Clean Energy for a Healthy Ariz. v. Leach

CLEAN ENERGY FOR A HEALTHY ARIZONA, Appellant, v. VINCE LEACH, et al., Appellees.

No. 1 CA-CV 18-0776

ARIZONA COURT OF APPEALS DIVISION ONE

December 5, 2019

NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

Appeal from the Superior Court in Maricopa County

No. CV2018-009919 CV2018-010116 CV2018-010651 CV2018-010658 CV2018-010807 (Consolidated)

The Honorable Daniel J. Kiley, Judge

AFFIRMED

COUNSEL

Torres Law Group, Tempe

By Israel G. Torres, James E. Barton, II, Saman John Golestan

Counsel for Appellant

Snell & Wilmer LLP, Phoenix

By Brett William Johnson, Jennifer L. Hadley Catero, Lindsay L. Short,

Colin P. Ahler

Counsel for Appellee Leach, et al.

MEMORANDUM DECISION

Judge John C. Gemmill¹ delivered the decision of the Court, in which Presiding Judge Randall M. Howe and Judge David D. Weinzweig joined.

GEMMILL, Judge:

¶1 Clean Energy for a Healthy Arizona (the "Committee") appeals the superior court's denial of its request for attorney's fees under the private attorney general doctrine, the amount of the fees awarded under Arizona Revised Statutes ("A.R.S.") section 19-118(F) (2019),² and the amount of costs awarded under A.R.S. § 12-332(A)(6) (2019). For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 The Committee sought to place an initiative on the November 2018 general election ballot.³ On the Committee's behalf, an intermediary registered more than 1,500 circulators to collect signatures supporting placement of the initiative on the ballot. The Committee filed petitionsheets containing signatures, and the Secretary of State determined that the Committee had gathered more than enough signatures to place the initiative of the ballot.

¶3 Meanwhile, a group of qualified electors ("Plaintiffs") sued the Committee and various State and county officials to remove the initiative measure from the ballot for several reasons, including the failure of circulators to lawfully register. The superior court held a five-day trial, for which Plaintiffs subpoenaed over 1,180 witnesses, most of whom were petition circulators. The superior court ultimately upheld the initiative's validity, which the supreme court affirmed by order and a later-issued opinion. See generally Leach v. Reagan, 245 Ariz. 430 (2018). Ultimately, the voters rejected the initiative.

¶4 The parties then returned to superior court and briefed whether the Committee could recover its attorney's fees and costs. The Committee argued it was entitled to $200,435.76 in attorney's fees under the private attorney general doctrine and A.R.S. § 19-118(F), and $1,339,137.05 in costs under A.R.S. § 12-332(A). The superior court denied fees under the private attorney general doctrine, but granted $4,107.50 in fees under § 19-118(F) and $2,428.08 in costs.

¶5 The Committee timely appealed the superior court's award of attorney's fees and costs. We have jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution, and A.R.S. §§ 12-120.21(A)(1) (2019) and -2101(A)(1) (2019).

DISCUSSION

I. Attorney's Fees.

A. The private attorney general doctrine.

¶6 Attorney's fees may be awarded against private parties under the private attorney general doctrine. Ariz. Ctr. for Law in the Pub. Interest v. Hassell, 172 Ariz. 356, 371 (App. 1991). The doctrine represents an

equitable rule which permits courts in their discretion to award attorney's fees to a party who has vindicated a right that:

(1) benefits a large number of people;

(2) requires private enforcement; and

(3) is of societal importance.

Arnold v. Ariz. Dep't of Health Servs., 160 Ariz. 593, 609 (1989). Because decisions whether to award fees under this doctrine are discretionary, we apply an abuse of discretion standard in our review of this issue. See id.; Meyer v. State, 246 Ariz. 188, 195, ¶ 26 (App. 2019). We will not disturb the court's "judgment on appeal if there is any reasonable basis for the amount awarded." ABC Supply, Inc. v. Edwards, 191 Ariz. 48, 52 (App. 1996).

¶7 The Committee argues its successful defense "vindicated the right of initiative" for voters who signed the qualifying petitions. It then argues attorney's fees should have been awarded under the private attorney general doctrine here, citing two cases: Meyer, 246 Ariz. 188, and Cave Creek Unified Sch. Dist. v. Ducey, 231 Ariz. 342 (App. 2013), aff'd, 233 Ariz. 1 (2013).⁴

¶8 Although we granted fees under the private attorney general doctrine in each case, see Meyer, 246 Ariz. at 195-96, ¶¶ 26-31; Cave Creek, 231 Ariz. at 353, ¶¶ 34-36, we distinguish both cases for two reasons. First, in those cases, the successful parties defended the integrity of active laws: They challenged the government's failure to recognize and follow laws that voters had already passed at the ballot box and that had been signed into law. See Meyer, 246 Ariz. at 191-92, 195, ¶¶ 2-4, 8-9, 24; Cave Creek, 231 Ariz. at 345-46, 348, 353, ¶¶ 1-5, 14, 32. Thus, unlike the Committee, the successful parties in those cases ensured that the voters who enacted those measures had a remedy for the violation of their voter-approved laws.

¶9 Second, the rights of societal importance that we held were vindicated in both Meyer and Cave Creek were not the right of initiative, but the rights guaranteed by measures the voters had already approved. See Meyer, 246 Ariz. at 196, ¶¶ 30-31; Cave Creek, 231 Ariz. at 353, ¶ 35. In both instances, the successful party's primary motive of the litigation was toprovide a public benefit, not achieve a personal gain.⁵ See Kadish v. Ariz. State Land Dep't, 155 Ariz. 484, 498 (1987) (opinion of Feldman, J.) ("[P]etitioners seek no recovery for themselves, and will achieve no personal advantage. They do not act for their own benefit, nor even for the benefit of a particular class or group, but only for the purpose of vindicating the interests of the entire citizenry of the state of Arizona."); see also State Bar of Ariz., Arizona Attorneys' Fees Manual § 6.4.4.3, at 6-21 (Bruce E. Meyerson & Patricia K. Norris eds., 6th ed. 2017) ("guiding principles" for determining whether party vindicated right of societal importance include a party's "motive"; when motive to litigate is "primarily for personal gain, with the public benefit being incidental, application of the private attorney general doctrine has generally been denied").

¶10 In contrast, the Committee's primary motive in this litigation was to preserve the chance for its initiative to become voter-approved law. Plaintiffs argued the initiative was invalid and should not appear on the ballot because the Committee, its formation, its signature-gathering process, and the initiative itself violated various legal requirements. Consequently, the Committee's success in keeping the measure on the ballot did not establish or expand the initiative power; it merely provided the single opportunity for citizens to exercise their right to vote on the Committee's initiative. And conversely, if Plaintiffs had been successful in demonstrating that the Committee had not satisfied all prerequisites for placement of the measure on the ballot, the right of initiative established under Arizona law would not have been "harmed."

¶11 The right the Committee vindicated was not of "societal importance," and the superior court did not abuse its discretion in declining to award the Committee attorney's fees under the private attorney general doctrine.

B. Section 19-118(F).

¶12 Section 19-118(F) states:

Any person may challenge the lawful registration of circulators . . . . The prevailing party in an action to challenge the registration of a circulator under this section is entitled to reasonable attorney fees.

¶13 The superior court ruled that § 19-118(F) only allows recovery of reasonable attorney's fees incurred while litigating the circulator-registration issue. The court also found that most of the time entries in the Committee's billing records did not clearly relate to the circulator-registration challenge. Consequently, it awarded $4,107.50 in fees, based on specific time entries that "clearly relate[d] to the parties' [circulator-registration] dispute." These time entries included researching case law and drafting responses to Plaintiffs' circulator-registration challenge, and preparation and facilitation of experts' testimony on the challenge.

¶14 The Committee makes only one argument: It was "difficult to divide the hours expended defending" only the circulator-registration challenge because the challenge was "intertwined" with the other issues; therefore, the Committee should have received all its fees and the superior court abused its discretion when it awarded only $4,107.50 in fees. We review the amount of the superior court's attorney's fees award for an abuse of discretion. Lee v. ING Inv. Mgmt., LLC, 240 Ariz. 158, 161, ¶ 11 (App. 2016).

¶15 The Committee cites no authority indicating a party may recover fees under § 19-118(F) for issues that were "intertwined" with a circulator-registration challenge, nor are we aware of any such authority. We have considered Arizona caselaw recognizing that a party may recover its attorney's fees for tort claims that are "interwoven" with a qualifying contract claim under A.R.S. § 12-341.01 (2019). See Modular Mining Sys., Inc. v. Jigsaw Techs., Inc., 221 Ariz. 515, 521-22, ¶¶ 22-23 (App. 2009) (citing cases). When determining whether claims are interwoven in that context, the focus is on whether the claims are based on the same facts and involve the same legal issues. See Sparks v. Republic Nat'l Life Ins. Co., 132 Ariz. 529, 542-44 (1982) (bad faith tort and breach of contract both involved breach of contract); Modular Mining Sys., 221 Ariz. at 522-23, ¶¶ 23-26 (breach of contract and trade secret, unfair competition and tortious interference tort claims all based on misappropriation of trade secrets); see also Pettay v. Ins. Marketing Servs, Inc. (West), 156 Ariz....