Bill Summary for S 648 (2013-2014)

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Summary date: 

Jun 11 2014

Bill Information:

View NCGA Bill Details2013-2014 Session
Senate Bill 648 (Public) Filed Tuesday, April 2, 2013
Intro. by Jackson, Meredith, J. Davis.

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Bill summary

Senate committee substitute makes the following changes to the 2nd edition.

Deletes proposed GS 66-67.6 regarding the offense of employment fraud.

Deletes proposed changes to GS 24-5.

Deletes proposed Article 8 in GS Chapter 75, Predatory Third-Party Financing of Litigation Actand instead enacts new Article 8,Abusive Patent Assertions, in GS Chapter 75. Makes bad faith assertions of patent infringement an unfair and deceptive trade practice. Defines the following terms as they are used in this Article: (1) affiliate, (2) demand, (3) institution of higher education, (4) interested party, (5) operating entity, and (6) target. Provides non-exclusive factors that the court can weigh in determining whether actions are taken in good or bad faith. Declares that patent litigation can be a significant burden on companies. Provides criteria for the court to set a bond of up to $500,000 upon a finding that a target has established a reasonable likelihood that a person has made a bad-faith assertion of patent infringement in violation of this Chapter. Includes specifications regarding enforcement under this Article, remedies, and damages. Provides that a court may award costs and fees, including reasonable attorneys' fees, to a defendant who prevails in an action brought under this section.

Amends Article 26A of GS Chapter 1. Rewrites the title of Article 26A asThree-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 acts 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.

Adds a Part VI, which establishes the ten-member Joint Select Committee to Study the Need for Reform in the Laws Governing Apportionment of Tort Liability (Committee). Calls for five members of the Senate appointed by the President Pro Tempore of the Senate and five members of the House of Representatives appointed by the Speaker of the House of Representatives. Provides that vacancies are to be filled by the appointing authority. Makes provisions for staffing, determining a quorum, designating co-chairs, and the general operations of the Committee. Directs the Committee to study issues related to the need for reform of the laws governing apportionment of tort liability and successor liability, including adoption of comparative negligence and the abrogation of joint and several liability, and any other issues related to tort liability. Provides that the Committee may make a final report, including any proposed legislation to the 2015 General Assembly upon its convening. Directs the Committee to terminate upon the filing of its final report or the convening of the 2015 General Assembly, whichever comes first.

Amends new Article 2A,Transparency in Third-Party Contracting by Attorney General. Deletes provision requiring the posting of the request for proposals from private attorneys on the Attorney General's website. Provides that the executed contingency fee contract and the Attorney General's written determination are not considered public records until the conclusion of the legal proceedings or other matters for which the services of the private attorney were retained. Requires attorneys submitting a proposal to pay a $50 fee. Deletes the staggered contingency fee scale which was calculated based on the amount of any damages in the action for which the private attorney was contracted and instead limits the contingency fee, exclusive of reasonable costs and expenses, to no more than 22.5 percent. Authorizes the court to reduce the private attorney's fee after the state agency has reached a settlement or obtained an award, at the court's discretion. Requires that all records maintained in this section be made available to the state auditor for oversight purposes.Effective when the act becomes law (was, October 1, 2013).

Enacts new GS 55-7-50 to provide that inclusion in a corporation's articles of incorporation of a provision declaring that the state courts of North Carolina are the exclusive forum for a derivative shareholder lawsuit is effective and enforceable against any shareholder who voted in favor of an amendment to include the provision and any shareholder who purchased shares after the provision was adopted. Applies to all articles of incorporation and amendments to those articles adopted on or after the effective date.

Adds a severability clause providing that if any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of the rest of this act in whole or part.

Except as otherwise indicated, this act is effective when it becomes law.