IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA25-929
Filed 17 June 2026
Union County, No. 24CV004617-890
RICHARD D. LEMASTER, JR., Petitioner,
v.
N.C. DEPARTMENT OF STATE TREASURER, RETIREMENT SYSTEMS DIVISION, Respondent.
Appeal by petitioner from order entered 28 May 2025 by Judge Jonathan W.
Perry in Union County Superior Court. Heard in the Court of Appeals 22 April 2026.
Schiller & Schiller, PLLC, by David G. Schiller, for petitioner-appellant.
Attorney General Jeff Jackson, by Assistant Attorney General Natalia Isenberg, for respondent-appellee.
ZACHARY, Judge.
Petitioner Richard D. Lemaster, Jr., appeals from a superior court order
affirming the final decision of an administrative law judge (“ALJ”) of the Office of
Administrative Hearings (“the OAH”), which dismissed Petitioner’s petition for lack
of subject-matter jurisdiction. After careful review, we affirm the decision of the
superior court.
I. Background
This case arises from the Final Agency Decision of Respondent North Carolina
Department of State Treasurer, Retirement Systems Division, not to permit
Petitioner to repurchase 7.3 years of creditable service in the public-employee pension LEMASTER V. N.C. DEP’T OF STATE TREASURER
Opinion of the Court
system under the now-repealed repurchase formula that existed when he vested in
the system, rather than the repurchase formula in effect when he requested a
repurchase calculation in 2023.
Petitioner commenced his teaching career in 1996, at which point he became a
member of the Teachers’ and State Employees’ Retirement System (“TSERS”). When
he left his teaching position, he withdrew 7.3 years of TSERS retirement service
credit.1 Petitioner then “returned to teaching in 2011, and became a TSERS member
again.”
In 2018, Petitioner “contacted [TSERS] and discussed repurchasing the 7.3
years of service with a [TSERS] employee,” who “advised [him] that most employees
wait until they are about to retire to exercise their rights to repurchase years of
service, and that the repurchase amount would increase at the rate of 6.5% per year.”
Petitioner elected not to repurchase his years of creditable service at that time,
reasoning that “reasonable investment practices would yield better results.” In 2018,
the Chief of Retirement Processing provided Petitioner with a calculation that the
repurchase cost of 7.3 years of creditable service would be $33,790.66; in 2019, he
calculated that the repurchase cost would be $36,012.05.
1 A withdrawal of retirement service credit from TSERS entitles the withdrawing individual
to a refund of the associated retirement contributions, and ends the individual’s membership in TSERS upon receipt of the refund.
-2- LEMASTER V. N.C. DEP’T OF STATE TREASURER
By law passed in June 2021 (and effective on 1 July 2022), the North Carolina
General Assembly repealed N.C. Gen. Stat. § 135-4(k), under which Petitioner’s
repurchase cost had been calculated. N.C. Gen. Stat. § 135-4(k1)2 took effect in 2022,
which changed the manner in which the repurchase cost was calculated and provided
that no more than five years of service could be repurchased. An Act of 28 June 2021,
S.L. 2021-57, § 1.4(a), 2021 N.C. Sess. Law 181.
In 2023, Petitioner requested another repurchase calculation and was
informed that he could repurchase a maximum of five years of creditable service at a
cost of $51,660.83. Petitioner requested that Respondent review this decision; on 11
June 2024, Respondent confirmed in a Final Agency Decision that Petitioner could
repurchase no more than five years of creditable service at a cost of $51,660.83.
On 6 August 2024, Petitioner filed a contested-case petition with the OAH,
appealing from the Final Agency Decision. Petitioner sought to proceed as a class
action and raised claims for relief under several theories, including failure to apply
applicable law, breach of contract, unconstitutional impairment of contract, violation
of due process, deprivation of equal protection, and declaratory judgment. On 6
September 2024, Respondent filed motions to dismiss and to stay; the motion to
dismiss came on for hearing on 8 October 2024. In an order entered on 9 October
2 Since this amendment, the North Carolina General Assembly has recodified N.C. Gen. Stat.
§ 135-4(k1). An Act of 20 June 2024, S.L. 2024-10, § 2(b), 2024 N.C. Sess. Law 94.
-3- LEMASTER V. N.C. DEP’T OF STATE TREASURER
2024, the ALJ concluded that the OAH lacked subject-matter jurisdiction over
Petitioner’s claims and dismissed the petition without prejudice.
Petitioner appealed the ALJ’s order to superior court on 7 November 2024. The
superior court heard Petitioner’s appeal on 18 March 2025, and in an order entered
on 28 May 2025, the superior court affirmed the final decision of the ALJ, concluding
that “the ALJ properly concluded as a matter of law that [the] OAH lacks subject[-
]matter jurisdiction over all of Petitioner’s claims in this contested case.”
Petitioner filed timely notice of appeal from the superior court’s order.
II. Discussion
Petitioner raises one issue on appeal: whether “the superior court erred in
affirming the final decision of the ALJ because the final decision contained errors of
law.” Because Petitioner limits his challenge to the first claim advanced in his initial
petition—failure to apply the applicable law, our review shall be similarly limited.
See N.C.R. App. P. 28(a) (“Issues not presented and discussed in a party’s brief are
deemed abandoned.”). After careful review, we conclude that the OAH lacked subject-
matter jurisdiction over Petitioner’s first claim and thus affirm the superior court’s
order.
A. Standard of Review
The issue before us—regarding subject-matter jurisdiction—is a question of
law. See Tillett v. Town of Kill Devil Hills, 257 N.C. App. 223, 224, 809 S.E.2d 145,
147 (2017). “It is well settled that in cases appealed from administrative tribunals,
-4- LEMASTER V. N.C. DEP’T OF STATE TREASURER
questions of law receive de novo review . . . . Under the de novo standard of review,
the [superior] court considers the matter anew and freely substitutes its own
judgment for the agency’s.” Harris v. N.C. Dep’t of Pub. Safety, 252 N.C. App. 94, 99–
100, 798 S.E.2d 127, 132 (extraneity removed), aff’d, 370 N.C. 386, 808 S.E.2d 142
(2017). “This Court’s scope of review is the same as that employed by the [superior]
court.” Overcash v. N.C. Dep’t of Env’t & Natural Res., 179 N.C. App. 697, 702, 635
S.E.2d 442, 446 (2006), disc. review denied, 361 N.C. 220, 642 S.E.2d 445 (2007).
B. Subject-Matter Jurisdiction of the OAH
As our Supreme Court has explained, like all administrative agencies, the
OAH “is a creature of the statute creating it and has only those powers expressly
granted to it or those powers included by necessary implication from the legislative
grant of authority.” N.C. Dep’t of Revenue v. Philip Morris USA, Inc., 388 N.C. 181,
190, 919 S.E.2d 175, 181–82 (2025) (citation omitted). Thus, “the OAH has no
jurisdiction . . .
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IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA25-929
Filed 17 June 2026
Union County, No. 24CV004617-890
RICHARD D. LEMASTER, JR., Petitioner,
v.
N.C. DEPARTMENT OF STATE TREASURER, RETIREMENT SYSTEMS DIVISION, Respondent.
Appeal by petitioner from order entered 28 May 2025 by Judge Jonathan W.
Perry in Union County Superior Court. Heard in the Court of Appeals 22 April 2026.
Schiller & Schiller, PLLC, by David G. Schiller, for petitioner-appellant.
Attorney General Jeff Jackson, by Assistant Attorney General Natalia Isenberg, for respondent-appellee.
ZACHARY, Judge.
Petitioner Richard D. Lemaster, Jr., appeals from a superior court order
affirming the final decision of an administrative law judge (“ALJ”) of the Office of
Administrative Hearings (“the OAH”), which dismissed Petitioner’s petition for lack
of subject-matter jurisdiction. After careful review, we affirm the decision of the
superior court.
I. Background
This case arises from the Final Agency Decision of Respondent North Carolina
Department of State Treasurer, Retirement Systems Division, not to permit
Petitioner to repurchase 7.3 years of creditable service in the public-employee pension LEMASTER V. N.C. DEP’T OF STATE TREASURER
Opinion of the Court
system under the now-repealed repurchase formula that existed when he vested in
the system, rather than the repurchase formula in effect when he requested a
repurchase calculation in 2023.
Petitioner commenced his teaching career in 1996, at which point he became a
member of the Teachers’ and State Employees’ Retirement System (“TSERS”). When
he left his teaching position, he withdrew 7.3 years of TSERS retirement service
credit.1 Petitioner then “returned to teaching in 2011, and became a TSERS member
again.”
In 2018, Petitioner “contacted [TSERS] and discussed repurchasing the 7.3
years of service with a [TSERS] employee,” who “advised [him] that most employees
wait until they are about to retire to exercise their rights to repurchase years of
service, and that the repurchase amount would increase at the rate of 6.5% per year.”
Petitioner elected not to repurchase his years of creditable service at that time,
reasoning that “reasonable investment practices would yield better results.” In 2018,
the Chief of Retirement Processing provided Petitioner with a calculation that the
repurchase cost of 7.3 years of creditable service would be $33,790.66; in 2019, he
calculated that the repurchase cost would be $36,012.05.
1 A withdrawal of retirement service credit from TSERS entitles the withdrawing individual
to a refund of the associated retirement contributions, and ends the individual’s membership in TSERS upon receipt of the refund.
-2- LEMASTER V. N.C. DEP’T OF STATE TREASURER
By law passed in June 2021 (and effective on 1 July 2022), the North Carolina
General Assembly repealed N.C. Gen. Stat. § 135-4(k), under which Petitioner’s
repurchase cost had been calculated. N.C. Gen. Stat. § 135-4(k1)2 took effect in 2022,
which changed the manner in which the repurchase cost was calculated and provided
that no more than five years of service could be repurchased. An Act of 28 June 2021,
S.L. 2021-57, § 1.4(a), 2021 N.C. Sess. Law 181.
In 2023, Petitioner requested another repurchase calculation and was
informed that he could repurchase a maximum of five years of creditable service at a
cost of $51,660.83. Petitioner requested that Respondent review this decision; on 11
June 2024, Respondent confirmed in a Final Agency Decision that Petitioner could
repurchase no more than five years of creditable service at a cost of $51,660.83.
On 6 August 2024, Petitioner filed a contested-case petition with the OAH,
appealing from the Final Agency Decision. Petitioner sought to proceed as a class
action and raised claims for relief under several theories, including failure to apply
applicable law, breach of contract, unconstitutional impairment of contract, violation
of due process, deprivation of equal protection, and declaratory judgment. On 6
September 2024, Respondent filed motions to dismiss and to stay; the motion to
dismiss came on for hearing on 8 October 2024. In an order entered on 9 October
2 Since this amendment, the North Carolina General Assembly has recodified N.C. Gen. Stat.
§ 135-4(k1). An Act of 20 June 2024, S.L. 2024-10, § 2(b), 2024 N.C. Sess. Law 94.
-3- LEMASTER V. N.C. DEP’T OF STATE TREASURER
2024, the ALJ concluded that the OAH lacked subject-matter jurisdiction over
Petitioner’s claims and dismissed the petition without prejudice.
Petitioner appealed the ALJ’s order to superior court on 7 November 2024. The
superior court heard Petitioner’s appeal on 18 March 2025, and in an order entered
on 28 May 2025, the superior court affirmed the final decision of the ALJ, concluding
that “the ALJ properly concluded as a matter of law that [the] OAH lacks subject[-
]matter jurisdiction over all of Petitioner’s claims in this contested case.”
Petitioner filed timely notice of appeal from the superior court’s order.
II. Discussion
Petitioner raises one issue on appeal: whether “the superior court erred in
affirming the final decision of the ALJ because the final decision contained errors of
law.” Because Petitioner limits his challenge to the first claim advanced in his initial
petition—failure to apply the applicable law, our review shall be similarly limited.
See N.C.R. App. P. 28(a) (“Issues not presented and discussed in a party’s brief are
deemed abandoned.”). After careful review, we conclude that the OAH lacked subject-
matter jurisdiction over Petitioner’s first claim and thus affirm the superior court’s
order.
A. Standard of Review
The issue before us—regarding subject-matter jurisdiction—is a question of
law. See Tillett v. Town of Kill Devil Hills, 257 N.C. App. 223, 224, 809 S.E.2d 145,
147 (2017). “It is well settled that in cases appealed from administrative tribunals,
-4- LEMASTER V. N.C. DEP’T OF STATE TREASURER
questions of law receive de novo review . . . . Under the de novo standard of review,
the [superior] court considers the matter anew and freely substitutes its own
judgment for the agency’s.” Harris v. N.C. Dep’t of Pub. Safety, 252 N.C. App. 94, 99–
100, 798 S.E.2d 127, 132 (extraneity removed), aff’d, 370 N.C. 386, 808 S.E.2d 142
(2017). “This Court’s scope of review is the same as that employed by the [superior]
court.” Overcash v. N.C. Dep’t of Env’t & Natural Res., 179 N.C. App. 697, 702, 635
S.E.2d 442, 446 (2006), disc. review denied, 361 N.C. 220, 642 S.E.2d 445 (2007).
B. Subject-Matter Jurisdiction of the OAH
As our Supreme Court has explained, like all administrative agencies, the
OAH “is a creature of the statute creating it and has only those powers expressly
granted to it or those powers included by necessary implication from the legislative
grant of authority.” N.C. Dep’t of Revenue v. Philip Morris USA, Inc., 388 N.C. 181,
190, 919 S.E.2d 175, 181–82 (2025) (citation omitted). Thus, “the OAH has no
jurisdiction . . . except insofar as the legislature has positively conferred such
jurisdiction.” Id. at 190, 919 S.E.2d at 182.
Under N.C. Gen. Stat. § 150B-23(a) (2025), the jurisdiction of the OAH is
expressly limited. Relevant here, the OAH has jurisdiction to hear matters where it
is alleged that an agency “[a]cted erroneously” or “[f]ailed to act as required by law or
rule.” N.C. Gen. Stat. § 150B-23(a)(2), (5).
Petitioner claims that he “has vested contractual rights to the repurchase
formula contained in” the version of N.C. Gen. Stat. § 135-4(k) in effect when his
-5- LEMASTER V. N.C. DEP’T OF STATE TREASURER
pension rights vested. In support of this proposition, Petitioner cites Faulkenbury v.
Teachers’ & State Employees’ Retirement System of North Carolina, 345 N.C. 683, 483
S.E.2d 422 (1997). He contends that N.C. Gen. Stat. § 150B-23(a)(2) and (5) provide
the OAH with jurisdiction to “determin[e] that a state agency must act in accordance
with the rulings of the Supreme Court of North Carolin[a].”
In Faulkenbury, the primary issue before our Supreme Court was “whether a
change in the law, which reduced [the] plaintiffs’ disability retirement payments,
violate[d] Article I, Section 10 of the Constitution of the United States.” 345 N.C. at
690, 483 S.E.2d at 426. In the instant case, if the OAH were to consider Petitioner’s
claim, it would be similarly tasked with determining whether the repeal of N.C. Gen.
Stat. § 135-4(k) unconstitutionally “ ‘impair[s] the obligations of contracts’ ”—that is,
whether the statute’s repeal unconstitutionally impairs Petitioner’s vested
contractual rights as concerns the repurchase of his years of creditable service. Id. at
690, 483 S.E.2d at 427 (quoting U.S. Const. art. I, § 10). However, the OAH is not
authorized to consider this issue.
Numerous decisions of our Supreme Court have emphasized that “[t]he
question of constitutionality of a statute is for the judicial branch.” Great Am. Ins. Co.
v. Gold, 254 N.C. 168, 173, 118 S.E.2d 792, 796 (1961), overruled on other grounds by
Smith v. State, 289 N.C. 303, 222 S.E.2d 412 (1976); see also Meads v. N.C. Dep’t of
Agric., 349 N.C. 656, 670, 509 S.E.2d 165, 174 (1998) (“[I]t is the province of the
judiciary to make constitutional determinations.”). The OAH has no authority to
-6- LEMASTER V. N.C. DEP’T OF STATE TREASURER
adjudicate constitutional challenges to statutes, the power of judicial review being
reserved to the judicial branch. We therefore conclude that the superior court did not
err in affirming the OAH’s final decision dismissing Petitioner’s petition for lack of
subject-matter jurisdiction.
III. Conclusion
For the foregoing reasons, we affirm the order of the superior court affirming
the final decision of the OAH dismissing Petitioner’s petition without prejudice for
lack of subject-matter jurisdiction.
AFFIRMED.
Judges GRIFFIN and FREEMAN concur.
-7-