Bill Updates That Will Make Your Head Spin - Weekly Wrap-Up.

by Womble Bond Dickinson

Patent Trolling

The contents of HB 1032 - Patent Trolling have been added to SB 648 - NC Commerce Protection Act and sent to the Senate for a concurrence vote. The new SB 648 now addresses contracts between the NC Attorney General and private lawyers as well as patent trolling. View the bill here: HB 1032 remains "parked" in the Senate Rules Committee.

Mechanics Liens

Remember that HB 1101 and 1102 made changes to the Mechanics Liens statute. In Senate committee this week HB 1101 which provided protections to those making improvements on leased real property was amended to deal with child custody and deploying military parents. The new bill is here: HB 1102 dealing with lien agent notice remains unchanged. You can see the bill here:

New Public Private Partnership to handle State's Economic Development

HB 1031 is now law! The bill that moves many former Department of Commerce functions related to economic development and attracting new jobs to the state has been moved to an affiliated PPP requiring 8 new regional zones to provide substantial match money with plenty of oversight from Raleigh. The enacted bill is here:

Statute of Repose

Shortly after the NC Supreme Court ruled in CTS Corp. v. Waldburger, a case dealing with liability in groundwater contamination, a House Judiciary Committee took SB 574, dealing with bail bonds, and replaced the contents with a proposed law change on the Statute of Repose. The new version appeared in committee as a Proposed Committee Substitute which is technically an amendment and was adopted as such. The Committee Substitute, which passed the House without dissent, and which the Senate unanimously concurred in, rewrites G.S. 130A-26.3, regarding time period limitations for groundwater contamination legal actions and provides that the 10-year period set out in GS 1-52(a)(16) will not bar an action for personal injury or property damage caused by the consumption, exposure, or use of groundwater contaminated by a hazardous substance. The claimant's exposure to the contaminated groundwater must have occurred on or before June 19, 2013. That bill was enacted into law last Friday. This week that new law (Session Law 2014-17) was modified by SB 58 - Modify Statute of Repose (formerly a bill about shallow inlet dredging) which makes 3 clarifying changes to the Statute of Repose. SB 58 has been ratified and awaits the Governor's signature.

The new law on Statute of Repose is here:
The bill clarifying the new law is here:

Business Court Modernization

This week we saw committee action of SB 853 - Business Court Modernization. A House Judiciary Committee unveiled a new version of the bill that was prepared without input from bill sponsors Barringer and Rucho. This is common treatment of a senate bill in a house committee or vice versa; it is also a sign that the session is winding down.

Senator Barringer presented the bill and listed the ever-growing list of the interested parties who have now weighed in, this time adding to the list Mack Sperling whose business litigation blog is well-regarded and can be seen here: Barringer was gracious as she learned the new version of the bill had stripped out two sections of her bill that the Senate supports: the 3-judge panel for constitutional challenges and the Delaware-style business incorporation language, leaving only the section dealing specifically with the state's Business Court with some small technical and conforming changes.

Mildred Spearmen from the Administrative Office of the Courts addressed concerns to the committee including an unaddressed potential cost to the Judicial Branch, technical concerns about how some cases are transferred, and what happens if Business Court designation triggers are not met at the filing of the case.

The committee is scheduled to review the bill again next Monday. The committee PCS was not adopted and so is not official but you can get a peek here:

Amending the Practice of Law
(Shout out to Womble's Scott Schaff for highlighting this bill this week.)
On Thursday the Senate Judiciary I committee approved a bill that amends Chapter 84-2.1 regarding the practive of law. Chairman Goolsby proposed the new language which creates a safe haven for Legal Zoom and like companies by removing what they do from the definition of the "practice of law". 
What happened and how:  In 2013, House Bill 663 - Commodities Producer Protection - was introduced, passed the House and was referred to the Senate Judiciary I Committee. Until yesterday its last action was May 20, 2013. Thursday a PCS was rolled out that replaced the contents of the bill with an amended definition of the "practice of law" designed to provide a safe haven for companies like Legal Zoom to provide what we consider legal service in NC. As of Friday, the new Legal Zoom version of the bill still has not been "reported out of the committee" or added to the Senate's calendar for Monday. However, both of these things can happen next Monday evening if the Senate Leadership wants it.
What is the bill now:  The new bill was summarized as: “The PCS completely rewrites the bill and would exempt from the statutory definition of “practice law” certain self-help legal written materials bearing a disclaimer that they are not a substitute for the advice of an attorney."
What will happen next:  We predict we have a week or so left in this session, and things (and people) are getting a bit unpredictable and illogical so we checked in with some of the lawyers who serve in the House Leadership.  At this point we haven't found a single one who expects they will concur with the Senate changes to the bill. Without the House concurrence the bill cannot be enacted.  The season of legislative hostage-taking is upon us so this may become trade bait and thus is still a danger. We are making additional calls on this bill today and have nothing new to scare you with.


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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