Constitutional – Fruits of Labor – Equal Protection

Because our Fruits of Labor test is a fact intensive inquiry, we agreed with the Court of Appeals that the trial court erred when it entered summary judgment. However, the Court of Appeals incorrectly applied rational basis review to the Fruits of Labor claim.

On the Fruits of Labor claim, we modified and affirmed in part the decision of the Court of Appeals and remanded this matter to the trial court to reopen factual discovery. We reversed the Court of Appeals on its Equal Protection determination and affirmed plaintiffs’ statutory claims.

Plaintiffs are a group of bar owners and employees from across North Carolina who challenged a series of executive orders entered by defendant-Governor Roy Cooper. According to the trial court, Cooper’s executive orders restricted full operation of plaintiffs’ establishments for over 400 days while permitting other businesses to reopen. Plaintiffs argued the closure and differing treatment violated constitutional and statutory guarantees. Governor Cooper contended the measures were based on science and data and were necessary responses to an ongoing emergency. But even in a declared emergency, the powers of those who act on behalf of the people have limits, and the citizens of this state rejected “because I said so” governance long ago.

This Court recently confronted similar issues in Kinsley v. Ace Speedway Racing, Ltd., 386 N.C. 418, 423 (2024). There, we addressed claims that COVID regulations imposed by the Governor violated the Fruits of Labor and Equal Protection Clauses in our State Constitution. Based on our precedent in State v. Ballance, 229 N.C. 764 (1949), we unanimously established a workable Fruits of Labor test and clarified that rational basis review is not the appropriate standard for Fruits of Labor claims.

Plaintiffs stated colorable claims under the North Carolina Constitution. But this case presented a slightly different question: whether the trial court’s entry of summary judgment in favor of the Governor was proper. Because our Fruits of Labor test is a fact intensive inquiry, we agreed with the Court of Appeals that the trial court erred when it entered summary judgment. However, the Court of Appeals incorrectly applied rational basis review to the Fruits of Labor claim. Because the Court of Appeals did not have the benefit of our decision in Ace Speedway when it issued its opinion in this case, we modified and affirmed in part the vacatur of the trial court’s order and remanded to the trial court. Plaintiffs also advanced an Equal Protection claim pursuant Article I, § 19 of the State Constitution. On this issue, the trial court applied rational basis review and dismissed the claim. The Court of Appeals reversed, applying strict scrutiny in its analysis. We reversed the Court of Appeals because our precedent states that the proper scrutiny for economic regulations under the Equal Protection Clause not based upon suspect classification is rational basis.

Modified and affirmed in part, reversed in part.

North Carolina Bar and Tavern Association v. Stein (Lawyers’ Weekly No. 010-023-25, 50 pp.) (Phil Berger Jr., J.) Appealed from the Court of Appeals, affirming in part and reversing in part an order entered by Superior Court, Wake County (James L. Gale, J.). Stevens Martin Vaughn & Tadych, PLLC, by Michael J. Tadych, K. Matthew Vaughn, and Robert F. Orr, for plaintiff-appellees. Jeff Jackson, Attorney General, by James W. Doggett and Nicholas S. Brod, Deputy Solicitors General, and Amar Majmundar and Matthew Tulchin, Special Deputy Attorneys General, for defendant-appellant. North Carolina Supreme Court