Tuesday, October 16, 2007, 9:42 PM

COA Rejects Lawsuit Challenging Economic Development Incentives

Today, in Blinson v. State, the Court of Appeals (COA) rejected a lawsuit challenging the constitutionality of economic development incentives. The suit trained on incentives used by the State, Forsyth County, and Winston-Salem to lure Dell to open a new manufacturing facility in N.C. But the theory of the case was so expansive, so sweeping, it would have called into question the legality of nearly every economic incentive issued by the State and local governments, as well as an indeterminate number of tax exemptions and credits.

Today's unanimous opinion was written by Judge Geer.

My colleagues and I represented Dell in this case, and frankly, there was no other legitimate outcome than dismissal of this case. The constitutional challenges were largely foreclosed by precedent. And the plaintiffs had no workable standard by which courts could, in as-applied challenges, sift through economic incentives to determine which ones should be deemed unconstitutional and which ones should pass muster.

More fundamentally, this is a quintessential political controversy. It's a public policy and economic dispute about the wisdom of using public resources to create jobs and stimulate the economy. We have a proud tradition of separation of powers in this State, one expressly reserved in the State's Constitution. Our Supreme Court, faithful to principle of judicial restraint, has long emphasized that the legislature is the policy-making agent of the People and that the Court will not intervene in policy disputes even if it believes the legislature has made a bad bargain or otherwise acted contrary to the best interests of the State and its citizens. Today's decision is faithful to that tradition of judicial restraint. As Judge Geer's opinion reaffirms today, it's "the role of the General Assembly and the Executive Branch -- and not the courts -- to determine whether such incentives are sound public policy."

There is an ongoing and lively public debate on the scope and propriety of economic incentives. The General Assembly has held hearings, the newspapers are editorializing, gubernatorial candidates are staking out positions on the issue, and Gov. Easley even vetoed certain incentive legislation this summer, which drew great public attention and intensified the political debate. This as it should be in a democracy. Public debate belongs in the political arena, not in the judicial branch.


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