Our state appellate system allows for appeals from final judgments, appeals from interlocutory orders that affect a substantial right, and appeals from orders that are final as to one claim or party if the trial court certifies there is no just reason for delay. But there is a key category of order that is missing from this list: orders turning on a controlling issue of law.
The federal system provides, by statute, for discretionary appeals from orders turning on a controlling issue of law:
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.
28 U.S.C. § 1292(b). In other words, a trial court judge can, in the order itself, plant the idea that the appellate court should accept an immediate appeal of the interlocutory order, which would otherwise not be appealable until the end of the case. When such a certification is made, the appellate court has discretion whether to accept the immediate appeal. This statutory pathway to appeal is appropriate when a threshold issue of law, if decided one way, could save both parties and the trial court from unnecessary and expensive litigation.
We have no parallel statute for state appeals. Sure, we have trial court “certifications” under Rule 54(b) of the North Carolina Rules of Civil Procedure, but the rule only applies when the order is final as to a claim or party. An order that denies a dispositive motion on the basis of a debatable controlling question of law simply does not fit the confines of Rule 54.
Against this backdrop, how can a trial court recommend to our appellate courts that a debatable controlling question of law should be resolved now, in the interest of judicial efficiency?
Well, by saying so in the order.
Chief Judge Gale, the leader of our North Carolina Business Court, did exactly that yesterday, in Kornegay Family Farms, LLC v. Cross Creek Seed, Inc. Kornegay is the perfect test case for what would be a “discretionary appeal on a controlling issue of law” in federal court, but what in state court would be treated as a request that the appellate court issue a writ of certiorari to review an otherwise non-immediately-appealable interlocutory order.
In Kornegay, the plaintiffs are farmers, suing defendants for selling tobacco seeds that allegedly produced abnormal tobacco crops. Each container of seed bears a label limiting the purchaser’s recovery to the purchase price of the seed. Is that limitation enforceable? If so, the defendants will simply fork over the purchase price and moot the lawsuit. If not, then just imagine the breadth of damages that the plaintiffs might claim, and the discovery and motions practice that would accompany those claims. Worse, Kornegay is just the lead case of eight cases germinating before the Business Court on this issue.
The underlying legal issue is fascinating. In short, the Supreme Court held in a pre-UCC case that limitation provisions like that above are unenforceable if the claim is that the seed is mislabeled, under the controlling “North Carolina Seed Law.” Shortly thereafter, the Supreme Court held, under the UCC, that such limitations provisions are enforceable if the claim is other than that the seed is mislabeled. The Supreme Court expressly reserved judgment on whether the provision would be enforceable in a UCC case where the claim is that the seed is mislabeled. And that is the issue in Kornegay: did the enactment of the UCC change the public policy in place under the Seed Law?
The Business Court held that the provision is unenforceable under the Seed Law.
The case turns on which of two Supreme Court precedents controls–a pure issue of law. A definitive decision now on that question might save the Business Court and the parties much in wasted time and resources, if the Supreme Court decides that the provisions are enforceable. No sense in watering a dead plant, after all.
After deciding the legal issue in the order, Chief Judge Gale continued, explaining why immediate appellate review is desirable here. Judge Gale noted that all parties desire guidance from the Supreme Court on the issue, and “[t]he Court agrees.” Judge Gale explained why “the parties and the Court would substantially benefit from a ruling by the supreme court on this threshold issue.” Finally, Judge Gale “urge[d] the supreme court to docket the appeal” if defendants seek immediate review of the order by petition for writ of certiorari. (Because these cases were designated after October 1, 2014, the certiorari petition is filed in the Supreme Court.)
Judge Gale’s “certification” has great appeal. After all, the Business Court was designed with efficiency and practicality in mind. It makes perfect sense for this type of threshold issue to be decided now, and not later.
I do not think this kind of certification “opens the floodgates,” either. It should be rare that a trial court judge finds herself issuing an order (1) involving a controlling threshold issue of law; (2) where there is no precedent on point; (3) that could, if decided one way, save the parties and courts significant resources; and (4) that does not affect a substantial right and is not final as to a party or claim under Rule 54(b).
Nor do I think we have any statutory prohibition against such certifications. While I would welcome a North Carolina statute modeled after 28 U.S.C. § 1292(b), we don’t necessarily need it for a trial court certification to be proper and have meaning. After all, we have the writ of certiorari, which allows review of orders that are otherwise not reviewable. N.C. Const. Art. IV, Sec. 12, N.C. Gen. Stat. § 7A-32(b), N.C. R. App. P. 21. The writ may be issued by the appellate court to allow immediate review of orders “in appropriate circumstances.” N.C. R. App. P. 21.
What constitutes “appropriate circumstances” is intentionally vague to allow maximum discretion to the appellate courts as to whether to review a trial court order outside of the normal appellate process. Our appellate courts make certiorari decisions on a case-by-case basis after reviewing the reasons for (and perhaps against) immediate review set forth in the parties’ petition for writ of certiorari and response. I suspect our appellate courts would welcome the views of the (neutral) trial court judge on the question of whether “appropriate circumstances” for certiorari review exist in a particular case. Isn’t that exactly the insight that Judge Gale provided in his “certification”?
If this case takes root in the Supreme Court, I’ll be sure to let you know.