While much of North Carolina has shut down for business, the N.C. Supreme Court continues to issue opinions. Its lone Republican has found more opportunities to distinguish his legal views from those of his colleagues.
Justice Paul Newby’s divergence from the rest of the seven-member court could have an impact this fall. Voters will make choices then about three Supreme Court seats, including the top job of chief justice.
Newby dissented in five of 17 cases decided earlier this month. Some involved issues with more than just technical legal significance. Two, in particular, should interest taxpayers.
In New Hanover Cty. Bd. of Educ. v. Stein, the court ruled 6-1 that N.C. Attorney General Josh Stein could continue to oversee an environmental grant program funded by Smithfield Foods. The money flows from a $50 million deal Smithfield made in 2000 with then-A.G. Mike Easley. Critics have labeled the grant program a “slush fund.”
The school board representing southeastern North Carolina’s largest district had argued in court that the $50 million resulted from a legal settlement between Smithfield and the attorney general. Money linked to the settlement represented a penalty against Smithfield. State law requires legal penalties to head to N.C. schools.
Stein and those responsible for the 20-year-old deal countered that Smithfield had made a gift to the state. That gift had no bearing on legal complaints involving the company’s hog farm operations in North Carolina.
Six members of the N.C. Supreme Court accepted the state’s argument. Not Newby.
“According to the attorney general, the multimillion-dollar agreement reached with Smithfield is not a settlement, even though it references regulatory deficiencies for which the State presumably could have held Smithfield responsible,” Newby wrote. “We are asked to believe instead that Smithfield regarded its potential payments totaling $50 million over 25 years as nothing more than a gift that the Attorney General would use in his sole discretion to fund grants to environmental groups.”
“The undisputed facts of this case … reveal that the $50 million is not a gift,” Newby added. “The agreement is a settlement, drafted to circumvent the North Carolina Constitution’s requirement that the money proceeds of fines and penalties go to the public schools.”
Even if the original agreement between Smithfield and the attorney general does not constitute a legal settlement, it remains problematic for Newby. “[I]f the agreement is not a settlement, it violates our state constitution’s separation-of-powers principle by invading the General Assembly’s policymaking and budgetary prerogatives in a way that invites other constitutional officers to create and manage programs funded by ‘gifts’ received from the very companies they police.”
In other words, the majority decision appears to permit the next N.C.. labor commissioner to accept multimillion-dollar gifts from employers who want to avoid regulatory scrutiny. What would stop the agriculture commissioner from accepting similar gifts from farmers and business owners he regulates?
Newby’s dissent suggests that his high-court colleagues have left the door open for that type of abuse.
A second case, Cabarrus County Bd. of Educ. v. Dept’ of State Treasurer, focused on state lawmakers’ efforts to rein in the practice of pension spiking for high-paid government executives. A 2014 state law aimed to cut off the practice. As applied to the case of a retiring Cabarrus school superintendent, the law could have cost the local school system $208,000.
But the school board went to court. It challenged the process the state retirement system used in developing a formula for pension-spiking penalties.
Six members of the N.C. Supreme Court agreed that the state had followed the wrong procedure. Once again, Newby stood alone in dissent.
He described the 2014 anti-spiking law as the General Assembly’s attempt to address “an imminent threat to the solvency of the entire State Retirement System.” “When it passed the pertinent anti-pension spiking provision, it required the Board of Trustees of the State Retirement System … to adopt a ‘cap factor’ recommended by an actuary, and specifically described the procedures the Board must follow,” Newby wrote. “The Board expeditiously proceeded according to this process.”
“Now the majority creates a five-year gap in this law’s enforcement,” Newby noted. “The legislature determined that quick action by the Retirement System was necessary to keep the retirement fund solvent.” The majority decision thwarts that legislative intent, according to the one dissenting justice.
Most N.C. Supreme Court decisions are still unanimous. Thirty-two of 43 opinions (74%) handed down this year have had no dissenters. But in this relatively collegial atmosphere, Newby stands out from the six Democrats.
Chief Justice Cheri Beasley is the only member of the court to side with the majority in every case this year (disregarding one unresolved case that ended in a 3-3 deadlock.) Three other justices have dissented just once. Justices Anita Earls and Michael Morgan have dissented three times apiece.
Newby has dissented seven times, giving him the lowest rate (84%) of voting with the majority. He also has the lowest agreement rates with fellow justices. He and Earls have the lowest rate of agreement (33 of 43 cases, or 77%) among any pair of justices.
Pick any justice on the court, and that justice has agreed with other colleagues more often than with Newby this year. The one exception is Morgan, who has agreed with Newby as often as he as agreed with Earls.
This divergence between the one Republican and the six Democrats could help voters make choices as they head to the polls in November. Newby is challenging Beasley in the race for chief justice of the N.C. Supreme Court. Newby’s seat as associate justice is open, and Justice Mark Davis is trying to win a full term after gaining an appointment to the high court.
It’s unlikely that Beasley and Newby will engage in public, campaign-style policy debates. Voters will have to gather clues about their different legal views from their disagreements on the bench. Those disagreements include the recent hog farm “slush fund” and pension-spiking cases.
Mitch Kokai is senior political analyst for the John Locke Foundation.