Bill Summary for S 853 (2013-2014)

Summary date: 

Jun 11 2014

Bill Information:

View NCGA Bill Details2013-2014 Session
Senate Bill 853 (Public) Filed Tuesday, May 27, 2014
Intro. by Rucho, Barringer.

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Bill summary

The Senate committee substitute to the 1st edition makes the following changes.

Amends GS 7A-27(a) to provide that an appeal lies of right lies directly to the North Carolina Supreme Court (Supreme Court) from any interlocutory order of a Business Court Judge which does any of the following: (1) affects a substantial right, (2) in effect determines the action and prevents a judgment from which an appeal might be taken, (3) discontinues the action, and (4) grants or refuses a new trial. Requires appeals under new subdivisions (2), mandatory complex business cases, and (3), interlocutory orders, to GS 7A-27(a) to be made in accordance with the North Carolina Rules of Appellate Procedure applicable to civil cases. Applies to actions designated as mandatory complex business cases on or after October 1, 2014.

Amends GS 7A-45.3 to direct the presiding Business Court Judge to issue a written opinion in connection with any order granting or denying a motion under GS 1A-1, Rule 12, 56, 59, or 60, or any order finally disposing of a complex business case.

Amends GS 7A-45.4 regarding the designation of an action as a complex business case to permit any party to designate an action involving a material issue related to certain controversies as a mandatory complex business case. Makes clarifying changes in identifying an action that may be designated as a mandatory complex business case. Adds as a condition which must be met in contract disputes that all the parties must consent to the designation as a mandatory complex business case. Deletes requirement that a civil action under GS 105-241.17 be designated as a mandatory complex business case by the petitioner or the plaintiff. Applies to actions commenced or petitions filed on or after October 1, 2014.

Amends GS 7A-45.4(e) to provide that if a party files an opposition to the designation as a mandatory complex business case within 30 days of the Notice of Designation, the opposition must state all the grounds on which the opposing party objects to the designation and any grounds not asserted will be deemed conclusively waived. Also provides that within 30 days after an order is entered staying a pending action under subsection (g) of this section, which provides that the Superior Court is to stay an action required to be designated but has not been until is designated as a mandatory complex business case, any party opposing the stay must file the objection with the Business Court stating all the grounds for the objection. Provides that any grounds not asserted are to be deemed conclusively waived. Provides that a party disagreeing with the decision may appeal in accordance with GS 7A-27(a) (was, appeal to the Chief Justice of the Supreme Court). Applies to actions commenced or petitions filed on or after October 1, 2014.

Amends GS 7A-45.4(c) to delete the option of sending a copy of the Notice of Designation by fax. Applies to actions commenced or petitions filed on or after October 1, 2014.

Amends subsection (g) to require the party designating the action as a mandatory complex business case to pay the filing fee required under GS 7A-305(a)(2). Applies to actions commenced or petitions filed on or after October 1, 2014.

Provides that nothing in this section is intended to permit actions for personal injury cases grounded in tort to be designated as mandatory complex business cases. Applies to actions commenced or petitions filed on or after October 1, 2014.

Enacts new GS 55-11-11, Merger to effect a holding company reorganization. Sets out six terms and definitions to be used in this section, including company official, holding company, and surviving entity. Provides that, unless expressly required by articles of incorporation, no vote by the shareholders is required to authorize a merger with or into a single direct or indirect wholly owned subsidiary of the constituent corporation if eight specified conditions are satisfied, including that the constituent corporation and the direct/indirect wholly owned subsidiary of the constituent corporation are the only constituent entities to the merger, and the directors of the constituent corporation become or remain the directors of the holding company upon the effective time of the merger. Provides that if the organizational documents of the surviving entity do not contain certain, specified provisions as outlined in the act, then the organizational documents must be amended in the merger to contain the specified provisions. Allows organizational documents to be amended in the merger to reduce the number of classes and shares of capital stock or other equity interests. Effective August 1, 2014.

Provides that no provision of this act or provision found in an entity’s organizational documents can be deemed or construed to require approval of the shareholders of the holding company to elect or remove directors/managers/managing members of the governing body of the surviving entity.  Sets out three provisions which apply from and after the effective time of a merger adopted by a constituent corporation by its board of directors and without a vote of shareholders, including that to the extent a shareholder of the corporation, immediately prior to the merger, had standing to institute or maintain derivative litigation on behalf of the constituent corporation, than nothing in this act limits or extinguishes that standing. Effective August 1, 2014.

Sets out certain requirements for certifying a plan of merger pursuant to these provisions. Requires the secretary or assistant secretary to certify the plan of merger. Provides that no certification is required if a certificate of merger or consolidation is registered in lieu of filing the plan of merger. Requires plans to be filed in order to become effective. Effective August 1, 2014.

Amends GS 55-11-06, concerning the effect of merger or share exchange, updating statutory references.  Effective August 1, 2014.

Amends Article 26A of GS Chapter 1. Rewrites the title of Article 26A as Three-Judge Panel for Redistricting Challenges and for Certain Challenges to State Laws (was, Three-Judge Panel for Redistricting Challenges).

Adds new subsections to GS 1-267.1 to provide that except as provided in subsection (a) of this section, any challenge to the validity on its face of an act of the General Assembly must be transferred under GS 1A-1, Rule 42(b)(4), to Wake County Superior Court (Court) to be heard and determined by a three-judge panel of the Court, organized as prescribed by subsection (b2) of this section. Requires the Chief Justice of the Supreme Court to appoint three resident superior court judges to a three-judge panel of the Superior Court of Wake County to hear challenges to the validity of an act of the General Assembly on its face. Specifies the organizational structure of the three-judge panel, including the requirement for representation of different regions of the state and replacing members as necessary. Prohibits entering an order or judgment based on a finding that an act of the General Assembly is facially invalid based upon either the North Carolina or United States Constitution except by this three-judge panel. Provides that this section applies only to civil proceedings, and nothing in this section is to be construed as applying to a defendant in a criminal proceeding or to proceedings in which GS Chapter 15A is applicable.

Amends GS 1-81.1 to provide that in an action seeking injunctive relief to stay enforcement, operation, or execution of an act of the General Assembly based on an allegation that the act is unconstitutional on its face under the US or NC constitution, venue lies exclusively with the Wake County Superior Court. Makes conforming changes to GS 1A-1, Rule 42, Consolidation; separate trials.

Amends GS 1A-1, Rule 62, adding a new subsection (h) to clarify that where a trial court grants injunctive or declaratory relief restraining the enforcement or execution of an act of the General Assembly against a party in a civil action, the trial court shall stay the relief granted pending appeal. Provides that this subsection only applies when the state or a political subdivision of the state is a party in the civil action. Declares that this subsection does not apply to facial challenges heard by a three-judge panel under GS 1-267.1.

Amends GS 7A-27 to provide that an appeal lies of right directly to the Supreme Court from any order or judgment of a court, either final or interlocutory, that holds that an act of the General Assembly based on the US or NC constitution is unconstitutional on its face. Makes a conforming change to GS 7A-27.  

The provisions on the 3-judge panel are effective on July 1, 2014, and apply to any claim filed on or after that date.

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