Arkansas Lottery Commission v. Alpha Marketing/Dissent Goodson
COURTNEY HUDSON GOODSON, Justice, dissenting. I dissent because the circuit court did not err in ruling that the Commission waived the defense of sovereign immunity. In reaching a contrary conclusion, the majority rests its decision on a glaring factual error. Worse, it reverses based on an argument that was neither raised nor ruled upon below. Although I fully join the dissenting opinion authored by Justice Danielson, I write separately to underscore the fallacy of the majority's decision.
Sovereign immunity can be surmounted where the state is the moving party seeking specific relief. See Weiss v. McLemore, 371 Ark. 538, 268 S.W.3e 897 (2007). In its answers to the original and first amended complaints, as well as in both motions to dismiss, the Commission consistently maintained that Alpha Marketing's trademarks were invalid, and it persistently sought specific relief for the trademarks to be cancelled. By taking this position, the Commission manifestly indicated that it was ready, willing, and eager to litigate the validity of Alpha Marketing's trademarks with the goal of cancelling their registrations. This much is clear. Yet, the majority holds that the Commission's waiver evaporated, as if by magic, because the Commission dropped the request for specific relief in its answer to the second amended complaint. This position is factually untenable because the Commission filed its answer to the second-amended complaint two weeks after the circuit court ruled that the Commission had waived sovereign immunity. Thus, this single pleading cannot and did not work to dissolve the waiver that had already occurred. The majority should explain how the belated filing of this answer could effectively overrule the circuit court's previous decision that the Commission had waived immunity. Indeed, the majority opinion hatches a curious, new legal concept of an "after-the-fact unwaiver."
In addition, the Commission did not argue to the circuit court that its answer to the second amended complaint superceded its previous answers and operated as a retraction of its waiver. How could it have made this argument? The answer to the second amended complaint was not even filed at the time the circuit court issued its ruling that a waiver had occurred. The majority thus departs from the settled rule that this court will not reverse a circuit court's decision on the basis of an argument not raised or ruled upon below. See LaFont v. Mooney Mixon, 2010 Ark. 450, 374 S.W.3d 668; Beverly Enters.-Ark., Inc. v. Thomas, 370 Ark. 310, 259 S.W.3d 445 (2007).
The majority's decision is either based on faulty logic, or the majority is not in full command of the facts and procedural history of this case. Either way, its decision is wrong.
The concurring opinion stands on no firmer ground in its reliance on the fact that the circuit court first issued an oral ruling denying the motion to dismiss and the fact that the answer to the second amended complaint preceded the entry of the circuit court's order memorializing its decision. Of course, an order is not effective until it is entered of record. Ark. R. Civ. P. 58. To suggest, however, that a litigant can overturn a circuit court's ruling on waiver by beating the court in a race to the clerk's office for filing is utterly ridiculous. Moreover, applying this logic would effectively write the law of waiver out of existence if a state agency were allowed to upend a circuit court's ruling and retract a finding of waiver by the simple expediency of filing a pleading withdrawing its waiver before the court enters its order.[1]
The concurring opinion also errs by taking the position that the circuit court must have considered the second amended complaint based on the boilerplate language contained in the order that all pleadings were reviewed. In the first appeal of this very case, our court rejected the argument that such language constitutes a specific ruling on any given issue. Ark. Lottery Comm'n v. Alpha Marketing, 2012 Ark. 23, 386 S.W.3d 400. The fact remains that the Commission did not raise the "unwaiver" issue below, and the circuit court never ruled on this argument.
Finally, the concurring opinion is mistaken that a waiver did not occur. To be sure, the Commission did not file a formal counterclaim or third-party complaint. However, the Commission did seek declaratory relief for the cancellation of the trademarks in its initial answer, and it consistently sought that relief in its subsequent pleadings. Plainly, the Commission moved for specific relief, regardless of the label placed on the pleading. This court has reiterated the rule that pleadings should be liberally construed and that courts should not be blinded by titles but should look to the substance of the pleadings to ascertain what they seek. See Helena Regional Medical Center v. Wilson, 362 Ark. 117, 207 S.W.3d 541 (2005); Jackson v. Mundaca Fin. Servs., Inc., 349 Ark. 84, 76 S.W.3d 819 (2002); Slaton v. Slaton, 330 Ark. 287, 956 S.W.2d 150 (1997).
I am authorized to state that Justice Corbin and Justice Danielson join in this opinion.
- ↑ It is also worth noting that the Commission responded to the second amended complaint with a motion to dismiss in lieu of filing an answer, as permitted by Rule 12(b) of the Arkansas Rules of Civil Procedure. The Commission filed its answer to the second amended complaint after the circuit court denied the motion to dismiss, as required by Rule 12(b)(2). This explains the timing behind the filing of this answer.