Civil Practice – Declaratory Judgment Action – Sovereign Immunity – Justiciability – Rewards Program

T & A Amusements, LLC v. McCrory (Lawyers Weekly No. 011-053-17, 18 pp.) (Mark Davis, J.) Appealed from Randolph County Superior Court (Michael Duncan, J.) N.C. App.

Holding: Where plaintiffs seek declaratory relief against state and local agencies for acting in excess of the authority granted to them by statute and for threatening to invade plaintiffs’ personal or property rights in disregard of the law, plaintiffs have pled a recognized exception to sovereign immunity.

We reverse the trial court’s grant of defendants’ motion to dismiss. Remanded.

Even if plaintiffs were required to specifically plead a waiver of defendants’ sovereign immunity, they met that burden by pleading that “Defendants are not entitled to sovereign immunity….”

The complaint alleges that law enforcement agencies were improperly seeking to prohibit plaintiffs from offering promotional rewards programs. Plaintiffs are the licensor and distributor of the Crazie Overstock (CO) Rewards Program, which law enforcement officers have determined to be in violation of North Carolina’s criminal laws. Moreover, officers have threatened criminal enforcement action against establishments offering this promotion, and such threats impede plaintiffs’ ability to license and distribute the program. Therefore, the uncertainty as to whether the CO Rewards Program violates North Carolina’s gambling and sweepstakes statutes affects plaintiffs’ ability to operate a business going forward. Accordingly, plaintiffs have presented a justiciable controversy.

Reversed and remanded.