                            NO. COA14-975

                    NORTH CAROLINA COURT OF APPEALS

                        Filed: 17 February 2015


MONICA WILSON and WILSON LAW GROUP
PLLC,
     Plaintiffs,

    v.                               Wake County
                                     No. 14 CVS 2499
NORTH CAROLINA DEPARTMENT OF
COMMERCE; NC DEPARTMENT OF
COMMERCE; DIVISION OF EMPLOYMENT
SECURITY; SHARON ALLRED DECKER, in
her capacity as Secretary of
Commerce; and DALE R. FOLWELL, in
his capacity as Assistant
Secretary of Employment Security,
     Defendants.


    Appeal by defendants from order entered 13 March 2014 by

Judge Paul C. Ridgeway in Wake County Superior Court.       Heard in

the Court of Appeals 7 January 2015.


    Law Office of James C. White, P.C., by James C. White and
    Michelle M. Walker, for plaintiffs-appellees.

    The North Carolina Department of Commerce Division of
    Employment Security, by Ted Enarson and Jeremy L. Ray, for
    defendants-appellants.


    INMAN, Judge.


    Defendants   appeal     the   order     granting   plaintiffs   a

preliminary injunction compelling the disclosure of unemployment

hearings information.    Defendants contend that the interlocutory
                                             -2-
order    is        immediately       appealable       because         it     involves      a

substantial        right.      Furthermore,         they   allege     that     the     trial

court    erred      in    entering     the       preliminary     injunction       because

plaintiffs are unable to show a likelihood of success on the

merits   because         federal    law    prohibits       the   disclosure       of    the

unemployment appeals hearing notices.                      In contrast, plaintiffs

argue that the appeal should be dismissed not only because it is

moot but also because it is interlocutory and does not affect a

substantial right.           In the alternative, plaintiffs contend that

the order should be affirmed because it was decided correctly

under the law in effect at the time of the hearing.

    After careful review, we vacate the order and remand for

the trial court to enter additional findings and conclusions not

inconsistent with this opinion.

                         Factual and Procedural Background

    This       appeal       involves       the     North    Carolina         Division    of

Employment         Security’s      (“DES’s”)        decision     to        terminate     its

practice      of    providing      third     parties,      specifically        plaintiffs

Monica Wilson (“Ms. Wilson”) and her law firm Wilson Law Group

PLLC (“WLG”) (collectively, Ms. Wilson and WLG are referred to

as “plaintiffs”), with daily access to appeals hearing notices

about    unemployment        claimants       (the     “hearing      notices”).           The
                                            -3-
hearing notices listed all scheduled hearings set before DES

appeals    referees       and     hearing     officers     and       provided      various

information about each claimant, including, among other things,

the claimant’s name, address, phone number, information about

her termination, and the last four digits of her social security

number.         Since 2004, Ms. Wilson and several other attorneys

received    daily     hearing      notices        from   DES    in    exchange      for    a

monthly fee of $300.              Ms. Wilson picked her copy up daily via

courier    from     DES   because       the   notices     provided         only    14   days

notice of the scheduled hearings.

    On     26     February      2014,   in    addition     to       the    day’s   hearing

notices, DES sent Ms. Wilson an undated letter stating:

            Due to security concerns, the process of
            entering [DES] through the back door of our
            building near the mail room and outside our
            security guards [sic] knowledge will no
            longer be allowed after February 28th.     I
            understand the process of allowing attorneys
            to pick up appeals hearing notices was
            established by a former DES General Counsel
            years ago, but for the safety of our
            employees and constituents, this will end.

The letter went on to say that the hearing notices would be sent

to the law offices “at least three times per month” and that the

monthly cost would increase from $300 to $600.                            The letter was

signed     by    defendant       Dale    R.   Folwell      (“Mr.          Folwell”),     the

Assistant       Secretary    of    DES.       According        to    plaintiffs,        this
                                           -4-
change negatively impacted claimants’ ability to obtain counsel

which resulted in an unfair advantage for employers.

       On   28      February    2014,     plaintiffs     filed    a     complaint    and

request     for     injunctive     relief    against     DES,     Mr.    Folwell,    the

North Carolina Department of Commerce, and Sharon Decker (“Ms.

Decker”), the Secretary of Commerce (collectively, these parties

are referred to as “defendants”) challenging the withholding of

daily    hearing       notices.1        Plaintiffs      claimed    that    defendants

violated Chapter 132 of the General Statutes, commonly referred

to as North Carolina’s Public Records Act.                       Plaintiffs alleged

that the daily hearing notices constituted public records under

N.C.    Gen.     Stat.   §     132-6(a)    and   that    they     were    entitled    to

injunctive relief compelling DES to provide copies of the daily

hearing notices.             Plaintiffs further contended that they were

entitled       to    expedited     discovery      and     to     compensation       from

defendants for their attorneys’ fees.




1
  During the pendency of this appeal, Sharon Decker resigned her
position as Secretary of Commerce. This change does not render
plaintiffs’ claims moot but may lead to an amendment of the
pleadings with regard to acts or omissions after her departure
date.   See N.C. Gen. Stat. § 1A-1, Rule 25(f) (2013) (“When a
public officer is a party to an action in his official capacity
and during its pendency dies, resigns or otherwise ceases to
hold office, the action does not abate and his successor is
automatically substituted as a party.”).
                                             -5-
    Plaintiffs’            request     for      a    temporary       restraining        order

(“TRO”)     was    heard      by   Judge     Michael     Morgan      on    3   March    2014.

After concluding that plaintiffs were likely to prevail on their

claim     that     DES’s      refusal      to       provide    the     hearing      notices

constituted a violation of section 132-6(a), the trial court

issued a TRO and scheduled a preliminary injunction hearing.

    On 10 March 2014, plaintiffs’ petition for a preliminary

injunction        came   on    for    hearing        before    Judge      Paul    Ridgeway.

Counsel     for      the      respective        parties       submitted          affidavits,

exhibits, and arguments, and the trial court took the matter

under advisement.

    On 13 March, the trial court issued an order concluding

that plaintiffs had met their burden of proving the likelihood

that they would succeed in their public records claim and that

injunctive relief was necessary to protect plaintiffs’ rights

until the matter           could be        resolved.          Furthermore, the trial

court required defendants to allow any person access to DES

headquarters “for the purposes of picking up copies of hearing

notices     generated       that     day   in       accordance    with     that    person’s

previous request.”

    Defendants timely appealed.                       On 27 May 2014, defendants

filed   a   petition       for     writ    of   supersedeas       to      stay    the   trial
                                             -6-
court’s 13 March 2014 order pending outcome of the appeal, which

petition this Court granted.

       During the pendency of this appeal, on 25 August 2014, the

General      Assembly       enacted    Session       Law   2014-117,    “An    Act   to

Clarify      the    Confidentiality            of     Unemployment      Compensation

Records,” providing that unemployment appeal hearing notices are

“confidential information” and are specifically exempt from the

Public Records Act.

                                       Analysis

I.     Jurisdiction

       Initially,      we    must     determine      whether    the    interlocutory

preliminary injunction is immediately appealable.                      See generally

A.E.P. Indus., Inc. v. McClure, 308 N.C. 393, 400, 302 S.E.2d

754,   759    (1983)    (noting       that    “[a]    preliminary      injunction    is

interlocutory in nature, issued after notice and hearing, which

restrains a party pending final determination on the merits” and

is not immediately appealable absent a showing that it involves

a substantial right).            This Court has held that interlocutory

orders requiring the disclosure of information that an appellant

claims    constitutes         trade    secrets,       Analog   Devices,       Inc.   v.

Michalski, 157 N.C. App. 462, 465, 579 S.E.2d 449, 452 (2003),

and orders mandating the disclosure of information that a party
                                           -7-
asserts    is     protected     by    a    statutory     privilege,    Sharpe     v.

Worland, 351 N.C. 159, 166, 522 S.E.2d 577, 581 (1999), are

immediately       appealable.         We    conclude     that    the   preliminary

injunction order at issue here similarly affects a substantial

right because the order requires the disclosure of information

that   defendants     contend        constitutes     confidential      information

under both state and federal law and because defendants allege

that   this     disclosure    could        result   in   the    loss   of    federal

administrative        funding.             Consequently,        the    preliminary

injunction is immediately appealable.

II.    Mootness

       Next, we must address plaintiffs’ contention that, in light

of the amendment to section 96-4(x), defendants’ appeal is moot.

Although an amendment to a statute may render an appeal moot,

see Davis v. Zoning Bd. of Adjustment of Union Cnty., 41 N.C.

App. 579, 582, 255 S.E.2d 444, 446 (1979), statutory                        amendment

does not moot an appeal when the relief sought has not been

granted or the questions originally in controversy are still at

issue, In re Peoples, 296 N.C. 109, 147, 250 S.E.2d 890, 912

(1978) (“Whenever, during the course of litigation it develops

that the relief sought has been granted or that the questions

originally in controversy between the parties are no longer at
                                        -8-
issue, the case should be dismissed.”).              See also Lambeth v.

Town of Kure Beach, 157 N.C. App. 349, 352, 578 S.E.2d 688, 690

(2003).

    Here, N.C. Gen. Stat. 96-4(x) was amended in August 2014

specifically   to   classify     the    hearing   notices    as   confidential

information and exempt them from the public records disclosure

requirements of state law.         While the language of the amendment

appears   to   go   to    the   heart    of   plaintiffs’     claims,   it   is

plaintiffs’ contention that the amendment substantially changes

the statute and therefore is not retroactive.                See Ray v. N.C.

Dep’t of Transp., 366 N.C. 1, 9, 727 S.E.2d 675, 682 (2012)

(distinguishing between clarifying amendments that apply both to

cases brought after the statute’s effective dates and to cases

pending before the courts when the amendment is adopted and

substantive amendments where “the effective date appl[ies]”).

Thus, plaintiffs’ position is still that, based on the 2013

version of section 96-4(x), at least with respect to hearings

scheduled prior to the statutory amendment, they were entitled

to disclosure of         daily hearing notices and          to recover their

attorneys’ fees incurred in enforcing their right. The statutory

amendment does not provide plaintiffs the relief they sought:

compelled disclosure of the hearing notices prior to the August
                                         -9-
 2014 amendment and attorneys’ fees for enforcing that right.

 Accordingly, the amendment of N.C. Gen. Stat. § 96-4(x) has not

 mooted the appeal.

III.    Standard of Review

        Our standard of review from a preliminary injunction is

 “essentially de novo.”         VisionAIR, Inc. v. James, 167 N.C. App.

 504,   507,   606    S.E.2d    359,   362     (2004).    However,    the    trial

 court’s   ruling     is   “presumed     to     be   correct,   and   the    party

 challenging    the    ruling    bears    the    burden   of    showing     it   was

 erroneous.”    Id.    Generally, on appeal from an order granting or

 denying a preliminary injunction, “an appellate court is not

 bound by the findings, but may review and weigh the evidence and

 find facts for itself.”           A.E.P. Indus., 308 N.C. at 402, 302

 S.E.2d at 760.         However, the Court may vacate an injunctive

 order and remand to the trial court for entry of additional

 findings where the order’s findings fail to make all necessary

 determinations.       See N. Star Mgmt. of Am., LLC v. Sedlacek, __

 N.C. App. __, __, 762 S.E.2d 357, 363 (2014) (vacating the trial

 court’s preliminary injunction order and remanding for further

 proceedings because the trial court failed to make findings as

 to the reasonableness of the geographic scope and prohibited

 activities of a non-compete agreement); Conrad v. Jones, 31 N.C.
                                         -10-
App. 75, 79, 228 S.E.2d 618, 620 (1976) (vacating a permanent

injunction and remanding for the trial court to make findings as

to    the   plaintiff’s     interest     in     the    property       allegedly      being

trespassed upon).

IV.    Analysis

       A preliminary injunction is “an extraordinary measure” and

will only issue:

             (1)   if  a   plaintiff   is  able   to show
             likelihood of success on the merits of his
             case and (2) if a plaintiff is likely to
             sustain   irreparable    loss    unless  the
             injunction is issued, or if, in the opinion
             of the Court, issuance is necessary for the
             protection of a plaintiff's rights during
             the course of litigation.

Ridge Cmty. Investors, Inc. v. Berry, 293 N.C. 688, 701, 239

S.E.2d 566, 574 (1977) (alteration in original).                            Pursuant to

Rule    65(d),    an    order    granting     injunctive          relief   must,     among

other things, “set forth the reasons for its                             issuance [and]

shall be specific in terms[.]”                  N.C. Gen. Stat. § 1A-1, Rule

65(d) (2013).          This Court has interpreted Rule 65(d) to require

the    trial     court     to    “adequately          set    forth       findings    that

succinctly       state[]     the      reasons    for        the     issuance    of    the

injunction[.]”          Staton v. Russell, 151 N.C. App. 1, 12, 565

S.E.2d 103, 109-110 (2002).             With          regard        to      plaintiffs’

likelihood       of    success   on   the   merits,         here,    the   trial     court
                                          -11-
concluded    that    “[p]laintiffs         have    met     their    burden,        for   the

purposes of this Preliminary Injunction, of proving that there

is probable cause the [p]laintiffs will be able to established

[sic]   their     asserted      rights     under    the     North      Carolina      Public

Records Law at the trial of this matter.”                        Defendants contend

that this conclusion is erroneous because: (1) under the 2013

version     of    N.C.    Gen.    Stat.     §     96-4(x),       any     disclosure       of

confidential unemployment information must be consistent with

federal law; (2) federal regulations—specifically, 20 C.F.R. §§

603.2(a)    and    603.4(b)—prohibit         the    disclosure         of    the   hearing

notices    because       they    contain    the     name    of     the      employee     and

employer, addresses, and the reasons for the claim; (3) the

hearing notices do not fall within any exception to the federal

regulations’ general prohibition on disclosure of confidential

information;      and    (4)     the   United      States    Department         of    Labor

intended the federal regulations to set the minimum requirements

on the confidentiality of unemployment information.

    At the        preliminary injunction            hearing, defendants argued

that the disclosure of the hearing notices violated federal law

and that this violation could “impact [the] grant money that

[DES]   use[s]”     to    administer       the    appeal     hearing        system.       To

support their contention, defendants introduced, and the trial
                                        -12-
court allowed for the purpose of “explaining what [DES] did upon

receipt    of   [the]    letter,”       a    letter    from   the    United    States

Department of Labor claiming that the practice of selling the

hearing     information          constitutes          “a   failure     to      comply

substantially     with     [f]ederal        law.”      Specifically,    the    letter

asserts that the information contained in the hearing notices is

confidential and that federal law only permits the disclosure of

appeals records and decisions when they are “final.”

      In addition to involving federal regulations, plaintiffs’

claims and DES’ defenses require interpretation of two state

statutes.       North Carolina’s Public Records Act, specifically,

section 132-6, requires that “in the absence of clear statutory

exemption or exception, documents falling within the definition

of   ‘public    records’    in    the   Public      Records   Act    must     be   made

available for public inspection[,]” News & Observer Pub. Co. v.

Poole, 330 N.C. 465, 486, 412 S.E.2d 7, 19 (1992).                      The second

statute,    N.C. Gen. Stat. § 96-4, describes the administration,

powers, and duties of DES and is the statute amended since the

trial court’s issuance of the preliminary injunction at issue

here.

      Prior to its amendment, N.C. Gen. Stat. § 96-4(x) required

that any disclosure of unemployment information be consistent
                                                  -13-
with 20 C.F.R. Part 603, the federal regulations concerning the

confidentiality              of    unemployment        insurance    information.            N.C.

Gen. Stat. § 132-6 compels disclosure of public records when

there is no statutory exception or exemption.                             News & Observer,

330 N.C. at 486, 412 S.E.2d at 19.                             Accordingly, to determine

whether plaintiffs would likely succeed in their claims, the

trial court would necessarily have to consider how the federal

regulations affect a person’s right to disclosure of the hearing

notices under the Public Records Act.                           Here, the trial court’s

order      does        not    mention       the       federal    regulations     and     their

bearing, if any, on plaintiffs’ public records claim.                                       Such

analysis would be necessary before finding whether plaintiffs

had a likelihood of success on the merits.                          Given the absence of

any findings on this issue, we must vacate the order and remand

for     the       trial      court     to       make     the    necessary    findings       and

conclusions            addressing      plaintiffs’         likelihood       of   success     in

light of the applicable federal regulations.

      In      addition        to    showing       a    likelihood    of   success      on   the

merits,       a    party      seeking       a    preliminary      injunction      must      show

either     that        in    the    absence       of   injunctive    relief,      plaintiffs

would suffer an irreparable injury or that injunctive relief is

necessary         to    protect      rights       that     cannot   be    enforced     later,
                                               -14-
A.E.P., 308 N.C. at 405, 302 S.E.2d at 761-62 (noting that the

second element may be satisfied by either finding).                                      In this

case,      the    trial    court        found       that       because      plaintiffs         were

entitled     to    receive        the    hearing       notices        on    a    daily    basis,

injunctive relief was necessary to protect that right.                                   However,

since      the    trial    court        must     enter         additional        findings       and

conclusions as to the first element, this second finding may

change.      Consequently, on remand, the trial court should make

sufficient       findings     as    to       this     second      element        based    on    its

analysis of the interplay between state and federal law.2

      In     addition        to     making          the        necessary         findings       and

conclusions discussed above, the trial court also will have to

consider the amendment of N.C. Gen. Stat. § 96-4(x) in August

2014, after the trial court’s order but before this appeal was

heard.      During that time, the General Assembly passed Session

Law     2014-117,     “An     Act       to      Clarify        the    Confidentiality            of

Unemployment       Compensation          Records.”              Prior      to    this    change,

section     96-4(x)       (2013),       which    was      in    effect      at    the    time    of

plaintiffs’       hearing,        only       required          that   the       disclosure       of



2
  Because the trial court’s order was not based on a finding of
irreparable harm and defendants do not put forth any argument on
this issue on appeal, we do not address whether plaintiffs would
be able to establish irreparable harm in support of their
request for injunctive relief.
                                            -15-
unemployment information be consistent with 20 C.F.R. Part 603.

However,      the        2013    version         of    section        96-4(x)       does        not

specifically          exempt         unemployment            information          from     North

Carolina’s       Public         Records    Act        nor     does    it     classify          that

information      as      “confidential         information.”               The    statute       was

“clarified”3        in     August      2014      to     provide       that        unemployment

compensation information constitutes “confidential information”

and is exempt from the public records disclosure requirements.

      Thus,      on      remand,     the    trial       court       also    must     determine

whether the amendment to N.C. Gen. Stat. § 96-4(x) changed the

substance of the statute or merely clarified it, and in turn,

whether    the    amendment          applies      to    plaintiffs’         claims       for    the

disclosure of hearing notices created prior to the amendment.

See   Ray,    366     N.C.      at    9,   727    S.E.2d       at    681    (distinguishing

between amendments that change the substance of a statute and

those     that    clarify        a    statute,         and    noting       that    clarifying

amendments “apply to all cases pending before the courts when

the amendment is adopted, regardless of whether the underlying




3
  We note that we use the term “clarified” in quotation marks
because the General Assembly titled the session law “An Act to
Clarify.” We make no determination at this time of whether the
amendment constituted a clarifying amendment or a substantial
change to the statute, leaving that analysis for the trial court
in the first instance.
                                           -16-
claim    arose    before       or    after        the      effective      date     of    the

amendment”).

    If     the    trial      court     concludes           that     the   amendment       is

substantive, the trial court’s consideration on the merits of

plaintiffs’ claims will be two-fold.                      First, whether plaintiffs

are entitled to a preliminary injunction for the hearing notices

issued before 25 August 2014 will depend on the trial court’s

analysis    discussed        above         and     must     include       findings       and

conclusions      regarding     how     the       federal    regulations         affect   the

disclosure of unemployment information.                       Second, to determine

whether plaintiffs are entitled to a preliminary injunction for

the hearing notices issued on 25 August 2014 and afterwards, the

trial   court     must    take      into     consideration         the    new    statutory

language of section 96-4(x).

    In     contrast,      if     the       trial     court        concludes      that    the

amendment to N.C. Gen. Stat. § 96-4(x) is clarifying, the new

version of the statute would apply to plaintiffs’ requests for

the hearing notices regardless of the fact that the amendment

occurred after plaintiffs’ claim arose.                           In other words, the

amendment may be used in interpreting the earlier statute.                               See

Ferrell v. Dep't of Transp., 334 N.C. 650, 659, 435 S.E.2d 309,

315 (1993).       For purposes of remand, this means that if the
                                      -17-
trial    court    concludes   that    the    amendment     is   clarifying,   it

should    apply    the   statute     as     amended   to   determine   whether

plaintiffs       are able to show a likelihood of success on their

claims that defendants’ refusal to provide access to the hearing

notices violates N.C. Gen. Stat. § 132-6(a).

                                   Conclusion

    Based on the foregoing reasons, we vacate the trial court’s

order granting plaintiffs a preliminary injunction and remand

for the trial court to enter necessary findings and conclusions

in accordance with this opinion.



    VACATED AND REMANDED.

    Judges STEELMAN and DIETZ concur.
