Court Opinion

ID: 6346048
Source: CourtListenerOpinion
Date Created: 2022-06-02 15:02:01.830987+00
Date Added: 2024-06-11T09:16:39.182015
License: Public Domain

Cite as 2022 Ark. 119
           SUPREME COURT OF ARKANSAS
                            No.   CV-21-624

                               Opinion Delivered: June 2, 2022
PHILIP PALADE, GREGORY BORSE,
AND J. THOMAS SULLIVAN, ON
BEHALF OF THEMSELVES AND ALL
OTHERS SIMILARLY SITUATED      APPEAL FROM THE PULASKI
                    APPELLANTS COUNTY CIRCUIT COURT,
                               SEVENTEENTH DIVISION
V.                             [NO. 60CV-20-3218]

BOARD OF TRUSTEES OF THE         HONORABLE MACKIE M. PIERCE,
UNIVERSITY OF ARKANSAS           JUDGE
SYSTEM; ED FRYAR, PH.D., IN HIS
OFFICIAL CAPACITY AS TRUSTEE;
STEVE COX, IN HIS OFFICIAL       AFFIRMED.
CAPACITY AS TRUSTEE; TOMMY
BOYER, IN HIS OFFICIAL
CAPACITY AS TRUSTEE; SHEFFIELD
NELSON, IN HIS OFFICIAL
CAPACITY AS TRUSTEE; C.C.
GIBSON, IN HIS OFFICIAL
CAPACITY AS TRUSTEE; STEPHEN
BROUGHTON, M.D., IN HIS
OFFICIAL CAPACITY AS TRUSTEE;
KELLY EICHLER, IN HER OFFICIAL
CAPACITY AS TRUSTEE; MORRIL
HARRIMAN, IN HIS OFFICIAL
CAPACITY AS TRUSTEE; MARK
WALDRIP, IN HIS OFFICIAL
CAPACITY AS TRUSTEE; AND JOHN
GOODSON, IN HIS OFFICIAL
CAPACITY AS TRUSTEE
                       APPELLEES

                COURTNEY RAE HUDSON, Associate Justice
       Appellants Philip Palade, Gregory Borse, and J. Thomas Sullivan, on behalf of

themselves and all others similarly situated, appeal from the Pulaski County Circuit Court’s

order dismissing without prejudice their claims against appellees, the Board of Trustees of

the University of Arkansas System and Ed Fryar, Ph.D., Steve Cox, Tommy Boyer,

Sheffield Nelson, C.C. Gibson, Stephen Broughton, M.D., Kelly Eichler, Morril Harriman,

Mark Waldrip, and John Goodson, in their official capacities as Trustees (collectively, “the

Board”). For reversal, appellants argue that the circuit court erred by determining that they

lacked standing and that their claims were unripe and nonjusticiable. We affirm.

       In May 2019, appellants, as tenured faculty members employed by the University of

Arkansas System, filed suit in federal district court against the Board seeking declaratory and

injunctive relief based on alleged violations of both federal and Arkansas law. The complaint

asserted that on March 29, 2018, the Board adopted revisions to Policy 405.1 (“Revised

Policy”), which governs faculty promotion, tenure, and annual reviews. Appellants claimed

that when the Board passed the Revised Policy, it unilaterally and without the consent of

appellants or others in the class made material changes to tenured and tenure-track faculty

member’s contractual rights as employees and violated their constitutional rights.

Specifically, appellants complained about the changes that were made to the section defining

cause for termination. The complaint alleged violations of the United States Constitution’s

Contracts and Due-Process Clauses, as well as First Amendment and Academic Freedom

claims. Appellants also asserted state claims under the Arkansas Constitutions’ Contracts and

Free Communication Clauses and the Arkansas common law of contracts. The Board filed

a motion to dismiss the action, arguing that the state-law claims were barred by the Eleventh

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Amendment and sovereign immunity and that the remaining claims should be dismissed

based on lack of standing, unripeness, and failure to state a claim. Appellants conceded that

the state-law claims were prohibited by the Eleventh Amendment, and the district court

dismissed these claims on that basis. Palade v. Bd. of Trustees of the Univ. of Ark., No.

4:19CV379-JM (E.D. Ark. Mar. 16, 2020). With regard to the federal claims, the district

court agreed that the claims were not ripe and did not present a justiciable controversy and

granted the Board’s motion to dismiss. Id.1

       On June 2, 2020, appellants filed a class-action complaint in the Pulaski County

Circuit Court, reasserting the same state-law claims that were dismissed in the federal suit.

Appellants again focused their allegations on the Revised Policy’s changes to the section on

cause for termination of employment, and they attached the old and new versions of the

policy to the complaint. The original Policy 405.1, which was in effect from October 2,

2001, until March 29, 2018, contained the following definition of cause:

       “Cause” is defined as conduct which demonstrates that the faculty member lacks the
       ability or willingness to perform his or her duties or to fulfill his or her responsibilities
       to the University; examples of such conduct include (but are not limited to)
       incompetence, neglect of duty, intellectual dishonesty, and moral turpitude.

The Revised Policy adopted on March 29, 2018, however, stated:

       Cause is defined as conduct that demonstrates the faculty member lacks the
       willingness or ability to perform duties or responsibilities to the University, or that
       otherwise serves as a basis for disciplinary action. Pursuant to procedures set out
       herein or in other University or campus policies, a faculty member may be disciplined
       or dismissed for cause on grounds including, but not limited to, (1) unsatisfactory
       performance, consistent with the requirements of section V.A.9 below, concerning

       1
        Appellants appealed to the Eighth Circuit, which summarily affirmed the dismissal.
Palade v. Bd. of Trustees of the Univ. of Ark., 830 Fed. Appx. 171 (8th Cir. 2020). Appellants’
petition for a writ of certiorari with the United States Supreme Court was also denied on
October 4, 2021.

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       annual reviews; (2) professional dishonesty or plagiarism; (3) discrimination,
       including harassment or retaliation, prohibited by law or university policy; (4)
       unethical conduct related to fitness to engage in teaching, research, service/outreach
       and/or administration, or otherwise related to the faculty member’s employment or
       public employment; (5) misuse of appointment or authority to exploit others; (6)
       theft or intentional misuse of property; (7) incompetence or a mental incapacity that
       prevents a faculty member from fulfilling his or her job responsibilities; (8) job
       abandonment; (9) a pattern of conduct that is detrimental to the productive and
       efficient operation of the instructional or work environment; (10) refusal to perform
       reasonable duties; (11) threats or acts of violence or retaliatory conduct; or (12)
       violation of University policy, or state or federal law, substantially related to
       performance of faculty responsibilities or fitness to serve the University. Nothing in
       this provision is intended to inhibit expression that is protected under principles of
       academic freedom, or state or federal law.

       Appellants alleged that the Revised Policy, which by its terms applied to all faculty,

including those who had already obtained tenure or entered the tenure-track, made both

quantitative and qualitative changes to the definition of cause. Appellants claimed that by

adding the phrase “or that otherwise serves as a basis for disciplinary action,” as well as listing

additional types of conduct warranting discipline or dismissal, the Board both expanded the

number of grounds that justify termination and adopted entirely new types of grounds for

dismissal. Based on these changes, appellants asserted that the Revised Policy violated the

Contracts Clause contained in Article 2, Section 17 of the Arkansas Constitution by

substantially impairing the contractual relationship between the class and the Board without

a legitimate public purpose to justify the revisions; that the Revised Policy constituted an

impermissible modification of the Board’s contract with the class members without their

consent under the Arkansas common law of contracts; and that the Revised Policy violated

the class’s rights under the Free Communication Clause found in Article 2, Section 6 of the

Arkansas Constitution.

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       On July 20, 2020, the Board filed an answer to the complaint, as well as a motion

for judgment on the pleadings. In its motion, the Board asserted that it had amended its

policy on faculty tenure and promotion more than a dozen times during the last fifty years

and that all of the more recent revisions have expressly reserved the right to amend “any

portion” of the tenure policy “at any time in the future.” The Board indicated that the

Revised Policy addresses performance expectations and clarifies, rather than expands, its

conduct standards. According to the Board, it interpreted the phrase “otherwise constitutes

a basis for dismissal” in the Revised Policy as merely referring to the list of examples of

“cause,” and there was no basis for predicting that the University would take an

impermissibly expansive view of the various examples. In addition, the Board noted that

the revised definition of cause states that nothing in that provision is intended to inhibit

expression protected under principles of academic freedom or state or federal law, and a

separate section further guarantees academic freedom and the right to speak on matters of

public concern. The Board argued that appellants had not alleged any facts suggesting that

their current employment was in jeopardy, that they had been threatened with disciplinary

action under the Revised Policy, or that they had engaged in conduct violative of the

Revised Policy; nor had appellants made any non-conclusory allegations in their complaint

regarding plans to engage in conduct that would plausibly be prohibited by the Revised

Policy but allowed by the prior version. Thus, the Board claimed that appellants’ contract

and free speech claims were unripe and nonjusticiable and that appellants lacked standing.

The Board also argued that appellants had failed to plead facts demonstrating that an

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unconstitutional or illegal action had occurred, is about to occur, or has been threatened,

and therefore, the suit was also barred by sovereign immunity.

       Following a response by appellants and a reply by the Board, the Board filed a

supplemental motion to dismiss on August 4, 2021, alleging that appellants’ claims were also

barred by collateral estoppel based on the dismissal of their similar claims in federal court.

The circuit court held a hearing on the motions on August 30, 2021. On September 2,

2021, the circuit court entered an order granting the Board’s motion for judgment on the

pleadings and dismissing the complaint without prejudice. The court found that appellants

lacked standing and that their claims were unripe and nonjusticiable. The circuit court

stated that appellants “claims are speculative[,] and they have failed to demonstrate actual or

imminent injury or harm.” The court specifically noted that it did not consider text

messages or other evidence presented by counsel for the Board as proof that appellants’

conduct had not been restrained under the Revised Policy because these items were outside

the scope of the pleadings. The circuit court did not rule on the Board’s alternative grounds

for dismissal, such as sovereign immunity. Appellants filed a timely notice of appeal from

the circuit court’s order.

       On appeal, appellants argue that the circuit court erred by granting the Board’s

motion for judgment on the pleadings on the bases that appellants lacked standing and that

their claims were unripe and nonjusticiable. A motion for judgment on the pleadings is

appropriate if the pleadings show on their face that there is no merit to the suit. Monsanto

Co. v. Ark. State Plant Bd., 2021 Ark. 103, 622 S.W.3d 166. When reviewing a grant of

judgment on the pleadings, we view the facts alleged in the complaint as true and in the

                                              6
light most favorable to the party seeking relief. Id. We will affirm the circuit court’s decision

in the absence of an abuse of discretion. Id. Issues of law such as standing or justiciability,

however, are reviewed de novo on appeal. Baptist Health Sys. v. Rutledge, 2016 Ark. 121,

488 S.W.3d 507; Nelson v. Ark. Rural Med. Practice Loan & Scholarship Bd., 2011 Ark. 491,

385 S.W.3d 762.

       Appellants contend that they have standing to bring this action under the Declaratory

Judgment Act, Ark. Code Ann. §§ 16-111-101 et seq. (Repl. 2019). The purpose of the

declaratory-judgment statutory scheme is “to settle and to afford relief from uncertainty and

insecurity with respect to rights, status and other legal relations,” and it “is to be liberally

construed and administered.” Ark. Code Ann. § 16-111-112. Section 16-111-102 provides

that “[a]ny person interested under a . . . written contract or other writings constituting a

contract, or whose rights, status, or other legal relations are affected by a . . . contract . . .

may have determined any question of construction or validity arising under the . . . contract

. . . and obtain a declaration of rights, status or other legal relations thereunder.”

       We have held that the following elements must be established to obtain declaratory

relief: (1) a justiciable controversy; that is to say, a controversy in which a claim of right is

asserted against one who has an interest in contesting it; (2) the controversy must be between

persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal

interest in the controversy; in other words, a legally protectable interest; and (4) the issue

involved in the controversy must be ripe for judicial determination. Baptist Health, supra;

Nelson, supra. See also Ark. Code Ann. § 16-111-106 (stating that a court may refuse to

                                                7
enter a declaratory judgment where such judgment would not terminate the uncertainty or

controversy giving rise to the proceeding). As we explained in Nelson,

       [t]he Declaratory Judgment Statute is applicable only where there is a present actual
       controversy, and all interested persons are made parties, and only where justiciable
       issues are presented. It does not undertake to decide the legal effect of laws upon a
       state of facts which is future, contingent or uncertain. A declaratory judgment will
       not be granted unless the danger or dilemma of the plaintiff is present, not contingent
       on the happening of hypothetical future events; the prejudice to his position must be
       actual and genuine and not merely possible, speculative, contingent, or remote.

Id. at 12, 385 S.W.3d at 769.

       Appellants contend that they have established all of the elements necessary to be

entitled to declaratory relief. They assert that a justiciable controversy exists regarding the

validity of the Board’s unilateral modifications of the tenure and dismissal policy and its

retroactive application to appellants. In addition, appellants argue that the parties are

adverse, that they have a legally protectable interest in their tenure contracts, and that the

dispute is ripe for adjudication because the injury, i.e., the modification of their contract

without their consent, has already occurred. Appellants claim that it is not necessary for

them to wait until they are faced with an imminent threat of disciplinary action or

termination under the Revised Policy to bring this action and cite Jegley v. Picado, 349 Ark.

600, 80 S.W.3d 332 (2002), in support.

       In Jegley, the prosecutor argued that the plaintiffs’ suit challenging the

constitutionality of the sodomy statute was not justiciable because plaintiffs had shown no

credible threat of imminent prosecution. We rejected that argument, noting that we had

not always required prosecution or a specific threat of prosecution as a prerequisite for

challenging a statute. Id. Instead, because the plaintiffs claimed that they were presently

                                              8
engaged in the same type of conduct prohibited by the statute and intended to continue to

engage in that conduct, the State had refused to disavow enforcement of the statute, and

there had been previous prosecutions under that statute for public and nonconsensual

conduct, we determined that the plaintiffs were not without reason to fear prosecution and

were therefore entitled to bring their declaratory-judgment action. Id.

       We hold that Jegley is distinguishable from the situation in the present case, where

the harm alleged by appellants is uncertain, hypothetical, and speculative.           In their

complaint, appellants alleged violations of the Contracts Clause and the Arkansas common

law of contracts based upon their contention that the Board might, in the future, apply the

Revised Policy to unspecified conduct that could not have been the subject of disciplinary

action under the prior version of the policy. Appellants did not claim that they had engaged

in a specific type of conduct that would be included in the revised definition of cause; nor

did they claim that they intended to engage in such conduct. Appellants have also not

alleged that any other faculty members have been disciplined or dismissed based on actions

or speech that would not have been prohibited under the previous policy. Further, the

Board has asserted that the revisions to the definition of cause were intended only to clarify,

rather than expand, the type of behavior that would be cause for discipline or termination.

As the district court stated in the parties’ federal suit, “Plaintiffs’ allegations of the

University’s possible use of the Revised Policy to discipline or terminate a faculty member

for reasons not covered or beyond those allowed in the original policy are speculative.”

Palade, No. 4:19CV379-JM, at 6.

                                              9
       Appellants also cite Maytag Corp. v. Int’l Union, United Auto., Aerospace & Agric.

Implement Workers of Am. 687 F.3d 1076 (8th Cir. 2012), as a case where the Eighth Circuit

found that the plaintiffs had standing under similar circumstances. In Maytag, an employer

filed suit against a labor union and representatives of a putative class of retired employees,

seeking a declaratory judgment that the employer had the right to unilaterally modify

retirees’ health care benefits provided under a collective bargaining agreement. The Eighth

Circuit concluded that a case or controversy existed because the contractual dispute was

“real, substantial, and existing,” even though the case was filed before the employer had

given notice of the unilateral modifications. Id. at 1082. In addition, the Eighth Circuit

determined that the dispute was ripe for immediate judicial resolution because whether the

retiree benefits were vested turned on historical rather than hypothetical facts. Id. While

appellants contend that this case is persuasive authority, the Eighth Circuit’s decision to

affirm the district court’s dismissal based on a lack of ripeness in appellants’ federal suit,

which involved the same facts and similar claims as the present case, is more persuasive.

Appellants also relied on Maytag in the federal action; however, the district court

distinguished it, finding that “the policy changes here did not make changes to historically

disputed benefits, but instead changed definitional language which may or may not be

applied in the future in a manner different from the original policy definition or in a manner

which violates federal law.” Palade, No. 4:19CV379-JM, at 6. Thus, the circuit court did

not err by determining that appellants’ contract claims were nonjusticiable.

       Similarly, appellants’ claim pursuant to the Free Communication Clause of the

Arkansas Constitution also fails to meet the required elements for a declaratory judgment.

                                             10
Appellants alleged in their complaint that the Revised Policy greatly expands the ground for

termination and that the changes had a “serious impact on the Class members’ right to freely

communicate thoughts and opinions at his or her respective academic institution.” They

claimed that they had “already suffered a chilling effect after the passage of the Revised

Policy, including being extremely cautious of what is said in class and what topics and

thoughts may be discussed openly in class without fear of termination under the Revised

Policy.”   Appellants argue that they can establish standing based on the doctrine of

overbreadth, which they contend allows them to challenge the Revised Policy even though

they have not yet been threatened with discipline or termination based upon their speech.

       As the Board asserts, however, a plaintiff making an overbreadth claim still must

establish standing and an actual or impending injury. See, e.g., Advantage Media, LLC v.

City of Eden Prairie, 456 F.3d 793 (8th Cir. 2006) (stating that the overbreadth doctrine does

not relieve a plaintiff of the burden to show constitutional standing, and the plaintiff

therefore must demonstrate an actual, concrete, and particularized injury); Get Outdoors II,

LLC v. City of San Diego, 506 F.3d 886 (9th Cir. 2007) (holding that even when raising an

overbreadth claim, the plaintiff must show that he or she has suffered an injury in fact and

can satisfactorily frame the issues on behalf of non-parties). Here, while appellants claim

that their speech has been chilled, they have failed to include any factual allegations as to

what speech they have refrained from making or provide any examples of speech that they

have made in the past that they believe is not allowed under the Revised Policy. Nor have

they alleged that they or any other faculty member has been reprimanded pursuant to the

Revised Policy on the basis of their speech. Furthermore, the Revised Policy expressly

                                             11
provides that nothing in the section on cause is intended to inhibit expression protected by

principles of academic freedom or state or federal law, and the section on academic freedom

states that the threat of dismissal will not be used to restrain faculty members in their exercise

of academic freedom or constitutional rights.

       Appellants have made only vague, speculative, and hypothetical allegations with

regard to how their constitutional rights have been violated by the Revised Policy, and they

have failed to plead facts sufficient to establish an actual, present controversy. See Palade,

No. 4:19CV379-JM, at 7 (stating that the “[p]laintiffs’ allegations of possible, but not

threatened, enforcement of the Revised Policy in a manner that might but might not violate

federal law is insufficient to establish injury in fact” for purposes of plaintiffs’ First

Amendment challenge); see also Baptist Health, supra (stating that without a sufficient record

to show an actual, present controversy, we cannot opine on the merits of the constitutional

arguments raised in the declaratory-judgment suit). As we stated earlier, a declaratory

judgment does not undertake to decide the legal effect of laws upon a state of facts that is

future, contingent, or uncertain. Nelson, supra. Accordingly, the circuit court correctly

dismissed appellants’ free-speech claim based on a lack of a justiciable controversy.

       In addition to asserting that appellants’ claims are nonjusticiable, the Board argues

that we can also affirm the circuit court’s dismissal on the basis of collateral estoppel. The

Board contends that the dismissal of appellants’ federal claims operates as a bar to relitigating

the issue of justiciability in the circuit court. Although the circuit court did not rule on this

issue, the Board claims that we may affirm if the lower court reached the right result, albeit

                                               12
for the wrong reason. Because we affirm the dismissal on the basis relied upon on by the

circuit court, however, we do not address the Board’s alternative argument.

       Affirmed.

       WOMACK and WEBB, JJ., concur.

       SHAWN A. WOMACK, Justice, concurring. I agree with the majority’s disposition,

and I further agree with its conclusion on the merits that appellants failed to present a

justiciable controversy. However, I write separately to point out that article 5, section 20

of the Arkansas Constitution precludes this action against a State entity regardless of whether

a justiciable controversy exists. See Thurston v. League of Women Voters of Ark., 2022 Ark.

32, at 16, 639 S.W.3d 319, 327 (Womack, J., dissenting).

       Nevertheless, our decision in Arkansas Tech University v. Link, 341 Ark. 495, 17

S.W.3d 809 (2000), illustrates that appellants are not without recourse. There, a group of

tenured professors at Arkansas Tech University (ATU) filed a petition for declaratory

judgment against ATU and the members of its Board of Trustees, alleging that changes the

Board made to its employee health-insurance policy violated their vested contractual rights.

Id. at 498–99, 17 S.W.3d at 811. ATU and the Board appealed from the circuit court’s

denial of its motion to dismiss on sovereign-immunity grounds. Id. at 500, 17 S.W.3d at

812. On appeal, this court reversed and held that the petition was essentially a breach-of-

contract claim and should have been brought in the Arkansas Claims Commission. Id. at

502, 17 S.W.3d at 813.

       Similarly, appellants here filed a petition for declaratory judgment challenging

revisions the Board made to its tenure policy. Appellants alleged that when the Board

                                              13
adopted the Revised Policy, the Board “unilaterally and without the consent of Plaintiffs or

the others within the Class made material changes to tenured and tenure-track faculty

members’ contractual rights” and “violated the constitutional rights of Plaintiffs.”       In

essence, appellants’ allegation is a breach-of-contract claim and they, like the professors in

Link, are entitled to bring a complaint with the Claims Commission. See also Ark. Code

Ann. § 19-10-208(c).

       I respectfully concur.

       BARBARA W. WEBB, Justice, concurring. I agree with nearly all the concurring

opinion authored by Justice Womack except that I do not believe that article 5, section 20

of the Arkansas Constitution precludes this action against the State. Apart from the second

sentence of Justice Womack’s opinion, I agree wholeheartedly with his reasoning and

conclusions. I respectfully concur.

       Quattlebaum, Grooms & Tull, PLLC, by: Joseph W. Price II and Brittany S Ford, for

appellants.

       David A. Curran, Associate General Counsel, University of Arkansas System, for

appellees.

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