TBA Law Blog

Posted by: Sharon Lee & Justin Seamon on Sep 1, 2015

Journal Issue Date: Sep 2015

Journal Name: September 2015 - Vol. 51, No. 9

What You Need to Know About Tennessee’s New Business Court

The Tennessee Supreme Court has announced that Tennessee is “open for business” by creating a Business Court docket through a pilot program that will better meet the litigation needs of existing and future businesses across our state. The pilot program does not actually create a new court, but instead shifts the focus of Davidson County Chancery Court, Part III, to business cases.

In fulfilling the judiciary’s duty to provide for the orderly administration of justice, the Tennessee Supreme Court established the state’s first Business Court docket in March 2015.[1] The Supreme Court recognized that traditional litigation practices too often fail to meet the modern needs of 21st-century businesses. With a docket dedicated solely to commercial disputes, the Business Court is better able to keep pace with evolving business practices and directly address and resolve the kinds of challenges unique to business litigation.

After a detailed study of the models used in other states, the Supreme Court decided it was Tennessee’s turn. Tennessee joins more than two dozen states across the country that have created some form of specialized business docket tailored to their respective needs.[2]

The Business Court is fiscally conservative; it uses existing court resources. Chancellor Ellen Hobbs Lyle, a Davidson County judge who is very experienced in the resolution of business and commercial disputes, was designated to serve as the first Business Court judge and will continue to handle her regular docket in Davidson County in addition to handling business cases.

The Business Court has been enthusiastically received by the governor,[3] members of the state legislature,[4] business leaders and lawyers,[5] all of whom recognize its importance in attracting and retaining business in Tennessee and to Tennessee’s continued economic growth and development.

Chief Justice Sharon Lee


A business court is a proven way to produce quicker resolutions with reduced litigation costs and greater predictability and consistency of decisions. It is a valuable tool for economic development and business retention — which means more jobs for Tennesseans.
— Chief Justice Sharon Lee

Why Do We Need a Business Court?

Business cases can be complicated, often with procedural and substantive complexities that respond particularly well to specialization. For this reason, commercial disputes benefit from having their own specialized court, just like probate, juvenile and criminal matters.

More specifically, business cases typically involve large quantities of documents and financial records. They often require detailed analysis of commercial transactions that may be unique to a certain case and business, as well as the application of contracts to complicated circumstances.

Trials may extend for weeks, and initial planning and structuring of the litigation collaboratively between counsel and court is needed. Business cases often demand multiple phases of litigation, mediation, written findings of facts and conclusions of situational and developing law, and, usually, a unique, case-specific remedy rather than, for example, an “innocent” or “not liable” verdict. For all these reasons, business cases can be extremely time-consuming and can easily overload a busy court’s docket.

Having one court focusing on business cases makes sense for the Judiciary, business litigants, and the business community in general. A business court allows a judge the opportunity for added focus to fully address the most complex cases; removes complex cases from the general docket so that other cases can be expeditiously resolved; establishes a body of law so that future cases may be resolved more efficiently and expeditiously; and provides for more timely resolution of disputes based on an articulated core of legal principles — all of which promotes confidence in the process and provides future guidance for business practices outside the courtroom.[6]

The Supreme Court summarized its reason for establishing the Court in its Order:

This order creates a specialized trial court to provide expedited resolution of business cases by a judge who is experienced and has expertise in handling complex business and commercial disputes, and who will provide proactive, hands on case management with realistic, meaningful deadlines and procedures adapted to the needs of each case for customized, quality outcomes. The Business Court will develop a body of rulings from which lawyers and litigants can better predict and assess outcomes in business cases.

Non-business case dockets, as well, will benefit from the removal of complex and time-consuming business cases from the general docket.[7]

Why Start with a Pilot Program?

The Business Court was set up as a pilot project to allow for a “test drive” of the system, the gathering of data and information, and the identification of best practices for the Business Court.

By establishing practical best practices and procedures, the Business Court Pilot Project contemplates a long-term reengineering of traditional litigation processes in a manner that better suits the needs of business litigants.

To achieve this goal, Chancellor Lyle will have input from a newly established Business Court Rules Advisory Commission. The Advisory Commission will assist in thoroughly evaluating the development and progress of the Business Court. Tennessee Court of Appeals Judge Neal McBrayer chairs the Commission. The other members of the Commission are:

  • Scott Carey of Baker, Donelson, Bearman, Caldwell & Berkowitz PC, Nashville;
  • Jef Feibelman of Burch, Porter & Johnson PLLC, Memphis;
  • David Golden of Eastman Chemical Company, Kingsport;
  • Celeste Herbert of Jones, Meadows, & Wall PLLC, Knoxville;
  • Pat Moskal of Bradley Arant Boult Cummings LLP, Nashville.
  • Bill Tate of Howard Tate Sowell Wilson Leathers & Johnson PLLC, Nashville;
  • Charles Tuggle of First Horizon National Corporation, Memphis; and
  • Tim Warnock of Riley Warnock & Jacobson, Nashville.

Chancellor Ellen Hobbs Lyle, a Davidson County judge who is very experienced in the resolution of business and commercial disputes, was designated to serve as the first Business Court judge and will continue to handle her regular docket in Davidson County in addition to handling business cases.

Photos by Elizabeth Slagle Todaro.

How the Business Court Works

Participating in the Business Court is a choice — not a requirement. To get into the Business Court, you file the case in the Davidson County Chancery Court and then file with the Davidson County Clerk and Master a “Request for Designation to the Business Court.” For the request to be granted, specific criteria must be met. First, the case must have been filed after May 1, 2015. Second, litigants must be seeking at least $50,000 in compensatory damages or primarily injunctive or declaratory relief.

Finally, cases must meet subject-matter requirements. Cases should relate to the internal affairs of businesses, including the rights or obligations between or among shareholders or partners; involve claims of breach of contract, fraud, misrepresentation, breach of fiduciary duty, or statutory violations between businesses; involve commercial real property disputes; relate to business claims between business entities or individuals as to their business or as to investment activities relating to contracts, transactions, or relationships; or involve commercial construction contract disputes.

Examples of the types of cases eligible for the Business Court include:

  • Shareholder derivative suits
  • Business divorces
  • Corporate accountings
  • Corporate dissolution
  • Non-competition/non-solicitation issues
  • Declaratory/injunctive relief involving corporate governance
  • Business trade secret actions
  • Indemnification
  • Piercing the corporate veil
  • Receivership
  • Mergers/acquisitions
  • Breach of fiduciary duty of corporate actors
  • Technology licensing, intellectual property, and patent issues

Not all cases are eligible for the court. For example, the Business Court will not hear cases involving personal injury, wrongful death claims, professional negligence claims or claims where the State is a party.

Tennessee’s Business Court is not exclusively reserved for “Business vs. Business” disputes. While such disputes may account for many of the cases eligible for transfer to the Business Court, cases involving individuals are also eligible.

After a “Request for Designation to the Business Court” is filed, Chancellor Lyle will determine if the case is eligible. If she determines that it is, Chancellor Lyle will recommend to the chief justice that the case be transferred to the Business Court, and the chief justice may approve the “Request for Designation” and order that the case be transferred.

Cases outside Davidson County may also be transferred to the Business Court. Once a case is filed in any county in Tennessee, a party must file with the Davidson County clerk and master a “Request for Designation to the Business Court.” Before the designation is granted, the non-Davidson County parties must agree to waive venue. Chancellor Lyle will determine if the case is eligible and refer it to the chief justice for approval.

The Business Court will make use of available technology to maximize efficiency for all litigants. The Business Court is equipped with videoconferencing equipment that can be used for motion hearings in order to minimize travel for non-Davidson County litigants. Additionally, the Business Court will, where appropriate, rule on motions on the papers and bundle motion hearings together in order to further reduce travel costs. Finally, the Administrative Office of the Courts has approved implementation of e-filing for the Davidson County Clerk and Master’s Office, which should be operational in the coming months. This will provide an additional cost and time-saving feature for the Business Court.

In the interest of efficiency, the Business Court will work with counsel and parties to develop a case-specific, cost-effective Case Litigation Plan. Once all pleadings have been filed by the parties, cases will promptly proceed to a Case Litigation Plan Conference, which will provide an early opportunity for collaboration between the court, counsel and parties to ensure the case is on a meaningful track toward efficient disposition. This will not be a cookie-cutter status conference. Rather, the Case Litigation Plan Conference will involve proactive, hands-on case management, with realistic deadlines and procedures adapted to the individual needs of each case. A nonexclusive list of items to be addressed at the conference includes:

  • Assignment of a trial date within 12 months of initial filing, or identification of the case as needing longer pretrial preparation
  • Pleadings issues
  • Determination of whether additional parties are essential to the complete resolution of the case and setting a time limit for filing third-party complaints or otherwise bringing in additional parties
  • Determination of whether severance, consolidation or coordination with other actions is desirable
  • The identification of any motions to dismiss or other preliminary or pre-discovery motions that have been filed or are anticipated and the time period in which they shall be filed, briefed and argued
  • Setting of a discovery plan and schedule, including the length of the discovery period, the number of fact and expert depositions to be permitted, the length and sequence of such depositions, and determining if protective orders or other limitations are appropriate
  • An estimation of the volume of documents and computerized information likely to be the subject of discovery from parties and nonparties and whether there are technological means that may render document discovery more manageable and cost-effective
  • Identification of anticipated areas of expert testimony, timing for identification of expert witnesses, responses to expert discovery, exchange of expert reports, and timing of motions to exclude expert testimony under McDaniel v. CSX Transp. Inc., 955 S.W.2d 257 (Tenn. 1997)
  • The time period after the close of discovery within which post-discovery dispositive motions shall be filed, briefed, and argued and a tentative schedule
  • The possibility of settlement and the timing of alternative dispute resolution
  • The use of technology, videoconferencing and/or teleconferencing
  • Organization of a master list of contact information for counsel
  • The scheduling of further conferences

Ultimately, these individualized procedures, the use of technology and the specialized docket of the Business Court are designed to advance the efficient disposition of cases and to eliminate nonproductive litigation processes. Indeed, other states have seen very positive results and received enthusiastic feedback regarding their business courts.[8] With the establishment of the Tennessee Business Court Pilot Project, the Tennessee Supreme Court joins these states, intending to build upon the successes and momentum business courts have enjoyed elsewhere. Now, we can proudly say, Tennessee is open for business.

     States with a business/commercial court program or docket     

A Conversation with Chief Justice Sharon Lee

Business Court Staff Attorney and coauthor Justin Seamon sat down with Chief Justice Sharon Lee to ask her some questions about the development of the Business Court and its future.

Q. Why did you seek the establishment of a Business Court?
A. I was seeing too many commercial cases not entering the court system and being resolved by arbitrators rather than judges. Businesses found alternative resolution processes because our judicial process was often too slow and costly. Arbitration and mediation are valuable tools and very appropriate in some cases, but we need to do our part to resolve business disputes. We must be adept and provide the resources and expertise that our legal community expects from us. The courts can do this by adjusting to the needs of businesses and having a system in place that resolves these cases efficiently by a competent and experienced judge.

Q. Why was Davidson County Chancery Court selected for the location of the Business Court?
A. Davidson County Chancery Court is centrally located and already handles a large number of complex commercial disputes. Many of the Davidson County chancellors and judges use scheduling orders for efficient case management. Perhaps most importantly, I discovered that Chancellor Lyle shared my passion for the development of a Business Court docket. I recognized that having an experienced judge with a strong interest in business cases was critical for the success of the project. Chancellor Lyle was a perfect choice. She is highly regarded with nearly 20 years of judicial experience and has tried some of the state’s most complex business and commercial cases. She has all the qualifications required of a business court judge. Her expertise throughout this project — as well as the support and respect of the business bar — are strong indicators of a successful future for this endeavor. Also, the support and assistance of Davidson County Presiding Judge Joe Binkley and the Davidson County trial judges were important factors in getting the Court up and running.

Q. What types of case management procedures and protocols will be utilized in the Business Court?
A. Chancellor Lyle and her staff have worked hard to develop innovative procedures to maximize effectiveness and efficiency in trying business cases. They have prepared a Guide to the Business Court, located on the Administrative Office of the Court’s web site (TNCourts.gov/bizcourt), which provides a comprehensive overview of what to expect when a case is filed and the forms needed to request transfer to the Business Court.9 Chancellor Lyle’s goal is to provide a customized approach to case management for each individual business case, given the case’s specific context, so as to avoid rigid trial litigation management techniques that are inefficient or not appropriate. Some of the techniques she uses include: (1) staggered dockets/ appointed times for court hearings; (2) discovery schedule and methods structured proportionate to the case; (3) streamlined motion practice; (4) planning with out-of-county attorneys to minimize travel by videoconferencing and other methods; (5) provision of judge and staff with expertise in business law and business case procedures and methods; (6) prompt written decisions and orders by the judge at all stages of the case, including rulings and scheduling; and (7) rulings on the papers when appropriate.

Q. Is this a “pro-business” court?
A. No. This court is like any other specialized court, such as juvenile, probate, veterans or drug courts. It simply recognizes that certain cases require different procedures and processes in order to better provide prompt resolutions based on applicable law.

Q. You said cases may be filed from outside Davidson County. So a lawyer from, say, Sullivan or Tipton County who has a business case may file that case with the Business Court?
A. Yes. We encourage lawyers from all parts of the state to take full advantage of the benefits of the Business Court docket. Lawyers from outside Davidson County need only complete the appropriate “Request for Designation to the Business Court,” found at www.TNCourts.gov/bizcourt, which will include their written waiver of venue. Once a request is approved, the case will be transferred to the Davidson County Business Court, where the court will accommodate these out-of-county litigants with the use of technologies like videoconferencing and teleconferencing. In addition, with the recent approval and upcoming implementation of e-filing in the Business Court, the process will be made as easy as possible for lawyers all across our state to make use of the great features of the Business Court.

Q. How long will the pilot project last?
A. Much like Tennessee’s fiscal approach in having a balanced budget, the Supreme Court has taken a very thoughtful approach to determine the needs and timing for the establishment of additional Business Court dockets. As such, the Tennessee Supreme Court made a deliberate decision not to place a definitive time period on the pilot project. We wanted to be flexible to allow the pilot project time to get up and running, develop data, review evaluations from the legal and business communities, and allow the Business Court Rules Advisory Commission to assist in developing rules and procedures for the court. We want to make certain that our model is the best it can possibly be before expanding it to other parts of the state.

Q. Chancellor Lyle has been handling the business court docket since March — how is it going so far?
A. The Business Court is off to a great start! In the months that the court has been operating, I have approved the transfer of 12 cases to the court. Ten cases were from Davidson County and one case was from Williamson County. Out of the 12 cases, there are a total of 25 business entities (i.e., Corporation, LLC, Partnership, etc.) as listed parties. The business entities are incorporated from a variety of states including Tennessee, Delaware, Missouri, Pennsylvania, Ohio and Nevada. I denied the transfer request in two cases because they did not meet the subject matter eligibility criteria. Parties in several of the cases are already engaged in productive settlement discussions as a result of an early mediation track. Chancellor Lyle granted expedited discovery in many of the cases after narrowing some of the discovery requests. She has already conducted approximately 10 hearings, entered over 40 Memoranda and Orders, and written many substantive rulings. She is very respectful of lawyers’ time and does not require them to come to court unnecessarily. For instance, she has conducted a hearing by telephone involving out-of-state counsel to expedite initial discovery and rule on a protective order, and has had speedy case litigation plan conferences to fast-track disposition of dispositive issues.

Q. How can I find out more about the Business Court?
A. You should visit the Business Court’s webpage, through the Administrative Office of the Courts web site at www.TNCourts.gov/bizcourt to obtain information about case eligibility, the steps required to transfer a case to the Business Court, and the forms required for transfer. In addition, Chancellor Lyle and I are speaking at CLE programs across the state this year. [Note: Learn more about the Tennessee Bar Association’s CLE at https://cle.tba.org/catalog/course/3419.]


  1. The court’s “Order Establishing the Davidson County Business Court Pilot Project” was promulgated in accordance with Tenn. Code Ann. section 16-3-502 and Supreme Court Rule 11(1).
  2. The concept of a specialized court to handle business disputes is not a new idea. Beyond the well-recognized Delaware Chancery Court, which is commonly the aspirational model for business litigation, states began establishing specialized business courts as early as 1993. To date, more than half of the states in the country have some form of specialized business court or complex litigation docket. Internationally, the business court model has enjoyed similar growth.
  3. See Bill Haslam, Governor of Tennessee, Videotaped Comments on the Tennessee Business Court provided for the April 23, 2015, Business Court Launch Event, available at http://www.tsc.state.tn.us/bizcourt. “It is a good day for Tennessee businesses with the establishment of the state’s very first business court. … [T]his court will help us in business retention and economic development.”
  4. See Beth Harwell, Speaker of the Tennessee House of Representatives, Videotaped Comments on the Tennessee Business Court provided for the April 23, 2015 Business Court Launch Event, available at http://www.tsc.state.tn.us/bizcourt. “[T]his will only add to our business-friendly environment. Business litigation can be complex and this can be a way for Tennesseans to compete with other states when it comes to attracting businesses and jobs to our state. … I’m excited to see the positive impact it will have.”
  5. On April 23, 2015, the Tennessee Chamber of Commerce and Industry, the Tennessee Business Roundtable, the Nashville Area Chamber of Commerce, and the Tennessee Business Partnership hosted a forum in Nashville. It was well attended by business leaders and lawyers. Chief Justice Lee and Chancellor Lyle discussed the operations of the Business Court and answered questions from the audience.
  6. See Lee Applebaum, “Future Trends in State Courts: The Steady Growth of Business Courts,” National Center for State Courts (2011), http://www.ncsc.org/sitecore/content/microsites/future-trends-2011/home/Specialized-Courts-Services/3-3-The-Steady-Growth-of-Business-Courts.aspx; Mitchell L. Bach & Lee Applebaum, “A History of the Creation and Jurisdiction of Business Courts in the Last Decade,” 60 Business Law 147, 227 (2004).
  7. Order of The Supreme Court of Tennessee Establishing The Davidson County Business Court Pilot Project, No. ADM2015-00467 (March 16, 2015).
  8. See, e.g., John F. Coyle, “Business Courts and Interstate Competition,” 53 William & Mary Law Review 1915, 1976 (2012) (citing surveys conducted in Philadelphia and Massachusetts that show very high levels of satisfaction among attorneys who had used the business court); Hon. John C. Foster & Richard L. Hurford, “ADR Within ADR: Business Courts as Laboratories for Litigation Process Improvement,” 94 Jan Michigan Bar Journal 20, 21 (2015) (“From Nov. 1, 2011, through Nov. 26, 2014, 420 business cases were filed [in Michigan’s Macomb County Business Court] and 231 have been closed. The average age of closed cases was 172 days.”); see also Hon. Jonathan Lippman, 2 N.Y. Prac., Com. Litig. in New York State Courts § 1:7 (3d ed.).
  9. The Business Court has prepared a Guide to the Business Court that details some of the procedures that the Business Court will use to provide meaningful, time-saving, and cost-effective resolution of business litigation. This is available on the Administrative Office of the Court’s Business Court web site, found at www.TNCourts.gov/bizcourt.

Justice Sharon G. Lee and Justin Seamon

SHARON G. LEE was appointed to the Tennessee Supreme Court in 2008 and re-elected in 2010 and 2014. In 2014, she was elected chief justice. From 2004 to 2008, she served on the Tennessee Court of Appeals. Before her appointment to the bench, Justice Lee practiced law in her hometown of Madisonville from 1978 to 2004. She represented individuals, businesses and municipalities, and served as a municipal judge, mediator, city attorney and county attorney. Lee is an honors graduate of the University of Tennessee College of Business and the University of Tennessee College of Law.

JUSTIN SEAMON has served as the staff attorney for Chancellor Ellen Hobbs Lyle since graduating from law school in May 2010. In that role, he provides assistance with legal research, case management, legal analysis, and drafting court decisions. He has also served as the assistant to the Davidson County jury coordinator since 2011. A Nashville native, in May 2010 Seamon earned his law degree from Thomas Goode Jones School of Law at Faulkner University in Montgomery, Alabama, where he graduated summa cum laude, second in his class, and served as articles editor for the Faulkner Law Review.