author: W. H.“Dub” Arnold, Chief Justice. W. H.“Dub” Arnold, Chief Justice.

text:
    Michael NORRIS v. STATE of Arkansas
    CR 98-1429
    993 S.W.2d 918
    Supreme Court of Arkansas
    Opinion delivered July 15, 1999
    [Supplemental opinion on grant of rehearing issued September 16, 1999.]

      Doug Norwood, for appellant.

      Mark Pryor, Att’y Gen., by: Vada Berger, Ass’t Att’y Gen., for appellee.
   W. H.“Dub” Arnold, Chief Justice.

This is a case involving warrantless activity surrounding entry into the appellant’s home and his eventual arrest for the offense of driving while intoxicated, first offense. On December 21, 1997, at approximately 1:00 p.m., appellant was allegedly seen driving erratically by another driver. The citizen followed appellant to his home and called the police. Based on the citizen’s information, the officer approached appellant’s home, where he was admitted into the house by appellant’s visiting mother-in-law, Ms. Lilly Wise. When the officer asked for the appellant, Ms. Wise went to appellant’s bedroom to retrieve him; the officer followed her. In the bedroom, the officer questioned appellant, administered field-sobriety tests, and arrested appellant for the offense of driving while intoxicated (DWI), first offense, pursuant to Ark. Code Ann. § 5-65-103 (Repl. 1997).

In the trial court, appellant filed a motion to suppress the evidence based on the officer’s alleged unlawful arrest. A hearing was held on the motion, and the motion was denied. Appellant then entered a conditional plea of guilty to DWI, first offense, and was sentenced to serve one day in the county jail and pay a fine of $350.00. Appellant now appeals from the trial court’s denial of his motion to suppress pursuant to Arkansas Rules of Criminal Procedure, Rule 24.3(b). Appellant asserts the following on appeal:

1) The police had no authority to enter appellant’s home to make a warrantless arrest for a minor offense; and
2) No valid consent was given to allow police to enter appellant’s home to make a warrantless arrest.

We agree with the appellant; and, for the following reasons, we reverse the trial court and dismiss the case.

I. Seriousness of offense and exigent circumstances

A warrantless entry into a private home is presumptively unreasonable. Welsh v. Wisconsin, 466 U.S. 740 (1984); Butler v. State, 309 Ark. 211, 829 S.W.2d 412 (1992). The burden is on the State to prove the warrantless activity was reasonable. Id.; Woffard v. State, 330 Ark. 8, 952 S.W.2d 646 (1997). On appeal, this Court will make an independent determination based on the totality of the circumstances to ascertain whether the State has met its burden. Williams v. State, 327 Ark. 213, 939 S.W.2d 264 (1997).

The U.S. Supreme Court held in Payton v. New York, 445 U.S. 573 (1980), that a warrantless felony arrest in the home is prohibited under the Fourth Amendment, absent probable cause and exigent circumstances. The Court emphasized:

In terms that apply equally to seizures of property and to seizures of persons, the Fourth Amendment has drawn a firm line at the entrance to the house. Absent exigent circumstances, that threshold may not reasonably be crossed without a warrant.

Id. at 590 (emphasis added).

In the case at bar, the officer acted solely on the information of a citizen who allegedly saw the appellant driving his vehicle erratically and who followed appellant home. The officer entered appellant’s home without a warrant, based on a private citizen’s suspicions that appellant had committed a misdemeanor traffic offense, in order to search for appellant, and eventually arrest him. In Welsh v. Wisconsin, supra, the “firm line” of the Fourth Amendment drawn by Payton was emphasized and underscored in its application to warrantless arrests in the home for non-felony minor offenses. The facts in Welsh are very similar to the case at bar.

In Welsh, a witness observed a car which was being driven erratically and which swerved off the road. The driver got out of the car and walked away. When the police arrived, the witness told them what he had seen, and the police checked the car’s registration. Without obtaining a warrant, the police went to the home of the registered owner of the car, gained entry, and found the owner lying in bed. The car owner was then arrested for operating a motor vehicle while under the influence of an intoxicant and taken to the police station where he refused to take a breathalyzer test. To avoid license revocation, the car owner requested a hearing on his refusal to take the test.

The trial court concluded that the arrest was lawful and that the owner’s refusal to take the test was unreasonable; the court then suspended his license. The suspension order was vacated by the Wisconsin Court of Appeals, which concluded that although the State had demonstrated probable cause to arrest, it had not established the existence of exigent circumstances. The Supreme Court of Wisconsin reversed the Court of Appeals, holding that there were exigent circumstances in the case —■ the need for hot pursuit of a suspect, the need to prevent physical harm to the offender and the public, and the need to prevent destruction of evidence. On certiorari, the United States Supreme Court vacated and remanded, holding that absent exigent circumstances, a warrantless nighttime entry into the home of an individual to arrest him for a civil, nonjailable traffic offense is prohibited by the special protection afforded the individual in his home by the Fourth Amendment.

While the U.S. Supreme Court did hold, in Welsh, that for purposes of a warrantless home arrest, an important factor to be considered when determining whether any exigency exists is the gravity of the underlying offense for which the arrest is being made, it continued that application of the exigent-circumstances exception to the warrant requirement of the Fourth Amendment in the context of a home entry should rarely be sanctioned when there is probable cause to believe that only a minor offense, such as the one involved in Welsh, has been committed. We adopted this holding in Butler v. State, supra.

The Supreme Court in Welsh held further as follows: that a warrantless home arrest for a civil, nonjailable traffic offense is not justified by the hot-pursuit doctrine where there was no immediate or continuous pursuit of the offender from the scene of a crime; that a warrantless home arrest for a civil, nonjailable traffic offense is not justified as a threat to public safety, which is an exigent circumstance exception to the warrant requirement of the Fourth Amendment, where the offender had already arrived home and had abandoned his car at the scene of the accident; and, that a warrantless home arrest for driving while intoxicated is not justified by the need to preserve evidence of the offender’s blood-alcohol level, the imminent destruction of evidence being an exigent circumstance exception to the warrant requirement of the Fourth Amendment, where a State has chosen to classify the first offense for driving while intoxicated as a noncriminal, civil-forfeiture offense for which no imprisonment is possible. Given the State’s interest in precipitating an arrest, the Court continued, a warrantless home arrest cannot be upheld simply because evidence of the offender’s blood-alcohol level might have dissipated while the police obtained a warrant.

In the case at bar, the State contends that the gravity of the offense of driving while intoxicated in Arkansas indicates that the State has a strong interest in arresting persons suspected of having committed it. See Byrd v. State, 317 Ark. 609, 879 S.W.2d 434 (1994) (characterizing DWI as serious); see also Act 1983, No. 549, § 19 (providing that DWI is “a serious and immediate threat to the safety of all citizens of this State[ ]”). The State further contends that because of the State’s strong interest in precipitating an arrest in DWI cases, the need for preservation of evidence, such as blood-alcohol content, is great and, therefore, created an exigent circumstance in the instant case.

First-offense driving while intoxicated is a criminal offense in Arkansas, with penalties including imprisonment from one day to one year (although the court may order public service in lieu of jail), as well as fines from $150 to $1,000. See Ark. Code Ann. §§ 5-65-103; 5-65-lll(a) (Repl. 1997)(imprisonment); 5-65-112(1) (Repl. 1997)(fines). In addition, a first-offender’s driver’s license must be suspended for 120 days, and the offender must attend an alcohol-education program. See Ark. Code Ann. §§ 5-65-104(a)(4)(A)(I) (Repl. 1997)(suspension); 5-65-115(a) (Repl. 1997)(program). However, DWI, first offense, is classified as a misdemeanor in Arkansas.

It is true that this Court and the legislature of this State have recognized driving while intoxicated as a serious offense. The question then becomes whether, in the statutory scheme of criminal offenses, the seriousness of DWI, first offense, rises to the level that would warrant violation of the Fourth Amendment’s special protection afforded to the individual in his home, as articulated in Payton, supra, and Welsh. We hold that it does not.

In Welsh, the Supreme Court stated:

Our hesitation in finding exigent circumstances, particularly when warrantless arrests in the home are at issue, is especially appropriate when the underlying offense for which there is probable cause to arrest is relatively minor. Before agents of the government may invade the sanctity of the home, the burden is on the government to demonstrate exigent circumstances that overcome the presumption of unreasonableness that attaches to all warrantless home entries.
When the government’s interest is only to arrest for a minor offense, that presumption of unreasonableness is difficult to rebut, and the government usually should be allowed to make such arrests only with a warrant issued upon probable cause by a neutral and detached magistrate.

Welsh, supra, at 750 (emphasis added). Although the Supreme Court has declined to consider the scope of any exception for exigent circumstances that might justify warrantless home arrests, thereby leaving to the lower courts the initial application of the exigent-circumstances exception, prior decisions of that Court have emphasized that exceptions to the warrant requirement are “few in number and carefully delineated,” and that the police bear a heavy burden. See, Welsh, supra, at 749; Payton, supra, at 583; United States v. United States District Court, 407 U.S. 297, 318 (1972).

There is no doubt that driving while intoxicated is serious. However, when compared to other criminal offenses involving violence, or threats of violence which endanger life or security, for instance, DWI, first offense, becomes relatively minor in the Fourth Amendment analysis. Although DWI is a serious offense, the Arkansas legislature has chosen to classify DWI, first offense, as a misdemeanor. The offense of DWI does not become a felony in this State until the fourth offense has been committed.

Further, although our statute provides for up to one year imprisonment for violation of same, the penalties imposed for DWI, first offense, in this State are similar to those attaching to the nonjailable traffic offense involved in Welsh, supra, and the misdemeanor penalties discussed in the Eighth Circuit case of Patzner v. Burkett, 779 F.2d 1363 (8th Cir. 1985). The Eighth Circuit applied the holding in Welsh to Patzner, which was also a driving-while-intoxicated case. The facts were very similar to those in Welsh, and as in Welsh, the Patzner court came to the same conelusion: the government’s interests did not override the protections of the Fourth Amendment and the firm line drawn by Payton.

The Patzner court reached this conclusion even though the State (North Dakota) classified the offense as a criminal one and the penalty was slightly greater than that in Welsh. There, the court found that the “minor difference in penalty is not sufficient to support a result different from that reached in Welsh.” Patzner, 779 F.2d at 1368-69. In comparison, the South Dakota Supreme Court reached the same result for a first offense of driving while intoxicated in the case of State v. Flegel, 485 N.W.2d 210 (1992), where the penalty provided for up to one year imprisonment, just as Arkansas does, noting that “like the Eighth Circuit in Patzner, we hold the minor difference in penalty is not sufficient to support a result different from that reached in Welsh.” Id. at 215.

Therefore, because the penalties imposed for DWI, first offense, in this State are similar to those attaching to the nonjailable traffic offense involved in Welsh and the misdemeanor penalties discussed in Patzner, we, too, hold that the minor difference in penalty is not sufficient to support a result different from that reached in Welsh.

Nonetheless, with regard to the exigent-circumstance argument, the risk of destruction of evidence is an established exigent circumstance that can justify a warrantless entry. See Humphrey v. State, 327 Ark. 753, 940 S.W.2d 860 (1997). The State contends that because the appellant’s blood-alcohol content decreases with the passage of time, it is therefore equivalent to “destruction of evidence,” and that determining his blood-alcohol content is, then, an “exigent circumstance” that justifies the warrantless entry into appellant’s home.

In the instant case, we hold that, while neither party disputes the existence of probable cause to effect the arrest, sufficient exigent circumstances did not exist to overcome the strong presumption that warrantless home arrests are unreasonable. The police received a report from a lone witness that a pickup truck driven by appellant was seen being driven erratically. It was further reported that appellant had driven to a residence, had gone inside, and was in bed. As in Welsh, there was no question of “hot pursuit” on the part of the police, nor was there any question that appellant was a threat to the safety of the public, since he had already arrived home and was no longer in his car. Furthermore, considering the Payton, Welsh, and Patzner analyses, and the nature of the offense in the statutory scheme of criminal offenses, it must be determined that a warrantless home arrest cannot be upheld simply because evidence of the offender’s blood-alcohol level might have dissipated while the police obtained a warrant.

- II. Consent

The State contends that even if exigent circumstances did not justify the officer’s warrantless entry into appellant’s house, the evidence obtained by the officer after the entry is not subject to suppression because the entry was consensual. As a general matter, a warrantless entry made with consent does not violate the Fourth Amendment. See, e.g., Illinois v. Rodriguez, 497 U.S. 177 (1990). However, consent to a warrantless search of one’s home must be given freely and voluntarily. Humphrey v. State, supra; Guzman v. State, 283 Ark. 112, 672 S.W.2d 656 (1984). The State has a heavy burden to prove by clear and positive testimony that consent was freely and voluntarily given. Scroggins v. State, 268 Ark. 261, 595 S.W.2d 219 (1980); Humphrey, supra. On appeal, this Court makes an independent determination based on the totality of the circumstances to determine if the State has met its burden. Id.

In this case, the officer was given entry into appellant’s home by appellant’s visiting seventy-seven-year-old mother-in-law, Lilly Wise. Appellant claims there was no valid consent for the officer to enter the house because Ms. Wise had no authority to consent to the officer’s entry; further, appellant contends that if any consent is found to have existed on Ms. Wise’s part, it was limited to the initial invitation to the living room, which is just inside the door, and not to appellant’s bedroom.

We have suggested that so long as a searching police officer reasonably believes that a person giving consent had authority to do so, the consent is valid, notwithstanding a later determination that the consentor had no such authority. Grant v. State, 267 Ark. 50, 589 S.W.2d 11 (1979). That being the case, the question then turns to the scope of that consent.

Ms. Wise testified that she asked the officer to step inside the house because the family dog was making a disturbance, and for no other reason. She stated that she never asked or verbally consented to the officer coming any farther into the house, and specifically, not down the hall and into appellant’s bedroom. This testimony was undisputed. Further, the officer’s testimony made it clear that while his initial entry into the house was in response to Ms. Wise’s initial invitation to step inside, that entry was distinct and separate from his decision to follow her out of the living room, down the hall, and into appellant’s bedroom.

The officer never asserted that he perceived the initial invitation as anything more than entry inside the front door or that he relied on that invitation in any way as a basis for going into the interior of appellant’s home. Neither did he ever assert that Ms. Wise verbally indicated to him in any way that he should follow her. In fact, when specifically asked why he followed her down the hall, he replied:

Officer White: Well, I was looking for a subject and when she was going to go get somebody, I just kind of assumed that I was going, too, for my safety and everything, that I was going to see where this person was.

The officer’s assumptions about why he would follow Ms. Wise to appellant’s bedroom were unrelated to any matters of consent on the part of Ms. Wise. The officer further stated that he could not recall anyone consenting or asking him to follow Ms. Wise back to appellant’s bedroom.

It is well recognized that a limited invitation, such as the one Ms. Wise gave to step inside the house, is just that and does not authorize police to go beyond the scope of that consent. Arkansas Rules of Criminal Procedure, Rule 11.3 states that “a search based on consent shall not exceed, in duration or physical scope, the limits of the consent given.” Further, a search occurs whenever something not previously in plain view becomes exposed to an investigating officer. Arizona v. Hicks, 480 U.S. 321; U.S. v. Gonzalez, 71 F.3d 819 (11th Cir. 1996). Any initial consent granted by Ms. Wise to the police officer was limited in scope to the officer’s entry into the front door. Any attempt at further entry into appellant’s home in reliance on that initial consent was in excess of that consent and in violation of Rule 11.3.

As the further entry of the officer into appellant’s home and into his bedroom was not the result of the initial invitation on the part of Ms. Wise, nor of any express verbal statements, as discussed above, the State must, therefore, rely on some form of implied consent for that further entry. Consent, however, cannot be presumed from proof that a person merely acquiesced to police authority nor from an absence of proof that a person resisted police authority. Bumper v. North Carolina, 391 U.S. 543 (1968); Patzner v. Burkett, supra; Rodriguez v. State, 262 Ark. 659, 559 S.W.2d 925 (1978).

In the Patzner case, supra, the Eighth Circuit declined to find consent when the officer in that case acted as did the officer in the case at bar. The officer had gone to Patzner’s home to investigate a possible DWI charge. The officer found Lester Naatus, a friend who was staying with Patzner, in the front yard. The officer asked Naatus if Patzner was home and Naatus told her he was and went to get Patzner. After a time, the officer went to the open front door and spoke to Naatus through the screen, asking him if she could speak with Patzner. Naatus replied that Patzner was in the kitchen. The officer then entered the house, walked into the kitchen and told Patzner he was under arrest. The Court, relying on Bumper, supra, held that no consent had been given. It held that Naatus’ agreement to go get Patzner was not sufficient to show consent and no such inference could reasonably be drawn from Naatus’ response. The Court articulated:

At most, his cooperation, such as it was, only extended to acting as a messenger for [the officer] in response to her express requests. Although Naatus apparently acquiesced to her demands, there is no showing that he cooperated further by asking her in or otherwise acted on his own initiative.

Patzner, 779 F.2d at 1369 (emphasis added).

The question of “implied consent” at issue in Patzner, was more closely examined recently in U.S. v. Gonzalez, supra. In Gonzalez, the officer approached an individual outside her home and asked if she would consent to a search of her home. Following a conversation with her daughter, she told the officer she wanted to go inside and get a drink of water. The officer then told her he “wanted to go in” with her, and when she did not bar him from going in, he followed her inside. The Eleventh Circuit held that there was no consent to enter:

We have previously noted our hesitancy to find implied consent (i.e. consent by silence) in the Fourth Amendment context, and we agree with our colleagues in the Ninth Circuit that whatever relevance the implied consent doctrine may have in other contexts, it is inappropriate to ‘sanction entry into the home based upon inferred consent.’ [Emphasis added.]

Gonzalez then quoted from U.S. v. Shaibu, 920 F.2d 1423 (9th Cir. 1990), to which it had referred above:

The government may not show consent to enter from the defendant’s failure to object to the entry. To do so would be to justify entry by consent and consent by entry. ‘This will not do.’ Johnson v. United States, 333 U.S. at 17. We must not shift the burden from the government— to show ‘unequivocal and specific’ consent to the defendant, who would have to prove unequivocal and specific objection to a police entry, or be found to have given implied consent.

Gonzalez, 71 F.3d at 830 (emphasis added).

The State cites United States v. Mejia, 953 F.2d 461 (9th Cir. 1991), in support of its position that there was “implied consent.” However, the facts of Mejia are distinguishable from the instant case. For example, Mejia involved a nighttime search, not a daytime search. Moreover, the charge in Mejia was a felony, conspiracy to distribute cocaine, not a misdemeanor, DWI. Additionally, a decision from the Ninth Circuit is not binding upon this court, particularly when our own Rules of Criminal Procedure expressly provide that “a search based on consent shall not exceed, in duration or physical scope, the limits of the consent given.” Ark. R. Crim. P. 11.3.

Given the totality of the circumstances involved in the case at bar, we hold that, as in Patzner, Ms. Wise was acting as no more than a messenger for the officer. The officer was not asked to follow her, neither could he nor did he, according to his own testimony, assume she was impliedly asking him to follow.

The State contends that because appellant’s wife was in the living room when the officer entered and she also offered no objection to the officer following Ms. Wise to appellant’s bedroom, imphed consent was further given by appellant’s wife. The State would seem to require Ms. Wise or appellant’s wife to object to the officer following Ms. Wise or somehow resist his further entry into her home, in order to indicate that he was to go no further. This is precisely the result that Patzner, Gonzalez, and Shaibu have held to be prohibited by the Fourth Amendment. To do so would shift the burden from the government, to show consent, to the defendant, to prove objection to same. This would fly in the face of the Fourth Amendment and is offensive to this Court. We, therefore, reject that argument.

For all of the above-stated reasons, we hold that the State has failed to prove that the warrantless activity at issue in this case was reasonable based upon the totality of the circumstances, and hereby reverse and dismiss the case.

Reversed and dismissed.

999 S.W.2d 183

September 16, 1999

Doug Norwood, for appellant.

Mark Pryor, Att’y Gen., by: Vada Berger, Ass’t Att’y Gen., for appellee.

SUPPLEMENTAL OPINION ON DENIAL OF REHEARING

W. H.“Dub” Arnold, Chief Justice.

The State of Arkansas petitions this court for rehearing for the sole purpose of changing the disposition of the case from reversed and dismissed to reversed and remanded. We conclude that the State is correct in this regard and that the proper disposition of the case when evidence has been excluded on appeal due to trial error is a reversal and remand for the possibility of a new trial. See Nard v. State, 304 Ark. 159, 163-A, 801 S.W.2d 634, 637 (1991) (supplemental opinion). Accordingly, we reverse and remand this case.


source: Caselaw Access Project

author: Tom Glaze, Justice.

license: Public Domain

text:
    Fred S. BENDINGER v. MARSHALLTOWN TROWELL COMPANY
    98-611
    994 S.W.2d 468
    Supreme Court of Arkansas
    Opinion delivered July 15, 1999
    [Petition for rehearing denied September 9, 1999.]

      Pettus Law Firm, P.A., by: Donna C. Pettus, for appellant.

      Davis, Cox & Wright, by: Constance G. Clark and William Jackson Butt, II, for appellee.
   Tom Glaze, Justice.

This case involves an action alleging a violation of the Arkansas Trade Secrets Act, Ark. Code Ann. §§ 4-75-601 et seq. (Repl. 1996), and, alternatively, a violation of a covenant not to compete, both claims arising from Fred S. Bendinger’s employment contract with Marshalltown Trowel Company (“Marshalltown”). The chancellor enforced the restrictive covenant, thereby prohibiting Bendinger from working for Marshalltown’s competitor, Kraft Tool Company, for two years. Nonetheless, the chancellor refused to permanently enjoin Bendinger under the Act from employment with Kraft or any other competitor. Both parties appealed the chancellor’s order to the Arkansas Court of Appeals, which certified the case to us because it presents an issue of first impression that is of significant interest in an area in need of clarification. We accepted jurisdiction to decide the merits of the appeal. Ark. Sup. Ct. R. 1-2(b)(1), (4)-(6) and (d) (1999).

We first offer a recitation of the facts needed for determination of the questions presented to the court. Marshalltown is an Iowa corporation with its principal place of business in Fayetteville, Arkansas. Its primary trade is the production and sale of trowels and related merchandise. Bendinger is an industrial engineer who was hired to work for Marshalltown beginning July 15, 1970, when he graduated from college in Iowa. When he began his employment, no written employment document was executed, but on March 22, 1978, at Marshalltown’s request, he signed the following agreement:

Without [Marshalltown’s] prior written consent, [Bendinger] shall not use or disclose at any time, either during or subsequent to his employment hereunder, any secret or confidential information, whether patentable or not, which is disclosed or known to [Bendinger], as a consequence of his said employment except as may be required in the performance of [Bendinger’s] duties to [Marshalltown].
[Bendinger], shall not, for a period of two years following the termination of [his] employment with [Marshalltown], directly or indirectly render service to a business competitor of [Marshalltown].

On October 22, 1984, after Marshalltown expanded its business facilities and opened a new plant in Fayetteville whose construction Bendinger was transferred to oversee, Bendinger was asked to execute a second employment agreement. That agreement contains provisions identical to the 1978 agreement set out above, and provided that it is to be construed in accordance with Arkansas law.

In 1993, Marshalltown advised Bendinger by memoranda that he was being replaced as factory manager and being demoted to the position of facilities manager. His demotion was purportedly due to his lack of motivation and imagination, as well as his inability to deal effectively with those employees he supervised. Also at this time, Marshalltown was consistently fading to meet its delivery objectives. Displeased with Marshalltown’s actions, Bendinger began looking for other employment opportunities. He responded to a blind newpaper advertisement in the Northwest Arkansas Times. The ad, placed by Kraft Tool Company of Kansas, sought an individual highly qualified in the manufacturing of hand tools.

Bendinger told Kraft of his restrictive employment agreement with Marshalltown, and eventually notified Marshalltown of his job search efforts. Marshalltown reacted by refusing to release Bendinger from his employment agreement. He was given three options: (a) stay with Marshalltown and seek counseling; (b) look for an outside position for which Marshalltown would reimburse him up to $15,000 for out-placement services and expenses within one year of his departure; or (c) take the position with Kraft, but if he did, Marhsalltown would go to court to enforce the parties’ restrictive covenant. On April 17, 1997, Bendinger took the third option and resigned from Marshalltown, and the following day, he entered into an oral employment agreement with Kraft to serve as its plant manager. Upon taking the job with Kraft, both Bendinger and Kraft sued for declaratory judgment in the District Court of Johnson County, Kansas, and asked the Kansas court to declare Bendinger’s restrictive-covenant agreement void.

In response, Marshalltown filed suit against Bendinger and Kraft in the Washington County Chancery Court, seeking enforcement of the parties’ two-year restrictive covenant, and also alleging that Bendinger’s misappropriation of Marshalltown’s trade secrets should be held a violation of the Arkansas Trade Secrets Act. On April 28, 1997, Marshalltown obtained an ex parte temporary restraining order (TRO) enjoining Bendinger from working at Kraft. As a condition for granting the TRO, the chancellor directed Marshalltown to post a bond in the amount of $1,000 and, in lieu of an additional bond, Marshalltown was to continue to pay Bendinger his regular pay through May 31, 1997. An emergency hearing was then conducted, and Marshalltown requested that the proceeding be conducted in camera so as to avoid disclosing its confidential information to Kraft. The court declined Marshalltown’s request, so Marshalltown voluntarily dismissed Kraft from the lawsuit. After the hearing, the chancellor set aside the TRO and allowed Bendinger to work for Kraft, but imposed a protective order on the parties to secure Marshalltown’s proprietary information.

The matter proceeded to trial in August 1997. On September 2, 1997, the chancellor issued his decree, denying Marshalltown’s request for a permanent injunction under the Trade Secrets Act because the proof was insufficient to show that either Bendinger or Kraft misappropriated Marshalltown’s trade secrets. Nonetheless, the chancellor found Marshalltown’s and Bendinger’s restrictive covenant enforceable, and directed that Bendinger could not work for Kraft or any other competitor for a period of two years, commencing from the date of the chancellor’s decree. Both parties moved to amend the judgment, but the court refused to amend its decree, except it did award Marshalltown attorney’s fees of $12,000 under Ark. Code Ann. § 16-22-308 (Repl. 1996) for prevailing on its covenant-not-to-compete claim.

As previously mentioned, both parties have appealed from the chancellor’s rulings. Bendinger and Kraft submit that the chancellor erred in enforcing the restrictive covenant and in awarding Marshalltown attorney’s fees. Marshalltown cross-appeals wherein it argues that the chancellor erred in refusing to find misappropriation under the Trade Secrets Act, in failing to conduct an in camera hearing on the TRO, and in not requiring Bendinger to repay Marshalltown the salary monies Marshalltown had been directed to pay Bendinger in lieu of TRO bond money. We now turn to a discussion of the merits of the appeal.

Bendinger first claims that the chancellor erred in his interpretation and application of the law relating to the enforcement of the restrictive covenant. Specifically, Bendinger submits that it was error to uphold the contract, as the chancellor found no proof of either actual or threatened misappropriation of Marshalltown’s trade secrets by either Bendinger or Kraft. In support of this argument, Bendinger insists that Arkansas courts have never upheld a covenant not to compete where the employee has not engaged in some act to harm his former employer or where the new employer has not already benefitted from an unfair competitive advantage. Bendinger argues that the rule in Arkansas is that where the former employee has not in some way either used or disclosed secret information or evidenced a clear intent to do so, Arkansas courts have consistently refused to uphold covenants not to compete. Alternatively, Bendinger argues that the contract is not enforceable since it failed to contain a reasonable geographic hmitation.

Noncompetition clauses in employment contracts have been the source of litigation for over 500 years. Curtis 1000, Inc. v. Youngblade, 878 F. Supp. 1224 (N.D. Iowa 1995) (citations omitted). Under early English common law, courts were hostile to employee covenants not to compete and regarded them as contrary to public policy. Id. at 1256. For at least 250 years, the most cited case on common-law restraints of trade has been Mitchel v. Reynolds, 1 P.Wms. 181, 24 Eng.Rep. 347 (Q.B. 1711), which sought a unifying principle to guide judicial decisions in all subsequent cases involving enforcement of a covenant not to compete. Id. In that case, Lord Maclesfield noted that there was a presumption that all restraints of trade are invalid, but nonetheless held that the presumption could be overcome. Id. (quoting Mitchel v. Reynolds, 1 P.Wms. at 182, 24 Eng.Rep. at 348-349). The presumption is overcome by a showing of reasonableness. Thus, it has become equally well-established that reasonable post-employment restrictive covenants are not in restraint of trade. Roger M. Milgrim, Milgrim On Trade Secrets § 4.02[l][d][v] at 4-64 (1999) (emphasis provided).

Arkansas has followed the trend in this area by requiring a party challenging the validity of a covenant to show that it is unreasonable and contrary to public policy. Dawson v. Temps Plus, Inc. 337 Ark. 247, 987 S.W.2d 722 (1999). Without statutory authorization or, some dominant policy justification, a contract in restraint of trade is unreasonable if it is based on a promise to refrain from competition that is not ancillary to a contract of employment or to a contract for the transfer of goodwill or other property. However, the law will not protect parties against ordinary competition. Id. This court has recognized that covenants not to compete in employment contracts are subject to stricter scrutiny than those connected with a sale of a business. We review cases involving covenants not to compete on a case-by-case basis. Id. Furthermore, the court reviews chancery cases de novo and does not reverse a finding of fact by the chancery court unless it is clearly erroneous. Saforo & Assoc. Inc. v. Porocel Corp., 337 Ark. 553, 991 S.W.2d 117 (1999). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Id.

We hold that the failure of the covenant to contain a geographic restriction in this case renders it overbroad. In its brief, Marshalltown contends that the failure to supply a geographic restriction was reasonable since Marshalltown competes with Kraft on a nationwide basis and because Marshalltown has established an international market. In support of its contention, Marshalltown points to cases where courts have upheld restrictive covenants even though they contained no geographic limitation. Those cases show that where a company is actually engaged in nation-wide activities, nation-wide protection would appear to be reasonable and proper. See, e.g., Harwell Enterprises, Inc. v. Heim, 276 N.C. 475, 173 S.W.2d 316 (1970). Accord Sigma Chemical Company v. Harris, 794 F.2d 371 (8th cir. 1986) (enforcing restrictive covenant lacking a geographical limitation based on Missouri law which permits enforcement where the breach occurs within an area in which the restriction would be clearly reasonable, even though the terms of the agreement impose a larger and unreasonable restraint). Marshalltown also directs us to Girard v. Rebsamen Ins. Co., 14 Ark. App. 154, 685 S.W.2d 526 (1985), and argues that the analysis made in that case should equally apply here. There, the court of appeals upheld a covenant not to. compete even though it lacked a geographic limitation.

During oral argument, Marshalltown clarified its position and explained its restrictive covenant banned Bendinger from working for any company it considered a “competitor.” Marshalltown defines “competitor” as “any company in the trowel industry that is in competition with Marshalltown for sales in the United States, regardless of where that company is located.” Marshalltown suggests that the use of the word “competitor” in its agreement with Bendinger supplies a sufficient geographic restriction which this court should uphold, but that term as Marshalltown wishes to define it is not contained in the covenant, and we are unable to rewrite the restrictive covenant to supply it. The court has held that the contract must be valid as written, and the court will not apportion or enforce a contract to the extent that it might be considered reasonable. Borden v. Smith, 252 Ark. 295, 478 S.W.2d 744 (1972) (citing McLeod v. Meyer, 237 Ark. 173, 372 S.W.2d 220 (1963)). In Borden, the court cited to the McLeod decision with approval for the rule that the court would not vary the terms of a written agreement between the parties; to do so would mean that the court would be making a new contract and it has consistently held that this will not be done. Id. at 300, 478 S.W.2d at 747. We point out that it is because of the rule expressed in Borden that the Harwell decision and the Sigma Chemical Company decision, referenced above, are not applicable. In Harwell, the covenant expressly contained a nation-wide limitation. 173 S.E.2d at 318, 320. Whereas, in Sigma Chemical Company, the Eighth Circuit Court of Appeals applied Missouri state law which permitted the issuance of injunctive relief to the extent reasonable, despite the fact that the agreement itself contained a larger, unreasonable restraint. 794 F.2d at 374. Accordingly, we decline to vary the terms of Bendinger’s employment agreement.

We also view this case to be factually distinguishable from Girard. There, the restrictive covenant was self-limiting in that it prohibited Girard from soliciting or accepting any insurance business on any account which Girard was servicing for Rebsamen Insurance Company at the time of his departure. 14 Ark. App. at 156, 685 S.W.2d at 527. While the agreement contained no specific geographic restriction, the court of appeals explained that the failure to supply one did not render the agreement overbroad, since Girard was not forced to go elsewhere to open his own insurance business, and was free to solicit and accept business from 95% of the overall insurance market at his present location. Id. at 159, 685 S.W.2d at 529. In fact, Girard was free to solicit and accept business from 80% of the customers of the insurance company’s office. Id. In this case, there is no similar inherent limitation in Bendinger’s employment agreement with Marshalltown, and we do not agree that the term “competitor,” by itself, provides a reasonable restriction. Unlike the employee in Girard, Bendinger is precluded from any work within the trowel industry under Marshalltown’s definition of “competitor.” Accordingly, we believe that the chancellor clearly erred in finding that the failure of the parties’ restrictive covenant to contain a geographic limitation was reasonable. Therefore, we reverse the chancellor’s order because the employment agreement is overbroad.

We next turn to Marshalltown’s cross-appeal where it challenges the chancellor’s denial of injunctive relief under the Arkansas Trade Secrets Act, since this issue may have merit independent from our decision not to enforce the restrictive covenant. The chancellor below found Marshalltown possessed the following four trade secrets: (a) a customer list; (b) a vendor list; (c) a permashaped trowel blade; and (d), a fourth shift system (computerized manufacturing system). Despite the existence of the trade secrets, the chancellor expressly determined that there was no proof that either Bendinger or Kraft would misappropriate the confidential information. Marshalltown submits that Bendinger’s employment with Kraft will result in the inevitable disclosure of such information. Marshalltown points out that a number of courts have found that where an employee’s knowledge and skills are inextricably tied up with his employer’s trade secrets and the subsequent employment poses a substantial risk that the first employer’s trade secrets wifi be used, such inevitable disclosure will justify an injunction against the competitive employment. See Milgrim On Trade Secrets, supra at §5.02[3][d]. Marshalltown maintains that there is evidence, then, of the threat of misappropriation of its trade secrets based on the inevitability of disclosure, which it submits is actionable under Ark. Code Ann. § 4-75-604(a).

Recently, this court adopted the inevitable-disclosure rule in Cardinal Freight Carriers v. J.B. Hunt Transportation Service. 336 Ark. 143, 152, 987 S.W.2d 642, 646. In that case, we recognized that a number of federal cases dealing with trade secrets have held that a plaintiff may prove a claim of trade-secrets misappropriation by demonstrating that a defendant’s new employment will inevitably lead him to rely on the plaintiffs trade secrets. Id. (citing Pepsico, Inc. v. Redmond, 54 F.3d 1262, 1269 (7th Cir. 1995); AMP, Inc. v. Fleischhacker, 823 F.2d 1199, 1206-1207 (7th Cir. 1987); Teradyne, Inc. v. Clear Communications Corp., 707 F. Supp. 353 (N.D. Ill. 1989)). Because we have adopted the inevitable-disclosure rule, the only question to resolve is whether Bendinger’s employment with Kraft will result in a situation where Bendinger will inevitably rely on Marshalltown’s trade secrets. After considering the evidence and testimony before the chancellor, we cannot hold he was clearly erroneous in finding that there is no evidence of any actual, threatened, or inevitable misappropriation under § 4-75-604.

Larry McComber, Marshalltown’s president, testified that Bendinger’s answers to certain interrogatories showed how Bendinger could not avoid incorporating his special knowledge of Marshalltown’s sale information and manufacturing processes into his work with Kraft. In other words, McComber urged that Bendinger would be constantly using the knowledge and experience gained at Marshalltown as a reference for his work with Kraft. Other witnesses, including some employees of Kraft, testified that Bendinger chairs daily morning and afternoon production meetings during which employees discuss engineering matters relating to product quality, equipment problems, and changes in manufacturing processes. During these daily meetings, Marshalltown insists Bendinger will be exposed to issues relating to his engineering background and will inevitably result in Bendinger divulging Marshalltown’s trade secrets to Kraft.

On the other hand, Bendinger testified that he had only a general working knowledge of Marshalltown’s machines and processes, and that he did not have in his possession any of the company’s machine designs or blueprints. Bendinger candidly requested “guidance” from the chancellor as to what was Marshalltown’s proprietary information so that he could avoid violating the parties’ employment agreement. Bendinger also offered testimony that Kraft circulated a memo pertaining to Bendinger’s employment detailing his personal situation and instructed employees that Bendinger was not to be consulted in relation to his prior employment with Marshalltown. In the end, the chancellor found Bendinger’s testimony believable, specifically stating in his decree that Bendinger appeared to be an “honest, honorable person who respects Marshalltown’s rights to protect its trade secrets.” The chancellor also determined that Bendinger had some knowledge of Marshalltown’s trade secrets, but that knowledge was “minimal at best,” and that Bendinger lacked access to Marshalltown’s customer and vendor lists, its blueprints, machine and product drawings, secret formula, or any other written information or material. In the chancellor’s judgment, Bendinger’s vast general knowledge of the trowel industry, as opposed to his engineering expertise, was of far greater value to Kraft than any knowledge of the four trade secrets he purportedly had.

We support the chancellor’s conclusion, for a finding of inevitable disclosure is determined largely by the evidence and testimony before the chancellor. Given the fact that we review a chancellor’s findings according to the clearly erroneous standard, we cannot say that the chancellor in this case erred in determining that there was no proof of actual, threatened, or inevitable misappropriation. The chancellor correctly relied on AMP, Inc. v. Fleischhacker in recognizing that the mere fact a person assumes a similar position at a competitor does not, without more, make it inevitable that he will use or disclose trade secrets. 823 F.2d at 1202. While Bendinger has assumed a position with a competitor of Marshalltown’s, that position is managerial in nature and does not require him to use his engineering expertise. So, Bendinger has not even assumed a similar position which would render the disclosure of Marshalltown’s trade secrets inevitable. We also note, as did the Seventh Circuit Court of Appeals in AMP, Inc., that the right of an individual to follow and pursue the particular occupation for which he is best trained is a most fundamental right. Id. (citing ILG Industries v. Scott, 49 Ill.2d 88, 93-94, 273 N.E.2d 393, 396 (1971)). Our society is extremely mobile and our free economy is based upon competition; one who has worked in a particular field cannot be compelled to erase from his mind all of the general skills, knowledge and expertise acquired through his experience. Id. (emphasis provided). Restraints cannot be lightly placed upon an employee’s right to compete in the area of his greatest worth. Id. Because Bendinger is only using his general knowledge gained through his education and his twenty-seven years of experience in thé trowel industry, he poses no threat to Marshalltown’s trade secrets. For these reasons, we affirm the chancellor’s refusal to issue Marshalltown an injunction permanently enjoining Bendinger from working for Kraft or any other competitor.

The disposition of the above two claims controls the outcome of the remaining arguments on appeal. First, since we conclude that the chancellor erred in enforcing the restrictive covenant, Marshalltown is no longer the prevailing party and entitled to attorney’s fees under Ark. Code Ann. § 16-22-308 (Repl. 1996). Hence, the attorney’s fee award of $12,000 to Marshalltown must be reversed. For similar reasons, Marshalltown’s contention that the chancellor erred in refusing to direct Bendinger to repay Marshalltown the $1,727.40 in salary it expended in lieu of the TRO bond money need not be addressed. The April 28, 1997 TRO relied on by Marshalltown provided that the company could recover its bond money and salary paid to Bendinger “if it prevails on the merits.” Since we hold that the restrictive covenant is unreasonable, and because we affirm the chancellor’s determination that no violation of the Arkansas Trade Secrets Act occurred, Marshalltown has not “prevailed on the merits” of its claim, and its argument is therefore moot.

The only claim remaining is Marshalltown’s assertion that the trial court erred in refusing to conduct the hearing on the preliminary injunction in camera so as to exclude Kraft’s representatives from the courtroom. Marshalltown argued below, and continues its assertion on appeal, that the court was required to hold an in camera hearing so as to preserve the secrecy surrounding its alleged trade secrets pursuant to Ark. Code Ann. § 4-75-605 (Repl. 1996). This argument, too, is moot, considering our holdings in this case. Furthermore, Marshalltown cites no authority showing that the failure to conduct such a hearing in camera constitutes reversible error. In fact, Marshalltown concedes that the decision to hold an in camera proceeding under the statute is discretionary with the chancellor, and the cases it does direct the court to support such a conclusion. See Air Products and Chemicals, Inc. v. Johnson, 442 A.2d 1114, 1129 (Pa.Super. 1982). We are inclined to agree. We also find that the substantial steps taken by the chancellor in this case adequately protected Marshalltown’s trade secrets and fully complied with § 4-75-605. For example, the court allowed each party to designate “confidential” information which could then only be used for the purpose of litigation and could not be revealed or disclosed except to the court, the parties’ counsel, and others specifically designated. Additionally, the court issued a temporary injunction which enjoined Bendinger from disclosing to others any trade secrets arising from his employment with Marshalltown. In light of the action taken by the chancellor, the failure to hold the preliminary injunction proceeding in camera was not an abuse of discretion.

For all the foregoing reasons, the appeal is reversed and remanded on direct appeal and affirmed on cross appeal.

       Apparently the Kansas proceeding is still pending.

       Kraft later moved to intervene, which the chancellor permitted by order entered on June 18, 1997.

       While we dispose of the appeal on Bendinger’s alternative argument, we note that the rule he proposes is more expansive than that recognized by Arkansas courts. Where a covenant not to compete grows out of an employment relationship, courts have found an interest sufficient to warrant enforcement of the covenant where the associate is able to use information obtained from his former employer’s special training, trade secrets, confidential business information or customer lists to gain an unfair competitive advantage. See Federated Mut. Ins. Co. v. Bennett, 36 Ark. App. 99, 818 S.W.2d 596 (1991) (emphasis provided); see also Orkin Exterminating Co., Inc. v. Weaver, 257 Ark. 926, 521 S.W.2d 69 (1975); Rector-Phillips-Morse, Inc. v. Vroman, 253 Ark. 750, 489 S.W.2d 1 (1973).

       By this decision we do not hold that every restrictive covenant that fails to contain a geographic restriction is unreasonable. Eg., Girard v. Rebsamen Ins. Co., 14 Ark. App. 154, 685 S.W.2d 526 (1985). Each case is governed by its facts, and in this case, the facts simply do not warrant upholding the covenant at issue.


author: Tom Glaze, Justice. Robert L. Brown, Justice,

text:
    Tim LEATHERS, Commissioner of Revenues; Martha Ahrent, George Dunklin, Marvin Hare, David Hillman, Jerry Hoskyn, John King, Jon Lambi, Carl Morrison, and Joe Rennicke, In Their Capacities as Directors of the Arkansas Rice Research and Promotion Board; and Riceland Foods, Inc.; Producers Rice Mill, Inc., Riviana Foods, Inc. (Intervenors) v. GULF RICE ARKANSAS, INC., and Gulf Pacific Rice Co., Inc.
    98-737
    994 S.W.2d 481
    Supreme Court of Arkansas
    Opinion delivered July 15, 1999

      Winston Bryant, Att’y Gen., by: Arnold M.Jocums, Ass’t Att’y Gen., for appellant Arkansas Rice Research and Promotion Board.

      Friday, Eldredge & Clark, by: William Waddell, Jr., for appellant David Hillman.

      Michael J. Wehrle, for appellant Arkansas Dep’t of Finance and Administration, Revenue Division.

      Hill, Gilstrap, Perkins, & Warner, by: G. Alan Perkins, for appellants/intervenors Riceland Foods Inc., Producers Rice Mill, Inc, and Rivana Foods, Inc.

      Hilburn, Calhoon, Harper, Pruniski & Calhoon, Ltd., by: David M. Fuqua, for appellees.
   Tom Glaze, Justice.

Appellees Gulf Rice Arkansas, Inc., and Gulf Pacific Rice Co., Inc. (referred to collectively as “Gulf Rice”), filed suit against appellants Tim Leathers, the State Commissioner of Revenues, and the individual directors of the Arkansas Rice Research and Promotion Board (referred to collectively as “Board”). Riceland Foods, Inc., Producers Rice Mill, Inc., and Riviana Foods, Inc. (referred to collectively as “Riceland Foods”), intervened in'the suit on behalf of the Board. Gulf Rice alleged that Act 344 of 1995, the Arkansas Research and Promotion Act, codified at Ark. Code Ann. §2-20-511 (Repl. 1996), was an illegal delegation of the taxing power that violated Article 2, § 23, and Article 16, § 13, of the Arkansas Constitution. Both parties moved for summary judgment, Gulf Rice claiming that Act 344 was an unlawful delegation of legislative authority and a violation of due process. The chancery court agreed that the delegation was an unlawful delegation of legislative authority and granted summary judgment in favor of Gulf Rice. The Board and Riceland Foods appeal, claiming the delegation in Act 344 is constitutional. We affirm the chancery court’s grant of summary judgment.

In 1985, the General Assembly enacted Act 725, codified at Ark. Code Ann. § 2-20-507 (Repl. 1996), which created the Arkansas Rice Research and Promotion Board composed of nine producer members. Act 725 also imposed an assessment of three cents per bushel on all rice grown within the state to be paid by the producer. Before the assessment could be imposed, the producers were required to approve it by a three-fifths vote. The assessment was mandatory, but under Ark. Code Ann. § 2-20-509, any rice producer could request and receive a refund by making written application to the Director of the Department of Finance and Administration.

In 1995, the General Assembly enacted Act 344, providing for an alternative assessment on rice. Act 344 authorized the Arkansas Rice Research and Promotion Board to refer to the rice producers of the state the issue of authorizing an assessment of .35 cents per bushel against rice buyers and up to 1.50 cents per bushel against rice producers.1 Only rice producers were allowed to vote to impose the assessments, both against themselves and against the rice buyers. Pursuant to § 2-20-511 (b)(2), neither rice buyers nor rice producers could receive a refund once the assessment had been imposed pursuant to the statute.

In February 1996, a referendum on the assessment against the rice buyers was submitted to the rice producers; they approved the imposition of the 1.35 cent assessment in a vote of 4,271 in favor and 1,649 opposed. The funds derived from the assessment against rice buyers are designated for use for rice promotion and market development; the funds derived from the assessment against the rice producers are designated for use for rice research.

In support of their argument that summary judgment was improper, appellants assert that Act 344 must be presumed constitutional, and that the approval process set forth in Act 344 has been consistently upheld by this court as well as the Supreme Court and other appellate courts. The doctrine prohibiting delegation of legislative power has long been recognized, but the Court has also recognized that Congress may delegate its decision-making authority within certain limits. Appellants argue the delegation in this case falls within these limits, citing Currin v. Wallace, 306 U.S. 1 (1939), and U.S. v. Rock Royal Co-Operative, Inc., 307 U.S. 496 (1939). In Rock Royal, the Court set out the general test to determine whether a delegation is constitutional:

[E]ach enactment must be considered to determine whether it states the purpose which the Congress seeks to accomplish and the standards by which that purpose is to be worked out with sufficient exactness to enable those affected to understand these limits. Within these tests the Congress needs specify only so far as is reasonably practicable.

Rock Royal, 307 U.S. at 574. In determining whether an unconstitutional delegation has been made, the Court considers whether Congress “has attempted to abdicate, or to transfer to others, the essential legislative functions with which it is vested by the Constitution,” noting that “legislation must often be adapted to conditions involving details with which it is impracticable for the legislature to deal directly.” Currin, 306 U.S. at 15.

The appellants argue that because the legislature has specified the amount of the assessment and who is to pay it, the legislature has not unlawfully delegated its authority. They assert that the vote by the producers is merely a condition upon which the legislation may become operative and is therefore permissible. We do not agree.

In the instant case, the General Assembly set the 1.35 cent assessment and the Board, comprised of rice producers, was given the authority to call and administer the referendum whereby the rice producers would decide whether rice buyers should be assessed. It is clear that Act 344, without restriction, bestowed private rice producers with the power to shift their existing burden to pay assessments to rice buyers.

The theory of the appellees’ case is that the unlawful delegation of legislative authority in this matter exists because Act 344 empowered the rice producers with the sole discretion of levying an assessment against the rice buyers without giving the buyers a vote, much less a hearing or review, on the assessment. In sum, appellees submit that to deny them a vote in these circumstances is a due process violation. In support of their argument, appellees cite Carter v. Carter Coal Co., 298 U.S. 238 (1936), for the proposition that the exclusion of an affected group (here rice buyers) from the referendum was a federal constitutional defect founded on the lack of due process given those adversely affected by the referendum. In Carter, the Court said:

The power conferred upon the majority is, in effect, the power to regulate the affairs of an unwilling minority. This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumably disinterested, but to private persons whose interests may be and often are adverse to the interests of others in the same business.

Carter, 298 U.S. at 311. The appellants attempt to distinguish the Carter decision based on the fact that the Board here was given the authority to call a referendum. However, the constitutional issue is whether the rice buyers are denied the right to vote in the referendum regardless of who statutorily calls the referendum. Even if it were relevant that the Board rather than the producers called the referendum, the fact remains that the Board was composed wholly of rice producers.

Besides failing to provide convincing authority that the Carter decision should not be followed in the instant case, the appellants cite cases that tend to support appellees’ argument more than the appellants’. In this respect, appellants cite federal cases where laws were held not to be unlawful delegations of legislative power when agricultural commodity programs were put into execution by way of referendums. See Parker v. Brown, 317 U.S. 341 (1943); Currin v. Wallace, 306 U.S. 1 (1939); Wileman Bros. & Elliott, Inc. v. Espy, 58 F.3d 1367 (9th Cir. 1995); United States v. Frame, 885 F.2d 1119 (3d Cir. 1989). While Arkansas has no similar cases dealing with commodity programs, this court has recognized the rule that, although the General Assembly cannot delegate its power to make a law, it can make a law and prescribe the condition upon which it may become operative. Miller v. Witcher, 160 Ark. 479, 254 S.W. 1063 (1923); see also Swanberg v. Tart, 300 Ark. 304, 778 S.W.2d 931 (1989). However, in each of these cases, both federal and state, the challenge to the referenda was brought by plaintiffs who had an opportunity to vote on the legislative issue affecting them.

The same holds true in the other jurisdictions cited by appellants. See Dukesherer Farms, Inc. v. Ball, 273 N.W.2d 877 (Mich. 1979) (cherry producers brought unsuccessful challenge to Michigan Agricultural Commodities Marketing Act, a statute requiring a referendum of affected producers); Wickham v. Trapani, 272 N.Y.S.2d 6 (N.Y. App. Div. 1966) (apple growers unsuccessfully challenged assessment on growers ratified in a referendum by growers; all “interested persons” were apprised of and allowed to vote on the referendum and the court found this satisfied due process). In sum, the cases relied on by appellants are fundamentally different from the situation at hand where the legislation, Act 344, fails to give the affected persons — rice buyers — a right to vote in the referendum. The Michigan Supreme Court in the Ball decision explicitly spells out the error of the appellants’ position as follows:

The requirement of a referendum . . . need not constitute improper delegation [of legislative authority], but can simply be a measured decision by the Legislature to allow those most intimately affected to decide whether forming a marketing program as presented in the Act and approved by the Director is a proper manner in which to effectuate their business goals. As long as this is carried forth under sufficient standards and safeguards set up by the Legislature under the Act, or other legislation applicable thereto, there is no improper delegation of authority.

Ball, 273 N.W.2d at 889 (emphasis added). Additionally, as one treatise has noted, “a significant number of states have voided efforts by state governments to vest their lawmaking authority in private persons or entities.” Arthur E. Bonfield & Michael Asimow, State and Federal Administrative Law § 7.3, at 460 (1989). The treatise writers explain the states’ rationale as follows:

[T]hat private parties might “make rules that placed personal gain ahead of the public welfare . . . [and] the absence of neutral [and independent] administrative agency review of the private parties’ determination would encourage self-serving policies. This latter aspect was particularly troublesome . . . because the private parties themselves were not subject to any political control .... [However], ... a rule that a private party proposes is not constitutionally suspect if it is adopted by an administrative agency that has power to accept, reject, or modify the rule.”

Id. (quoting Ira P. Robbins, The Impact of the Delegation Doctrine on Prison Privatization, 35 U.C.L.A. L. Rev. 911 (1988)). Here, Act 344 not only fails to allow the rice buyers a vote to decide on whether the rice promotion and marketing program should be effectuated, the Act fails entirely to provide rice buyers any safeguards or standards by which the assessment referendum can be measured.

Rock Royal is the only case cited by appellants where commodity (milk) producers were solely permitted to vote to effectuate legislation when other affected persons (milk handlers) were denied the right to vote on the issue. United States v. Rock Royal Coop., 307 U.S. 533 (1939). Even so, in Rock Royal, due process safeguards and standards were an inextricable part of the legislation in question. Among other things, the legislation provided that milk handlers should generally approve any order fixing prices paid by milk handlers to milk producers. However, if the milk handlers did not approve the order, the Secretary of Agriculture could issue the order fixing prices if he or she made a special determination and obtained approval of the President. If the Secretary did not make the special determination, but made certain other determinations, the Secretary could allow the milk producers to effectuate the order by referendum. In any event, notice, opportunity for hearing, and review were afforded the milk handlers before any order was issued. In addition, the Agricultural Marketing Act at issue in Rock Royal provided that the Secretary had a list of factors to consider before an order was made fixing minimum prices.

Appellants also cite Currin in support of their argument that the delegation in this case should be upheld. Currin v. Wallace, 306 U.S. 1 (1939). However, Currin supports the appellees’ argument more than the appellants’. In Currin, the tobacco growers were given authority by the Tobacco Inspection Act to vote to impose inspection and certification procedures on their tobacco before it could be sold. Tobacco warehousemen challenged the act and the Supreme Court found the voting provision to be lawful. However, the tobacco warehousemen who challenged the act were only indirectly affected by the act, if at all. Rather, those who were intimately affected by the act, the growers, were given the opportunity to determine whether it would apply to them.

Finally, appellants offer a rather disingenuous argument that, because the General Assembly has the unrestricted authority to impose an assessment on rice producers and rice buyers, the vehicle or procedure by which the assessment is imposed is of no import. Stated in other terms, their argument is that if the General Assembly has the power to make the assessments contained in Act 344, it is of no importance who is given the authority to place the Act in execution. Appellants offer no citation of authority to support such a bare proposition and such a summary legal conclusion totally ignores the appellees’ due process argument.

In the present case, Act 344 directs the rice buyers to pay a rice assessment, without specifying any standards or factors that anyone (including the Board) must consider before imposing the assessment; nor does the Act afford the buyers any notice, hearing, or review before such an assessment is imposed on them. This unlawful empowerment given private rice producers is especially offensive when it affects other private persons like rice buyers who have interests opposing or adverse to those of the producers. Because we have determined that Act 344 is an unconstitutional delegation of legislative authority, we affirm the trial court’s grant of summary judgment.

Affirmed.

Brown, J., Special Associate Justices Ted Sanders and Steven B. Davis dissent; Corbin and Thornton, JJ., not participating.

Robert L. Brown, Justice,

dissenting. This is an important case. It has now become vastly easier, in light of the majority opinion, for this court to rule an act of the General Assembly unconstitutional. I would follow existing law and require Gulf Rice to prove a “clear incompatibility” between the legislative act and the State Constitution before we strike down Act 344 of 1995. See Boyd v. Weiss, 333 Ark. 684, 971 S.W.2d 237 (1998); McCutcheon v. Huckabee, 328 Ark. 202, 943 S.W.2d 225 (1997); Stratton v. Priest, 326 Ark. 469, 932 S.W.2d 321 (1996); Fayetteville Sch. Dt. No. 1 v. Arkansas State Bd. of Educ., 313 Ark. 1, 852 S.W.2d 122 (1993). Because we presume acts of the General Assembly to be constitutional, and because Gulf Rice clearly did not sufficiently develop its novel theory of due process before the chancery court, either factually or legally, I would reverse and remand the matter to the chancery court for trial. This would not foreclose Gulf Rice from further developing its due-process claim.

The grounds for attacking the Rice Assessment Act (Act 344 of 1995) before the chancery court were (1) unlawful delegation of legislative authority, and (2) illegal exaction in the form of an illegal assessment. Nowhere in the complaint brought by Gulf Rice was a violation of the Due Process Clause mentioned. Nor was it mentioned in Gulf Rice’s motion for summary judgment. (A passing reference was made to due process in its brief supporting the motion, but it is certainly a stretch to say that this was a ground for relief in the motion.) Nor was due process mentioned in the chancery court’s letter opinion or in the court’s order granting summary judgment. Counsel for Gulf Rice candidly admitted this at oral argument. He further admitted that he did not argue to the chancery court that fundamental due process was an essential underpinning of any claim that the General Assembly has unlawfully delegated its legislative authority to another entity. Yet, the majority seizes on due process, which clearly was not developed as an issue before the chancery court, and catapults it into the basis for voiding the Rice Assessment Act. Because this seems particularly unfair to the Rice Board, which, understandably thought the issue before the chancery court was unlawful delegation of authority, I would reverse and remand.

Whether the General Assembly can fix an assessment on first buyers of rice and then authorize a state board — the Arkansas Rice Research and Promotion Board — to call a referendum on that assessment with only rice producers voting is a new issue, not only in Arkansas but nationwide. It is, quite simply, an issue of national significance. That makes summary judgment a particularly dubious procedure to follow when a major issue of first impression is involved and this is especially true when a new ground — due process — was given short shrift by Gulf Rice before the chancery court. The majority, in a footnote, says the due-process issue was skillfully briefed. It was briefed only on appeal to this court after Gulf Rice had switched strategies and asserted a new constitutional basis for affirmance.

What the majority has overlooked is that the General Assembly developed a complete plan with Act 344. It set the promotion fee at 1.35 cents and then empowered the Rice Board to call a referendum. Counsel for Gulf Rice did not dispute the completeness of the assessment plan in oral argument before this court. This court has previously held that an act does not constitute an unlawful delegation of legislative authority when the act presents a complete plan of what will occur after the referendum. See, e.g., Boyd v. Weiss, supra; Swanberg v. Tart, 300 Ark. 304, 778 S.W.2d 931 (1989). Thus, this situation is totally different from Carter v. Carter Coal Co., 298 U.S. 238 (1936), where Congress delegated to coal producers the authority to set wages and hours for the coal industry. Yet, Carter Coal is the only case cited by the majority in support of its conclusion.

The reasons why affirmance of summary judgment on a new ground is premature and inappropriate in this case are numerous:

• It is still unclear what brand of due process is being endorsed here. The majority cites as its keystone case a substantive due process case from the thirties, (Carter v. Carter Coal Co., supra), which is factually distinguishable. The Carter Coal case has also been called into question. See also Knight v. Minnesota Community College Faculty Assoc., 571 F. Supp. 1, 4 (D.C. Minn. 1982) (“the continuing vitality of Carter Coal is doubtful at best.”) Counsel for Gulf Rice, however, contended at oral argument that what he is really claiming is a procedural-due-process violation. Which is it?
• Where is the caselaw to support this theory of procedural due process?
• Is the due-process claim a separate basis for relief or is it an integral part of Gulf Rice’s unlawful delegation claim?
• If due process is the basis for voiding Act 344, should the Rice Board not have the opportunity to argue that there is a legitimate government interest or rational basis at stake here? See, e.g., Johnson v. Sunray Services, Inc., 306 Ark. 497, 816 S.W.2d 582 (1991).
• Does rice promotion benefit first buyers of rice who resell their rice to the same extent as it benefits rice producers?
• Does Gulf Rice, as a first buyer of rice, pass the assessment cost back to rice producers by reducing the price paid for the rice? Roger Gilmore, general manager for Gulf Rice Arkansas, was ambivalent on this point in his deposition.
• Though the Rice Board is made up of nine rice producers, to what extent are the producers also first buyers? It was contended that in many cases, a rice concern may be both.
• Act 344 limits rice producers to producers in Arkansas. Can first buyers, who are global in scope, be identified for referendum purposes?

The reason why acts of the General Assembly are presumed constitutional is grounded in the bedrock principle of separation of powers between the legislative and judicial branches of government. The General Assembly fixes policy, and it is presumed to have considered the ramifications of its legislation. The majority, however, appears to presume unconstitutionality. We should not rush to void a legislative enactment on some vague notion of unfairness without full development of the issue before the chancery court and with both sides knowing what the issues are. I would hold Gulf Rice to its burden of proof.

I respectfully dissent.

Special Justice Ted H. Sanders joins.

Special Justice Steven B. Davis joins.

       Act 344 of 1995 provided that the authorized assessments were 1.35 cents per bushel to be paid by the buyers and up to 1.50 cents per bushel to be paid by the producers. As codified, however, § 2-20-511 provides for assessments of one dollar and thirty-five cents and up to one dollar and fifty cents.

       The dissenting opinion goes to considerable length to suggest appellees failed to sufficiently raise and develop their due process argument. First, appellants make no suggestion that the appellees failed to preserve this constitutional issue. Second, we believe it becomes evident that both parties skillfully researched, briefed, and argued their respective legal constitutional theories by a fair reading of this opinion. We note that nothing else need be said on this point.

       A second issue was raised below but left undecided by the trial court — whether the 1.35 cent assessment is a valid fee or an illegal tax. Because we agree with the chancellor that Act 344 is unconstitutional as an unlawful delegation of legislative power, it is unnecessary to consider whether the Act’s assessment is also invalid as an illegal exaction.


author: Robert L. Brown, Justice.

text:
    Sam WEEMS v. Bill GARTH, Robert Kreimeyer, and Graham Mullen, as Members of the Prairie County Election Commission, and David Duch
    99-10
    993 S.W.2d 926
    Supreme Court of Arkansas
    Opinion delivered July 15, 1999

      Mike Everett, for appellant.

      Keith G. Rhodes, for appellees Bill Garth, Robert Kreimeyer, and Graham Mullen, as Members of the Prairie County Election Commission.

      Dover & Dixon, P.A., by: Gary B. Rogers, for appellee David Duch.
   Robert L. Brown, Justice.

This is an appeal brought by appellant Sam Weems from a judgment in favor of the appellees, who are members of the Prairie County Election Commission and David Duch. Because the appeal was not filed in a timely manner as required by Ark. Code Ann. § 7-5-810 (Supp. 1997), we dismiss the appeal.

Sam Weems and David Duch were opposing candidates for mayor of Hazen in the Democratic Primary Election held on May 19, 1998. The election was initially certified by the Election Commission as a tie on May 22, 1998. On May 26, 1998, an absentee ballot was received in the mail from James Taylor, a registered voter in Prairie County. Taylor, according to Prairie County Clerk Karen Tate, was a member of the United States military stationed in Germany. The envelope containing the ballot appeared to confirm military service overseas. Tate informed the Election Commission of the absentee ballot, and both candidates were notified. On the date the ballot was received, it was opened in front of the two candidates and counted. The ballot was not challenged prior to opening. The vote was for Duch. At a hearing before the Election Commission on the matter, Weems orally challenged the legitimacy of Taylor’s ballot because it failed to comply with statutory requirements in our Election Code. The Election Commission, however, revoked its earlier certification of the vote and certified Duch as the winner on May 29, 1998.

Weems sued the members of the Election Commission and Duch in circuit court. In his complaint, he challenged the election result and contended: (1) the Taylor ballot failed to comply with Ark. Code Ann. § 7-5-406 (Supp. 1997) (which allows for use of a federal postcard ballot for overseas military), (2) the Election Commission’s rescission of its initial certification was invalid, and (3) two other absentee ballots were disputed, which are not relevant to this appeal.

The Election Commission moved to dismiss the complaint under Ark. R. Civ. P. 12(b)(6), because Election Commission members were not proper party defendants and the complaint failed to state grounds for relief. The matter was tried in a bench trial before the circuit court, and following the trial, the circuit court made these findings: (1) Ark. Code Ann. § 7-5-406 is not the exclusive means for overseas military to vote absentee; rather it is one way to make voting more attractive; (2) § 7-5-406 applies to unregistered voters and not to registered voters like Taylor; (3) Ark. Code Ann. § 7-5-411(a)(l) (Supp. 1997) (the general absentee ballot statute for overseas electors) gave Taylor, as an overseas voter, additional time to send his ballot in; (4) § 7-5-41 l’s requirement of “signed and dated” refers to the affidavit required by Ark. Code Ann. § 7-5-409 (Supp. 1997) and not to the ballot itself; and (5) the initial certification and revocation of that certification was, if anything, a ministerial error that did not void Taylor’s vote.

An order dismissing Weems’s complaint was entered by the circuit court on September 21, 1998. We treat the order of dismissal as a judgment following the bench trial. On October 8, 1998, Weems filed his notice of appeal.

We first must entertain the question of whether jurisdiction appropriately vests in this court for the appeal. Timely filing of a notice of appeal is jurisdictional, and we are required to raise the issue of subject-matter jurisdiction on our own motion. See Williams v. Hudson, 320 Ark. 635, 898 S.W.2d 465 (1995); Rossi v. Rossi, 319 Ark. 373, 892 S.W.2d 246 (1995).

We turn then to Ark. Code Ann. § 7-5-810 (Supp. 1997), which provides a time limit for appeals of judgments relating to election contests:

An appeal to contest the determination of any election in any court of this state must be filed within seven (7) calendar days of the final certification of the election result as announced by a court as authorized by this subchapter, except in instances where the Constitution establishes a time frame for filing an appeal. (Emphasis added.)

In this same subchapter of the Election Code, the General Assembly has set out the procedure for trials of election contests and their appeals:

(a) The election contest shall be tried by the circuit judge in open court without a jury.
(b) An appeal may be taken from the judgment. However, the appeal shall not operate as a supersedeas by judicial order or otherwise and the judgment of the circuit court shall, until reversed, be obeyed by officeholders, political committees and their officers, and all election officials. It shall be the duty of the Supreme Court to advance the hearing of any such appeal.

Ark. Code Ann. § 7-5-804(a) & (b) (Supp. 1997).

We view the judgment of the circuit court entered on September 21, 1998, as the “final certification of the election result as announced by a court.” Accordingly, any notice of appeal was required to be filed within seven days of that judgment. Here, that was not done. The public policy behind this election law is clear and obvious. Disputes related to elections must be resolved quickly in order that public offices may be filled and the people served. Prolonged appeals run counter to that policy. Under this subchapter, not only is the window of time for notices of appeal abbreviated, but it is the duty of this court to advance such matters on our appellate docket.

At oral argument, counsel for Weems posited that the general time frame for appeals as set out in our Rules of Appellate Procedure-—Civil is thirty days and that this rule trumps any legislative act that conflicts with it. See Ark. R. App. P.—Civ. 4(a). While our rules of procedure do supersede conflicting legislative acts, we have deferred to the General Assembly in setting time for appeals when the statutory rule is based on a fixed public policy which has been legislatively or constitutionally adopted and has as its basis something other than court administration. See Citizens for a Safer Carroll County v. Epley, 338 Ark. 61, 991 S.W.2d 562 (1999); Curtis v. State, 301 Ark. 208, 783 S.W.2d 47 (1990). Recently, we dismissed an appeal from a decision in a wet-dry election which failed to comply with a truncated time frame in which to appeal. See Citizens for a Safer Carroll County v. Epley, supra. The same principle applies to the instant case.

Appeal dismissed.


author: Annabelle Clinton Imber, Justice.

text:
    ARKANSAS DEPARTMENT of HUMAN SERVICES; Division of Child Care and Early Childhood Education v. Sandra HUDSON
    99-256
    994 S.W.2d 488
    Supreme Court of Arkansas
    Opinion delivered July 15, 1999

      Frank J. Wills, III, for appellant.

      J. Hudson Shepard, for appellee.
   Annabelle Clinton Imber, Justice.

The Department of Human Services, Division of Child Care and Early Childhood Education (“DHS”), attempts to appeal from an order by the Boone County Circuit Court which stayed the agency’s decision to revoke appellee Sandra Hudson’s child-care license. We previously summarized the facts of this case as follows:

On May 13, 1998, the Arkansas Department of Human Services (DHS) revoked Sandra Hudson’s child-care license, and Hudson appealed that decision to the circuit court, which stayed the DHS decision pursuant to Ark. Code Ann. § 25-15-212(c) (Repl. 1996) of the Arkansas Administrative Procedure Act. See Ark. Code Ann. §§ 25-15-201 to 214 (Repl. 1996 and Supp. 1997). Section 25-15-212(c), in relevant part, provides “the filing of the petition does not automatically stay enforcement of the agency decision, but the . . . reviewing court may do so upon such terms as may be just.” After 120 days expired from the entry of the circuit court’s stay order, DHS moved to vacate the order under Ark. Code Ann. § 20-78-206(d) (Supp. 1997) of the Child Care Facility Licensing Act, which provides that if the reviewing court does not issue its findings within 120 days of the issuance of the court’s stay order, the stay shall be considered vacated.
The circuit court filed no findings within the 120-day period, and instead, the trial court entered a second stay order. Contending that the circuit court’s second stay order violates § 20-78-206(d) and that the stay should be vacated, DHS seeks an interlocutory appeal under Supreme Court Rule l-2(a)(3) and Rule 2(a)(6) of the Rules of Appellate Procedure—Civil because the appeal involves an injunction.

Arkansas Department of Human Serv. v. Hudson, 338 Ark. 123, 991 S.W.2d 605 (1999). We accepted jurisdiction of this case to allow the parties to brief the issue of whether the stay order issued by the circuit court is an appealable order under the appellate rules relied on by DHS. Although the record lodged in this appeal reflects that the administrative transcript was filed with the circuit court on July 15, 1998, there is no indication that the trial court has entered an order on the merits of this case. Because we hold that the second stay order is not an injunction for purposes of a direct appeal, we dismiss the appeal.

Rule 2(a)(6) of the Arkansas Rules of Appellate Procedure— Civil allows a party to appeal from an interlocutory order “by which an injunction is granted, continued, modified, refused, or dissolved or by which an application to dissolve or modify an injunction is refused.” DHS asserts that the issuance of the second stay in contravention of § 20-78-206 is equivalent to an injunction because it orders DHS to refrain from doing a specific act, namely enforcing its order that Sandra Hudson cease and desist from operating her child-care facility. We disagree.

An injunction is a command by a court to a person to do or refrain from doing a particular act. See Tate v. Sharpe, 300 Ark. 126, 777 S.W.2d 215 (1989); C. Jacobson, Arkansas Chancery Practice 68 (1940). It is mandatory when it commands a person to do a specific act, or prohibitory when it commands him to refrain from doing a specific act. Tate, supra. The mere fact that a trial court orders something to be done in the progress of a case does not make that order a mandatory injunction. Tate, supra; Butler v. State, 311 Ark. 334, 842 S.W.2d 434 (1992). To be injunctive, the order must determine issues presented in the complaint, not merely aid in the determination of such issues. Tate, supra; Butler, supra.

We have previously declined to hold that a preliminary order which does not finally resolve or determine any part of the action is equivalent to an injunction for purposes of appeal. See Tate, supra; Butler, supra; Stephens v. Stephens, 306 Ark. 59, 810 S.W.2d 946 (1991). We again decline to do so here. The second stay order, like the first, determines none of the issues presented in Mrs. Hudson’s appeal to the circuit court, a clear prerequisite for establishing the presence of an injunction under our case law. Tate, supra; Butler, supra. While the record does not reflect why Mrs. Hudson’s appeal to the circuit court has not been addressed in a timely manner, we cannot agree that the second stay order amounts to an injunction for purposes of direct appeal.

Appeal dismissed.