The Montana State Capitol in Helena on Wednesday, April 26, 2023. (Photo by Mike Clark for the Daily Montanan)
Republican lawmakers plan to bring a bill to the 2025 legislative session that would create a new court in Montana they said is designed to boost the state’s economic competitiveness and take up constitutional questions.
Sen. Tom McGillvray, R-Billings, brought up the draft bill creating a Court of Chancery to the Senate Select Committee on Judicial Oversight and Reform on Thursday as a way to expedite decisions in three key areas — constitutional law, business disputes, and land use.
The proposal was among more than two dozen draft bills discussed by the Republican-led committee.
“Other states who have used chancery courts or business courts, primarily looking at the Delaware Court of Chancery, increase the competitiveness of their business climate, and that’s what we’re looking to do with this court,” McGillvray said. “Primarily we’re looking to increase the economic competitiveness of Montana and to address pressing issues regarding land use, constitutional law and so forth.”
The Montana Constitution allows for the legislature to create specialized courts, such as a water court or business court. The chancery court would hear and resolve suits seeking equitable or declaratory relief in all three focal areas, as well as business suits seeking monetary damages in excess of $80,000.
The Delaware Court of Chancery specializes in corporate law and is a reason that many public companies — including a majority of the Fortune 500 —are incorporated in the state. A similar court was formed in Wyoming in 2021 to expedite the resolution of business, commercial and trust cases.
McGillvray pointed to the Wyoming court, which has a strict timeframe for resolving business cases, as an example to follow.
“Talking to attorneys, this would be a huge asset to them, because oftentimes you’ll see business cases going on for years, and that is just not conducive and helpful to the business climate of Montana,” he said.
“As you know, a case involving children, that’s going to be put to the top of the list of any district court, as it should be, and the district court is struggling to address the criminal cases that they have on their dockets. So this would create a court that can swiftly and decisively, by the rule of law, address business cases.”
However, the first listed area of jurisdiction for the new Montana court is not business disputes, but rather the “alleged unconstitutionality” of a law, a referendum, or a citizen initiative, shifting the burden of equitable or declaratory relief away from the Montana Supreme Court.
The second area of jurisdiction would be over land use, except for suits that are based in local zoning regulations. The third area of jurisdiction would be almost any manner of business-related suits, such as shareholder derivative actions, mergers, sales, breach of contract, underwriting and more.
The Senate select committee — on which Senate and House Democrats are not participating because they believe the committee’s formation and objectives amount to an attack on the judiciary— was formed earlier this year after several court decisions came down against the state’s GOP administration and Republican lawmakers.
The new chancery court would comprise three judges nominated by the governor and approved by the state Senate, and judges would have the same qualifications required by the Constitution of state supreme court judges. Selected judges must have expertise in either constitutional law, land use law or business law. As proposed, chancery court judge salaries would be 20% higher than those of a Montana Supreme Court associate judge.
“That may raise some eyebrows, but the reason we’re paying these judges well is because typically, highly qualified attorneys in business law are extremely well compensated, and we want to be able to attract high quality applicants to this position,” McGillvray said. The draft bill did not include an appropriations estimate.
The draft bill indicates that matters before the court would be heard initially by a single judge holding trials in Billings, Great Falls or Missoula, with decisions appealable to the Montana Supreme Court.
The committee unanimously passed the bill, which Sen. McGillvray will carry in the legislature. His caucus picked him earlier this week to be Senate Majority Leader for the session. A related bill the committee passed would remove the Montana Supreme Court’s original jurisdiction for ballot reviews to either district courts or the newly created chancery court.
The bar for impeachment
The committee has already discussed most of the more than two dozen bills they have either considered or drafted ahead of the start of the 2025 session in January, but a few newer drafts warranted additional discussion.
Another bill introduced by McGillvray was requested by the committee at its last meeting and would revise the standards of impeachment for elected officials, department heads and judges.
Montana statute currently states impeachable offenses include “felonies and misdemeanors or malfeasance in office,” which McGillvray said is outdated language.
“This language is hundreds of years old, and sometimes it gets confusing with current and contemporary language,” he told the committee while presenting on the one-page bill, whichwas drafted with input from the committee’s legal consultants. “So as often the case, legislatures need to update their code just to make it more contemporary, and understandable and enforceable.”
The draft language removes misdemeanors and malfeasance and adds in “corruption, incompetence, negligence, willful neglect of duty, oppressive use of one’s office, or misconduct in one’s office.”
“I think it would behoove us to update our definition, and these are definitely more broad,” McGillvray said. “But we have to keep in mind it doesn’t give the legislature willy nilly the ability to impeach anyone, because we still need a supermajority to impeach.”
Members of the committee discussed whether each of those impeachable offenses is already defined in code, with Sen. Steve Fitzpatrick, R-Great Falls, stating that some of the language, such as negligence, creates a “low bar,” compared to more specific terms like “gross negligence.” The bill draft passed unanimously, though Fitzpatrick, a lawyer who will be in the House next session, said it would likely need some rewording as it goes through the legislative process.
Another new bill draft the committee passed would exempt any elected official who is also a lawyer from disciplinary action by the judicial branch. This bill broadens a bill the committee discussed during its October meeting that applied the same exemption specifically to the Attorney General, one day after a Commission on Practice panel recommended Republican Attorney General Austin Knudsen have his law licenses suspended for 90 days due to violations of attorney conduct rules.
Other draft bills in progress, or which have already been drafted and approved by the committee, include bills to give more power of review to the legislature when considering ballot initiatives; one giving legislative leadership power to vacate writs of mandamus; one that would have the courts give deference to any legislative acts; making judicial elections partisan; auditing the State Bar and Office of Disciplinary Counsel; making changes to the Judicial Standards Commission, which oversees conduct for judges in the state; and revising rules around legislative subpoena power.