Structure of Civil Courts

Generally, Michigan trial courts consist of probate courts, district courts, circuit courts, and the Court of Claims. Probate courts determine guardian and conservatorship matters, in addition to the administration of trusts and estates, among other functions. Civil matters in district court are largely limited to traffic matters, landlord-tenant cases, and other cases where damages are relatively small (discussed in more detail below).

Circuit courts have the broadest powers. Mich Const 1963 art 6, §1. Circuit courts are, by and large, defined by county, except in counties with exceptionally small populations (which, together with other small counties, compromise a single circuit). Then there is the Court of Claims—a trial court that shares courtrooms with the Michigan Court of Appeals—which has exclusive jurisdiction over claims brought against the State itself, or any of its officers, departments, or other “arms of the state.” MCL 600.6419.

Basis of Jurisdiction

District courts have exclusive jurisdiction over matters in which the amount in controversy is up to $25,000, MCL 600.8301(1), unless the amount in controversy is $6,000 or less, in which case the matter is assigned to the small claims division of the district court (amount scheduled to increase over time), MCL 600.8401(c). Circuit courts have jurisdiction over matters in which the claimant seeks damages in excess of $25,000. MCL 600.605. See also MCL 600.601.

Commercial Courts

Like many states, Michigan has specialized “business courts” (in reality, they’re just a special docket, not necessarily a separate “court”) under the Revised Judicature Act of 1961, MCL 600.101 et seq. Every circuit with at least three circuit judges is required to have a business court. MCL 600.8033(1). So, exceptionally small circuits do not have these specialized dockets. Their purpose is to “(a) Establish judicial structures that will help all court users by improving the efficiency of the courts[;] (b) Allow business or commercial disputes to be resolved with the expertise, technology, and efficiency required by the information age economy[; and] (c) Enhance the accuracy, consistency, and predictability of decisions in business and commercial cases.” MCL 600.8033(3).

In particular, Michigan business courts have “jurisdiction over business and commercial disputes in which equitable or declaratory relief is sought.” MCL 600.8035(1). “Business or commercial dispute” means: (i) an action in which all of the parties are business enterprises, unless the only claims asserted are expressly excluded under the statute (a few of them are noted below); (ii) An action in which one or more of the parties is a business enterprise, the parties have a significant relationship with the business enterprise, and the claims arise out of those relationships; and (iii) An action in which one of the parties is a nonprofit organization, and the claims arise out of that party’s organizational structure, governance, or finances. MCL 600.8031(c).

The statue provides some examples of “business or commercial disputes,” like “[t]hose involving the sale, merger, purchase, combination, dissolution, liquidation, organizational structure, governance, or finances of a business enterprise,” MCL 600.8031(2)(a), and “[t]hose arising out of commercial transactions, including commercial bank transactions,” MCL 600.8031(2)(e). And as noted, the statute excludes matters from the business docket that otherwise constitute “business or commercial disputes” when the only claims raised are, for example, personal injury claims, MCL 600.8031(3)(a), or product liability claims brought by individual plaintiffs, MCL 600.8031(3)(b).
If all or part of an action consists of “a business or commercial dispute” as defined in the statute and without exception, it must be assigned to and maintained in the business docket if in a circuit that has one. MCL 600.8035(3).

Mediation

In Michigan, “[a]ll civil cases are subject to alternative dispute resolution processes unless otherwise provided by statute or court rule.” MCR 2.410(A)(1). “[A]lternative dispute resolution (ADR) means any process designed to resolve a legal dispute in the place of court adjudication, and includes . . . mediation under MCR 2.411 . . . .” MCR 2.410(A)(2). “Mediation” under MCR 2.411 “is a process in which a neutral third party facilitates communication between parties, assists in identifying issues, and helps explore solutions to promote a mutually acceptable settlement. A mediator has no authoritative decision-making power.”