Farmer v. Troy Univ.
| Decision Date | 04 November 2022 |
| Docket Number | 457PA19-2 |
| Citation | 382 N.C. 366,879 S.E.2d 124 |
| Parties | Sharell FARMER v. TROY UNIVERSITY, Pamela Gainey, and Karen Tillery |
| Court | North Carolina Supreme Court |
Kennedy, Kennedy, Kennedy and Kennedy, LLP, Winston-Salem, by Harvey L. Kennedy and Harold L. Kennedy III, for plaintiff-appellant.
Ford & Harrison, LLP, Charlotte, by Benjamin P. Fryer, for defendant-appellees.
¶ 1 Troy University is an accredited, four-year state university with multiple physical campuses in Alabama that opened an office in Fayetteville, North Carolina, specifically to recruit military students for its on-line programs. When a former North Carolina employee filed suit against Troy University alleging various state tort claims arising out of his employment in Fayetteville and his termination, the University asserted that sovereign immunity barred his claims. Reading two 2019 United States Supreme Court decisions together and consistent with earlier analogous precedent, we conclude that Troy University's actions in registering as a non-profit corporation in North Carolina and engaging in business here subject to the sue and be sued clause of the North Carolina Nonprofit Corporation Act, N.C.G.S. § 55A-3-02(a)(1) (2021), constituted an explicit waiver of its sovereign immunity. See Franchise Tax Bd. of California v. Hyatt , ––– U.S. ––––, 139 S. Ct. 1485, 203 L.Ed.2d 768 (2019) ; Thacker v. Tenn. Valley Auth. , ––– U.S. ––––, 139 S. Ct 1435, 203 L.Ed.2d 668 (2019) ; see also Georgia v. City of Chattanooga , 264 U.S. 472, 44 S.Ct. 369, 68 L.Ed. 796 (1924).
¶ 2 Troy University, a state institution, has its primary campus in Troy, Alabama. Although Troy University does not have a campus in North Carolina, it registered with the North Carolina Secretary of State as a nonprofit corporation on 25 September 2006 and leased an office building in Fayetteville, North Carolina, near Fort Bragg, where it conducted its business. Mr. Farmer was hired by Troy University in May 2014 as a recruiter and worked there until 9 September 2015. As part of his employment, Mr. Farmer recruited military personnel from Fort Bragg to take online educational courses that originated from Troy University's main campus in Troy, Alabama. Throughout his employment, he was the top recruiter in the southeastern region of the United States.
¶ 3 Mr. Farmer claims that while employed at Troy University, he was subjected to frequent and ongoing sexual harassment by Pamela Gainey and Karen Tillery, both of whom also worked at the Troy University office in Fayetteville, North Carolina. This harassment included unwanted touching, and making false statements to third parties about Mr. Farmer's sexual relationships with married women and female students. Mr. Farmer further alleges he witnessed students being subjected to sexual harassment, such as one student who was "challenged" by Mses. Gainey and Tillery "to pull his pants down and show them his penis" and another male student whom they called a "faggot."
¶ 4 Around May 2015, Mr. Farmer filed a complaint with both Troy University's Human Resources Department and Troy University's District Director about the sexual harassment he and other males had experienced. Although Mr. Farmer had given Troy University the names of several witnesses, Troy University did not interview any witnesses before deciding that Mr. Farmer's complaint lacked merit.
¶ 5 Mr. Farmer further alleges that, following his May 2015 complaint, Ms. Gainey retaliated against him by increasing his work hours and making his working conditions unreasonably onerous. On 9 September 2015, Mr. Farmer was terminated from his job at Troy University. He was escorted from the building by two police officers, one with a hand on their gun, and the other with a hand on Mr. Farmer's shoulder pushing him forward. He was also threatened with arrest if he ever set foot on the property again. As a result of this treatment, and his termination from Troy University, Mr. Farmer became homeless, could not obtain another job, and suffered serious mental health consequences.
¶ 6 On 24 July 2018, Mr. Farmer filed this suit against Troy University and the individual defendants, Ms. Gainey, and Ms. Tillery. Mr. Farmer asserted claims against Troy University for (1) wrongful discharge from employment in violation of public policy, and (2) negligent retention or supervision of an employee, or both. He also asserted claims against all defendants for intentional infliction of mental and emotional distress and tortious interference with contractual rights. In the alternative, Mr. Farmer also advanced a claim against all defendants alleging a violation of his rights under the North Carolina Constitution, in the event that the trial court found his other claims were barred by sovereign immunity.
¶ 7 On 3 October 2018, all defendants (Troy University, Ms. Gainey, and Ms. Tillery) filed a motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted, which the trial court denied. On 6 December 2018, all defendants filed an answer to Mr. Farmer's complaint, generally denying the claims and asserting numerous defenses, including sovereign immunity. On 13 May 2019, the Supreme Court of the United States issued its opinion in Franchise Tax Board of California v. Hyatt ( Hyatt III ), a five-to-four decision, and held that "States retain their sovereign immunity from private suits brought in the courts of other States." Hyatt III , ––– U.S. ––––, 139 S. Ct. 1485, 1492, 203 L.Ed.2d 768 (2019). Before Hyatt III , the rule was that States were allowed, but not constitutionally required, to extend sovereign immunity to sister States as a matter of comity. See Nevada v. Hall , 440 U.S. 410, 425, 99 S.Ct. 1182, 59 L.Ed.2d 416 (1979). Under that rule, Alabama could be sued in North Carolina by a private party if North Carolina chose not to acknowledge Alabama's sovereign immunity. See id. at 426–27, 99 S.Ct. 1182 ; see, e.g. Atl. Coast Conference v. Univ. of Md. , 230 N.C. App. 429, 440, 751 S.E.2d 612 (2013) () (citing Cox v. Roach , 218 N.C. App. 311, 318, 723 S.E.2d 340 (2012) ). Hyatt III established that in general, states are required to recognize the sovereign immunity of other states as a matter of Federal Constitutional law.
¶ 8 Two days after the decision in Hyatt III , Troy University filed another motion to dismiss on 15 May 2019 based on sovereign immunity, pursuant to Rules 12(b)(2) and 12(b)(6) of the North Carolina Rules of Civil Procedure, while individual defendants Gainey and Tillery simultaneously sought dismissal of all claims against them based on mootness in light of a stipulation filed on 25 April 2019 in which Mr. Farmer agreed not to seek damages against the individual defendants. On 24 May 2019, defendants filed an amended motion to dismiss, or in the alternative, for judgment on the pleadings on the same grounds. On 3 June 2019, Mr. Farmer filed his response. On 1 July 2019, the trial court entered an order granting the motion to dismiss as to all defendants, citing Hyatt III . Mr. Farmer appealed, but the Court of Appeals rejected Mr. Farmer's arguments and affirmed the trial court's order. Farmer v. Troy Univ. , 276 N.C. App. 53, 2021-NCCOA-36, ¶52, 855 S.E.2d 801. Mr. Farmer filed a petition for discretionary review pursuant to N.C.G.S. § 7A-31 and this Court granted review.
¶ 9 This Court reviews de novo a motion to dismiss made under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. E.g. Krawiec v. Manly , 370 N.C. 602, 606, 811 S.E.2d 542 (2018) (). "[Q]uestions of law regarding the applicability of sovereign or governmental immunity" are also reviewed de novo. Est. of Long by and through Long v. Fowler , 378 N.C. 138, 2021-NCSC-81, ¶ 12, 861 S.E.2d 686 (quoting Wray v. City of Greensboro , 370 N.C. 41, 47, 802 S.E.2d 894 (2017) ). Furthermore, sovereign immunity may be a defense under Rule 12(b)(2) of the North Carolina Rules of Civil Procedure.1 In this case, as noted above, the motion and the trial court's order were made pursuant to both Rule 12(b)(2) and Rule 12(b)(6) ; however the questions of whether there is personal jurisdiction over defendants and whether plaintiff has stated a claim for relief in this particular case both turn on the sole issue of sovereign immunity, and the standard of review is the same for both.2
¶ 10 The initial issue in this appeal is whether Mr. Farmer's state tort claims against defendants are barred in North Carolina under the doctrine of sovereign immunity by virtue of Troy University's status in Alabama as a public university. The Court of Appeals concluded that under Hyatt III , no suit may be maintained because "States retain their sovereign immunity from private suits brought in the courts of other States." Farmer , ¶ 14 (quoting Hyatt III , 139 S. Ct. at 1492 ).
¶ 11 The doctrine of sovereign immunity, establishing that a sovereign cannot be sued without its consent, see Alden v. Maine, 527 U.S. 706, 715–16, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999), was widely accepted in the states at the time the Constitution was drafted. Hyatt III , 139 S. Ct. at 1493–1495. As Alexander Hamilton explained in The Federalist No. 81, "It is inherent in the nature of sovereignty not to be amenable to the suit of an individual without its consent ... and the exemption is ... now enjoyed by the government of every State in the Union." The Federalist No. 81, at 487 (Alexander Hamilton) (J. & A. McLean ed., 1788).
¶ 12 Sovereign immunity is enshrined in Alabama's Constitution...
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