A Primer on the North Carolina Business Court

1. A Primer on the North Carolina Business Court Presented by: Fred Wood, Jon Heyl and Heather White Smith Moore Leatherwood LLP 525 N. Tryon St., Suite 1400 Charlotte, NC 28202 (704) 384-2600

2. History and Philosophy • Why have a Business Court? • In April 1994, Governor Hunt established the North Carolina Commission on Business Laws and Economy (“Commission”) • Mission: recommend “any needed changes in existing statutes and regulations which affect the operation of businesses in North Carolina.” • In January 1995, the Commission issued a report recommending that North Carolina establish a business court.

3. History and Philosophy • Why have a Business Court? • Look at Delaware • “Many national corporations incorporate in the state of Delaware because of that state’s Chancery Court which provides a high level of judicial expertise on corporate law issues.” Rule 2.2. cmt. • Business Development • Business entities want to operate in a state having a “substantial body of corporate law that provides predictability for business decision making.” Id.

4. History and Philosophy • Formed in 1995. • Judge Ben F. Tennille was appointed as the first and only judge at that time. • The first court was located in Greensboro, NC. • In 2005, additional judges and courts were added. • Raleigh – Judge John R. Jolly, Jr. • Charlotte – Judge Albert Diaz • Current sitting judges: • Raleigh – Judge John R. Jolly, Jr. • Greensboro – Judge James L. Gale • Charlotte – Judge Calvin E. Murphy

5. Why You Want Your Cases Heard in the North Carolina Business Court • Experienced judges with expertise in complex business litigation. • Prior private practice experience • Only hear “complex business cases” unlike other state court judges. • Well-reasoned and thoughtful decisions. • Each judge has two law clerks. • Judges are required to write opinions. • Same judge throughout life of case.

6. Why You Want Your Cases Heard in the North Carolina Business Court • Electronic filing and case management system. • Cost savings. • Easy access – similar to federal court system. • Technology enhanced courtrooms. • Local rules are modeled after federal rules. • Practice and procedure is more analogous to federal court, not North Carolina state court. • Case management procedures – provide for more efficient and less costly disposition of cases.

7. What types of cases qualify for the North Carolina Business Court? • N.C. Gen. Stat. § 7A-45.4 • (1) law governing corporations, limited liability companies, partnerships, limited liability partnerships • (2) securities law • (3) antitrust law • (4) state trademark and unfair competition law • (5) intellectual property law • (6) the Internet, electronic commerce, biotechnology • (7) certain areas of tax law

8. What types of cases qualify for the North Carolina Business Court? • Rules 2.1 and 2.2 • If you case does not qualify under N.C. Gen. Stat. § 7A-45.4, you may still get in to the Business Court based on Rules 2.1 and 2.2. • Must make motion in county of venue and receive recommendation from senior resident superior court judge or presiding judge. • Recommendation must be approved by Chief Justice and Administrative Office of the Courts. • Currently, approval is rarely granted.

9. How to get cases in to the North Carolina Business Court • Similar to federal court removal • File a “notice of designation” (i.e., similar to a notice of removal). • Plaintiffs: Must file contemporaneously with the Complaint. • Defendants: Must file within 30 days of service of the Complaint. • Amended Pleadings: May allow you to remove case to Business Court at a later date if the amendment “substantially alters the nature of the action.” • Filing fee: $1,000.

10. Recent Notable Decisions from the North Carolina Business Court • Blythe v. Bell • Elliot v. KB Home • Outdoor Lighting • Associated Packing v. Jackson Paper • Tong v. Dunn

11. Questions