United States: McCrory v. Berger: NC Supreme Court Decision Could Result In Continuing Litigation Over Validity Of Key Boards & Commissions

In McCrory v. Berger, the North Carolina Supreme Court issued its long-awaited opinion in this battle between the Governor and the legislative leadership as to who gets to make appointments to executive branch agencies.¹ Numerous industry and trade associations filed an amicus brief pointing out that if the Court were to affirm the three-judge panel below and set aside 120 years of state constitutional precedent, it would open a Pandora's Box that would cripple state government and could potentially call into question past acts of various boards that have legislative appointments.

While declining to provide a "categorical rule" that could be applied in other cases, the North Carolina Supreme Court struck down the legislative appointments to the three commissions at issue because the composition of those commissions "prevent[s] the Governor from performing his constitutional duty to take care that the laws are faithfully executed." The Court attempted to navigate the minefield before it by imposing a balancing test rather than flat-out upholding or striking down all legislative appointments to executive branch agencies. As a result, the Legislature appears to have gotten some of what it wants, as it can continue to make some legislative appointments. Additionally, the Court suggests that the Rules Review Commission (which determines whether agency rules have been adopted in accordance with the process set out in the Administrative Procedure Act) passes constitutional muster even though all of its members are appointed by the General Assembly.

The Governor has gotten what he was litigating over – the Oil and Gas Commission, the Mining Commission and the Coal Ash Management Commission have been declared to be improperly constituted due to the fact that the General Assembly makes a majority of the appointments to these commissions.

The North Carolina Supreme Court's decision creates a vague, loosely defined test as to what constitutes a valid legislative appointment versus an invalid appointment (factors to be considered include whether the Governor gets to make a majority of the appointments), which will undoubtedly generate litigation for years to come. The opinion appears to place squarely in the cross-hairs two significant commissions in which the Governor and General Assembly have the same number of appointments – the Turnpike Authority and the Global TransPark Authority.

The Court decided this case in a 6-1 decision. Concluding that the majority opinion jettisons over a century of precedent, Justice Paul Newby dissented in part. He opined that a separation of powers violation "only occurs when one branch of government exercises the power belonging to another branch" and that no violation occurs when one branch simply appoints someone to serve in another branch (such as the Governor appointing a judge to fill a vacancy on the court).

DISCLAIMER: Troutman Sanders LLP filed an amicus brief in this case on behalf of a group of its clients.

Footnote

1 Although the North Carolina Supreme Court expedited briefing and argument in this case because of its significance, seven months passed between oral argument and the Court's decision.

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