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Georgia House of Representatives Passes Enabling Legislation for Statewide Business Court

Georgia House of Representatives Passes Enabling Legislation for Statewide Business Court

In November 2018, Georgia voters approved amending the State Constitution to create a Business Court with statewide jurisdiction.  The General Assembly, however, is still in the process of passing enabling legislation.  On March 5, 2019—two days before crossover day—the House passed such enabling legislation.  As we have previously commented here, there appear to be incentives for forum shopping that should be of interest to business litigators practicing in the State.

Under HB 239, the Business Court would have concurrent jurisdiction over most commercial causes of action if a party requests equitable relief or at least $250,000 in monetary damages (other than commercial real property disputes), as well as supplemental jurisdiction over ancillary claims.  Thus, a plaintiff whose claims fall below the amount in controversy threshold could file in the Business Court rather than the appropriate Superior Court simply by requesting equitable relief.  Conversely, a plaintiff could avoid removal or transfer to the Business Court by limiting its claims to monetary damages and alleging the amount of controversy was less than $250,000.

Furthermore, any party could petition the Business Court to transfer actions commenced in Superior and State Court.  In other words, a plaintiff could file in Superior or State Court and, if unhappy with their judge assignment, petition for a transfer to the Business Court (although the Business Court may or may not grant that petition).

On a related note, HB 239 provides that the “Business Court may transfer to the appropriate superior court or state court any and all claims filed in the Georgia Business Court …. even if such claims are within the jurisdiction of the … Business Court.”  In other words, the Business Court would not simply be required to transfer claims over which it lacks jurisdiction but would have discretion to transfer claims to Superior or State Court regardless of the plaintiff’s initial choice of forum.  How this discretion would or could be exercised is uncertain at present.

HB 239 now moves to the Senate.  The 2019 legislative session ends in early April.

Ichter Davis will be closely tracking legislative action on this issue during the session.  Stay tuned for updates.

William Daniel Davis

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