Supreme Court rejects sovereign immunity argument in illegal exaction court cost award | Arkansas Blog

Thursday, January 25, 2018

Supreme Court rejects sovereign immunity argument in illegal exaction court cost award

Posted By on Thu, Jan 25, 2018 at 10:52 AM

The Arkansas Supreme Court today refused a request by the state to reconsider its decision awarding court costs to lawyers in the case that successfully challenged spending of surplus state money, the General Improvement Fund, on local projects designated by legislators.

The state argued sovereign immunity. It didn't prevail, though the brief denial doesn't explain why.

The decision is of interest because the state raised the argument of sovereign immunity in seeking to avoid paying the court costs of $2,796.85.  The award is against the  director of the Department of Finance and Administration, state treasurer and state auditor.

Mike Wilson and John Ogles, successful lawyers in the case, had argued to the court that court precedent allows award of costs in illegal exaction lawsuits. Such lawsuits are protected under the Constitution's Section 16, 13, which says:

Any citizen of any county, city or town may institute suit, in behalf of himself and all others interested, to protect the inhabitants thereof against the enforcement of any illegal exactions whatever.
The Supreme Court granted costs Nov. 30 in a brief order from which Justices Rhonda Wood and Shawn Womack dissented. They were among the five justices who held last week that the state was immune from lawsuit in a minimum wage lawsuit. They also pointedly reversed precedent of more than 20 years in reasserting that the state Constitution says the state shall NEVER be made a defendant in its courts. This decision has spurred a rash of stories about cases either dismissed or likely to be dismissed because of the new precedent.

The state asked Dec. 28 for reconsideration of the award of costs in the GIF case. It cited cases against state agencies in which costs had been denied. Wilson and Ogles said, however, that these were not illegal exaction cases. Today, the state's motion was denied in a brief letter order. This time, Justice Jo Hart joined Wood and Womack in opposing the award of costs. Hart was a dissenter in the 5-2 decision last week that toughened the sovereign immunity exemption.

Circuit Judge Chris Piazza is still considering what to do about $1 million unconstitutionally distributed to regional planning districts for spending as legislators directed in the General Improvement Fund case. It is possible that a request for attorney fees (as opposed to costs) may yet arise when the case is at an end.

Does today's decision provide a hint that illegal exaction suits remain preserved? The minimum wage case pitted the Constitution against a statute that contained a legislative waiver of immunity. The Supreme Court said the legislature didn't have that power. The Supreme Court took pains, however, to note that, because a lower court hadn't addressed the issue, that it was NOT commenting on an additional argument in the minimum wage case. That argument was that constitutional guarantees of a jury trial to redress grievances or damages trumped the sovereign immunity provision.  Today's approval of court costs against an immunity argument perhaps is a signal that illegal exaction suits trump sovereign immunity. Without court commentary, it's impossible to say with certainty.

Never means never the Supreme Court said last week. Nonetheless, many questions remain, one reason a constitutional amendment campaign is underway to clarify what the Constitution means what courts have ruled.

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