MARYLAND BUSINESS AND TECHNOLOGY COURT TASK FORCE REPORT TABLE OF CONTENTS Page I. EXECUTIVE SUMMARY .............................................................. 1 II. BACKGROUND ............................................................................... 1 III. HOUSE BILL 15 (Chapter 10 of the Maryland Acts of 2000).......... 2 IV. INPUT FROM THE BUSINESS AND LEGAL COMMUNITIES .. 4 V. EXPERIENCE OF OTHER STATES ............................................... 5 VI. FINDINGS ......................................................................................... 5 VII. EXPEDITED APPEALS ................................................................... 12 VIII. ADR (Alternative Dispute Resolution).............................................. 14 IX. ELECTRONIC FILING..................................................................... 15 X. CONCLUSION.................................................................................. 17 APPENDIX A (Input From The Maryland Business And Legal Communities) ........................................................ 19 APPENDIX B (Experience Of Other States)................................................. 23 APPENDIX C (List of Members).................................................................. 26 1316871 i MARYLAND BUSINESS AND TECHNOLOGY COURT TASK FORCE REPORT Created by House Bill 15 Chapter 10 of the Maryland Acts of 2000 Wilbur D. Preston, Jr. Chairman Hon. Steven I. Platt Vice-Chairman Robert D. Kalinoski Hon. Charles B. Day Susan M. Souder James I. Keane Wesley D. Blakeslee Michael Hickman Ava Lias-Booker Alan R. Duncan Dr. Nariman Farvardin Christopher R. McCleary John C. Weiss, III Sen. Leo Green Sen. Leonard Teitelbaum Hon. John C. Eldridge Del. Anthony G. Brown Hon. Marielsa A. Bernard Del. John A. Hurson Steven E. Tiller Reporter Eric G. Orlinsky Consultant 1 BUSINESS AND TECHNOLOGY PROGRAM TASK FORCE REPORT I. EXECUTIVE SUMMARY This is a report of the Maryland Business and Technology Court Task Force created by the General Assembly to consider the feasibility of establishing a specialized court function within Maryland’s Circuit Courts to adjudicate business and technology disputes. This blue-ribbon task force included appointees from the Maryland Judiciary, Maryland’s House and Senate, the Maryland State Bar Association and members of the Maryland business and academic communities. After hearing from the business community, judges, legislators, lawyers and representatives of other “business courts,” the Task Force recommends establishing a statewide program with specially trained judges and mediators to resolve substantial disputes affecting business entities, including the unique and specialized issues involving technology. The Task Force considered a separate court division within only certain counties, but concluded that creating local specialized courts was not needed or desired by many judges and lawyers, and would unfairly discriminate against business entities located in other areas of the State. The Task Force reviewed different models of “business courts” implemented in other jurisdictions. Recognizing the effectiveness of Maryland’s Differentiated Case Management (“DCM”) system, the Task Force concluded that a “program” based, in part, on different models of business courts in other states would best take advantage of the current DCM system, while providing a unique and specialized forum for handling business and technology disputes. Establishing a business and technology dispute management program like the one detailed in this report provides Maryland with a unique opportunity to substantially improve its perception among the business and technology communities as a preferred place to do business. In the competitive national market for business, establishment of such a program will serve to increase Maryland’s reputation as a place where disputes involving substantial business interests are effectively and efficiently resolved, thus increasing Maryland’s reputation as a favorable forum.1 II. BACKGROUND Over the past decade, the Internet has grown at a tremendous rate. At the start of the Clinton administration, there were less than a dozen sites on the worldwide web. This number currently totals in the hundreds of millions. In light of the significant advances brought about by not only the Internet, but also the bioscience, aerospace, and information technology industries, to name only a few, the business environment is 1 Although providing great insight and perspective to the Task Force during its deliberations, Judge John Eldridge, Senior Judge of Maryland’s Court of Appeals, respectfully abstained from participating in the recommendations and findings included in this report. Judge Eldridge believes that given his position as a Judge on the Court of Appeals, and the likely event that the Court of Appeals will be required to examine the adoption of rules to effect the recommendations contained herein, it is proper for him to abstain from inclusion in the report. 1 changing at light speed. Business models that couldn’t have even been imagined a few years ago are now commonplace. These technological advancements have, however, created interesting dilemmas for all three branches of federal and state government. In the legislative arena, elected officials must have a keen awareness of the significance of technological trends, as well as a healthy regard for the limits of their ability to control them. The executive branch is confronted with a similar dilemma. Regulations may prove necessary to protect the public and prevent the improper use of technology, while at the same time, efforts must be made to limit the breadth of such regulations so as not to chill creative thought. The role of the judiciary is even more problematic since its role is by design more re- active than pro-active. Judges will be confronted with new and unique issues never before seen as a result of emerging technology and new business models. Judicial decisions will have to look forward to the potential impact of technology, as well as back to established legal precedent. The Judiciary can nevertheless take a leadership role in the development of new rules and enhancements in its functions to adapt to these new challenges. Just as our judicial system created the state wide District Court system and the nationally regarded DCM system, the pressure to change offers the Judiciary an opportunity to forge its own adaptive institutions. Maryland is poised at the forefront of the technological revolution. Already, Maryland has one of the largest concentration of bioscience and aerospace companies in the country. Maryland is first in the nation of percentage of technological workers in the work force and can also claim top honors among states receiving research and development awards from the National Institutes of Health. Today, information technology is Maryland’s largest economic impact cluster. Maryland’s information technology industry added over eighteen thousand new technology jobs between 1993 and 1998 bringing the total employment attributable to the information technology industry to well over 100,000. As of 1998, information technology firms employed 56 of every 1,000 private sector workers in the State, and it is believed that this number has significantly increased in the last two years. Maryland also has one of the highest percentage of on-line households in the country with forty-six percent of Maryland homes connected to the Internet. Despite these impressive statistics, Maryland is still generally perceived by the business community as anti-business. Whether accurate or not, such perception is often viewed as reality. In an effort to change this perception, Maryland’s General Assembly, as part of an overall plan to encourage technology companies to locate in the State (which includes, among other things, adoption of the Uniform Computer Information Transactions Act and the Uniform Electronic Transaction Act), passed House Bill 15 establishing this Task Force to consider the feasibility of the establishment of a specialized court function to effectively and efficiently administer business and technology disputes. III. HOUSE BILL 15 (Chapter 10 of the Maryland Acts of 2000) The General Assembly expressly stated its intent in passing House Bill 15 as follows: 2 It is the intent of the General Assembly that: (1) business and technology matters be treated efficiently and effectively in the judicial system; and (2) the Chief Judge of the Court of Appeals consider the feasibility of the establishment of a business and technology court division in Maryland, based on a study to be completed by the Business and Technology Division Task Force, in order to enable the circuit courts to handle business and technology matters in the most coordinated, efficient, and responsive manner, and to afford convenient access to lawyers and litigants involved in business and technology matters. In establishing the Task Force, the General Assembly mandated that it solicit input from both the Maryland business and legal communities, commence a review of the experience of other states in creating so called business courts, and prepare a report on its findings and recommendations to the Court of Appeals, the Governor, The Lieutenant Governor, the President of the Senate, the Speaker of the House of Delegates, the House Judiciary Committee, the Senate Judicial Proceedings Committee, and the General Assembly. The General Assembly required this report to include a consideration of all operational