You Can't Appeal That! Or Can You?

You may remember the case of Out of the Box Developers, LLC v. Logicbit Corp.  It has spawned a couple of interesting discovery decisions.  One was on subpoenas to third parties, another involved nearly $40,000 in sanctions for attorneys' fees against two of the Defendants for failing to comply with a discovery order.

Now there's something new in that case.  Judge Gale followed that nearly $40,000 sanctions order  with an October 4th Order ruling that the Defendants had violated a Protective Order by posting on the internet  information which it had obtained during discovery.  He allowed the Plaintiff some limited discovery on the extent of the protective order violation, and deferred his ruling on sanctions "until a later date."

I blinked when the Defendants filed a notice of appeal  the same day that the Order was entered.  Can you even appeal a discovery ruling?  Isn't it interlocutory?  The appealability of non-final judgments is not an issue I focus on, though it does seem like half of the output from the North Carolina Court of Appeals involves a discussion whether an appeal is interlocutory.  If you like reading about that issue or other appellate procedure quirks, the North Carolina Appellate Practice blog discusses them frequently.

Did the Defendants care if the October 4th Order was immediately appealable?  Maybe not.  Maybe they thought that even if they ended up having their appeal dismissed as interlocutory by the COA a year down the line, at least they would have delayed the discovery contemplated by the Order.

Their next step was to ask Judge Gale for a stay of all proceedings in the Business Court while their appeal proceeded. 

That motion was denied by Judge Gale, who ruled last week in a November 1st Order that his October 4th Order was not immediately appealable.  Now, wait, you are thinking.  The trial court can't do that, can it?  Isn't it an issue for the appellate court?

Well, the North Carolina Court of Appeals has held that a trial court can determine whether its own Order is immediately appealable:

The trial court has the authority. . .  to determine whether or not its order affects a substantial right of the parties or is otherwise immediately appealable. See Utilities Comm. v. Edmisten, Attorney General, 291 N.C. 361, 365, 230 S.E.2d 671, 674 (1976); Veazey, 231 N.C. at 364, 57 S.E.2d at 382-83; T & T Development Co., 125 N.C.App. at 603, 481 S.E.2d at 349; Benfield v. Benfield, 89 N.C.App. 415, 420, 366 S.E.2d 500, 503 (1988).

 RPR & Assocs., Inc. v. University of North Carolina, 153 N.C. App. 342, 348, 570 S.E.2d 510, 514 (2002).

So what's next for the Defendants?  Apparently, a motion in the Court of Appeals.  The RPR & Associates case says that:

Pursuant to Appellate Rule 8, a party may apply to the appellate courts for a stay when the trial court chooses to proceed with the matter. See N.C.R.App. P. 8 (2002).

Id.  The Defendants stated in a November 4th filing that they intend to file a Petition for a Writ of Supersedeas.  [Update: That Petition was filed on November 6th.]

It might be that the parties will never get to the merits of this case, with all the wrangling over discovery issues.

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