North Carolina Indian Cultural Center, Inc. v. State of North Carolina et al

Filing 25

ORDER GRANTING 12 Defendant's Motion to Dismiss, and DENYING AS MOOT 14 Plaintiff's Motion for Temporary Restraining Order, Preliminary Injunction, and Motion to Expedite. The Clerk is directed to close this file. Signed by US District Judge Terrence W. Boyle on 8/30/2013. Counsel directed to read Order in its entirety for critical information. (Fisher, M.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:13-CV-499-BO

NORTH CAROLINA INDIAN
CULTURAL CENTER, INC.,
Plaintiff,

)
)
)
)
v.
)
)
STATE OF NORTH CAROLINA and
)
NORTH CAROLINA DEPARTMENT OF )
ADMINISTRATION,
)
Defendant.
)

ORDER

This cause comes before the Court following a hearing on plaintiffs motion for temporary
restraining order and preliminary injunction before the undersigned on August 22, 2013, at
Raleigh, North Carolina. On August 23, 2013, the Court held in abeyance its consideration of
plaintiffs request for preliminary injunctive relief in light of its concerns regarding its subject
matter jurisdiction over the instant dispute. Plaintiff has responded to the Court's order, and the
matters are now ripe for ruling.
BACKGROUND
Plaintiff (NCICC or plaintiff) is a private, non-profit corporation that in 1994 entered into
a ninety-nine-year ground lease with the State for approximately 419 acres of land near Maxton,
North Carolina for the sum of $1.00 per year. The land was acquired by the State for the
development and construction of the Indian Cultural Center. The lease terms provide, inter alia,
that the land must be maintained and improved at no cost to the State, that NCICC shall construct
the Indian Cultural Center in accordance with a design plan, that NCICC shall maintain multiple
types of insurance coverage on the property, that the State shall retain a right to ingress and egress

to and from an adjacent parcel containing a golf course, and that any default or breach by NCICC
"shall constitute good cause whereby the [State] shall have the right, if it so elects, to terminate
this agreement and end its operation on any day by first giving not less than sixty (60) days written
notice to [NCICC]," provided NCICC has an opportunity to cure the breach and fails to do so.
On June 26,2013, the governor signed N.C. Session Law 2013-186 that directs the
Department of Administration to terminate the ground lease with NCICC within fifteen days of
enactment. On July 8, 2013, NCICC filed this action alleging that in passing Session Law 2013186 defendants violated the Contracts Clause ofthe United States Constitution, the prohibition on
Bills of Attainder, and the Due Process clause of the United States and North Carolina
Constitutions and that Session Law 2013-186 constitutes a taking under the Fifth and Fourteen
Amendments and in violation of the North Carolina Constitution.
On July 10, 2013, a notice oftermination letter was sent to NCICC which provided that
the ground lease shall terminate sixty days from the date of the letter. On July 31, 2013,
defendants moved to dismiss this action for lack of subject matter jurisdiction and failure to state
a claim upon which relief could be granted. NCICC filed a motion for preliminary injunctive
relief under Rule 65 of the Federal Rules of Civil Procedure on August 12, 2013.
DISCUSSION
Because defendant has challenged the Court's subject matter jurisdiction and plaintiff has
had an opportunity to respond, the Court considers first defendant's motion to dismiss pursuant to
Rule 12(b)(1) ofthe Federal Rules of Civil Procedure. Federal Rule of Civil Procedure 12(b)(1)
authorizes dismissal of a claim for lack of subject matter jurisdiction. When subject matter
jurisdiction is challenged, the plaintiff has the burden of proving jurisdiction to survive the

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motion. Evans v. B.F Perkins Co., 166 F.3d 642, 647-50 (4th Cir. 1999). "In determining
whether jurisdiction exists, the district court is to regard the pleadings' allegations as mere
evidence on the issue, and may consider evidence outside the pleadings without converting the
proceeding to one for summary judgment." Richmond, Fredericksburg & Potomac R.R Co. v.

United States, 945 F.2d 765, 768 (4th Cir. 1991).
NCICC contends that, but for the enactment ofN.C. Session Law 2013-186, this matter
would indeed be solely a contract dispute governed by state law and properly brought in the state
courts ofNorth Carolina. The asserted bases for jurisdiction in this Court, however, are NCICC's
claims that Session Law 2013-186 violates several provisions of the United States Constitution,
thereby invoking this Court's federal question jurisdiction. 28 U.S.C. § 1331. While NCICC is
correct to contend that the well-pleaded complaint rule ordinarily governs to determine whether
jurisdiction in this Court is proper, where subject matter jurisdiction has been challenged and
where a claim made to invoke federal question jurisdiction is found to be wholly unsubstantial,
dismissal under Rule 12(b)(l) is appropriate. Bell v. Hood, 327 U.S. 678, 682 (1946); see also

Kerns v. United States, 585 F.3d 187, 193 (4th Cir. 2009).
The Court has identified several areas of concern relating to its jurisdiction to consider the
instant dispute. First, while the Supreme Court has recognized an implied right of action under,
for example, the Fourth Amendment of the United States Constitution, see Bivens v. Six Unknown

Named Agents of Federal Bureau ofNarcotics, 403 U.S. 388 (1971), by enacting 42 U.S.C.
§ 1983 "Congress ... created a federal cause of action for 'the deprivation of any rights,
privileges, or immunities secured by the Constitution and laws."' Town of Castle Rock, Colo. v.

Gonzales, 545 U.S. 748, 755 (2005). The constitutional claims encompassed by the§ 1983 cause
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of action are numerous and diverse. Wilson v. Garcia, 471 U.S. 261,273 (1985). NCICC has
failed to allege any of its constitutional claims pusuant to § 1983. Second, insofar as plaintiffs
constitutional claims must be brought under § 1983, "neither a State nor its officials acting in their
official capacities are 'persons' under§ 1983" and are therefore not subject to suit. Will v.

Michigan Dep't ofState Police, 491 U.S. 58, 71 (1989); see also Howlett v. Rose, 496 U.S. 356,
365 (1990) ("Will establishes that the State and arms ofthe State ... are not subject to suit under
§ 1983 in either federal court or state court."). Additionally, regarding NCICC's Contracts Clause
claim, this circuit has held that "an attempted § 1983 action alleging state impairment of a private
contract will not lie" and that dismissal of the same under 12(b)(1) is appropriate. Crosby v. City

ofGastonia, 635 F.3d 634, 641 (4th Cir. 2011).
Third, while the Eleventh Amendment does not bar suits against state officials for
prospective injunctive reliefto prevent ongoing violations of federal law, Ex Parte Young, 209
U.S. 123, 159-60 (1908); see also Frew ex rei. Frew v. Hawkins, 540 U.S. 431,437 (2004),
NCICC has sued only the State and a state agency, not any state officials. The Eleventh
Amendment, raised as a defense by defendants at the hearing, therefore bars NCICC's claims for
prospective injunctive relief. Fourth, NCICC seeks money damages from the State for its actions,
but "it is well settled that the Eleventh Amendment bars a suit by private parties to recover money
damages from the state or its alter egos acting in their official capacities." Huang v. Bd. of

Governors ofUniv. ofN Carolina, 902 F.2d 1134, 1138 (4th Cir. 1990).
In light of the foregoing, NCICC has failed to satisfy its burden to show that subject matter
jurisdiction lies in this Court or that its claims made to invoke subject matter jurisdiction are not
wholly unsubstantial. Dismissal pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure

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..
is therefore appropriate.
CONCLUSION
For the reasons discussed above, defendants' motion to dismiss [DE 12] is GRANTED.
Plaintiffs request for relief under Rule 65 of the Federal Rules of Civil Procedure [DE 14] is
DENIED AS MOOT. The clerk is DIRECTED to close the file.

SO ORDERED, thisJQ_ day

oftf'~ol3.

T RRENCE W. BOYLE
UNITED STATES DISTRICT J

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