INTERSAL, INC. v. WILSON, 2024 NCBC 56

STATE OF NORTH CAROLINA
COUNTY OF WAKE
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
15 CVS 9995
INTERSAL, INC., Plaintiff,
v.
D. REID WILSON, Secretary, North
Carolina Department of Natural and
Cultural Resources; NORTH
CAROLINA DEPARTMENT OF
NATURAL AND CULTURAL
RESOURCES; and THE STATE OF
NORTH CAROLINA,
Defendants.
ORDER AND OPINION ON
DEFENDANTS’ RENEWED MOTION
FOR SUMMARY JUDGMENT
1. 	THIS MATTER is before the Court on Defendants’ Renewed Motion for
Summary Judgment (the “Motion”), (ECF No. 318).
2. 	After review of the Motion, the parties’ briefs, the arguments of counsel
at a hearing, and other relevant matters of record, the Court GRANTS in part and
DENIES in part the Motion.
Kilpatrick Townsend & Stockton, LLP, by Dustin T. Greene, Richard J.
Keshian, Elizabeth Winters, Kyleigh E. Feehs, Whitney R. Pakalka, and
Mark Boynton, for Plaintiff Intersal, Inc.
North 	Carolina 	Department 	of 	Justice, 	by 	Michael 	Bulleri, 	Amar
Majmundar, Brian D. Rabinovitz, Orlando L. Rodriguez, and Charles
G. Whitehead, for Defendants D. Reid Wilson, et al.
Earp, Judge.
Intersal, Inc. v. Wilson, 2024 NCBC 56.

I. 	FACTUAL AND PROCEDURAL BACKGROUND1
3. 	The Court does not make findings of fact when ruling on motions for
summary judgment, but instead “summarizes the relevant evidence of record, noting
both the facts that are disputed and those that are uncontested, to provide context
for the claims and the Motions.” Aym Techs., LLC v. Rodgers, 2019 NCBC LEXIS 64,
at *2 (N.C. Super. Ct. Oct. 16, 2019) (citing Hyde Ins. Agency, Inc. v. Dixie Leasing
Corp., 26 N.C. App. 138, 142 (1975)).
4. 	This 	dispute 	arises 	from 	the 	parties’ 	differing 	interpretations 	of
language in a settlement agreement dated 15 October 2013 between Intersal, Inc.
(“Intersal” or “Plaintiff”) and the North Carolina Department of Natural and Cultural
Resources (“DNCR”) (the “2013 Agreement”).2 	(See Third Am. Compl. ¶ 24, Ex. 1,
[“2013 Agreement”], ECF No. 106.)
5. 	The 2013 Agreement resulted from a mediation between the parties
regarding disputes involving a previous agreement between the parties and a non-
party, the Maritime Research Institute (“MRI”).3 	(the “1998 Agreement,” ECF
No. 106.) In the 1998 Agreement, Intersal relinquished its right to receive 75% of the
coins and precious metals recovered from the QAR in exchange for certain media
1 Additional factual background can be found in Intersal, Inc. v. Wilson, 2023 NCBC LEXIS
29, at **2-21 (N.C. Super. Ct. Feb. 23, 2023).
2 The Department of Natural and Cultural Resources was previously titled the Department
of Cultural Resources. 	The Court refers to the Department as “DNCR” throughout this
opinion.
3 MRI is a non-profit corporation formed to work on the QAR project in cooperation with State
archaeologists and DNCR historians. (2013 Agreement Recitals, ECF No. 106.)

rights and other commercial opportunities arising from the QAR Project. 	(1998
Agreement 1.) 	The recitals in the 2013 Agreement reference that exchange. 	(2013
Agreement 1.)
6. 	At issue in this Motion is whether the language of Section 16 of the 2013
Agreement supports Intersal’s damage arguments. 	Section 16(a) requires DNCR to
“establish and maintain access to a website for the issuance of Media and Access
Passes to QAR-project4 related artifacts and activities” and to include on the website
“[a]n Intersal terms of use [“Terms of Service”] agreement, to be electronically
submitted[,]” among other things. (2013 Agreement § 16(a)(1), § 16(a)(3)(a).) Section
16(a) also provides that “Intersal shall bear the sole responsibility for managing and
enforcing its [Terms of Service.]” (2013 Agreement § 16(a)(5).)
7. 	Section 	16(b) 	of 	the 	2013 	Agreement 	speaks 	to 	marks 	and 	other
information required to be placed on “non-commercial media.” Section 16(b) provides:
1) All non-commercial digital media, regardless of producing entity,
shall bear a time code stamp, and watermark (or bug) of Nautilus5
and/or D[N]CR, as well as a link to D[N]CR, Intersal, and Nautilus
websites, to be clearly and visibly displayed at the bottom of any web
page on which the digital media is being displayed.
2) D[N]CR agrees to display non-commercial digital media only on
D[N]CR’s website.
3) Termination. 	This Media and Access Pass section shall terminate
after the 5th anniversary of the signing of this Agreement. After five
4 The QAR Project encompasses location, excavation, salvage and conservation activities.
(Permit, ECF 337.9.)
5 Nautilus is an underwater video production company and is identified in the 2013
Agreement as Plaintiff’s “video-designee.” (2013 Agreement ¶ 14.)

(5) years, D[N]CR and Intersal may agree to extend this provision by
mutual written consent.
(2013 Agreement § 16(b).)
8. 	In 	addition, 	Defendants 	move 	to 	preclude 	Intersal 	from 	seeking
damages for DNCR’s alleged failure to collaborate in making a large commercial
(“blockbuster”) tour based on the QAR Project. 	Section 15 of the 2013 Agreement
reads in pertinent part:
Other 	Commercial 	Narrative. 	D[N]CR 	and 	Intersal 	agree 	to
collaborate in making other commercial narrative such as, but not
limited to books and e-books, mini- and full-length documentaries, and
video games. 	Any profit-sharing agreements shall be based on the
amount of work contributed by each entity.
(2013 Agreement § 15 (emphasis added).) 	Plaintiff contends that such a tour is
included in the definition of “commercial narrative” and that Defendants have instead
chosen to conduct their own tour at numerous venues in North Carolina without
collaborating with Intersal. (Third Am. Compl. ¶ 35(J).)
9. 	In a previous order, the Court held that whether the parties intended
for the term “commercial narrative” in Section 15 of the 2013 Agreement to include a
blockbuster tour and, if so, whether Defendants collaborated with Intersal in making
such a tour were issues of fact for a jury to decide. 	See Intersal, Inc., 2023 NCBC
LEXIS 29, at **42-47.
10. 	Since the Court’s ruling, Intersal discovered and produced previously
undisclosed images and audio recordings from a 3 February 2014 meeting involving
representatives from Intersal, DNCR, and Nautilus. 	During the meeting, the
attendees 	discussed 	various 	topics 	including 	their 	interpretations 	of 	the 	2013

Agreement with respect to a tour and media rights. The discovery of the recordings
and images from the meeting led to a continuance of the trial date so that the import
of this additional information could be evaluated by the parties. (Order on Pl.’s Mot.
Admit Evidence, Defs.’ Mot. Sanctions and Reconsider Summ. J. Ruling and Pl.’s Mot.
Continue Trial [“Continuance Order”], ECF No. 294.)
11. 	In the Continuance Order, the Court afforded the parties an opportunity
to conduct limited discovery with respect to (1) the substance of the 3 February 2014
meeting; (2) recordings and documents made and/or presented at the 3 February 2014
meeting; (3) any images/usages responsive to prior discovery requests that have not
been previously produced; (4) any recordings of meetings or calls responsive to prior
discovery requests that have not been previously produced; and (5) the meaning of
DCR’s website as stated in Paragraph 16(b)(2) of the 2013 Settlement Agreement.
The Court also amended the case management order to permit the parties to file
motions resulting from this discovery. (Am. Case Mgmt. Order ¶¶ 2-3, ECF No. 298.)
12. 	Pursuant to the terms of the Amended Case Management Order,
Defendants filed the instant Motion on 31 May 2024, (ECF No. 318). 	Plaintiff filed
its response on 24 June 2024, (ECF No. 336).6 Defendants filed their reply on 1 July
2024, (ECF No. 343).
6 The Third Amended Case Management Order gave Plaintiff until 21 June 2024 to file its
response. Prior to this deadline, however, Plaintiff notified the Court of Defendants’ objection
to Plaintiff’s citation to portions of the transcript of the 3 February 2014 meeting in its
response brief to the Motion, and it requested a status conference with the Court. Following
the status conference, (ECF No. 329), the parties came to an agreement regarding citation to
the transcript, which was memorialized via a stipulation. (Joint Stip. Regarding Use of Tr.
from 3 Feb. 2014 Meeting, ECF No. 338.) 	Plaintiff then requested an extension of time to
respond to the Motion, which the Court granted. (Order Extending Time, ECF No. 330.)

13. 	On 8 July 2024, the Court held a hearing on the Motion during which
counsel for all parties participated. (Not. H’rg, ECF No. 344.) The Motion is now ripe
for resolution.
II. 	LEGAL STANDARD
14. 	Summary 	judgment 	is 	appropriate 	“if 	the 	pleadings, 	depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show there is no genuine issue as to any material fact and that [the movant] is
entitled to a judgment as a matter of law.” N.C. R. Civ. P. 56(c).
15. 	Genuine issues of material fact are those “which can be maintained by
substantial evidence.” 	Kessing v. Nat’l Mortg. Corp., 278 N.C. 523, 534 (1971).
“Substantial evidence is such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion and means more than a scintilla or a permissible
inference.” 	Daughtridge v. Tanager Land, LLC, 373 N.C. 182, 187 (2019) (citation
and internal quotation marks omitted).
16. 	In reviewing a motion for summary judgment, the Court must consider
all evidence in the light most favorable to the non-moving party. 	Belmont Ass’n v.
Farwig, 381 N.C. 306, 310 (2022). 	Parties moving for summary judgment have the
burden of establishing the lack of any triable issue of fact. Pembee Mfg. Corp. v. Cape
Fear Constr. Co., 313 N.C. 488, 491 (1985).
17. 	A movant may satisfy its burden by proving that “an essential element
of the opposing party’s claim does not exist, cannot be proven at trial, or would be
barred by an affirmative defense, or by showing through discovery that the opposing

party cannot produce evidence to support an essential element of [the] claim.” Dobson
v. Harris, 352 N.C. 77, 83 (2000) (citations omitted). 	Should the movant satisfy its
burden, “then the burden shifts to the non-moving party to ‘set forth specific facts
showing that there is a genuine issue for trial.’” Lowe v. Bradford, 305 N.C. 366, 369-
70 (1982) (quoting N.C. R. Civ. P. 56(e)).
18. 	When ruling on a motion for summary judgment, the Court does not
resolve issues of fact and must deny the motion if there is any genuine issue of
material fact. Singleton v. Stewart, 280 N.C. 460, 464 (1972).
III. 	ANALYSIS
A. The February 2014 Meeting Transcripts
19. 	Defendants contend that transcripts of the recordings made of the
3 February 2014 meeting conclusively establish that the parties did not intend for
Section 15’s reference to “commercial narrative” to include a commercial tour. (Defs.’
Br. Supp. Renewed Mot. Summ. J. [“Defs.’ Br.”] 9-13, ECF No. 319.) After a thorough
review of the transcripts, the Court observes that there was much discussion of a
tour. 	Defendants appear to rely on language in the 1998 Agreement providing that
DNCR and MRI jointly had the “exclusive right to nationally and internationally tour
and exhibit” the QAR’s artifacts. 	(1998 Agreement ¶ 21.) 	Intersal points to the
absence of the same provision in the 2013 Agreement as evidence that the concept of
a tour was no longer separate from other commercial narratives. 	(Br. Opp. Defs.’
Renewed Mot. Summ. J. [“Pl.’s Br.”] 4, ECF No. 336.)

20. 	The Court concludes that a material issue of fact exists on this point. It
will be for the jury to decide what the parties meant by their statements during the
3 February 2014 meeting, and whether those statements help to elucidate the parties’
intentions with respect to Section 15 of the 2013 Agreement. 	See, e.g., Whirlpool
Corp. v. Dailey Constr., Inc., 110 N.C. App. 468, 471 (1993) (“[I[f the terms of the
contract are ambiguous then resort to extrinsic evidence is necessary and the
question is one for the jury.” (citing Cleland v. Children’s Home, Inc., 64 N.C. App.
153, 156-57 (1983))).
21. 	Defendants’ Motion on this basis is DENIED.
B. Timeliness of Defendants’ Remaining Arguments
22. 	Plaintiff asserts that Defendants should not be permitted to raise its
remaining arguments because they violate the Amended Case Management Order’s
restriction on motions that were permitted to be heard at this stage. 	(Am. Case
Mgmt. Order ¶ 3d.) According to Plaintiff, the arguments do not result from a review
of the February 2014 meeting materials and were available to Defendants when they
initially filed their summary judgment motion. 	In addition, Plaintiff contends that,
to the extent Defendants continue to challenge the enforceability of the 2013
Agreement, their argument is barred by judicial estoppel and the law of the case
doctrine. (Pl.’s Br. 6-9.)
23. 	Defendants respond that their Motion arises from the 3 February 2014
meeting because, during that meeting, the parties discussed their intent with respect
to Sections 15 and 16 of the 2013 Agreement. Citing Carl v. State, 192 N.C. App. 544

(2008), Defendants further argue that interpreting these provisions the way Intersal
does would mean that DNCR acted beyond its authority, making the provisions illegal
and unenforceable as a matter of law. 	(Defs.’ Reply Supp. Renewed Mot. Summ. J.
[“Defs.’ Reply”] 3, ECF No. 343.)
24. 	The Court agrees that Defendants’ Motion is timely given the topics
discussed during the 3 February 2014 meeting. 	The Court further agrees that
Defendants would be estopped if they were challenging the enforceability of the 2013
Agreement as a whole, but they are not. Defendants contend that Intersal should not
be able to argue that the parties’ intended particular interpretations of certain
language in the 2013 Agreement because illegal interpretations are unenforceable as
a matter of law. 	This argument has not been addressed per se, and Defendants are
not estopped from pursuing it.
i. The Emoluments Clause
25. 	Defendants next contend that interpreting Section 16(a) of the 2013
Agreement to require Defendants to “facilitate [Intersal’s] scheme” to deny access to
“anything QAR related” to anyone not willing either to pay for Nautilus’ video footage,
(which, in turn, resulted in payment to Intersal), or to pay Intersal for the right to
have access to the QAR Project to take their own images (a use or access fee) is
unreasonable because it would violate the Emoluments Clause of the North Carolina
Constitution. 	According to Defendants, such an interpretation would result in an
unconstitutional grant of an individual right to benefit from the QAR that would

serve only a private purpose rather than promote the general welfare. (Defs.’ Br. 14-
18; Defs.’ Reply 5-12.)
26. 	Plaintiff responds first that the State’s characterization of Intersal’s
interpretation is an overstatement of its position in this litigation. It maintains that
Section 16(a) was only intended to restrict third party use of QAR Project images for
commercial purposes. 	According to Intersal, “[t]he public remains free to film and
photograph QAR-related items and activities that are open to the public for their own
personal use.” (Pl.’s Br. 13, n. 3.)
27. 	Additionally, the language of Intersal’s claimed breaches belies the
State’s characterization. 	In the Third Amended Complaint Intersal alleges that
Defendants breached Section 16(a) of the 2013 Agreement in the following ways:
(a) “[D]enying Intersal an opportunity to submit the “Terms of Service”
called for by the QAR Settlement Agreement detailing permitted uses
for digital images of QAR Project activities gathered by press,” and that
DNCR “fail[ed] to advise invited press of the existence of new QAR
Project media policies[.]” (Third Am. Compl. ¶ 35A.)
(b) “Starting June 2014, in violation of para. 16.a, Defendants begin
ongoing 	and 	continuing 	refusal 	to 	implement 	and/or 	post 	online
Intersal’s submitted QAR Project Terms of Service, despite fact that its
language is identical to the language and policy previously vetted and
in use by NC Department of Commerce[.]” (Third Am. Compl. ¶ 35C.)
(c) “On September 9 and September 15, 2015 . . . Defendants continued
their failure to implement the QAR Settlement Agreement media policy,
by allowing Friends of the Queen Ann’s Revenge (“FoQAR”) to bring
Raeford Brown and crew (from the talk radio show “Live and Local with
Raeford and Friends”) to dive the QAR shipwreck and collect footage
aboard the 2015 QAR recovery vessel, upon information and belief,
without advising said Press representatives of changes to the QAR
media policy[.]” (Third Am. Compl. ¶ 35G.)

(d) “On September 14, 2015 . . . Defendants continued their failure to
implement 	specific 	mandates 	of 	the 	QAR 	Settlement 	Agreement,
including changes to QAR Project media policy (para. 16.a); leading to
Defendants’ allowing 	FoQAR to film QAR recovery operations via
independent media company Zion Consulting Group, upon information
and belief, without requiring completion of existing QAR commercial
narrative request form . . . or enforcing the new QAR media policy[.]”
(Third Am. Compl. ¶ 35H.)
28. 	The Terms of Service submitted by Intersal to Defendants provided that
the press and news media organizations that applied to DNCR for access to the QAR
Project 	“agree 	to 	limit 	their 	use 	of 	all 	QAR 	Project 	video 	and 	digital 	media
images . . . to the authorized uses described [in the Terms of Service].”7 	(Queen
Anne’s Revenge Project Press / New Media Access Application and Terms of Service
[“Terms of Service”], ECF No. 159.11.) 	The authorized uses specified that digital
media shown on air or on the web had to include the watermark and/or bug of the
news organization and be restricted to three minutes running time on the news
organization’s 	platform 	or 	website. 	In 	addition, 	if 	displayed 	on 	the 	news
organization’s website, links to the QAR and Intersal websites had to appear on the
webpage. If printed, the image had to include the watermark and/or bug of the news
organization and the cut line “Courtesy of NC DCR and Intersal, Inc.” Duplication,
re-edit, re-license and/or resale (or other use) of any of the media gathered or posted
(including media posted to public access websites such as You Tube) was forbidden
without the express written permission of Intersal. 	Taking underwater video or
7 “QAR Project video and digital media images” is defined in the Terms of Service to include
“all video and digital media images of QAR Project recovery operations (including but not
limited to all shipboard activities, at dock, on the water, and at the QAR site), QAR Lab and
Lab operations, and of all QAR artifacts, regardless of location or disposition.” 	(Terms of
Service 2.)

images was also prohibited without the express written permission of Nautilus, as
well as Intersal. (Terms of Service 1-2.)
29. 	The Terms of Service were “intended to assist D[N]CR in the safe
maintenance and control of access to the QAR Project and sites; and to help protect,
discourage infringement of, and enable enforcement of certain QAR Project media
rights held by Intersal, Inc., and its QAR video designee Nautilus Productions[.]”
(Terms of Service 1.) 	When it came to enforcement, however, Section 16(a) of the
2013 Agreement made it clear that Intersal was solely responsible. (2013 Agreement
§ 16(a)(5) (“Intersal shall bear the sole responsibility for managing and enforcing its
Terms of Service[.]”).)
30. 	In this action, Intersal seeks damages for Defendants’ alleged failure to
post Intersal’s Terms of Service and their failure otherwise to advise those seeking
access to “QAR-project related artifacts and activities” of the existence of Intersal’s
Terms of Service before granting access to the QAR Project for the purpose of
recording video or taking images. 	As a result, Intersal alleges, the press and news
organizations posted unmarked videos and images on the internet and became a
source of those images for commercial use.
31. 	Given the above, the Court concludes that Defendants’ characterization
of Intersal’s Section 16(a) claim as being one for damages resulting from Defendants’
refusal to deny access to the QAR Project to anyone not willing to pay Intersal a use
fee is overstated. 	However, to the extent Intersal contends that Defendants were

obligated to enforce their Terms of Service, (see e.g., Third Am. Compl. ¶ 35H), such
an interpretation would run afoul of the plain language of Section 16(a)(5).
32. 	Addressing 	the 	Emoluments 	Clause, 	Intersal 	argues 	that 	its
interpretation of Section 16(a) is not unconstitutional because DNCR agreed to the
provision in order to benefit the public and promote the general welfare of North
Carolina’s citizens. Specifically, Intersal maintains that the public–at–large benefits
because Section 16(a): (i) is part of the consideration exchanged for resolving
Intersal’s legal dispute with DNCR arising from the 1998 Agreement (in which
Intersal relinquished its rights to certain QAR artifacts so that all QAR artifacts
remain with the State as one intact collection) and (ii) because the interpretation
operates to continue the parties’ mutual efforts to promote the history of Blackbeard
the pirate and continue the recovery and conservation of the QAR. (Pl.’s Br. 13.)
33. 	The Emoluments Clause in the North Carolina Constitution provides
that “[n]o person or set of persons is entitled to exclusive or separate emoluments or
privileges from the community but in consideration of public services.” 	N.C. Const.
art. I, § 32. 	An emolument is “the profit arising from office, employment, or labor;
that which is received as a compensation for services, or which is annexed to the
possession of office as salary, fees, and perquisites.” Crump v. Snead, 134 N.C. App.
353, 356 (1999) (quoting Black’s Law Dictionary 524 (6th ed. 1990)). 	Thus, with
certain exceptions, the Emoluments Clause prevents the State from granting a
benefit to an individual or group that is not available to the public. Blinson v. State,
186 N.C. App. 328, 342 (2007). 	In short, the Emoluments Clause, along with other

clauses at the beginning of the Constitution’s Declaration of Rights, was intended to
“ensure that the people of North Carolina can compete equally for political and
economic advantage.” Richard Dietz, Factories of Generic Constitutionalism, 14 Elon
L. Rev. 1, 8 (2022) (internal quotation marks omitted).8
34. 	But “not every classification which favors a particular group of persons
is an exclusive or separate emolument or privilege[.]” Emerald Isle v. State, 320 N.C.
640, 652 (1987) (internal citation and quotation marks omitted). 	“[I]n determining
whether a benefit has been afforded in violation of [the Emoluments Clause], a court
must determine whether the benefit was given in consideration of public services,
intended to promote the general public welfare, or whether the benefit was given for
a private purpose, benefitting an individual or select group.” 	Peacock v. Shinn, 139
N.C. App. 487, 496 (2000). When making this determination, courts examine whether
“(1) the exemption or benefit is intended to promote the general welfare rather than
the benefit of the individual, and (2) there is a reasonable basis for the [State] to
conclude that the granting of the . . . benefit serves the public interest.” 	Id. at 495-
96 (citing Crump, 134 N.C. App. at. 357).
35. 	Further, to be constitutional, the test requires only that activities
“primarily benefit the public and not a private party[.]” Id. at 493. Even if incidental
benefits to private parties result, the benefit will generally be upheld as long as “[i]t
8 Judge Dietz explains that a shift in this State’s jurisprudence with respect to the Exclusive
Emoluments clause began in the late 1960’s with State v. Knight, 152 S.E. 2d 179 (1984) and
use of the rational basis test with respect to these claims. “Unsurprisingly, Knight marked
the end of successful Exclusive Emoluments Clause challenges.” Richard Dietz, Factories of
Generic Constitutionalism, 14 Elon L. Rev. 1, 8 (2022).

results from the . . . government’s efforts to better serve the interests of its people.”
Id. at 494 (quoting Maready v. City of Winston-Salem, 342 N.C. 708, 725 (1996))
(internal 	quotation 	marks 	omitted); 	see 	also 	Emerald 	Isle, 	320 	N.C. 	at 	655
(determining that the fact that some property owners benefitted more than others
from State action did not create an exclusive emolument because the ultimate benefit
was for the public at large.).
36. 	Here, the permit issued to Intersal awarded it the right to 75% of the
coins and precious metals recovered from the QAR. 	(Permit, ECF No. 337.9.)
However, “in order that all QAR artifacts remain as one intact collection, and in order
to permit [DNCR] to determine ultimate disposition of the artifacts[,]” the parties
agreed to swap Intersal’s right to 75% of the coins and precious metals for the rights
provided in the 1998 Agreement. 	(1998 Agreement 2.) 	This exchange continued to
be reflected in the 2013 Agreement. 	(2013 Agreement 1.) 	Accordingly, the rights
Intersal ultimately derived from the 2013 Agreement were premised on its agreement
to relinquish specific QAR artifacts (coins and precious metals) to the State for the
public good.
37. 	Further, the negotiation of an agreement to resolve Intersal’s dispute
with Defendants aligns with North Carolina’s public policy of settling disputed
claims. 	See N.C.G.S. § 150B-22(a) (“It is the policy of this State that any dispute
between an agency and another person . . . should be settled through informal

procedures.”). 	Avoiding protracted litigation is clearly in the best interests of the
citizenry.9
38. 	Accordingly, the Court concludes that Plaintiff’s claimed breaches of
Section 	16a 	do 	not 	implicate 	the 	Emoluments 	Clause 	of 	the 	North 	Carolina
Constitution. Defendants’ Motion on this basis is DENIED.
ii. Section 143-162.2
39. 	Section 143-162.2 of the North Carolina General Statutes prohibits the
State from charging a production company to film on the State’s real property (except
for that amount necessary to reimburse the State for actual costs incurred and
revenues lost). 	Because the State cannot charge such a fee, Defendants argue that
they could not agree to any provision that would have afforded Intersal the ability to
charge such a fee or otherwise to profit from images of the QAR Project. Therefore,
Defendants contend that Intersal cannot interpret the 2013 Agreement to require
DNCR to deny a production company access to State historic property for purposes of
filming unless the production company first agrees to pay Intersal. (Defs.’ Br. 18-21.)
They contend that this interpretation was discussed in the 2014 meeting and
captured by the recording, and that Mr. Masters, on behalf of Intersal, argued that
the law had been broken in the past. (Defs.’ Br. 19.)
40. 	In response, Plaintiff asserts that although the State is limited in what
it can charge a production company to film on its real property, nothing in Section
143-162.2 requires a State agency to make its real property available for filming.
9 That the 2013 Agreement has, in fact, resulted in protracted litigation is both ironic and
unfortunate.

Furthermore, Intersal contends that it has never taken the position that everyone
must pay it to access the QAR Project for the purpose of taking images, only those
seeking to create commercial narratives. (Pl.’s Br. 16-17.)
41. 	Section 143-162.2 of the North Carolina General Statutes provides that
“[i]f a State agency makes real property available to a production company . . . it shall
not charge any fee other than reimbursement of actual costs incurred and actual
revenues lost by the agency . . . . This section does not require a State agency to make
real property available to a production company for a production.” 	N.C.G.S. § 143-
162.2.
42. 	Intersal 	does 	not 	appear 	to 	interpret 	Section 	16(a) 	of 	the 	2013
Agreement to require the State, which oversees public real property, to charge
production companies an access fee on its behalf, and the plain language of 2013
Agreement would not support such an argument.10
43. 	There is also no discussion of an access fee payable to Intersal in the
Terms of Service referenced in Section 16(a) of the 2013 Agreement. 	Rather, the
Terms of Service require press and news media organizations to agree to mark their
images and use them in a limited manner. And, to the extent Intersal contemplates
charging a third party a fee for the ability to remove the marks and use the images
commercially, that fee, payable to Intersal, would result from the commercial use of
10 Section 15 of the 2013 Agreement states that “D[N]CR and Intersal agree to collaborate in
making other commercial narrative[.]” This language presupposes that DNCR has a role in
making the commercial narrative, not just in managing access to QAR Project real property
that others use to make the commercial narrative. Profit-sharing pursuant to that provision
is by agreement.

the images, not merely from being afforded access to the State’s QAR Project site to
take them.
44. 	Accordingly, the Court concludes that Plaintiff’s claimed breaches of
Section 16(a) do not implicate Section 143-162.2 of the North Carolina General
Statutes. Defendants’ Motion on this basis is DENIED.
iii. Monopolies Clause
45. 	Defendants 	next 	argue 	that 	their 	characterization 	of 	Plaintiff’s
interpretation of its media rights, “either you pay Intersal or you do not make QAR
commercial narratives,” is unenforceable because the State cannot grant Intersal the
right to an unlawful monopoly (in QAR commercial narratives) in violation of the
North Carolina Constitution. 	(N.C. Const. art. I, Section 34 [the “Monopolies
Clause”].) 	Defendants argue that nothing in the law restricts application of the
Monopolies Clause to common goods and services rather than “unique historic
artifacts,” and that “[m]aking documentaries, publishing news stories, and generally
creating content around historic artifacts is a right commonly held by the people.”
(Defs.’ Reply Br. 14.) Therefore, Defendants contend, Intersal may not seek damages
if DNCR allowed third parties to have access to the QAR Project to create commercial
narratives without first compensating Intersal. (Defs.’ Reply 12-14.)
46. 	Plaintiff 	observes 	that 	there 	is 	little 	case 	law 	interpreting 	the
Monopolies Clause in our State’s Constitution. Still, it quotes American Motors Sales
Corp. v. Peters for the proposition that “not every restraint of trade leads to a
monopoly in a particular market.” 311 N.C. 311, 316 (1984). (Pl.’s Br. 18.) Intersal

contends that the right to use images of the QAR Project commercially to create
documentaries, publish photos or videos, or create a tour is not a common right that
can be monopolized. 	Instead, the fact that the artifacts themselves are each one-of-
a-kind necessarily results in a level of exclusivity. 	As Intersal puts it, “[t]he QAR
materials and activities at issue here are sui generis.” (Pl.’s Br. 18.)
47. 	To underscore its position, Plaintiff argues that Section 121-25 of the
North Carolina General Statutes specifically permits DNCR to pay Intersal a
monetary fee or allow Intersal to retain (or sell) a portion of the relics found. 	(Pl.’s
Br. 20.) 	It argues that “Defendants offer no explanation for how Intersal’s existing
contractual rights could be an illegal monopoly when the General Assembly expressly
allows for companies such as Intersal to be the sole private source for commercial sale
of artifacts from a particular shipwreck.” (Pl.’s Br. 20.)
48. 	Further, 	Intersal argues 	that nothing 	in 	the 	law Defendants 	cite
supports 	“a 	finding 	that 	Defendants 	could 	not 	permissibly 	grant 	Intersal 	a
temporary, exclusive right to pursue revenue-generating activity in connection with
artifacts that it discovered and then granted to the State in exchange for the rights
at issue here.” (Pl.’s Br. 18 (emphasis added).) At the same time, it points out that,
in general, the right to benefit from commercial narratives using QAR artifacts was
not exclusive to it. Rather, Intersal interprets the 2013 Agreement to entitle it only

to a portion of any profit, or some fee, for commercial narratives made by others.11
(Pl.’s Br. 19.)
49. 	In reply, Defendants maintain that Section 121-25 of the North Carolina
General Statutes, which allows DNCR to grant a permit under such conditions as it
deems to be in the “best interest of the State” (to include payment of a fee set by the
Department or division of artifacts between the licensee and the Department, among
others), is inapplicable because it does not expressly grant DNCR the power to confer
a monopoly, and it contemplates that the applicant for a permit pay the fee, not that
it receive one. (Defs.’ Br. 21-22; Defs.’ Reply 12-14.)
50. 	North Carolina’s Monopolies Clause provides that “[p]erpetuities and
monopolies are contrary to the genius of a free state and shall not be allowed.” N.C.
Const. art. I, § 34. The Monopolies Clause was originally included in North Carolina’s
Constitution to prohibit “a grant by the sovereign of an exclusive privilege to do
something which had theretofore been a matter of common right.” 	State v. Harris,
216 N.C. 746, 761 (1940); see also Dietz, supra ¶ 33, at 13 (stating that the Monopolies
Clause was a response to the “crippling effects of English mercantilism on the
colonists.”). “Under our system of government, all rights and privileges are primarily
of common right, unless their restraint becomes necessary for the public good[.]”
Thrift v. Elizabeth City, 122 N.C. 31, 37 (1898).
11 The Court observes that Section 14 of the 2013 Agreement purports to provide Intersal
with the “exclusive right to produce a documentary film about the QAR project for licensing
and sale.”

51. 	A monopoly exists when an entity or organization possesses “ownership
or control of so large a portion of the market for a certain commodity that competition
is stifled, freedom of commerce is restricted, and control of prices ensues.” 	Dicesare
v. Charlotte-Mecklenburg Hosp. Auth., 376 N.C. 63, 97 (2020) (citing Am. Motor Sales
Corp., 311 N.C. at 315). 	A prerequisite to assessing a hypothetical monopolist’s
control over prices is determining the relevant market. 	Window World of Baton
Rouge, LLC v. Window World, Inc., 2016 NCBC LEIXS 82, at *17 (N.C. Super. Ct.
Oct. 25, 2016) (“[A]ntitrust claims often rise or fall on the definition of the relevant
market.”); see also Sykes v. Health Network Sols., Inc., 2017 NCBC LEXIS 73, at *18
(N.C. Super. Ct. Aug. 18, 2017) (“Without a well-defined relevant market, an
examination of a transaction’s competitive effects is without context or meaning.”
(quoting FTC v. Freeman Hosp., 69 F.3d 260, 268 (8th Cir. 1995)).12 	The party
alleging an unreasonable restraint on trade bears the burden of defining the relevant
market. Window World, 2016 NCBC LEXIS 82, at *16.
52. 	“[A] relevant market has both a product and a geographic dimension[.]”
Id. at *17 (citation and quotation marks omitted). “A relevant product market must
focus on the range of products or services that actually compete in the disputed
market, and turns on the concepts of reasonable interchangeability and cross-
12 Case law interpreting the Monopolies Clause is limited. 	Some of the cases cited herein
involve application of analogous concepts in federal antitrust law. Our Supreme Court has
cited federal antitrust law when interpreting the Monopolies Clause. 	See State v. Atlantic
Ice & Coal Co., 210 N.C. 742 (1936); cf. Rose v. Vulcan Materials Co., 282 N.C. 643, 655 (1973)
(recognizing that the body of law applying the Sherman Act, although not binding, is
nevertheless instructive in determining the full reach of Chapter 75-1, which, like the
Monopolies Clause prohibits combinations in restraint of trade.).

elasticity.” 	Sykes, 2017 NCBC LEXIS 73, at *19; see also Brown Shoe Co. v. United
States, 370 U.S. 294, 325 (1962) (“The outer boundaries of a product market are
determined by the reasonable interchangeability of use or cross-elasticity of demand
between the product itself and substitutes for it.”).
53. 	If products are reasonably interchangeable, it means that consumers
view “one product [as] roughly equivalent to another for the use to which it is put;
while there may be some degree of preference for the one over the other, either would
work effectively.” 	Allen-Myland, Inc. v. IBM Corp., 33 F.3d 194, 206 (3d Cir. 1994).
Factors for assessing reasonable interchangeability include the products’ prices, uses
and qualities. See United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 404
(1956) (stating that reasonable interchangeability is a factor of the price, use and
qualities of the products considered); cf. Oksanen v. Page Mem’l Hosp., 945 F.2d 696,
709 (4th Cir. 1991) (“A fundamental tenant of antitrust law [is] that the relevant
market definition must encompass the realities of competition.”).
54. 	Cross-elasticity 	of 	demand 	is 	an 	economic 	term 	“describing 	the
responsiveness of sales of one product to price changes in another.” 	Los Angeles
Mem’l Coliseum Comm’n v. Nat’l Football League, 726 F.2d 1381, 1393 (9th Cir.
1984). 	“A high cross-elasticity of demand indicates that products are substitutes; a
low cross-elasticity of demand indicates that the products are not substitutes and, as
a result, do not compete in the same market. 	Lenox MacLaren Surgical Corp. v.
Medtronic, Inc., 762 F.3d 1114, 1120 (10th Cir. 2014).

55. 	The Court first observes that Defendants have failed to define the
relevant market with reference to the rule of reasonable interchangeability and cross-
elasticity of demand. 	This failure is a sufficient basis alone to deny Defendants’
Motion. Cf. Window World, 2016 NCBC LEXIS 82, at *16 (“Where the plaintiff fails
to define its proposed relevant market with reference to the rule of reasonable
interchangeability and cross-elasticity of demand, or alleges a proposed relevant
market that clearly does not encompass all interchangeable substitute products even
when all inferences are granted in plaintiff’s favor, the relevant market is legally
insufficient and a motion to dismiss may be granted.”) (quoting Queen City Pizza v.
Domino’s Pizza, 124 F.3d 430, 436 (3d Cir. 1997)).
56. 	To the extent Defendants do attempt to define the relevant product
market, 	they 	do 	so in 	their reply 	brief,13 and their definition 	is 	too 	narrow.
Defendants define the relevant market as one for commercial narratives making use
of QAR artifacts. (Defs.’ Reply 12.) But a market must reflect commercial reality and
be defined to include “the group or groups of sellers or producers who have actual or
potential ability to deprive each other of significant levels of business.” 	Thurman
Indus., Inc. v. Pay ‘N Pak Stores, Inc., 875 F.2d 1369, 1374 (9th Cir. 1989).
“Monopolization of a single brand is not an antitrust violation.” Int’l Logistics Grp.,
Ltd. v. Chrysler Corp., 884 F.2d 904, 908 (6th Cir. 1989).14
13 Business Court Rule 7.7 warns that the Court “may decline to consider issues or arguments
raised by the moving party for the first time in a reply brief.”
14 Although courts on occasion have defined a market by a single brand, these cases have
centered on products that are uniquely attractive to consumers such that there are no
reasonable substitutes. See, e.g., Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of Univ. of

57. 	Defendants’ definition of the market is limited to commercial narratives
of only one type of historical artifact: those sourced from shipwrecks. 	It is further
limited to one “brand” of shipwreck artifacts, those sourced from the QAR. Sellers of
commercial narratives using QAR Project images and artifacts at the very least
compete for sales with sellers of narratives involving other shipwrecks, historical
artifacts, or even pirates or piracy in general. Accordingly, Defendants’ definition of
the market for purposes of determining whether a monopoly exists does not take into
account the range of products or services that actually compete in the disputed
market. Sykes, 2017 NCBC LEXIS 73, at *19.15
58. 	In addition, once a relevant market is identified, the Court must
determine whether Intersal, by virtue of its rights under the 2013 Agreement, would
exercise so much control over that market that other sellers would not be able to
compete, and commerce would be stifled. 	Am. Motors Sales Corp., 311 N.C. at 317.
The record is devoid of evidence that any properly defined market would be impacted
in this way. 	Cf. Dicesare, 376 N.C. at 98-99 (“[G]iven that plaintiffs have failed to
allege that the [defendant] has the ability to actually control prices in that market,
we are not persuaded that the allegations contained in the third amended complaint
Okla., 468 U.S. 85, 111 (1984) (defining the relevant market as college football broadcasts
because college football “generate[s] an audience uniquely attractive to advertisers and that
competitors are unable to offer programming that can attract a similar audience.”).
15 Defendants’ definition of the market appears to be driven by the language of the 2013
Agreement. “[C]ourts should not confuse true market power in a properly defined relevant
market with mere ‘contract power’ that a defendant may have . . . as a result of contract
restrictions voluntarily entered into between the parties.” William C. Holmes & Melissa H.
Mangiaracina, Antitrust Law Handbook § 3:4 (Thomson Reuters, 2023-2024 ed. 2023).

suffice to show that the [defendant] possesses ‘so large a portion’ of that market that
it risks causing the sort of harm to the public that N.C. Const. art. I, § 34, is designed
to prevent.”).16
59. 	Accordingly, 	the 	Court 	concludes 	that 	Defendants 	have 	failed 	to
establish 	that 	rights 	afforded 	to 	Intersal 	by 	the 	2013 	Agreement 	violate 	the
Monopolies Clause. Defendants’ Motion on this basis is DENIED.
iv. Umstead Act
60. 	Turning 	back 	to 	Intersal’s 	contention 	that 	the 	term 	“commercial
narrative” in Section 15 of the 2013 Agreement (a) includes the concept of a
blockbuster tour, and (b) that they were required to collaborate with Intersal in
making such a tour, Defendants argue that the Umstead Act, N.C.G.S. § 66-58,
prohibits such an interpretation. 	Defendants point out that the Umstead Act
restricts the ability of the State to compete with private enterprise. 	Consequently,
they argue that “commercial narrative” could only refer to items that the Umstead
Act permits DNCR to sell, such as food, books, crafts, gifts, and other tourism-related
items at State parks, museums and historic sites operated by the Department. (Defs.’
Br. 22-25.)
61. 	Plaintiff responds that the Umstead Act does not bar Defendants from
honoring their commitment to collaborate with Intersal in making a blockbuster tour
16 As was true with the Exclusive Emoluments Clause, courts examining constitutional
challenges based on the Monopolies Clause utilize the rational basis test. Under this test,
any conceivable legitimate purpose is sufficient, and the act is not arbitrary so long as it bears
a “rational . . . relation to the public health, morals, order, or safety, of the general welfare.”
G I Surplus Store, Inc. v. Hunter, 257 N.C. 206, 210 (1962) (cleaned up). “The challenging
legal question is defining what [a monopoly] is.” See Dietz, supra ¶ 33, at 13.

because that Act affords the Department the ability to generate revenue from public
and private special events, provided the resulting profits are used to support
operation of the historic site or museum administered by DNCR. 	(Pl.’s Br. 21.)
Defendants point out, however, that the language of the statute contemplates that
these events occur at the historic site or museum, and Intersal’s concept of a
blockbuster tour is not so limited. (Defs.’ Reply Br. 15.)
62. 	Plaintiff also argues that the Umstead Act is inapplicable because
touring the QAR artifacts is not an activity in which the public is ordinarily and
customarily engaged. Therefore, there is no risk that DNCR would be competing with
private enterprise. Instead, Plaintiff asserts that promoting tourism and fundraising
to support the QAR Project are legitimate functions of DNCR, and the Umstead Act
should not be interpreted to prevent Defendants from honoring contractual provisions
that support DNCR’s legitimate functions. (Pl.’s Br. 23.)
63. 	Defendants 	reply 	that 	Plaintiff, 	itself, 	contends 	that 	private 	tour
promoters engage in activity such as that contemplated by Intersal; therefore, if the
State were to engage in the same activities as a tour promoter, it would necessarily
be in competition. (Defs.’ Reply 15-16.)
64. 	“The rule in North Carolina is that it is not the function of government
to engage in private business.” 	Mitchell v. North Carolina Indus. Dev. Fin. Auth.,
273 N.C. 137, 156 (1968). This rule is codified in the Umstead Act, which prohibits:
any unit, department, or agency of the State government . . . or any
individual 	employee 	or 	employees 	of 	the 	unit, 	department, 	or
agency . . . to engage directly or indirectly in the sale of goods, wares, or
merchandise in competition with citizens of the State . . . or to maintain

service 	establishments 	for the 	rendering 	of 	services 	to 	the 	public
ordinarily and customarily rendered by private enterprises . . . or to
contract with any person, firm, or corporation for the operation or
rendering of the businesses or services . . . or to purchase for or sell to
any 	person, 	firm, 	or 	corporation 	any 	article 	of 	merchandise 	in
competition with private enterprise.
N.C.G.S. 	§ 	66-58(a). 	Subsection 	(b)(9b) 	of 	the 	Umstead Act 	provides 	specific
exceptions for DNCR including:
the sale of food pursuant to [N.C.]G.S. 111-47.2 and the sale of books,
crafts, gifts, and other tourism-related items and revenues from public
and private special events, activities, and programming at State parks,
State aquariums, historic sites and museums administered by [DNCR],
provided that the resulting profits are used to support the operation of
those sites.
N.C.G.S. § 66-58(b)(9b).
65. 	In Section 15 of the 2013 Agreement, DNCR agreed “to collaborate in
making other commercial narrative such as, but not limited to, books and e-books,
mini- and full-length documentaries, and video games.” When it comes to who would
profit from such activity, Section 15 says, “[a]ny profit-sharing agreements shall be
based on the amount of work contributed by each entity.” 	There is no requirement
that DNCR participate in or conduct a commercial narrative, only that it collaborate
with Intersal in making one. Nor is there a requirement that it enter into any profit-
sharing agreement with respect to a commercial narrative.
66. 	The Court has already held that whether the parties intended for the
term “commercial narrative” to include a blockbuster tour, and what they meant
when they agreed to “collaborate in making” commercial narratives, are matters for
the jury to decide. See Intersal, 2023 NCBC LEXIS 29, at **43-44. A jury could well
determine that the term “commercial narrative” in Section 15 of the 2013 Agreement

includes 	a 	blockbuster 	tour 	of 	the 	type 	contemplated 	by 	Intersal. 	Such 	an
interpretation would not violate the Umstead Act to the extent the jury also
interprets the requirement that DNCR “collaborate [with Intersal] in making” such
a tour not to require DNCR to (a) engage in the sale of goods in competition with
citizens of the State or (b) maintain service establishments to render services to the
public ordinarily and customarily rendered by private enterprises.
67. 	Therefore, Defendants’ Motion is DENIED to the extent it is based on
the Umstead Act.
v. Section 121-7.3
68. 	Finally, Plaintiff does not contest Defendants’ contention that Section
121-7.3 of the North Carolina General Statutes prohibits Defendants from sharing
with Intersal a portion of the admission fees charged by the state-run museums that
have hosted a QAR Project exhibit. 	(Defs.’ Br. 22-25.) 	Accordingly, the State is
entitled to summary judgment to the extent Plaintiff alleges that it has suffered
damage in the form of these lost admission fees. (See Third Am. Compl. ¶ 35J.)
IV. 	CONCLUSION
69. 	WHEREFORE, the Court hereby GRANTS in part and DENIES in
part the Motion as follows:
a. 	Defendants’ Motion is GRANTED to the extent Intersal contends that
Defendants were obligated to enforce the Terms of Service, (Third Am.
Compl. ¶ 35H).

b. 	Defendants’ Motion pursuant to G.S. 121-7.3 with respect to Plaintiff’s
claim that it is entitled to a portion of the admission fees charged by
state-run museums is GRANTED.
c. 	In all other respects, the Motion is DENIED.
SO ORDERED, this the 30th day of August, 2024.
/s/ Julianna Theall Earp
Julianna Theall Earp
Superior Court Judge
for Complex Business Court Cases