In the Court of Appeals’ latest batch of opinions, Beroth Oil Co. v. N.C. Department of Transportation, addressed the long-running issue of the applicability of the Map Act.  As you may have guessed, this show probably hasn’t run its course.

Beroth Oil arises out of the Map Act, which the General Assembly passed in 1987.  Under the Map Act, the Department of Transportation can file corridor maps or plats in places where it plans to construct a road.  Once the maps are filed, use of the land by the landowner is restricted for an indefinite period that may extend for decades, as happened here.  The landowners sued and the trial court allowed summary judgment for the DOT on plaintiffs’ claims of inverse condemnation.  In a companion case, Kirby v. N.C. Department of Transportation, the Court of Appeals reversed and the Supreme Court affirmed the Court of Appeals.  The result in Kirby applied to Beroth.

On remand, the trial court in Beroth allowed plaintiffs’ claims for partial summary judgment on the pleadings, finding that a taking of plaintiffs’ property rights had occurred via inverse condemnation.  The partial summary judgment order established a procedure for moving forward on plaintiffs’ involuntary condemnation claim.  The DOT appealed to the COA, where it was DOA.

In a somewhat divided opinion, the COA dismissed the appeal.  The first issue before the Court of Appeals was whether the appeal was interlocutory.  The majority found that it was and then considered whether it should nevertheless consider the appeal.  As to the DOT’s claim that a substantial right was implicated, the majority cited the existing two-part substantial-right test: the right involved must be substantial and enforcement of the right will be lost without interlocutory review.  The majority went on to note that the order being appealed set out procedures for the DOT to follow when filing plats under the Map Act.  Since no filings had taken place pursuant to the court order in question, the majority held that the DOT did not have a substantial right, at least not yet.

The majority next considered whether the DOT’s claim of sovereign immunity implicated a substantial right.  The majority found that sovereign immunity is an entire defense, not a substantial right.  Invoking the doctrine of natural rights, the majority noted that under both the North Carolina and United States constitutions, the taking of a property right from a landowner by a sovereign for a public use requires remuneration by the sovereign.  Because the General Assembly established a statutory framework allowing landowners to claim rights when their property was taken by means of eminent domain, the Court of Appeals found that the State implicitly had waived sovereign immunity.

Although the DOT denied in this appeal that a taking had occurred when plats were filed under the Map Act, the Court of Appeals found that the DOT had conceded in its earlier pleadings that its recordation of plats restricted the property owners’ property rights.  Relying on principles of judicial estoppel, the Court of Appeals happily cited the much-loved aphorism prohibiting the midstream swapping of horses.

The majority then dismissed the appeal because the grounds advanced by the DOT did not justify interlocutory intervention.

The dissent argued that the Court of Appeals had jurisdiction to consider the DOT’s arguments on their merits.  According to the dissent, the Court of Appeals should first have considered the existence of appellate jurisdiction, and then considered the merits.  We recently blogged on whether the Court of Appeals was putting the cart before the horse when it mingled the merits of a party’s argument with the questions of appellate jurisdiction.  Here, according to the dissent, a substantial right warranting immediate appellate review was implicated, and therefore, the Court of Appeals should have reached the merits of the DOT’s arguments.  However, the dissent went on to say that even if the Court of Appeals had found jurisdiction, the DOT’s arguments would fail on their merits.

Bilbo may have had it right in Book 1 of The Fellowship of the Rings:

The Road goes ever on and on
Down from the door where it began.
Now far ahead the Road has gone,
And I must go follow, if I can,
Pursuing it with eager feet,
Until it joins some larger way
Where many paths and errands meet,
And whither then? I cannot say.

Although the dissent gives the DOT the option of appealing the jurisdictional issue as a matter of right to the Supreme Court, the utility and even the wisdom of an appeal appears questionable.  As the dissenter notes, the panel is “essentially” in agreement that the issues raised by the DOT’s appeal lack merit.  Should DOT appeal on the basis of the dissent, it may be able to argue issues regarding application of the substantial rights doctrine to the facts here, based upon the majority’s claim in a footnote that the dissent misapplied the test for determining whether the substantial right doctrine applied.  As to the merits, however, the best that the DOT could hope for would be for the Supreme Court to remand the matter to the Court of Appeals for further review, where the outcome would appear to be a foregone conclusion.

The majority noted in its introductory paragraphs that “the litigation has progressed well past the point where sovereign immunity could be asserted, as it is a jurisdictional bar to suit against the State.”  Perhaps intentionally, neither the majority nor the dissent says anything about the doctrine that subject matter jurisdiction can be raised at any time.  Whether sovereign immunity implicates personal or subject matter jurisdiction is an unsettled issue that has long been at low boil in our appellate courts.  See here and here.

And so this case will roll on.  “And whither then?  I cannot say.”

–Bob Edmunds