Mandatory Jurisdiction

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Long time readers of this blog know that you can’t designate a case limited to a covenant not to compete to the Business Court.  That’s the Lifecare case, from 2008, in which Judge Tennille said "every suit based upon a breach of a restrictive covenant . . . [will not] give rise to a mandatory business case based upon ‘unfair competition.’"

Judge Tennille intimated in Lifecare that additional allegations surrounding the breach of the covenant might give rise to the Business Court’s mandatory jurisdiction.  He said:

For example, allegations of

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Continue Reading Getting A Covenant Not To Compete Case Into The Business Court

We can’t say it better than Mack Sperling did about eight months ago:  "If you are thinking of designating a case to the Business Court because the Complaint raises allegations that the corporate veil should be pierced, stop.  Those types of allegations, without more, aren’t enough to invoke the mandatory jurisdiction of the Court. "

In case you’re wondering, the Business Court has not changed its mind since November.  Earlier today, in Bullard v. Liberty Healthcare Services of Mary Gran Nursing, LLC, Judge Tennille on his own motion denied the…

Continue Reading Piercing the Corporate Veil Is Still Not a Basis for Mandatory Business Court Jurisdiction

The Court granted an Opposition to Notice of Designation of Action as a Mandatory Complex Business case, ruling that:

This matter appears on the face of the pleadings to involve enforcement of a restrictive covenant contained in a settlement agreement. No additional issues involving the identification, delineation and protection of trade secrets appear from the pleadings and response to the Opposition. Nor does there appear to be an unfair trade practice issue unrelated to the enforcement of the restrictive covenant. Where, as here, the only critical issue is the enforceability

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Continue Reading Polytec, Inc. v. Andrews, December 23, 2009 (Tennille)(unpublished)

The Court denied an opposition to the designation of a case as a mandatory complex business case, holding that "[t]he allegations in the Complaint involve a breach of fiduciary duty and the failure to pay dividends and fall within the mandatory jurisdiction of the Business Court."

Full Opinion

Opposition to Designation

Response in Opposition to Designation

ComplaintContinue Reading Blackburn v. L.E. Wooten & Co., December 10, 2009 (Tennille)(unpublished)

The Court denied a motion opposing the designation of this case as a mandatory business case, holding that "this matter is a derivative action by a minority shareholder which involves issues relating to the law governing corporations," therefore "conclud[ing] that the allegations in the Complaint fall within the mandatory jurisdiction of the Business Court."

Full OpinionContinue Reading Tyson v. Tyson, December 10, 2009 (Tennille)(unpublished)

The Court overruled an opposition to designation in a case involving "real estate developments which failed during the current financial crisis."

The Court found these types of cases "especially suited" for consideration by the Business Court because "(1) they involve numerous parties, (2) they involve complex issues, (3) they involve current issues relating to real estate development that will result in written opinions of use to the bar and business community, (4) they may involve resolution of multi-state legal issues, (5) they will require coordination with bankruptcy courts and other…

Continue Reading Abraham v. Jauregui, November 25, 2009 (Diaz)(unpublished)

If you are thinking of designating a case to the Business Court because the Complaint raises allegations that the corporate veil should be pierced, stop.  Those types of allegations, without more, aren’t enough to invoke the mandatory jurisdiction of the Court. 

There was a short order on that subject yesterday in CCE Development Corp. v. Jebara Investments, LLC, in which the Court held that "[p]iercing the corporate veil alone is insufficient to establish mandatory jurisdiction." 

There was a similar ruling earlier this year, in Robert N. Pulliam, CPA/ABV PLLC …

Continue Reading Veil Piercing Allegations Aren’t Enough For Mandatory Business Court Jurisdiction

The Court had mandatory jurisdiction over Plaintiff’s complaint because it involved the interpretation of a shareholders agreement, and also because it involved the rights to manufacture certain products and use certain processes covered by patents.

Full Opinion

ComplaintContinue Reading McKinnon v. CV Industries, Inc., April 20, 2009 (Tennille)(unpublished)

Once the Business Court takes jurisdiction over a case, that jurisdiction remains in place for the life of the case, regardless of dismissals of parties or changes in the nature of the claims.

That was the ruling of the Court last week in Mattress Now, Inc. v. KS Bank, Inc. in response to the Plaintiff’s Motion to Remand.

The case had been designated to the Business Court by the Defendant Bank, which was one of two defendants. The Plaintiff challenged that designation, but the Court rejected Plaintiff’s arguments in…

Continue Reading Business Court Jurisdiction Is Forever

The Business Court now has jurisdiction over utility pole disputes between communications providers and municipalities.  That surprising expansion of the Court’s jurisdiction is thanks to a new law passed at the just concluded session of the North Carolina Legislature.

New section 62-55 of the General Statutes requires a municipality that "owns or controls poles, ducts, or conduits" to allow a "communications service provider" to have access to those resources at "just, reasonable, and nondiscriminatory rate." (The statute doesn’t apply if the poles, ducts, or conduits are subject to federal regulation…

Continue Reading The NC Business Court Now Has Jurisdiction Over Utility Poles