IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA24-305

Filed 3 December 2024

Onslow County, No. 22CVS3264

Anthony L. Proctor, Sr.; Nicole Gonzalez; Octavius Raymond; The Spot Florida Style
Seafood, LLC; The Cheesesteak Hustle LLC; and Noah and Isidore, L.L.C., Plaintiffs,

v.

City of Jacksonville, et al., Defendants.

Appeal by Plaintiffs from order entered 2 January 2024 by Judge John E.

Nobles, Jr., in Onslow County Superior Court. Heard in the Court of Appeals 24

September 2024.

Cooper & Kirk, PLLC, by Nicole Jo Moss, and Institute for Justice, by Robert
Belden and Justin Pearson, pro hac vice, for Plaintiffs-Appellants.

Crossley, McIntosh, Collier, Hanley & Edes, PLLC., by Norwood P. Blanchard,

III, for Defendants-Appellees.

GRIFFIN, Judge.

Plaintiffs appeal from the trial court’s order granting Defendants’ motion to

dismiss under North Carolina Rule of Civil Procedure 12(b)(6). Plaintiffs argue the

trial court erred by granting Defendants’ motion because it applied the wrong legal

test to their claims and, even assuming the trial court had applied the correct legal

tests, their complaint adequately alleged facts sufficient to survive dismissal at the

Rule 12(b)(6) stage. We agree with both of Plaintiffs’ arguments and reverse the trial
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Opinion of the Court

court’s order dismissing Plaintiffs’ claims.

I. Factual and Procedural Background

This case arises out of tension between business owners in Jacksonville and

the City of Jacksonville (“the City”). In 2014, the City passed the Unified

Development Ordinance of the City of Jacksonville (“the UDO”). The UDO provides

numerous zoning maps which dictate the areas where a food truck may operate and

numerous regulations which provide the conditions food trucks and private-property

owners must meet before operating on private property.

A. The Parties

Plaintiffs are three individual business owners as well as the entities they own

and run. Plaintiff Anthony Proctor, a pastor and Marine veteran, and Octavious

Raymond, also a Marine veteran, own food trucks which they operate in and around

eastern North Carolina. Plaintiff Nicole Gonzalez, a lifelong resident of Jacksonville,

owns and operates a general store and small motor repair shop on her commercial

property in Jacksonville. Prior to opening the general store and repair shop,

Gonzalez’s property was used as a restaurant and includes an oversized parking lot

suitable for hosting food trucks. Plaintiffs Proctor and Raymond seek to operate their

food trucks in Jacksonville. Plaintiff Gonzalez seeks to host food trucks in the

parking lot of her property. Plaintiffs allege the UDO’s severe limitations on where

food trucks may operate is the embodiment of an unlawful protectionist scheme,

through which local officials seek to limit competition against brick-and-mortar

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restaurants. But for the severe restrictions, Plaintiffs Proctor and Raymond would

park their food trucks in Jacksonville and sell their culinary works and wares to

Jacksonville’s citizens. But for the severe restrictions, Plaintiff Gonzalez would invite

food trucks to her private commercial property and allow them to sell food thereon.

B. The UDO

In their complaint, Plaintiffs challenge select provisions of the UDO which

require an annual fee from food truck operators, restrict the area where food trucks

may operate, and restrict the signage they may use. Food vendors, the term the UDO

utilizes to describe food trucks, shall comply with the following challenged standards,

and failure to do so can result in the revocation of the Food Vendor Permit:

(2) Any Food vendor shall be at least 250 feet from any
other parcel containing: 1) a food vendor, 2) a low density,
medium density, high density residential or downtown
residential zoning district, and or 3) a restaurant;

...

(11) Food vendors-may only be placed on private property

with written approval (notarized) of the property owner.
Documentation shall be displayed in plain view at all
times;

(12) Food vendor signage is limited to:

i. Up to one 5’ x 5’ “A” frame sign within 20 feet of

the food truck/trailer/cart;

ii. Signage that can be placed on the food vendors

truck/trailer/cart including back lit menu boards. No
signage may be placed above the height of the food vendors
truck/trailer/cart;

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iii. Programmable electronic message center signs

are prohibited; and

iv. All other signage is prohibited including LED,

rope or strings of lights.

(13) Shall obtain a City of Jacksonville Food Vendor permit

(annual) to operate within the City limits and or
Extraterritorial Jurisdiction. A copy must be displayed
and in plain view at all times. In conjunction with the
permit process, the equipment shall be inspected and
approved by the Jacksonville Fire Department[.]

Plaintiffs allege the location restrictions prevent food truck operators from

conducting business in approximately ninety-six percent of property located in

Jacksonville. Because of these restrictions, Plaintiffs contend their rights to engage

in safe and lawful occupations are severely infringed.

C. Procedural History

On 7 December 2022, Plaintiffs filed their complaint against the City and its

officials in Onslow County Superior Court arguing the UDO unduly restricts their

ability to operate their businesses and seeking declaratory judgment, injunctive

relief, and nominal damages. Plaintiffs brought their claims under: (1) the Freedom

of Speech clause; (2) the Equal Protection clause; (3) the Fruits of Their Own Labor

clause; and (4) the Law of the Land clause.

Plaintiffs also allege the UDO requires unreasonably high fees in violation of

the North Carolina Supreme Court’s holding in Homebuilders Association of

Charlotte, Inc. v. City of Charlotte, 336 N.C. 37, 442 S.E.2d 45 (1994). Two months

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later, Defendants moved to dismiss Plaintiffs’ complaint. On 17 July 2023,

Defendants amended their motion, arguing the complaint should be dismissed

pursuant to Rules 12(b)(1), (2), (4), (5), and (6) of the North Carolina Rules of Civil

Procedure. After a hearing held on 23 October 2023, the trial court entered an order

on 2 January 2024 granting Defendants’ motion to dismiss pursuant to Rule 12(b)(6).

Specifically, the court stated it “can envision a number of reasonably conceivably

rational bases to support the challenged provisions of the [UDO][.]” Plaintiffs timely

appeal.

II. Analysis

Plaintiffs contend the trial court erred by granting Defendants’ motion to

dismiss. Specifically, Plaintiffs argue their complaint states colorable claims under

the North Carolina Constitution and the trial court erred by applying one blanket

legal standard for each claim. We agree.

As a threshold matter, we think it beneficial to engage in a brief summary of

municipalities’ powers. A municipality may enact ordinances, through the authority

granted to it by the General Assembly, that “define, prohibit, regulate, or abate acts,

omissions, or conditions, detrimental to the health, safety, or welfare of its citizens

and the peace and dignity of the city, and may define and abate nuisances.” Grace

Baptist Church of Oxford v. City of Oxford, 320 N.C. 439, 442–43, 358 S.E.2d 372, 374

(1987) (citing N.C. Gen. Stat. § 160A-174(a) (1982)); see also N.C. Gen. Stat. § 160A-

174(a) (2023). This grant of power is “broadly construed to include any additional

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Opinion of the Court

and supplementary powers that are reasonably necessary to effectuate the grant of

power.” Id. (citing N.C. Gen. Stat. § 160A-4 (1982)); see also N.C. Gen. Stat. § 160A-

4 (2023) (utilizing the same language).

Furthering this grant, “municipal ordinances are presumed to be valid.” State

v. Maynard, 195 N.C. App. 757, 759, 673 S.E.2d 877, 879 (2009) (citing McNeill v.

Harnett County, 327 N.C. 552, 565, 398 S.E.2d 475, 482 (1990)). Nonetheless, an

ordinance is invalid if it “infringes a liberty guaranteed to the people by the State []

Constitution.” N.C. Gen. Stat. § 160A-174(b)(1) (2023). To that end, government

action is void “when persons who are engaged in the same business are subject to

different restrictions or are treated differently under the same conditions.” Poor

Richard’s, Inc., v. Stone, 322 N.C. 61, 67, 366 S.E.2d 697, 700 (1988) (citing Cheek v.

City of Charlotte, 273 N.C. 293, 298, 160 S.E.2d 18, 23 (1968)).

In brief, municipalities have broad powers to enact ordinances regulating the

health, safety, and welfare of their constituents; however, that power ends where

unlawful differential and preferential treatment of certain citizens and entities at the

expense of others begins. Id. With this limitation in mind, we now turn to Plaintiffs’

claims regarding the City’s use of that power to regulate food trucks.

D. Standard of Review

We review a trial court’s order granting a motion to dismiss under Rule 12(b)(6)

de novo. Bridges v. Parrish, 366 N.C. 539, 541, 742 S.E.2d 794, 798 (2013). On

review, “we consider ‘whether the allegations of the complaint, if treated as true, are

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sufficient to state a claim upon which relief can be granted under some legal theory.’”

Id. (quoting Coley v. State, 360 N.C. 493, 494–95, 631 S.E.2d 121, 123 (2006)). As a

Rule 12(b)(6) motion tests the legal sufficiency of a complaint, Fuller v. Easley, 145

N.C. App. 391, 397–98, 553 S.E.2d 43, 48 (2001), “we treat the plaintiffs’ factual

allegations as true” while ignoring the plaintiffs’ legal conclusions. Skinner v.

Reynolds, 237 N.C. App. 150, 152, 764 S.E.2d 652, 655 (2014) (citations and internal

marks omitted). Documents “attached to and incorporated within a complaint” are

properly considered when ruling on a 12(b)(6) motion. Holton v. Holton, 258 N.C.

App. 408, 418–19, 813 S.E.2d 649, 657 (2018).

A 12(b)(6) motion to dismiss should be granted if “one of the following three

conditions is satisfied: (1) the complaint on its face reveals that no law supports the

plaintiff’s claim; (2) the complaint on its face reveals the absence of facts sufficient to

make a good claim; or (3) the complaint discloses some fact that necessarily defeats

the plaintiff’s claim.” Bissette v. Harrod, 226 N.C. App. 1, 7, 738 S.E.2d 792, 797

(2013) (citations and internal marks omitted). See also Williams v. Devere Const. Co.,

Inc., 215 N.C. App. 135, 142, 716 S.E.2d 21, 27–28 (2011) (utilizing the same standard

of review). However, where the trial court applies an incorrect legal standard it “per

se abuses its discretion.” Holmes v. Moore, 384 N.C. 426, 453, 886 S.E.2d 120, 140

(2023) (citation omitted).

E. Freedom of Speech Claim

Plaintiffs allege the UDO violates their rights to freedom of speech protected

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by Article I, section 14 of the North Carolina Constitution. Specifically, Plaintiffs

allege the UDO signage provisions “impose speaker- or content-based restrictions on

truthful and accurate speech by food trucks and the property owners who host them

without being directly related to any substantial or important interest, let alone being

narrowly tailored to a compelling government interest.”

Plaintiffs argue the trial court erred by applying an inapplicable legal standard

to their section 14 claim when granting Defendants’ motion to dismiss. Specifically,

Plaintiffs argue the trial court applied the rational basis test when it should have

applied strict or intermediate scrutiny. In support, Plaintiffs point to the order’s

language, which states that “the [c]ourt can envision a number of reasonably

conceivably rational bases to support the challenged provisions of the UDO, so the

Defendant City’s motion to dismiss the [c]omplaint should also be [allowed].”

Article 1, section 14 of the North Carolina Constitution provides that

“[f]reedom of speech and of the press are two of the great bulwarks of liberty and

therefore shall never be restrained, but every person shall be held responsible for

their abuse.” N.C. Const. art. I, § 14. This provision requires State action regulating

commercial speech to satisfy either strict scrutiny or intermediate scrutiny depending

on whether the regulation is content-based or content-neutral, respectively. Hest

Tech., Inc. v. State ex rel Perdue, 366 N.C. 289, 298, 749 S.E.2d 429, 436 (2012) (citing

Greater New Orleans Broad. Ass’n v. United States, 527 U.S. 173, 183–84 (1999)).

Thus, the rational basis test is inapplicable to the issue Plaintiffs alleged.

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We hold the trial court erred by applying the wrong legal test to their freedom

of speech claim. Holmes, 384 N.C. at 453, 886 S.E.2d at 140. Accordingly, we reverse

the trial court’s order on Plaintiffs’ Article I, section 14 claim and remand for analysis

under the applicable legal test. Id.

F. Equal Protection Claim

Plaintiffs next contend the trial court erred by applying the wrong legal

standard when dismissing their Equal Protection claim made under Article I, section

19 of the North Carolina Constitution. Defendants contend Plaintiffs are not

similarly situated to their alleged comparators. We agree with Plaintiffs and hold

their allegations were sufficient to survive dismissal at the Rule 12(b)(6) stage.

Article I, section 19 of the North Carolina Constitution states, in part, that

“[n]o person shall be denied the equal protection of the laws[.]” N.C. Const. art. I, §

19. The equal protection clause “‘requires that all persons similarly situated be

treated alike.’” Holmes, 384 N.C. at 437, 886 S.E.2d at 130 (quoting Blankenship v.

Bartlett, 363 N.C. 518, 521, 681 S.E.2d 759, 762 (2009)).

Under the Equal Protection clause of Article I, section 19, when a party

challenges a government regulation that classifies businesses and then treats those

businesses differently on the basis of said classification, we apply a twofold test,

asking: “(1) [is it] based on differences between the business to be regulated and other

businesses and (2) [are] these differences [] rationally related to the purpose of the

legislation[?]” Poor Richard’s, 322 N.C. at 64, 366 S.E.2d at 699 (citing State v.

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Harris, 216 N.C. 746, 758–59, 6 S.E.2d 854, 863 (1940)). If the answers to both

questions are yes, then the classification is permitted. Id.

To be completely clear, the Supreme Court in Grace Baptist stated “[a] party

seeking to prove that a municipality’s enforcement of a facially valid ordinance

amounted to a denial of equal protection must show that the municipality engaged in

conscious and intentional discrimination.” 320 N.C. at 376, 358 S.E.2d at 445

(emphasis added). Plaintiffs do not allege selective enforcement. Rather, they allege

“the 250-foot proximity bans thus create an arbitrary and irrational distinction

between (a) food trucks and the property owners who want to host them, and (b) other

businesses offering food and drink for sale to the general public, including brick-and-

mortar restaurants, and property owners who want to host them.” As the gravamen

of Plaintiffs’ claim focuses on the arbitrariness and irrationality of the distinctions

drawn in the UDO, not how the UDO is enforced, we agree with Plaintiffs that the

test the Supreme Court applied in Poor Richard’s governs here.

Turning now to Plaintiffs’ complaint, we hold they pled facts sufficient to

survive 12(b)(6) for their Equal Protection claim. Specifically, Plaintiffs, as food truck

owners, allege “[f]ood trucks are engaged in the same business as, or are similarly

situated to, other businesses offering food and drink for sale to the general public,

including brick-and-mortar restaurants, which are not subject to the 250-foot

proximity ban.” Plaintiff Gonzalez alleges that she and her company “are engaged in

the same property use as, or are similarly situated to, property owners who host

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businesses offering food and drink for sale to the general public, including brick-and-

mortar restaurants, but are not subject to the 250-foot proximity bans.” To exemplify

their contention that the UDO provides for different regulations based on arbitrary

distinctions and are imposed to further unlawful economic protectionism of

restaurants, Plaintiffs also allege “[t]he 250-foot proximity bans do not apply to other

businesses offering food and drink for sale to the general public, such as restaurants

with indoor and/or outdoor seating, drive-through restaurants, specialty-eating

establishments, produce stands, bars, taverns, clubs, convenience or drug stores, gas

stations, bed and breakfasts, or museums.”

To this point, the regulations do not prevent food trucks from parking or giving

food away on eligible property, they only prevent food trucks from “selling food while

they are there.” Another consequence of the UDO’s classifications is that “[a]

specialty-eating establishment like a bakery, a coffee shop, or an ice cream shop could

open on Eligible Property next door to a restaurant, residential property, or a food

truck . . . , but a food truck offering the very same baked goods, coffee, or ice cream

could not.” Plaintiffs’ Complaint contains numerous other factual allegations

explaining how the UDO’s classifications allow for businesses engaged in

substantially the same business as Plaintiffs, namely selling food and drink, to set

up shop in areas that food trucks may not.

Despite the alleged similarities between Plaintiffs and other businesses,

Plaintiffs’ assert that “[t]he 250-foot proximity bans do not draw the classification

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between food trucks and all other businesses offering food and drink for sale to the

general public, including brick-and-mortar restaurants, based on any legitimate

distinguishing feature of food trucks or the property owners who would host them.”

These allegations, taken as true, are sufficient to satisfy the first part of the

test–the UDO’s harsher restrictions on food trucks are not based on any differences

between Plaintiffs’ businesses, subject to those restrictions, and other business which

are not. See Cheek v. City of Charlotte, 273 N.C. 293, 296, 160 S.E.2d 18, 21 (1968)

(“The legislature may not, under the guise of protecting the public interests,

arbitrarily interfere with private business, or impose unusual and unnecessary

restrictions upon lawful occupations.” (citation and internal marks omitted)).

Moreover, Plaintiffs’ two allegations that the regulation (1) is “solely to further the

unconstitutional purpose of protecting brick-and-mortar restaurants from

competition[,]” and (2) classifies “without substantially or reasonably furthering any

constitutionally legitimate, permissible, or substantial government purpose[,]” are

sufficient to satisfy the second prong of the test. See Roller v. Allen, 245 N.C. 516,

525, 96 S.E.2d 851, 859 (1957) (striking down a licensing scheme because, in part,

“[t]he [a]ct in question here has as its main and controlling purpose not health, not

safety, not morals, not welfare, but a tight control of tile contracting in perpetuity by

those already in the business”). Taken as true, Plaintiffs sufficiently allege the UDO’s

differential classifications are not rationally related to the purpose of the ordinance

nor are they based on a permissible purpose.

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These allegations essentially allege that, despite being in the same business,

Plaintiffs and their respective businesses are “subject to different restrictions [and]

are treated differently under the same conditions.” Poor Richard’s, 322 N.C. at 67,

366 S.E.2d at 700 (citing Cheek, 273 N.C. at 298, 160 S.E.2d at 23). To Plaintiffs’

argument the trial court applied the wrong test, we agree in that the test requires

the trial court to engage in a more nuanced analysis than just addressing whether it

can envision “reasonably conceivably rational bases.” However, the ultimate inquiry

does lie in ascertaining whether the government’s distinctions are drawn based on

actual differences between businesses and whether that distinction is rationally

related to the promotion of a permissible government interest. Nonetheless, taking

their allegations as true, which we are required to do, Plaintiffs sufficiently alleged

facts to survive Defendants’ Rule 12(b)(6) motion for their Equal Protection claim.

Accordingly, we reverse the trial court’s order dismissing this claim.

G. Fruits of Their Own Labor and Law of Land

Plaintiffs argue the trial court erred by dismissing their claims brought under

the Fruits of Their Own Labor clause contained in Article I, section 1 and the Law of

the Land clause contained in Article I, section 19 of the North Carolina Constitution

because it utilized the wrong legal standard when dismissing these claims. We agree.

When a state actor infringes upon a right protected by the North Carolina

Constitution, the common law “will furnish the appropriate action for the adequate

redress of a violation of that right.” Corum v. Univ. of N.C. Through Bd. Of

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Governors, 330 N.C. 761, 782, 413 S.E.2d 276, 289 (1992) (citation omitted). The

Fruits of Their Labor clause provides: “We hold it to be self-evident that all persons

are created equal; that they are endowed by their Creator with certain inalienable

rights; that among these are life, liberty, the enjoyment of the fruits of their own

labor, and the pursuit of happiness.” N.C. Const. art. I, § 1.

Our Supreme Court has recognized substantive economic protections under

the Fruits of Their Labor Clause prevent the State and consequently its political

subdivisions from creating and enforcing regulations that impede “legitimate and

innocuous vocations by which men earn their daily bread.” State v. Ballance, 229

N.C. 764, 770–72, 51 S.E.2d 731, 735–36 (1949) (holding a licensing scheme for

photographers violated the Fruits of Their Labor Clause); see also Roller, 245 N.C. at

525–26, 96 S.E.2d at 859 (holding a licensing scheme for ceramic tile installers

violated the Fruits of Their Labor Clause).

The Law of the Land clause, on the other hand, provides: “No person shall be

taken, imprisoned, or disseized of his freehold, liberties, or privileges, or outlawed, or

exiled, or in any manner deprived of his life, liberty, or property, but by the law of the

land.” N.C. Const. art. I, § 19. This provision, analogous to the Fourteenth

Amendment’s Due Process Clause, “serves to limit the [S]tate’s police power to actions

which have a real or substantial relation to the public health, morals, order, safety or

general welfare.” Poor Richard’s, 322 N.C. at 64, 366 S.E.2d at 699 (citing A-S-P

Associates v. City of Raleigh, 298 N.C. 207, 213, 258 S.E.2d 444, 448 (1979)).

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Thus, both the Fruits of Their Own Labor clause and the Law of the Land

clause protect citizens’ constitutional right to earn a living from arbitrary regulations.

See id. (“These constitutional protections have been consistently interpreted to

permit the [S]tate, through the exercise of its police power, to regulate economic

enterprises provided the regulation is rationally related to a proper governmental

purpose.”). When state actors infringe upon these rights, citizens may seek redress

through a Corum claim. See Corum, 330 N.C. at 782, 413 S.E.2d at 289 (“Therefore,

in the absence of an adequate state remedy, one whose constitutional rights have

been abridged has a direct claim against the State under our Constitution.”).

To sufficiently plead a Corum claim, a complaint must allege: (1) a state actor

violated the plaintiff’s state constitutional rights; (2) “the claim must be colorable,

meaning that the claim must present facts sufficient to support an alleged violation

of a right protected by the State Constitution[;]” and (3) no adequate state remedy

exists for the alleged constitutional violation. Kinsley v. Ace Speedway Racing, Ltd.,

__ N.C. __, __, 904 S.E.2d 720, 726 (2024) (cleaned up).

With respect to the second prong, “[a] single standard determines whether [an]

ordinance passes constitutional muster imposed by both section 1 and the ‘law of the

land’ clause of section 19: the ordinance must be rationally related to a substantial

government purpose.” Treants Enter., Inc. v. Onslow County, 320 N.C. 776, 778–79,

360 S.E.2d 783, 785 (1987). “[T]o survive constitutional scrutiny under this provision,

the challenged state action ‘must be reasonably necessary to promote the

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accomplishment of a public good, or to prevent the infliction of a public harm.’” Ace

Speedway Racing, Ltd., __ N.C. at __, 904 S.E.2d at 726 (quoting Ballance, 229 N.C.

at 768, 51 S.E.2d at 731 (1949)). “This test involves a “twofold” inquiry: ‘(1) is there

a proper governmental purpose for the statute, and (2) are the means chosen to effect

that purpose reasonable?’” Id. (quoting Poor Richard’s, 322 N.C. at 64, 366 S.E.2d at

697).

As the test for colorability is the same, we analyze the sufficiency of both

Plaintiffs’ Fruits of Their Labor claim and Law of the Land claim below. Here,

Plaintiffs pled the City of Jacksonville, a municipality authorized to act by the

General Assembly, and its officials violated their Article I, sections 1 and 19 rights

through the enactment and enforcement of the UDO. As municipalities are State

actors in that they derive their power from the General Assembly, see King v. Town

of Chapel Hill, 367 N.C. 400, 406, 758 S.E.2d 364, 370 (2014) (“The General Assembly

has delegated a portion of this [police] power to municipalities through N.C. Gen.

Stat. § 160A-174.”), we hold this allegation sufficient to meet the requirements of the

first prong necessary to allege a Corum claim. Next, Plaintiffs allege, and we agree,

that no administrative remedies were available to them. As Defendants do not

contest either of these two prongs, we only address whether Plaintiffs’ Complaint

alleges facts sufficient to support colorable Article I, section 1 and section 14 claims

under the standard set forth in Poor Richard’s.

Here, Plaintiffs allege the City and its officials enacted the UDO, and the

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challenged provisions therein, “to protect brick-and-mortar restaurants from

competition.” In support of this contention, Plaintiffs point to the UDO’s enactment

history. Plaintiffs allege the UDO initially provided for a less restrictive scheme

which would have allowed food trucks to operate within a larger area of Jacksonville.

However, the UDO was redrafted because “in the restaurant owners’ view, the

original overlay map did not sufficiently insulate them from competition.” As a result

of this pressure, “the City Council considered allowing food trucks only if they did not

operate within 250 feet of, among other things, any other parcel with a restaurant.”

This consideration ultimately became the codified version of the UDO.

As entities who are engaged in the same business should be subject to the same

restrictions, Poor Richard’s, 322 N.C. at 67, 366 S.E.2d at 700, an allegation that the

government enacted a regulation solely to benefit a subset of businesses at the

expense of another subset within the same line of business, here food purveyors, is

sufficient to meet prong one. Thus, taking Plaintiffs’ allegations as true, we hold they

sufficiently pled an unlawful and improper governmental purpose for the UDO.

Accordingly, as the first prong of Poor Richard’s test for a colorable constitutional

claim under Article I, sections 1 and 19 is met, we do not reach the second question

of whether the means chosen to affect that purpose are reasonable. Rather, we

reverse the trial court’s order dismissing Plaintiffs’ claims under the Fruits of Their

Own Labor clause and the Law of the Land clause.

H. Ultra Vires Claim

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Plaintiffs again contend the trial court erred in applying the “reasonably

conceivably rational basis test” to their claim that the UDO’s permitting fee is

unreasonable and ultra vires. We agree.

Section 160A-4 of the North Carolina General Statutes provides that “[i]t is

the policy of the General Assembly that the cities of this State should have adequate

authority to execute the powers, duties, privileges, and immunities conferred upon

them by law.” N.C. Gen. Stat. § 160A-4 (2023). To that end, “the provisions of

[Chapter 160A] and of city charters shall be broadly construed and grants of power

shall be construed to include any additional and supplementary powers that are

reasonably necessary or expedient to carry them into execution and effect[.]” Id.

However, this grant of power is not without limits. In Homebuilders Association of

Charlotte, Inc. v. City of Charlotte, our Supreme Court held that when a city has the

authority to assess fees for a given purpose, “such fees will not be upheld if they are

unreasonable.” 336 N.C. at 46, 442 S.E.2d at 51 (citations omitted). There, the Court

addressed whether a fee schedule requiring commercial builders in Charlotte to pay

for various government services was within the scope of authority granted to

municipalities by the General Assembly. Id. at 41–42, 442 S.E.2d at 48–49.

Concluding Charlotte did have the authority to enforce the fee schedule, the Supreme

Court nonetheless provided a second condition to be met prior to upholding a

municipalities enforcement of user fees: namely, that the fees be reasonable. Id. at

46, 442 S.E.2d at 51 (citing Lawrence, Local Government Finance in North Carolina,

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§ 311, at 68 (2d ed. 1990) (“Because the purpose of such a fee or charge is to place the

cost of regulation on those being regulated, a rough limit to ‘reasonableness’ is the

amount necessary to meet the full cost of the particular regulatory program.”)). The

Court relied on the trial court’s findings of fact in holding Charlotte’s user fees to be

reasonable. Id. at 46–47, 442 S.E.2d at 51–52.

Here, Plaintiffs allege the fees were not set based on the City’s actual or

reasonably anticipated costs nor that the fees “bear any relationship to the City’s

actual or reasonably anticipated cost to regulate food trucks.” Rather, Plaintiffs

contend, the fees were set “based on a comparison to the approximate property tax

burdens on some properties where brick-and-mortar restaurants are located[,]” which

results in the fee amounts exceeding the actual or reasonably anticipated cost for the

City to enforce the UDO regulations. In support of their contentions, Plaintiffs point

towards other neighboring municipalities which charge smaller user fees for food

truck operators. Moreover, in support of their allegation that the fees are not related

to the actual cost of regulation, Plaintiffs explain that “[a]lmost all regulatory

oversight of food trucks is conducted by other governmental groups.” These

allegations are sufficient to survive a Rule 12(b)(6) dismissal when making a claim

asserting municipalities’ user fees are unreasonable and ultra vires.

As the trial court dismissed Plaintiffs’ claim on a Rule 12(b)(6) motion, neither

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Opinion of the Court

party presented evidence as to how the fees were calculated, collected, or used 1.

Without this information, neither we nor the trial court may say whether the fees

were rational or reasonable in this instance. This is not to say that a claim

challenging a municipality’s user fees will never be subject to a Rule 12(b)(6)

dismissal. Rather, here, evidence relating to the fees will be necessary to make a

determination of whether they are unreasonable and thus ultra vires.

Accordingly, we hold the trial court erred by dismissing Plaintiffs’ claims

because it could “envision a number of reasonably conceivably rational bases to

support the challenged provisions of the UDO[,]” without analyzing whether

Plaintiffs’ complaint contained facts sufficient to support their allegation that the

user fees were reasonable or related to the City’s regulation enforcement cost.

III. Conclusion

While cognizant that the UDO enjoys a presumption of validity, we nonetheless

hold the trial court erred by applying an erroneous blanket-test to Plaintiffs’ claims.

As a result of this error, we reverse the trial court’s order granting Defendants’

motion for summary judgment. Moreover, as Plaintiffs pled facts sufficient to survive

12(b)(6), we remand for further proceedings.

1 We note that the City’s Director of Planning and Inspections, Ryan King, submitted an
affidavit to the court containing some of this information. The court, however, only considered the
affidavit for the sole purpose of determining whether it had jurisdiction to hear Plaintiffs’ claims. See
Marlow v. TCS Designs, Inc., 288 N.C. App. 567, 572, 887 S.E.2d 448, 453–54 (2023) (“The trial court
‘need not confine its evaluation of a Rule 12(b)(1) motion to the face of the pleadings, but may review
or accept any evidence, such as affidavits, or it may hold an evidentiary hearing.’” (quoting Harris v.
Pembar, 84 N.C. App. 666, 667, 353 S.E.2d 673, 675 (1987)).

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Opinion of the Court

REVERSED AND REMANDED.

Judges TYSON and COLLINS concur.

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