Hanesbrands Inc. v. Fowler

IN THE SUPREME COURT OF NORTH CAROLINA
No. 438A15
Filed 21 December 2016
HANESBRANDS INC.
v.
KATHLEEN FOWLER
Appeal pursuant to N.C.G.S. §§ 7A-27(a) and 7A-45.4(e) from an order entered
on 5 November 2015 by Judge James L. Gale, Chief Special Superior Court Judge for
Complex Business Cases appointed by the Chief Justice pursuant to N.C.G.S. § 7A-
45.4, in Superior Court, Forsyth County. Heard in the Supreme Court on 31 August
2016.
Constangy, Brooks, Smith, & Prophete, LLP, by Robin E. Shea and Jill S.
Stricklin, for plaintiff-appellee.
Law Office of David Pishko, P.A., by David Pishko, for defendant-appellant.
JACKSON, Justice.
In this case we consider whether defendant Kathleen Fowler may appeal an
interlocutory order of the North Carolina Business Court overruling her opposition
to designation of this case as a mandatory complex business case. We conclude that
defendant has failed to show that this order affects a substantial right as required for
appeal of an interlocutory order pursuant to N.C.G.S. § 7A-27(a). Accordingly, we
dismiss defendant’s appeal.
HANESBRANDS INC. V. FOWLER
Opinion of the Court
On 20 August 2015, plaintiff Hanesbrands Inc. filed a complaint in Superior
Court, Forsyth County alleging that defendant breached five different stock grant
agreements that she entered into during her employment with plaintiff. Plaintiff
seeks to recover monetary damages of $462,366—the alleged value of certain of its
stock units and options granted to defendant pursuant to those agreements. That
same day, plaintiff filed a Notice of Designation of its case as a mandatory complex
business case pursuant to N.C.G.S. § 7A-45.4(a) on the basis that the case involved
both “the law governing corporations” and a dispute “involving securities.” The
designation received preliminary approval from the Chief Justice of the Supreme
Court of North Carolina on 21 August 2015. See N.C.G.S. § 7A-45.4(f) (2015).
Defendant filed an opposition to the designation on 23 September 2015, which
was overruled by order of Judge James L. Gale, Chief Special Superior Court Judge
for Complex Business Cases, who was assigned to the case. On 12 November 2015,
after filing an answer to plaintiff’s original complaint, defendant appealed the
Business Court’s order to this Court pursuant to N.C.G.S. §§ 7A-45.4(e) and 7A-27(a).
Plaintiff argues that this Court should dismiss defendant’s appeal because the
Business Court’s order is interlocutory and defendant failed to show that the order
affects a substantial right. We agree.
-2-
HANESBRANDS INC. V. FOWLER
Opinion of the Court
When a party disagrees with a Business Court Judge’s ruling on an opposition
to the designation of a case as a mandatory complex business case, “the party may
appeal in accordance with G.S. 7A-27(a).” N.C.G.S. § 7A-45.4(e) (2015). According
to section 7A-27(a):
Appeal lies of right directly to the Supreme Court in any of
the following cases: . . .
(3) From any interlocutory order of a Business
Court Judge that does any of the following:
a. Affects a substantial right.
b. In effect determines the action and prevents
a judgment from which an appeal might be
taken.
c. Discontinues the action.
d. Grants or refuses a new trial.
Id. § 7A-27(a) (2015).
“An interlocutory order is one made during the pendency of an action, which
does not dispose of the case, but leaves it for further action by the trial court in order
to settle and determine the entire controversy.” Veazey v. City of Durham, 231 N.C.
357, 362, 57 S.E.2d 377, 381 (1950) (citing Johnson v. Roberson, 171 N.C. 194, 88 S.E.
231 (1916)). To appeal from an interlocutory order, the appellant must show that the
order affects a “substantial right which he might lose if the order is not reviewed
before final judgment.” City of Raleigh v. Edwards, 234 N.C. 528, 530, 67 S.E.2d 669,
671 (1951) (citations omitted). “[A]n appeal from an interlocutory order will be
dismissed as fragmentary and premature unless the order affects some substantial
-3-
HANESBRANDS INC. V. FOWLER
Opinion of the Court
right and will work injury to appellant if not corrected before appeal from final
judgment.” Goldston v. Am. Motors Corp., 326 N.C. 723, 726, 392 S.E.2d 735, 736
(1990) (quoting Stanback v. Stanback, 287 N.C. 448, 453, 215 S.E.2d 30, 34 (1975)).
“It is the appellant’s burden to present appropriate
grounds for . . . acceptance of an interlocutory appeal, . . .
and not the duty of this Court to construct arguments for
or find support for appellant’s right to appeal[.]” Where the
appellant fails to carry the burden of making such a
showing to the court, the appeal will be dismissed.
Johnson v. Lucas, 168 N.C. App. 515, 518, 608 S.E.2d 336, 338 (citation omitted)
(quoting Thompson v. Norfolk S. Ry. Co., 140 N.C. App. 115, 121, 535 S.E.2d 397, 401
(2000) (second and third alterations in original)), aff’d per curiam, 360 N.C. 53, 619
S.E.2d 502 (2005). Similarly, in appeals from interlocutory orders, the North
Carolina Rules of Appellate Procedure require that the appellant’s brief contain a
“statement of the grounds for appellate review,” which must allege “sufficient facts
and argument to support appellate review on the ground that the challenged order
affects a substantial right.” N.C. R. App. P. 28(b)(4). “The appellants must present
more than a bare assertion that the order affects a substantial right; they must
demonstrate why the order affects a substantial right.” Hoke Cty. Bd. of Educ. v.
State, 198 N.C. App. 274, 277-78, 679 S.E.2d 512, 516 (2009) (discussing N.C. R. App.
P. 28(b)).1
1 Although opinions of the Court of Appeals are not binding on this Court, the wider
scope of the Court of Appeals’ jurisdiction has allowed it to develop a more robust body of case
law regarding interlocutory appeals.
-4-
HANESBRANDS INC. V. FOWLER
Opinion of the Court
We have determined that a “substantial right is ‘a legal right affecting or
involving a matter of substance as distinguished from matters of form: a right
materially affecting those interests which [one] is entitled to have preserved and
protected by law: a material right.’ ” Gilbert v. N.C. State Bar, 363 N.C. 70, 75, 678
S.E.2d 602, 605 (2009) (alteration in original) (quoting Oestreicher v. Am. Nat’l Stores,
Inc., 290 N.C. 118, 130, 225 S.E.2d 797, 805 (1976)). Recognizing that
“the ‘substantial right’ test for appealability of interlocutory orders is more easily
stated than applied,” we have determined that it is “usually necessary to resolve the
question in each case by considering the particular facts of that case and the
procedural context in which the order from which appeal is sought was entered.”
Waters v. Qualified Pers., Inc., 294 N.C. 200, 208, 240 S.E.2d 338, 343 (1978).
In her appeal from the Business Court’s interlocutory order in this case,
defendant alleges that the designation of her case as a mandatory complex business
case affects a substantial right. Specifically, defendant argues that requiring her “to
defend a case filed against her by a large, public corporation in a special court
established primarily for disputes between businesses” denies her the substantial
right to “have this matter heard in the same manner as ordinary disputes involving
ordinary citizens.” Defendant also argues that the “Business Court Judge’s decision
in this action is akin to the denial of a motion for change of venue.” Although
defendant appears to suggest that she may suffer some unspecified prejudice from
this case being tried in Business Court, she has not explained how she would be
-5-
HANESBRANDS INC. V. FOWLER
Opinion of the Court
prejudiced. She has not identified a specific “material right” that she would lose if
the order is not reviewed before final judgment nor explained how the order in
question would “work injury” to her if not immediately reviewed. See Gilbert, 363
N.C. at 75, 678 S.E.2d at 605; Goldston, 326 N.C. at 726, 392 S.E.2d at 736.
Furthermore, the General Statutes provide that if a case is not “designated a
mandatory complex business case” it may still be designated as “a discretionary
complex business case pursuant to Rule 2.1 of the General Rules of Practice for the
Superior and District Courts.” N.C.G.S. § 7A-45.4(f). Rule 2.1 affords the Chief
Justice wide latitude to designate a case as a complex business case. Specifically,
[t]he Chief Justice may designate any case or group of cases
as (a) “exceptional” or (b) “complex business.” A senior
resident superior court judge, chief district court judge, or
presiding superior court judge may ex mero motu, or on
motion of any party, recommend to the Chief Justice that
a case or cases be designated as exceptional or complex
business.
Gen. R. Pract. Super. & Dist. Cts. 2.1(a), 2016 Ann. R. N.C. 3 (emphasis added). We
note that in Delaware, another state having a specialized business court, the
Administrative Directive establishing that state’s Complex Commercial Litigation
Division specifically excludes certain types of cases from designation, including “any
case involving an exclusive choice of court agreement . . . where the agreement relates
to an individual or collective contract of employment.” James T. Vaughn, Jr.,
President J., Del. Super. Ct., Administrative Directive of the President Judge of the
Superior Court of the State of Delaware No. 2010-3: Complex Commercial Litigation
-6-
HANESBRANDS INC. V. FOWLER
Opinion of the Court
Division 1-2 (2010). In contrast, neither our statute nor Rule 2.1 create any such
exclusions for cases involving individuals or for specific classes of cases. Merely
asserting a preference for a forum other than the Business Court absent a specific,
legal entitlement to an exclusion from designation is insufficient to support
defendant’s contention that this matter was analogous to a venue change and is
therefore immediately appealable. Consequently, we conclude that defendant has
not demonstrated that the Business Court’s interlocutory order is immediately
appealable. Accordingly, we dismiss defendant’s appeal.
DISMISSED.
Chief Justice MARTIN and Justice EDMUNDS did not participate in the
consideration or decision of this case.
-7-