Members, managers, directors, and executives of limited liability companies (“LLC”) are provided protections under North Carolina law which limit their personal responsibility for obligations incurred by the LLC.  This limitation includes liabilities incurred for professional negligence, malpractice, and other wrongdoing attributable to the LLC and other employees or members of the LLC.  There is, however, a limit to the limited liability protection provided under North Carolina General Statutes § 57C-3-30; and plaintiffs continue to attempt to impose personal liability on members and employees in LLCs.  So, what are the limits on the protection provided?  The recent North Carolina Superior Court opinion in Revolutionary Concepts, Inc. v. Clements Walker PLLC, et al., 2012 NCBC 14 (March 8, 2012) explores this question and points to previous North Carolina court opinions that address the same issue.  Below are five critical principles we can take away from the courts’ analyses in these cases:

…click here to read more

In the age of e-discovery, businesses across the nation have been challenged with seemingly insurmountable hurdles when facing litigation.  The costs of conducting e-discovery can be extraordinarily high, given the volumes of data often at issue in complex commercial litigation.  The recent case VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 2012 NY Slip Op 00658 (Jan. 31, 2012) decided by the New York State Supreme Court Appellate Division admonishes potential litigants that mishandling the e-discovery process comes at a much higher price.  Despite protests from litigants that the “reasonable anticipation” of litigation standard established in the federal courts by Zubulake v UBS Warburg LLC 220 FRD 212 (S.D.N.Y. 2003) and Pension Comm. of the Univ. of Montreal Pension Plan v Banc of Am. Sec., LLC., 685 F Supp 2d 456, 473 (S.D.N.Y. 2010) is too vague and provides no guidelines for establishing when a duty to preserve information arises, the EchoStar court upheld the Zubulake standard and imposed sanctions against Echostar for spoliation of evidence for failing to impose a timely litigation hold and failing to suspend routine deletion of electronic documents.  The sanction imposed: an adverse inference instruction, which can be outcome determinative in many cases.  EchoStar makes clear that the filing of a complaint is not the trigger that a company should be waiting for to begin efforts to preserve potentially relevant information.  So, when should one reasonably anticipate litigation? 

…click here to read more

   Former U.S. Supreme Court Justice Sandra Day O’Conner was likely happy to see the news of Governor Perdue’s Executive Order 86 which established the North Carolina Judicial Nominating Commission.  In 2010, former Justice O’Connor highlighted that the U.S. was the only nation in the world that had elections for its judges (at the state level) and admonished: “I know you have some public funding of elections, and it’s nonpartisan, but that doesn’t do enough. So I hope that someday you’ll think about something else in North Carolina.”  See here for former Justice O’Connor’s remarks.  Although judicial elections have not been eliminated, Governor Perdue decided that it was time to do something else inNorth Carolina about the selection of judges and issued Executive Order 86 in April 2011.  The commission was established to serve as a non-partisan advisory group that will seek and identify three qualified candidates to fill judicial vacancies in the offices of Chief Justice and Associate Justice of the Supreme Court, Judge of the Court of Appeals, and Judge of the Superior Court.  The Governor will select an appointee from the candidates identified by the commission.   

…click here to read more

   While it is difficult to find the right words to say, I want to say something to honor my friend who recently passed away.  Judge Christopher M. Collier was far too young and taken too suddenly for me to have been prepared to reflect on his life and the impact he had made on the world and those around him.  I have had a couple of weeks since his passing for the loss to sink in.  We are incredibly fortunate to have been touched by Chris Collier while he was with us. 

…click here to read more

   It ain’t over ‘til the fat lady sings…or a federal court withdraws its controversial opinion.  Although infrequently, courts do withdraw their opinions and several federal court opinions of interest have been withdrawn since being issued this year.  No doubt these opinions addressed hot topics, leading to controversy over the courts’ initial opinions and prompting the courts to wipe the slate clean for reconsideration.

…click here to read more

Most are aware of the noteworthy U.S. Supreme Court decision in AT&T Mobility v. Concepcion, 131 S.Ct. 1740, issued on April 27, 2011.  I addressed the implications of Concepcion in a previous blog. Concepcion has generated a lot of discussion and has been feared by some to be the “death knell” of the consumer class action.  But can the reach of Concepcion actually be much farther?  Will Concepcion be labeled the “death knell” of preliminary state administrative hearings as well?  The U.S. Supreme Court’s recent summary disposition of a Petition for Writ of Certiorari in the California state case Sonic-Calabasas A, Inc. v. Moreno raises these questions. 

…click here to read more

Over the last three years, the Supreme Court has issued a number of opinions that have given strength to arbitration agreements. The Court has reiterated that the Federal Arbitration Act (“FAA”) places arbitration agreements on equal footing with other contracts. As a result, corporations will be better able to use arbitration to safeguard against costly and lengthy individual and class actions. On August 5, 2011, I addressed these developments and their impact on corporate clients in the “Class Action Update” presented at the Network of Trial Law Firms “Litigation Management in a New York Minute” CLE event in New York City. There are several strategies that corporate clients should consider in order to capitalize on the Supreme Court’s leaning in favor of arbitration.

…click here to read more