Case Study

AT ISSUE: In February 2007, Google, the Internet search engine giant, announced plans to build a $600 million data center in Caldwell County, N.C.. which would bring more than 200 badly needed jobs to this economically depressed area of the state.

Google qualified for financial incentives under a 2006 North Carolina law designed to promote job creation. The N. C. Institute for Constitutional Law, an anti-incentives citizens group led by a former North Carolina Supreme Court Justice, filed suit challenging the deal, as it has in other instances where financial incentives have been used to attract businesses.

Google called on Womble Carlyle’s experienced team of Burley Mitchell, Press Millen and Sean Andrussier to defend the incentives package. Mitchell, Millen and Andrussier successfully defended a similar challenge to a Dell Inc. computer plant in Winston-Salem, ultimately prevailing before the North Carolina Supreme Court in April, 2008. In 2005, the same team of Womble Carlyle attorneys also successfully persuaded a North Carolina federal court to dismiss an action challenging the legality of local retail incentives.

SUMMARY/RESULT: The case was heard in Wake County (N.C.) Superior Court in November, 2008. The plaintiffs argued that the economic incentives were not permitted under the state’s Constitution.

The Womble Carlyle team countered that incentives were, in fact, legal and that their Constitutionality had long been established. Mitchell, Millen and Andrussier argued that economic incentives serve a legitimate public interest by creating jobs and building the tax base.

On November 14th, Superior Court Judge Paul Ridgeway ruled completely in favor of Google, dismissing all 12 of the plaintiff’s claims.

IMPLICATION: Had the plaintiff’s challenge been successful, the future of economic incentives in North Carolina would have been put on hold or even stopped altogether. The state likely would have found itself at a competitive disadvantage in recruiting new industry.

The victory clears the way for continued use of economic incentives for job creation in North Carolina. More important to the client, it enables Google to benefit from the bargain it made when it built its data center.

ABOUT THE ATTORNEYS: Burley Mitchell served as a North Carolina Supreme Court Justice for 17 years, including serving as Chief Justice from 1995-1999, where he handled numerous landmark cases. He now practices in the firm’s Appellate, Business Litigation and Federal and State Government Affairs practice areas.

Pressly M. Millen brings 20 years of experience in complex litigation matters. He has represented clients in numerous industries including pharmaceuticals, software, telecom, and retail in federal and state courts. He practices in the firm’s Business Litigation practice group.

Sean Andrussier focuses his practice on constitutional law issues concerning both the U.S. and North Carolina Constitutions. He is an Appellate and Business Litigation attorney in Womble Carlyle’s Raleigh office.