Can the Arkansas Public Employees Retirement System sue to recover overpayments to deceased retirees without waiving the State's sovereign immunity?

Plain-English summary

Duncan Baird, the Executive Director of APERS, asked the AG (following up on a question originally posed by his predecessor) whether the agency could sue to recover overpayments made to retirees after death without waiving the State's sovereign immunity. Two questions:

1. Would a lawsuit by APERS to collect overpayments waive sovereign immunity?
2. If so, what other recovery methods exist?

The AG answer was hedged on both questions, primarily because the law was in flux after the Arkansas Supreme Court's 2018 decision in Bd. of Trustees of Univ. of Ark. v. Andrews.

Pre-Andrews law. The Arkansas Supreme Court had recognized three exceptions to sovereign immunity:

1. When the State is the moving party seeking specific relief.
2. When the legislature has created a specific waiver.
3. When a state agency is acting illegally or refusing to perform a ministerial duty.

Under exception (1), older cases like LandsnPulaski, LLC v. Arkansas Dep't of Corrections, 372 Ark. 40 (2007), said the State could not raise sovereign immunity as a defense to a counterclaim or offset when the State itself initiated the action. So APERS, as the moving party, would have been arguably exposed to a counterclaim defense.

The Andrews decision changed the landscape. Bd. of Trustees of Univ. of Ark. v. Andrews, 2018 Ark. 12, held that "the legislative waiver of sovereign immunity in [the Arkansas Minimum Wage Act] is repugnant to article 5, section 20 of the Arkansas Constitution." In other words, the General Assembly cannot waive sovereign immunity. The AG noted that this "would seem logically inconsistent" with allowing a state agency to do so by filing suit. So the older "State as moving party" cases are now of questionable validity.

The AG's bottom line. "At best, older cases impliedly suggest that the answer to your question might be yes." That is far from a clean go-ahead. APERS would be operating in legal uncertainty if it sued.

On Question 2. The AG listed no alternative recovery methods. She said "[t]he appropriate action for recouping overpayments must be determined based upon a case's circumstances" and offered her office's advice on particular cases.

The request said state agencies report losses of $1,000 or more to Legislative Audit and that an auditor had provided APERS a guideline calling for necessary collection action. The AG referred APERS to case-specific advice in light of that request.

Currency note

This opinion was issued in 2019. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What did Andrews actually decide?
A: The Arkansas Supreme Court held in Bd. of Trustees of Univ. of Ark. v. Andrews, 2018 Ark. 12, that the General Assembly cannot legislatively waive the State's sovereign immunity. The Arkansas Minimum Wage Act had purported to allow employees to sue the State for unpaid wages; the Court struck that waiver as unconstitutional under Ark. Const. art. 5, § 20.

Q: How does Article 5, § 20 read?
A: "The State of Arkansas shall never be made defendant in any of her courts." This is the constitutional source of Arkansas's sovereign immunity rule. Andrews read it as absolute against legislative waivers.

Q: Why does Andrews affect APERS's ability to sue?
A: It does not directly bar APERS from being a plaintiff. But the older cases that allowed counterclaims and offsets when the State sued first relied on a "waiver" theory. If the Court now rejects waiver across the board, those cases are doctrinally weakened.

Q: Has the Court resolved this uncertainty since 2018?
A: As of May 2019 when this opinion was issued, the Court had "not since had occasion to address a 'waiver' by the State 'when the State is the moving party seeking specific relief.'" That hold-and-wait posture is what the AG was reporting.

Q: What practical alternatives might APERS have?
A: The opinion does not identify alternatives. It says the proper recovery action depends on each case's circumstances and offers advice from the AG's office.

Q: What's the deal with Legislative Audit?
A: APERS's request said agencies must report losses of $1,000 or more to Legislative Audit and referred to an auditor's fiscal guideline about collection action. The AG said any recovery approach requires a case-specific assessment.

Background and statutory framework

Arkansas's sovereign immunity is grounded in Ark. Const. art. 5, § 20: "The State of Arkansas shall never be made defendant in any of her courts." Before 2018, the courts had recognized three exceptions: State as moving party, legislative waiver, and illegal/ministerial-action doctrine.

Bd. of Trustees of Univ. of Ark. v. Andrews, 2018 Ark. 12, removed legislative waiver from that list. The AG said it called the continued validity of older State-as-plaintiff cases into question. Ark. State Police Ret. Sys. v. Sligh, 2017 Ark. 109, was a related case decided shortly before Andrews that recited the three-exception framework.

The older "State as moving party" cases, LandsnPulaski (2007), Fireman's Ins. Co. (1990), Parker v. Moore (1953), McCain v. Crossett Lumber (1943), and Arkansas State Highway Commission v. Partain (1937), all rested on the proposition that the State, by suing, opens itself to defensive counterclaims. After Andrews, the doctrinal foundation of that proposition is uncertain.

Citations

• Ark. Const. art. 5, § 20 (sovereign immunity)
• Bd. of Trustees of Univ. of Ark. v. Andrews, 2018 Ark. 12, 535 S.W.3d 616
• Ark. State Police Ret. Sys. v. Sligh, 2017 Ark. 109, 516 S.W.3d 241
• LandsnPulaski, LLC v. Arkansas Dep't of Corr., 372 Ark. 40, 269 S.W.3d 793 (2007)
• Fireman's Ins. Co. v. Ark. State Claims Comm'n, 301 Ark. 451, 784 S.W.2d 771 (1990)
• Parker v. Moore, 222 Ark. 811, 262 S.W.2d 891 (1953)
• McCain v. Crossett Lumber Co., 206 Ark. 51, 174 S.W.2d 114 (1943)
• Arkansas State Highway Commission v. Partain, 193 Ark. 803, 103 S.W.2d 53 (1937)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2019-025
May 28, 2019

Duncan Baird, Executive Director
Arkansas Public Employees Retirement System
One Union National Plaza
124 W. Capitol Ave., Suite 400
Little Rock, AR 72201

Dear Mr. Baird:

This is in response to former Executive Director Gail Stone's request for an opinion on the following questions, which I have paraphrased slightly, regarding overpayments that are made to deceased individuals before the Arkansas Public Employees Retirement System (APERS) learns of the retiree's death:

1) Would a court action, initiated by APERS to collect overpayments, waive the State's sovereign immunity?
2) If so, are you aware of any other manner in which APERS could recoup those overpayments without jeopardizing the State's sovereign immunity?

As background for these questions, the request for my opinion notes that state agencies are required by statute to report losses of $1,000 or more to Legislative Audit and that a legislative auditor has provided APERS with a fiscal guideline that imposes a duty on agencies to take the necessary action to collect such losses.

RESPONSE

With regard to your first question, there is case law suggesting that when the State of Arkansas is the moving party seeking specific relief, it might not be able to raise the defense of sovereign immunity. The Arkansas Supreme Court has variously referred to this as a "waiver of" or an "exception to" sovereign immunity. But the continued validity of those cases is questionable following the Court's ruling in Bd. of Trs. of Univ. of Ark. v. Andrews that the General Assembly cannot waive the State's immunity. Thus, at best, older cases impliedly suggest that the answer to your question might be yes.

As for your second question, the appropriate action for recouping overpayments must be determined based upon a case's circumstances. My office is available to advise in this regard, in accordance with the guideline referenced in Ms. Stone's request for my opinion.

DISCUSSION

Question 1: Would a court action, initiated by APERS to collect overpayments, waive the State's sovereign immunity?

The Arkansas Supreme Court has suggested that sovereign immunity can be "waived" in certain very limited instances:

This court has held that the doctrine of sovereign immunity is rigid but that it may be waived in limited circumstances. [Citation omitted]. This court has recognized that a claim of sovereign immunity may be surmounted in the following three instances: (1) when the State is the moving party seeking specific relief; (2) when an act of the legislature has created a specific waiver of sovereign immunity; and (3) when the state agency is acting illegally or if a state agency officer refuses to do a purely ministerial action required by statute. [Citation omitted].

In Andrews, the Court held that the General Assembly does not have the power to waive the State's immunity under Article 5, section 20. The Court has not since had occasion to address a "waiver" by the State "when the State is the moving party seeking specific relief[.]" Older cases previously suggested that Article 5, section 20 does not prohibit the State from waiving immunity by seeking specific relief. But the continued validity of those cases is questionable. Indeed, it would seem logically inconsistent to hold that the General Assembly cannot waive sovereign immunity, but a state agency can by filing certain actions. Thus, at best, older case law impliedly suggests that the answer to your question might be yes.

Question 2: If so, are you aware of any other manner in which APERS could recoup those overpayments without jeopardizing the State's sovereign immunity?

The appropriate action for recouping overpayments must be determined case by case, based upon the particular attendant circumstances. My office is available to advise in this regard, in accordance with the guideline referenced in Ms. Stone's request for my opinion.

Sincerely,

LESLIE RUTLEDGE
Attorney General

1. 2018 Ark. 12, 535 S.W.3d 616.

2. Article 5, section 20 of the Arkansas Constitution states that "[t]he State of Arkansas shall never be made defendant in any of her courts." Ark. Const. art. 5, § 20 (Repl. 2004).

3. 2018 Ark. 12, *5-6, 535 S.W.3d 616, 619-20 (emphasis added). See also Ark. State Police Ret. Sys. v. Sligh, 2017 Ark. 109, 516 S.W.3d 241.

4. 2018 Ark. 12 at *10, 535 S.W.3d at 622 (concluding that "the legislative waiver of sovereign immunity in [the Arkansas Minimum Wage Act] is repugnant to article 5, section 20 of the Arkansas Constitution.").

5. E.g., LandsnPulaski, LLC v. Arkansas Dep't of Corr., 372 Ark. 40, 43, 269 S.W.3d 793, 796 (2007) (observing that "when the State is the moving party seeking specific relief[,]" the State is prohibited from raising the defense of sovereign immunity as a defense to a counterclaim or offset); Fireman's Ins. Co. v. Ark. State Claims Comm'n, 301 Ark. 451, 784 S.W.2d 771 (1990); Parker v. Moore, 222 Ark. 811, 812, 262 S.W.2d 891, 892 (1953) (citing McCain v. Crossett Lumber Co., 206 Ark. 51, 174 S.W.2d 114 (1943) and Arkansas State Highway Commission v. Partain, 193 Ark. 803, 103 S.W.2d 53 (1937)).