Court Opinion

ID: 3150620
Source: CourtListenerOpinion
Date Created: 2015-10-29 16:03:12.287951+00
Date Added: 2024-06-11T11:55:31.494001
License: Public Domain

Cite as 2015 Ark. 392

           SUPREME COURT OF ARKANSAS
                           No.   CV-15-224

JOHNNY KEY, IN HIS OFFICIAL           Opinion Delivered   October 29, 2015
CAPACITY AS COMMISSIONER OF
THE ARKANSAS DEPARTMENT OF            APPEAL FROM THE PULASKI
EDUCATION; SAMUEL LEDBETTER,          COUNTY CIRCUIT COURT, FIFTH
IN HIS OFFICIAL CAPACITY AS           DIVISION
CHAIRMAN, ARKANSAS STATE              [NO. 60CV-15-654]
BOARD OF EDUCATION; TOYCE
NEWTON, IN HER OFFICIAL               HONORABLE WENDELL GRIFFEN,
CAPACITY AS VICE-CHAIRMAN,            JUDGE
ARKANSAS STATE BOARD OF
EDUCATION; JOE BLACK, IN HIS          REVERSED AND DISMISSED.
OFFICIAL CAPACITY AS MEMBER,
ARKANSAS STATE BOARD OF
EDUCATION; ALICE WILLIAMS
MAHONY, IN HER OFFICIAL
CAPACITY AS MEMBER, ARKANSAS
STATE BOARD OF EDUCATION;
MIREYA REITH, IN HER OFFICIAL
CAPACITY AS MEMBER ARKANSAS
STATE BOARD OF EDUCATION;
VICKI SAVIERS, IN HER OFFICIAL
CAPACITY AS MEMBER, ARKANSAS
STATE BOARD OF EDUCATION; JAY
BARTH, IN HIS OFFICIAL CAPACITY
AS MEMBER ARKANSAS STATE
BOARD OF EDUCATION; DIANE
ZOOK, IN HER OFFICIAL CAPACITY
AS MEMBER, ARKANSAS STATE
BOARD OF EDUCATION; AND KIM
DAVIS, IN HIS OFFICIAL CAPACITY
AS MEMBER, ARKANSAS STATE
BOARD OF EDUCATION
                      APPELLANTS

V.
                                       Cite as 2015 Ark. 392

DIANE CURRY, C.E. MCADOO, JIM
ROSS, AND DORIS L. PENDLETON
                      APPELLEES

                              ROBIN F. WYNNE, Associate Justice

       Appellants have filed an interlocutory appeal pursuant to Arkansas Rule of Appellate

Procedure–Civ. 2(a)(10) (2015) in which they challenge the Pulaski County Circuit Court’s

denial of their motion to dismiss, on grounds of sovereign immunity, appellees’ complaint for

declaratory judgment, writ of mandamus, writ of prohibition, and injunctive relief. Because

this case involves the interpretation or construction of the Constitution of Arkansas, our

jurisdiction is pursuant to Arkansas Supreme Court Rule 1-2(a)(1) (2015). We reverse the

order of the circuit court and dismiss appellees’ complaint.

       In May 2014, the Arkansas Department of Education (ADE) notified the Little Rock

School District (District) that six schools within the District met the criteria for being classified

in academic distress. The list included one elementary school, two middle schools, and three

high schools. In July 2014, the Arkansas State Board of Education (State Board) classified the

schools as being in academic distress. On January 28, 2015, the State Board voted at a public

meeting to retain the District superintendent on an interim basis, immediately remove all

members of the District’s board of directors, and direct the commissioner of education

(Commissioner) to assume the authority of the Board of Directors for the day-to-day

governance of the District.

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       On February 24, 2015, appellees–three former members of the District board of

directors and a parent whose children attend school in the District–filed a first amended and

substituted, verified complaint for declaratory judgment, writ of mandamus, writ of

prohibition, and injunctive relief. In the complaint, appellees alleged that the actions of the

State Board were unconstitutional and in excess of that body’s statutory authority. They also

alleged that the actions were ultra vires, arbitrary, capricious, and wantonly injurious.

       Appellants filed a motion to dismiss on March 16, 2015, on the ground that the action

was barred by sovereign immunity. The trial court entered an order on March 17, 2015, in

which it denied the motion to dismiss. This interlocutory appeal followed.

       While an appeal may typically not be taken from an order denying a motion to dismiss,

such an appeal may be taken from a denial under Arkansas Rule of Appellate Procedure–

Civil 2(a)(10), when the motion is based on the defense of sovereign immunity. When

reviewing a trial court’s decision on a motion to dismiss, we treat as true the facts alleged in

the complaint and view them in the light most favorable to the plaintiff. Hanks v. Sneed, 366
Ark. 371, 235 S.W.3d 883 (2006). In doing so, we liberally construe the facts in the plaintiff’s

favor. See id. A complaint must state facts, not mere conclusions, in order to entitle the

pleader to relief. See id.

       Appellants assert on appeal, as they did below, that the complaint is barred by sovereign

immunity. The defense of sovereign immunity arises from article 5, section 20 of the

Arkansas Constitution: “The State of Arkansas shall never be made a defendant in any of her

courts.” Sovereign immunity is jurisdictional immunity from suit, and jurisdiction must be

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determined entirely from the pleadings. Fitzgiven v. Dorey, 2013 Ark. 346, 429 S.W.3d 234.

In determining whether the doctrine of sovereign immunity applies, the court should

determine if a judgment for the plaintiff will operate to control the action of the State or

subject it to liability. Id. If so, the suit is one against the State and is barred by the doctrine

of sovereign immunity. Id.

       This court has recognized exceptions to the defense of sovereign immunity. One of

these is that an agency may be enjoined if it can be shown that the agency’s action is ultra

vires or outside the authority of the agency. Fitzgiven, supra. A state agency may also be

enjoined from acting arbitrarily, capriciously, in bad faith, or in a wantonly injurious manner.

Id.

       In their complaint, appellees requested (1) that the trial court enter an order declaring

the acts of the State Board to be arbitrary, capricious, in bad faith, wanton, ultra vires, and

unconstitutional; (2) issue a writ of mandamus and writ of prohibition ordering appellants to

return control of the District to the District’s board of directors; (3) grant a temporary

restraining order or preliminary injunction enjoining appellants from operating the District,

in the event immediate control was not returned to the board of directors; (4) order appellants

to provide a clear statement of the reasons for the takeover and the steps necessary to return

control to the board of directors; and (5) award them attorney’s fees and costs. The parties

do not dispute that a judgment in favor of appellees on their complaint would operate to

control the actions of the State Board, triggering the application of the defense of sovereign

immunity.

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       What the parties do dispute is whether the facts pled in the complaint demonstrate that

an exception to the application of sovereign immunity applies. In the complaint, appellees

allege that the actions of the State Board were ultra vires, in excess of its statutory authority,

and in violation of the Arkansas Constitution. Specifically, appellees allege that the actions

of the State Board are in excess of the authority granted to it under the Arkansas

Comprehensive Testing, Assessment, and Accountability Program Act (ACTAAPA), codified

at Arkansas Code Annotated sections 6-15-401 to -441 (Repl. 2013 & Supp. 2015). They

further allege that, to the extent Arkansas Code Annotated section 6-15-430 (Repl. 2013)

allows the State Board to remove a school district’s board of directors, that provision violates

article 14, section 3 of the Arkansas Constitution.

       The supervision of public schools, and the execution of the laws regulating the same,

shall be vested in and confided to, such officers as may be provided for by the General

Assembly. Ark. Const. art. 14, § 4. Under the ACTAAPA, the general assembly has tasked

the State Board with establishing rules as may be necessary to allow the Department of

Education to implement a program for identifying, evaluating, assisting, and addressing public

schools or public school districts failing to meet established levels of academic achievement

on the state-mandated augmented, criterion-referenced, or norm-referenced assessments. Ark.

Code Ann. § 6-15-424 (Repl. 2013). A public school or school district that is identified by

the Department of Education as failing to meet established levels of academic achievement

shall be classified as being in (1) school improvement, (2) academic distress, or (3) both. Ark.

Code Ann. § 6-15-425 (Repl. 2013). The school district board president and superintendent

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of a school district in which the school district or a public school is identified by the

Department of Education as being in academic distress shall be notified in writing and shall

have a right of appeal to the State Board. Ark. Code Ann. § 6-15-428(a) (Supp. 2015). In

the present case, ADE notified the District that the six schools had been determined to be in

academic distress in a letter dated January 28, 2015. It is undisputed that the District did not

appeal this determination to the State Board.

       Arkansas Code Annotated section 6-15-430(b) (Supp. 2015) sets out the actions the

State Board may take if a public school is classified as being in academic distress. Under that

section, the State Board may take one or more of the actions outlined in section 6-15-430(a).

Under section 6-15-430(a), the State Board may require the school district to operate without

a board of directors under the supervision of the superintendent or an individual or panel

appointed by the Commissioner and, in the absence of a board of directors, direct the

Commissioner to assume all authority of the board of directors as may be necessary for the

day-to-day governance of the school district. Ark. Code Ann. § 6-15-430(a)(2), (6). In this

case, as pled in the complaint, the State Board removed the board of directors, left the then-

current superintendent in place on an interim basis, and directed the Commissioner to assume

the authority of the board of directors and manage the day-to-day governance of the school

district. The State Board operated within its express statutory authority in taking these

actions.

       Appellees assert in their responsive brief that they pled noncompliance with Arkansas

Code Annotated section 6-13-112(a), which they maintain establishes that the State Board

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acted illegally. The trial court listed this in its order as being among the grounds pled

regarding ultra vires conduct by the State Board. Arkansas Code Annotated section 6-13-

112(a) (Repl. 2013) requires the Commissioner to provide to specified members of the

general assembly within ten days of the assumption of authority over a district a clear

statement of the reasons the district has been placed under the authority of the State Board

or the Commissioner and a clear statement of the steps necessary for the school district to

remove itself from that authority. Appellees allege in the complaint that this was not done

in the instant case. Taking that fact as true, as we are required to do, it is insufficient to

demonstrate an exception to sovereign immunity for the purposes of the complaint at issue.

The complaint filed by appellees challenges the authority of the State Board to take over a

district. Section 6-13-112(a) concerns actions required to be taken after the State Board

exercises that authority. Therefore, assuming appellees could prove a violation of section 6-

13-112(a), this would have absolutely no bearing on whether the State Board was authorized

to assume control of the district. This cannot serve as a basis to overcome sovereign

immunity in this case.

       Appellees also argue in their brief that Arkansas Code Annotated section 6-15-430

constitutes an unlawful delegation of power by the legislature to an administrative body. This

allegation was not pled in the complaint.1        As noted above, sovereign immunity is

       1
         Appellees do allege in the complaint that there are no standards for taking over a
district. However, they do not allege that this constitutes an illegal delegation of authority
by the general assembly.

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jurisdictional immunity from suit, and jurisdiction is to be determined solely from the

pleadings. Fitzgiven, 2013 Ark. 346, 429 S.W.3d 234. Therefore, this argument likewise

cannot be considered as a basis for establishing an exception to sovereign immunity in this

case.

        Appellees alleged in their complaint that, to the extent the State Board was operating

within its statutory authority, the statute granting that authority, section 6-15-430, violates

article 14, section 3 of the Arkansas Constitution.2 Subsection (c)(1) of article 14, section 3

authorizes school districts to levy, by vote of the qualified electorate, an annual ad valorem

property tax and requires the board of directors of each school district to prepare, approve,

and make public no less than sixty days before the election a proposed budget of expenditures

and a tax levy necessary to provide funds for the expenditures and to submit the tax at the

annual school election or at some other time as may be provided by law. Appellees allege in

their complaint that this makes school boards of directors constitutional entities that may not

be dissolved pursuant to statute. They are mistaken.

        Appellees note in their complaint that school boards are statutory entities and that such

entities may be dissolved by the general assembly. Robinson v. White, 26 Ark. 139 (1870).

The fact that school boards of directors are mentioned in the state constitution is not sufficient

        2
        Appellees also argued at oral argument before this court that section 6-15-430
violates article 2, section 12 of the Arkansas Constitution, which provides that “[n]o
power of suspending or setting aside the laws of the State, shall ever be exercised, except
by the General Assembly.” This contention was not pled in the complaint; therefore, it
cannot be considered in determining whether an exception to the doctrine of sovereign
immunity was established in the complaint.

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to convert them to constitutional entities, in light of the fact that Amendment 33 to the

Arkansas Constitution states that boards and commissions charged with the management or

control of all charitable, penal, or correctional institutions or institutions of higher learning

cannot be abolished unless the institution is abolished or consolidated with another institution.

Ark. Const. amend. 33, § 2. School boards of directors are not included in this group. Also,

when we read article 14, section 3(c)(1) harmoniously with article 14, section 4, we conclude

that whatever individual or entity the legislature allows to be placed in the stead of a school

board of directors can perform the tasks required under subsection 3(c)(1). Therefore, there

is no showing from the facts pled in the complaint that section 6-15-430 is unconstitutional,

to establish an exception to sovereign immunity.

       Appellees further alleged in the complaint that the actions of the State Board were

arbitrary, capricious, in bad faith, and will cause wanton injury. They allege instances in

which the State Board did not take over districts with schools in academic distress as well as

instances they assert demonstrate that the state’s assumption of control over a district was not

beneficial to that district. As recited by the trial court in its order, the complaint also alleged

the following with regard to the State Board’s decision being arbitrary, capricious, in bad faith,

and wantonly injurious: (1) the standards established under Arkansas law do not allow the

State Board to take control of a school district that is not in academic distress when that action

is not necessary to remedy schools in academic distress; (2) there are no established criteria for

taking over a district in which the great majority of the schools are not in academic distress,

and it has never been done before; (3) ADE staff has said that the District is implementing the

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right kinds of innovations in the six schools with a sense of urgency; (4) the fact that the

decision was arbitrary, capricious, and wanton is evidenced by the decision to retain the

superintendent; and (5) it does not appear that the ADE has developed any plan that would

significantly change the improvement efforts currently underway in the six schools.

       Most of the allegations recited above are not factual; they are instead largely legal

conclusions and speculation. “We treat only the facts alleged in a complaint as true for

purposes of a motion to dismiss but not a party’s theories, speculation, or statutory

interpretation.” Sanford v. Walther, 2015 Ark. 285, at 3, 467 S.W.3d 139 (emphasis added).

To the extent the assertions contain actual allegations of fact, those allegations are not

sufficient to establish that the State Board acted arbitrarily, capriciously, in bad faith, or in a

wantonly injurious manner. Essentially, appellees pled that the decision of the State Board

was arbitrary, capricious, in bad faith, and wantonly injurious because it was not necessary for

the State Board to take the action it chose, given the number of different options available

under the applicable statute. In Fitzgiven, 2013 Ark. 346, 429 S.W.3d 234, the plaintiffs

alleged in their complaints that actions taken by the ADE in the process of assuming control

of a school district in fiscal distress were arbitrary, capricious, and in bad faith because that

agency could have taken other, less extreme actions. The plaintiffs, in effect, pled, as appellees

did here, that the actions of the ADE fell within the exception to sovereign immunity because

they were unnecessary. This court held that the allegations did not establish a sovereign-

immunity exception. Here, we likewise hold that appellees failed to establish in their

complaint that the State Board acted arbitrarily, capriciously, in bad faith, or in a wantonly

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injurious manner in assuming control of the District.

       Reversed and dismissed.

       HART, J., concurs.

       I agree that this case must be reversed, but I write separately to state my rationale for

rejecting the appellees’ argument that appellants’ action in taking control of the Little Rock

School District was arbitrary and capricious. In my view, the general assembly has, through

Arkansas Code Annotated section 6-15-428 (Repl. 2013), clearly stated that such a challenge

must first be appealed to the State Board of Education, and then, if necessary, to the Pulaski

County Circuit Court under the Arkansas Administrative Procedure Act, Arkansas Code

Annotated sections 25-15-201 et seq. It is not disputed that the Little Rock School District

failed to avail itself of this avenue for challenging the appellees’ actions. Accordingly, this

argument should be barred for failure to exhaust the administrative and legal remedies

specified by statute.

       Lori Freno, Jeremy Lasiter, and Kendra Clay, Arkansas Department of Education, for

appellant.

       Willard Proctor, Jr., Marion A. Humphrey, and Rickey Hicks, for appellees.

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