Ruling boosts state agencies' suit immunity

Judge says high court case limits law, voids authority

Provisions of the open-government law that give Arkansas courts the authority to review decisions made by state regulators are now unconstitutional under Thursday's state Supreme Court ruling that establishes almost complete immunity from lawsuit for state agencies, Pulaski County Circuit Judge Tim Fox ruled on Monday.

Fox's decision, which has the immediate effect of voiding the regulatory authority of the Arkansas Oil and Gas Commission, came as he sided with state lawyers in throwing out an appeal of a commission ruling challenged in court by some property owners in Cleburne County.

Shane Khoury, the commission's deputy director and general counsel, invoked the 5-day-old Arkansas Supreme Court decision as grounds for the judge to dismiss the owners' lawsuit against his agency.

In that 5-2 Supreme Court ruling, the justices found that sovereign immunity completely shields state agencies from being sued in circuit court unless there's proof that the agency is illegally exceeding its authority. The finding does not preclude federal lawsuits.

Khoury cited the language from the state constitution that the Supreme Court ruled was absolute: "The State of Arkansas shall never be made defendant in any of her courts." The court ruled that legislators have no authority to waive the state's immunity when they enact laws.

In dismissing the property owners' appeal, a dispute about royalties, Fox simultaneously found that the Supreme Court decision almost completely invalidates the administrative adjudication provisions of the Administrative Procedure Act.

The law, Arkansas Code 25-15-201, was written to allow anyone claiming to be injured by the effects of state regulation to challenge that regulation in circuit court.

In announcing his conclusions on Monday, Fox said he's been reviewing and researching the Supreme Court decision since it was released last week. He said he's read the decision and the dissenting opinion at least five times to prepare because, under state law, most agency appeals end up being filed in Pulaski County.

Court records show 93 agency appeals were filed in Pulaski County Circuit Court in 2017, 84 in 2016, 77 in 2015 and 84 in 2014.

Agencies that have faced court challenges under the procedures law include the state Department of Human Services, the Capitol Zoning District Commission, the state Department of Correction, the Towing and Recovery Board, the Department of Finance and Administration and the Arkansas Teacher Retirement System.

Not every agency appeal invokes the procedures act. Some appeals are based on similar statutes that now appear invalid in the wake of the Supreme Court decision.

Metro on 01/23/2018

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