State Supreme Court reinstates order blocking Leandro forced money transfer

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  • The N.C. Supreme Court has reinstated a lower court's order blocking a forced money transfer in the Leandro education funding case.
  • The vote was 5-2, with the court's Republican justices supporting the order and Democratic justices dissenting.
  • The order blocks a judge from forcing state officials to move hundreds of millions of dollars without input from state legislators.

The N.C. Supreme Court has reinstated a lower court’s order blocking a trial judge from forcing state officials to transfer hundreds of millions of dollars out of the state treasury in the Leandro case.

The court’s vote was 5-2, with Republican justices supporting the decision and Democrats dissenting.

An order issued Friday restores the N.C. Court of Appeals’ “writ of prohibition” against the forced money transfer. That writ remains in effect until the state Supreme Court has a chance to consider arguments from State Controller Nels Roseland.

Meanwhile, the court did not allow state legislative leaders to file new briefs related to unresolved Leandro issues. Nor did the court grant lawmakers’ request to hear the Leandro case again. But another new filing in the case could prompt the court to revisit that decision.

“Specifically, the Controller argues that there are many issues presented in this case
that were left unaddressed in the Court’s earlier opinion” in the long-running Leandro case, according to the order signed by Justice Trey Allen. “The Controller further argues that ‘it would be fundamentally unfair for a court to subject him, his staff, and the recipient agency staff to criminal and civil liability before the basic elements of procedural due process were met including notice, an opportunity to respond, counsel, and the right to an appeal including a hearing on these issues.’”

Roseland has argued that complying with a forced money transfer could place him in legal jeopardy. State law and his oath of office prevent him from taking part in any transfer of taxpayers’ money with express authorization from the General Assembly.

The controller had requested that the court “dissolve or lift” its earlier order blocking the Appeals Court’s writ.

Roesland “has made a sufficient showing of substantial and irreparable harm should the stay remain in effect,” Allen wrote. “[W]e lift the stay, thereby reinstating the writ of prohibition, until this Court has an opportunity to address the remaining issues in this case.”

While the court accepted Roseland’s arguments, justices rejected requests from state lawmakers. Justices determined that state legislative leaders did not follow the “procedural requirement” of filing a motion to intervene in the portion of the Leandro case under discussion.

Shortly after the court issued its order, legislative leaders filed a new motion to intervene.

The majority’s order took up three pages. The decision prompted a nine-page dissent from Democratic Justice Anita Earls, joined by fellow Democrat Michael Morgan.

“I dissent from this Court’s extraordinary, unprincipled, and unprecedented action allowing the Controller’s motion in this matter,” Earls wrote. “Today’s order abandons the concepts of respect for precedent, law of the case, stare decisis, and the rule of law all in the name of preventing the State from complying with its constitutional duty to provide a sound basic education to the children of this state.”

The order blocking a forced money transfer touches on one of the key pieces of the Leandro case.

A November 2021 order from a previous trial judge in the case called on the state to spend an additional $1.75 billion to meet its education obligations. The order called on the state budget director, controller, and treasurer to bypass the General Assembly. The judge ordered those officials to move the money out of the treasury without legislative authorization.

Former Controller Linda Combs, Roseland’s predecessor, challenged that ruling at the Court of Appeals. Combs secured the writ of prohibition against the forced money transfer. A state Supreme Court ruling last November blocked the writ.

But that decision was rendered by a state Supreme Court with a 4-3 Democratic majority. Four days after that decision, N.C. voters replaced two Democratic justices with Republicans. The new court, with its 5-2 Republican majority, issued Friday’s order restoring the block on forced money transfers.

The Leandro case, officially known as Hoke County Board of Education v. State, sits now with a new trial court judge. Superior Court Judge James Ammons of Cumberland County is scheduled to hold his first Leandro hearing next week. That hearing is set for March 10 in Raleigh.

The Supreme Court has tasked Ammons with determining how much of the original $1.75 billion Leandro spending order the state should cover. Thanks to provisions of the last two state budget bills, state officials have estimated that the outstanding Leandro obligation stands at $677 million.

Leandro deals with the state’s constitutional obligation to provide N.C. public school students with access to a sound basic education. The state Supreme Court has issued major rulings in the case in 1997, 2004, and 2022.