Dell wins incentives lawsuit

A judge says a suit against lures offered to some companies is a political case, not a law case
David Ranii, Staff Writer

A lawsuit aimed at stopping state and local governments from using financial incentives to woo employers has been thrown out of court.

Judge Robert Hobgood of Wake County Superior Court dismissed a legal challenge to the $279 million in incentives offered to Dell to build a computer plant in Winston-Salem. Hobgood delivered his ruling from the bench Wednesday morning.

The judge rejected the arguments of the N.C. Institute for Constitutional Law, an advocacy group for limited government, which contends that such perks violate provisions in the state and federal constitutions.

"What he said is that these are basically political questions that are to be passed on by the legislature, which is what we have been arguing," said Burley Mitchell, an attorney who represented Dell. "This is a political case, not a law case."

In 2004, Texas-based Dell was offered $279 million in state and local incentives to select Winston-Salem as the site of a new computer plant. That plant opened in October. The computer maker must meet certain goals, including job and investment targets, to receive all the benefits of the incentive packages.

The Institute for Constitutional Law argued that incentives are discriminatory because they go to select companies. They also maintained that the tax credits received by Dell wrongly shifted more of the tax burden to individual taxpayers. The lawsuit was brought on behalf of seven individuals.

"Certainly, after the enormous amount of work and research that have gone into preparing the case … we are disappointed with the ruling," said Bob Orr, the institute’s executive director and a former justice on the N.C. Supreme Court. (more…)