Gov. Josh Stein and State Treasurer Brad Briner are offering the North Carolina Court of Appeals contrasting views about how a recent court ruling affects their legal battle over a state Utilities Commission appointment.
At stake is a commission seat now held by Donald van der Vaart, former director of the state Office of Administrative Hearings and a state environmental secretary in former Republican Gov. Pat McCrory’s administration. Briner appointed van der Vaart to the Utilities Commission based on provisions in 2024’s Senate Bill 382.
State legislative leaders side with Briner in the Stein v. Hall lawsuit. All three parties submitted Appeals Court briefs Thursday. The case is scheduled for oral arguments Tuesday.
Appellate judges asked the governor, treasurer, and Republican legislative leaders to respond to the court’s Oct. 15 decision in Stein v. Berger. That case involves the governor’s challenge to state laws changing appointments to seven state boards and commissions.
The Appeals Court sided with Stein on three of the challenged boards but upheld the legislature’s changes to the other four groups.
Stein v. Hall combines three separate challenges to recent state law. One targets new limits on the governor’s choices when filling statewide judicial vacancies. The second covers the shift of one of Stein’s Utilities Commission appointments to Briner. The third involves changes to the membership and voting rules for the state Building Code Council.
Thursday’s briefs addressed only the Utilities Commission and Building Code Council issues.
Legislative leaders referred to the Stein v. Berger case in their brief as “Stein Appointments.”
“The Court’s decision in Stein Appointments forecloses the Governor’s challenge to the Utilities Commission and the Building Code Council (‘BCC’),” the legislators’ lawyers wrote. “There, the Court affirmed the trial court’s ruling that appointment structures almost identical to the ones at issue here were not unconstitutional. Its decision therefore controls the outcome here.”
The recent Appeals Court decision “upheld changes to three boards and commissions that are effectively the same as the changes to the Utilities Commission,” according to legislators’ brief. “In that case, the Court upheld legislation that restructured the Environmental Management Commission (‘EMC’), Wildlife Resources Commission (‘WRC’), and Coastal Resources Commission (‘CRC’). The executive branch appoints a majority of the members of each commission, although that majority is split between the Governor and another member of the Council of State, who appoints either one or two members. That is the same structure as the Utilities Commission, which consists of five members, with two appointed by the Governor, one appointed by the Treasurer, and the remaining two by the General Assembly.”
“The executive branch, through the Governor and Treasurer, continues to appoint a majority of the Utilities Commission’s members,” the brief added. “The executive branch thus ‘exert[s] most of the control over the executive policy that is implemented’ by the Utilities Commission.”
The recent Appeals Court ruling “likewise confirms the constitutionality of the General Assembly’s changes to the BCC,” lawmakers argued. Appellate judges endorsed the same appointment structure as it applied to a new group called the Residential Code Council.
Briner’s brief refers to Stein v. Berger as the “Boards and Commissions Case.”
The Appeals Court decision “seals the fate of the Governor’s challenge to the restructuring of the North Carolina Utilities Commission,” Briner’s lawyers wrote. “Just like the transfer of appointment authority among Council of State members in the Boards and Commissions Case was constitutionally permissible, the transfer of one of the Governor’s appointments to the Treasurer likewise complies with the constitution.”
The treasurer cited two other reasons to reject Stein’s arguments in the Utilities Commission dispute.
“First, Governor Stein, before insisting on controlling the Utilities Commission, should show that his office has been constitutionally assigned such power in the first place,” Briner’s lawyers wrote. “Here, no constitutional or statutory provisions assign the Governor’s office the power to control the Utilities Commission and, based on the Commission’s history, such power is not inherent in the Governor’s office.”
Second, the Utilities Commission “is not a primarily executive agency,” the treasurer’s brief argued. “Although the Utilities Commission implements legislation, it does so through its judicial and legislative powers — not executive powers. The Supreme Court has consistently understood the Commission to be a quasi-judicial agency; and the Supreme Court has also held that when the Utilities Commission sets utility rates and makes utility rules, it is exercising legislative powers.”
The governor’s brief labels the Stein v. Berger case “Stein Commissions.”
“This Court concluded — relying at least in part on a nonprecedential Supreme Court order — that the Governor’s duty of faithful execution is nonexclusive and that executive appointments could therefore be redistributed between the Governor and the Commissioner of Agriculture or Commissioner of Insurance for the commissions under analysis,” the governor’s lawyers wrote.
“Stein Commissions, however, did not explicitly resolve significant questions raised by the Governor’s challenge to the structure of the North Carolina Utilities Commission in this case,” the governor’s brief continued. “Specifically, the Court did not address the fact that allowing the General Assembly to divide executive appointments between the Governor and Council of State without limitation — even in the period immediately following an election — means that the General Assembly, not the Governor, can exert most of the control over the executive policy of an administrative agency (directly through its own appointees and indirectly through the Council of State member of the legislature’s choosing).”
The recent appellate ruling “did not consider whether the General Assembly’s bestowal upon the Treasurer of appointment authority to the Utilities Commission was improper given the lack of any reasonable connection between the Treasurer and the Utilities Commission,” Stein’s lawyers wrote. “This panel could thus hold for the Governor in his appeal of Senate Bill 382’s changes to the Utilities Commission without creating a conflict with Stein Commissions.”
Stein conceded that the Oct. 15 decision resolved his challenge to the Building Code Council’s structure.
“The Governor disagrees with the panel’s holding and preserves all rights to appeal the Court’s decision with respect to the Residential Code Council in that case and any future decision by the Court regarding the Building Code Council in this case,” Stein’s brief explained. “But the Governor acknowledges that the challenged statutes relevant to the Building Code Council and the Residential Code Council are so similar that it would be difficult for panels of this Court to reach different conclusions with respect to those two entities.”
Judge John Tyson supported the majority opinion in Stein v. Berger. Tyson also serves on the Stein v Hall panel with Judges Valerie Zachary and Allegra Collins. Tyson and Zachary are Republicans. Collins is a Democrat.
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