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In 2011, the North Carolina General Assembly enacted the following statute allowing payment of attorney fees in the face of certain local government acts:
In any action in which a city or county is a party, upon a finding by the court that the city or county acted outside the scope of its legal authority, the court may award reasonable attorneys' fees and costs to the party who successfully challenged the city's or county's action, provided that if the court also finds that the city's or county's action was an abuse of its discretion, the court shall award attorneys' fees and costs.
NCGS 6-21.7. The statute is relatively new, and has not
received much attention at all from the courts.
Yesterday, however, the North Carolina Court of Appeals upheld an
award of attorney fees against Orange County, North Carolina.
The case is Phillips v. Orange County Health Department, No.
COA13-1463 (November 18, 2014).
While not the central holding of the case -- the central holding
is that the County was preempted by State law from regulating
plaintiff's wastewater discharge system -- the attorney fee
holding is the most interesting aspect to me.
The trial court awarded fees pursuant to NCGS 1-263, the
State's Declaratory Judgment Act. The trial court does
not appear to have relied on NCGS 6-21.7 in rendering its
award.
The appellate court, however, recites the language of NCGS 1-263
-- "the court may make such award of costs as may seem
equitable and just" -- but it
also recites the language of NCGS
6-21.7 in affirming the award. What's more, the issue is
whether the County's regulations and actions pursuant to its
regulations were preempted by State law. Thus, is the award
pursuant to NCGS 1-263, or is it pursuant to NCGS 6-21.7? Is
the appellate court's invocation of NCGS 6-21.7 dicta? If
the Phillips Court's invocation of NCGS 6-21.7 is
not dicta, is a local government preemption case to be viewed as
one in which the local government "acted outside the scope of
its legal authority" or "abused its
discretion" such that attorney fees might be
recoverable?
We think the courts will continue to explore the boundaries of
this attorney fee provision.
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