Joe Whitcomb
In December of 2020, Howell and other business owners (Plaintiffs) brought a case against North Carolina state officials (Defendants) challenging the constitutionality of executive orders issued in response to COVID-19. The plaintiffs argue that these orders infringed upon their right to earn a living and their substantive due process rights. In response, the state moved to invoke sovereign immunity citing lack of jurisdiction and failure to state a claim upon relief can be granted.
The Court of Appeals of North Carolina was tasked with determining whether sovereign immunity barred Plaintiff's claims at the pleading stage and whether Plaintiffs alleged colorable constitutional claims. The court did not address the validity of the statutes being contested nor did it decide the merits of Plaintiffs' claims as those issues were not before them.
Background and Procedural History
In March 2020, Governor Roy Cooper of North Carolina declared a state of emergency and issued executive orders that closed bars and extended their closure multiple times. In December 2020, the plaintiffs filed a complaint alleging the orders made their businesses unprofitable and caused financial damages, asserting violations of their constitutional rights to earn a living, substantive due process, and equal protection.
In January 2021, the state moved to dismiss the complaint. In March, the trial court transferred the facial challenge of a statute to a three-judge panel. In May, the plaintiffs amended their complaint adding legislative leaders as defendants. In July, the state again moved to dismiss, and the legislative leaders answered the complaint. After a hearing in January 2022, the trial court denied dismissal for two claims but transferred the as-applied constitutional challenge to the three-judge panel. An equal protection claim was dismissed as moot due to the lifting of restrictions.
The plaintiffs' claims under the state constitution's fruits of labor clause and law of the land clause survived dismissal and remain active. The facial and as-applied constitutional challenges to the statute were transferred to a three-judge panel for further proceedings.
Jurisdiction and Validity
North Carolina law allows appeals from superior court rulings affecting substantial rights. In this context, governmental immunity serves as protection from being sued, rather than just shielding from liability. Dismissing motions citing governmental immunity impacts crucial rights and hence permits immediate appeals.
Although the defense initially didn't invoke sovereign immunity, they raised it orally during the dismissal hearing. This action aligns with established precedent allowing appeals when 12(b)(6) motions are turned down on sovereign immunity grounds.
While refusals of 12(b)(1) motions linked to sovereign immunity don't warrant appeals, denials of 12(b)(2) motions on the same basis do. Therefore, this appeal is valid due to the rejection of the Defendants' 12(b)(6) motion.
Regarding Sovereign Immunity
The defendants argued that sovereign immunity precludes the plaintiffs' claims and that the plaintiffs have not articulated viable constitutional claims. However, the appellate court judges disagreed.
Sovereign immunity typically shields the state from legal actions, except in cases involving ministerial or proprietary functions. It grants protection to the state when carrying out judicial, discretionary, or legislative duties, or fulfilling public obligations. This principle is based on deference to the legislative and judicial branches. Courts have traditionally entrusted the decision to waive immunity to the legislature, all while safeguarding constitutional rights.
In instances where constitutional rights clash with sovereign immunity, the former must take precedence. The judiciary is tasked with devising common law solutions for breaches, opting for the least intrusive resolution. This pertains to formulating remedies, not procedural requirements. Plaintiffs are not obliged to seek injunctions before claiming damages, as the constitution inherently provides avenues for redress. Failing to pursue injunctions does not preclude claims for damages.
Fruits of Labor and Law of the Land Clauses
For a constitutional claim to hold validity, the complaint needs to assert that a state actor has infringed upon constitutional rights, provide factual evidence to support the alleged violation, and demonstrate that there is no sufficient state remedy available other than pursuing a direct constitutional claim.
Plaintiffs have alleged that the Governor's orders infringed upon their constitutional right to earn a living, citing violations of the fruits of labor and law of the land clauses. The fruits of labor clause safeguards the right to engage in lawful business activities, going beyond just licensing regulations. By contending that the blanket ban on bars impeded their ability to earn a living, Plaintiffs have put forth a plausible argument.
Similarly, the law of the land clause, which protects fundamental rights such as the right to pursue one's livelihood, was invoked by the Plaintiffs to assert that the orders encroached upon their ability to operate their bars. Furthermore, they have convincingly argued the absence of an alternative state remedy, given the moot status of their injunction claim and their constitutional challenge to the statutes.
In light of these assertions, the trial court appropriately rejected the motion to dismiss the constitutional claims. Plaintiffs have effectively articulated their grievances under the fruits of labor and law of the land clauses. The legality of the Governor's directives under the statutes in question now awaits assessment by a three-judge panel.
Holdings and Conclusion
The court held that any alleged failure on the part of Plaintiffs to seek injunctive relief prior to damages did not bar their claims at the pleading stage under the theory of sovereign immunity.
Furthermore, the court held that Plaintiffs had stated colorable constitutional claims where they alleged a blanket prohibition against conducting their bar businesses violated both their right to earn a living and their substantive due process rights under N.C. Const. art. 1, §§ 1, 19 ("Law of the Land" clause). The court affirmed the trial court's denial of Defendants' Motion to Dismiss.