In 1994, then North Carolina Governor Jim Hunt issued an executive order establishing the North Carolina Commission on Business Laws and the Economy. The Commission was tasked with recommending changes to statutes and regulations in North Carolina to provide a legal environment in the state that would attract businesses to locate here.
The Commission recognized the influence of Delaware state courts on corporate law throughout the United States. For such a relatively small state, Delaware has an outsized reputation for attracting business to incorporate there. Delaware has a long history of tailoring its laws to provide predictable legal results for businesses that fall under Delaware’s state laws. By incorporating in Delaware, business can benefit from a stable and predictable legal regime.
The Commission’s recommendations hoped to emulate some of the innovations in Delaware and encourage business growth here in NC. One of the Commission’s recommendations was the formation of a business court. The Commission believed that a dedicated business court would handle cases more efficiently for litigants and develop a reliable and predictable body of case law.
Superior Court judges in North Carolina rotate through different jurisdictions, holding court in different places. This arrangement, which is mandated by the state constitution, means that longer more complex cases often appear in front of multiple judges at different stages of the case. The Commission believed that a procedure whereby a particular judge could be assigned to hear particular complex business cases would be lead to more efficient outcomes. The formation of the North Carolina Business Court has led to several
Predictability and Specialization
In addition, having specially appointed judges to hear business cases leads to specialization. Judges hearing the same kinds of cases would become experts in North Carolina corporate law, and cases decided by business court judges should therefore be consistent and predictable. The court, by producing high-quality written opinions, creates a body of case law that businesses can rely upon when transacting business within the state.
Since its inception, the North Carolina Business Court has been a source of innovation in the court system. The Business Court was the first state court in North Carolina to implement and electronic filing and docketing system, similar to that used by federal courts. That innovation makes it easier for litigants to access their files, attorneys to practice state-wide, and the public to research cases and outcomes.
The Structure of the North Carolina Business Court
In general, the Business Court operates as a special superior court that is authorized to hear certain categories of cases. Cases are still filed in the appropriate county for venue purposes, but then are designated to the Business Court either by the plaintiff who files the case or by a defendant in the case if it is not designated by the plaintiff.
The following kinds of cases can be assigned to the Business Court:
- Disputes involving the law of corporations, partnerships, and limited liability companies (e.g., disputes among shareholders, members, or partners);
- Disputes involving securities;
- Disputes involving antitrust law;
- Disputes involving trademark law;
- Disputes involving intellectual property;
- Disputes involving trade secrets; and
- Certain contract disputes.
Certain other cases must be filed in the Business Court:
- Tax law cases;
- Cases that fall into one of the categories listed above where the amount in controversy exceeds $5 million; and
- An action where a receiver is sought to run a business with assets of at least $5 million.
Business Court Cases
Revolution Law Group is experienced in practicing in front of the North Carolina Business Court. If you have questions about the Business Court, or about whether you have a case that should be filed in the Business Court, please contact us today.
Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.