State ex rel. Brnovich v. Ariz. Bd. of Regents

250 Ariz. 127

476 P.3d 307

STATE of Arizona, EX REL. Mark BRNOVICH, Attorney General, Plaintiff/Appellant,

v.ARIZONA BOARD OF REGENTS, Defendant/Appellee.

No. CV-19-0247-PR

Supreme Court of Arizona.

Filed November 25, 2020

Mark Brnovich, Arizona Attorney General, Brunn "Beau" W. Roysden III (argued), Solicitor General, Joseph A. Kanefield, Chief Deputy and Chief of Staff, Evan G. Daniels, Drew C. Ensign, Robert J. Makar, Katherine H. Jessen and Dustin D. Romney, Assistant Attorneys General, Phoenix, Attorneys for State of Arizona

Paul F. Eckstein, Joel W. Nomkin (argued), Shane R. Swindle, Thomas D. Ryerson, and Austin C. Yost, Perkins Coie LLP, Phoenix, Attorneys for Arizona Board of Regents

William G. Klain (argued), Michelle H. Swann, Brian J. Pouderoyen and Jason A. Clark, Lang & Klain, P.C., Attorneys for Amici Curiae John A. "Jack" LaSota, Robert Corbin, Terry Goddard and Thomas Horne

Whitney DuPree, King & Spalding LLP, Atlanta GA; Paul Alessio Mezzina, King & Spalding LLP, Washington, DC; Matthew Warren, King & Spalding LLP, Chicago, IL, Attorneys for Amici Curiae Law Professors

Noel Fidel, Law Office of Noel Fidel, Phoenix, Attorneys for Amici Curiae Secretary of State and Superintendent of Public Instruction

Aaron M. Duell, Burch & Cracchiolo, P.A., Phoenix, Attorney for Amicus Curiae The James G. Martin Center for Academic Renewal

Dominic E. Draye (argued), Greenberg Taurig, LLP, Phoenix, Attorneys for Amici Curiae Governors of the State of Arizona

Brett W. Johnson, Colin P. Ahler, and Tracy A. Olson, Snell & Wilmer, L.L.P., Phoenix, Attorneys for Amici Arizona State Treasurer Kimberly Yee, Arizona Commerce Authority, Arizona Chamber of Commerce and Industry, Greater Phoenix Chamber of Commerce, Greater Phoenix Economic Council, Greater Phoenix Leadership, League of Arizona Cities and Towns, Arizona Chapter of NAIOP: The Commercial Real Estate Development Association, Southern Arizona Leadership Council, and Valley Partnership

JUSTICE BOLICK authored the opinion of the Court, in which VICE CHIEF JUSTICE TIMMER, JUSTICES GOULD, LOPEZ, BEENE, MONTGOMERY and JUDGE ESPINOSA joined.^*

JUSTICE BOLICK, opinion of the Court:

¶1 The Attorney General filed a lawsuit against the Arizona Board of Regents ("ABOR" or the "Board") alleging that (1) its tuition-setting policies violate article 11, section 6 of the Arizona Constitution and (2) subsidizing in-state tuition for students who are not "lawfully present" constitutes an unlawful expenditure of public funds. The trial court dismissed the action, holding that the Attorney General lacked constitutional or statutory authority to litigate it, and the court of appeals affirmed. We agree with those courts that the Attorney General is not authorized to proceed with the first set of claims, but we hold that the trial court erred by granting the motion to dismiss the latter challenge.

BACKGROUND

¶2 The Attorney General's lawsuit against ABOR consists of six counts. Counts I–V allege that the Board's policies violate the constitutional guarantee that instruction provided by Arizona postsecondary institutions "shall be as nearly free as possible." Ariz. Const. art. 11, § 6. Count VI alleges that by subsidizing in-state tuition for students who are not "lawfully present," ABOR violated A.R.S. §§ 15-1803(B) and -1825(A), failed to collect monies as required by A.R.S. § 35-143, and caused illegal payment of public monies in violation of A.R.S. § 35-212. The initial complaint requested declaratory, injunctive, and special action relief. The Attorney General subsequently amended his complaint to seek recovery of illegally spent public monies. The trial court dismissed the complaint with prejudice, concluding that the Attorney General lacked authority to bring the lawsuit.

¶3 While this case was pending on appeal, this Court ruled in State ex rel. Brnovich v. Maricopa Community College District Board that it was illegal for state postsecondary institutions to award in-state tuition to students who were not lawfully present. 243 Ariz. 539, 540 ¶ 1, 416 P.3d 803, 804 (2018). Thereafter, ABOR announced it would discontinue providing in-state tuition to such students.

¶4 The court of appeals in this case affirmed the trial court. Citing Arizona State Land Department v. McFate , 87 Ariz. 139, 348 P.2d 912 (1960), the appeals court concluded that the Attorney General only possesses authority that is specifically granted by statute and that A.R.S. § 41-193 did not provide authority to bring Counts I–V. State v. Arizona Bd. of Regents (ABOR ), No. 1 CA-CV 18-0420, 2019 WL 3941067, at *3 ¶¶ 12–13 (Ariz. App. Aug. 20, 2019) (mem. decision).¹ As for Count VI, the court noted that because ABOR ceased providing in-state tuition to students who were not lawfully present, the request for injunctive relief was moot, but it proceeded to assess the claim because the Attorney General also sought declaratory and monetary relief. Id. at *2 ¶¶ 10–11. The court concluded that, because "collecting tuition does not constitute a ‘payment’ under A.R.S. § 35-212," and "the State did not identify any qualifying ‘payment’ " that constituted an illegal expenditure, Count VI was also properly dismissed. Id. at *3 ¶¶ 15–16.

¶5 All three members of the appeals court panel joined in a concurring opinion asserting that " McFate’ s interpretation of ‘prosecute’ in A.R.S. § 41-193(A)(2) appears to be flawed." Id. at *4 ¶ 22 (Morse, J., joined by Campbell & Cruz, JJ., specially concurring). Although acknowledging that legislative acquiescence and stare decisis might counsel against overruling McFate , the judges closely examined the meaning of the term "prosecute" in the statute and suggested it was at odds with its narrow application in McFate . Id. at *4–6 ¶¶ 23–33.

¶6 We granted review to determine whether the Attorney General's complaint was authorized by A.R.S. § 41-193(A)(2) and/or § 35-212 —a question that necessarily encompasses considering the fate of McFate , which the Attorney General asks us to reconsider—and, if the complaint was authorized, whether dismissal of Counts I–V was required on the grounds of political question or whether legislative immunity required dismissal of the complaint in its entirety. All of these are issues of statewide importance. We have jurisdiction pursuant to article 6, section 5 of the Arizona Constitution.

DISCUSSION

¶7 We review dismissal of a complaint de novo. Coleman v. City of Mesa , 230 Ariz. 352, 355 ¶ 7, 284 P.3d 863, 866 (2012). Dismissal is appropriate "only if ‘as a matter of law [ ] plaintiffs would not be entitled to relief under any interpretation of the facts susceptible of proof.’ " Id. at 356 ¶ 8, 284 P.3d at 867 (quoting Fid. Sec. Life Ins. Co. v. State Dep't of Ins., 191 Ariz. 222, 224 ¶ 4, 954 P.2d 580, 582 (1998) ). Looking only to the pleadings, we "must assume the truth of all well-pleaded factual allegations and indulge all reasonable inferences from those facts, but mere conclusory statements are insufficient." Id. ¶ 9.

Counts I–V

¶8 In Arizona, unlike some other states, the Attorney General has no inherent or common law authority. Instead, our constitution provides that "[t]he powers and duties of ... [the] attorney-general ... shall be as prescribed by law." Ariz. Const. art. 5, § 9. Therefore, the authority of the Attorney General must be found in statute. See, e.g. , Shute v. Frohmiller, 53 Ariz. 483, 488, 90 P.2d 998 (1939) (observing that the Attorney General has no common law powers and that the term "prescribed by law" in article 5, section 9 refers to statutes), overruled in part on other grounds by Hudson v. Kelly , 76 Ariz. 255, 263 P.2d 362 (1953).

¶9 The Attorney General asserts he is authorized to challenge ABOR's policies that allegedly violate the "nearly free as possible" provision by A.R.S. § 41-193, which establishes the Department of Law and specifies its duties. Section 41-193(A)(2) provides that the department "shall ... [a]t the direction of the governor or when deemed necessary by the attorney general, prosecute and defend any proceeding in a state court other than the supreme court in which the state or an officer thereof is a party or has an interest."

¶10 The Attorney General interprets this language as conferring upon him the authority to file a lawsuit, even against other state agencies, when he finds that the state has an interest in the matter. The "interest" he identifies is "requiring governmental actors to demonstrate compliance with constitutional commands": here, complying with the constitutional mandate that the state provide university tuition as nearly free as possible. By this broad reading of § 41-193(A)(2), the Attorney General would generally be free to initiate legal challenges against other state officers and agencies any time he concludes they are violating the law.

¶11 The Attorney General recognizes that McFate forecloses such a broad reading of § 41-193(A)(2). There, the Court considered "whether the Attorney General had standing to institute on behalf of the State of Arizona" an action against the Arizona State Land Department to enjoin a land sale that, inter alia , allegedly violated the state constitution. ²

87 Ariz. at 140–41, 348 P.2d 912. The Court held that § 41-193(A)(2) did not authorize the action, id. at 145–46, 348 P.2d 912, basing its holding on two propositions. First, "the assertion by the Attorney General in a judicial proceeding of a position in conflict with a State department is inconsistent with his duty as its legal advisor"; hence, such an action is permissible only if specifically authorized by statute. Id. at 144, 348 P.2d 912. Second, the statute "presupposes a properly instituted proceeding in which the State or an officer thereof ‘is a party or has an interest’ and does not permit the Attorney General, in the absence of specific statutory power, to initiate an original proceeding." Id. at 145, 348 P.2d 912. The Court derived that holding from its conclusion that the term "prosecute," in...