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Assembly rushes new appellate changes

In a harried special session called in the waning days of Gov. Pat McCrory’s administration, Republicans in the North Carolina General passed Senate Bill 4, a law that makes Republican-friendly changes to the compositions of state and local election boards and prohibits the state board from having any role in redistricting.

But buried in that bill were major changes to the state’s judiciary: The measure institutes partisan elections for the Supreme Court, allows the Court of Appeals to hear cases en banc, and repeals a 2014 law that eliminated the Court of Appeals’ jurisdiction to hear challenges to the constitutionality of state laws.

The proposals were first made public on Dec. 14, when SB 4 was filed; McCrory signed it into law Dec. 16. Members of the bar still are trying to figure out the impact of the new law.

A 180-degree turn on elections

The change to the state’s election rules comes just a few weeks after voters tipped the partisan balance of Supreme Court, which is only nominally non-partisan at the moment, from 4-3 for Republicans to 4-3 for Democrats.

Just last year, legislators passed a law that would have scrapped Supreme Court elections entirely and replaced them with retention elections. The original version of the bill would have instituted retention elections for the Court of Appeals as well, but those races were removed from the version that was signed into law.

In practice, the law would have virtually assured the reelection of Republican Justice Bob Edmunds and preserved Republicans’ majority on the court. A panel of three superior court judges deemed the law unconstitutional, however, and its ruling remained in place when the Supreme Court deadlocked 3-3 on appeal after Edmunds recused himself from the case.

Following Edmunds’ November loss to Democrat Mike Morgan, legislators displayed no appetite for reviving the retention elections system. Instead, future Supreme Court candidates will run under their partisan affiliation. Last year legislators amended state law to reinstitute partisan elections for Court of Appeals races after excising them from the retention elections bill. Republicans subsequently secured a clean sweep in November’s Court of Appeals elections, giving them a healthy majority on that bench.

John Wester, an attorney with Robinson Bradshaw & Hinson in Charlotte and a former president of the North Carolina Bar Association who is critical of judicial elections, said that moving to partisan elections would be a move to sacrifice the independence of the judiciary.

“A fine judge is defined by his or her independence, fairness neutrality and wisdom. And these characteristics have nothing to do with political party, and to imply that those qualities or characteristics are secondary to the R or D next to a judge’s name on the ballot does them a disservice,” Wester said.

“There is an implicit promise in the political party labeling that the candidate bears allegiance to his or her party’s political precepts and would decide cases accordingly.”

We’ll let you handle the rest

The Court of Appeals will acquire some new powers under the law. One section of SB 4 empowers the court to sit en banc (that is, all 15 judges on the court will hear a case rather than the usual three) to hear or rehear any case, upon a vote of the majority of the judges of the court.

Additionally, under current law, the losing parties have an automatic right to appeal to the Supreme Court any case where a Court of Appeals panel splits 2-1. The new law states that now this right will not become effective until the Court of Appeals has heard the case en banc, or denied a motion to hear the case en banc, or the time limit to file such a motion has passed.

En banc hearings are sometimes used in the federal appeals courts, and in many state courts of appeal, but have never been used in North Carolina’s Court of Appeals before. Although the idea of allowing them has been debated occasionally over the years, both the president and the vice-president of the state bar association’s appellate practice section said that the legislature’s decision to consider the issue in the special session came as a surprise to them.

The law was not coupled with any rules for implementing the new en banc procedure. Matt Leerberg, the section’s vice-president and partner at Smith Moore Leatherwood in Raleigh, said this creates “an emergency need for a new set of rules provided by the court that will govern how these cases will proceed.”

The law is effective immediately. The Court of Appeals published its most recent opinions on Dec. 20, and dissents were issued in some of those cases. The next steps for parties wishing to appeal an unfavorable ruling in those cases are thus unclear.

“In the appellate bar, we talk about everything for years. For any minor change of procedure, members of the appellate bar, judges, and justices try to think through the potential ramifications of it, and so we have a strong culture of workshopping these sorts of changes,” Leerberg said. “There are about a dozen ambiguities in the law that are either going to have to be resolved by rule or be litigated in the context of individual cases. That’s a result that the appellate bar tries to avoid.”

Kearns Davis, president of the bar association, issued the following statement in response to SB 4:
“The NCBA believes significant changes to the judicial process should occur only after careful consideration and broad input from judges, court staff, citizens, and the bar. Nevertheless, the NCBA stands ready to address the issues raised by en banc review and to assist the court system as it develops the rules and procedures necessary to integrate it into the appellate process.”

All together now this time

Multiple appellate practitioners said that en banc hearings could serve a useful, if limited purpose. Under the Court of Appeals’ rules, one panel can’t overrule the decision of a prior panel, but this sometimes creates problems for appellate practitioners because there are nevertheless conflicts between different panels’ rulings. In a few cases, it can be difficult for lawyers to figure out which ruling controls in a given dispute given conflicting strains of precedent from the Court of Appeals.

“So from an appellate practitioner’s standpoint, there is some value in having an en banc proceeding to resolve conflicts in the Court of Appeals,” said Beth Scherer, also an appellate law specialist at Smith Moore Leatherwood. “This is an interesting development, and it’s something that I think could help bring consistency and stability to the Court of Appeals’ decisions. But practically speaking, how all of this is going to work is another question.”

Much will depend on how the rules are written, but the upshot is that en banc hearings are likely to be rare occurrences, just as they are in the federal courts, which have stringent criteria for their use. The Court of Appeals already carries a massive workload—last year it disposed of 1,174 appeals and 4,111 petitions and motions—and it’s unclear how many en banc petitions it might be interested in accepting.
It’s equally unclear how much interest litigants will have in an extra, possibly expensive, layer of appellate review. Leerberg said he had not heard any appetite from the appellate bar for adding another level of review for its own sake.

The courts will likely also have to decide whether en banc hearings are permitted under the state’s constitution. Article IV, Section 7 of the constitution states that “The Court shall have not less than five members, and may be authorized to sit in divisions, or other than en banc,” although prominent legal scholars have argued that this was not actually intended to preclude the court from holding en banc hearings.

Faster than a speeding bullet

The court system will have to do a lot of work very quickly to figure out how implement the law in practice, down, quite literally, to the nuts and bolts—Sharon Gladwell, communications director for the state’s Administrative Office of the Courts, said no courtroom at either the Court of Appeals or Supreme Court is equipped to accommodate hearings before a panel of 15 judges. Temporary arrangements likely could be made to house such hearings if they are relatively infrequent, Gladwell said, but providing a permanent space for en banc hearings would be necessary if they become routine.

“There may be some workflow disruption for both staff and judges that results from taking the entire court away from hearing cases as part of separate panels in order to hear en banc cases,” Gladwell said. “Any increase in judicial caseload without accompanying resources could be expected to further delay the disposition of cases.”

Gladwell added that the Supreme Court and the Court of Appeals are assessing the administrative ramifications of SB 4’s requirements and will work with the Appellate Rules Committee to administratively craft Rules of Appellate Procedure to accommodate en banc proceedings.

Sen. Warren Daniel (R), one of the law’s architects, said that the AOC was consulted about its contents and had input into the way that it was drafted. Daniel said that since its creation in 1967, the Court of Appeals has been authorized to hear cases in only panels of three judges, even though the court’s membership has grown from six judges to 15 in that same period. He also cited the problems resulting from conflicting panel decisions and the deadlock that occurred in the retention elections case.

“Nearly every other state in the southeast allows for en banc proceedings at the intermediate appellate level,” Daniel said. “This bipartisan idea, which was championed by Gov.-elect Roy Cooper in 1999 and high-ranking Democrat senators in 2001 and 2005, will ensure at least one full appellate court can review trial court decisions in North Carolina.”

Daniel did not directly address why the legislature felt it needed to pass the changes in a three-day special session rather than during next year’s general session.

Hoisted by their own petard

The retention elections law might well have survived intact but for another controversial law legislators passed in 2014. After superior court judges held several recent state laws unconstitutional, legislators required that all constitutional challenges to state laws would first be heard by a panel of three judges chosen by the Chief Justice. The law also dictated that appeals of these panels’ decisions would proceed directly to the Supreme Court. As an unintended result, because of the Supreme Court’s deadlock, the three-judge panel’s decision was the only one handed down in the retention elections case.

A lesser-noticed provision in SB 4 would repeal the part of the law that sends appeals in such constitutional cases directly to the Supreme Court, giving the Republican-controlled Court of Appeals the chance to weigh in on those laws first. When the law was passed two years ago, the Court of Appeals was narrowly divided among Republicans and Democrats.

The Senate’s Redistricting Committee considered the bill Dec. 15, the day between its introduction and its passage. Sen. Erica Smith-Ingram (D) said only two speakers, neither from the legal community, addressed the bill before the committee.

“The repeal of [the law sending appeals straight to the Supreme Court] seemed to have only become a pressing concern after the outcome of the November election. Each of the five sections of SB4 has a common theme of stripping the power of the elected Democratic Governor and the 4-3 Democratic majority Supreme Court,” Smith-Ingram said. “Taxpayers should be asking, ‘are we being punked right now?’”

Some bridges still too far

At the same time legislators made the unanticipated changes to the law, several issues that had been mooted were not brought up in the special session.

Legislators declined an invitation from the Supreme Court to consider letting the Chief Justice appoint substitute justices to the court to avoid future deadlocks. On Nov. 8, the court amended its rules to let the Chief Justice appoint acting justices if a justice is recused from a case. The rule was rescinded a month later, at which time Gladwell released a statement saying that the General Assembly “may address this if it wishes.” Both Daniel Smith-Ingram said they were not aware of any discussions in the General Assembly on that issue.

The start of the special session was dogged by rumors that Republicans might attempt to wrest back control of the Supreme Court by passing a law to allow McCrory to appoint two new justices to the Supreme Court before he leaves office. Republican legislators spent weeks refusing to confirm or deny the existence of such a plan before formally disavowing the effort on the session’s first day. Democrats have already promised to challenge the constitutionality of the special session itself, arguing that it was not called in accordance with state law.

Notwithstanding all the jockeying for advantage in the wake of the Supreme Court election, in practice, only a very small minority of the court’s recent decisions has broken down along party lines. The vast majority of Court of Appeals decisions, regardless of a panel’s partisan balance, are unanimous as well.

Follow David Donovan on Twitter @NCLWDonovan

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