Ark. Dep't of Human Servs. v. Fort Smith Sch. Dist.

• Decision Date: 26 February 2015
• Docket Number: No. CV–14–666,CV–14–666
• Citation: 455 S.W.3d 294
• Parties: Arkansas Department of Human Services and John M. Selig, Individually and in his official capacity as Director of the Department of Human Services, Appellants v. Fort Smith School District; Greenwood School District; and Van Buren School District, Appellees
• Court: Arkansas Supreme Court

455 S.W.3d 294

Arkansas Department of Human Services and John M. Selig, Individually and in his official capacity as Director of the Department of Human Services, Appellants

v.Fort Smith School District; Greenwood School District; and Van Buren School District, Appellees

No. CV–14–666

Supreme Court of Arkansas.

Opinion Delivered February 26, 2015

J. Mark White, Arkansas Department of Human Services Office of Policy and Legal Services, Bryant, for appellants.

Thompson and Llewellyn, P.A., by: James M. Llewellyn, Jr., and William P. Thompson, Fort Smith, for appellees.

Opinion

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 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 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

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

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

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 required by statute. Ark. Dep't of Cmty. Con. 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

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