Of Campaigns and Contracts - North Carolina’s Adoption of Legislative Immunity

25 May 2023 10:03 AM | Deleted user

by Derrick Bailey, Sumrell Sugg, P.A.

Late last summer, the North Carolina Supreme Court published an opinion which touched on several immunity doctrines. In particular, the Court formally adopted legislative immunity as an individual capacity defense to State-based claims. In so doing, the Court drew not only from federal immunity doctrines, but also from doctrines unique to the State.

            A Small-Town Fire Department and a Local Election

The underlying case involved allegations of fraud, a municipal election, and the discernment of a mayor’s functions during town council meetings. Since 1954, the Providence Volunteer Fire Department (“Providence”) provided fire suppression services for portions of the Town of Weddington and the surrounding areas. Through its years of service, Providence’s fire station began to deteriorate, and in 2013, Providence and Weddington began discussing ways to finance the necessary renovations.

Coincidentally, 2013 was an election year, and several candidates, both for town council and for mayor, publicly spoke in favor of the renovations and on the need for Providence to continue providing fire suppression. William Deter, who was running for mayor, was such a candidate.

In October 2013, while the election campaigns were still ongoing, Providence and Weddington entered into an agreement that, when framed in simplest terms, provided that Providence would sell the station to Weddington, which in turn would finance the necessary renovations and lease it back to Providence for one dollar per year. Weddington also agreed to pay Providence on a monthly basis, for a minimum period of 10 years, for the provision of fire suppression services.

The agreement provided that it could only be terminated “for cause” which it defined as “the failure of either party to perform the material provisions of [the agreement] . . . include[ing], but not limited to, the failure to meet the required service level and transparency requirements[.]” The agreement additionally contained a liquidated damages clause which entitled Providence to $750,000.00 if Weddington terminated the agreement without cause. It further stated that Weddington would remain responsible for renovation costs if there was a contractual breach prior to the transfer of the station’s title.

In November 2013, after the agreement between Providence and Weddington, Deter was elected as the Town’s mayor. Providence alleged that Deter campaigned, in part, by publicly advocating for the fire department’s continued existence while secretly conspiring with certain council candidates to find a way terminate the agreement for cause, upon election, so that the Town could gain title to the station without having to pay liquidated damages.

Pursuant to the terms of the agreement, Providence transferred the fire station to Weddington via quitclaim deed on August 20, 2014. On April 28, 2015, following the results of a commissioned fire study, the town council voted to terminate the contract with Providence with the stated basis being Providence’s financial instability and inability to provide adequate assurances that it could meet its obligations under the contract. Mayor Deter did not cast a vote, but scheduled the meeting, called the vote, and allegedly encouraged the council members to terminate the agreement.

Providence filed suit against Weddington and Deter on March 27, 2018, alleging, inter alia, that the defendants fraudulently induced it into executing the agreement and subsequent quitclaim deed.

Deter moved to dismiss, asserting legislative, qualified, and public official immunity. On  November 27, 2018, the trial court denied Deter’s motion, holding that he was not entitled to immunity, at least at that early stage in the proceedings. Deter gave notice of interlocutory appeal given the substantial nature of the right associated with the immunity doctrines. On December 31, 2020, the Court of Appeals reversed, holding that Deter’s actions were legislative in nature and that he was entitled to the corresponding immunity. Providence petitioned the State Supreme Court for discretionary review, which it granted on August 10, 2021.

The Court’s Analysis

On August 22, 2022, the Supreme Court unanimously affirmed, adopting the Fourth Circuit’s legislative immunity test, which provides that an official is entitled to immunity if:  (1) he was acting in a legislative capacity at the time of the alleged incident; and (2) the acts were not illegal. Providence Volunteer Fire Dep’t, Inc. v. Town of Weddington, 382 N.C. 199, 220 (2022).


The Court followed the federal courts’ analysis as to the first element, thereby concluding that immunity should not limited to members of the General Assembly, but rather, should extend to all regional and local legislators because their ‘“discretion should not be inhibited by judicial interference or distorted by the fear of personal liability[.]”’ Providence, 382 N.C. at 220 (quoting Bogan v. Scott-Harris, 523 U.S. 44, 52 (1998)). The Court similarly agreed that ‘“officials outside the legislative branch are entitled to legislative immunity when they perform legislative functions.”’ Id. at 221 (quoting Bogan, 523 U.S. at 55).

During oral argument, however, the Court struggled with how to evaluate the second element as there was no authority clearly defining what constitutes an “illegal act” within the context of the test. Ultimately, the Court resolved this question by looking to Epps v. Duke Univ., 122 N.C. App. 198, 204-05 (1996), and incorporating the public official immunity standard, noting that an “official may, however, be held liable in his or her individual capacity if his or her actions were malicious, corrupt or outside the scope of his or her official duties, even if they were legislative in nature.” Providence, 382 N.C. at 220 (emphasis added).

In adopting the public official immunity standard, the Court indirectly addressed a separate, unraised issue, namely whether there was legal authority to justify a State-based version of the doctrine. The issue was not directly before the Court as “Providence ha[d] not contended that [the Court] should refrain from recognizing the doctrine of legislative immunity.” Id.

While there are a handful of State statutes that acknowledge the doctrine, there are none that authorize it. By contrast, federal legislative immunity is rooted in the Speech and Debate Clause of the United States Constitution, which provides that “Senators and Representatives shall . . . be privileged . . . for any Speech or Debate in either House[.]” U.S. Const. Art. I, § 6, Cl 1. The closest North Carolina has to a constitutional equivalent is found in Art. II, § 18, which states that “[a]ny member of either house may dissent from and protest against any act or resolve which he may think injurious to the public or to any individual” by having “the reasons for his dissent entered into [a] journal” that is to be made publicly available after the adjournment of the General Assembly. The Oxford Commentaries on the North Carolina Constitution, co-authored by Chief Justice Newby, explained that the purpose of this section was to create a public record and hold elected officials accountable to their constituents rather than insulate them. Hence, State-based legislative immunity did not have as strong a constitutional foundation as its federal counterpart.

Instead of relying on express constitutional or statutory provisions, the Court invoked the familiar language of public official immunity; “a derivative of sovereign immunity,” Toomer v. Garrett, 155 N.C. App. 462, 481 (2002), and “an established principle of jurisprudence, resting on grounds of sound public policy[.]” Smith v. Hefner, 235 N.C. 1, 6 (1952). In so doing, the Court simultaneously resolved both the issue of the doctrine’s legitimacy and its own reservations regarding adoption of the Fourth Circuit’s test.

Finally, while some of the conduct that Providence alleged gave rise to a claim of fraud occurred before Deter was elected, the Court was quick to note that it “would not have resulted in any injury to Providence in the absence of the legislative acts,” establishing that immunity is applicable if the alleged harm would not have occurred but for the legislative acts.  Providence, 382 N.C. at 221

Key Takeaways

In summary, State-based legislative immunity is not absolute, like its judicial or prosecutorial counterparts; but rather is more akin to, and subject to the same limitations as, public official immunity. That being said, the limited the scope of legislative immunity could, in certain circumstances, have the additional effect of eliminating a plaintiff’s ability to assert an alternative claim directly under the North Carolina Constitution because legislative immunity merely presents additional requirements to State torts rather than operating as a complete bar. See Debaun v. Kuszaj, 238 N.C. App. 36, 40 (2014). Moreover, the but-for standard extends to all levels of government, as long as the officials are engaged in ‘“quintessentially legislative”’ acts. Providence, 382 N.C. at 221 (quoting Bogan, 523 U.S. at 55).

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