Arkansas State Police Retirement System v. Sligh
2017 Ark. 109
| Ark. | 2017Background
- Appellees (a class of 51 Arkansas State Police officers who participated in the DROP) sued ASPRS and its Board of Trustees (in their official capacities) after the Trustees, pursuant to Act 404 of 2007, reduced the DROP interest rate and the Trustees voted to set a lower rate effective July 1, 2009.
- Plaintiffs alleged the reduction impaired contractual rights (Ark. Const. art. 2 § 17 and U.S. Const. art. I § 10), deprived them of a vested property interest without due process, and breached fiduciary duties; relief sought included damages, equitable relief (correction of DROP accounts), mandamus/injunctive relief, and attorney’s fees under 42 U.S.C. §§ 1983, 1988.
- Defendants asserted sovereign immunity under Ark. Const. art. 5 § 20, argued ASPRS and Trustees are not "persons" under § 1983, and alternatively argued plaintiffs’ claims failed on the merits (statute of limitations, no protected contractual or property interest, board action authorized by statute, and no recoverable "error" under Ark. Code § 24-6-205).
- The circuit court granted summary judgment to plaintiffs on liability and damages, finding the DROP funds belong to officers (not the State) and that retroactive application of Act 404 impaired vested contractual rights; it awarded damages (≈ $2.52M including prejudgment interest) but denied attorney’s fees as barred by sovereign immunity.
- On appeal, the Arkansas Supreme Court reviewed de novo, held ASPRS and Trustees are arms of the State and that the challenged relief would implicate the state treasury, and reversed and dismissed the complaint on sovereign-immunity grounds; it affirmed denial of attorney’s fees and denied plaintiffs’ motion to strike parts of defendant’s reply brief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of sovereign immunity | DROP funds are trust funds owned by officers, so suit does not subject State treasury to liability; immunity should not bar suit | ASPRS and Trustees are state agencies/arms of the State; judgment would control State action or subject State to liability; sovereign immunity bars suit | Reversed: sovereign immunity applies; suit dismissed because relief would implicate the state treasury and no exception applies |
| Exception for illegal/unconstitutional acts (allowing suit) | Trustees acted unconstitutionally/arbitrarily in reducing interest; exception for unconstitutional state action should permit damages or relief | Exception only permits injunctive/ultra vires relief against agencies, not money damages; no waiver for damages | Held: exception does not authorize damages against the State; does not overcome sovereign immunity |
| Waiver under Ark. Code § 24-6-205 (errors in records) | § 24-6-205 waives immunity where changes/errors caused incorrect payments and permits correction/recovery | Weiss (distinguishable): § 24-6-205 applies to record errors, not intentional statutory changes; 2011 § 24-6-103 later clarified no waiver of sovereign immunity | Held: § 24-6-205 does not waive immunity for deliberate statutory changes; no waiver applies |
| Entitlement to attorney's fees | Plaintiffs sought fees under §§ 1983/1988 for constitutional violations | State contended sovereign immunity bars fees; trial court denied fees on that basis | Affirmed: attorney’s-fee claim barred by sovereign immunity |
Key Cases Cited
- Abraham v. Beck, 2015 Ark. 80, 456 S.W.3d 744 (summary-judgment review; parties’ cross-motions)
- Kelley v. Johnson, 2016 Ark. 266, 496 S.W.3d 346 (sovereign-immunity framework; whether judgment would control State action)
- Bd. of Trs. of Univ. of Ark. v. Burcham, 2014 Ark. 61 (suit against board = suit against State; limits on immunity exceptions)
- Weiss v. McLemore, 371 Ark. 538, 268 S.W.3d 97 (Ark. Code § 24-6-205 can imply waiver where there are record errors in retirement calculations)
- Short v. Westark Cmty. Coll., 347 Ark. 497, 65 S.W.3d 440 (agency funds from varied sources still implicate State treasury; immunity analysis)
- Ark. Tech Univ. v. Link, 341 Ark. 495, 17 S.W.3d 809 (official-capacity suit = suit against State; limitations on remedies)
- Ark. Lottery Comm’n v. Alpha Mktg., 2013 Ark. 232, 428 S.W.3d 415 (exceptions to immunity do not authorize damage claims against the State)
- Jones v. Cheney, 253 Ark. 926, 489 S.W.2d 785 (contract-impairment discussion cited by parties)
- Pyle v. Webb, 253 Ark. 940, 489 S.W.2d 796 (contract-impairment discussion cited by parties)