Greenville red-light critics seek NC Supreme Court rehearing on refunds

Plaintiffs who lost a state Supreme Court battle against Greenville’s red-light camera enforcement program are seeking a rehearing. They ask North Carolina’s high court to revisit the issue of people seeking refunds from the government.

“The Court addressed the question of the refundability of the $100.00 each plaintiff driver paid to the City of Greenville. Neither the Trial Court nor the Court of Appeals addressed that question,” according to the petition for rehearing filed Thursday in Fearrington v. City of Greenville. “Resolving that question was not necessary to resolving the case. The Court’s opinion on this point is obiter dicta that harms the jurisprudence of the state.”

“Obiter dicta” is a legal term meaning “something said in passing.” It is not meant to establish a legal precedent.

The high court’s May 23 decision “implicitly overrules” six North Carolina appellate precedents and “conflicts with other courts’ declaratory judgment holdings,” according to the petition. “At least thirteen courts have recognized a declaratory judgment plaintiff may seek money damages against the government,” the red-light critics’ lawyers wrote.

The state Supreme Court upheld the funding model Greenville used for its now-discontinued red-light camera enforcement program. The 5-1 decision last month reversed an earlier ruling from the state Appeals Court.

Appellate judges had determined that Greenville did not provide enough proceeds from red-light camera citations to the Pitt County Board of Education.

“In 2016, lawmakers statutorily authorized Greenville and the Board to enter an Interlocal Agreement” for red-light cameras, wrote Justice Anita Earls. “Most importantly — and as requested by the Board and City — the legislature permitted the Interlocal Agreement to ‘include provisions on cost-sharing and reimbursement,’ so long as Greenville and the Board ‘freely and voluntarily agree[d] to’ those terms.”

The city and school board reached an interlocal agreement. “From 2017 to 2019, the RLCEP collected about $2.5 million in red light penalties,” Earls wrote. “Greenville forwarded that money to the Board before invoicing the agreed-upon expenses. The Board, in turn, reimbursed the City a little over $700,000.” Of that sum, $580,000 went to private contractor American Traffic Solution.

“In the same two years, the Board kept 72% of the total penalties, netting almost $1.7 million for Pitt County schools,” Earls added. “As explained by the Board’s Superintendent, the RLCEP ‘provides additional resources to the [Board] that it would not otherwise have’ to ‘spend exclusively on educational purposes.’ Those funds, for instance, helped ‘pay for increased safety measures in schools, including security cameras, warning systems, and modern locks.’”

Plaintiffs challenging the program argued that state law implementing the North Carolina Constitution’s fines and forfeitures clause called for Pitt County schools to retain at least 90% of proceeds from red-light citations. That number was based on a 10% cap on administrative fees.

The high court ruled that the plaintiffs had standing to challenge the funding scheme. But justices rejected the plaintiffs’ request to have red-light camera penalties refunded.  “As taxpayers, … plaintiffs may request a declaration on the constitutionality of the RLCEP and Interlocal Agreement, as well as the Local Act authorizing both,” Earls wrote. “So too may they seek to enjoin any unlawful diversion of funds from Pitt County schools. But as taxpayers, plaintiffs may not ‘capitalize on the suit’ and convert a derivative claim into a personal damages action.”

Justices also focused on the legislative act that allowed Greenville and Pitt County to develop the funding plan. “Though the text does not explicitly exempt the Board and City from the 10% cap, other clues make clear the legislature’s goal,” Earls wrote.” Most tellingly, there was no reason to pass the Local Act except to vary the existing funding limits.”

“Taken as a whole, statutory context, structure, and history show that the City and Board sought—and the General Assembly approved—a more pliable cost-sharing agreement than allowed by section 115C-437,” the state law setting the 10% cap on administrative fees, Earls explained.

“The RLCEP exists only because of the City and Board’s cost-sharing agreement and the Local Act blessing it,” Earls wrote. “Without those measures, Greenville could not run the program and the Board would collect no red light penalties whatsoever. Put in practical terms, the question is not whether the Board should receive 72% versus 90% of the funds — it is whether the Board should receive 72% or nothing at all.”

Justice Richard Dietz took no part in the case after serving on the Appeals Court panel that had initially ruled against Greenville.

Justice Phil Berger Jr. cast the lone dissenting vote from the Fearrington decision. “You often hear lawyers and judges say they went to law school because they hated math. The majority opinion may well prove that point by failing to correctly understand a simple numerical inequality statement,” Berger wrote. “For a discipline that demands certainty, the mathematical formula ‘x > 10%’ now means something quite different.”

“[T]he question is whether the fund-diversion scheme in the Interlocal Agreement comports with the explicit requirements of Article IX, Section 7 and N.C.G.S. § 115C-437,” Berger added.

“[W]e have held that N.C.G.S. § 115C-437, which imposes a 10% cap on the costs of collection, ‘implements [A]rticle IX, [S]ection 7 of our state Constitution.’ Thus, if ‘x’ represents the costs of collection, and x < 10%, the financing scheme for collections is allowed by Article IX, Section 7. A funding scheme in which x > 10%, however, is constitutionally and statutorily prohibited, and the majority’s assertion that a local bill can override these statutory and constitutional strictures is the legal equivalent of saying 2 + 2 = 5,” Berger wrote.

“The diversion of funds here effectively reduced the amount of money available for public schools, contrary to the intent and explicit requirements of the Fines and Forfeitures Clause,” Berger added.

“The Interlocal Agreement as written cannot be squared with Article IX, Section 7, with section 115C-437, with basic math, or common definitions,” Berger wrote. “According to the majority, because the school system receives some benefit, the Interlocal Agreement here is constitutional. We have rejected this idea previously.”

Berger warned of potential future consequences. “Because the Fines and Forfeitures Clause has been redefined by the majority here, the question is now about where this Court will draw the line?” he asked. “A 1% benefit? The test appears to be ‘whether the Board should receive [an amount > 1%] or nothing.’ One shudders to think what we would do if forced to grapple with an algebraic problem.”

Justices heard oral arguments in the case on Feb. 21.

Greenville shut down the red light camera program in November 2022, eight months after the state Court of Appeals ruled the program unconstitutional. Appellate judges determined that Pitt County schools did not keep enough money from the proceeds of red light camera citations.

The Appeals Court ruling could have led to refunds for red light camera violators.

Lawyers defending the program highlighted for Supreme Court justices the General Assembly’s 2016 law granting Greenville and Pitt County the right to enter into an agreement for funding red light camera enforcement.

“That agreement is … There is no question really that it is to the mutual benefit of the city and the Board of Education,” said Dan Hartzog, Greenville’s lawyer. “The city achieves its purpose of increasing safety, increasing efficiency, and operating the red light cameras. The Pitt County Board of Education, over the brief course of the program, which is not currently running due to this litigation, got roughly $2.5 million in revenue that they would not otherwise have received.”

Appellate judges agreed with the plaintiffs in the case, Fearrington v. City of Greenville, that the cost-sharing agreement fell short of a standard spelled out in Article IX, Section 7 of the state constitution. It gives the “clear proceeds” of fines and penalties to local schools. Previous court cases have determined that “clear proceeds” must be at least 90% of the funds, according to the appellate decision. Pitt County schools kept about 72% of Greenville’s red light camera money.

“If this court were to uphold the Court of Appeals opinion, the Pitt County Board of Education would have less money as a result,” Hartzog said. “That is a perversion of what the fines and forfeitures clause is intended to do.”

The school board’s lawyer criticized the plaintiffs’ motives. “Plaintiffs are not here to help the schools,” Robert King argued. “Their goal in filing this lawsuit is to shut down the red light camera program. If they can’t put some money in their own pockets, they will do that.”

“They want to take Article IX, Section 7, turn it into a weapon, and take money away from the schools and put it in the pockets of people that broke the law and endangered the public,” King added. He labeled the constitutional argument “as twisted a use as you could possibly get.”

The plaintiffs’ lawyers argued that the funding arrangement calls for Pitt County schools to fund costs banned by previous court decisions. “There is no doubt that the school system of Pitt County is paying the enforcement costs,” argued Paul “Skip” Stam. “You’ll see through these schemes, I believe.”

Stam also questioned Greenville’s role in funding the red light cameras. “The city of Greenville is not willing to put money into it at all,” he argued. “You would think that if Greenville was interested in public safety, they would be willing to spend a little money on it.”

Stam is a member of the board of directors of the John Locke Foundation, which oversees Carolina Journal.

Justices asked why money should be refunded to people with red light camera citations, rather than sent to the local schools.

“We’ve said appropriating public funds to an Arizona corporation to run red light cameras violates Article IX, Section 7 of the state constitution,” argued attorney Dan Gibson. “You can’t do that. That’s illegal. We want an injunction preventing you from spending that money.We’s like our money back because you took our money fraudulently, ultra vires, unconstitutionally — whatever label you want to put on that.”

“If the constitution doesn’t grant you the authority to do it, you never had the authority to take our money, and it’s still our money,” Gibson added.

Chief Justice Paul Newby asked how a ruling for or against Greenville’s program could affect red light camera enforcement in other cities.

Hartzog promoted Greenville’s program as a “model for how it should be run.” “The question is: Does a system in which they get $2.5 million over a couple of years advance public education? Does that help maintain free public schools? It would be absurd to say that it doesn’t,” he argued.

The state Supreme Court blocked the initial Appeals Court ruling in 2022. Roughly a year later, in April 2023, the high court agreed to take the case.

“Education is a constitutional right imperative to the well-being of the children of North Carolina and the state itself. North Carolina guarantees ‘[t]he people have a right to the privilege of education, and it is the duty of the State to guard and maintain that right,’” wrote Jeanette Doran, NCICL president and general counsel, in a friend-of-the-court brief.

“To help guard and maintain this right, N.C. Const. Art. IX, § 7, ‘The Fines and Forfeitures Clause,’ mandates that the ‘clear proceeds’ of all fines, penalties, and forfeitures ‘for any breach of the penal laws of the State, shall belong to and remain in the several counties, and shall be faithfully appropriated and used exclusively for maintaining free public schools,’” Doran added.

The NCICL brief challenged the constitutionality of an agreement between Greenville and Pitt County Schools about sharing red-light proceeds.

“A ruling affirming the Court of Appeals’ entry of summary judgment in favor of Plaintiffs’ Article IX, § 7 claim is essential in safeguarding public education and the constitutional framework for its funding,” Doran wrote. “Defendants have entered a Red-Light Camera Enforcement Program interlocal funding agreement that circumvents public school funding requirements established by the People in their Constitution.”

Greenville and the school district “invite an interpretation of Article IX, § 7 that cannot be reconciled with constitutional text and that would render the Fines and Forfeitures Clause impotent,” Doran argued. “Because the Board receives less than the clear proceeds of civil penalties collected by the City’s RLCEP, the RLCEP violates The Fines and Forfeitures Clause, and this Court should so hold.”

An ACLU friend-of-the-court brief argued against “profit-driven law enforcement.” The group contends policing linked to profits “undermines public safety,” in addition to being regressive, extractive, and a bad way to fund public services.”

“Simply put, the laudable goal of directing resources towards North Carolina’s public schools does not justify governmental reliance on regressive law enforcement schemes like the one at issue here,” ACLU’s lawyers wrote.

Pitt schools netted about 72% of the proceeds from Greenville’s red-light camera citations. A unanimous three-judge appellate panel ruled that the schools’ share from red-light camera enforcement would need to top 90% to meet state constitutional standards.

“[W]e hold that the funding framework of the RLCEP violates the Fines and Forfeitures Clause contained in Article IX, Section 7 of our State Constitution,” wrote Judge Jefferson Griffin.

Greenville’s Supreme Court brief disputed the Appeals Court’s reasoning. “This holding was in error, as the panel misconstrued and improperly invalidated the City and the Board’s independent and legislatively authorized cost-sharing arrangement,” wrote the city’s lawyers.

State lawmakers endorsed the funding arrangement between Greenville and the Pitt school board, according to the city’s brief. “The Interlocal Agreement is also specifically authorized by the General Assembly through S.L 2016-64, which provides that the Interlocal Agreement ‘may include provisions on cost-sharing and reimbursement that the Pitt County Board of Education and the City of Greenville freely and voluntarily agree to for the purpose of effectuating the provisions of G.S. 160A-300.1 and this Act.’”

The requirement that local schools receive “clear proceeds” from red-light citations doesn’t equate to a 90% share, Greenville’s lawyers argued. “The term ‘clear proceeds’ does not mean all monies collected from a civil penalty,” according to the brief. “Rather, it means net proceeds, that is, the proceeds left after the cost of collection are deducted.”

In a separate brief, the Pitt County Board of Education also defended the funding arrangement. Pitt school leaders rejected legal arguments from plaintiffs who challenge the red-light camera program.

“In every Article IX, Section 7 case this Court has decided before today, the injured party (i.e., the entity that ultimately is going to benefit from enforcing the Fines and Forfeitures Clause) is the public schools. But Plaintiffs seek to convert this protection instituted by the framers of our Constitution into a benefit for themselves,” the Pitt school board’s lawyers wrote.

“Their argument – that the Board may not voluntarily enter an inter-local agreement that increases revenue for the Board – would twist the meaning of the Fines and Forfeitures Clause from one that protects resources for schools into one that restricts the ability of local governments to increase school funds,” according to the brief. “And, as Plaintiffs further argue, if the local governments fail to comply with these restrictions on their ability to raise funds, the result is that the funds must be returned to those who paid them.”

“Nothing could be further from what the Fines and Forfeitures Clause plainly says or what the Framers of the North Carolina Constitution intended.”