919 S.E.2d 684
N.C.2025Background
- Bar owners and employees across North Carolina challenged Governor Cooper's executive orders that closed bars for over 400 days during the COVID-19 pandemic, while allowing similar businesses (like restaurants and brewery taprooms) to reopen sooner under restrictions.
- Plaintiffs claimed these orders violated the North Carolina Constitution’s Fruits of Labor and Equal Protection Clauses, and raised statutory claims under the Emergency Management Act and Public Records Act.
- The trial court granted the Governor’s motion to dismiss and denied the plaintiffs' motion for partial summary judgment.
- The Court of Appeals reversed in part, vacating the summary judgment and holding rational basis did not support the disparate treatment, but applied rational basis review to the Fruits of Labor claim (later found to be an error due to new precedent).
- On discretionary review, the Supreme Court clarified and applied a factual, two-pronged test for Fruits of Labor claims, clarified the applicable standards for Equal Protection and statutory claims, and remanded the case for further factual development.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fruits of Labor Clause violation | Orders arbitrarily denied bars the right to work without public health justification. | Orders served proper public health purpose, based on science and data; reasonable government action. | Plaintiffs stated a colorable claim; proper standard (from Ace Speedway) requires fact-intensive inquiry. Remanded. |
| Equal Protection Clause violation | Bars similarly situated to restaurants and other alcohol-serving venues, yet treated differently. | Economic regulations get rational basis review; public health data justified difference. | Court of Appeals erred with strict scrutiny; rational basis applies. State action had a conceivable basis. |
| Emergency Management Act compensation | Bar closures amounted to a "taking" deserving compensation under the Act. | Closures were restrictions, not commandeering/seizure/appropriation as defined by statute. | No compensation due; mere restrictions aren't a statutory "taking." Affirmed trial court. |
| Public Records Act (jurisdiction/fees) | Court had jurisdiction; attorney’s fees sought after Governor disclosed records post-filing. | Plaintiffs failed to complete mandatory mediation, depriving court of jurisdiction. | Failure to complete mediation deprived court of jurisdiction; no fees. Affirmed. |
Key Cases Cited
- State v. Ballance, 229 N.C. 764 (N.C. 1949) (established Fruits of Labor test and limits on government interference with employment)
- King v. Town of Chapel Hill, 367 N.C. 400 (N.C. 2014) (emphasized the Fruits of Labor Clause protects against arbitrary governmental action)
- Corum v. Univ. of N.C., 330 N.C. 761 (N.C. 1992) (established constitutional claims directly against state where no adequate alternative remedy)
- Treants Enters., Inc. v. Onslow County, 320 N.C. 776 (N.C. 1987) (affirmed right to conduct lawful business as fundamental under NC Constitution)
- Duggins v. N.C. State Bd. of Certified Pub. Acct. Examiners, 294 N.C. 120 (N.C. 1978) (applied rational basis review to economic regulations under Equal Protection)