Arkansas State Plant Board and Terry Walker v. McCarty

          APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT [NO. 60CV-17-6539] HONORABLE TIMOTHY D. FOX, JUDGE

          Leslie Rutledge, Att'y Gen., by: Jennifer L. Merritt, Sr. Ass't Att'y Gen., for appellants/cross-appellees.

          Ark Ag Law, PLLC, by: J. Grant Ballard; and Davidson Law Firm, by: David L. Gershner, for appellees/cross-appellants.

          Dover Dixon Horne PLLC, by: Monte D. Estes and Michael G. Smith, for amicus curiae, Ozark Mountain Poultry, Inc., and 147 Arkansas Farmers.

          COURTNEY HUDSON GOODSON, Associate Justice.

         Appellants/cross appellees Arkansas State Plant Board and Terry Walker, in his official capacity as the director of the Arkansas State Plant Board (the Board), appeal the Pulaski County Circuit Court's April 3, 2018 order declaring that the Board's April 15, 2018, dicamba cutoff rule is "void ab initio," and "null and void." Appellees/cross appellants, who are farmers Michael McCarty, Perry Galloway, Matt Smith, Greg Hart, Ross Bell, and Becton Bell (the Farmers), appeal the same order's dismissing with prejudice their first amended complaint on the basis of the Board's sovereign immunity. We dismiss the direct appeal as moot and dismiss as moot in part and reverse in part on cross appeal, and remand for further proceedings.

         I. Background

         The Board approves and regulates herbicides that Arkansas farmers may use to combat invasive plant species. Arkansas row crop farmers struggle with competition from Palmer amaranth, which is commonly known as pigweed. Over the years, pigweed has developed a resistance to traditional herbicides. Dicamba-based herbicides effectively control pigweed but may only be used on plants grown from seed produced specifically to resist dicamba.

         Dicamba is highly volatile, meaning that it has a tendency to evaporate and fall off-target and damage other plants that are not dicamba resistant. Dicamba was not approved for in-crop application in 2016. In 2017, the Board approved the use of what were believed to be less volatile formulations of dicamba-based herbicides for in-crop application. However, in 2017, the Board began investigating an unprecedented number of complaints of off-target dicamba herbicide injury. There was some dispute as to whether the improved dicamba-based herbicides were properly applied, or even if other dicamba-based herbicides were used. The Board therefore appointed a "Dicamba Task Force" to address the increased number of complaints and to propose rules for the use of dicamba by Arkansas farmers for the 2018 crop year. Pursuant to the task force's recommendations, the Board proposed a new rule that would prohibit the use of dicamba from April 16 through October 31 of each year.

         The Farmers used dicamba-based herbicide in 2017 and wished to use herbicide formulations containing dicamba in 2018. On September 29, 2017, the Farmers filed a petition for rulemaking. In their petition, the Farmers sought (1) the implementation of a May 25 cutoff date for dicamba application, (2) a requirement that there be a one-mile buffer between a dicamba application and any growing crop that is susceptible to dicamba injury, unless the applicator receives a written waiver for the application, (3) the creation of a special application permit for the growing season use of dicamba in circumstances of severe pigweed infestation; and (4) the instatement of a requirement that any individual or entity applying dicamba after April 15 must carry a mandatory liability insurance policy in the amount of $500, 000. The Board denied the petition on October 19, 2017.

         On November 9, 2017, the Board voted to ban the in-crop use of dicamba-based herbicides after April 15, 2018.^[1] On November 10, 2017, the Farmers filed suit in the Pulaski County Circuit Court seeking declaratory and injunctive relief and judicial review of administrative acts. The Farmers subsequently filed an amended complaint alleging that (1) Arkansas Code Annotated § 2-16-206 is an unconstitutional delegation of legislative appointment power to private industry, (2) Board members violated Arkansas Code Annotated § 25-15-209(a) by having unannounced meetings and communicating with third parties about the proposed dicamba ban, (3) the Board's refusal to initiate rule-making as requested in their petition and the Board's proposed April cutoff date were arbitrary and capricious, and (4) third-party contacts and procedural irregularities provided grounds for them to conduct discovery and present additional evidence to the trial court.

         On January 19, 2018, the Arkansas Legislative Council approved the rule prohibiting dicamba usage from April 16 through October 31, and the new rule took effect ten days later. On February 15, 2018, the Board filed a motion to dismiss the Farmers' amended complaint, arguing that (1) the Farmers lacked standing, (2) the Farmers' claims were not ripe, (3) the Farmers failed to perfect service of process on the Board, and (4) the Farmers' claims were barred by sovereign immunity. Notably, the Board conceded that Andrews did not "explicitly or implicitly overrule the line of cases that allow lawsuits for injunctive relief where a state official or agency is acting unlawfully, unconstitutionally, or otherwise outside the scope of his/its authority (ultra vires)." See Bd. of Trs. of Univ. of Ark. v. Andrews, 2018 Ark. 12, 535 S.W.3d 616. However, the Board argued that the Farmers' complaint failed to allege sufficient facts to plead any unlawful or unconstitutional violation. The circuit court granted the Board's motion to dismiss on the basis of the asserted sovereign immunity defense. The circuit court dismissed with prejudice the Farmers' constitutional claims regarding the selection and procedures of the Board. The circuit court also determined that the Farmers alleged no facts with respect to their administrative rulemaking appeal that would establish an exception to sovereign immunity. The circuit court then determined that the Board's sovereign immunity resulted in a violation of the Farmers' due process rights, because the Farmers lacked any way to challenge the Board's actions. Therefore, on April 3, 2018, the circuit court ruled that the Board's rule was "void ab initio" and "null and void" as to the Farmers. The Board filed a notice of appeal as to the finding that the Board's rule was "void ab initio," and "null and void." The Farmers filed a cross appeal in which they appealed the circuit court's with prejudice dismissal of their complaint and the dismissal with prejudice of their allegations of constitutional violations.^[2]

         II. Standard of Review

         In reviewing a circuit court's decision on a motion to dismiss, we treat the facts alleged in the complaint as true and view them in the light most favorable to the plaintiff. Hodges v. Lamora, 337 Ark. 470, 989 S.W.2d 530 (1999). Furthermore, we look only to the allegations in the complaint and not to matters outside the complaint. Id. However, we treat only the facts alleged ...