All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
MARY WILLIAMS,
Plaintiff
v.
BLUE CROSS BLUE SHIELD OF NORTH CAROLINA,
Defendant
v.
ORANGE COUNTY, ORANGE COUNTY BOARD OF COMMISSIONERS, and ORANGE
COUNTY HUMAN RELATIONS COMMISSION,
Counterclaim Defendants
On discretionary review pursuant to N.C.G.S. § 7A-31,
prior to a determination by the Court of Appeals, of an order for
partial summary judgment entered 13 November 2000 and an amended
order for partial summary judgment entered 23 January 2001 by
Judge Steven A. Balog in Superior Court, Orange County. Heard in
the Supreme Court 11 December 2001.
Maupin Taylor & Ellis, P.A., by Thomas A. Farr,
M. Keith Kapp, Kevin W. Benedict, and Terence D.
Friedman, for defendant-appellee Blue Cross Blue Shield
of North Carolina.
Coleman, Gledhill & Hargrave, P.C., by Geoffrey E.
Gledhill and S. Sean Borhanian; and The Brough Law
Firm, by Michael B. Brough, for defendant-appellants
Orange County, Orange County Board of Commissioners,
and Orange County Human Relations Commission.
Office of the City Attorney, by Emanuel McGirt, for
City of Durham, amicus curiae.
Elliot, Pishko, Gelbin & Morgan, P.A., by Robert M.
Elliot and J. Griffin Morgan, on behalf of the North
Carolina Academy of Trial Lawyers; and Seth H. Jaffe,
for the American Civil Liberties Union of North
Carolina Legal Foundation, Inc., amici curiae.
Van Hoy, Reutlinger & Adams, by Philip Marshall Van Hoy
and Stephen John Dunn, on behalf of EmployersAssociation and Capital Associated Industries, Inc.,
amici curiae.
Edwards, Ballard, Clark, Barrett and Carlson, P.A., by
Kenneth P. Carlson, Jr., on behalf of North Carolina
Society of Human Resource Management, amicus curiae.
North Carolina Association of County Commissioners, by
C. Ronald Aycock, Counsel and Executive Director; and
S.C. Kitchen, Durham County Attorney, amicus curiae.
Office of the County Attorney, by E. Holt Moore, III,
for New Hanover County Human Relations Commission,
amicus curiae.
City of Asheville, by Robert W. Oast, Jr., City
Attorney, amicus curiae.
City of Durham, by Emanuel McGirt, City Attorney,
amicus curiae.
Moore & Van Allen, PLLC, by George M. Teague, on behalf
of North Carolina Citizens for Business and Industry;
and P. Andrew Ellen for the North Carolina Retail
Merchants Association, amici curiae.
EDMUNDS, Justice.
In this action, we are called upon to determine:
(1) whether the North Carolina General Assembly violated
Article II, Section 24 of the North Carolina Constitution by
ratifying enabling legislation permitting Orange County, the
Orange County Board of Commissioners, and the Orange County Human
Relations Commission (collectively, counterclaim defendants) to
enact and enforce the employment provisions of an
antidiscrimination ordinance entitled the Orange County Civil
Rights Ordinance (the Ordinance); and (2) whether counterclaim
defendants acted illegally in enacting and enforcing the
employment provisions of that Ordinance. For the reasons that
follow, we affirm the trial court's grant of partial summaryjudgment to defendant Blue Cross Blue Shield of North Carolina
(BCBSNC) and denial of summary judgment to counterclaim
defendants.
Pursuant to N.C.G.S. § 160A-492, the Orange County
Board of Commissioners (the Board of Commissioners) in 1987
established the Orange County Human Relations Commission (the
HRC). See N.C.G.S. § 160A-492 (2001) ([t]he governing body of
any city, town, or county is hereby authorized to undertake . . .
human relations, community action and manpower development
programs . . . [and] may appoint such human relations, community
action and manpower development committees or boards and
citizens' committees, as it may deem necessary in carrying out
such programs and activities). The Board of Commissioners'
mandate to the HRC was that it
(1) study and make recommendations concerning
problems in the field of human relationships;
(2) anticipate and discover practices and
customs most likely to create animosity and
unrest and to seek solutions to problems as
they arise; (3) make recommendations designed
to promote goodwill and harmony among groups
in the County irrespective of their race,
color, creed, religion, ancestry, national
origin, sex, affectional preference,
disability, age, marital status or status
with regard to public assistance; (4) monitor
complaints involving discrimination;
(5) address and attempt to remedy the
violence, tensions, polarization, and other
harm created through the practices of
discrimination, bias, hatred, and civil
inequality; and (6) promote harmonious
relations within the county through hearings
and due process of law . . . .
Orange County Civil Rights Ordinance, art. II, sec. 2.1(a), at 1
(effective 1 January 1995) [hereinafter Ordinance]. Thereafter, the HRC advertised and conducted public
hearings on discrimination in the areas of employment, housing,
and public accommodation and determined that discrimination in
those areas existed in Orange County on the basis of race, color,
religion, sex, national origin, age, disability, familial status,
marital status, sexual orientation, and veteran status. See
Ordinance, art. II, sec. 2.1(b), (c). As a result of these
findings, the Board of Commissioners requested that the North
Carolina General Assembly adopt enabling legislation allowing
Orange County to enact a comprehensive civil rights ordinance.
In response, the General Assembly ratified chapter 246
of the 1991 Session Laws on 10 June 1991, effective that same
day. Act of June 10, 1991, ch. 246, sec. 6, 1991 N.C. Sess. Laws
456, 460. This legislation was passed both to aid Orange County
in addressing the concerns raised by the HRC and to authorize
Orange County to create or designate a commission to assist in
the implementation of the Ordinance. Section 6 of chapter 246
authorized the Board of Commissioners to adopt an ordinance to be
referred to either as a Civil Rights Ordinance or a Human
Rights Ordinance. Id.
On 23 March 1993, the Board of Commissioners adopted a
resolution requesting that the Orange County delegation to the
General Assembly introduce a rewrite of the 1991 legislation to
provide for local administration of federal and [s]tate laws
prohibiting discrimination on the basis of race, color, religion,
sex, national origin, age, disability, marital status, familial
status, and veteran status. The General Assembly made therequested amendments by enacting section 14 of chapter 358 of the
1993 Session Laws, effective upon ratification on 16 July 1993.
Act of July 16, 1993, ch. 358, sec. 14, 1993 N.C. Sess. Laws
1158, 1169.
After the General Assembly passed this enabling
legislation, the Board of Commissioners, on 6 June 1994, adopted
the Ordinance. On 18 April 1995, the Board of Commissioners
adopted another resolution requesting from the General Assembly
an amendment to the enabling legislation authorizing the HRC to
serve as a deferral agency for cases deferred by the Equal
Employment Opportunity Commission (EEOC) and the Department of
Housing and Urban Development (HUD), pursuant to planned
worksharing agreements with those agencies. These agreements
would authorize transfer by the EEOC to Orange County of
employment discrimination complaints filed with it originating in
the county and transfer by HUD to Orange County of housing
discrimination complaints arising in the county. Accordingly,
the General Assembly enacted section 2, chapter 339 of the 1995
Session Laws, effective upon ratification on 28 June 1995. Act
of June 28, 1995, ch. 339, sec. 2, 1995 N.C. Sess. Laws 802, 803.
In its current form, the Ordinance is an
antidiscrimination law applicable only in Orange County and
administered by counterclaim defendants. The employment
provisions of the Ordinance provide in pertinent part:
(a) It is unlawful for an employer:
(1) To fail or refuse to hire or to
discharge any individual, or otherwise to
discriminate against any individual with
respect to that individual's compensation,terms, conditions, or privileges of
employment, because of such individual's
race, color, religion, sex, national origin,
age, disability, familial status, or veteran
status.
Ordinance, art. IV, sec. 4.1(a)(1), at 9 (effective 1 January
1996).
(See footnote 1)
The Ordinance is enforceable by a private cause of
action that permits those affected to recover injunctive relief,
back pay, and compensatory and punitive damages up to $300,000.
Ordinance, art. VIII, sec. 8.3.2, at 50-53; art. X, at 54-55.
Different sections of the Ordinance prohibit discrimination in
employment, housing, and public accommodations, as well as the
infliction of bodily injury or property destruction on account of
the factors listed above. The employment discrimination
provision of the Ordinance became effective 1 January 1996 and
applies to all employers engaged in an industry affecting
commerce who have fifteen or more employees in Orange County.
Ordinance, art. III, at 4. Specifically excepted employers
include the State of North Carolina and the United States. Id.
at 4-5. The Ordinance provides that when the HRC receives
individual complaints of employment discrimination, it may begin
its investigation by requesting a statement of the employer's
position regarding the allegations. Ordinance, art. VIII, sec.
8.1, at 39-42. HRC may also issue subpoenas to obtain documents
and materials from the employer. Id. After completing itsinvestigation, the HRC issues either a finding of cause to
believe discrimination occurred or a finding that reasonable
cause does not exist. Ordinance, art. VIII, sec. 8.2, at 42-46.
If the HRC finds cause to exist, attempts are made to
resolve the complaint by conference, conciliation, and/or
persuasion. Ordinance, art. VIII, sec. 8.1, at 42. If these
efforts fail, the HRC issues a right-to-sue letter, Ordinance,
art. VIII, sec. 8.2, at 45, allowing the complainant to litigate
the matter in the Superior Court, Orange County, within one year
of receipt of the letter, Ordinance, art. X, at 54. As an
alternative if cause is found to exist, the HRC itself can
instead choose to litigate the employment discrimination claim
before a state administrative law judge (ALJ). Ordinance, art.
VIII, sec. 8.2(j)(1), at 45. In such a case, the employer has no
opportunity to opt out of the administrative process and demand a
jury trial in state court. Ordinance, art. VIII, sec. 8.3.1(a),
at 46. Any decision by the ALJ is automatically reviewed by a
three-member panel of the HRC commissioners. Ordinance, art.
VIII, sec. 8.3.1(j)(1), at 48. A reviewing panel has the
discretion to review all aspects of the ALJ's findings, including
findings of fact, credibility determinations, and legal findings,
and may affirm, modify, or reverse the ALJ's recommended
decision. Id.
In the case at bar, plaintiff Mary Williams filed
claims with the HRC and the EEOC alleging discrimination on the
grounds that she had been forced to resign from her employment
with BCBSNC because of her age and sex, and also alleging thatBCBSNC had retaliated against her for filing the discrimination
claim. Following an investigation, the HRC found reasonable
cause to believe that BCBSNC had discriminated against plaintiff
based on her age and gender, and issued a right-to-sue letter.
Plaintiff filed the suit giving rise to the instant
appeal in Superior Court, Orange County, on 23 March 1999,
claiming that BCBSNC fired her because of her age and also in
retaliation for filing a claim of discrimination with the HRC and
the EEOC. Specifically, plaintiff alleged four causes of action:
(1) that BCBSNC wrongfully discharged plaintiff because of her
age, in violation of North Carolina public policy as set forth in
the Equal Employment Practices Act (EEPA), N.C.G.S. ch. 143, art.
49A (2001), and the Ordinance; (2) that BCBSNC wrongfully
discharged plaintiff because she filed a charge of age
discrimination with the HRC and the EEOC, in violation of North
Carolina public policy as set forth in the EEPA and the
Ordinance; (3) that BCBSNC discharged plaintiff because of her
age, in violation of the Ordinance; and (4) that BCBSNC
discharged plaintiff in retaliation for filing a complaint with
the HRC in violation of the Ordinance.
BCBSNC removed the suit to the United States District
Court for the Middle District of North Carolina, asserting that
plaintiff's claims raised substantial questions of federal law.
On 29 July 1999, the federal court remanded the case to Superior
Court, Orange County, holding that because plaintiff had chosen
to assert only state law claims, she was entitled to proceed in
state court. After the trial court on 1 November 1999 approved
BCBSNC's motion to add a counterclaim, BCBSNC filed its amended
answer and counterclaim. This new filing contained a declaratory
judgment action (denominated as the counterclaim), asserting that
the enabling legislation and the Ordinance violated Article II,
Section 24(1)(j) of the North Carolina Constitution, which
prohibits any local, private, or special act or resolution . . .
[r]egulating labor, trade, mining, or manufacturing. N.C.
Const. art. II, § 24(1)(j). On 31 July 2000, BCBSNC filed a
further amended answer and first amended counterclaim, adding a
claim that the Ordinance denied BCBSNC equal protection of the
law. Beginning on 6 November 2000, the trial court heard cross-
motions for summary judgment. BCBSNC's motion was based upon a
claim that the Ordinance's employment discrimination provisions
were unconstitutional, while counterclaim defendants' motion
argued that the Ordinance was constitutional in its entirety but
that, even if it were not, BCBSNC was precluded from attacking
the Ordinance based on the affirmative defenses of laches and the
statute of limitations.
After hearing arguments and reviewing the parties'
briefs, the trial court on 13 November 2000 entered an order
declaring the employment provisions of the Ordinance to be in
violation of Article II, Section 24 of the North Carolina
Constitution, and in violation of the equal protection guarantees
of the Fourteenth Amendment to the United States Constitution and
Article I, Section 19 of the North Carolina Constitution. The
trial court also enjoined counterclaim defendants from enforcingthe unlawful employment discrimination provisions of the
Ordinance as well as any civil rights investigations and civil
actions thereunder. Pursuant to the request of counterclaim
defendants, and with the consent of BCBSNC, the trial court on
23 January 2001 amended its order to certify its decision for
interlocutory appeal under Rule 54(b) of the North Carolina Rules
of Civil Procedure and section 1-277 of the North Carolina
General Statutes. N.C. R. Civ. P. 54(b); N.C.G.S. § 1-277
(2001). Counterclaim defendants filed notice of appeal on
19 February 2001. This Court allowed discretionary review on
19 July 2001, prior to determination by the Court of Appeals
pursuant to section 7A-31. N.C.G.S. § 7A-31 (2001).
As a preliminary matter, we observe that the only
issues before us pertain to the employment provisions of the
enabling legislation and the Ordinance. Because the parties had
no occasion to brief or argue the constitutionality of the
provisions of the enabling legislation and the Ordinance relating
to housing and public accommodation and because the following
analysis consequently focuses only on the employment provisions,
we express no opinion as to the legality of any aspect of either
the enabling legislation or the Ordinance unrelated to
employment.
We first consider whether the trial court erred in
concluding that BCBSNC's declaratory judgment action against
counterclaim defendants was not barred by the statute of
limitations. Summary judgment may be granted in a declaratory
judgment proceeding, N.C. Farm Bureau Mut. Ins. Co. v. Briley,127 N.C. App. 442, 444, 491 S.E.2d 656, 657 (1997), disc. rev.
denied, 347 N.C. 577, 500 S.E.2d 82 (1998), where the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that any party is
entitled to a judgment as a matter of law, N.C.G.S. § 1A-1, Rule
56(c) (2001). When the statute of limitations is properly
pleaded and the facts of the case are not disputed[,] resolution
of the question becomes a matter of law and summary judgment may
be appropriate. Marshburn v. Associated Indem. Corp., 84 N.C.
App. 365, 369, 353 S.E.2d 123, 126, disc. rev. denied, 319 N.C.
673, 356 S.E.2d 779 (1987).
Counterclaim defendants contend that summary judgment
should have been granted because the claims of BCBSNC are barred
by the statute of limitations. Their position is that the time
period for BCBSNC's filing of a constitutional challenge to the
Ordinance or the enabling legislation began to run on the date
the enabling legislation or the Ordinance became effective, which
was 28 June 1995 for the enabling legislation or 1 January 1996
for the Ordinance. Further, counterclaim defendants contend that
the applicable statute of limitations for BCBSNC's action is
three years based upon either N.C.G.S. § 1-52(2) or 1-52(5) and
that BCBSNC failed successfully to file suit within that period
because BCBSNC filed its counterclaim motion on 1 November 1999.
We disagree, and for the reasons that follow, we affirm the trial
court's granting of summary judgment in favor of BCBSNC as to
this issue. The general rule for claims other than malpractice is
that a cause of action accrues as soon as the right to institute
and maintain a suit arises. See N.C.G.S. § 1-15(a) (2001);
Thurston Motor Lines, Inc. v. General Motors Corp., 258 N.C. 323,
325, 128 S.E.2d 413, 415 (1962). However, this Court has also
recognized the continuing wrong or continuing violation
doctrine as an exception to the general rule. See Faulkenbury v.
Teachers' & State Employees' Ret. Sys. of N.C., 345 N.C. 683,
694-95, 483 S.E.2d 422, 429-30 (1997). When this doctrine
applies, a statute of limitations does not begin to run until the
violative act ceases. See Virginia Hosp. Ass'n. v. Baliles, 868
F.2d 653, 663 (4th Cir. 1989). A continuing violation is
occasioned by continual unlawful acts, not by continual ill
effects from an original violation. Ward v. Caulk, 650 F.2d
1144, 1147 (9th Cir. 1981). To determine whether BCBSNC suffers
from a continuing violation, we examine this case under a test
that considers [t]he particular policies of the statute of
limitations in question, as well as the nature of the wrongful
conduct and harm alleged, as set out in Cooper v. United States,
442 F.2d 908, 912 (7th Cir. 1971). See Faulkenbury v. Teachers'
& State Employees' Ret. Sys. of N.C., 108 N.C. App. 357, 368, 424
S.E.2d 420, 425 (utilizing the Cooper test to determine if a
continuing violation exists), aff'd per curiam, 335 N.C. 158, 436
S.E.2d 821 (1993); National Adver. Co. v. City of Raleigh, 947
F.2d 1158, 1167 (4th Cir. 1991) (same), cert. denied, 504 U.S.
931, 118 L. Ed. 2d 593 (1992). In particular, we must examine
the wrong alleged by BCBSNC to determine if the purportedviolation is the result of continual unlawful acts, each of
which restarts the running of the statute of limitations, or if
the alleged wrong is instead merely the continual ill effects
from an original violation. Ward v. Caulk, 650 F.2d at 1147.
Our review of the record satisfies us that the alleged
wrong here constitutes a continuing violation. To date, BCBSNC
has been the subject of at least two lawsuits as well as numerous
proceedings under the Ordinance. When the enabling legislation
and the Ordinance were first enacted, BCBSNC was just another
employer in Orange County to which these new laws applied; any
harm to BCBSNC was both prospective and speculative. The alleged
wrongs to BCBSNC became apparent only upon enforcement of the
Ordinance through the filing of lawsuits and proceedings against
BCBSNC. Thus, BCBSNC is not merely suffering the ill effects of
a single alleged original wrong that accrued when the enabling
legislation and the Ordinance were enacted. Instead, it has been
subjected to a number of alleged wrongs through the application
of the enabling legislation and the Ordinance. [I]f the same
alleged violation was committed at the time of each act, then the
limitations period begins anew with each violation . . . .
Perez v. Laredo Junior Coll., 706 F.2d 731, 733 (5th Cir. 1983),
cert. denied, 464 U.S. 1042, 79 L. Ed. 2d 172 (1984).
Counterclaim defendants cite several cases to support
their position that the alleged wrong occurred upon enactment of
the applicable laws and that any further wrong was no more than
the ill effects of an original violation. See Capital Outdoor
Adver., Inc. v. City of Raleigh, 337 N.C. 150, 164, 446 S.E.2d289, 297 (1994) (where owner of outdoor advertising company
challenged ordinance requiring amortization and ultimate removal
of nonconforming signs, limitation period began on effective date
of ordinance because [i]t was on that precise date that the
expected useful life of the plaintiffs' billboards was
foreshortened); National Adver. Co. v. City of Raleigh, 947 F.2d
1158 (where ordinance required that nonconforming signs be
removed within five and one-half years, limitations period began
to run when ordinance enacted because plaintiff advertiser was
immediately on notice that his signs would have to be taken down
at a time certain in the future); Rozar v. Mullis, 85 F.3d 556
(11th Cir. 1996) (where landfill placed in predominately African-
American neighborhood, two-year statute of limitations applied to
bar suit against county defendants because plaintiffs' injury
accrued when county selected the landfill site at a public
hearing, but did not bar suit against state defendants, who
became involved only during the later permitting process). We
believe that these cases are distinguishable from the case at
bar. In both Capital Outdoor Advertising and National
Advertising Company, the plaintiffs were provided notice at the
moment the ordinances were passed that they would suffer a
specific loss at a specific time. By contrast, BCBSNC had no
certainty that it would run afoul of the Ordinance until the
instant suit and companion suit were filed against it. Rozar
involved a taking, in that the value of the plaintiffs' property
would be diminished by the landfill. This argument
misapprehends the differences between a statute that effects ataking and a statute that inflicts some other kind of harm.
Levald, Inc. v. City of Palm Desert, 998 F.2d 680, 688 (9th Cir.
1993), cert. denied, 510 U.S. 1093, 127 L. Ed. 2d 217 (1994). In
takings cases, there is a single harm, measurable and
compensable when the statute is passed. Id.
Unlike the cases cited by counterclaim defendants, the
alleged wrong in the case at bar is continuing, or does not
occur until the statute is enforced -- in other words, until it
is applied. Id. According to BCBSNC, the suit brought by
plaintiff here against BCBSNC, and a companion case, were the
first two lawsuits brought against an employer pursuant to the
Ordinance. BCBSNC asserted a challenge to the constitutionality
of the Ordinance nine months after plaintiff's lawsuit was filed
and only four and a half months after this case was remanded from
the federal district court. Similarly, BCBSNC sought to
challenge the Ordinance eleven months after the companion lawsuit
was filed. Thus, BCBSNC's action in the case at bar was brought
well within any limitations period triggered by the suits and
proceedings brought against it.
These assignments of error are overruled.
We next address whether the trial court erred in
concluding that BCBSNC's declaratory judgment action against
counterclaim defendants was not barred by the equitable doctrine
of laches. Like the statute of limitations, laches may be raised
properly on a motion for summary judgment. See Taylor v. City of
Raleigh, 290 N.C. 608, 622, 227 S.E.2d 576, 584 (1976); Capps v.
City of Raleigh, 35 N.C. App. 290, 241 S.E.2d 527 (1978). In equity, where lapse of time has resulted
in some change in the condition of the
property or in the relations of the parties
which would make it unjust to permit the
prosecution of the claim, the doctrine of
laches will be applied. Hence, what delay
will constitute laches depends upon the facts
and circumstances of each case.
Teachey v. Gurley, 214 N.C. 288, 294, 199 S.E. 83, 88 (1938).
Our review of this issue involves a three-part analysis:
(1) Do the pleadings, affidavits and exhibits
show any dispute as to the facts upon which
[counterclaim] defendants rely to show laches
on the part of plaintiffs [technically,
defendants in this case]? (2) If not, do the
undisputed facts, if true, establish
plaintiffs' laches? (3) If so, is it
appropriate that [counterclaim] defendants'
motion for summary judgment, made under G.S.
1A-1, Rule 56(b), be granted?
Taylor v. City of Raleigh, 290 N.C. at 621, 227 S.E.2d at 584.
Here, counterclaim defendants contend that BCBSNC's
delay in filing a constitutional challenge -- almost five and a
half years after the Ordinance was adopted and eight and a half
years from the effective date of the enabling legislation -- has
caused a sufficient detrimental change in their position that
laches should act as a bar to suit. Counterclaim defendants
argue that BCBSNC's delay in bringing the challenge, when
considered along with the large amounts of money, time, and
administrative effort expended in the creation and enforcement of
the enabling legislation and the Ordinance, has caused it
materially to change its position such that it would be
prejudicial and unfair to allow BCBSNC's challenge to continue.
As detailed above, BCBSNC indicates in its brief that
the suit at bar and the companion case were the first twolawsuits brought against an employer pursuant to the Ordinance.
We have held 'the mere passage or lapse of time is insufficient
to support a finding of laches; for the doctrine of laches to be
sustained, the delay must be shown to be unreasonable and must
have worked to the disadvantage, injury or prejudice of the
person seeking to invoke it.' Id. at 622-23, 227 S.E.2d at
584-85 (quoting 22 Am. Jur. 2d Declaratory Judgments § 78
(1965)). We do not discount the expense and good-faith effort
expended by Orange County. Nevertheless, the record shows that
BCBSNC moved expeditiously once these suits were filed against
it. Accordingly, we believe that there was no unreasonable delay
in bringing this challenge.
These assignments of error are overruled.
We next consider whether the trial court erred in its
holding that the employment discrimination provisions of the
Ordinance and its enabling legislation violated Article II,
Section 24 of the North Carolina Constitution. This section of
the Constitution, entitled Limitations on local, private, and
special legislation, provides in pertinent part:
(1) Prohibited subjects. The General
Assembly shall not enact any local, private,
or special act or resolution:
. . . .
(j) Regulating labor, trade, mining, or
manufacturing;
. . . .
(3) Prohibited acts void. Any local,
private, or special act or resolution enacted
in violation of the provisions of this
Section shall be void.
N.C. Const. art. II, § 24(1)(j), (3).
Counterclaim defendants argue that neither the enabling
legislation nor the Ordinance is a local act under Article II,
Section 24. Further, counterclaim defendants contend that even
if this Court determines that the enabling legislation and the
Ordinance are local acts, they are not prohibited local acts
because they seek to regulate discrimination (which is not a
forbidden purpose) rather than labor or trade.
Our review of counterclaim defendants' argument is
two-fold. First, we must determine whether the enabling
legislation and the Ordinance are local acts as contended by
BCBSNC or whether they are general laws as contended by
counterclaim defendants. Second, if they are found to be local
acts, we must determine whether the enabling legislation and the
Ordinance regulate labor or trade. As we make this
determination, we are aware that:
It is well settled in this State that
the courts have the power, and it is their
duty in proper cases, to declare an act of
the General Assembly unconstitutional -- but
it must be plainly and clearly the case. If
there is any reasonable doubt, it will be
resolved in favor of the lawful exercise of
their powers by the representatives of the
people.
Glenn v. Board of Educ., 210 N.C. 525, 529-30, 187 S.E. 781, 784
(1936).
A statute is either 'general' or 'local'; there is no
middle ground. High Point Surplus Co. v. Pleasants, 264 N.C.
650, 656, 142 S.E.2d 697, 702 (1965). We have observed that no
exact rule or formula capable of constant application can bedevised for determining in every case whether a law is local,
private or special or whether general. McIntyre v. Clarkson,
254 N.C. 510, 517, 119 S.E.2d 888, 893 (1961). Consequently,
since the enactment of Article II, Section 24 (originally
Article II, Section 29, see Smith v. County of Mecklenburg, 280
N.C. 497, 506, 187 S.E.2d 67, 73 (1972)), we have set out
alternative methods for determining whether a law is general or
local. See City of New Bern v. New Bern-Craven Cty. Bd. of
Educ., 338 N.C. 430, 435-36, 450 S.E.2d 735, 738-39 (1994). In
earlier decisions, we held that if the legislation impacted a
majority of the counties, the law was general. See State v.
Dixon, 215 N.C. 161, 165, 1 S.E.2d 521, 523 (1939). Later, we
established what has become known as the reasonable
classification test. See McIntyre v. Clarkson, 254 N.C. at
518-19, 119 S.E.2d at 894-95. This test considers how the law in
question classifies the persons or places to which it applies.
Pursuant to this test, the [c]lassification must be reasonable
and . . . must be based on a reasonable and tangible distinction
and operate the same on all parts of the state under the same
conditions and circumstances. Id. at 519, 119 S.E.2d at 894. A
law is deemed local
where, by force of an inherent limitation, it
arbitrarily separates some places from others
upon which, but for such limitation, it would
operate, where it embraces less than the
entire class of places to which such
legislation would be necessary or appropriate
having regard to the purpose for which the
legislation was designed, and where the
classification does not rest on circumstances
distinguishing the places included from those
excluded.
Id. at 518, 119 S.E.2d at 894. On the other hand,
the constitutional prohibition against local
acts simply commands that when legislating in
certain specified fields the General Assembly
must make rational distinctions among units
of local government which are reasonably
related to the purpose of the legislation.
A law is general if any rational basis
reasonably related to the objective of the
legislation can be identified which justifies
the separation of units of local government
into included and excluded categories.
Adams v. N.C. Dep't. of Natural & Econ. Res., 295 N.C. 683, 691,
249 S.E.2d 402, 407 (1978) (quoting Joseph S. Ferrell, Local
Legislation in the North Carolina General Assembly, 45 N.C. L.
Rev. 340, 391 (1967)).
In Town of Emerald Isle v. State, 320 N.C. 640, 360
S.E.2d 756 (1987), we departed from the reasonable classification
test enunciated in Adams where the act in question applied only
to a site-specific portion of land on a particular beach.
Instead, we applied a test that examined the extent to which the
act in question affects the general public interests and
concerns, id. at 651, 360 S.E.2d at 763, because the reasonable
classification test was ill-suited to the question presented in
[that] case, since by definition a particular public pedestrian
beach access facility must rest in but one location, id. at
650, 360 S.E.2d at 762.
Our review of the various analyses for determining
whether an act is local or general satisfies us that the
reasonable classification test is most appropriate to the case at
bar. While, in this case, the enabling legislation and the
Ordinance allowing for the creation of a comprehensive civilrights ordinance apply only to Orange County, this legislation is
not site-specific as in Emerald Isle because [s]uch a legislated
change could be effected as easily in [Orange County] as in any
other [county] in the state. City of New Bern v. New Bern-
Craven Cty. Bd. of Educ., 338 N.C. at 436, 450 S.E.2d at 739.
Consequently, the Emerald Isle analysis is inapplicable to this
case.
Under a reasonable classification analysis, the
distinguishing factors between a valid general law and a
prohibited local act are the related elements of reasonable
classification and uniform application. Adams v. N.C. Dep't. of
Natural & Econ. Res., 295 N.C. at 690, 249 S.E.2d at 407.
Legislative classification of conditions, persons, places, or
things is reasonable when it is based on [a] rational difference
of situation or condition. High Point Surplus Co. v. Pleasants,
264 N.C. at 656, 142 S.E.2d at 702.
Based upon our earlier decisions, we must determine in
this case whether the legislature had a rational basis to justify
singling out Orange County through the enabling legislation,
thereby allowing this one county to create its own civil rights
ordinance enforcing particular employment rights of Orange County
citizens. Phrased differently, we must determine whether the
General Assembly should have granted Orange County the power,
rationally based upon some situation unique to that county, to
create and enforce additional employment rights beyond those
accorded any other county in this state. Based upon our thorough
review of the record, we determine that neither the enablinglegislation passed by the legislature nor the Ordinance suggests
any rational basis justifying treatment of Orange County
differently from all other North Carolina counties as to those
rights.
A history of the promulgation of Article II, Section 24
reveals:
The organic law of the State was
originally drafted and promulgated by a
convention which met at Halifax in December,
1776. During the ensuing 140 years, the
Legislature of North Carolina possessed
virtually unlimited constitutional power to
enact local, private, and special statutes.
This legislative power was exercised with
much liberality, and produced a plethora of
local, private, and special enactments. As
an inevitable consequence, the law of the
State was frequently one thing in one
locality, and quite different things in other
localities. To minimize the resultant
confusion, the people of North Carolina
amended their Constitution at the general
election of 1916 so as to deprive their
Legislature of the power to enact local,
private, or special acts or resolutions
relating to many of the most common subjects
of legislation.
. . . .
In thus amending their organic law, the
people were motivated by the desire that the
General Assembly should legislate for North
Carolina in respect to the subjects specified
as a single united commonwealth rather than
as a conglomeration of innumerable discordant
communities. To prevent this laudable desire
from degenerating into a mere pious hope,
they decreed in emphatic and express terms
that any local, private, or special act or
resolution passed in violation of the
provisions of this section shall be void.
Idol v. Street, 233 N.C. 730, 732-33, 65 S.E.2d 313, 314-15
(1951) (quoting N.C. Const. of 1868, art. II, sec. 29 (1917) (now
Article II, Section 24, as previously noted); see also John V.Orth, The North Carolina State Constitution: A Reference Guide
89-90, 166-67 (1993).
A brief comparison of the Ordinance with the employment
discrimination law applicable across North Carolina reveals that
the enabling legislation and the Ordinance generate different law
in one locality from that applicable to other localities within
the state. First, the Ordinance creates in Orange County two
additional protected categories of employment discrimination
apparently found nowhere else in the state.
(See footnote 2)
The Ordinance
prevents Orange County employers with fifteen or more employees
from discriminating because of familial status or veteran
status, Ordinance, art. IV, sec. 4.1(a)(1), at 9,
classifications that are not found in either the EEPA or section
2000e-2 of title 42 of the United States Code, 42 U.S.C. §
2000e-2 (2000) (Unlawful employment practices). Second, a
method for enforcing employment discrimination suits has been
created in Orange County that exists nowhere else in North
Carolina. Thus, in a single dispute involving one employee, an
employer in Orange County may be investigated and sued by either
the HRC or the EEOC.
(See footnote 3)
In other words, as acknowledged indeposition by the Director of the Orange County Department of
Human Rights and Relations, such an Orange County employer can be
compelled to respond to two different government investigations
and suits. By contrast, an employer elsewhere in North Carolina
may be subject to investigation by the EEOC or the North Carolina
Department of Administration's Human Relations Commission, see
N.C.G.S. § 143-422.3, but can only be sued through a federal
claim brought by the EEOC.
Additionally, an employee working in Orange County may
benefit from a longer statute of limitations for the raising of
administrative claims than employees working in other counties.
Employers in any county other than Orange may raise a statute of
limitations defense if an employee fails to file a complaint with
the EEOC within 180 days of the alleged unlawful act. See 42
U.S.C. § 2000e-5(e) (2000). In Orange County, however, by virtue
of the Ordinance, an employer may not raise a statute of
limitations defense unless the charge was filed after 300 days of
the alleged act. See id.; see also 29 U.S.C. § 626(d)(2) (2000).
Similarly, the statute of limitations period for the
filing of discrimination lawsuits differs between Orange County
employers and employers elsewhere. A North Carolina employer not
in Orange County may assert a statute of limitations defense
against an employee who fails to file suit within ninety days of
receiving a right-to-sue letter from the EEOC. See 42 U.S.C.
§ 2000e-5(f)(1); 29 U.S.C. § 626(e). In contrast, while the
limitations period for EEOC complaints remains the same, an
employer in Orange County may not assert a statute of limitationsdefense for discrimination claims filed under the Ordinance
unless the employee fails to file suit one year after receiving a
right-to-sue notice from the HRC. Ordinance, art. X, at 54.
In addition, there is no evidence in the record to
suggest that employment practices in Orange County differ in any
significant way from the employment practices in other North
Carolina counties. Consequently, we are unable to conclude that
conditions in Orange County alone are suspect to such an extent
that the legislature legally could create a separate
classification to address employment discrimination in that
county only. See City of New Bern v. New Bern-Craven Cty. Bd. of
Educ., 338 N.C. at 438, 450 S.E.2d at 740 (no rational basis to
separate New Bern from other cities for special legislative
attention regarding the designation of an appropriate inspection
department); Smith v. County of Mecklenburg, 280 N.C. at 507-08,
187 S.E.2d at 74 (no particular features in Mecklenburg and Moore
Counties that differentiate them from other counties with
reference to the right of their citizens to decide whether to
have liquor by the drink); High Point Surplus Co. v. Pleasants,
264 N.C. at 657, 142 S.E.2d at 703 (no reasonable distinction to
demonstrate that a Sunday observance law is more necessary for
the welfare of Wake County than other counties); Treasure City of
Fayetteville, Inc. v. Clark, 261 N.C. 130, 134-35, 134 S.E.2d 97,
100-01 (1964) (no reasonable basis to exempt certain counties
from Sunday closing statute than other counties); McIntyre v.
Clarkson, 254 N.C. at 524-25, 119 S.E.2d at 898 (no reasonable
and distinctive feature to allow certain counties to havedifferent laws regarding the appointment of justices of the
peace). Based on all the considerations set out above, we hold
that the employment provisions of the enabling legislation and
the Ordinance are local laws.
Counterclaim defendants contend that the creation and
implementation of the Ordinance was the fruit of countless hours
of thorough research regarding discrimination in Orange County.
We do not doubt the difficult and well-intentioned labor that has
been expended in the planning and implementation of this
employment rights program, nor do we question the commendable
motives behind Orange County's effort to expunge as many vestiges
of discrimination as is humanly possible. Our role, however, is
to determine whether the method employed by Orange County
comports with the Constitution of North Carolina. Any local,
private, or special act or resolution enacted in violation of
Article II, Section 24 shall be void, no matter how praiseworthy
or wise [its provisions] may be. Idol v. Street, 233 N.C. at
733, 65 S.E.2d at 315.
It was the purpose of [Article II, Section
24] to free the General Assembly from the
enormous amount of petty detail which had
been occupying its attention, to enable it to
devote more time and attention to general
legislation of statewide interest and
concern, to strengthen local self-government
by providing for the delegation of local
matters by general laws to local authorities,
and to require uniform and coordinated action
under general laws on matters related to the
welfare of the whole State.
High Point Surplus Co. v. Pleasants, 264 N.C. at 656, 142 S.E.2d
at 702. Therefore, if the General Assembly should undertake to
address employment discrimination by means of a state statute,Article II, Section 24 requires that it enact either a statewide
law applicable to employers and their employees regardless of
where they reside within the state or a general law that makes
reasonable classifications based upon rational differences of
circumstances. That process was not followed here. Upholding
the particularized laws in this case could lead to a
balkanization of the state's employment discrimination laws,
creating a patchwork of standards varying from county to county.
The end result would be the conglomeration of innumerable
discordant communities that Article II, Section 24 was enacted
to avoid. Id. at 732, 65 S.E.2d at 315.
Having determined that the enabling legislation and the
Ordinance are local laws, we next must consider whether they
regulate labor or trade. Previously, this Court has adopted the
definition of to regulate as 'to govern or direct according to
rule; . . . to bring under the control of law or constituted
authority.' State v. Gulledge, 208 N.C. 204, 208, 179 S.E. 883,
886 (1935) (quoting Webster's New International Dictionary 2099
(2d ed. 1935)), quoted in Cheape v. Town of Chapel Hill, 320 N.C.
549, 559, 359 S.E.2d 792, 798 (1987). Labor has been defined
as compensated employment, State v. Chestnutt, 241 N.C. 401,
403, 85 S.E.2d 297, 299 (1955), and trade has been defined as
a business venture for profit and includes any employment or
business embarked in for gain or profit, High Point Surplus Co.
v. Pleasants, 264 N.C. at 655-56, 142 S.E.2d at 702. After
reviewing the record, we believe the enabling legislation and the
Ordinance regulate labor in Orange County. As noted above, counterclaim defendants contend that
the acts seek only to regulate discrimination, not labor or
trade. However, the record demonstrates that while the intent of
the enabling legislation and the Ordinance is to prohibit
discrimination in the workplace, the effect of these enactments
is to govern the labor practices of person[s] engaged in an
industry affecting commerce who has 15 or more employees in
Orange County. Numerous aspects of the employer/employee
relationship fall within the ambit of the Ordinance, from hiring
through resignation, retirement, or termination. The Ordinance
requires covered employers to conduct their internal practices
pursuant to the requirements of the Ordinance or face the
possibility of civil suit by either an employee or the HRC. By
seeking to curb unlawful discrimination by regulating covered
employers, the enabling legislation and the Ordinance have the
practical effect of regulating labor, as forbidden by Article II,
Section 24.
In their briefs and at oral argument, the parties
discussed the enabling legislation and the Ordinance in terms of
trade. Although our conclusion that the acts regulate labor is
dispositive as to this issue, we believe that they regulate trade
as well. Most of the employers affected by the Ordinance are
businesses operated for gain or profit. Regulation of these
employers has the practical effect of regulating trade. See
Smith v. County of Mecklenburg, 280 N.C. at 509, 187 S.E.2d at 75
(statute authorizing an election in Mecklenburg County to
determine whether liquor by the drink could be sold under rulesand regulations created by the local county board was determined
to be a regulation of trade); High Point Surplus Co. v.
Pleasants, 264 N.C. at 656-57, 142 S.E.2d at 702-03 (local
ordinance and statute that excepted forty-eight counties from its
operation of establishing Sunday sales laws was determined to be
a regulation of trade); Orange Speedway, Inc. v. Clayton, 247
N.C. 528, 533, 101 S.E.2d 406, 410 (1958) (statute that forbade
the holding of motorcycle or automobile races on Sunday in Orange
County was determined to be a regulation of trade).
Counterclaim defendants also argue that the enabling
legislation does not directly regulate trade or labor because
the legislation merely gives Orange County the option of adopting
an employment discrimination ordinance. Therefore, counterclaim
defendants claim that permissive legislation, such as the
enabling legislation, does not violate Article II, Section 24 in
this case. Even though we have concluded that the enabling
legislation and the Ordinance regulate labor, we address this
argument because its validity is not dependent on the purpose for
which the local law was passed. In other words, if the
legislation as passed is valid because it is permissive, it
does not matter that the purpose of the act is to regulate labor
as opposed to trade.
In High Point Surplus Company, this Court determined
that legislation enabling fifty-two counties to prohibit sales on
Sunday while excepting the remaining forty-eight counties was an
unconstitutional local law regulating trade. High Point Surplus
Co. v. Pleasants, 264 N.C. at 656-57, 142 S.E.2d at 702-03. Thelegislation did not mandate that the fifty-two counties prohibit
sales, but instead enabled the local board of commissioners of
these fifty-two counties to make such determinations applicable
to the incorporated towns and cities within the counties, so long
as each town's or city's governing body by resolution agreed to
such regulation. Id. at 653-54, 142 S.E.2d at 700. The
defendant-appellees in High Point Surplus Company sought to
distinguish the Sunday sales legislation from our decision in
Treasure City of Fayetteville, Inc. v. Clark, 261 N.C. 130, 134
S.E.2d 97, by pointing out that the statute in Treasure City
involved a mandatory Sunday closing law, whereas [this statute]
is permissive and takes effect only when invoked by action of the
county commissioners of an included county. High Point Surplus
Co. v. Pleasants, 264 N.C. at 657, 142 S.E.2d at 703. We were
unpersuaded by this argument because [a] statute's validity must
be judged not by what has actually been done under it but by what
is possible under it. Id.; see also State v. Smith, 265 N.C.
173, 143 S.E.2d 293 (1965) (statute authorizing the Forsyth
County Board of Commissioners, after adoption by resolution, to
regulate the operation of dance clubs or pool halls near a church
or school held to be unconstitutional local act regulating
trade); McIntyre v. Clarkson, 254 N.C. 510, 119 S.E.2d 888
(permissive statute that enables county commissioners, upon
approval by county resolution, to determine the number of
justices of the peace to be appointed held to be unconstitutional
local and special law); Food Fair, Inc. v. City of Henderson, 17
N.C. App. 335, 194 S.E.2d 213 (1973) (permissive statute thatauthorized the governing bodies of three counties to refuse to
issue license for the sale of wine within corporate limits held
to be an unconstitutional local act regulating trade).
Accordingly, counterclaim defendants' argument that the
purportedly permissive nature of the enabling legislation renders
it valid is unpersuasive. We hold that this legislation, by
giving the power to Orange County to enact the employment
legislation, is invalid, whether or not Orange County had chosen
to act on that power.
Finally, counterclaim defendants argue that, even if
the enabling legislation is unconstitutional, Orange County
possesses the inherent authority to pass the employment
discrimination Ordinance at bar. They cite section 153A-121(a),
which gives a county the power to enact ordinances that define,
regulate, prohibit, or abate acts, omissions, or conditions
detrimental to the health, safety, or welfare of its citizens and
the peace and dignity of the county, N.C.G.S. § 153A-121(a), and
section 160A-174, which provides that [t]he fact that a State or
federal law, standing alone, makes a given act, omission, or
condition unlawful shall not preclude city ordinances requiring a
higher standard of conduct or condition, N.C.G.S. § 160A-174
(2001).
(See footnote 4)
However, under the Ordinance, a citizen is given
subpoena power and the right to sue, even in the absence offinding of cause by the HRC. Under the Ordinance, the citizen
may seek an injunction against an employer and may recover back
pay and compensatory and punitive damages. By creating a civil
relationship and concomitant private cause of action by one
citizen against another, the Ordinance goes far beyond merely
requiring a higher standard of conduct or condition. Such a
new and independent framework for litigation substantially
exceeds the leeway permitted to individual counties by these
statutes. Consequently, we are satisfied that Orange County's
employment discrimination Ordinance is not saved by these
statutory provisions.
In this analysis, as before, we are addressing only the
employment discrimination provisions of the Ordinance. Aspects
of the Ordinance dealing with housing and public accommodation,
including such matters as any enforcement mechanisms and remedies
available under those portions of the Ordinance, are not before
us, and we express no opinion as to whether Orange County
possessed inherent authority to address these areas.
These assignments of error are overruled.
Because we hold that the enabling legislation and the
Ordinance violate Article II, Section 24 of the North Carolina
Constitution, we need not address the additional assignments of
error as to whether the acts are violative of equal protection
under the federal and state Constitutions. Based upon the
foregoing, we hold that the trial court did not err in concluding
that the enabling legislation and the Ordinance pertaining to
employment discrimination are unconstitutional acts. AFFIRMED.
Justice MARTIN and Justice BRADY did not participate in
the consideration or decision of this case.
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