Milligan v. Burrow

Dennis MILLIGAN and Water Treatment Services
v. Chris BURROW, Director of Arkansas State
Building Services, et al.

CA 95-53                                           ___ S.W.2d ___

                  Court of Appeals of Arkansas
                           Division II
               Opinion delivered January 31, 1996


1.   Constitutional law -- sovereign immunity -- concept is well
     grounded in Arkansas law. -- The concept of sovereign immunity
     is well grounded in Arkansas law. 

2.   Constitutional law -- sovereign immunity -- action filed
     nominally against state employees was tantamount to action
     against State -- sovereign immunity applied. -- Where
     appellants sued three state employees for acts performed in
     their official capacities, the action, although filed
     nominally against state employees, was tantamount to an action
     against the State of Arkansas; the court of appeals held that
     sovereign immunity, therefore, applied to the case and
     protected not only the State but its employees as well;
     appellants were correct in asserting that the immunity was a
     qualified one, but they failed to show facts that would place
     the state employees in question outside even a qualified
     immunity.

3.   Administrative law & procedure -- failure to exhaust
     administrative remedies -- appeal failed at threshold level. -
     - The court of appeals held that the present appeal failed at
     a threshold level because appellants failed to exhaust their
     administrative remedies.

4.   Administrative law & procedure -- State purchasing law adopts
     exhaustion doctrine for disputes arising from bids for state
     services. -- The Arkansas Purchasing Law includes a provision,
     at Ark. Code Ann.  19-11-244 (Repl. 1994), that adopts the
     exhaustion doctrine for disputes arising from bids for state
     services. 

5.   Administrative law & procedure -- appellants not justified in
     assuming that state employee's assertion that purchasing law
     no longer applied to bid -- litigants under duty to
     investigate extent of available administrative remedies before
     resorting to courts. --   Where appellants chose to bring suit
     under the Purchasing Law and were bound by the procedural
     requirements of the statute, but argued that they fell within
     a recognized exception to the exhaustion doctrine whereby a
     litigant need not exhaust administrative remedies where it
     would be futile to do so or where there was no genuine
     opportunity to do so, they were not justified in assuming that
     an assertion by a state employee that the Arkansas Purchasing
     Law no longer applied to the bid at issue was correct or that
     the purchasing law's dispute resolution process was no longer
     applicable; litigants are under at least a minimal duty to
     investigate the extent of the administrative remedies
     available to them before resorting to the courts.

5.   Administrative law & procedure -- appellants sought wrong
     remedy -- violation of competitive-bidding statute does not
     give rise to claim for damages. -- Where appellants' complaint
     sought compensatory and punitive damages, but failed to seek
     injunctive relief or mandamus, the court of appeals ruled
     that, even if appellants' action could have survived the
     threshold inquiries, they sought the wrong remedy; the
     Arkansas Purchasing Law provides, at Ark. Code Ann.  19-11-
     247 (Repl. 1994), for termination of the contract or "other
     remedies provided by law" if an award is in violation of the
     law; these "other remedies" might include an injunction or
     perhaps mandamus, but a violation of a competitive-bidding
     statute does not give rise to a claim for damages.


     Appeal from Pulaski Circuit Court, Sixth Division; David
Bogard, Judge; affirmed.
     Winston Bryant, Att'y Gen., by:  Arnold M. Jochums, Asst.
Att'y Gen., for appellees Chris Burrow and Doug Bown.
     Winston Bryant, Att'y Gen., by:  Thomas S. Gay, Senior Asst.
Att'y Gen., for appellee Ed Erxleben.

     Wendell L. Griffen, Judge.



                                DIVISION II





                                 CA 95-53
                                                                 
                                                 January 31, 1996


DENNIS MILLIGAN AND WATER        AN APPEAL FROM PULASKI TREATMENT
SERVICES                         CIRCUIT COURT, SIXTH DIVISION
                   APPELLANTS    NO. 93-8494

V.                               HONORABLE DAVID BOGARD, JUDGE


CHRIS BURROW, DIRECTOR
OF ARKANSAS STATE BUILDING
SERVICES, ET AL.
                   APPELLEES     AFFIRMED




                   Wendell L. Griffen, Judge.

    Dennis Milligan and Water Treatment Services, Inc. (þWTSþ)
brought suit in the Circuit Court of Pulaski County, Sixth
Division, the Honorable David Bogard presiding, against defendants
Ed Erxleben, Director of the Office of State Purchasing, and Chris
Burrow and Doug Bown, employees of Arkansas State Building Services
(þSBSþ).  Milligan and WTS alleged that the defendants wrongfully
denied a state contract to Milligan and WTS for the service of
water treatment equipment at six state buildings.  Milligan and WTS
submitted a bid for the contract and insisted they were the low
bidders, yet the contract was awarded to a California company.
Milligan then contacted one of his state legislators,
Representative Mark Riable, who wrote a letter to SBS asking why
WTS did not get the job.  Bown replied by letter to Milligan and
stated that SBS was not bound by the bidding process set forth in
the Arkansas Purchasing Law (Ark. Code Ann.  19-11-201--19-11-261
(Repl. 1994)).  Bownþs letter further stated that SBS was aware of
complaints concerning Milliganþs service and that price was not the
only consideration in awarding the contract. 
    Milligan and WTS filed suit alleging violations of the Arkansas
Purchasing Law, breach of good faith, and tortious interference.
Their complaint sought compensatory damages, punitive damages, and
costs.  Milligan and WTS appeal from the trial courtþs grant of a
motion to dismiss pursuant to Rule 12(b)(6) of the Arkansas Rules
of Civil Procedure.
    Milligan and WTS raise numerous points on appeal.  We address
only three: sovereign immunity, exhaustion of administrative
remedies, and allowable remedies under the Arkansas Purchasing Law. 
    The concept of sovereign immunity is well grounded in Arkansas
law. Ark. Const. art. 5,  20; Ark. Code Ann.  19-10-305(a)(Repl.
1994); Paige v. McKinley, 196 Ark. 331, 118 S.W.2d 235 (1938).
Here, appellants sued three state employees for acts performed in
their official capacities.  Although the action was filed nominally
against state employees, it is tantamount to an action against the
State of Arkansas.  See Beaulieu v. Gray, 288 Ark. 395, 705 S.W.2d 880 (1986).  Sovereign immunity, therefore, applies to this case
and protects not only the State but its employees as well.
Appellants are correct when they assert that the immunity is a
qualified one, but they have failed to show facts that would place
these state employees outside even a qualified immunity.  Smith v.
Denton, 320 Ark. 253, 895 S.W.2d 550 (1995); Cf. Robinson v.
Beaumont, 291 Ark. 483, 725 S.W.2d 839 (1987). 
    This appeal also fails at a threshold level because Milligan
and WTS have failed to exhaust their administrative remedies.  The
Arkansas Purchasing Law includes a provision that adopts the
exhaustion doctrine for disputes arising from bids for state
services. Ark. Code Ann.  19-11-244 (Repl. 1994).  We do not
decide whether the Arkansas Purchasing Law applies.  Appellants
chose to bring suit under the Purchasing Law and were bound by the
procedural requirements of the statute, but they argue that they
fall within a recognized exception to the exhaustion doctrine
whereby a litigant need not exhaust administrative remedies where
it would be futile to do so or where there was no genuine
opportunity to do so.  Arkansas Motor Vehicle Commþn v. Cantrell
Marine, 305 Ark. 449, 808 S.W.2d 765 (1991).  Appellants seek
refuge under the exception based on an assertion by a state
employee (Bown) that the Arkansas Purchasing Law no longer applied
to the bid at issue.  Appellants were not justified in assuming
that Bown's assertion was correct.  More specifically, appellants
were not justified in further assuming the purchasing lawþs dispute
resolution process was no longer applicable.  Litigants are under
at least a minimal duty to investigate the extent of the
administrative remedies available to them before resorting to the
courts. See, e.g., Barr v. Arkansas Blue Cross & Blue Shield, Inc.,
297 Ark. 262, 761 S.W.2d 174 (1988).         
    Finally, even if appellantsþ action could survive these
threshold inquiries, they seek the wrong remedy.  The Arkansas
Purchasing Law provides for termination of the contract or þother
remedies provided by lawþ if an award is in violation of the law. 
Ark. Code Ann.  19-11-247 (Repl. 1994).  These þother remediesþ
might include an injunction or perhaps mandamus, but a violation of
a competitive bidding statute does not give rise to a claim for
damages.  Klinger v. City of Fayetteville, 297 Ark. 385, 762 S.W.2d 388 (1994).  Appellantsþ complaint sought compensatory and punitive
damages, but failed to seek injunctive relief or mandamus. 
    Therefore, we agree with the trial court that jurisdiction was
lacking due to sovereign immunity.  Pitcock v. State, 91 Ark. 527,
121 S.W. 742 (1909).  Jurisdiction was also lacking due to
appellantsþ failure to exhaust administrative remedies.  Barr,
supra.  Moreover, appellantsþ choice of remedy is simply not in
accordance with the law.  Klinger, supra.
    Affirmed.
    Cooper and Stroud, JJ., agree.