John M. Kirby May 1, 2014

In Twin County Motorsports, decided on November 5, 2013, the Court of Appeals re-affirmed the rule in North Carolina that a corporation cannot be represented in a judicial (or quasi-judicial) hearing by anyone other than a lawyer. Even the owners and officers of the corporation cannot represent the corporation.

In this case, the DMV suspended the license of Twin City Motorsports, Inc., to inspect vehicles. At the administrative hearing, the licensee was represented by its owner. The licensee appealed to court, and the Superior Court remanded for a new hearing with the corporate licensee to be represented by counsel.

On appeal, the Court held that North Carolina law requires a corporation to be represented by an attorney (if at all). The court distinguished a case from 2007 which held that a corporation can be represented by a non-lawyer in a proceeding before the Office of Administrative Hearings (OAH). The court held that the lower court properly remanded the case for a new hearing.

This case is a little peculiar in terms of the result. The court remanded for a hearing before the administrative agency, with the corporation to be represented by a lawyer. First, it is not clear whether the corporation must appear at all at the hearing; the opinion could be read to mean that the corporation must appear, if at all, through a lawyer. Hearings are often conducted in the absence of a party who has received proper notice of the proceeding. Second, and more importantly, it is not cleary why the appropriate remedy was a rehearing, rather than simply affirming the adverse ruling against the respondent. Or, viewed alternatively, it is not clear that the error prejudiced the respondent, as its owner chose to represent itself at the hearing. In the primary precedential case (Lexis-Nexis v. Travishan), there is no indication that the remedy for the unauthorized practice of law in court (or before an agency) is a rehearing. In Travishan, the Court of Appeals actually reviewed the non-lawyer's arguments on appeal and rejected them (without e.g. requiring re-briefing), and it reversed the lower court's determination that the corporation could be represented by its owner, but it did not remand for further hearings. In Travishan, the Superior Court dismissed the corporations counter-claims, and denied its motions for reconsideration, but pursuant to the holding of Twin City the proper result would have been a remand to allow the corporation to appear through a lawyer.

On this same date, the Court of Appeals issued an unpublished decision in a similar case. In this case, In Re Shell LLC, the Superior Court had affirmed the DMV's action. The Court of Appeals held that this was error and further remand to the DMV "to conduct a new hearing where Jerry�s Shell shall be represented by legal counsel." The court thus apparently approved of the action of the respondent in requesting an administrative hearing before the DMV, upon receiving a "Notice of Charge." One might have thought that such a request was itself the unauthorized practice of law; such an action is arguably more than making an appearance, which is permissible by a non-lawyer in some circumstances.

The North Carolina law regarding the ability of a corporation to represent itself in court and administrative proceedings is still evolving. This is especially so in administrative proceedings.

John Kirby has handled class action litigation involving the unauthorized practice of law (UPL), and has represented small corporations and LLCs in court in North Carolina.