As we pause to catch our breaths before the new year begins, we’re taking a look back at some of the most notable stories covered in North Carolina Lawyers Weekly in 2014. These were among the most followed issues and topics our reporters focused on over the past 12 months. The list is not in order of importance nor is it meant to be comprehensive. Rather, consider it a holiday letter sort of update.
Thanks for reading NC Lawyers Weekly this year. We hope you’ll stay with us in 2015 as we bring you the latest on these stories as they develop and many others.
Judge strikes down NC ban on same-sex marriages
Perhaps the single biggest change to North Carolina law in 2014 came on Oct. 10, when U.S. District Court Judge Max Cogburn struck down the state’s ban on same-sex marriages, making North Carolina one of many states where such bans were struck down this year. Four days later, a federal judge in another district, William Osteen, also ruled that the ban was unconstitutional.
The decisions came after the U.S. Supreme Court refused to hear an appeal of the 4th Circuit’s decision to uphold a ruling that struck down a very similar ban on same-sex marriages in Virginia, opening the way for same-sex marriages throughout the circuit. Cogburn’s decision was published late on a Friday, and by the end of the following Monday, hundreds of same-sex couples across the state had received marriage licenses.
After the 4th Circuit’s decision, North Carolina Attorney General Roy Cooper declined to continue defending the state’s same-sex marriage ban, saying that there were no valid legal arguments remaining in its defense. Leaders of the state’s Republican-controlled legislature intervened to defend the ban.
State Senate President Pro Tem Phil Berger has said he will introduce a bill to let magistrates refuse to issue marriage licenses to same-sex couples, although legal experts say such a law would likely be unconstitutional. Judge John Smith, director of the state’s Administrative Office of the Courts, issued a letter to the state’s magistrates explaining that any magistrates who refused to comply with the court’s order would be violating their oaths and could be dismissed.
It’s expected that the U.S. Supreme Court will ultimately decide the legality of same-sex marriage bans. In November, the 6th Circuit became the first federal circuit to rule that bans on same-sex marriages are legal, creating a split between the courts that the Supreme Court will need to resolve.
NC Supreme Court election sees big spending, little change
2014 saw the most expensive judicial election campaign in North Carolina history, as candidates vied for four of the seven seats on the state’s Supreme Court. In the first judicial election since the state repealed its program to publicly finance judicial campaigns, the eight candidates raised and spent over $5.2 million, much of it earmarked for TV ads.
On Nov. 4, newly appointed Chief Justice Mark Martin won a thumping re-election over challenger Ola Lewis, and incumbents Justices Robin Hudson and Cheri Beasley defeated challengers Eric Levinson and Mike Robinson, respectively. Court of Appeals Judge Sam Ervin defeated former colleague Robert N. Hunter, who had also been appointed to the Supreme Court just before the election. Beasley’s margin of victory was so close that a recount was required to confirm it.
In September, Lawyers Weekly published an investigatory analysis confirming the perception that the court’s published output has been declining in recent years. In 2014, the court published just 17 authored opinions, the lowest total in at least decades. The court has been criticized in many corners for its declining output, and the candidates largely agreed that increasing the number of published opinions was an important objective.
Although there was a four-month lull in opinions, perhaps owing partly to the election, the Supreme Court took a large step toward increasing that output on Dec. 19, when it published 15 authored opinions, almost doubling its total for the year. On Oct. 10, the court had surprised observers by taking the unusual step of acting on its own motion to assume jurisdiction over five cases that were pending before the Court of Appeals. The Supreme Court will now hear those appeals directly.
In Court of Appeals elections, voters re-elected Donna Stroud, who ran unopposed, and Mark Davis to seats on the court, and elected Lucy Inman and John Tyson to two open seats.
New law offers a lesson in unintended consequences
A new North Carolina law that forces magistrates to order draconian bonds for some defendants accused of minor offenses has led to some eyebrow-raising results since it became effective just before the start of 2014.
The new law, which sailed through the legislature little noticed in July 2013, provides that if a defendant is picked up for a charge while already out on bond, judicial officials must set a secured appearance bond of at least double the amount of the most recent existing bond, or at least $1,000 if the previous charge carried no bond.
The requirement to double a defendant’s bond applies regardless of the age of the previous charge, or the seriousness of the new one. As such, cases are arising that no one seems to have anticipated before the law was passed, where defendants who are out on bond for serious offenses are later charged with relatively minor ones. In such cases, magistrates now have no choice under the new rules but to hand out draconian bonds for the low-level offense.
Some judges said the law had required them to set bonds of up to $60,000 for defendants charged with the very lowest level of misdemeanors. Such defendants were previously often released on a written promise to appear in court. Defense attorneys have likened the new law to “taking a hammer to an ant.”
It remains to be seen whether the state legislature will have any interest in revisiting the law in the upcoming session. To date, no legislators have proposed making any changes.
Underfunding leads to court reporter shortage
Working with just over 2 percent of the state’s budget hasn’t been working out so well for North Carolina’s court system, illustrated by a shortage of court reporters that has caused trials to be delayed and lawyers to come out of pocket to hire reporters so their cases could move forward.
During a judicial forum at the Charlotte School of Law, Superior Court Judge Bob Bell said the state government, not individual attorneys, is responsible for adequately funding the court system.
“It’s simply not being done,” he said.
Mecklenburg County trial court administrator Todd Nuccio said that in the last few years, only the biggest case — the ones most likely to be heard on appeal — were assigned live court reporters. The others rely on audio recording.
One effort to save money resulted in pay for a court reporter’s transcript being cut in half, from $2.50 per page to just $1.25—the lowest rate in the country.
David Jester, who manages court reporters for the N.C. Administrative Office of the Courts, said that compensation is the “driving factor” in the court reporter shortage.
Nuccio believes even entertaining thoughts of replacing court reporters with recorders is foolish.
“We’re at a point where the public needs to understand, ‘Here’s the justice system that you’ve been given, and it requires resources,’” Nuccio said. “Here’s the level of justice you’re going to get with this level of resources. Is this what you want?”
Whether there is help in sight remains to be seen, officials say. The 2015-2016 state budget will start to take shape when the N.C. General Assembly reconvenes in January.
Legislature passes controversial three-judge panel provision
A controversial provision tucked into the state’s budget passed in August will require that any lawsuit alleging that a state law violates the state constitution, or federal law, must be heard by a special panel of three judges chosen by the state’s Supreme Court Chief Justice, instead of letting individual Superior Court judges around the state continue to hear such lawsuits.
The procedure is similar to the one used by the state for redistricting lawsuits, but no other state in the country uses such a procedure for constitutional challenges generally. The change is expected to make it harder for plaintiffs to challenge the legality of state laws after several laws passed by the legislature were struck down by trial court judges.
The law also strips the state’s Court of Appeals of authority to hear appeals of a ruling striking down any state law, requiring appeals to go directly to the state’s Supreme Court—but not in cases where laws are upheld.
The North Carolina Bar Association came out strongly opposed to the change, with both president Catharine Arrowood and executive director Allan Head speaking out against it.
Senate Republicans said the measure was necessary to prevent forum-shopping by plaintiffs. The language was placed in several Senate bills and stripped from the House version of bills multiple times before being included in the state budget after negotiations between the two chambers.
Those negotiations did lead to some compromises in the law. A previous version would have required the panel, if it deemed a law to be unconstitutional, to automatically stay its ruling until it could be heard on appeal. The ratified version simply gives the state and its agencies the right to immediately appeal any decision denying a motion for such an injunction or stay.
The law became effective Sept. 1 and applies to claims filed, or amended, to challenge a law after that date.
Suicide attack wrecks OBX law office
A fiery suicide attack on a law office in the Outer Banks ranks among the most shocking – and bizarre – legal stories of the year.
After learning that a man named Alan Lanier had driven a burning truck into the Twiford Law Firm in Moyock, Lawyers Weekly did digging and discovered Lanier’s connection with the firm.
Lanier believed that the Twiford firm had wronged him and his Russian girlfriend. The firm had represented her in a civil suit against her ex-husband, whom she accused of sex abuse and domestic violence. The case resulted in a $3 million settlement in 2010.
The girlfriend refused to pay Twiford for its work on her case so the firm bid on land that had belonged to her ex that was being auctioned off to pay the settlement. The firm intended to inflate the price of the property so it could recoup its legal fees from the sale.
Lanier also bid on the property but he lost to Twiford, which won the auction with a $250,000 bid – the land had been valued at nearly $2.5 million. About four years passed between the land deal and the day Lanier set fire to a hay bale in the bed of his pickup and drove through a wall of the Twiford law office.
Federal investigators determined that Lanier fatally shot himself in the head as his truck and the law office burned around him. The Twiford office was destroyed. No one other than Lanier was physically injured.
Twiford’s attorneys and staff in Moyock are working out of a rented space near the wrecked office, which is being rebuilt.
SCOTUS turns away Family Dollar
A gender discrimination suit against Family Dollar that raises issues regarding class certification in the wake of a landmark decision involving Wal-Mart seemed destined for the U.S. Supreme Court.
Family Dollar had strong amicus backing and an even stronger dissent from 4th U.S. Circuit Court of Appeals Judge Harvie Wilkinson, who supported the company’s position.
SCOTUSBlog, a website that reports on the Supreme Court but is not affiliated with the court, had named the case, Family Dollar Stores, Inc. v. Scott, as “Petition of the Day” and also included it in a list of petitions to watch because the cases had a “reasonable chance of being granted.”
But in the end none of that mattered. The Supreme Court denied Family Dollar’s petition for certiorari in June.
The Matthews-based discount stores chain had been appealing a ruling from the 4th Circuit that allowed the plaintiffs to have a second whack at class certification after being denied by the trial court.
The company had urged the Supreme Court to settle what it described as “several deep and persisting circuit conflicts regarding the doctrine of pendent appellate jurisdiction.” It also wanted the court to clarify confusion surrounding the commonality requirements for class certification.
The case is back in the U.S. District Court in Charlotte, where both sides are arguing over whether the plaintiffs can sue Family Dollar as a class. The class certification deadline is in late January.
Gasket maker dodges over $1 billion in asbestos liability
A decision handed down by a North Carolina bankruptcy court in January of this year may shake up the business of mesothelioma litigation, for which companies have set aside more than $30 billion since 1980.
Plaintiffs who suffer from mesothelioma, a rare and fatal form of cancer linked to asbestos exposure, had asked U.S. Bankruptcy Court Judge George Hodges to require Garlock Sealing Technology to set aside more than $1.2 billion to resolve asbestos claims against the company. Instead, Hodges assessed Garlock’s liability for present and future mesothelioma claims at only $125 million.
Typically in such cases, estimates of a company’s liability to mesothelioma litigation are based on the amounts it settled for in past cases. But Hodges ruled that such an analysis would not be reliable in Garlock’s case because “those values are infected with the impropriety of some law firms and inflated by the cost of defense.” Garlock’s attorneys said it was the first time a court has not accepted the settlement history as a means for estimating liability. A ruling in the plaintiffs’ favor would have effectively bankrupted the company, they said.
The battle has continued to rage since the ruling, with both Garlock and the plaintiffs’ attorneys accusing the other side of withholding evidence. Plaintiffs’ attorneys have asked Hodges to re-open the trial in which he assessed Garlock’s liability. Both sides presented arguments at a Dec. 4 hearing and await rulings from Hodges on their motions.
Garlock has also filed civil fraud and racketeering lawsuits against four law firms who represent mesothelioma claimants. Those suits remain ongoing.
Blue Cross wins big fight against health care providers
One of North Carolina’s biggest health insurers won a decisive victory earlier this year against the state’s largest physician organization in a high stakes dispute over reimbursement for radiology services.
The legal fight between Blue Cross & Blue Shield of North Carolina and the North Carolina Medical Society arose after the insurer tweaked its reimbursement policy for radiology services to avoid being charged for what it said were redundant fees that added up to about $30 million annually.
Blue Cross argued that it should only be billed once for so-called technical costs associated with radiology services, which cover the support staff that guide patients through MRI scans, for instance. Providers contended that they could bill for technical costs for each scan that was performed.
Wake County Superior Court Judge Donald Stephens’ ruling in favor of Blue Cross not only saved the insurer millions – at the expense of health care providers – but it also made it easier for insurers to change how they pay providers.
The Medical Society declined to appeal the decision, said its attorney, Todd Hemphill of Bode Hemphill Raleigh.
“That was the end of it,” he said.
Beltway owners denied class certification
A group of property owners whose lives have been put on hold by the long-delayed Winston-Salem Northern Beltway project suffered a setback in April when the state Supreme Court ruled that they could not sue as a class.
The divided court affirmed the denial of class certification to seven owner-plaintiffs led by the Beroth Oil Co. They wanted to join with hundreds of others who are in similar situations and sue the North Carolina Department of Transportation.
They have been asking the court to force the DOT to buy their properties at fair market value instead of leaving them in limbo while the state ponders building the planned 35-mile beltway around Winston-Salem.
The dispute hinges on the state’s Map Act, which allows the DOT to file project plans with the register of deeds and bring an indefinite halt to the development of land, homes or businesses that are in the way of the proposed road.
Despite the class certification setback, a growing number of people affected by the Map Act and the DOT’s foot dragging have joined the fight against the state.
So far, at least 114 people have filed a total of 93 lawsuits in the counties of Cleveland, Cumberland, Forsyth, Guildford, Pender, Robeson and Wake, according to an attorney for the plaintiffs, Matthew Bryant of Hendrick Bryant Nerhood & Otis in Winston-Salem.
After 20 years of delays, the state announced in November that construction was set to begin on the first segment of the Northern Beltway. Gov. Pat McCrory has stated publicly that he would seek $1 billion in revenue bonds for road construction projects throughout the state.
State introduces court for veterans
In late 2013, on the strength of a Governor’s Crime Commission grant, North Carolina opened its first veterans court in Harnett County.
Specifically created to assist military veterans in navigating the criminal justice system, the program provides intensive supervision and treatment, addressing underlying issues that may have been an impetus for behavior.
Mark Teachey, a retired Army officer and law enforcement officer, is the court’s coordinator. He believes programs like this are necessary, given certain statistics. For instance, one in five veterans suffers from post-traumatic stress disorder, he said. Nearly the same ratio has a substance abuse problem.
Some program participants have pleaded guilty to their charges, but those pretrial veterans who complete all four phases of the program and aftercare can become eligible to have their charges dismissed, significantly reduced or even expunged.
All participants are paired up with a mentor and connected with appropriate service providers. The court resembles a military proceeding.
“It helps re-establish that mind state back when they had that pride, wore that uniform, stood at attention and saluted that flag,” Teachey said. “This is a very supportive court and it really helps them when they know they have another veteran to help them walk that walk.”
Teachey had hoped for a successful 2014 and the program’s 96 percent retention rate and 94 percent reduction in alcohol and drug use among participants suggests that it was. He said the program provides the network that many former service members lost the day they were separated from service.
North Carolina’s second Veterans Court opened on Nov. 13 in Cumberland County.