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The full case caption appears at the end of this opinion. The appellees, who are employees of Arkansas Tech University (“ATU”), filed this action in the Chancery Courtof Pope County against ATU, the president of ATU, and the members of its Board of Trustees. At issue in thisinterlocutory appeal by ATU and the Board is the trial court’s denial of their motion to dismiss appellees’second amended petition for declaratory judgment and injunction. Specifically, ATU and the Board argue onappeal that appellees are barred from filing this suit against the State by the doctrine of sovereignimmunity; that appellees’ claims against a state agency and state officials are solely for breach of contractand, therefore, should be brought before the Arkansas Claims Commission; and that appellees have not pledfacts sufficient to state a claim under any recognized exception to the sovereign-immunity doctrine. We holdthat the trial court should have dismissed appellees’ second amended petition because it fails to state aclaim upon which relief can be granted. Beginning in the 1960s, ATU provided its employees who had reached the age of fifty-five and who had workedat the university for twenty years with the ability to retire and receive health insurance for the rest oftheir lives, with ATU bearing the full cost of that insurance. This unwritten policy was never adopted by theBoard of Trustees; nor was it included in any written contract or state statute. When the cost of healthinsurance began to increase dramatically in 1993, ATU began to reconsider its policy of providing healthinsurance to its eligible retirees at no cost to them. A presidential task force was created to study theissue, and in June 1997, Dr. Robert Brown, ATU President, presented a report on health insurance to the Boardof Trustees. He presented the Board with four possible options regarding post-retirement health-insurancebenefits. The Board voted to (1) let existing eligible retirees maintain their lifetime health-insurancecoverage, with ATU bearing the full cost; (2) give employees age fifty-five or older who have served ATU forat least twenty years the option of retiring by July 1, 1998, in order to receive the same health-insurancebenefits as current retirees; and (3) give employees not yet meeting the fifty-five/twenty criteria theability to retire upon reaching age sixty after they have served ATU for at least ten years, at which timethe same health-insurance benefits given to current retirees would be provided by ATU until those retireesbecome eligible for Medicare. After the Board adopted these changes, this lawsuit was filed. The original plaintiffs below, the appellees on appeal, were seven tenured ATU professors. Three of thoseplaintiffs satisfied the fifty-five/twenty requirement. The appellees filed a petition for declaratoryjudgment on December 29, 1997, in which they alleged that ATU had contractually obligated itself to providethe lifetime health-insurance benefit to those retirees meeting the fifty-five/twenty criteria at no cost tothe retirees, and that the benefit was an essential term of the parties’ employment agreement. Appellees alsoalleged that the health-insurance benefit was deferred compensation in which they had a “vested contractright” or a “contractual property right,” and that the Board’s action was “a taking of plaintiff’s vestedproperty rights and a breach of contract.” In count one of the petition, the appellees asked the trial courtto “determine the actions of Defendants constitute a breach of the parties’ employment agreements[.]” Incount two, the appellees asked the court to enter a preliminary injunction to protect a vested contractright. In count three, they asked the court to find ATU’s actions actionable under 42 U.S.C. � 1983; and, incount four, they asked for attorney’s fees and costs pursuant to 42 U.S.C. � 1988 and Ark. Code Ann. �16-22-308. ATU and the Board moved to dismiss, and argued that the trial court was without subject-matter jurisdictionbecause the appellees’ claim is for breach of contract, which, under the doctrine of sovereign immunity, iscognizable solely in the Arkansas Claims Commission. The appellees responded by arguingthat, regardless ofthe sovereign-immunity doctrine, the State could still be enjoined by a court of equity when the actions ofthe State are illegal, unconstitutional, ultra vires, in bad faith, or arbitrary. They also argued that 42U.S.C. � 1983 authorizes the court to enjoin state agencies and officers from depriving people of theirconstitutional rights. Furthermore, appellees argued that their lawsuit was not for breach of contract, butsought declaratory judgment to determine the parties’ contract rights and an injunction to prohibit anunconstitutional taking of property rights. In support of these arguments, the appellees relied on the caseof Jones v. Cheney, 253 Ark. 926, 489 S.W.2d 785 (1973). ATU replied that sovereign immunity was nonethelessa bar to the action because injunctive relief was not necessary to the claim, and the appellees had not pledspecific facts showing bad faith, ultra vires acts, or unconstitutionality sufficient to waive sovereignimmunity. After a hearing, the trial court dismissed the members of the Board in their individual capacities,but refused to dismiss ATU and the board members in their official capacities based on certain exceptions tothe sovereign-immunity doctrine established by this court in the case of Toan v. Falbo, 268 Ark. 337, 595S.W.2d 936 (1980), and based on the provisions of 42 U.S.C. � 1983, that authorize state courts to enjoinstate agencies and officers from depriving people of constitutional rights. On January 30, 1998, ATU and theBoard filed an answer in which they again argued that the trial court was without jurisdiction andalleged theaffirmative defense of sovereign immunity, as set forth in Article 5, section 20, of the ArkansasConstitution. In June of 1998, Judge Swindell recused from the case, whereupon Judge Brantley was assigned to preside overthe case. ATU and the Board then moved for summary judgment, contending that 42 U.S.C. � 1983 wasinapplicable and sovereign immunity deprived the trial court of jurisdiction because the claim by theappellees was in essence a contract dispute. The trial court granted ATU and the Board summary judgment onthe 42 U.S.C. � 1983 claim, but denied summary judgment on the issue of whether the appellees have a propertyinterest or right in the post-retirement health-insurance benefit. While the motion for summary judgment was pending, the appellees filed two amended petitions for declaratoryjudgment. The first amended petition added a plaintiff, and also added Robert Brown, president of ATU, as adefendant. The second amended petition added allegations that ATU and the Board had acted ultra vires andwithout legitimate authority, as well as arbitrarily and capriciously, in depriving the appellees of a vestedproperty right which existed pursuant to contractual agreements. ATU and the Board moved to dismiss the firstand second amended petitions and once again argued the doctrine of sovereign immunity. On May 10, 1999, after conducting a hearing, the trial court issued its order on the motion to dismissappellees’ second amended petition for declaratory judgment. The trial courtdismissed the suit againstPresident Brown and found that ATU and the Board were, for purposes of sovereign immunity, the State ofArkansas. The trial court also ruled that the second amended petition failed to state a claim that theactions of ATU and the Board were ultra vires, arbitrary, or capricious. However, after noting the appellees’reliance on the case of Jones v. Cheney, the trial court ruled that the second amended petition did “allege aclaim that [the appellees] had a vested property right to the insurance benefits,” and that “the action ofthe Board of Trustees deprived them of this right in violation of the Constitutions of Arkansas and theUnited States.” Based on this ruling, the trial court refused to dismiss the second amended petition onsovereign-immunity grounds. From the trial court’s denial of their motion to dismiss the second amendedpetition for declaratory judgment, ATU and the Board bring this interlocutory appeal pursuant to Ark. R. App.P–Civil 2(a)(10). Our jurisdiction is invoked pursuant to Ark. Sup. Ct. R. 1-2(a)(1). In this appeal, ATU and the Board contend that the constitutional doctrine of sovereign immunity bars theappellees from filing their petition for declaratory judgment and injunction in any state court. In reviewingthe trial court’s decision on a motion to dismiss under Ark. R. Civ. P. 12(b)(6), we treat the facts allegedin the complaint as true and view them in the light most favorable to the party who filed the complaint.Grine v. Board of Trustees, 338 Ark. 791, 2 S.W.3d 54 (1999). In testing the sufficiency of the complaint ona motion to dismiss,all reasonable inferences must be resolved in favor of the complaint, and the pleadingsare to be liberally construed. Id. However, our rules require fact pleading, and a complaint must statefacts, nor mere conclusions, in order to entitle the pleader to relief. Id. Furthermore, sovereign immunityis jurisdictional immunity from suit, and jurisdiction must be determined entirely from the pleadings.Department of Human Servs. v. Crunkleton, 303 Ark. 21, 791 S.W.2d 704 (1990). The issue we must decide inthis appeal is whether the doctrine of sovereign immunity applies to bar the appellees’ only remaining claimthat ATU and the Board unconstitutionally deprived them of a vested property right in health-insurancebenefits that arose from purported contractual agreements. In the recent case of Grine v. Board of Trustees, we summarized our rules regarding the doctrine of sovereignimmunity:
Sovereign immunity for the State of Arkansas arises from express constitutional declaration. Article5, section 20, of the State Constitution provides: `The State of Arkansas shall never be made adefendant in any of her courts.’ Suits against the State are expressly forbidden by this provision.Beaulieu v. Gray, 288 Ark. 395, 705 S.W.2d 880 (1986); Page v. McKinley, 196 Ark. 331, 118 S.W.2d235 (1938). As we stated long ago in Pitock v. State, 91 Ark. 527, 535 (1909), `[A] sovereign Statecannot be sued except by its own consent; and such consent is expressly withheld by the Constitutionof this State.’ Recently, we reiterated this express prohibition in Brown v. Arkansas State HVACRLic. Bd., 336 Ark. 34, 984 S.W.2d 402 (1999). In Brown, we pointed out that sovereign immunity isjurisdictional immunity from suit, and where the pleadings show the action is one against the State,the trial court acquires no jurisdiction. However, unlike subject-matter jurisdiction,sovereignimmunity can be waived. Newton v. Etoch, 332 Ark. 325, 331, 965 S.W.2d 96 (1998); State v.Tedder, 326 Ark. 495, 932 S.W.2d 755 (1996); Cross v. Arkansas Livestock & Poultry Comm’n, 328 Ark.255, 943 S.W.2d 230 (1997); Department of Human Servs. v. Crunkleton, 303 Ark. 21, 791 S.W.2d 704(1990). The doctrine makes no distinction between actions in equity and actions at law. Id.

Grine v. Board of Trustees, 338 Ark. at 796-97, 2 S.W.3d at 58. Furthermore, a suit against a state officialin his or her official capacity is not a suit against that person, but rather is a suit against thatofficial’s office. Brown v. Arkansas State HVACR Lic. Bd., 336 Ark. 34, 984 S.W.2d 402 (1999). A suit againstthe board of trustees of a state university is a suit against the State, and is barred by the doctrine ofsovereign immunity. State Comm’r of Labor v. University of Ark., 241 Ark. 399, 407 S.W.2d 916 (1966). Specifically, ATU and the Board argue that this suit by the appellees is essentially a breach-of-contractclaim and, thus, is barred. They are correct that breach-of-contract claims must be heard by the ArkansasClaims Commission. Hanley v. Arkansas State Claims Comm’n., 333 Ark. 159, 970 S.W.2d 198 (1998). Theappellees counter this argument by suggesting that their suit is not for breach of contract, but is merely apetition for declaratory judgment. According to our case law, however, such a distinction is not necessarilydeterminative. Rather, the decisive issue is whether the State’s financial obligations would increase if theplaintiffs prevail in their suit. Commission on Judicial Discipline and Disability v. Digby, 303 Ark. 24,792S.W.2d 594 (1990). If so, the action is barred by the doctrine of sovereign immunity. Id. As the rule hasbeen more commonly stated, if a judgment for the plaintiff will operate to control the action of the State orsubject it to liability, the suit is one against the State and is barred by the doctrine of sovereignimmunity. Grine v. Board of Trustees, supra.; Fireman’s Ins. Co. v. Arkansas State Claims Comm’n, 301 Ark.451, 784 S.W.2d 771 (1990); Page v. McKinley, 196 Ark. 331, 118 S.W.2d 235 (1938). In the present case, the appellees petitioned the chancery court for declaratory judgment and an injunction.In their prayer for declaratory judgment, the appellees asked the chancery court to determine that theactions of ATU and the Board constituted a breach of their employment agreements. This is essentially abreach-of-contract claim that should be brought in the Arkansas Claims Commission. Additionally, theappellees asked the court to enter “an injunction regarding further implementation of the new policy and [to]reinstate [appellees'] contract rights.” If the appellees were to prevail on their claim for an injunctionand reinstatement of their “contract rights” to lifetime health insurance upon retirement at no cost to them,ATU and the State of Arkansas would be required to expend money to provide such insurance. Because theState’s financial obligations would increase, the suit would be barred by the doctrine of sovereign immunityunless an exception to the doctrine of sovereign immunity is applicable. The appellees argue that they properly pled certainexceptions to the doctrine of sovereign immunity in theirsecond amended petition. One of those exceptions is that equity has jurisdiction to enjoin or restrain Stateofficials or agencies from acts which are ultra vires, in bad faith, or arbitrary and capricious. Grine v.Board of Trustees, supra; Villines v. Lee, 321 Ark. 405, 902 S.W.2d 233 (1995); Cammack v. Chalmers, 284 Ark.161, 680 S.W.2d 689 (1984); Toan v. Falbo, 268 Ark. 337, 595 S.W.2d 936 (1980); Game and Fish Comm’n v.Eubank, 256 Ark. 930, 512 S.W.2d 540 (1974); Harkey v. Matthews, 243 Ark. 775, 422 S.W.2d 410 (1967). Thetrial court, in ruling on the motion to dismiss, found that this exception was inapplicable. Specifically,the trial court found that appellees’ second amended petition failed to state a claim when it alleged thatthe actions of ATU and the Board were ultra vires, arbitrary, and capricious. [FOOTNOTE 1] Thus, the trial court grantedthe appellants’ motion to dismiss in part. [FOOTNOTE 2] The trial court did, however, refuse to dismiss the second amended petition with respect to the appellees’claims that ATU and the Board violated Article 1, section 10, of the United States Constitution and Article2, section 17, of the Arkansas Constitution regarding impairment of contracts and Article 2, section 22, ofthe Arkansas Constitution regarding the unconstitutional taking of private property without justcompensation.We have stated on one occasion, albeit without citing authority, that illegal or unconstitutional acts by theState may be enjoined despite the doctrine of sovereign immunity. Cammack v. Chalmers, supra. [FOOTNOTE 3] However, inaffirming the chancellor’s finding that he had jurisdiction to enjoin the action of the University ofArkansas Trustees, we expressly confined our holding to the facts of that case: “We reach a limited decisiontoday that does not allow the University of Arkansas Trustees to ignore their commitments to donors.” Id.,284 Ark. at 163, 680 S.W.2d at 690. We also noted that a statute designated the Board of Trustees of theUniversity as a corporate entity capable of being sued, citing Ark. Code Ann. � 4-28-209 (Repl. 1996) andArk. Code Ann. �� 6-64-201–6-64-202 (Repl. 1996). Id. Furthermore, Cammack v. Chalmers dealt with a parcelof real property that had been conveyed to the Board of Trustees of the University of Arkansas along with aseparate contract, delivered simultaneously with the deed, which stipulated that the Board of Trustees woulddevelop the property into the University’s “Cammack Campus.” Cammack v. Chalmers, supra. There, we werepresented with a sovereign-immunity-doctrine issue in the context of a conditional gift of real property totheState. The facts presented here are distinctly different. In any event, a complaint alleging illegal andunconstitutional acts by the State as an exception to the sovereign-immunity doctrine is not exempt fromcomplying with our rules that require fact pleading:

A pleading which sets forth a claim for relief … shall contain (1) a statement in ordinary andconcise language of facts showing that the court has jurisdiction and is the proper venue and that the pleader is entitled to relief …

Ark. R. Civ. P. 8(a)(1) (emphasis added). Rule 12(b)(6) provides for the dismissal of a complaint for”failure to state facts upon which relief can be granted.” A complaint must state facts, not mereconclusions, in order to entitle the pleader to relief. Brown v. Tucker, 330 Ark. 435, 954 S.W.2d 262 (1997).Thus, we must determine whether the appellees have pled facts sufficient to state a claim based on theunconstitutional impairment or deprivation of a vested property right. In doing so, we look to the case ofJones v. Cheney, 253 Ark. 926, 489 S.W.2d 785 (1973). The appellees contend that the allegations in the second amended petition sufficiently plead a deprivation ofa vested property right because they are similar to the facts alleged in Jones v. Cheney. While this courtdid not mention the doctrine of sovereign immunity in Jones v. Cheney, we held that the constitutionalprohibition against the impairment of contracts applies not only to contracts between individuals, but alsoto contracts made by the State or one of its agencies. In that case, a former state official petitioned for awrit of mandamusdirecting the State Auditor to pay him his statutory retirement benefits. The official hadmet all of the requirements of Act 148 of 1965, which established the pension plan at issue, with theexception of being age sixty-five. However, before the official reached the age of sixty-five, the GeneralAssembly passed Act 167 of 1967, which amended the 1965 law to require service in any one of several namedState offices for at least ten years. The official did not meet this new requirement because, while he hadserved the State for ten years, he had not served ten years in any one position. Thus, the Auditor denied theofficial his retirement benefits, and the official sued for a writ of mandamus. The trial court granted theofficial’s petition and entered a mandamus order directing the Auditor to pay the official his retirementbenefits under Act 148 of 1965, because his rights to the benefits had become vested prior to the change inthe law. We affirmed the trial court’s issuance of a writ of mandamus against the State and held that theofficial’s rights vested in him prior to the change in the law, and that he had a constitutional right tohave his vested right remain unimpaired. Id. Jones v. Cheney is clearly distinguishable from the present case in three respects. First, as previouslynoted, this court did not directly address the issue of sovereign immunity in that case. Second, theretirement plan at issue in Jones v. Cheney was based on voluntary contributions from its member employees.We held that such a system represents delayed compensation forservices rendered in the past and due under acontractual obligation and is not a gratuitous allowance in which the pensioner has no vested right. Id. Thepost-retirement health-insurance benefit in this case, on the other hand, was funded entirely by ATU out ofState funds and the retirees contributed no funds. It was merely a gratuitous allowance. Third, theretirement plan in Jones v. Cheney was established by the Arkansas General Assembly; that is, it was createdby the enactment of a statute. Id. In contrast, the appellees’ pleadings in this case fail to state factsshowing that the post-retirement health-insurance benefit was created by statute. Despite these distinctions,the appellees argue that Jones v. Cheney should be applied to allow this suit against the State. We disagree.In their second amended petition, appellees alleged that ATU and the Board contractually obligated themselvesto provide lifetime health-insurance benefits to retirees meeting the fifty-five/twenty criteria at no costto the retirees and thus created a vested property right in the appellees. They failed, however, to pleadfacts comparable to those in Jones v. Cheney from which the trial court might determine that they had avested property right. Thus, the trial court erred in finding otherwise. In Jones v. Cheney, we relied heavily on the case of Hickey v. Pension Board of City of Pittsburgh, 106 A.2d233 (Pa. 1954) to conclude that Cheney’s rights became firmly vested prior to the passage of the 1967 Act.Jones v. Cheney, supra. However,Hickey v. Pension Board of City of Pittsburgh is clearly distinguishable fromthe present case for the same reasons as Jones v. Cheney; that is, the decision did not directly address theissue of sovereign immunity, the plan at issue was based on voluntary contributions from employees, and theplan was created by the Pennsylvania legislature. Likewise, McCarty v. Board of Trustees, 45 Ark. App. 102,872 S.W.2d 74 (1994), which cited Jones v. Cheney with approval, is inapposite for similar reasons. Moreover,the Arkansas Court of Appeals held in McCarty v. Board of Trustees that the decision of the Board of Trusteeswas arbitrary and capricious, thus placing that case into a sovereign-immunity exception which is no longer apart of this case. The cases of Daggett v. St. Francis Levee District, 226 Ark. 545, 291 S.W.2d 254 (1956)and Chandler v. Board of Trustees, 236 Ark. 256, 365 S.W.2d 447 (1963) were also cited in Jones v. Cheney.Yet, they have little, if any, relevance to this case. Daggett v. St. Francis Levee District was anillegal-exaction suit brought by a taxpayer to enjoin the levee district directors from starting a retirementplan for the levee district’s employees. Daggett v. St Francis Levee District, supra. Although we discussedthe compensatory nature of such retirement systems in Daggett, the dispositive issue in that case was whetherthe legislature intended by the enactment of a statute to give the levee district the authority to adopt aretirement plan. Daggett v. St Francis Levee District, supra. No claim based on statutory law is at issue inthis appeal. Likewise, Chandler v. Board of Trustees, another illegal-exaction case, dealt withconstitutional provisions not at issue here. Finally, both parties have cited our decision in City of North Little Rock v. Vogelgesang, 273 Ark. 390, 619S.W.2d 652 (1981). There, former North Little Rock police officers sued the city to recover accumulatedsick-leave pay allegedly due to each of them pursuant to a city ordinance. The city ordinance allowing forthe sick-leave pay upon retirement had been modified so as to require ten years of service, and none of theformer police officers met the ten-year requirement. The former police officers argued that they had a vestedcontractual right to their accumulated sick leave because (1) they had contributed to the plan, not in moneybut by coming to work; and (2) the plan was held out to them as a fringe benefit at the time of theiremployment. We rejected both of those arguments and held that their right to the accumulated sick leavecontinued to vest as long as the plan was in place, but the city was free to prospectively modify the plan ifthat course was found to be advisable. Id. Despite some apparent factual similarities, there are severalreasons why the City of North Little Rock v. Vogelgesang case is not applicable to the issues in the casebefore us now. First, in that case, the former police officers sued to recover accumulated sick-leave pay;that is, they sued for money damages rather than an injunction. The exception to the sovereign-immunitydoctrine for unconstitutional acts pronounced by this court in Cammack v. Chalmers was limited toactions forinjunctions. Cammack v, Chalmers, supra. There is no such exception for suits seeking money damages. Second,the plan at issue in City of North Little Rock v. Vogelgesang was created by a North Little Rock cityordinance. In this case, the post-retirement health-insurance benefit at issue was not created by anordinance or a statute. Rather, it was the result of a purported contractual agreement. Third, the formerpolice officers brought suit against a city in City of North Little Rock v. Vogelgesang. Cities in Arkansasdo not share in the State’s sovereign immunity, and they are capable of suing and being sued. Ark. Code. Ann.� 14-54-101 (Repl. 1998); Hot Springs Adver. & Promotion Comm’n v. Cole, 317 Ark. 269, 878 S.W.2d 371 (1994).Thus, sovereign immunity was not an issue before this court in City of North Little Rock v. Vogelgesang, asit is here. We therefore hold, pursuant to our decision in Jones v. Cheney, that the appellees have failed to properlyplead facts sufficient to state a claim based on the unconstitutional impairment or deprivation of a vestedproperty right. Accordingly, the exception to the sovereign-immunity doctrine set forth in Cammack v.Chalmers is not applicable, and this suit by appellees against ATU and its Board of Trustees is barred by thedoctrine of sovereign immunity as set forth in Article 5, section 20, of the Arkansas Constitution. The trialcourt erred when it held otherwise. Reversed and dismissed. :::FOOTNOTES::: FN1 The trial court made no finding as to bad faith, and bad faith was not pled by the appellees. FN2 The appellees have not cross-appealed this ruling. FN3 The appellees also cite the case of Arkansas State Med. Bd. v. Leipzig, 299 Ark. 71, 770 S.W.2d 661 (1989), for the propositionthat unconstitutional acts by the State may be enjoined despite the doctrine of sovereign immunity. The plaintiffs in that case,however, sought an injunction pursuant to 42 U.S.C. � 1983. Here, the trial court ruled that ATU and the Board were entitled tosummary judgment on the 42 U.S.C. � 1983 claim, and that ruling has not been appealed. Thus, Arkansas State Med. Bd. v. Leipzigis inapposite.


Arkansas Tech Univ. v. Link ARKANSAS TECH UNIVERSITY, MARY ANN SALMON, STEVE A. SUTTON, DALE BROWN, DR. DEAN MCDOUGAL, INDIVIDUALLY ANDAS MEMBERS OF THE BOARD OF TRUSTEES OF ARKANSAS TECH UNIVERSITY; DR. ROBERT BROWN, INDIVIDUALLY AND ASPRESIDENT OF ARKANSAS TECH UNIVERSITY; APPELLANTS, V. MICHAEL A. LINK, STANLEY LOMBARDO, CHARLES A. MITCHELL, STEVE A. SHRY, WILLIAM C. TITUS, MARGARET WILKERSON,MARILYN BOCKSNICK; APPELLEES, No. 99-665 Filed: June 1, 2000 APPEAL FROM: THE POPE COUNTY CHANCERY COURTBefore: Annabelle Clinton Imber, Justice
 
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