Business Court Hearing, March 26, 1997
Testimony of William H. Clark Jr.
before the Senate Judiciary Committee
Senate Bill 570
March 26, 1997

My name is William H. Clark, Jr. I am a shareholder in the law firm of Klett Lieber Rooney & Schorling, P.C. where I practice in the area of corporate law in the Firm's Pittsburgh office. For a number of years I have served as Legislative Counsel to The Commerce Court Coalition and, in that capacity, I was responsible for drafting Senate Bill 570 which is being considered at today's hearing.

I am submitting written testimony today for the purpose of bringing before the Committee the positions of three groups that are not represented by other witnesses at this hearing. As described below, I have been personally involved with each group and thus have direct knowledge of the deliberations that have led them to their positions on the issue of establishing a business court in Pennsylvania. I should emphasize, however, that I am not formally appearing as an authorized representative of any of the three groups. My purpose is simply to make sure that the Committee is aware of the public position that each group has taken.

Greater Pittsburgh Chamber of Commerce

Appendix 1 is a policy statement that was adopted by the Greater Pittsburgh Chamber of Commerce a few years ago when the proposed Pennsylvania business court was known as the Court of Special Chancery. I am a member of the Governmental Affairs Steering Committee of the Greater Pittsburgh Chamber of Commerce which prepared the policy statement. The policy statement was formally adopted by the Board of Directors of the Greater Pittsburgh Chamber of Commerce which is made up of 45 leaders of the Pittsburgh business community.

As you will see, the policy statement supports the creation of a business court which the Greater Pittsburgh Chamber of Commerce believes will provide Pennsylvania with another asset with which to attract business development, expansion and relocation.

Corporation Bureau Advisory Committee

Appendix 2 is a report by the Pennsylvania Corporation Bureau Advisory Committee Subcommittee on the Commerce Court dated April 29, 1996. The Corporation Bureau Advisory Committee is established by 15 Pa.C.S. §l55(c) and is charged with making recommendations to the Governor with respect to the budget of the Corporation Bureau and may also consult with the Department of State regarding the administration of the Pennsylvania corporation laws. The members of the Advisory Committee are appointed by the Secretary of the Commonwealth.

A special subcommittee (the Subcommittee) was established on November 3, 1995 at a meeting of the full Advisory Committee to study 1994 Senate Bill 616 which was the prior version of current Senate Bill 570. I am the Chairman of the Advisory Committee, but I asked not to be appointed to the Subcommittee so that it could report independently to the Secretary of the Commonwealth free of what might be perceived as the bias of a person who was already a supporter of establishing a business court.

The report of the Subcommittee concludes as follows:

The Subcommittee strongly supports the concept of establishing a Commerce Court within the Commonwealth. The establishment of such a Court would provide needed judicial expertise with respect to Corporate litigation and serve as yet another inducement for corporations to locate within Pennsylvania.

A Commerce Court which could provide well reasoned precedential legal opinions resolving corporate legal questions, coupled with Pennsylvania's modern, up to date corporation law and a streamlined efficient Corporation Bureau to file corporate documents would create a business climate which would benefit all citizens and businesses of the Commonwealth.

When you have the opportunity to review the report of the Subcommittee, you will see that the Subcommittee makes a number of specific recommendations for changes in 1994 Senate Bill 616. Those recommendations are reflected in Senate Bill 570. There is one additional recommendation that I am aware of from the legal staff of the Department of State that has not yet been included in Senate Bill 570. The Commerce Court is intended to be self-funded, with the bulk of its cost being covered by a surcharge on the fees charged by the Corporation Bureau. The current text of the legislation would make that surcharge applicable immediately upon enactment of Senate Bill 570, which the Department of State is concerned would create administrative problems. I believe the Department's concern should be addressed by an amendment to the bill which will delay the imposition of the surcharge until 90 days after enactment.

ABA Business Law Section

Appendix 3 is a report of the Ad Hoc Committee on Business Courts of the Business Law Section of the American Bar Association dated January 23, 1997. I am a member of that committee and will become its chairman next month.

The report began as a project to survey the actions taken in the various states around the country to create business courts. The report subsequently became a recommendation that has been adopted by the ABA Business Law Section encouraging the creation of specialized court divisions to handle business cases. Among other things, you will find that the report includes a detailed discussion of the issue of specialization and why it is necessary for society to move in that direction.

I would like to close with one observation from my participation on the ABA Business Courts Committee. In my discussions with people involved in creating business courts in other states, it is clear that the initial publicity several years ago about the effort in Pennsylvania to create a business court is what led those other states to begin similar efforts. Pennsylvania can be justifiably proud of having begun a national trend to improve our country's judicial system. The remaining task for Pennsylvania is to follow through on its original insight and to create a business court for its own citizens. The other states that have created business courts have so far done so through administrative action and rulemaking within their court systems. Pennsylvania still has the opportunity to be the first state to create a business court by legislation. I urge the Committee to act quickly to seize that opportunity while it is still available. Doing so will send a powerful message that Pennsylvania is committed to meeting the needs of business in a responsible manner and to fostering the growth of our economy.