Public Official Immunity for Intentional Torts? The Split Continues

Elected officials, law enforcement officers, tax collectors, zoning inspectors and other public officials sometimes face lawsuits over decisions they have made or actions they have taken. To prevent the fear of lawsuits from unduly influencing the judgment of public officials, the law extends personal liability protection to them in the form of public official immunity (“POI”).

POI will usually shield public officials from claims of negligent conduct, so long as they acted within the scope of their duties and without malice or corruption. The state’s case law is split, though, over whether POI can ever protect public officials from intentional tort claims such as assault, battery, and trespass. One line of cases answers that question in the negative. In the other line, public officials have successfully invoked POI to defeat intentional tort claims.

The North Carolina Court of Appeals recently issued a decision that comes down firmly on one side of the divide, keeping the split alive. After setting out POI’s basic features, this blog post briefly reviews that case and then examines the split in more detail, concluding that POI probably should be understood to bar some intentional tort claims. The post refers in several places to a 2016 Local Government Law Bulletin published by the School of Government and found online here.

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Retention Schedules for Local Governments: Five Things You Should Know

North Carolina law says: The public records and public information compiled by the agencies of North Carolina government or its subdivisions are the property of the people. (GS 132-1(b))This powerful commitment to transparency wouldn’t mean much if the custodians of public records could simply destroy any or all records, at will. Accordingly, the law makes it a crime for public officials to destroy public records without the consent of the Department of Natural and Cultural Resources (DNCR). (GS 132-3)Does that mean public officials have to get permission from the DNCR each time they want to discard or delete records? No! The Archives Division of the Government Records Section of the DNCR promulgates retention schedules, which establish minimum retention periods for the categories of records listed in the schedules. Local governments that have adopted these schedules may destroy records when their retention periods end.  As described on the DNCR website:

Retention schedules are the primary way that the Division of Archives and Records gives its consent to state and local governments to destroy their records.  

 In March 2019 the Archives Division released a new record retention schedule for local governments. You can learn more about changes they’ve made regarding the organization of the retentions schedules and the timing for future updates at their blog: The G.S. 132 Files. Read on to learn five things you should know about the new schedule.   Read more »

Construction in Progress and Property Tax Exemptions

If property is under construction, is it being “used” by its owner? That is the arcane but important question that the North Carolina Court of Appeals recently addressed in the Highwater Solar appeal concerning the 80% property tax exclusion available for solar electricity equipment in GS 105-275(45). The court’s answer was yes, construction counts as a qualifying use for the exclusion.

This decision might have big-time ramifications across the state, for two reasons. First, most exemptions require that an owner use property for an exempt purpose.  Second, local tax officials have long assumed that property under construction was not being used for an exempt purpose. If the Highwater Solar decision forces counties to change this practice for all exemptions and exclusions with a use requirement, many more properties will qualify for special property tax treatment across the state in coming years.  Read more »

The Charitable Hospital Exemption

The national trend towards consolidation of the healthcare industry under large providers is very evident across our state. Be it the purchase of western Carolina’s largest non-profit hospital system by an even larger healthcare provider or the continued expansion of Novant and Vidant health systems in central and eastern Carolina, our state has seen more and more hospitals and clinics operating under larger and larger corporate umbrellas.

These healthcare mergers and acquisitions raise the stakes for counties deciding when to grant the property tax exemption for charitable hospitals created by G.S. 105-278.8. If one of these mega-providers receives the exemption for one of its hundreds of hospitals and clinics, does that mean all of that mega-provider’s locations should be exempt? Novant alone operates over 600 healthcare sites.  The tax dollars involved are enormous. Read more »

Occupancy Taxes and AirBnB

North Carolina’s booming short-term rental (“STR”) industry presents both opportunities and challenges for local governments. The opportunities include more tourist spending and more tax revenue. The challenges include a loss of affordable housing and noise, trash, and traffic complaints as more residential properties are turned into “mini-hotels.” Also worrisome is the adversarial approach some STR websites have adopted towards cities and counties. WIRED magazine describes AirBnB’s strategy as “a city-by-city, block-by-block guerilla war against local governments” that involves secrecy, lawsuits, and heavy lobbying of state legislatures.  Read more »

Short-Term Rentals and Regulatory Approaches

In July Chris McLaughlin and I hosted a webinar on the topic of STR regulation and occupancy taxes (available here). We have also written a manual for local governments on these topics, which we hope will be available to readers this summer. In the meantime, I recognize that some local governments are ready to move forward with drafting short-term rental regulations. Therefore, this blog post offers some tips for local officials on how to approach STR regulation and offers ideas of what to include in an ordinance.

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More Legal Ethics Lessons from Penn State

[UPDATE: Adopting reasoning similar to mine below, in March 2019 the Pennsylvania Disciplinary Board rejected the 2018 ethics report and recommendation and concluded that Baldwin violated the attorney-client privilege held by the three Penn State executives. The Disciplinary Board recommended that Baldwin receive a public censure for her professional misconduct.  In February 2020, the Pennsylvania Supreme Court agreed with that Baldwin violated her duties of professional responsibility and ordered that she receive a public reprimand from the Disciplinary Board. That reprimand occurred in July 2020.]

The Penn State child abuse scandal first hit the national consciousness years ago but continues to make headlines today.  In 2019, the university’s former president Graham Spanier lost a state appeal of his conviction on child endangerment charges relating to his failure to properly report allegations of child abuse in 2001.  He then appealed to the federal courts, lost, and finally began serving his prison sentence in June 2021.  Two other senior Penn State executives served jail terms in 2017 for their guilty pleas on similar charges.

From my legal ethics perspective, the most important recent development was the issuance of a Pennsylvania state bar ethics report and recommendation in late 2018 concerning Cynthia Baldwin, Penn State’s former general counsel.  That report focused on some of the disturbing ethical issues relating to Baldwin’s conduct during the scandal that I raised in this 2014 blog post.

Although the 2018 ethics report concludes that Baldwin did not technically violate any legal ethics rules, it paints a troubling picture of an attorney who allowed her loyalty to her organizational client to become tainted by her relationships with that organization’s senior employees.  It also adopts an unusual and potentially problematic interpretation of the “Upjohn” warnings that organizational attorneys use to remind employees that they represent the organization and not individual employees.

Today’s blog post analyzes that ethics report and explains how it provides important professional responsibility lessons for all attorneys who represent organizations, be they local governments, universities, or private corporations.

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