N.C. Supreme Court Amends N.C. Business Court Rules.

On June 11th, the Supreme Court of North Carolina issued an Order Amending the Rules of the N.C. Business Court pursuant to its supplemental rule-making authority under N.C.G.S. § 7A-34.  See Order Amending the North Carolina Business Court Rules.  The Business Court Rules govern all civil actions designated as mandatory complex business cases and those cases assigned to a Business Court Judge under Rule 2.1 of the General Rules of Practice. The revisions impact all 16 of the Business Court’s Rules and each appendix in the rules set. These rules become effective July 1, 2019.  Most of the rule changes are cosmetic, or serve to update citations to applicable statutes. Some of the changes will keep the Court better apprised of case status and parties’ intent. Two new rules are of particular note: an amicus curiae can brief matters with leave of court; and junior attorneys are encouraged to draw near and be heard.  The significant changes are described below.

Rule 2. Mandatory Business Court Designation

  • BCR 2.5. Designation under N.C.G.S. § 7A-45.4(a)(9).   Amended BCR 2.5 adds an administrative requirement and, wisely, provides an extension of time for a designating party to obtain consent to file a qualifying contract matter at the Business Court.

N.C.G.S. § 7A-45.4(a)(9) governs Business Court designation for contract disputes when a claimant asserts a breach of contract claim or seeks a declaration of rights under a contract; the amount in controversy is at least $1 million; at least one plaintiff and at least one defendant is a corporation, partnership, or limited liability company, including any entity authorized to transact business in North Carolina; and all parties consent to the designation.

    • Current BCR 2.5 gives a designating party time to seek the consent of all the parties in the case.  When there is lack of consent from all parties at the time the pleading supporting designation is filed, the designating party has to file a Conditional Notice of Designation and seek consent.
    • Amended BCR 2.5 retains the conditional notice requirement and further requires the Conditional Notice of Designation to be served by e-mail as if it were a standard Notice of Designation.
    • Current BCR 2.5 gives the designating party 30 days after service to file a supplement to the Conditional Notice of Designation reflecting the required consent by all parties.
    • Amended BCR 2.5 retains the 30-day deadline, but expressly allows the Court to extend the time period to file a supplement upon “a motion or its own initiative, and for good cause shown[.]”
  • BCR 2.6. Procedure upon remand from federal court.  BCR 2.6 is a new rule. It requires that the parties file a status report within 14 days upon a case’s remand from federal court.
  • BCR 2.7. Procedure following entry of stay.BCR 2.7 is a new rule. It requires that the parties file a status report within 14 days after a case is resolved through arbitration or bankruptcy.

Rule 3. Filing and Service

  • BCR 3.10. Procedure when the electronic-filing system appears to fail.  The Amended BCR 3.10 provides additional guidance for voluminous filings.
    • Current BCR 3.10 provides parties a means to file documents with the Court when technical glitches hamper the electronic filing effort.
    • Amended BCR 3.10 retains the same procedure, but adds an additional mechanism to assist with voluminous filings even before the parties experience difficulty.  If the parties anticipate or experience difficulties with large filings using the Court’s electronic filing system, the Court will work with the parties on an alternative method of filing, such as a cloud-based file-sharing system.  Parties should contact the presiding Judge’s judicial assistant when they anticipate a need for assistance.

Rule 4. Time 

  • BCR 4.1. Motions to extend time periods.  Rule 4.1(c) has always provided an automatic grace period following a motion for an extension of time.  The Amended Rule 4.1(c) makes clear that judicial grace has limits.
    •  Current BCR 4.1(c) states: “The filing of a motion to extend time automatically extends the time for filing or the performance of the act for which the extension is sought until the earlier of the expiration of the extension requested or a ruling by the Court.”
    • Amended BCR 4.1(c) makes clear that the grace period only applies to “timely” motions and does not apply to deadlines set by court order, including the deadline for completion of fact and expert discovery.

Rule 6. Hearings and Conduct

  • BCR 6.5. Participation of junior attorneys.  BCR 6.5 is a new rule. It encourages the participation of junior attorneys at oral argument.

  • BCR 6.6. Secure leave.  BCR 6.6 is a new rule. It requires attorneys to e-file designations of secure leave periods in each case in which the attorney is counsel of record.

 Rule 7. Motions

  • Rule 7.3. Consultation.  Amended BCR 7.3 adds a requirement for parties to inform the Court about whether the opposition will file a response to certain motions. If the Court knows not to anticipate a response, presumably, it can respond with greater efficiency.
    • Current BCR 7.3 requires consultation with the opposition for all motions except motions to dismiss and motions for default judgment, summary judgment, new trials, judgment amendments, relief from judgments, and injunctions. The motion must reflect the consultation with and the position of the opposition.
    • Amended BCR 7.3 requires the movant to state whether the opposing party intends to file a response.
  • Rule 7.5. Supporting materials and citations.  Parties are no longer required to file copies of the Business Court’s own published decisions.

    • Current BCR 7.5 requires parties to attach copies of the decisions cited in their briefs and motions that are published in sources other than the West Federal Reporter System, Lexis System, commonly used electronic databases such as Westlaw or LexisNexis, or the official North Carolina reporters.
    • Amended BCR 7.5 adds the decisions of the Business Court to the above list.
  • Rule 7.10. Motions that do not require briefs.  The Amended BCR 7.10 adds motions to seal confidential information to the list of motions that do not require a supporting brief.
  • Rule 7.14. Amicus Briefs.  BCR 7.14 is a new rule that allows an amicus curiae to file briefs.  An amicus curiae must file a motion requesting leave to file a brief, and must attach the proposed brief to the motion. The brief is limited to 3,750 words.  An amicus curiae cannot participate in oral argument without leave of Court.

 Rule 10. Discovery

  • Rule 10.9. Discovery Motions. The Amended BCR 10.9(b) stresses, again, that before a party files a discovery motion, the parties must confer.  They must engage in a “thorough, good-faith attempt to resolve or narrow the dispute.”