Legal Handbook for Council Members 2022

DATE:

August 11, 2022

TO:

Mayor and City Council

FROM:

Charles D. Watts, Jr., City Attorney

Analysis of Potential City Council Member Liability

SUBJECT:

As a general rule, “city council members . . . are entitled to absolute legislative immunity for all actions taken in the sphere of legitimate legislative activity.” Northfield Dev. Co. v. City of Burlington , 136 N.C. App. 272 (2000) Furthermore, city council members, when sued in their individual capacities for a violation of constitutional or statutory rights, are entitled to qualified immunity, which provides that they are shielded from personal liability so long as their conduct did not violate a “clearly established” right. Toomer v. Garrett , 155 N.C. App. 462 (2002). Despite these two immunities, courts have made clear that city council members “are personally liable to the government when they unlawfully disburse public funds, and the funds can be reclaimed either by the local government or a taxpayer suing on its behalf.” Sandra M. Stevenson, 5-77 Antieau on Local Government Law , Second Edition § 77.01 The North Carolina Constitution provides that “[t]he power of taxation shall be exercised in a just and equitable manner, for public purposes only[.]” N.C. Const. art. V, § 2(1). This constitutional mandate extends to all local government expenditures of public funds. Our courts have defined public purpose as “within the frame of governmental and proprietary power given to the particular municipality, to be exercised for the benefit, welfare and protection of its inhabitants and others coming within the municipal care.” Greensboro-High Point Airport Auth. v. Johnson , 226 N.C. 1 (1946). This definition is meant to expand to accommodate unique factual circumstances and changing societal conditions, and therefore “is not to be narrowly construed.” Madison Cablevision, Inc. v. Morganton , 325 N.C. 634 (1989). The “traditional test” for whether a particular expenditure satisfies the public-purpose definition turns on whether the expenditure (1) “involves a reasonable connection with the convenience and necessity of the particular municipality,” and (2) “benefits the public generally, as opposed to special interests or persons.” Id. Importantly, “[i]t is not necessary that a particular use benefit every citizen in the community to be labeled a public purpose[,]” id. , and payment to only select individuals does “not affect [an expenditure’s] public character”—“the test is not . . . who receives the money, but the character of the purpose for which it is to be expended.” Green v. Kitchin , 229 N.C. 450 (1948). Accordingly, Courts have found expenditures to be in furtherance of a public purpose in a wide variety of circumstances as permitted by statute and case law. CDW/jgs