Appeals Court Rejects Monopoly For Bail Agent Training | Eastern North Carolina Now

    Publisher's note: The author of this post is Michael Lowrey, who is an associate editor for the Carolina Journal, John Hood Publisher.

    General Assembly cannot name the only group allowed to certify agents

    RALEIGH     The state's second highest court has rejected an attempt by the General Assembly to specify the sole organization that can provide the training that's required of bail bondsmen. In its ruling, the N.C. Court of Appeals held that the 2012 law ran afoul of a provision in the state constitution prohibiting monopolies.

    State law requires bail bondsmen to obtain a license from the government. The requirements for obtaining this certification include 12 hours of classwork. In addition, bail agents must take three hours of continuing education classes each year to keep their license current. In recent years, two different groups have provided this mandated training: the for-profit North Carolina Bail Academy, which is owned by the Rockford-Cohen Group, and the nonprofit North Carolina Bail Agents Association.

    As Carolina Journal documented in a January 2013 article, the relationship between these two organizations is strained at best. During the waning days of the 2012 legislative session, the General Assembly passed a law declaring that only the Bail Agents Association could provide bail bondsmen training. The exact origin of the provision is uncertain, though two senior legislative leaders one are closely linked to the association. Sen. Tom Apodaca, R-Henderson, owns a bail bonding company and is former president of the N.C. Bail Agents Association. Rep. Justin Burr, R-Stanly, is a bail bondsman and his father is the association's current president.

    In response to the change in law that would put them out of the bail bondsmen training business, the Rockford-Cohen Group went to court seeking to bar enforcement of the provision. Superior Court Judge Donald Stephens issued a preliminary injunction on Oct. 1, 2012, doing just that.

    "This court cannot find any factual, logical or reasonable basis that [the law] serves any other purpose other than to eliminate all current and future competition for the benefit of a private corporation or association in violation of the North Carolina Constitution," he wrote.

    The Bail Agents Association then proceeded to challenge Stephens' determination and brought the matter before the Court of Appeals, where the constitutionality of the provision was again the central issue.

    Article I, Section 34 of the North Carolina Constitution states, "perpetuities and monopolies are contrary to the genius of a free state and shall not be allowed."

    The N.C. Supreme Court has addressed what constitutes a monopoly in a 1940 case, State v. Harris. The high court noted that, "monopoly, as originally defined, consisted in a grant by the sovereign of an exclusive privilege to do something which had theretofore been a matter of common right."

    "The exclusion of others from such common right is still considered a prominent feature of monopoly, and the consequent loss to those excluded of opportunity to earn a livelihood for themselves and their dependents ... has been considered the prime reason for the public policy then adopted into the Constitution."

    Upon appeal, the Bail Agents Association contended that the "opportunity to provide state-mandated training to bail bondsmen is not a common right."

    The Court of Appeals flatly rejected this argument.

    "Defendant misconstrues the common right at issue," wrote Judge Linda McGee for the court in upholding the injunction.

    "The General Assembly created the right to apply to provide creditable bail bondsmen training in the previous version of this statute. ... Then, the General Assembly amended the statute to exclude all others from being considered by the Commissioner of Insurance to provide creditable bail bondsmen training.

    "Thus, the common right that has been lost is the right to be considered by the Commissioner of Insurance for approval to provide creditable bail bondsmen training. By excluding all others, the General Assembly deprived all others of the opportunity 'to earn a livelihood for themselves and their dependents. ...'"

    Court of Appeals decisions are binding interpretations of North Carolina law unless overruled by the state Supreme Court. Because the three-judge panel made a unanimous ruling, the high court is not required to hear the case if the Bail Agents Association decides to appeal.

    The case is Rockford-Cohen Group., LLC v. N.C. Department of Insurance, (13-124).
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