Top NC Court Tackles Lawsuit Tied To Rockingham Co. Casino Rezoning

By Carolina Journal

North Carolina’s highest court will decide in the months ahead whether neighbors had legal standing to file suit against a 192-acre rezoning in Rockingham County. The dispute is tied to a hotly contested local debate over a casino.

Six of the seven state Supreme Court justices heard oral arguments in the case Tuesday. Justice Phil Berger Jr. did not take part. His brother Kevin is a Rockingham County commissioner.

A unanimous state Appeals Court panel ruled in July 2025 that plaintiffs in the case Camp Carefree v. Rockingham County could move forward with their lawsuit. The defendants or appellants in the case are asking the state Supreme Court to reverse that decision.

“This case is about a citizen’s right to challenge governmental action,” argued lawyer Jonathan Dunlap, representing the plaintiffs challenging the rezoning. “Since at least 1968, this court has recognized that a citizen can challenge zoning laws if they meet this minimum threshold of alleging that those laws affect their property interests.”

“The court should decline appellants’ invitation to create by judicial fiat a standard for standing that would insulate governmental entities when they pass regulations that affect private property rights,” Dunlap added.

The rezoning did not specify what type of development would take place on the property when it shifted from “residential agricultural” to “highway commercial” use. Yet the plaintiffs had just 60 days to challenge the change, Dunlap said.

“This creates a trap,” he argued. “If they don’t disclose the use within the first 60 days, and their standard applies, then we will never be able to challenge the use.”

Rockingham County and property owners who sought the rezoning argued that critics needed to show more than just a possible negative impact at some point in the future.

“There’s got to be something that is imminent or threatened,” argued lawyer Will Quick. “It doesn’t have to be that it’s going to happen tomorrow. But it’s got to be something among hundreds of potential uses.”

“Nothing before Rockingham County’s board of commissioners or before the courts can tell us what that actually is going to be at any point in the future right now,” Quick added.

Quick argued that the plaintiffs should be forced to show “special damages.” Even if the Supreme Court disagrees, the plaintiffs have not done enough to show they have legal standing to sue, he said.

“Plaintiffs must identify specific, personal, direct, adverse effect here,” he said.

The plaintiffs rejected the county’s arguments about special damages.

“To put those two together — specific personal and legal interest amounting to special damages — is like calling Rockingham County the City of Rockingham,” argued lawyer Brian Gulden. “They are separate and distinct aspects. There’s been no North Carolina Supreme Court opinion that talks about special damages.”

Five of the six justices present for the case asked questions. Most challenged the county’s arguments.

“Why would the standing rule be different in zoning than in any every other type of government action that some litigant is saying is unlawful?” asked Justice Richard Dietz.

Justice Tamara Barringer focused on lead plaintiff Camp Carefree.

“They certainly are making a strong argument that they are being affected because of their use of property for special-needs children, autistic children — that it would be detrimental to those people who are there on a regular basis to be exposed further by this property by what might come down the pike,” Barringer said.

“The problem is the directness here,” Quick responded. “There’s nothing about the rezoning itself with the map amendment that actually says any of these things will happen.”

“But doesn’t that argument essentially prevent any challenge?” responded Justice Anita Earls. “It sounds like you’re saying if we don’t have specifics about how the rezoning will result in how the land is used, then we can’t show direct impact.”

“If they don’t have the ability to challenge — at the front — the process by which the map amendment and the text amendment were done, which is what a good part of the complaint is, aren’t we essentially … blocking out what could be the only opportunity for these residents to protect their free use of their property?” asked Justice Allison Riggs.

“This is their only opportunity to bring these kinds of challenges, is that right?” added Justice Trey Allen.

“This case is about citizens’ rights to access courts to challenge governmental action,” the plaintiffs’ lawyers wrote in an October brief. “Since at least 1976, this Court has recognized a citizen’s right to challenge zoning legislation by meeting the minimal threshold of showing the legislation would affect their property rights. The inquiry typically focuses on the plaintiff’s proximity to the rezoned property.”

“Appellants, however, take the position that citizens should be subject to a heightened pleading standard in this scenario,” the brief continued. “This heightened pleading standard does not exist in legislation. Rather, Appellants request the Court to impose it by judicial fiat.”

“Specifically, Appellants argue that when a citizen challenges governmental zoning legislation under the Declaratory Judgment Act (‘DJA’), the Court should impose a ‘special damages’ standard,” the plaintiffs’ lawyers explained. “However, the legislature did not specifically include this standard in the DJA, nor in N.C.G.S. ß 160D-1401 which is applicable to challenges of legislative decisions of governing boards. Yet, the special damages standard was specifically identified by the legislature and made applicable to appeals of quasi-judicial decisions of decision-making boards.”

“Thus, to accomplish Appellants’ request, the Court must act as a legislative body and inject language into the DJA that the General Assembly decided to omit,” the brief continued. “In a government for the people by the people, the government’s accountability to its citizens is foundational.”

“The open nature of our Courts is also foundational,” the plaintiffs’ lawyers wrote. “A judicially created standard that simultaneously constrains access to the court and insulates the government from accountability to its citizens is contrary to these democratic principles.”

“Appellants also claim this case is about ‘property owners, and all others, to use their property as they wish,’” the brief continued. “Zoning legislation serves an important public purpose, but it is antithetical to the ability of ‘property owners, and all others, to use their property as they wish.’ Appellants’ position, a heightened standing requirement, makes zoning legislation easier to pass and harder to challenge. It does not make it easier for property owners to ‘use their property as they wish.’ It makes it easier for governmental entities to dictate how property owners must use their properties.”

The county’s opening brief in July emphasized a 1976 court precedent, Taylor v. Raleigh, which “discussed the standard for determining standing in a legislative zoning challenge.”

“This Court should reverse the Court of Appeals’ decision as the law in North Carolina has been consistent for a number of years since this Court’s decision in Taylor … requiring a showing of special damages to challenge a legislative zoning decision,” the county’s lawyers wrote. “Holding to the contrary would significantly increase litigation involving legislative rezoning by permitting anyone in the vicinity of the questioned property, without alleging special damages, to file a complaint under the Declaratory Judgment Act to contest any legislative rezoning decision.”

“Such a result will hamper the ability of local governments to make such zoning decisions, delay the ability to enforce such zoning decisions and impede the ability of landowners to have free use of their land,” the brief argued.

“Moreover, the Court of Appeals’ holding is contrary to the legal principle that courts give great deference to legislative rezoning decisions,” the county’s lawyers added. “If there is a legislative zoning decision to permit schools, community centers or other public use buildings, should any person resisting the change be entitled to bring suit under the DJA?”

“Permitting such suits, without showing special damages, would inevitably entangle such legislative actions in the courts because the neighboring property owners want things to stay the same, preventing the property owner’s full use of his land and burdening the courts with excessive litigation,” the brief continued.

The dispute over a 192-acre rezoning stemmed from local debate in 2023 over a proposed casino.

The high court issued a June 18 order agreeing to hear the case. Berger did not take part in that decision.

A trial judge dismissed the lawsuit from the Camp Carefree summer camp, Kalo Food bakery, and nine individual neighboring property owners in April 2024. But a unanimous three-judge state Appeals Court panel ruled in July 2025 that the case could move forward.

“Plaintiffs argue that they made sufficient allegations to establish standing to bring this action and did not need to further plead special damages,” Judge Allegra Collins wrote for the Appeals Court. “Following this Court’s recent opinion in Gardner v. Richmond Cnty. and the North Carolina Supreme Court decisions relied on and synthesized therein, we agree and reverse the trial court’s order.”

Rezoning critics filed suit in October 2023. They are asking state courts to throw out two amendments to Rockingham County’s development ordinance. One changes the affected property’s zoning from “residential agricultural” to “highway commercial.” The other added permitted uses in the county’s “highway commercial” district.

Rockingham County commissioners made the changes as debate took place in Raleigh over permitting new casinos in North Carolina.

“With the adoption of the Text Amendment, electronic gaming operations and State Licensed Uses are now allowed by right in a Highway Commercial district,” Collins explained. “Additional uses now permitted by right in a Highway Commercial district include dry cleaning facilities, crematories, fertilizer manufacturers, hotels, fairgrounds, hospitals, landfills for hazardous and industrial waste, and wastewater collection, treatment and disposal facilities.”

Camp Carefree’s managing board member raised concerns in the lawsuit about the potential impact on children with chronic illnesses who use the camp during the summer. The bakery’s owner raised traffic concerns. Individual neighbors cited issues involving potential water contamination, increased noise and light from additional traffic, potential trespassing, and other criminal activity.

“Because these amendments were ‘legislative, not quasi-judicial, Plaintiff[s] w[ere] not required to allege special damages within [their] complaint, separate and distinct from the general community,’” Collins wrote. “Accordingly, so long as Plaintiffs in this case sufficiently alleged that they were ‘affected by’ Defendant Rockingham County’s decision to rezone the Property, Plaintiffs have standing to seek a declaratory judgment to clarify their legal rights and relations.”

Rezoning “completely changed” the targeted property’s permitted uses, Collins explained.

“While the purpose of the Residential Agriculture district is the ‘preservation and conservation of rural lands throughout the county where low density is desirable in order to protect environmentally sensitive areas, agricultural areas, and viewsheds,’ the Highway Commercial district is ‘designed to protect and encourage the transitional character of the districts’ and to provide ‘areas for more intensive regional highway-oriented business, office, service and civil use.’ Furthermore, the Highway Commercial district allows for the development of industry that is not consistent with agricultural use–such as electronic gaming operations, dry-cleaning facilities, research laboratories, hotels, hospitals, multi-family apartments and condominiums, crematoriums, radio stations, and billboards,” the Appeals Court opinion continued.

Before Rockingham County’s text amendment, “the following uses were not permitted by right in Highway Commercial districts: electronic gaming operations, dry cleaning facilities, crematories, fertilizer manufacturers, hotels, fairgrounds, hospitals, landfills for hazardous and industrial waste, and wastewater collection, treatment and disposal facilities,” Collins wrote. “After the Text Amendment, all these uses are now permitted by right in Highway Commercial districts, including on the Property.”

“Additionally, there are now no development standards, temporary use restrictions, or special use permits required for these uses on the Property,” she added.

“Here Plaintiffs’ properties are either abutting or in close proximity to the rezoned Property and ‘a plaintiff’s proximity to the rezoned property is a factor our Courts have considered,’” Collins wrote. “[E]ach Plaintiff has clearly alleged how the Rezoning Legislation would directly and negatively affect them.”

Appeals Court Judges Donna Stroud and Valerie Zachary joined Collins’ decision.

North Carolina’s capital city is supporting Rockingham County’s legal arguments. A friend-of-the-court brief Raleigh filed in July did not address the Rockingham County casino debate that prompted the lawsuit. Instead Raleigh’s lawyers supported the county’s arguments that the case’s plaintiffs lacked legal standing to pursue the case.

“Raleigh is one of the fastest growing cities in the United States,” the city’s lawyers wrote. “The City is also among the country’s leaders in new construction and is adding more jobs than 99% of other metropolitan areas. Because of this explosive growth, the Raleigh City Council adopted multiple legislative zoning amendments to its Unified Development Ordinance (the ‘UDO’) to help alleviate the pressure and accommodate new residents and businesses by streamlining development processes to, inter alia, keep housing and other costs more affordable.”

“Due to the increase in residents, projects, and development options, the number of requests for approvals has increased exponentially, with thousands of decisions being made each year,” Raleigh’s lawyers added.

“In short, Raleigh is changing, and while some embrace that change, others are adamantly opposed,” the brief explained. “This has led to more zoning litigation than ever before, both by quasi-judicial appeals and civil lawsuits. These cases contest the City’s decisions to approve projects and/or UDO changes that, among other things, allow more density, building types and/or land uses.”

“The inconsistency in standing law has made defending, and even making, legislative decisions more difficult,” Raleigh’s lawyers argued. “At times, the City is informed before a legislative decision is even made that litigation will be forthcoming.”

“It is, thus, critical to the City of Raleigh, and other local governments to: 1) be able to rely on a consistent standing test that mandates some identifiable injury to nearby property owners, which should be special damages, before a plaintiff can file a lawsuit and put important land use decisions in limbo for years; and 2) have predictability when asserting a standing defense, so lower courts cannot choose between different standards depending on the facts of the case and the project being challenged,” the brief added.