Court Opinion

ID: 4186899
Source: CourtListenerOpinion
Date Created: 2017-07-18 13:11:03.637934+00
Date Added: 2024-06-11T14:39:59.552555
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                     No. COA17-112

                                   Filed: 18 July 2017

Wake County, No. 12 CVS 2414

RICHMOND COUNTY BOARD OF EDUCATION, Plaintiff,

              v.

JANET COWELL, NORTH CAROLINA STATE TREASURER, in her official
capacity; LINDA COMBS, NORTH CAROLINA STATE CONTROLLER, in his
official capacity; ANDREW HEATH, NORTH CAROLINA STATE BUDGET
DIRECTOR, in his official capacity; FRANK PERRY, SECRETARY OF THE NORTH
CAROLINA DEPARTMENT OF PUBLIC SAFETY, in his official capacity; and ROY
COOPER, ATTORNEY GENERAL OF NORTH CAROLINA, in his official capacity,
Defendants.

        Appeal by defendants from order entered 1 November 2016 by Judge Donald

W. Stephens in Wake County Superior Court. Heard in the Court of Appeals 7 June

2017.

        George E. Crump, III, for plaintiff-appellee.

        Attorney General Joshua H. Stein, by Assistant Attorney General Thomas M.
        Woodward and Special Deputy Attorney General Amar Majmundar, for
        defendants-appellants.

        DIETZ, Judge.

        The State Treasurer, State Controller, and various other officials appeal from

the trial court’s order and writ of mandamus commanding them to pay money from

the State treasury to satisfy a court judgment against the State.
                       RICHMOND CTY. BD. OF EDUC. V. COWELL

                                   Opinion of the Court

      If this were any other case, we would summarily reverse. Under the Separation

of Powers Clause in our State constitution, no court has the power to order the

legislature to appropriate funds or to order the executive branch to pay out money

that has not been appropriated.

      But this case is more complicated because it, too, arises under our State

constitution. The Richmond County Board of Education brought a claim against the

State alleging that fees collected for certain criminal offenses, and used to fund county

jail programs, should have been given to the schools instead. The school board relied

on Article IX, Section 7 of our State constitution, which provides that “all fines

collected in the several counties for any breach of the penal laws of the State, shall

belong to and remain in the several counties, and shall be faithfully appropriated and

used exclusively for maintaining free public schools.”

      After a series of appeals to this Court, the school board ultimately prevailed on

its constitutional claim. This Court ordered that all fees collected and sent to the jail

program must be “paid back” to the clerks of superior court in the respective counties,

to then be sent to the county schools. Richmond Cty. Bd. of Educ. v. Cowell, __ N.C.

App. __, __, 776 S.E.2d 244, 249 (2015).

      That never happened—apparently because the Richmond County Board of

Education never secured an injunction to stop the program while this case made its

way through the courts, and now the money has been spent. Moreover, the General

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                       RICHMOND CTY. BD. OF EDUC. V. COWELL

                                    Opinion of the Court

Assembly, to date, has not appropriated any new money to pay the Richmond County

schools (or any other county schools) what they are owed.

       After time passed and the Richmond County schools never got paid, the school

board returned to the trial court and secured the order and writ of mandamus on

appeal here, which commands various state officials to immediately pay the judgment

out of the State treasury or risk being thrown in jail.

       As explained below, we reverse the trial court’s order. Under long-standing

precedent from our Supreme Court, the judicial branch cannot order the State to pay

new money from the treasury to satisfy this judgment. To be sure, if the school board

had sought and obtained an injunction to stop the county jail program from using the

money, courts might have the power to order the existing money returned. But that

is not what happened here. The fees collected through the program are gone—spent

to assist the counties in funding their local jails.

       Of course, this does not mean the Richmond County schools cannot get their

money. As our Supreme Court explained in a similar case, having entered a money

judgment against the State, the judiciary has “performed its function to the limit of

its constitutional powers.” Smith v. State, 289 N.C. 303, 321, 222 S.E.2d 412, 424

(1976). From here, satisfaction of that money judgment “will depend upon the manner

in which the General Assembly discharges its constitutional duties.” Id.

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                       RICHMOND CTY. BD. OF EDUC. V. COWELL

                                   Opinion of the Court

                          Facts and Procedural History

       On 16 February 2012, the Richmond County Board of Education sued various

State officials challenging the constitutionality of a now-repealed version of N.C. Gen.

Stat. § 7A-304(a)(4b). The statute required the State to collect a $50 fee from

defendants convicted of improper equipment offenses and to remit the $50 fee to the

Statewide Misdemeanant Confinement Fund, which helps counties pay the cost of

housing criminal offenders in county jails, rather than in State prisons. The school

board argued that the statute violated Article IX, Section 7 of the North Carolina

Constitution, which states that “the clear 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 belong to and remain in the several counties, and shall be faithfully

appropriated and used exclusively for maintaining free public schools.” N.C. Const.

art. IX, § 7(a).

       After a side trip to this Court on the issue of sovereign immunity, Richmond

Cty. Bd. of Educ. v. Cowell, 225 N.C. App. 583, 739 S.E.2d 566, rev. denied, 367 N.C.
215, 747 S.E.2d 553 (2013), the trial court granted summary judgment in the school

board’s favor.

       On appeal from the trial court’s judgment, this Court affirmed, holding that

“the remittance of the $50.00 surcharges collected in Richmond County to the State

Confinement Fund is unconstitutional” and “it is appropriate—as the trial court

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                      RICHMOND CTY. BD. OF EDUC. V. COWELL

                                  Opinion of the Court

ordered—that this money be paid back to the clerk’s office in Richmond County” to

then be paid to the school system as the State constitution requires. Richmond Cty.

Bd. of Educ. v. Cowell, __ N.C. App. __, __, 776 S.E.2d 244, 249 (2015). Neither side

sought further review of this Court’s decision in our Supreme Court. On remand, the

trial court followed this Court’s mandate and entered a judgment ordering the State

to pay the Richmond County school system the $272,300.00 it is owed.

      Time passed but the Richmond County schools never got the money.

Apparently, the State was unable to “pay back” the funds collected from the $50 fees,

as this Court had ruled, because the money already had been spent on the county jail

program. Thus, without a new appropriation from the General Assembly, there were

no funds available to satisfy the judgment.

      The school board ultimately returned to the trial court and sought an order

directing various State officials to appear and show cause why they had not complied

with the trial court’s judgment. The court initially denied the school board’s request

without prejudice, noting that “Plaintiff’s Motion for Show Cause Order raises

significant issues concerning appropriation of state funds, matters of collectability,

and separation of powers.” The trial court also observed that a legislative session was

set to begin, at which point the General Assembly could appropriate funds to pay the

judgment.

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                      RICHMOND CTY. BD. OF EDUC. V. COWELL

                                  Opinion of the Court

      That didn’t happen. The General Assembly concluded its legislative session

without appropriating any funds to satisfy the judgment. On 1 September 2016, the

Richmond County Board of Education returned to the trial court seeking an order to

compel various State officials to pay $272,300.00 out of the State treasury to satisfy

the trial court’s judgment. The trial court granted the school board’s motion and

issued a writ of mandamus ordering the State Treasurer, State Controller, and State

Attorney General to take the necessary steps to pay the judgment using funds from

the State treasury. This appeal followed.

                                      Analysis

      Among the most important rights guaranteed in the North Carolina

Constitution is the Separation of Powers, which ensures that “[t]he legislative,

executive, and supreme judicial powers of the State government shall be forever

separate and distinct from each other.” N.C. Const. art. I, § 6. The Framers of our

constitution included this provision in the Declaration of Rights to prevent the

concentration of power in any one branch of our government. By reserving certain

powers exclusively to one of the three branches, our government has an inherent set

of checks and balances, which the Framers believed was essential to preserve liberty

and prevent tyranny. See State v. Berger, 368 N.C. 633, 645, 781 S.E.2d 248, 256

(2016). This is not a controversial concept. As our Supreme Court once observed, “[a]s

to the wisdom of this provision there is practically no divergence of opinion—it is the

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                       RICHMOND CTY. BD. OF EDUC. V. COWELL

                                   Opinion of the Court

rock upon which rests the fabric of our government.” Person v. Board of State Tax

Comm’rs, 184 N.C. 499, 502, 115 S.E. 336, 339 (1922).

      Although most Separation of Powers cases (in modern times, at least) involve

clashes between the legislative and executive branches, in many ways the judicial

branch poses the greatest risk to the doctrine. This is so because the courts have an

inherent power “to do all things that are reasonably necessary for the proper

administration of justice.” In re Alamance Cty. Court Facilities, 329 N.C. 84, 94, 405
S.E.2d 125, 129 (1991). To accomplish this task, courts possess the power to issue

injunctions and extraordinary writs, like the writ of mandamus issued in this case. If

the public officials targeted by these injunctions and writs ignore them, those officials

can be held in contempt and put in jail. Left unchecked, this power would permit

judges to freely organize and execute State power as they see fit.

      To restrain this far-reaching power, our Supreme Court repeatedly has

acknowledged that “[e]ven in the name of its inherent power, the judiciary may not

arrogate a duty reserved by the constitution exclusively to another body.” Id. at 99,

405 S.E.2d at 132. In other words, the Separation of Powers doctrine prohibits the

courts from using the judicial power to step into the shoes of the other branches of

government. The courts can declare a statute unconstitutional, for example, but

cannot draft a new one or order the legislature to do so. Person, 184 N.C. at 503, 115

S.E. at 339.

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                          RICHMOND CTY. BD. OF EDUC. V. COWELL

                                       Opinion of the Court

       Unsurprisingly, fights over the reach of judicial power often arise in the context

of the State treasury. After all, courts expect that when they enter valid money

judgments against the State, the State will respect those judgments. But, when that

fails, the Separation of Powers clause prevents the judicial branch from reaching into

the public purse on its own. Appropriating money from the State treasury is a power

vested exclusively in the legislative branch and “[n]o money shall be drawn from the

State treasury but in consequence of appropriations made by law.” N.C. Const. art.

V, § 7; see also Advisory Opinion In re Separation of Powers, 305 N.C. 767, 777, 295
S.E.2d 589, 595 (1982). Because the State constitution vests the authority to

appropriate money solely in the legislative branch, the Separation of Powers Clause

“prohibits the judiciary from taking public monies without statutory authorization.”

Alamance Cty. Court Facilities, 329 N.C. at 99, 405 S.E.2d at 132.1

       Our Supreme Court described how these Separation of Powers principles apply

in Smith v. State, 289 N.C. 303, 321, 222 S.E.2d 412, 424 (1976). In Smith, the

Supreme Court held that when the State contracts with a private citizen, it cannot

invoke sovereign immunity to defeat an action alleging that the State breached that

contract. The Court likewise reaffirmed the power of the judicial branch to enter a

       1 The only exception to this rule is when the legislative branch refuses to fund the judicial
branch to such an extreme extent that the judiciary cannot perform its own constitutional duties.
Alamance Cty. Court Facilities, 329 N.C. at 99, 405 S.E.2d at 132.

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                       RICHMOND CTY. BD. OF EDUC. V. COWELL

                                  Opinion of the Court

money judgment against the State. But the Court also cautioned that the power of

the judicial branch ends with the entry of that judgment:

             In the event that plaintiff is successful in establishing his
             claim against the State, he cannot, of course, obtain
             execution to enforce the judgment. The validity of his
             claim, however, will have been judicially ascertained. The
             judiciary will have performed its function to the limit of its
             constitutional powers. Satisfaction will depend upon the
             manner in which the General Assembly discharges its
             constitutional duties.

Id. (citations omitted).

      Thus, when the courts enter a judgment against the State, and no funds

already are available to satisfy that judgment, the judicial branch has no power to

order State officials to draw money from the State treasury to satisfy it.

      Of course, this case is no mere contract dispute. The State violated the North

Carolina Constitution when it moved money otherwise destined for the Richmond

County schools to a separate State fund to pay for county jail programs throughout

the State. Richmond Cty. Bd. of Educ. v. Cowell, __ N.C. App. __, __, 776 S.E.2d 244,

249 (2015). As a result, this Court held that “it is appropriate—as the trial court

ordered—that this money be paid back to the clerk’s office in Richmond County.” Id.

      It was well within the judicial branch’s power to order this money—taken from

Richmond County in violation of the constitution—to be returned. This, in turn,

means that if the money collected from these fines still rested within the Statewide

Misdemeanant Confinement Fund, awaiting the outcome of this protracted litigation,

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                      RICHMOND CTY. BD. OF EDUC. V. COWELL

                                  Opinion of the Court

the courts could order State officials to return the money to Richmond County and

the other affected counties.

      But, as the parties concede, this cannot be done because the money is gone.

The Richmond County Board of Education did not obtain a preliminary injunction to

prevent the State from spending the money while it litigated the case (and the record

on appeal contains no indication that the school board even sought an injunction). As

a result, the only way the State can satisfy the judgment entered by the trial court is

to pay new money from the State treasury—money not obtained from the improper

equipment fees, but from the taxpayers and other sources of general State revenue.

Under Smith, the judicial branch lacks the power to order State officials to pay this

new money from the treasury. 289 N.C. at 321, 222 S.E.2d at 424.

      The school board also contends that, even without a specific appropriation from

the General Assembly, there are ways for State officials to find money to pay the

judgment. For example, the school board points to the Contingency and Emergency

Fund established in N.C. Gen. Stat. § 143C-4-4. By law, that fund may be used for

“expenditures required . . . by a court.” N.C. Gen. Stat. § 143C-4-4. The school board

argues that the trial court’s writ of mandamus can be interpreted not as an order to

pay out funds that were not appropriated, but instead as an order that State officials

take whatever steps are necessary to pay the judgment from any discretionary

sources that are available.

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                            RICHMOND CTY. BD. OF EDUC. V. COWELL

                                          Opinion of the Court

        We must reject this argument because a writ of mandamus may be used only

to command public officials “to perform a purely ministerial duty imposed by law; it

generally may not be invoked to review or control the acts of public officers respecting

discretionary matters.” Alamance Cty. Court Facilities, 329 N.C. at 104, 405 S.E.2d

at 135. It is hard to imagine a more discretionary process than the one required to

obtain emergency funds—a process that permits State agencies to request the funds,

then permits the Governor to decide whether to approve that request, and then calls

for the Council of State to review the agency’s request and the Governor’s

recommendation, and to vote on whether to approve it. N.C. Gen. Stat. § 143C-4-4.2

        Moreover, commanding members of the Council of State and other executive

branch officials to approve payment from this type of discretionary emergency fund

is no less offensive to the Separation of Powers Clause than commanding the

legislature to appropriate the money. See Alamance Cty. Court Facilities, 329 N.C. at

100, 405 S.E.2d at 133. The Contingency and Emergency fund, as its name suggests,

was created to fund “contingencies and emergencies” for which no separate

appropriation exists but which must be addressed before the General Assembly

convenes to appropriate new funds. Determining what constitutes an emergency

worthy of this special fund is a task for which executive branch officials are uniquely

        2In addition, although portions of the trial court’s order refer to all defendants in the suit, the
writ of mandamus is directed only at the State Treasurer, State Controller, and State Attorney
General, not at the other officials involved in this process.

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                      RICHMOND CTY. BD. OF EDUC. V. COWELL

                                  Opinion of the Court

suited. The judiciary “has no power, and is not capable if it had the power” of

substituting its own judgment for that of the executive branch officials charged with

making these discretionary decisions. Id. at 101, 405 S.E.2d at 134.

      In sum, the role of the courts in this constitutional dispute is over.

As the Framers of our constitution intended, the judiciary “performed its function to

the limit of its constitutional powers” by entering a judgment against the State and

in favor of the Richmond County Board of Education. Smith, 289 N.C. at 321, 222
S.E.2d at 424. The State must honor that judgment. But it is now up to the legislative

and executive branches, in the discharge of their constitutional duties, to do so. The

Separation of Powers Clause prevents the courts from stepping into the shoes of the

other branches of government and assuming their constitutional duties. We have

pronounced our judgment. If the other branches of government still ignore it, the

remedy lies not with the courts, but at the ballot box.

                                     Conclusion

      For the reasons discussed above, we reverse the trial court’s order and writ of

mandamus.

      REVERSED.

      Judges ELMORE and ARROWOOD concur.

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