ARKANSAS STATE POLICE RETIREMENT SYSTEM аnd Kirk Bradshaw, John W. Allison, Brant Tosh, Blake Wilson, Donnie Underwood, Joe Miles, and Dr. John Shelnutt, in their official capacities as members of the Board of Trustees of the Arkansas State Police Retirement System, Appellants v. Glenn SLIGH, Myron Hall, Ricky Briggs, Loyd Franklin, Mack Thompson, Cleve Barfield, and others similarly situated, Appellees
No. CV-16-304
Supreme Court of Arkansas.
March 30, 2017
Rehearing Denied May 4, 2017
2017 Ark. 109 | 516 S.W.3d 241
C. Burt Newell, Hot Springs, for appellees.
COURTNEY HUDSON GOODSON, Associate Justice
On January 19, 2012, appellees filed a class-action complaint against ASPRS and its Trustees, in their official capacities only, on behalf of certain members of the Arkansas State Police Retirement System Deferred Option Plan (“DROP“).1 An amended complaint was filed on April 20, 2012, and a second amended complaint was filed on June 6, 2013. Appellees alleged that the class, which was composed of Arkansas State Police Officеrs, had elected to retire into the DROP in reliance on legislation currently in place at the time of their election that had established a minimum rate of return on their DROP retirement accounts. The statutory provision at issue,
Appellees alleged that Act 404 of 2007 was unconstitutional as applied to those officers who had elected to enter the DROP prior to March 22, 2007, because it impaired their contractual rights under article 2, § 17 of the Arkansas Constitution and
Appellants filed an answer to the complaint and denied appellees’ claims. Appellants also affirmatively asserted that the claims were barred by the doctrine of sovereign immunity, that the complaint failed to state facts upon which relief could be granted, that appellees had failed to exhaust their administrative remedies, and that the claims were barred by the statute of limitations and by laches.2
On August 11, 2014, aрpellees filed a motion for summary judgment, arguing that there were no material facts in dispute and that they were entitled to judgment as a matter of law. Appellees contended that appellants were not entitled to sovereign immunity because (1) the interest payments in the DROP come from the ASPRS trust fund, not from the state general treasury; (2) the State has waived sovereign immunity in the event of errors in retirement calculations pursuant to
On October 6, 2014, appellants filed a response to appellees’ motion as well as a cross-motion for summary judgment. Appellants agreed that there remained no genuine issues of material fact in dispute but argued that appellees’ claims against them were barred by sovereign immunity and that appellees had also failed to state a claim pursuant to
Following a response to the cross-motion filed by appellees and a reply filed by appellants, the circuit court entered an order on May 27, 2015, granting appellees’ motion for summary judgment on all claims and denying appellants’ cross-motion. With respect to sovereign immunity, the circuit court specifically found that “the interest money they seek is not a general financial obligation that would cause the legislature to appropriate funds from the state Treasury. All funds at issue are derived from mеmber contributions and belong to the officers, not to the State.” The circuit court further stated that “retroactive application of Act 404 of 2007 would impair and disturb contractual vested rights of the officers regarding the interest rate on their DROP contributions.”
Appellees then filed a motion for summary judgment on the issue of damages, requesting that the circuit court order that each of the fifty-one class members should be paid the difference between “the erroneous distribution” and what they should have received based on the interest rates set out in the statute prior to the 2007 amendment. Appellees also argued that they were entitled to costs, attorney‘s fees, and prejudgment interest. Attached to appellees’ motion were exhibits setting forth the amounts allegedly owed to each class member. Appellees subsequently amended their motion to correct certain errors contained in these exhibits.
There were two hearings on appellees’ motion for summary judgment оn damages, and the circuit court entered an order on December 23, 2015, granting summary judgment to appellees. The court awarded damages to each class member consistent with the exhibits that had been provided and eventually agreed upon by the parties. The court also found that appellees were entitled to prejudgment interest at the rate of 6% per annum from the date of each officer‘s final DROP payment through December 10, 2015.3 However, the
In their first point on appeal, appellants argue that the circuit court erred by denying their motion for summary judgment and granting summary judgment to appellees because both ASPRS and its Trustees were immune from suit pursuant to article 5, § 20 of the Arkansas Constitution. Appellants contend that there were no applicable exceptions to the doctrine of sovereign immunity under the circumstances in this case.
Ordinarily, on appeal from a summary-judgment disposition, we view the evidence in the light most favorable to the party resisting the motion, and any doubts and inferences are resolved against the moving party. Abraham v. Beck, 2015 Ark. 80, 456 S.W.3d 744. However, where the parties agree on the facts, we simply determine whether the aрpellees were entitled to judgment as a matter of law. Id. When parties file cross-motions for summary judgment, as in this case, they essentially agree that there are no material facts remaining and that summary judgment is an appropriate means of resolving the case. Id. As to issues of law presented, our review is de novo. Id.
Sovereign immunity is jurisdictional immunity from suit. Kelley v. Johnson, 2016 Ark. 268, 496 S.W.3d 346. This defense arises from article 5, § 20 of our state constitution, which provides that “[t]he State of Arkansas shall never be made a defendant in any of her courts.” We have extended the doctrine to include state agencies, and we have also held that a suit against the board of trustees of a state university is a suit against the State. Bd. of Trs. of Univ. of Ark. v. Burcham, 2014 Ark. 61, 2014 WL 585981. In determining whether the doctrine of sovereign immunity applies, this court must decide whether a judgment for the plaintiff will operate to control the action of the State or subject it to liability. Kelley, supra. If so, the suit is one against the State and is barred unless an exception to sovereign immunity applies. Id.; Burcham, supra.
We have recognized three ways in which a claim of sovereign immunity may be surmounted: (1) where the State is the moving party seeking specific relief; (2) where an act of the legislature has created a specific waiver of sovereign immunity; and (3) where the state agency is acting illegally, unconstitutionally, or a state-agency officer refuses to do a purely ministerial action required by statute. Kelley, supra. Furthermore, a state agency may be enjoined if it can be shown that a pending action of the agency is ultra vires or without authority of the agency, or the agency is about to act in bad faith, arbitrarily, capriciously, and in a wantonly injurious manner. Burcham, supra; Ark. Tech Univ. v. Link, 341 Ark. 495, 17 S.W.3d 809 (2000).
In this case, appellees do not dispute that ASPRS and its Trustees are agencies or arms of the State. In fact, in their second amended complaint, appellees alleged that ASPRS was created by legislation enacted in
The circuit court in this case found, however, that appellants were not entitled to sovereign immunity because the interest that appellees sought was not a general financial obligation of the State that would require an appropriation of funds from the state treasury. Instead, the court indicated that the funds at issue were derived from member contributions and belonged to the officers, not to the State. The court erred in denying appellants’ clаim of sovereign immunity on this basis.
ASPRS is non-contributory with respect to appellees, meaning that the officers are not required to contribute any portion of their pay toward their retirement. See
Stone explained that state revenue, whether from “statutory contributions or revenues from insurance premium tax, title fees, court fees, and special appropriations when there is just not enough money, ultimately end[s] up in the State Police Retirement System for the benefit of the members and beneficiaries.” Although each DROP participant may be able to view his or her individual DROP reserve account online, Stone indicated that each member‘s funds are not actually segregated into individual accounts. To the extent that appellees argue that the funds at issue are not part of the state treasury and do not subject the State to liability because they have already bеen appropriated for ASPRS and cannot be invaded by the State for general-revenue purposes, this same principle would apply to any state agency as Weiss noted in his affidavit.
In Short v. Westark Community College, 347 Ark. 497, 65 S.W.3d 440 (2002), we
In their motion for summary judgment, appellees also contended that there were two exceptions to sovereign immunity that applied to this case. Appellees argued, and the circuit court agreed, that in lowering the interest rate after the class members had already entered the DROP, appellants violated appellees’ contractual rights under both the Arkansas and the United States Constitutions and violated their due-process rights as guaranteed by the
As appellants argue, however, this exception extends only to injunctive relief, and it does not apply to suits seeking money damages. Burcham, supra; Ark. Lottery Comm‘n v. Alpha Mktg., 2013 Ark. 232, 428 S.W.3d 415; Link, supra. Wе have never recognized this exception to allow a claim for damages to proceed against the State. Burcham, supra; Alpha Mktg., supra. Although appellees indicated in their complaint that they were seeking both “legal and equitable” remedies, the nature of the relief sought was clearly for monetary damages, as even the writ of mandamus and the injunction were requested solely to compel the Trustees to pay the interest on each member‘s account consistent with the statute in effect at the time the member became a DROP participant. By the time the circuit court entered its summary-judgment orders in 2015, all the class members had ended their participation in the DROP, and the relief awarded by the circuit court amounted only to damages to be paid to each member. Accordingly, even assuming that appellees sufficiently stated claims against appellants based on constitutional violations or arbitrary or capricious conduct, this exception to sovereign immunity dоes not apply. While appellees cite Jones v. Cheney, 253 Ark. 926, 489 S.W.2d 785 (1973), and Pyle v. Webb, 253 Ark. 940, 489 S.W.2d 796 (1973), in support of their impairment-of-a-contract claim, neither of these cases discussed the issue of sovereign immunity, and they are therefore not relevant to this case.
Appellees also contend that appellants were not entitled to sovereign immunity because the General Assembly waived immunity for the State by enacting
(a) Should any change or error in the records of the State Police Retirement System or the Departmеnt of Arkansas State Police result in any person‘s receiving from the system more or less than he or she would have been entitled to receive had the records been correct, the Board of Trustees of the State Police Retirement System shall correct the
error and, as far as is practicable, shall adjust the payment in such manner that the actuarial equivalent of the benefit to which the person was correctly entitled shall be paid. (b) The board shall have the right to recover any overpayment any person may have received from funds of the system.
As appellees argue, in Weiss, supra, this court held that it could be inferred from the language in this statute that the legislature intended to waive the State‘s sovereign immunity so that an underpaid retiree could sue to have his or her underpayment corrected.
In Weiss, however, the appellee claimed that the appellants had erred by not including certain compensation received by state police officers for uniforms and travel when calculating each officer‘s contributions to ASPRS during the years 1992-2003. Thus, Weiss involved an alleged error on the State‘s part in calculating the officer‘s retirement benefits. Here, the State intentionally amended the statute regarding the interest paid on DROP accounts, and the Trustees deliberately voted to reduce the interest rate pursuant to that statute. There was thus no error in the records as contemplated in
In conclusion, there are no exceptions that apply to this case that prevent appellants from claiming sovereign immunity from appellees’ suit. Thus, the circuit court‘s orders of summary judgment must be reversed, and appellees’ complaint must be dismissed. Because we reversе based on appellants’ first point on appeal and dismiss appellees’ complaint, there is no need to address the remaining points on appeal raised by appellants.
In their cross-appeal, appellees argue that the circuit court erred by denying their request for attorney‘s fees. However, for the reasons discussed above, the circuit court was correct in finding that this claim was barred by sovereign immunity, and we therefore affirm on the cross-appeаl.
Appellees also filed a motion to strike certain portions of appellants’ reply brief, or alternatively, to allow additional briefing. We denied their request for additional briefing but passed the motion to strike until submission of the case. Appellees argue in their motion that appellants have raised new arguments and cited new authority in their reply brief. As appellants assert, however, they were only responding to the arguments made in appellees’ brief. Appellees havе failed to identify any new arguments made by appellants in the reply brief, and we therefore deny appellees’ motion to strike.
Reversed and dismissed on direct appeal; affirmed on cross-appeal; appellees’ motion to strike denied.