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Full of Sound and Fury, Signifying….What Exactly?

A while back, Justice Edmunds wrote a post that did a deep dive into what it means for the state’s jurisprudence when a case is “affirmed without precedential value.”  Matt followed that up with discussion of a Business Court opinion in which Judge Gale concluded that a Court of Appeals opinion that is “affirmed without precedential value” is not binding authority in subsequent cases, but rather has only persuasive value.   Now the issue is once again front and center on this blog, as the opinions released by the Supreme Court of North Carolina last week contained another one of these per curiam, 3-3 splits.

In Hamlet v. Hernandez, the Court of Appeals had addressed an issue of first impression: “whether the ‘learned profession’ exception set forth in N.C. Gen. Stat. § 75-1.1(b) applies to a dispute between a physician and a hospital relating to alleged false claims made by the hospital to induce the physician to enter into an employment contract.”  Hamlet H.M.A., LLC v. Hernandez, 821 S.E.2d 600, 607 (N.C. Ct. App. 2018).  The majority held that whether the learned profession exception to a Chapter 75 counterclaim was a question for the jury in this case, and it reversed the trial court’s grant of a directed verdict to the plaintiff on that counterclaim.   Then-Court of Appeals Judge Mark Davis dissented, arguing that it was clear on the facts of the case that the learned profession exception did apply and the directed verdict was proper.  The case was appealed as of right to the Supreme Court based on Judge Davis’ dissent (the parties’ requests for discretionary review of other issues in the case that could not be appealed as of right were denied), and while the appeal was pending, Judge Davis became Justice Davis. Because of this promotion, Justice Davis could not participate in the Supreme Court’s evaluation of this appeal.  That recusal resulted in an equally divided court, with three members voting to affirm the Court of Appeals decision (that the application of the learned profession exception was for the jury) and three members siding with then-Judge Davis’s dissent and voting to reverse the Court of Appeals (thus advocating for the directed verdict on the counterclaim to stand).  As a result, “the decision of the Court of Appeal is left undisturbed and stands without precedential value.”

This lack of resolution may be disappointing to those who were following this relatively high profile case.  The case had seen a number of amici weigh in on the issue, including the N.C. Healthcare Association, the State of North Carolina, and the Advocates for Justice.  Those who had hoped that this appeal would further define the contours of the learned profession exception will have to wait for another day.  In fact, the law is arguably less clear now than it would have been if the case had never made its way to the Supreme Court.  In that scenario, the Court of Appeals decision would still exist as binding precedent.  Instead, that opinion is now binding only on the parties in the case, and what effect it will have in future cases perhaps is an open question without a clear answer.  Stay tuned to this space as my colleague Troy Shelton will be following up later this week with a more comprehensive look into the Hamlet opinion, how it came out the way it did, and what it means going forward.

(Author’s Note: Yes, I know the title of this blog is drawn from MacBeth, not Hamlet.)

–Patrick Kane

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