The Arkansas Lottery Commission is entitled to immunity from a lawsuit filed by a company alleging that the lottery infringed on years-old trademarks in its advertising, the Arkansas Supreme Court ruled Thursday.
In a 4-3 decision, the court found that a Pulaski County circuit judge wrongly denied the commission’s motion to dismiss the lawsuit by Alpha Marketing.
Writing for the majority, Justice Jo Hart stated, “We hold that the Commission is an entity of the State entitled to the defense of sovereign immunity. Further, Alpha’s claims for injunctive, monetary, and declaratory relief would operate to control the actions of the State and are therefore barred by the defense of sovereign immunity.”
Chief Justice Jim Hannah, Justice Karen Baker and Special Justice J. Shepherd Russell III, who was appointed to replace Justice Cliff Hoofman in the case, joined Hart in the majority.
Justices Donald Corbin, Paul Danielson and Courtney Hudson Goodson dissented.
Alpha Marketing filed the lawsuit in March 2010, after it received a cease-and-desist letter from the state attorney general’s office alleging deceptive practices and instructing the company to stop using the phrases “Arkansas Lottery,” “Arkansas Lotto” and “Lottery Arkansas.”
The state rescinded the warning three months after the letter was sent and never took action against the company.
In its lawsuit, the company said it had been using the terms “Arkansas Lottery”and “Arkansas Lotto” in its business of “advertising, promotion, and sales of goods via radio, internet, and print media throughout the state of Arkansas” since 1994 and registered trademarks for the terms in 2007.
The company also reported using the phrase “Lottery Arkansas” since 2007 and registering the trademark in 2009.
The Arkansas Scholarship Lottery was authorized by passage of Amendment 87 to the Arkansas Constitution in 2008 and established by the Legislature in 2009.
The commission sought a dismissal of the lawsuit, but Pulaski County Circuit Judge Wendell Griffen denied its motion, stating he was “unpersuaded that Alpha Marketing has not asserted a claim for trademark infringement.”
The Supreme Court remanded the case to the lower court in January 2012 after finding Griffen did not rule on whether the commission had sovereign immunity in his final order.
In May 2012, Griffen specifically denied dismissal of the case on the basis of sovereign immunity, and the commission appealed the ruling.
Hart wrote in the 15-pagemajority opinion that the company failed to present facts that would have established exceptions to the doctrine of sovereign immunity, including the commission’s waiving of entitlement to immunity.
Goodson and Danielson wrote in separate dissenting opinions that the majority was wrong in ruling that the commission did not waive its entitlement to sovereign immunity, because it sought to invalidate the trademarks first.
“By taking this position, the Commission manifestly indicated that it was ready, willing, and eager to litigate the validity of Alpha Marketing’s trademarks with the goal of cancelling their registrations. … Yet, the majority holds that the Commission’s waiver evaporated, as if by magic, because the Commission dropped the request for specific relief” in an amended complaint, Goodson wrote.
In other business, the court dismissed an appeal by the University of Arkansas for Medical Sciences that sought immunity from property taxes in Pulaski County.
Baker wrote in the opinion that the court did not have jurisdiction to hear the appeal because UAMS had not sought an injunction in circuit court to prevent the county from collecting the taxes.
In July 2011, the county informed the university of its intent to assess and collect taxes on the property. The university filed a tax-exemption application with the assessor’s office, but the application was denied.
The university appealed the decision to the Pulaski County Circuit Court, which upheld the denial on Jan. 9, 2012.
On Feb. 8, the university again appealed the decision to the Circuit Court and filed a motion for summary judgment on July 6, 2012.
The Circuit Court denied the university’s motion for summary judgment and a subsequent motion to reconsider in August 2012. The university then appealed to the state Supreme Court.
The court found it did not have jurisdiction to rule on whether the Circuit Court erred by denying the motions because such an appeal is allowed only if an injunction is “granted, continued, modified, refused, or dissolved, or by which an application to dissolve or modify an injunction is refused.”
Front Section, Pages 1 on 05/31/2013