North Carolina Business Litigation Report

Business Court Allows Confidential Settlement Of Individual Claims In Class Action Suit

Thomas Cook Printing Co. v.  Subtle Impressions, Inc.2008 NCBC 17 (N.C. Super. Ct. Oct. 24, 2008).

On October 24th, the North Carolina Business Court approved the Plaintiff's withdrawal of class action claims under the Federal Telephone Consumer Protection Act (which prohibits the transmission of "unsolicited advertisements" to fax machines) and a settlement of the Plaintiff's individual claims.

The Court's approval was necessary as a result of the opinion of the North Carolina Court of Appeals in Moody v. Sears Roebuck and Co., 664 S.E.2d 569 (N.C. App. 2008), and Judge Tennille's recent Order interpreting that ruling.

What's interesting about the opinion is that the Court permitted counsel for parties to submit the documents supporting the settlement in camera.  It also permitted the parties to keep confidential the terms of the settlement with the individual Plaintiff.

Although Judge Diaz recognized that the settlement papers filed with the Court were "public records and, thus, are presumed to be available for public inspection pursuant to the North Carolina Public Records Act," he reasoned as follows in agreeing to keep them confidential:

In Virmani v. Presbyterian Health Servs. Corp., 350 N.C. 449, 463, 515 S.E.2d 675, 685 (1999), the North Carolina Supreme Court held that  “a trial court may, in the proper circumstances, shield portions of court proceedings and records from the public[.]” 

In the absence of the class action allegations, the parties "could have settled their dispute confidentially and filed a voluntary dismissal without any oversight from this Court." 

The amount being paid, as described by Judge Diaz, was "relatively insubstantial, particularly when viewed in the context of the high-dollar business disputes typical of this Court’s docket."

The case did not implicate substantial public policy concerns.  There had not been an interest voiced by the media or the public in the Plaintiff's allegations.

Maintaining the confidentiality of the settlement was in the best interests of justice, in the absence of any prejudice to the putative class members or the public at large.

The Business Court has in the past refused to certify class actions under the Federal Telephone Consumer Protection Act, in Blitz v. Agean, Inc., 2007 NCBC 21 (N.C. Super. Ct. June 25, 2007) and Blitz v. Xpress Image, Inc., 2006 NCBC 10 (N.C. Super. Ct. Aug. 6, 2006).  The Agean case is  on appeal to the North Carolina Court of Appeals and is fully briefed.

 

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Mack Sperling
Brooks Pierce, LLP
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