Opinion ID: 1874417
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Heading: Is the State Immune from Suit for Declaratory Relief

Text: [¶ 27.] The common-law doctrine of sovereign immunity [14] is expressed in Article III, Section 27 of the South Dakota Constitution. [15] Sovereign immunity prevents the governing acts of the state, its agencies, other public entities, and their employees from attack in court without the state's consent. Wulf v. Senst, 2003 SD 105, ¶ 20, 669 N.W.2d 135, 142 (citing Casazza v. State, 2000 SD 120, ¶ 11, 616 N.W.2d 872, 875). However, sovereign immunity does not prohibit all actions brought against state officials or agencies. Id. (citing Wilson v. Hogan, 473 N.W.2d 492 (S.D.1991)). Some actions may be brought against state officers and agencies. White Eagle Oil & Refining Co. v. Gunderson, 48 S.D. 608, 616, 205 N.W. 614, 617 (1925); Dakota Sys., 2005 SD 27, ¶ 9, 694 N.W.2d at 28. Those actions include suits to compel a state official to perform official duties that are purely ministerial and involve no discretionary power. In those cases state officials may be restrained or prohibited by appropriate action or procedure, in any court having jurisdiction, from performing unlawful acts as such officials, without the consent of the state. White Eagle Oil & Refining Co., 48 S.D. at 616, 205 N.W. at 617. Such actions are permitted because [s]overeign immunity does not bar suits against state officials acting in excess of their statutory authority or pursuant to an unconstitutional statute. Dakota Sys., 2005 SD 27, ¶ 9, 694 N.W.2d at 28 (quoting Miller v. Egan, 265 Conn. 301, 316, 828 A.2d 549, 560 (2003)). Therefore, 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 prohibited by principles governing sovereign immunity. Id. (quoting Northwall v. Dep't of Revenue, 263 Neb. 1, 7, 637 N.W.2d 890, 896 (2002)). [¶ 28.] Although Dakota Systems involved a constitutional challenge to tax statutes, actions seeking interpretation of tax statutes are also permitted within this sovereign immunity exception. In Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709 (1945), the Texas Supreme Court considered a remarkably similar dispute. In that case, a Texas company brought a declaratory judgment action against the Texas State Comptroller to declare whether or not respondents are legally liable to pay and petitioners are legally authorized to demand, collect and receive from respondents an occupation tax measured by the gross receipts of `motor carriers' under a Texas statute. Id. at 362, 190 S.W.2d at 710. In rejecting the sovereign immunity defense, the Texas court explained that declaratory judgment did not impose liability upon the State or compel the performance of its contracts nor was it an action for the recovery of money from the State that would be paid out of the State treasury. Id. at 365-66, 190 S.W.2d at 712. The court further explained that the action was not one to control a state official that was acting within the scope of authority lawfully conferred upon him. Id. at 366, 190 S.W.2d at 712. Rather, the action only sought to obtain[] a judgment declaring that respondents [were] not motor carriers as defined by the tax statute, and that petitioners, in endeavoring to compel respondents to pay the tax, [were] acting ... without legal authority. Id. The court ultimately concluded that when state officials perform acts that are in excess of their statutory authority, they are not acts of the State within the rule of immunity. Id. Thus, as the Supreme Court of Wisconsin noted: It is generally held by the courts, both state and federal, that where the action taken or threatened by an officer, is alleged to be in violation of the complainant's rights, either because of a misconstruction or misapplication by the officer of a statute, or on account of the alleged unconstitutionality of the statute, the action is not in fact one against the state [for purposes of sovereign immunity] but is rather against the individual because of his lack of power and authority to do the thing complained of. Berlowitz v. Roach, 252 Wis. 61, 65, 30 N.W.2d 256, 258 (1947) (citation omitted). [16] [¶ 29.] Notwithstanding this exception, the circuit court concluded and the State argues that the State is immune from suit under our decision in Pennington County, 2002 SD 31, 641 N.W.2d 127. In that case, a subdivision of the State (a county) sued the State. Id. ¶ 15. The county sought a declaration that it was not required to provide the State with space in a courthouse but, if it was so required, that the State was obligated to pay the county for that space. Id. ¶ 3. This Court dismissed the suit, concluding that [c]ounties cannot sue their creators. Id. ¶ 15. [¶ 30.] The State correctly points out that in rendering that decision this Court discussed sovereign immunity and stated [t]he State cannot be sued for declaratory relief. Id. ¶ 16. However, that language must be considered in the context of the Court's holding that counties, as creatures of the State, may not sue their creator. Furthermore, we have recently noted that Pennington County is distinguishable because the county was attempting to obtain a declaratory ruling to obligate the State to pay the county money for the State's use of the Courthouse. Dakota Sys., 2005 SD 27, ¶ 8, 694 N.W.2d at 27-28. Considering that attempt by the county to impose an obligation on the state treasury, the holding of Pennington County is limited to county suits seeking monetary relief from the state treasury. Certainly, the Pennington County dictum on sovereign immunity may not be extended to suggest the rather novel notion that states are generally immune from suits for declaratory relief. On the contrary, as previously discussed, 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 prohibited by principles governing sovereign immunity. Id. ¶ 9, 694 N.W.2d at 28 (citations omitted). To the extent Pennington County may be interpreted otherwise, we limit its reach. [¶ 31.] In this case, Nelson only sought an interpretation of the excise tax statutes as they apply to its prospective sales of automobiles. Nelson neither sought a monetary judgment nor a refund of taxes that would be paid from the state treasury. Furthermore, the action did not attempt to control or impose affirmative action upon a state official that was allegedly acting within the scope of his legal authority. Rather, this action only sought a declaration concerning the applicability of the excise tax to motor vehicles that were returned or repossessed before installment sale contracts were completed. That question only required the circuit court to determine whether the Secretary of the Department of Revenue and Regulation was acting without legal authority in imposing that tax. Because such actions are not precluded by sovereign immunity, Nelson's declaratory judgment action was not barred. [¶ 32.] Reversed and remanded. [¶ 33.] GILBERTSON, Chief Justice, and KONENKAMP and MEIERHENRY, Justices, concur. [¶ 34.] SABERS, Justice, concurs specially.