910 S.E.2d 269
N.C. Ct. App.2024Background
- Plaintiffs are food truck operators and a property owner in Jacksonville, NC, challenging provisions of the City’s Unified Development Ordinance (UDO) that restrict food truck operation locations, signage, and require fees/permits.
- The challenged UDO regulations allegedly prevent food truck businesses from operating in 96% of Jacksonville and make it effectively impossible for some businesses to operate or host food trucks.
- Plaintiffs sued the City and officials, alleging violations of state constitutional protections (freedom of speech, equal protection, fruits of their own labor, and law of the land) and argued the annual permit fee was ultra vires and unreasonable.
- The trial court granted the City’s Rule 12(b)(6) motion to dismiss, finding rational bases could support the UDO provisions, and dismissed all claims.
- Plaintiffs appealed, asserting both procedural errors (wrong legal standard applied) and that factual allegations were sufficient to state claims.
- The Court of Appeals reversed and remanded, agreeing with Plaintiffs that the trial court applied the wrong standards and that the complaint alleged sufficient facts to survive dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Freedom of Speech | UDO imposes impermissible speech (signage) restrictions; higher scrutiny applies | Applied rational basis, upheld restrictions | Trial court used wrong test; remanded for proper scrutiny |
| Equal Protection | UDO draws arbitrary, irrational distinctions disadvantaging food trucks | Food trucks not similarly situated to restaurants | Pleadings sufficiently allege similar situation; survives dismissal |
| Fruits of Their Own Labor / Law of Land | UDO impedes right to earn a living with arbitrary regulations | Argued regulations were valid exercise of police power | Sufficiently pled improper government purpose; survives dismissal |
| Ultra Vires (Permit Fee) | Fees not based on actual regulatory costs; unreasonable under NC law | Fees were reasonable under city power | Factual pleadings require further review; survives Rule 12(b)(6) motion |
Key Cases Cited
- Grace Baptist Church of Oxford v. City of Oxford, 320 N.C. 439 (municipalities have broad, but not unlimited, power to regulate for health, safety, and welfare)
- Poor Richard’s, Inc. v. Stone, 322 N.C. 61 (invalidates regulations that treat similarly situated businesses differently without rational basis)
- Homebuilders Ass’n of Charlotte, Inc. v. City of Charlotte, 336 N.C. 37 (municipal fees must be reasonable and not exceed cost of regulation)
- Corum v. Univ. of N.C. Through Bd. of Governors, 330 N.C. 761 (state constitutional claims available where no adequate remedy at law)
- State v. Ballance, 229 N.C. 764 (state may not arbitrarily impede legitimate vocations)
- Treants Enter., Inc. v. Onslow County, 320 N.C. 776 (ordinances must be rationally related to substantial government purpose)