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State’s business courts straining under caseload

Volume, complexity of cases keeps judges working late and clients wondering when decisions are coming

Business Court Chief Judge John R. Jolly, Jr. in his Raleigh office. Photo by Mike Zellmer

Earlier this year, a committee of lawmakers asked Business Court Chief Judge John R. Jolly Jr. if he thought the Legislature should again raise the fee for filing cases in the state’s three business courts.

The fee had jumped from $200 to $1,000 two years ago, which sparked concern and grousing among lawyers and litigants. The number of cases assigned to the Business Court fell by nearly 30 percent, though only for a few months.

In fact, case filings quickly rebounded and the courts are busier now than ever – so busy that some lawyers worry that Jolly and the two other Business Court judges will not be able to juggle their caseloads if they don’t get some help. And help requires money.

But when Jolly was asked about another fee increase to perhaps $5,000 or even $10,000, he warned legislators that while it would likely chill case filings, it could also keep important disputes involving issues of first impression out of the Business Court. This would be detrimental to the court’s ability to advance case law, he said.

“We get some cases that have real pivotal issues that can influence other cases but don’t involve a lot of money. These litigants may not be able to afford the litigation,” Jolly said. “I would be nervous about a filing fee that discourages the filing of cases that have potential legal importance and don’t involve a lot of money.”

What Jolly would rather have is another law clerk to help with the daunting research that is needed for the lengthy opinions required in Business Court cases. Still, he is cautious about asking for additional staff since Business Court judges already have one clerk each, which is one more clerk than the state’s other trial court judges get.

“In today’s economy,” he said, “you don’t want to push the envelope.”

‘We’re behind’

Since early 2006, the Business Court in Raleigh, where Jolly presides, went from having 15 active cases to 106. Between 2009 and 2010, Jolly’s caseload grew by 10 cases while the Greensboro court’s caseload increased by eight and Charlotte’s dropped by four cases.

Raleigh, being the state capital, simply attracts more litigation than the other courts, Jolly said. His heavier caseload can also be attributed to Judge James L. Gale’s recent appointment to the Greensboro court. Gale was a longtime partner at Smith Moore Leatherwood, a firm that had more than 20 cases pending in Greensboro when Gale took the bench. Many of those cases were subsequently passed to Jolly.

He sent a few cases to the Charlotte court, but was careful not to overwhelm Judge Calvin E. Murphy, who just joined the bench last December.  Murphy has roughly 90 pending cases and Gale has about 75 active cases on his docket, according to Jolly.

Murphy and Gale asked Jolly to speak with Lawyers Weekly on their behalf.

“I think we’re all going through the same thing,” he said. “We’re behind.”

The caseloads may not seem daunting, but Business Court judges must issue opinions whenever they dispose of a case, unlike other trial court judges, and their cases are almost always complex. The writing requirement is particularly demanding – 60-page opinions are not uncommon – and can cause significant delays.

“We’re also holding court, and that takes us away from the focus on the opinion writing, which is the most time-consuming thing we do,” Jolly said. “Writing these opinions is a fascinating thing, but it’s also very laborious.”

Furthermore, Business Court judges are sometimes asked to sit on regular civil and criminal sessions when another judge is unexpectedly called away. For instance, just a few weeks ago Gale held regular civil court in Guilford County. And Jolly presided over a first-degree murder trial two years ago.

Extinguishing fires

The three Business Court judges set their own calendars and they often prioritize cases, moving disputes involving pressing issues, such as a sudden foreclosure, to the top of the heap.

“We always look to the fires burning,” Jolly said.

But Jolly adds that if the caseload continues to grow, which appears likely, the Business Court eventually is going to be in dire need of more clerks and maybe even a few new judges to keep up. Otherwise, the delays become more severe and it will be difficult to give priority to emergency cases.

“The Business Court is moving as fast as good order will permit, but there is inadequate staff to manage the caseload they have,” said Wilmington attorney George Rountree III,  a senior partner at Rountree, Losee & Baldwin.

John “Buddy” Wester, a former North Carolina Bar Association president who practices complex civil litigation at Robinson, Bradshaw & Hinson in Charlotte, said he wishes the Business Court had six judges and additional law clerks.

He understands that the court has thick dockets and thin resources, but he said it can be hard to explain that to clients when they’ve waited months for a decision while their business hangs in the balance.

“The clients want to know, like every litigant in every kind of case, where do I stand?” he said. “And how do I plan on moving forward with my business when much of what lies ahead will be affected by the outcome of this litigation?”

Catharine B. Arrowood, a business litigator and partner at Raleigh’s Parker Poe, has waited six months or longer for the Business Court to rule on a motion to dismiss. She said she understands that the judges are overburdened, but fears that if the delays get worse businesses may begin to leave the state – an irony, considering that the court was established in 1996 partly in order to attract business to the state.

“The availability and quality of our business courts, which has been outstanding, has been a big plus in our economic developments in North Carolina,” she said. “I think we have to worry about whether we’re putting that in jeopardy.”

More cases, more time

• Taken together, the state’s three business courts have seen a jump both in the number of cases they handle and the time those cases stay open.

• In 2009, Greensboro’s business court had 80 open cases and their average age was 416 days. In 2010, the court had 88 open cases with an average age of 606 days.

• Charlotte’s business court had 64 open cases in 2009 and their average age was 406 days. The number of open cases decreased in 2010 to 61 and the average age dropped to 401 days.

• Raleigh’s business court had 88 open cases in 2009 and their average age was 529 days. In 2010, the court had 98 open cases with an average age of 631 days.

*Source: Administrative Office of the Courts annual reports

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