Opinion ID: 1353617
Heading Depth: 1
Heading Rank: 12

Heading: Proper Disposition of Civil Penalties Paid by Public School Systems to State Agencies

Text: Plaintiffs last raise the issue of whether the Court of Appeals properly held that civil penalties paid by the State's public school systems should not be paid into the Civil Penalty Fund for distribution back to school systems. Plaintiffs also dispute the Court of Appeals' decision permitting the payment of $11,000.00 by the Edgecombe County Board of Education to DENR to remain with DENR, the collecting agency, rather than to be paid into the Civil Penalty Fund. We agree with plaintiffs and reverse the Court of Appeals' decision on this issue. In reaching the conclusion that the funds paid by public schools as civil penalties are not subject to Article IX, Section 7, the Court of Appeals bypassed the Mussallam analysis as to whether each payment is punitive or remedial. N.C. Sch. Bds. Ass'n, 160 N.C.App. at 281, 585 S.E.2d at 436. Instead, the Court of Appeals cited this Court's statement in Davenport v. Patrick that `[p]ublic policy in this jurisdiction ... will not permit a wrongdoer to enrich himself as a result of his own misconduct.' Id. (quoting Davenport v. Patrick, 227 N.C. 686, 689, 44 S.E.2d 203, 205 (1947)). The Court of Appeals reasoned that to follow strictly the mandate of the Constitution and the statutory scheme devised by the General Assembly would allow the violating school to be unjustly enriched by its own wrongdoing and so would violate the public policy of the State. N.C. Sch. Bds. Ass'n, 160 N.C.App. at 281-82, 585 S.E.2d at 436. The dissent in the Court of Appeals relied on the same rationale to reach a different conclusion. Accepting the premise that the public policy of the State precludes an offending school system from receiving any of the funds it paid as a penalty, the dissent nonetheless argued that not all public school systems should be punished for one school system's wrongdoing. As the dissenting opinion states, [P]ublic policy ... does not mandate that the remaining school systems should be punished for the wrongdoing of another; it simply mandates that the offending school system be removed from the calculation of how to distribute the funds collected from the offending school system among the remaining public school systems. Id. at 288, 585 S.E.2d at 440. The dissent endorses an approach under which monies in the Civil Penalty Fund would be distributed to the school systems eligible under the statute while omitting the system which engaged in wrongdoing. Id. We disagree with the approaches suggested by both the majority and the dissent. Under the plain language of Article IX, Section 7 of the North Carolina Constitution and the enabling statutes, N.C.G.S. §§ 115C-457.1 through -457.3, monies paid by local public school systems as civil penalties must be remitted to the Civil Penalty Fund for return to all of the public schools in the manner dictated by N.C.G.S. § 115C-457.3. Neither the State Constitution nor the statutory scheme makes any exception for schools which committed wrongdoing. Despite any misgivings this Court may have about the wisdom of this omission, [t]he general rule in North Carolina is that absent `constitutional restraint, questions as to public policy are for legislative determination.' State v. Whittle Communications, 328 N.C. 456, 470, 402 S.E.2d 556, 564 (1991) (quoting Gardner v. N.C. State Bar, 316 N.C. 285, 293, 341 S.E.2d 517, 522 (1986)). We are constrained by the General Assembly's choice not to omit from the distribution scheme those school systems which committed wrongdoings. The nature of the party committing the violation of state law which leads to the civil penalty does not change the nature of the civil penalty itself, which we have held to be determinative as to whether the penalty accrues to the Civil Penalty Fund. See Mussallam, 321 N.C. at 508-09, 364 S.E.2d at 366-67. Accordingly, we hold that monies received from civil penalties paid by public schools must be deposited into the Civil Penalty Fund, after which the monies will be distributed to all local public school systems statewide as mandated by statute. For the foregoing reasons, the opinion of the Court of Appeals is affirmed in part and reversed in part, and the case is remanded to that court for remand to the trial court for proceedings not inconsistent with this opinion. AFFIRMED IN PART; REVERSED IN PART. Justice NEWBY did not participate in the consideration or decision of this case.