Lawmakers express concerns on high court’s sovereign immunity ruling

A legislative subcommittee heard varying opinions Tuesday (Jan. 30) on how a recent ruling by the Arkansas Supreme Court may impact so-called sovereign immunity cases, which has raised fears in the state’s legal community that any lawsuit brought against the state could be thrown out by the courts.

Rep. Bob Ballinger, R-Hindsville, co-chair of the Litigation Reports Oversight Subcommittee of the Arkansas Legislative Council, told fellow lawmakers at the hearing that a Jan. 18 ruling by the Arkansas Supreme Court could have the biggest impact on state law since the 1994 Lake View ruling, which overhauled the way Arkansas public schools are funded.

“It may be bigger than that,” Ballinger said of the Lake View ruling, which held the funding system for the public schools violated the state’s constitution and the U.S. Constitution because it was “inequitable and inadequate.” The Hindsville Republican added that he would support a new ballot initiative to address concerns regarding sovereign immunity cases against the state.

“You know, I don’t think it is insurmountable. I think there is definitely a lot we can do legislatively between now and when the state Constitution is amended. I do think a constitutional amendment is warranted, but I think at least bringing this to the attention of this legislative body is appropriate.”

After Ballinger’s opening statement, several attorneys appearing before the legislative panel offered different takes on the possible broad implications of a precedent-setting 5-2 ruling by the state high court nearly two weeks ago.

‘NEVER A DEFENDANT’
In the case, known as Board of Trustees of the University of Arkansas v. Matthew Andrews, a bookstore manager at publicly-funded Rich Mountain Community College (RMCC) in Mena filed a complaint that the local college failed to compensate him for overtime pay under the state Minimum Wage Act.

RMCC, which became a part of the University of Arkansas system nearly a year ago, pleaded sovereign immunity as an affirmative defense, pursuant to Article 5, Section 20 of the Arkansas Constitution, which states that “the State of Arkansas shall never be made a defendant in any of her courts.”

In the high court’s most recent ruling, Chief Justice Dan Kemp wrote that that the General Assembly cannot allow for lawsuits against the State. In his ruling, Kemp cited the 60 years of precedent consistent with that holding and, quite simply, pointed out that “shall never be made a defendant in her courts” means just that. As a result, the lawsuit brought by Andrews against RMCC for violation of the Arkansas Minimum Wage Act was dismissed.

Justice Karen Baker, joined by Justice Josephine Hart, disagreed and filed a dissenting opinion. Justice Baker provided several reasons for her belief the majority ruling is wrong, but she also pointed out some of the implications of the holding. She said the validity of lawsuits involving land-condemnation, the Freedom of Information Act, dependency neglect cases against DHS, illegal-exaction cases, and the monumental Lake View decision would no longer be possible.

At Tuesday’s hearing before the legislative subcommittee, Matthew Miller, assistant director of the Bureau of Legislative Research’s legal division, provided a 41-page presentation and overview of the Andrews’ case and historical perspective on the state’s sovereign immunity laws, going back to 1874.

“I am taking on a tricky task here … because I am trying to provide clarity on something that is not clear,” Miller said.

During his presentation, Miller told the legislative panel that Arkansas, Alabama and West Virginia were the three states across the U.S. with clearly defined sovereign immunity statutes. The legislative aide explained the Andrews case not only consolidates five previous rulings by the Arkansas Supreme Court on sovereign immunity, but also allows for limited exceptions in certain situations.

BALLOT ISSUE AIMED FOR 2018
Alex Gray, a local attorney heading the Committee to Restore Arkansans’ Rights, told the legislative panel he is pushing for a ballot issue to clarify language to the state constitution to grant authority to the Legislature to allow lawsuits against the state.

He agreed with Miller there are concerns in the legal community about the high court’s ruling, noting he has requested Arkansas Attorney General Leslie Rutledge to approve a proposed constitutional amendment for signature gathering to put on the 2018 ballot.

“There has been discussion about how Article 5, Section 20 is 14 words. (Our) constitutional amendment proposal would add six words to make it a 20-word section,” said Gray, an attorney affiliated with law firm of State Sen. Jeremy Hutchinson, R-Little Rock. “The constitutional amendment would simply authorize the General Assembly to waive state’s sovereign immunity.

Gray continued: “It would revive all the laws that are currently on the books that everyone has been complying with and acting as the law of the land for the last 20-plus years and just kind of avoids some of the confusion and potential (problems) that Andrews has caused.”

Lee Rudofsky, solicitor general for Attorney General Leslie Rutledge, also appeared before the panel but could not testify directly about the Andrews case because of the ballot proposal and the AG’s role in the Andrews case as a “friend of the court.”

However, Rudofsky did say he believes the Supreme Court ruling in the Andrews case does not address the issue of sovereign immunity because the lawsuit is seeking monetary relief. The solicitor general, who serves as chief litigator for the attorney general’s office, said the ruling also seeks a practical way to allow lawsuits against the state but only for injunctive relief.

“I think what the Court would say is that they are not granting immunity, (but) they’re interpreting the lawsuit to not be a suit against the state – which means the question of sovereign immunity is inapplicable completely,” he said. “As a practical matter …, it is the judges who get to decide.”

In addition to Miller and Rudofsky, University of Arkansas attorneys JoAnn Maxey and David Curran also briefly testified before the panel concerning the Andrews case. Curran, who argued the case for the university’s board of trustees before the Supreme Court, agreed with Rudofsky that the Jan. 18 ruling did not allow for monetary relief.

“We definitely were very careful in our briefing to acknowledge this time-honored tradition of allowing official capacity lawsuits for injunctive relief against state officials,” Curran said. “These cases were all at the exact same time in an era when it came to damages lawsuits, the Courts said the state just can’t not be made a defendant in monetary (lawsuits), and it needs to go outside the court system.”

Kathryn Irby, director of the Arkansas State Claims Commission, told the legislative panel that her agency handles most of the monetary claims made against state agencies by Arkansas citizens or businesses. If the high court’s decision results in FOIA, illegal exaction and other monetary claims being moved to the Claims Commission, she said, the agency’s caseload would grow substantially.

Today, the Claims Commission has five full-time and five part-time commissioners who decide cases submitted by the legislature. Irby said that the number of cases the Commission is expected to hear and decide will reach an all-time high of 1,100 cases in fiscal 2018.

Ballinger said if the outcome of the Andrews case is still unsure by the next regular session in 2019, the legislature should consider increasing the agency’s current $1.75 million budget.