Deference ruling means good news for NC government challenges

Thurman Savage must wait to learn whether North Carolina courts will restore his job certifying school bus drivers for the state Department of Transportation.

But the state Supreme Court’s Aug. 22 ruling in Savage v. NCDOT offers him hope. The same decision boosts any individual or business taking legal action against a North Carolina government agency.

State judges may no longer defer to government interpretations of state laws. Judges instead must evaluate government arguments alongside those from other parties in a lawsuit.

Ending this judicial deference could have a significant impact on protecting rights and limiting government overreach.

DOT fired Savage in 2019. He had admitted recertifying five school bus drivers without observing them in mandatory ride-along sessions. Defending its decision, the department cited NCGS § 20-34.1.

That state law creates a felony for knowingly entering false driver’s license information into a DOT database. One provision says employees who violate the statute “shall be dismissed.”

DOT “informed Savage that his termination was required by law and not a matter over which the department had any discretion,” according to the state Supreme Court’s opinion.

Savage challenged his dismissal. He argued that DOT misread Section 20-34.1.

An administrative law judge sided with Savage, but the state Appeals Court reversed that decision and ruled for the DOT. Savage turned next to North Carolina’s highest court. He argued “that the Court of Appeals wrongly deferred to the department’s interpretation of the statute and that the statute did not apply to Savage’s conduct.”

The Supreme Court agreed unanimously that Section 20-34.1 did not apply to school bus drivers’ certificates. Thus it did not cover Savage’s conduct. DOT could not use the law to justify firing him.

The case could have ended there. But Republican justices had other plans.

Noting “quite a bit of confusion” about deference at the state Appeals Court, the high court decided to “take this opportunity to clarify the law,” Justice Richard Dietz wrote in a 5-2 majority opinion.

“Several decades ago, parroting federal law, the Court of Appeals held it ‘a tenet of statutory construction that a reviewing court should defer to the agency’s interpretation of a statute it administers so long as the agency’s interpretation is reasonable and based on a permissible construction of the statute,’” Dietz added. He cited a 1998 case.

“We never approved this interpretive rule, and it directly conflicts with our own precedent requiring courts to review questions of law de novo,” Dietz wrote. A “de novo” review “considers the matter anew” without accepting the judgment of a lower court or agency.

“Accordingly, we expressly disavow any rule requiring courts to defer to an agency’s interpretation of a statute, 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,” Dietz explained.

“This ‘de novo’ standard of review makes particular sense when reviewing an executive-branch agency’s interpretations of a statute,” Dietz added. “This Court has long held that a core part of state judicial power is the authority to say what the law is. Thus, it ‘is the exclusive right of the judiciary’ to interpret laws enacted by the General Assembly and ‘neither the executive nor the legislative department has any such power.’”

“[I]t is quite bizarre to imagine North Carolina law compelling courts to adopt the legal interpretation of executive-branch agencies,” Dietz added. Yet that idea “has quietly crept into” state appellate rulings.

Justice Tamara Barringer wrote separately “to underscore the indispensable function the judiciary serves in our constitutional framework — one that is incompatible with the doctrine of agency deference.”

Barringer took “this opportunity to strongly endorse this Court’s disavowal of the agency deference doctrine; it has no place in the independent decision-making authority of the judiciary.”

Meanwhile, the high court’s two Democrats issued a partial dissent. “I think it important for the judicial branch to have appropriate respect for the work of administrative agencies,” Justice Anita Earls wrote. “While ‘[d]e novo review does not blind us to context or demand unquestioned deference to an agency’s views,’ we also should not completely disregard agency expertise.”

Savage earned only a partial victory. The case returns to the Appeals Court to address DOT’s other justifications for firing him.

Yet Savage’s victory on deference could have a major impact going forward. When legal disputes arise over North Carolina’s state laws, agencies can no longer expect judges to endorse government views without question.

That should mean good news for litigants who believe government has done wrong.

Mitch Kokai is senior political analyst for the John Locke Foundation.