Opinion ID: 1057714
Heading Depth: 2
Heading Rank: 3

Heading: Declaratory Judgment Against State Officers

Text: An important issue is whether a declaratory judgment may be issued against individual state officers. Relying on its holding in Campbell v. Sundquist, 926 S.W.2d 250 (Tenn.Ct.App.1995), the Court of Appeals held that the Declaratory Judgment Act authorizes suits against state officers, so long as the goal is not to reach the state, its treasury, funds or property. Id. at 256. The Plaintiff also relies upon that ruling. The Defendants claim, however, that three opinions from this Court are in conflict with Campbell : L.L. Bean, 817 S.W.2d at 297-98; N. Telecom Inc. v. Taylor, 781 S.W.2d 837, 839-40 (Tenn.1989); and Hill v. Beeler, 199 Tenn. 325, 286 S.W.2d 868, 871 (1956). Under the particular facts in each of those cases, we held that suits against state officers should be dismissed because of sovereign immunity and the lack of subject matter jurisdiction. L.L. Bean, 817 S.W.2d at 298-99. The doctrine of sovereign immunity is `a principle of the common law as old as the law itself, that the king is not bound by any statute, if he be not expressly named to be so bound.' Auto. Sales Co. v. Johnson, 174 Tenn. 38, 122 S.W.2d 453, 455 (1938) (quoting State v. Kinne, 41 N.H. 238 (1860)). In England, some state officers were insulated from suit on the basis that they were acting on behalf of the King. See Louis L. Jaffe, Suits Against Governments and Officers: Sovereign Immunity, 77 Harv. L.Rev. 1, 9 (1963). The King's immunity rested primarily on the structure of the feudal system and secondarily on a fiction that the King could do no wrong. Nevada v. Hall, 440 U.S. 410, 415, 99 S.Ct. 1182, 59 L.Ed.2d 416 (1979) (citing 1 Blackstone, Commentaries ). Today, American courts generally reject the archaic legal fiction that the sovereign can do no wrong. [12] Seminole Tribe v. Florida, 517 U.S. 44, 103 n. 2, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996) (Souter, J., dissenting) (citing Langford v. United States, 101 U.S. 341, 342-343, 25 L.Ed. 1010 (1880)). Justice Holmes attempted to explain modern conceptions of sovereign immunity with the logical conclusion that there can be no legal right as against the authority that makes the law on which the right depends. Kawananakoa v. Polyblank, 205 U.S. 349, 353, 27 S.Ct. 526, 51 L.Ed. 834 (1907). Logic aside, the policy behind sovereign immunity has been most convincingly justified by principles of separation of powers. [13] This Court has consistently interpreted our state constitution as upholding the doctrine of sovereign immunity. The last sentence of article I, section 17 states, Suits may be brought against the State in such manner and in such courts as the Legislature may by law direct. [14] The traditional construction of the clause is that suits cannot be brought against the State unless explicitly authorized by statute. See, e.g., N. British & Mercantile Co. v. Craig, 106 Tenn. 621, 62 S.W. 155, 157 (1900); State v. Bank of Tenn., 62 Tenn. (3 Baxt.) 395, 403 (1874). The General Assembly has taken a comparable position by stating: No court in the state shall have any power, jurisdiction, or authority to entertain any suit against the state, or against any officer of the state acting by authority of the state, with a view to reach the state, its treasury, funds, or property. . . . Tenn.Code Ann. § 20-13-102 (1994). This concept of sovereign immunity generally extends to state agencies and state officers acting in their official capacity. 81A Am.Jur. States § 533 (2004). In Stockton v. Morris & Pierce, 172 Tenn. 197, 110 S.W.2d 480 (1937), however, we held that the doctrine of sovereign immunity does not bar suits against state officers to prevent them from enforcing an allegedly unconstitutional statute. [15] Stockton involved a suit in replevin instituted by tobacco dealers against the State Department of Finance to recover tobacco products that were seized pursuant to an unconstitutional statute. Id. at 481. The defendants filed a motion to dismiss, alleging that the trial court lacked jurisdiction in actions against the State. Id. In rejecting this argument, we held that `[a] suit against state officers attacking the constitutionality of a statute of the State is not a suit against the State.' Id. at 483 (quoting 43 A.L.R. 408). Our reasoning paralleled that of the United States Supreme Court's seminal decision of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). [16] Essentially, an officer acting pursuant to an unconstitutional statute does not act under the authority of the state; thus, the officer does not enjoy the immunity that would normally be granted pursuant to official authority. In other words, the officer loses immunity when acting beyond the scope of the power of the State, and the power of the State is limited by the state and federal constitutions. The issue is not whether the State has waived sovereign immunity for this specific classification of suit; sovereign immunity simply does not attach. The exception we laid out in Stockton pertains only to suits preventing the enforcement of an unconstitutional statute. It would not allow for money damages to be awarded against state officers because such a suit would reach the state, its treasury, funds, or property. Tenn.Code Ann. § 20-13-102; see also Edelman v. Jordan, 415 U.S. 651, 665, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974) (holding that suits against state officers for money damages cannot be rendered in federal court because funds to satisfy monetary awards inevitably come from the general revenues of the state). Most of the cases relied upon by the Defendants in this case involve suits for money damages, and, therefore, are not controlling. For instance, the plaintiff in Hill was a widow who sued in the Board of Claims for money damages against the State of Tennessee for the death of her husband. Hill, 286 S.W.2d at 870. When the Board of Claims found it lacked jurisdiction, Hill sought a declaratory judgment in the Chancery Court. Id. We affirmed the chancellor's dismissal of the action because the Board of Claims had no authority or jurisdiction to hear the claimant's petition. Id. at 334-35, 286 S.W.2d 868. Similarly, in Northern Telecom, the plaintiff sought a tax refund from the Commissioner of Revenue because of an alleged overpayment. N. Telecom, 781 S.W.2d at 838-39. In both Hill and Northern Telecom, the Plaintiff sought to disguise a suit for money damages by an action for declaratory judgmentusing the Act as a Trojan horse to reach the state, its treasury, funds, or property. Tenn.Code Ann. § 20-13-102. Despite the broad language in these opinions, they should not be interpreted to preclude suits for declaratory judgment against enforcement of unconstitutional statutes by state officers. Stockton, 110 S.W.2d at 483. The Defendants' reliance on our ruling in L.L. Bean is more on point. In that case, this Court upheld the dismissal of a suit for declaratory judgment where the plaintiff argued that a particular tax statute was unconstitutional. L.L. Bean, 817 S.W.2d at 296. The procedural posture in L.L. Bean is almost identical to the case at bar. In support of the holding, this Court cited both Hill and Northern Telecom and ruled that the Declaratory Judgment Act does not grant subject matter jurisdiction for a court to issue a declaratory judgment against the Commissioner of Revenue. Further, this Court made the following observation: Northern Telecom and Hill v. Beeler are not based solely on the doctrine of sovereign immunity. The result in both cases also has as a sufficient basis for decision the lack of subject matter jurisdiction. Even to the extent that they do rely on the doctrine of sovereign immunity, their holdings are not made inapplicable in cases involving state revenue by the device of designating defendants as individuals rather than as state officials. Id. at 298 (citing Auto. Sales Co., 122 S.W.2d at 453). The L.L. Bean opinion suggests that Colonial's suit is barred for two reasonssovereign immunity and lack of subject matter jurisdiction. In light of our conflicting opinion in Stockton , we must choose one holding over the other. For several reasons, we believe that Stockton offers the better alternative. First, the distinction drawn in L.L. Bean , between sovereign immunity and subject matter jurisdiction, was not particularly helpful under the facts of that case or in either Northern Telecom or Hill . While these are two different legal concepts, sovereign immunity and subject matter jurisdiction often embody the same inquiry in cases involving declaratory judgments against enforcement of an unconstitutional statute. [17] This is because sovereign immunity encompasses both the principle of immunity from suit and the principle of immunity from liability. 81A Am.Jur.2d States § 534 (2004). In accordance with the first principle, [s]overeign immunity is jurisdictional immunity from suit. The constitutionally guaranteed principle of state immunity acts as a jurisdictional bar to an action against the state by precluding a court from exercising subject-matter jurisdiction. Id. The doctrine of sovereign immunity was the only reason that the courts lacked subject matter jurisdiction in Hill and Northern Telecom. When state officers lose this immunity by enforcing an unconstitutional statute, the Declaratory Judgment Act grants jurisdiction in a suit against them as individuals. Stockton, 110 S.W.2d at 482-83. Absent the shield of sovereign immunity, a suit against a state officer is no different than a suit against any other person for the purposes of subject matter jurisdiction. Next, the L.L. Bean opinion did not apply, distinguish, or explicitly overrule Stockton . In Stockton , we affirmed a judgment against the Commissioner of Finance and Taxation. Stockton, 110 S.W.2d at 485-86. Confronted with these conflicting holdings, it appears that our ruling today is not only compliant with a well-established rule of sovereign immunity as recognized by the federal courts, Ex parte Young, 209 U.S. at 159-60, 28 S.Ct. 441 but is also consistent with the majority view in other jurisdictions which recognize traditional sovereign immunity. See, e.g., Jackson v. Millstone, 369 Md. 575, 801 A.2d 1034, 1043 (2002) (Where a statute or regulation is invalid, sovereign immunity does not preclude a declaratory judgment action or suit for an injunction against the governmental official who is responsible for enforcing the statute or regulation.); City of Belmont v. Miss. State Tax Comm'n, 860 So.2d 289, 296 (Miss.2003) (quoting State v. Hinds County Bd. of Sup'rs, 635 So.2d 839, 842 (Miss. 1994) (Mississippi law supports the proposition that no sovereign immunity exists when the relief sought is a declaration that a particular statute or action of the State is unconstitutional.); Northwall v. State, 263 Neb. 1, 637 N.W.2d 890, 896 (2002) (stating that a declaratory judgment action attacking the constitutionality of a statute or seeking relief from an invalid act or an abuse of authority by an officer or agent is not a suit against the state and is therefore not prohibited by principles governing sovereign immunity); Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002) (Private parties may seek declaratory relief against state officials who allegedly act without legal or statutory authority.); Berlowitz v. Roach, 252 Wis. 61, 30 N.W.2d 256, 257 (1947) (stating these are but actions against the enforcing officer to prevent him from doing that which it is claimed he has no legal right to do). The ruling in Stockton is based upon the concept that an officer acting pursuant to a statute that is unconstitutional and void does not act as an agent of the State. Any such action is ultra vires that is, beyond the authority granted by the State. As Justice Peckham wrote: The act to be enforced is alleged to be unconstitutional; and if it be so, the use of the name of the State to enforce an unconstitutional act to the injury of complainants is a proceeding without the authority of, and one which does not affect, the State in its sovereign or governmental capacity. It is simply an illegal act upon the part of a state official in attempting, by the use of the name of the State, to enforce a legislative enactment which is void because unconstitutional. Ex parte Young, 209 U.S. at 159, 28 S.Ct. 441. [18] We agree with the assessment made by our highest court more than a century ago. Further, the approach in Stockton is most consistent with our separation of powers doctrine in that it prevents sovereign immunity from devitalizing a judicial tool necessary to ensure that the executive and legislative branches act within the constraints of the state and federal constitution. [19] Tenn. Const. art. II, § 2; see also Campbell, 926 S.W.2d at 266. While in Campbell v. Sundquist , the Court of Appeals analyzed the doctrine of sovereign immunity under the Declaratory Judgment Act in a slightly different way, the result is consistent with our ruling today. In Campbell , our intermediate court reasoned that because the Declaratory Judgment Act should be liberally construed in favor of the person seeking relief in a proper case to the end that rights and interests be expeditiously determined; the Act was an enabling statute to allow a proper plaintiff to maintain a suit against the State challenging the constitutionality of a state statute. Id. at 256-57. Stated differently, the remedial nature of the Act qualified as a waiver of sovereign immunity. The flaw in that reasoning, however, is that the waiver of sovereign immunity must be explicit, not implicit. See Auto. Sales Co., 122 S.W.2d at 456 (quoting Mayrhofer v. Bd. of Educ., 89 Cal. 110, 26 P. 646, 647 (1891) (One cannot sue the state, unless expressly authorized by statute, and this principle is embodied in our constitution. General statutes creating new remedies for individuals have never been held to authorize such suits.)). The Declaratory Judgment Act does not contain an explicit waiver of sovereign immunity. Unlike the majority in Campbell , we do not hold that the Declaratory Judgment Act waives sovereign immunity. Instead, we hold that sovereign immunity simply does not apply to a declaratory judgment action challenging the constitutionality of a statute against state officers. See Stockton, 110 S.W.2d at 483. Because sovereign immunity does not apply, a waiver is unnecessary. Further, subject matter jurisdiction is not a bar. Because this case is a declaratory judgment action against state officers challenging their authority to impose laws violative of the constitution in their individual capacity, as opposed to official capacity, the Defendants fall under the definition of person in our Declaratory Judgment Act. Tenn.Code Ann. § 29-14-101 (providing that a person is any person, partnership, joint stock company, unincorporated association, or society, or municipal or other corporation of any character whatsoever). Thus, the General Assembly has authorized subject matter jurisdiction over these individual state officers, to the extent that their actions are grounded in an unconstitutional statute. This grant of subject matter jurisdiction is found in Tennessee Code Annotated section 29-14-103, which provides that [a]ny person . . . whose rights, status, or other legal relations are affected by a statute. . . may have determined any question of construction or validity arising under the. . . statute . . . and obtain a declaration of rights, status or other legal relations thereunder. It is our view, therefore, that the Declaratory Judgment Act grants subject matter jurisdiction to the Davidson County Chancery Court to address the constitutional issues. As stated, the Plaintiff does not seek money damages or a refund of paid taxes; the relief sought is a declaration of unconstitutionality. Thus, the Chancery Court may issue declaratory and injunctive relief against the Defendants in their individual capacity, so long as the court's judgment is tailored to prevent the implementation of unconstitutional legislation and does not reach the state, its treasury, funds, or property. Tenn.Code Ann. § 20-13-102.