A chancery Court Could Assist Pa.


Clifford E. Haines
Published: March 31, 1997
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A recent study released by Dun & Bradstreet shows that Pennsylvania
suffered the fifth-largest loss of jobs and businesses of any state in
the nation during the first half of this decade. Furthermore, while
Pennsylvania continued to decline commercially, our neighboring states
of Delaware and New Jersey were among the national leaders in attracting
businesses from other states.

More than 500 businesses left Pennsylvania between 1990 and 1995. At the
same time Delaware attracted 73 new businesses and took more than 4,000
jobs from Pennsylvania. Likewise, New Jersey attracted 1,316 firms and
took more than 23,000 jobs from other states including Pennsylvania. And
to add to our woes, our western neighbor, Ohio, ranked among the top 10
states in the nation in business growth.

Why has Pennsylvania lagged in the business and jobs sweepstakes?

There are almost as many answers as there are jobs lost. Geography,
taxes, government regulations, the economic climate, the school system,
the crime rate and just plain luck all play some role in any state's
ability to attract businesses. Consequently, it's doubtful that any
single factor can be fingered as the reason for Pennsylvania's poor
performance.

Still, isn't it clear that with so many factors at play we've got to do
everything we can to attract and keep businesses and jobs? In this
highly competitive climate, with our neighbors pulling out all the stops
to lure businesses, we've got to realize that every step we take to make
Pennsylvania more business-friendly is an important step.

That's why I believe we have nothing to lose and possibly a good deal to
gain by creating a special business court for our state. A business
court (sometimes called chancery court) would handle litigation between
business entities. It would hear cases involving issues such as
property, tax, contracts, mergers and acquisitions as they relate to
businesses. Judges presiding over cases in the business court would have
or would eventually develop experience working with and deciding such
matters. In time, Pennsylvania could develop a body of law and
procedural structure that would make us a model, like Delaware, for
efficient disposition of business disputes.

Many believe that a business court can streamline case management,
expedite the disposition of cases and provide a more economical route to
justice and a substantial drop in the cost of litigation. Those
advantages would seem to be attractive to businesses. For 200 years
Delaware's chancery court has been a model for the nation. In addition
to Delaware, several other states have special business courts and other
states are studying proposals to establish such courts. Already, courts
systems in Pennsylvania's urban areas have successfully diverted large
groups of cases such as class-action cases and toxic-tort cases. By
grouping and separating these cases we have been able to ensure that the
other cases continue to move through the court system unencumbered by
the "drag" of complex litigation.

In Pennsylvania a business court could be established through an act of
the legislature, thus creating a whole new court, judges, budget, etc.
Or, internally, the court system itself could determine that certain
existing judges, courtrooms, personnel and resources be utilized for
commercial litigation only. Either way, Pennsylvania would also have the
option of creating local or model business courts for one or more
jurisdictions. A new business court in New York City has been so
successful that the state is creating similar courts in other
jurisdictions. Similarly, Pennsylvania may choose to create a
Philadelphia and/or Pittsburgh business court. New York's new business
court has cut the volume of pending cases by nearly a third, increases
the number of cases settled by 85 percent and reduced the case
disposition time by nearly 30 percent.

Among others, the American Corporate Counsel Association, the
Pennsylvania Chamber of Business and Industry, Gov. Tom Ridge and a
specially formed Business Court Coalition have all supported the concept
of a business court. Now, state Sen. Stewart Greenleaf (R-Montgomery)
has reintroduced legislation to create a business court for
Pennsylvania. Under the bill, the court would have six judges.

In Philadelphia alone, it has been estimated that a continuing business
exodus is costing us as many as 400 jobs per week. If a business court
will help us compete with other states so that we can stem the tide of
jobs and commerce, why shouldn't we create such a court? Within reason,
doesn't it make sense to do everything we can to keep and attract
business?

Clifford E. Haines, a shareholder with the Philadelphia law firm of
Litvin, Blumberg, Matusow and Young, is chancellor of the 14,000-member
Philadelphia Bar Association.