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IN THE CIRCUIT COURT OF PULASKI COUNTY, ARKANSAS CIVIL
DIVISION
THE LITTLE ROCK DOWNTOWN NEIGHBORHOOD ASSOCIATION, INC., THE
PETTAWAY NEIGHBORHOOD ASSOCIATION, THE HANGER HILL NEIGHBORHOOD
ASSOCIATION, THE FOREST HILLS NEIGHBORHOOD ASSOCIATION, INC., THE
COALITION OF LITTLE ROCK NEIGHBORHOODS, INC., ARKANSAS COMMUNITIES
ORGANIZATION, INC., JOSHUA SILVERSTEIN, DALE PEKAR, JOHN HEDRICK,
DENISE ENNETT, ROHN MUSE, BARBARA BARROWS and KATHY WELLS
PLAINTIFFS Vs. Case No. 60CV-20-6460 ARKANSAS DEPARTMENT OF
TRANSPORTATION and LORIE TUDOR, Director, Arkansas Department Of
Transportation; ROBERT MOORE, ALEC FARMER, PHILIP TALDO, KEITH
GIBSON AND MARIE HOLDER, Members Of The Arkansas Highway
Commission; DENNIS MILLIGAN, Arkansas State Treasurer; ANDREA LEA,
Arkansas State Auditor; LARRY W. WALTHER, Director, Arkansas
Department Of Finance & Administration and Chief Fiscal Officer
of The State of Arkansas; and ASA HUTCHINSON, Governor of the State
of Arkansas DEFENDANTS
FIRST AMENDED COMPLAINT FOR DECLARATORY JUDGMENT, ACCOUNTING AND
INJUNCTION
Come the Plaintiffs, The Little Rock Downtown Neighborhood
Association, Inc., The
Pettaway Neighborhood Association, The Hanger Hill Neighborhood
Association, The Forest
Hills Neighborhood Association, Inc., The Coalition of Little
Rock Neighborhoods, Inc.,
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Arkansas Communities Organization, Inc., Joshua Silverstein,
Dale Pekar, John Hedrick, Denise
Ennett, Rohn Muse, Barbara Barrows and Kathy Wells, and for
their First Amended Complaint
for Declaratory Judgment, Accounting and Injunction against the
Defendants, the Arkansas
Department of Transportation, Lorie Tudor, Director, Arkansas
Department of Transportation,
Robert Moore, Alec Farmer, Philip Taldo, Keith Gibson and Marie
Holder, Members of the
Arkansas Highway Commission; Dennis Milligan, Arkansas State
Treasurer; Andrea Lea,
Arkansas State Auditor; Larry W. Walther, Director of the
Arkansas Department of Finance &
Administration and Chief Fiscal Officer of the State Of
Arkansas; and Asa Hutchinson,
Governor of the State of Arkansas, state:
PLAINTIFFS
1. The organizational Plaintiff, Little Rock Downtown
Neighborhood Association, Inc.
(“DNA”), is a not-for-profit corporation organized and existing
under the laws of the State of
Arkansas. The geographic area covered by the DNA includes an
area of Little Rock bounded on
the east by South Louisiana Street, on the north by the Arkansas
River, on the west by Dr. Martin
Luther King, Jr., Dr., and on the south by West Roosevelt Road.
Among the purposes of the
DNA are to preserve and protect the environment of the area and
its historic character and
values, and to represent its members in matters affecting the
Neighborhood and its residents.
2. The organizational Plaintiff, The Pettaway Neighborhood
Association, Inc., (“PNA”), is a
not-for-profit corporation organized and existing under the laws
of the State of Arkansas. The
geographic area covered by the PNA includes an area bounded on
the east by I-30, on the north
by I-630, on the west by Main Street and on the south by west
Roosevelt Road. Among the
purposes of the PNA are to preserve and protect the environment
of the area and its historic
character and values, and to represent its members in matters
affecting the Neighborhood.
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3. The organizational Plaintiff, The Hanger Hill Neighborhood
Association, Inc.
(“HHNA”), is a not-for-profit corporation organized and existing
under the laws of the State of
Arkansas. The geographic area covered by the HHNA includes the
area bounded by I-30 on the
west, East 6th Street on the north, rail lines on the east, and
East 17th Street on the south. Among
the purposes of the HHNA are to preserve and protect the
environment of the area and its historic
character and values and to represent its members in matters
affecting the Neighborhood and its
members.
4. The organizational Plaintiff, Forest Hills Neighborhood
Association (“FHNA”), is a not-
for profit corporation organized and existing under the laws of
the State of Arkansas. The
geographic area covered by the FHNA including I-630 on the
north, South Pine Street on the
east, West 12th Street on the south, and Jonesboro Drive on the
west. Among the purposes of the
FHNA are to preserve and protect the environment of the area and
its historic character and
values and to represent its members in matters affecting the
Neighborhood.
5. The organizational Plaintiff, The Coalition of Little Rock
Neighborhoods, Inc. (“the
Coalition”), is a not-for-profit corporation organized and
existing under the laws of the State of
Arkansas. Among the purposes of the Coalition are to assist in,
coordinate and promote the
development, maintenance and activities of the various
neighborhood associations in the City of
Little Rock; to assist in the distribution of information among
such organizations for their mutual
benefit; to promote quality residential life in Little Rock as a
vital part of maintaining a healthy
city economy; and to provide a voice for the neighborhood
associations of the City with local
and state government.
6. The organizational Plaintiff, the Arkansas Communities
Organization, Inc. (ACO) is an
Arkansas non-profit corporation dedicated to bringing low-income
and working Arkansans together for
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change to improve the health, income and opportunities for
people in our communities; guarantee a
brighter future for our children; and give ordinary Arkansans a
voice in major policy decisions in both
government and private business.
7. The individual Plaintiff, Joshua Silverstein, is a resident,
citizen and taxpayer of
Little Rock, Pulaski County, Arkansas. Mr.Silverstein resides in
a condominium building
immediately adjacent to and overlooking the intersection of I-30
and Highway 10 (aka Cantrell
Road/LaHarpe Boulevard). He is a professor of law at the
University of Arkansas at Little Rock,
William H. Bowen School of Law in Little Rock which is located
in the northwest corner of the
intersection of I-30 and I-630, although he brings this action
in his individual capacity and not on
behalf of the University of Arkansas or any subdivision
thereof.
8. The individual Plaintiff, Dale Pekar, is a resident, citizen
and taxpayer of Little Rock,
Pulaski County, Arkansas. He resides on Rock Street, a
residential area in the City of Little Rock
immediately west of I-30. Mr. Pekar was formerly an economist
and a supervisory planning team
leader with the US Army Corps of Engineers, the U.S. Forest
Service and the Natural Resources
Conservation Service of the USDA (US Department of Agriculture)
in conducting environmental
analyses pursuant to the provisions of the National
Environmental Policy Act.
9. The individual Plaintiff, John Hedrick, is a resident,
citizen and taxpayer of Little Rock,
Pulaski County, Arkansas. Mr. Hedrick resides on East 15th
Street in Little Rock south of I-630
and immediately west of the I-30 Corridor Project area. He has
had many years of experience in
managing, operating and overseeing transportation authorities
and systems, including highways,
light rail, railroads and bus transportation.
10. The individual Plaintiff, Denise Ennett, is a resident,
citizen and taxpayer of the City of
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Little Rock, Pulaski County, Arkansas, residing at the
intersection of I-30 with I-630. She is the
immediate past president of the Plaintiff, Little Rock Downtown
Neighborhood Association, Inc.
(“DNA”), and is currently a member of the Arkansas House of
Representatives.
11. The individual Plaintiff, Rohn Muse, is a resident, citizen
and taxpayer of the City of
Little Rock, residing at in an area immediately south of I-630.
He is the immediate past president
of the Plaintiff, Forest Hills Neighborhood Association, Inc.
(“FHNA”).
12. The individual Plaintiff, Barbara Barrows, is a resident,
citizen and taxpayer of the City
of Little Rock, Pulaski County, Arkansas, residing at the
intersection of I-30 with I-630. She is
the immediate past president of the Plaintiff, Hanger Hill
Neighborhood Association, Inc.
(“HHNA”).
13. The individual Plaintiff, Kathy Wells, is a resident,
citizen and taxpayer of the City of
Little Rock, Pulaski County, Arkansas, residing in the historic
neighborhood in downtown Little
Rock. She is the president of the Plaintiff organization,
Coalition of Little Rock Neighborhoods
(CLRN), and has long been an activist for neighborhood
associations and civic causes in the City
of Little Rock. She has resided for many years in the area
immediately west of I-30 and north of
I-630.
14. All Plaintiffs are either individual residents, citizens and
taxpayers of the State of
Arkansas or are organizations formed and existing under the laws
of the State of Arkansas, with
their principal offices in Arkansas. They are all persons or
organizations who have paid and
continue to pay tax on the sale of goods and services purchased
by them that are subject to the
sales tax levied by Amendment 91.
15. Plaintiffs have standing to maintain this action to:
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(i) challenge the continued illegal exaction and expenditure of
revenues derived from
the sales tax levied by Amendment 91 on highway projects of
greater than four
(4) lanes (i.e., more than two travel lanes in each
direction);
(ii) request this Court to render a declaratory judgment on
whether Defendants may
use Amendment 91 funds on expanding highways of four lanes or
less to
highways of more than four lanes;
(iii) move the Court to issue an order or mandamus to the
Defendants requiring them
to repay to the Arkansas Four-Lane Highway Construction and
Improvement
Bond Account of any funds derived from Amendment 91 that have
been
expended on expanding highways of four lanes or less to highways
of more than
four lanes; and
(iv) request that this Court render a declaratory judgment on
whether Issue 1, enacted
in the general election held in the State of Arkansas on
November 3, 2020, allows
the use of funds derived from the extension of the sales tax
assessed under
Amendment 91 to construct highways of more than four lanes, or
expand existing
highways of four lanes or less to highways of more than four
lanes.
DEFENDANTS
16. The Defendant, Arkansas State Department of Transportation
(formerly named Arkansas
State Highway and Transportation Department) (“ArDOT”) is an
agency of the State of
Arkansas with its principal offices in Pulaski County, Arkansas.
Subject to the control, direction,
and oversight of the Arkansas Highway Commission, ArDOT has the
responsibility, among
others, to plan, design, construct and maintain highways and
roads in the State of Arkansas; to
enter into agreements with the Federal Highway Administration
and other Federal agencies
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regarding Federal funding for highway construction; to
coordination with other agencies of the
state and Federal government and with counties and cities of the
State having transportation
responsibilities (Ark. Code Ann. § 27-1-102); and to enter into
contracts with construction
companies for the construction of highways and other highway
components, and oversee such
construction. The Department has constructed and continues to
construct highway projects
utilizing funds derived from the sales tax levied by Amendment
91, and will continue to perform
such construction utilizing funds derived from the continuation
of the Amendment 91 tax
pursuant to Issue 1 adopted by the voters of Arkansas on
November 3, 2020.
17. The Defendant, Lori Tudor, is the current Director of the
Arkansas Department of
Transportation. As such, she is responsible for implementing and
overseeing the performance of
all of the functions and responsibilities of the Arkansas
Department of Transportation in the State
of Arkansas, which has duties and responsibilities under
Amendment 91. Defendant Tudor is
joined as a Defendant in her representative capacity as such
Director.
18. Defendant, Robert S. Moore, Jr., is a citizen and resident
of Arkansas County, Arkansas,
and is a member and current Chairman of the Arkansas State
Highway Commission. He is sued
herein in his official and representative capacity as such
Commissioner. The Commission has
specified duties and obligations relative to the use and
management of funds derived from the tax
levied on sales and services in the State of Arkansas by
Amendment 91 to the Constitution of
Arkansas, and by the tax to be levied on such sales and services
by Issue 1 adopted by the voters
of the State of Arkansas in the general election on November 3,
2020.
19. Defendant, Alec Farmer, is a citizen and resident of
Arkansas, and is a member and
current Vice-Chairman of the Arkansas State Highway Commission.
He is sued herein in his
official and representative capacity as such Commissioner. The
Commission has specified duties
and obligations relative to the use and management of funds
derived from the tax levied on sales
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and services in the State of Arkansas by Amendment 91 to the
Constitution of Arkansas, and by
the tax to be levied on such sales and services by Issue 1
adopted by the voters of the State of
Arkansas in the general election on November 3, 2020.
20. Defendant, Philip Taldo, is a citizen and resident of
Arkansas, and is a member of the
Arkansas State Highway Commission. He is sued herein in his
official and representative
capacity as such Commissioner. The Commission has specified
duties and obligations relative to
the use and management of funds derived from the tax levied on
sales and services in the State of
Arkansas by Amendment 91 to the Constitution of Arkansas, and by
the tax to be levied on such
sales and services by Issue 1 adopted by the voters of the State
of Arkansas in the general
election on November 3, 2020.
21. Defendant, Keith Gibson, is a citizen and resident of
Arkansas, and is a member of the
Arkansas State Highway Commission. He is sued herein in his
official and representative
capacity as such Commissioner. The Commission has specified
duties and obligations relative to
the use and management of funds derived from the tax levied on
sales and services in the State of
Arkansas by Amendment 91 to the Constitution of Arkansas, and by
the tax to be levied on such
sales and services by Issue 1 adopted by the voters of the State
of Arkansas in the general
election on November 3, 2020.
22. Defendant, Marie Holder, is a citizen and resident of
Arkansas, and is a member of the
Arkansas State Highway Commission. She is sued herein in her
official and representative
capacity as such Commissioner. The Commission has specified
duties and obligations relative to
the use and management of funds derived from the tax levied on
sales and services in the State of
Arkansas by Amendment 91 to the Constitution of Arkansas, and by
the tax to be levied on such
sales and services by Issue 1 adopted by the voters of the State
of Arkansas in the general
election on November 3, 2020.
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23. Defendant, Dennis Milligan, is a citizen and resident of
Arkansas, and is the duly elected
and serving Treasurer of the State of Arkansas), with duties and
responsibilities under
Amendment 91. His official office is located in Pulaski County,
Arkansas. Mr. Milligan is sued
herein in his official and representative capacity. Mr. Milligan
has specified duties and
obligations relative to the use and management of funds derived
from the tax levied on sales and
services in the State of Arkansas by Amendment 91 to the
Constitution of Arkansas, and by the
tax to be levied on such sales and services by Issue 1 adopted
by the voters of the State of
Arkansas in the general election on November 3, 2020.
24. Defendant, Andrea Lee, is a citizen and resident of
Arkansas, and is the duly elected and
serving Auditor of the State of Arkansas, with duties and
responsibilities under Amendment 91.
Her official office is located in Pulaski County, Arkansas. Ms.
Lee is sued herein in her official
and representative capacity. Ms. Lee has specified duties and
obligations relative to the use and
management of funds derived from the tax levied on sales and
services in the State of Arkansas
by Amendment 91 to the Constitution of Arkansas, and by the tax
to be levied on such sales and
services by Issue 1 adopted by the voters of the State of
Arkansas in the general election on
November 3, 2020.
25. Defendant, Larry W. Walther, is a citizen and resident of
Arkansas, and is the duly
appointed and serving Director of the Arkansas Department of
Finance and Administration, with
his official office in Pulaski County, Arkansas. As such, he is
also the Chief Fiscal Officer of the
State of Arkansas. He is sued herein in his official and
representative capacity. Mr. Walther has
specified duties and obligations relative to the use and
management of funds derived from the tax
levied on sales and services in the State of Arkansas by
Amendment 91 to the Constitution of
Arkansas, and by the tax to be levied on such sales and services
by Issue 1 adopted by the voters
of the State of Arkansas in the general election on November 3,
2020.
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26. Defendant, Asa Hutchinson, is a citizen and resident of the
State of Arkansas, and is the
duly elected and serving Governor of the State of Arkansas, with
duties and responsibilities
under Amendment 91. His official office is located in Pulaski
County, Arkansas. Governor
Hutchinson is sued herein in his official and representative
capacity. Gov. Hutchinson has
specified duties and obligations relative to the use and
management of funds derived from the tax
levied on sales and services in the State of Arkansas by
Amendment 91 to the Constitution of
Arkansas, and by the tax to be levied on such sales and services
by Issue 1 adopted by the voters
of the State of Arkansas in the general election on November 3,
2020.
FACTUAL BACKGROUND
Amendment 91
27. Amendment 91 to the Constitution of Arkansas was adopted by
the voters of Arkansas in
the November 6, 2012 general election. Under Amendment 91, a
temporary sales-and-use tax of
one-half cent was levied on the sales of property (except food
and food ingredients) and services
subject to taxation in the State. Seventy percent (70%) of the
Amendment 91 tax revenue was
earmarked to secure State of Arkansas General Obligation
Four-Lane Highway Construction and
Improvement Bonds in the total principal amount not to exceed
$1,300,000,000 for the purpose
of constructing and improving four-lane highways in the State of
Arkansas. A copy of
Amendment 91 to the Arkansas Constitution is attached hereto as
Exhibit No. 1.
28. After the adoption of Amendment 91, the Defendant, Arkansas
Department of
Transportation (ArDOT) (including its predecessor agency)
commenced using the Amendment
91 tax funds to construct highway projects in the State under a
program named by ArDOT as
“the Connecting Arkansas Program” (“CAP”).
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29. The CAP included projects for widening of existing
interstate highways from four lanes
(two lanes in each direction) to five, six, eight or more lanes.
The state share of the cost of such
projects included in the CAP was and is derived primarily of
funds generated by the Amendment
91 tax.
30. The CAP includes at least eleven (11) projects to widen
highways in Arkansas from their
existing four lanes or less to five, six or more lanes. Those
projects include:
CONNECTING ARKANSAS PROGRAM PROJECTS EXCEEDING FOUR LANES
1. ArDOT Job No. CA0602 (30 Crossing Project – Little Rock-North
Little Rock)
2. ArDOT Job No. CA0601 (Highway 70 – Sevier Street Project -
Jacksonville)
3. ArDOT Job No. CA0609 (Highway 365 – Interstate 430 and
Interstate 430 Interchange
Modification Project – North Little Rock/Pulaski County)
4. ArDOT Job No. CA0608 (Baptist Hospital – University Avenue
Project - Little Rock)
5. ArDOT Job No. CA0604 (Main Street – Vandenberg Boulevard
Project - Jacksonville)
6. ArDOT Joe No. CA0605 (Vandenberg Boulevard – Highway 5
Project - Jacksonville - Cabot)
7. ArDOT Job No. CA0401 (Highway 71B – Highway 412 Project—
Washington – Benton Counties)
8. ArDOT Job No. CA1101 (Highway 412 – Wagon Wheel Road Project
–
Washington – Benton Counties )
9. ArDOT Job No. CA0901 (Highway 264 – New Hope Road Project –
Washington – Benton Counties)
10. ArDOT Job No. CA0902 (Highway 62/102 – Highway 72 Project
–
Washington – Benton Counties)
11. ArDOT Job No. CA0610 (Hot Springs – Interstate 30
Project)
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The Arkansas Supreme Court Decision In Buonauito, et al v.
Gibson, et al.
On October 29, 2020, the Supreme Court of Arkansas rendered an
opinion in the case of
Buonauito, et al v. Gibson et al, 2020 Ark. 352, 609 S.W.3d 381
(2020), holding that funds
derived from the sales tax assessed by Amendment 91 could not be
expended on expansion of
highways of more than four lanes. The Court’s Opinion
specifically stated that ArDOT lacked
authority under Amendment 91 to expend such funds “for major
improvements to six-lane
interstate highways, such as projects CA0602 [The “30 Corridor
Project”] and CA0608 [The “I-
630 Widening Project”] … .” (Supreme Court Opinion, pp. 7-8) A
copy of the Supreme Court’s
opinion is attached hereto as Exhibit No 2.
31. The Supreme Court’s interpretation of Amendment 91 becomes
part of that Amendment just
as if it had been so written by the legislature or the drafters
of the Amendment. See, e.g., Burns v.
Burns,312 Ark. 61, 847 S.W.2d 23 (1993); Gibson v. Gibson, 264
Ark. 418, 572 S.W.2d 146
(1978); E.C. Barton v. Neal, 263 Ark. 40, 562 S.W.2d 294 (1978);
Merchants' Transfer &
Warehouse Co. v. Gates, 180 Ark. 96, 21 S.W.2d 406 (1929)
32. Pursuant to that decision of the Arkansas Supreme Court,
ArDOT has no authority to
expend any amount of funds attributable to the taxes levied by
Amendment 91 on the highway
expansion projects listed in Paragraph No. 30, above.
Adoption of Issue 1 of 2020 (Amendment 101)
33. On November 3, 2020, the citizens of the State of Arkansas
voting in the
general election in Arkansas adopted Issue 1. Issue 1 relates to
the continuation of the sales and
use tax that was initially levied under Amendment 91, and, by
adoption, has become Amendment
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101 to the Constitution of Arkansas. Issue 1 of 2020 will be
referred to herein as Amendment
101, and that Amendment is attached hereto as Exhibit No. 3.
34. The intent of Amendment 101 is stated in Section 1 of the
Amendment as follows:
§1. Intent of Amendment.
(a) Arkansas Constitution Amendment 91, levies a one-half
percent sales and use tax to provide additional funding for the
state’s four-lane highway system, county roads, and city
streets.
(b) The one-half percent sales and use tax under Arkansas
Constitution, Amendment 91, shall be abolished when there are no
bonds outstanding to which tax collections are pledged as provided
in this amendment.
(c) Notwithstanding Arkansas Constitution, Amendment 91, § 8, it
is the intent of this amendment that the sales and use tax levied
under Arkansas Constitution, Amendment 91, continue after the
retirement of the bonds authorized in Arkansas Constitution,
Amendment 91, to provide special revenue for use of maintaining,
repairing, and improving the state’s system of highways, county
roads, and city streets. (Emphasis added)
35. The purpose of the tax levies under Amendment 91 was to
provide additional funding for
The State’s four-lane highway system, county roads, and city
streets, and in Buonauito, et al v.
Gibson et al, such funding was limited to highways of not more
than four lanes. That purpose is
specifically continued in Amendment 101. While specific changes
are made to portions of
Amendment 91, such as modification to Section 8 thereof
(relating to the termination of the tax
levied under Amendment 91), there is no provision in Amendment
101 that refers to highways of
any size other than four-lane highways.
36. Further, as the Supreme Court’s decision in Buonauito, et al
v. Gibson et al became a part
of Amendment 91, the restriction on the use of the revenues
derived from the sales tax for
construction or expansion of highways of more than four lanes
continues in Amendment 101.
36. It is well-established in the law of Arkansas that an
existing law is not presumed to be
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changed further than is declared in the amendatory act, the
presumption being that the drafters or
voters (in the case of constitutional amendments) intended no
changes other than those clearly
expressed in the amendments. Hendricks v. Hodges, 122 Ark. 82,
182 S.W. 538. Where an
amendment leaves certain portions of the original act unchanged,
such portions are continued in
force, with the same meaning and effect they had before the
amendment. Peterson Produce Co.
v. Cheney, 237 Ark. 600, 374 S.W.2d 809 (1964).
Illegal Exaction Claim
(i) The Continued Use Of The Sales Tax Levied By Amendment 91 On
Highway Projects Of Greater Than Four (4) Lanes Constitutes An
Illegal Exaction And Expenditure Of Revenues Derived From Amendment
91
37. Plaintiffs hereby ratify, affirm and reallege the preceding
allegations of this Amended
Complaint.
38. The highway expansion projects listed in Paragraph 30,
above, have been completed or
are being constructed in significant part by use of CAP funds.
On information and belief,
Plaintiffs state and allege that, at a minimum, approximately
the following amounts of CAP
funds have been expended on those projects as of September 30,
2020, by ArDOT and the other
Defendants, or pursuant to their authorization:
ArDOT Job No. CA0602 (30 Crossing Project) $452,472,390
ArDOT Job No. CA0601 (Highway 70 – Sevier Street Project)
$58,368,275
ArDOT Job No. CA0609 (Highway 365 – Interstate 430/ Interstate
430 Interchange Modification Project) $8,583,953 ArDOT Job No.
CA0608 (Baptist Hospital – University Avenue Project)
$68,875,800
ArDOT Job No. CA0604 (Main Street – Vandenberg Boulevard
Project) $5,427,861
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ArDOT Joe No. CA0605 (Vandenberg Boulevard – Highway 5 Project)
$56,000,000 ArDOT Job No. CA0401 (Highway 71B – Highway 412
Project) $31,781,154
ArDOT Job No. CA1101 (Highway 412 – Wagon Wheel Road Project)
$15,120,000 ArDOT Job No. CA0901 (Highway 264 – New Hope Road
Project) $27,000,000
ArDOT Job No. CA0902 (Highway 62/102 – Highway 72 Project)
$19,390,000
ArDOT Job No. CA0610 (Hot Springs – Interstate 30 Project)
$37,411,607 Total $780,431,040
39. The Defendants wrongfully expended and diverted those and
other CAP funds on the
projects described above and on any other highway projects to
expand highways to more than
four lanes that were constructed with CAP funds.
40. Section 15 of Amendment 91 provides in relevant part:
(b)(2) The court shall, in any suit against the commission, the
Treasurer of State, or other officer or official of the state
prevent a diversion of any funds pledged under this amendment and
shall compel the restoration of diverted funds, by injunction or
mandamus.
41. Further, Article 16, Section 13 of the Constitution of
Arkansas provides:
Any citizen of any county, city or town may institute suit, in
behalf of himself and all others interested, to protect the
inhabitants thereof against the enforcement of any illegal
exactions whatever.
42. An “illegal exaction” is defined as any exaction that either
is not authorized by law or is
contrary to law. Sullins v. Central Arkansas Water, 2015 Ark.
29, 454 S.W.3d 727. There are
two types of illegal-exaction cases, specifically, illegal-tax
cases and public-funds cases; a
public-funds case is one in which the taxes are being misapplied
or illegally spent, and an illegal-
tax case involves a tax that is itself illegal. Brown v.
Mortgage Electronic Registration Systems,
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Inc., 2013, 738 F.3d 926. This case is of the “public-funds”
variety in that the Defendants
authorized for expenditure and/or expended, misapplied and
illegally spent the CAP funds for
purposes and projects not authorized by and in violation of
Amendment 91.
43. Pursuant to the authority of Article 16, Section 13 of the
Constitution of Arkansas and
Section 15(b)(2) of Amendment 91, the Court should issue a
mandamus to and against the
Defendants directing them to account for, reimburse and repay
all sums authorized by them to be
expended and actually expended by them upon the above-named
Projects and any other Projects
undertaken by Defendants with use of Amendment 91 funds for
widening of highways from four
lanes or less to more than four lanes that are not included in
the above-named Projects.
44. Any funds reimbursed and repaid by the Defendants, or any of
them, as requested above,
should be paid to and deposited in the Arkansas Four-Lane
Highway Construction and
Improvement Bond Account established by the Treasurer of the
State of Arkansas in accordance
with Section 15(b)(2) of Amendment 91, and thereafter used only
for the purposes set forth in
Amendment 91, and in accordance with the procedures set forth in
Amendment 91.
Declaratory Judgment Claims
45. Plaintiffs hereby ratify, affirm and reallege the preceding
allegations of this Amended
Complaint.
46. Defendants continue to contend that projects on which
Amendment 91 (CAP) tax
revenues were spent or are currently being spent that involve
the widening of a previously-
existing four-lane highway, including an interstate highway) to
more than four lanes is not
included within the scope of the Supreme Court’s Buonauito v.
Gibson decision. See
Defendants’ Brief in Support of Motion to Dismiss, p. 6-7, in
which Defendants state:
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The Interstate 30 widening project in Saline County is improving
a four-lane highway, which is permissible under Section 4(a) of
Amendment 91. It is improving an existing four-lane roadway to
six-lanes. The project coincides exactly with the plain language of
Amendment 91, and it is permissible under Buonauito.” (Defendants’
Brief, p. 6-7).
However, Defendants do not cite the “plain language” of
Amendment 91 that supports
their position.
47. Section 4(a) of Amendment 91 explicitly specifies that the
proceeds of the Amendment
91 tax may be spent as follows:
(1) Accelerating four-lane highway improvements in progress or
scheduled as of January 1, 2011;
(2) Funding new four-lane highway improvements not in progress
or scheduled as of January 1, 2011;
(3) Providing matching funds in connection with federal highway
programs for
four-lane highway improvements; and
(4) Paying the costs of issuance of the bonds.
In its Opinion in Gibson, the Supreme Court reviewed the intent
of Amendment 91 as
specifically-expressed therein to be “[t]o provide additional
funding for the state’s four-lane
highway system, county roads and city streets,” and noted that
“four-lane highways” were
mentioned more than 30 times in Amendment 91. The Court then
unanimously held that “The
phrase [4-lane highway] is given a specific meaning that is
plain and ambiguous.” (2020 Ark.
352 at p. 7), and added:
The repeated reference to “four-lane highways” and the lack of a
specific reference to six-lane interstate highways means the
Amendment 91 funds cannot be used for the latter.” (2020 Ark. 352
at page 8) (Emphasis added).
48. The Defendants have in the past and currently continue to
use Amendment 91 (CAP)
funds to finance the expansion of highways of four lanes or less
(including but not limited to
interstate highways) to five, six or more lanes, and thereby
have violated and continue to violate
the Supreme Court’s ruling in Gibson.
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49. The Court should, pursuant to Amendment 91, Section 15
(b)(2), and Article 16, Section
13 of the Constitution of Arkansas, prevent further diversion of
funds derived from the tax
assessed and collected pursuant to Amendment 91 by the widening
of highways of four lanes or
less to five, six or more lanes by:
(i) enjoining the Defendants, or one or more of them, to cease
use of Amendment 91
(CAP) funds for any part of such highway project; and
(ii) ordering and mandating the Defendants to repay and
reimburse the amount of
CAP funds spent by them on such projects to the Arkansas
Four-Lane Highway
Construction and Improvement Bond Account established by the
Treasurer of the
State of Arkansas, in accordance with Sections 5 and 15(b)(2) of
Amendment 91.
Declaratory Judgment on Interpretation of Issue 1 (Amendment
101)
50. Plaintiffs hereby ratify, affirm and reallege the preceding
allegations of this Amended
Complaint.
51. The intent of Amendment 91 is expressly contained in Section
1 of the Amendment,
as being to provide additional funding for the state's four-lane
highway system, county roads, and
city streets. Section 2 of Amendment 91 defines “Four-lane
highway improvements” as meaning
construction of and improvements to “Four-lane roadways,” and
the maintenance of four-lane
highway improvements.
52. The “purposes” of Amendment 91 were expressly stated in
Section 4 of the Amendment
to be:
(i) accelerating four-lane highway improvements in progress or
scheduled as of January 1, 2011;
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(ii) funding new four-lane highway improvements not in progress
or scheduled as of January 1, 2011;
(iii) providing matching funds in connection with federal
highway programs for four-lane highway improvements; and (iv)
paying the costs of issuance of the Bonds.
53. In Gibson, the Arkansas Supreme Court held that the state’s
share of Amendment 91
funds were to be used only on highways of four-lanes, noting
that “the term ‘four-lane highways’
appears more than thirty times in Amendment 91,” and that “[t]he
phrase is given a specific
meaning that is plain and unambiguous.” (2020 Ark. 352 at p. 7)
In concluding its Opinion, the
Court specifically stated:
The repeated reference to “four-lane highways” and the lack of a
specific reference to six-lane interstate highways means the
Amendment 91 funds cannot be used for the latter.” (2020 Ark. 352
at page 8) (Emphasis added).
54. Section 1(a) of Issue 1/Amendment 101 expressly acknowledges
that “Amendment 91
levies a one-half percent sales and use tax to provide
additional funding for the state’s four-lane
highway system, county roads, and city streets.”
55. Pursuant to Section 1(c) of Issue 1/Amendment 101, the
stated purpose and intent of
Issue 1/Amendment 101 is “that the sales and use tax levied
under Amendment 91 continue … to
provide special revenue for use of maintaining, repairing and
improving the state’s system of
highways … .” Nothing contained in Amendment 101 indicates that
that Amendment changes
the purposes of the tax from that of Amendment 91.
56. By referring to the sales tax levied by Amendment 91 as
providing funding for the state’s
four-lane highway system, and by continuing that sales tax
without further provision regarding
any additional or other uses to which Issue 1 funds could be
applied, Issue 1/Amendment 101 did
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not change any the restriction of Amendment 91 to use of such
funds for construction and
maintenance projects for 4-lane highways only.
58. The Defendants, or one or more of them, have made public
declarations that it is the
State’s intention to use Issue 1/Amendment 101 funds for
construction, expansion, maintenance
and operation of highways in the State of Arkansas of more than
four lanes, and that they
interpret Issue 1/Amendment 101 as not containing the same
restrictions as Amendment 91 on
use of the tax funds for highways of no greater size than four
lanes.
59. The Court should declare that use of Issue 1/Amendment 101
funds for construction,
expansion, maintenance and operation of highways in the State of
Arkansas of more than four
lanes would be contrary to the intent and purpose of Issue
1/Amendment 101, and would be
unconstitutional.
WHEREFORE, Plaintiffs should be awarded the following
relief:
1. pursuant to Amendment 91, Section 15 (b)(2), and Article 16,
Section 13 of the
Constitution of Arkansas, prevent further diversion of funds
derived from the tax
assessed and collected pursuant to Amendment 91 through the
widening of highways of
four lanes or less to five, six or more lanes by:
(i) enjoining the Defendants, or any one or more of them, to
cease use or
authorization of use of Amendment 91 (CAP) funds for any part of
such
highway project; and
(ii) issuing a mandamus to and against the Defendants directing
them to
reimburse and repay all sums authorized by them to be expended
and
actually expended by them upon the above-named Projects, and any
other
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Projects undertaken by Defendants with use of Amendment 91 funds
for
widening of highways from four lanes or less to more than four
lanes that
are not included in the above-named Projects.
2. declare that use of funds, directly or indirectly, derived
from the sales tax authorized by
Issue 1 of 2020/Amendment 101 for construction, expansion,
maintenance and operation
of highways in the State of Arkansas of more than four lanes
would be unconstitutional.
3. award to Plaintiffs an attorney fee and their reasonable
costs and expenses.
Respectfully submitted,
RICHARD MAYS LAW FIRM PLLC
/s/ Richard H. Mays Richard H. Mays AR Bar # 61043 2226
Cottondale Lane – Suite 100 Little Rock, AR 72202 (501) 891-6116
[email protected] [email protected]
CERTIFICATE OF SERVICE
I hereby certify that on the date set forth below, I transmitted
a copy of this First Amended Complaint via electronic mail and also
United States Postal Service, postage prepaid, to:
Rita S. Looney, Esq. Chief Legal Counsel Mark Umeda, Esq. Staff
Attorney Arkansas Department of Transportation P.O. Box 2261 Little
Rock, AR 72203-2261 [email protected] [email protected]
Dated: January ___, 2021. ___________________________
Richard H. Mays