The North Carolina Highway Trust Fund (hereinafter HTF) was
established by the General Assembly pursuant to Chapter 692 of the
1989 Session Laws (hereinafter the Act). The Act created a
special account with the State Treasury comprised of funds from the
following sources: a portion of the revenue from a motor fuel
excise tax; a portion of revenue from an alternative fuel excise
tax; a portion of revenue from an excise tax on carriers using fuel
purchased outside of the State; a portion of the revenue from a
motor vehicle use tax; the revenues from motor vehicle title and
registration fees; and interest and income earned by the funds in
the account. 1989 N.C. Sess. Laws ch. 692, § 1.1. As originally
enacted, the Act provided that the HTF could only be used to fund
the following items: expenses to administer the HTF; specific
projects of the Interstate Highway System; specific urban loop
highways designated by number and location; supplemental
appropriations to cities for city streets; and supplemental
appropriations for specific secondary road construction identified
by a minimum traffic flow. Id. The General Assembly also enacted
legislation directing the State Treasurer to make an annual
transfer of $170 million from the HTF to the General Fund, which is
used to pay the general obligations of this state. Id. § 4.1.Thereafter, the General Assembly provided for additional transfers
to be made from the HTF to the General Fund in specific fiscal
years. 2001 N.C. Sess. Laws ch. 424, § 34.24(c).
In a 1996 referendum, the voters of this state authorized the
issuance of up to $950 million in bonds to expedite HTF projects.
Pursuant to this authority, in November 1997 the State Treasurer
issued and sold $250 million in bonds (hereinafter Highway
Bonds), which are secured by the full faith and credit of this
state. The debt service that must be paid on these bonds is
approximately $25 million annually, which is paid from amounts
deposited in the HTF. Though no additional bonds have been issued,
the State Treasurer is authorized, upon approval of the Council of
State, to issue and sell an additional $700 million in Highway
For reasons related to a budget shortfall, the General
Assembly borrowed $125 million from the HTF for the 2002-03 fiscal
year. See 2002 N.C. Sess. Laws ch. 126 §§ 2.2(g), 26.14. The
borrowed money was placed in the General Fund. In addition,
Governor Michael F. Easley issued executive orders which authorized
the Office of State Management and Budget to transfer Funds from
the HTF to the General Fund, as necessary, to further ease the
effects of the budget shortfall. Pursuant to one of these
executive orders, $80 million was transferred from the HTF to the
General Fund on 8 February 2002.
On 14 November 2002, plaintiffs W.D. Goldston, Jr., and James
E. Harrington filed an action on behalf of themselves andcitizens, taxpayers and bondholders similarly situated
challenging the $125 million loan from the HTF authorized by the
General Assembly for the 2002-03 fiscal year and the $80 million
transfer authorized by the Governor. The complaint alleged that
these withdrawals from the HTF violated the North Carolina
Constitution in that (1) funds were applied to an unauthorized
purpose in violation of N.C. Const. art. V, § 5; (2) the Governor
exceeded the authority given by N.C. Const. art. III, §§ 4 and 5
and violated art. VI, § 7; and (3) bondholder contracts were
impaired in violation of N.C. Const. art. I, § 19. Plaintiffs
sought declaratory relief and a judgment requiring the return of
any wrongfully withdrawn funds.
The parties entered into an extensive stipulation as to the
facts of the case, and both parties moved for summary judgment.
While awaiting a hearing on the summary judgment motions,
plaintiffs filed an untimely motion to consider additional evidence
in the form of plaintiff Goldston's affidavit. In this affidavit,
Goldston stated that he had contacted the State Attorney General
and an employee in the Governor's Office and requested that each of
them investigate the legality of removing money from the HTF for
general expenditures, but that he never received a response. The
trial court denied the motion to consider Goldston's affidavit.
Prior to the adjudication of the summary judgment motions,
plaintiffs withdrew their request for a judgment directing the
return of funds to the HTF. Thus, the only relief sought byplaintiffs was a declaration that the Governor and the General
Assembly had acted unlawfully.
In an order entered 29 January 2004, the trial court granted
summary judgment in defendants' favor and dismissed plaintiffs'
claims. From this order, plaintiffs now appeal.
The dispositive issue on appeal is whether plaintiffs had
standing to pursue their lawsuit against defendants in superior
court. We hold that they did not.
If a party does not have standing to bring a claim, a court
has no subject matter jurisdiction to hear the claim. Estate of
Apple v. Commercial Courier Express, Inc
., 168 N.C. App. 175, 177,
607 S.E.2d 14, 16, disc. review denied
, 359 N.C. 632, 613 S.E.2d
688 (2005). Standing consists of three main elements:
 'injury in fact' _ an invasion of a
legally protected interest that is (a)
concrete and particularized . . . and (b)
actual or imminent, not conjectural or
hypothetical[;] . . .  the injury [must be]
fairly traceable to the challenged action of
the defendant[;] and . . .  it [must be]
likely, as opposed to merely 'speculative,'
that the injury will be 'redressed by a
Neuse River Found., Inc. v. Smithfield Foods, Inc.
, 155 N.C. App.
110, 114, 574 S.E.2d 48, 52 (2002) (quoting Lujan v. Defenders of
, 504 U.S. 555, 560-61, 119 L. Ed. 2d 351, 364 (1992)
(citations omitted)), disc. review denied
, 356 N.C. 675, 577 S.E.2d
628-29 (2003). This Court may review the standing of litigants in
a particular case on its own motion and for the first time onappeal; our review on this issue is de novo
. Henke v. First Colony
, 126 N.C. App. 703, 704, 486 S.E.2d 431, 432, appeal
dismissed, disc. review denied, cert. denied
, 347 N.C. 266, 493
S.E.2d 455 (1997).
Generally, an individual taxpayer has no standing to bring a
suit in the public interest. Fuller v. Easley
, 145 N.C. App. 391,
395, 553 S.E.2d 43, 46 (2001). However, the taxpayer may have
standing if he can demonstrate that
[a] tax levied upon him is for an
unconstitutional, illegal or unauthorized
purpose[;] that the carrying out of a
challenged provision will cause him to
sustain personally, a direct and irreparable
injury[;] or that he is a member of the class
prejudiced by the operation of [a] statute.
Texfi Industries v. City of Fayetteville
, 44 N.C. App. 268, 270,
261 S.E.2d 21, 23 (1979) (citations omitted), disc. review allowed
in part and denied in part
, 299 N.C. 741, 267 S.E.2d 671, aff'd
301 N.C. 1, 269 S.E.2d 142 (1980).
A taxpayer who otherwise lacks standing may nevertheless bring
an action on behalf of a public agency or political subdivision, if
'the proper authorities neglect or refuse to act.' Guilford
County Bd. of Comrs. v. Trogdon
, 124 N.C. App. 741, 747, 478 S.E.2d
643, 647 (1996) (quoting Branch v. Board of Education
, 233 N.C.
623, 625, 65 S.E.2d 124, 126 (1951)), disc. review denied
, 345 N.C.
753, 485 S.E.2d 52-53 (1997). To bring this type of action,
taxpayers must show they are a taxpayer of the public agency or
political subdivision and must further establish that either: 1)
there has been a demand on and refusal by the proper authorities toinstitute proceedings for the protection of the interests of the
agency or subdivision; or 2) a demand on the proper authorities
would be useless. Id
. (citing Branch
, 233 N.C. at 626, 65 S.E.2d
The present plaintiffs claim to have standing under the
foregoing principles and also by virtue of a doctrine they refer to
as constitutional standing. By constitutional standing
plaintiffs refer to the axiom that, [i]f the governing authorities
[are] preparing to put public property to an unauthorized use,
citizens and taxpayers ha[ve] the right to seek equitable relief.
Wishart v. Lumberton
, 254 N.C. 94, 96, 118 S.E.2d 35, 36 (1961).
However, the cases that have applied this axiom have involved
action the government was preparing to take, which threatened the
rights of the suing taxpayers, and which could still be restrained.
See Lewis v. White
, 287 N.C. 625, 216 S.E.2d 134 (1975) (holding
that citizens could bring an action to prevent the building
commission from constructing an unauthorized building with tax
funds appropriated solely for the purpose of building an art
museum), superseded on other grounds by statute as recognized in
Corum v. University of North Carolina
, 330 N.C. 761, 786, 413
S.E.2d 276, 292 (1992); Shaw v. Asheville
, 269 N.C. 90, 96, 152
S.E.2d 139, 144 (1967) (holding that citizens and taxpayers of a
municipality had standing to bring a suit challenging the validity
of an agreement between a municipality and a private company which
authorized the company to, inter alia
, lay cables under municipal
streets and set cable poles because the taxpayers could incursignificant expense if the agreement was later adjudged void);
, 254 N.C. at 96, 118 S.E.2d at 36 (holding that a
municipality's citizens and taxpayers had standing to seek an
injunction prohibiting the municipality from unlawfully converting
a public park into a parking lot). Thus, these cases do not
authorize citizens to sue for a court declaration that past
government action, and unthreatened recurrences, are unlawful.
Neuse River Found., Inc.
, 155 N.C. App. at 114, 574 S.E.2d at 52
(noting that standing requires an actual or imminent injury that is
likely to be redressed by a favorable decision). To the contrary,
[i]t is no part of the function of the courts to issue [such]
advisory opinions. Wise v. Harrington Grove Cmty. Ass'n
, 357 N.C.
396, 408, 584 S.E.2d 731, 740, reh'g denied
, 357 N.C. 582, 588
S.E.2d 891-92 (2003).
The present plaintiffs are North Carolina taxpayers. However,
their complaint did not claim that they suffered injury from the
collection of the taxes which benefit the HTF. Rather, the
complaint challenged only certain withdrawals of taxpayer money
from the HTF, which affected the present plaintiffs in the same way
that it affected all citizens and taxpayers of this state. Thus,
plaintiffs lacked standing to bring their action directly as
injured taxpayers. See Texfi Industries
, 44 N.C. App. at 270, 261
S.E.2d at 23.
Moreover, although plaintiffs filed an affidavit alleging that
a demand for action by the appropriate authorities had been
refused, the trial court excluded this affidavit fromconsideration. Because plaintiffs have not appealed from this
decision of the trial court, the exclusion of the affidavit is
binding, and we must rule as if no evidence of demand and refusal
existed. See Kelly v. Kelly
, 167 N.C. App. 437, 443, 606 S.E.2d
364, 369 (2004) (noting that an order which is not appealed from is
'the law of the case') (citation omitted). Further, we are
unpersuaded that the record indicates that such a demand would have
been futile. Thus, plaintiffs failed to demonstrate that they had
derivative standing as taxpayers to sue on behalf of a public
agency or subdivision. See Guilford County Bd. of Comrs.
, 124 N.C.
App. at 747, 478 S.E.2d at 647.
The present plaintiffs are also North Carolina citizens, and
they contend that, as citizens, they had constitutional standing
to bring their action in superior court. However, during the
course of the litigation before the trial court, plaintiffs
abnegated their prayer for mandamus
. Thus, plaintiffs were no
longer seeking to have the allegedly wrongly withdrawn funds
replenished, and their remaining requests for relief sought only a
judicial declaration that the legislative and executive branches
should not have made the challenged withdrawals from the HTF and
should not make such withdrawals again. Notably, plaintiffs did
not allege that a recurrence of the alleged misconduct was
imminent. Therefore, plaintiffs' action as citizens was for an
advisory declaration, which they had no standing to seek. See
Neuse River Found., Inc.
, 155 N.C. App. at 114, 574 S.E.2d at 52
(requiring, as a basis for standing, that the relief sought by aplaintiff be likely to redress his claimed injury); see also Wise
357 N.C. at 408, 584 S.E.2d at 740 (noting that advisory court
opinions are improper).
Furthermore, although plaintiffs' complaint was purportedly
filed on behalf of affected holders of Highway Bonds, plaintiffs do
not own any of these bonds. Therefore, even assuming arguendo
a bondholder would have standing to sue over the HTF withdrawals at
issue in the instant case, the named plaintiffs could not
demonstrate that they were members of this class, whose repayment
was alleged to be jeopardized by the withdrawals. See Neuse River
, 155 N.C. App. at 114, 574 S.E.2d at 52 (requiring, as
a basis for standing, that a suing plaintiff suffer injury); Texfi
, 44 N.C. App. at 270, 261 S.E.2d at 23 (requiring, as a
basis for standing, that a suing taxpayer be a member of the class
that is prejudiced).
Thus, as of the hearing on the cross-motions for summary
judgment, the facts and circumstances of the instant case revealed
that the present plaintiffs lacked standing to pursue their action
against defendants. Accordingly, to the extent that the trial
court's order is a dismissal for lack of standing, it is affirmed.
This holding makes it unnecessary for us to address the remaining
issues briefed by the parties.
Judges TIMMONS-GOODSON and BRYANT concur.
*** Converted from WordPerfect ***