Wilmington North Carolina Business Law and Litigation Attorney Blog

Port City Java Sues Founder

Wilmington-based coffee-house chain Port City Java has filed suit against its founder and former COO Don Reynolds.  The suit, filed in New Hanover County Superior Court, alleges that Reynolds, his wife, and an LLC held by Reynolds, diverted funds from the company for personal use, including the purchase of real estate in Highland, NC. 

According to the Star-News, the suit was filed on December 23, and in keeping with the Rules of Civil Procedure, does not specify the dollar amount sought, but instead recites the claim for damages as "in excess of $10,000."

NC Gas Stations Settle Price Gouging Cases

The Star-News is reporting that several North Carolina gas station owners have agreed to settle price gouging cases.  The cases were brought by state Attorney General Roy Cooper after Governor Mike Easley invoked a state law prohibiting the charging of prices that are "unreasonably excessive."

The statute - N.C. Gen. Stat. § 75-38 - prohibits such prices on goods that are "consumed or used as a direct result of an emergency or which are consumed or used to preserve, protect, or sustain life, health, safety, or economic well-being of persons or their property."

In order for the law to apply, however, the Governor must first make a finding that there has been an "abnormal market disruption."  This is defined in subsection (d) of the statute to include any declaration of a state of emergency or disaster is issued by the President, or the Department of Homeland Security advisory system issues a Code Red alert.  Triggering events can include war, a terrorist attack, a natural disaster, power outage, or other "extraordinary adverse circumstances."

In the case of the recent September price spikes, the trigger was hurricane Gustav - and the fear that gripped the oil markets - as it moved into the Gulf.

Starting a Business in Wilmington, NC: Some Resources

If you are starting a business in North Carolina, particularly in the Wilmington area, here are some resources to help you get started.  Note that even if you are not around Wilmington, many of these services have offices in your area.  If you have any questions or would like a list of similar services in your area, please contact us. 

Small Business Technology Development Center.  Assists new businesses with planning, operation, human resources, marketing, government contracts, and other aspects of business.

Contact:    SBTDC
                5051 New Center Drive
                Wilmington, NC 28403-3297
                910-962-3744
                http://www.sbtdc.org

Wilmington SCORE.  Provides free business counseling and mentoring.  Holds seminars on topics such as accounting, business planning, and marketing.

Contact:  Wilmington SCORE
                    4010 Oleander Drive, Suite 6
                    Wilmington, NC 28403
                    910-452-5395
                    http://www.wilmingtonscore.org

Cape Fear Community College - Small Business Center.  Provides classes and counseling for small businesses.  Also offers a library of resources for new and small businesses, including books, pamphlets, videos and software.

Contact:        CFCC Small Business Center
                    419 North Third Street
                    Wilmington, NC 28401
                    E-mail:  [email protected]
                    910-362-7216

 

Brunswick County At It Again: Regulating Taxi Fares Through the Roof

Brunswick County recently had a problem:  taxi drivers weren't charging their passengers enough.   Licensed taxi companies from New Hanover County complained that they couldn't compete with Leland's unregulated jitney brigade - never mind the fact that they have to travel several miles one way just to reach Leland.  Brunswick County now regulates taxi fares, which is sure to cost travelers more. 

According to police chief Osey Sanders, "It's not fair to legitimate taxi companies to let the gypsy cabs roam free."  Why?  And how do you define "legitimate" against "illegitimate"? 

As was the case in the recent roadside shrimp scare -- it's for everyone's safety!  Sanders told the Star News that "it might not be safe for customers". So based on this unsupported bit of hand-waving, Leland concluded that it had to require taxi companies and drivers to get an annual business license to operate in town. For that, "the police department must inspect the cab, it must be metered and have insurance, and its driver must have satisfactory driving and criminal records." 

What's odd about this is that every driver has to be insured by law anyway, whether driving a cab or not; and having a "satisfactory" driving and criminal record is also required of drivers.  "Unsatisfactory" records might include DWI or Driving While Revoked convictions; convictions for which drivers would already lose the ability to drive, at least to some degree. 

So the only real change is having the police inspect the vehicles.  But the question is:  inspect them for what?  The state already inspects vehicles.  We get that done every year.  What exactly is Leland's proposal doing that the vast bureaucracy of the DMV isn't doing already?  Besides costing entrepreneurs a lot of money on wasteful bureaucratic exercises?

But at least Leland is Doing Something.  And the result is that passengers will now pay a "causeway fee" of $15 for taxis coming over the bridge from Wilmington.  No matter how short the trip from point to point within Leland, if the cab has to come over the bridge, a $15 fee will be added.  Small wonder then that of the 34 permits issued in the last month, most have come from Wilmington companies. 

Brunswick County to Regulate Shrimp Sales?

The Star News is reporting today that shrimp retailers - those with fixed, brick-and-mortar locations - in Brunswick County want to see the county place regulations on roadside shrimp vendors. 

As is often the case, the retailers who favor these regulations cite "safety concerns" in support of their position.

But roadside shrimp vendor Glenn Williams takes the more plausible view that the retailers just don't like the competition from guys in pickup trucks with their coolers on the tailgate.

As alluded to in a previous post, it may be true that there is a competitive advantage to being exempt from the myriad of rules and regulations that hamstring many businesses. 

But the appropriate course of action is always to fight against the excessive rules that apply to you, rather than demanding more rules for others.  Demanding rules for others creates a "culture of regulation." Once that starts, the only way to "win" the game is to maintain influence over the regulators in a way that favors you and disadvantages your competitors.  Over time, that becomes a very difficult and expensive proposition.  The better course is fight tirelessly against the source of the regulatory power that's hurting your business, so that all market participants can operate their businesses freely.

PS -- I have to mention, I was very impressed by this quote from Pam Overstreet, the county environmental health supervisor:

"It's pretty much self-regulating," she said. "Most anyone can tell when seafood isn't fresh."  She said people should make sure the seafood they are purchasing is stored properly and at the correct temperatures.

Amen!  It's refreshing when anyone - especially someone in government - takes the position that people aren't stupid and can figure things out for themselves. 

If A Tree Fell In The Forest, Would Boiling Spring Lakes Have Any Left?

A recent attempt to place a moratorium on logging permits in Boiling Spring Lakes has failed.  For the past six months, residents have been  cutting trees like mad to avoid having their property designated a protected habitat by the Federal government.  While the feds took their time figuring out which citizens will have to pay for the preservation of the red cockaded woodpecker and which ones wouldn't, the people of Boiling Spring Lakes took no chances, clear cutting pine to exempt their property from the designation.  Now that the map is out, landowners outside the current "woodpecker zones" continue to apply for logging permits, to prevent the spread of woodpecker habitats to their own properties, out of concern that the regulations will devalue their properties - or even render them practically worthless - in the future.

Of course, what this is really about is one of my favorite subjects: the law of unintended consequences.  While the regulations enacted to preserve the woodpecker are admirable and well-intended, they are another prime example of why you don't, or shouldn't, legislate off the cuff.  If the consequences haven't been thought through carefully; if there has been no examination of the legal, economic, social, political and other variables that affect the situation, inevitably we end up doing more harm than good.  Here, it appears that the very regulations meant to save the woodpecker have instead led to the clear cutting of its habitat.  Had the drafters of these regulations understood, or simply thought about, the ways in which property owners might respond, they might have taken a better approach, one that would not have spawned a run on logging permits.  And Boiling Spring Lakes residents would have kept their trees, and the woodpeckers would still have their habitats.