“Never-Due” Funds and the Limits of Sovereign Immunity:
A Structured Commentary on Long v. Commonwealth of Kentucky (Ky. 2025)

1. Introduction

The Supreme Court of Kentucky’s consolidated decision in Amelia Long et al. v. Commonwealth of Kentucky, Department of Revenue, et al., together with the companion appeal in Kimberly Bennett v. Kentucky Community & Technical College System, resolves five interlocutory appeals stemming from two large class actions: the “Medical Case” (hospital billing by the University of Kentucky) and the “Education Case” (tuition and fee billing by UK, Morehead State, and KCTCS).

Plaintiffs allege that the universities unlawfully referred un-adjudicated debts to the Kentucky Department of Revenue (“KDOR”), which then wielded its formidable tax-collection arsenal—garnishments, liens, refund offsets—to extract tens of millions of dollars. The Franklin Circuit Court sided with plaintiffs on statutory grounds and rejected sovereign-immunity defenses; the Court of Appeals reversed in part. The Supreme Court’s opinion, authored by Justice Bisig and accompanied by two concurrences/dissents, answers three pivotal questions:

1. May an appellate court review sovereign-immunity questions inside another interlocutory appeal (here, class certification)?
2. Does sovereign immunity bar claims for declaratory or monetary relief when state coffers already hold the disputed funds?
3. How does the 2022 statutory bar on collecting consumer medical debt affect live controversies?

2. Summary of the Judgment

Disposition: “Affirming in part, reversing in part, and remanding.” Key holdings:

• Interlocutory Scope: The Court of Appeals properly considered sovereign immunity while reviewing class certification; an untimely appeal of immunity can nevertheless be addressed in a timely interlocutory appeal on a related issue.
• Declaratory Relief: Sovereign immunity never bars purely declaratory claims. However, the Medical Plaintiffs’ prospective declaratory claim became moot after KRS 131.130(11) barred KDOR from future medical-debt collections; retrospective declarations remain viable.
• Monetary Relief: A Ross/Haydon Bridge II bright-line rule emerges:
  • Refunds of money never due to the state are not barred by sovereign immunity.
  • Refunds of money actually due to the state are barred—even if collected illegally.
• Takings Clause: Sections 13 and 242 of the Kentucky Constitution waive immunity for genuine takings claims.

3. Analysis

3.1 Precedents Cited and Their Influence

• Ross v. Gross, 188 S.W.2d 475 (Ky. 1945) – Allowed refund of fees never owed; used to justify the “never-due” exception.
• Beshear v. Haydon Bridge Co. (“Haydon Bridge II”), 416 S.W.3d 280 (Ky. 2013) – Barred court-ordered return of workers’-comp assessments because the funds were indeed due; distinguished from Ross.
• Breathitt County Bd. of Educ. v. Prater, 292 S.W.3d 883 (Ky. 2009) – Established immediate interlocutory appeal from denial of immunity.
• Hensley v. Haynes Trucking, 549 S.W.3d 430 (Ky. 2018) – Confirmed narrow scope of interlocutory appeals; discussed but limited here.
• Commonwealth v. Kentucky Retirement Systems, 396 S.W.3d 833 (Ky. 2013) – Reaffirmed that declaratory actions are not barred by sovereign immunity.
• Moore v. University of Kentucky, 599 S.W.3d 798 (Ky. 2019) – First high-court look at the same Collection Statutes; limited to declaratory relief.
• Additional authorities: Yanero, Withers, Sexton, constitutional Sections 230 & 231.

3.2 Court’s Legal Reasoning

1. Jurisdictional Gatekeeping in Interlocutory Appeals
   The Court interprets Hensley’s “strict parameters” flexibly: when the appealed issue (class certification) presupposes a court’s power to hear the case, reviewing immunity is permissible—even if the immunity order was not timely appealed. Sovereign immunity, like subject-matter jurisdiction, can be raised at any stage.
2. Mootness of Prospective Medical Relief
   With KRS 131.130(11) now prohibiting KDOR’s future collection of consumer health-care debt, there is no “present controversy” over prospective conduct; retrospective legality, however, remains live.
3. The Ross / Haydon Bridge II Dichotomy
   The majority synthesizes the two cases into a single doctrinal test:

   Were the dollars legally owed to the Commonwealth at the moment they were collected?

   • If “Yes,” sovereign immunity bars refund claims. • If “No,” courts may compel reimbursement.
   The Court remands for factual sorting of “due” versus “never due” amounts (principal, interest, 25 % fees, etc.).
4. Takings Exception
   Sections 13 & 242 supply an independent constitutional waiver of immunity. Uncompensated seizure of private money can constitute a taking.

3.3 Potential Impact

• Government Finance: State agencies risk refund exposure whenever they collect without statutory authority or without liquidating the debt by judgment. Expect tighter internal vetting before KDOR accepts referrals.
• Class-Action Strategy: Plaintiffs’ counsel will cite the “never-due exception” in refund litigation (e.g., wrongful fees, fines, or surcharges) knowing immunity is no longer a blanket defense.
• Administrative Practice: Agencies may accelerate formal adjudication (administrative hearings or court suits) to convert “alleged” debts into “due” debts before collection.
• Appellate Procedure: The majority’s lenient approach to untimely immunity appeals may embolden defendants to raise immunity defensively in later procedural appeals; the concurrences forecast tension and invite rule amendments.

4. Complex Concepts Simplified

• Sovereign vs. Governmental Immunity – “Sovereign” technically protects the Commonwealth itself; “governmental” shields its agencies. Functionally identical when agencies perform governmental (not proprietary) functions.
• Liquidated Debt – Under KRS 45.241, a debt that is (1) for a sum certain, (2) finally adjudicated, and (3) past all appeals. Only such debts may be referred to KDOR for tax-style collection.
• Declaratory Judgment – A court statement of rights without ordering payment or damages. Not blocked by immunity.
• Mootness – Courts decide only live controversies. Legislative change that removes future risk can moot prospective relief.
• Takings Clause – Government must pay “just compensation” when it appropriates private property, including money.

5. Conclusion

Long v. Commonwealth crystallizes a pivotal limitation on sovereign immunity: when the state captures money it was never entitled to receive, courts may order its return. This “never-due” doctrine, derived from harmonizing Ross with Haydon Bridge II, heads the opinion’s lasting legacy. The decision also clarifies procedural doctrine (appellate scope, mootness) and re-affirms constitutional takings protections. For practitioners, the message is two-fold: agencies must secure clear statutory authority and a liquidated basis before invoking KDOR’s heavy artillery; plaintiffs challenging improper collections now have a judicial foothold to obtain refunds. Future litigation will likely test the boundaries of what counts as “due,” but the Court’s roadmap is clear: illegality alone is not enough—entitlement matters.