230 N.C. App. 429
N.C. Ct. App.2013Background
- ACC filed suit in Guilford County seeking declaratory judgment that a withdrawal payment under the ACC Constitution is enforceable as liquidated damages; ACC's membership includes Maryland and other universities; Maryland and its Board govern the University System of Maryland; Council of Presidents controls ACC decisions; September 2011 amendment set withdrawal payment at 1.25x budget, later increased to 3x in September 2012; Maryland and its Board announced withdrawal on November 19, 2012; ACC alleges Maryland owes $52,266,342 if withdrawal occurs; trial court denied motion to dismiss for lack of personal jurisdiction and declined comity defense; interlocutory appeal filed and stay ordered by this Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the interlocutory order is appealable rights-respecting jurisdiction | Defendants claim substantial-right jurisdiction under § 1-277(a)/(7A-27(d)) | Order affects sovereign immunity; comity may authorize appeal | Courts have jurisdiction under § 1-277(a)/(7A-27(d)); comity-based appeal acknowledged |
| Whether comity can extend Maryland sovereign immunity to North Carolina court | Public policy denies comity to enforce Maryland immunity on contract-related relief | Sovereign immunity defense should apply via comity if appropriate | Comity not extended; public policy bars Maryland sovereign immunity in contract-based declaratory relief |
| Standard of review for comity decision | De novo review is proper for comity determinations | Defer to trial court discretion on comity | Review of comity decision conducted de novo |
| Impact of Smith public policy on declaratory relief under contract | Smith waives sovereign immunity in actions on contract, including declaratory relief | Smith does not extend to this declaratory action | Smith invokes waiver for contract-based actions; declaratory relief falls within waiver; comity denied |
Key Cases Cited
- Smith v. State, 289 N.C. 303 (1976) (public policy waives sovereign immunity in contract actions)
- Boudreau v. Baughman, 322 N.C. 331 (1988) (public policy exception encompasses more than just family/morals)
- Cox v. Roach, N.C. App. 723 S.E.2d 340 (2012) (courts may extend comity; discretion governs extension to sister states)
- Petroleum Traders Corp., 190 N.C. App. 542 (2008) (Declaratory Judgment Act does not waive sovereign immunity for all contexts)
- Data Gen. Corp. v. Cnty. of Durham, 143 N.C. App. 97 (2001) (denial of 12(b)(1) may be reversed on 12(b)(2) grounds for sovereign immunity)