Wideni77 v. N.C. Dep't of Transp., & I-77 Mobility Partners LLC
253 N.C. App. 390
| N.C. Ct. App. | 2017Background
- In June 2014 NCDOT entered a Comprehensive Agreement with I-77 Mobility Partners LLC (Mobility) to design, finance, build, operate, and maintain managed HOT lanes on I-77 under North Carolina’s public‑private partnership statute (the P3 Statute).
- The Agreement granted Mobility the exclusive right to set, collect, and enforce tolls for the HOT lanes subject to statutory procedures and limits; the State retained ownership of the infrastructure and the Agreement term was limited (max 50 years).
- WidenI77 sued in January 2015 seeking declaratory and injunctive relief, challenging the P3 Statute and the Comprehensive Agreement on multiple constitutional and statutory grounds (illegal delegation, public purpose, Turnpike Statute violations, improper delegation of taxing power, due process, etc.).
- The trial court denied a preliminary injunction, later granted summary judgment to defendants (NCDOT, Mobility, and the State) in February 2016, and dismissed plaintiff’s claims with prejudice. Plaintiff appealed.
- The Court of Appeals affirmed, holding (inter alia) that the P3 Statute’s delegation contained adequate standards and safeguards, the Project served a public purpose, the Agreement complied with the Turnpike provisions applicable to it, and tolls are not taxes for constitutional purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the P3 Statute unlawfully delegat(es) legislative power to NCDOT/Mobility | Legislature abdicated lawmaking by granting unfettered authority to set tolls and other powers | Statute contains legislative goals, specific standards and procedural safeguards making delegation constitutional | Delegation constitutional: statute supplies adequate guiding standards and procedural safeguards |
| Whether the Project expenditure is a public purpose under NC Const. art. V, §2(1) | Financing/operation by private party means public funds indirectly benefit private interests; likened to Foster | Legislature authorized transportation financing as public purpose; Project primarily benefits public congestion relief | Expenditure serves a public purpose; Project primarily benefits the public and is distinguishable from Foster |
| Whether the Comprehensive Agreement violates provisions of the Turnpike statute (e.g., lane reduction; required review) | Mobility’s design reduces non‑toll general purpose lanes and circumvents statutorily required reviews | Agreement expressly maintains existing non‑toll lanes and follows P3-specific review/hearing procedures required by statute | Agreement does not violate Turnpike statute; it preserves non‑toll lanes and follows the P3 Statute’s procedural scheme |
| Whether tolls constitute an unconstitutional delegation of taxing power or a tax requiring legislative action/due process | Allowing Mobility to impose/collect tolls is an improper delegation of taxing authority and violates constitutional limits and due process | Tolls are not taxes; constitutional limits on taxing authority do not apply to tolls | Tolls are not taxes; no unconstitutional delegation of taxing power and due process challenge fails |
Key Cases Cited
- McIntyre v. Clarkson, 254 N.C. 510 (court must resolve reasonable doubts in favor of legislative validity)
- Adams v. North Carolina Dep’t of Natural & Economic Resources, 295 N.C. 683 (nondelegation doctrine and adequate‑guiding‑standards test)
- North Carolina Turnpike Authority v. Pine Island, Inc., 265 N.C. 109 (tolls are not taxes; market forces limit unreasonable tolls)
- Foster v. North Carolina Medical Care Commission, 283 N.C. 110 (financing private hospital facilities with public funds held not a public purpose)
- Madison Cablevision, Inc. v. City of Morganton, 325 N.C. 634 (legislature’s determination of public purpose entitled to great weight)
- Bring v. North Carolina State Bar, 348 N.C. 655 (legislative directives need only be as specific as circumstances require)