Last week, the North Carolina Court of Appeals dismissed, apparently sua sponte, an appeal from a Business Court decision because the appeal should have been filed in the Supreme Court of North Carolina under N.C. Gen. Stat. § 7A-27(a)(2).  As frequent readers of this blog know (see here, here, and here), the General Assembly’s 2015 amendments to N.C. Gen. Stat. § 7A-27 mean that appeals from “final judgments” in cases designated to the Business Court on or after October 1, 2014 bypass the Court of Appeals and go directly to the Supreme Court.  Appeals of these orders filed with the Court of Appeals face dismissal.

In Christenbury Eye Center P.A. v. Medflow, Inc., the Court of Appeals did not address the merits of the appeal but instead dismissed it solely on the grounds that the Court lacked subject matter jurisdiction. As Mack Sperling noted on his blog, the plaintiff’s mistake in filing the appeal with the Court of Appeals rather than the Supreme Court was an “understandable” mistake, given that most appeals go to the Court of Appeals first, but it was nonetheless a fatal one.

While it is clear that appeals from final judgments by the Business Court in cases filed on or after October 1, 2014 must go to the Supreme Court, uncertainty remains about the impact of the General Assembly’s amendments to N.C. Gen. Stat. § 7A-27. Primarily, the amendment to N.C. Gen. Stat. § 7A-27(a)(3) allows for appeals of interlocutory orders by a “Business Court Judge” if the order affects a substantial right, in effect determines the action and prevents a judgment from which an appeal might be taken, discontinues an action, or grants or refuses a new trial.  Given that Business Court Judges sometimes preside over non-Business Court cases, we wonder where an appeal of an interlocutory order that meets the requirements of N.C. Gen. Stat.  § 7A-27(a)(3) but was entered by a Business Court Judge sitting in a regular civil case not designated as a Business Court case should be filed.  If the appellant in that scenario files his appeal in the wrong court, would that appeal also be subject to dismissal due to lack of jurisdiction à la Christenbury?

Another area of uncertainty not directly related to Christenbury but worth considering is the impact of N.C. Gen. Stat. § 7A-27(a1) on an appeal from a Superior Court order that does not explicitly render a state statute invalid but could be construed to do so.  As you may recall, N.C. Gen. Stat. § 7A-27(a1) requires that appeals from orders or judgments that hold a state statute facially invalid must go directly to the Supreme Court of North Carolina.  It states:

Appeal lies of right directly to the Supreme Court from any order or judgment of a court, either final or interlocutory, that holds that an act of the General Assembly is facially invalid on the basis that the act violates the North Carolina Constitution or federal law. …

The statute does not, however, clarify what should happen when the order being appealed is ambiguous. In that case, should an appellant who may want to argue that the order holds a state statute facially invalid appeal directly to the Supreme Court?  What if that argument is one of several alternative arguments being raised in the appeal?  Must the appeal still be taken to the Supreme Court?

If North Carolina State Board of Education v. The State of North Carolina and the North Carolina Rules Review Commission is any indication, the answer to that question is yes.  There, the Board of Education filed suit in Wake County Superior Court arguing that the authority granted to the Board in the North Carolina Constitution exempted the Board’s policies from oversight by the Rules Commission in Wake County Superior Court.  No party sought adjudication by a three-judge panel pursuant to N.C. Gen. Stat. § 1-267.1(a1), which has exclusive jurisdiction over facial constitutional challenges.

After the Board dismissed several of its claims, Superior Court Judge Paul Gessner granted the Board’s motion for summary judgment on its remaining claims.   The State and the Rules Commission then appealed to the Court of Appeals.  The State sought, in part, to have Judge Gessner’s order remanded for clarification because the order could be construed to declare N.C. Gen Stat. §§ 115C-2, -106.3(19), -150.13, and 218.1(C) facially invalid—which would have required adjudication by a three-judge panel.  The Board moved to dismiss the appeal, in part on the basis that the Court of Appeals lacked jurisdiction, because an appeal from an order finding a statute facially invalid must be made to the Supreme Court of North Carolina pursuant to N.C. Gen. Stat. § 7A-27(a1).  The Court of Appeals agreed, entering an Order on March 2, 2016 dismissing the appeal because “pursuant to N.C. Gen. Stat. § 7A-27(a1), this Court is without jurisdiction to hear the appeal.”

— Carrie Hanger



UPDATE:  In September 2016, the Supreme Court granted  the appellant’s certiorari petition in Christenbury Eye Center, P.A. v Medflow, apparently deciding to forgive the jurisdictional error.   EBS