Fearrington v. City of Greenville

900 S.E.2d 851

Eric Steven FEARRINGTON, Craig D. Malmrose

v.CITY OF GREENVILLE, Pitt County Board of Education

No. 89PA22

Supreme Court of North Carolina.

Filed May 23, 2024

On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision of the Court of Appeals, 282 N.C. App. 218, 871 S.E.2d 366 (2022), dismissing in part, affirming in part, and reversing and remanding in part orders entered on 22 April 2020, 22 July 2020, and 28 July 2020 by Judge Jeffery B. Foster in Superior Court, Pitt County. Heard in the Supreme Court on 21 February 2024.

Stam Law Firm, PLLC, Apex, by R. Daniel Gibson and Paul Stam, for plaintiffs-appellees.

Hartzog Law Group, LLP, by Dan M. Hartzog, Jr., Katherine Barber-Jones, Cary, and Rachel G. Posey, for defendant-appellant City of Greenville.

Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by Elizabeth L. Troutman, Robert J. King III, Jill R. Wilson, Greensboro, and William A. Robertson, Raleigh, for defendant-appellant Pitt County Board of Education.

Michele Delgado, Samuel J. Davis, and Kristi L. Graunke, for American Civil Liberties Union of North Carolina Legal Foundation, amicus curiae.

Jeanette K. Doran, for North Carolina Institute for Constitutional Law, amicus curiae.

EARLS, Justice.

In 2017, the City of Greenville (Greenville) installed traffic cameras at its most dangerous intersections. As part of Greenville’s Red Light Camera Enforcement Program (RLCEP), those cameras automatically detect and photograph drivers who run red lights. The RLCEP was over a decade in the making. Greenville’s first try was in 2004, when it contracted with a company to install and operate red light cameras. See City of Greenville, N.C., Termination of agreement for the Redlight Photo Enforcement Program 1 (Aug. 9, 2007), http://www.thenewspaper. com/rlc/docs/2007/gvnc-cancel.pdf [hereinafter 2007 Termination Agreement]. But the City abandoned that effort just three years later after a court decision stymied its ability to fund the program using collected penalties. See id. Under that legal regime, Greenville explained, it would be "economically infeasible for [it] to proceed." Id. at 2. So it did not.

Almost a decade later, however, Greenville saw a way forward. Inspired by Fayetteville’s system of red light cameras, the City asked the legislature for permission to start a "fiscally prudent" program of its own via a cost-sharing agreement with the Pitt County Board of Education (Board). The General Assembly assented. See An Act to Make Changes to the Law Governing Red Light Cameras in the City of Greenville, S.L. 2016-64, 2015 N.C. Sess. Laws (Reg. Sess. 2016) 179 (Local Act).

With that legislative blessing, Greenville approved the RLCEP and negotiated an Interlocal Agreement with the Board. The City agreed to forward 100% of collected red light penalties to the Board. It would then invoice the Board for the actual costs needed to keep the program afloat. All told, the Board kept 72% of the collected funds—about $1.7 million for Pitt County schools. Greenville, in turn, got its long-awaited traffic cameras.

In 2018, plaintiffs Eric Fearrington and Craig Malmrose received citations for red light violations captured by RLCEP cameras. Plaintiffs challenged their citations—first at administrative hearings and then in court. In both forums, plaintiffs argued that the RLCEP violated Article IX, Section 7 of North Carolina’s Constitution. That provision—called the Fines and Forfeitures Clause (FFC)—promises the public schools the "clear proceeds" of all penalties, forfeitures, and fines "collected in the several counties for any breach of the penal laws of the State." N.C. Const. art. IX, § 7. In plaintiffs’ view, the Interlocal Agreement between the Board and City diverted the "clear proceeds" of red light fines away from Pitt County public schools. The Court of Appeals agreed and struck down the RLCEP’s funding mechanism.

On appeal, we consider two questions. First, as residents and taxpayers of Pitt County, do plaintiffs have standing to challenge the RLCEP and seek injunctive and declaratory relief? If so, is the RLCEP—and the statute authorizing it—constitutional under the FFC? We answer yes to both inquiries, and thus affirm in part and reverse in part the Court of Appeals.

I. Background

A. Greenville’s Red Light Camera Program

Failure to stop at a red light is a civil infraction that carries a maximum $100 penalty. See N.C.G.S. § 20-176(a)-(b) (2023). To enforce that provision, the General Assembly has allowed some cities to install red light cameras. See N.C.G.S. § 160A-300.1(d) (2023). In 2000, legislators added Greenville to that list. See An Act to Authorize the [City of Greenville] to Use Photographic Images as Prima Facie Evidence of a Traffic Violation …, S.L. 2007-37, 1999 N.C. Sess. Laws (Reg. Sees. 2000) 149. But though the City had permission to install traffic cameras, that course was not viable under existing law. See 2007 Termination Agreement. More specifically, the limits prescribed by N.C.G.S. § 115C-437—and court decisions interpreting that provision—required "90% of the money received from citations be paid to the county school systems." Id. at 1. To Greenville, the 10% statutory cap on collection costs made red light cameras "economically infeasible." Id. at 2.

But in 2016, the City charted a path towards a "fiscally prudent" red light camera program. Paralleling a similar arrangement in Fayetteville, the Greenville City Council passed a resolution asking the General Assembly for permission "to implement a red light camera enforcement program utilizing an interlocal agreement with the [Board] which includes provisions on cost sharing and reimbursement." The resolution explained that Greenville "has the authority to implement a red light camera enforcement program," but "it is not financially viable unless" coupled with the requested "interlocal agreement with the Board." Without the legislature’s approval, Greenville continued, it "could only retain the amount which represents the cost of collection of the fines which could not exceed 10% of the amount of the fines." The City thus sought greater fiscal leeway to share costs with the Board. Pitt County’s Board of Commissioners passed a similar resolution.

The General Assembly considered and approved those requests. See Local Act. In 2016, lawmakers statutorily authorized, Greenville and the Board to enter an Interlocal Agreement "necessary and proper to effectuate the purpose and intent of G.S. 160A-300.1 and this act." Id. § 4, at 180. 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. Id.

In response, Greenville amended its code of ordinances to provide for a red light violation offense. See Greenville, N.C., Code § 10-2-283 (2016). Drivers who received citations could appeal them through an administrative process reviewable in superior court. Id. § 10-2-285. To manage the RLCEP, Greenville hired Officer Patrick O’Callaghan at a salary of $75,000 per year. It also contracted with American Traffic Solutions, Inc. (ATS)—a private company headquartered in Arizona—to install, maintain, and manage the cameras.¹ The City agreed to pay ATS $31.85 of every $100 citation, on top of other service expenses.

To share the costs of the program and the collected funds, Greenville and the Board entered an Interlocal Agreement. The City agreed to administer the cameras and collect the penalties for red light violations. On the front end, Greenville would forward 100% of the money to the Board. But each month, Greenville would invoice the Board for program expenses, including the "actual cost of the Service Contract" with ATS and Officer O’Callaghan’s salary and benefits. The Agreement also contained a backstop: the Board was not required to pay if the costs of the program exceeded the collected fines. In other words, the Board could only make money from the program.

With those agreements in place, Greenville installed red light cameras at five intersections. The cameras are synchronized with the traffic signals. Sensors in the pavement monitor traffic flow just before the stop bar. When a car crosses that bar and enters the intersection during a red light, the sensors send a Signal to the camera. The camera automatically snaps two pictures—one of the car at the stop bar, the other as it continues through the intersection. Both photos include the car’s license plate and the traffic signal. For good measure, the camera also tapes a video of the violation.

ATS processes the recorded evidence and matches the car’s license plate to its registered owner. The company then turns that evidence over to Officer O’Callaghan, who reviews it and decides whether to issue a citation. If he sees a red light violation, ATS malls a civil citation—called a Notice of Violation—to the car’s registered owner. The Notice includes pictures of the violation and the car’s license plate. It also instructs the recipient how to view video footage, how and when to pay the $100 civil penalty, and how to request an administrative appeal.

From 2017 to 2019, the RLCEP collected about $2.5 million in red light penalties. 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 which $580,000 went to ATS. In the same two years, the Board kept 72% of the total penalties, netting almost $1.7 million for Pitt County schools. 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."

B. Plaintiffs’ Suit

On...