Dockery v. Morgan
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Cite as 2011 Ark. 94
SUPREME COURT OF ARKANSAS
No.
10-651
Opinion Delivered March 3, 2011
JAMES DOCKERY
APPELLANT
VS.
BRETT MORGAN; CRAIG CAMPBELL;
GEORGE DUNKLIN, JR.; RONALD
PIERCE; RICK WATKINS; RON
DUNCAN; EMON MAHONY; DR.
FREDERICK W. SPIEGEL; AND SCOTT
HENDERSON, INDIVIDUALLY AND
IN THEIR OFFICIAL CAPACITIES AS
COMMISSIONERS AND DIRECTOR
OF THE ARKANSAS GAME AND FISH
COMMISSION
APPELLEES
APPEAL FR O M TH E PU LASKI
COUNTY CIRCUIT COURT,
NO. CV-09-1551,
HON. JAMES M. MOODY, JR., JUDGE
AFFIRMED.
COURTNEY HUDSON HENRY, Associate Justice
Appellant James Dockery appeals a Pulaski County Circuit Court order granting a
motion to dismiss filed by appellees Brett Morgan, Craig Campbell, George Dunklin, Jr.,
Ronald Pierce, Rick Watkins, Ron Duncan, Emon Mahony, Dr. Frederick W. Spiegel, and
Scott Henderson, individually and in their official capacities as commissioners and director of
the Arkansas Game and Fish Commission (Commission). For reversal, appellant argues that
the circuit court erred in dismissing counts one and two of his amended complaint, pursuant
to Arkansas Rule of Civil Procedure 12(b)(6) (2010); in ruling that it lacked jurisdiction to
consider count three of his amended complaint; in dismissing appellees in their individual
capacities; and in denying appellant’s request for an injunction pending appeal. Our
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jurisdiction is proper pursuant to Arkansas Supreme Court Rule 1-2(b)(4), (b)(6) (2010). We
affirm.
I. Facts
The parties in this appeal are appellant, a resident of Pulaski County, and appellees, the
commissioners and director of the Commission. Prior to the filing of appellant’s complaint,
the Commission entered into gas leases with private companies to allow for mineral
exploration on the Commission’s land. In exchange for these leases, the private companies
paid the Commission approximately $32 million. In turn, the Commission deposited the gaslease revenue into the Game Protection Fund at the Arkansas State Treasury. Subsequently,
in Act 1147 of 2009, the Arkansas General Assembly appropriated the gas-lease revenue to
the Commission.
On February 25, 2009, appellant filed his initial complaint against the Commission for
declaratory and injunctive relief. Specifically, appellant alleged that the Commission’s act of
entering into the gas leases violated Amendment 35 of the Arkansas Constitution, which
charges the Commission with the duty to manage, conserve, and restore Arkansas wildlife
resources. Appellant requested the circuit court to restrain and enjoin the expenditure of the
gas-lease revenue until the court determined whether those funds belonged to the Arkansas
State Treasury’s general fund (general fund) or whether they should remain as one of the
Commission’s revenue bases. The Commission answered, asserting that appellant’s complaint
should be dismissed pursuant to Rule 12(b)(6) for failure to state facts upon which relief could
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be granted. On April 3, 2009, the parties entered into a consent order whereby the
Commission agreed not to expend any gas-lease revenue until the circuit court entered a final,
appealable order.
On October 1, 2009, appellant filed an amended complaint, asserting three separate
counts and adding appellees individually to the lawsuit. In count one, appellant alleged that
appellees, acting in their official capacities as commissioners and director of the Commission,
exceeded the mandate of Amendment 35 of the Arkansas Constitution by committing ultra
vires acts of entering into these gas leases with private companies. Specifically, appellant
alleged that (1) the Commission exceeded its mandate under Amendment 35 by leasing its
land for drilling purposes; (2) the Commission failed to hold certain lands in trust for the
people of Arkansas by leasing land for gas drilling for profit; and (3) the Commission failed to
hold lands in trust by acting outside its constitutional authority. In count two, appellant
asserted an illegal-exaction claim, arguing that the Commission engaged in conduct giving rise
to an illegal exaction by using public funds and resources to enter into gas leases with private,
commercial enterprises and diverting the monies generated from those leases from the general
fund. Finally, in an alternative count three, appellant asked the circuit court to subject the
Commission’s leased lands to taxation. For relief, appellant requested the circuit court to (1)
declare that the Commission engaged in conduct beyond the scope of its authority under
Amendment 35; (2) enjoin the Commission from engaging in such conduct in the future; (3)
declare that an illegal exaction arose from the misappropriation of gas-lease revenues; (4)
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direct reimbursement to the general fund for the illegal exaction of gas-lease revenues; (5)
declare that the lands were subject to taxation and were not tax-exempt; and (6) grant
appellant reasonable attorney’s fees and “any and all other relief to which [appellant] may be
entitled.”
The Commission and appellees filed a motion to dismiss appellant’s amended
complaint, pursuant to Rule 12(b)(6), for failure to state a claim upon which relief could be
granted. After the circuit court held a hearing on the matter, appellant presented the circuit
court on December 10, 2009, with a letter and a proposed order requesting a voluntary
dismissal of the Commission, pursuant to Arkansas Rule of Civil Procedure 41(a) (2010). On
February 3, 2010, the circuit court granted appellant’s motion for voluntary nonsuit of the
Commission and dismissed the Commission without prejudice.
On March 4, 2010, the circuit court entered its order, dismissing with prejudice
appellant’s claims against appellees in their official capacities. First, the circuit court dismissed
count one against appellees in their official capacities because appellant failed to state a claim
upon which relief could be granted and because the relief could not be granted by the circuit
court. The circuit court found appellant’s allegations in count one were factually deficient
because they were conclusory in nature. The court also ruled that appellant’s allegations in
count one were legally deficient pursuant to Amendment 35, Arkansas Code Annotated
sections 22-5-801 to -818 (Repl. 2004 & Supp. 2009), and the United States Fish and
Wildlife Service regulations. Second, the circuit court dismissed count two against appellees
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in their official capacities because appellant failed to allege facts sufficient to state an illegalexaction claim. The court ruled that appellant’s allegations did not amount to illegal conduct,
nor could the court grant the relief requested. Third, the circuit court dismissed count three
against appellees in their official capacities based upon the circuit court’s lack of jurisdiction
to subject the lands to taxation. Additionally, the circuit court dismissed appellant’s amended
complaint against the Commission’s director and commissioners in their individual capacities
because state officials and employees are immune from suit, pursuant to Arkansas Code
Annotated section 19-10-305(a) (Supp. 2009). The court also ruled that appellant’s amended
complaint failed to state a claim that any actions of the Commission’s director and
commissioners were conducted in their individual capacity, outside the scope of their official
capacity, or under the color of state law to deprive appellant of his constitutional rights. On
March 16, 2010, appellant filed a motion for injunction “that the funds at issue not be
dissipated” pending appeal, and the circuit court denied the motion in its April 19, 2010
order. Appellant timely filed his notices of appeal on March 31, 2010, and May 17, 2010.
II. Points on Appeal
On appeal, appellant challenges the circuit court’s dismissal of appellant’s claims against
appellees in their official and individual capacities. Our standard of review on a motion to
dismiss is well established. We treat the facts alleged in the complaint as true and view them
in the light most favorable to the party who filed the complaint. McNeil v. Weiss, 2011 Ark.
46, ___ S.W.3d ___. In testing the sufficiency of the complaint on a motion to dismiss, all
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reasonable inferences must be resolved in favor of the complaint, and the pleadings are to be
liberally construed. Id. However, our rules require fact pleading, and a complaint must state
facts, not mere conclusions, in order to entitle the pleader to relief. See Ark. R. Civ. P. 8(a)(1)
(2010); Born v. Hosto & Buchan, PLLC, 2010 Ark. 292, ___ S.W.3d ___. We treat only the
facts alleged in the complaint as true but not a plaintiff’s theories, speculation, or statutory
interpretation. Hodges v. Lamora, 337 Ark. 470, 989 S.W.2d 530 (1999). Finally, our standard
of review for the granting of a motion to dismiss is whether the circuit judge abused his or
her discretion. Doe v. Weiss, 2010 Ark. 150.
The circuit court dismissed appellant’s official-capacity counts one and two based upon
Rule 12(b)(6), which provides that “[e]very defense, in law or in fact, to a claim for relief in
any pleading . . . shall be asserted in the responsive pleading thereto if one is required, except
that the following defenses may . . . be made by motion: . . . (6) failure to state facts upon
which relief can be granted[.]” According to Arkansas Rule of Civil Procedure 8(a)(1) (2010),
a pleading that sets forth a claim for relief shall contain a statement in ordinary and concise
language of facts showing that the pleader is entitled to relief. Rules 8(a)(1) and 12(b)(6) must
be read together in testing the sufficiency of a complaint. Rabalaias v. Barnett, 284 Ark. 527,
683 S.W.2d 919 (1985). We look to the underlying facts supporting an alleged cause of action
to determine whether the matter has been sufficiently pled. Id. With these general principles
in mind, we turn to appellant’s first argument.
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A. Count One: Factual and Legal Deficiencies
For the first point on appeal, appellant argues that the circuit court erred in ruling that
count one of his amended complaint failed to state a claim upon which relief could be
granted, pursuant to Rule 12(b)(6). Specifically, appellant asserts that he pled adequate facts;
that the circuit court had the authority to declare that the Commission engaged in conduct
beyond the scope of Amendment 35 by entering into contracts with private entities to drill
for gas; and that neither the Arkansas Constitution nor Arkansas statutes prohibit the circuit
court from enjoining the Commission from entering into commercial contracts with private
companies to drill for gas.
Appellees respond that the circuit court properly dismissed count one of appellant’s
amended complaint because the complaint was factually and legally deficient. Appellees
contend that appellant failed to request any actual relief and that Amendment 35 of the
Arkansas Constitution, Arkansas Code Annotated sections 22-5-801 to -818, and the federal
fish and wildlife regulations prevent the diversion of the Commission’s gas-lease monies to
other state agencies.
1. Factually deficient
Appellant cites Arkansas State Game & Fish Commission v. Stanley, 260 Ark. 176, 538
S.W.2d 533 (1976), for the proposition that his allegations were sufficient to state a claim,
particularly that the Commission’s actions were “arbitrary, capricious, unreasonable, and
unlawful.” In Stanley, we reviewed an injunction that had been issued to prevent the
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Commission from harvesting timber at the Bayou Meto Wildlife Management Area.
Appellees, who consisted of citizens, taxpayers, and hunters, filed a class action to enjoin the
Commission, its members, and its director, as well as the timber contractor, from cutting and
removing timber under the contract. Appellees alleged that, if the contract were performed,
the area involved would be destroyed as a wildlife and waterfowl habitat and contended that
the Commission’s proposed action of entering into the timber-cutting contract was ultra vires,
arbitrary, capricious, unreasonable, and unlawful. The chancellor agreed with appellees and
enjoined appellants from carrying out the particular timber-cutting operation. We disagreed
and reversed on the basis that the contract was within the power and discretion of the
Commission. Id.
However, Stanley, supra, is distinguishable from the case at bar because Stanley had a
different procedural posture. In that case, the circuit court entered an order enjoining
appellants from carrying out the particular timber-cutting operation, and appellants appealed
from that decree. More significantly, the circuit court not only reviewed the complaint and
the contract, but it also heard numerous expert witnesses and lay witnesses who testified about
the potential impact that cutting timber could have on wildlife, animal habitat, and hunting
in the area. In reversing the circuit court, we reasoned that the Commission’s contracts were
“policy matters vested entirely in the Commission,” as long as it acted within the purview of
Amendment 35. Id. at 190, 538 S.W.2d at 540.
In the present case, appellant’s amended complaint cannot survive a Rule 12(b)(6)
motion. Appellant made the following allegation in count one of his amended complaint:
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17. . . . Dockery reasonably believes, and therefore alleges, that the drilling of
gas will destroy land as a wildlife habitat. Our environment and natural resources are
very fragile and very valuable commodities. When entering into the lease agreements,
the [Commission] did not sufficiently consider the impact of a ‘business arrangement’
that allowed private entities to use lands for purposes unrelated to hunting, fishing, or
the management and conservation of wildlife resources. Further, the ill effects of
drilling will be irreparable and long lasting. The results of drilling are obvious: the area
will be destroyed as a wildlife habitat; species will be uprooted and driven out of the
environment; and trees will be cut, trampled, and destroyed. The damage done to the
land and environment will most likely require reconstruction by departments within
the State of Arkansas at significant expense and may become a burden on Arkansas
taxpayers.
Appellant’s count one is fraught with conclusory allegations. These allegations, which
contain phrases such as “the area will be destroyed,” “species will be uprooted,” “trees will be
cut,” and “the damage . . . will most likely require reconstruction . . . and may become a burden,”
merely put forth speculative theories on future acts that do not concern the present-day
actions of the Commission. (Emphasis added.) Without specificity, appellant failed to allege
how the commissioners’ and director’s actions of leasing mineral rights to private companies
constituted an unlawful action or how any third-party drilling created a detrimental impact
on the Commission’s lands.
Further, with respect to count one, appellant requested no actual relief that could be
granted. In his prayer for relief, appellant pled the following:
48. Dockery seeks an injunction pursuant to Ark. R. Civ. P. 65 to enjoin and
restrain the [Commission] from diverting and using any more revenue from the gas
leases and require all such revenue be deposited to the General Fund.
....
50. Dockery further seeks an order from this court directing the refund of all
gas revenues impermissibly diverted from the General Fund and directing that all
money subject to the consent order be returned to the General Fund.
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Additionally, appellant requested the court to declare that the Commission “engaged in
conduct beyond the scope of its authority under Amendment 35” and to “enjoin[] the
Commission from engaging in such conduct in the future.”
However, appellant’s prayer for relief lacks specificity and does not address the
Commission’s current leases or current drilling. Appellant’s requested relief is incongruent
with his claims, namely that any allegedly illegal contracts with third parties be declared void.
During oral argument, appellant’s counsel maintained that the general prayer for relief of “all
other relief to which [appellant] may be entitled” covered these claims, but appellant did not
join the private companies in this action in an effort to rescind the leases. Therefore, the
circuit court properly ruled that appellant’s count one in his amended complaint did not meet
our requirement of fact-based pleading.
2. Legally deficient
Next, we turn to the circuit court’s rulings that, if appellant had pled sufficient facts,
the requested relief that all revenues from these leases be diverted “to the general coffers of
the State of Arkansas” was legally deficient. Specifically, we address the circuit court’s rulings
that Amendment 35, Arkansas Code Annotated section 22-5-801 to -818, and federal
regulations prevent the diversion of the Commission’s gas-lease revenue to other state
agencies.
a. Amendment 35
Amendment 35, adopted in 1944, created the Arkansas Game and Fish Commission
as an independent constitutional agency with the clear power to control, manage, restore,
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conserve, and regulate the birds, fish, game, and wildlife resources of the state. Ark. Const.
amend. 35, § 1; Chaffin v. Ark. Game & Fish Comm’n, 296 Ark. 431, 757 S.W.2d 950 (1988).
Further, section 8 of Amendment 35 grants the Commission the authority to expend its funds.
Section 8 provides:
The fees, monies, or funds arising from all sources by the operation and
transaction of the said Commission and from the application and administration of the
laws and regulations pertaining to birds, game, fish, and wildlife resources of the State
and the sale of property used for said purposes shall be expended by the Commission
for the control, management, restoration, conservation, and regulation of the birds,
fish, and wildlife resources of the State, including the purchases or other acquisitions
of property for said purposes and for the administration of the laws pertaining thereto
and for no other purposes.
Ark. Const. amend. 35, § 8.
In W.R. Wrape Stave Co. v. Arkansas State Game & Fish Commission, 215 Ark. 229, 219
S.W.2d 948 (1949), we stated that the underlying purpose of Amendment 35 was to vest in
the Commission the power to control, manage, restore, conserve, and regulate the State’s
bird, fish, game, and wildlife resources, and that funds arising from all sources were to be spent
by the Commission for the purposes mentioned. Section 8 of Amendment 35 contains this
additional language: “All monies shall be deposited in the Game Protection Fund with the
State Treasurer and such monies as are necessary, including an emergency fund, shall be
appropriated by the Legislature at each Legislative session for the use of the Game and Fish
Commission as hereto set forth.” We stated in Wrape Stave that “money received from sources
mentioned in the Amendment is not available—even with legislative approval—for any uses
other than those expressed or necessarily implied.” Id. at 234, 219 S.W.2d at 950; see also Ark.
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Game & Fish Comm’n v. Edgmon, 218 Ark. 207, 235 S.W.2d 554 (1951) (holding that the
General Assembly cannot disburse the Commission’s funds but should make appropriations
to the Commission).
The Commission’s actions of entering into these gas leases falls within the ambit of
Amendment 35. The money derived from these gas leases qualifies as “fees, monies or funds
arising from all sources by operation and transaction of the . . . Commission” that can be used
by the Commission for “no other purposes.” This language undermines appellant’s contention
that the funds should be redirected to the general fund. For these reasons, we affirm the circuit
court’s ruling concerning Amendment 35.
b. Sections 22-5-801 to -818
Contrary to appellant’s assertions, our General Assembly has enacted statutes that
govern the Commission’s authority to issue leases for mineral rights and to retain funds
received from those mineral leases. Arkansas Code Annotated section 22-5-802(c) (Supp.
2009) provides that “[t]he commission shall retain control over the awarding and shall retain
the authority over the issuance of leases for the mineral rights and of permits for the rights to
produce and sever minerals from lands held in its name or managed by it.” Arkansas Code
Annotated section 22-5-804(e) (Repl. 2004) provides that the Commission has the authority
to (1) establish a schedule of minimum fees and royalties for leases for the Commission’s lands;
(2) take bids on and to award the leases; (3) set the length of time for leases or permits to
expire; and (4) set the minimum fees and royalties for leases and permits and to ensure that
severance taxes on minerals from such leases or permits are paid to the proper agencies.
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With regard to the funds supplied by these leases, Arkansas Code Annotated section
22-5-809(c)(4) (Supp. 2009) provides that “[a]ll funds received by the Arkansas State Game
and Fish Commission as fees, compensation, or royalties, including any application or bid fees,
for leases or permits issued for the taking of any minerals for lands held in the name of the
commission shall be special revenues and shall be deposited in the State Treasury and credited
to the Game Protection Fund for the use of the commission.” Ark. Code Ann. § 22-5809(c)(4). Additionally, Arkansas Code Annotated section 22-5-812(c) (Repl. 2004) states that
“[t]he Arkansas Game and Fish Commission shall promulgate rules and regulations necessary
to lease mineral rights and to issue permits to produce and sever minerals on commission
lands[.]”
In the present case, appellant’s request for a diversion of funds is prohibited by our
statutes. A review of the plain language of these statutes reveals that the General Assembly not
only contemplated but also authorized the Commission to enter into the gas leases to carry
out its constitutional mandate. Here, these statutes specifically allow the Commission to enter
into mineral leases and dictate that any funds from those leases must be used solely by the
Commission. Thus, we conclude that the circuit court properly noted that these statutes
codified the requirements set forth in Amendment 35 regarding the Commission’s funds and
ruled that the statutes contradict appellant’s allegations and requested remedy. For these
reasons, we cannot say that the circuit court erred in dismissing on this basis.
c. Federal regulations
Lastly, appellant’s request for a diversion of funds is prohibited by federal fish and
wildlife regulations. Pursuant to the United States Fish and Wildlife Service regulations,
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“[r]evenues from license fees paid by hunters and fishermen shall not be diverted to purposes
other than the administration of the State fish and wildlife agency.” 50 C.F.R. § 80.4 (2010)
(emphasis added). The license revenues that may not be diverted “include income from . . .
[the] [s]ale, lease, rental, or other granting of rights of real . . . property acquired or produced
with license revenues.” 50 C.F.R. § 80.4(a)(2). If a diversion of license revenues occurs, the
state fish and wildlife agency is ineligible to receive certain federal financial-assistance funds.
See 50 C.F.R. § 80.4(d).
The pertinent federal regulations are straightforward. If the gas-lease revenue is directed
to the general fund, then the Commission will become ineligible for federal funding. Based
upon the language of these federal regulations, these gas-lease funds are tantamount to license
revenues controlled by the Commission. We hold that the circuit court did not abuse its
discretion in finding that the requested relief is prohibited by the federal regulations. For these
reasons, we affirm the circuit court’s dismissal on these grounds.
B. Count Two: Illegal Exaction
For the second point on appeal, appellant argues that the circuit court erred in ruling
that count two of his amended complaint failed to state a claim for an illegal exaction.
Specifically, appellant argues that the following allegations constituted an illegal-exaction claim
that (1) the Commission is funded through a one-eighth (1/8) cent sales tax, which directs
nearly $26 million to the Commission, as well as through the sale of hunting and fishing
licenses; (2) the Commission has entered into lease agreements with private commercial
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entities for the purpose of drilling for gas; and (3) the Commission used public funds to enter
into gas leases with private commercial enterprises and diverted the monies generated from
those leases to unauthorized expenditures.
Appellees respond that appellant’s count two fails to state a claim for an illegal exaction
because no tax is at issue. Specifically, appellees contend that the revenue did not arise from
taxation but rather from gas-lease money that private, third-party gas companies paid to the
Commission for leases on the Commission’s land.
Article 16, section 13 of the Arkansas Constitution grants the citizens of Arkansas
standing to pursue an illegal-exaction claim. This section provides that “[a]ny citizen of any
county, city, or town may institute suit on behalf of himself and all others interested, to
protect the inhabitants thereof against the enforcement of any illegal exactions.” An illegal
exaction is defined as any exaction that either is not authorized by law or is contrary to law.
Robinson v. Villines, 2009 Ark. 632, ___ S.W.3d ___. There are two types of illegal-exaction
cases: (1) “public funds” cases, where the plaintiff contends that public funds generated from
tax dollars are being misapplied or illegally spent and (2) “illegal-tax” cases, where the plaintiff
asserts that the tax itself is illegal. Id. It is axiomatic that, before a public-funds type of illegal
exaction will be allowed to proceed, there must be facts showing that monies generated from
tax dollars or arising from taxation are being misapplied or illegally spent. Brewer v. Carter, 365
Ark. 531, 231 S.W.3d 707 (2006).
Appellant’s claim does not fall into either type of illegal-exaction case. First, with
regard to illegal-tax claims, the monies at issue do not arise from taxation but are generated
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from the Commission’s gas leases with private, third-party companies. Second, with regard
to public-funds claims, the public funds at issue allegedly misapplied by the Commission were
not generated from tax dollars. Here, appellant simply requested that the gas-lease revenue be
moved from one part of the State’s treasury to the other. Most significantly, the Commission’s
action of spending revenue, which is not generated from taxation, from the gas leases is not
a claim contemplated by illegal exactions. See id.
Appellant relies upon McGhee v. Arkansas State Board of Collection Agencies, 360 Ark.
363, 201 S.W.3d 375 (2005), for the proposition that an allegation of the Commission’s use
of public funds is enough to survive a motion to dismiss for an illegal-exaction claim. In
McGhee, appellants’ complaint alleged that plaintiffs were Arkansas residents and taxpayers and
that appellees used public funds to finance its operation. Appellees asserted that the Board’s
check-cashing division was financed by fees paid by the collection agencies and check-cashers
and did not receive any revenue from the Arkansas State Treasury. We held that appellants’
complaint clearly alleged the use of public funds; that appellants’ allegations survived a motion
to dismiss; and that the circuit court erroneously dismissed the taxpayers’ illegal-exaction claim
for lack of standing. Id.
However, McGhee is distinguishable from the case at bar. Unlike the circumstances in
McGhee, appellant in this case failed to plead specific facts showing that the Commission used
public funds to enter into these gas leases. Appellant did not plead that the Commission
expended any initial resources, namely salaries or ancillary expenses, while negotiating these
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gas-drilling leases, nor could appellant’s counsel provide any specific examples of the
Commission’s expenditures in oral argument.
Further, appellant failed to request proper relief in count two. In his prayer for relief,
appellant requested a publication of notice of the illegal exaction, a declaration of an illegal
exaction from the misappropriation of gas-lease revenues, and a reimbursement to the general
fund for the illegal exaction. However, appellant failed to request the reimbursement of these
initial expenditures made by the Commission. Appellant’s mere allegation that public funds
were used to enter into gas leases is not enough to state a claim for an illegal exaction because
the requested relief — the diversion of non-taxpayer money — cannot be granted. We hold
that the circuit court did not abuse its discretion in dismissing count two of appellant’s
amended complaint.
C. Count Three: Lands Subject to Taxation
For the fourth point on appeal, appellant argues that the circuit court erred in
dismissing count three of his amended complaint for lack of jurisdiction and for lack of
standing. Specifically, appellant contends that he has standing to challenge the tax status of the
Commission because he is a taxpayer of the state of Arkansas and holds hunting and fishing
licenses.
Appellees respond that the circuit court lacked jurisdiction to decide the Commission’s
tax-exempt status because, contrary to appellant’s assertions, appellant asked the court to
subject these lands to ad valorem taxation, a task designated for the county courts. Appellees
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also contend that, if the circuit court had jurisdiction, appellant lacked standing because he
had no property interest in lands other than Pulaski County where appellant resides.
The issue we must decide is whether the circuit court lacked jurisdiction to determine
the Commission’s tax-exempt status. Appellant, in count three of his amended complaint,
alleged as follows:
In the event the court finds the [Commission] is not exceeding its mandate
under Amendment 35 of the Constitution by entering into leases with private
commercial enterprises and using profit for itself, the court should find that the leases
are subject to taxation under Article 16, § 5 of the Arkansas Constitution.
The lands in question do not enjoy tax exempt status under Article 16 Section
5(b) of the Arkansas Constitution because the [Commission] is using the property to
generate a profit for itself by leasing the land to a commercial enterprise.
Article 16 Section 5(b) provides an exemption for taxation when “public
property is used exclusively for public purposes.”
The lands in question are managed by the [Commission]. The [Commission]
is leasing these lands to commercial enterprises therefore they are subject to property
tax. The lands are not being used exclusively for public purposes, but rather for private
purposes by leasing them to private entities; therefore no tax exemption applies.
Dockery asks that the court subject these lands to taxation as they are not being
used exclusively for public purposes.
Based upon count three, appellant requests the circuit court to “find that the leases are
subject to taxation pursuant to article 16, section 5 of the Arkansas Constitution.” This section
provides in relevant part: “All real and tangible personal property subject to taxation shall be
taxed according to its value, that value to be ascertained in such manner as the General
Assembly shall direct, making the same equal and uniform throughout the State.” Ark. Const.
art. 16, § 5. In other words, article 16, section 5 of the Arkansas Constitution refers to
property taxes. With regard to property taxes, the Arkansas Constitution provides that “[t]he
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County Courts shall have exclusive original jurisdiction in all matters relating to county
taxes.” Ark. Const. art. 7, § 28; see also Hambay v. Williams, 373 Ark. 532, 285 S.W.3d 239
(2008); Pockrus v. Bella Vista Property Owners’ Ass’n, 316 Ark. 468, 872 S.W.2d 416 (1994).
Here, appellant’s claim that the Commission’s lands should be subject to an ad valorem tax
is within the exclusive jurisdiction of the county courts. See Hambay, supra. Therefore, the
circuit court did not err in dismissing count three of appellant’s amended complaint for a lack
of jurisdiction.
D. Individual-capacity Claims
For the fifth point on appeal, appellant argues that the circuit court erred in dismissing
counts one, two, and three against the Commission’s director and commissioners in their
individual capacities. Specifically, appellant contends that the director and commissioners are
not entitled to immunity, pursuant to Arkansas Code Annotated section 19-10-305(a) (Supp.
2009), and that he was not required to allege that the acts were covered by liability insurance
because he pled an illegal-exaction claim. Further, appellant argues that he properly sought
damages from the commissioners and director in their individual capacities.
Appellant cites McGhee, supra, for the proposition that he was not required to allege
facts to maintain an individual-capacity claim because he pled an illegal-exaction claim.
However, in McGhee, we did not specifically address the issue of individual-capacity suits.
Moreover, our statutes are dispositive of the issue. Section 19-10-305 provides state
employees with qualified immunity from civil liability for nonmalicious acts occurring within
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the course of their employment. See City of Fayetteville v. Romine, 373 Ark. 318, 284 S.W.3d
10 (2008). Section 305(a) provides that “[o]fficers and employees of the State of Arkansas are
immune from liability and from suit, except to the extent that they may be covered by
liability insurance, for damages for acts or omissions, other than malicious acts or omissions,
occurring within the course and scope of their employment.” Ark. Code Ann. § 19-10305(a). Additionally, individual-capacity suits involve actions taken by governmental agents
outside the scope of their official capacities. Nix v. Norman, 879 F.2d 429 (8th Cir. 1989).
In the present case, section 19-10-305 is applicable unless appellant has pled sufficient
facts to support a finding that the acts or omissions were committed maliciously. In the
amended complaint, appellant failed to plead that appellees’ acts were covered by liability
insurance or that those acts were committed maliciously. Appellant also failed to plead that
the commissioners and director acted outside the scope of their employment in leasing the
Commission’s land or in utilizing the revenue from those leases. Nor does appellant’s
amended complaint seek any relief from the commissioners and director in their individual
capacities. Thus, appellant’s claims against appellees in their individual capacities contain
factual and legal deficiencies. For these reasons, we hold that the circuit court properly
dismissed appellees with prejudice from the lawsuit in their individual capacities.
E. Request for Injunctive Relief
For the final point on appeal, appellant argues that the circuit court erred in denying
his motion for injunctive relief pending appeal. Appellant contends that he was entitled to
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Cite as 2011 Ark. 94
injunctive relief because an injunction was necessary to protect the status quo and to protect
the funds at issue from being dissipated before taxpayers would realize the benefit of a
potentially successful appeal. Now that we have considered appellant’s appeal, his final
argument seeking injunctive relief is moot.
Affirmed.
B AKER, J., not participating.
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