In appeals, the general rule is that litigants cannot appeal an interlocutory order until a final judgment is entered. But in North Carolina, a major statutory exception to the general rule exists: When the trial court’s interlocutory ruling “affects a substantial right” that will be lost absent immediate appellate review. See N.C. Gen. Stat. § 7A-27; N.C. Gen. Stat. § 1-277. The qualifying maxim is that the substantial right doctrine is more easily stated than applied. And that’s when the statement of grounds for appellate review can be critical.
So what must an appellant do to demonstrate that an appeal impacts a substantial right? Most appellate opinions answer this question by explaining what’s not enough. For example, an appellant must do more than state that the order on appeal affects a substantial right or cite the substantial right statute.
But what about identifying the subcategory of the substantial right doctrine that the appeal falls within? Well, it depends. When a right to interlocutory appellate review is both well-established and not fact dependent, a brief statement can be enough. For example, orders denying a motion to dismiss for lack of personal jurisdiction typically require no more than a statement identifying the type of order being appealed and a supporting citation (or more, if applicable). The same is true of or orders denying motions to compel arbitration.
But when an appeal falls under a substantial right subcategory that requires a fact-dependent inquiry, appellants cannot just state in a conclusory fashion that the appeal fits within that subcategory. For example, assertions than an order creates a risk of inconsistent verdicts typically require a fact-dependent analysis—meaning that a more robust statement of grounds for appellate review is required. But how much detail is enough?
The Supreme Court grappled with this question in Gardner v. Richmond County, 906 S.E.2d 464 (N.C. Oct. 18, 2024). In Gardner, the Town of Dobbin Heights and various other plaintiffs sought a declaratory judgment that Richmond County Commissioners had improperly rezoned a large piece of property. While the trial court dismissed the Town’s claim for a lack of standing, the remaining plaintiffs’ claims survived.
The Town appealed, arguing that its dismissal created a risk of inconsistent verdicts. A unanimous Court of Appeals sua sponte dismissed the appeal for the Town’s failure to prove appellate jurisdiction. While acknowledging that the Town’s brief had cited an analogous case, Creek Pointe, the Court of Appeals wanted more—a detailed explanation on how the order might subject plaintiff to the risk of inconsistent verdicts.
The Supreme Court accepted the case for discretionary review to decide whether the Town’s statement of jurisdiction was enough. At oral argument, Justice Dietz offered insight on what caught the Court’s eye: “We know that the right to avoid inconsistent verdicts is a substantial right that will be lost. And I think on the record in this case there’s a risk of inconsistent verdicts. What we need to figure out is, was the Court of Appeals correct in saying [that plaintiff-appellant] didn’t articulate it well enough?”
Here’s the Town’s statement of grounds for appellate review:
[T]he trial court concluded that Dobbins Heights lacks standing but that all other Plaintiffs have standing. Were this Court to conclude that Dobbins Heights does not have a substantial right affected and dismiss this appeal, there would be the possibility of two trials (one for the remaining Plaintiffs and one for Dobbins Heights if the Court were to find that it has standing through a subsequent appeal). Two trials on the same issue would raise the possibility of inconsistent verdicts, and per this Court’s holding in Creek Pointe, such duplicative litigation would work significant injury and prejudice to Dobbins Heights.
During oral argument, a justice remarked, “I mean what more could you possibly say? … That’s more analysis I think than I’ve ever seen in a statement of the grounds for appellate review on this question—so what’s going on here?”
A few weeks ago, the Supreme Court issued a short opinion reinstating the appeal with the following analysis: “The statement of appellate review in the Town’s brief adequately explained why the particular facts of this case satisfy the substantial rights test based on the holding in Creek Pointe. See In re Civil Penalty.” Gardner v. Richmond Cnty., 906 S.E.2d 464 (N.C. Oct. 18, 2024).
As most of our readers know, In re Civil Penalty established the principle that the first Court of Appeals opinion to decide an issue controls all future panels because the Court of Appeals cannot overrule itself. The Supreme Court citing In re Civil Penalty suggests that the procedural posture underlying the two cases was so closely aligned that Creek Pointe compelled the conclusion that a risk of inconsistent verdicts existed for the Gardner appellant.
Takeaway: When a risk of inconsistent verdicts can be reasonably deduced from the factual analysis of a prior case, the appellant’s brief doesn’t have to lay out in detail how that risk could arise in a new case. On the other hand, Gardner is a reminder that a statement of grounds for appellate review should not be an afterthought.
*Nick Lyskin contributed to this article but is licensed only in Georgia and California.
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