Category: Arkansas Legislature

Procedural Lessons from a $48 Million Dollar Appeal

~ Tasha C. Taylor ~ 1 Comment

On December 8, 2011, the Arkansas Supreme Court handed down its decision in Bayer Cropscience LP v. Schafer, 2011 Ark. 518.  The Court’s decision is significant for a number of reasons, not the least of which are a couple of procedural issues that might be easily overlooked upon first glance in light of the Court’s holding overruling Arkansas’s punitive damages caps.

Punitive Damages Cap Declared Unconstitutional

“We hold that section 16-55-208 is unconstitutional under article 5, section 32 as it limits the amount of recovery outside the employment relationship.”

In a decision that affirmed a $48 million dollar judgment in favor of Arkansas rice farmers, the Arkansas Supreme Court ruled that the punitive damage limitations contained in Arkansas Code Annotated section 16-55-208 are unconstitutional. Schafer, 2011 Ark. 518, at 12.

That statute, passed by the Arkansas General Assembly as part of the Civil Justice Reform Act of 2003, provided for each plaintiff a cap on punitive damages in the amount of $250,000 or three times the amount of compensatory damages (not to exceed $1,000,000). See Ark. Code Ann. § 16-55-208.

In its opinion, the Arkansas Supreme Court observed that the Arkansas Constitution gives the Arkansas General Assembly the power to limit the amount of recovery “only in matters arising between employer and employee.” Schafer, 2011 Ark. 518, at 12.  Article 5, section 32 of the Arkansas Constitution, as amended by amended 26, provides the following:

The General Assembly shall have the power to enact laws prescribing the amount of compensation to be paid by employers for injuries to or death of employees, and to whom said payment shall be made.  It shall have power to provide the means, methods, and forum for adjudicating claims arising under said laws, and for securing payment of the same. Provided that otherwise no law shall be enacted limiting the amount to be recovered for injuries resulting in death or for injuries to persons or property; and in case of death from such injuries the right of action shall survive, and the General Assembly shall prescribe for whose benefit such action shall be prosecuted.

Ark. Const art. 5, § 32.

On appeal, Bayer argued that article 5, section 32 of the Arkansas Constitution referred only to compensatory damages and not to punitive damages.  The Arkansas Supreme Court, however, disagreed: “Although compensatory and punitive damages serve differing purposes, an award of punitive damages is nonetheless an integrant part of ‘the amount recovered for injuries resulting in death or for injuries to persons or property.’” Schafer, 2011 Ark. 518, at 12 (quoting Ark. Const art. 5, § 32).  Accordingly, the Arkansas Supreme Court held that section 16-55-208 is unconstitutional under the Arkansas Constitution because it limits the amount of recover outside the employment relationship, which is expressly prohibited by article 5, section 32.

Possible Departure from Arkansas’s Strict Preservation Rules?

The ruling on the punitive damages caps is monumental in and of itself, but what makes it even more interesting is the Court’s analysis of how it was able to reach the merits of that decision, which was an issue that split the Court 6-1.

In her concurring opinion, Justice Karen Baker explained that while she agrees with the outcome reached by the majority, she would not have reached the merits of the constitutionality of Arkansas Code Annotated section 16-55-208 because she did not believe that issue was preserved for appellate review. Schafer, 2011 Ark. 518, at 24–25 (Baker, J., Concurring).  Justice Baker argued that because the circuit court ruled on the constitutionality of that statute from the bench and entered no written opinion concerning that issue, it was not preserved for appellate review. Id.  In support of her opinion, Justice Baker cited to a number of cases in which the Arkansas Supreme Court has previously declined to rule on constitutional issues that had been ruled on from the bench only and that had not been included in the written orders. See, e.g., Boellner v. Clinical Study Ctrs., LLP, 2011 Ark. 83, at 23, ___ S.W.3d ___, ___ (holding that the constitutional issue presented in that case was not preserved for appellate review because “[a]lthough the circuit court ruled on this issue from the bench, the final, written order did not address this issue.”).

In footnote 5, Justice Courtney Hudson Goodson, writing for the majority, responded to Justice Baker’s concurring opinion concerning the issue of the constitutionality of the punitive damages cap: “Despite the concurring justice’s protestations to the contrary, it is without question that the issue concerning the constitutionality of the statutory cap on punitive damages is preserved for appeal.”  Schafer, 2011 Ark. 518, at 14 n.5.  In this case, the constitutional issue was raised in a pretrial motion and discussed in a hearing, at which time the circuit court orally declared from the bench that the statute in question was unconstitutional.  According to the Arkansas Supreme Court, its preservation rules “require nothing more.”  Id.

The majority went on to explain that “[a]lthough considered the better practice for a circuit court to explain its decision, findings of fact and conclusions of law are not necessary with regard to decisions on motions.” (emphasis added). Id.  In footnote 5, the majority further explained that if the concurrence was correct in its view, then the Court would also have been precluded from reaching the merits of the circuit court’s decisions in a couple of other issues regarding motions in this appeal, as the circuit court also disposed of those other motions by ruling from the bench. Id.  The Court’s conclusion is that “the circuit court’s failure to specify the ground upon which it found the statute unconstitutional does not deter us from performing our duty to review the circuit court’s decision.” Id.

Although couched as a decision rooted in precedent, Justice Baker seemed to view the Arkansas Supreme Court’s decision to reach the merits of the constitutional issue in this case as a departure from the Court’s strict preservation rules.  It will be interesting to see whether the Schafer preservation rule is followed by the Court in decisions to come.  Regardless of whether it is cited in future decisions, there can be no doubt that it will be cited in numerous appellant’s briefs in the months and years to come.

Perfecting the Notice of Appeal in Light of Posttrial Motions

“A notice of appeal must be judged by what it recites and not what it was intended to recite.” 

Among other arguments on appeal, Bayer also challenged the $42,000,000 punitive damages award as excessive under the U.S. Constitution.  The Arkansas Supreme Court refused to reach this issue because it held that it was not preserved for appellate review. Schafer, 2011 Ark. 518, at 23.

Bayer made its arguments to the circuit court concerning the excessiveness of the damages award in its posttrial motion for new trial and remittitur. Id.  Because the circuit court did not take action on the posttrial motion within the 30-day window allowed pursuant to Rule 4(b)(1) of the Arkansas Rules of Appellate Procedure—Civil, that motion was deemed denied at the expiration of the 30-day period. Id. at 23–24.  When the Bayer defendants filed their notices of appeal (all of which were identical), they failed to state in the notices of appeal that the appeal was being sought from both the judgment that was entered as well as the denial of the motion for new trial and remittitur. Id.  The Arkansas Supreme Court held that it is necessary to file a notice of appeal from the denial of the posttrial motion in order to appeal from the issues raised therein. Id. at 24.  According to the Court, unless the notice of appeal references both the final judgment and the deemed-denied ruling, the only appealable matter will be the original order. Id.

The following is a timeline of the post-trial procedural events that occurred in this case:

  • May 5—Judgment Entered
  • May 19—Bayer timely filed motions for judgment notwithstanding the verdict, new trial, and remittitur.
  • June 18—Motions deemed denied.
  • July 19—Each Bayer defendant filed separate and timely notices of appeal from the judgment entered on May 5, 2010.

See Schafer, 2011 Ark. 518, at 8.

To have preserved this issue for appeal, each of the Bayer defendants could have explained in their notices of appeal that they were appealing from both the May 5th judgment and the lower court’s denial of its motion for new trial and remittitur in the notice of appeal it filed on July 19th.  Another option would have been to file a notice of appeal within 30 days of the date the judgment was entered in this matter.  Then, following the deemed-denied date of June 18th, Bayer could have filed an amended notice of appeal within 30 days of June 18th that indicated that it was appealing from both the May 5th judgment and the denial of its motion for new trial and remittitur.

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Fite Petition for Writ of Prohibition Denied Without Prejudice

~ Tasha C. Taylor

The Arkansas Supreme Court handed down a Formal Order today denying Tommy L. Fite’s Petition and amended petition for writ of prohibition without prejudice.

Fite is a Republican candidate for the Arkansas House of Representatives in District 83.  Last week, Pulaski County Circuit Judge Collins Kilgore ruled that Fite was ineligible for the ballot because he plead guilty to a misdemeanor bribery charge in 1984.  Judge Kilgore ordered election officials not to count votes for Fite.  Fite filed a Petition for Writ of Prohibition and an Amended Petition for Writ of Prohibition with the Arkansas Supreme Court.  In response, Michael Grulkey filed a Response to Fite’s Petition for a Writ of Prohibition and Motion for Rule 11 Sanctions Against Fite.  Both the Petition and Motion for Rule 11 Sanctions were denied by today’s order.

The pleadings filed in the Arkansas Supreme Court can be viewed here:

The seat for which Fite is running represents Crawford and Franklin counties and is currently held by Republican Beverly Pyle.  Democrat Leslee Milam Post is also a candidate for that position.

Elections will be held tomorrow, November 2, 2010.

UPDATE: Arkansas Supreme Court Clarifies Original and Appellate Jurisdiction for Constitutional Amendments: Forrester v. Daniels.

~ Andy Taylor

UPDATE Below the Jump:

The Arkansas Supreme Court handed down its decision today in Forrester v. Daniels, clarifying that it has original jurisdiction over challenges to constitutional amendments that are initiated by the citizens, but appellate jurisdiction over challenges to constitutional amendments referred by the legislature. Forrester v. Daniels, 2010 Ark. 397.  This has been the rule for many years, but had been called into question after amendment 80 to the Arkansas Constitution became effective on July 1, 2001. See Becker v. McCuen, 303 Ark. 482, 708 S.W.2d 71 (1990).

Because the Court did not reach the merits of the Petitioner’s case, this blog post will not discuss the merits in detail, but will only address them briefly.  The proposed amendment at issue here deals with the maximum interest rate that can be charged by various entities, and also deals with the power of governmental units to issue bonds. Forrester, 2010 Ark. 397, at 2-4.  The gist of the challenge is that the legislature attempted to cover too many issues in a single proposed amendment.  Id. at 3-4.

The importance of this case, however, is more procedural in nature.  Because, as discussed above, the status of the Supreme Court’s jurisdiction (original or appellate) was in doubt after the enactment of Amendment 80, the Petitioner filed nearly identical actions in the Pulaski County Circuit Court and the Arkansas Supreme Court, both on the same day.

A proposed constitutional amendment may appear on the ballot by one of two methods.  The first is by referral from the legislature, the requirements of which are provided in at Arkansas Constitution Article 19, § 22.  The second method is through the initiative and referendum power reserved to the people.  This procedure is outlined at Arkansas Constitution Amendment 7.

Amendment 7, dealing with amendments resulting from initiatives of the people, provides that “[t]he sufficiency of all state-wide petitions shall be decided in the first instance by the Secretary of State, subject to review by the Supreme Court of the State, which shall have original and exclusive jurisdiction over all such causes.” Ark. Const. Amend. 7.  Article Nineteen, Section 22 of the Arkansas Constitution has no such provision, so the Arkansas Supreme Court in Becker held that it did not have original jurisdiction, but had only appellate jurisdiction pursuant to Article 7, § 4 of the Arkansas Constitution. See Becker, 303 Ark at 482, 708 S.w. 2d at 71.

The reason this is an issue in Forrester is that Article 7 was repealed by Amendment 80 of the Constitution.  Amendment 80 provides, in part, that “[t]he Supreme Court shall have . . . [o]riginal jurisdiction to determine sufficiency of state initiative and referendum petitions and proposed constitutional amendments.” Ark. Const. Amend. 80, § 2(D)(4).  Because the provision conferring original jurisdiction on the Arkansas Supreme Court includes the phrase “and proposed constitutional amendments,” the Petitioner argued that the Arkansas Supreme Court now has original jurisdiction over all proposed constitutional amendments, and not just those resulting from initiatives. See Forrester, supra.

In a unanimous opinion, the Arkansas Supreme Court disagreed.  The Court held in Forrester that the phrase “and proposed constitutional amendments” must be read in the context of the phrase “to determine sufficiency of.” Forrester, 2010 Ark. 397, at 8-9.  According to the Court, that phrase only makes sense if “proposed constitutional amendments” refers only to amendments that result from initiatives from the people, as those are the only types of amendments subject to a sufficiency challenge. Id.  For proposed amendments referred from the legislature, the only question is “whether the procedures governing the method for the legislature to propose an amendment have been followed.” Id.

In an interesting paragraph at the end of the opinion, the Court then seemed to look at its own rules to help it interpret the constitutional issue.  The Court noted that it had amended its rules to conform to the changes resulting from Amendment 80.  After the changes, Rule 6-5 read as follows:

(a) Original Jurisdiction. The Supreme Court shall have original jurisdiction in extraordinary actions as required by law, such as suits attacking the validity of statewide petitions filed under Amendment 7 of the Arkansas Constitution or, where the Supreme Court’s contempt powers are at issue.

Ark. Sup. Ct. R. 6-5(a) (2010).

In Forrester, the Court held its conclusion was “further bolstered” by the fact that it had amended the rules in response to Amendment 80, but had done so “in a way to indicate that our jurisdiction of the instant challenge is now original.” Id. at 9-10.  Arkansas appellate lawyers should bear this in mind when dealing with procedural issues before the Arkansas Supreme Court, as the Court seems willing to look to its own rules to help it interpret constitutional provisions.

Continue reading “UPDATE: Arkansas Supreme Court Clarifies Original and Appellate Jurisdiction for Constitutional Amendments: Forrester v. Daniels.” →

The End of an Era: Final Bound Volume of Arkansas Reports Issued

~ Tasha C. Taylor

In a press release dated June 28, 2010, the Administrative Office of the Courts announces that the final bound volume of the Arkansas Reports and Arkansas Appellate Reports has been issued.

The final issue of the Arkansas Reports comes one hundred and seventy-three years after its first publication.  Arkansas is the first state in the country to eliminate the use of bound volumes of the appellate courts’ opinions. See Act 221 of 2009.  The final bound volume of the Arkansas Reports includes decisions from November 5, 2008 to February 12, 2009.  All opinions of the Arkansas Supreme Court and Court of Appeals handed down on or after February 14, 2009 are officially published as electronic versions, which can be found on the judiciary’s web site.

 

Legislative Changes to Appellate Court Filing Fees are Effective July 1, 2009

~ Tasha C. Taylor

The Arkansas Supreme Court posted a reminder yesterday that the “Court Technology Improvement Act of 2009” (ACT 328 (HB 1353)) will go into effect next week, on July 1, 2009.

Pursuant to the Act, the Supreme Court Clerk is permitted to charge the following fees:

• A fee of $150.00 for a certified question from a federal court;

• A fee of $25.00 for each petition for rehearing filed;

• A “court technology fee” of $15.00 for every civil action or misdemeanor case filed in either the Court of Appeals or the Supreme Court.

• The Clerk of the Supreme Court shall be paid by the appellant a fee of $150.00 in all civil actions and misdemeanor cases.

• The $150.00 filing fee and the $15.00 “court technology fee” shall be remitted in one sum of $165.00.

• These fees go into effect on July 1, 2009.

Rule 5-2 Rewritten: (1) Arkansas Becomes First State with Electronic Official Reports; (2) Court Abandons Use of “Unpublished” Decisions

~ Tasha C. Taylor ~ 2 Comments

In today’s per curiam (dated May 28, 2009), the Arkansas Supreme Court announces two significant changes to appellate practice in Arkansas with the adoption of the Court’s new Rule 5-2.

(1) Arkansas Becomes First State with Electronic Official Reports
First, “effective July 1, 2009, the electronic version of appellate decisions posted on the Arkansas Judiciary website will be the official report of those decisions.”  With this decision, Arkansas will become “the first state in the nation to publish and distribute the official report of its appellate decisions electronically.”  

When the Court launches the new format for its official reports this summer, the searchable database maintained by the Reporter of Decisions will include all opinions issued after February 14, 2009, which is the closing date for the final volumes of the Arkansas Reports and the Arkansas Appellate Reports (375 Ark./104 Ark. App.).  Arkansas Supreme Court Rule 5-2 has been rewritten to reflect these changes.

(2) Court Abandons Use of “Unpublished” Decisions
Second, the Court’s change to Rule 5-2 “abandons the distinction between published and unpublished opinions and makes every Supreme Court and Court of Appeals opinion issued after July 1, 2009, precedent.”

In adopting this change, the Court notes that the General Assembly had expressed its view on this matter in Act 162 of 2009.  For a discussion of the effects of the passage of Act 162 of 2009 earlier this year, see Arkansas General Assembly Revives Anastasoff Controversy–Pondering the Effect of Act 162.

For more about today’s per curiam and Act 162, view Rep. Steve Harrelson’s May 28, 2009 blog post at www.underthedome.com.

Arkansas General Assembly Revives Anastasoff Controversy–Pondering the Effect of Act 162

~ Tasha C. Taylor ~ 2 Comments

273659781_159The ability of courts to hand down “unpublished decisions” has long been the subject of much debate in Arkansas, as well as in other jurisdictions. See, e.g., Williams v. State, 351 Ark. 215, 91 S.W.3d 54 (2002) (holding that appellant lacked standing to challenge constitutionality of the the Court Rule permitting the publication of unpublished decisions), cert. denied, 539 U.S. 907 (2003); see also Anastasoff v. U.S., 223 F.3d 898, (8th Cir. 2000), vacated on rehearing en banc, 235 F.3d 1054 (8th Cir. 2000).

The Arkansas 87th General Assembly recently passed SB33 (by Senator R. Thompson and Representative Harrelson), now Act 162, which might very well put an end to this debate in Arkansas.

This new law purports to amend Arkansas Supreme Court Rule 5-2(d), which provides that opinions rendered by the Court of Appeals as “not designated for publication . . . shall not be cited, quoted, or referred to by any court or in any argument, brief, or other materials presented to any court[.]” Ark. Sup. Ct. R. 5-2(d) (2009).

The adoption of this Act as law by the Arkansas General Assembly comes on the heels of the Arkansas Supreme Court’s rejection of a similar change to the Rule just last year.  In a per curiam released on January 10, 2008, the Court announced that it was declining “by a vote of 4 to 3” to approve the proposed change to Rule 5-2 that was recommended by the Arkansas Supreme Court Committee on Civil Practice.  The per curiam stated that Chief Justice Hannah, Justice Brown, and Justice Imber would approve the Committee’s proposed change to the rule.

While the legislature’s action might seem to create a separation of powers issue, note that the Act provides that it was passed with the authority granted to the legislature by Amendment 80 to the Arkansas Constitution.  Section 9 of Amendment 80 provides the following:

§ 9. Annulment or amendment of rules.

Any rules promulgated by the Supreme Court pursuant to Sections 5, 6(B), 7(B), 7(D), or 8 of this Amendment may be annulled or amended, in whole or in part, by a two-thirds (2/3) vote of the membership of each house of the General Assembly.

Furthermore, the Arkansas Supreme Court has recognized that its authority to promulgate rules of procedure is not exclusive:

The Arkansas Constitution confers upon the courts the inherent authority to promulgate rules of procedure. Miller v. State, 262 Ark. 223, 555 S.W.2d 563 (1977). However, Article 7, sections 1 and 4, “do not expressly or by implication confer on this Court exclusive authority to set rules of court Procedure.” Jackson v. Ozment, 283 Ark. 100, 101, 671 S.W.2d 736, 738 (1984) overruled on other grounds by Weidrick v. Arnold, 310 Ark. 138, 835 S.W.2d 843 (1992). The court shares this authority with the General Assembly. St. Clair v. State, 301 Ark. 223, 783 S.W.2d 835 (1990); Curtis v. State, 301 Ark. 208, 783 S.W.2d 47 (1990). Thus, it is not a violation of separation-of-powers principles for the legislature to enact statutes pertaining to rules of procedure, St. Clair v. State, supra, although such statutes may be superseded by the rules promulgated by the judiciary. See Casement v. State, 318 Ark. 225, 884 S.W.2d 593 (1994); Weidrick v. Arnold, supra.

State v. Lester, 343 Ark. 662, 668, 38 S.W.3d 313, 316 (2001).

It seems that on the 91st day following the legislature’s adjournment, Act 162’s amendment to the Supreme Court Rule might very well have the intended effect of permitting attorneys to rely on unpublished decisions . . . unless the Arkansas Supreme Court promulgates a rule superseding it. See Reeves v. State, Reeves v. State, 374 Ark. 415, — S.W.3d —- (2008) (recognizing that Amendment 7 to the Arkansas Constitution provides that Acts of the General Assembly not containing an emergency clause or a specified effective date become effective on the ninety-first day after the legislature adjourns).  With the recent retirement of Justice Glaze and the appointment of Justice Wills to the Court, it might very well be that the decision of the Arkansas General Assembly is now favored by a majority of the Arkansas Supreme Court.