N.C. State Bd. of Educ. v. State
| Decision Date | 19 September 2017 |
| Docket Number | No. COA15-1229,COA15-1229 |
| Citation | 255 N.C.App. 514,805 S.E.2d 518 |
| Parties | NORTH CAROLINA STATE BOARD OF EDUCATION, Plaintiff, v. The STATE of North Carolina and The North Carolina Rules Review Commission, Defendants. |
| Court | North Carolina Court of Appeals |
Campbell Shatley, PLLC, Asheville, by Robert F. Orr, and Poyner Spruill LLP, Raleigh, by Andrew H. Erteschik, for Plaintiff-Appellee.
Troutman Sanders LLP, Raleigh, by Christopher G. Browning, Jr., for Defendant-Appellant North Carolina Rules Review Commission.
Attorney General Joshua H. Stein, by Special Deputy Attorney General Amar Majmundar, and Special Deputy Attorney General
Olga Vysotskaya de Brito, for Defendant-Appellant The State of North Carolina.
This appeal presents a question of first impression: Does the North Carolina Rules Review Commission, an agency created by the General Assembly, have the authority to review and approve rules made by the North Carolina State Board of Education, whose authority is derived from the North Carolina Constitution? For the reasons explained in this opinion, we conclude the answer is yes.
The North Carolina Rules Review Commission (the "Commission") and the State of North Carolina (collectively, "Defendants") appeal from a trial court's order granting summary judgment in favor of the North Carolina State Board of Education (the "Board") and denying Defendants’ motion to dismiss. Defendants argue the trial court erred because the state constitution provides that the Board's power is "subject to laws enacted by the General Assembly," and the General Assembly created the Commission and delegated its review power to the Commission by enacting laws. The Board, however, contends that review by the Commission encroaches on its constitutional authority and that the General Assembly's delegation to the Commission of authority to review and "veto" Board rules violates the separation of powers provision in the North Carolina Constitution.
We hold that rules made by the Board are subject to statutes enacted by the General Assembly requiring review and approval by the Commission. We also hold that the General Assembly has not violated the separation of powers requirement by enacting an administrative procedure for state agencies and delegating to the Commission the power to review and approve—or disapprove—rules made by the Board. Accordingly, we reverse the trial court's order and remand to the trial court for entry of judgment in favor of Defendants.
On 7 November 2014, the Board commenced this action against Defendants based upon the North Carolina Constitution. The Board's complaint sought a declaratory judgment preventing the Commission from exercising any authority over the Board and, specifically, controlling the Board's enactment of rules. The complaint alleged two as-applied challenges to the Commission's interpretation and application of N.C. Gen. Stat. § 150B-2(1a), the Administrative Procedure Act ("the APA"), one joint as-applied and facial challenge,1 and four facial challenges to the Commission's enabling legislation.2
The complaint did not identify any specific Board rule that had been thwarted by the Commission. The complaint alleged, however, the following:
The complaint asserted that the Board would no longer voluntarily submit its rules to the Commission for approval and would nevertheless deem its rules to have the immediate full force and effect of law. The complaint acknowledged that the Board's position is in direct conflict with the Commission's interpretation and application of the APA and the Commission's enabling legislation.
On 12 January 2015, Defendants moved to dismiss the Board's complaint. The Board voluntarily dismissed without prejudice five of its seven claims, leaving only two as-applied challenges. The Board moved for affirmative summary judgment and the case was assigned to a single superior court judge. In a brief supporting their motion to dismiss and opposing the Board's motion for summary judgment, Defendants also argued that they were entitled to summary judgment in their favor.
On 29 June 2015, the trial court heard Defendants’ motion to dismiss the Board's remaining two claims and the Board's motion for summary judgment on those claims. The first of these claims specifically asserts that the Commission's interpretation and application of N.C. Gen. Stat. § 150B-2(1a) to the Board violates Article IX, Section 5 of the North Carolina Constitution, the constitutional provision that grants the Board rulemaking authority. The second claim asserts that the Commission's interpretation and application of N.C. Gen. Stat. § 150B-2(1a) to the Board also violates Article I, Section 6, which requires the separation of powers, and Article II, Section 1, under which the General Assembly "may delegate a limited portion of its legislative power...." N.C. Tpk. Auth. v. Pine Island, Inc. , 265 N.C. 109, 114, 143 S.E.2d 319, 323 (1965).
On 2 July 2015, the trial court entered an order allowing the Board's motion for summary judgment,3 concluding:
Upon consideration of the plain language of the North Carolina Constitution, and the verified complaint, there is no genuine issue of material fact and Plaintiff is entitled to judgment as a matter of law pursuant to Rule 56 of the North Carolina Rules of Civil Procedure.
Defendants timely appealed to this Court.
The Board moved to dismiss Defendants’ appeal pursuant to N.C. Gen. Stat. § 7A-27(a1), which provides that "[a]ppeal lies of right directly to the Supreme Court from any order or judgment of a court, either final or interlocutory, that holds that an act of the General Assembly is facially invalid on the basis that the act violates the North Carolina Constitution or federal law." N.C. Gen. Stat. § 7A-27(a1) (2015). On 2 March 2016, this Court granted the Board's motion.
On 13 July 2016, the North Carolina Supreme Court entered a special order holding that the trial court's order did not facially invalidate an act of the General Assembly and remanded the appeal to this Court "for consideration of [D]efendants’ challenges to the validity of the trial court's order on the merits."
We therefore address the trial court's ruling and the parties’ arguments on the Board's two remaining claims.
To better guide our determination of the issues raised on appeal, we consider the historical background surrounding the Board, its creation and evolution, the General Assembly's adoption of the APA and creation of the Commission, and the relation of the Board to the Commission.
Public education in North Carolina predates the Board. Our state's first constitution (the "1776 Constitution") provided that "a school or schools shall be established by the Legislature, for the convenient instruction of youth, with such salaries to the masters, paid by the public...." N.C. Const. of 1776, art. XLI.
In 1825, the General Assembly enacted a statute to "create a fund for the establishment of Common Schools." Act of Nov. 21, 1825, ch.1, 1825 N.C. Sess. Laws 3-4. The statute established "a body corporate and politic, under the name of the President and Directors of the Literary Fund[,]" to administer and invest money controlled by the Fund. Act of Nov. 21, 1825, ch.1, 1825 N.C. Sess. Laws 3-4. The statute named the Governor as President of the Literary Fund's board—the first governing body for public education in North Carolina. Act of Nov. 21, 1825, ch.1, 1825 N.C. Sess. Laws 3-4.
The General Assembly allocated to the Literary Fund money from various revenue sources as well as all unoccupied swamp land in North Carolina, and vested the Literary Fund's board with the power to sell, invest, and otherwise exploit assets in the fund to generate revenue for public education and to build schools across the state. Act of Nov. 21, 1825, ch.1, 1825 N.C. Sess. Laws 3-4; Act of Feb. 10, 1855, ch. 27, 1854-55 N.C. Sess. Laws 50-62; see also Bd. of Educ. Of Duplin Cnty. v. State Bd. of Educ. , 114 N.C. 313, 317-19, 19 S.E. 277, 277-78 (1894).4 The Literary Fund was all but depleted as a result of the Civil War. See Jonathan Worth, Report of the President & Directors of the Literary Fund of North Carolina , Exec. Doc. 18, General Assembly Session 1866-67 (1867).5
Following the Civil War, North Carolina adopted a new state constitution (the "1868 Constitution") which for the first time provided in its Declaration of Rights "a right to the privilege of education." N.C. Const. of 1868, art. I, § 27.6 Unlike other declarations of rights, this provision did not restrict state government, but rather committed it to an affirmative duty. Orth, supra , at 52.
The 1868 Constitution also devoted a separate Article to education, beginning with the premise that "[r]eligion, morality and knowledge being necessary to good government and happiness of mankind, schools and the means of education shall forever be encouraged[,]" and providing for tuition "free of charge to all children of the State between the ages of six and twenty-one...
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N.C. State Bd. of Educ. v. State
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