Appeals Court rules Ace Speedway can sue DHHS leader over COVID shutdown

N.C. Court of Appeals Judges Fred Gore, Jeff Carpenter, and Jefferson Griffin consider oral arguments. (Image from YouTube)

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  • Owners of an Alamance County speedway can move forward with a lawsuit against the state's top health official. The suit stems from a COVID-19 shutdown order.
  • Ace Speedway owners argue the shutdown deprived them of the right "to the enjoyment of the fruits of their own labor." They also contend the shutdown amounted to selective enforcement of a COVID-19 emergency order.
  • A unanimous decision from the N.C. Court of Appeals means the state Supreme Court faces no obligation to take the case.

A unanimous N.C. Court of Appeals panel has ruled that owners of an Alamance County racetrack shut down during the COVID-19 pandemic can move forward with a lawsuit against the state’s top health official.

Ace Speedway’s lawsuit argues that a shutdown order from Dr. Mandy Cohen, then serving as secretary of the N.C. Department of Health and Human Services, violated the speedway owners’ rights. The suit contends the shutdown infringed on speedway owners’ right to earn a living. The shutdown also represented selective enforcement of Gov. Roy Cooper’s COVID executive orders, according to the suit.

The suit is now known as Kinsley v. Ace Speedway Racing Ltd., with current DHHS Secretary Kody Kinsley replacing Cohen as the target of the speedway’s legal action.

“This case makes us consider the use of overwhelming power by the State against the individual liberties of its citizens and how that use of power may be challenged,” wrote Judge Jefferson Griffin.

“Ace’s counterclaims propose that the Governor’s orders were enforced upon them without justification and without equal protection of law,” Griffin added. “Ace’s counterclaims are constitutional claims alleging (1) executive orders issued by the Governor in response to the COVID-19 pandemic were an unlawful infringement on Ace’s right to earn a living as guaranteed by our Constitution’s fruits of labor clause, and (2) the Secretary’s enforcement actions against Ace under the executive order constituted unlawful selective enforcement.”

“We hold that Ace pled each of its constitutional claims sufficiently to survive the Secretary’s motion to dismiss.”

Ace held a series of auto races in May and June 2020, even after Cooper personally asked the Alamance County sheriff to urge the speedway to shut down. Cooper had issued a COVID-19 executive order blocking “mass gatherings” of more than 25 people.

Ace’s races drew at least 1,000 spectators and as many as 2,550 people. The speedway operated with COVID abatement measures adopted in consultation with local health officials.

Jason Turner, an Ace Speedway owner, also attracted media attention for his outspoken comments against the governor’s shutdown efforts.

Cohen issued an abatement order on June 8, 2020, and secured a court order forcing Ace to shut down its operations.

The speedway filed suit and continued its legal action, even after Cohen dropped her abatement efforts in September 2020, when Cooper had loosened some mass gathering restrictions. A trial judge ruled in January 2021 against the health secretary’s motion to dismiss Ace’s constitutional claims.

Griffin’s opinion focused attention on Ace’s argument that Cohen violated Article I, Section 1 of the N.C. Constitution. That section says North Carolinians’ “inalienable rights” include “the enjoyment of the fruits of their own labor.”

“[T]he addition of a right to the fruits of one’s labor to the North Carolina Constitution sought to increase the floor of protections granted by similar provisions in the United States federal constitution,” Griffin wrote. “Since then, our courts have construed North Carolina citizens’ right to the ‘fruits of their labor’ to be synonymous with their ‘right to earn a living’ in whatever occupation they desired.”

“The core principle behind the fruits of their labor clause is that government ‘“may not, under the guise of protecting the public interests, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations,”’” Griffin wrote.

“The intended purpose of the Governor’s order was not to regulate a particular occupation or business enterprise, but the direct and intended purpose of the Abatement Order was to cease the operation of a business,” the judge added. “It cannot be denied that the scope and breadth of the Abatement Order restricted or otherwise interfered with the lawful operation of a business serving the public.”

“We hold that Ace adequately pled that the Secretary, through [the] Abatement Order, deprived Ace of its constitutional right to the fruits of one’s own labor and, therefore, sovereign immunity cannot bar Ace’s claim,” Griffin wrote.

Ace also “sufficiently pleads a constitutional challenge” that Cohen violated speedway owners’ rights under Article I, Section 19 of the N.C. Constitution. It reads that “no person shall be denied the equal protection of the laws.”

“Ace effectively pled that it was among a class of ‘many speedways’ that similarly conducted races with fans in attendance during the period where such actions were banned,” Griffin explained. “Ace further pled that Governor Cooper and the Secretary ‘singled out’ Ace for enforcement by directing the Sheriff to take action against Ace and, when that failed, by issuing the Abatement Order against Ace alone.”

“Finally, Ace’s complaint pled its belief that it was singled out for enforcement in response to Defendant Turner’s statements to the press ‘and not because a true Imminent Hazard exist[ed,]’ as the Secretary asserted in the Abatement Order,” Griffin added. “These pleadings, taken as true, sufficiently allege bad faith enforcement of [Cooper’s executive order] against Ace alone.”

Kinsley could appeal to the N.C. Supreme Court. Because Judges Jeff Carpenter and Fred Gore agreed with Griffin and ruled unanimously, the state’s highest court faces no obligation to take the case.

Without an appeal, the case would head back to Superior Court for a trial on the merits of Ace Speedway’s claims.