Judges must employ proper review for best protection of NC rights

Most of us know that the US Constitution protects certain fundamental rights — free speech, freedom of religion, and more.

North Carolina’s state constitution offers additional protection. Article I, Section 1 protects economic rights. It proclaims as “self-evident” that people are “endowed by their Creator” with the “inalienable” right to “the enjoyment of the fruits of their own labor.”

State courts should protect fundamental rights. But my John Locke Foundation colleague Jon Guze questions the way some judges approach this task.

Locke’s senior fellow in legal studies, Guze outlined his concerns in a recent North Carolina Appeals Court brief.

Dr. Jay Singleton, a New Bern eye surgeon, challenges restrictions on economic rights linked to North Carolina’s certificate-of-need law. Singleton also claims a violation of Article I, Section 19, which says no person shall be “deprived of his life, liberty, or property, but by the law of the land.” Singleton argues further that the CON law violates the state constitution’s prohibition of “exclusive emoluments” (Section 32) and monopolies (Section 34).

The state Supreme Court ruled unanimously in October 2024 that Singleton could proceed with his case. Yet a three-judge trial panel dismissed the lawsuit last December.

Locke supports Singleton and opposes the CON law, “not only because it is unconstitutional and violates the rights of North Carolinians, but also because it directly harms patients, employers, insurers, and taxpayers by making health care more expensive and less accessible,” Guze wrote on July 17.

Guze believes the trial court employed the wrong type of judicial review for Singleton’s case.

“During the second half of the 20th century, North Carolina’s courts adopted a ‘tiers of scrutiny’ approach to constitutional adjudication modeled on the one that had previously been developed by the federal courts,” he wrote. “Under North Carolina’s version of the doctrine, the highest level of scrutiny was reserved for laws that infringe fundamental rights.”

“Such laws could only be upheld if the government could show they were necessary to serve a compelling governmental purpose” Guze explained. “The lowest level of scrutiny, on the other hand, applied to laws that regulate ordinary economic activity. Such laws were presumed to be constitutional unless they were plainly irrational.”

The so-called “rational basis” review “required no factual enquiry at all,” Guze wrote.

“If a court could conceive of a rational basis, or if the legislature was on record asserting such a basis, the law was simply presumed to be constitutional, and — in the absence of a factual enquiry — the plaintiffs had no way of rebutting that presumption,” he warned. “Treating rational basis review as a virtually irrebuttable presumption of constitutionality could lead to absurd results.”

Courts applying “minimal, rational basis scrutiny” to Singleton’s case have sided consistently with government defendants and dismissed his claims.

Yet Guze points to another unanimous state Supreme Court decision — Kinsley v. Ace Speedway Racing in August 2024 — that “precludes such an outcome by making two things clear.”

“First, when courts review motions to dismiss, they may not ignore plaintiffs’ factual allegations. Instead, they must treat them as true,” Guze wrote. “Second, rational basis review is the wrong standard for constitutional claims like the ones Plaintiffs make in the present case.”

Ace Speedway sets an important precedent, Guze explained.

“Whatever else Ace Speedway may portend for judicial review in North Carolina, it is clear that rational basis and strict scrutiny are no longer the only options,” he wrote.

After Ace Speedway, “the challenged state action must be reasonably necessary to promote the accomplishment of a public good, or to prevent the infliction of a public harm,” Guze wrote. With Ace, the state Supreme Court adopted a “reasonably necessary” test.

Courts “have no choice but to apply some sort of balancing test” to determine whether government actions can withstand constitutional challenges, Guze added. “[I]t seems likely that reasonably necessary will turn out to be the standard that applies to claims under most of the sections of Article I that consist of broad and abstract declarations of principle.”

When the state constitution dictates a “clear and categorical restriction on legislative power,” the Ace Speedway test “may be regarded as the minimum level of scrutiny” required, Guze suggested.

It’s clear to Guze that Singleton’s claims deserve a more thorough review.

“Plaintiffs have been waiting for justice to be administered in this case for more than six years,” he wrote. “They have waited long enough.”

Now all of us must wait to learn how North Carolina’s second-highest court might apply the “reasonably necessary” test to Singleton’s CON challenge.

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