Administrative – Interpretation of State Rules and Regulations – Deference to Legal Interpretation of State Agency

Courts interpreting state administrative regulations must freely substitute their judgment for that of the agency and employ de novo review.

We modified and affirmed the judgment of the Court of Appeals.

This administrative case arose after Winston-Salem State University fired Plaintiff, a university professor, for neglecting various job duties such as grading and teaching, and for using offensive racial slurs. Among many other claims, Plaintiff argued the university failed to follow its own rules and regulations. When reviewing this procedural claim, the Court of Appeals held that “an agency’s construction of its own regulations is entitled to substantial deference” and that the Court of Appeals must “defer to the agency’s interpretation of its regulations unless it is plainly erroneous.” That holding was based on a decision of this Court applying federal law to a federal agency’s interpretation of its own federal regulations.

A state agency’s interpretation of its own rules or regulations can inform a court’s judgment and aid in ascertaining the meaning of the law. But the agency’s interpretation is never binding. We expressly disavowed any interpretive rule requiring courts to defer to a state agency’s interpretation of state rules and regulations, overrule any previous Court of Appeals case law to the contrary, and instruct all lower courts to apply traditional de novo review to the interpretation of state rules and regulations.

The only remaining issue in this case was a narrow one stemming from the partial dissent at the Court of Appeals. Our review was constrained by the reasoning provided by the dissent, which asserted that the case must be remanded to the trial court for further proceedings. We rejected that argument.

The deference discussion in Morrell v. Flaherty, which used a now-outdated federal standard for reviewing a federal agency interpretation of federal law, does not apply to state agencies and state regulations. Instead, when “interpreting a regulatory term, an appellate court may freely substitute its judgment for that of the agency and employ de novo review.” Courts interpreting state administrative regulations must freely substitute their judgment for that of the agency and employ de novo review. In cases involving a complex or highly technical regulatory program, courts should continue to give due consideration to the views of the agency, as those views may aid “in ascertaining the meaning” of the regulation.

We disavow any state law precedent suggesting otherwise and instruct all lower courts to apply traditional de novo review to the interpretation of state administrative regulations. if a lower court examining this same First Amendment question fails to engage in the proper legal analysis, there is no need to remand for that court to do so; because review is de novo, if the appellate court has jurisdiction over that legal question, it can simply assess it using the correct analysis. Because legal questions are reviewed de novo, the reviewing court is only concerned with “disposition of the trial court” on that legal question, not “an assessment or review of the trial court’s reasoning.”

Modified and affirmed.

Mitchell v. The University of North Carolina Board of Governors (Lawyers’ Weekly No. 010-043-25, 39 pp.) (Richard Dietz, J.) Appealed from Forsyth County Superior Court (Martin B. McGee, J.) Fox Rothschild LLP, by Nathan Wilson, Matthew N. Leerberg, and Kip D. Nelson; and Beechler Tomberlin PLLC, by Allison Tomberlin, for petitionerappellant. Jeff Jackson, Attorney General, by Lindsay Vance Smith, Special Deputy Attorney General, Ryan Y. Park, Solicitor General, and James W. Doggett, Deputy Solicitor General, for respondent-appellee. Jacob P. Warner for Alliance Defending Freedom, amicus curiae. Jonathan D. Guze for John Locke Foundation, amicus curiae. Phillip Jacob Parker Jr., Stephen A. Woodson, Meghan N. Cook, and Stacy Revels Sereno for North Carolina Farm Bureau Federation, Inc.; and Raymond A. Starling for North Carolina Chamber Legal Institute, amici curiae. North Carolina Supreme Court