On October 14, 2022, the Mecklenburg County Business Court CLE was back in person, with a full day of amazing presentations and, as is tradition, concluded with the panel of Business Court Judges.   Chief Judge Bledsoe, Judge Earp, and Judge Conrad shared some of their practice pointers, words of wisdom, and guidance on the new amendments to the Business Court Rules.  Below is my summary of their comments, though as Pat has cautioned in the past, this is only my recollection of the Judges’ comments and is no way verbatim.

Judge Bledsoe opened the Judges’ Panel with some yearly statistics from the Business Court and important Business Court updates, including the addition of a sixth Business Court Judge and approval from the North Carolina Supreme Court on some Business Court Rule amendments (more on those below). 

The Business Court continues to have an active, busy docket with 86 new case filings in 2022.  This is a little lower than pre-pandemic numbers but is consistent with regular superior court filings.  Cases concerning the law of corporations persists as the most common type of new case filings, followed by matters involving trade secrets disputes and other intellectual property disputes.  Case closings are consistent with 2022, but a bit down from previous years.  As of now, the Court has pending cases from 37 counties across the State, highlighting its vast reach.  So far in 2022, the Business Court has had three jury trials, two bench trials, and 486 hearings and conferences.    

In terms of published opinions and orders of significance, the Business Court continues to publish a significant body of case law.  In addition to publishing opinions entered pursuant to Rules 12, 56, 59, 60, and any order finally disposing of a complex business case, as is required by N.C.G.S. § 7A-45.3, the Business Court now publishes Orders of Significance on its website.  These are orders that the Business Court Judges find substantively important to the Bar and can include insightful analyses related to orders appointing receivers or discovery masters, emergency motions, discovery motions, motions for attorneys’ fees and costs, orders approving settlements, and more.  The Judges highly recommend making it a practice to review the Orders of Significance.  To help you stay on top of the latest opinions and Orders of Significance, the Court now has an email alert service that you can sign up for on the Court’s website.  Every two weeks, you will get notifications of newly published decisions straight to your inbox.  A helpful resource for us all!

After Judge Bledsoe’s opening remarks, Judge Conrad walked through the Amendments to the Business Court Rules, effective July 1, 2022.  Check out this post for an in-depth review of all changes.  Judge Conrad encourages the Bar to review the new Business Court Rules, including the redlined version that shows all changes, but specifically acknowledged three standout amendments:

Motions to Seal.  In recent years, the Business Court has developed a robust body of law dealing with motions to seal and has reiterated the standards for sealing information from the public.  Now, the Rules make explicit the Court’s emphasis on the openness of our courts and the judges’ role in safeguarding the public’s interest in accessing our courts and the records filed therein.  Judge Conrad reminded litigants that consent of opposing counsel is not sufficient on its own to satisfy the sealing of a document, nor is the fact that a protective order exists sufficient to justify sealing.  The Rules also now make it clearer that not all discovery in a case comes from the parties, and therefore nonparties may utilize the sealing procedures in the Rules when their information is included in a court filing.     

Formatting for Motions.  The amendments to Business Court Rule 7 were made to deal with litigation gamesmanship and fend off some recent trends the Business Court has seen, including litigants finding creative ways to skirt word count limits and other briefing limitations.  Further, there is now more express language reminding litigants that all arguments intended to be made at oral argument should be included within their briefs. 

Deletion of Rule on Receivership.  With the passage of the new comprehensive North Carolina Commercial Receivership Act, N.C. Gen. Stat. §§ 1-507.20, et seq., the Business Court Rule on receivers was superseded and no longer necessary. 

While not in the Rules amendments, Judge Conrad also noted that Statewide e-filing, which is on the horizon but has no firm launch date, will affect the Business Court and reminded litigants to be patient as the State grows into these necessary adjustments.  The Business Court will announce any changes to its e-filing process as those changes become imminent.   

Following a review of the Business Court Rules, the judges launched into a Q&A panel.  First, the judges were asked about their preferences on remote pretrial hearingsJudge Earp remarked that it depends on the judge and the specific case, but she is generally amenable to remote hearings, especially early on in a case.  Judge Bledsoe agreed with Judge Earp and added that if you are seeking a remote hearing, you should include that in your motion.  Judge Bledsoe remarked that one of the lessons learned from the pandemic is that long and substantive hearings can be accomplished remotely.  That being said, he is still not entirely comfortable with remote trials.  Judge Conrad is very receptive to the parties’ preferences but generally is more inclined to have in-person hearings.  Judge Conrad also noted that the hearing options are not just limited to WebEx or where the judge’s chambers are located – but that the judges are willing and welcome the opportunity to conduct hearings in the county of venue when the nature of the hearing warrants it.

Next, the judges were asked about their formatting preferences, in light of the new changes to Business Court Rule 3.  Judge Conrad prefers when litigants provide him with a table of authorities.  Judge Earp agrees and adds that she finds tables of contents equally helpful.  Judge Bledsoe added that he prefers argument headers in briefs, which go hand-in-hand with tables of contents.  Remarking on the gamesmanship noted earlier, Judge Conrad cautioned litigants from dumping arguments into footnotes and Judge Bledsoe noted that copying sections from previously submitted briefs—and slightly changing the arguments—makes it difficult for the judges to pick up on the differences.  As to specific motions, Judge Earp prefers when parties attach a redlined version of a proposed amended complaint to their motion to amend.  Further, as to Rule 12 motions, Judge Earp reminded litigants that a Rule 12(b)(6) motion must be set out separately (and filed before) an answer. 

As to emergency TROs and preliminary injunction motions, Judge Bledsoe reminded counsel to spend time thinking about how to frame the injunctive relief they are seeking and to provide the Court with a proposed TRO or PI before the hearing.  Sometimes there is a disconnect between what a party is arguing and what they are actually seeking.  Judge Earp agreed.  Judge Conrad added that if a party is seeking a preliminary injunction, they must make a separate motion – the Business Court will not treat a motion for preliminary injunction built into a complaint as a motion.  Instead, in the Business Court, litigants must file a separate motion with a supporting brief and should alert the Court that they are seeking preliminary relief.  Judge Conrad also reminded litigants that seeking a temporary restraining order is different from seeking a preliminary injunction and temporary restraining orders are not appropriate in every case. 

The judges then discussed their suggestions for making trials run smoothlyJudge Bledsoe cautioned attorneys to be vigilant with their time and to not wait until the last minute to prepare for trial.  The luxury of the Business Court entering robust pre-trial schedules and setting out trial dates far in advance is that the parties can plan accordingly.  Judge Bledsoe noted that he likes to build in Daubert motions and other motions in limine into the pre-trial schedule so that counsel and the Court can head off any evidentiary issues before the exchange of trial exhibit and witness lists.  Judge Earp remarked that her pre-trial scheduling orders contemplate collaboration with both sides and undertaking efforts to find common ground.  For example, she will ask the parties to agree on jury instructions and a set of common exhibits that can be used by both sides.  Judge Conrad echoed Judge Earp’s comment about jury instructions, remarking that the Court puts a great amount of effort into finalizing these.  Judge Conrad requires a single set of jury instructions that are worked on by both parties, and to the extent there is disagreement, for the parties to clearly note their divergence. 

Next, Judge Bledsoe touched on trends with business court designations.  A frequently encountered issue is parties masking general contract disputes as something more.  This predominantly arises with cases seeking designation under the intellectual property prong.  The Business Court has developed case law to interpret this subsection, and recognizes that while the statutory language is broad, the intention for that category of designation is much narrower.  The Court looks at whether the IP aspects of the case are actually in dispute and will need to be examined in the course of the litigation.  Cases involving securities are susceptible to that same analysis.  Judge Bledsoe also reminds litigants that if a linchpin claim for business court designation is dismissed, the case will nonetheless remain in the Business Court.

The judges then discussed communicating with the CourtJudge Earp reminded litigants that before reaching out to the Court with a question, counsel should check the Business Court Rules, the Orders of Significance, and the FAQs page on the Business Court website.  Judge Conrad suggested that reaching out to opposing counsel and working out any issues with opposing counsel prior to reaching out to the Court is not only encouraged but required in some circumstances.  If you need to ask the Court for an extension or the like, reaching out to opposing counsel first and having a proposed, consented to solution will go far with the Court.   Judge Bledsoe agreed and added that if you are on the receiving end of a request for an extension of time, think through whether you or your client is actually prejudiced by the extension prior to withholding your consent. 

Lastly, the judges reflected on some areas of improvement for attorneys.  Top on the list is a reminder that has been repeatedly stressed by the judges: heed Business Court Rule 7.3, which requires consultation with opposing counsel prior to the filing of certain motions.  Failure to abide by this Rule can result in summary denial of the motion.  Judge Earp remarked on attorneys’ fees motions and the reasonableness of counsel’s rates and time spent.  Counsel are encouraged to think about how much supporting documentation they are giving the Court to make a reasonableness determination – a supporting affidavit from another attorney, documentation that is more detailed than block-billing, and detailed task entries go a long way.  Judge Bledsoe then touched on “routine” Rule 12 motions – these motions have almost become reflexive.  Counsel should think about whether a Rule 12 motion is actually necessary prior to filing. 

Consistent with the theme of cooperation stressed throughout the CLE, Judge Conrad suggested that counsel should consider talking with opposing counsel to see if some of the issues that would be subject to your Rule 12 motion could be handled by a motion to amend or even a voluntary dismissal.  Further, Judge Bledsoe noted that early motions practice puts the plaintiff in a position where they may delve even deeper into their facts and applicable law at the outset of the case. To the extent counsel is filing a Rule 12 motion for some sort of tactical gain – Judge Bledsoe suggests that counsel think about whether the ‘gain’ by making the motion is worth the ‘education’ the other side gets from you having made the motion.  Judge Conrad transitioned to discovery stays, noting that if counsel intends to stay discovery while waiting on an order from the Court (like on a Rule 12 motion), counsel needs to inform the Court of that.  Judge Bledsoe likes to conduct case management conferences at the same time as a hearing on a motion to dismiss so that counsel and the Court can discuss any need for a discovery delay.  Though, the judges all stressed that stays of discovery are not favored unless the specific case or motion demands it. 

And as a final send off, the judges remarked on a few “words of wisdom.”  Judge Earp informed litigants that she is appreciative of counsel preparing physical notebooks for her, especially on substantive motions.  Judge Conrad reflected on the earlier comments about communicating with opposing counsel – even when Rule 7.3 does not require it, counsel can still consult with opposing counsel prior to filing a motion or making a request with the Court.  Rule 7.3 is not meant to be a limitation.  Finally, Judge Bledsoe reminded us all that when crafting arguments, it is helpful to put yourself in the shoes of the judge: what does the judge need to know to decide this issue? What would be helpful to them?  At the end of the day, litigating is about persuasion and knowing your audience. And it is important to know what your audience may need to reach a decision favorable to your position.  Thanks to the Mecklenburg County Bar for putting on such a great CLE.  Hope to see you all there next year!