The Court found that the actions of the defendants in pirating away employees and accounts of the plaintiff exceeded the bounds of fair and ethical competition and therefore constitute unfair and deceptive practices.

The Court referred to defendants’ conduct as "surreptitious and intentional," and undertaken while the employees solicited were still employed by the plaintiff. This activity had enabled the plaintiff to build competitive operations in a matter of days, through its "orchestrated, en masse, secret recruitment."

On the trade secret claim, the Court found that the plaintiffs’ "compilation of information, including its special pricing information, customer information (identity, contacts and requirements of its rental customers), personnel and salary information, organizational structure, financial projections and forecasts, utilization rates, fleet mix by market, capital and branch budget information, and cost information, when taken together constitutes trade secrets."

The Court also found sufficient evidence to make out a claim for conspiracy.

The Court rejected defendants’ claim that the claims were barred by laches. It also rejected defendants’ counterclaim that the lawsuit was a sham and brought to hurt its business. The Court found that the lawsuit had been brought with a realistic expectation of success and that it was immunized under the Noerr-Pennington doctrine.

Finally, the Court drew an adverse inference from the failure of some of the defendants to testify.

Full Opinion

The issue was whether plaintiff, which had presented a letter of intent to purchase the a non-party bottling company, had a valid and enforceable agreement. The Court found that the letter of intent was an agreement to agree at a future date which was subject to a future, more complete acquisition agreement, and it therefore was not enforceable. The Court further found that the letter of intent contained conditions precedent which had not been met.

Plaintiff’s claims for tortious interference with contract were rejected because the Court found that there was no contract, although the Court observed that summary judgment would have been appropriate in any event on the basis of justification. The defendant, a competitor of plaintiff, was competing with plaintiff for the purchase of the bottling company and plaintiff could not show that it was acting with bad faith or malice so as to justify its tortious interference claim.

Full Opinion

The case considered post-trial motions, after plaintiff did not prevail on its claims for defamation and unfair and deceptive practices. The court awarded costs for expert witness fees, pursuant to its discretionary authority under under N.C.G.S. §6-20. The Court also awarded attorneys’ fees pursuant to N.C.G.S. §75-16.1, which permits an award of attorneys’ fees when the plaintiff knew, or should have known, that its unfair and deceptive trade practices action was frivolous. THe Court found that the plaintiffs had prosecuted their case in a frivolous and malicious manner, and that they had pursued it not to recover actual damages, but rather to "punch a lottery ticket or as an ‘industry cause.’"

Full Opinion

The defendant told its insureds that that could not have the plaintiff body shop repair their vehicles. The plaintiff sued for defamation.

The Court granted summary judgment on plaintiff’s claims of libel per se. The corporate plaintiff was unable to show that any potential customers regarded the claim as being defamatory on its face. The individual plaintiff, who was not named in the defamatory statement, was not entitled to argue that his name was highly identified with the company, or that he essentially "was the company" in the eyes of the public.

Summary judgment was denied, however, on the claim of libel per quod by the corporate plaintiff, as it was possible that the statement involved was capable of a defamatory meaning.

Defendant argued that its statements were protected by a qualified privilege, but the court found that there was a question of fact that precluded summary judgment.

Full Opinion

The issue here was whether a union’s health and welfare trust fund was a "multiple employer welfare arrangement" (a "MEWA") which was important for purposes of ERISA preemption. If the fund was a MEWA, it was subject to regulation by the State of North Carolina. If it was not a MEWA, it was subject to ERISA and the exclusive jurisdiction of the federal courts.

The Court found the fund to be a MEWA that should have been licensed by the insurance commissioner. This was a bad result for the defendant insurance brokers, who had sold the unlicensed insurance contracts of the fund.  The Court found that they were strictly liable for civil penalties under N.C.G.S. §58-33-95.

Full Opinion

This is a significant Business Court opinion on unfair competition. The defendants were a competitor of the plaintiff, and former employees of the plaintiff who had left to join the defendant. The first issue addressed by the Court was whether the former employees owed a fiduciary duty to their former employer. The Court found there was a question of fact whether the former employees who had served in management positions had the ability to dominate and influence their former employer, so it denied summary judgment on the issue whether those employees had fiduciary duties. Summary judgment was granted, however, as to some of the employees who the Court found had only basic management responsibilities. Authority over day to day operations, even with substantial discretion over such operations, is insufficient to make out a fiduciary duty.

On the merits of the claims, the Court noted that merely planning to work for another company or planning to start a new company is not unlawful behavior. The proper focus, the Court held, is upon the actions taken by the former employees in furtherance of a plan to compete. The Court granted summary judgment as to the employees who it had found might have had a fiduciary duty, as the only evidence before the Court of their pre-departure activities was that they had met and discussed the possibility of competing.

The Court denied summary judgment on plaintiff’s claim of tortious interference with prospective economic relations.

The claim for violation of the North Carolina Trade Secrets Protection Act also survived. The Court found that business plans, marketing strategies, and customer information could constitute confidential information protected under the Act. The substantial decrease in plaintiff’s business, and the simultaneous increase in defendant’s business, constituted circumstantial evidence that there had been a misappropriation.

A claim for unfair and deceptive practices also survived summary judgment, as did a claim for conspiracy. The Court denied summary judgment based on the defense of laches, finding that there had not been an unreasonable delay in bringing suit and that defendant was unable to show any prejudice as a result of the alleged delay.

Full Opinion

Reply Brief in Support of Motion for Summary Judgment

(All other briefs were filed under seal)

The plaintiffs moved, before class certification, to withdraw their allegations seeking class certification. The Business Court ruled that where a complaint is filed containing class action allegations and claims, those class claims may not be withdrawn, whether by voluntary dismissal, amendment to the complaint or simple failure to pursue class certification without court approval under Rule 23(c). The Court noted that class plaintiffs owe a fiduciary duty to absent class members, and class counsel owe those same fiduciary duties. The court found that notice of dismissal of the class claims would be required and required the submission of notice plans.

Full Opinion

This was a putative class action of sub-prime mortgage borrowers seeking recovery for what they claimed were illegal and excessive fees under North Carolina usury law. The Court certified the class after a thorough analysis of the nature of the claims, the adequacy of the proposed class representatives and their counsel, and making a specific finding as to numerosity. The Court also assessed whether class action treatment was the superior method for adjudication of the claims.

Full Opinion

The plaintiffs in this case sought the dissolution of a closely held corporation pursuant to N.C.G.S. §55-14-30(2)(ii) on the ground that the business of the corporation was being conducted to the unfair advantage of the majority shareholder. The Court found that dissolution was appropriate because the reasonable expectations of the majority shareholders were not being met.

Since the dissolution statute gives the corporation the opportunity to avoid dissolution by paying the oppressed shareholders the "fair value" of their shares, the Court moved on to a discussion of that concept. As it had in the Royals case, the Court considered market value, equitable considerations, practical considerations and changes in condition of the company from the market valuation date. It determined that it would be inappropriate to apply discounts for lack of control and lack of marketability. The Court also ruled that the purchase price could be paid over a period of 36 months.

Full Opinion