Supreme Court Determines Waiver of Sovereign Immunity Not Retroactive

June 22, 2018

The Tennessee Supreme Court concluded the state’s waiver of sovereign immunity for claims brought against it under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), a federal law intended to provide job security for veterans, does not apply to cases that arose  before July 1, 2014, when the waiver became effective.

The appeal involved a USERRA claim brought by David R. Smith, a former lieutenant colonel in the Tennessee National Guard, an entity of the State of Tennessee.  Mr. Smith joined the National Guard in 1993 and was selected for a full-time position in the Active Guard Reserve in 2002. In 2010, he began senior development education at the Naval War College, which is an active duty tour and required him to leave his position with the Active Guard Reserve. A year later, he advised the National Guard that his tour was ending and requested his next assignment. The National Guard informed him that there were no positions available in the Active Guard Reserve, but he could return as a traditional guardsman. Mr. Smith separated from the National Guard several months later.

Mr. Smith sued in 2011, alleging that the National Guard violated USERRA by denying him reemployment in the Active Guard Reserve when he returned from active duty.  The National Guard argued the claim was barred by sovereign immunity, a concept that dates back hundreds of years to common law and is currently included in the Tennessee Constitution and in state laws. Under sovereign immunity, the state is immune from lawsuits except when it consents to be sued.  The trial court dismissed Mr. Smith’s case as barred by sovereign immunity and the Court of Appeals affirmed.

In 2014, the General Assembly passed legislation waiving sovereign immunity for cases brought under USERRA.  The statute said the waiver became effective “to all claims…accruing on or after July 1, 2014.” Relying on the new statute, Mr. Smith brought suit again in 2014. The trial court found his claim accrued before July 1, 2014 and dismissed his case. The Court of Appeals affirmed. 

Several months later, Mr. Smith brought suit a third time, alleging the same facts. The trial court again dismissed his lawsuit as barred by sovereign immunity. In a split decision, the Court of Appeals reversed, finding that Mr. Smith’s claim did not “accrue” until July 1, 2014, when the law waiving sovereign immunity became effective. The Supreme Court granted the state’s appeal and reversed the Court of Appeals.

In its decision, the Supreme Court ruled the General Assembly had unmistakably limited the waiver of sovereign immunity to claims accruing on or after July 1, 2014, although it could have made the law retroactive. The Court explained that under longstanding Tennessee decisions a claim accrues either when a plaintiff has actual knowledge of an injury or when a plaintiff has actual knowledge of facts sufficient to put a reasonable person on notice of an injury resulting from wrongful conduct.  The Court concluded that Mr. Smith had actual knowledge of his alleged injury in 2011 when he filed the first lawsuit alleging the USERRA claim. The Court therefore held that Mr. Smith’s claim remained barred by sovereign immunity because it accrued before July 1, 2014 when the statutory waiver became effective. 

To read the unanimous opinion in David R. Smith v The Tennessee National Guard, authored by Justice Cornelia A. Clark, go to the opinions section of Chief Justice Jeffrey S. Bivins did not participate in the case.