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Update: Business Court Sidesteps Published Court of Appeals Opinion Affirmed “Without Precedential Value”

Last fall, Justice Edmunds analyzed the subtle policy questions presented when a Court of Appeals decision is affirmed “without precedential value” by a divided Supreme Court.  A robust discussion followed in the “comments” section.

Last Friday, Chief Judge Gale of the North Carolina Business Court weighed in on the debate in Zloop v. Parker Poe.  He concluded that the business court is not bound by Court of Appeals decisions that are later affirmed by the Supreme Court without four votes (often, by a 3-3 tie with one recusal).  Citing a number of Court of Appeals decisions–including one that was affirmed by the Supreme Court per curiam–Judge Gale sidestepped an earlier Court of Appeals decision holding that an accounting firm could not lodge an in pari delicto defense to claims of professional malpractice.  Instead, Judge Gale concluded that the Court of Appeals decision was not binding precedent, but could be evaluated for its persuasive value.

In doing so, Judge Gale acknowledged the tension between his decision and the plain language of In re Civil Penalty:

Where a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that precedent, unless it has been overturned by a higher court.

324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989). In re Civil Penalty cannot be read in a vacuum, however.  After all, In re Civil Penalty admittedly contains an implied exception for unpublished opinions of the Court of Appeals, which are not binding on future panels.  Thus, it is not surprising that other potential exceptions to In re Civil Penalty exist.

–Matt Leerberg

h/t Gavin Reardon

 

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