*1 IN THE SUPREME COURT OF NORTH CAROLINA
No. 339A18-2
Filed 11 February 2022 THE NEW HANOVER COUNTY BOARD OF EDUCATION
v. JOSHUA H. STEIN, in his official capacity as Attorney General of the State of North Carolina, and NORTH CAROLINA COASTAL FEDERATION, INC., and SOUND RIVERS, INC.
Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of
the Court of Appeals,
Stam Law Firm, PLLC, by Paul Stam and R. Daniel Gibson, for plaintiff- appellee.
Joshua H. Stein, Attorney General, by James W. Doggett, Deputy Solicitor General, and Marc Bernstein, Special Deputy Attorney General, for defendant- appellant.
The Southern Environmental Law Center, by Mary Maclean Asbill, Brooks Rainey Pearson, and Blakeley E. Hildebrand, for intervenor-appellants. Ward and Smith, P.A., by Christopher S. Edwards and Marcus Gadson, for amicus curiae Marcus Gadson.
ERVIN, Justice. This case arises from the Board of Education’s challenge to the Attorney General’s administration of an environmental enhancement grant program funded by payments made by Smithfield Foods, Inc., and several of its subsidiaries pursuant to a 2000 agreement between the Smithfield companies and the Attorney General. After the Board of Education filed an amended complaint alleging that the payments received from the Smithfield companies in accordance with the agreement amounted to civil penalties that should have been made available to the public schools pursuant to article IX, section, 7 of the North Carolina Constitution, the trial court granted summary judgment in favor of the Attorney General. On appeal, the Court of Appeals reversed, finding that the record disclosed the existence of genuine issues of material fact that precluded the entry of summary judgment in the Attorney General’s favor . This Court reversed the Court of Appeals’ decision on the grounds that the record did not disclose the existence of any genuine issues of material fact and that the Attorney General was entitled to judgment as a matter of law given that the undisputed evidence demonstrated that the funds provided by the Smithfield companies did not constitute civil penalties for purposes of article IX, section 7, of the North Carolina Constitution and remanded this case to the Court of Appeals for further proceedings S not inconsistent with its opinion. On remand, the Court of Appeals allowed the Board of Education ’ s motion for supplemental briefing and filed an opinion holding that the funds made available by the agreement were subject to a newly enacted statute requiring all funds received by the State to be deposited in the State treasury and that the Board of Education’s amended complaint sufficed to state a claim against the Attorney General pursuant to this statute. As a result, the determinative issue before this Court at this point is whether the Board of Education’s amended complaint suffices to support a claim pursuant to N.C.G.S. § 147-76.1. After careful consideration of the record in light of the applicable law, we reverse the decision of the Court of Appeals and remand this case to the Court of Appeals for further remand to the Superior Court, Wake County, with instructions to reinstate its earlier order granting summary judgment in favor of the Attorney General.
I. Factual Background
A. Substantive Facts After a five-year period during which hog waste lagoons in eastern North
Carolina ruptured or overflowed and spilled millions of gallons of waste into the tate’s waterways, then -Attorney General Michael F. Easley entered into an agreement with Smithfield Foods, Inc., the state’s largest hog -farming operation, and several of its subsidiaries [1] on 25 July 2000, pursuant to which the Smithfield companies agreed to
(1) undertake immediate measures for enhanced environmental protection on Company-owned Farms and provide assistance to Contract Farmers in undertaking these same measures;
(2) commit $15 million for the development of Environmentally Superior Technologies for the management of swine waste and to facilitate the development, testing, and evaluation of potential technologies on Company-owned Farms; (3) install Environmentally Superior Technologies on each Company-owned Farm in North Carolina and provide financial and technical assistance to Contract Farmers for the installation of these technologies
(4) commit $50 million to environmental enhancement activities;
(5) cooperate fully with the Attorney General to ensure compliance with applicable laws, regulations, policies and standards; and
(6) in cooperation with the Attorney General and all other interested parties, take a leadership role in enhancing the effectiveness of the Albemarle- Pamlico National Estuary Program . . . .
In order to provide $50 million for use in funding environmental enhancement activities in accordance with the agreement, the Smithfield companies agreed “to pay each year for 25 years an amount equal to one dollar for each hog in which the Companies . . . have had any financial interest in North Carolina during the previous year, provided, however, that such amount shall not exceed $2 million in any year, ” with these funds to “be paid to such organizations or trusts as the Attorney General will designate” as long as they were used “to enhance the environment of the State, including eastern North Carolina, to obtain environmental easements, construct or maintain wetlands and such other environmental purposes, as the Attorney General deems appropriate.” In carrying out his obligations under the agreement, the Attorney General was authorized to consult with representatives from the Smithfield companies, the North Carolina Department of Environmental Quality, [2] and “any other groups or individuals he deems appropriate and may appoint any advisory committees he deems appropriate.” On 18 October 2002, the Smithfield companies, with the consent of then-
Attorney General Roy A. Cooper, entered an escrow agreement with RBC Centura Bank [3] pursuant to which the Smithfield companies agreed to deposit all funds provided in accordance with the agreement into a bank account in which those funds would be held for disbursement directly to recipients by the Attorney General. In accordance with the terms of the agreement, the Smithfield companies made an annual deposit into the relevant account around the anniversary of the date upon which they entered into their agreement with the Attorney General. In January 2003, then-Attorney General Cooper established the
Environmental Enhancement Grants Program for the purpose of “improv[ing] the air, water and land quality of North Carolina by funding environmental projects that address the goals of the agreement between Smithfield and the Attorney General.” On an annual basis, the program solicits applications from governmental agencies and nonprofit entities, which are then reviewed by a panel consisting of representatives of the North Carolina Department of Justice, the North Carolina Department of Environmental Quality, the North Carolina Department of Natural and Cultural Resources, various academic institutions, and certain nonprofit organizations involved in conservation efforts. After the panel makes recommendations to the Attorney General concerning the manner in which the available grant funds should be disbursed, representatives of the Smithfield companies have the opportunity to make recommendations to the Attorney General as well. At the conclusion of this process, the Attorney General selects the recipients of the grants to be awarded in the exercise of his discretion and may designate up to $500,000 for use by the individual grant recipients. During the period from 2000 to 2016, the Attorney General awarded more than $25 million pursuant to the agreement for the purpose of funding more than 100 separate initiatives that addressed a variety of environmental problems, with the work to be performed using these grant payments having included rehabilitating abandoned waste lagoons, conserving wildlife habitats, improving water quality, reducing pollution from agricultural and stormwater runoff, funding environmental research, and restoring forests, shorelines, wetlands, and streams across North Carolina.
B. Procedural History
1. The First Appeal On 18 October 2016, Francis X. De Luca filed a complaint in the Superior Court, Wake County, in which he alleged that the payments made by the Smithfield companies pursuant to the agreement constituted penalties for purposes of article IX, section 7, of the North Carolina Constitution, which requires that the “proceeds of all penalties and forfeitures and of all fines collected in the several counties for any breach of the penal laws of the State . . . shall be faithfully appropriated and used exclusively for maintaining free public schools.” In his complaint, Mr. De Luca requested that the Attorney General “be prelimi narily and permanently enjoined from distributing payments made pursuant to [the agreement] to anyone other than to the Civil Penalty and Forfeiture Fund” and that the Attorney General be required to recover all program-related funds that had been distributed to grant recipients within the last three years and deposit those monies into the Civil Penalties and Forfeiture Fund. On 25 January 2017, Mr. De Luca filed an amended complaint that added the New Hanover County Board of Education as an additional party plaintiff and substituted the current Attorney General, Joshua H. Stein, acting in his official capacity, as a party defendant.
¶ 6 On 12 October 2017, the trial court entered an order granting summary
judgment in favor of the Attorney General on the grounds that payments made pursuant to the program did not constitute “penalties,” “forfeitures,” or “fines” that had been collected for “any breach of the penal law s of the State” subject to article IX, section 7, of the North Carolina Constitution. On the same date, the trial court entered an order allowing the North Carolina Coastal Federation, Inc., and Sound Rivers, Inc., to intervene as party-defendants. Mr. De Luca and the Board of Education noted an appeal from the trial court’s summary judgment order to the Court of Appeals. On 4 September 2018, a divided panel of the Court of Appeals filed an opinion
holding that, while Mr. De Luca lacked standing to assert a claim against the
Attorney General pursuant to article IX, section 7, of the North Carolina
Constitution, the Board of Education was entitled to assert such a claim on the theory
that, in the event that its claim against the Attorney General proved successful, it
was entitled to receive a portion of the funds at issue in this case.
De Luca v. Stein
,
to this Court on the basis of a dissent by former Judge Wanda Bryant and after we
granted petitions for discretionary review with respect to additional issues filed by
all of the parties to this case, this Court filed an opinion on 3 April 2020 in which it
reversed the Court of Appeals’ decision and remanded this case to the Court of
Appeals for further proceedings not inconsistent with its opinion.
New Hanover Cty.
Bd. of Educ. v. Stein
,
the General Assembly had recently enacted N.C. Sess. L. 2019-250, which took effect on 1 July 2019, id . at 124 n.8, and that the statutory provision in question had amended chapter 147, article 6, of the North Carolina General Statutes by adding a new section that provided, in pertinent part, that, “ [e]xcept as otherwise provided by law, all funds received by the State, including cash gifts and donations, shall be deposited in the State treasury, ” N.C.G.S. § 147-76.1(b) (2021); that, “ [e]xcept as otherwise provided by subsection (b) of this section, the terms of an instrument evidencing a cash gift or donation are a binding obligation of the State, ” N.C.G.S. § 147-76.1(c); and that “[n]othing in this section shall be construed to supersede, or authorize a deviation from the terms of an instrument evidencing a gift or donation setting forth the purpose for which the funds may be used, ” N.C.G.S. § 147-76.1(c). After noting that “the parties [had] agreed that the provisions of newly-enacted S N.C.G.S. § 147-76.1 would not have the effect of mooting this appeal,” we stated that we would not attempt to construe the new statute or to apply it to the facts of this case and expressed “no opinion as to what effect, if any, N.C.G.S. § 147 -76.1 has on the agreement or any past or future payments made thereunder.” Stein , 374 N.C. at 260. [4]
2. The Second Appeal
On 26 May 2020, the Board of Education filed a motion with the Court of
Appeals seeking leave to file a supplemental brief addressing the applicability of
N.C.G.S. § 147-76.1 to this case. The Court of Appeals allowed the Board of
Education’s motion for supplement al briefing on 18 June 2020. In its supplemental
brief, the Board of Education argued that N.C.G.S. § 147-76.1 applied to payments
made pursuant to the agreement on the grounds that those payments constituted
“funds received by the tate” in the form of a “cash gift” and that the Attorney General
was required to deposit payments made pursuant to the agreement in the State
treasury. After acknowledging that the General Assembly had not enacted § 147-
76.1 until after the amended complaint had been filed, the Board of Education argued
that appellate courts “must apply the law in effect at the time it renders its decision , ” citing
State v. Currie
,
section 147-76.1 applies to Smi thfield’s funding of the grant program,” he would , “out of an abundance of caution, ” transfer the only payment that had been received from the Smithfield companies since 1 July 2019 to the State treasury and committed to ensuring that all future payments received from the Smithfield companies would be deposited into the State treasury as well. The Attorney General also asserted that N.C.G.S. § 147- 76.1 had “no effect on the only claim that the [Board of Education had] assert[ed] in its complaint ,” which was that payments made pursuant to the agreement were “ subject to [the civil penalties clause] of the Constitution and must go to the Civil Penalty and Forfeiture Fund .” For that reason, the Attorney General contended that “ [n]othing about the enactment of section 147-76.1 or the deposit of the funding for the grant program into the s tate treasury” altered this Court’s decision with respect to the civil penalties issue, so that “this case [was] over, ” and that, by asking the Court of Appeals to “apply” § 147-76.1 to this case, the Board of Education was asking the Court of Appeals “to do nothing less than resolve a new claim” that was completely unrelated to the claim asserted in the amended complaint despite the fact that “no such claim [ had been ] pleaded” in the Board of Education ’s amended complaint. In addition, the Attorney General contended that, even if any claim that the
Board of Education might assert pursuant to N.C.G.S. § 147-76.1 was properly before the Court of Appeals, that claim lacked merit. More specifically, the Attorney General contended that the Board of Education lacked standing to assert a claim pursuant to § 147-76.1 on the theory that, unlike article IX, section 7, of the North Carolina Constitution, § 7, N.C.G.S. § 147-76.1 did not confer any “financial interest” upon the Board of Education, with “some generalized grievance about the operation of the grant program” being insufficient to support the assertion of a claim pursuant to 147-76.1. Moreover, the Attorney General argued that a decision to deposit funds received pursuant to the agreement into the State treasury would have no effect upon the operation of the grant program because § 147-76.1(b) expressly provided that “the terms of an instrument evidencing a cash gift or donation are a binding obligation of the State.” For that reason, the Attorney General contended that the terms of his agreement with the Smithfield companies, including the provisions giving him the authority to administer the grant program, remained in effect even after the funds provided pursuant to the agreement had been deposited into the State treasury. Finally, the Attorney General claimed that, in the event that the Board of Education . was merely seeking to have funds received pursuant to the agreement deposited into the State treasury, any such claim had been rendered moot by virtue of the fact that the relevant funds had already been placed there.
¶ 13 On 15 December 2020, a divided panel of the Court of Appeals filed an opinion
in which it reversed the trial court’s summa ry judgment order and remanded this
case to Superior Court, Wake County, for the entry of an order compelling the
Attorney General to transfer “all funds presently held” and “all funds received under
the [a]greement in the future” into the State treasury a s required pursuant to
N.C.G.S. § 147-76.1.
New Hanover Cty. Bd. of Educ. v. Stein
,
Attorney General had agreed that he had accepted the funds that had been made
available pursuant to the agreement on behalf of the State and that N.C.G.S. § 147-
76.1 provided that “ all funds received by the State, including cash gifts and donations,
shall be deposited into the State treasury.”
Id
. at 137; § 147-76.1(b). In light of that
set of facts, the Court of Appeals concluded that “[t]he statute clearly mandates these
are public funds, [that] they belong to taxpayers of the State, and [that they] are
required ‘to be deposited into the State treasury.’ ”
Stein
, 275 N.C. App. at 137
(quoting § 147-76.1(b)). According to the Court of Appeals, the fact that § 147-76.1
had not been enacted until after the filing of the amended complaint had no bearing
upon the proper resolution of this case given that the Attorney General did not raise
this issue on appeal and that, in any event, “[o]ur courts have held [ ] ‘[t]he general
rule is an appellate court
must
apply the law in effect at the time it renders its
decision.’ ”
Id
. (quoting
Currie
, 19 N.C. App. at 243). After acknowledging that
current law should not be applied in the event that doing so “would result in manifest
injustice or there is a statutory direction or legislative history to the contrary,”
Bradly
v. Sch. Bd. of Richmond
,
stated that “[t]he Board’s original prayer for relief seeks deposit of [the funds received pursuant to the agreement] into the State treasury in the Civil Penalty and Forfeiture Fund, ” that the Smithfield companies are “depositing $2 million dollars of admittedly public funds per year into a private bank account for public environmental purposes ,” and that, “ under the [a]greement, the Attorney General purports to exercise sole authority to allocate and distribute these sums to his chosen recipients. ” Id . at 139. In addition, the Court of Appeals noted that the Board of Education had “ requested a preliminary and permanent injunction against the Attorney General to prevent future distribution of these funds” and alleged that there was “a current and ongoing course of future payments of public funds under the [a]greement. ” Id . According to the Court of Appeals,
[w]hether the funds should be deposited into the State treasury for further appropriation and distribution or be earmarked for the Civil Penalty and Forfeiture Fund is immaterial as juxtaposed with deposits of public funds into a private bank account with distributions therefrom and recipients thereof within the Attorney General’s sole discretion and control.
Id . As a result, the Court of Appeals held that the allegations contained in the amended complaint sufficed to state a claim for relief pursuant to N.C.G.S. § 147- 76.1. Id . In addition, the Court of Appeals noted that it had recently held that the
General Assembly, rather than the Governor, had the authority to decide how certain
federal block grant awards should be spent; that “North Carolina courts have not
permitted members of the executive branch to exercise unbridled appropriation or
expenditure of unbudgeted public funds” ; and that N.C.G.S. § 147- 76.1 “mandates the
location and depository where the public money is to be deposited and held.”
Stein
,
¶ 18 In dissenting from the Court of Appeals’ decision, Judge Bryant concluded that
the Board of Education lacked standing to assert a claim against the Attorney General pursuant to N.C.G.S. § 147-76.1. Id . at 142 (Bryant, J., dissenting). In Judge Bryant’s view, the Board of Education had failed to advance any claim pursuant to § 147-76.1 at the time of its initial appeal, that the Board of Education could not have done so because the relevant legislation had not been enacted at that time, and that this Court had not addressed the issue at the time of its initial consideration of this case. Id . According to Judge Bryant , “[t]he issue raised by the Board concerning [N.C.G.S. § 147- 76.1] is novel” and “is not, therefore, an ‘additional proceeding’ as contemplated by the Supreme Court’s mandate” but is, instead, “ an entirely new proceeding which a trial court of competent jurisdiction must rule on before this Court may consider arguments.” Id . at 142 – 43. In addition, Judge Bryant disagreed with the Court of Appeals’ reliance upon
N.C.G.S. § 1A-1, Rules 8 and 54(c), on the theory that “[t]he Rules of Civil Procedure apply to our trial courts ,” citing N.C.G.S. § 1A- 1, Rule 1 (“Scope of Rules”) , and that, while the appellate courts “are authorized to determine whether the trial courts properly applied the Rules of Civil Procedure,” they “are not authorized to substitute those rules for the rules which govern [thei r] review on appeal.” Id . at 143 – 44. As a result, Judge Bryant concluded that the Court of Appeals had prematurely addressed the effect of § 146-76.1 upon the funds received pursuant to the agreement and should have refused to consider that issue on ripeness grounds. Id . at 144.
¶ 20 The Attorney General and environmental intervenors noted appeals to this
Court from the Court of Appeals’ decision based upon Judge Bryant’s dissent. In addition, the Attorney General, the environmental intervenors, and the Board of Education filed separate petitions seeking discretionary review with respect to additional issues. On 14 April 2021, this Court allowed the discretionary review petitions filed by the Attorney General and the Board of Education while dismissing the environmental intervenors’ discretionary review petition as moot.
II. Substantive Legal Analysis
A. Standard of Review This Court reviews decisions of the Court of Appeals for errors of law. N.C. R.
App. P. 16(a);
State v. Melton
,
B. The Board’s Complaint An analysis of the exte nt to which the Board of Education’s amended complaint
states a claim for relief pursuant to N.C.G.S. § 147-76.1 must begin with an
examination of N.C.G.S. § 1A-1, Rule 8, which provides that a pleading must contain
(1) “[a] short and plain statement of th e claim sufficiently particular to give the court
and the parties notice of the transactions, occurrences, or series of transactions or
occurrences, intended to be proved showing that the pleader is entitled to relief” and
(2) “[a] demand for judgment for the relief to which [the plaintiff] deems himself
entitled.” As we have previously stated, “when the allegations in the complaint give
sufficient notice of the wrong complained of[,] an incorrect choice of legal theory
should not result in dismissal of the claim if the allegations are sufficient to state a
claim under
some
legal theory.”
Stanback v. Stanback
, 297 N.C. 181, 202 (1970)
(emphasis added),
overruled on other grounds by Dickens v. Puryear
,
relief pursuant to N.C.G.S. § 147-76.1, the Attorney General argues that, even though
the applicable standard of review is a liberal one, it “does not relieve plaintiffs of the
burden of making factual allegations that provide defendants with sufficient notice
of the specific claims that plaintiffs might assert. ” In support of this assertion, the
Attorney General directs our attention to
Sutton
, in which we recognized that the
General Assembly intended “to require a more specific statement, or notice in more
detail” by enacting N.C.G.S. § 1A-1, Rule 8, compared to the requirements of Rule
8(a)(2) of the Federal Rules of Civil Procedure.
Sutton
,
notice that the Board of Education was asserting a claim pursuant to N.C.G.S § 147- 76.1, which had been enacted three years after the filing of the amended complaint, or any other claim relating to the location in which funds provided under the agreement were being deposited other than the Civil Penalties and Forfeiture Fund. On the contrary, the Attorney General argues that “the only ground that the Board identifies that provides it with standing to sue the Attorney General relates to a claim under the civil- penalty clause” of the state constitution. More specifically, the Attorney General notes that the factual allegations set out in the amended complaint revolve around the Board of Education’s contention that the payments that the Smithfield companies had made pursuant to the agreement constituted civil penalties and that the only relief that the Board of Education had requested was that the payments that the Smithfield companies had made pursuant to the agreement should be deposited in the Civil Penalties and Forfeiture Fund. In the Attorney General’s view, the absence of any allegation that the funds provided by the Smithfield companies under the agreement were being held outside the State treasury necessitated a conclusion that the Attorney General had not been provided with sufficient notice that the Board of Education was contending that the trial court should have ordered the Attorney General to deposit any funds that had been received pursuant to the agreement in the State treasury.
¶ 25 The Attorney General asserts that the Court of Appeals’ reliance upon
N.C.G.S. § 1A-1, Rule 54(c), which directs trial courts to award a prevailing party the
relief to which it was entitled “even if the party has not demanded such relief in its
pleadings, ” has no bearing upon the proper resolution of this case given that “it is
‘well - settled’ that relief granted under Rule 54 ‘must be consistent with the claims
pleaded.’ ”
N.C. Nat’l Bank v. Carter
,
allege a claim for relief predicated upon N.C.G.S. § 147-76.1, the Board of Education
contends that it had “allege [d] that the Attorney General [was] receiving and
disbursing State funds.” According to the Board of Education, a complaint should not
be dismissed simply because it fails to cite the statutory provision upon which the
claim that it asserts rests and that a complaint is sufficient in the event that it alleges
the relevant facts even though the claim being asserted is either mislabeled or not
labeled at all, citing in support of that proposition
Enoch v. Inman
, 164 N.C. App.
415, 417 – 18 (2004). In the Board of Education’s view , as long as the complaint alleges
facts that give the opposing party sufficient notice to permit it to understand the
nature of the claim that is being asserted, that claim has been sufficiently stated.
According to the Board of Education, the “elements” of a claim pursuant to
N.C.G.S § 147-76.1 are “(1 ) receipt of State funds and (2) those funds not being
deposited into the State Treasury or those funds not being properly appropriated.” In the Board of Education ’s view, the allegation in the amended complaint that the
Smithfield companies “pa [id] North Carolina and deliver[ed] to the Attorney General
of North Carolina up to $2 million per year” that was “distribute[ d] . . . to grant
recipients for Supplemental Environmental Programs” sufficed to put the Attorney
General on notice that he had improperly received and spent State money, thereby
effectively informing the Attorney General that a claim has been stated pursuant to
§ 147-76.1 despite the absence of any reference to the relevant statutory provisions
in the relevant pleading. Similarly, the Board of Education argues that the amended
complaint sufficiently requests that the funds that the Smithfield companies provided
under the agreement be deposited in the State treasury on the theory that a trial
court should provide “whatever relief is supported by the complaint’s factual
allegations and proof at trial.”
Holloway
,
Professor Marcus Gadson of the Campbell Law School argues that “the policy behind
the notice theory of the present [pleading] rules is to resolve controversies on the
merits, following opportunity for discovery, rather than resolving them on
technicalities of pleading. ”
Smith v. City of Charlotte
,
¶ 30 In this case, however, the trial court was never asked to consider whether the
Board of Education ’s complaint sufficed to state a claim pursuant to N.C.G.S. § 147-
76.1 and could not have done so because the relevant statutory provision
did not exist
at the time that the trial court decided to grant summary judgment in the Attorney
General’s favor. As a result, this case does not involve “mislabel [ing] ” or a “fai l[ing]
to label” a claim properly; instead, the Board of Education could not have asserted a
claim based upon § 147-76.1 before the trial court because the amended complaint
was filed years before the relevant statutory provision was enacted. In other words,
the Court of Appeals lacked the authority to address and decide a wholly new claim
that had been asserted for the first time on remand from this Court’s initial decision.
As Judge Bryant recognized in her dissenting opinion, “[t]he Rules of Civil Procedure
apply to our trial courts” and “[w]e are not authorized to substitute those rules [for
the rules that] govern our review on appeal[,]” i.e., the North Carolina Rules of
Appellate Procedure.
Stein
,
that it asserted against the Attorney General “[b]ecause the law changed while [its]
appeal was pending, ” it cites no authority in support of the proposition that a plaintiff
may assert for the first time in the appellate division that a complaint alleges the
existence of a cause of action that did not exist at the time the plaintiff filed his or
her complaint in the trial division. Aside from the chaotic conditions that could result
in the appellate courts in the event that the procedures utilized by the Court of
Appeals in this case became commonplace, allowing such a result to occur would
effectively deprive the trial court of the ability to perform its primary role — either
through the judge or a jury — as the finder of fact, since the trial court would not have
had the opportunity to decide the issue of whether the record contains sufficient
factual support for the proposed claim for relief.
See Carolina Power & Light Co. v.
City of Asheville
,
of the legal theory upon which the Board of Education has relied in attempting to
persuade us to affirm that decision. As this Court has previously held , “[u]nder the
notice theory of pleading a statement of a claim is adequate if it gives sufficient notice
of the claim asserted
to enable the adverse party to answer and prepare for trial
. . .
and to show the type of case brought.”
Sutton
,
complaint and after assuming, without in any way deciding, that the Board of Education has properly stated the elements of any claim for relief that might be available to it pursuant to N.C.G.S. § 147-76.1, we conclude that the Board of Education would have been required to allege that the Attorney General had failed to deposit the funds that the Smithfield companies have paid in accordance with the agreement into the State treasury. The amended complaint is, however, completely devoid of any such allegation. Instead, the amended complaint simply alleges that the Attorney General had failed to deposit the relevant funds into the Civil Penalty and Forfeiture Fund, which is an entirely different kettle of fish. In addition, any contention that the allegation in the amended complaint that “the Attorney General has distributed these sums to grant recipients for Supplemental Environment[al] Programs” necessarily “suggests that the Attorney General has taken the funds and then given them to grant recipients without the intermediate step of putting the money in the treasury first” involves a logical leap that we are unable to take and rests upon an after-the-fact attempt to imply the existence of a factual allegation that would not have had any bearing upon the claim that the Board of Education actually asserted in the amended complaint had it been made. The Court of Appeals’ determination that the amended complaint suffices to
assert a claim for relief pursuant to N.C.G.S § 147-76.1 seems even more dubious
when one considers that the original cause of action that the Board of Education
asserted in the amended complaint was constitutional, rather than statutory, in
nature. In
Enoch
, the Court of Appeals determined that the factual allegations
underlying the plaintiff’s claim that a local employee had violated her federal
constitutional rights in contravention of the Fourteenth Amendment sufficed to
support a claim for relief pursuant to 42 U.S.C. § 1983, a statute that provides the
exclusive remedy for the infringement of federal constitutional rights by a state or
local employee.
Enoch
,
complaint was whether payments made by the Smithfield companies in accordance with the agreement constituted civil penalties for purposes of article IX, section 7, of the North Carolina Constitution, which is an issue that this Court definitively resolved in its earlier decision in this case. As far as we have been able to ascertain, nothing in N.C.G.S. § 147- 76.1 “positively change s the rule which governs ” the proper resolution of the civil penalties issue. For that reason, nothing in Currie or the decisions upon which it relies provides any support for a determination that the enactment of a statute during the pendency of an appeal that does not have any direct bearing upon the proper resolution of the issue that is before the appellate court on appeal allows a party to assert a completely new claim for the first time in an intermediate appellate court on remand from the decision of a state court of last resort. As a result, the enactment of § 147-76.1 does not constitute a change in the applicable legal principles governing the claim asserted in the amended complaint that was addressed in the first round of appellate decisions in this case ¶ 37 Our decision to reverse the Court of Appeals and order the reinstatement of
the trial court’s original summary judgment order does not, contrary to the contentions that have been advanced by the Board of Education and Professor Gadson, completely deprive the Board of Education of the ability to assert any claim that might be available to it pursuant N.C.G.S. § 147-76.1. Instead, the Board of Education remains free under our decision in this case to file a new complaint in the Trial Division of the General Court of Justice asserting any claims that might otherwise be available to it pursuant to § 147-76.1 or any other statutory provision. See Stein , 275 N.C. App. at 144 (Bryant, J., dissenting) (noting that “the appropriate venue for the Board’s claim under [§ 147- 76.1] is the trial court.”). Instead, our decision in this case reflects nothing more than a recognition that the Board of Education is not free to raise a completely new claim for the first time on appeal from a trial court order granting summary judgment in favor of the opposing party, a result that reaffirms the long-standing principle that a party cannot “swap horses between courts in order to get a b etter mount in the Supreme Court.” Weil v. Herring , 207 N.C. 6, 10 (1934). As a result, we hold that the Court of Appeals erred by considering and granting the Board of Education’s request for relief pursuant to N.C.G.S . § 147- 76.1. We are unable to conclude our consideration of this case without taking notice
of the unusual procedural posture in which it arrived at this Court. After “revers[ing]
the decision of the Court of Appeals and remand[ing] this case to the Court of Appeals
for any additional proceedings not inconsistent with [that] opinion [,]” in our original
decision,
Stein
,
[a]lthough 2019 N.C. Sess. Laws 250, § 5.7.(c) provided that newly-enacted N.C.G.S. § 147-76.1 became effective on 1 July 2019, and would be applicable to all funds received on or after that date, the parties agreed that the provisions of newly-enacted N.C.G.S. § 147-76.1 would not have the effect of mooting this appeal. As a result, we will refrain from attempting to construe N.C.G.S. § 147-76.1 or to apply its provisions to the facts of this case. We express no opinion as to what effect, if any, N.C.G.S. § 147-76.1 has on the agreement or on any past or future payments made thereunder.
Id . at 260. [7] On remand, the Court of Appeals determined that the language contained in this footnote had “remanded to [the Court of Appeals] the task of determining additional proceedings regarding [§ 147-76.1]. ” Stein , 275 N.C. App. at 139. In reaching this conclusion, the Court of Appeals misapprehended the purpose for which we included Footnote No. 8 in our original opinion. Instead of requesting the Court of Appeals to consider any issues relating to § 147-76.1 on remand, Footnote No. 8 simply acknowledged the enactment of § 147-76.1 while expressing no opinion concerning the manner in which that newly enactment statutory provision should be construed or applied with respect to funds received from the Smithfield companies pursuant to the agreement. Although this Court does, on occasion, remand cases to the lower courts for the consideration of additional issues, see, e.g., Farm Bureau v. Cully’s Motorcross Park , 366 N.C. 505, 514 (2013) (noting that, “[w]hen this Court implements a new analysis to be used in future cases, we may remand the case to the lower courts to apply that analysis”), we did not take any such step in this case and clarify that, in the event that we remand a case to the Court of Appeals or a trial court “for further proceedings not inconsistent with [its] opinion,” such language should not be interpreted as an invitation to consider new claims that are unrelated to any contention that had been advanced before this Court, the Court of Appeals, or the trial court to that point in the litigation.
III. Conclusion Thus, for the reasons set forth above, we hold that the Court of Appeals erred by concluding that the Board of Education ’s amended complaint sufficed to support a claim for relief pursuant to N.C.G.S. § 147-76.1 and remanding this case to Superior Court, Wake County, for the entry of an order requiring compliance with the Court of Appeals’ interpretation of that newly enacted statutory provision. In light of this determination, we need not address the other arguments that have been advanced for our consideration by the parties. As a result, we reverse the decision of the Court of Appeals and remand this case to the Court of Appeals for further remand to Superior Court, Wake County, with instructions to reins tate the trial court’s order granting summary judgment in favor of the Attorney General.
REVERSED AND REMANDED.
Justice BERGER did not participate in the consideration or decision of this case.
Notes
[1] The subsidiaries involved in the agreement include Brown’s of Ca rolina, Inc.; Carroll’s Foods, Inc; Murphy Farms, Inc.; Carroll’s Foods of Virginia, Inc.; and Quarter M Farms, Inc.
[2] At the time the agreement was signed, the North Carolina Department of Environmental Quality was known as the North Carolina Department of Environment and Natural Resources.
[3] In 2012, RBC Centura Bank was acquired by PNC Financial Services.
[4] On 18 May 20 20, this Court entered an order denying the Board of Education’s petition for rehearing while modifying the wording contained in Footnote No. 8 as it appeared in our original opinion. The language quoted in the text of this opinion reflects the wording change that resulted from the modification that we made to the relevant footnote. See 374 N.C. 260 (2020).
[5] Although the Court of Appeals remand order mandated that all funds presently held by the Attorney General pursuant to the agreement be deposited in the State treasury, the Board of Education acknowledges that this portion of the Court of Appeals’ decision was erroneous given that the enacting legislation specified that § 147-76.1 would “appl[y] to funds received on or after ” 1 July 2019 and asks that the Court refrain from affirming the Court of Appeals decision with respect to funds received by the Attorney General prior to 1 July 2019. See 2019 N.C. Sess. Laws 250, § 5.7.(c).
[6] As we have already discussed, the Board of Education has failed to cite any authority tending to suggest that it has any substantive rights under or the ability to assert a claim pursuant to § 147-76.1. Although we do not reach the question of the Board of Education ’s standing to assert a claim against the Attorney General pursuant to § 147-76.1, the absence of statutory language authorizing the Board of Education to assert such a claim casts further doubt upon the validity of its argument that the allegations that it made in support of the state constitutional claim asserted in the amended complaint sufficed to support a separate state statutory claim.
[7] See Footnote 4 above.