Lorenz v. New Hampshire Administrative Office of Courts

Horton, J., retired, specially assigned under RSA 490:3. The plaintiffs appeal an order of the Superior Court (Hollman, J.) dismissing their petition for declaratory judgment. We affirm the result, albeit on different grounds. The plaintiffs, judicial branch employees working for the New Hampshire Superior Court, brought this petition for declaratory judgment seeking a determination that the defendants, the New Hampshire Administrative Office of the Courts and the New Hampshire Supreme Court, be equitably estopped from terminating their employment except for just cause based upon poor individual job performance or misconduct. — 634 — The superior court rejected the plaintiffs’ claim for specific performance of an alleged oral contract for continued employment and, further, dismissed the action for failure to state a claim upon which relief may be granted. The plaintiffs appealed and this court ordered briefing and oral argument on the two issues upon which the case was dismissed by the trial court. Following oral argument, we requested supplemental briefing on the issue of sovereign immunity. On appeal, we do not reach the merits of the plaintiffs’ claims because we hold that they are barred by sovereign immunity. Pursuant to that immunity, neither the superior court nor this court is vested with subject matter jurisdiction. See LaRoche, Adm’rv. Doe, 134 N.H. 562, 566 (1991). In New Hampshire, the State is immune from suit in its courts without its consent. Sousa v. State, 115 N.H. 340, 342 (1975). “Sovereign immunity is a jurisdictional question not to be waived by conduct or undermined by estoppel.” LaRoche, 134 N.H. at 566 (quotation omitted). “It is not a defense which must be affirmatively pled.” Id. Sovereign immunity rested on a common law basis until the enactment in 1978 of RSA chapter 99-D, which adopted sovereign immunity “as the law of the state,” except where a statute might provide an exception. Tilton v. Dougherty, 126 N.H. 294, 298 (1985) (quotation omitted); see LaRoche, 134 N.H. at 566 (“[o]ur decisions have found express or implied consent to suit only in the acts of our legislature”). The plaintiffs concede that the defendants in this case “are included within the scope of the sovereign immunity doctrine as applied in New Hampshire.” New Hampshire courts lack subject matter jurisdiction to hear an action against the State unless the legislature has “prescribe[d] the terms and conditions on which it consents to be sued, and the manner in which the suit shall be conducted.” Sousa, 115 N.H. at 344 (quotation and ellipsis omitted). The doctrine “serves two general public policy considerations: the protection of the public against profligate encroachment on the public treasury, and the need for the orderly administration of government, which, in the absence of immunity, would be disrupted if the state could be sued at the instance of every citizen.” In re Estate of Raduazo, 148 N.H. 687, 692 (2002) (quotation omitted), cert. denied, 539 U.S. 942 (2003). The plaintiffs argue that the State waived its immunity from this suit by enacting RSA 491:8 (1997). In addition, the plaintiffs argue that there is no prohibition of declaratory judgment actions against the State and that the instant action, “which seeks only a declaration that termination of the plaintiffs’ employment ... would breach the promises made to [them],” should be permitted to proceed. We disagree. — 635 — Jurisdiction has been conferred upon the superior court “to enter judgment against the state of New Hampshire founded upon any express or implied contract with the state.” RSA 491:8. This statute, however, has been interpreted to limit relief to suits seeking money damages for breach of contract. Wiseman v. State, 98 N.H. 393, 397 (1953). “[RSA 491:8] contains no reference to redress in equity and therefore requires a fortiori an interpretation which limits the consent given to actions for the recovery of damages.” Id. As the trial court recognized in this case, “[t]he appropriate remedy ... is by way of an action for damages for breach of contract.” The plaintiffs, however, have not brought a suit seeking money damages for breach of contract and, therefore, the case does not fall within the limited waiver of immunity established by RSA 491:8. We also disagree with the plaintiffs that because this action is one for declaratory judgment, it should be allowed to proceed. The plaintiffs cite Raduazo as “[d]ireetly on point.” In Raduazo, however, the State invited jurisdiction by entering a claim in probate court over certain funds. Raduazo, 148 N.H. at 688. As this court recognized, sovereign immunity does not apply when the State itself asserts a claim over another’s property. See id. at 692. The case does not support the plaintiffs’ position that any citizen may file a declaratory judgment action against the State. The declaratory judgment statute, RSA 491:22 (1997), “has long been construed to permit challenges to the constitutionality of actions by our government or its branches.” Grinnell v. State, 121 N.H. 823, 825 (1981). When a law is challenged as unconstitutional, the claim is that the law is void and hence that no law has been enacted. It follows that if the legislature has not acted under authority, no action has been taken by the State, and hence when suit is brought to restrain those representing the State from carrying the void legislation into operation and enforcing it, it is not a proceeding to which the State is a party. Conway v. Water Resources Board, 89 N.H. 346, 348 (1938). Accordingly, where the plaintiffs seek a declaratory judgment that actions taken by the State are unconstitutional, “the court ha[s] jurisdiction to grant equitable relief.” Claremont School Dist. v. Governor (Costs and Attorney’s Fees), 144 N.H. 590, 593 (1999). The plaintiffs here, however, do not challenge the constitutionality of the actions taken by the defendants. In the absence of specific legislative consent, they are barred by sovereign immunity from bringing this petition. — 636 — Furthermore, although the plaintiffs assert that they are only seeking a declaration of their legal rights to continued employment, the plaintiffs affirmatively seek to prevent the defendants from firing, laying off, or ehminating their employment and seek to void an administrative order issued by the New Hampshire Supreme Court authorizing the plaintiffs’ layoffs. Although the plaintiffs amended their original petition for protective injunction to one for declaratory judgment, the requested relief remained essentially the same. As the trial court stated, “[R]egardless of how the petitioners have styled their suit in equity ... [they] are effectively proceeding upon the theory that they are entitled to specific performance of promised employment for life____[S]uch a promise is not enforceable in equity by specific performance or injunctive relief,” or, may we add, by declaratory judgment. Although a contract action for damages is expressly allowed by RSA 491:8, the plaintiffs have not brought such an action. Because the plaintiffs do not challenge the constitutionality of the defendants’ actions and the State has not consented to be sued in equity for the claims presented by the plaintiffs, this action is barred by sovereign immunity. The petition is dismissed ab initio. The order of the trial court is vacated, except as specifically approved herein. This decision does not bar a future action for damages consistent with RSA 491:8 as interpreted in Morgenroth & Assoc’s, Inc. v. Town of Tilton, 121 N.H. 511 (1981). Vacated and dismissed. Temple and Dickson, JJ., retired superior court justices, specially assigned under RSA 490:3, concurred; Pappagianis and Dunn, JJ., retired superior court justices, specially assigned under RSA 490:3, dissented.