Senate File 639 - Introduced SENATE FILE 639 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 570) (SUCCESSOR TO SSB 1203) A BILL FOR An Act creating a specialty business court, and including 1 effective date provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2452SZ (3) 91 cm/ns
S.F. 639 Section 1. NEW SECTION . 602.6801 Establishment of business 1 court. 2 The supreme court shall establish and maintain a business 3 court as authorized by the general assembly in this part. 4 Sec. 2. NEW SECTION . 602.6802 Purpose. 5 The purpose of the business court is to expeditiously 6 resolve complex commercial and business litigation through the 7 court system. 8 Sec. 3. NEW SECTION . 602.6803 Jurisdiction. 9 1. The business court shall have jurisdiction, concurrent 10 with the district court, over cases where compensatory damages 11 totaling five hundred thousand dollars or more are alleged, 12 and cases that involve claims seeking primarily injunctive or 13 declaratory relief, that meet at least one of the following 14 conditions: 15 a. Arise from technology licensing agreements, including 16 software and biotechnology licensing agreements, or any 17 agreement involving the licensing of any intellectual property 18 right, including patent rights. 19 b. Relate to the internal affairs of business entities, 20 including corporations created under chapter 490 or 504, 21 limited liability companies created under chapter 489, general 22 partnerships created under chapter 486A, limited partnerships 23 created under chapter 488, sole proprietorships, professional 24 associations, real estate investment trusts, and joint 25 ventures, including the rights or obligations between or 26 among business participants, or the liability or indemnity of 27 business participants, officers, directors, managers, trustees, 28 or partners, among themselves or to the business entity. 29 c. Involve claims of breach of contract, fraud, 30 misrepresentation, or statutory violations between businesses 31 arising out of business transactions or relationships. 32 d. Is a shareholder derivative action or commercial class 33 action. 34 e. Arise from commercial bank transactions. 35 -1- LSB 2452SZ (3) 91 cm/ns 1/ 7
S.F. 639 f. Relate to trade secrets, or noncompete, nonsolicitation, 1 or confidentiality agreements. 2 g. Involve commercial real property disputes other than 3 residential landlord-tenant disputes and foreclosures. 4 h. Is a trade secret, antitrust, or securities-related 5 action. 6 i. Involve business tort claims between or among two or 7 more business entities or individuals as to their business or 8 investment activities relating to contracts, transactions, or 9 relationships between or among them. 10 2. The business court shall not have jurisdiction over any 11 of the following: 12 a. A civil action brought by or against a governmental 13 entity, unless the governmental entity invokes or consents to 14 the jurisdiction of the business court. 15 b. Any claim in which a party seeks recovery of monetary 16 damages for personal injury or death or any claim arising 17 under section 714.16, chapter 633, or chapter 633A, unless all 18 parties and a judge of the business court agree that the claim 19 may proceed in the business court. 20 c. Actions arising out of professional negligence unless the 21 underlying claim alleges negligence in a transaction within the 22 jurisdiction of the business court under this section. 23 Sec. 4. NEW SECTION . 602.6804 Initial filing removal and 24 remand transfer and dismissal. 25 1. An action authorized in section 602.6803 may be filed 26 in the business court. If the business court does not have 27 subject matter jurisdiction over the action, or part of the 28 action, the court shall, at the option of the party filing the 29 action, do one of the following: 30 a. Transfer the action or part of the action to an 31 appropriate district court. 32 b. Dismiss the action or part of the action without 33 prejudice to the parties rights. 34 c. Retain jurisdiction of the action not subject to 35 -2- LSB 2452SZ (3) 91 cm/ns 2/ 7
S.F. 639 the jurisdiction of the business court if the court has 1 jurisdiction of a portion of the action. 2 2. A party to an action filed in a district court that is 3 within the subject matter jurisdiction of the business court 4 may file a motion to transfer the action to the business court 5 in the district court where the action was initially filed. 6 The motion to transfer shall be assigned to a business court 7 judge to determine if the business court has subject matter 8 jurisdiction. If the business court does not have jurisdiction 9 of the action or part of the action, the action or part of 10 the action shall remain in the district court where it was 11 initially filed. 12 3. Removal of an action to the business court is not subject 13 to rule of civil procedure 1.441. 14 Sec. 5. NEW SECTION . 602.6805 Appeals. 15 The procedure governing an appeal or original proceeding 16 from the business court is the same as the procedure for an 17 appeal or original proceeding from a district court. 18 Sec. 6. NEW SECTION . 602.6806 Composition of business 19 court. 20 1. The governor shall appoint not fewer than two nor 21 more than three judges to serve exclusively on the business 22 court. On the effective date of this Act, and thereafter 23 upon the occurrence of any vacancy on the business court, the 24 governor shall announce each vacancy. The state judicial 25 nominating commission shall, applying the same procedure used 26 by a district judicial nominating commission under chapter 27 46, nominate for each vacancy two candidates meeting the 28 qualifications for appointment to district court. The governor 29 shall appoint one of the two nominees to fill the vacancy. 30 2. In addition to the judges appointed under subsection 1, 31 the supreme court may assign as visiting judges of the business 32 court district court judges and senior judges. 33 Sec. 7. NEW SECTION . 602.6807 Business court judge assigned 34 to facilitate settlement conference. 35 -3- LSB 2452SZ (3) 91 cm/ns 3/ 7
S.F. 639 The state court administrator or the administrators 1 designee shall assign one business court judge or visiting 2 judge to preside over every action filed or transferred to the 3 business court and a second business court judge or visiting 4 judge to serve as a settlement conference judge. 5 Sec. 8. NEW SECTION . 602.6808 Salary conditions of 6 office. 7 1. A judge of the business court shall receive the annual 8 salary set for a district judge under section 602.1501. 9 2. A judge of the business court shall be subject to 10 retention election under chapter 46. 11 3. A judge of the business court shall be subject to 12 disqualification under section 602.1606. 13 4. A judge of the business court shall be subject to the 14 authority of the supreme court and the commission on judicial 15 qualifications under article 2. 16 5. A judge of the business court shall be subject to 17 impeachment under section 602.2201. 18 6. A judge of the business court shall be subject to the 19 Iowa code of judicial conduct. 20 Sec. 9. NEW SECTION . 602.6809 Jury practice and procedure. 21 1. A jury trial of the business court shall be held in a 22 county in which venue is proper under the Iowa rules of civil 23 procedure. 24 2. Subject to subsection 1, a jury trial in an action 25 removed to the business court shall be held in the county in 26 which the action was originally filed. 27 3. Subject to subsection 1, a jury trial in an action filed 28 initially in the business court shall be held in any county, as 29 chosen by the plaintiff, in which the action could have been 30 filed under the Iowa rules of civil procedure. 31 4. The parties and the judge of the business court may agree 32 to hold the jury trial in any other county. However, a party 33 shall not be required to agree to hold the jury trial in a 34 different county. 35 -4- LSB 2452SZ (3) 91 cm/ns 4/ 7
S.F. 639 5. The drawing of jury panels, selection of jurors, and 1 other jury practice and procedure in the business court shall 2 follow the standards for juries provided in chapter 607A. 3 6. Practice, procedure, rules of evidence, issuance of 4 process and writs, and all other matters pertaining to the 5 conduct of trials, hearings, and other business in the business 6 court are governed by the laws and rules prescribed for 7 district courts, unless otherwise provided under this part. 8 Sec. 10. NEW SECTION . 602.6810 Written opinions. 9 To facilitate the establishment of a coherent body of law, a 10 judge of the business court shall issue a written opinion when 11 deciding issues of law by order or judgment, unless any of the 12 following apply: 13 1. The court has a well-developed body of law on the issue. 14 2. The court is applying the precedent on the issue. 15 3. Another opinion on the issue will not significantly 16 contribute to the development of the law. 17 Sec. 11. NEW SECTION . 602.6811 Business court staff. 18 The state court administrator or the administrators 19 designee may appoint personnel necessary for the operation of 20 the business court. 21 Sec. 12. NEW SECTION . 602.6812 Seal. 22 The seal of the business court is the same as that provided 23 by law for a district court except the seal must contain the 24 phrase The Business Court of Iowa. 25 Sec. 13. NEW SECTION . 602.6813 Rules. 26 Subject to the provisions of this part, the supreme court 27 shall promulgate rules for the jurisdiction and operation of 28 the business court as the supreme court determines necessary, 29 including rules providing for any of the following: 30 1. The timely and efficient transfer and remand of cases to 31 and from the business court. 32 2. The assignment of cases to judges of the business court. 33 Sec. 14. NEW SECTION . 602.6814 Transition provision. 34 This part applies to civil actions described under section 35 -5- LSB 2452SZ (3) 91 cm/ns 5/ 7
S.F. 639 602.6803 filed on or after the effective date of this Act. 1 If an action described under section 602.6803 was pending in 2 a district court before the effective date of this Act, the 3 parties may agree to have the civil action transferred or 4 removed to the business court in accordance with this part. 5 Sec. 15. EFFECTIVE DATE. This Act takes effect September 6 1, 2025. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanations substance by the members of the general assembly. 10 This bill creates the business court of Iowa. 11 The bill provides that the business court has jurisdiction 12 over cases involving compensatory damages of $500,000 or 13 more involving claims that arise from at least one of the 14 following: technology licensing agreements; the internal 15 affairs of business entities; breach of contract, fraud, 16 misrepresentation, or statutory violations between businesses; 17 shareholder derivative actions or commercial class actions; 18 commercial bank transactions; trade secrets or noncompete 19 agreements; commercial real estate disputes; antitrust or 20 securities-related actions; or business tort claims. 21 The bill sets forth provisions governing transfer, 22 dismissal, retention, and removal of cases in the business 23 court, and specifies that the procedure for appeals is the 24 same as for proceedings in a district court. Removal of an 25 action from the business court is not subject to rule of civil 26 procedure 1.441 (time to move or plead). 27 The bill requires the governor to appoint no fewer than two 28 but not more than three judges to the business court from among 29 nominees selected by the state judicial nominating commission 30 and provides that if a vacancy occurs, the vacancy must also be 31 filled following the same procedure. 32 The bill allows the supreme court to appoint district court 33 judges and senior judges as visiting judges of the business 34 court and requires the state administrator or designee to 35 -6- LSB 2452SZ (3) 91 cm/ns 6/ 7
S.F. 639 assign one business court judge or visiting judge to preside 1 over every action in the business court and a second judge to 2 serve as settlement conference judge. 3 The bill provides that a business court judge shall receive 4 the same salary as a district court judge and further provides 5 for the conditions of office of a business court judge. 6 The bill creates directions for the jury practice and 7 procedure in the business court, including venue of jury 8 trials. 9 The bill requires business court judges to produce written 10 opinions to create a coherent body of law. A business court 11 judge does not have to issue a written opinion if the court 12 has a well-developed body of law on the issue, the court is 13 applying precedent, or another opinion on the issue will not 14 significantly contribute to the development of the body of law. 15 The bill authorizes the court to appoint personnel necessary 16 for operation of the court and creates a seal of the business 17 court. The bill directs the supreme court to establish court 18 rules as necessary for the operation of the business court. 19 The bill takes effect September 1, 2025, and provides for 20 the transfer of civil actions pending before that date to the 21 business court by agreement of the parties. 22 -7- LSB 2452SZ (3) 91 cm/ns 7/ 7