Judicial Deference: Recent North Carolina Supreme Court Decisions

By Frank Trainor

This year the Supreme Court of North Carolina has released opinions addressing how courts in North Carolina treat administrative‐agency interpretations of statutes and regulations. The two cases are Savage v. N.C. Department of Transportation and Mitchell v. University of N.C. Board of Governors.

Prior to the Supreme Court pronouncements this year, judicial review of administrative decisions and interpretations of statutes and regulations had been performed de novo, as required by the North Carolina Administrative Procedure Act. Spoiler alert: it still is.

Savage v. N.C. Department of Transportation

In Savage, a state employee challenged the North Carolina Department of Transportation’s interpretation of a statute in an employment dismissal case.

The North Carolina Supreme Court held that:

• Courts must review questions of statutory interpretation de novo, meaning they may not defer to an agency’s interpretation of what the statute means.
• The court used the opportunity to “clarify the law” regarding judicial deference in North Carolina.  Although it had never held otherwise, it rejected any lower court opinions suggesting that courts should “defer” to agencies in interpreting statutes.
• “When this Court speaks of affording ‘due consideration’ or ‘great weight’ or any other form of ‘deference’ to the interpretation of state agencies or lower courts, this means only that we will consider and respect their reasoning. After all, the view of others tasked with interpreting the law always can inform our judgment.”

Mitchell v. University of N.C. Board of Governors

In Mitchell, a tenured professor challenged his dismissal in part by arguing that the university did not follow its own procedural regulations. At the Court of Appeals level, the court appeared to apply the deferential treatment provided in federal courts when reviewing an agency’s interpretation of its own regulations.

The North Carolina Supreme Court held that:

• North Carolina courts must apply traditional de novo review to an agency’s interpretation of its own regulations.
• The agency’s interpretation may inform a court’s judgment and aid in ascertaining the meaning of the law, but the agency’s interpretation is never binding.

In sum, when an agency interprets a statute or regulation, courts must independently determine whether that interpretation is correct. This is called de novo review and has always been the standard contained in the APA. Although it should never defer to the agency’s interpretation, a court’s decision should provide some weight or consideration to the agency interpretation. That weight can vary depending on the type of case. For example, an agency that has drafted a particular rule likely has a good idea of why it drafted it and what it intended to achieve.