Today's NC Supreme Court Decisions

Today the NC Supreme Court issued opinions. This batch doesn't include anything of note for this blog's purposes--i.e., decisions impacting businesses. The Court also issued orders on petitions. It appears the only PDR granted is in a case involving a prenuptial agreement.

COA: Eminent Domain Taking Is Still For a Public Purpose When A Private Entity Also Derives A Benefit From The Taking

Today the COA held that a taking of property under eminent domain powers that serves a primary public purpose may also benefit a private entity. The case is Catawba County v. Wyant.

Catawba County condemned property owned by the Wyatts and the Johnsons to build a sewer line connecting the county landfill to the city of Newton's sewer lines. The new sewer line was necessary for the County to comply with solid waste disposal regulations. These regulations required that the disposal system for rainwater that comes into contact with solid waste must be connected to the sewer line.

The County had also previously allowed a lumber plant to purchase land near the landfill and operate its business there. The lumber company would also utilize the new sewer line.

The COA held that the removal of solid waste was a matter of public concern and the sewer line was for a public purpose, and the property could thus be taken by the County under its eminent domain power. The Court noted that in determining whether a municipality's action is for a public use or benefit, it examines whether the action “involves a reasonable connection with the convenience and necessity of the particular municipality[,]” and whether “the activity benefits the public generally, as opposed to special interests or persons.”

The Wyants and Johnsons argued that the sewer line would only benefit the lumber company, and that they were not given proper notice that the sewer line would benefit the landfill in the 30-day notice of condemnation the County was required to give them. The COA held that the purpose of connecting the landfill to the public sewer system to conform with regulations was the primary and "paramount" purpose, and that purpose was not defeated by the fact that the lumber company would also be using or benefiting from the sewer line. The COA also held that the County only had to give the Wyants and the Johnsons notice that the purpose of the condemnation was for a sewer line, and did not have to inform them of "all the planned or potential users of the sewer line."

Today's COA Decisions

Today the NC Court of Appeals released 21 published decisions. Five are criminal cases. More on these decisions later.

COA: Employment Contract Existed Between Temporary State Employees and State

Yesterday the COA held that an employment contract existed between temporary state employees and a state regulatory body. The case is Sanders v. State Personnel Commission.

Plaintiffs worked for the State as temporary employees through a temp agency for periods of time ranging from about a year to more than 6 years. They claimed they were wrongfully denied employment benefits under state regulations promulgated by the State Personnel Commission ("SPC"). The SPC is given lawmaking power by the NC legislature to establish regulations governing job classification and compensation. SPC regulations provide that temporary employment may not exceed 12 months and that any employee who stays in a "time-limited" position for more than three years must be considered a permanent employee.

The COA held that the SPC's rules must be read into any contract between plaintiffs and the temporary agency, and that the SPC rules have "the effect of law and are incorporated into the employment contract." Thus, the COA reasoned, the SPC entered into a valid employment contract with plaintiffs.

Defendants acknowledged that the SPC rules governed temporary employees and that plaintiffs were hired for temporary appointments which exceeded twelve months. Therefore, the COA held, there was a breach of the rules under which the contract was formed. However, Plaintiffs did not point to any regulation that specifically entitled them to the benefits of permanent employees. The COA remanded the case for a determination of plaintiffs' rights under the SPC rules as well as a determination of the terms of the employment contract.

Virginia Senators Recommend Judge For Fourth Circuit

Virginia Senators Webb and Warner are recommending that the president nominate Barbara Keenan to the Fourth Circuit. She's long been a justice on the Virginia Supreme Court.

COA Reverses Business Court's Denial Of Class Certification In TCPA Case

Today the Court of Appeals (COA) reversed the Business Court's denial of class certification in a Telephone Consumer Protection Act (TCPA) case alleging that the defendant sent unsolicited fax advertisements to proposed class members. The case is Blitz v. Agean, Inc.

Generally, the TCPA (47 U.S.C. § 227) makes it unlawful to send unsolicited advertisements to a fax machine. "Unsolicited advertisement" means an advertisement "transmitted to any person without that person's prior express invitation or permission." (The TCPA allows statutory damages; in this case, the plaintiffs are seeking statutory damages of $500 for each unsolicited fax advertisement sent by the defendant to any member of the proposed class.) In light of the intalicized phrase, TCPA defendants oppose class certification by arguing that individualized issues will predominate over common issues--individualized issues concerning whether faxes were unsolicited or without the recipient's consent. Courts around the country have split on this predominance issue

In today's case, the COA rejected a bright-line approach to class certification under the TCPA: "We hold that claims brought pursuant to the TCPA are not per se inappropriate for class actions." Instead the COA adopted a fact-based approach to determining whether certification is proper, an approach under which "plaintiffs must advance a viable theory employing generalized proof to establish liability with respect to the class involved." As an example, the COA suggested that generalized proof could exist in a case alleging that the defendant had obtained all of the fax recipients' fax numbers from a single purveyor (i.e., buying a list). In such a case, the COA suggested, the manner in which the defendant identified the recipients may not require individualized inquiry, and the the question of consent may be a common question.

The COA said that the fact that some class members eventually may be found to have consented to the receipt of the defendant's fax transmissions doesn't preclude certification of a class of those who received unsolicited faxes: "The possibility that some proposed class members will later be removed should not automatically defeat class certification. Plaintiff should present the trial court with some reasonable means of ensuring there will not be an inordinate number of proposed class members who do not belong in the class, and further show that he has, through thorough discovery and investigation, presented the trial court with as tailored a proposed class as practicable."

The COA held that the record didn't establish whether the plaintiff proceeded at the class certification stage with a theory of generalized proof that the faxes were without invitation or permission. Because the trial court applied a per se rule against certification of TCPA claims, the COA reversed and remanded for reconsideration of the plaintiff's motion for class certification.

Separately, on the issue of "superiority" (under N.C. law, when the elements of class certification are met, the trial court retains the discretion to determine if a class action is superior to other available methods for the adjudication of the controversy), the COA rejected the trial court's conclusion that small claims court is a superior forum in which to deal with TCPA violations, because small claims court doesn't have authority to grant injunctions, and injunctive relief is an important TCPA remedy. Another knock against small claims court, the COA said, is that, depending on the number of allegedly unsolicited fax advertisements sent to any one person, the amount in controversy could easily exceed the $5,000 small claims court jurisdictional limit. Thus, the COA held that small claims court cannot represent a superior forum to a class action in all instances involving TCPA claims.

Today's decision could be significant in cases in which consent is a defense (or lack of consent is an element) of a claim. Also significant is the "superiority" holding: to suggest that the unavailability of injunctive relief in small claims court is a problem is to suggest that the class action mechanism is superior in cases seeking injunctive relief. Many claims with low damages also seek injunctive relief.

COA: School Board's Drug/Alcohol Testing Policy Is Unconstitutional

Today the Court of Appeals (COA) held that a school board's policy mandating random drug and alcohol testing of all school board employees is unconstitutional because it violates the North Carolina Constitution's guarantee against unreasonable searches and seizures. The trial court had ruled for the school board. The case is Jones v. Graham County Board of Education.

The COA found the record lacking in evidence to establish a need for the testing (e.g., past incidents). And the COA rejected the notion that school board employees have a reduced expectation of privacy by virtue of their employment in a public school system. The Court distinguished the situation where public employment poses safety concerns justifying regulation of employees (the Court referred, by way of illustration, to a chemical weapons plant).

Judge Stephens wrote the opinion, which began by quoting a Justice Scalia dissent in turn quoting Justice Brandeis: "The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.”

Today's Court of Appeals Decisions

Today the NC Court of Appeals released 15 published decisions. Half the cases (eight) are criminal or domestic cases. More on today's cases later.