In a short order issued last week, the North Carolina Supreme Court narrowly voted to vacate a Court of Appeals’ opinion in connection with dismissing an appeal on mootness grounds.  Well, I said that the order was short, but it garnered a concurrence and three dissents.  Why all the fuss?

Walker v. Wake County Sheriff’s Department involved defamation allegations against certain county and media defendants.  The trial court threw out all the claims.  On appeal, a panel of the North Carolina Court of Appeals affirmed the dismissal as to the media defendants (citing the “fair report privilege”) but reinstated the claims against the county defendants (finding that fact issues regarding public official immunity precluded judgment on the pleadings).   

The plaintiff sought discretionary review of the portion of the opinion affirming the dismissal of his claims against the media.  The Supreme Court granted the petition, and the parties fully briefed the issues.  As the time for oral argument approached, however, the parties settled the case.  Citing the settlement and with the consent of the media defendants, the plaintiff moved to dismiss the appeal, since “a controversy no longer exists between them.”

Here’s where it gets interesting.  The Justices took at least three positions on what to do with plaintiff’s motion:

1.         The majority voted to grant the motion and vacate the Court of Appeals opinion in full.

2.         Two dissenting Justices, each writing separately, voted to grant the motion but leave the Court of Appeals opinion intact and precedential.

3.         Another dissenting Justice did not expressly weigh in on plaintiff’s motion, but wrote separately to clarify that the Court could force the parties to continue to litigate the case if the Court so preferred.

All the Justices appear to agree that the “usual disposition” in these situations is option 2:  grant the motion but leave the Court of Appeals opinion intact and precedential.  The dispute among the Justices centers on whether this case merited a deviation from the “usual disposition.”

There are good arguments on all sides.

Consider a case where a trial court denies summary judgment in a detailed order, resolving a key issue of law in the process.  The case then settles before trial.  Everyone agrees that the trial court’s summary judgment order no longer binds anyone.  To be sure, parties in other cases can cite it as persuasive authority, as often happens when the interlocutory decision is issued by the Business Court and is therefore easily located online.  But, absent a request by the parties, the trial court is unlikely to vacate its earlier order sua sponte.

Now change the hypothetical, and assume that the case ends in a detailed judgment resolving a key issue of law.  What happens if the case settles on appeal before the North Carolina Court of Appeals can rule on its merits?  Again, the general practice is for the appeal to be dismissed, with the trial court’s judgment staying on the books. 

The equities shift, however, when a case settles after the Court of Appeals issues a precedential decision and the Supreme Court grants discretionary review.  If the panel decision warrants discretionary review, then why should non-parties to the case be bound by it just because the opinion narrowly evaded Supreme Court review?

There are countervailing considerations here, though.

For one, the motion did not ask for the Court of Appeals opinion to be vacated.  So this isn’t a situation where the possibility of vacatur necessarily played a material role in the settlement negotiations.

Second, the PDR was granted only as to the dispute between the plaintiff and the media defendants.  The dispute between the plaintiff and the county defendants was never before the Supreme Court.  In fact, I can’t tell from the public filings whether the dispute between the plaintiff and the county defendants was even settled.  If not, then what happens now with that dispute? 

Third, a view of the merits may have influenced the disposition.  In his concurrence, Justice Dietz recognized that the Court of Appeals’ opinion approached the fair report privilege differently than our sister jurisdictions. In the face of such uncertainty, vacatur “permits the Court of Appeals to refine its holding in future cases and perhaps avoid the issues that led us to review this case in the first place.”

Two more notes.

Our appellate team was in this exact situation a few years back.  A plaintiff lost at the trial court level.  We were hired for the appeal and obtained a 3-0 reversal from the Court of Appeals.  The defendant filed a PDR, which was granted.  The case then settled.  The parties moved to dismiss the appeal and took differing positions on whether the Court of Appeals opinion should be vacated.  The Supreme Court ultimately granted the motion and vacated the Court of Appeals’ decision.

Finally, these issues are often litigated before the United States Supreme Court as well.  The general practice there “is to reverse or vacate the judgment below and remand with a direction to dismiss.”  United States v. Munsingwear, Inc., 340 U.S. 36, 39 (1950).  There are a number of caveats, though.  See, e.g., “Practice Pointer: Mootness and Munsingwear Vacatur,” SCOTUSblog (June 10, 2008).

It isn’t often we get this detailed a glimpse into the Court’s internal deliberations. The order–including the several separate opinions–are worth a read in full.