certificate of need con CON law Featured Jay Singleton Kinsley v. Ace Speedway Law & Public Safety North Carolina Constitution rational basis review regulation Singleton v. NC DHHS

The trouble with rational basis review, part five

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October 14, 2026

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The North Carolina Supreme Court’s 2024 opinion in Kinsley v. Ace Speedway has important implications for rational basis review and for Singleton v. NC DHHS
One of those implications is that rational basis review is never the appropriate standard for motions to dismiss under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure
That means the North Carolina Court of Appeals must overturn the Wake County Superior Court panel’s recent decision in Singletonand remand the case for a hearing on the merits

Note: This is the fifth in a series of research briefs discussing rational basis review, a judicial doctrine that shields economic regulations from constitutional challenges.

Over the course of the last six years, the John Locke Foundation has filed six friend-of-the-court briefs in Singleton v. NC DHHS, a lawsuit challenging North Carolina’s Certificate of Need (CON) law. We have done so partly because we hope the North Carolina Supreme Court will eventually hear the case on the merits and decide that the law violates the state constitution, but also because we hope the court will resolve the case in a way that brings judicial review doctrine into better alignment with the text and history of the state constitution. (See here, here, here, and here.)

The plaintiff in the case is Dr. Jay Singleton, a the New Bern eye surgeon. Instead of giving him an opportunity to present his case, the courts have repeatedly dismissed it without a hearing, which illustrates the fundamental point of this series of research briefs: “Rational basis review as currently practiced in North Carolina makes it far too hard for citizens to challenge state laws on constitutional grounds.” There is good news, too, however. While Singleton has been stuck in procedural limbo, the Supreme Court has used a different case as a vehicle for reforming judicial review doctrine in North Carolina. Its recent opinion in Kinsley v. Ace Speedway almost certainly means Dr. Singleton will eventually get his day in court.

Singleton v. NC DHHS illustrates the absurdity and unfairness of dismissing constitutional challenges under rational basis review

In 2020, Dr, Singleton filed a lawsuit claiming that North Carolina’s Certificate of Need (CON) law violates several provisions of the North Carolina State Constitution. In his original complaint and in numerous, subsequently filed documents, he provided the courts with copious evidence showing that, pursuant to the CON law, DHHS gave a large regional hospital called CarolinaEast the right to be the one and only provider of ophthalmic operating room services in his region, excluding all other competitors, including himself. In those same documents, Dr. Singleton repeatedly argued that granting such an exclusive right violates Art. I., Sec. 32, of the North Carolina constitution, which categorically forbids the state from granting exclusive privileges except for public service, and Art. I, Sec. 34, which categorically forbids the state from granting monopolies under any circumstances.

When the case goes to trial, DHHS will have an opportunity to present evidence and make countervailing arguments. So far, however, it has avoided the necessity of doing either. Instead, it has repeatedly persuaded the courts to dismiss the case without a hearing under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, which makes “failure to state a claim upon which relief can be granted” grounds for dismissal.

According to DHHS, there is no need for the courts to consider Dr. Singleton’s factual evidence and legal arguments. As a form of economic regulation, the CON law is subject only to rational basis review, and the factual findings appended to the law constitute irrebuttable proof that the rational basis test has been satisfied.

The Supreme Court’s Ace Speedway opinion

As in Singleton, the plaintiff in Kinsley v. Ace Speedway claimed DHHS had violated his constitutional rights, and as in Singleton, DHHS repeatedly asked the courts to dismiss the plaintiff’s claim under Rule 12(b)(6). Unlike Singleton, however, in Ace Speedway the lower courts refused to dismiss on that basis, and the Supreme Court upheld those decisions on appeal.

The court began its analysis by explaining what it takes to “sufficiently allege” a constitutional claim in North Carolina:

[T]he complaint must allege that a state actor violated the claimant’s state constitutional rights [and] the claim must be colorable, meaning that the claim must present facts sufficient to support an alleged violation of a right protected by the State Constitution.

Then, in a passage that ought to be decisive for Singleton going forward, it added:

[A]t the motion to dismiss stage, whether a claim is “colorable” focuses entirely on the allegations in the complaint. Those allegations are “treated as true” and the Court examines whether the allegations, if proven, constitute a violation of a right protected by the North Carolina Constitution.

What Ace Speedway means for Singleton v. NC DHHS on appeal

Ace Speedway was decided in August 2024, and Singleton came before the Supreme Court on appeal a few months later. Disappointingly, instead of reaching any kind of resolution, for procedural reasons the court remanded the case for rehearing by a panel of three Wake County Superior Court judges. There was, however, a silver lining. In its remand order, the court “directed” the panel to its Ace Speedway decision.

DHHS filed a motion to dismiss and a supporting brief in which it repeated the argument summarized above. Locke filed a brief in which we cited the Ace Speedway passage quoted above and urged the panel to deny the motion on that basis. Despite the Supreme Court’s direction and our reminder, the three-judge panel decided Ace Speedway did not apply and granted the motion. Dr. Singleton appealed, and the North Carolina Court of Appeals must now decide whether to uphold the panel’s decision or reverse that decision and instruct the panel to hear the claim on the merits.

Locke has filed a brief urging the Court of Appeals to do the latter. After summarizing Dr. Singleton’s factual allegations and showing that they very clearly meet the Ace Speedway criteria, we say:

The Superior Court Panel should have recognized all of that and denied Defendants’ motion. Instead, despite having been specifically “directed” to Ace Speedway, in its Order granting the Motion to Dismiss, the Panel ignored Plaintiffs’ allegations of fact and deferred instead to the Defendants’ allegations regarding…. the findings of fact appended to the CON Law.

Our conclusion:

This court should reverse the Superior Court Panel’s decision to dismiss under Rule 12(b)(6) and instruct the court to hear Plaintiffs’ Complaint on the merits.

If our interpretation is correct, Ace Speedway means Dr. Singleton will eventually get his day in court. If the Court of Appeals reverses, that will happen quite soon. If it does not, Dr. Singleton would have to appeal to the Supreme Court and await its decision. Unless the Supreme Court renounces its Ace Speedway holding, however, the result will be the same. The case will go back to the Superior Court panel with instructions to proceed to trial.

Ensuring the plaintiff gets his day in court is not the only reason Ace Speedway matters for Singleton v. NC DHHS. It also has implications for how the case will be decided when it finally gets to trial. Those implications will be the topic of the next and final installment in this series.

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