Class actions challenging corporate merger transactions often result in settlement agreements in which the only remedy obtained by the plaintiff class is the company defendants’ additional disclosure of information related to the merger. These “disclosure-only” settlements have proliferated in recent years, drawing criticism, in part, due to questions regarding the materiality of any additional disclosures that are obtained and the broad release of claims that the corporate defendants typically receive in exchange for the disclosures. The Delaware Chancery Court ...
The reality of class action litigation is that what is supposed to be the court’s preliminary decision of whether to certify a case as a class action is often the end of the litigation. In many cases, plaintiffs will not proceed if the court denies class certification for reasons including that their individual claims are not large enough to justify the costs. And defendant companies often will settle a case once a class is certified, even if the claims are meritless, because the risk and costs of litigation are too high. Therefore, the opportunity to appeal a class certification ...
The North Carolina legislature recently passed H.B. 239, over Gubernatorial veto, which gives company defendants the right to appeal trial court decisions allowing class certification directly to the North Carolina Supreme Court. This law parts from North Carolina case law precedent and eliminates the need for the NC Supreme Court to invoke its supervisory authority to review a grant of class certification prior to resolution of a trial, as the court recently did in Fisher v. Flue-Cured Tobacco Coop. Stabilization Corp., 794 S.E.2d 699, 2016 N.C. LEXIS 1120, (NC Dec. 21, 2016 ...
Rolling into the new year, North Carolina attorneys are on notice that the ability to gain approval of class action settlements and related attorneys’ fees may become more difficult in some cases. In recent years, we have seen more class actions challenging corporate merger transactions and settlements in which the only remedy obtained by the plaintiff class was the company defendants’ additional disclosure of information related to the transaction. In exchange for the additional disclosures, the corporate defendants typically would receive a broad-based release of ...
What began several years ago as a defeated attempt at a class action against the North Carolina Department of Transportation (NCDOT) ultimately resulted in a win this month for plaintiff landowners in Kirby v. NCDOT (No. 56PA14-2). On June 10, 2016, the North Carolina Supreme Court held that the State's restrictions placed on property owners under the Roadway Corridor Official Map Act (Map Act) constitute a taking of their property, requiring the state to compensate the landowners appropriately. The case was brought originally as a putative class action on behalf of nearly 800 ...
The North Carolina Court of Appeals considered for the first time whether it is legal in a class action settlement agreement for one party to agree to pay the other’s attorneys' fees and expenses. The court concluded that it is legal, subject to appropriate judicial review. But, the court’s ruling leaves local North Carolina counsel shut out of the roughly $1 million attorneys’ fee award granted to New York lead counsel. The appellate court’s opinion in Ehrenhaus v. Baker, Nos. 14-1201, 14-1083 (N.C. Ct. App. Sept. 15, 2015)(“Ehrenhaus II”) reads much like a primer on ...
At first glance there seems to be a saving grace in the North Carolina Rules of Civil Procedure for plaintiffs who are running up against the deadline for filing a lawsuit, i.e., Rule 41(a)(1). Rule 41(a)(1) provides that if a complaint was filed timely and subsequently dismissed by the plaintiff voluntarily, the case may be refiled within one year of the dismissal, effectively granting a one-year extension of the statute of limitations. But, there is a lesson for plaintiffs to learn from the recently decided Murhpy v. Hinson, et al., No. COA14-1230 (N.C. Ct. App. July 7, 2015) -- in the ...
Our goal is to serve as a cutting-edge resource for companies operating in an increasingly globalized and regulated business environment. Moore & Van Allen’s MLB Litigation Brief is a complement to our Litigation Blog’s in-depth individual treatment of critical issues emerging in federal, North Carolina state, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices. MLB Litigation Brief hits the highlights of recent developments, streamlining access to critical information for our readers. Subscribe to the ...
As a matter of course, a prevailing party cannot recover its attorneys’ fees from an opposing party in North Carolina. But, attorneys’ fees can be awarded if there is specific statutory authority. At the conclusion of litigation, the last thing the prevailing party wants to face is the reversal of its award for attorneys’ fees. The plaintiff in Brown's Builders Supply, Inc. v. Johnson et al., No. COA14-836 (N.C. Ct. App. Mar. 17, 2015), a home renovation-related contract dispute, found itself in this unfortunate position because the trial court’s order granting ...
Most of the cases that come to mind when you think “class action” consist of a large group of plaintiffs (hundreds or multiple thousands) seeking authorization to proceed as a class in one lawsuit against one or a handful of defendants. It is the rare case in which a large group of defendants are certified as a class in order to facilitate resolution of one plaintiffs’ claims against them. Rare though it may be, Federal Rule of Civil Procedure 23(a) does explicitly allow for the certification of defendant classes if the prerequisites for class certification (numerosity ...
North Carolina continues to be cultivated into increasingly fertile ground in which sophisticated and complex businesses can flourish. Governor McCrory recently signed into law SL2014-102 (SB 853) (the “Act”), an act which began as an effort to modernize the procedures for complex business cases handled by the North Carolina Business Court, and which ultimately expanded to provide for internal corporate reorganizations using holding companies in a manner that has been compared to favorable provisions of Delaware law. The Act was introduced in May 2014 by Senators ...
The 2013 General Assembly convened its 2014 Regular Session on Wednesday, May 14, 2014 with the introduction of House Bill 1032 The Abusive Patent Assertions Act by primary sponsor Representative Tom Murry (Rep). The Bill also is sponsored by Representatives Conrad, Lambeth, S. Martin, Pittman, Saine, and Whitmire. The Act recognizes that the assertion of bad‑faith patent infringement claims poses a threat to North Carolina companies via costly and time-consuming litigation that may impose pressure to settle meritless claims. The practice also “undermine[s] North ...
Non-competition and confidentiality agreements can serve as invaluable tools to safeguard against the loss of confidential and proprietary information through current and former employees. However, recent state and federal cases serve as a critical reminder that these agreements may fail to protect companies if they are poorly crafted with arguably over broad restrictions or unsupported by sufficient consideration. We discuss two scenarios presented by AmeriGas Propane, LP v. Coffey, 2014 NCBC 4 (N.C. Super. Ct. 2014) and Flex Frac Logistics, L.L.C. v. NLRB, 198 ...
Defining the power of arbitration agreements has been a hot topic at the federal and state levels for the past couple of years. In a recent post, we discussed two North Carolina Court of Appeals decisions that validated the reach of the U.S. Supreme Court’s AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011) and Italian Colors v. American Express 133 S.Ct. 2304 (2013) decisions to enforce class arbitration waivers in the State. In one of those cases, Torrence v. Nationwide Budget Finance, et. al., No. 05- CVS 447 (N.C. Ct. App. Feb. 4, 2014), a question also was raised regarding the ...
The North Carolina Court of Appeals recently declared the enforceability of class arbitration waivers despite the North Carolina Supreme Court’s previous decision in Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 655 S.E.2d 362 (2008), which invalidated an arbitration agreement based, in part, on a class arbitration waiver. In companion cases, Torrence v. Nationwide Budget Finance, et. al., No. 05- CVS 447 (N.C. Ct. App. Feb. 4, 2014) and Knox v. First Southern Cash Advance, et.al., No. 05-CVS-445 (N.C. Ct. App. Feb. 4, 2014)**, plaintiffs had secured class ...
In our last post, we discussed proposed amendments to the Federal Rules of Civil Procedure recently published for comment by the Judicial Conference Advisory Committee. Two years ago, I sat on a similar advisory committee for the U.S. District Court for the Western District of North Carolina with the mission to devise a set of local patent rules to enhance the Rules of Civil Procedure and guide parties through the unique aspects of patent litigation in our District. Since 2001, Federal District Courts around the country have continued to establish local patent rules. Local patent ...
When the law imposes personal liability on an attorney for actions connected with the representation of a client, it is worth noting and bringing to all of our attention. Under North Carolina law, if a state employee is injured by a third party and recovers damages from the third party, the State Health Plan for Teachers and State Employees (the “State Health Plan”) has the right to reimbursement for the medical expenses it has covered due to the injury. In the first North Carolina appellate case to review the statute that gives the State Health Plan this right, The State Health Plan for ...
Arbitration under the Federal Arbitration Act (“FAA”) has been the hot topic of many cases in the past few years, with the U.S. Supreme Court having reaffirmed the federal policy favoring arbitration and the preemptive power of the FAA over state laws governing arbitration. The North Carolina courts are among those that have been petitioned to resolve conflicts regarding the enforceability of arbitration agreements, and the North Carolina Court of Appeals recently issued another arbitration decision that should be of interest to businesses facing disputes in this state. The ...
Justice Initiatives, Inc. (“JI”) has completed another year of service to the North Carolina justice system and Mecklenburg County by advocating for “reforms related to the Judicial Branch’s organization, structure and/or administration” and for “the needs of court system offices and programs within the 26th Judicial District, NC.” JI recently released its 2011-2012 Annual Report which reflects the depth and breadth of the organization’s commitment to bridging gaps between our local communities and the court system, as well as making a difference to the ...
The U.S. Supreme Court recently has reinforced in Marmet Health Care Center, Inc. v. Brown, 132 S. Ct. 1201 (2012) and AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) that the Federal Arbitration Act (“FAA”) prohibits states from categorically excluding certain types of claims from arbitration. However, companies still may have to contend with the policies of private organizations like the American Arbitration Association (“AAA”) that administer arbitrations and place categorical restrictions on the types of cases they will administer. In Concepcion, the ...
The North Carolina Judicial Branch recently issued its Fiscal Year 2011-12 Annual Report, which gives us a real picture of the strain that our court system has been under for the past four years. The stated mission of the Judicial Branch is “[t]o protect and preserve the rights and liberties of all the people, as guaranteed by the Constitutions and laws of the United States and North Carolina, by providing a fair, independent and accessible forum for the just, timely and economical resolution of their legal affairs,” (emphasis added). Deep budget cuts and the corresponding ...
In the digital age where the internet permeates every aspect of our lives and commerce, the courts are continually called upon to demarcate where and how communications and intellectual property laws apply to the services provided by websites and internet service providers. Many internet-based companies find themselves facing potential liability based upon their legitimate business activities due to the unfortunate attempts by users of their services to thwart the intellectually property rights of others. The U.S. District Court for the Western District of North Carolina is ...
"Justice does not require that courts profess to be more ignorant than the rest of mankind." - NC Court of Appeals in HCW, 2012 N.C. App. LEXIS 939 (2012)
North Carolina public policy favors arbitration and requires that doubts about whether arbitration is appropriate be resolved in favor of arbitration. However, the Court of Appeals made clear in a recent decision that the courts will not turn a blind eye or deaf ear to compel arbitration at all costs. Defendants seeking to compel arbitration of claims brought against them must proceed with the awareness that missteps prior to moving to ...
Justice Initiatives, Inc. continues to raise the bar in its efforts to support and advocate for our court system. For six years, Justice Initiatives, Inc. has hosted the illustrious “Evening at the Courthouse” fundraising event, which has a guest list that reads like a “Who’s Who” of North Carolina federal and state judges, state and local elected representatives, and members of the Mecklenburg County Bar and Community. The event is hosted free of charge to guests, with a request for donations to support the organization. At this year’s event on May 8th, I was among those ...
Members, managers, directors, and executives of limited liability companies (“LLC”) are provided protections under North Carolina law which limit their personal responsibility for obligations incurred by the LLC. This limitation includes liabilities incurred for professional negligence, malpractice, and other wrongdoing attributable to the LLC and other employees or members of the LLC. There is, however, a limit to the limited liability protection provided under North Carolina General Statutes § 57C-3-30; and plaintiffs continue to attempt to impose personal ...
Former U.S. Supreme Court Justice Sandra Day O’Conner was likely happy to see the news of Governor Perdue’s Executive Order 86 which established the North Carolina Judicial Nominating Commission. In 2010, former Justice O’Connor highlighted that the U.S. was the only nation in the world that had elections for its judges (at the state level) and admonished: “I know you have some public funding of elections, and it's nonpartisan, but that doesn't do enough. So I hope that someday you'll think about something else in North Carolina.” See here for former Justice ...
While it is difficult to find the right words to say, I want to say something to honor my friend who recently passed away. Judge Christopher M. Collier was far too young and taken too suddenly for me to have been prepared to reflect on his life and the impact he had made on the world and those around him. I have had a couple of weeks since his passing for the loss to sink in. We are incredibly fortunate to have been touched by Chris Collier while he was with us.
I first became friends with Chris when we were undergraduate students at University of North Carolina at Chapel Hill. Our paths continued to ...
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Companies are operating in an increasingly globalized and regulated business environment, facing ever-changing and complicated litigation and regulatory challenges. We provide cutting-edge information regarding developments in federal, North Carolina State, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices.