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WidenI77 v. North Carolina DepArtment of Transportation

Court of Appeals of North Carolina

May 2, 2017

WIDENI77, Plaintiff,
v.
NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, and I-77 MOBILITY PARTNERS LLC, and STATE OF NORTH CAROLINA, Defendants.

          Heard in the Court of Appeals 8 February 2017.

         Appeal by plaintiff from order entered 24 February 2016 by Judge W. Osmond Smith III in Mecklenburg County No. 15 CVS 1076 Superior Court.

          Arnold & Smith, PLLC, by Paul A. Tharp and Matthew R. Arnold, for plaintiff.

          Attorney General Joshua H. Stein, by Special Deputy Attorney General Scott T. Slusser, for the North Carolina Department of Transportation and the State of North Carolina.

          Gibson, Dunn & Crutcher LLP, by Mitchell A. Karlan and Jerilin Buzzetta, and Parker Poe Adams & Bernstein LLP, by Michael G. Adams and Morgan H. Rogers, for I-77 Mobility Partners LLC.

          CALABRIA, Judge.

         WidenI77 ("plaintiff") appeals from an order granting summary judgment in favor of the North Carolina Department of Transportation ("NCDOT"), I-77 Mobility Partners LLC ("Mobility"), and the State of North Carolina ("State") (collectively referred to as "defendants") and dismissing plaintiff's claims with prejudice. For the reasons stated herein, we affirm the order of the trial court.

         I. Background

         On 26 June 2014, NCDOT and Mobility, a Delaware limited liability company, entered into a comprehensive agreement (the "Comprehensive Agreement") for the I-77 HOT Lanes Project (the "Project"). The I-77 corridor is "one of the most congested corridors in the [S]tate" and the Project offered a "comprehensive congestion management solution for approximately [twenty-six] miles of the I-77 corridor through the use of HOV3 policy and managed lanes and supports future expansion of transit." The Comprehensive Agreement was a product of the State's "desires to facilitate private sector investment and participation in the development of the State's transportation system via public-private partnership agreements[]" pursuant to N.C. Gen. Stat. § 136-18(39) et seq. ("the P3 Statute").

         The P3 Statute provides, in pertinent part, that the NCDOT is vested with the power to

enter into partnership agreements with private entities, and authorized political subdivisions to finance, by tolls, contracts, and other financing methods authorized by law, the cost of acquiring, constructing, equipping, maintaining, and operating transportation infrastructure in this State, and to plan, design, develop, acquire, construct, equip, maintain, and operate transportation infrastructure in this State.

N.C. Gen. Stat. § 136-18(39) (2015).

         Through the Comprehensive Agreement, NCDOT granted Mobility "the exclusive right, and [Mobility] accepts the obligation, to finance, develop, design, construct, operate and maintain the Project[.]" This included the exclusive right to impose tolls and incidental charges upon the users of the High Occupancy Toll ("HOT") lanes; to establish, modify, and adjust the rate of such tolls and incidental charges in accordance with law; and to enforce and collect the tolls and incidental charges from the users of the HOT lanes in accordance with the terms and conditions of the Comprehensive Agreement.

         On 20 January 2015, plaintiff filed a "Complaint for Declaratory Judgment and Preliminary and Permanent Injunctive Relief." Plaintiff sought a declaration as to the constitutionality of the P3 Statute and the Comprehensive Agreement between the NCDOT and Mobility. Plaintiff's arguments included the following, inter alia: the General Assembly unconstitutionally delegated authority to the NCDOT to set toll rates without adequate standards and safeguards for which to exercise that power, to contract with Mobility and allow an unlimited rate of return on investment, and to contract with Mobility and allow the NCDOT and the State to compensate Mobility for its tax liabilities; violation of taxing power; violation of the public purpose doctrine; violation of due process; contrary to public policy; lack of authority; illegal contract; and motion for preliminary and permanent injunction.

         On 9 March 2015, the trial court entered an order finding that plaintiff "ha[d] not shown a sufficient likelihood of success on the merits to justify granting a preliminary injunction" and denying plaintiff's motion for a preliminary injunction.

         On 15 June 2015, Mobility filed a motion for summary judgment. On 19 June 2015, the State and the NCDOT filed a motion for summary judgment. On 13 November 2015, plaintiff filed a motion for summary judgment.

         On 24 February 2016, the trial court entered an order concluding as follows:

4. As to the Motions for Summary Judgment filed by each party, it should be noted that it is not within the province, function or duty of the Court to determine the desirability or wisdom of the legislation or the contract at issue. These policy decisions are within the purview of the legislature and the North Carolina Department of Transportation. The subject legislation is not unconstitutional as applied, nor is the contract unlawful.
5. As to the Motions for Summary Judgment filed by each party, there is no genuine issue as to any material fact, that Defendants are entitled to a judgment as a matter of law, and that Plaintiff is not entitled to judgment as a matter of law.

         Accordingly, the trial court granted defendants' motions for summary judgment and denied plaintiff's motion for summary judgment. Plaintiff's claims were dismissed with prejudice.

         On 22 March 2016, plaintiff filed notice of appeal.

         II. Standard of Review

         "Our standard of review of an appeal from summary judgment is de novo[.]" In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (citation omitted). "In ruling on a motion for summary judgment the evidence is viewed in the light most favorable to the non-moving party." Hinson v. Hinson, 80 N.C.App. 561, 563, 343 S.E.2d 266, 268 (1986) (citation omitted). Rule 56 of the North Carolina Rules of Civil Procedure provides that summary judgment shall be granted "if 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. Gen. Stat. § 1A-1, Rule 56(c) (2015).

The showing required for summary judgment may be accomplished by proving an essential element of the opposing party's claim does not exist, cannot be proven at trial, or would be barred by an affirmative defense . . . or by showing through discovery that the opposing party cannot produce evidence to support an essential element of her claim[.]

Dobson v. Harris, 352 N.C. 77, 83, 530 S.E.2d 829, 835 (2000).

         III. Discussion

         On appeal, plaintiff argues that the trial court erred by: (A) concluding that the North Carolina General Assembly's delegation of power to the NCDOT and NCDOT's arrangement with Mobility did not constitute an unconstitutional delegation of power; (B) concluding that the expenditure by the NCDOT and the State served a public purpose and was constitutional under Article V, Section 2(1) of the North Carolina Constitution; (C) concluding that the Comprehensive Agreement did not violate the Turnpike Statute; and (D) concluding that the North Carolina General Assembly did not unconstitutionally delegate its authority to tax to the NCDOT in violation of Article I, Section 8 and Article II, Section 23 of the North Carolina Constitution and the Due Process Clause of the United States Constitution. We address each argument in turn.

         A. Delegation of Power

         Plaintiff argues that the trial court erred by concluding that the General Assembly's delegation of power to the NCDOT and NCDOT's arrangement with Mobility did not constitute an unconstitutional delegation of power. Specifically, plaintiff contends that the General Assembly's delegation of power pursuant to the P3 Statute "features an absolute, unfettered, unlimited, unilateral and therefore unconstitutional delegation of authority to an agency and private company." Plaintiff maintains that the P3 Statute grants unto Mobility the absolute authority to set toll rates without any meaningful input or control by the NCDOT or General Assembly. We are not convinced by plaintiff's arguments.

         "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." McIntyre v. Clarkson, 254 N.C. 510, 515, 119 S.E.2d 888, 892 (1961) (citation omitted). "In passing upon the constitutionality of a legislative act it is not for this Court to judge its wisdom and expediency. These matters are the province of the General Assembly. Rather, it is the Court's duty to determine whether the legislative act in question exceeds constitutional limitation or prohibition." Adams v. N.C. Dep't of Natural & Econ. Res., 295 N.C. 683, 690, 249 S.E.2d 402, 406 (1978).

         In our determination of whether the P3 Statute violates the rule that the General Assembly cannot delegate its power to legislate, we are directed by Adams.

Although this Court noted in Adams that the legislature may not abdicate its power to make laws [or] delegate its supreme legislative power to any . . . coordinate branch or to any agency which it may create, we also concluded that strict adherence to ideal notions of the non-delegation doctrine would unduly hamper the ...

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