North Carolina Supreme Court Ruling May Limit State Agency Power
Last week, the North Carolina Supreme Court released its opinion in Savage v. North Carolina Department of Transportation, potentially upending the way administrative law is heard in North Carolina’s Courts.
Background: Several decades ago, the North Carolina Court of Appeals issued a ruling, mirroring federal law, that held “as a tenet of statutory construction that a reviewing court should defer to the agency’s interpretation of a statute as long as the agency’s interpretation is reasonable and based on a permissible construction of the statute.” This means state courts should defer interpretation of the law to the government agency that administers the law. Over time, government agencies were able to expand their reach, and state courts had to defer to their interpretation.
On the federal level, the Chevron Deference was overturned, and now Thurman Savage filed a state case that challenged the North Carolina version of the Chevron Deference. In 2019, the NCDOT fired Savage for administering most of the requirements, but not all of the requirements, for recertifying school bus drivers. NCDOT said they had no choice in the matter and were required by law to terminate his employment.
Savage filed a complaint with the Office of Administration hearings, and an administrative law judge found that the Department lacked the statutory authority to fire Savage. NCDOT appealed to the N.C. Court of Appeals, who overturn the lower-level court. The case was eventually heard by the North Carolina Supreme Court.
Key Quotes From The Ruling
In a 5-2 decision, the North Carolina Supreme Court overturned the Court of Appeals decision and sent the case back down to be reheard.
Here are the key quotes from Associate Justice Richard Dietz, who authored the majority opinion:
This Court never adopted Chevron deference as a tool to interpret state law. Nevertheless, it found its way to the Court of Appeals.
As Chevron deference crept into Court of Appeals jurisprudence, advocates of the doctrine found snippets of this Court’s case law that they believed were an endorsement.
Thus, for clarity, we expressly disavow the use of Chevron-style agency deference when interpreting state statutes, overrule any previous Court of Appeals case law to the contrary, and instruct all lower courts to apply traditional de novo review to the interpretation of state statutes.
This is not the end of this case, however. The department also asserted that there was just cause to terminate Savage’s employment even without the mandatory termination requirement of N.C.G.S. § 20‑34.1. The ALJ rejected this argument and ruled that the department “failed to meet its burden of proof that just cause exists” to terminate Savage’s employment. The department challenged this ruling on appeal, but the Court of Appeals did not reach the issue because it found its analysis of N.C.G.S. § 20‑34.1 to be “dispositive.” Savage, slip op. at 3. We therefore remand this case to the Court of Appeals to address the department’s remaining arguments.
North Carolina Labor Commissioner Luke Farley weighed in on the ruling saying, ““As North Carolina’s Commissioner of Labor, my job is to execute the law — not make it and not stretch it. The General Assembly writes our statutes, the courts interpret them, and, as a member of the executive branch, we carry them out. I welcome the Supreme Court’s decision in Savage v. NCDOT as clear affirmation that state agencies are not to invent new meanings beyond the plain text of the law.
At the NC Department of Labor, that is exactly how we will operate. We will enforce the law as written. If a statute needs to be changed, we will take that case to the people’s representatives in the legislature, not try to rewrite it through policy memos.
This approach protects workers, gives small businesses the certainty they need to grow, and honors constitutional separation of powers. That’s how we keep North Carolina the safest place to work and the best place to do business.”
