Comm. to Elect Dan Forest v. Emps. Political Action Comm. (EMPAC)

Citation376 N.C. 558,853 S.E.2d 698
Decision Date05 February 2021
Docket NumberNo. 231A18,231A18
CourtUnited States State Supreme Court of North Carolina

Walker Law Firm, PLLC, by David Steven Walker, II, for plaintiff.

Stevens Martin Vaughn & Tadych, by C. Amanda Martin, Raleigh, and Michael J. Tadych, for defendant.

HUDSON, Justice.

¶ 1 At issue here is a question of first impression for our Court: whether the North Carolina Constitution limits the jurisdiction of our courts in the same manner as the standing requirements Article III imposes on federal courts, including the requirement that the complaining party must show she has suffered "injury in fact," even where an Act of the North Carolina General Assembly expressly confers standing to sue on a party, as it did in N.C.G.S. § 163-278.39A(f) (2011) (now repealed). We hold that it does not, and we affirm the decision of the Court of Appeals.1

I. Factual Background and Procedural History

¶ 2 In 2012, Linda Coleman and Dan Forest were, respectively, the Democratic and Republican candidates for Lieutenant Governor of North Carolina in the general election. The Employees Political Action Committee ("EMPAC" or "defendant"), a political action committee for the State Employees Association of North Carolina (SEANC), ran television advertisements supporting Ms. Coleman. According to plaintiff's complaint, the original version of the advertisement placed by EMPAC included a photograph of an individual that was approximately one-eighth the height of the full advertisement and, at any rate, was not a full-screen picture as then required by law. Furthermore, the individual in the picture, Dana Cope, was neither the Chief Executive Officer nor the treasurer of EMPAC as required by then-existing law.

¶ 3 After discovering the ad, the Committee to Elect Dan Forest (hereinafter, "plaintiff" or "the Committee") sent a notice and letter to the North Carolina State Board of Elections and EMPAC regarding the size of the picture. The notice did not mention that the wrong individual was pictured. EMPAC subsequently removed the advertisement and replaced it with one including a full-screen picture. The full-screen picture in the second advertisement was also of Mr. Cope, and therefore also failed to comply fully with disclosure requirements.

¶ 4 Mr. Forest ultimately won the 2012 election for Lieutenant Governor. Thereafter, on 9 March 2016, his Committee filed a complaint in the Superior Court of Wake County against EMPAC, alleging violations of N.C.G.S. § 163-278.39A.

¶ 5 In 1999, the North Carolina General Assembly enacted N.C. Session Law 1999-453, codified at N.C.G.S. § 163-278.38Z et seq. (2011) (hereinafter, "Disclosure Statute"), as a "Stand By Your Ad" law.2 The Disclosure Statute provided specific requirements for television and radio ads placed by candidate campaign committees, political action committees, and others supporting or opposing candidates. See generally N.C.G.S. § 163-278.39A. In pertinent part, the Disclosure Statute provided that television ads by political action committees "shall include a disclosure statement spoken by the chief executive officer or treasurer of the political action committee and containing at least the following words: ‘The [name of political action committee] political action committee sponsored this ad opposing/supporting [name of candidate] for [name of office].’ " Id. § 163-278.39A(b)(3). Furthermore, the Disclosure Statute required that, for all ads on television falling under the statute, "an unobscured, full-screen picture containing the disclosing individual, either in photographic form or through the actual appearance of the disclosing individual on camera, shall be featured throughout the duration of the disclosure statement." Id. § 163-278.39A(b)(6).

¶ 6 The Disclosure Statute also included a notable enforcement mechanism. In a section entitled "Legal Remedy," it created a private cause of action as follows:

[A] candidate for an elective office who complied with the television and radio disclosure requirements throughout that candidate's entire campaign shall have a monetary remedy in a civil action against (i) an opposing candidate or candidate committee whose television or radio advertisement violates these disclosure requirements and (ii) against any political party organization, political action committee, individual, or other sponsor whose advertisements for that elective office violates these disclosure requirements[.]3

Id. § 163-278.39A(f). The North Carolina Court of Appeals has previously characterized the cause of action created by the General Assembly in the Disclosure Statute as "unique in the world of election law." Friends of Joe Sam Queen v. Ralph Hise for N.C. Senate, 223 N.C. App. 395, 403 n.7, 735 S.E.2d 229 (2012).

¶ 7 Plaintiff's complaint alleged two violations of the Disclosure Statute by EMPAC: (1) from 8 October through 25 October 2012, EMPAC ran a television ad that did not include "a full-screened picture containing the disclosing individual" but a much smaller one; and (2) Mr. Cope, the individual pictured in both versions of the ad, was not in fact "the Chief Executive Officer or treasurer of EMPAC."4 The complaint included as attachments an affidavit from Mr. Forest attesting the Committee was bringing the complaint on his behalf, records of the proposed schedule for ad run times with Time Warner Cable, the invoices for the ads, and copies of the notice and letter sent to the State Board of Elections and EMPAC. Defendant filed an answer and motion to dismiss based on lack of standing, which was denied. After failing to answer discovery, plaintiff voluntarily dismissed the lawsuit on 30 June 2015 and refiled on 9 March 2016.

¶ 8 After discovery in the case proceeded, defendant filed a motion for summary judgment on 29 June 2016, arguing the Disclosure Statute violated the First Amendment as a content-based restriction on speech. After hearing the motion on 16 August 2016, the trial court entered an order on 15 February 2017 granting defendant's motion for summary judgment, stating that "plaintiff ha[d] failed to allege any forecast of damage other than speculative damage" and that "[i]n the absence of any forecast of actual demonstrable damages, the statute at issue is unconstitutional as applied."5 Plaintiff gave timely notice of appeal to the North Carolina Court of Appeals.

¶ 9 In a split decision issued on 19 June 2018, the Court of Appeals reversed the trial court's grant of summary judgment to EMPAC. Comm. to Elect Dan Forest v. Employees Pol. Action Comm. (EMPAC) , 260 N.C. App. 1, 2, 817 S.E.2d 738 (2018). The majority reasoned that by "actual demonstrable damages" the trial court meant the Committee lacked standing to sue because Mr. Forest had not shown adequate "injury." Relying on decisions of this Court, the majority held the Committee had standing to sue because the Disclosure Statute creates a private right of action for a candidate against a party when that party runs an ad in the candidate's election violating the Statute and "the breach of the private right, itself, constitutes an injury which provides standing to seek recourse." Id. at 8, 817 S.E.2d 738. The majority further held the damages awarded under the Disclosure Statute were not unconstitutionally excessive even absent a showing of actual damages and that the Disclosure Statute did not per se violate the First Amendment, as EMPAC had argued on appeal. Id. at 11–12, 817 S.E.2d 738.

¶ 10 Chief Judge McGee dissented from the majority decision of the Court of Appeals, maintaining that plaintiff had not satisfied the condition precedent required by the Disclosure Statute and also that plaintiff lacked standing to sue because it had not shown "actual harm." Id. at 13, 817 S.E.2d 738 (McGee, C.J., dissenting). While noting that "North Carolina courts are not constitutionally bound by the standing jurisprudence established by the United States Supreme Court[,]" the dissent also noted that North Carolina appellate courts had previously applied United States Supreme Court decisions to questions of standing and, therefore, United States Supreme Court precedent is binding on the Court of Appeals. Id. at 14, 817 S.E.2d 738. The dissent noted that our courts have used the language "injury in fact" to describe the standing inquiry and then cited and extensively reviewed the recent United States Supreme Court decision in Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016), to support the proposition that the North Carolina Constitution imposes the same "injury-in-fact" requirements of a "concrete" and "particularized" injury as the United States Constitution imposes on federal courts, including the implication that a statutory conferral of standing, without more, does not necessarily give a party sufficient interest to have standing to sue. Comm. to Elect Dan Forest , 260 N.C. App. at 14–16, 817 S.E.2d 738. The dissent concluded, following the reasoning in Spokeo , that a statutory grant of standing does not necessarily confer standing on a party under the North Carolina Constitution absent a concrete and particularized injury in fact and, because the interests vindicated by the statute were public and not private, the Committee had not suffered adequate harm to satisfy the injury requirements for standing. Id. at 19, 817 S.E.2d 738.

¶ 11 EMPAC appealed to this Court based on the dissent. This Court also granted EMPAC's petition for discretionary review of additional issues, which asked this Court to determine whether the Disclosure Statute was an unconstitutional restriction on EMPAC's free-speech rights and what standard should apply to that inquiry.

II. Standard of Review

¶ 12 We review the grant or denial of summary judgment de novo. Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC , 365 N.C. 520, 523, 723 S.E.2d 744 (2012)....

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