Can You Get A Ruling From A Superior Court Judge After Your Case Is Designated To The Business Court?

by Brooks Pierce
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If you've been reading this blog for a while, you know that once a case is in the Business Court, it is in there forever, even if the issues that justified it being there in the first place are subsequently resolved. 

But when does the Court's jurisdiction begin?  You might think it is when the Chief Justice of the Supreme Court signs an Order designating the case to the Court, especially if you look at G.S §75A-45.4(f), which says that:

Once a designation is filed under subsection (d) of this section, and after preliminary approval by the Chief Justice, a case shall be designated and administered a complex business case. All proceedings in the action shall be before the Business Court Judge to whom it has been assigned.  . .

The decision by Judge Bledsoe last week in 130 of Chatham, LLC v. Rutherford Electric Membership Corp., 2014 NCBC 35, got me thinking about this issue, though on the surface the case has nothing at all to do with when the jurisdiction of the Business Court attaches.

The issue in the case was whether Judge Bledsoe should stay an order entered in the case while the decision was being appealed. 

The stay requested by Defendant REMC was of an Order entered in Rutherford County Superior Court.  It required REMC to provide the Plaintiff with the list of its members, the minutes of its Board of Directors, records of its member actions, and its financial statements.

The chronology of events is important here.  The case was designated to the Business Court by the Chief Justice on July 15th.  The Order being appealed from was entered in Rutherford County after that, on July 28th, following a hearing on July 21st.  Business Court Chief Judge Jolly assigned the case to Judge Bledsoe after the hearing, but before the Rutherford County Judge's ruling, on July 23rd. 

Judge Bledsoe refused to enter a stay, ruling that entering a stay would "effectively put the Court in the position of overruling [the Rutherford County Judge's] Order in violation of North Carolina law."  Op. ¶24.

What the Opinion doesn't mention is why a Superior Court Judge had entered an Order after the case had been designated to the Business Court.  Business Court Rule 15.1, titled "All Motions to be Filed in Business Court," says that "[a]fter a case has been assigned or designated to the Business Court . . . parties shall seek rulings on all motions in the case from this Court, and not from Superior Court Judges or Clerks in the counties where cases originate." (emphasis added).

So why had a Rutherford County Superior Court Judge entered a ruling in a case that had been designated to the Business Court?  I found the answer to this riddle in some of the filings by the Plaintiff, which included emails to and from the Business Court about what was then the pending motion to obtain the documents.   It turned out that the determining factor was that although the case had been designated to the Business Court, it had not yet been assigned to a particular judge.

Given that the motion had some urgency to it, the Plaintiff went ahead to have it heard in Rutherford County notwithstanding the designation to the Business Court.  But it kept the Business Court informed of its intentions and got a go-ahead to proceed.

Judge Jolly's law clerk stated in an email that "[b]ecause the Business Court is not a court of jurisdiction, a hearing may go forward on the pending motions in the county court of origin if the hearing is needed before the case is able to be assigned to a Business Court judge."

Judge Bledsoe's law clerk then stated in an email "[b]ecause the pending matters before [the Rutherford County Superior Court Judge] . . . were heard and calendared for further hearing prior to the designation of the case to the Business Court, it is the policy of the Business Court that [the Rutherford County Superior Court Judge] can decide whether to go forward with the hearing and rule on the matters pending before him at the time of designation."

Then, Judge Jolly's Trial Court Coordinator weighed in.  She handles the assignment of designated cases to Business Court Judges. but she said that she had been out on vacation and that the case had not yet been assigned due to her absence.  She added "[p]lease keep in mind that Business Court designation is not jurisdictional.  Your hearing may still go forward in Rutherford County."

You can read those e-mails here.

So, that's the long answer to why a Superior Court Judge was entitled to proceed to make a ruling in a case which had already been designated to the Business Court.  But don't read this post and think that you can get away with proceeding in the Court for the county where the case originated after it has been designated to the Business Court.  Ordinarily, a Judge is assigned immediately, removing the gray area into which this case fell. 

And I wouldn't take emails from Court personnel as the gospel.  Judge Bledsoe didn't discuss at all the propriety of the Superior Court's ruling in what had become a Business Court case.

Given 130 Chatham, you  can kinda sorta still obtain an Order from the Superior Court from which you designated the case even after it has been designated to the Business Court by the Chief Justice.  At least until your case is assigned to a Business Court Judge.

I don't recommend trying to pull off this trick.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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