Carol J. Hodges v. Mike Huckabee and Tom Dalton

Annotate this Case
Carol J. HODGES v. Mike HUCKABEE 
and Tom Dalton

97-1034                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered May 14, 1998


1.   Appeal & error -- failure to comply with Ark. R. Civ. P. 54(b) is jurisdictional --
     renders matter not final. -- The failure to comply with Ark. R. Civ.
     P. 54(b) and adjudicate all claims against all parties is
     jurisdictional and renders the matter not final for purposes
     of appeal; because a violation of Rule 54(b) relates to the
     subject-matter jurisdiction of the appellate court, it must
     raise the issue on its own.  

2.   Appeal & error -- subject-matter jurisdiction cannot be waived. -- Subject-matter
     jurisdiction cannot be waived by the parties or by the
     appellate court.

3.   Appeal & error -- trial court's order failed to dispose of appellant's complaint
     against appellee governor -- appeal dismissed without prejudice. -- Although the
     trial court and the parties may have intended to conclude the
     underlying lawsuit by a summary-judgment order, the trial
     court's order failed to dispose of appellant's complaint
     against appellee governor and did not include a proper
     certification of the appeal to the court, pursuant to Ark. R.
     Civ. 54(b), on the basis that there was no just reason for
     delay, even though fewer than all the claims have been
     resolved; the fundamental policy behind Rule 54(b) is to avoid
     piecemeal appeals; accordingly, the court dismissed the appeal
     without prejudice.


     Appeal from Pulaski Chancery Court; Robin Mays, Chancellor;
dismissed.
     J. Fred Hart, Jr., for appellant.
     Breck Hopkins and Frank J. Wills, III, for appellee Tom
Dalton.
     Wright, Lindsey & Jennings, by: Bettina E. Brownstein; and
Priscilla J. Smith, for intervenor-appellees Little Rock Family
Planning Services, P.A., and Curtis E. Stover, M.D.

     Robert L. Brown, Justice.
     The issues before this court on appeal are whether the trial
court erred in concluding that a federal district court order
preempted Amendment 68 of the Arkansas Constitution and further
erred in denying appellant Carol J. Hodgesþs motion for a new trial
to overturn an order of summary judgment when material questions of
fact allegedly were at issue.  Because the abstract and record in
this case are silent on the disposition of Hodgesþs complaint
against appellee, Governor Mike Huckabee, we dismiss this appeal
without prejudice pursuant to Arkansas Rule of Civil Procedure
54(b).
     This appeal concerns the use of public funds to pay for
abortions under the Medicaid program (Title XIX of the Social
Security Act of 1965) in cases of rape and incest.  On July 29,
1994, Hodges filed her complaint for injunctive relief against
former Governor Jim Guy Tucker and appellee Tom Dalton, then
Director of the Arkansas Department of Human Services (DHS), in
their official capacities.  Hodges sought an order mandating that
Governor Tucker and Dalton terminate Arkansas's participation in
the federal Medicaid program because under the Medicaid program,
public funds were required to be expended to pay for abortions in
cases of rape and incest.  According to Hodgesþs complaint, this
constituted an illegal exaction under Ark. Const. art. 16,  13,
because public funds were being used to pay for abortions other
than to save the life of the mother which was in contravention of
Amendment 68.
     On September 1, 1994, Hodges moved for summary judgment and
asserted that no genuine issue of material fact existed because the
defendants had admitted that public funds were being used by
certain agencies to pay for abortions in cases of rape and incest.
     On September 11, 1996, Dalton moved for summary judgment on
the basis that Amendment 68 was not an obstacle to state funding of
abortions in cases of rape or incest due to the federal district
court's August 9, 1996 order on remand following the Supreme
Courtþs decision in Dalton v. Little Rock Family Planning Services,
516 U.S. 474 (1996) (per curiam); and, secondly, because the State
had not expended public funds to provide for abortions in cases of
rape or incest.  Rather, according to Dalton, a private trust, the
Arkansas Medicaid Saving Trust (Medicaid Trust), had been created
for this purpose on August 19, 1996, and was being privately
funded.  According to the affidavit of Ray Hanley, DHS's Assistant
Director for Medical Services, which was attached in support of
Daltonþs motion, the privately-funded Medicaid Trust was to remain
in effect until either a state court determination that Amendment
68 was not a bar to Medicaid funding of abortions in cases of rape
or incest or until Amendment 68 was amended or repealed by a vote
of the people to avoid any conflict with federal Medicaid laws. 
Both Hanley and Dalton averred in affidavits attached in support of
the Dalton motion that no public funds had been used in Arkansas to
reimburse the cost of abortions in cases of rape or incest.
     On September 16, 1996, intervenors-appellees Little Rock
Family Planning Services, P.A., and Curtis E. Stover, M.D. (jointly
referred to as Family Planning), moved for summary judgment as a
matter of law on the theory that Amendment 68 did not bar
Arkansas's participation in the Medicaid program.  Family Planning
contended that the federal district court's August 9, 1996 order
enjoined the operation of Amendment 68 to the extent it conflicted
with federal law following the United States Supreme Court decision
in Dalton v. Little Rock Family Planning Services, supra.  That
decision mandated public funds to be used for abortions in cases of
rape and incest, according to both Dalton and Family Planning.
     Hodges responded to the motions and contended that the motions
should be denied because the United States Supreme Court had
reversed the decision of the Eighth Circuit Court of Appeals, which
had affirmed the federal district courtþs blanket invalidation of
Amendment 68.  See Dalton v. Little Rock Family Planning Services,
516 U.S. 474 (1996) (per curiam), revþg Little Rock Family Planning
Services, P.A. v. Dalton, 60 F.3d 497 (8th Cir. 1995).  Under
Hodgesþs theory, the Supreme Courtþs decision in Dalton mandated
Arkansas's removal from voluntary participation in the federal
Medicaid program so as to give full effect to Amendment 68.  In
addition, she contended that material issues of fact surrounded the
creation of the Medicaid Trust.
     On February 10, 1997, the trial court entered an order of
summary judgment granting the motions of Dalton and Family
Planning.  In that order, the court determined (1) that Dalton and
Family Planning were entitled to judgment based on the federal
district court's August 9, 1996 order, which only partially
preempted Amendment 68, and (2) that Hodges failed to create an
issue of fact with respect to whether the state executive branch or
public funds were involved in the privately funded Medicaid Trust. 
Furthermore, according to the court, executive branch involvement
did not present an issue of material fact because Amendment 68
proscribed only the public funding of abortions.
     On February 19, 1997, Hodges moved for a new trial and
contended that the chancery court's decision was clearly contrary
to the preponderance of the evidence and the law and attached a
February 16, 1997 article from the Arkansas Democrat-Gazette
entitled "Abortion Issue Now Seems Void," which, she maintained,
showed that Governor Huckabee's administration was instrumental in
creating the Medicaid Trust.  Hodges did not get a ruling on her
new trial motion, which was deemed denied thirty days later on
March 23, 1997.  Hodges then filed her notice of appeal.
     The problem with this appeal, as has already been noted, is
the unresolved claim of Hodges against Governor Huckabee, which
from all appearances, remains in effect.  Our Rule of Civil
Procedure 54(b) provides in part:
     In the absence of such determination and direction, any
     order or other form of decision, however designated,
     which adjudicates fewer than all the claims or the rights
     and liabilities of fewer than all the parties shall not
     terminate the action as to any of the claims or parties,
     and the order or other form of decision is subject to
     revision at any time before the entry of judgment
     adjudicating all the claims and the rights and
     liabilities of all the parties.
     We have said many times that the failure to comply with Rule
54(b) and adjudicate all claims against all parties is
jurisdictional and renders the matter not final for purposes of
appeal.  See, e.g., Richardson v. Rodgers, 329 Ark. 402, 947 S.W.2d 778 (1997); Tucker v. Lake View Sch. Dist. No. 25, 323 Ark. 693,
917 S.W.2d 530 (1996); State Farm Mut. Auto Ins. Co. v. Thomas, 312
Ark. 429, 850 S.W.2d 4 (1993).  Because a violation of Rule 54(b)
relates to the subject-matter jurisdiction of this court, we must
raise the issue on our own.  Richardson v. Rodgers, supra; Tucker
v. Lake View Sch. Dist. No. 25, supra; Reeves v. Hinkle, 321 Ark.
28, 899 S.W.2d 841 (1995); Cortese v. Atlantic Richfield, 317 Ark.
207, 876 S.W.2d 581 (1994).  Subject-matter jurisdiction cannot be
waived by the parties or by this court.  Dean v. Tallman, 331 Ark.
127, 959 S.W.2d 41 (1997).
     The February 10, 1997 order entered by the trial court does
not mention Hodges's complaint against Governor Huckabee, and
neither the abstract nor the record reflects that the governor
joined the motions for summary judgment filed by Dalton or Family
Planning.  In a similar case, this court recently held that
dismissal of an appeal was appropriate when all defendants were not
granted summary judgment, leaving claims against certain defendants
still pending. See Dean v. Tallman, supra.  In Dean, the precise
defect in the appeal was that certain city defendants had not
joined the summary-judgment motions filed by the state and county
defendants.  Disposition of the state and county motions left the
city claims unresolved, and we deemed dismissal of the appeal to be
required.  Id.
     We do observe that there is a "phantom" reference in the
abstract and record to an unnamed defendant's motion to dismiss
that was declared moot by the trial court in its summary-judgment
order.  No other information about this motion to dismiss is
disclosed in either the abstract or record, including any
information about whether Governor Huckabee was the defendant
involved.  Again, the summary-judgment order is silent as to
Governor Huckabee, who, Hodges maintains throughout, is an
important defendant because of his status as the state's chief
executive officer.
     In sum, though the trial court and the parties may have
intended to conclude the lawsuit by the summary-judgment order, the
trial courtþs order fails to dispose of Hodgesþs complaint against
Governor Huckabee.  Moreover, it does not include a proper
certification of the appeal to this court on the basis that there
is no just reason for delay, even though fewer than all the claims
have been resolved.  See Ark. R. Civ. 54(b).  This court has made
it clear that the fundamental policy behind Rule 54(b) is to avoid
piecemeal appeals.  Cortese v. Atlantic Richfield, supra. 
Accordingly, we dismiss this appeal without prejudice.
     In holding that the summary-judgment order is not a final,
appealable order under Rule 54(b), we take no position on the
merits of Hodgesþs claim against Governor Huckabee.  Absent a final
court order deciding that claim, we simply will not speculate on
the status of Hodgesþs complaint against Governor Huckabee or
assume that the summary-judgment order effectively resolves it as
well.
     Appeal dismissed without prejudice.