The U.S. Supreme Court might have had its fill of cases involving North Carolina’s government. In recent years, the high court has addressed disputes dealing with voter ID, election maps, and university admissions in the Tar Heel State.
Yet justices in Washington, D.C., will decide soon whether to take two more cases involving government action in North Carolina. In both cases, plaintiffs urge the nation’s highest court to overrule state Supreme Court decisions from 2022.
The first case, Quad Graphics v. N.C. Department of Revenue, involves a dispute over sales taxes.
The plaintiff is a company based in Wisconsin. It argues that its business transactions take place outside North Carolina. That means this state’s Revenue Department has no authority to assess sales tax.
The department disagrees. Looking into transactions with North Carolina-based customers from 2009 to 2011, revenue staff assessed Quad Graphics $3 million in sales tax and penalties in 2018.
The N.C. Supreme Court upheld that decision last December in a 6-1 ruling. The lone dissenter, Republican Justice Phil Berger Jr., argued that his colleagues should have deferred to a 1944 U.S. Supreme Court precedent in a case called Dilworth.
“[T]his Court is not permitted to disregard the Supreme Court’s interpretation of the Commerce Clause and the federal Constitution,” Berger wrote.
Quad Graphics makes the same argument in its appeal to the U.S. Supreme Court. It has support from the N.C. Chamber Legal Institute, American College of Tax Counsel, National Association of Manufacturers, National Federation of Independent Business, and the Council on State Taxation.
The N.C. Supreme Court “inappropriately dismantled” the 1944 Dilworth precedent, COST argued.
“According to the North Carolina Supreme Court, the Commerce Clause no longer requires that a sale occur within the State as a condition to applying its sales tax,” according to a friend-of-the-court brief. “This [U.S. Supreme] Court is asked to determine whether North Carolina can ignore the longstanding Dilworth precedent, which this Court has never overruled — but to the contrary, has endorsed — and uphold a sales tax assessment even though no sale occurred in North Carolina.”
The state taxation group also cited a 1989 precedent. “This case also provides the Court an opportunity to reinforce its warning under Rodriguez de Quijas v. Shearson/American Express, Inc., … that federal and state courts must respect this Court’s holdings and it is not their place to overrule a case like Dilworth.”
The Revenue Department faces a Wednesday deadline to respond to Quad Graphics’ Supreme Court petition.
The other N.C. dispute that could attract U.S. Supreme Court attention involves prosecution of drunk-driving offenses. If a defendant misses a court date, state law allows prosecutors to proceed with a “dismissal with leave.” The case disappears from the court’s docket, but the criminal charge remains.
Only the district attorney can restore the case to the court’s calendar. In Diaz-Tomas v. North Carolina, two DWI defendants claim prosecutors have abused that power. Prosecutors coerce defendants into pleading guilty and giving up their right to appeal, according to a petition to the nation’s highest court. Without a plea, the cases remain in legal limbo.
The state Supreme Court ruled unanimously last November against plaintiffs Rogelio Diaz-Tomas and Edgardo Nunez. The two men hope the nation’s highest court will reverse that decision.
Their lawyers accuse N.C. district attorneys of “blatantly flouting” U.S. Supreme Court precedent by reviving a practice declared unconstitutional in 1967.
“In Klopfer v. North Carolina, … the Court held unconstitutional a practice unique to North Carolina, under which the state indefinitely postponed certain prosecutions over the objection of the accused,” according to the U.S. Supreme Court petition. “The Court determined that this practice violated the Speedy Trial Clause. Justice Harlan, concurring in the result, took the view that this practice violated the Due Process Clause.”
“District attorneys in North Carolina have now revived this practice,” the petition continued. “In DWI cases, where the defendant fails to appear for a scheduled court date, the state indefinitely postpones the defendant’s prosecution.”
“Defendants are left in perpetual limbo, with no way to contest the charges against them,” plaintiffs’ lawyers argued. “Their only exit from this predicament is to relinquish their right to a trial.”
The libertarian Cato Institute urged the high court to take the case. “Cato’s concern in this case is defending the jury trial as the presumptive means of adjudicating criminal charges and ensuring that the serious problem of coercive plea bargaining is not exacerbated by procedural mechanisms designed to achieve quick and easy convictions.”
State officials filed paperwork in April waiving the right to respond to the Diaz-Tomas petition. But the Supreme Court requested a formal response. On Monday lawyers with the N.C. Department of Justice asked the court to reject the case.
If the nation’s highest court accepts these cases emerging from Raleigh, we could see North Carolina back in national legal headlines soon.
Mitch Kokai is senior political analyst for the John Locke Foundation.