If you have a business dispute in North Carolina that’s headed to litigation, the court in which the lawsuit is heard can be an important strategic factor. If you’re planning on filing a lawsuit – particularly in a complex or high-stakes case – court options should be carefully considered. And if you’ve been sued, don’t assume that you’re always stuck with the court that the other party chose.
Typically, lawsuits in North Carolina for amounts over $25,000 are filed in Superior Court in a county that has some connection with the case (often, where one of the parties is located). However, some cases might be eligible for federal court. Also, other specialized state-court options may be available.
Federal court is not available for every dispute. But it is sometimes an option – in cases involving a “federal question” (a federal law is involved) or where there is “diversity jurisdiction” (the parties in the case are from different states and the amount in dispute exceeds $75,000).
Business Court & “2.1” Cases
Other options are also sometimes available within the North Carolina court system. Notably, North Carolina offers a Business Court that is specially designed for hearing complex and high-stakes business cases. Cases can be heard in Business Court if they involve issues such as corporate governance, securities, antitrust, “intellectual property” like trademarks or trade secrets, or business-to-business contracts in which at least $1 million is in dispute. These types of cases are considered ‘mandatory” Business Court cases, where the Business Court is required to take the case, if requested. In addition, in certain other circumstances where the Business Court would not otherwise be required to take the case, “complex business” or “exceptional” cases can be assigned to a Business Court judge or another judge with special areas of expertise. These types of cases are called “2.1” cases – referring to a rule of court that allows local judges to recommend the assignment of a specialized judge.
Weighing the Options
In deciding where to file a business lawsuit in North Carolina – or whether to attempt to change the court in which a plaintiff filed suit against you – various factors should be considered:
- The benefit of an assigned judge. Generally, in North Carolina state court, civil lawsuits are not assigned to one judge to hear all the proceedings. If you have several issues that come before a judge during the course of a lawsuit, you could have several different judges be involved with your case. If you have a complex case that takes time for a judge to really understand in depth, it may be beneficial to be in Business Court or federal court (where particular judges get assigned to cases).
- Judicial expertise. While I find that judges in courts across North Carolina generally try to work hard and be fair, not every judge is going to view a complex business case in the same way. For instance, Business Court judges generally have backgrounds as business litigation attorneys and spend their days focused on business disputes. They are necessarily going to have a different perspective than the average Superior Court judge – who, for example, may be a former criminal prosecutor who spends the majority of his or her time presiding over cases about crimes and car crashes. If your case involves federal law, it may similarly be advantageous to be in federal court, where judges are more familiar with federal law.
- Judicial capacity. Generally, North Carolina judges do not have judicial clerks (employees who help do research and other tasks for the judge). But Business Court and federal court judges do. The amount of time and attention that the court will be able to devote to meticulously considering your case may differ, depending on the court.
- Timelines. Different courts may take different amounts of time to resolve a case. It is never clear which court will handle a case the quickest. But, as an example, I have had cases in federal court where I have waited many months to get a ruling on a preliminary motion in the case. The case would have been completed in state court by the time it really got started in federal court.
- “Home cooking” concerns. If you’re not in North Carolina and get sued by a North Carolinian in a North Carolina state court, you may want to consider federal court, if you have concerns about whether a North Carolina court would favor a North Carolinian. Similarly, if you were sued in a county in which you think your opponent “knows all the judges,” a transfer to Business Court might result in the case being assigned to a judge in a different county.
- Presentation style. Are your legal arguments most effectively presented in a lengthy written brief, or in a quick oral presentation? Federal court or Business Court is usually best where you need to provide a lot of written explanation. Regular state courts usually depend more on oral presentation. If it is important to you to make presentations in a technology-friendly courtroom, federal court or Business Court is often best.
- Procedural rules. Federal and state courts have different rules regarding court procedures. Likewise, the Business Court has its own procedural rules that differ from other state courts. These procedural rules may significantly affect, for example, the process for how “discovery” information is exchanged between the parties.
- Cost. Which court will be most cost-efficient is difficult to predict. Often federal court or Business Court can incur more costs, from higher filing fees to more attorney time needed to write briefs and comply with additional procedural rules. However, sometimes a pretrial motion that is carefully examined by a judge who is well-educated in the applicable law can favorably resolve a case that would “drag on” in another court.
Elliot has practiced law for over 20 years and is a member of the Federal, North Carolina and Forsyth County bar associations. He is an experienced litigator with major case experience in state and federal courts and in private arbitrations.