Mark Your Calendar For October 1st For Changes To The Business Court

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If you litigate cases in the NC Business Court, mark your calendar for October 1st.  That's when the General Assembly's "modernization" of the Business Court is due to become effective.  The bill containing these changes was signed into law by Governor McCrory last week

I wrote about the proposed bill back in May, and you can look back at that post as most of the changes proposed in the initial version of the bill have made it through to the approved version.

There were some changes to the bill before it was passed, and here are a few new wrinkles:

Broadened Scope Of Appeals To The NC Supreme Court

In the original bill, the General Assembly authorized a direct appeal to the NC Supreme Court from any final judgment of the Business Court.

The enacted law broadens the scope of Business Court rulings that can be appealed to the Supreme Court, allowing appeals from an interlocutory order from the Business Court that does one of the following:

a.     Affects a substantial right.
b.     In effect determines the action and prevents a judgment from which an appeal   might be taken.
c.      Discontinues the action.
d.     Grants or refuses a new trial.

Revised G.S. §7A-27.

I'm worried about the Supreme Court getting bogged down in deciding whether an interlocutory order really "affects a substantial right."  The language regarding interlocutory appeals is identical to the language governing interlocutory appeals to the NC Court of Appeals. It seems like half of the decisions from the Court of Appeals go on for pages on that issue before deciding that the appeal before it doesn't "affect a substantial right" and should therefore be remanded to the trial court.  The Supreme Court may face the same quicksand. 

But even so, this change will provoke more business-related decisions from the NC Supreme Court.  That's certainly a good thing.  I'm at a loss to remember the last one -- it might be Meiselman v. Meiselman, 307 S.E.2d 551, 309 N.C. 279 (1983), decided over thirty years ago.

More Written Opinions From The Business Court

Under the enacted law, the Business Court Judges will be required to issue a written opinion granting or denying a motion under North Carolina Rules of Civil Procedure 12, 56, 59, or 60, "or any order finally disposing of a complex business case"  except for orders approving a settlement  or a jury verdict.  New G.S. §7A-45.3.

That's a significant expansion of the Court's opinion writing obligation.  Currently, its only obligation to issue a written opinion is "upon final disposition of the case" per Rule 2.1(b) of the North Carolina General Rules of Practice.

And the Court currently issues many one or two paragraph orders denying motions to dismiss (per Rule 12) or for summary judgment (per Rule 56).  Will those brief rulings constitute "written opinions" denying those motions, or will the Court need to engage in detailed discussion about why it is denying a motion?

Stay of Cases That Should Be, But Aren't Designated To The Business Court

The new law requires in G.S. §75A-4(b) that certain types of cases must be designated to the Business Court.  Briefly, these are contested tax cases on appeal from the Office of Administrative Hearings, many cases falling within the Court's jurisdiction in which the amount in controversy is at least $5 million, and cases involving regulation of pole attachments pursuant to G.S. §62-350.

On that $5 million threshold, the party drafting the pleading is obligated under an amendment to Rule 8 of the North Carolina Rules of Civil Procedure contained in the passed bill to state whether relief is demanded in that amount.

If the party filing a case which the statute requires be designated to the Business Court doesn't do so, the Superior Court in the county where the case was filed must stay the case until the party who was required to designate it has done so.  The original  version of the bill allowed a dismissal without prejudice as an alternative.  New G.S. §7A-45.4(g).

Designation Fee Now Recoverable As A Cost

It's expensive to designate a case to the Business Court.  The Legislature raised the fee to $1,000 in September 2009, and the new law raises the fee by $100, to $1100.  New G.S. §7A-305(a)(2)

But the good news now for parties who designate a case, and then prevail, is that the designation fee will now be a recoverable element of costs.  That's in new G.S. §7A-305(d)(12).  This change was lacking in the original version of the bill.

Topics:  Business Court Division, Rules of Civil Procedure

Published In: Civil Procedure Updates

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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