The North Carolina Business Court was formed in 1995, largely inspired by Delaware’s Chancery Court. Our state recently returned the favor: Delaware now has created its own business court division of its Superior Court, sparked by the experiences of North Carolina and sixteen other states. Delaware’s new Complex Commercial Litigation Division (“CCLD”) shares some common elements with our Business Court, but differs in other aspects.
For the core details of the CCLD, we recommend the summaries from two blogs that you should be reading anyway: the Delaware Corporate and Commercial Litigation Blog and the Delaware Business Litigation Report. In addition, if you’d like to see how business courts in other states are structured, you should check out the appendix to the report of the Delaware special committee that was appointed to survey such courts.
Like our Business Court, the CCLD features assignment of a case to a single judge from cradle to grave and more uniform, intense, and proactive case management than in the courts of general civil jurisdiction. Here are a few interesting comparisons and contrasts between the CCLD and our Business Court:
Topical Definitions of Jurisdiction: To qualify for mandatory complex business designation in North Carolina, a case must fit into at least one of seven defined categories: corporate or other entity law, securities law, antitrust law, state trademark or unfair competition law, intellectual property law, Internet / e-commerce / biotechnology, and certain tax cases. The CCLD, on the other hand, has a list of categories that will be excluded per se from its jurisdiction: personal, physical, or mental injury cases; mortgage foreclosure cases; mechanics’ lien cases; condemnation proceedings; and any case involving an exclusive choice of court agreement where a party to the agreement is an individual acting primarily for personal, family, or household purposes or where the agreement relates to an individual or collective contract of employment.
Choice of Court Agreements: Speaking of that last clause, the CCLD has jurisdiction over any case not otherwise excluded in which the parties have selected the CCLD through an exclusive choice of court agreement. There is no corresponding provision in our statutes or rules that permits parties to contractually "select" the Business Court if a case does not qualify through mandatory jurisdiction or Rule 2.1 practice, although it would be interesting to see how many North Carolina businesses would utilize such clauses in their contracts if permitted.
Amount in Controversy: As long as the subject matter is not excluded, the CCLD will have jurisdiction over any case with $1 million or more in controversy. North Carolina does not have any such qualifying amount. Nevertheless, a large amount in controversy may influence the decision of a Senior Resident Superior Court Judge to recommend complex business designation under Rule 2.1 (or exceptional case designation under Rule 2.1).
Judicial Assignments: North Carolina has three Special Superior Court Judges who focus on cases assigned to the Business Court. They occasionally are drafted to fill in for other Superior Court judges for regular civil or even criminal trial calendars, but that is an irregular occurrence. The three judges of the CCLD, in contrast, apparently will continue to hold regular civil terms hearing both CCLD cases and cases that do not qualify for CCLD designation. CCLD cases automatically will take priority over non-CCLD cases on a judge’s calendar.
Designation Procedure: In North Carolina, a mandatory complex business case is designated by filing a Notice of Designation with the Clerk of Superior Court, with copies to the Chief Justice and the Chief Business Court Judge. Cases outside mandatory complex business jurisdiction can be assigned to the Business Court upon motion to the Senior Resident Superior Court Judge, who makes a recommendation to the Chief Justice, who ultimately determines whether or not such a case will be assigned. Delaware makes it easier: a qualifying case can be designated by typing the appropriate four-letter code on Delaware’s equivalent of our AOC’s Civil Action Cover Sheet (AOC-CV-751, for those of you scoring at home). In both states, a party opposing designation can challenge it by filing the analogue of a federal court motion to remand, and in both states, such a motion is resolved by the presiding judge of the specialized court.