November 16, 2011
In June 2007, seventeen-year-old Eric Williams died tragically at a public park in Elizabeth City, North Carolina. Eric was attending a high school graduation party when he drowned in a “swimming hole” in Fun Junktion Park, which a friend’s parents had rented out from the Pasquotank County Parks and Recreation Department. In the ensuing lawsuit, Williams v. Pasquotank County,1 Eric’s estate sued the county and the department for the young man’s wrongful death, alleging that the “swimming hole” was unsafe.
In their answer, the county and department asserted governmental and sovereign immunity. In a motion for summary judgment, they argued that they were immune from tort liability because the operation of the public park was a governmental function. The trial court denied the motion, and the county appealed. In a unanimous opinion issued in May, the North Carolina Court of Appeals affirmed.2
The issue presented was one that has vexed North Carolina courts for decades: When is a municipality liable for the negligence of its officers and employees? The court of appeals confronted the question head-on. Rather than confine itself to simply categorizing the county’s conduct in the case before it, the panel went out of its way to “distill the controlling law . . . and provide a coherent framework for future application.”3
In North Carolina and many other state courts, governmental immunity shields municipalities from negligence suits for the actions of their employees. The North Carolina Supreme Court explained long ago that “a municipal corporation may not be held civilly liable to individuals for the negligence of its agents in performing duties which are governmental in their nature and solely for the public benefit.”4 And despite the expansion of municipal activities, the availability of liability insurance, and the injustice the doctrine can affect in individual cases, the North Carolina Supreme Court has made clear that the abrogation of this doctrine must come—if it is to come at all—from the state legislature.5
But unlike the state’s immunity under the related sovereign immunity doctrine, a municipality’s immunity is not absolute. While sovereign immunity covers every act of the state, “[t]he more limited governmental immunity covers only the acts of a municipality or a municipal corporation committed pursuant to its governmental functions.”6 When a municipality exercises “the judicial, discretionary, or legislative authority conferred by its charter,” or “is discharging a duty imposed solely for the benefit of the public,” it performs its governmental functions and thus cannot be held liable for the negligence of its officers or employees.7 But when a municipality acts in its “ministerial or corporate character in the management of property for [its] own benefit, or in the exercise of powers, assumed voluntarily for [its] own advantage,” it performs proprietary functions and thus may be held liable for the damages caused by the negligence of its officers and agents.8 As the North Carolina Supreme Court succinctly explained in Britt v. City of Wilmington,
When a municipality is acting “in behalf of the State” in promoting or protecting the health, safety, security or general welfare of its citizens, it is an agency of the sovereign. When it engages in a public enterprise essentially for the benefit of the compact community, it is acting within its proprietary powers.9
The governmental-proprietary function doctrine, so stated, is well-settled and easily ascertained from North Carolina case law. It is in applying the doctrine to individual cases that courts often find that “making this distinction proves difficult.”10
North Carolina courts have highlighted a number of different factors that might be used to distinguish between governmental and propriety functions, any one of which might seem decisive. Some opinions have emphasized the function’s historical pedigree: Is the function one “traditionally provided by the local governmental units”?11 Others have asked the similar but distinct question whether a private corporation could perform the same task.12 Decisions have relied upon the characterization of a function as “governmental” by state statute13 or by prior judicial opinions that declare the function is directed at a public purpose.14 Yet others have explained that such labels are not controlling.15 Some decisions have found the collection of revenue to be “a crucial factor” in withholding governmental immunity.16 And still others have held that a fee that covers only the municipality’s costs will not transform a governmental function into a proprietary one.17 The result, as the North Carolina Supreme Court has itself recognized, is a doctrine consisting of “irreconcilable splits of authority and confusion as to what functions are governmental and what functions are proprietary.”18
Fun Junktion Park
And so the law stood when the North Carolina Court of Appeals was asked to determine whether Pasquotank County performed a governmental or proprietary function in its operation of Fun Junktion public park. Faced with such confused precedents, the court might have elected to follow one line of cases and issued a narrow decision that could have been embraced or distinguished by any future court.
For example, the court might have relied on the North Carolina General Assembly’s declaration that “the public good and the general welfare of the citizens of this State require adequate recreation programs,” and that “the creation, establishment, and operation of parks and recreation programs is a proper governmental function.”19 It might have emphasized the court of appeals’ earlier statement in Hare v. Butler that “[c]ertain activities are clearly governmental such as law enforcement operations and the operation of jails, public libraries, county fire departments, public parks and city garbage services.”20 Or it could have supported a conclusion that the park’s operation was proprietary or governmental by relying on either of two conflicting opinions of the North Carolina Supreme Court categorizing the operation of other public parks.21
But the court did none of these things. Instead, it attempted to do what previous courts had not: harmonize the controlling law and provide “a coherent framework for future application” of the governmental-proprietary function distinction.22
The court’s new framework, derived from many of the cases discussed above, is a four-part test that instructs courts to consider:
(1) whether an undertaking is one traditionally provided by the local governmental units;
(2) if the undertaking of the municipality is one in which only a governmental agency could engage or if any corporation, individual, or group of individuals could do the same thing;
(3) whether the county charged a substantial fee; and
(4) if a fee was charged, whether a profit was made.23
Not all factors must be present; nor is any factor dispositive. But the second factor provides the “guiding principle.”24
As applied to Pasquotank’s operation of Fun Junktion, the court determined that the operation of a public park is “certainly . . . a function traditionally provided by the government.”25 However, the court continued, “it is equally clear that not all parks are operated by governmental units.”26 With respect to the fee, the court considered the $75 fee charged to the hosts of graduation party to be substantial.27 But, it noted, the $2,052 collected from such fees in the previous year was enough to recoup just 1.3% of the country’s operating costs for the park.28
After weighing each factor, mindful that the second consideration is most important, the court concluded that Pasquotank County was engaged in a proprietary function when it operated the party facilities at Fun Junktion.29 Accordingly, the defendants could not rely on governmental immunity to escape liability for the alleged negligence of its employees that led to the death of Eric Williams. The court of appeals thus affirmed the trial court’s denial of summary judgment.30
The North Carolina Court of Appeals’ decision in Williams was undoubtedly a significant one for the Williams family and Pasquotank County. But if the decision attains greater long-term significance, it will be found in the guidance the opinion provides to future courts and the clarity the court attempted to bring to an important but confused area of the law. Whether it will ever achieve that significance is—for now—up to the North Carolina Supreme Court. A petition for discretionary review is pending.31
* Jonathan Y. Ellis is a North Carolina native and an attorney with the Department of Justice in Washington, D.C.
1 Estate of Williams v. Pasquotank County Parks & Recreation Dep’t, 711 S.E.2d 450 (N.C. Ct. App. 2011).
3 Id. at 453.
4 Broome v. City of Charlotte, 182 S.E. 325, 326 (N.C. 1935).
5 Koontz v. City of Winston-Salem, 186 S.E.2d 897, 908 (N.C. 1972); see also Hodges v. City of Charlotte, 200 S.E. 889, 892 (1939) (Barnhill, J., concurring).
6 Evans v. Housing Auth. of Raleigh, 602 S.E.2d 668, 670 (N.C. 2004).
7 Moffit v. City of Asheville, 9 S.E. 695, 697 (N.C. 1889).
9 73 S.E.2d 289, 293 (N.C. 1952).
10 Hare v. Butler, 394 S.E.2d 231, 235 (N.C. Ct. App. 1990).
11 Willett v. Chatham County Bd. of Educ., 625 S.E.2d 900, 902 (N.C. Ct. App. 2006) (internal quotation marks omitted).
12 Britt, 73 S.E.2d at 293 (“[An undertaking] is proprietary and ‘private’ when any corporation, individual, or group of individuals could do the same thing.”).
13 Hickman v. Fuqua, 422 S.E.2d 449, 452 (N.C. Ct. App. 1992).
14 Evans, 602 S.E.2d at 671-72.
15 Rhodes v. City of Asheville, 52 S.E.2d 371, 373-74 (N.C. 1949).
16 Sides v. Cabarrus Mem’l Hosp., Inc., 213 S.E.2d 297, 303 (N.C. 1975); see also Glenn v. City of Raleigh, 98 S.E.2d 913, 919 (N.C. 1957).
17 James v. City of Charlotte, 112 S.E. 423, 424 (N.C. 1922); see also Evans, 602 S.E.2d at 671; Rich v. City of Goldsboro, 192 S.E.2d 824, 827 (N.C. 1972).
18 Koontz v. City of Winston-Salem, 186 S.E.2d 897, 907 (N.C. 1972).
19 NCGSA § 160A-351.
20 Hare v. Butler, 394 S.E.2d 231, 395 (N.C. Ct. App. 1990) (emphasis added).
21 Compare Glenn, 98 S.E.2d at 919 (proprietary), with Rich, 192 S.E.2d at 827 (governmental).
22 Estate of Williams v. Pasquotank County Parks & Recreation Dep’t, 711 S.E.2d 450, 453 (N.C. Ct. App. 2011).
27 Id. at 454.
31 Supreme Court of North Carolina, Docket Sheet, Estate of Erik Dominic Williams v Pasquotank County Parks & Recreation Department, et al, No. 231PA11-1 (Nov. 14, 2011), available at http://appellate.nccourts.org/dockets.php?court=1?court=1&docket=1-2011-0231-001&pdf=1&a=0&dev=1.