Smith v. Tenn. Nat'l Guard, M2016-01109-SC-R11-CV

• Citation: 551 S.W.3d 702
• Decision Date: 22 June 2018
• Docket Number: No. M2016-01109-SC-R11-CV,M2016-01109-SC-R11-CV
• Parties: David R. SMITH v. The TENNESSEE NATIONAL GUARD
• Court: Supreme Court of Tennessee

551 S.W.3d 702

David R. SMITH

v.The TENNESSEE NATIONAL GUARD

No. M2016-01109-SC-R11-CV

Supreme Court of Tennessee, AT NASHVILLE.

April 4, 2018 Session Heard at Jackson

FILED June 22, 2018

Herbert H. Slatery III, Attorney General and Reporter; Andrée Blumstein, Solicitor General; and Jay C. Ballard, Deputy Attorney General, for the appellant, The Tennessee National Guard.

Phillip L. Davidson, Brentwood, Tennessee, for the appellee, David R. Smith.

Cornelia A. Clark, J., delivered the opinion of the Court, in which Sharon G. Lee, Holly Kirby, and Roger A. Page, JJ., joined. Jeffrey S. Bivins, C.J., not participating.

Cornelia A. Clark, J.

In 2014, the General Assembly enacted a statute waiving Tennessee’s sovereign immunity for claims brought against the State pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. §§ 4301 to 4335 ("USERRA"). The waiver of sovereign immunity became effective on July 1, 2014, and applied to USERRA claims "accruing on or after" that date. After passage of the statute, the plaintiff brought a USERRA claim against the defendant, an entity of the State, but his claim was based on facts that occurred prior to August 8, 2011. The trial court dismissed the claim, explaining that the claim accrued prior to July 1, 2014, and remained barred by sovereign immunity. The Court of Appeals reversed, holding that the claim accrued on July 1, 2014, when the plaintiff gained a judicial remedy by the enactment of the statute waiving sovereign immunity. We conclude that the claim accrued prior to July 1, 2014, and remains barred by sovereign immunity. Accordingly, we reverse the judgment of the Court of Appeals and reinstate the judgment of the trial court.

I. Factual and Procedural Background¹

David R. Smith is a former Lieutenant Colonel in the Tennessee National Guard ("the Guard"). The Guard "is a division of the Tennessee Military Department; thus, it is an entity of the State of Tennessee." Smith v. Tenn. Nat'l Guard, 387 S.W.3d 570, 576 (Tenn. Ct. App. 2012), perm. app. denied (Tenn. Nov. 21, 2012) (" Smith I") (citing Tenn. Code Ann. § 58-1-201 et seq. ).

Mr. Smith joined the Guard in 1993 as "a traditional guardsman." In February 2002, he was selected for a full-time position in the Active Guard Reserve ("AGR"). Seven years later, in 2009, Mr. Smith applied for senior developmental education at the Naval War College in Washington, D.C., and he was accepted. The Guard required Mr. Smith to leave his full-time AGR position when he began attending the Naval War College on an active duty tour on July 6, 2010.

On April 24, 2011, Mr. Smith wrote the Guard advising that he was ending his tour at the Naval War College and requesting to know his next assignment. Three days later, on April 27, 2011, the Guard informed Mr. Smith that no position was available but that he could obtain "a traditional guardsman’s position" on his return. Mr. Smith was not rehired to the AGR and was "separated" from it on July 10, 2011.²

On August 8, 2011, Mr. Smith sued the Guard, alleging that it had violated his rights under the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. §§ 4301 to 4335 ("USERRA"). Smith I, 387 S.W.3d at 572-73. USERRA is a federal law intended to provide job security for armed services members.³ USERRA includes four key provisions: (1) "it guarantees returning veterans a right of reemployment after military service"; (2) "it prescribes the position to which such veterans are entitled upon their return"; (3) "it prevents employers from discriminating against returning veterans on account of their military service"; and (4) "it prevents employers from firing without cause any returning veterans within one year of reemployment." Petty v. Metro. Gov't of Nashville-Davidson Cnty., 538 F.3d 431, 439 (6th Cir. 2008) (citations omitted). Mr. Smith alleged that the Guard had violated USERRA by denying him reemployment in the AGR after he returned from his active duty tour at the Naval War College. Smith I, 387 S.W.3d at 573.

The Guard moved to dismiss Mr. Smith’s lawsuit for lack of subject matter jurisdiction based on its sovereign immunity as a State entity. Id. The trial court granted the motion to dismiss, and the Court of Appeals affirmed. Id. at 572.

In affirming the dismissal, the Court of Appeals pointed out that, while USERRA authorizes a private person to bring a cause of action in state court "against a state as an employer," USERRA also specifies that jurisdiction in state court for such a cause of action must be "in accordance with the laws of the State. " Id. at 574 (citing 38 U.S.C. § 4323(b)(2) ) (emphasis added). Like courts in other jurisdictions, the Court of Appeals interpreted this language as authorizing a private cause of action against a state employer in state court only if the state has waived sovereign immunity for USERRA claims. Smith I, 387 S.W.3d at 574-75.⁴ The Court of Appeals concluded that Tennessee had not waived sovereign immunity for USERRA claims and affirmed the trial court’s dismissal of Mr. Smith’s lawsuit. Id. at 576. This Court denied Mr. Smith’s application for permission to appeal.

Thereafter, in 2014, the General Assembly enacted a statute waiving Tennessee’s sovereign immunity for USERRA claims. Tenn. Code. Ann. § 29-20-208 (Supp. 2017).⁵ However, the General Assembly specified that the waiver would become effective July 1, 2014, and would apply "to all [USERRA] claims ... accruing on or after such date [July 1, 2014]." See 2014 Tenn. Pub. Acts, ch. 574, § 2 (emphasis added).

Relying on this newly enacted statute, Mr. Smith filed a motion on July 2, 2014, pursuant to Rule 60 of the Tennessee Rules of Civil Procedure, seeking relief from the prior judgment dismissing his USERRA claim. Smith v. Tenn. Nat'l Guard, No. M2014-02375-COA-R3-CV, 2015 WL 3455448, at *2 (Tenn. Ct. App. May 29, 2015), perm. app. denied (Tenn. Sept. 17, 2015) (" Smith II"). The trial court denied relief, explaining that Mr. Smith’s "claim was still barred by sovereign immunity because it accrued before July 1, 2014." Id. at *1. The Court of Appeals affirmed, explaining that Mr. Smith had filed a complaint on August 8, 2011, alleging that the Guard "violated USERRA by refusing to rehire him after he returned from active duty." Id. at *3. The Court of Appeals pointed out that Mr. Smith’s filing of this complaint evidenced his awareness "that he had suffered an injury as the result of [the Guard’s] conduct" before the complaint was filed on August 8, 2011. Id. Therefore, the Court of Appeals explained, it was "undisputed that [Mr. Smith’s] cause of action accrued prior to July 1, 2014." Id. This Court denied Mr. Smith’s application for permission to appeal.

Not quite four months later, on January 4, 2016, Mr. Smith filed another complaint, for the third time bringing his case before the Circuit Court for Davidson County. In his 2016 complaint, from which the present appeal arises, Mr. Smith alleged the same facts in support of his USERRA claim. In addition, Mr. Smith challenged the constitutionality of Tennessee Code Annotated section 29-20-208, arguing that it violated the Supremacy Clause of the United States Constitution. Specifically, Mr. Smith contended that by limiting the waiver of sovereign immunity to claims accruing after July 1, 2014, the General Assembly had imposed a statute of limitations on USERRA claims in violation of a 2008 federal statute⁶ prohibiting the application of statutes of limitation to such claims.

The Guard moved to dismiss Mr. Smith’s complaint and also defended the constitutionality of the statute. As grounds for dismissal, the Guard again relied on sovereign immunity, arguing that Mr. Smith’s claim accrued before July 1, 2014, the date the waiver of sovereign immunity became effective. The Guard also raised res judicata as a basis for dismissal, pointing to the decisions in Smith I and Smith II. Finally, the Guard denied that Section 29-20-208 imposes a statute of limitations in violation of federal law and argued that it merely specifies the effective date of the waiver of sovereign immunity for USERRA claims.

The trial court rejected Mr. Smith’s challenge to the constitutionality of the statute and again concluded that Mr. Smith’s claim accrued prior to July 1, 2014, and therefore was barred by sovereign immunity. Accordingly, the trial court again dismissed Mr. Smith’s lawsuit based on sovereign immunity.⁷ Smith v. Tenn. Nat'l Guard, No. M2016-01109-COA-R3-CV, 2017 WL 1207881, at *3 (Tenn. Ct. App. Mar. 31, 2017), perm. app. granted (Tenn. Aug. 17, 2017) (" Smith III").

Mr. Smith appealed. In a divided decision, the Court of Appeals reversed. Smith III, 2017 WL 1207881, at *8. Although the Court of Appeals in Smith II had stated that it was "undisputed that [Mr. Smith’s] cause of action accrued prior to July 1, 2014," Smith II, 2015 WL 3455448, at *3, the majority in Smith III determined that Mr. Smith’s cause of action accrued when "he attained the right to sue pursuant to the judicial remedy created by Tennessee Code Annotated section 29-20-208."⁸

Smith III, 2017 WL 1207881, at *7. Like the Court of Appeals in Smith II, the dissenting judge would have affirmed the dismissal on the ground that Mr. Smith’s USERRA claim accrued in July 2011, long before the July 1, 2014 effective date of the waiver of sovereign immunity. Id. at *8, 10 (McBrayer, J., dissenting).⁹

The Guard filed an application for permission to appeal pursuant to Tennessee Rule of Appellate Procedure 11, arguing that the Court of Appeals misapplied the standards of statutory construction applicable to waivers of sovereign immunity and misinterpreted Tennessee decisions addressing when a claim accrues. We granted the Guard’s application.

II. Standard of Review

This appeal arises from the trial court’s decision granting the Guard’s motion to dismiss Mr. Smith’s complaint for failure to state a claim based on sovereign immunity and...