Introduction

In the landmark case KODY KINSLEY, in his official capacity as Secretary of the North Carolina Department of Health and Human Services v. Ace Speedway Racing, Ltd., After 5 Events, LLC, 1804-1814 Green Street Associates Limited Partnership, Jason Turner, and Robert Turner, the Supreme Court of North Carolina addressed significant constitutional questions arising from the enforcement of COVID-19 related executive orders. The case centers around Ace Speedway Racing Ltd., an outdoor racetrack in Alamance County, whose operations were restricted under Governor Roy Cooper's executive orders aimed at limiting mass gatherings during the early phase of the COVID-19 pandemic.

The key legal issues involve the application of the North Carolina Constitution's Fruits of Their Labor Clause and Equal Protection Clause in the context of alleged selective enforcement of public health regulations. Ace Speedway contended that the restrictions imposed by the State were not only burdensome but also selectively enforced as retaliation for publicly criticizing the Governor’s policies.

The parties involved include the State of North Carolina, represented by Attorney General Joshua H. Stein and his team, and the defendants comprising Ace Speedway Racing Ltd. and its operators, Robert Turner and others. Additionally, several amici curiae, including the ACLU of North Carolina Legal Foundation and the Association of State and Territorial Health Officials, provided supporting perspectives.

Summary of the Judgment

The Supreme Court of North Carolina affirmed the unanimous decision of the Court of Appeals, which in turn upheld the trial court's order denying the State's motion to dismiss Ace Speedway's claims. The court found that Ace Speedway had sufficiently alleged colorable claims under the Fruits of Their Labor Clause and the Equal Protection Clause of the North Carolina Constitution.

Specifically, the Court concluded that the abatement order against Ace Speedway did not serve a proper governmental purpose and was an unreasonable means of achieving public health objectives. The Court also determined that the enforcement of the order was selectively targeted at Ace Speedway in retaliation for its public criticism of the Governor, thereby violating the Equal Protection Clause.

Analysis

Precedents Cited

The Judgment extensively relied on established North Carolina case law to evaluate the constitutional claims presented by Ace Speedway. Key among these were:

• Corum v. Univ. of N.C. (1992): Established Corum claims, allowing individuals to seek remedies for violations of state constitutional rights even when sovereign immunity might otherwise bar such claims.
• Deminski v. State Bd. of Educ. (2021): Outlined the criteria for alleging a valid Corum claim, including the necessity of showing a violation of state constitutional rights, the colorability of the claim, and the absence of an adequate alternative remedy.
• STATE v. BALLANCE (1949): Highlighted the added protection under the Fruits of Their Labor Clause, emphasizing that restrictions on legitimate business activities must serve a public good or prevent public harm.
• STATE v. LAWSON (1984) and STATE v. GARNER (1995): Provided the framework for assessing claims under the Equal Protection Clause, particularly regarding selective enforcement and discriminatory intent.

These precedents collectively informed the Court's approach in evaluating whether Ace Speedway's constitutional claims were sufficient to pierce the State's sovereign immunity.

Legal Reasoning

The Court employed a two-step analysis rooted in the Corum framework to assess the validity of Ace Speedway's claims.

• Fruits of Their Labor Clause: Ace Speedway alleged that the abatement order infringed upon their inalienable right to earn a living. The Court examined whether the State's action served a proper governmental purpose and if the means employed were reasonable. Ace Speedway contended that the true purpose was retaliatory, not public health protection, and that selective enforcement rendered the means unreasonable. The Court found these allegations credible enough to substantiate a colorable claim.
• Equal Protection Clause: The claim focused on selective enforcement of the abatement order against Ace Speedway while similar venues were left unregulated. The Court evaluated whether there was discriminatory intent and effect, ultimately agreeing that the selective targeting based on the Speedways' criticism of the Governor satisfied the necessary criteria for an Equal Protection violation.

Throughout the reasoning, the Court emphasized the importance of examining allegations at the motion to dismiss stage with a presumption of their veracity. This approach ensured that substantive claims were given fair consideration before delving into detailed evidence.

Impact

This Judgment has significant implications for both public health regulatory enforcement and constitutional law in North Carolina:

• Strengthening Corum Claims: By upholding the ability to pierce sovereign immunity through Corum claims, the decision empowers individuals and businesses to challenge state actions that infringe upon their constitutional rights without being precluded by sovereign immunity.
• Selective Enforcement Scrutiny: The case sets a stringent standard for proving selective enforcement, emphasizing that discriminatory intent and disparate impact are requisite for Equal Protection claims.
• Regulatory Accountability: The ruling underscores the necessity for state authorities to apply regulations uniformly and not as tools for political retaliation, thereby promoting fair and just governance.
• Public Health Law Framework: The decision provides a blueprint for evaluating the balance between public health imperatives and individual rights, particularly in emergency contexts.

Future cases involving executive orders and regulatory enforcement will likely reference this Judgment to assess the legitimacy of state actions and their compliance with constitutional protections.

Complex Concepts Simplified

Corum Claims

Corum claims are a legal mechanism established by North Carolina courts that allow individuals to seek remedies for violations of state constitutional rights. Unlike other claims that might be blocked by the doctrine of sovereign immunity, Corum claims specifically circumvent this immunity to ensure that constitutional rights have an enforceable remedy.

Fruits of Their Labor Clause

The Fruits of Their Labor Clause is a provision in the North Carolina Constitution that protects individuals' right to earn a living. It ensures that the government cannot unduly burden legitimate business activities unless it serves a significant public good, such as public health or safety.

Equal Protection Clause

The Equal Protection Clause in the North Carolina Constitution mandates that individuals in similar situations be treated equally by the state. It prohibits the government from selectively enforcing laws in a manner that discriminates against particular individuals or groups without a legitimate justification.

Abatement Order

An abatement order is a legal directive issued by a government authority requiring an entity to cease certain activities. In this case, the order mandated Ace Speedway to halt its racing events due to alleged violations of public health regulations.

Conclusion

The Supreme Court of North Carolina's decision in KODY Kinsley v. Ace Speedway Racing, Ltd. marks a pivotal affirmation of constitutional protections against state overreach. By upholding the validity of Corum claims and scrutinizing the legitimacy of regulatory enforcement, the Court has reinforced the judiciary's role in safeguarding individual rights against arbitrary government actions. This Judgment not only provides a robust framework for future challenges to state regulations but also ensures that public health measures are balanced with the fundamental rights enshrined in the state constitution. The ruling serves as a crucial precedent for maintaining the integrity of regulatory enforcement and upholding the principles of equality and fairness within North Carolina's legal landscape.