The N.C. Supreme Court dismissed yesterday an appeal by taxpayers challenging economic incentives committed to Dell Inc. for its computer-assembly plant in Forsyth County.
The court also denied a discretionary review of a lawsuit filed by the N.C. Institute for Constitutional Law in 2005 aimed at local and state incentives.
The lawsuit alleged that the subsidies to Dell, which could be worth as much as $305 million, violated various provisions of the state and federal constitutions.
"At this point, we are still considering what options we may have available in the Dell case," said Jeanette Doran, a senior staff attorney with the institute.
Burley Mitchell, a former chief justice of the N.C. Supreme Court who represented Dell, said he believes that yesterday's decision ends the case.
"They could appeal to the U.S. Supreme Court that the incentives violate the federal constitution, but the odds are great against it being successful," Mitchell said.
In order to qualify for the incentives, Dell is obligated to create at least 1,500 jobs by October 2010 and to spend at least $100 million on local operations. It currently has spent at least $115 million on the plant and has about 1,150 employees.
Robert Orr, an official with the institute and a former justice on the N.C. Supreme Court, has said that the incentives are unconstitutional because they primarily benefit Dell rather than a general public purpose. Orr is running for the Republican nomination for governor on an anti-incentive platform. On Oct. 16, the N.C. Court of Appeals disagreed with the lawsuit, finding that the incentives "promote the general economic welfare of the communities involved" and are constitutional under a 1996 decision of the state Supreme Court.
"While we are disappointed by the Supreme Court's decision, we remain committed to enforcing constitutional limitations on government, including limits on government spending," Doran said.
Mitchell said that the state Supreme Court "looked at an excellent decision from the Court of Appeals, which basically followed the law."
"Setting economic policy is left up to the legislature and the governor, and that's where the plaintiffs' opposition to incentives needs to be argued," he said.
The institute is pursuing other lawsuits focused on incentives, including those provided to Bridgestone/Firestone and Google. Doran said that those lawsuits include legal issues distinct from the Dell case.
Local economic officials said that the Supreme Court ruling further solidifies North Carolina's practice of offering incentives, often in the form of cash grants, that business boosters insist they need to attract new jobs to the state.
"Time after time, our state courts and the U.S. Supreme Court have upheld the use of incentives," said Gayle Anderson, the president and chief executive of the Greater Winston-Salem Chamber of Commerce. "... We must have incentives in our toolbox to remain competitive in the global economy."
David Frink, a spokesman for Dell, said that the company "believes North Carolina has taken a pragmatic approach to jobs creation, one that had been reviewed and approved by several previous court rulings."
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
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