North Carolina may be headed toward allowing parties to recover their attorneys’ fees in administrative cases involving state agencies.  On May 31, the NC Senate passed the Regulatory Reform Act of 2012 (SB 810), which would “fine tune” significant changes wrought by the General Assembly last session as part of its effort to modify our state’s regulatory framework.  Arguably one of the most significant changes included in SB 810 is the new power granted to Administrative Law Judges (ALJs) to assess attorneys’ and witnesses’ fees against state agencies involved in contested cases.

In its current form, SB 810 would allow persons who prevail in certain contested cases challenging state agency actions to obtain an order from the presiding ALJ requiring the agency to reimburse the petitioners for their reasonable attorneys’ and/or witnesses’ fees.  The new potential for an assessment of such fees would be limited to situations where the ALJ finds that the state agency substantially prejudiced the petitioner’s rights and acted arbitrarily or capriciously.  If enacted into law, this new facet to contested cases could make state agencies think twice before taking questionable enforcement actions. 

SB 810 now moves to the NC House for consideration.  We will be following the Regulatory Reform Act of 2012 as it moves through the legislative process, and will provide updates on further developments of note.