Yesterday’s blog post focused on how the Business Court Modernization Act only applies to “actions designated as mandatory complex business cases on or after” October 1, 2014.  See Session Law 2014-102.  As that post demonstrated, the timing of when a case is designated to the North Carolina Business Court can create different (and unusual) pathways to appellate review.

This follow-up post focuses on the phrase “designated as a mandatory complex business cases,” as that phrase is used in Session Law 2014-102 to determine to which appellate court a Business Court appeal should be taken.  This phrase creates an unanswered question in my mind:  what event qualifies as the “designation” of a case to the North Carolina Business Court?  At least two options readily come to mind:

  • The filing of the notice of designation by a party in the home county
  • The Chief Justice’s order preliminarily assigning the case to the North Carolina Business Court
  • Perhaps some other triggering event?

As long as all of the potential triggering events fall on the same sides of October 1, 2014, this ambiguity is unlikely to trip up anyone.  But what if the notice of designation is filed before October 1, 2014, but the order assigning the case to the North Carolina Business Court is not issued until after October 1, 2014?  To which North Carolina appellate court should a party appeal?

At first glance, a party’s filing of a notice of designation would appear to be the triggering event. Session Law 2014-102 states that revised N.C. Gen. Stat. § 7A-27(a) applies to “actions designated as mandatory complex business cases on or after” October 1, 2014, and the enabling statute speaks repeatedly of a party “designat[ing]” as case to the North Carolina Business Court by notice of designation.  N.C. Gen. Stat. § 7A-45.4(a)  (“Any party may designate . . . .”); id. § 7A-45.4(c) (“A party designating an action as a mandatory complex business case shall file a Notice of Designation.”); id. § 7A-45.4(f) (“Once a designation is filed . . . .)

However, section 7A-45.4(f) states that “once a designation is filed . . . and after preliminary approval by the Chief Justice, a case shall be designated and administered a complex business case.”  The two-part sequence described in subsection (f) lends support to the argument that it is the Chief Justice’s order assigning the case to the North Carolina Business Court that triggers the  “designated as a mandatory complex business case” language found in Session Law 2014-102.

Moreover, if the “designation” referred to in Session Law 2014-102 is a party’s notice of designation, would an argument exist that “once designated a business court case, always a business court case”—at least for purposes of appealing directly to the Supreme Court? (That interpretation cannot be right).

Thus, it is unclear to me which document you look to when determining when a case was “designated” to the Business Court, and consequently how to determine whether old or new section 7A-27 governs your right to appellate review. Unlike the In re Pike scenario described in yesterday’s blog post, not knowing which document triggers the October 1, 2014 effective date creates problems that are not as easily fixed.  Either you appeal to the correct court or you do not.  Looks like we will have to wait and see if any appeals arise from a case that straddles the October 1 designation deadline.

One final warning: even if all your potential designation-triggering documents fall safely on the same side of the October 1, 2014 effective date, make sure that your appellate record is complete. An appellant must demonstrate that it has appealed to the correct appellate court. Thus, until an appellate court determines which document triggers the effective date of amended section 7A-27, the record should include all potential “trigger” documents.

Are you aware of any case whose designation documents straddle the October 1, 2014 effective date? Do you have any different thoughts or arguments as to when a case is “designated” to the North Carolina Business Court for purpose of amended section 7A-27?  We look forward to hearing your feedback in the comments below!

–Beth Scherer