Archive for April, 2024

N.C. Business Court Opinions, April 10, 2024 – April 23, 2024

By: Ashley Oldfield, Rachel Brinson, and Natalie Kutcher

Rockingham Cnty. v. NTE Energy, LLC, 2024 NCBC 23 (N.C. Super. Ct. April 15, 2024) (Davis, J.)

Key Terms: motion to dismiss; 12(b)(6); 12(b)(2); deferred ruling; piercing the corporate veil; civil conspiracy; facilitation of fraud; fraudulent inducement; account stated; promissory estoppel; attachment; joint enterprise; Rule 9(b)

Plaintiff Rockingham County’s amended complaint asserted thirteen claims relating to certain contracts between it and Defendant NTE Carolinas II, LLC (“Carolinas”), including claims for declaratory judgment and breach of contract solely against Carolinas, and for piercing the corporate veil, civil conspiracy/facilitation of fraud, and fraudulent inducement against all Defendants pursuant to a joint enterprise theory. Defendants moved to dismiss some or all of the County’s claims pursuant to Rules 12(b)(2) and 12(b)(6). In its discretion, the Court deferred ruling on Defendants’ 12(b)(2) motions and instead analyzed their 12(b)(6) motions.

Piercing the Corporate Veil. The Court found that the County failed to sufficiently allege the elements of piercing the corporate veil or joint enterprise liability because it did not allege that any Defendant exercised complete control over any other or which corporate forms the Court should disregard. Moreover, the amended complaint contained no specific allegations of a right on the part of each Defendant to govern and direct the actions of all the other Defendants in furtherance of the aims of the alleged joint enterprise. In dismissing the claim, the Court emphasized that the County largely lumped the Defendants together in its allegations without meaningfully differentiating between them or alleging specific and tangible acts of wrongdoing by them.

Fraudulent Inducement. The Court dismissed the fraudulent inducement claim without prejudice as to all Defendants because the County’s broad and conclusory allegations that Defendants acted fraudulently failed to satisfy Rule 9(b)’s heightened pleading requirements.

Civil Conspiracy/Facilitation of Fraud. The Court dismissed these claims because the amended complaint’s vague allegations did not provide sufficient specificity to satisfy the claims’ pleading requirements, such as the acts committed by each of the members of the alleged conspiracy that were committed in furtherance of said conspiracy.

Account Stated. The Court found that Carolinas’ liability for the sums sought by Rockingham County remained a disputed issue, and therefore dismissed the County’s claim for account stated.

Promissory Estoppel. Reinforcing that North Carolina law does not recognize an affirmative promissory estoppel claim for relief, the Court dismissed the County’s promissory estoppel claim against Carolinas with prejudice.

Attachment. The Court dismissed the attachment claim because the County failed to file the requisite affidavit showing entitlement to the remedy of prejudgment attachment, identifying the specific property to be attached, or explaining the requested amount of property to be attached. Moreover, the County failed to make sufficient allegations as to the alleged depletion of Carolinas’ assets justifying the requested remedy.


Yoder v. Verm, 2024 NCBC 24 (N.C. Super. Ct. April 19, 2024) (Bledsoe, C.J.)

Key Terms: Rule 12(b)(6); Rule 12(b)(1); settlement agreement; declaratory judgment; lack of a justiciable controversy; subject matter jurisdiction

Plaintiff was previously involved in litigation which was resolved by a written settlement agreement. The parties to the current action, with the exception of Defendant Healthcare VII, were all signatories to the settlement agreement. Plaintiff filed the current action alleging that the settlement agreement had not been complied with, seeking a declaratory judgment regarding the parties rights and obligations under the agreement, and asserting four causes of action for breach of the agreement. Plaintiff did not assert any claims for relief against Healthcare VII, alleging instead that it was joined as a party “to ensure a complete resolution of the issues in controversy.” Healthcare VII moved to dismiss pursuant to Rule 12(b)(6).

The Court concluded that Healthcare VII should be dismissed from the action under Rule 12(b)(1) because Plaintiff had failed to allege a justiciable controversy with Healthcare VII and the Court, therefore, lacked subject matter jurisdiction. Although the settlement agreement made reference to Healthcare VII and certain actions it might need to take, Healthcare VII was not a party to the agreement and therefore was not bound by its provisions.


BIOMILQ, Inc. v. Guiliano, 2024 NCBC 25 (N.C. Super. Ct. April 19, 2024) (Robinson, J.)

Key Terms: fiduciary duty; tortious interference; alienation of affection; loss of consortium; conversion; slander of title; defamation; trade secrets; property interference; UDTPA; false advertising; false passing off claim; fraud; fraudulent conveyance

This lawsuit arises out of a dispute between BIOMILQ and Defendants regarding certain human cell-cultured technologies and products. Defendant Guiliano and his wife, Strickland, previously formed 108Labs to explore biosynthesis of human milk and human milk immunoglobins. They subsequently began working with Counterclaim Defendant Egger and developed various intellectual property. BIOMILQ was later formed and began seeking funding. Relationships eventually deteriorated resulting in Strickland resigning from 108Labs. After BIOMILQ brought suit against Guiliano and 108Labs, they filed numerous counterclaims against BIOMILQ, as well as against new Counterclaim Defendants Egger and BEV, alleging, inter alia, that 108Labs had been divested of its intellectual property rights. BIOMILQ, Egger, and BEV (“Movants”) moved to dismiss most of the claims.

Claims against BIOMILQ only

Injunctive Relief. Since there is no standalone claim for injunctive relief in North Carolina, the Court dismissed this counterclaim without prejudice to Defendants’ ability to seek injunctive relief by motion, if appropriate.

Claims against Egger only

Breach of Fiduciary Duty. The Court dismissed this counterclaim because Defendants did not allege facts that supported a contention that Egger owed Defendants a fiduciary duty. Although Defendants argued that Egger owed a fiduciary duty as a “partner” with 108Labs, a careful review of the allegations showed that Defendants described Egger as an interloper into 108Labs’ affairs, not a partner.

Tortious Interference with Contract . This counterclaim was dismissed because the allegations failed to satisfy the pleading requirements for the fourth element of the claim–acting without justification. Defendants alleged only generally that Egger had no motive other than malice. Moreover, the counterclaim expressly provided a basis for Egger’s actions: competition.

Breach of Contract. Although Defendants adequately alleged a claim for breach of contract against Egger, the allegations demonstrated that the claim was time barred. The statute of limitations ran in March 2023, which was one month before Egger and BEV were added as third-party defendants.

Alienation of Affection. The Court dismissed this counterclaim due to Defendants’ failure to allege malicious conduct by Egger designed to alienate the affections of Guiliano’s wife. Defendants’ allegations focused only on Strickland and Egger’s business dealings and did not suggest that Egger was the cause of the dissolution of Strickland and Guiliano’s marriage.

Claims against BIOMILQ and Egger

Declaratory Relief. The Court dismissed this counterclaim as to Egger because it made no mention of her and, therefore, presented no actual controversy between her and 108Labs. The Court allowed the counterclaim to proceed as to BIOMILQ, because, although the allegations were not entirely clear, the Court was able to identify an existing controversy between Defendants and BIOMILQ regarding the ownership of certain intellectual property.

Constructive Fraud. The Court dismissed this counterclaim because Defendants made no allegations regarding BIOMILQ owing anyone a fiduciary duty and, as already determined above, Defendants alleged no cognizable basis on which Egger owed a fiduciary duty to them.

Conversion. This counterclaim failed to the extent it was based on intangible interests, such as trademarks and other intellectual property, because North Carolina does not recognize a claim for conversion of intangible interests. Regarding the tangible materials, the Court allowed the counterclaim to proceed as to BIOMILQ, but dismissed it as to Egger because the only allegation regarding her was alleged in a conclusory fashion and was contradicted by other allegations.

Slander of Title. The Court dismissed this counterclaim because a slander of title claim only applies to statements made regarding real property and thus was inapplicable to the patents and trademark rights at issue here.

Defamation. Defendants asserted a defamation counterclaim based on statements from February 2020 and 21 March 2021. Because the action was not initiated against Egger until April 2023, the counterclaim against her was time-barred by the one year statute of limitations for a defamation claim. However, because the counterclaims against BIOMILQ were deemed filed as of 4 March 2022, the counterclaim survived with regard to the statements made on 21 March 2021 but failed as to the February 2020 statements.

Claims against Movants

Constructive Trust. Because a constructive trust is not a standalone claim, the Court dismissed this counterclaim, but did so without prejudice to Defendants’ right to pursue the remedy on any surviving claims, if applicable.

Fraudulent Conveyance. This counterclaim concerned Strickland’s assignment of her interest in certain intellectual property to BIOMILQ. The Court dismissed this counterclaim because 1) Defendants did not allege the existence of a creditor-debtor relationship as required by N.C.G.S. § 39-23.4(a)(1); and 2) the allegations did not satisfy the pleading requirements of Rule 9(b).

Misappropriation of Trade Secrets. Defendants asserted that Movants had shared trade secret information with third-parties on or before March 20, 2020. Accordingly, the claim was time barred by the three-year statute of limitations as to Egger and BEV since the action was not initiated against them until April 2023. However, the counterclaim was otherwise minimally sufficient to meet the requirements of alleging the existence of a trade secret and efforts to maintain secrecy and therefore survived as to BIOMILQ.

Federal Misappropriation of Trade Secrets. This counterclaim was dismissed as to Egger and BEV because it was time-barred. It was also dismissed as to BIOMILQ because it did not sufficiently allege that the trade secrets implicated interstate or foreign commerce as required by the Defend Trade Secrets Act.

False Designation of Origin. This counterclaim, which equated to a reverse passing off claim under the Lanham Act, failed because Defendants did not allege that the ideas in question had been reduced to the actual production and sale of a product or good.

False Advertising. The Court dismissed this counterclaim because Defendants failed to identify a commercial, physical product or a statement made by any Movant that amounted to a commercial advertisement.

Fraud. This counterclaim was dismissed because it failed to allege one or more of the elements with the requisite particularity as to each Movant.

Civil Conspiracy. This counterclaim failed because Defendants’ allegations that Movants undertook unlawful acts in a “combined effort” was insufficient to satisfy the required allegation that Movants had an agreement.

Unjust Enrichment. The Court dismissed this counterclaim because, although Defendants alleged that Movants had received benefits, they did not allege that Defendants had conferred any benefit on Movants, a required element of the claim.

Loss of Consortium. A loss of consortium claim can only be maintained if it is joined with a suit the other spouse may have instituted to recover for personal injuries. Since Guiliano had not alleged an underlying personal injury claim that Strickland could have made, the Court dismissed the counterclaim.

Punitive Damages. Because a claim for punitive damages is not a standalone claim, the Court dismissed this counterclaim, but did so without prejudice to Defendants’ ability to seek punitive damages as a remedy.

Property Interference. The Court dismissed this counterclaim because Defendants failed to allege that Movants received stolen property, a required element of a claim under the applicable statute, N.C.G.S. § 99A-1.

Violation of the UDTPA. Defendants’ UDTPA claim appeared to be based on its claims for misappropriation of trade secrets, conversion, tortious interference with contract, and fraud. Because all of those claims had been dismissed as to Egger and BEV, the Court also dismissed the UDTPA claim against them, except to the extent it was based on the conduct underlying the misappropriation of trade secrets claim because such conduct could potentially support a claim for violation of the UDTPA against Egger since a UDTPA claim has a four-year statute of limitations. The claim also survived against BIOMILQ to the extent that the underlying claims survived against BIOMILQ.


Griffin v. Advisors Fin. Ctr., L.L.P., 2024 NCBC 26 (N.C. Super. Ct. April 22, 2024) (Bledsoe, C.J.)

Key Terms: partnership; goodwill; estate; intangible interest; conversion

Defendant Neal Griffin and his brother Chris Griffin formed and operated Defendant Advisors Financial Center pursuant to a limited liability Partnership Agreement. After Chris Griffin passed away, his Estate brought suit against Defendants, alleging claims for breach of fiduciary duty against Neal and for breach of contract and conversion against both Defendants, based on Neal’s purported failure to comply with the Partnership Agreement by failing to purchase Chris’s interest or liquidate the Partnership “as a whole,” including goodwill. Defendants moved for partial judgment on the pleadings.

Defendants argued that the Estate could not recover for their failure to account for goodwill in determining the value of the Partnership’s assets upon liquidation or sale because, as a professional partnership, the Partnership did not have goodwill that survived Chris’s death. In response, the Estate argued that it was not a professional partnership because 1) it was organized as a limited liability partnership; and 2) financial services are not listed as a licensed professional service in the Professional Corporation Act. The Court found both of these arguments unpersuasive. Nevertheless, the Court was unable to determine as a matter of law at this stage that the Partnership was a professional partnership whose reputation rested solely on the individual skill of the two partners. The Estate alleged that the Partnership had an internal team; thus, a factfinder could conclude that the Partnership’s reputation was based, at least in part, on the skill of the internal team members and not just that of the two partners. Accordingly, the Court denied the motion to the extent it sought judgment on the Estate’s claims for goodwill.

The Court dismissed with prejudice the Estate’s conversion claim, which was based on Defendants’ allegedly converting the Estate’s interest in the partnership. Both a partnership interest and contract rights under the Partnership Agreement are intangible interests which cannot form the basis for a conversion claim.


Elior, Inc. v. Thomas, 2024 NCBC 27 (N.C. Super. Ct. Apr. 22, 2024) (Earp, J.)


Key Terms: breach of contract; restrictive covenants; noncompete; nonsolicit; blue pencil rule; implied covenant of good faith and fair dealing; conversion; choice of law; lex loci; Trade Secret Protection Act; UDTPA

Defendant worked in business development for Plaintiff, a corporation operating in the food service management industry for schools. After Defendant resigned and became employed by one of Plaintiff’s competitors, Plaintiff sued Defendant asserting a number of claims arising from Defendant’s purported breach of certain covenants in his employment agreement. Defendant moved to dismiss Plaintiff’s claims pursuant to Rules 12(b)(1) and 12(b)(6).

Breach of Contract. As the last party to sign Defendant’s employment agreement was located in North Carolina, the Court determined that North Carolina law applied. The Court rejected  Defendant’s argument that the employment agreement was not supported by consideration because even though the agreement was signed after Defendant’s employment began, Plaintiff alleged that Defendant received additional consideration at the time the employment agreement was signed.

Defendant moved to dismiss Plaintiff’s claim for breach of the employment agreement’s confidentiality provisions under Rule 12(b)(6).  The Court denied Defendant’s motion, based on Plaintiff’s allegations that Defendant had emailed himself documents containing confidential information and had used the confidential information to “undercut Plaintiff’s contract terms” with its current customers.

Defendant likewise moved to dismiss Plaintiff’s claim for breach of the employment agreement’s noncompetition provision, contending that the provision was overbroad and unenforceable.  The Court rejected this argument and denied the motion, noting that the restriction was for a 12-month period and only applied to territories linked to Defendant’s former duties.

The Court also denied Defendant’s motion to dismiss Plaintiff’s claim for breach of the employment agreement’s nonsolicitation provision. However, the Court determined that the provision, as written, was impermissibly broad, as it prohibited solicitation of any of Plaintiff’s current or prospective customers. The Court applied the blue pencil doctrine to narrow the provision, resulting in a restriction against soliciting customers Defendant performed work for in the 24 months preceding his resignation.

Breach of the Covenant of Good Faith and Fair Dealing. Plaintiff alleged that Defendant’s purported violations of the employment agreement constituted a breach of the covenant of good faith and fair dealing. The Court noted that, when based upon the same actions as a breach of contract claim, the fate of an implied covenant claim is inextricably linked to the success of the underlying breach of contract claim. As the breach of contract claim survived dismissal, the Court denied Defendant’s motion to dismiss Plaintiff’s breach of implied covenant claim as well.

Conversion. The Court dismissed Plaintiff’s conversion claim without prejudice, as Plaintiff did not allege that the emails forwarded by Defendant to himself were deleted or that Plaintiff was otherwise deprived of the emails and documents.

Violation of the NCTSPA. Defendant moved to dismiss Plaintiff’s NCTSPA claim, arguing that under the lex loci test, Illinois law governed the claim, rather than North Carolina law. The Court agreed and dismissed the claim without prejudice, noting that Plaintiff failed to allege any fact which would support the inference that the last act giving rise to the injury occurred anywhere other than Illinois.

Violation of the UDTPA. This claim failed to the extent it was based on the dismissed misappropriation of trade secrets claim.  It also failed to the extent it was based on any breach of the confidentiality provisions in the employment agreement because any resulting injury was sustained in Illinois (where the last act had occurred) and, therefore, the North Carolina UDTPA did not apply.

Tortious Interference with Prospective Economic Advantage. Applying Illinois law under the lex loci rule, the Court determined that Plaintiff had not adequately pleaded the “reasonable expectancy” element of the claim and therefore dismissed it.


Pathos Ethos, Inc. v. BrainTap Inc., 2024 NCBC Order 29 (N.C. Super. Ct. April 16, 2024) (Davis, J.)

Key Terms: Rule 22(b); interplead escrowed funds; clerk of court

The parties filed a joint motion requesting that the Court allow Defendant Ward & Smith to interplead escrowed funds pursuant to Rule 22(b) of the North Carolina Rules of Civil Procedure. Ward & Smith was holding the funds in escrow pursuant to an escrow agreement which tasked Ward & Smith with releasing the funds to Plaintiff once certain conditions were met, but also authorized Ward & Smith to deposit the funds with the clerk of superior court if in doubt regarding the proper course of action with respect to the funds. Because the proper disposition of the funds was at issue in the current lawsuit, the Court granted the motion, directed the clerk of superior court to accept the funds, and, upon payment to the clerk, dismissed Ward & Smith from the suit.


Radiance Cap. Receivables Eighteen, LLC v. Roberts, 2024 NCBC Order 30 (N.C. Super. Ct. April 17, 2024)

Key Terms: order on designation; determination order; piercing the corporate veil; N.C.G.S. § 7A-45.4(a)(1)

Plaintiff brought suit asserting claims for civil conspiracy by fraudulent conveyance and piercing the corporate veil arising from Defendant Thomas’s alleged attempts to shield certain real estate from a South Carolina judgment. Defendant BPIM, LLC filed a notice of designation asserting that designation was proper under N.C.G.S. § 7A-45.4(a)(1), based on the veil piercing claim. The Court, however, concluded that the action was not properly designated as a mandatory complex business case because a veil piercing claim, standing alone, is insufficient to support designation and Plaintiff’s claims did not otherwise implicate the law governing LLCs.


To subscribe, email

The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. 

Posted 04/24/24

N.C. Business Court Opinions, March 27, 2024 – April 9, 2024

By: Rachel E. Brinson

Atl. Coast Conf. v. Bd. of Trs. of Fla. State Univ., 2024 NCBC 21 (N.C. Super. Ct. April 4, 2024) (Bledsoe, C.J.)

Key Terms: Atlantic Coast Conference; Florida State University; ESPN; motion to dismiss; motion to stay; media rights agreements; 12(b)(1); 12(b)(2); 12(b)(6); 12(b)(7); declaratory judgment; breach of contract; standing; condition precedent; sovereign immunity; confidential information; breach of fiduciary duty; breach of implied duty of good faith; first to file

Following months of rumblings that Florida State University was considering leaving the Atlantic Coast Conference because it believed it was entitled to an unequal distribution of revenue from the ACC, and upon learning that FSU’s Board of Trustees (“FSU”) intended to file a lawsuit the next day to challenge the enforceability of two media rights agreements (the “Agreements”) between the ACC and its members, the ACC filed this action in Mecklenburg County seeking a judicial determination that the Agreements were valid and enforceable and a declaration that FSU is estopped from challenging or has waived any right to challenge the Agreements by accepting the benefits thereunder. FSU filed suit against the ACC in Florida the following day, allegedly breaching the Agreements. Thereafter, the ACC amended its complaint to assert additional claims for monetary relief. FSU moved to dismiss the amended complaint under Rules 12(b)(1), 12(b)(2), 12(b)(6), and 12(b)(7), or, alternatively, to stay the case in favor of the pending Florida action.

12(b)(1) and 12(b)(2)

FSU challenged the ACC’s standing to bring suit based on (1) lack of a justiciable controversy, (2) failure to satisfy a condition precedent, and (3) sovereign immunity. The Court found that a justiciable controversy existed because at the time of filing, FSU’s initiation of litigation over the Agreements was unavoidable and a practical certainty and FSU presented no evidence to the contrary. The Court also rejected FSU’s contention that the ACC failed to plead that it had taken all necessary steps prior to bringing suit because the ACC was required only to “make an affirmative averment showing its legal existence and capacity to sue,” which it did. The Court also found that the ACC Board of Directors’ ratification of the initiation of the lawsuit cured any alleged defect in the ACC’s authorization to bring suit. Lastly, the Court concluded that although FSU was entitled to sovereign immunity as part of the executive branch of the state government, it had explicitly waived its sovereign immunity to suit in North Carolina by choosing to be a member of a North Carolina unincorporated nonprofit association subject to the Uniform Unincorporated Nonprofit Association Act and its sue and be sued clause and by engaging in extensive commercial activity in North Carolina. For each of these reasons, the Court denied the motion to dismiss under Rules 12(b)(1) and 12(b)(2).


FSU also argued that the action should be dismissed for failure to join Florida State University as a necessary party. However, since “Florida State University” has no independent corporate existence and since Florida courts have held that the FSU Board is the proper party to answer claims against “Florida State University,” the Court denied the motion to dismiss pursuant to Rule 12(b)(7).


Breach of Agreements. The ACC alleged that, by initiating the Florida Action, FSU breached its obligation under the Agreements. In response, FSU did not challenge that it breached the Agreements but instead contended that it never entered into the Agreements in the first place. The Court, however, concluded that the ACC had sufficiently pleaded that FSU approved the execution of both Agreements and should be estopped from challenging the Agreements by its conduct in accepting the benefits of the Agreements for years without protest. Thus, the Court denied the motion to dismiss the claim for breach of the Agreements.

Declaratory Judgment Claims. The ACC sought a judicial declaration that (i) the Agreements were valid and enforceable contracts; and (ii) FSU was estopped from making or has waived by its conduct any challenge to the Agreements. FSU sought dismissal of these claims on the same basis that it sought dismissal of the ACC’s breach of contract claim. Because the Court concluded that the ACC’s claim for breach of the Agreements should survive, the Court also allowed the ACC’s declaratory judgment claims to proceed.

Breach of Obligation to Protect Confidential Information. FSU next sought to dismiss the ACC’s claim that FSU breached its obligation to keep confidential the terms of certain ESPN Agreements by disclosing some of those terms at its December 22, 2023 meeting and by publicly filing the complaint containing some of those terms in the Florida Action. FSU argued that it was never a party to the ESPN Agreements and had not entered into any confidentiality agreement with the ACC, and, furthermore, that FSU does not owe any duties to the ACC beyond those reflected in the ACC’s Constitution and Bylaws. The Court found that the ACC had alleged that it made a legally binding, conditional offer to FSU, which FSU accepted by its counsel’s reviewing the agreements, and thus, although FSU was not a party to the ESPN Agreements or the confidentiality provisions contained therein, the ACC sufficiently pleaded at least an implied-in-fact contract between the ACC and FSU to maintain the confidentiality of the terms of the ESPN Agreements as well as FSU’s breach thereof. Accordingly, the Court denied the motion to dismiss this claim.

Breach of Fiduciary Duties Owed by FSU to the ACC. FSU next sought dismissal of the ACC’s claim that FSU has breached, and continued to breach, its fiduciary obligations to the Conference under the ACC’s Constitution and Bylaws as well as under North Carolina law. The Court determined that the UUNAA does not contain provisions imposing fiduciary duties on members of an unincorporated nonprofit association, and an unincorporated nonprofit association does not qualify as a joint venture preventing the ACC from establishing the existence of a de jure fiduciary relationship with FSU under a joint venture theory. The Court also found that the ACC had not alleged sufficient facts to establish either the existence of a de facto fiduciary relationship or a contractual imposition of fiduciary duties under the ACC’s Constitution and Bylaws. The Court therefore dismissed with prejudice the ACC’s claim for breach of fiduciary duty.

Breach of Implied Duty of Good Faith and Fair Dealing. Finally, FSU sought dismissal of the ACC’s claim for breach of the implied duty of good faith and fair dealing under the ACC’s Constitution and Bylaws. The Court found that the ACC sufficiently alleged the existence of a valid contract (the ACC’s Constitution and Bylaws), breach of the same by FSU, and that FSU’s actions violated its duty to deal in good faith with the ACC. Thus, the Court denied the motion to dismiss the ACC’s claim against FSU for breach of its obligation of good faith and fair dealing.

Motion to Stay

FSU moved in the alternative to stay this first-filed action under N.C.G.S. § 1-75.12 in favor of its second-filed Florida Action because the Florida Action was more comprehensive, and in the true proper forum for this case, and also because the ACC deserved no first-filing deference as a result of its improper forum shopping. The ACC responded that a North Carolina court, not a Florida court, should determine the claims of a North Carolina organization concerning the validity and breach of contracts governed by North Carolina law and further that FSU had failed to offer any evidence that FSU would suffer “substantial injustice” should this litigation proceed in North Carolina. The Court found that the nature of the case, the convenience of the witnesses, the relative ease of access to sources of proof, the applicable law, the burden of litigating matters not of local concern, the desirability of litigating matters of local concern in local courts, and the ACC’s choice of the North Carolina forum decisively outweighed FSU’s choice of Florida for the determination of the enforceability of the Agreements and the resolution of the ACC’s damages claims against FSU. Accordingly, the Court, in the exercise of its discretion, denied FSU’s motion to stay under section 1-75.12(a).


Atl. Coast Conf. v. Bd. of Trs. of Fla. State Univ., 2024 NCBC 22 (N.C. Super. Ct. April 5, 2024) (Bledsoe, C.J.)

Key Terms: Atlantic Coast Conference; Florida State University; ESPN; motion to seal; confidential information; trade secrets; third-party harm; public record

The ACC sought to seal excerpts from or relating to certain agreements to which the ACC and ESPN were parties, which contained historical and prospective financial data and other material terms. The FSU Board opposed sealing arguing that (1) the agreements were public records because the terms had been shared with the ACC’s members, including nine public universities, (2) the agreements did not qualify for the trade secret exemption under North Carolina’s or Florida’s public record laws, (3) the information was already public, and (4) the ACC’s proposed redactions were overbroad and inconsistent. The ACC and ESPN opposed the FSU Board’s arguments. The ACC argued that disclosure would harm the ACC’s ability to compete with other conferences by allowing them to use the information as leverage in negotiations, thus gaining an unfair advantage.

The Court concluded that partial sealing as requested by the ACC and ESPN was appropriate for several reasons. First, financial information, pricing terms, and internal business strategies are included within the categories that North Carolina courts have treated as confidential and proprietary trade secrets that may warrant protection. Second, the ACC and ESPN contended that the terms of the Agreements were trade secrets, which N.C.G.S. § 66-156 requires the court to protect. Third, numerous other courts, when considering requests to seal these and similar agreements, have concluded that they constitute trade secrets that warrant sealing. Fourth, the privacy interests of non-party ESPN deserved special consideration and weighed in favor of sealing. The Court concluded that sealing the excerpts of the agreements and those portions of the pleadings in the North Carolina action and the Florida Action that quote from or refer to the agreements was appropriate but found that certain of the ACC’s redactions were arbitrary, inconsistent, and overbroad. Accordingly, the Court predominately granted the motions to seal but ordered the ACC to revise certain inconsistent redactions.


To subscribe, email

The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.

Posted 04/09/24