Kelly v. State, COA21-709

Docket NºCOA21-709
Citation2022 NCCOA 675
Case DateOctober 18, 2022
CourtCourt of Appeal of North Carolina (US)




and PHILIP E. BERGER in his official capacity as President Pro Tempore of the North Carolina Senate, and TIMOTHY K. MOORE in his official capacity as Speaker of North Carolina House of Representatives, Intervenor-Defendants, and JANET NUNN, CHRISTOPHER AND NICHOLE PEEDIN, and KATRINA POWERS, Intervenor-Defendants.

No. COA21-709

Court of Appeals of North Carolina

October 18, 2022

Heard in the Court of Appeals 8 June 2022.

Appeal by Defendants and Intervenor-Defendants from order entered 7 May 2021 by Judge G. Bryan Collins, Jr. in Wake County Superior Court No. 20 CVS 8346.

Patterson Harkavy LLP, by Burton Craige, Narendra K. Ghosh, Trisha S. Pande, and Paul E. Smith, for Plaintiff-Appellees.

Attorney General Joshua H. Stein, by Special Deputy Attorney General Tamika Henderson and Special Deputy Attorney General Laura H. McHenry, for the State.


Womble Bond Dickinson (US) LLP, by Matthew F. Tilley and Russ Ferguson; and Liberty Justice Center, by Jeffrey D. Jennings, for Legislative-Intervenor-Defendant-Appellants.

Nelson Mullins Riley & Scarborough, LLP, by John E. Branch, III and Andrew D. Brown; and Institute for Justice, by Ari Bargil, Michael Bindas, Joseph Gray, and Marie Miller, for Parent Intervenor-Defendant-Appellants.


¶ 1 The State and the North Carolina Education Assistance Authority ("Defendant SEAA") (collectively, the "Defendants"); Philip E. Berger, in his official capacity as President Pro Tempore of the North Carolina Senate, and Timothy K. Moore, in his official Capacity as Speaker of the North Carolina House of Representatives (collectively, the "Legislative-Intervenors"); and Janet Nunn, Christopher and Nichole Peedin, and Katrina Powers (collectively, the "Parent-Intervenors") appeal from an order denying the Defendants' and Legislative-Intervenors' motions to transfer this case to a three-judge panel pursuant to N.C. Gen. Stat. § 1-267.1 and N.C. Gen. Stat. § 1A-1, Rule 42(b)(4). On appeal, Legislative-Intervenors, Parent-Intervenors (collectively, the "Intervenor-Defendants"), and Defendants assert various arguments contending the constitutional claims within Plaintiffs' complaint constitute facial challenges. Defendants and Intervenor-Defendants all filed petitions for writ of certiorari to this Court. In our discretion, we grant their petitions


for writ of certiorari. After a careful review of the record and applicable law, we reverse the trial court's order and remand to the trial court to enter an order to transfer this case to a three-judge panel of the Superior Court of Wake County pursuant to N.C. Gen. Stat. § 1-267.1 and Rule 42(b)(4).

I. Factual and Procedural Background

¶ 2 In 2013, the North Carolina General Assembly enacted the Opportunity Scholarship Program (the "Program"). This program operated to provide funds to eligible North Carolina students to assist in paying tuition at any nonpublic school. N.C. Gen. Stat. § 115C-562.2(a) (2020). This program "allows a small number of students in lower-income families to receive scholarships from the State to attend private school." Hart v. State, 368 N.C. 122, 126, 774 S.E.2d 281, 284-85 (2015).

¶ 3 Under this program, Defendant SEAA makes applications available each year for "eligible students for the award of scholarship grants to attend any nonpublic school." § 115C-562.2(a) (2020). A "nonpublic school" is a "school that meets the requirements of Part 1 [private church schools and schools of religious charter] or Part 2 [qualified nonpublic schools] of this Article as identified" in Chapter 115C, Article 39 of our General Statutes. N.C. Gen. Stat. § 115C-562.1(5) (2020); see Hart 368 N.C. at 127, 774 S.E.2d at 285. An "eligible student" is one who secures admission to a nonpublic school and is a child 1) who was a full-time student attending a North Carolina public school or Department of Defense school in North Carolina the


previous semester, 2) who was a scholarship recipient from the previous year, 3) who is entering either Kindergarten or first grade, 4) who is in foster care, 5) whose adoption decree was not entered more than one year prior, or 6) who has a full-time active duty military parent or a parent who received honorable discharge less than 12 months prior. § 115C-562.1(3)(a)(1)-(7). The student must, furthermore, reside "in a household with an income level not in excess of one hundred fifty percent (150%) of the amount required for the student to qualify for the federal free or reduced-price lunch program"[1] or be "in foster care as defined in G.S. 131D-10.2." § 115C-562.1(3)(b).

¶ 4 Defendant SEAA awards the Program's scholarships to students. § 115C-562.2(a). Preference is given first to students who received a scholarship grant the year prior, then to students in lower-income families, and finally to any other eligible students. § 115C-562.2(a)(1)-(2). An eligible student may receive a scholarship award up to $4,200.00. After a student has satisfied the eligibility criteria and received a scholarship award, Defendant SEAA then transfers the funds directly to


the participating school on the student's behalf.

¶ 5 On July 27, 2020, Plaintiffs filed a complaint concerning the Program against Defendants. Their complaint raised three claims, alleging, inter alia, the program violates Article I, Sections 13 and 19 of the North Carolina Constitution by subjecting them to religious discrimination and interferes with their rights of conscience and Article I, Sections 13-15 and 19 and Article V, Sections 2(1) and 2(7) of the North Carolina Constitution. Within the first claim, Plaintiffs contend the Program violates their rights under Article I, Sections 13 and 19 in the following manner: The Program subjects them to religious discrimination and interferes with their rights of conscience by 1) funding educational opportunities that are conditioned on the Plaintiffs' and their family members' religious faiths and sexual orientations, 2) creating a program in which a student's choice of schools is limited by his or her religious faith, 3) funding schools that condition enrollment on the adoption of religious beliefs condemning homosexuality, 4) directing their taxpayer dollars to schools that discriminate against those who adhere to Plaintiffs' religious faiths, 5) dividing communities by religion, and 6) denying Plaintiffs the ability to live in a community without state-supported discrimination.

¶ 6 In Plaintiffs' second claim for relief, they contend the program as implemented violates Article I, Sections 13, 14, and 19 and Article V, Sections 2(1) and 2(7) of the North Carolina Constitution in that it funds schools which,

[1)] refuse admission to students whose beliefs do not conform with the school's official doctrine[;] . . . [2)] reserve the right to discipline or expel students whose spiritual beliefs diverge from the school's official doctrine[;] . . . [3)] require students and their family members to conform their lifestyle to the school's religious dictates, both in and out of school[;] . . . [4)] condemn homosexuality and bisexuality; forbid gay students and their family members from being open about their sexual orientation; threaten to expel gay, bisexual, or gender nonconforming students if they are open about their sexual orientation, gender identity, or transgender status; prohibit students from expressing support for LGBTQ rights; and require students to adopt religious beliefs that condemn LGBTQ rights[;] . . . [5)] require students and their families to regularly attend services at certain religious institutions, and admit only students whose families are willing to regularly attend services at certain religious institutions. . . . [and 6)] mandat[e] religious services, activities, and instruction [as] a central and integral part of the school's curriculum.

¶ 7 Lastly, Plaintiffs' final claim contends the program violates Article 1, Section 15 and Article V, Sections 2(1) and 2(7) of the North Carolina Constitution because "[t]he transfer of taxpayer funds to private schools without any accountability or requirements ensuring that students will actually receive an education is not for the purpose of education or for any other public purpose." Plaintiffs further bolster their third claim by arguing Defendant SEAA has "abdicated its statutory obligations regarding oversight of the Program." Plaintiffs, in their prayer for relief, requested the trial court to declare the Program to be unconstitutional as implemented; enter a permanent injunction enjoining selection of voucher recipients, disbursement of


funds, and appropriations to the reserve fund; award them costs; and award any other legal and equitable relief as the trial court deemed necessary.

¶ 8 Thereafter, the Parent-Intervenors filed a motion to intervene on August 19, 2020. The trial court denied their motion on October 14, 2020. In response, the Parent-Intervenors first filed a notice of appeal, then filed a motion for clarification or, in the alternative, a motion to stay and ultimately filed a joint motion with the Plaintiffs requesting the trial court reconsider the October 14, 2020 order. The latter motion came before the trial court for a hearing the following month, and the trial court subsequently entered an order permitting the Parent-Intervenors to intervene in this case under Rule 24(b). Additionally, the Legislative-Intervenors intervened in this case.

¶ 9 On October 20, 2020, Defendants filed a motion to transfer the case to a three- judge panel. Defendants argued Plaintiffs' complaint "clearly asserts a facial constitutional challenge" and thus "must...

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