Petition for Writ of Certiorari — Patsy Talley, Petitioner v. Dale R. Folwell, et al.

APPENDIX TABLE OF CONTENTS

OPINIONS AND ORDERS

Opinion, U.S. Court of Appeals for the Fourth

Circuit (April 4, 2025) ........................................ 1a

Order, U.S. District Court for the Eastern

District of North Carolina Eastern Division

(February 20, 2024) .......................................... 27a

Order, U.S. District Court or the Eastern District

of North Carolina Eastern Division

(January 17, 2023)............................................ 42a

REHEARING ORDER

Order Denying Petition for Rehearing,

U.S. Court of Appeals for the Fourth Circuit

(May 20, 2025) .................................................. 55a

OTHER DOCUMENTS

Complaint, U.S. District Court for the Eastern

District of North Carolina Eastern Division

(March 21, 2022) ............................................... 57a

Exhibit 2 to Complaint, Letter from Vicki

Roberts (March 19, 2019) ................................. 78a

Exhibit 3 to Complaint, Summary Sheet of

Overpayment Option 4 Amounts ..................... 79a

Exhibit 4 to Complaint, Final Decision

Summary Judgment, Beaufort County

Office of Administrative Hearings

(February 19, 2020) .......................................... 82a

App.1a

OPINION, U.S. COURT OF APPEALS

FOR THE FOURTH CIRCUIT

(APRIL 4, 2025)

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

________________________

PATSY TALLEY,

Plaintiff – Appellant,

v.

DALE R. FOLWELL, Individually and in his Official

Capacity as Treasurer of the State of North Carolina;

LENTZ BREWER; JOHN EBBIGHAUSEN;

VERNON GAMMON; DIRK GERMAN; BARBARA

GIBSON; LINDA GUNTER; OLIVER HOLLEY;

GREG PATTERSON; MARGARET READER;

JOSHUA SMITH; CATHERINE TRUITT;

JEFFREY WINSTEAD, individually

and in their official capacity,

Defendants – Appellees.

________________________

No. 24-1215

Appeal from the United States District Court for

the Eastern District of North Carolina, at Greenville.

Terrence W. Boyle, District Judge.

(4:22-cv-00027-BO)

Before: AGEE, QUATTLEBAUM, and RUSHING,

Circuit Judges.

App.2a

QUATTLEBAUM, Circuit Judge:

“There is no such thing as a free lunch.”1 This

appeal illustrates this old adage. For over eight

years, North Carolina paid Patsy Talley $857 more

in monthly retirement benefits than she was supposed

to receive. All told, Talley was overpaid to the tune of

$86,173.93. When North Carolina finally realized its

mistake, it notified Talley that going forward, her

monthly benefits would be reduced to recoup the

overpayment. Then, it began doing just that. In

response, Talley sued, asserting several constitutional

theories all premised on North Carolina’s failure to

provide a hearing before it began reducing her monthly

retirement payments. She never denied that she was

overpaid or disputed the amount. She instead

complained that the way North Carolina went about

recouping its overpayment failed to provide her due

process rights. The district court dismissed all her

claims under Rule 12 of the Federal Rules of Civil

1 This phrase has an interesting history. It seems to have

arisen in the late nineteenth century, when bars provided lunch

at no cost to lure in customers who would spend more than the

bar’s costs of providing lunch in alcohol purchases. See Rudyard

Kipling, RUDYARD KIPLING’S WEST: AMERICAN NOTES BY RUDYARD

KIPLING 19 (Arrell Morgan Gibson ed., 1981) (describing how he

discovered “the institution of the ‘Free Lunch’” while touring

the United States in 1889, in which “[y]ou paid for a drink and

got as much as you wanted to eat”); see also Phoenixania, THE

DAILY PHOENIX, Sept. 6, 1873, Vol. IX, No. 144 (“One of the most

expensive things in this city—Free lunch.”). Milton Friedman

later used the phrase as a book title to describe the economic

theory of opportunity costs. See Milton Friedman, THERE’S NO

SUCH THING AS A FREE LUNCH (1975). Colloquially, the point is

simple. Rarely, if ever, do you get something for nothing.

App.3a

Procedure. We agree that Talley failed to plead any

plausible claims. So, we affirm.

I.

A.

Talley retired from the Beaufort County School

System in 2008, after teaching in the district for over

25 years. The North Carolina Department of State

Treasurer has a Retirement System Division (“RSD”),

which in turn has a subdivision called the “Teachers’

and State Employees’ Retirement System” (“TSERS”).

J.A. 16. Talley participated in TSERS, accruing vested

retirement benefits while she worked as a teacher.

TSERS offers various options through which retired

teachers can receive their accrued benefits. Talley

chose an option that allowed her to receive “a larger

monthly payment than the maximum allowable benefits

until the month of her sixty-second birthday, after

which point [her] payment amount [would be] decreased

by an amount equal to an estimate of [her] social

security benefits.” J.A. 20. Under this method, her

overall income would remain constant even after her

retirement benefits decreased because her social

security benefits would offset that reduction.

At first, things worked as planned. Talley

“received $2,703.34 per month . . . until her 62nd

birthday.” J.A. 20. After her 62nd birthday, in December 2009, she began to receive a reduced monthly

benefits payment from TSERS, as expected. Also as

planned, Talley’s Social Security benefits made up

the difference. But in April of 2010, things began to

App.4a

go awry. At that time, TSERS2 determined that

Talley’s monthly payments were $17.90 less than they

should have been both before and after she turned

62. To rectify this mistake, TSERS paid Talley for

the total amount of the underpayments through April

2010. That corrective action itself was fine. But the

next month, TSERS made another mistake. This time,

it began paying Talley the recalculated “before age

62” amount when it should have sent the recalculated

“after age 62” amount. Since the recalculated “before

age 62” payment was more than the recalculated

“after age 62” payment, Talley was overpaid each

month beginning in April of 2010.

This overpayment continued for over eight years.

Finally, in August 2018, TSERS realized its mistake.

A few months later, the Executive Director of RSD

notified Talley by letter that she “had been overpaid

in the amount of $86,173.93. . . . ” J.A. 21. And about

one month after that, the Deputy Director of Member

Services of TSERS notified Talley, again by letter,

that her monthly checks would be reduced by $926.35

beginning in April of 2019. In April, Talley was

informed by email that she could appeal the reduction.

In response to this email, Talley’s lawyer asked

that an earlier email from Talley’s son to the North

Carolina State Treasurer inquiring about the reduction

in her pension payments be treated as an appeal.

Her lawyer also asked that any reduction in her

retirement payments be delayed until the matter

2 Talley refers to both RSD and TSERS throughout her complaint. With the understanding that these entities are not one

and the same, we will use the term TSERS in this opinion to

refer to both.

App.5a

was “resolved.” J.A. 22. Despite that, in April 2019,

Talley began receiving the reduced benefit checks.

On April 24, 2019, Talley was notified that the

final agency decision was to reduce her monthly

checks by 50%. In June, she filed a petition in the

Office of Administrative Hearings to stop the taking

of her property “without an opportunity to be heard.”

J.A. 23. While that administrative proceeding was

pending, TSERS agreed to reduce the amount of

recoupment each month. Instead of reducing her

benefits check by 50% each month, it agreed to reduce

it by just 10%. In other words, TSERS did not agree

to reduce the total amount it was seeking to recoup,

only to recoup at a slower pace.

As part of the administrative proceeding, TSERS

and Talley moved for summary judgment. On February

19, 2020, an Administrative Law Judge (“ALJ”) granted

TSERS’ motion for summary judgment and denied

Talley’s. In its decision, the ALJ found that Talley

was overpaid by $86,173.93. It then held that (1)

TSERS had a statutory obligation to recoup the

overpayment amount under N.C. Gen. Stat. § 14364.80(b); (2) the overpayment amount could be recouped

by offsetting the overpayment against an individual’s

retirement allowance; (3) “a contested case before the

Office of Administrative Hearings in the executive

branch is ‘not a proper method of challenging the

constitutionality of a statute’”; and (4) because there

was no dispute of material fact in controversy, Talley’s

petition should be dismissed. J.A. 65. In this final

decision, the ALJ notified Talley that she could appeal

the decision to the superior court of the county where

she resides. Talley did not exercise this right to appeal.

App.6a

B.

Talley sued the State of North Carolina, TSERS,

RSD, State Treasurer Dale Folwell (individually and

in his official capacity) and twelve current or former

members of TSERS’ board, individually and in their

official capacities, in federal court. She asserted claims

for (1) deprivation of due process under the U.S. Constitution; (2) deprivation of due process under the

North Carolina Constitution; (3) deprivation of equal

protection and substantive due process under the

U.S. Constitution; and (4) deprivation of equal protection and substantive due process under the North

Carolina Constitution. Talley primarily complained

that reducing her monthly benefits checks without

any sort of pre-deprivation hearing and without any

set protocol for how overpayments should be recouped

violated her due process and equal protection rights.

In her complaint, she purported to bring claims “on

behalf of herself and all similarly situated individuals . . . under 42 U.S.C. § 1983 for the deprivation of

property and property rights without due process.”

J.A. 15. But she has yet to file a motion for class certification. Thus, for our purposes, Talley is the only

plaintiff in this case.

After defendants moved to dismiss under Federal

Rules of Civil Procedure 12(b)(1) and 12(b)(6), Talley

voluntarily dismissed her claims against the State of

North Carolina, TSERS and RSD and her North

Carolina Constitution-based claims. That left the

individual TSERS Board of Trustees members as

defendants on the federal law-based claims. Then,

the district court dismissed Talley’s claims against

the defendants in their official capacities, explaining

that Talley’s claims did not allege ongoing violations

App.7a

of her rights and did not seek prospective relief. As a

result, the court held that the Eleventh Amendment

immunized the defendants from those claims. It also

dismissed Talley’s substantive due process claim,

explaining that “the availability of internal review”

and the “post-deprivation quasi-judicial hearing” meant

that she had received fair procedure and thus failed

to state a substantive due process claim. J.A. 83.

Next, the district court dismissed her equal protection

claim, holding that (1) she had “not alleged the

presence of any suspect class or the violation of a

fundamental right” and (2) that she had not shown

that “treating current employees and retirees differently

or reducing overpayment recoupment percentages

only for people who ‘push back’ [was] not rationally

related to a legitimate state interest, i.e., fully recouping

the overpayment of retirement benefits.” J.A. 84.

Last, as to Talley’s procedural due process claim

against the defendants in their individual capacities,

the district court held that Talley sufficiently alleged

a property interest in “the continued receipt of full

benefits prior to a reduction based upon the state’s

recoupment procedures” and that the process provided

to her prior to the initiation of recoupment procedures

was constitutionally inadequate. J.A. 81. This allowed

the individual capacity procedural due process claim

to go forward.

The defendants answered, asserting qualified

immunity, among other defenses. They also moved for

judgment on the pleadings under Rule 12(c). Around

the same time, Talley moved to amend her complaint

to add additional plaintiffs.

The district court granted the defendants’ Rule

12(c) motion, explaining that “plaintiff [] failed to res-

App.8a

pond substantively to whether defendants [were]

. . . entitled to qualified immunity” and thus waived

any arguments she could have otherwise made. J.A.

466. It further held that “even assuming, without

deciding, that the lack of pre-deprivation process

prior to a reduction in plaintiff’s retirement benefit

amounts to a violation of her procedural due process

right, it is not apparent that such a right was clearly

established, and thus defendants are entitled to

qualified immunity.” J.A. 468.

The district court also denied Talley’s motion to

amend her complaint. It did so because: (1) Talley

moved to amend her complaint nearly four months

after the “deadline to amend pleadings and join

parties” contained in the scheduling order; (2) the

motion itself was procedurally deficient because it

did not include the required proposed amended pleading

and failed to indicate how the amended pleading

differed from the original as required by local rule;

and (3) Talley had not shown the requisite good cause

for modifying the scheduling order under Federal Rule

of Civil Procedure 16(b)(4) to add potential plaintiffs,

at least some of which she knew of prior to the expiration of the deadline. J.A. 468–71. The district court

also noted that, even if good cause to modify the

scheduling order existed, “the proposed new plaintiffs

do not allege deprivation of the same property interest,”

and the benefits complained about by the proposed

plaintiffs were “not alleged to be managed by the

individual defendants who are . . . members of the

TSERS Board.” J.A. 470–71.

Talley now appeals: (1) the district court’s order

granting the individual defendants’ Rule 12(c) motion

for judgment on the pleadings as to her individual

App.9a

capacity procedural due process claim; (2) the district

court’s order granting the defendants’ Rule 12(b)

motion to dismiss as to her official capacity procedural

due process claim, her substantive due process claim

and her equal protection claim; and (3) the district

court’s denial of her motion to amend her complaint.3

II.

Talley argues that the district court erred in

dismissing her claims. We address each claim in turn

before reviewing the district court’s denial of Talley’s

motion to amend.

A.

Procedural Due Process – Official Capacity

Talley first appeals the district court’s dismissal

of her official capacity procedural due process claims.

She argues that the board members violated her

procedural due process rights by recouping the overpaid

benefits without providing sufficient process. And

she specifically complains that she was not afforded

a hearing before the defendants began reducing her

benefit checks.

But under the Eleventh Amendment, “[t]he Judicial power of the United States shall not be construed

to extend to any suit in law or equity, commenced or

prosecuted against one of the United States by Citizens

of another State, or by Citizens or subjects of any

Foreign State.” U.S. Const. amend. XI. “This immunity

has been judicially interpreted to run as well to

3 We review the district court’s grant of both the defendants’

motion to dismiss and their motion for judgment on the pleadings

de novo. See Mayfield v. Nat’l Ass’n for Stock Car Auto Racing,

Inc., 674 F.3d 369, 375 (4th Cir. 2012).

App.10a

actions by a state’s own citizens” including those

brought “against state agents or officials that are in

fact actions against the state as the real party in

interest.” Indust. Servs. Grp., Inc. v. Dobson, 68 F.4th

155, 163 (4th Cir. 2023) (cleaned up). However, the

Supreme Court has crafted an exception to this

immunity “for suits brought against state officials . . .

acting in violation of the Constitution. . . . ” Id. (citing

Ex parte Young, 209 U.S. 123, 160 (1908)). Under the

Ex parte Young exception, private citizens may

“petition a federal court to enjoin State officials in

their official capacities from engaging in future

conduct that would violate the Constitution or a federal statute.” Id. (internal quotation mark omitted)

(quoting Antrican v. Odom, 290 F.3d 178, 184 (4th

Cir. 2002)). To successfully bring a claim against a

state official in their official capacity for a violation of

the Constitution, plaintiffs must “allege an ongoing

violation of federal law and seek relief properly

characterized as prospective.” Verizon Md., Inc. v.

Pub. Serv. Comm’n, 535 U.S. 635, 645 (2002) (cleaned

up). Talley argues her official capacity procedural

due process claims fall within this Ex parte Young

exception to Eleventh Amendment immunity.

Talley’s arguments have several problems. For

starters, as conceded at oral argument, her primary

complaint is TSERS’ failure to provide her with sufficient process—mostly a hearing—prior to reducing her

benefits checks to recoup the overpayment. That

alleged failure occurred before she filed her complaint.

Thus, it is not ongoing conduct as required by Ex parte

Young.

Talley responds that even if the failure to provide sufficient process before the offsets began took

App.11a

place in the past, the continued recoupment from

each of her monthly pension payments is a

“consequence” of the earlier failure to provide predeprivation process that is itself an ongoing constitutional violation. And to be sure, “presently experienced

harmful consequences of past conduct” can be “ongoing

violations of federally protected constitutional rights.”

Republic of Paraguay v. Allen, 134 F.3d 622, 628 (4th

Cir. 1998) (collecting cases). For example, an injunction

can be issued to stop the ongoing, unequal underfunding of a school district even though the initial

funding decision was made in the past. Papasan v.

Allain, 478 U.S. 265, 282 (1986). An injunction

mandating a remedial education plan is permissible

to address the ongoing effects of a past policy of

racial segregation. Milliken v. Bradley, 433 U.S. 267,

288–90 (1977). An injunction can require that a state

employee terminated without due process be re-hired

because, although the termination took place in the

past, he experienced a “continuing violation” of his

property rights until he was re-hired. Coakley v.

Welch, 877 F.2d 304, 306–07 (4th Cir. 1989). And an

injunction enjoining the collection of taxes is permissible

even though the illegal assessment took place in the

past because future collection based on the past

assessment would violate federal law. CSX Transp.,

Inc. v. Bd. of Pub. Works of State of W. Va., 138 F.3d

537, 539, 542–43 (4th Cir. 1998).

Talley’s claims are not like any of these cases.

As explained in Republic of Paraguay, for a violation

to be ongoing, the officials being sued must be “in

violation of federal law at the precise moment when

the case was filed.” 134 F.3d at 628. Here, the

defendants were not in violation of federal law by the

App.12a

time Talley filed her complaint, if they ever were.

That’s because by that time, the defendants provided

the ALJ hearing at which she was able to oppose the

recoupment. See Tri-Cnty. Paving, Inc., v. Ashe Cnty.,

281 F.3d 430, 436 (4th Cir. 2002) (quoting Fields v.

Durham, 909 F.2d 94, 97 (4th Cir. 1990)) (stating

that “courts must consult the entire panoply of

predeprivation and postdeprivation process provided

by the state” to “determine whether a procedural due

process violation has occurred”). The ALJ hearing

did not end in the result that Talley hoped it would.

But her dissatisfaction with the outcome of that

hearing does not make the hearing deficient, nor

does she really argue that it was.

Talley’s only real complaint about the ALJ

hearing was her inability to raise constitutional

issues at the hearing. True, the ALJ noted that “[a]n

Administrative Law Judge follows the constitutional

rulings of the Judicial Branch but does not make

them” in response to Talley’s “constitutional argument

that she obtained a vested right to retain the overpaid

benefits.” J.A. 65. But the ALJ also informed Talley

in its final decision that she had a right to appeal

that decision to the superior court of the county

where she resided. She declined to do so. Her decision

not to avail herself of the appeals process—through

which she could have made her constitutional arguments in state court—does not render the process she

received constitutionally deficient. Thus, any recoupment now being pursued by defendants is not an

ongoing consequence of an inadequate process.

For all of these reasons, Talley’s official capacity

procedural due process claims are barred, and we

affirm the district court’s dismissal of them.

App.13a

B.

Procedural

Capacity

Due Process

–

Individual

Talley also argues that the district court erred in

holding that qualified immunity applies to her

procedural due process claims against the defendants

in their individual capacities. She argues that the

“presumptively valid” North Carolina statutes under

which the board members acted when recouping the

overpayments did not “require[] deprivation of property

without constitutionally mandated due process.” Op.

Br. at 17. And Talley contends that prior caselaw has

held that “the taking of property by the government

requires pre-deprivation due process.” Op. Br. at 20.

To begin, Talley fails to address the district court’s

statements that she did not make substantive arguments on qualified immunity below. Thus, she likely

waived her arguments on this point. See Volvo Const.

Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581,

603 (4th Cir. 2004) (stating that “absent exceptional

circumstances, we do not consider issues raised for

the first time on appeal”).

However, even if Talley did not waive them, her

arguments would fail. “Qualified immunity shields

government officials from civil damages liability unless

the official violated a statutory or constitutional

right that was clearly established at the time of the

challenged conduct.” Reichle v. Howards, 566 U.S.

658, 664 (2012). And “[i]n reviewing a district court’s

denial of qualified immunity, we conduct a twopronged analysis,” asking first “whether the plaintiff

has established that a constitutional violation occurred”

and second “whether the right at issue was ‘clearly

established’ at the time of the events in question.”

Rambert v. City of Greenville, 107 F.4th 388, 398 (4th

App.14a

Cir. 2024) (quoting Stanton v. Elliott, 25 F.4th 227,

233 (4th Cir. 2022)). Courts have discretion over the

order in which to address these two prongs. See id.;

see also Pearson v. Callahan, 555 U.S. 223, 236

(2009) (“The judges of the district courts and the

courts of appeals should be permitted to exercise

their sound discretion in deciding which of the two

prongs of the qualified immunity analysis should be

addressed first in light of the circumstances in the

particular case at hand.”). And here, like the district

court below, we address prong two first.

“A Government official’s conduct violates clearly

established law when, at the time of the challenged

conduct, the contours of a right are sufficiently clear

that every reasonable official would have understood

that what he is doing violates that right.” Ashcroft v.

al-Kidd, 563 U.S. 731, 741 (2011) (cleaned up). Ultimately, qualified immunity protects “all but the plainly

incompetent or those who knowingly violate the law.”

White v. Pauly, 580 U.S. 73, 79 (2017). Thus, “‘clearly

established law’ should not be defined ‘at a high level

of generality.’” Id. (quoting Ashcroft, 563 U.S. at

742). Instead, it “must be ‘particularized’ to the facts

of the case.” Id. (quoting Anderson v. Creighton, 483

U.S. 635, 640 (1987)). “Otherwise, plaintiffs would be

able to convert the rule of qualified immunity . . . into

a rule of virtually unqualified liability simply by

alleging violation of extremely abstract rights.” Id.

(cleaned up).

Talley’s arguments run headlong into two

problems. First, as the district court below observed,

“[r]arely will a state official who simply enforces a

presumptively valid state statute thereby lose her

immunity from suit.” Swanson v. Powers, 937 F.2d

App.15a

965, 969 (4th Cir. 1991). And North Carolina General

Statute § 135-9(b) provides that “any overpayment of

benefits or erroneous payments to a member in a

State-administered retirement system . . . who is later

determined to have been ineligible for those benefits

or untitled to those amounts, may be offset against

any retirement allowance. . . . ” North Carolina law

also requires the state to pursue the recoupment of

state funds; the state cannot simply forgive the

repayment of overpaid funds. See N.C. Gen. Stat.

§ 143-64.80.

Talley claims that these statutes do not immunize

the defendants because § 143-64.80(b) says that

overpaid benefits may be recouped “by all lawful

means available.” According to Talley, “by all lawful

means available” requires the pre-deprivation hearing

she claims she did not receive. She even suggests

that § 143-64.80 requires “the filing of a civil action

in the General Court of Justice” to recoup overpayments. § 143-64.80(b). She is incorrect on both counts.

Section 135-9(b) permits recoupment via an offset

against a retirement allowance—making that a “lawful means” available to the defendants. Also, § 14364.80 says that “all lawful means available” includes,

but is not limited to, filing a civil action to recover

the money. Thus, filing a civil action is not required.

As Talley concedes, these statutes are presumptively

valid. They do not on their face mandate that a predeprivation hearing be provided, nor do they say that

recoupment cannot be sought in the manner that the

officials used here. What’s more, we are aware of no

court that has held North Carolina’s recoupment

statutes are unlawful or unconstitutional. Accordingly, as in Swanson, no “extraordinary circumstances”

App.16a

exist that should compel us to abandon the ordinary

rule that “[u]ntil judges say otherwise, state officers . . .

have the power to carry forward the directives of the

state legislature.” Swanson, 937 F.2d at 969 (quoting

Lemon v. Kurtzman, 411 U.S. 192, 208 (1973)).

Second, existing caselaw does not “place[] the

. . . constitutional question [here] beyond debate.”

Adams v. Ferguson, 884 F.3d 219, 226–27 (4th Cir.

2018) (internal quotation mark omitted) (quoting

Reichle, 566 U.S. at 664). Talley’s argument that the

law clearly establishes the requirement of predeprivation due process before the government can

take property is too broad. Precedent from the Supreme

Court and our court requires that we look more

granularly to see whether the law clearly mandates

a hearing before the government recoups overpaid

retirement benefits. See White, 580 U.S. at 79; see

also Ashcroft, 563 U.S. at 742; Anderson, 483 U.S. at

640; Adams, 884 F.3d at 227–28. Here, the law does

not. In fact, we have found no court addressing these

factual circumstances.

It is true that the Supreme Court has held that

a pre-deprivation hearing is owed when the individual

being deprived of need-based benefits is “on the very

margin of subsistence” and when the risk of error

surrounding the deprivation is significant. Mathews

v. Eldridge, 424 U.S. 319, 340, 344 (1976) (citing

Goldberg v. Kelly, 397 U.S. 254, 264 (1970)). But the

Supreme Court has affirmed repeatedly, in opinions

to which Talley herself cites, that “due process,

unlike some legal rules, is not a technical conception

with a fixed content unrelated to time, place and circumstances.” Id. at 334 (quoting Cafeteria Workers v.

McElroy, 367 U.S. 886, 895 (1961)); see also Parratt v.

App.17a

Taylor, 451 U.S. 527, 540–43 (1981) (overruled in part

by Daniels v. Williams, 474 U.S. 327 (1986)); Goldberg,

397 U.S. at 263–64. Rather, it is “flexible and calls

for such procedural protections as the particular situation demands.” Mathews, 424 U.S. at 334 (internal

quotation mark omitted) (quoting Morrissey v. Brewer,

408 U.S. 471, 481 (1972)). And we know this to be

true because Mathews and its progeny tell us that

even individuals who face total deprivations of nonneed-based benefits prior to a hearing may have

received constitutionally sufficient process. 424 U.S.

at 343 (holding that, in a case involving a recipient of

social security, “there is less reason [] than in Goldberg

to depart from the ordinary principle, established by

our decisions, that something less than an evidentiary hearing is sufficient prior to adverse administrative action”). Mathews went on to explain that “[t]he

judicial model of an evidentiary hearing is neither a

required, nor even the most effective, method of decisionmaking in all circumstances.” Id. at 348.

Further, Talley’s claims are different from those

in Mathews. The benefits offset here to recoup overpayments were not need-based. Nor did Talley face a

total deprivation of her benefits, as the Goldberg and

Mathews plaintiffs did. Nor is there any evidence of a

great risk of error in calculating the amount to be

offset. Indeed, Talley does not claim any error in the

offset amount; she just says she should have had a

hearing before the offsets began. Thus, when we

analyze the right in question here at the appropriate

level of specificity, it becomes apparent that the

“contours of [the] right” Talley asserts are not clearly

established. Ashcroft, 563 U.S. at 741. Thus, we affirm

App.18a

the district court’s dismissal of Talley’s procedural

due process claim.4

C.

Substantive Due Process

As with her other claims, Talley argues that the

district court wrongly dismissed her substantive due

process claim. She contends that she has sufficiently

alleged that the officials’ actions were “so arbitrary

and capricious as to shock the conscience.” Op. Br. at

27. Specifically, she says that the board members

“had no written process for recoupment;” “unilaterally

and without reference to any written rules or policies”

commenced recoupment; and could take as little as

10% or as much as 100% of her pension amount “at

their option.” Op. Br. at 26–27.

To succeed on a substantive due process claim, a

plaintiff must demonstrate “(1) that he had property

or a property interest; (2) that the state deprived him

of this property or property interest; and (3) that the

state’s action falls so far beyond the outer limits of

legitimate governmental action that no process could

cure the deficiency.” Quinn v. Bd. of Cnty. Comm’rs

for Queen Anne’s Cnty., Md., 862 F.3d 433, 443 (4th

Cir. 2017) (emphasis in original) (cleaned up). Talley

does not come close to alleging facts that meet this

standard.

The bar to successfully state a substantive due

process claim is high. Substantive due process is a

“narrow” protection that “covers only state action

4 Since the right Talley asserts to have been violated is not

clearly established, we need not address Talley’s allegation that

the lack of pre-deprivation process violated her procedural due

process right.

App.19a

which is ‘so arbitrary and irrational, so unjustified by

any circumstance or governmental interest, as to be

literally incapable of avoidance by any pre-deprivation

procedural protections or of adequate rectification by

any post-deprivation state remedies.’” Sylvia Dev.

Corp. v. Calvert Cnty, Md., 48 F.3d 810, 827 (4th Cir.

1995) (quoting Rucker v. Hartford Cnty, 946 F.2d

278, 281 (4th Cir. 1991)). Where, as here, the alleged

deprivation “is amenable to ‘rectification by . . . postdeprivation state remedies,’” the officials’ actions are

“hardly arbitrary.” Mora v. City of Gaithersburg, 519

F.3d 216, 231 (4th Cir. 2008) (quoting Rucker, 946

F.2d at 281). Talley does not engage at all with the

fact that she received both pre-deprivation internal

review and a post-deprivation hearing before an ALJ

at which she was able to contest the fact and amount

of the recoupment. But it is undisputed that she

received both. Further, Talley does not allege or

argue that the deprivation she complains about—

recoupment of overpaid benefits—could not be rectified

via the post-deprivation hearing.

Instead, Talley makes two primary arguments.

First, she complains that the officials’ decision to

withhold only 10% instead of 50% of each monthly

benefit check indicates overbroad discretion. But a

substantive due process claim requires government

action that is so illegitimate that no process could

cure it. Talley does not allege facts that show the

officials’ recoupment efforts—even assuming they

were initially as arbitrary as she alleges—could not

be, and were not, rectified or cured by the ALJ

hearing she received. Besides, any flexibility in the

recoupment system inured to Talley’s advantage. At

App.20a

first, her benefit checks were reduced by 50%. Later,

they were reduced by only 10%.

Second, Talley contends that “the manner in

which the United States and several of the individual

States address overpayments” shows that the defendants’ actions were arbitrary and violated her substantive due process rights. Op. Br. at 33. But again,

what other states do is not the appropriate test.

Rather, our inquiry is whether Talley plausibly alleges

that the defendants took actions so arbitrary and

irrational that even post-deprivation remedies cannot

cure them. See Sylvia Dev. Corp., 48 F.3d at 827. As

explained above, she has not made that argument.

We see no error in the district court’s holding that

Talley has failed to state a substantive due process

claim.

D. Equal Protection

Finally, Talley argues that the district court

erred in dismissing her equal protection claim for

two reasons. First, she contends that she “has a fundamental right to the full amount of her pension.”

Op. Br. at 52. Second, she insists that there was no

rational basis for beginning recoupment efforts using

arbitrary percentages without set standards or rules

governing the process.

Equal protection requires a plaintiff to allege

that he or she “has been treated differently from

others who are similarly situated” in light of “the

appropriate level of constitutional scrutiny.” Doe v.

Settle, 24 F.4th 932, 939 (4th Cir. 2022). And that

different treatment must be worse than the similarly

situated comparative group. See Fauconier v. Clarke,

App.21a

966 F.3d 265, 277 (4th Cir. 2020) (quoting Martin v.

Duffy, 858 F.3d 239, 252 (4th Cir. 2017)) (stating

that a plaintiff bringing an equal protection claim

must allege “that [s]he has been treated differently

from others . . . and that the unequal treatment was

the result of intentional or purposeful discrimination”

(emphasis added)). As an initial matter, Talley did

not allege facts showing that she was treated worse

off than anyone else. In fact, her allegation that the

defendants treated those who hired attorneys to

challenge recoupment efforts or pushed back on the

state’s efforts differently from those who did not,

even if true, meant she was treated better than

others, not worse. Next, the district court correctly

held that Talley had not alleged facts that required

application of heightened scrutiny. She did not allege

that she belongs to a suspect class. Nor has she

explained, through argument or cited authority, how

the right to one’s pension benefits is a fundamental

right.5 In fact, the few cases that have touched on the

question of whether individuals have a fundamental

right to government benefits—including retirement

benefits—suggest that they do not. See Thompson v.

5 Fundamental rights include the right to privacy, the right to

vote, the right of interstate travel, certain first amendment

rights, and the right to procreate. See Mass. Bd. of Ret. v.

Murgia, 427 U.S. 307, 312 n.3 (1976). Any such right must be

“deeply rooted in this Nation’s history and tradition.” Dobbs v.

Jackson Women’s Health Org., 597 U.S. 215, 231 (2022) (quoting

Washington v. Glucksberg, 521 U.S. 702, 721 (1997)); see also

San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1, 33 (1973)

(stating that fundamental rights are those “explicitly or

implicitly guaranteed by the Constitution”). And Talley makes

no real argument that the right to one’s pension benefit is

deeply rooted in our Nation’s history or tradition.

App.22a

Walker, 758 F.2d 1004, 1009 (4th Cir. 1985) (holding

that a limitation on judges’ ability to receive retirement

benefits if they practiced law in the Commonwealth

of Virginia did not violate equal protection partly because no fundamental right was being interfered

with); see also Dandridge v. Williams, 397 U.S. 471,

484 (1970) (stating that a challenge to Maryland’s

welfare system did not “affect[] freedoms guaranteed

by the Bill of Rights . . . ”).

Thus, to the extent Talley has even alleged

different treatment, the district court correctly held

that rational basis review applies here. So, we are

left to address Talley’s argument that defendants

“have no rational basis for distinguishing between

various overpaid beneficiaries and determining . . . how

much, when, and by what method recoupment will

occur.” Op. Br. at 55.

Rational basis review requires the individual

challenging a law to “negate[] every conceivable basis

which might support the legislation.” Settle, 24 F.4th

at 944 (quoting Giarratano v. Johnson, 521 F.3d 298,

303 (4th Cir. 2008)). In other words, to prevail under

rational basis review, Talley must allege facts that

show there is no “rational relationship between the

disparity of treatment” alleged and “some legitimate

governmental purpose.” Id. at 943 (quoting Heller v.

Doe, 509 U.S. 312, 320–21 (1993)) (holding that there

is no “place in rational-basis review to question the

wisdom or logic of a state’s legislation” and that

“rough line-drawing, even ‘illogical’ or ‘unscientific’

line drawing, is often necessary to governing”).

Importantly, much of Talley’s briefing misapprehends the burden of proof under rational basis review.

“Under rational basis review . . . those attacking the

App.23a

rationality of the rule have the burden to negative

every conceivable basis which might support it.”

Nat’l Ass’n for the Advancement of Multijurisdiction

Prac. v. Lynch, 826 F.3d 191, 196 (4th Cir. 2016)

(cleaned up). Thus, to the extent that Talley suggests

the defendants must themselves provide a “plausible

reason” for their decision to recoup overpaid benefits

in different percentages and using different “means

and methods,” she is incorrect. Op. Br. at 56.

And Talley otherwise fails to explain why the

defendants have no rational basis for distinguishing

between overpaid individuals and seeking recoupment

in varying amounts. As the district court noted, the

defendants had a legitimate interest in recouping

overpaid retirement benefits. Thus, the only question

is whether the defendants’ process for recouping

overpayments by reducing benefit checks in varying

amounts is rationally related to that interest. The

only counterargument Talley makes is that the defendants pursued recoupment in a way that was discretionary and resulted in different treatment for different

people. But the defendants argue that responding to

different individuals differently depending upon their

requests or the requests of their attorneys merely

“shows appropriate flexibility and passes rationalbasis scrutiny.” Resp. Br. at 45. In the absence of any

meaningful arguments to the contrary from Talley,

and in light of the high bar set by the many opinions

applying rational-basis review, we find no error in

the district court’s holding. The defendants surely

have a legitimate governmental purpose here—

recouping overpaid pension benefits. And treating

Talley “differently” from other individuals by evaluating

her particular circumstances and requests and accord-

App.24a

ingly lowering her recoupment percentage from 50%

to 10% bears a rational relationship to that legitimate purpose. The state is ensuring recoupment of

those overpaid benefits while being flexible in light of

individuals’ varying circumstances, which satisfies

the rational basis test. As a result, we affirm the district court’s conclusion that Talley has not alleged an

equal protection violation.

E.

Talley’s Motion for Leave to Amend

Talley also challenges the district court’s denial

of her motion for leave to amend her complaint,

arguing that she was late in seeking to add the new

plaintiffs because of discovery failures on the part of

defendants.

In her motion for leave to amend, Talley sought

to add four plaintiffs to the lawsuit, each of whom

she contends has been denied due process by the state’s

recoupment procedures. The district court denied

Talley’s motion because Talley filed it four months

after the deadline in the scheduling order for amending

pleadings had passed and did not file a motion to

amend the scheduling order until after she filed her

motion to amend her complaint. The district court

also held that Talley did all of this without showing

good cause to modify the scheduling order as required by Federal Rule of Civil Procedure 16(b). In

reaching this conclusion, it explained that Talley

knew “well-before the expiration of the deadline to

seek to amend pleadings” of “at least two of the

plaintiffs she presumably now seeks to add to her

complaint,” based on an email sent by plaintiff’s

counsel. J.A. 470.

App.25a

We review the court’s denial of her motion for

leave to amend her complaint for abuse of discretion.

See Drager v. PLIVA USA, Inc., 741 F.3d 470, 474

(4th Cir. 2014). On appeal, Talley does not contradict

the district court’s finding that she knew about at

least two of these plaintiffs before the deadline

passed—she simply argues that her approach of

seeking to add all plaintiffs at once is “more efficient.”

Op. Br. at 58. But that is not the point. The district

court entered a scheduling order, which it is allowed

to enforce. Talley has offered no argument that the

district court abused its discretion in holding that no

good cause existed to warrant modifying the scheduling

order, and we find none.6

III.

To sum up our ruling, Talley received an unexpected windfall when she began receiving inflated

monthly benefit checks. Having enjoyed the $86,173.93

of extra cash she received over eight years, she

naturally did not want North Carolina to recoup it.

But the state had a statutory obligation to do so. And

recouping its overpayment under North Carolina law

did not violate Talley’s constitutional rights. Talley’s

procedural due process claim against the defendants

in their official capacities is barred by Eleventh

6 The district court also held that Talley’s motion was (1)

procedurally deficient due to her failure to attach both a

proposed amended pleading and a document showing how the

amended pleading differed from the original in accordance with

local rules and (2) failed to satisfy Federal Rule of Civil Procedure 20’s limitations on joinder of parties. Because we affirm on

the basis of the court’s Rule 16(b) holding, we do not address

whether Talley’s pleading was procedurally deficient or whether

it runs afoul of Rule 20’s joinder requirements.

App.26a

Amendment immunity; her procedural due process

claim against the defendants in their individual

capacities is barred by qualified immunity; she has

failed to state a substantive due process claim; and

she has similarly failed to state an equal protection

claim. Lastly, the district court did not abuse its discretion in denying Talley’s motion for leave to amend

her complaint. Accordingly, the district court’s judgment

is,

AFFIRMED.

App.27a

ORDER, U.S. DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH

CAROLINA EASTERN DIVISION

(FEBRUARY 20, 2024)

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH

CAROLINA EASTERN DIVISION

________________________

PATSY TALLEY,

Plaintiff,

v.

DALE R. FOLWELL, individually and in his official

capacity as TREASURER OF THE STATE OF

NORTH CAROLINA; TEACHERS’ AND STATE

EMPLOYEES’ RETIREMENT SYSTEM (TSERS)

OF NORTH CAROLINA; NORTH CAROLINA

DEPARTMENT OF STATE TREASURER,

RETIREMENT SYSTEMS DIVISION; and the

members of the TSERS Board of Trustees both

individually and in their official capacity: LENTZ

BREWER, JOHN EBBIGHAUSEN, VERNON

GAMMON, DIRK GERMAN, BARBARA GIBSON,

LINDA GUNTER, OLIVER HOLLEY, GREG

PATTERSON, MARGARET READER, JOSHUA

SMITH, CATHERINE TRUITT, JEFFREY

WINSTEAD, and THE STATE OF

NORTH CAROLINA,

Defendants.

________________________

App.28a

No. 4:22-CV-27-BO

Before: Terrence W. BOYLE, U.S. District Judge.

ORDER

This cause comes before the Court on defendants’

motion for judgment on the pleadings pursuant to

Rule 12(c) of the Federal Rules of Civil Procedure.

Plaintiff has responded, defendants have replied, and

in this posture the motion is ripe for ruling. Also

pending and ripe for disposition is plaintiff’s motion

to amend her complaint. For the reasons that follow,

defendants’ motion is granted and plaintiff’s motion

is denied.1

BACKGROUND

The Court previously granted in part and denied

in part defendants’ motion to dismiss plaintiff’s complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the

Federal Rules of Civil Procedure. The Court

incorporates the factual background of this action as

recited in its prior order as if fully set forth herein.

In sum, plaintiff retired as a teacher with the North

Carolina public school system and is entitled to

vested benefits under the Teachers’ and State Employees’ Retirement System (TSERS). Through no fault of

her own, plaintiff was overpaid benefits for a period

of more than ten years. Once that error was discovered, plaintiff received a notice that the overpayment

would be recouped pursuant to the procedure pro1 In light of the grant of judgment on the pleadings and the

denial of the motion to amend the complaint, this order further

resolves several other pending motions.

App.29a

vided in N.C. Gen. Stat. § 135-9(b). Plaintiff was told

that her monthly benefit would be reduced by approximately fifty percent until the overpayment was

recouped. This Court held that plaintiff had plausibly

state a procedural due process claim because she was

not afforded a pre-deprivation hearing prior to the

reduction in her benefits. The Court dismissed plaintiff’s remaining claims. After defendants filed their

motion to dismiss, plaintiff voluntarily dismissed all

claims against defendants State of North Carolina,

TSERS, and the North Carolina Department of State

Treasurer, Retirement Systems Division. [DE 18].

Plaintiff further dismissed her supplemental state

law claims alleging violation of her rights provided

by the North Carolina Constitution. Id. Thus, the

sole remaining claim is for a procedural due process

violation which has been alleged against the individual members of the TSERS Board of Trustees in their

individual capacities. Plaintiff’s complaint has been

filed as a putative class action, but no request for

class certification has been filed and a class has not

been certified.

Following the Court’s order on their motion to

dismiss, defendants filed their answer to plaintiff’s

complaint in which they raise the defense of qualified

immunity. Defendants then filed the instant motion

pursuant to Rule 12(c), seeking judgment on the

pleadings in their favor on the issue of qualified

immunity. Plaintiff thereafter moved to amend her

complaint, seeking to add several additional named

plaintiff’s. Defendants oppose plaintiff’s motion for

leave to amend, arguing, inter alia, that plaintiff’s

proposed amendment would violate Fed. R. Civ. P. 20

and otherwise be futile.

App.30a

DISCUSSION

I.

Motion for judgment on the pleadings

A motion for judgment on the pleadings under

Fed. R. Civ. P. 12(c) allows for a party to move for

entry of judgment after the close of the pleadings

stage, but early enough so as not to delay trial. Fed.

R. Civ. P. 12(c). Courts apply the Rule 12(b)(6) standard

when reviewing a motion under Rule 12(c). Mayfield

v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 674

F.3d 369, 375 (4th Cir. 2012). A Rule 12(b)(6) motion

tests the legal sufficiency of the complaint. Papasan

v. Allain, 478 U.S. 265, 283 (1986). When acting on a

motion to dismiss under Rule 12(b)(6), “the court

should accept as true all well-pleaded allegations and

should view the complaint in a light most favorable

to the plaintiff.” Mylan Labs., Inc. v. Matkari, 7 F.3d

1130, 1134 (4th Cir.1993). A complaint must allege

enough facts to state a claim for relief that is facially

plausible. Bell Atlantic Corp. v. Twombly, 550 U.S.

544, 570 (2007). Facial plausibility means that the

facts pled “allow[] the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged,” and mere recitals of the elements of a

cause of action supported by conclusory statements

do not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009).

Defendants seek judgment on the pleadings in

their favor solely on the issue of qualified immunity,

which they did not raise in their motion to dismiss

the complaint.

The doctrine of qualified immunity shields

government officials from liability for civil

damages when their conduct does not violate

App.31a

clearly established constitutional or other

rights that a reasonable officer would have

known. Pearson v. Callahan, 555 U.S. 223,

231, 129 S.Ct. 808, 172 L.Ed.2d 565 (2009);

Graham v. Gagnon, 831 F.3d 176, 182 (4th

Cir. 2016). Qualified immunity seeks to

balance two interests, namely, the “need to

hold public officials accountable when they

exercise power irresponsibly and the need to

shield officials from harassment, distraction,

and liability when they perform their duties

reasonably.” Graham, 831 F.3d at 182

(quoting Pearson, 555 U.S. at 231, 129 S.Ct.

808). To avoid dismissal of a complaint after

a qualified immunity defense is raised, a

plaintiff must allege sufficient facts to set

forth a violation of a constitutional right,

and the court must conclude that this right

was clearly established at the time of the

alleged violation. Pearson, 555 U.S. at 232,

129 S.Ct. 808.

Sims v. Labowitz, 885 F.3d 254, 260 (4th Cir. 2018).

A court has discretion in deciding which prong of the

qualified immunity analysis — whether there was a

violation of a constitutional right or whether the

right was clearly established — to consider first.

Pearson, 555 U.S. at 236.

In opposition to defendants’ motion for judgment

on the pleadings, plaintiff raises only procedural

objections to the filing of a Rule 12(c) motion raising

qualified immunity. Plaintiff contends that defendants

have raised qualified immunity via a Rule 12(c)

motion to delay the proceedings and take up valuable

time in discovery. Plaintiff argues that defendants

App.32a

have not attached or referred to any documents

which were not available to them when they filed

their Rule 12(b)(6) motion and that the Court has

already decided that plaintiff has stated a plausible

procedural due process claim. Finally, plaintiff contends

that defendants rely on facts which are not alleged in

plaintiff’s complaint to support their motion, which is

inappropriate at this stage of the litigation.

The Court finds plaintiff’s procedural objections

to the motion for judgment on the pleadings to be

without merit. Defendant’s Rule 12(c) motion is

procedurally proper. It was filed after the close of

pleadings and prior to trial, and Rule 12(g), which

prevents successive Rule 12(b) motions, expressly

does not apply to Rule 12(c) motions. See Fed. R. Civ.

P. 12(g)-(h); Alexander v. City of Greensboro, 801 F.

Supp. 2d 429, 434 (M.D.N.C. 2011); see also Chalk v.

Lender Process Servs., Inc., No. CIV. CCB-13-1593,

2013 WL 6909425, at *3 (D. Md. Dec. 31, 2013)

(“courts have taken a permissive approach to Rule

12(g) and allowed those enumerated defenses to be

raised at other times, which comports with the

underlying purpose of Rule 12(h)(2)—to preserve

defenses.”). Accordingly, that the defense was available

to defendants at the time of the Rule 12(b)(6) motion

is of no moment.

Defendant’s Rule 12(c) motion does not ask the

Court to reconsider whether plaintiff has plausibly

alleged a procedural due process claim, and defendants

further do not rely on facts which have not been

alleged to argue they are entitled to qualified immunity.

Contrary to plaintiff’s assertion, whether a defendant

is entitled to qualified immunity does not require

subjective inquiry into what each defendant knew or

App.33a

did not know — rather, the qualified immunity “inquiry

turns on the ‘objective legal reasonableness of the

action, assessed in light of the legal rules that were

clearly established at the time it was taken.’“ Pearson,

555 U.S. at 244. Accordingly, the Court determines

that it is procedurally proper to consider defendants’

Rule 12(c) motion.

As noted above, plaintiff has failed to respond

substantively to whether defendants are at this stage

entitled to qualified immunity. The Court may thus

consider any substantive arguments plaintiff may

have made to have been waived. See United Supreme

Council v. United Supreme Council of Ancient Accepted

Scot. Rite for 33 Degree of Freemasonry, 329 F. Supp.

3d 283, 292 (E.D. Va. 2018) (“Failure to respond to

an argument made in a dispositive pleading results

in a concession of that claim.”).

Defendants rely on Swanson v. Powers, 937 F.2d

965 (4th Cir. 1991), to argue that they are entitled to

qualified immunity because, taking plaintiff’s allegations as true, defendants followed state law in

attempting to recoup the overpayment and every reasonable official would not have understood that doing

so violated a constitutional right. “A right is clearly

established if the contours of the right are sufficiently

clear that a reasonable officer would understand that

what he is doing violates that right.” E. W. by &

through T. W. v. Dolgos, 884 F.3d 172, 185 (4th Cir.

2018) (cleaned up, citation omitted). In Swanson, the

court of appeals held that “[r]arely will a state official

who simply enforces a presumptively valid state statute

thereby lose her immunity from suit.” Id., 937 F.2d

at 969. Swanson thus stands for the proposition that

“a state official cannot be responsible for carrying out

App.34a

the state law as it exists at the time even if the law is

later declared unconstitutional.” Mom’s Inc. v. Weber,

951 F. Supp. 92, 94 (E.D. Va. 1996).

The property interest of which plaintiff alleges

she was deprived without due process is her continued

receipt of full retirement benefits prior to a reduction

in those benefits pursuant to the state’s recoupment

procedures. Although plaintiff received post-deprivation

process, the Court determined at the Rule 12(b)(6)

stage that plaintiff had plausibly alleged that the

lack of pre-deprivation process violated plaintiff’s

procedural due process rights.

The acts allegedly taken by the individual defendants in recouping the benefit overpayment without

affording plaintiff a pre-deprivation hearing or other

process were taken pursuant to N.C. Gen. Stat. § 1359(b), which provides that any overpayment or

erroneous payment to a member of a retirement system

administered by the state “may be offset against any

retirement allowance, return of contributions or any

other right accruing under this Chapter to the same

person, the person’s estate, or designated beneficiary.”

Id.; Compl. ¶ 65. North Carolina law further requires

state agencies to pursue repayment of state funds

that have been overpaid and prohibits them from

forgiving any overpayment. N. C. Gen. Stat. § 14364.80; Moss v. NC. Dep’t of State Treasurer, Ret. Sys.

Div., 282 N.C. App. 505, 511, (2022).

Accordingly, even assuming, without deciding,

that the lack of pre-deprivation process prior to a

reduction in plaintiff’s retirement benefit amounts to

a violation of her procedural due process right, it is

not apparent that such a right was clearly established,

and thus defendants are entitled to qualified immunity.

App.35a

Again, for a right to be clearly established, it must be

“clear to a reasonable officer that his conduct was

unlawful in the situation he confronted.” Saucier v.

Katz, 533 U.S. 194, 202 (2001). Following North

Carolina law regarding recoupment of overpaid retirement benefits would not cause a reasonable officer to

know that his conduct was unlawful. Indeed, “[a]bsent

extraordinary circumstances, . . . liability will not

attach for executing the statutory duties one was

appointed to perform.” Swanson, 937 F.2d at 969.

Plaintiff has not come forward to argue that any

extraordinary circumstances exist or that there are

any persuasive arguments which would caution against

a finding of qualified immunity. Defendants’ Rule

12(c) motion is therefore granted.

II. Motion to amend

Plaintiff seeks to amend her complaint to add

four additional plaintiff’s. Plaintiff contends that

these additional plaintiff’s have all been similarly

deprived of due process through the state’s recoupment

procedure.

Generally, leave to amend a complaint should be

freely given where justice so requires. Fed. R. Civ. P.

15(a). However, leave may be denied where the

amendment would be prejudicial to the opposing

party, where there has been bad faith on the part of

the moving party, or when the amendment would be

futile. Johnson v. Oroweat Food Co., 785 F.2d 503,

509 (4th Cir. 1986) (citing Foman v. Davis, 371 U.S.

178, 182 (1962)). A proposed amendment is “futile if

the claim it presents would not survive a motion to

dismiss.” Save Our Sound OBX, Inc. v. N. Carolina

App.36a

Dep’t of Transp., 914 F.3d 213, 228 (4th Cir. 2019)

(citation omitted).

The scheduling order entered in this case provides

that the deadline to amend pleadings and join parties

was July 31, 2023. [DE 31]. Plaintiff nonetheless

filed the instant motion to amend on November 15,

2023. [DE 37]. After she filed her motion to amend

her complaint, plaintiff filed a motion to amend the

scheduling order, seeking a five-month extension of

all deadlines due to defendants’ alleged desire to

delay discovery; her motion to amend the scheduling

order is silent as to why an extension of the deadline

to add parties and amend pleadings is necessary.

[DE 42]. Plaintiff’s motion to amend her complaint is

also procedurally deficient, as plaintiff failed to attach

to her motion to amend a proposed amended pleading

duly signed with all attachments and a form of the

amended pleading which indicates how it differs

from the original pleading. Local Civil Rule 15.1(a).

Though plaintiff has filed a red-lined version of the

proposed amended complaint in reply, she has failed

to file a complete proposed amended complaint which

could be filed.

Moreover, and contrary to plaintiff’s argument,

because plaintiff filed her motion to amend her complaint after the deadline imposed by the scheduling

order expired, she must demonstrate good cause for

modifying the scheduling order under Rule 16(b)(4)

before the Court considers whether to grant leave to

amend her complaint under Rule 15(a). Nourison

Rug Corp. v. Parvizian, 535 F.3d 295, 298 (4th Cir.

2008) (“after the deadlines provided by a scheduling

order have passed, the good cause standard must be

satisfied to justify leave to amend the pleadings.”)

App.37a

(emphasis added); see also Johnson v. United Parcel

Serv., Inc., 839 F. App’x 781, 782 (4th Cir. 2021) (same).

Rule 16(b)’s “good cause” standard focuses

on the timeliness of the amendment and the

reasons for its tardy submission. Because a

court’s scheduling order “‘is not a frivolous

piece of paper, idly entered, which can be

cavalierly disregarded by counsel without

peril,’” Potomac Electric Power Co. v. Electric

Motor Supply, Inc., 190 F.R.D. 372, 375-376

(D.Md.1999), quoting Gestetner v. Case

Equipment Co., 108 F.R.D. 138, 141 (D.Me.

1985), a movant must demonstrate that the

reasons for the tardiness of his motion

justify a departure from the rules set by the

court in its scheduling order.

Rassoull v. Maximus, Inc., 209 F.R.D. 372, 374 (D.

Md. 2002). Plaintiff has failed to demonstrate good

cause for extending the deadline to add parties and

amend the pleadings. Plaintiff’s reply to her motion

to amend her complaint states that “there is good

cause to amend the scheduling order due to Defendants’

refusal to provided [sic] substantive responses to

discovery and because Plaintiff Talley was not aware

of the existence of the four proposed co-plaintiff’s

until after her Complaint was filed.” [DE 46 p. 4].

However, as is evidenced by an email from plaintiff’s

counsel in June 2023, well-before the expiration of

the deadline to seek to amend pleadings and join

parties, plaintiff’s counsel indicated that she would

be filing a motion to amend to add two party-plaintiff’s. [DE 45-1]. Therefore, plaintiff was aware of at

least two of the plaintiff’s she presumably now seeks

to add to her complaint months prior to filing her

App.38a

motion to amend her complaint. Plaintiff’s general

arguments regarding discovery responses and lack of

knowledge of these additional plaintiff’s until after

her complaint was filed, which occurred in March

2022, are simply insufficient to demonstrate good cause.

However, even if the Court were to conclude that

plaintiff had demonstrated good cause, it would deny

plaintiff’s motion to amend her complaint. Plaintiff

seeks to add four plaintiff’s who she contends were

also subjected to unconstitutional recoupment procedures by the State of North Carolina. The property

interest at issue in plaintiff’s remaining procedural

due process claim is her interest in the continued

receipt of her full monthly TSERS retirement benefit

prior to a reduction based on the state’s recoupment

procedures. The proposed new plaintiff’s do not allege

deprivation of the same property interest. The proposed

new plaintiff’s complain regarding a contributory

death benefit and disability benefits, which are separate benefits from the retirement benefits complained

about by plaintiff and further are not alleged to be

managed by the individual defendants who are all

members of the TSERS Board. Rule 20 requires that

plaintiff’s each claim a right to relief “with respect to

or arising out of the same transaction, occurrence, or

series of transactions or occurrences[.]” Plaintiff’s

proposed amended complaint alleges that each proposed

new plaintiff also was denied due process in the

recoupment procedure used by the state, but the bare

allegations regarding the proposed plaintiff’s do not

demonstrate that their claims arise from the same

transaction or occurrence as plaintiff Talley. Moreover,

the bare allegations regarding the proposed plaintiff’s in the proposed amended complaint do not

App.39a

plausibly allege that these defendants would not also

be entitled to qualified immunity for those reasons

outlined in § I. The Court therefore denies plaintiff’s

motion to amend her complaint.

III. Motion to seal

Non-party Department of State Treasurer,

Retirement Systems Division has moved to seal certain

pages of an exhibit attached to plaintiff’s motion to

compel which contains pages from a letter authored

by a compliance officer at the Office of the State

Treasurer. The moving party contends that this

letter falls squarely within the definition N.C. Gen.

Stat. § 135-1(7b) and is therefore shielded from public

disclosure by N.C. Gen. Stat. § 135-6(r). Section 1356(r) requires that any fraud and compliance investigation remain confidential, subject to court order.

“The common law presumes a right to inspect

and copy judicial records and documents.” Stone v.

Univ. of Maryland Med. Sys. Corp., 855 F.2d 178,

180 (4th Cir. 1988) (internal citations omitted). Where

a party seeks to seal documents not in connection

with diapositive motions, the common law presumption

of access applies. Id. This right of access may be

overcome by countervailing interests which heavily

outweigh the public’s interest in access. Virginia Dep’t

of State Police v. Washington Post, 386 F.3d 567, 575

(4th Cir. 2004). The motion to seal has been pending

on the Court’s docket and no opposition has been

filed by any non-party or member of the public.

Plaintiff makes no persuasive argument that

this document should remain on the public docket.

The moving party is not a party to this lawsuit as it

has been dismissed, and several courts have applied

App.40a

state confidentiality laws to seal records of nonparties. See Johnson v. City of Fayetteville, No. 5:12CV-456-F, 2014 WL 7151147, at *10 (E.D.N.C. Dec.

11, 2014). The document moving party seeks to seal

also does not appear relevant to plaintiff’s motion to

compel, to which it was attached, as it was not

attached to plaintiff’s amended version of the same

document which is the subject of the motion to compel. See [DE 48 p. 6 n.1]. Finally, plaintiff’s contention

that the motion to seal is designed to delay discovery

is plainly without merit; whether a document should

be sealed on the public docket does not have any

impact on the course and scope of discovery.2

In sum, the moving party has demonstrated that

the document identified at pages twelve through

eighteen of [DE 47-2] should be sealed. The Clerk of

Court is unable, however, to seal only selected pages

of a filing. Accordingly, the Court directs the Clerk to

seal [DE 47-2] and orders plaintiff to file a redacted

version without pages twelve through eighteen within

five days of the date of entry of this order.

CONCLUSION

Accordingly, for the foregoing reasons, defendants’

motion for judgment on the pleadings [DE 34] is

GRANTED and plaintiff’s motion to amend her complaint [DE 37] is DENIED. In light of the foregoing, the

motion to stay discovery pending resolution of the

motion for judgment on the pleadings [DE 40], motion

to amend the scheduling order [DE 42], motions to

2 Plaintiff has filed a motion for leave to file a surreply to address

the moving party’s reply. The Court, in the exercise of its discretion, denies the motion.

App.41a

compel [DE 47 & 49], motion for protective order [DE

53], and the motion to deem response to motion to

compel timely filed [DE 60] are DENIED AS MOOT.

The motion to seal confidential information filed by

plaintiff at [DE 47-2] filed by non-party Department

of State Treasurer, Retirement Systems Division [DE

52] is GRANTED. Plaintiff’s motion for leave to file a

surreply [DE 58] is DENIED. Plaintiff shall file a

redacted version of [DE 47-2] in accordance with the

foregoing within five (5) days of the date of entry of

this order.

The Clerk is DIRECTED to enter judgment in

favor of defendants and close this case.

SO ORDERED, this 20th day of February 2024.

/s/ Terrence W. Boyle

U.S. District Judge

App.42a

ORDER, U.S. DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH

CAROLINA EASTERN DIVISION

(JANUARY 17, 2023)

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH

CAROLINA EASTERN DIVISION

________________________

PATSY TALLEY,

Plaintiff,

v.

DALE R. FOLWELL, individually and in his official

capacity as TREASURER OF THE STATE OF

NORTH CAROLINA; TEACHERS’ AND STATE

EMPLOYEES’ RETIREMENT SYSTEM (TSERS)

OF NORTH CAROLINA; NORTH CAROLINA

DEPARTMENT OF STATE TREASURER,

RETIREMENT SYSTEMS DIVISION; and the

members of the TSERS Board of Trustees both

individually and in their official capacity: LENTZ

BREWER, JOHN EBBIGHAUSEN, VERNON

GAMMON, DIRK GERMAN, BARBARA GIBSON,

LINDA GUNTER, OLIVER HOLLEY, GREG

PATTERSON, MARGARET READER, JOSHUA

SMITH, CATHERINE TRUITT, JEFFREY

WINSTEAD, and THE STATE OF

NORTH CAROLINA,

Defendants.

________________________

App.43a

No. 4:22-CV-27-BO

Before: Terrence W. BOYLE, U.S. District Judge.

This cause comes before the Court on defendants’

motion to dismiss pursuant to Rules 12(b)(1) and

12(b)(6) of the Federal Rules of Civil Procedure.

Plaintiff has responded, defendants have replied, and

a hearing on the matter was held before the undersigned on October 21, 2022, at Raleigh, North Carolina.

In this posture, the motion is ripe for ruling. For the

reasons that follow, the motion to dismiss is granted

in part and denied in part.

BACKGROUND

Plaintiff worked as a schoolteacher in the Beaufort

County, North Carolina school system for more than

twenty-five years and retired at age sixty on November

1, 2008. Compl. ¶ 20. Plaintiff participated in the

Teachers’ and State Employees’ Retirement System

(TSERS) and had accrued vested retirement benefits

prior to her retirement. Id. § 21. When she retired,

plaintiff elected to receive her monthly TSERS benefit

payments under the “Social Security Leveling” method.

Id. § 23; see also N.C. Gen. Stat. § 135-5(g). The

Social Security Leveling method allows a retiree to

draw more money from her TSERS account before

she reaches the age of sixty-two and becomes eligible

to draw Social Security; once the retiree begins to

draw Social Security, the TSERS amount is reduced,

with the goal of providing the retiree approximately

the same monthly benefit amount before and after

she becomes eligible for Social Security. Id. ¶ 24.

TSERS is responsible for calculating a retiree’s benefits.

Id. ¶ 22.

App.44a

In 2008, through no fault of plaintiff, an error

was made in the calculation of plaintiffs benefits,

resulting in plaintiff being overpaid for a period of

years. Id. ¶ 27. Plaintiff received a letter on February

22, 2019, informing her that she had been overpaid

$86, 173.93 from November 2008 through July 2018.

Id. ¶ 29. Plaintiff was further informed that the

overpayment would be recouped in accordance with

the procedure provided in N.C. Gen. Stat. § 135-9(b).

Id. ¶ 30. Plaintiff was informed in March 2019 that

beginning in April 2019 her TSERS benefit checks

would be reduced by $926.35. This letter contained

no information regarding appeal rights or an opportunity to be heard regarding the reduction. Id. ¶¶ 3132. Plaintiff s son responded on her behalf by email

on April 8, 2019, and on April 18, 2019, plaintiff was

informed that her retirement check would be reduced

by $926.35, approximately half of her monthly benefit,

and was informed that she could appeal the reduction.

Id. ¶ 34. Counsel for plaintiff responded, asking that

the email from plaintiff’s son be deemed an appeal.

Plaintiff’s retirement check began to be reduced in

April 2019. Id. ¶¶ 35-36.

In June 2019, plaintiff filed a petition in the

Office of Administrative Hearings in which she sought

a post-deprivation hearing regarding the taking of

her property and property rights. Id. ¶ 39. On August

26, 2019, plaintiff was informed that her monthly

recoupment of overpayment amount would be reduced

to ten percent of plaintiff’s TSERS benefit as opposed

to fifty percent. Plaintiff alleges that this decision

was as arbitrary and capricious as the decision in

April 2019 to reduce her monthly benefit by fifty

percent. Id. ¶ 40. On February 19, 2020, an adminis-

App.45a

trative law judge dismissed plaintiff’s petition in the

Office of Administrative Hearings, holding in part

that a constitutional challenge to the recoupment

statute was not appropriately heard in a contested

case before the Office of Administrative Hearing. [DE

4-4]. The administrative law judge further found respondents entitled to summary judgment, denied petitioner’s motion for summary judgment, and dismissed the petition. Id.

Plaintiff filed this suit on March 31, 2022, on

behalf of herself and others similarly situated. Plaintiff

alleges claims under 42 U.S.C. § 1983 for deprivation

of procedural due process, equal protection, and substantive due process rights provided by the Fifth and

Fourteenth Amendments. Plaintiff further alleges she

was deprived of procedural due process, equal protection, and substantive due process rights as provided

by the North Carolina Constitution. After defendants

filed their motion to dismiss, plaintiff voluntarily dismissed all claims against defendants State of North

Carolina, TSERS, and the North Carolina Department of State Treasurer, Retirement Systems Division.

[DE 18]. Plaintiff further dismissed her supplemental

state law claims alleging violation of her rights provided by the North Carolina Constitution. Accordingly, remaining for adjudication is whether plaintiff’s

claims that the individual defendants violated plaintiff’s federal constitutional rights survive defendants’

motion to dismiss.

DISCUSSION

Federal Rule of Civil Procedure 12(b)(1) authorizes

dismissal of a claim for lack of subject matter jurisdiction. “Subject-matter jurisdiction cannot be forfeited

App.46a

or waived and should be considered when fairly in

doubt.” Ashcroft v. Iqbal, 556 U.S. 662, 671 (2009)

(citation omitted). When subject-matter jurisdiction

is challenged, the plaintiff has the burden of proving

jurisdiction to survive the motion. Evans v. B.F.

Perkins Co., 166 F.3d 642, 647-50 (4th Cir. 1999).

When a facial challenge to subject-matter jurisdiction

is raised, the facts alleged by the plaintiff in the complaint are taken as true, “and the motion must be

denied if the complaint alleges sufficient facts to

invoke subject-matter jurisdiction.” Kerns v. United

States, 585 F.3d 187, 192 (4th Cir. 2009). The Court

can consider evidence outside the pleadings without

converting the motion into one for summary judgment. See, e.g., Evans, 166 F.3d at 647.

A Rule 12(b)(6) motion tests the legal sufficiency

of the complaint. Papasan v. Allain, 478 U.S. 265,

283 (1986). When acting on a motion to dismiss

under Rule 12(b)(6), “the court should accept as true

all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff.”

Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th

Cir.1993). A complaint must allege enough facts to

state a claim for relief that is facially plausible. Bell

Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

Facial plausibility means that the facts pled “allow[]

the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged,” and

mere recitals of the elements of a cause of action supported by conclusory statements do not suffice. Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009). A complaint must be

dismissed if the factual allegations do not nudge the

plaintiff’s claims “across the line from conceivable to

plausible.” Twombly, 550 U.S. at 570. When considering

App.47a

a Rule 12(b)(6) motion, a court may consider any

exhibits attached to the complaint. Goines v. Valley

Cmty. Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016).

A.

The Eleventh Amendment bars plaintiff’s

claims against defendants in their official

capacity.

Plaintiff does not appear to dispute that her

claims for damages against the individual defendants

in their official capacities is barred by the Eleventh

Amendment. See Bd. of Trustees of the Univ. of Ala.

v. Garrett, 531 U.S. 356, 363 (2001); Huang v. Bd. of

Governors of Univ. of N Carolina, 902 F.2d 1134,

1138 (4th Cir. 1990); see also Ballenger v. Owens, 352

F.3d 842, 845 (4th Cir. 2003). In her response to the

motion to dismiss, however, plaintiff argues that she

may nonetheless obtain prospective relief against

these defendants under Ex Parte Young, 209 U.S.

123 (1908). Under Ex Parte Young, “federal courts may

exercise jurisdiction over claims against state officials

by persons at risk of or suffering from violations by

those officials of federally protected rights, if (1) the

violation for which relief is sought is an ongoing one,

and (2) the relief sought is only prospective.” Republic

of Paraguay v. Allen, 134 F.3d 622, 627 (4th Cir. 1998).

Plaintiff argues that she seeks prospective

injunctive relief to “stop Defendants from continuing

to interpret the state recoupment statute as allowing

it to engage in the kind of actions it took here against

Petitioner” and “to stop all recoupment inconsistent

with the law.” [DE 17 p. 21]. However, “even [where]

the consequences of any past violation may persist,

invoking those effects does not transform past state

action into an ongoing violation.” Jemsek v. Rhyne,

App.48a

662 F. App’x 206, 211 (4th Cir. 2016). And further,

the violation for which plaintiff seeks relief plaintiff

admits happened before she filed the instant complaint,

and plaintiff has not alleged that at the time she

filed her complaint “responsible state officials were

presently violating [her] ongoing rights.” Republic of

Paraguay, 134 F.3d at 628. Accordingly, despite

plaintiff’s arguments to the contrary, the face of her

complaint does not reveal a claim for an ongoing violation for which she seeks only prospective relief. Her

official capacity claims are therefore barred by the

Eleventh Amendment and appropriately dismissed.

B.

Plaintiff has stated a procedural due process

claim against the individual defendants in

their individual capacities.

To succeed on a procedural due process claim, a

plaintiff must show “(1) a cognizable `liberty’ or

‘property’ interest; (2) the deprivation of that interest

by ‘some form of state action’; and (3) that the procedures employed were constitutionally inadequate.” Iota

Xi Chapter Of Sigma Chi Fraternity v. Patterson, 566

F.3d 138, 145 (4th Cir. 2009) (quoting Stone v. Univ.

of Md. Med. Sys. Corp., 855 F.2d 167, 172 (4th

Cir.1988)). Property interests, at issue here, “stem from

an independent source such as state law[s] . . . that

secure certain benefits and that support claims of

entitlement to those benefits.” Bd. of Regents of State

Colleges v. Roth, 408 U.S. 564, 577 (1972). In order to

determine whether the procedure provided was constitutionally adequate, “courts consider (1) the private

interest affected by the official action; (2) the risk of

an erroneous deprivation of that interest given the

procedures used, as well as the probable value, if

any, of additional or substitute procedural safeguards;

App.49a

and (3) the government’s interest.” Accident, Inj. &

Rehab., PC v. Azar, 943 F.3d 195, 203 (4th Cir. 2019).

This case concerns recoupment procedures

employed by defendants after it was discovered plaintiff

had been overpaid for a period of approximately ten

years. It has been determined by the Office of Administrative Hearings that plaintiff, in fact, received an

overpayment of benefits. Plaintiff does not dispute

this finding in her complaint.

Defendants contend that plaintiff has failed to

allege a property interest which has been deprived.

Plaintiff relies on the Supreme Court’s holding that

“the interest of an individual in continued receipt of

[Social Security] benefits is a statutorily created

‘property’ interest” to argue that she has sufficiently

alleged a property interest in her full amount of

retirement benefits. Mathews v. Eldridge, 424 U.S.

319, 332 (1976); see also Mallette v. Arlington Cnty.

Employees’ Supplemental Ret. Sys. II, 91 F.3d 630,

636 (4th Cir. 1996) (due process protections apply to

disability retirement benefits); Pappas v. City of

Lebanon, 331 F. Supp. 2d 311, 317 (M.D. Pa. 2004)

(“retiree has a property interest in continued pension

payments”). However, [t]o have a property interest in

a benefit, a person clearly must have more than an

abstract need or desire for it. He must have more

than a unilateral expectation of it. He must, instead,

have a legitimate claim of entitlement to it.” Roth,

408 U.S. at 577. Plaintiff does not allege, nor could

she, that she has a property interest in retirement

benefits to which she was not entitled. However, the

property interest on which plaintiff relies is not an

interest in the overpaid benefits, but rather in the

continued receipt of full benefits prior to a reduction

App.50a

based upon the state’s recoupment procedures. The

Court, at this early stage, determines this is a sufficiently alleged property interest.

Plaintiff must also sufficiently allege that the

process she received was constitutionally inadequate.

Here, plaintiff’s complaint and its attachments reveal

that she received adequate post-deprivation process.

Plaintiff was notified in April 2019, by way of a letter

to her son who had responded to the first notice of

overpayment on her behalf, that she could appeal the

administrative action of the Retirement Systems

Division and seek further review. [DE 4-3 p. 28].

Plaintiff was further informed that the administrative

review would result in a final agency decision, which

would describe further appeal rights. Id. Plaintiff did

seek review of the administrative action and received

a final agency decision. Plaintiff further received

post-deprivation due process in her hearing before

the Office of Administrative Hearings. [DE 4-4].

However, “[i]n situations where the State feasibly

can provide a predeprivation hearing before taking

property, it generally must do so regardless of the

adequacy of a postdeprivation tort remedy to compensate for the taking.” Zinermon v. Burch, 494 U.S.

113, 132 (1990). Where the property interest at issue

concerns the means to live, such as welfare benefits,

an evidentiary hearing is required prior to the

termination of benefits. Goldberg v. Kelly, 397 U.S.

254, 264 (1970). But the “procedures required to

satisfy due process before a cutoff of benefits other

than welfare or other benefits constituting the “very

means to live” [can] be less than a full evidentiary

hearing[, and] absent exceptional circumstances, a

person is entitled to some protective procedures, though

App.51a

not necessarily a full evidentiary hearing, before being

deprived of liberty or property.” Ortiz v. Regan, 749

F. Supp. 1254, 1259-60 (S.D.N.Y. 1990).

Plaintiff was afforded no hearing or other

meaningful process to challenge the reduction in her

benefits prior to the commencement of recoupment.

In light of the nature of a retirement benefit, which

as plaintiff alleges constitutes her “very means to

live”, the Court determines that she has sufficiently

alleged that the process provided was constitutionally

inadequate. Accordingly, the Court will permit her

procedural due process claim to proceed.

The Court further finds that plaintiff has sufficiently alleged that the individual defendants participated in the alleged deprivation of due process. See

Wright v. Collins, 766 F.2d 841, 850 (4th Cir. 1985).

The Court will reserve a more specific holding on this

issue for the summary judgment stage on a more

developed record.

C.

Plaintiff fails to state a claim for violation of

substantive due process rights.

“[S]ubstantive due process rights arise solely

from the Constitution.” Huang v. Bd of Governors of

Univ. of N. Carolina, 902 F.2d 1134, 1142 n.10 (4th

Cir. 1990). To succeed on a substantive due process

claim, a plaintiff must demonstrate “(1) that he had

property or a property interest; (2) that the state

deprived him of this property or property interest;

and (3) that the state’s action falls so far beyond the

outer limits of legitimate governmental action that

no process could cure the deficiency.” Quinn v. Bd. of

Cnty. Commissioners for Queen Anne ‘s Cnty.,

Maryland, 862 F.3d 433, 443 (4th Cir. 2017) (quoting

App.52a

Sylvia Dev. Corp. v. Calvert Cty., 48 F.3d 810, 827

(4th Cir. 1995)) (alterations omitted).

Because of the availability of internal review as

well as a post-deprivation quasi-judicial hearing,

plaintiff’s substantive due process claim fails, as

defendants’ “treatment of [plaintiff] is hardly arbitrary

when the state has given [plaintiff] the means to correct the errors [s]he alleges.” Mora v. The City Of

Gaithersburg, MD, 519 F.3d 216, 231 (4th Cir. 2008);

see also Richter v. Beatty, 417 F. App’x 308, 311 (4th

Cir. 2011) (finding no substantive due process violation

where deprivation “not so unjust that no amount of

fair procedure could rectify it.”). Accordingly, plaintiff

has failed to state a substantive due process claim.

C.

Plaintiff has failed to state an equal

protection claim.

Plaintiff alleges that the overpayment statutes

on which the defendants rely to recoup overpayment

of benefits treat individuals differently depending on

whether a person is a beneficiary of the retirement

system or is a current state employee. The Equal

Protection Clause “requires that similarly-situated

individuals be treated alike.” Giarratano v. Johnson,

521 F.3d 298, 302 (4th Cir. 2008). In her response to

the motion to dismiss, plaintiff clarifies that she is

not raising a facial challenge to the recoupment

statute, but rather that she is challenging the manner

in which the defendants have chosen to implement

the statute in regard to plaintiff and those similarly

situated. Plaintiff contends that the “manner in

which the Defendants have chosen to implement the

statute has violated the equal protection rights of

plaintiff and those similarly situated to her by relying

App.53a

on whether the employee pushes back against recoupment and then how much recoupment the Defendants are willing to accept.” [DE 17 p. 18].

Laws are presumed to be constitutional

under the equal protection clause for the

simple reason that classification is the very

essence of the art of legislation. Moss v.

Clark, 886 F.2d 686, 689 (4th Cir.1989)(citing

City of Cleburne, 473 U.S. at 440, 105 S.Ct.

3249). As such, the challenged classification

need only be rationally related to a legitimate

state interest unless it violates a fundamental

right or is drawn upon a suspect classification

such as race, religion, or gender. City of

New Orleans v. Dukes, 427 U.S. 297, 303, 96

S.Ct. 2513, 49 L.Ed.2d 511 (1976).

Giarratano, 521 F.3d at 303 (cleaned up).

None of plaintiff’s allegations would support

application of a heightened level of scrutiny because

she has not alleged the presence of any suspect class

or the violation of a fundamental right. Thus, she

must sufficiently allege that the challenged legislation

is not rationally related to a legitimate state interest.

Plaintiff has failed to do so, here.

First, she has not by her allegations, as she

must do to show that legislation is not rationally

related to a legitimate state interest, “negated every

conceivable basis which might support the legislation.”

Doe v. Settle, 24 F.4th 932, 944 (4th Cir. 2022) (quoting

Giarratano, 521 F.3d at 303). Plaintiff has not alleged

that treating current employees and retirees differently

or reducing overpayment recoupment percentages only

for people who “push back” is not rationally related

App.54a

to a legitimate state interest, i.e., fully recouping the

overpayment of retirement benefits. Indeed, there is

no place “in rational-basis review to question the

wisdom or logic of a state’s legislation; rough linedrawing, even ‘illogical’ or ‘unscientific’ line drawing,

is often necessary to governing.” Settle, 24 F.4th at

943. Plaintiff has further failed to sufficiently allege

that a classification based upon whether a retiree

“pushes back” was “intentionally utilized.” Sylvia

Dev. Corp., 48 F.3d at 819. In sum, plaintiff’s burden

is high where rational-basis review applies, and she

has not sufficiently alleged any violation of the Equal

Protection Clause. This claim is therefore properly

dismissed.

CONCLUSION

Accordingly, for the foregoing reasons, defendants’

motion to dismiss [DE 9] is GRANTED IN PART and

DENIED IN PART. Plaintiff’s procedural due process

claim against the individual defendants in their individual capacities may proceed. Plaintiff’s claims against

the individual defendants in their official capacities,

as well as her substantive due process and equal protection claims are dismissed.

SO ORDERED, this 17 day of January 2023.

/s/ Terrence W. Boyle

U.S. District Judge

App.55a

ORDER DENYING PETITION FOR

REHEARING, U.S. COURT OF APPEALS

FOR THE FOURTH CIRCUIT

(MAY 20, 2025)

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

________________________

PATSY TALLEY,

Plaintiff – Appellant,

v.

DALE R. FOLWELL, Individually and in his Official

Capacity as Treasurer of the State of North Carolina;

LENTZ BREWER; JOHN EBBIGHAUSEN;

VERNON GAMMON; DIRK GERMAN; BARBARA

GIBSON; LINDA GUNTER; OLIVER HOLLEY;

GREG PATTERSON; MARGARET READER;

JOSHUA SMITH; CATHERINE TRUITT;

JEFFREY WINSTEAD, individually

and in their official capacity,

Defendants – Appellees.

________________________

No. 24-1215

(4:22-cv-00027-BO)

Before: AGEE, QUATTLEBAUM, and RUSHING,

Circuit Judges.

The court denies the petition for rehearing and

rehearing en banc. No judge requested a poll under

Fed. R. App. P. 40 on the petition for rehearing en banc.

App.56a

Entered at the direction of the panel: Judge

Agee, Judge Quattlebaum, and Judge Rushing.

For the Court

/s/ Nwamaka Anowi

Clerk

App.57a

COMPLAINT, U.S. DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH

CAROLINA EASTERN DIVISION

(MARCH 21, 2022)

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH

CAROLINA EASTERN DIVISION

________________________

PATSY TALLEY,

Plaintiff,

v.

DALE R. FOLWELL, individually and in his official

capacity as TREASURER OF THE STATE OF

NORTH CAROLINA; TEACHERS’ AND STATE

EMPLOYEES’ RETIREMENT SYSTEM (TSERS)

OF NORTH CAROLINA; NORTH CAROLINA

DEPARTMENT OF STATE TREASURER,

RETIREMENT SYSTEMS DIVISION; and the

members of the TSERS Board of Trustees both

individually and in their official capacity: LENTZ

BREWER, JOHN EBBIGHAUSEN, VERNON

GAMMON, DIRK GERMAN, BARBARA GIBSON,

LINDA GUNTER, OLIVER HOLLEY, GREG

PATTERSON, MARGARET READER, JOSHUA

SMITH, CATHERINE TRUITT, JEFFREY

WINSTEAD, and THE STATE OF

NORTH CAROLINA,

Defendants.

________________________

App.58a

Civil Action No.: 4:22-CV-27

(Jury Trial Demanded)

(Class Action)

NATURE OF THE ACTION

1. This action is brought by Plaintiff Pasty Talley

(“Plaintiff” or “Talley”) on behalf of herself and all

similarly situated individuals (“the class members”)

under 42 U.S.C. § 1983 for the deprivation of property

and property rights without due process.

2. This is also an action brought by Plaintiff on

behalf of herself and the class under Corum v.

University of North Carolina, 389 S.E.2d 596, 97

N.C. App. 527 (1992) for violations of Plaintiff’s

rights under the North Carolina Constitution to the

fruits of her labor under Article 1, Section 1, Section

3, and 19, for deprivation of property without substantive and procedural due process, and in violation of

Article 1, Section 19 for violations of her rights to

equal protection.

3. This action is brought against Defendants

Dale Folwell, individually and as the State Treasurer,

the Teachers’ and State Employees’ Retirement System

of North Carolina (TSERS) and the above-named

members of its Board of Trustees in their individual

and official capacity1, the North Carolina Department

of State Treasurer, Retirement Systems Division and

the State of North Carolina for actions taken under

1 See https://www.myncretirement.com/governance/boards-trusteesand-committees/tsers-lgers-boards-trustees#meet-the-tsers-boardmembers as of 2022.03.19. (Exhibit 1).

App.59a

the authority granted in Chapter 135 of the North

Carolina General Statutes.

PARTIES, JURISDICTION AND VENUE

1. Plaintiff Patsy Talley is an individual resident

of Beaufort County, North Carolina and is a member

of TSERS under N.C.G.S. § 135-3(1), and at the times

herein complained of was fully vested in TSERS,

entitled to receive and was receiving benefits under

N.C.G.S. § 135-1, et seq.

2. Pursuant to N.C. Gen. Stat. § 135-6, the

Teachers’ and State Employee’s Retirement System

(“TSERS”) is responsible for the general determination,

control, supervision, management, and governance of

all affairs, which calculate and control the approval

and distribution of benefits to all retired full-time

teachers and State Employees of all public-school

systems, universities, departments, institutions, and

agencies of the State.

3. Pursuant to N.C. Gen. Stat. § 135-6(a), the

Teachers’ and State Employee’s Retirement System

is administered by a Board of Trustees. Membership

of the Board consists of thirteen (13) members pursuant

to N.C. Gen. Stat. § 135¬6(b)(1), (2), (2a), (3) and (4).

4. The Teachers’ State Employee’s Retirement

System is a department under the North Carolina

Retirement System (“RSD”).

5. Defendant Dale R. Folwell is a Member of the

Board of the Teachers’ and State Employee’s

Retirement System and is the current State Treasurer

pursuant to N.C. Gen. Stat. § 135-6(b)(1).

App.60a

6. Defendant Lentz Brewer is a current Member

of the Board of the Teachers’ and State Employee’s

Retirement System pursuant to N.C. Gen. Stat. § 1356(b)(3).

7. Defendant John Ebbighausen is a current

Member of the Board of the Teachers’ and State

Employee’s Retirement System pursuant to N.C.

Gen. Stat. § 135-6(b)(3).

8. Defendant Vernon Gammon is a current Member of the Board of the Teachers’ and State Employee’s Retirement System pursuant to N.C. Gen. Stat.

§ 135-6(b)(3).

9. Defendant Dirk German is a current Member

of the Board of the

Teachers’ and State Employee’s Retirement

System pursuant to N.C. Gen. Stat. § 135-6(b)(3).

10. Defendant Barbara Gibson is a current Member of the Board of the Teachers’ and State Employee’s Retirement System pursuant to N.C. Gen. Stat.

§ 135-6(b)(3).

11. Defendant Linda Gunter is a current Member

of the Board of the Teachers’ and State Employee’s

Retirement System pursuant to N.C. Gen. Stat. § 1356(b)(3).

12. Defendant Oliver Holley is a current Member

of the Board of the Teachers’ and State Employee’s

Retirement System pursuant to N.C. Gen. Stat. § 1356(b)(3).

13. Defendant Greg Patterson is a current Member of the Board of the Teachers’ and State Employ-

App.61a

ee’s Retirement System pursuant to N.C. Gen. Stat.

§ 135-6(b)(3).

14. Defendant Margaret Reader is a current

Member of the Board of the Teachers’ and State

Employee’s Retirement System pursuant to N.C.

Gen. Stat. § 135-6(b)(3).

15. Defendant Joshua Smith is a current Member

of the Board of the Teachers’ and State Employee’s

Retirement System pursuant to N.C. Gen. Stat. § 1356(b)(3).

16. Defendant Catherine Truitt is a current Member of the Board of the Teachers’ and State Employee’s Retirement System pursuant to N.C. Gen. Stat.

§ 135-6(b)(3).

17. Defendant Jeffrey Winstead is a current Member of the Board of the Teachers’ and State Employee’s Retirement System pursuant to N.C. Gen. Stat.

§ 135-6(b)(3).

18. This Court has subject-matter jurisdiction

over this action pursuant to 42 U.S.C. § 1983, as the

action arises under deprivation of any rights, privileges,

or immunities secured by the Constitutional and

Federal Laws.

19. Venue is proper in this Court pursuant to

28 U.S.C. § 1391(b)(1), as Plaintiff Talley is a resident

of the Eastern District of North Carolina and Defendants perform their statutory duties and have their

primary business location in Raleigh, North Carolina

which is located in the Eastern District of North

Carolina, and under 28 U.S.C. § 1391(b)(2), as a substantial part of the events or omissions giving rise to

App.62a

this action occurred in the Eastern District of North

Carolina.

STATEMENT OF THE FACTS

20. Plaintiff Patsy Talley was employed as a

schoolteacher in the Beaufort County School system

for over 25 years. She retired from the Beaufort

County schools on November 1, 2008, when she was

60 years old.

21. As a full time employee of the North Carolina

school system, Plaintiff participated in the TSERS

and accrued vested retirement benefits.

22. Upon her retirement, Plaintiff, (as did all

participants), had several options from which she

could choose to receive her accrued benefits. N.C.

Gen. Stat. § 135-5(g). Regardless of the option chosen,

the benefits to which a retiree such as Plaintiff was

entitled to receive were calculated by TSERS.

23. Plaintiff elected to receive the monthly

benefits payments she had accrued with TSERS under

“Option 4”, the “Social Security Leveling method”.

N.C. Gen. Stat. § 135-5(g).

24. Under Option Four, the retiring employee

receives a larger monthly payment than the maximum

allowable benefits until the month of her sixty-second

birthday, after which point the payment amount is

decreased by an amount equal to an estimate of the

employee’s social security benefits. This “Leveling

Method” is designed so that a retiree draws more

money from the TSERS account before the retiree

first becomes eligible to draw Social Security at the

age of sixty-two (62). The amount drawn from TSERS

is reduced once Social Security benefits begin. This

App.63a

option is designed to provide the retiree, “so far as

possible, approximately the same amount per year

before and after” Social Security becomes available.

A retiring employee choosing Option Four, will apply

for social security benefits at age sixty-two, so that

the retiree will continue receiving the same income

after the reduction in State retirement benefits, due

to the augmentation of the retiree’s income by social

security benefits. N.C. Gen. Stat. Plaintiff did not

and had had no reason to question TSER’s calculation

of the benefits to which she was entitled.

25. Based on calculations by TSERS, taking into

consideration Plaintiff’s best four consecutive years

of State compensation, her estimated Social Security

benefit of $857.00 per month, and an “actuarially

determined” factor (life expectancy and age), Plaintiff

received $2,703.34 per month from TSERS until her

62nd birthday.

26. After Plaintiff’s 62nd birthday in December

2009, through March 2019, Plaintiff received a reduced

benefit $1,846.34 from TSERS.

27. At some point in 2008, the Defendants,

through no fault of Plaintiff’s, allegedly made an

error in its calculation that resulted in Plaintiff

being overpaid over a period of years.

28. When the overpayment was discovered,

Defendants contend they were legally obligated to

pursue recovery of the overpayment.

29. On or about February 22, 2019, Steven C.

Toole, Executive Director of the Retirement Systems

Division, sent Plaintiff a letter stating that a final

review of TSERS accounts had been completed and

that it had determined that Plaintiff had been overpaid

App.64a

in the amount of $86,173.93 for the period of time

from November 2008 through July 2018.

30. The February 22, 2019, letter from Steven

C. Toole also indicated that the Retirement Systems

Division (RSD) intended to “recoup” the overpayment

“in accordance with the RSD’s recoupment procedure.”

N.C. Gen Stat. § 135-9(b).

31. On or about March 19, 2019, Plaintiff received

a letter from Vicki Roberts, Deputy Director of Member

Services of TSERS, notifying her that beginning

April 2019, Talley’s checks would be reduced by

$926.35. (Exhibit 2.)

32. The March 19, 2019, letter from Vicki Roberts

contained no appeal rights or any opportunity to be

heard to contest the reduction.

33. On April 8, 2019, Plaintiff’s son, Brent Tally,

sent an email to the Treasurer of the State of North

Carolina, Dale Folwell, inquiring about the fairness

of reducing Plaintiff’s retirement check by almost

half. Brent Talley received an automated response

stating that the email volume was heavier than

normal and that he would receive a response as soon

as possible.

34. On April 18, 2019, Talley was informed that

her 2019 April retirement check would be reduced by

$926.35 (out of $1,910.73). At this time, Talley was

finally informed that she could appeal the reduction

in an email from Patrick Kinlaw.

35. Counsel for Plaintiff replied to Patrick

Kinlaw’s email on behalf of Talley asking him to

deem the email sent by Talley’s son, Brent Tally,

April 8, 2019, to be an appeal, and further asked that

App.65a

the RSD delay any reductions in Talley’s retirement

check until the matter could be resolved.

36. Beginning April 2019, Talley’s retirement

check was unilaterally reduced by RSD despite the

fact that Talley had been given no opportunity to be

heard before the reduction of her retirement checks.

37. Plaintiff, in her 70s, depends on retirement

benefits for living expenses. Allegedly due to Defendant’s “administrative error”, the reduction in Plaintiff’s ongoing benefits caused her to receive less per

month than the amount of benefits to which she is

entitled, had been promised and for which she worked,

38. On April 24, 2019, Mr. Kinlaw notified Plaintiff that the final agency decision was that the

reduction would occur in the amount of 50% of her

retirement check $926.35, and that Talley should

consider herself fortunate in that regard because the

Retirement System Division (“RSD”) “could have

recouped,[pursuant to N.C. Gen. Stat § 135-9(b)] the

full amount of the retirement allowance,” (i.e., reduced

her on-going benefits to zero) but it had graciously

limited itself to only 50% percent.” The determination

of the amount recouped from on-going benefits was

unilateral, arbitrary, and capricious.

39. In June 2019, Plaintiff filed a Petition in

the Office of Administrative Hearings, 19DST3536,

in an attempt to stop Defendants from taking Plaintiff’s

property without an opportunity to be heard, seeking

a post-deprivation due process hearing on the taking

of her property and property rights. Plaintiff also

sought her attorney’s fees.

40. On August 26, 2019, Theresa Rogers, Chief

of Compliance, out of the blue, agreed to reduce

App.66a

Plaintiff’s monthly recoupment to 10% of her TSERS

monthly benefit, as authorized with respect to wages

by N.C. Gen. Stat. § 135-9(c). Her decision was equally

as arbitrary and capricious and the original April 24,

2019, decision of Patrick Kinlaw.

41. On February 19, 2020, the Administrative

Law Judge dismissed Plaintiff’s Petition on the grounds

that “‘a contested case before the Office of Administrative Hearings in the executive branch is “not a not

a proper method of challenging the constitutionality

of a statute.” (Exhibit 3.)

42. Defendants’ actions in unilaterally miscalculating Plaintiff’s benefits over a period in excess of

ten years, and then arbitrarily and capriciously

seizing a substantial percentage of on-going benefits

to which Plaintiff was entitled to remedy their error,

deprived Plaintiff of her rights to both pre-termination and post-termination due process to which she

was entitled under State and federal law and deprived

her of property tights in violation of both the North

Carolina and United

STATES CONSTITUTIONS.

43. 42. N.C. G.S. 135-5(n) contains a statute of

limitations which provides that: “[n]o action shall be

commenced by the State or the Retirement System

against any retired member or former member or

beneficiary respecting any overpayment of benefits

or contributions more than three years after such

overpayment was made.” Thus, if Defendants brought

an action against Plaintiff to recover their overpayment,

they would have had to prove the amount overpaid

during the preceding three years; and then attempt

to collect the same. Here, Defendants, by unilateral

App.67a

action and without due process, seized sums exceeding

three times that amount from Plaintiff’s retirement

income, depriving Plaintiff of current retirement

benefits.

44. RSD’s own Final Agency Decision letter

reveals that in an egregious lapse of professional

standards the professionals of RSD had multiple

opportunities to correctly calculate Petitioner’s benefits

prior to and beginning in 2010 and during the

ensuing nine years, but it never did so until it

brought its error to the attention of Plaintiff.

45. Plaintiff necessarily relied on RSD’s work

and expertise and suffered financial distress as a

result of RSD’s errors as well as a violation of her

constitutional rights due to the lack of pre-deprivation

and post-deprivation due process.

46. Moreover, under State law, the doctrine of

equitable estoppel applies to the facts in this case

such that the Defendants should be estopped from

recovering the overpayment to Plaintiff because the

recovery of the funds from Plaintiff constitutes a loss

to Plaintiff and the estoppel will not impair the exercise of the governmental powers of the Defendant.

47. Pursuant to N.C. Gen. Stat. § 135-6, the

Teachers’ and State Employee’s Retirement System

(“TSERS”), and its board members, are responsible

for the general determination, control, supervision,

management, and governance of all affairs, which

control the approval and payment of benefits to all

full-time teachers and State Employees in all publicschool systems, universities, departments, institutions,

and agencies of the State.

App.68a

48. Plaintiff and the class members have no

responsibility for or control over the calculation of

and subsequent amount of benefits paid each month

to them by Defendants.

49. Plaintiff and the class members have clean

hands in that they made no representations nor took

any actions to cause any of the equities in this case to

fall on the side of the Defendants and took no actions

upon which Defendants relied to their detriment.

50. Defendants including the TSERS and the

State have fully funded and amply and generously

funded the TSERS system such that the operation of

the TSERS system now or in the future will not be

impaired by estopping them from recovering the

alleged overpayments to Plaintiff.

51. Defendants are responsible by law for the

general determination, control, supervision, management, and governance of the TSERS and they alone

control the approval and payment of benefits to all

full-time teachers and State Employees in all publicschool systems, universities, departments, institutions,

and agencies of the State.

52. Defendants’ actions to arbitrarily and

capriciously confiscate any random amount up to

100% of Plaintiff’s monthly on-going retirement benefits

to re coup payments calculated and made negligently

by Defendants and the employees assigned to performed

the statutory duties assigned by the legislature falls

so far outside of the outer limits of legitimate government that in fact no process could cure the deficiency

which is a violation of Plaintiff’s rights to be free

from arbitrary and capricious action by the government.

App.69a

53. If Plaintiff or the class members were

receiving wages, under the statutes upon which

Defendants rely, Defendants take the position that

they are permitted to recover from between 10% up

to 100% of such wages under N.C. G.S. § 135-9(c).

54. However, if Defendants filed an action against

Plaintiff or the class members to recover any alleged

overpayment, under N.C. G.S. § 135-5(n), Defendants

would be prohibited from commencing any action

against “any retired member or former member or

beneficiary respecting any overpayment of benefits

or contributions more than three years after such

overpayment was made.”

55. Defendants did not file an action for recovery

because they seized Plaintiff’s benefits without filing

such an action, which seizure was in violation of the

US and NC Constitutions.

56. Even though not a current employee receiving

wages, Plaintiff sought Defendants’ agreement to

garnish only 10% of her monthly retirement pension

in this case, but Defendants refused such agreement

prior to her filing a contested case hearing. Only

after Plaintiff commenced litigation did Defendants

unilaterally stop its garnishments in excess of 10%.

57. Defendants routinely garnish arbitrary and

capricious amounts from the amounts of money paid

to individuals like Plaintiff and have no system for

notifying individuals of their right to appeal such

garnishments or their rights to negotiate the terms

of repayment, or even whether repayment is required

under the circumstances. (Exhibit 4.)

58. Because Plaintiff was a retiree receiving a

pension, instead of wages, Defendants treated her

App.70a

differently by telling her that they were entitled to

take 100% of her pension, and then eventually initially

settling on 50% of her pension.

59. Again, after Plaintiff commenced litigation,

Defendants unilaterally reduced their garnishment

to 10% of Plaintiff’s retirement pension.

60. In fact, with regard to any entity other than

the State, Defendants and any court-ordered equitable

distribution and child support payments, under N.C.

G.S. § 135-9(a), “the pension, or annuity, or a retirement

allowance . . . or any optional benefit or any other right

accrued or accruing to any person under the provisions

of this Chapter, and the moneys in the various funds

created by this Chapter, are exempt from levy and

sale, garnishment, attachment, or any other process

whatsoever, and shall be unassignable except as in

this Chapter specifically otherwise provided.”

61. All allegations of each paragraph of this

Complaint are incorporated into each Count thereof,

as though fully set out therein.

COUNT ONE

DEPRIVATION OF DUE PROCESS GUARANTEED BY

THE U.S. CONSTITUTION (42 U.S.C. § 1983)

62. Plaintiff, as a former employee of the State

of North Carolina and therefore a member of the

Retirement System for Teachers and State Employees,

had a vested property interest in her accrued retirement

benefits; such benefits were calculated and paid by

Defendants.

63. For years, Plaintiff and the class members

have been and are being deprived of property by the

state without any pre-deprivation or post-deprivation

App.71a

due process or notification of their rights to contest

such garnishments by the State.

64. Pension benefits are so sacrosanct they are

only subject to garnishment or attachment to pay

equitable distribution or child support to support

other individuals, except that Defendants routinely

garnish and attach pension benefits when they allege

such benefits have been negligently calculated by

them and mistakenly overpaid through no fault of

the garnishee.

65. To the extent, Defendants rely on certain

statutory provisions including but not limited to N.C.

G.S. § 135-9 and § 135-5(n) to justify their actions in

failing to provide Plaintiff and the class members

with any pre-deprivation due process and postdeprivation due process only when represented by

counsel, such statutes as applied by Defendants deny

Plaintiff’s and the class members’ due process.

66. The constitutional due process rights of Plaintiff and the class members have been violated as a

result of Defendants’ actions.

67. Plaintiff and the class members have suffered

damages as a result of the Defendants’ unconstitutional

deprivation of their property without due process.

COUNT TWO

DEPRIVATION OF DUE PROCESS GUARANTEED BY

THE N.C. CONSTITUTION (CORUM CLAIM)

68. Defendants have routinely seized property

belonging to Plaintiff and the class members in the

form of portions of benefits paid under Chapter 135

of the N.C. General Statutes, without due process.

App.72a

69. The N.C Supreme Court has interpreted several provisions of the North Carolina Constitution as

guarantees of due process, including Article I, Sections

1, 3 and 19.

70. Defendants provided Plaintiff and the class

members no pre-deprivation due process and Defendants only provided Plaintiff with a final agency decision which provided notice that she was entitled to a

contested case hearing at the N.C. Office of Administrative Hearings because she was represented by

counsel who asserted her rights to due process.

71. To the extent, Defendants rely on certain

statutory provisions including but not limited to N.C.

G.S. § 135-9 and § 135-5(n) to justify their actions in

failing to provide Plaintiff and the class members

with any pre-deprivation due process and postdeprivation due process only when represented by

counsel, such statutes as applied by Defendants deny

Plaintiff and the class members’ due process.

72. The constitutional due process rights of Plaintiff and the class members have been violated as a

result of Defendants’ actions.

73. Plaintiff and the class members have suffered

damages as a result of the Defendants’ unconstitutional

deprivation of their property without due process.

COUNT THREE

DEPRIVATION OF EQUAL PROTECTION AND

SUBSTANTIVE DUE PROCESS GUARANTEED BY U.S.

CONSTITUTION (42 U.S.C. § 1983)

74. Under the U.S. Constitution, Plaintiff and

the class members are guaranteed equal protection

App.73a

under the law under the Fifth and Fourteenth Amendments of the U.S. Constitution.

75. The statutes upon which Defendants rely to

garnish and attach the retirement pension of Plaintiff

and the class members treat individuals differently

depending on whether the individual is a member or

beneficiary of the retirement system or alternatively,

is a current employee of the State or political

subdivision thereof.

76. The statutes upon which Defendants rely to

garnish and attach the benefits paid to Plaintiff and

the class members and treat them differently are

arbitrary and capricious and lacking in any rational

basis as they depend on whether the State is the

Plaintiff or Defendant with regard to the overpayment.

77. The statutes upon which Defendants rely to

garnish and attach the benefits paid under Chapter

125 to Plaintiff and the class members and treat

individuals differently are arbitrary and capricious

and lacking in any rational basis as they depend on

whether the Plaintiff and the class members obtain

legal representation and attempt to negotiate a payment amount different from the 100%, 50%, or any

other percentage that Defendants claim they are

entitled to garnish.

78. To the extent, Defendants rely on certain

statutory provisions including but not limited to N.C.

G.S. § 135-9 and § 135-5(n) to justify their actions,

such statutes as applied, deny Plaintiff and the class

members the equal protection of the law and are

arbitrary and capricious in violation of the rights of

Plaintiff and the class members to substantive due

process.

App.74a

79. The constitutional rights of Plaintiff and the

class members to equal protection and substantive

due process have been violated as a result of Defendants’ actions.

80. Plaintiff and the class members have suffered

damages as a result of the Defendants’ denial of their

rights to equal protection and to be free from arbitrary

and capricious government action which violates their

substantive due process rights.

COUNT FOUR

DEPRIVATION OF EQUAL PROTECTION AND

SUBSTANTIVE DUE PROCESS GUARANTEED BY N.C.

CONSTITUTION (CORUM CLAIM)

81. Under the N.C. Constitution, Plaintiff and

the class members are guaranteed equal protection

under the law under section 19 of Article 1.

82. The statutes upon which Defendants rely to

garnish and attach the benefits paid under Chapter

135 to Plaintiff and the class members treat individuals

differently depending on whether the individual is a

member or beneficiary of the retirement system or

alternatively, depending on whether the individual is

a current employee of the State or political subdivision

thereof.

83. The statutes upon which Defendants rely to

garnish and attach the benefits paid to Plaintiff and

the class members treat individuals differently

depending on whether the State or Defendant is the

plaintiff with regard to the overpayment and when

the overpayment was made.

84. The statutes upon which Defendants rely to

garnish and attach the retirement pension of Plaintiff

App.75a

and the class members treat individuals differently

depending on whether the Plaintiff and the class

members obtain counsel and attempt to negotiate a

payment amount different from the 100%, 50%, or

any other percentage that Defendants arbitrarily

decide to garnish and attach.

85. To the extent, Defendants rely on certain

statutory provisions including but not limited to N.C.

G.S. § 135-9 and § 135-5(n) to justify their actions,

such statutes as applied, deny Plaintiff and the class

members the equal protection of the law and are

arbitrary and capricious in violation of their rights to

substantive due process.

86. There is no rational basis for treating former

or current employees/beneficiaries differently with

regard to the collection of alleged overpayments in

amount or kind and the failure to treat individuals

differently based on whether they protest the

garnishing/attaching of their retirement pension or

wages is likewise irrational.

87. The constitutional rights of Plaintiff and the

class members to equal protection and substantive

due process have been violated as a result of Defendants’ actions.

88. Plaintiff and the class members have suffered

damages as a result of the Defendants’ denial of their

rights to equal protection and to be free from arbitrary

and capricious government action which violates their

substantive due process rights.

PRAYER FOR RELIEF

WHEREFORE, the Plaintiff respectfully prays

that this Court:

App.76a

1. That this Court issue an injunction prohibiting

Defendants from continuing to seize benefits paid

under Chapter 135 of the N.C. General Statutes to

Plaintiff and the class members;

2. That the Court enter an injunction prohibiting

Defendants from garnishments of alleged overpayments

of benefits to Plaintiff and the class members under

Chapter 135 of the N.C. General Statutes beyond the

three years preceding the notice of overpayment provided in G.S. § 135-5(n);

3. That the Court enter an injunction prohibiting

Defendants from garnishments of any benefits paid

to Plaintiff and the class members under Chapter

135 of the N.C. General Statutes without predeprivation and post-deprivation due process;

4. That this Court provide Plaintiff and the

class members damages for the deprivation of their

constitutional rights to substantive due process and

equal protection in the terms of the garnishments for

alleged overpayments for benefits paid under Chapter

135 of the N.C. General Statutes;

5. That this Court award the Plaintiff and the

class members reasonable attorney’s fees and any

other costs related to this action; and

6. That this Court award Plaintiff and the class

members such other and further relief as may be

deemed just and proper.

DEMAND FOR JURY TRIAL

Plaintiff requests a jury trial on all questions of

fact raised by the Complaint.

App.77a

Respectfully submitted, this the 21st day of March

2022.

/s/ Valerie L. Bateman

Valerie L. Bateman

NEW SOUTH LAW FIRM

N.C. Bar 13417

209 Lloyd St., Ste 350

Carrboro, NC 27510

Telephone: (919) 810-3139

valerie@newsouthlawfirm.com

/s/ June K. Allison

June K. Allison

NEW SOUTH LAW FIRM

N.C. Bar 9673

233 S. Laurel Ave.

Charlotte, NC 28207

Telephone: (704) 277-0113

june@newsouthlawfirm.com

App.78a

EXHIBIT 2 TO COMPLAINT,

LETTER FROM VICKI ROBERTS

(MARCH 19, 2019)

NORTH CAROLINA TOTAL RETIREMENT PLANS

NORTH CAROLINA

DEPARTMENT OF STATE TREASURER

RETIREMENT SYSTEMS DIVISION

3/19/2019

Patsy W Talley

6459 Broad Creek RD

Washington NC 27889-9735

Re: PATSY W TALLEY Member ID 974693

Dear Ms. TALLEY:

Your overpayment balance as of 3/19/2019 is

$86,173.93. Effective with your April, 2019 benefit

payment, our office will begin monthly deductions of

$926.35 to be applied to the overpayment balance.

If we may be of further assistance, please

contact us at the address or telephone number listed

below.

Sincerely,

/s/ Vicki Roberts

Deputy Director of Member Services

Retirement Systems Division

App.79a

EXHIBIT 3 TO COMPLAINT,

SUMMARY SHEET OF OVERPAYMENT

OPTION 4 AMOUNTS

{ Note: Only Relevant Columns of

Data included. The Data for Patsy W. Talley

was moved to the top of the table }

OP Time

Period

# of

OP Total

Month

TERMS

of Rep.

Data for Patsy W. Talley

11/08 - 7/18

99

$86,173.93

10%

Data for Other Employees

4/08 - 7/18

124

$120,290.68

20%

7/08 - 7/18

121

$135,108.45

25%

12/09 - 7/18

104

$64,493.02

20%

12/07 - 7/18

128

$135,462.18

25%

3/07 - 7/18

137

$94,206.93

10%

7/91 - 7/18

325

$295,289.33

20%

8/10 - 7/18

96

$71,534.89

40%

11/04 - 7/18

165

$232,577.60

30%

1/10 - 7/18

103

$66,126.91

10%

9/05 - 7/18

155

$107,943.72

N/A

1/02 - 7/18

199

$175,003.90

50%

App.80a

OP Time

Period

# of

OP Total

Month

TERMS

of Rep.

3/01 - 8/18

210

$147,152.85

30%

8/95 - 7/18

276

$329,192.70

N/A

6/97 - 7/18

254

$145,110.64

50%

7/96 - 7/18

265

$216,790.82

25%

6/06 - 7/18

146

$127,061.40

40%

7/05 - 7/18

157

$201,611.84

40%

4/08 - 7/18

124

$73,877.49

50%

3/88 - 12/18

370

$163,374.42

30%

7/09 - 7/18

109

$68,291.09

50%

7/04 - 7/18

169

$217,796.02

N/A

4/00 - 7/18

220

$141,533.92

10%

9/07 - 7/18

131

$99,508.76

10%

1/10 - 7/18

103

$80,840.71

N/A

1/05 - 7/18

163

$172,841.05

N/A

10/89 - 7/18

346

$282,062.13

50%

1/95 - 7/18

283

$185,069.93

20%

7/05 - 7/18

157

$108,787.74

110%

6/10 - 7/18

98

$54,156.83

20%

1/91 - 7/18

331

$13,130.10

$550/mo

1/99 - 7/18

231

$236,350.44

20%

7/09 - 7/18

109

$116,443.37

N/A

TOTAL

$4,765,195.82

App.81a

AFFIRMATION

I, Theresa R. Rogers, being first duly sworn, do

depose and say that I am the Chief Compliance

Officer for the Retirement Systems Division in the

Office of State Treasurer; that I am acquainted with

the facts of this case; that I have reviewed Respondent’s

Responses to Petitioner’s First Set of Interrogatories;

and that to the best of my knowledge, information,

and belief, the factual statements in the responses to

Interrogatory No. 2, 3, and 4 are true and accurate.

/s/ Theresa R. Rogers

WAKE COUNTY, NORTH CAROLINA

Signed and sworn to before me this day by Theresa

R. Rogers.

Date: 12/13/2019

/s/ Annie B. Morgan

Notary Public

Wake County, N.C.

My Commission expires: 8/10/2022

App.82a

EXHIBIT 4 TO COMPLAINT,

FINAL DECISION SUMMARY JUDGMENT,

BEAUFORT COUNTY OFFICE OF

ADMINISTRATIVE HEARINGS

(FEBRUARY 19, 2020)

STATE OF NORTH CAROLINA

COUNTY OF BEAUFORT

IN THE OFFICE OF ADMINISTRATIVE

HEARINGS

________________________

PATSY TALLEY,

Petitioner,

v.

DALE R FOLWELL IN HIS CAPACITY AS

TREASURER OF THE STATE OF NC

NC OFFICE OF STATE TREASURER

RETIREMENT SYSTEMS DIVISION TEACHERS

AND STATE EMPLOYEES RETIREMENT

SYSTEM OF NC AND THE STATE OF NC,

Respondent.

________________________

No. 19 DST 03536

Before: J RANDOLPH WARD,

Administrative Law Judge.

App.83a

THIS MATTER is before the undersigned on the

Respondent’s Motion for Summary Judgment and

Memorandum in Support of Respondent’s Motion for

Summary Judgment, filed November 25, 2019; the

Petitioner’s Response to Respondent’s Motion for

Summary Judgment, and Petitioner’s Motion For

Summary Judgment and Motion for Attorney’s Fees,

filed December 5, 2019; Respondent’s Reply to

Petitioner’s Response to Respondent’s Motion for

Summary Judgment and Response to Petitioner’s

Motion for Summary Judgment and Motion for

Attorney’s Fees, filed December 16, 2019; Petitioner’s

Reply to Respondent’s Response to Petitioner’s Motion

for Summary Judgment, filed February 10, 2020;

and, Addendum to Petitioner’s Reply to Respondent’s

Response to Petitioner’s Motion for Summary Judgment,

filed February 13, 2020.

RECITATION OF UNDISPUTED FACTS

The following account of the events giving rise to

this dispute is drawn from the Affidavit of Teresa R.

Rogers, the Chief of Compliance in the Retirement

Systems Division, and a custodian of its records, filed

on Nov. 25, 2019.

1. The Petitioner Patsy W. Talley retired from

the Beaufort County schools effective November 1,

2008, when she was 60 years old. She elected to

accept the monthly benefit payments she had accrued

with the Teachers’ and State Employees’ Retirement

System (“TSERS”) under “Option 4,” the “Social

Security Leveling method.” N.C. Gen. Stat. § 135-5(g),

Option 4. The “leveling” effect is achieved by drawing

more money from the TSERS account before the

retiree first becomes eligible to draw Social Security

App.84a

at age 62, and a lesser amount after her Social

Security benefit begins, with these amounts calculated

to provide the retiree, “so far as possible, approximately the same amount per year before and after”

Social Security benefits become available.

2. Based on Respondent’s calculation of Petitioner’s best four consecutive years of State compensation, her estimated Social Security benefit of $ 857.00

per month, and an “actuarially determined” factor

(presumably, her life expectancy based on her attained

age), Ms. Talley received $ 2,703.34 per month from

TSERS until her 62nd birthday. That birthday came

in December 2009, and from January through April

of 2010, she received $ 1,846.34 from TSERS ($

2,703.34-$ 857.00 = $ 1,846.34).

3. In April 2010, Respondent determined that

Ms. Talley’s average final compensation was $ 470.08

greater than the figure used in initially calculating

her benefits. The agency recalculated the benefits

that should have been paid, before and after her sixtysecond birthday. The “before-age-sixty-two” amount,

$ 2,721.24, and the “after-age-sixty-two” amount, $

1,864.24, were both $ 17.90 higher. Respondent sent

Petitioner check for $322.20 to compensate for the

monthly underpayments that had accumulated from

November 2008 through April 2010. Respondent

contends, without contradiction, that with this

titration, Petitioner was properly paid her benefits

through April 2010.

4. Beginning in May 2010, TSERS began erroneously paying Petitioner the recalculated “before-agesixty-two amount of $ 2,721.24” monthly, while she

was also drawing Social Security retirement benefits.

Consequently, she was receiving a total of $3,578.24,

App.85a

rather than the “level” amount of $ 2,721.24 roughly

comparable to her before-age-sixty-two benefits. The

General Assembly subsequently granted retirees

cost-of-living adjustments (“COLAs”) or one-time costof-living supplements in 2012, 2014, 2016 and 2017,

which cumulatively increased the miscalculated

monthly benefits Ms. Talley was receiving from TSERS

to $ 2,803.69.

5. Ms. Rogers avers that in August 2018, the

agency “realized the error and corrected the benefit

payment,” adjusted for the COLAs, to $ 1,920.73 per

month. Respondent calculates that it overpaid Ms.

Talley by $ 86,173.93 between May 2010 through

July 2018. See a summary of the overpayments at

page 3 of the document constituting agency action,

dated April 24, 2019, appended to Respondent’s Prehearing Statement, filed July 24, 2019.

6. Initially, Respondent withheld one half of the

monthly TSERS benefit. On August 26, 2019, Ms.

Rogers spoke to Petitioner and agreed to reduce the

repayment amount to 10% of the TSERS benefit, as

authorized by N.C. Gen. Stat. § 135-9(c).

ISSUES AND ARGUMENTS

7. In support of its summary judgment motion,

the Respondent cites its “statutory obligation to

recoup . . . the overpayment amount” imposed by N.C.

Gen. Stat. § 143-64.80(b):

No State department, agency, or institution,

or other State-funded entity may forgive

repayment of an overpayment of State funds,

but shall have a duty to pursue the repayment of State funds by all lawful means

App.86a

available, including the filing of a civil action

in the General Court of Justice.

N.C. Gen. Stat. § 135-9 specifies that this affirmative

duty may be met by offsetting and overpayment

“against any retirement allowance, return of

contributions or any other right accruing under this

Chapter [135].” This section effectively conditions the

right to receive the TSERS retirement benefits on

the State’s prerogative to recover overpayments.

8. In her Response to Respondent’s Motion, Petitioner first argues that the statute of limitations for

the State to file suits to recover such overpayments

significantly limits TSERS’ right to recover benefits

from Petitioner. The statute provides:

No action shall be commenced against the

State or the Retirement System by any

retired member or beneficiary respecting

any deficiency in the payment of benefits

more than three years after such deficient

payment was made, and no action shall be

commenced by the State or the Retirement

System against any retired member or former

member or beneficiary respecting any overpayment of benefits or contributions more

than three years after such overpayment

was made. This subsection does not affect the

right of the Retirement System to recoup

overpaid benefits as provided in G.S. 135-9.

N.C. Gen. Stat. § 135-5(n) (2019). Petitioner argues

that Respondent cannot recoup overpayments made

more than three year before it files an action for

recovery.

App.87a

9. Our Court of Appeals has considered Petitioner’s argument under factually similar circumstances

and came down firmly on the side of the Respondent.

We agree with the State that the term

“action” in N.C. Gen. Stat. § 135-5(n) is

inapplicable to the State’s reduction of

future state benefits. When used in this

context, the phrase “no action shall be commenced” has a special meaning, drawn from

N.C. Gen. Stat. § 1-2, which describes an

action as “an ordinary proceeding in a court

of justice, by which a party prosecutes

another party for the enforcement or protection of a right, the redress or prevention of a

wrong, or the punishment or prevention of a

public offense.” The State’s reduction of

[retiree] Trejo’s benefits to recoup the overpayment and apply the offset going forward is

not a proceeding in a court of justice and

thus is not the commencement of an action

for purposes of the statute of limitations.

Moreover, N.C. Gen. Stat. § 135-9 permits

the State to recoup any overpayment through

the reduction of other state benefits owed

to the recipient “[n]otwithstanding any

provisions to the contrary” and N.C. Gen.

Stat. § 135-5(n) provides that its three-year

limitation “does not affect the right of the

Retirement System to recoup overpaid

benefits as provided in G.S. 135-9.” Thus,

the State is permitted to use recoupment to

recover an overpayment regardless of whether

N.C. Gen. Stat. § 135-5(n) might limit the

State’s ability to recover that same overpay-

App.88a

ment through other legal means in a court

proceeding. Accordingly, we reject Trejo’s

argument that the State’s reduction in her

benefits is time barred.

Trejo v. NC Dep’t of State Treasurer Ret. Sys. Div.,

808 S.E.2d 163, 168 (N.C. Ct. App. 2017), review

denied, 813 S.E.2d 243 (N.C. 2018).

10. Petitioner offers a constitutional argument

that she obtained a vested right to retain the overpaid

benefits, citing Bailey v. State, 348 N.C. 130, 141,

500 S.E.2d 54, 60 (1998), Faulkenbury v. Teachers’ &

State Emples. Ret. Sys., 345 N.C. 683, 483 S.E.2d 422

(1997), and their progeny. She also argues that the

statutes allowing Respondent to stop the overpayments

before affording petitioner a due process hearing are

constitutionally defective. This may preserve these

arguments for judicial review, but a contested case

before the Office of Administrative Hearings in the

executive branch is “not a not a proper method of

challenging the constitutionality” of a statute. Beard

v. North Carolina State Bar, 320 N.C. 126, 357

S.E.2d 694 (N.C., 1987) “[I]t is the province of the

judiciary to make constitutional determinations.” Meads

v. North Carolina Dep’t of Agric., 349 N.C. 656, 670,

509 S.E.2d 165, 174 (1998); Bailey v. State of North

Carolina, 330 N.C. 227, 246, 412 S.E.2d 295, 306

(1991), cert. denied, 504 U.S. 911, 112 S.Ct. 1942, 118

L.Ed.2d 547 (1992). An Administrative Law Judge

follows the constitutional rulings of the Judicial

Branch but does not make them.

11. Petitioner seeks “an award of attorney’s fees

under N.C. Gen. Stat. § 6-19.1,” which authorizes

such relief under certain circumstances for “a party

who is contesting state action” in a “civil action” or

App.89a

“pursuant to G.S. § 150B-43,” which authorizes the

review in Superior Court of a contested case decision

by an Administrative Law Judge. That Court is authorized include in an award “attorney fees applicable to

the administrative review portion of the case, in

contested cases arising under Article 3 of Chapter

150B.” Assuming that an Administrative Law Judge

can make an attorney’s fee award pursuant to this

statute, it requires that the movant be the “prevailing

party” in the “action.”1

12. Under the Administrative Procedure Act, an

Administrative Law Judge can award reasonable

attorney’s fees in cases of this kind when it is found

that a State agency has “substantially prejudiced the

petitioner’s rights and has acted arbitrarily or

capriciously[.]” N.C. Gen. Stat. § 150B-33(b)(11)

(emphasis added). “The ‘arbitrary or capricious’ standard is a difficult one to meet. Administrative agency

decisions may be reversed as arbitrary or capricious if

they are patently in bad faith, or whimsical in the

sense that they indicate a lack of fair and careful

consideration or fail to indicate any course of reasoning

and the exercise of judgment. . . . ” Act-Up Triangle

v. Comm’n for Health Services for the State of N.C.,

354 N.C. 699, 707, 483 S.E.2d 388, 393 (1997). In this

instance, Respondent clearly sought to follow its

interpretation of the applicable statutes.

1 As Petitioner’s citation suggests, the standard for determining

whether agency’s action was “substantially justified” is not

“outcome determinative.”. Crowell Constructors, Inc. v. State ex

rel. Cobey, 342 N.C. 838, 845, 467 S.E.2d 675, 679 (1996). However, the statute itself requires a successful movant.

App.90a

13. Summary judgment is appropriate when the

movant shows “that there is no genuine issue as to

any material fact and that any party is entitled to

judgment as a matter of law.” N.C. Gen. Stat. § 1A-1,

Rule 56(c). All evidence must be viewed in the light

most favorable to the non-moving party, taking its

asserted facts as true, and drawing all reasonable

inferences in its favor. Kennedy v. Guilford Tech.

Community College, 115 N.C. App. 581, 583, 448

S.E.2d 280, 281 (1994). The party seeking summary

judgment bears the initial burden of demonstrating

the absence of any genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

“According to well-established North Carolina law,

when a moving party has met his burden of showing

that he is entitled to an award of summary judgment

in his favor, the non-moving party cannot rely on the

allegations or denials set forth in her pleading, Ind–

Com Elec. Co. v. First Union Nat. Bank, 58 N.C. App.

215, 217, 293 S.E.2d 215, 216–17 (1982), and must,

instead, forecast sufficient evidence to show the existence of a genuine issue of material fact in order to

preclude an award of summary judgment.” Steele v.

Bowden, 238 N.C. App. 566, 768 S.E.2d 47, 57 (2014).

“An Administrative Law Judge may grant . . . summary judgment, pursuant to a motion made in

accordance with G.S. 1A-1, Rule 56, that disposes of

all issues in the contested case.” N.C. Gen. Stat.

§ 150B-34(e).

FINAL DECISION

It appearing that there is no genuine issue of

material fact in controversy, and that the Respondent

is entitled to summary judgment as a matter of law,

App.91a

the Petitioner’s motions for summary judgment and

attorney’s fees are denied, and the Petition must be,

and hereby is, DISMISSED. N.C. Gen. Stat. §§ 1A-1,

Rule 56; 150B-34(e); 26 NCAC 03 .0101(a).

NOTICE OF APPEAL

This is a Final Decision issued under the authority

of N.C. Gen. Stat. § 150B-34.

Under the provisions of North Carolina General

Statute § 150B-45, any party wishing to appeal the

final decision of the Administrative Law Judge must

file a Petition for Judicial Review in the Superior

Court of the county where the person aggrieved by

the administrative decision resides, or in the case of

a person residing outside the State, the county where

the contested case which resulted in the final decision

was filed. The appealing party must file the petition

within 30 days after being served with a written copy

of the Administrative Law Judge’s Final Decision. In

conformity with the Office of Administrative Hearings’

rule, 26 N.C. Admin. Code 03.0102, and the Rules of

Civil Procedure, N.C. General Statute 1A-1, Article

2, this Final Decision was served on the parties as

indicated by the Certificate of Service attached to

this Final Decision. N.C. Gen. Stat. § 150B-46 describes

the contents of the Petition and requires service of

the Petition on all parties. Under N.C. Gen. Stat.

§ 150B-47, the Office of Administrative Hearings is

required to file the official record in the contested

case with the Clerk of Superior Court within 30 days

of receipt of the Petition for Judicial Review. Consequently, a copy of the Petition for Judicial Review

must be sent to the Office of Administrative Hearings

App.92a

at the time the appeal is initiated in order to ensure

the timely filing of the record.

IT IS SO ORDERED.

This the 19th day of February, 2020.

/s/ J Randolph Ward

Administrative Law Judge