No substitutions: COA draws bright line

An Avery County landowner won’t be able to step into the shoes of a plaintiff who chose to sell her property rather than carry on her lawsuit against the local government, the North Carolina Court of Appeals has ruled.

After the town of Banner Elk granted American Towers a zoning variance in 2013 in order to build a telecommunications tower within the town’s jurisdiction, Petra Weishaupt-Smith, a neighboring property owner, petitioned the Avery County Superior Court to review the findings of the zoning board. After some back and forth, the zoning board ultimately approved the variance.

Weishaupt-Smith appealed the decision, and on the same day, her counsel filed a motion under Rule 38 of the North Carolina Rules of Appellate Procedure to substitute William Stevenson, another adjacent landowner, in her place.

Both sides consented to the substitution and the trial court allowed it, but Judge Toby Hampson, writing for a unanimous Court of Appeals panel in a March 19 opinion, said that standing is a jurisdictional issue that the Court may raise on its own motion, and that Stevenson could not take over Weishaupt-Smith’s role in the litigation, regardless of what the parties had agreed to.

The question, Hampson wrote, was whether Rule 38 allowed Stevenson to intervene in the appeal when he was not a party to the original action, given that the rule is “not intended to be a vehicle to broadly permit non-parties to swap-in for existing parties or to automatically vest a non-party with standing to appeal as a party aggrieved.”

Stevenson argued that his intervention in the appeal was necessary because Weishaupt-Smith had subsequently sold her property and thus had no interest at risk. Because North Carolina’s courts had not previously addressed the scope of Rule 38, the court looked to case law interpreting the analogous federal appellate rule.

Except in cases involving the death of the original party, Rule 38 permits substitution of a party to an appeal only when it is “necessary.” Citing the U.S. Court of Appeals for the D.C. Circuit’s decision in Alabama Power Co. v. Interstate Commerce Commission, Hampson wrote that a necessary substitution “is available only when ‘a party to the suit is unable to continue to litigate, not when an original party has voluntarily chosen to stop litigating.’”

When Weishaupt-Smith sold her property, she voluntarily chose to stop litigating since she no longer had an interest to protect, and thus Rule 38 did not allow for a new plaintiff to be substituted.

“The clear teaching of Alabama Power Co. is that a non-party to litigation below cannot be permitted to simply substitute in an appeal where the original party has ceased litigation,” Hampson wrote.

Stevenson could have filed his own petition, alleging his own standing, or timely intervened in the trial court; neither of which he did, Hampson said. Allowing him to intervene in the case without going through the proper process would thus “condone the impermissible,” providing him with an end-run for obtaining judicial review absent the authority to do so.

Nathan Miller of Miller & Johnson in Boone represented Weishaupt-Smith. Miller declined to comment on the court’s ruling.

Stacy “Four” Eggers IV and Kim Eggers of Eggers, Eggers, Eggers & Eggers in Boone represented the Town of Banner Elk. Dave Pokela of Nexsen Pruet in Greensboro represented American Towers. The attorneys could not be reached for comment.

The 12-page decision is Weishaupt-Smith v. Town of Banner Elk (Lawyers Weekly No. 011-082-19). The full text of the opinion is available online at nclawyersweekly.com.

Jonathan Loo is the opinions intern for Lawyers Weekly.