The Arkansas Supreme Court has dismissed an appeal brought by the Arkansas Department of Education and other state officials concerning a lawsuit challenging the constitutionality of the state’s Educational Freedom Account (EFA) program—often referred to as a voucher program. The court’s decision hinges on a key legal doctrine: sovereign immunity.
The core issue was whether the state actors could appeal a circuit court’s refusal to dismiss the underlying case. The State argued that the lawsuit, filed by several Arkansas citizens, should have been thrown out because sovereign immunity shields state agencies and officials from being sued unless immunity has been explicitly waived. However, the Supreme Court found that the plaintiffs’ claims fell under an exception to this rule.
The Underlying Lawsuit and the EFA Program
The original lawsuit was filed in Pulaski County Circuit Court by Gwen Faulkenberry and three others. They sought to stop the implementation of the EFA program, arguing it violated several sections of the Arkansas Constitution, particularly those related to the funding and spending regime for public education (Articles 14 and 16).
The plaintiffs didn’t just ask for an injunction or a declaration that the law was unconstitutional. Crucially, they explicitly included a claim for an “illegal exaction” under Article 16, Section 13 of the state constitution. An illegal exaction claim is a mechanism allowing citizens and taxpayers to sue the government when they believe public funds—derived from taxes—are being spent unlawfully or unconstitutionally.
When the State moved to dismiss the entire case, citing sovereign immunity, the circuit court disagreed, finding that the plaintiffs had stated sufficient facts, especially regarding the illegal exaction claim, to proceed. The State then attempted to appeal that denial immediately—known as an interlocutory appeal—relying on a rule that allows such appeals when sovereign immunity is the basis for the motion to dismiss.
The Court’s Focus: Illegal Exactions vs. Sovereign Immunity
Writing for the majority, Justice Shawn A. Womack clarified the central legal concept: sovereign immunity does not apply to claims categorized as illegal exactions.
The Supreme Court analyzed the plaintiffs’ complaint and concluded that, despite some claims being styled as requests for declaratory or injunctive relief under the Declaratory Judgment Act, the substance of the entire case was rooted in the allegation that taxpayer money was being unconstitutionally spent on the EFA program.
“For all intents and purposes, the entirety of Faulkenberry’s lawsuit is an illegal-exaction claim because she alleges that the State is unconstitutionally spending taxpayer dollars to fund the EFA program,” the opinion stated.
The Court emphasized that Arkansas precedent dictates that if a plaintiff contends public funds are being misapplied or illegally spent, it is an illegal-exaction claim, regardless of how the plaintiff might have formally labeled other parts of the suit. Since the constitutional provision allowing citizens to sue for illegal exactions is self-executing and places no conditions on suing the State for this specific purpose, sovereign immunity provides no defense here.
Because sovereign immunity does not bar the underlying illegal-exaction claims, the State was not entitled to an interlocutory appeal of the circuit court’s decision under the relevant appellate rules. Therefore, the Supreme Court dismissed the appeal.
Clarifying the Scope of Illegal Exaction Claims
The State had attempted to persuade the Court to narrow the scope of Article 16, Section 13, suggesting that the language referencing “county, city or town” limited illegal-exaction lawsuits only to matters involving local governments, not the State itself.
The Supreme Court firmly rejected this interpretation, citing over a century of precedent. The Court noted that while the provision names who can file the suit (a citizen of a county, city, or town), it grants the right to sue to protect citizens against “the enforcement of any illegal exactions *whatever*.” This broad language, the Court affirmed, covers illegal-exaction claims against the State government as well.
Dissenting View
Chief Justice Karen R. Baker issued a vigorous dissent, joined by two Special Justices. The dissent argued that the majority’s position conflicts with the Court’s prior ruling in *Board of Trustees of the University of Arkansas v. Andrews*, which interpreted the constitutional prohibition against suing the State as absolute: “The State of Arkansas shall never be made a defendant in any of her courts.”
Chief Justice Baker contended that because the appellees’ claims sought to “control or review State action” concerning the diversion of tax revenues, the *Andrews* precedent should bar the suit entirely, irrespective of the illegal-exaction exception being invoked.
Ultimately, the majority’s finding that the suit is fundamentally an illegal-exaction claim—a category exempt from sovereign immunity defenses—resulted in the dismissal of the State’s appeal, meaning the challenge to the EFA program itself will continue in the trial court.