North Carolina Business Litigation Report

History Of The North Carolina Business Court

The Business Court was formed in 1995.  Judge Ben F. Tennille was the first Judge of the Court, appointed by the Chief Justice of the North Carolina Supreme Court in 1996.  That appointment was pursuant to Rule 2.2 of the North Carolina General Rules of Practice, which provides that the Chief Justice may "designate one or more superior court judges as special judges to hear and decide complex business cases. . . ."  

Rule 2.2 contains commentary on the reasons behind the formation of the Business Court, which was a recommendation of the North Carolina Commission on Business Laws and the Economy.  The Commision noted the lead of Delaware's Chancery Court in the area of specialized courts hearing matters involving corporate law:

many national corporations incorporate in the state of Delaware because of that state's Chancery Court which provides a high level of judicial expertise on corporate law issues. It also observed the desirability of a state having a substantial body of corporate law that provides predictability for business decision making. Also, it is essential that corporations litigating complex business issues receive timely and well reasoned written decisions from an expert judge.

Over the last 12 years, the Business Court has issued nearly 150 "published" opinions (those given an official "NCBC" citation) and numerous unpublished decisions on significant legal issues affecting consumers, shareholders, and businesses operating in North Carolina.

If you are interested in the history of the Court, this article published in the Journal of the North Carolina Banking Institute is excellent.  And if you are delving into that subject, it is worthwhile to read the Report issued by the North Carolina Chief Justice's Commission on the Future of the North Carolina Business Court.  The Commission recommended an expansion of the Court, which led to the addition of Judge Albert Diaz and Judge John Jolly to the Court.  An article about the recent expansion of the Court written by Ben Norman, a Brooks Pierce lawyer who clerked for Judge Tennille, is here.

Judge Tennille reported to the North Carolina Legislature on the first several years of the Court, from 1996-2000, in a detailed report.  Another report, for 2000-2001 is here.  The most recent report, for 2006-2008 is here

The Business Court described its history as follows, in a previous version  of its website:

The North Carolina Commission on Business Laws and the Economy (the "Commission") was established by Governor Hunt in April 1994 and charged with recommending "any needed changes in existing statutes and regulations which affect the operation of businesses in North Carolina.

With particular focus given to Chapter 55 of the North Carolina General Statutes, the Commission was to recommend any needed new statutes, rules, and regulations designed to assure that North Carolina offers a legal environment providing the flexibility and support to allow businesses to operate successfully in this state and to attract businesses to locate and incorporate here.

In January of 1995, the Commission issued a report recommending, among other things, that North Carolina establish a business court. In doing so, the Commission noted the high esteem in which the Delaware court system was held by the business community. While many states, including North Carolina, had amended their business laws to be more consistent with the Model Corporation Act, none had taken steps to make its court system as responsive and predictable as the Delaware Chancery Court in dealing with complex corporate issues.

To meet those specifications, the Commission recommended that the North Carolina Supreme Court amend Rule 2.1 to allow the Chief Justice to designate certain cases as complex business cases, and adopt Rule 2.2 to allow the Chief Justice to designate one or more special superior court judges to hear those special cases. Any judge so designated would be known as a Special Superior Court Judge for Complex Business Cases and would be required to write opinions in designated cases. The Commission recommended that the Governor appoint at least one expert in corporate law to be designated by the Chief Justice to hear complex business cases.

In the fall of 1995, the North Carolina Legislature appropriated the funds for an additional special superior court judge for a five year term. The Supreme Court amended Rule 2.1 of the General Rules of Practice for the Superior and District Courts to adopt the recommendation of the Commission and added Rule 2.2 to provide for designation of Special Superior Court Judge for Complex Business Cases. In January of 1996, Governor Hunt appointed Ben F. Tennille as a Special Superior Court Judge and Chief Justice Mitchell designated him as North Carolina's first Special Superior Court Judge for Complex Business Cases. He was reappointed for a five year term in October 2001


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Mack Sperling
Brooks Pierce, LLP
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