Wood v. State

• Decision Date: 21 November 2017
• Docket Number: 1160814
• Citation: 261 So.3d 322
• Parties: James C. WOOD v. STATE of Alabama et al.
• Court: Alabama Supreme Court

261 So.3d 322

James C. WOOD

v.STATE of Alabama et al.

1160814

Supreme Court of Alabama.

November 21, 2017

* Note from the reporter of decisions: Judge Aderholt, retired circuit judge, Winston County, was appointed to preside over this case upon the recusal of the circuit judges in the 15th Judicial Circuit.

William J. Baxley, Joel E. Dillard, and Donald R. James, Jr., of Baxley, Dillard, McKnight, James & McElroy, Birmingham, for appellant.

Laura G. Canary and Jared H. Morris, Retirement Systems of Alabama, Montgomery, for appellees; and James Davis, asst. atty. gen., and Mose Stuart, Alabama Department of Finance, "of counsel."

SELLERS, Acting Chief Justice.¹

James C. Wood, a retired circuit court judge, appeals from a summary judgment in favor of: the State of Alabama; Luther Strange, in his capacity as Attorney General for the State of Alabama;² David G. Bronner, in his capacity as chief executive officer of the Employees' Retirement System of Alabama; the Board of Control of the Employees' Retirement System of Alabama ("the Board of Control"); and Thomas L. White, Jr., in his capacity as Comptroller for the State of Alabama (hereinafter collectively referred to as "the State defendants").³

I. Facts and Procedural History

This appeal involves increases in the rates of contributions judges and justices are required to pay into the Judicial Retirement Fund ("the Fund"), pursuant to § 12–18–5, Ala. Code 1975. The Fund was established under the provisions of Act No. 1163, Ala. Acts 1973, codified at § 12–18–1 et seq., Ala. Code 1975, to provide retirement benefits to qualified judges and justices. The Fund is administered by the Board of Control. See § 12–18–2(a), Ala. Code 1975.

Section 12–18–5 provides that membership in the Fund is mandatory for judges and justices elected or appointed to office after September 18, 1973. When the Fund was established, each judge and justice participating in the Fund was required to "contribute to [the Fund] four and one-half percent of his earnable compensation." Id. In 1975, § 12–18–5 was amended to provide that, after February 1, 1977, "the rate of contribution to be paid by the justices and judges shall be six percent of their salary." Ala. Acts 1975, 4th Special Sess., Act No. 66, § 4, p. 2680. On August 11, 1999, Judge Wood was appointed to the 13th Judicial Circuit in Mobile, at which time he began contributing six percent (6%) of his annual salary to the Fund. Judge Wood served until his retirement on January 15, 2013.

On June 15, 2011, the legislature passed Act No. 2011–676, Ala. Acts 2011 ("the Act"), which further amended § 12–18–5 to provide for additional increases in contribution rates to the Fund.⁴ Section 12–18–5, as amended, provides:

"For all pay dates beginning on or after October 1, 2011, the contribution to be paid by the justices and judges shall be eight and one-quarter percent (8.25%) of their salary. For all pay dates beginning on or after October 1, 2012, the rate of contribution to be paid by the justices and judges shall be eight and one-half percent (8.5%) of their salary."

Judge Wood was serving his second official term⁵ when both increases in contribution rates took effect. Beginning October 1, 2011, Judge Wood's contribution to the Fund increased from six percent (6%) to eight and one-fourth percent (8.25%), and, beginning October 1, 2012, his contribution increased to eight and one-half percent (8.5%). As noted, Judge Wood retired on January 15, 2013.

In June 2012, Judge Wood, individually, and on behalf of a purported class of "all members" of the Fund, sued the State defendants, alleging that the mandatory increases in contributions to the Fund reduced Judge Wood's net pay without affording him any additional retirement benefits. He alleged that the increases in contributions violated the Judicial Compensation Clause of Art. VI, § 148(d), Constitution of Alabama of 1901 ("the Compensation Clause"), which provides that "[t]he compensation of a judge shall not be diminished during his official term."

In his complaint, Judge Wood sought a judgment declaring the Act unconstitutional as violative of the Compensation Clause. He requested relief in the form of an order restoring to him any and all sums by which his compensation allegedly had been diminished, permanently enjoining the State defendants from continuing to enforce the Act against him, and awarding him costs and attorney fees. He also sought similar relief under 42 U.S.C. § 1988. Finally, he sought to have a class of similarly situated judges and justices certified.

The State defendants, pursuant to Rule 56, Ala. R. Civ. P., filed a motion for a summary judgment, arguing that Judge Wood's claims were due to be dismissed on the basis of immunity and mootness.⁶ The State defendants also argued that the increases in mandatory contributions did not diminish a judge's or justice's compensation in violation of the Compensation Clause. In response, Judge Wood moved the trial court to enter a summary judgment declaring the Act unconstitutional.

In May 2017, after considering the evidence and the parties' arguments, the trial court entered a summary judgment in favor of the State defendants and against Judge Wood, upholding the Act. In its judgment, the trial court stated:

"Rather than diminishing ‘compensation,’ the changes in retirement contribution rates implemented by [the Act] simply increased the amount contributed by all education and state employees, including judges, to help pay for their retirement benefits. Indeed, such changes have been made before—in 1975 the legislature increased contribution rates for participants including judges. See Acts 1975, 4th Ex. Sess., No. 66, p. 2680, § 4. Moreover, it is undisputed that judges retain ownership over their own contributions and that they have the right to withdraw their contributions from the retirement system, with interest, should they choose to do so at the end of their active employment. [ Ala. Code 1975, § 12–18–8(b) ]. The Compensation Clause is not violated, nor is the independence of the judiciary threatened, by [the Act's] broadly applicable increase to retirement benefit costs. See United States v. Hatter, [532 U.S. 557, 121 S.Ct. 1782, 149 L.Ed.2d 820 (2001) ] (applying the federal Compensation Clause to uphold the constitutionality of a Medicare cost increase that applied to federal employees in general, including judges)."⁷

Judge Wood appealed.

II. Discussion

Judge Wood argues that the trial court erred by entering a summary judgment in favor of the State defendants—upholding the Act. The trial court entered the summary judgment based on the merits of Wood's claims. However, this Court is compelled to address at the outset the State defendants' arguments concerning immunity and mootness because those arguments implicate subject-matter jurisdiction. See Ex parte Smith, 438 So.2d 766, 768 (Ala. 1983) ("[I]t is the duty of an appellate court to consider lack of subject matter jurisdiction ex mero motu."). Without subject-matter jurisdiction, neither the trial court nor we can reach the merits.

A. Immunity

In Alabama Department of Corrections v. Montgomery County Commission, 11 So.3d 189 (Ala. 2008), this Court stated the following well established law regarding sovereign or State immunity:

"Section 14, Ala. Const. 1901, provides: ‘[T]he State of Alabama shall never be made a defendant in any court of law or equity.’ (Emphasis added.) ‘The wall of immunity erected by § 14 is nearly impregnable.’ Patterson v. Gladwin Corp., 835 So.2d 137, 142 (Ala. 2002). Indeed, as regards the State of Alabama and its agencies, the wall is absolutely impregnable. Ex parte Alabama Dep't of Human Res., 999 So.2d 891, 895 (Ala. 2008) (‘Section 14 affords absolute immunity to both the State and State agencies.’); Ex parte Jackson County Bd. of Educ., 4 So.3d 1099, 1102 (Ala. 2008) (same); Atkinson v. State, 986 So.2d 408, 410–11 (Ala. 2007) (same); [In re] Good Hope [Contracting Co. v. Alabama Dep't of Transp., 978 So.2d 17 (Ala. 2007) ] (same); Ex parte Alabama Dep't of Transp., 764 So.2d 1263, 1268 (Ala. 2000) (same); Mitchell v. Davis, 598 So.2d 801, 806 (Ala. 1992) (same). ‘Absolute immunity’ means just that—the State and its agencies are not subject to suit under any theory.

" ‘This immunity may not be waived.’ Patterson, 835 So.2d at 142. Sovereign immunity is, therefore, not an affirmative defense, but a ‘jurisdictional bar.’ Ex parte Alabama Dep't of Transp., 985 So.2d 892, 894 (Ala. 2007). The jurisdictional bar of § 14 simply ‘preclud[es] a court from exercising subject-matter jurisdiction’ over the State or a State agency. Lyons v. River Road Constr., Inc., 858 So.2d 257, 261 (Ala. 2003). Thus, a complaint filed solely against the State or one of its agencies is a nullity and is void ab initio. Ex parte Alabama Dep't of Transp. (In re Russell Petroleum, Inc. v. Alabama Dep't of Transp.), 6 So.3d 1126 (Ala. 2008).... Any action taken by a court without subject-matter jurisdiction—other than dismissing the action—is void. State v. Property at 2018 Rainbow Drive, 740 So.2d 1025, 1029 (Ala. 1999)."

11 So.3d at 191–92.

"Because the immunity of the State is absolute, this Court has usually provided that any exceptions to that immunity extend only to suits naming the proper State official in his or her representative capacity. See Latham [v. Department of Corr.], 927 So.2d [815,] 821 [ (Ala. 2005) ] (laying out the exceptions to sovereign immunity). Even when an action names the proper State official in his or her representative capacity, such an action will be barred if it is, in substance, an action against the State for damages. See Ex parte Town of Lowndesboro, 950 So.2d 1203, 1206 (Ala. 2006) (‘Additionally, a party may not indirectly sue the State by suing its officers or agents " ‘when a result favorable to plaintiff would be directly to affect the financial status of the state treasury.’ " ’ (quoting Patterson v. Gladwin Corp., 835 So.2d 137, 142 (Al

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