The North Carolina General Assembly has decided to legislate choice of law in commercial transactions.  The new statute, enacted in June, is called the "North Carolina Choice of Law and Forum in Business Contracts Act." It will be codified at N.C. Gen. Stat. §1G-1.

The Statute Applies Only To "Business Contracts"

The statute applies only to "business contracts."  That term is defined as: "[a] contract or undertaking, contingent or otherwise, entered into primarily for business or commercial purposes."  Specifically excluded from that definition are "consumer contract[s] or .

Continue Reading NC Legislature Decides To Legislate Choice Of Law Provisions In “Business Contracts”

I don’t usually write about decisions from the Delaware Court of Chancery because it’s rare for that Court to even mention North Carolina.  But a decision by that Court this week — in City of Providence v. First Citizens Bancshares, Inc., explicitly approves that Delaware corporations can, via a forum selection clause in their bylaws, specify that corporate law disputes be litigated in North Carolina courts.  So that decision is certainly worth note in this North Carolina-centric blog.

Here are the facts:  First Citizens Bank & Trust Company, which

Continue Reading The Delaware Court Of Chancery Can See Forever On A Clear Day (Even To North Carolina)

Everybody loves a penguin, or at least I think that is so.  But Penguin Toilets, the Defendant in Roth v. Penguin Toilets, LLC, 2011 NCBC 45, can’t be loving the result it got on its Motion to Dismiss, which was denied in the Business Court by Judge Murphy on Wednesday.

The Motion to Dismiss was based on Penguin’s argument that litigation against it had to be brought in Michigan and that North Carolina was therefore an improper venue.  This was premised on a forum selection clause in the LLC’s

Continue Reading A Forum Selection Clause Must Be “Mandatory” To Be Enforceable

The North Carolina Court of Appeals sent a pretty clear message last Tuesday  to out of state citizens filing claims for alienation of affection in North Carolina courts.  The message was don’t file your lawsuit here, even though North Carolina is one of the few states in the country that hasn’t abolished that tort.

The case was Bell v. Mozley.  Mr. Bell, a resident of South Carolina, sued Mozley, another South Carolina resident, for alienating the affections of Bell’s wife, and engaging in criminal conversation with her.  Mozley

Continue Reading North Carolina Court of Appeals Tosses Alienation of Affection Case

Yesterday, the United States Supreme Court delivered two of its most significant opinions on  the subject of personal jurisdiction in nearly twenty-five years (since Asahi Metal Ind. Co. v. Superior Court of California, 480 U.S. 102(1987)).  The new cases are J. McIntyre Machinery, Ltd. v. Nicastro and Goodyear Dunlop Tires Operations, S.A. v. Brown. (linked below)

In Goodyear, Justice Ginsburg authored a unanimous opinion in which the Court reversed a decision by the North Carolina Court of Appeals which she said had "confused" or incorrectly "blended" jurisdictional principles.  The plaintiffs

Continue Reading U.S. Supreme Court Turns Off “Stream Of Commerce” Jurisdiction At The Tap

The Court of Appeals on Tuesday of last week, in Speedway Motorsports Int’l Ltd. v. Bronwen Energy Trading, Ltd., unwound a year old decision by the Business Court. In that decision, Judge Diaz had ruled that a Defendant bank which had issued a letter of credit was bound to litigate in Switzerland a crossclaim involving the letter of credit. The judge dismissed the claims against the Bank, relying on a choice of forum clause specifying that litigation would take place in Geneva.  The forum selection clause was contained in

Continue Reading North Carolina Court Of Appeals: Bright Stars and Letters of Credit

The Fourth Circuit ruled today in Albemarle Corp. v. AstraZeneca UK Ltd. that it was required to interpret the forum selection clause negotiated by the parties under English law, which meant that the clause would be read as requiring litigation to be brought in an English court, even though the clause would have been  deemed permissive under American law and would have allowed the lawsuit at issue to be filed in the South Carolina court where it had in fact been filed.

The contract, which required AstraZeneca to buy an

Continue Reading The World Gets Even Flatter: Fourth Circuit Applies English Law And Enforces English Forum Selection Clause

The Business Court held today in Armacell v. Bostic that it had personal jurisdiction over an Italian company, L’Isolante, which hired a scientist, Bostic, away from a competitor.

The Plaintiff claimed that the hiring violated Bostic’s non-compete agreement, and that Bostic had also stolen "thousands of data files containing sensitive proprietary information and trade secrets."

The Business Court rejected the argument of L’Isolante that it was not subject to personal jurisdiction, finding that the Italian company had (1) pursued and offered employment to Bostic in North Carolina, (2) had

Continue Reading Hiring Of Employee In Violation Of Covenant Not To Compete Subjected New Employer To Personal Jurisdiction

This case from the North Carolina Business Court involves the world’s 29th richest man, the City of Detroit, and a $55 million default judgment.  Oh, and airplanes too.  Big ones.

All this and more was discussed in the Business Court’s decision today in Deutsche Bank Trust Company Americas v. Tradewinds Airlines, Inc.2009 NCBC 12 (N.C. Super. Ct. April 29, 2009). 

The $55 Million Default

The saga began when TradeWinds, an air freight carrier, obtained an entry of default against C-S Aviation in August 2004.  C-S was once

Continue Reading Business Court Casts Doubt On $55 Million Default Judgment

Today, the North Supreme Court made it clear that there can be personal jurisdiction over a corporate officer even if his only contacts with the state were in  his capacity as a corporate officer.

The case is Saft America, Inc. v. Plainview Batteries, Inc.The opinion reverses the April 2008 decision of the Court of Appeals, which had ruled in a split decision that the officer didn’t have sufficient minimum contacts with North Carolina to justify jurisdiction because he had no contact with the state in his "individual

Continue Reading NC Supreme Court Rules That There Was Personal Jurisdiction Over Corporate Officer