Arkansas Department of Human Services v. Fort Smith School District , 2015 Ark. LEXIS 96 ( 2015 )

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SUPREME COURT OF ARKANSAS
No. CV-14-666
ARKANSAS DEPARTMENT OF Opinion Delivered February 26, 2015
HUMAN SERVICES and JOHN M.
SELIG, INDIVIDUALLY AND IN HIS APPEAL FROM THE PULASKI
OFFICIAL CAPACITY AS DIRECTOR COUNTY CIRCUIT COURT,
OF THE DEPARTMENT OF HUMAN SECOND DIVISION
SERVICES [NO. 60CV-14-718]
APPELLANTS
HONORABLE CHRISTOPHER
V. CHARLES PIAZZA, JUDGE
FORT SMITH SCHOOL DISTRICT; AFFIRMED IN PART; REVERSED
GREENWOOD SCHOOL DISTRICT; AND DISMISSED IN PART; APPEAL
and VAN BUREN SCHOOL DISTRICT DISMISSED IN PART.
APPELLEES
ROBIN F. WYNNE, Associate Justice
This is an interlocutory appeal from the Pulaski County Circuit Court’s denial of a
motion to dismiss on sovereign-immunity grounds filed by appellants, the Arkansas
Department of Human Services (DHS) and its director, John Selig. Under Rule 2(a)(10) of
the Arkansas Rules of Appellate Procedure–Civil (2014), an appeal may be taken from a
circuit court to the Arkansas Supreme Court from an order denying a motion to dismiss
based on the defense of sovereign immunity or the immunity of a government official. As
explained below, we affirm in part; reverse and dismiss in part; and dismiss in part.
This case involves a DHS rule requiring all licensed child-care centers to carry
general-liability insurance. The rule was implemented pursuant to Act 778 of 2009, codified
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at Arkansas Code Annotated section 20-78-227 (Repl. 2014) and titled “Liability insurance
and driver training requirements.” Act of Apr. 3, 2009, No. 778, 2009 Ark. Acts 4222.
Section 20-78-227 provides as follows:
(a) The purpose of this section is to enhance safe and responsible passenger
transportation of children in child care by requiring appropriate liability insurance and
driver training.
(b) The Division of Child Care and Early Childhood Education of the Department
of Human Services is directed, in collaboration with the State Insurance Department,
to develop and promulgate rules requiring sufficient and appropriate minimum levels
of general liability insurance coverage for licensed child care centers and licensed and
registered child care family homes, including coverage for transportation services
when applicable.
(c) The division shall promulgate rules requiring all drivers of vehicles transporting
children on behalf of licensed child care centers and licensed and registered child care
family homes to complete a comprehensive program of driver safety training.
(Emphasis added.) Based on this statute, DHS amended its licensing requirements to include
certain minimum general-liability-insurance coverage for all child-care centers. Appellees,
the plaintiffs below, are three school districts that each operate child-care centers licensed by
DHS. The school districts filed a complaint in the Pulaski County Circuit Court on
February 19, 2014, against Mike Beebe, individually and in his official capacity as governor
of the State of Arkansas;1 John M. Selig, individually and in his official capacity as director
of DHS; and DHS. The school districts sought declaratory and injunctive relief, as well as
costs and attorney’s fees, alleging that DHS’s requirement that they purchase general-liability
1
On April 7, 2014, then Governor Mike Beebe was dismissed from the case when the
circuit court granted the school districts’ motion to voluntarily dismiss him without
prejudice. He is not a party to this appeal.
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insurance conflicted with their tort immunity under Arkansas Code Annotated section 21-9-
301(a).2 They also alleged, among other things, that school-district child care is not a child-
care facility subject to supervision by DHS. In their prayer for relief, the school districts
sought the following:
a. A declaration that Act 778 of 2009 does not require a school district that
operates a child care center or a pre-K program to purchase or maintain general
liability insurance;
b. A declaration that Act 778 of 2009 in no way supersedes, repeals or overrules
in any respect the application of the tort immunity statute for school districts found
in A.C.A. § 21-9-301 even where they, as here, may operate a child care center or
a pre-K program;
c. A declaration that school district child care is not a child care facility subject
to supervision of DHS within the meaning of A.C.A. [§] 20-78-202( 2);
d. A declaration that the proposed rules and regulations promulgated by DHS
pursuant to Act 778 of 2009 have not been published in accordance with the Act and
applicable law and are, therefore, of no force and effect;
e. A declaration that there has been no consideration by the Legislature on the
impact of Act 778 of 2009 on adequacy funding.
f. A preliminary injunction after notice and a hearing prohibiting the State, DHS,
and any of their officials, officers, agents, servants or employees from seeking to
impose any rule, regulation, or other mandate upon the Plaintiffs that would require
the Districts to purchase general liability insurance involuntarily, said preliminary
injunction to be made permanent upon a final hearing on the merits; and
2
Arkansas Code Annotated section 21-9-301(a) (Supp. 2013) provides:
It is declared to be the public policy of the State of Arkansas that all counties,
municipal corporations, school districts, public charter schools, special improvement
districts, and all other political subdivisions of the state and any of their boards,
commissions, agencies, authorities, or other governing bodies shall be immune from
liability and from suit for damages except to the extent that they may be covered by
liability insurance.
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g. That Plaintiffs be awarded all other just and proper relief to which they may
be entitled, including reimbursement of their costs and attorneys fees to the extent
permitted by Arkansas law.
In response, on March 13, 2014, DHS and John Selig filed a motion to dismiss and
accompanying brief, arguing that the school districts’ claims against DHS and Selig in his
official capacity were barred by sovereign immunity, that the claims against Selig in his
individual capacity were barred by statutory immunity under Arkansas Code Annotated
section 19-10-305(a), and that the complaint failed to state a claim upon which relief could
be granted under Arkansas Rule of Civil Procedure 12(b)(6). On March 26, 2014, the
school districts filed a response to DHS and Selig’s motion to dismiss. DHS and Selig filed
a reply on April 2, 2014.
On June 5, 2014, the circuit court held a hearing on appellants’ motion to dismiss and
on the school districts’ motion for preliminary injunction. The hearing included argument
by appellants’ counsel that the school districts’ claims were barred by sovereign and statutory
immunity. At the conclusion of the hearing, the court denied both the motion for
preliminary injunction and the motion to dismiss. An order was entered on June 12, 2014,
and, as to the motion to dismiss, the court stated only that “Defendants’ Motion to Dismiss
is DENIED.”3 This appeal followed.4
3
This case is distinguishable from Arkansas Lottery Comm’n v. Alpha Mktg., 2012 Ark.
23, 386 S.W.3d 400, which was also an interlocutory appeal under Rule 2(a)(10) of the
Arkansas Rules of Appellate Procedure–Civil. In that case, we dismissed the appeal for lack
of jurisdiction because there was no ruling from the trial court on the issue of sovereign
immunity. The crucial distinction is that the trial court’s detailed order on the motion to
dismiss specifically ruled that “[t]he motion to dismiss for failure to state a claim upon which
relief can be granted is denied,” and did not rule on the issue of sovereign immunity. Here,
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I. Standard of Review
In reviewing the circuit judge’s decision on a motion to dismiss, this court has said,
[W]e treat the facts alleged in the complaint as true and view them in the light most
favorable to the party who filed the complaint. In testing the sufficiency of the
complaint on a motion to dismiss, all reasonable inferences must be resolved in favor
of the complaint, and the pleadings are to be liberally construed. However, our rules
require fact pleading, and a complaint must state facts, not mere conclusions, in order
to entitle the pleader to relief.
Arkansas Dep’t of Envtl. Quality v. Oil Producers of Ark., 2009 Ark. 297, at 5, 318 S.W.3d 570,
572–73 (internal citations omitted) (quoting Ark. Tech Univ. v. Link, 341 Ark. 495, 501, 17
S.W.3d 809, 812 (2000)). Our standard of review for the denial of a motion to dismiss is
whether the circuit judge abused his or her discretion. Id. (citing S. Coll. of Naturopathy v.
State ex rel. Beebe, 360 Ark. 543, 203 S.W.3d 111 (2005)).
II. Sovereign Immunity—DHS and Selig in His Official Capacity
we have an order denying the motion to dismiss without explanation, which operates as a
ruling on each of the grounds argued as a basis for dismissal, including immunity. See Hardin
v. Bishop, 2013 Ark. 395, 430 S.W.3d 49 (reviewing the merits of a circuit court’s decision
granting summary judgment, despite the fact that the circuit court did not expressly state the
basis for its ruling); Asset Acceptance, LLC v. Newby, 2014 Ark. 280, 437 S.W.3d 119
(concluding that the circuit court’s blanket denial of a motion to compel arbitration
constituted a ruling on all of the issues raised by the parties).
4
In June 2014, following the circuit court’s denial of their request for temporary
injunctive relief, the school districts filed a notice of appeal, and DHS and Selig cross-
appealed the denial of their motion to dismiss. Facing a July 1, 2014 deadline to acquire
general-liability coverage pursuant to DHS’s rules, the school districts filed a petition for writ
of mandamus or certiorari and application for emergency or accelerated proceedings. This
court denied the petition for writ of mandamus or certiorari and granted the application for
emergency or accelerated proceedings. DHS and Selig’s cross-appeal was perfected and
became the present appeal.
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A suit against a public official in his or her official capacity is essentially a suit against
that official’s agency. Smith v. Daniel, 2014 Ark. 519, at 6, __ S.W.3d __, __. We have held
that official-capacity suits generally represent a way of pleading a cause of action against the
entity of which the officer is an agent. Id. Thus, DHS and John Selig, in his official
capacity, are essentially the same defendant for purposes of our sovereign-immunity analysis.
Appellants contend that the school districts’ claims are barred by sovereign and
statutory immunity. The defense of sovereign immunity originates from the Arkansas
Constitution, which provides that “[t]he State of Arkansas shall never be made defendant in
any of her courts.” Ark. Const. art. V, § 20. Sovereign immunity is jurisdictional immunity
from suit, and jurisdiction must be determined entirely from the pleadings. Clowers v. Lassiter,
363 Ark. 241, 244, 213 S.W.3d 6, 9 (2005). In determining whether the doctrine of
sovereign immunity applies, the court should determine if a judgment for the plaintiff will
operate to control the action of the State or subject it to liability. Id. If so, the suit is one
against the State and is barred by the doctrine of sovereign immunity. Id. This court has
extended the doctrine of sovereign immunity to include state agencies. Ark. Game & Fish
Comm’n v. Eddings, 2011 Ark. 47, at 4, 378 S.W.3d 694, 697.
This court has recognized three ways in which a claim of sovereign immunity may
be waived: (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 or if a state-agency officer refuses to do a purely ministerial action
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required by statute. Ark. Dep’t of Cmty. Corr. v. City of Pine Bluff, 2013 Ark. 36, 425 S.W.3d
731. A statutory waiver of sovereign immunity may be express or implied. Id.
Here, we need not decide whether a judgment for the school districts would operate
to control the action of the State because the General Assembly has expressly waived
sovereign immunity in suits for declaratory judgment regarding the validity or applicability
of agency rules in Arkansas Code Annotated section 25-15-207 (Repl. 2014), which
provides that
(a) The validity or applicability of a rule may be determined in an action for
declaratory judgment if it is alleged that the rule, or its threatened application, injures
or threatens to injure the plaintiff in his person, business, or property.
(b) The action may be brought in the circuit court of any county in which the
plaintiff resides or does business or in Pulaski County Circuit Court.
(c) The agency shall be made defendant in that action.
(d) A declaratory judgment may be rendered whether or not the plaintiff has
requested the agency to pass upon the validity or applicability of the rule in question.
This statute clearly applies in the present case to allow the school districts to challenge DHS’s
rule requiring all licensed child-care centers to maintain general liability insurance.5 In fact,
appellants specifically conceded at the hearing that the circuit court had jurisdiction over
DHS under the above statute contained in the Administrative Procedure Act. Because of the
5
In their reply brief, appellants argue for the first time that, because the school districts
did not specifically invoke Arkansas Code Annotated section 25-15-207 in their complaint,
it cannot serve as a basis for jurisdiction over the State. This court will not consider
arguments raised for the first time in an appellant’s reply brief because the appellee is not
given a chance to rebut the argument. E.g., Coleman v. Regions Bank, 364 Ark. 59, 216
S.W.3d 569 (2005).
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express statutory waiver of sovereign immunity when a declaratory judgment is sought
regarding the validity or applicability of an agency rule, we affirm the denial of appellants’
motion to dismiss on sovereign-immunity grounds as to the declaratory relief sought against
DHS and John Selig, in his official capacity as director of DHS.
The injunctive relief requested by the school districts seeks to bar application of the
rule requiring the plaintiff school districts to purchase general-liability insurance. While
appellants contend that the school districts’ request for injunctive relief is an impermissible
attempt to control the action of the State, we disagree. Where, as here, there is a permitted
challenge to a rule under the declaratory-judgment statute, a request for injunctive relief is
simply a means to enforce the judgment, should the circuit court determine that the rule is
invalid or inapplicable. Furthermore, we have recognized that where an action seeks to
prevent an officer of the State from acting unlawfully, the office does not shield him, and the
action is treated as one against the officer and not a suit against the State. Fed. Compress &
Warehouse Co. v. Call, Commissioner of Labor, 221 Ark. 537, 254 S.W.2d 319 (1953) (action
seeking to enjoin the defendants, the Commissioner of Labor and the Administrator of the
Employment Security Division, from proceeding under an allegedly void administrative
ruling was held not a suit against the State); see also Hickenbottom v. McCain, Commissioner of
Labor, 207 Ark. 485, 181 S.W.2d 226 (1944). Therefore, we affirm the denial of appellants’
motion to dismiss on sovereign-immunity grounds as to the injunctive relief sought against
DHS and John Selig, in his official capacity as director of DHS.
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Finally, appellants are correct that, by seeking to recover monetary damages in the
form of costs and attorney’s fees, the school districts seek to subject the State to liability.
Therefore, looking only at the pleadings, we hold that the request for reimbursement of costs
and attorney’s fees is barred by the doctrine of sovereign immunity and reverse and dismiss
on that narrow claim.6
III. John Selig, in His Individual Capacity
Next, we address the school districts’ suit against John Selig individually. We hold
that, to the extent the school districts make any claims against Selig individually, they are
barred by Arkansas Code Annotated section 19-10-305(a) (Supp. 2013), which provides,
Officers and employees of the State of Arkansas are immune from liability and
from suit, except to the extent that they may be covered by liability insurance, for
damages for acts or omissions, other than malicious acts or omissions, occurring
within the course and scope of their employment.
Under Arkansas Code Annotated section 19-10-305(a), state officers and employees are
statutorily protected by sovereign immunity. Fuqua v. Flowers, 341 Ark. 901, 20 S.W.3d 388
(2000). More particularly, this court has held that such officers and employees acting without
malice within the course and scope of their employment are immune from an award of
damages in litigation. Id. Thus, for a plaintiff to counter an assertion of sovereign immunity,
he or she must allege sufficient facts in his or her complaint to support the claim of malicious
conduct by the defendant. Id. In defining malice, we have stated,
6
We recognize that the school districts, in their response to appellants’ motion to
dismiss, conceded that “in a suit of this nature attorney’s fees and costs are not normally
permitted by law and that they, therefore, do not seek such relief in this case to the extent
not permitted.”
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It is true that in law malice is not necessarily personal hate. It is rather an intent and
disposition to do a wrongful act greatly injurious to another. Malice is also defined as
“the intentional doing of a wrongful act without just cause or excuse, with an intent
to inflict an injury or under circumstances that the law will imply an evil intent. . . .
A conscious violation of the law . . . which operates to the prejudice of another
person. A condition of the mind showing a heart . . . fatally bent on mischief.”•
Arkansas Dep’t of Envtl. Quality v. Al-Madhoun, 374 Ark. 28, 35, 285 S.W.3d 654, 660 (2008)
(citations omitted).
Here, the school districts did not allege any malicious acts or omissions by John Selig,
nor did they allege that he acted outside the scope of his employment. Therefore, to the
extent that the school districts allege that John Selig is liable in his individual capacity, we
reverse and dismiss.
IV. Conclusion
Only the issue of sovereign immunity is properly before this court pursuant to
Arkansas Rule of Appellate Procedure–Civil 2(a)(10). Consequently, we must dismiss the
portion of appellants’ appeal that challenges the denial of their motion on the ground that
school districts operating licensed child-care centers are not exempt from the insurance
requirement of Act 778 of 2009.
Affirmed in part; reversed and dismissed in part; dismissed in part.
BAKER, J., concurs.
HANNAH, C.J., and DANIELSON, J., dissent.
PAUL E. DANIELSON, Justice, dissenting. I respectfully dissent and would dismiss
the instant case due to the failure of the circuit court’s order to expressly rule on the issue of
sovereign immunity as required by this court’s case law.
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Ordinarily, an appeal may not be taken from an order denying a motion to dismiss.
See Univ. of Ark. for Med. Scis. v. Adams, 354 Ark. 21, 117 S.W.3d 588 (2003). However,
Arkansas Rule of Appellate Procedure–Civil 2(a)(10) (2014) provides for an interlocutory
appeal of an order denying a motion to dismiss based on the defense of sovereign immunity.
See id. The rationale justifying an interlocutory appeal is that the right to immunity from suit
is effectively lost if the case is permitted to go to trial. See id.
While such an interlocutory appeal is permissible under this court’s rules, this court has
held that “without a ruling on the sovereign-immunity issue, there can be no interlocutory
appeal.” Ark. Lottery Comm’n v. Alpha Mktg., 2012 Ark. 23, at 6, 386 S.W.3d 400, 404.
Before an interlocutory appeal may be pursued from the denial of a motion to dismiss on the
ground of sovereign immunity, we must have in place an order denying a motion to dismiss
on that basis. See id. In other words, where the circuit court has failed to address the issue
of sovereign immunity in its order, “the absence of an express ruling is fatal” to the appeal. Id.
at 5, 386 S.W.3d at 403 (emphasis added). See also Black’s Law Dictionary 661 (9th ed. 2009)
(defining “express” as “[c]learly and unmistakably communicated; directly stated”). This is
because when sovereign immunity is the basis for appellate jurisdiction, a finding on sovereign
immunity is necessary for our review. See Asset Acceptance, LLC v. Newby, 2014 Ark. 280, 437
S.W.3d 119; Hardin v. Bishop, 2013 Ark. 395, 430 S.W.3d 49.1 In the instant case, the circuit
1
I am left perplexed by the majority’s attempt to distinguish the instant case from that
of Alpha Marketing and its reliance on both Hardin and Asset Acceptance in support of its
position. In both of those cases, we observed that the general ruling at issue was
distinguishable from the nonspecific ruling in Alpha Marketing, because in the latter, sovereign
immunity was the basis of our jurisdiction, and as such, we required a specific finding on that
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court’s order lacks an express ruling on ADHS’s claims of sovereign immunity and statutory
immunity; therefore, this court should dismiss the appeal without prejudice for lack of
jurisdiction.
A review of the instant record reveals that the doctrines of sovereign immunity and
statutory immunity were raised in short by ADHS in its motion to dismiss, in addition to its
claim that the School Districts’ complaint failed to state a claim upon which relief could be
granted.2 The School Districts addressed the issue in their response, and ADHS very briefly
addressed the immunity issue at the hearing before the circuit court.3 After doing so, counsel
for ADHS immediately began to address the merits of the School Districts’ claims, after which
counsel for the districts responded only to ADHS’s arguments on the merits and urged the
circuit court that the districts had alleged sufficient facts to avoid an order dismissing the case.
The circuit court then ruled as follows: “Well, I think it’s close. But I’m going to deny the
issue for our review. Asset Acceptance, 2014 Ark. 280, at 7 n.1, 437 S.W.3d at 123 (“In [Alpha
Marketing], sovereign immunity was the basis of our jurisdiction, and as such, a specific
finding on that issue was necessary for our review.”); Hardin, 2013 Ark. 395, at 6 n.1, 430
S.W.3d at 53 (“In [Alpha Marketing], sovereign immunity was the basis of our jurisdiction,
and as such, that finding was necessary for our review.”). How the majority can now say that
the instant sovereign-immunity case is more like Hardin and Asset Acceptance than like the
sovereign-immunity case of Alpha Marketing is beyond me.
2
I note that the argument relating to sovereign immunity was minimal when
compared to that portion of the motion addressing the merits of the School Districts’
complaint.
3
Counsel for the School Districts addressed neither the issue of sovereign immunity,
nor that of statutory immunity, in the districts’ response during the hearing before the circuit
court.
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Motion at this point, and we’ll go forward with it.” It then took up the School Districts’
request for a preliminary injunction.
Notably, the circuit court’s order lacks any reference at all to ADHS’s contentions of
sovereign and statutory immunity. In its order, after reciting its consideration of the
“motions, responses, and replies filed by the parties, together with the testimony offered and
the oral argument of counsel for the parties,” the circuit court simply found as follows:
1. Defendants’ Motion to Dismiss is DENIED.
2. Plaintiffs have failed to establish that denial of a preliminary injunction will
result in irreparable harm to the applicant.
3. Plaintiffs have failed to demonstrate a likelihood of success on the merits.
4. Plaintiffs’ request for a preliminary injunction is DENIED.
Not only did the circuit court’s order lack an express ruling on the issue of immunity as
required by this court in Alpha Marketing, its order failed to acknowledge the issue at all.4
Moreover, this court has been quite clear that it will not presume a ruling from the circuit
court’s silence, as we have held that we will not review a matter on which the circuit court
has not ruled, “and a ruling should not be presumed.” Alpha Mktg., 2012 Ark. 23, at 7, 386
S.W.3d at 404 (emphasis in original).
Whether an order is appealable is a jurisdictional issue that this court has a duty to raise,
even if the parties do not. See Ford Motor Co. v. Harper, 353 Ark. 328, 107 S.W.3d 168
(2003). Where no final or otherwise appealable order is entered, this court lacks jurisdiction
to hear the appeal. See id. Because the circuit court “did not pass judgment” or expressly rule
4
The record discloses that the circuit court’s order was prepared by counsel for ADHS.
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on ADHS’s claim that the relief sought by the School Districts was barred by sovereign and
statutory immunity, we lack an appealable order. Alpha Mktg., 2012 Ark. 23, at 6, 386
S.W.3d at 404. Without such, this court lacks jurisdiction to hear the instant appeal, and the
appeal should be dismissed without prejudice. Accordingly, I dissent.
HANNAH, C.J., joins.
J. Mark White, Arkansas Department of Human Services Office of Policy and Legal
Services, for appellants.
Thompson and Llewellyn, P.A., by: James M. Llewellyn, Jr., and William P. Thompson, for
appellees.
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