In Ashby v. Town of Cary, No., COA 03-203 (December 2, 2003), the Ashbys, the plaintiffs, owned a one acre lot on Walnut Street, outside Cary’s jurisdiction. The plaintiffs wanted to build a new furniture store on the lot but needed additional land. The Town owned less than one acre, which abutted their property, and the Town and the plaintiffs negotiated a deal whereby the plaintiffs acquired the Town’s lot and the Town obtained frontage from the plaintiffs to widen Walnut Street.

The plaintiffs requested annexation of two tracts of land totaling 1.99 acres in the "Walnut Street Corridor." Surrounding the property were two major retail malls, a variety of commercial and retail developments, a movie theater, two auto dealerships, several office complexes and a multi-family residential complex. Despite being surrounded by property zoned for commercial uses, the plaintiffs’ tracts were zoned Residential 30, which provides for low-density residential uses. In order to pursue building the furniture store, they requested a rezoning to Business-2 Commercial (B-2) Conditional Use district and also submitted an application for a conditional use permit.

At the same time that the plaintiffs submitted their applications, the Town began reconsidering the Southeast Gateway Area Plan, including reviewing land uses in the Walnut Street corridor. The plaintiffs went before the Town Council the same day as the new plan for the Walnut Street corridor was being considered. During the discussion of the new plan, the Council particularly discussed whether the Walnut Street area could accommodate additional retail and commercial uses or should, instead, be zoned for office and institutional uses that would reduce traffic congestion. The Council voted to deny the plaintiffs’ application, expressing concern for the weekend traffic congestion.

The plaintiffs filed a declaratory judgment action challenging the Town’s denial of their rezoning application. The trial court granted summary judgment to the Town and the plaintiffs appealed, arguing that there were genuine issues of material fact as to whether the Town’s decision was arbitrary and capricious. They contend that it was because (1) the Town had entered the land-exchange transaction knowing that the plaintiffs wished to acquire the land to develop a furniture store, (2) the furniture store would generate low traffic, (3) the rezoning request complied with the Southeast Gateway Plan, which was in effect at the time of the request, (4) the Planning Board recommended the rezoning by a unanimous vote, and (5) the Town approved a similar rezoning request by an auto dealership that same day.

On appeal, the Court of Appeals upheld the trial court’s grant of summary judgment for the Town. It is well-established that legislative rezonings are judged by an arbitrary and capricious standard and, therefore, are difficult to overturn.

However, in this case, in discussing the stringent standard by which legislative acts are reviewed, the Court of Appeals held that in reviewing a legislative rezoning, a court’s review is limited to the record that was before the governing body. It quoted Graham v. Raleigh, 55 N.C. App. 107, explaining that the decision "will be deemed arbitrary and capricious if ‘the record demonstrates that it had no foundation in reason and bears no substantial relation to public health, the public morals, the public safety or the public welfare in its proper sense.’" The plaintiffs had sought to introduce evidence in the trial court, including affidavits from a zoning expert and a traffic engineer, and the Court held that consideration of such evidence would have been improper.

This decision, based primarily from a quote from a previous case, stating that any information outside the record cannot be considered in a challenge to a legislative rezoning, raises questions. For example, if a plaintiff alleged that government officials had been paid to vote against a certain project, it would seem that the plaintiff could introduce evidence of such, which would be outside the record. In fact any allegations that legislative acts were unlawful because they were undertaken for improper motives or violated due process or equal protection would likely require the presentation of evidence outside of the record. What the Graham court and this court, relying on that decision, would do in such a circumstance is not resolved by the case.