Monsanto Co. v. Arkansas State Plant Board

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          APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT [NO. 60CV-17-5964], HONORABLE CHRISTOPHER CHARLES PIAZZA, JUDGE

         Brett D. Watson, Attorney at Law PLLC, by: Brett D. Watson; Bryan Cave Leighton Paisner LLP, by: Elizabeth Blackwell; and Thompson Coburn LLP, by: Ryan Russell Kemper, for appellant.

         Leslie Rutledge, Att’y Gen., by: Jennifer L. Merritt, Senior Ass’t Att’y Gen., for appellees.

         OPINION

         JOSEPHINE LINKER HART, Associate Justice

          Monsanto Company ("Monsanto") appeals the decision of the Pulaski County Circuit Court. The circuit court dismissed Monsanto’s amended complaint against the Arkansas State Plant Board and its members (together, the "Plant Board") on the basis of sovereign immunity. We find portions of this matter to be moot, and as to the remainder, we reverse and remand for further proceedings consistent with this opinion.

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          I. Background

          Monsanto develops and sells products containing dicamba, a chemical compound effective against Palmer amaranth (pigweed), which is a pest weed common in Arkansas and other states. In 2016, Monsanto obtained federal and state regulatory approval for the in-crop use of a low-volatility dicamba herbicide, XtendiMax with VaporGrip Technology ("XtendiMax"), in Arkansas. Shortly thereafter, at a special meeting on November 21, 2016, the Plant Board passed a new regulation that reclassified XtendiMax from a Class A Pesticide to a Class H Pesticide and added date restrictions prohibiting the use of XtendiMax between April 15 and September 15 (the "2016 Promulgation"). Monsanto asserts that this rule effectively prohibited any in-crop use of XtendiMax for the 2017 growing season. Then, on November 9, 2017, the Plant Board promulgated a rule that would prohibit any in-crop use of dicamba herbicides in Arkansas between April 16 through October 31 of the 2018 growing season (the "2017 Promulgation"). The Plant Board asserts that the basis for these decisions was to prevent the devastation of the crops, foliage, honey production, and ornamental landscaping caused by dicamba-containing herbicides.

          After the 2017 Promulgation, Monsanto filed a complaint in the Pulaski County Circuit Court against the Plant Board and its members on October 20, 2017, and then amended its complaint on November 17, 2017. The amended complaint set forth seven alleged claims against the Plant Board: (1) violations of the Arkansas Pesticide Use and Application Act and the Arkansas Pesticide Control Act; (2) violations of the Arkansas Administrative Procedure Act; (3) a declaratory judgment that the Plant Board’s November 9, 2017 promulgation was ultra vires and invalid; (4) a federal due-process violation for Plant Board member Terry Fuller’s role in the promulgation process, which Monsanto alleged was illegally tainted by bias; (5) a separate federal due-process violation for infringement upon Monsanto’s vested property interest in its state and federal registrations and classifications for its products; (6) a Commerce Clause violation for the Plant Board’s unwritten requirement that pesticide registrants engage researchers from the University of Arkansas to complete two years of product testing before they can obtain regulatory approval for use of their products within the state; and (7) state and federal constitutional violations for the statutory process by which the Plant Board is comprised, which allows various "private interest groups" to each appoint a member to the Plant Board.

          Importantly, each of Monsanto’s claims sought injunctive or declaratory relief for alleged illegal or unconstitutional activity by the Plant Board and its members. Monsanto’s amended complaint did not seek an award of monetary damages in any respect. Additionally, while each of the claims in Monsanto’s sixty-two-page amended complaint is distinct, there is overlap between the asserted legal authority for those claims and the corresponding requests for relief. Generally speaking, Monsanto’s amended complaint asked the circuit court to do four things: (1) to declare the Plant Board’s 2016 Rule Promulgation illegal and enjoin its enforcement, (2) to declare the Plant Board’s 2017 Rule Promulgation illegal and enjoin its enforcement, (3) to prevent the Plant Board from requiring pesticide registrants to submit research conducted by researchers at the University of Arkansas in order to gain approval for use of the products within the State of Arkansas, and (4) to hold the composition of the Plant Board’s members and the current statutory process therefore unconstitutional.

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          On December 20, 2017, the Plant Board filed a motion to dismiss, arguing that Monsanto’s complaint should be dismissed as a matter of law based upon the State’s sovereign immunity. At the time, there were three acknowledged exceptions to the sovereign immunity-doctrine: (1) when the State is the moving party seeking specific relief, (2) when a plaintiff seeks to enjoin a state official from acting unlawfully, and (3) when an act of the legislature has created a waiver of immunity. See, e.g., Mitchem v. Hobbs, 2014 Ark. 233, 3-4, 2014 WL 2019278; Ark. Dep’t of Cmty. Corr. v. City of Pine Bluff, 2013 Ark. 36, at 4, 425 S.W.3d 731, 734; Bd. of Trs. of Univ. of Ark. v. Burcham, 2014 Ark. 61, at 3-4, 2014 WL 585981. In its motion to dismiss, the Plant Board argued that, contrary to the decisions reached in the aforementioned cases, the language contained in art. 5, § 20 of the Arkansas Constitution, "[t]he State of Arkansas shall never be made defendant in any of her courts," leaves no room for any exception to the State’s sovereign immunity. Therefore, the Plant Board argued, allowing Monsanto’s complaint to proceed in state court would violate art. 5, § 20 of the Arkansas Constitution.

          Then, on January 18, 2018, this court issued its decision in a separate case, Board of Trustees of University of Arkansas v. Andrews. 2018 Ark. 12, 535 S.W.3d 616. In Andrews, the majority held that the third of the three aforementioned sovereign immunity exceptions (legislative waiver) violated art. 5 § 20 of the Arkansas Constitution. The majority held:

[W]e conclude that the legislative waiver of sovereign immunity ... is repugnant to article 5, section 20 of the Arkansas Constitution. In reaching this conclusion, we interpret the constitutional provision, "The State of Arkansas shall never be made a defendant in any of her courts," precisely as it reads.

Andrews, 2018 Ark. 12, at 10, 535 S.W.3d at 622.

         Back to the case now at hand, on January 22, 2018, Monsanto filed its response to the Plant Board’s motion to dismiss. In its response, Monsanto argued that the claims set forth in its amended complaint alleged ultra vires conduct on the part of the Plant Board, and that Andrews had left the ultra vires exception to sovereign immunity intact. On February 9, 2018, the Plant Board filed its reply. The Plant Board’s reply acknowledged that sovereign immunity should not bar actions to enjoin ultra vires government conduct, even after Andrews, but argued instead that Monsanto’s amended complaint ...