This case returned to the Business Court following the North Carolina Supreme Court’s decision reversing the Business Court’s determination that no further payments were due to the National Tobacco Settlement Trust. The Court ordered the defendants to make payment.

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Plaintiff’s former employer had violated the North Carolina Wage and Hour Act by failing to pay her bonuses when due. The Court granted summary judgment on this claim in favor of the plaintiff.

The Court granted summary judgment against plaintiff on her slander claims, finding that she had neither pled nor proven the alleged slander with specificity. Plaintiff furthermore had no evidence of special damages.

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Following its decision in Sompo Japan Insurance Inc. v. Deloitte & Touche, LLP, the Court found that there was no recognized claim under North Carolina law for aiding and abetting fraud. The Court did allow a claim for aiding and abetting breach of fiduciary duty to proceed, however.

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Plaintiff, a significant (42.5%) minority shareholder of the corporate defendant, filed a derivative action against the corporate defendant. The Court characterized the case as "a domestic case disguised as a derivative action." The Court looked to the law of Virginia, the place of the incorporation of the company, to determine the appropriate prerequisites.

The claims by plaintiff against the directors of the company were for breach of fiduciary duty, and they were therefore derivative claims belonging to the corporation. It ruled that the plaintiff had failed to make a demand, and her derivative claims were dismissed.

The Court also dismissed plaintiff’s unfair and deceptive practices claims concerning the termination of her employment with the company, holding that these claims related to the internal corporate affairs of the company as opposed to being "in commerce," as required by the unfair and deceptive practices statute.

Although Virginia does not recognize Meiselman-type claims, the Court that if it did that plaintiff would not have stated a claim for termination of her employment due to her execution of a written agreement providing that she could be terminated at any time. The Court also dismissed the conspiracy claim against the defendants, holding that they were entitled to intracorporate immunity because "alleging that a corporation is conspiring with its agents, officers or employees is accusing a corporation of conspiring with itself.” Although there is an exception of the officers were acting on behalf of an "indpendent personal stake," that is a narrow exception which is not triggered by an officer’s interest in the corporation’s profitability.

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This case involved "tobacco law." The Court found that the enactment of the Fair and Equitable Tobacco Reform Act of 2004 ("FETRA") on October 22, 2004 activated the Tax Offset Adjustment provision in the National Tobacco Grower Settlement Trust created as a part of the Master Settlement Agreement, which permitted the Settlors under the Trust to offset their FETRA payments against payments owed to the Trust for calendar year 2004. This meant, in effect, that the cigarette manufacturers did not have to make a significant payment to the Trust.

The opinion contains an extensive discussion of the history of tobacco regulation and the sale of tobacco in the United States.

The Court was clearly pained by the result it felt compelled to reach, which was issued only two days before Christmas. It stated "[i] would be far more pleasing to the Court to play the role of Santa’s helper on this twenty-third day of December rather than be subjected to the inevitable comparison to the Grinch." The Court was later reversed by the North Carolina Supreme Court.

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Plaintiff, a state agency, charged that the defendants had engaged in a conspiracy to fix prices for environmental consulting work. The defendants claimed that they were entitled to immunity under the Noerr-Pennington doctrine. The Court rejected this argument, characterizing defendants’ supposedly protected conduct as involving the submission of false data for the purpose of inflating reimbursement rates. It held that the defendants were using anticompetitive means for the purpose of economic gain, which was not entitled to immunity under Noerr-Pennington or as protected free speech.

The Court further held, in a case of first impression, that some of the defendants were immune from liability under the North Carolina Nonprofit Corporation Act, which provides that directors of nonprofits are immune individually from civil liability for monetary damages, while others were not. Directors of non profits cannot act in bad faith, or engage in intentional misconduct for their own personal gain and then claim immunity under the Act.

The Court also discussed state action immunity and found that it did not apply, and also rejected the filed rate doctrine as a defense. Nor did intracorporate immunity apply, because not all of the persons involved were employed by the same entity.

In a small victory for the defendants, however, the Court dismissed the unfair and deceptive practice claims, determining that the services provided by the defendants were already extensively regulated, and therefore not the type of "regular, day to day" activities that the statute was meant to cover; and also dismissed the damages claims under N.C.G.S. §133-28.

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The Court addressed again the issue of indirect purchaser standing under the North Carolina antitrust laws in these consolidated cases. It held that although such purchasers do have standing, there are limitations on that standing which barred the claims of the plaintiffs and it granted defendants’ motion to dismiss.

In the first case, the plaintiffs were purchasers of automobile tires whose price had been affected by collusion on the price of rubber. In the second, the plaintiffs were credit card holders who claimed they had paid higher prices for goods as a result of illegal tying arrangements by the credit card issuers.

After a thorough discussion of the history of recognition of indirect purchaser claims in North Carolina, the Court determined that it would apply a multifactor test to determine whether plaintiffs had standing, including a consideration of (1) whether the plaintiff is a consumer or competitor in the allegedly restrained market, (2) the directness of the impact on the plaintiff, (3) whether there exist other indirect purchasers in the distribution chain who are more directly impacted by the alleged violatin, (4) the speculative nature of the damage claims, and (5) the risk of duplicative recovery and danger of complex apportionment of damages."

It analyzed each case under this approach and held that neither class of plaintiffs had standing.

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Defendants’ Brief In Support of Motion to Dismiss

Defendants’ Reply Brief in Support of Motion to Dismiss

Defendants’ Supplemental Brief in Support of Motion to Dismiss

Plaintiff’s Supplemental Brief in Opposition to Motion to Dismiss

This action sought to enjoin a merger involving a publicly traded company. The Court addressed whether the action was derivative or direct under Delaware law. If it was derivative, the Court held that the complaint suffered from three flaws: it was not verified, the corporation had not been joined as a party, and there were no allegations with respect to demand futility as required by North Carolina law.

The Court held, under Delaware precedent, that a shareholder claiming that the merger price is the product of a breach of the directors’ duty of loyalty, as a result of the directors being conflicted or acting in bad faith, is entitled to make a direct claim. The Court further held that a Revlon claim is a direct claim, because the injury results from the diminished value that a shareholder receives in the merger process. As the Court put it, "the treasury of the shareholder is depleted, not the treasury of the corporation."

The Court discussed the analysis to be followed when a shareholder seeks to enjoin a merger. It held that if there is no competing offer, the shareholder must make "a particularly strong showing on the merits" in order to obtain the injunction because of the potential loss of the merger premium.

Plaintiff contended that the Special Committee of the company’s board, which had approved the merger, was not independent because the members of the board sat on the boards of each others’ companies, and that they vacationed together. The Court found that these challenges to directorial independence were merely personal and business relationships. One director had served as outside counsel to the company, and had been paid legal fees. The Court held that "the receipt of legal fees by a director’s law firm does not, by itself, demonstrate that director’s lack of independence."

The Court further found that the board was not required to conduct an auction. It had conducted a market check. Nor were the directors required to disclose the benefit of merger synergies or to obtain a study which quantified the synergies. Nor were the directors required to disclose the existence of derivative lawsuits pending against the company in the merger proxy, and that those claims would be extinguished as a result of the merger. There furthermore was no diversion of the merger consideration to the company’s president, who sold property to the buyer and obtained a new employment contract as a result of the merger.

The Court noted that the plaintiff had failed to make a statutory inspection request under Delaware law before filing its complaint, and that he had not waited for the merger proxy to be filed before he filed suit.

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The Court granted summary judgment on plaintiff’s claim for interference with prospective economic advantage. The Court found that there was a "high standard" for such a claim, and that plaintiff was required to show, with specificity, the future contracts that plaintiff would have obtained but for the alleged interference.

Plaintiff’s claim for interference with its existing contracts also failed, because the alleged contracts were simply purchase orders from customers for goods. The mere acknowledgment or receipt of a purchase order does not create a contractual obligation.

Furthermore, the allegedly breaching party had acted in order to protect its legitimate business interests. Those included eliminating the plaintiff as a middleman for the sale of its goods, and controlling the sub-licensing of its intellectual property.

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