It is hard to base your case on a breach of fiduciary duty when there is a contract in place between the parties. Contracting parties owe no special duties to each other beyond the terms of the contract. Branch Banking & Tr. Co. v. Thompson, 107 N.C. App. 53, 61, 418 S.E.2d 694, 699
I’m a business litigator in North Carolina, with Brooks Pierce McLendon Humphrey & Leonard, LLP.
I grew up in New York, went to college there (at Union College in Schenectady), and then came to North Carolina to law school at UNC-Chapel Hill. I clerked for United States District Judge Frank Bullock of the U.S. District Court for the Middle District of North Carolina after graduating, and then joined Brooks Pierce.
The North Carolina Business Court sent a message to all lawyers practicing in the Business Court last week in Barclift v. Martin, 2018 NCBC 5. Judge Gale said in the ruling that:
The Court is publishing this Order & Opinion to provide guidance to the practicing bar on the statutory process for designating
You probably think that you can avoid having a confidentiality agreement struck down by an NC court because it doesn’t have to meet the stricter standard applied to non-compete agreements.
The NC Business Court’s Opinion this month in Duo-Fast Carolinas,, Inc. v. Scott’s Hill Hardware & Supply Co., 2018 NCBC 2 may get you…
Judge Gale’s approval last week of a class action settlement, in In re Krispy Kreme Doughnuts, Inc. Shareholder Litigation, 2018 NCBC 1 gives me another opportunity to rail against disclosure only settlements. You know that I don’t like them. If you don’t know that, I’ve written on this subject several times. Like here…
The Defendant in SQL Sentry, LLC v. ApexSQL, LLC, 2017 NCBC 105 was alleged to have copied the Plaintiff’s software program which was designed to make "resource intensive T-SQL queries. . . in the Microsoft enterprise database platform, SQL Server." Op. Par. 5. (Ask your IT person).
Adding insult to injury, the Defendant marketed the…
The North Carolina Rules of Civil Procedure are fairly identical to the Federal Rules of Civil Procedure. In fact, I am hard pressed to think of any substantial differences.
But the lack of one word contained in FRCP 14 — "original" — but omitted from the parallel NC Rule made all the difference in the…
You’ve probably never had to decide what it means to agree to arbitrate. Usually, there is a written provision that references the AAA Rules and includes a consent to AAA’s procedures as to the appointment of the arbitrator(s) and the conduct of the procedure. And most usually, the word "arbitration" is used in the…
You probably thought that you would never again have to argue that a demand on a corporation’s board of directors before filing a derivative action should be excused because it would have been futile.
That’s because the North Carolina Legislature amended NC corporate law in 1995 to make clear that a demand on the corporation…
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"
I don’t think that there is anything worse than having a client get subpoenaed in a case to which it isn’t a party. It didn’t want to be drawn into someone else’s problem, to have to scour its records to respond to an unanticipated and intrusive request for documents, and to have to deal with the expense of an outside lawyer to handle the mess.
The good news is that Rule 45 provides greater protection to a non-party responding to a subpoena than it does to a party responding to discovery. Judge Conrad of the NC Business Court observed in a decision last week, Arris Group, Inc. v. CyberPower Systems (USA), Inc., 2017 NCBC 57, that “[t]he courts have an obligation to protect nonparties from burden and expense imposed without sufficient justification.”(quoting Bank of Am. Corp. v. SR Int’l Bus. Ins. Co., 2006 NCBC LEXIS 17, at *16. Op. ¶13.
He outlined some of those protections:
- the issuing party must “take reasonable steps to avoid imposing an undue burden or expense on a person subject to the subpoena.”Id. at *11 (quoting N.C. R. Civ. P. 45(c)(1)). Op. ¶13.
- Also,“'[t]he court shall quash or modify the subpoena if’ the recipient demonstrates the existence of any enumerated grounds for objection, including privilege, unreasonableness,and undue burden." Op. ¶14 (quoting N.C.R. Civ. P. 55(c)(5)).
- Furthermore, "[w]here the subpoena requests trade secrets or other confidential information, Rule 45 provides additional safeguards: the court may “quash or modify the subpoena” unless the issuing party “shows a substantial need for the testimony or material that cannot otherwise be met without undue hardship.” N.C. R. Civ. P. 45(c)(7) Op. ¶14.
Judge Conrad also relied on some federal court decisions on the difference between party and non-party status when dealing with discovery matters. He said that:
federal courts have also stressed the “distinction between a party and nonparty” in applying the Federal Rules of Civil Procedure. Beinin v. Ctr. for the Study of Popular Culture, No. C 06-2298 JW (RS), 2007 U.S. Dist. LEXIS 22518, at *6 (N.D. Cal. Mar. 16, 2007). Although parties to litigation must accept the “travails [of discovery] as a natural concomitant of modern civil litigation,” “[n]on-parties have a different set of expectations.” Papst Licensing GmbH & Co. KG v. Apple, Inc., No. 6:15-cv-1095, 2017 U.S. Dist. LEXIS 51274, at *9 (N.D. Ill. Apr. 4, 2017). Accordingly, “the fact of nonparty status may be considered by the court in weighing the burdens imposed in the circumstances.” Katz v. Batavia Marine & Sporting Supplies, Inc., 984 F.2d 422, 424 (Fed. Cir. 1993); see also Intermec Techs. Corp. v. Palm, Inc., No. C09-80098 MISC WHA, 2009 U.S. Dist. LEXIS 132759, at *7 (N.D. Cal. May 15, 2009)(holding that protections apply “doubly when the respondent is a non-party”).
Op. ¶15 (emphasis added).
So how did Delta Products (the non-party recipient of the Defendant’s subpoena) fare against this backdrop of accommodation to non-parties? Delta came out pretty well, although not unscathed.