Howell v. Cooper

• Docket Number: COA22-571
• Decision Date: 05 September 2023
• Citation: 892 S.E.2d 445
• Parties: Tiffany HOWELL ; et al., Plaintiffs, v. Roy COOPER, III, in his official capacity as Governor; at al., Defendants.
• Court: North Carolina Court of Appeals

892 S.E.2d 445

Tiffany HOWELL ; et al., Plaintiffs, v. Roy COOPER, III, in his official capacity as Governor; at al., Defendants.

No. COA22-571

Court of Appeals of North Carolina.

Filed September 5, 2023

Kitchen Law, PLLC, by S. C. Kitchen, for Plaintiffs-Appellees.

Attorney GeneralJoshua H. Stein, by Special Deputy Attorneys General Matthew Tulchin and Michael T. Wood, for Roy A. Cooper, III, in his official capacity as Governor, and the State of North Carolina, Defendants-Appellants.

No brief filed for Tim Moore, in his official capacity as Speaker of the House of Representatives, and Phil Berger, in his official capacity as President Pro Tempore of the Senate, Defendants-Appellants.

WOOD, Judge.

Governor Roy Cooper(the "Governor"), the State of North Carolina(the "State"), and Speaker of the House Tim Moore and President Pro Tempore of the Senate Phil Berger("Defendants Moore and Berger"), collectively referred to as "Defendants," appeal the trial court's denial of a motion to dismiss a complaint brought by individuals and incorporated entities owning or operating bars ("Plaintiffs").Plaintiffs’ complaint alleged causes of action under N.C. Const. art. 1, §§ 1,19, regarding North Carolinians’ right to "the enjoyment of the fruits of their own labor" and to substantive due process under "the law of the land."We hold sovereign immunity does not bar Plaintiffs’ claims and Plaintiffs state colorable constitutional claims.

I.Factual and Procedural History

After the Governor declared a state of emergency in March 2020 in response to COVID-19 and issued a series of executive orders initially closing bars and repeatedly extending the closure, Plaintiffs filed their original complaint on 22 December 2020.In it, Plaintiffs alleged the executive orders made their businesses "unprofitable to operate" and caused "financial damages due to the closing of their respective businesses, or the severe restrictions placed on their respective businesses."Plaintiffs put forward five causes of action, alleging the following violations of their constitutional rights: (1) their right to earn a living ("the enjoyment of the fruits of their own labor") under N.C. Const. art. I, § 1(the "fruits of labor clause");(2) a purported as-applied challenge to N.C. Gen. Stat. § 166A-19.31(b)(2)(2020);(3) their substantive due process rights under N.C. Const. art. I, § 19(the "law of the land clause");(4) their right to equal protection of the laws under N.C. Const. art. I, § 19; and (5) a facial challenge to N.C. Gen. Stat. § 166A-19.30(c)(2020).Plaintiffs claimed damages "in excess of $25,000" and requested a permanent injunction preventing any further impairment on Plaintiffs’ businesses.

On 29 January 2021, the Governor and the State filed a motion to dismiss Plaintiffs’ complaint pursuant to N.C. R. Civ. P. 12(b)(1), 12(b)(2), and 12(b)(6) and noted any facial challenges to statutes would need to be heard by a three-judge panel of the superior court pursuant to N.C. Gen. Stat. § 1-267.1(a1)(2022).Accordingly, on 15 March 2021, the trial court transferred Plaintiffs’ fifth cause of action, a facial challenge to the operative statute, to a three-judge panel.

On 11 May 2021, Plaintiffs filed an amended complaint adding Defendants Moore and Berger.On 12 July 2021, the Governor and the State filed a motion to dismiss Plaintiffs’ amended complaint pursuant to N.C. R. Civ. P. 12(b)(1), 12(b)(2), and 12(b)(6).On 19 July 2021, Defendants Moore and Berger answered Plaintiffs’ amended complaint.On 28 January 2022, the trial court held a hearing on Defendants’ motion to dismiss.

On 16 February 2022, the trial court entered an order denying Defendants’ motion to dismiss as to Plaintiffs’ first and third causes of action pursuant to the fruits of labor clause and law of the land clause of our Constitution.The trial court transferred the second cause of action, a constitutional challenge to the operative statute, to a three-judge panel of the superior court as it had done with Plaintiffs’ fifth cause of action.Finally, the trial court dismissed Plaintiff's fourth cause of action relating to equal protection and determined Plaintiffs’ request for permanent injunctive relief was moot due to the lifting of restrictions on businesses by the time the matter had been heard.

II.Jurisdiction

N.C. Gen. Stat. § 1-277 allows an appeal from a determination of a superior court affecting a party's substantial rights.N.C. Gen. Stat. § 1-277(2022).

According to well-established North Carolina law, governmental immunity is an immunity from suit rather than a mere defense to liability.For that reason, this Court has held that denial of dispositive motions such as motions to dismiss that are grounded on governmental immunity affect a substantial right and are immediately appealable.

( Doe v. Charlotte-Mecklenburg Bd. of Educ. , 222 N.C. App. 359, 363, 731 S.E.2d 245, 248(2012)(cleaned up).Specifically, the denial of a motion to "dismiss based on the defense of sovereign immunity pursuant to Rule 12(b)(6) ... affects a substantial right and is immediately appealable under"N.C. Gen. Stat. 1-277.Murray v. Univ. of N.C. at Chapel Hill , 246 N.C. App. 86, 92, 782 S.E.2d 531, 535(2016).A party actually must rely on sovereign immunity in its motion to dismiss, and it may do so in its written motion or orally at the hearing on the motion to dismiss.Id. , 246 N.C. App. at 93, 782 S.E.2d at 536("[S]ince neither defendant's written motion nor its oral argument at the hearing relied on Rule 12(b)(6) in connection with the sovereign immunity defense, the case law authorizing interlocutory appeals for a denial of a Rule 12(b)(6) motion based on sovereign immunity does not apply").

Here, Defendants did not mention sovereign immunity in their original motion to dismiss or in their motion to dismiss Plaintiffs’ amended complaint.However, Defendants’ counsel raised sovereign immunity in the hearing on the motion to dismiss:

[T]he plaintiffs’ amended complaint fails to state a claim and must be dismissed for a couple of reasons ....The second reason ... is that the plaintiffs are seeking damages in this case, and we would contend that the damages claims are barred by sovereign immunity.

Defendants’ counsel's reference here indicates Defendants’ motion to dismiss pursuant to Rule 12(b)(6) is based, at least partially, on a sovereign immunity defense.Accordingly, at a minimum, the trial court's denial of Defendants’ Rule 12(b)(6) motion based on sovereign immunity affected Defendants’ substantial rights, and therefore, their interlocutory appeal is properly before us.Murray , 246 N.C. App. at 92, 782 S.E.2d at 535.

We note that a "denial of a Rule 12(b)(1) motion based on sovereign immunity does not affect a substantial right [and] is therefore not immediately appealable under"N.C. Gen. Stat. § 1-277.Can Am S., LLC v. State , 234 N.C. App. 119, 122, 759 S.E.2d 304, 307(2014).Therefore, the trial court's denial of Defendants’ motion to dismiss pursuant to Rule 12(b)(1) is not properly before us as an interlocutory appeal.As for Defendants’ motion to dismiss pursuant to Rule 12(b)(2), "to the extent [D]efendant[s] relied on Rule 12(b)([2]) in moving to dismiss on sovereign immunity grounds," that component of their motion to dismiss would support an immediate appeal.Murray , 246 N.C. App. at 92–93, 782 S.E.2d at 536.

Accordingly, Defendants’ interlocutory appeal is proper pursuant to the trial court's denial of their Rule 12(b)(6) motion to dismiss.

III.Analysis

Defendants argue sovereign immunity bars Plaintiffs’ claims, and Plaintiffs fail to state colorable constitutional claims.We disagree.

A.Sovereign Immunity

We review "a trial court's decision to grant or deny a motion to dismiss based upon the doctrine of sovereign immunity using a de novo standard of review.Questions of law regarding the applicability of sovereign or governmental immunity are reviewed de novo."Lannan v. Bd. of Governors of Univ. of N. Carolina , 285 N.C. App. 574, 587, 879 S.E.2d 290, 301(2022)(cleaned up).

We begin with a review of sovereign immunity:

As a general rule, the doctrine of governmental, or sovereign immunity bars actions against, inter alia,the state, its counties, and its public officials sued in their official capacity.The doctrine applies when the entity is being sued for the performance of a governmental function.But it does not apply when the entity is performing a ministerial or proprietary function.

Herring ex rel. Marshall v. Winston-Salem/Forsyth Cnty. Bd. of Educ. , 137 N.C. App. 680, 683, 529 S.E.2d 458, 461(2000)(citations omitted).Sovereign immunity, at its core, immunizes the state when it is "exercising its judicial, discretionary, or legislative authority ... or is discharging a duty, imposed solely for the benefit of the public," from "liability for the negligence of its officers ... unless some statute" provides otherwise.Steelman v. City of New Bern , 279 N.C. 589, 593, 184 S.E.2d 239, 241–42(1971).

The doctrine of sovereign immunity is

firmly established in the law of our State today and has been recognized by the General Assembly as the public policy of the State.The doctrine of sovereign immunity has been modified, but never abolished.It has been said that the present day doctrine seems to rest on a respect for the positions of two coequal branches of government—the legislature and the judiciary.Thus, courts have deferred to the legislature the determination of those instances in which the sovereign waives its traditional immunity.

Corum v. Univ. of N. Carolina Through Bd. of Governors , 330 N.C. 761, 785, 413 S.E.2d 276, 291(1992).

Still, North Carolina courts have a sacred duty to safeguard the constitutional rights of her citizens."[I]t is the judiciary's responsibility to guard and protect those rights" enumerated in the Declaration of Rights.Id. at 785, 413 S.E.2d at 291."The...