The unfortunate reality of being in business today is that disputes, in one form or another, seem to arise with troubling frequency. When such disputes cannot be resolved through negotiation, which usually is the preferred method, parties often turn to litigation. In complex business disputes, litigation involves substantial cost, risk, and outcome uncertainty. The North Carolina Business Court (“Business Court”) has been established for the specific purpose of helping businesses, including technology-based businesses, to manage dispute resolution in a more effective and efficient manner.
Overview
The Business Court first began functioning in 1996, when the first Special Business Court Judge was appointed by the Governor. Part of the stated purpose for the Business Court was to create an environment conducive to business. By providing a forum with more efficient case management and specialized expertise in complex business matters, the Business Court was intended to support existing businesses and facilitate attracting new businesses to North Carolina. The Business Court has exceeded expectations and has become a model for business courts in many other states across the country.
From 1996 to 2004, the Business Court was located in Greensboro and had only one judge who heard all matters. However, it was recognized that the demand for access to the Court was growing and, in 2004, two additional Special Superior Court Judges were appointed to serve on the Business Court and two new locations were established. There are now three Business Court locations: Raleigh, Greensboro, and Charlotte. Each location has a courtroom dedicated to Business Court matters, and each is equipped with state-of-the-art technology. The Business Court has received approximately 100 new cases each year for the last three years. While it is premature to speculate, the increase in business-related litigation seen across the country also may be felt in the caseload of the Business Court.
The affairs of the Business Court are readily accessible to the public at www.ncbusinesscourt.net. A 2008 Report to the General Assembly, available on the website, provides a particularly helpful overview of the progress and current state of the Business Court.
Advantages
The Business Court presents many advantages to businesses confronted with complex disputes. These include, among others, exceptionally well-qualified judges who have extensive experience in business-related matters; efficient, centralized case management; increased administrative and judicial responsiveness and flexibility; use of advanced technology, not only for filing and case management, but also for the exchange of information in discovery and presentation of evidence at trial; and the development of a sound and readily-accessible body of law dealing with complex business issues. These advantages can help guide future business decisions and provide a degree of predictability of outcome. While the outcome of a court case can never be fully predicted, having judges who understand the business issues presented, and a system that encourages efficiency in litigating such issues, certainly adds a level of predictability.
These advantages have become evident to attorneys whose practices involve representing businesses in complex business disputes. Given the steady increase in caseload over the years, it is clear that attorneys across the state think that the Business Court is the preferred court in which to litigate complex business matters. The increasing number of cases being moved to the Business Court indicates the level of confidence North Carolina businesses and their attorneys have in the ability of the Business Court to deal efficiently and effectively with their complex disputes.
Access to the Business Court
Access to the Business Court can be obtained through two means, mandatory and permissive. The mandatory means became available in 2005, when the North Carolina legislature enacted a statute identifying six categories of complex business cases. The categories are:
- State trademark or unfair competition law;
- Intellectual property law (including software licensing disputes);
- The Internet, electronic commerce, and biotechnology;
- The law governing corporations, partnerships, limited liability companies, and limited liability partnerships;
- Certain tax disputes;
- Securities law; and
- Antitrust law.
Cases involving issues within these categories can be moved to the Business Court either by the party filing the lawsuit or by any party named as a defendant.
Cases involving complex business disputes that do not fall into any of the mandatory categories above can be transferred to the Business Court by a motion made by any party to a lawsuit, or by a general court judge acting on the judge’s own initiative. The factors considered by the Chief Justice of the North Carolina Supreme Court in determining whether a case will be transferred include, among others:
- The number and diverse interests of the parties;
- The amount and nature of anticipated pre-trial discovery and motions;
- Whether the parties voluntarily agree to waive venue for hearing pretrial motions;
- The complexity of the evidentiary matters and legal issues involved; and
- Whether the transfer will promote the efficient administration of justice.
Conclusion
So, what does this mean to you? Business disputes almost certainly will arise in the rapidly evolving world of technology, and resolving such disputes through litigation often has the consequence of incurring undesirable cost, timeframes, and risk. The Business Court provides a forum for resolving such disputes in a cost-effective and time-efficient manner. If and when you encounter such a dispute, you might consider getting it to the Business Court.
For further information regarding the issues described above, please contact Donalt J. Eglinton.
