices. It realizes a total of about $8 million to $9 million a year.
"Obviously it's a matter of some seriousness," says Stephen Day, a Jacksonville lawyer and president of the foundation. Adding to the concern is another case pending before the U.S. Supreme Court challenging assessments on California fruit growers. Those assessments pay for advertising campaigns like the familiar dancing raisins. But agricultural producers have challenged the assessments as violations of free speech. Depending on how far the high court goes, that decision also could have implications for other assessments like IOTA, some longtime court observers are saying.
Still, IOTA programs appear likely to survive. "We believe if the question was ever presented to the U.S. Supreme Court, we'd be successful," says Day.
LEGAL BRIEFS
As Florida Trend reported ("Looking Glass Law," July 1996), there's talk about tort reform in the 1997 session. Hopes are higher since the GOP takeover of the state House of Representatives. Business lobbyists expect attacks on:
Reform of liability laws that unfairly penalize deep-pocket business co-defendants, especially in cases where a criminal injures someone on business property.
Reinstatement of the 12-year statute of repose, which used to bar products liability suits more than 12 years after the manufacturer sold the product. Florida's statute of repose was repealed by the Legislature in 1986.
Reenactment of the state's punitive damages rules, which gave a portion of punitive damages to the state (to avoid giving plaintiffs and their lawyers a windfall).
Reform of some of the exotic new causes of action that have sprung up in recent years, often with fee-shifting provisions that force businesses to pay for successful plaintiffs' lawyers.
Attorney General Bob Butterworth cleared a path through the cane fields for environmentalists who want to sue Big Sugar by declaring that no legislative action is necessary to enforce the new "polluter pays" amendment to the state constitution. The initiative passed as Amendment 5 in the 1996 elections on the same day that a penny-per-pound tax on sugar failed. Environmentalists plan to use the amendment to force Big Sugar to pay a much larger share of the Everglades cleanup. Environmentalists have been ably represented in their campaign by Thom Rumberger, a top Orlando trial attorney and GOP activist whose previous clients include automakers as well as Republican legislators suing Democrats over the 1992 reapportionment.
