Palade v. Bd. of Trs. of the Univ. of Ark. Sys.

2022 Ark. 119

645 S.W.3d 1

Philip PALADE, Gregory Borse, and J. Thomas Sullivan, on Behalf of Themselves and All Others Similarly Situated, Appellants

v.BOARD OF TRUSTEES OF the UNIVERSITY OF ARKANSAS SYSTEM ; Ed Fryar, Ph.D., in His Official Capacity as Trustee; Steve Cox, in His Official Capacity as Trustee; Tommy Boyer, in His Official Capacity as Trustee; Sheffield Nelson, in His Official Capacity as Trustee; C.C. Gibson, in His Official Capacity as Trustee; Stephen Broughton, M.D., in His Official Capacity as Trustee; Kelly Eichler, in Her Official Capacity as Trustee; Morril Harriman, in His Official Capacity as Trustee; Mark Waldrip, in His Official Capacity as Trustee; and John Goodson, in His Official Capacity as Trustee, Appellees.

No. CV-21-624

Supreme Court of Arkansas.

Opinion Delivered: June 2, 2022

Quattlebaum, Grooms & Tull, PLLC, by: Joseph W. Price II, Little Rock and Brittany S. Ford, for appellants.

David A. Curran, Little Rock, Associate General Counsel, University of Arkansas System, for appellees.

COURTNEY RAE HUDSON, Associate Justice

Appellants Philip Palade, Gregory Borse, and J. Thomas Sullivan, on behalf of themselves and all others similarly situated, appeal from the Pulaski County Circuit Court's order dismissing without prejudice their claims against appellees, the Board of Trustees of the University of Arkansas System and Ed Fryar, Ph.D., Steve Cox, Tommy Boyer, Sheffield Nelson, C.C. Gibson, Stephen Broughton, M.D., Kelly Eichler, Morril Harriman, Mark Waldrip, and John Goodson, in their official capacities as Trustees (collectively, "the Board"). For reversal, appellants argue that the circuit court erred by determining that they lacked standing and that their claims were unripe and nonjusticiable. We affirm.

In May 2019, appellants, as tenured faculty members employed by the University of Arkansas System, filed suit in federal district court against the Board seeking declaratory and injunctive relief based on alleged violations of both federal and Arkansas law. The complaint asserted that on March 29, 2018, the Board adopted revisions to Policy 405.1 ("Revised Policy"), which governs faculty promotion, tenure, and annual reviews. Appellants claimed that when the Board passed the Revised Policy, it unilaterally and without the consent of appellants or others in the class made material changes to tenured and tenure-track faculty member's contractual rights as employees and violated their constitutional rights. Specifically, appellants complained about the changes that were made to the section defining cause for termination. The complaint alleged violations of the United States Constitution's Contracts and Due-Process Clauses, as well as First Amendment and Academic Freedom claims. Appellants also asserted state claims under the Arkansas Constitutions’ Contracts and Free Communication Clauses and the Arkansas common law of contracts. The Board filed a motion to dismiss the action, arguing that the state-law claims were barred by the Eleventh Amendment and sovereign immunity and that the remaining claims should be dismissed based on lack of standing, unripeness, and failure to state a claim. Appellants conceded that the state-law claims were prohibited by the Eleventh Amendment, and the district court dismissed these claims on that basis. Palade v. Bd. of Trustees of the Univ. of Ark. , No. 4:19CV379-JM (E.D. Ark. Mar. 16, 2020). With regard to the federal claims, the district court agreed that the claims were not ripe and did not present a justiciable controversy and granted the Board's motion to dismiss. Id.¹

On June 2, 2020, appellants filed a class-action complaint in the Pulaski County Circuit Court, reasserting the same state-law claims that were dismissed in the federal suit. Appellants again focused their allegations on the Revised Policy's changes to the section on cause for termination of employment, and they attached the old and new versions of the policy to the complaint. The original Policy 405.1, which was in effect from October 2, 2001, until March 29, 2018, contained the following definition of cause:

"Cause" is defined as conduct which demonstrates that the faculty member lacks the ability or willingness to perform his or her duties or to fulfill his or her responsibilities to the University; examples of such conduct include (but are not limited to) incompetence, neglect of duty, intellectual dishonesty, and moral turpitude.

The Revised Policy adopted on March 29, 2018, however, stated:

Cause is defined as conduct that demonstrates the faculty member lacks the willingness or ability to perform duties or responsibilities to the University, or that otherwise serves as a basis for disciplinary action. Pursuant to procedures set out herein or in other University or campus policies, a faculty member may be disciplined or dismissed for cause on grounds including, but not limited to, (1) unsatisfactory performance, consistent with the requirements of section V.A.9 below, concerning annual reviews; (2) professional dishonesty or plagiarism; (3) discrimination, including harassment or retaliation, prohibited by law or university policy; (4) unethical conduct related to fitness to engage in teaching, research, service/outreach and/or administration, or otherwise related to the faculty member's employment or public employment; (5) misuse of appointment or authority to exploit others; (6) theft or intentional misuse of property; (7) incompetence or a mental incapacity that prevents a faculty member from fulfilling his or her job responsibilities; (8) job abandonment; (9) a pattern of conduct that is detrimental to the productive and efficient operation of the instructional or work environment; (10) refusal to perform reasonable duties; (11) threats or acts of violence or retaliatory conduct; or (12) violation of University policy, or state or federal law, substantially related to performance of faculty responsibilities or fitness to serve the University. Nothing in this provision is intended to inhibit expression that is protected under principles of academic freedom, or state or federal law.

Appellants alleged that the Revised Policy, which by its terms applied to all faculty, including those who had already obtained tenure or entered the tenure-track, made both quantitative and qualitative changes to the definition of cause. Appellants claimed that by adding the phrase "or that otherwise serves as a basis for disciplinary action," as well as listing additional types of conduct warranting discipline or dismissal, the Board both expanded the number of grounds that justify termination and adopted entirely new types of grounds for dismissal. Based on these changes, appellants asserted that the Revised Policy violated the Contracts Clause contained in Article 2, Section 17 of the Arkansas Constitution by substantially impairing the contractual relationship between the class and the Board without a legitimate public purpose to justify the revisions; that the Revised Policy constituted an impermissible modification of the Board's contract with the class members without their consent under the Arkansas common law of contracts; and that the Revised Policy violated the class's rights under the Free Communication Clause found in Article 2, Section 6 of the Arkansas Constitution.

On July 20, 2020, the Board filed an answer to the complaint, as well as a motion for judgment on the pleadings. In its motion, the Board asserted that it had amended its policy on faculty tenure and promotion more than a dozen times during the last fifty years and that all of the more recent revisions have expressly reserved the right to amend "any portion" of the tenure policy "at any time in the future." The Board indicated that the Revised Policy addresses performance expectations and clarifies, rather than expands, its conduct standards. According to the Board, it interpreted the phrase "otherwise constitutes a basis for dismissal" in the Revised Policy as merely referring to the list of examples of "cause," and there was no basis for predicting that the University would take an impermissibly expansive view of the various examples. In addition, the Board noted that the revised definition of cause states that nothing in that provision is intended to inhibit expression protected under principles of academic freedom or state or federal law, and a separate section further guarantees academic freedom and the right to speak on matters of public concern. The Board argued that appellants had not alleged any facts suggesting that their current employment was in jeopardy, that they had been threatened with disciplinary action under the Revised Policy, or that they had engaged in conduct violative of the Revised Policy; nor had appellants made any non-conclusory allegations in their complaint regarding plans to engage in conduct that would plausibly be prohibited by the Revised Policy but allowed by the prior version. Thus, the Board claimed that appellants’ contract and free speech claims were unripe and nonjusticiable and that appellants lacked standing. The Board also argued that appellants had failed to plead facts demonstrating that an unconstitutional or illegal action had occurred, is about to occur, or has been threatened, and therefore, the suit was also barred by sovereign immunity.

Following a response by appellants and a reply by the Board, the Board filed a supplemental motion to dismiss on August 4, 2021, alleging that appellants’ claims were also barred by collateral estoppel based on the dismissal of their similar claims in federal court. The circuit court held a hearing on the motions on August 30, 2021. On September 2, 2021, the circuit court entered an order granting the Board's motion for judgment on the pleadings and dismissing the complaint without prejudice. The court found that appellants lacked standing and that their claims were unripe and nonjusticiable. The circuit court stated that appellant...