ATL. COAST CONF. v. BD. OF TRS. OF FLA. STATE UNIV., 2024 NCBC 31

STATE OF NORTH CAROLINA
MECKLENBURG COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
23CV040918-590
ATLANTIC COAST CONFERENCE,
Plaintiff,
v.
BOARD OF TRUSTEES OF
FLORIDA STATE UNIVERSITY,
Defendant.
ORDER AND OPINION STAYING
ACTION PENDING APPEAL
1. 	THIS MATTER is before the Court sua sponte to address the Court’s
jurisdiction over the above-captioned case in light of Defendant Board of Trustees of
Florida State University’s (the “FSU Board”) recent appeal of a portion of the Court’s
Order entered on 4 April 2024.1
2. 	Having considered the parties’ status reports,2 the arguments of counsel at
the hearing on this issue, and other relevant evidence of record, the Court hereby
STAYS all proceedings in this action, including discovery, for the reasons set forth
below.
Womble Bond Dickinson (US) LLP, by James P. Cooney, III, Sarah
Motley Stone, and Patrick Grayson Spaugh, and Lawson Huck Gonzalez,
PLLC, by Charles Alan Lawson, for Plaintiff Atlantic Coast Conference.
Greenberg Traurig, LLP, by Peter G. Rush, David C. Ashburn, and John
K. Londot, and Bradley Arant Boult Cummings LLP, by Christopher C.
Lam, C. Bailey King, Jr., Hanna E. Eickmeier, and Brian M. Rowlson,
for Defendant Board of Trustees of Florida State University.
1 (Notice Appeal, ECF No. 60.)
2 (See Pl. Atl. Coast Conf.’s Status Rep. [hereinafter “ACC’s Status Rep.”], ECF No. 64; Def.’s
Status Rep. After Appeal [hereinafter “FSU Bd.’s Status Rep.”], ECF No. 65.)
Atl. Coast Conf. v. Bd. of Trs. of Fla. State Univ., 2024 NCBC 31.

Bledsoe, Chief Judge.
I.
PROCEDURAL HISTORY
3. 	On 4 April 2024, the Court entered its Order and Opinion on Defendant’s
Motion to Dismiss or, in the Alternative, Stay the Action (the “April 4 Order”). 	Atl.
Coast Conf. v. Bd. of Trs. of Fla. State Univ., 2024 NCBC LEXIS 53 (N.C. Super. Ct.
Apr. 4, 2024). 	Through the April 4 Order, the Court substantially denied the FSU
Board’s motion to dismiss Plaintiff Atlantic Coast Conference’s (the “ACC”) First
Amended Complaint.3 See id. at *80. Of particular relevance here, the Court denied
the FSU Board’s motion to dismiss pursuant to Rule 12(b)(2) of the North Carolina
Rules of Civil Procedure (the “Rule(s)”), determining that the FSU Board has waived
its sovereign immunity to suit in North Carolina and is therefore subject to personal
jurisdiction in this Court. 	See id. at *43. 	The Court also denied the FSU Board’s
alternative motion for a stay. See id. at *79–80.
4. 	The FSU Board appealed the Court’s Rule 12(b)(2) ruling in the April 4
Order to the Supreme Court of North Carolina on 9 April 2024.4 	The FSU Board
contends on appeal that this Court erred in concluding that the “FSU Board has
waived sovereign immunity and is therefore subject to personal jurisdiction in the
3 The Court granted the FSU Board’s motion to the extent it sought to dismiss the ACC’s
breach of fiduciary duty claim, and the Court dismissed that claim with prejudice. See id. at
*56–66, *80.
4 (See Notice Appeal 1.)

State of North Carolina.”5 The FSU Board further represents that it intends to seek
review of this Court’s denial of “the FSU Board’s request for stay of the trial court
proceedings by means of a writ of certiorari to th[e Supreme Court] as expressly
provided by [N.C.G.S.] § 1-75.12(c) and Rule 21 of the North Carolina Rules of
Appellate Procedure.”6
5. 	On 10 April 2024, the Court entered a Sua Sponte Order for Status Report
After Appeal (the “Sua Sponte Order”) directing the parties to meet, confer, and
thereafter file either a joint status report or separate status reports regarding “the
effect of N.C.G.S. § 1-294 on this litigation in light of the Notice of Appeal.”7 	The
parties submitted their status reports in compliance with the Sua Sponte Order on
16 April 2024.8
6. 	The ACC and the FSU Board appear to agree that this Court’s denial of the
FSU Board’s Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction based on
sovereign immunity in the April 4 Order is immediately appealable and that N.C.G.S.
§ 1-294 automatically divests this Court of jurisdiction over this matter, at least in
part, pending the Supreme Court’s resolution of the FSU Board’s appeal. 	Their
5 (Notice Appeal 1.) 	The FSU Board does not contend that it is immune from suit in any
jurisdiction; rather, the FSU Board argues that it has consented to be sued, but only in the
State of Florida. (See FSU Bd.’s Br. Supp. Def.’s Mot. Dismiss or, in the Alt., Stay Action 13–
15, ECF No. 20.)
6 (Notice Appeal 2.)
7 (Sua Sponte Order Status Rep. After Appeal 1, ECF No. 61.)
8 (See ACC’s Status Rep.; FSU Bd.’s Status Rep.)

current dispute centers on the extent of the Court’s authority over this matter until
the appeal is resolved.9
7. 	The Court held a hearing on this issue on 2 May 2024 at which both parties
were represented by counsel (the “Hearing”). The matter is now ripe for resolution.
II.
LEGAL STANDARD AND ANALYSIS
8. 	“Under North Carolina law, the longstanding general rule [as codified by
N.C.G.S. § 1-294] is that an appeal divests the trial court of jurisdiction over a case
until the appellate court returns its mandate.” 	Plasman v. Decca Furniture (USA),
Inc., 253 N.C. App. 484, 490–91 (2017) (collecting cases). More specifically, N.C.G.S.
§ 1-294 provides that a perfected appeal “stays all further proceedings in the court
below upon the judgment appealed from, or upon the matter embraced therein, unless
otherwise provided by the Rules of Appellate Procedure[.]”10 	N.C.G.S. § 1-294. 	A
trial court may, however, “proceed upon any other matter included in the action and
not affected by the judgment appealed from.” Id.
9. 	Interlocutory orders, however, “are not immediately appealable unless the
order in question affects a substantial right.” 	State ex rel. Stein v. Kinston Charter
9 (See ACC’s Status Rep. 2–4; FSU Bd.’s Status Rep. 2–4.)
10 At the Hearing, counsel for both parties advised that the appeal has not yet been perfected
but is expected to be perfected in due course. For purposes of this Order, the Court assumes
without deciding that perfection will occur within the ordinary course, and therefore, will
relate back to the filing of the Notice of Appeal. 	See Woodard v. N.C. Loc. Governmental
Emps.’ Ret. Sys., 110 N.C. App. 83, 87 (1993) (citing Lowder v. All Star Mills, Inc., 301 N.C.
561, 580 (1981)).

Acad., 379 N.C. 560, 571 (2021). In such cases, our Supreme Court has determined
that
[w]hen a litigant takes an appeal to the Supreme Court from an
appealable interlocutory order of the Superior Court and perfects such
appeal in conformity to law, the appeal operates as a stay of all
proceedings in the Superior Court relating to the issues included therein
until the matters are determined in the Supreme Court.
Plasman, 253 N.C. App. at 491–92 (quoting Veazey v. Durham, 231 N.C. 357, 363
(1950)). As a result, “[t]he lower court only retains jurisdiction to take action which
aids the appeal and to hear motions and grant orders that do not concern the subject
matter of the suit and are not affected by the judgment that has been appealed.” Ross
v. Ross, 194 N.C. App. 365, 368 (2008); see also State ex rel. Stein v. E.I. Du Pont de
Nemours & Co., No. 20 CVS 5612, 2021 WL 5546057, at *1 (N.C. Super. Ct. Oct. 29,
2021) (“A trial court retains authority to handle matters that do not raise a question
involved in the then-pending appeal, or to otherwise decide issues that will not be
before the appellate court for review and decision on appeal.” (cleaned up)).
10. 	Under N.C.G.S. § 1-277(b), a litigant has a “right of immediate appeal from
an adverse ruling” on a motion to dismiss for lack of personal jurisdiction when the
“challenge is substantive rather than merely procedural.” 	Hart v. F.N. Thompson
Constr. Co., 132 N.C. App. 229, 231 (1999) (quoting N.C.G.S. § 1-277(b)). 	“If
defendant’s motion raises a due process question of whether his contacts within the
forum state were sufficient to justify the court’s jurisdictional power over him, then
the order denying such motion is immediately appealable[.]” 	Id. (quoting Berger v.
Berger, 67 N.C. App. 591, 595 (1984)). North Carolina courts have likewise held that

“denial of a Rule 12(b)(2) motion premised on sovereign immunity constitutes an
adverse ruling on personal jurisdiction and is therefore immediately appealable
under [N.C.G.S. §] 1-277(b).” Can Am S., LLC v. State, 234 N.C. App. 119, 124 (2014)
(collecting cases); see also Kinston Charter Acad., 379 N.C. at 571 (“Although an order
denying a dismissal motion predicated upon the doctrine of sovereign immunity is
interlocutory 	in 	nature, 	such 	an 	order 	is 	immediately 	appealable 	‘because 	it
represents a substantial right.’ ” (quoting Craig v. New Hanover Cnty. Bd. of Educ.,
363 N.C. 334, 338 (2009))).
11. 	The FSU Board contends that N.C.G.S. § 1-294 requires an automatic stay
of all proceedings in this action because the question of “whether the FSU Board can
even be sued [in North Carolina][ ] . . . necessarily ‘embrace[s]’ the entire matter[.]”11
Although the ACC agrees that “this Court may not adjudicate [the FSU Board’s]
substantive 	rights[,]” 	the 	ACC 	nevertheless 	contends 	that 	this 	Court 	retains
jurisdiction to require the parties to close the pleadings and conduct written discovery
while the FSU Board’s appeal is pending.12
12. 	The ACC primarily relies on Inhold, LLC v. Pureshield, Inc., 2021 NCBC
LEXIS 23 (N.C. Super. Ct. Mar. 23, 2021), to support its position.13 The plaintiffs in
Inhold initially asserted claims related to trade secrets but, when a dispute over a
patent license agreement arose during the pendency of the litigation, plaintiffs sought
11 (FSU Bd.’s Status Rep. 3 (second alteration in original) (quoting N.C.G.S. § 1-294).)
12 (ACC’s Status Rep. 1–2.)
13 (See ACC’s Status Rep. 2–3.)

leave to amend their complaint to include claims related to the license dispute.
Inhold, LLC, 2021 NCBC LEXIS 23, at *1–2. The Inhold defendants argued that the
license dispute claims were subject to exclusive federal jurisdiction but later conceded
that “the Court could grant relief to [p]laintiffs based on state-law theories without
reaching any issue of [federal] patent law.” Id. at *2–3. The Court granted the motion
to amend and defendants appealed. Id. at *4.
13. 	Defendants 	then 	moved 	for 	a 	stay, 	arguing 	that 	N.C.G.S. 	§ 1-294
“mandate[d] an automatic stay . . . [of] the entire case[ ]” pending resolution of their
interlocutory appeal, and alternatively requested the Court to enter a discretionary
stay. Id. at *5. Plaintiffs opposed any stay. Id. The Court concluded that a limited
stay of “the claims involving the license dispute” was appropriate because “[i]t would
be imprudent for this Court to take action that could prejudice the Supreme Court’s
ability to decide . . . the merits of the appeal.” 	Id. at *6. 	In contrast, however, the
Court concluded that discovery on the trade-secret claims could proceed, because
those claims “[fell] within the category of ‘any other matter included in the action and
not affected by the judgment appealed from[.]’ ” Id. at *5–6, *8 (quoting N.C.G.S. § 1-
294).
14. 	The ACC contends that N.C.G.S. § 1-294 does not require an automatic stay
of the entire case, arguing that the FSU Board “will not be prejudiced by answering
because [the FSU Board] has already presented its jurisdictional defenses.”14 	The
ACC additionally argues that the FSU Board “will not be prejudiced by participating
14 (ACC’s Status Rep. 3.)

in discovery [in this action]” because discovery is likely to move forward in the Florida
action and, just like in Inhold, the “parties [will] conduct discovery on these claims
regardless of the outcome of the appeal.”15
15. 	But whether or not the FSU Board will be prejudiced is not the relevant
inquiry under N.C.G.S. § 1-294. 	Instead, the proper inquiry in this instance is
whether a North Carolina trial court has the authority to compel the FSU Board to
file pleadings and engage in discovery in a North Carolina lawsuit pursuant to the
North Carolina Rules of Civil Procedure and the North Carolina Business Court
Rules when the FSU Board has challenged the North Carolina trial court’s personal
jurisdiction over it based on sovereign immunity in a pending appeal to the Supreme
Court of North Carolina.
16. 	In Inhold, the trial court’s jurisdiction over a separable and readily divisible
subset of claims was at issue on appeal. See id. at *4–6. In contrast here, this Court’s
personal jurisdiction over a party to the litigation is the issue on appeal. 	When an
appeal concerns a trial court’s “ability to assert judicial power over [a party] and bind
[the party] by its adjudication[,]” Banc of Am. Merch. Servs., LLC v. Arby’s Rest. Grp.,
Inc., 2021 NCBC LEXIS 60, at *11–12 (N.C. Super. Ct. June 30, 2021) (quoting In re
A.B.D., 173 N.C. App. 77, 83 (2005)), requiring that party’s further participation in
the litigation process prior to resolution of the pending appeal clearly constitutes a
“matter embraced [by the appeal],” N.C.G.S. § 1-294.
15 (ACC’s Status Rep. 3 (quoting Inhold, LLC, 2021 NCBC LEXIS 23, at *7–8).) Not only does
the ACC represent that “the Circuit Court in Florida has forecast that discovery may very
well proceed once it rules on [the ACC’s] motions to dismiss[,]” but it also represents that the
FSU Board “has sought discovery in Florida already[.]” (ACC’s Status Rep. 3.)

17. 	At the Hearing, the ACC conceded that it had failed to locate any North
Carolina case that would permit any litigation-related activity in this Court—much
less the closing of pleadings or engaging in discovery—during the pendency of an
appeal of an adverse ruling on personal jurisdiction and/or a Rule 12(b)(2) motion
premised on sovereign immunity. 	That is likely because our courts have routinely
imposed or enforced an automatic stay of all proceedings under N.C.G.S. § 1-294
when an interlocutory appeal is lodged after the denial of a Rule 12(b)(2) motion based
on personal jurisdiction, generally, and sovereign immunity, specifically. 	See Atl.
Coast Conf. v. Univ. of Md., 230 N.C. App. 429, 432–33 (2013) (issuing writ of
supersedeas16 to stay all proceedings pending resolution of defendants’ interlocutory
appeal of a motion to dismiss based on sovereign immunity after trial court granted
plaintiff’s motion to retain jurisdiction); Kelley v. Andrews, No. COA15-448, 2016 N.C.
App. LEXIS 74, at *3–4 (N.C. Ct. App. Jan. 19, 2016) (unpublished) (vacating trial
court’s order granting a second motion to dismiss when an appeal of the first motion
to dismiss, based on sovereign immunity, was pending); Carl v. State, 192 N.C. App.
544, 547 (2008) (granting defendant’s petition for writ of supersedeas, thereby staying
all proceedings pending resolution of defendant’s interlocutory appeal of a motion to
dismiss based on sovereign immunity, after trial court denied defendant’s motion to
stay); Woodard, 110 N.C. App. at 87 (concluding defendants’ interlocutory appeal of
a motion to dismiss based on sovereign immunity automatically stayed proceedings
16 A writ of supersedeas “preserve[s] the status quo pending the exercise of the appellate
court’s jurisdiction[ ]” and therefore stays the effect of a trial court’s order pending the
resolution of an appeal. City of New Bern v. Walker, 255 N.C. 355, 356 (1961).

and vacating trial court’s order on the parties’ summary judgment motions issued
while the appeal was pending); see also E.I. Du Pont de Nemours & Co., 2021 WL
5546057, at *3 (concluding N.C.G.S. § 1-294 automatically stayed “the action in its
entirety” pending resolution of an interlocutory appeal based on personal jurisdiction
filed by two of the five defendants); Cohen v. Cont’l Motors, Inc., 2020 NCBC LEXIS
29, at *12–13 (N.C. Super. Ct. Mar. 12, 2020) (staying all proceedings pursuant to
N.C.G.S. § 1-294 when defendant appealed the denial of his motion to dismiss for lack
of personal jurisdiction).
18. 	In light of this case law, and “[b]ecause jurisdiction is a non-waivable,
mandatory aspect of a court’s authority to adjudicate cases,” Kelley, 2016 N.C. App.
LEXIS 74, at *2, the Court concludes that N.C.G.S. § 1-294 automatically stays this
action in its entirety pending the Supreme Court’s final resolution of the FSU Board’s
appeal.17
17 The Court finds the other cases on which the ACC relies unpersuasive because none of
these cases, with one exception, concern an interlocutory appeal of a motion to dismiss based
on sovereign immunity, or personal jurisdiction more broadly, which are the specific issues
of relevance here. 	(See ACC’s Status Rep. 2–4.) 	Only Faulkenbury v. Teachers’ & State
Employees’ Retirement System involves the interlocutory appeal of a denial of a Rule 12(b)
motion based on sovereign immunity, but the issue in that case involved plaintiffs’ voluntary
dismissal of two defendants in their individual capacities, rather than in their official
capacities, after the notice of appeal was filed. 	See Faulkenbury v. Tchrs.’ & State Emps.’
Ret. Sys., 108 N.C. App. 357, 363–65 (1993). Our Court of Appeals concluded that plaintiffs’
“voluntary dismissal [of non-state actors] under Rule 41 [was] proper” during the pendency
of the appeal because the dismissal did not “affect[ ] the subject matter of the action,” i.e., the
trial court’s jurisdiction over the sovereign’s actors. Id. at 364.

III.
CONCLUSION
19. 	WHEREFORE, 	the 	Court, 	for 	the 	reasons 	discussed 	above, 	hereby
ORDERS that all proceedings in this matter, including all discovery, are STAYED
by operation of N.C.G.S. § 1-294 pending the final resolution of the appeal of the
Court’s Rule 12(b)(2) ruling in the April 4 Order or until otherwise ordered by the
Court.
SO ORDERED, this the 10th day of May, 2024.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge